Rio Tinto warns of an emerging turmoil in the aluminium business, anticipates sanctions on QAL

The anticipation of sanctions is on the fear radar of one of Australia’s largest alumina refineries, Queensland Alumina Limited (QAL). The alumina refinery is majorly owned by Rio Tinto, who has alerted of an emerging turmoil to its aluminium business, while the Russian aluminium giant Rusal is the 20% stakeholder of QAL.

The Gladstone, Australia based Queensland Alumina Limited operates a refinery, which was earlier been imposed with US sanctions in 2018. However, there has been no comment yet from QAL in regards to the sanctions or if any impact they are countering or predicting for the company.

Notwithstanding, on 23^rd February 2022, the 80% stakeholder of QAL, Rio Tinto, has informed the investors that it was anxious about the soaring tensions, that is developing very tough circumstances.

Jakob Stausholm, the CEO of Rio Tinto said, “Specifically in our business, I think what there could be disruption to primarily the aluminium industry.”

“If we are going to see sanctions and, you know, we saw sanctions in 2018, I’d like to say, on that front, we managed well last time there were sanctions. And the advantage for Rio Tinto of having such a big aluminium industry is that we have an integrated supply chain from bauxite to alumina to final aluminium products, and that puts us in a very good position to meet our customer needs during times of disruptions.”

The former sanctions against Rusal were withdrawn in January 2019 following the company’s founder, the billionaire Oleg Deripaska sided himself as Chairman of the group.

So far, Australia’s sanctions have focused on Russia’s banks and eight members of its national security council. The sanctions involve travel bans and financial restrictions.

Scott Morrison, the Hon. Prime Minister of Australia has also warned by saying, “The sanctions announced on Wednesday were only the first tranche and that more would follow if Russia did not de-escalate. Further measures are expected from the US and the EU.”

“We’ve got plenty left in the tank when it comes to further actions we would take if and when the violence is escalated by Russia,” the Prime Minister added.