The Government is growing increasingly concerned about the future of Aughinish Alumina in Limerick, amid continuing uncertainty about US sanctions directed at a shareholder in its parent company.
Question marks over the future of the alumina plant in Limerick were raised earlier this year after the US treasury introduced sanctions targeting Russian individuals and businesses. These included sanctions on Russian billionaire Oleg Deripaska the majority shareholder in EN+ Group which owns 48 per cent of Rusal, Aughinish's owner.
The US authorities initially gave the company until the end of October to come up with a solution to address Mr Deripaska’s interest in the company, but negotiations have stalled.
On Friday evening, the US treasury granted the company another three weeks to make corporate governance changes and find a way out of the impasse. Investors have now been given until November 12th to divest their holdings in the company.
Ownership issues
While the three-week extension has been welcomed by Dublin, sources fear that it may not be enough time to resolve the complex ownership issues. A decision on whether to stop production at the Limerick plant would likely have to be taken weeks before the expiration of any deadline.
Renewed concerns about the status of Aughinish has led to the Government intensifying engagement with US authorities in recent weeks, both at ministerial level and through the Irish Embassy in Washington.
It is understood that Ireland has support from several European countries, including France. Aircraft maker Airbus, which is headquartered in France, is a major buyer of the alumina produced at Aughinish.
The Limerick plant is the largest in Europe and provides about 30 per cent of the EU’s alumina, much of which is used for aluminium in the car and aeronautical sectors.
Uncertainty about Rusal’s future could severely disrupt global aluminium markets.
Biggest employers
Aughinish Alumina is one of the biggest employers in the Limerick region.
More than 450 people are employed directly at the plant in Askeaton, and hundreds more are employed indirectly.
In addition to the Russian sanctions, Aughinish Alumina is under further pressure from US sanctions on steel and aluminium imports.
US president Donald Trump announced a 25 per cent tariff on steel imports and 10 per cent on aluminium imports earlier this year. While the European Union was initially granted an exemption, US authorities ultimately announced that they would be subject to the new rules.
The tariffs will have an indirect impact on Aughinish as it provides alumina to some of the biggest users of aluminium in Europe who then export their products to the US.
Announcing the three-week extension of the deadline for Rusal to address its ownership issues, a US treasury spokesperson said on Friday: “EN+ and Rusal have approached the US government about substantial corporate governance changes that could potentially result in significant changes in control. To allow sufficient time for review, we are extending these licences until November 12th.”
