Aughinish Alumina unlikely to be hit by EU’s new Russia sanctions, says Coalition

The Government has insisted that Aughinish Alumina’s parent companies are unlikely to be hit in the next round of European sanctions against Russia, despite moves in Brussels to impose penalties on key shareholder Oleg Deripaska.

Pressures on the Co Limerick-based company are growing as the EU readies punitive measures against Mr Deripaska, a billionaire who is one of the most powerful oligarchs in Vladimir Putin’s Russia.

But the company’s immediate parent, Moscow-based Rusal, and its majority shareholder EN+ seem set to avoid sanctions at this time.

“We do not believe that the company Rusal and its majority shareholder EN+ will face any restrictions in the forthcoming round of sanctions,” the Department of Enterprise said last night in response to questions.

Ukraine war should be ‘catalyst’ for ‘honest rethink’ about Irish security - Coveney

---

People Before Profit TDs defend decision not to clap for Zelenskiy Oireachtas address

---

Carbon tax described as ‘lightning rod’ issue at private Fine Gael meeting

---

Ukrainian man who left Ireland to fight against Russia will be ‘greatly missed’

---

“The State continues to engage with the company as it works on the development of plans for the long-term future development of the company.”

The Aughinish operation is strategically important for the EU because it is a major supplier to European industry. The plant turns imported bauxite into alumina, which is shipped to France and Sweden and smelted to make aluminium.

Mr Deripaska, a major Rusal shareholder, was hit with UK sanctions last month over the Ukraine invasion and US sanctions in 2018 led him to relinquish his majority stake in the business.

“We are not going to comment on what may happen to Oleg Deripaska,” the department said. “The factual position is that he previously had to surrender his majority holding in the company and he can’t receive any benefit from his minority holding.”

But three people familiar with discussions on the future of Aughinish Alumina said there was intensive and growing concern that European sanctions against Mr Deripaska could lead business counterparties to stop trading with the Irish unit because of its Russian links.

The possibility of divesting Aughinish Alumina from its parent is under examination, a move that would necessitate some form of sale or Government intervention.

Although Aughinish is politically sensitive for the Government because it employs more than 400 workers, there is little clarity on how a change of ownership could be achieved.

Big question

Several people with knowledge of talks behind the scenes also said the company’s environmental liabilities had emerged as a big question.

Responding to questions, the Environmental Protection Agency (EPA) said any new owners would have to set aside large sums to cover the eventual costs of closing the business and any accidents.

“If the ownership changes, the new owners must have financial provisions in place covering the liabilities identified in the closure plan and the \[environmental liability risk assessment]\,” said the EPA. “An application for a transfer of licence must be jointly submitted with the new owners and assessed by the agency before it can be completed.”

The EPA said the current closure plan, agreed in 2018, was costed at €24.64 million – €14 million of which was for restoring the bauxite residue deposition area at the site and “aftercare considerations”.

The reminder was for closing, decommissioning and decontaminating the alumina processing plant. A separate assessment of risks from any incidents or accidents was costed at €1.23 million.

“The closure plan and environmental liabilities are covered by two financial instruments. One is a secured fund in a bank account in Ireland, current value approximately €14 million. The other, covering the remainder of the costs liabilities, is a parental company guarantee provided by Rusal.”

Minister for Foreign Affairs Simon Coveney stressed to reporters that Mr Deripaska was now a Rusal minority shareholder, adding that the Government “will work Aughinish Alumina and their management team and board to try to protect employment” at the plant.

“But of course we will act in a way that’s consistent with the sanctions that the EU imposes on Russia as well,” he said.