By the time privatization started in 1993, Michael had become one of the largest manufacturers and exporters of coal, copper, coke, and ferrous metals. He entered a partnership with his younger brother Lev.

Michael invested tens of millions of dollars, as well as the connections in the ministries and the industries he had cultivated in four years.

Lev, on the other hand, brought in the Reuben brothers of TransWorld Group, a metal trading company. The Reubens offered Lev, who in turn offered Michael, to become partners in developing Russian aluminum industry.

In the Soviet Union, alumina, the raw material for aluminum production, was purchased in Australia and New Zealand. Most of the product, 75 percent, was consumed domestically, by the military- industrial complex. As the market era dawned, the Military-Industrial complex reduced orders, the hard currency for alumina vanished, the smelters came to the point of stoppage, and the workers went for months unpaid. The Cherney brothers with their Western partners offered the new Russian government a plan to prevent the stoppage: We will buy alumina, we will deliver it to smelters, we will pay wages, we will pay electricity and all other production expenses. Our conditions: your surplus product will be sold exclusively through us and at the price that will take into account our expenses. This system was called "tolling". Russia benefited from it, and the government gave a green light.

Soon, the partners' net profits amounted to 30 percent from metals' cost.

Alexandr Bovin, one of the ideologists of perestroika and Russia's former ambassador to Israel recalls saying once at a government meeting, "All you need is a couple more Cherney brothers, and you would reconstruct the entire heavy industry."

In 1993, privatization started: Yeltsin's reformist government developed a voucher system. A number of foreign companies had already come to the Russian market. They bought up Russian product at low cost, but they could not believe they could buy companies for vouchers. The Cherney brothers found their bearings fast. They believed in privatization, in Russia's democratic reform, earlier than others did. People were suspicious of vouchers and were ready to sell them. The Cherneys were buying them out through their investment companies.

Soon, vouchers turned into shares, and the Cherneys began buying stock in ferrous and nonferrous companies. In three or four years they, along with their partners, came to buy a controlling majority in Russia's largest smelters: Bratsk, Sayansk, Novokuznetsk, and Krasnoyarsk.

From an Interview with Michael Cherney

"In privatization, we were outsiders, not linked to either Party bosses or gangsters or security services. I suspect this is why they fought us. In 1994-97, they were not striking against the hustlers who built financial pyramids, but those who wanted to build up industries and create jobs. Nobody needed those companies. The Soviet Gossnab that had provided money and raw materials and had marketed the product now collapsed. All the factories were gradually going down the tubes. The foreigners were not interested in saving them - then they would have to stop their own factories. Besides, they still remembered NEP, the Soviet 1920's capitalist experiment, when at first private capital was allowed in, and then the profits were taken away. But in 1994, if it had not been for privatization, in two years the factories would have turned to scrap metal. They served as quiet little troughs for local authorities. And suddenly here we come - not Party functionaries, but simple Jewish boys. Basically, earning ten dollars today, borrowing another twenty, investing another thirty, and collecting a profit of three hundred. Which makes a lot of people envious. But what happens at State-owned factories that no one bought? Nothing works, and no one pays the wages."

While the Soviet military-industrial complex was working, most of the 3.5 tons of aluminium manufactured a year was consumed domestically. After the collapse of the Soviet Union, the Western companies expected the Russian smelters to stop and the prices to go up. But after a couple of years industrialists like Cherney brothers and their partners began reviving the industry and learned how to compete with Western monopolies and give them a run for their money on the market. Now Russia consumed 400,000 tons, and 3 million went for export. Naturally, Western monopolies went to war against the Russian newcomers.