UC RUSAL suggests setting up metal reserve

UC RUSAL approached Russia's Deputy Prime Minister Alexei Kudrin with a proposal to create a strategic state metal reserve to give an impetus to the Russian processing industry and stabilize metal prices, RBC Daily wrote today. To shore up the aluminum market and prevent a fall in aluminum prices, the company suggested that intergovernmental agreements be signed with a number of countries to cut metals production by 10 percent for the next two years. The same idea is propounded in the letter of UC RUSAL's General Director Alexander Bulygin addressed to Alexei Kudrin offering steps to stem the crisis in the Russian metal processing industry. In his letter, Bulygin notes that due to the crisis, the Russian metals industry could be forced to lay off 1.2m people, lose RUB 1 trillion (approx. $ 37.68bln) in export proceeds from high value-added products, and fail to contribute RUB 200bln (approx. $ 7.54bln) in taxes to the federal budget.

 UC RUSAL sees a state metals reserve as a way to stanch the crisis, as it will not only work to diversify government investment, but will also help stabilize metal prices.