In February, three major ferroalloy plants responsible for the majority of Russia’s production were nationalised.

In February, Russia’s Prosecutor General’s Office filed a lawsuit to seize Etalon, a holding company for three major ferroalloy plants, namely the Chelyabinsk Electrometallurgical Plant (ChEMK), Serov Ferroalloy Plant, and Kuznetsk Ferroalloys. The transfer of 100% of Etalon’s shares in the metals assets to state ownership was made possible after the Arbitration Court of Sverdlovsk Oblast ruled in favour of prosecutors seeking to nationalise them on the grounds that they had been illegally privatised in the 1990s.

In early March, government officials began discussing the possibility of transferring the shares to Rosimushchestvo, the Federal Agency for State Property Management, which will then be passed on to state-owned defence conglomerate Rostec. Rostec will be responsible for the sale of 75% of the shares to investment partners but will retain the remaining 25%.

The plants under the Etalon portfolio account for more than 80% of Russia’s total ferroalloy production. In 2023, Russia was responsible for 11% of global ferrosilicon (>55% and <55%) exports, with the USA importing 36% of Russian supply. Consequently, nationalisation of the plants is expected to disrupt US ferrosilicon supply as the USA has maintained significant volumes of ferrosilicon imports from Russia over the years and, according to the USGS, did not have government stockpiles at the end of 2023. Furthermore, Rostec is currently under US sanctions for manufacturing weaponry used in the Russia–Ukraine conflict, and these plants may, therefore, face restrictions or sanctions when attempting to trade with the West.

The nationalisation of these plants and their link to Rostec may push US Congress to consider passing the Increasing American Ferrosilicon Production Act introduced by US Senators Sherrod Brown and Tommy Tuberville in late September 2023. The Act supports domestic ferrosilicon production and aims to strengthen and diversify domestic supply chains while reducing reliance on ferrosilicon imports. While this legislation has not yet been passed, producers in the US, namely Ferroglobe and CCMA, have indicated that they support the legislation and are willing to increase production, as they have sufficient excess capacity to meet domestic demand when supported by imports from countries other than Russia.