Aughinish Alumina: The US Treasury has said it may lift sanctions on Rusal, relieving fears for jobs in West Limerick
THE United States has indicated it may provide sanctions relief on Rusal – the company that owns Aughinish Alumina in Limerick.
Reports emerging overnight from the US suggest that the Treasury Department has said it may considering lifting the sanctions on the Russian-owned company, if majority owner Oleg Deripaska sells his stake in the group.
It has also extended a deadline for companies to wind down dealings with the Russian aluminium producer by five months. The deadline was previously set at early June, and several companies had already cut ties with Aughinish.
Aughinish and its hundreds of employees have been caught up in an economic storm since the US imposed sanctions on Rusal, with Deripaska seen as having close ties to Russian president Vladimir Putin.
With 450 employees at the plant in Askeaton and around 400 working on contracts, the plant is one of the biggest employers in County Limerick.
The news that the company could be saved has caused shares in the company to surge – after Rusal had previously shed half of its value on the stock market, as investors jumped ship following the blacklisting by America.
The Financial Times is reporting that US Treasury secretary Steven Mnuchin said the “impact on our partners and allies” was a factor in the decision to soften its stance on the sanctions and that they were aimed at Mr Deripaska.
“Rusal has felt the impact of US sanctions because of its entanglement with Oleg Deripaska, but the US government is not targeting the hardworking people who depend on Rusal and its subsidiaries,” he said, according to the report.
Rusal was struggling with its cash flow, as US dollar transactions and assets have been frozen due to primary sanctions. Processing transactions in any other currency is also proving difficult, as banks and suppliers around the world distance themselves from Rusal, in fear of becoming a target for secondary sanctions.
Rusal's smelter in Sweden had its power contract cut last week, and was forced to close shop.
Access to raw materials was also a major issue, as suppliers were prohibited from dealing with the company, and the company had little liquidity to pay them.
Taoiseach Leo Varadkar met with members of Aughinish management in Limerick recently and pledged to “do everything we can to assist the company, and to ensure that it can continue to operate as normal”.
Spokespeople for Aughinish Alumina have remained silent since the sanctions were announced.