Thursday 19 September 2019

Hundreds of jobs at refinery saved as US lifts sanctions

The Aughinish plant in the Shannon Estuary
The Aughinish plant in the Shannon Estuary
Dearbhail McDonald

Dearbhail McDonald

Hundreds of jobs at Aughinish Alumina are set to be saved, ending months of uncertainty about the future of the Limerick refinery which supplies up to a third of all aluminium in Europe and is one of the most important employers in the mid-west.

Yesterday, the US Department of the Treasury's Office of Foreign Assets Control (OFAC) notified Congress of its intention to terminate the sanctions imposed on a series of companies controlled by Russian oligarch Oleg Deripaska.

Limerick Alumina Refining Ltd (LARL), which continued to operate at full capacity while managing the impact on supplies owing to a series of rolling reprieves, is a wholly owned subsidiary of United Company Rusal, one of three entities controlled by Mr Deripaska.

The fate of Aughinish was one of the top priorities for US-Ireland relations this year, resulting in a series of high-profile meetings in Dublin and Washington.

Last night, OFAC said that Mr Deripaska will remain on its List of Specially Designated Nationals and Blocked Persons (SDN List) and his property will remain blocked.

But the powerful Treasury agency determined that the significant restructuring and corporate governance changes to Rusal, EN+ and ESE - companies that were sanctioned by OFAC last April because of their ownership and control by Mr Deripaska - will enable them to meet the criteria for delisting.

On designated list: Russian oligarch Oleg Deripaska. AP photo
On designated list: Russian oligarch Oleg Deripaska. AP photo

"Treasury sanctioned these companies because of their ownership and control by sanctioned Russian oligarch Oleg Deripaska, not for the conduct of the companies themselves," said Treasury Secretary Steven Mnuchin.

"These companies have committed to significantly diminish Deripaska's ownership and sever his control. The companies will be subject to ongoing compliance and will face severe consequences if they fail to comply.

"OFAC maintains the ability under the terms of the agreement to have unprecedented levels of transparency into operations."

Earlier this year, the directors of Aughinish Alumina, which directly employs some 450 people, warned that its status as a sanctioned entity constitutes a material uncertainty that may cast significant doubt on the company's ability to continue as a going concern.

However, the company recorded pre-tax profits of €44m last year, in large part owing to the increase in the price of aluminium created by the sanctions crisis.

Irish Independent

Also in Business