AluNews - December 2004

China's CGulf News, United Arab Emirates 04-01-2004

Manama |By Mohammed Almezel, Bureau Chief

Bahrain's government has come under pressure to lift the doubts over the proposed sale of the kingdom's stake in aluminium smelter Alba to US giant Alcoa.

Alcoa and Bahrain's Ministry of Finance signed an agreement last September which paved the way for Alcoa to acquire as much as 26 per cent of Alba - 77 per cent owned by the government. But there is a "time pressure", former Alba chief executive Bruce Hall said yesterday.

The final agreement, including an alumina supply arrangement which could be concluded by mid-2004, is worth around $600 million. Officials from Alcoa, the world's leading producer of primary aluminum, are expected to visit Bahrain later this month.

The objective is to "reduce the Bahrain exposure in terms of the shareholding and, if possible, to couple that with the acquisition of a source of raw material.

$1.7bn Alba expansion a boon for companies

Gulf Daily News, Bahrain 03 Jan 2004 By TARIQ KHONJI

MANAMA: Alba's $1.7 billion Line 5 expansion will have a knock-on effect on other companies in the local aluminium sector, allowing them to expand their output, says chief executive Bruce Hall.

Even though Alba sells more than half its over 500,000 tonnes per year output to local downstream companies, they have long complained that they don't get enough to meet their needs and as a result have been forced to delay expansion ambitions, he said.

Once the fifth potline is fully operational by June next year and following a stabilisation period of a few months, Mr Hall promises to meet their immediate needs and also have enough capacity left over to increase Alba's exports.

"We have well-established relationships with companies abroad and we don't want to disappoint them," he said.

"As a result, we have been unable to meet the growing needs of local companies. The Line 5 project will allow us to produce over 300,000 tonnes more every year for both the local and export markets."

In addition to 450 new full-time jobs at Alba, more jobs should be created at downstream companies as they expand.

"Importing aluminium would have been too expensive for them so they couldn't expand their operations until they could be sure that we would supply them with more metal," Mr Hall continued.

Downstream expansions are not expected to result in more refined aluminium products than those already produced, but would allow the companies to produce more of the same goods.

"Because the Gulf's population is so low, there is little demand for finished aluminium products in the region," said Mr Hall.

"Shipping costs for exporting more sophisticated products are much higher."

A significant portion of Alba's investment will be pumped into the local construction industry, which in turn provides a boost to the economy.

The Training for Bahrain programme, a joint project among Alba, the Labour and Social Affairs Ministry, Bechtel and local contractors, is also helping to supply the local labour market with skilled Bahrainis.

Twenty-two people have completed the programme and over 100 others are currently enrolled. The ministry and Alba each pay 50 per cent of the trainees' monthly BD125 allowance while they complete their three to six months training.

The trainees then generally find employment with the sub-contractors working on the project, for at least BD170 a month. Some of the graduates have already gone on to start their own businesses, said Mr Hall.

"The programme gives them skills, such as bricklaying, scaffolding and reinforced construction which they can use to find other work."

The expansion is also expected to have a minimal effect on the environment due to the use of environmentally-friendly technology.

"Obviously our emissions will increase but they will be controlled through the latest technologies for emission management," said Mr Hall.

While undergoing the Line 5 expansion, allowances were made for a possible Line 6 project down the road.

If it gets shareholders and government approval, Line 6 would increase Alba's output even further and will make it the largest aluminium smelter in the world.

Mr Hall has no doubt that Alba will be able to find buyers for the extra aluminium because of its competitive advantage.

However, it is unclear whether the government would agree to the extra gas required from the Khuff gas field.

"That depends on the government's strategic objectives and is beyond our scope of influence," Mr Hall added.

Ghana-Owned VALCO and The Integrated Aluminium Industry

GhanaWeb, Ghana 4-Jan-2004

As a former Electrical Engineer and a Metallurgist with the Volta Aluminium Company (VALCO) and with a stint spanning over a period of ten years in both disciplines, I am profoundly encouraged to learn that the present Ghana Government is in the process of buying Kaiser’s share of 90 percent of the entity (28 December 2003 issue of Ghana Home Page).

On reflection, quite a number of Ghanaians may know that the intention of the government of the First Republic, in the early 1960s, was to have in place an integrated aluminium industry in Ghana, after the construction and installation of VRA followed by the VALCO smelter.

With the Awaso bauxite being mined, processed and shipped to UK for the British Aluminium Company smelter (BACO), the Ghana integrated aluminium industry was to comprise of the mining of the bauxite deposits at Hyinahin in the Ashanti Region and Kibi, in the Eastern Region; constructing and installing a washing plant and drying furnaces and transferring the dried material to refineries, where a chemical process is used to separate the alumina from the ore. The washing process (to remove clay and sand) followed by the drying process and the refining is commonly referred to as the Alumina Plant. Finally, the alumina (in a white powdery form) was going to be transported from the alumina plants to feed VALCO for smelting into aluminium semi-finished products (ingots, billets, sows) of various sizes and alloys depending on the end-use requirements.

Around the late 1970s or early 1980s,in my capacity as Senior Metallurgist, my Supervisor, the Chief Metallurgist and I were delegated by VALCO senior management to meet with representatives of the then Aluminium Commission (later to become Minerals Commission, I presume) to work out the modalities of supplying ingots to designated aluminium fabrication plants in Accra and Tema industrial areas. We came up with a workable arrangement and I was more than pleased and overwhelmed to see the level of job and wealth creation at the tail end of an integrated aluminium industry in Ghana. With population growth in Ghana and the neighbouring countries and afar the implementation of the industry should be encouraged.

In 1970-71, I worked for the Kaiser Engineers International Incorporated, on the VALCO fourth potline extension project, as electrical construction engineer with my counterparts from the Fuji Electric Company, Japan. The Kaiser Project Manager, who happened to be my boss (name withheld for confidentiality) was a geologist by profession and was simultaneously commissioned by either the then Ghana government or Kaiser Aluminium Company (I can’t remember which of them tasked him with that assignment) to analyse samples of the Kibi bauxite ore body. Under strict commercial-in-confidence basis he did show me the analysis (qualitative and quantitative) and I vouch to say that they were (and still are) of ‘world standard’. The percentages of both alumina and water of the sampled ore bodies from various locations at Kibi and the traces of impurities – mainly, iron oxide, silica and titanium oxide were within the prescribed ranges. The above goes to show the amount of job creation and wealth generation in both the Ashanti and Eastern Regions should the strategic planning and the processes envisaged are carried through to obtain the desired outcomes.

It was therefore disheartening to learn in the late 1970s and early 1980s that a team of appointed so-called ‘technical advisers’ advised the then government of the day that an aluminium integrated industry in Ghana was ‘not economically feasible’ or ‘not economically viable’ (to borrow their so often used phraseology) to bamboozle the politicians who may not have had the slightest idea about the industry and its ramifications. On what scientific basis did ‘advisers’ arrive at their evaluation results? Of course they were travelling all over the place to Kingston, and US Jamaica (from where VALCO used to import alumina) conferring with Kaiser senior management on the issue. Kaiser owned the alumina plant in Kingston. And without doubt these so-called ‘technical advisers’ would come back from their overseas trips and tell the then Ghana government what she wanted to hear - nothing but inaccuracies and half-truths.

ENOUGH IS ENOUGH. Let’s be honest and show some degree of integrity, self-governance, professional ethics to serve mother Ghana to the benefit of ALL and not just a handful of ‘economic cheats’ and ‘parasites’ who have taken us for ride for far too long. Their competencies border on the ability to swindle the nation out of a deal by sheer shrewdness and it is about time they are stopped in their tracks under the cover of or behind the shields of so-called ‘consultancies’

As we are aware smelting of alumina into aluminium consumes a huge amount of energy, hence attempts are made, world wide, to undertake the process via hydroelectric power (as opposed to thermal). It is therefore unfortunate that lack of rainfall has rendered VRA incapable of supplying the required amount of power at VALCO (resulting in the Plant temporarily shut down). However, with the impending gas line to Ghana, via Nigeria, Togo, Benin et al and with the build of water in the catchment area at Akosombo, in the not too distant future things should turn out for the better in due course. This should not deter the Government with her discussions with Kaiser.

VALCO, is a ‘world-class’ entity with ‘good corporate governance practices’ - engineering, management, occupational health and safety, medical facility, training, infrastructure, logistics, work ethics, quality assurance, discipline, security and performance measures. It is to be hoped that we maintain the ‘standards’ set when the Plant transfers into the hands of purely the indigenes.

Last but not least I would encourage the Ghana government to pursue its negotiations with Kaiser with a well-structured knowledgeable team of experts to conduct due diligence covering financial position, technical capabilities, market survey and relate business and management issues. And at the appropriate Ghana may have to join the International Bauxite Association (IBA) to increase its income from the ore. IBA determines the price of the ore and also promote the construction of bauxite refineries in the respective countries.

Charles Agyeman Manu, MEng (Electrical), MAppsSc (Metallurgy), MBA (Technology Management);

Assistant Director Professional Development, Australian Public Service;

Member of National Institute of Governance, Australia.

Alcoa abandons plan for smelter in Brazil

International Herald Tribune, France 5 Jan 2004

Alcoa, the world's biggest aluminum maker, dropped plans on Monday to spend $1.3 billion building a smelter and power plants in Brazil because the country's new electricity authority may hinder investment returns.

Construction of the smelter and hydroelectric plants hinged on government regulations, which are unclear, said Kevin Lowery, a company spokesman.

President Luiz Inacio Lula da Silva of Brazil last month created an agency to oversee the electricity market.

Alcoa is considering expanding in other countries, Lowery said. The Pittsburgh-based company has been moving production from the United States to Canada, China and Iceland, where electricity is cheaper, to cut production costs. Electricity is about 40 percent of the cost of making aluminum. (Bloomberg)

Chinalco itching to invest abroad

www.chinaview.cn 2004-01-07 09:54:52

BEIJING, Jan. 7 (Xinhuanet) -- Aluminum Corporation of China (Chinalco), the nation's biggest aluminium and alumina producer, will build a large alumina mining project with Viet Nam in the alumina-rich Southeast Asian country.

Sources from the State-owned Chinalco said total investment in the planned alumina project will be more than US$1 billion.

Chinalco will foot most of the bill and will be responsible for technology development and production.

China Nonferrous Metal Mining and Construction Group and a Chinese railway construction firm will also participate in building the mining project, sources said.

The National Development and Reform Commission, China's main industry watchdog, has signed an agreement with the Vietnamese Government.

"We will complete the feasibility study for the project within nine months," a source with Chinalco said.But no details have been unveiled.

Sources said Chinalco is also seeking to build alumina bases in Guinea and Australia.

There are more than 10 planned alumina exploration projects in foreign countries, including Australia, Guinea, Viet Nam, India, Brazil and Jamaica, according to the China Nonferrous Metal Industry Association.

"We have to accelerate overseas exploration because the existing alumina reserves in China will not be able to meet domestic demand within the next two decades," said Pan Jiazhu, vice-president of the association.

China has a total alumina reserve of 506 million tons, compared with 16 billion tons in Guinea, 12 billion tons in Australia, 9 billion tons in Brazil, 8 billion tons in Viet Nam and 420 million tons in Jamaica.

China's alumina imports are increasing as a result of a short supply on the domestic market.

The nation imported some 5.5 million tons of alumina last year, up from 4.57 million tons in 2002.

Chinalco said its alumina output reached 6 million tons this year, up 10.91 per cent from a year earlier.

The company produced 960,000 tons of aluminium last year, an increase of 8.21 per cent from 2002.

The company said it will continue to put the priority on alumina, which is raw material for aluminium, next year to stabilize the domestic market.

The average price of Chinalco's alumina stood at 3,700 yuan (US$447) per ton last year, down from 4,300 yuan (US$519) of the imported.

Boosted by China's steady economic growth, domestic aluminium demand will increase to 8.8 million tons by 2010 and to 14.3 million tons by 2020 from a little over 5 million tons last year, according to the metal association.

Chinalco's overseas-listed branch, Chalco, operates an alumina joint venture in South China's Guangxi Zhuang Autonomous Region with Alcoa, the world's biggest alumina maker based in the United States.

Chalco went public in Hong Kong and New York at the end of 2001.

Chinalco said it aims to quadruple its total assets, annual sales and profits to 145 billion yuan (US$17.5 billion), 80 billion yuan (US$9.7 billion) and 7 billion yuan (US$845.4 million) respectively by 2015 from the levels in 2000.

Alcoa Acquires 44 Million Additional Shares In Chalco

Business Wire (press release) January 06, 2004

PITTSBURGH--(BUSINESS WIRE)--Jan. 6, 2004--Alcoa (NYSE:AA) today announced it has participated in the Aluminum Corporation of China's (Chalco's) new share placement.

Alcoa will acquire approximately 44 million additional shares in Chalco as part of the offering. This purchase will maintain Alcoa's approximately 8 percent ownership in Chalco and cost approximately $32 million.

Chalco is the sole alumina producer and the largest producer of primary aluminum in China, and was ranked 2nd in terms of alumina production volume in 2001 in the world. Its mining, refining and smelting operations are the largest in the Chinese aluminum industry. Alcoa has held its 8 percent stake in Chalco since 2001.

Alcoa is the world's leading producer of primary aluminum, fabricated aluminum and alumina, and is active in all major aspects of the industry. Alcoa serves the aerospace, automotive, packaging, building and construction, commercial transportation and industrial markets, bringing design, engineering, production and other capabilities of Alcoa's businesses as a single solution to customers. In addition to aluminum products and components, Alcoa also markets consumer brands including Reynolds Wrap(R) aluminum foil, Alcoa(R) wheels, and Baco(R) household wraps. Among its other businesses are vinyl siding, closures, fastening systems, precision castings, and electrical distribution systems for cars and trucks. The company has 127,000 employees in 41 countries. For more information go to www.alcoa.com

Alcan buys 65% of Aluminium Dunkerque smelter

Toronto Star, Canada, 6 Dec 2004

MONTREAL (CP) — Alcan Inc. has acquired the remaining 65 per cent of the Aluminium Dunkerque smelter in France for about $398 million and will assume about $179 million in debt as part of the deal, Alcan said Tuesday.

The Montreal-based company previously acquired 35 per cent of the smelter, in Dunkerque, France, when it bought Pechiney SA last year for $6.3 billion. Aluminium Dunkerque's annual production capacity is 250,000 tonnes.

Alcan said Tuesday it acquired the remaining shares and subordinated loans owned by Aluminium Dunkerque's financial partners for 248 million euros. The transaction also resulted in the consolidation by Alcan of an additional 112 million euros in debt, on Dec. 30.

"This acquisition adds an excellent primary aluminium asset to Alcan's global capacity," CEO Travis Engen said in a release.

Alcan is a global leader in aluminum and packaging, as well as aluminum recycling. It employs 88,000 people around the world and has operations in 63 countries.

On the Toronto stock market Tuesday, Alcan shares (TSX: AL) fell $1.06 to $62.08.

SNC-Lavalin to design, build $137M power plant in Ireland

Toronto Star, Canada 6 Dec 2004

MONTREAL (CP) — SNC-Lavalin Group Inc. has signed a deal to design and construct a natural-gas power plant in Ireland to boost the country's electricity grid and power an alumina facility.

The Montreal-based engineering and construction company said Tuesday its Irish subsidiary reached the deal with Aughinish Alumina Ltd. for the plant, which will be built near the city of Limerick. Aughinish is a subsidiary of Glencore International AG of Switzerland.

The contract, worth $137 million Cdn, involves a 150-megawatt heat and power plant that uses two General Electric gas turbine generators and two heat-recovery steam generators, which will provide steam for Aughinish's alumina production plant. Alumina is a compound used in the production of aluminum.

The new gas-powered plant will allow Aughinish to reduce operations of older oil-fired boilers and thus reduce emissions, SNC-Lavalin said in a release.

"This project will provide much needed power into Ireland's electricity grid, as well as power and process steam to the Aughinish Alumina facility," said executive vice-president Klaus Triendl.

Work on the new power plant is expected to start in April. It is expected to go into commercial operation in December 2005.

Shares in SNC-Lavalin (TSX: SNC) gained 10 cents to $49.65 in Tuesday trading on the Toronto stock market.

China aluminum maker selling stake to Alcoa

Cathy Chan and Rob Delaney Bloomberg News January 06, 2004

Aluminum Corp. of China, the mainland’s biggest maker of the metal, said Tuesday that it would sell 3.1 billion Hong Kong dollars, or $401 million, of new shares to Alcoa and institutional investors to buy rivals and expand production amid record demand. The company, known as Chalco, is selling 550 million shares for 5.658 dollars each, said Richard Taylor, head of investment banking at CLSA, the arranger of the sale. Alcoa, the world’s biggest aluminum maker, will buy 8 percent of the shares, keeping its 8 percent stake in the Beijing-based company. China’s aluminum output may rise by a fourth this year as economic growth of more than 8 percent fuels demand for power lines, car parts and soda cans. Shares of Chalco rose more than fivefold last year, making the company the best performer on the 32-stock Hang Seng China Enterprises index. ‘‘People are very bullish on Chalco,’’ said Geoffrey Cheng, an analyst at Daiwa Institute of Research. ‘‘Given the tight supply of alumina, we expect the spot price to trend higher.’’ The sale price is an 8 percent discount to the stock’s close of 6.15 dollars. The sale would represent a 16.4 percent stake in the company. Chalco originally sold 450 million shares and will sell an additional 100 million shares because the offer is ‘‘heavily oversubscribed,’’ Taylor said, without giving details. Shares of Chalco were suspended fol lowing the announcement. The sale was to close late Tuesday, Taylor said. The new shares will begin trading on Jan. 15, according to a share sale document issued by CLSA, a copy of which was given to Bloomberg News. ‘‘Going to the market is a good plan because their gearing ratio is a bit high at above 40 percent and the share price is so high,’’ said Patrick Pong, an analyst at South China Research. ‘‘The discount isn’t large, which should boost market confidence.’’ One third of the proceeds from the Chalco sale will be used this year to buy smelters that process alumina into the finished metal, according to the share sale document. A third will be used to accelerate the refining of alumina from bauxite at the company’s project in Shanxi, northeast China, it said. The remainder would be put toward working capital, the CLSA document said. Chalco is China’s only producer of alumina, which provides about half of its revenue. Alumina shortages in China, which relies on imports for about half of the 12 million tons of the material consumed in the country each year, may have cut domestic aluminum production by 700,000 tons in 2003, the China Nonferrous Metals Industry Association said in a September report. Lanzhou Aluminum, China’s second-largest producer of the metal, plans to sell new shares on the Shanghai Stock Exchange at about a third less than their market level. The shortages of alumina are prompting competitors to try to enter Chalco’s market or boost production overseas to supply China. The country’s alumina imports rose 28 percent to 2.56 million tons in the first half of last year, the nonferrous metals trade association said in July. Shanghai-based East Hope Group, an animal feed and meat products maker, last year announced plans to build a 1.1 million ton a year alumina refinery. Gansu Liancheng Aluminum and Shanxi Changxin International Trade together plan a 2.4 million ton-a-year project. Alcoa, Alumina Ltd. and BHP have announced plans to expand production in Suriname, Australia and Jamaica. Chalco agreed to take a 30 percent stake in East Hope’s project, state news agency Xinhua reported last month. It is also in talks with Vietnam on a $2 billion plan to develop a bauxite mine, the raw material for making alumina, and build an alumina refinery in that country. Chalco is fighting to retain its share of aluminum production as well as its hold on the alumina market in China. Surging aluminum prices in China are prompting rivals to find ways to expand capacity, even as the central government puts restrictions on financing for such projects. The government wants to slow the expansion to prevent rising alumina prices caused by a shortage of the material from putting smelters out of business. Chalco aims to boost aluminum capacity to 1.5 million metric tons a year by 2005, which would be 15 percent of the country’s expected capacity by that time. That is below the company’s 16 percent share in 2003. Aluminum for delivery in three months on the Shanghai Futures Exchange has risen by a fifth over the past year to 16,150 yuan, or $1,950, a ton. Bloomberg News

Output at Dubal hits new high

Gulf Daily News, Bahrain Wednesday 7 January 2004

Dubai Aluminium Company Limited (Dubal) has reported record production of 560,000 tonnes and sales of 616,000 tonnes for 2003.

Output climbed by five per cent and sales by 7pc over 2002, the company said in a statement yesterday.

"Dubal is now harvesting the benefits from its previous expansions and its focus on key performance drivers," said managing director Mohammad Al Ghurair.

It is working to boost total capacity to 710,000 tonnes per annum by 2006.

The Dubai government-owned smelter, the single largest non-oil industrial enterprise in the UAE employs more than 2,700 skilled people, and says it is among the 20 lowest cost aluminium producers in the world.

Alcoa halts $1-billion smelter project; re-opens talks with Quebec gov't

CBC News, Canada - 09:28 PM EST Jan 07

ALLAN SWIFT

MONTREAL (CP) - World aluminum leader Alcoa Inc. has put a halt to a $1-billion modernization of its aluminum refinery at Baie-Comeau, Que., until it can negotiate a new agreement with the Quebec government.

The new Liberal government elected last April wants to renegotiate terms of a deal struck by the previous Parti Quebecois government that provided a 10-year tax break and an interest-free loan of $170 million for the project.

"Alcoa cannot continue to invest in a project without a firm agreement with the Quebec government,"Jean-Pierre Gilardeau, president, primary metals for Alcoa Canada, said Wednesday.

He said an agreement reached with the provincial government in 2002 was called into question by Premier Jean Charest's Liberal government last fall, invoking constraints on the availability of energy.

Gilardeau said it was not until last Dec. 4, a few days before the expiry of the original agreement, "that the government let the company know the agreement had to be reviewed on a new basis including job creation with aluminum manufacturing.

"In consequence, the government wants to open a new round of negotiations."

The modernization was to have created 5,850 direct and indirect jobs over eight years in Quebec's North Shore region but no new jobs for the expanded smelter although Alcoa committed to keeping a minimum of 1,476 on its payroll there.

"I think the government - and definitely us - we are all willing to finding a way to make this happen and have a win-win situation for everyone," Gilardeau said in an interview.

He said the cost of energy is not an issue because Alcoa pays the same industrial rate as everyone else.

The project would increase the plant's capacity to 547,000 tonnes a year from 437,000 tonnes.

Michel Rochette, spokesman for Quebec's Economic and Regional Development Department, said the project is a priority and will be completed.

Rochette said the original agreement was negotiated without Hydro-Quebec input.

"We have to correct some errors of the previous government," said Rochette.

However Francois Legault, the Parti Quebecois economic critic, said the original announcement was made in the presence of Andre Caille, the president of Hydro-Quebec.

Denis Berube, president of the aluminum union, said that "if the plant is not modernized, it could not carry on for long."

Analyst Ian Howat, of National Bank Financial, does not see the halt as a major setback for Alcoa.

"In the scheme of the whole industry, capacity not being built isn't that a big a deal," said Howat.

"Maybe they (Alcoa) are saying, 'If you can't give us the type of deal we want, we'll sit back and wait to see if the government becomes more negotiable.' "

Alcoa had undertaken to start the project before the end of 2003. Engineering work began in March 2003 and initial bids had been sought.

In May, Alcoa began final negotiations with the Quebec government for electricity supplies and financing, but the deal became invalid after the government refused to extend it by two months, preferring to re-negotiate on a new basis, Gilardeau said.

The company, a subsidiary of the Pittsburgh-based world aluminum leader, and the Quebec government have given themselves until Feb. 29 to reach a new deal.

Pittsburgh-based Alcoa is also negotiating a new agreement with the Quebec government over Alcoa's planned expansion of its smelter at Deschambault near Quebec City, at a cost of $750 million.

Parent company Alcoa Inc. has 127,000 employees in 40 countries. It had revenues of $20.3 billion US in 2002.

On Tuesday Alcoa said it had scrapped plans to spend $1.3 billion US for a new smelter and power plants in Brazil because the country's new electricity regulation would drive up production costs. It said it would reconsider if Brazil polices turn in their favour.

© The Canadian Press, 2004

Power costs threaten Alcan Brazil plans - report

Reuters, 01.07.04, 8:44 AM ET

RIO DE JANEIRO, Brazil, Jan 7 (Reuters) - High electricity transmission and distribution costs may lead the Brazilian unit of Canada's Alcan Inc.<AL.TO> to suspend investment in power plants, throwing into question future aluminium production.

On Wednesday, the financial newspaper Valor Economico quoted the president of Alcan Brasil, Joao Beltran Martins, as saying the company had plans to invest $205 million in electric energy up to 2007.

But the paper also quoted the executive as saying at least one of its projects, the $110 million Cacu-Barra dos Coqueiros plant in the central Goias state that would generate 155 megawatts, may have to be scrapped.

He said a 140 MW plant at Candonga, being built jointly with Companhia Vale do Rio Doce (CVRD) <VALE5.SA> (nyse: RIO - news - people), was due to start producing power in the first quarter of 2004, but the project has not been confirmed as economically viable.

"If the present situation continues, Alcan will raise the question of continuing aluminium production in Brazil," Martins told Valor, adding that power distribution costs had more than tripled in the past three years due to additional charges, most of them government-imposed.

An aide to Martins told Reuters the company had "expressed its position to Valor."

Martins said the government, which launched a new set of rules for the power sector at the end of last year aimed at dragging it out of a prolonged crisis, had failed to address the problems of major electricity consumers.

"We were expecting the new model to correct the distortions, but it did not happen," Martins said.

Government officials have said the new set of rules, or "model" as it is known, would be imposed gradually and that further adjustments could be made to take into account the needs of different consumers and producers.

Alcan expects to produce 50,000 tonnes of aluminium this year at its plant at Ouro Preto in Minas Gerais state and 57,000 tonnes at the Aratu plant in the northeastern state of Bahia. It is one of top producers in Brazil, the world's No. 6 aluminum maker.

Aluminium producers in Brazil have accelerated investment in own power generation after the 2001 power rationing in the country affected their output.

Copyright 2004, Reuters News Service

Chinese team examines Alba's calciner plant

Gulf Daily News, Bahrain, 7 Jan 2004

MANAMA: Chinese Ambassador Wu Congyong yesterday visited Alba to tour the smelter and calciner facilities and meet with members of its executive management team. Mr Congyong, who was accompanied by economic and commercial affairs first secretary Fan Weishang and embassy economic and commercial office staff, was met by the Alba finance and calciner general manager Ahmed Al Noaimi.

Mr Al Noami outlined Alba's expansion over the past 32 years into one of the largest aluminium smelters in the world and its growing economic and social contributions to Bahrain's development.

The delegation toured the calciner plant in Sitra and later visited the smelter in Askar, where they were met by the Alba chief executive Bruce Hall and toured the facility.

Mr Hall briefed the delegation on Alba's activities and its strategic plan, with particular emphasis on the $1.7 billion Line 5 Expansion Project, which will make the smelter the largest in the word outside Eastern Europe.

Government is studying VALCO deal - JAK

GhanaWeb, Ghana, 7-Jan-2004

President John Agyekum Kufuor said on Wednesday that his administration would spend the next three months to seek relevant advice on the offer of Kaiser Aluminium Company of the United States (US) to sell its 90 per cent shares in the Volta Aluminium Company (VALCO).

Kaiser intends to offload to the government estimated shares of between 35 and 100 million dollars whilst Ghana intends to take over all of the Kaiser's related liabilities and obligations.

President Kufuor, who was addressing the third People's Assembly in Accra, said any decision government takes would be in the best interest of the nation.

"In the circumstances I appeal to all to ensure that undue pressure is not brought to bear on the process.

The forum, which was organised to mark 11 years of the Fourth Republic, would be replicated in all the regions on the theme: Good Governance Through Democracy."

It offers members of the Executive an opportunity to interact with a cross-section of the people to elicit their views on pertinent national issues.

President Kufuor also touched on the ill effects of population increase especially on security, social and economic sectors in the country's cities.

He expressed particular concern about the in-sanitary conditions that had engulfed Accra with an estimated population of four million. President Kufuor said the rapid sprawl of the city has so far out-paced whatever planning the city authorities have been capable of implementing, leading to large parts of the city degenerating into slums with piles of rubbish littering the surroundings.

To meet this challenge, the Government has directed the devolution of power from the Accra Metropolitan Assembly (AMA) to 13 sub-Metropolitan Assemblies.

President Kufuor said the Sub-Metro Assemblies would be empowered with special budgetary, technical and administrative support to enable them to meet the challenges.

He said the Government and the Assemblies alone could not tackle the problems if people did not adopt healthy attitudes and lifestyles.

"I am, therefore, appealing to the entire society to accept to bear its fair share of the problems," he said.

Source: GNA

Alcoa Swings to $291 Million Profit

The Associated Press - 01/08/2004

By CHARLES SHEEHAN AP Business Writer

PITTSBURGH

A late-year surge in aluminum prices more than doubled profits for Alcoa Inc., the world's largest aluminum producer reported Thursday in its fourth-quarter financial report.

For the quarter ended Dec. 31, Alcoa recorded profits of $291 million, or 33 cents per share, compared with a loss of $223 million, or 26 cents per share, during the same period last year.

Analysts surveyed by Thomson First Call had expected a profit of 34 cents per share.

The Pittsburgh-based company reported profits of $938 million on the year, or $1.09 per share, compared with $420 million, or 49 cents per share, in 2002.

"Over the year, we improved productivity, managed capital, and worked every lever in our control to offset cost increases for raw materials, energy, benefits, and the impact of a weakened dollar," said Alain Belda, chairman and chief executive. "The result was consistently improving profitability, a considerably stronger balance sheet."

The company released its earnings report following the end of regular trading.

Shares of Alcoa were up 46 cents Thursday to close at 38.66 on the New York Stock Exchange. In after-hours trading, the stock lost 7 cents.

Quarterly revenue rose 9 percent, to $5.5 billion. For the full year, Alcoa said revenue was up 6 percent to $21.5 billion.

Demand for alumina and aluminum led to an improved market, Belda said.

The company said profits were also up because of aggressive cost cutting. Alcoa said Thursday it had surpassed its goal of $1 billion in annual savings.

Belda also said the company had retired more than $1.2 billion in debt over the year.

Alcoa's Massena Smelters Reorganize; 107 Positions to Be Eliminated

MASSENA, N.Y.--(BUSINESS WIRE)--Jan. 8, 2004--Alcoa Primary Metals today announced a reorganization at its two Massena smelters that reflects the impact of the partial curtailment there last year and further reduces costs at the two facilities to keep them globally competitive. The reorganization will result in the elimination of 107 jobs.

Massena's East Smelter is particularly vulnerable to market fluctuations and reorganized to remain open last year thanks in part to a temporary economic incentive offered by the New York Power Authority (NYPA) which expired on December 31, 2003. The plant continues to benefit from a successful cooperative effort between management, the state, the local union membership and elected officials, said Alan Cransberg, President Primary Metals - USA. "Plant employees continue to drive down costs to allow these smelters to compete in world markets," Cransberg added.

"When Massena was forced to curtail some production at both the West and the East plants during 2003 because of rising market power prices and alumina costs, we did not significantly reduce our staffing," said Nelson Dube, Primary Metals Operations Manager. "Unfortunately, now we must readjust staffing levels to take into consideration the lower production. Management and union officials will work in partnership to minimize the impact on our people and the local community."

Dube said the 2004 financial plan for Massena also includes major initiatives to improve manufacturing processes at the facilities through more intensive deployment of the Alcoa Business System and an efficient Reliability Excellence Process. The smelters also plan to improve their safety performance and maintain the company's comprehensive sustainability and environmental policies.

"Power supply remains one of the most important costs drivers in these facilities' operation," Dube said. "Alcoa and NYPA will continue to work on an agreement for long-term power supply for the smelters during 2004. We made progress during 2003 and have identified issues that require work on the part of both parties this year."

Alcoa (NYSE:AA) is the world's leading producer of primary aluminum, fabricated aluminum and alumina, and is active in all major aspects of the industry. Alcoa serves the aerospace, automotive, packaging, building and construction, commercial transportation and industrial markets, bringing design, engineering, production and other capabilities of Alcoa's businesses as a single solution to customers. In addition to aluminum products and components, Alcoa also markets consumer brands including Reynolds Wrap(R) aluminum foil, Alcoa(R) wheels, and Baco(R) household wraps. Among its other businesses are vinyl siding, closures, fastening systems, precision castings, and electrical distribution systems for cars and trucks. The company has 120,000 employees in 41 countries.

Jamaica's Alpart posts record alumina output in '03

Reuters, 01.09.04, 1:00 PM ET

KINGSTON, Jamaica, Jan 9 (Reuters) - Jamaican refiners Alumina Partners of Jamaica (Alpart) said on Friday its output of alumina reached a record 1.529 million tonnes in 2003 and it hoped to exceed a target of 1.65 million tonnes this year.

Alpart, majority-owned by Kaiser Aluminum Corp. <KLUCQ.OB> and currently up for sale, attributed the increased production to investments in capacity and efficiency at its plant 75 miles (120 km) southwest of the capital of the Caribbean nation.

In 2002 the company -- Jamaica's top producer of bauxite and alumina -- produced 1.43 million tonnes of alumina.

Kaiser, the third-largest aluminum producer in North America, is looking to emerge from bankruptcy proceedings and has put several assets on the auction block.

It owns 65 percent of Alpart and is evaluating several bids.

Among the suitors are state-owned China Minmetals Nonferrous Metals Co Ltd; Texas-based Sherwin Alumina Co., a unit of privately held BPU Reynolds; a joint venture between Century Aluminum Co (nasdaq: CENX - news - people) and Toronto's Noranda Inc <NRD.TO>; Switzerland-based Glencore International AG; and Japan's Mitsubishi Corp <8058.T>.

Norway's Norsk Hydro ASA <NHY.OL> owns the other 35 percent of Alpart's bauxite mine and alumina refinery and has first right of refusal to buy Kaiser's stake.

"We have set ourselves a production target of 1.65 million tonnes for this year and we believe that we can exceed that," Alpart's general manager, Darrel Harriman, said in a statement.

"The plant is producing at record levels at a time when it is good to be in the bauxite and alumina business because spot market prices are out of sight."

Bauxite used to be Jamaica's top foreign exchange earner but has now slipped to third place behind remittances and tourism.

In 2002, the country produced a total of 13.12 million tonnes of bauxite and 3.63 million tonnes of alumina, which is the raw material for primary aluminum.

Final figures for Jamaica's overall bauxite and alumina production for 2003 have not been released, but officials said there was an average 6 percent increase over the previous year.

Copyright 2004, Reuters News Service

Alumina looking good as Alcoa shines in Q4

Sydney Morning Herald, Australia January 10, 2004

By James Chessel

Alcoa, the world's largest aluminum maker, kicked off what is expected to be busy year for the resources sector with a solid fourth-quarter profit, a result that augurs well for its Australian partner, Alumina.

Helped by strong Chinese demand for alumina and a restructure of the Pittsburgh-based aluminum maker, Alcoa reported a $291 million net profit for the quarter, or 33c a share, compared with a year-earlier net loss of $223 million.

This result, which was in line with market expectations, should be good news for Alumina, which split from the old WMC last year.

Alumina, which derives its earnings from a 40 per cent stake in the Alcoa-managed AWAC joint venture, is expected to hand down its full year results at the end of the month.

UBS is tipping the Melbourne group will post a net profit of about $250 million for 2003, roughly 20 per cent higher than the previous year.

"We believe that continued strength in the alumina markets should support improved earnings," the broker said. "We expect that alumina prices could remain at inflated levels over the medium term as Chinese demand for this aluminium feedstock remains strong."

Alumina prices have effectively doubled in the past year in US dollar terms at least as Chinese buyers pressure an already tight market for the raw material.

UBS predicts the world's most populous nation will import about 5.3 million tonnes of alumina in 2003, a 16 per cent rise on the previous year.

Alcoa's result was closely watched by resources pundits as it was one of the first blue chip companies to report earnings this quarter, and is expected to be representative of many commodities, especially metal companies.

The latest earnings represent a 4 per cent increase over third-quarter earnings of $280 million.

The price of most metals, including aluminum, gold, platinum and steel, have been climbing higher over the past few months because of increasing demand in China and other parts of Asia.

UMWA: Green goo may have sickened miners

Princeton Daily Clarion, In 01/09/04

By RICH AZAR

Chief staff writer

PRINCETON -- "Green goo," generated as a byproduct of aluminum processing and buried at a defunct Warrick County strip mine, contains heavy metals and other pollutants that may have sickened miners, according to the United Mine Workers of America.

Waste residues from Alcoa's Newburgh plant were dumped over a 35-year period at the Squaw Creek Mine north of Boonville, jointly owned by the aluminum company and Peabody Coal Co. The mine, which at its peak employed about 280 people, ceased operations in 2000 but reportedly seeks to renew its permit.

"Everybody was aware there were items being dumped at Squaw Creek but we weren't actually aware of the contents," said Bil Musgrave, the president of UMWA Local 1189 who worked there from 1977 until the mine closed.

"It was massive amounts of 'green goo,' as it was commonly called," he said.

The union recently obtained documents that dispute Alcoa's contention, expressed to the Indiana Department of Environmental Management, that the viscous fluids were buried underground in drums.

"Alcoa reported to IDEM that roughly 1 million drums were buried on the site containing chromium hydroxide sludge, tarry waste, spent potlinings and chromic acid," said a June 5, 2003 letter from the state agency to the wife of a concerned miner.

Musgrave said, "We contend this hazardous material was discarded in open, active pits and in coal gob (a byproduct of coal-washing) by large tanker trucks ... They dumped it in and covered it with dirt."

Union officials recently obtained a March 16, 1993 IDEM report that noted nine separate burial sites; another was added two weeks later. IDEM classified the sites as "high priority" for clean-up through federal Superfund legislation, but dropped the sites a year later and said no further remedial action was contemplated, according to Musgrave.

"It seems ironic," said former Squaw Creek miner Larry Morton, "that instead of being alarmed and taking action about these high priority sites full of dangerous chemicals, the government removed them from the National Priority List."

Recently uncovered documents also indicate that 12 separate dumping sites are involved, Morton said. "It's difficult to get the real story," he said.

The 10 confirmed sites, ranging in size from just under an acre to nearly four, contained more than 65 million gallons of hazardous wastes including the heavy metal chromium, cyanide and industrial solvents, the documents show.

The amount of "goo" involved would form a sidewalk, 3 feet wide and 2 inches deep, nearly 3,300 miles long, some 500 miles longer than the distance from New York to Los Angeles, Musgrave said.

Heavy metals cannot be destroyed and pose potential health risks if released into the environment, through the groundwater table, for example. The scientific community is divided over what level constitutes a significant threat. Although the union claims that miners "who worked around the waste have had many health problems," Musgrave declined to get into specifics, claiming privacy concerns.

"That's one of the things we'd like to see done, a questionnaire of employees and contract haulers to see how many people might be affected," Musgrave said.

IDEM is on the case, according to an Oct. 29, 2003 letter from a project manager to Alcoa management. "Geophyisical surveys conducted over five of the pits suspected of waste disposal showed higher conductivity anomalies attributed to buried drums," wrote Lynette Schrowe, project manager for the department's State Cleanup Section

"IDEM believes groundwater mounding beneath these surficial depressions can be easily misinterpreted as buried drums. Some drill testing within these areas is recommended to verify the burial depths and location of these buried wastes."

Schrowe's letter to J. Kevin Rayburn, fuels and land manager for Alcoa, gave the company 45 days to respond to the environmental concerns. Neither Schrowe nor Rayburn could be reached for comment Thursday afternoon.

Monitoring wells indicate some groundwater leaching has occurred, although it's unclear to what extent, if any, the leaching poses a threat to the public.

A recently uncovered EPA document, dated March 1985, says that between 100 and 200 chemicals are involved, Musgrave said. "Chromium is known to be harmful to plants ... Uptake and biomagnification in food crops and cattle could result in increased toxicity progressively up the food chain including humans," the report says.

Some of the reclaimed land was once used for grazing cattle but that practice apparently has stopped, Musgrave said.

Peabody reportedly is seeking to renew its permit for the mine, which still contains substantial underground deposits. The Indiana Department of Natural Resources will hold an informal public meeting at 6 p.m. Monday in the Boonville library.

"My concern is that they're going to put people to work in there and we want them to slow down, do tests and make sure it's not hazardous," Morton said. "And we need to know if any of these chemicals can cause cancer or make you seriously ill down the line."

UMW wants Alcoa to remove waste

Henderson Gleaner, KY January 9, 2004

By MAUREEN HAYDEN Courier & Press staff writer 464-7433 or haydenm@evansville.net

The United Mine Workers is accusing Alcoa Warrick Operations of exposing miners to a "toxic soup" of chemicals deposited in a landfill at the Squaw Creek Coal Mine 25 years ago.

The accusation comes five days before a public hearing on an application to reopen the coal mine, closed since 1998.

The UMW is demanding that Alcoa remove the hazardous waste from the Warrick County mine site before any mining is resumed. Alcoa, in turn, says the waste material was put there legally and that the U.S. Environmental Protection Agency decided more than a decade ago that it did not have to be removed.

The issue is expected to take center stage at an informal public hearing Monday in Boonville, Ind., conducted by the Indiana Department of Natural Resources. The hearing was called by the DNR as part of its routine review of an application submitted by Alcoa to renew its mining permit for the Squaw Creek property.

Alcoa owns the coal reserves on the 8,000-acre mine site.

The "toxic soup" allegation was made Thursday in a news release sent out by the UMW Local 1189, whose members worked at Squaw Creek. In the news release, the UMW accuses Alcoa of dumping 65 million gallons of hazardous waste at the Squaw Creek site.

"This harmful waste dumped by Alcoa gives the residents of Warrick County problems that could have serious impact on our future health and safety, including groundwater contamination and the future development of Warrick County," said UMW local leader Bil Musgrave.

"The right thing for Alcoa to do is to move all of this waste to a hazardous waste landfill."

Alcoa concedes that waste from the pot lines at its aluminum plant was deposited at the mine site. Alcoa spokeswoman Sally Lambert said the waste was put there with the permission of the state Department of Health, before state and federal laws required such chemicals to be deposited in a special hazardous waste landfill.

In 1993, the EPA put 10 sites in the Squaw Creek property on its "Superfund" list, marking as a priority cleanup site. By 1994, after conducting tests at the sites, the EPA took them off the Superfund list and decided no action needed to be taken.

Lambert said Alcoa has installed groundwater wells at the mine to monitor for contamination and is required to submit reports routinely to state and federal regulators.

DNR officials said Thursday that no decision has been made on the permit application. The hearing is scheduled for 6 p.m. Monday at the Boonville Public Library.

Malaysia PM Hints Sarawak Aluminum Proj May Be Canceled

Friday January 9, 7:47 PM

KUALA LUMPUR (Dow Jones)--Malaysia's Prime Minister Abdullah Ahmad Badawi Friday hinted that the planned $2 billion aluminum plant in east Malaysia's Sarawak state may be called off.

"They (GIIG Capital Sdn. Bhd.) have a proposal to set up an aluminum plant, which would consume a lot of energy, electricity that is going to be produced by Bakun (hydroelectric dam) but that has not happened," Abdullah told reporters following a meeting of the predominant party's supreme council.

Abdullah, however, didn't confirm whether the planned aluminum plant project would be canceled.

When asked where demand for electricity from the Bakun dam would come from, Abdullah said: "We know what to do. We don't build things for nothing."

Abdullah, however, said the government has already allocated funds for the dam project.

Earlier Friday, a source close to the aluminum plant project told Dow Jones Newswires the fate of the project is uncertain after its backers failed to buy a controlling stake in the Bakun hydroelectric dam.

If the smelter's backers are to proceed with the project, guarantees are needed from the government on the reliability of the power as well as the costs, the industry source said on the condition of anonymity.

Aluminum smelting is a power-intensive business, and its viability depends heavily on getting cheap and reliable electricity.

Smelter Asia was originally expected to consume 1,000 megawatts of the 2,400 megawatts of power Bakun will be capable of producing once it is completed in 2006.

Smelter Asia is backed by Malaysian tycoon Syed Mokhtar Albukhary and Middle Eastern investors led by businessman Mohamed Ali Alabbar.

Syed Mokhtar had also been trying to buy 60% of the owner of the Bakun dam - Sarawak Hidro Sdn. Bhd. - via GIIG Capital Sdn. Bhd.

That purchase would have offered a "guaranteed power supply" to Smelter Asia at a good price, the source added.

But on Wednesday, Prime Minister Abdullah Ahmad Badawi said the government's agreement with Syed Mokhtar's GIIG Capital for the purchase of Sarawak Hidro had lapsed as its predetermined conditions weren't fulfilled. He also said the government would reimburse GIIG's down-payment on the deal immediately.

Alcoa's Badin Works plant wins contract for anode production

Sarasota Herald-Tribune, FL The Associated Press 1/12/04

BADIN, N.C. --

Alcoa Inc.'s Badin Works plant has been awarded a two-year contract to supply Venture Coke Co. with baked anodes for sale to their aluminum smelter customers, Alcoa said Monday.

Alcoa will supply approximately 31,000 metric tons of anodes a year to Venco.

"This contract allows us to utilize our equipment more fully, and keep jobs in the community," said plant manager Tommy Gibson. The new contract means Badin Works will retain about 34 jobs that could otherwise be lost, he said.

An anode is the positive terminal in the smelting process that is used to produce aluminum.

"The interesting part about this is that we make anodes for our internal smelting process but don't make them for external businesses," Alcoa spokesman Michael Andrews said. "Venco is contracting to buy them from us."

Badin's anode and ingot casting facilities provide material to Alcoa locations throughout the U.S. The Badin plant currently employs about 130 people.

In August 2002, Alcoa shut down its aluminum plant in Badin, where it had operated since 1916. The closing meant 377 workers were given layoff notices. The company blamed it on depressed aluminum prices.

Ukraine ups aluminum output 1.6%

Interfax, Ukraine 12 Jan 2004

Kyiv. (Interfax) - Zaporizhiya Aluminum Combine (ZAlK), Ukraine's only aluminum smelter, edged production of primary aluminum up 1.6% to 107,480 tonnes in 2003.

A ZalK press release quoted the general director, Alexander Fedotov, as saying figures grew 5% to 236,050 tonnes of alumina and 50% to 7,943 tonnes of silicon.

Ferrosilicon production, which ZalK resumed in 2003, totaled 1,765 tonnes.

The company beat all core production targets and increased output in value by 3.6% in 2003.

Russia's Avtovaz-Invest owns 68.01% of the shares in ZAlK. The Ukrainian government owns 25% of the stock and the remaining shares are held by small shareholders.

Alcan, Pechiney in do-or-die talks on Coega

Business Day, South Africa, South Africa 12 Jan 2004

Trade and Industry Correspondent

SA's largest potential foreign investment to date and thousands of jobs hinge on the ability of government and parastatal representatives this week to sell the country as the best destination for a $2,2bn aluminium smelter.

The Industrial Development Corporation (IDC) and Eskom, which each hold a 12,5% stake in the mooted smelter project, will meet representatives of merging aluminium groups Alcan and Pechiney in Johannesburg on Friday in an effort to convince them of SA's merits as the top aluminium production venue worldwide.

The IDC's executive vice-president of projects, Jaco Kriek, confirmed yesterday that the project was under review, and that Alcan and Pechiney were considering several competing projects.

"This week is crunch time for SA for this project," Kriek said.

Officials from Alcan and Pechiney are in SA this week to conduct a due-diligence investigation of the project, which would be located at Coega in Eastern Cape. Construction is already under way at the site in preparation for the giant smelter.

SA came close to bedding down the investment with Pechiney, when Alcan's takeover of the French company last year threw a spanner in the works.

SA has gone beyond the call of duty to secure the project, which promises major economic benefits, including the biggest foreign direct investment to date and thousands of direct and indirect jobs.

Coega spokesman Raymond Hartle confirmed that representatives of the Coega industrial development zone would also meet the officials later this week.

"I'm confident that they will find that SA is the best site," Hartle said.

Kriek said Alcan and Pechiney would also meet government officials, although he could not say who these were.

Smelter workers to strike over pay

ABC Online, Australia Wednesday, January 14, 2004

Workers at the Norsk Hydro Aluminium smelter at Kurri Kurri on the New South Wales central coast

will step up their industrial campaign for improved wages and conditions when they walk off the

job for 48 hours from tonight.

The Australian Manufacturing Workers Union (AMWU) says the plant's main labour contractor,

Skilled Engineering, has been unable to negotiate a new enterprise bargaining agreement with the

company during the past eight months.

The union says workers want a wage increase, but management wants to set conditions on any

future pay rises.

AMWU delegate Gerry Mohan says the stoppage begins at 9:00pm AEDT this evening and now it is up

to the company to make the next move.

"Now the employees have decided to take the industrial action, it's up to the company now ...

[which has] clearly set about saying if there's any wage increase there's got to be

Corus flags increase to price of steel

Financial Times (subscription), UK January 14 2004

By Peter Marsh in London

Corus on Wednesday set the scene for higher steel prices across Europe by saying it was ready to increase prices of many of its products in March, following a price rise between 5 per cent and 8 per cent this month.

The Anglo-Dutch steelmaker also said it was planning to invest €42m ($49m) in an aluminium rolling mill in Germany as part of an effort to move more of its business into higher-value products and increase profit potential.

In an interview with the FT, Philippe Varin, Corus chief executive, said he was no more than "cautiously optimistic" about 2004 trading conditions. Demand for steel in Europe remained weak, he said, while prospects were better in North America and Asia.

Mr Varin's comments on selling prices fit in with recent moves by Arcelor of Luxembourg and Germany's ThyssenKrupp, two of Corus's main European steel industry rivals, to increase prices.

Analysts believe that because of such announcements - triggered by strong demand for steel in China - average prices of basic hot-rolled steel in Europe will rise between the end of 2003 and mid-2004 by about €40 a tonne, or more than 10 per cent.

Last night, reflecting these sentiments, which many investors believe will feed through to higher profits, Corus's shares closed up 3p at 38¼p, mirroring similar moves for Arcelor and ThyssenKrupp.

Corus - formed in 1999 through a merger of British Steel and Hoogovens of the Netherlands - has chalked up cumulative operating losses of more than £2bn since its formation.

It is expected by analysts to have lost £150m-£200m at the pre-tax level, excluding restructuring charges, during 2003.

However, many investors think it could break even this year.

Mr Varin said Corus was on track with its project to cut costs and improve sales by a variety of measures, including working with suppliers to cut costs and spread good ideas in manufacturing across the company.

"For much of last year we were in the hospital; now we are out of the hospital but we are still trying to walk before we can run," he said.

Mr Varin said the plan to expand its aluminium plant in Koblenz did not contradict the company's long-term intention to sell its aluminium operations, which account for less than one-sixth of its annual sales of about £7.5bn.

The Koblenz project is expected to increase output at the plant, now about 150,000 tonnes a year, by 5-10 per cent. Most of the production is high-value aluminium sheet for use in the automotive and vehicle industry.

An aluminium alternative

Beverage Daily (press releases), France 13/01/2004

ExxonMobil Chemical Films Europe has developed two new metallyte films that provide an ultra-high-barrier alternative to aluminium. According to the company, a major advantage of these films, compared to metallised polyester or aluminium foil, is their exceptional performance after flexing and their better puncture resistance, both of which contribute to better product protection and shelf life.

One product, Metallyte 18XM882, is untreated on its polyethylene compatible sealable surface (non-metallised side). XM882/PE sealant can be used in an unprinted two-layer lamination for bag-in-box applications as an alternative to OPP/alu/PE, Pet/alu/PE and Pet-met/PE.

Exxon says that the structure fits well with the industry trend for downgauging and use of mono materials and allows both lap and gusset sealing. This enables brand owners to create stand-up formats, with reduced surface area compared to alternative structures such as PET or alufoil.

The company believes that the material is perfect for long conservation of products packed under modified atmosphere with little oxygen uptake in the pack headspace.

Metallyte XM882 has been specially designed to be receptive to extrusion lamination and coating, without compromising barrier properties or appearance. Moreover, the PE extrusion coating can be applied directly to the film’s non-metal side without using primers. In regions of high humidity, this technology can be used to develop cost effective all-plastic high-performance barrier laminates.

The second product, Metallyte 18XM883, is treated on its PE sealant side and can be used in various structures. The presence of paper helps give the structure good stiffness as well as a more traditional look and feel, and the company has developed adhesive lamination for pouch packaging in the dry food market.

A PET sealant has also been developed for use in a wide range of applications for biscuits, wafers, dry powders and dry beverages. Exxon says that the structure meets the needs of products packed in soft and vacuum packs. For products packed under atmospheric conditions, Metallyte 18XM883 can limit the impact of moisture uptake and provide aroma and light protection.

The films business of ExxonMobil Chemical is a leading global supplier of a full range of oriented polypropylene (OPP) film for flexible packaging and labelling applications. ExxonMobil has seven affiliated production plants: three in Europe (Virton, Belgium; Kerkrade, the Netherlands and Brindisi, Italy) and four in North America. Its European headquarters are located in Luxembourg.

Smelter workers to strike over pay

ABC Online, Australia - Jan 13, 2004 (Yesterday's article was incomplete)

Workers at the Norsk Hydro Aluminium smelter at Kurri Kurri on the New South Wales central coast will step up their industrial campaign for improved wages and conditions when they walk off the job for 48 hours from tonight.

The Australian Manufacturing Workers Union (AMWU) says the plant's main labour contractor, Skilled Engineering, has been unable to negotiate a new enterprise bargaining agreement with the company during the past eight months.

The union says workers want a wage increase, but management wants to set conditions on any future pay rises.

AMWU delegate Gerry Mohan says the stoppage begins at 9:00pm AEDT this evening and now it is up to the company to make the next move.

"Now the employees have decided to take the industrial action, it's up to the company now ... [which has] clearly set about saying if there's any wage increase there's got to be trade-offs and we're saying there's certainly no trade-offs," he said.

Politicisation of VALCO:

A recipe for Ghana's economic reputational damage

GhanaWeb, Ghana Thursday, 15 January 2004

Reference: Ghana Home Page article of Monday, 12 January 2004. Title: “Govt Cautioned Over Purchase Of VALCO”.

Under the subject heading, I have read with disbelief and dismay the following: “Senior economists and technocrats from other political parties have described the intention of government to invest hard-earned foreign exchange in VALCO as an attempt to cause financial loss to the state.”

Well, I am an engineer-cum-metallurgist with qualifications in management studies and business administration. So one can put me in the category of technocrats as well. BUT I am not speaking on behalf of any political party. I am debating the issue from purely an engineering point of view and on behalf of mother Ghana.

First and foremost, on what technical basis, test and trials, calibration of existing installed equipment and their ancillaries or any benchmarking did our learned ‘economists and technocrats’ come up with such a statement? Let’s be real and stop this sensationalism.

Which part of the VALCO plant is obsolete? The parcels one and three conveyor systems and their controls? the rectifier station and its auxiliaries? the pot cells and control systems, the carbon bake and carbon rodding machinery? the production equipment including the ball mills, the shakers etc, the metallographic and chemical laboratories’ set up? the metal products lay out with its casting and homogenisation furnaces and the non-destructive testing equipment etc?.

VALCO was built in the mid 1960s initially with three potlines. The construction of the fourth potline, of which I was part as electrical (construction) engineer, was built in 1970-1971. Prior to VALCO coming into being there were aluminium smelters like ALCOA, ALCAN, COMALCO, REYNOLDS, KAISER et al in USA, Australia, Europe and with subsidiaries world wide. And almost ALL of these plants are in operation - generating jobs and wealth globally.

During my time as a maintenance engineer for the rectifier station and plant power (later to become a metallurgist after further university studies) VALCO had in place (and may still have in place) an effective preventative maintenance program for every piece of installed equipment or machine and their ancillaries on the plant and we hardly experience equipment breakdowns or malfunction. And most importantly, we had a well-trained, dedicated, committed and disciplined workforce.

In an industry of this type, research and development is continuously carried out coupled with benchmarking with other companies in the industry to upgrade procedures, processes, and overall performance. And where deemed necessary configuration or re-engineering of processes is carried out for efficiency and effectiveness.

Additionally, continuous improvement (via training) of the staff - management, operatives and tacticians – is designed and implemented to enhance a culture of best work practice and productivity

One thing that shouldn’t be ruled out is TECHNOLOGY TRANSFER. Our young engineers and technical officers will benefit from technology transfer and upgrade their engineering knowledge and skills, jobs will be created and wealth will be created in the nation with an attainment of an integrated aluminium industry.

What our dear learned economists and technocrats can do for us (Ghana) is simple. They can start working on the marketing aspects of Ghana’s integrated aluminium industry by ‘global scanning’ - starting from the intra-African trade platform - demography of the populations, potential industry growth in respective African countries, possible market share for the various aluminium products and by-products of the industry. This is because apart from our local ‘small’ market, Ghana would need an outlet to sell her various types of aluminium products in the future.

For example from alumina one can produce abrasives for furnace linings, electrical insulators, porcelain dinnerware etc; from aluminium one can go into the construction industry (widow frames, gutters, roofing sheets etc; transportation industry (airplanes, automobiles, boats, rail road cars, trucks; packaging industry (beverage cans, bottle caps, frozen food trays etc; electrical industry (light bulbs, power lines, telephone lines etc) and of course the commonly known pots and pans and cutlery and thousands of other products containing aluminium.

From the above one can see the multitude of aluminium industries/manufacturing plants that can spring up in the nation if Ghana owned a smelter of this kind - thus enhancing the manufacturing base of the nation. The employment that will be created and the wealth that will be generated right from the bauxite mining, to alumina refining, to aluminium smelting, to fabrication of aluminium products and aluminium recycling would be GREAT for our mother Ghana.

Please let’s all pool resources and think strategically - 10, 15, 20 years and beyond and bring into reality a dynamic and forward looking ‘Ghana’s Integrated Aluminium Industry.’

I can be contacted via my e-mail address: Charles.Manu1@defence.gov.au

Charles Agyeman Manu, MEng (Electrical), MAppsSc (Metallurgy), MBA (Technology Management);

Assistant Director Professional Development, Australian Public Service;

Member of National Institute of Governance, Australia.

Legislative panel weighs $4 million package

http://news.bellinghamherald.com/stories/20040116/TopStories/172585.shtml

Kari Shaw, The Bellingham Herald Friday, January 16, 2004

The state House of Representatives Technology and Energy Committee held a public hearing Wednesday night on a bill that could mean $4 million in tax relief for the Alcoa Intalco Works aluminum smelter.

The Whatcom County delegation started working on the tax bill more than six months ago when it became clear that Alcoa Inc., the international aluminum giant, was seriously considering closing its Ferndale-area smelter because of high energy costs.

After threatening to close the plant entirely because of high rates last April, Alcoa officials instead curtailed operations at the end of the year by laying off half its 700 workers and closing one of two production lines.

Intalco bills

In order for state House Bill 2339 providing tax relief for aluminum smelters to pass, it has to make it through the following hoops in Olympia:

A finance committee review and public hearing.

A vote on the House floor by Feb. 15.

Review and approval by the state Senate.

At the same time, the state Senate will consider an identical bill submitted Thursday by Sen. Dale Brandland, R-Bellingham. In order for it to pass, it has to:

Be reviewed and approved by the Senate Ways and Means committee.

Be approved in a vote on the Senate floor.

Review and approval by the state House.

"We need to make a policy decision of do we want the aluminum industry in the state," said Rep. Doug Ericksen, R-Ferndale. "Last year, we had to make a policy decision of do we want to build airplanes in the state (with a tax-relief package for Boeing). We said yes."

Ericksen said the legislators understand that the tax-relief bill is only one of four conditions Alcoa Inc. wants met before it will commit to keeping the plant open. The others are reduced energy costs, a long-term guarantee of low energy prices and changes in state regulation of aluminum smelters.

Ericksen said unless all four conditions are met, the smelter might close. The legislation, which cuts the smelter's taxes for the next two years, is a way to "live to fight another day and keep people employed while the pot line is running," he said.

"This is just to get us through these difficult energy times," he said.

Alcoa officials have agreed, saying a tax package would be appreciated but the big battle is over reducing energy costs. Aluminum smelters are one of the largest industrial energy consumers because they use electricity to melt aluminum ore.

Talks continue

Whether or not the region's costly energy situation will change, however, is up in the air.

Short-term rate decreases from the federal Bonneville Power Administration hinges on the success of a settlement offer for a 2001 lawsuit.

Northwest public utilities went to court in 2001 claiming BPA illegally offered energy and monetary rebates to private investor-owned utilities. BPA officials have said they could reduce power prices if the utilities agree to drop the lawsuit. All the utilities - public and private - served by BPA must agree to the settlement terms by Jan. 21.

Since November, when the Snohomish County Public Utilities District voted to reject the settlement, the parties have been in a stalemate. The Snohomish PUD commissioners said the settlement, in which BPA offered to cut rates by 9.7 percent for 2004, would not provide enough compensation for resolving the legal battle.

The settlement has the support of Northwest state governors and U.S. Rep. Rick Larsen, D-Lake Stevens, who is still trying to convince both parties to work on a short-term solution to high energy rates.

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

District of Kitimat asks court to stop Alcan from exporting power from Kemano

CJAD, Canada January 16, 2004, EST.

KITIMAT, B.C. (CP) - A British Columbia district is trying to prevent aluminum giant Alcan from selling electricity from its Kemano power plant.

Representatives from the district of Kitimat, B.C., filed a suit at the Supreme Court of British Columbia on Friday to try to force Alcan to use the power it generates for more aluminum production in Kitimat.

Alcan signed a contract with the B.C. government in 1950 that allowed the company to use cheap hydroelectric power to run its aluminum smelter in Kitimat.

But Kitimat is concerned that Alcan has been using the deal in recent years to expand its international power sales at the expense of local jobs, said Mayor Richard Wozney outside the court.

"Alcan has been cutting aluminum production in Kitimat so it can sell more power, while at the same time it has been increasing production in Quebec," Wozney said.

"Smelting aluminum at Kitimat is extremely profitable, but Alcan can make more money selling electricity so it's breaking the contract it has with the people of B.C."

Kitimat has lost more than 200 jobs due to Alcan's decreased local aluminum production, Wozney said.

However it is investing heavily in smelters in the Saguenay Region of Quebec and abroad.

"What is happening now is that through power sales in B.C., Alcan is making profits to the tune of $90 million a year, taking those profits and investing in Quebec and not investing those profits in B.C. That's added to the frustration."

He accused the government of not bothering to monitor contracts and force companies to comply with them.

"In Quebec they would not allow a situation to develop where power sales takes precedence over using power for aluminium production. It just wouldn't happen," he said.

The B.C. government said it's not overlooking the situation, but has said it thinks Alcan is doing nothing wrong.

"We've examined the issues relating to Alcan's rights and obligations several times over the past number of years and over past governments," said Rick Thorpe, minister of competition, science and enterprise.

"Nothing has emerged from the review of this matter that would cause the government to believe that Alcan activities are inconsistent with the arrangements which led to the development and operation of the Kitimat smelter."

Alcan's Kitimat smelter employs about 1,800 people and the company provides about 6,000 direct and indirect jobs in the northwest. The smelter manufactures and exports about 275,000 tonnes of aluminum annually.

A spokesman for the company said he was upset the town has taken the dispute to the courts.

"We're extremely disappointed," Joseph Singerman said in an interview from Alcan's Montreal headquarters about the suit.

"We have always felt the best way to create a healthy business environment is to work with all parties and we have been very co-operative, working with a joint task force in the region to support a viable economic future."

He said the move is especially frustrating because the district, Alcan and other stakeholders had agreed to meet with Thorpe to try and work out the dispute.

"Now the B.C. Supreme Court is seized with this litigation," he said, declining further comment while the matter is being argued.

Chalco to lift Pingguo aluminium capacity

Reuters, 01.16.04, 3:17 AM ET

By Polly Yam

HONG KONG, Jan 16 (Reuters) - Aluminum Corp of China Ltd (Chalco) <2600.HK> has submitted an application to Beijing for expanding aluminium capacity at its Pingguo unit in Guangxi by 250,000 tonnes to about 370,000 tonnes a year, a local government official said on Friday.

Chalco is awaiting approval from China's State Development & Reform Commission (SDRC) before proceeding with the expansion, which is due for completion before the end of 2005, said the official from the investment bureau of Bose city, which administers Pingguo.

He said Chalco's Pingguo unit was also planning to boost alumina capacity to about 1.6 million tonnes a year in 2005/2006 after doubling capacity to 800,000-850,000 tonnes last year.

Alumina is the main raw material used to produce aluminium.

Chalco and U.S.-based global aluminium giant Alcoa Inc (nyse: AA - news - people) plan to set up a 50:50 joint venture to operate the Pingguo unit but the formation of the venture missed planned schedules at the end of both 2002 and 2003.

Earlier this month, Chalco chairman Guo Shengkun said the two companies were still in talks with the government of the Guangxi autonomous region about the power arrangement for the planned joint venture. Alcoa holds an approximately eight-percent stake in Hong Kong and New York-listed Chalco.

BOSE INVESTMENTS

In Bose city, another 50,000 tonne-per-year aluminium plant is planning to double capacity while a separate 56,000 tonne-per-year greenfield aluminium smelter is under construction, the investment bureau official said.

The two plants will have combined capacity of 156,000 tonnes of aluminium before end-2004, he added.

Chalco and its partners have also begun work on a separate alumina project in Guangxi. The Bose official said the foundations of a new 1.6 million-tonne alumina complex, to be operated by Guangxi Guixi Huayin Aluminum Corp, were laid in November.

Construction of the complex will start before September and is scheduled for completion within two-and-a-half years, he said.

"We want to double the capacity at the complex to 3.2 million tonnes before 2010," he said.

State-controlled Chalco and Minmetals Nonferrous Metals Co Ltd each hold a 33-percent stake in Guangxi Guixi. A local government representative body, Guangxi Investment Ltd, owns a 34-percent stake, the Bose official said.

Copyright 2004, Reuters News Service

Kaiser's Offer OF VALCO: Could It Be An ALBATROSS?

http://www.ghanaweb.com/GhanaHomePage/NewsArchive/artikel.php?ID49975

GhanaWeb, Ghana Friday, 16 January 2004

Feature by G.B. OSEI-ANTWI

Kaiser International, owners of the Volta Aluminium Company (VALCO) is reported to have made an offer to sell the company to the Government and people of Ghana.

President John Agyekum Kufuor, who announced this on December 21, 2003, said a Memorandum of Understanding (MoU) to this effect was to be signed later in that week. Kaiser's International Executive President and Legal Counsel, Mr Ed Houff made the offer when he visited Ghana in mid-December.

Kaiser Aluminium and Chemical Corporation has 90 per cent shares in VALCO, and this is what it has agreed to sell to Ghana. Aluminium Company of America (ALCOA) holds the remaining 10 per cent.

The Ministry of Information later announced that a committee of aluminium production experts would soon be appointed to make due diligence report to recommend how the Government could take over VALCO. VALCO, which is a major long-term investment in Ghana by Kaiser, is one of the largest private enterprises in country and is the second largest smelter in Sub-Saharan Africa. It is a major producer of primary aluminium for the world market. The company employed close to 2,000 people when in full capacity, 99.3 per cent of whom were Ghanaians, with 324 of them holding technical, professional and managerial positions.

The construction of VALCO began in 1964. The smelter shipped its first aluminium in 1967 and the plant has been expanded twice to its present design capacity of 200,000 metric tonnes a year and runs five pot lines. VALCO'S goals are to produce high-quality products, provide meaningful employment and career opportunities for its employees, assure the safety of its people and environment, contribute economically and socially to Ghana, and earn fair but reasonable returns for its shareholders.

The company is one of the nation's largest taxpayers, having contributed more than 10 per cent of Ghana's total tax receipts for a number of years. It is also a major purchaser of goods and services from local vendors amounting to upwards of five million dollars of procurement annually.

In an interview, a former Manager of VALCO, who is an engineer and past President of the Ghana Institute of Engineers, described the offer as difficult a situation. This is because all the raw materials for the production of aluminium ingots are expensive to import, this is one of the factors that has made the company expensive to run. The offer would have been very generous if Ghana produces alumina from the numerous large bauxite deposits in the country.

To accept the offer, Ghana needs to negotiate for the importation of 400,000 metric tonnes of alumina a year because the plant uses about 1,000 tonnes a day and this should be a continuous order.

The suggestion is that VALCO should be made to operate the plant for one year, before it hands over to Ghana, so that it could be continued from where they left off. This would help Ghana to continue to import the raw materials, as well as export the product to their customers. From GNA's interaction with experts it seems that VALCO is pulling out not because they are not interested in Ghana, but for the mere reason that the plant is now not economic enough to operate at profit. For, no multinational will continue its operation when it is making losses, and cannot determine how soon it can break even.

The present Government has found it necessary for an economic review of the tariff agreement to enable the Volta River Authority (VRA) to make enough money, so that it could continue to supply power. Few years back, VRA was receiving 40 million dollars annually from VALCO for the supply of electricity.

It is also a fact that the production of aluminium demands a lot of power supply but at cheaper cost. Therefore, if VALCO is to buy power at economic rate, automatically, Kaiser will be forced to fold up. VALCO currently uses 24 per cent of power generated from Akosombo.

VALCO concedes that the price it pays for electricity is lower per kilowatt hour when compared with other VRA consumers, its electrical energy cost is substantially lower than two-thirds of VALCO's competitors in the world aluminium market. It, however, pays higher electrical rates when compared to any other aluminium smelter in Africa.

There was a period of time when VALCO used to employ 1,900 workers, and at that time it had its own fleet of workers' buses that conveyed them to and from work, it had a laundry department that washed clothing and kitchen department which supplied food to workers, among other things. During that time, VALCO was operating at 11 man-hours per ton in production. The Management was forced to cut down to between four to five-man hours per ton, as is the practice at the plant in the United States of America.

This compelled VALCO to sublet some of the services to contractors to enable the company make about 1,000 US dollars for every ton of alumina that is produced.

power by VRA, reducing the company's production by 25 per cent. In October, 2002, VALCO took a difficult decision to improve efficiency to enable the company to remain competitive in the face of low aluminium prices coupled with low operating capacity for several months, by declaring 85 workers redundant.

By January 2003, VALCO which was operating on two pot lines with 950 employees, initiated a process to reduce manpower requirements, and on May 5, 2003, the Company took a decision for the curtailment of the last pot line to provide VRA with additional flexibility in meeting the needs of other power users in the country in the light of the low level of the Akosombo Dam. VALCO after its closure has only 310 workers, who have been retained to help in the maintenance of the plant.

The Ghana Minerals Commission is provided with 11 percent of VALCO's aluminium production estimated at 20 million dollars that is paid in local currency to serve aluminium industries in Ghana. Therefore, VALCO has become the foundation of over 50 million dollars aluminium industry in Ghana, which has about 100 user companies employing thousands of Ghanaians.

It is believed that the Kaiser's offer of VALCO has been due to the insistence that the Company should pay economic tariffs since the current price of three cents per unit is too low.

When the GNA asked Mr Francis Tuyee, a Chemical Engineer, to comment on the Government's acquisition of VALCO, he asked: "If VALCO's offer is accepted by the Government, will the cost of power be increased from three cents per unit as the Government is now forcing on the company? If not, we must allow VALCO to stay as it is because Ghana cannot run VALCO as has happened to a number of private companies that were taken over as well as the mismanagement of some state own enterprises which have been or are being divested."

On the exploitation of bauxite, President Kufuor is reported to have said Kaiser's offer would give Ghana the opportunity to exploit her bauxite deposits at Kyebi and Nyinahin, as well as step up production at Awaso. The President was further quoted as saying that the offer by Kaiser would mark Ghana's industrial birth.

It is pertinent to draw attention to the fact that mining and processing of local bauxite was part of the integrated plan of Kaiser at the inception of VALCO

However, at a certain point in time, when Kaiser looked at the economics of scale, even though it was found to be good, the capital outlay was so huge that it had to put the project on a complete hold. There was also the perception that if Kaiser produced alumina locally VALCO would have become strategic and Government could have taken it over easily as it did to some timber companies.

A number of experts GNA spoke to indicated that to exploit bauxite and process it into alumina in Ghana, there would be the need to provide rail lines and roads to the deposits, build the plant and construct entire townships with the necessary infrastructure facilities for the large army of workers to be employed.

They put the conservative estimate for such a project at about one billion dollars.

Mr Tuyee, who is also an expert on alumina processing, told the GNA that to process bauxite to obtain one kilogram of alumina one needed 250 grams of wheat flour or starch to evaporate the moisture.

For a plant to process bauxite to feed the VALCO plant with alumina in Ghana, it needs 100 megawatts of power which the country cannot immediately supply.

Mr Tuyee, therefore, suggested that what must be done was to get enough power for the nation, at reasonable price, so that industries could operate at their full capacities. VALCO has been operating under capacity for about a decade now because of inadequate power supply.

All said and done VALCO is a Ghanaian success story - an example of what can be accomplished when private enterprise and Government work together and find the formula for creating value. Can this success story continue to be told when the Government takes over?

Source: GNA

RusAl Gets Rail Tariffs

Moscow Times, Russia 18-dec-2004

MOSCOW (MT) -- Russian Aluminum has become the first and only company to secure special rail tariffs from the government and Russian Railways Co., or RZD, Vedomosti reported Friday.

The authorities and RusAl have agreed on a fixed dollar-based rail tariff that will remain in force until 2012.

The agreement will only be upheld if RusAl keeps its promise to build new production facilities in Khakassiya and Irkutsk, which will generate an additional 4.25 million tons of aluminum and raw materials per year.

The new production facilities are expected to create additional annual revenues of 17 billion rubles ($600 million) for RZD.

Electricity supplies are expected to be plentiful in the Pacific Northwest in 2004.

The Columbian, WA 1/18/04

There are two major factors in this. First, many new generating plants have been built since the electricity crisis of 2000 and 2001. Second, the dramatically high prices of the crisis years have substantially reduced the amount of electricity demand in the region. In particular, the region's aluminum industry has shut down and does not appear likely to rebound any time soon.

In fact, most of the smelters are likely to be permanently closed. The loss of the aluminum plants has reduced electricity demand in the region by nearly 15 percent.

Even though the region's economy finally is showing signs of a recovery, without the return of the aluminum plants electricity demand in the region will remain well below the levels attained before the electricity crisis.

Russia raises primary aluminum output 3.9% in 2003

Gateway 2 Russia, Russia, 19 Jan 2004

Russia produced 3.48 million tonnes of primary aluminum in 2003, up 3.9%, Aluminum, a Moscow engineering and consulting firm, has reported. Aluminum production in Russia, Ukraine and Tajikistan totaled 3.91 million tonnes, which was up 3.8%. Production increased 1.1% in Ukraine to 113,640 and 0.6% to 319,360 tonnes in Tajikistan. In Russia, production was highest at the Bratsk Aluminum Plant, which turned out 930,539 tonnes, up 1.6% on 2002.

Alcan takes charge on smelter project

Canadian Press 19 Dec 2004

Alcan Inc. is recording an asset impairment charge of $72 million, after reviewing the Corego smelter project in South Africa that it acquired last year in the $6.3-billion deal for France's Pechiney SA.

But the charge won't affect Alcan's reported earnings and will be recorded as a charge against Pechiney's 2003 financial statements, Montreal-based Alcan said Monday in a release.

“Alcan will continue to review Pechiney's current investments and business plans on the basis of assumptions currently used by Alcan,” the company said.

Alcan is also re-evaluating Aluminium de Grece SA, where it has concerns regarding the supply of electrical power to the AdG smelter.

“No decision has been made on any of Pechiney's current investments,” the firm said. “The company will announce in due course any decision taken in relation to this review.”

On the Toronto stock market Monday, Alcan shares rose 51 cents to $59.25.

Kaiser Aluminum Signs Agreement To Sell Its Interests In An Alumina Refinery In Jamaica

www.kaiseral.com 21-Jan-2004

HOUSTON, Texas, January 21, 2004 -- Kaiser Aluminum & Chemical Corporation has signed an agreement to sell its 65% interest in Alpart, a partnership that owns bauxite mining operations and an alumina refinery in Jamaica, to Glencore AG. Net cash proceeds are expected, at a minimum, to be in the range of $160 million to $170 million, subject to certain closing and post-closing adjustments.

The transaction, which is subject to several closing conditions as noted below, includes the interests of Kaiser and certain of its subsidiaries in Alpart and also may include certain alumina sales contracts that are typically sourced from Kaiser's share of alumina production at Alpart. The purchase price could increase significantly depending on which contracts, if any, are ultimately included in the transaction. Kaiser will be responsible for prepayment of its approximately $14 million share of Alpart's outstanding CARIFA loan, which becomes due in full upon consummation of the transaction. The agreement also provides for Glencore to supply Kaiser with alumina of up to 200,000 metric tonnes in 2004 and up to 100,000 metric tonnes in 2005 at an agreed percentage of London Metal Exchange aluminum prices.

Kaiser expects that, at the minimum end of the expected range of proceeds, the transaction will result in a pre-tax book loss in the range of $50 million.

The transaction is subject to approval by the United States Bankruptcy Court for the District of Delaware, where Kaiser plans to file a related motion and a copy of the agreement as promptly as practicable. Kaiser anticipates requesting the Court to rule on the motion during a regularly scheduled hearing on February 23, 2004. The transaction is also conditioned upon approval by the lenders under Kaiser's Post-Petition Credit Agreement, as more fully discussed in the company's most recent Quarterly Report on Form 10-Q. Subject to the satisfaction of these and certain other conditions, Kaiser expects the transaction to close late in the first quarter or early in the second quarter of 2004.

Until such time as the transaction closes, Kaiser will retain management responsibility for Alpart and will involve appropriate Glencore personnel on transitional issues.

Separately, under Alpart's existing partnership arrangement, Hydro Aluminium a.s., which currently owns the remaining 35% of Alpart, will have 30 days following Kaiser's receipt of Court approval to elect to purchase Kaiser's interests at the price specified in the agreement. If Hydro were to exercise this right, Glencore would be entitled to receive from Kaiser reimbursement of certain expenses incurred in negotiating the agreement, subject to a limit of $250,000.

"This is another step toward our stated goal of emerging from Chapter 11 in mid 2004," said Jack A Hockema, president and chief executive officer of Kaiser Aluminum.

"Our relationship with the Government of Jamaica, the people of Jamaica and, particularly, two generations of Alpart employees has been a rewarding experience," he said. "In light of Glencore's extensive investments in the alumina industry, including its interests in Jamaica, and its strong financial profile, we believe this transaction will give Alpart employees and other constituents a sound opportunity for future investment and growth."

The Alpart refinery has substantially completed an expansion program to increase the plant's capacity to 1.65 million metric tonnes per year. It also controls bauxite reserves having an annual production capacity of 3.5 million metric tonnes, which it mines through a joint venture. Approximately 1,200 employees are involved in refinery and mining operations.

Glencore AG is a subsidiary of Glencore International AG, a privately owned company organized under the laws of Switzerland. Together with its subsidiaries, Glencore is a leading, diversified natural resources group with worldwide activity in the mining, smelting, refining, processing and marketing of metals and minerals, energy products and agricultural products. These activities are supported by strategic investments in industrial assets.

Kaiser Aluminum & Chemical Corporation is a leading producer of fabricated aluminum products, alumina, and primary aluminum. It is the operating subsidiary of Kaiser Aluminum Corporation (OTCBB: KLUCQ).

Ukraine plans metals sector share sales

Interfax, Ukraine 21-Jan-2004

Kyiv. (Interfax) - Ukraine has approved plans to sell blocking stakes or more shares in four major metals companies in 2004.

The State Property Fund published a list of more than 300 companies in which at least 25% of the shares will be offered. They including 50% of Ukkrudprom, the umbrella company for iron ore producers; 25% of Zaporizhiya Aluminum Combine, which produces aluminum and alumina; and 60.86% of steel producer Makeyevka Metallurgical Combine.

The list also includes Krivorozhstal, Ukraine's biggest iron and steel works, but the property fund will not announce how many shares are to be offered in this company until plans to float the shares have been approved.

Ukraine also plans to sell 98.37% of the shares in the Makeyevka Coke-Chemicals Plant.

Hydro Aluminium signs cost-saving relining contract

PRESSI.COM 01/21/2004

Hydro Aluminium has contracted Hydro Production Partner Refractory Work to reline the aluminium reduction cells at Hydro's four wholly owned primary aluminium plants in Norway. The total contract is worth around NOK 170 million and represents considerable savings for Hydro Aluminium.

Prior to the start of contract negotiations, Hydro Aluminium had carried out a benchmarking process related to the costs of relining work at the aluminium plants at Karmøy, Høyanger, Årdal and Sunndal, in addition to the metal plant at Neuss in Germany.

The result of the benchmarking showed that it would be possible for the company to reduce its costs by about NOK 8-10 million (EUR 1-1.2 million) per year.

The new three-year contract will continue the business relationship between the companies. Today, Hydro Production Partner Refractory Work is responsible for the relining of the cells at the Norwegian plants.

Hydro Production Partner Refractory Work is an independent business unit within the Hydro Business Partner sector, which offers diverse business services to companies both inside and outside of the Hydro group. The company won the new contract with Hydro Aluminium in competition with external bidders.

"Active benchmarking has been a learning opportunity for all participants," points out Thorvald Mellerud, who is head of the Hydro Aluminium business unit Primary Aluminium Production.

Authors: Jon Kristian Schnell & Eivind Bull-Hansen Published: 2004-01-21

This material has been produced by Norsk Hydro. It is delivered by Pressi.com in its original form.

Container volumes at Ports of Auckland up

New Zealand Herald, New Zealand 22.01.2004 7.45 am

Container volumes at Ports of Auckland rose 5 per cent in December year on year. Volumes for the year to December rose 5 per cent to 659,532 20ft equivalents (TEUs).

December volumes were down 18 per cent on December 2002. Record aluminium New Zealand Aluminium Smelters produced a record 334,400 tonnes of aluminium at its Tiwai Point plant last year.

The company's saleable metal production in 2003 was 507 tonnes, up on 2002.

An autumn electricity shortage last year forced production down by 10 per cent because of soaring spot market electricity prices.

Alcoa expansions go ahead, higher prices must wait

Reuters, 01.22.04, 9:32 PM ET

NEW YORK, Jan 22 (Reuters) - Alcoa Inc.'s (nyse: AA - news - people) expansion plans are on schedule or tied up in energy talks, and long-term contracts will delay the full impact of higher aluminum prices, company executives said on Thursday

Asked on a conference call with analysts about Alcoa's capital expansion plans, Alain Belda, chairman and chief executive officer of the world's largest aluminum producer, said its Iceland smelter was on track, Canadian expansions depended on talks with the government for power, and alumina refineries in Suriname, South America, and in Western Australia should be operational in 2005.

Alcoa was moving ahead on a primary aluminum smelter in Iceland, which has an abundant supply of hydropower, he said.

"The Iceland project is going well. We should start spending some money at the end of this year. We've done a lot of the design and detail engineering. We'll start doing some long-term purchasing at the end of the year," said Belda.

Referring to its U.S. Pacific Northwest primary aluminum operations Belda said, "The Bonneville area is simple for us. If the cash cost is close to the market price we tend to close down the plants and sell the alumina in this case, or sell the energy when it's our own energy or we have long-term contracts."

Alcoa operates its Intalco smelter in Ferndale, Washington at less than capacity because of high regional power prices.

"Specifically, in the Bonneville area we have a partnership with a Japanese company that might have a difference of opinion with us as to what should operate," Belda added.

Alcoa owns 61 percent of the Intalco facility, with the remainder owned by a Japanese consortium.

Expansions in China are also delayed by energy talks.

"We're still in the same place as we said before, we want long-term competitive power contracts and we're still negotiating that," said Belda.

Richard Kelson, executive vice president and chief financial officer said Alcoa's plans to expand alumina production in Jamaica were complete and and system-wide capacity creep will boost production.

"In 2003 we completed the alumina purchase agreement from the Sherwin facility that we divested in 2001. The net impact will be that we will have less material to sell in the spot market in 2004," said Kelson.

Asked about the impact of higher alumina and aluminum prices in the fourth quarter, Kelson said, "For the time being it looks pretty encouraging. It appears to be holding."

He added, however, improvement was due to new business and that the second quarter should show a larger impact.

Belda referred to pricing in 2003 as "mushy", with business in the first half as slow, and improvement finally showing up in September, October and November.

"In December things slowed down because a lot of customers were not going to jump up on the numbers or the orders they were seeing. They were managing their inventories like they always do at the end of the year," he said.

Citing aluminum, alumina and fabricated products, Belda said all three have about a quarter delay because most of the first quarter business was booked before prices surged.

"I think there's a much stronger feeling as we go into the (first) quarter, but a lot of what you see in pricing has about a quarter delay," said Belda.

"It feels better, but we've all been burnt for three years now waiting for that better quarter. We're managing everything that we have in our control. We continue to manage the first quarter just like we've managed every quarter in the last two years," the chief executive added.

Copyright 2004, Reuters News Service

Alcan Inc. to close Quebec smelter this spring; 550 jobs to go

CJAD, Canada, January 22, 2004, EST.

MONTREAL (CP) - Alcan Inc. is shutting down an old smelter in Quebec 10 years before it was scheduled to close and cutting 550 jobs because of the rapid rise of the Canadian dollar.

The 60-year-old smelter near Saguenay, Que., was to close by about 2014, following the opening of a more efficient smelter in the same region in 2001. Alcan said the shutdown was precipitated by the rapid rise of the loonie which has outstripped the recent rise in aluminum prices.

The four potlines employing the Soderberg technology will be shut down between this February and April, Alcan said Thursday.

Another part of the smelter complex using a different technology will remain open.

The shutdown will take out 90,000 tonnes per year of production capacity, which represents three per cent of Alcan's global capacity. The remaining 163,000 tonnes of pre-bake smelting technology capacity in Jonquiere will not be affected.

More than 6,500 people work for Alcan in the Saguenay region, some 250 kilometres north of Quebec City, where most of the aluminum giant's Canadian operations are grouped.

"Closing a plant is never an easy decision, but as a corporation dedicated to economic and environmental sustainability, we must make the decisions that are required to be both environmentally responsible and protect Alcan's competitive position globally," said chief executive Travis Engen, who was in Davos on Thursday.

"Despite our successful efforts over the years to bring the Jonquiere Soderberg lines up to today's environmental and technological standards, the reality is that this technology has a limited life span," Engen said.

Compared with its other smelters in Quebec, the Jonquiere plant has the highest production costs, is the most polluting and is also one of the least energy efficient, Alcan said.

The company says it will take advantage to pending retirements to avoid direct layoffs.

Alcan spokesman Joe Singerman said no decision has been taken to advance the closures of the other three Alcan Soderberg technology plants in Canada, which are to be phased out by 2015, as announced in 1984.

They are located in Shawinigan and Beauharnois, Que., and Kitimat, B.C.

Alain Proulx, president of the Alcan labour union affiliated with the Canadian Auto Workers, said Alcan had promised to replace the closed smelter with a new one.

"We could see it coming," said Proulx. "In the context of the merger with Pechiney, we felt threatened. We asked to be reassured; today, we have the response."

Montreal-based Alcan (TSX:AL) is the world's largest aluminum producer after its recent takeover of Pechiney of France, completed last month for $6.3 billion Cdn.

Shares in the company closed down three cents to $59.86 on the Toronto stock market.

© The Canadian Press, 2004

David C. Dobson as president of Alcoa Engineered Products

Biloxi Sun Herald, MS 22-Jan-2004

PITTSBURGH (AP) - Alcoa has hired David C. Dobson as president of Alcoa Engineered Products, which supplies extruded aluminum products to the aerospace, automotive, commercial transportation, construction and consumer markets.

Dobson most recently had been vice president of research at Fisher Scientific Ltd. in Pittsburgh. He also worked for more than 20 years at General Electric. Dobson will work in Chicago.

He succeeds Veronica M. Hagen, who was named Alcoa's chief customer officer in June 2003.

Kaiser to sell refinery for $170 million

The Spokane-Review 22-Jan-2004

Sale of Jamaican alumina facility provides firm with additional cash

John Stucke Staff writer

Kaiser Aluminum Corp. will sell its Jamaican alumina refinery to a Swiss company for about $170 million.

The deal with Glencore AG is the latest big move by Kaiser and comes as the company approaches the two-year mark of its filing for Chapter 11 bankruptcy protection.

The company is attempting to sell properties and collect cash as it tries to bounce out of bankruptcy later this year.

Jamaica has rich reserves of bauxite, which Kaiser mined and refined at its Alpart alumina refinery. Alumina is then smelted into aluminum.

Kaiser has operated in Jamaica for more than 50 years, and now employs about 1,200 workers in the country.

The company owns 65 percent of the Alpart refinery. The other 35 percent is owned by Hydro Aluminum.

In a press release, Kaiser said the deal needs approval from its bankruptcy lenders and the judge overseeing the bankruptcy case.

Kaiser said it expects the transaction will result in a pre-tax book loss of $50 million.

Glencore is a privately owned company with vast metals holdings.

In December, Kaiser announced that it will sell its aluminum smelter in Ghana to the African nation's government for between $35 million and $100 million. That deal is expected to close in April

Alcoa sets goal to cut costs by $1.2B

Pittsburgh Business Times, PA 22-Jan-2004

Having completed a $1 billion-plus cost-cutting initiative last year, Alcoa Inc. told analysts Thursday it had set a new goal to reduce expenses.

Pittsburgh-based Alcoa brought the previous cost-cutting program to a close during the fourth quarter last year and succeeded in eliminating $1.012 billion worth of expenses. It was the second time in six years Alcoa, the world's largest aluminum producer, had shaved more than $1 billion from its costs.

But Alcoa told analysts during a conference Thursday it was launching a third such program, this time with a goal to eliminate $1.2 billion in expenses. The company set the end of 2006 as its target date.

After the third initiative has been completed, Alcoa will have chopped more than $3.3 billion from its costs, the company said.

Alcoa targets sustainable reductions when it identifies costs it can cut and excludes volatile items such as energy and currency valuations.

The company says the cost-cutting moves have helped to offset unfavorable conditions including declines in aluminum prices and soaring health care and benefits expenses.

Also Thursday, Alcoa's chief executive, Alain Belda, said the company had renewed its aspiration to join the first quintile of S&P Industrials in return on capital performance.

Mr. Belda said that at a minimum, Alcoa would strive to provide returns in excess of the cost of capital, regardless of general economic and aluminum-price cycles.

In the fourth quarter, Alcoa's return on capital was an annualized 7.6 percent. That was up from 4.2 percent in 2002, but below the first quintile threshold of 16 percent.

© 2004 American City Business Journals Inc.

Ormet restarts Louisiana plant, preserves local jobs

Martins Ferry Times Leader, OH 22-Jan-2004

ORMET CORP. announced Wednesday that 230 employees will be hired at its Burnside, La., plant and 2,000 jobs at its Hannibal plant will be preserved because the Alumina Plant in Louisiana has returned to full production in record time.

Alumina produced following the restart at Burnside is scheduled to arrive in Hannibal in mid-February after a 20-day trip up the Mississippi and Ohio rivers. The alumina is a key ingredient in aluminum production. The alumina will supply the four potlines currently at Ormet's Hannibal Reduction Plant.

Ormet had shut down two of its six Hannibal potlines in late December because of poor market conditions, which resulted in 300 workers being laid off. But, the restart of the Louisiana Plant will help the Hannibal Plant significantly.

Ormet Chairman and Chief Executive Officer R. Emmett Boyle said, "In our continuing efforts to survive in the face of the worst economic environment for U.S. aluminum producers in many decades, we decided last fall to restart the Burnside Alumina Plant, both to take advantage of currently skyrocketing alumina prices on the world market and to enable us to supply Ormet's own potlines with company-produced, rather than purchased, alumina. The restart of Burnside required us to incur some $10 million of restart-related expenses, which has put tremendous strain on our financial resources and caused us to fall behind on some of our taxes and other expenses. But we determined that if Ormet was to make it through the currently very adverse industry environment, remain in operation, and continue to be a major employer in the Ohio Valley, we had no choice but to tighten our belts, restart Burnside, and ensure that we continue to have access to a supply of alumina that will enable us to produce aluminum, preserve jobs, and meet our commitments to our customers."

The Burnside plant was curtailed in February 2001 when the price of alumina plummeted because of excess industry capacity. At that time, it was less expensive for Ormet officials to purchase, rather than produce, alumina. However, with the recent increase in alumina used around the world and rise in alumina prices, Ormet's only source for alumina during 2004 is from its own plant.

Ormet Corp., headquartered in Wheeling, employs approximately 2,600 people throughout its subsidiaries, Ormet Primary Aluminum Corp. and Ormet Aluminum Mill Products Corp. The company operates eight facilities in six states and produces high-quality aluminum products for the fabrication, extrusion and conversion markets.

Alcoa sees $1.4 bln investment in Brazil

Reuters, 01.22.04, 7:02 AM ET

SAO PAULO, Brazil, Jan 22 (Reuters) - Alcoa Inc. (nyse: AA - news - people), the world's No.1 aluminum producer, plans to invest $1.4 billion to develop a bauxite mine in northern Brazil, the financial daily Gazeta Mercantil reported on Thursday.

The company is conducting geological tests in western Para state in the Juruti area that is expected to put out 350 million tonnes of bauxite, the paper said.

The project, which should be started by 2007 would be the state's third bauxite mining project. If viable, the Juruti site is expected to yield four million tonnes of bauxite a year.

Para's secretary of production, Sergio Leao who met with Alcoa directors in Belem on Wednesday, said the investment should be defined by the end of 2004 and is part of a larger project of Alcoa to expand its aluminum output in Brazil.

The $1.4 billion would be used for the extraction of bauxite and the production of alumina, the basis for aluminum. The Gazeta also said Alcoa could build a primary aluminum smelter in a subsequent phase of the site's development.

Company officials were not immediately available for comment.

On Jan. 7, a spokeswoman from Alcoa 's Brazilian subsidiary said the company had shelved plans to build a new aluminum smelter at the Alumar smelter in Sao Luis, in Maranhao state, because of high energy costs.

Copyright 2004, Reuters News Service

No change in employment conditions, says Alpart boss

Jamaica Observer, Jamaica Friday, January 23, 2004

EMPLOYEES of Alpart (Alumina Partners) in Nain, St Elizabeth were yesterday assured by their boss, Gene Miller, that their current terms and conditions of employment would be honoured after the sale of the company.

Miller's assurance to the workers followed an announcement that the cash-strapped Kaiser Aluminum & Chemical Corporation had signed an agreement to sell its 65 per cent interest in Alpart, the partnership which owns the mining operations and refinery at Nain, to Glencore AG at a cost of between US$160 million and US$170 million.

Norman DaCosta, vice-president of the National Workers Union (NWU), which represent the workers, said that the union was satisfied with the assurance from the Alpart boss.

DaCosta said that Glencore's involvement would step up the momentum of current efforts to improve operational efficiencies and modernise the plant, which had been slowed down by financial problems experienced by Kaiser.

He noted that even if Norweigian firm, Hydro Aluminum, which currently owns the other 35 per cent of the plant, take up their priority to purchase the Kaiser shares, it would be an improvement as Hydro is also financially sound.

He said, however, that at this point the union was not sure whether the change of ownership will result in job cuts.

Gene Miller is Kaiser's vice-president for Jamaican operations.

Protester douses Hydro president

The Gazette Friday, January 23, 2004

Dumps glass of cold water on Caillé. Head of Quebec-owned power utility laughs off impromptu soaking and defends proposed Suroît plant

An environmentalist opposed to Hydro-Québec's plans to build the Suroît thermal plant and new hydro dams in northern Quebec, threw cold water on André Caillé yesterday - literally.

Caillé, president and CEO of the Quebec-owned utility, was explaining to reporters in a National Assembly hallway that Hydro-Québec also wants to buy 1,000 megawatts of windpower, but that Suroît, an 800-megawatt natural-gas-fired plant, will be more reliable than the wind, which can die down.

While he was doing that, Mikael Rioux, a well-known environmentalist, emerged with a glass of water in his hand and in a flash dumped it on Caillé's head.

"Thank you very much for your participation in environmental disasters," the 27-year-old Trois-Pistoles man said.

Unfazed, Caillé paused momentarily and then continued to answer reporters' questions, cracking jokes and asking for a towel.

"I always thought this would happen someday," Caillé said standing in a puddle.

"I thought it would be a cream pie," he added dryly. "I prefer water."

Security guards escorted Rioux from the National Assembly. Rioux gained attention two years ago when he camped out for 40 days over the Trois-Pistoles River to protest against construction of a 3.5-megawatt dam. He also refused a citizenship award for saving a man and three children from drowning in 2001.

Rioux accepted the $500 cheque from the Quebec government when the Parti Québécois administration cancelled the Trois-Pistoles dam and all other mini-hydroelectrical projects. Since then, Liberal Environment Minister Thomas Mulcair has reopened mini projects and the Trois-Pistoles project is being revived.

Caillé and the top Hydro-Québec brass defended the utility's $19-billion strategic plan for 2004-2008 at two days of assembly hearings, ending yesterday.

Caillé recalled that soon after he was named president of Hydro-Québec in 1996, an environmentalist tried to persuade him to abandon hydroelectric dams, relying on natural gas instead.

"We have chosen the best technology," he said, explaining that Suroît will ensure Hydro-Québec's security of supply until new hydroelectrical dams are built. As well, the utility has chosen a new technology that will emit 8-per-cent less greenhouse gases than the initial Suroît project.

If Hydro-Québec does not build Suroît, Quebec consumers could face higher electricity bills, as is the case in Ontario.

"We will end up in a situation where we will have to buy," he said. "Everybody in North America will know then that Hydro-Québec is not a seller as we are known now, but a buyer. That will change the prices."

In recent years, Hydro-Québec has made 40 per cent of its profits selling about 8 per cent of its electricity on the U.S. spot market.

Hydro-Québec had 17 terawatt-hours available for export. That's enough electricity for 1.7-million households for a year.

But higher than expected housing starts in Quebec and the Alouette aluminum smelter in Sept-Îles have absorbed that surplus, leaving 0.7 terawatt-hours for export.

"These are the facts," he said. "They won't change."

kdougherty@thegazette.canwest.com

© Copyright 2004 Montreal Gazette

China firm proposes smelter, power plant

The Star, Malaysia 23-Jan-2004

A company from China has submitted a proposal to the International Trade and Industry Ministry to set up an aluminium smelting plant and power generation facility in Lumut.

Perak Mentri Besar Datuk Seri Mohamad Tajol Rosli Ghazali said the company would take over the site to replace Masco Aluminium Sdn Bhd, the Sino-US consortium that had chosen Tanjung Langsat in Johor instead of Lumut.

“The Chinese are still waiting for the approval from Miti. We support their proposal as the size of the operation and manufacturing capacity will not affect the environment,” he said in Ipoh after attending a Chinese New Year open house organised by the Perak Chinese Assembly Hall and Perak Chinese Chamber of Commerce and Industry yesterday.

He declined to name the company.

Qatar firm, Dubal call off aluminium smelter project contract

MENAFN, Middle East, The Peninsula - 24/01/2004

Doha: United Development Company QSC (UDC) of Qatar and Dubal Smelter Developments FZE (DSD), a wholly owned subsidiary of Dubai Aluminium Company Limited (Dubal), announced on Thursday that DSD's and Dubal's participation in the project for the development of the aluminium smelter at Ras Laffan, Qatar, terminated in December 2003.

The companies did not provided further details on the reasons for the termination or whether the project will go on stream as scheduled in 2006.

UDC said its is continuing the development of the Qatar Aluminium Smelter project consistent with its original plans, and will acquire rights for state-of-the-art aluminium reduction technology from one of the major international companies.

In May last year, UDC and Dubal announced that they had entered into a joint venture to build, own and operate a primary aluminium smelter to be constructed at a Greenfield site in Ras Laffan Industrial City, 80 kilometres North of Doha.

The first metal was slated to be available during the fourth quarter of 2006, while the aluminium smelter was expected to be fully commissioned in the second half of 2007.

According to projections, the smelter initially was to produce 516,000 metric tonnes a year of primary aluminium with the potential to expand in phases to over one million metric tons a year.

The smelter's primary electrical energy requirements is to be met by a dedicated power plant with natural gas supplied from Qatar's huge North Field with proven reserves of 900 trillion cubic feet.

The smelter was to utilise Dubal's CD 26 technology developed jointly with COMALCO Aluminium Ltd of Australia, and was to benefit from Dubal's experience and expertise gained at its Jebel Ali smelter in Dubai, one of the world's leading aluminium smelters.

It was noted, when the joint venture agreement was signed that the project's strength is derived from the combination of the partners' respective abilities with UDC bringing in project development and management skills and favourable Qatar conditions, while Dubal bringing in very successful technical, operation and marketing know-how.

It was anticipated that these capabilities, together with the potential synergies between two world scale smelters, would position the Qatar smelter among the world's lowest cost primary aluminium producers.

UDC was established in mid-1999 as the largest private sector shareholding company in Qatar. Its founders, who own 45 per cent of the company, are among the most successful businessmen and developers in Qatar and the GCC region.

Dubal is one of the world's leading aluminium smelters.

The modern plant in Dubai, consists of six potlines with a capacity of 536,000 metric tons per annum, a dedicated 1,450 MW power station and a desalination plant capable of producing 30 million gallons of fresh water daily.

In Today’s Court Hearing

www.kaiseral.com January 26, 2004

Monthly Update to Customers, Employees, Suppliers, and Friends of Kaiser Aluminum:

Today’s Court hearing was cancelled because of bad weather in the mid-Atlantic states. The cancellation has no practical impact because today’s agenda had been composed of strictly routine matters, for which the Court has the flexibility to issue rulings without the necessity of a hearing. Prior to today’s scheduled hearing, the Court approved the sale of an additional parcel of surplus land near the Mead, Washington, smelter for $7.8 million. The next regular monthly hearing is scheduled for February 23, 2004. The Court has also scheduled a special hearing on February 2 to hear arguments regarding the motions we filed on January 11 regarding retiree medical benefits, hourly pensions, and the collective bargaining agreements.

Sale of Alpart Alumina Refinery

Kaiser announced on January 21 that it has signed an agreement to sell its interests in the 65% owned Alpart alumina refinery in Jamaica to Glencore AG. Subject to several closing conditions, we expect the transaction to close late in the first quarter or early in the second quarter of 2004. In a related move that may have a bearing on the ultimate value of the transaction, the company has filed several Court motions to reject or invalidate certain alumina supply arrangements. The Alpart sale is part of our previously announced plan to explore the sale of commodity assets and represents another step toward our stated goal of emerging from Chapter 11 in mid 2004.

Liquidity Update

Kaiser entered 2004 with liquidity of approximately $180 million.

Jack A. Hockema

President and Chief Executive Officer

SUAL Sale Delayed?

Moscow Times, Russia 27-Jan-2004

MOSCOW (Reuters) -- Aluminum producer SUAL said Tuesday the sale of a stake in its joint venture with Britain's Fleming Family and Partners might be delayed to the fourth quarter of 2004 for technical reasons.

SUAL and FF&P, a private group owned by the Fleming Scottish banking dynasty, last year announced plans to form an international mining firm, SUAL International, and place some of its capital on a Western exchange at the end of 2003 or start of 2004.

"The most likely date for the initial public offering is the fourth quarter of this year," SUAL spokesman Maxim Titov said. "The evaluation of assets to be contributed by the partners continues."

The new company is expected to include SUAL's 21 companies involved in the aluminum business, FF&P's ferronickel project in Cuba and a tantalum project in Mozambique. FF&P, which currently owns 4.9 percent of SUAL International, is expected to increase its stake to 23 percent.

A third partner in the venture will be another private firm, Access Industries (Eurasia), which is to contribute its coal mining assets in Kazakhstan.

Balaton Power's Subsidiary Meets With A Major Aluminum Company

Business Wire (press release) January 27, 2004

HUTHINSON, Kan.--(BUSINESS WIRE)--Jan. 27, 2004--Balaton Power Inc. (OTC Bulletin Board: BPWRF) subsidiary, Continental Resources (USA) is pleased to report meetings were held with a major aluminum company regarding its large Bauxite Project located in Orissa, India. This was an introductory meeting at the aluminum company's request reflecting a high level of interest in the Gandhamardan Bauxite Deposit. This meeting concluded with an understanding that a conference call would occur to initiate negotiations.

The Gandhamardan Bauxite Deposit situated on the eastern side of India south of Calcutta has proven reserves of approximately 230 million metric tons of metallurgical grade bauxite averaging 45.75% A1(2)O(3) and 2.23% SiO(2). The Gandhamardan is the second largest bauxite deposit in Asia and is similar in all respects to the largest deposit in India, which is currently being mined by National Aluminum Co. (NALCO).

As previously announced Continental is currently awaiting the documents that amend its original agreement with Orissa Mining Corp., which conveys to Continental a maximum of 89% of the mining phase and 100% of the down stream facilities (alumina plant and aluminum smelter).

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

Contacts KTM Consulting Inc. Kevin McKnight, 516-561-6620

Alumina expected to report NPAT of $250m

Sydney Morning Herald, Australia January 28, 2004 - 8:05AM

Aluminium group, Alumina Ltd is expected to report a net profit for 2003 of between $248 million and $265 million, driven by higher alumina commodity prices and increased volumes.

Alumina was spun off from the former WMC Ltd and has as its sole asset a 40 per cent stake in the Alcoa World Alumina and Chemicals (AWAC) joint venture.

While Alcoa disappointed US analysts with its December quarterly profit report earlier this month, its alumina and chemicals division showed a strong result.

UBS said while AWAC's profit before tax in US dollars was expected to rise 12 per cent, the fluctuating exchange rate meant the profit in Australian dollars would increase just one per cent.

"We are forecasting Alumina Ltd's share of profit before tax to be $387.5 million," UBS head of resources research Glyn Lawcock said.

A poll of eight analysts has forecast a net profit after tax for Alumina of between $245 million and $265 million with a market consensus of $250 million.

Alumina Ltd posted a first half net profit of $117.9 million.

Analysts are predicting a final dividend of between 10 and 12 cents fully franked.

With an interim dividend of 10 cents, this would make a full year dividend for 2003 of between 20 and 22 cents.

"Alumina provides a high return and fully franked dividend from its direct exposure to alumina which is experiencing strong growth in demand, particularly due to increased Chinese demand," Goldman Sachs JBWere analyst Ian Preston said.

Mr Preston, who has forecast a net profit of $264 million, said his brokerage would be looking out for comments on the status of plans to acquire a stake in Middle Eastern aluminium smelting group Alba's smelter in Bahrain.

Alcoa has signed a memorandum of understanding to acquire up to a 26 per cent interest in the Alba smelter.

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

Citigroup said its $260 million estimated earnings after tax included a 20 per cent increase over the first half result.

"(This is) driven by a higher alumina price and increased alumina volume," the brokerage said.

RusAl invests $45 mln in Tajikistan smelter

Interfax, Tajikistan 28.01.2004

Moscow. (Interfax) - Russian Aluminum giant RusAl spent $45 million on upgrades and working

capital at the TadAZ aluminum smelter in Tajikistan last year.

RusAl said it signed long-term agreements with the smelter in 2003 to supply raw material

and sell finished products.

TadAZ is Central Asia's only aluminum smelter. Capacity is 517,000 tonnes of primary

aluminum per year.

RusAl is one of the world's top-three aluminum companies.

Alumina under the hammer

Brisbane Courier Mail, Australia 29jan04

SHARES in Western Mining spin-off Alumina Ltd – Alcoa Inc's partner in a venture supplying a quarter of the world's alumina – fell 6.5 per cent after it reported full-year profit rose less than some analysts had expected.

Net income rose to $236.9 million in the December year from $174.5 million Alumina said.

Analysts on average expected profit of $246.9 million.

The Australian dollar's 34 per cent rise against the US dollar last year curbed gains from higher commodity prices at Alumina.

"The Aussie is what the market is focusing on," said AMP Capital Investors fund manager Gary Armor. "The result was a bit below the consensus."

Alumina shares fell 38¢ to close at $5.50 – their lowest since October 6.

The surge in the Aussie dollar cut $118 million from Alumina's profit, chief financial Officer Bob Davies said. Alumina had to revalue some of its assets, reducing profit by $25 million, while its share of earnings from the joint venture with Alcoa was cut by $93 million, he said.

Each US1¢ move in the Aussie affects net profit after tax by $11.4 million. Mr Davies said the company did not plan to hedge against further gains in the Aussie dollar.

Alumina received a $284.2 million dividend from its Alcoa World Alumina Chemicals joint venture with Pittsburgh-based Alcoa, up from $281 million a year earlier. It said it would pay a 10¢ final dividend.

Including interim dividend, the company is paying out total dividend of 20¢ for 2003, compared with 18¢ previously.

Alumina owns a 40 per cent stake in the venture, which is better known as AWAC, with Alcoa, the No. 1 aluminum maker, owning the remaining 60 per cent.

Demand for alumina, which is smelted to make aluminium, remained strong, said CEO John Marlay. Prices were likely to remain high in 2004.

Metal demand is expected to rise by more than 7 per cent globally in 2004, with production of alumina expected to rise by 4.5 per cent this year.

RUSAL Reports Continued Production Growth and Cost Reductions in 2003

Business Wire (press release) January 28, 2004

http://home.businesswire.com/portal/site/google/index.jsp?ndmViewIdnews_view&newsId2004012

8005303&newsLangen

MOSCOW--(BUSINESS WIRE)--Jan. 28, 2004--RUSAL, one of the world's leading aluminium

producers, today reported continued growth across all product groups and significant cost

reductions for 2003 as the company continued its modernisation programme and efficiency

drive.

RUSAL's primary aluminium production rose in 2003 by 4.3% to 2,588,931 tonnes compared to

2002, helping the company to maintain its leading position among the world aluminium majors.

.Substantial progress was made in reducing reliance on contract raw materials. Approximately

60% of RUSAL's smelters needs in alumina were covered by RUSAL-managed sources in 2003,

compared with 46% in 2002. The company anticipates this rising to 63% in 2004.

The emphasis on building direct long-term relationships with customers helped RUSAL to

consolidate its sales: over 60% of RUSAL sales are now via direct contract with customers.

The re-orientation towards a market-driven strategy successfully resulted in a 12% rise of

value-added casthouse products. As part of its ongoing quality control, the company

introduced new LME-registered aluminium RUSAL brands.

Commenting on the results Alexander Boulygine, CEO, said, "I am pleased with the company's

performance in 2003. We have continued the growth trend across all our product groups,

successfully established long-term relationships with our customers and managed further cost

efficiencies. On the domestic front, we have taken active measures to secure our energy and

transportation costs, including an agreement with the Russian Railways Ministry to fix our

railway tariffs until the end of 2011.

"I am particularly excited about the new smelter at Sayanogorsk, which is the culmination of

our consolidation efforts over the past three years. This expansion demonstrates the belief

we have in the future of our business, as it will be the first smelter built in Russia in

the past 15 years. "

Turning to the company's outlook for 2004, Mr Boulygine continued: "Our focus for 2004 will

be on strengthening our raw materials base, continuing to expand our market share in all our

product groups and developing our technological expertise."

RUSAL's revenues increased by over 12% to $4.5 billion from $4.0 billion in 2002. Sales

outside the Russian Federation accounted for $3.7 billion ($3.4 billion in 2002). The

contributing factors for the improvement were a 4.3% rise in aluminium production, improved

product mix and sales margins and an almost 6% rise in average LME aluminium prices. Capital

expenditure for 2003 rose to $230 million from $160 million in 2002.

RUSAL raising its efficiency

RUSAL's cost efficiency programme realised further cost reductions. Energy costs continued

to increase slowly and an integrated energy saving programme at the smelters and the Achinsk

alumina refinery led to energy savings worth $5 million. The Novokuznetsk smelter entered

the Russian Federal Wholesale Electricity Market in October and so far has reduced its

energy costs by 4%. RUSAL has also reduced the risks of on-going Russian energy system

reforms by securing long-term direct agreements with regional energy companies.

RUSAL's comprehensive restructuring programme continued to increase the efficiency of

operations and maximise asset values. This programme includes divestiture of non-core

businesses and reorganizing auxiliary operations, some of which are to be divested as well.

The creation of RUSAL Service Centre allowed the consolidation of 80% of the servicing and

maintenance functions at RUSAL plants. This has helped standardize operations (i.e. reduce

the number of cell types), increase quality and efficiency as well as optimise costs. Some

maintenance services such as electrical and power equipment repair as well as general repair

and construction services have been outsourced.

The restructuring programme contributed to a 2003 workforce reduction of 9.1%, bringing

total employment to 63,000 compared with 69,400 in 2002.

Modernisation: The guarantee for further growth

RUSAL cemented its efforts in guaranteeing future production growth through the

modernisation of existing production facilities and developing brownfield projects. The

smelter modernisation programme continued apace with cell amperage rises at all RUSAL's

smelters, conducted by the newly created RUSAL Engineering and Technological Centre (ETC).

This enabled the Sayanogorsk and Krasnoyarsk smelters to post a 10% and 4.5% production

improvement on figures for 2002 respectively.

Dry anode technology was introduced in the pot lines at the Krasnoyarsk, Bratsk and

Novokuznetsk smelters and new dry scrubbers installed at the Krasnoyarsk smelter. Along with

increased operational efficiencies, this will also help to reduce the environmental impact

of the operations.

The feasibility studies for upgrading the Sayanogorsk and Krasnoyarsk aluminium smelters

were completed. Hatch, the Canadian engineering company also completed the feasibility study

for RUSAL's most ambitious and cost-effective project, the construction of the 300 000t/y

Sayanogorsk smelter extension, which is the first major aluminium expansion in Russia for

the past 15 years. Construction will start in 2004.

Continuing its drive for technological excellence, RUSAL acquired Russia's leading research

organisation All-Russian Aluminium and Magnum Institute (VAMI). This will help strengthen

the company's R&D potential together with RUSAL ETC.

The ETC's efforts last year resulted in the development of the first Russian-made 300 kA

cell at the Sayanogorsk smelter, which was tested during the year. This sets a new standard

for power consumption and longevity.

Other highlights

Changes in RUSAL's ownership structure took place last year representing the acquisition of

a further 25% stake in the company by shareholder Basic Element from shareholders

represented by Millhouse Capital, raising BasEl's ownership to 75%.

There was a significant increase in bauxite and alumina production from the Guinea

operations due to the integration of the Friguia Alumina Refinery. Improved labour

productivity at the Compangnie de Bauxites de Kindia refinery led to a 13% rise in

production.

Construction of ROSTAR-Vsevolzhsk can plant was completed in December 2003. It has a planned

capacity of 1,700 million 0.5 liter cans a year.

Starting in April 2003 RUSAL supplies the Tajik Aluminium smelter (TadAZ) with alumina and

helps the plant to sell its primary aluminium, which allows the company to benefit from low

energy production costs. RUSAL also participated in the plant's modernisation by investing

$45 million of working capital.

Outlook for 2004

RUSAL forecasts a strong year for aluminium consumption growth in 2004 with overall demand

increasing by between 5 - 7 %. Western markets are forecast to post modest growth of 4 - 5%

while Chinese demand growth of 15 - 18% will be met in full by increased domestic

production. Globally, the automotive and packaging sectors will remain strong whereas, in

North America, construction related demand will continue the positive trend of 2003.

RUSAL will continue to position its sales to leverage its developing production

capabilities. In 2004, value added products will comprise 32% of the primary aluminium sales

mix with a resultant reduction in commodity exports of 112,000 tonnes compared to 2003. With

over 60% of sales contracted directly with consumers, channels to market will be further

developed in 2004.

The Friguia refinery in Guinea will expand its capacity by 1,400,000 tonnes.

Construction of the Sayanogorsk expansion will begin with the laying of foundations. The

expansion is due to be completed by March 2006 at a cost of roughly $700 million.

Industrial production will begin in the end of January at the $72 million ROSTAR-Vsevolzhsk

aluminium can plant, which will meet the growing needs of the Russian beer and soft drinks

industry.

Dry anode technology installation will continue next year with the main focus on the

Krasnoyarsk smelter, where the launch of a $100 million investment program is expected to

result in a 55,000-ton production rise, together with reductions in harmful emissions.

RUSAL intends to develop a new alumina sintering technology for low grade bauxites as an

alternative to Bayer. This will substantially reduce production costs. VAMI and RUSAL's

Engineering and Technological Centre will also work on new cell technology and new 320 kA

cell design, which it aims to trial by the middle of 2005.

Consolidation of RUSAL is expected to be completed by redemption of the plants' stocks from

minority shareholders.

The restructuring programme started in 2003 will continue, with more auxiliary services

(high-voltage gear repair and diesel machinery production and repair) to be outsourced. This

will lead to further reductions in personnel.

Note:Article is longer but tables did not cut & paste well. Check URL above for full article [Willem]

Alba success in spotlight

Gulf Daily News, Bahrain - Jan 27, 2004

Jordanian Ambassador Luay Khashman visited Alba to tour the smelter and meet with members of

the executive management team. Mr Khashman, who was accompanied by First Secretary Ehsan

Saad Yousif and cultural attaché Ahmed Hommdeh, was met by Alba general manager

administration carbon and cast house Mahmood Al Daylami.

Mr Al Daylami outlined Alba's expansion over the past 32 years into one of the largest, most

efficient aluminium smelters in the world and its growing economic and social contributions

to Bahrain's development.

"Alba last year produced over 530,000 tonnes of aluminium and maintained metal purity levels

at 99.88 per cent to help earn Bahrain global recognition for its industrial standing," said

Al Daylami.

The delegation also met Alba chief executive Bruce Hall and the executive management team.

Mr Hall briefed the delegation on Alba's activities and its strategic plan with particular

emphasis on $ 1.7 billion Line 5 Expansion Project, which will make the smelter the largest

in the word outside Eastern Europe.

"Alba currently represents between seven and eight per cent of Bahrain's Gross Domestic

Product," said Mr Hall. "When the Line 5 expansion is completed in 2005, Alba's contribution

is expected to rise to between 10 and 12 per cent of the GDP," he said.

Commonwealth reports fourth-quarter loss after charges

Louisville Business First, KY 1/29/04

Commonwealth Industries Inc. (Nasdaq: CMIN) reported a fourth-quarter net loss of $25.6 million, or $1.60 per share, compared with net income of $6.4 million, or 40 cents per share, during the fourth quarter of 2002.

The results for the latest quarter include a charge of $29.6 million, or $1.85 per share, resulting from impairment of the carrying value of goodwill relating to the company's electrical products business, according to a news release. The quarterly results also included a gain of about $5.6 million, or 35 cents per share, relating to certain aluminum "hedge transactions."

Revenue for the quarter rose to $244.8 million from $238.7 million a year earlier.

For the year, the company reported a net loss of $31.1 million, or $1.94 per share, diluted, compared with a net loss in 2002 of $16.2 million, or $1 per share, diluted.

Revenue for the year fell to $920 million from $966.2 million in 2002.

© 2004 American City Business Journals Inc.

Azerbaijan to boost aluminum exports 60%-70%

Baku Today, Azerbaijan 29/01/2004

Azerbaijan aims to boost aluminum exports 60%-70% from $58 million in 2003 to $95 million this year to offset the rising cost of raw material imports, Ali Ozkurt, chairman of the board at Azerbaijan Aluminum, the national aluminum corporation, told Interfax.

Azerbaijan Aluminum, which is under the management of Dutch company Fondel Metal, will have to more than double raw material imports to $45 million-$50 million, Ozkurt said.

"The company imports bauxites, and these are subject to VAT from January 1, 2004," Ozkurt said. "This will cost us $1 million a month. This is not benefiting us as we could be investing the money in production," Ozkurt said.

Azerbaijan Aluminum has asked the government to exempt it from VAT on raw material imports.

He said that Fondel Metal, which signed a 25-year deal to manage the company in 2001, pledged to invest an initial $42 million, followed by $65 million during the second stage of its program and $220 million- $250 million during the third stage. The Dutch company plans to invest up to $1 billion in total.

Azerbaijan Aluminum includes the Ganja alumina refinery, Sumgait smelter and Zaglik alunite quarry.

Baku. (Interfax)

Indal plans to expand smelter capacity

Business Standard, India January 30, 2004

Captive power for Hirakud, Kerala plants; to invest Rs 700 crore

Our Bureau in Kolkata

Indian Aluminium Company (Indal) is planning to invest Rs 700 crore over the next two years to set up two captive power units and expand smelting capacity.

S K Tamotia, chief executive officer of Indal, said the company was looking at building a 100 mw unit at its Hirakud plant in Orissa and another 40 mw plant at its Kerala unit.

“We are also weighing options to expand smelting capacity at Hirakud by 35,000 tonne,” he said.

While the captive units will cost around Rs 350 crore, the capacity expansion will cost a similar amount. The expenditure would be met by internal accruals, Tamotia noted.

Rising cost of power is a serious concern for the company as electricity is a critical raw material for smelting process.

The company’s Kerala plant is lying idle as the state electricity board jacked up the electricity tariffs.

“For us Rs 2.5 per unit is viable, while the SEB was offering Rs 3.35 per unit. We have given three options to the Kerala government. Either it should allow to set up a captive power plant or give permission to wheel electricity from Power Trading Corporation (PTC). If they object to both the plans, we should be given a green signal to close down the plant permanently,” Tamotia said.

The company claimed that it can produce electricity below Rs 1.5 per unit at its captive plant. Asked if the state government has responded to proposals, he said company was still waiting for a reply.

At Hirakud, Indal has a 67.5 mw plant and it is setting up another 100 mw plant there to meet the present requirements.

“When we expand the capacity to 100,000 tonne from the current 65,000 tonne, another 100 mw plant would be set up,” he informed.

The company has also sought permission for wheeling power to its plant in Belur, West Bengal, from Hirakud. “We will require merely 8 mw of electricity at Belur,” he said.

Asked about possible merger with Hindalco, he said it might not be needed if VAT came into being. “In any case, the Indal brand will continue since it demands good premium in the market,” he noted.

Ormet files Chapter 11 bankruptcy

Times Picayune, LA By VICKI SMITH

The Associated Press 1/30/04 4:23 PM

MORGANTOWN, W.Va. (AP) -- Less than a month after laying off 300 workers and shutting down parts of its operation in Hannibal, Ohio, aluminum maker Ormet Corp. has filed for Chapter 11 bankruptcy protection.

R. Emmett Boyle, the owner, chairman and CEO, said Wheeling-based Ormet has been hurt by low metal prices, weak demand, high energy costs and rising medical benefit costs.

"While prices of aluminum and alumina have recently rebounded, those increases are not sufficient to offset the impact of the conditions that have existed for the past four years," he said Friday.

Ormet, a privately held, 47-year-old company, has about 2,600 employees in five states. The Hannibal reduction mill is the largest operation, with about 1,136 employees, including some on the corporate side, company spokeswoman Laurie Leonard said. The Hannibal rolling mill employs an additional 633.

A marine terminal and alumina division in Burnside, La., employs 276 workers, while the Jackson Coated & Foil Division in Jackson, Tenn., employs 181.

Ormet's Ben's Run recycling facility in Friendly, W.Va., has about 30 people, Leonard said, while a subsidiary, Specialty Blanks Inc. of Terre Haute, Ind., has 79.

Ormet filed with the U.S. Bankruptcy Court for the Southern District of Ohio after a year of negotiations that failed to produce an out-of-court restructuring agreement with creditors.

Its plants will remain open while it reorganizes, operating with a $210 million debtor-in-possession financing package from GE Corporate Financial Services and another investment fund.

Coupled with the cash it has on hand, Ormet will be able to meet its salary and benefit obligations, and process vendors' bills as usual, Boyle said.

David McCall, district director for the United Steelworkers of America, said company officials informed him Friday morning of the plan to file for Chapter 11 protection, and union attorneys were in court to make sure contracts are protected, along with the health care coverage and pensions of Ormet retirees.

The Hannibal employees are covered by a labor agreement that expires in March, and the USWA had been in ongoing negotiations with the company for a new contract.

"Obviously, we're not happy about it," McCall said of the filing. However, "bankruptcy doesn't necessarily mean the end of a company."

Part of the reason for the Chapter 11 filing was a one-time $10 million expense to restart the alumina division in Burnside, La., and rehire 230 employees, Boyle said. While an outside lender had initially agreed to fund that project, that lender later backed out.

Boyle said he's confident Ormet will remain viable and emerge from Chapter 11 a stronger company.

Thousands demonstrate against closing of Alcan's Saguenay, Que. smelter

Calgary Sun, Canada 31-Jan-2004

SAGUENAY, Que. (CP) - About 5,000 people demonstrated against the closing of an Alcan Inc. smelter on Saturday, demanding that the company respect agreements already made with the union.

Henri Masse, president of the Quebec Labour Federation, travelled to march with the workers in Saguenay, located about 200 kilometres north of Quebec City.

"The message is simple - that Alcan respect its promises," Masse said.

"There are long-term agreements with the union . . . (They) provide for preservation of employees and operations. Alcan is breaking its promises."

The 60-year-old smelter, was to close by about 2014, following the opening of a more efficient smelter in the same region in 2001.

But last week, Alcan said the rapid rise of the Canadian dollar would force them to shut down the smelter this spring, cutting 550 jobs.

Saguenay's Mayor Jean Tremblay told the crowd the demonstration was "just the beginning."

Workers have occupied the plant since last Tuesday.

Quebec's Labour Relations Board ruled late Friday that their actions were illegal.

The Alcan labour union, affiliated with the Canadian Auto Workers, had not responded to the ruling on Saturday.

Montreal-based Alcan (TSX:AL) is the world's largest aluminum producer after its recent takeover of Pechiney of France, completed last month for $6.3 billion.

Burnside plant files for bankruptcy

Baton Rouge Advocate, LA 31-Jan-2004

Ormet says no layoffs planned

By CHRIS GAUTREAU cgautreau@theadvocate.com Advocate business writer

Ormet Corp., which operates an alumina plant in Burnside, announced a restructuring plan Friday that includes a filing for Chapter 11 bankruptcy protection.

Citing a weak market for its products, the company said it will reorganize about $225 million of its debt.

Laurie Leonard, a spokeswoman for the privately held company based in Wheeling, Va., said no layoffs are planned for its 2,600 workers in Louisiana, Indiana, Ohio, Tennessee and West Virginia.

Ormet has a staff of 230 in Burnside, where it recently re-opened an alumina plant.

Part of the reason for the Chapter 11 filing was a one-time $10 million expense to restart the alumina division in Burnside and rehire employees, said Ormet owner and Chief Executive Officer R. Emmett Boyle.

While an outside lender had initially agreed to fund that project, that lender later backed out.

Alumina is a powder refined from bauxite used to make aluminum.

Boyle said that for the past four years, Ormet has been battling weak demand, overcapacity, low prices, high energy costs and soaring medical benefit costs.

The same problems with weak demand and high energy costs have plagued the chemical industry in general.

A number of Baton Rouge-area plants have reduced or shut down production and trimmed their work forces to cut costs.

The manufacturing sector in East and West Baton Rouge, Ascension and Livingston has lost 1,000 jobs in the past year, of which 700 jobs are in chemical manufacturing.

Boyle said Ormet has arranged for $210 million in financing, a $160 million revolving credit line and up to a $50 million loan.

"I want to emphasize that Ormet is open for business, remains operationally strong and will continue to be a reliable supplier of ... aluminum products," he said in a release.