Aughinsh Alumina may come to find its most important ally in the campaign to shield the Co Limerick operation from European Union sanctions, which would bar it from shipping material to Russia, could be Paris.
The stance taken by the French government on any proposal by the European Commission to effectively ban exports of alumina to Russia will be very telling.
That is assuming the EU’s executive body suggests targeting Aughinish Alumina’s shipments to Russia in the bloc’s next batch of economic sanctions against Moscow.
A confidential report from the Department of Enterprise could not find proof that alumina from Aughinish was ultimately being used by Russian arms and missile manufacturers.
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However, officials qualified their conclusions by admitting their inquiry had “no means” to trace the supply chain once the product entered Russia and that they had limited access to reliable trade data.
After Russia, France is the Co Limerick plant’s next biggest market. Aughinish supplies significant quantities of material to an aluminium smelter in Dunkirk, Aluminium Dunkerque, which sells the alloy on to the automotive sector and other European industries.
Sanctions cutting off Aughinish’s exports to Russia could force the Irish refinery to close, a scenario that would see the French facility lose “close to 70 per cent of its alumina supply”, the company told Irish politicians in a May 28th warning.
The Government’s investigation into Aughinish Alumina, prompted by reporting in The Irish Times, sought input from French authorities, who “did not identify any concerns in relation to the sourcing of alumina from Aughinish”, the unpublished report states.
Depriving wartime economy
Aughinish Alumina, which is owned by Russian metals giant Rusal, has become increasingly dependent on the Russian market since the 2022 invasion of Ukraine.
While that might bolster calls for Brussels to deprive Russia’s wartime economy of critical raw materials by pushing to sanction future EU alumina exports, it also puts the Foynes refinery at greater risk of being closed down if it cannot sell to Russia in future.
“If penalties were to be imposed and subsequent sanctions were to be applied either to the company or the export of the product, the viability of the company would be at risk,” according to the unpublished Department of Enterprise report.
The Government is attuned to the fallout the plant’s closure would cause. The Shannon refinery employs 475 people directly, another 400 contractors and supports several hundred jobs in the wider midwest region.
A number of aluminium smelting facilities in Europe have closed in recent years, tightening the supply of a material that is used to make a huge range of products – from aircraft to cars to kitchen utensils.
The European Commission previously considered sanctions to prohibit the sale of alumina to Russia, but held off due to concerns about disrupting the European supply chain.
One French official, speaking on condition of anonymity, said there was a need to be careful that sanctions did not harm Europe more than Russia.
There is no appetite to rush into a fight on this.
The union’s 27 national governments approved the 21st round of sanctions targeting Russia last week. That package of restrictions had been in the works for three months and negotiations became very divisive towards the end.
Several countries opposed proposals that would cost individual businesses and national industries, watering down the cumulative impact of the measures. Those inside the room described it as a bruising experience.
During the discussions, several member states called for the EU to rethink how it puts together future batches of economic sanctions.
The problem is all the low-hanging fruit has long since been picked. New sanctions that pack enough punch to hurt Russia will have some blowback on parts of Europe’s economy too. Aughinish Alumina is the perfect case in point.
