Dec 20 (Reuters) – The U.S. Treasury said it will lift sanctions on the core empire of Russian businessman Oleg Deripaska, including aluminium giant Rusal and its parent En+, watering down the toughest penalties imposed since Moscow’s 2014 annexation of Crimea. London aluminium prices sank to a 16-month low after the U.S. Treasury’s announcement, while shares in Rusal, the world’s largest aluminium producer after China’s Hongqiao, surged to an eight-month high. In April, the U.S. Treasury imposed sanctions on Deripaska, Rusal, En+ and other companies in which he owns stakes, citing “malign activities” by Russia, prompting turmoil in global aluminium markets. After lobbying by European governments, Washington postponed enforcement of the sanctions and started talks with Deripaska’s team on removing Rusal and En+ from the blacklist if he ceded control of Rusal. Deripaska will remain under sanctions, the Treasury said. However, the three Deripaska companies – Rusal, En+ and power firm EuroSibEnergo – have agreed to restructure to reduce Deripaska’s stakes. Rusal shares soared as much as 26.8 percent on Thursday to their highest since April, the month when the sanctions were announced. “These companies have committed to significantly diminish Deripaska’s ownership and sever his control,” the Treasury said in a statement on Wednesday, adding that the sanctions would be lifted in one month. The Irish government, which lobbied heavily in Washington for the removal of sanctions to protect 600 jobs at an alumina plant, said the move was “a very welcome return” on those efforts. The Aughinish Alumina plant will be free from the threat of sanctions following a 30-day Congressional review period, the Irish foreign ministry said in a statement. The facility churns out a third of Europe’s alumina, a material used to make aluminium. Rusal welcomed the U.S. decision and said it would continue to do everything necessary to return to regular working conditions. En+ also welcomed the decision and added that it was subject to a 30-day review period, during which the U.S. Congress may pass a joint resolution of approval or disapproval. Following the review period, if Congress has not passed a resolution of disapproval, the Office of Foreign Assets Control (OFAC) can remove En+ from the sanctions list. The London Metal Exchange said that it would lift its suspension on aluminium produced by Rusal if the U.S. sanctions were removed. The restructuring agreement to reduce Deripaska’s stakes in Rusal, En+ and EuroSibEnergo will prevent Deripaska obtaining cash or receiving future dividends from the companies. His stake in En+ will fall from 70 percent to 44.95 percent. The deal also includes Swiss company Glencore, or its subsidiary, swapping shares in Rusal for a direct ownership interest in En+. Glencore declined to comment. VTB Bank, Russia’s second-largest lender, or another assignee approved by OFAC, will take ownership of a block of Deripaska’s shares in En+ pledged as collateral for outstanding obligations. Deripaska will also donate a block of shares to a charitable foundation and assign any voting rights above 35 percent of En+ shares to a voting trust. Several shareholders with professional or family ties to him will also assign their voting rights to an independent third party. As part of the agreement, half of En+’s restructured board of directors will be U.S. or UK nationals and Rusal’s current board chairman will step down. En+ will create a board of 12 directors, with eight directors independent of Deripaska, in 30 days. After the restructuring En+ will no longer be subject to sanctions and will own a 56.88 percent stake in Rusal, retaining its right to nominate Rusal’s chief executive. Deripaska will retain a direct shareholding interest in Rusal of just 0.01 percent.