https://www.miningweekly.com
Aluminium|Business|Defence|Mining|Refinery|Products
Aluminium|Business|Defence|Mining|Refinery|Products
aluminium|business|defence|mining|refinery|products

Production costs soar at Rusal due to Russia-Ukraine conflict

12th August 2022

By: Reuters

  

Font size: - +

MOSCOW - Russian aluminium giant Rusal reported a 33% jump in first-half production costs on Friday, hit by a production halt at a refinery in Ukraine and Australia's ban on exports of alumina and bauxite to Russia.

The world's largest aluminium producer outside China has been suffering these problems since March, shortly after Moscow sent troops into Ukraine prompting waves of Western sanctions on the Russian economy. 

The company said aluminium production costs jumped to $2,028 per tonne in the six months to the end of June.

"The ban on alumina exports to Russia imposed by the Australian government, as well as the suspension of production at the Nikolaiev [Mykolaiv] Alumina Refinery due to the events in Ukraine, negatively affected the supply of raw materials for aluminium production and led to an increase in costs," Rusal said in a statement.

It did not say who replaced supplies of raw materials from Australia and Ukraine. It reported a 37.4% increase in first-half earnings before interest, tax, depreciation and amortisation (EBITDA) to $1.8 billion amid higher aluminium prices CMAL3.

"The company is forced to rebuild its supply chains," Rusal, which sells its products to Europe, Russia, Asia and North America, said.

Its sales of primary aluminium fell by 11.9% to 1.76-million tonnes, while production rose by 1.2% to 1.89 million tonnes.

Apart from Russia and Ukraine, Rusal operates in Guinea, Jamaica, Ireland, Italy and Sweden. Its largest shareholder, En+, said in March it was considering carving out Rusal's international business. 

"Rusal's prospects for the second half of the year are not very bright as of yet," analysts at BCS said in a note.

"Aluminium prices have fallen sharply recently and the rouble currency RU/RUB has strengthened, putting additional pressure on profitability," BCS added.

Still, Rusal shares 0486.HK rose 1.6% in Hong Kong.

The company made no mention of potential developments with its 26% stake in Russian mining giant Nornickel. Nornickel's larger shareholder, Vladimir Potanin, said in July he was ready to discuss a possible merger between Rusal and Nornickel to strengthen their defence against any possible sanctions. 

Edited by Reuters

Comments

Showroom

SMS group
SMS group

At SMS group, we have made it our mission to create a carbon-neutral and sustainable metals industry.

VISIT SHOWROOM 
The Southern African Institute of Mining and Metallurgy
The Southern African Institute of Mining and Metallurgy

The SAIMM started as a learned society in 1894 after the invention of the cyanide process that saved the South African gold mining industry of the...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Magazine round up | 24 May 2024
Magazine round up | 24 May 2024
24th May 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.18 0.223s - 92pq - 2rq
1:
1: United States
Subscribe Now
2: United States
2: