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Thursday, March 10, 2011

Russia says local Alcoa unit abused monopoly

* Case concerns products used by Russia's military
* Alcoa says cooperating with investigation

MOSCOW, (Reuters) - Russia's FAS anti-monopoly service said on Thursday that the local unit of U.S. aluminium giant Alcoa (AA.N) has abused its dominant position in certain types of products used by the Russian military.

The regulator noted that Alcoa raised prices on aluminium sheet produced at one plant by 119 percent in 2009, well above the level for comparable products.

Alcoa's Russian unit said it would cooperate with the investigation.

"We can confirm that the company has fully cooperated with the anti-monopoly service in the consideration of this case, and will continue to do so," the unit said in a statement.

The investigation concerns sheets from aluminium alloy AMg6M, some formats of which are only produced by Alcoa's Russian unit. The sheets are used by the military in aviation and rocket building as well as for other arms needs, FAS said.

Alcoa's unit "abused its dominant position as there is an absence of economic, technological or other reasons for the doubling of prices for sheets from aluminium alloy AMg6M," FAS said.

"Such abuse leads to a significant increase of military technology and, as a result, an increase in the spending from the federal budget."

Alcoa acquired its two Russian aluminium plants in 2005 and it has invested more than $750 million in the facilities since then.

The Samara plant, commissioned in 1960, is Russia's largest producer of fabricated aluminium, supplying output to a range of industries including aerospace, shipbuilding and oil and gas.

The Belaya Kalitva plant, also known as Alcoa Metallurg Rus, is southern Russia's leading producer of fabricated aluminium, supplying a similar range of industries as the Samara plant. (Reporting by Alfred Kueppers; Editing by Will Waterman)

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