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En+ reviews possibility of separating Rusal's international business

Highlights

En+ chairman Gregory Barker resigns

Polymetal loses number of board members

Polyus downgraded by Fitch Ratings, MSCI ESG Rating

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London-listed, Russia-based metals companies are continuing to feel the impact of international sanctions on key banks and companies, with low-carbon aluminum and independent hydropower En+ Group confirming March 7 that it was reviewing of its strategy with respect to its majority-owned subsidiary Rusal.

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"Options under consideration include the possibility of carving out Rusal's international business," it said in a filing to the London Stock Exchange, adding that the strategic review was "still at a preliminary stage and any future course of action will be subject to further consideration as well as discussions with the relevant regulatory bodies and key stakeholders."

A producer source told S&P Global Commodity Insights that the move might "ease some fears [across the aluminum chain]," while an Atlantic trader agreed that this would help to reduce risks to production posed by sanctions to Rusal's international assets.

"This will make it easier for banks and other companies to work with Rusal's overseas operations and limit risks to the global aluminum chain," the trader added.

Rusal is Russia's largest aluminum producer and the world's second-largest aluminum producer. In full-year 2021, Rusal produced 3.76 million mt of aluminum and 8.3 million mt of alumina.

It shipped 3.9 million mt of aluminum in 2021, with 41% of aluminum shipments going to Europe and 8% to the Americas. Sales in Russia and the CIS totaled a record 1.2 million mt in 2021, accounting for 27% of the total.

En+ also announced March 7 that its chairman, Gregory Barker, had resigned as a director of the company.

The resignation follows the March 3 LSE suspension of trade of global depositary receipts of major Russian energy and commodity companies, including En+, which is 45%-owned by Oleg Deripaska.

Barker has been on the En+ board since the company's initial public offering in November 2017 and has been executive chairman since February 2019.

En+ said Barker's departure would take effect after a short period during which he will assist with the transition of the chairman role to Senior Independent Director Christopher Bancroft Burnham.

Independent Director and Chair of the Health, Safety and Environment Committee Joan MacNaughton also resigned from the En+ board March 7 with immediate effect.

Gold miners also facing resignations, downgrades

Russian gold miner Polymetal also announced March 7 that a number of board members had stepped down effective immediately, namely Ian Cockerill, Ollie Oliveira, Tracey Kerr, Italia Boninelli, Victor Flores and Andrea Abt.

It gave no further details about the resignations.

Meanwhile, both Fitch Ratings and MSCI ESG Ratings have downgraded Russian gold miner Polyus.

Polyus, which is the world's fourth-largest gold miner, announced March 7 that Fitch had downgraded the company's long-term foreign-currency issuer default rating to 'B' from 'BB+' and placed it on Rating Watch Negative.

It also said that MSCI had downgraded Polyus' environmental, social and governance rating from 'A' to 'B' as part of a series of ESG Ratings downgrades for all Russian companies within its coverage, following the agency's downgrade of Russia's ESG Government Rating to 'B' on March 1.

MSCI is due to continue to assess all Russian companies' ratings on an ongoing basis.