WASHINGTON/MOSCOW (Reuters) - The U.S. government on Monday gave American customers of Russia’s biggest aluminum producer more time to comply with sanctions, sending aluminum prices into a tailspin but lifting shares of the company, United Company Rusal Plc.
Aluminum prices on the London Metal Exchange tumbled more than 8 percent after the U.S. Treasury Department announcement, which gives Rusal longer to sell off the large quantities of aluminum it had been stockpiling in the wake of sanctions as customers and traders avoided its product.
Shares in Rusal, one of the world’s largest aluminum companies, rose 13 percent on the Moscow Exchange after the announcement. Earlier, Rusal had ended Hong Kong trading down 8.4 percent. Shares of its U.S. rival Alcoa Corp slid 13 percent in morning trading.
Rusal and its major shareholder, Russian tycoon Oleg Deripaska, were sanctioned by Washington in response to what it called “malign activities” by Russia. The Treasury Department said the United States could provide sanctions relief if Deripaska ceded control of the company.
“RUSAL has felt the impact of U.S. sanctions because of its entanglement with Oleg Deripaska, but the U.S. government is not targeting the hardworking people who depend on RUSAL and its subsidiaries,” U.S. Treasury Secretary Steven Mnuchin said.
Treasury said Americans now have until Oct. 23 instead of June 5 to wind down their business with Rusal and that the United States was not trying to harm those who depend on the company. It said it would not impose secondary sanctions on non-U.S. entities engaged with Rusal or its subsidiaries.
Deripaska is among seven Russian oligarchs sanctioned as part of