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. Last Updated: 07/27/2016

RusAl Will Cut Output to Enable Construction

United Company RusAl said Thursday that it is prepared to cut 500,000 tons of output at existing plants to enable construction to resume at two smelters in Siberia.

Building 300,000 tons of capacity at the two plants is "the only way to secure demand" for the 3,000-megawatt Boguchansk hydropower plant, which would otherwise have too few customers when it comes on line next year, RusAl spokeswoman Vera Kurochkina said.

RusAl also proposed that state-owned utility RusHydro provide $150 million of funding for the Boguchansk smelter and secure 20 billion rubles ($600 million) for the first line of the power plant, RusAl said in an e-mailed statement. The proposals have been sent to the government.

RusAl agreed last month to halt the Boguchansk smelter. It is seeking to borrow $150 million for Boguchansk and $300 million for Taishet, the other Siberian smelter.

The power plant will be the biggest built in Russia since the end of the Soviet Union. The complex was originally estimated to cost $3.6 billion, excluding government spending on infrastructure. RusHydro is in talks with partners on the project and is reviewing its options, said Yevgeny Druzyaka, the firm's head of communications.