Russia sets aside 10B roubles to buy aluminium
MOSCOW – The Russian government could buy up to 50,000 tonnes of aluminium for the state reserve, a government decree showed on Wednesday, in a move that would support sanctioned Russian aluminium producer Rusal.
The decree, dated Nov. 26, allocated up to 10 billion roubles ($149 million) for the plan and is the initiative of Russian tycoon Oleg Deripaska, a government source told Reuters.
Deripaska is a major shareholder in Rusal through its parent company En+ Group. He was hit by U.S. sanctions in April together with other companies in which he is a large shareholder.
The purchases are currently being considered as a one-off step, the government source told Reuters.
The volume covered by the decree is small but it could serve as a form of insurance for Rusal if it should face a cash shortage
The text of the decree did not specify the reason for the potential purchases and did not give a timeframe.
Rusal and its parent company En+ Group declined to comment. Russia's Industry and Trade Ministry did not immediately respond to a request for comment.
Industry and trade minister Denis Manturov said in August that the government had a back-up plan if sanctions on Rusal were not lifted, which included buying aluminium for the state reserve.
At 50,000 tonnes, the volume covered by the decree is small, accounting for around 17 percent of the company's monthly exports, Maxim Hudalov, an analyst at Russian ratings agency ACRA, said.
"In a situation where Western financial institutions refuse to extend credit, there's a guaranteed buyer," Hudalov added.
"…As a way to support the liquidity of the company, I think it will be useful. I don't think the state reserve will actually buy anything, but having the opportunity to realise a delivery will be valuable for the company," he said.
Moscow-traded shares in Russian aluminium giant Rusal , which was hit by U.S. sanctions in April, rose 2 percent on the news.
($1 = 66.9250 roubles)
(By Darya Korsunskaya, Anastasia Lyrchikova and by Polina Ivanova; Editing by Edmund Blair and Elaine Hardcastle)