A Swiss company may be on the verge of buying into the Aughinish Alumina plant on the Shannon Estuary in Co Limerick. It is understood that the company, Glencore International, carried out due diligence on Aughinish before Christmas and talks on a deal are currently under way.
Aughinish, which is owned by Canadian multinational Alcan, produces alumina from bauxite. Established in 1983, it employs 430 people and contributes £50 million a year to the local economy.
Glencore International is a privately-held global natural resources company which has significant investments within the metals and mining sector, as well as engaging in physical commodities trading. Its interests span the globe.
Based in Baaar, Switzerland, its sales in 1996 amounted to $34 billion (#29.4 billion).
A spokesman for Aughinish yesterday confirmed that Glencore had carried out due diligence, but said no deal had been finalised. Sources said Alcan had made no secret of the fact that it was on the look out for an "investment partner" for the Limerick plant.
The plant cost £620 million to construct and a possible Glencore investment of in excess of £500 million is being mooted by some sources. However, figures of this scale were dismissed by other sources. The company imports bauxite from Guinea in west Africa. It has admitted that it has had difficult times. In 1997, Alcan put total losses at the plant at $370 million.
Aughinish extracts the alumina from bauxite and produces around 1.3 million tonnes per year. Alumina is used in aluminium and cement. The company has said controlling its costs to remain competitive is vital but difficult - many other manufacturers make the product much more cheaply - in some cases up to £10 per tonne cheaper.
(# - Euro)
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