Russian state-owned power company RusHydro is uncertain about its planned investment in United Co. Rusal PLC's proposed Taishet aluminum smelter project in Siberia due to U.S. sanctions on Russian entities and individuals, Reuters reported Sept. 10, citing RusHydro head Nikolai Shulginov.
In April, RusHydro's board approved joining the project, but Shulginov said, "Now, taking the sanctions into account, everything has changed. We have to get back, maybe to recalculate our model: what will happen to the aluminum prices, to the electricity prices ... There are lots of 'buts.'"
Work on the smelter started in 2006; however, it was put on ice in 2009 due to a weak aluminum market. The project was restored in 2017 following a recovery in prices.
"Several months ago, before the sanctions had been toughened, we were at the stage of taking the decision on joining the project under certain conditions," Shulginov said.
Taishet is designed to produce 428,500 tonnes of aluminum per annum.
A meeting the week of Sept. 10 in Berlin to finalize metal supply agreements for 2019 will see European customers avoiding deals with Rusal due to the sanctions, sources familiar with the discussions recently told Reuters.