30 Mar 2022 11:00

Australia's ban on alumina exports to Russia to affect 20% of Rusal's supply

MOSCOW. March 30 (Interfax) - The ban on alumina and bauxite exports to Russia that Australia imposed on March 20 will affect about 20% of Rusal's needs for this raw material, the Russian aluminum giant said.

Rusal also recalled the temporary shutdown of production at its Nikolaev alumina refinery in Ukraine, which produced 1.8 million tonnes of alumina last year. The Nikolaev refinery, Rusal's second largest alumina asset, produces about 20% of the company's total output.

Rusal acknowledged that its Russian aluminum smelters might have to operate below capacity due to the current external political situation. This was one of the reasons the company asked the government to ease the impact of the Central Bank's interest rate hike on its loans.

Rusal said that, in addition to the shutdown of the Nikolaev refinery and the blockage of its financial activities, there is a risk that supplies of raw materials from foreign assets, including the Aughinish alumina refinery in Ireland, might stop. Aughinish, Rusal's largest alumina refinery, produced 1.88 million tonnes of alumina in 2021 or 23% of the company's total.

In addition to difficulties with raw materials, Rusal said there might be disruptions in equipment supplies due to sanctions against Russia, which could lead to delays implementing investment projects.

The possible replacement of credit lines in foreign currency with debt denominated in rubles could have a negative impact on financial results due to high interest rates on the ruble market caused by general instability and the doubling of the Central Bank's key interest rate to 20%, the company said.

Meanwhile, the Russian government's recently announced plans to change regulation of prices for metals on the domestic market could have a negative impact on the company's profitability, Rusal said.

The company continues to assess the impact of these circumstances on its financial position and results in 2022 and beyond and will make further announcements if and when necessary, Rusal said.