Wednesday 18 September 2019

US gives temporary reprieve over threat to alumina jobs

Billionaire Russian oligarch Oleg Deripaska is a major shareholder in the parent company of the Auginish plant
Billionaire Russian oligarch Oleg Deripaska is a major shareholder in the parent company of the Auginish plant
Dearbhail McDonald

Dearbhail McDonald

The US government has granted a temporary reprieve against the owners of the Auginish Alumina factory in west Limerick as the Irish Government engages in a high-stakes battle to save up to 1,700 jobs in the Mid-West.

The huge Auginish site on the Shannon estuary is the biggest of its kind in Europe and is a key strategic asset for the bloc as it is responsible for 30pc of alumina produced in the European Union.

Some 750 people are directly employed by Auginish, with an additional 1,000 people indirectly employed in roles such as subcontracting.

Last April, the US Treasury imposed sanctions against Russian billionaire Oleg Deripaska and eight companies in which he is a large shareholder, including aluminium exporter Rusal - the parent company of Auginish - in response to what it termed "malign activities" by Russia.

Auginish had, under the punitive sanctions regime, until October 23 to wind down dealings with American businesses.

However, last Friday, the US Treasury's Office of Foreign Assets Control (OFAC) granted a three-week extension, until November 12, for investors to divest holdings of debt, equity and other assets in Rusal and its sister company EN+.

Ireland had sought a minimum 12-month extension to help save jobs amid concerns the sanctions could see production at Auginish slashed by up to 70pc or face closure.

Last night, Pat Breen, Minister of State across the Departments of Enterprise and Innovation - and a TD for Clare - said all sides are anxious to get the deal across the line.

"There are additional hurdles to overcome, but we are encouraged by the three-week extension which suggests that a deal may be close," said Minister Breen, who travelled to Washington DC in July to raise concerns about the potential jobs blow with the US administration. "I am confident that we will see a deal where Rusal is de-listed from the sanctions list."

The fate of Auginish has been the subject of intensive contingency discussions at EU level. Several European governments, including Ireland, Germany and France, lobbied Washington to back down as Auginish is a key strategic asset for Europe.

The Irish Government has been engaged in intense discussions with its US counterparts in Dublin and Washington DC over the Auginish affair which has seen Ireland ensnared as collateral damage in the global fallout between Russia and the West.

Last Friday, US Treasury Secretary Steven Mnuchin said the United States was in talks with Rusal to remove it from the sanctions list.

"EN+ and Rusal have approached the US government about substantial corporate governance changes that could potentially result in significant changes in control," the Treasury said in a statement. "To allow sufficient time for review, we are extending these licences until November 12."

Additional reporting, Reuters

Sunday Independent

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