Wednesday 24 April 2019

Top US official hands Aughinish owner sanctions lifeline

Steven Mnuchin
Steven Mnuchin
Donal O'Donovan

Donal O'Donovan

Workers at Aughinish Alumina in Limerick may have been thrown a life-line after a top US official pointed the way to sanctions against the huge plant's Russian parent company being lifted.

US Treasury Secretary Steven Mnuchin said the United States wasn't seeking to put Russian aluminium giant Rusal, which owns Aughanish, out of business.

In a Bloomberg interview, Mr Mnuchin struck a conciliatory tone on the possibility of lifting sanctions on Rusal. He said discussions with Rusal had been encouraging.

While Mr Mnuchin refused to comment on the specifics of the negotiations with Rusal, he said the "first aspect" in the talks would be for Oleg Deripaska to reduce his stake. Last week, Mr Deripaska offered concessions to the US, which included cutting his stake in En+, the holding company behind Rusal.

While it's still unclear who would buy Mr Deripaska's stake, analysts say it's likely that some deal will be reached that would avoid supply shocks in the aluminium market.

The US decision last month to impose trade sanctions on Rusal, as well as its owners, had roiled markets, and cast doubt over the future of 450 industrial jobs here. That anxiety is starting to dissipate, however, as the message from US officials is now turning softer. Metals markets were steady on Tuesday and aluminium prices were little changed.

"There seems to be a pattern emerging where Trump makes a big announcement, and then over the following weeks things are rolled back," Caroline Bain, chief commodities economist at Capital Economics, said by phone from London.

"It's a businessman's approach, where you make the biggest threat possible, and then use that as a starting point to negotiate."

At the same time, wider fears over global trade tensions are also easing. The US said it would delay import tariffs on steel and aluminium from key allies, including the European Union, Canada and Mexico, until June 1. Traders are now speculating further concessions could be made when senior officials hold trade talks in Beijing this week. (Additional reporting Bloomberg)

Irish Independent

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