Oleg Deripaska plans to keep control of United Co. Rusal even as the Russian aluminum giant battles for survival in the face of harsh U.S. sanctions, according to people familiar with the matter.

Deripaska is counting on lobbying by European governments to help ease the U.S. sanctions, said the people, who asked not to be identified. In recent days, he’s reshuffled top managers to focus attention on the sanctions, and plans to be directly involved in the situation, said the people.

The billionaire’s resistance to relinquishing control of Rusal sets up the prospect of a standoff between Rusal and the U.S., with the European aluminum industry warning there will be further chaos if the situation isn’t resolved before a wind down period expires.

While pressure in the global aluminum market has eased this week after the U.S. made clear international companies could continue to deal with Rusal under existing contracts until October, executives and traders are banking on a longer-term resolution before then -- either through Deripaska relinquishing control or through further exemptions from the U.S.


“It will really result in huge damage to Europe if this is not resolved,” said Rob van Gils, chief executive officer of Hammerer Aluminium Industries GmbH, which extrudes aluminum for customers including in the auto industry. “It will probably result in more damage to Europe than it will to Mr. Putin," he said this week at an aluminum conference in London organized by CRU Group.

The U.S. move this week has given Deripaska renewed confidence that he can retain control of the company, which he created from the chaos of Russia’s aluminum wars in the 1990s, according to the people familiar. Rusal believes it can work around the sanctions and is trying to find new shipping routs and alternative clients, they said.

At the government level, the Kremlin isn’t pushing Deripaska to leave and has no plan to nationalize the company. Officials have denounced the U.S. sanctions as unfair economic warfare and giving in to pressure to take Rusal out of his hands would be painful politically.

Still, Deripaska’s defiance doesn’t ensure he’ll be able to keep control. It’s possible that other pressures could emerge from inside or outside Russia, especially if Rusal is forced to eventually cut jobs. The company is one of Russia’s biggest employers, employing about 60,000 people.

On Tuesday, a Russian official highlighted the possibility that the government could temporarily nationalize the company in order to save it.

“That’s not being ruled out, but there haven’t been any concrete discussions about it,” Industry Minister Denis Manturov said in response to a question about the possibility of a temporary takeover by the state or a government-owned bank.

--With assistance from Jack Farchy Samuel Dodge Evgenia Pismennaya and Anna Andrianova