Norway shooting for aluminum factory on Kola Peninsula – will local nuke plant power it?

Publish date: September 5, 2008

Written by: Anna Kireeva

MURMANSK – A delegation from Norway’s Hydro Aluminum has presented a plan for an aluminum factory to the government of Murmansk, representing the second attempt by a Norwegian company to secure permissions to build an aluminum plant on the Kola Peninsula.

The source that will power the factory if it gets the green light could be the Kola Nuclear Power Plant 2, the hotly contested second phase of the aged Kola Nuclear Power Plant, whose rickety and outdated reactors have brought calls from Norway to shut it down. But planned nuclear expansion in the region is largely by the Russian government as the only way to power large-scale  industrial booms.

The so-called second phase of the Kola Nuclear Power Plant has been shunned in local public opinion polls and been the target of environmental debate, but Russian industrial development priorities – including powering future oil and gas installations in the Shtokman oil and gas condensate field  – have been riding roughshod over ecological concerns.

The aluminum plant plans have also been forwarded without any public consultation. Even though this is no longer required the Russian government, it deepens the opacity under which large-scale industrial projects in Russia can go forward.
These tendencies have raised alarm bells with Bellona, which is concerned with the nuclear connection Hydro could be exploring.

“We are deeply disappointed over Hydro. They are trying to build up an industry that will demand a lot of nuclear power,” said Nils Bøhmer, Bellona’s nuclear physicist and daily manager said.
“That is a bad thing in and of self, and it’s making it worse that it will happen in a country where security is not prioritised as it should be.” 

The Norwegian proposed aluminum factory would produce some 475,000 tons of aluminum a year, and its operation would require 600 megawatts of electricity.

In 2006, when a Norwegian company announced plans to build an aluminum plant in the Murmansk Region, many experts considered that it was a move to get deeper into the fight for a portion of the Shtokman field, the Arctic oil and gas boomtown that Russia is staking much of its economic future on. 

This earlier plant would have produced 600,000 tons of aluminum a year and would have been powered by natural gas from the Shtokman field. But the Norwegian Statoil failed to be short listed by Gazprom, Russia’s natural gas giant that will be overseeing the Shtokman Development holding company developing the Arctic field, and the company was denied.

Now that Norway’s Statoil has merged into StatoilHydro – one of Gazprom’s two foreign partners in Shtokman Development – Norway is revisiting the idea of a Kola Peninsula-based aluminum factory.

Powering the aluminum factory – precedent points to nuclear
The chief obstacle standing in the way of any foreign company working in Russia that is directly tied to the aluminum factor is the availability of electric energy.

There is a precedent for environmental concern that any aluminum factory built on the Kola Peninsula.

Earlier, the Russian company Rusal came forth with the idea of constructing an aluminum plant on the Kola Peninsula, and even chose a site for its construction. The chosen source of power was the second phase reactors at the Kola Nuclear Power Plant. But after Rusal and another Russian aluminum company, Sual, merged, the conglomerate’s priorities changed.

Murmansk Regional Governor Yury Yevdokimov suggested that Norway use the same site that was earlier chosen by Rusal and Sual for construction of the second phase of the Kandalash Aluminum Factory.

“We understand that the issue of guaranteeing electrical energy is one of the most complex,” said Bjarne Reinholdt, head of Hydro Aluminum’s North Atlantic Office, in the meeting between Norwegian and Russian delegates.

“And, of course, we are taking into consideration discussions that are currently taking place in Norway relative to the use of nuclear energy.”

Specialists with the Murmansk branch of the Russian Federal Service for Ecological, Technical and Atomic Supervision – which oversees Russia’s nuclear industry – say there is not enough electricity to build such plants.

“There have still been no realistic plans with energy installations and other details submitted – it is premature to talk about it,” said a representative of the service in an interview with Bellona Web.

Nevertheless, the Regional Government here has a positive outlook on building a second plant.

“The Murmansk area must develop. We must attract investors,” said the Murmansk Regional government’s deputy director of the department of industry and transport, Sergei Leus.

“This is good for development of the social sphere (taxes) and for employment,” he said.

The Norwegian side told representatives of the Regional Government that if the realisation of this project comes quickly, it will create some 6,000 jobs for Russia’s northern region. Construction of the plant alone should provide some 3,000 to 4,000 jobs.

Hydro is a group of companies dealing with oil and gas projects, aluminum production, hydro-electric energy and engineering projects it the renewable energy field.

Hydro Aluminum is one of the subsidiaries of the group, and deals in the metallurgical complex as one of the worlds leading aluminum producers.

Pluses and minus for the Murmansk Region

During the meeting, Hydro Aluminum representatives noted that one of the most important sectors of its work was adhering to strict environmental preservation and defence guidelines, and monitoring of climate change gasses.

Reinholdt cited as an example the construction of an aluminum plant in Norway.

“Currently, we are carrying out work on the construction of a smelting station in a Norwegian city. It is worthy of note that the factory is practically in the center of the city, but we took all measures to ensure it has no environmental impact on the city,” he said during the meeting with Russian counterparts.

Meanwhile, representatives of local environmental organisations have expressed concern over the fact that aluminum production plants are generally harmful to the environment.

Moreover, the Russian nuclear industry says that powering a second aluminum factory in the area would require the construction of the Kola Nuclear Power Plant 2, which has already met with vigorous environmental protest.

“There is only one way to get energy to this aluminum factory that Hydro now is planning: through nuclear energy from Kola,” said Bøhmer.

“If Hydro becomes a big customer at the nuclear plant, that will pave the way for further activity at the old nuclear plant, perhaps even expansions.”

The fact that the presentation of the project by the Norwegians was brought forth without any public consultations also raised red flags for environmentalists.

“It is necessary that the public be brought into discussion of such projects at the earliest stages possible,” said Oleg Stukaitis, head of the World Wildlife Funds Barents Sea office.

“The absence of such discussions immediately speaks of the opacity of the company, and influences (the public) against production,” he said.

Anna Kireeva reported and wrote from Murmansk and Charles Digges wrote and translated from Oslo.