U.S. confirms the most awaited move for the aluminium industry; lifts sanctions on Rusal on Sunday, January 27

As the most awaited move in the aluminium market, US Treasury on Sunday lifted sanctions on aluminium major Rusal and other Russian firms linked to oligarch Oleg Deripaska. Though there was pressure from the Democrats on the administration to continue with the sanctions, finally the sanctions were lifted with the fulfilment of the conditions.

Advocates for sanctions had argued that 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 a number of political and diplomatic actions. Some lawmakers from both parties were also not in favour of lifting the sanctions.

The U.S. Treasury Department, in its statement said that the three sanctioned companies had reduced Deripaska's direct and indirect shareholding stake and severed his control following the treasury’s instructions and the actions are satisfactory enough.

The companies ensured that most directors on the En+ and Rusal boards would be independent directors, including Americans and Europeans. They would have no business, professional or family ties to Deripaska or any other person related to the U.S. sanctions. U.S. sanctions continues to stay on Deripaska.  

"The companies have also agreed to unprecedented transparency for Treasury into their operations by undertaking extensive, ongoing auditing, certification, and reporting requirements," the statement said.

Trump administration officials and other Republicans, in favour of lifting the sanctions argued that the sanctions would have had a severe impact on the global aluminium industry. Rusal accounts for about 14 per cent of world aluminium production outside China. The company not only supplies about 6.5 % of global aluminium demand but also supplies about 7 per cent of the world’s alumina.  They said that Deripaska’s decision to give up his stakes in the companies and sacrifice his controls showed that the sanctions had fulfilled its purpose.

The sanctions on Rusal spurred demand for Chinese aluminium and alumina. China's aluminium exports jumped to a record high in 2018. China’s total exports of alumina in 2018 stood at 1.46 million tonnes from almost none in 2017.

Trump denied collusion, and Moscow has denied seeking to influence the U.S. election on Trump's behalf.