Varadkar and Donohoe in talks with Aughinish Alumina

Concerns sanctions against Russian owners could jeopardise Limerick operations

Tánaiste Leo Varadkar and Minister for Finance Paschal Donohoe have held talks with Aughinish Alumina on the future of the business amid concern that any EU sanctions against its Russian owners could jeopardise its Co Limerick operations.

Aughinish is controlled by Moscow-based Rusal and its parent EN+, who have so far avoided EU penalties in the wave of measures imposed on Russian business since the Ukraine invasion began one month ago.

But billionaire oligarch Oleg Deripaska, a key shareholder, was sanctioned in the last fortnight by the UK, and US penalties in 2018 led him to relinquish his majority stake.

A major supplier to European industry, Aughinish has argued in contacts with the Government that any further sanctions on its owners would do more damage to large companies in France and Germany than to Russia. The plant turns imported bauxite into alumina, which is shipped to plants in Europe and smelted to make aluminium.

“The Government is keen that the plant will continue to operate,” the Department of Enterprise said in response to questions.

With a fifth round of penalties looming as EU leaders gather on Thursday for a Brussels summit on the war, the possibility of divesting Aughinish Alumina from its parent is under examination. Accountants Grant Thornton are carrying out a strategic review of the business, which employs more than 400 workers and had payroll costs of €48.9 million in 2020.

EN+ has stated previously that the possibility of “carving out” Rusal’s international business, which includes Aughinish Alumina, was under discussion.

There was no reply, however, from any branch of the business when asked whether it was preparing a potential Aughinish sale or a transfer of ownership from Rusal. Emails to designated representatives went unanswered and one senior Aughinish figure hung up when called.

Bank support

Mr Varadkar and Mr Donohoe met Aughinish officials on Monday, according to the Department of Enterprise. The company sought the talks, it is understood.

One question raised with Government figures is the possibility of Irish bank support for Aughinish if it is placed under new ownership.

“There has been ongoing engagement between the Government, IDA Ireland and the company, including a meeting with the Tánaiste and Minister Donohoe,” the department said.

“The department and its agencies continue to assess the implications of recent developments, and are closely monitoring the situation. The department understands the parent company is undertaking a strategic review with a view to protecting its operations.”

Grant Thornton said: “Due to professional confidentiality we are not in a position to confirm or deny any client engagements.”