THE RUSSIAN owner of Aughinish Alumina is in talks with the Government about boosting production at the Shannon Estuary plant, which is the Republic’s biggest manufacturing site.
Rusal, the Russian group controlled by oligarch Oleg Deripaska, which owns the facility, wants to grow production at the Irish plant to three million tonnes of alumina a year, a 60 per cent increase on the 1.8 million tonnes it manufactured in 2010.
Yakov Itsov, the head of the company’s international division, of which the Irish operation is a part, said yesterday it has been in talks with the Government about these plans.
Rusal already intends to boost last year’s production at Aughinish to 1.99 million tonnes to meet growing demand for aluminium, which the alumina from the plant is used to manufacture.
The group is the world’s biggest producer of aluminium. Its Irish facility is the largest of its kind in Europe and has the capacity to produce up to two million tonnes of alumina a year. Rusal was forced to shut a number of alumina plants in early 2009 as demand for the finished product slumped and prices fell below $1,300 a tonne.
However aluminium prices are now expected to reach $2,500 this year and demand is expected to remain strong as China is likely to begin importing the metal.
According to a recent interview with Rusal’s deputy chief executive, Oleg Mukhamedshin, China’s domestic aluminium production has historically been able to meet demand in the country, but energy shortages have forced manufacturers there to cut capacity.
Outside China, demand from emerging economies such as Brazil and India is also strong.
Rusal has been working on refinancing $4.75 billion of debt to give it the resources to expand. It has a number of large capital spending projects under way, including the construction of a new aluminium smelter in Russia.
In Ireland, the company recently completed the construction of a new waste storage facility at Aughinish that will allow it to maintain production there at two million tonnes a year until 2030.
Last year, Limerick Alumina Refining, the group’s main Irish subsidiary, made $24.5 million (€17.6 million) pre-tax profits on close to $500 million in sales.
Turnover almost doubled in 2010 from $252 million in 2009, the year that demand on world markets slumped. The company lost $28 million in 2009.
Subsidiary Aughinish Alumina, which provides staff and other services to its Irish parent, saw profits fall sharply in 2010 to €3.5 million from €13.5 million in 2009. However a change that resulted in a €10 million in staff costs boosted its 2009 profits.
Its figures for 2008 show that the facility earned a surplus of €1.6 million. Labour costs were €38 million that year.
Its 2010 accounts show it had cut these to €34.2 million over the previous two years. Staff numbers there fell to 444 in 2010 from 472 in 2008. The site and facilities at Aughinish are estimated to be worth almost €900 million.
The Department of Jobs, Enterprise and Innovation was yesterday unable to comment on any talks with Rusal.
