Rio Tinto, Glencore declare force majeure on Rusal aluminum supplies
Monday, April 16, 2018
Rio Tinto and Glencore are declaring force majeure on some aluminum supply contracts from Rusal after the United States sanctioned certain Russian entities and individuals, including major aluminum supplier Rusal and its boss, metals magnate Oleg Deripaska, for alleged meddling in the 2016 U.S. election.
Force majeure is a clause in contracts that allows both parties to walk out of the contract when an extraordinary event or circumstance beyond the control of the parties happen.
Rio Tinto said it was working with its customers to minimize disruptions to supply and would fully comply with U.S. sanctions.
The company is reviewing Rusal’s 20% interest in Queensland Alumina Limited in Australia, including Rusal’s associated supply and offtake arrangements, bauxite sales to Rusal’s refinery in Ireland and offtake contracts for alumina that are used at Rio Tinto’s smelters, mainly in France and Iceland.
Rio owns the other 80 percent of the Queensland refinery, which produces 3.95 million tonnes of alumina per year. Rio produced 3.6 million tonnes of aluminum in 2017.
Swiss-based Glencore is a Rusal shareholder and one of its biggest customers. Glencore Chief Executive Ivan Glasenberg resigned from his role as Rusal director on April 10, 2018.
Global aluminum production is forecast at around 65 million tonnes for 2018. Glencore will control about 4-5 million tonnes, about half of which would be from Rusal.
This article was edited from multiple stories from Reuters.