Corporate Raiding: Illegal American Sanctions Huge Roadblock for Russian Aluminum Giant on World Market
Russian-based Rusal, the world's largest aluminum producer, is facing challenges. The illegal American sanctions significantly limit our chances of selling aluminum abroad via the London stock exchange, for example. The Kremlin called it corporate raiding because the problem is that it's an unfair trade practice. Rusal is the most state-of-the-art company in the aluminum production industry, a company that was winning in a fair, competitive free market environment. Now Trump is dealing a low blow to the leading company as he tries to get it disqualified from the race. He wants to seize the initiative and corner the entire planet's aluminum industry. The US President has already used the same unethical practices in the European gas market. Americans are not able to compete fairly; Gazprom is winning every round. Only sanctions can help them promote their gas in Europe, even though their gas is far more expensive for ordinary Europeans. OK then, aluminum is going to be expensive as well. As a result, the new estimates of Rusal's capabilities are quite modest. It'll have to work hard to find a profitable solution. This example shows that the US is ready to kill off the romance of the free market as they impose ultimatums and basically set new trade rules for the whole planet. The global economy is going to get brutally reformed.
Dimitry Kaistro with the details.
Molten aluminum is poured into buckets and taken to the foundry. The giant furnaces heat up to 700°C (~1300 °F). Afterward, the metal is poured into smelt ingots. Here's a perfect 16-kg aluminum ingot. It's still hot from the furnace. These ingots are made of pure aluminum. The Sayanogorsk factory also produces different alloys. In total, 800,000 tons of aluminum are produced every year. Aluminum is indispensable in the most important industries and construction projects. No cars or aircraft can be manufactured without aluminum. It's also a key component in smartphones, home appliances, and sensitive equipment. The products of the Sayanogorsk factory are in demand all over the world.
Alexander Pushin, Rusal: "We supply aluminum to Europe and Asia and send it for domestic processing as well. We produce more than 80% of the added value alloys. It's the highest quality aluminum one could get".
Evgeny Popov, Rusal: "Today we are the world's leading producers of certain product segments because we have learned to make high-quality products with much less loss and waste than our foreign counterparts".
Only Russia has the opportunity to supply aluminum to world markets in such huge volumes of such high quality and at such a very attractive price made possible by affordable hydroelectric power. The pride of the industry — the famous Sayanogorsk Aluminum Factory in Khakassia was built in 1985 by the Soviet Union. This colossus made the USSR the world leader. As all aluminum facilities, the Sayanogorsk factory was on the verge of total collapse in the 90s: the shops were desolated, there was a lack of contracts, and unemployment was rampant. Domestic consumption decreased almost ninefold. Focusing on exports was the only thing that could help the factory escape the crisis. The revival of Russian industry began here in Sayanogorsk.
In 1994, Oleg Deripaska became the general director of the enterprise.
Oleg Deripaska: "In 1995, we stood in front of a dilemma: either continue standing at the edge of the abyss, fully depending on the aluminum market fluctuations and export pure aluminum, or accumulate all our resources and launch a new program producing aluminum alloys".
The situation was gradually changing. In 2006, a new aluminum factory opened in Khakasia with the most advanced equipment in Russia. The following year became a new landmark: Rusal, the world's largest aluminum producer, was founded. Today it is the largest such holding in the world. It combines aluminum and alumina assets around the world. Raw materials come from all over the planet, including Guinea, Ireland, and Jamaica. The total capacity of the subsidiary companies' aluminum plants is almost 4.5 million tons per year. The alumina plants produce more than 12 million tons. In terms of revenue, Rusal comes second only after the biggest fossil fuel corporations. Its history of development is called the "Golden Age of Aluminum". The Russian company is the main supplier of this metal to Europe. Airbus, BMW, Volkswagen, Siemens, and Daimler desperately need Russian aluminum.
40% of all aluminum in the European industry comes from Russia, literally from these shops. Taking care of its own economic interests, the US seems to be absolutely indifferent to the needs of the European manufacturers. While giant European corporations don't just desperately need Russian aluminum, they literally won't be able to find a replacement quickly enough. In order to get a ton of aluminum, you need almost two tons of alumina, half a ton of carbon and about 15,000 kWh of electricity. The latter is provided by the nearby Sayano-Shushenskaya HPP, whose power was taken into account when the factories were built. Aluminum and its alloys are not the only products of the factories in Sayanogorsk. They also produce packaging foil.
Gennady Gamanovich, Rusal: "The production of aluminum foil begins in this furnace. Liquid metal is poured into the furnace, mixed, and then processed. The furnace heats up to 1000°C (~1800°F)".
The range of products is incredible: smooth, printed, laminated foil for food packaging, painted, embossed, and thermo-lacquered. More than half of the output is exported to 46 countries on five continents.
Gennady Gamanovich, Rusal: "The minimal thickness of our foil is 4.5 micrometers. It's 4 times thinner than a human hair".
7,000 people work at this factory. The production never stops so they work 24/7.
Alexey Kulikov comes from a family of smelters.
Alexey Kulikov, smelter: "We are all bound to this factory. All social projects are aimed at our city. For us, Rusal is life".
Leonid Bykov, Mayor of Sayanogorsk: "It's a city-building enterprise; small and medium-sized business depends on it".
Rusal is the main "donor", not only for Sayanogorsk but for all of Khakassia.
Lyudmila Martyushova, head physician: "The construction of the city hospital was funded by Rusal. It serves 65,000 people. It also accepts patients from the Biysk, Shushinski, and Alzaysk districts. Those who live nearby receive their treatment here".
The factory supports community centers, gyms, and even playgrounds.
Vitaly Abakayev, resident of Sayanogorsk: "Very few companies do this much for the community. Rusal does a great job".
Social responsibility, cutting-edge technology, and flawless fulfillment of international obligations are the basic principles of the company's philosophy, a company that works on hundreds of important projects in Russia and abroad.
Dimitry Kaistro, Tatiana Korolyova, Timur Aldynbayev, Dimitry Frolov, and Oksana Bezyuk Vesti: News of the Week.