UC Rusal is planning to invest up to $7bn in building a nuclear-powered aluminium smelter that will be the world’s biggest, signalling a return to the kind of industrial mega-projects last seen in Russia during the Soviet era.

The world’s biggest aluminium producer said on Tuesday it had reached agreement with the regional government of Saratov, on the River Volga in European Russia, to build a smelter with a capacity of 1.05m tonnes of aluminium a year.