A Russian oligarch excluded from Australian penalties after the invasion of Ukraine is highly likely to be named on the sanctions regime within days amid growing concern about his stake in a Queensland refinery that supplies millions of tonnes of alumina to its Russian investors.
Federal officials are scrambling to move on billionaire Oleg Deripaska and others who control Russian aluminium giant Rusal because of his known association with Russian President Vladimir Putin.
Oleg Deripaska faces sanctions in Australia.Credit:Bloomberg
With protesters in London taking over Mr Deripaska’s luxury home in Belgrave Square, the Morrison government is facing growing calls from corporate transparency experts to tighten its sanctions by naming him and another oligarch, Viktor Vekselberg. Mr Deripaska was added to the UK sanctions list on March 10.
The delay has fuelled uncertainty over the destination of regular production from the refinery, located in Gladstone and owned by Queensland Alumina Limited, under a joint venture that gives Rusal the right to 20 per cent of its alumina for processing into aluminium at smelters.
Aluminium is a key material in the production of missiles because of its combination of strength and light weight.
Rio Tinto, which controls Queensland Alumina in an 80:20 joint venture with Rusal, has promised to terminate all relationships with Russian entities but cannot force its partner to sell its stake and will not have a formal trigger to act unless Mr Deripaska and his companies are placed on the Australian sanctions list.
The Sydney Morning Herald and The Age asked the federal government about 1pm on Monday why it had not imposed sanctions on Mr Deripaska and Mr Vekselberg, with sources late on Wednesday saying the legal process was expected to result in both men being added to the sanctions list.
A spokesman for Foreign Minister Marise Payne said the matter was being considered pending advice from the department.
“Minister Payne is waiting on advice on further sanctions measures from her department and will consider that advice as soon as possible, once it is received. We are consulting and co-operating closely with partners on sanctions, and would note that the UK only sanctioned Viktor Vekselberg yesterday and Oleg Deripaska in recent days,” the spokesman said.
The Australasian Centre for Corporate Responsibility said Mr Deripaska owned 44.5 per of a company called En+ Group, which in turn owns 56.9 per cent of Rusal, based on recent checks of ownership registers. It estimates Mr Vekselberg owns 32 per cent of Rusal.
“We want clarity from Rio Tinto that when they say they’re terminating commercial agreements with Russian companies that this includes Queensland Alumina,” said the centre’s spokesman, Dan Gocher.
“We’re concerned that Queensland alumina exports are still going to Russia.”
When asked about production from the Queensland refinery, industry figures said they could not be sure whether alumina was no longer going to Rusal under the 80:20 agreement to divide the output.
A Rio Tinto spokesman confirmed the company’s statement on March 10 that it would terminate “all commercial relationships” with any Russian business. A local director who has represented Rusal over several years, John Hannagan, did not respond to a request for comment.
The Gladstone refinery produced 3 million tonnes last year, giving Rusal the rights to 600,000 tonnes of alumina.
“There are genuine Russian investments in Australian resources and if we are going to have any leverage with sanctions, that is where we will have it,” said Steven Hamilton, assistant professor of economics at George Washington University.
In London, protesters flew the Ukrainian flag over the Belgrave Square mansion owned by members of Mr Deripaska’s family on Monday in another escalation of attempts around the world to punish Russian oligarchs by freezing their assets and, in some cases, seizing their superyachts.
Mr Deripaska had a fortune of about $5.5 billion last year but his net worth slumped to about $2.6 billion in Forbes magazine’s calculations in the wake of the invasion, the fall in the Russian currency and the closure of the Moscow stock exchange.
United States diplomatic cables leaked in 2010 included descriptions of the billionaire as one of the few oligarchs Mr Putin turned to on a regular basis and said he was a “more-or-less permanent fixture” on the Russian President’s trips abroad.
Mr Gocher and his colleagues at the Australasian Centre for Corporate Responsibility called for sanctions on Mr Deripaska and Mr Vekselberg on February 28, four days after the invasion, but the federal government has focused on dozens of others.
The latest Australian sanctions list, issued in a legal instrument on March 13, named Russians such as Alexei Miller, the chief of gas giant Gazprom, and Dmitri Lebedev, the chairman of Bank Rossiya, as well as family members of Yevgeniy Prigozhin, a key figure in the Wagner Group, known for its paramilitary work for Mr Putin in Ukraine and Syria. Mr Prigozhin was named in earlier sanctions.
”The sanctions announced today reinforce Australia’s commitment to sanction those people who have amassed vast personal wealth and are of economic and strategic significance to Russia, including as a result of their connections to Russian President Vladimir Putin,” Senator Payne said on Monday.
“We strongly support recent announcements by Canada, the European Union, New Zealand, the United Kingdom, and the United States of further restrictive measures against key Russian individuals.“
Mr Deripaska was added to the UK sanctions list on March 10 but has not been named on the EU sanctions, reportedly over concerns about freezing his assets in Austria and Cyprus. The US imposed sanctions on Rusal in 2018 but lifted them less than one year later in part because of concern about the impact on global aluminium prices.
Labor foreign affairs spokeswoman Penny Wong declined to comment.
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