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JAMAICA | United States removes Sanctions on RUSAL

Aluminum Company Rusal is the parent company of Jamaica’s Windalco Aluminum Company Rusal is the parent company of Jamaica’s Windalco
KINGSTON, January 28, 2019 - It is expected that with yesterday’s lifting of sanctions by the United States on Aluminum Company Rusal, the parent company of Jamaica’s Windalco - and other Russian firms linked to billionaire Oleg Deripaska, a measure of normality will return to Windalco's operations.

In a statement on Sunday, the U.S. Treasury Department said the companies had reduced Mr. Deripaska's direct and indirect shareholding stake and severed his control.

This should provide some relief to Windalco employees who were worried about the possible negative repercussions of the sanctions on the operations of the Manchester-based mining company.

The jobs of hundreds of Windalco workers were under threat after the United States Government placed a ban on Mr. Deripaska and some of his companies, including Rusal.

It was argued that Mr. Deripaska, an ally of Russian President Vladimir Putin, retained too much control over the companies to lift sanctions imposed in April to punish Russia for actions including efforts to interfere in U.S. elections.

Oleg Deripska
Billionaire Oleg Deripaska owner UC Rusal, a Russian based Aluminium (RUSAL) company owns 93 percent of Windalco a major producer of aluninum in Jamaica.

Some lawmakers from both parties also said it was inappropriate to ease the sanctions while Special Counsel Robert Mueller investigates whether President Trump's 2016 presidential campaign colluded with Moscow.

Trump administration officials, and many Republicans who opposed the effort to keep the sanctions in place, said they worried about the impact on the global aluminum industry. Rusal is the world's largest aluminum producer outside China.

The sanctions on the company spurred demand for Chinese metal, with China's aluminum exports jumping to a record high in 2018.

UC Rusal, a Russian based Aluminium (RUSAL) company owns 93 percent of Windalco a major producer of aluninum in Jamaica, employing some 12 hundred persons. Windalco operates two plants, at Ewarton in St Catherine and Kirkvine in Manchester.

En+, a London-listed energy provider, along with Rusal, a Hong Kong-listed aluminium group, and power firm EuroSibEnergo are expected to be free of Washington’s sanctions.

Deripaska’s slice of En+ is due to fall from around 70 per cent to below 45 per cent under restructuring that could involve a “charitable” donation of shares.

“These companies have committed to significantly diminish Deripaska’s ownership and sever his control,” the US Treasury announced, adding that the sanctions would be removed in one month.

The Russian tycoon will reportedly not receive any payment for the shares he will lose, which were worth more than £1 billion before sanctions were imposed.

He still faces sanctions, which are intended to prevent him profiting from his remaining stake in the firms.

The restructuring agreement to reduce Deripaska’s shares in Rusal, En+ and EuroSibEnergo will prevent Deripaska obtaining payments or receiving future dividends from the firms.

En+ generates hydropower in Russia and owns 48 per cent of Rusal, one of the planet’s largest aluminium suppliers.

Aluminium production is normally associated with hydropower because of the demand for high levels of cheap electricity.

Most of the power En+ generates is used to supply Rusal’s aluminium production. The energy company was listed on the London stock exchange in November 2017, raising about US$1 billion.

Shares in both companies halved in value when sanctions were imposed in April on Deripaska and the firms that he controls. The US said Deripaska and six other tycoons were acting for the Russian government, which it accused of “malign activities” internationally. Deripaska denies the allegations.

The Republic of Ireland, which lobbied the US heavily for the removal of sanctions to protect 600 jobs at an alumina factory, said the move was “a very welcome return”.

The Aughinish Alumina site is due to be free from the threat of sanctions after a 30-day Congressional review period, according to Ireland’s foreign ministry said. The factory produces about a third of Europe’s alumina, the material used to manufacture aluminium.

A UK Conservative politician, Lord Greg Barker of Battle near the English town of Hastings, is chairman of En+ and has been leading bids to get sanctions lifted by arranging for Deripaska to ditch his stake.

Last modified onMonday, 28 January 2019 14:05
  • Countries: Jamaica

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