Russian alumina giant warns on carbon tax

THE Australian arm of Russia's Rusal, controlled by billionaire oligarch Oleg Deripaska, has warned Canberra that the proposed carbon tax could jeopardise future investments, including in the huge Queensland Alumina refinery near Gladstone on the central Queensland coast.

In a recent submission on the government's proposed carbon tax and transition arrangements to an emissions trading scheme, Rusal, the world's biggest maker of aluminium, warned that the proposed policy "poses a threat to the continuing financial viability of QAL and to further expansions of the facility".

The QAL joint venture of Rio Tinto and Rusal is expected to warn its 1500 employees and contractors about the consequences for the refinery under the proposed tax. The Rusal board is also set to debate at a meeting in Hong Kong tomorrow whether the refinery has a long-term future.

At QAL there are growing concerns that the new tax will render the refinery globally uncompetitive and see the refinery's owners pursue investments elsewhere.

Rusal, which owns a 20 per cent stake in QAL, believes the proposed framework for the carbon tax will see the QAL penalised disproportionately to its peers.

With Rusal weighing up some of its other major investments elsewhere in the world, the aluminium giant is expected to discuss whether QAL warrants further investment.