Russian dam disaster kills 10, another 62 missing

CHERYOMUSHKI, Russia (Reuters) - Ten people were killed on Monday and 62 were missing after a turbine room flooded at Russia's largest hydro-power station, forcing steel and aluminum plants in Siberia to turn to emergency power.

RusHydro, owner of the Sayano-Shushenskaya plant, said the damage would run into "billions of rubles" and take several months to fix. The company's shares were suspended in Russia and fell more than 15 percent in London.

Panicked residents in the shadow of the Soviet-era dam fled the region when news of the accident spread at 8:15 a.m. (0015 GMT). Calm returned after Emergencies Minister Sergei Shoigu said there was no danger of damage to the structure of the dam or that it would burst.

Officials said water flooded a turbine room at the dam, which is more than 3,000 km (1,900 miles) east of Moscow. An investigation was under way to determine the exact cause.

A spokesman for RusHydro, quoting acting chief executive Vasily Zubakin, said 10 people had been killed, 11 were injured and another 62 were missing.

A Reuters correspondent saw about 150 emergency workers in safety helmets gathered at the dam. The damaged pump room, around 100 meters in length, is located high in a concrete wall that has dammed the waters of the Yenisei River since 1978.

Zubakin, speaking on a conference call, said the plant had stopped operations and damage would run into "billions of rubles." Some production units were damaged beyond repair, and even a partial restart of the undamaged units would take several months, he said.

The Sayano-Shushenskaya plant represents 25 percent of RusHydro's total capacity of 25.3 gigawatts of power.

"The accident will serve as a reminder of the importance of electricity in a modern economy, and that safety and reliability cannot be achieved without proper funding," analysts at investment bank Renaissance Capital said in a research note.

Russia's financial markets regulator suspended trading in RusHydro shares on both main stock exchanges at the company's request. The stock had fallen 7.1 percent on the MICEX exchange when suspended, while the main index was down 3 percent.

ALUMINUM AND STEEL

The power station is only 50 km (30 miles) from two smelters owned by United Company RUSAL, the world's largest aluminum producer and the biggest asset in the empire of indebted businessman Oleg Deripaska.

Electricity to the Khakassia and Sayanogorsk plants was cut but both switched to supplies from the neighboring Krasnoyarsk and Kemerovo regions and resumed normal operations, said Vladimir Shulekin, spokesman for the Sayanogorsk plant.

However, in an emergency meeting chaired by Energy Minister Sergei Shmatko and attended by Deripaska, aluminum output cuts were discussed as a possible way of creating additional energy reserves for autumn and winter, when the load on the power system increases, UC RUSAL said in a statement.

Renaissance Capital said the unavailability of a third of Sayano-Shushenskaya's capacity would reduce RusHydro's 2010 revenues by around $100 million, or 3 percent. It forecast reconstruction costs of between $1.0 billion and $1.5 billion.

Zubakin said RusHydro's monthly losses would be 1.5 billion rubles ($47.3 million), Interfax news agency reported.

Regional power supplier OGK-6 said in a statement it had raised output at its Krasnoyarsk hydroelectric plant to full capacity to help make up the shortfall from the accident.

Steel maker Evraz Group also relies on Sayano-Shushenskaya for some of the power used by its mills and coal mines in Kemerovo region. Evraz said it was doing everything to avoid or minimize any possible production losses.

(Additional reporting by Robin Paxton, Conor Humphries, Anastasia Lyrchikova, Polina Devitt, Lyudmila Danilova and Tanya Mosolova; Writing by Robin Paxton; Editing by Kevin Liffey)