Rio Tinto and Rusal: QAL Gladstone with ties to Russia “confident” of no disruptions despite conflict in Eastern Europe

A Queensland refinery partly owned by a Russian resources giant says it remains confident of “no disruptions” despite broad sanctions and the invasion of Ukraine. See how the overseas conflict could impact Central Queensland jobs.

A major Queensland resources employer with ties to Russia remains confident there will not be disruptions to operations despite sanctions and escalating conflict in Eastern Europe.

Gladstone-based Queensland Alumina Limited (QAL), which is part owned by Russian aluminium giant Rusal, could be directly affected by the sanctions.

Rusal has a 20 per cent stake in QAL, while mining giant Rio Tinto owns the remaining 80 per cent.

A QAL spokesman said the company will continue to monitor the conflict and any new sanctions imposed by the international community but that it remains “confident”.

“We are confident that we have appropriate structures in place to ensure QAL’s operations will not be disrupted,” the spokesman said.

A spokesman for Queensland Alumina Limited (QAL) says the company remains confident that processes are in place to avoid any disruptions. Picture: NewsCorp

Earlier this week, Rio Tinto Global CEO, Jakob Stausholm warned of disruptions to the aluminium industry but said the company remained in a good position.

“(T)he advantage for Rio Tinto of having such a big aluminium industry is that we have an integrated supply chain from bauxite to alumina to final aluminium products, and that puts us in a very good position to meet our customer needs during times of disruptions,” he said.

Mr Stausholm said the company did not know what all the impacts are but the conflict was creating a “very difficult situation”.

Rio Tinto chief executive Jakob Stausholm said the very difficult situation could lead to disruptions in the aluminium industry. Picture: Colin Murty (The Australian)

QAL is one of the largest alumina refineries in Australia and contributes about $200 million directly to the local economy in wages, salaries, maintenance and capital work.

It produces some 3.80 million tonnes of the world’s best smelter grade alumina per year, that is used locally by Boyne Smelters Limited and shipped across the globe to locations including Russia, Bahrain, New Zealand, China, Qatar and United Arab Emirates.

Queensland Alumina Limited (QAL) in Gladstone is partly owned by Russian aluminium giant Rusal. Picture: Dan Peled.

Prime Minister Scott Morrison has joined with western allies in placing targeted sanctions on a number of industries, including on energy, oil, gas, and mineral reserves as part of Australia’s response.

Sanctions placed on Russian companies could affect global supply chains and drive up the prices of commodities.

However, outgoing Nationals Flynn MP, Ken O’Dowd does not expect the sanctions to impact Central Queensland businesses.

“The Prime Minister has announced sanctions against Russian banks and members of the federation’s security council, not against businesses in Gladstone,” Mr O’Dowd said.

Outgoing Flynn MP, Ken O'Dowd doesn’t expect the conflict to impact Queensland’s resource sector despite QAL’s links to Russia. Picture: Steve Vit

The Observer approached QAL for comment, however, the company declined to make a statement.

“At this time, QAL won’t be commenting,” a QAL spokeswoman said.

In 2018, Rusal’s part ownership sparked fears of potential impacts on operations at QAL, as the United States imposed sanctions on billionaire oligarch and ally of Russian President Vladimir Putin, Oleg Deripaska.

The billionaire founder of Rusal, Deripaska agreed to relinquish his shareholdings to below a controlling level which resulted in the US lifting sanctions but questions remain over his continued influence in the company.

Billionaire Russian founder of Rusal, Oleg Vladimirovich Deripaska relinquished his controlling share of the company in 2018 but questions remain over his influence. Picture: Chris Harris

When QAL first faced uncertainty regarding it’s Russian ties in 2018, Rio Tinto Aluminium then chief executive Alf Barrios told The Australian it was reviewing its contract relationships with companies affected by US sanctions, including Rusal.

“We are going through a thorough review and we will have to complete that work to understand the next steps we will take … it is too early to comment on potential implications,” Mr Barrios said at the time.

LNP Senator Matt Canavan said similar issues arose following Russia’s annexation of Crimea, however, he was confident that conflict would, again, not impact Australian employers.

“The issues were resolved at the time and there was no impact ... I am confident that these sanctions will not affect Australian jobs,” Senator Canavan said.

LNP Senator Matt Canavan said when similar issues arose when Russia annexed Crimea there was no impact on Australian jobs . Picture: Gary Ramage

On Tuesday, Rusal’s share price plummeted as much as 22 per cent in Hong Kong, it’s greatest fall since 2018, as international investors monitored the escalating conflict.