RusAl Cuts Aluminum Output

United Company RusAl said Thursday that it was cutting aluminum output 11 percent and alumina 30 percent by closing or lowering volumes at units with the highest costs as demand slumps.

The company will cut aluminum output by 500,000 tons per year by April 1 and reduce alumina production by 3.45 million tons by mid-2009, RusAl said.

"The aluminum market has experienced a rapid deterioration over the last six months," the company said. "More action is necessary" on top of cuts announced in the fourth quarter, it said.

The value of aluminum traded on the London Metal Exchange has fallen by half in the past six months after trading at a record high of $3,380.15 on July 11. Oleg Deripaska, RusAl's largest shareholder and chief executive, said Jan. 31 that aluminum would average $1,600 per ton in the next seven years.

Investment in 2009 will be reduced to no more than $500 million, RusAl said, without giving a comparison. The company will review the time frames for building the Taishet smelter and Komi bauxite and alumina complex, with completion of the Boguchanskoye energy and metals facility remaining a priority.

RusAl, which cut production costs at smelters by 27 percent by the end of January compared with the third quarter, plans to reduce them by another 32 percent by cutting management expenses by 60 percent from February and using alternative suppliers.

The closely held company also said it was cutting 5 percent of its workforce and freezing new hiring.