Jobs at Aughinish Alumina at risk if tax exemptions go

JOBS at the Aughinish Alumina factory in Askeaton in Co Limerick may be under threat after the European Commission decided to appeal a ruling on tax exemptions by the European Court of Justice (ECJ) in the company’s favour.

The ECJ’s Court of First Instance ruled in December 2007 that the Commission was wrong to try and end an exemption granted to Aughinish and similar companies in France and Italy from paying tax on oil used in the production of alumina.

The Commission claimed the tax exemption granted to Aughinish constitutes illegal state aid. However, Aughinish has warned that the company could face serious and irreparable damage if it is forced to repay over e8.1m in excise duties plus interest and legal costs.

Production at the Askeaton plant has already been halved since the start of this month. And this has resulted in its 450 staff moving to a shorter working week. Aughinish has blamed the decision on a global oversupply of aluminium and alumina with a consequent fall in price for its products.

It is understood workers have agreed to a four-day working week, while also taking a 20% cut in wages.

The company, which is now owned by the Russian multinational United Company Rusal, controlled by oligarch Oleg Deripaska, is the largest alumina refinery in Europe and one of the biggest employers in the Shannon estuary region, contributing around e100m each year to the local economy.

Aughinish has claimed that some jobs at the plant could be in jeopardy if the ECJ rules in favour of the European Commission.

The ECJ is due to issue a preliminary ruling on the appeal by the European Commission next month.

Officials in Brussels have asked the Luxembourg-based court to set aside the earlier judgment.