Aluminum producer Rusal promises to ‘minimize the socioeconomic consequences’ of mothballing the plants whose closure once forced Putin to intervene

Aluminum producer Rusal plans to temporarily mothball part of its raw materials production in Russia, the business daily Kommersant said, citing a letter seen by journalists that the company sent to Prime Minister Mikhail Mishustin.

The plan includes the Pikalyovo Alumina Refinery (PGLZ), the Severouralsk Bauxite Mine (SUBR), and the alumina-producing Bogoslovsk and Ural plants, according to Kommersant.

The enterprises generate $800 million in annual losses for Rusal, and the company estimates it will need $1.8 billion in investment to restore its raw materials division.

Rusal asked the government to consider state support for regions and municipalities, promising to “minimize the socioeconomic consequences” of the mothballing.

One source in the metals market told Kommersant the main risk of the mothballing is potential layoffs in the company towns where the plants operate, particularly Krasnoturyinsk, Severouralsk, and Kamensk-Uralsky.

Pikalyovo, a company town in the Leningrad region, became one of the major flashpoints of social unrest in 2009. After the town’s three main employers — an alumina plant, a cement plant, and a chemical plant — shut down, unemployed residents took to the streets and blocked the federal highway between Novaya Ladoga and Vologda. Then-Prime Minister Vladimir Putin traveled to the town. The State Duma, the lower house of Russia’s parliament, called what happened in Pikalyovo “an example of irresponsible behavior by business.” The plants’ operations were eventually restored.