AluNews - November 2005

Alcoa OKs US$30mn investment in Pernambuco - Brazil

BNamericas, Chile Thursday, December 1, 2005

US aluminum producer Alcoa (NYSE: AA) has approved a US$30mn investment to boost hot-rolled capacity at its Itapissuma plant in northeast Brazil's Pernambuco state, the company said in a statement.

Investment will increase production capacity by roughly 30% by 2007 to 45,000t from 35,000t, Alcoa said. The plant also manufacturers extruded products and plastic lids.

"The hot-rolled business has a top position among Alcoa's operation units in terms of foil production for the demanding and competitive packaging industry," Alcoa Latin America executive director Michael Humpert said.

Alcoa has invested US$150mn since the early-80s in the Itapissuma factory, which creates 1,100 direct jobs.

Alcoa Obtains Low-Impact Hydropower Certification; New Upgrades Increase Generating Capacity

CSRwire.com (press release) 12/01/2005

(CSRwire) Alcoa (NYSE:AA) announced today that the independent, non-profit Low Impact Hydropower Institute (LIHI) has certified Alcoa Power Generating Inc.'s (APGI) Tapoco hydroelectric project as an environmentally-responsible, low-impact hydropower project that meets and exceeds the most stringent operating requirements recommended by expert state and federal resource agencies.

APGI's Tapoco project is the largest hydropower project to be certified by LIHI on the east coast and is the first to receive an eight-year certification in recognition of meeting special watershed management criteria. The project consists of four powerhouses and four dams in eastern Tennessee and western North Carolina totaling 350 megawatts (MW) of electric generation capacity, which power Alcoa Tennessee Operations near Knoxville.

The certification comes on the heels of APGI's recent completion of its second turbine upgrade at the Calderwood powerhouse in eastern Tennessee, which resulted in 14 MW of additional peak generation capacity. When the third and last turbine at Calderwood is upgraded in mid-2006, Calderwood's total demonstrated capacity will increase by 42 MW.

"This project is part of Alcoa's commitment to increase the use of natural, renewable energy sources such as hydropower that help lower emissions and reduce contributions to global warming," said Kevin Anton, president, Alcoa Materials Management. "In addition to increasing Calderwood's capacity by 37 percent, the new turbines improve efficiency and generate up to 6 percent more energy with the same water flow. By increasing the capacity and efficiency at Calderwood without constructing new dams, Alcoa is bringing additional renewable energy to the region while reducing dependence on electricity generated by fossil fuels."

The Calderwood powerhouse is currently undergoing upgrades as part of Alcoa's overall $187 million program to improve the Tapoco hydroelectric system. The program began in 2002 and involves upgrading a total of 13 hydroelectric generating units and other system infrastructure over a 15-year period.

As one of the founding members of the Green Power Market Development Group convened by the World Resources Institute (WRI) in 2000, Alcoa is one of 13 leading corporations seeking to develop corporate markets for 1,000 MW of new green power. The incremental 42 MW at Calderwood is part of nearly 360 MW of green power resources the group has caused to bring about to date. Earlier this year, the U.S. Federal Energy Regulatory Commission granted a 40-year relicense for the Tapoco project.

LIHI certification is a voluntary program designed to help identify and reward hydropower dams that meet LIHI's strict criteria that measures water quality, watershed protection, fish passage and protection, threatened and endangered species protection, river flows, recreation and cultural resource protection.

The evaluation process includes a public comment period, review by an independent technical consultant, consultations with state and federal natural resource agencies, evaluations, and a decision by the LIHI governing board, which is comprised of leaders from a number of environmental organizations including the National Resources Defense Council, American Rivers, and Union of Concerned Scientists.

Commodities: Aluminum at 10-year high as copper reaches record

International Herald Tribune, France Bloomberg News FRIDAY, DECEMBER 2, 2005

By Xiao Yu and Danielle Rossingh

LONDON Aluminum prices rose on Thursday to their highest level in a decade after 23 smelting companies in China, the biggest producer of the metal, agreed to cut output by 10 percent.

The smelters, which produce more than 60 percent of China's aluminum, will reduce production to cut demand for the raw material alumina, a white powder refined from bauxite ore, and force suppliers in countries like Australia to lower prices, the China Nonferrous Metals Industry Association said. Rising raw material costs have caused losses at 80 percent of the smelters.

Prices of aluminum, a lightweight metal used in aircraft and beverage cans, have risen 19 percent in the past year.

Aluminum for three-month delivery on the London Metal Exchange rose as much as $43, or 2 percent, to touch $2,182 a ton, the highest since January 1995. The metal later eased to $2,175 in afternoon trading.

Mozal holds back on aluminium expansion on pending power talks

Metals Place, UK -Source: Platts DEc 2, 2005

Mozambique's smelting giant, Mozal, is missing out on making profits from booming aluminium prices because it is unable to secure the cheap power it needs to increase production.

Local newspapers has reportedly said that Mozal was about to double its production capacity to 500,000 mt/year production.

The superintendent of finance for Mozal, Martin Gayson, however, said that there was little hope of expansion in the foreseeable future as the company, owned by BHP Billiton, was still in talks with the South African power company, Eskom. Smelters like Mozal consume roughly the same amount of electricity as a fair sized city and need a constant supply of cheap power to make profits in a highly competitive business.

"It is no secret that Mozal wants to expand, everyone wants to now because the prices for aluminium are doing pretty well, this week it touched a high," he said, adding: "But we can't do anything without cheap power and Eskom seems to have a shortage of it at the moment so we are still in talks with them."

Eskom, however, claimed this week that it was moving closer to satisfying Mozal.

Fani Zulu, the spokesperson for Eskom from the power generator's headquarters in Johannesburg, said that the company was at a late stage of preparation of a new proposal to the owners of Mozal.

"Letters have been drafted and the numbers have been finalized; the new proposal should not take more than one week to be delivered," he said.

BHP Billiton is in a good position to take advantage of rising aluminium prices in that it has its own supply of alumina and has more than it needs at a time when demand is high. Spot prices for alumina are up to around $560/mt currently from $330/mt in the middle of 2004.

Troye Brady, a metals analyst with Nedcor Securities, said that aluminium prices were on a 16-year high and were likely to go up even more. "We do think the price may cool down next year, but we believe that at first it will accelerate," he said.

Brady added that the price would be supported by low inventories at the London Metals Exchange, which he estimated at around 622,000mt or about 10 days worth of supply. He also said that the changes in export policy in China, aimed at dampening the country's raging economy, were likely to increase the scarcity of aluminium.

Mozal exports aluminium from the port of Maputo to Europe. An eyewitness at the Matola terminal last month saw workers working overtime moving vast shipments of aluminium into container ships.

More than 90% of the aluminium smelted in southern Africa is for export.

Report suggests JVS between China's aluminium, power producers

Metals Place, UK Source: Asia Pulse dec 2, 2005

China's National Development and Reform Commission (NDRC) has released a report titled the 'Situation and Prospects for Main Nonferrous Metals Industries,' suggesting that electrolytic aluminium producers should tie up with electric power plants to set up joint ventures to sharpen competitiveness.

The report outlined prospects for the electrolytic aluminium production in 2006.

It urged electrolytic aluminium producers to carry on restructuring with both upstream and downstream enterprises to form proper industrial chains covering alumina, coal, power, electrolytic aluminium and aluminium processing, so as to lift their competitiveness and enhance their risk prevention capacity.

Besides, it encouraged electrolytic aluminium producers to set up affiliated companies by joining hands with power-generating plants. Therefore, they would use electricity directly transferred by its partner power generator and cut down costs.

Electrolytic aluminium production is one of the most power-consumption sectors, with the cost in electric power accounting for some 40 per cent of the total, the same as that for buying alumina. It takes 150,000 kWh of electricity to produce one ton of electrolytic aluminium, and China is expected to produce 75 million tons of electrolytic aluminium by 2005.

The report said that at an electrolytic aluminium production seminar initiated by the NDRC in May this year, all the electrolytic aluminium producers had reached a common understanding that the price hike of electric power in the first quarter of this year was one of the main reasons for their profit decline.

Experts predicted that the power shortage will be largely eased during the 11th Five-Year Program period (2006-2010), and the supply may even exceed the demand. It may offer a good environment for the operation of such aluminium-power affiliated companies.

Romania: Alum Tulcea Invests $2.3 mln in Environmental Projects

Reporter.gr, Greece 14:42 - 02 December 2005

Alum Tulcea alumina producer invested this year $2.3 mln in the program of compliance with the environmental norms, settled with the Environment Protection Agency.

Alum finalized 92% of the investments agreed with the authorities within the said program.

The investment program is a part of the strategy on the environment protection enforced by Alro, the owner of Alum.

The company aims at the compliance of the alumina producer with the environment obligations settled by the European Union.

The program also aims at increasing the alumina production up to approximately 1 mln tons, the aluminium production up to 420,000 tons and of alloy sales to 120,000 tons by 2009.

German energy regulator allows RWE to give discounts to Corus, Trimet

Forbes AFX News Limited 12.02.2005, 02:17 AM

FRANKFURT (AFX) - Germany's energy regulator RegTP has allowed RWE AG to give electricity price discounts of up to 50 pct to two aluminium producers -- Trimet and Corus -- and two other companies, Die Welt newspaper said, citing a RegTP decision.

It said yesterday's decision would help reduce costs of the companies and 'improve conditions' in their production facilities.

The two other companies which will receive the discounts are Ruhr-Zink GmbH and Ruhr-Oel GmbH, the decision said.

mog/lam

Bauxite over a lost horizon

Australian, Australia -December 05, 2005

A huge gulf separates Cairns and Aurukun, writes Andrew Fraser

THE Shangri-La Hotel occupies probably the best position on the Cairns waterfront, looking out towards lush rain-forested mountains running down to the sea while in the foreground are the tropical waters of Trinity Inlet housing the super-cruisers of the ultra-rich.

But for the mining companies and their advisers who have had to visit the Shangri-La in the past two weeks, the view and the ambience is secondary to the very real practical problem of how to form a relationship with the Aboriginal groups who own the massive bauxite deposits at Aurukun on the western side of Cape York.

The gap between the luxury hotel in Cairns and the conditions on the ground at Aurukun, some 1500km to the northwest, is immense. And bridging that gap means going through a process the likes of which none of these companies has ever been through before.

For as Richie Ah Mat, one of the negotiating team for the Aurukun people, says, "There are two keys to the lock that's on those minerals. The Government has one key, but we have the other. And you don't get the minerals without having both keys."

What this means in practice is that the Queensland Government will listen very closely to what the Aborigines want. And what they want is not just a one-off payment, but an ongoing stake in the future development of the 650 million tonnes of bauxite worth potentially $2 billion sitting in their tribal lands at Auruken.

Inside the Shangri-La, the miners are asked by a negotiating committee from Aurukun not only about their plans to mine the bauxite, but what they can do for the people of Aurukun.

The miners are not facing a bunch of unsophisticated Aborigines from a remote part of Australia. On their side of the table is Mark Carnegie, part of Carnegie Wylie, one of Australia's top boutique corporate advisers, while Steve Bredhauer, a former minister in Queensland's Beattie Government and a member for the area which contains the deposits, is the probity auditor. The 10 companies tendering for the project represent a strange mix of mining giants and state-run institutions. Huge international producers Alcan, Alcoa, BHP Billiton and Rio Doce Australia (the Australian arm of giant Brazilian miner Companhia Vale do Rio Doce) are there, along with the Chinese aluminium company Chalco, Russian group SUAL, India's Hindalco and Mitsubishi of Japan. Little is known about the other two on the list -- Hydro Aluminium and InterTech Systems.

The negotiations run on two broad themes, the first concerned with the sustainable development plan for the region, while the second concerns how they would actually operate the mine.

There is strict secrecy surrounding the process -- indeed, the 10 mining companies have been told that not only can they not speak to the media, but they also cannot speak to any politicians, their advisers or even public servants about the process, the only exception being in searches for public records.

Mr Ah Mat is the main spokesman for the Aboriginal side in the negotiations. A descendant of the Yupangathi group whose traditional lands are now mostly inhabited by Comlaco and Alcan mining leases, he has been involved before in negotiations with mining companies.

He said last week that for the Aboriginal groups, "there's a new bar to be set" in terms of what they wanted out of the process.

"I was involved in the Alcan agreement at Elay and some negotiations with Comalco, but all that's in the past. We want a better deal this time," he said.

"There's a huge boom going on at the moment and people want that bauxite. That's fine, but the black fellers have been left outside with the crumbs.

"If we don't get a fair and just deal, then those resources will stay in the ground for another 20 years."

Mr Ah Mat would not reveal what the negotiating team were asking for, but said "at this stage, we're mainly interested in forming a relationship. We want them to say what they can do for us. It's not just about money".

The whole process is an extravaganza of democracy. The bauxite deposits are technically owned by the Aurukun Council, and at a general meeting in Aurukun three weeks ago, the negotiating team, which includes the Aurukun mayor, Neville Pootchamunka, the chief executive, Gary Kleidon, and several other locals plus more experienced negotiators such as Mr Ah Mat, was endorsed by the locals.

The process stands in stark contrast to what happened before. Back in 1975, the government of Joh Bjelke-Petersen introduced special legislation to grant the leases to a consortium of mining companies that included French firm Pechiney, which finished up as sole holder of the lease.

The Aborigines were cut out of negotiations completely and objected strenuously through an ultimately futile legal attempt led by future premier Wayne Goss.

As well as satisfying the Aboriginal owners of the land, the mining companies also need to satisfy the Government. Their conditions are more clear -- they want a refinery with an output of at least 600,000 tonnes a year to be built somewhere in Queensland, and if possible, an aluminium smelter as well.

The companies have until the end of January to submit detailed proposal to the Queensland Government and the winner is expected to be announced in the middle of next year. The first obligation of the winner will be to pay up $12 million towards the Government's exploration costs and also provide a $15 million contract performance guarantee.

But for any company that can get a bauxite deposit in the current climate of strong demand, the process is well worth going through. And when it's finished, they might even be able to enjoy the view from the Shangri-La.

Brazil Alcoa Aluminio to invest $30 million in sheet plant

Source: Dow Jones DEc 5, 2005

Alcoa Aluminio, the Brazilian unit of U.S. aluminium giant Alcoa (AA), will invest $30 million to expand production of fine aluminium sheets by 30% at its plant in the northeastern Brazil city of Recife, the company said in a statement.

"The flat product business occupies a premium position among the operational units of Alcoa in the production of fine sheets for the demanding and competitive packaging market," Alcoa Latin America President Michael Humpert said in the statement.

The project at the Itapissuma plant, which produces fine aluminium sheet for use in the packaging industry, is expected to be completed by 2007, the company said.

"Our primary focus has been in segment for fine sheets, with widths between 6 and 10 microns, destined for the long-life, food and pharmaceutical packaging. It is with our focus on these segments that we decided to go ahead with the expansion at Itapissuma," Humpert said.

In addition to various finished aluminium products at plants throughout Brazil, Alcoa is also the country's No. 3 primary aluminium producer. Alcoa has produced 248,100 metric tons of primary aluminium in the first ten months of the year, a 2.1% increase over the year-ago period.

Alcan Signs MOU for Long-Term Extension and Restructuring of Sebree Smelter Electricity

Finanzen.net, Germany 06.12.2005 23:32:00

HENDERSON, Kentucky, December 6 /PRNewswire/ --

Alcan Inc. (NYSE: AL , TSX: AL) announced today that it has signed a Memorandum of Understanding (MOU) with Big Rivers Electric Corporation and Kenergy Corporation to restructure and extend the existing electricity service contract for the Sebree primary aluminum smelter from 2007 through 2023.

"This memorandum of understanding is an important milestone in supporting and securing the long-term sustainability of the Sebree smelter and is in the best interests of all concerned partners and the Western Kentucky economy," said Cynthia Carroll, President and Chief Executive Officer, Alcan Primary Metal Group. "Our goal is to ensure a secure supply of competitive energy for the Sebree smelter and we believe that Big Rivers is capable of delivering this expectation," she added.

Following due diligence by all parties and approval from local and state regulators a definitive agreement on the power contract is expected to be signed in the first half of 2006.

The Sebree smelter produces primary aluminum ingots for the North American market, mainly destined for end uses in the automotive, transportation, construction and heat exchanger markets. The smelter has a capacity of 196,000 tonnes per year and is a major employer in the region, with a workforce of approximately 640 people. It is part of Alcan Primary Metal Group's global smelter network of 22 facilities, which produces 3.5 million tonnes of primary aluminum per year.

"This is a positive development for our employees, local communities and the entire region," said Olaf Wigstol, plant manager, Alcan Sebree.

Aluminum industry figures show that electricity accounts for approximately 27 percent of the cash cost in the smelting of aluminum. Alcan benefits from a very strong position regarding its global electricity supply, self-generating around 50 percent of its electricity requirements and having secured long-term energy contracts for the majority of its global smelting installations.

Alcan is a multinational, market-driven company and a global leader in aluminum and packaging. With world-class operations in primary aluminum, fabricated aluminum as well as flexible and specialty packaging, aerospace applications, bauxite mining and alumina processing, today's Alcan is well positioned to meet and exceed its customers' needs for innovative solutions and service. Alcan employs approximately 70,000 people and has operating facilities in 55 countries and regions.

Malaysia: GIIG Capital may opt to build aluminium smelter in Bintulu

Metals Place, UK Dec 6, 2005

GIIG Capital Sdn Bhd plans to build a US$2 billion (RM5.56 billion) aluminium smelter plant in Bintulu, instead of in Similajau, as earlier planned, people familiar with the matter said yesterday.

The closely-held GIIG is controlled by tycoon Tan Sri Syed Mokhtar Al-Bukhary and Mohammed Ali Rashed Alabbar, the former chairman of United Malayan Land Bhd.

Under the plan, GIIG's proposed aluminium smelter will buy up to 1,000MW of power generated by the Bakun hydroelectric dam, or slightly above two-fifths of the dam's power.

Bintulu was picked by GIIG due to its port facilities, and also because it is located near an industrialised zone, but the plan may face objections from the authorities, as it wants to even up the development projects within the state.

Similajau was picked by the Sarawakians due to its close proximity to the Bakun dam, and also because they want to bring development to the interior parts of the vast state.

GIIG's unit, Smelter Asia Sdn Bhd, under its original plan had also proposed to set up the smelter in Similajau, but the plan had collapsed by July 2004, after the Government refused to sell 280 hectares to Smelter Asia.

The Sarawak State Government didn't proceed with the deal with Smelter Asia, because at that point of time, the Federal Government was reviewing, with a view of downsizing the RM9 billion Bakun dam.

Also by then, GIIG's 2003 agreement to buy 60 per cent of state-owned Sarawak Hidro Sdn Bhd, which is building the Bakun dam has lapsed, as it didn't meet certain obligations.

Shanxi aluminium venture set up

China Daily, China 2005-12-08 06:06

By Mai Dou (China Daily)

Aluminum Corp of China Ltd (Chalco), the world's second-biggest alumina producer, yesterday said it would set up a primary aluminium joint venture with a total investment of 2.38 billion yuan (US$293 million) in North China's Shanxi Province.

The new plant, co-invested by Hong Kong-listed Chalco and Shanxi Guanlu, a local aluminium smelter listed on the Shenzhen Stock Exchange, has a total registered capital of 1 billion yuan (US$123 million), Chalco said in a statement yesterday.

Chalco will pump 510 million yuan (US$63 million) in cash for a 51 per cent stake in the new venture, and its partner Shanxi Guanlu will inject 490 million yuan (US$60 million) worth of assets from an existing smelting facility for the remaining 49 per cent, according to the accord.

The new Chalco-Guanlu investment will have an annual production capacity of 220,000 tons of primary aluminium. It will also be involved in the production and sale of carbon anodes, generation and sale of electricity, as well as development and provision of ancillary technical services, the Chalco statement said.

The Hong Kong-listed company said the establishment of the venture would help to reduce market risks of the group's aluminium products.

"The setting up of the joint venture aims to further enhance our production capacity and strengthen vertical integration in the company's aluminium production business," it said.

Chalco is principally engaged in bauxite mining, alumina refining and primary aluminium smelting. The main business of Shanxi Guanlu lies in the production and processing of primary aluminium.

Shanxi Guanlu said market risk still exists for the new venture due to fierce competition, but they would improve technology to increase the new establishment's competitiveness.

Many smelters in China have been operating at a loss this year due to the rising price of the raw material alumina and because of Beijing's measures to cool investment in the energy-intensive aluminium industry.

As many as 40 small aluminium smelters were shut down this year across the nation due to heavy losses, statistics from the country's nonferrous metals association revealed.

Chalco in the first half of this year produced 465,000 tons of primary aluminium, and 3.49 million tons of alumina. It reported an operating profit of 5.2 billion yuan (US$641 million) for the six-month period, up 8.9 per cent from the same period last year.

Shanxi Guanlu's net profit fell 44 per cent to 19.5 million yuan (US$2.2 million) in the first half of 2005.

To address the losses, China's 23 major aluminium smelters, representing more than 60 per cent of the country's aluminium output, announced they would cut production by 10 per cent at the beginning of the this month. Aluminium prices closed at a 10-year record high at US$2,217 a ton on Monday on the London Metal Exchange.

Chalco's shares ended unchanged at HK$5.90 (76 US cents) yesterday on the Hong Kong Stock Exchange, and Shanxi Guanlu's increased 3.1 per cent to 2.74 yuan (34 US cents) yesterday in Shenzhen.

CFAC makes its case for power

Columbia Falls Hungry Horse News, MT Wednesday, Dec 07, 2005 - 12:23:48 pm PST

By JOHN VAN VLEET

The Bonneville Power Administration may hold the future of Columbia Falls Aluminum Co. in the palm of its hand.

Bonneville is in the process of planning its wholesale power rates for the fiscal years 2007 through 2009, and several concerned CFAC employees turned out to a public meeting held last week in Kalispell to urge the power provider to maintain low rates in order to keep the aluminum plant afloat.

The meeting was a presentation by Bonneville about the rate-setting process, followed by a public comment session in which CFAC officials read prepared statements about the need for Bonneville to keep the rates as low as possible.

Jim Stromberg, CFAC's chief power supply officer said that the plant and the jobs are vital to the Columbia Falls community.

"We are providing about 150 of the best-paying jobs in the valley," he said. "But we are struggling."

Saying that CFAC is "very threatened by the high cost of power," Stromberg said that the plant is "going to be forcing closing its doors" if the rates continue to climb. CFAC is currently running at about 20 percent capacity, a major result of the skyrocketing power costs for the aluminum industry.

Bonneville has historically been a wholesale power provider to public power utilities and numerous industries, and markets the electricity it produces from hydroelectric dams stationed in the Pacific Northwest in the Columbia River drainage.

In recent years, however, Bonneville has backed off providing such low-cost power to the aluminum industry in order to focus more on its public utility consumers, forcing aluminum smelters throughout the region to shut down operations.

Terry Smith, president of the Aluminum Workers Trades Council, represents the CFAC union workers and said that right now, only one issue is hanging over everyone's heads.

"Specifically, power cost is the most important issue facing us," he said.

In its proposal, Bonneville outlined the approach it will be taking in providing power to its industrial consumers, proposing a limited subsidy that could result in fluctuating prices due to market instability.

For CFAC, its payment would not be more than $14.7 million annually, paid on an adjustable scale, with payments of $24 per megawatt for 70 megawatts of power or $12 per megawatt for 140 megawatts. The plant has said it hopes to run two potlines at 140 megawatts, but could still function on one potline at 70 megawatts.

Bonneville is accepting comments from the public on this issue until Feb. 13. Comments can be emailed to comment@bpa.gov, submitted through the company's Web site at www.bpa.gov/comment or through the mail at Bonneville Power Administration, Communications - DK-7, P.O. Box 14428.

Central Asia: Is Russian Aluminum Forsaking Tajikistan For Uzbekistan?

RadioFreeEurope/RadioLiberty, Czech Republic Dec 07, 2005

By Julie A. Corwin

(RFE/RL)

Russian Aluminum (RusAl) Chairman Oleg Deripaska recently visited Uzbekistan to investigate claims that pollution from a nearby Tajikistan Aluminum plant (TadAz) is making farming and other activities difficult. RusAl has promised to invest $2 billion in Tajikistan. But relations between Uzbekistan and Russia have warmed lately after Tashkent asked the United States to vacate the air base in Karshi-Khanabad, which it has been using to support operations in neighboring Afghanistan. And Deripaska's visit to Uzbekistan only served to heighten concerns in Dushanbe that a shift is under way in Russian foreign policy toward Uzbekistan and away from Tajikistan.

Washington, 7 December 2005 -- Oleg Deripaska is considered the oligarch closest to the Kremlin, and analysts generally assume he makes no move without official backing.

Deripaska was in Washington yesterday to speak at the Carnegie Endowment for International Peace, a think tank. Asked about his trip to Uzbekistan, Deripaska denied that either he or the Russian government plans any lessening of support for Tajikistan or the modernization of TadAz.

"[The] RusAl company is trying to create a modernization program for TadAz," Deripaska said. "There is a huge problem on environmental issues. There was pollution in the '90s because of lack of money, lack of investment. The system doesn't work at all. Still, you know, they pollute three times more than they should in normal circumstances. And the Uzbek government claimed that there is a huge problem, and I went to see what is the problem. I will ask RusAL management to rethink their modernization program to put first environmental improvements and then further expansions."

At the same time, Deripaska admitted it’s very hard to predict how quickly RusAl will be able to solve the pollution problem. But he did make one promise. "We'll put more people to investigate...this issue," he said. "And definitely our modernization program, which we will present to the Tajik government, will focus on this environmental improvement. And there is no impact on our study on our RusAl-Tajik project in Tajikistan."

RusAl's pledge to modernize Tajikistan's aluminum plant was concluded on the sidelines of a meeting between Tajik President Imomali Rakhmonov and Russian President Vladimir Putin in October 2004. RFE/RL's Central Asian analyst Daniel Kimmage suggests that the plant has more than just economic significance.

"The interesting component of this whole investment deal is precisely the political import because it took place on the margins of a meeting between Putin and Rakhmonov in October 2004. It was sort of the economic cement. It's the glue that's holding this relationship together on a certain level. So there is a level on which it is politically significant," Kimmage said.

Kimmage concludes that Tajik authorities might be wiser to focus their attention on the inordinate amount of economic power Deripaska will yield once all of his proposed projects are finished.

"[What I] think might be a cause for concern is that when the project in Tajikistan is finished, what Deripaska and his holdings will have are aluminum-production facilities," he said. "They will have power-generation facilities and access to a large pool of cheap labor. Now, the trick will be, of course, to avoid a situation in which this becomes exploitative."

Of course, finishing the projects will require at least seven years. TadAz is not scheduled to be privatized until 2007. In the meantime, Deripaska has pledged to invest $1.6 billion in aluminum-production facilities and hydropower generation for Tajikistan -- a sum that is equal to more than half of Tajikistan's annual gross domestic product.

Norsk Hydro: Eyes Building $1Bln East Siberian Smelter

Yahoo! News Wednesday December 7, 9:46 PM

By Ian Talley Of DOW JONES NEWSWIRES

OSLO (Dow Jones)--Norsk Hydro ASA (NHY) is considering building a $1 billion, 250,000-ton aluminum smelter near the East Siberian city of Khabarovsk, a company official told Dow Jones Newswires Wednesday.

Hydro - one of the largest aluminum companies in the world - needs to expand its smelting capacity to replace plant closures in Europe, meet growing market demand and maintain its global market share.

"We're investigating opportunities in many places around the world, and East Siberia is one of those places where energy is available at competitive terms," company spokesman Thomas Knutsen said.

"It doesn't mean that we are committed or that we are focusing on this particular project," Knutsen added.

Khabarovsk is near the northwest Chinese border and on the Amur River that feeds into the sea. Russia's Unified Energy System of Russia (EESR.RS) is seeking to expand its hydro-power generation capacity there.

With power representing around a third of production costs, hydro-power generation represents a competitive energy option.

Hydro Vice President Harald Martinsen recently visited Khabarosvk and Vanino Port, another East Siberian city across from Sakhalin Island where Russian smelting operations already are in operation.

Bauxite, the raw material aluminum is made from, could be supplied from Australia's ample supplies.

Knutsen confirmed reports that Hydro's Vice President of International Development, Kjetil Solbraekke, had said his company was also considering expanding its capacity in Angola and Nigeria. Although these countries have hydro power, cheap natural gas and bauxite is available from nearby West African state Guinea, they are seen as politically unstable.

Hydro's Chief Executive Eivind Reiten also recently told Dow Jones Newswires his company is again considering new smelting operations in Iceland. It turned down an opportunity to build there several years ago, losing out to competitor Alcoa Inc. (AA).

Other potential locations for new smelting capacity include Canada's Newfoundland and British Columbia, Knutsen added.

However, in the medium-term he said Hydro's focus is on bringing its new 570,000-ton Qatar smelter online in 2009, which is a year later than originally planned. Capacity at the smelter, being built with a 1,000-megawatt power plant, can be doubled to 1.2 million tons.

Hydro is phasing-out production from Europe, primarily Germany. It plans to shut nearly 200,000 tons of capacity at the end of this year, and its 230,000-ton smelter in Neuss will likely be shut in the next several years due to spiraling power and labor costs.

CEO Reiten said told Dow Jones Newswires earlier this year he was speeding-up restructuring of the aluminum division. The company recently invested in Brazil's Alunorte smelter expansion program, allowing a smoother phasing-out of its European capacity.

If the expansion project proceeds on time, it should give Hydro an extra 2.2 million tons of capacity at the Brazilian smelter by 2008.

Alcan Completes New Chlorine System at Ravenswood Plant

WTRF, WV 12/8/2005 12:53 PM

Goal is to reduce chemicals

Story by The Associated Press

Alcan Rolled Products-Ravenswood has completed a new chlorine system at its West Virginia aluminum rolling mill.

The company says the new system will reduce the amount of the chemical on the site by 90 percent.

Alcan officials say the 840-thousand-dollar chlorine storage and distribution facility also will improve efficiency and worker safety.

Alcan says the state Department of Environmental Protection helped the company develop the new chlorine system.

More than one-thousand people are employed at the Ravenswood plant, which Alcan acquired when it bought French aluminum producer Pechiney in 2003.

Aluminum demand soars

The Standard, Hong Kong - Friday, December 09, 2005

China, the world's biggest user of aluminum, said it may consume 19 percent more of the metal next year amid demand for cars and homes.

Consumption will rise to 8.3 million tonnes in 2006, from seven million tonnes this year, Pan Jiazhu, vice chairman of the China Nonferrous Metals Industry Association, said at a conference in Kunming. Demand will climb 50 percent to 10.5 million tonnes by 2010, and to 14.3 million by 2020, he said.

Soaring Chinese demand, fueled by 9.5 percent economic growth in each of the past two years, has sent aluminum prices to a 16-year high. Alcoa, the world's biggest producer, says stockpiles will fall through 2007, while BHP Billiton expects China's usage to more than double by 2015.

"Experts forecast that in 2010 Chinese aluminum usage in automobiles will approach 2.5 million tonnes and consumption in the transportation sector will exceed three million tonnes," Pan said.

Rising incomes in China are increasing private car ownership. China's vehicle sales may rise to 9.4 million units in 2010 from 5.1 million last year, according to the government. The nation has 24 vehicles for every 1,000 people, compared with a global average of 135 for every 1,000. A BHP Billiton forecast that China may use 16 million tonnes of aluminum by 2015 is "too high," Pan said.

"China's demand can't keep growing at the same pace," he said. "It will gradually slow down as the country industrializes, as we have seen in development in other countries such as Japan and the United States."

Aluminum output may keep pace with demand, Pan said. In 2010, China may produce 11.3 million tonnes, 44 percent more than this year's 7.8 million tonnes, he said. China will account for almost a quarter of global aluminum output this year, he said.

In early morning on the London Metal Exchange Thursday, Aluminum for delivery in three months declined US$1 to US$2,247 (HK$17,526) a tonne. The metal will trade at US$1,800 to $2,400 a tonne band between 2006 and 2007, said Yang Yi, chairman of Far East Corp, China's second-biggest alumina trader.

His forecast is based on crude oil prices trading in the US$40 to US$60 a barrel band. Power plants typically burn fuel oil to generate electricity, which accounts for about 35 percent of the costs of making aluminum.

Rising domestic production of alumina, the material used to make aluminum, will reduce China's reliance on imports, Pan said. The country, which relies on imports for half its alumina, may make 17.4 million tonnes by 2010, more than twice the 8.5 million tonnes estimated this year. Imports of the white powder may fall 23 percent to 5.6 million tonnes in 2010, Pan said.

Rising alumina prices have caused losses at 85 percent of smelters in the first 10 months of this year, Pan said. Alumina prices will trade in the US$450- to US$550-a-tonne band next year, said Yang of Far East Corp. "Alumina prices are peaking due to lack of investments in new production capacities in the past 10 years," he said. BLOOMBERG

Aluminum policy

Shanghai Daily, China 2005-12-09 Beijing Time

CHINA, the world's biggest producer of aluminum, will soon announce a national policy governing the industry from 2006 to 2010, an industry official said yesterday.

"The aluminum industry policy and development plan have been approved by the State Council in principle, so the announcement should be soon," Pan Jiazhu, vice chairman of the China Nonferrous Metals Industry Association, said in an interview at a conference in the southwestern city of Kunming, Yunnan Province.

Liu Jiansheng, vice director of policy research office of the State Council, or cabinet, declined to comment on the specifics and timing of the policy.

Bauxite prospecting

Mining Weekly, South Africa 08 Dec 2005

The Malawi government has granted a licence to South African firm Gondo Resources to develop the Mulanje Mountain bauxite deposit, which has over 28-million tons of proved bauxite reserves.

Charles Kaphwiwo, a commissioner at the Department of Mines, in Malawi’s Ministry of Natural Resources and Environmental Affairs, reports that the company has indicated that it will carry out detailed exploration work at the project site, while assessing the viability of an extensive mining exercise.

"We are optimistic that Gondo will eventually invest in the mining venture, because there is already enough information from our department proving the presence of good-quality bauxite," says Kaphwiyo.

The outcome of a feasibility study that Canadian company Met-Chem undertook in 1993 with funding from the African Development Bank indicated that 580 000 t/y of bauxite could be mined at Mulanje Mountain to produce 200 000 t of alumina which, in turn, would produce 100 000 t of aluminium through the use of the Bayer process in Alcan P-180 cells. However, aluminium smelting would depend on the availability of power. The Malawi government intends to start importing power from the Cahora Bassa hydroelectric power plant, in neighbouring Mozambique. The present power supply in Malawi cannot meet the proposed project’s demand for power.

Studies have pegged the cost of the whole project at $820-million and, using assumptions for the base case, it would generate an internal rate of return in constant dollar terms of 6,2% before tax for the smelter and 7,4% for the alumina plant alone.

Mulanje Mountain is situated about 70 km east of Malawi’s southern commercial capital, Blantyre.

The bauxite is a residual product which resulted from the weathering of syenogranitic rocks that form the Mulanje massif. Six extensive bauxitic areas have been identified, but the best deposits are found on the mountain’s Lichenya and Linje plateaux. The bauxite is mainly a trihydrate gibbsite, which lies over kaolinite and has free quartz and goethite as the main contaminants. If the project starts with alumina production, its market is expected to be any of BHP Billiton’s aluminium smelters in South Africa and Mozambique.

Supreme Court of Ukraine Upholds SUAL Ownership

Kommersant, Russia Dec. 09, 2005

The Supreme Court of Ukraine upheld SUAL-controlled AvtoVAZ-Invest of Russia concerning the 68.01 percent ownership in Zaporozhie Aluminum Mill. The award is binding and without appeal. Nevertheless, it won’t end SUAL’s problems with the mill, which, because of high energy rates, may become bankrupt already next year.

Zaporozhie Aluminum Mill is the sole primary aluminum maker in Ukraine. This year’s indicators have not been disclosed yet, while 2004 output reached 187,000 tons. AvtoVAZ-Invest holds 68.01 percent; the firms friendly to AvtoVAZ-Invest and SUAL have 24.5 percent. SUAL’s share in AvtoVAZ-Invest stands at 95 percent.

Despite the award that upheld SUAL in its fight with KrAZ Foreign Trade Firm of Kremenchuk Automobile Works (Ukraine), Zaporozhie Mill is still an asset of concern for SUAL. On March 1, Ukrainian Authorities called off the special rate for power energy for the mill, hiking the rates from $0.025/1 KWh to $0.041/KWh. Zaporozhie Mill suffered $2-million losses in July, according to SUAL. And the rates are still growing for it. "With today’s energy rates maintained in 2006, Zaporozhie Aluminum Mill will remain loss-making and face the verge of bankruptcy," said SUAL briefer Alexey Prokhorov.

by www.kommersant.com

Russian Article as of Dec. 09, 2005

Alcan gives green light to USD1.7 billion aluminum smelter in Sohar, Oman

AME Info, United Arab Emirates Sunday, December 11 - 2005 at 17:00 GMT+4

Alcan Inc. (NYSE: AL, TSX: AL) announced today that together with its partners, Oman Oil Company S.A.O.C. (OOC) and the Abu Dhabi Water and Electricity Authority (ADWEA), it will proceed with the construction of a USD1.7 billion primary aluminum smelter in Sohar, Oman.

Oman: Sunday, December 11 - 2005 at 17:00 GMT+4

Alcan is taking a 20 percent stake in the 350kt per year smelter, which is expected to begin production in the third quarter of 2008. The smelter will be in the lowest quartile of the industry cash cost curve and add approximately two percent to Alcan's global smelting base.

"Today marks an important achievement for Alcan, its partners, and the Middle East Gulf region as we work together in creating sustainable economic, social, and environmental opportunities which will benefit all stakeholders, in particular the people of Oman," said Cynthia Carroll, President and Chief Executive Officer, Alcan Primary Metal Group. "This state-of-the-art smelter will demonstrate Alcan's technology and cost leadership, operational know-how and management expertise and will, over the smelter's life, promote the strong technical and economic development of the region," she added.

In June 2004, Alcan, OOC and ADWEA announced their commitment to the Sohar Aluminium Company L.L.C., which will own and operate the smelter. The smelter will be based near the existing Sohar Industrial Area, which will provide a major economic boost to the Al Battinah Region of Oman. With the construction of a new Sohar Aluminium-owned 1000MW power plant, the smelter will have long-term access to a dedicated power supply on competitive terms and in a quantity sufficient to meet its energy requirements.

The smelter's initial scope will be based on a single AP35 potline, but with provisions for adding a second pot line - of which Alcan has an option to acquire up to 60 percent. The use of proven AP35 technology represents the first time that it is being used in a newly constructed smelter. To date, AP35 technology has been used in the upgrade of three existing smelters around the world. "Under a technology transfer agreement, Alcan will provide Sohar Aluminium with a license and related technical services necessary to implement Alcan's AP35 technology. This is the most advanced, efficient and environmentally friendly technology available," said Marco Palmieri, President, Alcan Primary Metal Group, Asia Pacific.

Attending the announcement in Muscat were H.H. Sheikh Diab Bin Zayed Al Nahyan, Chairman of ADWEA, H.E. Maqbool Ali Sultan, Minister of Commerce and Industry and Chairman of OOC, Tony Kinsman the CEO of Sohar Aluminium and Ms. Carroll.

"Alcan is proud to develop and expand the scope of its aluminum production to this growing and dynamic region of the world," added Ms. Carroll. "As demonstrated through today's official signing, Alcan has been very fortunate to have partners of such high calibre and we look forward to working with the OOC and ADWEA in realizing this unique opportunity for all stakeholders."

Six new industrial plants coming

Trinidad & Tobago Express, Trinidad and Tobago Monday, December 12th 2005

Trinidad and Tobago has reached agreement with private investors to build six new industrial plants in an investment valued at US$7.4 billion, Prime Minister Patrick Manning said yesterday.

The project includes plans for two urea ammonium nitrate plants, a petrochemical complex, two aluminum smelters and an integrated iron and steel plant, he said in an address at the PNM's annual convention at the Chaguaramas Convention Centre, Chaguaramas.

Construction on the projects will begin early next year in the Caribbean country's southern peninsula, Manning said.

"These projects will produce over 17,000 jobs in the construction phase and over 3,000 permanent jobs in Trinidad and Tobago."

U.S. aluminum producer Alcoa Inc. will build one of the smelters, while Venezuelan firm Sural and the state-owned National Gas Company of Trinidad will build the other, Manning said.

S.R. Steel of India will build the iron and steel complex. The two urea ammonium nitrate plants will be financed by Trinidadian firms. Manning didn't give details on the petrochemicals plant.

Manning also said oil production is expected to reach 165,000 barrels per day by early 2006, up from 160,000 per day, as the country improves its refining capacity.

ALCAN AND VALAIS-BASED CONSORTIUM END DISCUSSIONS OVER POTENTIAL SALE OF STEG ALUMINUM SMELTER

Free Market News Network, FL Tuesday, December 13, 2005 3:48:00 PM EST

Transaction would not ensure smelter's sustainable futur e

Press Release - ALCAN INC. Quotes:( AL , AL )

Sierre, Switzerland — Alcan Inc. (NYSE, TSX: AL) announced today that following in-depth discussions with a Valais-based consortium led by Albert Bass, the parties concluded that a proposed transaction for Alcan’s Steg, Switzerland primary aluminum smelter is uneconomic and will not ensure the facility’s future sustainability.

"After very constructive discussions, both parties agreed that the proposed potential sale transaction does not present a viable solution for the primary metal and anodes production at Steg and Chippis," said Wolfgang Stiller, President, Alcan Primary Metal Group, North Europe.

Launched in early October, discussions between the two parties involved a full review of the economic prerequisites for ongoing primary metal production at the smelter, which has a capacity of 44kt per year. The findings have been shared with a delegation of the government, the Alcan Aluminium Valais Works Council and employees.

Well in advance of the expiration of the smelter’s power contract this December, the Company has worked to identify opportunities to ensure a sustainable future for the smelter. Alcan continues these efforts, despite a very difficult power supply environment. A final decision on the smelter’s future will be made in January 2006. Regardless of the outcome, it is expected to have no adverse impact on Alcan’s other production activities in the region, dedicated to casting and fabricating aluminum for the extruded and plates businesses in the aerospace, transport, and industry sectors.

Judge: Ormet strike a lockout, workers entitled to unemployment

Akron Beacon Journal, OH Tue, Dec. 13, 2005 Associated Press

WOODSFIELD, Ohio - About 1,200 striking workers at two southeast Ohio aluminum plants are actually locked out, and may collect unemployment pay, a judge has ruled.

The ruling on Monday by Monroe County Common Pleas Judge William Harris overturns a denial of the benefits by the state Unemployment Compensation Review Commission.

Union members have not worked at Ormet Corp.'s plants in Hannibal, along the Ohio River, since Nov. 22, 2004. Both union locals voted to strike four days before that, but Harris ruled their action was forced by the company.

Ormet, which filed for bankruptcy in January 2004, imposed a restructuring plan that reduced pensions and other benefits in November. That was a one-sided change to the existing labor contract, Harris ruled, even though the two union locals had offered to keep working under the terms of the old contract while the changes were negotiated.

"Both Union 5724 and Union 5760 were left with no choice but to initiate a work stoppage," Harris wrote.

Linda Regelman, a public relations consultant for the Wheeling, W.Va., company, said Ormet is aware of the ruling but not commenting yet. The state Department of Job and Family Services, which oversees unemployment, was reviewing the decision.

The agency or the company have 10 days to appeal, but workers will begin receiving benefits in the meantime, said Carmen Stewart, spokeswoman for the job services agency. The workers might have to repay the benefits if the ruling were reversed.

Harris said the contract changes, plus the company's "clandestine" decision to close and sell the assets of one of the plants this year despite increased production, met the definition of a lockout under a 1990 Ohio Supreme Court ruling, which says both the company and union must sincerely want to keep the business operating.

Under state law, workers are entitled to a lump sum payment covering the first six months they were off the job, but they qualify only if they kept signing up for benefits every week. The maximum payout for those with families would be about $11,600.

Although the unions kept reminding workers to keep signing up, many got frustrated by continued denials and stopped after a few weeks, said Dominic Snyder, recording secretary for Local 5760, which represents the mill that rolls aluminum into sheets.

That plant's assets were sold to Beachwood-based Aleris International Inc., and it is scheduled to close at the end of the year, permanently ending 600 jobs. Snyder said the union still hopes to resolve the contract and stop the sale.

PennDOT: Bauxsol not working on I-99 acid drainage

philly.com, PA - 14 Dec 2005, Associated Press

STATE COLLEGE, Pa. - A product used to control acid-rock drainage at an Interstate 99 construction site hasn't worked as well as hoped, state officials said Wednesday at a hearing in Harrisburg about delays that will keep the entire road from opening until at least 2008.

Kevin Kline, PennDOT's district representative for the project, told the House Transportation Committee that other sections of I-99 will open before the Skytop section, where pyrite-laced sandstone was uncovered more than two years ago, causing the acid drainage.

Kline told the committee that PennDOT is changing its strategy to deal with the drainage because Bauxsol, an Australian-made product used to clean up the acid, didn't work well as expected. That caused criticism from lawmakers.

"There are no more excuses that are going to be acceptable to this committee when it comes to delays," said state Rep. Richard Geist, R-Blair, the committee's chairman.

Robert Yowell, the state Department of Environmental Protection's regional director, told the committee that it could take until mid-2006 for the department just to issue permits for PennDOT's new strategy to clean up the acid runoff.

Wednesday's hearing of the state House Transportation Committee was the fourth on the I-99 project since March 2004. The first hearing was called a few months after PennDOT dug up nearly a million cubic yards of pyrite-laced sandstone while cutting through mountains.

Acid runoff from the pyrite can pollute surface and ground water. PennDOT now wants to use permanent tarps and treatment ponds as the primary way to deal with the acid runoff, and to haul some of the pyrite away to other sites, Kline said.

Kline's comments were the first public acknowledgments that a PennDOT official has made about Bauxsol. About 700 tons of the aluminum-making byproduct were mixed with water and sprayed on pyrite-laced fill near the highway, but the product didn't penetrate the rock enough to prevent acid drainage, Kline said.

Alcoa Receives $12.5 Million Contract to Continue Development of Lightweight Military Ground Vehicles

Business Wire (press release), CA December 14, 2005 12:48 PM US Eastern Timezone

PITTSBURGH--(BUSINESS WIRE)--Dec. 14, 2005--Alcoa (NYSE:AA) announced today that the U.S. Army Tank-Automotive and Armaments Command has awarded Alcoa a $12.5 million, three-year, research, development and engineering contract to develop lightweight aluminum structures for military ground combat and tactical vehicles. This award is part of Alcoa's Army Lightweight Structures Initiative (ALSI). The contract is a follow on to the $1.2 million the Army initially awarded Alcoa in 2004.

Contract monies will be utilized by Alcoa's technical personnel in conjunction with the Army's Tank-Automotive Research, Development and Engineering Command (TARDEC) and through collaborative relationships with major military land vehicle original equipment manufacturers (OEMs) such as General Dynamics, BAE Systems, Oshkosh Truck Corporation and Stewart & Stevenson.

According to Alcoa Chief Technical Officer and Vice President Mohammad A. Zaidi, "We are pleased that the U.S. Army has found value in our technical and product expertise and believes that aluminum has the ability to contribute to vehicle transformation by reducing weight and enhancing structural integrity. Based on our close associations in the defense industry, we understand that weight savings will have a profound effect on the military's ability to maneuver vehicles quickly and to transport more equipment on existing cargo planes saving valuable time, money and fuel costs. We're also looking forward to continuing the relationships we've built with major defense contractors and to assisting them with the capabilities we have at Alcoa."

Alcoa is the world's leading producer and manager of primary aluminum, fabricated aluminum and alumina facilities, 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 to customers. In addition to aluminum products and components, Alcoa also markets consumer brands including Reynolds Wrap(R) foils and plastic wraps, 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 131,000 employees in 43 countries and has been named one of the top three most sustainable corporations in the world at the World Economic Forum in Davos, Switzerland. More information can be found at www.alcoa.com

RUSAL to Build up New Aluminum Plant in Irkutsk Region

Financial Information Service(Registration), Russia Dec 14,005

IRKUTSK, December 14. /FIS/. The plant will be built in Taishet. The decision on its construction was made but pending is the decision on the plant's projected capacity. There are three options - 600 thousand tons per annum, two phases by 300 thousand tons each, and 300 thousand tons. Investments into the new plant are estimated at USD1.6 billion. The project terms are to be announced in spring 2006.

500 jobs to go as Manukau firm shuts down

National Business Review, New Zealand 14 Dec 2005

Manukau-based Ion Automotive has announced it is closing shop, throwing about 500 workers out of work.

According to NewstalkZB, 200 terminations will be effective immediately after Christmas. The remaining 300 employees will stay on as the firm winds down production through to the middle of the year.

The company has long manufactured wheels for Ford but executives say Ford has found another supplier and the New Zealand operation cannot compete.

They told NewstalkZB that higher costs and the strong dollar made the operation impossible to sell.

Few observers will have been surprised by that announcement, although many may have hoped that it would be sold.

The shut down comes only weeks after parent company, the Australia-based Ion Group, placed itself in voluntary administration, citing cost overruns on several major projects that simply absorbed too much cash.

In announcing the voluntary administration on 7 December, administrators Colin Nicol and Peter Anderson of the independent restructuring and corporate advisory firm, McGrath Nicol + Partners, said the company was basically sound, had annual revenues of about $A700 million and would undertake a restructure that would involve selling the company's businesses.

With voluntary administration came news that Ion's 3,000 workers would be let go, exciting a flurry of criticisms directed at the government for neglecting the manufacturing sector.

The NZ operatioin of the company recently won very high praise from NZTE, which held it up as a model for other industries to learn from.

"It’s been a hard road but New Zealand’s automotive assembly industry now has examples of world brilliance and is recording repeatedly high annual growth," NZTE said in a special report titled "Automotive Wonders":

One larger firm that has built sustainable competitive advantage by developing sophisticated R&D programmes is Ion Automotive New Zealand Limited.

Ion accounts for more than half the sales in New Zealand's ACM industry.

A report on the ACM industry prepared for New Zealand Trade and Enterprise (NZTE) by Vantage Consulting Group in 2003 said that Ion was "...arguably one of New Zealand's finest examples of the industrial application of advanced research and development."

Originally the Ford Motor Company of NZ alloy wheel manufacturing plant at Wiri in Auckland, it was the only aluminium alloy wheel plant owned by Ford in the world.

Ford had invested in the plant over the years and the company supplied wheels and engine components to many players in the New Zealand OEM market, as well as for export.

Ion Automotive NZ Ltd is part of Ion's light metal castings division, consisting of the Auckland plant, two plants in Adelaide, one being built in Melbourne, and one about to be commissioned in Kentucky.

Although a wholly-owned subsidiary of Ion Limited, Ion Automotive NZ Ltd has considerable autonomy and is a leader in the group’s production and its R&D.

Production from the Auckland plant includes manufacture of wheels and suspension components for Ford and in future for Harley Davidson.

With current revenues of around $150 million, operating 24 hours a day, seven days a week, the Auckland plant produces 1.7 million wheels a year.

Managing director Neil Campbell says the company has continually invested in state-of-the-art machinery and equipment, automating processes using computer integrated manufacturing processes, robotics, and advanced inspection systems.

"There is a trend for more diversity and shorter production runs in the global OEM market, and the rate of product development is a significant issue," he says. "Each phase of product development has a strict validation process, with computer simulation, rig testing and vehicle testing, before mass production takes place."

Through its Auckland plant, Ion Automotive has nurtured diverse relationships with universities, polytechnics, other New Zealand research institutions and with overseas research centres and industrial societies.

Starting in 1995, while still owned by Ford, the Auckland plant has worked through the Foundation for Research, Science and Technology to initiate many research projects at undergraduate, masters, PhD and post-doctoral level that have significantly improved productivity in its New Zealand operations.

Ion Automotive research and technology manager, Darius Singh, says this has helped to bring universities closer to industry, "...which is a major driver – we get focused research projects in return for providing facilities and professional management, and the student gets a degree and invaluable practical experience – it’s an excellent model.

"For eight or nine years we have been acting as an incubator for talented individuals to carry out high value research and gain experience, and now we have begun hiring some of these people for key positions in the company. One top AUT graduate, for instance, has recently been hired as lead simulation engineer for the entire Light Metal Castings Division, based in New Zealand.

Global aluminium market stays balanced: Fitch

Metals Place, UK 14 Dec 2005

Aluminium demand and supply are expected to continue to be in near balance given supply constraints in alumina and increasing power costs.

Some 650,000-740,000 metric tons per year (mtpy) of European smelter capacity could be shuttered, without favourable power costs negotiations in 2005 and 2006. With 2004 global smelter production of about 29.9 million metric tons (mt), 850,000 mtpy would be shy of 3% of supply.

Growing export supply from China is expected to slow following moves by the central government. Effective Dec. 31, 2004, the 8% export tax rebate was eliminated, and a 5% export tax was implemented on aluminium.

Based upon current prices, this 13 percentage-point swing has an estimated $240/mt impact on the revenue of a Chinese aluminium exporter.

On Aug. 9, 2005, the Chinese government announced that it had decided to abolish tax exemptions for toll-smelting of aluminium. Under the tolling arrangement now being phased out, a smelter obtains relief from paying import duty on alumina (8%) and most of the VAT (17%), as long as the metal is exported within about 12 months.

At current prices, the abolition of tolling would add approximately $160-$170/mt to the cost of producing aluminium for Chinese smelters.

In 2004, China's net exports of aluminium were about 800,000 mt, or 2.7% of global smelter production.

Fitch expects aluminium prices over the next 12 to 18 months to hold in the $0.75/lb. to $0.85/lb. range with upside if the dollar weakens further and downside from substantial increased production in China.

Eastalco plant to close Monday

Business Gazette, MD Thursday, Dec. 15, 2005

After almost 35 years of smelting aluminum, the Eastalco plant in Frederick will shut down Monday.

The plant’s approximately 600 employees will keep working through the holidays, but come Jan. 2, only about 100 workers will be needed for cleanup activities, said Philip Wagner, unit president for the United Steelworkers of America Amalgamated Local Union 7886 at Eastalco.

By mid-2006, Eastalco will have a skeleton crew of about 25, said Kevin Lowery, spokesman for Alcoa of Pittsburgh, Eastalco’s parent.

‘‘It’s a tough situation right here around the holidays," Wagner said. ‘‘It’s never a good time [to be laid off], but it’s certainly tougher around the holidays."

At the heart of the shutdown is Eastalco’s electricity bill.

The plant is the largest consumer of electricity in Maryland, using 350 megawatt hours per day, or enough to power the homes of about 350,000 people.

Under its decade-long contract with Allegheny Power with Greensburg, Pa., which expires this month, Eastalco pays about half the market rate for electricity, according to Allegheny.

Since that contract was signed, the state’s electricity industry has been deregulated, and prices have increased.

This summer, Allegheny proposed hiking Eastalco’s rates by $72 million, or 82 percent, under a new contract, Eastalco officials said. Since then, Allegheny has upped its offer to more than triple Eastalco’s current bill, according to Lowery.

Eastalco has unsuccessfully tried to negotiate a lower price or find a cheaper source. Failing that, it is shutting down.

Wagner expects about 190 of the laid-off workers to start drawing on their pensions.

‘‘The average age of the [union employees] is 45 years, with 16 years of service," Wagner said. ‘‘A lot of the employees won’t be able to draw on their pensions yet," as some employees, with deferred pensions, can’t tap the funds until they turn 62.

To help ease the difficulty of job loss, Eastalco has offered training assistance and negotiated some severance concessions with the union.

‘‘Anyone that worked [at least] 1,000 hours in 2005 will get any accrued vacation pay," Wagner said. ‘‘That will be paid out in the middle of January. We’ve also negotiated the extension of benefits for those that would not [normally] have qualified."

The nature and duration of those benefits are based on seniority, he said. ‘‘Those retiring will lose their dental, but retain their medical" until they switch to Medicare.

Those too young to retire ‘‘are in the process of putting in resumes" elsewhere, Wagner said.

Companies such as Canam Steel, which has a plant in Point of Rocks that produces steel joists, have postings in Eastalco’s transition center advertising job openings, and Eastalco has helped organize a job fair at St. Joseph’s Church near the plant. Kim Neuman of Canam’s human resources department said she hasn’t seen any applications from Eastalco workers yet.

‘‘We would love to have" applicants from Eastalco, Neuman said. ‘‘Right now we have two openings in engineering, one in traffic and a couple on the production line."

Neuman did say that the positions are available are specialized, and didn’t know whether or not Eastalco had anyone that met the Canam job descriptions. ‘‘The doors are open to anyone who wants to apply."

The same union represents workers at Eastalco and Canam, which has 224 employees.

Lowery said Alcoa was trying to place as many laid-off workers as possible, with ‘‘a handful that will be relocated" — mostly executives — within the company.

Alcoa continues to explore cheaper electricity sources with hopes of restarting the Eastalco plant at some point, Lowery said.

‘‘Self-generation is, without a doubt, something we’re looking into," he said. ‘‘We’re also looking at other options, seeing ways that these types of issues are being tackled across the world."

Alcoa does have at least one plant, in Wenatchee, Wash., that has its own power generating facility.

The Eastalco plant will stop smelting, but not close entirely. There is no timetable for laying off the 25 remaining workers next year, Lowery said, because they ‘‘would be serving the customers directly."

Alcoa’s fourth-quarter results will include a charge of about $14 million in connection with the Eastalco shutdown, according to a company statement.

Alcoa, in its third-quarter filings with the U.S. Securities and Exchange Commission, said it is trying to ‘‘offset the pressure of higher input prices and energy costs" through a restructuring plan, ‘‘which will result in the elimination of approximately 8,100 positions and $195 million from its cost base when fully implemented."

By the end of the third quarter, Alcoa ‘‘had eliminated more than 1,400 positions as part of that program," according to its filing.

However, Lowery said in October that Eastalco shutdown and layoffs are not part of that plan.

ORBITE : Study on the Alumina of the Grande-Vallée deposit and it's market.

CNW Telbec (Communiqués de presse), Canada Dec 14, 2005

MONTREAL, Dec. 14 /CNW Telbec/ -

EXPLORATION ORBITE V.S.P.A. INC., to support its alumina action plan, announces the conclusion of the analysis of the Grande Vallée Alumina deposit and its market contracted to Dr. Camiré D.Sc. (geology), MBA. The report's principal findings are summarized in this press release.

The aluminum demand growth, fueled by the China's economic explosion, has lead the alumina industry to operate at near or even full capacity for the last few years forcing the consideration of capacity enhancement projects. The world's production capacity for Alumina has reached 61 Millions of tons (Mt) in 2004 and is expected to grow by an additional 50% by 2010. Experts estimate the alumina demand annual growth to reach 4-5% until 2009 creating additional pressure on the world's capacity.

The alumina market can be segmented in two categories: metallurgical alumina and specialty alumina. The first segment is for the fabrication of aluminum and represents some 90% of the market by weight and between 13 and 22 Billion dollars in revenue (2004). While the second segment representing 10% of the market by weight gauges at 1-3 Billion dollars. In 2005, the average over-the-market price was between 375 and 450 USD per ton.

The next development steps for Orbite's red clay deposit is the development of an R&D plan for the selection of a production process; the establishment of a scientific advisory committee; the further evaluation of the physical and chemical characteristics of the Grande-Vallée deposit material properties. Mr. Gévry, President of Exploration Orbite, stated "I am very satisfied

with this analysis, demonstrating the depth of market and significant economic potential for the Grande-Vallée project." He added "we have already initiated the implementation of the recommendations of the Camiré report and additional steps are also in the planning stage and should be announced soon"

TSX Venture Exchange does not accept any responsibility for the content or the veracity of the information contained in this release.

For further information: Richard Boudreault, vice-président, (514) 386-4639, Richard@techaero.ca

Chalco signs MOU to develop Vietnamese bauxite mine

Source: Dow Jones

Metals Place, UK 14 Dec 2005

Aluminium Corp. of China (Chalco), signed a memorandum of understanding Wednesday with Vietnam Charcoal Group to jointly develop Vietnam's Dak Nong bauxite mine, Chalco said Thursday.

The project is scheduled to be completed in two phases.

Upon completion of the first phase, the mine's annual alumina production capacity will total 1.9 million metric tons, which will be expanded to 4.0 million tons under the second phase.

Chalco didn't elaborate on when the project would be completed or provide an estimate for the total investment involved.

Chalco added that the phases of development of the Dak Nong mine involve bauxite mining and alumina production. A feasibility study will also be conducted on construction of a power plant.

Chalco is China's largest producer of alumina, a key raw material for aluminium production.

Bauxite, an ore with aluminium hydroxide as its main constituent, is an initial material for the extraction of aluminium. Around four kilograms of bauxite are needed to produce one kilogram of aluminium.


RUSAL and UES agree on basic conditions of the aluminium smelter


Gateway 2 Russia, Russia 16 December 2005 19:56

construction and the completion of Boguchanskaya HPP.
RAO UES and RUSAL today signed the basic conditions of partnership agreement, a document which contains key parameters of the Boguchanskaya energy and metals complex project. The two parties plan to sign the partnership agreement itself in the first quarter of 2006. According to preliminary estimates, total investment for this project will amount to over $4 billion, which includes the creation of an infrastructure for the power plant and the smelter. The project should take about seven years to complete.

The parties take equal part in the realization of the project. HydroOGK (a subsidiary of RAO UES) and RUSAL will complete the Boguchanskaya HPP and build a new aluminium smelter, which will become the primary consumer of electric power generated by the HPP.

The first stage of the greenfield aluminium smelter and the initial complex of the Boguchanskaya HPP will be completed in 2009. The installed capacity of the Boguchanskaya HPP will be 3,000 MW, generating annually 17.6 billion KW/h. The smelter's capacity will amount to 600,000 tones of aluminium per year. The cost of completing the Boguchanskaya HPP is estimated at $1.5 billion. The construction of the smelter will cost $2.1 billion. RUSAL and HydroOGK intend to finance the project with their own, as well as attracted funds.

Boguchanskaya HPP construction will be launched in January 2006. The Russian Government has committed part of the funds in RAO UES's 2006 investment programme for the HPP construction in 2006 - a total of 2.6 billion rubles ($91 million). In total, 4.5 billion rubles ($157 million) will be invested into constructing the Boguchanskaya HPP through the RAO UES investment programme and funds obtained by HydroOGK.

The feasibility study of the aluminium smelter construction should be completed in 2006. RUSAL has allocated about 3 billion rubles ($100 million) of its investment budget for next year to fund the study and other project activities in 2006.

In January, RAO UES, RUSAL, and HydroOGK will develop and coordinate the draft partnership agreement.

RUSAL is the world's third largest primary aluminum producer, providing primary aluminium and value-added cast-house products to customers in 40 countries.

OAO HydroOGK is a 100% subsidiary of RAO UES of Russia and controls hydropower stations with a total capacity of 22,650 mW.


Vedanta to build $2 bn smelter in India

Friday, December 16, 2005 at 1418 hours IST

DECEMBER 16: Vedanta Resources Plc, India's largest producer of copper and zinc, said it will build a $2.1billion aluminum smelter and power plant in eastern India, more than doubling its production capacity within five years.
Construction of the 500,000-ton-a-year smelter and 1,215 megawatt power plant to run it will begin in June and be completed by the end of 2010, the London-based company said today in a statement.

The smelters in Jharsuguda, Orissa, will take Vedanta's annual production capacity to 900,000 tons. Vedanta is expanding its metals output to feed India's growing appetite for raw materials. Aluminum reached a 16-year high in London this month.

Vedanta has already announced a $900million expansion at its BALCO aluminum plant and is building an$800 million alumina production complex in Orissa.

Alumina, derived from bauxite, is used to make aluminum. ``The Jharsuguda project is the next phase of our growth in becoming a million ton-per-annum producer,'' Chairman Anil Agarwal said in the statement.

Orissa, about the size of California, is home to wildlife such as elephants and white tigers. It also contains more than 70per cent of the nation's bauxite, from which alumina is refined.

Other companies are planning mining and metals projects in Orissa, where 47 per cent of 34 million people live below the poverty line. South Korea's Posco, the world's No. 5 steel maker, plans to spend $12 billion on a steel and iron mining complex. Dubai Aluminium Co. on September 17 signed a contract with Larsen &Toubro to build a $3.6 billion alumina refinery in Orissa to feed its smelter in Dubai, the largest in the Middle East.

 

Eye on Coil Annealing

33Metalproducing Dec 17, 2005

New thermal and coil-handling processes serve the rising demand of a sophisticated global market.

The expanding demand for aluminum coil processed to strict customer standards has resulted in a number of new annealing installations. SECO/Warwick Corp. has been busy supplying such systems worldwide, backed by the latest in coil-softening technology. One of Seco’s most recent contracts, for Alcoa SMP in Samara, Russia, called for four aluminum-coil annealing furnaces, a charge/transfer car, and specially designed trays with load-support fixtures to aid the heat-transfer process and coil loading and unloading.

The rolling operation outside of Moscow was acquired from RusAl earlier this year, along with a separate plant at Belaya Kalitva. After the purchase, Alcoa set to work with a series of immediate investments in new equipment and processes. Samara is one of the largest aluminum-processing operations in Russia. It includes a cast house and flat-rolled, extrusion, and forging capabilities to serve its domestic industrial-product, transportation, and packaging customers.

Each of the newly commissioned tray-type coil annealing furnaces Seco supplied to Alcoa SMP is rated for a 105,000-lb. load with a maximum operating temperature of 1,200°F. The furnaces use a mass-flow heating design, eliminating potential for local overheating and physical damage of thin-gauge foil caused by high-velocity horizontal airflow.

Benefits from bypass cooling Industrial buyers’ demands for improved metallurgical and material handling safety have resulted in the need to cool aluminum coils under a protective atmosphere within the furnace. The furnaces at Alcoa SMP feature Seco/Warwick’s proprietary bypass coolers: one is connected to the back wall of each furnace to cool coils in a nitrogen atmosphere. Employing bypass coolers reduces the cooling-cycle time and eliminates the need to transfer the coils into a separate chamber.

Bypass cooling begins when hot gases are drawn from the furnace to the external bypass-cooler chamber through a series of inlet and outlet dampers after the coil heating cycle is complete. Gases pass through a filter and over water-cooled coils, mixing with the chilled atmosphere and re-directing back into the heating chamber. An internal bypass arrangement limits the temperature of the atmosphere traversing the heat exchangers to 350°F. This setup provides a number of maintenance benefits. The controlled-temperature gas flow over the exchanger coils prevents volatized rolling oil from baking into the exchanger fins, and filtering prevents the fins from clogging. In addition, access for maintenance is simplified and functional life is lengthened because the heat-exchanger coils are located outside of the furnace.

Seco/Warwick has placed more than 100 of these bypass coolers in new and existing operations for coil and foil annealing. In some cases, multiple coolers are installed with each furnace to allow more rapid cooling. The coolers provide plunge, programmed, or auxiliary cooling, are available in standard or custom sizes, and can be connected by ductwork to the rear of the furnace, the sidewall, or the roof.

Seco/Warwick recently completed a turnkey installation of two aluminum-coil annealing furnaces at Ningbo Huayang Aluminium-Tech Co. Ltd. in Ningbo, China, the first aluminum plant on the Chinese mainland for parent company C. S. Aluminium Corp. The furnaces heat, soak, and cool loads of aluminum coil that are held in structural-steel saddles resting on trays. Each furnace holds one tray with a maximum load weight of 187,400 lb., and is designed to operate between 212° and 1,100°F. The furnaces cool loads to 390°F and lower, depending upon incoming water temperature, and can operate with air or nitrogen atmospheres.

Loaded furnace trays are moved into and out of the furnace with a charging/transfer car. The electric-powered car rides on three rails and navigates a straight run between loading stations and the furnace, and from the furnace to the cooling and loading stations. The rails sit on gusseted structural I-beams that rest on square, tubular crossties made from bent steel plates. Vertical posts tied to the crossties support two parallel members that, in turn, support the load tray.

The cooling stations are identical in structure to the loading stations, and each incorporates four evenly spaced electric fans.

Improving furnace efficiency

In providing custom aluminum-coil and -foil annealing single-coil modular and multi-zone furnaces, Seco/Warwick has developed and implemented a host of technical improvements in bypass cooling and coil transfer, as outlined above. Beyond that, it has taken steps to improve furnace efficiency. An example is a proprietary mesh and mortar insulation system that increases insulation efficiency by 15-20%. The system includes several inches of board-type insulation covered by a ceramic-fiber blanket. Stainless-steel wire mesh covers the entire insulating surface and is coated with a high-temperature mortar to provide a rigid surface. This design also eases maintenance, according to Seco, so that insulation damage on this system is much easier to repair than typical stainless-steel liner sheets.

Other furnace efficiencies result from a thermal-head, air-to-work ratio control system, which employs separate load and air thermocouples in each control zone. The system is constantly monitoring load temperature, maintaining a thermal head without risk of overheating the load. When the load approaches metal set point, the air temperature is reduced in direct proportion to the rate of rise in load temperature. That action maintains the maximum amount of thermal head for the maximum amount of time, reportedly resulting in the shortest possible heating time.

To ensure temperature uniformity and increase heat transfer, Seco has developed technology to control airflow recirculation over various-sized loads. Furnaces incorporate vertical airflow with vertical baffles on each side of the load, or a high-velocity directed mass flow system. In either design, the vertical baffles improve air-stream uniformity and separate the load from direct heat radiation.

by Metal Producing & Process (MPPstaff@penton.com)

Nordural Commissions Automatic Stub Protection System, New Casting Station

33Metalproducing Dec 17, 2005

Stimir has commissioned an automatic stub protection system and completed the installation of a semi-automatic casting machine at the Nordic Aluminium (Nordural) plant.

The installation of the casting machine is part of the upgrade to Nordural’s rodding plant in preparation for the Phase 3/Potline 2 expansion, set for completion in 2006. This machine pours molten iron to seal rod stubs into carbon anode blocks, which relieve operators of the task, but continue to provide manual control over the hazard of pouring molten metal.

The machine runs on rail tracks and will move automatically on command to the active furnace to receive new metal, from where it returns to the casting postion. The ladle is lifted up two vertically-mounted curved guide-rails, and tilted to the pouring position with complete stability. The operator has an unobstructed view of the casting operation from his air-conditioned cab, positioned relative to the pouring spout. From there, the casts move to the new collar forming machine.

The automatic stub protection system contains a collar forming machine that is a fully automated collar forming and locking system. Its small footprint and fast throughput readily fit into existing rodding plants. It can handle both card and aluminium, which is loaded as a coil and automatically fed, cut to length, formed into a collar around the rod stub, and securely closed with a punched locking import. The collar filling machine accurately measures and dispenses carbon paste into the card or alu-coil collars, fully automating the task. Before filling, the collar is centered and the dispensing system ensures accurate and even distribution of the carbon paste, virtually dust-free.

Tax cuts on alumina: China smelters to benefit next year

Daily Times, Pakistan Sunday, December 18, 2005

HONG KONG: China’s aluminium smelters could stem widespread losses next year with Beijing’s move to cut the import tax for alumina, the metal’s basic building block, officials and analysts said on Friday.

China will reduce the alumina import tax to 5.5 percent from 8 percent from Jan. 1, an official for the ministry of finance said. It takes two tonnes of alumina to make one tonne of aluminium.

"That is certainly a good thing for smelters. Maybe smelters will not make a loss next year," said Heng Kun, analyst for state-owned Everbright Securities Co. Ltd.

About 85 percent of China’s aluminium smelters lost money in the first 10 months of the year, squeezed by high alumina prices, Pan Jiazhu, China Nonferrous Metals Industry Association’s vice president said last week.

But officials and analysts said Beijing’s plan to cancel the tax on high-grade aluminium exports in January would not help the industry because only a few Chinese smelters produced such a grade.

The finance official said Beijing will also cancel a 1.5 percent import tax on copper scrap and aluminium scrap to encourage imports of the raw materials. "We are lowering the tariffs to encourage Chinese companies to use overseas resources," the official said. China, the world’s largest importer of spot alumina, is also a major buyer of copper and aluminium scrap in the global market.

Smelters in China already are paying about $615 a tonne to import spot alumina, up 46 percent from about $420 at the start of the year. Heng said strong domestic aluminium prices were also benefiting smelters.

Prices of spot aluminium have risen 9.4 percent so far this month due to the plan of leading Chinese smelters to cut production.

Aluminium hit a 17-year high of $2,289 on Monday on the London Metal Exchange.

Export tax: The finance official said Beijing will cancel a 5 percent export tax on primary aluminium with purity of 99.95 percent or above in January.

From Jan. 1, Beijing will divide unwrought primary aluminium into two customs codes — metal with purity of 99.95 percent or above and purity below 99.95 percent, the official said.

Ending the export tax might encourage Chinese aluminium smelters to produce high-grade metal for exports in the future, but the exports would not rise in the coming few months because only a few smelters produced such a grade, smelter officials said. Production of the high-grade product, used in the home appliance sector, requires advanced technology and high-grade raw materials.

An official for a smelter producing the high-grade aluminium estimated China annually produced about 30,000 tonnes of the grade, or 0.4 percent of China’s aluminium production. High-grade aluminium usually costs 1,000 to 2,000 yuan more than the lower grade metal, he said. Most Chinese smelters produce primary aluminium with purity of between 99.70 to 99.85 percent.

Beijing will leave a 5 percent export tax on primary aluminium with purity of below 99.95 percent.

China’s imports of alumina soared 18.4 percent to 6.4 million tonnes in the first 11 months of this year, according to preliminary customs data. reuters

Businesses flock bauxite project

www.jamaica-gleaner.com Sunday | December 18, 2005

HUNDREDS OF prospective suppliers of goods and services for the upcoming Jamalco expansion met at the St. Gabriel's church hall in May Pen last week to hear how they can participate in the $1.2 billion expansion project.

The initiative was co-ordinated by FLUOR, the international construction and engineering firm that has been contracted to manage the project.

LOCAL SERVICES

According to the site manager for FLUOR, International in Jamaica, Berry Moodie, the expo underscored the company's commitment to utilising local services on the project.

He added that he was pleased with the turn out of hundreds of business persons from across Jamaica to the expo.

Eleven categories of services and supplies have been identified that will be required for the project, including food and catering, construction and equipment rental, haulage, engineering, janitorial, housing, waste disposal, banking and transportation.

Attendees to the expo expressed enthusiasm for this major business opportunity, which has been opened to Jamaicans through the staging of the expo.

Public Relations and Communications Manager for Jamalco, Blossom Laidlaw, updated the attendees on the status of the expansion which she said has already begun.

The first phase she said to increase the refinery capacity by 150,000 tonnes by year end 2006 is in progress.

Further work on this expansion project at Jamalco is expected to commence by the second quarter of 2006 and to be completed by 2008.

RusAl, UES in $4Bln Smelter Deal

The Moscow Times, Russia Monday, December 19, 2005. Issue 3319. Page 5.

By Samantha Shields, Bloomberg

Russian Aluminum and national power utility Unified Energy Systems said on Friday that they would spend $4 billion in Siberia on a new smelter and completing a power plant.

The smelter will take seven years to build and produce 600,000 tons per year, the companies said in a statement Friday. A final agreement will be signed in the first quarter of 2006.

The new smelter is part of a decade-long, $7 billion expansion planned by RusAl, which already makes about 1 in every 8 tons of the world's aluminum. Friday's announcement that the new smelter will be paid for from existing funds may also increase speculation that RusAl will sell shares.

"RusAl has an aggressive and ambitious growth program, which they can finance internally," Alexei Morozov, an analyst at UBS Brunswick in Moscow, said. "The production increase might be a prelude to an IPO."

RusAl chief financial officer Vladislav Solovyov said in October that the company had no immediate plans to sell shares or bonds. RusAl is controlled by billionaire Oleg Deripaska.

Aluminum is used in car parts, aircraft fuselages and beverage cans. Aluminum prices reached a 16-year high on the London Metal Exchange this month.

The new smelter will be in the Krasnoyarsk region, on the site of the half-completed Boguchansk hydroelectric power plant. RusAl is increasing capacity in Siberia because it offers cheaper power. Electricity accounts for as much as a third of the cost of producing aluminum.

AP: Alcoa residents at risk

Maryville Daily Times, TN 2005-12-18

by Thomas Fraser of The Daily Times Staff

Residents of a section of Alcoa are in the top 5 percent of Americans at risk from industrial air pollution, according to an Associated Press analysis of Environmental Protection Agency data.

Census Tract 101, which in 2000 had a population of 2,436 and encompasses most of Alcoa's central city, was cited as having an inordinate amount of toxic air pollution by the AP, which drew its conclusions from 2000 data included in the EPA Toxic Release Inventory. Among the AP conclusions was that, nationwide, neighborhoods with higher minority populations and lower incomes were among the most polluted.

The local census tract named in the study -- which ranks, in terms of pollution, 864th out of the nation's 65,443 census tracts, according to the AP analysis -- is 41 percent black, but in keeping with the AP conclusion, it has a median household income almost $9,000 less than the average city median household income of $33,250, according to the 2000 U.S. census.

While no potential sources of the pollution were named in the AP report, there are 12 facilities in the 37701 zip code that produce and release air pollutants, according to the EPA. However, ALCOA Inc. -- which has two facilities within the census tract, on Hall Road and Hunt Road -- operates the only industrial facilities in the city of Alcoa that are required to file emissions reports with the federal Toxic Release Inventory, a main component of the AP investigation.

Emissions declining

``I don't think that will be a surprise to the neighborhood,'' said Hall community resident and neighborhood activist Jackie Hill of the report. ``There has always been a suspicion that the plant has been putting more things in the air than should have been in the neighborhood,'' said Hill, who noted that most residents, including herself, can relate stories of finding gritty particles on cars and homes.

``Clearly there's less than when I was growing up, that I can say. As far as now, I really haven't noticed it much.''

ALCOA environmental managers agree that current emissions are far less than historical levels, but the company still emits a number of primary pollutants -- such as sulfur dioxide, nitrogen oxide, volatile organic compounds and fine particles. It is the company's emissions of hazardous air pollutants such as hydrogen fluoride, hydrogen chloride, lead, mercury and chlorine that are listed on the federal Toxic Release Inventory. Company officials are quick to point out that the plant meets all federal and state emissions regulations.

``All the data we have either shows level or reduced emissions over the past three years,'' said ALCOA Director of Community Relations Melissa Copelan. And that represents continued emission decreases that began in earnest in the 1970s, when ALCOA switched to a more efficient, less-polluting method of aluminum production and installed additional emissions controls, said ALCOA Environmental Manager Dale Huddleston.

The company continues to ramp up its emissions-control technology, he said, especially in light of increasing federal pressure to reduce nitrogen oxide, sulfur dioxide and fine particle emissions. He also acknowledges that there have been times when plant malfunctions may have resulted in the deposit of fine alumina particles in the Hall community. However, he said: ``We're not aware of any increased (health) risk in the community.''

`No brainer'

Alcoa city officials say the overall conclusions of the AP report -- that poor and minority communities see higher levels of pollution -- is no surprise.

``Nationwide, older housing, which tends to be lower-income housing, is closer to manufacturing areas. That is pretty much a no-brainer,'' said Alcoa City Manager Mark Johnson.

He did express surprise that an area of the city was singled out by the report, because ambient air monitors in the city and county have shown no exceptional spikes in pollution levels in recent years. However, those monitors are only geared to track levels of certain common air pollutants, such as fine particles and ozone. Blount County remains in violation of federal health standards for those two pollutants, which originate from sources including vehicles, manufacturing facilities, and power plants.

Alcoa City Commissioner George Williams said pollution levels in inner Alcoa, and the entire county, should continue to improve.

``It's impossible to measure yesterday by today's yard stick,'' he said of the community's initial evolution, which revolved largely around the activities of ALCOA. While he said ``those of us who grew up out there can remember the big smokestacks'' of ALCOA, there were also ``a lot of small job shops that dumped oil out in the back yard. We weren't environmentally aware,'' he said. ``We didn't know that when you pour radiator fluid in the front yard it ends up in the drinking water.''

Environmental justice

As for the so-called ``environmental justice'' component of the AP study, ``it's hard to imagine anyone set out to put black folks in polluted areas. The communities were built near work,'' Williams said.

And Alcoa is not alone in the history of inordinate low-income or minority exposure to industrial pollution -- Williams cites Oak Ridge's Scarboro community, a predominantly black community near the World War II-era Y-12 nuclear weapons complex that saw modern problems with historic waste disposal patterns and methods.

``The (working-class neighborhoods) were built with convenience in mind,'' he said. ``When you talk about how cities were built and planned years ago, there was no thought given to the kinds of environmental implications 65 or 70 years later.

``What we need to do now is think about ways to clean up everywhere.''

While University of Tennessee philosophy professor and environmental ethicist John Nolt would agree with that assessment, he also worries that cycles of environmental injustice can be hard to break.

``Most home-buyers try to avoid neighborhoods where polluting industries already exist, so property values drop there,'' Nolt said in response to the overall AP report. ``This makes these places affordable to the poor, who often can't find homes anywhere else.''

China's Shanxi Guanlu to halt some output of electrolytic aluminum

Forbes 12.18.2005, 03:14 AM

SHANGHAI (AFX) - Shanxi Guanlu Co Ltd (SZA 000831) said its board of directors has agreed to shut one of its facilities for producing electrolytic aluminum for six months due to rising alumina prices.

In a statement filed with the Shenzhen stock exchange, the company said the production halt will cut output by 20,000 tons and reduce revenue by 340 mln yuan.

While a resumption of production is expected in six months, the actual return to operation will depend on the market situation for alumina, the company said.

Industrial action at WINDALCO Kirkvine

radiojamaica.com Mon Dec 19, 2005

Windalco's Kirkvine Works in Manchester

Approximately sixty workers at the West Indies Aluminia Company, WINDALCO's Kirkvine bauxite mining facility are now off the job.

The workers who are represented by the National Workers Union , NWU, stopped working in protest against a decision to tax their productivity incentive.

According to NWU Vice President, Norman Dacosta the bauxite company and the Government reneged on their commitment that the productivity incentive would not be taxed.

He says the workers will not resume their duties until there is positive news concerning the refunding of the tax that was deducted

BHP BILLITON APPROVES ALUMAR REFINERY EXPANSION

Ralston Johnson 19 December 2005

Number 51/05

BHP Billiton today announced approval of the Alumar Alumina Refinery expansion project in Brazil. The project will increase annual alumina production capacity by 2 million tonnes to 3.5 million tonnes per annum (100% basis), at a cost of US$518 million (BHP Billiton share). Commissioning is expected to be completed in mid calendar year 2008, and ramp up to steady state production will take place in subsequent months.

BHP Billiton’s President Aluminium, Alex Vanselow, said: "This expansion is consistent with our strategy of focused investment in high quality and low cost alumina capacity. The expansion enhances BHP Billiton’s long alumina position, enabling us to meet increasing market demand for alumina."

The expansion project will include upgrades to the existing production unit and duplication of the upgraded line.

BHP Billiton has a 36% interest in the Alumar Refinery, the remaining interest is held by Alcoa affiliates 54% (operator) and Alcan 10%.

For further information please contact:

Australia

Jane Belcher, Investor Relations

Tel: +61 3 9609 3952 Mobile: +61 417 031 653

Kaiser Aluminum and Boeing Reach Long-Term Agreement to Supply Heavy Gauge Aluminum Plate for Commercial Aircraft

Business Wire December 19, 2005 08:30 AM US Eastern Timezone

FOOTHILL RANCH, Calif.--(BUSINESS WIRE)--Dec. 19, 2005--Kaiser Aluminum today announced the signing of a new long-term contract with Boeing to supply heavy gauge aluminum plate for use in Boeing commercial aircraft products. The multi-year contract is expected to significantly increase the amount of Kaiser Aluminum fabricated products used by Boeing produced at Kaiser's Trentwood, Washington rolling mill.

"Kaiser Aluminum and Boeing have a long history of partnership and this agreement further solidifies the long-term relationship between the two companies," said Jack A. Hockema, president and chief executive officer, Kaiser Aluminum. "We are witnessing a significantly increasing need for Kaiser's high-quality aluminum products in aerospace manufacturing. In response, we're stepping up our commitment to meet our customers' need for high-quality aluminum sheet and plate products."

Hockema added, "Kaiser and Boeing also share a long history as major employers in the state of Washington and this agreement was made possible by the previously announced, planned expansion of our Trentwood facility near Spokane."

Kaiser Aluminum recently announced a $75 million capital investment to expand its Trentwood facility including the addition of a state-of-the-art heavy gauge stretcher, horizontal heat treat furnaces and other ancillary equipment, such as an ultrasonic inspection system, to complement existing capabilities. The expansion is slated to proceed over the next three years with full online capacity available in 2008.

Alcasa investing US$35mn to prepare for modernization - Venezuela

BNamericas, Chile Monday, December 19, 2005 18:11 (GMT -0400)

Venezuelan aluminum smelter Alcasa has started investing US$34.5mn in its carbon plant in order to start modernization plans next year.

"The idea is to adapt the carbon plant to make way for the modernization plan," an Alcasa executive told BNamericas.

During the first phase of the US$34.5mn plan the company will work on maintenance to improve installed capacity before investing US$16.5mn in grinding and compacting areas.

In addition the company will invest US$18mn in furnace no.1, which currently operates at 50%. "These works will take about seven months," according to the executive.

The company has earmarked US$104mn of government funds for the technological modernization plan which in addition to the carbon plant covers industrial services, smelting and rolling.

The Alcasa plant is in the industrial area of Matanzas, in the city of Puerto Ordaz, in the country's eastern region of Guayana. Alcasa is a subsidiary of state heavy industry holding company CVG.

By Harvey Beltrán, BNamericas.com

Geothermal Power Growth Surges in 2005, Says GEA

U.S. Newswire (press release), DC 12/21/2005 5:53:00 PM

Contact: Karl Gawell of the Geothermal Energy Association, 202-454-5264

WASHINGTON, Dec. 21 /U.S. Newswire/ -- In 2005, over 15 countries moved to expand their geothermal power production, according to the Geothermal Energy Association (GEA), the U.S. industry trade association. "The outlook for future growth is surging," commented Karl Gawell, GEA's executive director.

The United States is seeing its first wave of new geothermal power development in a decade. "The first new power plant resulting from a state Renewable Portfolio Standard (RPS) was commissioned in Nevada in 2005. This is the first of many new plants that will deliver clean, reliable electricity to consumers," Gawell noted. "Over 500 Megawatts (MW) of new projects have secured power contracts in 2005, with more expected in the coming year," he added.

Recent analysis produced for the Western Governors' Association (WGA) demonstrates a near-term potential of 5,600 MW of new geothermal power. New power prospects were identified in Alaska, Arizona, California, Colorado, Hawaii, Idaho, Nevada, New Mexico, Oregon, Utah, and Washington. Today geothermal electricity is produced in only four states, but with continued federal and state support, this could triple by 2010, according to GEA. Information on both the existing and new geothermal projects is available at: http://www.geo-energy.org/information/plants.asp.

While the U.S. has been the leader in geothermal power, its prominence faced serious challenges in 2005. The Philippines, which already produces nearly 20 percent of its electricity from geothermal sources, set its sights on outpacing the U.S. They expect to add 500 to 700 MW in the next 3 to 4 years to the 1,500 MW of power in operation. Eventually, the Philippines seeks to have as much as 10,000 MW of geothermal power.

Indonesia, another major geothermal producer, also has big plans for expansion. With over 800 MW of geothermal power operating today, the Indonesian government announced plans to increase production rapidly with a goal of achieving 2,000MW by 2009, and as much as 6,000 MW by 2020.

These developments mean that projections made earlier this year may already be out-of-date. In March, the International Geothermal Association (IGA) projected that geothermal power would grow from 8,900 MW in 2005 to 10,700 MW by 2010. According to GEA "recent developments indicate that over 13,500 MW should be on-line by 2010 - - representing nearly 50 percent growth in geothermal power production worldwide."

In addition to developments in the U.S., the Philippines and Indonesia, some highlights of 2005 were:

-- Canada: Testing and evaluation of Canada's first geothermal project have seen positive results, which means Canada will likely become the twenty-fifth country to produce geothermal power in the near future.

-- Germany: A deep-well geothermal power station, producing 3.36 MW, is in the midst of development near Munich. Initial drilling has already produced favorable results and demonstrates the potential for producing geothermal power from deep resources in areas outside of the major geothermal zones of the world.

-- Iceland: There are several new geothermal plants under construction which will be dedicated to supplying electrical power to aluminum companies relocating from Germany and the U.S. Also, plans are in place to drill a deep research well to help estimate the geothermal reserves of the country —- which are expected to be many times greater than previously thought.

-- India: The first geothermal project on the subcontinent was under preliminary development in the Ladakh region of Jammu and Kashmir. This is considered a pilot project for tapping an estimated 10,600 MW of geothermal power.

-- Iran: The first geothermal power plant in Iran has already been through 10,000 meters of drilling, and is set to be in production within the next few years. Iran could be the first country in that region to produce geothermal power.

-- New Zealand: Significant expansion of New Zealand's geothermal power production is underway. Permits were approved for a 60 MW power station in the northwestern area of the Wairakei-Tauhara geothermal field and for construction of a 70 MW power plant at the Kawerau field of the North Island, with more expected in the future.

-- Nicaragua: A 66 MW project is under development, with construction of the first 10 MW phase completed. Another 400 MW of new projects are under consideration.

-- East African: New projects are under consideration Djibouti, Ethiopia, Uganda, and Kenya. With potential of 7,000 MW and generation of only 130 MW, there is significant untapped potential in East Africa. The World Bank's new African Rift Geothermal Fund, which will begin operating in 2006, is expected to be a major catalyst for development in the region.

http://www.usnewswire.com/ /© 2005 U.S. Newswire 202-347-2770/

China to halt new aluminium projects

Business Times - Malaysia, Malaysia December 22 2005

BEIJING, Wed: China will halt spending on new aluminium projects as part of a plan to rein in uncontrolled expansion and ease energy demand.

The country also won’t approve investment in new mines and smelters for tungsten, molybdenum, tin, antimony and rare earths, its top planning agency said in a statement released today.

The ban excludes spending to upgrade smelters to reduce pollution, according to the National Development and Reform Commission.

Premier Wen Jiabao is trying to cool excessive investment in aluminium, steel and other industries, which has driven up raw material prices, increased pollution and spurred inflation in the world fastest-growing economy.

China makes a third of the world’s steel and is the biggest producer of aluminum.

Aluminium output capacity will reach 10.3 million tonnes this year, and exceed demand by 2.6 million tonnes, according to Liu Zhi, industrial policy director with the commission.

Aluminium is used in aircraft and beverage cans.

China has imposed several measures to discourage aluminium production in order to ease energy demand.

This year the Government imposed taxes on aluminium exports and banned tolling, the import of alumina to make aluminium for exports.

Rising costs for the raw material alumina are causing losses for most major aluminium producers except for Aluminum Corp of China, which controls about half the nation’s alumina production, said Liu.

He declined to say when the Government will release a detailed development guideline for the aluminium industry. — Bloomberg

Romania: Alro Slatina Will Invest $500 mln to Double Production Capacity

Reporter.gr, Greece -12:44 - 21 December 2005 -

In order to increase aluminium deliveries to 420,000 tonnes a year until 2010, Alro Slatina will expand investments worth about $500 million to double production capacity, ACT Media news agency reports.

''The Strategy Marco Industry for Alro has focused, ever since the company's takeover, on the growth of production capacity for goods with high VAT.

For the implementation of the programme for the increase in production capacity, Marco Industries invested over $110 million in successive capital increases for the aluminium maker.

The investment plans until 2010 without taking into consideration the increase in the production capacity total $135 million.

The investment plan for Alum Tulcea, the new member of the group, is to be finalized soon. Over the past three years, the group has invested $145 million in Alro, mainly in the upgrade of production lines and in environment protection.

This year alone investments amounted to $25 million. Following the growth of aluminium deliveries, the company paid approximately $100 million to the state budget over 2002-2005.

The strategy Alro-Alprom-Alum includes the increase in capacities for all the units belonging to the group.

Alprom will produce 120,000 tonnes of profiles, as against 45,000 tonnes at present, whereas Alum will produce about 1 million tonnes of alumina a year. Last year, Alro's turnover stood at about $500 million.

Alro's gross operational revenues reached 401 million euros, and operational profit was of 41.9 million euros.

The net profit was of 31.5 million euros. Alro is the most important primary aluminum maker of Central and Eastern Europe and Romania's single manufacturer of aluminium and aluminium alloys.

The installed production capacity is of over 260,000 tonnes a year.

Alro is a joint stock company, listed on the Bucharest Stock Exchange. The main outlets for the aluminum produced by Alro are the EU countries (Italy, Greece, France, Germany, UK, Hungary etc), Turkey and the Balkan countries. The company also exports to the United States, Israel, South Korea and Saudi Arabia.

Alro owns the quality management certificate ISO 9001 and its products comply with the quality standards for primary aluminium of the London Metals Exchange - LME.

Source: ACT Media News Agency

New Zealand scraps Kyoto carbon-tax plan

Ely Times, USA 21 December, 2005

WELLINGTON - New Zealand scrapped plans on Wednesday to introduce a carbon tax from 2007, saying it would not achieve its aim of cutting greenhouse gases.

The tax of NZ$15 ($10.20) a ton of carbon was due to be introduced from April 1, 2007 under the country‘s commitment to the Kyoto protocol . It would have increased electricity, fuel, gas and coal prices, bringing in about NZ$360 million a year.

"Officials now advise that the proposed carbon tax would not cut emissions enough to justify its introduction," the Minister for Climate Change issues, David Parker, said.

The decision followed a review, which the ruling Labour Party agreed to in order to get support of two smaller parties for the new minority coalition government after the September 17 election.

Labour also could not guarantee a majority in the 120-seat parliament to have such a tax approved.

A narrower-based carbon tax targeting the electricity generators and major power users was possible and a more broad-based tax might be considered after 2012, Parker said.

Alternative policies aimed at reducing emissions would be considered early next year.

The scrapped tax would have cost the average household about NZ$4 a week, although the government had intended to recycle the revenue back into the economy through tax breaks and concessions in other areas.

Agreements exempting high-energy-consuming businesses from the charges in return for improved management of emissions were likely to be retained in some form, Parker said, assuming a narrower-based carbon tax goes ahead. Such businesses include the aluminum smelter at the bottom of the South Island operated by Rio Tinto subsidiary Comalco.

Under the 1997 Kyoto protocol, which came into force in February, developed countries must reduce their greenhouse gas emissions by about five percent from 1990 levels on average within the first commitment period of 2008-12.

New Zealand produces 70 million to 90 million tonnes of carbon dioxide a year, making it the fourth-largest per capita producer after the United States, Australia, and Canada.

About half of its greenhouse gases come from the methane and carbon-dioxide emissions of more than 50 million sheep and cattle, whose products earn about a third of New Zealand‘s export earnings.

The United States, the world‘s biggest air polluter, has refused to ratify the protocol, which it sees as flawed because it does not similarly bind developing countries. Australia has also refused to ratify the protocol.

Ten days ago in Montreal, environment ministers agreed to a road map to extend the Kyoto Protocol beyond 2012, as well as agreeing to launch new global talks to fight climate change.

($1NZ$1.38)

Novelis Takes Actions to Cap Metal Price Ceiling Exposure

Yahoo! News (press release) Thursday December 22, 6:57 am ET

ATLANTA, Dec. 22 /PRNewswire-FirstCall/ Novelis Inc. (NYSE: NVL - News; TSX: NVL - News) announced today that the Company has taken a series of actions to limit its short- and long-term metal price ceiling exposure.

The cornerstone of this initiative is the successful negotiation of certain can sheet contracts in North America which removes the metal price ceiling from those contracts. As a result, the Company expects that it will no longer have metal price ceiling exposure beyond 2006 that exceeds its internal hedge position. At the same time, Novelis is pleased to have achieved these changes while also maintaining or enhancing long-term volume as well as contract terms and conditions.

Novelis also outlined further steps it has taken to minimize its exposure during the fourth quarter of 2005 and during 2006:

* For the fourth quarter of 2005, the Company has established metal positions such that its maximum ceiling price exposure impacting Regional Income beyond its internal hedge position in the quarter is expected to be less than $5 million.

* For the first half of 2006, the Company has hedged its metal price ceiling exposure (above its internal hedge position) through the purchase of call options positioned to cover the exposure at the ceiling price.

* For the second half of 2006, the Company's metal price ceiling exposure (above the Company's internal hedge position) has now been hedged with call option positions at various strike prices. As a result, the Company's maximum potential metal price ceiling exposure impacting Regional Income (above its internal hedge position) is expected to be approximately $45 million beyond the cost of the options, assuming the current Midwest premium. Novelis said that at any point between today and 2007, should an economic opportunity arise to further limit the remaining metal price ceiling exposure for the second half, the Company will consider taking such actions.

Approximately 20% of the Company's total volume is currently subject to contracts with a metal price ceiling. As a result of these actions, the percentage of the Company's total volume subject to contracts with a metal price ceiling should drop to approximately 10% of the Company's total volume by 2007. The Company remains committed to eliminating all remaining metal price ceiling contract provisions as soon as possible.

"As an aluminum conversion business, one of our highest priorities must be to minimize, to the extent possible, metal price exposure and volatility to our earnings," said Brian Sturgell, president and chief executive officer. "While a metal price ceiling has been a standard component in can sheet contracts in North America since 1996, the industry has not previously encountered a sustained level of high metal prices like those existing today. As a result, we have undertaken two major initiatives. First, we have announced and are taking actions toward the elimination of the ceiling concept in all of our can sheet contracts. Second, in late September, we significantly revised our hedging policy and initiated the actions necessary to cap our remaining metal price ceiling exposure in a comprehensive manner, while at the same time ensuring that our business practices continue to be aligned with the Novelis conversion business model."

The financial impact of purchasing the 2006 options was a cash outflow of approximately $43 million in 2005, provided for by utilizing a portion of the Company's strong cash flows during the year. The Regional Income impact to the first half of 2006 will be an expense of approximately $29 million. The Regional Income impact on the second half of 2006 will be an expense of approximately $14 million. These expenses will be incurred as the options mature in 2006.

Other Metal Price Impacts

The Company said that it will continue to be impacted by metal price movements unrelated to metal price ceiling contracts. These are associated with its Brazilian smelter metal sales and recurring metal timing differences. Novelis accounts for its inventory on a weighted average cost basis. Virtually all of its sales are made on the basis of metal price plus conversion price. Metal timing differences arise due to the difference between the price of metal charged to customers in a given period and the price of metal charged to cost of goods sold in that period.

Internal Hedges

Novelis' total volume that includes a metal price ceiling in 2006 is approximately 20% of its aggregate annual global volume. Novelis' internal hedges cover approximately one-half of its current metal price ceiling volume or approximately 10% of its aggregate annual global volume. The portion covered by the Company's internal hedges is calculated by taking Novelis' full volume of production from the Company's Brazilian smelters and a portion of the volume from the Company's used beverage can (UBC) purchases. The Company assumes in the calculation that UBC spreads will continue to move relative to high metal prices as they have in the past.

In addition to the above, a portion of Novelis' can sheet sales volume is represented by commercial tolling arrangements that also reduce the Company's hedging requirements. Under these arrangements, the Company converts scrap back into can sheet for customers, an activity that represents no metal risk to Novelis.

Novelis is the global leader in aluminum rolled products and aluminum can recycling. The Company has 36 operating facilities in 11 countries and more than 13,000 employees. Novelis has the unparalleled capability to provide its customers with a regional supply of technically sophisticated rolled aluminum products throughout Asia, Europe, North America, and South America. Through its advanced production capabilities, the Company supplies aluminum sheet and foil to the automotive and transportation, beverage and food packaging, construction and industrial, and printing markets. For more information on Novelis, visit http://www.novelis.com.

Statements made in this news release that describe Novelis' intentions, expectations or predictions may be forward-looking statements within the meaning of securities laws. Novelis cautions that, by their nature, forward- looking statements involve risk and uncertainty and that Novelis' actual results could differ materially from those expressed or implied in such statements. Important factors which could cause such differences include an increase in the price of aluminum (or premiums associated with such price), an increase in the price of derivative instruments, a default under the new can sheet contracts, an increase in energy costs, global supply and demand conditions for rolled aluminum products, changes in the relative value of various currencies, demand and pricing within the principal markets for the Company's products, changes in government regulations, particularly those affecting environmental, health or safety compliance, economic developments, relationships with (and financial or operating conditions of) customers and suppliers, competition from other aluminum rolled products producers as well as from substitute materials such as steel, glass, plastic and composite materials, and the level of our indebtedness and ability to generate cash and other factors relating to the Company's ongoing operations. Reference should be made to Novelis' registration statement on Form S-4, as amended, filed with the Securities and Exchange Commission for a discussion of major risk factors.

ALSCON: FG in a fix as RUSAL pulls out of negotiations

Nigeria Daily Independent, Nigeria Friday 23rd December, 2005 HOME | Previous Page

By Bassey Udo, Energy Editor

The Federal Government appears to be in a fix over the sale of the $3.2 billion Aluminium Smelter Company of Nigeria (ALSCON), Ikot Abasi, Akwa Ibom State following the withdrawal by Russian Aluminium (RUSAL) from further negotiations on the take over of the plant.

Daily Independent gathered that representatives of RUSAL left the country immediately following the Federal Government’s rejection of the conditions given before being the company would be allowed to take over the management of the plant as core investor.

Controversy has dogged the path of the plant’s privatization following the disqualification of an American firm, BFIG after it was declared winner of the bid conducted June 20, 2004.

Following the disqualification, BFIG went to an Abuja High Court demanding an order on the Federal Government to rescind the decision by the Bureau of Public Enterprises (BPE).

But, while the case was still going on, negotiations were going on secretly between Federal Government representatives and RUSAL, which was disqualified during the bid for submitting a conditional bid in violation of the stipulated guidelines.

Prior to the November 23 judgment by the Abuja High Court on the BFIG case, representatives of RUSAL were reportedly drafted to Abuja to wrap up their negotiations that have been going on since August 2004.

The arrangement allegedly ran into confusion over the real status of RUSAL in the negotiations, against the backdrop of alleged links with Dayson Holdings Limited registered in the British Virgins Island, which is reportedly has connections with some highly placed government officials in the Presidency. Consequently, RUSAL was said to have put forward some stiff conditions, which the Federal Government found unacceptable.

Apart from an offer of $250 million for the plant, RUSAL was said to have demanded the opening of an Escrow in London into which it will pay $50 million for 17.5 percent of the 77.5 percent equity the government is offering to interested investors, while a proportionate share certificate should be issued indicating its ownership of the equity stake in ALSCON.

Besides, RUSAL also asked the Federal Government to bring all the title deeds, including land title as well as all documents relating to ALSCON into the Escrow, before it complies with its condition to pay in the $50 million into the Escrow Account.

On the balance of the $200 million it offered, RUSAL was said to have agreed to pay only after the dredging if Imo River, which they offered to select and pay the contractor, before the International Maritime Authority (IMA) certifies accessibility of the waters, which experts say it will take at least five years to complete.

"When the BPE saw that RUSAL was trying to inflate the cost of dredging, and eventually bring the cost for the plant within $200million, they were angered that RUSAL will end paying $200million for the plant five years. Negotiations naturally came to a head before RUSAL left the country without signing the share purchase agreement (SPA)," a source in Abuja said yesterday.

With the withdrawal of RUSAL, it is difficult to determine what next step the Federal Government intends to take toward the privatization of the ALSCON.

BFIG, which was declared winner and preferred bidder of the plant, has already filed an appeal on the judgment turning down its request for the revalidation of its winning.

The latest development is already earning the American firm some sympathy even from the host community of Ikot Abasi, which is already calling on the government to hand over the company to BFIG, ensure that the plant resumes operations soon.

Hydro Take Full Ownership of Hamburg Aluminium Casthouse

Azom.com December 23rd, 2005

Hydro will take full ownership of the casthouse at Hamburger Aluminium-Werk (HAW). Today, the company signed a contract with representatives of the other HAW co-owners, Alcoa and AMAG, valid as of 1st January 2006.

The Hamburg casthouse will produce aluminium sheet ingots based on aluminium ingots and aluminium scrap. The casthouse will be Hydro’s largest fully owned remelting plant with a capacity of 130,000 tonnes per year, and it will ensure the supply to Hydro’s rolling mill at the same location.

The casthouse will have about 100 employees and be a part of Hydro’s extensive network of aluminium casthouses in Europe and worldwide.

"This is an important step to secure metal sources in Germany and aluminium sheet ingot supply for our customers," stated Volker Stutz, head of Hydro’s business unit for sheet ingot.

Hydro will also acquire some key infrastructure units like power unit, water processing and treatment units from HAW to ensure continued services to the site´s operations. This also includes the hiring of some HAW employees by the Hydro Hamburg rolling mill.

Hydro’s two aluminium units in Hamburg, the rolling mill and the casthouse, will after these transactions have more than 620 employees.

Malaysia: China to provide financing for aluminium smelter plant

Metals Place, UK - Source: Bernama 23 Dec 2005

China's Exim Bank has agreed to provide a 10-year soft loan to finance the cost of building an aluminium smelter plant in Sarawak proposed by a China-Malaysia consortium.

A source familiar with the deal told Bernama that Exim Bank has signed an agreement to give the loan to Shandong Luneng Group Ltd, one of the largest independent power producers in China, and State Grid Corp.

The source said the loan was offered at an attractive low rate of between two and three percent per annum.

The aluminium smelter plant is estimated to cost US$3.2 billion (RM11.8 billion).

The Chinese companies are expected take up 50 percent interest in the project, with the balance to be held by the Malaysian members.

The two Malaysian companies in the consortium are Sarawak-based Cahya Mata Sarawak Bhd, and Press Metal Bhd, the country's biggest manufacturer of extruded aluminium.

The investment, if approved, will be China's single largest investment in Malaysia. It will also ensure that the products churned out by the smelter are bought by Chinese companies.

The consortium is also proposing to buy all the power generated by the RM9 billion Bakun hydroelectric dam at two US cents (7.54 sen) per kilowatt hour.

The Bakun dam, once completed, will have a production capacity of 2,400 megawatts.

Financing for the purchase of the power will also come from China with a two-year moratorium, the time needed for the smelter to be built and operated, the source said.

"China is willing to give a favourable loan because it wants to export its smelter plants out of the country as smelters eat up a lot of power," the source added.

On Wednesday, it was reported that China's National Development and Reform Commission plans to halt investment in new copper smelters with a capacity below 100,000 metric tonnes a year and stop spending on new aluminium projects within the country.

Aluminum May Rise on China Demand, Smelter Shutdown at Alcoa

Dec. 27, 2005 (Bloomberg)

Aluminum prices may rise for a fourth year because of a combination of increasing demand and a relative shortage of smelters to make the metal.

Demand will jump by 6.2 percent next year, outpacing a 4.7 percent gain in production, analyst Sophie Spartalis of Sydney- based Macquarie Bank Ltd. said in a Dec. 6 report. Alcoa Inc. and Alcan Inc., the world's two largest aluminum makers, are closing smelters because of record power costs.

``For any aluminum smelter, power represents between 30 and 40 percent of costs, and that's critical,'' said Tom Campbell, a managing director in New Zealand at the aluminum unit of Rio Tinto Group, the world's third-biggest mining company. ``The trend in energy prices has affected smelters worldwide.'' Campbell said he reduced production after electricity costs quadrupled.

Aluminum, used in cans, cars and airplanes, is likely to increase 11 percent to average $2,094 a metric ton in 2006, according to the median estimate of 11 analysts surveyed by Bloomberg. Prices of the metal for immediate delivery averaged $1,895 a ton on the London Metal Exchange this year.

Higher prices would bolster profit at producers including Pittsburgh-based Alcoa and Alcan, while driving up costs for Coca-Cola Co. and Boeing Co. Power prices are forcing aluminum plants to close in the U.S. and Europe and encouraging construction of smelters where energy costs less, such as Oman and Iceland.

Rising aluminum orders mean buyers will use almost 400,000 tons of the metal now in inventories.

``For demand, China is the key factor,'' said Peter Chilton, who helps manage A$1.1 billion ($827 million), including resource stocks, at Constellation Capital Management in Sydney.

Closures

Alcoa is shutting a 195,000 ton smelter in Frederick, Maryland. Montreal-based Alcan plans to close a 66-year-old French smelter with a capacity of 50,000 tons. Oslo-based Norsk Hydro ASA, the world's fourth-biggest aluminum maker, is idling plants in Germany, where wholesale electricity prices for next year have risen 54 percent in the past 12 months and reached a record high.

Alcan said in September that 1.6 million tons of capacity may close globally. Only two smelters will open in 2006 and 2007, says Soleil Securities analyst Charles Bradford in New York.

Energy and raw material costs at Alcoa increased by $578 million in the first nine months of the year, the company said in October. Charts supplied by Melbourne-based BHP Billiton, the world's biggest mining company, showed its aluminum smelting and refining costs rose as much as 40 percent in the last two years, UBS AG said in a Nov. 23 report.

Costs

``We haven't ever before seen such sharp increases in costs as over the past two years,'' said Eivind Reiten, chief executive officer of Norsk Hydro. ``It's more than $200 per ton. It has to do with rising energy costs, with rising alumina costs. This increase puts pressure on the weakest smelters.''

The cost of alumina, which is smelted to make aluminum, has jumped about 40 percent this year, according to Metal Bulletin, an industry publication. To make one ton of aluminum requires about two tons of the raw material.

The price of aluminum for delivery in three months jumped to $2,276 a ton on Dec. 23, the highest close since January 1989, after a decision by 23 smelting companies in China to cut output by 10 percent.

The smelters account for more than 60 percent of production in China, the world's largest supplier of the metal. Rising alumina costs have led to losses at many local smelters.

Output

``Chronic tightness in alumina availability is constraining global aluminum production, with the impact being felt most notably in China,'' said Macquarie's Spartalis.

Forty one smelters in China stopped production this year because of higher costs and attempts by the government to control pollution, resulting in a loss of 550,000 tons of aluminum, Pan Jiazhu, vice chairman of China's Nonferrous Metals Industry Association, said Dec. 8.

``A lot of smaller businesses are going to get washed out,'' said Brian Hicks, an analyst at Texas-based U.S. Global Investors Inc., which has $2.4 billion under management, on Dec. 16. ``The market is going to get tighter going forward.''

China may have 2 million tons of spare capacity idled because of a lack of power and alumina, BHP Billiton said Nov. 23. That extra smelting capacity could lead to excess supply of the metal later, said Atul Lele, who helps manage about $224 million at White Funds Management in Sydney.

``That can lead to oversupply from six months to 12 months on,'' Lele said. ``But in the next six months, the momentum for aluminum is very strong and prices will rise.''

Demand

China, the world's largest user of aluminum, may consume 19 percent more of the metal next year as growth in the world's fastest-growing major economy stokes demand for autos and homes, China Nonferrous Metals Industry Association's Pan said.

Rising incomes in China are increasing private car ownership, and vehicle sales may rise to 9.4 million units in 2010 from 5.1 million last year, according to the government. BHP Billiton expects China's usage to more than double by 2015.

``Growth in Chinese consumption is expected to remain above 10 percent and keep global demand growing above 5 percent until at least 2008,'' RBC Capital Markets analysts led by Fraser Phillips said in a Dec. 6 report.

To contact the reporter on this story:

Tan Hwee Ann in Melbourne at hatan@bloomberg.net

Smelter 'easing fears' in La Brea

Trinidad & Tobago Express, Trinidad and Tobago Tuesday, December 27th 2005

South Bureau

In light of concerns expressed by certain sectors of the community, Project Manager of ALUTRINT Ltd, Philip Julien, has made ot clear that his company is committed to promoting education and training programmes for the people of La Brea and surrounding communities.

ALUTRINT is a new company that is building an integrated aluminium complex at Union Estate in La Brea. It is owned 60 per cent by the Government of Trinidad and Tobago and 40 per cent by Sural of Venezuela. When completed, the complex will contain a smelter, a cable plant as well as a wire and rod mill. Speaking at the the recent annual awards ceremony of the La Brea Community Football League, held at the La Brea Communoty Centre, Julien said: "ALUTRINT has already begun collaboration with the National Energy Skills Centre (NESC) and the University of Trinidad and Tobago (UTT) to ensure that appropriate education and training programmes are developed and implemented by these organisations to match our needs for qualified persons and to meet the needs of your community."

Julien, whose company sponsored this year's league, emphasised that, at the end of construction, ALUTRINT will provide about 800 direct job opportunities at its "world class, cutting-edge facilities" in La Brea. "I can't begin to tell you", he added, "all the different kinds of opportunities that a project of this nature will bring especially in the long-term. For instance, over 1000 additional jobs will be created indirectly through spin-off commercial and industrial activities located right here in your community. Our vision is to employ as many persons from the area at the ALUTRINT complex once construction is completed. It is going to be a state-of-the-art facility and employees would to have be qualified . To achieve this, we will provide the training opportunities so that people from this part of the country could acquire the necessary skills."

Julien, a McGill University graduate in chemical engineering with a minor in environmental engineering, previously worked in Canada in the Environmental Protection Services section of Canada-based engineering firm.

He said that the aluminium complex at Union represented a new approach to industrialisation and that ALUTRINT will be involved in more than producing aluminium. He also viewed the involvement of government in ALUTRINT as a positive development. "With the Government of Trinidad and Tobago as a major shareholder," he added " you can be assured that the community will be given a high priority". He said that ALUTRINT was a "new generation state enterprise with new generation thinking."Â

He said: "For the first time we will translate our natural resources into significant value-added downstream production. We will take our natural gas and covert it to power which will then create metal and this allows us to create rods, wires, cables, wheels and automotive parts. All of this in an environmentally compliant and safe complex."

Julien concluded by urging the people of La Brea, especially the youths, to make use of the opportunities that ALUTRINT will provide to upgrade their skills.

T&T's 'freebie' to Alcoa

Jamaica Gleaner, Jamaica : Wednesday | December 28, 2005

PORT OF SPAIN (Trinidad Guardian)

NO MATTER how they hide, disguise or package it, the deal is 15 years free gas to Alcoa plus subsidised electricity.

That, according to informed sources, is a conditionality to which the Trinidad Government has agreed, in order to cut the deal with Alcoa and their proposed 341,000 metric tonnes aluminium smelter in the Cedros Peninsula.

Curtis Williams, writing out of Washington DC, says that "bpTT has guaranteed the Government that the plant will have the use of a specified amount of free gas for a 15-year period." (Business Guardian, April 28, Page 8)

No government source has confirmed or denied that report, so we have to conclude the report is on target.

Why 15 years? Why not five or 20? What is the specified amount? Daily requirements perhaps? All of that is top secret. And no questions from the Opposition bench as yet, and none apparently forthcoming.

GAS GOING TO ALCOA

While it may appear that the gas will be going to the government of T&T, in truth and in fact, the gas will be going to Alcoa, the government fronting the give-away.

The government has agreed to build the electricity plant for the exclusive use of Alcoa.

The government will finance, construct, operate, fuel and maintain the plant and then sell for nine cents a KW, the same electricity for which the people of T&T are currently paying 15 cents per KW.

One wonders to what extent the Government, which is making a strong bid for headquartering the FTAA, is violating the free trade idea by offering such a generous subsidy to Alcoa.

Did Ispatt not encounter some difficulties a few years ago with 'subsidised steel' in the United States? One wonders how the U.S. will rationalise the entry of subsidised aluminium?

What more does the deal require T&T giving to this international conglomerate?

STATE-OF-THE-ART PORT

In addition to site development, the Government will have to build Alcoa a state-of-the-art port. (NB: The proposed smelter plant will reportedly consume 570 MW of electric power, which is approximately 50 per cent of our current power consumption in T&T).

Additionally, the Government will have to provide millions of gallons of WASA water on a daily basis, since Alcoa does not intend to build their water system to cool their plant. This in a situation where the people of Icacos have not received pipeborne water for the past three weeks.

Additionally, Alcoa will take at least 1500 acres of residential, forest and agricultural lands from the original 2,000 acres plus site for their smelter.

The Alcoa smelter also calls for the forcible relocation of more than 100 families, the destruction of seven community sites of worship - a temple, a mosque, a pentecostal church, a catholic church, an Anglican church, a seven day Adventist church, an in-house open Bible church; the Chatham Government School, the Chatham Community Centre, the Chatham Youth Camp--presumably office space for Alcoa; the WASA plant, to be soon, most probably, the Alcoa/WASA water system; two recreation grounds; a former free-slave settlement called Bourg Congo, ancestral abode of many residents of Chatham; the sea coast and surrounding seas, which will be destroyed and contaminated, resulting in the eventual destruction of the Granville Reef, sanctuary for turtles and various species of rock fish.

The silver hatchet fish, Gasteropelecus sternicla, found naturally only in Chatham, already endangered, may be lost from the wilds forever.

HERITAGE CONSUMED

The fact of the matter is that a whole village, a quiet, romantic part of the heritage of T&T will be consumed in one enormous gulp by Alcoa, through the instrumentality of the government and a silent but conspiring Opposition.

All this in a scenario where Alcoa have no plans in place for dealing with spent pot-liners, a deadly waste that comes with the deal. As well as polycyclic aromatic hydrocarbons or PAHs, a by-product of the waste cooling water that may more than likely be discharged into the sea ... or perhaps into the underground water system?

Destroying a whole community ... making the people of the Cedros peninsula a foreign reservation in their own country.

Of what value is Citizen, if your Government will bulldoze you out of existence in the interest of foreign conglomerates?

But in the mind of the Government some citizens are more equal than others.

Those "behind God's back" are surely different from those at the Breakfast Shed or on the "Drag."

They, the Government insists, "will surely eat of the bread that the Devil kneads."

We shall see.

Yet, to give away our gas--15 years of free gas to Alcoa--is a matter for national uproar.

Aluminium business recap in Bahrain

AME Info, United Arab Emirates Wednesday, December 28 - 2005 at 16:01 GMT+4

'A first step in an ambitious event: Aluminium Middle East 2005 and APPA 2005 to promote investor's interest in the aluminium sector in Bahrain brought excellent results'

These were concluded at the three-day, first-ever Aluminium Middle East 2005 exhibition held at the Bahrain International Exhibition Centre, between 5th and 7th December 2005.

Following the successful outcome of this event, a recap meeting was held by Bahrain Convention and Exhibition Bureau (BCEB), delegates from the Ministry of Industry and Commerce, UNIDO, ALBA and other major key players in Bahrain's aluminium industry, met last week at the Bahrain International Exhibition Centre. The focus of the meeting is to establish and enhance a continued expansion of the aluminium downstream industries in Bahrain and the Middle East as well as to further develop cooperation of industries throughout the world.

The Ministry of Industry & Commerce also decided after receiving positive indications of interests from major industry players to organize numerous overseas Trade Missions and Exhibitions to Hannover Messe 2006 and Aluminium Essen 2006 (Germany) along with Aluminium China 2006 to be held in Shanghai. The Ministry foresees that by having Bahrain present at some of the biggest fairs in the world will raise the Kingdom's distinctiveness and standard, thus, to be able to promote Bahrain's Industries and concurrently encourage foreign investments and technology transfer to Bahrain and the Region.

The meeting also confirmed Bahrain's role as a regional centre for business cooperation within the GCC region. UNIDO had earlier designated Bahrain as the focal point for the Arab region for a capacity-building programme for promotion of industrial investment. The Forum has been the successful beginning for further action.

Further more, to extend and promote the potential Industries of the Kingdom, the Ministry of Industry and Commerce & BCEB are also setting up the Bahrain Permanent Exhibition Centre (BPEX) to showcase a wide range of different industries to regional and international investors which will cover the Heavy Industries (i.e. Aluminium, Oil & Gas, Engineering, etc.), Light Industries (i.e. F&B, Medical & Pharmaceutical, Construction etc.) and Business Service sectors (i.e. Banking, IT, Logistics, etc.). BPEX is expected to be in full operation by early 2006.

The meeting ended in an agreement that a local and regional Aluminium Association should be established, thus will enable the Aluminium Industry to establish better ties with the global aluminium industry. Bahrain will take the initiative to establish a Secretariat for the local Aluminium industry which will eventually take the lead in the creation of an Aluminium Association.

Pavlodar smelter project absorbs $112 mln in 2005

TMCnet [December 29, 2005]

(Interfax News Agency Via Thomson Dialog NewsEdge)PAVLODAR. Dec 28 (Interfax) - The construction of an $850-million aluminum smelter in Pavlodar, Kazakhstan, has absorbed $112 million to date, Kazakhstan Electrolysis Plant, a company owned by Switzerland's Corica AG, which is in charge of the project, told Interfax.

Construction of the smelter's first 150,000 tpy stage began in May 2005. The first equipment should be installed at the beginning of 2006.

The company also said that it intended to install purpose-built gas scrubbers made by Norway's Alstom in 2006.

Environmental spending related to the project amounts to $447,800 so far.

Corica AG pledged at a 2003 tender to build the smelter in return for 31.76% of Aluminum of Kazakhstan, which controls Kazakhstan's alumina industry. The Swiss company must have 60,000 tpy of capacity in place in December 2007 and is due to build the whole 125,000 tpy first stage by September 2008.

The second stage, capacity 125,000 tpy of aluminum and 136,000 tpy of pre-baked anodes, should be introduced between 2010 and 2012.

The smelter's total capacity will be 250,000 tonnes of aluminum per year.

The whole smelter will cost $850 million to build.

Norsk Hydro sees decision in 2006 on involvement in Baltic gas pipeline

Forbes 12.29.2005, 07:56 AM

BERLIN (AFX) - Norsk Hydro ASA CEO Eivind Reiten expects a decision to be made about the company's involvement in the Baltic gas pipeline during 2006, Financial Times Deutschland (FTD) reported.

Norsk Hydro wants to partner Gazprom in the North European Gas Pipeline project, alongside E.On AG's Ruhrgas and BASF AG unit Wintershall.

Reiten told FTD that Norsk Hydro wants a large enough stake in the pipeline project to give it clout, though he would not be any more specific than that about the size it is looking for.

'It is now up to the Russian side to make a concrete offer,' he said.

He said having ex-chancellor Gerhard Schroeder as head of the pipeline consortium's committee will gives it an advantageously strong leadership.

Norsk Hydro's executive vice president for oil and energy Tore Torvund told the newspaper the company is 'very confident' it has a good chance of Gazprom taking it on as a partner to develop the Shtokman gas field in the Barents Sea.

Turning to Norsk Hydro's aluminium operations, Reiten told FTD: 'As a production location, Germany will remain one of the key countries for our aluminium business in the next few years.'

Norsk Hydro announced in autumn that it will shut down its sites in Hamburg and Stade in Germany. Reiten said to FTD that it has no plans to close its aluminium plant and processing operations in Neuss.

Reiten told the newspaper: 'We are not shutting down Neuss, but will improve costs and operations.'

He added: 'Profitability in Germany is under great pressure at the moment because of high energy prices, and is not satisfactory.'

In mid-December, Reiten announced that Hydro's aluminium division is aiming to raise its profit margin to 9 pct by 2010 from 7 pct currently.

Reiten told FTD that German demand remains poor and he does not expect any significant pick-up in the coming year.

He said there are no plans to cut aluminium production, even though Norsk Hydro is planning to build a 570,000 tonne aluminium smelter in Qatar.

'The aluminium market is growing, so we will need all the capacity we have,' Reiten told FTD.

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