Aughinish smelter faces new uncertainty as Biden mulls sanctions against owner Rusal

Aughinish has so far escaped getting tied up in US sanctions on Russian companies over the war in Ukraine

The Aughinish Alumina Refinery on the Shannon Estuary employs around 500 people at the Co. Limerick site and is involved in one of the stages in the international process of turning mined bauxite into alumina which is then made into a myriad of aluminium products. File picture

The future of Aughinish has been thrown back into doubt on a report the White House is mulling potential sanctions on Russian companies dealing in aluminium, including the giant Rusal International which ultimately owns the huge smelter in the Shannon Estuary.

Aughinish has so far escaped getting tied up in US sanctions on Russian companies over the Ukraine war despite its ultimate ownership by Moscow-based international metals firm Rusal because aluminium is used widely in the manufacture of cars and buildings around the world. 

The smelter employs around 500 people at the Co. Limerick site and is involved in one of the stages in the international process of turning mined bauxite into alumina which is then made into a myriad of aluminium products.    

Bloomberg News reported that the Biden administration is now considering three options: 

• An outright ban on Russian aluminium, 
• Increasing tariffs to levels so punitive they would impose an effective ban, 
• Or sanctioning the company that produces the metal, Rusal. 

Aughinish is the one manufacturing site on Irish soil whose workers potentially have the most to lose from the sanctions regime and soaring energy costs since Russia invaded Ukraine in February. Rusal's operations employ 59,500 people in Russia, Ukraine, Guinea, Jamaica, Italy, and Sweden, and in many other locations. 

The Co. Limerick smelter has become embroiled in the sanctions regime targeting Russia because of Rusal's Russian ownership and its links to oligarch Oleg Deripasksa, who once controlled Rusal outright. Mr Deripaska, who is close to president Vladimir Putin, has been personally sanctioned by the US and UK. 

An outright ban is being considered in response to Russia’s missile attacks on Kyiv and other Ukrainian cities this week that damaged key infrastructure and civilian sites, Bloomberg reported. 

The administration at the beginning of the war held off sanctioning Russian aluminum, fearing it could disrupt global suppliers, people familiar with the matter said at the time. 

But with the ongoing war now in its eighth month, there are fewer products left for the US and Ukraine’s allies to ban in response to Russia’s escalations. The discussion by the White House has been ongoing for weeks. 

Irish Examiner and Bloomberg