WRAPUP 1-Rusal removed from share, debt indexes, metal suspended

WRAPUP 1-Rusal removed from share, debt indexes, metal suspended

Russian cartoonist Sergei Elkin ridiculed the decline of the company's shares to Russian businessman Oleg Deripaska's "RUSAL".

Washington imposed sanctions on seven Russian oligarchs, 12 companies they own or control, as well as 17 senior Russian government officials because, it said, they were profiting from a Russian state engaged in "malign activities" around the world. The plant refines imported bauxite into alumina, a major ingredient in aluminium manufacturing, and employs 450. Shares in Rusal and EN+ had already fallen sharply on Friday in response to the sanctions, which were announced towards the end of trading in London.

Shares in Rusal, an aluminium company controlled by Deripaska, almost halved on the Hong Kong stock exchange on Monday, according to the BBC.

EN+, which only listed in London in November having raised $1 billion from City investors despite fears over the potential of further sanctions being imposed on Russian Federation, said it would focus on maintaining its operations and ensuring it "abides by all applicable laws and regulations".

As Bloomberg points out, the move also raises questions for Glencore and its billionaire chief Ivan Glasenberg, the commodity giant who is one of Rusal's top shareholders, owning an 8.75 percent stake and also the biggest buyer of its metal, having bought $2.4 billion of metal from it previous year.

"Glencore is committed to complying with all applicable sanctions in its business and is taking all necessary measures in order to mitigate any risks to Glencore's business as a result of the designation of Rusal and En+ as SDNs (specially designated nationals), including in respect of secondary sanctions", Glencore said in a statement.

The London Metal Exchange aluminium spot price went from $1,967 per tonne on Friday morning to close at $2,155/t yesterday.

At the same time, the list of companies includes several structures related to Oleg Deripaska - agroholding Kuban, Eurosibenergo, Rusal, Russian Machines and GAZ Group, investment company B-Finance, holdings Basic Element and En+.

The US sanctions could lead to other unexpected downstream effects.

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