(Corrects paragraph 10 to read "the president of France poised to visit" instead of "the presidents of France and Russia")
* U.S. says Rusal could see relief if Deripaska ends control
* Europe pressing Trump over Russia sanctions
* Aluminum prices had rallied on sanctions last week
By Susan Heavey and Polina Devitt
WASHINGTON/MOSCOW, April 23 (Reuters) - The U.S. government on Monday gave American customers of Russia's biggest aluminum producer more time to comply with sanctions, sending aluminum prices into a tailspin but lifting shares of the company, United Company Rusal Plc.
Aluminum prices on the London Metal Exchange tumbled more than 8 percent after the U.S. Treasury Department announcement, which gives Rusal longer to sell off large quantities of aluminum it had been stockpiling in the wake of sanctions.
Shares in Rusal, one of the world's largest aluminum companies, rose 13 percent on the Moscow Exchange after the announcement. Earlier, Rusal had ended Hong Kong trading down 8.4 percent. Shares of its U.S. rival Alcoa Corp slid 12 percent.
Aluminum prices rallied last week to their highest in years after Washington sanctioned Rusal and its major shareholder, Russian tycoon Oleg Deripaska. The Treasury Department said sanctions relief was possible if Deripaska ceded control of Rusal.
"RUSAL has felt the impact of U.S. sanctions because of its entanglement with Oleg Deripaska, but the U.S. government is not targeting the hardworking people who depend on RUSAL and its subsidiaries," U.S. Treasury Secretary Steven Mnuchin said.
Deripaska owns a 48 percent stake in Rusal "and controls the company via his shareholder agreement with other owners," said Oleg Petropavlovsky, a senior analyst at BCS Global Markets. "It is not clear whether potential cancellation of this shareholder agreement would be enough" to satisfy U.S. officials, he said.
Treasury gave Americans until Oct. 23 instead of June 5 to wind down business with Rusal. It said it would not impose secondary sanctions on non-U.S. entities engaged with Rusal or its subsidiaries.
Deripaska is among seven Russian oligarchs sanctioned as part of a larger action targeting Moscow's "malign activities" around the world.
Rusal declined to comment on the Treasury Department announcement. The Kremlin and Deripaska did not immediately respond to requests for comment.
European leaders have worked to persuade U.S. President Donald Trump to ease sanctions on Russia, with the president of France poised to visit the White House this week.
Mnuchin said "impact on our partners and allies" factored into the reprieve. French sources said initial feedback had been "constructive."
Rusal now has more time to sell off its supply. Even if sanctions are not ultimately lifted, buyers also have more time to seek other suppliers.
Last week, aluminum rallied to its highest since mid-2011 on fears the global market could face shortages as a result of the U.S. sanctions. It remains up more than 16 percent this month.
Wood Mackenzie analysts said Treasury's announcement provides "much-needed breathing space" for the aluminum market, adding "We expect near-term correction and volatility" in prices.
Edward Meir, an analyst at INTL FCStone, said there is potential for Rusal to survive and that "the 5 mln (million) tons of Rusal production that a week ago was arguably radioactive, will no longer be so."
Workers at one of several Rusal-dominated towns have also worried about their futures unless sanctions end.
Reporting by Susan Heavey in Washington, Polina Devitt in Moscow, Pratima Desai in London; Writing by David Gregorio; Editing by Marguerita Choy