Aughinish owner Rusal warns over fallout from bans over Ukraine war

The owners of a huge bauxite smelter at Aughinish in the Shannon Estuary is struggling to remain open amid sanctions and uncertainty relating to Russia's invasion of Ukraine.

Wed, 30 Mar, 2022 - 16:02

The owner of the huge bauxite smelter at Aughinish in the Shannon Estuary has delivered a stark assessment of the threats the aluminium giant faces amid Russia’s growing economic isolation.

Rusal is the Moscow-based company which is fighting blowback from the invasion of Ukraine, which prompted sweeping economic retaliation — including a ban by Australia on sending alumina to Russia.

Australia’s ban on alumina supplies “will affect, among other things, the alumina export that is almost 20% of Rusal demand”, Rusal said in comments accompanying its earnings result. A plant it owns in Ukraine was forced to stop, increasing the uncertainty over Aughinish and the 500 jobs at the Co Limerick site.

The world’s No. 3 aluminium producer also said investments may be postponed due to equipment shortages.

Currency hit

Financial results would be hit by the need to replace foreign-currency credit facilities with rouble-denominated debt, given high domestic interest rates, it added.

EN+ Group owns a majority of shares in Rusal, while its founder Oleg Deripaska is subject to UK sanctions following the Russian invasion of Ukraine.

“If the situation persists or continues to develop significantly, including the loss of significant parts of foreign markets which cannot be reallocated to new markets,” Rusal said, “it may affect the business, financial condition, prospects and results of operations.”