MOSCOW (Reuters) - Sanctions-hit Russian aluminum producer Rusal said on Tuesday it had started shipping bauxite from its Dian-Dian bauxite project in Guinea to its alumina refineries in other countries.
Rusal, the world’s largest aluminum producer outside China, has been hit by U.S. sanctions imposed on it and co-owner Oleg Deripaska in early April, a move that damaged the company’s exports and internal supply chain.
The company said it had completed the first stage of development of the Dian-Dian bauxite deposit in Guinea, the world’s largest, and started exporting the ore.
“The commissioning of the bauxite mine means not only the creation of new jobs and increased employment for the local population, but also new opportunities for the development of the economy of Guinea,” Yakov Itskov, the head of Rusal alumina division, said in a statement.
Guinea is vital for Rusal as the West African country accounts for 27 percent of the company’s production of bauxite, the ore that is refined into alumina and ultimately smelted into aluminum.
Rusal has started exports from Dian-Dian despite the U.S. sanctions because its agreement with Guinea required it to do so and also because all investments into the project were made before the sanctions were imposed, a source, familiar with the situation, said.
The mine at Dian Dian has an annual capacity of 3 million tonnes of bauxite. Rusal produced 3.1 million tonnes of bauxite in Guinea in 2017. The cost of the Dian Dian project was estimated at around $220 million when Rusal launched it in 2014.
The aluminum producer also owns the Friguia alumina refinery in Guinea which has been shut since 2012 and Rusal has been planning to reopen it.
Reporting by Polina Devitt; editing by Louise Heavensm, Adrian Croft and Jane Merriman