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Lawmakers seek investigation into Russian investment in proposed aluminum mill

May 21, 2019

A group of Democratic lawmakers have written to the U.S. Treasury Department asking for an investigation into a Russian company’s investment in a proposed aluminum mill in eastern Kentucky being built by Braidy Industries.

According to reports by the New York Times, the Louisville Courier Journal and West Virginia Public Broadcasting, eight Democratic lawmakers, including Ohio’s Sen. Sherrod Brown, say the foreign investment has raised concerns about Russian influence on the economy and national security of the United States.

The lawmakers recently wrote the Treasury Department asking it to look into the $200 million investment came from Rusal, a Russian aluminum company that, until January, was under federal sanctions for what the Treasury Department called the “worldwide malign activities” of the company’s primary owner, Oleg Deripaska. Also sanctioned was En+, Rusal’s holding company.

According to previously published reports, sanctions were removed when Deripaska stepped down, but lawmakers worry the Russian government may still be involved, and may be using the Kentucky investment to curry political favor. Deripaska’s shares in En+, Rusal’s holding company, largely went to the VTB Bank, a Russian firm that, lawmakers said, has been referred to as “Putin’s piggy bank.”

The lawmakers wrote that they were “deeply alarmed” to learn about the investment.

“The proposed investment by En+ - a company that is majority-owned by a U.S.-sanctioned Russian national and Russian state bank - in an American aluminum mill, raises serious questions of national security,” lawmakers wrote.

A day after the letter to the Treasury Department, a Kentucky court of appeals found in favor of the Louisville Courier-Journal in a years-long suit after the Courier-Journal filed an open records request for full disclosure of all Braidy Industries’ investors. The court ruled that Kentucky’s public investment in the company means the public is entitled to more information about the company’s operations.

On Thursday, Braidy Industries Inc. and En+ Group jointly announced the approval by their respective boards of directors of a $200 million lead investment in the Braidy Atlas mill by Rusal.

In exchange for its investment, Rusal will obtain a 40% share in the Braidy Atlas, the first greenfield aluminum rolling mill built in the U.S. in 37 years. The deal is expected to close in the second quarter of 2019, according to a Braidy news release.

The release said that Rusal will supply 200,000 tons of certified low-carbon prime aluminum ingot and slabs each year for a 10-year period, allowing Braidy to target 20% lower carbon emissions than its nearest competitor. This will be the world’s largest order for one mill of high-quality, pre-alloyed and low-carbon primary aluminum slabs, according to the release.

“This is a sustainability match made in heaven for the global aluminum industry,” Braidy Industries’ chairman and CEO, Craig Bouchard, said in the release.

A message seeking comment from Braidy Industries about the lawmakers call for an investigation was not immediately returned.

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