Rusal fighting for Karelian hydropower

Rusal needs to buy a local hydropower station in order to secure profitable production at its Nadvoitsy plant in the Republic of Karelia.

In a bid to save its Nadvoitsy plant, the aluminum company is trying to buy a local hydropower plant from Gazprom.

The aluminium producer, the world’s biggest, is stepping up its efforts to save the Karelian plant from closure. The company is now ready to pay $48 million for the Ondskaya hydropower plant, a generating station located in the Republic of Karelia near the Nadvoitsky aluminium plant.

As previously reported, Rusal in 2012 announced that it would close the Nadvoitsky plant as part of a major cost optimization program. The decision was later reversed following reactions from regional and federal authorities.

The Nadvoitsy plant employs about 800 people. It was built in 1954 and has an annual production capacity of 81,000 tons of aluminium.

Rusal now tries to convince Gazprom that it should sell the Ondskaya hydropower plant. However, the gas company appears reluctant. Gazprom owns the TGK-1, the company which runs a number of generating units in Murmansk, Karelia and Leningrad Oblast, including the Ondskaya station.

The issue is now on the table of President Putin. According to newspaper Vedomosti, Rusal representatives last week met with Presidential Andrey Belousov to discuss the issue.

Rusal is experiencing major challenges at its Russian production facilities as aluminium prices are dropping and power prices increase.