AluNews - April 2003

Kaiser losses hit $468.7 million

Fourth-quarter loss was $270.8 million, company says

The Spokesman-Review Tuesday, April 1, 2003

John Stucke Staff writer

Kaiser Aluminum Corp. reported Monday that it lost $468.7 million last year.

A dominant employer and political heavyweight in Spokane for decades, Kaiser has operated since last February under Chapter 11 bankruptcy protection.

In its fourth quarter and year-end earnings report, Kaiser reported debts and liabilities of about $3.1 billion.

In just the last three months of 2002, Kaiser's losses totaled $270.8 million, and were especially acute in Spokane, where the company took more than a $200 million charge to close the Mead smelter.

Included in the Mead write-down was $138.5 million for fixed assets. Another $58.8 million was for pension, post-retirement benefits and other obligations for hourly employees who were on layoff status, but became eligible for early retirement benefits.

Other charges included a $21.4 million write-down of aluminum and alumina inventories to better reflect their sales value in today's depressed markets.

Kaiser quit making aluminum at the smelter in December 2000. The company sold Mead's massive electricity load during the height of the regional energy crisis. Last fall, Kaiser severed its electricity contract with the Bonneville Power Administration. By January, the company had indefinitely curtailed the smelter, which just a few years ago had 1,200 employees and poured $750 million into the regional economy.

Kaiser's other Spokane property, the Trentwood rolling mill, also contributed to last year's financial troubles. With aerospace customers such as Boeing Co. cutting back, shipments were clipped by 38 percent last year and prices were down 4 percent.

"Clearly, we are dissatisfied with the poor market conditions that have hampered the company's recent performance," Kaiser CEO and President Jack Hockema said Monday.

Much of the Trentwood decline is due to Kaiser's decisions to quit rolling aluminum for cans and lids.

Trentwood was once filled with aluminum ready for shipping. Today, much of the huge building in the Spokane Valley sits open. Kaiser made the decision to exit the can business before it filed for bankruptcy, choosing to specialize in the lower-volume but higher-margin market for aerospace metal.

In 2002, sales of flat-rolled products totaled $46.3 million. A year earlier, the sales were $74.4 million.

In the year 2000, sales of products from Trentwood totaled $162.3 million.

Kaiser still has several hundred salaried and hourly employees at Trentwood.

Despite the deep losses, Hockema pointed to some accomplishments including tighter cost controls.

Kaiser is scheduled to file a reorganization plan this year that would satisfy creditors and allow Kaiser to emerge from bankruptcy in some form next year.

The company has sold some assets, including its Tacoma smelter for $12 million and an office tower in Oakland, Calif., for about $65 million.

Kaiser's 2002 net loss of $468.7 million was $5.82 per share. That compares with a net loss of $459.4 million, or $5.73 per share, for 2001.

For the fourth quarter of 2002, the $270.8 million loss amounted to $3.37 per share, compared with a loss of $583.3 million, or $7.23 per share, for the fourth quarter of 2001, the company said.

Kaiser's fourth quarter net sales were $364.7 million. For all of 2002, sales were $1.4 billion. That compares with $375.3 million in net sales for the fourth quarter of 2001, and $1.7 billion in sales for all that year.

Century Aluminum says buys rest of Kentucky plant

Reuters, 04.01.03, 3:31 PM ET

NEW YORK, April 1 (Reuters) - Century Aluminum Co. (nasdaq: CENX - news - people) said Tuesday it has completed the $105 million purchase of a 20-percent stake in a Hawesville, Kentucky, aluminum reduction plant that it does not already own from from Glencore International AG.

Century said it financed the acquisition of the 244,000 tonnes-per-year Hawesville plant with about $65 million of available cash and a six-year note payable to Glencore.

Monterey, California-based Century in January said the acquisition was a bid to increase metal production.

Century now owns a total of 525,000 tonnes of annual primary aluminum production capacity, it said.

Copyright 2003, Reuters News Service

Aluminum Industry Feeling War's Pinch

FOX News Tuesday, April 01, 2003

BALTIMORE — The North American aluminum industry, already battling depressed industrial demand, is also delaying important business decisions because of uncertainty about the outcome of the war in Iraq, company executives said.

Even as the economy tries to recover from its slow patch, surviving the current war anxiety may depend on having the right mix of products, said conferees at the U.S. Aluminum Association's spring meeting in Baltimore.

"It is having a major short-term impact," said Sandy Little, vice president of sales and marketing for Pechiney Rolled Products in West Virginia, a subsidiary of French minerals group Pechiney.

"Sales have stalled. It seems like the economy wants to recover. There are signs of gradual recovery. But the short-term impact of war has put people on hold. We are back to uncertainty affecting most of our markets and the consumer is holding off," he added.

The more fragile companies in the industry "could be facing a really rough time," he said in a remark echoed by others.

Another aluminum executive said survival will depend on the portfolios of individual aluminum companies and whether they offer the products and services that are needed to weather the storm.

"A lot of mills are hurting. They are just not getting enough orders. You need a certain volume (of orders) to run them. And they aren't getting them. You can't do it with piecemeal orders," said a third executive.

"If the war goes on past June," said another executive, "we are in real trouble."

With the uncertainty of war causing a drop-off in demand, Pechiney's Little said now is not the time to make long-term strategic decisions.

"If your long-term strategy is in place, you can deal with the short-term swings," he said.

Some companies have tried to keep overhead costs as low as possible using just-in-time inventory management, which keeps only enough stock on hand to fill current orders.

John Lapides, president of United Aluminum in Connecticut, illustrated this point by saying, "Inventories are so low people are living hand-to-mouth. So, a small change in demand can have a large impact on volumes."

Lean inventories mean that once the war ends, the economy, demand and production should bounce back. However, executives warned against expecting too, much too fast. saying a lot depends on what happens in the auto industry.

In the mean time, Lapides said his company has taken on some U.S. Department of Defense work that he may not have taken on normally. "It's about more than business. This is about defending our freedom," he said.

Even before the war with Iraq, aluminum companies were struggling with other negative influences on the industry.

Aluminum companies are having difficulty finding a viable energy source to run their power-hungry smelters and furnaces.

"Any period of adjustment can be difficult. Right now we're in that period of adjustment in terms of finding an energy source that can power the aluminum industry," said one executive.

Still others discussed the difficulty U.S. manufacturers, customers of aluminum producers, are having competing with Chinese companies, which do not have to comply with the same regulatory environment as U.S. companies.

Some scrap aluminum market participants said they have not yet felt an impact on their business from the war. Inventories are tight as they have been for about the last 15 to 18 months.

In the last month, however, some participants said they have experienced even tighter scrap supplies than usual. They attribute the lessened supplies to a contraction in U.S. industrial production, the snapping up of available scrap by the auto industry for certain alloys, and increased demand coming from China.

But some large secondary aluminum producers are starting to feel the pain of a slowdown.

One secondary smelter has had to "collapse capacity" over the past month, by shutting down four furnaces and letting 86 workers go, according to one of its executives.

"We are clearly in a downturn in the demand cycle, especially in auto specialty alloys and can recycling. The slowdown is pronounced and we haven't seen the full force of it yet," said the secondary market executive said.

The secondary industry is at the end of the production process, he explained, using aluminum material that has already gone through a series of processes before it gets to their facilities. It therefore takes longer to see the impact of the slowdown in demand for aluminum, both molten and solid.

NALCO expansion delayed till 2004

Reuters Hindustan Times, India Mumbai, April 3

India's second-largest aluminium maker NALCO said on Thursday its full expansion will be further delayed until March 2004, due to a hold up in erecting a power unit.

The expansion, which would take full capacity to 345,000 tonne a year, was originally slated for completion by late 2002 but a top industry source later said it will be ready only by November this year.

Chairman C Venkataramana told Reuters in an interview the company added half of the 115,000 tonne capacity last month, but the remainder will take more time.

"There was a delay in beginning construction of the power plant as the government approval came late," he said, adding the seventh power unit was recently commissioned and construction of the last unit would be over by the end of 2003.

The company aims to have eight power generating units, each with a capacity of 120 MW.

"We are waiting for the power generation to begin," he said. "The pots are ready."

The electrolytic pots are used to smelt alumina, extracted from bauxite ore, to produce aluminium metal.

"We have already stabilised production at 120 pots which were commissioned last month," Venkataramana said.

He said the company would start commissioning of the last phase of expansion at its smelter at Angul, in Orissa, from December and would finish the work by March 2004.

The state-owned National Aluminium Company, or NALCO, plans to raise the number of pots by 240 to 720, which would have the capacity to produce 345,000 tonne of aluminium in a year from the earlier 230,000 tonne.

Venkataramana said the company has submitted a proposal to the government to further raise its smelter capacity by 115,000 tonne a year, and annual alumina capacity to 2.1 million tonne from 1.575 million tonne.

"The fresh expansion would depend on the government's approval," he said, adding the company was also looking at raising its bauxite mining capacity to 6.3 million tonne from 4.8 million tonne.

In 2001, NALCO raised the capacity of its alumina refinery, located in the mineral-rich town of Damanjodi in Orissa, to 1.575 million tonne from 800,000 tonne a year.

He said NALCO produced 245,000 tonne of aluminium in the past year ended in March, up from 232,000 tonne a year earlier.

Venkataramana forecast output to reach 290,000 tonne in the current year, and exports to hit 150,000 tonne against 106,000 tonne in the last year.

Alumina output in the current year is seen at 1.56 million tonne, compared with 1.486 million tonne last year. The company has targeted to export 900,000 tonne of alumina, down from 1.037 million tonne in 2002-03, he said.

Hindalco Industries Ltd

April 4, 2003

[Pace Petroleum Coke Quarterly] - Hindalco Industries Ltd announced today its primary aluminum output increased 2% last year (ended in March) to 266,837 metric tons. Hindalco, India's largest aluminum producer and part of Aditya Birla Group, accounts for nearly 40% of the country's aluminum output. The company is currently expanding the capacity of its Renukoot plant in Uttar Pradesh by 100,000 MT to 342,000 MT/year, and expects to complete construction by September 2003.

National Aluminium Company (NALCO),

India's second largest aluminum smelter, announced yesterday they produced 245,000 MT of aluminum last year (ended in March), up nearly 6% from 232,000 MT a year earlier. NALCO is currently expanding its Angul facility in Orissa by 115,000 MT/year, which will increase the plant's annual capacity to 345,000 metric tons. The project's completion date has been delayed and is now scheduled to be completed by March 2004 due to a construction delay of new power generating units. The smelter aims to have eight power generating units each with 120 MW capacity.

Pechiney considers alumina refinery at Aurukun

Sydney Morning Herald, Australia April 7 2003

Pechiney, the world's No 4 aluminium maker, may build a mine and refinery in far north Queensland to boost supplies of raw materials for its smelters.

Pechiney is studying mining the Aurukun bauxite deposit and a 1.5 million-tonne-a-year plant to turn the ore into alumina, said Andre Creis, managing director of Pechiney Pacific.

About four tonnes of bauxite produces two tonnes of alumina, which can be smelted into one tonne of aluminium - used to make drink cans, cables and aircraft.

Paris-based Pechiney needs new sources of alumina to feed its smelters because competition from rivals for supplies is rising. European alumina prices have risen 81 per cent this year, according to Metal Bulletin. Prices of finished aluminum have fallen more than 1 per cent in the same period.

"Pechiney is short of alumina," Mr Creis said. "We are discussing with the Government and we intend to do some studies of the reserves and technical studies on the quality of the bauxite." He declined to give an investment figure.

Rio Tinto, which runs the Weipa bauxite mine on Cape York Peninsula, north of Aurukun, is building a $750 million alumina plant in the state that will be able to produce 1.4 million tonnes a year.

Global aluminum demand is expected to rise 12 per cent to 27.5 million tons by 2004, from 24.7 million tons in 2002, according to the Australian Bureau of Agricultural and Resource Economics.

That has prompted producers in China and elsewhere to build new smelters, increasing competition for raw materials. Alumina prices have jumped to $US255 a tonne, from $US140.50 in late December. Prices of refined aluminum have fallen on the London Metal Exchange to $US1332 a ton.

China's refined aluminum output may rise 20 per cent this year to 5.3 million tonnes, higher than an earlier estimate, the country's non-ferrous metals industry group said last week.

Pechiney will decide on whether to proceed with the Australian project in 2005 at the earliest, Mr Creis said. The company had not decided from where it would buy energy for the plant, he said.

Rival Alcan, the world's second-biggest aluminium maker, is considering expanding its alumina plant at Gove in the Northern Territory. The Montreal company said earlier this week that first-quarter profit might be less than forecast because of higher energy and raw materials prices.

The world's largest aluminium producer, Alcoa, said first quarter fell 31 per cent to $US151 million ($252 million), reflecting rising energy costs.

1m grant safeguards 150 aluminium jobs

The Western Mail - The National Newspaper Of Wales Apr 7 2003

HYDRO Aluminium Extrusion (HAE) has been offered a 1.13m Regional Selective Assistance grant from the National Assembly Government.

The RSA investment will be used by the Caerphilly-based company to purchase additional plant and machinery, to increase efficiency.

Part of Norsk Hydro ASA, Norway's largest industrial group, HAE is one of the UK's leading producers of aluminium extrusions for automotive, construction and other uses.

Economic Development Minister Andrew Davies said, "I am delighted that the National Assembly Government has been able to aid the expansion of the company through Regional Selective Assistance. These grants make a real difference - I understand that over 150 permanent jobs will be safeguarded by this investment."

Laurids Lauridsen, managing director of HAE, said, "The manufacturing market in Wales is constantly under pressure. We believe companies can only survive by attacking their cost space, offering greater quality, added value and greater flexibility for its customers.

"The RSA grant provides a state-of-the-art packing facility that will, uniquely, achieve all of these aims.

"We are immensely grateful for the Welsh Assembly's supportive approach to this project."

Kaiser Aluminum Introduces New High-Strength Alloy

www.kaiseral.com

HOUSTON, Texas, April 7, 2003 -- Kaiser Aluminum today introduced a new Sc888 Advanced Metal MatrixTM alloy that offers unmatched strength and durability.

Sc888 is based on a patent-pending formula that includes aluminum, zinc, copper, magnesium, and the powerful grain refiner scandium. It is the successor to Kaiser's previous best-selling scandium-based alloys: Sc500, which was introduced in 1997, and Sc777, which was introduced in 2000.

Sc888 was developed by Kaiser's Advanced Engineering Group in conjunction with Easton Sports, Inc. Easton has exclusive rights to use the alloy in designated sporting goods applications, including softball and baseball bats. Kaiser began shipping the product in March in the form of tube stock.

"The relationship between Kaiser and Easton is a model of customer-supplier cooperation," said Keith A. Harvey, Vice President, Sales & Marketing, Distribution & Aerospace for Kaiser's Fabricated Products business. "Working together, the two companies have achieved a technologically advanced alloy that's perfectly positioned for the sporting goods market. In sporting goods applications, Sc888 produces lightweight bats with thinner walls and superior dent and crack resistance. Kaiser believes this 'Triple 8' alloy may have applications in aerospace and other industrial products that have demanding metallurgical specifications, and we are actively exploring such potential applications."

Easton Sports, Inc., based in Van Nuys, California, is a world leader in the design, manufacturing, and distribution of technologically advanced sporting equipment for baseball, softball, hockey, and bicycling.

Sc888 and Advanced Metal Matrix are trademarks of Kaiser Aluminum & Chemical Corporation.

Alba signs $1bn deal to expand Line 5 Project

Gulf Daily News, Bahrain Tuesday 8 April 2003

Alba sealed a $1.05 billion financing package for the construction of its Line 5 Project yesterday.

The total cost of the expansion project is $1.7bn.

Oil Minister and Alba chairman Shaikh Isa bin Ali Al Khalifa signed the loan agreement with a group of banks at a ceremony held at the Gulf International Convention and Exhibition Centre, Gulf Hotel.

The ceremony was attended by Minister of State Abdul Hussain Mirza, Finance and National Economy Under-Secretary Shaikh Ibrahim bin Khalifa Al Khalifa, representatives from the commercial and Islamic banking sector, legal brokers, as well as government officials who concluded the financing agreements.

Shaikh Isa said the Line 5 expansion, due for completion in June 2005, would expand Alba's annual production by a further 307,000 tonnes per annum (tpa), making it the largest smelter in the world outside of Eastern Europe.

Alba now produces in excess of 520,000 tpa, and the expansion will include a new power station, carbon casthouse and other facilities.

Shaikh Isa thanked the banks for their continuous support in helping Alba maintain its leading position in the global aluminium industry.

"On behalf of the Bahrain government, SABIC, Breton Investments and the management of Alba, we thank the banks for being our partners in the implementation of the landmark project," he added.

The $1.05bn loan is to come from three different sources in specific tranches.

A $500 million, 10-year commercial tranche is to be supplied by Gulf International Bank (GIB), HSBC, Mizuho Financial Group, National Bank of Bahrain, Saudi British Bank, Sumitomo Mitsui Banking Corporation, Bank of Tokyo Mitsubishi, Bank of Bahrain and Kuwait, Qatar National Bank and National Bank of Abu Dhabi.

A second tranche of $250m will be supplied by the Islamic banking sector from ABC Islamic Bank, HSBC Amanah Finance, Riyad Bank, Islamic International Arab Bank, BBK, GIB and Abu Dhabi Islamic Bank.

The last payment of $300m is being jointly arranged by Goldman Sachs and GIB.

The development of Alba over the past 30 years, said Shaikh Isa, has given rise to a significant downstream industry that provides substantial employment and economic benefit for the economy of Bahrain across a broad base.

Alba currently contributes $200m per annum to the national economy which is in the range of seven to eight per cent of the Gross Domestic Product.

With the Line 5 expansion, the contribution is expected to increase to $300m per annum, which is in the range of 10 to 12 pc of GDP, said Shaikh Isa.

Alba general manager-finance Ahmed Al Noaimi said the Line 5 project would open up the road for new employment opportunities for the local market.

"Alba's $1.7bn expansion project has already allocated a total spending budget of $520m for the Bahraini market and has created opportunities for the local contractors and suppliers," he added.

"With well over 2,000 Bahraini workers on board and an 87pc Bahrainisation rate, Alba has rightly attained the status of a prominent supporter of the local community.

"More than 4,000 project related jobs will be created during the 25-month construction phase and over 400 permanent jobs will be created to operate Potline 5."

GIB chief executive officer Dr Khaled Al Fayez spoke on behalf of the banks.

Indal 2002-03 aluminium output rises 15%

Hindustan Times, India Mumbai, April 7

Metal production at India's fourth-largest aluminium maker, Indal rose 15.4 per cent in the year ended March 31, 2003, the company said on Monday.

Indal, or Indian Aluminium Company, produced 51,231 tonne of aluminium during 2002-03, compared with 44,378 tonne in the previous year.

The company, a subsidiary of India's largest aluminium maker Hindalco Industries Ltd produced 5,893 tonne of the metal in March, up 55 per cent from a year earlier.

Indal nearly doubled the capacity of its Hirakud smelter, located in Orissa, in September last year by shifting half the 400 electrolytic pots lying idle at another unit in Belgaum in Karnataka.

The pots are used to smelt alumina, an intermediate product, to produce aluminium metal.

It had closed the Belgaum smelter in 1995 saying the unit had become unviable due to high costs of power supplied by the state government.

Alcoa sees big potential for aluminum wheels that keep their sheen

Pittsburgh Post Gazette, PA , Wednesday, April 09, 2003

By Len Boselovic, Post-Gazette Staff Writer

Cleaning the wheels on 1,000 buses each day is a dirty job, but someone's got to do it.

At the Port Authority, the man behind the wheel washers is John Koenig, manager of bus maintenance support. His staff scours and scrubs wheels to remove the grime that corrodes the highly polished aluminum and turns the wheels a dull, dingy gray.

"Once they start getting that corrosion on them, they seem to collect dirt easily. Dirt has something to really stick to," Koenig said, sounding like a harried housewife fighting a losing battle with greasy buildup.

But Koenig's worries are being buffed away by a new Alcoa wheel developed, in part, at the company's research center in Westmoreland County. About 225 Port Authority buses are equipped with the Dura-Bright wheel, which needs only a power wash to keep its bright-as-new finish.

"The only thing you do to it is hose it down," Koenig said.

Alcoa approached the Port Authority about giving Dura-Bright a test drive about five years ago, long after the aluminum maker had started searching for a solution.

"We've worked on this about 10 years through a lot of iterations," said Bob Sitzwohl, vice president and general manager of Alcoa's commercial vehicle wheel business.

Aluminum wheels were popularized because they are lighter than steel, allowing trucks to carry bigger payloads. Aluminum also dissipates heat better than steel, which Koenig says helps brakes last longer. The Port Authority has been gradually converting its fleet to all aluminum wheels, a process Koenig says was completed last month.

Despite their popularity, keeping the wheels clean presents challenges. To protect its wheels, Alcoa either sprayed or melted a plastic, organic coating onto the surface. But Sitzwohl says moisture, road salt and dirt gets under the coating, causing the aluminum to oxidize and the wheel to lose its shine.

"It takes a lot of work to restore that nice polished look," he said.

With the Dura-Bright wheels, the coating is embedded into the wheel, making it part of the aluminum. Sitzwohl can't talk about the proprietary coating or the patented process used to embed it except to say it costs more to produce and lowers maintenance costs. "These wheels will stay polished," he promises.

The Port Authority has purchased about 225 buses with Dura-Bright wheels and will add another 200 by the end of January as older buses are retired, Koenig said. He said ordering Dura-Brights instead of standard aluminum wheels adds only $80 to the cost of a bus, loose change when PAT pays about $300,000 for a standard 40-foot bus. "It's a real good deal," Koenig said.

Alcoa expects its customers to pay more than a $20 premium for a Dura-Bright, said spokeswoman Joyce Saltzman. She said what Port Authority pays for the wheels is determined by negotiations between the agency and the bus manufacturer.

Employees who worked on Dura-Brights will share an Alcoa technology award with researchers who developed Release, the company's nonstick aluminum foil. The wheels also were cited by Heavy Duty Trucking magazine as one of the 50 best new products introduced last year.

Sitzwohl says they were a hit at a recent show in Louisville, Ky., for tractor-trailer drivers who own their own rigs. One competitor told Sitzwohl "this is the first time I was in one of these contests that I wasn't up the night before polishing my wheels."

"Owner-operators are people who tend to be real particular about their trucks, probably because they live in them," Sitzwohl said.

Alcoa also is marketing the wheels to companies that make mining cars, cranes, cement mixers and other so-called "vocational" trucks. Eventually, it wants to adapt the process to passenger vehicles.

"There's no doubt we're thinking about how to do that," Sitzwohl said.

Mozal Aluminium Produces First Ingots from Expansion

Azom.com

The first ingots have rolled off the new extension production line at the Mozal aluminium smelter near Maputo in Mozambique. Production has commenced five months ahead of schedule.

The expansion to the plant raises capacity from 253,000 tonnes per year to 506,000 tonnes per year of aluminium ingots. The plant is expected to reach full production capacity by the end of the year.

The shareholders in the project, headed by BHP Billiton were also impressed by the fact that the work was completed ahead of schedule and also came in under the $850 million dollar budget.

Pechiney Coega smelter moves closer

Manoah Esipisu

IAfrica South African News, South Africa Posted Tue, 08 Apr 2003

French aluminium producer Pechiney has stepped closer to building a smelter near Port Elizabeth with environmental clearance and a deal on power supply, officials said on Tuesday.

The owners of the industrial park where the Pechiney smelter will be constructed told Reuters a study had found that the smelter's impact on the environment could be managed.

"Major hurdles have been cleared," said Coega Development Corporation spokesperson Vuyelwa Vika. "(Power utility) Eskom had to commit to upgrade the electricity supply to the region."

Pechiney's agreement with Eskom for an energy supply contract lasting several years is considered a significant step in the process of establishing the aluminium smelter in Coega, which is located just 20 km from Port Elizabeth.

The power deal was also key to further negotiations with the government, potential partners and local communities before a final go-ahead for the smelter.

The smelter will use Pechiney's latest AP50 technology and produce around 460 000 tons of primary aluminium per year.

AP50 technology allows lower capital expenditure, quicker construction, fewer emissions and higher productivity than earlier generations of primary aluminium smelters.

Pechiney also cleared the last major legislative hurdle for the project after the ministry of environmental affairs and tourism entered its so-called record of decision, Vuyelwa said, but gave no indication on when that was done.

The record of decision serves as the government's all-clear signal that a capital investment can go ahead in South Africa.

"Since then, Pechiney has awarded a R6.0-billion contract for general construction and management of the smelter in the Coega IDZ to specialist construction firms Technip-Coflexip of France and Bateman of South Africa," Vika said.

"Both Technip-Coflexip and Bateman will be investing large resources into preparing for construction at the beginning of 2004," said Vika, who, however, added that the start of construction was subject to all finance being in place.

The total investment cost of the aluminium project will be approximately $2.094-billion, according to an economic impact report conducted on behalf of Pechiney. Of this, $1.042-billion will constitute capital costs.

Mozambique seeks investors to power up

Bloomberg April 8, 2003

Johannesburg - Mozambique, one of Africa's top electricity exporters, said it was seeking investors for a $1.9 billion hydropower plant on the Zambezi River.

The Mphanda Nkhuwa plant would produce 1 300 megawatts.

Mozambique might determine preferred bidders next week for the $2 billion Motaize coal mine and power plant, energy minister Castigo Langa said at a conference in Johannesburg.

An unidentified company was conducting a study into building a natural gas-fired power plant, and the country might sell investors a stake in national power company Electricidade de Mozambique, Lanaga said

Mozambique needs to build new power plants to maintain exports to neighbouring countries and supply planned aluminium and titanium processing plants.

The Southern African Power Pool, a group of 12 national power utilities led by South Africa's Eskom Holdings, plans to spend $2.15 billion on electricity transmission lines and power plants in countries such as Mozambique. -

Coega holds breath for R20bn decision

Dispatch Online, South Africa

By Eddie Botha Business Editor

COEGA -- There is a great sense of urgency awaiting the final decision by the French Pechiney aluminium group to build its R20billion smelter in the Coega Development Zone, says Coega Development Corporation (CDC) business development executive manager Graham Price.

Price, who briefed journalists at the site of Coega deepsea port, now under construction, said Pechiney executives had made eight visits to Port Elizabeth during the past three months.

"This week we are hosting them on a detailed visit to the site. They will also be looking at housing and educational requirements," said Price.

He said so far Pechiney had spent a lot of money on Coega. The group had already signed a R6bn joint venture contract for general construction and management of the smelter with specialist constructions firms Technip-Coflexip of France and Bateman of South Africa.

Price said time was now being spent negotiating the project in its finest detail. "We are comfortable with that," he added.

He said Pechiney was also interacting with a number of government departments and was discussing the financial side with the aim of establishing an equity partnership with Eskom and the Industrial Development Corporation.

"Once that is tied up Pechiney will negotiate debt finances. That is the challenging part. We are living in turbulent times," said Price.

The war in Iraq would not necessarily benefit the Coega port as a safe haven. "From an investment point of view, perhaps, but in the long term I do not think so," he added.

Price said in the light of these difficult negotiations he would be surprised if the CDC were to get the green light in the immediate future.

The CDC had had about 100 inquiries from other investors during the past 18 months and the information was being screened. Price said between 12 and 14 serious feasibility studies had already been done.

At first the IDZ had been constrained by a lack of capacity but the corporation had now grown in size. A number of specialists had been appointed.

The logistics of a fast rail link between Gauteng and the port had also been discussed with Spoornet and the National Ports Authority.

Spoornet had been part of the integrated project team for the past five years and discussions were now taking place for the first time between people on the ground representing the two parties.

CDC spokesperson Vuyelwa Vika said the future success of the project did not depend on a single investor.

"The decision to proceed with the development of the Coega IDZ and the port was made before Pechiney looked like a serious investor. All our research shows that manufacturers looking at supplying world markets need the rich mix of features Coega has to offer," she said.

"Pechiney's decision to choose Coega for a new generation smelter over all the other sites available to it around the globe is proof that Coega is a prime investment destination."

Asked why so much money had been spent on the development of Coega, Price said if there was no economic infrastructure it would not attract industries. "If we had the harbour both the Billiton zinc smelter and the Ferrostaal group would have stayed."

ALCOA Honors Warrick Operations With Awards

WFIE-TV, IN

The Chairman’s Award, presented annually by the leadership of Alcoa has arrived at the company's Warrick Operations. This prestigious award is just one of five won by the businesses represented at Warrick Operations. In addition to the Chairman's Award, the units were recognized as finalists in four other categories.

The Chairman’s Award was given to the Rigid Packaging Division for best overall business performance in 2002 based on success in a variety of financial and non-financial measures, rapid rate of change and exemplary use of the Alcoa Business System to improve performance. The Division is headquartered in Tennessee with operations in Newburgh, IN and Alcoa, TN.

Rigid Packaging also won awards for: Best Large Business Unit Financial Performance for high rankings in a host of financial categories and Best Deployment of Technology for applying our business model to drive more aggressive application of technology solutions leading to environmental and efficiency benefits.

Rigid Packaging was a finalist in two categories: Best Deployment of the Alcoa Business System for process improvement activities and Best People Work Climate for our approach to running our enterprise.

Primary Metals-North America, which has 14 operating locations including the Warrick Operations, also won awards: Best Environmental, Health & Safety Performance as determined by scoring some of the highest results in Alcoa’s internal auditing process in 2002. Additionally, the business reduced lost workday injuries by 50%, and demonstrated outstanding environmental performance and ergonomic improvements. They also won Best Leverage of Alcoa Business Support Services for overall usage of the Support Services and their willingness to share talent between the organizations.

Primary Metals was also a finalist in two categories: Best Rapid Technology Deployment for their efforts to share technology between plants across the business, including those outside of North America and Best Overall Audit Performance for the results in the fully integrated audits conducted by the corporation.

The Global Leadership Awards were initiated in 1999 as way to recognize business units for outstanding results in support of Alcoa’s values and major initiatives. The awards are linked to Alcoa’s business strategy that includes business goals, values and efforts in sustainability.

Mel Lager, Vice President & General Manager, congratulated the 2400 men and women who work at Warrick Operations acknowledging, “These awards recognize the efforts of each Warrick Alcoan to work in a safe manner, while improving efficiency and maintaining superior quality as they do their daily jobs. Their efforts are appreciated and acknowledged for the success we have had operating in Warrick County.”

Alcoa is the world's leading producer of primary aluminum, fabricated aluminum and alumina, and is active in all major aspects of the industry. Alcoa serves the aerospace, automotive, packaging, building and construction, commercial transportation and industrial markets, bringing design, engineering, production and other capabilities of Alcoa's businesses as a single solution to customers.

Alcoa Settles

KXAN-TV, TX 04/09/03 - 5:01 pm

After years of accusations, aluminum giant Alcoa has reached a multi-million dollar settlement with citizens' groups in Central Texas and the federal government.

The Environmental Protection Agency found Alcoa's plant in Rockdale has released millions of tons of air pollution and must now pay for it.

"This is a great outcome. It insures cleaner air for Central Texas," Billie Woods with Neighbors For Neighbors said.

The company that the Texas Commission on Environmental Quality called the biggest polluter in Texas has agreed to make some big changes to its aluminum-making plant in Rockdale.

The EPA found Alcoa illegally released more than one million tons of air pollution from that plant in the last two decades.

Alcoa must pay the U.S. Treasury $1.5 million and spend another $2.5 million on two environmental projects in Central Texas.

It will also have to spend millions of dollars more on one of three pollution control options -- install new equipment, build new units or shut down existing ones.

"Our primary focus was getting the cleaner air to Central Texas as soon as possible," Paul Sarahan with TCEQ said.

Alcoa must reduce sulfur dioxide emissions by 95 percent, nitrogen oxide by 90 percent.

Alcoa says it agrees to the obligations in its commitment to improve the environment and to avoid the costs and uncertainties of the litigation process.

Neighbors For Neighbors, a citizens group from Bastrop County, helped win this victory for local residents by first bringing the violations to the attention of the EPA and the TCEQ.

"We didn't start out looking for this but it came to us and it fell in our lap because of the research we were doing and it paid off. We've gotten some reductions in air pollutions. People will literally be able to breathe a little easier, and that's a good thing," Woods said.

Alcoa is required to immediately reduce its emissions at the Rockdale Smelter. All its reductions and changes must be made by 2007.

The citizen's groups say they aren't done yet.

They are still working to stop Alcoa from strip-mining another 16,000 acres or so at its proposed new plant in Lee and Bastrop counties.

Commonwealth forms alliance with Wise Alloys

Louisville Business First, KY

Commonwealth Industries Inc. (Nasdaq: CMIN) and Wise Alloys LLC of Muscle Shoals, Ala., have agreed to a five-year strategic alliance under which the companies will market Commonwealth Aluminum-branded, wide-width coil products.

Wise Alloys will manufacture the line of products, which will be marketed to manufacturers in several industries, according to a news release. The aluminum coils will be available in widths between 72 inches and 108 inches.

Terms of the agreement were not disclosed.

Commonwealth Industries, based in Louisville, manufactures aluminum sheet metal for use in the transportation, construction and consumer durables markets.

SUAL, French Giant in $2.1Bln Komi Venture

Moscow Times, Russia Thursday, Apr. 10, 2003. Page 5

No. 2 aluminum producer SUAL plans to set up a joint venture with French metals giant Pechiney SA to build a $2.1 billion aluminum facility in the northern Komi republic, SUAL said Wednesday.

SUAL is due to keep a controlling stake in the project, while Pechiney affiliate Aluminum Pechiney may buy a stake of 35 percent to 40 percent, a SUAL statement said.

It said the two companies had signed a cooperation agreement for their Komi Aluminum project in a region where SUAL controls the Sredni Timan bauxite deposit which has proven reserves of 250 million metric tons. SUAL's Timan railroad will be used to provide transportation infrastructure for the project.

Bauxite is the raw material used to make alumina, an intermediate product that is then smelted to make aluminum.

The $2.1 billion project would include the construction of a refinery for alumina, with an annual capacity of 1.4 million tons. Some of that alumina could in turn be processed by the smelter the venture plans to build, which would be capable of handling up to 500,000 tons per year.

Construction will begin by the end of the year, the companies said.

SUAL is Russia's leading alumina producer and the seventh largest in the world. The SUAL holding encompasses SUAL and 21 subsidiaries, which together last year produced some 2 million tons of alumina and 865,000 tons of primary aluminum.

This is SUAL's second venture with a foreign partner this year. It announced in January that it planned to form a new international mining company, in partnership with Fleming Family and Partners, a private group owned by the Scottish Fleming banking dynasty.

Pechiney S.Africa smelter moves step closer

Planet Ark, NY SOUTH AFRICA: April 10, 2003

JOHANNESBURG - French aluminium producer Pechiney (PECH.PA) has stepped closer to building a smelter near South Africa's coastal resort of Port Elizabeth with environmental clearance and a deal on power supply, officials said.

The owners of the industrial park where the Pechiney (PECH.PA) smelter will be constructed told Reuters a study had found that the smelter's impact on the environment could be managed.

"Major hurdles have been cleared," said Coega Development Corporation spokeswoman Vuyelwa Vika. "(Power utility) Eskom had to commit to upgrade the electricity supply to the region."

Pechiney (PECH.PA) 's agreement with Eskom for an energy supply contract lasting several years is considered a significant step in the process of establishing the aluminium smelter in Coega, which is located just 20 km (13 miles) from Port Elizabeth.

The power deal was also key to further negotiations with the government of South Africa, potential partners and local communities before a final go-ahead for the smelter.

The smelter will use Pechiney (PECH.PA) 's latest AP50 technology and produce around 460,000 tonnes of primary aluminium per year.

AP50 technology allows lower capital expenditure, quicker construction, fewer emissions and higher productivity than earlier generations of primary aluminium smelters.

Pechiney (PECH.PA) also cleared the last major legislative hurdle for the project after the ministry of environmental affairs and tourism entered its so-called record of decision, Vuyelwa said, but gave no indication on when that was done.

The record of decision serves as the government's all-clear signal that a capital investment can go ahead in South Africa.

"Since then, Pechiney (PECH.PA) has awarded a 6.0 billion rand ($742.8 million) contract for general construction and management of the smelter in the Coega IDZ to specialist construction firms Technip-Coflexip of France and Bateman of South Africa," Vika said.

"Both Technip-Coflexip and Bateman will be investing large resources into preparing for construction at the beginning of 2004," said Vika, who, however, added that the start of construction was subject to all finance being in place.

The total investment cost of the aluminium project will be approximately $2.094 billion, according to an economic impact report conducted on behalf of Pechiney (PECH.PA). Of this, $1.042 billion will constitute capital costs.

Story by Manoah Esipisu

Hillside enough for BHP Billiton

Independent Online, South Africa - Apr 8, 2003

By Sherilee Bridge

Johannesburg - Aside from its $449 million Hillside expansion, BHP Billiton had no plans to increase its aluminium capacity, the world's largest resources group said yesterday.

Speaking after the casting of the first aluminium at its expanded Mozal aluminium smelter in Mozambique, the company was being cautious as aluminium producers deliver into a market that has an estimated two-year overhang of aluminium supply, mostly on sharply higher Chinese exports.

JP Morgan said aluminium demand had increased by just 3.6 percent in 2002 after the debilitating 7.3 percent year-on-year slump witnessed in 2001.

"In a time of considerable market surplus, the aluminium market has had to contend with a convoy of future capacity expansion plans, not just by China but by many western producers," the merchant bank said.

The $860 million Mozal aluminium smelter expansion, which doubles the facility's capacity to 506 000 tons a year, was the first project announced by the merged group after BHP and Billiton joined forces two years ago.

Partnered by the government of Mozambique, the Industrial Development Corporation and Japan's Mitsubishi Corporation, BHP Billiton picked up almost half the project's costs.

The casting of the first aluminium started the transition phase from construction to production, with full output capacity expected to be reached in the fourth quarter, almost in tandem with the first metal from Hillside's expansion.

The Hillside expansion involves the addition of a third smelter and will increase output by 25 percent, or 132 000 tons a year, by completion in the middle of next year

.

"The Mozal expansion project, like BHP Billiton's other southern African aluminium smelter projects before it, has surpassed both its time and financial targets," said Mike Salamon, an executive director and president of aluminium at BHP Billiton.

Mozal has had a marked affect on Mozambique. BHP Billiton estimated last year that Mozal had helped grow the Mozambican economy by $400 million a year and would add another $400 million once Mozal 2 was fully operational.

Mozambique's AIM news agency reported last July that the country's exports to the European Union (EU) more than tripled in 2001, "thanks almost exclusively to the Mozal aluminium smelter on the outskirts of Maputo".

It said aluminium accounted for 73.7 percent of Mozambique's exports to the EU the year before last.

BHP Billiton said 68 percent of the 5 000 construction employees on site at the peak of activity were Mozambican and over 60 Mozambican companies had directly participated in the project, with total local spend now close to $80 million.

But while BHP Billiton was previously open to considering further greenfields projects, Michael Campbell, the vice-president of investor and media relations at BHP Billiton, said no other projects were on the horizon for now.

He said the group had decided long ago not to invest in Coega, the still-to-be-developed port and industrial development zone in the Eastern Cape, where Pechiney is considering building a $20 billion smelter.

China plans new aluminum conglomerate

EastDay.com, China 4/10/03

China plans to set up a new aluminum manufacturing conglomerate by merging dozens of small producers under the wing of the country's largest producer, a move that should provide cheaper access to imported raw materials.

Aluminum Corp of China, the country's largest aluminum and alumina producer, is arranging for the establishment of the new group.

Sixty aluminum producers across the country, which account for 70 percent of China's production capacity, have applied to be members of the group, according to Zhang Yi, spokesman for Aluminum Corp.

"The new group will take a loose form in management of its subsidiaries. They have no relationship in assets with us," said Zhang, whose company will form the core of the new group.

Zhang declined to give a timetable for the launch of the new group.

Aluminum Corp of China, the parent of the Hong Kong-listed Aluminum Corp of China Ltd, or Chalco, has a domestic monopoly over alumina, the major raw material for aluminum. The company's production accounts for about one fourth of the country's total.

China became the world's largest aluminum producer in 2001 as rebounding prices triggered rapid expansion in production.

The country produced 4.3 million tons of aluminum last year, doubling its output from 1999, which led to a glut in the domestic market.

However, the country is still hungry for the raw material to satisfy rapid growth in aluminum production.

As the sole producer of alumina, Aluminum Corp of China can only satisfy 50 per-cent of domestic demand.

"Small producers are eager to join the conglomerate now partly because Alum-inum Corp of China is offer-ing cheaper material than its foreign rivals," said Sun Zhaohui, an industry anal-yst. "But when the inter-national prices of alumina run lower than that from the Aluminum Corp of China, the metal companies will probably opt for imported sources," said Sun.

Molten metal level measurement

LMI Technologies AB will introduce a 2D digital imaging triangulation laser sensor for level measurement of molten metal in the aluminum industry at the foundry trade show GIFA 2003, June 16-21, in Germany.

Available later this year, the 2D technology makes it possible to see through smoke and steam by using advanced image processing.

The company will also exhibit other laser sensor technology and supporting hardware solutions such as actuators and overpour protection equipment designed to ensure consistent pouring level, reduced spillage and enhanced quality and consistency.

At GIFA, LMI Technologies will also be celebrating its 10th anniversary in the development of aluminum molten metal level control utilising laser sensors. During this era, LMI Technologies has sold more than 450 sensors to major aluminum installations worldwide.

In addition to the new 2D laser sensor, LMI Technologies will show its Selcom brand SLS 5000 laser sensor that is specifically designed for molten metal level measurement and other non-ferrous applications.

Along with LMI laser technology, two actuators will be displayed at the show. The Selcom brand Pin Position Actuator for level and flow rate control of molten aluminum in launders and moulds and the Tap Out Actuator for flow rate control from gravity (stationary) furnaces.

LMI Technologies also will exhibit a long range SLS 5000 sensor for foundry well level measurement.

All products are designed to control level and flow rate of molten aluminum on a continuous basis, ensuring enhanced quality, consistency and uniformity, while also improving safety in these harsh working conditions.

The Tap Out Actuator is designed to continuously control the rate of flow of molten metal by controlling the control rod in furnace tap hole. By controlling the launder level or flow rate, metal oscillation during casting is reduced along with metal tension and cracking.

Developed for heavy-duty work, the Tap Out Actuator has a stroke of 100mm - a resolution better than 0.4mm and a force exceeding 1kN.

In contrast, the Pin Position Actuator regulates the flow of metal level in DC moulds and head boxes for consistency, uniformity and increased efficiency. It can also be used in steps in launders before billet tables where demands on the metal level of the casting table are especially tight.

The Pin Position Actuator has a stroke of 50mm and a resolution exceeding 0.2mm. The normal operating position during casting is from 8 to 10mm.

Information will also be available on an Overpour Protection Device to control level flow for safety and control during pouring.

LMI Technologies +46 31 336 2542, http://www.dialinfolink.com.au/articles/c2/0c015bc2.asp

10 April 2003

China's new aluminum group likely for price control

Reuters, UK - Thu April 10, 2003 05:05 PM ET

NEW YORK, April 10 (Reuters) - A giant aluminum group announced last week in an effort to make China's aluminum industry more competitive, is likely intended to stabilize alumina prices and raise the aluminum price, Merrill Lynch said in a preliminary research report released on Thursday.

While Merrill's report said it is seeking more details, and a response from Chalco , the country's top alumina maker, at this point it doubts Chalco will invest any capital in the group.

"We suspect it is more in the nature of an association or something a little stronger, but with no ownership changes," Merrill said.

The China Aluminum Group announced last Friday that it would gather more than 60 firms will control more than 70 percent of China's primary aluminum production capacity and almost all of its alumina output.

"Reading between the lines on very limited information, the focus of this group appears to be to increase smelter margins by stabilizing alumina prices (perhaps metal linked contracts, elimination of traders), lower logistics costs, and raising the aluminum price," the report said.

To raise aluminum prices would require supplied discipline or a cartel structure in China to raise the Chinese aluminum price above that in the West, while dumping surplus aluminum on the market at a discount, it said.

"This would be in contravention of WTO, unsustainable and unlikely. Limiting metal exports to the West is the only practicable way of improving margin materially," it added.

Merrill said it remains concerned about the near-term strength of the aluminum price given its view of world growth, "and this news is not sufficient to cause us to change."

Following up on a Reuters story dated April 4, the Merrill Lynch report cited other sources that said more than 60 companies met on March 28 to discuss strategies to improve the Chinese aluminum industry's competitiveness.

The group identified the main weaknesses of China's aluminum industry's as its highly fragmented and small scale nature; its poor technology and product mix; its high dependence on foreign raw materials and end markets; and high power prices.

The group concluded that the non-competitive aluminum industry structure in China has led to artificially boosted raw material prices and has lowered the aluminum export price.

One of the initiator's of the group is Chinalco, parent of Chalco. Among the benefits of forming the group expressed by its chairman were improving communication and coordination among the upstream and downstream players and controlling price of import alumina, aluminum and downstream aluminum products as well as reducing market volatility.

The group will be officially formed by the end of April.

Capral withdraws tender for Sydney facility

Australian Financial Review, Australia 4/10/03

Capral Aluminium has withdrawn an application to develop a world-class $120 million extrusion facility at Smeaton Grange in south-west Sydney. Capral managing director Greg L'Estrange said delays in the approval process had disadvantaged the NSW proposal compared with two other attractive options being considered by the company.

Balco blooms after privatisation

The Hindu, India 4/10/03 By Our Special Correspondent

BANGALORE APRIL 10. The erstwhile public sector aluminium producer, Balco, now a division of the Sterlite group, seems to have blossomed after privatisation. According to a company release, during 2002-03 , Balco has reported the best ever production since 1987 of alumina hydrate at 1.95 lakh tonnes, aluminium salable metal at 95,354 tonnes and properzi rods at 47,425 tonnes.
The sale of metal (including consignment) during the last year was 99,520 tonnes, an all time high. With alumina and aluminium prices remaining more or less firm, Balco looks forward to a good performance in 2003-04

Foil Rolling Mill to invest 50-55 mln rbl this year.

www.akm.ru Analytical Information Agency, Russia 11/04/2003

Foil Rolling Mill (Tsvetmetservice Works) will invest 50-55 mln rbl in 2003, the company said.

Such investment amount will enable the mill to raise production to 14,000-14,200 tons this year and to widen the export share to 30%.

Foil Rolling Mill is the only production enterprise in the European Russia to make aluminum foil, stripes, sheets and other products from aluminum and its alloys. It's the world's first in rondel production, second in foil production and forth in aluminum rolled metal.

"AK&M", 11/04/2003 12:00

Alcoa chooses long-term view

By Lou Ransom

TPittsburgh Tribune Review, PA Saturday, April 12, 2003

Alcoa Inc. Chairman Alain Belda told the company's shareholders Friday that despite cost-cutting moves, including freezing executive pay, the company experienced a 10 percent sales decline and the company's stock has dropped 45 percent in the last year, in a sluggish economy.

"We have had to make some of the most difficult decisions management has to make, that of letting go our people," Belda said at the Alcoa Inc. annual shareholders meeting.

The work force was trimmed 2,000 to 127,000 last year.

Belda told the shareholders at the Westin Convention Center Hotel in downtown Pittsburgh that the 115-year-old company will take the long-term view, and weather the short-term bad environment. He said Alcoa will continue to expand its global footprint in China, South Korea and Canada.

ALBA apoints Alstom Power as the EPC contractor

AME Info, United Arab Emirates 4/112/03

Aluminium Bahrain [ALBA] yesterday formally appointed Alstom Power as their Engineering, Procurement and Construction [EPC] Contractor for the power-station portion of the Line 5 Project.

The $ 330M Line 5 power station project is part of the US$ 1.7 billion Line 5 expansion which is expected to be completed by February 2005.

A letter of acceptance was signed between the two parties yesterday and work on finalizing the agreement will start immediately. Under this agreement, Alstom Power will manage the various contracts and procurements of the Line 5 power station to meet the programme and budget targets agreed between the two parties.

Commenting on the award, His Excellency Shaikh Isa bin Ali Al Khalifa, Minister of Oil and Chairman of Alba said: “We are pleased to see that the award of the power station part of the Line 5 Project is proceeding according to schedule and within the assigned budget. This project has a large-scale impact on the economy of Bahrain and will ensure that ALBA continues to make a substantial contribution to the national income for many years to come.”

The appointment of Alstom Power as the project's EPC contractor follows a careful review and a transparent assessment of the potential power-station bidders with regards to their technical and economic capabilities.

“The bidding process for the power station contract involved two stages,” said the Alba Line 5 General Manager, Niall O'Byrne. “In the first stage, a Specification Document was prepared jointly by Alba and the project consultant, Mott MacDonald, to detail the power station's specific requirements. The consultants prepared a list of potential bidders based on other, similar projects that were recently implemented worldwide. The pre-qualified bidders were assessed by the consultant with regards to their technical and economic capabilities for executing the project within the projected cost and within the specified time frame. Each company's interest in bidding for the project was also assessed,” said O'Byrne.

“After the approval of the Alba Management team, the Specification Document list was then issued to five Original Equipment manufacturers (OEMs) and three Engineering Procurement Contractors (EPCs),” said O'Byrne.

“During the tendering period, four of the organizations approached advised us that they would not be submitting tenders for the project. Only Alstom Power, Siemens Power Generation, Bechtel Power Corporation and Hyundai Heavy Industries Co. Ltd submitted their tenders for the project,” said O'Byrne.

“In the second stage, the tenders were reviewed by both Alba and the consultant's engineers on a number of criteria including compliance to the specification, plant configuration, plant layout, completion dates, technical deviations, capital cost, operational costs, spares costs, and training costs as well as local component in the project. The financial status of bidding companies was also considered,” said O'Byrne.

“The evaluation process took into consideration the capital costs, the operating costs and the efficiency of the plant over its projected 25 year life span and Alstom Power was ultimately awarded the project based on the overall cost benefits to Alba,” said O'Byrne.

Alba - Aluminium Bahrain B.S.C (c) - is a 520,000 tonnes per annum aluminium smelter. As well as its reduction lines and casthouses, the company has a dedicated carbon department and a 1500MW power plant. A 450,000 tonnes per annum coke calcining plant is also in operation at the company's marine terminal. The company was officially opened in 1971 and its shareholders today are the Government of Bahrain (77%), SABIC Industrial Investments (20%) and Breton Investments (3%). The entire plant operates to the Environmental Management System standard ISO14001 and the Casthouses and Marketing are also operating to the ISO 9002 Quality Management System. The company has won a number of awards including the inaugural Shaikh Khalifa bin Salman Al Khalifa Award for Industrial Excellence, the International Millennium Business Award for Environmental Achievement and a GCC-wide award for Human Resources Development and nationalisation of the workforce.

ALBA's Line 5 Expansion, due for completion in February 2005 will expand ALBA's annual production by a further 307,000 tonnes per annum, making it the largest smelter in the world outside of eastern Europe. At a total cost of US $ 1.7 billion, the expansion will create an estimated 500 jobs and will include a new power station, carbon, casthouse and other facilities

New RusAl Smelter?

Moscow Times, Russia Monday, Apr. 14, 2003.

TOMSK, Western Siberia (Reuters) -- Russian Aluminum, the world's No. 2 primary aluminum producer, may start building a new aluminum smelter in the east Siberian Irkutsk region in 2004, the region's governor said Friday.

Boris Govorin said RusAl and Alyukom-Invest, a firm building a smelter near the town of Taishet, agreed to jointly build the smelter, which will have an annual capacity of 500,000 tons of aluminum per year.

"An agreement has basically been reached, and currently technical and commercial details of the deal are being discussed," Govorin said. "There will be a single plant near Taishet with a capacity of 500,000 metric tons."

Alyukom-Invest, a firm owned by former managers of Bratsk, the country's biggest aluminum smelter, now part of RusAl, started in 2000 a project to build a 250,000 tons per year aluminum smelter in the energy-rich region.

Capral to build extrusion plant at Ipswich

Dial Infolink Manufacturing, Australia 14 Apr 2003

Capral Aluminium has decided to locate its controversial new $120m extrusion facility at Ipswich, west of Brisbane.

The facility, to cut and shape aluminium into finished products, has been plagued by community concern in both New South Wales and Queensland - the two main possible development sites.

The Bremer Business Park site - currently a greenfield paddock - was ultimately chose for its easy access to major transport routes to service its domestic customers.

It is anticipated earthworks will be completed by May, with construction completed by December ahead of full production in the March quarter of 2004.

Capral managing director Greg L'Estrange said it had been a longer process than first anticipated but the company was looking forward to setting up in Queensland.

"In the near term the move will be a drain on us as we won't have the efficiencies and we have transitions issues to get through but beyond that it is a significant improvement over our existing operations," he said.

In NSW, Capral was forced to dump its Smeaton Grange site proposal in Sydney because delays in the approval process severely disadvantaged its proposal.

The Smeaton Grange proposal was held up when a local resident action group voiced concerns, prompting the Carr government to delay its approval. The Queensland government however helped entice Capral with payroll tax relief, plus relocation and training expenses.

L'Estrange said the community concerns regarding health risks "had largely been dealt with" given the site "complied with all health regulations".

Up to 330 jobs will eventually be created over four years, with the majority of employees transferring from Capral's existing Eagle Farm extrusion plant in Brisbane, which will be closed.

Capral's extrusion operations at Minto and Yennora in NSW will be absorbed into the new Ipswich facility and the company's existing plant at Campbellfield, Victoria.

The Yennora plant, in Sydney's south-west, will become the company's NSW regional hub providing warehousing, cross-dock facilities and value-adding services.

The company was yet to disclose the cost of its plant closures, or expecting cost savings from the consolidation.

The new extrusion facility, which will include an initial four presses, two new vertical paintlines, anodising, packaging and warehousing functions, will improve Capral's capacity and ability to service its eastern seaboard customers.

L’Estrange said the move was a significant step forward for the company in its plan to re-engineer the business to ensure it could compete with rising numbers of imported products.

"Ipswich was chosen over Smeaton Grange in Camden, south-west Sydney, due to the significant time advantage in proceeding with construction, as well as the superior quality of the area's local infrastructure," he said.

Capral currently owns five aluminium extrusion plants around the country and is 31% owned by Sir Ron Brierley's Guinness Peat Group.

Hydro Aluminium to s German oxide plant stake

Forbes Reuters, 04.14.03, 10:23 AM ET

HAMBURG, April 14 (Reuters) - Hydro Aluminium, a unit of Norwegian group Norsk Hydro ASA <NHY.OL>, told Reuters on Monday it plans to sell its 50 percent shareholding in Aluminium Oxid Stade, aGerman plant producing aluminium oxides.

Aluminium Oxid Stade makes about 800,000 tonnes of aluminium oxides annually. The other 50 percent is held by private firm DADCO Alumina & Chemicals Ltd.

The stake will be sold as part of a programme to dispose of non-core operations acquired following Norsk Hydro's purchase of Germany's VAW Aluminium in early 2002, said Hydro Aluminium spokesman Michael Peter Steffen.

As a substantial part of Aluminium Oxide Stade's production is not used in aluminium production, it is being viewed as non-core, Steffen said.

Copyright 2003, Reuters News Service

China Aluminum Profit Falls on Price Drop, Cost Rise (Update3)

By Rob Delaney

Beijing, April 15 (Bloomberg) -- Aluminum Corp. of China, the world's third-largest producer of the metal, said profit fell 12 percent last year as alumina prices dropped and costs rose.

The company, known as Chalco, said net income fell to 1.4 billion yuan ($169 million), or 0.13 yuan a share, from 1.6 billion yuan in 2001. A Bloomberg News survey of five analysts had an average estimate of 1.2 billion yuan. The 2001 figures are pro- forma because the company was formed in February that year.

``The results are no surprise given the decline in prices last year,'' said Lu Yizhen, an analyst with Efund Management Co., which invests in Chinese metal producers. ``We're expecting better results this year because prices rebounded.''

The company said the domestic spot price for alumina, which is processed from the ore bauxite and refined to make aluminum, fell almost 13 percent, brought down by oversupply in early 2002. The cost of goods sold rose 15 percent.

``Global aluminum production capacity continued to grow in 2002, causing excessive growth in inventories on the London Metal Exchange,'' bringing prices lower, Chalco said in a statement. The London Metal Exchange is the world's biggest trading center for industrial metals and has warehouses around the globe.

Chalco's 2002 sales rose to 16.8 billion yuan from 16 billion yuan. The company declared a full-year dividend of 0.045 yuan a share.

Prices Rebound

Prices for aluminum and alumina have risen this year because LME inventories have fallen and domestic smelting capacity expands to meet demand from automakers and builders in China.

Chalco will start construction of an alumina refinery it plans to build with Alcoa Inc., the world's largest maker of the metal, six months earlier than scheduled to meet rising domestic demand, the company statement said.

The project will more than double alumina output at an existing refinery to 850,000 metric tons and double aluminum output at the facility to 380,000 tons.

Chalco raised alumina prices by a third this year because rising aluminum production in China caused shortages starting in the second half of 2002. Prices of aluminum for immediate delivery have risen by a quarter since the start of the year. That's helped boost Chalco's share price by a fifth this year to HK$1.36 at the close of trading yesterday.

Bechtel picked for Maaden plant study

Dubai:Tuesday, April 15, 2003

Riyadh |Reuters | 15-04-2003

Saudi mining firm Maaden said yesterday it had hired U.S. construction giant Bechtel to conduct a 12-month feasibility study for what would be one of the biggest aluminium plants in the Middle East.

Maaden, set up in 1997 with a capital of four billion riyals ($1.1 billion) to oversee the kingdom's mining sector, had already announced plans for a $3.2 billion aluminium project and 4.5 billion riyal ($1.2 billion) phosphate mining operation.

Bechtel will evaluate plans to produce 3.4 million tonnes of bauxite at the Zubeira mine in north Saudi Arabia, a 1.4 million tonne-capacity alumina refinery and 620,000 tonne-capacity aluminium smelter, a Maaden official said.

The smelter will be one of the biggest in the Middle East.

Aluminium Bahrain (Alba) has a plant in Bahrain due to expand to 750,000 tonnes a year by 2005 from 517,000 tonnes at present.

The UAE also has a large smelter, Dubal, which is due to expand to 710,000 tonnes by 2006.

Bechtel, which won the 30 million riyal contract over two other rivals, will also prepare a marketing and environmental study within one year, the official said.

"It's still too early to say how the situation in Iraq will reflect on the aluminium market. But worldwide the requ-irement for aluminium is increasing. There is high demand," he said.

Maaden has said it wants the aluminium and bauxite projects onstream by 2005 or 2006.

Alcan net profit drops after currency exchange, but operating earnings up

ALLAN SWIFT

Ottawa Citizen, Canada , Canadian Press Wednesday, April 16, 2003

MONTREAL (CP) - Aluminum giant Alcan Inc.'s net profit fell sharply in the first quarter as currency translation losses, pension costs and low prices squeezed the Montreal company's finances.

Although Alcan's operating profits rose, net earnings plunged 85 per cent to $13 million US, or four cents a share. The company said the reduction was linked primarily to foreign currency translation as the U.S. dollar weakened against the Canadian dollar and other currencies. There was also a special charge of $29 million US for pension costs.

Since Alcan's major costs are incurred in Canada, Europe and other countries where it makes aluminum, while its revenues are reported in U.S. dollars, the weaker greenback cut heavily into the company's bottom line.

The small first-quarter profit compared with earnings of $86 million US, or 26 cents a share, in the year-before period ended March 31.

Chief executive Travis Engen said the company prefers to focus on operating earnings because currency fluctuations are volatile with the company operating in 38 countries. The currency rates for accounting purposes are taken on the last day of each quarter.

"These adjustments tend to cancel out over time," Engen said in a conference call.

"We've seen in the last couple of years a lot more volatility in some of these exchange rates. We think we've got to cut through it to look at the underlying operating performance."

Besides the currency changes, earnings were hurt by high energy prices, and Alcan had a special pension expense of $29 million to cover pension deficits, with an impact of six cents a share.

Engen said an additional $23 million will be taken in the second quarter, with an impact of four cents a share. But he said bond rating agencies haven't indicated any concerns about Alcan's pension issues.

Excluding currency translation effects and other items, operating earnings climbed to $122 million US, or 38 cents a share, compared with $107 million or 33 cents a year ago and 38 cents a share in the fourth quarter of 2002.

Revenues rose to $3.3 billion, from $2.9 billion a year earlier.

"This is our fourth consecutive quarter of improved operating earnings, year-over-year, despite ongoing economic headwinds," Engen said in a conference call.

"The steps we've taken to increase profitability have kept us on track to build long-term value throughout volatile markets."

Based on an average world aluminum price of $1,335 US per tonne, Alcan (TSX:AL) expects operating earnings, excluding foreign currency effects, will be between 37 and 47 cents a common share in the second quarter.

Engen said the focus for 2003 will continue to be the integration of European packaging company VAW FlexPac, acquired in November for $545 million Cdn.

He said the takeover should close this month, two months ahead of schedule.

Alcan, with $12.5 billion US in revenue last year, is the world's second-biggest aluminum producer, after Pittsburgh-based Alcoa. The Montreal company employs about 48,000 people and has plants in 38 countries. In Canada, Alcan's major operations are in Quebec and British Columbia.

Alcan shares rose 11 cents to $43.20 Cdn in trading Wednesday on the Toronto Stock Exchange.

© Copyright 2003 The Canadian Press

Balaton's Continental Resources (USA), LTD. Is Ready to Initiate Bauxite Base Line Study

Stockwatch (subscription) 2003-04-16 09:48 ET - News Release

HUTCHINSON, Kan., April 16 /PRNewswire-FirstCall/ -- Balaton Power Inc. (BULLETIN BOARD: BPWRF) is pleased to report Continental Resources (USA), Ltd. (wholly owned by Balaton) is planning to initiate a Base Line Study on the Gandhamardan Bauxite Deposit in the Balangir area of eastern India. The Gandhamardan Deposit consists of high-grade bauxite (45.75% Al2O3) in excess of 200 million tones. This deposit is the second largest bauxite deposit in Asia (Al2O3, aluminum, is made from bauxite). Continental holds 50% of the rights to this deposit.

The Base Line Study is a work program that mainly consists of environmental work. Key personnel and contractors will be made available for summer 2003 to start the program. It is expected that the contractors will concentrate on soil, medicinal plants and water quality.

Along with the Gandhamardan Project, Management will report on other resource projects in the near future.

Management is looking forward to implementing its work program for the Base Line Study on the Gandhamardan Deposit as well as reporting on other resource opportunities that the Company may acquire in the near future.

Except for historical information contained herein, the statements in this release are forward-looking statements that are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties that may cause the companies' actual results in future periods to differ materially from forecasted results. Such risks and uncertainties include, but are not limited to, market conditions, competitive factors, the ability to successfully complete additional financings and other risks.

Balaton Power Inc.

CONTACT: Kevin McKnight of KTM Consulting Inc, +1-516-561-6620,

Aluminum workers decry proposed power rate increase

Oregonian, OR 04/17/03

OLYMPIA -- Several hundred aluminum workers and their supporters rallied Wednesday in Olympia, then headed to Portland to protest the Bonneville Power Administration's proposed 16 percent rate increases for wholesale power customers.

"This is a make-or-break situation," said Tom Barrett, a technical adviser who has worked for 28 years at the Alcoa plant in Ferndale. The plant shut down temporarily during the energy crunch three years ago; if BPA raises rates, it could close for good.

"I think we can stay afloat, as long as there isn't an increase," said David Boyer, operations manager of the Ferndale plant.

Barrett and Boyer traveled to Olympia, where they got support from state legislators and the governor at a rally on the Capitol campus lawn.

BPA officials say the proposed rate increase is a last resort.

"It's not a happy situation," said BPA press officer Bill Murlin. "We're losing money, too. I know it's a vicious circle. We don't like it either."

Murlin said BPA lost $300 million in each of the previous two years and expects to lose another $300 million this year. The agency has refinanced its bond payments, eliminated some fish and wildlife programs and cut about $300 million in internal costs, Murlin said -- but it's not enough. BPA has obligations, including a big debt to the U.S. Treasury, that it must meet, Murlin said.

"I don't know that we have any particularly light-at-the-end-of-the-tunnel thing to say to aluminum workers," Murlin said.

Washington state lawmakers are pushing BPA to search for more options. The House and Senate unanimously approved a joint memorial asking BPA to avoid the rate increase.

"This is a critical issue," said Rep. Deb Wallace, D-Vancouver.

The Northwest's traditionally low power rates have made the region a center for aluminum production, which consumes enormous amounts of electricity.

Sen. Don Benton, R-Vancouver, said he spoke with BPA Administrator Steve Wright by phone Wednesday. Benton told the crowd at the rally that Wright said he's hopeful the rate increase can be avoided.

"We're struggling to keep our economy going in this state," Benton said. "My community lost an aluminum plant last year -- when you lose those jobs, it has a terrible effect on the whole community."

Swiss co. wins Kazakhstan alumina producer tender

Interfax, Kazakhstan 4/17/03

Almaty. (Interfax) - Switzerland's Corica AG won Tuesday's investment tender for 31.76% of the shares in Aluminum of Kazakhstan, the company that controls Kazakhstan's alumina and bauxite industry.

The tender results were unveiled to reporters in Astana on Wednesday morning.

Corica AG bid 3.191 billion tenge ($21 million) for the shares).

The company was registered in Switzerland in February 2002 and is a member of the J&W Holding AG Group.

The Kazakh Finance Ministry's Committee for State Property and Privatization said in a press release that Corica AG bid against one other company, Wolf International S.A., which is registered in Luxembourg. The committee said Corica's bid was better prepared and economically more suitable for Kazakhstan.

The winner is required to organize the construction of a 240,000 tpy aluminum smelter in the Pavlodar region. The first, 60,000 tpy stage, must be in operation by the end of 2007. And the winner must buy alumina and electricity from local producers.

The money the tender winner spends on the shares and on the construction of the smelter will not be refunded it the aforementioned conditions are not met.

Corica AG estimates it will cost $850 million to build the smelter.

The exchange rate was 152 tenge/$1 on April 15.

New Bill aims at helping Noranda

Skieston Standard Democrat, MO 04/18/03

Kyle Schlosser

JEFFERSON CITY - Senator Peter Kinder of Cape Girardeau has introduced bill to the Missouri Senate in an effort to help Noranda Aluminum’s smelting plant in New Madrid.

Noranda employs close to 1,100 people in the Southeast Missouri, making it a major economic player in the region. Also Noranda is the No. 1 user of electricity in Missouri. The second largest energy consumer in the state, Anheuser-Busch, uses nearly one-third the amount of energy Noranda does.

The reason for this is the large amount of energy it takes to smelt aluminum and Noranda is continuously using energy due to its around-the-clock schedule for workers. Company officials have indicated schedule has taken a toll on the local energy provider and is forcing the company to rethink the continued usage of the New Madrid Plant.

Threatening nearly 1,100 jobs in the area, there have been rumors of Noranda having to possibly shutdown at New Madrid. Senate Bill 555 allows "certain aluminum smelting facilities to contract for the purchase of electric power." They will be able to go outside of the jurisdiction of the Missouri Public Service Commission regarding rates.

This action by Kinder will hopefully give Noranda a much needed energy boost and help alleviate the current electrical burden it is going through.

Senate Bill 555 passed the Missouri Senate easily and will more than likely face little opposition in the House as it was presented to the floor of the Missouri House on Thursday

Struggle with Alcan leaves northwest B.C. worried about future

DAMIAN INWOOD CanWest News Service

Montreal Gazette, Canada Friday, April 18, 2003

A power struggle with Montreal-based aluminum giant Alcan Inc. over its sale of electricity is generating noisy opposition from community activists and civic leaders in northwest B.C.

Kitimat Mayor Richard Wozney claims Alcan is breaking a 1950 contract with the provincial government by cutting down the smelting capacity of the local plant and selling the power normally used in that operation for profit.

The smelter is currently running at 85-per-cent capacity. But Wozney says it should be running at full capacity. Alcan is accused of deliberately keeping the capacity down so it can sell more power at profit.

But Alcan has said there's not enough market demand for aluminum, used in the packaging and transportation industry, to keep the smelter running at full capacity.

Yesterday, Alcan official Joseph Singerman was reluctant to discuss the controversy.

"We're not going to get into anything that would jeopardize the harmonious talks that we're having," he said, in an interview from Montreal.

"We're concerned with the recent developments in the campaign against our operations and we don't believe it's conducive for a healthy business environment at this time."

The 1950 deal says Alcan can sell power "in order that the promotion and development of the district and of other industries in the vicinity of the works may be encouraged."

Wozney says that over the past two years, Alcan has doubled up power sales without ramping up the smelter to full capacity and "shows no sign of relenting."

"Our position is that the 1950 agreement that gave Alcan exclusive rights to use the waters of the nearby Nechako River was for the purpose of building and maintaining a viable aluminum smelting business," said Ross Slezak, a former Alcan union president who lives in Terrace.

"Alcan has focused on what they deem to be their right to sell power," Slezak said.

"It's caused real uncertainty in Terrace and Kitimat, creating a very unstable situation as far as housing prices and economic uncertainty are concerned."

This is a threat to 1,800 Alcan jobs and to the economy of the city's 11,000 residents, he said.

The city is working on a court case that could be filed this summer to determine whether Alcan is allowed to sell power under existing agreements.

Meanwhile, residents in Kitimat and Terrace have formed a group called Save the Northwest and have collected more than 3,000 signatures on a petition calling on the B.C. government to enforce the agreement.

While the controversy has its roots in the 1950 agreement, it was a deal reached in 1997 with the NDP government of Glen Clark that brought matters to a head.

The Clark government signed away the water rights to Alcan in perpetuity as part of the deal reached to settle a threatened lawsuit after the NDP scrapped the Kemano Completion Project.

In return, Alcan pledged to build a $1.5-billion smelter, or expand the capacity of the existing smelter to almost double the current 270,000 metric tonnes it produces annually.

Critics say that promise has not been fulfilled.

Meanwhile, Alcan has also set up a power-brokerage company in California, which gives it a licence to sell power throughout the U.S. West Coast.

"In 2001, the reservoir was low and Alcan shut down 40 per cent of production and continued to make power sales to B.C. Hydro," said Ray Brady, Kitimat organizer of Save the Northwest. "This is the first time in 50 years that Alcan cut production in favour of power sales. That's what kicked Kitimat city council and concerned citizens into gear."

B.C.'s attorney-general, Geoff Plant, wrote to B.C. Liberal MLA Roger Harris in February saying that "nothing in the legislation or the agreements precludes Alcan's sale of electricity, nor obliges it to keep the smelter operating at full capacity at all times."

Plant added that "further litigation with Alcan is neither warranted nor desirable" as the company wouldn't release B.C. from its claims over the Kemano Completion Project lawsuit until Jan. 1, 2005.

Plant couldn't be reached for comment.

A. J. Edmond Company acquires the Primary Aluminum Materials Laboratory (PAML)

A. J. Edmond Company is very happy to announce that as of April 15, 2003 we have acquired the Primary Aluminum Materials Laboratory (PAML) in Mead, Washington from Kaiser Aluminum. The facility, now referred to as A. J. Edmond Company Materials Research Laboratory (MRL), specializes in anode and cathode materials and is ready to meet your testing needs.

A. J. Edmond’s Materials Research Laboratory provides a full range of carbon technology services to customers around the world. These services include physical and chemical testing of anode and cathode materials, evaluation of changes in raw materials or processing parameters, product characterizations, optimizations and problem solving.

A. J. Edmond’s Materials Research Laboratory maintains complete physical testing capabilities to characterize green and baked anode and cathode materials including bottom blocks, sidewalls, bricks and refractories. Anode material can be evaluated for air and carboxy reactivity, permeability, thermal shock, coefficient of thermal expansion, and thermal conductivity. The electrical resistivity, baked density, strength properties, ash and elemental analysis of anodes can also be examined. Cathode carbonaceous bodies can be evaluated for all of the above physical properties as well as sodium expansion/absorption and post-expansion resistance and strength. Unique cathode refractory and insulation materials evaluation capabilities include characterization of thermal and bath resistance properties.

A complete pilot plant, located within the laboratory, is capable of producing small scale carbon bodies for both Soderberg and Prebake technologies using either pressed or vibrated forming methods. These exceptional facilities allow low-risk assessment of contemplated changes in raw materials or processing parameters. Even if major process changes are not anticipated, a pilot plant study can help to optimize carbon quality in your operation. In addition to the unique carbon testing capabilities, the laboratory can examine typical specification properties of coal tar pitch, anthracite, green, and calcined cokes in the raw materials testing laboratory.

Mark Wyborney, formerly with Kaiser Aluminum’s PAML facility, will manage the laboratory. Mark worked with Kaiser for 14 years, 6 years as a process engineer and manager of the green anode mill, and 8 years at PAML. Joining Mark in the lab will be Rob Vincent. Rob’s work history includes 25 years in the aluminum industry in various laboratory and technical roles. The last five years with Kaiser at PAML performing high quality analytical carbon testing work. A. J. Edmond Company has also enlisted the technical support of Ken Ries, an anode specialist; and Dick Jeltsch a cathode specialist to better serve the needs of our customers and clients. Together this team brings a wide range of experience, knowledge, and talent to the growing A. J. Edmond family.

This acquisition will greatly expand the laboratory capabilities of A. J. Edmond Company. We have always been a provider of complete sampling and analytical services for green coke, fluid coke, flexicoke, and calcined coke. With this acquisition, we can now add anode and cathode testing and research capabilities. Enabling A. J. Edmond Company to provide sampling, testing, analytical, and research services covering the entire range of our customers needs.

S Africa sharks French smelter

Daily Telegraph, Australia 22apr03

By Nigel Wilson

FRENCH aluminium giant Pechiney seems set to abandon Australia for the site of its PAS 2005 smelter and locate the plant in South Africa.

The concept of a world-scale plant has been hawked around at least three states and the Northern Territory in the past two years.

It was once promoted as a potential foundation customer for the Sunrise gas project and, as recently as last September, Pechiney was saying Darwin was still in the running. But it is understood the South African Government has indicated it would take equity in the plant if Pechiney located in a new industrial area being developed at the mouth of the Coega River.

South Africa's newest deepwater port, Ngqura, is being developed at the river mouth, 20km east of Port Elizabeth in the Nelson Mandela Metropolitan Municipality.

Reports from South Africa earlier this month said a final decision by Pechiney on building the $US2 billion ($3.3 billion) plant at Coega was expected before November.

Pechiney is negotiating equity partnerships and will then look for debt financing.

South African officials said a Pechiney decision for a go-ahead would give Coega the anchor tenant, which would ensure the 12,000ha industrial area was established.

The PAS 2005 plant has a design capacity of 485,000 tonnes a year and first metal is planned for 2005. The timetable is roughly similar to that for the $3.8 billion Aldoga aluminium smelter planned for Gladstone, Queensland, which aims to produce 560,000 tonnes of metal beginning next year.

Pechiney, the fourth-largest aluminium producer in the world, forecasts the global demand for aluminium will grow by 2.5 per cent a year up until 2010.

Pechiney is the main shareholder in the Tomago smelter in the Hunter Valley, NSW, and holds a 20 per cent stake in Queensland Alumina.

It is understood Pechiney told the Northern Territory Government that South Africa would get the PAS 2005 but Darwin had not been ruled out for a future plant. This is intended to use electricity generated from natural gas, similar to a project Pechiney promoted to Queensland Treasurer Terry Mackenroth in 2001 that would have used the Papua New Guinea-Queensland gas project as the energy supplier.

The Northern Territory site option became less feasible when the Sunrise partners – Woodside, ConocoPhillips, Shell and Osaka Gas – decided last year the domestic market was not a feasible option to develop 8.3 trillion cubic feet of gas in the Greater Sunrise reservoirs.

Anheuser-Busch world's largest recycler of aluminum cans

St. Louis Business Journal, MO 4/21/03

Anheuser-Busch Cos. Inc. said it recycles more than 97 percent of the waste it generates.

In recognition of Earth Day April 22, the said its Anheuser-Busch Recycling Corp. unit is the world's largest recycler of used aluminum beverage containers, recycling 776 million pounds in 2002, or more than 125 percent of the cans its breweries used to package their products. Through modifications in its packaging, the company saved more than 1.3 million pounds of aluminum and 10.5 million pounds of paperboard.

In addition, its Busch Agriculture Resource operations composted more than 619 pounds of farm materials last year.

Finally, the company said its graphics department has implemented using recycled paper for company letterhead, business cards and envelopes, and uses agricultural-based inks, rather than petroleum products.

St. Louis-based Anheuser-Busch Cos. Inc. (NYSE: BUD) is the world's largest brewer, manufactures and recycles aluminum cans and operates theme parks.

Alcan to invest US$190mn in hydro plants in Brazil

04/21/2003 - Source: BNamericas

The Brazilian unit of Canadian aluminum producer Alcan will invest US$190mn to make its Ouro Preto aluminum plant in Minas Gerais state 100% self-sufficient by 2006, Alcan planning, metal trading and energy manager Claudio Campos told BNamericas. Alcan already generates 30MW from six small-scale hydro plants, providing 10% of Ouro Preto's 300MW power requirements.About US$40mn is being spent on three new small-scale hydro plants. Alcan began filling the reservoir at the 10MW Fumaca project on April 11, and plans to begin initial tests within the next two weeks. Commercial operations are scheduled to begin 30 days later. The 6MW Furquim plant is scheduled to begin operations by September and construction of the 14MW Caldeiroes plant will begin later this year.

Alcan also owns a 50% stake in the US$100mn, 140MW Candonga hydro plant together with mining company CVRD. A consortium led by OAS is building the plant, which is scheduled to start operations in November. Alcan and partner Engevix won another concession in July 2002 for two hydro projects, Cacu (65MW) and Barra dos Coqueiros (90MW), scheduled to begin operations in 2006 and 2007, respectively. Mendes Junior is the constructor, and is scheduled to start work in 2005. Until then, Alcan and its partners will be concentrating on securing environmental licensing, he said. Alcan has so far financed projects out of its own resources, but the company is examining outside financing options for the total of US$125mn to be spent on Candonga, he said. Alcan owns 80% of the project, while Engevix owns 20%. Alcan handed back a second concession awarded in July, to build the 60MW Traira 2 plant, after discovering that environmental costs would be higher than originally expected, he said, adding that Alcan had to pay a fine for returning the concession.

The Ouro Preto plant is 60 years old and consequently uses dated technology. Self-generation reduces the power bill, therefore increasing competitiveness, and cuts reliance on third parties for power supplies. During 2001 and 2002, Alcan was forced to switch off 25% of its furnaces to comply with the federal government's nine-month obligatory rationing program, causing significant financial losses, Campos said.

RusAl Appoints Adviser

MOSCOW (Prime-Tass) -- Russian Aluminum has appointed former U.S. Attorney General Dick Thornburgh as an international consultant, RusAl said in a press release Monday.

Thornburgh will advise the company on accessing international markets and meeting world standards of corporate governance, the press release said.

Alcoa Continues Commitment to Sustainability With Release of 2002 Sustainability Report

04/22/2003: Press Release from Alcoa Inc.

(CSRwire) PITTSBURGH, PA - Alcoa (NYSE:AA) marked Earth Day 2003 with the release of its 2002 Sustainability Report, a detailed, data-based review of the company's global, environmental, social and economic performance. The report is available online at www.alcoa.com/lnk/sustainability .

In releasing the report, Alcoa Chairman and CEO, Alain Belda said that it represented another milestone in Alcoa's long tradition of measuring performance against the high standards set by the company and reporting publicly on progress made.

"Truth can be judged by performance, so data and factual information pervade this report," said Belda. "We have presented information that yields meaningful insight into our global operations, where we are making progress and where we are not yet performing to the standards we set for ourselves," he said.

Belda attributed the achievements outlined in the report to the hard work of 127,000 Alcoa employees in 40 countries. "Alcoa's employees are working effectively to drive waste from the value chain, from the natural resources that make our products all the way through the supply chain to the customer. That is how we secure the benefits and reduce the cost for our business, our customers, our communities, and our world. This is how we demonstrate leadership.' he said.

Highlights of the report include:

The best safety performance in Alcoa's history with more than 99% of Alcoa employees recording no lost work days due to injury.

Significant progress in contributing to the fight on climate change with a 22.5% reduction of greenhouse gas emissions from 1990 levels - well beyond the targets outlined at Kyoto.

Reductions in total process water use of 13%, reductions in global sulfur dioxide emissions of 13% and 23% reduction in emissions of nitrogen oxides, all over the past three years.

Community giving - more than $34 million in 2002 alone - and commitment to an innovative global program designed to deliver "More than Money."

Much of the environmental, social, and economic data in the report have been regularly reported in one form or another by Alcoa for decades, but this is the first time that they have been drawn together to provide an integrated view of the company's performance. This report serves as a complementary volume to Alcoa's 2002 Annual Report.

Kitimat riled as Alcan focuses on power sales

Smelter capacity cut, mayor alleges contract broken

The Province Monday, April 21, 2003

Damian Inwood

Alcan has doubled its power sales but maintains its smelter is operating at 86-per-cent capacity.

A power struggle with aluminum giant Alcan over the sale of electricity is generating noisy opposition from activists and civic leaders in northwest B.C.

"All we know is our community is going down the tube and we're not prepared to let that happen," said Kitimat Mayor Richard Wozney. "For some unknown reason, the B.C. government is refusing to put Alcan to the test by saying, 'This is what the contract says. Please abide by the terms of the contract.' "

Wozney said Alcan is breaking the agreement by cutting capacity of the Kitimat smelter in favour of selling power, threatening 1,800 Alcan jobs and the economy of the city of 11,000.

At the heart of the dispute is a 1950 agreement signed by Alcan and the B.C. government. It says Alcan can sell power "in order that the promotion and development of the district and of other industries in the vicinity of the works may be encouraged."

But Wozney said that over the past two years, Alcan has doubled its power sales.

Kitimat is working on a court case that could be filed this summer, asking for a decision on whether Alcan is allowed to sell power under the existing agreement.

Meanwhile, residents in Kitimat and Terrace have formed a group called Save the Northwest and have collected more than 3,000 signatures on a petition calling on the B.C. government to enforce the agreement.

"Our position is that the 1950 agreement that gave Alcan exclusive rights to the Nechako watershed was for the purpose of building and maintaining a viable aluminum smelting business," said Ross Slezak, a former Alcan union president now living in Terrace.

While the controversy has its roots in the 1950 agreement, it was a deal reached in 1997 with the NDP government that brought matters to a head. The NDP signed away water rights to Alcan in perpetuity as part of the deal reached to settle a threatened lawsuit after the NDP scrapped the Kemano Completion Project.

Meanwhile, Alcan has also set up a power brokerage company in California, which gives it a licence to sell power along the U.S. west coast.

"In 2001, the reservoir was low and Alcan shut down 40 per cent of production and continued to make power sales to B.C. Hydro," said Ray Brady, Kitimat organizer of Save the Northwest. "This is the first time in 50 years that Alcan cut production in favour of power sales. That's what kicked Kitimat city council and concerned citizens into gear."

Richard Prokopanko, Alcan's B.C. director of corporate affairs, said Alcan has not laid anyone off due to power sales.

He said that while the threatened lawsuit could stop Alcan selling power, it wouldn't force Alcan to increase capacity at the smelter or build a new one.

He said the smelter is operating at 86-per-cent capacity.

Attorney-General Geoff Plant wrote to Liberal Skeena MLA Roger Harris two months ago acknowledging that nothing in the agreement precludes Alcan's power sales. Litigation "is neither warranted nor desirable" as Alcan won't release B.C. from legal claims over Kemano until 2005.

dinwood@png.canwest.com

© Copyright 2003 The Province

Alcoa mulls cutting aluminum production about 6%, citing energy costs

Canada.com, Canada Canadian Press Wednesday, April 23, 2003

PITTSBURGH (AP) - Alcoa Inc. could cut aluminum production by almost six per cent because of the rising price of energy, the company said Wednesday.

The world's leading aluminum producer will cut 125 jobs at its Intalco smelter in Ferndale, Wash., by June and could release all 700 employees if the Bonneville Power Administration moves ahead with planned price increases, spokesman Kevin Lowery said. The staff reduction could reduce the company's aluminum production by 230,000 tonnes annually.

"The plant in Ferndale is now operating under the highest (energy) prices in its history," Lowery said. "The BPA said it's going to raise rates by 15 per cent on top of that."

Ferndale has a capacity of 170,000 tonnes of aluminum per year, all of which would be taken off line temporarily if the planned price increase goes into effect, Lowery said.

The plant will be closed Sept. 30 "unless there is significant change in the power price or market conditions overall," said Bernt Reitan, president of Alcoa Primary Metals.

"We regret the very real impact this closing will have on the community and the work force, but no aluminum smelter in the world could operate under the burden of the energy costs in the Northwest," Reitan said.

Bonneville Power Administration, the region's federal power marketing agency, has said it may need to increase electricity rates due to financial problems stemming from the western energy crisis in 2001. A decision on a rate increase is not expected until June.

Officials with the power company said numerous factors could influence future energy prices, including mountain snow melt.

Also Wednesday, Alcoa said production at two smelters in Massena, N.Y., will be reduced by 60,000 tonnes annually but no significant reduction of the work force is planned. About 150 jobs will be cut at the company's facility in Rockdale, Tex., though annual production will remain at 264,000 tonnes.

Alcoa announced last month that it was positioning itself for long-term growth by cutting $400 million US in costs in the next year and continuing to move production overseas.

Alcoa has a production capacity of 3.9 million tonnes a year, double its nearest competitor - Canada's Alcan (TSX:AL) - with 55 per cent of that overseas.

The percentage of Alcoa's overseas production is expected to grow. Alcoa announced last month it had received permission to build a $1.1 billion smelter in Iceland and said the company would also spend about $670 million to expand another smelter in Quebec over the next decade.

Earlier this month, Alcoa reported first-quarter net income of $151 million, or 17 cents per share, compared with $218 million, or 26 cents per share during the same period a year ago.

The per-pound price for aluminum on the London Metal Exchange is down almost three cents, compared with the same period last year.

Shares of Alcoa gained three cents to close at $22.71 US on the New York Stock Exchange.

© Copyright 2003 The Canadian Press

Noranda bill on its way to House

Skieston Standard Democrat, MO 04/23/03

JEFFERSON CITY - A bill to assist Noranda Aluminum has passed the Senate and is under consideration in the Missouri House of Representatives.

The bill, which received the Senate approval Friday, would allow the state’s only aluminum reduction plant to purchase power directly from energy producers. The bill, which passed the Senate on a unanimous vote, was sponsored by State Senate Pro Tem Peter Kinder of Cape Girardeau with the assistance of Sen. Bill Foster of Poplar Bluff.

In presenting the bill, Kinder noted Noranda needed flexibility to purchase power because it is by far the single largest user of electricity in the state of Missouri and energy costs account for over one third of Noranda’s total operating costs. Kinder said Noranda’s continuous use of 470 megawatts of power in the aluminum reduction process is more than four times the amount of electricity used by the next largest energy user in the state.

Although the bill as written will not necessarily result in low cost power rates required for the aluminum reduction process, the flexibility gained from this bill will improve the opportunity to purchase affordable power in the future, according to Noranda officials.

“We are pleased that the Missouri Senate approved the proposed legislation,” said Noranda President Steve Heddle. “The Senate and Missouri House bills would take a lot of confusion out of purchasing electricity. Having that flexibility will allow us to at least have more options to purchase the lowers costs energy available and maintain profitable operations into the future.”

Heddle pointed out aluminum plants, such as Noranda, require huge amounts of power to produce their products. “We use the power equivalent of about 470,000 residential homes, so being able to purchase this quantity of power without the requirement of a middleman will improve our flexibility to buy at the lowest cost,” he said. “There are no guarantees in the energy markets going forward but we will at least have a fighting chance if (this bill is) approved by both chambers.” State representatives Lanie Black and Peter Myers are co-sponsoring the House-version of the bill. A House committee is expected to hear testimony to support the bill within the next week. If voted out of committee, the bill would go to the Missouri House of Representatives for a vote.

If approved by both chambers of the Missouri Legislature, the bill would be sent to Gov. Bob Holden for approval. Noranda’s power contract with Associated Electric ends May 31.

Noranda Aluminum employs about 1,100 people at its New Madrid facility. The company produces primary aluminum products which are sold throughout the United States and Mexico. In 2003, the company expects to produce some 547 million pounds of aluminum.

NALCO mulls aluminium smelter in Middle East

REUTERS [ WEDNESDAY, APRIL 23, 2003 05:59:34 PM ]

NEW DELHI: State-owned National Aluminium Company, India's second-largest aluminium maker, said on Wednesday it was in talks to set up a joint venture aluminium smelter in the Middle East.

"We are pursuing setting up a half-million ton smelter in the Middle East, for which we will be supplying alumina," NALCO Chairman C.Venkataramana told reporters on the sidelines of an aluminium conference.

He declined to say where the smelter would be located or who the joint venture partner was.

"If everything works out well, we will be a minority partner in the greenfield project," he said.

NALCO is in the midst of expanding production capacity of its smelter at Angul in Orissa to 345,000 tonnes a year from 230,000 tonnes.

It is likely to be completed by March 2004.

Venkataramana said the company had also submitted a proposal to the government to further raise its smelter capacity by 115,000 tonnes a year and annual alumina capacity to 2.1 million tonnes from 1.575 million tonnes.

In 2001, NALCO raised the capacity of its alumina refinery, located in the mineral-rich town of Damanjodi in Orissa, to 1.575 million tonnes from 800,000 tonnes a year.

NALCO produced 245,000 tonnes of aluminium in 2002/03 (April-March), up from 232,000 tonnes a year earlier.

The company has forecast output of aluminium to reach 290,000 tonnes in the current financial year, and exports to hit 150,000 tonnes.

Last year it had exported 106,000 tonnes of aluminium.

Alumina output in the current year is seen at 1.56 million tonnes, compared with 1.486 million tonnes last year. The company has targeted to export 900,000 tonnes of alumina, down from 1.037 million tonnes in 2002/03.

Indian Utkal alumina project work may begin in '03

Reuters, 04.23.03, 5:45 AM ET

NEW DELHI, April 23 (Reuters) - Indian Aluminium Co (Indal), the country's fourth-largest producer, said on Wednesday that construction work at the $1.0 billion Utkal Alumina project may begin by October or November.

Utkal, which aims to be India's first export-oriented alumina unit, plans to produce 1.5 million tonnes annually by 2007 in the first phase and double the capacity later.

"We have got the environmental clearance, but don't have possession of the site," Indal President and Chief Executive S.K.Tamotia told Reuters.

Last month, the company had had a meeting with the chief minister of the eastern state of Orissa, where the plant is to be situated, Tamotia said. "The government have assured that the land would be handed over in two months."

"By October or November, we should start moving the plant work. The first phase should be completed by 2007," he said.

Indal, a subsidiary of the country's largest aluminium maker, Hindalco Industries <HALC.BO>, plans to have a 55 percent stake in the project, while the world's second-largest aluminium producer, Alcan Inc <AL.TO> (nyse: AL - news - people), would control the rest.

Utkal will produce alumina, an intermediate material in the production of aluminium, using bauxite mined in Orissa.

It expects to get more than 3,000 hectares of land from the Orissa government, which has leased a mine to Utkal with about 180 million tonnes of bauxite reserves.

Tamotia said Indal would be forced to shut its Alupuram aluminium smelter in the southern state of Kerala if there was no settlement with the state government on the power tariff. The plant can produce 14,000 tonnes of aluminium a year.

"We have told the Kerala government that we will shut down the plant from May 1 if they don't roll back an increase in the power tariff," Tamotia said.

The state government had raised the power tariff to 3.35 rupees per unit in October 2002 from 2.85 rupees.

"The government has said that it will take a decision this month itself," he said, adding the company was losing 15 million rupees every month due to the hike.

Tamotia said setting up of Indal's own power plant may take about two and half years.

"We are hopeful that the state government will roll back the tariff hike," he said.

Indal, which accounts for about eight percent of the country's aluminium output, operates another smelter at Hirakud in Orissa, with an annual capacity of 57,200 tonnes.

Copyright 2003, Reuters News Service

High electricity prices cripple aluminum industry

Bellingham Herald, WA 24Apr03

Intalco to lay off 125, plant closure likely

BAD NEWS: Workers' eyes are focused on Alcoa Intalco Works plant manager Dave Boyer, who discusses layoffs during a meeting Wednesday afternoon.

Workers devastated at dismal news

Kari Shaw, The Bellingham Herald

FERNDALE - Alcoa Inc. announced Wednesday that it will lay off 125 workers at the company's aluminum smelter west of Ferndale this year and may shut down the plant in September if a proposed electricity price increase goes into effect.

The Pittsburgh-based company will begin layoffs at the Alcoa Intalco Works plant in the coming weeks. It plans to cut the work force to its 2001 levels, when an energy crisis forced a stoppage.

With nearly 700 employees, the plant is the sixth-largest employer in Whatcom County. It is expected to pay $1.6 million in property taxes to local governments in 2003.

Bonneville Power Administration, the region's federal power marketing agency, has said it may increase electricity rates because of financial problems stemming from the 2001 Western energy crisis. A final decision on a rate increase is not expected until June.

Intalco's power supply agreement with Bonneville expires Sept. 30. Alcoa officials say they will close the plant the next day if the rates jump 15 percent.

"The plant can't survive that kind of increase," said Mike Tanchuk, Alcoa's Northwest regional president.

Reach Kari Shaw at kari.shaw@bellinghamherald.com or call 715-2290.

Alcan CEO sees no need to follow Alcoa in cutting capacity and jobs

Canada.com, Canada Thursday, April 24, 2003

ALLAN SWIFT Canadian Press

MONTREAL (CP) - The chief executive of Alcan Inc. says the company won't have to make capacity and employee cuts like those planned by rival Alcoa Inc. because Alcan produces most of its own energy.

Travis Engen told the annual meeting Thursday the main reason for Alcoa's cuts is the American company's high energy costs. He said the stock market is starting to differentiate Alcan from the rest of the aluminum industry because of its self-generated electricity for power-hungry smelters, as well as for other reasons.

"Production curtailments are coming from high-cost producers who are disadvantaged," Engen said after the meeting.

"Shares are down substantially more for the industry than for Alcan. That's a clear indication we've opened up the gap."

Montreal-based Alcan produces 62 per cent of its energy needs, mostly hydroelectric power.

Engen added that Alcan's diversification into packaging and engineered products, now accounting for 24 per cent of sales, renders it less dependent on fluctuations in the price of aluminum.

That diversity is growing through the acquisition of VAW Packaging of Europe, a deal expected to close in a few days, and New York-based composite materials maker Baltek Corp., also expected to close this quarter.

Alcan has an annual production capacity of 2.4 million tonnes of primary aluminum in Kitimat, B.C., of which 30,000 tonnes are idled.

Pittsburgh-based Alcoa, with capacity of 3.9 million tonnes, announced Wednesday it plans to curtail production at smelters in the states of New York and Washington because of the high cost of electricity.

Once the cuts are implemented, Alcoa will have about 675,000 tonnes of idled capacity on a base primary aluminum capacity of 3.9 million tonnes.

Engen said the Alcoa announcements are probably intended to warn its power suppliers not to raise rates further. He said the cuts are still insufficient to correct a market glut of the light metal that is keeping prices low.

He estimates there is still over 400,000 tonnes a year of surplus production.

Alcan, with operations in 38 countries, including China and Singapore, has taken stringent measures to prevent workers in its facilities from being contaminated by the SARS virus.

Employees and visitors from affected countries, including Canada, are excluded from entering plants in other countries, and Montreal head office employees were discouraged from coming to the annual meeting.

"If we had to isolate a whole facility, it would be an extreme disruption," said Engen.

Alcan's stock (TSX:AL) dropped $1.63 to $42.22 Thursday on the Toronto Stock Exchange. It had reached $62.39 during the past year.

Engen said Alcan is still interested in acquiring aluminum products manufacturers, like packaging firms, but not primary metal producers.

© Copyright 2003 The Canadian Press

Aluminium smelting plant set to take off

Star, Malaysia 23Apr03

By V.P. Sujata in Ipoh

THE RM9.8bil aluminium smelting plant project, one of the country's major projects, is all set to take off in September.

The project, to be located on 144ha in the Manjung district is now awaiting approval by the Department of Environment, which is studying its impact on the environment.

The plant alone would cost RM7.6bil while the remaining RM2.2bil is for the setting up of a power plant called MASCO Dedicated Power Plant to complement the needs of the smelting plant.

The main investor for the plant is a US-based Charus Development USA, which is leading a consortium of other investing countries like Hong Kong and China.

Mentri Besar Datuk Seri Mohamad Tajol Rosli Ghazali said on Wednesday the project would help to increase the country's foreign direct investment at a time when the world was experiencing an economic slowdown.

Tajol Rosli also said that the state government had set up a committee, headed by the state secretary, to oversee the construction of the plant.

The plant, with a capacity of smelting 820,000 tonnes of aluminium per annum, is expected to be completed in 2006.

Tajol Rosli added that among the related industries which would be needed to complement the project are factories making cables and aluminium wiring and aluminium components for the automotive and construction industries.

"The aluminium from this plant will be used for the Proton City project and for the local construction industry. It will also be exported," he said. About 560ha of land in the Manjung district would be developed for aluminium-based components vendors for other industries

BHP Billiton hopes to repeat Mozal success

Business Day, South Africa 23Apr03

BHP Billiton expects to repeat the success it achieved with the original Mozal aluminium smelter in Mozambique, anticipating that the second phase of the smelter will be commissioned ahead of schedule and under budget.

In its quarterly update on group activities yesterday, BHP Billiton said it expected to reach full production at the Mozal II facility in the fourth quarter of this year.

"The first aluminium was cast from the new facilities on April 7, more than five months ahead of schedule," said the group. "Cost trends to date indicate that the project is likely to be completed well below the project budget of $860m."

BHP Billiton's share of this cost was $405m, as the group's stake in the project is 47,11%.

The project will yield 253000 additional tons of aluminium a year, and will have further benefits for the Mozambican economy.

On completion of the first phase, Mozal doubled Mozambique's exports, providing more than $400m in foreign exchange earnings a year, and adding more than 7% to gross domestic product.

Looking at other southern African activities, BHP Billiton said construction work at the 130000ton-a-year Hillside III aluminium smelter project in Richards Bay was 55% complete last month.

"First metal production from the new potline facilities is expected in the first quarter of 2004, in line with revised schedule, and full production is expected by the end of the second quarter 2004."

Expenditure to date was in line with the budgeted $449m.

Increased pot amperage at the existing Hillside facility had contributed to a 7% increase in BHP Billiton's aluminium production during the quarter ending March, compared to the corresponding period.

The group reported a 31% rise in ferrochrome production to 263000 tons for the quarter, driven partly by the commissioning of the pelletising plant at Tubatse in SA.

Overall, BHP Billiton, the world's biggest mining company, said thirdquarter crude oil production slumped, while iron ore, aluminium and copper output rose.

Crude oil production was 22% lower during the quarter at 15,3million barrels compared to the previous corresponding period.

The decrease was mainly due to natural field decline at three operations in Australia, and higher downtime and natural field decline at Liverpool Bay in the UK and Typhoon in the US. This was partly offset by the start of production from Boris in the US.

Natural gas production for the quarter of 66,99-billion cubic feet was in line with the March 2002 quarter.

BHP Billiton also announced yesterday that it was cutting prices for coking coal used by steel makers by an average 4% as of April 1, reflecting weak demand

Sual establishes Komi Aluminium stock capital.

Analytical Information Agency, Russia 24/04/2003

Komi Aluminium which was set up by Sual to implement the project to construct Aluminous and Aluminium Worksc, has established 3 mln rbl stock capital. 3 mln stocks with 1 rbl par each were released overall. The issue and the placement reports were sealed with the North Western FSC on March 24.

The project value is around $2 bln. The works will be constructed on the basis of Sredne-Timanskoe deposit with the explored reserves at 250 mln tons of bauxite.

Bauxite Timana (Sual stake at 75%, Komi - 25%) is licensed to develop such field.

INTERVIEW - Brazil aluminum industry needs to invest in energy

Planet Ark, NY - BRAZIL: April 28, 2003

RIO DE JANEIRO, Brazil - Investment in new electricity generation projects is important for the growth of Brazil's primary aluminum sector, the head of the Brazilian aluminum association (Abal) said.

It's also necessary also for the continuing presence of this energy-intensive sector in Brazil, said the association's president Joao Beltran Martins.

"Without competitive energy, Brazil's producers can't survive. We are investing to keep our facilities operational. I see no other options," Beltran told Reuters in an interview this week.

Due to the $5 billion investments underway in energy generation in the sector, it's unlikely Brazil's aluminum production will fall in the near future, he said.

"But it is possible output will not grow further once current expansions are completed," Beltran said.

Brazil's aluminum sector should produce a record 1.45 million tonnes of primary metal this year, following the conclusion of expansions delayed by energy rationing in 2001-2.

The sector generates only 13 percent of its own electrical energy, although once the various new projects are completed, self-sufficiency should exceed 50 percent, according to Abal.

LACK OF ENERGY RULES

Beltran however pointed out some projects are being slowed down or complicated by lack of government regulation of the energy sector, transmission costs from remote areas and regional differences in environmental legislation.

"The government still needs to regulate everything to do with the energy sector," he said. "The cost of energy in the free market could change."

Local free-market spot energy costs fell after Brazil ended energy rationing to a fraction of international costs.

However, many smelters are reported to be unable to benefit from low spot market prices because, being intensive users, they are obliged to buy from utilities at contracted prices.

In addition, investment in energy generation is costly.

"The cost of energy also depends on the generator's location. Transmission fees can make certain locations unviable," said Beltran, also president of producer Alcan Aluminio do Brasil, a unit of Canada's Alcan Inc. (AL.TO).

The average cost of energy used by Brazil's existing aluminum smelters is $20-22 per megawatt hour, Beltran said, adding that more than $22 is considered unviable by the sector.

"Energy costs for the aluminum sectors in Venezuela, Iceland, the Middle East and China are all cheaper than in Brazil, although we do have the advantage of having internationally competitive manpower," he said.

"We also need adequate federal environmental legislation," Beltan said. Some new hydro projects are being held up by local environmental lobbies despite having gained operating licenses from federal electrical energy regulatory agency Aneel, he noted.

Brazil has excess electrical energy due to recent heavier than usual rainfall, which has filled the country's reservoirs and ensured full operation at the country's hydroelectric plants, accounting for 90 percent of total electricity output.

However, Beltran admitted speculation is rife in government circles that a new period of rationing could occur in 2005. "Everything depends on rainfall levels. But we have to remember we have thermoelectricity as well," he said.

REUTERS NEWS SERVICE

Russian headhunters look to West for cut-price scalps

Financial Times (subscription), UK Published: April 29 2003 5:00 | Last Updated: April 29 2003 5:00

By Andrew Jack

Multinational companies in Russia began shedding western expatriates before the 1998 financial crisis, but now senior foreign executives are in demand again.

They are being hired by Russian-owned groups eager to become more open to the outside world. The appetite for expats reflects a growing recognition among Russian businessmen of the importance of improving corporate governance. It is also driven by the desire to present a new face to potential corporate partners outside Russia and to the western stock exchanges on which many Russian companies hope to raise capital.

The secretive Sual group, the world's sixth-largest aluminium group, this year hired a foreigner, the South African Chris Norval, as chief executive of its newly-created holding company.

Yukos has an American chief financial officer, Bruce Missamore, who is one of about 50 foreigners that the oil giant has hired in the past five years. TNK-BP, the $7bn joint venture between Russian oil group TNK and British counterpart BP, will be run by an American called Robert Dudley.

"It's all part of the globalisation of Russia," says Mikhail Fridman, head of the Alfa group, which has a number of foreign senior executives. "We've always been open to foreigners. We believe they bring experience and a different culture."

The economic downturn in most of the developed world has helped create a glut of mid-level specialists for whom working for a Russian company has lost the stigma it might have had a few years ago.

"It's definitely a buyers' market, and London and Wall Street are not much fun at the moment," says Taru Oksman-Ison, director of Principal Search, a headhunter with a number of Russian mandates. Top priority goes to Russian "repats", many of whom were born and brought up in the former Soviet Union, but who went to the West for education, employment and even citizenship. Now, with Russia's rapid restructuring and strong growth rates, they have seen the attraction of returning home.

Russian companies are also becoming more willing to consider hiring foreigners at the most senior levels. That reflects their international ambitions, the limited availability of local talent at the very top levels and sometimes a desire to use outsiders one step removed from corporate Russia's often clannish internal structures.

"It can be about public relations, but also experience, reputation and the ability to communicate with the parts of the world where a big chunk of wealth is owned or managed," says Maarten Pronk, who was headhunted from the Dutch-owned Rabobank as first deputy chairman of Nikoil Bank.

The demand for foreign executives was first visible in a few companies built from scratch with western capital, such as Jo Lunder's appointment as head of Vimpelcom, the mobile phone operator in which Telenor of Norway had a significant minority stake.

The trend is spreading to

Russia's industrial groups. "If they want credibility in western markets, and to cement their relationships abroad, they are starting to look especially to hire foreign CFOs," says Mark Jarvis, head of corporate finance at Ernst & Young.

Companies are also turning to eastern and central Europe. Alfa Bank, for example, has just hired a Pole - who previously helped run Citibank's operations in the country - to lead its new Express banking operations. Steven Jennings, head of Renaissance Capital, a Moscow bank, argues that if some of the early western expatriates had great difficulties in getting their voice heard in Russian companies, that is now changing. "Shareholders who want to maximise value recognise that they need to do two major things: change the structure of the industry; and change the quality and integrity of management."

The most fundamental implication of new hiring policies is an evolution in Russian corporate style, with power beginning to be delegated away from the leading shareholders. That is a break from the tight control that a handful of owner-managers exercised in the past decade.

"A lot of these Russian owners are young and bored, and don't want to work even eight hours a day, let alone 16," says Mr Jennings. "If they can bring in professionals willing to kill themselves working on their behalf, they are delighted."

Vimpelcom's Mr Lunder believes the trend will continue: "It is difficult to find highly qualified people. As Russian companies grow over the next five to 10 years, they will be pragmatic in seeking the best."

As shareholders in their home markets become more hostile, western executives may find Moscow increasingly appealing.

Hydro Aluminium to sell German oxide plant stake

Reuters, 04.28.03, 2:52 PM ET

HAMBURG, April 14 (Reuters) - Hydro Aluminium, a unit of Norwegian group Norsk Hydro ASA <NHY.OL>, told Reuters on Monday it plans to sell its 50 percent shareholding in Aluminium Oxid Stade, aGerman plant producing aluminium oxides.

Aluminium Oxid Stade makes about 800,000 tonnes of aluminium oxides annually. The other 50 percent is held by private firm DADCO Alumina & Chemicals Ltd.

The stake will be sold as part of a programme to dispose of non-core operations acquired following Norsk Hydro's purchase of Germany's VAW Aluminium in early 2002, said Hydro Aluminium spokesman Michael Peter Steffen.

As a substantial part of Aluminium Oxide Stade's production is not used in aluminium production, it is being viewed as non-core, Steffen said.

Copyright 2003, Reuters News Service

Kaiser Aluminum Smelter In Ghana Temporarily To Curtail Last Remaining Potline

www.kaiseral.com

HOUSTON, Texas, April 30, 2003 - Kaiser Aluminum said its 90%-owned Volta Aluminium Company Limited (Valco) primary aluminum smelter in Ghana has elected to curtail its one operating potline effective May 5, 2003.

Valco elected to initiate an orderly curtailment primarily to (1) provide the Volta River Authority (VRA) with additional flexibility in meeting the needs of other power users in Ghana in light of the low level of Lake Akosombo, where VRA generates hydroelectricity, and (2) preserve its right to power later in the year, when the lake level is expected to be replenished by the annual rainy season. Valco expects this curtailment to extend through the end of the rainy season, at which time it expects to resume operations by using the remainder of its 2003 power allocation, including the power that it otherwise would have consumed in the absence of the resent curtailment.

The company is still evaluating the financial impacts of the curtailment, including potential charges and cash requirements for affected Valco employees. The net cash impact of such curtailment is expected to be offset, in part, by a reduction in working capital. Excluding special items, the impact of the additional curtailment on ongoing operating income is expected to be modest.

Valco and the company continue to pursue a dual-track approach to the power situation. The primary track is through arbitration under the auspices of the International Chamber of Commerce in Paris with both the VRA and the Government of Ghana concerning past curtailments and the volume and price of power available to Valco under existing long-term contracts among the parties. The second track is direct negotiation with the VRA and the Government of Ghana to find a mutually beneficial solution short of arbitration. The voluntary curtailment announced today is not expected to have any adverse impact on either of these tracks.

Valco has five potlines, each with a capacity to produce approximately 40,000 metric tonnes of primary aluminum annually. Although Valco has a long-term power contract with the VRA, the number of operating potlines at the smelter has varied from year to year depending on the power allocation. Valco had operated four potlines in 2000, 2001, and into early 2002. In March 2002, in response to VRA allocation cuts, Valco reduced its operating level to three potlines. In December 2002, and in January 2003, again in response to power allocation cuts, Valco made further reductions to two and one potlines, respectively.

Kaiser Aluminum (OTCBB:KLUCQ) is a leading producer of alumina, primary aluminum and fabricated aluminum products.

Hindalco plans spread to expand copper, aluminium capacity

Our Corporate Bureau in Mumbai

Business Standard, India Published : May 1, 2003

After integrating and bringing its aluminium and copper businesses under one roof, Hindalco Industries, an AV Birla group company, is now working on a mega expansion plan to emerge as a non-ferrous metals powerhouse.

The group has commenced a fresh feasibility study to evaluate the possibilities of expanding its aluminium and copper plants at their existing locations at Renukoot and Dahej, respectively, Hindalco president A K Agarwala said.

Hindalco is currently in the final leg of its Rs 1,800 crore brownfield capacity expansion programme that would take its aluminium smelting capacity to 3.42 lakh tonne per annum.

The initiative would also augment its alumina refining capacity to 6.6 lakh tonne per annum, besides enhancing the power generation capacity to 779 MW.

The Birla copper manufacturing capacity is also being enhanced to 2.5 lakh tonne per annum under the ongoing expansion programme, expected to be commissioned in the first half of 2003-04.

“Even though we are in the final stages of the aluminium project expansion programme, we plan to further enhance the smelter capacity to 3.6 million tonne and the refining capacity to 7 lakh tonne,” Agarwala said.

“We will also increase the capacity of downstream products. We are currently evaluating all possibilities for further expansion,” he added.

R K Kasliwal, CFO of Hindalco, said: “We are aiming at being among the top 10 per cent cost competitive producers globally. The ongoing expansion programme would place Birla copper among the top 20 per cent producers.”

Meanwhile, Hindalco has posted a net profit of Rs 582 crore for the year ended March 31, 2003, as compared with Rs 686 crore the previous year.

The dip in net profit is primarily due to the extraordinary items, including Rs 146 crore towards loss on sale of the company’s entire holding in MRPL to ONGC, and Rs 16.6 crore as expenses towards the merger of the group’s copper business with Hindalco.

Net sales last year stood at Rs 4975.5 crore, as against Rs 2331.4 crore the previous year.