Newspaper article The Canadian Press

Rio Tinto Closely Watching Industry Impact of U.S. Sanctions on Russian Rival

Newspaper article The Canadian Press

Rio Tinto Closely Watching Industry Impact of U.S. Sanctions on Russian Rival

Article excerpt

Rio Tinto eyeing U.S. sanctions on Russian rival

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MONTREAL - The head of Rio Tinto's aluminum division said Tuesday he is closely watching the industry impact of U.S. sanctions on its Russian rival, Rusal, one of the world's largest aluminum suppliers.

The United States Treasury Department on Friday announced sanctions against seven leading Russian businessmen, 17 officials and a dozen Russian companies, including the aluminum giant. Rusal shares have dropped by more than half since the sanctions were announced, and the company has warned it may technically default.

"It's a bit early yet to speculate on exactly how this is going to work out and what impact it's going to have on the whole industry," Rio Tinto aluminum chief executive Alf Barrios said in an interview.

"What is clear is that Rusal is a significant supplier of aluminum to the world and clearly we'll have to evaluate this in detail and understand exactly how we're going to manage our business."

Industry observers believe London-based mining giant Rio Tinto is among the main beneficiaries from actions taken Friday as part of the U.S. administration's attempt to punish Russia for actions including activities in Syria, Ukraine and Crimea.

Global aluminum prices have risen as the sanctions have fuelled concerns over supply.

The sanctions against Russia come as the U.S. is also escalating a trade war with China, partially by imposing aluminum tariffs on the Asian superpower and a host of other countries, from which Canada is temporarily exempt.

Barrios said he expects "common sense" will prevail when it comes to Canada's current exemption from American tariffs on the metal.

Donald Trump announced tariffs on steel and aluminum imports last month using the so-called "Section 232" of U.S. trade laws that allows the U.S. president to restrict imports and impose unlimited tariffs if a Commerce Department investigation finds a national security threat.

He gave temporary exemptions to Canada, Mexico, Australia, Argentina, South Korea, Brazil, and the member countries of the EU and suggested that a final decision on tariffs against its North American neighbours could be dependent on successful NAFTA talks. …

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