SANTIAGO/LONDON – The London Metal Exchange will suspend Rusal's aluminium from its list of approved brands from April 17 after some members raised concerns about settling LME contracts with sanctioned companies, the exchange's chief executive told Reuters.

Last week the US Treasury Department imposed sanctions on seven Russian oligarchs and 12 firms they own or control, saying they were profiting from a Russian state engaged in "malign activities" around the world.

This includes Hong Kong-listed Rusal, which analysts at CRU say accounts for 14% of aluminium supplies outside of top producer China. Global output this year is estimated at around 65-million tonnes.

"The temporary conditional suspension shall continue until further notice, allowing the LME to engage with stakeholders to determine the appropriate longer-term approach, the LME said in a notice that followed Reuters conversation with Chamberlain.

Chamberlain said on the sidelines of a copper conference in Santiago that Rusal's aluminium, which came into LME approved warehouses before the sanctions were imposed last Friday, would not be affected.

"The LME recognises that certain members and clients are concerned that if they were...to take delivery of LME Warrants relating to metal of Rusal Brands, this could place them at risk of violating the sanctions," the notice said.

"If a given brand creates issues...for a sufficiently large number of market participants, then the LME will consider appropriate actions, which may include suspension or delisting of the brand."

Data from the exchange showed aluminium stocks in LME warehouses originating from producers in Eastern Europe stood at 450 650 t as of April 6. Sources say this category would mostly be metal produced by Rusal.

That is about 36% of total aluminium stocks at 1.26-million tonnes as of that day.

Banks involved in metal trade financing are likely to be extremely cautious after French bank BNP Paribas in 2015 paid $8.9-billion to settle claims it violated sanctions against Sudan, Cuba and Iran.