The prospect of sanctions is hurting the Russian part-owner of one of Australia’s largest alumina refineries, Queensland Alumina Limited, while the refinery’s majority owner, Rio Tinto, has warned of a looming “disruption” to its aluminium business.
QAL, which operates a refinery in Gladstone, is 20% owned by the Russian aluminium giant Rusal, which has previously been hit by US sanctions in 2018, implemented in response to the country’s “malign activity around the globe”.
Rusal’s share price has taken a battering as tensions in Ukraine escalate, falling up to 22% in Hong Kong, the biggest fall since April 2018, according to Bloomberg.
QAL would not comment when approached by Guardian Australia about whether it feared further sanctions, or what impact they might have on the company.
But Rio, which holds an 80% stake in QAL, told investors on Wednesday night that it was worried about the escalating tensions, which were creating a “very difficult situation”.
“Specifically in our business, I think what there could be disruption to primarily the aluminium industry,” said its chief executive, Jakob Stausholm.
“If we are going to see sanctions and, you know, we saw sanctions in 2018, I’d like to say, on that front, we managed well last time there were sanctions. And the advantage for Rio Tinto of having such a big aluminium industry is that we have an integrated supply chain from bauxite to alumina to final aluminium products, and that puts us in a very good position to meet our customer needs during times of disruptions.”
The previous sanctions against Rusal were removed in January 2019 after the company’s founder, the billionaire Oleg Deripaska, gave up control of the company.
So far, Australia’s sanctions have focused on Russia’s banks and eight members of its national security council. The sanctions involve travel bans and financial restrictions.
Scott Morrison has also warned that the sanctions announced on Wednesday were only the first tranche and that more would follow if Russia did not de-escalate. Further measures are expected from the US and the EU.
“We’ve got plenty left in the tank when it comes to further actions we would take if and when the violence is escalated by Russia,” the prime minister said.
The Russian embassy in Australia has described Australia’s sanctions as “xenophobic”, a description dismissed by the energy minister, Angus Taylor, as the remarks of a bully.
Morrison said on Thursday he did not expect the sanctions would deter Russia’s actions in Ukraine.
“Now, I note that many have said, ‘Do you think that this will lead to Russia pulling back?’ I would hope so, but I don’t expect so,” he said.
“The reason we’re doing this is there must be a price for the unprovoked, unlawful, unwarranted, unjustified attacks and threats and intimidation that has been imposed by Russia on Ukraine.”
Ukraine’s Australian representative, Volodymyr Shalkivskyi, praised the sanctions and said fresh penalties should be directed towards energy and finance, which he said were the most vulnerable sectors in Russia.
“We believe there’s need for significant expansion of sanctions but this will depend on the situation on the ground,” Shalkivskyi said.
