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Rio Tinto to declare force majeure on some contracts

13 Apr 2018 17:41 (+01:00 GMT)
Rio Tinto to declare force majeure on some contracts

London, 13 April (Argus) — UK-Australian mining firm Rio Tinto is in the process of declaring force majeure on certain contracts after the US imposed sanctions on seven Russian individuals, including Oleg Deripaska, owner of Russian aluminium producer Rusal.

The arrangements include Rusal's 20pc interest in Rio Tinto's Queensland alumina refinery, and Rusal's associated supply and offtake agreements.

They also include Rio Tinto's bauxite sales to Rusal's Anghuinish alumina refinery in Ireland and offtake contracts for alumina from the refinery, which supplies Rio Tinto's aluminium smelters in France and Iceland.

The company said it is fully committed to complying with the sanctions.

The Queensland alumina refinery produced 3.7mn t in 2017, so Rusal's 20pc interest accounted for 740,000t.

Rio Tinto's Dunkirk aluminium smelter, the largest primary aluminium smelter in Europe, produced 284,000t of primary aluminium in 2017.

Rio Tinto signed a binding agreement in January to sell the smelter to Liberty House, a subsidiary of global industrial group GFG Alliance. The deal is expected to be concluded in the second quarter.

Rio Tinto's Iceland smelter produced 212,000t last year.

The three-month LME aluminium contract traded at $2,303.50/t on 13 April, up by 16pc on the week.