AluNews - December 2004

Smelter sale OK'd; county in line for $750,000 payment

Longview Daily News, WA Dec 02, 2004 - 07:45:41 am PST

By Pat Forgey

A federal bankruptcy court Tuesday gave final approval to the sale of Longview Aluminum's assets to Nootka Holdings, clearing the way for more than $750,000 in back taxes to be paid to Cowlitz County.

Responsibility for the site now rests with Barry Oliver of Nootka Holdings, a British Columbia firm that has retained five employees at the shuttered smelter for security and maintenance.

"With the close of business yesterday, Longview is now happily in the hands of Mr. Oliver and begins a new chapter," said Bill Brandt, the court-appointed trustee overseeing the Longview Aluminum bankruptcy.

Brandt Wednesday said he was sending a check for $168,000 to the county for property taxes owed on the plant's equipment and furnishings. Nootka has agreed to take responsibility for other back taxes owed by Longview Aluminum, Oliver said.

Nootka has reach an agreement with the county to pay an additional $600,000 to settle those debts, said Ron Marshall, Cowlitz County chief deputy civil prosecutor, who negotiated the settlement.

"We're happy to have it resolved," he said.

The county had said it was owed $2.5 million for the three-year period, but officials acknowledged they would have to accept a smaller amount.

Nootka and the county, represented by Marshall, negotiated an agreement on the value of the assets Nootka is buying, including the land, a pier on the Columbia River and cranes, silos and a materials handling system that Nootka will use to import lime.

The property had previously been assessed as an operating aluminum smelter, but it clearly is no longer viable as a smelter, Marshall said.

Under the terms of the settlement between Nootka and Cowlitz County, Nootka has 30 days to pay the $600,000, Marshall said. It's the largest tax settlement Marshall said he's dealt with in the 10 years he's been representing the county.

The settlement agreement includes a dismissal of a property value appeal, and an agreement by the county to assess the site at $18.5 million in 2005, down from the $70 million it was assessed at from 2002-04, Takko said.

The new valuation more accurately reflects the valuation of the assets there, Marshall said. "We're hoping the next operation down there is successful so we get a steady tax stream out of this," he said.

Marshall said the settlement was "about the best we could do" to recover some of the money owed the county and other taxing districts.

Cowlitz County Assessor Dean Takko said the money will be divided up among several taxing districts, such as county government, Port of Longview and Longview School District.

Those entities had not budgeted those monies for the last three years because Longview Aluminum was in bankruptcy and there was no assurance the taxes ever would be paid, Takko said.

"There was a good possibility the courts might have said 'The money's all gone, you don't get anything.' "

Ormet exec: Production to continue

Martins Ferry Times Leader, OH 2 Dec 2004

By MICHAEL SCHULER and ADAM TOWNSEND, Times Leader Staff Writers

ALUMINUM IS continuing to be produced at Ormet, despite the work stoppage at the company's rolling mill and reduction facilities in Hannibal, and it appears that won't be changing anytime soon.

While members of the United Steelworkers of America Locals 5724 and 5760 continue to strike outside the facilities, Ormet Chief Executive Michael Williams made himself available for questions Wednesday, saying the company's salaried employees are still putting out product and denied the union has been excluded from the company's reorganization process.

Union officials have argued that the company has excluded them from the process of reorganizing the company, putting retirees' and workers' benefits at risk. But according to Williams, the USWA was given the opportunity to be involved.

"In March 2003, we provided a proposal for the union that represented the cost structure of our plan of reorganization and has been thoroughly thought out and negotiated across all constituencies, mainly the creditors," Williams said. "We presented them a proposal with the cost structure that we were willing to negotiate from. And in my view, they basically delayed coming to the table to discuss that."

According to Williams, the union also gave the company a 15 to 20 page request for information on the company's financial situation, as well as the safety and environmental information.

"The steelworkers are on the creditor's committee, so they've been knowledgeable and informed of this process since day one," Williams said.

Williams also said the union made only one proposal to the company, and it was five days before the U.S. Bankruptcy Court's section 1113 hearing.

"Because of their refusal to negotiate constructively on the economics, that proposal basically required the company to completely liquidate itself," he said. "To sell off its assets to another company, and then Ormet Corporation would be left with all the liabilities from pensions, environmental as well as the other liabilities was unacceptable by all other constituents involved in the case."

And while union members are saying they would like to see the company sold, Williams said that possibility is unlikely, because it appears the plan for reorganization will go forward, giving control of the company to its creditors, including MatlinPatterson, creating a new ownership structure.

Williams said the plant is continuing to operate, with salaried employees, retired members of management and even a small number of friends and family members of management that are keeping the operation going. No replacement workers are in the plant.

"We are continuing to operate the plant, but at lower levels," Williams said.

Right now, only two pot lines are in operation, as opposed to the three that were running prior to the start of the strike. The rolling mill is also operating at a reduced capacity, but still is doing well.

"All units are running at or above our work stoppage plan," Williams said. "The people here are doing an outstanding job. I want to commend the salaried work force."

On Monday, 315,000 pounds of product were shipped, the first since the strike began. More has been shipped since then.

A telephone call to the USWA district office in St. Clairsville for comment was not immediately returned.

Meanwhile, Dennis Cotrill, the man accused of injuring striker Bill Rose at the plant while driving his truck across the striker's picket lines, will face assault charges at his arraignment scheduled for Dec. 22.

Cotrill, 39, of Ellensboro, W.Va., was arrested last month. This week, Prosecutor Lynn Riethmiller reportedly filed a charge of simple assault - a misdemeanor - against Cotrill.

According to the Monroe County Clerk's Office, Cotrill's counsel may also file a written plea before Dec. 22, which will take the place of the arraignment.

The West Virginia driver works for JABO Supply Corp. and was crossing the picket line to make a small delivery to the company, according to his employer.

The only charges yet filed against Ormet strikers arrested last Friday and the following Monday are against the Clarington family of Janice, John and Heath Miller - aged 42, 48 and 18, respectively. They face misdemeanor charges of resisting arrest. Their preliminary hearing is scheduled In Monroe County Court at 9:30 a.m. next Wednesday.

Monroe County Sheriff Manifred Keylor said his office responded to a complaint Friday from an Ormet manager. He said the arrests were enforcing a court order mandating that Ormet picketers number no more than 10 at a time and maintain a distance of 2,000 feet from the plant.

Alcan Inc. in exclusive talks to sell interest in Aluminium de Grece

CJAD, Canada December 3, 2004, EST.

MONTREAL (CP) - After talking to several other parties, Alcan Inc. says it's in exclusive discussions with Mytilineos Holdings SA of Greece for the sale of Alcan's interest in Aluminium de Grece, an integrated aluminum producer.

Montreal-based Alcan said Friday that Mytilineos has made an offer for ADG, but no details were disclosed. A decision is expected within two weeks.

Alcan owns 60 per cent of the Greek company, part of the Pechiney Group acquired by Alcan last January for $6 billion, while the rest is owned by private investors.

Traded on the Athens stock exchange, ADG has about 1,300 employees.

ADG produces the mineral bauxite and refines it into alumina and then aluminum, which it markets in France and Italy for the auto, building-materials and packaging industries.

ADG's sales last year were $518.8 million Cdn but profits dropped 58 per cent to $11.6 million.

"The consideration of a possible sale of Alcan's controlling interest in ADG is part of our ongoing efforts to identify and develop value-creating options," Cynthia Carroll, CEO of Alcan's primary metal group, said in a release.

"We are confident that the positive outcome of these discussions would contribute to ADG's long-term sustainability."

As part of its restructuring of the former Pechiney operations, Alcan announced last week a shakeup of nine European operations, which will involve closing three facilities, cutting more than 500 jobs and putting two plants up for sale.

Another 277 people will be cut from the 1,000 staff at the Paris headquarters of Pechiney, now the head office of Alcan's packaging and engineered products groups.

Shareholders vote later this month on whether to spin Alcan's rolled-products assets into a separate company, Novelis Inc.

Alcan employs 88,000 people - about 46,000 in Europe - and has operations in 58 countries.

The Canadian Press, 2004

Union workers at two Alcoa plants approved three-year contracts

Penn Live, PA 3 Dec 2004

Union workers at two Alcoa plants approved three-year contracts with the world's largest aluminum maker that includes paying for health care and benefits, the company said.

Under the contracts, workers at the aluminum maker's plant in Tifton, Ga., and automotive casting plant in Hawesville, Ky., will join Alcoa's "Select Benefits" plan. More than 20,000 Alcoa employees are enrolled in the plan and on average they pay $72 a month for health care, said Alcoa spokesman Kevin Lowery.

Alcoa is the world's largest aluminum producer, with 120,000 employees in 43 countries.

Norsk Hydro to Spend $1.5B on Qatar Aluminum Smelter (Update5)

Bloomberg Dec. 5 2004

Norsk Hydro to Invest $1.5 Billion in Qatar Smelter (Update3)

Dec. 5 (Bloomberg) -- Norsk Hydro ASA, the world's third- largest publicly traded aluminum producer, agreed to invest $1.5 billion to help build a smelter in Qatar, seeking energy costs that are lower than in Europe and North America.

The Oslo-based company, also Norway's second-largest oil producer, will own a 49 percent stake in the $3 billion project led by Qatar Petroleum, Norsk Hydro said on its Web site. The plant will produce 570,000 tons a year by 2009, making it the third-largest in the Persian Gulf.

``Gulf countries are investing in energy-based industries like aluminum where they can leverage competitive and comparative advantage,'' Daniel Hanna, senior Middle East economist with Standard Chartered Plc in Dubai, said in a telephone interview.

Pittsburgh-based Alcoa Inc. and Montreal-based Alcan Inc., the world's two largest aluminum producers, are looking to build smelters in the Middle East to take advantage of natural-gas reserves that can fuel power plants. Electricity accounts for as much as half the cost of producing aluminum.

Norsk Hydro may close some smelters in Germany because of rising energy costs, Finansavisen newspaper reported Dec. 2, citing a company spokesman. German power sold for an average of 31 euros ($42) a megawatt-hour in the so-called spot market this year, up from 25.75 euros in 2002, according to Bloomberg data.

Cheaper Power

Electricity from plants now under construction in neighboring Bahrain may cost as little as $21 a megawatt-hour, according to London-based weekly Middle East Economic Digest. The Qatar smelter will need an adjoining 1,000-megawatt power plant to operate, Norsk Hydro said.

Qatar says its gas reserves are the second-largest behind Russia, at an estimated 900 trillion cubic feet. Russia has 1.7 trillion cubic feet, or 40 percent of the world's total. Qatar is building aluminum, fertilizer and chemical plants to use its gas.

Saudi Arabia and Oman also plan to build aluminum smelters, and producers in United Arab Emirates and Bahrain are trying to boost output, Hanna said. Global demand for aluminum, used in drink cans, airplanes and cars, will rise 5.4 percent next year to 31.4 million metric tons, exceeding production by 550,000 tons, Societe Generale forecasts.

Aluminum prices have climbed 16 percent on the London Metal Exchange in the past year, closing Dec. 3 at $1,808 a metric ton for metal delivered in three months. Norsk Hydro sold its metal for $1,677 a ton in the third quarter, up from $1,445 a year earlier. In addition to Germany, Norsk Hydro has smelters in Norway, Australia, Canada, Germany and Slovakia.

Norsk Hydro shares have risen 29 percent this year, valuing the company at 125.5 billion kroner ($21 billion). Third-quarter profit rose 24 percent to 2.48 billion kroner as prices of crude oil and aluminum climbed.

Statoil ASA, based in Stavanger, Norway, is the country's largest oil company.

To contact the reporter on this story:

Andy Critchlow in Dubai on at acritchlow1@bloomberg.net

To contact the editor for this story:

Tim Coulter in London on at tcoulter@bloomberg.net

Global Alumina Breaks Ground for New Port Facility in Kamsar, Guinea

Yahoo News (press release) Monday December 6, 9:06 am ET

Ceremonial Ground Breaking Initiates Construction Activities on Company's New Port Facilities

TORONTO, Dec. 6 /PRNewswire-FirstCall/ -- Global Alumina (TSX-V: GPC.U), a company that proposes to produce alumina for sale to the global aluminium industry, celebrated the groundbreaking of its port in Kamsar, Guinea.

December 3rd was made a public holiday in the Kamsar region to commemorate the groundbreaking of Global Alumina's port. With thousands of supporters attending the ceremony at the cultural center, the Chairman of the National Assembly, who spoke on behalf of the President of the Republic of Guinea, stated that the government will continue to provide their strong support and will conduct all necessary actions required to swiftly facilitate the project. The Chairman also stressed the important sustainable impact that the project will have on the Republic of Guinea and its people.

Speeches were also given by the Minister of Mines and Geology, the Governor of the Boke prefecture and a representative of Global Alumina. Among the attendees were a large number of Ministers of the Republic of Guinea, the Ambassador of the United States, the Ambassador of Canada, local dignitaries, and representatives from the UN and IMF. Following the speeches, supporters traveled to the port site to witness the unveiling of the cornerstone and commemorative plaque.

"The groundbreaking ceremony was a true African welcome for our project," said Bruce Wrobel, Chairman and Chief Executive Officer of Global Alumina. "To start construction on our port facility in Kamsar at this early date helps to enable a rapid mobilization for the future full-scale construction of the alumina refinery. This was a very exciting day for us."

Construction begins immediately of the port's 70 hectares bulk storage yard and 4km causeway/pier. When complete, the port facility will provide state-of-the-art alumina storage and export facilities as well as import and storage capacity for input commodities.

"Critical to reaching this stage has been the work of Global Alumina's environmental team and SNC Lavalin Environment over the last 18 months. The resulting Environmental Impact Assessment received approval from the Republic of Guinea's Ministry of the Environment this past September," added Mr. Wrobel.

While the port will meet Global Alumina's initial needs, the port facility has been designed to include excess capacity anticipating potential expansions of the alumina refinery. In final expanded form, the port will have a total alumina export capacity of over 10 mtpa while importing up to 5.8 mtpa of materials and equipment required by the refinery process. Additionally, the port can be expanded to receive additional commercial container cargo for third party users.

In addition to creating increased economic traffic, the port activities alone will result in over 100 operation jobs.

ABOUT GLOBAL ALUMINA

Global Alumina Products Corporation (Global Alumina) is a company that intends to use the vast bauxite resources of Guinea to produce alumina for sale to the global aluminum industry. Global Alumina is positioned to be one of the largest companies focused solely on alumina production and sales, and offers an opportunity for socially responsible investing in a country that holds over one-third of the world's bauxite resources. Global Alumina is headquartered in Saint John, New Brunswick with operations in Boke, Guinea and has administrative offices in New York, London, Montreal and Conakry, Guinea. For further information visit our website at http://www.globalalumina.com .

Hydro invests heavily in Qatar

Aftenposten, Norway - 6 Dec 2004

Norsk Hydro confirmed over the weekend that it's making its biggest overseas investment ever. The industrial concern insists, however, that the huge project won't come at the expense of investment at home in Norway.

Norsk Hydro officials made a whirlwind visit to Qatar over the weekend, to visit the site of the planned aluminum plant with director Khalid Khalifa Al-Thani.

Just two weeks ago, Hydro launched new aluminum production in Sunndalsøra. The Norwegian facility is one of Europe's largest and most modern.

Now Hydro confirms it will invest at least NOK 9 billion in a new aluminum plant in Qatar, along with a new gas plant. Qatar has the world's third-largest gas reserves, and its relatively cheap supplies have lured Hydro into being Qatar's partner in the aluminum plant.

Hydro and Qatar's national oil company will together invest NOK 18 billion in the aluminum and gas plants, with Hydro contributing half. Qatar had long been looking for an aluminum producer who could provide a market for its gas, while Hydro had been looking for cheap energy.

Moreover, Hydro already is familiar with working conditions in Qatar. For the past 35 years it's been producing fertilizer and petrochemicals in the country, and there's even a Norwegian school just outside Qatar's capital of Doha.

The aluminum plant will be built in a large industrial area that now features an azure-blue lake that will be filled in. The plant is expected to annually produce 570,000 tons of aluminum from 2009, launching Hydro into the really big leagues internationally.

The location in Qatar is also well-suited for expansion, with relatively easy access to markets in Asia, the US and Europe.

Alba praised for environmental concern

Bahrain Tribune - 06/12/2004

Aluminium Bahrain (Alba) earned itself high praise for its environmental achievements after a delegation of environmental authorities and some of the Kingdom's most prominent environmentalists visited the smelter and toured its facilities.

The delegation, led by Public Commission for the Protection of Marine Resources, Environment and Wildlife Director General, Dr Ismail Mohammed Al Madani, met the Alba Executive Management team as well as the Safety, Health and Environment (SHE) team to learn about the company's efforts to protect the environment.

They later toured the smelter to see, for themselves, some of the results of these long term efforts and learn more about Alba's use of sophisticated technology to protect the environment.

The delegation visited one of Alba's six huge Fume Treatment Plants (FTPs) that keep the smelter?s emission levels well bellow stringent international standards and also visited one of the reduction line control rooms to see how Alba monitors the process of producing high grade primary aluminium to ensure it is as environmentally friendly as possible.

The delegation also joined members of the Alba management team to inaugurate the new SHE headquarters at the plant.

"Alba helped pioneer the concept of environmental protection in the region and has long committed itself to long term plans to protect the environment," said the SHE Manager, Hassan Al Aradi. "It's a commitment Alba takes very seriously and, since 1991 for example, the company has spent almost $584 million on its environmental protection programmes. It is a significant investment by any measure - but the results have certainly paid off and, today, Alba stands proud as one of the most environmentally friendly smelters in the world," he said.

"Earlier this year for example, Alba concluded the first phase of a BD24.5 million project to retrofit all six gas turbines in Power Station 3 with low Nitrogen Oxide (Nox) burners. This makes Alba's Power Station 3 the most environmentally friendly power plant of its kind in Bahrain," said Al Aradi. "This project has no commercial value and offers no financial return on investment - but it was approved by the Alba board of directors because it marks an important environmental investment that will help provide a cleaner, safer environment for the people of Bahrain," he said.

Aluminum May Rise as China Seeks to Cut Power Demand (Update2)

Dec. 8 (Bloomberg)

Global aluminum prices may rise after China, the world's biggest producer of the lightweight metal, said it will curb output to try to prevent a repeat of power shortages next year.

China has cut bank loans to aluminum producers by requiring them to invest 35 percent of their own capital in new projects, up from 25 percent. The government also may remove 8 percent export rebates on the metal in 2005 after power shortages this year caused blackouts. Electricity makes up 35 percent of the cost to make the metal, used in window frames, Ford Motor Co. vehicles and Boeing Co. aircraft.

``We will see rising aluminum prices,'' said Sean Zheng, who helps manage $100 million in stocks, including Aluminum Corp. of China Ltd., at Beijing-based Ding Tian Asset Management Co. London Metal Exchange prices may rise to $2,000 a ton next year, he said, which would be the highest in almost 10 years.

Aluminum in London gained 18 percent to $1,828 a ton in the past 12 months because of rising demand in the U.S. and China. Construction companies are the biggest users of the metal in China, where housing construction rose about 27 percent in the first 10 months of the year from the same period in 2003. The industry accounts for about 40 percent of demand in the country.

Chalco

``Clearly, any further constraints (on Chinese production) will be positive for aluminum prices with less metal on the market,'' said Robin Bhar, a metal analyst with Standard Bank, in an interview from London.

Expectations of higher alumina and aluminum prices yesterday led Standard & Poor's to raise Aluminum Corp. of China Ltd.'s credit rating one notch to BBB+. Aluminum Corp., known as Chalco, is China's biggest aluminum maker and the world's second-largest producer of alumina.

While aluminum output in China rose 21 percent to 5.34 million tons in the first 10 months of this year, efforts to rein in production are beginning to show.

China's smelters produced less metal a day in October than September, the first monthly fall since July, said the China Nonferrous Metals Industry Association. The smelters produced an average 18,774 metric tons a day in October compared with 18,867 tons in September.

Controlling investment will be one of the government's priorities next year, the Xinhua News Agency reported Dec. 5, after an economic policy meeting in Beijing attended by President Hu Jintao and Prime Minister Wen Jiabao.

Production to Slow

The statement suggests the government has no plans to relax lending curbs that slowed growth to 9.1 percent in the third quarter from a year earlier, compared with a 9.8 percent pace in the first.

``Next year, China's production should slow,'' said Shen Haihua, vice president of Shanghai-based Southwest Futures Inc., one of the top 10 traders on the Shanghai Futures Exchange. ``That means it should import more, lending support to global aluminum prices.''

China was the world's seventh-largest exporter of aluminum last year, shipping 370,000 tons. Global production is estimated at 29.2 million tons this year by Barclays Capital. That would be worth $50 billion based on the average price on the London Metal Exchange.

Aluminum for delivery in three months gained 0.5 percent to $1,831 a ton on the London Metals Exchange yesterday.

Consumers Hurt

A gain in aluminum prices may add to costs at Superior Industries International Inc., the world's No. 2 maker of vehicle wheels. The company, which supplies more than 85 percent of its aluminum wheels to Ford Motor and General Motors Corp., buys 350 million pounds of aluminum a year.

``If aluminum continues to increase it makes the price of our products rise and that could affect the way automakers think when they choose to use steel wheels or aluminum wheels,'' said Superior's Chief Financial Officer Jeff Ornstein.

U.S. transportation industries in 2000 used 32.5 percent of the country's aluminum, said the Aluminum Association, a trade group. In the same year, aluminum eclipsed plastic to become the third-most used material in automobiles at 257 pounds a vehicle, the group said.

Less exports from China ``will be a positive surprise for global aluminum prices,'' said J. Alberto Arias, managing director of metals and mining at Goldman, Sachs & Co.'s global investment research.

Boeing

A single 747-400 aircraft uses 147,000 pounds (66,150 kilograms) of high-strength aluminum, according to Boeing Co., the maker of the plane. The company wouldn't comment on specific aluminum costs next year.

``Boeing Commercial Airplanes has in place long-term requirement contracts that protect the company and its suppliers from fluctuations in price and demand for raw materials,'' the company said in an e-mailed statement.

The cost of aluminum has surged about 50 percent in the last two years for Thor Industries Inc.'s Airstream unit, which uses about 1.5 million pounds a year to make its cigar-shaped travel trailers, said Mark Wahl, vice president of operations for Jackson Center, Ohio-based Airstream.

The company, which previously ordered in 30-day contracts, has signed a year-long agreement for 2005 with supplier Alcoa Inc., Wahl, 50, said in an interview. He wouldn't disclose the price or the amount. Aluminum makes up about 15 percent of the fixed costs for making a trailer, he said.

Inflation

Energy costs may replace food prices next year as the biggest contributor to China's inflation, a government official said in October.

Inflation reached a seven-year high of 5.3 percent in August and July before slowing to 4.3 percent in October.

``China's aluminum output adds 0.3 percent to gross domestic product, yet the industry uses 4.1 percent of China's electricity,'' Zhao Wuzhuang, a consultant at the Institute of Nonferrous Metals Technology and Economics in Beijing, said in an interview.

Chinese authorities recently decided to abolish the refund for exports on energy-intensive products such as aluminum, ferroalloy and phosphor starting Jan. 1, Beijing Antaike Information Development Co., an affiliate of China Nonferrous Metals Industry Association, said on its Web site.

The government had been considering reducing or ending the 8 percent tax rebate on shipments of metal to discourage expansion of capacity, according to a draft document made available to Bloomberg News in September.

Rebate

The rebate will be maintained until the end of 2004 for ``the continuity of the policies,'' said the document by the National Development and Reform Commission, which will be submitted to the State Council for approval. The government in January cut tax rebates to aluminum exporters to 8 percent from 15 percent.

That signals less aluminum and higher prices ahead for users such as Airstream's Wahl.

On Dec. 1, Wahl got a call from Alcoa that a customer had canceled a 64,000-pound order and the metal was available, Wahl said.

``We snatched it up, and we told them to let us know right away if anything else became available,'' he said.

To contact the reporter on this story:

Xiao Yu in Beijing at yxiao@bloomberg.net, and

Chia-Peck Wong in Singapore at at cpwong@bloomberg.net

To contact the editor responsible for this story:

Peter Langan at plangan@bloomberg.net.

Kremlin imposes conditions on Alcoa-Rusal deal

Russia Journal, Russia December 07, 2004 Posted: 14:26 Moscow time (10:26 GMT)

By John Helmer

The Russian government is preparing a list of conditions which Alcoa will have to meet before it can gain official approval to acquire the two aluminium rolling-mills, Samara Metal Works and Belaya-Kalitva Metallurgical Production Association, from current owner, Russian Aluminium (Rusal).

According to Nadia Antonova, spokesperson for the Federal Anti-Monopoly Service (FAS), which has been reviewing the terms of the deal since May, one of the conditions is aimed at maintaining current levels of aluminium supply to the Russian military-industrial complex. A second would preserve the volume of supply to domestic consumers in the non-military sector. Other conditions relate to enforcement of Russia's anti-trust regulations and maintenance of competitive pricing in the downstream aluminium industry. "Currently," Antonova told The Russia Journal, "the work [of review] is continuing, and hopefully, the decision will be positive."

She noted that the package of measures, which FAS has drafted, is being reviewed by a wide range of government ministries and agencies, including the prime ministry, and must be approved by them, before the deal can be implemented. For the time being, the conditions under consideration by senior officials do not aim to reduce Alcoa's proposed takeover of the two plants from Rusal, or dilution of its 100% shareholding stake.

A month ago, after briefing a cabinet session, FAS head, Igor Artemyev, said: ""We shall give our approval to Alcoa for the purchase of the Samara aluminum plant and the Belokalitvenskoye association. But we shall impose conditions of behaviour." Asked what conditions were being considered by FAS, Konstantin Dorokhin, an FAS spokesman, told The Russia Journal on November 2: "That will be decided and announced within a week." The month-long delay since then, and Antonova's confirmation that the process is still far from over, indicate that the deal is still facing serious high-level opposition in Moscow.

In a joint announcement on May 6, Alcoa and Rusal said that they had agreed on the sale and purchase of the two mills, Samara and Belaya Kalitva. Russian sources estimate the sale price at between $200 and $250 million. "Closing, subject to government approvals, is expected to be completed by June 30," the Alcoa-Rusal statement claimed. An Alcoa source has told The Russia Journal that in the proposed structure of the Rusal deal, the shares of the two Russian mills would be vested in a new corporate entity called Prime Alum, and the shares of the latter then sold to Alcoa. "Rusal has set up the shares in Prime Alum," the source said, "and we will be purchasing those shares. It is a legal technicality." This structure could be modified by the Russian government to allow Alcoa to acquire a smaller shareholding, but whether Alcoa would accept that is uncertain. In recent moves in the power engineering, oil, and mineral sectors, the Kremlin has signaled that will not approve foreign takeovers of Russian companies that are judged to be strategic in their sectors. Dorokhin did not rule out a change in shareholding structure. All that Antonova would say is that, should Alcoa seek further share purchases in the Russian aluminium sector, they would require FAS approval.

A source close to the negotiations on the deal said: "Alcoa continues to have a good working relationship with FAS and is moving forward with refinements on the FAS conditions." Alcoa is also "in discussions with the Government," the source said, "concerning a supply contract for aerospace products for the Government of the Russian Federation and expects this to be concluded in the near future.This appears to be the last step in the Government approval process."

If the only conditions the government decides to impose relate to maintenance of current supply volumes to domestic military and civilian plants, Alcoa should have no problem in complying. The Samara Metallurgical Plant is one of the world's largest producers of aluminium semi-fabricates, sheet products, forgings and castings, with a design capacity of 800,000 metric tons per annum. In 1998 it was producing at just 10% of that capacity. Output was raised to 199,404 tons in 2002, but last year, Rusal admits, it fell by 13% to just under 174,000 tons. That is just 22% of capacity.

The Belaya Kalitva Metallurgical Plant is much smaller, with design capacity for 250,000 tons of rolled products. Production in 2003 was just 41,430 tons; that was up 8% on the 2002 result, but just 17% of capacity.

Spic gets FAI's environmental protection award :

123Bharath.com, India 7 Dec 2004

Business India > Chennai, Dec 7 : The Southern Petrochemical Industries Corporation Ltd (Spic) has been awarded the annual environmental protection award by the Fertiliser Association of India (FAI) for the year 2003-04.

Spic won the award for NP/NPK category of fertiliser plants, it said in a press release here.

The FAI gave another award to Spic in recognising its initiative of `chilling carbon-dioxide at the suction of CO2 booster compressor in the urea plant' as the best technical innovation of the year, it said.

"The award is a recognition of its pollution-abatement activities in its di-ammonium phosphate and phosphoric acid plants," it said. Spic had earlier won the award for the year 2000-01 and 2001-02.

Spic has installed fluorine recovery unit to recover the fluorine and to convert it to a value-added product `aluminium fluoride' used as a flux in aluminium industries. Spic operates its DAP plants under `zero effluent discharge' concept, where used water is conserved, it said. "Spic ensures that the gypsum generated in the plants are used as a soil conditioner for agricultural lands and as a raw material in cement industries," it added. PTI

Aluminum May Rise as China Seeks to Cut Power Demand (Update2)

Dec. 8 (Bloomberg)

Global aluminum prices may rise after China, the world's biggest producer of the lightweight metal, said it will curb output to try to prevent a repeat of power shortages next year.

China has cut bank loans to aluminum producers by requiring them to invest 35 percent of their own capital in new projects, up from 25 percent. The government also may remove 8 percent export rebates on the metal in 2005 after power shortages this year caused blackouts. Electricity makes up 35 percent of the cost to make the metal, used in window frames, Ford Motor Co. vehicles and Boeing Co. aircraft.

``We will see rising aluminum prices,'' said Sean Zheng, who helps manage $100 million in stocks, including Aluminum Corp. of China Ltd., at Beijing-based Ding Tian Asset Management Co. London Metal Exchange prices may rise to $2,000 a ton next year, he said, which would be the highest in almost 10 years.

Aluminum in London gained 18 percent to $1,828 a ton in the past 12 months because of rising demand in the U.S. and China. Construction companies are the biggest users of the metal in China, where housing construction rose about 27 percent in the first 10 months of the year from the same period in 2003. The industry accounts for about 40 percent of demand in the country.

Chalco

``Clearly, any further constraints (on Chinese production) will be positive for aluminum prices with less metal on the market,'' said Robin Bhar, a metal analyst with Standard Bank, in an interview from London.

Expectations of higher alumina and aluminum prices yesterday led Standard & Poor's to raise Aluminum Corp. of China Ltd.'s credit rating one notch to BBB+. Aluminum Corp., known as Chalco, is China's biggest aluminum maker and the world's second-largest producer of alumina.

While aluminum output in China rose 21 percent to 5.34 million tons in the first 10 months of this year, efforts to rein in production are beginning to show.

China's smelters produced less metal a day in October than September, the first monthly fall since July, said the China Nonferrous Metals Industry Association. The smelters produced an average 18,774 metric tons a day in October compared with 18,867 tons in September.

Controlling investment will be one of the government's priorities next year, the Xinhua News Agency reported Dec. 5, after an economic policy meeting in Beijing attended by President Hu Jintao and Prime Minister Wen Jiabao.

Production to Slow

The statement suggests the government has no plans to relax lending curbs that slowed growth to 9.1 percent in the third quarter from a year earlier, compared with a 9.8 percent pace in the first.

``Next year, China's production should slow,'' said Shen Haihua, vice president of Shanghai-based Southwest Futures Inc., one of the top 10 traders on the Shanghai Futures Exchange. ``That means it should import more, lending support to global aluminum prices.''

China was the world's seventh-largest exporter of aluminum last year, shipping 370,000 tons. Global production is estimated at 29.2 million tons this year by Barclays Capital. That would be worth $50 billion based on the average price on the London Metal Exchange.

Aluminum for delivery in three months gained 0.5 percent to $1,831 a ton on the London Metals Exchange yesterday.

Consumers Hurt

A gain in aluminum prices may add to costs at Superior Industries International Inc., the world's No. 2 maker of vehicle wheels. The company, which supplies more than 85 percent of its aluminum wheels to Ford Motor and General Motors Corp., buys 350 million pounds of aluminum a year.

``If aluminum continues to increase it makes the price of our products rise and that could affect the way automakers think when they choose to use steel wheels or aluminum wheels,'' said Superior's Chief Financial Officer Jeff Ornstein.

U.S. transportation industries in 2000 used 32.5 percent of the country's aluminum, said the Aluminum Association, a trade group. In the same year, aluminum eclipsed plastic to become the third-most used material in automobiles at 257 pounds a vehicle, the group said.

Less exports from China ``will be a positive surprise for global aluminum prices,'' said J. Alberto Arias, managing director of metals and mining at Goldman, Sachs & Co.'s global investment research.

Boeing

A single 747-400 aircraft uses 147,000 pounds (66,150 kilograms) of high-strength aluminum, according to Boeing Co., the maker of the plane. The company wouldn't comment on specific aluminum costs next year.

``Boeing Commercial Airplanes has in place long-term requirement contracts that protect the company and its suppliers from fluctuations in price and demand for raw materials,'' the company said in an e-mailed statement.

The cost of aluminum has surged about 50 percent in the last two years for Thor Industries Inc.'s Airstream unit, which uses about 1.5 million pounds a year to make its cigar-shaped travel trailers, said Mark Wahl, vice president of operations for Jackson Center, Ohio-based Airstream.

The company, which previously ordered in 30-day contracts, has signed a year-long agreement for 2005 with supplier Alcoa Inc., Wahl, 50, said in an interview. He wouldn't disclose the price or the amount. Aluminum makes up about 15 percent of the fixed costs for making a trailer, he said.

Inflation

Energy costs may replace food prices next year as the biggest contributor to China's inflation, a government official said in October.

Inflation reached a seven-year high of 5.3 percent in August and July before slowing to 4.3 percent in October.

``China's aluminum output adds 0.3 percent to gross domestic product, yet the industry uses 4.1 percent of China's electricity,'' Zhao Wuzhuang, a consultant at the Institute of Nonferrous Metals Technology and Economics in Beijing, said in an interview.

Chinese authorities recently decided to abolish the refund for exports on energy-intensive products such as aluminum, ferroalloy and phosphor starting Jan. 1, Beijing Antaike Information Development Co., an affiliate of China Nonferrous Metals Industry Association, said on its Web site.

The government had been considering reducing or ending the 8 percent tax rebate on shipments of metal to discourage expansion of capacity, according to a draft document made available to Bloomberg News in September.

Rebate

The rebate will be maintained until the end of 2004 for ``the continuity of the policies,'' said the document by the National Development and Reform Commission, which will be submitted to the State Council for approval. The government in January cut tax rebates to aluminum exporters to 8 percent from 15 percent.

That signals less aluminum and higher prices ahead for users such as Airstream's Wahl.

On Dec. 1, Wahl got a call from Alcoa that a customer had canceled a 64,000-pound order and the metal was available, Wahl said.

``We snatched it up, and we told them to let us know right away if anything else became available,'' he said.

To contact the reporter on this story:

Xiao Yu in Beijing at yxiao@bloomberg.net, and

Chia-Peck Wong in Singapore at at cpwong@bloomberg.net

To contact the editor responsible for this story:

Peter Langan at plangan@bloomberg.net.

Kremlin imposes conditions on Alcoa-Rusal deal

Russia Journal, Russia December 07, 2004 Posted: 14:26 Moscow time (10:26 GMT)

By John Helmer

The Russian government is preparing a list of conditions which Alcoa will have to meet before it can gain official approval to acquire the two aluminium rolling-mills, Samara Metal Works and Belaya-Kalitva Metallurgical Production Association, from current owner, Russian Aluminium (Rusal).

According to Nadia Antonova, spokesperson for the Federal Anti-Monopoly Service (FAS), which has been reviewing the terms of the deal since May, one of the conditions is aimed at maintaining current levels of aluminium supply to the Russian military-industrial complex. A second would preserve the volume of supply to domestic consumers in the non-military sector. Other conditions relate to enforcement of Russia's anti-trust regulations and maintenance of competitive pricing in the downstream aluminium industry. "Currently," Antonova told The Russia Journal, "the work [of review] is continuing, and hopefully, the decision will be positive."

She noted that the package of measures, which FAS has drafted, is being reviewed by a wide range of government ministries and agencies, including the prime ministry, and must be approved by them, before the deal can be implemented. For the time being, the conditions under consideration by senior officials do not aim to reduce Alcoa's proposed takeover of the two plants from Rusal, or dilution of its 100% shareholding stake.

A month ago, after briefing a cabinet session, FAS head, Igor Artemyev, said: ""We shall give our approval to Alcoa for the purchase of the Samara aluminum plant and the Belokalitvenskoye association. But we shall impose conditions of behaviour." Asked what conditions were being considered by FAS, Konstantin Dorokhin, an FAS spokesman, told The Russia Journal on November 2: "That will be decided and announced within a week." The month-long delay since then, and Antonova's confirmation that the process is still far from over, indicate that the deal is still facing serious high-level opposition in Moscow.

In a joint announcement on May 6, Alcoa and Rusal said that they had agreed on the sale and purchase of the two mills, Samara and Belaya Kalitva. Russian sources estimate the sale price at between $200 and $250 million. "Closing, subject to government approvals, is expected to be completed by June 30," the Alcoa-Rusal statement claimed. An Alcoa source has told The Russia Journal that in the proposed structure of the Rusal deal, the shares of the two Russian mills would be vested in a new corporate entity called Prime Alum, and the shares of the latter then sold to Alcoa. "Rusal has set up the shares in Prime Alum," the source said, "and we will be purchasing those shares. It is a legal technicality." This structure could be modified by the Russian government to allow Alcoa to acquire a smaller shareholding, but whether Alcoa would accept that is uncertain. In recent moves in the power engineering, oil, and mineral sectors, the Kremlin has signaled that will not approve foreign takeovers of Russian companies that are judged to be strategic in their sectors. Dorokhin did not rule out a change in shareholding structure. All that Antonova would say is that, should Alcoa seek further share purchases in the Russian aluminium sector, they would require FAS approval.

A source close to the negotiations on the deal said: "Alcoa continues to have a good working relationship with FAS and is moving forward with refinements on the FAS conditions." Alcoa is also "in discussions with the Government," the source said, "concerning a supply contract for aerospace products for the Government of the Russian Federation and expects this to be concluded in the near future.This appears to be the last step in the Government approval process."

If the only conditions the government decides to impose relate to maintenance of current supply volumes to domestic military and civilian plants, Alcoa should have no problem in complying. The Samara Metallurgical Plant is one of the world's largest producers of aluminium semi-fabricates, sheet products, forgings and castings, with a design capacity of 800,000 metric tons per annum. In 1998 it was producing at just 10% of that capacity. Output was raised to 199,404 tons in 2002, but last year, Rusal admits, it fell by 13% to just under 174,000 tons. That is just 22% of capacity.

The Belaya Kalitva Metallurgical Plant is much smaller, with design capacity for 250,000 tons of rolled products. Production in 2003 was just 41,430 tons; that was up 8% on the 2002 result, but just 17% of capacity.

Spic gets FAI's environmental protection award :

123Bharath.com, India 7 Dec 2004

Business India > Chennai, Dec 7 : The Southern Petrochemical Industries Corporation Ltd (Spic) has been awarded the annual environmental protection award by the Fertiliser Association of India (FAI) for the year 2003-04.

Spic won the award for NP/NPK category of fertiliser plants, it said in a press release here.

The FAI gave another award to Spic in recognising its initiative of `chilling carbon-dioxide at the suction of CO2 booster compressor in the urea plant' as the best technical innovation of the year, it said.

"The award is a recognition of its pollution-abatement activities in its di-ammonium phosphate and phosphoric acid plants," it said. Spic had earlier won the award for the year 2000-01 and 2001-02.

Spic has installed fluorine recovery unit to recover the fluorine and to convert it to a value-added product `aluminium fluoride' used as a flux in aluminium industries. Spic operates its DAP plants under `zero effluent discharge' concept, where used water is conserved, it said. "Spic ensures that the gypsum generated in the plants are used as a soil conditioner for agricultural lands and as a raw material in cement industries," it added. PTI

Keen interest in Sarawak smelter

The Malaysia Star, Malaysia 8 Dec 2004

BY JACK WONG IN KUCHING

Two groups of new investors – from Canada and the United Arab Emirates (UAE) – are keen to invest in an aluminium smelter in Sarawak.

Sarawak Deputy Chief Minister Tan Sri Dr George Chan Hong Nam said the Government was hopeful that at least one of the two potential investors would work with Sarawak Hiro Sdn Bhd, developer of the Bakun hydro-electric dam, on the proposed project.

The proposed energy-intensive smelter project is expected to source power supply from Bakun for its operations.

"Investment in the aluminium smelter project is estimated at about RM10bil," Chan, who is also the state's Industrial Development Minister, told reporters at the state assembly complex in Kuching yesterday.

He said the state government had approved the Canadian group’s proposed RM8.2bil investment in the project. It had also given the nod to another aluminium smelter project by a Saudi Arabian company, with a proposed investment of RM3.9bil.

Tan Sri Dr George Chan

Smelter Asia Sdn Bhd, a joint venture between tycoon Tan Sri Syed Mokhtar Albukhary, Dubai-based businessman Mohamad Ali Alabbar and west Asian investors, was the first company to indicate interest in investing in the smelter project in Similajau, Bintulu.

Smelter Asia parent GIIG Capital Sdn Bhd had last year signed an agreement to buy a 60% stake in Sarawak Hiro but the deal lapsed earlier this year because GIIG did not meet certain conditions.

Chan said the federal and state governments were keen to proceed with the aluminium smelter as it could promote spin-offs in downstream projects.

Earlier, Chan told the state assembly that during the first 10 months this year, the state government had approved RM9.52bil of foreign direct investment (FDI).

He said besides the smelter projects, RM4.4bil of the proposed investments were in petroleum and other related products, wood-based and rattan products, electrical machinery, appliances and supplies.

Chan said Sarawak was trying to attract Taiwan companies with major investments in China but which now wanted to diversify and invest in other countries.

"We have been talking to some of these Taiwan investors," he said.

Chan said that to make Sarawak an attractive centre for FDI, the Government would provide good infrastructure and support facilities at reasonable cost.

China revives 'dead' alumina plant

The Australian, Australia December 10, 2004

Andrew Fraser

CHINA is showing renewed interest in Australia's aluminium industry, with two significant deals unveiled yesterday, including a contract to construct the long-promised Aldoga alumina smelter in central Queensland.

Comalco yesterday announced a $256 million sale of alumina to Chinese interests, while a Chinese consortium sealed a contract worth almost $1 billion to build the Aldoga smelter.

A month ago, the Queensland Government declared the Aldoga project dead.

But yesterday Aldoga Aluminium Smelter managing director John Benson said the company signed a contract this week with China's Non-Ferrous Corporation for the construction of the Aldoga smelter.

"We'll be using Australian contractors on site, but the technology and design are both Chinese," he said.

Mr Benson said the Aldoga group of companies had been extensively restructured in the past few months, which had led to some confusion in the marketplace about how the $2 billion project was proceeding.

Aldoga is now 51 per cent owned by Uzbekistani industrial tycoon Azam Aslanov and his two sons, Amon and Furkat, while the remaining 49 per cent is held by a unit trust in which the Industrial Union of Donbass from Ukraine has a controlling interest.

Mr Benson, who originally owned the company with Babcock & Brown's AICD investment group, said he had sold out because the project needed a backer with a lot of money who also understood the aluminium business.

But he said earthworks were proceeding at the Gladstone site in central Queensland and the company was on track to start construction in June.

While the Aldoga smelter has been announced several times, the major question mark over the project has concerned where it will source its raw material.

There is the possibility of a Chinese connection here, as one of the companies advising the Queensland Government on the development of the massive bauxite deposits at Aurukun on Cape York is Chalco, China Aluminium Corp, which is associated with NFC.

Mr Benson said Aldoga was also lining up its own raw materials through a 185million-tonne bauxite deposit near Derby in northwest Western Australia.

He said the company was undertaking a pre-feasibility study into the construction of a refinery in northwest Western Australia that would transform the raw bauxite into alumina, and by January the company wanted to have a preferred site for this factory.

"But in the short-term we can use bauxite at Gladstone from the spot market, although obviously in the long term we would like to have control of all the elements -- mining the bauxite, then the refinery, then the smelter," he said. "But there's substantial interest from China, and we anticipate a strong demand for aluminium for the next decade."

To underline the strong interest from China, Comalco yesterday announced the sale of 500,000 tonnes of alumina to major Chinese aluminium producers for $256 million.

A Comalco spokesman said the sale was "significantly higher" than in previous years.

Cambior Inc. buys majority interest in Guyana bauxite mining firm

Canada East, Canada - 9 Dec 2004

BERT WILKINSON

GEORGETOWN, Guyana (CP) - The government of Guyana has sold the majority interest in its state-owned bauxite mining company to Cambior Inc. allowing the Montreal gold miner to diversify its operations while it prepares to wind down its gold mine in the South American country.

The deal, revealed Thursday, gives Cambior (TSX:CBJ) 70 per cent of the state-owned Linden Mining Enterprise, which was renamed Omai Bauxite Mining Inc. Guyana will keep 30 per cent of the joint-venture company, whose main mining operation is at Linden Town, 113 kilometres south of the capital, Georgetown.

Cambior is paying $10 million US in cash and equipment for its stake and committing to $30 million in further investments to develop the bauxite operations as the company prepares for the shutdown of its Omai Gold Mines Ltd. operations in western Guyana when the deposit is mined out next year.

"We enter this agreement as friends. It is a welcome development," Prime Minister Samuel Hinds said.

In Montreal, Cambior president and chief executive Louis Gignac said the deal benefits both sides.

"We are looking forward to making this venture, which is an excellent complement to our gold assets, a success," he said.

"This project allows us to remain active in Guyana, is an excellent demonstration of our corporate policy of sustainability as Cambior will remain an important employer and economic contributor well beyond the closure of the Omai mine and provides us with a platform to evaluate future gold projects within the country."

Bauxite was Guyana's leading foreign exchange earner in the 1970s. It now ranks No. 4 after sugar, gold and rice.

Over the next three years, Cambior will invest $40 million US to acquire new equipment, modernize and improve production, Omai Bauxite president Rejean Gourde said.

Cambior will make an initial payment of US$5 million dollars to Guyana's government, Lavaliere said. The company will transfer another US$5 million worth of equipment from its Omai gold mine in western Guyana to the bauxite operation. By 2006, the company will invest another US$30 million dollars in the venture.

Annual production should rise to 217,000 tonnes from about 62,000 of bauxite, while the mine's workforce should increase to about 775 people by 2006 from 575 now.

Bauxite is a mineral used in the production of aluminum, a light-weight industrial metal is widely used in the packaging, aircraft, consumer products and automotive industries around the world.

Cambior is an international gold producer with operations, development projects and exploration activities, primarily in Quebec and South America.

It has run Omai Gold for nearly 12 years. The open-pit mine is Cambior's largest gold mine and in 2003 represented 52 per cent of the company's consolidated gold production. Gold production has been decreasing from a peak of 354,300 ounces in 2001, and the reserves are expected to be fully depleted next year.

Cambior's joint venture with Guyana is the Canadian company's first involvement in bauxite mining.

In its latest quarter, operating problems and a restructuring at its Doyon mine in Quebec helped produce a $6.1-million-US third-quarter loss for Cambior, offsetting a 74 per cent jump in revenues.

Cambior, which reports in U.S. dollars, said it lost two cents a share for the three months ended Sept. 30, compared with a profit of about $700,000 US or no cents a share for the same 2003 period.

Quarterly revenues at Cambior rose to $80.7 million from $46.5 million, while gold output rose to 174,500 ounces from 124,000 ounces.

The Montreal-area company said its losses reflect production problems at the Doyon mine in northwestern Quebec as a result of ground stability problems. The net loss also included a $1.9-million US restructuring charge due to cutting 130 jobs at the mine, as well as $3.4-million US in other charges at the Doyon operation as well as the company's Niobec niobium mine and Rosebel gold operation in South America.

Cambior shares traded down two cents at $3.26 Thursday on the Toronto stock market.

China To Remove Aluminum Tax Rebate In '05 - Chalco Exec

Yahoo News - Thursday December 9, 7:15 PM

BEIJING (Dow Jones)--China is set to abolish its tax rebate on aluminum exports in 2005 as part of efforts to slow the industry's growth, a senior executive at Aluminum Corp. of China Ltd. (ACH), or Chalco, said Thursday.

"The picture is quite clear now...I believe the tax rebate will be totally abandoned in the next year," Chalco Vice President Joshua Chen told Dow Jones Newswires on the sidelines of a finance forum in Beijing.

Currently, China's aluminum exporters pay a 17% value-added tax, of which 8 percentage points are reimbursed by the government. But the overly fast development of the aluminum industry has prompted the government to consider rejigging the policy. That is partly due to strained supplies of electricity, of which aluminum plants are large consumers.

The removal of the export rebate would likely lead to producers charging higher prices, which could hurt the competitiveness of China's aluminum exports, Chen said. That, in turn, could mean more output being sold in the domestic market, which would push down local prices.

Current market prices are already reflecting this scenario, Chen said.

He said aluminum futures on the London Metal Exchange are trading around $1,800 a metric ton. Once shipping and other costs are added, that is higher than the range of CNY15,600 to CNY15,700 a ton at which aluminum is trading on the Shanghai market, he said.

Chen said local aluminum prices are also under downward pressure from excess capacity in the industry - despite government efforts this year to curb investment in overheating sectors, including aluminum.

"Judging from the current trend, the overcapacity now facing the aluminum industry will continue into next year," he said. "If the market prices continue to hover below the level of CNY16,000, aluminum producers are unlikely to earn much money."

On the other hand, Chen said he believed the tight domestic supply of alumina, the key raw material used to produce aluminum, won't ease much next year, requiring aluminum producers to continue to import to fill their needs.

As well as producing aluminum, Chalco is China's sole producer of alumina.

Chen said Chalco plans to increase its production capacity of alumina in 2005, as it has done in past years, but he said output wouldn't be able to match growing domestic demand. He declined to give a precise figure for the planned alumina capacity increase.

Company Web site: http://www.chinalco.com.cn

-China Bureau, Dow Jones Newswires; 8610 6588-5848; djnews.beijing@dowjones.com

(Victoria Ruan contributed to this story.)

Romania: talks for sale of BBG Alum

Reporter.gr (subscription), Greece 18:25 - 09 December 2004

Balli Group is currently in talks for the sale of BBG Alum, metallurgy industry sources told Business Magazin. The potential buyer is Ruskyi Aluminyi (Rusal), the world's third leading aluminium producer. The offer by the Russian company could be as high as several tens of millions of dollars, sources say.

Both Balli Group and Rusal representatives in Romania declined to comment on the speculated sale.

Balli Group's decision to drop the Tulcea-based company came for a number of reasons. On the one hand, the Alaghband brothers, the founders and shareholders of the group, are now faced with a series of problems, including legal issues, and have decided to concentrate on the group's larger businesses. However, there are also local reasons.

Early in the 1990s, Balli built almost its entire strategy around the integrated aluminium group it planned to create. At the time, the group enjoyed favourable conditions, having enlisted as advisor General Victor Stanculescu, a highly influential character close to the President of the day. Balli bought harbour operator Comvex Constanta and Alum Tulcea, and established the RoBank bank and Asigurarea Anglo-Romana. insurance company.

Some years ago, General Stanculescu fell out of favour and, added to that, Balli failed to acquire Alro in 2002. It is for these reasons the group is now preparing an exit from the Romanian market. Balli sold RoBank to Hungary's OTP Bank last year and dropped its financial support for Asigurarea Anglo-Romana, which lost its operating licence.

Truck driver hurt at Ormet

Martins Ferry Times Leader, OH 10 Dec 2004

By LINDA L. HULL, Times Leader Staff Writer and Staff Reports

A TRACTOR trailer driver was injured Thursday after leaving the Ormet Plant in Hannibal with a load of aluminum.

According to the Ohio State Highway Patrol, St. Clairsville Post, the name of the driver is not being released because of the criminal investigation.

Sgt. Jason Greenwood said the driver of the truck was the second one out of the lot. "The first truck got hit by something also but it didn't hit the windshield. It hit the side of the truck," Greenwood said.

"The driver of the second truck was making the curve to go north on SR 7," he continued. "Just before the second driver got hit in the windshield he saw a person lift a tarp and pull it aside, by the 'red building.' He thought he got shot by a gun and then the windshield broke causing him to have problems seeing anything else."

Greenwood noted, "We think what happened was that the driver was shot by a paint-ball gun with a ceramic marble."

The driver had facial lacerations from the broken glass and he was treated and released at a local hospital.

Greenwood stated that nine officers were dispatched to the scene of the incident within minutes. Three units from the Marietta area, two from the headquarters in Cambridge and four from the St. Clairsville office.

The OSHP officer stated that while the only way to ensure that no more violence occurs at the Ormet plant would be to station a highway patrolman in the vicinity, Ohio law requires that the officers not intervene unless someone breaks the law.

In other matters, following a conference in U.S. Bankruptcy Court on Thursday, a representative of the Wheeling-based aluminum producer Ormet Corp. said the company's reorganization plan will be edited and resubmitted to the court for approval today.

The representative said Ormet remains confident that Judge Barbara Sellers will confirm the reorganization plan, which aims to restructure the company and allow it to emerge from bankruptcy by the end of the year.

"The result was that all additional questions she (Sellers) had were resolved," said the representative. "Certain changes to the wording of the order were agreed to in court today. The order is being edited for those changes and will be uploaded for her tomorrow for her signature."

In related news, negotiations between Ormet and the United Steelworkers of America resumed Thursday for the first time since 1,300 Ormet workers walked off the job Nov. 22. The discussions apparently were uneventful, although both parties are scheduled to meet again today in Pittsburgh.

According to the company representative, no additional dates for negotiations had been set as of Thursday evening.

USWA Staff Representative Denny Longwell said, "I only want to say that we've met all day and we broke for the evening ... We're going to meet again tomorrow, and other than that, there's nothing to report."

The Ormet representative would say only that talks are "ongoing."

Regarding the new negotiations, Longwell spoke Wednesday about what he believes it would take to bring an end to the strike.

"It would take Ormet to start working with us and not against us," said Longwell. "That in itself would not bring it to an end, but it would be a stepping stone."

The company representative declined to comment on the new talks.

The USWA and Ormet have been involved in a long-running dispute over their collective bargaining agreements. Ormet has received permission from the bankruptcy court to reject those agreements and implement its own labor proposal, although it has yet to do so.

The company's reorganization plan calls for $23 million in cost savings from labor, but the union and the company disagree over which of the labor proposals would actually accomplish those savings and make the company viable in the long-term. In addition, both parties have claimed the other party's proposal would send the company back into bankruptcy or worse.

About 1,300 Ormet workers walked off the job Nov. 22 at the company's reduction plant and rolling mill in Hannibal after Ormet refused to delay a confirmation hearing on its plan of reorganization in U.S. Bankruptcy Court. That hearing was held Nov. 23, although Sellers has not yet issued a ruling.

Under the plan, ownership will be transferred to the company's creditors, with New York-based private equity fund MatlinPatterson Asset Management becoming the controlling shareholder.

USWA Local 5724 President Loren Hartshorn previously said the union does not want the reorganization plan confirmed because it would give MatlinPatterson "new rights." He said the union knows of three other companies that would like to purchase Ormet, and it is the union's hope that those firms would be more amenable to the USWA labor proposal.

Ormet Chief Executive Officer Michael Williams said ownership would not actually transfer to MatlinPatterson until after the company emerges from bankruptcy. The company's goal is to emerge from bankruptcy by the end of the year. Regarding the interested buyers, Williams said he only knows of companies that submitted "letters of interest" to Ormet after the reorganization plan had been submitted and after the restriction on third-party bidders - or "exclusivity" - had been put in place.

When asked why the union was not in favor of MatlinPatterson as a potential owner, Longwell said he believes the New York firm has taken the side of Ormet because it has not intervened in the labor negotiations otherwise.

Ormet Talks 'Constructive'

Wheeling News Register, WV 11 Dec 2004

WHEELING - Negotiations continued Friday between Wheeling-based aluminum producer Ormet Corp. and the United Steelworkers of America, with one USWA representative describing the talks as "constructive."

Also on Friday, an Ormet representative said U.S. Bankruptcy Court Judge Barbara Sellers has not yet confirmed the company's reorganization plan. The representative, who asked not to be identified, said an edited version of the plan is still being reviewed by attorneys representing not only Ormet, but also the USWA, MattlinPatterson Asset Management and the creditors' committee.

The company was hoping to have the plan confirmed Friday, but it is now looking ahead to Monday for the court's decision.

Ormet currently is operating its Hannibal reduction plant and rolling mill with 300 salaried workers due to the ongoing strike by its 1,300 union-represented employees. On Thursday, the company and the union began negotiations for the first time since the strike began Nov. 22.

The talks continued in Pittsburgh Friday, and both parties confirmed the meetings will resume early next week.

The talks "were constructive today, and we will be back at the table on Monday and probably Tuesday and Wednesday of next week as well," said USWA Staff Representative Denny Longwell.

"I'm a little more optimistic than I was, but I'm still very cautious ..." Longwell added. "I think it's a good sign as long as we're still back at the table and scheduling more talks for next week."

Regarding the progress of the negotiations, the Ormet representative said, "It's hard to tell. There are a lot of moving pieces, but everyone is working very hard."

Longwell said right now the focus is just to "keep negotiating."

"At this point, with us on strike, I don't know if ( confirmation of the reorganization plan) makes any difference," he added.

Should the plan be confirmed Monday, the company would still have to meet a list of conditions in order to emerge from bankruptcy. Ormet's original goal was to exit bankruptcy by the end of the year, although the company representative noted Friday that, "probably at this point, it's going to be a little bit past the end of the year."

According to the representative, the most important conditions that must be met before emerging from bankruptcy include securing "exit financing" for the company - the goal is to have a $150 million credit facility - and demonstrating to the creditors' committee that the total amount of all creditor claims is under $80 million. Once those conditions are met, Ormet will have the ability to emerge from bankruptcy after filing a 10-day notice with the court.

In the meantime, Ormet's reorganization plan calls for $23 million per year in cost savings from labor, but the union and the company disagree over which of their labor proposals would actually accomplish those savings and make the company viable in the long-term. Both parties have claimed the other party's proposal would send the company back into bankruptcy - or worse.

Under Ormet's reorganization plan, ownership will be transferred to the company's creditors after the company emerges from bankruptcy. One of the largest creditors, New York-based private equity fund MattlinPatterson Asset Management, will become Ormet's controlling shareholder. Ormet's spokesman said Friday that MattlinPatterson does not have any influence over the company's negotiations with the USWA.

BPA debt savings better spent on transmission

Mid Columbia Tri City Herald, WA Sunday, December 12th, 2004

You can't blame Snohomish PUD for asking questions about the money the region still owes on an overly ambitious plan for building nuclear reactors. If the debt had been a baby, it would have graduated from college by now.

But the public utility's justifiable skepticism shouldn't go so far as to derail the Bonneville Power Administration's plan to parlay the old Washington Public Power Supply System's remaining debt into new transmission lines.

BPA didn't do itself any favors by drafting the refinancing plan without involving utilities or the public in the process. The agency never hid the dealings but still looked like it was trying to avoid scrutiny.

Even so, it's myopic to complain that the scheme saddles some ratepayers with higher energy costs, while offering no direct benefit.

The economic fate of everyone in the Northwest depends on reliable and plentiful supplies of energy. Our interdependence means that the economic repercussions of any transmission problems in the regional system won't be isolated to a single place or class of customers.

Progress already is being made. The new Grand Coulee-Bell line began transmitting earlier this month, moving power west from Spokane -- where the closure of Kaiser Aluminum has left a surplus -- to the Puget Sound corridor, where it's sorely needed.

But BPA's aging infrastructure remains in dire need of updating. The agency's ability to borrow money for the effort is limited by Congress, which makes savings from lower interest rates one of the few options available for completing essential improvements to the power system.

The additional delays in reaching the final payment on the WPPSS bill are bound to stick in the craw of every utility that owes a share of the bill.

After all, many young adults struggling to fit the monthly electric bill into the family budget weren't even born when the WPPSS disaster unfolded, leaving the debt on unfinished reactors that will never produce revenue. Those customers will be pushing middle age before the final bonds are paid off in 2018.

Still, it's better that they invest now in the system that will carry them through old age.

Dubal's Dh 748.7m Potline-7 expansion ahead of schedule

MENAFN, Middle East Emirates News Agency (WAM) - 12/12/2004

DUBAL, internationally recognized as one of the world's major aluminum producers has announced that its Dh 748.7 million Potline-7 expansion, undertaken during March 2004 and projected to be finalized by the fourth quarter of 2005, is currently far ahead of its provisional schedule and is substantially within the original projected budget.

With the eventual finalization of the expansion project, production at DUBAL is set to exceed 74,000 tones per year, to an unprecedented total output of over 761,000 tones per annum, according to a press release issued today.

"The expansion is in accordance with the directions of Sheikh Hamdan Bin Rashid Al Maktoum, Deputy Ruler of Dubai, the UAE Finance and Industry Minister and Chairman of DUBAL, who intimated that our output should be at a par with the ever increasing international demand for aluminium and finish the expansion within its projected schedule and budget," said Abdulla Kalban, , Director of Operations, DUBAL.

"Work on the on-going expansion project on Potline-7, a ground-breaking venture for DUBAL, has so far proved to be a resounding success, far exceeding our initial expectations. We are far ahead of our schedule and well within our projected budget. The Potline-7 expansion will garner DUBAL even greater international recognition and will serve to further elevate the standing of the UAE as a whole. We are also exceptionally proud that the project is being conducted under the expert supervision of DUBAL's in-house trained UAE nationals, which is also in line with DUBAL's management directions," added Abdulla Kalban.

Much of the arduous groundwork on the Potline-7 expansion site has already been completed, whilst the necessary civil works is very much underway and the structural steel work is up.

"Apart from the obvious freedom to update our technology without interference from outside parties, our own in-house cell technology has been of principle benefit in our expansion of Potline-7. Through its use, we have made the process of expansion even more efficient, as well as ensuring the continuing reduction of our operational costs DUBAL will greatly benefit from this expansion, once the venture is completed." said Mohammed E. Nagib, General Manager, Engineering and maintenance.

BFL draws revenue plans for Germany

Sify, India - Sunday, 12 December , 2004, 08:57

Mumbai: Bharat Forge Ltd (BFL) plans to increase the revenues of the Rs 200-crore CDP Aluminiumtechnik GmbH & Co KG (CDP AT), by nearly 50 per cent.

The company acquired CDP AT on Friday, further strengthening its position in the market for passenger car forgings but more importantly, gaining a toehold in the aluminium forgings segment.

"We believe we can increase revenues by close to 50 per cent without additional investments," Amit B. Kalyani, Executive Director, BFL, said.

He declined to assign a timeframe for the cited revenue improvement, but said CDP AT had been a strategic acquisition. Aluminium components have seen rising use in high-end passenger cars abroad.

Though raw material cost as percentage of sales is 55 per cent in that segment against the 42-43 per cent in steel forgings (it moved up from 33 per cent due to rising steel prices), aluminium parts are higher priced.

Given higher price as revenue driver in aluminium forgings and the fact that volumes are typically less than that in conventional forgings, Kalyani did not fix an installed capacity for CDP AT.

The company, promoted by the erstwhile owners of CDP Bharat Forge (BFL's first acquisition in Germany), has existing clients such as BMW, Audi, Volkswagen and Ford.

It is located near Dresden, home to the SUV plant of Porsche and BMW's new plant.

The targeted revenue increase follows steps that yielded similar dividends at CDP Bharat Forge, which, acquired at break-even stage has since returned robust performance with a turnover of Rs 561 crore (PBT of Rs 40 crore) for January-September 2004. While there has been no shifting of processes or assets to India from CDP Bharat Forge and manpower employed has only gone up by a further 40, Kalyani said the higher income was effected through better utilisation of fixed assets, an investment of five million euros to de-bottleneck operations and product mix rationalisation.

CDP Bharat Forge's capacity is 1,10,000 tonnes, while BFL's own capacity will rise to 2,40,000 tonnes once its Rs 350-crore capacity expansion plan is near complete by mid-2005. Related machining capacity will be commissioned through February-October, 2005.

Despite these capacity additions, Bharat Forge would still trail Thyssen Krupp, the global leader in forgings. "Our goal is to be the customer's most preferred source for these parts. Being number one or two should be a by-product of that effort," Kalyani said.

The company's China plans (it had exports of Rs 100 crore last fiscal to China, mainly to FAW and Dong Feng) are reserved for the medium-term, but its US plans may bear fruit earlier. As in Europe, likely acquisition in the US would seek a facility that fetches both manufacturing and design expertise.

According to Kalyani, the level of design engineering, which Bharat Forge has entered through CDP and seeks to have in the US, is of the co-development category and requires working closely with OEMs abroad. It is possible to have back-end support from Pune but the work itself cannot be shifted citing lower cost.

"Front-end design engineering work has to happen where the customer is," he said.

BFL wants its proposed US facility to cater to passenger cars and engine components

Alcoa's Wenatchee Works aluminum smelter fired up a potline

OregonLive.com, OR 13 Dec 2004

WENATCHEE, Wash. (AP) — Alcoa's Wenatchee Works aluminum smelter fired up a pot line Monday for the first time in more than three years.

The plant had been sitting idle since 2001, after Alcoa shut it down because of high electricity prices and low aluminum demand. The plant's workers — around 400 — continued to receive paychecks under an agreement with a public utility district that sold the plant's unused electricity.

The first aluminum will be produced next month, plant manager Bob Wilt said.

Only two of the plant's four pot lines will be used initially, Wilt said. A fifth line was disassembled while the plant sat idle.

During the early 1990s, the plant employed almost 900 workers when all five pot lines were in use.

Alcoa, Siemens, Total Await Word on Deals

Moscow Times (subscription), Russia Tuesday, December 14, 2004. Page 7.

Combined Reports The Federal Anti-Monopoly Service said Friday that it would likely approve two major foreign direct investments soon and a third within a month.

Service chief Igor Artemyev told reporters that U.S. metals giant Alcoa will likely win approval within days to buy two rolling mills from Russian Aluminum.

Alcoa, the world's biggest aluminum producer, agreed in May to buy controlling stakes in the plants for an undisclosed price. The companies had said the takeover would be complete by June 30.

Artemyev also said Siemens, Germany's biggest engineering company, will probably win approval this month to take over Siloviye Mashiny, or Power Machines, an engineering company controlled by billionaire Vladimir Potanin's Interros investment vehicle.

"There are defense issues, but development is very successful," Artemyev said of the Siemens deal. "There will be a decision by the end of the year. I hope it will be a successful decision."

A decision on another major acquisition, the purchase of a 25 percent stake in No. 2 gas producer Novatek by French energy major Total, will be decided within a month, Artemyev said.

Regulators asked Novatek for more information, Artemyev told reporters in Moscow. Total agreed in September to buy the stake to get an entry point in Russia, holder of the world's largest gas reserves.

"We requested a huge amount of documents from Novatek, which is reorganizing its equity and restructuring its management system," Artemyev said.

The regulator also requested more data on Total's market share, Artemyev said.

Strike against small aluminum maker in fourth week

Biloxi Sun Herald, MS Mon, Dec. 13, 2004

JAY COHEN, Associated Press

HANNIBAL, Ohio - Greg Taylor sipped coffee as he scanned the sign-up sheets for picketing he can no longer do at bankrupt aluminum maker Ormet Corp.

Taylor was among strikers charged with disobeying a court order to stay at least 2,000 feet away from one of two Ormet plants in southeast Ohio where workers walked out three weeks ago in a dispute over the company reorganization plan.

"We can't stand on the other side of the road now or build a shanty or anything," said Taylor, 43, of New Martinsville, W.Va. "I don't know. It's just bad."

The 1,300 United Steelworkers members represent about 60 percent of the work force for Wheeling, W.Va.-based Ormet, which operates in four states. The plants are in rural Monroe County, rich with views of green hillsides and the Ohio River but with a 10.6 percent unemployment rate, the fifth highest in Ohio.

While striking workers in camouflage coats and flannel shirts huddle around wood fires built in trash cans outside, about 300 managers, executives and retirees work mostly 12-hour shifts. They drive forklifts, run cranes and help manage the assembly line where carbon is added to electrified raw materials in pots before it becomes aluminum.

"The company is not looking for confrontation here," said chief executive Mike Williams, his hard hat on the table in front of him.

Ormet wants to save $23 million by freezing pension benefits, raising worker health plan contributions by $90 a month, or 10 percent to 20 percent depending on the contribution, and changing rules for job and overtime assignments. The plan is awaiting approval by a bankruptcy judge in Columbus.

The union has proposed eliminating 300 of the plants' 1,220 jobs, raising the company's health care deductible and freezing its pension plan in favor of contributions to the United Steelworkers plan.

The union says its plan would make Ormet stronger in the long term because it reinvests some of the profits into the company.

Since the strike began Nov. 22, groups of pickets have been arrested twice, and sheriff's deputies said some had knives, baseball bats and other weapons. Union officials dispute the charges, saying some of the pickets may have had pocket knives or axes for chopping wood for the fires but they are not brandishing weapons.

The company employs about 2,200 workers at five plants in Ohio, Indiana, West Virginia and Louisiana.

Aluminum industry officials and analysts say the industry is in transition because energy and labor costs are forcing companies to close smelters, mostly in the Northwest. The larger companies that can afford the latest technology are in a better position to succeed, experts say.

However, Williams said Ormet can shift its focus to whatever aluminum product has the highest profitability at a given time. He said the company also is skilled at producing billets, an aluminum cylinder used to make light fixtures, pots and pans and hubcaps.

"We believe that we're an alternative to the Alcoa and Alcans and if Ormet did not exist it would change the dynamics of the market," Williams said.

Carl Irwin, a West Virginia University research administrator who analyzes industries in West Virginia and Ohio, said the company is small but remains a step above similarly sized aluminum makers because of its niche products.

Union officials blame bad decisions by Ormet executives for the financial troubles while Williams cites a longer than expected downturn in the economy beginning in 2000.

According to bankruptcy court documents, three companies have expressed interest in buying the plants. Ormet says that's not an option because negotiations can be lengthy and there is no way to measure how serious the companies are.

"There's people out here that are interested in this place but no, this company wants to take all the concessions off the backs of the workers and the retirees," said Loren Hartshorn, president of United Steelworkers Local 5724, "and it's just not going to happen."

Williams said the fact that a bankruptcy court judge allowed the company to break labor contracts to obtain concessions is evidence that the reorganization plan spreads the burden equally among the workers, management and creditors.

Ormet expects to idle operations after two to four months if there's no labor agreement.

Company officials said they are producing about 66 percent of pre-strike levels.

Accountants and human resource workers can be seen shoveling carbon residue off the floor and into containers so it can be salvaged. There are neatly made cots in several offices, and people shuffle in and out of the cafeteria carrying plates of deli sandwiches and chips.

Arrested strikers were accused of violating court orders by trying to block vans from entering a plant. The union said they believed the vans were carrying replacement workers.

Williams said the vans were carrying food, more security workers and a salaried employee and that there are no plans to use replacement workers.

Union officials remain suspicious of people bused in by the company.

"I don't know whether they're in there working or they're not," Hartshorn said. "The company says they're not but the company says a lot of things that I don't believe."

ON THE NET http://www.ormet.com http://www.uswa.org

Zhongfu Industry to raise aluminum output

China Daily, China (Xinhua) 2004-12-13 13:36

Henan Zhongfu Industry Co. Ltd. has announced it will raise its aluminum output by about 23 percent to 185,000 tons in 2005.

The Shanghai-listed company has secured supply contracts for enough alumina next year to meet its target, Wang Linzhi, trading manager of Zhongfu, told the 2004 China Aluminium Forum in the southern island province of Hainan.

Aluminum Corp. of China Ltd. will supply one-third of Zhongfu's alumina next year, and the rest will be covered by term imports, he said.

The company is expected to produce 150,000 tons of aluminum this year, boosted by the completion of a new 125,000-ton smelter in March and the upgrading of its existing facilities.

It is also building a power plant expected to start operating by 2006, which would be sufficient to cover power demand for about 400,000 tons of aluminum production, Wang said.

Despite the sector's surging revenues this year, its profits have been slowing as the government has raised power fees to slow down the fast-growing economy.

In the first three quarters of this year, Zhongfu's turnover more than doubled to 1.12 billion yuan (US$135 million) from a year ago, but its net profit only increased 7 percent to about 54.47 million yuan.

Kaiser to tell Houston goodbye

Houston Chronicle, TX Dec. 14, 2004, 12:06AM Copyright 2004 Houston Chronicle

Aluminum outfit goes to California early next year

By TOM FOWLER

Kaiser Aluminum will relocate its corporate headquarters from Houston to Southern California early next year.

The 40 employees at the company's headquarters, which was at one time the No. 2 aluminum producer in the country by revenue, were told of the move in late November.

The jobs will be moved to Foothill Ranch, Calif., where they will be merged with the company's fabricated products headquarters. A small number of employees will be offered a chance to transfer to California.

The Houston headquarters, which was home to Kaiser's accounting, legal and finance operations, is in the same building as Maxxam Corp., the Houston company that owned 62 percent of Kaiser's shares prior to its February 2002 bankruptcy.

Back then Kaiser employed about 5,000 workers and was involved in aluminum mining, refining and manufacturing. When the company comes out of bankruptcy some time next year, it should be a much smaller company, spokesman Scott Lamb said.

The mining and refining businesses in the United States and abroad are being sold off, leaving 11 manufacturing plants located throughout North America with about 2,000 employees.

Those plants make aluminum plates, pipes and sheets used in a variety of businesses, particularly aerospace.

The company will also have a 49 percent ownership interest in an aluminum smelter in Wales.

"That facility has traditionally produced a good cash flow and will serve as a natural hedge, or balance, against the metal we purchase for our plants," Lamb said.

While details of the bankruptcy plan have not been filed, the company is expected to cancel its stock without consideration and issue new stock when it emerges from Chapter 11 reorganization. The new stock will likely go to bondholders and other creditors.

Kaiser's last few years have been troubled.

In 1999 its plant in Gramercy, La., was shut down because of an explosion that injured 24 employees.

In 2000 it ended a long-running labor dispute with workers at five plants in Washington, Louisiana and Ohio, but two years later a judge ruled the lockout was illegal.

After the terrorist attacks of 2001, aluminum prices fell significantly, in part from a drop in aerospace production. The company also saw revenues fall sharply when it closed two smelters in the Pacific Northwest. The plants couldn't operate profitably after power prices skyrocketed when a drought cut hydroelectric power generation. The company also raised eyebrows when it profited by selling the power from the closed smelters during electricity price spikes.

When the company filed for Chapter 11 reorganization in 2002, it cited mounting debt, employee pension plan costs and asbestos litigation expenses. Since the bankruptcy began, federal officials have taken over some of the company's pension plans.

Norsk Hydro: Write-Down of Book Value of German Primary Aluminium Plants

Yahoo News (press release) Tuesday December 14, 10:24 am ET

OSLO, Norway, Dec. 14 /PRNewswire-FirstCall/ -- Hydro will write down the book value of its German primary aluminium plants by approximately NOK 1.5 billion after tax due to weakened competitiveness caused by the strengthened EUR versus USD, and increasing energy costs. The write-down will be charged to the fourth quarter results this year, and will have no cash effect.

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The strengthening of the Euro versus US dollars puts European aluminium producers at a cost disadvantage in the global aluminium market. The current power contracts for Hydro's German primary aluminium plants expire end of 2005. Current power prices in Germany are significantly higher than in 2002, when these plants were acquired. Hydro then anticipated a significant increase in future power costs. However, based on the ongoing negotiations for renewal of the contracts, Hydro now expects an even higher increase than in 2002.

Based on this situation the expected future cash flows from the German primary aluminium plants, based in Euro, are not sufficient to support the present book value of these assets.

The assumptions used for the calculations are for the coming four years based on the forward curve for both the aluminium price and the USD/EUR currency ratio. For the longer term an aluminium price of USD 1,500 and a USD/EUR ratio of 1.14 are used. The power price assumptions reflect the current market level and outlook for the longer term.

The final write-down amount will be included in the fourth quarter 2004 results, and is expected to represent a charge to operating income of approximately NOK 2.4 billion. As a consequence of the write down, the applicable deferred taxes will be reduced by approximately NOK 0.9 billion.

Hydro has two fully-owned and one part-owned primary aluminium plants in Germany. Hydro Aluminium Neuss, with a production of 221,000 tonnes in 2003, is a key supplier of metal to Hydro's major rolled products units in Norf and Grevenbroich, and with operating costs on level with other European primary aluminium plants. Hydro Aluminium Stade had a production of 69,000 tonnes in 2003. Hydro also owns 33 percent of Hamburger Aluminium-Werk, where Hydro's share of the production volume in 2003 was 43,000 tonnes. The write-down applies to all three assets. After the write-down, the remaining book value is approximately NOK 900 million. Hydro will continue to evaluate the future competitive position of its German primary aluminium plants.

The acquisition of the German aluminium company VAW in 2002 gave Hydro a solid platform for further development of the company as one of the world's leading aluminium suppliers, with a value creation potential among the best in the industry. The acquisition contributed to broadening Hydro Aluminium's geographical reach, and strengthened the company's positions in several important market segments. A rapid and efficient integration process resulted in cost reductions better than targeted. This has made an important contribution to the performance improvements for Hydro Aluminium over the last couple of years.

Judge approves aluminum maker Ormet bankruptcy plan

Kansas City Star (subscription), MO - Wed, Dec. 15, 2004

MARK WILLIAMS, Associated Press

COLUMBUS, Ohio - A judge approved the reorganization plan Wednesday of aluminum maker Ormet Corp., clearing the way for the company to leave bankruptcy as workers at two plants in southeast Ohio remain on strike.

"Although we can exit bankruptcy without first ending our labor dispute, that would clearly not be an optimal situation," Ormet chief executive Mike Williams said in a statement.

A judge earlier allowed the company to break its contracts with workers at two plants in Hannibal, about 115 miles southeast of Columbus. More than 1,200 workers went on strike Nov. 22, and the company has been using salaried employees to run the plants.

The company, based in Wheeling, W.Va., has said it needs concessions from the workers to survive. Ormet is trying to cut $23 million in costs by freezing pension benefits, raising worker health plan contributions and changing work rules.

The United Steelworkers proposed eliminating 300 of the plants' 1,220 jobs, raising the company's health care deductible and freezing the company's pension plan and instead contributing to a pension plan run by the union. The company has rejected the union's proposals.

Ruth Ford, Ormet's chief restructuring officer, said approval of the reorganizational plan by Judge Barbara Sellers on Wednesday allows the company to leave bankruptcy later this month or next month. She said no additional court action is required. The company will be transferred to Ormet's creditors.

Union officials have asked the court to rule on its motion to have the company consider bids to buy the plants, but Ford said Sellers' decision to approve the reorganization plan makes that effort moot.

Ford said the company and the union met in Pittsburgh on Wednesday. Telephone messages seeking comment were left for the presidents of the two union locals.

One of the plants makes molten aluminum and is the other is a rolling mill that makes aluminum coils for other divisions to turn into finished products. The company has maintained that production is at or exceeding levels it set for the strike.

Ormet has about 2,200 employees and operations in Ohio, West Virginia, Indiana and Louisiana.

ON THE NET http://www.ormet.com http://www.uswa.org

Chinese smelter forges ahead

New Zealand Herald, New Zealand 16.12.04

SHANGHAI - A Chinese metals contractor plans to move ahead with a deal potentially worth US$1 billion ($1.4 billion) to build and design a 420,000-tonne-per-year aluminium smelter in Australia, despite doubts about the project's viability.

China Nonferrous Metal Industry Foreign Engineering and Construction Co (NFC) agreed last week to begin engineering and design work for the Aldoga smelter in Central Queensland, it said yesterday in a statement in the China Securities Journal.

If it goes ahead, the smelter would be China's largest engineering project in Australia.

It had been one of the deals signed during Chinese President Hu Jintao's visit to the country in 2003. Beijing is encouraging investment in overseas raw materials projects to feed the country's rapid industrial growth and keep its factories churning out exports.

Now, NFC has the option to build and equip the smelter for about US$1 billion. The initial agreement - which follows a similar one a year ago - must be finalised within six months, the Chinese firm added.

The Aldoga smelter project was halted this year due to increases in construction and shipping costs, Australian media had reported.

A lack of raw material sources also dogged the project, they said. Aluminium is smelted from alumina.

"It's not in our best interest at the moment to lock in alumina supplies, given the high price of alumina," said Aldoga general manager Brett Smith. "We are negotiating supply agreements for both alumina and carbon anodes."

The smelter will adopt NFC's smelting technology, he said.

Site-clearing for the smelter began in 2003, and construction was slated to begin in late 2005, according to Aldoga's website.

NFC has received almost US$600 million in export credits from China Import-Export Bank for the project, said board secretary Du Bin. It had committed US$2 million to preparatory work.

Earlier this year, Brazil's Companhia Vale do Rio Doce inked a framework agreement with Aluminum Corp of China (Chalco), China's biggest bauxite, alumina and aluminium producer, to build an alumina refinery in Brazil.

Alcan closes Falkirk mill after 60 years

The Herald, UK 15 Dec 2004

Copyright © 2004 Newsquest (Herald & Times) Limited. All Rights Reserved

THE Alcan mill in Falkirk closed yesterday, ending the company's 60-year association with the Stirlingshire town.

Production at the aluminium sheet rolling site, which opened in 1944 as part of the war effort, is to be relocated to the company's operation in Newport, South Wales.

Two dozen of the 86 staff will remain at the mill until April to help clear equipment. About 10 are expected to relocate to South Wales. A handful of staff have found posts outside the company, but the majority have taken early retirement.

James Johnston, Falkirk provost, whose ward includes the mill, said last night: "I know three generations of families who worked there. It'll be hard for people who have worked there for 40 years."

Joan Chesney, a spokeswoman for Alcan, expressed regret at the closure, but said: "The extremely competitive market left us with no alternative but to close the mill. We have employed a highly skilled workforce over the years and they deserve recognition."

Alcan's Fort William smelter, with about 350 staff, will continue to operate. The company also runs power generating plants at Fort William and Kinlochleven to serve the smelter.

THE Alcan mill in Falkirk closed yesterday, ending the company's 60-year association with the Stirlingshire town.

Production at the aluminium sheet rolling site, which opened in 1944 as part of the war effort, is to be relocated to the company's operation in Newport, South Wales.

Two dozen of the 86 staff will remain at the mill until April to help clear equipment. About 10 are expected to relocate to South Wales. A handful of staff have found posts outside the company, but the majority have taken early retirement.

James Johnston, Falkirk provost, whose ward includes the mill, said last night: "I know three generations of families who worked there. It'll be hard for people who have worked there for 40 years."

Joan Chesney, a spokeswoman for Alcan, expressed regret at the closure, but said: "The extremely competitive market left us with no alternative but to close the mill. We have employed a highly skilled workforce over the years and they deserve recognition."

Alcan's Fort William smelter, with about 350 staff, will continue to operate. The company also runs power generating plants at Fort William and Kinlochleven to serve the smelter.

THE Alcan mill in Falkirk closed yesterday, ending the company's 60-year association with the Stirlingshire town.

Production at the aluminium sheet rolling site, which opened in 1944 as part of the war effort, is to be relocated to the company's operation in Newport, South Wales.

Two dozen of the 86 staff will remain at the mill until April to help clear equipment. About 10 are expected to relocate to South Wales. A handful of staff have found posts outside the company, but the majority have taken early retirement.

James Johnston, Falkirk provost, whose ward includes the mill, said last night: "I know three generations of families who worked there. It'll be hard for people who have worked there for 40 years."

Joan Chesney, a spokeswoman for Alcan, expressed regret at the closure, but said: "The extremely competitive market left us with no alternative but to close the mill. We have employed a highly skilled workforce over the years and they deserve recognition."

Alcan's Fort William smelter, with about 350 staff, will continue to operate. The company also runs power generating plants at Fort William and Kinlochleven to serve the smelter.

Guyana sells majority interest in bauxite mining company to Russian firm

CBC News, Canada -12:53 AM EST Dec 17

GEORGETOWN, Guyana (AP) - The Guyanese government sold 90 per cent of shares in a bauxite mine to a state-owned Russian company on Thursday, a week after selling a majority interest in another bauxite mine to a Canadian company.

Rusal, the Russian company, agreed to spend $20 million US over several years to improve production at Aroaima Mining Co. in eastern Guyana, said Guyanese Prime Minister Samuel Hinds. The company will be known as the Bauxite Co. of Guyana Inc., and production should nearly double by 2006, officials said.

Management will be in Russian hands starting January 2005. Guyana will keep 10 per cent of the shares.

The company will explore new bauxite mining areas for Rusal's Nikolaeve alumina plant in the Ukraine and for other international customers.

Last week, Montreal-based Cambior Inc. (TSX:CBJ) bought 70 per cent of the state-owned Linden Mining Enterprise. Guyana will keep 30 per cent of the joint venture company, whose main mining operation is at Linden Town, 113 kilometres south of the capital, Georgetown.

Cambior will make an initial payment of $5 million US to Guyana's government. The company will transfer another S5 million US worth of equipment from its depleted Omai gold mine in western Guyana to the bauxite operation. By 2006, the company will invest another $30 million in the venture.

Bauxite, mineral used in the production of aluminum, was Guyana's leading foreign exchange earner in the 1970s. It now ranks No. 4 after sugar, gold and rice.

© The Canadian Press, 2004

CITIC eyes stake in Australian mining firm

People's Daily Online, China 16 Dec 2004

China International Trust and Investment Corp. (CITIC), China¡¯s largest financial conglomerate, was expected to visit an Australian mine project later this week, a sign of its interest in bidding for a stake in either the project or its owner, industry sources said Wednesday.

The Chinese company was the latest company to express an interest in WMC Resources Ltd., which owns the Olympic Dam mine project and faces a 7.4-billion-Australian-dollar (US$9.8 billion) takeover bid by Swiss-based Xstrata Plc.

WMC, which is fighting the "hostile" bid as it describes, has said it will host visitors with proposals that will "add value" to the copper and uranium project.

CITIC had been interested in owning overseas mining assets and might seriously look for a stake in either WMC or the project, analysts said.

The financial giant has already bought a 22.5 percent stake in an aluminum smelter in Portland, Oregon, the United States.

CITIC's industrial investments cover infrastructure facilities, raw materials, energy, transportation, telecommunications, automotives and real estate. Its Australian unit, CITIC Australia Trading Ltd., exports aluminum and steel products, fertilizer, as well as copper and iron ore to China.

Earlier reports said that another two Chinese miners, China Minmetals Corp. and Jinchuan Group, had also visited the WMC project.

WMC and Jinchuan already have a joint venture to explore for metals in West China, and WMC has pledged to supply Jinchuan with 120,000 tons of nickel-in-matte from 2005 to 2010.

Other parties interested in the mine project may include Inco Ltd., BHP Billiton Ltd., Rio Tinto Plc., Phelps Dodge Corp. and Companhia Vale do Rio Doce SA.

Xstrata¡¯s bid is expected to close Jan. 28. JP Morgan Chase & Co. and Gresham Partners are advising Xstrata, while UBS AG and Citigroup Inc. are advising WMC.

Source: Shenzhen Daily-Agencies

Alba approves BD22.2m for projects, facilities - Bahrain

MENAFN, Middle East Bahrain Tribune - 16/12/2004

Calcium output set to increase by 50,000 metric tonnes

ALBA is expected to set a new production record this year, the board of directors was told yesterday.

"Using the facilities, the executive management team has managed to further increase the annual metal production capacity and is set to produce a record 532,078 metric tonnes of high grade primary aluminium this year," Alba Chairman and Minister of Oil, said Shaikh Isa bin Ali Al Khalifa, said following the board meeting.

He said the state-of-the-art calcining plant was also set to report a 50,000 metric tonne increase in its annual production. "This is in addition to the company having chalked up remarkable achievements in improving safety systems, boosting employees' satisfaction and reducing operating costs."

Shaikh Isa chaired the meeting attended by board members representing Alba's three shareholders - the government (77 per cent), SABIC Industrial Investments (20 per cent) and Breton Investments (three per cent - as well as the executive management team.

Shaikh Isa extended appreciation to His Majesty the King, Hamad bin Isa Al Khalifa, the Custodian of the Two Holy Mosques, King Fahad ibn Abdulaziz Al Saud, the Prime Minister, Shaikh Khalifa bin Salman Al Khalifa and the Crown Prince, Shaikh Salman bin Hamad Al Khalifa, for constant support.

The board also congratulated on the Bahrainisation success as Alba has been honoured as a distinguished national company by the Minister of Labour and Social Affairs, Dr Majeed bin Mohsin Al Alawi.

"We are pleased to note that Alba has been honoured by the Ministry of Labour and Social Affairs in recognition of its commitment to Bahrainisation," he said. "The recognition underlines the success of Alba's Bahrainisation programme."

He said the safety awareness programme had also been successful. "As a result, the plant has clocked more than 3.6 million man hours of work with out a single lost time injury and it set to reach a record four million hours without a single lost time injury in the next few days."

He said the production achievements were in line with the three-pronged strategic plan to sweat the assets, improve the systems and invest capital. "In setting new production records at the smelter and the calcining plant, Alba has proved its ability to extract optimum performance from its assets and resources and maximise their potential," he said.

"We were also pleased to note that preparations for the 100 day safe start-up of Line 5 are continuing smoothly and that all departments are being aligned to help achieve the smelter's record target next year. We are confident that Alba will manage to start up the longest AP30 pot line in the world in a record breaking time to earn Bahrain international praise and recognition for its industrial excellence."

The board also approved plans to spend more than BD21,000,000 on 14 projects to meet the operational requirements of the plant. The projects include upgrade of some facilities, purchase of necessary spares and replacement of some machinery.

The board also approved plans to spend BD1.2 million to improve facilities at the Alba Sports Club. The plans include a permanent health club, an indoor women's swimming pool, a restaurant, a nursery, a children's play area and squash courts and bowling alleys.

The board comprises the government represented by Shaikh Isa, as well as Dr Mohammed J. K. Alghatam, Shaikh Ibrahim bin Khalifa Al Khalifa, Dr Fayez Hashim Al Sadah and Nader Khalil Al Moayyad.

SABIC is represented by Mohammed H. Al Mady, Mutlaq H. Al Morished and Mohammed bin Saleh Al Jaber while Breton Investments is represented by Gert Rohrseitz.

Russian Mining Firm Ponders Aluminum Plant

Forbes, NY 12.17.2004, 07:11 PM

After agreeing to buy 90 percent of shares in Guyana's state-owned bauxite company, a Russian mining corporation plans to spend US$10 million to study the feasibility of setting up an aluminum plant in the South American country, officials said Friday.

Officials from Rusal, which belongs to Russian aluminum baron Oleg Deripaska, have discussed setting up an aluminum plant that could process 1 million tons of bauxite per year, said Mike Brassington, the head of Guyana's government privatization agency. No decision will be made, however, until the feasibility study is completed in about three years, he added.

Brassington estimated it would cost about US$1 billion to build the aluminum plant. He said it would "provide thousands of jobs" in the South American country of 700,000 people.

"It would be great," he said.

The only aluminum plant in Guyana closed in the 1980s because the state-owned company that ran in didn't have enough funds to maintain it.

On Thursday, Rusal signed an agreement to buy 90 percent of shares of the state-run Aroaima Mining Company in eastern Guyana. The Russian company agreed to spend US$20 million over several years to improve the mine's production.

The company will be known as the Bauxite Company of Guyana Inc., and production should increase from 1.3 to 2.5 metric tons (1.4 to 2.8 tons) by 2006.

Aluminum smelter and Alumina plant at the Srednetimanskoe bauxite deposit

Kommersant, Russia 17 Dec 2004

full article at http://www.kommersant.com/tree.asp?rubric3&node29&doc_id494135

............................................

A project to build an aluminum smelter and alumina plant at the Srednetimanskoe bauxite deposit is gradually taking on the features of something quite independent of SUAL's business. Despite the fact that SUAL initially regarded development of the Timan bauxites as a means of providing raw materials for its aluminum plant, negotiations to attract outside partners to the project, i.e., Aluminium Pechiney, ALCOA, Russian Aluminum, and financial investors, show that SUAL is quite prepared to regard ZAO Komi Aluminum, the project's management company, as an independent business unit whose interests will not necessarily be subordinated to the interests of the principal owner.

Atlanta to Headquarter Novelis

The Associated Press WXIA-TV, GA 12/17/2004

ATLANTA (AP) -- Novelis, by several measures the world's largest aluminum rolling and can recycling company, will place its global headquarters in Atlanta, company officials and Gov. Sonny Perdue announced Friday.

The newly created company is a spinoff from Canadian-based Alcan Inc.

Based on 12-month revenues of more than $7 billion and about 13,500 employees, Novelis would rank 270th on the Fortune 500 list, the company said in a statement.

It will operate 37 facilities in 12 countries throughout the Americas, Europe and Asia.

Two facilities currently operating in Georgia will also be part of Novelis - a recycling center in Greensboro and a foil sales office in LaGrange.

The company produces food and beverage packaging, construction materials and aluminum foil.

The new global headquarters will be located in the Lenox Building in Buckhead, scheduled for completion by next March.

That will represent a $2.5 million investment and will employ more than 50 people with a payroll of about $15 million.

"I think it again continues to reinforce Atlanta and Georgia as a place of global attraction," Perdue said.

(Copyright 2004 by The Associated Press. All Rights Reserved.)

SUAL--Fleming Family & Partners

Kommersant, Russia 18 Dec 2004

In February 2003, OAO SUAL announced the formation of a transnational corporation that included SUAL’s aluminum assets, the coal company Access Industries (Eurasia), and two facilities of the English company Fleming Family & Partners in Cuba and Mozambique. Chris Norval, former vice-president of strategic planning of the South African company BHP Billiton, was appointed general manager of the SUAL International industrial group and president of SUAL Holding.

Despite of its lack of publicity, the deal between SUAL and the large English private fund was one of the signal events of 2003. SUAL is a company able to compete with Russian Aluminum (Russky alyuminii), which has a virtual monopoly on the aluminum market, and Viktor Vekselberg is one of biggest players of the "oligarchic" political scene, which increases the investors’ risks. Nevertheless, the Flemings approved the deal, which made similar investments in Russia an acceptable risk for other serious partners. After all, the matter concerns a resolutely nonpolitical deal that is also one of the year’s ten largest transactions, which in theory should form the basis for an increase in foreign investments in Russia and globalization of the Russian economy.

RusAl Begins Project in South America

St Petersburg Times, Russia, Russia Tuesday, December 21, 2004

THE ASSOCIATED PRESS

GEORGETOWN, Guyana - After agreeing to buy 90 percent of shares in Guyana's state-owned bauxite company, Russian Aluminum plans to spend $10 million to study the feasibility of setting up an aluminum plant in the South American country, officials said Friday.

Officials from RusAl, which belongs to metals magnate Oleg Deripaska, have discussed setting up an aluminum plant that could process 1 million tons of bauxite per year, said Mike Brassington, the head of Guyana's government privatization agency. No decision will be made, however, until the feasibility study is completed in about three years, he added.

Brassington estimated it would cost about $1 billion to build the aluminum plant.

On Thursday, RusAl signed an agreement to buy 90 percent of shares in the state-run Aroaima Mining Co. in eastern Guyana. The Russian company agreed to spend $20 million over several years to improve the mine's production.

The company will be known as the Bauxite Co. of Guyana Inc., and production should increase from 1.3 to 2.5 tons per year by 2006.

Canada, U.S. October Aluminum Shipments Fell 3.9%, Group Says

Dec. 20 (Bloomberg)

Aluminum shipments by producers in the U.S. and Canada fell 3.9 percent in October from a year earlier, the Aluminum Association said.

Shipments fell to 2.03 billion pounds from 2.11 billion, the Washington-based association said in a statement. Aluminum is used to make auto parts, aircraft, window frames, beverage cans and other products.

Shipments in the 10 months ended October climbed 6.5 percent to 20.8 billion pounds from a year earlier, the group said. North America is home to Pittsburgh-based Alcoa Inc. and Montreal-based Alcan Inc., the world's largest aluminum producers.

Aluminum prices are up 16 percent this year to $1,857 a metric ton on the London Metal Exchange.

Kaiser Aluminum to step up military plate shipments

Investor's Business Daily (subscription) 12/21/2004 1:17:51 PM

By Leslie Wines

SAN FRANCISCO (CBS.MW) -- Kaiser Aluminum said Tuesday that it's shipped more than 4 million pounds of aluminum plate to producers of vehicle armor for the U.S. military during 2004, with plans in place for increased shipments next year.

Houston-based Kaiser Aluminum (KLUCQ) said it expects to increase its 2005 shipments to producers of vehicle armor despite the fact that "broad industry demand for aluminum plate has been so strong that many non-military customers are receiving only limited-allocation shipments."

The company's announcement follows controversy this month over whether the U.S. military moved quickly enough to deliver protective sheeting for soldiers' vehicles in Iraq. The controversy was touched off by a National Guardsman's question to Defense Secretary Donald Rumsfeld during a question-and-answer forum in Kuwait.

Kaiser said the plate is shipped to manufacturing plants operated by Armor Holdings (AH) in Phoenix and Cincinnati, where the aluminum is used in combination with steel to provide armor for military vehicles, such as Humvees.

The combination of aluminum and steel serves as a buffer to slow down projectiles and make them less lethal.

In October, the U.S. Armed Services Committee called a meeting of plate manufacturers and customers, including Kaiser and Armor Holdings, with the aim of expediting shipments of armor materials to U.S. troops in Iraq, Kaiser said.

© 1997-2004 MarketWatch.com, Inc.

Military Armor Dispute has One Local Company Seeing Green

WTVD, NC - (12/21/04 - SANFORD)

By Don Ross

When Defense Secretary Donald Rumsfeld was questioned about the poor quality and lack of armor on military vehicles, it brought the people at Patriot Performance Materials to attention.

The two-year-old company is ready to ratchet up production of its body and vehicle armor at its plant in Sanford.

"There's major business coming and we're prepared to be in the forefront of that business," Patriot Vice President William Powell said.

The company has been providing some body armor and replacement doors and seats for Humvees to troops in Afghanistan and government contractors in Kuwait.

With technology developed here before the Iraq war, their doors and seats are made of an aluminum and ceramic composite that is bulletproof and lightweight compared to steel.

Their doors can replace the stock Humvee doors in just 30 seconds and provide the soldier far more protection and security.

"What happens is that people will literally walk up to the Humvee open the door and toss hand grenades inside. You can actually put a padlock on (our) door so the enemy can't affect entry and the soldier can simply open the door and get out of the vehicle even though he's padlock from the outside," Marketing Director Curtis Iovito said.

Much of the staff at Patriot are either engineers or former military personnel. Some of them served with special operations, so the research and development is based upon experience in the field.

"We keep an eye on what's happening on the battlefield because we have to design a better mousetrap so to speak," Iovito said.

The company has never been at full production capacity, but they are ready to double production - they're just waiting for the orders.

Online Producer: Chris J. Nicolini

RusAl Buy Approved

Moscow Times (subscription), Russia 21 Dec 2004

MOSCOW (Reuters) -- The Federal Anti-Monopoly Service has approved the acquisition by RusAl of the Boksitogorsk plant of intermediate product alumina, the service said Tuesday.

RusAl, which aims to become the world's top aluminum producer, is seeking to cut dependence on external supplies of alumina, roughly 2 tons of which are needed to produce 1 ton of aluminum.

Alcoa Inc. and the Jamaican government have signed an agreement in principle to more than double the output of the aluminum maker's refinery there.

Fort Worth Star Telegram (subscription), TX 22 Dec 2004

Under the agreement, the aluminum giant's affiliate Alcoa World Alumina would pay for about 85 percent of the $800 million expansion of the Jamalco refinery in Clarendon, Jamaica, which is partially owned by the Jamaican government.

The expansion will boost the alumina refinery's capacity by more than 1.5 million metric tons to 2.8 million metric tons and increase Alcoa World Alumina's ownership of the plant from 50 to 70 percent.

Bauxite - the principal ore used in aluminum - and aluminum production accounts for about a tenth of Jamaica's gross domestic product, and is the country's second largest earner of foreign income after tourism.

A final decision on the plant's expansion is expected during the first half of next year and the expansion could be finished in 2007.

Trentwood mill providing plate for military

Seattle Post Intelligencer, WA Wednesday, December 22, 2004

By NICHOLAS K. GERANIOS, ASSOCIATED PRESS WRITER

SPOKANE, Wash. -- A Kaiser Aluminum mill in the Spokane Valley has found a new market: metal plate used to reinforce military vehicles for U.S. troops in Iraq.

The Trentwood plant is producing half-inch thick aluminum plate that is sent directly to a maker of kits to protect Humvees and military trucks that are vulnerable to roadside bombs and grenades.

"We are running close to capacity at this point," Kaiser spokesman Scott Lamb said Wednesday.

Kaiser has shipped about 4 million pounds of the plate this year to companies that specialize in producing vehicle armor kits for the military, and hopes to increase production in 2005, Lamb said.

Kaiser still must provide aluminum plate to other customers, including the aerospace and general engineering industries, Lamb said.

The lack of armor for vehicles in Iraq has become a political issue in the past few weeks, after Defense Secretary Donald Rumsfeld was publicly questioned by a soldier about why American soldiers in Kuwait and Iraq scavenge in junk piles for steel plates to protect their vehicles.

Congress has given the Bush administration all the defense spending it has requested, yet there are still 3,500 Humvees without protective armor and about 44,000 soldiers in Iraq and Afghanistan without adequate body armor, according to U.S. Sen. Dick Durbin, D-Ill.

"We can, and we should, armor every Humvee and every truck our troops use in Iraq and Afghanistan," Durbin said in his party's weekly radio address last Saturday.

That would be good news for Kaiser, which has struggled in recent years because of a downturn in the aerospace industry that was a big customer for its aluminum plate.

Kaiser has produced the plate for years, but this is the first time it has shipped directly to a military supplier, Lamb said.

The catalyst was a meeting last October in which the federal government gathered plate manufacturers, users and military officials to discuss ways to speed the movement of armor material to troops in Iraq, Lamb said.

"We were eager to jump in and do what we could to juggle some of our production and delivery schedules to meet this critical need," Kaiser vice president Keith Harvey said.

Kaiser is shipping most of the armor plate to factories in Phoenix and Cincinnati owned by Armor Holdings Aerospace & Defense Group. The company combines the aluminum with steel to produce the blast kits for military vehicles.

"When combined with steel, the aluminum basically acts as an additional buffer to decelerate projectiles," said Robert Mecredy, president of Armor Holdings.

Aluminum is much lighter than steel, making it more practical for the vehicles, Lamb said.

Although Kaiser has sold many facilities during its Chapter 11 bankruptcy reorganization, the company held on to the Trentwood rolling mill and its 575 employees.

Providing metal to airplane manufacturers had been the main focus of the plant.


 

Vedanta's Alumina Plant Faces Opposition From Welfare Activists

Dec. 23 (Bloomberg)

Four non-government welfare organizations have filed a petition against Vedanta Resources Plc's building of a $1.9 billion alumina plant in India's Orissa state on grounds it is harming the environment.

A two-member committee set up by the government is scheduled to submit its report to the country's apex court by Jan. 10, Vinod Kumar, chief secretary of department of forests said in a telephone interview from the eastern state's capital Bhubaneshwar.

Any delay in building the plant will disrupt the company's expansion plans as it intends to use the alumina, a raw material for aluminium, at Bharat Aluminium Co. Vedanta acquired Bharat Aluminium in 2001 and is expanding its aluminum capacity to 345,000 tons from 100,000 tons.

The expansion plan will be unviable if the company does not have access to alumina as buying alumina from the market will raise costs and the company may also face supply constraints as demand for the metal exceeds supply,'' said Shridhar Iyer, analyst at Batlivala & Karani Securities in Mumbai said.

Demand for aluminum, used in cars, buildings and beverage cans, is rising in India with its economy expected to grow by 6.5 percent this year.

Vedanta began construction of the 1.4 million ton alumina plant in October and is awaiting environmental clearance from the central government to begin work at the bauxite mines allotted by the state.

Vedanta expects to get all the clearances in the next six months, Sandeep Gokhale, director of Business development said last month. Bauxite is the principal ore of aluminum.

Non-government organizations said the company felled trees for construction of the alumina plant.

``The company is flouting forest laws,'' Biswajit Mohanty, an official of the Orissa Wild Life Society, said in a telephone interview from Orissa. ``The alumina plant will pollute the environment once it starts production,''

Vedanta's Gokhale wasn't immediately available to respond to Mohanty's comments.

The alumina plant will be competing with rivals such as the world's second-largest aluminum producer, Alcan Inc. and Hindalco Industries Ltd., India's biggest non-ferrous metals producer, who are jointly setting up a $1.1 billion alumina refinery in Orissa.

The joint venture, first proposed 12 years ago, was delayed mainly due to opposition by tribal communities, who would be made homeless by the plant.

To contact the reporters on this story:

Debarati Roy in Mumbai droy5@bloomberg.net

To contact the editors responsible for this story:

Peter Langan at plangan@bloomberg.net

Ousting of Dutch chief by Corus in UK sparks tension

Financial Times, UK December 24 2004 02:00

By Andrew Taylor, Utilities Correspondent

Tensions between the Dutch arm of Corus and the steel group's London-based board flared into open conflict again yesterday over the dismissal of Peter Jongenburger as chairman of the Dutch management board.

The Dutch supervisory board, which sits above the Dutch management, expressed "concern" at the group's request that Mr Jongenburger, 45, should resign as chairman of the management board of Corus Nederland BV.

It said the decision had not been supported by the independent members of the supervisory board and it would "critically monitor the process with regard to the succession". The move was also criticised by the works council at Corus Nederland which said it would sour relations between the British and Dutch parts of the business.

Mr Jongenburger's removal is seen as an attempt by Philippe Varin, the French chief executive of Corus, to exert tighter control over the Dutch management, which last year blocked the parent board's attempt to sell its aluminium processing business to Pechiney for €863m (£604m). The failure led to Tony Pedder, then Corus chief executive, being replaced by Mr Varin.

The parent group believes that its relationship with the Netherlands business - which under Dutch law requires that works councils, management and supervisory boards be consulted over decisions - has blunted its ability to manage the business.

Corus said: "It is thought to be in the best interest of Corus Group and Corus Nederland to have a direct link between the UK and the Dutch legal bodies and between the representation of the management bodies. Consequently, Corus is making changes to the board of management of Corus Nederland."

Mr Varin has restructured the group, introducing new working practices and making a series of senior management changes. He said that Marjan Oudeman, recently appointed to run the group's largest steelworks at Ijmuiden in the Netherlands, would become acting chairman of the Dutch management board.

Mr Jongenburger will remain chief technology officer and managing director with group-wide responsibilities for research and development, said Corus.

Corus was formed in 1999 from the merger of British Steel and Hoogovens of the Netherlands. Since then, the group has chalked up cumulative operating losses of more than £2bn and cut more than 10,000 jobs in the UK.

The group has forecast that operating profits before restructuring costs would be about £600m in the current financial year.

AmerenUE seeks approval of Noranda deal

The St. Louis Post-Dispatch, MO - Dec 24, 2004

By Jack Naudi

In a request unusual for its political overtones, AmerenUE this week asked the Missouri Public Service Commission for permission to sell power to the largest user of electricity in the state.

AmerenUE, based in St. Louis, has proposed selling about $2 billion worth of electricity over 15 years to Noranda Aluminum Inc., a smelter in New Madrid County.

Two state representatives, the mayor of New Madrid and state economic development officials have given written testimony supporting the proposal, and others are expected to follow.

Their concern is that if a deal to buy power from AmerenUE is thwarted, Noranda could shut down. That would be a huge blow to southeast Missouri, where Noranda, with 1,100 employees and a payroll of $57 million, is the largest employer.

With electricity accounting for a third of Noranda's expenses, the plant's fate lies largely on its ability to get reliable, cheap power. But the company's existing power contract expires May 31, and it has few options other than AmerenUE for long-term power.

In testimony to the commission, State Rep. Lanie Black, R-Charleston, said Noranda pays 25 percent of all taxes collected in New Madrid County.

"I couldn't even begin to imagine the effect that either not having Noranda or losing Noranda would have on the economy for several communities in our area," Black testified.

And even AmerenUE broke from the typically complicated, dry testimony about power capacity and transmission ability.

"Continuation of Noranda's long-term operations is critical to the region and indeed to the state of Missouri as a matter of public policy and interest," AmerenUE wrote in its application to the PSC.

But the full-court press has implications that extend well beyond the AmerenUE-Noranda power issue. AmerenUE said it will sell power to Noranda only if the PSC gives it favorable treatment on two other matters.

One of those calls for transferring AmerenUE's customers and assets in the Metro East area to a sister subsidiary, AmerenCIPS.

The transfer in the Metro East area has generated a storm of criticism from the PSC's staff and the Missouri Office of Public Counsel, an agency representing utility customers. Both are concerned that Missouri customers, who are part-owners of the Metro East assets, could be hit by higher rates if the transfer is approved.

Though testimony opposing the Noranda deal is yet to be filed, some groups are expected to raise concerns over linking the Noranda plan with the proposed Metro East transfer and other issues.

"There is confusion about exactly what the scope of this particular case is about," said John Coffman, director of the Office of Public Counsel. "Is it about whether this very large, important aluminum plant can be accommodated, or is it about another case in which tens of millions of dollars of rate-payer money is involved?"

Noranda didn't anticipate being in the middle of AmerenUE's other regulatory issues.

"We regret the timing of this critical matter has commingled the rather straightforward issues in this matter with another matter," Noranda wrote in a document to the PSC.

"We were advised that such matter was expected to be concluded several months before it was even anticipated that this application would need to be submitted."

AmerenUE and Noranda have asked for expedited treatment. They said they need PSC approval by March 21.

Reporter Jack Naudi

E-mail: jnaudi@post-dispatch.com

Phone: 314-340-8223

Wenatchee re-energized by smelter's reopening

The Spokesman-Review December 26, 2004

Aluminum smelter emerges from tough times, Bert Caldwell says.

Christmas in Wenatchee came wrapped in shiny aluminum foil this year.

On Dec. 13, 9:15 a.m. to be exact, the first of hundreds of "pots" where alumina is brewed into aluminum was fired up inside the Alcoa smelter. Day-by-day since then, crews have gradually added to the count, with the expectation that 300 pots arrayed in two of the Wenatchee plant's four potlines will be operational by mid-February.

The other two lines will remain dark. In fact, the plant once had five lines, but the fifth was scrapped during the 3 1/2-year period when the Wenatchee works sat idle.

With the restart, the number of operating smelters in the region grew to three. None are at full capacity. The seven others that once helped make the Northwest the source of 40 percent of the nation's primary aluminum are either mothballed, scrapped, or on the verge of being scrapped. Kaiser Aluminum Corp.'s Tacoma and Mead plants are history. Half the potlines at the Kaiser plant on Hawthorne Road have been demolished.

The cause of the industry's demise is old news now. The plants consume huge amounts of electricity. That was fine when the Bonneville Power Administration had inexpensive megawatts to spare, but as residential and commercial demand increased, the share taken by the smelters was increasingly coveted by other consumers. Squabbling among the contending power users escalated through the 1990s. When a supply crisis struck in 2000, all 10 plants shut down, displacing thousands of highly paid workers in the process.

Only plants at Wenatchee, Columbia Falls, Mont., and Ferndale in Western Washington, have resumed production. A 15 percent to 20 percent increase in aluminum prices this year has helped.

But even with that, it took a good deal from the Chelan County Public Utility District and concessions from plant workers to fire up Wenatchee again.

The PUD has been selling the power once consumed by the smelter into the wholesale market. Some of the proceeds paid the wages of 400 idled smelter workers. Chief Financial Officer Joe Jarvis says the arrangement was good for the utility because market prices were so much higher than the costs of generation at its Rocky Reach dam.

The smelter will get that power at cost, a remarkably cheap 1.2 cents per kilowatt-hour, about one-quarter what that power is worth wholesale. "It actually generated more money for us when they were not operating," Jarvis says.

The smelter contract runs into 2011. Although the deal robs the PUD of some revenues, Jarvis notes the positive effect the restart is already having in the community. Wearing his hat as president of the Chamber of Commerce, he says retailers have already noticed an upturn in sales because plant workers will again draw the overtime and shift pay that used to fatten paychecks. They also have the certainty they will have a job for the next six years.

At the Alcoa plant, spokesman Jim Baxter says the company might not have hung on in Wenatchee as long as it did if officials had known how long the shutdown would last. The constant expectation after the closure in July 2001 was that production would restart within three months. In the meantime, revenues from the sale of power fell about $1 million a month short of covering payroll, he says.

"If we had seen 3 1/2 years ago it was going to be 3 1/2 years, there might have been a different decision made," Baxter says.

Bonneville, for its part, continues to look for ways it might make at least some power available to its remaining industrial customers when existing contracts expire Sept. 30, 2006.

Spokesman Ed Mosey says 500 megawatts or an equivalent amount of cash may be on the table, but the price may not be low enough to make smelter operations viable. Even at three cents per kilowatt-hour, about the going price today, electricity is too expensive to keep the region's smelters competitive with newer plants in remote locations like Iceland and Bahrain.

"I think the aluminum industry in the Northwest is in its death throes," says Mosey, a long-time member of the region's extensive energy community.

Sad, but true. The aluminum industry hung on for many years because member companies hung together. Almost nobody is left.

Lucky for the Wenatchee community and its aluminum workers Alcoa, the world's largest maker of aluminum, had the financial resources to stick the shutdown out when weaker players like Kaiser folded their aluminum shelters.

The restart, Baxter says, "truly has made their Christmas a little bit brighter."

It's all in the wrapping.


 

Beijing Slaps Export Tax on Aluminum,Nickel

www.aluminum.org 12/27/04

The State Council is imposing an export tax on aluminum, copper and nickel and other energy-intensive and resources products, the Xinhua News Agency reported over the weekend (Dow Jones Newswires 12/21/04). The new policy will take effect from January 1. Xinhua did not give further details about the export tax.

Meanwhile, an official at the State Administration of Taxation confirmed that the government will abolish an 8 per cent tax rebate for aluminum exports starting January 1, 2005. Tax rebates for the export of three other products, namely yellow phosphorous, ferroalloy and calcium carbide, will be cancelled simultaneously, according to the official.

Another official, from the Taxation Policy Department of the Ministry of Finance, confirmed the Xinhua report on the new export taxes but declined to disclose more details. He said he expects the size of the export taxes to be announced December 31. Talk that the government would impose restrictions on aluminum exports, to crack down on the overdeveloped industry, had been circulating among metals dealers over the past few weeks.

Analysts said the new export tax policy is likely to have a major impact on aluminium as China is a net exporter of the commodity and a major supplier in the world market.

"Aluminium exports will definitely fall on the new policy, thus (it will be) a hurdle to the development of aluminium capacity,'' said Wang Zheng, an analyst at Shanghai Dalu Futures.

Aluminum futures traded on the Shanghai Futures Exchange didn't immediately react to the news as the exact amount of the export tax remains unclear.

Market participants pointed out that as investors had been speculating about possible measures on aluminum exports, any negative impact on local prices would already have been factored in.

RUSAL to construct an aluminium works in Kirgizia, jointly with RAO UES - to take part in construction of two power plants.

Gateway 2 Russia, Russia 27 December 2004 16:21

OAO Russian Aluminium (RUSAL) intends to construct an aluminium works in Kirgizia, sources with the company told AK&M.

Besides, jointly with RAO UES RUSAL will take part in construction of two Kambaratinsky GES power plants which energy the works will consume.

Overall investments to be made in all three projects are estimated at $2 bln. Earlier it was announced, $1-1.5 bln will be invested to construct the power plants.

Bodies recovered from rubble

Muskogee Daily Phoenix, OK December 29, 2004 1:03 PM.

By Donna Hales Phoenix Staff Writer

Authorities recovered the bodies early Wednesday of two Yaffe Iron & Metal Co. employees killed Tuesday when a furnace exploded, destroying the furnace and two huge metal warehouses.

The two employees were burned beyond recognition, so the state medical examiner requested authorities release their names pending positive identification, although their families have been notified, said Muskogee County First Deputy Darren Smith.

Officials said 14 residents were injured in the blast that rocked the area about 8 p.m. The explosion shook neighboring homes, causing extensive damage to some and shattering windows in homes and businesses. Police evacuated an eight-block area around the scene.

Four employees were on duty when the explosion occurred at the plant at G and Lexington streets. A night watchman on duty was not injured.

The third furnace worker was released by ambulance personnel after being treated for scratches.

Federal agents have determined it was an industrial accident, said Jeff Cochran, resident agent in charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ Tulsa office.

"It doesn’t appear to be anything criminal, I can tell you that much," Cochran said before declaring it an industrial accident.

"We’ll have the doors back open Monday morning," said Andrew Yaffe, president of the plant and son of chairman of the board Robert "Bob" Yaffe.

Yaffe, flanked by longtime employees, had tears in his eyes when he told the Phoenix: "We’ll have the scales open for business Monday. If we have to weigh everything by hand, we’ll do it.

"They’re ready to work and don’t care what they need to do. I’ve got some fantastic people — we’re one big family out here. I’ve got 78 good people — not a bad one in the bunch.

"One of the first guys down here this morning has been here for 34 years."

Glass companies in town were swamped early Wednesday, working to repair hundreds of windows blown out at homes and businesses throughout the area.

Yaffe’s father, Robert N. "Bob" Yaffe, 70, said the furnace employee accounted for told his son, Andrew Yaffe, that he was in the "back end loading for the next charge and the explosion knocked him down."

The employee was loading aluminum that would be taken on a cart to the furnace door and then a fork lift would be used to put the aluminum into the furnace. The furnace, fueled by oil, was used only to melt aluminum.

Plant explosion leaves man injured

Dickson Herald, TN - Dec 28, 2004

By Patricia Lynch Kimbro Staff Writer

A longtime employee at Wabash Alloys, an aluminum recycling plant in Dickson, was flown by LifeFlight to Vanderbilt University Medical Center yesterday morning following an explosion in the furnace area.

The man, whose name plant officials were not releasing yesterday, appeared to be the only person injured, according to Don Van Vleet, a senior project engineer with the company.

"Roughly, this was an incident with an aluminum furnace. One employee was injured. Right now that’s all we can release. Our only concern is for his medical treatment and concern for his family," Van Vleet said.

Wabash Alloys, which has been in Dickson since 1987, employs about 100 people.

Several family members of employees gathered outside the Printwood Drive industry after friends alerted them that they had heard on police scanners that something had happened at the plant.

Cynthia Guice and her son were waiting outside the gate to hear word of her husband, Kevin, who has worked at the plant for 11 years.

"It’s really hard…waiting for word. I came over because my twin sister heard on the scanner there was an explosion here," Cynthia Guice said.

"This isn’t the first time there’s been an explosion here. They had one about four years ago," she added.

She said her husband was a utility operator and worked in the furnace area where the incident reportedly occurred.

The Guice family had about a 45-minute wait before they received word that their loved one was not injured.

"It’s been very scary. I haven’t known what to think. I’m so thankful he (husband) wasn’t hurt, but I am concerned for the man that was injured and of course for his family," she said.

The Life Flight helicopter took off at 11:45 a.m.; about 10 minutes later three local ambulances left the scene without their emergency equipment running.

Steve Manley, director of Dickson County Emergency Management Agency and the Dickson County Ambulance Service, said it was his understanding that only one person was injured during the incident.

Dickson County Mayor Linda Frazier said, "I hate to hear of anyone being hurt. Our thoughts will be with the injured and his family."

Alcoa Sees 4Q Gain From Bauxite Transfer

Forbes 12.30.2004, 03:32 PM

Aluminum producer Alcoa said Thursday it will transfer its rights to a bauxite deposit in Brazil to its majority owned joint venture, Alcoa World Alumina and Chemicals, and will realize a significant gain in the fourth quarter.

Under the deal, 40-percent partner Alumina Ltd. will pay $40 million to the venture and Alcoa will record a gain of $37 million, or 4 cents per share.

Alcoa said it is considering developing the deposit to supply bauxite - the principal ore used to make aluminum - for a planned expansion of its Alumar refinery, and for other operations of the joint venture or third parties.

Alcoa and Alumina Ltd. said they will conduct all new investments in bauxite and alumina refining in Brazil through the Alcoa World Alumina and Chemicals partnership.

Shares of Alcoa slipped 42 cents, or 1.3 percent, to $31.47 in afternoon trading on the New York Stock Exchange. American depositary shares of Australia's Alumina Ltd. rose 14 cents, or nearly 1 percent, to $18.45.

Alcoa Gets Russia OK for Plant Purchases

Forbes 12.31.2004, 10:21 AM

Alcoa Inc., one of the world's largest aluminum producers, said Friday that it received final approval from the Russian government to buy controlling interests in two factories from the country's main aluminum maker, Rusal.

Alcoa did not disclose financial terms of the deal, which includes the Samara Metallurgical Plant in the Volga River region and the Belaya Kalitva Metallurgical Plant in the Rostov-on-Don region. The Pittsburgh-based company said it expects the purchase to close at the end of January.

Alcoa said the government approved the deal after the company agreed to maintain the capability to supply certain Russian domestic needs through continued production at the two plants. Alcoa said the factories will serve both the Russian market and customers in Europe, Asia and the Americas.

Moscow-based Rusal said the sale will help the company keep its focus on upstream and alloy production, along with expanding access to raw materials.

Alcoa has operations in 43 countries and employs about 120,000 people. Shares were up 15 cents at $31.60 in morning trading on the New York Stock Exchange.