When President Vladimir Putin recently visited South Korea, Korean officials indicated there was interest in Seoul for a proposal to build a new aluminum smelter at Taishet, in the Irkutsk Oblast. The site is 200 km west of the Bratsk Aluminum Works (BrAZ), Russia's largest smelter.

The Taishet project is the brainchild of Boris Gromov, former general director of Bratsk Aluminum Works (BrAZ). He was ousted from his post last July, after he and other shareholders in the plant sold their interests to the Russian Aluminum combine, headed by Oleg Deripaska.

Russian Aluminum then announced it had investigated Gromov's project plans, but decided not to go ahead with them.

Maxim Remchukov, a spokesman for Deripaska, said Russian Aluminum proposed investing "first and foremost into boosting the efficiency of production at the least efficient plants," without spending on the creation of new ones.

He said that modernizing the "most backward production capacities at Bratsk should generate a 10-15 percent increase of production of primary aluminum at BrAZ in about four months." If successful, this may mean an additional 10,000 tons per month from BrAZ. End of the year data, issued by Russian Aluminum to The Russia Journal, show that BrAZ raised its output by 3.7 percent to 895,272 tons of primary metal.

Industry experts at the Aluminy Partnership in Moscow said they expect modernization at BrAZ and Krasnoyarsk Aluminum Works (KrAZ) to lift output this year by 1-3 percent.

There were reports of South Korean investment interest in the Taishet project last autumn, although no details have emerged confirming the identity of the Korean companies. Taishet is located on the trans-Baikal rail line known as BAM, constructed in the Soviet period. Gromov has been planning to employ construction companies that have remained at Taishet since that period. The Irkutsk Oblast has provided some stimulus for the local industry.

According to industry sources, Gromov's plan calls for output of up to 300,000 tons of primary metal per annum. No commitments were signed during the Putin visit to Seoul.

Two other new aluminum smelter projects in the Leningrad Oblast in northwestern Russia face an equally uncertain future, despite local lobbying with foreign investors.

One new smelter has been under consideration by the Northwestern Aluminum (Aluminy Severo-Zapada) group, a consolidation unit that has been under negotiation by the Volkhov Aluminum Plant, the Pikalevo Alumina Refinery and the Volgograd Aluminum Works. The two controlling shareholders behind the negotiations are Alexander Sabadash, who controls Volgograd; and Alexei Shmargunenko, chairman of the board at Volkhov.

They have been unable to agree on a single plan, founded on cheap electricity from the regional nuclear reactor, with backing from the regional governor. Volkhov is the oldest and smallest aluminum producer in Russia. Established in 1933, its current capacity is 20,000 metric tons per year. Output in 1999 was 16,961 tons; it gained 21 percent last year to 20,523 tons.

Volgograd, built in 1959, has a capacity of 141,000 tons per year, and output was just over that last year. That represented an increase of 9 percent over its 1999 level.

According to data provided by the Aluminy Partnership, Pikalevo suffered from a disruption of nepheline supplies early last year, causing output of alumina to fall from 214,000 tons in 1999 to 191,000 tons.

A Leningrad Oblast official noted that news reports on the smelter project were contradictory and misleading. He said that Aluminy Severo-Zapada "doesn't have anything to do with the plan to construct the new aluminum plant."

The initiative, according to Valentin Sidorin, spokesman for Leningrad Oblast Governor Valery Serdukov, comes from the oblast, which has opened negotiations "with several U.S. companies specializing in construction of aluminum plants. The idea is to construct a plant that can work with both imported alumina and the raw materials from the Leningrad Oblast [Boxitogorsk and Pikalevo]."

"The oblast has reserves in bauxite that were not used because Volkhov takes only a small amount for its production," Sidorin said, "In principle, the plant can work on local raw materials, although this will require investment into proving the reserves of the local deposits and mining more bauxite."

Speculation in the industry followed the oblast’s announcement. But according to the Aluminy Partnership, Sabadash and Shmargunenko are now thinking of building their own separate smelters: one at Vsevolzhsk and one at Tikhvin in the Leningrad Oblast. Each project has a target capacity of between 100,000 and 200,000 tons.

Sidorin's prediction of interest by U.S. companies in the project has so far failed to materialize.

According to the Aluminy Partnership, the collapse of the single new smelter as an idea may have put an end to another project to increase alumina capacity at Pikalevo.