Rusal set to implement ambitious nuclear power project

MOSCOW. On October 9, United Company Russian Aluminum (UC Rusal), owned by billionaire Oleg Deripaska, announced that it planned to invest about $7 billion into the construction of the world's largest aluminum plant. The plant will have an annual design capacity of over a million metric tons and two 1,000 megawatt reactors at the Balakovo nuclear plant located in the Saratov Region on the Volga River. This mega-project must be implemented because Soviet-era facilities are no longer enough to power the rapidly growing Russian industry. Rusal already owns the largest aluminum production facilities in Bratsk and Krasnoyarsk that turn out nearly a million metric tons a year each, and continues to expand production in order to meet growing global demand. This new giant enterprise will help increase aluminum output by 25% and the two nuclear reactors will further enhance Rusal's power-generation potential. Deripaska does not want to depend on utility giant Unified Energy Systems (UES) for power, so the increase in power-generation potential is important. Thus far Rusal has signed a cooperation agreement with the Saratov region government and plans to complete a feasibility study by late 2008. However, the project's implementation will depend on Rusal's cooperation with the Federal Atomic Energy Agency (Rosatom), which controls all Russian nuclear power plants. Rusal hopes to buy into the Balakovo NPP after national legislation is amended with Rosatom's help. But the latter and other government agencies must also include this NPP into the federal reactor-construction program. The Balakovo NPP is not yet listed in the federal program because the Saratov region has too many power-generation facilities, but the situation will change after the aluminum plant starts operating. Russia, which has a limited power-engineering potential, cannot build more than two nuclear reactors per year in line with the above-said federal program, but Rusal wants to join the program, no matter what. If implemented, the Balakovo project would be the first private venture in the Russian nuclear power industry. This project would also convince the government, which channels hundreds of billions of dollars into the social, industrial and transport infrastructure, that the nation's oligarchs have stopped exploiting the cheaply bought Soviet-era facilities and are embarking on major investment projects.