AluNews - June 2005

Alcan ordered to submit documents in probe

Seattle Post Intelligencer, WA 01-Jun-2005

THE ASSOCIATED PRESS

NEW YORK -- Alcan Inc. has received an order from a Canadian federal court to produce information on the sale and supply of aluminum fluoride.

The Canadian aluminum maker reported the order - which the company received May 25 from the Competition Bureau Canada - in a filing Wednesday with the Securities and Exchange Commission.

Alcan is in the process of providing the requested information, and other aluminum fluoride producers have received similar requests, the filing said.

Alcoa Inc. said last week its Canadian unit received such an order.

Alcoa, a Pittsburgh-based aluminum maker, also was asked for information from U.S. and Australian regulators regarding possible anticompetitive practices and has said it is cooperating in the investigations.

Aluminum fluoride is used in the aluminum smelting process.

Massive power plant to take shape soon

Borneo Bulletin, Brunei Darussalam 02-Jun-2005

By Ignatius Stephen

A massive power plant, which is the Sultanate's biggest infrastructure project so far this year, is to come up soon.

It is the planned major electrical generating complex in the Tutong District, which might cost close to $200 million, to provide Brunei with sufficient power for years to come. Work is to start in about a month's time at Bukit Tunggal.

A leading Japanese construction company, Marubeni Corporation, together with General Electric, has been awarded the contract, earmarked initially at $165 million.

Marubeni will do the civil works while GE will provide the gas turbines. A local consulting firm, Baharuddin & Associates, has been engaged to oversee the project.

The huge project and other about-to-begin development schemes - including the Parliament Building, Radio Television Brunei and a major water project - are expected to employ a sizeable labour force, both local and foreign.

It is estimated that more than 2,000 foreign workers will be needed. They are likely to come from Thailand, Indonesia and Bangladesh.

That will inject some life into the local retail trade, which is currently in the doldrums particularly after the personal loan squeeze that was imposed recently.

The giant power project will continue to provide Brunei with sufficient electricity to kickstart planned developments like the aluminum-smelting plant in Lumut and other schemes aimed at economic diversification.

As it stands, natural gas is able to provide cheap electricity, which should be a boon to local industries. Household consumers too could benefit, as Brunei has one of the lowest rates in the world.

Alcoa, steelworker negotiations fizzle

Contra Costa Times, CA Thu, Jun. 02, 2005

Associated Press

PITTSBURGH - An arbitrator will decide whether 9,000 aluminum workers will get raises due to an impasse in talks between aluminum giant Alcoa Inc. and the United Steelworkers of America, the company said Thursday.

After nearly two weeks of negotiations, the Pittsburgh-based company and union couldn't agree Wednesday night on provisions covering the final year of the current five-year pact covering workers at 15 U.S. plants, Alcoa spokesman Kevin Lowery said. The final year of the deal, which expires in May 2006, did not specify economic terms, he said.

The Steelworkers are seeking a 2.5 percent pay increase in the last year of the contract, while Alcoa said wages should remain as they are because workers covered by the union aren't paying for their health care.

Steelworkers spokesman John Duray declined comment late Thursday, saying he wasn't familiar with the details of the negotiations.

Both sides will present their offers to an arbitrator at the end of next month, the company said.

Alcoa and the Alcoa Foundation are jointly sponsoring "Russia!,"

Fort Worth Star Telegram, TX 02-Jun-2005

PITTSBURGH (AP) - Alcoa and the Alcoa Foundation are jointly sponsoring "Russia!," which is being billed as the most comprehensive exhibit of Russian art ever on display.

The show will debut Sept. 16 and run through Jan. 12 at the Solomon R. Guggenheim Museum in New York City.

The art in the exhibit is from the 12th century to the present, and was selected from the State Russian Museum, the State Tretyakov Gallery, the Kremlin Museum, the state Hermitage Museum, and other collections.

Alcoa has done business in Russia since 1993, when the Pittsburgh-based aluminum maker opened Alcoa Russia, with an office in Moscow.

China OKs more smelters for direct alumina import

Reuters South Africa, South Africa Thu June 2, 2005 11:54 AM GMT+02:00

By Lucy Hornby

SHANGHAI (Reuters) - China has granted approval for about a dozen domestic aluminium smelters to directly import alumina, the raw material for the metal, officials said on Thursday, allowing them to pay less by bypassing middlemen.

But Chinese industry officials said they had not yet been notified of a widely expected decision to eliminate the tolling and processing trade, in which smelters import alumina and export the resulting aluminium tax-free.

Officials with some of the newly approved smelters said they had received notification from the Ministry of Commerce's provincial offices on Wednesday -- the day that decisions had been expected on both the tolling and processing and the import authorisations.

"A lot of companies have (tolling) contracts with foreign companies. I imagine they haven't figured out what to do about that yet," said a senior official at one smelter.

China is the second-largest consumer of aluminium, used in everything from soda cans to aircraft.

The aluminium industry has lobbied against ending the energy-intensive tolling regime. Its elimination would remove an important source of income for many smelters, and reduce supplies of primary aluminium in international markets.

But many believe the decision is inevitable. Beijing has targeted small and inefficient aluminium smelters in its efforts to preserve scarce electricity supply and cool an economy that grew by over 9 percent in the year through the first quarter.

Beijing is already restricting new permits for tolling, they said.

"It's very difficult to get," a Beijing-based trader said.

A ministry official said Beijing was still studying whether to scrap the tolling trade, but would not confirm that the additional import permits had been issued.

About a dozen smelters will join six previously approved smelters in importing as much alumina as their plants require, but they are not allowed to resell it to other companies.

The smelters will pay an 8 percent import tariff on the raw material and a 17 percent value-added tax on output, but would enjoy up to 10 percent lower costs, according to Reuters calculations, by not having to import through a third party, the officials said.

The remainder of China's alumina imports are handled by state-owned trading company Minmetals Corp. and Aluminum Corp. of China Ltd. (Chalco), which together with its parent owns stakes in many of China's largest smelters.

Alcoa to press state government for power price break

Fort Wayne Journal Gazette, IN 03-Jun-2005

DAVID DISHNEAU, Associated Press

BUCKEYSTOWN, Md. - Alcoa Inc., Maryland's biggest electricity user, said Friday it will seek state government help in limiting the cost of powering its aluminum smelting plant near Frederick after its contract with Allegheny Energy Inc. ends at the this year.

Without protection from market rates that would boost the plant's power costs by as much as 83 percent, Alcoa would have to close the complex, eliminating 639 good-paying jobs, company officials said at a news conference.

"We are in a serious situation here. We have basically between now and Dec. 31 to figure out a way to get competitive power rates, either by getting some help from our government officials to help us with this or negotiations with Allegheny," said Brian S. Dahlberg, manager of the complex known as the Eastalco Works.

Without concessions from Allegheny, which says it can't subsidize Eastalco, Dahlberg said Pittsburgh-based Alcoa will press for changes in the state's 1999 electricity deregulation law or the rules it established. At a meeting set for June 17, Alcoa will ask the state Public Service Commission, "Hey, do we have to tweak this a little bit? Is there some issue that we may need to put an interim price structure in?" Dahlberg said.

Such a change, creating a phased transition from contractually low electricity rates to higher, deregulated rates, would benefit other companies in similar straits, Dahlberg said.

"We're not asking for any special concessions or anything of that nature, except for the ability to figure out a long-term solution to this problem," he said.

Electricity deregulation in Maryland so far affects only industrial and commercial customers; residential electricity rates are still controlled by the PSC.

PSC spokeswoman Christine Nizer said a provision for phased increases would require a change in the law.

"They have the ability to shop around for other suppliers to get the best rate out there. That's essentially how the legislation reads today," she said.

Dahlberg said Alcoa is talking with several other suppliers besides Allegheny, based in Greensburg, Pa. But he said the best hope for a solution is through government intervention.

Allegheny spokesman Allen Staggers said Alcoa's proposal for a phased increase is contrary to the intention of the deregulation law.

"Eastalco doesn't need to get their supply from us. I think there are 40 suppliers that can provide nonresidential power in Maryland," Staggers said.

The plant's contract with Allegheny dates to 1994.

Alcoa said in March it would cut 2,000 jobs in its North American, European and South American operations over the next year to become more competitive. In May, it announced closings of an automotive casting plant in Hawesville, Ky., and a plastic-sheet manufacturing plant in Elyria, Ohio.

Mazda Develops World's First Steel and Aluminum Joining Technology Using Friction Heat

PRN Wire 03-Jun-2005

Hiroshima, Japan - Jun 3, 2005 (PRN): Mazda Motor Corporation has developed the world's first direct spot joining technology to join steel and aluminum. This new technology was first employed in 2003 in the development of the Mazda RX-8 sports car that used friction heat to join separate aluminum sheets. The technology has evolved, and will be used to join the trunk lid and bolt retainer for the updated and improved Mazda MX-5 sports car that is scheduled to go on sale around the world in the latter half of 2005.

Up to now, welding two different metals such as steel and aluminum has been a difficult task. However, by optimizing the rotating tool shape and joining characteristics, and by using galvanized steel on one side, joining steel and aluminum has been made possible. The process is similar to that of joining two pieces of aluminum, when a joining gun holds the parts from both sides with a welding tool. The joining tool is then made to spin while force is applied, which in turn generates frictional heat that subsequently joins the aluminum materials to the steel sheet metal. Galvanized steel helps prevent the galvanic corrosion that results from the contact of two different types of metal. Compared with conventional joining techniques such as riveting or clinching, steel and aluminum spot friction welding makes it easier to join materials that are difficult to deform, such as aluminum casting and high tensile steel. Additionally, running costs can be reduced because riveting becomes unnecessary.

This innovative technology makes it simple to join steel and aluminum, and improves the potential of coupling aluminum parts to steel in vehicle bodies, and has other applications in a wide range of industrial uses. The process contributed significantly to Mazda's vehicle weight reduction efforts during the development of the MX-5 sports car, where each gram was counted, as well as lowering costs. Mazda has applied for over twenty patents related to this technology.

NALCO explores building aluminium smelter in Gulf

Reuters India, India Fri Jun 3, 2005 08:10 AM ET

NEW DELHI (Reuters) - India's state-run National Aluminium Company Ltd. (NALCO) said on Friday it was exploring the possibility of setting up an aluminium smelter as a joint venture in a Gulf country.

"With the government approving our expansion plans, we will have surplus alumina for exports and one way to use it is through value addition," C.R. Pradhan, NALCO's chairman and managing director, told Reuters.

India's second-largest aluminium maker is in the midst of a $1-billion project to boost the capacity of its aluminium smelter at Angul in Orissa by 115,000 tonnes from 345,000 tonnes.

It is also raising alumina production capacity to 2.1 million tonnes from 1.575 million, bauxite mining to 6.3 million tonnes from 4.8 million and power generation to 1,200 megawatts from 960 MW.

"One of the options is to go to a place where we can convert alumina into aluminium. Talks are going on with some Gulf countries since power is cheap there," he said.

Nothing had been finalised so far, but the setting up of a 250,000-tonne aluminium smelter would cost about 150 billion rupees, Pradhan said.

The company was looking for a government-to-government deal and not one with a private party, he added.

The Indian government had also asked NALCO to find out if bauxite reserves in the southern state of Andhra Pradesh could be commercially exploited, he said.

"We found there is a feasibility for exploiting bauxite," he said, adding it was for the government to decide if it wanted to set up a smelter in the state.

Andhra Pradesh has the largest bauxite reserves in the country after Orissa.

© Reuters 2005. All Rights Reserved.

$1.5 billion Alba expansion is planned

Gulf Daily News, Bahrain Sunday 5th June 2005

MANAMA: A sixth Alba production line, costing up to $1.5 billion, may be approved as soon as a natural gas deal between Bahrain and Qatar takes effect. The expansion will bring aluminium production to unprecedented new heights, Alba chief executive for operations Mahmoud Al Daylami said yesterday.

"Alba products will hopefully reach new markets, particularly in the European Union, depite a six per cent tax levied on aluminium imports", he said, adding that negotiations were under way to reduce the entry fees to the EU market.

Mr Al Daylami lauded the Alba world record of the 1.2km reduction line without any Lost Time Injuries. He said the departure of several employees to other factories still under construction, would not affect Alba's output.

An amount of BD2.5 million will be spent annually on Alba training programmes, Mr Al Daylami said.

"There are also plans to increase the money allotted for housing loans to employees", he said.

"Under the scheme, 20 houses and housing loans have been granted so far, bringing the total number of houses to 380 and the number of loans to 500 totalling BD5m."

Employees will also be visiting major aluminium smelters, Mr Al Daylami said.

Top French honour for Alba chief executive

Gulf Daily News, Bahrain Sunday 5th June 2005

MANAMA: Alba chief executive Bruce Hall has been honoured by the French government for his contribution to the global aluminium industry. French Ambassador Malika Berak presented the medal of National Order of Merit to Mr Hall in a ceremony held at the French Embassy in Manama.

The French National Order of Merit is awarded for illustrious public, civilian or military service, or in the exercise of a private activity.

The award was established by Napoleon in 1802 and is given at the discretion of the French President.

"Bruce Hall has become known and respected worldwide in the aluminium industry for his outstanding management of Alba as its chief executive and for steering the company towards remarkable business achievements that have won international acclaim," said Mrs Berak.

She commended Mr Hall's success in taking Alba to the number one position in the global aluminium industry.

The recognition is also for his co-operation with French enterprises in the application of French technology.

Mr Hall retires to his native Australia at the end of this month, after four years at Alba.

"It is a great honour for me to receive such high level recognition for my work," said Mr Hall.

"It is definitely the highlight of my professional career."

He acknowledged the important role of French companies in the aluminium industry, and their leading contribution in technical expertise and products, as evidenced in Alba's Line 5 project.

Sual secures five-year US425 mln. loan at 1.7% over LIBOR.

Analytical Information Agency, Russia 06-Jun-2005

SUAL Group, one of the world's top ten aluminium producers, announced that it has secured a USD 425 million syndicated loan led by BNP Paribas, Citigroup and ING.

The secured loan facility, with an initial interest rate of 1.7 % over LIBOR has a five-year tenor with amortisation following a 24-month repayment grace period. The interest rate is the lowest for similar loans of this tenor ever syndicated for a metal and mining company in Russia.

BNP Paribas, Citigroup and ING have underwritten the deal and were joined by Deutsche Bank, SG CIB and Natexis as sub-underwriters.

Iosif Bakaleynik, Senior Vice President for Finance and CFO of SUAL Holding, said: "The loan enables SUAL to refinance its debt at significantly lower interest levels. It also reflects the company's position as a global player working according to the highest international standards and demonstrates SUAL's excellent quality of strategy and management. Our lenders have once again shown that they value a long-term and mutually beneficial relationship with SUAL".

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.

Aluminum plant in state gets boost from Airbus deal

Seattle Times, WA June 7, 2005

By NICHOLAS K. GERANIOS The Associated Press

SPOKANE — A Kaiser Aluminum plant that once seemed on the verge of closing got a major lease on life when airplane maker Airbus reached an agreement to remain a customer through 2011, Kaiser said yesterday.

France-based aircraft manufacturer Airbus will continue to buy Kaiser aluminum sheet and plate, used to make the bodies of jetliners, for at least the next six years, Kaiser said.

"Kaiser has been a supplier primarily of lightweight sheet to Airbus for many years," said Jack Hockema, president and chief executive officer of Kaiser Aluminum. "However, the new agreement represents an important piece of committed business for Kaiser."

Kaiser's Trentwood plant employs about 500 people and still is one of the largest manufacturers in Spokane. The plant also makes aluminum for Boeing, Airbus' major competitor in the jetliner business.

The Trentwood plant also has found a good market for its aluminum sheets in making armor kits for military vehicles such as Humvees in Iraq, spokesman Scott Lamb said.

Houston-based Kaiser filed for Chapter 11 protection three years ago and has been attempting to reorganize and emerge from bankruptcy protection. The company recently dumped its pension obligations on the federal government.

Kaiser declined for competitive reasons to release specifics of its Airbus deal.

Lamb said the deal includes an incremental increase in the amount of aluminum the plane maker will buy, with the most important aspect being the extension of the contract.

The company hopes to emerge from Chapter 11 by the end of this year, Lamb said.

Kaiser once employed about 1,000 people at Trentwood and 1,000 at an aluminum smelter in suburban Spokane. The smelter has been closed and sold because of high electricity prices and low demand for aluminum.

The Trentwood plant remains a key component for Kaiser's future, Lamb said.

"This kind of contract is very meaningful for that factory," Lamb said.

With the airplane business in something of a rebound, the immediate future is bright at Kaiser.

The decision is "a tremendous vote of confidence in the performance of the Trentwood, Wash., mill where these products are produced by an exceptionally skilled and dedicated work force," Hockema said.

Airbus is headquartered in Toulouse, France, and is jointly owned by the European Aeronautic Defence and Space Co. and BAE Systems.

Copyright © 2005 The Seattle Times Company

Alcoa makes $17M investment in Davenport Works plant

Quad City Times, IA 07-jun-2005

Jennifer DeWitt

Alcoa Davenport Works is one of four Alcoa rolling mills — and its only U.S. plant — that will share in a $60 million capital investment that will increase the aluminum maker's aerospace production by 50 percent, Alcoa announced today.

The Pittsburgh-based Alcoa said it will increase its heat-treated sheet and plate production over the next 18 months with the installation of new equipment and improved productivity to capture the growth expected from its aerospace customers over the next several years. At Davenport Works, Alcoa will invest $17 million in new equipment to increase aerospace production at the Riverdale, Iowa, plant, spokesman John Riches said.

"It doesn't mean any new permanent jobs. But the decision to invest here is a recognition of the hard work we've done here to reduce costs and improve efficiencies and the confidence that that work is going to continue going forward," Riches added.

In addition to Davenport Works, Alcoa announced that heat-treat expansions will take place at its mills in Kitts Green, United Kingdom; Fusina, Italy; and Belaya Kalitva, Russia. Included in Alcoa's 2005 $2.2 billion capital budget, $37 million of the $60 million investment is slated for the previously announced expansion in Belaya Kalitva.

"We have a very strong global flat-rolled products manufacturing system that places us in an enviable position to serve plate markets around the world," Helmut Wieser, Alcoa vice president and group president of Global Mill Products, said in a news release. "Not only is the aerospace market experiencing very strong growth, but the market is also changing as average plane size is increasing. Single aisle sales are very strong and have placed demands on industry capacity."

"Military and new markets such as micro-jets are also experiencing growth as well."

Alcoa said the expansion will reinforce its leading position in advanced metallic materials and structural solutions for the aerospace market. Of the aerospace alloys in use today, about 95 percent were developed by Alcoa.

Riches said the expansion is not being driven by an individual contract or customer, such as the Airbus A380 project. Davenport Works as well as other Alcoa companies were key suppliers on the historic project, which produced the world's largest passenger plane. The 555-seat superjumbo, which made its inaugural flight in late April, included about 300,000 pounds of Alcoa aluminum.

"Everybody's building a lot of planes not just Airbus," he added.

Riches said work has already begun to accommodate the new equipment, which will be installed this fall. The project will not require a building addition.

"This clearly builds on the $90 million investment we announced in 2001 and completed in 2003," he said. That project, which increased the size of the plant, was to accommodate the larger scale products required as part of the ongoing A380 project.

The latest expansion is further evidence of how the aerospace industry has rebounded from the severe downturn it took in the wake of the terrorist attacks of Sept. 11, 2001. Decreased plane orders — due to an immediate drop in air passengers as well as a troubled economy — left their mark on suppliers such as Alcoa. But since late 2003 and throughout 2004, Davenport Works has hired about 400 production workers to respond to the industry's growth, Riches said.

Earlier this year, however, the plant permanently eliminated 65 full-time salaried employees to improve the company's cost structure and competitiveness in the marketplace. Those employees will not be called back because of the heat-treat expansion, he added.

Even without plans for job creation, the $17 million investment speaks to promise for the future, according to economic development and union leaders.

"We're always pleased whenever a local employer expands or gets new equipment," said Ron Summers of the Quad-City Development Group. "It shows Alcoa is good strong employer and is going to stay here for a long time."

Brad Greve, vice president of the United Steelworkers of America Local 105, said the investment can help maintain jobs by increasing productivity and adding capacity at the plant. "The way companies are running their businesses today they want everybody to do more. The equipment we're adding … is to keep up with the demand. There's some areas we needed to improve on and I think this addresses that."

Installation of new quality assurance equipment could keep some physical testing work in-house — work that has had to be contracted out because the plant did not have the proper equipment, Greve said.

"Anytime we're putting capital money into the plant it's a good thing," he said. But he also pointed out that "They're putting money in Russia and Europe too."

Riches said the expansion does not mean Davenport Works' efforts to cut costs, improve efficiencies and remain competitive are over. "Alcoa, like any company, is going to invest those dollars where they're going to get the best return."

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

Rain Calcining signs O&M pact with PCIC

India Infoline.com, India 6/7/2005 10:18:39 AM IST

Rain Calcining Ltd. on Tuesday said that, it has signed the Operation & Maintenance (O&M) Agreement with PCIC and also the Shareholders Agreement with the consortium members.

It has also said that, with reference to the earlier information regarding the investment by Rain Calcining Ltd in a new green field calciner project being developed and implemented by 'Petroleum Coke Industries Company' (PCIC) in Kuwait in consortium with a group of leading Kuwaiti companies.

Al-Mal and A H Al-Sagar and also the company's foreign collaborator, Oxbow Carbon & Minerals, LLC, USA. This region has long been sought after by the calcining industry for expansion due to its access to exceptional quality raw material (Green Petroleum Coke) and also with the fast expanding aluminum production in the region.

The construction rights for the Kuwait Calciner have been awarded to PCIC through a bid process administered by Kuwait Petroleum Corporation (KPC). The concession period is for 22 years. KPC will provide the entire raw material required for the calciner at an indexed price during the concession period. Upon completion, the Kuwait calciner will have a capacity of 350,000 MTPA.

The company will have 11.5% equity stake in PCIC. The Company along with Oxbow will have the exclusive Operating & Maintenance contract and also the marketing contract for the Finished Product, Calcined Petroleum Coke (CPC). The construction is expected to begin in the 3rd Quarter of 2005 and will be completed in 16 months.

Residents plan smelter protest

Trinidad & Tobago Express, Trinidad and Tobago Thursday, June 9th 2005

Anna-Lisa Paul alpaul@trinidadexpress.com

ENVIRONMENTALIST Professor Julian Kenny believes the people of Chatham in South Trinidad are being deceived by politicians who intend to seize their land and hand it over to a private commercial company for the construction of an aluminium smelter plant.

Speaking at a press conference yesterday at the Banking, Insurance and General Workers Union (BIGWU) Port of Spain head office, Kenny said it was time for residents of the south-western peninsula to protect their homes and land from the clutches of American conglomerate Alcoa (Aluminium Company of America).

Alcoa has already established an aluminium smelter plant at Union Village, Claxton Bay and is proposing to establish a second plant at Chatham-a move which residents are up in arms against.

As a result of this, Kenny, along with other environmentalists, residents and concerned citizens will be staging a protest at Woodford Square on June 22, to voice their concerns.

Kenny explained that residents were entitled to the right and enjoyment of property by law, but that this determined move to establish the smelter plant had resulted in an unacceptable situation.

He said concerns by residents were not being adequately addressed by representatives of Alcoa and the National Energy Corporation (NEC).

Among the concerns outlined were the relocation of at least 93 families; destruction of prime agricultural lands and potential eco-tourism parks; wetland forests; villages; and numerous health hazards.

Kenny said while Cabinet was responsible for running the country, they were accountable to the Parliament, but added: "We seem to have a rubber stamp Parliament that is just walked over and Cabinet is doing whatever it feels like doing ...regardless of the law."

He accused past and present governments of not honouring the Town and Country Planning Law, which requires the respective minister to present a national physical development plan and to review it every five years.

He said the law was being ignored and that the Planning and Development Land Bill 2000 had reverted absolute power to the minister to decide what could and could not done-a move he believed was very dangerous to the country's development.

Declaring that he welcomed the advent of industrialisation, Kenny said it had to be done in conjunction with the concerns of the residents in the vicinity of the proposed sites, and that a balance had to be achieved.

Echoing Kenny's concerns, Cedros environmentalist Dr Raphael Sebastien said: "The Cedros peninsula is under attack from Alcoa."

He claimed that research had shown that smelter plants "leave a trail of disaster wherever they have been set up."

Interviewed in march this year by the Express, Randy Overbey, Alcoa's President of Primary Metals Development and the man leading the Trinidad smelter team in Chatham and Cap de Ville, said the company was taking note of the concerns

"I believe that the broader issues of industrial development, taking care of the environment and needs of people who may be affected by such a project can coexist. That is the outcome we would like in Chatham," he said.

Alcoa sees aluminum/alumina deficits continuing

Reuters 08 Jun, 2005

NEW YORK (Reuters) - Alcoa Inc. (AA.N: Quote, Profile, Research) sees the market for aluminum remaining in deficit for at least two years, a senior executive of the world's No. 1 aluminum producer said on Wednesday at the Reuters Mining Summit.

Bernt Reitan, group president for global primary products, also said Alcoa expects the deficit in alumina -- the raw material for aluminum -- to be even longer but possibly move into surplus after 2007.

Reitan told the summit, held at Reuters New York headquarters, that Alcoa's view was there would be a 500,000-ton deficit in aluminum this year and a 100,000-tondeficit in 2006. For 2007, the Pittsburgh-based company sees a possible balance in the market.

For alumina, Reitan said he expected the market to be short 400,000 tons this year, 200,000 tonnes in 2006 and 100,000 tons the following year, with "a surplus beyond '07, possibly." (News from the Reuters Mining Summit will be delivered throughout the day Wednesday and Thursday to Reuters terminals and to the Reuters.com Web site, http://reuters.com)

© Reuters 2005. All Rights Reserved.

Alcoa eyes China's growing alumina needs

Reuters Wed Jun 8, 2005 06:35 PM ET

NEW YORK (Reuters) - Alcoa Inc. (AA.N: Quote, Profile, Research) aims to expand its role as a major supplier of alumina and aluminum to China, where rapid industrial growth left the country short of the metal last year, a senior company executive said on Wednesday.

The world's largest aluminum producer also expects shortly to conclude a joint venture with Aluminum Corp. of China Ltd. to operate a refinery and smelter in the south of the country, Bernt Reitan, Alcoa's group president for global primary products, said at the Reuters Mining Summit in New York.

"We have made progress and we expect it to happen," Reitan said about the proposed 50:50 joint venture at Pingguo, without specifying an exact date.

China, second only to the United States as an aluminum consumer, imported more metal -- including aluminum contained in scrap -- than it exported last year, Reitan said.

"Their total metal balance was net short by half a million tonnes," he said at the summit, held in Reuters New York office.

China's economy expanded 9.4 percent in the year through the first quarter and its aluminum consumption is seen growing more than 10 percent annually over the next three years, analysts said.

"China will need a lot of metal, and more alumina, even though they will expand their own production system," he said.

Alumina, a white powder, is refined from bauxite ore and fed into smelters to produce aluminum metal. China imports about half of the alumina it needs, and Aluminum Corp. supplies almost all the rest.

"We will supply a lot of alumina to China. But volumes? That depends," said Reitan, adding Alcoa would negotiate new contracts with consumers in China.

Alcoa has a 30-year deal to supply 400,000 tonnes of alumina a year to Minmetals Corp., China's largest metals trading firm and one of only two Chinese companies -- Aluminum Corp. is the other -- permitted to import and re-sell the raw material.

Speaking about the joint venture, Reitan said Alcoa and its Chinese partner were aiming to increase annual refining capacity at Pingguo from 900,000 tonnes and smelting capacity from 135,000 tonnes currently.

He said power was the main problem facing the energy-intensive aluminum industry in China.

"The country has a lot of challenges to cope with the demand for power," he said. "There are regional markets: in some cases you will see a surplus, others are short. They need to develop the grid to connect it."

China's government has also introduced a series of measures, including higher power fees, lending curbs and export taxes, to rein in expansion in its aluminum sector.

Reitan said he expected more measures in the future.

"They want to keep the metal they produce in the country, because they need it," he said.

(News from the Reuters Mining Summit will be delivered throughout the day Wednesday and Thursday to Reuters terminals and to the Reuters.com Web site, http://www.reuters.com)

© Reuters 2005. All Rights Reserved.

Alcan sees opportunity for transportation growth

Reuters Wed Jun 8, 2005 03:31 PM ET

NEW YORK (Reuters) - General Motors Corp. (GM.N: Quote, Profile, Research) may be cutting staff and shutting plants, but Alcan Inc. (AL.TO: Quote, Profile, Research) -- the world's No. 2 aluminum producer -- sees nothing but opportunity in the automotive industry.

"The transportation sector continues to be the largest-growing sector in terms of aluminum demand," Alcan interim Chief Financial Officer Michael Hanley said at the Reuters Mining Summit in New York.

The Montreal-based company, which supplies aluminum for planes, cars, and packaging, sees demand driven by growth in airline passengers and higher aluminum use in cars, he said.

"Within transportation, if you look over the next five years to 10 years, auto and aerospace will be the fastest growing segments," Hanley said.

That trend is especially important for automobile demand, because even if total production drops slightly, it will be offset by steel replacement, especially in Europe, he said.

He noted that aluminum use in cars has doubled since 1980.

In aerospace, he sees passenger traffic growing 5 percent and freight traffic up 6 percent annually over the next 20 years.

In fact, Hanley said one of the key reasons that the company sought out its $5.1 billion acquisition of Pechiney was to gain entry to that market.

The acquisition made Alcan the top aluminum supplier to Airbus, whose new double-decker carrier -- the A380 -- contains about three times more aluminum than its previous widebody, Hanley said.

Hanley said the company is looking at growth from both its current businesses and acquisitions, but noted that the aerospace sector is fairly limited in acquisition opportunities.

© Reuters 2005. All Rights Reserved.

Alcan to Target Global Solution to Climate Change at July 2005 G8 Summit

Yahoo News (press release) Thursday June 9, 4:00 pm ET

MONTREAL, June 9 /PRNewswire-FirstCall/ - Alcan Inc. (NYSE, TSX: AL - News News) joins 23 international businesses today in calling for urgent global action to combat climate change, with its President and Chief Executive Officer, Travis Engen, endorsing a package of recommendations presented to the United Kingdom's Prime Minister, the Right Honourable Tony Blair MP, who also holds the G8 Presidency for 2005. Mr. Blair will be presenting his recommendations regarding climate change at the G8 Summit in July.

"It is an honour to develop recommendations on an issue the Prime Minister regards as a personal priority for his Presidency of the G8. Climate change affects businesses, governments, and consumers alike and these are the issues we have addressed through the G8 Climate Change Roundtable," said Mr Engen. "Alcan has a proud track-record in the reduction of greenhouse gas emissions, achieved through significant investment in the management of our process emissions and energy efficiency improvements at our global operations, and my aim was to bring that knowledge and experience to the table," he added.

In January, Mr. Blair recruited a group of international business leaders to form the G8 Climate Change Roundtable at the World Economic Forum in Davos, Switzerland. The Prime Minister asked the group to share with him their perspectives and expertise ahead of July's G8 Summit.

Following a series of expert working group meetings, the participating business leaders reconvened today to present their recommendations to the Prime Minister.

The group has identified a Framework for Action that will allow G8 governments and the private sector to collectively force a change in the pace and scale of climate change mitigation. The main recommendations presented to the Prime Minister today are:

- Establish a market-based framework extending to 2030, which is

flexible, global in scope and sets clearly defined limits on greenhouse

gas emissions and which also addresses climate change as part of an

overall sustainable development agenda

- Promote low carbon technologies

- Provide support for low carbon economic development in emerging markets

- Improve performance metrics within and across national borders

- Create a practical 'toolkit' and common framework for the

implementation of effective procurement and supply chain strategies

The G8 Summit will run from July 6-8 at the Gleneagles Hotel in Perthshire, Scotland.

PennDOT pins hopes on Bauxsol

Centre Daily Times, PA 09 Jun 2005

By Mike Joseph, mjoseph@centredaily.com

HARRISBURG -- State transportation officials have categorized the million cubic yards of pyrite into two types, by location: two-thirds, mostly in spoil piles, that might be moved; and the rest, embedded in structured fill areas, that they hope to be able to treat in place.

It all depends on Bauxsol.

"Right now, the prognosis is that it's going to be a combination of leaving some of the material in place, treating it with Bauxsol, and moving some of it to an engineered landfill," PennDOT Deputy Secretary Gary Hoffman told lawmakers at a state House Transportation Committee hearing.

The 300,000 cubic yards that PennDOT will try to counteract in place includes fill above and between the already paved lanes of Interstate 99 at Skytop and a massive fill area ready for I-99 pavement between U.S. Route 322 and state Route 550.

Whether any of the rest of the pyrite in massive spoil piles can be left in place and treated with Bauxsol depends on how effectively Bauxsol injections permeate the massive spoil piles, and whether it can encapsulate the pyrite.

"It's not a question in my mind about whether the Bauxsol will work," Hoffman said. "It's how do we get the Bauxsol where it needs to be.

"If we can get the Bauxsol in intimate contact with the pyrite, it is the solution, and if we can make sure that we're treating all the effluent, it is the solution."

Bauxsol is a highly alkaline derivative of aluminum manufacturing. The "red mud" waste left over from smelting is washed with sea water, lowering the pH from 13 to 9 and rendering the material capable of absorbing metals, Kevin Kline, PennDOT district executive, told the lawmakers.

Transportation Secretary Allen Biehler added that the product forms a film around pyrite crystals, and the "million-dollar effort" this summer will be to find out how long it lasts.

"The question is, is that film going to hold up over time?" Biehler said. "It's not a snap judgment. That's why it's going to take us a bit of effort here to make sure that we try to reach the best conclusion. We need to think about the lifetime of this material -- that we've properly mitigated it."

Biehler added: "We're talking significant -- tens of millions of dollars of investment -- so we need to do it right."

Rio calls for Gladstone shake-up

Brisbane Courier Mail, Australia 10jun05

Richard Owen

MINING giant Rio Tinto has called for a complete management overhaul at the Port of Gladstone to stop the state-run business ramping up coal expansion at the expense of alumina.

In a hard-hitting submission to the Federal Parliament's Standing Committee on Transport and Regional Services, Rio Tinto also pressed for legislative reform to ban pesky applications for third party access to privately owned and integrated infrastructure in areas such as West Australia's iron ore-rich Pilbara.

Subsidiary Comalco Aluminium has just invested $1.5 billion in a new alumina refinery in Gladstone, which has been designed to triple capacity in stages to 4.5 million tonnes, and owns 36.8 per cent of the Queensland Alumina refinery now revisiting a $1 billion expansion.

However, there is concern that rapid expansion of Gladstone's upstream coal terminal will put severe pressure on the tide-sensitive shipping channel Comalco uses to ship in bauxite from Weipa and ship out alumina.

Comalco project services manager Greg Rashford told the committee's inaugural public hearing on infrastructure integration in Gladstone yesterday there was potential for the state-owned Central Queensland Port Authority to favour coal at the expense of less lucrative commodities such as alumina while pursuing rapid expansion.

"I guess the issue for a non-coal trade through Gladstone is . . . would there ever be a situation where the authority might be in a situation to pick winners with its coal responsibilities, versus its responsibility for overall efficiency," he said.

Rio Tinto argues that an independent authority "without a vested interest" in any one commodity should manage the port, eliminating the possibility of development being skewed in favour of coal to maximise royalty revenues flowing into Treasury coffers.

"A port authority should be established to manage the general port infrastructure with legal ownership remaining in the public sector; with board representation from governments and principal users or user groups; and, capital raising through normal commercial channels with recoveries through user charges," the submission says.

"Variations are possible, but the key requirement is that the general port infrastructure be run as a stand-alone operation on a commercial basis, not as a revenue generating entity for government."

The Queensland Government is already spending $230 million to take annual capacity at Gladstone's RG Tanna terminal to 62 million tonnes and a further 20 million tonne expansion at nearby Wiggins Island to the west is also under consideration.

While vertically integrated infrastructure under private ownership had proved the most efficient and responsive model, Rio Tinto argues that collective industry ownership – as in the case of Port Waratah Coal Services in NSW – was preferable to the outcome at the privatised Dalrymple Bay Coal Terminal near Mackay where the lease was sold to an outsider.

"Given its benefits, it is unfortunate that such an arrangement was precluded by the terms of the tender for the lease of DBCT," the submission notes.

Rio Tinto also urges the Federal Government to avoid a "one size fits all approach" and recognise the importance of "tuning" policy responses to specific situations.

Competition policy was "failing" to maintain Australia's export competitiveness and in some areas was "threatening" to erode it.

"It is time to consider alternative approaches."

Argonne research could lead to cooler aluminum production

PhysOrg.com, VA June 10, 2005

Researchers at the U.S. Department of Energy's Argonne National Laboratory and NorandaFalconbridge, Inc. are developing a way to produce aluminum at significantly reduced temperatures. The collaborative research effort could eventually lead to significant reductions in the energy costs and emissions of

The four-year, $2.25-million joint project is one phase of a long-term effort to improve on the massive electrolytic cells in which aluminum is produced on an industrial scale. In these cells, alumina, dissolved in a molten electrolyte, is stripped of its oxygen atoms by a strong electrical current and converted into the metallic aluminum that makes up consumer products like soda cans and aircraft wings.

John Hryn, the Argonne metallurgist leading the project, said the process usually requires temperatures of 960 degrees C. At that temperature, few materials can withstand the oxygen produced electrolytically inside the cell. Sacrificial carbon anodes have been used in aluminum production since the process was invented in 1886. As aluminum is formed, the carbon anode is consumed by oxygen, and the resulting carbon dioxide bubbles out of the cell.

For many years, researchers have sought a new, non-consumable anode to replace carbon anodes. Hryn thinks the answer may lie in modifying the cell electrolyte to operate at lower temperatures. Several years ago, he and his colleagues discovered an electrolyte composition that can dissolve alumina and produce aluminum metal at 700 degrees C, more than 250 degrees cooler than current electrolytes.

"The lower operating temperature opens up the possibility for new anode materials," he said.

Using standard aluminum-bronze anodes in bench-scale tests at Argonne, Hryn and colleagues demonstrated that the new electrolysis cells operated for 100 hours without any significant corrosion at the anode. Also, the cell produces oxygen as a byproduct instead of carbon dioxide and perfluorocarbon, two kinds of greenhouse gas produced in carbon anode electrolytic cells.

However, Hryn cautions that the largest hurdles still remain. The system must be tested at successively larger scales, each involving higher electrical currents and running for longer periods of time.

"At larger scales, we start to see the materials issues emerge," Hryn said. "Things that seem to work well on the bench tend to fail at larger scales, primarily because you are working at these extreme conditions. Our advantage is that we are operating 250 degrees lower than everybody else, and that's a big difference for materials."

The cooperative research and development agreement between Argonne and Noranda formalizes a joint effort that has existed for the past four years. Hryn said it is important for Argonne to have an industrial partner at this stage of the project.

"We get their input on what is important to them right at this stage," he said, "so as we get larger, we're addressing exactly their concerns. Working with industry early on is really the key to success."

If the new electrolytic cells are successful and replace the old cells and their consumable carbon anodes, the benefits to the aluminum industry and the environment will be tremendous. The Department of Energy, in conjunction with members of the aluminum industry, released an "Inert Anode Roadmap" six years ago that projected energy efficiency increases of 25 percent, operating cost reductions of 10 percent, and greenhouse gas emissions reductions of 7 million metric tons of carbon equivalent in the United States. Also, aluminum producers using nonconsumable anode technology will not have to purchase carbon anodes or maintain facilities that produce them.

"There's a huge incentive to get rid of all that," Hryn said.

NorandaFalconbridge, Inc. is a leading mining and metals company. It employs 16,000 people at its operations and offices in 18 countries and is listed on the New York Stock Exchange (NRD) and the Toronto Stock Exchange (NRD.LV).

Source: Argonne National Laboratory

RUSAL goal to be top aluminum maker on track

Reuters Thu Jun 9, 2005 08:44 PM ET

By Carole Vaporean

NEW YORK (Reuters) - Russia's RUSAL, the No. 3 primary aluminum producer, has said it aims to be the world's No. 1, and the head of its American arm told Reuters' Mining Summit on Thursday that the company's plans are on track.

Talking about the company's stated 10-year strategy to double aluminum output from about 2.5 million to up to 5 million tons, Bruce Markowitz, president of RUSAL American Corp., said, "The plan is going very well."

The executive said a big part of the plan relies on expanding raw material to feed its large smelter system.

RUSAL needs about 5.0 million tons of alumina to produce 2.5 million tons of aluminum, which means doubling aluminum output will require a huge expansion of raw material supplies.

Its acquisition of a 20 percent stake in Australia's Queensland Alumina (QAL) was a big piece of that puzzle, and it continues to look at projects in and outside of Russia.

"It will help feed our raw material needs at our main smelters and we intend to build on that, to either increase and expand the bauxite in our present system or to develop and grow mining or alumina assets globally," he said.

The challenge, he added, is finding assets to acquire.

"It's a matter of timing. You don't want to go out and overpay for something just to acquire it. You want to buy something because you can add your knowledge and value to grow it from where it is today," Markowitz said.

Because raw material deposits are most plentiful in South America, Australia and Africa, those are regions RUSAL is most focused on for expanding or acquiring potential supply.

"There are huge deposits in Guinea, for example, that are open to development, but it's a matter of investment," he said.

Markowitz said RUSAL continues to actively look in the former Yugoslavian region, India and elsewhere for smelters.

In the U.S., RUSAL has met its target to double revenues in each of the last three years and generates $1.0 billion, or 20 percent, of RUSAL's $5.4 billion annual gross revenues.

"Now we're at the stage where we're looking more at the value-added growth from volume growth. Our goal is to increase the percentage of sales to the end user directly," he said.

Instead of giving them raw primary aluminum, RUSAL is making specialized alloy for wheel production, for example, and supplying it to its customers longer-term.

"We're trying to focus on those niches that will give us a distinct advantage in the marketplace, so the customer can rely on us and we can rely on them," the U.S. executive said.

He pointed out that generic primary aluminum can be sourced from smelters all over the world.

"But to make it just to the customers' requirement makes you a more valuable partner. We're looking for partnership."

In China, the company employs a similar, but modified, strategy. The aluminum producer still seeks end-user customers, like foil mills, sheet mills, and extrusion plants, with whom it can develop long-term business.

But that business tends to center around customers with whom it already maintains a relationship elsewhere.

Referring, for example, to U.S. automotive companies that have set up manufacturing plants in the country, the executive said, "We have customers within in China."

Among Chinese buyers, he said RUSAL has a few key customers, "where we have business month in, month out, year in, year out."

But, Markowitz emphasized that while fluctuations in China's demand for metal can be dramatic from one week to the next, RUSAL's aim is to develop more a more steady customer base, where every month they need metal and every month the company will supply it from its growing smelter system.

"We have customers within China. They are in the extrusion business, they are in the foil business. We're supplying many different types of business in the value-added side. We're supplying an American company at its Chinese plant," he said.

In addition to specialization, RUSAL sees its energy source as a clear advantage as it seeks the No. 1 spot.

"In the Russian aluminum market there are hydroelectric dams in close proximity to aluminum smelters with tremendous availability of energy to feed smelters," he said.

"I see more growth opportunities than hurdles within Russia, than other areas of the world like China that are suffering from an energy limitation," said Markowitz.

© Reuters 2005. All Rights Reserved.

Abdulah: Reform could lead to lack of rights

Trinidad & Tobago Express, Trinidad and Tobago - Jun 10, 2005

Phoolo Danny-Maharaj South Bureau

SERIOUS concerns have been raised about government's proposals for legislative reform which could lead to citizens' rights being cut off.

The concerns about amendments to the Freedom of Information Act and Judicial Review Act were raised at a general council meeting in San Fernando of the Federation of Independent Trade Unions and Non-Government Organisations (FITUN), according to its president David Abdulah, opposes the proposed amendments and is calling on government to withdraw them.

FITUN further opposes the anti-terrorist legislation, now before the Senate. "We believe that some of the provisions of this Bill are offensive and can have the effect of abrogating certain fundamental rights of citizens including the right to freedom of conscience, the right of trade unions to take protest action and the altering of the present system of detention prior to being charged and brought before the courts."

The union called for the government to have the proposed amendments submitted to a Joint Select Committee of Parliament and have public consultation on the issues.

FITUN is also against the planned amendment to the Environment Management Act, since it said, the change was likely to remove the professional and independent process of approvals for projects from the EMA and place that power directly in the hands of the Minister responsible for the environment. "This would result in a national disaster and will be subject to political decision-making rather than the independent and professional criteria that now exists with the EMA," said Abdulah.

FITUN believes that the move by government was a deliberate "to facilitate approvals for some of the contentious projects including the two aluminum smelters being talked about. "Abdulah said the present system for Town and Country Planning approvals was also subject to ministerial decision-making and "this has resulted in many projects that ought never to have been implemented being given the green light."

He said the amendments to the EM Act will result in the removal of the process of public consultation from the requirements of the Environmental Impact Assessment (EIA) which is vital for any CEC applications that may have significant environmental impact. "the public consultation process is essential if there is to be any transparency in decisions pertaining to the CEC's for these projects", Abdulah added.

Alcoa Adds Aging Furnace for Plate at Davenport

33Metalproducing June 12, 2005

Uniform heating process eliminates hot/cold sides

As repored by Seco/Warwick Corp., Alcoa Inc. has acquired a new aging oven to process 230,000-lb loads of aluminum plate at its Davenport (IA) Works. The turnkey project will be completed this fall.

This will be the second Seco/Warwick aging furnace at Davenport; the first unit has been operating since 1999.

Seco/Warwick , Meadville, PA, explains that its aging process "produces tight uniformity by utilizing reversing airflow to eliminate the formation of ‘hot side’ and a ‘cold side‘ on the load. By automatically reversing the airflow at regular intervals, the entire load is brought up to temperature at a more nearly uniform rate. Thus, the amount of temperature spread within the load is reduced, and the resulting metallurgical properties are more uniform."

The furnace’s electric heating system is divided into six equal zones of PID temperature control. Each zone will incorporate Seco/Warwick’s bayonet resistance heating electric elements.

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

Rising Energy Costs May Leave Eastalco Plant in Dark

Washington Post, DC Sunday, June 12, 2005; Page C05

By Nelson Hernandez Washington Post Staff Writer

The old economy of fiery metal twitches to life in the hands of Clint Adams, a 20-year-old relief operator in the Eastalco aluminum smelting plant in Frederick County, as he guides what must be the world's largest wind chime.

More than a dozen 2,000-pound aluminum cylinders, known as billets, hang vertically overhead, suspended from nooses made of steel cable. Using a joystick, the West Virginian gracefully guides the billets from their position near one of the plant's furnaces to a long, broad table in a maneuver known as "stripping the pit."

Like most of the operations at this 400-acre plant hidden in the quiet farmlands west of Frederick, stripping the pit requires finesse combined with a lot of power. Although an ordinary American uses 10 megawatts of electricity in a year, the 35-year-old plant burns 350 megawatts an hour -- largely because electricity is a key ingredient in the electrochemical process of making aluminum. This makes the Eastalco Aluminum Co. plant, which produces 8 percent of the country's aluminum, one of the largest consumers of electricity in the state.

With Eastalco's electricity expenses set to increase by $78 million, or 80 percent, at the end of this year, the plant's manager is now warning that the plant will close unless it is able to agree on a new contract with its energy supplier, Allegheny Power. The current contract expires Dec. 31. Spokesmen for Allegheny and Alcoa, the aluminum giant that owns the Eastalco plant, say negotiations between the companies are at an impasse.

At a recent news conference, the plant's manager, Brian S. Dahlberg, said that unless market conditions change or the government steps in to resolve the deadlock, "there is a 100 percent chance we will shut down" at the end of the year. The 639 employees of the plant, mostly from Frederick County and Western Maryland, along with more than 100 from West Virginia, would be laid off.

The rising electricity costs, he said, were a result of deregulation of electricity in Maryland. Although competition among electricity providers is supposed to allow customers to shop around for the best price, in practice the cost of generating electricity has gone up because natural gas and coal, which fire many power plants, are much more expensive than they were five years ago -- in 2000, a megawatt hour cost $32.72; now it is $44.34. Complicating matters further is the fact that Allegheny Energy is split into two branches: Allegheny Power, which controls electricity transmission, and Allegheny Energy Supply, which generates it.

"Fundamentally, things in the state of Maryland have changed with deregulation," Allegheny spokesman Allen Staggers said. "We would have to go out to the marketplace and buy power at market prices, to sell to Eastalco at lower than market price. It would be a loss to us."

Staggers suggested the plant could seek another, less expensive provider of electricity, and Dahlberg said he had investigated that possibility. But he still hoped the state government would take action.

"We're going to try to get government officials to understand what we provide," Dahlberg said. "We want to save this industry. We want to save these jobs."

Although Frederick County commissioners have sent a letter to Gov. Robert L. Ehrlich Jr. (R) asking for action by the state's Public Service Commission, it appears that the government's role will be restricted by the very laws it has passed since Maryland began to deregulate utilities in 1999.

"The best deal has got to be a deal negotiated between the two companies," said Aris Melissaratos, Maryland's secretary of business and economic development. "It's a global market, and there's not much a state government can do to interfere with those kind of commodity pricing factors."

State Sen. David R. Brinkley (R-Frederick), a member of the Senate's special commission on electric utility deregulation, said Alcoa and other companies had pressed for deregulation in the first place and now would have to ride out its effects.

"The market is the market," Brinkley said. "I don't see the state getting materially involved at all. We want to do anything we can to make sure that [Alcoa] can maintain their presence, be a good, successful member of the community, but at the same time they and Allegheny have to work out whatever their issues are."

Christine Nizer, the spokeswoman for the Public Service Commission, said the commission would meet with representatives of Alcoa and Allegheny on Friday. "Obviously we are required to comply with the restrictions in the law," Nizer said. "The commission is looking into whether there is anything we can do within those constraints."

Back at the plant, the pace of operations is such that the workers have little time to reflect on their situation. On a recent day in a small section of the plant, workers in flame-retardant blue shirts and hard hats moved briskly through their routine -- pouring molten metal, casting aluminum ingots and driving materials from place to place -- as Eric Phillips, the cast house manager, and Jack Dayley, the health and safety manager, kept a close eye on activities. Phillips said the plant processes about 1.25 million pounds of aluminum a day.

"How many beer cans is that?" Dayley asked his colleague.

"That's a lot of beer cans, Jack," Phillips replied.

As a salaried employee with Alcoa, Phillips does not have to worry about losing his job. But he is troubled about his work crew.

There is high turnover among workers in the cast house -- the work is hard and unrelenting, in a hot, metallic-smelling plant -- but Clint Adams, master of stripping the pit, says he is here for the long haul.

"I love it," Adams said. "I'd like to make a career here."

Corus wins 5-yr supply contract from Airbus worth 550 mln usd

AFX News Limited 06.13.2005, 08:47 AM

AMSTERDAM (AFX) - Corus Group PLC said it has won a supply contract from Airbus Industrie worth 550 mln usd over five years.

The revenues from the contract are spread equally over the period 2007-11, the Anglo-Dutch metals company said in a statement.

Corus Aluminium Walzprodukte in Koblenz will supply 20,000 tonnes per year of aluminium plate and wide sheet for parts of aircraft fuselage and wings to Airbus locations in Germany, France, UK and Spain, plus worldwide Airbus subcontractors.

The aluminium is to be used for all airplanes built by Airbus including commercial and military aircrafts as well as helicopters built by Eurocopter.

The contract was signed today at the Paris Air Show.

amsterdam@afxnews.com

Alcan to Slash Jobs at Plants in Germany, Switzerland (Update3)

Bloomberg June 14, 2005

Alcan Inc., the world's second- largest aluminum maker, will fire about 410 workers at plants in Switzerland and Germany that make so-called engineered products, such auto parts, to reduce costs.

The extrusion activities at plants in Singen, Germany, and Sierre, Switzerland, will be integrated and the automotive structures and composite activities at Singen will be restructured, Montreal-based Alcan said today in a statement. About 300 jobs will be cut in Singen, and 110 positions will be eliminated in Sierre.

Profit margins in the engineered-products segment have declined five straight quarters on increasing expenses for fuel and energy. The segment had first-quarter pretax profit of $115 million on $1.55 billion in sales, a profit margin of 7.4 percent. That's down from 7.8 percent in the year-earlier quarter.

Chief Executive Travis Engen has been reducing the workforce and closing plants since the $6.8 billion purchase of Pechiney SA in February 2004. In November, two food-packaging plants and a mill in Europe were closed, eliminating 520 jobs. Alcan has 70,000 employees.

Shares of Alcan dropped 8 cents to $30.04 in New York Stock Exchange composite trading. They have fallen 15 percent in the past year. On the Toronto Stock Exchange, Alcan fell 8 cents to C$37.62, down 23 percent from a year ago.

Alcoa Inc. is the world's biggest aluminum maker.

To contact the reporter on this story:

Darrell Hassler in Chicago at dhassler@bloomberg.net.

Kaiser, Steelworkers agree on contract

Spokesman-Review June 14, 2005

John Stucke Staff writer

Kaiser Aluminum and the United Steelworkers of America have agreed to a new five-year contract.

It's far from the acrimony of the last labor pact, reached only after the company locked out Steelworkers for 20 months in one of the toughest union-company fights in recent memory.

The new contract, announced today, covers about 800 union members at four plants, including more than 500 Steelworkers at the Trentwood rolling mill.

Wage increases, signing bonuses, a profit-sharing clause and benefits are included.

Kaiser plans to emerge from Chapter 11 bankruptcy protection later this year.

In the past five years, Kaiser has sold its Mead and Tacoma smelters in Washington state, along with its international holdings that included bauxite mines, alumina refineries and other aluminum smelters.

When the bankruptcy is complete, the newly reorganized Kaiser will not be owned by controversial financier Charles Hurwitz, who controls the majority of Kaiser stock through his closely held Maxxam Corp.

Alcan Senior Executive says aluminum industry is and must continue to be world leader in environmental sustainability

mysan.de (Pressemitteilung), Germany June 14, 2005

MONTREAL, June 14 /PRNewswire-FirstCall/ -- Speaking at the CRU’s 10th World Aluminum Conference in Reykjavik, Iceland today, Alcan Inc.’s (NYSE, TSX: AL) Executive Vice President, Richard B. Evans, called on the aluminum industry to proactively solidify its ongoing efforts as a model for sustainability.

In his address to delegates and experts from the aluminum industry, Mr. Evans said, "At Alcan, we believe that our industry has the science and the will to establish global targets that can favourably impact the environment, including the reduction of greenhouse gas emissions."

"The industry has already achieved much in this area and it must continue to work with governments and other stakeholders to establish worldwide sector- specific targets, so that we can manage better the economic, environmental, and social impact of Kyoto and subsequent regulatory frameworks," he added.

In his review of the industry, Mr. Evans identified three key themes: - Aluminum is "green" and has a unique relative competitive advantage over many other materials. As one of the world’s most recyclable materials, aluminum’s net benefit to the planet is a positive one. - Aluminum may be better positioned than it has been in several decades relative to both steel and polymer resins. - Alcan continues to believe that China will return to balance in the medium term and will likely go into deficit in the longer term as it makes rational economic choices as part of the global economy.

In his speech, Mr. Evans reiterated that to ensure long term economic and environmental sustainability, Alcan continues to invest in its global leadership position and is looking beyond technology sales to integrated solutions that offer clients and partners an unsurpassed value proposal.

"Pechiney AP technology is responsible for 80 percent of the western world’s newly installed smelting capacity over the last 15 years. We will continue to build upon this foundation to deliver cutting-edge technology solutions that promise both economic and technology leadership in the new century," Evans said.

Mr. Evans’ speech as well as the presentation will be made available on the Company’s website at http://www.alcan.com/ .

Export tariff for secondary aluminum alloy to be removed

www.chinaview.cn 2005-06-14 19:25:28

BEIJING, June 14 (Xinhuanet) -- The Ministry of Finance will soon announce the removal the export tariff for secondary aluminum alloy, the First Finance Daily reported Tuesday.

The announcement is pending on the State Council approval, which will abolish the five-percent export tariff beginning July 1, Ruan Haifeng, a senior official of the China Non-Ferrous Metal Processing Industry Association, was quoted as saying.

Describing the decision as "a blessing" for the second aluminum alloy industry, Ruan said domestic companies have stagnated after China abolished the export tax rebate for secondary aluminum alloy and simultaneously raised the export tariff earlier this year.

With more than 2,000 companies engaged in the production of secondary aluminum alloy, the sector generated a combined export revenue of four billion yuan (about 483.68 million yuan) last year.

"As the export profits continue to shrink this year, some companies have even stopped selling their products abroad," Ruan said.

The association proposed the reconsideration of the tariff issue to the State Development and Reform Commission, the Ministry of Finance and the General Administration of Customs.

"Given that the energy cost of secondary aluminum alloy is only five percent of electrolytic aluminum, we hoped the government would give more concern of the fledging industry," Ruan said.

Alcoa wins long-term supply contract from Airbus

newratings.com Wednesday, June 15, 2005 2:37:57 PM ET

NEW YORK, June 15 (newratings.com) – Alcoa Inc (AA.NYS), the world's largest aluminum producer, has received a long-term supply contract worth $2 billion in revenues from European aircraft maker, Airbus SA.

The US-based aluminum giant said in a statement on Wednesday that it has signed a deal to supply aluminum sheet, plate and other extrusion products to Airbus through December 2011. The aluminum products supplied by Alcoa will be used in Airbus' super-jumbo A380F cargo plane and A350 wide-body jets, the statement added. Alcoa said that the deal is worth about $2 billion in revenues over the course of the agreement. The two companies have not disclosed the financial terms of the deal.

Alcoa Forecasts Aluminum to be Greenhouse Gas Neutral by 2017; First Industry in the World to Establish Claim

CCNMatthews - Jun 15, 2005

NEW YORK

Alcoa (NYSE:AA) announced today that its researchers have developed a global sustainability model that forecasts the use of additional recycled metal and the use of aluminum in the transportation market will make aluminum greenhouse gas (GHG) neutral by 2017 - making the aluminum industry the first in the world that can establish the claim.

"Alcoa is helping to lead the global aluminum industry in making aluminum climate neutral," said Randall M. Overbey, president, Alcoa Primary Metals Development. "Given the great attributes of aluminum - it is easy to recycle, strong and yet lightweight - the industry will be able to reach a climate neutral state by 2017. There's no other industry that we are aware of today that can make this claim, which will help solve global warming."

Reaching a climate neutral state means that the global warming impacts of aluminum production will be fully offset by the amount of carbon dioxide emissions saved by its use in the transportation industry.

"As Alcoa leads this change, we will share our learnings with others as part of our climate change initiatives so that we can leverage the knowledge, much like we have done with our safety programs," Overbey said.

Today's announcement came at The Conference Board's 2005 Business and Sustainability Conference at the Waldorf Astoria Hotel in New York City. As the world's leading business membership organization, The Conference Board is comprised of a global network of nearly 2,000 enterprises in 61 countries.

"The high strength-to-weight ratio of aluminum allows car manufacturers to produce safe, exciting vehicles that their consumers want and that are environmentally friendly," Overbey said. "Aluminum is truly part of the solution to produce vehicles that provide maximum safety - both environmentally and in the design."

Alcoa has maintained a leadership position on climate change by meeting and maintaining its 2010 goal of reducing GHG emissions by 25 percent from 1990 levels. In his presentation, "Sustainability: What More Should Companies Do?", Overbey announced numerous other leadership steps to which Alcoa has committed including:

-- commissioning the engineering to expand the company's North America capacity and flexibility for recycling aluminum;

-- investing in more efficient turbines for the company's hydroelectric systems and pursuing more green power technologies;

-- working in various forums with customers, competitors, non-governmental organizations and others to further advance the use of aluminum in vehicles; and

-- launching campaigns to educate employees, communities and civic leaders on the benefits of recycling, the positive influence of aluminum in vehicles and the dangers of global warming. The campaigns will include steps that all stakeholders can take to positively impact these issues.

The full text of Overbey's presentation is available at www.alcoa.com/overbey.

Cleanup expected to revive metals site

Ace Cos. expected to invest $1.2 million, create 26 jobs.

By JEFF ROMIG Tribune Staff Writer

ST. JOSEPH -- Within the next two weeks, county officials expect the Michigan Department of Environmental Quality to authorize a $390,000 grant to fund the cleanup of the former Tobian Metals property on Davis Drive in Benton Harbor.

Ace Cos. has purchased the property and plans to invest $1.2 million and create 26 jobs by reactivating a secondary aluminum smelter at the site.

"Members of the Brownfield Authority are anxiously awaiting notification on the grant," said Dan Fette of the Berrien County Economic Development Department.

Fette said the $390,000 grant will cover the total cost to remove between 6,000 and 7,000 cubic yards of aluminum dross, a byproduct of the aluminum smelting process.

"Assuming no unforeseen roadblocks, we anticipate undertaking the cleanup by mid-July," said Fette, who said if that timetable stays true, the minority-owned Ace Cos. could begin production by late August.

The Berrien County Brownfield Authority became involved with the project when the Benton Harbor Brownfield Authority asked for assistance with the site's cleanup.

"Because (the BHBA) has undertaken so many different projects in the past six months, it was unlikely that they would be able to handle an additional project of this nature," Fette said. "This is where we can help, by picking up the overflow work so multiple projects can occur simultaneously."

Fette said the county's only jurisdiction is to remediate the property.

Once the process concludes, he said the BHBA will be able to reap any benefits such as additional tax incremental financing mechanisms or other brownfield incentives.

County Administrator Bill Wolf said the role the county took in the Ace project -- which included a partnership with the city of Benton Harbor, Benton Township, the state of Michigan, Michigan Economic Development, the Michigan Department of Environmental Quality, Michigan Works and Cornerstone Alliance -- played to its strengths.

"The brownfield side makes sense to use because that's what we do, and we do it very well," Wolf said. "To reuse a site like that and get that site productive -- that's a great thing for Benton Harbor and Berrien County."

Staff writer Jeff Romig: jromig@sbtinfo.com

Russia raises alumina output 0.3%

Interfax.ru, Russia Jun 15 2005 5:08PM

MOSCOW. June 15 (Interfax) - Russia raised alumina production 0.3% year-on-year in January-May to 1.36 million tonnes, Aluminii, an engineering consultancy, told Interfax, quoting adjusted figures for the period.

Aluminii said that on June 14 it gave inaccurate figures for the period. The inaccurate figures suggested that Russian alumina production grew 11.7% year-on-year to 1.519 million tonnes in January-May and that CIS producers Russia, Ukraine and Kazakhstan turned out 2.806 million tonnes of alumina, up 7.4%.

According to the corrected figures, CIS producers Russia, Ukraine and Kazakhstan produced 2.651 million tonnes of alumina in the five months, up 1.4% year-on-year.

Ukraine increased production 2.2% to 668,850 tonnes. Ukraine's Nikolayev (Mikolayiv) refinery increased alumina production 2.2% to 557,800 tonnes and the Zaporizhiya aluminum plant increased it 2.4% to 111,050 tonnes.

Kazakhstan raised alumina production at its Pavlodar refinery 3.3% to 622,151 tonnes in the five months.

Aluminii did not give a figure for the Ganja alumina plant in Azerbaijan.

Comalco starts $5b power deal talks

Stuff.co.nz, New Zealand 16 June 2005

By JAMES WEIR

Comalco and Meridian Energy have begun negotiating the country's biggest power contract, expected to be worth more than $5 billion over 20 years.

The negotiations cover the price Comalco will pay the state-owned power company after 2012.

Faced with a 45 per cent rise in power costs in the past five years, Comalco is holding out the threat of generating 600 megawatts of its own power if it cannot get an acceptable deal.

Comalco said yesterday that it could produce its own power from a coal-fired station at less than 7 cents a kilowatt hour, from 2012, effectively capping the price Meridian might get.

The present contract is understood to be for about 4.7c a unit, which would be about a third of the power cost to the average home.

The contract is a closely guarded secret and involves a complex formula for calculating the final cost.

Comalco's Tiwai Point aluminium smelter at Bluff uses about 15 per cent of all New Zealand's power, mainly from the large Manapouri hydro power station.

The smelter's rising power costs are a serious issue, says Comalco New Zealand chief operating officer Tom Campbell.

"An escalation at a similar rate into the future would be very serious indeed," he said.

Power makes up 40 per cent of the $2 billion plant's cost of producing aluminium.

A Companies Office report shows revenues and expenses for the company that buys power for the smelter, Comalco Power, were both $273 million last year, 16 per cent higher than the year before.

Mr Campbell said the contract was worth over 20 years "$5 billion plus, and every dot and comma (in negotiations) is $1 million each".

AdvertisementAdvertisementComalco hoped to see good progress on negotiations by the end of the year, but if not, would look at options such as its own power station.

Meridian said yesterday that it was hoped to have a deal signed by early to mid-2006.

The negotiations involve small teams from both sides, but that is expected to grow.

Meridian's shareholding ministers, Finance Minister Michael Cullen and State-Owned Enterprises Minister Paul Swain, would need to approve the deal, a Meridian spokesman said.

Mr Campbell said Comalco did not expect "any favours" - the deal needed to be commercially acceptable on both sides.

It is believed that Comalco has had extremely cheap power during the past 33 years, but Mr Campbell said that last year the smelter paid 10 per cent more than the average wholesale price.

The average price last year was relatively low at 4c a unit.

"It might have been cheap power in the 1970s but that has long since disappeared," he said.

The smelter now buys 90 per cent of its power on contract, with the final price adjusted depending on wholesale power prices in the previous year.

That meant the price paid for power by the smelter last year reflected the high prices in 2003 when hydro lake levels were low and wholesale prices were high.

The balance of 10 per cent of the plant's power is bought on the wholesale spot market.

Comalco is already concerned that falling hydro lake levels this year could lead to wholesale spot prices rising again, which could force it to cut production.

Mr Campbell said if an acceptable deal could not be negotiated for prices after 2012, Comalco could set up a 600 megawatt power plant next to the smelter, using black coal from the West Coast and Australia.

A second option would be a power station built next to a Southland lignite coalmine. Wind power is also being considered.

Modern coal-fired stations could produce power at "under 7c" a kilowatt hour by 2012, equal to 5.5c to 6c a unit at present prices - competitive with wholesale power prices.

"A new coal-fired power station starts to look competitive," Mr Campbell said.

That price did not include carbon taxes from April 2007, which could add a further 1.5 cents a unit.

With its own power stations, the Tiwai smelter could "go on indefinitely".

"There is absolutely no reason why it could not be there for the next 20 to 25 years," Mr Campbell said.

Comalco, an offshoot of global mining giant Rio Tinto, owns 79 per cent of the smelter.

The balance is held by Sumitomo of Japan.

Hydro to Shut Aluminum Smelters, Cutting Capacity 10% (Update3)

June 16 (Bloomberg)

Norsk Hydro ASA, the world's fourth- largest aluminum producer, plans to shut two German aluminum smelters and reduce production in Norway, cutting capacity by 10 percent to lower costs.

Hydro plans to close its primary aluminum plant at Stade in Germany by the end of 2006, the Oslo-based company said today in a statement to the Oslo exchange. It will also recommend closing the Hamburger Aluminium-Werk GmbH plant in Germany, which it operates with Alcoa Inc., the world's biggest aluminum producer.

``Strong increases in electricity prices in Germany force us to take these actions,'' Jon-Harald Nilsen, Hydro's head of aluminum, said in the statement.

German electricity prices have surged to records this year, making it difficult for power-intensive industries such as aluminum smelting to make a profit. Norsk Hydro, which has been renegotiating German power contracts that expire this year, said the expected cost of electricity for the German plants would be higher than anticipated metal prices in 2006 and beyond.

Hydro's shares rose 14 kroner ($2.15), or 2.5 percent, to 569.5 kroner in Oslo. The stock has gained 19 percent this year.

The German government has begun talks with Norsk Hydro to prevent the closures, German Economy and Labor Minister Wolfgang Clement said in a statement.

``The aluminum industry is of great importance to our economy, particularly to our car industry,'' Clement said. ``Despite the competitiveness of the market we'll try to do what's possible to avert the closure of the plants.''

Plant Closures

The closure of the plants, which employ about 870 people, as well as partial closures of smelters in Hoeyanger and Aardal in Norway, will cut Hydro's annual primary metal production by about 185,000 tons from 2007, the company said.

Hydro's plans for the four units will cost almost 1 billion kroner and generate annual savings of about 800 million kroner.

``With high forward electricity prices in Germany, the only solution was to shut the plants down,'' Ulf Leinebo, a financial analyst with Oslo-based Handelsbanken Capital Markets, said in a telephone interview.

The closures are a sign Norsk Hydro is ``improving its aluminum business,'' he said. Leinebo said he was ``positively surprised'' by the costs of the closures. ``They should have shut them down earlier,'' he said.

The company also said it's working to secure the continued operation of a primary aluminum plant in Germany's North Rhine- Westphalia state.

Hydro wrote down the value of its German plants by about 2 billion kroner in the fourth quarter because of rising electricity costs and increased competition. Power typically accounts for more than a third of the cost of making aluminum. The metal is used to build aircraft, cars and beverage cans.

The company smelts aluminum in Norway, Australia, Canada, Germany and Slovakia.

To contact the reporter responsible for this story:

Bunny Nooryani in Oslo at bnooryani@bloomberg.net

Alscon Sale

AllAfrica.com, Africa June 16, 2005

Hammeed M. Bello Daily Trust (Abuja)

London report indicts Rusal for money laundering

Facts emerged yesterday indicating that the Bureau of Public Enterprises (BPE) might have concealed to bidders, a debt of N966 million incurred by the Aluminium Smelter Company (ALSCON), for the supply of gas.

The chief executive of the American company, BFI Group, Mr. Ruben Jaja, gave the indication in his presentation at the public hearing by the House of Representatives committee on privatisation probing the bidding process and the offer.

There were indications also to the effect that Rusal of Russia, the company which has purportedly concluded arrangements with the BPE for the sale of ALSCON might have been indicted over alleged money laundering charges.

Ruben Jaja of the BFIG had submitted to the public hearing that ALSCON incurred a debt of N966 million for gas supplied to it by the Nigerian Gas Company for the running of the plant.

He alleged that the BPE refused to disclose the debt in the bidding process, suggesting that it must have been part of the obstacles preventing a smooth bidding. alleged government bias against it in the bid.

"To salvage the future of Nigeria's privatisation program, BPE must be prohibited from illegal favouritism and bad-faith, fraudulent tactics in its dealings with foreign investors.

"Based on an objective review of well documented facts, there are ample grounds to conclude that a decision to hand over ALSCON to Rusal was already predetermined well in advance of the ALSCON bidding exercise. BFIG was used to legitimise the sale to Rusal, but this strategy back-fired when BFIG fully complied with all privatisation requirements and submitted technical and financial bids resulting in BFIG becoming the preferred ALSCON core investor.

The chairman of the House of Representatives Committee on Privatisation, Hon. Celestine Ughanze, gave the indication yesterday while cross examining the BPE Director General, Mrs. Irene Chigbue, on whether or not she was aware of some subsisting money laundering charges against Rusal.

Ughanze said the committee was in possession of a London workshop report which indicted Rusal of Russia over alleged money laundering offences and that the committee forwarded the report to Vice President Atiku Abubakar who is the chairman of the National Council on Privatisation (NCP), when the committee met him recently.

The BPE DG, Mrs. Irene Chigbue, however said she was not aware of the report, neither was she aware that it was forwarded to the vice president.

Ughanze further questioned her if the BPE made any efforts to contact the Nigerian High Commission in Moscow, Russia, to get more information on the abilities and credibility of Rusal before handing over ALSCON to them, she said such inquiries were not made.

Also, Mrs. Irene Chigbue responded to a question saying that she was not aware that Rusal wants to commit whatever comes its way from ALSCON to the development of its Bauxite Mining factory in Guinea.

Ukrainians aim at Rusal's aluminium deal

Mineweb, South Africa'16-JUN-05 08:00' GMT © Mineweb 1997-2004

By: John Helmer

MOSCOW (Mineweb.com) -- The first Russian businessman to lose the Ukrainian assets he acquired during the unlamented regime now replaced by President Victor Yushchenko could be Oleg Deripaska, the Moscow oligarch who controls Russian Aluminium (Rusal), one of the world's leading producers of aluminium. At stake is Rusal's umbilical cord to the Nikolaev Alumina Refinery, in the Ukrainian port city of the same name.

The Ukrainian move to cut that cord also affects the rivalry among Russian, Chinese, American, and local groups to mine bauxite in the Republic of Guinea. If the ownership of the Nikolaev refinery is unravelled, that will rebound on the Rusal-controlled Guinean bauxite mines, which have supplied Nikolaev since the Soviet period.

Sources in Kiev today told Mineweb that the Ukrainian Prosecutor-General's office has filed a high court claim accusing the former Ukrainian government of violating the law in allowing Deripaska to change the investment conditions he undertook, when he first acquired the state's 30% stake in the refinery in the year 2000, ending a bitterly contested bid for control. The latest action is not a direct attempt to invalidate the original privatization. A source close to Deripaska told Mineweb earlier this month that he was confident this would not happen. Ukrainian government officials had also said as much in public statements. However, the latest action by the prosecutors could have a similar impact if the court rules that the previous government acted unlawfully to favour the Rusal group.

Nikolaev currently produces more than 1.3 million tons of alumina per year, feeding Rusal's four Russian smelters which, altogether, produced 3.1 million tons of primary aluminium last year. Nikolaev's output comprises more than a third of Rusal's Russian smelter requirement. Without it, Rusal's pledges to build new smelters in Irkutsk and Khakassia would be difficult to achieve, if not impossible.

A Ukrainian government source, who has been close to Rusal's attempts to hang on to the refinery but change the investment requirements, told Mineweb, on condition of anonymity, that a court review of the issue, which began in 2003, is still under way. The source expressed surprise at the prosecutors' independent court action.

Asked if this had been prompted by Ukrainians seeking to recover the refinery from the Russian group, the source said "Honestly, I do not know the background for their decision. It shows their initiative." She confirmed that Deripaska had earlier agreed with Yushchenko's ministers not to put the Nikolaev refinery on the government's black list of privatization deals that are to be reviewed, possibly cancelled, or put for fresh sale.

Last year, while Leonid Kuchma was President and Victor Yanukovioch , his Prime Minister and designated successor, Rusal's Ukrainian affiliate Ukral had appeared to be in an impregnablee position, following a shift in policy at the Ukrainian Fund of State Property.

A year earlier, in June 2003, Mikhail Chechetov, Chairman of the Fund, had announced publicly that Ukral had failed to commence construction of a new aluminium smelter at Pervomaisk, in the eastern Kharkov region of the Ukraine. As this project was one of several conditions Rusal and Ukral had agreed to, when they acquired the state shareholding in the Nikolaev refinery, Chechetov claimed his agency would go to court to decide whether to reverse Rusal's acquisition of the asset.

After Deripaska had defeated the London-based Trans World group for control of the refinery in 1999, he then agreed with the government in Kiev that within two years he would expand alumina output at Nikolaev to 1.3 million tons; halt tolling operations at the plant; and start building the new 200,000-ton capacity smelter at Pervomaisk. He dragged his feet on all three. In 2004, according to Ukral's spokesman, "we are proceeding with expansion of production capacity of the plant [up to 1.3 million tons per year] at full speed, and we plan that production capacity of the plant will be increased to the agreed level in the first quarter of 2004. For the second year now, Nikolaev is working on a regular import-export basis and doesn't use tolling schemes." The promised upgrade to 1.3 million tons of output had been the subject of a negotiation with the Ukrainian government, which agreed in August of 2002 to postpone the deadline until 2004.

Chechetov had earlier said that, because the new smelter project had not started, the government in Kiev would insist on cancelling the transfer of the state's shares in Nikolaev, and reprivatize them. Then in a change of tone, Nina Burlyuk, spokesman for the Fund, announced last year: "Currently, the Nikolaev refinery is the property of Ukral, and we see no changes to be made to that. What's happening is [that] currently there is a discussion at the government level about removing the condition of building the Pervomaisk plant, because it's absolutely economically ineffective, and changing that condition to something else [requiring] equal investment."

In the past, Rusal sources have told Mineweb that energy costs in the Ukraine have been too high to make the new smelter project economically viable. Ukral, according to its spokesman, tried to negotiate a lower energy tariff regime with the government in Kiev to improve the proposed plant's commercial prospects. But when that proved impossible, Ukral said it would propose modifying the terms of the original investment agreement. Burlyuk's announcement signaled that this was the approach that senior Ukrainian government officials wanted to adopt, mollifying Deripaska ahead of the presidential election campaign.

What has now been confirmed by the Prosecutor-General's office is that Kuchma and Yanukovich had issued an order, allowing the Pervomaisk smelter plan to lapse. instead, it is now suggested that Ukral undertook to lift the capacity at Nikolaev by another 23%. The cost saving to Deripaska appears to have been at least $100 million. There is no sign of the "equal investment" proviso in the official change of agreement.

Victor Demodenko, the press spokesman for Ukral, told Mineweb: "Ukraine Aluminium [Ukral] is managing and completing all the required investment obligations." Officials at Rusal in Moscow declined to comment.

Dubal, Gearbulk in pact for world's largest liquid pitch supply vessel

Khaleej Times, United Arab Emirates 17 June 2005

BY A STAFF REPORTER

DUBAI — Dubai Aluminium Company (Dubal), globally recognised as one of the largest aluminium producers, has entered into a 10-year chartering agreement with the international shipping company Gearbulk for the world's largest liquid pitch supply vessel with 15,000 metric tonnes storage capacity.

The Dh117.53 million ($32 million) vessel, Sunbird Arrow, built by Tokushima-based Japanese shipbuilder Kanrei Shipbuilding Co Ltd., and owned by Funada Kaium Co Ltd., Japan, was floated on May 24, 2005 in Tokushima, Japan, in the presence of dignitaries and officials from Dubal, Gearbulk, the Japanese shipbuilders and the South Korean suppliers of liquid pitch.

Sunbird Arrow, the largest liquid pitch supply vessel of its kind in the world, will transport liquid pitch for Dubal which already has its own 'Dock' facilities at the Jebel Ali Port. From here the liquid pitch will then be carried safely overland, in specially designed tankers, directly to Dubal complex. The Dubal 'Dock' at Jebel Ali Port has the capacity to handle all types of shipped goods, up to a massive 1,320,000 MT of alumina and 300,000 MT of petroleum coke per year.

"This initiative is in line with the current directives given by Shaikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, UAE Minister for Finance and Industry and Chairman of Dubal, to ensure the company's long-term projects are executed effectively and as per the planned schedule. This is also part of Dubal's constant endeavor to secure long-term supplies following the completion of our expansion process," said Masood T.Al Ali, GM of supply for Dubal. Sunbird Arrow, which will have a turnaround time of 42 days, will be used exclusively by Dubal for up to 8-10 voyages a year. The vessel is custom-built especially to carry the liquid pitch which can only be transported at a temperature of 200 degrees Celsius (Centigrade). Gearbulk is one of the few globally renowned companies which have the necessary technical experience and track record to execute a project of this magnitude. The vessel also has the capacity to carry cargo up to 250 degrees C. The vessel is also part of Dubal's long-term plan to source liquid pitch supplies from other resource-rich regions. Currently, Sunbird Arrow will be used for transporting supplies from Japan and South Korea. Dubal is also eyeing supplies from China and India apart from other regions. "The agreement with Gearbulk is also part of our strategic planning to play safe in an increasingly volatile shipping market, especially in chartering vessels. At present, vessels that transport liquid pitch number only eight in the international market. These vessels have only 9,000-10,000 tonnes capacity to transport this key material for aluminium production," said Ali.

Nigeria Loses N55bn On Alscon Bid - BFI Group

AllAfrica.com, Africa - June 17, 2005

Daily Champion (Lagos)

Lagos

The President of BFIGroup, Dr. Reuben Jaja, Wednesday in Abuja said Nigeria lost over N55 billion following the BPE's termination of the ALSCON's bid won by the group.

Jaja told the House of Representatives Ad-hoc committee during a public hearing on privatisation of Aluminum Smelter Company (ALSON) that 420 million dollars would have been paid if the government had not terminated the bid.

He further said that the company had paid an initial deposit of three million dollars for the bid which they successfully won in June 2004. While giving a brief background about his interest in investing in Nigeria, Jaja recalled how President Olusegun Obasanjo addressed Nigerians abroad to come and invest in Nigeria.

"If this bid should fail, it will portray Nigeria in a bad light in internatinal arena," he stressed.

He said despite their willingness to pay twice what a Russian company, Rusal bid for "the federal government gave it to Rusal, that has no interest of Nigeria at heart."

Jaja, however, assured the committee that his group was still ready to negotiate with the Federal government and pay the 10 per cent of the bid's amount within the stipulated 15 working days.

"Mr Chairman, I am a national security asset for Nigeria. I will pursue this case to its logical conclusions even if it takes my entire resources in life," he said.

Presenting a memo to prove the alleged government bias against the BFI group, Mr. Patrick Ikwueto (SAN), insisted that the group complied with all the BPE requirements.

Ikwueto argued that Rusal, who made a conditional bid price of five million dollar with an additional 200 million dollars to be paid over 20 years was considered while BFI group that bid for 410 million dollars was now given the nod.

"Rusal and government have engaged in illegal negotiations from June 14, 2004 till date yet the government sought to disqualify BFIGroup for not concluding detailed share Sale/Purchase Agreement (SPA) negotiations over just three weeks from June 21 to July 8, 2004" he alleged. He disclosed that two court orders and legislative findings had been issued against BPE and top government functionaries which they had failed to comply with.

All other American investors, who testified submissions of Jaja and Ikwueto, warning Nigeria to abide by the international standard of bid and the consequences of BPE before the international community.

In her presentation, the BPE Director-General, Mrs Irene Chigbue, recalled that three attempts were made between 2002 and 2004 to privatise ALSCON but was not successful.

She confirmed that Rusal offered 210 million dollars under certain conditions while BFIGroup offered 410 million dollars without conditions.

Chigbue reiterated what her predecessor, Dr. Julius Bala, stated on Tuesday that BFIgroup failed to negotiate the share sale/purchase Agreement (SPA).

It had not also paid the initial 10 per cent deposit of 41 million dollars as at the close of work on July 8, 2004.

She said that the BFIgroup applied for an extension of time to pay the initial deposit and suggested the opening of an escrow account, which was rejected by the government, adding that this led to the termination of the contract by the BPE.

"At the moment, we are trying to address the issues that the privatisation of ALSCON has posed. ALSCON has been closed down since 1999. Workers are paid salaries for staying idle," she said.

She, however, said that BPE and Rusal were conducting a fresh due diligence on the company since the last one was conducted over a year ago, noting that Rusal had agreed on dredging of Imo River and obtain gas at subsidized rate. The public hearing, which began on Tuesday, was rounded off today with an assurance from the chairman of the committee, Celestine Ughanze, that the committee would look at the submissions and come out with acceptable recommendations.

Alscon: Court Orders Halt of Reps Probe

AllAfrica.com, Africa June 17, 2005

Daily Trust (Abuja) Ruby Rabiu

A Federal High Court yesterday restrained the House of Representatives from proceeding with the probe of the privatization of the Aluminium Smelter Company of Nigeria (ALSCON) or else contend with contempt of court.

Justice Steven Adah who gave the order said the House of Representative was infringing on the rights of the judiciary and should either halt the exercise or be held in contempt.

The judge who was furious, suspended hearing in the legal dispute between the Bureau of Public Enterprises (BPE) and the United States based BFI Group concerning the privatization of ALSCON.

He emphasized that he would not continue to hear the suit until the National Assembly complied with his order.

He added that the actions of the lower legislative house is an affront to the judiciary. A Federal High Court yesterday restrained the House of Representatives from proceeding with the probe of the privatization of the Aluminium Smelter Company of Nigeria (ALSCON) or else contend with contempt of court.

Justice Steven Adah who gave the order said the House of Representative was infringing on the rights of the judiciary and should either halt the exercise or be held in contempt.

The judge who was furious, suspended hearing in the legal dispute between the Bureau of Public Enterprises (BPE) and the United States based BFI Group concerning the privatization of ALSCON.

He emphasized that he would not continue to hear the suit until the National Assembly complied with his order.

He added that the actions of the lower legislative house is an affront to the judiciary.

According to him, "today is not the first day that I will frown at this; what is worrying is that despite the warnings, public hearings are still conducted in this same matter by the House of Representatives ad-hoc committee on ALSCON."

He continued, "this court and the House's committee cannot be running together. As far as this matter is in court, it can't be going to the house too.

"It is expected that the constitutional separation of powers be adhered to. This court has already assumed jurisdiction in this case. No other person should dabble into it. In an umpteenth time, the public hearing being conducted by the National Assembly on the sale of ALSCON which is a subject matter of a pending suit is an affront on this court. This is against the principle of separation of powers.

"The National Assembly is hereby restrained from continuing with the hearing pending the determination of this suit. This court is going to go on with the hearing of this case until that public hearing by the National Assembly is stopped," he stated.

Earlier, counsel to BPE, Chief Joe Gadzama (SAN), had informed the court that the National Assembly was holding a public hearing on the same matter before the court.

Gadzama said that he had written a letter to the court to inform it on the recent development.

Aluminum giants defy fears with project start

The Standard, Hong Kong June 20, 2005

Carol Chan

Construction has begun on the Guangxi Huayin alumina facility, the mainland's largest in terms of investment, despite reports that it was moving slowly because of the central government's austerity measures.

Phase one - which involves a total investment of 8.5 billion yuan (HK$7.99 billion) - is expected to commence operations in 2007 and will have an annual production capacity of 1.6 million tonnes of alumina.

Guixi Huayin Aluminum Industry Corp, the company handling the project, is 33 percent owned by China Minmetals, the country's largest metals and mineral products trader.

Aluminum Corporation of China, or Chalco, the country's dominant alumina producer, owns another 33 percent, while Guangxi Investment Group holds the remainder.

Guangxi Huayin is the largest aluminum enterprise in terms of one-off capital investment and development in the mainland sector.

It received approval from the National Development and Reform Commission last month.

Upon completion of the project, Guangxi will be the largest alumina production base in Asia.

China Minmetals' investment in Guangxi Huayin strengthens its position as the second largest enterprise in terms of capacity in the country's aluminum market.

``The establishment of Guangxi Huayin accelerates the development of Guangxi bauxite resources, and can better meet demands of the domestic market and drive the economic growth in Guangxi,'' China Minmetals president Zhou Zhongshu said.

Zhou said rich bauxite resources and stable water and power supplies made Guangxi ideal for an aluminum site.

carol.chan1@singtaonewscorp.com

Copyright 2005, The Standard, Sing Tao Newspaper Group and Global China Group.

Land grab mud on Balco

Calcutta Telegraph, India - Jun 18, 2005

R. KRISHNA DAS

Raipur, June 18: The Chhattisgarh-based Bharat Aluminium Company Limited (Balco) has come under the scanner for allegedly encroaching on 1,000 acres of prime land and cutting down thousands of trees for its expansion project.

"The company grabbed about 1,000 acres of government land besides cutting down 20,000 trees without taking permission from the agencies concerned," Nankiram Kanwar, then Chhattisgarh revenue minister, said on Thursday.

In a shuffle today, Kanwar was shifted to the agriculture ministry with additional charge of forests.

The Korba-based company has denied the charges. The land had been allotted to Balco between 1968 and 1975, the company’s chief of corporate communications, Deepak Pachpore, said in a statement released on Thursday evening.

The statement added that the subdivisional officer has investigated the felling of trees and the company is awaiting the report’s findings.

The government has ordered a high-level inquiry and the commissioner of land records has been asked to supervise the investigation.

"After getting the report, the state government will take the appropriate step. The state government will not falter even in razing the constructions done under the expansion plan," Kanwar said, before he was shifted from the ministry.

The minister also hinted at action against state administration officials for not acting on the complaint of the villagers.

The government’s action came after Kanwar last month verified a complaint lodged about six months ago by villagers that the Vedanta group company, located about 200 km from here, had encroached on government land and cut down trees worth crores of rupees.

"This is the first incident of its kind when such a huge area of land has been encroached (on) by a company," Kanwar said on Thursday. The minister said he had briefed chief minister Raman Singh on the developments.

The development is likely to come as a big jolt to the expansion plan of Balco, which was divested in 2001.

The Vedanta group, managed by London-based Anil Agrawal, acquired 51 per cent equity and management control of the company.

A Rs 5,000-crore expansion plan was charted out after a memorandum of understanding with the state government was inked. The company set itself a target of producing 3.45 metric tonnes per annum (mtpa) of aluminium.

Balco, which now produces 1 lakh mtpa, would become the largest producer of aluminium in the country after the completion of the expansion project, according to company officials.

Rusal Names Duncan Hedditch To Lead Sustainability Offensive

CSRwire.com (press release) 20-Jun-2005

(CSRwire) Moscow– RUSAL, the global aluminium producer responsible for one-tenth of the world’s output, today announced the appointment of RUSAL Australia Managing Director Duncan Hedditch to the newly created post of RUSAL Deputy General Director for Sustainability. Mr. Hedditch will lead the company’s efforts in labor safety, production efficiency and environmental sustainability.

The objective set before Duncan Hedditch and the new Sustainability Directorate is to systematize the company’s experience and streamline project development practices in the areas of industrial safety, environmental performance and production optimization to ensure long-term, systematic and sustainable development for RUSAL. To this end, the Company is committed to investing in efficient and innovative energy, production and waste management practices, as well as corporate citizenship programmes.

"I am confident that Duncan Hedditch’s broad experience of managing top-to-bottom restructuring projects will take RUSAL to a new stage in its corporate development," said RUSAL Chief Executive Officer Alexander Bulygin.

An Australian by birth, Duncan Hedditch, 51, joined RUSAL in May 2002 as Executive Director and then Managing Director at Krasnoyarsk, the second largest aluminum smelter in the world, where he successfully introduced new management methods, which not only helped enhance industrial safety, environmental performance and productivity, but created an entirely new corporate culture.

"Since 2000, RUSAL has radically improved workplace health and safety, reduced contaminant emissions by 14.5 per cent and gained international environmental management certification in all of its nine plants," said Duncan Hedditch. "The challenge is to build on these successes through synthesizing our corporate experience into unified production and management practices which will enable RUSAL to rationalize the use of financial and natural resources, as well as maximize the immense potential of our employees."

In 2004, RUSAL invested $175 million in facility modernization targeted at both increasing productivity and minimizing environmental impacts. This figure is set to increase to $350 million in 2005.

Prior to joining RUSAL Mr. Hedditch, an engineering graduate from the Royal Melbourne Institute of Technology, has held a number of influential positions across the global aluminium industry. After working in the electronics, telecommunications and mining industries in Australia and Holland, he joined Alcoa Australia in 1980. He held a series of positions in engineering, information systems and production management in both their U.S. headquarters and their Australian operations. In 1994 he joined Rio Tinto's Comalco subsidiary and held positions in engineering, marketing, and operations management in both New Zealand and Australia. He was appointed General Manager, Sales and Marketing, in 1996, and General Director of the Bell Bay Smelter in 1999.

Since 2004, Mr. Hedditch has served as Managing Director, RUSAL Australia, a role he will combine with his new Deputy General Director, Sustainability post. His continuing responsibilities in Australia include management of RUSAL’s 20% stake in Queensland Alumina Ltd, the world’s largest alumina refinery, located in Gladstone, Queensland, and acquired earlier this year.

RUSAL (www.rusal.com) is a global No. 3 primary aluminum producer, headquartered in Moscow Established in March 2000 through a merger of several largest aluminum smelters and alumina refineries, RUSAL now accounts for 75 per cent of aluminum production in Russia and 10 per cent internationally. RUSAL is a vertically integrated company with a full production cycle, including upstream and downstream, production of primary aluminum, semi products and value-added cast-house products.

For more information please contact:

Vera Kurochkina Ekaterina.sedova@rusal.ru

+7-095-720-5170

Nigel O’Connor Financial Dynamics nigel@oconnor@fd.com

+44 207 831 3113

http://www.rusal.com

Strike wears on at Ormet Corp.

Marietta Times, OH Monday, June 20, 2005 — Time: 8:34:48 AM EST

By Kate York, kyork@mariettatimes.com

Negotiations between aluminum-maker Ormet Corp. and two unions of striking workers have broken down with no further talks planned.

Seven months into a strike that has 1,300 members of United Steelworkers of America Locals 5760 and 5724 out of work, no progress has been made, said Ronnie Blatt, grievance chairman for Local 5724.

"We’re absolutely at a standstill," he said. "We met for two or three hours on June 7 and that was the last session we had. Nothing else is scheduled."

The two sides had been meeting twice a week for five or six weeks but that has ended, said Blatt.

John Springer, member of Local 5760, said if the current officials at Ormet stay in place, he doesn’t see a deal ever being made.

"The negotiations are going nowhere," he said. "We don’t want to go back under the same management and we all feel that way. Our morale is very high."

Ormet President and CEO Mike Williams issued a statement saying that he is still willing to talk things out with the unions on strike.

"Progress during negotiations has been regrettably slow," Williams said. "We are anxious to see our hourly employees return to work with an agreement that is mutually beneficial."

Blatt said Ormet officials have refused to look at a plan the steelworkers formed that includes reducing jobs and active medical benefits.

The plan presented to the union by Ormet doesn’t extend beyond a three-year period, he said.

"It also doesn’t put any money back into the plant or show any long-term commitment to the plant," Blatt said. "Our take is that they’re going to run that plant for three years, line their pockets and then walk away. They’re going to leave the people here high and dry."

Ormet, with two plants in Hannibal, is one of Monroe County’s largest employers and also supplies jobs to surrounding counties, including Washington.

The company filed for bankruptcy in January 2004 and began a reorganization process that nullified union contracts.

Thirteen hundred workers are on strike and Ormet retirees are facing changes to their benefits that makes insurance payments hundreds of dollars more each month for most.

"My mother-in-law is a retiree and she gets $150 a month and now her insurance bill is more than $300 a month," said Springer. "We have retirees calling us every day. They can’t afford it."

Blatt said the union is still willing to negotiate but only on a long-term plan for the plant.

"They won’t do that so I don’t see any way of making a deal," he said. "We want them to sell the plant and have new owners come in that want to run the plant in the long-term. I firmly believe that’s the only way we’ll get an agreement."

Company officials have not commented on that possibility.

Instead, operations continue with replacement workers as the strike wears on.

"Hopefully, we’ll get some new people in that do want to work with us," said Springer. "There has to be a change."

Swig gets Kaiser landmarkBy Katherine Conrad

MSNBC East Bay Business Times June 19, 2005

The new owner of Oakland's landmark Kaiser Center intends to become well acquainted with its new asset before planning the next stage of the prime Lake Merritt property's development.

Jeanne Myerson, CEO of the venerable Swig Co. of San Francisco, said she was thrilled her company beat out much bigger competitors to land Swig's first East Bay purchase in recent history.

"We know there are development opportunities on the site, but we haven't spent time on that," Myerson said. "Before we come up with great schemes, we want a much better perspective on what works, what is needed, and what the tenants in the market are responding to."

Escrow on the 1 million-square-foot complex closed June 15. The price was not revealed, but sources close to the deal said it ranged from slightly more than $190 million to just higher than $200 million. Considering that buildings across the Bay go for twice that amount per square foot, the price was right for Swig.

"We liked the price per pound. The price was supported by rents at or below market," said Myerson, who threw her company's hat into the ring three months ago.

"We're in a growth mode," she said, indicating there may be more East Bay acquisitions to come.

To buy the project, Swig formed a joint venture consisting of Swig, Swig Investment Co. and GMAC Institutional Advisors. Financing in the amount of $147 million came from GMAC Commercial Mortgage.

Swig, now with 8 million square feet in its portfolio, beat out more than a dozen suitors in two rounds of bidding that began when Summit Commercial Properties and Highridge Partners put the project up for sale in March. Competition in the overheated investment market where nearly $2 billion worth of buildings changed hands in 2004 was intense.

"This is a trophy building, so people went all out to get it," said Jack Mahoney, president of Summit, based in El Segundo.

In addition to the tower, the complex offers a site for future development, a 1,300-space multilevel garage with a 3.5-acre rooftop garden and a three-story, 129,000-square-foot office and retail building that includes Longs Drugs, 24 Hour Fitness, Togo's and U.S. Bank.

Myerson speculated that Summit chose Swig to buy Kaiser Center because the almost 70-year-old company has experience with older properties.

"We could get our arms around the building and we would understand what we were looking at," she said. "We demonstrated from top to bottom that we were interested and we understood the deal."

Myerson, who described her company as a small, family-owned firm with 15 employees in San Francisco, knows she beat out some huge institutional investors to buy the Kaiser Center.

"This market is just incredibly frothy. There's too much capital and it makes it really hard to compete with lots of different kinds of buyers and so much money chasing properties," Myerson said.

Yet, she won and she plans to hold onto the asset, considered a landmark as much for its history as its design. When the 28-story building opened in 1960, it was the world headquarters for Kaiser Aluminum Corp. and Henry J. Kaiser's empire.

Forty years later, it hit hard times and landed in bankruptcy court in 2002, where Summit bought it for $100 million in early 2003. Mahoney recalled that the transaction was so difficult with so many different sellers that he almost walked away from the deal.

"It was very dangerous and very scary. We knew we could spend $2 million and there was a dangerously high likelihood of losing the money spent to chase it," he said.

Mahoney said Summit decided to sell because his work was done - Summit specializes in taking difficult properties and turning them around. The building was half empty when Summit bought it. Today, the tower is almost fully occupied. Major tenants include the Bay Area Rapid Transit District, 215,000 square feet; the University of California, 152,000 square feet; Kaiser Permanente, 75,000 square feet; and California Bank & Trust, 46,000 square feet.

Fewer than half the leases expire before 2011 and two-thirds of the tenants are considered credit-worthy. To lure tenants, Summit spent $35 million on tenant improvements and polishing the exterior of the curved structure, designed by architect Welton Becket. Other carrots included free rent - tactics Mahoney defended.

"Keep in mind, we rented that space during the depths of one of the worst markets seen in a long time," he said. "We had to lease up 500,000 square feet of space - that's a monstrous amount in two years. When you're trying to lease up a building in the worst market, you find the best tenants and go after them with everything you've got."

Clearly, the strategy worked for the new owner, as well.

"They wanted to fill it up and they did a good job," Myerson said. "We as investors liked the cash flow. There is an upside when tenants roll over in time."

© 2005 East Bay Business Times

Activists to protest in PoS

Trinidad & Tobago Express, Trinidad and Tobago Tuesday, June 21st 2005

Environmentalists, social activists and concerned citizens will take to the streets of Port of Spain tomorrow to protest what they see as government's quest to sacrifice a sustainable agricultural sector for industrial development.

Dressed in red, the protesters are scheduled to assemble 10 a.m. at the Brian Lara Promenade, Port of Spain, and then walk to Woodford Square for a rally at noon.

Signatures will also be collected for a petition, by the Federation of Independent Trade Unions and Non Governmental Organisations (FITUN), titled "Food Prices Are Too High".

The rally will focus mainly on proposed aluminium smelter plants to be built at Cap-de-Ville in Point Fortin, Chatahm and Union Estate in Claxton Bay.

Attention will also be drawn to the redevelopment of agricultural land in Caroni for housing.

Organisers are also expected to protest the planned amendments to the Judicial Review Bill that would prohibit judges from allowing citizens and organisations from seeking judicial review of acts that would not have a direct effect on them.

"We must protect our health, our environment, our food supply, our water system, our air, our seas and beaches. Our health is our wealth. Put food first," Agricultural Society president Wendy Lee Yuen said in a statement yesterday calling for support for the protest.

The protest, Lee Yuen said, was supported by the Cedros Peninsula Residents, FITUN, Fishermen and Friends of the Sea, the Agricultural Society, National Food Crop Farmers Association, Beekeepers Association, Southern Hunters Association, Professor Julian Kenny, senator Ken Ramchand and other concerned activists.

Corus Aluminum Plant Closure; No Big Impact

Dow Jones Newswires Tuesday, June 21, 2005 7:24:53 AM ET

1110 GMT [Dow Jones] Corus' (CS.LN) aluminum operations in focus after press report cites executive saying the company is considering closing its plant in North Rhine Westphalia. The impact on the company would be "very small," says analyst, but adds the move would be a surprise given that indications for the division "look good." Notes Corus' stated strategy is still to sell its aluminum assets. Company not immediately available to comment.

Ohio workers protest ‘vulture’ capitalists

Workers World Jun 21, 2005 11:20 PM

By Minnie Bruce Pratt

New York

Thirteen determined aluminum workers, men and women, demonstrated at the foot of a Madison Avenue skyscraper on June 17, chanting, "No justice, no peace!"

The workers are members of Steel Workers Locals 5760 and 5724. They had driven 500 miles from Hannibal, Ohio, to protest the impact on their lives of the ruthless policies of the MaitlinPatterson investment firm.

MaitlinPatterson, a "vulture" investment firm, has bought up their bankrupt employer, Ormet Corp. Ormet is one of the top four U.S. aluminum producers, with factories in four states.

Now MaitlinPatterson is laying off employees, contracting out jobs, cutting wages, and slashing retiree health insurance benefits so it can bring Ormet out of bankruptcy and re-sell the company for a fat profit. (www.uswa.org)

In New York Sharon Strope, a casting operator from Moundsville, W. Va., handed out fliers to passersby. The leaflet bore this question and answer: "What’s the difference between Mark Patterson and a vulture? At least the vulture waits until you are dead."

Strope has worked 27 years for Ormet. She said the workers have been on strike for a fair contract and to protect pensions and health insurance since Nov. 22.

Strope, who pours molten aluminum that other workers will ultimately roll and shape, noted that she and her co-workers make products people use every day. Her aluminum ends up as decorative trim on cars, light-weight pans for cooking holiday meals—and even the buttons that activists wear to demonstrations.

The Steel Workers members have staged militant protests at Ormet plants in Indiana, Louisiana and Ohio—and at the homes of MaitlinPatterson owners in New York. At one demonstration at Ormet headquarters in Wheeling, W. Va., police arrested worker Norman (Pete) Gray, using the Homeland Security laws as a pretext.

On the picket line in New York, Connie Gray said that when her husband was arrested he was wearing a "Grinch" costume to dramatize MaitlinPatterson as the "Grinch that stole the pensions." Pete Gray was well known to the arresting police, and clearly not concealing his identity in any way. He has refused to plead guilty and is demanding a jury trial.

As the aluminum workers chanted, they were quickly joined in solidarity on the picket line by people passing by. A giant inflatable rubber rat, symbol of labor protest in New York, got inflated to its 12-foot height. Truck drivers honked their horns in support.

Groups of workers from New York unions suddenly appeared, including some in the distinctive green jackets of District Council 37, State, County and Municipal Employees, as well as representatives of the Mason Tenders District Council of Greater New York and the United Federation of Teachers.

The office of Mark Patterson, co-owner of the investment firm and a former executive at Credit Suisse, floated some 43 floors above the workers on Madison Avenue. Sharon Strope commented: "He likes to stay far away from the dirt. He didn’t work for 40 years only to have someone come and take it all away."

The Ormet takeover is part of a wave of economic manipulation by big business in search of easy profits. The impact on workers has been devastating. Layoffs in the United States jumped 42 percent between April and May 2005.

SUAL to omit dividends for the year 2004.

Analytical Information Agency, Russia Jul 22, 2005

The shareholders of JSC SUAL have passed a resolution at the Annual General Meeting to omit dividends for the year 2004.

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.

ANALYSIS - European Industry Squeezed by Surging Power Prices

Planet Ark, NY June 23, 2005

LONDON - Record power prices in Europe are squeezing industry and analysts say there is more pain on the way as utilities pass through soaring costs of complying with new limits on greenhouse gas emissions.

Anglo-Dutch group Corus said on Wednesday it may shut a German aluminium plant because of high power costs, echoing threats by other producers and sounding alarm bells across the continent as experts said electricity prices have yet to peak.

"High power prices are really killing energy intensive industries," said Peter Claes, president of the European arm of the International Federation of Industrial Energy Consumers.

Claes called on the European Commission, which is probing high energy prices, to look closely at the structure of the continent's liberalised electricity markets and find ways to improve the way the sector is regulated.

Critics of Europe's market say a wave of consolidation has left big utilities like Germany's E.ON and Electricite de France with too much influence.

Analysts said soaring prices for CO2 allowances issued under Europe's new emissions trading scheme are the main driver behind a power price rally that has seen forward contracts in France and Germany surge 30 percent since January.

British forward prices, also buoyed by record gas prices, have jumped 70 percent.

"Things will get worse (for power consumers) before they get better," said UBS analyst Per Lekander.

TIGHTER REGULATION LOOMS

Lekander said regulators might have to step in to tame runaway power prices, which were set to rise further on the back of CO2 prices.

"There is a significant chance of regulatory steps," he said.

Lekander predicted CO2 prices, which this week are at record levels around 23 euros a tonne, would climb to 30-40 euros in the near term, pushing record power prices up by five to 10 euros a megawatt hour.

Baseload power for 2006 on Wednesday hit record highs above 40 euros a megawatt hour in forward markets in France and Germany.

Prices for CO2 are climbing because high gas prices are discouraging power generators to carry on burning cheaper coal, which produces far more CO2 than gas and boosts demand for allowances to meet quotas under the emissions trading scheme.

Kim Keats Martinez, managing consultant at ICF Consulting in London, agreed that power prices were likely to go higher, citing a drought in Spain as another factor pumping up CO2 prices.

Dry conditions in Spain have cut power output from the country's hydro-electric stations, removing a key source of CO2-free power.

On Tuesday, Spain's grid cut power supplies to some industrial consumers in the north of the country due to shortages.

Italy, where consumers pay the highest bills in Europe, is to freeze power prices after the government said on Wednesday it had intervened to prevent forecast increases.

Story by Stuart Penson

Clean-up Plan for Former Kaiser Plant

WJET, PA Wednesday, June 22, 2005

A complicated cleanup plan that has taken five years to forge will soon bear fruit in a big way for the regional employment picture.

The Department of Environmental Protection has entered into an agreement to guarantee the environmental cleanup of the former Kaiser Aluminum plant on East 12th St..

IFP North America wants to build an apple juice processing plant there.

Under terms of the agreement, Kaiser will donate the property to the Greater Erie Industrial Development Corporation and Erie Land Holding, a company related to Accuride.

They will clean up the site.

The new juice plant will employ three hundred people.

Automation upgrade packed with energy

Ferret, Aust 23 June 2005

TOMAGO Aluminium was the first large-scale AP18 plant to be constructed globally. In March 2002, the company commenced upgrading the smelter to AP22 technology at a cost of $210 million, of which approximately 80 percent was a direct cost for equipment and installation.

The implementation of the AP22 project allowed the Tomago potlines to increase the operating current from 201 kA to 225 kA. This change resulted in an increase of overall liquid metal production to 531 kt/year.

The project implementation required modifying all facets of production processes and infrastructure augmentation to cater for the current increase:

Potline shells were modified and additional cooling was added via a forced convection network.

The substation power supply was augmented by the addition of two new 330 kV/66 kV/22 kV main regulating transformers and additional rectifier units to increase current capacity and power supply security.

In the paste plant, vibrocompactors were modified to allow the system to produce larger sized AP22 anodes.

Anode baking, handling and storage capacity had to be augmented to cater for the handling, storage and movement of new sized anodes. The new Bake Oven 3 was developed. Stacking cranes, furnace tending assembly (FTA) cranes and gantry cranes were modified with a new FTA4 added to service the new BO3 furnace. A new BO1 gantry crane and conveyors were added to handle the new AP22 anodes.

In the rod shop, anode rodding and recovery were modified to cater for the required change in anode size. Additional machines were added to aid the efficient processing and handling of the larger sized rodded anodes. Additional cast iron smelting capacity was added via a third induction-heating furnace.

Liquid metal processing was increased by the deployment of a new ingot casting machine.

On the environmental front, fume treatment centres were expanded and upgraded with additional filters and suction fans to cater for the higher emissions.

The overall project duration was around 24 months, being completed in 2004.

AP22 automation

FROM an automation point of view, the project was treated as a brownfield site with the existing control system requiring careful modification to match the progressive gradual process changes.

New control systems were added to cater for the required plant changes.

The project required specific automation skills and experience with Siemens and Allen-Bradley control systems using a Citect SCADA HMI interface.

The ash plant was identified as an area subject to major change as a result of the AP22 project. To enable the system to expand and be easily integrated with additional control systems, it was decided to migrate the existing front end processor (FEP) and HMI SCADA system to new platforms.

This system was based on an Allen-Bradley PLC 5 /250 FEP, which acted as the coordinator for all anode handling activities, anode data storage and tracking for the entire area. The HMI SCADA system was based on a 1990 uVax-based VXL system.

The FEP control system consisted of 12 Allen-Bradley PLC 5 family systems distributed over three DH+ networks.

The migration changed the existing PLC5 /250 and HMI VXL system to a ControlLogix platform with Citect as the new HMI system.

The migration allowed the AP22 engineers to take advantage and develop new ControlNet networks to cater for the new AP22 PLC equipment.

In the case of the ash plant, the following new ControlLogix field PLCs (ControlLogix 5000 PLC based on distribute field I/O) were added to the system: BO1 gantry, FTA4 and BO2/BO3 fines PLC.

Bake Oven 1 gantry control system

THE tight design and construction schedule for the project required the fast-tracking of multiple equipment vendors and integration of the new equipment into the existing anode handling infrastructure with minimum outage and plant downtime. Safety, as always, was the major focus during the implementation phase.

This requirement forced the automation group to deploy a distributed PLC I/O strategy, with each vendor supplying equipment with onboard local I/O pre-wired to local control panel and J-boxes.

This approach minimised site installation costs and allowed multiple vendors to supply equipment concurrently in a critical path schedule. The equipment was then installed onsite in a package manner to minimise the impact on normal plant operations.

This strategy was successfully applied to the new BO1 gantry handling system, in which multiple vendors were utilised to build the new anode handling system.

In this case, specialist vendors were used to provide gantry crane assemblies, hydraulic power packs, anode conveyors, anode handling equipment and MCC equipment.

The distributed I/O system was then progressively connected together into a functional system in normal planned maintenance shutdown outages. This approach also allowed the AP22 engineers to progressively commission individual aspects of the control system, thereby to minimise the time required to fully commission the system during the final anode size changeover campaign.

Interfaces and integration into the control system infrastructure were built in via a mixture of new networks and distributed I/O hardwired interfaces.

Alcoa to Cut 6,500 Jobs, Shut Plants as Prices Fall (Update3)

Bloomberg June 23, 2005

Alcoa Inc., the world's biggest aluminum maker, said it will shed 6,500 jobs and close plants because of a drop in prices and higher energy costs, resulting in a second-quarter expense of $220 million to $250 million.

The cuts will save about $150 million a year before tax, Pittsburgh-based Alcoa said today in a statement. The plant shutdowns will include a smelter in Hamburg, Germany, and a factory in Kentucky that makes auto parts, the company said.

Chief Executive Alain Belda, 62, wants to reduce costs this year by $620 million by making factories more efficient and reducing purchasing costs as the cost of chemicals and energy used to make aluminum rises. Aluminum for delivery in three months has fallen 13 percent since this year's peak on March 11.

``Given their lack of delivery on the bottom line in the last year or so, it's the right thing to do,'' said Lloyd O'Carroll, an analyst for BB&T Capital Markets. O'Carroll has a ``buy'' rating on Alcoa's stock, which he owns.

Sale of Shares

Results in the quarter also will include $100 million to $120 million in benefits from tax settlements and $219 million for the sale of shares of Norwegian aluminum maker Elkem ASA in April, Alcoa said. The gains will be 36 cents to 39 cents a share, and the expenses will total 30 cents to 33 cents a share, Alcoa spokesman Kevin Lowery said.

``Alcoa's trying to offset increases in costs that are outside its ability to control such as rising oil prices and currency fluctuations,'' Charles Bradford, an analyst at Soleil Securities in New York, said in a telephone interview.

Bradford said Alcoa is behind schedule on a three-year plan unveiled in January of last year to trim expenses by $1.2 billion.

The company's first-quarter profit fell 27 percent to $260 million, or 30 cents a share, from $355 million, or 41 cents, on costs to fire about 1,800 workers and expenses related to the Elkem sale. Analysts expect the company in the current quarter to earn 49 cents a share, not including the special losses or gains. In the second quarter last year, the company had net income of $404 million, or 46 cents a share.

Alcoa's shares today fell 50 cents to $27.19 in New York Stock Exchange composite trading. They have declined 17 percent in the past year. They have risen 34 cents to $27.53 since the close of New York trading.

The company has 131,000 employees.

Kaiser Aluminum to donate property for remediation

Waste News, OH June 23, 2005

Kaiser Aluminum and Chemical Corp. will donate its 50-acre Erie, Pa., property to allow for its remediation and pave the way for a fruit juice processing and packaging plant.

The company reached an agreement with the Pennsylvania Department of Environmental Protection to hand over the $2.9 million site to the Greater Erie Industrial Development Corp. The GEIDC will remediate the brownfield site, but Kaiser will have the responsibility of addressing any remaining contamination from a former waste pond it used during operations.

Under the agreement, the cleanup must be finished by Dec. 31, 2009.

IFP North America Inc. will build a $65 million multi-fruit processing and juice packaging plant on the property. It will break ground this summer on the 300,000-square-foot facility and plans to begin production in 2006.

BALCO rejects land grab allegations

Newindpress, India Friday June 24 2005 00:00 IST

IANS

RAIPUR: Aluminium major BALCO said on Thursday that a Chhattisgarh government order taking back over 1,000 acres of allegedly encroached land was "unwarranted" and would hit the state's industrial future.

Reacting to Agriculture and Forest Minister Nankiram Kanwar's order on Wednesday, BALCO's (Bharat Aluminium Company Ltd) Deepak Pachpore said: "It is all baseless and the minister has been unnecessarily targeting us."

Kanwar had ordered that the land be taken back saying the company had felled trees and grabbed it for its current Rs.50 billion expansion and modernisation plans.

"We believe in work and technology culture not in any foul methods. Sterlite, which controls 51 percent stake in BALCO, is one of the most reputed industrial groups of the world," Pachpore told IANS.

Kanwar, who set up a high-powered committee last week to probe the alleged land encroachment by BALCO's plant at Korba, 165 km north of here, lost his portfolio in a cabinet reshuffle within 24 hours.

In the reshuffle, Kanwar got the forest department along with agriculture.

Soon after taking charge, he recommended stern action against BALCO for land grab following a government inquiry report on the matter.

"BALCO has to free the land. I want to take the battle with BALCO to a logical end without consuming too much time," Kanwar said.

As part of its expansion, the company is setting up 288 smelter pots with Chinese technology with an investment of over Rs.50 billion to raise its annual production from 100,000 tonnes to 350,000 tonnes per annum.

Corus mulls closure of German aluminium plant because of high power costs

Forbes 06.23.2005, 06:28 AM

FRANKFURT (AFX) - Corus Group PLC is mulling the closure of its aluminium plant in Voerde, Germany because of high electricity costs, company board member Gerhard Buddenbaum told Handelsblatt.

'If we are unable to negotiate competitive electricity prices within the next few months then we will have to consider closing the Voerde aluminium works,' Buddenbaum told the newspaper.

He said that Corus is currently in talks with several power companies on its electricity purchases.

The Voerde plant employs 500 workers and produces about 70,000 tonnes of aluminium per year, the newspaper reported.

Alcoa concentrates on raising aluminium production

Food Production, Europe 24/06/2005

Alcoa said yesterday it will close a number of plants, including a smelter in Hamburg, Germany, as part of the company long range plans to cut costs but increase aluminium production.

Alcoa, the world's largest aluminium producer, is a major supplier of packaging for the foods and drinks industry.

The company says it wants to increase its global reach to be closer to growing markets and to take advantage of being in low cost countries.

Alcoa has also been concentrating on raising aluminium production, as prices and demand for the metal continue to rise worldwide. Last year aluminium prices rose by about 23 per cent and are forecast to rise further throughout 2005.

The company said yesterday it would record an after-tax profit of $219m on the sale of its shares in Elkem, the Norwegian metals company, in the quarter. The company also expects to record a $100m to $120m net tax benefit and after-tax charges of $220m to $250m. The charges include the cost of layoffs, plant closures and consolidations.

These include the closure of an automobile parts plant in Kentucky, the sale of various US and European extrusion plants, reduction of its global packaging and consumer business and the closure the Hamburger Aluminium-Werk aluminum smelter in Hamburg. The closure of the smelter was due to high energy prices, Alcoa said.

The company also said it is considering closing its Eastalco aluminum smelter in Frederick, Maryland over escalating lower power prices.

Meanwhile the company is expanding alumina refinery capacity in Australia, Jamaica, and Suriname and constructing a smelter in Iceland. It is expanding smelting capacity in Brazil, China and Trinidad and expanding fabricating capabilities in Russia. In 2004, Alcoa restarted smelting capacity at a plants in Washington state, New York state and Quebec. Once the restarts are complete, Alcoa expects it will have the capacity to make an 361,000 tonnes of aluminium a year on a base capacity of four million tonnes.

The Iceland smelter is expected to be completed in 2007. The company is also investing in a new plant in Norway and is refurbishing a Spanish smelter.

"While capacity restarts and anticipated higher metal prices will add to revenue and profit in 2005, the company anticipates that higher energy costs will persist," Alcoa said in a statement.

Alcoa's packaging and consumer segment made a profit of $6bn in 2004, accounting for about 26 per cent of total profit. Alcoa makes bottling closures for the dairy, food and beverage industries. The division also supplies printed shrink sleeve labels. Alcoa also makes the aluminum sheet used to make 100 billion cans

each year.

The International Aluminium Institute estimates 22.6 million tonnes of aluminium were produced worldwide last year.

Chinese see USA as land of opportunity

WFAA (subscription), TX Saturday, June 25, 2005

They snap up American enterprises for brands and sales networks

By KATHERINE YUNG / The Dallas Morning News

CORPUS CHRISTI – A sprawling complex of pipes, tanks and evaporators erected in the 1950s, the Sherwin Alumina refinery seems an unlikely target for Chinese investment.

North America's second-largest alumina plant is struggling to absorb persistently high natural gas prices, operates with a unionized workforce and competes against a host of lower-cost manufacturers around the world.

But China's largest state-owned metals group, China Minmetals Corp., bought a 51 percent stake in the refinery last year. It controls half the seats on the plant's board of directors, including the chairmanship.

"China is desperately short of aluminum," said Sherwin Alumina chief executive Peter Bailey, explaining the Chinese company's interest in the refinery, which produces the key ingredient in commercial aluminum.

The acquisition represents one of a growing number of Chinese investments in the United States that experts predict will alter the nation's business landscape in coming years.

The investments are coming at a time of growing protectionist sentiments, sparked by record trade deficits and millions of lost manufacturing jobs. Yet they are proving that China's economic rise can bring benefits on both sides of the Pacific.

"We're very dependent on foreign investment," said Adlai Stevenson III, the former Illinois senator who is chairman of the Midwest U.S. China Association, which promotes Chinese investment in the heartland.

"Instead of just buying Treasury securities, the Chinese are buying assets," he said.

Leading Chinese companies, such as motorcycle maker Chongqing Lifan Group and telecom giant ZTE Corp., have set up sales offices, distribution centers and research facilities in Dallas and other U.S. cities.

Some are acquiring American businesses to gain distribution networks or familiar brand names.

The newcomers have ventured beyond merely purchasing distressed or bankrupt companies and shipping the factory equipment to China. In many cases, they're injecting new life into U.S. businesses by providing capital.

To date, the largest and most prominent acquisition has been Lenovo Group's $1.25 billion purchase of International Business Machines Corp.'s personal computer business.

But Haier Group, China's largest appliance maker, has teamed up with two buyout firms in a $1.3 billion bid for struggling Maytag Corp. And the China National Offshore Oil Co. Ltd. wants to buy Unocal Corp. for $18.5 billion.

In much smaller deals, Chinese companies have snapped up everything from struggling auto suppliers to software firms. They have focused on meeting business needs, not on investment vehicles such as trophy office buildings and golf courses.

"This is much more regulated, much more strategic" than the wave of Japanese spending in the U.S. in the late 1980s and early 1990s, Mr. Stevenson said.

Like the Japanese a generation ago, today's Chinese investors stir some commercial concerns. Their currency, kept artificially low in value by Beijing, gives China an edge in the U.S., for example.

But unlike Japan, China also raises deep-seated geopolitical fears in Washington.

Although its communist government and drive for more global influence may not loom large in the buying of appliance manufacturers or alumina makers, the bid for Unocal heated up the long-simmering debate: Is China a trustworthy trading partner, worrisome rival or some mix of the two?

Growing interest

Right now, Chinese investment remains a blip in the $12 trillion-plus U.S. economy. At the end of 2004, more than 1,000 Chinese companies had made a total of $560 million in direct investment in the U.S., according to the Chinese Embassy in Washington.

But this investment is expected to surge as a rising number of Chinese corporations, hungry for sales growth, gain the financial wherewithal to enter Western markets.

"The U.S. is the largest market in the world for China," said Michael Chang, director of the Dallas office for the China Council for the Promotion of International Trade.

Many Chinese companies prefer to sell abroad because of fierce competition at home and difficulties in getting paid quickly, he said.

In addition, the Chinese government is encouraging direct overseas investment, which totaled $3.6 billion last year, up 27 percent from 2003 levels.

China's voracious appetite for iron ore, copper and other metals is spurring much of the capital outflow.

A little more than half of last year's overseas investment poured into the mining industry, primarily in Latin America and Indonesia.

Only 1.7 percent, or $62 million, flowed into North America, mainly the U.S.

But those figures are likely to increase, experts say, because many Chinese consumer and technology companies view the U.S. as a critical source of growth.

"The U.S. is a market you cannot miss," said John Yu, senior vice president of research and development for ZTE USA Inc., the American division of the big Chinese telecom equipment maker. "The purchasing power of the U.S. is still very high."

Teaming up with the Chinese seems like a novel concept to many Americans, but it's a way of life for the 700 employees at the Sherwin Alumina refinery, across the bay from Corpus Christi.

China Minmetals hasn't made any significant changes at the plant, which was owned for nearly half a century by Reynolds Metals Co. And the Chinese conglomerate has sent over only a single representative, who's been involved in logistics, sales and high-level management issues.

Language hasn't been a problem because China Minmetals executives speak English. But Sherwin's board meetings have turned into trans-Pacific conference calls. And Mr. Bailey, who runs the refinery and is also one of its investors, now finds himself answering more late-night telephone calls.

But underlying these inconveniences exists the potential for a big payoff. If shipping prices fall, the refinery could benefit from increased exports of alumina to China.

"It's been a comfortable situation," said Mr. Bailey, who travels to Beijing twice a year. "The Chinese are good business people, and they fit very well into the global economy."

Mastering marketing

Aided by low-cost manufacturing operations at home, many Chinese companies see catering to American households as a natural avenue for expansion. But they often run into marketing hurdles.

That's the case for American Lifan Industry, the U.S. unit of the Chongqing Lifan Group, China's largest motorcycle manufacturer.

In a 30,000-square-foot warehouse in northeast Dallas, eight American Lifan employees spend their days trying to sign up motorcycle dealers around the country, one of the last untapped markets for Chongqing.

American Lifan represents just one of several Chinese motorcycle companies now selling their bikes to U.S. consumers. Three years after entering the market, it boasts more than 200 dealers, mostly in the South, including three in the Dallas suburbs.

Its motorcycles, pocket bikes, scooters and all-terrain vehicles range in price from $800 to $2,500. Last year, the company sold 3,000 of them, generating $2 million in sales, said Peter Xie, its executive manager.

"The American market is the toughest market," he said, noting the demand for frequent model changes.

Getting buyers familiar with the brand poses the biggest challenge, said Damon Williams, American Lifan's marketing and sales manager. He quickly discovered that most Americans don't know how to pronounce "Lifan" (lee-fan).

Experts say the lack of brand awareness, often combined with little U.S. marketing expertise, is the biggest obstacle for Chinese companies trying to appeal to sophisticated American consumers.

"They have no background in market economies," said Donald Straszheim, an economist in Santa Monica, Calif., who specializes in China. "Marketing, sales, hype and distribution – all of these things are really quite foreign" to them.

Other difficulties abound. ZTE, China's second-largest telecom equipment company, is pushing modification of its base station controllers, modems and other products to meet U.S. standards.

Undeterred

But that isn't deterring the Shenzhen-based company, which recently formed a U.S. sales team.

"The international market is growing," said Lin Ma, ZTE's vice president of North American sales and marketing. "ZTE is really growing up to be a global company."

This spring, the firm moved into a bigger office in Richardson's Telecom Corridor. It serves as ZTE's U.S. headquarters, staffed by about 20 employees.

ZTE isn't the only Chinese telecom company vying for a piece of the U.S. market.

Its larger rival, FutureWei, owned by China's Huawei Technologies, set up its U.S. headquarters in Plano. And China Telecom Corp., which sells voice and data services, operates sales offices in Herndon, Va.; Los Angeles; and San Francisco.

So far, ZTE and most Chinese companies have kept a low U.S. profile. They've been largely overshadowed by the headlines garnered by Chery Automobile Co., maker of China's bestselling car, the QQ.

Chery vs. Chevy

Chery aims to sell 250,000 of its vehicles in the United States in 2007, using a distribution company established by Malcolm Bricklin, who brought Subaru and the infamous Yugo to these shores.

Mr. Bricklin's company, Visionary Vehicles, is recruiting dealers nationwide. It wants to compete in the midprice segment, offering 30 percent to 40 percent savings over comparable models, said Paul Lambert, Visionary's president of North American marketing.

"Chery has been anointed to be the first major brand" of Chinese autos, he said. "It has the backing and support of both the province and the Chinese government like I have never seen."

Chery may not be the only Chinese import vehicle. In Capitola, Calif., south of San Jose, auto dealer John Mandella has received one Chinese car for his showroom and said several more are on their way, though sales haven't yet begun.

He's part of a group of dealers assembled by Arizona businessman David Shelburg to sell vehicles from three other Chinese automakers.

Unlike Visionary, they aren't discussing their plans.

For Visionary, generating publicity is a key part of its strategy for gaining American buyers' confidence.

"The Chinese know they only have one opening night," Mr. Lambert said.

E-mail kyung@dallasnews.com

Putin to discuss investments with U.S. businessmen

RIA Novosti, Russia June 25, 2005

MOSCOW, June 25 (RIA Novosti) - Russian President Vladimir Putin will meet with U.S. big businessmen in St. Petersburg on Saturday. Heads of Alcoa, Intel, IBM, United Technologies, International Paper, ConocoPhillips and Citigroup will attend the meeting, a senior Kremlin official said.According to him, these companies intend to expand their activities in Russia.

For instance, Alcoa is to promote aluminum production at the Russian metallurgic plants which the company purchased recently.

Intel and IMB are interested in expanding software off-shoring and setting up research and technology centers in Russia, United Technologies - in developing rocket engine production and International Paper - in modernizing pulp and paper industry.

ConocoPhillips is set to launch joint projects with Russian oil giant Lukoil to produce LNG and supply it to the North American market.

Citigroup intends to discuss the completion of the talks on Russia's accession to the WTO as part of the strategy of proactive development of the Russian market of banking services. According to Citigroup's heads, the conditions of work on the Russian market via subsidiaries are highly comfortable and comply with the level of the Russian banking sector development.

Media and real estate moguls Rupert Murdoch and Jerry Speyer are to focus on publishing, advertising, building and mortgage loaning.

The Kremlin source said that the Russian leadership hoped for a sincere and profound discussion of the problems and prospects of U.S. companies' activity in Russia and measures to boost Russian-U.S. relations as a whole.

The meeting will focus on promoting diversification of the Russian economy, particularly, in the hi-tech sphere, and involving American businessmen in major joint projects in the energy, engineering, IT, banking, insurance, information and other fields, the source said.

According to him, President Putin will dwell on the measures the Russian leadership is taking to maintain high economic growth rates, key investment policy priorities and developments in the spheres foreign investors are concerned over, i.e. the judicial system, protection of property, taxation system modernization and infrastructure development.

Industry squeezed by soaring energy prices

MSN Money June 26, 2005 09:41 PM ET

All Financial Times News

Energy prices appear to have reached a tipping point for many industrial users, as inflation outstrips companies' capacity to absorb higher costs by increasing the prices they charge consumers.

European, US and Asian stock markets all fell last week as oil reached $60 per barrel and corporate leaders around the world issued a series of high-profile profit warnings.

And the metals industry, which had been enjoying its best growth for years, is now squeezed between the high cost of energy-related inputs such as electricity and coal and slowing demand from leading customers.

Corus, the Anglo-Dutch steel producer, last week warned it may have to shut its aluminium plant in Voerde, Germany, because of high electricity costs. Alcoa, the world's largest aluminum maker, warned of 6,500 jobs cuts and plant closures in Germany and the US because of a drop in its prices and higher energy costs.

Energy prices have hit German business on two fronts by weighing on the already feeble domestic demand while eating away at companies' margins, especially in the large industrial sector.

The heavy layer of regulation and comparatively high energy-related taxes, meanwhile, meant German-based businesses were facing higher energy bills than their competitors abroad, he added.

Additional reporting by Andrew England in Nairobi

Copyright 2005 Financial Times

VALCO operations to start on Friday

GhanaWeb, Ghana June 27,2005

Accra, June 27, GNA - The Volta Aluminium Company (VALCO) is set to start operations on Friday as part of an accelerated programme to reinvigorate the aluminium smelting industry in the country. The restart of operations of VALCO, according to President John Agyekum Kufuor, who was speaking at the just-ended sixth Ghana Investors' Advisory Council (GIAC) Meeting in Akosombo, was in connection with the introduction of the Aluminium Company of America (ALCOA) to establish an integrated industry.

ALCOA took over the operations of VALCO after the expiration of an agreement with the Government of Ghana in 2003. Kaiser Aluminium, which owed 90 per cent of the company, initiated the move with the Ghana Government, which owns the remaining 10 per cent. VALCO was established about 40 years ago in the First Republic.

The Council, established in May 2004, advises the President on issues that hampered the promotion of Ghana as the preferred destination for both domestic and foreign direct investments in the West Africa Sub-Region. It is a high level and informal advisory group, chaired by President Kufuor comprising top-level corporate executives, who would assist to increase understanding between government and companies driving investments.

The Council also includes a 30-member group of top-level executives of foreign and Ghanaian businesses. A press statement issued at the end of the Meeting said the Government was committed to pursue the thematic areas and Action Plans of the various sectors of the economy. The Meeting said progress on the labour reforms would be made including the establishment of a National Labour Commission and its Secretariat as well as land reforms including data on land suitability maps covering all the 10 regions. Also to receive attention is the financial sector reforms including the Act establishing the Venture Capital Fund, the Long Term Savings Scheme and the credit bureau regulatory body. The relevant sector Ministers also examined the establishment of a private Extension Service Delivery System to strengthen agricultural services.

Alcan cancels gas purchase agreement with Australian venture

newratings.com Monday, June 27, 2005 4:16:03 AM ET

NEW YORK, June 27 (newratings.com) – Leading Aluminum producer Alcan Ltd (AL.NYS) Monday announced that it cancelled a 20-year gas purchase agreement with Australia’s Woodside Petroleum, after the latter called for a substantial hike in gas prices.

Canada-based Alcan had last year signed an agreement to purchase gas from Woodside Petroleum’s Blacktip gas field in the Joseph Bonaparte Gulf off Australia's northwestern coast. The gas was proposed to be transported through a $50 million pipeline across the Northern Territory. Woodside Petroleum owns a 53.85% stake in Blacktip, with the rest being held by ENI Australia, a unit of Italy's ENI SpA. As per the terms of the agreement, Alcan had agreed to purchase approximately 850 million tons of natural gas every year for up to 20 years. Alcan said it will now pursue other options for the supply of gas to its alumina refinery in Gove, Northern Territory

SUAL Changes Status in Ukraine

Kommersant, Russia - 27 Jun, 2005

Under the order of Ukrainian PM Yulia Timoshenko, National Energy Company of Ukraine will consider June 29 whether to upgrade SUAL-controlled Zaporozhie Aluminum Works from the second to the first category of consumers (large industrial enterprises). Timoshenko's order signals the willingness of Ukraine to end the conflict with Russian aluminum holding, the experts say.

SUAL has announced recently it will have to stop production at Ukrainian sole maker of primary aluminum due to the high energy rates. In Ukraine, the 2nd category rate equals $0.0463 for July. Though the 1st category rate is no more than $0.035, it is still much higher than in Canada - $0.01 at the most, the CRU says, and the United Sates - $0.016. Russia charges $0.003/kWh.

SUAL spokesmen said Timoshenko’s initiative is "of positive nature," but it doesn’t solve the problem. The energy rates are still too high for production in an enterprise with around 30 percent share of power costs in the overall prime cost of the product.

Aluminum smelting expansion to face more curbs

www.chinaview.cn 2005-06-29 11:32:14

BEIJING, June 29 -- Chinese companies have outlined aggressive expansion plans for the alumina smelting sector, but at least 50 percent of the 20 million tons of proposed new capacity will probably be called off in the next few years amid government efforts to rein in expansion in the sector.

Analysts are reworking their projections after the government scrapped a total of 1.6 million tons of alumina smelting capacity addition plans in Henan and Shaanxi provinces last month. The government said the measure was to ensure "environmental protection."

Analysts believed that could just be the start of a campaign to crack down on unbridled expansion in the sector, which is highly energy-intensive in a country facing severe power shortages.

The government is also concerned about the spread of small, inefficient smelters that will not enjoy economies of scale. "About 50 percent of capacity in the pipeline is going to be provided by small smelters that usually lack sound technology. The government is unlikely to allow further construction of small smelters," said Great Wall Weiye Futures analyst Yu Yunqing.

Some said the government took note of this problem much earlier in the year. The government issued a warning against unchecked expansion in the sector in early March.

Analysts estimated alumina production capacity could hit 10 million tons by the end of this year, although production would be lower at around 9 million tons, up from 7.02 million tons last year.

According to some estimates, the expected production of 9 million tons of alumina would only be able to meet half of the demand from domestic aluminum producers this year.

The leading alumina producer, Aluminum Corp. of China, or Chalco, will be the biggest beneficiary of recent government efforts to curb expansion by smaller smelters.

Unlike small alumina producers, analysts said Chalco had been facing no problems in getting new alumina projects approved.

The company started constructing a new 700,000-ton-per-year alumina plant in Henan in March. Another 800,000-ton alumina plant in Shaanxi is expected to start trial runs in August. Chalco is also undertaking a 1.6-million-ton alumina plant in the Guangxi Zhuang Autonomous Region.

"The government is not controlling Chalco, indicating domestic alumina production, even after some capacity expansion, is far from enough," said Shenzhen North Investment alumina analyst Guo Jianjing.

Analysts estimated Chalco would produce 8.5 million tons of alumina this year, up 25 percent from 6.82 million tons in 2004.

To meet increasing appetite for bauxite, as a result of the expansion in domestic alumina smelting capacity, China is widely expected to import more of the raw material used in producing alumina in the next few years.

Analysts expected bauxite imports to hit at least 1 million tons this year, up from 882,032 tons last year. Bauxite imports might hit 1.5 million tons next year, they said.

"Bauxite imports will rise 50 percent every year in the next few years due to the large demand from domestic alumina plants," said Guo.

(Source: Shenzhen Daily/Agencies)

Venalum ups Line VI investment to US$1.05bn - Venezuela

Business News Americas, Chile Tuesday, June 28, 2005 17:35 (GMT -0400)

Venezuelan aluminum reducer Venalum has increased its investment plan to US$1.05bn for Line VI from the US$900mn announced in June 2004, the company said in a statement.

According to Venalum - a subsidiary of state heavy industry holding company CVG - the whole project requires a disbursement timetable of US$22mn in 2005, US$258mn for 2006, US$560mn for 2007 and US$212mn for 2008. Venalum company officials were not immediately available for comment to BNamericas on Tuesday.

Venalum's plan is to expand operations by building reduction lines VI and VII, plus a coal plant, casting room, extrusives plant, a raw material management and storage system and an expansion of pier capacity, among other works.

The reducer plans to begin construction of Line VI in November 2005. As such, Venalum has already completed soil studies - geotechnical, geophysics and hydrology surveys - earth movement engineering and site preparation civil works, plus basic and concept engineering for all industrial facilities.

Basic and detailed engineering is also underway for all facilities and buildings, industrial services, transport, material storage, pier expansion and specific environment evaluation, the company said.

Works needed to carry out earth movement will begin starting September 2005.

According to Venalum's forecast, the Line VI project will increase sales from US$649mn to US$1.07bn based on average trading of primary aluminium on the London Metal Exchange (LME) since 1991 of US$1,450/t.

Venalum says primary aluminium demand growth in the next 15 years at an average year-on-year rate of 2.5-3.5% represents an opportunity to reach healthy market share levels.

STAGES

Venalum's stage 1 expansion from 2005-2008 entails developing Line VI and associated facilities and buildings, plus developing coal plants and a casting room.

Stage 2 from 2008-2010 will implement Line VII plus industrial and associated facilities. Each stage will produce 285,000t/y.

Venalum plans to open Line VI in 2007, which will raise company production capacity from 430,000t/y to some 715,000t/y.

Sixteen international companies are interested in developing the Line VI project, including Mitsubishi, Marubeni and Fluor Daniel. CVG is reviewing offers.

The Venalum plant in Puerto Ordaz in Venezuela's Guayana region is 80%-owned by CVG, with a group of Japanese investors holding the remaining 20%. The company is the largest producer of primary aluminum in Latin America.

Russia signs first Kyoto project, more seen

Reuters.uk, UK Tue Jun 28, 2005 5:40 PM BST

By Oliver Bullough

MOSCOW (Reuters) - Power giant UES signed Russia's first projects under the Kyoto pact's investment rules on Tuesday, in what it hopes is a step to cutting greenhouse gas emissions and raising cash for the aging electricity sector.

The projects are themselves small as they cost the Danish government 20 million euros ($24.25 million) for a yearly saving of 1.21 million tonnes of carbon dioxide, but are designed to show the potential of Russia for Kyoto investors.

Under the terms of the pact, which assigns countries with pollution quotas in a bid to stabilize levels of the gases that cause climate change, investors can cut emissions in another country and book the savings as their own.

The so-called Joint Implementation (JI) clause is intended to allow emissions cuts to be as cheap as possible.

In this case, Denmark's Environmental Protection Agency invested in Unified Energy System (UES) Siberian subsidiaries Khabarovskenergo and Orenburgenergo.

"These are pilot projects, but we are sure they will be effective... and they will help the government understand the efficiency of this route," said UES board member Yakov Urinson at the signing ceremony.

"Just by modernising existing stations and changing steam turbines to gas turbines would let us reduce... (carbon dioxide) emissions by 90 million tonnes (a year)."

Russia does not have to cut emissions to satisfy Kyoto's demands because it pollutes around a third less than its quota but companies like UES see the pact's mechanisms as a handy way to raise cash.

Plant modernisation could help UES avoid power cuts such as one that blacked out much of Moscow last month, in an embarrassing reminder of the effects of post-Soviet neglect.

Although UES's emissions have collapsed along with the economy since the end of communism, it still emits more than 300 million tonnes of carbon dioxide -- around two percent of total world emissions.

Urinson suggested Joint Implementation projects could help UES improve energy efficiency by almost a third, which could reduce the world's carbon dioxide emissions by more than half a percent.

Other UES officials said they had 20 projects currently out to tender in Europe.

"We have talks with Austria, Belgium, Germany, Great Britain, these are similar projects," said Andrei Gorkov, head of UES's Energy Carbon Fund, which spearheads Kyoto projects.

"The price of these projects in Russia is less than buying quotas (on the open market), this is because at the moment there is a higher risk. But we hope we can make it so the price will not be lower than quotas."

UES has long led the Russian push for Kyoto-linked projects, but other firms including gas giant Gazprom and aluminum firm SUAL have also expressed an interest. Some experts say investment could top $2 billion by 2012.

© Reuters 2005. All Rights Reserved

Norsk Hydro to close 420-job German plant

Kentucky.com, KY Tue, Jun. 28, 2005 Associated Press

OSLO, Norway - The Norsk Hydro ASA group said Tuesday it will close an aluminum plant in Germany because of high electricity costs, resulting in the loss of 420 jobs.

The Oslo-based petroleum and light metals group said the Stade plant is scheduled to close next year and the company would help staff seek new jobs.

"The ambition is to close the plant as soon as possible, at the latest by the end of 2006," Norsk Hydro said. It also said the supervisory board of German subsidiary Hydro Aluminum Deutschland had approved the closure.

Jon-Harald Nilsen, head of Hydro's aluminum business section, said he would be ready to review the planned closure, though, if there were a substantial improvement in the economic framework for the operation.

Norsk Hydro said the 71,000-ton-per-year smelter is among Germany's smallest, and uses a labor-intensive technology that makes it more vulnerable to high power prices than other smelters.

Norsk Hydro, one of Norway's largest companies, claims to be the world's third-largest integrated aluminum supplier. The group, founded in 1905, has about 35,000 employees in 40 countries.

$100M RusAl HQ to Rise on Sretenka

The Moscow Times, Russia Tuesday, June 28, 2005. Issue 3196. Page 9.

Vedomosti Mike Solovyanov / MT

RusAl is ready to invest $100 million into construction of a new, 37,000-square-meter Class A office complex located on Ulitsa Sretenka in central Moscow, next to LUKoil's headquarters, where the company will move its offices.

RusAl, which is 100-percent owned by Oleg Deripaska's Basic Element holding group, is the world's third-largest aluminum producer. In 2004, it produced 2.67 million tons of aluminum and had revenue of $5.4 billion.

Plans to build the company's new headquarters were communicated to Vedomosti by RusAl's general director, Alexander Bulygin.

A company source confirmed that the firm was planning to acquire a 0.4-hectare plot of land at 13 Ulitsa Sretenka, located between Pushkaryov Pereulok and Bolshoi Sergiyevsky Pereulok and currently owned by the company Mega-M. The deal, which is about to be closed, should happen in July, the source said.

A source close to Mega-M also confirmed that negotiations to sell the site were ongoing. The administration of the Central Administrative District was unaware of the deal when reached for comment but confirmed that the site, currently occupied by a parking lot, was owned by Mega-M.

The new headquarters, which have already been designed by RusAl, will be six- to seven-stories-high and will have four floors of underground parking, said the company's public relations director, Vera Kurochkina. "The new office will allow all company departments to be under one roof," she said.

Currently, RusAl is renting out 11,000 square meters on Nikoloyamskaya Ulitsa, as well as several other offices scattered around the city.

The RusAl source would not say how much the company would spend on land acquisition, adding that roughly $100 million was going to be spent on construction.

Ilya Shershnev, development director at Swiss Realty Group, estimated that the plot could not cost more than $5 million.

In the fall, RusAl will hold a tender to pick the project's future contractor, Kurochkina said.

Market participants were divided in their evaluation of RusAl's plans.

If a company has the money, it makes more sense to build its own offices than to rent for $800 per square meter annually, said Mikhail Getz, commercial real estate director at Blackwood.

According to Nikolai Sidorov, chairman of the board of Absolut Bank, the bank's 5,000-square-meter office on Tsvetnoi Bulvar is worth about $30 million today, while investment into its construction was $15 million.

Oleg Myshkin, director at Colliers International, called the construction of corporate offices a temporary trend.

"If a company's return from its main activities are higher than from property ownership, it is better to rent an office," he said.

Kaiser Aluminum Files Chapter 11 Reorganization Plan

www.labusinessjournal.com 6/29/2005

By SPENCER KALLICK

Los Angeles Business Journal Staff

Kaiser Aluminum Corp. filed a reorganization plan on Wednesday that projects emergence from Chapter 11 bankruptcy protection in the fourth quarter.

Under the plan, the emerging company would be majority owned by two groups of retired employees.

The groups were created in 2004 for salaried and hourly retirees whose medical plans were canceled. The rest of the equity would be distributed to creditors, while pre-bankruptcy shareholders would be wiped out.

The plan would also resolve pre-petition claims ranging from asbestos-related lawsuits to debt and retiree benefits.

All pre-petition personal injury claims related to asbestos, silica, coal tar pitch or hearing loss would be would be permanently resolved through the formation of trusts coming from certain Kaiser insurance policies.

The Foothill Ranch-company filed for Chapter 11 bankruptcy protection in February 2002, citing a slowdown in the aluminum industry after the Sept. 11 terrrorist attacts.

Kaiser had also been plagued by asbestos litigation and increasing obligations for retiree medical and pension costs.

In a press release Wednesday, President and Chief Executive Jack A. Hockema said his company, which produces fabricated aluminum for the aerospace and automotive industries, would return to long-term profitability and emerge "with a solid financial position, a strong balance sheet and the capability to grow in our key transportation and industrial markets."

The plan, filed in U.S. Bankruptcy Court for the District of Delaware, requires approval by Kaiser’s creditors and the court.

Bauxsol begins arriving by rail for I-99 test

Centre Daily Times, PA Wed, Jun. 29, 2005

PORT MATILDA -- Eight rail cars full of Bauxsol, with much more to come, rolled into this small borough on Wednesday to begin a $1 million, summer-long test of a chemical fix for the massive environmental hazard at an Interstate 99 construction site at Skytop.

The cars of Bauxsol, an alkaline red powder produced from aluminum refining waste, were dropped off on a rail siding at the corner of Water Street and South High Street, next to the borough building, where unloading and hauling to Skytop is scheduled for today.

Plans are to use a big track hoe mounted atop the rail cars to put the 675 cubic yards of Bauxsol into trucks that will cycle back and forth for 10 hours between Port Matilda and the acid rock drainage site eight miles east.

It wasn't clear Wednesday what route the trucks would take, but the hauling could thicken traffic for commuters. No part of the I-99 corridor is near the rail cars, and the most direct route on public roads is U.S. Route 220 through Port Matilda and then U.S. Route 322 to Skytop. Today's operation was to begin at 10:30 a.m.

See the full story, and photos, in Thursday's Centre Daily Times.

Aluminum smelter costing $2 billion to be built in Saudi Arabia

Middle East North Africa Financial Network, Middle East

Saudi Economic Survey - 29/06/2005

A group of Saudi investors and businessmen are planning to form a consortium to build the first aluminum smelter in the Kingdom. The gigantic project, which is estimated to cost $2 billion, will be built in the proposed second industrial city of Jubail (Jubail 2). The smelter will have a productive capacity of 500,000 tons in the beginning.

The project was planned in light of the huge demand for aluminum products worldwide, especially in the Kingdom. Global aluminum market witnessed an annual growth of 3%, with a consumption of 28 million tons. The smelter would, in no way, affect the earnings of the existing aluminum factories in the Gulf region. It is noteworthy that aluminum industry is mainly based on natural gas, which abounds in the Kingdom. Saudi Aramco makes available of this raw material to almost all the industries in Jubail Industrial City at reasonable price.

Aluminum Bahrain Company (Alba), the leading aluminum company in the Middle East, has recently launched the fifth smelter line at its factory complex. The project costing $1.7 billion is instrumental in raising the total productive capacity of the company to 850,000 tons annually. Alba is regarded as the largest aluminum smelter in the world other than those in Eastern Europe. Nearly 65% of the aluminum products used in the Gulf region belong to Alba.

Perez Hol, executive chairman of Alba, said that the company started implementing several expansion projects besides opening new markets in the region. The company has plans to open its sixth aluminum smelter as part of increasing its productive capacity. He also noted that some other Gulf countries have also plans to build aluminum smelters. Qatar has plans to build a smelter with a productive capacity of 570,000 tons. Oman recently signed a contract for setting up of a smelter with a productive capacity of 650,000 tons, and this is expected to start production in late 2007. UAE has a large aluminum factory with an annual productive capacity of one million tons.

RusAl Considering Merger

The Moscow Times, Russia 30 Jun, 2005

The world's third largest primary aluminum producer RusAl may consider merging with aluminum firm SUAL, Vedomosti reported Thursday.

RusAl is considering mergers and acquisitions as an important source of further growth as it has an ambitious goal of becoming the world's No. 1 aluminum producer, Alexander Bulygin, the CEO of RusAl said, Vedomosti reported.

"SUAL is interesting to us as any other aluminum company, the size of which would allow our shareholders to keep control in a joint company after a merger with RusAl," Bulygin said. (Reuters)

Kaiser files bankruptcy reorganization plan

Spokesman-Review June 30, 2005

John Stucke Staff writer

Move would salvage key parts of company

Kaiser Aluminum filed its bankruptcy reorganization plan Wednesday, a 3-year effort that would wipe away debts and render its common stock worthless, but would salvage key parts of the once-proud company to keep hundreds of people employed in Spokane.

Anticipated for many months, the plan calls for Kaiser to climb out of bankruptcy and conduct business with a fresh balance sheet and new labor agreements.

Though the plan needs approval from creditors and the Bankruptcy Court, Kaiser has collected support for its reorganization from creditors' committees.

Chief Executive Officer Jack Hockema anticipates Kaiser could emerge from bankruptcy during the fourth quarter of 2005.

"We are now well on our way to completing our goal of emerging with a solid financial position," Hockema said in a press release.

The reorganization plan includes several key provisions for its thousands of retirees and union workers, including majority ownership of new common stock that will be issued upon plan confirmation.

A new trust established for the company's union work force would own more than 11.4 million shares of the new stock – 57 percent of all shares worth an estimated $200 million – plus cash.

Retirees, who lost medical insurance coverage and now receive a pension check from the federal Pension Benefit Guaranty Association (PBGC), will be the beneficiary of a trust holding 1.9 million shares of common stock – or about 9.7 percent of the stock worth an estimated $33 million – plus cash.

The trusts may receive additional money depending on the company's success.

The other significant new stockholders would be the PBGC (16.2 percent of the shares), and a trust established for those with asbestos-related illnesses (6 percent of shares.)

Kaiser filed for bankruptcy protection in February 2002 under crippling debts of $3.1 billion. It listed assets of $3.3 billion, though that number later proved to be overvalued during a time of major economic shifts and the collapse of aluminum plants in the Pacific Northwest.

A dominant corporate presence in Spokane for decades, Kaiser once employed upwards of 4,000 workers, its paychecks underwriting numerous businesses, charities and community events.

Kaiser paid among the highest blue-collar wages in the region – enough for families to own homes, drive decent cars and save money for their children's' education. The benefits included pensions and decent medical insurance coverage. In short, Kaiser was among the most significant underpinnings of Spokane's economy.

But when the company and Steelworkers engaged in the bitter labor dispute beginning in 1998, Kaiser's influence began to dissipate.

Resolution of a strike and lockout was met by an electricity crisis than closed Kaiser's Mead smelter. It never reopened and was sold last year to a scrap company.

Following the terrorist attacks of Sept. 11, 2001, the company's financial picture worsened. Aluminum sales and prices slumped, putting the company in danger of defaulting on its debts.

Executives decided to seek Chapter 11 federal bankruptcy protection, which allows a business to continue operations and restructure its debts.

Kaiser has gone from a firm with 5,800 employees to about 2,000 today. Though it once owned bauxite mines, alumina refineries and smelters around the world, it is now primarily focused on making aluminum products rather than commodities. It will continue to own a 49 percent stake in an aluminum smelter in Wales.

Kaiser's Trentwood rolling mill continues to be a bright spot for the company.

With more than 650 employees and new contracts in place, the massive Spokane Valley factory is central to the success of a restructured Kaiser.

Trentwood provides aluminum sheet to aircraft makers, recently landing an important six-year contract with Airbus.

Venalum signs petcoke contract with Indian company - Venezuela

Business News Americas, Chile Thursday, June 30, 2005 17:10 (GMT -0400)

Venezuelan aluminum reducer Venalum, a subsidiary of state heavy industry holding company CVG, has signed a new contract with India's Oxbow-Rain Calcining for the supply of 100,000t/y of calcined petcoke.

"A new [another] agreement will be signed September-October based on existing stocks and according to the company's [production] timetable," a Venalum spokesperson told BNamericas.

Oxbow-Rain Calcining, located in Visakhapatnam or Vizag City on the east coast of India, has installed capacity of 600,000t/y of calcined petcoke. The material is used in the production of carbon anodes used by Venalum in its production process.

The meeting with Indian businessmen at the Venalum plant is part of a strategy to expand the company's relations with China, Iran, Uruguay, Brazil, Cuba, Spain and Italy to avoid dependence on one supplier for raw materials, the spokesperson said.

The meeting was not only focused on the purchase of raw materials but also on technical assistance and technology transfer for human resources training, he added.

The Venalum plant in Puerto Ordaz in Venezuela's Guayana region is 80%-owned by CVG, with a group of Japanese investors holding the remaining 20%. It is Latin America's largest aluminum smelter, with production last year of 442,000t.

Alcan May Restructure France Mills

Forbes - 06.30.2005, 11:58 AM

In the absence of ready buyers for its two mills in France, aluminum processing giant Alcan Inc. said Thursday that it is considering closing one plant and reducing operations at another.

Both mills have been for sale since November. Alcan said it has started talks with employee representatives at both sites regarding restructuring plans.

Montreal-based Alcan may close its foil-rolling mill at Froges and eliminate all 68 jobs there. The Froges mill's main product line is high-purity foil for the capacitor market. Changing market conditions, including the exodus of electronics manufacturers to Asia, "has made it impossible to maintain the site's operations, forcing us to consider closing the mill," said Michel Jacques, president and chief executive of Alcan Engineered Products.

At its Mercus plant, Alcan said it could stop fabricating high-purity products for the capacitor market and cut 30 of 58 jobs. The Mercus plant would then turn its focus to its super-high-purity products, where Alcan said it holds a competitive position.

Alcan noted it would still continue to seek a buyer for the Mercus plant's super-high-purity product operations.

Earlier this month, Alcan announced plans to cut about 410 jobs in Europe in a move to improve efficiency due to increasing international competition. The company elimated about 300 jobs in Germany and 110 in Switzerland after it realigned certain shaping, automotive and composite materials operations.

Alcan employs 70,000 people worldwide. The company's stock dipped 39 cents in midday trading to $30.06 on the New York Stock Exchange.