AluNews - May 2005

Vedanta withdraws bid for Montenegro aluminium plant

Financial Express, India Monday, May 02, 2005 at 0117 hours IST

NEW DELHI, MAY 1: Vedanta Resource Plc, the London Stock Exchange listed holding company of the Sterlite group, has withdrawn its bid to purchase majority stake in a 1,20,000 tonne aluminium plant owned by the state of Montenegro clearing way for Russian aluminium company Rusal to pick up the deal.

With this, the sole presence of an Indian company in Montenegro has come to an end. "Vedanta has withdrawn from the race to purchase 65.4% of government equity in country’s largest aluminium plant Kombinat Aluminijuma Podgorica (Kap). The company’s decision was communicated after it qualified in the initial round of the bidding process along with three other companies," deputy prime minister of Republic of Montenegro Branimir Gvozdenovic told PTI.

He said that the project may now go to a Russian company Rusal, with which negotiations were on for finalisation of the deal, one of the first major privatisation move in Montenegro since October 2002.

Global Alumina Products Corporation Changes Corporate Name to Global Alumina Corporation

PR Newswire (press release) , 02-May-2005

TORONTO, May 2 /PRNewswire-FirstCall/ -- Global Alumina Products Corporation (Global Alumina) (TSX: GPC.U) announced today that it has filed articles of amendment in the Province of New Brunswick to change the Company name to Global Alumina Corporation. At its Annual and Special Meeting of Shareholders, on Thursday, April 28, 2005, shareholders approved a special resolution authorizing the Company to change its name.

"Global Alumina is singularly focused on becoming the world's leading producer of smelter grade alumina. Management and the Board of Directors wanted to reflect this focus by removing any confusion the word Products brought to our name," said Bruce Wrobel, Chairman and Chief Executive Officer of Global Alumina.

In addition, Bruce J. Wrobel, Michael J. Cella, Bernard Cousineau, Alan J. Gayer, Masumi Kakinoki, Karim L. Karjian and David Suratgar were elected to serve as Directors of the Corporation and PricewaterhouseCoopers LLP was appointed as the auditors of the Corporation at the Annual and Special Meeting of Shareholders.

SOURCE Global Alumina Corporation

Web Site: http://www.globalalumina.com

Ukraine Creates Investment Climate for Russia

Kommersant, Russia 02-May-2005

All at once, a number of enterprises owned by Russia’s business in Ukraine were threatened past week with the change of ownership. A month ago, Ukrainian President Viktor Yushchenko pledged to create good investment climate in the country. The authorities of Ukraine started with the promise to return the stakes held by Russian entrepreneurs back into the state ownership.

Past Tuesday, the Kiev court dissolved the contact entered into with AvtoVAZ-Invest (where SUAL bought out 95 percent late 2004) for 68.01 percent in Zaporozhsky Aluminum Works. Under privatization provisions, the new owner was to invest $200 million in the works in 2001. Following the suit of Ukrainian VTF KrAZ, AvtoVAZ-Invest faced court injunction against any investments released practically straight after the purchase. The ban has survived to-date. In May 2004, the company launched renewal program for the works off the record. But at the end of February, Zaporozhye Region’s authorities accused the holders of Zaporozhsky Works of having failed to meet their commitments and the State Property Fund of Ukraine resolved to recover the works into the state ownership. According to Valentina Semenyuk, who heads the above fund, only some judicial points are yet to be settled. In SUAL, they call the award illegal and hope that more detailed consideration of the case will enable the holding to keep its works.

Ukrtatnafta, where Tatneft’s affiliated AmRuz and Sea Group hold 18 percent, has been tipped as another possible candidate for re-privatization. Ukrainian prosecutors lodged a suit to invalidate the agreement on Ukrtatnafta’s establishment due to "the payment for stocks by securities’ transfer to the company." The prosecutors mean the events of June 1998, when AmRuz and Sea Group became the holders of Ukrtatnafta. The above two companies paid for their stake by promissory notes, which were challenged in 2001-2002. Notwithstanding that the dispute ended in favor of the companies and that Tatarstan formerly denies their affiliation with Tatneft, Valentina Semenyuk announced past week "we intend to take back those stocks, otherwise, the State will be unable to control the works and use it as an instrument to influence the market." Tatarstan authorities rebuffed by saying that such words "call for re-privatization in an aggressive form, which has nothing to do with the Cabinet of Ukraine."

Alexey Ivchenko, board chairman at NAK Naftogaz Ukraine declared past Wednesday the TNK-BP’s 70-percent stake in Lisichansky NPZ refinery was "stolen from the state and, therefore, is to be returned into the state ownership." In respect of that case though, Semenyuk confined to stating that privatization of Lisichansky NPZ is beyond the competence of Naftogaz. She didn’t confirm that the enterprise would be nationalized.

RUSAL may join the league soon. Holder of 30 percent in Nikolaevsky Alumina Works, RUSAL was blamed past April in non-execution of its investment liabilities concerning construction of the aluminum works in the Kharkov Region.

by www.kommersant.com

Kuwaiti firm signs coke plant contract

Gulf Times, Qatar Monday, 2 May, 2005, 01:07 PM Doha Time

KUWAIT CITY: State-owned Kuwait Petroleum Corp (KPC) yesterday signed a major contract with a Kuwaiti-US firm to set up the emirate’s first calcined petroleum coke plant as part of a privatisation plan.

The deal with Petroleum Coke Industries Co (PCI), in which three Kuwaiti private firms own 75% and US Oxbow and Minerals the rest, calls for setting up the plant at a cost of $150mn.

Construction of the plant will start in September and it will go on line in December 2006 to produce 350,000 tonnes of calcined petroleum coke a year, said Wael al-Sager of PCI.

All production is intended for export to Gulf states, Africa, Europe and Japan in addition to Australia and China.

Petroleum coke, produced in refinery coking units, is the essential raw material to produce calcined petroleum coke used in aluminum production.

PCI made the highest bid of $40mn at an auction held by KPC for the commercial licence of the plant, Sager said. According to the contract, KPC pledges to supply raw material to the plant for 20 years.

KPC chief executive officer Hani Hussein said the deal is part of a privatisation strategy aimed at bolstering the role of private firms in the emirate’s oil sector.

Meanwhile, another state-run firm, Kuwait National Petroleum Co said yesterday it expects to start inviting bids for its fourth oil refinery with a capacity of 600,000 barrels per day (bpd) early next year.

"We are still in the front-end engineering stage which is scheduled to be completed in February. After that we will invite bids for the project," KNPC chairman Sami al-Rasheed said.

The new refinery will boost the emirate’s refining capacity to about 1.5mn bpd.

Rasheed said that the cost of the project has not yet been precisely determined, but it will be "well in excess of $4bn".

The giant project will be handed to at least three contractors as it is too difficult to be handled by one, he said. – AFP

New Zealand Sets Carbon Emission Tax at NZ$15 a Ton (Update2)

May 4, 2004 (Bloomberg) --

New Zealand's household power prices will rise at least 6 percent because of a tax on carbon dioxide to comply with the nation's obligation to reduce emissions in terms of the Kyoto Treaty, the government said.

Power generators and factories will pay a tax of NZ$15 ($11) per metric ton of carbon dioxide emitted while burning coal, oil and gas starting in April 2007, Pete Hodgson, convener of the government's ministerial working group on climate change, said in a statement. The tax will be paid when buying the fuels.

New Zealand's government signed the Kyoto Protocol, which binds 35 countries and the European Union to reducing emissions of gases blamed for global warming by 5 percent from 1990 levels. New Zealand's government previously indicated a range for the tax of NZ$15 to NZ$25 a ton.

``It's good to see there are no surprises,'' said Tom Campbell, managing director of Comalco Ltd.'s New Zealand aluminum smelting operations. The company, New Zealand's biggest power user, is waiting to see how the government will mitigate the impact of the tax on its Tiwai Point smelter, he said.

New Zealand's government is exempting its most energy- intensive businesses from the tax so they are not forced to shut or relocate to other countries where carbon is not taxed. In return for the exemption, companies such as Comalco, which uses 15 percent of the country's power, and Carter Holt Harvey Ltd., the country's biggest saw miller, must get emissions from their plants down to world-best practice standards.

Power Price Impact

New Zealand produces about 29 percent of its electricity from gas- or coal-fired power stations, which operate at higher rates when the nation's hydropower lakes are low on water.

The tax on fuel for thermal power plants owned by Contact Energy Ltd., Genesis Power Ltd. and Mighty River Power Ltd. will add about between 0.7 and 1.1 New Zealand cents per kilowatt-hour to the residential price of electricity, the government said. Retail power prices average 17 cents a kilowatt-hour now, according to the Inland Revenue Department's Web site.

The government estimate ``looks to be in the right sort of ballpark,'' said Genesis Power spokesman Richard Gordon. Genesis, operator of the country's biggest coal-fired power station, is still analyzing the impact of the tax on industrial customers, most of whom take power directly from the national grid at half- hourly prices, he said.

``Confirming the level at $15 per ton provides welcome certainty,' Contact Energy Chief Executive Steve Barrett said in a statement. ``The actual impact of the carbon tax on electricity prices will not become clear until it is introduced.''

After allowing for the exemptions the government is negotiating, the tax will reap about NZ$360 million a year, Hodgson said. The tax will add about NZ$4 a week to the household cost of power and gasoline, Hodgson said.

To contact the reporter on this story:

Gavin Evans in Wellington at gavinevans@bloomberg.net

A ‘Smelter in the Park’ in Brunei?

Bru Direct, Brunei Darussalam 03-May-2005

By CT Hj Mahmod

Bandar Seri Begawan - One of the world's most efficient aluminium smelters, Portland Aluminium, located in small town Portland in Victoria, Australia, is today a tourist attraction known as `Smelter in the Park.' Since public tours began in 1990, it has received over 108,000 visitors.

Alcoa offers free tours to visitors, allowing them the chance to view a modern and world-class aluminium smelter in action. Through this, visitors can also experience the existing harmony of both the industry and environment.

Can this `Smelter in the Park' concept be made possible in Brunei Darussalam? The world's leading producer in aluminium, Alcoa, believes so. The company sees tremendous potential in our small oil-rich state.

According to Alcoa Primary Development Group President Mike Baltzell, who was recently in the Sultanate, the company looks for competitive and reliable energy supply from around the world.

This is the first driver, he said, adding "the other things that we look for is available workforce that are trained or can be trained."

"We also look for the possibility of a port because we bring in large quantities of raw material - roughly about 600,000 tonnes of processed alumina oxide or alumna, if we are talking about producing 300,000 tonnes of aluminium," he added.

Brunei has all these potentials to offer - reliable energy supply, well-educated young generation who can be trained to manage and operate the Aluminium facility, and the Pulau Muara Besar to bring in theraw materials.

For Brunei, the raw materials would most likely come from Western Australia, said Mr Baltzell. He added, Alcoa has about 14 million metric tonne capacity in the world to make alumina, which is out of the total world production of around 50 million metric tonnes: Alcoa has about 350 locations in 40 countries across the globe, where half of their production is located in Western Australia and the other half is produced in other parts of the world.

According to the CEO of the Brunei Economic Development Board (BEDB), one of the Sungai Liang Industrial projects is the Aluminium Smelter, which is the `Jewel of the Diversification Crown' for it brings in tremendous spin-off opportunities.

Take it from the investors' point of view - Mike Baltzell who has been in the primary smelting business for over two decades has seen the real power of what sort of spin-offs are created from the aluminium smelting industry. This is based on his experience with Portland Aluminium that was set up in the 1980s.

"There are many businesses that started initially to support the smelter - for example repairing the equipment - and now the companies have gone international, like in Singapore and in Asia region, offering the same services," said Mr Baltzell.

Alcoa is an integrated producer which starts at mining, and then refining it into alumina followed by smelting it into aluminum. It is then further processed into all sorts of aluminium materials such as aeroplane and automobile parts, frame components and wheels, wires and cables.

So, there is the integrated chain of spin-offs that says the output of the smelter can go to any kinds of upstream type of processing such as wheel plants, whilst the other sort of spin-off happens in the facility itself, like the high capital investment facility of equipment that needs support services.

According to Mr Baltzell, from a job perspective, there is one job in the smelter, and four jobs in the community. Probably, at least three of which are directly-related like repairing the equipment, and the indirect jobs are those in the supporting services.

Alcoa had its fair share of challenges. In the past, the company experienced resistance from the Eastern Iceland community to construct a 322,000 metric-ton-per year aluminium smelter at Reydarfjordur.

But after extensive community input and environmental studies, Alcoa received approval and support from Iceland parliament on the project.

It is rather the fear of the unknown, Mr Baltzell believes. He explained that for people who do not know the industry, there is concern, and the company understand that and is doing the best it can to help people understand that.

"What we would like, at some point appropriate, is to have a fair audience to say lets talk, let us understand the issue, let us share and tell you what we do," he added.

Alcoa had to launch a 'sustainability conference' to consult with the Eastern Iceland community- in order to help the company understand the community's expectations and fears. This also helped Alcoa to deal with - in any way possible - as to how both can set objectives in the future.

At Alcoa, sustainability is defined as using their values to build financial success, environmental excellence, and social responsibility through partnerships in order to deliver net long-term benefits to their shareowners, employees, customers, suppliers and the communities in which they operate.

"The community is really part of helping us be the best in what we can do," believes Mr Baltzell.

Alcoa, who in September 2003 signed a MoU with BEDB for the Aluminium Smelter plant; is one of foreign investors waiting for the green light and knows that the determining factor of the project is the energy availability and pricing, Asked an the Environmental Impact Assessment, he answered the "EIA are different in different parts of the world, but we need to understand the issue in Brunei first."

"The issue here is energy, if there is no energy than there is no point, we need to begin to understand what the process is and what is to be expected so we can have a better feeling for Brunei, he said.

"What we really want to do is create capacity and for the community to provide their services.

This is the sort of the essences of sustainability on the social side," he said. He also believes it is possible that they will meet the deadline of making the final investment decision in the first or second quarter of 2006. -- Courtesy of Borneo Bulletin

Alba set for project milestone

Gulf Daily News, Bahrain Thursday 5 May 2005

MANAMA: Alba is still well-positioned to complete the start-up of its new Line 5 project in less than 100 days, it announced yesterday.

If it does so it will set a world aluminium standard for the fastest start-up of a reduction line.

"The company has energised 288 pots out of a total of 336 on its new reduction line," said chief executive officer Bruce Hall.

"The 288 pots, the size of a standard potline, were energised in just 65 days following the launch of Alba's 100 Day Safe Start-up challenge."

Alcoa, Government of Jamaica To Expand Jamalco Alumina Refinery By 150,000 MTPY

1st Phase of 1.5 Million MTPY Expansion, Doubling Jamalco

Business Wire (press release), CA

NEW YORK--(BUSINESS WIRE)--May 5, 2005--Alcoa (NYSE:AA) today announced that its Alcoa World Alumina and Chemicals (AWAC) affiliate and the Government of Jamaica have approved plans to immediately expand the Jamalco alumina refinery in Clarendon, Jamaica by 150,000 metric tons per year (mtpy) as the first phase of the overall 1.5 million mtpy capacity expansion. This first phase will cost approximately $77 million, with the commitment of another $25 million to finalize detailed engineering on the full project over the next three months. Full production from the first phase is expected by the end of 2006.

"This investment pulls forward a portion of our plan to expand the Jamalco facility by more than 1.5 million metric tons," said Bernt Reitan, President of Alcoa Primary Products. "There is concrete evidence of progress in our Jamalco facility and it has earned the right to grow. Pulling forward a portion of our larger expansion will allow us to leverage globally with other brownfield and greenfield projects to reduce our costs and gain efficiencies," said Reitan.

A final investment decision on the larger expansion project, which would more than double the refinery's total capacity to at least 2.8 million mtpy, is expected in the third quarter of 2005. As part of that project, AWAC ownership in the refinery will move from 50 percent to at least 70 percent. The government of Jamaica will continue to own the remaining percentage. Upon approval, it is expected that the expansion project will be completed by the end of 2007.

Expansions at Jamalco stem from a 2002 agreement with the Jamaican government to remove a nearly 30-year-old levy on bauxite in order to encourage investment. As a result of that levy removal and investments to expand, the Jamalco refinery is among the world's lowest-cost refineries.

AWAC is a global alliance between Alcoa and Alumina Ltd, with Alcoa holding 60 percent.

Alcoa is the world's leading producer and manager of primary aluminum, fabricated aluminum and alumina facilities, and is active in all major aspects of the industry. Alcoa serves the aerospace, automotive, packaging, building and construction, commercial transportation and industrial markets, bringing design, engineering, production and other capabilities of Alcoa's businesses to customers. In addition to aluminum products and components, Alcoa also markets consumer brands including Reynolds Wrap(R) foils and plastic wraps, Alcoa(R) wheels, and Baco(R) household wraps. Among its other businesses are vinyl siding, closures, fastening systems, precision castings, and electrical distribution systems for cars and trucks. The company has 131,000 employees in 43 countries and has been a member of the Dow Jones Industrial Average for 45 years and the Dow Jones Sustainability Indexes since 2001. More information can be found at www.alcoa.com

Forward Looking Statement

Certain statements relate to future events and expectations and as such constitute forward-looking statements involving known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of Alcoa to be different from those expressed or implied in the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include changes in environmental assessments, governmental alterations, legislation and other risk factors summarized in Alcoa's 2004 10-K report and other SEC reports.

Contacts Alcoa

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

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

Mobile, 724-422-7844

Counting on Bauxol to neutralize acid rock

Centre Daily Times, PA Sun, May. 08, 2005

In years past, in perhaps a more innocent age, the phrase "acid rock" conjured images of Iron Butterfly and the band's show-stopping "In-A-Gadda-Da-Vida" onstage at the Fillmore.

But for the past year and a half, in a more world-weary Centre County, "acid rock" brings to mind iron pyrite, the work-stopping mineral found in abundance at the Interstate 99 construction site on Skytop Mountain.

And a future generation may free-associate acid rock and Bauxol -- or so state Department of Transportation officials are hoping.

Bauxol -- made from the highly alkaline substance left over when aluminum is manufactured -- will be injected in and around the massive spoil piles at Skytop later this month or in early June to test whether it will neutralize the acidic drainage that threatens to devastate Buffalo Run and groundwater in and around the road project.

"Maybe it will be wonderful, maybe it will only be half wonderful, maybe it won't be nearly as wonderful as we think," a state Department of Environmental Protection official said last month.

S'Wonderful? S'Marvelous? S'Miraculous?

At this point, it's worth a shot.

But it promises to be an expensive shot.

PennDOT is planning to inject 4,000 tons of Bauxol produced in the Virgin Islands by an Australia-based company. A conservative estimate puts the cost at about $16 million.

PennDOT recently estimated total cleanup costs at Skytop at $25 million -- that's on top of the original $40 million that building the 1.4-mile stretch of highway was expected to cost.

That would pay for a lot of vintage albums, T-shirts and even collectible concert posters.

It was September 1968 when the members of Iron Butterfly recorded their 17-minute epic. It hasn't quite been that long since the last staccato jackhammer and roaring earthmover fell silent on Skytop. But it seems that way.

And the piles of stone laced with iron pyrite are still there.

Bakiyev, Rusal chairman discuss investment projects

Interfax.ru, Russia May 8 2005 11:07AM

MOSCOW. May 8 (Interfax) - Kyrgyzstan's acting President and Prime Minister Kurmanbek Bakiyev said he had had talks with Russian Aluminum (Rusal) chairman Oleg Deripaska earlier on Sunday.

"We discussed ways to involve Rusal in Kyrgyzstan's economic projects," Bakiyev told a news conference at Interfax in Moscow on Sunday.

"It's a serious investor which has serious plans," Bakiyev said.

He said the talks had dealt with plans to build an aluminum enterprise in Kyrgyzstan and with other investment projects, including in the gold-mining industry.

Alcoa invests in Russian wheels

Manufacturer.com, UK 09-May-2005

Alcoa announces a $37 million investment in its newly acquired Belaya Kalitva wheel fabricating facility.

"All of our investments will strengthen the ability of the plants to compete in the world market," said Alain Belda, Alcoa Chairman and CEO. "And we are already beginning to see results. Through our work so far we have now begun to service North American automotive OEM customers from this plant with forged specialty wheels. This is a good example of how we can take these assets, integrate them into the Alcoa system, and better serve our customers around the world. We envision these improvements to our heat-treated plate and sheet capabilities to generate similar types of results."

This Belaya Kalitva investment is included in Alcoa's previously announced 2005 capital spending plan of approximately $2.5 billion, of which $1.6 billion is dedicated to growth projects.

CMS and Chinese companies sign MoU for aluminium project

Malaysia Star, Malaysia 09-May-2005

BY B.K. SIDHU

SARAWAK-BASED Cahya Mata Sarawak Bhd (CMS) yesterday signed a memorandum of understanding (MoU) in Shandong, China, with Luneng Group Ltd Co and Sinohydro Corporation for the three parties to undertake a feasibility study to set up, own and operate an aluminium smelter in Sarawak.

"The feasibility study will form preparations towards a project proposal which will be submitted to the Malaysian Government as formal registration of the consortium’s interest,’’ CMS said in a statement yesterday.

It is not known how long the parties will take to conduct the feasibly study but it would commence soon.

A source said CMS was "really keen to set up, own and operate the smelter, thus the reason to find a good partner so that it could be seriously considered by the Government as a candidate to build the smelter.’’

But CMS is not the only party that is keen on the smelter. Sarawak deputy Chief Minister Tan Sri Dr George Chan Hong Nam had earlier said five foreign investors were eyeing the proposed aluminium smelter project in Bintulu, Sarawak.

He said the companies that were interested in the project were from Canada, China, the Middle East and Australia. Investment in the aluminium smelter project is estimated at about RM10bil, Chan had said.

Smelter Asia Sdn Bhd, which is owned by businessman Syed Mokhtar Albukhary and Dubai-based businessman Mohamed Ali Alabbar, was the first company to show interest in building a smelter in Similajau, Bintulu.

The aluminium smelter would source power from the nearby US$1.2bil Bakun hydroelectric 2,400-megawatt dam project, which is under construction in Sarawak.

CMS in its statement said the parties – CMS, Luneng and Sinohydro – have agreed to work together to assess the viability of setting up an aluminium smelting plant, port and supporting infrastructure facilities and utilities, including participation in power generation and supply to the plant.

"There is a huge demand for aluminium, including from China. Should the feasibility study prove to be viable, the prospects are highly lucrative.

"Sarawak is well-positioned to tap this opportunity with the abundant potential availability of power for the aluminium smelter plant. Other industries which require large, stable and reliable power should consider locating and investing in Sarawak,’’ said CMS group chairman Datuk Seri Sulaiman Abdul Rahman Taib.

Luneng Group is involved in power plant development and generation, minerals mining, civil engineering works, financial services and manufacturing in China.

Sinohydro, formerly known as China National Water and Hydropower Engineering Construction Company is China’s leader in the water and hydropower sectors.

Yesterday’s signing in Jinan was witnessed by Sarawak Chief Minister Tan Sri Abdul Taib Mahmud and Energy, Water and Communications Minister Datuk Seri Dr Lim Keng Yaik.

Maoists raze Hindalco camp in six-hour attack

Money Plans, India 5/9/2005 8:18:00 PM Source : Moneyplans.net Staff

In one of the worst Maoist attacks in recent months, 200 guerrillas in Chhattisgarh raided a mining camp of the aluminium major Hindalco and set ablaze the complex destroying buildings, vehicles and documents.

The attack on the Hindalco camp in Surguja region, close to the Jharkhand border, started around 5 p.m. Sunday and continued for about six hours, officials here said.

Reports said the guerrillas ordered Hindalco's officials to use the company's bulldozers to raze the camp or face death.

"The Maoists totally devastated the Hindalco guest house and the mining monitoring office. Besides, they set two Marshal jeeps and all furniture and documents on fire," said an official.

According to police sources, the Maoists kept four officials hostage while they razed the camp causing damages estimated at Rs.10 million.

China to let more smelters import taxed alumina

Reuters Tue May 10, 2005 2:04 PM GMT+02:00

By Polly Yam

HONG KONG (Reuters) - China, poised to cancel tolling and processing of aluminium within three months, will allow more of its largest and most efficient smelters to import their main raw material to cover a looming shortage, industry officials said.

But scrapping tolling and processing, which allows smelters to import alumina duty-free as long as they export the end product, would still halve the number of authorised importers in China to about 15, the officials said on Tuesday.

State-owned trader Minmetals, Aluminum Corp. of China Ltd. and six other smelters are the only firms who regularly receive permits to import alumina for processing into aluminium for either domestic or overseas sale.

Some of a further 20 smelters currently importing the white, powdery alumina for tolling and processing would soon be granted similar permits, the officials said.

Production under these permits attracts an 8 percent import tariff on the raw material and a 17 percent value-added tax on the output, missing out on the tax breaks for imports wholly dedicated to exports.

China plans to end tolling and processing, which currently uses about 30 percent of its imported alumina, to reserve more of its aluminium output -- and the power used to produce it -- for its fast-growing economy, which grew 9.5 percent in the year through the first quarter.

Smelter officials said they expected the ban on tolling and processing to be enforced from July 1.

Beijing may allow smelters with annual capacity of 100,000 tonnes and approval from the powerful State Development and Reform Commission to join those companies already permitted to import alumina, the industry officials said.

China, home to more than 100 aluminium smelters, has banned smaller plants, or those built without central government approval, from directly importing any alumina.

TIME TO IMPROVE

Smelters that do not meet the requirements would be given time to improve, the officials said, adding the State Development and Reform Commission was asking selected smelters to submit information by May 15.

Environmental and land permits were also required, they said.

The Ministry of Commerce had already selected 11 smelters, including Wanji Aluminium Co., Zhongfu Industry Co. Ltd. and Sanmenxia Tianyuan Aluminum Co. Ltd., as possible importers, they added.

China imports about half of its alumina, but supply has lagged rapidly expanding smelter capacity in recent years.

Major suppliers include BHP Billiton Plc./Ltd., Rio Tinto Plc./Ltd. and Alcoa Inc.

When China ends tolling and processing, smelters' costs for importing alumina would rise about 26 percent, the officials said, forcing inefficient plants to cut output in the second half of the year and some to close from next year.

China will scrap similar provisions on iron and steel from May 19, state media said on Tuesday, though it would allow deals approved by the government before that date to be extended until the end of July.

Large aluminium smelters have asked Beijing for extra time to finish term contracts for alumina imports and aluminium exports, saying they may not otherwise be able to pay huge penalties for defaulting on commitments with overseas suppliers and customers.

Industry sources said the government might allow smelters holding 2005 contracts to extend the provisions until October 1, while smelters with multi-year contracts would be allowed to meet their commitments.

The other smelters currently allowed to import alumina not for tolling and processing are Lanzhou Aluminium Co. Ltd., Yunnan Aluminium Co. Ltd., Jiaozuo Wangfang Aluminium Industry Co. Ltd., Baotou Aluminium Co. Ltd., Shanxi Guanlu Co. Ltd. and Qingtongxia Aluminium.

China's Chalco to launch 1.5 bln usd alumina jv in Vietnam - report

Forbes 05.10.2005, 01:23 AM

BEIJING (AFX) - Hong Kong-listed Aluminum Corp of China Ltd (Chalco) (HK 2600) is planning to launch an alumina producing joint venture with a total investment of 1.5 bln usd in Vietnam, the China Business News reported, citing company sources.

The company is hoping to sign a contract in July with its partners -- the Vietnamese government and China Nonferrous Metal Industry's Foreign Engineering and Construction Co Ltd (SZA 000758) -- the paper said.

The venture, located in southern Vietnam's Dak Nong province with estimated alumina reserves of 2.67 bln tons, is expected to begin production by the end of next year.

'The project, headed by China's National Development and Reform Commission, will be mainly funded by the two Chinese companies,' the paper quoted Chalco's manager of overseas business Zhao Qiuguo, as saying.

'Chalco is determined to obtain over 51 pct ownership in the joint venture,' Zhao added.

No further details were provided and no one from either company was immediately available for comment.

Chalco's 2004 net profit rose 75.2 pct year-on-year to 62.2 bln yuan, the company said earlier.

(1 usd 8.3 yuan)

Important Jamalco expansion

Jamaica Gleaner, Jamaica Tuesday | May 10, 2005

Opinion:

LAST WEEK'S coordinated attacks against security personnel overshadowed an important development in the local bauxite/alumina industry. Ground was broken at the Jamalco alumina refinery at Halse Hall in Clarendon for a US$800 million (J$49 billion) expansion project. This is the single largest expansion project in the more than 50-year history of the bauxite/alumina industry in Jamaica. The project also represents the largest single investment in the local economy.

The injection of US$800 million into the industry is a major vote of confidence by foreign investors in the local economy as well as in the overall health of the global aluminium industry into the foreseeable future.

The Prime Minister, who was on hand to break ground at this historic occasion, rightly regarded this major investment as a stimulus for increased inflows of foreign direct investment into the Jamaican economy.

Undoubtedly, the Jamalco expansion will create employment in construction and other areas and will have a positive spin-off effect on business activity. We must grasp the opportunity to invest in training the workforce, who will be critical to the sustainability of the project, and these employees must be encouraged to adopt and adapt responsible attitudes that go beyond their own short-term interests.

Not to be overlooked is the salutary effect the project will have on rural development from skills aquisition by employees to the building of infrastucture that will serve the interests of communities in close proximity to the plant.

But even as we welcome this important project, we must not ignore the fact that bauxite is a non-renewable resource whose extraction comes with significant environmental costs. A responsible Government must therefore plan carefully for a future without bauxite.

The Jamalco expansion, which will move the ownership of the ALCOA affiliate backing it from 50 per cent to 70 per cent, has come in response to the removal of the 30-year-old bauxite levy which was done to encourage investment in the sector.

The levy was never specifically used to finance alternative sustainable development projects as was intended, but instead was consumed in general revenue even as the debt burden continued to rise.

A portion of the returns to the Government from this major expansion project should therefore be carefully earmarked for sustainable development projects with special concerns for the needs and past neglect of rural Jamaica. This arrangement should be promptly made perhaps even to the extent of institutionally sequestering the funds away from the day-to-day budgetary requirements of the Government.

It is equally imperative that the Jamalco expansion be protected from extortion by criminal elements who have plagued other development projects like Highway 2000.

Workers in talks with Alcan

Daily Mail - Charleston, WV Wednesday May 11, 2005

George Hohmann Daily Mail business editor

United Steelworkers Local 5668 and Alcan, the owner of the big aluminum mill at Ravenswood, are in face-to-face negotiations over a new contract.

"Things are going extremely positive and well," said James Guillow, vice president of human resources at the plant, on Tuesday. "The meetings to date have been very cordial and we're very optimistic about the process."

The current contract expires on May 31. The mill employs about 1,000 people.

Talks began the first week of May, Guillow said. He declined to say what the major issues are and would not reveal where the talks are taking place.

Local 5668 member Ken Butcher, who answered the phone Monday at the union hall, said, "They are negotiating. That's all the union is going to say."

A woman who answered the phone at the union hall Tuesday said another negotiating session was scheduled today.

David Patrick, president of the local, could not be reached for comment. The woman at the union hall Tuesday said Patrick wasn't expected to return until Monday.

Ravenswood has a long history of labor disputes.

The Steelworkers' existing contract at the Ravenswood rolling mill was approved in December 2002 by a 395-324 vote after the local had rejected two similar offers. At the time the contract was approved, 202 workers had just been laid off and the mill's owner, Pechiney Rolled Products, faced possible bankruptcy.

The rolling mill has since changed hands. Alcan bought Pechiney in 2003. However, the U.S. Justice Department had antitrust concerns and required Alcan to operate the mill at arms length until January, when Alcan resolved the antitrust issues and took over active management of the plant.

Michel Jacques, president and chief executive officer of Alcan Engineered Products, said in January, "As we will now have full access to the Ravenswood plant, we intend to carefully examine all options and to work hard to find a solution for its long-term future.

"Alcan has high expectations for its business units," Jacques said. "I am confident that with the involvement and support of Ravenswood's management team and employees, further improvement can be made toward achieving our expectations."

Alcan spokesman Alexander Christen said Tuesday the company is still examining its Ravenswood options.

"As with any decision of such importance, it's about doing it right and getting it right," Christen said. "That's where we are now -- taking the time to make the right decision.

"We are encouraged by the progress that the management team has made," he said. "We are quite confident that with the support of the Ravenswood management team and employees, we will be able to make further improvements toward achieving our expectations."

Ravenswood Mayor Clair Roseberry said he's heard very little about the negotiations. "I always had a lot of contact with people who worked down there, but most of them are retired now," he said. "Neither the union nor the company has talked to me."

The aluminum operations in Ravenswood were formerly known as Kaiser Aluminum, Ravenswood Aluminum and Century Aluminum.

The operations were divided in 1999 when Century Aluminum kept the reduction plant, which produces primary aluminum, and sold the rolling mill to Pechiney. The reduction plant is next to the mill.

Contact writer George Hohmann at 348-4836.

RusAl viewing scenarios to develop bauxite mining

RosBusinessConsulting, Russia 11.05.2005,

Moscow 11:22:31.RusAl is considering the opportunity to acquire new bauxite-mining assets, Steven Hodgson, director of the company's alumina division, has stated at a briefing today. He said that the company was getting ready to sign a memorandum of understanding with the government of Venezuela, where RusAl proposes to set up an alumina plant alongside a bauxite-mining development. The date for signing the memorandum has not yet been settled.

Furthermore, a due-diligence analysis of Indian aluminum and ore-mining plants owned by the Vedanta company in the state of Rusan is being held. Also, the company is weighing up a number of productive bauxite deposits in Cambodia, Malaysia and Vietnam. Hodgson reiterated that RusAl had launched a joint venture together with the Guyana government for mining bauxites to be refined at RusAl's Nikolayev alumina plant.

FOCUS: Australia Aurukun May Have Fewer Takers Than Seen

Yahoo News Thursday May 12, 10:51 AM

By James Attwood Of DOW JONES NEWSWIRES

SYDNEY (Dow Jones)--Queensland's provincial government would like to think most big mining companies are eyeing the $1.5 billion alumina concession in Australia's remote northeastern tip, but industry watchers say Chinese and Russian groups appear to be the only serious contenders for the project.

The Queensland government reclaimed the Aurukun bauxite leases last year from Alcan Inc.(AL) charging the company of failing to act on a 1988 development deadline.

Subsidiaries of Tipperary Corp. (TPY) and U.K.-based Billiton had previously withdrawn from the Aurukun joint venture with Alcan's Pechiney, formed in 1975.

The state government is now keen to get the mine and alumina refinery project back on track, spending A$11 million since last year to drill 575 holes, with plans to begin an international bidding process later this year.

Analysts such as Global Mining Research's Tony Robson, however, question the estimated $1.5 billion project's current feasibility, given its relatively low grades, recent increases in input costs such as steel and fuel, as well as the strong Australian dollar.

But Robson said the project does appear strategically attractive to Aluminium Corporation of China or Chalco and Russian Aluminium (Rusal), given their need for alumina and the desire to lift their international profiles.

Michael Komesaroff, principal at Urandaline Investments, agreed the Chinese and Russians look "desperate" enough to develop the project as it stands, while multinational mining companies are just "putting their foot on something worth the value of the option."

"(Chalco and Rusal) will be that little bit more desperate than the multinational players given their lack of exposure in international projects and shortage of domestic resources," said Komesaroff, whose Brisbane-based firm specializes in Asian metals projects.

Govt Says Project Feasible; Interest High

Despite doubts about the quality and quantity of ore, as well as the feasibility of developing a bauxite mine and alumina refinery in such an isolated area, the government's list of prospective bidders is impressive.

It includes industry heavyweights BHP Billiton Ltd. (BHP); Rio Tinto plc (RTP), through subsidiary Comalco Ltd.; Alcan Inc.; Alcoa Inc. (AA); Mitsubishi Corp. (8050.TO); Xstrata plc (XTA.LN); Rusal and Chalco.

"From where I sit, there is unprecedented interest in this deposit. I'm more than happy at the way things are going," Queensland Minister for State Development & Innovation, Tony McGrady, told Dow Jones Newswires.

He declined to comment on the project's investment requirements, which some in the industry put at up to $500 million for the mine and $1 billion for the refinery.

"All I can say is (that the investment required will be) massive, but the resources and the returns are also massive," McGrady said, ruling out any subsidies to sweeten the deal.

He defended the feasibility of developing a large scale mining and processing project in the remote, cyclone-prone far northern Queensland.

"You don't get mining in the main street of Brisbane; all mines are out in the bush and we're not saying the refinery has to be built on site; it can be built in Townsville, Gladstone or wherever," McGrady said.

"Of course it's economical in the current cost environment," he said. "Don't take it from me, just look at the list of companies - not just expressing an interest, (but) keen (interest). Particularly the Chinese and the Russians, they're more than keen to become involved."

Comalco Shelving Second Phase A Tactic?

Each prospective bidder has its own reasons for taking an interest in Aurukun.

Comalco's nearby bauxite and alumina infrastructure could, for example, provide the necessary synergies for developing Aurukun cost-effectively.

McGrady, while stressing the concession will include a refinery, didn't rule out the winner using Comalco infrastructure.

An analyst, who preferred not to be named, said Rio Tinto's recent shelving of a second phase expansion at its Comalco refinery, citing cost constraints, could be a way to pressure the government for the Aurukun concession.

On the other hand, China's dearth of high grade bauxite makes domestic alumina processing expensive for Chalco, while Rusal depends on alumina suppliers such as Alcoa to keep its four Russian aluminum smelters running.

Last year, Rusal bought a 20% stake in Queensland Alumina Ltd. in a deal worth in excess of $400 million.

Neither Chalco nor Rusal is expected to have problems with Australia's foreign investment review process if they win the concession.

Among other prospective bidders, Alcan, through Pechiney's earlier involvement, has first hand knowledge of the project while Xstrata, after an unsuccessful takeover bid for WMC Resources Ltd. (WMC), is in a strong position to continue adding to its coal, copper and zinc assets in Queensland.

But how keen many of them are to seriously bid remains the million-dollar question.

Russian Aluminium Producer Mulls Projects in India, Guinea and Venezuela

MOSNEWS, Russia 11.05.2005 12:19 MSK (GMT +3)

Russia’s largest aluminium producer Russian Aluminium (RusAl) announced on Wednesday, May 11, that it plans to increase its presence abroad. Speaking at a press conference Steven Hodgson, managing director of RusAl’s alumina division, said that the company is considering a possible participation in the alumina production project along with India’s Vedanta.

"Everything here is at a very early stage. We consider this project as one of the possibilities to expand our business," said Hodgson, quoted by RIA Novosti.

He noted that RusAl is also considering participation in bauxite projects in Guinea and Venezuela. "We are at a stage of signing cooperation memorandum with the Venezuelan government," RusAl’s manager said.

Steven Hodgson also said that by 2013 his company plans to increase production of alumina to 8 million tons as compared with 3.14 million tons in 2004, while production of aluminium will be increased to 5 million tons as compared to 2.67 million tons in 2004. "While we are not the largest producer of aluminium, we are its largest exporter," said Hodgson, noting that RusAl exports about 2 million tons of aluminium annually.

He also reminded reporters that at the present time the Russian producer is opening up offices and trade missions abroad. In particular RusAl recently opened branches in Japan and Singapore and a trade representative office in Australia.

Russian Aluminium is one of the world’s three largest producers of aluminium. At the present time RusAl accounts for 10 percent of world and 75 percent of Russian production of primary aluminium

Alumina prices decline on Chinese import cut

Financial Express, India Friday, May 13, 2005 at 0000 hours IST

May 12: Alumina prices dropped after China, the world’s larges consumer of the raw material used to make aluminum, decided to tax imports.

China is expected to put an 8% import tax and a 17% value added tax on alumina bought into the country and turned into metal for export, the Beijing Antaike Information Development Co said in April. The government is trying to curb the aluminum industry’s growth and limit China’s reliance on imported metals.

Some consumers may be holding off from buying alumina in expectation that some inefficient Chinese smelters will close, said Andy Mohinta, an analyst in London at JPMorgan & Chase Co, in a telephone interview. "The whole taxation issue is causing a lot of uncertainty," he added. Spot alumina prices dropped $20, or 4.4%, last week to $430 a tonne, according to Metal Bulletin data. That’s the first drop since July.

Prices averaged $404 last year compared with $271 in 2003. Aluminum smelters need two tonne of alumina, a white powder, to make one tonne of aluminum.

Alumina demand will exceed production this year, John Marlay, chief executive of Melbourne-based Alumina Ltd, said in a May 10 presentation at an investor conference in Noordwijk aan Zee, the Netherlands, organized by Merrill Lynch & Co Marlay’s company owns 40% of Alcoa World Alumina & Chemicals, also known as AWAC, the world’s biggest alumina producer, with a quarter of the market. "There is a short-term crunch," Mr Mohinta said. JPMorgan forecasts a production shortfall this year of as much as 80,000 tonne. Increases in output will mean a surplus of 1 million tonne next year, he said.

Rio Tinto Group, the world’s third-largest mining company, in November began production at its Comalco refinery in Queensland, Australia. AWAC and the Jamaican government said last week they will spend up to $102 million on a 150,000-tonne expansion of the island’s Jamalco refinery. Alcan Inc, the world’s second-biggest producer, is spending $1.3 billion to expand its Gove refinery in Australia.

By Thomas Kutty Abraham

Reuters India, India 13-May-2005

BOMBAY (Reuters) - India's Ashapura Minechem Ltd. has received state government approval to build a 500,000-tonne alumina plant in Gujarat, company officials said on Thursday.

Ashapura will spend 11.9 billion rupees ($275 million) on the first phase of the plant in the Kutch district of Gujarat, Managing Director Chetan Shah told a news conference.

"It's a big project and we are confident we can successfully build it by 2008 and run it," he said.

Ashapura shares rose the day's maximum permissible limit of 10 percent to a new all-time high of 465.95 rupees after Reuters reported earlier that the company had approval for the project.

Shah said with the alumina project, Ashapura Minechem's annual turnover should touch 15 billion rupees within five years.

The Ashapura group as a whole, which has shipping and other mineral interests, expects turnover to rise to more than 8 billion rupees in 2005/06 from 6 billion last year. Ashapura mines bauxite and produces industrial minerals such as bentonite, barytes and bleaching clay.

Ashapura, which bid for the alumina project in an equal joint venture with Chinese firm Sichuan Aostar Aluminium Co. Ltd., a unit of Sichuan Electric Power Corp., edged out the other bidding team, Man Industries Ltd. and U.S.-based Aluchem.

Shah said the joint venture planned to raise 8.5 billion rupees in debt to fund the project, while the remaining 3.4 billion would be equity held by the founders.

The Chinese firm, which runs a 330,000-tonne aluminium plant in China, will buy 75 percent of the alumina produced at a price linked with London Metal Exchange (LME) rates, Shah said. The remaining 25 percent would be exported to other countries.

Ashapura said it would raise the alumina plant's capacity to 1 million tonnes at a later stage.

Alumina, an intermediate product extracted from bauxite ore, is smelted to produce aluminium. Around 2 tonnes of alumina are required to produce a tonne of aluminium. India is estimated to have about 3 billion tonnes of bauxite reserves.

Govt steps up sales plan for Aurukun

Brisbane Courier Mail, Australia 13may05

James McCullough

ABOUT 50 of the world's most powerful aluminium executives descended on Brisbane yesterday as the State Government accelerated its program to try to sell the Aurukun bauxite deposits on Cape York Peninsula.

The delegates, including executives from China, India, Russia, Asia and the US, assembled to discuss industry issues and the launch of the inaugural Australian aluminium industry's first "sustainability" report.

The report details the industry's performance in production, exports, land use and rehabilitation, greenhouse gas emissions, energy use and energy efficiency, recycling of aluminium, spent potlinings, fluoride emissions, and water use and conservation.

The report is viewed by the industry as a key step in opening dialogue with stakeholders, a frank assessment of the economic benefits the industry delivers to Australia and the impact the industry has on the community and the environment.

As the group assembled State Development and Innovation Minister Tony McGrady announced Brisbane-based IMC Consultants would evaluate the quality of the Aurukun deposits.

Mr McGrady said the Aurukun bauxite project had the capacity to create billions of dollars in wealth and up to 1000 jobs.

The industry report identifies Queensland as a sector of particular growth, citing partnerships between communities and companies on fresh water, notably Queensland Alumina and Gladstone City Council establishing a long-term sustainable partnership to achieve environmental benefits.

Federal Industry and Resources Minister Ian Macfarlane welcomed the report yesterday, saying it was a clear determination of the industry's commitment to technology as the preferred approach to improving its energy use, efficiency and reduction of greenhouse gases.

"The industry's performance based on a series of voluntary initiatives – including participation in the Government's greenhouse challenge program – has been outstanding, with reductions of almost 50 per cent in greenhouse emissions per unit of production," he said.

Australian Aluminium Council chairman Wayne Osborn said the aluminium sector needed to communicate more effectively with companies and government the need for the industry to retain its global competitiveness as it developed a sustainable operations framework.

Mr Osborn said the industry was buoyant globally with prices at near record highs and low stockpiles, but participants needed guidelines and direction moving forward.

"Despite our size and performance as an industry which is a keystone of the Australian economy, we need to build a clear industry profile in the broader community commensurate with the value proposition we represent for Australia," he said.

"With the right policy settings, sound investment and market conditions and the support of our communities, the industry will continue to develop its role as a key producer for the global markets."

Kaiser Aluminum Reports Results for First Quarter of 2005

Business Wire (press release), CA - May 13, 2005 03:59 PM

FOOTHILL RANCH, Calif.--(BUSINESS WIRE)--May 13, 2005--Kaiser Aluminum today reported net income of $8.3 million, or $.10 per share for the first quarter of 2005, compared to a net loss of $64.0 million, or $.80 per share, for the first quarter of 2004.

Results for the first quarter of 2005 included a pre-tax operating charge of $6.2 million, the majority of which was associated with the implementation of new defined contribution savings plans for employees. Results for the year-ago quarter included a non-cash pre-tax charge (as recorded in discontinued operations) of $33.0 million to reduce the carrying value of the company's 90% interest in the Valco smelter in Ghana.

Net sales in the first quarter of 2005 were $281.4 million, compared to $210.2 million in the year-ago period.

Commenting on the first quarter of 2005, Kaiser President and Chief Executive Officer Jack A. Hockema said, "The company's strong performance relative to the year-ago quarter was largely the result of higher shipments, an unusually rich mix, and improved realized prices in our fabricated products business. In particular, we reported a 16% rise in shipments of fabricated products, led by increased demand in the aerospace/high strength market. Realized prices were higher across the board and reached near-peak levels for plate products in response to strong near-term demand."

Hockema added, "Of particular note is the fact that the rich product mix and strong plate prices were key factors that lifted first-quarter operating income in our fabricated products business to the highest level since the 1998-2000 timeframe, when somewhat similar market conditions existed. This result is especially noteworthy in light of a continuing trend of higher costs for energy and freight. Although we are pleased with the company's operating income in the first quarter, we currently do not expect the remaining quarters of 2005 to have as rich a mix of products."

Hockema added, "We continue to be focused on our objective of emerging from Chapter 11 in the second half of this year."

Read full article at

http://home.businesswire.com/portal/site/google/index.jsp?ndmViewIdnews_view&newsId20050513005621&newsLangen

Pacific Lumber may be on the ropes

San Francisco Chronicle, CAFriday, May 13, 2005

Nancy Sarnoff, Houston Chronicle

Maxxam Inc.'s Pacific Lumber Co., long a target for environmentalists, could be forced to file for bankruptcy if it can't come to terms with its creditors.

Maxxam, a Houston lumber company that also has real estate and race track operations, reported a $14.2 million first-quarter loss on Thursday and said its lumber subsidiaries may also cut jobs or sell assets to raise cash to help pay its debts.

Scotia Pacific Co., an arm of Maxxam's Pacific Lumber Co., which owns Northern California timberlands, faces default if it can't make interest payments due July 20.

If the unit is unable to renegotiate the terms of its debt by then, a bankruptcy filing could come as early as this summer, according to Maxxam spokesman Ron Kurtz.

Maxxam has hired an investment bank to consider options for its lumber subsidiaries.

The company said it is having trouble paying its debt because its lumber revenue has been reduced by regulatory, environmental and litigation problems.

Kurtz said Pacific Lumber has been delayed by state agencies in charge of approving logging operations.

"Because of this delay, their revenues have been reduced," he said.

Environmentalists have singled out Pacific Lumber, saying it has been damaging the environment by over-cutting, and have taken those complaints to regulators.

Sami Yassa, senior forestry scientist for San Francisco's Natural Resources Defense Council, said many timber companies are thriving under the state's logging regulations because they have "operated sustainably over the long term."

"Pacific Lumber has liquidated its forest resources, and now they are suffering the consequences," he said. "When a company like Pacific Lumber does not practice forestry sustainably, they will suffer economically." It is unclear what could happen to Maxxam if its lumber operations, which amount to more than half its revenues, slide into bankruptcy.

But it wouldn't be the first time the company had to deal with a subsidiary filing for bankruptcy.

In 2002, Maxxam subsidiary Kaiser Aluminum declared bankruptcy, from which it still has not emerged.

While Maxxam still holds 62 percent of Kaiser's stock, it did not report that company's results in its earnings release. Charles Hurwitz acquired Pacific Lumber and thousands of acres of never-cut redwoods in 1986 through a leveraged buyout. He recently ended victoriously a 15-year battle with the federal government over his involvement in a failed savings and loan, a conflict he said was really an effort by the government to force him to part with stands of virgin redwoods.

Aside from lumber, Maxxam also has interests in racetracks and real estate. Sales from its tracks -- Sam Houston Race Park in Houston and Valley Race Park, a greyhound dog track in Harlingen, Texas -- have dropped due to lower average daily attendance and reduced simulcast wagering on races elsewhere.

The company's real estate operations have improved, Property sales more than doubled in the first quarter of 2005 to $22.8 million.

Big Russian supports QAL growth

Brisbane Courier Mail, Australia 14may05

James McCullough

RUSSIAN aluminium giant Rusal has thrown its weight behind a $1 billion expansion of Queensland Alumina Ltd, the world's largest alumina refinery based at Gladstone.

Rusal, which forked out $600 million to acquire a 20 per cent stake in QAL last year from bankrupt Kaiser Aluminium, has confirmed it would like to boost production at Gladstone by about 20 per cent.

"We are really keen to build up our business in Australia and Asia," said Rusal's visiting deputy general-director, Pavel Ulianov, in Brisbane yesterday.

"We would like to position ourselves as a truly global aluminium company and Australia offers very great potential for us. It has good resources, stable economy and good government."

Mr Ulianov said Rusal needed bauxite to fulfill the company's ambitions to become the largest aluminium company in the globe over the next six years, from its current position as number three in the world.

To this end Rusal, along with 12 other interested parties, is keen to acquire the Aurukun bauxite leases on Cape York Penninsula.

The Queensland Government reclaimed the leases last year from Alcan, saying the company had failed to act on a 1988 development deadline.

Mr Ulianov said Aurukun perfectly satisfied Rusal's desperate needs for more bauxite and was a logical base on which to expand in the region, given the group's significant investment in QAL.

"Everything of course depends on economics, particularly what kind of infrastructure would be available from the Government," he said.

"After more data and with more information we can then calculate the real value of the leases."

The Rusal chief said the company had two strategies to try to acquire Aurukun. The first was to obtain the leases and build a refinery nearby.

He said the Government had already offered three "preferred sites" for the construction of the refinery, but he would not reveal their locations.

The second strategy involved developing QAL together with Aurukun and at some stage expanding QAL.

Mr Ulianov said he had not had the opportunity of raising this possibility with the other joint venture partners of QAL – Alcan and Rio Tinto subsidiary Comalco.

However it is understood the partners are both keen to dust off expansion plans for the Gladstone refinery.

Alcan's head of Australian operations, Richard Yank, last month confirmed a detailed prefeasibility study to boost QAL's annul output by 1.4 million tonnes to 5.2 million tonnes had been shelved two years ago when Kaiser went broke.

The move then became too complicated but Mr Yank said with the ownership issue not stable and Rusal on board, it was time to revisit the proposal.

Russia's RusAl to help building power plants in Kosovo

KOSOVAREPORT Saturday, May 14, 2005

BELGRADE, May 14 (Prime-Tass) -- Russia's leading aluminum producer RusAl plans to take part in the construction of two power generating units at the Kosovo B power plant and in the building of the Kosovo C power plant, ITAR-TASS reported Saturday referring to Montenegro’s Vice Prime Minister Branimir Gvozdenovic.

RusAl is currently in negotiations with Kosovo authorities on terms for building the new power facilities. The facilities will be used to supply power to the Kombinat Aluminijuma Podgorica (KAP) aluminum plant, Gvozdenovic said.

RusAl declined to comment on the project.

By the end of May, RusAl is expected to sign a deal to buy a 65.4% stake in KAP, which is based in Montenegro, ITAR-TASS reported. The deal also includes buying a 31.8% stake in the Rudnici Boksita plant, KAP's main producer of bauxite.

According to the deal, in the first three years RusAl will purchase electric power from Montenegro for 20.44 euros per megawatt. After this period, the new Kosovo B and C generating facilities will meet the power needs of KAP.

KAP is the only alumina and primary aluminum producer in Montenegro, and has an annual aluminum production capacity of 120,000 tonnes.

China urged to relax controls on aluminium industry

Deepika, India May 14, 2005

SHENZHEN, May 14 (Reuters) Chinese government moves to cool the energy-intensive aluminium industry have succeeded and the curbs should be relaxed, an industry body said on Saturday.

Credit curbs and higher power prices imposed on smelters since 2003, as China has sought to ease its worst power crunch in two decades, meant four out of five smelters lost money in the first quarter this year, a government researcher said.

Yet the government is widely expected to remove tax breaks on aluminium processing for export within three months, in a further blow to the industry.

Cao Baokui, a director for the China Nonferrous Metals Industry Association said about 15 aluminium smelters had closed this year and there was no new investment in the industry.

''Keeping normal development in the industry is the most urgent thing to do at the moment,'' Cao told an aluminium forum in Shenzhen hosted by the association, the Shanghai Futures Exchange and Aluminum Corp. of China.

About 100 producers were still operating, of which 37 had annual smelter capacity above 100,000 tonnes, Cao said. China had more than 140 aluminium smelters at the end of 2003.

Zhang Fengkui, a researcher for the State Development and Reform Commission said more than 80 per cent of Chinese smelters operated at a loss in the first quarter.

Smelter officials said they expected the government to cancel on July 1 the tolling and processing provisions through which smelters import their main raw material, alumina, duty free as long as they export their finished product. Without the provisions, the imports carry an 8 per cent tariff and 17 per cent value-added tax.

Ending the tax break would push up the cost of importing alumina by about 26, which may force some plants to close.

About 30 per cent of China's alumina imports and about 80 per cent of its aluminium exports enjoy the tax breaks currently.

Cai suggested the government cancel the tariff on alumina imports and support investment in overseas alumina projects to cover a deficit in domestic production.

This year, China would import 6.7 million tonnes of alumina from which aluminium is made, said Wang Feihong, an analyst for state-controlled research group Antaike.

China would produce 7.53 million tonnes of alumina this year, up 16 per cent from 6.49 million tonnes last year, he said.

Wang predicted Chinese aluminium production would rise 12 per cent to 7.3 million tonnes this year, from 6.5 million tonnes last year.

China removed an 8 per cent rebate on aluminium exports from Jan. 1 and imposed 5 per cent tax in a bid to keep more of the metal at home to feed its fast-growing economy, which expanded 9.5 per cent through the year in the first quarter.

But the country's primary aluminium exports surged 35 per cent from a year earlier to 336,977 tonnes in the first quarter of 2005, spurred by world prices that hit a 10-year high of $2,016 a tonne in March.

China has banned smelters with an annual capacity below 100,000 tonnes or those built without central government approval from directly importing alumina.

Century Aluminum Subsidiary, Power Company to Undertake Joint Study for New Iceland Smelter

Business Wire (press release), CA - May 16, 2005 12:41 PM

MONTEREY, Calif.--(BUSINESS WIRE)--May 16, 2005--Century Aluminum Company (Nasdaq:CENX) announced today that Nordural ehf., a wholly owned subsidiary, has signed an agreement with a major Icelandic geothermal power producer, Hitaveita Sudurnesja hf., and the municipality of Reykjanesbaer, Iceland, to explore the feasibility of constructing a new aluminum smelter in Helguvik, Iceland, or at another mutually agreeable site.

The agreement gives Nordural exclusive rights to the project. Helguvik is adjacent to Keflavik, a city that is home to Iceland's international airport and is approximately 30 miles from the capital city of Reykjavik. First production of primary aluminum would be targeted for 2010-2015.

Craig A. Davis, Century's Chairman and Chief Executive Officer, noted that the project would be the company's first greenfield primary aluminum plant. "We believe Iceland is an excellent location for us to pursue our strategy of increasing our ownership in competitive primary aluminum capacity," he said. "We have been extremely pleased with our experience in Iceland to date, specifically the dedication of our employees and our outstanding relationships with Icelandic power producers, banks and government authorities."

Century presently owns 615,000 metric tonnes per year (mtpy) of primary aluminum capacity. The company owns and operates a 244,000 mtpy plant at Hawesville, Kentucky; a 170,000 mtpy plant at Ravenswood, West Virginia; and a 90,000 mtpy plant at Grundartangi, Iceland that is being expanded to 212,000 mtpy. The company also owns a 49.67-percent interest in a 222,000 mtpy reduction plant at Mt. Holly, South Carolina. Alcoa Inc. owns the remainder of the plant and is the operating partner. With the completion of the Grundartangi expansion, Century's total capacity will stand at 737,000 mtpy by late 2006.

Century also holds a 50-percent share of the 1.25 million mtpy Gramercy Alumina refinery in Gramercy, Louisiana and related bauxite assets in Jamaica. Century's corporate offices are located in Monterey, California.

This press release may contain "forward-looking statements" within the meaning of U.S. federal securities laws. The company has based its forward-looking statements on current expectations and projections about the future, however, these statements are subject to risks, uncertainties and assumptions, any of which could cause the company's actual results to differ materially from those expressed in its forward-looking statements. More information about these risks, uncertainties and assumptions can be found in the risk factors and forward-looking statements cautionary language contained in the company's Annual Report on Form 10-K and in other filings made with the Securities and Exchange Commission. The company does not undertake, and specifically disclaims, any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date such forward-looking statements are made.

Contacts

Century Aluminum Company

Michael Dildine, 831-642-9364

mdildine@centuryca.com

Global Alumina Releases First Quarter 2005 Results

PR Newswire (press release) mAY 16, 2005

TORONTO, May 16 /PRNewswire-FirstCall/ -- Global Alumina Corporation ("Global Alumina") (TSX: GPC.U), a company that proposes to produce alumina for sale to the global aluminum industry, announced today its financial and operating results for the first quarter ended March 31, 2005. A complete copy of the interim report, including unaudited financial statements and management's discussion and analysis, can be viewed or printed from the Company's SEDAR reference page at http://www.sedar.com or on the Company's Web

site at http://www.globalalumina.com. All dollar amounts are in U.S. dollars.

First Quarter Highlights:

- Significant corporate highlights include:

- Commenced trading on the Toronto Stock Exchange on February 16th, thereby enabling the Company to reach a broader financial audience

- Signed a Memorandum of Understanding with Technip, whereby Technip would serve as the project's EPC contractor

- Expanded its development activities at the port facility in Kamsar, Guinea by entering into an agreement with Dredging International for dredging and land reclamation activities

- Signed a Memorandum of Understanding with Dubai Aluminium Company Limited ("DUBAL"), whereby DUBAL would make a substantial investment in Global Alumina and also enter into a long-term purchase and sale agreement for 25% of the annual production from Global Alumina's proposed refinery (subsequent to the first quarter ending)

- Significant financial highlights include:

- Cash and cash equivalents of $38.6 million at March 31, 2005

- Loss for the three months ended March 31, 2005 of $4 million ($0.03 per share)

- Engineering and professional fees for the three months ended March 31, 2005 were $2.8 million (67% of total expenses)

SOURCE Global Alumina Corporation

$5.4 bn Rusal in talks with Vedanta for Orissa deal

Business Standard, India May 17, 2005

Debjoy Sengupta / Kolkata

Russian Aluminium (Rusal), a $5.4 billion conglomerate and globally the third largest aluminium and aluminium alloys producer has entered into talks with Vedanta Alumina for entering into an investment participation arrangement, possibly an equity stake, in the alumina mining plant being set up in Orissa.

Sources close to the development said that Rusal was considering investments of a few hundred million dollars in Vedanta's Alumina project in Orissa and the project was estimated to cost $ 800 million which was due to commission in March 2007.

Officials from Rusal said, "The company is considering the possibility of taking part in Vedanta's project to construct an alumina plant in India's Orissa."

"Rusal is of the view that alumina mining in India would be a prospective venue," he said.

When asked about the details of the arrangement being worked out, Vera Kurochkina, head of media relations department, Rusal, said "Rusal is considering the possibility of entering into a jointventure with Vedanta and we are at a very early stage of this process, which means that the details are being worked out."

Sources also said that Rusal would soon send a delegation to India to discuss the details of arrangement that could be drawn between the two companies.

Vedanta Alumina, Vedanta Resources Plc's new project was being set up with a capacity of 1.4 million tonne per annum, but initially would produce 1 mtpa.

Around half of the alumina would be sent to the expanding aluminium facilities at Korba, part of Balco. The remaining alumina would be sold to third parties.

The mining area for the project would be spread over 680 hectare of Niyomgiri forests in Kalahandi district. Vedanta Alumina has entered into an agreement with Orissa Mining Corporation to form a joint venture to explore the Niyamgiri mines allotted to it.

The Russian Company had earlier made efforts to enter into the Indian Alumina market when Nalco was being divested, however it had backed out later on face of stiff competition from different quarters.

Rusal, is a vertically integrated company with a complete production cycle from bauxite mining and production of raw materials, to production of primary metal, semi-products and aluminium-based end products.

Founded in 2000, Rusal currently accounts for some 75 per cent of Russia's primary aluminium production and 10 per cent of global output.

The company employs more than 60,000 people spread across seven Russian regions and 10 countries.

As much as 80 percent of its revenues come from exports to 39 countries.

Alba breaks world record

AME Info, United Arab Emirates May 16, 2005

Alba today made history as it started up the final pot in its new Potline 5, successfully ending its '100 Day Safe Startup' challenge and breaking the world record by 57 per cent for the fastest startup of an Aluminium Reduction Line.

Bahrain: Monday, May 16 - 2005 at 09:21 GMT+4

Bruce Hall and Ahmed Al Mohari.

Setting a new world record of 77 days without Lost Time Injuries (LTIs) is a huge international achievement, placing Alba and Bahrain in the global spotlight, and giving the company cause for both industrial and national pride.

The company's management and 3000-strong workforce were jubilant as the company's Chief Executive, Mr. Bruce Hall, pressed the button to start-up the final pot just 77 days into the commissioning process.

Speaking of Alba's victory, a delighted Bruce Hall, stated that 'it is without doubt and with great pride that I attribute this feat to the entire Alba workforce whose hard work and commitment have been the driving force in bringing the ambitious Line 5 Expansion Project to its grand finale by setting a new world start-up record of 77 days.'

'Our peoples' diligent efforts have been instrumental in sustaining the highest quality work and safety standards throughout the start-up process and today, as all eyes are turned on Alba, our employees should be proud for having placed their company and their country at centre stage in the global industrial arena' continued Hall.

Alba embarked on the '100 Day Safe Startup' challenge 77 days earlier, in an attempt to achieve the safe commissioning of its new 1.2 km Reduction Line 5 - currently the longest AP 30 potline in the world consisting of 336 electrolytic pots - within the record-breaking time of 100 days, smashing the last record set by a smaller smelter, by 80 days.

'Alba's decision to launch the 100-day challenge has been at the top of our agenda for the past two years, since the inception of the Line 5 Project's construction and in the last 24 months, Alba's workforce has been preparing itself for this start-up, both in team spirit and by creating a streamlined logistical feat' further stated Hall.

With an initial plan to commission an average of 4 pots a day, the Reduction Operations Team supported by Alba's units, soon increased to 6 pots a day following the determination and efforts of its people. Today, having surpassed its own target by 23 days, a feat that will prove hard to beat, Alba has set a benchmark in global industrial excellence, positioning itself as a leader in the international aluminium field.

'Following an extensive two-year period of strategic planning and with the strong focus, intensive team spirit and motivation exerted by the Alba employees, it is no surprise that our workforce can today pride itself of having achieved something so extraordinary on an international level' continued Hall.

Hall also touched on the financial aspect of the 100-day venture stating that 'the shorter start-up also had tremendous implications in terms of cost-saving for the company. Every day that the start-up was brought forward translated to $1.4 million of additional revenue, bringing in more than $32.2 million for the 23 days early start-up. Combined with the $7.3 million saved by the five-day early start-up in February 2005, our start-up project has resulted in over $39 million savings for Alba' stated Hall

Alba's Line 5 Expansion Project marks a historic milestone in Bahrain's aluminium industry, firmly establishing the company as a global leader in its field. The creation of Potline 5 will expand the company's annual aluminium production by over 300,000 tonnes per annum, making Alba the largest aluminium smelter in the world outside of Eastern Europe, with a total output of 830,000 tonnes per annum. 50% of Alba's additional output will be kept within the Kingdom of Bahrain while the GCC and Far East will consume 15% and 35% respectively.

As one of the largest construction projects in the Gulf, Line 5 has brought major added benefits to the Kingdom and its economy with the creation of over 8,000 jobs during construction and over 500 permanent jobs during operation. The project has also created many lucrative opportunities for Bahrain-based companies. In addition, local contractors have benefited from attractive budget allocations and exposure to the international work practices and standards implemented by Alba and Bechtel - Alba's Line 5 Engineering, Procurement, Construction and Management (EPCM) Contractors. Alba's contribution to the national economy is also set to increase from 8% to approximately 12% as a result of the expansion project.

Global Alumina amends refinery deal with Guinea government

Canada.com, Canada Tuesday, May 17, 2005

TORONTO (CP) - Global Alumina Corp. has amended an investment and concession agreement with the government of the Republic of Guinea, clearing the way for the Canadian company's proposed refinery project to proceed.

The agreement addresses all the "outstanding issues" raised by Guinea's National Assembly during the recent deal ratification process, the company said Tuesday.

Global Alumina said that Guinea's Mines Minister Ahmed Tidiane Souare is expected to recommend the ratification of the amended deal to Guinea's parliament Thursday.

Global Alumina wants to use the bauxite resources of Guinea - which holds one-third of the world's supply of the mineral - to produce alumina for the global metals industry. Alumina is a powdered substance made from bauxite and is smelted into aluminum, a light-weight metal widely used in packaging and the auto and industrial sectors.

The company (TSX:GPC.UN) is headquartered in Saint John, N.B., with operations and offices in Guinea, New York, London and Montreal.

In April, the company said it was awaiting reconsideration by the Guinean government of an agreement allowing the proposed alumina refinery in the West African country.

It said the review centres on the length of the tax holiday at the alumina refinery, but the company gave no specifics on how the 99-year deal was altered.

On Tuesday, shares in the company rose eight cents, or five per cent, to $1.55 on the Toronto Stock Exchange.

© The Canadian Press 2005

Aldoga seeks China solution

Hong Kong Standard, Hong Kong May 18, 2005

As building material and labor costs soar in Australia, privately held Aldoga Aluminium Smelter is banking on Chinese capital and engineering to get its aluminum smelter project back on track.

Construction of an estimated A$2 billion (HK$11.8 billion) smelter in Gladstone, Queensland, was due to start last June but ``internal management evaluations'' have pushed that back to late this year, said managing director John Benson.

Amid claims the project is not viable in the current cost environment, he said the refinery is delayed, not shelved, and is on track to start producing in late 2007. While similar projects - such as Rio Tinto's proposed third phase refinery expansion - are shelved amid rising costs exacerbated by a stronger Australian dollar, Aldoga has reduced its cost estimate to A$1.5 billion.

``Our original estimate was conservative, and as we've progressed we've been able to negotiate savings in a number of areas,'' said Benson.

``Certainly by sourcing so much of the engineering and equipment out of China and licensed by such people as Alstom in China, we're taking full advantage of those cost advantages.''

In late 2003 Aldoga signed China Nonferrous Metal Industry's Foreign Engineering and Construction to supply equipment, technology and engineering for the smelter ahead of a scheduled construction start last June.

The same agreement secured the promise of A$771 million from the Export-Import Bank of China.

But 18 months later neither the engineering studies or the financing is ready, which Benson puts down to his company's decision to revise, and ultimately go back to, its original 420,000-tonne a year configuration.

He said the studies are now expected to be ready next month and financing in October-November, allowing construction to begin by year-end, first production two years later, and full capacity in late 2008.

But some industry insiders said the delay is more to do with a battle between mainland technocrats eager to see homegrown technology used in the West and hard-nosed economists who question the project's feasibility.

Construction costs are central to the skeptics' concern, but so too are Queensland electricity costs, which at A$32 a megawatt hour will result in relatively high running costs given the power-intensive smelting process.

Then again, Gladstone is close to abundant thermal coal and gas supplies, both potential sources of cheap power.

There has also been speculation the delays are linked to Aluminium Corp of China's participation in the Queensland government's bidding process for a concession to develop the Aurukun bauxite deposit.

But Benson said the project is ``still on track'' and that he is ``satisfied and pleased with progress'' on both engineering and financing.

He also said the project's offtake is assured with the Chinese keen to take 100 percent, ``although whether or not we go that direction will depend on what's attractive to us at the time of financial close.''

In Benson's favor is Beijing's determination to curb aluminum exports, precisely because the metal needs so much power to produce. China export disincentives are expected to keep aluminum prices rising well into next year and stable for the following years. DOW JONES NEWSWIRES

Deripaska in Kosovo?

The Moscow Times, Russia 17 May, 2005

Billionaire Oleg Deripaska may spend as much as $1.4 billion building power stations in the Kosovo region of Serbia and Montenegro, Vedomosti said, citing a senior Montenegro official.

Kombinat Aluminijuma Podgorica, or KAP, an aluminum producer being acquired by Deripaska's RusAl, has asked the government for permission to build two power units at the Kosovo-B thermal power station, the newspaper said, citing a Prime-Tass report quoting Montenegro Deputy Prime Minister Branimir Gvozdenovic. (Bloomberg)

Australia's Leighton unit awarded part of 2.0 bln aud Alcan expansion contract

Forbes 05.17.2005, 01:41 AM

SYDNEY (AFX) - Leighton Holdings Ltd said it has been awarded part of a contract offered by Alcan Inc to expand the Canadian aluminum group's alumina refinery operation at Gove in northern Australia.

It said Leighton unit Theiss had been awarded a 150 mln aud contract as part of Alcan's expansion program in Australia.

In a statement, Leighton said Theiss will be the lead mechanical and electricial construction alliance in conjunction with London-listed construction group Mowlem Plc's Australian unit Barclay Mowlem and local engineer Downer EDI.

(1 usd 1.32 aud)

bruce.hextall@xfn.com

RUSAL secures $200 million loan sets new record on interest rate.

Analytical Information Agency, Russia 17/05/2005 12:45

RUSAL, one of the world's largest aluminum producers, has raised a $200 million unsecured loan to refinance its purchase of a 20% stake in Queensland Alumina Limited, Australia.

The loan has been extended by Paris-based Natexis Banques Populaires for a term of twelve months. It is priced at LIBOR plus 100 basis points and will be substituted with a long-term loan later this year.

The loan facility will be used to partially refinance the purchase of a 20% stake in Queensland Alumina Limited. RUSAL completed its purchase of the stake from Kaiser Aluminium in late March, 2005, becoming the largest Russian investor in Australia's economy. As a result of the $401 million deal, RUSAL has acquired an additional 770,000 tons of alumina per year (with an option to increase to 1 million tons per year) and boosted its raw material base by over 22%.

Last October, Natexis Banques Populaires was one of the lead arrangers and the facility, documentation and security agent for an $800 million syndicated loan extended to RUSAL - the largest credit facility ever arranged by the company and the largest metals and mining syndicated term loan secured in Russia

RUSAL is one of the world's fastest-growing and most dynamic companies, producing primary aluminium and alloys for an expanding and demanding customer base worldwide. Company's highly trained staff employ the latest technologies in the constant drive to meet customers' needs.

"AK&M", 17/05/2005 12:45

Guinea says Global Alumina deal ready to be adopted

Reuters South Africa, South Africa - Tue May 17, 2005 8:21 AM GMT+02:00

By Saliou Samb

CONAKRY (Reuters) - A deal that will allow Global Alumina to build a $2 billion refinery in Guinea is ready to be ratified by the West African country's parliament after weeks of negotiation, its mines minister said on Monday.

Minister Ahmed Tidiane Souare told a symbolic signing ceremony the deal was ready to be presented to lawmakers after a number of amendments had been agreed with the Toronto Stock Exchange-listed company.

"This is a decisive step towards the final ratification of the agreement," Souare said.

Global Alumina said it expected Souare to present the amended agreement to parliament, which had previously voiced reservations about some elements of the deal, on Thursday.

"The minister of mines is scheduled to stand before parliament on Thursday morning to present that amendment to the agreement and to recommend ... ratification of the amended agreement," Global Alumina spokesman Michael Cella said.

Global Alumina said last October it had signed an investment and concession agreement for the 2.8 million tonne refinery, which would come into effect once it had been ratified by the former French colony's parliament and approved by the president.

It said then it expected construction to begin in mid-2005.

Souare said the amendments had centred on a number of points including the length of the agreement, tax and customs issues and the involvement of the state in the project.

"This project is a big challenge we are taking on ... and we will show those who thought that neither Guinea nor Global Alumina could see it through what we are capable of," said Karim Karjan, a Global Alumina director and co-founder.

Global Alumina said last month it had entered a long term purchase and sale agreement with Dubai Aluminium Company Ltd., owned by the government of Dubai, for 25 percent of the annual production from its proposed refinery in Guinea.

Karjan said that China had also ordered over 700,000 tonnes of aluminium annually over a 20-year period.

The price of alumina has surged since the end of 2002 and several companies want to build refineries in Guinea, which holds a third of the world's known reserves of bauxite -- the raw material used to make alumina.

Global Alumina's October deal gave the Canada-based company an initial term of 99 years for the management and operation of the refinery in the northern region of Kamsar.

The deal, signed by Souare's predecessor, has been challenged by aluminium producers Alcoa Inc. and Alcan Inc., which control Guinea's biggest bauxite mining firm.

But Halco Mining Inc., a joint venture between Alcoa and Alcan, said in March it would hold talks about supplying bauxite for Global Alumina's planned site.

Alcan Still in Talks Over South African Aluminum Smelter (Update1)

May 18 (Bloomberg)

Alcan Inc., the world's second-largest aluminum producer, is still in talks with South African authorities on building an aluminum smelter in the southeast port of Coega, the chairman of the Coega Development Corp said.

Alcan is also in discussions with Eskom Holdings Ltd., South Africa's state-owned power company, over a long-term electricity contract, Chairman Moss Ngoasheng told journalists in Johannesburg today.

``We hope that once the feasibility studies and discussions are completed, there will be an announcement from Alcan,'' Ngoasheng said. ``They are working with Eskom on reconfiguring the price'' of electricity.

Montreal-based Alcan put on hold plans to build the smelter, which it got as part of its 4 billion-euro purchase of France's Pechiney SA in February 2004. Sual Group, Russia's second-biggest aluminum producer, said in April it was interested in building the smelter.

Alcan is looking to produce aluminum in countries such as Iceland and South Africa where energy costs are lower than in North America.

The Coega industrial development zone, which houses the port, is 20 kilometers (12 miles) east of Port Elizabeth.

Belgian-owned Sander International Textiles will be the first international company to invest at the Coega site, spending 200 million rand ($31 million) to build a textile milling plant, Ngoasheng announced today. The plant will employ 130 workers and is expected to begin production in November.

Sander, which received tax and investment incentives from the South African government to build the plant, aims to export textiles to the U.S., Middle East, Australia and Europe, said Alex Liessens, the company's owner. South Africa can export clothing and textiles to the U.S. duty-free under a preferential trade agreement known as the African Growth and Opportunity Act.

To contact the reporter on this story:

Nasreen Seria in Johannesburg nseria@bloomberg.net

Global Alumina Corp. signs deal to sell 25% of output to China Aluminium Group

CBC News, Canada 10:32 PM EDT May 18

TORONTO (CP) - Global Alumina Corp. has signed a deal to sell 25 per cent of the output from its proposed alumina refinery in Guinea to China Aluminium Group Ltd., the company said Wednesday.

China Aluminium will also invest in Global Alumina under the agreement, it added.

In April, the company announced a similar agreement with Dubai Aluminium Co. ensuring the long-term purchase and sale of 25 per cent of annual production from Global Alumina's proposed refinery and "substantial equity investments" to own 25 per cent of its shares.

Global Alumina wants to use the bauxite resources of Guinea - which holds one-third of the world's supply of the mineral - to produce alumina for the global metals industry. Alumina is a powdered substance made from bauxite and is smelted into aluminum, a light-weight metal widely used in packaging and the auto and industrial sectors.

Under the agreement, China Aluminium will enter into a long-term purchase and sale agreement with Guinea Alumina Corp. S.A., Global Alumina's wholly owned subsidiary, for 25 per cent of the annual production from the company's proposed refinery.

China Aluminium will also acquire an unspecified interest in Global Alumina common stock.

"Securing long-term purchase and sale agreements for 50 per cent of our proposed alumina refinery's annual production provides the company with greater revenue stability and long-term predictability," CEO Bruce Wrobel said in a statement.

"As one of Asia's largest producers of aluminum extrusions accounting for nearly one million tonnes of primary aluminum production, China Aluminium Group is a significant addition to our roster of world-class partners, and positions Global Alumina as a major alumina supplier into one of the world's most dynamic growth markets."

China Aluminium and Global Alumina are finalizing the details of the two agreements which will be submitted to their respective boards for approval, as well as the Toronto Stock Exchange.

The equity investment is also conditional upon the ratification of an agreement between Global Alumina and the government of Guinea by its National Assembly.

That agreement grants the company the rights to a mining concession for the exploitation of bauxite and to construct, operate and maintain an alumina refinery in the West African country.

On the Toronto Stock Exchange, shares in Global Aumina (TSX:GPC.U) fell more than six per cent, or 10 cents US, to $1.45 US on Wednesday.

© The Canadian Press, 2005

Alcoa to invest $45 million to supply coal to power Warrick smelter

Evansville Courier & Press (subscription), IN May 18, 2005

PITTSBURGH-Alcoa (NYSE:AA) announced today that it will invest $45 million to purchase equipment and the rights to mine coal from Vigo Coal Company to power its aluminum smelter in Warrick, Ind.

The investment also calls for the addition of a coal preparation facility and material handling infrastructure to enable transport of coal via railcar to the smelter's power plant.

The coal is expected to be available for use by Alcoa Warrick Operations by July 2006.

Under the terms of the agreement, Alcoa will purchase the rights to mine 2,500 acres in the reserve at the Friendsville Mine near Mount Carmel, Ill., for 10 years, with the opportunity to expand from there.

The mine will be capable of producing approximately 1 million tons of coal a year, approximately 45 percent of the power plant's fuel requirement. Vigo Coal will provide mining services to Alcoa. The mine will contribute approximately $20 million annually to the local Illinois economy.

Alcoa Warrick Operations is an integrated facility housing a 309,000 metric ton per year (mtpy) primary aluminum smelter and rigid packaging operations that produce aluminum sheet for beverage and food can ends, tabs, and other flat-rolled aluminum products. It employs approximately 2,150 people and contributes $1 million a day, to the local Indiana economy.

Major aluminum smelters will be allowed to import alumina to reduce crippling prices

Interfax.cn, Russia May 18, 2005

By Alfred Cang

Shanghai. May 18 INTERFAX-CHINA - Pan Jiazhu, the Secretary General of China Nonferrous Metals Industry Association revealed at the International Forum on Aluminum in Shanghai that the government plans to allow more large electrolytic smelters to directly import alumina. However, China's electrolytic aluminum industry and alumina giant Chalco remain divided on the proper price level for domestic alumina, with smelters complaining Chaclo sets unreasonable prices and enjoys too much support from the government.

Due to the skyrocketing price of alumina and other pressures, most of China's electrolytic aluminum smelters are facing serious difficulties.

"By the end of 2004, 37 Chinese electrolytic aluminum producers, accounting for 32% of the national total, reached annual capacities of more than 100,000 tons each. A dozen companies among them will be selected to regularly receive permission to import alumina," Pan said.

Pan said the government hoped to control the soaring price of imported alumina by liberalizing alumina imports.

Now only Chlaco, Minmetals Group, and other six trading companies can legally import alumina. In 2004, China imported 5.8749 mln tons of alumina and produced 6.994 mln tons of alumina, of which nearly all was produced by Chalco. Recently, the per-ton-price of imported alumina rose to RMB 4800 (USD 580) while Chalco has set its alumina price at RMB 4330 per ton (USD 523 per ton).

Pan also said that while some firms had proposed an alliance of China's aluminum producers to import alumina, he did not expect the proposal to make much progress. .

"Since China's electrolytic smelting industry is very fragmented, I think it is difficult for us to unify the interests of hundreds of aluminum firms," he said.

The government has not considered persuading Chalco to lower the domestic price of alumina, Pan said. He told Interfax that the central government was instead focusing on the rising price of imported alumina.

According to Ding Haiyan, Chalco's General Assistant Director and the President of Chalco subsidiary Southwest Aluminum Industry Group Co., Ltd, Chalco should not be blamed for the losses of China's aluminum industry.

"Besides the price of alumina, the higher electricity costs and unfavorable changes in policy are also two major factors which have caused losses in the industry," Ding said.

Ding said Chalco always set the price of its alumina lower than that of imports, adding that Chalco could increase the price to the same level as imports but the company had chosen not to.

However, Ding said Chalco would not decrease the price of its products either.

"If Chalco sets its prices much lower than those on the international market, this will not turn the market as a whole but will only provide an opportunity for speculators. We estimate that with a larger gap between the prices of domestically produced and imported alumina will drive more traders to speculate by buying Chalco's alumina and reselling it closer to the international price," Ding said.

At the forum, some delegates complained that the central government always seemed ready to support Chalco but was often unwilling to help downstream companies.

"Chalco pays a huge amount of tax every year so that the government looks to keep Chalco strong for its own financial benefit," a delegate from China Nonferrous Metals Industry Association who asked to remain anonymous said.

He said Chalco's unique position actually encourages further consolidation of the aluminum industry around it. As a government supported monopoly, he said, Chalco provides its electrolytic subsidiaries with alumina at lower prices than it sells to other companies. As a result, many electrolytic smelters had asked Chaclo to acquire them to secure a cheap supply of raw materials.

Chalco has denied that it provides alumina to its subsidiaries at a below market prices, saying that they pay the same as independent companies.

"Since the electrolytic aluminum industry was defined as 'High pollution, High Energy Consumption, and Low-value added' industry, the government has not hesitated to issue regulations and policies to restrict the development of the industry," he said.

Although both the steel and electrolytic aluminum industries were overheated in 2003, the government's moves to control the steel sector have been much less strict than its checks on electrolytic aluminum. He speculated that this is because the steel sector has a much more critical role in the nation's economy.

"From the perspective of our industry, I hope the government could introduce more effective policies to bail us out. However, it seems the central government might be willing to abandon us in favor of other development goals," he said.

Venezuela: Aluminum Processing Plant Summons Workers to Take up Arms

V Crisis, Venezuela 17 May 2005

http://www.vcrisis.com/index.php?contentletters/200505180626

Aluchem challenges Indian alumina project award

Reuters India, India Wed May 18, 2005 08:01 AM ET

BOMBAY (Reuters) - Indian industrial minerals producer Ashapura Minechem Ltd. said on Wednesday U.S. firm Aluchem Inc. had challenged a government decision to award Ashapura a 500,000-tonne alumina project in western India.

The company said in a notice to the National Stock Exchange the high court in Gujarat would hear the Aluchem petition on Friday.

The Gujarat government had last week awarded the project to Ashapura, which bid in a joint venture with Chinese firm Sichuan Aostar Aluminium Co. Ltd., a unit of Sichuan Electric Power Corp.

With plans to spend $275 million on the first phase of the plant in the Kutch district of Gujarat, Ashapura edged out the other bidding team of Aluchem and Man Industries Ltd.

Global Alumina gets go-ahead for $2.2-billion US alumina refinery in Guinea

CJAD, Canada 17:49 on May 19, 2005, EST.

TORONTO (CP) - Global Alumina Corp. was cheering a vote Thursday by Guinea's national assembly that clears the way for the Canadian-listed company to proceed with a $2.2 billion US alumina refinery project in the African country.

"The signing today really puts the implementation of this project completely back into our hands," Global Alumina chief executive Bruce Wrobel said Thursday from New York City.

The company is laying plans to raise $2.1 billion US on top of $180 million already raised since January 2004, with a sizeable portion of the additional money likely to come from Global Alumina's current Canadian institutional investors.

Of the money still to be raised, about $1.5 million will be debt and $600 million in equity, including roughly $200 million through a public offering, Global Alumina chief financial officer Michael Cella said Thursday in an interview.

"Canadian institutions represent on the order of 40 to 45 per cent of our shareholdings as of now. I'd expect many of those same investors to participate in the additional equity," Cella added.

Export Development Corp., a federal Crown corporation, is also a potential participant in the debt portion of the financing, he said.

"We're in discussions with them for the possibility of participating in the debt and I would imagine they would likely participate," Cella said.

The company has its legal head office in Saint John, N.B., and its shares are listed on the Toronto Stock Exchange. But its top executives are based in New York City and its main operations are in Guinea.

The central African country is home to about 30 per cent of the world's known supplies of bauxite, a mineral that is processed into alumina which, in turn, is a major material used for the production of aluminum metal.

On Thursday, Guinea's national assembly unanimously ratified a plan for Global Alumina to build an alumina refinery in Boke, Guinea.

Under the basic agreement, Global Alumina received rights to design, build and maintain a 2.8-million-tonne per year alumina refinery as well as rights to a mining concession for the exploitation of bauxite.

Global Alumina also gets rights to use existing road, rail and port infrastructure and substantial investment protections and fiscal incentives, the company said.

An initial agreement was signed last October after months of talks but required ratification by the national assembly, which gives it the force of law, Wrobel said.

The CEO said there was only one significant change from what was signed last October, and that was the addition of $125 million in fixed tax payments over the first 15 years.

Global Alumina had originally negotiated a complete tax holiday but "we believe the project is robust enough to absorb the initial payments," Wrobel said.

The refinery will initially be designed to process eight million tonnes of bauxite a year and convert that into 2.8 million tonnes of alumina - equivalent to about five per cent of the world's current alumina market, he said.

First production is expected to start at the end of 2008, with full production by the end of 2009.

Global Alumina expects to have 5,000 construction workers on the project, which will include the refinery itself, access roads, camps for the workers and improvement for port infrastructure, Wrobel said.

On Wednesday, Global signed a memorandum of understanding to sell 25 per cent of the output from the proposed refinery to China Aluminium Group Ltd. China Aluminium will also invest in Global Alumina under the agreement, it added.

In April, the company announced a similar agreement with Dubai Aluminium Co. ensuring the long-term purchase and sale of 25 per cent of annual production from Global Alumina's proposed refinery and also purchase 25 per cent of its shares.

Cella, the company's chief financial officer, said Global Alumina has commitments for $100 million out of $2.2 billion that it plans to raise in 2005.

That's on top of $80 million raised last year in two private placements, one worth $50 million in January 2004 and $30 million in December 2004.

Global Alumina got its Canadian listing through a reverse takeover of PL Internet Inc., an Ontario-registered company, in March 2004.

"Canada has a very, very long and good history of resource investing and has exported that competence and interest to other markets," Cella said.

The company legally moved its head office to New Brunswick because the province doesn't require a majority of its directors to be resident in Canada.

The company has had no revenues from operations but derives some revenue from investment income.

In the most recent financial report, it reported a loss of $4 million or three cents per share for the three months ended March 31.

Shares in Global (TSX:GPC.U), which trade in U.S. dollars on the Toronto Stock Exchange, fell 10 cents to close at $1.35, a seven per cent decline with over 1.1 million shares exchanged.

The Canadian Press, 2005

Alcoa to close Kentucky casting facility

Louisville Business First, KY 19 May, 2005

Alcoa Inc. will close its Hawesville, Ky., automotive casting facility by the end of 2005, according to a news release.

The plant closing, which will impact 158 people, is a result of excess capacity in Alcoa's automotive castings manufacturing system. Pre-tax costs for the closing will total approximately $45 million to $50 million, the majority of which will be non-cash impairment charges and will affect second quarter earnings.

Alcoa plans to sell the facility and will work with the community to attract buyers that could use the plant and lessen the impact of the closing, the release said.

Based in Farmington Hills, Mich., Alcoa Automotive Castings will continue to operate its other castings facilities in Farsund, Norway, and Fruitport, Mich. Alcoa Automotive Castings supplies structural, safety-critical components such as knuckles, control arms, cradles and sub-frames for automakers worldwide.

Many aluminum firms cutting production under serious cost pressure - gov't inspection

Interfax.cn, Russia May 19, 2005

Shanghai May 19 INTERFAX-CHINA- A central government delegation investigating the condition of electrolytic aluminum industries has found many are in a critical financial situation, and have cut their production because normal operations have become unsustainable, a member of the delegation who wished to remain anonymous told Interfax.

"Because of the mounting price of alumina, the increased electricity costs, the introduction of a tax duty of electrolytic aluminum, and a shortage of bank credit, about 80% of China's electrolytic aluminum producers are verging on complete losses," the official said. "Some large electrolytic aluminum producers, including state-owned ones, are forced to make production cutbacks to limit their losses."

The 15-member delegation included officials from the National development and Reform Commission (NDRC), the Ministry of Finance (MOF), the Ministry of Commerce (MOFCOM), the General Customs Administration, the State Environmental Protection Administration (SEPA), and the China Nonferrous Metals Industry Association, and recently finished their investigation at electrolytic aluminum firms in Gansu and Henan Province.

The official said the delegation's company visits were parts of the State Council's evaluations to see if further macroeconomic control policies should be imposed on the electrolytic aluminum sector.

The official said since the third quarter of 2004, the average basic operating cost of producing one ton of primary aluminum fluctuated around RMB 16,300 (USD 1,969) but the average per-ton-price of primary aluminum remained around RMB 16,500 to USD 16,700 (USD 1,993 to USD 2,018). With the cost of alumina almost the same as the sale price of aluminum, some electrolytic aluminum producers have chosen to stop production, he said.

According to the figures of the China Nonferrous Metals Industry Association, since the beginning of 2004, 41 aluminum firms have ceased production.

"A few of the large electrolytic aluminum firms the delegation visited were keeping only one production line into operation to maintain basic revenue to pay a minimum salaries of their employees," he said.

"Additionally, some listed aluminum firms and large state-owned plants have concealed their debts in their fiscal reports to prevent drastic responses from their private shareholders and bank creditors," the official told Interfax.

However, the official said though these companies cut the production to prevent losses in the short run, this meant they would have to pay a considerable amount later on to restart their large equipment. He said since a large-scale electrolytic bath needs an operating temperature of no less than 950 degree centigrade, if it is shut down and cooled to the external temperature, the plant would have to buy a substantial amount of electricity to warm it up again when production restarts.

"Therefore, we didn't recommend the firms who own such baths and similar equipments to stop production of these kinds of operating machines. However, if the things get worse, I promise they will stop them to avoid a complete losses," he added.

The official said many companies they faced an additional dilemma because they were the primary employer in small towns that had grown up around them.

"During our investigation, we visited Liancheng Aluminum Industry Corp., which is the core of a village that was built up to support the staff of the plant. Now not only the company's staff but also the villagers have to earn their daily bread without the support of the plant," he said.

The official also said some electrolytic aluminum plants were set up as national poverty alleviation projects and most of the firms they investigated were the pillar enterprise for the local economy. If they were to close or stop paying wages it could cause social disorder.

The official said the advice of the delegation would be passed to the State Council for its final decision on the next step to regulate the electrolytic aluminum industry. He said that the central government was concerned with the development of the sector and was listening to responses from the local firms by arranging visits and surveys of companies.

However, the official said that in his opinion, it might be a long time before there was a shift to a more favorable policy.

"Since the government pays the most attention to the problems of environmental pollution, energy shortages, and resource depletion now, I am afraid the central government would not issue favorable policies this year," he predicted.

Ormet Alleges Bad Behavior On Picket Line

WTOV9.com, OH 11:36 p.m. EDT May 20, 2005

HANNIBAL, OH -- Officials at Ormet Aluminum say union picketers have crossed the line during their six-month labor dispute. Now, they're taking action.

Ormet filed unfair labor practice charges against USWA locals 5724 and 5760.

Company CEO says striking workers behavior is making it hard for vendors to do business with Ormet.

The company says the charges stem from more than 200 documented incidents of violence on the picket lines since the start of the walkout in November.

In a press release from Ormet, the company says union members have taunted African-American members of security with racial slurs and burning crosses at the picket site. A company spokesperson says car windows have been smashed, tires slashed, and ten people were hurt.

USWA Representative Denny Longwell calls the unfair labor practice charge an attempt to weaken the union to give in to a sub-standard contract. Longwell says none of the accusations have been proven true.

Copyright 2005 by wtov9.com.

Guangxi Huayin Aluminum gets approval for 8.5 bln yuan alumina plant - report

Forbes - May 20, 2005

SHANGHAI(AFX) - The National Development and Reform Commission has given Guangxi Huayin Aluminum Co the go ahead to build an alumina plant with an initial investment of 8.5 bln yuan, the China Business News reported.

The facility will come into operation by July, 2007 and have a production capacity of 1.6 mln tons, the report said.

There will be an additional investment of as much as 15 bln yuan for the second stage of the project, making it China's largest alumina project in terms of investment, it added.

Guangxi Huayin, in the southwest of China, is a joint venture between Aluminum Corp of China Ltd (Chalco), China Minmetals Non-ferrous Metals Co and Guangxi Investment (Group) Co, roughly evenly split.

Despite the government's efforts to cool down excessive investment in several industries including the alumina sector, the project was approved because of Chalco and China Minmetals' dominant position in the sector, insiders were quoted as saying.

(1 usd 8.30 yuan)

qionghui.feng@xinhuafinance.com

Aluminum Output Rose for Third Straight Month, Institute Says

May 20, 2005 (Bloomberg)

-- Aluminum production rose in April for a third consecutive month as smelters in Asia and western Europe increased production of the metal used in beverage cans and cars, the International Aluminium Institute said.

Average daily aluminum output was 63,800 metric tons, 3.2 percent more than a year earlier, the London-based institute said today on its Web site. The institute collects data from 41 nations and doesn't include China, the world's largest producer.

Smelters in Asia produced 242,000 tons of aluminum last month, 11 percent more than a year earlier, the institute said. Western European output expanded 3.7 percent to 360,000 tons.

Aluminum for delivery in three months on the London Metal Exchange rose $13, or 0.8 percent, to $1,747 a ton as of 11:12 a.m. local time. Aluminum traded at $2,016 on March 11, the highest since February 1995.

To contact the reporter on this story:

Simon Casey in London at scasey4@bloomberg.net.

Dubal eyes majority in L&T JV

Financial Express, IndiaSaturday, May 21, 2005 at 0119 hours IST

SITANSHU SWAIN

MUMBAI, MAY 20: Dubai Aluminium Company (Dubal) has shown interest to take majority stake in its joint venture (JV) with engineering major Larsen & Toubro (L&T) to set up an integrated bauxite mining cum aluminium refinery project in Orissa.

The project cost is estimated over Rs 5,000 crore. Sources say that though L&T is keen on majority, it may make way for Dubal. Sources informed that Dubal may settle at 51% stake. The two companies recently inked the JV pact for the project. But there has been no official response from L&T about its possible stake. L&T sources said that the details of financing are yet to be worked out.

The project will offer L&T’s engineering and construction division an opportunity to execute a project valued at over Rs 3,000 crore. It involves setting up of a 1.4 million tonne per annum alumina refinery, bauxite mine and associated facilities, including a captive power plant, port facility and township.

L&T already has development rights for Orissa bauxite deposits. The refinery is expected to be commissioned in 2009. The project has the potential to be expanded in phases. In the second phase, the refining capacity will be doubled to 2.8 million tonne per annum.

Of late, Orissa has seen the arrival of many projects dealing with steel and aluminium. Recently, Hindalco signed an MoU with the state government for the establishment of an aluminium complex in Orissa. The total investment of the project will be to the tune of Rs 11,000 crore, with a potential of direct employment for 4000 persons.

The greenfield project entails establishment of an aluminium smelter with a capacity of 2.6 lakh tonne, an alumina refinery of one million tonne, captive power plant of 650 MW and bauxite mines. The smelter and captive power plant will be established at Lapanga in Sambalpur district, while the refinery will be located at Kansariguda in Koraput district. The project is expected to go on stream in the next four years.

Forging ahead on proud note

Gulf Daily News, Bahrain 23-May, 2005

By SOMAN BABY

ALBA chief executive Bruce Hall is returning to his native Australia on completion of a four-year term at the end of next month.

He is leaving on a proud note after setting new standards and world records at the smelter, during the construction and commissioning of Alba's $1.7 billion Line 5 Expansion Project.

Accompanied by his wife Leah, Mr Hall will be going back to Newcastle, where he started his professional career in the aluminium industry in 1981.

"We have been able to establish a reputation for the company as a world leader in the aluminium industry while positioning Bahrain in the limelight internationally, thanks to the concerted effort of about 3,000 employees," he told the GDN.

"Many innovative projects initiated in the company have almost doubled its net present value (NPV), delivering huge financial benefits to the shareholders.

"Right now we are pushing hard on the board to share the benefits with our 3,000 employees, who have contributed one way or another towards its success."

Mr Hall said the last board meeting rejected his proposal for a bonus for the staff.

"I hope they will reverse this stand during the next board meeting scheduled for Wednesday," he added.

Mr Hall, who joined Alba on July 1, 2001, said the Line 5 project was approved by the board in the same year in November.

"The project set a benchmark in every aspect. It was completed in 30 million man hours by a total of 17,000 individuals, who had worked one time or another, demonstrating a worldclass safety performance," he pointed.

"When I undertook the leadership in the company, I took it up as a personal challenge to improve the internal rate of return (IRA) by at least four per cent, and we made it."

The project featured two major innovations, said Mr Hall.

"Adding 48 cells to the existing 288 cells to produce an extra 50,000 tonnes was a remarkable job, which was completed with the existing budget," he noted.

"We were also able to set a new world record for the fastest start up of an aluminium reduction line.

"The safe start-up of the 336 potlines was completed in 77 days, against 230 days which was the normal time required. By finishing the project in one third of the normal time, we almost doubled the NPV."

Mr Hall said innovative plans also helped to save the smelter construction costs, totalling $180 million.

"All other costs including the cost of the power plant and training were $60m under the original budget," he said.

The experience at Alba has proved that people demonstrate their potential best when they are placed in a crisis situation, said Mr Hall.

"It is also important for the management to establish effective communication links with the employees in a language they understand to get optimum results," he said.

"Our mission was to encourage the release of the potential of every employee."

Alba has been conducting an Annual Employee Survey to help the workers to be more productive at their workplace for four years, said Mr Hall.

"Through a questionnaire, we collected data on the workers' views on various issues," he noted.

"The six most important positive issues and negative issues were analysed, and then we started working on finding solutions for the negative issues.

"We also tried to instil a sense of pride among the workers."

Mr Hall said the feedback from the employees had enabled Alba to ensure transparency in the promotion and selection processes.

"We have been able to change the selection mechanism and eradicate nepotism to a large extent," he revealed.

A strategic plan was implemented with a special focus on the Alba Charter, a 10-point action plan.

The key performance areas of the strategic plan are: safety, people, environment, cost and productivity.

Speaking about the company's future, Mr Hall said Alba continued to be under-optimised.

"Alba is now at the top of its asset value, especially with the completion of Potline 5," he added.

"Strong consideration should now be given for Potline 6, with the possibility of using gas from Qatar.

"Alba can then stop taking gas from the Bahrain fields and the company will no longer be a burden on Bahrain's natural resources.

"The best way to create value for Alba products is to swap assets.

"The shareholders should divest themselves to secure their raw material resources.

"More than 50 per cent of the expanded metal production is now sold within Bahrain.

"While the company should maintain its major focus to serve local downstream industries, it should be serious about the export market which keeps it sharp internationally."

Mr Hall said he fully supported the government plan to Bahrainise the position of chief executive officer.

"I have already given my recommendation to the board," he added.

Mr Hall, who worked for 17 years in the Tomago aluminium plant in his native town, was on secondment to a plant in Grenoble in France, where he was responsible for aluminium technology licensing from 1993 to 1995.

When Alba started the Potline 4 work he was the representative of Pechiney group for technology sales for Alba.

In 2000, he went to London and worked for Billiton Aluminium, when he got invitation from the Alba board to join the company as its chief executive.

Dutch Quintiq Reaches Global Deal With Aluminium Giant Novelis

mysan.de (Pressemitteilung), Germany 24 th May 2005

CLEVELAND, Ohio and ’S-HERTOGENBOSCH, The Netherlands, May 24 /PRNewswire/ --

- Worldwide Approach to Advanced Planning and Scheduling Solutions

Quintiq, recently listed in the Deloitte Technology FAST50 as one of the quickest growing companies in Europe, today announced an agreement for a global approach to planning and scheduling solutions with Novelis, a leader in aluminium rolled products. The order is the cherry at the top of a long list of booked successes over the past twelve months.

Novelis has reached agreement with Quintiq for state of the art solutions for its business, operational, and tactical planning. The solutions will be deployed in different production facilities across the world. With 37 locations in 12 countries Novelis realizes a turnover of US$ 6.2 billion annually. The global agreement includes software licenses and consultancy fees and follows the successful implementation of Quintiq throughout Novelis’ European plants.

"In the past year we have managed to sell our solution to a number of leading metal manufacturers in the world," says Victor Allis, CEO and co-founder of Quintiq. "This agreement with Novelis means Quintiq will serve as the company standard for the entire Novelis group."

"We have selected Quintiq for the unique combination of their state-of-the art software technology, in-depth understanding of our business processes in combination with a track record of making every project a success, no matter the complexities to be overcome. We are in the fortunate position that we have been able to base this evaluation on previous projects executed in Europe and some pilots projects in North America," says Kevin Greenawalt, President of Novelis North-America.

Quintiq is able to take into account the many variables involved in the manufacturing of aluminium rolled products, including aspects related to recycling, melting and casting facilities, continuous casters, preheat furnaces, hot mills, cold mills, annealing furnaces, tension levelers, slitters, cut-to-length machines, etc.

The aim of Novelis is to enhance performance and improve efficiency; by implementing the Quintiq solutions created for the metals industry, Novelis ensures the achievement of this aim. The Quintiq software specifically enables Novelis to plan its production and logistics optimally resulting in improved customer service (both increased delivery performance and reduced lead times), reduced working capital requirements (especially metal inventories) and increased throughput.

About Novelis

Novelis is a world leader in aluminium rolling. The company has operations on four continents comprising 37 operating facilities across 12 countries. It is the only company of its scale and scope that focuses solely on aluminium rolled products markets, including automotive and transportation, beverage and food cans, construction and industrial products, foil and flexible packaging and printing. Formed in 2005 as a spin-off from Alcan, Novelis builds on the strengths of Alcan’s 90-year history in the global aluminium and packaging industry with a new commitment to delivering value-added aluminium rolled products and services to customers worldwide. Please visit www.novelis.com for additional information.

About Quintiq

Quintiq offers a breakthrough technology empowering companies with flexible solutions, enabling them to solve their daily planning puzzle and optimize it fully, delivering bottom line value. Quintiq offers a standard software solution to companies active in metals, transportation & logistics and workforce for any planning, scheduling and supply chain optimization problem. Please visit www.quintiq.com for more information.

A smelter for Tucker Valley!

Trinidad & Tobago Express, Trinidad and Tobago Tuesday, May 24th 2005

Julien Kenny

Dr Sebastien, a Cedrosian scholar, has a brilliant idea that must seriously be considered. He "suggests" establishing the aluminium smelter at Chaguaramas. Well no actually, he was merely rhetorically questioning the responses had such a proposal been made. As we have heard from Mr Overbey, the point man for the project, Alcoa proposes to develop the smelter in a parkland environment, integrating it with the ecosystem. Chaguaramas clearly offers distinct advantages over all possible sites in the country.

First, there is the availability of land, more than the 2000 acres required, and much of this is flat land that will require minimal excavation and grading, unlike Union Estate at Vessigny/La Brea and the proposed Cap de Ville estate, both undulating and much crisscrossed with drainage channels. There is only one "river " in Tucker Valley, the Cuesa River and this is intermittent. Second, most of the floor of Tucker Valley is treeless as it was for many years devoted to citrus plantations. The few trees on the flat, mainly Samaan and Immortelle, and the clumps of bamboo, are all non-native species, and therefore expendable.

Third, there is abundant fresh water from the aquifer that lies below the valley floor, with existing boreholes in place. Fourth, there is a deepwater channel that was dredged by the US Navy in the 1940s to accommodate deep draft military vessels such as heavy cruisers that would provide a more than adequate sheltered deepwater harbour.

Fifth, there is no residential human settlement in Tucker Valley that would be disturbed by either the development or the operational phases of the smelter project. Sixth, Alcoa already has a bauxite terminal facility at Tembladora that could be converted to an alumina facility with the alumina being transported to the smelter by an overhead belt conveyor. Seventh, upscale housing facilities for the Alcoa executives are very close at hand in Westmoorings.

Eighth, there is a submarine gas line that brings in natural gas from the north close at hand and a branch of this could easily be brought ashore at Macqueripe Bay and into the head of Tucker Valley to the necessary power station. Ninth, the smelter would be situated in an existing park of forested hills and scenic trails, the Chaguaramas National Park.

Tenth, with the existing road and water infrastructure already in place the smelter would be up and running faster than possible at any other site and at lower capital cost. Eleventh, the close proximity of the IMA's state-of-the-art environmental monitoring facilities will ensure that Alcoa sticks to its high standards, irrespective of whether T&T ever has air and water pollution rules. Finally, it would provide jobs for the young men of the western peninsula.

Now, more seriously Dr Sebastien has focused on certain critical issues of development in this densely populated country, where there are about 260 persons per square kilometre, or about ten times the density of the United States of America. The first of these is the general attitudes of governments over the past several decades. He suggests that activities are centered in Port of Spain, both physical developments as well as administration and the exercise of political power. This has led over the years to a sharp division between urban and rural, and between Port of Spain and towns and communities elsewhere. Everything has to go to Port of Spain, the central "arena" or the "big top" of the nation. This has led to the general attitude that the rural communities are unimportant and incapable of determining their futures.

Cedros is just another example of the great urban rural divide, a divide that is probably far deeper than any ethnic divide. Yesterday, it was Toco and the ferry port that Mr Panday's government was going to impose unilaterally on the citizens of that part of the country, initiating land acquisition procedures without any consultation with citizens, acquiring private property for a "public purpose", in reality to give it to private interests for private commercial ventures.

Today it is the turn of the Cedros peninsula and the thousands of citizens who live there. Politicians are constantly issuing challenges the public to do this or that. My challenge? Let Alcoa, the NGC, the NEC, the Minister of Planning and Development, the Minister of Energy or the Minister of the Environment, counter arguments for a smelter in Chaguaramas as opposed to Chatham/Cap de Ville, point for point above. It is a brutal urban/rural conflict, with rural being possibly the loser. But do not use the "not in my backyard argument" - anyone can, and above all state exactly what Alcoa is paying for gas. The Chaguanas educator, David Subran, asks really important questions -is this the best use of the natural gas resource? Or of electricity? Can we handle the fluoride emissions? Will the authorities advise the citizenry of all implications of the smelter(s)?

Aldoga group to float for $10m

Brisbane Courier Mail, Australia - May 23, 2005

Richard Owen

THE mystery group behind Gladstone's stalled $2 billion Aldoga aluminium smelter and new partner Metallica Minerals plan to float their merged bauxite and alumina company on the Australian or London stock exchanges within a year.

Metallica's managing director Andrew Gillies said Cape Alumina now had sufficient funds to obtain access to the company's bauxite tenements on Cape York Peninsular, complete necessary permitting and start drilling.

"But we'll be looking at raising in the order of $10 million at least either through an ASX or Alternative Investment Market listing (in London) within the next 12 months to push ahead and expedite everything," he said yesterday.

"And you get a lot of bang for your buck up there so I'd have thought we'll have a pretty big resource base after the expenditure of $10 million."

His comments follow completion of Metallica's complex deal with the Transal Holdings-backed Aldoga Group to raise $1.86 million. Under the deal, Metallica placed 9.3 million shares to Aldoga associate Anegada Metals Corp which has also secured a 50 per cent stake in Cape Alumina.

Cape Alumina's assets include Metallica's flagship Weipa-Aurukun bauxite project, its Kingaroy bauxite exploration project and Anegada's Kimberley bauxite project – Kalumburu and Leeming.

Aldoga promoter and consultant John Benson said yesterday the group's West Australian tenements contained a resource of about 80 million tonnes of bauxite which was not sufficient to underpin development of a $1 billion alumina refinery.

"Metallica have indicated reserves within their tenements of about 80 million tonnes as well and collectively that would be sufficient on which to base a full feasibility study for a refinery," he said.

Anegada Metals Corp is a wholly owned British Virgin Islands subsidiary of Transal Holdings controlled by Uzbekistani industrial tycoon Azam Aslanov and his two sons, Amon and Firkat.

The company is the major shareholder in the Aldoga Aluminium Smelter project and owns 80 per cent of Kimberly tenement holder Aldoga Minerals – the balance of which is owned by Mr Benson.

Aldoga's other investors include Ukrainian steel maker Industrial Union of Donbass and the Marco Group – a New York-based investment and commodities trading house with close links to Russia's industrial oligarchs.

In late 2003 Aldoga signed up China Nonferrous Metal Industry's Foreign Engineering & Construction Co to supply equipment, technology and engineering for the smelter which was to start construction last June.

The same agreement included the promise of $771 million from the Export-Import Bank of China. Mr Benson put the delay down to a decision to revert to an original 420,000-tonne/year configuration while acknowledging that the strength of the Australian dollar had had a significant adverse impact on the project's economics, particularly relating to electricity costs.

But despite the delay Mr Benson remained confident the Aldoga smelter would achieve financial close "by October or November" following completion next month of detailed engineering design.

"The developments with Metallica and exploration over the next 12 months are designed to underpin the confidence of the smelter investors in letting them know that even if the current spike in alumina prices continues . . . in the longer term, we will have achieved vertical integration which will give us independence from the world market," he said.

Norsk Hydro building 30 mln usd aluminum pipe plant in China

Forbes 05.25.2005, 02:46 AM

BEIJING (AFX) - Norwegian oil and aluminum firm Norsk Hydro ASA said it has started building a new aluminum pipe plant in the eastern Chinese city of Suzhou with a total investment of 30 mln usd.

Hydro Aluminum Suzhou, wholly-owned by Norsk Hydro, will produce pipes mainly used in vehicle air conditioning systems, the company said in a statement.

'We are now establishing a Hydro Aluminum Chinese support center in Suzhou for our future growth in China. I expect that we will be able to take further steps to develop China into one of our most important markets,' said Jon-Harald Nilsen, president of Hydro Aluminum.

tom.wang@xinhuafinance.com

Alcoa sings praises of LME futures trading

Plastics & Rubber Weekly, UK 25/05/2005

By David Eldridge

The aluminium and packaging firm will wait before starting trading in plastics.

25 May 2005 – The LME has brought many benefits to aluminium and packaging company Alcoa, according to Kevin Anton, president of Alcoa Materials Management.

The company, which has a plastics and aluminium packaging business which generated revenues of $3.2bn (E2.5bn) in 2004, is assessing the start of plastics futures trading on the LME from this Friday.

At an LME seminar in London yesterday, he said: "We will be more on the sidelines watching the market evolve and picking our timing. I think it won’t be long before we get involved, but it won’t be this Friday either."

Anton explained how Alcoa overcame its opposition to aluminium futures trading when it started in the 1980s and now makes full use of the LME market. "The transformation Alcoa has made in using the LME has been phenomenal."

He highlighted the aluminium futures market’s liquidity, price transparency and usefulness in inventory management.

For Alcoa, the market has allowed it to clearly differentiate its commodity and fabricating lines of business. The company can now properly measure the profitability of its business segments, he said.

From next week, PRW.com will be publishing the LME’s Official Prices for polypropylene and LLDPE futures. These prices are announced by the LME on a daily basis and you can receive them free every business day from next Tuesday via PRW.com. If you are not already a subscriber, simply register for the free daily news alert sent to you by email at www.prw.com

BHP Billiton lines up US$1bn investment for India

India Infoline.com, India 5/25/2005 11:25:35 AM IST

BHP Billiton, the world's largest mining company, is likely to pump in US$1bn in India for acquisition of bauxite mines and for setting up an aluminium plant in Orissa, says a newspaper report. The Australian company has submitted the proposals with the Union Government, says the national daily.

Reacting to the development, Commerce & Industry Minister Kamal Nath said, "Indian investments Australia exceeds the cumulative Australian investment in India. Also, any form of Foreign Direct Investments (FDI) is welcome as it generates employment in the country."

It may be recalled that BHP has tied up with South Korean steel major POSCO for setting up a US$12-bn steel plant in Orissa. The proposed 12-million-tonnes-per-year steel mill has run into rough weather due to stiff opposition to POSCO's plan of exporting iron ore from Orissa.

Old smelter is worth its weight in gold

TheNewsTribune.com, WA May 26th, 2005 12:11 PM

KELLY KEARSLEY; The News Tribune

Workers maneuver an 8-ton superstructure of an aluminum reduction cell at the former Kaiser Aluminum smelter on the Tacoma Tideflats. The superstructure is one of 400 that will be removed and cut for recycling. So far, 60 have been taken out of the defunct plant.

http://www.thenewstribune.com/front/topphoto/story/4898383p-4490300c.html

When Port of Tacoma officials bought the defunct Kaiser Aluminum smelter in 2003, they knew they’d have to clean up tons of hazardous and solid waste.

But port staff members said earning money from one of the major phases of the cleanup was a nice surprise.

In the two years since it bought the property, the port has removed 6,000 pounds of waste and recycled 550,000 pounds of transformer oil from the plant’s electrical system. But the real work started in April, when workers began dismantling 400 "reduction cells" that the plant used to turn alumina ore into aluminum metal.

This phase of the cleanup – the first of two phases – will generate between 20 million and 40 million pounds of solid and hazardous waste. The hazardous waste includes contaminants such as cyanide and polycyclic aromatic hydrocarbons and will be sent to a federally approved landfill.

The solid waste, including thousands of pounds of steel, aluminum and copper from the reduction cells, has proved more valuable than your average garbage.

The port initially estimated the cost of this part of the cleanup at $6.7 million. But by selling the all that scrap metal, the port will net $909,000.

"It’s a function of the size of the project, the type of project, what was left here and the rising price of metals," Evans said. "By breaking the project up into smaller components, we’ve been able to take advantage of the (scrap metal) market conditions."

Evans doesn’t know the total cost of the cleanup, though the port did negotiate a credit for the work from Kaiser when it bought the property. This is likely the only phase that will make a profit, Evans said.

The huge reduction cells stand in narrow rows inside the plant’s long buildings. Philip Services Corp., the toxic-waste handler contracted to clean up the site, is using the plant’s old cranes – some of them with parts more than a century old – to hoist pieces of the cells onto trailers. The workers wear masks to protect them from the dust. Outside, others use torches to cut the cells into more manageable pieces. Evans expects the hundreds of reduction cells to be dismantled by the end of the year.

The final, major phase of the cleanup will cost the port about $4.1 million and includes demolishing more than 100 structures on the smelter grounds and tearing out the railroad tracks. The Kaiser plant employed nearly 400 people at one point, before it closed in June 2000.

Once the cleanup is completed, the port will have a flat, empty piece of ground ready for development.

Mike Wasem, the port’s spokesman, said the port doesn’t have immediate plans for the property, which is a strategic position next to the new Evergreen terminal and the Blair waterway.

"We’re still evaluating it for future maritime commerce," Wasem said.

Republic of Guinea Approves Environmental and Social Impact Assessment...

mysan.de (Pressemitteilung), Germany May 26, 2005

.... for Construction of Global Alumina RefinerySignificant Implementation Milestone Follows Ratification

TORONTO, May 26 /PRNewswire-FirstCall/ -- Global Alumina Corporation (Global Alumina) (TSX: GPC.U) announced today that the Republic of Guinea has approved the Environmental and Social Impact Assessment ("ESIA") for the construction of its 2.8 million tonnes per annum alumina refinery in Boke, Guinea. Approval by the Minister of Environment of the Republic of Guinea follows ratification of the Company’s Basic Agreement announced May 19th and authorizes Global Alumina’s wholly-owned subsidiary, Guinea Alumina Corporation, S.A., to commence construction of the refinery in accordance with the ESIA submitted by the Company in February 2005.

"The Ministry of the Environment, appreciating the quality of the environmental and social impact assessment report, the relevant responses from the engineering and design department and the promoter in light of the concerns of the target groups (ministries, NGOs and communities) regarding the project’s potential impact on the surroundings, confirms that the ESIA complies with Guinean procedure as well as with the operational policies of the World Bank and the International Finance Corporation in this respect," stated Cheick Abdel Kader Sangare, Minister of Environment in a letter to the Minister of Mines and Geology dated May 23, 2005.

"The ESIA took all of the project’s environmental and social concerns into account. In fact, during the public consultation process, followed by hearings on recreation days, the ministerial departments concerned, the NGOs and local populations, voiced their approval of the project’s development process ... To this effect, the Ministry of the Environment authorizes [the Project] to proceed with the start-up of the work in compliance with its feasibility study," concluded the Minister.

"Approval of the ESIA is another significant milestone in the successful implementation of the refinery and we are grateful for the Government of Guinea’s ongoing support on all levels in facilitating the progress of this monumental project," said Bruce Wrobel, Chairman and Chief Executive Officer of Global Alumina. "We are fully committed to maintaining our high environmental and social standards and our overall development schedule which will commence construction in the fourth quarter of this year."

ABOUT GLOBAL ALUMINA

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

Alcoa Signs Global Purchase Agreement for Intergraph PDS

Ten Links, CA May 26, 2005

HUNTSVILLE, Alabama, May 26, 2005 - Intergraph Corporation <NASDAQ: INGR> today announced that Alcoa, the world's largest producer of alumina, has signed a global purchase agreement for the Intergraph Plant Design System (PDS(r)) and related software. Under terms of the five-year agreement, the Intergraph Process, Power & Marine division will supply PDS and other design software to Alcoa World Alumina for use by its engineering, construction and procurement contractors worldwide. The contract represents global standardization on PDS for all Alcoa's alumina process plant major projects. Implementation of PDS as the Alcoa global standard is aimed at promoting greater business advantage through worldwide design re-use, increased project efficiency, advanced best practices and greater efficiency in utilizing engineering and construction contractors.

Alcoa is using or planning to use PDS to design alumina plant construction worldwide. Efforts include major projects in Australia, such as the Pinjarra Efficiency Upgrade now in the construction phase and the Wagerup Unit 3 Expansion, currently in feasibility phase. The facilities are part of Alcoa's three-refinery operation in Western Australia, the world's largest single source of smelter-grade alumina, supplying nearly 15 percent of the international market. Additional Alcoa projects using PDS include the Jamalco, Jamaica, and Sao Luis, Brazil, refineries expansion studies (engineering underway). Alumina (aluminum oxide) is refined from bauxite and is smelted to produce aluminum.

Paul Buch, manager - Engineering & Maintenance Systems, Western Australian Operations, Alcoa World Alumina, said, "The purchase agreement with Intergraph is a natural extension of Alcoa's existing PDS installed base along with the fact PDS is the global standard for plant design. Standardizing on PDS will allow Alcoa to re-use optimal designs in our projects around the world, capitalize on our extensive PDS knowledge and better control engineering IT costs. Deciding factors included Intergraph's market and technology leadership as well as worldwide support at the local level."

Kevin Stanley, senior vice president, Intergraph Process, Power & Marine, said, "Alcoa drives much of the advanced mining and metals processing technology in Australia and around the world. The Alcoa purchase agreement is indicative of industry's continuing commitment to PDS by major plant owners and engineering firms with large, long-term projects."

About Intergraph PDS

The Intergraph Plant Design System (www.intergraph.com/ppm/pds) is the world's leading engineering design software for the process manufacturing, electrical power generation, offshore petroleum and ship outfitting industries. It is used worldwide on projects ranging from revamping smaller plants to designing multi-billion dollar offshore platforms. PDS enables concurrent multi-discipline engineering and worksharing, improved design coordination, fewer errors and increased productivity. Specification-driven design eliminates field rework and accurate material takeoffs cut procurement costs. Extensive reference data speeds creation of models and schematics. PDS comprises integrated 2D and 3D modules corresponding to engineering tasks in the design workflow. Modules include: Process Flow Diagram (PFD), Piping & Instrumentation Diagram (P&ID), Instrumentation, Piping, Pipe Support Modeler & Explorer, Equipment Modeling, Structural Modeling (FrameWorks(r) Plus), HVAC Modeling, Electrical Raceway and Interference Checking. PDS is extensively integrated with Intergraph software that supports engineering, design, operations and maintenance tasks throughout the plant and rig life cycle.

About Alcoa

Alcoa (www.alcoa.com/global/en/home.asp) is the world's leading producer of primary aluminum, fabricated aluminum and alumina. Alcoa serves the aerospace, automotive, packaging, building and construction, commercial transportation and industrial markets. The world's leading producer of alumina, Alcoa has global refinery capacity of 14 million metric tons per year, nearly a third of the international market. The company is headquartered in Pittsburgh, Penn., USA and employs 131,000 people in 350 locations throughout 43 countries. Revenues in 2004 were $23.5 billion (U. S.).

Alcoa gets antitrust query over smelting chemical

Reuters Canada, Canada Friday, May 27, 2005 10:51:03 PM ET

WASHINGTON (Reuters) - Alcoa Inc. said on Friday it had received a grand jury subpoena on Wednesday seeking documents in connection with a U.S. Justice Department antitrust probe of the aluminum fluoride industry.

Alcoa units also received document requests this week from the Competition Bureau Canada and the Australian Competition and Consumer Commission regarding possible anti-competitive conduct by industry suppliers, the company said in a filing with the U.S. Securities and Exchange Commission.

Aluminum fluoride is used in the electrolytic smelting of aluminum. It can reduce aluminum's melting point and increase conductivity.

"We don't know why the Justice Department is investigating," said Alcoa spokesman Kevin Lowery. "We will be cooperating fully with the investigation. We have been asked to produce some documents and we are going to do that."

The grand jury subpoena was issued by the U.S. District Court for the Northern District of Illinois.

Alcoa uses 80,000 tons of the aluminum fluoride catalyst per year, Lowery said. The company produces 60,000 tons and buys another 40,000 tons.

The company gets $15 million in revenue a year on the excess product it sells, he said, out of total annual revenues of $23.5 billion.

A spokeswoman for the U.S. Justice Department had no immediate comment. The Justice Department has prosecuted a series of industrial price-fixing cases in recent years.

The investigations have led to guilty pleas, jail time and hundreds of millions of dollars in fines in industries ranging from vitamins and computer chips to rubber chemicals.

(Additional reporting by Peter Kaplan)

Russia and Venezuela Start Negotiation Round

Prensa Latina, Cuba May 30, 2005

Caracas, May 30 (Prensa Latina) Russia and Venezuela began their first round of negotiations Monday, with the participation of 80 businesses from both countries with the purpose of significantly reinforcing economic cooperation.

Victor Alvarez, Venezuelan Minister of Primary Industry and Mining, said when opening the meeting that the strength of both countries are being complemented in the negotiation process, and that among the projects being discussed is the construction of a new aluminium plant for special alloys destined for the car and food industries.

Mijail Orlovets, Russian Ambassador in Venezuela, assured that more than 30 Russian business people and 15 corporations are here representing the Russian mining and car industries, among others.

Orlovets said that the idea for the meeting was born after the visit of President Hugo Chavez to Russia in November 2004, and identified areas of particular attention are energy, oil, gas, geophysics, car industry, diesel engines, and the construction of a hydroelectric plant in the Venezuelan state of Tachira.

Among the Russian enterprises present are Lukoil, Russkie Avtobusi, Tractoroexport, Rusal Russki Alumini, Souyzplodoimport, Electroagregat, Fgup Vo Technopromexport and Energoprom.

ef/tac/ml/jwp

Giant dam and smelter boost economy and raise tensions in Iceland

Helsingin Sanomat, Finland May 31, 2005

Harnessing the rivers streaming from the glacier Vatnajökull aggravates some, as untouched highlands disappear

By Mari Manninen in Iceland

It is an impressive sight. An enormous wall rises up from a deep valley in the wilderness on eastern Iceland. Dozens of oversized trucks look like a child's toys as they ascend along the winding road toward the top of the dam under construction.

The dam of Karahnjukar is approaching its maximum height of 190 metres, but debate surrounding the gigantic energy and industrial project continues.

The national energy company Landsvirkjun will harness two rivers flowing from Europe's largest glacier Vatnajökull to produce electricity for a new aluminium smelter.

The controversy follows a familiar pattern: How much can the untouched landscape be changed in the name of employment and economic growth?

Damming the glaciers has been planned for decades, and the project was nearly cancelled several times. Those opposing the project rejoiced as Norwegian energy and aluminium company Norsk Hydro pulled out. The government found new builders to replace Norsk Hydro.

Officials rejected the project in an environmental impact review, but the Minister for the Environment approved the project after additional demands had been met.

Today the project is in full swing: dams, long pipelines to the power plant, the plant itself, and the smelter a few dozen kilometres away. The factory, owned by the American aluminium giant Alcoa, should start running in two years' time.

A large part of formerly sleepy, rustic Icelandic countryside has sprung to life. Trucks rumble along tens of kilometres of new, paved road across the unpopulated, wind-ravaged highlands to reach the construction site. Many new houses are being built in the town next to the smelter.

Chinese and Italian migrant workers visit the shops and restaurants in nearby towns. Curious tourists come to watch the controversial project, which even caused singer Björk's mother to go on a brief hunger strike.

The project is the largest in Iceland's history. The power plant will increase the country's energy output by 60%, although all of its energy will be sold to the new factory. The factory will double Iceland's aluminium production, which is already one of Iceland's most important export industries.

It is profitable for American aluminiun giant Alcoa to build a factory in Iceland and to ship the produce around the world from there, since Iceland offers hydroelectric power, which the smelter needs plenty of, at a very competitive price. A renewable source of energy is an advantage, as pollution controls are becoming more stringent around the world.

The most intense debate has been raised over the damming of the highland rivers. The highlands of Iceland are among Europe's largest areas of untouched nature. "The area is valuable already in itself," says Arni Finnsson, head of the Icelandic Nature Conservation Association.

The paths of rivers will change, valleys will be flooded by artificial lakes, the landscape will be altered and a vast network of tunnels will be dug in the ground. According to Arni Finnsson's calculations, the project will directly impact an area of 1,000 square kilometres, and will indirectly affect in a much wider area.

Geese nest and wild reindeer graze in the vicinity of the dam. The biggest fears Arni Finnsson has are of erosion and the fate of the delicate flora.

Mud will gather in the artificial lakes, and when the water is low, the dust from the mud may cover nearby vegetation as it is blown about by the wind. The fine dust from the glacial rivers may in turn be blown all the way into settled areas. The wind in the highlands is known to be fierce.

Solutions to the erosion issue, such as fencing off the lake or watering the shores during droughts, are being examined. Dust storms rise from the banks of natural rivers as well, says project information officer Sigurdur Arnalds.

He claims that the dam's effect on the geese and reindeer is only slight. "The number of short-billed geese has grown considerably, and only one percent of their nests will be destroyed. The reindeer population is being controlled by hunting even now. When snow has prevented the reindeer from calving in the area, they have calved elsewhere. The reindeer must get accustomed to heavier traffic, though," Sigurdur Arnalds admits.

On the way back from the dam a herd of about 100 reindeer keeps foraging for food under the snow as cars drive past close by along the road built for the construction of the plant.

"We are not destroying Europe's largest wilderness, we are only slightly reducing its size," says Sigurdur Arnalds. The construction workers are happy to show a map where the dam site is a tiny speck on the edge of the vast wilderness.

They also point out that contrary to many dam projects around the world, no settlements or people need to be moved out of the way of the reservoirs. Although the project is colossal in Icelandic terms, the power output is only a fraction of that of the three-gorge dam in China.

Opponents of the aluminium project also have arguments based on economics. In their opinion Iceland is relying too heavily on one product. Governments have been running an industrial policy that attracts energy-hungry aluminium manufacturers.

"We think Iceland already refines enough aluminium, and electricity has been sold at a sufficiently low cost," summarises Left-green MP Thurdur Backman.

He is afraid that the large construction site is too large, as Iceland has only 300,000 inhabitants. The effects of the construction work can be seen as strong growth figures in Iceland's economy.

The Parliament and most of the people living near the dam site agree that the aluminium factory will save eastern Iceland. The smelter directly creates 450 new jobs, and almost as many indirectly.

Housing for 1 200 new inhabitants will be built in the centre of eastern Iceland, Egilstadir, population 3 500. In the nearby smelter town of Fjardabyggd the growth is equally fast.

"People have been moving away from here for years. Unemployment used to be five to seven percent, now it is one percent. People are moving here", explains Eikur Björn Björngivsson, mayor of Egilsstadir

In the building stage of the project, there are over 2,000 construction workers in eastern Iceland, but MP Thurdur Bacman, who is native to the region, points out that most of the labour force for the project comes from abroad.

Those in favour of the project claim that Iceland would not have enough workers otherwise.

Opponents claim that the Italian company Impergilo is offering the foreign workers inferior salaries and poor living conditions.

Supporters state that the dispute over salaries has been resolved and that the leaking roofs of the workers' lodgings have been fixed.

Supporters and opponents of the project also fail to agree on whether the electricity for the smelter is being sold at a profitable price.

Many Icelanders are already hoping that the aluminium smelter can begin production upon being finished.

Environmentalists also have a reason to celebrate, as the Parliament decided in January to grant national park status to a vast area bordering on the dam site. The zone covers one-tenth of Iceland's surface area.

Helsingin Sanomat / First published in print 28.5.2005

Low-cost aluminium fuels India's expansion

Reuters.uk, UK Tue May 31, 2005 10:10 AM BST

By Atul Prakash

BOMBAY (Reuters) - India's drive to more than double aluminium capacity in the next five years, turning abundant ore into metal for its fast-growing economy, will also allow a six-fold jump in exports.

Hindalco Industries and National Aluminium Co. are among those expanding to take advantage of production costs that are among the world's lowest.

"Aluminium production is moving to this part of the world," said a senior official of a leading Indian producer. "Demand in the region is growing and, geographically, we are better situated to meet that demand."

India's economy, Asia's fourth-largest, was estimated to have expanded by 6.9 percent in the year to March 2005.

In the next five years, the country's aluminium demand is expected to rise 7-10 percent annually to about 1 million tonnes in 2010, due to rising consumption of the metal in construction, cars and electrical goods, the officials said.

They said India, after completing various expansion projects, could have an export surplus of 1 million tonnes of aluminium, compared with current annual exports of 165,000 tonnes.

With the metal in strong demand around the world, India is expected to ship most the exports to its traditional markets in Taiwan, Thailand, South Korea, Japan and the Middle East.

India's alumina surplus would also rise to 4 million tonnes, from 1.3 million tonnes, they said. Alumina is a white powder made from bauxite ore -- of which India's reserves are thought to be the world's fifth-largest -- and processed into aluminium.

About two-thirds of its alumina exports go to China, while Russia and Iran take most of the rest.

"China's demand is not going to go down as their development is so quick," said C. R. Pradhan, chairman and managing director of National Aluminium Co.

MORE CAPACITY

India's aluminium capacity would jump to over 2 million tonnes in the next three to five years, from 900,000 tonnes currently, industry officials said.

They said alumina capacity was set to record even higher growth in the same period, around 167 percent to about 8 million tonnes, or almost double the domestic sector's needs.

Two tonnes of alumina are needed to make one tonne of metal.

In March, aluminium prices hit their highest in a decade, but the metal has since lost nearly 14 percent in value.

But India's top producers, which also include London-listed Vedanta Resources, say they could ride any downturn in the commodity cycle due to their low production costs.

It costs about $5 to mine a tonne of bauxite in India, compared with a world average of $20 to $25, due to high-grade ore, cheap labour and the low cost of electricity from coal-based power units owned by the metal producers, industry analysts say.

It costs $900 to $1,000 a tonne to produce aluminium against a world average of about $1,250.

"High-cost producers will close down first," said S.K. Tamotia, director with Vedanta Resources. "We will always remain competitive in the market, irrespective of world demand."

LOW-COST BAUXITE

India has about 3 billion tonnes of bauxite reserves, some estimates say, which is enough for over 300 years of domestic demand. Only Australia, Guinea, Brazil and Jamaica have more.

Top alumina suppliers include BHP Billiton, Rio Tinto's Comalco unit and Alcoa.

"There are no major bauxite supply constraints in India," credit rating agency ICRA said in a report. "Aluminium production is more a function of smelter capacity than bauxite."

Four-fifths of India's bauxite is gibbsite grade, which needs less power for refining due to the low presence of impurities.

Drilling costs are also reduced by the fact most of India's large bauxite deposits are located near to the surface.

The private sector owns 95 percent of about 180 operational bauxite mines in India. Major producing areas include the eastern state of Orissa and the southern state of Andhra Pradesh.

Indian producers' margins are boosted by their low production costs and a 10 percent duty against imports of the metal.

Hindalco, India's top aluminium producer, saw net profit rise 59 percent to 13.3 billion rupees in the year to March, while net profit at the second-largest producer, National Aluminium, rose 66 percent to 12.22 billion rupees.

© Reuters 2005. All Rights Reserved.