The United States isn't seeking to put Russian aluminum giant Rusal out of business by sanctioning the company, Treasury Secretary Steven Mnuchin has said, but majority owner Oleg Deripaska must reduce his stock holdings to less than 50 percent.
"The first aspect would be that he sells down below 50 percent," Mnuchin told Bloomberg TV in an interview on April 30. Mnuchin said his discussions with the company about avoiding U.S. sanctions had been "encouraging."
"Our objective was not to put Rusal out of business and that's why we extended the license," Mnuchin said.
The Treasury announced sanctions on April 6 against Rusal, targeting Deripaska under a law that ordered the Trump administration to punish Russia for its alleged meddling in the 2016 election. Deripaska was identified in a January Treasury report as a Russian tycoon with close ties to President Vladimir Putin.
Rusal has applied to be delisted from the U.S. sanctions and last week the Treasury Department for the first time described a path for the company to escape the penalties. Deripaska has agreed to cut his stake in En+, the holding company through which he controls Rusal.
Treasury also extended the deadline for companies to wind down dealings with Rusal by almost five months to October. The move sparked a plunge in aluminum prices as traders speculated that supply disruptions could ease.
Washington's clarification follows two weeks of chaos in global metals markets following the announcement of the sanctions.
Deripaska controls Rusal through a shareholder agreement with others including Glencore Plc and Viktor Vekselberg, who is also under sanctions.
Rusal has been battling for survival in the face of the threatened sanctions, but it is still not clear whether the billionaire will relinquish control of the company, which is Russia's largest aluminum maker and the world's second-largest.