Rusal’s Guinea bauxite exports grind to a halt amid Ukraine crisis

By Joe Bavier, Helen Reid and Clara Denina

JOHANNESBURG(Reuters) – Ore shipments from Russian aluminium giant Rusal’s bauxite mines in Guinea have ground to a halt as the war in Ukraine disrupts the company’s global operations, shipping data showed on Wednesday.

Unlike several other Russian companies, Rusal is not under sanctions, although its billionaire founder Oleg Deripaska is. But the export standstill illustrates how the war and backlash against Moscow’s actions have wreaked havoc on global supply chains that will likely drive up prices for many goods.

Roughly half of Rusal’s production of the aluminium ore bauxite came from its mines in Guinea last year. That output is even more critical now that Australia – the world’s top bauxite producer – has banned exports to Russia and Anglo-Australian miner Rio Tinto said it would sever ties with Russian businesses.

Rusal, which reported 2021 results on Wednesday, produced 3.8 million tonnes of aluminium last year – 5.6% of the world’s supply of the lightweight metal used in everything from satellites and planes to cans and toasters.

The company did not reply to a request for comment on the slowdown in shipments or its impact on its operations.

Rusal’s Dian-Dian mines in Guinea, which have historically supplied bauxite to its Aughinish refinery in Ireland, last shipped ore on March 12, according to an analysis of Refinitiv shipping data. Its Kindia operations, meanwhile, last exported on Feb. 26.

By comparison, in 2021 Dian-Dian exported three bauxite shipments between March 12 and 30, and Kindia shipped seven from Feb. 26 to March 30, according to data compiled by Perth-based bauxite specialists Mining Consulting.

STOCKPILES FILLING UP

A Rusal company official in Guinea, who declined to be named, told Reuters the company was stockpiling bauxite at the Kindia mine, and fewer trains were transporting bauxite to port because it was running out of stockpile capacity there.

Bauxite mined at Kindia would typically be sent to the Nikolaev alumina refinery in southern Ukraine. But the facility, responsible for around a fifth of Rusal’s output of the material used to make aluminium, has been shuttered due to the war and Guinean bauxite shipments already en route there were diverted to Aughinish.

“I would think Kindia will go into care and maintenance when the stockpiles are full,” said Mining Consulting’s Bob Adam. “Aughinish is a low temperature refinery, and Dian-Dian is more favourable feed stock.”

Earlier this month, Rusal told Reuters its Guinea operations had not stopped producing and it did not plan to lay off staff.

Guinea’s mines ministry did not respond to a request for comment.

Nearly two-thirds of Rusal’s 8.3 million tonne alumina output was produced outside Russia in 2021, meaning the company is highly dependent on its refineries overseas, which require a constant feed of bauxite to keep running.

Ireland’s government has said it is keen the Aughinish refinery – a key alumina supplier to Europe and an important employer in County Limerick – continues to operate.

Australia’s ban on alumina and bauxite exports to Russia has piled further pressure on Rusal, with consultancy Wood Mackenzie saying the ban would make it difficult for it to maintain normal aluminium production.

For a related graphic on Australia’s ban on alumina exports to Russia tightens the raw materials screw on Rusa, click https://tmsnrt.rs/3ucqnHb

(Reporting by Joe Bavier and Helen Reid in Johannesburg, Clara Denina in London, Additional reporting by Padraic Halpin in Dublin and Saliou Samb in Conakry, Graphic by Andy Home; Editing by Tomasz Janowski)