UC Rusal Plans to invest $7bn on a nuclear-powered smelter

UC Rusal is planning to invest up to $7bn in building a nuclear-powered aluminium smelter that will be the world’s biggest, signalling a return to the kind of industrial mega-projects last seen in Russia during the Soviet era. The world’s biggest aluminium producer said on Tuesday it had reached agreement with the regional government of Saratov, on the River Volga in European Russia, to build a smelter with a capacity of 1.05m tonnes of aluminium a year. It will also build two additional reactors, capable of generating 2,000 MW, at an existing four-reactor nuclear power plant at Balakovsky. The plan is the latest sign of a shift in Russia from increasing productivity from existing capacity towards investment in new plants. It comes as the country prepares to spend hundreds of billions of dollars in coming years on upgrading its social, industrial and transport infrastructure. It may also bolster efforts by tycoons such as Oleg Deripaska, the billionaire who owns two-thirds of Rusal, to show they are no longer milking Soviet-era assets – often obtained at knockdown prices – but are investing in Russia’s future. UC Rusal, formed through the merger of Russia’s Rusal and Sual with the alumina assets of Switzerland’s Glencore, produced 4m tonnes of aluminium last year, but may soon be eclipsed as the world’s biggest producer when Rio Tinto, the mining group, takes over Canada’s Alcan. The Russian group has for some time been studying using nuclear power to run smelters. It has already signed a memorandum of co-operation with Rosatom, the Russian nuclear energy agency, to look into building a smelter and reactor complex in Russia’s far east. Its other biggest facilities, including the world’s number one and two smelters at Bratsk and Krasnoyarsk, are thousands of miles away in Siberia, run by hydroelectric power from some of the world’s biggest dams.