Rusal delivers stark assessment of its future amid Russia’s economic isolation

Aluminium giant owns large refinery in Aughinish in Limerick

United Co Rusal International PJSC, which owns the Aughinish Alumina refinery in Co Limerick, delivered a stark assessment of the threats the aluminium giant faces amid Russia’s growing economic isolation, from potential raw materials shortages to the irreplaceable loss of markets and higher financing costs.

The Moscow-based company is fighting blow-back from the invasion of Ukraine, which prompted sweeping economic retaliation – including a ban by Australia on sending alumina to Russia.

Australia’s ban on alumina supplies “will affect, among other things, the alumina export that is almost 20 per cent of Rusal demand”, the company said in comments accompanying its earnings result. An alumina plant it runs in Ukraine was also forced to stop, and there’s uncertainty also over the Aughinish plant.

Investments postponed

The world’s No 3 aluminium producer also said investments may be postponed due to equipment shortages. Financial results would be hit by the need to replace foreign-currency credit facilities with rouble-denominated debt, given high domestic interest rates, it added.


Rusal’s highly cautious outlook was all the more striking because the comments were delivered along with bumper full-year earnings for 2021. But the invasion of Ukraine has upended prospects for Russian companies.

“If the situation persists or continues to develop significantly, including the loss of significant parts of foreign markets which cannot be reallocated to new markets,” Rusal said, “it may affect the business, financial condition, prospects and results of operations.”

Rusal said it couldn’t accurately assess the “quantitative effect” of all the restrictions and impacts, and it warned worse could come should additional sanctions or countermeasures from Russia emerge. – Bloomberg