International financial groups distance selves from Rusal

…over 500 Guyanese workers in limbo

Although the Russian Government has announced plans to provide Rusal with short-term liquidity and other assistance owing to the US sanctions it is now faced with, several international financial groups have distanced themselves from the shares, bonds and metal of the aluminium giant.
Reuters has reported that shares of the company will be deleted from global equity and debt indexes while its metal will not be allowed on the London Metal Exchange (LME) and the CME Group. The company will also be deleted from FTSE Russell’s equity indexes effective from the open on April 13.
Rusal will also be excluded on April 30 from JPMorgan’s CEMBI index group of

emerging market corporate bonds. Also, Bloomberg users in Europe have stopped displaying share prices of Rusal, EN+ Group and Swiss pumpmaker Sulzer, all of which are subject to the sanctions, Reuters also reported.
Rusal’s shares on the Hong Kong index have slumped by half since the sanctions were imposed on Friday and they gave up another 1.9 per cent on Wednesday.
Russia’s Prime Minister Dmitry Medvedev claimed that the new sanctions were an attempt to capture global markets for US companies.
On the local front, however, Government said it was monitoring developments relating to the sanctions. Rusal is one of the largest aluminium producers in the world and has operations in Guyana in the form of the Bauxite Company of Guyana Incorporated (BCGI), employing over 500 persons, whose jobs could be in limbo as a result of the crash the company is facing on the international market.
Foreign Affairs Minister Carl Greenidge said on Wednesday that it would not be easy to give an immediate analysis of the situation, but the developments were being monitored. He said the Administration was concerned as to any adverse consequences the situation may have on employment of locals.
“But at this point in time, I don’t think that either we or the company would be in a position to say ‘this is what will happen tomorrow’ as a consequence. It (the situation) will evolve,” the Minister stated.
Shocked
Guyana Times spoke with a few of Rusal’s employees, who chose to remain anonymous, to see how they were affected by the issue of the sanctions.
An employee said ships could not enter at the moment, but operations were normal apart from the loading of the barges.
The employee said workers were shocked to learn of the issue as they thought the company would be shut down. However, it was explained that employees were told by management at a meeting on Wednesday that the company should not be affected by the sanctions, but was awaiting word from the parent company which should be forthcoming by April 15.
“They say is just some things got to put in place and back, we back in operation (loading of barges). Everybody just working as per normal. Ships can’t come in, so it ain’t make no sense loading the barges here…if they load the stuff and leave it there with stuff inside, the company that Rusal hire would have to pay more money. When the barge is empty, they pay less money. So they just cease the operations from loading barges. By the 15th, we’re supposed to get a word to start back the operation,” employees said.
They added that in the meantime, mining was still ongoing in Aroaima. “We still hoping that by the 15th we could start back in operation. If not, I think the whole country would suffer, because we have about 700 workers here and in the Berbice River, we don’t have anything else to do. Five hundred workers can’t do farming. It would be great pressure on us so we’re hoping, but in the meantime we could try to prepare.”
The employee said this should serve as an eye opener for the company to ensure necessary plans were in place. Another employee attached to the company explained that while workers were currently working as per normal with the 12-hour shift, the company that usually shipped bauxite from Rusal to New Amsterdam took back the barges so that aspect of work was presently at a standstill.
Workers further explained that suppliers were refusing to do business with the company at the moment owing to the sanctions. “Right now things ain’t looking too nice,” one employee said. The employee also complained about the working conditions at the company, noting that local employees were still being ill-treated, especially those attached to the Union. “If they can pay us off and go back to wherever they come from, it would be good for me,” the worker said.
The US Treasury on April 6 announced sanctions against seven Russian oligarchs and 12 companies they own or control, saying they were profiting from a Russian State engaged in “malign activities” around the world. These included Oleg Deripaska, Rusal, and his newly-created holding company EN+ Group.