Oligarchs with ties to resources sector left off government sanctions list

Two powerful Russian oligarchs with ties to Australia’s fossil fuel sector are yet to face sanctions, despite being targeted in the United States and United Kingdom. 

The Morrison government this week broadened its sanctions against Russia’s elite this week, in response to President Vladimir Putin’s invasion of Ukraine. But neither Oleg Deripaska nor Viktor Vekselberg were on the list, despite having closer ties to Australian industry than arguably any other oligarchs.

A spokesperson for the Department of Foreign Affairs and Trade told Crikey sanctions considerations were “continuing”.

“The government will not speculate about future potential listings,” the spokesperson said. 

Putin’s favourite industrialist 

Deripaska, who is described as “Putin’s favourite industrialist” and reportedly has ties to organised crime, made a fortune in the aluminium industry during the volatile post-Soviet years.

That fortune has links with Australia. Russian company Rusal, one of the world’s largest aluminium companies, has a 20% stake in Queensland Alumina Limited, outside of Gladstone, in joint venture with Rio Tinto over the project. Deripaska still has a major stake in Rusal via his En+ Group, which holds a controlling share. Last week, Rio Tinto announced it was severing ties with Russia, and would be reviewing its relationship with Rusal. 

Deripaska has been sanctioned in the US since 2018. When the Trump administration first came for him, Deripaska’s lobbyists tried to enlist an unlikely ally to his cause — former treasurer Joe Hockey, then Australia’s man in Washington DC.

In the UK, where the Johnson government added him to the sanctions list, calling him a pro–Kremlin oligarch closely associated with Putin, Deripaska has enjoyed extraordinary access to the country’s elite, entertaining leading political figures on his yacht. But like so many Russian billionaires, whose dirty money London welcomed with open arms, Deripaska has faced a frostier reception since Putin’s invasion. This week, demonstrators occupied his London mansion to protest the war.

Vekselberg left off

Ukrainian-born Vekselberg, who owns more Fabergé eggs than anyone in the world, has been sanctioned in the US since 2018, and by the UK since this week. Like Deripaska, he made his cash in aluminium, and now owns vast conglomerate Renova Group.

Vekselberg-controlled Lamesa Holdings has a 16% stake in Falcon Oil and Gas, which is engaged in a joint venture with Origin Energy over exploration in the Beetaloo Basin. He also sits on Falcon’s board. The Morrison government wants to unlock the Beetaloo Basin for fracking as part of its gas-led recovery. Through his subsidiary companies, Vekselberg maintains a 32% stake in Rusal, the company engaged with Rio Tinto.

Origin Energy has tried to downplay the extent of its ties with Vekselberg, noting while it had significant control over the joint venture rather than Falcon, it would comply with any rules set by the government with respect to sanctions.

But inexplicably, even as western allies move to target them, the oligarchs with the closest financial ties to Australia remain free to do business here.