AluNews - October 2003

Sual recruits former Marconi executive PEOPLE

Gateway 2 Russia, Russia 02 October 2003 00:48

Russian aluminium company Sual has appointed Chris Chapple as chief development officer to steer the private group towards international growth and a likely stock market listing early next year. Mr Chapple joins Sual from Marconi, where he was director of corporate development and oversaw a Pounds 1.5bn asset disposal programme. Sual, or Siberian Ural Aluminium Holding, is Russia's second-largest aluminium producer after Rusal and is controlled by Renova, which is owned by Russian entrepreneurs Victor Vekselberg and Len Blavatnik. Rebecca Bream

Kobe Steel to absorb joint venture with Alcoa

Japan Today, JapanFriday, October 3, 2003

TOKYO — Kobe Steel Ltd said Thursday it will absorb KSL Aluminum Co (Kaal), its aluminum sheet-making joint venture with Alcoa Inc of the United States, on Dec 1.

Kaal manufactures aluminum sheets for sale to can makers. The planned absorption is designed to enable Kobe Steel to obtain control of all stages of aluminum sheet manufacturing from ingot melting to final products, it said. (Kyodo News)


Alcoa Postpones Shutdown of Intalco Smelter

Process & Control Today, UK 02/10/03

Alcoa announced yesterday that it had postponed a final decision on curtailing production at its Ferndale, Washington ("Intalco") aluminum smelter. The Bonneville Power Administration ("BPA") has scheduled a rate hike for October 1, 2003, that would increase costs at the plant.

Elected officials and others in the region are still working to mitigate the rate increase. Given that work, the company is prepared to wait until October 15th to make a decision on the plant's future.

"Over the past few years, BPA rates have risen sharply, making the Intalco plant less competitive globally," said Bernt Reitan, President of Alcoa Primary Metals. "Given uncertainty about the rate increase, we must continue to prepare for a shut-down. But in fairness to our employees and the community, we will wait another two weeks so there is more certainty about the costs before making a decision."

Alcoa is currently running two pot-lines at the Intalco plant with approximately 110,000 metric tons per year of production. Alcoa's interim power supply agreement with BPA is scheduled to expire on September 30, 2003. In the future, Alcoa may adjust production at Intalco as market conditions warrant. Alcoa owns 61 percent of the Intalco facility with the remainder owned by a Japanese consortium.

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


Rusal chief wins aluminium war

INTERVIEW OLEG DERIPASKA:

Gateway 2 Russia, Russia 03 October 2003 00:45

Oleg Deripaska has emerged as the winner in the controversial and sometimes violent battle for control of Russia's aluminium industry. Paying Dollars 2bn to increase his stake in Russian Aluminium to 75 per cent - buying the 50 per cent holding of Roman Abramovich - will look to some like a brave move. It comes against the backdrop of political pressure on Yukos, Russia's biggest oil company, which has culminated in a criminal probe. But Mr Deripaska, a determined 35 year-old with a single-minded ambition to build his business empire, is confident of his judgment. He sees no threat of the Yukos probe spreading into a broader assault on Russian business, even with parliamentary and presidential elections due in the next few months. He says that the probe has not even affected Yukos as a business. Mr Deripaska concedes that some Russian business figures are busy checking the agreements under which they acquired assets during a 1990s privatisation boom best described as opaque. However, he insists that he is not worried because his assets were not acquired through privatisations. "I am very happy I didn't buy anything from the state," he says. The formation of Russian Aluminium was anything but uncontroversial. The early 1990s saw a scramble for assets in which Mr Deripaska and others sought to control smelters, mostly located in Siberia, where the rule of law was hard to enforce. Mr Deripaska and Mikhail Chernoi, his partner at the time, were later named in a Dollars 2.7bn US lawsuit alleging murder, fraud and corruption. The case, filed by rivals, was thrown out by a New York District Court judge this year but is being taken to appeal. Mr Deripaska and Mr Chernoi deny all the charges. In the late 1990s, Mr Chernoi sold his aluminium interests to Mr Abramovich and Mr Deripaska. In a complex deal in early 2000, Mr Deripaska and Mr Abramovich created Russian Aluminium as a 50:50 joint venture by pooling their interests. Mr Abramovich also brought close connections with the Kremlin and with the family of Boris Yeltsin, former president. Mr Deripaska improved his own political position by marrying Polina Yumashev, the daughter of Mr Yeltsin's son-in-law. Mr Deripaska's wholly-owned investment group, Basic Element, launched an acquisition programme that saw him buy stakes in carmaker GAZ, pulp and paper companies, financial services and power generation. The buying spree shows no sign of ending. He says: "I am a strong believer in Russia and that Russia presents the best opportunities in the world and if there's a chance to invest, we will invest." This single-minded drive has brought Mr Deripaska into conflict with business rivals and with government officials. Particularly sensitive are his investments in power generation, where he holds stakes in two big hydro-electric schemes in Siberia at Irkutsk and Krasnoyarsk, plus 2 per cent of UES, the national power group. Mr Deripaska has also bought voting rights from shareholders of a further 1.2 per cent of UES, a legal operation in Russia. Anatoly Chubais, the UES chief executive, has often complained about oligarchs trying to take control of power assets at the expense of others in the economy. But Mr Deripaska denies he is a threat to the effective reform of the state-dominated sector. He says his concern is that electricity in Siberia should be supplied at reasonable prices. This may sound like special pleading for the power-hungry aluminium industry but Mr Deripaska insists this is not the case. He says that Basic Element already controls far more power than it needs for Rusal and is a net provider to UES. Mr Deripaska is not shy of political arguments. As well as the UES debate, he has marshalled opposition to Russia's early entry into the World Trade Organisation, risking even the wrath of President Vladimir Putin, who wants rapid accession. Mr Deripaska argues for caution, saying that the conditions of entry are very important. Mr Deripaska plans to invest Dollars 7bn in his aluminium business over the next decade. Aluminium capacity is to be doubled to 5m tonnes a year using efficient new technologies. Mr Deripaska will become the Rusal chairman and hand over the chief executive's job to Alexander Boulygine, the chief operating officer. Mr Deripaska says that in Russia the time of entrepreneurs is passing and being replaced by the time of modern corporations. This may be true. But his rivals should not assume it means that his own entrepreneurial days are over.

Rain Calcining

Business Standard, India Oct 3, 2003

The uptrend in the aluminium industry has led to an obvious increase in demand for raw materials like alumina and calcined petroleum coke.

One of the beneficiaries of this is Rain Calcining, which manufactures one of the key raw materials for aluminium producers — calcined petroleum coke (CPC). CPC is produced from Green Petroleum Coke (GPC), a byproduct of a petroleum refinery.

GPC is also a risk to the profitability since supply is restricted. Average cost of GPC for the company increased 23 per cent in FY03 compared to CPC realisation growth of 6.5 per cent.

Therefore, despite the increasing volumes, margins in the June quarter were largely stagnant. The 350 basis points rise in the company’s operating margin came mainly from its power division.

In India, only IOC and BRPL produce calcination grade petroleum coke. As a result, a majority of the GPC is imported. However, imports are allowed free of import duty at 1.5 times the amount of CPC that is exported. Rain Calcining benefits from this allowance since exports contributed around 54 per cent of its revenues in FY03.

With the growth in exports expected to continue, Rain Calcining is expanding its capacity by 20 per cent to 3.6 lakh tonnes per annum. Going forward, with an increase in aluminium production globally, the demand for associated raw materials will also grow proportionately.

And given the shortage of raw materials, prices of CPC are also expected to increase. While the company expects a demand growth of around 4 per cent for the current year, it expects a higher growth in the following years due to brownfield expansions of aluminium smelters globally. With the power division also improving its performance, the current year will possibly witness a significant jump in earnings.


Fluor Daniels, Glencore AG and Pechiney executives meet CVG development team

Venezuela Electronic News, Venezuela, 5 Oct 2003
Fluor Daniels, Glencore AG and Pechiney executives have met with Venezuelan Guayana Corporation (CVG) executives Rafael Sanchez Marquez (director general of development) and Alice Brand (vice president, industrial promotion) to discuss progress son CVG-Alcasa Train 5 and to ratify on recent news of a fusion between French-based Pechiney and Canada-based Alcan that will have a positive impact on fast-forward business in Venezuela.

Pechiney Venezuela representative Emilio Figueredo says that AP-33 cell technology installed ay CVG-Alcasa Train 5 will continue to be registered to Pechiney in the fusion with Alcan that raises its profile as the largest aluminum conglomerate in the world in terms of earnings ... "The CVG Alcasa project is one of the most important that we are presently handling with regards to the total mount of the investment."

Pechiney is also making great strides in a project to expand production at CVG-Bauxilum where it is also in joint venture with Canadian Alcan.
Swiss Glencore AG's Venezuelan representative Francisco Peleato, who says his team is to lead construction work at CVG-Alcasa Train 5, says the meeting has been of key importance to the three companies in the consortium and gives substantial credibility to the work they are completing. "Recently, we signed a confidentiality agreement in Miami under which the parties to this consortium have defined all previous agreements and will initiate a detailed project engineering study."

Peleato says that Glencore is already at an advanced stage of negotiations with an international bank to finance Line 5 to the tune of US$650 million. CVG director general Rafael Sanchez adds that studies should be completed by the middle of next year and that construction work will be initiated shortly afterwards. "This project is of vital importance to CVG-Alcasa and besides allowing for greater efficiency, it will generate employment and add to Venezuela's 250,000 metric tonnes annual production of aluminum, taking us into a world ranking in a rapidly expanding international market. It will also provide us with the raw materials to consolidate and supply growth industries in Venezuela.


Rusal looks for ways to improve its image

Financial Times (subscription), UK October 5 2003 17:39

By Arkady Ostrovsky in Moscow

Alexander Boulygine can hardly conceal his excitement at the prospects of running Rusal, the world's second-largest aluminium company that could be floated within four years.

The appointment of the 35-year-old as Rusal's chief executive follows a $2bn deal in which Oleg Deripaska, Russia's aluminium magnate, consolidated his control over Rusal by buying a 25 per cent stake from Roman Abramovich, his former business partner.

The deal increases Mr Deripaska's stake in Rusal to 75 per cent and gives him total control over management of the company, including the appointment of the chief executive.

Mr Boulygine, who is the same age as Mr Deripaska, belongs to a new generation of Russian managers - young, well-educated and aggressive. This new breed of managers is replacing the oligarchs who are starting to distance themselves from the day-to-day running of their companies.

Mr Boulygine says the best way to improve the image of the company, which emerged as a winner from the fierce and often violent battle for control over the Russian aluminium industry, is by making it into a world-class company - not only in terms of its size but also in terms of its management.

Mr Boulygine says consolidation of interest in Rusal clears the way for ambitious strategic plans, which in the past were often blocked or slowed by diverging interests among the company's shareholders.

"The aim of the deal was to enable the future growth of the company and bring it to an IPO [initial public offering] in 2007-2008," he says, sipping green tea in his chic, minimalist office.

Mr Boulygine's task is to double production of the company - which produces 2.6m tonnes of aluminium and 3m tonnes of alumina a year - within 10 years. In order to do so Rusal, which is valued at between $6bn and $7bn, has committed itself to a $7bn investment plan that will be financed by cashflow and debt.

The CEO-designate says the company is planning to spend $2bn on acquiring new assets mainly outside Russia, $4bn on building new capacity and $1bn on modernising existing smelters.

Mr Boulygine has his eyes on three companies: Nalco, the National Aluminium Company of India whose annual output is 300,000 tonnes, and Nigerian Alscon which produces 180,000 tonnes. Rusal is also understood to be interested in an aluminium smelter in Tadjikistan, a former Soviet republic.

"The rest will have to be achieved by increasing our efficiency and cutting our costs," he says.

There is plenty of room for improvement on both sides. In spite of rising efficiency, Rusal's productivity is 95 tonnes of aluminium for one worker, compared with 200 tonnes at Alcoa of the US.

However, Mr Boulygine insists that the company will increase productivity to 150 tonnes per worker by 2008.

Rusal's strategy also involves shedding 25,000 jobs from its total of 65,000 employees.

One of Rusal's biggest disadvantages compared with some international rivals, according to analysts, is the remote location of its smelters in Siberia in relation to the source of its alumina production sites.

In order to keep its costs low Rusal uses a "tolling system", which allows it to pay taxes only on the processing costs rather than its full profits.

Rusal also pays some of the lowest electricity prices in Russia - less than 1 cent per Kw/h.

While the company would not disclose its financial accounts, observers say Rusal could be making as much as $1bn in profit - half of which is likely to be paid out in dividend.

Analysts and business peers say Rusal's future success will depend not only on Mr Boulygine's management skills but also on its continued ability to minimise its taxes and keep energy costs low. "This will require political connections which Rusal has never been short of," one Russian industrialist says.

RusAl deal baffles Moscow

Russia Journal, Russia October 06, 2003

By John Helmer

MOSCOW - The public announcement today [Friday] by Russian Aluminum (RusAl) that Oleg Deripaska "will acquire a further 25 percent stake in the company from the core shareholders in Sibneft" has baffled investment bankers and metals analysts in Moscow.

The announcement follows the recent denial by Deripaska's representatives of a Moscow press leak claiming that he and Roman Abramovich had agreed on a deal for Deripaska and his Base Element holding to buy Abramovich's stake in RusAl for more than $3 billion.

The latest announcement by RusAl says that the transaction price is "confidential." The price of Deripaska's transactions involving the accumulation of RusAl's assets since 2000 has never been disclosed, nor have the payment terms and Deripaska's means of paying for them. RusAl owns the Bratsk, Krasnoyarsk, Sayansk and Novokuznetsk aluminum smelters; the Achinsk and Nikolayev alumina refineries; the Samara Metallurgical Combine; and other plants turning out foil, beverage cans and other aluminum products. The assets have yet to be consolidated into a single shareholding.

A Moscow investment banker involved in metals transactions told The Russia Journal that "it has been well-known that Abramovich has wanted to sell out, but that other shareholders from the Sibneft group did not. Anyone with more than a three-year view of Russia's future would not want to sell."

A source at Millhouse Capital, Abramovich's holding company, told The Russia Journal last week that the press leaks about the deal had originated from people close to Deripaska. He added that these were exaggerated. Since the first public speculation of a deal began more than three months ago, he said, "nothing has been happening, and I don't think that the situation has changed seriously now. I don't exclude the possibility that the share in RusAl will be sold." He added that "it is not only up to [Abramovich] to decide on the sale of assets," the source said, "as different shareholders may have different interests."

The banker told The Russia Journal that his institution is "baffled" by the latest announcement from Deripaska. "Abramovich had more than 25 percent to sell, but less than 50 percent," he said. "The reason Deripaska has bought only 25 percent is probably that he could not pay for more. As it is, we do not know how he will pay the $1 billion to $1.5 billion price the stake is estimated to be worth."

There had been unconfirmed speculation in Moscow last week that Deripaska was seeking Abramovich's agreement to a purchase of his RusAl stake on an installment plan, with cash generated from RusAl's annual metal sales, which are in excess of $3 billion.

A RusAl source confirmed that RusAl's current borrowings, including bonds on issue and a newly announced trade secured loan from Credit Suisse First Boston of $100 million, add up to about $1.5 billion. The source declined to provide further details of its indebtedness or leveraging. According to the RusAl announcement of the Deripaska acquisition, "the company reaffirmed a previously expressed intention of considering a Eurobond issue within a one- to three-year timeframe and a possible public flotation at a later stage."

Millhouse told The Russia Journal that the group does not have an official spokesman at the moment, because last week's spokesman is no longer with the company. The group said that it cannot comment on Deripaska's press statements about the latest transaction.

According to the announcement from Deripaska, the remaining holders of the 25 percent stake not acquired by him "will relinquish all representation on the RusAl board, to be replaced by Basic Element representatives."

Gladstone smelter war

Townsville Bulletin, Australia 08oct03 By Richard Owen

The massive Queensland Alumina Ltd Gladstone joint venture looks set to become embroiled in a battle between global mining conglomerate Rio Tinto and Alcan.

The tussle comes after the Canadian aluminium giant Alcan beds down a $US6.2 billion ($A9 billion) bid for French rival Pechiney SA.

Alcan, which received final approval from French regulators yesterday, and Pechiney are both shareholders in Queensland Alumina's 3.6 million tonne-a-year refinery, owning 41.4 per cent between them.

QAL's operator and largest individual shareholder is Rio Tinto with 38.6 per cent.

Now the remaining 20 per cent is about to come up for grabs.

Insolvent US group Kaiser Aluminium Corp is expected to put that 20 per cent stake up for sale along with other key assets as soon as the dust settles on the Alcan/Pechiney deal to help extricate itself from Chapter 11 bankruptcy protection.

According to ABN Amro Morgans, an intense bidding war could erupt between Rio Tinto and Alcan over Kaiser's stake in QAL.

"Alcan/Pechiney hold the remaining 41.4 per cent and acquisition by either Rio Tinto or Alcan would give the purchaser the controlling stake," ABN Amro's client briefing note on Rio Tinto says.

"We believe Alcan is likely to be interested, which could lead to a competitive bidding situation. Rio Tinto could pay up to $US674 million for Kaiser's stake before the deal would be NPV (net present value) dilutive."

Rio Tinto is in the process of spending $US750 million to build a new alumina refinery at Gladstone to produce 1.2 million tonnes a year in stage one. Stage two will cost another $US500 million and lift output to 3 million tonnes.

Alcan, Pechiney and Rio Tinto also share another important relationship: the vast bauxite deposits at Weipa in far northwest Queensland.

Rio subsidiary Comalco owns and operates the Weipa bauxite mines. Alcan owns an adjacent deposit called Ely leased to Comalco. Pechiney owns a resource in the same area called Arakun.

A spokeswoman for Natural Resources Minister Stephen Robertson said yesterday the Alcan/Pechiney merger would have no impact on Pechiney's bauxite leases – the future of which were "under review".

"But obviously we'd let the dust settle on this takeover before we make any decision on the future of these leases," he said.

According to ABN Amro, Rio Tinto was likely to be interested in Kaiser's 49 per cent stake in Anglesey Aluminiun in the UK, worth about $US120 million, and lift its interest to 100 per cent.

"We estimate the stake in QAL would be worth around $US454 million, based on the $US189 million that Rio paid for an additional 8 per cent stake in QAL in June 2001. On our calculations a combined acquisition price of $US574 million for a 20 per cent stake in QAL and 49 per cent interest in Anglesey could be earnings acretive by around 1.2 per cent in 2004 and add 17˘ per share to NPN for Rio Tinto."

Alcan first launched its hostile bid for Pechiney in July and won board endorsement last month after sweetening the offer.

It hopes to complete the deal by November 20, pending final regulatory approval to create a company with $US23 billion in annual revenue.


ABB wins orders from Sterlite Group

News Today, India Chennai, Oct 7:

ABB India has been awarded orders worth around Rs 110 crore by the Sterlite Group, for supply of state-of-the-art rectifier systems for their smelters at BALCO, Korba and Hindustan Zinc, Chanderia.

This includes a turnkey project from Bharat Aluminium Co Ltd (BALCO) to supply state-of-the-art rectifier systems for the 2,45,000 tpa expansion of their aluminium smelters at Korba, Chattisgarh.

The project scope includes design, manufacture, supply and installation. The project is expected to be commissioned in approximately 16 months. ABB's rectifier systems form the heart of the smelters for the electrolytic extraction of primary aluminium in the potlines. Additionally, ABB has been entrusted with the responsibility to revamp the control systems for the plant's existing pot lines.

A press release said that ABB India has also received an order from Hindustan Zinc Ltd (HZL), another leading Sterlite Group company, for the 1,70,000 tpa expansion of their Zinc smelter at Chanderia, Rajasthan-considered amongst the largest zinc smelters being set up around the world. The scope of this project includes design, manufacture, supply, installation and commissioning of rectifier systems, for electrolysis in the zinc smelter. This project is expected to be commissioned in around 11 months.

Commenting on the orders, Biplab Majumder, head-automation technologies division, ABB India, said 'ABB is a global leader in rectifier technology with systems especially designed to ensure the highest standards of reliability and efficiency for smelters which operate around the clock. ABB's unparalleled domain expertise in the metals industry , worldwide experience and comprehensive product offering have helped us in securing these orders. This is a good example of how ABB is leveraging its global technology advantage and strong local presence to help customers like BALCO and Hindustan Zinc optimise their plant capacities and maximise efficiency'. ABB (www.abb.com) is a leader in power and automation technologies that enable utility and industry customers to improve their performance while lowering environmental impact. The ABB Group operates in around 100 countries and employees nearly 1,33,000 people.


BHP Billiton beats the clock
Business Report, Africa October 7, 2003

By Sherilee Bridge

Johannesburg - BHP Billiton's $449 million Hillside aluminium smelter expansion at Richards Bay and its $860 million project at its giant Mozal aluminium plant in Mozambique had come in ahead of schedule and under budget, the world's largest diversified resources company said yesterday.

Mozal 2, which will officially be opened today, was completed seven months earlier than anticipated and $195 million under budget.

The first metal from Hillside 3 should be ready within months.

These expansions will increase BHP Billiton's aluminium output by 1.329 million tons a year and are well timed, allowing delivery into a market that is expected to remain buoyant well into 2004.

BHP Billiton's southern African operations - Hillside, Bayside and Mozal - already supply 2 percent of the world's high-grade aluminium requirements.

Michael Campbell, the head of corporate affairs at BHP Billiton, said the achievement was proof that southern Africa was still an attractive destination for dollar investments.

Further expansion in South Africa was possible, according to chief executive Chip Goodyear.

"So we certainly have that under consideration," Campbell said yesterday.

"We are again assessing the economics, currency and commodity prices. There are a couple [of opportunities] we are thinking about."


French aluminium group Pechiney, which is to be bought out by Canadian aluminium group Alcan, recently confirmed its commitment to building a R20 billion smelter at Coega, the still-to-be-developed port and industrial development zone in the Eastern Cape.

The tip of the continent has become a popular aluminium smelter destination because of its cheap electricity.

Lower electricity costs allow southern African smelters to produce aluminium at a far lower cost than most of their international peers.

Mozal produces aluminium for a cost of less than $2 500 a ton.

The multimillion-dollar expansion, which doubled Mozal's capacity to 506 000 tons a year, was the first project announced by the BHP Billiton group that merged two years ago.

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

Aluminium prices were expected to move moderately higher, if at all, as strong production growth in China prevents large deficits from developing.

China would provide a bulwark for commodity markets since it is home to more aluminium smelters than any other country.

Alcan raises ownership stake in Aluminium Co. of Malaysia to 60% from 36%

CBC News, Canada 10:28 PM EDT Oct 08
MONTREAL (CP) - Alcan Inc. has swapped its stake in a Thai company to take majority control of Aluminium Co. of Malaysia, the global aluminum giant said Wednesday.

Alcan increased its stake in the Aluminium Co. of Malaysia - also known as Alcom - to 60 per cent from 36 per cent in exchange for its ownership in Thailand's Alcan Nikkei Siam Ltd. Alcan acquired the additional shares in Alcom, which makes light-gauge aluminum products, from Nippon Light Metal. Financial details of the deal were not disclosed.

"Alcan is pleased to further reinforce our strategic relationship with Alcom and demonstrate our commitment to meeting the increasing demands for value-creating and quality light-gauge aluminum products in Southeast Asia," Martha Brooks, president of Alcan Rolled Products Americas and Asia, said statement.

Alcom employs 360 people at its operation near the Malaysian capital of Kuala Lumpur.

The facility, established in 1960, utilizes low-cost continuous cast technology for rolling light-gauge foil used mostly in the packaging and heat exchanger industries.


Aluminium Great Till 2008 - BHPB

AllAfrica.com, Africa October 7, 2003

Daniel Thöle

The world's largest mining group, BHP Billiton sees the global aluminium market being well supplied until 2008 and has no immediate plans to add new capacity.

The group will open the second phase of its Mozal aluminium plant officially today, adding over 250 000 tons of annualised production to double the Mozal project's output.

During the run up to this new output, the project will briefly become the world' s third largest aluminium smelter by volume.

Yesterday BHP spokesman Michael Campbell said the group would not immediately consider a Mozal 3 - but that the group would consider future projects after 2008 if they had two basic characteristics to interest BHP. Campbell said a deep water harbour and cheap electricity were essential, and Mozal has both of these.

Campbell said that much of the new smelting capacity added in China was under review due to inefficiencies and environmental concerns. "A lot of new capacity is unsustainable," Campbell said.

Mozal General Manager Peter Wishaw said aluminium was a mature market, and tended to grow in line with world economic output. Mozal accounts for 2,5% of global aluminium production, part of a seven percent contribution from BHP Billiton's three smelters on the East coast of Southern Africa - the Hillside and Bayside smelters at Richards Bay make up the rest.

The new phase of the project cost BHP $860-m when it was approved in 2000.

The project has come in around $195-m under budget, and was commissioned in a world record 26 months. Phase 1 took 31 months to come on line, and was almost $100-m under its $1,2-bn budget.

Wishaw said the Phase 2 commissioning underlined the competitive nature of the aluminium business - Mozal 2 had beaten smelters in France, Australian and Canada to commissioning.

Mozal was always envisioned as a two phase project, and has a reputation as a low cost, high quality producer.

Wishaw said there were smelters with cheaper labour and cheaper electricity, but Mozal's combination of an efficient harbour, competitive power supply, good raw materials (alumina from BHP in Australia), legislated investment incentives from the Mocambiquan government and quality people and integration had given Mozal an edge.


Hydro Aluminium Sign Long-Term Aluminium Supply Deal with Talum
Azom.com Posted October 9th, 2003

Hydro Aluminium have entered into a long-term purchase agreement with Slovenian aluminium producer Talum. Under the agreement, Talum will supply Hydro with 70,000 tonnes of foundry alloy products over the next seven years.

The new agreement will commence on January 1, 2004 and run until 2010. It also builds on existing relationships that see Hydro supply Talum with alumina for primary aluminium production.

Furthermore, the new agreement is in addition to an exiting arrangement whereby Talum is supplying Hydro with approximately 50,000 tonnes of extrusion ingot.


No plans yet for Mozal III

Business Report, Africa October 9, 2003

By Sherilee Bridge

Maputo - BHP Billiton would only consider building a Mozal III nearer the end of this decade, the world's largest resources group said yesterday.

The company believed the aluminium market would be well supplied through to 2008. Only then would it evaluate adding extra capacity.

Mozal II, the expansion project to double the Mozambican aluminium smelter's production to 500 000 tons a year, was officially opened yesterday.

The $860 million expansion, which pushes Mozal into third position among the world's top three aluminium producers, has been delivered seven months ahead of schedule and $195 million under budget.

The $1.2 billion first phase took 31 months to develop and was $100 million under budget.

BHP Billiton has said that, on a cost per unit basis, it has decided to pursue brownfields rather than greenfields expansion. This means it would evaluate projects at existing operations before starting something new.

Peter Wilshaw, the general manager of Mozal, said its expansion meant the smelter would account for 2.5 percent of global aluminium production.


Besides Mozal, BHP Billiton was close to completing Hillside 3, the expansion of its capacity at its smelter complex near Richards Bay.

Together, BHP Billiton's three aluminium smelters in southern Africa - Mozal, Hillside and Bayside (also in Richards Bay) contribute 7 percent to global aluminium production of 21.1 million tons.

"Aluminium is a mature market and as such grows in line with global economic growth, which is at 2 percent to 2.5 percent a year," said Wilshaw.

At current world aluminium production rates, Wilshaw said the expansion at Mozal had an incremental effect of adding about half-a-year's growth to the supply side of the industry.

Michael Campbell, a BHP Billiton spokesperson based in Johannesburg, said the site of the company's next aluminium investment would be determined by access to cheap electricity and a deep-water port.

Mozal II is one of the world's lowest-cost aluminium producers. Wilshaw said the combination of an efficient harbour, competitive power supply and investment incentives made it more competitive - for the moment.

Icelandic dam saga raises hope and dread

Valletta Times, Malta, Reuters, 11 Oct 2003

The first snow falling in the Icelandic highlands and the piercing wind are not slowing down the hundreds of foreign workers building Europe's highest dam in one of its biggest wildernesses.

Iceland's largest-ever industrial project by the national power company Landsvirkjun is a saga of superlatives, hailed by ministers and local politicians. Yet it has whipped up a row about the environment among the population of under 300,000.

The project will increase the North Atlantic island's energy output by 60 per cent but it will have just one customer, an Alcoa aluminium smelter which should be up and running in 2007.

The Karahnjukar dam, which will be 190 metres high, 730 metres wide and 600 metres thick, will damage the area's unique nature forever, environmentalists say.

"The project is too big for the nature up there and for the region," said Thurdur Backman, a Left-Green party representative in parliament. "We who have another view on how to use nature had hoped to set up a national park there."

But a clear majority of local people support the project, saying building the power plant and the smelter are the only ways to create growth and jobs in a remote region.

The plant will have a capacity of 690 MW and an annual output of 4,460 million GWh, a significant size on a Nordic scale.

To feed it, Landsvirkjun is harnessing two of the three main rivers flowing from Europe's biggest glacier, Vatnajokull. Three dams will create a 57 square-km reservoir - a rare project in Europe where few dams have been built in recent decades.

Opponents of the project say it would drown the highland vegetation, alter the groundwater balance and collect so much mud that it would form a dust bowl in dry conditions, choking the nearby town in windy weather.

Organisations such as the Icelandic Nature Conservation Association say the reservoir would disturb the area's reindeer, freshwater fish and harbour seal population and ruin approximately 500 nesting spots of the pink-footed goose.

To add to the messy saga, Impregilo, the Italian firm building the dam and tunnels for the plant for 40 billion Icelandic crowns ($517 million), has run into trouble with local unions which say it is not paying imported workers enough.

The construction of the dam will employ around 1,500 workers, as many people as the population of nearby Egilsstadir. Hundreds, some with families, have already come from Italy, Portugal and Romania to work here. They live in a remote highland camp, a 1-1/2-hour drive from Egilsstadir.

Cosmopolitan influences have reached the tiny town - pubs now publish adverts in English, and restaurants are packed on Sundays.

The 322,000 tonne smelter itself, an investment of $1.1 billion, will be built in Fjardabyggd, some five kilometres outside Reydarfjordur, a drowsy town of 600 people.

Real estate prices have already started rising there. "I understand the people who oppose Karahnjukar, but I don't agree with them. I think it's more important to get new jobs in the east," said Fjardabyggd mayor Gudmundur Bjarnason.

The biggest local industry is fishing, but fish factories have modernised production, making them less dependent on manual labour. Farming is a shrinking industry in the hostile climate, and the tourism season lasts a mere three months.

As employment opportunities have declined, the region has lost one per cent of its population each year to bigger cities.


Alcoa returning Brazil smelter to normal

Pittsburgh Business Times, PA 10/14/03

Alcoa Inc. said Tuesday it has begun to resume production at South American aluminum smelter hobbled by a power outage over the summer.

Pittsburgh-based Alcoa, the world's largest aluminum producer, said it was restarting production at its jointly owned Alumar plant in Sao Luis, Brazil. A power disruption in July knocked out about 40 percent of the plant's production.

Alcoa owns almost 54 percent of the smelter, which has a capacity of 370,000 metric tons per year. BHP Billiton Group, based in Melbourne, Australia, owns the remainder.

Alcoa said it expected to take a $14 million hit, after taxes, related to the outage. The costs will be split evenly between the third and fourth quarters, the company said.


Alcan chooses firms for study of Gove expansion

Reuters, 10.15.03, 10:50 AM ET
MONTREAL, Oct 15 (Reuters) - Alcan Inc. <AL.TO> (nyse: AL - news - people) said on Wednesday it has chosen a joint venture of two companies for a feasibility study on its proposal to expand its Gove alumina refinery in northern Australia by 75 percent.

Alcan, preparing to begin its 4 billion euro ($4.7 billion) takeover bid for French rival Pechiney <PECH.PA>, said the joint venture of SNC-Lavalin Group Inc. <SNC.TO> and Australian company Leighton Contractors Pty will do the definitive feasibility study, which precedes engineering, procurement and construction management of the project.

SNC-Lavalin is Canada's largest engineering and construction group.

Alcan's potential expansion at Gove would increase its capacity of smelter-grade alumina production from 2 million tonnes a year to about 3.5 million tonnes a year. Alumina, a powder-like material, is derived from bauxite and a key ingredient for making aluminum.

Alcan said it expects to complete all studies on the project by mid-2004, and the expansion could take three years to complete, with the increased alumina production capacity available in 2007.

Alcan shares were off 73 Canadian cents at C$55.67 on the Toronto Stock Exchange on Wednesday morning.

($1$1.32 Canadian)

Copyright 2003, Reuters News Service

Research 'will spur aluminium industry'

Gulf Daily News, Bahrain 15 Oct 2003

By TARIQ KHONJI

MANAMA: Bahrain must set up a research and development centre if it is to become a leader in exporting finished aluminium products, a visiting Japanese expert said yesterday.

Tokyo Technologist Union Incorporated president Kotaro Kashima told local businessmen that Bahrain should take advantage of its competitive advantage in the aluminium industry.

"Right now Bahrain is a follower. It has to catch up with advancements made in other parts of the world," he said.

"But with a proper research and development centre it could come up with its own aluminium processing techniques and become one of the leaders."

Mr Kashima said that such a facility should be a joint project between the government and the private sector and estimated its cost at around $1 million (BD378,000).

He was speaking to representatives of 10 aluminium processing companies at a one-day seminar held at the Sheraton Hotel.

Mr Kashima was invited to Bahrain by the Industry Ministry, the Japanese Embassy and the Japan External Trade Organisation (Jetro).

He spoke about Japan's high aluminium product standards and ways in which local companies could modify their practices to meet them.

Industry Minister Hassan Abdulla Fakhro said that incorporating these standards will help Bahrain tap into other markets.

"When these companies are capable of entering the Japanese market, with all its sophistication and high standards, it will hopefully enable them to widen their marketing scopes and areas of interest to cover other markets in Asia and beyond," he said.

Bahrain's aluminium exports to Japan last year totalled BD22,994,576 and consisted mainly of the raw form of the metal or slightly processed goods.

Bahrain has a competitive advantage because aluminium processing in Japan is expensive due to high energy costs.
 

Dying NW primary aluminum capacity still has life

Reuters, 10.16.03, 4:10 PM ET

By Carole Vaporean

NEW YORK, Oct 16 (Reuters) - Alcoa Inc.'s (nyse: AA - news - people) decision on Wednesday to reduce aluminum production at its Washington smelter could be seen as the dying gasp of a local industry, but smelting in the region could be revived if electricity costs comes down and aluminum keeps rallying, analysts said.

Even so, they add, primary aluminum production in the U.S. Pacific Northwest would only operate as a mere shadow of its former self, and would likely serve as "swing capacity."

"Anything can happen. If Chinese consumption remains extremely strong and you have a U.S. recover followed by a European recovery, everything may converge to the perfect storm, and you get great aluminum prices. But, outside of that?," said one European bank analyst.

"Ultimately, you're not going to see a lot of smelting production in the Pacific Northwest going forward," he added.

The high cost of power generated by the region's Bonneville Power Administration (BPA) was cited by Alcoa as the main reason for cutting output at its Ferndale, Washington, plant, the same reason that gutted capacity in the region that, just 2-1/2 years ago, generated about one-sixth of the world's primary aluminum supply.

Skyrocketing electricity prices in 2001 forced BPA into high-cost contracts that it must pass on to the aluminum producers. On October 1, after conducting its semi-annual rate review, BPA increased those power rates by an average 2.2 percent to $35.2 per megawatt hour, plus transmission costs.

Analysts point out that aluminum producers found it difficult to operate when power was offered at $10/MWh less.

Currently, only Alcoa's majority-owned Intalco smelter operates at a 110,000-tonne-per-year rate that will be slashed to 90,000 tonnes at November 1 out of 278,000 total capacity. And privately-held Glencore's Columbia Falls smelter runs one of five potlines at an annual rate of about 34,000 tonnes.

The total 124,000 tonnes of aluminum output will compare with about 1.6 million tonnes generated just three years ago.

While aluminum on the London Metal Exchange ended Thursday at levels not seen since June 2001, many analysts agree with Daniel Roling, metals and mining analyst at Merrill Lynch, when he said, "I believe the vast majority, upwards of a million tonnes, will be leveled and never produce aluminum again."

"Labor costs and benefits are not going down. Power rates are fairly high. You're going to need a good strong aluminum price to get these things started," said an aluminum analyst.

Roling and others, noted, however, that in 1988 the price of aluminum hit $4,277 a tonne on the LME. "So, there is a price at which aluminum smelting would be profitable," he said, acknowleging that it may be well below that long-term high.

On Thursday, 3-month aluminum ended in London at $1,505 a tonne, well up from November 2001 lows around $1,250 a tonne, but still a long way from early 2000 highs at $1,750.

Electricity costs were soaring about 2 years ago when aluminum prices were tumbling to multi-year lows.

Roling said Merrill Lynch uses $1,500 as bare minumum long-term breakeven rate for justifying building a brand new, state-of-the-art smelter tied to low cost electricity.

"And in the Northwest it's not new, it's not modern technology, it's not a low-cost smelter. It's old. It's got old equipment, which means it needs more people, it needs more environmental refurbishing," Roling said.

A pending lawsuit could require BPA to lower its prices by as much as 7 percent, a BPA spokesman said. A proposed settlement is due on Friday, pending necessary approvals.

Some plants in the region have already been dismantled, some are being mothballed, and the trustee for a bankrupt Longview, Washington, plant said he will either have a bona fide buyer for the plant by Friday or it goes on the auction block.

With alumina margins yielding exceptionally high rates these days, producers of the raw material like Kaiser Aluminum have a much greater advantage by selling into the spot market than they would by using alumina for their own production.

"We think alumina is tight for another 2-plus years, so it will be difficult to bring those (smelters) back on" said an analyst at a U.S. investment bank.

Others like Stewart Spector, aluminum analyst of the Spector Report, said he thinks any companies that are determined to hold on in the region would operate their smelters in a swing capacity, giving them flexibility when the time is right.

"If demand is up and the price is up and they feel confident enough that the price is going to be sustained, they could start it up (as a swing operation)," said Spector.

Another analyst said he asked Alcoa point blank, "Does swing capacity have a place in your portfolio?' and they said, 'Yes.'"

Copyright 2003, Reuters News Service

Alumina to decide on investment in Bahrain next year

Gulf News, United Arab Emirates Melbourne |Reuters | 16-10-2003

Australia's Alumina Ltd said yesterday it would decide by mid-2004 on an investment in a Bahrain aluminium smelter project in which its joint venture partner Alcoa Inc proposes to take a key stake.

Alcoa has signed a non-binding memorandum to buy as much as 26 per cent of Aluminium Bahrain (Alba), enabling the smelter to boost production capacity to more than one million tonnes a year by adding a sixth production line.

Alumina Ltd, which already has interests in the Australian Point Henry and Portland aluminium smelters, is separately deciding if it will take equity in the Bahrain project.

"We would expect a decision probably before the middle of next year," an official told a Securities Institute breakfast.

Alumina is a 40 per cent stakeholder in the Alcoa World Alumina and Chemicals (AWAC) venture, the world's largest producer of alumina, in which Alcoa holds 60 per cent.

Alba said in September that the value of the stake under negotiation with Alcoa was around $600 million. The official declined to indicate the level of spending that Alumina would consider.

The Alba smelter is one of the largest customers for AWAC, which accounts for about 25 per cent of world alumina production.

Alcan to create 50 jobs at new $150-million treatment plant in Saguenay

Canada.com, Canada Friday, October 17, 2003

MONTREAL (CP) - Aluminum producer Alcan Inc. will create 50 jobs by building a new $150-million aluminum waste treatment plant in the Saguenay Lac St-Jean region of northeastern Quebec.

The Montreal-based company announced Friday it has developed a new way to treat so-called spent potlining, or SPL - a waste material produced in the smelting of primary aluminum.

Construction is expected to begin in the second quarter of 2004, pending governmental approvals.

"The technology we will be using at this plant was developed by Alcan's R&D team in the province of Quebec," said Cynthia Carroll, president of Alcan's primary metals group. "This home-grown technology will not only treat the SPL, but also completely recycle the component substances. The new plant will be an example for the rest of the aluminum industry."

Alcan said the new plant, which will have a capacity of 80,000 tonnes per year, will cut the company's treatment costs and will provide commercial opportunities to treat waste from other aluminum producers.

Jean Simon, with Alcan's primary metal group, told a news conference the technology was developed locally and has been tested.

"It's a project that respects the environment," Simon told a news conference in Saguenay, Que.

Simon called it a durable, long-term solution for spent potlining, adding it will transform a dangerous product into several harmless byproducts.

Spent potlining is the waste material removed from the bottom of electrolytic cells used to produce primary aluminum. Over their five-to-eight-year lifespan, chemicals accumulate in the lining of the cells during smelting. The lining must be treated or stored in line with government regulations.

Alcan said finding an effective way to treat SPL has been a crucial environmental issue for the aluminum industry.

Alcan (TSX:AL) is one of the world's biggest aluminum producers, with 2002 revenues of $12.5 billion US and 54,000 employees around the world.

© Copyright 2003 The Canadian Press


Alcan Develops a Value-Creating and Sustainable Solution for Treating Industrial Residue

New treatment plant in the Saguenay will create 50 direct jobs

Canada NewsWire (press release), Canada Friday October 17, 2:32 pm ET

MONTREAL, Oct. 17 /PRNewswire-FirstCall/ - Alcan Inc. (NYSE, TSX: AL - News News) today announced it has developed a value-creating and sustainable solution for the treatment of spent potlining (SPL) and will invest up to CAN $150 million in the construction of a treatment plant in the Saguenay - Lac-Saint-Jean region.

"We are particularly proud since the technology we will be using at this plant was developed by Alcan's R&D team in the province of Quebec," said Cynthia Carroll, president of Alcan's Primary Metal Group. "This home-grown technology will not only treat the SPL, but also completely recycle the component substances. We have here a great example of Alcan innovation and our commitment to finding sustainable and financially attractive solutions. The new plant will be an example for the rest of the aluminum industry."

The 80,000-tonne-per-year treatment facility will be built in Saguenay and will create 50 new direct jobs in the region. It will use Alcan's Low Caustic Leaching & Liming (LCLL) Process. Construction is expected to begin in the second quarter of 2004.

The new treatment plant will reduce Alcan's treatment costs and will provide the opportunity to treat the SPL of other aluminum producers.

"Most aluminum producers are wrestling to find a way of treating SPL that also creates value," continued Ms. Carroll. "Using the principles of Maximizing Value, Alcan identified LCLL as the most attractive option and moved forward with further developing the technology."

Alcan will now proceed with obtaining the necessary governmental and environmental authorizations, and is encouraged by the interest of both federal and provincial governments, which have already recognized the value of the technology and the potential for commercialization.

Spent potlining is the material removed from the bottom of electrolytic cells used to produce aluminum. Over the course of their five-to-eight-year lifespan, various chemicals accumulate in the lining of the cells during smelting. The lining must be treated or stored in accordance with government regulations. Finding an effective way to treat SPL has been a crucial environmental issue for the aluminum industry.


S.Africa's Hulett says to defend Alcoa petition

Reuters, 10.17.03, 10:54 AM ET

JOHANNESBURG, Oct 17 (Reuters) - South Africa's Hulett Aluminium said on Friday it would defend an anti-dumping petition filed by the world's largest aluminium producer, Alcoa (nyse: AA - news - people) Inc. of the United States.

Hulett, part of food and aluminium group Tongaat-Hulett <TNTJ.J>, questioned the background to a petition announced by Alcoa on Thursday, which cites unfair trade practices in exports of aluminium alloy rolled plate to the United States.

"The market segment cited by Alcoa in its antidumping petition constitutes less than one percent of the total United States market for aluminium rolled products and Hulett Aluminium has expressed its surprise at Alcoa 's claim of injury to the local industry," Hulett said in a statement.

"No petition has been filed against Chinese and Russian producers who tend to offer the lowest prices in the United States. Hulett Aluminium will defend the antidumping petition filed by Alcoa," it added.

Hulett said its share of the worldwide market for rolled aluminium products was less than 1.2 percent.

Alcoa said its petition, filed with the U.S. Department of Commerce and the U.S. International Trade Commission, showed Hulett was exporting aluminium plate to the United States at sharply lower prices than it charges in its home market.

But Hulett said it did not sell the product concerned in its home market.

"The particular product specified by Alcoa is aluminium rolled plate, alloy 6061, with a thickness greater than 0.25 inches (6.3 mm), which is not sold in South Africa by Hulett Aluminium," Hulett said.

The product is used in general-purpose engineering, tooling and die applications. Pittsburgh-based Alcoa said Hulett Aluminium had captured a significant share of the U.S. market since dramatically expanding its shipments there in 2000.

Alcoa said Hulett's sales were unfair and damaged the U.S. industry by eroding market prices below sustainable levels.

Alcoa, bankrupt producer Kaiser Aluminum Corp. <KLUCQ.OB> and Pechiney <PECH.PA> are the main U.S. producers of 6000-series plate, Alcoa 's statement said.

Copyright 2003, Reuters News Service


Zalk supplies 3,500 tonnes of alumina to Tajik aluminum works monthly as of Sep

Interfax, Tajikistan 17.10.2003 15:04:00 GMT

As of September Zaporizhia Aluminum Mill supplies the Tajik Aluminum Works with 3,500 tonnes of alumina monthly.

First deputy board chairman of the open-end JSC ZAlK and deputy director general of the closed-end JSC AvtoVAZ-Invest (Russia) Sergey Petrov disclosed this to the agency.

In his words, the company supplies through intermediaries. "It is possible that intermediaries earn well, but they also undertake all the risks on these supplies," he said and noted that in this case serious risks may be involved with timely pay for supplied products.

Petrov added that due to supplies to Tajikistan the Mill increased production of alumina.

He also said the Mill accumulated a great stock of bauxites for winter work.

As reported earlier, in 2003 the Mill is planning to buy 200,000 tonnes of bauxites in Brazil and 319,000 tonnes in India. It is to produce 214,000 tonnes of alumina from 519,000 tonnes of bauxites. The monthly need of the Mill in bauxites makes nearly 50,000 tonnes. The Mill's annual capacity is about 100,000 tonnes of prime aluminum.

The Russian AvtoVAZ-Invest owns 68.01% of shares of the open-end JSC ZAlK, the state - 25%, other shares are distributed among small shareholders.


Alumina to increase production

Sydney Morning Herald, Australia October 17, 2003

Alumina will share in the benefits of an increase in production for its Alcoa joint venture in 2004, Alumina chief executive John Marlay said.

Alumina, which split from WMC Ltd in December last year, has as its sole asset a 40 per cent interest in the Alcoa World Alumina and Chemicals (AWAC) joint venture.

Mr Marlay told an Australian Securities Institute briefing that AWAC's growth options included a gradual increase in capacity across its entire network, with brownfield expansion options expected to exceed three million tonnes.

Expansions in place would raise production in 2004, he said, with strong demand expected to increase as AWAC benefited from Alcoa's expansion in Asia and the Middle East.

Reports out of China last month said Alcoa and Aluminum Corporation of China Ltd (Chalco) had received permission to form a 50:50 joint venture at Chalco's facility at Pingguo, one of the most efficient alumina and aluminium production sites in China.

This followed Alcoa's announcement it had signed a memorandum of understanding to acquire up to a 26 per cent interest in the Middle Eastern Alba aluminium smelter.

The memorandum includes a long-term supply agreement for the Alba smelter providing AWAC with the possibility of adding extra 1.2 million tonnes a year to its existing one million tonne a year alumina supply contract, with Alumina to benefit as a result.

As well, Alcoa is considering building a $US1.2 billion, 300,000 tonnes a year aluminium smelter in Brunei which could fuel expansion at West Australian refineries.

The smelter would require about 600,000 tonnes of raw materials a year which could be sourced from AWAC's Pinjarra and Wagerup refineries in nearby Western Australia.

AWAC has already begun plans to make WA the world's leading alumina producer with a $400 million expansion of the Pinjarra refinery to more than four million tonnes.

Mr Marlay said AWAC aimed to further reduce costs at Pinjarra.

Meanwhile production at the venture's 55 per cent-owned Paranam alumina refinery in Suriname, South America was expected to increase by 250,000 tonnes a year, with AWAC's share about 137,500 tonnes.

He said China had emerged as a major aluminium producer with demand for raw supplies including alumina increasing by 15.5 per cent between 2002 and 2005.


BAUXITE PRODUCTION BY NALCO UP 44,675 TONNES

Press Information Bureau (press release), India 21-Oct-2003

Public Sector National Aluminium Company Limited (NALCO) of the Ministry of Mines produced 404,675 tonnes of bauxite against a target of 360,000 tones during the month of September 2003. The production in August 2003 was 356,669 tonnes against a target of 3,30,000 tonnes.

Bauxite transportation during April to September 2003 has been 21,34,165 tonnes exceeding the target of 19,85,000 tonnes. The cumulative transportation upto August was 17,29,490 tonnes against the target of 16,25,000 tonnes.

Alumina production during the month has been 1,05,400 tonnes against the target of 1,20,000 tonnes. The company produced 1,28,500 tonnes alumina during the month of August 2003. Cumulative production of alumina upto September was 7,33,800 tonnes against 6,28,400 tonnes upto August. The production of aluminium cast metal during September has been 24,984 tonnes exceeding the target of 23,200 tonnes, bringing cumulative production to 148,102 tonnes against the target of 141,200 tonnes. The cumulative production has been 27 per cent more compared to the same period last year.


EU aluminium levy 'outdated'

Business Report, Africa October 21, 2003 By Reuters

London - A 6 percent duty levied on imports of primary aluminium into the European Union (EU) is outdated, unfair on consumers and should be disposed of as soon as possible for the industry to move on, analysts say.

Angus MacMillan, a minerals strategist at Prudential Bache International, says the duty is "a bit of an anachronism, a throw-back to a bygone age".

It seems ridiculous that independent smelters should be penalised by this import duty, to the advantage of European integrated producers, he says.

The duty is meant to protect European aluminium producers. MacMillan says that given the way the aluminium industry has moved in recent years, "it does seem ridiculous that one can import from South Africa duty-free but not from the Middle East.

"The quicker this anomaly is gone the better."

The Federation of Aluminium Consumers in Europe, a lobby group, has long argued that the import duty distorted competition and penalised non-integrated independent manufacturers.

The federation, which represents 44 aluminium consumers across the EU, blames lost revenues amounting to hundreds of millions of euros a year on the duty.

Roger Bertozzi, the spokesperson on EU and World Trade Organisation affairs at the federation, says:

"If there was no tariff, aluminium would cost the same as elsewhere in the world and it would be a fair, level playing field."

"But instead we're competing against integrated producers and there's a massive distortion of competition."

Robin Bhar, a base metals analyst at Standard Bank London, agrees.

"The sooner [the duty] is abolished, the sooner there will be a more level playing field to allow global trends to reassert themselves. The duty does skew the market place."

"In this era of World Trade Organisation and tariff reduction, it stands as an anachronism."

Moves to amend the duty have gained the backing of 12 EU member states, but have consistently run into opposition from the French authorities, which have vetoed the proposal.

But with Alcan takeover of French rival Pechiney set to go ahead, France would no longer have the grounds to maintain its veto, the federation said.

It said in a recent press release:

"There has never been any sound economic argument to justify France's abusive veto to the request of the suspension of the EU 6 percent duty. Now there is also no more political reason to do so, against EU interests, policies and principles."

It asked the French government "to remove immediately its illegitimate veto".

Bhar says those resisting the abolition of the duty will have to face up to reality.

"There is some resistance from the likes of Pechiney, but most people would agree it does stand out, and hopefully it's on its way out."

The federation said that with the purchase of Pechiney by Alcan, the EU would become a totally captive market whose entire production of primary aluminium was consumed by the three major integrated groups: Alcan, Alcoa and Norsk Hydro.

Europe's dependence on imports of primary aluminium will grow from 60 percent to 70 percent with the accession of 10 candidate countries from eastern Europe.

The EU independent transformers and consumers of aluminium depended totally on imports for their needs, which amounted to about 2.7 million tons a year of primary metal, the group added.

Bertozzi says his group's legal views are well known and the federation is still prepared to fight if the unthinkable happens and France maintains its veto.

"The tariff is like a state policy. Nobody likes to go to court, but we can't just sit down and watch companies collapse," he says.

Stephen Briggs, a metals analyst at Socgen, says the elimination of the aluminium import duty is inevitable at some point.

"In effect, it's a tariff barrier which subsidises the European smelting industry," Briggs says, but adds that the duty is unlikely to disappear overnight.

"I think it will happen, but it will be slow."


China Eyes Australia's Alumina Industry

AUSTRALIA PRESS: Thursday October 23, 6:17 AM

SYDNEY (Dow Jones)--China could be set to dive into Australia's alumina industry in the wake of the Queensland government's decision to order France's Pechiney SA (PY) to surrender bauxite leases in Cape York in the state's north, the Australian newspaper reports Thursday.

The newspaper says the Queensland decision came ahead of the signing Friday of a cooperation agreement between the China Nonferrous Metals Industry's Foreign Engineering & Construction Co. (000758.SZ) and Australia's Aldoga aluminum smelter.

The report adds that Queensland Premier Peter Beattie is scheduled to meet Chinese President Hu Jintao on Monday.

Newspaper Web site: http://www.theaustralian.com.au


China eyes huge mining stake

Brisbane Courier Mail, Australia 23oct03 By Nigel Wilson

CHINA could become a powerhouse in Australia's alumina industry after the Queensland Government yesterday ordered giant French group Pechiney to surrender a mining lease on Cape York containing an estimated $25 billion worth of unexploited bauxite.

The action, unprecedented by an Australian government, clears the way for China's aluminium industry to crack the international aluminium cartel by securing an interest in a major bauxite deposit.

Mr Beattie is scheduled to meet Chinese President Hu Jintao in Cairns on Monday.

The Premier said state cabinet had made the decision on Monday because Pechiney had "mothballed" the Aurukun reserves for 28 years.

"We can't have mining resources just mothballed. Pechiney had this lease for 28 years," Mr Beattie said.

"Governments plan hospitals and schools on the basis of the revenue they receive from resources, and when they are not developed, government revenue suffers."

The decision was announced ahead of the signing in Canberra tomorrow of a co-operation agreement between the government-owned China Nonferrous Metals Industry's Foreign Engineering& Construction Company and Aldoga Aluminium Smelter, a private group developing a $3billion smelter at Gladstone on Queensland's central coast.

A series of agreements is expected to be signed alongside the formal announcement of a trade and economic framework agreement between Australia and China.

China is keen to buy stakes in projects that supply its booming manufacturing industries, including the West Australian iron industry and the North West Shelf gas project, which last year won Australia's biggest-ever export contract when it locked in a $25 billion liquefied natural gas deal with China.

Mr Beattie said yesterday Pechiney could reapply for the Aurukun reserves - about 500 million tonnes of bauxite - through the proposed international search for expressions of interest in their development.

The Queensland action will put pressure on the West Australian Government, which has development agreements covering world-class bauxite reserves on the Mitchell Plateau, north of Derby, that have been dormant for decades.

Mr Beattie said that under the terms of the 1975 Aurukun Agreement legislation, Pechiney was obliged to build an alumina refinery by 1988. It had failed to do so and still had not confirmed plans for a refinery.

The Government has written to Pechiney demanding that the lease, ML7032, be surrendered by midday tomorrow.

Pechiney Pacific managing director Andre Greis said in Sydney that the company "did not want to comment at this time".

Queensland State Development Minister Tom Barton said discussions had been held with Pechiney over the past two years aimed at securing the company's commitment to the terms of the Aurukun Associates Agreement.

He confirmed the Government had been approached by several organisations concerning development of the Aurukun bauxite but emphasised that no undertakings had been given to any organisation about the future of the reserves.

John Benson, the managing director of Aldoga Aluminium Smelter, welcomed the decision.

"Aldoga will sign a co-operation agreement in Canberra on Friday with the China Nonferrous Metals Industry's Foreign Engineering & Construction Co (NFC) which will underpin investment by both parties in bauxite and refinery opportunities in Australia, with NFC as an equity partner," he said.

Aldoga would definitely respond to the call for expressions of interest.


With Pechiney bid Alcan's expansion bag's full

REUTERS[ WEDNESDAY, OCTOBER 22, 2003 11:38:49 PM ]

MONTREAL: Alcan is reviewing a rich portfolio of expansion and greenfield projects even as it proceeds with its 4bn euros ($4.7bn) bid for French rival Pechiney, the Canadian aluminum maker’s chief executive said.

“As a general rule, we have a large file of active projects we are pursuing,” Travis Engen, who is also the president, said.

Alcan has had to downplay comments by an official at an Oman state-owned oil concern that it had committed to taking up a major equity stake in a proposed $2.5bn aluminum smelter in Oman.

That project, which under its original plan called for Oman to build a 530,000 tonne aluminum smelter with a foreign partner, is just one of several Alcan is examining worldwide. “In addition to the one in Oman, which is proceeding through normal investigative and engineering phases, no final decisions have been taken there, we also have been exploring a joint venture and investment in China that’s reaching a decision point here very soon,” Engen said. In June ‘02, Alcan said it would help Qingtongxia Aluminium upgrade its plant in northern China. Under that agreement, Alcan can acquire a 50% stake in the 130,000 tonne smelter and take up an option for a 50% holding in a 150,000 tonne expansion. Alcan has given the green light for a feasibility study on expanding its Gove alumina refinery in Australia by 75% to produce 3.5 million tonnes a year. If successful in acquiring Pechiney, Alcan will also have to decide on the Paris company’s plan to take up a 49% stake in the proposed Coega aluminum smelter in South Africa.

Engen said Alcan’s offer for Pechiney, already open in France, should open in the US in a matter of days pending a green light by the US Securities and Exchange Commission.

“What is pacing that is Pechiney answering some questions that were raised earlier this year with the US SEC about the accounting treatment of some things. That is being clarified,” Engen said.

“All of that says that the offer should close toward the end of November and then there is a week or so to count the results.”

Engen said Alcan is able to examine expansion and greenfield opportunities because of its healthy balance sheet and cash flow.

“We have the strongest balance sheet in the industry and after we are successful with Pechiney, that will not be the case. But we fully expect that our strong cash flow will allow to get back to similar levels of strength in 2-3 years,” he said.

In its third quarter, Alcan’s cash from operations rose to $560m from $420m a year earlier.


RusAl deal baffles Moscow

Russia Journal, Russia October 06, 2003 Posted: 12:55 Moscow time (08:55 GMT)

By John Helmer

MOSCOW - The public announcement today [Friday] by Russian Aluminum (RusAl) that Oleg Deripaska "will acquire a further 25 percent stake in the company from the core shareholders in Sibneft" has baffled investment bankers and metals analysts in Moscow.

The announcement follows the recent denial by Deripaska's representatives of a Moscow press leak claiming that he and Roman Abramovich had agreed on a deal for Deripaska and his Base Element holding to buy Abramovich's stake in RusAl for more than $3 billion.

The latest announcement by RusAl says that the transaction price is "confidential." The price of Deripaska's transactions involving the accumulation of RusAl's assets since 2000 has never been disclosed, nor have the payment terms and Deripaska's means of paying for them. RusAl owns the Bratsk, Krasnoyarsk, Sayansk and Novokuznetsk aluminum smelters; the Achinsk and Nikolayev alumina refineries; the Samara Metallurgical Combine; and other plants turning out foil, beverage cans and other aluminum products. The assets have yet to be consolidated into a single shareholding.

A Moscow investment banker involved in metals transactions told The Russia Journal that "it has been well-known that Abramovich has wanted to sell out, but that other shareholders from the Sibneft group did not. Anyone with more than a three-year view of Russia's future would not want to sell."

A source at Millhouse Capital, Abramovich's holding company, told The Russia Journal last week that the press leaks about the deal had originated from people close to Deripaska. He added that these were exaggerated. Since the first public speculation of a deal began more than three months ago, he said, "nothing has been happening, and I don't think that the situation has changed seriously now. I don't exclude the possibility that the share in RusAl will be sold." He added that "it is not only up to [Abramovich] to decide on the sale of assets," the source said, "as different shareholders may have different interests."

The banker told The Russia Journal that his institution is "baffled" by the latest announcement from Deripaska. "Abramovich had more than 25 percent to sell, but less than 50 percent," he said. "The reason Deripaska has bought only 25 percent is probably that he could not pay for more. As it is, we do not know how he will pay the $1 billion to $1.5 billion price the stake is estimated to be worth."

There had been unconfirmed speculation in Moscow last week that Deripaska was seeking Abramovich's agreement to a purchase of his RusAl stake on an installment plan, with cash generated from RusAl's annual metal sales, which are in excess of $3 billion.

A RusAl source confirmed that RusAl's current borrowings, including bonds on issue and a newly announced trade secured loan from Credit Suisse First Boston of $100 million, add up to about $1.5 billion. The source declined to provide further details of its indebtedness or leveraging. According to the RusAl announcement of the Deripaska acquisition, "the company reaffirmed a previously expressed intention of considering a Eurobond issue within a one- to three-year timeframe and a possible public flotation at a later stage."

Millhouse told The Russia Journal that the group does not have an official spokesman at the moment, because last week's spokesman is no longer with the company. The group said that it cannot comment on Deripaska's press statements about the latest transaction.

According to the announcement from Deripaska, the remaining holders of the 25 percent stake not acquired by him "will relinquish all representation on the RusAl board, to be replaced by Basic Element representatives."


Russian metals company runs short of cash

Asia Times Online, Hong Kong Oct 23, 2003

By John Helmer

MOSCOW - Russian Aluminum (Rusal), one of the world's largest suppliers of primary aluminum and a major exporter to the Asian market, is running low on cash as Russian executives try to negotiate new Western and Russian credit lines.

The financial maneuver shines a spotlight onto the rarely penetrated financial secrets of one of Russia's metals oligarchs. In the oil sector, the public accounts of other oligarch-owned Russian corporations have revealed massive dividend payments to the controlling shareholders this year, as billions of dollars in cash have been moved into safe havens offshore. But this is the first time the metals sector has been opened up, and the financial operations of Oleg Deripaska, Rusal's CEO, exposed to similar scrutiny.

Rusal has disclosed in the past that its accounts are audited by PriceWaterhouseCoopers, and are prepared according to the United States Generally Accepted Accounting Principles (GAAP). However, there is no public release of the data. A spokesman for Richard Buskin, managing partner of PriceWaterhouseCoopers in Moscow, refused to say whether the company is auditing Rusal for 2003. Rusal's website provides almost no corporate financial data, except for an approximation of its aggregate sales revenues per year around US$4 billion. The website also reports that the company "has made a significant commitment to become transparent, open, and communicative."

Rusal produces 70 percent of Russia's aluminum and 10 percent of the global supply. China, Japan and South Korea are its biggest clients in Asia, although a switch to exporting aluminum, starting last year among Chinese producers, has put a multi-million dollar crimp in Rusal's export sales.

The liquidity problem at Rusal follows in the wake of a transaction at the start of this month, when Deripaska acquired 25 percent in the company from partner and fellow-shareholder Roman Abramovich. Deripaska and Abramovich are well-known in Russia as oligarchs, who gained their wealth through their ties to ex-President Boris Yeltsin, his family, and cronies. Before the latest deal, Deripaska and his associates already held 50 percent of Rusal through their holding company, Base Element.

Millhouse, the holding company which Abramovich and his associates own, retains 25 percent of Rusal, but will lose its four seats on Rusal's 8-seat board of directors.

New company balance-sheet details for Rusal, disclosed by a Moscow source who confirms their authenticity, indicate that Rusal has been advancing substantial short-term loans to entities reported as "related parties". In 2002 these loans totaled $980 million. Over the year, the balance-sheet documents claim, $694 million of these loans were repaid.

The newly disclosed balance sheet reveals that as of December 31, 2002, Rusal held just $98 million in cash at hand. This was up from $37 million a year earlier. The source said that "cash has been taken out in great volume from Rusal in dividends for shareholders and in loans to related parties." The source estimates that at the end of the third quarter of this year, Rusal's cash position was under pressure to sustain a loan to Base Element for Deripaska's purchase from Abramovich.

Rusal sources indirectly acknowledge that their liquidity position requires a temporary loan. Oleg Mukhamedshin, Rusal's finance director, told Asia Times Online late last week that the company "expects to get bridge financing in the amount of at least $200 million in the next few weeks."

He explained that since Deripaska's transaction a fortnight ago, a larger financing agreement with Rusal's western bank,s has been "slightly postponed by Rusal in September because of the expected change in shareholder structure".

Although Mukhamedshin did not reveal the value of the transaction, he acknowledged that "this transaction was completed with a 100 percent cash payment made in September 2003." Neither he nor other Rusal officials would respond when asked whether this means that Deripaska paid Abramovich the full purchase price in a single transaction; or whether he paid the first installment to Abramovich in cash.

Moscow industry and banking sources have estimated the transaction value at between $1.5 billion and $2 billion. They also say they believe Deripaska has agreed with Abramovich to pay annual installments of about $500 million. With his share of the Rusal dividend, topped up by a related-party loan, Deripaska would be able to meet installments of that value, Moscow sources say. If a single purchase price of up to $2 billion was agreed in September, they doubt it.

Millhouse sources say they will not comment officially on the transaction. Unofficially, a Millhouse source said, he believes the sale of the Rusal stake was for $2 billion, and that the terms included an installment payment plan.

In 2002, according to its balance sheet, Rusal says it paid $834 million in dividends to its shareholders. Base Element, with a 50 percent stake, is presumed to have taken half, or $417 million, while Millhouse took the other $417 million. Until Abramovich's sale to Deripaska at the end of September, the same 50/50 sharing of dividends should have occurred.

A metals analyst with a Moscow bank told Asia Times Online that "Rusal is quite happy being a closed company." He estimates that for the full 12 months of 2003 the company's gross sales revenues are expected at $4.1 billion, with pre-tax profit of $970 million. According to the balance-sheet data, the 2002 sales aggregate was $3.98 billion, which was down from the 2001 total of $4.08 billion.

A Moscow corporate attorney told Asia Times Online that related party loans between Rusal and Base Element are allowable, according to the Russian civil code, if the board of directors and shareholders vote to approve them. A source close to the board has confirmed that the Rusal board of directors voted to approve a loan after the Deripaska purchase, and that the loan was made according to the legal requirements.

Mukhamedshin said he met last week in London with a group of international banks. "We are currently working on refinancing our existing debt to take advantage of increased shareholder control," he said. He added that more time is needed for the negotiations. "We have decided to prolong this mandate in order to syndicate this facility in the coming 90 days. This money will be used to refinance existing shorter term facilities including domestic bank financing."

Rusal sources said two weeks ago that the current debt portfolio of the company is "about $1.5 billion", and this is reported on the company's website. Mukhamedshin said the borrowing target in his current negotiations is higher. "The overall banking lines used by Rusal will remain at the existing level of around $2 billion," he said.

Moscow sources say a proposed loan agreement for the Russian state savings bank Sberbank to lend Deripaska up to $900 million has run into a problem with the western banks, which have been making loans to the company secured by trade receivables on exports of aluminum.

The sources have told Asia Times Online that the western banks are concerned to avoid a technical default on their loans, in the event the collateral for the Sberbank loan turns out to include aluminum already secured by the earlier loans.

Sberbank spokesman Sergei Rachkovsky would neither confirm nor deny that Sberbank has been negotiating a new loan to Deripaska. "I don't have such information," he said. He said that until or unless there is an official loan announcement by the bank, he would make no further comment.

A London spokesman for Credit Suisse First Boston (CSFB), Rebecca O'Neill, acknowledged that her bank recently issued a $100 million loan to Rusal. Asked if CSFB has assessed the terms of the Sberbank loan, in relation to the CSFB loan agreement with Rusal, O'Neill said "we would not discuss the negotiations with our client." A Rusal announcement indicates that repayment of the CSFB loan is secured by the sales of aluminum to Hydro Aluminum (Norway).

Other foreign lenders include BNP-Paribas, Natexis, CSFB, ING, Societe Generale, Westdeutsche Landesbank, and Glencore. In all, there are current foreign trade-tied credits to Rusal of about $700 million.

Current Russian lending to Rusal, including unsecured domestic bonds, totals about $820 million. Sberbank has already extended a five-year loan for $150 million. The Russian bond value is Rb8 billion ($267 million), but Rusal has already spent $38 million this year buying the bonds back, and a new buy-back offer was issued in September. Subtracting the bonds, Rusal's announced bank credit lines are currently worth about $1.2 billion.

Threatening Rusal's cash flow, analysts say, are payments being sought in a spate of European contract arbitration cases now pending. They were originally filed after Deripaska and Abramovich took over the group of smelters it now operates, halting the metal trading contracts of the previous owners. A Zurich award of more than $90 million, due to Aldeco, a Swiss firm which traded Krasnoyarsk aluminum until the Rusal cancelled its contracts in 2000, is being sought for payment at present. Next month there will be a hearing on several hundred million dollars in claims by Alucoal, a trader of the Novokuznetsk smelter's aluminum until Deripaska's takeover, before a Swedish arbitration tribunal.

(Copyright 2003 Asia Times Online Co, Ltd.


Aluminum company profits up

Louisville Courier Journal, KY Oct 22, 2003

Commonwealth cut costs and raised prices

By ROBERT SCHOENBERGER rschoenberger@courier-journal.com

A price increase plus cost-cutting allowed Commonwealth Industries to report surprisingly strong quarterly profits yesterday, sending its stock up almost 21 percent.

While the company's decision to raise prices this year may have hurt overall sales, the Louisville aluminum processor made more money on each sale, chief executive Mark Kaminski said.

Commonwealth's profits were still half of what they were a year earlier, but far better than the barely break-even results that analysts were expecting after two quarters of losses.

Update
Last we knew:
Commonwealth Industries had canceled its 5 cents per share dividend to stay within the terms of its lender agreements. The company had lost money for two straight quarters and was dealing with $125 million in long-term debt.

The latest:

Commonwealth posted a surprisingly strong profit during the third quarter, and investors drove its stock up 21 percent.

Why it's news:

Commonwealth, which has been caught up in tough times with the rest of the aluminum industry, is based in Louisville and has a facility in Lewisport that employs 630 people.

For more info:

www.cacky.com
Kaminski said it is too early to declare an end to the difficult market for aluminum, but he is hopeful.

"From the conversations I've had with customers, September and October have been good, but no one's sure about November and December," he said.

Commonwealth lost money in the first and second quarters of this year, citing both low demand for aluminum and low aluminum prices. The company's losses forced it to cancel its 5 cents per share dividend in August to stay in compliance with its lender agreements.

Kaminski said demand has improved somewhat, especially in the construction industry, where aluminum sales are up 8 percent from last year.

Commonwealth's numbers and strong earnings reported by aluminum giant Alcoa this month imply that a three-year downturn in the aluminum industry may be ending.

Between the end of 2000 and the beginning of 2001, U.S. aluminum production dropped by 25 percent as large manufacturers and construction companies cut orders. Volumes have fluctuated up and down during the past three years, but they are still far below 2000's levels.

To cope with the downturn, Kaminski said, Commonwealth cut costs in several areas and has been working with employees to keep them employed despite the downturn. At the company's plant in Lewisport, Ky., Commonwealth has tried four-day workweeks and other initiatives.

"It's been a very difficult year. It's been a very difficult three years, but they have really responded to the challenges," Kaminski said of his employees.

He said he and others in the company have discussed reinstituting the dividend if the aluminum market continues to improve, but they have not decided what the next move should be.

Analysts have suggested that the company should save its cash to prepare for the 2006 maturation of $125 million in bonds. Kaminski said the company is in talks with its creditors and may borrow money to retire those bonds while interest rates are low.

Commonwealth earned $2.9 million, or 18 cents per share, down from $6 million, or 38 cents per share, a year earlier, far exceeding analysts' expectations of 1 cent per share. The increase in profits came despite a 2 percent decrease in sales.

Commonwealth's stock finished up 99 cents at $5.74 per share yesterday


Australia's Rio Tinto/3Q: Resolves Boyne Smelter Issue

Wednesday October 22, 2:30 PM

MELBOURNE (Dow Jones)--Anglo-Australian mining company Rio Tinto Plc (RTP) Wednesday said the market for iron ore remains strong but third quarter shipments from its Hamersley operations were marginally below record levels set in the same period last year.

Hamersley production was up 4% in advance of scheduled maintenance in the fourth quarter, while Robe River shipments continue to benefit from the ramp-up of the West Angelas mine.
Total iron ore output of 25.8 million tons increased 7% from the third quarter last year and is up 1% from the second quarter of 2003.

Rio Tinto's total aluminum production of 204,900 tons was up 1% from the third quarter of fiscal 2002 and up 3% from the second quarter.

Rio Tinto said anode quality issues affecting Boyne Island smelter production in Queensland during the second and third quarters have been resolved while Tiwai Point, New Zealand, output improved following the resumption of spot power purchases.

Other non aluminum info deleted (Willem Kegge)

Bauxite Lease to be confiscated

Advertiser, Australia 23oct03

By TONY GRANT-TAYLOR and NATHAN SCHOLZ

THE Queensland Government has demanded French aluminium giant Pechiney surrender a massive bauxite mining lease on Cape York, in the hope Chinese demand for metals would spark a $4 billion to $5 billion mining, refining and smelting operation based on the deposit.

Mines minister Stephen Robertson, through a letter signed by Premier Peter Beattie, yesterday gave Pechiney until midday Friday to surrender its lease over an estimated 500 million tonnes of bauxite, the raw material for aluminium – a lease Pechiney has held since 1975.

Pechiney declined to comment yesterday.

Mr Robertson said under its original agreement Pechiney had been obliged to begin building an alumina refinery to process the Aurkun bauxite, by December, 1988.

It had failed to do so and though Pechiney was still expressing interest in a refinery – having told the Government it was willing to study the possibility and to make a decision by 2005 – the Government said it intended to call for international expressions of interest in the lease.


Alcan and Qingtonxia Aluminum Company to Form Joint Venture in China

Canada NewsWire (press release), Canada 23 Oct 2003

Alcan to own 50% in Modern, Environmentally-Sound Smelter

EIJING, China and MONTREAL, Quebec, Oct. 23 /CNW Telbec/ - Alcan Inc. (NYSE, TSX: AL) announced today the signing of a definitive joint venture agreement with the Qingtonxia Aluminum Company ("QTX") and the Ningxia Electric Power Development and Investment Co. Ltd. ("NEI"). Under the
agreement Alcan will invest up to US $150 million, following necessary regulatory approvals for a 50-per-cent participation and secure power supply in an existing 150-kilotonne modern pre-bake smelter located in the Ningxia autonomous region, in the Peoples' Republic of China
The agreement provides for the joint venture to obtain long-term access to dedicated power on competitive terms sufficient to meet the energy requirements of the smelter. The agreement also gives Alcan a substantial operating role and the option to acquire, through additional investment, up to 80 per cent of a new 250-kilotonne potline, already under construction.
"This initiative offers substantial opportunities for all partners to create value and further enhance their position in China, the world's fastest growing economy and the world's second largest consumer of unwrought aluminum" said Cynthia Carroll, President of Alcan's Primary Metal group. "This is a win-win proposition for Alcan, QTX, Ningxia and the local community. Alcan and QTX will work together to engage in successful and sustainable world-class primary aluminum smelter operations meeting the highest environmental and health and safety standards", added Mrs. Carroll.
Alcan and QTX have been working together since June 2002 to develop this joint venture project. Alcan, in conjunction with QTX and the Ningxia government, recently submitted their agreed joint venture proposal to the Chinese government for approval. The investment is expected to take place in the first quarter of 2004 following customary approvals.


Gladstone smelter to sign $771m China deal

ABC Regional Online, Australia - Oct 23, 2003

Gladstone's $3.8 billion Aldoga aluminium smelter in central Queensland will sign a $771 million deal with China's Nonferrous Corporation today.

The corporation entered into a $1 billion supply agreement with Aldoga earlier this year.

Aldoga managing director John Benson says the two companies are dependent on a long-term supply of bauxite and alumina so formed a relationship to explore their common interests.

Mr Benson says the aim of the agreement is to produce up to four million tonnes of alumina by the year 2010, with a quarter of that output being utilised at the Gladstone smelter.

"That's a very ambitious program, but that indicates the huge demand of both alumina and aluminium metal that's being generated in China today," he said.


Queensland sues Pechiney over non-surrender of lease

Sydney Morning Herald, Australia - October 25, 2003


Pechiney, the world's No 3 aluminum maker by sales, is being sued by the Queensland Government after refusing to surrender its right to mine bauxite at Aurukun on the Cape York peninsula.

The Government was to start legal proceedings against Pechiney in the Supreme Court on Friday afternoon to recover the lease.

Queensland Premier Peter Beattie wrote to Pechiney on Wednesday asking it to give up the lease by midday on Friday so it could be offered to other bidders.

The Government said Pechiney was meant to start building an alumina refinery to process the bauxite in 1988 but hadn't, making the lease invalid.

Pechiney said in a statement: "The position taken by the Queensland Government appears incomprehensible to Pechiney and it will not surrender its lease."

The company said it was prepared to enter talks at any time to find a solution.

Pechiney, subject of a €4 billion ($6.7 billion) bid by Canada's Alcan, said it had been awaiting regulatory approval for the refinery.


Analysis: China aluminium shows power of market economy

Daily Times, Pakistan, 24 Oct 2003

HONG KONG: China’s central planners, once all-powerful, are struggling to keep a rein on market forces driving rapid expansion in the country’s aluminium industry.

For the third time this year, a powerful state planning body issued a report on Wednesday urging the government to crack down on the sector by tightening procedures for approving new projects, controlling capacity and pollution problems. The State Development and Reform Commission (SDRC) is worried about runaway growth in a number of sectors leading to overheating in the world’s fastest-growing major economy.

Lack of control over expansion in China’s low-cost aluminium industry has long been a source of concern for the global market.

“Aluminium is a relatively profitable industry in China, that’s why it has attracted so many people,” an official for a large Chinese aluminum smelter said.

With aluminium selling for about 15,000 yuan ($1,811) a tonne in the spot market, more than 1,000 yuan higher than the cash production costs of many producers, it’s no surprise that capacity has ballooned.

The latest official report said capacity jumped to 5.46 million tonnes in 2002, with 138 producers, up from 1.97 million tonnes produced by only 53 plants in 1995. Another 47 plants are in the pipeline with extra capacity of about five million tonnes. This year’s aluminium production is expected to rise to 5.3-5.5 million tonnes, about one million tonnes more than 2002.

The SDRC said most new aluminium projects had not received the required approvals. “I can say, about 80 percent of aluminium capacity built in the past three years didn’t have approvals from the central government,” an industry official in Beijing said.

“It’s very hard for the government to deal with this problem. It cannot close all the plants as they are producing already. But it (capacity) is out of control,” another official said.

Money talks: Officials said that if the government closed such plants, many workers would be laid off, increasing unemployment while reducing the revenues of some provinces. “That is the last thing the government wants to see, (social) stability is important,” the smelter official said.

Industry officials said local governments had given the green light to build aluminium plants despite the urgings of the SDRC, which estimated aluminium projects contributed 250 million yuan worth of industrial output a year for every 100 million yuan invested — a very attractive return for poor inland provinces.

The SDRC criticised new plants that had built new capacity in phases in a bid to avoid the necessary approvals.

Traders said aluminium plants without the approvals could start finding it more difficult to receive local bank loans or to obtain permits both for raw material alumina imports and primary aluminium exports that are entitled to a tax rebate. “I don’t think the government is going to leave the issue like this. It may find a way such as pollution concerns, to close down some old plants to cut capacity,” a senior manager for an aluminium trading firm said.

The SDRC said 1.31 million tonnes of capacity in 2002 used enviromentally-unfriendly pre-baking technology for production. “The government can use policy to cut capacity like the seven percent rebate cut for aluminium exports. Some plants might close down due to lower profits,” the official in Beijing said.

New projects: Meanwhile, new projects are mushrooming. For example, in the central province of Sichuan, Allstar Aluminium Co started production at its new 60,000 tonne-per-year smelter last week.

Top provincial officials attended the opening ceremony of the plant, owned by a local power authority, which is designed to expand capacity to at least 250,000 tonnes.

The private East Hope Group is going to start production at an 80,000 tonne-per-year aluminium plant on October 28 after its first plant in northeastern province of Shandong started production in the middle of this year, a plant official said. The plant is scheduled to expand output to 500,000 tonnes a year.

An official from Shanxi Guanlu Co said in August Beijing had not yet approved construction of its new plant which would raise its capacity to 310,000 tonnes from 110,000 tonnes.

Sources close to the company said construction of the plant was nearly completed and it would start production in the next few months. —Reuters


Brazil CBA to raise aluminum output 47 pct by 2009

Forbes 24 Oct 2003 Reuters, 10.24.03, 12:04 PM ET

SAO PAULO, Brazil, Oct 24 (Reuters) - Brazil's Companhia Brasileiro de Aluminio (CBA), controlled by the Votorantim Group, said it plans to invest more than $500 million to raise primary aluminum output to 500,000 tonnes a year by 2009.

CBA recently expanded production capacity at its aluminum smelter at Aluminio, Sao Paulo state, to 340,000 tonnes a year from 240,000.

Votorantim President Antonio Ermirio de Moraes told reporters on Thursday that future expansion will include the construction of an alumina refinery at Cataguases in Minas Gerais state to supply raw material to produce aluminum.

"To reach our goal of 500,000 tonnes, we are building three (hydroelectric) plants," Moraes said.

The power stations are being built at Barra Grande on the river Pelotas, Campos Novos on the river Canoas and at Ourinho on the river Paranapanema.

The three plants, due for completion by end-2005, will enable CBA to remain 60 percent self-sufficient in energy, with the balance supplied by the Companhia Energetica de Sao Paulo (Cesp).

"The stations are extremely important because aluminum is an energy-intensive industry," Moraes said.

The energy investment will help CBA remain competitive.

Moraes estimated production costs at $1,100 per tonne, compared with a world market price of $1,500.

In September, CBA exported 50 percent of its aluminum output, mostly to Europe, down from 60 percent in August.

Copyright 2003, Reuters News Service


China Chalco/Alumina: Alumina Import Price CNY3,430/Ton

Yahoo News Friday October 24, 6:18 PM

HONG KONG (Dow Jones)--Aluminum Corp. of China Ltd. (2600.HK), or Chalco, said Friday it has raised its alumina spot sales price by 12% to 3,300 yuan (US$1CNY8.28) per metric ton.

Its alumina spot price previously stood at CNY2,950 per ton. The latest adjustment is the eighth since December last year, when the price stood at CNY1,830.

The company, China's sole alumina supplier and largest producer of aluminum, said it is adjusting the spot price following the recent increase in the selling price of alumina imported into China to CNY3,430 per ton from CNY3,300.

Chalco said the move is also a response to the fact that the aluminum price on the Shanghai Futures Exchange has climbed "substantially," it added.

China has been importing alumina, but producing enough aluminum to make it a net exporter of the nonferrous metal, a situation that is typical of a fast-growing, developing economy.

On Thursday, Chalco said the third-quarter average sales price of its alumina leaped 47.6% on year to CNY2,880 per ton while alumina sales rose 10.6% to 1.02 million tons during the period.

Australia's Aldoga Aluminium Forges Ties With China Cos

Yahoo News Friday October 24, 3:35 PM

Canberra, Oct. 24 (Dow Jones) - Australia's Aldoga Aluminium Smelter Pty. Ltd. Friday signed two agreements with Chinese groups that will help further the development of its project, according to Aldoga.

The signing of the agreements coincided with a visit to Canberra by China's President Hu Jintao.

One pact was a A$770 million heads of agreement for an export credit facility between China Nonferrous Metal Industry's Foreign Engineering & Construction Co. (NFC) and Aldoga.

John Benson, Aldoga's managing director, said the credit facility with NFC covers the supply of equipment, technology and engineering.

This agreement "confirms the close strategic relationship between one or two companies and opens up exciting possibilities for further expansion of Australia's aluminum industry," he said in a statement.

This is further demonstrated by a cooperation agreement also signed that will underpin investment by both parties to develop bauxite and refining opportunities in Australia with NFC as an equity partner, he said.

Aldoga plans to establish an aluminum smelter at Gladstone, in central Queensland state.

When fully operational from a target startup date of 2006, the smelter will produce 560,185 metric tons of aluminum for export a year, or about 2% of world production, Aldoga said on its Web site.

Benson said the agreements mark a critical milestone in the development of the project


Alcoa begins plant sell-off

Bids to be opened for S. Lebanon site

Penn Live, PA Sunday, October 26, 2003

BY AL WINN Of Our Lebanon Bureau

LEBANON - For 35 years, it was one of Lebanon County's industrial giants. But tomorrow the Alcoa South Lebanon works, sitting empty for more than a year, will go on the auction block.

On sale will be the aluminum giant's 770,000-square-foot plant and the 122 acres around it. Later several other undeveloped Alcoa properties nearby also will be auctioned, said Craig Rahn, of NAI/Commercial Industrial Realty.

The old Alcoa plant will not be sold without a bid of at least $1.5 million, although Rahn said he thinks, given the size of the plant and surrounding property, it is worth a lot more than that.

The auction, which is being conducted by Sheldon Good & Company Auctioneers of Chicago will be handled by sealed bid. Those bids will be opened tomorrow.

Rahn said he wasn't sure why Alcoa is handling the sale by auction but said the South Lebanon Twp. plant is only one of several the company is auctioning.

"They are auctioning a large portfolio of properties," he said.

Alcoa closed a number of its North American plants during 2001 and 2002 as part of a large-scale restructuring plan.

The South Lebanon Twp. plant is probably best suited for a company like Alcoa, Rahn said.

"Its ideal use would be as a metals manufacturing plant," he said.

Given there is probably not a lot of demand for that sort of plant, the facility could be used for almost any other kind of manufacturing, Rahn said.

A manufacturer would be his first choice, said Bob McNary, executive director of the Lebanon Valley Economic Development Corp. Manufacturers generally provide the highest paying jobs and contribute the most to the economy of the surrounding area, he said.

McNary estimates the county has lost 2,000 manufacturing jobs in the last few years, and he would like to see the trend reversed.

LVEDC staff have fielded a number of inquiries about the Alcoa building, McNary said, with one or two coming from companies that would occupy the entire building themselves and others from firms that would break it up into several uses.

It could be some time before the name of any buyer becomes public, Rahn said. A high-bidding company could back out during the first 30 to 60 days if it discovers information about the property that makes it less desirable than it initially appeared.

Alcoa bought the property in 1966, along with much of what has become the Lebanon Valley Business Park. At the plant's peak, as many as 350 people worked there. About 240 people lost jobs when the plant closed in spring 2002.

The business park was formed in 1991 from land acquired from Alcoa. The LVEDC purchased another 130 acres from Alcoa last year to expand the business park, with Schott Glass recently opening a plant on part of that land.

The rest of Alcoa's South Lebanon Twp. properties are to be auctioned Nov. 12. They include 54 acres along Route 419 south of the Alcoa plant, 105 acres across State Drive from the business park, about 70 acres northeast of the business park, and 17 acres near the corner of State Drive and Evergreen Road.

The properties are a mixed bag as far as possible uses are concerned, McNary said. All are zoned for industrial use, with the 70 acres northeast of the park having the best potential for access to the necessary utilities.

While all of the properties are located near the business park, LVEDC has about 130 acres of available land in the park and isn't pushing very hard to expand it, McNary said.

AL WINN: 272-3759 or awinn@patriot-news.com


Alcoa Köfém Honored With First-Ever Corporate Citizenship and Social Responsibility Award

10/27/2003: Press Release from Alcoa Inc.

(CSRwire) PITTSBURGH, PA - Alcoa Inc. (NYSE:AA) announced today that its Alcoa-Köfém facility in Szekesfehervár, Hungary was the recipient of the first-ever Good Corporate Citizenship and Social Responsibility Award from Figyelö, the leading Hungarian business and economic journal. In presenting the award, Figyelö cited Alcoa and Alcoa Foundation for its social responsibility behavior. In the past, Figyelö has presented the national awards to companies based on economic performance only.

Alcoa has played a key role in developing strong community relations since it first entered Hungary in 1993 when it acquired the state-owned Light Metal Work of Szekesfehervár, now known as Alcoa-Köfém Kft. Since then, the Alcoa Foundation has approved an aggregate amount of $2.7 million for the Hungarian non-profit sector. This amount supported some 200 projects selected jointly by Alcoa's management team and local communities in Hungary. One that enjoyed particular attention was the rehabilitation of a recreation area, called "Salt Lake Park," in Szekesfehervár.

Alcoa-Köfém produces extrusions and rolling ingots, flat rolled products, automotive structures, truck bodies, plastic closures, wire harnesses, and wheels for trucks, trailers and buses. It serves customers in the aluminum ingot, packaging and consumer goods, automotive and industrial markets. Alcoa has more than 5,000 employees in Hungary at five plants.

Alcoa Inc. is the world's leading producer of primary aluminum, fabricated aluminum, and alumina. It has 127,000 employees in 40 countries


Alcan Lands China Smelter Stake

33Metalproducing 10-27-03

Sees opportunity in "world's fastest growing economy"

Alcan Inc. is moving boldly into China's primary aluminum sector, agreeing last week to take a 50% share in a 150,000-metric tons/year smelter. The deal with Qingtonxia Aluminium Co. also makes available an option on its new 250,000-metric tons/year potline that’s currently in construction. Alcan is also seen taking a role in the operation of the smelter.
Also party to the investment is Ningxia Electric Power Development & Investment Co. Ltd., which supplies power to Qingtonxia. According to reports, Alcan will take a minority stake in the power company, as well.

The plan is for Alcan to invest up to $150 million in the deal, but the investment in the new potline will require further capital.

Cynthia Carroll, president of Alcan Primary Metal, stated, "This initiative offers substantial opportunities for all partners to create value and further enhance their position in China, the world's fastest-growing economy and the world's second-largest consumer of unwrought aluminum."

The entire agreement awaits approval from China's government. An Alcan representive speculated the deal could be ready for finalization and investment in the first quarter of next year, assuming it receives Chinese government approval. The Alcan spokesman said it could take about four months to get the go-ahead, and the company expects to make the investment in the first quarter of 2004. Alcan also will take on what it described as a "substantial operating role" at the smelter as part of the deal


Red tape hinders growth

Borneo Bulletin, Brunei Darussalam 27 Oct 2003

Lack of coordination among government institutions leading to slow decision making process and a lack of transparency have been listed as some of the challenges that Brunei faces in its drive to diversify its oil-based economy, AFP reported.
The solution to overcome these hurdles is to strengthen the small and medium enterprises (SMEs) and "force change in the bureaucratic process through the sheer weight of demand".

Brunei Economic Development Board (BEDB) Chief Executive, John Perry, is optimistic the diversification strategy will succeed because the key drivers -- proven oil and gas reserves and strategic location -- are there.

"The upstream engine room of the economy will continue to be a very powerful driver for diversification and this goes beyond the next 20 years," he said, referring to reports Brunei's oil reserves would run out in two decades.

"We now have a clear vision of what we want to do and where we want to go."

Brunei has embarked on an ambitious campaign to diversify its fossil fuel-based economy in a bid to emerge as a key regional player by 2008.

The move, which will primarily focus on developing two major industrial sites and importing foreign expertise to identify key growth area, is an attempt to bring the country up to speed with neighbours.

However, a recent report by the Asia-Pacific Economic forum said some of the major challenges facing Brunei include "weak coordination" among government institutions which has led to a slow decision making process and a lack of transparency.

Brunei's first thrust is to develop downstream and manufacturing industries in addition to power supply and infrastructure at two key industrial sites -- Sungai Liang and Pulau Muara Besar.

The second leg involves hiring international consultants to study the country's competitiveness to identify and prioritise potential industry growth clusters that can complement the industrial zones.

For Pulau Muara Besar, the BEDB has engaged global consultancy firm Halcrow to explore the feasibility of building a $1.5 billion container handling port.

Perry said the study has been completed and recommendations were expected shortly.

Brunei, will also explore the possibility of building other value-added services and potential industries to complement the port operation, including a free-trade zone.

To bolster the second prong of its strategy, the BEDB has engaged another global consultancy, the Monitor Group, to pinpoint potential economic growth areas which Brunei can develop to supplement the industrial zone and port hub.

The group's findings should focus business planning on the tourism, financial services, logistics and computer software sectors.

"By capitalising on its natural assets and strategic location, Brunei Darussalam can certainly emerge as a key regional player, exporting global commodities and acting as a 'feeder' for other players in the region," Perry said adding that Brunei hopes to achieve these targets by 2008.

Success should prompt more investments into other parts of the economy which would strengthen small and medium enterprises and "force change in the bureaucratic process through the sheer weight of demand," Perry added.

Already, some major global players have decided to take a look.

In September, US-based Alcoa Inc., the world's leading producer of primary and fabricated aluminium, agreed to carry out a study over the next two years on the feasibility of establishing a $1.5 billion smelting plant in Brunei.

BEDB also signed a memorandum of understanding with Britain's ACI Corporation Ltd. that could lead to the establishment of a $1.82 billion fully integrated elastomers plant for recycling rubber products such as tyres.

ACI hopes to use the Brunei plant as well as planned facilities in the United States and the Middle East, to process up to 60 percent of the one million tyres discarded daily in each of these regions.

RUSAL Continues on Growth Path with a 4.9% Increase in Smelting Production

Yahoo Tuesday October 28, 5:26 am ET

http://biz.yahoo.com/prnews/031028/lntu007_1.html

MOSCOW, Oct. 28 /PRNewswire/ -- RUSAL, one of the world's leading aluminum companies, today announced healthy growth in output across all its main product lines for the third quarter of 2003. Smelting production showed a record 4.93% year-on-year increase.
As a part of its aim to double aluminum production in the next decade and become one of the world leaders in production, RUSAL is strongly committed to improving its technology and production facilities. The Engineering and Technological Center (ETC), introduced earlier this year, has become a coordinator of the on-going upgrading programs. RUSAL's recent acquisition of All-Russian Aluminum Magnesium Institute (VAMI), a researching organization, also demonstrate the company's clear interest in developing new technologies to raise the quality and quantity of its products and will stimulate progress in upgrading projects.

Alexander Boulygine, chief operating officer of RUSAL said, "This has been a quarter of organizational change combined with continued progress in our core production capacity. Recent changes in RUSAL's shareholding structure allow the management team's full focus on the strategic goals of doubling aluminum production over the next decade. Our strong operational platform, sound liquidity and strong cash flows, leave us well placed to pursue this goal."

Mr. Boulygine also noted the importance of RUSAL's recent acquisition of VAMI, Russia's centre of excellence for metallurgical research and development. "VAMI will further increase RUSAL's competitive advantage on the global stage by allowing us to tap in and benefit from Russia's scientific knowledge base to develop new and improved production technologies and techniques for RUSAL," he said.

Operational Overview:

The growth in smelting production was achieved primarily by increased amperage and current efficiency at the Sayanogorsk and Krasnoyarsk aluminum smelters by further improvements in technological processes as well as the addition of several new cells. Cell amperage rose by 7 kA year-on-year at RUSAL Krasnoyarsk in Q3'2003 and by 7 kA at RUSAL Sayanogorsk for the same period. Current efficiency increased by 0.25% for the last three months year-on-year at RUSAL Krasnoyarsk and by 2.7% at RUSAL Sayanogorsk for the same period.

RUSAL's increased focus on value-added products at its smelting operation resulted in a 42.3% year-on-year growth in the first nine months of 2003. Substantial progress has been made on the long-term agreement signed by RUSAL and Hydro Aluminum last year for production and sourcing of high quality extrusion ingots, one of the major RUSAL's projects in that area. Supply and installation of equipment is almost completed, start up planned in December this year.

RUSAL's US$750 mln. project to build a new 270,000 ton smelter at Sayanogorsk by 2006 is proceeding according to plan. Preparatory work at the site in addition to designing the reduction and casting areas of the future smelter have been initiated. The project recently passed environmental impact assessment.

With the addition of Friguia's bauxite and alumina facilities into RUSAL's production chain, raw material production increased sharply. The modernisation programme continued at the Nikolayev Alumina Refinery, which aims to raise the plant's output to 1.3 mln. tons by 2005 and together with the optimisation of existing production facilities at Achinsk Alumina Refinery, will help further raise the two plants' alumina production.

Production of aluminum semis demonstrated a slight decrease due to exclusion of low-margin products from the mix as well as due to continuing rationalisation of RUSAL's rolling facilities which involves the transfer of some equipment amongst the group's downstream plants.

Aluminum beverage can production showed a sharp increase reflecting the trend on the domestic can market.

Recent Highlights Include:

-- Change in RUSAL's ownership structure, representing acquisition of a further 25% stake in the company by shareholder Basic Element from Millhouse Capital, was announced. This increased Basel's shareholding to 75%.

-- RUSAL increased its overall debt to approximately US$2 bln. Loans from western banks (including trade and pre-export financing) currently total about US$700 mln. Capital attracted through ruble bonds exceeds US$200 mln., long term investment loans (over five years) account for over US$100 mln. The remaining borrowings are term loans from a variety of Russian banks. About 70% of RUSAL's borrowing is long-term (more than one-year) funds.

-- US$30 mln. modernisation is continuing at Samara Rolling Mill aimed at increasing the volume and quality of its can stock and turning the mill into one of the world's leading can stock producers.

-- Start-up of a new casthouse at Bratsk Aluminum Smelter to produce multi-component alloys for sheet and foil production with annual capacity of over 70,000 tons. The addition of the casthouse will help to raise annual alloy production volume at Bratsk to 100,000 in 2004, which is a four fold increase over 2002.

-- RUSAL's Engineering and Technological Centre began to develop a modernisation programme for Novokuznetsk Smelter.

-- RUSAL SAMARA Received ISO 14 001 Environmental Certification. Currently, all RUSAL's key plants are either ISO 14 001 certified or preparing for the certification.

-- RUSAL's Engineering & Technology Center, in collaboration with Hatch Kaiser, began feasibility studies for Sayanogorsk and Krasnoyarsk modernisation projects.

-- RUSAL's Sayanogorsk Aluminum Smelter received an award for labour safety from the Russian Mining Complex Association and the Central Sector Trade Union Council.

-- A new dry gas scrubber designed by RUSAL and VAMI was introduced at Krasnoyarsk Smelter.

-- As part of a programme to increase cell amperage at Sayanogorsk, 4 new 260 kA cells have been introduced. 5,300 kA cells developed by RUSAL's Engineering and Technological Centre.


New record for Bahraini employees
Gulf Daily News, Bahrain 10/28/03

GULF Aluminium Rolling Mill Company (GARMCO) has achieved its highest Bahrainisation levels since being established in 1985.

The company now boasts a workforce which is 84 per cent Bahraini.

It has been made possible by a dedicated programme of training and education for Bahraini nationals, according to a statement released by the company.

GARMCO works closely with the Labour and Social Affairs Ministry and hires two engineers every year.

This has resulted in the gradual replacement of expatriate engineers at the company.

At the same time it has recruited 19 trainees who required industry training on site to enable them to do skilled and semi-skilled jobs within the plant.

"We are deeply committed to offering Bahrainis employment opportunities," said GARMCO general manager Tony Lewis.

"The aluminium industry is very important to Bahrain and GARMCO wants to ensure that present and future generations of Bahrainis benefit from the continuing growth and success of the company and the industry."

What Abdulla's Bahrain School teachers had to say, in the expulsion letter "Abdulla was in my seminar class. He had his bathroom privileges revoked because he would be gone for far too long. I caught him wandering in the halls."

"He is very argumentative, defiant and tries to break every rule in the book. His poor attendance record has kept him from learning."

"He has many zeroes. He has no business going into the 8th grade."

"I had to tell him four times to take off a cap. In the end I had to take it from him. He is failing."

"He does not want to be in school. He is failing. When he does come to school he either sleeps or moans and wants to go to the nurse."

"Abdulla does little or nothing in language arts and can become argumentative when corrected. He has been absent far too frequently to warrant more than an "F" for his grade."
Note : Bill Sales, VP of Reliance Steel & Aluminum Co mentioned in the article below was an Industrial Engineer at the Kaiser Aluminum Baton Rouge Plant in 1981 ! (Willem Kegge)

Trentwood lean, refocused

Spokane Journal of Business, WA 10/30/03

Kaiser’s rolling mill here has transformed completely, now awaits industry rebound

By Paul Read

Trentwood produces heat-treated aluminum in the form of sheet and plate, as well as coils like these:
http://www.spokanejournal.com/spokane_idarticle&sub1763

The seemingly endless rows of shiny aluminum coil are much shorter now. Huge expanses of factory floor are quiet and unlit. The trucks loaded with molten metal that once rumbled from Mead through Hillyard and the Spokane Valley to Trentwood are idle.

Much has changed at Kaiser Aluminum & Chemical Corp.’s Trentwood rolling mill, now the last vestige of what used to be a powerhouse employer here.

Though Spokane has lived through the contentious labor dispute, the painful curtailment of Kaiser’s Mead smelter, the Chapter 11 filing, and the significant downsizing of Trentwood, what it didn’t see was a dramatic, behind-the-scenes transformation at the sprawling Spokane Valley rolling mill.

That plant for years competed in the high-volume world of aluminum beverage-can stock—an industry dominated by much bigger companies—while producing smaller volumes of aerospace and automotive aluminum. Over the past three years, it has stopped producing aluminum for cans and cars and refocused on its roots mainly in the aerospace and industrial aluminum markets that use heat-treated products.

“We went from many products to a few,” says Keith Harvey, Kaiser’s Los Angeles-based vice president for sales and marketing. “We went from a small player in a huge market to a leading player in a niche market.”

Trentwood employs about 500 people today, well down from the 1,360 it employed five years ago. The plant’s revenues last year totaled just $184 million, compared with $733 million in 1998.

Much of that previous volume and employment, however, was tied to the aluminum-can business, which had ever-narrowing margins and pitted Kaiser against industry leaders in that niche that could out-produce and out-price Trentwood, says Peter Bunin, vice president and general manager of flat-rolled products for Kaiser.

“It was always a matter of when we would leave the can and lid market, not if,” Bunin says. “Our competition focused on that (cans). We didn’t. Our real competitive advantage was in heat treat. The risk was we would be too distracted with these other things to concentrate on that.”

Adds Harvey, “We were one of the last multifocused mills. The market was changing.” In heat treat, he says, “There are only a handful of companies in the world that can provide what we do here.”

Heat treat refers to a process in which metal is heated to a high temperature then cooled, which results in harder aluminum with consistent metallurgical qualities. Aircraft makers and other industrial aluminum users demand such product. Beverage-can companies don’t.

Trentwood, says Bunin, today “is a very different operation. We have reconfigured and transformed the operation.”

Kaiser exited the beverage-can body-stock business in 2000, and the following year stopped producing aluminum for automotive wheels and similar common-alloy products. Last year, it left the beverage-can lid- and tab-stock business, as well as brazed-sheet products for the automotive industry. It sold off for $15.8 million some of the equipment necessary to make and coat can lid and tab stock.

Today, large portions of Trentwood, which includes 60 acres of floor space under roof, are unused—and unlit to save energy. The complex occupies 500 acres along the north bank of the Spokane River west of Sullivan Road in Spokane Valley.

Another big change is the reduction in inventory. Trentwood used to produce and warehouse huge volumes of aluminum. It was common to see big coils of aluminum lined up in rows over the space of several football fields.

“We used to fill up this plant with inventory,” says plant manager Bill Fautch. “Now, we only run (product) to an order.”

Trentwood has slashed its inventory by 75 percent as one of a host of lean manufacturing efforts pushed by Bunin, a Harvard MBA who arrived at Trentwood in the spring of 2001.

Back in 1999, it took Trentwood about nine weeks between the time an order came in the door and product was shipped. Now, says Bunin, it takes just four to five weeks to fill an order. The industry average, he says, is eight to 12 weeks.

As a result, 98 percent of the plant’s deliveries are made on time, says Harvey, the sales and marketing executive. “This is huge in our industry,” he contends. “The industry standard is 75 to 80 percent and some of our competitors are below 50 percent.”

Adds Fautch, “Our delivery times to European customers are as good as they can get from European suppliers.”

Trentwood also has improved the quality of its products, Bunin says. In 1999, 0.81 percent of the plant’s shipments resulted in a customer claim due to a problem with the product. Today that percentage is 0.25 percent, Bunin says.

“All this was done while we were doing a restructuring” of the plant’s focus and a drastic reduction in workers, he says.

Says Fautch, “The East Coast is littered with factories that gave up. This one didn’t.”

Bill Sales, executive vice president of Los Angeles-based Reliance Steel & Aluminum Co., a big Kaiser customer, says Trentwood’s changes are well known in the industry.

“From our point of view, the streamlining of their business to essentially a heat-treat facility has been a real plus. Today, their performance is phenomenal in on-time delivery and quality.

“Without question, we have seen the changes and benefited from the changes there. I think you would find similar comments about Kaiser elsewhere in the industry. Trentwood is doing an excellent job,” Sales says.

Reliance operates more than 100 metals processing and distribution centers worldwide and had 2002 revenues of $1.75 billion. It is a big supplier of aluminum to aircraft makers such as Boeing Co.

Bunin says Trentwood has been able to boost its production capacity in the lines it now focuses on by 25 percent due to efficiencies, and that the plant currently is operating at about 50 percent to 60 percent of capacity while it awaits a turnaround in the aluminum industry.

Says Harvey, “We believe the industry is at or near the bottom of the trough. Based on signals from customers, the industry will be turning around” in the next year or two.

Such signs are starting to make headlines. Alcoa Inc., the world’s biggest aluminum producer, recently posted a 45 percent jump in earnings for the third quarter, citing stronger prices and demand.

The Aluminum Association said in a recent report that net new orders at aluminum producers are up nearly 9 percent over a year ago.

Meanwhile, several U.S. airlines reported improved results this month, leading industry observers to suggest that the worst may finally be over for the airline industry, which has postponed or canceled many aircraft orders since the terrorist attacks of 2001.

“The things we’ve done here have left us poised for when the markets come back,” says Harvey.

Rolling aluminum

An aluminum rolling mill does pretty much what the name suggests. It melts new (primary) aluminum, scrap aluminum, and alloys together in specific portions to achieve specific metallurgical characteristics needed for certain applications, and then rolls the aluminum into various thicknesses of sheet, plate, and coil.

For decades Kaiser trucked molten primary aluminum from its Mead smelter, just north of Spokane, out to Trentwood, where it was processed along with aluminum slabs and alloys purchased from other sources. That ended when the Mead smelter was shuttered in 2000.

Bunin says, however, that the impact of that lost supply has been minimal, partly because the molten metal from Mead was used primarily for beverage-can stock, which Trentwood no longer produces. In addition, he says, primary aluminum, in the form of slabs, or sow, is an ample commodity that can be purchased from a variety of sources at competitive prices.

“We can buy primary aluminum anywhere,” says Bunin. “It was great to get it down the street, but that hasn’t been a big factor for us.”

Kaiser pours its formulated aluminum alloys into molds that create big rectangular shaped bars called ingots, of varying shapes and sizes but weighing as much as 20,000 pounds each.

The ingots then are “scalped” to remove impurities and abnormalities on the surface, then heated to about 850 degrees for hot rolling. In the hot-rolling process, the ingots are run through a series of what basically are presses, which gradually flatten and lengthen the ingots into the aluminum’s final thickness.

Trentwood produces aluminum plate up to 4 inches thick, 8 feet wide, and 32 feet long, and sheet products of varying sizes down to 0.008 of an inch thick, or about the thickness of a razor blade. Some of the thinner stock is rolled into big coils.

The plant’s heat-treating equipment heats aluminum plate and stock up to about 900 degrees and then cools it with water in controlled environments to improve hardness and stability. Kaiser modernized much of its heat-treat capabilities in 2000.

Trentwood’s products are shipped by truck to customers, though some of the production stops first at Alutek Inc. or Spur Industries Inc., two Spokane Valley companies that handle some finish packaging and sawing work for Kaiser.

Fautch says Trentwood has undergone a host of technological changes in the last 10 years, including adding all new electronic controls and systems for equipment maintenance, production scheduling and flow systems, and control systems that monitor and ensure the tight product specifications Kaiser’s customers demand.

Just within the past five years, Kaiser has spent over $50 million at the plant on various upgrades, says Kaiser spokesman Scott Lamb.

Lately, rumors have surfaced that a major customer of Kaiser’s had asked it to consider spending tens of millions of dollars on enhancements that would help it provide product the customer wants. Kaiser officials decline to respond to such speculation except to say that the company will continue to invest heavily in Trentwood and will listen carefully to what customers want from it in the future.

The plant’s most significant modernization in recent times took place in the mid-1980s, when Kaiser invested $250 million into the World War II era facility.

“We’re running unlike any aluminum facility of this vintage in the world,” says Fautch.

He also credits the Steelworkers who work in the plant. “The transition after that labor dispute was fast,” he says, referring to the 1998 strike and subsequent lockout that, though settled in 2000, resulted in a prolonged legal battle that remains brewing at the National Labor Relations Board.

“We have one of the best work forces in the world,” he says now.

Bunin agrees. “You can’t do all these things unless you have high-quality people who are engaged,” he says.

The union, however, isn’t as pleased with how things have gone.

Dave Carlson, president of Local 338 of the United Steelworkers of America, says that although Steelworkers and Kaiser management can set aside differences to “operate the machinery and make some money for the company,” there is no “hugs and kisses” relationship at the plant.

He says grievances remain between labor and management at Trentwood, and the local has disagreed with some of the strategic moves the company has made there, including selling off the can-stock coating line.

“They haven’t a clue how to manage there,” says Carlson.

As to whether Kaiser will become an employment powerhouse here again, Bunin says it’s likely that employment will rebound along with the aluminum industry, but he says he doubts that if the plant gets back to previous revenue levels it will need the same number of workers it once had to achieve those levels. Efficiencies have reduced that employment need, he says.

Challenges ahead

Many challenges remain for Kaiser, which filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code back in early 2002. It has said that it hopes to emerge from bankruptcy protection next year.

Kaiser, which is based in Houston and has operations around the world, has struggled because of soft demand and prices for aluminum and growing power costs. Producing primary aluminum requires huge amounts of electricity. The company has been highly leveraged at times, and faces potential liabilities—including unsettled claims from its labor dispute and the legacy of asbestos exposure from a long-defunct product—that total into the hundreds of millions of dollars.

Early this year, Kaiser announced the indefinite curtailment at its Mead smelter, and said that it likely wouldn’t reopen the plant until power prices decline and aluminum prices rise. It also sold its shuttered smelter in Tacoma to the Port of Tacoma, which will use the property for other purposes. Recently, it sold some surplus land near its Mead smelter for about $2.6 million.

In all, Kaiser operates 18 major facilities in North America, Australia, Jamaica, Ghana, and Wales, and employs 5,000 people.

It consistently has said over the past couple of years that it might sell additional properties in its commodities businesses. The company mines bauxite and refines that into alumina, which it uses to produce primary aluminum.

In addition to its idled Mead smelter, Kaiser operates and has varying ownership interests in two bauxite mines and an alumina refining operation in Jamaica, aluminum smelters in Wales and Ghana, and alumina facilities in Australia and Louisiana.

Earlier this month, Kaiser filed papers in Bankruptcy Court that signal what could be the possible sale of its smelter in Wales, the bauxite mines and refinery in Jamaica, and the alumina refinery in Gramercy, La. Bids on those properties are expected in November, says Kaiser’s Lamb.

If those sales go ahead, Kaiser will emerge from bankruptcy much more focused on fabrication, he says.

In its most recent quarterly earnings report, for the second quarter ended June 30, the company’s parent, Kaiser Aluminum Corp., reported a net loss of $61.4 million, compared with a $50.4 million loss in the year-earlier quarter. The company has been bleeding red ink since the third quarter of 2001, when net income included a sizable gain on the sale of a portion of Kaiser’s interest in the Australian refinery.

Company officials won’t disclose current sales or profit figures for Trentwood. Earlier this year, Kaiser reorganized its business lines, putting Trentwood, which previously made up the company’s flat-rolled products division, in with other manufacturing facilities under a new fabricated-products division. With the change, the mill’s production numbers no longer are broken out in financial disclosures.

That new division includes 11 facilities around the U.S. that make everything from extruded alloys to tube and rod products, to forgings. Trentwood is the only rolling mill.

Together, those plants account for about 42 percent of Kaiser’s revenues. The rest comes primarily from commodity businesses.

Bunin says Kaiser has done a good job of trying to isolate its production management from the company’s bigger-picture bankruptcy reorganization.

“We are focusing on the same things we would be focusing on if we weren’t in Chapter 11,” Bunin says. “From an operational standpoint, the Chapter 11 has been a non-issue.”


One killed, six others hurt in explosion at Huntington plant

Associated Press Miami Herald, FL Thu, Oct. 30, 2003

HUNTINGTON, Ind. - Investigators probing an explosion at an aluminum casting plant that killed one worker and injured six others said Thursday they are trying to determine if a small fire hours earlier caused the massive explosion.

A preliminary investigation indicates there was a dust explosion about 8:25 p.m. Wednesday near a furnace at Hayes Lemmerz International Inc., said Alden Taylor, state fire marshal's office spokesman.

The explosion rattled windows more than a mile away and occurred as about 75 employees were working at the plant on the southwest side of Huntington, about 20 miles southwest of Fort Wayne.

That explosion was followed by three smaller blasts and caused part of the building's roof to collapse, said Huntington Fire Chief Rob Miller, who saw the fireball from his home about eight miles away.

Miller said the plant's safety director reported a small fire in one of the smokestacks about 4:30 p.m. Wednesday. The fire was extinguished, and workers began using the smokestack again about 10 minutes before the explosions began, Miller said.

Taylor said investigators were trying to determine whether the dust explosion might have been related to the earlier fire.

Shawn D. Boone, 33, died Thursday at St. Joseph Hospital in Fort Wayne from burns he suffered in the explosion. Another worker, David Ripplinger, was listed in critical condition, a hospital spokesman said.

Five other people were also injured in the blast, but all of them were treated and released from area hospitals, Taylor said.

At least two contractors were on the roof conducting environmental tests on the smokestacks at the time of the explosions, but Miller said they were not injured.

Northville, Mich.-based Hayes Lemmerz issued a written statement Thursday from its chief executive officer, Curtis Clawson, saying the company was investigating the explosion.

"We are deeply saddened by this tragedy," he said. "Our thoughts and prayers go out to our employees and their families during this difficult time."

The northeastern Indiana plant employs about 300 workers who make aluminum automotive wheels.

The U.S. Chemical Safety Board said Thursday it is sending investigators to Huntington to interview witnesses, examine the damaged plant and obtain chemical and forensic samples for testing.

The federal board does not issue citations or fines, but instead makes safety recommendations to plants, industry groups, labor unions and regulatory agencies.


Alcoa Technology Improves New Audi A8 Sedan

Business Wire (press release) 10/30/03

http://home.businesswire.com/portal/site/google/index.jsp?ndmViewIdnews_view&newsId20031030005096&newsLangen

PITTSBURGH--(BUSINESS WIRE)--Oct. 30, 2003--Alcoa announced today that it has provided automotive aluminum structural technology to Audi AG, the German automaker, for its second-generation A8 sedan. Alcoa's automotive structural technology in the A8 offers drivers outstanding stability and sets new standards in safety performance, while maintaining one of the automotive industry's lightest luxury sedan body shells.
According to Audi, its new A8 achieves "maximum stability with minimum mass" through the effective integration of multiple aluminum product forms supplied by Alcoa from its manufacturing facility in Soest, Germany.

"Alcoa's work with Audi in the application of aluminum to strengthen the performance of an integrated body structure system represents nothing less than revolutionary progress in automotive design and manufacturing that began with our collaborative, pioneering efforts on the original A8," according to Rick Milner, president of Alcoa Advanced Transportation Systems.

"The functional integration capabilities provided by the complex designs and part geometries of Alcoa's high-strength, ductile die castings and partially-hydroformed extrusions were also instrumental in stiffening the space frame structure on the new A8 to improve its handling and safety performance. The presence of Alcoa's newest cast and extruded components also facilitated the use of more automated assembly techniques to help Audi manage their production costs," according to Milner.

Audi's new aluminum space frame features fewer components than its predecessor...267 versus 334. Newly-designed, larger and more complex Alcoa Vacuum Die Castings have replaced combinations of castings, extrusions and sheet components used in the original space frame to consolidate parts and reduce total systems cost.

The new A8 also features other "firsts" in the use of Alcoa's proprietary casting technologies. Four AVDC castings are used in the doors. The luxury sedan also represents the first application of a new Alcoa casting alloy that does not require water quenching after heat treatment.

From a manufacturing perspective, Alcoa's Soest facility met all of Audi's delivery performance targets throughout the launch of the A8. This was a significant challenge since the ramp up to series production included a 33% expansion in the size of the location, featuring the addition of two new vacuum die casting machines, a significant expansion of the plant's shipping and receiving area and expansion of the location's prototyping capability, including new measurement, fixturing, testing and assembly facilities.

"The addition of these capabilities, in combination with the experience of launching the first A8 and our on-going close cooperation with Audi, allowed us to manage the ramp up of the new model and manage costs at the same time. We were able to take advantage of the stability of our work force and involve employees who had participated in the first A8 launch. This combination of experience and resources created significant advantage for Audi and Alcoa," according to Luigi Mattina, Soest's plant manager.

The wide variety of Soest's processing capabilities...from vacuum die casting to extrusion forming to hydroforming...coupled with the plant's expanding knowledge of prototyping, fixturing, joining and assembly...make it one of Alcoa Advanced Transportation System's most versatile operations. "We now have almost 10 years worth of experience in helping our customers go from concept to prototype to pre-series to series products," Mattina concluded.


Alba project achieves safety milestone/ Bahrain

Bahrain Tribune - 30/10/2003

The line 5 expansion team of Aluminium Bahrain (Alba) yesterday celebrated one million man-hours of work without any lost-time injuries or medical treatment incident on the project. The team was congratulated on its efforts and encouraged to focus on maintaining the high level of safety during the project.
"With safety being one of Alba's key performance indicators, the company has been committed to maintaining a safe environment at its premises by educating its workforce on how to act safe," the General Manager of the project, Niall O'Byrne, said. "With the Line 5 project, Alba, in co-operation with our contractors, Bechtel, has sought to further encourage safe behaviour through the implementation of safety management tools that monitor, control and assess the behaviour of the workforce."
He said that they were happy to have surpassed the one million manhours without experiencing any medical treatment incident as this indicated that the safety processes implemented on the project have been effective so far. "While this is a major achievement for a project of such a huge magnitude, this doesn't mean that we'll cease to develop our safety measures.
"We aim to continuously improve our safety techniques and ensure a safer environment not only throughout the construction of the fifth potline but also in all future strategic expansion projects," he said.
He said that in order to avoid the occurrence of any injuries on the project site, Alba and Bechtel have introduced intensive safety training programmes for their construction workers.
"Contractors and the project team involved in the expansion are following the training to act safe, and the behaviour of the relevant parties is continuously observed and monitored, and, accordingly, safety procedures are improved and updated," he said. "When initially starting work on this large-scale project, all contractors and workers received individual safety training in their own language during a safety induction programme jointly implemented by the project team.
"During the programme, all employees were required to produce their safety plans and discuss them with the rest of the group," Bechtel's Safety Manager, Ross Baker, said. "After that, all employees on the project had to undergo continuous safety training. We've calculated that throughout the execution of the project, safety inductions will be carried out for about 5,000 people," O'Byrne said.
The line 5 expansion, due for completion in February 2005, will expand Alba's annual production by a further 307,000 tonnes a year, making it the largest smelter in the world outside eastern Europe. At a cost of $1.7 billion, the expansion will create an estimated 500 jobs and include a new power station, a casthouse and other facilities

Investigators begin work, plant begins effort to restart

MLive.com (subscription), MI The Associated Press 10/31/03 7:18 PM

HUNTINGTON, Ind. (AP) -- Federal investigators got their first look Friday at an aluminum casting plant where an explosion killed one worker and injured six others.

A team from the U.S. Chemical Safety and Hazard Investigation Board toured the Hayes Lemmerz International Inc. plant, then interviewed people who witnessed Wednesday night's explosion.

Investigators also examined equipment and requested company documents on instruments, pipes, materials and other items, said Dr. Gerald Poje.

"Obviously, the (safety) system didn't work the way anyone would intend it to work," Poje said, refusing to discuss the fire's possible causes.

However, spokesman Alden Taylor of the state fire marshal's office has said a preliminary investigation indicated a dust explosion occurred near a furnace.

The federal board does not issue citations or fines, but makes safety recommendations to plants, industry groups, labor unions and regulatory agencies.

One worker at the plant, 33-year-old Shawn D. Boone, died Thursday at St. Joseph Hospital in Fort Wayne from burns he suffered in the explosion. Another worker, David Ripplinger, was listed in critical condition Friday afternoon, a hospital spokesman said.

Five other people also injured in the blast were treated and released at area hospitals, Taylor said.

Officials of the Northville, Mich.-based Hayes Lemmerz took initial steps Friday to resume operations in Huntington. A company statement said government agencies agree the company can begin testing safety and other systems as it prepares to resume its production of aluminum wheels.

Manufacturing and machining areas of the plant were not affected by the explosion in an aluminum chip reprocessing system located in a corner of the building, the statement said.

However, it's too early to determine when manufacturing will resume, spokesman Marika Diamond said.

Chairman and CEO Curtis Clawson and other senior company officials flew to the plant Thursday.

The plant employs about 250 people, of which about 80 were working at the time of the explosion.


Alcoa Sells Brazil Aluminum Can Business

Tuscaloosa News, AL The Associated Press, October 31, 2003

Alcoa Inc. will sell its aluminum can business in Brazil as part of an ongoing effort to pay down debt, the company announced Friday.

The aluminum giant is the managing partner of Latas de Aluminio, S.A., and a 37 percent owner.

Latas will be sold to Rexam, the London-based packaging company, for $355 million, Alcoa said. Rexam has also agreed to assume about $107 million in debt.

Rexam said it will become the world leader in beverage cans, with a 23 percent global market share, or the equivalent of nearly 50 billion cans.

Latas, based in Sao Paulo, had 2002 sales of approximately $400 million. The company has six plants in Brazil, one in Chile and another in Argentina.

Bradesco Seguros, S.A., of Brazil, owns 39 percent of the company and J.P. Morgan International Capital Corp. owns 12 percent.

The deal is expected to be closed by the end of November.

Pittsburgh-based Alcoa said it would use proceeds to pay down debt.

Shares of Alcoa fell 58 cents to close at $31.57 on the New York Stock Exchange.