United State’s sanction-hit Russian aluminium producer Rusal has started shipping Bauxite from its Dian-Dian bauxite project in Guinea to its alumina refineries in other countries. This announcement was made known by the company, months after the US placed a sanction on the company and co-owner Oleg Deripaska as part of its ongoing trade war between International economies which includes China and Iran. This move affected the company’s export and supply chain. It also affected the price of Aluminium which surged by 15 percent.
According to Reuters, the sanctions were the toughest the United States has imposed on a listed Russian company since Moscow’s 2014 annexation of Crimea. The notice gave buyers a deadline of 30 days to receive supplies from Rusal before dealings in dollars were prohibited. Any individual or company that failed to comply would face being shut out of the financial system, while the Treasury could seize any dollars paid to Rusal. In response, Rusal stopped supplying customers as well as producing aluminium because they feared that any payment received would be seized by U.S. authorities.
Yakov Itskov, the head of Rusal alumina division, said in a statement that the commissioning of the bauxite mine would not only create jobs and increase employment for the local population, but it would also provide new opportunities for the development of the economy of Guinea.
It is also worthy of note that the U.S. sanctions does not affect the agreement with Guinea because the investment for the project was mas made before the sanction was imposed.
The Dian Dian mine which is the world’s largest Bauxite deposit has an annual capacity of 3 million tonnes of bauxite. The project cost Rusal about $220 million in 2014 and in 2017, the aluminium producer produced 3.1 million tonnes of bauxite in Guinea. It is worthy to note that the Friguia alumina refinery in Guinea which has been shut since 2012 is owned by Rusal although there are plans to resume operations there. In order to achieve this first stage of exporting, Rusal built roads, railway and other infrastructure needed to make the mine functional.
Guinea has the largest bauxite reserve in the world at more than 40 billion tons of bauxite reserve. The bauxite mining and export from Guinea is improving as its export stood at about 28 MTPA last year and the country plans that it would reach 66 MTPA by end of 2018.