Aluminum giant Rusal share price halved after U.S. sanctions

Aluminum giant Rusal share price halved after U.S. sanctions

The US imposed sanctions on Friday on the world's second-biggest aluminium producer, plus other companies, officials and oligarchs in response to what it described as "malign activity around the globe".

The sanctions are created to stop Mr Deripaska and associated companies from doing business in U.S. dollars and cut him off from any dealings with United States citizens.

Rusal, a Russian-based aluminum maker, has been included in a list of companies sanctioned by the US.

The US Treasury sanctioned Russian individuals, officials, state-owned firms and companies, including Rusal, the world's second largest maker of aluminum, under provisions of a law Congress passed previous year to retaliate against Moscow for meddling in the 2016 USA presidential election, last Friday.

Washington has accused Deripaska of operating for the Russian government.

The firm, which produces nearly 6% of the world's aluminium, said the sanctions could cause technical defaults on bank loans and some credit obligations.

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The fall represented a loss of more than 3.5 billion euros ($4.3 billion) for the company, which is headed by billionaire Oleg Deripaska, and which accounts for some seven percent of the world's aluminium production.

The Kremlin slammed the sanctions. "The situation is pretty egregious from the point of view of legality, it tramples on all kinds of norms, and so a thorough analysis is necessary", he said. It was mentioned that the US sanctions are highly likely to will have a negative impact on the business of the company and its development.

"Rusal will probably have to be bailed out by Russian state banks", wrote analysts at TS Lombard. "Rusal sells around 250,000 tons to 300,000 tons to the U.S., but what if Japan or South Korea also say no?" Polymetal, a Russian miner listed in London, was the biggest FTSE 250 faller, down 18%.

The sanctions, the latest USA effort to punish Moscow for "malign activity around the globe", also affect 17 senior Russian government officials.

The US Treasury said the sanctions were linked to Russia's actions in Crimea, Syria and Ukraine and its interference in western democracies.