Severstal shuts down Murmansk plant
Russian steel major Severstal has closed down its Olcon plant in Olenegorsk due to low demands. The plant is one of the biggest in Murmansk Oblast.
The closure of the Olenegorsk plant will alone leave more than 500 people without work. The plant is the cornerstone plant in Olenegorsk, a town with about 30,000 people.
According to newspaper Kommersant, all employees of the Olcon plant have now been sent on “forced vacation”. Until 1 December they will get two thirds of their salaries. After that, the employees might face an uncertain future.
Plant representatives still say that production will be resumed in December. The company is reported to have a confirmed order of 300,000 tons of concentrate that month. Until now, the Olenegorsk plant has produced a monthly 380,000 tons of concentrate.
Plant director Vasilii Chernykh says to Gzt.ru that the main task for the company now is to work its way through the period of instability “in an organised way”. He confirms that all the most complicated issues will be solved in cooperation with the labour union.
Olcon is a regional subsidiary of Severstal, Russia’s biggest producer of steel. The company operates five mines, and has had major plans for new mining development.
The resource-rich Murmansk Oblast now starts to feel the consequences of the international financial crisis and subsequent economic downturn. The closure of the Olcon plant might not be the last of the region’s many mining and metallurgy plants which halt production. Also mining and metallurgy giants Norilsk Nickel and Rusal have subsidiaries in the Kola Peninsula.
