Aluminum prices soar as Australia hits Russia with alumina export ban

03/24/2022 / By Kevin Hughes

Australia recently hit Russia with alumina export ban. The move by the world’s top alumina exporter immediately sent aluminum spot prices soaring.

Following the ban’s announcement on March 21, Australia’s top alumina refineries stopped shipping alumina to Russia’s United Co. Rusal International PJSC, the world’s second-largest aluminum company by production output.

Rusal has a 20 percent share in Anglo-Australian mining giant Rio Tinto Group’s Queensland Alumina Ltd. (QAL) refinery. Rio Tinto owns 80 percent share in Queensland Alumina in its joint venture with the Russian company. Rio Tinto is right now figuring out alternatives concerning its alliance with Rusal.

Australia makes up 20 percent of Russia’s alumina supply, also called aluminum oxide, which is acquired from bauxite ore and delivered to refiners and changed into alumina. Bulk carriers then send the alumina to manufacturing plants in Russia where it is then turned into aluminum.

“There was a ship that was due to dock in Australia this week to collect a load of alumina bound for Russia. That boat is not going to Russia with our alumina,” Australian Prime Minister Scott Morrison said.

Australia’s export ban affects Russia’s aluminum production

Although aluminum was not on the sanction list enforced by Western nations after the Russian invasion of Ukraine, big corporations are divesting in Russia. Australia is choking supplies that could seriously affect the Russian production of aluminum, which is used in beer cans and kegs, kitchen utensils, window and door frames, consumer electronics, household appliances, aircraft and spacecraft components, among others.

Aluminum prices soared to as much as 5.1 percent to $3,554 a ton. Bloomberg noted that this reinforces the case for LME prices to find a foothold above $4,000/ton.

Australia declared that the immediate ban on exports of alumina, aluminum ores and bauxite is part of its continuing sanctions against Russia for its invasion of Ukraine.

“Russia relies on Australia for nearly 20 percent of its alumina needs. The government will work closely with exporters and peak bodies that will be affected by the ban to find new and expand existing markets,” the Australian government stated in a joint statement from several ministries, along with the prime minister’s office.

The statement noted that the move will limit Russia’s capacity to produce aluminum, which is an important export for Russia.

Australia in the previous week enforced sanctions on two Russian businessmen with connections to its mining industry, among them billionaire Oleg Deripaska, who keeps shares in QAL.

The statement also mentioned that Australia has so far slapped 476 sanctions on 443 individuals, including businessmen close to Russian President Vladimir Putin, 33 entities, most of Russia’s banking sector and all individuals accountable for the country’s sovereign debt. (Related: Russia likely to default on sovereign debt payments.)

The Australian government added that it will provide at least 70,000 tons of thermal coal to Ukraine to satisfy its energy needs.

Australian coal producers have been pestered with calls for supply over the previous weeks from Ukraine and other countries like Poland that have been dependent on Russian stocks.

The Australian government in a statement said that it is working with the Australian coal industry to look for supplies. The statement added that Whitehaven Coal has quickly organized a shipment and the Australian government is now working with the company and the Ukrainian and Polish governments to ship the supplies at the soonest possible chance.

Australia to provide military equipment, humanitarian aid for Ukraine

Australia also promised extra military equipment and humanitarian assistance for Ukraine.

The Australian government added that it would be providing Ukrainians temporary humanitarian visas, which would enable refugees to access Medicare, study and work. It stated that close to 4,500 visas have been distributed so far, and that more than 600 Ukrainians with those visas have already arrived in the country.

Australia will give $21 million for defense aid to the Ukrainian Armed Forces and $30 million in humanitarian assistance.

“Australia stands with the people of Ukraine, and again calls on Russia to cease its unprovoked, unjust and illegal invasion of Ukraine,” the Australian government statement said.

Other countries have also promised support for Ukraine, including opening up temporary paths for Ukrainians to stay in their nations amid the invasion.

Canada announced this month that it would be permitting Ukrainians to enter through a Canada-Ukraine authorization for emergency travel, which would enable them to stay in the country for at least two years.

The Joe Biden administration earlier this month said it would be giving an 18-month temporary protected status to Ukrainians already in the United States.

Watch the video below to know why anti-Russian sanctions could be catastrophic for Westerns economies.

This video is from the Russia Truth channel on Brighteon.com.