AluNews - July 2003

Canadian company takes over ailing bauxite firm in Guyana; plans layoffs

Ottawa Citizen, Canada Tuesday, July 01, 2003

GEORGETOWN, Guyana (AP) - A Canadian mining company will lay off hundreds of workers as it begins running one of Guyana's ailing bauxite enterprises Tuesday in a joint venture with the government, officials said.

Cambior Inc. has taken over responsibility for mining, marketing and selling production from the Linden Mining Enterprise, 110 kilometres south of the capital, Georgetown.

Longueuil, Que.,-based Cambior will seek to make the principal state bauxite company more profitable as prices for the rock, which is the principal ore of aluminum, have plummeted, Prime Minister Samuel Hinds said Monday in announcing the deal.

In the 1970's bauxite was the largest single foreign exchange earner in this former British colony, but it has since sunk below sugar, gold and rice.

Weak international prices have led to a spectacular decline in production from a 1970's peak of more than 3.6 million tonnes to about a quarter of that today.

Cambior owns one of South America's largest gold mines, Omai Gold Mines, in western Guyana.

Hinds said that Cambior would release all 1,100 workers with paid benefits and eventually rehire less than half of the workforce as it moves to make operations profitable.

The Bauxite Workers Union has demanded all benefits be paid and it is expected to make a statement on the layoffs later this week.

A joint venture company it to be established and given a name within weeks, but Cambior would begin taking control of the company in the meantime, Hinds said.

"The steps hold real promise for a successful, refashioned and profitable bauxite operations at Linmine," he said.

Meanwhile, the main opposition People's National Congress criticized the deal, saying it and other parliamentary parties were not consulted during the negotiations.

"All the decisions have been made by the government and imposed on the management and employees of Linmine with little or no consideration for the severe social and economic dislocation which has and will befall the nearby Linden community," the party said.

Guyana has a population of about 700,000.

© Copyright 2003 The Canadian Press


Ukrainian govt threatens Russian aluminium with alumina cutoff
Russia Journal, Russia July 01, 2003 Posted: 14:13 Moscow time (10:13 GMT)

by John Helmer
A clash is looming between the Ukrainian government and Russian Aluminum (Rusal), the second largest aluminium producer in the world, over the latter's promise to build a new aluminum smelter at Pervomaisk, in the Kharkov region of the Ukraine. If Ukrainian government officials have their way, Rusal could lose control over a vital, low-cost source of the alumina supplies required for its Russian smelters.

On June 24, Mikhail Chehchetov, Chairman of the Ukrainian Fund of State Property announced publicly that Ukrainian Aluminum (Ukral), a wholly own affiliate of the Rusal group, has failed to commence construction of the smelter at Pervomaisk, violating one of the key conditions it had accepted when it won the privatization bidding for control of Nikolaev.

The transfer of the 30% state shareholding in Nikolaev to Ukral occurred in early 2000, after bidding rivalry for the plant between Oleg Deripaska's Sibirsky Aluminum, a predecessor of Rusal, and the London-based Trans World group during 1999. Among the conditions of the privatization deal, Rusal agreed that within two years it would expand alumina output at Nikolaev to 1.3 million metric tons; halt tolling operations at the plant; and start building the new 200,000-ton capacity smelter.

Tolling contracts, through which Rusal lowers the cost of the refinery operations and reduces its local tax payments, were to have been halted last year. But Ukral sources appealed for a two-year postponement to 2004.

The Nikolaev refinery, the largest alumina plant in Europe, is located near the Black Sea coast. Equipped by Pechiney during the Soviet period with modern technology, it had the capacity at acquisition by Rusal to produce 1.1 million tons of alumina per year. This represented about 23% of Rusal's feedstock requirement. In 2002 the plant produced 1.1 million tons. The promised upgrade to 1.3 million tons of output was the subject of a negotiation with the Ukrainian government, which agreed last August to postpone the deadline for another two years. Rusal officials told a group of visiting analysts last week that a plan for expansion of output to 1.2 million tons will commence this year. They did not reveal to the analysts that they knew the Ukrainian government is pressing hard on the smelter promise. One of the analysts told TRJ he did not learn about the Ukrainian move until after the Rusal roadshow was over.

According to Chechetov, because the new smelter project has not started, the government in Kiev will insist on cancelling the transfer of shares, and will reprivatize them. He claimed his agency is preparing an application to a local court.

A spokesman for Ukral responded by confirming that Chechetov has made this threat, but denying his charge. The source said Ukral has started construction. It has bought the land, completed the feasibility study, chosen a general contractor for the project, and made an advance payment. "The Fund is not in a position to dictate to us at what pace we should proceed with construction, " the Ukral official told The Russian Journal.

Asked to comment on local press reports linking the trouble to Ukrainian rivals interested in taking over Nikolaev, the Ukral official said he would not comment. The press has suggested that Rinat Akhmetov, owner of the Industrial Union of Donbass, Ukraine, which controls a pipe plant, a steelmaker, and other companies, is pressing Kiev into retrieving the 30% stake, and then offering the entire 55% bloc of state-owned shares in Nikolaev to a new owner. The Deripaska group, which started its quest for control of Nikolaev in 1999 with less than 40% of the shares, would potentially lose majority control of the plant, and face ouster.

Nina Burlyuk, spokesman for the Ukrainian state property fund, told TRJ that "indeed, the chairman of the fund has raised the issue of re-privatization of shares at a session of the control commission on privatization." But she added that "the fund has not yet made official statements nor formal appeals to declare earlier deals invalid."

Ukral sources are reported in the press to complain that construction work at Pervomaisk has been delayed because electric energy tariffs have not yet been agreed with the government. The high cost of electricity in the Ukraine was one of the reasons industry sources close to Nikolaev's management in 2000 expressed doubt about the feasibility of the Rusal smelter promise.

Vyacheslav Smolyaninov, a Moscow metals analyst, told TRJ there is no telling for certain how serious is the threat of re-privatization of the Nikolaev shareholding. "I do not rule out such a possibility," Smolyaninov told TRJ, "but it's hard to say whether it will be successful.

As Ukral must invest about $300 million into construction of the new plant, energy tariffs are a very crucial matter. It doesn't make sense to invest into construction of a new plant if energy tariffs will make its operations unprofitable."

Because the government in Kiev controls the energy tariff, this could be used to hold the Russians hostage to a promise that is costly to keep. But the alternative is the risk of rising alumina prices. In nearby Rumania, the Rusal acquisition of an alumina refinery at Oradea has also faced serious cost pressures that have been accentuated by the decline of alumina prices off the highs of three years ago. According to a report by Renaissance Capital in Moscow, that refinery has production capacity of 230,000 tons per year, but high transport and electricity costs make it uneconomical. Rusal halted its operations in late 2001, when, according to the report, Rusal decided it would only "resume [refinery operations] if the price of alumina on the international markets rises above $200 per tonne." With the current alumina spot fob price at $285, and a predicted average for this year of $245 -- well above last year's average of $151 -- Rusal officials are saying they may consider reopening the Rumanian unit.

At the moment, Rusal depends on Nikolaev, together with the Achinsk alumina refinery in Russia, for roughly 45% of its annual alumina requirement. The remainder of its feedstock is bought on the open market from Russian rival, Siberian Ural Aluminum (SUAL), Pavlodar in Kazakhstan, and other sources in Australia, Ghana, and Brazil.

Bauxite from Rusal-controlled mines in Guinea, plus alumina from Comalco of Australia, fuel the Nikolaev refinery.

Rusal has publicly projected expansion of bauxite mining in West Africa, but the Ukrainian threat to change shareholding control at Nikolaev casts a shadow over these plans.


Indal to expand Hirakud smelter

The Hindu Business Line, India KOLKATA, July 1, 2003

INDIAN Aluminium Company Ltd ( Indal), an Aditya Birla group outfit, has decided to expand its Hirakud smelter in Orissa from 57,200 tonnes to 65,000 tonnes by transferring 54 pots currently lying idle at the closed smelter at Belgaum in Karnataka.

The expansion programme will be completed by the end of the current year.

The company's captive power plant at Hirakud will also be expanded adding generation capacity of 100 MW so that the increased power requirements for the expanded capacity at Hirakud smelter can be met while excess power can be wheeled to the sheet plant at Belur in West Bengal.

The company President & CEO, Dr S.K. Tamotia, Indal will continue to leverage its dominant presence in chemicals as a key earnings driver in the future. Immediate term growth will emanate from expanding presence in the downstream businesses, with a bias towards value added applications and exports.

The company will also leverage its improved availability of low-cost captive metal and consequent streamlining of supply chain, adopt customer centric marketing strategies supported by superior quality, better deliveries and improved customer services. Operational and market synergies with Hindalco should augment the process, Dr Tamotia felt.

In order to retain Indal's strong presence in the upstream and downstream sectors and create superior value even in the long run, Dr Tamotia said the company would commission strategic and wealth generating projects within time and cost, strengthen domestic presence in the value added segments by concentrating on chosen high-value products in specialty chemicals, sheet, foil and extrusions, boost exports by deeper penetration of existing markets and entering new markets with significant growth potential.

However, he anticipated that domestic prices might move within a narrow range during 2003-04. The forecast range-bound movement of global prices, sluggish demand and rising domestic supplies would emerge as key price determinants. The likely higher supplies from expanded capacities of domestic producers might usher in price competition, both in the primary metal and value added products in the near term.


Nigeria seeks to sell stake in aluminium smelter

Reuters, 07.01.03, 9:47 AM ET

LAGOS, July 1 (Reuters) - Nigeria said on Tuesday it was seeking to divest up to 70 percent of its equity stake in its ALSCON aluminium smelter to one of two suitors who will be selected as a core investor next week.

The country's privatisation agency, the Bureau of Public Enterprises (BPE), had intially offered 51 percent of the state's 90 percent equity holding in the Aluminium Smelter Company of Nigeria (ALSCON).

The Nigerian government is looking to recoup around $2.5 billion through the sale of the plant, roughly what it spent building the troubled smelter.

"We are now offering between 51 and 70 percent of government's 90 percent equity holding in ALSCON. The core investor can buy anything within that range," BPE spokesman Joe Anichebe said.

"We are looking for an investor that will invest a lot of money in the company and turn it around before we offer its shares to the public," he said.

Anichebe said Ferrostaal, a unit of German truck group MAN <MANG.DE> and Russian Aluminium (RusAl), had met the June 30 deadline for submission of final bids.

The BPE spokesman said U.S. aluminium producer Alcoa (nyse: AA - news - people), one of the three short-listed companies, did not return a final bid.

Nigeria's equity stake in the mothballed smelter was raised to 90 percent from 70 percent at the expense of its two private sector partners to compensate for debt owed it by the company.

The restructuring occurred after an audit deemed the smelter "insolvent and technically bankrupt". Ferostaal holds a 7.5 percent in the huge plant and Alcoa 2.5 percent.

ALSCON was commissioned in late 1997 and shut in mid-1999 after producing just 40,000 tonnes of metal, although its potential capacity is put at 193,000 tonnes a year.

The government missed an earlier deadline of December 23 last year to privatise the smelter.

Copyright 2003, Reuters News Service


Alcoa World Alumina: Engineering Study To Take 6 Mos

Yahoo News Thursday July 3, 12:16 PM

MELBOURNE (Dow Jones)--Alcoa World Alumina and Chemicals said Thursday it is considering a A$400 million efficiency upgrade of its Pinjarra alumina refinery in Western Australia state.

In a statement, AWAC unit Alcoa World Alumina Australia said it was seeking state government approval for the upgrade.

The upgrade would add 600,000 metric tons to the refinery & apos;s annual production capacity of 3.4 million tons.

"The construction phase will take approximately two years, so the work could be complete by the end of 2005, if government approvals are forthcoming and market conditions warrant," the company said.

AWAC is a joint venture between U.S.-based Alcoa Inc. (AA) with 60% and Australia-based Alumina Ltd. (A.AWC) with 40%.

The Pinjarra refinery, located 90 kilometers south of Perth, currently represents about 7% of the world&apos;s alumina refining capacity. Alumina is used to make aluminum metal.

Alcoa World Alumina Australia Managing Director Wayne Osborn said the upgrade will improve yield and is a "highly cost-effective means of increasing production capacity."

The upgrade will boost Australia&apos;s annual export revenue by up to A$160 million, he said.

"As a low-cost producer, and with secure access to bauxite reserves, our Pinjarra refinery is well positioned to capture future market opportunities and enhance Western Australia&apos;s position as the world&apos;s leading alumina producer," Osborn said.

An engineering study on the upgrade will take about six months.

Osborn said the upgrade will reduce the intensity of energy use by the refinery and cut greenhouse gas emissions per ton of alumina produced.

The company has partnered with power utility AlintaGas (A.ALN) to provide power for the plant.


Locations -- Mavericks See Niche In Aluminum Extrusion

Industry Week 7/2/03

Three executives launch new company, build plant in Prince George County, Va.

By Tonya Vinas

Who says it's not a good time to be in manufacturing? Or to start your own business? Three executives with experience at large aluminum producers say it's the best of times for both.

They are celebrating the opening of their 77,000-square-foot aluminum extrusion plant in Prince George County, Va., this month. The former home of Reynolds Metals Co., Prince George County was the perfect choice for the company because of its "pro-business environment," logistics access, and supply of skilled and unskilled labor, states Lloyd S. "Chip" Dollins, vice president of operations for Service Center Metals (SCM).

Additionally, consolidation in the aluminum industry makes now the perfect time to jump in as a smaller, niche player.

"We think of ourselves as the Southwest Airlines of the aluminum industry," says Dollins, a former Reynolds executive and Six Sigma consultant. "The big players will always be there, but there will be a place for us as well."

SCM will supply extruded aluminum shapes exclusively to aluminum service centers, which resell products to manufacturers. For now, the company will operate solely in the United States.

Dollins says supplying to the service centers, as opposed to directly to manufacturers, is a smart move because the market is growing and features customers from a variety of industries -- a plus if there's a significant downturn in one major industry. Dollins declined to discuss anticipated output but did say the company already has customer orders.

SCM invested a total of $13 million in the company's new site. The plant, in the SouthPoint Industrial Park, initially will employ 45 people, but Dollins says the plant will be expanded, possibly doubling in size and workforce in two to three years. To compete with larger companies on cost, SCM will employ lean production practices such as small batches and quick changeovers, and elements of Six Sigma.

In addition to Dollins, company founders include R. Scott Kelley, president and CEO, formerly of Reynolds and of Kaiser Aluminum and Chemical Corp.; and R. Randolph Weis, vice president of sales and marketing, formerly of Reynolds, Cressona Aluminum, Alumax Distribution and Industrial Products and Alcoa Engineered Products.

Dollins says the three chose to set up shop in Prince George County because the company's logistics will be truck-based, and the community is easily accessible from three major highways. In addition, the Commonwealth of Virginia's Small Business Financing Authority loaned SCM $1 million for equipment purchases, and SouthPoint is an enterprise zone, which offers certain tax advantages.

What's more, workers displaced as a result of Alcoa Inc.'s 2000 acquisition of Reynolds provided an easily tapped workforce.

Comalco Raises N.Z. Output as Power Prices Fall, Herald Says

July 4 (Bloomberg) -- Comalco Ltd., Rio Tinto Ltd.'s alumina unit, is raising production at its Tiwai Point aluminum smelter on New Zealand's South Island after electricity prices fell, the New Zealand Herald reported.

The company cut production by 10 percent in March when low rainfall drained the hydro lakes that supply 70 percent of the country's electricity and power prices soared, the newspaper said.

The smelter is restarting one furnace a day and will be at 95 percent capacity within 10 days, the newspaper said, citing smelter operations manager Tom Campbell. The company will review power prices then and consider starting more furnaces, he said.

The smelter is the biggest electricity consumer in New Zealand and buys 90 percent of its energy needs on fixed price contracts from government-owned generator Meridian Energy Ltd., the newspaper said.


Alcoa Plans Australian Refinery Expansion

Associated Press 7/3/03

PITTSBURGH - Alcoa is going ahead with engineering work for a planned $270 million expansion of its Pinjarra alumina refinery in western Australia, the company said Thursday.

The engineering work is being done to lay the foundation for a 600,000-metric ton expansion of the facility, which the Pittsburgh-based company says is one of the world's most successful and cost-efficient alumina refineries.

Engineering work will be begin immediately and take about six months to complete. If government approvals are received and market conditions allow it, the expansion could be completed in two years.

Alumina is made from refined bauxite and is used to produce aluminum.

The expansion is expected to involve up to 1,000 workers.

In midday trading on the New York Stock Exchange, Alcoa shares were down 4 cents at $25.49.

Indal Stake In Utkal Up To 55% Per Cent

Financial Express, India Our Corporate Bureau

Mumbai, July 4: Indian Aluminium Company Ltd (Indal), a subsidiary of Hindalco Industries Ltd, the flagship company of the AV Birla Group, has completed the transaction for increasing its equity stake in Utkal Alumina International Ltd (Utkal) from 20 per cent to 55 per cent.

The company on Friday informed the Stock Exchange Mumbai (BSE) of the transaction after it secured all the regulatory approvals applicable to the seller and purchaser.

The transaction would result in Utkal becoming a subsidiary of Indal. The company had earlier informed that the board has approved the acquisition of upto a maximum of an additional 35 per cent interest in Utkal from Norway’s Norsk Hydro. Alcan holds 35 per cent stake in Utkal.

Indal bought out 35 per cent of the total 45 per cent stake held by Norsk Hydro which decided to reduce its stake in the Utkal project in 2001.

Norsk, which initially had a 25 per cent stake in the company, had bought an additional 20 per cent stake from the Tatas to become the largest shareholder in the company.

After this transaction Indal will hold 55 per cent, Alkan will hold 35 per cent and Norsk will hold 10 per cent in Utkal. The Utkal project, that was to commence operations in 1997, proved a non-starter because of intense opposition from local tribal residents.

Utkal is a Rs 1,000-crore, four-million tonne project based in Kashipur, Orissa. About Rs 100 crore had already been spent on the project.

Alumina Spot Prices Touch $330/tonne In Global Mkt

Financial Express, India, Suresh Nair

Mumbai, July 6: Even as aluminium prices remain stable, spot prices for alumina have touched $330 per tonne. Industry sources said that the price range for alumina in the international spot market is anywhere between $280 to $330.

Indian exporters have pointed to China as the main source of the demand for alumina. China is sourcing an estimated 9 million tonne of alumina, an industry official said.

Traders in the industry feel that Russia is also importing a lot of alumina from India. The major exporter of alumina from India is National Aluminium Company Ltd (Nalco), while other non-ferrous metals companies like Hindalco and Sterlite are also firming up alumina capacities for exports.

Currently, among Indian companies Nalco is known to be exporting substantial quantities of alumina. Sources said that Nalco has a policy of selling around 80 per cent to 85 per cent of its alumina in the export markets on the basis of long term contracts and the remaining 15 per cent to 20 per cent is sold on spot basis.

The company sells only a small quantity -- approximately 2,000 tonne in a year in the domestic market where the prices of alumina is currently at around Rs 11,000 per tonne.

Indian companies are also exporting significant quantities to South-East Asia and the Middle-East Asian nations, said an industry source. Alcoa and Dubal have been able to mop up huge alumina contracts at very attractive rates said industry officials.

The demand for alumina is set to rise, and India with its huge bauxite resource will be the major supplier of alumina to smelters around the world. Industry officials, however, said that the export of alumina to Europe is being discouraged because of the six per cent Euro tax, which makes the proposition very unsustainable. An analyst said that the consumption of aluminium in the year 2003 is expected to increase by around 6 per cent and in the next year the consumption will grow by around 7 per cent.

The increased consumption will call for a lot of capacity addition which will require huge quantities of raw materials, said an analyst. He added that India has the best bauxite ore in the world and can exploit these reserves by refining alumina which will be in considerable demand from smelters abroad.

Indian aluminium manufacturers have already planned huge capacity

additions in alumina. Nalco has planned an alumina capacity addition of 5.25 lakh tonne to increase its total alumina capacity to 2.1 million tonne. Hindalco has only recently completed its alumina capacity expansion by adding 2.10 lakh tonne to its already existing 4.4 lakh capacity.

Sterlite Industries recently announced its plan to put up a Rs 4,000 crore alumina refining capacity, this is in addition to increasing Balco’s alumina refining capacity.



Alcoa Can Wait on Acquisitions -Experts

MSN Money July 07, 2003 5:42:00 PM ET

by David Brinkerhoff

NEW YORK (Reuters) - Alcan Inc.'s (AL) $3.9 billion bid for French rival Pechiney is a transatlantic megadeal that Alcoa Inc. (AA), the world's largest aluminum producer, wants to steer clear of, analysts and fund managers said Monday.

If the huge Pittsburgh-based aluminum producer made a competing offer, it would draw antitrust scrutiny, irk its shareholders and complicate a deal that some Wall Street experts believe could give a lift to the beleaguered aluminum market.

``They certainly have the firepower'' to step in, said Michael Kagan, a managing director at Citibank Asset Management, who manages a large amount of Alcoa shares. ``But I don't think they want to get involved. That would hurt everyone.''

If Alcan's hostile bid succeeds, the company would likely shut aluminum smelters within 9 months of closing the deal. That would shrink production and help the market, which is suffering from overproduction and prices which have stagnated for the past year and a half.

A combination of Alcan and Pechiney would displace Alcoa as the world's largest aluminum maker by sales. Still, analysts say the move would not damage Alcoa's reputation since it would retain its No. 1 ranking by production, staff and market value.

And by staying on the sidelines, Alcoa, already in the midst of a cost-cutting program, avoids the ire of investors who were disappointed by two recent acquisitions seen as badly timed and unproductive.

Alcoa's purchases of Reynolds Metals Co. and Cordant Technologies in 2000 strapped it with debt and came just as the aerospace industry, a key buyer of the metal, entered a slump.

``They've had some difficult years and they've fallen behind in terms of cost performance,'' said Victor Lazarovici, analyst with Canadian brokerage BMO Nesbitt Burns.

However, the company will continue its strategy of making small purchases in markets where it already does business, analysts say.

Meanwhile, the company is laying off employees, mothballing U.S. plants and opening new smelters overseas in an effort to cut costs. In other words, Alcoa can wait, when it comes to large acquisitions.

``They've got a lot on their plate in terms of capital projects,'' said Tony Lesiak, analyst with HSBC, who rates Alcoa ``reduce.''

``I don't think at this stage it's in their best interest to make a competing bid,'' he added.

Shares of Alcoa, which reports quarterly results on Tuesday, rose 41 cents, or 1.62 percent, to close at $25.71 Monday on the New York Stock Exchange.

© 2003 Reuters


Alcasa eyes up bigger share of US market

Latin Trade 07/07/2003 - Source: BNamericas

Venezuelan state-owned aluminum producer CVG-Alcasa is working to strengthen its presence in the US market and to this end it has set out short, medium and long term plans, BNamericas has learned from company president Dixon Rosillon. Alcasa is seeking to improve its range of products in the United States, as "our range on offer in that market is not complete," said Jose Rojas, the company's rolling mill manager. In the short-term plan for 2003 and 2004, the goal is to bring the rolling plant's output up to a steady 300t/m, for which investments are going on the purchase of spare parts to improve equipment, he said. Part of the plan is to modernize the computer systems that control operations in the hot-rolling mill. The medium-term plan involves renovating the cold rollers so they can process coils of 7t as currently they can only accept those of up to 4t. "We have to practically split the coils in two in order to feed the rollers, thus undermining productivity.

The strategy is to increase weight capacity of the roller," Rojas said. Rosillon said that in the short and medium term some US$11mn in investments would be required. Another objective of the plan is to be able to supply aluminum coils used in the navy's ship-building industry, rather than having to import them as at present while Alcasa is exporting similar products. In the long term, Alcasa's plan is to build its new Line V to boost capacity of primary aluminum from 210,000t/y to 450,000t, at an estimated cost of US$650mn. Swiss natural resource group Glencore is heading a consortium that has been hired to build the all-new line at the smelter, in the Guayana region of Venezuela. Construction is due to begin late this year or early 2004 and take three years. Apart from Glencore, which is arranging financing of US$540mn for the project, the consortium is made up of French aluminum maker Pechiney and US engineers and constructors Fluor Daniel.

State heavy industry holding company CVG will chip in the other US$110mn. Glencore will be repaid over 12 years with part of the extra output. Glencore is also in charge of revamping Alcasa's smaller lines I and II, which have capacity of 25,000t each. The smelter, in the Matanzas industrial park of Puerto Ordaz city in eastern Venezuela, is 92% owned by CVG and 8% by US aluminum maker Alcoa (NYSE: AA). CVG also owns 80% of the larger Venalum aluminum smelter in the same region, which is also due to build a new line, its sixth, to take capacity up to around 600,000t from the present 435,000t. A group of Japanese trading companies has the other 20% of Venalum.


Balco proposal to buy Chinese tech rejected

Ambarish Mukherjee Gaurav Raghuvanshi

The Hindu Business Line, India NEW DELHI, July 7

STERLITE-CONTROLLED Balco's Rs 5,000-crore expansion plan has taken a hit from the most unexpected quarter; the Ministry of Mines has rejected its proposal to purchase technology from Guiyang Aluminium (GAMI), a Chinese firm.

The Government wants Balco Ltd. to source the aluminium manufacturing technology locally from National Aluminium Company Ltd. (Nalco), as GAMI is not a "proven vendor" for such expertise.

"We see no need for Balco to import technology from the Chinese company which has itself sourced the expertise from different global players. It takes at least 10 years for a technology to prove itself. Nalco has Aluminium Pechiney technology that has proven itself in the last couple of decades," according to a top Government official.

The technology being offered by GAMI is an improvisation, with inputs from players such as Alcoa, Alcan, R&D Carbon and Pechiney. The working of the technology was suspect even in China, the official said.

Interestingly, the Government is not objecting to the proposed technology transfer as a 49 per cent equity partner in Balco that was divested in 2001. Instead, it has declined permission on the ground that any domestic company seeking to import technology has to take the permission from the administrative Ministry.

Imports of capital goods no longer require a clearance from the Secretariat of Industrial Assistance (SIA) under the Ministry of Commerce & Industry, but technology transfers have to be ratified by the Government.

"There is no guarantee that the Chinese company will not use Balco to further its own interests in the country. It can be expected that the Chinese companies, which are setting up capacity to the tune of six million tonnes per annum, will look at India as a potential market and try to stifle domestic producers," the official said.

The official pointed out that the Government had earlier declined permission to Chinalco for setting up a 5,000-tonnes-per-annum aluminium refinery in Gujarat. Chinalco had applied to the Foreign Investment Promotion Board (FIPB) through a proposed subsidiary company called `Kapcol' and had GAMI as a technology provider.

Balco intends to set up 288 new aluminium pots to augment its production capacity from one lakh tonnes per annum to 3.34 lakh tonnes of aluminium annually. The expansion also envisages increasing alumina production from 1.8 lakh tonnes to 8.3 lakh tonnes and captive power generation from 270 MW to 810 MW.

Efforts to contact company officials failed. The Government official admitted that Balco had earlier proposed to source the technology from Nalco but backed out later citing "delays" on the part of the state-owned company in taking a decision.


RusAl Building $700M Smelter

Moscow Times, Russia Wednesday, Jul. 9, 2003. Page 5

Reuters Russian Aluminum, the nation's largest and world's second-largest producer of primary aluminum, has awarded a $700 million contract to Canadian Hatch Group to build a production unit at its Sayanogorsk plant, RusAl said Tuesday.

"This will be the first major aluminum smelter construction in Russia in 15 years," RusAl said in a statement.

The plant will enable Sayanogorsk to raise output by 270,000 metric tons of aluminum per year by the first half of 2006, RusAl said. Sayanogorsk produced 413,865 tons of aluminum in 2002.

The Canadian engineering firm will build two new potlines, including 384 electrolyzers at the Siberian smelter, the third largest in the country.

Design work on the project will begin in August. Initial site work is expected to start in March 2004.

Sayanogorsk may increase its output by a further 80,000 tons to 90,000 tons per year, RusAl said in a separate statement also issued Tuesday, without giving any details of when this may happen.


Noranda reorganizes U.S. recycling business unit into new company

CBC News, Canada Jul 09 2003

TORONTO (CP) - Noranda Inc. has reorganized its U.S.-based, recycling operations into a new company in a move the Canadian metals giant hopes will help it expand recycling markets annd boost sales.

Noranda said Tuesday it has created Noranda Recycling Inc., based in San Jose, Calif., which will have about 200 employees.

Noranda Recycling will have three recycling plants that were previously operated by Micro Metallics Corp., located in San Jose and Roseville Calif., as well as Lavergne, Tenn., the company said.

A fourth plant is located in East Providence, R.I., and was formerly operated by Noranda Sampling Inc.

"Creating one organization that is dedicated to the sustainable recovery and recycling of metals will enable Noranda to better position its industry leading recycling services to a broad range of manufacturers and suppliers," said Steve Skurnac, president of Noranda Recycling Inc. "This also demonstrates Noranda's commitment to sustainable development as we strive to become one of the world's leading recyclers of electronic materials and as the recycling partner of choice."

Noranda also said it's commissioning a new electronics' recycling plant in Brampton, northwest of Toronto. The new plant is scheduled to begin production later this month and is expected to process about one million pounds of old electronics equipment a month.

In breaking down operations at its new recycling compay, Noranda said:

- The San Jose and East Providence plants will continue to focus on recovering copper and precious metals from electronics, telecommunications, automotive, refining and metal fabrication industries.

- The Brampton, Roseville and Lavergne operations will focus on end-of-life electronics recycling through Noranda's relationship with Hewlett Packard and other original equipment manufacturers.

On average, about 150,000 tonnes, or 15 per cent, of the raw material feed for Noranda's primary Canadian copper and recycling operations comes from recyclable materials.

Noranda is one of Canada's biggest resources companies, with 49 mining and metallurgical operations and projects under development in 17 countries. Noranda directly or through subsidiaries employs more than 15,000 people and is one of the world's largest producers of zinc and nickel and is a significant producer of copper, primary and fabricated aluminum, lead, silver, gold, sulphuric acid and cobalt.

The company, which owns nickel producer Falconbridge Ltd. (TSX:FL), is controlled by the Brascan Corp. (TSX:BNN.A) conglomerate.


German mill figures prominently in Alcan's latest global expansion plan

The Globe and Mail, CanadaTuesday, July 8, 2003 - Page B9

By BARRIE McKENNA

WASHINGTON -- Alcan Inc.'s global ambitions once again hinge on the fate of the sprawling Alu-Norf rolling mill on the Rhine River in Germany, near the Dutch and Belgian borders.

Jointly owned by Alcan and Norsk Hydro ASA, the Aluminium Norf GmbH plant is the world's largest aluminum rolling mill. The $1-billion (U.S.) complex employs 2,200 workers and produces 1.2 million tonnes of aluminum sheeting used for everything from pop cans and foil to printing plates and car parts.

In 1999, Alcan's steadfast refusal to sell its Alu-Norf stake to satisfy European competition watchdog Mario Monti effectively killed its planned three-way merger with Pechiney SA of France and Alusuisse Lonza Group AG of Switzerland.

But Montreal-based Alcan, which yesterday launched a 3.4-billion-euro ($5.2-billion Canadian) hostile takeover bid for Pechiney, now says it's ready to haggle with regulators. And this time, Alu-Norf is on the table.

"The essence of the offer is aimed at making sure we can get a quick answer [from European regulators]," Alcan chief executive officer Travis Engen told Bloomberg News.

"A very clear road map has been developed, in consultation with competition authorities, which makes clear an alternative that we think will satisfy the objections that have been raised."

He said the company could get a preliminary go-ahead from regulators in as little as two months.

In a background document, Alcan confirmed it is willing to part with either Alu-Norf or Pechiney's Neuf-Brisach rolling mill, also located in Germany, to satisfy regulators.

The company also played down the significance of what it might have to give up to get a deal done. It estimated that the businesses likely to cause antitrust concerns represent just 4 to 5 per cent of the would-be company's $23.7-billion (U.S.) in annual revenue.

Alcan is the world's second-largest aluminum producer. Pechiney is No. 4. Combined, the two companies would be larger than current No. 1, Alcoa Inc. of Pittsburgh.

"We believe Alcan, if necessary, would divest the assets that scuttled the original three-way merger," Daniel Roling, metals analyst at Merrill Lynch in New York, said in a report to clients.

So a deal that looked impossible in 1999, now looks doable -- at least from an antitrust perspective.

What's changed is that Mr. Engen -- unlike his predecessor, Jacques Bougie -- is apparently not as wedded to the rolling mill end of the business. With aluminum prices in the tank and Pechiney's market value depressed, Alcan is drawing "different conclusions today about the cost-benefit tradeoffs," noted John Tumazos, a metals analyst at Prudential Securities Inc. in New York.

"Alcan has demonstrated different attitudes towards the sheet market in the three years since Travis Engen took the helm," Mr. Tumazos said.

As well, a recent surge in Chinese aluminum product has made the aluminum industry a lot more competitive than it was in 1999. Prices are down and global production is at a 30-year high, making it tougher for regulators to argue that consumers would be significantly harmed.

European competition authorities refused to comment on the proposed takeover yesterday.

The deal must also be okayed by Canada's Competition Bureau, the U.S. Justice Department and more than a dozen other antitrust regulators around the world.

Analysts said there are unlikely to be major antitrust hurdles in Canada, the United States or anywhere else outside Europe.

Pechiney, however, was quick to cast doubt on the ability of Alcan to woo regulators, noting in a statement yesterday that "it can't be guaranteed the European Commission will accept Alcan's proposals."

Speaking less than three weeks ago, Pechiney's chairman and CEO Jean-Pierre Rodier said there's no reason to believe that the objections of regulators 3 years ago would be any different today.

Europe's competition watchdog concluded in 2000 that the merger of Alcan and Pechiney would have created "dominant positions" in key markets, including flat-rolled aluminum products and packaging products.


N.Hydro eyes Alcan's German Alunorf mill stake

Reuters, UK Tue July 8, 2003 10:27 AM ET By John Acher

OSLO, July 8 (Reuters) - Norwegian industrial group Norsk Hydro NHY.OL said on Tuesday it may consider buying Alcan's AL.N half of a 50-50-owned German aluminium mill if Alcan offers it for sale to smooth its takeover of French Pechiney.

Alcan, which bid 3.4 billion euros ($3.83 billion) for Pechiney PECH.PA on Monday, identified its 50 percent stake in the Alunorf rolling mill as a possible divestment to allay any European competition authorities' concerns about market share.

In 1999 the European Commission blocked a three-way merger between Alcan, Pechiney and Swiss Alsuisse due to competition concerns, and Alunorf was one of the stumbling blocks.

Norsk Hydro's spokesman Tor Steinum said Alcan had not approached Hydro about selling its half of the Alunorf mill in Neuss near Duesseldorf, but that it would have to consider it if it gets such an offer.

"If that is an offer we are made, of course we will have to seriously discuss it," Steinum told Reuters.

"This is still theoretical," Steinum said, but he acknowledged that the Alunorf plant is an important asset.

"In rolled products production of Norsk Hydro, this is a very important unit," he said.

The Aluminium Norf GmbH (Alunorf) mill has annual hot rolling capacity of about 1.24 million tonnes and cold rolling capacity of 957,000 tonnes.

"This is an enormous mill -- the world's largest and some say the best run and most efficient rolling mill," said Michael Peter Steffen, spokesman for Norsk Hydro's aluminium business in Germany.

Steffen said Alunorf forms part of what Hydro Aluminium calls its "magic triangle", together with its 215,000 tonnes per year primary aluminium smelter in Neuss and its nearby 450,000-tonne Grevenbroich cold rolling mill.

Norsk Hydro, the world's third-largest integrated aluminium producer after Alcoa AA.N of the U.S. and second-ranked Alcan, had been rumoured to be a possible bidder for Pechiney before Alcan made its cash-and-stock offer.

But analysts say Norsk Hydro can hardly afford to launch a competing bid for Pechiney at this time, though they also say buying its partner out of Alunorf would make sense and probably could be done without excessively burdening its finances.

"Of course the price would have to be right, but if they want to restructure the whole area, it should be easier to do a lot of things if they are a 100 percent owner," said analyst Martin Moelsaeter at DnB Markets.

"It makes more sense for Hydro than for anyone else," said Deutsche Bank analyst Nick Griffin.

Russian Aluminum to Invest USD 700 Million in Southern Siberia Factory

Rosbalt, 09/07/2003, 15:07

MOSCOW, July 9. Russian Aluminum intends to invest USD 700 million in the second stage of construction of the Sayanogorsky aluminium factory (SAF) with a capacity of 270 thousand tonnes per year. The Russian Aluminum press service told Rosbalt that construction is to begin in March 2004 and should be completed in the first half of 2006. This will be the first large-scale construction project in the Russian aluminium branch in the last 15 years, according to the press service.

Construction of the second stage of SAF will begin in August 2003. The Hatch Group won a tender by Russian Aluminum for the right to realize the project. According to the terms of the tender, the contractor will provide project development, delivery of materials and equipment, organization of construction and general administration of the project. At the design stage, the All-Russian Aluminium-Magnesium Institute (AAMI) will participate in the project.

At the present time, the non-government organization Ecological Information Agency is conducting an environmental impact study at SAF. Later, the government will also conduct an environmental impact study of the project.

SAF was built in 1985 in the Republic of Khakasy in Southern Siberia. The factory accounts for 11% of Russian production and approximately 1.5% of world production of aluminum. Russian Aluminum owns 96% of the shares of SAF. The total production of aluminum at the factory in 2002 amounted to 413.86 thousand tonnes.

Sibneft and businessman Oleg Derupaske own an undisclosed portion of Russian Aluminum. The company was created in March 2000 as a result of the merger of several large aluminum and rolled metal factories in the CIS. Russian Aluminum increased production of primary aluminum in 2002 in comparison with 2001 by 1% to 2.48 million tonnes.

The Hatch Group is composed of Kaiser Engineers and BHP Engineers and is one of the world's largest engineering-construction companies. The Hatch Group has projects in 90 countries and on five continents.


Tema to be the major consumer of WA Gas pipeline

GhanaWeb, Ghana

Tema, July 8, GNA - Tema is expected to be the major consumer of the West African Gas Pipeline Project (WAGPP) in West Africa when its delivery starts in June 2005, Mr Kofi Asante Okai, External Affairs Manager of the Project announced on Tuesday at Tema.

This is because Tema is an industrial hub whose demand for power would be greater and it is expected to consume seven million cubic feet gas daily, which would rise gradually to 227 million cubic feet as against 130 million cubic feet consumed by the Takoradi thermal plant that is permanent.

Construction of the project would start in March 2004 and is expected that by June 2005 delivery would begin at Takoradi, Tema and Benin and the volume of gas would be two million cubic feet daily in the initial distribution and increase to 450 million cubic feet.

Mr Okai was presenting a paper on the "WAGP Overview and potential" at a meeting to brief stakeholders at Tema on the WAGP preliminary draft of the Environmental Impact Assessment (EIA) report.

The meeting provided a forum for traditional authorities from Kpone and Tema Manhean, Canoe fishermen, Ghana National Fire Service, Tema Development Corporation (TDC), Ghana Ports and Harbours Authority (GPHA), among others, to solicit their comments on the level of completeness, methodology and organisation of the preliminary draft of the EIA report.

Factories such as Ghana Cement Works (GHACEM), Tema Steel Works, Aluminium Works (Aluworks) and other steel companies, could use the WAGP to produce metallurgical, cement and fertilizers.

Mr Okai said if the WAGP were in operation, the Volta Aluminium Company (VALCO) would not have closed down its last potline as a result of the downward trend of the Akosombo Dam, which is the major source of power generation.

He stated that the consuming countries; Ghana, Benin and Togo would access natural gas from Nigeria as fuel for power generation and industrial development, saying Nigeria's gas reserve is estimated to be in excess of 160 trillion cubic feet, and will take 150 years to exhaust.

Mr Okai warned that when completed, the WAGP could not be used initially for domestic cooking because it could not be bottled for use like the Liquified Petroleum Gas (LPG), however, "in the next 10 to 20 years, when the retail network is in place, people who could afford to connect the pipe to their homes for domestic use".

The WAGP is lighter than the LPG, he said, and described it as cost effective, clean and reliable energy for West Africa and provides a foundation for regional growth and development that goes to prove the need for economic integration and work for all countries in the sub-region.

According to the External Affairs Manager, the WAGP would transport gas from Alagboado in Nigeria to the delivery points at Cotonou, Lome, Tema and Takoradi and development cost is approximately 450-500 million US dollars.

He said an intensive awareness educational programme would be carried out for fishermen along the coast on the activities of the WAGP to avert damaging their fishing equipment and therefore, asked fishermen to allay the fears that the project would disrupt their fishing expedition. Professor A. K. Armah, local EIA Consultant for the project, said precautionary measures would be put in place to rectify environmental pollution and degradation, while safety measures are also taken care off.

The Investment Consortium who owns the WAGP consists of Chevron Texaco West Africa Gas Pipeline with a share of 41.87 percent, Nigerian Petroleum Corporation, 25.25 percent, Shell Overseas Holdings Limited 16.50 percent and Takoradi Power Company Limited 16.38 percent. In the case of the company in Ghana, their share translates to 80 million dollars cash, which should be made available before the commencement of the project next year, and as at now only seven million dollars of the amount has been paid.


Pechiney buys out Dunkerque partners

Wed July 9, 2003 02:10 AM ET

PARIS, July 9 (Reuters) - French aluminium firm Pechiney PECH.PA , the target of a hostile takeover offer from Canadian rival Alcan AL.TO , said on Wednesday that it would pay about 250 million euros to buy out its partners in the Aluminium Dunkerque smelter.

Pechiney would buy all the shares and subordinated loans of the partners and the deal would lead to Pechiney taking on about 135 million euros in year-end debt.

Pechiney currently owns 35 percent of Dunkerque. It would take over the shares of its partners as of December 30.

Pechiney said the deal is the result of negotiations with the partners in the first half of 2003 in anticipation of the exercise of put options that had been granted to them in June 1990


Nalco faces technical manpower crisis

Orissa, India Thursday, July 10, 2003, ANGUL , General

National Aluminium Company (Nalco) is facing a serious shortage of technical manpower to run its additional 120 pots put to steam six months ago under its expansion project. According to official sources, the blue chip company urgently needs at least 350 ITI trained manpower for the optimum utilisation of 600 pots currently in smelter plant here. Nalco had 480 pots in its first phase. To cope with the situation, Nalco conducted written and oral tests for recruitment of 297 junior operator trainees last month. A total of 4,500 ITI passed youths from all over the state turned up for the interview, sources said. However, the recruitment was stalled due to the stay order of High Court following a petition filed by a job aspirant. The appointment orders can be issued only after the High Court vacates the stay, sources said. Besides this recruitment, Nalco plans to absorb 175 plant-affected families in these technical posts. Nalco has already sent 175 affected youths for two-year ITI training with a stipend of Rs 1,000 per month, sources said. At present, the pots are managed by foreign construction company who installed the pots under the expansion plan. Facing such problems, Nalco authorities are delaying the commissioning of another 120 pots which are almost ready in smelter plant.

Asia Aluminum in $3 billion project

Process & Control Today, UK 14/07/03

Asia Aluminum Holdings has signed an agreement to participate in a HK$3billion project to produce aluminium panels and plates at the first such facility in Asia Aluminum Industrial City at Zhaoqing.

The project, in the state-backed high-tech development zone in Guangdong, would be 60 per cent controlled by Hong Kong-listed Asia Aluminum - the largest aluminium extruder in Asia.

Asia Aluminum Holdings chairman Kwong Wui-chun will personally own 20 per cent of the shares, while a raw material supplier and a distributor would each hold 10 per cent of the venture. Kwong, with associates, holds 41.6 per cent of the existing issued share capital of Asia Aluminum.

"Although China commands certain domestic production capacity for aluminium panels and plates, it is heavily reliant on imports for the supply of premium flat rolled products," Kwong said yesterday. "We aim to exploit this market opportunity with output from our new plants."

The company has reserved space to phase in the establishment of other manufacturing and processing facilities in the future, Kwong said.

Last week, the company announced that it had been granted a three-year syndicated loan of US$75 million (HK$585 million) by banks including HSBC, Bank of East Asia and Citic Ka Wah.

The company said it was confident of generating 160,000 tonnes in the first year after the facility becomes operational in 2005, and the figure would surge to 200,000 tonnes the following year. By 2007, the plant would reach full capacity of 400,000 tonnes a year.

Asia Aluminum is a material supplier for the construction of the Beijing Grand Opera House, New Guangzhou Huadu Airport and the refurbishment of Beijing's Great Hall of the People.


Norsk Hydro given an Alcan headache

By Christopher Brown-Humes

Financial Times (subscription), UK - Jul 13, 2003

Alcan's 3.4bn ($3.8bn) hostile bid for Pechiney of France has presented Norsk Hydro, the Norwegian industrial conglomerate, with the sort of dilemma it could have done without.

As the world's third-largest integrated aluminium maker, it has every reason to be concerned by the attempt by one of its biggest rivals to scale up. And Pechiney is the sort of company that it might have had in its sights in the longer term.

But as it considers whether to intervene as a possible white knight counterbidder to Alcan, its first reflection must be that hostilities have broken out at an inopportune time.

Only three weeks ago, Hydro unveiled a big strategic restructuring that will see it spin off and list its Agri fertiliser business next year.

Also, it is still digesting VAW, the German aluminium company that it bought last year for about 3.1bn.

"Hydro has more or less promised the market that it will not make any substantial acquisitions before it has fully integrated VAW," says Oystein Oyehaug, analyst with ABG Sundal Collier in Oslo.

Hydro has declined to comment on its intentions. However, a successful Alcan bid for Pechiney would create two clear world leaders in the consolidating aluminium business - Alcan and Alcoa - and leave Norsk Hydro trailing a distant third. That is not a pleasant prospect for a company that has signalled aluminium is at its core.

Few other opportunities are available that would give Hydro the size and clout in aluminium that a merger with Pechiney would bring.

But is size for size's sake a good enough reason to intervene? Not according to Nick Griffin, analyst at Deutsche Bank in Edinburgh.

He argues that the industrial logic of a Norsk Hydro-Pechiney merger is limited. "It would give Hydro more smelting capacity in Europe, which is a high-cost region because of the strength of the euro.

"Also, there would be very limited overlaps with Pechiney in the area of downstream aluminium products."

Acquiring Pechiney would give Hydro significant exposure to flexible packaging, just as it has signalled that it is not interested in that line by selling its own operations to Alcan this year.

"Hydro's best strategy would be to wait and acquire assets that Alcan-Pechiney will be forced to divest on competition grounds," says Mr Griffin. He believes that if they wanted to grow smelter capacity, there are still many options outside Europe.

Hydro management is known to be cautious and conservative, and a bid for Pechiney would certainly be demanding financially, assuming that it took place before the proceeds of any initial public offering involving Agri had been received.

The final question is whether Hydro would be deemed a desirable saviour for Pechiney.

One source close to the French group says Hydro is not viewed in a particularly attractive light because the Norwegian state still has a 43.8 per cent stake in the group.




RusAl to Ax 69,000 Jobs

Moscow Times, Russia Wednesday, Jul. 16, 2003. Page 5

Bloomberg Russian Aluminum, which makes one-eighth of the world's aluminum, plans to slash 10 percent of its 69,000 workforce by year's end to cut operating costs.

RusAl, which is the world's second-biggest aluminum producer by output behind Alcoa Inc., has been cutting costs and improving management at smelters.

RusAl accounts for about 70 percent of Russia's aluminum and exports 90 percent of its output. The company produced 2,309 metric tons of aluminum last year.


China's aluminum needs rise

Asia Times Online, Hong Kong Jul 15, 2003

By Jayanthi Iyengar

NEW DELHI - China's soaring aluminum needs are changing the structure of the global production industry. Some countries, particularly Canada and Australia, are ramping up production, while others like India, which have proven reserves, are looking to take advantage. At the same time, however, China's own production capacity is growing fast enough that it could engineer a domestic glut over the next two years.

Certainly, the global economic slowdown that began in 2000 has clipped world aluminum production as producers face high energy costs and swollen inventories. Global production growth is actually decelerating marginally, down to 3 percent in 2003 from 5 percent in 2002, with production at 26.5 million tonnes as US production falls due to the economic slowdown, energy costs and attempts by US producers to reduce stocks.

In the meantime, China's rapid growth in manufacturing activity and infrastructure construction mean it could well surpass the United States as the world's largest consumer within just four years, according to the Australian Bureau of Agriculture and Resource Economics (ABARE). While the US continues as the leading producer of aluminum, its dominance is clearly waning. In 1960 the US accounted for more than 40 percent of world production, but today that share is down to 23 percent.

While AME, the global aluminum consultants, project that world consumption will exceed 30 million tonnes by 2006, 40 percent of the six-year percentage increase is expected to be in China as global annual consumption growth runs well behind China's. By 2006, AME expects China to be consuming almost 20 percent of the world's primary aluminum, and that Chinese production will grow in concert with the rest of the world when global recovery begins, backed by its entry to the World Trade Organization (WTO) and by other global trading and financial partnerships.

Eastern European demand is expected to rise with Russian consumption, but Eastern Europe, once a major producer, is not expected to return to anything approaching pre-1992 levels. Recovery in the rest of the world is expected to perk up demand in North America and Western Europe - which currently comes from transport end-use industries. The outlook for Japan still looks unstable as its economy continues to suffer.

ABARE expects global primary aluminum demand growth to return to 5 percent to 25.9 million tonnes in 2003, and by another 5 percent to 27.2 million in 2004. Beyond 2004, ABARE expects aluminum consumption to grow at an average annual rate of 3 percent to around 31 million tonnes in 2008. In the US, demand growth is projected to average less than 2 percent annually to reach 6 million tonnes in 2008, primarily from transport (automobiles, airplanes, trucks, railcars, marine vessels, etc), construction (windows, doors, siding, etc) and packaging (cans, foil, etc). Other uses of aluminum include consumer durables (appliances, cooking utensils, etc), electrical transmission lines, machinery, and other applications.

Against this, ABARE expects demand in China during the same period to average 7 percent annual growth, to around 6.6 million tonnes by 2008. The Chinese are expected to bridge their own gap between production and consumption, with production touching 6.3 million tonnes in 2008 at annual average growth 5.4 percent. Some analysts believe this rising Chinese growth could create business opportunities for existing and new aluminum smelter and refining plants across the world. However, China is already expanding smelters and developing greenfield projects. In 2001 alone, China added 450,000 tonnes to world primary aluminum capacity. There are in fact growing concerns that indiscriminate capacity addition during the first two years of the six-year growth cycle could exacerbate the glut at the top of the market and depress aluminum prices.

The Chinese government is seeking to that ensure its capacity addition is based on modern and nonpolluting technology and that production does not race ahead of demand. It has already decided that all small Soderberg anode cells are to be phased out in order to reduce pollution and increase efficiency. However, with 850,000 tonnes per year of current capacity in this category, most of the offending plants are expected to upgrade their technology to seek to avoid closure. The Chinese are also trying to ensure that investments are focused instead of being spread thin over several projects, thereby ensuring the creation of an efficient backbone for their development, based on state-of-the-art technologies.

Other countries beside China expect to benefit because of the continuing restructuring of the world industry. Australia and Canada have emerged as major metals producers. Other countries entering the world market today are Brazil, China, Norway, India, Venezuela, and several countries in the Middle East. Two major expansions occurred in 2000, including the commissioning of Alcan's 400,000 ton-per-year (tpy) Alma smelter in Quebec, Canada, and the completion of BHP Billiton-led Mozal consortium's 255,000 tpy smelter in Mozambique. Australia is likely to build additional production capacity by 2007, primarily through the 1.5 million-ton expansion at the Nabalco refinery and the 1.3 million- ton expansion at the Queensland Alumina Ltd Refinery.

In countries like India and Brazil, additional refining capacities are being created, though there is potential for far greater growth. In India, there are no signs that the government is reacting although private industry has been building capacity in the hope of diverting some production to export. The country's total aluminum output is presently less than 1 percent of global production though it accounts for nearly 5 percent of the world's proven reserves and ranks fifth among nations in terms of volumes of reserves. Global installed alumina (raw ore) production capacity stands at 58 million tonnes, of which India's share is around 2.7 million. World aluminum production stands at around 27 million tonnes and India accounts for 0.7 million tonnes.

As far as domestic demand is concerned, India's domestic industrial sector is expected to grow at around 5-6 percent during 2003-04, with domestic consumption expected to rise at 4-5 percent during this fiscal year. Thus additions to capacity through plant expansions would have to be exported, though much more could have been made available to feed global demand, had the government performed its role. India's Planning Commission, which sets five-year targets for growth, for instance targeted 8 percent growth for the aluminum sector during 2003-07. This target was arrived at after nearly three years of deliberation within government and with industry, but it is already dated.

The Planning Commission's projections for 2003-07 are conservative, with growth targets 2 percent higher for aluminum production compared with the previous five-year period. India's annual production would cross the 1 million ton mark for the first time under the new targets by 2007 - but they still do not factor in the kind of opportunities that Chinese development may throw up by 2008.

(Copyright 2003 Asia Times Online Co, Ltd.


Alcoa Begins Troutdale Site Restoration

Business Wire (press release)

TROUTDALE, Ore.--(BUSINESS WIRE)--July 16, 2003--Alcoa, Inc. today announced it has formalized the plan and process for site restoration at the former Reynolds Metals Company Troutdale Aluminum Reduction Plant. Alcoa's comprehensive site plan includes the complete dismantling and demolition of the plant structures, removal of process materials and wastes from discrete locations, restoration of Company Lake, and preparation of the site for redevelopment. Alcoa intends to offer the property for redevelopment upon completion of the project, which will again provide employment opportunities for the East County community. The plant is located in Troutdale, Oregon, just north of the Troutdale Airport and South of the Columbia River. The site encompasses 700 acres, with the old aluminum reduction plant situated on 107 acres. Reynolds has had a long association with the Troutdale and Gresham area communities.

The aluminum smelter was built and operated by Alcoa from 1941 to 1945 for the Department of Defense. In 1946 Reynolds Metals Company began leasing the smelter from the War Assets Department and completed purchase of the facility in 1949. Reynolds Metals Company was purchased by Alcoa in May 2000. Aluminum production was temporarily curtailed in June 2000. The facility was permanently closed in July 2002. During 2001 and 2003, Alcoa donated more than $150,000 of materials to the Reynolds School District, Portland School District, Gresham Barlow Schools, and Mt. Hood Community College. Alcoa intends to complete the restoration project and provide the land for redevelopment within 3 to 4 years of the start of the project.

Multiple contractors will perform on-site work for Alcoa. The on-site work will include the dismantling and demolition of the aluminum smelter, removal of subsurface structures, remediation and restoration of Company Lake and on-site landfills, and site preparation for redevelopment.

The majority of the site will be available for redevelopment upon the completion of the project and restoration will be completed around Company Lake and at other discrete site locations. Alcoa has a long history of successful restoration and redevelopment projects. At the Squaw Creek Mine near Chandler, Indiana, more than 162 hectares (400 acres) of warm-season prairie grasses are providing refuge to myriad wildlife and serving as an example of an award-winning reclamation success.

Safety and environmental considerations are at the forefront of this project. Alcoa is taking all possible precautions to keep workers safe. The environmental impact of the site restoration project will be negligible, in keeping with Alcoa's strict environmental management policies. No risk to the surrounding community is expected. The US EPA, Oregon DEQ, and the City of Troutdale will perform oversight for various phases of the site restoration project.

Site access restrictions will be put into effect, starting this July, and continuing for the duration of the project. Historically, Alcoa has allowed the public access to the Columbia and Sandy Rivers by passing through the Reynolds property. During the restoration project, public access will not be allowed in the area north of the Army Corp of Engineers Dike to ensure the utmost safety in this area where active work is occurring.

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. In addition to aluminum products and components, Alcoa also markets consumer brands including Reynolds Wrap(R) aluminum foil, Alcoa(R) wheels, and Baco(R) household wraps. Among its other businesses are vinyl siding, closures, precision castings, and electrical distribution systems for cars and trucks. The company has 127,000 employees in 40 countries. For more information go to www.alcoa.com.



Iran, Italy survey possibilities for enhanced ties in Aluminum Industry

IRNA, Iran

Rome, July 16, IRNA -- Iran and Italy here Wednesday called for further cooperation between their respective aluminum industries. During a meeting held between visiting Iranian Minister of Industries and Mines Es'haq Jahangiri and managers of Italy's Fata Aluminum Production Complex, the two sides explored avenues for increasing cooperative ties between their aluminum industries.

The participants also discussed a possible comprehensive cooperation that will allow them to jointly undertake construction of Iran's Al-Mahdi Aluminum Company. The managers and other officials of Fata Aluminum have manifested their desire to take part in the project.
Iranian Minister of Industries and Mines Es'haq Jahangiri, heading an industrial-economic delegation, arrived here Tuesday to attend the sixth meeting of the Iran-Italy Joint Economic Commission which starts on Thursday.
Top on the agenda of the meeting is the signing of a memorandum of understanding committing both sides to adopt joint stretegies to deal with industrial and economic issues.
Jahangiri and Italian Minister of Productive Activities Antonio Marzano will also discuss possible cooperation in the field of small- and medium-size industries, commissioning of the fourth phase of the Al-Mahdi Aluminum Company and an agreement on vehicle production.
During his three-day stay in Rome, the Iranian minister, who is accompanied by an MP and a number of deputies and managing directors of companies under the Ministry of Mines and Industries, is expected to visit Italy's Fata Aluminum Production Complex and a number of other small- and medium-size industrial concerns.

The Iranian delegation will also take up ways of boosting mutual relations with Italian political, economic and industrial officials. The current diversity of trade and economic exchanges between the two states is said to have added importance to the upcoming sixth meeting of the Iran-Italy Joint Economic Commission and Minister Jahangiri's visit.
Several hundred thousand small- and medium-size industrial workshops scattered all across Italy gives it the reputation of being the world's most advanced industry-based economy.
Given Iran's interest in acquiring Italian industrial expertise, particularly in the field of running small and medium-size industries which are low-cost and high-profit entities unlike major industrial concerns, a new round of bilateral economic cooperation is to be launched between the two states.
Workshops which produce parts for various industrial products complement one another and constitute the biggest section of Italy's industrial sector.
Their goals are job creation, supervised production, innovation and optimum product quality.
Italy has already taken measures toward helping renovate and optimize production in Iran's textile industry, especially in Yazd province.
It has indicated it is willing to launch the same joint cooperation in other industries such as in the building and decorative stones, precious metals and jewelry business.
Italian expertise is also sought by Iran to raise the quality of its goods and make them match EU standards and thereby improve its competitiveness in world markets.
FM/LS/AR End


Aluminium sector poised for 8 pc growth

The Hindu Business Line, India , July 16

The aluminium sector is poised to grow at nearly 8 per cent annually and domestic companies are in the process of expanding their capacities to cater to the increased demand, according to the Mines Secretary, Mr C.D. Arha.

Speaking at a seminar on the metallurgical industry organised by the Confederation of Indian Industry (CII) here on Wednesday, Mr Arha said the capacity expansion in the aluminium sector was happening primarily through brownfield expansion being carried out by State-owned National Aluminium Company Ltd (Nalco) and the recently privatised Bharat Aluminium Company Ltd (Balco).

Even Hindalco, the second largest aluminium producer in the country, was in the process of expanding capacity.

The increased growth for the sector was likely to come from the infrastructure sector, where large projects are in different stages of fructification, he said.

The Secretary pointed out that there was a technological gap as far as design and engineering of plant and machinery was concerned and said there was need for closer interaction between process know-how, design specialist and equipment manufacturers to induct the latest technology and practices in the country's metallurgical sector.

The sector should employ the latest techniques to reduce wastage and cut costs of mining and processing of minerals and move up the value chain, he added


Alcan says to submit Pechiney bid to EC in 2 weeks

Reuters, 07.17.03, 5:59 AM ET

PARIS, July 17 (Reuters) - Canada's Alcan <AL.TO> (nyse: AL - news - people) said on Thursday it would not file its unsolicited takeover bid for French rival aluminum maker Pechiney <PECH.PA> with European competition authorities for another two weeks.

Alcan Senior Vice President Daniel Gagnier told Reuters this would not affect the overall timeable of the offer, and did not give an explanation for why the Montreal-based giant, which initially said it would file with Brussels this week, had decided to wait two weeks.

"They (the European Commission) have already begun their work... we will formally submit the offer in about two weeks," he said.

Gagnier also said Alcan would be willing to negotiate the terms of its takeover bid for Pechiney if the French firm decided it wanted to agree on a friendly takeover, but reiterated the current price was "full and fair".

Copyright 2003, Reuters News Service


Alcoa to buy 1.5 million tons of Guyana bauxite

Miami Herald, FL - Jul 16, 2003 Associated Press

GEORGETOWN, Guyana - Alcoa Inc. agreed to buy 1.5 million tons of bauxite for at least US$37.5 million from one of Guyana's struggling state-run companies, boosting hopes of a short term recovery for the struggling industry, officials said Wednesday.

The agreement, signed last month, calls for the Guyana-based Aroaima Mining Company to supply bauxite - used to make aluminum - to Pittsburgh-based Alcoa Inc. over the next three years, said Neil Kumar, the Guyanese company's director.

"This deal is going to help turn around the industry for sure," said Kumar, noting that the company faced an uncertain future before it successfully completed negotiations with Alcoa.

Alcoa owned 50 percent of Aroaima until it turned over its shares to the state last year. Now it wants to buy a regular supply of bauxite from Guyana.

The agreement comes just two weeks after Cambior Inc., of Montreal, took over the operations of the cash-strapped state-owned Linden Mining Enterprise in southern Guyana at the invitation of the government.

The bauxite will be sold for between US$25 and US$30 per ton, Alcoa spokesman Jake Siewert said by telephone from New York.

Alcoa produces primary aluminum, fabricated aluminum, and alumina, and makes Alcoa wheels, Reynolds Wrap aluminum foil, and Baco household wraps.


Aluminium sector must remain competitive: council

Dial Infolink Manufacturing, Australia 18 July 2003

Australia's aluminium sector must remain competitive or risk falling behind the rest of the world, a key industry body said on Thursday.

Australian Aluminium Council executive director Ron Knapp said the country had been competitive over the past 12 years but needed to sustain that energy in the future.

"The critical element for us is pretty much that secure, long term supply of energy at internationally competitive prices," Knapp told the Australian Resources and Energy National Conference in Sydney.

"We don't buy retail electricity, we buy huge lumps and we need that to be very competitive."

Knapp said there was strong growth potential in the sector.

"We see strong growth...we have the resources but it will only continue if the policy environment continues to support investment in industries that compete in global markets," he said.

Without the competitive edge and support, Knapp warned that Australia's existing aluminium industry operations would be "starved for capital" and that they would be prematurely phased out.

"We do face the risk of falling behind if we don't maintain that competitive edge," he added.

The conference was also told that Australia's magnesium industry remains immature in comparison to other resources sectors.

But Magnesium International senior consultant Ray Soper said there was room for a magnesium industry in Australia.

Soper said despite magnesium being around for a long time, Australia's industry was fragmented and small.

"It is a small and fragmented industry and has not yet converged on a primary production process like most other mature industries," Soper said.

"There are 11 processes either being used or actively developed, so that tells you the industry is immature and it clearly has not yet realised scale economies."

Soper added that there was a process of change going on in the global industry but that there was a place for Australia.

"There is a future for Australia in the primary magnesium industry, however, there are some challenging issues to be addressed," Soper said.

He said these included tackling a number of myths that have "burdened" the industry. One myth was that magnesium burned.

Other issues included concerns over corrosion - which he said had been overcome - and expense of the material.


Capral Aluminium secures $55m development loan

Dial Infolink Manufacturing, Australia 18 July 2003

Capral Aluminium has secured a $55m loan to buy and install state-of-the-art aluminium extrusion and finishing equipment and a semi-automated warehouse system.

The ANZ loan package incorporates Italian and German government export credit guarantees, supporting Capral's major equipment suppliers, SMS Eumuco GmbH, Trevisan SpA and Cometal Engineering SpA.

Capral, based in the Sydney suburb of Granville, said the $55m loan would be repaid over five years.

The Italian government agency guarantee is a first for Italy into Australia.


Iran produces 170,000 tons of aluminum annually

IRNA, Iran -

Tabriz, E Azarbaijan prov, July 18, IRNA -- Managing Director of Iran

Aluminum Production Company (IRALCO) Mohammad-Javad Haqiqi said here

on Thursday that 170,000 tons of aluminum are produced in Iran

annually.

Haqiqi told a provincial administrative council session that

120,000 tons of aluminum were yielded by Arak plant and the rest

y al-Mahdi aluminum production complex in Bandar abbas, Hormuzgan

province.

He said 100,000 tons of aluminum produced in Iran is for domestic

consumption and 70,000 tons for exports.

He added that once project for development of Jajarm aluminum

production factory becomes complete its production capacity will rise

to 280,000 tons a year from 190,000 tons.



Outage affects production at Brazil plant

Kansas City Star, MO Mon, Jul. 21, 2003, Associated Press

PITTSBURGH - Production at Alcoa's jointly owned Alumar plant in Sao Luis, Brazil, has been affected by an electrical outage last week.

The Pittsburgh-based aluminum company said Monday that work has already begun to bring production back to full capacity, and the affected line is expected to be restarted in four to eight weeks. Remaining aluminum production lines continue to operate normally, the company said.

The Alumar smelter is owned by Alcoa and BHP Billiton. The cause of Friday's outage was being investigated.



Composite propeller shows its mettle

Dial Infolink Manufacturing, Australia - Jul 20, 2003

The world’s largest composite ship’s propeller, created by UK technology consultancy QinetiQ, has successfully completed sea trails in which it demonstrated clear advantages over conventional metal units.

Measuring 2.9m in diameter, the propeller weighs significantly less than an equivalent traditional design; ship’s propellers are usually constructed of nickel aluminium bronze (NAB). During the trials immediate benefits were apparent, with smoother take up of power and reduced vibration.

Developed to explore the application of composite materials for marine propulsion, this is believed to have been the first time that a composite propeller of such a large size has been successfully demonstrated on a sea-going vessel.

QinetiQ believes it has considerable potential for applications where weight is critical, such as with the podded propulsion systems used by some marine vessels.

"The use of the lighter composite material meant that the blades could be thicker without significantly adding to the weight of the propeller," project manager Colin Podmore said.

"Thicker blades offer the potential for improved cavitation performance so reducing vibration and underwater signatures."

Consisting of five composite blades bolted and bonded to an NAB hub, the propeller is designed to warship standards and specifically to replace the fixed pitch propeller fitted to QinetiQ's own trimaran warship prototype, Triton.

The ship was launched in September 2000 and, at 90m in length with a beam of 22m, is the world's largest motor-powered triple-hull vessel.

The propeller was fitted to Triton during a routine docking period before undergoing an extensive programme of sea trials in Falmouth Bay. Unique data on loads exerted on the propeller blades was gained from a data logging system.

This was built into the propeller tail cone and collected outputs from the strain gauges fitted to the blades. The information will be invaluable, says QinetiQ, in validating the mathematical models used in the design and development of the propeller.

Knowledge was also gained about the acoustic performance of a rotating composite structure and its impact on the "galvanic environment" (flow of electrical current that can result in corrosion) at the aft end of a vessel.

Taking almost three years to complete, the design, manufacture and installation of the composite propeller on to Triton was an immense technical challenge for the QinetiQ-led team.

Dowty Propellers, a part of Smiths Aerospace at Cheltenham, England, manufactured the composite propeller blades; Wartsila Propulsion in the Netherlands manufactured the NAB hub and assembled the propeller.

Email: ghardy@QinetiQ.com




Indal To Suspend Smelter Plant Ops In Kerala From August 1
Financial Express, India Our Corporate Bureau
Kochi, July 22: Indian Aluminium Company (Indal) has announced shutting down of its smelter plant at Alupuram near here from August 1, owing to the high power tariff which has made the operations unviable.

the company has issued a ‘stay home’ notice to 320 staff and issued a power surrender notice to Kerala State Electricity Board.

As per the notice, it will surrender 25 mw power used by its casting and carbon plants. Official sources said that though these two plants would continue operations, they formed a negligible part in the company’s operations, adding that they could not say for how long these two operations would continue as metal for its extrusion division would have to be sourced from outside later.

Earlier, the management had issued a layoff notice to its employees announcing closure from January 1. However, talks with the government which was to hold its mega Global Investor Meet (GIM) in mid-January forced the it to ward off the closure under promise that there would be power tariff concessions. After the hike in power tariff last October, the highest power-consuming industry in the state, the company had a monthly power bill of Rs 6.7 crore which is the highest power consuming one in the state. It draws around 20 million units per month.

Prior to the power hike by 50 paise per unit, the power bill used to be over Rs 4.5 crore. Power constitutes 60 per cent of the company’s production cost.

The government had provided a three-month relief to the company from January. However, despite repeated requests by the management, the government refused to extend the relief.


Christmas in Accra -- and you and I are Santa Claus

G. Pascal Zachary Sunday, July 6, 2003

http://www.sfgate.com/cgi-bin/article.cgi?f/c/a/2003/07/06/IN67194.DTL

I am surrounded by Muslims in the middle of the night. We are in a Web cafe, a place where through the magic of satellite telephony, a person seated at computer in Ghana can place an order on Amazon, triggering movement in a warehouse in Seattle.

My cafe is filled with "Nima boys," from the main zongo, or Muslim neighborhood, in Accra, Ghana's capital and home to nearly 500,000 Muslims. The Nima boys are using purloined American credit-card numbers to order merchandise from online retailers: computers, clothes, DVDs, anything electronic and expensive.

A boy at one of the terminals roars with delight: his card has been accepted. Let the shopping begin.

For a few minutes, it is Christmas for this lean, hard Muslim youth.

When his order is electronically dispatched, he growls in celebration, "What we cannot destroy, we will take."

From America, he means. First, the World Trade Center, next the newest Dell laptop. For an instant, the Nima boy is at one with Osama bin Ladin, who remains a hero in the zongo, if only because he still defies his American pursuers. As if launching into a jihad, the Nima boy tells me, "We will clean out America, store by store."

This threat is something for George W. Bush, and the rest of us Americans, to ponder as the the president gets ready to depart for Africa later this week.

The Nima boy is not thinking of Kmart, either. But his rationalization for his thievery is simply that: a convenient cover for his personalized redistribution of global goodies. He is no member of al Qaeda, and even though he belongs to a youth gang in Nima called the Taliban, he is full of bull. There is no chance he will take up arms against anyone. He is poor, and credit- card fraud -- through the help of cheap Internet access -- enables him to commit a nonviolent crime that, until recently, far exceeded his means (and his imagination).

The boy wants to sell me the laptop he just ordered. He promises delivery in three weeks. I tell him I'll think about it.

West Africa is by now well known as the fraud capital of the world, so that nobody in the United States ever ships anything direct to Ghana. No problem for the Nima boys. They have their confederates in the U.S. -- some complicitous in their crimes, others innocent -- convinced that they are helping the wretched of the Earth to even the score. These Americans prefer to see no evil in what they do, happy to be helping the less fortunate in a faraway land.

What the American confederates do is to allow the Nima boys to use their mailing addresses for the original shipment from the retailer. They, in turn, send the goods -- air freight -- to West Africa.

I am not amused. The Nima boys do not inspire sympathy in me. They tell me about how Israel staged 9/11, how the Jews stayed home from work, how the Jews run America. When out of frustration I tell them I was raised Jewish, they do not believe me. They have never met a Jew -- there is no synagogue in Ghana, no organized Jewish community, no Jews except visiting foreigners -- and they do not wish to meet a Jew now. The Nima boys persuade themselves that I am joking.

I never joke with the poor. I am afraid to depress them. Humor is an affectation of the wealthy. The truly poor are passive, dispirited. In Ghana, where soaring prices are impoverishing millions of people, the poor are cowed, marginalized, intimidated, abused. They do not dare to steal either.

In the streets of Accra, goats run free. The visitor wonders who owns the goats and why they don't vanish. There are no owners in sight. Yet try an experiment. Grab a goat and run. Or stuff one into the trunk of your car. Before you can drive away, shouts go out in Twi, the local language. The visitor imagines that some kind of Goat Alarm has been sounded and quickly lets the goat loose.

In Accra, a thief will not get very far. And pity him when he is caught and subjected to what the locals call "instant justice." A thief in Accra considers a bad beating to be a boon. Crowds frequently stomp a thief to death.

One of my favorite reporters in the city, Harunah Attah, once stumbled across a dead robber on an early morning walk. He took his picture and published it. No one cared.

At any gathering of the most educated people in Accra, a solid majority favors the death sentence for robbers. Indeed, in the city's crowded central market, the mere cry of "thief," stops time. Dozens of men will join in chasing an alleged robber, only asking later, when the serious injuries have been sustained, about guilt or innocence.

Against this backdrop, cybercrime is victimless -- and risk-free. Or almost.

Late last year, I was in the pool at the La Palm, Accra's fanciest beach hotel, when I heard across the water a large black man speaking English with an American accent. Given his size, I guessed that he once played football. When I asked him, he told me, yes, Big Ten. He even played in a Rose Bowl. I asked him why Ghana, and he told me he worked for the U.S. Secret Service. He was here to investigate credit-card fraud, along with a white partner from Atlanta. Big Ten tells me that the Feds are taking notice of the steady exodus of unpaid merchandise, zipping its way to Ghana on jets bearing the names of Fed-Ex and DHL.

I meet the agents later in the week, at the offices of the detective with the Ghana police force who is in charge of white-collar crime. The detective told me what the Treasury agents would not: The two men had busted seven fraudsters in the past week, staking out the local DHL office and grabbing Nima boys as they picked up stuff.

The boys aren't about to do hard time. No Ghanaian is harmed. And there is a populist appeal to these frauds: Fat, rich and happy Americans possess such a surfeit of goodies that they won't even notice what's missing. No harm, no foul, no conviction. The Nima boys walk; a few spend six months in jail. Since many are teenagers, penalties are even harder to impose.

Big Ten, who is stationed full-time in nearby Nigeria, tells me that if the U.S. government gets angry enough, he will come back one day with extradition papers, seek the power to bring the Nima boys back to America for justice. But Big Ten knows he will never get the chance. The U.S. government funnels tens of millions of dollars of aid to Ghana, which is also the strongest American military ally in the region. There will be no Nima boys standing trial in Atlanta.

I suppose someday a computer geek will invent a program that ends credit- card fraud once and for all. Maybe when we order online we will be asked to speak into a microphone attached to the computer, and if our "voice-print" fails to match the sound on record, the card will be denied and destroyed. End of Nima boys.

Technology often cures the illnesses it provoked in the first place. In the meantime, the boys from the zongo are jamming my favorite Web cafe, and today, as yesterday, it is Christmas in Accra, courtesy of you and me.

G. Pascal Zachary is international director of Journalists for Human Rights and author of "The Diversity Advantage: Multicultural Identity in the New World Economy."


The Demise of an Aluminum R&D Facility

Inside/Out Light Metals...

Figure 1. Kaiser Aluminum Center for Technology included 300,000 square feet of building space.

Gone With the Gavel!

It was sad, very sad, watching the auctioneer's gavel coming down again and again as various pieces of equipment were sold from what was once a world class aluminum R&D facility. Second to none in its lifetime accomplishments, Kaiser Aluminum Center for Technology in Pleasanton, California (Figure 1), was on the block. In late 2000, an impressive eight page color brochure announced a total auction of equipment components to be sold "assets no longer required in the continuing
operations of Kaiser Aluminum" (Figure 2). And so it was, but it is no more.

The Finality... The Reality

The equipment auction was conducted on site and simultaneously on the Internet, with photographs of items/ equipment sent to those locations that had preregistered with the auction house. Interest was at best mediocre. There were only forty to fifty people physically present at any one time, and sometimes as few as twentv five. From the author's assessment, many of the bidders seemed to be small machine shop operators and fabricators interested in the shop equipment. (It seems ironic that the item which brought the highest bid was a tracer lathe.)

Figure 2. Brochure announcing auction for assets no longer required in the continuing operation of Kaiser Aluminum, Pleasanton, California.

Of course the purchaser of any equipment bore the responsibility and expense for its removal. For equipment such as forging presses, rolling mills, extrusion presses, and furnace, this cost could be considerable. But the interested purchaser needed not be concerned since separate rigging and transport companies were present ready to assist in such moving endeavors. Just sign here!

Bidding was not robust. Only a few purchases were made by on-line participants. Perhaps symbolic of the process was the Fenn Rolling Mill, featured on the brochure cover, 600-HP, 2-High/4-High, hot/cold reversing, with a 32 inch face, several sets of work rolls, and back-up rolls of different diameters, sheet coilers on both ends, coil loading and unloading attachments, cutoff shear, and full instrumentation. Suitable for a small manufacturing or specialty operation, it did not generate a bid. Perhaps this reflects the existing conditions in the aluminum industry in particular and/or the metals industry in general.

A Glimpse Back

Kaiser's beginning in mid-1946 was quite humble and inauspicious, with two metallurgical investigators on staff. They were housed in an unused former employee locker room building on the grounds of a government-owned rolling mill in Spokane, Washington. The leased rolling mill itself, together with a nearby aluminum reduction plant and an alumina plant in Louisiana, were all government surplus property, remnants of WW2 industrial production. These plants provided the nucleus for the renowned Henry J. Kaiser's entry into the then uncertain aluminum business. It wasn't long before the original group of two expanded to twenty, then forty, and soon overflowed into another site and available locker room building. They had a belief, a conviction, and executed it quite well.

Old timers say the original facilities were austere, with three and four researchers occupying one office with only one telephone among them. Shortage of funds, characteristic of an upstart business situation, restrained expenditures for desired equipment. But there was no shortage of spirit among the group.

Continued expansion of facilities and personnel created the need for a focal point for the corporation's research and development programs, and so the Kaiser Aluminum Center for Technology was built in Pleasanton, 30 miles from Kaiser's majestic headquarters building in Oakland, California. It was located thirty miles from Kaiser's headquarters in Oakland, California, across the bay from San Francisco. As Kaiser's business interests expanded to encompass refractories, chemicals, and containers, the staff at the Technology Center expanded to over four hundred people. The Center had four pilot plants and more than 100 bench-scale laboratories.

Accomplishments

During its most active period, the Technology Center contributed world class achievements to the aluminum industry. In alloy development, Kaiser introduced 5083 and 5086, which were the initial high-strength, weldable plate

LIGHT METAL AGE, APRIL 2001 page 102

alloys that provided the entry into the massive armor plate applications with the HI 13 and HI 15 tempers. This also included alloy 7049, a high- strength, heat treatable alloy with deep hardening characteristics for heavy plate and forging sections of aircraft structures.

Kaiser developed the first commercially successful rigid media molten metal filter here, which produced a significant increase in molten metal quality for all alloys. The development of the integrally colored anodize process, KALCOLOR, by Kaiser has since adorned the curtain walls and frame sections of many architecturally significant commercial buildings. The development of the laser surface inspection system provided a reliable, on line, high speed assessment of sheet surface quality. The 1958 conception and perfection of the patented draw and iron tool pack together with the design of associated forming machines facilited aluminum's entry into today's massive two piece container market.

The patenting of the "Micromill" concept for making 3004 H19 sheet thickness of 0.010 inches from molten metal, in-line, in 22 seconds had a vast potential and was demonstrated in a pilot plant; unfortunately development time expired before the commerciarprocess was perfected and the plant was acquired by a competitor. The use of the electromagnetic pump for molten metal transfer was inaugurated here. The perfection of electromagnetic ingot casting and its adaptation to commercial practice was also of breakthrough proportion. The development of stress-relieved-stretched plate permitted the design and manufacture of integrally stiffened structural elements for the aircraft industry by eliminating the devastating occurrence of warping during machining operations. And Kaiser's continuous process in line sheet heat treatment was a revolution in productivity and quality effects.

      • The Physical Complex
      • Visitors to the Center usually described it as a very functional facility and pleasing to behold. An architecu-tral award-winning complex, it was located on an 85 acre tract of rolling hills, with two lakes on the property and was ideally located adjacent to an interstate highway with entry and exit ramps along side the property. The structures were harmoniously integrated with each other and designed to blend with the landscape. The buildings were clad with curtain wall anodized aluminum panels colored in prestige shades of bronze. The special anodizing process to achieve the integrated color (no dyes were used) was developed by the research laboratory itself.
      • Although barely thirty years of age, and ideally designed for their purpose, all of these buildings will be bulldozed away and the site cleared. The biotechnology company that purchased the facility announced they have chosen to build their own "campus." Obviously, they only wanted the land, and the reported purchase price was in the vicinity of sixty million dollars.
    • The Life Cycle... was it time to exit?
    • During its 55 years of existence the research function was under the jurisdiction of the original Kaiser Aluminum Corporation for 42 years and for its final 13 years it operated under the auspices of its current owner, Maxxam, Inc.. (Reynolds and Alumax vanished when Alcoa acquired their respective corporate entities.) While Alcoa has emerged as the sole major R&D facility in the U.S., its own R&D staff has experienced substantial downsizing during the past seven years. What the cumulative effect of these events on the future of the aluminum industry will be, can at this time, only be contemplated. Time, as it always does, will tell.
    • LIGHT METAL AGE, APRIL 2001

    • Alcoa cites electrical, weather problems in SEC filing
    • Bettendorf News, IA 7/24/03 By Associated Press
    • WASHINGTON (Dow Jones/AP) — Aluminum giant Alcoa Inc. said Thursday that interruptions at two of its manufacturing plants would reduce earnings in the second half of the year by $15 million to $25 million.
    • According to its quarterly report filed with the Securities and Exchange Commission, production at the company’s Point Comfort alumina refinery in Texas was affected by Hurricane Claudette on July 15.
    • Then, on July 18, production at an aluminum plant in Sao Luis, Brazil, jointly owned by Alcoa and Australian resources company BHP Billiton Ltd., was partially affected by an electrical outage.
    • This outage affected about 40 percent of the plant’s production, or 6,800 metric tons per month for Alcoa, the filing said. Work has begun to bring production back to full capacity.
    • Also in the filing, Alcoa said it received preliminary approval for a settlement with a class representing 400 African-American employees of Cleveland Works in Cleveland.
    • The company said that a fairness hearing on final approval is scheduled for Aug. 25.
    • Cleveland Works produces forged products for automotive, commercial vehicle and aerospace markets.
    • A lawsuit, filed in the U.S. District Court for the Northern District of Ohio against Alcoa and the International United Auto Workers on Feb. 14, alleged discrimination in Cleveland’s apprenticeship program.
    • The plaintiffs were seeking lost wages, entry into apprenticeship programs and unspecified damages.
    • Details of the settlement weren’t provided, but the company said that the cost of the settlement isn’t expected to be material.
    • Shares of the Pittsburgh-based manufacturer, which employs about 2,000 people at Alcoa Davenport Works, finished at $25.84 Thursday, up 19 cents, or 0.7 percent, on heavy volume on the New York Stock Exchange.

    • RusAl Upgrades Foil
    • Moscow Times, Russia Jul 24, 2003
    • MOSCOW (Prime-Tass) -- Russia's largest and the world's second-largest aluminum producer Russian Aluminum plans to invest $34 million in the modernization of Armenia's Armenal foil-rolling plant this year and next, the company said Thursday.
    • In 2005, when the modernization program is complete, the company will produce foil 6 microns to 9 microns thick and will increase profitability by 50 percent.
    • The program envisages the creation of a full production cycle at the plant and the introduction of a new product line.
    • RusAl bought a 26 percent stake in Armenal in February from the Armenian government, bringing its stake in Armenal to 100 percent.
    • Earlier this year Armenal said it expects its output to increase 350 percent on the year to 20,000 metric tons of aluminum foil.

    • China Chalco/Alumina: Contract Price Could Rise
    • Thursday July 24, 6:37 PM
    • HONG KONG (Dow Jones)--Aluminum Corp. of China (ACH) said Thursday it plans to raise the portion of alumina it sells to contracted buyers to 40%-50% of its total sales in 2004 from 10% currently.
    • The company may also raise its contract alumina price, currently set at 15% of the Shanghai Future Exchange&apos;s three month aluminum price, a Chalco executive said.
    • The alumina spot price in China has risen seven times since December and stands at 2,950 yuan per metric ton. By contrast, Chalco&apos;s contract price is about CNY2,211 per ton, 25% lower than the spot price.
    • By the end of this year, China&apos;s only alumina producer aims to initially increase contract sales to 30% of the total, analysts cited Chairman Guo Shengkun as telling them during a visit this week to Chalco&apos;s Zhongzhou alumina refinery in China&apos;s eastern Henan province. The move is aimed at reducing price volatility, he said.
    • Given the current uptrend in the alumina spot price, expected to be sustained for the next one to two years at least, Chalco&apos;s move, while sensible in the long run, may cap its earnings growth in the medium term, analysts said.
    • "Any substantial increase in contract sales will reduce profitability," Pitzi Lau, a commodity analyst with Citigroup Smith Barney said, in a research report.
    • "We expect the alumina spot price to be the key earnings driver (for Chalco) for the next three years."
    • However, the Chalco executive said the company can offset the impact of its reduced exposure to spot market prices by hiking contract prices.
    • The executive confirmed Guo told analysts during their visit that there is "potential" to lift the contract alumina price from 15% of the Shanghai Future Exchange&apos;s three-month aluminum price, but he didn&apos;t indicate by how much or give a timeframe.
    • He said revenue growth from alumina sales would remain reasonably good if the company manages to increase the price of contract alumina.
    • However, analysts said they were concerned over how much of a price rise Chalco&apos;s customers, who need alumina to produce aluminum, could tolerate.
    • "The limitation for Chalco is too much pricing pressure on its clients could seriously hurt their profits," an analyst with a European brokerage firm said. "It would create a vicious cycle, eventually hurting Chalco."
    • With demand for alumina strong, Chalco plans to boost its annual production capacity by 11% to 6.19 million tons a year in 2004 from 5.59 million tons this year, and by 17% to 7.27 million tons in 2005.
    • As well as lifting output, Merrill Lynch said in a research report the Zhongzhou plant would also make use of a new patented processing technology that could lower the unit cash cost of producing alumina about 10%, or CNY100.

    • Norsk Hydro: Hydro Aluminium Strengthens Alumina Position
    • OSLO, Norway, July 24, 2003 (PRIMEZONE) -- Norsk Hydro (NYSE:NHY) is to take part in the second expansion of the Brazilian alumina refinery Alunorte. The board of directors of Alunorte has approved a project to increase capacity by 1.8 million tonnes to 4.2 million tonnes. The expansion will further improve Hydro Aluminium's alumina cost position.
    • Alumina is the key raw material for the production of primary aluminium. Hydro Aluminium holds a 34 per cent interest in Alunorte and will, after completion of the project, increase supplies of alumina from Alunorte to its global primary aluminium production system with 610,000 tonnes, to more than 1.4 million tonnes per year.
    • Including project reserves and financial costs, Hydro's 34 per cent share of the investment is expected to be USD 204 million. The expansion project will start this summer, and full production is expected at the end of the second quarter of 2006.
    • The Alunorte expansion project represents an investment cost of approximately USD 320 per tonne of new production capacity, lower than other major brownfield projects known in the market. Full cash operating cost after expansion will be well below the estimated present world average of USD 135 per tonne, confirming that Alunorte has one of the lowest conversion costs in the industry.
    • The investment is financially attractive with an expected real rate of return (IRR) after taxes of around 15%, calculated on an average primary aluminium three-month price of USD 1,400 per tonne on the London Metal Exchange. This is well above Norsk Hydro's 10 per cent hurdle rate for investments.
    • "It is vital for our global primary aluminium position that we can ensure cost efficient alumina supplies. Alunorte offers some of the lowest conversion costs in the alumina industry, at the same time as performance in safety, environment and community relations is very good," says Truls Gautesen, president of Hydro Aluminium Primary Metal.
    • Hydro Aluminium operates seven fully owned primary aluminium plants in Norway, Germany and Australia. Hydro Aluminium also has equity participation in five plants in Norway, Germany, Slovakia, Canada and Australia. Total primary aluminium capacity, on an equity basis, is approximately 1.4 million tonnes per year. Ongoing major expansions in new low cost production capacity at Sunndal, Norway, and Alouette, Canada, as well as smaller efficiency measures in existing potlines, will add up to 300,000 tonnes of new primary capacity from 2002 to 2006.
    • Alumina represents 35-40 per cent of the total cash operating cost in primary aluminium production, and focus on and control of this cost element is critical. Hydro Aluminium needs approximately three million tonnes of alumina supplies annually to cover its current equity production of aluminium. Approximately 45 per cent of this is today covered through ownership in alumina refineries: Alunorte, Brazil (34%), Alpart, Jamaica (35%), AOS, Germany (50%). The rest is supplied through a portfolio of long-term contracts.
    • Through this expansion of Alunorte Hydro Aluminium maintains an equity alumina sourcing of about 50 per cent, also after completion of the ongoing expansions of primary metal production.
    • Hydro became a partner in Alunorte in 2000, and later took part in the first expansion inaugurated in April this year, increasing Hydro's off-take from Alunorte to approximately 820,000 tonnes.
    • The Alunorte project also includes additional energy generation capacity making Alunorte self-sufficient when it comes to the electricity and steam needed to run the process. Bauxite for the new production lines is secured under contracts with Aluvale (a subsiduary of CVRD) that controls 57 per cent of the shares of Alunorte. Bauxite will come from the new Paragominas mine, 230 kilometres from the refinery.
    • In June this year, Hydro Aluminium announced a major 26 year alumina contract with the Australian company Comalco. The contract with Comalco confirms Hydro Aluminium's low investment alumina strategy to secure long-term supplies.
    • Hydro Aluminium is one of the top three integrated, global aluminium companies, and the leading aluminium company in Europe. Hydro Aluminium is part of Norsk Hydro, a leading Norway-based industrial group with core business areas being Hydro Oil & Energy, Hydro Agri and Hydro Aluminium.
    • More information can be found at www.hydro.com
    • Mazda develops aluminum joining technology
    • Times of Oman, Oman Jul 27, 2003
    • MUSCAT — Mazda Motor Corporation has developed the world’s first aluminum joining technology using friction-heat in the aluminum body assembly process for automobiles. The new technology drastically reduces energy consumption and requires little equipment investment. Mazda has introduced this technology for the rear doors and bonnet of the Mazda RX-8, an all-new four-door, four-seater sports car launched recently.
    • The new aluminum joining technology in addition to significantly reducing energy consumption, reduces equipment investment and substantially improves work environment.
    • Use of aluminum for automobiles is one important approach to make vehicles lighter. This leads to enhanced fuel efficiency and improvements in safety and dynamic performance. In the future, it is expected that aluminum will be widely introduced in many areas.
    • This energy and cost-saving aluminum welding technology through the utilisation of friction heat, developed ahead of other global carmakers, has widened the future possibilities for the application of aluminum in automobiles. At the same time, it is also beneficial for all manufacturers who use aluminum in their work, and is expected to significantly contribute to environmental conservation in a wide range of fields.
    • Mazda Executive Vice- President Hisakazu Imaki said: “We are making continuous efforts towards achieving plant production that conserves energy and reduces environmental impact. To date Mazda has developed many original technologies, including the three layer wet paint system and demi-dry machining process. I am extremely proud that we can clearly demonstrate our determination to the world with the development of this latest technology.”
    • In Oman, Mazda vehicles are backed by the efficient network of Towell Auto Centre, the sole distributors of Mazda in the Sultanate, dedicated to elevating motoring to an unmatched experience.

    • Sual and Nadvoitsk Aluminum Works to call a joint meeting on Sept. 1.
    • Analytical Information Agency, Russia 28/07/2003 11:44
    • Sual and Nadvoitsk Aluminum Works holders convene a joint extraordinary meeting on Sept. 1 to seal revised Articles of Association of Sual, accroding to the companies' documents.
    • Book close date was July 17, 2003.
    • As informed, holders of the above companies approved of Sual's taking over Nadvoitsk Works at their annual meetings. To this effect, Sual will release 170,313,000 common stocks with 1 rbl par each. The stocks will serve to convert the stocks of Nadvoitsk Works.
    • The reorganization is to be completed before late this year.
    • Currently, Sual owns over 90% Nadvoitsk Aluminum Works.

    • ‘Curb emissions or face penalty’
    • Indian Express, India , Express News Service
    • New Delhi, July 29: The Government today warned cement, iron and steel, and thermal power plants against flouting environmental norms. The industrial units, both in public and private sector, have been asked to furnish a bank guarantee as an expression of their commitment to work toward a cleaner environmental norms.
    • In a three-hour-long review held by the Ministry of Environment and Forests, four months after a charter was signed, the industry and corporate sector was given another warning before their bank guarantees could be forfeited.
    • It warned all fertiliser units to meet fluoride emission limits of 25 mg/m3 and all new urea plants, paper mills and tannery units to adopt the common chemical recovery system within three months.
    • The Task Force on Environment Protection which met here under the chairmanship of Environment Minister T.R. Baalu, reviewed the industry’s compliance with pollution control norms adopted in a charter in March this year.
    • Though Baalu sought to dismiss this penalty clause as a ‘‘mere deterrent for the industry against non-compliance’’, Ministry sources said action had been initiated against some defaulters in this regard.
    • The Minister, however, said the review meeting found encouraging results with 90 per cent units complying with the pollution control norms.
    • The aluminum industry has been asked to reduce the fluoride emission from one kg per tonne to 0.8 kg per tonne and iron and steel plants to use tar or oil or ETP sludge in blast furnaces. Similarly, refineries have been directed to reduce sulphur-dioxide emission in sensitive areas and new guidelines have been framed for the height of the chimney to make them ventilation co-efficient

    • Capacity of Aluminum Plant in North China to Be Expanded
    • People's Daily Online, China, 29Jul03
    • China has begun a 1.18 billion US dollar project to expand the production capacity of an aluminum plant in Shanxi Province, north China.
    • Shanxi Aluminum Plant will increase its capacity by 800,000 tons, and 280,000 tons of electrolytic aluminum, and a power plantwith a designed capacity of 600,000 kilowatts.
    • The project, which is expected to be completed in two years, will enable the plant to produce 10 varieties of products with high added value.
    • The project will help the plant increase sales volume by 10 billion yuan (1.21 billion US dollars), bringing about 3 billion yuan (365 million US dollars) in profits and taxes.
    • Shanxi Aluminum Plant has the capacity to produce 1.4 million tons of aluminum, compared with 120,000 tons in 1983 when it was set up.

    • Alcoa to lay off 615 at Ferndale smelter
      Seattle Post Intelligencer, WA Thursday, July 31, 2003
    • Alcoa yesterday issued 615 layoff warning notices to workers at its Ferndale aluminum smelter in Whatcom County. Alcoa said it will temporarily suspend production Sept. 30 because of the Bonneville Power Administration's plan to increase electricity rates later this year; that will make the smelter "uncompetitive globally," the company said. At peak production, the Ferndale smelter employed 1,100.

    • Alcoa may shut Wash. plant, sees $4 mln charge
    • Reuters, UK Wed July 30, 2003 05:28 PM ET
    • NEW YORK, July 30 (Reuters) - Alcoa Inc. AA.N , the world's largest aluminum producer, on Wednesday said it is preparing to temporarily cut production at its Ferndale, Washington, aluminum smelter on Sept. 30 because of higher power costs.
    • The Pittsburgh-based company, which owns 61 percent of the plant, said it may close the plant, which produces about 110,000 metric tons a year, on that date because of an expected rate increase by the Bonneville Power Administration, the biggest power provider in the U.S. Northwest.
    • "Since there has been no indication that BPA will significantly lower power rates, we have to prepare for a curtailment," said Bernt Reitan, an Alcoa vice president and president of Alcoa Primary Metals.
    • The plant, known as Intalco, employs about 700 people, according to reports in the Bellingham (Washington) Herald. Alcoa did not immediately return a call seeking further comment.
    • Alcoa said it expects closure and severance costs will trim third-quarter net income by about $4 million.
    • Alcoa posted second-quarter profit of $216 million, or 26 cents per share. Analysts polled by Reuters Research, a unit of Reuters Group Plc, on average expect third-quarter per share profit of 29 cents.
    • The company said it has sent notices to all Intalco workers advising of possible layoffs. It said employees will be paid through Sept. 30, but if that Intalco can secure power rates low enough to allow the plant to run profitably, cutbacks won't be needed.
    • The other 39 percent of the plant is owned by a Japanese consortium, Mitsui & Co., a securities filing shows.
    • Alcoa shares closed Wednesday on the New York Stock Exchange at $26.95, up 1 cent.

    • H1 RusAl Revenues Rise to $2.1Bln
    • Moscow Times, Russia Thursday, Jul. 31, 2003. Page 6
    • Combined Reports Russian Aluminum, which makes an eighth of the world's aluminum, increased output 3.6 percent in the first half of the year as it upgraded its smelters.
    • RusAl's revenue in the period was $2.1 billion versus $2 billion in the same period last year, mainly due to an increase in sales of high-added-value aluminum. Export revenues were $1.8 billion compared with about $1.6 billion in the first half of 2002, the company said.
    • The company produced 1.27 million metric tons of aluminum and alloys in the first half, up from 1.23 million tons a year ago, the company said in a statement.
    • It boosted output of flat-rolled aluminum 18 percent to 87,062 tons and foil production rose 44 percent to 22,514 tons.
    • RusAl, which makes 70 percent of Russia's aluminum and exports 90 percent of its own output, cut costs and improved management at smelters amid concern demand was sagging in the United States, the world's top buyer of metals.
    • The company wants to sell more metal to manufacturers producing goods such as airplanes, beer cans or cars, bypassing traders.
    • "Working directly with end-users, we can further increase the share of products with high added value in our output," RusAl chief operating officer Alexander Bulygin said in the statement.
    • Aluminum averaged $1,386 per ton in the first half, little changed from $1,387 a year earlier.
    • RusAl is currently in the middle of an ambitious restructuring plan.
    • RusAl is an unlisted company owned 50-50 by tycoon Oleg Deripaska's Base Element and core shareholders of oil company Sibneft, including Roman Abramovich, one of Russia's richest men and the owner of soccer club Chelsea.
    • It aims to become the world's top aluminum producer in about a decade and plans to hike production capacity by 1 million tons per year.
    • Set up in 2000, as battles raged for control of Russia's lucrative metals business, RusAl owns the country's largest aluminum smelters, Bratsk, Krasnoyarsk and Sayanogorsk, as well as the fifth-largest plant, Novokuznetsk.
    • Capital expenditure, mainly on modernization projects and excluding acquisitions, was about $110 million compared to $70 million a year ago. Overall 2002 expenditure totaled $160 million.
    • Borrowing levels were unchanged in the first six months of this year, standing at $1.5 billion.
    • The figures were calculated according to unaudited U.S. generally accepted accounting principles, RusAl said. It does not publish profit figures.
    • The company also said it had fired 2,059 workers in the past year, reducing its total staff to 69,729 people.
    • (Bloomberg, Reuters)


      Indal acquires Utkal Alumina; Q1 net up 6 pc
    • The Hindu Business Line, India Kolkata , July 30 , Badal Sanyal
    • UTKAL Alumina International Ltd (UAIL) has become a subsidiary of the Indian Aluminium Company Ltd (Indal) of the Aditya Birla group, the transaction for increasing Indal's equity holding in UAIL from 20 per cent 55 per cent having been already completed.
    • The balance 45 per cent in the 100 per cent export-oriented alumina company in Orissa is held by Alcan Inc of Canada.
    • This was clarified here on Wednesday by Indal while announcing the company's unaudited results for the first quarter of the current fiscal, which showed an impressive export-led growth in sales and profit before tax.
    • Net sales/income from operations at Rs 380 crore were 23 per cent higher than the first quarter of last year (about Rs 310 crore).
    • Profit before tax at Rs 37.5 crore was up by 33 per cent (Rs 28.1 crore).
    • On the contrary, net profit witnessed a modest rise of 6 per cent at Rs 25.46 crore (Rs 24.01 crore) following higher current tax at Rs 10 crore compared to Rs 2.5 crore during Q1 last year.
    • According to an Indal source, the key factors which contributed to better performance were: higher output from most units, particularly a 40 per cent increase in production of speciality alumina and higher metal output from the expanded Hirakud smelter, a 50 per cent rise in export volumes of sheet, a surge in sales of speciality alumina and higher export volumes and realisation for standard alumina.
    • Though the company's recently expanded smelter capacity at Hirakud in Orissa registered a commendable performance during the quarter under review, the Indal management has announced de-energisation of its smelter operations at Alupuram in Kerala with effect from August 1.
    • It is explained that successive tariff hikes by the Kerala State Electricity Board have rendered the company's Alupuram smelter operations unviable.
    • The last hike on Rs 0.50 per kWh effective October, 2002, increased the losses further. After several representations to the State Government to review the tariff hikes, the company has been compelled to shut smelting operation at Alupuram.
    • In order to compensate the loss of metal production from Alupuram, the management has decided to expand the Hirakud smelter capacity by another 7,800 tonne, to take the total capacity to 65,000 tonne.
    • This is being done through transfer of some electrolytic pots from Belgaum in Karnataka, entailing an investment of about Rs 234 crore.
    • Pre-mining activities have commenced at the company's captive Talabira-1 virgin coal block in Orissa.
    • The coal project is expected to offer low cost coal to its 100 MW capacity Hirakud captive power plant.


    • RUSAL Reports Casthouse Production up 65% Amid Overall Output Increase for H1
    • Yahoo News (press release) Wednesday July 30, 6:51 am ET
    • MOSCOW, July 30 /PRNewswire/ -- RUSAL, the world's second largest aluminium producer, announced today volume growth across all main product lines for the first half of 2003. Remarkably, value added casthouse production rose 65% year-on-year across all group smelters, clearly demonstrating RUSAL's re-orientation to a market-driven strategy. The major growth of foundry product output is indicative of the company's goals to increase the share of value-added products, set up long-term relationships with customers and develop new technology.
      Value-added casthouse products, including alloys, now account for up to 25% of smelter product mix across the group, and up to 34% of production at Sayanogorsk Aluminium Smelter. By 2009, RUSAL expects value-added casthouse products to constitute up to 50% of overall production as a result of modernised facilities and the introduction of advanced technology, following a recently approved RUSAL development plan. Total production of primary aluminium across all group smelters increased by 3.55% year-on-year for the first half of 2003. This was due to smelter modernization, particularly, cell amperage rises at the Krasnoyarsk and Sayanogorsk Aluminium Smelters, as well as improvements in technical process control methods and management modernisation. Production rose the most rapidly at RUSAL Sayanogorsk with 10.49% year-on-year growth, due mainly to further increases in cell amperage.
    • "I am delighted to be able to announce today the first substantial signs that our strategy to align ourselves with our customers and end users is paying off," Alexander Boulygine, RUSAL's Chief Operating Officer, said. "By working directly with our customers, we are able to design alloys exactly suited to their requirements and in the process, substantially move our product mix away from commodity lines."
    • Not long after its formation three years ago, RUSAL announced efforts to sell directly to end-users rather than via third parties. Some 60%-65% of all sales are now direct; a trend that shows the company is increasingly producing to customer specification.
    • First-half results also revealed growth in downstream production, largely as a result of increased work loading at production facilities and last year's plant modernizations. Growth of interest in RUSAL products from customers allowed the Belaya Kalitva and Samara Metallurgical Plants, as well as the Dmitriev Aluminium Rolling Mill to record higher output. Modernization programmes at RUSAL Belaya Kalitva undertaken last year, which included the installation of a new plate cutting line, led to a 10.55% increase in production.
    • RUSAL ROSTAR's product growth is attributable to overall development of the Russian can market and to the optimization of orders received by the plant. RUSAL's position within the local can market will be strengthened significantly following the third quarter launch of RUSAL ROSTAR Vsevolozhsk, currently under construction.
    • More efficient productivity and management secured substantial raw materials production growth at Compagnie des Bauxites de Kindia in Guinea and at additional RUSAL refineries. The newly integrated Friguia Alumina Refinery, added 360,398 tons of alumina as well as 1, 145,621 tons of bauxite to first- half output. Introduction of the first stage of a complex modernization program at the Nikolayev Alumina Refinery resulted in a 7% growth in alumina production year-on-year, and with the growth at Achinsk Alumina Refinery, resulted in a group wide production increase of 4.1%.
    • RUSAL's revenues for the first half of 2003 rose to $2.1 bln (H1 2002 - $2.0 bln) due mainly to an increase in value-added sales. Total exports during the first six months this year were $1.8 bln (H1 2002 - $1.6 bln). For the full year 2002, revenues totaled $3.98 bln.
    • The Group's capital expenditure (excluding acquisitions) for the first half of 2003 amounted to $110 mln (H1 2002 - $70 mln) resulting from increased modernisation expenses and construction of ROSTAR Vsevolozhsk.
    • Capital expenditure for the full year 2002 totaled $160 mln.
    • In the first half of 2003 RUSAL's financial debt remained unchanged and totaled $1.5 bln as the Group focused on improving financing terms.
    • All figures are unaudited and prepared in accordance with US GAAP.
    • RUSAL reduced its staffing level in accordance with its previously announced plans for cost reduction. Current employment stands at 69,729 compared with 71,788 in July 2002
    • Businessman buys time
    • $50,000 gives Martinez 60 more days to find customers
    • Manitowoc Herald Times Reporter, WI July 31, 2003
    • By Charlie Mathews Herald Times Reporter
    • MANITOWOC — With a $50,000 cashier’s check made out to Newell-Rubbermaid on Wednesday, Manitowoc businessman Tim Martinez bought 60 more days in his effort to keep the Mirro plant open.
    • That makes $150,000 Martinez has put into an escrow account for the potential Oct. 1 purchase of the million-square-foot rolling mill, production and distribution center on Mirro Drive.
    • The agreed-upon sale price is $5 million.
    • Koenig & Vits, the name of the new venture, currently has $15 million in letters of intent from prospective customers, Martinez said.
    • Customers would purchase aluminum “coil metal” from the rolling mill, where three-ton aluminum ingots are transformed into thin sheets for stamping into whatever product the external manufacturer sells.
    • “We have done plant visits to our customers (and) seen what issues they have with the product,” said Martinez, who has been to Oconomowoc and Germantown.
    • Letters of intent are not the same as signed contracts, but Martinez cited a number of reasons for optimism.
    • He said one Lakeshore area investor, who wishes to remain anonymous, has already committed $1 million.
    • Several senior former Mirro managers committed to the venture, including Sandy Stanton, Keith Hinz and Jerry Meyer.
    • Martinez said an out-of-state bank is ready to issue revenue bonds when various hurdles have been cleared and there is a go-ahead from local and Wisconsin agencies.
    • The state Department of Commerce last week awarded the city of Manitowoc $60,000 for environmental assessment and appraisal of the Mirro facilities.
    • The information will be helpful to Martinez and prospective investors to have confidence in going forward. The data will belong to the city and shared with any interested plant purchasers.
    • “This is one of the largest up-front grant investments the Department of Commerce has made,” said Sen. Joe Leibham, R-Sheboygan, who met with Martinez and commerce officials to review the Koenig & Vits business plan.
    • Local United Steelworkers President Gary Miller is one of 22 remaining employees in the rolling mill, with the number due to be cut in half by next week. There were about 80 Steelworkers in the rolling mill on Jan. 1 and 800 other employees in the plant. All are scheduled to be permanently laid off by summer’s end.
    • “We had another meeting (with Koenig & Vits leadership) last Saturday. I feel a lot more optimistic,” Miller said.
    • He said he will apply for a job with the new company if it becomes viable; otherwise he will explore attending Lakeshore Technical College and utilizing Workplace Investment Act benefits.
    • Miller said there are many things up in the air at this point, and Martinez would agree.
    • He said there is the possibility Koenig & Vits personnel “may get into the plant as early as Aug. 15 to do maintenance, set up offices. The date is subject to change, but we already have signs on order, software ordered,” Martinez said.
    • For now the focus is on finding more potential coil metal purchasers and fine-tuning a prospectus.
    • Martinez said Koenig & Vits ownership would break down as follows:
    • 42.5 percent would be owned by Martinez;
    • 42.5 percent would be held by what he called “accredited investors;”
    • A “management and associate pool” would own 15 percent.