Call for EU to avoid imposing sanctions on Rusal-owned firms such as Aughinish in Ireland

Industry group European Aluminium wants the EU to impose sanctions on aluminium supplied from Russia, but not on EU-based companies such as the Aughinish operation in the Shannon Estuary

The Aughinish Alumina refinery on the Shannon Estuary employs up to 500 people.

Industry group European Aluminium wants the EU to impose sanctions on aluminium supplied from Russia, but not on EU-based companies such as the giant Aughinish operation in the Shannon Estuary that are owned by Rusal. 

The group has been lobbying the EU for a ban on Russian-origin aluminium over its invasion of Ukraine. So far, sanctions have not been imposed but they are still on the agenda. 

The Aughinish operation, which employs up to 500 people at its Co Limerick base, has long been in the eye of the storm over Western sanctions. 

Its owner Rusal is based in Moscow and owns an extensive network of mining operations, refineries, and smelters that produce the raw materials and finished aluminium products used extensively in everything from construction to making electric cars by European companies.  

"The principle behind EU sanctions has been to try and do as much as possible to undermine the Russian war machine without creating harm to European industrial and, by extension, societal interests," European Aluminium director general Paul Voss said. 

"In a perfect world, we would say we don't need any of Rusal's material and take a firm moral position regardless of the practical consequences. But European governments do not and cannot afford to reason that way. They have to be pragmatic," according to the industry group. 

Even before the invasion of Ukraine, the US had imposed sanctions on Rusal in Russia, but EU-based businesses such as Aughinish, although facing major disruption, have so far been reprieved. 

Aughinish disrupted

Still, Aughinish has been disrupted because of US and EU sanctions on other parts of Rusal. 

In earnings last week, Rusal said its 2023 results had been hit by the "unprecedented regime of external restrictions and supply chain disruptions, as well as a significant drop in aluminium prices". 

Global revenues slid to $12.2bn (€11.2bn) from $13.9bn in 2022. The release did not specify Aughinish or other EU-based operations but showed sales to Europe contributed $3.4bn of the $12.2bn in revenues. 

"In this environment, the company continued to focus on securing its independence in raw materials supplies, restructuring its export sales channels, developing the domestic market, and implementing its investment programme based on the fundamental principles of sustainable development and social responsibility, and aimed at ensuring the company’s continuous operation and further development," the Moscow company said. 

But Aughinish is only part of a huge global network and Rusal's operations employ 59,500 people in Russia, Guinea, Jamaica, and Sweden, and in many other locations.

Bauxite is converted into alumina, a raw material to make aluminium used by companies in construction and packaging. 

The EU currently has bans in place on aluminium wire, foil, tubes and pipes manufactured in Russia. 

But aluminium exports including primary metal, accounting for 85% of the total "remain outside the scope of the measures", the group said last year. 

EU imports of Russian primary aluminium have dropped since 2018, when the US imposed sanctions on Rusal, but they are still significant. 

• Additional reporting Reuters