UPDATE 1-ERG halts iron ore supply to Russia's MMK due to sanctions

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KHROMTAU, Kazakhstan, Aug 19 (Reuters) - Eurasian Resources Group (ERG) has halted iron ore supplies to Russia’s MMK from its giant Kazakh operation due to Western sanctions against the Russian company, ERG Chairman Alexander Mashkevich said on Friday.

MMK was once the main buyer of iron ore from ERG’s SSGPO unit located in Kazakhstan’s northern Kostanay province, close to the Russian border. The United States included MMK, one of the world’s largest steel producers, and its majority owner Viktor Rashnikov in its latest round of sanctions this month.

Mashkevich said SSGPO now exports iron ore only to China, which buys about 5 million tonnes a year. It could double the volume but was constrained by a border bottleneck, he told reporters.

Kazakhstan and China have different railway track gauges and rail cars have to be either re-equipped or unloaded at the border.

Mashkevich said ERG, which is based in Luxembourg but has Kazakh roots, continued to supply alumina to Russia’s RUSAL and planned to ship 800,000 tonnes the commodity this year.

Reporting by Mariya Gordeyeva; Writing by Olzhas Auyezov; Editing by Jason Neely and Edmund Blair