STRUGGLE FOR CONTROL OF RUSSIA’S ALUMINUM INDUSTRY.

Interpol is the latest addition to the ever-expanding cast of characters in the struggle for control of Russia’s aluminum industry. (Izvestia, March 18) The struggle is not only about who is to control a major national asset but also about Russian resistance to control by foreign investors and about trying to stymie Aleksandr Lebed’s presidential aspirations. The leading player in the saga is David Reuben, chairman of the London-based metal traders, Trans-World Metals Ltd., which controls two of Russia’s biggest smelters. Reuben is now waging a high-profile campaign against attempts to denationalize the aluminum industry. (Ekspert, No 6; Financial Times, March 6-7; Finansovye izvestia, March 20)

Trans-World Metals was trading in Soviet aluminum, along with other metals, long before the USSR broke up. In association with Russian businessmen who allegedly enjoyed close ties to former first deputy premier Oleg Soskovets, Trans-World in 1991-92 won control of about 50 percent of Russian aluminum-smelting capacity, and therefore about 5 percent of world capacity. (Business Week, September 16, 1996) Reuben is the only western businessman with a large stake in a resource-based Russian industry, a position he secured by taking enormous financial risks at a time when the Russian economy was in a state of maximum flux.

Recently, however, Trans-World’s operations have become the target of a Russian media campaign alleging that its Russian associates broke the law and misused their connections with Soskovets to expedite deals for Trans-World. Some commentators see the media blitz as an attempt to discredit Soskovets, who remains a powerful industrial magnate and who is allegedly preparing to bankroll Aleksandr Lebed’s presidential aspirations. But the case has also come under investigation by Interior Minister Anatoly Kulikov, who last month called for Russia’s strategically important aluminum industry to be removed from the control of "foreign capitalists." David Reuben has warned that attempts to dislodge Trans-World will deter other western investors from getting involved in Russia.

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