Sanctions threat still hangs over Aughinish plant despite new US stance

One of Aughinish Alumnia's main suppliers has warned that the Co Limerick plant still remains under threat from US sanctions against Russia despite signals from Washington this week that it was willing to ease the sanctions because of their likely impact on Europe's aluminum industry.

The supplier, which wished to remain anonymous, said the US treasury's decision to give customers of Russia's biggest aluminum producer, Rusal, which owns Aughinish Alumnia, more time to comply with sanctions, was only a temporary reprieve for the Irish plant, which employs more than 450 staff at its base near Askeaton.

A spokesman said the US move essentially just kicked the can down the road for another few months.

The US this week extended its deadline for customers to wind down trading with Rusal or face sanctions until October instead of June. Washington said it would consider lifting the sanctions altogether if Rusal's main shareholder, Russian tycoon Oleg Deripaska, ceded control of the group.

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‘Malign activity’

The US government has targeted seven Russian oligarchs, including Mr Deripaska, who is considered close to Russian president Vladimir Putin, and 17 Russian government officials with sanctions for what it called "malign activity" around the world.

"Rusal has felt the impact of US sanctions because of its entanglement with Oleg Deripaska, but the US government is not targeting the hardworking people who depend on Rusal and its subsidiaries," US treasury secretary Steven Mnuchin said.

Aughinish Alumnia turns bauxite into alumina, the raw material for making aluminum which which is then shipped to plants across Europe via a deepwater terminal on the Shannon estuary.

Conciliatory approach

Fianna Fáil's foreign affairs and trade spokesman Niall Collins cautiously welcomed the more conciliatory approach taken by the US.

“This allows the local management the time and space to engage with their suppliers whilst simultaneously offering an opportunity to Rusal’s owner Mr Deripaska, whom the US sanctions are aimed at, to step away from ownership of the Company in a structured manner,” he said.

"It's of the utmost importance that the Irish Government keeps in constant contact with the US government both directly and through other diplomatic channels, to ensure that no job losses occur as a result of these sanctions," he added.