Talks on the separation of Aughinish Alumina from its Russian parent have zeroed in on a deal with Glencore of Switzerland, the global metals trader that previously owned the Co Limerick business.
The discussions are said to be advancing rapidly amid pressure to cut the connection between Aughinish and Russia as international outrage grows at killings in Ukraine by Vladimir Putin’s invading troops.
A layer of complication was added last night when it was confirmed that the EU was applying sanctions to Kremlin-linked Russian oligarch, Oleg Deripaska, who is a key shareholder in the Limerick plant.
A spokesman for the Department of Enterprise said the sanctions were likely to come into effect over the weekend.
Radio station accuses council of offering adverts in return for presenters not expressing opinions
Evidence of €4.5m cash from Kinahan to Mansfield may result in criminal charges
Kinder extends alert and product recall over salmonella ‘outbreak’
Airport queues partly due to passengers arriving ‘significantly earlier’ than flights
“It remains the department’s understanding however that Aughinish Alumina will not be within the scope of these sanctions,” the spokesman said.
“The Government strongly supports the continued operation of Aughinish Alumina, which is the largest alumina refinery in the EU. It is an essential part of the European supply chain for aluminium and a major employer in Limerick.”
The spokesman also pointed out that Mr Deripaska previously surrendered his majority holding in EN+, the parent of Aughinish owner Rusal, and can’t receive any benefit from his minority holding. EN+ has previously said the possibility of “carving out” the international unit that includes Aughinish was under discussion.
Two people with knowledge of talks on the company’s future said Glencore had emerged as the favourite to take over the Limerick operation, which employs more than 400 staff and is a major supplier to European industry.
The Government is keen to preserve the jobs at Aughinish. The operation is strategically important for the EU because it provides critical raw material for manufacturers at a time of acute strain on supply chains.
The plant turns imported bauxite into alumina, which is shipped to France and Sweden and smelted to make aluminium. Neither Aughinish nor Rusal replied when asked yesterday about the talks. Without confirming or denying the engagements, Glencore’s official spokesman said: “We don’t comment on rumour or speculation.”
Prior ownership
The terms of any transaction remain unclear, although Glencore is seen as an obvious contender to take over Aughinish Alumina because of its prior ownership of the business. Glencore ran the operation from 1999 until 2006, when it came under the control of Mr Deripaska.
The Government had insisted publicly in recent days that neither Rusal nor EN+ was likely to be sanctioned in the next wave of restrictive measures.
The indication that the EU would steer clear of immediate penalties on the parent companies was seen as a sign that Brussels wants to maintain alumina production at Aughinish in the interests of European industry.
But senior business figures have privately acknowledged growing anxiety that European sanctions against Mr Deripaska could lead business counterparties to stop trading with Aughinish because of its Russian links.
The oligarch is one of the most powerful tycoons in Vladimir Putin’s Russia. The war on Ukraine, now in its seventh week, has already led the UK to sanction Mr Deripaska, and US penalties in 2018 led him to relinquish his majority stake in Rusal.
The chairman of Rusal has, meanwhile, called for an impartial investigation into the killing of civilians in the Ukrainian town of Bucha, and urged “severe punishment” for those responsible.
