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Russian giant sues Rio over Qld refinery

Queensland Alumina Limited's refinery in Gladstone is now the subject of a legal battle . (AAP)

Sanction-hit Russian aluminium giant Rusal has launched legal action in Australia's Federal Court against Rio Tinto over a Gladstone refinery.

Chief executive of Anglo-Australian miner Rio Tinto Jakob Stausholm said in April the company was in the process of terminating commercial relationships with Russian businesses.

The company said it had taken over 100 per cent of the production and management of Queensland Alumina Limited (QAL), in a move that 20 per cent owner Rusal disputes.

QAL operates the refinery at Gladstone at which bauxite is processed into alumina.

Rusal companies, led by Alumina and Bauxite Company (ABC), have filed papers in the Federal Court arguing QAL used a "step-in procedure" to cut Russian interests out of the Queensland refinery business because of the sanctions.Rusal companies, led by Alumina and Bauxite Company (ABC), have filed papers in the Federal Court arguing QAL used a "step-in procedure" to cut Russian interests out of the Queensland refinery business because of the sanctions.

Court documents refer to Russian citizens oligarch Oleg Deripaska who owns 25.6 per cent stake in United Company Rusal and Viktor Vekselberg who owns eight per cent.

The two are affected by sanctions imposed by Australia in response to Russia's invasion of Ukraine.

ABC is calling on the court to restore its original rights and privileges under the agreement.

The company argues in court documents the circumstances required to validly trigger the step-in provisions do not exist.

As a result the action by QAL is "invalid and amounts to a breach of its obligations to ABC" under the ongoing agreement, the ABC's statement filed in Victoria's Federal Court registry states.

Even with sanctions, ABC says if QAL accepted delivery of its bauxite and refined it for ABC to export to third parties outside Russia, neither Mr Deripaska, Mr Vekselberg nor Russia would benefit.

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