LONDON – Rio Tinto said it will declare force majeure on certain customer contracts after the US imposed sanctions on its partner Russian aluminium producer Rusal.
The mining group said on Friday it was working with its customers to minimise disruptions to supply and would fully comply with US sanctions.
Rio also said it was reviewing Rusal's 20% stake in the Queensland Alumina refinery, Rusal's supply and offtake arrangements, bauxite sales to Rusal's refinery in Ireland and offtake contracts for alumina.
The United States imposed sanctions last week against Russian entities and individuals, including Rusal, to punish Moscow for its alleged meddling in the 2016 US election and other "malign activity".
Rio owns the other 80% of the Queensland refinery, which produces 3.95 million tonnes of alumina per year. Rio produced 3.6-million tonnes of aluminium in 2017.
Force majeure is a clause in a contract that allows both parties not to fulfil the contract terms when they are affected by an extraordinary event or circumstance beyond their control.
The sanctions on Rusal, which produces 7% of global supply, pushed aluminium prices in London to their biggest weekly gain on record.