The Aluminum Wars – RUSAL and the New Russian Economic Power
Aluminum doesn’t strike many people as an exciting or interesting metal, but a new book “Mafia In Black” by Andrei Kalitin outlines a story that would see the so-called “aluminum wars” waged and claim more than 100 lives.
From this turbulent period, RUSAL has become a symbol of the new Russian economic power.
Russia has emerged not only as an economic force in aluminum, but is important to the world economy in terms of a host of commodities.
The Aluminum Wars
In the “aluminum wars”, rivals fought for control of Russian smelters in the 1990s. Today, these days are behind us and the wars are over, but the rise of RUSAL has seen how high it was in Game.
Of course, there were winners and losers in the aluminum wars and this is covered in Andrei Katitin’s new book “Mafia in Black” (he recently claimed he was shot in the shoulder by a gunman outside his apartment and believes it to be related with the book) “Mafia in Black” is a fascinating read, in a period of immense change in Russian society and the economy in general.
The rise of the Russian oligarch on a global stage
The story of the “aluminum wars” is of interest to many observers of Russian society as it covers a period when the country was in a transition to a free market economy from the former regulated Soviet economy.
An important question that interests many Russia watchers is: how did the Russian mega-rich make their money?
This interest increased when one of the richest men in Russia entered West London and bought Chelsea FC. Roman Abramovich, was a Russian oligarch who at the time was generally unknown in the West at the time, but is now a household name.
He bailed out Chelsea football club to the tune of $140 million and has spent more than $500 million on the club, a huge sum but small change for Russia’s second-richest man.
But how did he get it?
Through various businesses that grew during the turbulent period following the collapse of the former Soviet Union. His move into the aluminum industry was seen as the conclusion of the “aluminum wars”.
So why did 100 people die, and why is there so much controversy about the period?
The stakes were high and a look at the current Russian aluminum industry shows just how high it was and what was at stake financially. Today, the Russian aluminum industry is consolidated into a single company, called Russian Aluminum or RUSAL.
The rise of RUSAL
The company is a true heavyweight in the aluminum industry. In Siberia it operates 5 huge aluminum smelters and two huge refineries, but its influence now goes much further and it is now a global player.
RUSAL recently overtook Alcoa and Alcan as the world’s largest aluminum producer after merging with its closest rival Sual.
The facts behind RUSAL clearly show its importance in the global metal and aluminum industry. RUSAL is the largest aluminum and alumina producer in the world, with 12% of the world aluminum market, 15% of global production, has operations in 19 countries and employs around 100,000 people.
Russian Inc goes global
Oleg Deripaska, is the undisputed king of Russian aluminum and Deripaska, is one of the richest and most influential businessmen in Russia and is one of the Russian oligarchs who reflects the new economic power of Russia.
He has excellent connections with the current regime; he is related by marriage to former president Boris Yeltsin and is close to Vladimir Putin.
The “aluminum wars” unfolded in a period when Russia was struggling to come to terms with the transition from the old Soviet-style economy to a new free market. Many observers in the West simply saw Russia’s economy in a period of decline and corruption, from which it would never recover, but today, the perception of Russia is very different.
Russia takes its place on the world stage
Russia has huge natural reserves of a large number of commodities, and commodity prices are rising rapidly.
Putin has capitalized on booming oil and commodity prices as a means of regaining Russia’s lost status as a great power.
Russia is now being taken more seriously both politically and economically than at any time since the breakup of the old Soviet regime.
Its importance in feeding the world with commodities, in driving global economic growth and the emergence of RUSAL from the turbulent period of the “aluminum wars” is a reflection of this.
Today, Russia has regained its national pride and can take its place as a major economic force. Companies like RUSAL are a reflection of the momentous changes that have occurred in the Russian economy in recent years.
From the turbulent period of the “aluminum wars” featured in “Mafia in Black” to becoming a major player in world commodity markets, Russia has returned as a major force in the world economy.
