Rusal's Swedish smelter may be closed if sanctions not lifted

STOCKHOLM/MOSCOW, Oct 19 (Reuters) – Russia's Rusal may be forced to close its Kubal aluminium smelter in Sweden if the U.S. sanctions are not lifted, a Kubal representative who declined to be named told Reuters on Friday.The Kubal aluminium smelter in Sweden, Rusal's only primary metal production facility outside of Russia, produced 123,000 tonnes of metal last year. It employs just under 500 people in Sundsvall, Sweden.

The U.S. Treasury Department in April imposed sanctions against Russian billionaire Oleg Deripaska and some of the companies in which he is a large shareholder, including aluminium exporter Rusal, citing "malign activities" by Russia.

However, the sanctions have been postponed several times since as the United States considers removing Rusal, the world's biggest aluminium producer outside China, from the U.S. blacklist if Deripaska drops his control over the company.

"If the U.S. sanctions are not lifted, there is a high probability, that Kubal will be closed," the source said, warning of the ramifications of a closure.

"We are the only aluminium smelter in Sweden and an important EU supplier of automotive parts, construction elements and packaging, the indirect consequences of the closure are difficult to assess," the source said.

The source said restarting Kubal after a closure would be a complicated process and was unlikely to happen.

Rusal is heavily dependent on foreign operations to supply raw materials to its aluminium smelters. Last year, Rusal's international units accounted for 53 percent of its output of bauxite and 64 percent of its production of semi-processed sister alumina.

(By Johan Ahlander and Polina Devitt, Editing by Ed Osmond)