Varadkar seeks stay of execution for Aughinish Alumina

The Government wants a "prolonged extension" of a sanctions deadline granted by US authorities to investors in Russian energy giant Rusal, Taoiseach Leo Varadkar has said.

His comments come amid renewed concerns in Government circles about the future of Aughinish Alumina.

Speaking in New York, Mr Varadkar said that the Government has been working on the matter behind the scenes in recent weeks.

"We have received another three-week extension from the US administration before they start to implement sanctions, and we're working very closely both with the company and management in Limerick and also at all levels in Washington – government to government, diplomat to diplomat – to try and get a prolonged extension, which is what we're looking for."

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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 in turn 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. While the three-week extension was welcomed by Mr Varadkar, he confirmed that the Government is seeking a prolonged extension.

A decision on whether to stop production at the Limerick plant would likely have to be taken weeks before the expiration of any deadline.

Support

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.

Mr Varadkar said: “Aughinish is a very important facility. It’s a power station that employs over 600 people in the mid-west so this is something the Government is very much engaged on.

Uncertainty about Rusal’s future could severely disrupt global aluminium markets.

In addition, 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.