Ukraine may nationalize the Zaporizh aluminum smelter, Kommersant-Ukraine reported, citing Oleksandr Peklushenko, the head of the Zaporizhzhya regional administration.
The aluminum complex, known as Zalk, is owned by Russia’s United Co. Rusal, the world’s biggest producer of the metal. The owner isn’t fulfilling its investment obligations, Peklushenko said, according to the newspaper.
Aluminum producers have seen earnings squeezed after prices for the metal fell 17 percent in 12 months and output costs rose.
Rusal denied breaching its obligations and said it’s in talks with the Ukrainian government to reduce power tariffs at the smelter, according to an e-mailed statement. With charges that are three to four times those in Russia, profitable production is “impossible,” Rusal said.