Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Norwegian aluminum maker Norsk Hydro called on Tuesday on the United States and the European Union to stop importing Russian aluminum onto their territories, its chief executive told Reuters.
About half of Europe’s aluminum production has been shut down as a result of a surge in energy costs since Russia’s invasion of Ukraine, while Russian output has been unaffected.
Russia’s Rusal produces around 6% of the world’s aluminum. This metal has not been targeted by Western sanctions against Russia following its invasion of Ukraine.
But the US is considering restrictions on Russian aluminum imports and the London Metal Exchange (LME), the biggest metals trade hub, is asking members if it should ban Russian material from its system.
“We want to urge sanctions in both Europe and the US,” Hydro CEO Hilde Merete Aasheim told Reuters. “Our European industry shuts down, while … we see Russian production at the same level as before the invasion. So they are benefiting.”
Hydro produces most of its aluminum in Europe, Qatar, Brazil and Canada. It has no production in Russia and has stopped trading in Russian aluminum in the wake of the Feb. 24 invasion of Ukraine.
Producing the metal, used in the automotive, packaging, construction industries among others, is highly energy intensive.
Without sanctions against Russian imports, the future for European production would be at risk, Aasheim said, because Europe’s producers, facing soaring energy costs, would be unable to compete against Russian rivals.
“It is an energy-intensive business, and when the gas has been cut from Russia we see the effect on the power prices, so what is important over time is to get in more renewable power,” she said.
Aasheim’s comments echoed those of US peer Alcoa’s, which is urging the White House to block US imports of the metal from Russia.
With recession looming, however, some business groups say bans on Russian aluminum would decimate European industry.
(By Victoria Klesty; Editing by Gwladys Fouche and Terje Solsvik)
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