In Russia

Russia’s aluminium industry was born on the 14 May 1932, when the first batch of the metal was produced at the Volkhov smelter in Leningrad Region. A year later, the Dneprovsky Metallurgical Plant in Ukraine released their first batch of product.

Despite the fact that these companies were constantly expanding production throughout these years, they could not fully meet the growing needs of the country’s economy. In the USSR, the construction of new companies was under way. In 1938, the Tikhvisnky (later renamed Boxitogorsk) alumina refinery with a production capacity of 40,000 tonnes per year, and in 1939, the Uralsk aluminium smelter began operating, capable of producing 70,000 tonnes of alumina and 25,000 tonnes of aluminium each year.

World War II provoked an industrial development in the Eastern regions of the country. As a large part of the country was at risk of occupation, industrial plants were evacuated on an unprecedented scale. Major equipment from the Volkhov and Tikhvisnky smelters was disassembled and shipped to the Ural district and Western Siberia, where it was used for the construction of the Bogoslovsk and Novokuznetsk aluminium smelters. In 1943, the first Siberian aluminium was produced, and two years later, the Bogoslovsk aluminium smelter issued their first output.

In the post-war years of the Soviet economy, consumption of metal products continued to grow, which facilitated intensive development of aluminium production. In the 50s, the Kandalaksha (1951), Nadvoitsy (1954), and the Volgograd (1959) aluminium smelters were commissioned, as well as the Belaya Kalitva Metallurgical Production Association (BKMMA, 1954), specialising in producing various products from aluminium alloys. In 1960, the Samarsky metallurgic plant was launched, the leading producer of semi-finished and finished products from aluminium.

Along with the aluminium processing plants, the construction of alumina companies was taking place in the USSR. In 1959, the Pikalyovo plant was launched, a company processing nepheline concentrate from the Kola region. In 1964, the Pavlodar plant began operating in Kazakhstan. In 1970, the first batch of production from the Achinsk alumina refinery was produced.

In the 60s, the Irkutsk, Krasnoyarsk and Bratsk aluminium smelters were built in the immediate vicinity of the biggest Hydropower Plants, which are sources of cheap energy. The Krasnoyarsk metallurgic plant, the Pavlodar sky aluminium smelter and the Dmitrov pilot aluminium can sheet plant were all commissioned in the same period.

In response to the rapid growth of aluminium production and poor domestic raw materials for Russian metallurgy, it was necessary to purchase alumina abroad, in Guinea, India and other regions. The Nikolayev alumina refinery in Ukraine became the first facility in the sector engineered to work with high-quality imported raw materials. Built in 1980, the NAR began processing African bauxite.

In 1985, the Sayanogorsk aluminium smelter was ready for use, technological and equipped by modern machinery. However, at the beginning of the 90s, the economic recession and political instability dealt a serious blow to the Russian aluminium industry. After the breakup of the Soviet Union, the struggle to supply raw materials worsened. The alumina refineries situated in Ukraine, Kazakhstan and Azerbaijan appeared in foreign countries. Russian companies could only meet 40% of the aluminium smelters’ demands for raw materials.

Furthermore, due to changes in economic structure, the demand for aluminium from the military-industrial complex and heavy machinery was reduced, which consumed a large part of products made from domestic aluminium production.

By 1994, aluminium consumption in Russia dropped to 2kg per capita, whereas in the 80s, for example, this indicator reached 17kg. As a result of the aluminium industry falling into crisis, the only option was market reorientation of the sector towards foreign markets.

Over the last 25 years, the global aluminium consumption has grown more than 2.6 times, while at the same time the aluminium consumption by industrial companies in Russia and other CIS countries decreased by a third.

Thereby the production of the metal improved more than 30% since 1991, however 80% of all aluminium produced in the Soviet Union was exported due to low demand for the metal on the part of the processing plants. Currently, Russia is lagging behind the global average in terms of per-capita aluminium consumption, at approximately 5.4kg per person compared to the global level of 7.7kg. Aluminium consumption is closely linked to the development of high-tech industrial sectors (automotive, aviation, aerospace project, electronics etc.), indirectly low consumption of aluminium and aluminium alloys shows exacerbated technological gap between Russia’s economy and the economy of various other countries.

The situation is linked to the existing problems in the sector, which will lead to incapacity of national companies to provide the required amount of production output.

Firstly, a significant part of the current capacity not provided by modern machinery is either in poor conditions, which makes it difficult to increase output of products that comply with the standards of market quality.

Secondly, there is lacking a stable system of product distribution due to economic recession in general and low solvent demand, as well as due to lack of widespread information, meaning that the end consumer and the producer simply never ‘connect’.

Thirdly, a high level of cost, and as a consequence, high production costs lower the competitive edge of the Russian products compared to deliveries from China, for example.

The results of this situation mean that new types of products are not being developed and major inter-sectoral projects are not being implemented, including in aviation and ship construction.

Additional deterrent factors are the current GOST and SNIP standards, which limit the use of aluminium, for example, in the construction of bridges, and implementing new standards and regulations involves significant financial expenditure that is crippling for individual producers.

The aluminium industry is one of the fundamental sectors of the economy. In other words, aluminium consumption is closely linked to economic development in general, and in particular, industrial production. At the same time the current predictions for economic growth don’t allow for opportunities to significantly increase the amount of aluminium consumption.

In order to break this vicious cycle, focus must be directed to the advanced development of the aluminium sector and the development of export potential, not only of primary aluminium, but also of high value-added technological aluminium products.