Rio Tinto has taken full control of an alumina refinery in which oligarchs Oleg Deripaska and Viktor Vekselberg hold stakes after the Australian government slapped sanctions on the pair and banned the export of bauxite products to Russia.
The oligarchs have an interest in Queensland Alumina Limited through shareholdings in En+ Group, a London-listed resources company which owns the second-largest aluminium producer in the world, Rusal.
Rusal owns 20% of QAL and Rio Tinto owns the remainder.
In a statement, Rio Tinto said: “As a result of the Australian government’s sanction measures, Rio Tinto has taken on 100% of the capacity and governance of Queensland Alumina Limited (QAL) until further notice.”
“Our focus remains on ensuring the continued safe operation of QAL, as a significant employer and contributor to the local Gladstone and Queensland economies,” the company said.
In a statement released last month, En+ said Deripaska “cannot receive any type of financial benefit from his minority holding in En+, Rusal or any part of the group and is completely blocked from receiving dividends” as the result of a 2019 deal with US authorities under which the companies were released from sanctions and the oligarch reduced his shareholding to 45%.
“According to public sources, Mr Vekselberg is indirectly a minority beneficiary,” Rusal’s spokesperson said. “He does not have any influence on Rusal’s operations.”
Activists who have poured pressure on Australian companies to sever ties with Russian oligarchs after the invasion of Ukraine welcomed the move.
However, Dan Gocher, from the Australasian Centre for Corporate Responsibility, said that “until Rio Tinto provides further details we remain concerned that Deripaska and Vekselberg may still financially benefit from Queensland Alumina”.
“At Rio Tinto’s annual general meeting in London later today, the board is likely to face questioning from shareholders about its relationship with Rusal,” he said.
He said Origin Energy, which is in a gas exploration joint venture in the Beetaloo basin with Falcon Oil & Gas, a company in which Vekselberg holds a stake, should follow Rio’s lead.
“Origin is clearly attempting to weather the storm,” he said.
“We have to ask what is the point of sanctions, if Vekselberg can still profit from any successful exploration in the Beetaloo Basin.
“Origin Energy should suspend its joint venture with Falcon Oil & Gas until Viktor Vekselberg’s interest in Falcon is quarantined.”
Origin has previously said it will “follow any rules dictated by the Australian government, and other governments as appropriate, with respect to sanctions”.
“Origin is the majority owner and operator of the Beetaloo Joint Venture with significant operational control over any activities undertaken in the Beetaloo Basin. Origin is carrying 100% of the costs for current exploration activities, with no funding being provided by its joint venture partner.”
