Glencore starts cutting ties with Russian oligarch Deripaska

Date: Apr 11, 2018

Glencore, the world’s largest commodities trader, has begun cutting its ties with the Russian aluminium tycoon Oleg Deripaska after new US sanctions against his business empire.

Glencore said it had cancelled the planned swap of its 8.75% stake in the Russian aluminium maker Rusal, which is controlled by Deripaska, for shares in the London-listed En+ Group, another of the oligarch’s companies.

Glencore’s chief executive, Ivan Glasenberg, has also resigned from the Rusal board. The Swiss-based commodities trader said it was evaluating other contracts with Rusal. It bought $2.4bn (£1.7bn) of aluminium from Rusal in 2017 under a multi-year deal that is due to be renegotiated this 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,” it said.

“Glencore is still evaluating the position under its contracts with Rusal, but notes that these contracts are not financially material to Glencore.”

The rouble has lost about 4% against the dollar, its second day of heavy losses, falling to its lowest level since December 2016.

The plunge came even though the Russian central bank chief, Elvira Nabiullina, said the country’s economy could withstand the latest US sanctions.

“The central bank has a broad spectrum of instruments in order to act in such situations, if risks arise to financial stability. In our view, there are not such risks now,” Nabiullina told a conference in Moscow.

“There is no need to take some kind of systemic measures. Of course we will follow the situation and possibly introduce some revisions if necessary.”

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