Invinity Energy Systems (AQSE:IES)
Historical Stock Chart

From Jun 2019 to Jun 2024

World largest aluminum maker United Co. Rusal (0486.HK) said Thursday it had agreed to buy the power station that supplies one of its Urals plants, thus solving a high electricity tariff problem there.

Rusal said it has agreed to buy Bogoslovsk power station, which supplies its Bogoslovsk aluminum smelter from IES Holding Ltd. (IES.TV), controlled by billionaire Viktor Vekselberg.

Rusal declined to comment when asked to clarify the details of the deal.

The deal was agreed with the mediation of the Ministry on Industry and Trade and the Ministry of Energy, as well as Prime Minister Vladimir Putin, who Thursday mentioned the deal in his comment put up on the government's website.

"The electricity tariff has grown considerably in the recent time, which has immediately made the Bogoslovsk smelter unprofitable," Putin said, according to the government website. "The local authorities setting the tariff, based on the general needs of the region, shouldn't put some enterprises on the brink of bankruptcy."

Rusal said it will now focus on bringing the Bogoslovsk smelter to a break-even point and over the next five years will upgrade it, keeping the production rates at the level no lower than that in 2011.

The plant, employing 3,300 people according to Putin, has an annual production capacity of 187,000 tons of aluminum. It wasn't immediately clear how much aluminum Rusal planned to produce at the smelter this year.

Interfax reported on Nov. 15, citing the Minister of Industry of the Sverdlovsk region (where the plant is located) Alexander Petrov that Rusal was planning to partially close the smelter citing the unprofitability of the production at the facility.

Rusal said at the time it was closing some of the electrolysis baths at the plant to "optimize" the production as the electricity tariffs had grown too high, according to Interfax.

-By Nadia Popova, Dow Jones Newswires; +7 495 232-9192, nadia.popova@dowjones.com