Australia bans alumina exports to Russia Pushing up metal prices
On March 21, aluminum prices on the London Metal Exchange (LME) rose 4.8% percent as Rio Tinto said it would comply with all instructions from the Australian government. The group operates Queensland Alumina in a joint venture with Russian aluminum giant United Aluminum International.
Australia supplies nearly 20% of Russia's alumina, and the country recently banned the export of aluminum ore, including bauxite, to Russia.
Russia is a major aluminum supplier in markets such as Turkey, China and Japan. LME metal prices are up about 26% this year.
Rio Tinto Group reiterated that after the Russian-Ukrainian war, the company is terminating its commercial relations with Russian companies. Rusal holds a stake in the Queensland joint venture 20%.
Rusal said in a statement that it was assessing the impact of the ban. People familiar with the matter said earlier this month that Rio Tinto plans to stop supplying bauxite to Rusal's Aughinish plant in Ireland and buy alumina from the plant.
Although the aluminum industry has become the target of global sanctions, Rusal is facing supply chain disruptions. The company also cut production at its Nikolayev alumina refinery in Ukraine due to logistics and transportation challenges brought about by the war.
Australia said the ban would apply to "all related products" exported to Russia, although it was not clear whether Rusal would be able to sell alumina from its Queensland mine to the market and then buy the raw materials from other suppliers. If Russian companies can't do this, then prices may face more upward pressure. (Source: Bloomberg)
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