The political economy of russian aluminium between the dual state and global markets

International Political Economy Series The Political Economy of Russian Aluminium Between the Dual State and Global Markets Edited by Jakub M Godzimirski International Political Economy Series Series editor Timothy M Shaw Visiting Professor University of Massachusetts Boston, USA, and Emeritus Professor at theUniversity of London, UK The global political economy is in flux as a series of cumulative crises impacts its organization and governance The IPE series has tracked its development in both analysis and structure over the last three decades It has always had a concentration on the global South Now the South increasingly challenges the North as the centre of development, also reflected in a growing number of submissions and publications on indebted Eurozone economies in Southern Europe An indispensable resource for scholars and researchers, the series examines a variety of capitalisms and connections by focusing on emerging economies, companies and sectors, debates and policies It informs diverse policy communities as the established trans-Atlantic North declines and ‘the rest’, especially the BRICS, rise More information about this series at http://www.springer.com/series/13996 Jakub M Godzimirski The Political Economy of Russian Aluminium Between the Dual State and Global Markets Jakub M Godzimirski Norwegian Institute of International  Affairs Oslo, Norway International Political Economy Series ISBN 978-3-319-57233-8 ISBN 978-3-319-57234-5  (eBook) DOI 10.1007/978-3-319-57234-5 Library of Congress Control Number: 2017940598 © The Editor(s) (if applicable) and The Author(s) 2018 This work is subject to copyright All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed The use of general descriptive names, registered names, trademarks, service marks, etc in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations Cover illustration: © Rob Friedman/iStockphoto.com Printed on acid-free paper This Palgrave Macmillan imprint is published by Springer Nature The registered company is Springer International Publishing AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Acknowledgements This book is one of the deliverables of the TIGER project, financed by the Research Council of Norway (RCN) The author is deeply grateful—without this funding, this book would not have been written The aim of the project, with its team of leading Western and Russian experts, has been to shed light on Trade Integration, Geopolitics and the Economy of Russia—thus, ‘TIGER’ The situation of the Russian aluminium sector is analysed within this broader context, with special attention to the role of Russian aluminium sector in global and regional trade, how its development has been driven by geopolitical factors in a larger historical perspective and its specific role in the broader context of recent economic and political developments in Russia The project has been coordinated by Dr Arne Melchior of the Norwegian Institute of International Affairs (NUPI); many members of the project team have given invaluable comments on earlier drafts of the book at project workshops and seminars in Helsinki, Oslo and Moscow I would like to thank Roman Vakulchuk from NUPI, Nataliya Volchkova and Nataliya Turdeyeva from the Centre for Economic and Financial Research (CEFIR), Aleksander Knobel from the Gaidar Institute IET, Laura Solanko and Heli Simola from the Bank of Finland Institute for Economies in Transition (BOFIT) as well as David Tarr, who has long experience from the World Bank, for useful comments on the book manuscript and fruitful collaboration within the framework of this fascinating and very timely project v vi  Acknowledgements This book could not have been written without the support of many other colleagues Here I wish to thank my NUPI colleague Indra Øverland, for making funds available as well as for many useful comments throughout the process Also Helge Blakkisrud, Julie Wilhelmsen and Iver B Neumann from NUPI have been inspirational sparring partners—our conversations on matters Russian have helped me to understand the complexity of the situation in this great and important country The current form of the book owes very much to Susan Høivik, our long-standing language editor and guide, who has (de)Polished my English and, I hope, made reading these chapters a smoother experience to those at the other end of the book value chain Also, our NUPI librarians deserve my thanks for helping with access to various types of written sources on Russian and global aluminium industry Many of the most important texts used in my analysis have been provided by David Johnson through his Johnson’s Russia List (JRL) David’s efforts are indeed Herculean, so he deserves warm thanks from all those working on Russian matters, this author included We all recognize JRL as an indispensable tool in our daily dealings with Russia—and hope that we will never experience a day without his List I would also like to express my gratitude to Elena Morenko from UC Rusal, for providing materials on the history of the company and its current situation, during my visit to Moscow in 2016 Also several Norwegian business partners deserve mention here for all the assistance provided over the past 15 years—without their help this book would have never been written Let me also note my gratitude to Tim Shaw, the editor of the IPE series, who from the very beginning has shown great interest in and support for this book project Christina Brian and James Safford from Palgrave Macmillan have guided me through the editorial process and shown great support at critical junctures However, overall responsibility for this volume, and any editorial shortcomings, rests entirely on my shoulders Finally, I would like to thank my wife Magdalena, for outstanding patience and understanding during the preparation of the final draft of the book She provided practical support in this hectic period—as she has done ever since we first met, one autumn day in Paris in 1984 Also my children Zuzanna and Jan have met the challenges with understanding and positive attitudes To all these persons, I extend my warmest thanks Contents 1 Introduction  1 Part I  Russian Aluminium and Market Forces Basics of the Global Aluminium Market  11 Soviet and Russian Aluminium Until 2000 in Brief  29 National Consolidation 2000–2007  51 Global Consolidation and Challenges 2007–2016  79 Part II  Russian Aluminium and Russian Politics Intermezzo or Regional Aluminium Games  119 Capture of the Russian State Under Yeltsin?  139 Return of the State Under Putin  167 Masters of the Russian Aluminium Roulette  211 vii viii  Contents 10 Conclusions 261 Index  281 About the Author Jakub M Godzimirski has since 2012 been research professor at the Norwegian Institute of International Affairs NUPI Between 1995 and 2012, he served as a senior research fellow at the Centre and Department of Russian and Eurasian Studies at NUPI In 2009–2010, he was the head of the NUPI Energy Programme, and in 2012–2014, he was the head of the Research Group on European Affairs In 2014, he returned to the Research Group on Russia, Eurasia and the High North at NUPI He holds a PhD in social anthropology His present research interests include Russian and European foreign and security policy, with a focus on energy’s role and Russia’s relations with the West He has authored, co-authored, edited and co-edited several volumes on these issues, and published many peer-reviewed articles and book chapters with leading academic publishers such as Palgrave Macmillan, Routledge or Ashgate The most recent of his major publications are Russian Energy in a Changing World What is the Outlook for the Hydrocarbons Superpower? published in December 2013 with Ashgate and EU leadership in Energy and Environmental Governance? Global and Local Challenges and Responses with Palgrave Macmillan ix 10 CONCLUSIONS  275 When reformulating Yeltsin’s economic policy, Putin had to make some difficult strategic choices on how to tackle the negative features while at the same time preserving the economy’s sound liberal basis and without further alienating a population tired of economic experiments According to Yasin, the most burning issues were the need to deoligarchize the Russian politics; to complete the economic reforms and modernization; to remove Russia from the trap of adaptive economic model; and the need to consolidate the state and bring law and order into the economy (Yasin 2004: 60–61) Putin chose to start from consolidating the state, because only a consolidated, stronger and more centralized state could, according to Putin, bring about the necessary changes in other spheres In order to achieve this goal, Putin was ready to confront the Russian oligarchs, a group which in his view had captured the Russian state during the Yeltsin years Putin could choose either an evolutionary path or resort to forceful measures by putting his stakes on the law-enforcement agencies, security services and bureaucracy Although the Russian state was rather weak, Putin knew that it was strong enough to challenge any of the oligarchs— or even a coalition of oligarchs—and win the battle Putin realized that even if used in an arbitrary way, his power was far more legitimate in the eyes of Russian voters than the wealth of Russian oligarchs he wanted to curb and tame However, it seems that Putin and his circle have adopted a rather selective approach to Russian oligarchs While some of them were put behind bars or forced to leave Russia, it turned out that others, especially those, who like Deripaska decided to ‘accommodate’ state interests and adapted to new situation, could count on the state’s support in the moments when their companies faced dire straits The Russian state turned out to be able to adopt a flexible approach to those oligarchs who decided to play by the rules set by the new political elite and came to Deripaska’s rescue on several occasions as shown in Chaps 7, and of this book The issue of protection provided by the Russian state to Russian business community lies, in the opinion of Gaddy and Hill, at the very core of the Putinite system (Hill and Gaddy 2015: 190–191) As they put it: ‘Putin protects the oligarchs from having their assets appropriated by the state; he also protects them from one another’ (Hill and Gaddy 2015: 190) It should be, however, added here that not all Russian tycoons enjoy the same level of Putin’s protection 276  J.M GODZIMIRSKI One of the tycoons who benefited greatly from the way the Putin system of oligarchic protection works was Oleg Deripaska who has shown an outstanding ability to adapt to changing political circumstances He began his career under Yeltsin and became de facto member of Yeltsin’s grand Family, both in biological and political terms Then he managed to read the Putin’s script and adapted to the new political reality Although the two economic crises combined with some other developments had a rather devastating impact on his economic situation as demonstrated in Chap of this book Deripaska managed to retain his political clout The most complete ranking of political influence published recently in Russia seems to confirm this assessment The ranking was published on July 2016 by the Political Technologies Centre (Politcom.ru 2016) and is based on assessments of political influence provided by leading Russian experts It presents a good picture of how Russian experts view the political weight of various actors Oleg Deripaska is in this rating ranked as the ninth most influential business leader in the country behind Igor Sechin, Sergei Chemezov, Arkadii Rotenberg, Aleksei Miller, German Gref, Gennadii Timchenko, Yurii Kovalchuk and Andrei Kostin All those business leaders who were ranked as more influential than Deripaska are leaders of state business structures or structures closely linked to the state through the execution of state contracts, or the so-called stoligarchs (Aris 2016)—only Deripaska and Vagit Alekperov from Lukoil, the biggest Russian private oil company, made to this list of 10 most influential actors from the Russian business community with no direct or indirect link to the state In the overall ranking of political influence, Oleg Deripaska was ranked 46th beating all other actors operating directly or indirectly in Russian aluminium and metals sector—Viktor Vekselberg was ranked 58, Vladimir Potanin from Interros—62 The so-called composite rating list has 64 names—35 represent federal power institutions, 15 are businessmen, are members of parliament, five are governors and two belong to the category of opinion leaders In the opinion of authors of this rating, those who have ended up on this composite rating list entirely deserve to be called ‘all the president’s men’ The fact that Deripaska has managed to make to this list confirms his strong position on the Russian informal power map and is indeed an important asset for a leader whose poor economic performance demoted him from the first place among economic actors in the country In 2008, Deripaska was ranked number on the Russian Forbes 10 CONCLUSIONS  277 list of wealthiest Russians—in 2016 he was demoted to 41 position on this list However, as Fig. 10.2 shows he managed to retain a relatively strong position on the map of political influence presented by Nezavisimaya Gazeta in the period between 2000 and 2015 Also the most recent assessment of political influence presented above shows he seems to punch far above his economic weight in the realm of politics It remains to be seen for how long this special form of Deripaska– Putin co-habitation is going to last and how this relationship is going to influence the future of the Russian aluminium industry In the opinion of some Russian observers, we should expect the system of superpresidency created by Putin, with those special protection mechanisms described by Hill and Gaddy, to last until 2024, the end of Putin’s fourth presidential term (Kazantsev 2016) It remains to be seen whether Deripaska will be in need of political protection in the years to come and how his relationship with the Russian political elite is going to influence the future of the Russian aluminium industry where he still is the dominant figure Position in the annual ranking 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Abramovich 11 12 11 15 12 26 29 21 21 22 23 34 Deripaska 72 24 18 10 20 21 15 19 13 28 21 26 25 24 28 35 58 43 Vekselberg Fig. 10.2  Abramovich, Deripaska and Vekselberg in Nezavisimaya Gazeta annual rankings of top 100 figures in Russia 278  J.M GODZIMIRSKI Notes 1. http://www.rusal.ru/en/press-center/press-releases/15277/ 2. http://www.rusal.ru/en/press-center/press-releases/14781/ 3. http://www.rusal.ru/en/press-center/press-releases/15023/ 4. http://www.rusal.ru/en/press-center/press-releases/14864/ 5. http://www.rusal.ru/en/press-center/press-releases/15226/ 6. See also http://www.rbc.ru/rbcfreenews/577ceeab9a79471c5c76e64d 7. https://lenta.ru/news/2016/05/23/aluminiumvalley/ 8. http://www.rusal.ru/en/press-center/press-releases/14941/ 9. http://www.rusal.ru/en/press-center/press-releases/14521/ 10.  http://www.rusal.ru/en/aluminium/key_markets/russia.aspx References Adachi, Y (2005) Reconstitution of Post-Soviet ex-state enterprises into Russian business firms under institutional weaknesses London: Centre for the Study of Economic & Social Change in Europe, UCL School of Slavonic and East European Studies, Retrieved from http://discovery.ucl ac.uk/17513/1/17513.pdf Adachi, Y (2010) Building big business in Russia: The impact of informal corporate governance practices London: Routledge Aris, B (2016) Meet the stoligarchs, Putin’s pals who control a fifth of the Russian economy, (updated 11 July 2016) Retrieved October 28, 2016, from http://www.intellinews.com/meet-the-stoligarchs-putin-s-pals-who-controla-fifth-of-the-russian-economy-99918/?source=russia Braterskiy, M (2010) Ekonomicheskiye instrumenty vneshney polityki i politicheskiye riski Moscow: Higher School of Economics Press Hill, F., & Gaddy, C (2015) Mr Putin: Operative in the Kremlin New and expanded edition Washington DC: Brookings Institution Press Kazantsev, V (2016, December) Zhestkaya Vertikal‘naya Iyerarkhiya Slishkom Malo Sderzhek I Protivovesov Imeyet Prezidentskaya Vlast’, Nezavisimaya gazeta Kotkin, S (2009) How did Russia rebuild itself? Sorry, but you’re wrong, History News Network (updated 26 January 2009) Retrieved November 20, 2016, from http://hnn.us/articles/59713.html Mau, V (2004) The logic of Russian transition Russia in Global Affairs, 2(3), 40–52 Ministry of Natural Resources and Ecology of the Russian Federation and Rosnedra (2016) Strategiya razvitya mineralno-syrevoy bazy Rossiyskoy Federatsii 2030 goda, Moscow: Ministry of Natural Resources and 10 CONCLUSIONS  279 Ecology of the Russian Federation and Rosnedra Retrieved October 20, 2016, from http://www.rosnedra.gov.ru/data/Files/File/3053.docx Politcom.ru (2016) Russia’s Political Class Rating List of Political Influence, (updated July 2016) Retrieved November 20, 2016, from http://politcom.ru/21256.html UC Rusal (2011) Strategy Retrieved October 25, 2016, from http://www rusal.ru/en/about/strategy/ UC Rusal (2016) Driven by Green Power UC Rusal 2015 Annual Report Moscow: UC Rusal Retrieved form http://www.rusal.ru/upload/iblock/ a77/3600065-t01fnar%20(e-03.13).pdf Ulanov, V L (2010) Sovremennyye tendentsii restrukturizatsii otechestvennykh kompaniy EKO, 10, 136–145 Yasin, Y (2004) A battle between business and bureaucracy Russia in Global Affairs, 2(3), 52–67 Index A Abramovich, Roman, 40, 43, 57, 58, 64, 81, 98, 131, 173, 176, 177, 196, 213–215, 220, 221, 224, 225, 248, 249 Achinsk Alumina Plant, 43, 45, 55, 79, 124, 132 Actors business community, 7, 145, 151, 168–170, 211, 218, 276 horizontal relationships, 142 rankings, 212, 247–249 state, 4, 6, 7, 18, 19, 25, 84, 86, 101, 142, 144, 146, 153, 157, 158, 168, 169, 172, 194, 211, 214, 241, 246, 253, 261, 274, 276 vertical relationships, 141, 142 Adachi, Yuko, 57 Aksenov, Sergei, 131 Alcan, 17, 23, 32, 52, 60, 80, 83, 84, 215 Alcoa, 17, 25, 32, 52, 60, 63, 69, 80, 83, 84, 90, 91, 94, 96, 97, 215 Alekperov, Vagit, 276 Alfa Bank, 94, 173, 202, 203, 228, 230 Alfa Group, 150, 155, 228, 243, 250 Alpart, 80, 87, 88, 266, 267 ALSCON, 80, 90, 98 Alukom-Taishet AZ, 92 Alumina import, 21, 31, 273 production, global, 14, 17 production, Russia, 11, 14, 16, 44, 122, 125 production, regions, 15 Aluminium actors, economic power in Russia, 253 actors, political power in Russia, 5, 6, 121, 123, 141, 246, 248 association, 145, 200 demand for in USSR and Russia, 17 export, 3, 6, 18–20, 33, 34, 37, 39, 41, 64 export from Russia, 39 global market, 2, 4, 5, 14, 17–20, 38, 41, 44, 83, 91, 106, 109, 143, 216, 262–264 © The Editor(s) (if applicable) and The Author(s) 2018 J.M Godzimirski, The Political Economy of Russian Aluminium, International Political Economy Series, DOI 10.1007/978-3-319-57234-5 281 282  Index import from Russia, 45 price, 19, 20, 22, 24, 25, 37, 42, 51, 62, 69, 86, 90, 91, 93, 96, 97, 99–102, 107–109, 111, 142, 230, 265 production, global, 14, 20, 36, 51, 83, 102 production, Russia, 5, 17, 19, 21, 38, 45, 51, 59, 79, 83, 105, 122, 217, 262, 263 production, USSR, 3, 34 use, 12, 38, 42, 144, 230 value chain, 14, 143, 262, 264 valley, 268, 269 wars, 4, 121, 125, 139, 213, 261, 263 Aluminium smelters, 30, 31, 33, 38, 41, 48, 74, 89, 110, 127, 143, 215, 224, 269 See also Bogoslavski AZ; Boguchansk AZ; Bratsk AZ; Irkutsk AZ; Kandalaksha AZ; Khakas AZ; Krasnoyarsk AZ; Nadvoitsk AZ; Novokuznetsk AZ; Pikalevo AZ; Sayansk AZ; Ural AZ; Volkhov AZ; Volgograd AZ APEC Business Advisory Council, 226, 227, 241 Arkhangelsk, 44, 122 Aroaiama Mining Company, 79, 80 Asia, 2, 23, 62, 83, 108, 239, 263, 270, 271 Asia-Pacific Economic Cooperation (APEC), 226, 227, 241, 271 Association of Russian Banks, 203 Association of Russian Regional Banks, 203 Aughinish refinery, 80 Australia, 17, 23, 80, 88, 92 Aven, Petr, 220, 228, 230 B Bank and banks, 22–25, 68–71, 93, 103–105, 107, 127, 173, 180, 189, 198, 199, 230 Bashkortostan, 122 Basic Element, 65, 66, 141, 202, 215, 238, 244 See also Basel Bauxite import to Russia, 16, 32 production, global, 14, 44 production, Russia, 16, 46, 81, 91, 92, 108, 122 Basel, 64, 68, 102 See also Basic Element Belkovskii, Stanislav, 179 Berezovskii, Boris, 39, 40, 43, 55, 57, 58, 98, 129, 131, 134, 148, 154, 156, 169, 173–175, 180, 213, 214, 221, 225, 233 Berezovskii vs Abramovich case in London, 59, 98, 131, 221, 233 Blat, 219 Blavatnik, Len, 217, 230, 235–237 Bogdanchikov, Sergei, 177 Bogoslav Alumina, 79 Bogoslavski AZ, 79 Boguchansk AZ, 102, 112, 227, 264 Boguchansk, 48, 224, 227 Boguchansk Hydropower Plant (Boguchansk HPP), 48, 224, 269 Boguchany Energo-Metallurgical Union (BEMO), 224, 269 Boksitogorsk Alumina Plant, 79 Borisov, Sergei, President of Genova, 203 Bratsk, 61, 223 Bratsk AZ, 42, 43, 55, 57, 66, 67, 79, 92 BrAZ, 61, 89 Brazil, 17, 51, 60 Bulygin, Aleksander, 62, 65, 217, 229, 237 Index Bush, George W., Bykov, Anatolii, 40, 54, 57, 126, 127, 129, 133, 142, 213, 229, 234 C Chelyabinsk, 122 Chemezov, Sergei, 220, 276 Chernomyrdin, Viktor, 156 Chernoy, Lev, 38 Chernoy, Mikhail, 98, 131, 222, 232, 233 Cheung, Barry, 101, 103, 104, 240 China, 2, 12, 17, 20, 21, 23–25, 51, 76, 94, 96, 102, 227, 237, 263, 270, 271 Chinalco, 94 China, production of aluminium, 13, 16, 23, 66, 100, 143, 272 Chubais, Anatolii, 46, 48, 54, 58, 148, 155, 173, 188, 220, 222, 225, 243, 244, 251 Commodities’ market, 5, 22, 24 Commodities’ market, booms and busts, 22 Commodities’ market, cyclical nature, 23 Competitiveness, 47, 57, 69, 72, 184, 187, 198, 262 Corruption, 105, 140, 153, 190, 191, 194, 198, 234, 265, 274 Crime, 39, 40, 98, 130, 171, 198, 218, 233, 274 Crimea, 121, 151, 199 Crisis, economic, 7, 248, 265, 276 Crisis, economic 2008–2009, 20, 109 D Delovaya Rossiya, 145, 150, 198 De-offshorization, 150, 198   283 Deripaska, Oleg APEC Business Advisory Council, 226, 227, 241, 271 career, 56, 57, 214, 221, 229 charitable activities, 244 legal battles, 131, 231, 233 networks, 219, 223, 241, 249 opposition against WTO, 75, 76 rankings, 243 social resonsibility manifest 2004, 243 and TWG, 40, 55, 56, 65, 217, 234 wealth, 105, 158 Diskin, Iosif, 179 Domestic demand for aluminium in USSR and Russia, collapse, 17 Dual state, definition, 5, 146 Dyachenko Tatyana, 221 See also Yeltsin, Tatyana E Economic crisis 2008-2009, 20, 109 Economic crisis, Soviet, 17, 25, 30, 37, 151 Economic reforms, Putin, 202, 251 Economic reforms, Yeltsin, 147, 274, 275 Economy, 2, 4, 7, 17, 19, 24, 25, 29, 32, 35–38, 45, 46, 48, 56, 58, 71, 73, 106, 110, 121, 122, 124, 135, 141, 150, 152–154, 158, 168, 170, 171, 174, 175, 177, 181, 183, 185–188, 190, 191, 195, 197–200, 212, 223, 235, 237, 249, 253, 261–263, 272–274 Elections, 59, 71, 120, 128–134, 142, 155, 159, 171, 172, 181–183, 189, 196, 197, 235 Krasnoyarsk krai, 133, 134 284  Index presidential, 59, 71, 128, 129, 142, 172, 183, 189, 196 regional, 120, 131, 132, 142, 235 State Duma, 159, 171, 172, 181, 182, 189, 235 Electricity, 12, 15, 21, 31, 46, 48, 58, 66, 74, 87, 125, 129, 142, 223, 224 EN+, 91, 95, 217, 236 Energy, 3, 6, 14, 15, 29, 33, 34, 41, 43, 46–48, 53, 58, 61, 72, 74, 82, 84, 85, 91, 95, 96, 99, 100, 109, 121, 124, 142, 188, 191, 215, 223, 240, 251, 269 Energy policy, 46 Eurallumina alumina refinery, 80 Evenk okrug, 123, 132 G Gaddy, Clifford, 37 GAZ, 74, 202, 215, 228 GAZ Group, 215 Gazprom, 85, 104, 105, 169, 179, 202, 225 Gazprombank, 270 Glasenberg, Ivan, 236, 237, 240 See also Glencore Glencore, 80, 102, 215, 217, 218, 230, 236, 240, 264, 266 Gorkii Automobile Plant (GAZ), 74 Gref, German, 75, 173, 177, 187, 189, 220, 251, 276 Guinea, 17, 32, 43, 45, 79, 80, 87, 88, 92, 267, 271 Gusinskii, Vladimir, 134, 155, 169, 173, 175, 180 Guyana, 17, 33, 79, 80, 87, 92 F Fadeev, Valerii, editor-in-chief of H Expert Harvard, 238 , 203 Hill, Fiona, 275, 277 Family, 1, 5, 57, 80, 126, 128, 131, Hydropower, 3, 21, 41, 47, 74, 82, 170, 181, 183, 214, 221, 225, 124, 125, 224, 246, 269 238, 276 See also Yeltsin clan, the Federal Security Service (FSB), 130, 178, 193 Federal structure, evolution, 120 I Fedun, Leonid, 254 Illarionov, Andrei, 177 Fleming Family & Partners (FF&P), 80 IMF See International Monetary Fund Forbes, ranking of Russian wealth, Impeksbank, 202 176, 247, 248, 276 Indonesia, 17 Formal vs informal approaches in Informal Corporate Governance Russia, 146 Practices (ICPG), 57 Fortescue, Stephen, 125 International Monetary Fund (IMF), Fradkov, Mikhail, 183, 187, 189 32–34 Fridman, Mikhail, 94, 101, 150, 155, Interrosa, 202 193, 202, 203, 228, 230, 243, IPO, 93, 95, 96 250 IPO, Rusal in Hong Kong, 94, 229 Friguia, 45, 92, 268 Ireland, 17, 80, 88, 92 Friguia Alumina, 79 Irkutsk, 53, 87, 122, 125, 126, 223, 226 Index Irkutsk AZ, 79, 92 Irkutskenergo, 91 J Jamaica, 17, 33, 80, 87, 88, 266 Jamaica, Alpart, 92 Japan, 17, 20, 34, 264 K Kakha Bendukidze, head of the Union of Machine-building Plants\;, 202 Kandalaksha AZ, 79, 92 Karachinskii, Anatolii, 202 Kasianov, Mikhail, 173, 177, 183 Kemerov, 122 Kerimov, Suleiman, 217 Khakas AZ, 79, 92 Khakassia, 122, 123, 227, 244 Khan, German, 193 Khloponin, Aleksandr, 132, 133 Khodorkovskii, Mikhail, 149, 155, 168, 176, 178 Kindia, 32, 87, 92 Kindia and Friguia mines, 79 Kiriyenko, Sergei, 156 Kiya-Shaltyrsk, 79 Kogan, Vladimir, 202 Komi, 44, 46, 82, 122 Korkunov, Andrei, President of Odintsovo Confectionery, 203 Kostin, Andrei, 276 Kovalchuk, 221 Kovalchuk, Yurii, 196, 276 Kozitisin, Andrei, General Director of UGMK Holding, 203 Krasnoyarsk, 6, 122, 124–127, 130, 131, 133, 134, 139, 191, 229, 231, 269 Krasnoyarsk Aluminium Plant, 61, 125, 127 See also KrAZ   285 Krasnoyarsk AZ, 40, 42, 43, 55, 57, 58, 67, 79, 92, 125 Krasnoyarsk, city, 84, 136 Krasnoyarskenergo, 61, 124 Krasnoyarsk krai, 54, 58, 84, 119, 123–127, 132, 133, 135, 136, 213 Krysha, 59, 221, 222, 233, 249 Kubikenborg aluminium smelter, 80 Kudrin, Aleksei, 69, 189, 196, 201, 251 L Lebed, Aleksander, 126, 127, 131, 156 Lebed, Aleksei, 131 Lebedev, Platon, 149, 176 Ledeneva, Alena, 146, 218 Legal issues, 179, 188 Legislation, 63, 71, 184, 274 Leningrad region, 30, 122, 125, 228 Liselyov, Oleg, 202 Lisin, Vladimir, 202, 226 Livshits, Aleksandr, 237, 238 Loans for shares, 148, 158 Lobbies, 63, 75, 251, 255 London, 19, 20, 42, 57, 59, 94, 98, 131, 221, 222, 233 London Court of International Arbitration (LCIA), 217 Luzhkov, Yurii, 75 M Malevskii, Anton, 131, 232 Mandelson, Peter, 241 Mechel, 149, 192, 193, 239 Media, 74, 126, 169, 175, 184, 224, 244 Medvedev, Dmitrii, 7, 94, 149, 150, 168, 187, 189, 198, 220, 226, 230 286  Index Medvedkov, Maksim, 70 Meeting, and state officials, 196 Meeting, business community, 184, 187, 195, 196, 198, 200, 227 Mikhelson, Leonid, 254 Miller, Aleksei, 220, 225 Millhouse Capital, 52, 64, 65, 215 Modernization, 41, 54, 61, 66, 168, 183, 195 Moldazhanova, Gulnara, 65, 102, 229 Mordashov, Aleksei, 188 Motherhood, 214 Murder, 58, 130, 177 Murychev, Alexander, 203 N Nabiullina, Elvira, 105, 189, 200 Nadvoitsk AZ, 79, 92, 102, 111 Naryshkin, Sergei, 196 Networks, formal and informal, 218, 219, 220, 221 Nezavisimaya Gazeta, 75, 156, 277 ranking of political influence, 255 ranking of top 100 political figures, 255 Nigeria, 80, 90, 98 Nigeria, ALSCON, 91 Nikolaev alumina refinery, 80, 88, 215 NordStream, 103, 104 Norilsk Nikel, 67, 93, 132, 134, 135, 216, 230, 262, 264 Norway, 17, 20, 51 Novokuznetsk AZ, NKAZ, 79, 89, 92, 102, 224, 233 NTV TV Channel, x O Offshore economy, 55, 56 Oligarchs, 5, 43, 59, 85, 101, 104, 134, 142, 147, 154, 156, 158, 167, 169, 172, 174, 175, 178, 179, 181, 182, 184, 196, 201, 219, 221, 222, 226, 242, 243, 275 and Russian politics, 59, 85, 156 attitudes towards, 157 definition, 175 under Putin, 183 under Yeltsin, 157, 242 wealth, 180, 242, 275 Onexim, 93, 101, 112, 134, 217, 230, 236, 240, 264 Opora Rossii, 203 Organized crime, and Russian aluminium sector, 40 Osborne, George, 241 Owners, 5, 17, 19, 29, 39, 40, 85, 86, 94, 100, 101, 131, 136, 142, 153, 185, 192, 213, 228, 233, 234, 240, 246, 247, 261, 262 P Parties, 18, 48, 59, 80, 146, 174, 178, 182, 189, 219, 222, 234, 235 Patarkatsishvili, Badri, 169, 222 Pavlovo Bus Plant, 215 Pavlovskii, Gleb, 179 Petrovskii, Kiril, 60 Pikalevo, 105, 150, 227, 228 Pikalevo Alumina, 79 Platonov, Valerii, general director of Uraltrac, 203 Politbureau 2.0, 220 Political power of alumnium actors in Russian rankings, 141, 248 Popova, Anna, 271 Portugal, 20 Potanin, Vladimir, 100, 101, 134, 155, 230, 243, 276 Power generation, 12, 58, 222 Index Presidential Commissioner for Entrepreneurs’ Rights, 198 Primakov, Yevgenii, 75, 129, 145, 156 Privatization, 4, 6, 39, 40, 46, 58, 121, 125, 127, 141, 148, 153, 158, 159, 177–179, 182, 184, 185, 188, 196, 212, 213, 229, 240, 241, 244, 246 Privatization in aluminium sector, Profit, profitability, 23, 52, 67, 68, 83, 84 Prokhorov, Mikhail, 93, 101, 134, 214, 216, 217, 225, 230, 264 Public opinion, 159, 181, 197, 219 Public opinion on privatization, 159 Public relations (PR), 56, 126, 219, 228, 241–243, 245, 246, 271 Pugachev, Sergei, 202 Pugin, Nikolai, 202 Pussy Riot case, 104 Putin, Vladimir, 1, 5, 7, 46, 59, 103, 120, 141, 147, 149, 150, 154, 167, 170, 172–174, 190, 197, 198, 200, 225, 228, 240, 248 Putin, Vladimir, career, 103 Q Queensland Alumina, 79 R Ranking of economic power, 248 Ranking of political power, 212, 247, 248 RAO UES, 46, 48, 54, 59, 66, 124, 222, 223, 225 Rashnikov, Viktor, 254 Regional dimension of alumina production in Russia, 122 Regional dimension of aluminium production in Russia, 121   287 Regional dimension of bauxite production in Russia, 121, 122 Regional elite, 73, 172, 174 Reiderstvo, raiding, 142, 218 Relations, 2, 5, 57, 101, 104, 106, 119, 129, 140, 142, 144, 146, 147, 152, 153, 157, 168–170, 172, 177, 178, 183–187, 191– 194, 196, 199, 201, 212, 218, 224–226, 229, 230, 235, 236, 242, 245, 247, 251, 261 Relations, horizontal, 230 Relations, vertical, 212 Renessance Group, 52 Resource rent, 182 Reuben brothers, traders, 38 See also TWG Rosaluminproduct, company of the young Oleg Deripaska, 215 Rostar, 43, 215 Rotenberg, Arkadii, 276 Rotenberg, Boris, 221 Rotenberg brothers, 220, 221 Rothschild, Nathaniel, 94 Rusal, 32, 39, 45, 48, 52, 54, 59–63, 65, 66, 68, 74, 76, 79–84, 86, 94, 96–102, 109, 131–133, 135, 140, 142, 144, 177, 215, 217, 222–224, 232–234, 236, 237, 239–241, 263, 264, 268, 270 Russian Chamber of Commerce and Industry, 75, 145, 149 Russian Union of Industrialists and Entrepreneurs (RSPP), 151, 177, 198, 200, 216 Rybovlev, Dmitrii, 254 S Sakwa, Richard, 146 Samara, 56, 74 288  Index Samara Metallurgical Company, SAMEKO, 56 Sankt Petersburg, St Petersburg, 202 Sayanal, 56 Sayanogorsk, 67, 215 Sayano-Shushensk Hydroelectric Plant (SShHP), 58 Sayansk AZ, 42, 43, 54–56, 58, 67, 79, 92 Sayansk folga, 43 Sberbank, 101, 270 Sechin, Igor, 193, 196, 276 Semibankershchina, seven bankers, 148 Severo-Uralsk Boksit, 80 Shabanov, Sergei, 203 Shoigu, Sergei, 220 Shokhin, Aleksander, 145, 150, 151, 188, 200, 203, 204 Shuvalov, Igor, 197, 220 Shvidler, Yevgenii, 202 Sibal, 42, 43, 52, 54–57, 59, 60, 130, 222, 224, 263 See also Sibirskii Alyuminii Sibneft, 39, 43, 52, 54, 55, 57, 59, 64, 85, 177, 178, 181, 213, 222, 263 Siloviki, 156, 177, 182, 231 Sirazutdinov, Gennadii, 217 Skvortsova, Veronica, Russian Minister of Health, 269 Sobchak, Anatolii, 170 See also Sobchak–Putin relations Sobyanin, Sergei, 196 Soloviov, Vladislav, 83, 95, 237, 238 Soskovets, Oleg, 54, 57, 221, 250 South Korea, 20, 264, 270 Soviet aluminium industry, history, 31, 33 Sredne Timanski Boksit, 80 Stanovaya, Tatyana, 195 State and business meetings, 146, 168, 187, 188, 191, 196, 200 under Putin, 167 under Yeltsin, 139 State Duma, 58, 63, 87, 120, 130, 135, 154, 159, 171, 173, 178, 181, 182, 189, 191, 235, 242 State monopolies, 58, 274 Stoligarchs, definition, 276 Strategic Initiatives Agency Supervisory Board, 151, 204 Strategic reasons for location of aluminium industry in the USSR, SUAL, 45, 46, 52, 53, 59, 60, 64, 67, 68, 79–84, 215–218, 230, 236, 240, 241, 263, 264 Suriname, 17 Surkov, Vladislav, 172, 187, 195, 196 Sverdlovsk, 44, 103, 122, 125 Switzerland, 20 T Taimyr okrug, 132, 135 Tajikistan, 82, 227 Tatarenkov, Vladimir, 231 Taxes, taxation, 55, 63, 188, 192, 274 Timchenko, Gennadii, 196, 276 Titov, Boris, 150, 198, 235 TNK-BP, 192, 216, 236 Tokarev, Valerii, 217 Tolling, 19, 38, 39, 42, 55, 64, 68, 126, 263 ban on, 63, 65 internal, 245 Tosunian, Garegin, president of the Association of Russian Banks, 203 Transport costs, 3, 15, 32, 62, 91, 109, 272 Treisman, Daniel, 153, 157, 158, 220 Turkey, 20, 201 Index U UC Rusal, 12, 18, 20, 21, 79, 86–99, 101–104, 106, 107, 109–111, 216–219, 230, 236, 237, 240, 246, 264, 266, 267, 269, 271, 272 board of directors, 236, 238 Board of Directors, composition and evolution, 238 economic results, 86, 90, 111 depth, 103 foreign assets, 264, 267 formation, 223 IPO, 94, 232 management, 90, 112 owners, 91, 95, 101, 218, 266 ownership structure, 236 Ukraine, 20, 30, 43, 45, 59, 80, 87–89, 92, 106, 151, 152, 168, 193, 199, 201, 216, 245, 264 Ukraine, crisis 2014, 183 Ulyanovsk, 74 Union of Rightist Forces, 173 United Russia, 130, 135, 189 Ural Alumina, 79, 88 Ural AZ, 79 USA, 12, 13, 17, 20, 23, 32, 34, 47, 51, 52, 60, 62, 105, 140, 197, 232, 233, 238, 240, 242 USA, aluminium imports, 32 USA, aluminium production, 14 Usmanov, Alisher, 196, 220 Uss, Aleksandr, 129, 132, 133 USSR, 3, 17, 18, 30–36, 216 See also Soviet Union aluminium industry, export of alumnium, 34, 36 import of aluminium, 30, 32 Ustenko, Oleg, 75   289 V Vekselberg, Viktor, 80, 93, 101, 112, 141, 193, 195, 202, 213, 214, 216, 224, 228, 230, 236, 240, 241, 248–250, 253, 276 Violence, 140 Vnesheconombank VEB, 93, 94, 216, 236, 244 Volgograd, 87, 122 Volgograd AZ, 79, 92, 111 Volkhov AZ, 79, 92, 102, 111 Volodin, Vyacheslav, 221 Voloshin, Aleksander, 75, 173, 181, 183 Volskii, Arkadii, 177, 202 Vyakhirev, Rem, 169, 202 Vympelcom, 202 W Warnig, Matthias, 103–105, 240 Wealth, 158, 159, 175, 180, 211, 212, 242, 248, 252–254, 275 Windalco refineries and bauxite mines, 80 World Trade Organisation (WTO), 69–76 WTO, Russian membership in, discussion on, 71 Y Yeltsin, Boris, 4, 54, 120, 128, 147, 148, 156, 170, 172 Yukos, 65, 85, 149, 155, 168, 176–178, 180–182, 184–187, 201, 211, 243, 247 Yukos case, 149, 176, 178–180, 184, 187, 188, 211, 241 Yumasheva, Polina See Deripaska, Polina 290  Index Yumashev, Valentin, 221, 225, 250 Yuryev, Evgenii, 203 Z Zaostrovtsev, Yurii, 179 Zapol,Yurii, 202 Zaporozhye, Zaporozhskiy, 87, 92, 264 Zhivilo, Mikhail, 140 Zimin, Dmitrii, 202 Zubkov, Viktor, 189, 220 Zyuzin, Igor, 193 ... Russia and the evolution of the Russian aluminium industry are discussed in Chaps 3, and of this book—here in this chapter, the focus is on the global level and the role of Russian aluminium in the. .. evolution of the Russian political system Privatization of the aluminium sector took place during the turbulent 1990s, with Boris Yeltsin as the president of the country and the emergence of the Russian. .. examine the role of Russian aluminium producers in the global aluminium market, their share in global aluminium trade, their competition with other aluminium suppliers and their international aluminium