Russia’s largest aluminum producer Rusal is under a threat of losing a third of aluminum output after Guinea President Alpha Condé was ousted in a military coup, the Russian state news outlet Ria Novosti reported, citing a source in the Russian aluminum industry.

“The risks of shrinking raw material supply for aluminum production are more real than ever. Rusal could possibly lose one-third of its aluminum production, and there is virtually no place to compensate for these losses. There are no new bauxite deposits in the country [in Russia],” the source said, adding that switching to sourcing bauxites elsewhere would inflict a sharp rise in production costs for the company.

Besides, switching to other bauxites sources would require Rusal to invest in technology and equipment heavily, the source claimed.

“Against the background of a 15% export duty on aluminum [in Russia] introduced recently and the risks of reducing production, such projects may appear to be unneeded,” the source added.

Rusal produced 40% of its bauxites in Guinea in the previous years, the company said in its annual report. Rusal currently runs three bauxite assets in the country, one of which — Kindia — is the biggest feedstock asset, accounting for as much as 25% of the company’s bauxite production. In the first half of 2021, Guinean assets increased production to 3.8 million metric tons (mt) of bauxites, which was 50% of Rusal’s bauxite supply.

Guinea has vast bauxite reserve is 7.4 billion mt, which is 26.4% of global reserves. The country accounts for about 22% of the world’s bauxite production, with the output standing at 82 million mt in 2020

Rusal said it aimed to keep its three major bauxite mines and one alumina refinery in Guinea operating but could evacuate all Russian personal from the country if the crisis deteriorates.

The Russian authorities do not consider allocating state aid to Rusal due to the coup in Guinea, Russian presidential spokesperson Dmitry Peskov said.

“The events in Guinea are indeed a major factor that could negatively impact the entire aluminum market,” Peskov said. “We hope that our entrepreneurs and companies’ business interests will not be affected and be guaranteed.”

The world prices of aluminum hit a 10-year high right after the coup in Guinea. In particular, prices increased 1.8% on the London Metal Exchange, reaching $2,775.50 per mt — the highest level since 2011.

However, so far, no supply disruptions have been reported in Guinea. Chinese state-owned aluminum producer Chalco’s bauxite project in Guinea said it was operating normally. The Russian Norgold operating Lefa gold mine in Guinea also said its business in the country remained unaffected by the coup.

In the meantime, coup leaders reportedly urged mining companies to keep operating, promising that seaports in Guinea would remain open for export and a curfew introduced across the country had been lifted in mining areas to ensure that production continues as usual.