Russian aluminum company Rusal is investing $200 million into a new project in Kentucky, US. The move comes after the US Treasury Department lifted sanctions on several Russian firms back in January.

Rusal to Invest in US Project

Rusal is the largest producer of aluminum outside China. Its new venture will see it invest over $200 million into Kentucky for a 40% stake of a project led by US startup Braidy Industries. The capital will fund the development of a low-carbon aluminum rolling mill, currently in production in eastern Kentucky.

The 2.5 million sq ft plant in Kentucky will produce metal for the auto and aerospace sectors.

US Sanctions

The investment is possible because the US Treasury Department lifted sanctions on Rusal, En+ Group, and another firm with links to Russian oligarch Oleg Deripaska.

According to the government body, initially, the “Treasury sanctioned these companies because of their ownership and control by … Deripaska, not for the conduct of the companies themselves.”

Deripaska was the target of US sanctions last year as part of a US government retaliation against the Kremlin for its part in trying to manipulate the 2016 US presidential elections.

But since then, the companies in question underwent significant restructuring to move away from Deripaska’s control.

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Trump Tariffs

Though the sanctions against Rusal have been lifted, US tariffs on foreign aluminum and steel have not. These came into effect over one year ago, and despite this, Rusal is going ahead with the $200 million investment, saying that it plans “to pay the tariff on supply from Rusal.”

The metal tariffs were implemented to increase production and investment in US steel and aluminum companies. According to the Aluminum Association, the effect has been clear to see, with production rates increasing 43% for the first three months of 2019.

Some criticize the controversial tariffs as they have affected costs for American metal importers and damaged profits.

What do you think of the Rusal investment?

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