By Pádraig Hoare
Sanctions on a Russian firm that have threatened more than 650 jobs in Limerick are beginning to be felt in industry all across Europe, a powerful German metal lobbying group has warned.
Some 450 jobs and at least 200 agency positions in Limerick are under threat because Aughinish Alumina near Askeaton is owned by Russian firm Rusal, which has been targeted by the US because of its owner, billionaire Oleg Deripaska.
Aughinish is indispensable for the alumina supply of the European market and politicians need to take quick action to avoid an economic crisis, according to a report from Germany’s WirtschaftsVereinigung Metalle, a lobbying group for 655 metals companies.
The group called for the Aughinish plant to be exempted from sanctions.
Limerick TD Niall Collins earlier this week called on Taoiseach Leo Varadkar to directly raise the issue of “unintended consequences” with US president Donald Trump.
Global mining firm Rio Tinto has plants in Dunkirk, France, and Iceland that use the Irish alumina, and Liberty House Group’s Scottish smelter also depends on the site.
The Dunkirk plant is Europe’s largest aluminium smelter and supplies companies like BMW, Mercedes-Benz-owner Daimler, and other manufacturers.
The sanctions have sent the entire aluminium industry scrambling to restore supply chains. Rusal’s refining operations, which stretch from Aughinish to Jamaica, are a vital cog in a global supply chain that has now been thrown into chaos.
Rusal shares pared back more of the losses yesterday that saw it lose more than half its value last week, rising a further 26%.
It comes as Vladimir Putin’s government said it would consider nationalising the company in order to support it.
Rusal officials met Chinese firms and traders this week to discuss the possibility of buying alumina and selling aluminum in the Asian country, sources said.
However insiders said China may not be the solution to Rusal’s problems as the world’s biggest producer has been cutting excess capacity, and is exporting huge volumes of aluminum products it does not need domestically.
The turmoil kept reverberating through metals markets, sending aluminum and nickel to multi-year highs.
The Rusal clampdown has set off a rush for alternative supplies and stirring concern that further US action could affect other markets like nickel.
Aluminium rallied over 7%, a record intraday gain, to $2,718 a ton in London.
Since the start of April, prices are up more than 30%.
Additional reporting Bloomberg