AluNews - January 2005

Greenhouse emissions market begins

Financial Times, UK January 2 2005 19:54

By Fiona Harvey, Environment Correspondent and Raphael Minder in Brussels

The buying and selling of greenhouse gas emissions will begin in earnest this week as the Europe Union's trading scheme - the first of its kind in the world - officially began on Saturday, tying companies in a variety of energy-intensive industries to strict limits on the amount of carbon dioxide they are allowed to produce.

Four EU countries have not yet agreed their national carbon emission limits under the scheme, which will help Europe to meet its obligations to cut greenhouse gas emissions under the UN-brokered Kyoto protocol on climate change. Greenhouse gases are blamed for trapping heat on earth, causing global warming.

Among the laggards, Italy, Poland and the Czech Republic submitted initial plans judged unsatisfactory by the European Commission. The only country to have so far sent nothing to the Commission is Greece, which has caused some embarrassment in Brussels since the EU's new environment commissioner, Stavros Dimas, is Greek.

Companies in these countries are expected to monitor their emissions from the start of the scheme in any case, as their carbon emission limits will be set within a few months, but businesses have complained of the uncertainties.

Businesses in the UK will not be issued with their final allocations until February, according to Elliot Morley, the UK environment minister, after the UK government revised its national ceiling on carbon emissions. He advised businesses to use their estimated emissions allocations, as the final figures would not change much.

The scheme covers industrial installations producing carbon in sectors judged to be the most serious emitters. These are electricity generation; heat and steam production; mineral oil refineries; the production and processing of ferrous metals; the manufacture of cement, bricks, glass and ceramics; and the pulp and paper sector.

The scheme will operate on a "cap and trade" basis, by which member states set an emissions cap for each of the industrial installations covered. Businesses can sell any carbon allowances they do not use, or buy extra allowances on an open market. About 12,000 installations will be included, accounting for almost half of Europe's overall emissions.

Trading in carbon emissions futures has already been going on, through a number of carbon brokerages which have set up in London and several other European cities, but only now can deals be formally completed under the scheme.

In December, the European Commission adopted the final piece of legislation to launch the scheme, namely the creation of an electronic registries system that will keep track of the ownership of the allowances as they change hands in the market. Once in place, the registries system will allow a "spot" trading market to develop, replacing the existing system of forward contracts.

Emissions of carbon dioxide from transport and domestic residences will not be covered by the scheme. However, in the second stage of the scheme, from 2008 to 2012, it may be expanded to include sectors such as chemicals, aluminium and aviation.

The trading scheme is seen as a major credibility test for the EU, which has sought to take a lead in combating global warming. However, in practice the EU is struggling to meet its own targets to reduce gas emissions, notably because transport emissions have continued to soar. According to the latest figures, EU transport emissions were 22 per cent higher in 2002 than in 1990, largely offsetting progress made in other sectors.

Although the EU scheme will be independent, other countries that have ratified the Kyoto protocol may choose to join in the future. Mr Morley said: "There has been interest from other countries already. We see this becoming the nucleus of a global trading scheme."

Aluminum Falls Most in 16 Years, Copper Slides on China Concern

Jan. 4, 2005 (Bloomberg)

Aluminum prices in London plunged the most in more than 16 years and copper fell on speculation that investors are reducing holdings as Chinese demand for metals slows, halting a yearlong rally.

``There's got to be some sort of shift out of commodities this year,'' Maqsood Ahmed, an analyst at Calyon Financial in London, said in an interview. ``Maybe it's happening sooner than we think.''

Global demand growth for aluminum will slow to 5.3 percent in 2005 from 8.1 percent last year, Barclays Capital said Dec. 16. In China, the world's top copper user, consumption gains will drop to 10 percent from 15 percent in 2004, Barclays said. Metals used in appliances, autos and homes surged last year as demand exceeded mine output and speculative investors bought commodities in a bid for higher returns.

Aluminum for delivery in three months fell $155, or 7.9 percent, to $1,803 a metric ton on the London Metal Exchange, the biggest decline since June 1988. The lightweight metal used in food packaging and construction gained 22 percent in 2004, the most in five years.

Copper fell $238, or 7.6 percent, to $2,912 a ton, its biggest one-day drop since Oct. 13. The metal, used in wiring and plumbing, advanced 37 percent on the exchange in 2004, the biggest riser among seven metals. It traded at a 16-year high of $3,179.5 on Oct. 11.

``There has been selling from funds'' that piled into the metals markets last year, Roy Carson, a trader at Triland Metals in London, said in a telephone interview.

Narrowing Deficit

The prices of oil, gold and base metals have fallen at the start of this year due partly to selling by hedge funds and other speculators who bought amid surging global demand for raw materials in 2004. Commodities priced in dollars also were purchased to protect against the decline of the dollar against other currencies, including the euro and yen.

Other metals on the LME also closed lower. Lead dropped 8.4 percent to $920 a ton, its biggest fall in 15 years. Nickel had its biggest slide in a month, down $675 to $14,200. Zinc was down $76, or 6.1 percent, to $1,170. Tin fell $190 to $7,575.

Copper demand in 2005 will rise 4.6 percent to 17.5 million tons, exceeding production by 277,000 tons, Barclays Capital said in its report last month. The deficit in 2004 was 684,000 tons, the bank said. Producers such as Phoenix-based Phelps Dodge Corp. raised output in 2005, narrowing the shortfall.

China, the world's No. 2 user of aluminum, is trying to slow demand growth to avoid inflation. The nation's government limited loans and raised interest rates in 2004.

`Top of Cycle'

``We think we have seen the top of the commodity cycle,'' Nick Moore, an analyst at ABN Amro in London, said in a telephone interview. ``We are in the endgame.''

Shares of Pittsburgh-based Alcoa Inc., the world's largest aluminum producer, fell 56 cents, or 1.8 percent, to $30.43 at 4:15 p.m. in New York Stock Exchange composite trading. Montreal- based Alcan Inc. fell 55 cents to C$58.25 ($47.64) on the Toronto Stock Exchange.

Phelps Dodge, the world's No. 2 copper producer, fell $3.75, or 3.9 percent, to $92.05 in New York and has dropped 9.4 percent since they closed on Dec. 29 at $101.55.

``Phelps Dodge has been a leader of the copper market,'' Michael Purdy, vice president at ABN Amro in New York, said in a television interview.

Other metal producers also fell. Shares in Melbourne-based BHP Billiton, the world's largest mining company, closed in London down 4.2 percent to 25.5 pence, the biggest one-day fall since Oct. 13. London-based Anglo American, the world's No. 2 miner, dropped 1.6 percent to 1,212 pence a share. Rio Tinto, the world's No. 3 miner, dropped 3.3 percent to 1,482 pence.

Dollar's Drop

The dollar rose 1.2 percent to $1.3299 versus the euro at 1 p.m. in New York, after trading at a record low of $1.3666 on Dec. 31. The dollar's 7.3 percent drop against the European currency last year made dollar-denominated commodities cheaper for holders of euros.

``Commodities for much of December were matching the dollar blow-for-blow,'' ABN's Moore said. ``There's no reason why that shouldn't continue.''

LME-monitored copper inventory was unchanged at 48,875 tons, the exchange said in a daily report. The total shrank 89 percent in 2004 as consumers withdrew metal from storage.

Speculators increased their net-long position in New York copper futures in the week ended Dec. 28, according to U.S. Commodity Futures Trading Commission data.

``There was very good fund buying last week,'' Robert Barham, a trader at IFX Markets in London, said in a telephone interview.

Speculative long positions, or bets prices will rise, outnumbered short positions by 26,523 contracts on the Comex division of the New York Mercantile Exchange, the Washington- based commission said in its Commitments of Traders report. Net- long positions rose by 3,306 contracts, or 14 percent, from a week earlier.

To contact the reporter on this story:

Simon Casey in London at scasey4@bloomberg.net.

To contact the editor responsible for this story:

Stephen Farr at sfarr@bloomberg.net

CVG Alcasa: aluminum smelter producing 39 tonnes less per day than last month

VHeadline.com, IL, 4 Jan 2005

Venezuelan Guayana Corporation (CVG) subsidiary Alcasa says its aluminum smelter is on reduced producing 39 tonnes less per day than last month's daily average output of 545 tonnes.

A CVG-Alcasa press release says the shortfall us because 15 production cells are still out of action following a protest go-slow by workers in December and the plant is still affected by the Sintralcasa union protest seeking payment in advance of salary benefits.

Before the conflict CVG-Alcasa was at 545 tonnes per day ... but now it is trying to bring the 15 idled cells back into production ... at the height of the 5-day go-slow, Alcasa said it was losing 110 tonnes a day, but has recovered some output since.

Sintralcasa suspended the go-slow until January 15, while union officials are demanding a response to their demands ... but state-owned Alcasa says it does not have funds to satisfy the labor dispute which had prevented the company from returning to full operational capacity of 210,000 tonnes a year in 2004. Alcasa executives now say they will try to achieve this production goal in 2005.

Despite the disruption Alcasa's smelter had sold 19,061 tonnes in December, of which 5,286 tonnes were for the domestic market with export sales to the United States and Mexico. Total sales for 2004 increased to 182,628 tonnes from 174,000 tonnes in 2003, including 76,432 tonnes of laminated products and cylinders.

Meanwhile, Alcasa plans to build a 5th production line to increase annual production capacity to around 450,000 tonnes a year in 2007.

Initial contracts are to be signed with France's Technip and Pechiney as well as Swiss Glencore AG as Venezuela aims to increase annual aluminum production from a current 630,000 tonnes to more than 1 million over the next five years.

Chemical Reaction Likely Caused Plant Explosion

KOKH FOX25, OK 4 Jan 2005

An industry official says furnace fuel or an aluminum-water reaction likely caused a deadly explosion at a scrap metal plant in Muskogee.

Roland O'Brien-Brills of Accident Inspection Specialists says his opinion is based on photos of the explosion last Tuesday at Yaffe Iron and Metal Company.

He says furnace fuel explosion is caused when unburned fuel oil accumulates or is ignited. An aluminum-water explosion occurs when a large amount of water comes into contact with liquid aluminum.

Federal investigators are still looking for the exact cause of the blast.

The explosion killed plant employees Juaquin Prada and Ernesto Chavez, injured two other workers, destroyed two company buildings and damaged about 50 homes nearby.

New $49m smelter set to fire up in Kurri Kurri

Maitland Mercury, Australia Wednesday, 5 January 2005

A new $49 million furnace will be fired up at a Kurri Kurri aluminium smelter next week.

Chief executive officer Trevor Coombe said the new anode baking furnace at Hydro Aluminium would improve the plant's operational and environmental performance.

The new furnace replaces two existing furnaces, bringing it up-to-date with the world's best in aluminium technology.

"This is an exciting development for Hydro Kurri Kurri as the furnace will reduce the amount of gas usage per anode produced by 40 per cent," he said.

Anodes are blocks of carbon consumed in the aluminium production process.

For the past six weeks the furnace has been undergoing a "dry out" burn as the new refractory lining is slowly heated to remove moisture.

The first production firing will begin on Monday, with the initial batch of "green" anodes.

Residents can expect to see a plume of exhaust gasses coming from the furnace's stack for the next two weeks during the start-up phase of production.

But Mr Coombe said this was a safety measure employed to decrease the risk of part of the furnace being damaged while the moisture content is reduced and the temperature is risen above 100 degrees

"The Environmental Protection Authority has been notified that to ensure the reliable operation of the scrubbers in the future, they will be by-passed for up to two weeks while the furnace outlet temperatures rise," he said.

Concerned residents are invited to contact Mr Coombe on 4937 020.

The furnace upgrade is part of Hydro's continuing $100 million Smelter Upgrade and Retro-Fit program (SURF).

Base metals plunge

The Globe and Mail, Canada - Jan 4, 2005

By WENDY STUECK

Vancouver — Base metal prices plunged Tuesday, led by the steepest slide in aluminum in more than 16 years, amid speculation that slowing Chinese demand could stall a two-year commodities rally.

Global mining stocks also slumped, contributing to stock market losses in Canada, the United States and Europe.

Eight of the 10 biggest percentage losers on the S&P/TSX composite were miners.

"China is trying to slow its growth to about 7 per cent and there's a big risk if it slows more than that," said Rob Vanderhooft, president and chief investment officer at Greystone Capital Management Inc. in Regina. "People are getting skittish about it."

Last year's spectacular commodities rally was fuelled largely by Chinese demand, as the populous country gobbled up metals to build factories and consumer goods. This year, however, China's rapid growth is expected to moderate.

In a December report, Barclays Capital said demand growth for aluminum will slow to 5.3 per cent this year from 8.1 per cent in 2004. In China, the firm said, demand growth for copper will slow to 10 per cent from 15 per cent.

China surpassed the United States in 2003 as the world's biggest copper consumer.

Mr. Vanderhooft said he does not think Chinese monetary authorities will be able to slow the economy to a pace of less than 7 per cent and that fundamentals continue to argue for more robust prices ahead.

"But there will be hiccups along the way," he said.

Aluminum for delivery in three months fell $155 (U.S.) or 7.9 per cent to $1,803 a tonne on the London Metal Exchange, the biggest one-day decline since June, 1988.

Copper fell $238 or 7.6 per cent, to $2,912 a tonne, its biggest drop since Oct. 13. Prices for copper, a widely used industrial metal found in consumer goods ranging from cars to refrigerators, surged last year on strong demand from China, climbing by 37 per cent. Nickel dropped $675 a tonne to $14,200, and zinc and tin prices also fell.

But even if Chinese demand is slowing, it still remains strong enough to support base metal prices, said Raymond Goldie, an analyst with Salman Partners Inc. And with demand for aluminum, copper and nickel predicted to outstrip supply this year, commodity prices do not necessarily look overheated, he said.

"The reality does not seem to require a sharp drop in prices," Mr. Goldie said.

Investors and speculators may have been trying to lock in some impressive gains, Mr. Goldie said. At the end of 2004, the cumulative average price of aluminum, copper, nickel and zinc was sitting at a 15-year high, he added, which might have been lofty enough to persuade some investors to take profits early in the new year.

Strong metal prices have prompted a surge of new investment in the mining sector. Exploration spending has increased and companies have buying or building new projects.

Brazilian iron ore giant Companhia Vale do Rio Doce, for example, has plans for as many as four new copper mines that would require an investment of up to $2.7-billion.

CVRD, last year rumoured to be interested in acquiring Canadian miner Noranda Inc., entered the copper business last year when it opened its Sossego copper mine in Brazil's Amazon region.

Canadian nickel producer Inco Ltd. is currently working on two big nickel projects, Voisey's Bay in Labrador and Goro in New Caledonia, a French Overseas Territory in the southwestern Pacific.

In a December presentation, Inco vice-president Peter Goudie said increased activity by hedge funds in the metals market contributed to price volatility for nickel in 2004, creating some confusion about underlying market conditions for the metal.

Nickel supplies will remain tight in 2005, he predicted, and no significant new supplies will hit the market until 2007.

Push to block Brazil dam project

BBC News http://news.bbc.co.uk/2/hi/science/nature/4146325.stm

Last Updated: Wednesday, 5 January, 2005, 00:53 GMT

By Tim Hirsch Anita Garibaldi, southern Brazil

Environmental groups are hoping to use the Brazilian legal system to prevent the destruction of a highly endangered remnant of the Atlantic forest threatened by a hydroelectric dam project.

The $300m Barra Grande dam is already built, but so far the courts have blocked the deforestation of more than 40 sq km (15 sq miles) of Brazilian pine - or araucaria - forest which has to take place before the sluice gates are closed and the reservoir is impounded.

The controversy is centred on this small city in the state of Santa Catarina, named after a local girl who married the famous Italian revolutionary when he visited the region in the 1830s to support a rebellion against the newly independent Brazilian empire.

That rebellion was unsuccessful.

But in this modern-day battle, a mighty consortium led by the aluminium giant Alcoa has so far been thwarted by the manoeuvrings of conservation organisations and activists representing families whose land would be flooded by the dam.

Environmental value

The 180m-high dam (590ft) straddles the steep gorge of the Pelotas river forming the border between the Brazilian states of Santa Catarina and Rio Grande do Sul - the reservoir behind it would stretch nearly 100km (60 miles) eastwards up the winding valley.

When an environmental impact assessment was carried out six years ago, it described the area as consisting mainly of degraded land.

Only after a licence was issued and the dam nearly completed did the real environmental value of the threatened gorge emerge.

A subsequent survey found more than 20 sq km (8 sq miles) of undisturbed forest.

This included areas of araucaria, a native candelabra-shaped pine that has been felled in huge numbers for the construction trade, and much of its ecosystem cleared for soya plantations.

Experts say just 1% of Brazil's araucaria forests now survive.

Knowing now

The consortium, Baesa, says it was not responsible for the original mistake which gave a false impression of the natural composition of the area.

Now that the dam is built, it argues, there is no sensible option other than to go ahead and make it work.

The president of Baesa, Carlos Miranda, told the BBC News website: "If we had known about these species of trees at the initial stage of the licensing, probably we would not have begun construction.

"But you cannot destroy a dam like that. What is the greater damage: to let the dam stay there as a monument or to cut those araucarias?"

Baesa is spending considerable sums of money planting new native trees and relocating some of the wildlife displaced by the proposed reservoir.

Different views

But environmental groups have argued that an irreplaceable ecosystem is being sacrificed as the result of a fait accompli. And the courts so far agree.

Federal Judge Osni Cardoso Filho granted an injunction to prevent contractors going in to remove most of the trees, an essential first step before the area can be flooded.

He told the BBC: "The principal argument used by those defending the continuation of the project is that the dam is already built, so nothing can be done about it.

"I take the opposite view - since we have to take environmental interests into account, we must protect everything we are still in a position to protect."

Back in the Pelotas valley, the environmental campaign to block the dam project is mixed in with the highly politicised social conflict involving hundreds of families whose homes or land would be flooded by the reservoir.

Bright side

Organised by the Movement for Dam-Affected People, some 400 people have been camped out on access roads to the project in an attempt to prevent the deforestation going ahead.

Many claim they have been refused resettlement or compensation because they were overlooked in the original registration by the consortium.

Dora Alicia, a 63-year-old grandmother spoke to us from her ramshackle home overlooking the beautiful gorge.

"We were going to spend the rest of our days here on our land. Then this firm comes along and throws everything upside down. People are being pushed this way and that,'' she said.

In the city of Anita Garibaldi itself, however, for many people the dam construction has meant only better roads and a booming economy.

"The dam has come to us from heaven," one local businessman said.

How long the boom would last once the project was complete is another matter - hydroelectric dams need very few people to keep them running.

But for now, the giant structure remains a symbol of the battle in Brazil between those who believe that the energy needs of a growing economy outweigh all other considerations, and those who argue that the country's remaining natural heritage is too precious to sacrifice.

And in this case, it is still not clear which side is going to win.

Rusal sale to Alcoa may be finalized in a month

'05-JAN-05 10:44' GMT © Mineweb 1997-2004

By: John Helmer

MOSCOW (Mineweb.com) -- The controversial sale of Russia's principal aluminium rolling-mills to the US producer Alcoa, which has drawn opposition from Russia's defence establishment, may be finalized in a month, according to an announcement by Alcoa.

On December 31, Alcoa posted a statement on its website saying "it has received final approvals from the Government of the Russian Federation to proceed with its purchase of Rusal's controlling interests in two fabricating facilities in Samara and Belaya Kalitva in the Russian Federation....With the final government approvals in place, Alcoa and Rusal are taking the necessary steps to complete the transaction. Terms of the transaction will be disclosed when the deal has been completed, which is expected at the end of January 2005."

The Federal Anti-Monopoly Service (FAS) had the responsibility in Moscow for reviewing the deal, which Alcoa and Rusal first announced on May 6, but then failed to implement as they had anticipated. In most major foreign takeovers of Russian assets, the FAS typically recommends approval, while other cabinet ministries either cast vetoes, or recommend conditions and changes in deal terms.

In a joint announcement on May 6, Alcoa and Rusal said that they had agreed on the sale and purchase of the two mills, Samara and Belaya Kalitva. Russian sources estimate the sale price at between $200 and $250 million. In its December 31 announcement, Alcoa said it would not release these details until "the deal has been completed, which is expected at the end of January 2005."

. "Closing, subject to government approvals, is expected to be completed by June 30," the Alcoa-Rusal statement claimed initially. Last month Alcoa confirmed that it has been negotiating the sale conditions with FAS, while FAS said that the conditions included guarantees of supply of aluminium for the Russian military-industrial complex and civilian consumers, such as the aerospace sector. Alcoa was hopeful that it would swiftly meet the conditions which the cabinet review had ordered the FAS to hammer out.

However, Moscow sources told Mineweb in the week before New Year that the deal with Alcoa was "stuck".

The Russian government will not decide the fate of the proposed sale of two aluminium-rolling plants to Alcoa until January at the earliest, an FAS official involved in reviewing the deal said. The delay continued, she conceded, despite a public statement by Igor Artemyev, head of the Federal Anti-Monopoly Service (FAS), that approval, allowing the transaction to be closed, would be finalized on December 17. That day, FAS spokeswoman, Nadezhda Antonova, said: "We are really trying to finalize this decision as fast as possible but for today I have no information that it is finished." A week later, she responded: "We suppose now that the decision could be made only in January because it’s stuck on the interdepartmental level."

On its website Rusal has not commented on the government review of the Alcoa deal. At the beginning of December, the company announced the appointment of a new government lobbyist. Yury Isaev, 32, was named managing director for government relations. According to the Rusal announcement, Isaev has worked at two Russian banks. He then moved to the Ministry of Economic Development and Trade, and between June and November of this year, Rusal reports that he worked as "adviser to the first deputy to the head of the Federal Security Service (FSB) of the Russian Federation". The FSB has not responded to requests for confirmation of this appointment.

According to the announcement by Alcoa on December 31, "the approvals follow upon an understanding between Alcoa and the Federal Anti-Monopoly Service (FAS) resulting in an FAS private ruling on behavioral conditions to ensure that Alcoa complies with various legal requirements and notification obligations. In addition, Alcoa reached an agreement with a state owned procurement company guaranteeing that Alcoa will maintain the capability to supply certain Russian domestic needs through continued production at the two facilities. An Executive Order issued on December 22, 2004 allowed the agreement to be finalized and the behavioral conditions to be issued. These documents ensure the national interests of the Russian Federation have been addressed while also providing an additional legal framework for Alcoa's investment."

Alcoa Chairman and CEO Alain Belda acknowledged in the company announcement that the Russian aluminium supply conditions had been addressed "in supporting domestic production and infrastructure needs."

The Samara Metallurgical Plant is one of the world's largest producers of aluminium semi-fabricates, sheet products, forgings and castings, with a design capacity of 800,000 metric tons per annum. In 1998 it was producing at just 10% of that capacity. Output was raised to 199,404 tons in 2002, but last year, Rusal admits, it fell by 13% to just under 174,000 tons. That is just 22% of capacity. The Belaya Kalitva Metallurgical Plant is much smaller, with design capacity for 250,000 tons of rolled products. Production in 2003 was just 41,430 tons; that was up 8% on the 2002 result, but just 17% of capacity.

Alcoa says that its plan is for the two fabricating facilities to "serve both the growing Russian market and global customers in Europe, Asia, and the Americas. The two facilities will join Alcoa's flat rolled products manufacturing system with operations in the U.S., Europe, Australia, China, and Brazil; the company's extrusion facilities in the U.S., Europe, Brazil, and Korea; and its wheels and forged products system with facilities in the U.S., Mexico, Japan and Europe."

Rusal's CEO Alexander Bulygin is cited in the Alcoa announcement as saying the sell-off of the downstream mills "means we can move ahead with our strategic focus on upstream and alloy production, and on expanding our raw materials access."

Rusal, which lacks direct control over most of the alumina to fuel its metal smelters, has recently run into fresh threats to its bauxite and alumina requirements. It has lost the major Dian-Dian bauxite concession in Guinea to a Chinese group, an international industry source close to the African situation told Mineweb. The political upheaval in the Ukraine also threatens to reverse Rusal's control of the Nikolaev alumina refinery, which it took over in a controversial privatization in 2000. The new anti-Russian president of the Ukraine, Victor Yushchenko, has publicly warned that he will be reviewing the legality of his predecessor's awards of state property. Even before his election, the Ukrainian government and courts were considering a legal challenge to Rusal's compliance with the conditions of that takeover. Nikolaev is a crucial element in Rusal's upstream supply chain, and Guinean mines under Rusal control currently most of the bauxite required by Nikolaev.

Novelis -- the New Global Leader in Aluminum Rolled Products

Canada NewsWire (press release) Jan 6, 2005

TORONTO, Jan. 6 /CNW/ -- Novelis Inc.

(NYSE: NVL; Toronto), the world's leading aluminum rolled products company was officially launched today as an independent company. Novelis, which will own and operate the majority of the former rolled products groups of Alcan Inc., was spun off to create a strong, independent company solely focused on serving aluminum rolled products markets.

Novelis has 37 operating facilities in 12 countries and more than 13,500 employees and had 2003 revenues of US$6.2 billion. Globally, Novelis is the world's largest aluminum rolled products producer and is a leading supplier to the beverage, automotive, industrial, foil, lithographic and painted sheet markets. Novelis is domiciled in Canada with its executive office in Atlanta, Georgia.

"Our new company has the world's leading rolling technologies, facilities and people to deliver superior solutions to our customers and value to our shareholders," said Brian W. Sturgell, President and Chief Executive Officer of Novelis Inc. "With the launch of Novelis, our energies are now appropriately focused on our core competencies and strengths in rolling.

Novelis is the only aluminum rolled products company capable of producing technically sophisticated products on four major continents. We are now well positioned to provide even greater support to our customers' success by delivering precision-engineered rolled products throughout the global marketplace," Sturgell added.

Common shares of Novelis will begin trading under the stock symbol NVL on a "when issued" basis on the Toronto (TSX) and New York (NYSE) stock exchanges as of January 6, 2005. Regular-way trading of Novelis shares will begin on the Toronto Stock Exchange on January 7, 2005 and on the New York Stock Exchange on January 18, 2005.

Novelis is the global leader in aluminum rolled products and aluminum can recycling. The Company has 37 operating facilities in 12 countries and more than 13,500 dedicated employees. Novelis has the unparalleled capability to provide its customers with a regional supply of high-end 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 the company, visit http://www.novelis.com

For further information: Media, Pat Persico, +1-440-423-6522, or Investors, Holly Ash, +1-440-423-6235, both of Novelis Inc.

Smelter deal delayed

Trinidad & Tobago Express, Trinidad and Tobago - Jan 6, 2005

Friday, January 7th 2005

PRIME MINISTER Patrick Manning announced yesterday that the signing of an agreement for an aluminum smelter plant in Point Fortin has been deferred. The agreement was expected to be signed this month, but Manning announced it will most likely take place next month because of proposed expansion to the project.

Manning was responding to questions during yesterday's post Cabinet press conference at his Whitehall office, Maraval Road, Port of Spain.

Manning said when the tentative January date was announced for signing the project it was for a particular size which has now been increased. Manning said additionally "we are now contemplating the construction of an alumina facility in Trinidad based on bauxite from Jamaica, Suriname and possibly Guyana. That investment in itself is about US$800 million, and so the smelter is increasing in size."

Alpart at record output in 2004

Jamaica Observer, Jamaica Saturday, January 08, 2005

Observer Business Reporter

Alumina Partners of Jamaica (Alpart) says its record alumina output in 2004 was despite disruption to its production caused by Hurricane Ivan, and that it expects to further increase in 2005.

The bauxite firm, whose main production facility is located at Nain, St Elizabeth, produced 1,576,500 metric tonnes of alumina in 2004, some 47,700 tonnes more than the output in 2003, which was itself a record year.

In a press statement yesterday, Alpart which was last year taken over by Glencore and Hydro Aluminium said it also made record shipment from Jamaica last year - some 1,573,499 tonnes, some 7,488 tonnes more than in 2003.

The company's general manager, Darrel Harriman, attributed the performance to the staff, noting that the record was achieved "in spite of the loss of 84,000 tonnes in September caused by Hurricane Ivan".

Between January and July the plant performed at a record production rate according to Harriman, and returned to normalcy during the fourth quarter; producing at an annualised rate of the 1,650,000 tonnes.

In its news release, Alpart pointed out that Hurricane Charlie damaged sections of its railroad, while Ivan which followed on September 10 and 11, forced a temporary shutdown of the operations and caused major damage to the pier and conveyor belt at Port Kaiser, Alligator Pond.

In his end-of-year letter to the employees the general manager thanked them for "their dedication and hard work in restoring the railroad over 100 hours of non-stop work, and restructuring the pier after 21 days of steady, timely recovery".

Alpart invested US$21 million in its operation in 2003,

To install a dual bauxite feed system which the company says has it the sole capability among alumina plants in Jamaica to process low monohydrate and high monohydrate bauxite.

Harriman said that in 2004 the company began to reap the benefits of that investment, and said that the new owners were confident in the company's ability to be a reliable, high quality, competitive producer of alumina.

The plant, he added, was expected to achieve its major targets in 2005.

Jamaica's largest alumina producer, Alcoa and is estimated to pump over US$120,000,000 annually into the Jamaican economy.

Two bauxite ore mines in central highlands to be developed

Viet Nam News Agency, Vietnam 01/07/2005 -- 16:28(GMT+7)

Dac Nong (VNA) - The Viet Nam Coal Corporation (VinaCoal) has been making final preparations for exploiting two bauxite ore mines with combined reserves of more than 600 million tonnes in central highlands Dac Nong province.

As the two mines are opencast, VinaCoal plans to exploit around 300,000 tonnes of ore annually, mainly for export, a VinaCoal official said.

Vinacoal is also considering using the electrolysis method for extracting aluminium. However, the extraction work would require a huge investment of up to hundred millions of US dollars, the official added.

MALCO plans Rs 1-crore modernisation

Chennai Online, India January 7, 2005

Salem, January 7: The Madras Aluminium Company (MALCO) plans to invest Rs one crore for modernisation, according to a top company official.

The amount would go towards buying pulse jet bag filters, an exhaust system for holding furnaces, secured land fill for wastes and for an ecological study, J R Venkatraman, Managing Director and Chief Executive Officer of the company told reporters here yesterday.

The Rs 400 crore company was established in 1965. It is the only company in Tamil Nadu which has obtained three ISO certificates across various parameters.

Venkatraman said MALCO had contributed Rs 1.75 crore towards the Tsunami Relief Fund. Employees of the company went to an area near Kalpakkam and distributed relief material to those affected, he said.

The company was providing quality education to 2,800 children and planned to start primary education centres in Yercaud and Kolli hills. Also on the cards were mobile health care facilities, free medical consultancy and free distribution of medicines in hill areas, he said. (Agencies)

Orkla Bids to Take Over Elkem, Seeking to Oust Alcoa (Update5)

Jan. 10 (Bloomberg)

Orkla ASA, Norway's biggest consumer- goods company, raised its stake in Elkem ASA to 50.03 percent and offered to buy the rest, seeking to end a battle with Alcoa Inc. for control of the Norwegian metals maker.

Orkla agreed to buy about 10 percent of Elkem, bringing its holding above the 40 percent limit that triggers a mandatory offer, the Oslo-based company said in a statement on Hugin today. The bid is 6.8 percent higher than Friday's closing share price and values Elkem at 11.6 billion kroner ($1.8 billion).

Orkla is using some of the $2.6 billion it got last year for its 40 percent stake in Carlsberg Breweries to oust Pittsburgh- based Alcoa, which holds about 46 percent of Elkem. The companies have been battling for control of Elkem since 1998, when Alcoa's stake in the business first exceeded 10 percent. Oslo-based Elkem produces aluminum in a joint venture with Alcoa, and also makes silica and operates hydropower plants.

``It's positive for Orkla to have control and to put an end to the deadlocked ownership situation,'' said Per Haagensen, an analyst at Fondsfinans in Oslo. ``Alcoa could either accept the offer from Orkla or counter with a higher bid.'' He rates Orkla stock ``accumulate.''

Shares Climb

Shares in Elkem jumped 20 kroner, or 9.1 percent, to 240 kroner in Oslo, closing above Orkla's offer of 235 kroner a share. Orkla slid 0.5 krone, or 0.3 percent, to 199 kroner. Alcoa, which is slated to report fourth-quarter earnings later today, lost 26 cents, or 0.9 percent, to $30.43 as of 10:38 a.m. in New York.

``We are aware of the situation,'' said Kevin Lowery, a Pittsburgh-based spokesman for Alcoa. ``We are constantly evaluating all the options available.''

Orkla held about 39.9 percent of Elkem before buying today's 10 percent stake. The sellers were Folketrygdfondet, Norway's state pension fund; DnB Nor Bank ASA, a unit of the country's largest bank; and the life insurance unit of Storebrand ASA.

``This solution gives a fair price and treats all shareholders equally,'' said Rune Selmar, managing director of Folketrygdfondet, which agreed to sell its 7.9 percent stake.

Orkla said it planned to get in touch with Alcoa later today.

``We don't know how Alcoa will regard the offer,'' Orkla's Chief Executive Officer Finn Jebsen said at a presentation today in Oslo. ``We have more than 50 percent and can live with it whether Alcoa sells or not.''

Orkla plans to include Oslo-based Elkem in a specialty materials business area along with its chemicals unit Borregaard to take advantage of similarities between the two companies, Jebsen said. Orkla may later consider spinning off the specialty materials business area, he said.

If Orkla takes over Elkem, the group will have 56 billion kroner in annual sales, of which 30 billion will come from brands and consumer goods, while specialty materials will generate about 26 billion kroner in sales a year, Jebsen said.

Jebsen said Orkla would seek to keep a ``good partnership'' with Alcoa as a joint venture partner in Elkem Aluminium.

To contact the reporter on this story:

Bunny Nooryani in Oslo at bnooryani@bloomberg.net; Petter Narvestad in Oslo at

10 or pnarvestad@bloomberg.net

To contact the editors for this story:

Tim Coulter at tcoulter@bloomberg.net

Stephen Farr at sfarr@bloomberg.net

Alcoa plans to restart plants amid high prices

Financial Times, UK - January 11 2005 02:00

By Dan Westell in Toronto

Alcoa, the aluminium giant, began the earnings season with a strong 2004 profit report and a vote of confidence in the aluminium market outlook.

In results released after the market closed yesterday, the Pittsburgh-based company said it would restart about 40 per cent of its idle capacity - 220,000 tonnes - this year "to take advantage of historically high aluminium prices".

The restarted production would involve two plants in the US and one in Canada.

"US dollar weakness and higher input costs continue to pressure margins," said Alain Belda, chairman and chief executive.

He said Alcoa would continue to cut costs and streamline operations.

Alcoa said it expected to spend about $2.5bn on capital projects in 2005, aimed largely at the upstream businesses.

For this year, Alcoa said it planned a new anode plant in Norway, modernisation of a Spanish smelter and improvements at its recently purchased Russian fabricating business.

One indication of the financial gain in the year was a jump in the company's return on capital to 8.5 per cent, up from 7 per cent in 2003.

Price increases were key in boosting revenues and profit.

Alcoa said its average realised price was 85 cents a pound in 2004, compared with 70 cents in 2003.

The rise accounted for 60 per cent of the revenue gain, and was more than enough to overcome the weaker US dollar and higher energy costs.

For the full year, Alcoa made profit of $1.31bn, or $1.50 a share, up from $938m or $1.09 per share in 2003. However, profit from continuing operations of $1.40bn was reduced by losses from discontinued operations of $92m.

Sales were $23.48bn, compared with $21.09bn.

All of the company's six divisions did better in the fourth quarter, except the packaging and consumer products business, and another that included a telecommunications operation.

For the fourth quarter, net income was $268m, or 30 cents a share, down from $291m because of a$77m charge, mainly from the discontinued telecoms business. Revenues rose 12 per cent to $6.04bn.

Fourth-quarter profit from continuing operations was $345m, or 39 cents a share, compared with $342m last year, missing the consensus estimate of 41 cents.

Alcoa shares fell 22 cents to close at $30.47 in New York trading.

Dubal hopes EU will lift carbon tax

Khaleej Times, United Arab Emirates -10 January 2005

BY SALAH ELDIN ELTAYEB

DUBAI - Dubai Aluminium Company Ltd (Dubal) said yesterday that it expects the European Union (EU) to lift the six per cent carbon tax on aluminium exported to the European markets very soon.

Speaking to reporters at the end of the celebrations to mark the 25th anniversary of Dubal at the company's premises yesterday, Ahmed Humaid Al Tayer, Vice-Chairman of Dubal, said, "We are achieving progress in negotiations with the European Union (EU) as regarding the scrapping of the carbon duties on aluminium products. I know it is a tedious and time-consuming task, yet we shall never slow down and will continue to gear up and keep hopes high."

He said he is quite optimistic that it will not take long to export aluminium without paying the carbon tax.

"We can't understand the double standards of the EU who on one hand promote free economy and on the other hand close their doors on the face of other nations. They European Union have been quite selfish when it comes to opening their markets. Our doors are open to many European countries who export a lot of products to the UAE and other GCC countries. Our trade relations with these countries will be adversely affected if they become more rigid," he said.

"We have no problem in opening our markets to others but we expect others to treat us the same way," stressed Al Tayer. "In the beginning they told us that once we implement a unified Gulf customs duty we shall scrap the aluminium duty . We are still waiting for them to live up to their words since we have already implemented the GCC unified customs duty. The issue will be resolved and our products will enter European markets very soon as we shall be supported by the World Trade Organisation's agenda."

On the impact of the euro on the prices of aluminium, Al Tayer said, "No doubt we have been affected to a certain degree. We are prepared for market fluctuations. We are working closely with other aluminium manufacturers in the Gulf countries like Bahrain to put up a good fight to win the case for scrapping the duties."

Khalid Bou Humaid, Dubal’s negotiator of carbon duties said" We have another round of negotiation very soon and we feel we shall achieve progress in the issue. We stand on a very solid and strong ground with a lot of support from other countries."

Ahmed Fikree, general manager marketing and sales, said:

"European demand for aluminium is over 50 per cent of what they produce, yet they don't want to remove the duties on our products.''

''There is great demand for aluminium worldwide, especially from China and Japan. It is expected that we shall supply more of our products to China in the coming few months".

Steelworkers' merger creates nation's largest union

Bizjournals.com 11-Jan -2005

The United Steelworkers of America said Tuesday they will merge with another populous industrial union to create the nation's largest union.

Heads of the Pittsburgh-based Steelworkers voted to merge with the Nashville, Tenn.-based Paper, Allied Industrial, Chemical and Energy Workers International Union, the unions said in a news release. The groups have had a working alliance since March 2004.

The unanimous vote creates a union of more than 850,000 active members in over 8,000 bargaining units in the United States, Canada and the Caribbean, the groups said.

The new group will be called the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied-Industrial and Service Workers International Union. It will represent workers in metals, paper and forestry products, tire and rubber, mining, glass, chemicals, energy and other basic resource industries. It also will have a presence in equipment and machinery, stone, clay and concrete, other manufacturing, transportation, utilities and the service sector, the unions said.

PACE president Boyd Young said the marriage makes the group a force.

"By joining forces with the USWA, PACE members will have greater bargaining power, because this merger creates a larger union presence in our core industries and gives us more leverage at the bargaining table," he said. "Once merged, our union will immediately be a major presence in North America's core industrial sectors and that strength of diversity will both protect and promote our bargaining agendas."

PACE and USWA members will vote on the proposed merger at concurrent conventions to be held in April.

Since announcing their strategic alliance, the unions have developed closer working relations through a variety of joint activities, combining their strong, rank-and-file-centered programs, and joining forces in key campaigns leading up to the November elections, the unions said.

© 2005 American City Business Journals Inc

U.S. may boost pension agency premiums 58%

Baltimore Sun (subscription), MD January 11, 2005

Bush plan would assess firms $30 per worker; Goal is to cover deficit, losses; Part of a wider overhaul of retirement benefits

WASHINGTON - U.S. companies would pay 58 percent higher premiums to the government agency that insures workers' pensions under a plan unveiled yesterday by the Bush administration to strengthen retirement protections.

The annual premium, which hasn't risen since 1991, would grow to $30 per worker from $19 and be indexed to wage growth, the Labor Department said in a fact sheet. Rates would be higher for companies at risk of terminating pensions, Labor Secretary Elaine L. Chao said.

The increase would help the Pension Benefit Guaranty Corp. cut a $23.3 billion deficit and cover expected pension losses, Chao said in a speech at the National Press Club.

Chao heads the agency's board, which insures pensions for the 20 percent of the U.S. work force with defined-benefit plans.

"If nothing is done, the financial integrity of the PBGC will be compromised and, more importantly, the pension security of 34 million workers and retirees will be put at risk," she said.

The plan is part of President Bush's effort to overhaul U.S. retirement benefits, including letting workers divert part of their Social Security taxes into private accounts. Stock price declines and low interest rates have eroded the value of pension plans, which Chao estimates are underfunded by $450 billion. Stabilizing the pension insurance system is considered vital as the post-World War II generation enters retirement age.

The PBGC said last month that it will take over the retirement plans of 14,000 active and retired pilots of UAL Corp.'s United Airlines. The agency has assumed financial responsibility for pension plans for such companies as Bethlehem Steel Corp. and Kaiser Aluminum Corp. US Airways Group Inc., which like United is operating in bankruptcy, won court permission last week to terminate three pension plans to avoid liquidation.

Premiums should reflect companies' cost and risk of default, Chao said. As one example, Bethlehem Steel paid only $60 million to insure its plans and the PBGC took on $3.7 billion of the company's pension liabilities, she said.

The Bush plan, which must be approved by Congress, didn't specify when the 58 percent increase should take effect or how much higher premiums should be for companies at risk of a pension default.

Bush wants financially troubled companies at risk of terminating their pension plans to pay even higher premiums, though the fact sheet did not specify a dollar figure. Under his plan, companies that are behind in funding their pension plans would have to make up the shortfalls within a "reasonable" period of time. The plan suggested seven years.

He also wants to give companies more flexibility to make additional contributions to pension plans during good economic times.

Large employers won't welcome the proposed increase to $30, said James A. Klein, president of the American Benefits Council, a Washington-based group that represents pension plan sponsors. Companies that adequately fund pensions may not believe they should be hit with an increase, he said.

"We're foolish if we think the problems of the PBGC are somewhat inadequate premium income," Klein said in an interview yesterday. "The real issue is the funding rules" that let companies put off resolving their underfunded plans.

Klein said the White House deserves credit for "moving this process forward." But he said many companies, especially those with sound pension plans, will not want to see their premiums shoot to $30. "There will be some consternation," he said.

Bush wants to change the funding rules by replacing several measures for calculating pension liability with a single standard based on companies' risk of terminating plans, Chao said. Funding targets would be based on the plan sponsor's financial health, and sponsors would be required to make up shortfalls within seven years, she said.

Chao said the plan would require companies to more accurately account for obligations and improve disclosure of the financial status of plans. The ability of troubled companies to promise workers more benefits would be limited, and businesses would have to identify the benefits that may be lost if plans are terminated.

Last year, Congress provided companies short-term relief from pension liabilities. Lawmakers should act again this year to strengthen worker pensions, Sen. Charles E. Grassley of Iowa, the Republican chairman of the Senate Finance Committee, and Rep. John A. Boehner of Ohio, the Republican who heads the House Education and Workforce Committee, said yesterday.

The PBGC, created by Congress in 1974, is privately funded. Insurance premiums are paid by companies that sponsor traditional pension plans which provide monthly checks to retirees. If the agency runs out of cash to bail out these plans, the roughly 20 percent of workers who have them would be left with no assurance of getting the pension checks they are earning.

However, Congress would be under political pressure to act. Potentially, taxpayers could be facing a situation similar to the savings-and-loan debacle of the late 1980s and early 1990s, when 1,043 thrift institutions failed. That bailout cost the government about $124 billion.

When the PBGC seizes a pension plan, it pays up to the maximum guaranteed benefit, about $44,386 a year for those who retire after age 65.

Bloomberg News and Cox News Service contributed to this article.

Alcoa to restart another plant

Moneycontrol.com, India 11-Jan-2005

Alcoa expects to restart approximately 220,000 metric tons of primary aluminum production in North American during 2005 to take advantage of historically high aluminum prices.

US aluminum giant Alcoa expects to restart approximately 220,000 metric tons of primary aluminum production in North American during 2005 to take advantage of historically high aluminum prices, the company announced yesterday in a review of its fourth quarter 2004 performance.

Alcoa's ABI smelter in Quebec, Canada, will produce around 100,000 tons of the excess material once it reaches full capacity in April 2005 following a prolonged work stoppage during the second half of 2004 due to labor disputes. The Wenatchee smelter in Washington is expected to produce around 85,000 tons in 2005 following the restart of two of its potlines in February.

In revised forecast, SG says LME cash aluminum to average $1,840/metric ton in 2005, vs $1,822.50 now. Bucking base metals trend, aluminum deficit to widen, thanks to slowing production growth, SG says. But adds "one problem persists. Reported stocks are not particularly low and we are still convinced that much unreported inventory exists." Says by time aluminum "firing on all fundamental cylinders, speculative interest in metals may have waned."

Dubai Aluminium Co has not withdrawn from the proposed aluminum smelter in Sarawak, Malaysia, a senior company official has been quoted as saying in the Malaysia's national news agency Bernama yesterday. "The issue is still alive," Dubal's director of operations Abdulla Kalban said when asked if the Dubai government-owned company had withdrawn from the Malaysian Ringgit 7.6-bil($2-bil) project in Bintulu in Sarawak. The smelter has a proposed production capacity of 500,000mt/year. "We never withdrew (from the project)," he told a press conference called to mark Dubal's 25th anniversary.

The latest statement from Dubal refutes earlier unconfirmed reports that the company was no longer interested in the venture. Gulf International Investment Group Capital Sdn Bhd, a joint venture between Malaysian businessman Tan Sri Syed Mokhtar Albukhary and Dubai-based investor Mohamed Ali Alabbar had made a proposal to invest in the project with Dubal.

Alouette Begins Start-up of Phase II

33Metalproducing 12 Jan 2005

Two potlines make the smelter the largest in Americas

Aluminerie Alouette, the consortium-owned aluminum smelter in Sept-Iles, PQ, has begun the start-up process of its Phase II expansion, two new potlines composed of 156 cells apiece and each one running a length of 1 km. Alouette stated the start-up will be conducted over several months.

The C$1.4 billion investment will make Aluminerie Alouette the largest aluminum smelter in the Western Hemisphere, with total capacity of 550,000 metric tons/year.

According to company president Joe H. Lombard, "The start-up of the new cells is a crucial stage and the beginning of a big year for all the employees in the aluminum smelter. Aluminerie Alouette is a worldwide leader in the industry and plans to remain so."

After some turnover in ownership in recent years, Aluminerie Alouette is held now by five shareholders: Alcan holds 40%, Austria Metall owns 20%, Hydro Aluminium controls 20%, the provincial investment arm Société générale de financement du Quebec holds 13.33%, and Marubeni Corp. holds 6.67%.

Vekselberg Quits Board

Moscow Times (subscription), Russia 12-Jan-2005

MOSCOW (Bloomberg) -- Viktor Vekselberg, the billionaire who controls Russia's second-largest aluminum producer, SUAL Holding, intends to quit the company's board of directors, Vedomosti reported Wednesday.

Vekselberg will still control company strategy, the newspaper said, citing people close to him.

SUAL produces two-thirds of Russia's bauxite and a quarter of its aluminum.

Vekselberg, who controls SUAL through his Renova holding company, said in April the aluminum group may sell shares to the public.

China Minmetals continues to pursue Noranda purchase

CBS MarketWatch 2:10 PM ET Jan. 12, 2005

By Leslie Wines, CBS MarketWatch

NEW YORK (CBS.MW) - The United Steelworkers Wednesday asked Canadian Prime Minister Paul Martin ahead of his planned visit to China this month for job assurances, should China Minmetals Corp succeed in its efforts to buy Noranda.

In early 2004 China Minmetals negotiated a potential C$7 billion dollar takeover of Toronto-based Noranda (NRD: news, chart, profile), Canada's biggest mining company, a transaction that highlighted the increasing globalization of China's natural resources industry.

China Minmetals led the takeover talks on behalf of a consortium of other Chinese companies, including Baoshan Iron & Steel, Citic Investment Corp., Jiangxi Copper and Taiyuan Iron & Steel.

Noranda broke off the talks in November, 2004 due to its desire for a higher offer, but China Minmetals is continuing to pursue the deal, which would be the largest investment in Canada by a Chinese company.

Canadian United Steelworkers Director Ken Neumann said in a letter to Martin said any purchaser of Noranda "must commit to continue and enhance the operation of all Noranda facilities."

"What we want for Noranda workers is no less than all Canadian communities have a right to expect from their government - an active role in protecting and promoting good jobs," the labor leader said.

"The federal government should adopt an aggressive industrial policy to ensure the protection and development of our resources and related industries," said Neumann.

"Workers and communities must not be collateral damage in the purchasing process," the union leader said.

The United Steelworkers said it represents more than 2,500 Noranda workers in the provinces of Ontario, New Brunswick and Quebec and also has ties with workers employed by Noranda in Chile.

The possible deal has sparked other concerns in socially engaged Canada.

Labor leaders and human rights activists have noted that the state-owned China Minmetals was accused of profiting from forced labor in Chinese prisons by prominent Chinese American dissident Harry Wu.

Wu contends that China Minmetals sells goods in international markets produced by unpaid Chinese prisoners who sometimes are beaten and deprived of food. .

Noranda, 42 percent of which is owned by Toronto-based asset manager Brascan (BNN: news, chart, profile), is a producer of copper, nickel, zinc, aluminum and other metals.

On Tuesday the United Steelworkers announced that its board and that of the Paper, Allied Industrial, Chemical and Energy Workers International unions Tuesday approved a merger that would create the largest industrial union in North America.

Alouette Begins Start-up of Phase II

33Metalproducing 12 Jan 2005

Two potlines make the smelter the largest in Americas

Aluminerie Alouette, the consortium-owned aluminum smelter in Sept-Iles, PQ, has begun the start-up process of its Phase II expansion, two new potlines composed of 156 cells apiece and each one running a length of 1 km. Alouette stated the start-up will be conducted over several months.

The C$1.4 billion investment will make Aluminerie Alouette the largest aluminum smelter in the Western Hemisphere, with total capacity of 550,000 metric tons/year.

According to company president Joe H. Lombard, "The start-up of the new cells is a crucial stage and the beginning of a big year for all the employees in the aluminum smelter. Aluminerie Alouette is a worldwide leader in the industry and plans to remain so."

After some turnover in ownership in recent years, Aluminerie Alouette is held now by five shareholders: Alcan holds 40%, Austria Metall owns 20%, Hydro Aluminium controls 20%, the provincial investment arm Société générale de financement du Quebec holds 13.33%, and Marubeni Corp. holds 6.67%.

Vekselberg Quits Board

Moscow Times (subscription), Russia 12-Jan-2005

MOSCOW (Bloomberg) -- Viktor Vekselberg, the billionaire who controls Russia's second-largest aluminum producer, SUAL Holding, intends to quit the company's board of directors, Vedomosti reported Wednesday.

Vekselberg will still control company strategy, the newspaper said, citing people close to him.

SUAL produces two-thirds of Russia's bauxite and a quarter of its aluminum.

Vekselberg, who controls SUAL through his Renova holding company, said in April the aluminum group may sell shares to the public.

China Minmetals continues to pursue Noranda purchase

CBS MarketWatch 2:10 PM ET Jan. 12, 2005

By Leslie Wines, CBS MarketWatch

NEW YORK (CBS.MW) - The United Steelworkers Wednesday asked Canadian Prime Minister Paul Martin ahead of his planned visit to China this month for job assurances, should China Minmetals Corp succeed in its efforts to buy Noranda.

In early 2004 China Minmetals negotiated a potential C$7 billion dollar takeover of Toronto-based Noranda (NRD: news, chart, profile), Canada's biggest mining company, a transaction that highlighted the increasing globalization of China's natural resources industry.

China Minmetals led the takeover talks on behalf of a consortium of other Chinese companies, including Baoshan Iron & Steel, Citic Investment Corp., Jiangxi Copper and Taiyuan Iron & Steel.

Noranda broke off the talks in November, 2004 due to its desire for a higher offer, but China Minmetals is continuing to pursue the deal, which would be the largest investment in Canada by a Chinese company.

Canadian United Steelworkers Director Ken Neumann said in a letter to Martin said any purchaser of Noranda "must commit to continue and enhance the operation of all Noranda facilities."

"What we want for Noranda workers is no less than all Canadian communities have a right to expect from their government - an active role in protecting and promoting good jobs," the labor leader said.

"The federal government should adopt an aggressive industrial policy to ensure the protection and development of our resources and related industries," said Neumann.

"Workers and communities must not be collateral damage in the purchasing process," the union leader said.

The United Steelworkers said it represents more than 2,500 Noranda workers in the provinces of Ontario, New Brunswick and Quebec and also has ties with workers employed by Noranda in Chile.

The possible deal has sparked other concerns in socially engaged Canada.

Labor leaders and human rights activists have noted that the state-owned China Minmetals was accused of profiting from forced labor in Chinese prisons by prominent Chinese American dissident Harry Wu.

Wu contends that China Minmetals sells goods in international markets produced by unpaid Chinese prisoners who sometimes are beaten and deprived of food. .

Noranda, 42 percent of which is owned by Toronto-based asset manager Brascan (BNN: news, chart, profile), is a producer of copper, nickel, zinc, aluminum and other metals.

On Tuesday the United Steelworkers announced that its board and that of the Paper, Allied Industrial, Chemical and Energy Workers International unions Tuesday approved a merger that would create the largest industrial union in North America.

Ormet Jobs Plan OK-But Talks Break Down

Wheeling News Register, WV 13 Jan 2005

By ANDY STAMP

WHEELING - Talks between Wheeling-based aluminum producer Ormet Corp. and the United Steelworkers of America have broken off for the immediate future, but not before the two parties reached a "tentative understanding" on the number of job cuts required from the company's hourly and salaried workers to emerge from bankruptcy, according to a union representative.

USWA Staff Representative Denny Longwell said Wednesday that the company and the union have "signed off" on a proposal to cut 205 hourly jobs and 96 salaried positions from the Ormet work force.

The 205 hourly positions would be eliminated from the company's two Hannibal facilities, although the majority will come from the reduction plant, said Longwell.

The 96 salaried positions will be eliminated from the two Hannibal facilities and from within Ormet's corporate structure.

"Essentially it's a part of our plan that we had," said Longwell.

"We've been saying all along that (the company's) plan is short-term at best and that ours is long-term."

The union originally proposed cuts of 220 hourly workers and 80 salaried employees, but, according to Longwell, the company countered with a proposal calling for fewer cuts to the hourly work force and no cuts to the salaried work force.

Ormet officials could not be reached for comment this morning.

Meanwhile, talks between the two sides broke off earlier this week when things "went down hill," said Longwell.

He said the company presented a comprehensive proposal that was "miles away" from the position of the union. No future meetings dates have been scheduled.

Aside from the "tentative understanding" about job cuts, the union maintains there are several other issues that must be dealt with before a final agreement can be reached and the job cuts implemented. In a letter to Ormet President and Chief Executive Officer Michael Williams released Wednesday, USWA District 1 Director David R. McCall noted that "the tentative understanding is of course subject to resolution of numerous other outstanding issues."

Over the past week, both Williams and McCall have issued letters defending their positions and calling on the opposite party to continue negotiations. Ormet's plan of reorganization calls for $23 million per year in cost savings from labor, but the company and the USWA have not yet agreed on how to achieve those savings.

The quiet revolution

Australia Business Review Weekly (subscription), Australia 13 January 2005

Western currencies will surely weaken as China and India steadily strengthen their economies.

By Gerry Van Wyngen

Concern about the future of the United States dollar and the direction of the US current account deficit has captured the attention of investors (see page 50), but equally their concern should be focused on China and India. These countries are, in many ways, the flip side of the troubles in America, where the problems have hardly begun. Just one example illustrates the enormous change, still in its infancy. According to the World Trade Organisation, China had a 17% share of the world market in manufactured textiles and garments in 2003, and is expected to lift this to 50% over the next three years.

Textiles and garments are merely an illustration. China will one day be the world's largest manufacturer of motor vehicles, as well as a supplier of motor vehicle parts to manufacturers in other countries. Most of the world's steel, aluminium and copper will be manufactured in Chinese plants or in plants associated with Chinese customers. Even much of the ore providing these metals will come from mines owned by, or contracted to, Chinese corporations. If that sounds far-fetched or futuristic, remember that in November 2004 alone, China pledged almost $US30 billion for precisely such investment in Latin America.

What Western business and investors need to understand is that these changes are far more substantial, and are happening more quickly than is widely realised. At the moment their effect is focused on the US because, among the biggest economies, the US economy is the most open. Eventually, Europe and even Japan will be similarly penetrated.

The Western economies will be hollowed out, as was Great Britain after the Industrial Revolution when jobs went to newer factories with cheaper labour in other countries. This time the scale of change will be truly global and beyond anything previously seen in history. Accompanying this transfer of jobs will be technical expertise, proprietary knowledge and even research and development (R&D). The growing emphasis on R&D is a trend perhaps most evident in India, where it is being applied on a wide scale to the information technology industries. Similar activity is being undertaken on a large scale in other fields, particularly in pharmaceuticals.

Kitimat, B.C., officials pledge to continue fight in Alcan power sale dispute

CBC News, Canada 10:24 PM EST Jan 14

KITIMAT, B.C. (CP) - The district of Kitimat will continue its fight to stop Alcan from selling power from its Kemano, B.C., power plant, despite a provincial Supreme Court ruling in the aluminum producer's favour.

On Friday, B.C.'s highest court ruled that Kitimat officials had no legal standing to pursue a challenge to Alcan's right to sell power from the plant. The district argues those sales are impacting local jobs, charging that Alcan has reduced aluminum production so it can sell more power.

Alcan signed a contract with the B.C. government in 1950 that allowed the company to use cheap hydroelectric power to run its aluminum smelter in Kitimat. But the Montreal-based aluminum giant was using that agreement to sell power instead of producing more aluminum at a Kitimat shelter, the district argued.

On Friday, Kitimat noted that the court "did not rule on main question" of whether or not it is legal for Alcan to divert electricity away from aluminum smelting in favour of wholesale power sales and exports.

Kitimat has estimated that more than 200 jobs have been lost due to Alcan's decreased local aluminum production.

In a statement, Kitimat officials say they remain confident such sales are a breach of the terms under which the company obtained rights to public water from the Nechako River for the purpose of aluminum smelting.

"We are disappointed that we are unable to move forward immediately to resolve the uncertainty that hangs over Kitimat as a result of Alcan's power sales," said Kitimat Mayor Richard Wozney. "But by no means do we intend to give up. We will be studying the court's decision and assessing our legal options. We want the court to provide clarity on Alcan's actions."

In its own statement, Alcan applauded the court ruling that it is in compliance with the 1950 agreement.

"We hope that Alcan and the District of Kitimat can now focus on working together to address the economic challenges of our region," said Paul Henning, Alcan's director of operations for British Columbia.

"The district of Kitimat's action has created uncertainty for local investment and has been taxing on our employees and the community as a whole. We're looking forward to moving on to more constructive pursuits with the District of Kitimat," Henning added.

Alcan said B.C. Hydro "recognizes Alcan-supplied power as an important resource" to support the B.C.'s north coast region. Alcan also said it is the B.C. government's responsibility to determine if the company is in compliance with relevant legislation, licenses, and agreements.

Wozney maintains Alcan has failed to meet a commitment it made to expand its aluminum operations in the province.

"Alcan acquired access to the headwaters of the Nechako River, one of the province's most valuable water resources, in exchange for a commitment to build and expand a permanent aluminum industry in British Columbia," Wozney said. "Aluminum production in Kitimat is very profitable, but power sales are even more profitable.

"Now the company wants to keep the resource and sell the power, reneging on its contractual commitment to the jobs and economic benefit for which the resource was exchanged."

Alcan (TSX:AL) employs 73,000 people and has operating facilities in 56 countries and regions. The company issued a profit warning on Friday, saying its first-quarter operating profits will be 30 per cent lower than in the previous year due to higher fuel costs for its manufacturing operations, as well as a lower U.S. dollar. Despite being based in Montreal, Alcan reports its financial results in the American greenback.

© The Canadian Press, 2005

FSA drops aluminium inquiry

Guardian, UK - Jan 13, 2005

Jill Treanor

The Financial Services Authority (FSA) has dropped a year-long inquiry into market abuse by aluminium traders at the London Metal Exchange (LME).

The City regulator said that on "the basis of current evidence" it would not continue the inquiry, which was sparked when the LME handed over files with details of unusual movements in metal prices. The LME said it had found evidence of misconduct by non-LME members, which it does not regulate, after examining mobile phone records. The use of mobile phones to trade is not permitted.

The LME began its inquiry in the summer of 2003, when aluminium prices were in a "backwardation", which is when future prices are lower than current ones. However, stocks ofaluminium were rising at the time, which normally has the reverse effect on metal prices.

The LME, which also investigated aluminium trading in 1999, said it would continue to work closely with the FSA.

Kaiser Aluminum Files Court Motion Regarding Commitment Letter for New Financing Arrangement

Business Wire (press release), CA January 15, 2005

HOUSTON--(BUSINESS WIRE)--Jan. 15, 2005--Kaiser Aluminum has signed a commitment letter and filed a motion with the U.S. Bankruptcy Court for the District of Delaware seeking approval to enter into an agreement with JPMorgan Chase Bank, National Association, J.P. Morgan Securities Inc., and The CIT Group/Business Credit, Inc. under which Kaiser would be provided with a replacement for the company's existing Debtor-in-Possession (DIP) Credit Facility and a commitment for a multi-year exit financing arrangement upon Kaiser's emergence from Chapter 11.

J.P. Morgan Securities Inc., would act as the lead arranger, sole bookrunner, and syndication agent for the new facility. JPMorgan Chase Bank would be administrative agent. CIT Group would act as co-arranger.

As described in the motion and the corresponding commitment letter, and subject to the completion of definitive documentation, the new facility would:

-- Replace the existing $200 million DIP credit facility, which expires February 13, 2005, with a new $200 million credit facility intended to remain in place until the company's emergence from Chapter 11.

-- Include a commitment, upon Kaiser's emergence from Chapter 11, for exit financing in the form of a $200 million revolving credit facility and a fully drawn term loan of up to $50 million.

-- Provide a maturity on the exit financing's revolving credit facility of five-years from the date of the closing of the replacement DIP (which is expected to occur in February 2005) and a maturity on the term loan of six years from such closing date.

Kaiser has asked the Court to schedule a hearing on the motion on February 2, 2005.

"The new facility has been designed to provide us with the size, terms, and flexibility that we expect to need as we complete our reorganization and look ahead to our future as a highly competitive fabricated products company. The exit financing, in particular, is expected to enable Kaiser to emerge from Chapter 11 with a sound financial profile and the liquidity necessary to support continued growth," said Jack A. Hockema, Kaiser's President and Chief Executive Officer.

West African Gas Pipeline gets green light

Oil & Gas Journal, TX - Jan 4, 2005

By OGJ editors

HOUSTON, Jan. 4 -- Partners in West African Gas Pipeline Co. Ltd. (WAPCo) have agreed to move forward with the construction and implementation of the West African Gas Pipeline project, ChevronTexaco Corp. announced.

WAPCo will develop a detailed final project design, and the pipeline construction is expected to take 2 years. Start-up is expected in December 2006.

The estimated $590 million project will transport natural gas 420 miles from Nigeria to Benin, Togo, and Ghana. Capacity is expected to be 200 MMscfd initially and 470 MMscfd ultimately.

The gas is expected to be consumed 85% in power generation and 15% by industry. Use of gas will back out crude oil, charcoal, and diesel.

Gas will flow from a 20,000-hp onshore compressor station near the Alagbado tee at Lagos to a nearby beachhead and then offshore through a 20-in. pipe typically in 33-75 m of water to Takoradi in southwestern Ghana.

Intervening laterals will supply gas to Cotonou, Benin, Lome, Togo, and Tema, Ghana. Horizon Offshore Inc., Houston, will lay the offshore pipeline using the DLB Sea Horizon and the LB Brazos Horizon vessels.

Nigerian gas produced by ChevronTexaco and other operators will reach Lagos via spare capacity in the existing 800 MMscfd Escravos-Lagos pipeline.

ChevronTexaco West African Gas Pipeline Co. Ltd. is the project's managing operator and holds 38.2% of WAPCo. Other partners are Nigerian National Petroleum Corp. 26%, Shell Overseas Holdings Ltd. 18.8%, and Takoradi Power Co. Ltd. 17%.

The governments of Benin, Ghana, Nigeria, and Togo entered into a heads of agreement, under the auspices of the Economic Community of West African States, in 1995 for the joint development of the pipeline project.

EUROPEAN AIRBUS CONCERN INTENDS TO DEVELOP COOPERATION WITH RUSSIA

RIA Novosti, Russia January 18, 2005

TOULOUSE, January 18 (RIA Novosti, Andrei Nizamutdinov) - The European Airbus concern plans to expand cooperation with Russia, namely with joint creation of a new passenger airliner, the A-380, which was presented for the first time yesterday in the Toulouse suburb of Blagnac.

As a spokesman for the Airbus Toulouse headquarters told RIA Novosti, the concern is cooperating with Russian enterprises and organizations in four basic areas.

One of them is the designing of aircraft constructions, which is carried out at the base of the Engineering Center (about 100 specialists) that was instituted with the assistance of Airbus in Moscow.

Among other important assignments, the Russian engineers did calculations under the A-380 airliner program.

Another area is the development of new technologies and the studies in such spheres as aerodynamics, new materials and new technological and industrial processes. More than 60 projects in this sphere have already been completed.

The Airbus concern believes increasing the production of aircraft parts in Russia has good potential. The first contract of this kind was signed in December 2003. A month ago, the Airbus signed a ten-year contract to the tune of $200 million with the Russian Irkut research and industry corporation that will produce units for the planes of the A-320 family which are in great demand today.

This year, the European concern plans to place new orders at Russian enterprises for 10 years at $150 million. In the near future, the Airbus intends to increase its annual amount of orders from Russian enterprises to $40 million.

Another area in cooperation is the purchase of Russian materials for the production of Airbus planes. On the basis of long-term contracts, the Russian side ensures more than 55% of the European concern's needs in titanium. And the Russian Aluminium company (the leader in aluminium production in Russia) has been chosen as a main potential supplier of aluminium materials for building Airbus planes and is now being certified to conform to the concern's norms.

The Airbus' cooperation with Russian enterprises and organizations is based on the partnership agreement that was signed in July 2001 between the EADS (European Aeronautic Defense and Space Company), the main shareholder of the Airbus, and the Russian Aviation and Space Agency. This ten-year program to a value of $800 million provides for Russia's participation in all main stages of creating Airbus planes - from studies and designing to the delivery of materials and production.

As the spokesman for the concern's Toulouse headquarters believes, one of the advantages of this program is that the Russian enterprises, taking part in it, will get access to new technologies and know-how and will be able to master the European standards of quality. This will make it possible for Russian aircraft to be certified in the West and to enter the world market.

Alcoa has a hand in Airbus project

Quad City Times, IA 18 Jan 2005

By Jennifer DeWitt

As thousands gathered a half world away for the introduction of the Airbus’ A380, they not only were witness to the unveiling of the world’s largest passenger plane but also to the handiwork of Quad-City employees at Alcoa’s Davenport Works plant.

The double-decker plane, promoted as the "flagship of the 21st century" by the European-based Airbus, includes Alcoa aluminum from the nose to the tail of the 555-passenger aircraft.

Alcoa – through the Davenport Works plant, in Riverdale, Iowa, and some of its other facilities—has been touted as one of the critical suppliers on the landmark project. In fact, Airbus officials were on hand last summer to help the Quad-City plant, its employees and community leaders celebrate the plant’s role in the A380.

Davenport Works’ contribution includes the wing plates and fuselage skin. Other Alcoa companies are producing the 1 million fasteners, or bolts, used on each plane as well as the extrusions, forgings, structural castings and propulsion components, such as turbine blades.

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"Clearly the A380 and some of the pieces for those wings are the biggest pieces we’ve ever produced and moved through this facility," John Riches, a spokesman for Davenport Works, said Tuesday. "We’ve been modifying pieces of equipment over the year to accommodate this."

While the rollout in France marked a significant milestone for Airbus, he said Alcoa’s milestones have been different as it has been shipping aluminum for the project for a couple of years now. "We’re supplying the material 16 to 18 months ahead of when that plane is going to be done," he said.

Riches said Airbus plans to build about two or three aircraft a month. "We’re shipping roughly 40 plates a month and it takes eight different plates to make the wings for just one plane," he added.

Increased demand in aerospace products – Airbus included – boosted business last year for the local Alcoa plant. Last year alone, Davenport Works hired 400 new employees to meet the growing demand. Today, the plant employs about 2,350.

Jennifer DeWitt can be contacted at (563) 383-2318 or jdewitt@qctimes.com.

Ormet "Barged Out"

WTOV9.com, OH WTAP News 18 Jan 2005

Todd Baucher

At least one area manufacturer is blaming the Belleville situation for having to shut down part of its operations.

Ormet aluminum is immediately and temporarily halting operation of the last two of its six potlines at the Hannibal, Ohio plant.

The company's salaried employees who are working in the reduction plant will be transferred to Ormet's Rolling Mill. Ormet is also working to emerge from Chapter 11 bankruptcy.

Workers have been striking there since late November. Companies such as DuPont, G.E. Plastics and Kraton Polymers also make use of barges to haul materials. Even those companies that don't use barges for transportation make use of the water that comes from the Ohio River for their manufacturing operations.

Aluminum may start moving up, again

Purchasing.com, MA January 18, 2005

Aluminum prices already are historically high, closing 2004 on the London Metal Exchange at 78¢ but could be pressured higher into the mid-80s this year to offset rising costs for smelters and a weaker dollar that has made hash out of the marketplace for the globally traded metal. An unexpected large increase in U.S. and Canadian aluminum mill product orders in December already has boosted the exchange prices, although some analysts say part of the increase was due to a one-time demand surge from Florida for post-hurricane reconstruction. Still, aluminum cash prices on the London Metal Exchange last Friday were 6.5¢ higher than the three-month forward price of 83¢/lb.

Pittsburgh-based Alcoa, the world's biggest aluminum producer, says its most-recent quarterly net profit didn't meet expectations. Fourth-quarter revenue rose 12% to 30¢/share. However, analysts had expected earnings of 42¢/share. "U.S. dollar weakness and higher input costs continue to pressure margins," says Alcoa's CEO, Alain Belda. Alcan, the second-largest aluminum maker, says fourth-quarter earnings probably fell from the previous quarter because of higher energy-related costs. The company plans to release fourth-quarter results Feb. 8.

To take advantage of historically high aluminum prices, Alcoa said it made significant progress toward restarting several of its smelters. When complete, restarts will add 220,000 metric tons of production in 2005, leaving the company with idle capacity of 361,000 metric tons. If demand slips, this could depress prices, but most analysts don't expect either to occur this year. Alcoa's chief financial officer, Richard Kelson, expects worldwide aluminum demand to outstrip supply by 500,000 metric tons. Goldman Sachs analysts Malcolm Southwood and Paul Grey in Sydney, Australia, say that Alcoa's expectation that the alumina and aluminum markets would remain in deficit in 2004 were consistent with their own projections. Note: Alcoa expects to spend about $2.5 billion on capital projects in 2005, aimed largely at its upstream businesses. The company finished a refinery expansion in Jamaica in 2004, and will complete brownfield projects this year at refineries in Suriname and Pinjarra, West Australia. The company also broke ground at its new Iceland smelter and for an expansion at the Alumar smelter in northern Brazil last year. In 2005, it will invest in a new anode plant in Norway, modernization of a Spanish smelter and improvements at its newly acquired fabricating facilities in Russia.

© 2005, Reed Business Information, a division of Reed Elsevier Inc. All Rights Reserved.

Ormet Shuts Down Lines

Ohio News Network, OH 19 Jan 2005

Ormet Corporation says it's temporarily shutting down the last two production lines at its Hannibal reduction plant and will instead buy the aluminum it needs to fill customer orders.

The company says the ongoing strike at the plant and trouble getting raw materials because of disrupted barge traffic on the Ohio River led to the shutdown.

Ormet says salaried workers that had been at the reduction plant will move over to the rolling mill, also in Hannibal.

Chief executive Mike Williams says the production lines could be restarted once the strike is resolved.

About 1,300 Ormet workers went on strike November 22nd after the company refused to back down from a reorganization plan that called for it to break some of its labor agreements.

(Copyright 2005 by The Associated Press. All Rights Reserved.)

Russian giant bids for Montenegro's biggest aluminum company

The Malaysia Star, Malaysia 20 Jan 2005

PODGORICA, Serbia-Montenegro (AP) - Russian Aluminum, or Rusal, was the only bidder for a 64.5 percent stake in Montenegro's largest aluminum producer, KAP, the Montenegrin government said Thursday.

A government commission will review the offer by Rusal, which belongs to Russian aluminum baron Oleg Deripaska, before making a decision.

Details of Rusal's offer were not made public.

"We expect this to be a high-quality offer since Rusal is an aluminum giant,'' Branko Vujovic, from the foreign investments commission, told The Associated Press.

Vujovic said more details would be disclosed after the offer was thoroughly examined. Montenegro offered the stake in state-owned KAP last August, with companies such as Swiss' Glencore, Russian Sual and India's Vedanta Resources showing interest in the purchase.

But only Rusal's offer landed on the government commission's desk by the close of the tender Thursday evening.

With a maximum capacity of 120,000 tons of aluminum a year, KAP makes up half of Montenegro's industrial production and 80 percent of the Balkan republic's exports.

The factory's revenue amounted to US$192 million in 2004. - AP

FERC approves Alcoa hydro dam licenses

Contra Costa Times (subscription), CA Associated Press 20 Jan 2005

ALCOA, Tenn. - Regulators have approved the relicensing of four hydroelectric dams in Tennessee and North Carolina that power Alcoa Inc.'s giant smelting operation here, the company announced.

The relicensing of Pittsburgh-based Alcoa's Tapoco Project on the Little Tennessee River by the Federal Energy Regulatory Commission preserves about 2,000 jobs at its Alcoa, Tenn., factories as well as more than 10,000 acres in the Great Smoky Mountains.

As part of deal for new 40-year licenses, the world's largest aluminum producer agreed to give the Nature Conservancy a permanent nondevelopment easement on 5,700 acres between the Smokies national park and the Cherokee National Forest, plus an option to buy the property for the park or forest.

The group also received a protection easement on an additional 4,000 acres that would last as long as the dams' new licenses. Alcoa also gave the Smokies 186 acres bordering the park in a swap for 100 acres within the park that had been flooded by Alcoa's dams.

Sen. Lamar Alexander and Rep. John Duncan, both Tennessee Republicans, sponsored legislation signed by President Bush in October allowing the relicensing and land deal.

"On behalf of Alcoa, we thank everybody who supported this project," said Marc Pereira, Alcoa's vice president of energy and procurement. "Alcoa's presence in the region dates back to the early 1900s, and we look forward to continuing the positive relationships that have been built through the years."

China's Aluminum Growth Slowed in 2004 Amid Curbs (Update2)

Jan. 20 (Bloomberg)

China's aluminum industry, the world's largest, expanded output in 2004 at a slower rate after the government raised taxes and limited loans to curb growth following power shortages.

The nation produced 6.59 million metric tons of aluminum last year, 19 percent more than the 5.55 million tons smelted in 2003, according to the China Nonferrous Metals Industry Association. Output rose 28 percent in 2003.

China's average daily output in December was 19.81 tons, down 1.3 percent from November's record rate of 20.07 tons, based on association data published today on the London-based International Aluminium Institute's Web site.

China's government imposed a 5 percent tax from Jan. 1 on exports of aluminum, used to make beverage cans and car parts. The country also cut bank loans in 2004 to aluminum producers such as Aluminum Corp of China Ltd. China's aluminum industry uses about 5 percent of the country's electricity.

Global aluminum output grew 6.2 percent in 2004 to 29.18 million tons, based on the Chinese data and figures compiled by the institute from other countries. Production rose 7.7 percent in 2003.

Demand Outlook

Production rose in all regions except North America, where output dropped 7 percent to 5.11 million tons. Pittsburgh-based Alcoa Inc., the world's largest aluminum maker, announced in December plans to restart its 403,000-ton Becancour smelter in Quebec after workers ended a five-month strike.

Aluminum usage in 2005 will grow 5.3 percent to 31.2 million tons, beating output by 371,000 tons, Barclays Capital forecast in a report published in December. Consumers have used inventories to fill the shortfall. Stocks monitored by the London Metal Exchange dropped 51 percent in 2004 to 694,750 tons.

Aluminum for delivery in three months on the London Metal Exchange was down $1 to $1,839 a ton at 5:01 p.m. The metal gained 22 percent last year, closing on Dec. 30 at a 10-year high of $1,965.

To contact the reporter on this story:

Simon Casey in London at scasey4@bloomberg.net.

To contact the editor responsible for this story:

Stephen Farr at sfarr@bloomberg.net

Striking Ormet workers in a bind

Marietta Times, OH 20 Jan 2005

By Kate York, kyork@mariettatimes.com

For two months, Brent Weckbacher has spent his days running errands for his grandfather, helping his wife keep the house clean and spending way too much time thinking about the work he's not doing.

Weckbacher, 46, of Bloomfield, is one of 1,300 Ormet workers who have been on strike since late November and not reporting to Ormet's two aluminum manufacturing plants in Hannibal, 50 miles north of Marietta along Ohio 7. Once every 10 days, a worker takes his turn on the picket line, but the other days are left with no routine or schedule to follow.

"I just feel guilty," Weckbacher said. "A lot of us in this part of the country were raised to take care of our family, and to work and now we can't. I feel like I should be doing something."

As negotiations over the company's bankruptcy reorganization plan continue between Ormet and the striking members of the United Steelworkers of America, stress is taking its toll on the workers and their families.

"Things are tight," said Kim Bowersock, of 25675 State Route 26, Bloomfield, whose husband, Ronald, is a 28-year Ormet employee. "We're living off our savings and no one wants to do that. We also lost our insurance."

The average Ormet worker has gone from earning about $15 per hour to receiving a union payment of $125 per week during the strike.

The Bowersocks' youngest child, Jill, 16, a junior at Frontier High School, is ready for things to return to normal, Kim Bowersock said.

"She's used to driving to school every day, but it's 17 miles one way, and we can't afford that," she said. "She has to take the bus, which she doesn't like at all. Yesterday, she put her head in her hands and said 'When is Dad going back to work?'"

The strike has required adjustments from all family members, including his 14-year-old son, Ross, said Weckbacher, who has worked for Ormet for 26 years.

"He may want this or that and we can't give it to him," he said. "My wife and I always wanted to be able to give our kids what we didn't have and we're not able to do that right now."

Though he lives on a farm, Weckbacher said he is reluctant to do much work on the land while he has no insurance, in case of an accident.

Other chores don't always fill the day.

"I'm not much of a housecleaner," he said. "I run the sweeper and try to help."

Ronald Bowersock has turned to chores on his farm to keep him busy as the days of the strike have turned into weeks and then months.

"He's a worker," said his wife. "He's always tinkering with something. It never stops. When you're a worker, you'll find something."

That's been a struggle for union member Dave Fleming, of New Matamoras.

"I've worked at that plant for what seems like forever," Fleming said. "It's so frustrating that we can't go back right now. I know my family can feel that frustration, too."

The Ormet workers say they don't see an end in sight to the strike, which is affecting only workers at the Monroe County plants. Wheeling, W.Va.-based Ormet also has facilities in West Virginia, Indiana and Louisiana.

"If the government doesn't step in, the working man is in trouble," said Weckbacher. "I don't think anything else is going to solve this."

Ormet officials have said they are willing to continue negotiations with the steelworkers' union.

"(We continue) to be ready and willing to conclude negotiations with the USWA that will both preserve jobs for the USWA membership and allow the company to achieve the $23 million in cost savings necessary for its reorganization," said Ruth Ford, Ormet's chief restructuring officer, in a statement.

The strike began when Ormet officials refused to postpone a bankruptcy hearing in November. The company's bankruptcy reorganization plan would freeze workers' pension benefits, raise worker health plan contributions and change work rules for union members.

Until an agreement can be reached, the families of those affected will continue to take it a day at a time.

"It's a lot of stress and a lot of tension," said Weckbacher. "It's very hard but we're doing the best we can."

Aluminium markets watch coup attempt in Guinea

National Business Review, New Zealand 21 Jan 2005

The president of West African nation Guinea has escaped an assassination attempt that could send jitters into the aluminium market.

Mineral rich but desperately poor Guinea holds a third of the world's known bauxite reserves, the raw material used to make aluminum, and is second only to Australia in exports of the mineral.

Reports say unidentified gunmen fired at Guinean President Lansana Conte's convoy today but that he escaped unscathed and that his loyal palace guard -- the Red Berets -- are scouring the capital for signs of the shooters.

As China state news agency Xinhua noted, the tiny country of nine million people, roughly the size of Britain, is seen as relatively stable in the volatile west Africanregion, comparing to its neighbors such as Liberia, Sierra Leone and Cote d'Ivoire.

The country is home to a large (150,000) refugee population from Liberia and Sierra Leon -- and native Guineans have a life expectancy at birth of just under 50 years with a GDP purchasing power parity of $US2,100.

Instability inside the country and fighting along its borders have driven investors out in recent years and mining companies have cut back on expatriate staff.

The CIA Factbook notes that unrest in Sierra Leone and Liberia has spilled over into Guinea on several occasions over the past decade, threatening stability and creating humanitarian emergencies.

The longtime president -- who seized power in 1984 and oversaw the transition to a democracy -- suffers from diabetes and other ailments and speculation has grown that he may be unable to continue to rule.

There is no obvious successor.

Independent from France since 1958, Guinea did not hold democratic elections until 1993 when General Conte (head of the military government) was elected president of the civilian government. He was reelected in 1998 and again in 2003.

In addition to bauxite, the country has reserves of iron ore, diamonds, gold and uranium -- and exports hydropower.

Chalco makes bid for rival

International Herald Tribune, France Bloomberg News Friday, January 21, 2005

By Jianguo Jiang and Helen Yuan

SHANGHAI Aluminum Corp. of China agreed to pay 767 million yuan for 28 percent of Lanzhou Aluminum to become the biggest shareholder of China's second-largest publicly traded aluminum producer, Lanzhou said Thursday.

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The purchase, worth $93 million, needs government approval, Lanzhou Aluminum said in a statement. Aluminum Corp. of China, also known as Chalco, offered 5.05 yuan apiece for 151.9 million non-tradable shares, 9 percent more than the closing price Wednesday of 4.65 yuan for the company's traded stock.

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Chalco, the country's largest aluminum producer, plans to increase production to 1.33 million metric tons a year by the end of 2005, including 300,000 tons to be added through acquisitions, the company said in August. China is encouraging bigger producers to merge to stop the country's rapid economic growth from driving up raw material prices.

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"Chalco's purchase price is unusually high as normally companies pay a discounted price for the non-tradable shares," said Fu Hao, a fund manager at E-fund Management in Guangzhou. "That's probably because Chalco's eager to expand its aluminum capacities."

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A Chalco spokeswoman said the purchase price was the same as Lanzhou Aluminum's net-asset value as of the end of June, 2004. China bans state-owned companies from selling non-tradable shares at below net-asset value.

BHP coy on Brazil aluminium sale

The Age (subscription), Australia January 23, 2005

BHP Billiton, the world's biggest mining company, has declined to comment on a report that it plans to sell 45.5 per cent of Brazilian aluminium producer Valesul Aluminio SA.

BHP has hired ABN AMRO as an adviser on the sale, Valor Economico reported without revealing the source of the information. Roger Agnelli, president of Brazil's Cia Vale do Rio Doce, the world's largest iron ore producer, told the newspaper the company might buy the stake.

Alison Gilbert, a spokeswoman for BHP Billiton in London, said: "From time to time we do consider the sale of non-core assets." Melbourne-based BHP Billiton wholly owns the Hillside and Bayside aluminium smelters in South Africa and Mozambique and has stakes in other plants in Brazil and Mozambique. Prices for aluminium, used in beverage cans and cars, rose to a 10-year high in December.

Rio de Janeiro-based Vale is the world's fourth-largest mining company and holds the remaining 54.5 per cent in Valesul. Valesul has an annual aluminium capacity of 97,000 tonnes, the newspaper reported.

Mr Agnelli is in the process of boosting investment at Vale by 70 per cent in 2005 to $US3.3 billion ($A4.3 billion) to expand output of commodities including iron ore and copper.

Besides Vale, several Asian companies and one European company have shown interest in buying BHP Billiton's stake in Valesul, the newspaper said.

Aluminium for delivery in three months on the London Metal Exchange was up $US10, or 0.5 per cent, to $US1845 a tonne on Thursday. At the closing price, Valesul Aluminio's aluminium annual production was worth a little under $US180 million ($A230 million) a year.

Giants stalk bauxite sites

Brisbane Courier Mail, Australia 24jan05

James McCullough

SEVERAL of the world's largest mining houses are circling Queensland as the State Government counts down to the sale of the multibillion-dollar Aurukun bauxite leases on Cape York peninsula.

Among the companies keen to procure the leases are Russian aluminium giant RusAl, Indian group Hindalco, the large Chalco (Aluminium Corporation of China) along with several of Australia's largest resource companies.

A government-sponsored drilling program to determine the quality of the leases was completed, with 575 test holes drilled in the northern part of the deposit before the onset of the wet season.

State Development and Innovation Minister Tony McGrady said yesterday it was anticipated that the drill results would be available from the end of next month.

"The 2004 drilling program was considered successful but this will need to be confirmed by analysis procedures and the results of assaying of bore hole samples," Mr McGrady said.

The Government-sponsored drilling program at Aurukun commenced last year after an agreement reached with representatives of the traditional land owners and the community.

The Government's drilling contractor, IMC Consulting, is currently preparing a report covering all aspects of the 2004 program and proposed 2005 drilling program, with a final report expected later this year.

Mr McGrady said the investigation program was intended to re-affirm the quality of the bauxite resource as reported in a 1971 feasibility study.

The feasibility report said the Aurukun deposit was understood to contain about 500 million tonnes of bauxite ore.

On December 22, 1975 the then-Queensland government signed a development agreement with the "Aurukun Associates" joint venture for the development of the resource, including downstream processing with an alumina refinery of at least 600,000 tonnes per annum capacity.

However the resource was not developed as contemplated.

On October 22, 2003 the Queensland Government said it would call for international expressions of interest to develop the globally significant Aurukun mineral resources on Cape York.

The Government also called on Pechiney, the sole remaining Aurukun Associate, to surrender the mining lease.

However when Pechiney, which has subsequently been taken over by Alcan, failed to surrender the mining lease, the Government commenced legal proceedings.

In April last year the Government introduced legislation into Parliament to cancel the mining lease and clarify that the Aurukun Associates Agreement had not had any force and effect since December 31, 1998 (an extended development deadline that was not met).

This legislation, the Aurukun Associates Agreement Repeal Act 2004, was subsequently passed.

On July 13, 2004 the Government announced the process which it would use, and stated that it was committed to ensuring that all interested parties had an equal opportunity to participate in an international competitive bid process for the granting of development rights.

Mr McGrady said the Government was keen to see the resource developed for the potential economic benefits for Queensland and the Western Cape York region.

A reference group was established last year comprising interested parties. The Government planned to use the group as a sounding board during the investigation. Members of the group include Alcan, Alcoa, BHP Billiton, Comalco, Mitsubishi Corporation, Gallipoli Mining Pty Ltd and Gulf Alumina Pty Ltd along with Chalco, RusAl and Hindalco.

The competitive bid process will be open to all bidders and the reference group will be disbanded before the start of the bid process.

Giants stalk bauxite sites

Brisbane Courier Mail, Australia 24jan05

James McCullough

SEVERAL of the world's largest mining houses are circling Queensland as the State Government counts down to the sale of the multibillion-dollar Aurukun bauxite leases on Cape York peninsula.

Among the companies keen to procure the leases are Russian aluminium giant RusAl, Indian group Hindalco, the large Chalco (Aluminium Corporation of China) along with several of Australia's largest resource companies.

A government-sponsored drilling program to determine the quality of the leases was completed, with 575 test holes drilled in the northern part of the deposit before the onset of the wet season.

State Development and Innovation Minister Tony McGrady said yesterday it was anticipated that the drill results would be available from the end of next month.

"The 2004 drilling program was considered successful but this will need to be confirmed by analysis procedures and the results of assaying of bore hole samples," Mr McGrady said.

The Government-sponsored drilling program at Aurukun commenced last year after an agreement reached with representatives of the traditional land owners and the community.

The Government's drilling contractor, IMC Consulting, is currently preparing a report covering all aspects of the 2004 program and proposed 2005 drilling program, with a final report expected later this year.

Mr McGrady said the investigation program was intended to re-affirm the quality of the bauxite resource as reported in a 1971 feasibility study.

The feasibility report said the Aurukun deposit was understood to contain about 500 million tonnes of bauxite ore.

On December 22, 1975 the then-Queensland government signed a development agreement with the "Aurukun Associates" joint venture for the development of the resource, including downstream processing with an alumina refinery of at least 600,000 tonnes per annum capacity.

However the resource was not developed as contemplated.

On October 22, 2003 the Queensland Government said it would call for international expressions of interest to develop the globally significant Aurukun mineral resources on Cape York.

The Government also called on Pechiney, the sole remaining Aurukun Associate, to surrender the mining lease.

However when Pechiney, which has subsequently been taken over by Alcan, failed to surrender the mining lease, the Government commenced legal proceedings.

In April last year the Government introduced legislation into Parliament to cancel the mining lease and clarify that the Aurukun Associates Agreement had not had any force and effect since December 31, 1998 (an extended development deadline that was not met).

This legislation, the Aurukun Associates Agreement Repeal Act 2004, was subsequently passed.

On July 13, 2004 the Government announced the process which it would use, and stated that it was committed to ensuring that all interested parties had an equal opportunity to participate in an international competitive bid process for the granting of development rights.

Mr McGrady said the Government was keen to see the resource developed for the potential economic benefits for Queensland and the Western Cape York region.

A reference group was established last year comprising interested parties. The Government planned to use the group as a sounding board during the investigation. Members of the group include Alcan, Alcoa, BHP Billiton, Comalco, Mitsubishi Corporation, Gallipoli Mining Pty Ltd and Gulf Alumina Pty Ltd along with Chalco, RusAl and Hindalco.

The competitive bid process will be open to all bidders and the reference group will be disbanded before the start of the bid process.

Atco division to build village for workers constructing Iceland smelter

Canada.com, Canada Canadian Press Monday, January 24, 2005

CALGARY (CP) - A subsidiary of Calgary-based Atco Ltd. has won a contract to build a village in Iceland that will house 1,500 workers constructing an aluminum smelter.

Atco Europe Ltd., the European division of Atco Structures Inc., said Monday it has been awarded a series of contracts to supply pre-fabricated buildings and related services to shelter workers building an Alcoa Inc. smelter. The Fjaroaal Aluminium Smelter facility in Reydarfjordur, located in eastern Iceland, is being built by European construction giant Bechtel.

The contracts have been awarded in four stages and are comprised of design, engineering, manufacturing and installation of an initial 100-person advance pioneer camp and a 1500-person construction camp, Atco said.

The majority of the dormitories, kitchen/diners, lunchrooms, medical, recreation and laundry facilities will be manufactured at an Atco factory in Budapest, Hungary, with some product also being delivered from ATCO's U.S. factory in Diboll, Tex.

Atco Structures makes workforce housing and modular buildings. It is part of the Atco group of companies involved in power generation, utilities, natural gas, storage and other markets.

Shares in Atco (TSX:ACO.NV.X-T) gained 70 cents to close at $58.70 in Monday trading on the Toronto Stock Exchange.

© The Canadian Press 2005

Showa Denko K.K. (SDK) Sells Shares in Nippon Amazon Aluminium

Investor's Business Daily (subscription) Jan 24, 2005

Tokyo, Japan, Jan 24, 2005 (JCN Newswire via COMTEX) -- Showa Denko K.K. (TSE: 4004) announces the sale of its shares in Nippon Amazon Aluminium Co., Ltd. (NAAC) to Mitsui & Co., Ltd. The sale was approved by NAAC at its board of directors' meeting on January 14 and completed with the transfer of shares from SDK to Mitsui on January 20.

NAAC was established in 1977 by Japanese investors to collectively own 49% of Albras, an aluminum smelter using bauxite resources in the basin of the Amazon. The project was part of the economic cooperation between Japan and Brazil.

NAAC was initially formed by 32 private companies (now reduced to 29) and the Overseas Economic Cooperation Fund, which has been reorganized into the Japan Bank for International Cooperation. Prior to the transaction, SDK owned 3.21% (3,685,500 shares) in NAAC and Mitsui 2.75% (3,159,000 shares).

Under the ongoing medium-term consolidated business plan, the Sprout Project, SDK is proceeding with the restructuring of commodity aluminum operations.

About Showa Denko K.K.

Showa Denko (SHWDF) is a major manufacturer and marketer of chemical products serving a wide range of fields ranging from heavy industry to the electronic and computer industries. the company makes petrochemicals (ethylene, propylene), aluminum products (ingots, rods) electronic equipment (hard disks for computers), and inorganic materials (ceramics, carbons). The company has overseas operations and a joint venture with Netherlands-based Montell and Nippon Petrochemicals to make and market polypropylenes. In March 2001, SDK merged with Showa Denko Aluminum Corporation to strengthen the high-value-added fabricated aluminum products operations, and is today developing next-generation optical communications-use wafers.Showa Denko K.K.

Contact:

Showa Denko K.K.

IR & PR Group, Nobuhiro Kato

nobuhiro_kato@sdk.co.jp

+81-3-5470-3235

Copyright (C) 2005 JCN Newswire. All rights reserved. A division of Japan Corporate News Network KK.

© 1997-2004 MarketWatch.com, Inc.

Alba marks a milestone

Gulf Daily News, Bahrain 24-Jan-2005

http://www.gulf-daily-news.com/Story.asp?Article102692&SnBUSI&IssueID27311

MANAMA: The first green anode has been produced at Alba's Line 5 carbon plant, which is described as a major landmark in the commissioning of the project. Both the production of the first green anode and the commissioning of the new paste plant were successfully completed on time, according to a statement issued on behalf of the company.

The production of the first green anode is described as one of the three main steps in the manufacturing of anodes, which are essential in the production of aluminium.

The carbon plant's new paste plant will produce the anode quantities required to meet the Line 5 operation demands.

An average of 190,000 tonnes of green anodes are produced each year.

"We are extremely happy to have produced the first green anode as this feat signifies the formal commissioning of carbon's new paste plant, which is an integral element of the project's overall aluminium production process," said Line 5 carbon operations and maintenance manager Wajd Almadani.

"The Line 5 carbon team is also commemorating the safety aspect of this achievement, which is testimony that even under tremendous pressure and activities involving live equipment, project schedules can be achieved in a safe manner.

"We are now working towards the carbon plant's second major milestone, which is the production of the first baked anode."

Solios Carbon is the main contractor for the carbon plant and all construction work has been subcontracted to local partners.

Ispat Iscor to revamp coke plant

Business Day, South Africa, South Africa 25-Jan-2005

Trade and Industry Editor

SA's largest steel maker, Ispat Iscor, has received the go-ahead from environmental authorities to rebuild its decommissioned market coke facility in Newcastle in a move that will give the firm control over about 85% of the domestic coke market.

Ispat Iscor, which is to be renamed Mittal Steel SA, said on Friday that the new facility would add some 450000 tons of coke to its current annual output of 400000 tons.

Market coke is used to make ferroalloys such as iron. Ispat Iscor will supply its 850000 tons of coke to SA's ferroalloy industry, which consumes 1-million tons of coke a year.

Ispat iscor's extra output will replace coke imports, sourced mainly from China, rendering SA's ferroalloy industry virtually selfsufficient for market coke, said the firm's head of coke and chemicals, Andries Joubert, on Friday.

The expansion would see Ispat Iscor doubling its sales , contributing significantly to earnings, he said.

The firm will derive further benefits through by-products produced at the new coke oven.

These include gas, which can be used in the Newcastle steel plant, and about 24000 tons of crude coal tar a year, which is converted into binder pitches for use in the aluminium industry.

Ispat Iscor said preparation of the site at Newcastle would be completed by the middle of next year. Coke production will start during the second half of that year.

Ispat Iscor sources most of it coking coal, used to produce market coke, from Kumba Resource's Grootegeluk coal mine, which is soon to be expanded in a R320m project that was also prompted by Ispat Iscor's anticipated coke expansion, said the steel maker.

Ispat Iscor produces market coke at its Pretoria- and Vanderbijlparkbased coke batteries. The Newcastle coke battery was decommissioned due to a cutback in steel production in the 1980s.

The group's share price closed 1,19% down at R57,21 on Friday.

Jan 24 2005 07:53:34:000AM Carli Lourens Business Day 1st Edition

Alcan Has to Reapply for South African Smelter Tax Incentives

Jan. 25, 2005 (Bloomberg)

Alcan Inc., the world's second- largest aluminum maker, will have to reapply for tax incentives South Africa had approved for investors who planned to build an aluminum smelter in the country's Eastern Cape province, a government official said.

The government initially offered a 2 billion-rand ($337 million) tax allowance to French aluminum producer Pechiney SA to defray the cost of the $2.2 billion smelter. Alcan bought Pechiney in December 2003 and will decide later this year whether to go ahead with the project at the Coega port.

``The incentive is based on the capital assets they invest'' and the number of jobs they create, Lionel October, a deputy director-general in the trade and industry department, said by telephone from Pretoria. ``The project Alcan is looking at is a reconfiguration of Pechiney's. We would have to await the new application.''

Alcan, based in Montreal, Canada, is looking to expand production in South Africa, where energy costs are lower than in North America, using technology it acquired with its purchase of Pechiney.

If the Coega project goes ahead, construction may begin at the end of 2005 and production in 2008, Alcan said in a statement issued Nov. 18. It expects the Coega facility to have a capacity of about 660,000 metric tons of aluminum a year.

Alcan is likely to invest less than the $2.2 billion proposed by Pechiney, and any tax allowances it receives will be offset against future revenue from the project, October said.

The review of the tax incentives were reported earlier today in Business Report, a Johanesburg-based daily newspaper.

To contact the reporter on this story:

Mike Cohen in Cape Town mcohen21@bloomberg.net.

To contact the editor responsible for this story:

Catherine Hickley at chickley@bloomberg.net.

S.Leone on alert at borders for Guinean dissidents

Reuters AlertNet, UK - 25 Jan 2005 13:05:15 GMT

By Christo Johnson

FREETOWN, Jan 25 (Reuters) - Sierra Leone has ordered soldiers on its border with Guinea to stop anyone who might have been involved in last week's attack on Guinea's president from crossing its frontier, an army official said on Tuesday.

"Security forces in Sierra Leone have received intelligence that some Guineans allegedly involved in the assassination attempt against President Lansana Conte have fled into the country," said chief of defence staff Major General Sam Nboma.

"If it is true we are going to arrest them and we appeal to Sierra Leoneans not to condone the escapees," he told Reuters.

A senior security official in the capital Freetown told Reuters that Guinea had sent intelligence agents to Sierra Leone to work with local security forces in hunting any dissidents.

Conte's convoy was attacked last Wednesday as he drove through Conakry, according to government officials.

Conte, who seized power in a coup in 1984 and is rarely seen in public, has ruled the former French colony with an iron fist, surviving several coup attempts.

A senior police officer in Guinea said on Monday authorities had detained suspects there and were continuing inquiries.

The Guinean Organisation of Human Rights said at least 100 people had been held but that the number could be twice as high.

Conte's opponents have said last week's attack could have been a set-up. They have dismissed some previous coup rumours as pretexts for clampdowns by Conte loyalists.

In a television address hours after the attack, Conte spoke of "external manipulations" against him, but gave no details.

Guinea, which has one third of the world's known reserves of bauxite, the raw material for aluminium, has long been seen as a bulwark against instability in its neighbours Sierra Leone and Liberia, and more recently Ivory Coast.

After years of intertwined civil war in the three countries and despite ceasefires, guns and gunmen are easy to find, especially in remote borderlands, and there are fears that freelance fighters still move easily to wherever trouble brews.

Relations between the neighbours have often been tense.

In 2001, Conte's troops beat back a cross-border insurgency blamed on dissidents and Sierra Leonean rebels backed by Liberia. Guinea has also been accused in U.N. reports of backing Liberian rebels in the past by providing support and shelter.

The United Nations has recently been investigating reports that guns and former fighters from Liberia, where a 14-year civil war ended in 2003, were crossing into Guinea, where fears of instability have been boosted by Conte's ailing health.

Conte, a former general who says he was born around 1934, has no obvious successor and analysts say his death may spark a violent scramble for power in a country where the military is divided along ethnic and generational lines.

Alcan Has to Reapply for South African Smelter Tax Incentives

Jan. 25, 2005 (Bloomberg)

Alcan Inc., the world's second- largest aluminum maker, will have to reapply for tax incentives South Africa had approved for investors who planned to build an aluminum smelter in the country's Eastern Cape province, a government official said.

The government initially offered a 2 billion-rand ($337 million) tax allowance to French aluminum producer Pechiney SA to defray the cost of the $2.2 billion smelter. Alcan bought Pechiney in December 2003 and will decide later this year whether to go ahead with the project at the Coega port.

``The incentive is based on the capital assets they invest'' and the number of jobs they create, Lionel October, a deputy director-general in the trade and industry department, said by telephone from Pretoria. ``The project Alcan is looking at is a reconfiguration of Pechiney's. We would have to await the new application.''

Alcan, based in Montreal, Canada, is looking to expand production in South Africa, where energy costs are lower than in North America, using technology it acquired with its purchase of Pechiney.

If the Coega project goes ahead, construction may begin at the end of 2005 and production in 2008, Alcan said in a statement issued Nov. 18. It expects the Coega facility to have a capacity of about 660,000 metric tons of aluminum a year.

Alcan is likely to invest less than the $2.2 billion proposed by Pechiney, and any tax allowances it receives will be offset against future revenue from the project, October said.

The review of the tax incentives were reported earlier today in Business Report, a Johanesburg-based daily newspaper.

To contact the reporter on this story:

Mike Cohen in Cape Town mcohen21@bloomberg.net.

To contact the editor responsible for this story:

Catherine Hickley at chickley@bloomberg.net.

S.Leone on alert at borders for Guinean dissidents

Reuters AlertNet, UK - 25 Jan 2005 13:05:15 GMT

By Christo Johnson

FREETOWN, Jan 25 (Reuters) - Sierra Leone has ordered soldiers on its border with Guinea to stop anyone who might have been involved in last week's attack on Guinea's president from crossing its frontier, an army official said on Tuesday.

"Security forces in Sierra Leone have received intelligence that some Guineans allegedly involved in the assassination attempt against President Lansana Conte have fled into the country," said chief of defence staff Major General Sam Nboma.

"If it is true we are going to arrest them and we appeal to Sierra Leoneans not to condone the escapees," he told Reuters.

A senior security official in the capital Freetown told Reuters that Guinea had sent intelligence agents to Sierra Leone to work with local security forces in hunting any dissidents.

Conte's convoy was attacked last Wednesday as he drove through Conakry, according to government officials.

Conte, who seized power in a coup in 1984 and is rarely seen in public, has ruled the former French colony with an iron fist, surviving several coup attempts.

A senior police officer in Guinea said on Monday authorities had detained suspects there and were continuing inquiries.

The Guinean Organisation of Human Rights said at least 100 people had been held but that the number could be twice as high.

Conte's opponents have said last week's attack could have been a set-up. They have dismissed some previous coup rumours as pretexts for clampdowns by Conte loyalists.

In a television address hours after the attack, Conte spoke of "external manipulations" against him, but gave no details.

Guinea, which has one third of the world's known reserves of bauxite, the raw material for aluminium, has long been seen as a bulwark against instability in its neighbours Sierra Leone and Liberia, and more recently Ivory Coast.

After years of intertwined civil war in the three countries and despite ceasefires, guns and gunmen are easy to find, especially in remote borderlands, and there are fears that freelance fighters still move easily to wherever trouble brews.

Relations between the neighbours have often been tense.

In 2001, Conte's troops beat back a cross-border insurgency blamed on dissidents and Sierra Leonean rebels backed by Liberia. Guinea has also been accused in U.N. reports of backing Liberian rebels in the past by providing support and shelter.

The United Nations has recently been investigating reports that guns and former fighters from Liberia, where a 14-year civil war ended in 2003, were crossing into Guinea, where fears of instability have been boosted by Conte's ailing health.

Conte, a former general who says he was born around 1934, has no obvious successor and analysts say his death may spark a violent scramble for power in a country where the military is divided along ethnic and generational lines.

Alcoa and Government of the Republic of Ghana Sign MOU

www.ghanaweb.com Jan. 26, 2005

...to Create Integrated Aluminum Industry; Valco Smelter Will Re-Start, Expedited Timetable for Alumina Refinery and Bauxite Mine

NEW YORK & ACCRA, Ghana--(BUSINESS WIRE)--Jan. 26, 2005--Alcoa (NYSE:AA) and the Government of the Republic of Ghana today announced they have signed a Memorandum of Understanding (MOU) to develop an integrated aluminum industry in Ghana that would include bauxite mining, alumina refining, aluminum production, and rail transportation infrastructure upgrades. The MOU was signed today in Accra at a ceremony attended by President Kufuor of Ghana and Bernt Reitan, President of Alcoa Global Primary Products.

Upon signing of the MOU, Alcoa will now work with the government to conduct expedited feasibility studies that are expected to be completed in 2006, at which time both parties will negotiate definitive agreements on the mining, refining, smelting, rail upgrades and ownership structure, as well as total investment costs.

"This agreement paves the way for a strong public-private partnership that can help solidify long-term sustainable growth in Ghana," said President Kufuor. "Development of an integrated aluminum industry can become a springboard for more value-added manufacturing in Ghana, creating better, higher-paying jobs. This project will help keep us on the path of sustainable development, strengthening the economy of Ghana, and securing our industrial base, while protecting our natural resources."

Alcoa's Reitan said, "This MOU is an integral part of Alcoa's strategy to broaden its global presence in the primary business. Ghana has the right mix of natural resources, power, and people to create an integrated and globally competitive aluminum industry. We look forward to working with the Government of Ghana toward that goal."

The MOU calls for the initial re-start of three of the five existing potlines, representing 120,000 mtpy, at the jointly-owned 200,000 metric ton per year (mtpy) Valco smelter in Tema, Ghana. The Valco smelter, which is currently idled, will be re-started as soon as practical under an interim power rate agreement with the Volta River Authority ("VRA") with alumina supply arranged by Alcoa. The smelter is currently owned 90 percent by the government and 10 percent by Alcoa. The final integrated industry agreement would make Alcoa the majority owner and operator of the total joint enterprise (mining, refining, and smelting projects) with significant participation by the Government. Alcoa's participation in the bauxite and alumina operations in Ghana will be through its Alcoa World Alumina and Chemicals global enterprise, which is 60 percent owned by Alcoa and 40 percent owned by Alumina Limited of Australia.

The feasibility review will include a study on the creation of an alumina refinery with an initial design capacity of up to 1.5 million metric tons per year. It is expected that the refinery operations will utilize natural gas at competitive industrial rates from the West Africa Gas Pipeline project that has recently received funding to accelerate its construction. The Government will provide the joint enterprise with exclusive rights to the bauxite resources in Kibi and Nyinahin, which are known as high-quality sources of bauxite. The feasibility study will ensure that there is an adequate supply of bauxite resources for the proposed refinery. In addition, the study will analyze rail transportation upgrades and other necessary infrastructure improvements. The joint enterprise would be developed consistent with Alcoa's sustainability principles.

Contacts

Alcoa

Investor Contact, William F. Oplinger, 212-836-2674

Media Contact, Kevin G. Lowery, 412-553-1424

Mobile 724-422-7844

Kaiser's offer was an opportunity to Ghana - Kufuor

GhanaWeb, Ghana Accra, Jan. 26

GNA - President John Agyekum Kufuor on Wednesday said the offer by Kaiser Aluminium to the Government was an opportunity to use the Volta Aluminium Company (VALCO) Smelter as a basis to attract a new investor into the industry.

He said the new investor would be interested in partnership with the Government to develop a fully integrated Aluminium Industry in Ghana.

"When I accepted Kaiser's offer, I believed then and still believe that with the ownership of the Smelter in Ghana's hands, the nation could achieve the exploitation of our bauxite which our first President dreamed of and hoped for in 1962 but was never realised," he said.

President Kufuor was speaking at the signing of a Memorandum of Understanding (MOU) between Ghana and Alcoa, the world's leading producer and manager of primary aluminium, fabricated aluminium and alumina facilities, to develop an integrated aluminium industry in Ghana.

Parliament on Thursday October 28, 2004, approved an agreement between Ghana and Kaiser Aluminium and Chemical Corporation for the sale and purchase of VALCO for 18 million dollars.

The Government currently owns 90 per cent of the smelter with Alcoa owning the remaining 10 per cent.

The industry would include bauxite mining, alumina refining, aluminium production and upgrading of rail transportation infrastructure.

President Kufuor witnessed the ceremony at the Castle, Osu, when Papa Owusu Ankomah, Acting Attorney - General and Minister of Justice signed for Ghana while Mr Bernt Reitan, Executive Vice President of Alcoa and President of Alcoa's Primary Aluminium Division signed for the Company.

With the signing of the MOU, Alcoa would work with the Government to conduct expedited feasibility studies to be completed in 2006. President Kufuor said the success of the joint venture between Ghana and Alcoa should not only generate valuable foreign exchange to finance the country's economic development but also provide the basis for the much hoped for industrialisation of Ghana's economy.

He told the Management of Alcoa that they would find in Ghana a reliable, fair and understanding partner, saying: "I look forward to a future in which Ghana and Alcoa will work together for their mutual benefit."

Papa Owusu Ankomah said with the signing of the MOU, the vision by Ghana's First President Kwame Nkrumah for an integrated aluminium industry that had eluded Ghana for the past 45 years, would materialise under the second mandate of President Kufuor.

Mr Reitan said the MOU was an integral part of Alcoa's strategy to broaden its global presence in the primary business.

He said Ghana had the right mix of natural resources, power and people to create an integrated and globally competitive aluminium industry.

"We look forward to working with the Government of Ghana toward that goal," he said.

Russian Aluminium facing new uncertainty

Mineweb, South Africa '26-JAN-05 07:57' GMT © Mineweb 1997-2004

By: John Helmer

MOSCOW (Mineweb.com) -- Russian Aluminium (Rusal), the world's third largest aluminium producer, is facing fresh and costly uncertainty in its bid to secure adequate alumina supplies to fuel its four Russian aluminium smelters.

Unlike its Russian or international rivals, Rusal lacks sufficient bauxite of its own for processing into alumina, or enough alumina for electrolytic conversion into aluminium, to sustain its current level of metal production, or make possible its targets for smelter expansion. In order to meet these raw material needs, Rusal is dependent on imports from the Ukraine, Kazakhstan, and elsewhere. To reduce its vulnerability to price and supply volatility, the Russian company, which is controlled by Oleg Deripaska, is trying to buy bauxite and alumina wherever it can find them around the world. The search has taken Rusal to Australia, Guinea, the Congo, Nigeria, Jamaica, Venezuela, India, and other countries, with mixed results.

According to company statements, Rusal is producing and selling roughly 2.7 million tons of aluminium a year; most of this is sold for export. Output has been growing at 4 percent per annum. Bauxite production under management by the group was about 5.1 million tons, growing at 16 percent per annum; alumina output for 2004 was about 3.1 million tons, up almost 6 percent. Most of the gain in bauxite and alumina comes from operations by Rusal in the Republic of Guinea (Conakry).

Rusal does not disclose detailed financial data, except to say that revenues for the first half of 2004 rose to $2.6 billion, due to a sharp increase in LME aluminium price and continued production growth". Revenues in 2003 were reported at $4.5 billion. Another statement indicates thar Rusal's debt was $2.3 billion as of June 30 last. Information made available by the company indicates that its access to international loans has taken unusually lengthy periods to negotiate; has been difficult to securitize; and falls short of the group's funding requirements for its ambitious acquisition plan.

The group's free cashflow has also been constrained by Rusal's role as a source of funding for Basic Element, the Moscow-based holding for Deripaska's non-aluminium acquisitions, which include automobile manufacture, aircraft building, paper and pulp, insurance, and media. Russian capital control laws and the ongoing government focus on the legality of Rusal's tax optimization schemes have also been putting a crimp in the group's ability to place cash offshore to make acquisitions.

Recently, the Russian Central Bank disclosed that it was conducting a review of the bid by Rusal to finalize a deal to acquire a 20 percent stake in Queensland Alumina Limited (QAL), in the Australian state of Queensland. . That deal, announced after competitive bidding for assets of the bankrupt US producer Kaiser Aluminium, was announced on October 28. According to a statement posted on the Rusal website at the time, its bid "provides for a base price of US$401 million in cash, subject to certain working capital adjustments, plus purchase of Kaiser’s alumina and bauxite inventories and the assumption of Kaiser’s obligations in respect of approximately US$60 million of QAL debt."

Industry sources told Mineweb that the Rusal bid beat a $400 million offer from Glencore, the Swiss metals trader. The other two shareholders of QAL are Alcan with 42 percent, and Comalco with 38 percent. In theory, they have the right to prempt Rusal, and acquire the stake themselves at the winning bid value. A similar arrangement ended Rusal's attempt to outbid rivals last year for Kaiser's 65 percent stake in the Jamaican alumina operation, Alpart. Alpart's other shareholder Hydro Aluminium blocked Rusal's $316 million bid, and overcame Rusal's court objections to exercise of its purchase option. Hydro and Glencore now control Alpart. At stake for them all was Alpart's annual production of 1.6 million tons of alumina.

At QAL, however, industry sources believe Alcan and Comalco will stand pat, and not block Rusal's entry at $461 million. The bigger risk to Rusal, according to Australian sources, is that its investment entry into Australia is subject to vetting by the government in Canberra, before the foreign investment can be allowed. Sensitive to recent concerns at other foreign bids for Australian raw material sources, the government could refuse to approve Rusal.

At home in Russia, there are different concerns. A source at the Central Bank in Moscow told Mineweb that details of its investigation of the QAL deal are classified. However, the source indicated that the deal value must be assessed by the Bank in order for Rusal to pay into the Central Bank a reserve set-aside amount that is required by Russia's capital control laws. This sum may be held by the Central Bank for up to 60 days. According to the Central Bank, "the percentage of [the reserve requirement] is determined individually in each case and the exact percentage is not disclosed because of the classified data." Rusal's announcement of the deal in October said "the acquisition of this stake in QAL, the largest alumina refinery in the world, is an important step in Rusal's drive to enhance its self-sufficiency in raw material supplies. This transaction will add approximately 740,000 tons of alumina into Rusal's alumina base." The company added that "customary closing approvals including those by lenders and certain regulatory authorities" are "targeted for a closing in the first quarter of 2005."

Rusal has told Australians that, in addition to the offtake from QAL, it is interested in bidding for mining rights to develop the large Aurukun bauxite deposit in Queensland. The capital expenditure required for this project is high, and according to Australian sources, arguments with native groups over their rights in the territory, as well as their power to veto a large-scale mine, have so far deterred mine developers from making a commitment. Resolution of the Aurukun issues will take ten years, industry sources believe.

Industry sources in West Africa claim that Rusal has been losing ground to competing international groups, particularly the Chinese, who in the past were a major importer of Rusal primary aluminium to meet their country’s aluminium deficit. To deal with the country’s domestic needs, China has been reorganizing its internal aluminium production, and moving outside China to bid for bauxite and alumina production sites. According to industry sources, Rusal recently found that a Chinese group had signed up with the Guinean government (Conakry) for the Dian-Dian bauxite concession; in the past Rusal has claimed to have signed Dian-Dian for itself. Middle Eastern and North American groups have also entered the bidding in Guinea for bauxite and alumina. The outcome of this rivalry now hinges on the Guinean presidential succession. For the time being, Rusal is the dominant foreign operator in Guinea.

In parallel, Rusal has been telling industry analysts that it is close to signing an agreement to redevelop aluminium production in Nigeria. It is also at the preliminary study stage for aluminium projects in the Democratic Republic of Congo (Kinshasa) and the Republic of Congo (Brazzaville). It is not alone there either in the race for the resources. For the time being, Rusal's search for bauxute and alumina have been concentrated in the west of Africa, and SA sources say there is no sign as yet of a move into eastern or southern Africa, where SA aluminium producers are well entrenched; the sources do not rule the Russians out.

A month ago, Rusal claimed that it had won exploration and mining rights to three new bauxite deposits in Russia. In a website statement, it was announced that Rusal "is the winning bidder to explore and develop three bauxite deposits in the Severnaya Onega [North Onega] Group in Arkhangelsk region of Russia." No price for the bid was disclosed. Rusal's domestic rival, Siberian Ural Aluminium (SUAl), told Mineweb it had not lodged a bid.

The three deposits have been identified as Plesetsk, Denislavsk and Ikhtinsk, and according to Rusal, they hold reserves estimated respectively at 300 million, 17 million, and over 500 million metric tons of bauxite.

A Russian industry source is skeptical, telling Mineweb the deposits are of "low quality", which were first explored during the 1980s under the Soviet administration. "There was a plan," the source said, "to build the North-Onega smelter but it was not a first priority for the Soviet Government. This mine is not interesting for SUAL because they have the North-Timan bauxites, which are much cleaner and better quality. Their raw material supply requirement is more solved than Rusal’s one."

If SUAL, Rusal's rival in Russia, was not interested, then who did Rusal defeat in order to capture such bauxite reserves? The answer is a company called Trust-Region, registered in 2003, about which almost nothing is known. "I am afraid I a unable to estimate what TR is, and who stands behind it," an official in the Arkhangelsk region told Mineweb. Another regional source said he suspected Trust-Region was either a front for Rusal, or had agreed to take part in the bidding to satisfy local rules without having the means or the intention to bid against Rusal. "Honestly, I think they were together, because the price did not grow too much from the starting price," the source told Mineweb.

The Rusal website reports that the new bauxite deposits "will be supplied to Rusal's existing alumina refineries. Rusal is also considering possible construction of a new refinery in immediate proximity to the bauxite deposits." Rusal has also announced other plans to build greenfield aluminium smelters in Russia's north, far east, and southeast.

Vale Says It Won't Join BHP in Selling Valesul Smelter Stake

Jan. 27, 2005 (Bloomberg)

Brazil's Cia. Vale do Rio Doce, will consider buying BHP Billiton Ltd.'s stake in Brazilian aluminum smelter Valesul Aluminio SA if BHP goes ahead with plans to sell its shares in the company, a Vale spokesman said.

Vale, will not sell its 54.5 percent stake in Valesul if Melbourne, Australia-based BHP moves ahead with plans to sell its 45.5 percent stake, said Fernando Thompson, press spokesman for Rio de Janeiro-based Vale. Vale has the right of first refusal on BHP's Valesul stake if BHP sells it.

``Vale do Rio Doce has learned of BHP Billiton's interest in selling its share in Valesul,'' Thompson said in an interview in Rio de Janeiro. ``Vale do Rio Doce wants to state that it will not participate in the BHP initiative and that it is waiting for a statement from BHP Billiton, in accord with the terms of the Valesul shareholders agreement to decide if it will exercise, or not, its right to first refusal.''

RUSSIA'S MAJOR ALUMINUM PRODUCER TO BOOST INVESTMENT

RIA Novosti, Russia January 27, 2005

MOSCOW, January 27 (RIA Novosti) - Russian Aluminum Inc. (RUSAL) will bring its investments to 1.5 billion dollars in 2005, $1 billion up from last year's total, Chief Executive Alexander Bulygin announced at a press conference Thursday.

According to Mr Bulygin, $600 million will go to upgrade and expand some of the company's major production units, including in Krasnoyarsk, Nikolayevsk, and Achinsk. Some of the funds will be channeled into the development of RUSAL's industrial facility in New Guinea. And the remainder will be put into new acquisitions, in countries as wide apart as Australia, Nigeria, Venezuela, India, and Tajikistan.

This year, RUSAL is going to focus on key projects, such as the construction of the Rogun hydroelectric plant, in Tajikistan, and preparations for the construction of an aluminum smelter in the Irkutsk region, in Siberia, and of an aluminous cement plant in northwestern Russia, on the basis of the North Onega bauxite deposit, Mr Bulygin said.

The planned selloff of some of the RUSAL assets will be one of the major sources of finance for this year's investment program.

In 2004, Russian Aluminum's total investments came to 500 million dollars; $300 million of that sum went to upgrade major production units.

RUSAL's incomes are expected to reach 5.5 billion dollars in 2005. Last year's earnings totaled $5.4 billion, marking a 20 percent increase from 2003's figure. The company's export proceeds in 2004 increased by 16 percent year-on-year, to 4.3 billion dollars. Domestic sales were at $1.1 billion, up 32.5 percent from the year earlier. Looking back on RUSAL's performance in 2004, Bulygin said it had been the most productive year for his company thus far.

RUSAL was established in March 2000, as the result of a merger deal between two major Eurasian aluminum companies. It accounts for 75 percent of the nation's total raw aluminum output, and 10 percent of the world's.

RusAl weighs up a number of investment projects

RosBusinessConsulting, Russia 27.01.2005

Moscow 15:48:07.RusAl is preparing to invest up to USD1bn in new acquisitions for 2005, journalists were told today at a press conference. This sum includes money to be invested in 20 percent of the world's largest aluminum enterprise - Queensland Alumina Limited (Australia), purchased by RusAl for USD401m last year. In 2004, RusAl transferred USD40m to pay for the stake, the remaining sum being due this year. As well as this, RusAl assumed the enterprise's liabilities worth USD60m. Thus, the available funds to invest in new acquisitions are to total around USD500 to 600m. Currently, RusAl is considering a number of investment sites, including a bauxite deposit in Australia, the Aluminium Smelter Company of Nigeria (ALSCON), and a number of projects in Guyana, Venezuela, India and Tajikistan. The investments are to be financed by RusAl's earnings, project financing, and proceeds from non-core asset sales.

Alcoa mulls over Elkem bid

Aftenposten, Norway 27 Jan 2005

Alcoa Inc. will take at least six weeks to decide whether to accept an offer for its stake in Norwegian metal group Elkem, a spokesman for the US aluminum producer said on Wednesday.

"This whole thing will take several weeks, at least six weeks," Alcoa spokesman Kevin Lowery told Reuters.

Norway's food and media group Orkla is acquiring Elkem. It owns 50.03 percent of Elkem shares and is bidding for the rest, including Alcoa's 46.5 percent.

On Tuesday, Orkla ousted its chief executive, Finn Jebsen, because of dismay by the board at the hidden costs of the Elkem takeover bid.

Orkla chairman Johan Fredrik Odfjell said the takeover bid, launched on Jan. 10 and valuing the group at USD 1.84 billion (NOK 11.59 billion), was unaffected by Jebsen's departure.

Jebsen has been widely criticized for failing to realize the bid would also require Orkla to offer to buy all of Elkem's Swedish aluminum unit Sapa, adding USD 288.5 million (SEK 2.0 billion) to the bill.

RUSAL Reports Production Results for 2004 : click on the link below for the full report

http://www.prnewswire.com/cgi-bin/stories.pl?ACCT109&STORY/www/story/01-27-2005/0002908164&EDATE

Kaiser Aluminum files proposal to resolve personal injury claims

Houston Business Journal, TX 28 Jan 2005

Kaiser Aluminum said it filed a proposal this week with the U.S. Bankruptcy Court of Delaware to resolve asbestos personal injury claims and demands related to the company's plan of reorganization to emerge from Chapter 11 bankruptcy.

That proposal, between Kaiser (OTCBB: KLUCQ) and other parties concerning the reorganization plan, includes creating a $13 million trust to assume liability for covered personal injury claims.

Houston-based Kaiser, which filed for Chapter 11 bankruptcy protection from creditors in February 2002, is working to emerge from bankruptcy protection near the middle of next year.

Romania: Alro raises 4.3 mln euro capital

Reporter.gr (subscription), Greece 12:01 - 28 January 2005 -

Alro, the Romanian aluminium smelter, raised just 161.7 billion lei ($5.6 million/4.3 million euro) in a capital hike initially designed to boost its capital by 234.5 billion lei to 2.18 trillion.

Shareholders subscribed for 32,347,504 shares at their nominal value of 5,000 lei each, the company said in a statement to the Bucharest Stock Exchange (BVB), where it is listed.

The 14.5 million shares that were not subscribed for were cancelled.

Guj to name alumina unit promoters soon

Business Standard, India January 30, 2005

Press Trust of India / Mumbai

The Gujarat goverment is planning to finalise the promoters for its proposed alumina project in Kutch next week. The state-owned Gujarat Mineral Development Corporation (GMDC) is expected to pick up between 11-26% equity in the project.

"We have received the report of the committee formed to examine the bids for the project, and will finalise the promoters next week," government officials said today.

The state government has received bids from mineral exporter Ashapura Industries and Man Industries for the project, they added.

Ashapura has formed an equal stake JV with a Chinese company Sichuan Aostar, which also operates an aluminium smelter to bid for the project.

It has envisaged an investment of Rs 2,500 crore to produce 0.5 million tonne alumina in the first phase, and proposes to sell about 75% production to Sichuan and export the rest.

The other bidder, the Man group, has formed a joint venture with the

US-based Aluchem to set up a Rs 1,350 crore alumina refinery and speciality alumina chemicals project.

The proposal envisages an alumina plant of 5,00,000 tonne per annum to manufacture alumina-based chemicals such as alumina trihyderate, thermally reactive lumina, tabular alumina and calcined alumin cement.

The company proposes to sell 70% of alumina to Dubal of UAE or Alba of Bahrain, and use the remaining 30% for value addition.

Eskom expands to meet demand

IAfrica South African News, South Africa Mon, 31 Jan 2005

Justin Brown

Eskom is set to embark on a massive capital expansion programme to meet the growing demand for power from the South African economy, Eskom general manager of strategy Andrew Etzinger said on Friday.

Eskom in one of the world's top eight power producers in terms of installed capacity, which currently stands at 41.298 mega watts.

From 2005 to about 2014, Eskom is forecasting energy demand growth to range from two percent to four percent per annum, and then from 2015 onwards the utility is forecasting 1.5 percent energy demand growth per annum to 2025.

Over the next 20 years, Eskom sees electricity demand at 1200 mega watts per annum.

Eight new power stations are needed

"Approximately eight new stations are required over this time and commitments to about ten stations need to be taken over this time," Etzinger said.

Eskom currently has 24 power stations — 13 coal-fired stations, six hydro- powered stations, two pump-storage stations, two gas-powered stations and one nuclear-power station in the Western Cape. Of these 24 stations, 17 are currently operational.

"Every three years Eskom will have to spend about R30-billion, or one billion rand per month, on 3600 mega watts of capacity as long as the demand growth remains substantial," he added.

Coega to sap energy

A key event that Eskom is anticipating is the development of the Coega aluminium smelter, which would draw on a considerable amount of extra energy.

At present, South Africa is among the cheapest providers of electricity in the world and this has attracted aluminium smelters to be located in the region with the Hillside and Bayside aluminium smelters in Richards Bay and the Mozal smelter in Mozambique.

Canadian aluminium group Alcan and the South African government are currently conducting a feasibility study regarding the proposed Coega aluminium smelter, which will be located in the Eastern Cape.

Peak electricity supply to run out in 2007

At this stage, Eskom's peak electricity supply capacity is set to run out in 2007. Eskom generates its peak capacity electricity from hydroelectric power, pumped storage and gas turbines, Etzinger said.

"As demand grows peaking capacity will be the highest priority for the next ten years," he added.

On the other hand, Eskom's base-load capacity, which is generated by coal-fired and nuclear power stations, is set to run out in 2011.

"Studies are underway to determine the most viable options for peaking and base-load capacity," Etzinger said.

To cope with the growth in demand, Eskom is going to put its mothballed power plant Simunye back into service between 2006 and 2010.

By November 2005, Eskom's board would make a decision about investing in a base load plant that would come on stream by 2010.

Eskom to look at gas-fired plants

The Department of Minerals and Energy has also asked for expressions of interest for a gas-fired plant.

To increase Eskom's peak capacity, the utility is also looking to establish new gas-fired plants with the Kudu gas field in Namibia having the potential to produce about 2000 mega watts for the west coast and natural gas from the Pande field in Mozambique has the potential to supply 1000 mega watts to the KwaZulu-Natal coast.

The advantages of gas power generation is that there is a shorter time taken to construct a gas power plant, less environmental effect when compared with coal fired stations and lower capital cost.

However, the disadvantages of gas power are the volatility of the gas price, growing concerns about global gas supply and the cost of fuel.

Eskom is also looking at importing power from hydroelectric projects in the rest of southern Africa including: Mepanda Uncua and Cahora Bassa North in Mozambique, Inga in the Democratic Republic of Congo, Batoka Gorge in Zimbabwe as well as Kafue in Zambia.

However, Etzinger said a key disadvantage of importing hydroelectric power was the onerous cost of transmission infrastructure.

"If Eskom doesn't do its job very well South Africa will have to swallow three bitter pills (while Eskom expands its capacity)," Etzinger said.

The first was above inflation price increases in the price of power, a tight power system, with occasional black outs, and unreliable

Alcoa Buys Russian Facilities for $257M

Seattle Post Intelligencer, WA 31-Jan_2005

CHARLES SHEEHAN, Associated Press

PITTSBURGH - Aluminum giant Alcoa Inc. acquired two Russian fabricating plants in a $257 million cash deal, the company said Monday.

Alcoa said it will invest another $80 million in cash and technology at the plants owned by the country's main aluminum maker, Rusal. Alcoa will record an after-tax loss this year of $40 million as the facilities are brought into the Alcoa network, company officials said.

The Pittsburgh-based company announced a capital spending plan of $2.5 billion for 2005, $1.6 billion of which was earmarked for expansion. Alcoa moved fast on the Russian acquisition, announcing less than one year ago that the company was in talks to buy the facilities.

The plants are in Samara and Belaya Kalitva.

The Samara facility, about 500 miles southeast of Moscow, has extrusion, and forging capabilities and can produce flat rolled products. The Belaya Kalitva facility, about 500 miles south of Moscow, has many of the same capabilities, plus plate rolling and finishing equipment.

"We have a proven track record of taking fabricating assets - such as those in Hungary, Spain and Italy - integrating them into Alcoa, and putting them in a strong position to compete globally and grow profitably," said Alain Belda, Alcoa chairman and chief executive officer. "These countries have provided additional growth opportunities to Alcoa once we began operating in them and we look forward to the chance to grow further in Russia."

Alcoa serves the aerospace, automotive, commercial transportation and industrial markets, and employs 119,000 people in 43 countries.

RUSAL, Lahmayer to sign agreement on Rogun HPS project.

ITAR-TASS, Russia 01.02.2005

DUSHANBE, February 1 (Itar-Tass) - The Russian Aluminium (RUSAL) Company and Tajikistan's Ministry of Energy are to sign an agreement here on Tuesday with the German Lahmayer Company on the elaboration of a feasibility study for the construction of a Rogun hydropower station (RHPS) on of the Tajik river Vaksh, Minister Dzhurabek Nurmakhmatov has told Itar-Tass, pointing out that the German company had won an international tender to select a contractor to work out a feasibility study.

The Tajik Minister sad the agreement is expected to be signed by the General Directors of the RUSAL and Lahmayer for the Russian and German sides. He pointed out that, actually, a feasibility study for the RHPS is already available but it had been prepared way back in Soviet times. "Nowadays, no reputable bank would agree to lend credits for the construction project on the strength of such (outdated) documentation. A newly-elaborated feasibility study will be up to international standards,» the Minister emphasised.

The feasibility study will include both an estimate of expenditure on the work already done at RHPS project and an amount of investments necessary to finalise the construction, Nurmakhmatov said.

The construction of the RHPS began in March 1981 but was suspended in 1993 for lack of funds and due to the difficult socio-political situation in the republic. By that time, about 802 million US dollars worth of capital investments were used. About 1,400 million USD are necessary to finalise the RHPS construction. RUSAL, under an agreement signed on October 16, last year, intends to invest 560 million USD to complete the construction of the RHPS.

RUSAL: RUSAL revives Soderberg Club meetings - Soderberg technology

Webbolt Business News (subscription), Canada : Jan 31,2005, 13:33

SUMMARY: RUSAL, one of the world's leading aluminium producers plans to revive the "Soderberg Club" meetings.

http://webbolt.ecnext.com/coms2/description_43236_RUSAL310105_MET

Gulf Extrusions invests AED 120 million to expand production capacity to 55,000 tons per annum in 2005

AME Info, United Arab Emirates 31-Jan_2005

Gulf Extrusions, the UAE-based pioneer and market leader in aluminium extrusion in the GCC region, has set in motion plans to increase the capacity of its Jebel Ali manufacturing facility to over 55,000 tons per annum with the purchase of two new aluminium extrusion presses.

The company, which currently has an existing capacity of 30,000 tons per annum, is actively targeting global markets for extruded aluminium profiles with the increased capacity.

'In the 27 years of its presence in the Middle East markets, Gulf Extrusions has distinguished itself as a leading producer of top quality aluminium profiles. Our profiles have successfully met and exceeded all international standards governing the import of aluminium products. This has resulted in a rapid increase in international demand for Gulf Extrusion's profiles,' explained Robert Holtkamp, Director of Sales and Marketing, Gulf Extrusions. 'In 2003-2004, we succeeded in capturing an important market share for aluminium profiles in many global markets. Our current manufacturing facility is already operating to full capacity. We are now investing into new presses to meet potential demand.'

The company is investing over AED 120 million in the new aluminium extrusion presses, which are being sourced from Germany. The first press will be operational by August 2005 and the second one in October 2005.

In the Middle East, with the installation of the new presses and the resultant increased capacity, Gulf Extrusions will be in a position to target a greater market share of both the UAE (where it already has over 50 per cent market share) and other regional markets. In the international arena, the company will seek to build upon its recent successes in Europe, West Africa, Asia and Canada and build upon its market presence. The company has identified European and South East Asian markets as particularly high growth areas.

'Gulf Extrusions is already leading the aluminium extrusion sector in the Middle East. We feel the time is right for the company to takes its place among the global market leaders. In this quest, our effort is to increase capacity and invest in improved quality products. The acquisition of the new presses will equip us to optimise our export potential, as well as to open new markets for our exceptional profiles,' added Holtkamp.