Bauxite shipper, Oldendorff, pulls out as US sanctions bite Rusal

Apr 20, 2018 News

Oldendorff’s operations in the Berbice River.

The US’s move to punish a Russian oligarch is also punishing ship owners, with Oldendorff joining those pulling back from charterer Rusal, as the global aluminium supply chain faces the biggest disruption in years.
According to a Tradewind News report yesterday, Oldendorff Carriers has a transshipment operation for bauxite, the raw material for aluminium, in Guyana with Rusal/Bauxite Company of Guyana Inc. (BCGI).
In a statement to TradeWind News, Oldendorff said that it “will fully comply with US sanctions and therefore will be winding up its business in Guyana in a timely manner.”
Oldendorff has yet to determine what it will do with the 20 purpose-built barges and six tugs for the operation, the report said.
At the start of April, the US Treasury Department put Oleg Deripaska on its growing sanctions list, accusing him of involvement in a host of alleged Russian government predations, including Ukraine and Syria, as well as crimes against business rivals.
Deripaska is the main principal of Rusal which has bauxite mining operations in Aroaima and further up the Berbice River.
Deripaska’s EN Group owns Rusal, the second largest aluminium producer in the world after Rio Tinto. Deripaska stepped down from EN Group in February, but the US still considers him in control on EN Group and Rusal.
The upshot is that US businesses are blocked from dealing with Rusal and non-US businesses can also face sanctions should they deal with Rusal.
The US Treasury’s sudden move on Rusal also disrupted cargoes in transit. One market source said finished aluminium cargoes are now sitting in ships off the US East Coast as buyers shy away.
The decision by Oldendorff to comply will have far-reaching implications for Rusal and its Guyana operations.
With several hundred workers in Region 10 and from Berbice, Rusal will now have to scramble to find another carrier or face some tough choices.
It would be news that Guyana can ill-afford.
The matter is currently engaging the Government, at the level of the Cabinet.
Last week, Finance Minister, Winston Jordan assured that the sanctions will not have much impact as Rusal has assured that Oldendorff will stick around. However, the news has now changed.

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