Threat of Sanctions Puts Rusal in a Bind
In April, Rio Tinto said it would declare force majeure for contracts involving shipments of alumina from a refinery it operates with Rusal in Australia and for bauxite shipments to a Rusal alumina refinery in Ireland, which feeds smelters in Europe. Rioís announcement rattled metals markets. Other western companies are also trying to avoid becoming entangled in the sanctions. Glencore CEO Ivan Glasenberg resigned his position as a director of Rusal. Glencore holds a 9% stake in Rusal, which is valued at about $1 billion. The company said it was committed to complying with the sanctions.
Rusalís aluminum, alumina and bauxite production accounts for approximately 7%, 7% and 4% of the global production in 2017, respectively. The companyís inability to conduct business is creating great uncertainty in the marketplace. A Rusal spokesperson said Deripaska called the sanctions against him baseless, ridiculous and absurd.