Wed | Sep 30, 2020

Rusal turbulence hits aluminium prices

Published:Monday | April 23, 2018 | 12:00 AM
The Windalco plant in Ewarton, St Catherine.

The United States Treasury Department moved to ease sanctions against Russian aluminium company Rusal.The Treasury Department extended a deadline for US companies to stop doing business with Rusal and also said it could change its stance on sanctions against the company if billionaire businessman Oleg Deripaska gives up control.

Aluminium prices dropped by around 10 per cent on the news Monday and eventually closed down by seven per cent at US$2,295.

Earlier this month, the US imposed sanctions barring citizens from doing business with numerous Russian businessmen, including Deripaska, as well as several Russian officials and companies. That followed US frustration with Russian policy in Syria and Ukraine, as well as alleged election interference.

Last week, the Kremlin said a temporary nationalisation of Rusal was being discussed after the company was hit by United States sanctions.

President Vladimir Putin's spokesman Dmitry Peskov said nationalisation was "one of the viewpoints which is being actively discussed" as the government mulls how to support Rusal.

Peskov added that "it is important here to understand the opinion of the company's shareholders, the company's owners, and the government", and that no decision has yet been reached.

The US sanctions against Rusal and its major shareholder, tycoon Oleg Deripaska, have blocked the company from using many international financial institutions and caused it to lose customers.

UC Rusal is the owner of local bauxite company Windalco. Jamaica's Minister of Mining, Robert Monteague, is scheduled to make a statement on the potential impact of the sanctions on Rusal's local holdings in Parliament, today, Tuesday.

Windalco operates two plants at Ewarton in St Catherine and Kirkvine in Manchester with combined capacity of 1.28 million tonnes of alumina per year. Rusal supplies about six per cent of the world's alumina through its global operations.

Jamaica sold its seven per cent stake in Windalco to UC Rusal in 2014 in settlement of debt owed to the Russian company.

- Wire and Gleaner reports