Russian court rules that Rio Tinto plc Sponsored ADR (RIO.US) must pay RUSAL (00468) approximately US$1.3 billion in damages; Mongolian OT copper mine interests may face enforcement

According to Kommersant, the Arbitration Court of the Kaliningrad Region in Russia, after closed-door proceedings, ruled on the dispute between RUSAL (00468.HK) and Rio Tinto plc Sponsored ADR (Rio Tinto, RIO.US), finding in favor of RUSAL, ordering Rio Tinto plc Sponsored ADR to pay US$1.278 billion in damages, and permitting enforcement measures against the 66% interest in Oyu Tolgoi LLC. The ruling has been upheld on appeal. RUSAL stated that if the Russian court judgment is ultimately recognized and enforced in Mongolia, part of Rio Tinto plc Sponsored ADR's interest in the OT copper mine could be auctioned, with the proceeds used to pay the damages. Currently, the ruling does not mean that the relevant equity has actually been transferred. At the procedural level, RTA Holdco Australia 5, under Rio Tinto plc Sponsored ADR, is filing an appeal with a Russian supervisory court. In addition, the court accepted on September 15 the application by JSC Selena-M for succession in the proceedings, indicating that RUSAL may have transferred the relevant claim rights or judgment debt to that company. This litigation stems from a dispute over the Queensland Alumina Limited (QAL) alumina refinery in Australia. The refinery has an annual output of approximately 3.7 million tonnes, with Rio Tinto plc Sponsored ADR and RUSAL holding 80% and 20% stakes respectively, operating under a tolling model in which shareholders supply ore and take alumina in proportion to their interests. After Australia imposed sanctions on Russia in 2022, QAL stopped processing alumina for RUSAL, and Rio Tinto plc Sponsored ADR intervened and took over 100% of capacity, triggering litigation between the two parties. Rio Tinto plc Sponsored ADR stated that RUSAL filed a lawsuit over the same dispute in Australia in 2024, and the local court found that Rio Tinto plc Sponsored ADR and QAL acted in accordance with international sanctions regimes. The Russian court's ruling is clearly at odds with the earlier Australian judicial outcome.