US sanctions force bosses at Aughinish owner to quit
Rusal, the owner of the Aughinish Alumina refinery in Limerick, has carried out its next step in a plan to persuade the US to lift sanctions by announcing the resignation of its CEO and most of the board.
The Russian aluminium giant also signalled that turmoil could return to metals markets if the sanctions aren't removed by October, saying that banks will likely cut ties with the company, which would "severely impact" metal production and sales. Some banks have already limited the processing of payments for Rusal, it said yesterday. It also warned that the sanctions could negatively affect its ability to pay its debt.
The sanctions have the potential for dire consequences for the Limerick operation, where around 450 people are employed. Rusal is trying to secure its survival by convincing the US Treasury to roll back its penalties under a proposal that would reduce the influcence of Russian oligarch Oleg Deripaska at the firm. He holds the Rusal stake through his holding company En+. The survival plan would cut Mr Deripaska's shareholding to below 50pc in En+ and appoint a majority of independent directors.
"The moves are rather formal, but they show that Deripaska is ready to give the US an excuse to at least ease the sanctions," said Kirill Chuyko, an analyst at BCS Global Markets in Moscow. "The US Treasury may accept those efforts." Rusal shares rose as much as 7.4pc in Hong Kong on the news.
Rusal is at the centre of the global supply chain and if it remains sanctioned, there's a risk of job losses and shortages at major manufacturing plants.
It hasn't fully resumed aluminium shipments and has been unable to pay full salary to some staff outside of Russia.
The US sanctions rocked the aluminium industry in April as buyers scrambled for supplies and many firms cut ties with Rusal, which was producing about 17pc of world output outside of China.
The rally in prices moderated when the US offered temporary sanctions relief until October. (Bloomberg)