Glencore to declare force majeure on some aluminium supply
Glencore is a Rusal shareholder and one of its biggest customers. Glencore Chief Executive Ivan Glasenberg resigned from his role as Rusal director on Tuesday.
Force majeure is a clause in contracts that allows both parties to walk out of the contract when an extraordinary event or circumstance beyond the control of the parties happen.
Global aluminium production is forecast at around 65 million tonnes for 2018. Glencore will control about 4-5 million tonnes, about half of which would be from Rusal.
It was not immediately clear what volume would come under force majeure or which buyers might be affected.
On Friday, the United States widened its sanctions against Russia to include allies of President Vladimir Putin as punishment for Moscow’s alleged meddling in the 2016 U.S. election and other “malign activity”.
The inclusion of Rusal marks the first time a major international company has been targeted by Washington in its moves to punish Russia for alleged meddling in the 2016 U.S. election.
International financial groups have been quickly distancing themselves from Rusal shares, bonds and metal. The company has been dropped from global equity and debt indexes while its metal will not be allowed on the London Metal Exchange (LME) and the CME Group.