Cabinet yesterday discussed the impact of US sanctions on Russian aluminium giant Rusal and it has started to examine the way forward, such as a replacement for the firm or the shipper of its bauxite, Oldendorff Carriers.
“The sanctions have been extended now to November 12 and there is every hope that all will be well. In the interim, government will assess matters, such as a replacement for either Oldendorff or Rusal. I expect a further report later in the week,” Minister of Natural Resources Raphael Trotman told Stabroek News yesterday.
The US Treasury in April imposed sanctions against Russian billionaire Oleg Deripaska and eight companies in which he is a large shareholder, including Rusal, in response to what it termed “malign activities” by Russia.
Last month, the US Treasury announced that it had extended a deadline to November 12 for investors to divest holdings of debt, equity and other assets in Rusal and its parent company EN+.
Trotman told Stabroek News yesterday that a decision was taken to have engagements by the Ministry of Social Protection amped up. He said a decision was also taken to hold off on the proposed Terms of Reference for a Task Force set up to look into the impact on local workers, even as government hopes for the best.
“I am receiving constant reports from Mr [Lance] Carberry and the company and [yesterday] Cabinet agreed that we will continue to monitor and receive reports and the Ministry of Social Protection will increase its engagement,” Trotman said.
Rusal employs over 500 persons at its local operations and workers had previously expressed their worry about the impact of sanctions on the company and them. The company owns 90% of the Aroaima, Berbice-based Bauxite Company of Guyana Inc (BCGI). The company’s operations are located on the Berbice River between Kwakwani and Linden, with employees from those areas making up the majority of its workforce.
The Guyana government had also expressed concern at the implications of the sanctions for Rusal’s operations here. The David Granger-led APNU+AFC government subsequently established an inter-ministerial and union task force to holistically examine the way forward. It was feared that with investors forced to divest, the company would be forced to shut down its operations here. However, the work of the task force stalled after concerns were raised about the Terms of Reference (ToRs). Trotman said yesterday that Cabinet believes that the situation has to be monitored and the ToR’s proposals could possibly take effect after the matter of the sanctions is resolved. “Cabinet agreed that we monitor and not go with the proposed ToRs, which could come into play after we have overcome the sanctions concerns,” he said.
Rusal and EN+ have continued to try to avoid being further blacklisted by the U.S. government. “EN+ and Rusal have approached the U.S. government about substantial corporate governance changes that could potentially result in significant changes in control,” a statement from the US Treasury said last month. Treasury Secretary Steven Mnuchin said that his country was in talks with Rusal to remove it from the sanctions list and the extended date was “to allow sufficient time for review.”
