[Presenter] Now back to domestic news. Irkutsk ecologists have carried out more research work in the area of the Bratsk Aluminium Plant. They have proven that poisonous substances discharged by the plant’s smokestacks for many years are extremely dangerous for local residents. Local authorities have been impressed by the collected data. Officials say that they are trying to relocate people from the dangerous area. Anton Artemyev has the details.
[Correspondent] Chikanovskiy is a ghost village. It has been standing side by side with smokestacks of Irkutsk Region’s largest industrial enterprise, the Bratsk Aluminium Plant, for nearly 40 years though no one must live in the plant’s restricted area. A strong acid, hydrogen fluoride, repeatedly appears in the air. This is why residents of Chikanovskiy fall ill so often.
[Unidentified woman, speaking to camera] Three years ago I had a part of my lung removed.
[Another woman, speaking to camera] Every evening, every night and every morning the whole family coughs up to vomiting.
[Correspondent] Experts assert that all this is being caused by aluminium plant’s waste gases.
[Denis Zolotarev, captioned as chief of the section of communal hygiene of the Bratsk city public health service] The gases also have an impact on the content of calcium in human bones and cause bronchitis.
[Correspondent] People should have been relocated from the village in 1975, but the process began only in 1994. A special resettlement programme was approved by the [Russian] government then. Since then 643 families have been resettled.
The federal government and the plant must finance the programme in equal parts. The government fulfils its obligations, while the plant says it has no money. However, the authorities are happy that the resettlement is progressing little by little.
[Vitaliy Shuba, captioned as Russian State Duma deputy] This is the only village whose residents are moving to areas with more favourable environmental conditions in the framework of protection programmes.
[Correspondent] It is a bad consolation for those who stay in Chikanovskiy. They do not know how long they will wait for promised resettlement and breathe poisoned air.
[04’06’04”, video shows street scenes in the village and smokestacks]
BACKGROUND ON BRATSK ALUMINUM:
BBC Summary of World Broadcasts
September 6, 1985
Industrial pollution in Irkutsk Oblast
In a report on the destruction of forests by industrial pollution, published in the 19th-25th August ‘Nedelya’, Andrey Pralnikov said that trees had been damaged by pollution up to 20km to the west and up to 30km to the east of Bratsk aluminium works; Bratsk forestry production association had claimed over R21,000,000 in compensation through the USSR State Board of Arbitration. In an interview Ye.V. Ansimov, USSR Chief Arbitrator, said that the board had decided to fine the plant R5,000,000 and noted that such an ”unusually large fine” would ”serve as a strong means of influence”. Pralnikov added, however, that the works had been fined before and the situation had not changed, and it now remained to ”await the development of events” since the case had been sent to Irkutsk Oblast Procurator’s Office ”to resolve the matter of instituting criminal proceedings”.
RusData DiaLine- BizEkon News
December 22, 1993
Ecological Modernization Program For Bratsk Aluminum Plant
ADS news agency
Russia’s Bratsk-based major aluminum producer to turn into ecologically safe industrial facility by the year 2000
A federal program of urgent measures aimed at radically improving the state of environment in Bratsk over a period through the year 2000 is to be submitted shortly to the government by Russia’s committee for metallurgy.
The program initiated by the city administration has ben drawn up by specialists at the country’s committee for architecture and construction in conjunction with the Bratsk-based aluminum plant (BrAZ joint-stock company), according to Igor Kalensky, an official at the metallurgy committee. The ecologically unsafe situation in the area is mainly related to the activity of BrAZ, Russia’s major aluminum producer, as well as the Bratsk-based timber industry complex. Electrolytic production facilities of the former have been releasing into the atmosphere 6-7 kg of fluoride per ton of aluminum (as against under 1 kg called for by the internationally accepted norms).
The program calls for the reconstruction of electrolytic production and the installation of ecologically safe machinery, both domestic and foreign-manufactured. The reconstruction effort is estimated to cost 156 billion rubles (in the prices of the first quarter of 1993) along with an additional USD 18 million in hard currency.
Modernization funds are expected to be mainly earned by BrAZ via the exports of its products, provided the producer is accorded certain tax privileges by the state. However, 25 percent of the program’s cost is expected to be federal budget-subsidized.
Financial Times (London)
October 21, 1993
Bratsk finds going tough in the real world – A town that depends almost entirely on its outdated smelter
By KENNETH GOODING
MR YOURI Shlaifshtein is attempting to explain why Bratsk, the biggest aluminium smelter in the world, is diversifying into the manufacture of socks and panty-hose.
He acknowledges that some western industrialists might find it difficult to comprehend but the 300,000 people who live in the town of Bratsk rely almost entirely on the smelter for their livelihood. It provides 20,000 direct jobs and 77 per cent of the town’s income. The Dollars 2m of precious foreign currency invested in the hosiery business provides badly-needed jobs, is making products for which there is a ready demand and is profitable. The Bratsk smelter, located in Siberia, uses out-dated Soderberg technology and is a big polluter. The town authorities don’t like the pollution but need the smelter. A compromise resulted in Bratsk cutting output a little. One of Mr Shlaifshtein’s colleagues told Reuter this week that the smelter was producing 750,000 tonnes of aluminium a year compared with its capacity of 840,000 tonnes.
‘Russians must often choose between suffering from environmental problems or losing jobs and their ability to feed their families,’ points out Mr Shlaifshtein, who is the deputy director of Bratsk Aluminium Plant responsible for foreign economic relations.
Bratsk plans more investment to cut pollution – he says Dollars 12m has been spent so far and a similar outlay was made to improve the infrastructure around the smelter. It was essential that this be done without interrupting production of the metal that provides the cash to pay for it all.
Now the European Commission and the US aluminium industry is pressing for all the smelters in the Commonwealth of Independent States to cut production and exports. Talks are going on in Moscow this week in the hope that a framework for an agreement can be reached. Mr Shlaifshtein suggests: ‘If it is assumed that Russia should make all the sacrifices the talks (with the EC) won’t succeed.’
He says he could supply the EC delegation with ten to 15 reasons why EC smelters should close and adds with a knowing smile, ‘but we do not have such a strong lobby in the EC as the French’.
Russia’s moves towards establishing a market economy are now causing its aluminium industry severe problems. Since the begining of October electricity prices have risen by 180 per cent and transport costs by 150 per cent and Mr Shlaifshtein suggests that Russian aluminium production costs are now level with those in the western industry (see story above).
Since demand in Bratsk’s domestic market dried up (western analysts say at least half of all the aluminium produced by the former Soviet Union went to its military machine) the smelter has been exporting about 450,000 tonnes a year. The EC decision to restrict imports of CIS aluminium until the end of November had very little impact on the smelter, says Mr Shlaifshtein. But it has raised protests in Irkutsk, the region in which the smelter is located.
Irkutsk was allocated 100,000 tonnes of duty free aluminium exports from the two smelters in the region to barter for essentials such as food and medicines. This metal had to be directed away from the EC and the essentials were bought elsewhere in the world.
‘EC manufacturers lost the opportunity to deliver products to Russia. We are establishing links in Japan and the US that might not have been necessary (without the import restrictions). We are bringing in food from China which stopped buying our aluminium in 1990 but is now a customer again.’
Bratsk is attempting to stimulate new Russian demand for aluminium, but this will take time. Mr Shlaifshtein says that two joint ventures have been formed, one with a Japanese and one with a US partner (which he will not identify), to set up factories to produce non-stick cookware. About Dollars 8.5m is being invested, most of the equipment has been delivered, and the first factory should start up early next year. He says these ventures should consume about 20,000 tonnes of aluminium a year. Other CIS aluminium smelters are involved in similar projects.
Perhaps most important of all, Bratsk has been working on a scheme that should give it easier access to investment capital while cutting the price it pays for raw materials and raising the value of the aluminium it exports. These are the aims of Rosal Trading, a joint venture with Trans-World Metals, a London-based organisation that claims to be the biggest trader of Russian aluminium.
Trans-World previously provided finance for raw materials to ‘kick-start’ Bratsk’s production when the smelter was dangerously close to running out early last year. The London company is also involved in a joint venture with the local authority which has provided facilities for Bratsk to import alumina (aluminium oxide) and export aluminium in bulk at the port of Vanino on the east coast of Siberia.
Smartly turned out in a western suit and chain-smoking Marlboros, Mr Shlaifshtein sits in Rosal’s sparsely-furnished new office in the Trans-World headquarters and recalls that until three years ago Bratsk’s aim was to produce as much aluminium as possible. It received no foreign currency for its effort, all that went to the state, and it had no contact with consumers so the management had no idea that the metal being produced was considered low-grade.
‘One reason we formed this company was to share Trans-World’s experience and contacts abroad. Contacts with consumers will enable us to change production to meet their requirements. It will cost us very little to make these changes,’ he says.
Also, Bratsk wants to break out of the barter system into which it was forced by cash shortages. It has to import 50 per cent of its raw materials and pay for them with aluminium. ‘The best way is to buy raw materials at the lowest possible price and sell aluminium at the highest possible price. When you have to deliver metal to pay for raw materials you do not get the best price.’
The link with Trans-World gives Bratsk access to western banks and trade finance and, further down the road, investment finance – something not readily available to a smelter in remote Siberia.
Bratsk is now 51 per cent owned by its employees. Another 10 per cent is held by small shareholders in the Irkutsk region, leaving 39 per cent with the state. According to Mr Shlaifshtein, the state’s shares will be auctioned off to the public next month.
Meanwhile, the EC is offering help to the CIS industry in the form of technology and, possibly, finance, in exchange for production cuts. Mr Shlaifshtein says: ‘Our complex problems cannot be solved by others. We must solve our problems ourselves – then we can ask for help from others’.
But there is one way the EC could help Russia. ‘It is not possible to go to bed in a centrally planned system and wake up in a market system and expect everything to go smoothly. The EC could help us make this transition.’