AluNews - July 2005

German Power Regulator May Fail to Cut Prices, Aiding RWE, E.ON

July 1, 2005 (Bloomberg)

Germany's new energy regulator, set up to increase competition in Europe's biggest power market, may take years to cut prices and enable more companies to compete for customers, helping earnings at RWE AG and E.ON AG.

The regulator, which starts today, will oversee transport prices on electricity and natural-gas networks to enable companies that don't own grids to transmit power to customers at competitive prices. It can hold off until the end of 2006 to set price caps, according to the law passed on June 17 in German parliament.

``The task the regulator faces is massive,'' said Alfred Steiof, who runs Frankfurt-based Ensys AG, one of about 10 independent power suppliers. ``It will take at least until 2007 to get a grip on prices, and it doesn't even touch key issues.''

Earnings at RWE, based in Essen, and E.ON, based in Dusseldorf, Germany's largest utilities, have risen more than 30 percent since 2001 as they benefited from soaring power prices and grid access fees that kept out competitors such as Dutch Essent NV. Electricity prices in Germany are now higher than they were when the market opened to competition in 1998.

``The regulator is more beneficial to E.ON and RWE than a threat to their earnings,'' said Knut Mueller, who helps manage the equivalent of $58 billion at Commerzbank AG in Frankfurt. ``I prefer German utilities to their European peers, as the regulator finally gives them certainty and doesn't really help rivals.''

Surging Shares

RWE shares have risen about 70 percent since January 2004, valuing the company at 30 billion euros, and E.ON shares have increased 44 percent, making it Germany's third-largest publicly traded company, worth 51 billion euros. The 17-member Bloomberg Europe Electric index has risen 42 percent in the period.

A commission that advises the German government on competition issues, the so-called monopoly commission, said less than a year ago that competition in the German energy market is declining and that Germany's largest utilities have ``virtually closed'' the market for new entrants.

Ensys, which supplies power to companies such as Heidelberger Druckmaschinen AG, the world's largest maker of printing machines, spends as much as 60 percent of its pretax costs on network fees, Steiof said. Overall, grid fees make up a third of consumer prices, while the rest stems from taxes and generation costs.

Network costs are more than twice as high in Germany than they are on average in the European Union, the association of industrial electricity consumers said.

Earnings Impact

German network prices are justified as they take into account investments to maintain the networks, E.ON and RWE have repeatedly said. German power companies will have to spend as much as 40 billion euros to replace 40,000 megawatts of generating capacity and maintain their grids by the end of the next decade.

``Utilities are quite efficient already and grid prices aren't that high,'' said Werner Brinker, chief executive officer of Oldenburg-based EWE AG, the country's fifth-largest utility. ``Regulation can only then start to have an effect on some utilities when the regulator starts putting caps on prices.''

Regulators across Europe are slow in trying to clamp down on power companies as the region opens up its $300 billion power and gas market. The European Union has already delayed the start of power-market regulation in the 25 member states by a year after countries such as Germany and France had pushed for a delay.

Too Little, too Late?

Wrangling between the government and the opposition-led upper house delayed regulation in Germany by a year. Chancellor Gerhard Schroeder, whose government backs renewable energy subsidies and decided to phase out of nuclear power, is seeking elections in September, which it's set to lose, according to opinion polls.

The opposition Christian Democratic Union has said it will reconsider the nuclear power law that calls for a phaseout.

Germany has the second-highest electricity prices in Europe, prompting Norsk Hydro ASA, the world's fourth-largest aluminum producer, to announce plans to shut two German plants. Corus Group Plc, the U.K.'s biggest steelmaker, is considering closing its Voerde aluminum plant because power prices are too high.

``We can shop around for power and go to different suppliers, but they all make us virtually similar offers,'' said Werner Marnette, chief executive officer of Norddeutsche Affinerie AG, in an interview on June 17. ``The regulator will lower power prices by a fraction, he won't lead to more competition though.''

Europe's largest copper refiner uses about 1 terawatt hour of electricity a year, enough to light 1 billion homes. It pays 20 percent of its annual costs for electricity, and buys its power from Electrabel SA, Belgium's largest utility.

To contact the reporter on this story:

Peter Dinkloh in Frankfurt at pdinkloh@bloomberg.net.

Kaiser, Ecology reach cleanup agreement

The Spokesman Review (subscription), WA July 1, 2005

Plan will handle PCBs, other pollutants at Trentwood millDOE agrees to plan for handling pollutants from decades of industry

John Stucke Staff writer

Review, comments

People have until Aug. 10 to review the agreement and submit public comments. The plan and supporting documents are available for review at libraries, the Department of Ecology office in Spokane, or on the agency's Web site at www.ecy.wa.gov/ programs/tcp/sites/Kaiser_ trentwood/Kaiser_ tw_hp.html

Kaiser Aluminum and the state Department of Ecology have reached a deal calling on the company to clean up dangerous industrial pollutants from the Trentwood rolling mill.

The agreement is considered a major step to finally get a fix on the polychlorinated biphenyls (commonly known as PCBs), diesel fuel, oils and metals from the massive Spokane Valley factory.

Kaiser has sunk 100 testing wells on its 525-acre Trentwood site to track several plumes of PCB-tainted pollution that have spread into soils and groundwater that is part of the region's aquifer. Handling Trentwood and addressing dangerous pollutants threatening public water sources has been a priority for Ecology.

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In terms of pollution significance, Ecology spokeswoman Jani Gilbert said, "This makes BN(SF) look like a tablespoon of Kool-Aid."

BNSF Railway has been under scrutiny for its leaky refueling depot north of Post Falls. Sitting atop the aquifer that supplies drinking water to the region, the depot's leaks have been a major new concern after railroad assurances that its containment apparatus was flawless.

The Trentwood plant, though, has been a polluter since the federal government built it in 1942 to make aluminum for World War II aircraft. Kaiser began leasing the plant after the war in 1946, later buying it along with the now-shuttered Mead smelter.

PCBs were detected at the Trentwood site many years ago. Initially, two separate plumes of petroleum were detected in groundwater. To curb the spread of the contamination, Kaiser built a pump-and-treat system in 1994 and continues to check its progress with its battery of monitoring wells.

Then a new pollution area containing high amounts of PCBs was detected last year.

Since it was not part of a petroleum plume, the PCBs could not be pumped and treated.

The fear, Gilbert said, is that PCBs could migrate to the Spokane River, further polluting a waterway already considered polluted. Residents are warned against eating fish caught in the river.

PCBs have been banned in the United States since 1977 and are a suspected human carcinogen, according to the federal Agency for Toxic Substances and Disease Registry.

They were used as coolants and lubricants in electrical equipment because they don't burn and were good insulators.

Besides the PCBs detected underground, Kaiser also continues to flush waste into the river – some of it containing PCBs – through a pipe, Gilbert said.

The company has a state permit allowing the practice, she said, although Ecology and the company are negotiating a separate plan to reduce and perhaps one day eliminate this point-source of pollution under a broader, multiparty agreement.

In a news release, Ecology toxic-cleanup manger Flora Goldstein said the agreement regarding the underground pollution requires Kaiser to conduct a formal study of the contamination and then come up with cleanup plans.

Jindal South West plans to set up Rs 9,000-cr aluminium smelter

Times of India, India TIMES NEWS NETWORK[ SATURDAY, JULY 02, 2005 12:03:29 AM ]

HYDERABAD: Jindal South West (JSW), part of the USD 4-billion OP Jindal group, is planning to set up an aluminium refinery and smelter near Visakha-patnam. The project is estimated to cost about Rs 9,000 crore.

The company on Friday signed a memorandum of agreement (MoU) with the state government for setting up the project.

The project would have a production capacity of about 1.5 million tonnes per annum for the refinery and 0.25 million tonnes per annum for the smelter. In addition, the company would also set up a 650-MW power plant.

"The refinery and smelter need power and we are looking at the possibility of setting up a thermal power plant," JSW joint managing director and CEO Raman Mathok said.

Andhra Pradesh Mineral Development Corporation would supply the raw material — bauxite ore — to the project. According to a company statement, the time span between project planning and production take-off is expected to be about three years.

The entire project would be implemented in three phases — spread over 5-7 years — and the firm plans to invest Rs 2,500-3,000 crore in the first phase, Mathok said.

BPA sets power for NW smelters

Spokesman-Review July 2, 2005

Compiled from staff and wire reports

The Bonneville Power Administration announced it will offer electricity to aluminum companies in the Northwest through 2011.

In all, BPA will provide 577 megawatts to several companies, a fraction of the power once sold to what had been a bedrock industrial foundation of the Northwest.

It was just a few years ago that 10 smelters in the region produced half the country's aluminum, providing high-wage blue collar jobs including more than 1,000 at the Mead smelter.

But shifting markets, aging factories, soaring power prices and BPA's growing obligations to provide low-cost energy to other region users began taking a toll.

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Today half the smelters are shuttered or razed. The others are either mothballed or running at reduced capacity.

BPA will provide Alcoa with 320 megawatts for its smelters in Ferndale and Wenatchee. It will also feed the smelter in Columbia Falls, Mont., about 140 megawatts, and allow Golden Northwest Aluminum Co. up to 100 megawatts for smelters in The Dalles, Ore., and Goldendale, Wash.

Another 17 megawatts will be purchased by the Port Townsend Paper Co. mill.

The average price for the power is $30 per megawatt hour. A megawatt hour is roughly the amount of electricity used by 650 homes for one hour.

For CFAC, power cost still the critical question

Daily Inter Lake, MT Saturday, Jul 02, 2005 - 09:57:06 am PDT

By WILLIAM L. SPENCE The Daily Inter Lake

Despite an offer of 140 megawatts of federal power, Columbia Falls Aluminum Co. officials say it's too early to tell when or if the plant will increase production.

The Bonneville Power Administration announced Monday that it would supply up to 577 megawatts to a handful of industrial customers beginning late next year, including 140 megawatts for CFAC.

However, that supply isn't guaranteed and the price is still nebulous, according to Haley Beaudry, CFAC's external affairs manager.

"We wish Bonneville could have come to an actual decision," Beaudry said. "They put a lot of effort into working out this agreement, but it doesn't offer any guarantees to the aluminum companies."

The "record of decision" issued by Bonneville also doesn't specify what price would be charged for the electricity, he said. That will be a critical factor in determining whether the 50-year-old plant can increase production.

"We need to see something below $30 per megawatt hour," Beaudry said. "Everyone in the Pacific Northwest needs to see that," including public utilities.

CFAC hasn't operated at full capacity since September 2000, largely because of high power prices.

At the time, the company employed about 540 people, with a $30 million annual payroll.

In January 2001, the plant shut down completely for the first time since coming online in 1955. Partial production resumed in March of 2002.

CFAC has been operating at 20 percent of

capacity since March of '03. It currently employs about 150 people.

At full capacity, the plant uses 345 megawatts of electricity. Consequently, a $1 increase in power prices costs the company about $3 million per year.

Beaudry said the long-term implications of Bonneville's offer won't be known until a firm power supply contract can be negotiated. That probably won't be until sometime next spring.

Raw material costs and aluminum prices also will affect production levels.

"For the last several months, aluminum prices have been pretty good," Beaudry said. "But between the raw material costs and power prices, it's still a tough industry."

Reporter Bill Spence may be reached at 758-4459 or by e-mail at bspence@dailyinterlake.com

China sees coming hot rolled aluminum plate slab boom

Interfax.cn, Russia O5-jUL-2005

By Michelle Yuan

Shanghai. July 5. INTERFAX-CHINA - China's hot rolled aluminum plate slab production capacity has seen significant expansion this year. By the end of this year China will be capable of producing 2.5 mln tons hot rolled plate slab per annum, which will largely replace China's huge imports of high quality aluminum plates. However, experts warn that the sector of hot rolled aluminum plate slab production has seen trend of over capacity and investors should be cautious with initiating new projects of this kind.

Over the first six months of this year two major hot rolled aluminum plate slab lines launched operation - the four-stand tandem hot rolling mill pf Chalco Southwest Aluminum Plate and Strip Co., Ltd. (Southwest Aluminum Plate and Strip) and the twin coiler single stand hot reversing mill of the Luoyang Wanji Aluminum Fabrication Co., Ltd. (Wanji). The Yugang Longquan Aluminum Co., Ltd. (Longquan Aluminum) will also start test operation of its 1-stand hot rolling mill at the end of this year.

"Besides the three lines, China is building many other hot rolled aluminum plate projects, which are all due for completion in 2006 or 2007. Then the production capacity would reach 4 mln tons. Once they are finished, China will be able to manufacture considerable amount of high value added aluminum plates, which will squeeze out a large part of imports," Wang Zhutang, a professor with the China Nonferrous Metals Technology and Economy Institute and an special consultant to the government affiliated Antaike Information Development Co., Ltd. told Interfax.

China's import value of aluminum plates and strips was USD 1.17 bln, "which is enough for building 7 four stand tandem hot rolling mills," he said.

There are generally three methods to make slabs for aluminum plate cold rolling: hot rolling, two roll continuous rolling, and Hazellett continuous rolling. The latter two methods are also put together in a system called continuous rolling in order to separate them from hot rolling.

Strong market for hot rolled slabs

The hot rolled aluminum plate slab are a necessary raw material requirement for the processing of many high quality aluminum products, including aviation plates, PS sheets, CTP (Computer-to-plate) sheets, electronic foils, and container materials, while the latter two techniques that are of less cost can produce relative lower quality slabs.

"We eye a huge market potential in high quality aluminum plates and strips, which demands large supply of hot rolled aluminum plates instead of continuous rolled plates. We predict that the transportation sector, including automobile, shipbuilding, aviation, bicycle, railway vehicles, and containers, will be the largest consumer of high quality aluminum plates in the future," said Fang Guangshan, the Head with the Administration Office of Southwest Aluminum Plate and Strip.

"So far the transportation sector only accounts for 15% of the total demand for aluminum plates per year in China. We predict that the demand would surge by 20% per year over the next ten years," he added.

"The increasing demand in the transportation sector as well as other fields, such as container production, will provide lots of business opportunities for aluminum processors as well as overseas equipment makers that have state-of-the-art technology," he said.

Concerns about overcapacity

However, although China's demand for high quality aluminum plates is increasing rapidly, experts are worried about a possible trend towards overcapacity of hot rolled plates and suggest investors should think more before launching new projects in next five years.

"Actually this trend has emerged. The ideal proportion of hot rolled plate slab and continuous rolled plate slab is 4 to 6, which means hot rolled plate slab capacity attributes for 40% of the total slab capacity. However, telling from the total capacity of China's hot rolling lines in the next few years, the proportion has largely exceeded the level. By the end of this year more than 50% of the total slab capacity will be contributed by hot rolling mills," said Wang Weidong, an analyst with Antaike Information Development Co., Ltd.

"Eying China's fast increasing demand for high quality aluminum plates, I think the ideal proportion is 5 to 5, which guarantees the hot rolling lines will reach full production and the investors would receive satisfactory return on investment. If the capacity of hot rolled plate slab is too large, excessive competition in the sector will exert great pressure to the company because the investment into building hot rolled lines is relatively large compared with continuous rolling mills," said Wang Zhutang of the Nonferrous Institute.

In addition to Southwest Aluminum's project, currently there are 5 multiple-stand aluminum hot rolling projects that are under construction or are in operation, including the 4-stand hot rolling mill with a annual capacity of 400,000 tons hot rolled slab by the Qinghai Jinyi New Aluminum Products Co., Ltd., the 2,350mm 4-stand hot rolling mill with a capacity of 400,000 tons by the Nanshan Group, and the 4-stand hot rolling mill with a annual capacity of 400,000 tons by the Asia Aluminum Holding Ltd.

In addition China has 13 twin coiler single stand hot reversing mills operating or under construction, of which total capacity is 800,000 tons hot rolled slab by 2007, of which 400,000 tons will be available within this year.

So the total capacity of hot rolled aluminum plate slab would reach 4 mln tons in 2007, while that of continuous rolled plate slab would be only 2.4 mln tons, which indicates that around 62.5% of the capacity will be contributed by hot rolling mills, according to the China Nonferrous Metals Industry Association.

Facility Overview:

Southwest Aluminum Plate and Strip's four-stand hot rolling mill: The mill can roll all kinds of deformed aluminum alloy products. The slab widths range from 800mm to 1,800mm. The largest thickness of slab is 520mm and would reach 610mm in the long run.

The mill is designed by VAI Industries Ltd. in the U.K., which won the bid in which SMS-Demag also took part. The electric appliance and controlling system is provided by TOSHIBA-GE.

It launched production on June 28 and is projected to produce 650,000 tons slab in the rest of this year.

Wanji's twin coiler single stand hot reversing mill: The 2,400 mm equipment is the largest of its kind in China with a capacity of 150,000 tons hot rolled slab with thickness range from 3.5mm to 8mm per annum. It is designed by a domestic nonferrous metal technology institute, of which key parts including electric control, hydraulic pressure components, thickness measuring and slab shape controlling elements are purchased from overseas. Wanji is a joint venture of the China Nonferrous Metals Processing Technology Co., Ltd. and the Luoyang Xin'an Power (Group) Co., Ltd.

Longquan Aluminum's 1-stand hot rolling mill: The line is able to produce 200,000 tons hot rolled slab per annum. The thickness range is from 3.5mm to 8mm and the roll width is 2,600mm. It is due for test running by the end of this year. It is designed by the Luoyang Nonferrous Metals Processing Design Institute. Main parts of the line are China made. However, key parts are also from overseas. Longquan Aluminum is a subsidiary of the Yichuan Power in Henan Province.

-MY

Europe's pollution penalties up 10% to record

Financial Times, UK July 4 2005 20:10 | Last updated: July 4 2005 20:10

By Kevin Morrison in London

The cost of polluting in Europe rose more than 10 per cent to a record level on Monday on the eve of Wednesday's climate change talks between leaders of the Group of Eight leading industrialised nations.

With gas becoming more expensive, utilities are burning more coal and paying more for the permits to allow them to increase their pollution levels. However, rising oil costs have driven up the price of gas, which in turn has lifted electricity and emissions prices.

Carbon dioxide emission prices in Europe, which has the most advanced trading scheme in the world, rose to a record €29.35 ($34.92) a tonne, up €2.85 on the day and more than four times the figure at the start of the year.

The increase threatens some industrial companies that may struggle to pass on increased costs if power and pollution prices remain high. "This is a scheme that was designed for the polluter to pay but it has ended up with the consumer paying," said Erik Verhaar, head of European power and gas at Deutsche Bank.

Power prices in Germany, France and the UK reached record levels on Monday.

In the UK, gas prices for the coming winter are up more than 70 per cent since the end of last year, though coal price gains have been more modest.

Chris Rowland, head of utilities at Dresdner Kleinwort Wasserstein, said the higher emission costs could force some industrial companies to move production out of Europe. "At close to €30 a tonne, the cost to pollute is greater than the returns they make on their underlying business," Mr Rowland said. "If emission prices go higher then it may be more viable for some companies to stop producing, sell their allowances, and move their production outside Europe."

Rising energy costs have already prompted aluminium producers in Europe to threaten plant closures. Norsk Hydro, the Norwegian energy and metals group, and Corus, the Anglo-Dutch steel group, have threatened to close aluminium plants in Germany.

This follows the closure of the Hamburger aluminium smelter in Germany last month. Futures markets suggest oil prices will remain about $60 for the rest of the year. Louis Redshaw, associate director of carbon trading at Barclays Capital, said this may keep gas and emission prices high.

Data released last week showed that more investors were speculating that oil prices could fetch $80 a barrel by the end of the year with increased activity in options trade at this price on the New York Mercantile Exchange.

Market to Heat up for Hot Rolled Aluminium Plate Slab

Resource Investor, VA 05 Jul 2005 at 07:40 AM EDT

By Michelle Yuan

SHANGHAI (Interfax-China) -- China's hot rolled aluminium plate slab production capacity has seen significant expansion this year. By the end of this year China will be capable of producing 2.5 million tonnes hot rolled plate slab per annum, which will largely replace China's huge imports of high quality aluminium plates. However, experts warn that the sector of hot rolled aluminium plate slab production has seen trend of over capacity and investors should be cautious with initiating new projects of this kind.

Over the first six months of this year, two major hot rolled aluminium plate slab lines launched operation - the four-stand tandem hot rolling mill pf Chalco Southwest Aluminum Plate and Strip Co., Ltd. (Southwest Aluminum Plate and Strip) and the twin coiler single stand hot reversing mill of the Luoyang Wanji Aluminum Fabrication Co., Ltd. (Wanji). The Yugang Longquan Aluminum Co., Ltd. (Longquan Aluminum) will also start test operation of its 1-stand hot rolling mill at the end of this year.

"Besides the three lines, China is building many other hot rolled aluminium plate projects, which are all due for completion in 2006 or 2007. Then the production capacity would reach 4 million tonnes. Once they are finished, China will be able to manufacture considerable amount of high value added aluminium plates, which will squeeze out a large part of imports," Wang Zhutang, a professor with the China Nonferrous Metals Technology and Economy Institute and an special consultant to the government affiliated Antaike Information Development Co., Ltd. told Interfax.

China's import value of aluminium plates and strips was $1.17 billion, "which is enough for building seven four-stand tandem hot rolling mills," he said.

There are generally three methods to make slabs for aluminium plate cold rolling: hot rolling, two roll continuous rolling, and Hazellett continuous rolling. The latter two methods are also put together in a system called continuous rolling in order to separate them from hot rolling.

Strong Market for Hot Rolled Slabs

The hot rolled aluminium plate slab are a necessary raw material requirement for the processing of many high quality aluminium products, including aviation plates, PS sheets, CTP (Computer-to-plate) sheets, electronic foils, and container materials, while the latter two techniques that are of less cost can produce relative lower quality slabs.

"We eye a huge market potential in high quality aluminium plates and strips, which demands large supply of hot rolled aluminium plates instead of continuous rolled plates. We predict that the transportation sector, including automobile, shipbuilding, aviation, bicycle, railway vehicles, and containers, will be the largest consumer of high quality aluminium plates in the future," said Fang Guangshan, the Head with the Administration Office of Southwest Aluminum Plate and Strip.

"So far the transportation sector only accounts for 15% of the total demand for aluminium plates per year in China. We predict that the demand would surge by 20% per year over the next ten years," he added.

"The increasing demand in the transportation sector as well as other fields, such as container production, will provide lots of business opportunities for aluminium processors as well as overseas equipment makers that have state-of-the-art technology," he said.

Concerns About Overcapacity

However, although China's demand for high quality aluminium plates is increasing rapidly, experts are worried about a possible trend towards overcapacity of hot rolled plates and suggest investors should think more before launching new projects in next five years.

"Actually this trend has emerged. The ideal proportion of hot rolled plate slab and continuous rolled plate slab is four to six, which means hot rolled plate slab capacity attributes for 40% of the total slab capacity. However, telling from the total capacity of China's hot rolling lines in the next few years, the proportion has largely exceeded the level. By the end of this year more than 50% of the total slab capacity will be contributed by hot rolling mills," said Wang Weidong, an analyst with Antaike Information Development Co., Ltd.

"Eying China's fast increasing demand for high quality aluminium plates, I think the ideal proportion is five to five, which guarantees the hot rolling lines will reach full production and the investors would receive satisfactory return on investment. If the capacity of hot rolled plate slab is too large, excessive competition in the sector will exert great pressure to the company because the investment into building hot rolled lines is relatively large compared with continuous rolling mills," said Wang Zhutang of the Nonferrous Institute.

In addition to Southwest Aluminum's project, currently there are 5 multiple-stand aluminium hot rolling projects that are under construction or are in operation, including the 4-stand hot rolling mill with a annual capacity of 400,000 tonnes hot rolled slab by the Qinghai Jinyi New Aluminum Products Co., Ltd., the 2,350mm four-stand hot rolling mill with a capacity of 400,000 tonnes by the Nanshan Group, and the four-stand hot rolling mill with a annual capacity of 400,000 tonnes by the Asia Aluminum Holding Ltd.

In addition China has 13 twin coiler single stand hot reversing mills operating or under construction, of which total capacity is 800,000 tonnes hot rolled slab by 2007, of which 400,000 tonnes will be available within this year.

So the total capacity of hot rolled aluminium plate slab would reach 4 million tonnes in 2007, while that of continuous rolled plate slab would be only 2.4 million tonnes, which indicates that around 62.5% of the capacity will be contributed by hot rolling mills, according to the China Nonferrous Metals Industry Association.

Facility Overview

Southwest Aluminum Plate and Strip's four-stand hot rolling mill: The mill can roll all kinds of deformed aluminium alloy products. The slab widths range from 800mm to 1,800mm. The largest thickness of slab is 520mm and would reach 610mm in the long run.

The mill is designed by VAI Industries Ltd. in the U.K., which won the bid in which SMS-Demag also took part. The electric appliance and controlling system is provided by TOSHIBA-GE.

It launched production on June 28 and is projected to produce 650,000 tonnes slab in the rest of this year.

Wanji's twin coiler single stand hot reversing mill: The 2,400 mm equipment is the largest of its kind in China with a capacity of 150,000 tonnes hot rolled slab with thickness range from 3.5mm to 8mm per annum. It is designed by a domestic nonferrous metal technology institute, of which key parts including electric control, hydraulic pressure components, thickness measuring and slab shape controlling elements are purchased from overseas. Wanji is a joint venture of the China Nonferrous Metals Processing Technology Co., Ltd. and the Luoyang Xin'an Power (Group) Co., Ltd.

Longquan Aluminum's 1-stand hot rolling mill: The line is able to produce 200,000 tonnes hot rolled slab per annum. The thickness range is from 3.5mm to 8mm and the roll width is 2,600mm. It is due for test running by the end of this year. It is designed by the Luoyang Nonferrous Metals Processing Design Institute. Main parts of the line are China made. However, key parts are also from overseas. Longquan Aluminum is a subsidiary of the Yichuan Power in Henan Province.

© InterFax-China 2005. For more intelligence on Chinese metals and mining, or call Alison Crawford in London on +44 (0) 20 7256 3919.

INTERVIEW: RusAl sees mkt share in N America up to 14% in 2008

PRIME-TASS (subscription), Russia July 5, 2005

Interview with Peter Finnimore, RusAl's deputy general director for marketing and sales

MOSCOW, July 5 (Prime-Tass) -- Russia’s largest aluminum producer RusAl plans to increase its market share in North America to 14% in 2008 from 9.6% in 2004 and in Europe to 11% from 8.6%, Peter Finnimore, RusAl's deputy general director for marketing and sales said in an interview with Prime-Tass Tuesday. He did not provide any absolute figures.

"We have rather strong positions in all the countries where our clients operate, and we are constantly trying to improve our positions. We study the need of our clients in the amounts and the kinds of products and try to have a flexible market policy. Besides, the company plans to grow considerably," he said.

Below is a breakdown of RusAl's market share in the key markets as provided by Finnimore:

http://www.prime-tass.com/news/show.asp?topicid65&id379291

Coeur d'Alene Mines Corporation Announces Appointment of W. Scott Lamb as Vice President of Investor Relations

Canada NewsWire (press release), Canada July 6, 2005

COEUR D'ALENE, Idaho, July 6 /CNW/ -- Coeur d'Alene Mines Corporation (NYSE: CDE, TSX: CDM), the world's largest primary silver producer and a growing gold producer, today announced the appointment of W. Scott Lamb as Vice President of Investor Relations, effective August 1, 2005.

Lamb was most recently Vice President of Investor Relations and Corporate Communications at Kaiser Aluminum & Chemical Corporation. Prior to joining that organization in 1992, he held positions in financial, corporate, and marketing communications with Boise Cascade Corporation and Datapoint Corporation.

Dennis E. Wheeler, Chairman, President and CEO stated, "Scott is a great addition to our professional team. His extensive investor relations experience will be particularly valuable as the Company continues to build on its dominant silver position and create value for its shareholders."

Lamb is a member of the National Investor Relations Institute (NIRI) and completed the NIRI Investor Relations program at the University of Michigan. He holds an MA from the University of Houston and a BA from Weber State University. He is also a member of the National Advisory Council at Weber State University.

Coeur d'Alene Mines Corporation is the world's largest primary silver producer, as well as a significant, low-cost producer of gold. The Company has mining interests in Nevada, Idaho, Alaska, Argentina, Chile, Bolivia and Australia

Alcoa forecasts 2006-2007 alumina, aluminum deficit - Regional

BNamericas.com Friday, July 8, 2005 12:26 (GMT -0400)

The alumina and aluminum markets will remain in deficit during 2006 and 2007, Alcoa CEO Alain Belda told a conference call to announce the company's second quarter 2005 results.

The elimination of the 8% tax rebate on Chinese aluminum exports could lead to the closure of a several aluminum plants in the Asian country and would have a knock-on effect on production, Belda said.

China abolished the tax rebate at the beginning of this year after reducing it to 8% from 15% at the beginning of 2004.

IMPACT ON ALCOA

Alcoa, which operates in Latin American and the Caribbean, expects lower realized alumina prices in the coming quarter, according to company CFO Richard Kelson.

"Based on the fact that alumina prices lag metal prices, we expect lower realized prices in this segment in the third quarter," he said.

Meanwhile, Alcoa's after-tax operating income (ATOI) for its alumina sector rose 13% to a record US$182mn second quarter 2005 compared to the first quarter of the year, Kelson added.

This represents a 14% increase on 2Q04. Overall alumina production during the quarter rose 1.5% to 3.6Mt compared to 1Q05.

ATOI for Alcoa's primary metals sector fell 17% to US$187mn compared to 1Q05 and 19% compared to 2Q04.

"[This was] largely due to lower metal prices and higher energy costs," Kelson said.

Primary metal production rose 5.6% to 899,000t compared to 1Q05 as a number of restarts were completed in North America.

Meanwhile, ATOI in Alcoa's flat rolled products sector fell 6.6% to US$70mn compared to 1Q05, a 19% increase compared to 2Q04.

Alcoa has primary aluminum, fabricated aluminum and packaging operations in Brazil plus a bauxite mine in Jamaica. In addition the company is active in Argentina, Colombia, Peru, Uruguay and Venezuela.

Aiden Corkery BNamericas.com

Second-half outlook on aluminum turns austere

The Standard, Hong Kong - July 8, 2005

Aluminum, which posted the second- biggest decline on the London Metal Exchange in the first half, may extend losses this year as China increases supplies.

Aluminum for immediate delivery will probably average US$1,792 (HK$13,977) per tonne in the second half of the year, compared with US$1,845 in the first six months, according to analysts.

''A combination of lack of demand and high inventories of the metal has weighed on aluminum,'' said Amos Fletcher, an analyst at Morgan Stanley in London. The metal is the ''least attractive'' of all metals, including steel, he said.

World aluminum supply will rise 5percent to 31.2 million tonnes this year, according to Societe Generale, one of the 11 ``ring dealers'' that trade on the London Metal Exchange. China overtook the United States last year as the world's biggest producer.

Aluminum output in China rose almost 15 percent in the first five months to 2.8 million tonnes. Exports of the metal jumped 31 percent to 642,179 tonnes, more than double the nation's imports in the same period, according to mainland government data.

Prices of aluminum, a lightweight metal used in aircraft and car parts, defied forecasts by companies such as Standard Bank London and Macquarie Bank, which said the metal would perform better than copper this year.

In the first half, aluminum for delivery in three months fell 12 percent while copper rose 5.4 percent, posting the largest gain among all LME-traded metals. Aluminum's losses were exceeded only by lead, which has trading volume about a tenth of aluminum on the LME.

``The Chinese exports have largely constrained the upward price trend in aluminum,'' said Richard Evans, executive vice-president of aluminum maker Alcan, last month.

The mainland has exported more aluminum than it has imported since 2003 due to rising production at home. Aluminum Corp of China plans to double its production capacity to 1.5 million tonnes by the end of this year and increase it to as much as 3 million tonnes in the next several years.

Global aluminum inventories, excluding China, climbed to a four-year high of 1.87 million tonnes in May, led by increases in Asia and Latin America, according to the International Aluminium Institute. The London-based group does not collect data in China.

Falling metal prices have contributed to a drop in shares for producers such as Montreal-based Alcan and Alcoa.

Alcoa has dropped 17 percent this year, while Alcan has fallen 30 percent. An economic slowdown in the US and Europe has also weighed on aluminum prices, Fletcher said.

The Organization for Economic Cooperation and Development cut its estimate for global growth this year May 24, citing fuel costs and a worsening outlook for Europe.

The Paris-based OECD expects expansion of 2.6 percent this year from 3.4 percent last year in its 30 countries, including the US and most European Union members.

Orders of aluminum products in North America fell 13.7 percent in May and 10.8 percent on month, Standard Bank London said, citing data from the Aluminum Association. Global aluminum demand growth this year is likely to slow to 5.8 percent this year, compared with a growth of 9.5 percent last year, Standard Bank said in the latest monthly report released July 1.

Pittsburgh-based Alcoa said June 14 it will cut 6,500 jobs and close plants because of price declines and rising energy costs. Alcan said June 30 it was considering reducing operations at two mills in France.

Alcan said June 14 that it would fire about 410 workers at plants in Switzerland and Germany. It said as many as three of its nine European smelters are ``endangered'' by rising energy costs.

Aluminum for delivery in three months on the LME reached a 10-year high of US$2,016 in March. In London morning trade Thursday, the contract was at US$1,710, taking its average for this year to US$1,837.7.

Aluminum for delivery in three months will probably not fall below US$1,700 a tonne this year as record-high power prices in regions such as Europe slow production growth, according to Ingrid Sternby, an analyst at Barclays Capital in London.

Among all LME-traded metals, aluminum uses the most energy, with power accounting for about one-third of production costs. Norsk Hydro plans to shut two smelters in Europe, cutting capacity by 10 percent.

Alcoa Studies $30 Million Investment

RedNova.com, TX 9-Jul-2005

Alcoa Warrick Operations could be making a $30 million investment in its power plant within the next few years.

Company officials sought and received a 10-year tax phase-in on the project from the Warrick County Council on Thursday.

The new equipment would generate an additional 29 full-time jobs over five years and allow the company to maintain another 122 employees, according to Alcoa's tax abatement application.

Alcoa operates an integrated power plant, smelting operation and aluminum rolling facility near the Ohio River at Yankeetown, employing a total of 2,150 people there.

The company powers its operation with its own power plant, which includes three generating units owned by Alcoa and another owned in partnership with the utility company Vectren.

Final approval of the investment is pending a decision by Alcoa's board of directors, slated for next week, said Sally Rideout Lambert, Warrick Operations spokeswoman.

Power Plant Manager Peter DeQuattro told the council that approval of the abatement may help convince the board to make the investment.

The investment would include modifying the power plant boilers so that they will be able to burn a wider variety of coal, as well as enhancing the coal receiving and handling infrastructure to make it possible to receive more coal by river, as well as other "significant" plant modifications.

DeQuattro said the changes would be considered the kind of major modifications that would trigger the new source review provisions of the federal Clean Air Act, which would require Alcoa to install pollution controls.

Lambert said Alcoa Warrick Operations was originally conceived as a mine mouth facility, meaning that it would draw most of its coal fuel from a mine near the plant -- in this case, the now closed Squaw Creek mine west of Boonville.

The modifications will allow Alcoa to burn a broader variety of coal from a wider range of sources, allowing the facility to remain competitive.

Permanent allies or permanent interests?

Trinidad & Tobago Express, Trinidad and Tobago Sunday, July 10th 2005

Selwyn Ryan

A political wag once said that a nation state does not have permanent friends, only permanent interests. One is struck by the apparent validity of this aphorism as one observes the behaviour of Trinidad and Tobago and Venezuela in respect of the controversy over the PetroCaribe accord which Trinidad and Tobago refused to sign on the ground that it was not in Trinidad's economic interest to do so, the diplomatic friendship between Patrick Manning and Hugo Chavez, notwithstanding.

Manning's basic position is that Trinidad and Tobago is an oil producing and oil exporting country which markets some 50,000 to 60,000 barrels daily of what Petrotrin produces in the Caribbean. Manning understands that Trinidad's partners in Caricom are under severe economic pressure because of galloping oil prices, and that they would find Venezuela's offer of a US$50m soft-loan facility to finance projects as well as a subsidy on oil imports to be very much in their interest. But there are short run gains and long run gains, and also a Caricom interest that has to be accommodated.

The offer being made by Chavez threatens Petrotrin's market share in the region, and Manning was obliged to remind his Caricom colleagues that Trinidad and Tobago had committed itself to making close to TT$1b available to Caribbean countries annually to subsidise their oil imports, and that it had in other ways made funds and facilities available to countries such as Guyana to meet their debt obligations and other needs arising out of environmental disasters. Were his Caricom colleagues not playing "doggy and bone" politics?

Manning's complaints about the seeming ungratefulness of some Caribbean countries remind me very much of the position Eric Williams took 30 years ago when he addressed the 1975 Annual Convention of the People's National movement (PNM) on the theme "Threats Facing the Caribbean". Williams was angry with the behaviour of Jamaica, Guyana, and the Eastern Caribbean states who made deals with the Venezuelans, notwithstanding the fact that he had bailed them out following the energy crisis of 1973 which drove up the price of oil. Williams had not only made some US$150m available to Jamaica, Barbados and Guyana for direct balance of payments support, but had also put a facility in place to help them meet their energy bills. Trinidad had also made major contributions to the Caribbean Aid council, the CARICOM Multilateral Clearing Facility, and had in other ways helped to sustain the Commonwealth Caribbean countries in their hour of fiscal need.

Williams had likewise negotiated agreements with Guyana and Jamaica to establish an aluminum smelter in Trinidad that would use Trinidad's energy (gas), and bauxite from Guyana and Jamaica to give effect to the long held ambition to integrate the productive resources of the Caribbean. Williams' complaint was that the more he gave or loaned to Caricom countries, the less they bought from Trinidad and Tobago. In doing so, they were not keeping the side of the bargain. History seems to be repeating itself.

Williams regarded Caldera's various offers to the anglophone Caribbean, some of which resemble that now being offered by Chavez as an attempt to use oil to open Caribbean political and diplomatic doors. He saw Venezuela's various initiatives as a reassertion of Venezuela's long held imperial ambitions. In Williams view, Venezuela was not a Caribbean country. It had no experience of slavery, and thus had a cultural identity that was different from that of Caribbean countries. Its aim was to transform the Caribbean Sea into the "Sea of Venezuela." As he told the convention, "Venezuela's Caribbean vision and ambitions, starting off with a network of economic arrangements out of which is emerging a Venezuelan oil and industrial metropolis and an indebted Caribbean hinterland, the Caribbean as we know it (will be) integrated into Venezuela, the naval power of the future, the oil power of the present, the tourist mecca in the making, its position in its Venezuelan Sea fortified by its 200-mile exclusive economic zone, all to the plaudits of the Caribbean peoples themselves, with Trinidad and Tobago the odd man out. You will understand now why I am pilloried at home and abroad, prodded by Commonwealth colleagues outside of the Caribbean as to why we don't like Venezuela, pestered by Caricom colleagues who want to know what I have against Venezuela, falling one over the other to announce that there is no recolonisation of the Caribbean and attacking me for claiming that there is. What am I supposed to do or say, friends?" How familiar?

Williams would have nothing to do with the Venezuelan initiative and impugned the "Brutus" like behaviour of his Caricom colleagues, Michael Manley in particular, who negotiated a competing Bauxite smelter deal with Venezuela and Mexico behind his back. One does not know who is who, he complained. "Nowadays, so many people want to join the Caribbean! One day we are making love to the señoritas while another day, we are going to make love to-I don't know who is coming to hug us up!

In the wake of this perceived deceit, Williams virtually washed his hands of the Caribbean. Will Manning follow in his footsteps? Hardly, since Trinidad has good economic and political reasons for helping its Caribbean neighbours. It is not pure charity. But he may feel the need to exercise greater care when he commits Trinidad's resources to the rest of the Caribbean on the assumption that "all ah we is one." As we said in the beginning, nation states have interests not friends.

Russian Economics Minister Heralds Development Plan for Siberian Region

RedNova.com, TX 9-jul-2005

Text of report by Russian news agency Interfax

Krasnoyarsk, 9 July: A joint working group made up of representatives of the [federal] government, the Krasnoyarsk Territory administration and interested companies will prepare a comprehensive development plan for the Angara region by 15 November, Economic Development and Trade Minister German Gref said today. He was speaking to the press after a conference in Kodinsk, Krasnoyarsk Territory, on completing the Boguchanskaya hydroelectric station.

"The amount of investment needed for all the projects is 4bn- 4.5bn dollars according to the most conservative estimates," he stressed.

This means not only finishing the Boguchanskaya hydroelectric station (anticipated cost - 1.2bn-1.4bn dollars) but also building a new aluminium mill (1.2bn dollars) and laying a 200-km railway line from Karabula to Kodinsk (500m dollars), and possibly the construction of a cellulose and paper works, Gref remarked.

He also pointed to the need to develop extraction of minerals in the lower Angara region, including gold, manganese and lead.

"Clearly, this project can only be implemented as a whole, to multiply the benefit for the economy and the budget," he added. "Most of it could be complete by the year 2012."

The project would be "a typical partnership between the state and the private sector", Gref said. The state would invest in the infrastructure and private investors would put money into the private projects. "This is a typical example of the kind of project that resources from the investment fund could be used for," Gref said.

[Unified Energy System (UES), and the Rusal, or Russian Aluminium, company will finish building the Boguchanskaya hydroelectric station as equal partners, and will also construct a new aluminium mill in the Angara region, UES board member Vyacheslav Sinyugin said in an ITAR-TASS report at 1009 gmt. He had been at the same conference as Gref. The two companies will set up a subsidiary that will own and run the power station and the mill, he said.]

Source: BBC Monitoring Former Soviet Union

Siberian aluminum smelter to produce 500,000 tons a year

RIA Novosti, Russia 11-Jul-2005

MOSCOW, July 11 (RIA Novosti) - A new aluminum smelter in Siberia will produce 500,000-600,000 metric tons of aluminum a year, the project's joint managers said in a news release Monday.

On June 29, Energy giant RAO Unified Energy Systems of Russia (70% of the country's electricity production) and the world's no. 3 primary aluminum producer, Rusal, signed a memorandum of intent on a project to build the new aluminum smelter and complete the construction of the Boguchanskaya hydropower plant (HPP) in the Lower Angara area of the Krasnoyarsk Territory, Western Siberia.

The memorandum provides for equal funding and management of the project, which is expected to take five to seven years to complete. With a capacity of 3,000 megawatts, the smelter will become the HPP's key consumer.

"The total cost of the project is preliminarily estimated at about $3 billion," the news release says.

Experts from Rusal and HydroOGK, a 100% subsidiary of RAO UES that controls hydropower stations with a total capacity of 22,650 megawatts, will elaborate the project's economic basis in the next four months and prepare the relevant documentation by November 1, 2005.

The Boguchanskaya HPP, work on which was begun in 1980 but halted twelve years later due to a lack of financing, is the largest hydro-technical project in Russia and one of the biggest in the world. The commissioning of the Boguchanskaya HPP, which is currently 55% ready, and the construction of the aluminum smelter will boost the economic development of the Lower Angara area, which contains vast natural resources of oil, gas, gold (about 10% of Russia's total proven resources), timber, and large deposits of niobium, zinc, lead, bauxite and magnesium carbonate.

Chinese exports depress aluminum's price

Purchasing.com, MA July 11, 2005

High exports of aluminum from China are weighing on world prices of the metal, with the government's efforts to curb production ineffective, according to an e-mailed report from analysts Goldman Sachs JB Were. As a result, the Sydney-based stockbroker has reduced its 2005 world average aluminum price forecast to 82˘/lb from 84˘ and lowered next year's price forecast to 84˘ from 87˘ predicted earlier. The metal cost an average 78˘/lb in 2004.

The main reason for Goldman's price downgrades is that China's exports of aluminum continue to exceed expectations despite the Chinese government's efforts to slow the growth in domestic smelter capacity and to bring production back into equilibrium with domestic demand. In October, China imposed curbs on tolling of alumina—processing the raw material feed required to smelt aluminum—but a grace period was extended to Chinese smelters. More recently, the number of licensed importers of alumina in China has gone up. "At this stage the future of tolling in China remains very unclear to us and even if tolling is abolished, it is by no means certain what the overall impact on metal production and exports will be," notes the Goldman report.

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

Steelworkers Embark on Weeklong New York Protest Tour

Business Wire (press release), CA 11 Jul,2005

Spotlights Unfair Treatment by Ormet, MatlinPatterson

ST. CLAIRSVILLE, Ohio--(BUSINESS WIRE)--July 11, 2005--News from the United Steelworkers: The United Steelworkers (USW) today said that the Union has sent a delegation of members from Locals 5724 and 5760 who today will begin a week of actions in and around New York City to raise public awareness about their unfair labor practice strike at two Ormet Aluminum plants in Hannibal, Ohio.

Having recently completed a Chapter 11 Bankruptcy Reorganization, Ormet's operations remain under the control of New York's MatlinPatterson Global Advisors, who received a majority ownership of Ormet stock in a debt for equity swap that was part of the reorganization.

"When our families are attacked, there is no comfortable distance for those responsible to hide and try to conduct business as usual," said USW District 1 Director David McCall. "We'll follow MatlinPatterson's principals wherever they go and spread the word about MatlinPatterson's treatment of Ormet employees."

Union members have already made several sojourns to New York for informational demonstrations that featured giant rats at MatlinPatterson's Madison Avenue corporate headquarters which were followed by side trips to the neighborhoods of the firm's co-founders, David Matlin, who lives in an apartment in Manhattan and Mark Patterson, who owns a home in nearby Bronxville, NY.

"We are committed to justice and dignity for our members," McCall said, "and we will continue our fight until MatlinPatterson and Ormet get the message that we will not back down or go away."

USW members in Ohio and Canada have also distributed leaflets to race fans during Formula One races, where Patterson has raced as part of the Star Mazda Pro Series summer tour.

In addition, the USW has initiated dialogs with four separate pension funds that have invested in MatlinPatterson and is coordinating solidarity actions with USW-represented employees of Huntsman Chemical, which is also owned by MatlinPatterson.

RUSAL Creates Construction Division

Russia Newswire, Russia 11 Jul, 2005

In brief

MOSCOW (RNWire) - RUSAL has set up a new Division for Construction to be headed by Valery Matvienko. Replacing Matvienko in his role as the Director of the Aluminum Division will be Viktor Zhirnakov, previously the Managing Director of the Novokuznetsk Aluminum Smelter.

In full

MOSCOW (RNWire) - RUSAL has set up a new Division for Construction to be headed by Valery Matvienko. Replacing Matvienko in his role as the Director of the Aluminum Division will be Viktor Zhirnakov, previously the Managing Director of the Novokuznetsk Aluminum Smelter.

The Division’s top priority will be to devise a proprietary construction management approach, helping the company launch new production units in a more expeditious manner. The Construction Division will develop, manage and implement RUSAL’s construction projects, becoming a key contributor to the company’s aluminum, alumina and power supply greenfield initiatives both in Russia and internationally.

"We have laid out a clear set of strategic goals, as well as a solid mix of greenfield and modernization projects to meet them. The next step is to create a structure capable of jump-starting these efforts: constructing new plants and expanding existing production units. We have entrusted this task to the Construction Division headed by Valery Matvienko, one of the most experienced professionals in the company who has made our Aluminum Division a success it is today," said Alexander Bulygin, RUSAL Chief Executive Officer.

With a $1 billion annual budget, the Construction Division will focus on the new aluminum smelters in Russia and the CIS, the Rogunskaya and Boguchanskaya hydropower stations and bauxite and an alumina complex in Komi.

The Construction Division will become the sixth in the organizational structure of RUSAL, which includes Aluminum, Alumina, Packaging, Cans and Extruded Products Divisions.

Biographies

Valery Matvienko, 50, was named RUSAL Director for Aluminum Division in 2004. Over a period of 20 years, he advanced through a number of positions with increasing responsibilities, including RUSAL Deputy CEO for Production (2002-2004), General Manager of the Novokuznetsk Aluminum Smelter (2001-2002), First Deputy CEO and Executive Director of the Bratsk Smelter (2000-2001), and, General Manager of the Krasnoyarsk Smelter (1998-2000). Before joining the Krasnoyarsk Smelter, Matvienko worked at the Yermakov Ferroalloys Smelter in Kazakhstan. He is a graduate of the Siberian Metallurgical Institute.

Viktor Zhirnakov, 55, was appointed Novokuznetsk Aluminum Smelter Managing Director in 2003, having started his career at the same smelter as an electrolysis workshop employee 29 years prior. A Siberian Metallurgical Institute graduate, Zhirnakov is the Cavalier of the Red Banner of Labor Order. He went through advanced training at the University of California and completed an internship at Vereinigte Aluminium Werke in Germany, as well as a number of other companies in Canada and Hungary.

Ghana, Jamaica to boost ties

News24, South Africa 11/07/2005 09:02 - (SA)

Kingston - Ghanaian President John Kufuor will visit Jamaica on Monday for a three-day visit aimed at boosting ties between the West African and Caribbean nations, Jamaica's state-run news agency said.

Kufuor, re-elected to a second term in December, is scheduled to hold talks with Jamaican Prime Minister PJ Patterson after arriving in the capital of Kingston, the Jamaica information service said in a news release on Sunday.

Kufuor's working visit will also include a tour of a bauxite plant in the southern town of Halse Hall. Jamaica produces about 16.8 tons of bauxite, the principal ore in aluminum, each year.

The Jamaica Gleaner newspaper reported on Sunday that Ghana, the world's no 2 cocoa producer and leading gold producer, is interested in investing in Jamaica's bauxite sector, the island's third largest earner of foreign currency after tourism and remittances.

Later, Kufuor will lay a wreath at the shrine of Jamaican-born black nationalist Marcus Garvey in the capital's National Heroes Park. He's also to meet with the island's governor general, Sir Howard Cooke, and opposition leader, Bruce Golding.

Kufuor also plans to meet with members of the Ghanaian community in Jamaica and tour Kingston's University of Technology before leaving later on Wednesday.

RUSAL and RAO UES Sign Memorandum of Understanding to Construct Boguchanskaya Hydropower Station and Aluminum Smelter

Russia Newswire, Russia - Jul 10, 2005

MOSCOW (RNWire) - RAO Unified Energy Systems of Russia and RUSAL have today announced the signing of a memorandum of understanding to jointly complete Boguchanskaya hydropower station and construct a new aluminum smelter, which will become the hydropower station’s key consumer.

In accordance with the memorandum of understanding (MOU), OAO HydroOGK and RUSAL will consider the project’s economic efficiency and study respective legal aspects. As part of this undertaking, the joint taskforce will prepare a pre-feasibility study of the two project components.

The signatories to the MOU will set up a joint company to manage the project. Its Board of Directors will include an equal number of representatives from HydroOGK and RUSAL.

The MOU provides for an equal funding and management of the project, which is expected to take five to seven years to complete. Boguchanskaya Hydropower Station’s (HPP) capacity will reach 3,000 mW, with the annual output of 17.6 billion kW per hour. The aluminum smelter with an estimated capacity of 500,000-600,000 tonnes per year will be built in the Krasnoyarsk Region. The total cost of the project is preliminarily estimated at about $3 billion.

The MOU signing was announced July 9, 2005 at a meeting on the progress of the Boguchanskaya HPP completion, led by the Russian Federation Minister for Economic Development and Trade, German Gref. The meeting participants included Krasnoyarsk Region Governor Alexander Khloponin, RUSAL Board of Directors Chairman Oleg Deripaska and OAO HydroOGK Board Chairman Vyacheslav Sinyugin. The results of the meeting will serve as basis for a task list to a number of Ministries and state agencies, as well as regional authorities to prepare an integrated economic development plan for Russia’s Lower Angara area (Krasnoyarsk Region).

The commissioning of the Boguchanskaya HPP and the construction of the aluminum smelter will boost the economic development of the Lower Angara, which holds vast natural resources of oil, gas, gold (about 10% of Russia’s total proven resources), timber, and large deposits of niobium, zinc, lead, bauxite and magnesium carbonate. These resources are currently inaccessible due to low energy supply and a lack of essential infrastructure. Once operational, the HPP will help solve the problem of the possible undersupply of electric power in Siberia.

President Kufuor Off To Jamaica

GhanaWeb, Ghana - Jul 10, 2005

President John Agyekum Kufuor is expected to leave Britain for Jamaica, today, on a two day trip.

Kufuor is expected to agree on a deal, which would lead to cooperation agreement between the newly restarted VALCO smelter and ALCOA Aluminum’s bauxite subsidiary in that country.

The President’s visit is in line with efforts aimed at pushing for an accelerated programme to reinvigorate the aluminium smelting industry in the country and to establish an integrated industry.

BPA offers deal to aluminum plants

The Missoulian, MT - Jul 10, 2005

By MICHAEL JAMISON of the Missoulian

COLUMBIA FALLS - The region's largest supplier of cheap hydropower is offering a cut-rate deal to big aluminum producers, but the industry remains unsure whether it will be enough to keep them operating.

"This is really challenging," said Haley Beaudry, external affairs manager for Columbia Falls Aluminum Co. "I think it's the very best they could do - but the possibility that we might have to close, that possibility exists all the time. That never goes away."

For decades, the Bonneville Power Administration has sold cheap electricity in bulk to big industrial users, also known as "direct service industries." The DSIs, in fact, have become heavily reliant upon Bonneville, a quasi-governmental outfit that markets the power generated at federal hydroelectric dams in the Columbia River Basin.

In recent years, however, demand for electricity has increased along with the region's population, leaving less juice available for the big DSIs.

With current contracts set to expire in fall 2006, industrial operators had been anxiously awaiting word on how much they could count on from BPA.

On June 30, BPA announced it would set aside $59 million, the equivalent of about 570 megawatts, to be shared primarily among the region's four remaining aluminum plants. Aluminum smelters are notoriously power-hungry, as electricity is the catalyst for turning alumina powder into aluminum. At one time, when operating at full capacity, CFAC consumed about a quarter of all the electricity used in Montana.

That percentage has shrunk, however, with market pressures forcing the company to cut back in recent years. Currently, the company is operating at just

20 percent, with one of five "potlines" active.

Under the Bonneville Power proposal, CFAC would receive a cash allocation equivalent to about 140 megawatts, to be used for buying power on the open market. Divide that into the total $59 million, and then divide that by the 8,760 hours in a year, and it comes to about $12 per megawatt-hour.

"They would give CFAC the money," Beaudry said, "then CFAC would use it to buy power on the market."

Problem is, the current market price is about $50 per megawatt hour, and the futures market predicts prices of $57 per megawatt hour by next year.

That means even with the $12-per-megawatt hour stipend, CFAC management is still looking at power in the $40 range.

"We can't operate at that price," Beaudry said. "Oh no. No. Not even close."

There is, however, a silver lining.

BPA has set aside cash enough for 140 megawatts at CFAC. But it takes just half that - 70 megawatts - to run a potline.

According to Bonneville's Mike Hansen, CFAC could take the money received for 140 megawatts, but purchase only 70. That would essentially give the company twice the $12 stipend - or $24 per megawatt hour - buying down the market cost to a price closer to the magic $30 mark Beaudry says is needed.

"That's a real option we're looking at," Beaudry said.

There are, however, some caveats.

Bonneville Power will not allow CFAC and other direct service industries to buy down the cost of market power to a price below Bonneville's "prime rate," which currently is set at slightly more than $30 per megawatt.

And it's a use-it-or-lose-it deal. If a company does not use its entire cash allocation during a given year, then it will be offered up to the other DSIs the following year.

And if CFAC wants to buy less than 140 megawatts with the money BPA provides, it can do so only so long as the discount does not exceed $24 per megawatt hour. That means CFAC would have to purchase at least 70 megawatts, or enough to maintain the single potline currently operating.

"This is as good as it gets," BPA's Hansen said.

And even that didn't come easy.

"This was a very difficult decision," said BPA top boss Steve Wright. "There is not enough low-cost federal system power to satisfy all interests, and we have worked hard to appropriately balance regional interests."

Too much help for industry, he said, and other ratepayers would feel the pinch.

"On the one hand," Wright said, "low-cost federal power keeps important jobs in the region and helps support the economy of many Northwest communities. On the other hand, we have a responsibility to the rest of the region's ratepayers not to inappropriately shift costs to them."

The DSI companies have no legal right to cheap power, he said, but they are long-standing BPA customers and are major contributors to the regional economy, which makes the subsidy important.

The writing, however, may be on the wall for the BPA-DSI relationship. Prior to 1995, the five-year BPA contracts set aside more than 3,000 megawatts for the big users. Then, in that year, contracts were reduced to 2,000 megawatts. In 2002, they were cut to 1,500. The latest promise of cash equivalent to 577 megawatts is a low point for direct service industries.

If the DSIs lay claim to the full $59 million pot, Wright said, general utility customers would see an increase of about $1 per megawatt-hour - negligible, really, for the region's homeowners.

"We believe the agency is striking a balance between the need to keep our costs as low as possible and the chance to support jobs," Wright said, "through limited benefits to the DSIs that may make it possible for them to continue to operate."

Just how possible remains to be seen.

According to Beaudry, CFAC can likely keep its one potline open with power that approaches the $30 mark. But the cost of raw materials and the price of aluminum also must be factored in, and for now his crystal ball's as murky as the next.

"The whole package needs to make good business sense," Beaudry said. "As to our long-term health, well, there's no answer to that yet."

Beaudry would like to see an additional potline or two come online, but BPA's latest proposal, he said, is not sufficient for adding any capacity at CFAC.

"At best," Beaudry said, "we could keep the one potline up and running."

Which, although not great news, is good enough for the 150 men and women that potline employs.

The next step is for BPA and the individual DSIs to negotiate five-year contracts based on the current offer, and then to put the deal out for public review. If all goes smoothly, Hansen said, contracts could be signed by early 2006.

"This is not a guarantee that they will be able to operate," Wright said of the aluminum producers, "but it is an opportunity."

Alba Line 5 opens September

AME Info, United Arab Emirates - Jul 9, 2005

Bahrain: Sunday, July 10 - 2005 at 10:19

Bahrain-based aluminum producer Alba has announced it will open its $1.7bn Line 5 expansion project in September. The expansion increases Alba's production capacity by 60% to 830,000 metric tonnes. The project took two years to complete.

Australian aluminium becomes more costly

NEWS.com.au, Australia - Jul 10, 2005

By Rebecca Keenan

The Australian aluminium industry is becoming less cost competitive as new countries enter the market with cheaper smelters, according to recent research.

AME Mineral Economics said Australia has fallen from being in the top ten in terms of cost competitiveness in 2000 to around fifteenth from a total of 37 countries active in the aluminium market.

An appreciating Australian dollar is also impacting on the cost of producing aluminium in Australia as are rising electricity prices.

Australia is not the only country battling with power pricing with many smelters already forced to close, or reassess expansion plans, in Western Europe and North America.

Most new capacity has been built in developing countries with immature electricity markets such as Mozambique and Brazil and the trend will continue, AME predicted.

The cost of producing aluminium has also been pushed higher by the price of alumina, which has risen in price along with most other commodities.

"The industry to be in is alumina, which is the feedstock of aluminium," said AME's aluminium industry analyst Rob Bishop.

"There has been a massive supply shortage which has driven up the price and the spot market has gone up three fold whereas the price of aluminium has only gone up 35 per cent."

The global market for aluminium is set to grow by an annual 4.8 per cent a year over the next five years to 39 million tonnes by 2009 with China accounting for more than a quarter of the growth.

Australia's production is set to outstrip that rate, forecast to increase by eight per cent over the next four years.

Alba now largest in the world

Gulf Daily News, Bahrain - Jul 9, 2005

MANAMA: Alba's $1.7 billion (BD642.6 million) Line 5 expansion project, which makes it the largest modern smelter in the world, will be officially opened by Prime Minister Shaikh Khalifa bin Salman Al Khalifa in September.

The expansion project increases Alba's annual production capacity by 60 per cent and involved the construction of a new aluminium reduction line, power station, carbon plant, cast house and other industrial facilities, said Alba chairman Dr Mohammed Al Ghatam.

Dr Al Ghatam said the new reduction line was the longest line of its kind in the world and took Alba's annual production capacity to more than 830,000 metric tonnes.

The inauguration ceremony, which will be attended by dignitaries from across the world, concludes a two-year project that earned Bahrain international praise for its industrial excellence, he said.

The project, which set new international safety standards, was the largest expansion project Bahrain had ever undertaken and its success put the country among the world's industrial elite, said Dr Al Ghatam.

A Russian business revolution

The Observer, UK - Jul 9, 2005

Aluminium giant Rusal is being saved from Soviet slackness, writes Simon Caulkin

Sunday July 10, 2005 The Observer

As management challenges go, they don't come much tougher.

Here's a firm at the centre of an industry that is one of the toughest in the world. As if that wasn't enough, domestically it has come to symbolise gangster capitalism. The company itself is an amalgam of two erstwhile rivals that have been bought and sold on several times in the last few years, each time stripped of a little more of any saleable assets that remained.

In a capital-intensive industry, its vast plants are ancient, decrepit and polluting. Manning levels are four times higher than the industry best, nine times in the case of managers. The 65,000 or so employees (no one knows the exact number) are not just demoralised and cynical - 15 per cent are actively mutinous, bent on theft and sabotage. Oh yes, and your language doesn't have a word for 'performance'.

Welcome to Rusal, Russia's largest aluminium producer.

That was the situation that greeted the new management team when the company, the third largest aluminium firm in the world, was formed in 2000 from a merger brokered by two of Russia's billionaire 'oligarchs', Roman Abramovich, of Chelsea Football Club fame, and the only slightly less rich, although not so well known, Oleg Deripaska, 36, the current chairman and 75 per cent owner.

In the Soviet era, the company's four giant smelters (including the two biggest in the world) had been 'township-forming' enterprises - all-embracing company towns set up near energy sources in the middle of Siberia, to which inhabitants and their families had to be imported. Now they found themselves bearing their onerous Soviet heritage in a post-Soviet environment, bereft of the most rudimentary equipment to steer by.

'People had had no contact with the outside world,' says Victoria Petrova, 39, the firm's human resources director. 'There was everything to learn.' Could the company with its historic legacy compete in world markets? How to make profits, invest, structure; how to change the attitudes of fatalism, nepotism and reliance on others that ran through the organisation.

Confronted by a situation of such direness, the young management team responded by drawing up a strategy that went boldly to the opposite extreme. By 2013, they decreed, Rusal would be the largest and most profitable aluminium producer in the world (as the company is private, current profit figures are not available). It would double aluminium production from 2.7 to 5 million tonnes a year, make itself a top-three producer in terms of capital efficiency, improve its environmental performance - and turn itself into a Russian employer of choice.

None of this could happen without a human capital programme, which for once, although with some irony in the circumstances, deserves to be called revolutionary. One of the first challenges, says Petrova, was to isolate a minority of the workforce bent on bringing the firm down. The angriest, she says, were a group of thirty- to forty-somethings who had completed their education and training in the Soviet era and had a lifetime's expectations laid out before them. 'Suddenly it was all taken away from them. The result was total cynicism.'

To counter their baleful influence, Rusal looked to a group of loyalists, a 'golden reserve', who (despite the history) were prepared to give the company a chance and put themselves forward as the new managers. Instead of the hoped-for 300, 700 people applied. Of those chosen, around 20 per cent a year are now coming through a specially-designed training programme and becoming managers.

It's hard to exaggerate, Petrova says, just how far attitudes needed to change. Like all large Soviet enterprises, the companies had been run in rigid top-down fashion. Managers gave orders and employees carried them out (slowly, to make the work last as long as possible). People management in the western sense was completely new. 'Everything was centrally administered, down to where people took their vacations.'

The first year of performance management, says Petrova with feeling, was 'a nightmare'. For a start there is no word in Russian for performance and no concept of discussing alternatives or taking responsibility - only orders.

The idea of bonuses according to the firm's performance caused bewilderment and consternation. Once it did sink in, however, performance appraisal turned out to be 'very interesting', according to Petrova. It unleashed a flood of discussion about how to reach the company's goals, something that had never happened before.

Because there were no preconceptions, she says, employees came up with extremely inventive and interesting ideas. By the second year, people had stopped ringing the human resources department to ask it to arrange their holidays and instead were inquiring about likely bonus levels.

A further breakthrough was the drawing up of a code of ethics. When the first version was posted for consultation, there were 18,000 suggestions and comments. The outcome is a notably clear and down-to-earth statement, one of the first among Russian companies of the post-Soviet era.

The cumulative outcome of these and other human resources initiatives - including monthly communication meetings, newsletters, Russia's first e-learning programme and awards - are now feeding through in earnest. Productivity per employee has almost doubled, from 75 tonnes in 2001 to 137 tonnes in 2004. Safety and environmental performance are improving. And having proved to itself that it possesses the resilience to survive, Rusal is now looking ahead with increasing confidence to the future.

To meet its goals, says Petrova, Rusal must modernise its colossal existing smelters, build new ones and acquire other companies. But all that depends on being able to develop and attract the right people. So the company has nailed its future to developing labour conditions that are the best in Russia, expanding career opportunities and training, and building a social package that almost rivals that of the Soviet period.

Petrova concedes that Rusal still has much to prove. You can't turn a derelict Siberian smelter into the winner of a best-kept village competition overnight. And as with all large-scale Russian enterprise, politics looms large. But provided it can steer clear of top-level controversy, the changes made on the ground give it the best possible chance of keeping its destiny where it never was in the past - in its own hands.

simon.caulkin@observer.co.uk

RUSAL reports H1 2005 results

Russia Newswire, Russia 12 Jul, 2005

MOSCOW (RNWire) — RUSAL, a top three global aluminium producer, has today announced production and financial results for the first half of 2005. In January-June 2005, the company posted a 27% growth in alloy output, completed the purchase of a 20% stake in QAL, joined the Komi Aluminium project and signed a memorandum of understanding with RAO UES to partner in an energy and metals project.

In full

MOSCOW (RNWire) — RUSAL, a top three global aluminium producer, has today announced production and financial results for the first half of 2005. In January-June 2005, the company posted a 27% growth in alloy output, completed the purchase of a 20% stake in QAL, joined the Komi Aluminium project and signed a memorandum of understanding with RAO UES to partner in an energy and metals project.

Responding to customer demand, RUSAL posted a 17.6% year-on-year growth in the output of value added products (VAPs) and produced 402,105 tonnes of VAPs including alloys, wire rod, ingots, billets and super and extreme purity aluminium. VAPs accounted for 30% of the total primary aluminium output (compared to 25.6% in H1 2004). Alloys — 68% of VAPs — grew 27% year on year and totalled 275,000 tonnes. This production increase was achieved through smelter modernization programs at Sayanogorsk and Krasnoyarsk, as well as additional long-term contracts signed in H1 2005 with customers in Germany, Japan, Italy, Turkey and other countries.

In H1 2005, RUSAL extracted 2,417,737 tonnes of bauxites and produced 1,629,600 tonnes of alumina — an 8.8% and a 5.2% year-on-year improvement respectively. RUSAL's recent acquisition of a 20% stake in the world's largest alumina producer, QAL in Australia, and an agreement on equal partnership with SUAL to jointly construct and operate a bauxite and alumina complex in the Republic of Komi will expand RUSAL's alumina base by 44% within the next three years.

The company's recently announced equal partnership agreement with RAO UES to construct Boguchanskaya hydropower station and a new 500,000-600,000-tonne aluminium smelter in Krasnoyarsk region has marked a next step in RUSAL's strategy to develop a power supply capacity. A total of about $3 billion is expected to be invested in the project. Within the next four months, the parties will finalize details of project implementation and conduct an in-depth investment assessment.

Financial Results

RUSAL's revenues grew by over 14% to $3 billion in the first half of 2005. The continued top-line progress was the result of a bigger share of VAPs in the product mix and increased aluminium prices on the London Metals Exchange in Q1 2005. International sales accounted for 76% of the revenues.

Construction, Modernization and Re-equipment Programs

A total of $120 million has been invested to date in the Khakass Aluminium Smelter construction. The plant, which is expected to produce its first aluminium in 2006 and boost RUSAL's total output by 14%, will operate using the RA-300 technology developed by the company's Engineering and Technology Centre.

RUSAL is continuing modernization programs at its aluminium smelters to raise efficiency and reduce environmental emissions. Krasnoyarsk Aluminium Smelter has commissioned its fourth dry scrubber, which will increase the capture of dust by four times and will control fluoride emissions twice as efficiently as the previously used equipment. Sayanogorsk Aluminium Smelter has begun installation of the RA-400 cells.

In the first six months of 2005, RUSAL's investment to re-equip, expand, reconstruct and modernize its plants, as well as to construct new production units exceeded $215 million.

RUSAL Corporate Structure

In a move to maximize production and management efficiency, RUSAL has set up three new divisions for Construction, Sustainability and Control. With a $1 billion annual budget, the Construction Division will become a key contributor to the company's aluminum, alumina and power supply greenfield projects, managing and implementing the construction work. Its priority projects will include new aluminium smelters in Russia and the CIS, the Rogunskaya and Boguchanskaya hydropower stations and bauxite and alumina complex in Komi.

The Sustainability Division is tasked with systematizing and enhancing RUSAL's efforts to reduce environmental impact, improve labour safety and incorporate advanced technologies in production.

The third addition to the company's structure — the Control Division — is responsible for regular internal audits of the company's progress in reaching its strategic objectives and assessing the risks associated with new projects.

Production (metric tonnes) H1 2005 H1 2004 Change y-o-y

Bauxites 2 417 737 2 222 669 8,8%

Alumina 1 629 600 1 549 555 5,2%

Primary aluminium (including value-added casthouse products) 1 346 105 1 333 204 1%

Value-added casthouse products alone 402 105 341 935 17,6%

Aluminium foil 18 746,9 18 440,5 1,7%

Aluminium cans and lids 12 899,67 11 184,83 15,3%

H1 2005 Highlights

RUSAL raised a $200 million unsecured loan to partially refinance its purchase of a 20% stake in Queensland Alumina Limited, Australia. The loan has been extended by Paris-based Natexis Banques Populaires at a low interest rate.

RUSAL has opened two representative offices in Arkhangelsk region — one in the region's capital Arkhangelsk and the second in the city of Plesetsk — to manage the development of the three deposits of the North Onega bauxite group.

RUSAL secured a €46.6 million export loan from German-based Bayerische Landesbank (BayernLB) to fund a large-scale modernization programme at RUSAL ARMENAL foil mill in Armenia.

RUSAL commissioned Lahmeyer International to conduct a banking feasibility study for the first phase of the Rogunskaya hydroelectric station construction project in Tajikistan.

New casting pit started installed at Sayanogorsk Aluminium Smelter as part of the plant's foundry modernization program has reached its full capacity of 90 000 tonnes of billets per year.

Source: Russia Newswire

http://www.russianewswire.com/releases_headlines_details.php?id790

China Chalco to raise aluminum output 30 pct, alumina 10 pct in 2005 - report

Forbes 07.13.2005, 11:32 PM

BEIJING (AFX) - Aluminum Corp of China, the nation's biggest alumina producer, plans to boost aluminum production by 30 pct and alumina output by 10 pct this year, The Standard reported, citing analysts who have been briefed by the company.

The Hong Kong-based newspaper said Chalco aims to produce 7.5 mln tons of alumina, up from 6.82 mln tons, and one mln tons of aluminum, an increase of 230,000 tons over last year's level.

The paper said the production plans came to light during a visit last week by analysts to Lanzhou Aluminum, in which Chalco recently acquired a 28 pct stake.

Analysts said Chalco management indicated the output gains will come through acquisitions and that the company may acquire one aluminum plant by year-end, the paper said.

This year's growth will also gain a hefty boost from Chalco's Lanzhou stake.

bjburo@xinhuafinance.com

Global Alumina

Mineweb, South Africa '13-JUL-05 16:52' GMT © Mineweb 1997-2004

GLOBAL ALUMINA’S BASIC AGREEMENT RECEIVES FORMAL APPROVAL FROM REPUBLIC OF GUINEA’S PRESIDENT

TORONTO, ON – July 13, 2005 – Global Alumina Corporation (Global Alumina) (TSX: GLA.U) announced today that Lasana Conté, President of the Republic of Guinea, has promulgated Global Alumina’s Basic Agreement for the development and construction of a 2.8 million tonne per annum alumina refinery in Boké, Guinea, slated to be complete by 2009. The promulgation follows the agreement’s unanimous ratification by the Republic of Guinea’s National Assembly on May 19, 2005.

The President’s promulgation of Global Alumina’ Basic Agreement denotes that the agreement is now decreed into law and has been approved by both the legislative and executive branch of the Republic of Guinea’s government.

"It is an honour to continue to have the extraordinary support of President Conté for our project. He has been a strong advocate of our project throughout the process," said Bruce Wrobel, Chairman and Chief Executive Officer of Global Alumina. "Promulgation completes another milestone in our development schedule and builds momentum for our on-going activities."

ABOUT GLOBAL ALUMINA

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

For further information, please contact:

Michael Cella Joshua Orzech

Global Alumina GCI Group

P: 212-223-9419 P: 416-486-5923

cella@globalalumina.com jorzech@gcigroup.com

Alcan Will Probably Build $2.5 Bln Smelter, IDC Says (Update2)

July 13 (Bloomberg)

Alcan Inc. probably will build a $2.5 billion smelter on South Africa's south east coast after it concluded electricity-price talks with the country's power utility, the Industrial Development Corp. said.

``The main issue was the electricity price and that has been resolved,'' IDC Chief Executive, Geoffrey Qhena, told reporters today in Johannesburg. ``Alcan has put a lot of resources into this, which is why we are confident it will go ahead.''

The IDC, South Africa's state-owned development bank, will buy a 15 percent stake in the smelter, Qhena said. Alcan will decide whether to proceed at an October board meeting, Qhena said without giving further details. Calls made to Alcan's Montreal headquarters out of office hours weren't answered.

Alcan, along with rivals Alcoa Inc., Norsk Hydro and Corus Group Plc, is looking to expand in locations where energy costs are lower than in North America and Europe. Electricity accounts for about a third of the cost aluminum production.

South Africa's state-owned power company Eskom Holdings Ltd., which has been in talks with Alcan, is the world's lowest-cost electricity provider, Fani Zulu, a company spokesman, said by phone from Johannesburg. He couldn't comment immediately on the outcome of price negotiations with Alcan.

Alcan, Alcoa, Norsk Hydro and Corus may shut as much as 600,000 metric tons of capacity in western Europe between 2006 and 2009 as they seek cheaper power, Mark Fraser, an analyst at CRU International, said in Reykjavik on June 14.

Should the project at a new port complex in South Africa's Eastern Cape province go 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.

It may build the Coega smelter using some elements of its untested AP50 technology, Richard Evans, Alcan's executive vice president, said in an interview in Reykjavik on June 14. Alcan's AP30 technology has been used in 80 percent of all aluminum projects built outside of China in the last 15 years, Evans said.

The South African government said on Jan. 25 that Alcan would have to reapply for tax incentives originally granted to Pechiney SA, the French aluminum producer it bought in 2003.

The IDC, which owns a 25 percent stake in BHP Billiton's Mozal aluminum smelter in Mozambique, will invest in industrial projects at Coega, to create jobs in one of South Africa's three poorest provinces. South Africa's unemployment rate of 26.2 percent is the highest of 68 countries tracked by Bloomberg.

Lionel October, the deputy director general in South Africa's trade and industry ministry, was not immediately available when contacted on his cellphone.

To contact the reporter on this story:

Stewart Bailey in Johannesburg asguazzin@bloomberg.net

Australian firm proposes alumina refinery at Vizag

Business Standard, India Hyderabad July 14, 2005

Australian-based BHP Billiton today proposed to set up a huge alumina refinery plant with a capacity of 3 million tonnes per annum near Vizag, at an estimated investment of over $ 2-3 billion, if the Andhra Pradesh government agrees to provide sufficient bauxite reserves besides SEZ status among other things.

Rody Sale, consultant of BHP Billiton along with other members of the company, met chief minister Y S Rajasekhara Reddy here on Wednesday and gave a presentation on their proposal in the state to him.

BHP sought an allocation of a whopping 300 million tonnes of proven bauxite reserve for the first phase of the project. It may be recalled that the state government recently signed an MoU with Jindal group on setting up of a refinery and smelter plant with the production of about 2.5 lakh tonnes of aluminium.

As per the projections of the company team, government revenue due to alumina refinery in the first five years would be Rs 2,700 crore while it would be Rs 20,250 crore on the aluminium smelter over the life of the project. Direct employment at peak is estimated at 1,800 persons.

However, the government, on its part, has not made any commitment with regard to the allocation of bauxite reserves as required by the company during the presentation. When contacted, Sabita Reddy, minister for mining, said that priority would be given to the public sector Nalco company.

"We will consider the proposal of the BHP only if Nalco backs out of its plans," she said, adding that a final decision would be taken in a couple of months time.

Considering the total quantum of over 600 million tonnes of bauxite reserves available in the state, the government is of the view that only two projects can be accommodated. Jindal group has been allocated over 240 million tonnes of bauxite reserves.

Nalco representatives had met the Reddy in April, 2005 and expressed their interest to set up alumina and aluminium plants in Andhra Pradesh.

Norsk Hydro confirms end of aluminium production at Germany's HAW plant

Forbes 07.13.2005, 06:34 AM

OSLO (AFX) - Norsk Hydro ASA said aluminium production at Hamburger Aluminium-Werk plant in Germany will be ended as talks to reach an agreement on electricity supplies to the plant have been terminated without result.

The plant is owned by equally by Norsk Hydro, Amag and Alcoa Inc.

The owners tried to secure energy supplies that would make the plant more competitive, but said they was unable to find a common ground after conducting talks with energy supplier HEW/Vattenfall and Hamburg economics senator Gunnar Uldall.

Norsk Hydro said 450 jobs will be lost when the plant closes at the end of 2005.

Bente.Bjorndal@afxnews.com

Alcasa signs rolling plant overhaul agreement

Business News Americas, Chile Thursday, July 14, 2005 16:29 (GMT -0400)

Venezuelan aluminum reducer Alcasa has signed a letter of intent with Italian company Fata Hunter to overhaul the rolling plant through technological upgrades and operating improvements.

At end-2004 Alcasa, a unit of state heavy industry holding company CVG, announced the project was guaranteed by a US$20mn contribution from Venezuela's government. Works are designed to expand coil processing capacity at the United rolling plant to 7t/y from 3.5t/y.

"Now [Fata Hunter] must go and see what needs to be done, evaluate the equipment and decide on the total investment amount and the financing structure in order to proceed with works," an Alcasa spokesperson told BNamericas.

The project work plan will begin within 90 days, Fata Hunter president Anthony Tropeano said in an Alcasa statement.

Under the agreement, Fata Hunter also will guarantee technology sharing through a training plan for Alcasa technical staff.

Fata Hunter, part of Italy's Fata group, competed for the project with Swiss company Asea Brown Boveri (ABB), Venezuela's Vatech and an European consortium led by group VA/Clesim.

The modernization plan is expected to take 10-12 months after the agreement is approved, Alcasa said previously.

Although Alcasa has been working on the project for several months, the agreement was included as part of the deals reached at this months investment round in Caracas between Italy and Venezuela.

The Alcasa plant is in the Matanzas industrial area in Puerto Ordaz city in eastern Venezuela's Bolívar state. CVG owns 92% of the plant and US aluminum giant Alcoa (NYSE: AA) has the remaining 8%.

Harvey Beltrán BNamericas.com

PM okays development of aluminium refinery complex in Central Highlands, Vietnam

Metals Place, UK 13 July 2005 Source: VNA

The Prime Minister has approved a feasibility project on the construction of a 487 million USD complex to exploit bauxite and refine aluminium in Tan Rai, Bao Lam district in the Central Highlands province of Lam Dong.

According to the Vietnam National Minerals Corporation, the project developer, the complex will house a bauxite mine, and mills to electrolyte alumina from bauxite and refine aluminium.

In the first phase, the complex plans to exploit 1.7 million tonnes of bauxite and produce 600,000 tonnes of alumina, 53 percent of which will be exported.

Alcan to Decide on Coega Smelter in October

Resource Investor, VA 14 Jul 2005 at 07:01 AM EDT

By Larry Claasen

JOHANNESBURG (Business Day) -- Canadian aluminium and packaging group Alcan [TSX:AL; NYSE:AL] will make its decision on whether to go ahead with building a $2,5bn smelter at the Coega industrial development zone in South Africa in October, said Industrial Development Corporation (IDC) CEO Geoffrey Qhena yesterday.

Qhena said he was confident Alcan would go ahead with the smelter given the progress made on the negotiation of an electricity tariff for the smelter — one of the key issues in its decision to participate.

Alcan, the world’s second biggest primary aluminium producer, inherited the $2.5bn smelter project when it took over French rival Pechiney in 2003, but has yet to commit to the project.

It has promised to announce its decision on the Coega project several times but has so far failed to do so.

Qhena said a final decision would only be made at an Alcan board meeting in the latter half of the year.

If Alcan goes ahead with the smelter, the IDC will likely take a 15% holding in the project — which will be second only to the Barclays takeover of Absa in terms of foreign direct investment in SA.

The negotiation between Eskom and the Canadian group over the electricity tariff is seen as key to whether the project goes ahead.

Smelters are big users of electricity, with the Mozal smelter in Mozambique accounting for half of that country’s total electricity consumption.

Eskom spokesman Fani Zulu said it had given Alcan a quotation that was within the "framework" provided by government and the National Electricity Regulator, and was now awaiting a response.

Zulu said the negotiation with Alcan was "tough" but was "progressing well".

Alcan spokesman Alexander Christen would not say whether the group had come to a decision to proceed with the smelter.

Christen, however, did say that Alcan would make an announcement on the progress of a feasibility study on the smelter being done in collaboration with the South African government and the IDC in "a few weeks’ time".

Alcan said it needed a new feasibility study as it had decided to revert to the known AP35 technology rather than the highly advanced AP30 smelting technology.

Qhena said: "We are confident that the smelter will go ahead, that’s why we would like to take a 15% stake".

If Alcan decides to proceed, construction could begin at the end of this year with the first metal produced in 2008. It would then produce up to 660000 tons of aluminium a year.

He said Alcan had invested a lot of resources into investigating the possibility of developing a smelter at Coega.

The smelter is expected to be the anchor tenant in the development, which has been struggling to attract investors.

Two months ago Coega announced it had attracted its first investment, which is now clouded in controversy.

The tenant, Sander International, a textile maker, has run into problems regarding its empowerment partner, ICAN, which is battling to raise funding for its stake.

Coega Development Corporation CEO Pepi Silinga said last month that 5% of the 70 projects the corporation had lined up were expected to materialise within 18 months. The corporation said an announcement on a large further investment at Coega would be made in the next three months.

With Reuters

Commodity Strategists: Aluminum to Rise in 2006 (Update3)

July 15 (Bloomberg)

Aluminum prices may rise next year as increasing demand from China, the world's second-largest user, squeezes supplies of the metal used in cans, airplanes and cars, said Dan Roling, first vice-president at Merrill Lynch & Co.

Roling's view contrasts with the result of a Bloomberg survey published July 7. The median forecast of the seven analysts surveyed was for prices to drop in the second half of this year on increasing supply.

``We favor aluminum,'' said Roling, whom Merrill describes as its top expert on coal, nonferrous metals, mining and steel. ``All the bears have for six years consistently under-estimated the size of China's demand.

Cash prices for aluminum, the amount paid for immediate delivery of the metal, may rise to 90 cents a pound ($1,984 a metric ton) in 2006, from 86 cents this year, Roling forecast in an interview by telephone from New York July 11.

China expects its economy to expand 8 percent this year after growing 9.5 percent in 2004. The country's aluminum consumption may rise 14 percent this year to 6.8 million tons, after increasing 17 percent in 2004, said Wang Feihong, chief analyst with Beijing Antaike Information Development Co.

Declining global stockpiles will also bolster prices, according to Roling, who joined Merrill, the second-largest U.S. securities firm, in 1981.

``Aluminum exchange inventories continue to decrease, recently to a new 2005 low of 553,506 tons, the equivalent of 9.3 days of supply,'' he said.

Eleven-Week High

Aluminum for delivery in three months dropped $11.5, or 0.6 percent, to $1,831 a ton on the London Metal Exchange as of 11:25 a.m. local time today. Prices of the metal rose to an 11-week high yesterday on concern European smelter closures will reduce supplies.

China is the world's biggest producer of the metal. Roling says output in the country may rise more slowly or even decline as the government imposes investment curbs to cool the economy and reduce consumption of electricity. Power accounts for about a third of the cost of making aluminum.

`Clear Controls'

``We have seen very clear controls in China,'' said Jeremy Goldwyn, head of industrial commodities at Sucden U.K. Plc, a London-based commodities broker, in an interview in London yesterday. ``The government has been very controlling over limiting alumina shipments, ability to raise finance and rail freight, in order to damp down production of aluminum which is largely going to the export market.''

Exports may also fall if the government takes measures to discourage so-called tolling, or importing the raw material alumina, processing it and exporting the metal. ``It's likely to happen this year,'' Wang of Antaike said.

The country ``doesn't want to see more smelters go into the red and incur more bad loans,'' said Chris Ding, a metal analyst with China International Capital Corp., China's largest investment bank, from Beijing.

Falling aluminum supply sent prices on the London Metal Exchange soaring 22 percent in 2004, prompting China to ramp up production to meet domestic demand and export excess supply.

China shipped abroad 31 percent more of the metal in the first five months of the year compared with the same period last year, the Beijing-based customs office said on June 24.

Emphasis

Roling's latest forecasts are less than his previous estimates of $1 a pound for next year and 95 cents for this year. Aluminum prices still will increase in 2006 while those for copper, lead, nickel and zinc will fall, he said.

``The emphasis here is that aluminum prices will probably rise 4.7 percent next year,'' he said.

Like Merrill, Macquarie Bank Ltd., Australia's No. 1 investment bank, expects higher prices next year. Macquarie Bank expects cash aluminum prices to average $1,984 a ton in 2006, compared with $1,940 this year, bank analyst Adam Rowley said in a July 4 report.

Global inventory of the metal is already low, and may go lower if European smelters close in the next 18 months, Credit Suisse First Boston said in a July 11 report.

``The pace of global primary aluminum output may slow during the second half,'' CSFB analysts David Gagliano, Ralph Profiti and Richard Garchitorena said in a report. ``There are a number of aluminum smelters in Europe and North America approaching power contract renegotiations, in turn potentially forcing closures at certain smelters.''

Contract Negotiations

CSFB forecasts any reduced output will prevent the price from falling below 77 cents a pound next year, from 80 cents in the second half of 2005. The bank declined to give its new 2005 full-year forecast.

Its report cited a survey by industry consultant, Brook Hunt, showing seven European smelters with a combined output of 649,000 tons will renegotiate contracts in the next 18 months.

Norsk Hydro ASA, the world's fourth-biggest aluminum producer, said on July 12 it will shut its Hamburger Aluminium- Werke smelter in Germany because of rising power costs. The Norwegian company will also close its Stade plant. European closures may eliminate 3 percent of global output, Macquarie Bank's Rowley said last week.

To contact the reporters on this story:

Claire Leow in Singapore at cleow@bloomberg.net;

Xiao Yu in Beijing at yxiao@bloomberg.net.

Kufuor urges VALCO and ALCOA to speed up negotiations

GhanaWeb, Ghana Accra, July 14, GNA

President John Agyekum Kufuor has appealed to the Managements of Volta Aluminium Company (VALCO) and Aluminium Company of America (ALCOA) to speed up negotiations towards the establishment of a viable bauxite industry in Ghana.

He said: "ALCOA is already studying feasibility reports conducted on bauxite deposits at Kyebi and Nyinahin under the VALCO/ALCOA co-operation, I will, therefore, urge the parties involved to accelerate the pace towards the establishment of a viable bauxite industry in Ghana."

A statement issued by the Office of the Press Secretary to the President in Accra on Tuesday said President Kufuor made the appeal while on a familiarization tour of the Jamaica Aluminium Company (JAMALCO) at Clarendon as part of his three-day official visit to Jamaica. JAMALCO is an ALCOA-Jamaica Government establishment.

"Impressed with the progressive environmental policies of JAMALCO, President Kufuor said, he looked forward to a similar experience at the dawn of ALCOA's bauxite plant in Ghana, " the statement said. The negotiations would include growth of the mining component, refining of aluminium, aluminium production and upgrading in the country's rail infrastructure.

VALCO is expecting a 30 million-dollar grant from (ALCOA) for the purchase of raw materials and some equipment to start operations this month.

About two billion dollars' investment over a three-year period in Ghana is needed to build an aluminium refinery and operate a bauxite mine as well as the construction of a railway line from Kibi to Tema to facilitate the mining of bauxite.

The project is expected to employ more than 3,500 people and a further 1,500 would be needed to keep it running after completion. Other members of President Kufuor's entourage were, Nana Addo Dankwa Akufo-Addo, Minister of Foreign Affairs; Mr Alan Kyerematen, Minister of Trade and Industry; Mr Daniel K. Osei, Secretary to the President and Dr Charles Mensa, Resident Director of the Volta Aluminium Company (VALCO). JAMALCO began operations in bauxite mining in 1959.Source: GNA

Oman firm, Bechtel sign $2.2 bln deal

Reuters Sat Jul 16, 2005 9:16 AM ET

MUSCAT (Reuters) - Oman's Sohar Aluminum Company signed on Saturday a deal with U.S. firm Bechtel to build a $2.2 billion aluminum smelter project in the north of the country.

The Omani company said in a statement that construction of the 325,000 tonnes-per-year smelter, part of a project which also includes desalination and electricity plants, would begin before the end of the year.

The smelter is expected to start production in 2008.

Tony Kinsman, Sohar Aluminum's CEO, said the firm would borrow up to 55 percent of the project's cost. He gave no further details.

The smelter project, expected to contribute 2 percent to gross domestic product of the Gulf state, is part of a drive by non-OPEC oil producer Oman to wean is economy off crude sales.

It would also further boost aluminum production in the Gulf Arab region, already home to major smelters Aluminum Bahrain and Dubai Aluminum which have a combined capacity of more than one million tonnes.

Sohar Aluminum is a joint venture of the state-owned Oman Oil Company and Abu Dhabi Water and Electricity Authority (ADWEA), each holding a 40 percent stake. Canada's Alcan Inc. (AL.TO: Quote, Profile, Research) owns the remaining 20 percent.

A joint venture of Canada's SNC Lavalin (SNC.TO: Quote, Profile, Research) and Murray & Roberts Engineering of South Africa (MURJ.J: Quote, Profile, Research) had also bid for the smelter project.

© Reuters 2005. All Rights Reserved.

Kufuor arrives home from AU/G-8 Summit

GhanaWeb, Ghana July 16,2005

Accra, July 16, GNA- President John Agyekum Kufuor arrived home on Saturday after attending the Africa Union (AU) Heads of States Summit in Sirts, Libya as well as the G-8 Summit in Gleneagles in Scotland. The President and his entourage also paid a three-day visit to Jamaica at the invitation of that country's Prime Minister, Mr P. B. Patterson.

Ghana's Foreign Affairs Minister, Nana Akufo-Addo, also accompanied the President on his trips.

Nana Akufo-Addo told journalists at the Kotoka International Airport, that the meetings were fruitful, especially where Ghana was to enjoy 80 per cent cancellation of her debt owed to industrialised nations.

He said the African leaders at the end of the AU summit, took a decision on Africa's debt cancellation, which they agreed must be done across board without any conditionality, as well as insisted on a fair trade for African nations.

The Minister said African leaders applauded the progress of security issues being achieved on the continent.

He cited the government of national unity being formed in Sudan after over 40 years of civil strife as well as the political progress in Cote d' Voire and Togo.

According to Nana Akufo-Addo, the presence of the seven African heads of states at the G-8 summit led to the pledge by industrialised nations to double their developmental assistance to African nations. This, he said, was in addition to the cancellation of the debt of 14 African countries including Ghana who has exhibited good governance and respect for human rights.

Nana Akufo-Addo noted that President Kufuor's visit to Jamaica culminated in the decision by ALCOA World Aluminum to establish a bauxite plant in Ghana.

He said the plant would be located at Kyebi, in the Eastern Region and Nyinahim in the Ashanti Region where bauxite deposits were found. Nana Akufo-Addo said President Kufuor and his entourage also had the opportunity to tour the Jamaican Aluminum Company to see at first hand its facilities as well as mode of production.

He also said the President and his Jamaican counterpart held bilateral discussions and agreed to collaborate in areas such as tourism, education and culture.

Nana Akufo-Addo said the two countries had a long-standing relationship, which needed to be stepped up, and that the Ghana Jamaican Joint Permanent Commission was to be reactivated.

The Vice President, Aliu Mahama, Mrs Theresa Kufuor, the First lady, Ministers, the Chief of Defence Staff, Major General Joseph B. Danquah, the Inspector General of Police, Mr Patrick Acheampong and the Dean of the Diplomatic Corps, Mr Ibrahim Omar were at the Airport to welcome President Kufuor and his entourage. 16 July 05

Hamdan lauds Dubal for completion of Potline-7

Khaleej Times, United Arab Emirates 17 July 2005

DUBAI — Shaikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, UAE Minister for Finance and Industry and Chairman of Dubai Aluminium Company, yesterday complemented Dubal for the completion of $204 million (Dh748.6 million) Potline-7 expansion with all the 120 pots going on stream well ahead of schedule.

Shaikh Hamdan has expressed his appreciation of the efforts of Dubal's management team and the employees for commissioning all the 120 'pots' or 'cells' within 25 days against the scheduled target of 60 days. This works out to an average of 4.8 pots a day.

Dubal is internationally recognised as one of the major aluminium producers and currently houses one of the biggest aluminium smelters in the world.

Ahmed Humaid Al Tayer, vice-chairman, board of directors, Dubal, said: "This is an illustration of Dubal's clear-cut strategy as part of its major expansion plan. The project could not have been completed ahead of schedule and well below the budgeted cost without the commitment and dedication of the management team, project group and the entire workforce. Dubal's international recognition as a business success is entirely because of this commitment from the employees."

With the full commissioning of Potline-7, Dubal's production capacity has increased by 74,000 tonnes to an unprecedented total output level of 761,000 tonnes per annum. The entire commissioning at Potline-7 was carried out without disruption to the day-to-day running and operation of the plant.

The project had been approved by the Dubal board in March 2004. It was originally scheduled for completion during the fourth quarter of 2005.

Al Tayer said: "Completion and full commissioning of this Potline-7 demonstrates Dubal's commitment to upgrading its production assets, and ability to complete projects on time and within budget. Our investment programme also further strengthens the industrial base of the UAE and the region as a whole."

Environmental protection being very crucial, Dubal focused its total efforts on zero pollution by closing all the cells during the start-up process. This was done in order to eliminate gas emissions without treating them through the Fume Treatment Plants (FTPs).

The project was completed without any Loss Time Accidents (LTAs). This is a record that Dubal is proud of because the company is committed to and recognises that environment, health and safety are an integral part of its drive towards continuous improvement.

Potline-7 expansion also focused on minimising anode effect (Green house gases) despite starting the Line with 225,000 amperes, around 8,000 amperes more than the previous project. This resulted in an improvement of around 58 per cent on anode effect frequency.

Besides this, early stabilisation and normalisation of the cells improved PFC emission by 38 per cent, once again bettering Dubal's previous achievement.

In line with the directives of Shaikh Hamdan, Dubal currently sources more than 35 per cent of its supplies locally. Dubal has always been focusing on engaging local companies as partners in growth so that the domestic economy ultimately stands to benefit, especially in the manufacturing sector. During Dubal's 25-year history, the company has contributed significantly to the national economy. Dubal's contribution to Dubai's GDP at present stands at more than 7 per cent.

Kaiser Aluminum Contributes to Solar Car Effort

Business Wire (press release), CA 18-Jul-2005

The solar car "Momentum" was built by the University of Michigan Solar Car Team in part with material from Kaiser Aluminum. The car is competing in the 2500-mile North American Solar Challenge Race that began in Austin, Texas, on July 17.

FOOTHILL RANCH, Calif.--(BUSINESS WIRE)--July 18, 2005--Kaiser Aluminum sheet, plate, and extrusions serve as key components for a solar-powered vehicle christened "Momentum" that is competing in the 2005 North American Solar Challenge Race that began yesterday in Austin, Texas and is scheduled to conclude 2,500 miles later in Calgary, Alberta on July 27.

Through its contributions of cash and materials, Kaiser serves as a "gold level" sponsor of the University of Michigan Solar Car Team, which built and is racing Momentum. The Michigan Solar Car Team is a non-profit, student-run organization whose purpose is to design, finance, build and race a solar powered vehicle in several competitions across the U.S. and the world.

Momentum is a lightweight, low-power vehicle designed and built with a single purpose in mind -- racing. It has limited seating (for one), very little cargo capacity, can only be driven during the day, and has a top speed of about 65 miles per hour. Despite those kinds of present-day limitations, Momentum and other solar cars offer an excellent opportunity to develop future technologies that can be applied to practical applications.

The race is open to any North American college or university, and approximately 20 teams fielded vehicles for this year's Solar Challenge.

"Kaiser is honored to support the University of Michigan team," said Theodore DiGuiseppe, Kaiser Aluminum's Vice President and General Manager of Automotive & Industrial Products. "The team shares our view of the innovative things that can be done with aluminum in ground transportation applications. Kaiser has long been a key supplier to the automotive industry, and our support of this program is just a natural for us."

Kaiser materials are used in suspension and chassis and body structural components including control arms, mounting brackets, seat frame, and motor mount system.

For more information about the University of Michigan Solar Car team, see Momentum's web site at http://www.engin.umich.edu/solarcar/

Kaiser Aluminum Corporation (OTCBB:KLUCQ) is a leading producer of fabricated aluminum products for aerospace and high-strength, general engineering, automotive, and custom industrial applications.

Contacts Kaiser Aluminum, Houston Scott Lamb, 713-775-2742

Alcoa: Alumar smelter expansion headed for Q3 startup - Brazil

Business News Americas, Chile Monday, July 18, 2005 17:55 (GMT -0400)

Aluminum giant Alcoa (NYSE: AA) aims to complete an expansion at its JV Alumar aluminum smelter in Sao Luis in northern Brazil's Maranhao state by end-September 2005, company spokesperson Kevin Lowery confirmed to BNamericas.

The Pittsburgh-based company announced in July 2004 that its 100%-owned Brazilian subsidiary, Alcoa Aluminio, would start an investment of US$130mn immediately to increase its share of smelting capacity at the Sao Luis smelter by 63,000t/y to 262,000t/y.

When complete, Alcoa's share of output from the smelter will grow from 54% to 60%. The smelter is a JV with Billiton Metals, a subsidiary of BHP Billiton (NYSE: BHP), which holds the remaining 46%.

The expansion will increase total smelting capacity at Alumar, the region's second largest smelter, from 370,000t/y to 433,000t/y, according to Alcoa.

REFINERY EXPANSION

In addition Alcoa is weighing up a 2Mt/y expansion at the Alumar refinery, the region's largest, from 1.3Mt/y to 3.3Mt/y. The expansion, still at the feasibility stage, could require investment of US$800mn, according to newspaper Mercantil.

"We think the expansion process at Alumar goes hand-in-hand with the Juruti bauxite mine project [in Brazil's Pará state]," said Lowery, adding a decision on the expansion would likely be made at the end of this year or the beginning of 2006.

Para state's environmental authority Coema approved in June a "prior license" for Juruti, the first hurdle of the three-stage environmental permitting process.

The Juruti bauxite deposit is due to start operations in 2008 with initial production of 6Mt/y bauxite, increasing to 8Mt/y and then 10Mt/y, for investment of US$350mn in the first four years, according to information on Alcoa's website. The project is expected to have a 45-year life.

The Alumar refinery is a joint venture between Australia's BHP Billiton (36%), Alcoa (35.1%), Canada's Alcan (10%) and Abalco (18.9%).

By Emily Russell

BNamericas.com

End of aluminum sector tax breaks heralds new era

The Standard, Hong Kong July 19, 2005

Gladys Tang

China will remove preferential tax policy on alumina imports and aluminum exports to restrict tolling trade activities, which analysts said is a move to reduce energy-consuming aluminum output and encourage industry consolidation.

The new policy could be launched tomorrow as it has been approved by the State Council, Bloomberg said, citing Beijing Antaike Information Development, a research affiliate of the China Nonferrous Metals Industry Association.

The possible launch is earlier than expected by the Aluminum Corporation of China (Chalco), whose chief financial officer Joshua Chen told analysts two weeks ago that the new policy would not come into force until 2006 to let companies fulfill outstanding long-term contracts.

Chalco company secretary Liu Qiang said Monday that it has not yet received the relevant documents, but added that ``the policy will not change the company's plan to acquire aluminum plants in the next half.''

Currently, most aluminum producers enjoy a full rebate of the 17 percent value-added tax on aluminum exports and 8 percent tax on alumina imports. JPMorgan expects smelters will be forced to cut exports and sell aluminum in China, where the metal is in oversupply, and therefore drive down prices. That would prompt smelters to fold and in turn reduce demand for alumina, the raw material to make the metal, it said.

Goldman Sachs also expects consolidation in the industry to accelerate as the scrapping of rebates on alumina imports will reduce cheap raw material supply to mainland smelters.

Market observers said China is not well-positioned to develop as an aluminum producer due to a lack of resources and power shortages.

The country imported 52 percent of alumina demand last year and the rest is supplied by Chalco, the only alumina producer in China.

JPMorgan analyst Zhang Feng noted in a research report, ``the export of aluminum means export of power, which does not make sense as China is short of power.''

Electricity makes up 30-40 percent of the total cost of aluminum production. Last year, 30 percent of imported alumina was used to produce aluminum for exports.

Chalco's aluminum production grew 40 percent in the first five months to 416,000 tonnes, faster than the 10 percent increase in the metal's sales.

gladys.tang@singtaonewscorp.com

Bauxite mining to restart in Sierra Leone in 2006

Reuters South Africa, South Africa Mon Jul 18, 2005 8:20 AM GMT

LONDON (Reuters) - Sierra Leone-based minerals firm Titanium Resources Group (TRG) said on Monday that bauxite production, halted in 1995 due to the country's civil war, will restart early next year.

In a release it said operations had started at the company's wholly owned bauxite operations, which are located in the southwest some 150 km southeast of the capital Freetown.

"Full bauxite mining and production, at a rate of 1.2 million tonnes per year, is expected to begin in the first quarter of 2006," it said.

Bauxite is used to produce alumina, an intermediate product that is smelted in the production of primary aluminium.

TRG said it had also entered into long-term sales agreements with Alcoa World Alumina LLC, a unit of Alcoa, the world's largest aluminium producer, and Swiss-based trader Glencore AG to sell the project's full estimated annual production.

Sierra Leone's civil war erupted in 1991, bringing the former British colony's economy to a virtual halt and destroying most of its infrastructure.

The conflict in the West African country, in which 50,000 people were killed, was declared over in 2002 after a massive UN peacekeeping operation.

TRG said refurbishment was expected to take around 20 weeks with an additional four weeks for commissioning the facility.

Mined bauxite will be processed locally, then loaded into barges of 2,000 tonne capacity and moved down the Sherbro river to the Atlantic.

© Reuters 2005. All Rights Reserved.

Alcoa secures $75M US loan for Russian rolling plant upgrade

Canadian Press Tuesday, July 19, 2005

MOSCOW (AP) - Alcoa Inc. said Tuesday that it had secured a $75 million US, five-year loan from the European Bank for Reconstruction and Development to fund the modernization of its two recently acquired Russian plants.

The company, one of the world's largest aluminum producers, bought the Samara and Belaya Kalitva facilities from Rusal, the country's main aluminum maker, in a $257 million US cash deal at the start of the year. At the time Alcoa said it planned to spend $80 million by the end of 2005 on refurbishing the plants.

Alcoa hopes the spending on maintenance and equipment upgrades will win it orders in a market where annual per capita aluminum consumption is just four kilograms compared to 20 kilograms in the U.S. and EU, according to Andrei Bader, Alcoa's corporate affairs director for Russia.

Industry estimates put Russia's equivalent Cold War figure at 12 kilograms to 14 kilograms per capita, thanks to the Soviet Union's mighty military and space industries.

Bader said Alcoa plans to target foreign arrivals in the Russian automotive sector as well as local carmakers, who are gradually shifting to using more aluminum in their cars.

Toyota Motor Corp. broke ground on a $140 million plant near St. Petersburg in June, while France's Renault SA opened a $250 million assembly plant for the Logan model in Moscow earlier this year. Volkswagen AG and DaimlerChrysler AG are rumoured to be mulling an entry.

The European Bank for Reconstruction and Development is providing $50 million of the loan directly, while HSBC PLC will lend $25 million.

© The Canadian Press 2005

Power costs driving up aluminum prices

Montreal Gazette, Canada - Tuesday, July 19, 2005

Europe's electricity rates force shutdowns

ROBERT GIBBENS , The Gazette

The threat of smelter shutdowns in Europe because of soaring electric power costs has driven aluminum ingot prices up to an 11-week high and persuaded some analysts to take a more favorable view of a highly volatile industry.

Big Western aluminum producers like Alcan Inc., Alcoa Inc. and Norsk Hydro have seen their share prices badly beaten up since spring because of uncertainties about Chinese demand and U.S. economic recovery.

But global aluminum inventories are low and industry reports say almost one million tonnes of smelter capacity may be shut in Europe over the next two years as power contracts expire and utilities struggle with rising oil and natural gas costs.

Power makes up 30 per cent of the cost of producing primary aluminum, which ends up in aircraft, cars, building products, beverage cans and cable. Quebec's comparative advantage of low-cost power is being challenged by other regions offering rockbottom power costs.

TD Newcrest analyst Larry Smith has raised his 2006 aluminum ingot price forecast from 74 cents U.S. a pound to 78 cents U.S. because of what is happening on the supply side.

Norway's Norsk Hydro has announced the shutdown of 200,000 tonnes of smelter capacity in the next two years, and at least another 450,000 tonnes of capacity is at risk in Europe, including almost 100,000 tonnes at Alcan's Lannemezan and Steg smelters, he notes.

He has upgraded Alcan shares to "buy" from "hold" and his one-year share-price target goes to $37 U.S. from $34 U.S. Every 5-cent U.S. change in the primary aluminum price, on an annual basis, affects Alcan's earnings by about 9 cents U.S. a share. smith's estimate of 2006 net income is $2.69 U.S. a share, up from $2.35 U.S.

Alcan shares closed yesterday at $31.95 in New York, up 32 cents, valuing the company at almost $12 billion U.S. The 52-week range is $28.75 to $52.65. In Toronto, Alcan closed at $38.99 yesterday, up 43 cents on the day.

The shutdown of Alcan's two small high-cost smelters in Europe, accounting for three per cent of its world capacity, would have a minimal impact on the company as it considers new low-cost smelter sites in Iceland, the mideast, Africa and elsewhere, he adds, but it highlights key changes in the global supply and demand balance.

Most Canadian analysts are cautious about the pending European smelter shutdowns, saying the producers may be piling on pressure for power price concessions that could prolong their life.

"It's been a horribly volatile year so far for aluminum shares and the supply-demand picture won't be clarified any time soon, especially if the Chinese do revalue their currency," said one veteran analyst who did not want to be named.

Aluminum ingot now trades at about 82 cents (U.S.) a pound, based on London Metal Exchange prices, and the futures markets indicate higher prices are coming. Smelter closings by Norsk Hydro, Alcan, and also by Corus Group , would eliminate 3 per cent of global capacity.

Credit Suisse First Boston says any reduction in capacity will prevent the ingot price from falling below the recent low of 77 cents U.S. and it should average 80 cents U.S. for the rest of 2005.

But Merrill Lynch's Dan Roling says Chinese demand has been consistently underestimated over the past six years. He believes the ingot price will reach 86 cents U.S. this year and hit 96 cents U.S. in 2006 if inventories are squeezed further.

China's aluminum consumption may rise 14 per cent this year to 6.5 million tonnes, European analysts say, but the government is dampening domestic output by tightening the financial reins and limiting scarce power resources.

bgibbens@thegazette.canwest.com

© The Gazette (Montreal) 2005

Norsk Hydro spends 240 mln nkr on expanding Norwegian aluminium casting capacity

Forbes 07.19.2005, 10:43 AM

OSLO (AFX) - Norsk Hydro ASA is spending 240 mln nkr on expanding the capacity of its aluminium cast line at Sunndal in Norway with the aim of to securing its market position for foundry alloys in Europe.

It said the project involves building a new casting centre for foundry alloys and will provide 15 new jobs.

The centre will have a capacity of 80,000 tonnes, the same as the first centre for foundry alloys in Sunndal, which was completed in 2003.

The metal works in Sunndal is expected to produce a total of 360,000 tonnes this year. It will be modified to increase its production of molten metal and finished casthouse products until the year 2010.

Rebuilding and expansion work of the casthouse in Sunndal will begin in August 2005 and will be completed in the fourth quarter of 2006.

Demand for aluminium foundry alloys, which are particularly in demand in the car industry, has grown by approximately 7 pct a year over the last five years.

Norsk Hydro said it is market leader in Europe for aluminium foundry alloys with production from its own and cooperating works in Norway, Slovakia and Slovenia.

michael.delaine@afxnews.com

Alcoa gives green light to Jamalco expansion

Business News Americas, Chile Wednesday, July 20, 2005 13:50 (GMT -0400)

Pittsburgh-based aluminum giant Alcoa's (NYSE: AA) board has approved plans for its Alcoa World Alumina and Chemicals (AWAC) affiliate to expand the Jamalco alumina refinery in Jamaica, Alcoa announced.

The planned expansion is a joint venture between AWAC and the Jamaican government and would more than double refinery capacity to 2.8Mt/y from 1.3Mt/y.

The expansion, whose cost is estimated at US$1.2bn, includes developing a power station compliant with Jamaica's hurricane- and earthquake-proof construction requirements.

AWAC is financing the majority of the expansion, which will see its ownership of Jamalco increase to 77% from 50%, with the remaining 23% owned by the Jamaican government.

Alcoa announced plans in May for the expansion program's first stage, which will increase production 150,000t/y and require US$77mn. The phase is due to wrap up by end-2006, while the remaining expansion phases could finish by end-2007.

Before starting the expansion's second phase, agreements must be secured to bring natural gas to Jamaica and Jamalco, Alcoa said. The gas would provide a source of cleaner and less expensive fuel to the refinery and any excess power could be sold in the Jamaican market.

AWAC and the Jamaican government are expected to review their JV agreement before phase 2 kicks off, Alcoa said.

Alcoa holds 60% of AWAC, while Australian company Alumina Limited owns the balance. BNamericas.com

Council grants Alcoa $30 million tax phase-in

Warrick Publishing, IN Thursday, July 20, 2005

By Tim Young-Warrick Publishing Online

Alcoa Warrick Operations received a $30 million, 10-year tax phase-in for improvements to their power plant by the Warrick County Council on Thursday, July 7.

Peter DeQuattro, power plant manager, said the new modifications would take place to the boilers and the fuel-handling capabilities.

"That will make us more cost-effective," he said.

With the new changes to the boilers, Alcoa will be able to burn more diverse fuel.

All changes will allow Alcoa to remain competitive in its industry, according to DeQuattro.

"We are very sensitive to the current fiscal issues within the county," he said. "This request would not really take effect until probably 2008 when investments are completed."

Alcoa's board of directors will determine whether or not the Warrick Operations will receive the proposed improvements.

DeQuattro said that the council's approval will hopefully send a signal to the board of directors signifying the support that the county and the community have towards Alcoa.

"We're hoping to make sure that Warrick Operations stays around for another 50 years with this investment," he said.

The recommended changes are not "environmentally-driven," according to DeQuattro.

"It is purely strategic to improve our infrastructure and our cost position," he said.

Alcoa is an integrated power plant, smelting and aluminum rolling facility.

Just less than 50 years old, Alcoa employs more than 2,100 people.

"To invest in an American industry owned by Americans is worth it," said Councilman Ray McIntyre.

The Warrick County Economic Development Advisory Council and the Redevelopment Advisory Council both recommended the approval of the abatement to the council

Industries at Risk Due to Opencast 'Hostilities'

RedNova.com, TX July 20, 2005

Major industries reliant on coal in the North-East are at risk if fresh local sources cannot be found, says a visiting expert. Unless new planning consents are granted, extraction from opencast mines in the region is due to cease in 2007.

David Price, editor of Coal UK magazine and consultant to the industry, said environmental concerns had created a hostile attitude among local authorities towards granting new consents for opencast pits.

At a conference last Friday of 60 experts convened by the North- East Chamber of Commerce, he said: "The UK has the highest standards of opencasting in the world already. But if the hostile attitude of some councils is not relaxed, the industry is going to be in big trouble."

Alcan aluminum smelter at Lynemouth, near Ashington, which has 670 staff, is coal-fired, through coal supplied under contract with UK Coal.

Mr Price said since last January's closure of the region's last deep mine at Ellington, Northumberland, UK Coal had substituted expensive imported coal, from Russia and South Africa. In 2004, the UK imported 30m tonnes of coal, expected to grow to 35m tonnes in 2005/06.

"Local coal can be mined for pounds 25- pounds 30 a tonne, compared to pounds 40-pounds 45 a tonne landed for imported coal. UK Coal has effectively been subsidising deliveries to Alcan since January. But that contract's due to end."

Unless a new base line supply can be found, jobs in big industries, as well as opencast jobs, could potentially be under threat, he said.

Ibstock Brick's Throckley factory, west of Newcastle, uses fireclay from opencast mines in half the 50m bricks it produces a year. Property manager Bob Baker was "increasingly concerned" for long-term supply in view of planning issues. If fireclay could not be locally sourced, there will be "an initial period where production will be cutback" he said.

Source: The Journal - Newcastle-upon-Tyne

Rusal May Help Build South Ukrainian Npp Unit

dNova.com, TX July 21, 2005

KYIV. July 21 (Interfax) - The Ukrainian government is considering Russian Aluminum (RusAl) involvement in the construction of a new unit of the South Ukrainian nuclear power plant in the Mykolayiv region.

"The Cabinet is considering RusAl involvement in the construction of another unit of the South Ukrainian NPP. A decision will be made at negotiations on the basis of a feasibility study," Ivan Sakhan, General Director of Aluminum of Ukraine (former Ukrainian Aluminum), said in an interview with Investgazeta.

Sakhan said that the unit would supply electricity to an aluminum plant Ukraine might build. "It would be best to build an aluminum plant near a source of raw materials. The Mykolayiv alumina plant and the South Ukrainian nuclear power plant would make the project profitable," he said.

Ukraine could also make use of the electricity surplus resulting from the Russian refusal to buy electricity from Energoatom. That electricity could be supplied to the new plant, Sakhan said.

The new plant, with an output of 200,000 tonnes of primary aluminum, would need about 225 million kilowatt/hours of electricity per month, he said.

Source: Daily News Bulletin; Moscow - English

RUSAL Signs for $3 Billion Power and Smelter Project in Global Top Spot Drive

Business Wire (press release), CA July 21, 2005 09:06 AM US Eastern Timezone

HOUSTON--(BUSINESS WIRE)--July 21, 2005--Researched by Industrialinfo.com (Industrial Information Resources Incorporated; Houston, Texas). In line with its aggressive strategy to become the world's premier aluminum company, Rusal (Moscow, Russia) has signed a memorandum of understanding (MoU) with the state's RAO Unified Energy Systems (Moscow) to form a joint company to complete the 3,000 MW Boguchanskaya hydropower facility and construct a new aluminum smelter, which will become the power station's anchor client.

Smelter Skelter -- Four years after closed, the old Reynolds plant is coming down

Longview Daily News, WA - Jul 20, 2005 - 09:54:01 pm PDT

By Courtney Sherwood

In the months after Terry Williams was laid off, he felt as though his life was slowly being dismantled.

He'd given more than two decades of his life to the smelter when, in the spring of 2001, he and 925 other former aluminum workers were sent home.

Four years later, Williams, who now works for Weyerhaeuser, and hundreds of his former co-workers are back on their feet, though many will never earn as much as they did before the shutdown. Others were less fortunate. Many have lost their homes, or moved away.

After sitting idle for four years, the old Reynolds Metals Plant also is moving on. The smelter -- renamed Longview Aluminum months before it closed -- is being torn apart, dismantled like the lives of the men and women who once worked there.

Once the buildings are gutted, eight Chinook Ventures employees will work at the 500-acre site, importing and processing lime.

In hard hats and safety masks, crews are cutting apart the electric buses once used to separate aluminum from oxygen. Sparks fly as torch-weilding crews tear the smelter apart, and the air glows orange.

Williams, 45, remembers a different glow.

As a crane operator, his job was to move molten aluminum.

"The metal would come in 8,000 to 12,000 pound crucibles, heated to between 13,000 and 14,000 degrees," Williams remembers. "We would dump it into the holding furnaces to cast it into ingots."

Those ingots -- weighing as much as 15 tons apiece -- were shipped by rail to extruding plants, where they would be shaped into their final form.

Williams, a tall, tan man with a deep voice and a mop of scruffy blond hair, knew the ins and outs of Reynolds Metals. He hoped to follow in his fathers footsteps, retiring after 30 years.

Then, one day, that wasn't an option any more.

"It ruined my life, my dream," he said. "I was counting on retiring young and enjoying my life. Now I had to take money out of my 401(k) to make the payment on my house.

"But you can only feel sorry for yourself for so long."

Determined to move on, Williams signed up for computer classes at LCC

Before he finished the program, he learned about an opening at Weyerhaeuser. He applied,

"As soon as I started at Weyerhaeuser, I knew I would never be back at Longview Aluminum," Williams said. "I lost all trust in the place."

"Life moves on, but a lot of the people we worked with didn't," said Terry Gillihan, 46, another former crane operator for Reynolds, who is also now working at Weyerhaeuser.

When he first found work, Gillihan saw former colleagues struggling and he was sometimes ashamed to tell them what he was doing, he said.

Now, more and more people are finding jobs, moving on, he said.

"There is life after Reynolds," said Gillihan, who still looks back fondly on his days at the smelter.

"To me it was an ideal job," Gillihan said. "It was what my dad had done, and I enjoyed it. I made fairly good money. The people -- most of them -- were great."

Now Gillihan and Williams say they're earning 40 percent less than they did, and both have postponed plans for retirement.

They've moved on, both men say, but that doesn't mean they aren't bitter.

"Every time I go to the coast, up the hill into Rainier, I always look over at the place, at the smokestacks," Williams said. "It's depressing knowing it's being torn down to the ground."

Alcan Kitimat workers see pay deal, avert strike

Metro Toronto, Canada Sunday, July 24, 2005 12:36:52 AM ET

TORONTO (Reuters) - Workers at Alcan Inc's Kitimat aluminum smelter in British Columbia reached a three-year tentative deal that will avert a strike scheduled for midnight on Saturday, the Canadian Auto Workers said.

The CAW said in a statement on Saturday that union members would vote on the deal on Tuesday. It said the agreement also covered workers at the Kemano power plant in northwestern British Columbia.

It said the agreement covered 1,300 CAW workers and included "major breakthroughs" on pay and benefits. "Because a tentative agreement has been reached, strike action scheduled for midnight Saturday, July 23rd has been canceled," the statement said.

Alcan's Web site says the smelter has an annual capacity of 272,000 metric tons.

Montreal-based Alcan has been exporting electricity from the Kemano plant to the United States, prompting anger from Kitimat city officials who say the company should use all the power for the smelter in order to keep employment levels high in the northern coastal town.

(c) Reuters 2005. All rights reserved

Alumina result 'to stay in line'

Melbourne Herald Sun, Australia 25jul05

MINING firm Alumina Ltd's net profit for the first half of 2005 would be in line with the first half of 2004, the company said today

The company previously said in April that its outlook for the first half of 2005 was for an improved profit result compared to the same period in 2004, excluding the profit on the sale of the specialty chemicals business. The company said alumina production at its Alcoa World Alumina and Chemicals (AWAC) joint venture was flat in the first half of 2005 compared to the previous year and sales volumes in the first half were lower than expected. The maintenance overhaul for the Anglesea power station extended for longer than planned, with a consequent increase in aluminium smelting costs which will not recur in the second half, the company said.

The Anglesea power station overhaul reduced Alumina's net profit for the first half by $9 million.

"Alumina Ltd advises that, after adjusting for the maintenance overhaul at Anglesea, the previous guidance for the full year result provided at the 2005 annual general meeting and 2004 annual results release continues to provide shareholders with a reasonable basis for estimating Alumina's earnings for the full year," the company said in a statement.

Alumina has not given a specific monetary target for earnings for any part of 2004/05.

AWAC sold Alcoa Specialty Chemicals for about $US342 million ($443 million) in March last year.

Alumina Ltd, which has a 40 per cent stake in the AWAC joint venture, posted a net profit of $322.1 million in the 2003/04 financial year.

It reported a $167.5 million net profit for the six months to June 30, 2004.

Alcan opens new alumina R&D facility in Australia

ArriveNet (press release), CO Monday, July 25, 2005

Distribution Source : Canada NewsWire

BRISBANE, Australia, July 26 /CNW Telbec/ - Alcan Inc. (NYSE, TSX: AL) announced today the opening of its new alumina research and development (R&D) facility in Brisbane, Australia. The purpose-built Queensland Research and Development Centre (QRDC) will develop new technologies and enhance existing alumina production processes to improve productivity, environmental performance and employee safety.

"The QRDC further cements Alcan's leading position in alumina technology research," said Jacynthe Côté, President and Chief Executive Officer, Alcan Bauxite and Alumina. "Combined with Alcan's existing Bauxite and Alumina R&D facility in Canada, the QRDC places the Company in a unique position to provide innovative technology for the global alumina industry," she added.

Located at the Queensland Centre for Advanced Technologies (QCAT), a joint venture between the Commonwealth Scientific and Industrial Research Organisation (CSIRO) and the Queensland Government, the QRDC was officially opened by the Honourable Ian Macfarlane MP, Federal Minister for Industry, Tourism and Resources and Michael Choi MP, Member for Capalaba, who was representing the Honourable Tony McGrady MP, Queensland Minister for State Development and Innovation.

"Construction of the AU$2.4 million purpose-built R&D facility was jointly funded by the Australian and Queensland governments. QRDC will directly employ world-class chemists, metallurgists and chemical engineers, joining more than 3,500 people employed at Alcan operations in Australia - including more than 725 Queenslanders in Brisbane," said Richard Yank, President of Pacific Operations, Alcan Bauxite and Alumina, at the centre's opening.

Alcan's interests in Australia include the Gove alumina refinery in the Northern Territory, which is undergoing an AU$2 billion expansion, a 41.4 percent shareholding in Queensland Alumina Limited (QAL), a 51.5 percent shareholding in the Tomago aluminium smelter in New South Wales, bauxite reserves in the Northern Territory and North Queensland as well as a planned production facility in Adelaide, South Australia for Stelvin wine screw caps. For further information, please visit www.alcan.com.au .

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

Media Contact: David Sutherland (Brisbane), + 61 7 3218 3576, Mobile: + 61 (0)419 741 477, david.sutherland@alcan.com; Anik Michaud (Montreal), (514) 848-8151, media.relations@alcan.com; Investor Contact: Corey Copeland, (514) 848-8368, investor.relations@alcan.com To request a free copy of this organization's annual report, please go to http://www.newswire.ca and click on reports@cnw.

Lanzhou, Datang team up to build power plants

The Standard, Hong Kong July 27, 2005

Gladys Tang

Lanzhou Aluminum, the country's second-largest listed aluminum producer, has teamed up with Datang International Power Generation to spend 4.39 billion yuan (HK$4.21 billion) on power plants to supply electricity for smelters.

Gansu-based Lanzhou Aluminum, 28 percent-owned by the industry leader Aluminum Corporation of China (Chalco), plans to build three generating units with installed capacity of 300 megawatts each for its own use. Lanzhou Aluminum, with annual production capacity of 165,000 tonnes, will hold 51 percent while Datang will own 49 percent. The project has obtained approval from the National Development and Reform Commission.

``The approval is ... to lower the cost [of aluminum producers], increase competitiveness of the products and reduce the pressure on power grids,'' the NDRC said on its Web site.

In general, power and alumina each accounts for 40 percent of total aluminum manufacturing costs. Prices of coal, a major material to produce power, rose 15 percent in the first half for Chalco.

The Lanzhou project is the second electricity project designated to a specific aluminum producer after the one granted in December 2004 to Shanxi Aluminum, another Chalco unit.

NDRC spokesman Cao Yushu said Tuesday that rapid aluminum production growth in recent years may cause a slowdown on demand as oversupply of the metal has been gradually rising. There were 1.2 million tonnes of unused aluminum capacity in the first five months, with 39 out of 125 aluminum producers having stopped production. The average profit of the industry fell 77 percent, while 55 factories recorded losses, Cao said.

Lanzhou Aluminum earlier told analysts that excessive electricity generated by the three new power plants will be sold to power grid companies.

Construction of the first generating unit will start by the end of this year, while the remaining two are expected to begin construction by 2007.

Apart from building its own power plants, Lanzhou Aluminum plans to almost double its annual production capacity by next year, its management said earlier.gladys.tang@singtaonewscorp.com

Rssn aluminum producer gets controlling stake in Montenegro plant

ITAR-TASS, Russia 27.07.2005, 19.35

BELGRADE, July 27 (Itar-Tass) - Russia’s major non-ferrous metals producer, OAO RUSAL, has obtained the controlling stake of an aluminum plant in the Montenegrin capital Podgorica, Montenegro’s Deputy Prime Minister Branimir Gvozdenovic told correspondents.

Under an agreement that was signed in Podgorica Wednesday, RUSAL obtained a 65% stake for 48.5 million euros. It is also expected to invest 55 million euros in development of the plant and 22 million euros in the protection of environment in Montenegro.

Igor Itskov, a spokesman for RUSAL said: "We reached many compromise solutions at the talks and signed a document that lays a good basis for developing the plant."

One of the things the sides agreed on is RUSAL’s consent to refrain from cutting jobs at the plant in the twelve months following the date of signing, although by number of jobs will eventually be slashed by 600 by the year 2008.

Alcan and Canadian Auto Workers Local 2301 sign new three year labour agreement in Kitimat

CNW Telbec (Communiqués de presse), Canada July 27, 2005

MONTREAL, July 27 /CNW Telbec/ - Alcan Inc. (NYSE, TSX: AL) announced today that its Kitimat, British Columbia smelter's hourly workers have ratified a new three-year labour agreement with the Company. Members of the Canadian Auto Workers (CAW) Local 2301 voted in favour of the new agreement yesterday.

"I am very pleased with the outcome of the ratification vote. The new contract will allow Alcan and the union to continue to focus together on improving the performance and safety results at the smelter," said Cynthia Carroll, President and Chief Executive Officer, Alcan Primary Metal Group.

Reflecting on the general overall negotiating climate, Paul Henning, Alcan's Director of Operations for British Columbia said, "The climate this year was positive, and with the professionalism of both the CAW and Alcan negotiating teams this welcome agreement has been achieved."

Commodity prices to fall

Metals Place, UK Bloomberg Jul 27, 2005

Commodity prices may fall as much as 49 per cent during the next two years, led by alumina and cobalt, as miners increase supply, according to a poll of brokerages and research companies by Australia's Access Economics.

Of 20 metals and minerals analysed, only ilmenite is likely to rise between now and June 2007, and the rest would fall, said Canberra-based Access Economics, which polled 11 analysts from firms including Citigroup and Deutsche Bank.

BHP Billiton, Rio Tinto Group and Anglo American plan to spend $20.9 billion over the next three years on expansion after prices of copper and iron ore rose to a record. The Reuters-CRB Futures Index, which tracks commodities such as oil, copper and soybeans, in March rose to its highest since 1980 as China's economic growth fuelled consumption.

"The fundamentals now seem to point to modestly weakening commodity demand growth and rather more importantly for prices, strengthening supply growth," said Access Economics.

"The consensus forecast is therefore for prices to fall for most commodities between now and mid-2007."

Demand may slow because of weaker economic expansion in Europe, Japan and South America, the report says.

The price of alumina, a semi-finished material used to make aluminium, will lead declines with a 49 per cent plunge to $221.08 a tonne in the next two years, according to the average estimate from the Access poll.

The price of nickel, used to make stainless steel, may drop 34.6 per cent to $10,768.37 a tonne. Copper, used to make pipes and wires, may drop 31.4 per cent to $2326.75 a ton. Oil may fall 23.4 per cent to $40.72 a barrel.

Ilmenite, a titanium dioxide mineral used to whiten paints and textiles, may rise 3.7 per cent. The price of uranium may have the smallest decline, falling 1.8 per cent to June 2007.

Most 2007 metals and minerals prices will still be as much as 50 per cent higher than their long-term average, suggesting further declines, Access says. Long-term oil prices may average $35.94 a barrel, the survey shows.

Commodity demand will likely stay higher, or in a so-called "super-cycle" because of China's emergence as an industrial giant, says the report. China is the world's largest consumer of iron ore, steel and copper.

Rain Calcining to buy mega US firm

Business Standard, India July 28, 2005

Kausik Datta & Nimesh Shah / Mumbai

Rain Calcining has reached an advanced stage of talks with an American calcining giant for acquisition. The US company has over four times the production capacity of the Hyderabad-based calcining company. Rain Calcining has a capacity to manufacture of 300,000 tonne per annum of calcined petroleum coke — a high purity carbon used in the electrolytic smelting process that produces aluminium.

Sources close to the deal said it would be a leveraged buyout and the acquisition cost could be in the region of about $100 million. They added that the acquisition would help the company to be one of the largest calcining players in the world. If market sources are to be believed, the company on which Rain Calcining has set its eyes on is the New York-based Great Lakes Carbon.

Technically, a leveraged buyout means taking over a company using a significant amount of borrowed money, usually 70 per cent or more of the total purchase price.

Rain Calcining managing director N Jagan Mohan Reddy was not available for comments. Paresh Chawla, vice-president, strategy and planning, said the company had not signed any deal with any American company thus far.

Officials of Great Lakes Corbon could not be contacted.

"The company is looking at various options to expand its business in and outside the country. We intend to expand business in the US, Europe and China, " Chawla said.

Rain Calcining has recently signed a joint venture to set up a manufacturing company in Kuwait with a capacity of 350,000 tonne a year. Alsagar, a Kuwait-based firm, would pick up a 76 per cent stake in the venture. Rain Calcining and an US firm, Oxbow, would pick up a 12 per cent stake each in the venture. Rain Calcining would invest $ 5.5 million towards the equity of the joint venture.

Rain Calcining recorded a net profit of Rs 12 crore in the last financial year over total sales of Rs 364.25 crore.

NALCO sells 30,000 tonnes of alumina

Reuters India, India Fri Jul 29, 2005 8:47 PM IST

BOMBAY (Reuters) - India's state-run National Aluminium Company Ltd. awarded on Friday a 30,000-tonne alumina export tender to an international trading firm at $453 a tonne, which traders said was higher than market expectations.

Prices were on a free on board basis and the alumina would be shipped in mid-August, said an official of National Aluminium (NALCO), India's second-largest aluminium maker. He declined to be identified.

Traders said the company had received about nine offers in the range of $419-$453 a tonne, but most bids were between $430 and $435. The highest offer was given by a Hong Kong-based firm.

"An offer of around $435 was a respectable price and every body was in that range. But one company had a much better offer," said a trader with a global trading firm. "Either they have short positions or they see the market totally differently."

The final destination of the alumina was not known, but traders said smelters in China were paying higher prices for imports as they rush to secure their main raw material before the government scraps a preferential tax policy.

On Friday, spot alumina in China was trading at between $440 and $455 a tonne, including freight and insurance costs to Chinese ports, against $430 to $440 last week, traders said.

Freight and insurance costs for shipping alumina to China from India are about $25 a tonne.

China is widely expected over the coming weeks to end a tax break for imports of alumina, a white powder smelters turn into aluminium for use in auto making, packaging and construction.

As a result, smelters have been racing to secure imports ahead of time, pushing up prices and, in some cases, taking a hit on profits, traders said.

China imported 660,810 tonnes of alumina in June, up 26.8 percent from May.

NALCO is in the midst of raising its aluminium-smelting capacity to 460,000 tonnes a year from 345,000 tonnes, refining to 2.1 million tonnes from 1.575 million and bauxite mining to 6.3 million tonnes from 4.8 million.

© Reuters 2005. All Rights Reserved.

SUAL Group raised production of primary aluminium for the first half of 2005

Russia Journal, Russia - July 29, 2005 Posted: 15:21 Moscow time (11:21 GMT)

MOSCOW — SUAL Group raised production of primary aluminium for the first half of 2005 up to 517.8 thousand tones, up 12.8 percent from the same period last year.

The total volume of bauxite output for the first half of 2005 made up 2.47 million tones, up 0.7 percent from an accounting period in 2004.

The rolled metal and semi-products production for the first half of 2005 widened 14.4 percent to reach 43.8 thousand tones.

The volume of consumer goods output came to 1.84 thousand tones, down 0.6 percent.

SUAL Group is a fully vertically integrated aluminium company that ranks amongst the world's top ten aluminium producers. It comprises 19 businesses that are located in nine Russian regions and are involved in the production of bauxite, alumina, primary aluminium, silicon, semi-finished and finished aluminium products. The Group's revenue for the year ended 31 December 2003 was USD 1.7 billion. It has some 62,000 employees.

Annually, SUAL Group mines some 4.4 million tonnes of bauxite, refines more than 2 million tonnes of alumina, and produces some 890,000 tonnes of primary aluminium. It also produces more than 50,000 tonnes of silicon per annum, as well as a range of aluminium-fabricated products (including metal structures, foil, cable, cookware etc).

The Siberian-Urals Aluminium Company (SUAL) was formed in 1996 by a merger between the Irkutsk and Ural Aluminium smelters. At that time, SUAL Group incorporated only nine aluminium enterprises. Since then, SUAL has grown through a series of acquisitions that have improved its operating efficiency, while ensuring it produces sufficient raw materials to meet the Group's evolving production needs.

SUAL Holding, the management company for SUAL Group, was established in September 2000 to improve co-ordination between its businesses, shape its long-term development strategy and apply a unified investment policy.

In 2002, SUAL Group began consolidating its results from Nadvoitsy Aluminium and from SevZapProm, including the Volkhov and Volgograd Aluminium Smelters and the Pikalevo Alumina Refinery.

SUAL Group is actively upgrading its businesses. The value of its investment programme for 2004 is more than USD 115 million, which covered modernisation of the Group's alumina and aluminium operations and development of the company's production capacity. The Group has reconstructed its cable plants and operations engaged in production of semi- and finished products. As part of its modernisation programme, SUAL Group has identified as priorities the reduction of emissions and improvements to its environmental impact.

Within the Group's investment project portfolio is Komi Aluminium. The project foresees the development, construction and operation of a modern bauxite, alumina and aluminium complex in the Komi Republic, that will be based on the Middle Timan Bauxite deposit, the largest such resource in Eurasia. The design capacity of the complex is 6.0 million tonnes of bauxite, 1.4 million tonnes of alumina and 300,000-500,000 tonnes of primary aluminium per annum. Realisation of the Komi project will considerably reduce the dependency of Russia's aluminium industry on external raw material supplies.