Unpalatable prospect faces Govt on Aughinish Alumina

The Government is inching towards an increasingly difficult political and economic prospectFt with the Russian-controlled Aughinish Alumina plant.

The factory is on the Shannon estuary in rural Co Limerick. There are about 1,900 jobs directly and indirectly dependent on the plant which refines bauxite rock into alumina and ships it abroad where it is made into aluminium in smelters.

The factory is in an area where there is a dearth of large-scale industrial employers and about half of the workers in the immediate area rely on the plant.

It is owned by Moscow-based Rusal which in turn is owned by EN+ Group which was founded by sanctioned Russian oligarch Oleg Deripaska.

The key concern is half of the plant's output is going to Russia in the fifth year of its conflict with Ukraine.

The Department of Enterprise, led by Minister Peter Burke, is expected to shortly publish a report into Aughinish Alumina. That will be considered by the European Commission which could impose sanctions on alumina exports to Russia.

The reality is that the Government could try to dissuade Brussels behind the scenes from imposing sanctions before it makes any formal announcement.

As a member state, its objections would have to be considered. But all the soundings from Cabinet members indicate if the Commission adds alumina to the list of sanctioned goods, Ireland won’t object.

Politically that would give the Coalition some cover as the decision would be seen to come from Brussels.

The Government’s report is likely to state the facts about Aughinish Alumina’s output.

In the Dáil this week the deputy leader of the Social Democrats' Cian O’Callaghan put it to Tánaiste Simon Harris that Ireland’s exports of alumina to Russia have increased since it invaded Ukraine.

"It is going into the smelter that is feeding the companies in Russia that are supplying the Russian military," said Mr O'Callaghan.

It’s not considered likely that the Government report will be definitive about whether alumina from Ireland does end up in military equipment used by the Putin regime.

But there is a broader question: Does Ireland want to be in a position where it is supplying any alumina to Russia at a time when that country is using large quantities of aluminium in its war with Ukraine?

In the Dáil this week Mr Harris said Ireland has "never" blocked sanctions proposed by the European Commission.

"In fact, we enthusiastically support all sanction proposals that come to the Commission and we are currently trying to get the 21st sanctions package over the line," he added.

"I am absolutely crystal clear, as is all of the Government, there can be no cherry picking - and there will not be - when it comes to Ireland supporting Ukraine and taking action against Russia."

His comments back up remarks from Mr Burke, who said last week that he could give no guarantees to workers at Aughinish Alumina.

His remarks were unusual for an Enterprise Minister who might normally put the interests of workers at the top of his agenda. In this case, he said: "I can’t give any reassurances in any regard. This is a European issue."

There is also pressure coming from Ukraine’s leader Volodymyr Zelensky.

When he was in Dublin in recent weeks, he criticised what he said was the failure of the EU to sanction companies operating in Europe, under the control of Russian oligarchs, which continued to supply Russia’s military efforts.

The Mayor of Limerick John Moran, a former secretary general at the Department of Finance, had said it was unclear what would happen to the factory if sanctions were imposed.

"The plant might continue or it may not be able to trade," he told RTÉ's This Week.

The Government and the European Commission will also have to consider the fact that large quantities of product from the Co Limerick plant are supplied to Europe.

Mr Moran has suggested a forum should be established "to make sure the workers, the unions, the management and voices of Limerick are equally at the table and not just the voices of Europe".

That idea is likely to be considered by the Coalition if sanctions are imposed. But the process of deciding on trade restrictions by the European Commission is likely to take some months.

No government wants to be party to an announcement which could result in large scale redundancies. But this administration may have little choice.