AluNews - November 2005

RUSAL Appoints New Head of Sustainability

Russia Newswire (press release), Russia 01-Nov-2005

MOSCOW (RNWire) – RUSAL, a top three global aluminium producer, has today announced the appointment of Oleg Burkatskiy as Deputy General Director for Sustainability and RUSAL Business System.

Burkatskiy, who was previously Managing Director of RUSAL’s Sayanogorsk Aluminium Smelter, will be responsible for devising and implementing labour safety, production efficiency and environmental programmes across RUSAL’s international operations.

He will also oversee one of the company’s priority areas – the delivery of RUSAL Business Systems aimed at insuring productivity and efficiency growth, as well as cost reduction through systematic approaches to continuous improvement.

Oleg Burkatskiy replaces Duncan Hedditch who has decided to step down for personal reasons.

The company’s management team is evaluating a number of potential candidates to head the Sayanogorsk Aluminium Smelter. The new appointment will be announced shortly.

About RUSAL Business System

As part of developing the integrated RUSAL Business System (RBS), the company searches, selects, creates and introduces the best production and management practices, as well as builds a bank of knowledge to effectively reach its strategic objectives, sustain long-term growth and high level of competitiveness. RUSAL views RBS as the key vehicle for making it the most effective aluminium company in the world.

Biography

Oleg Burkatskiy, 40, joined the Krasnoyarsk Aluminium Smelter as a cell operator in 1987, after graduating from the Institute of Nonferrous Metals. By 2000, when RUSAL was formed, Burkatskiy was Head of Production and Chief Engineer. In early 2001, he was appointed the Head of Aluminium Directorate at RUSAL headquarters and then, in April 2001, became the Executive Director of the Novokuznetsk Aluminium Smelter. Since June 2002, Oleg Burkatskiy was the General Director of the Sayanogorsk Aluminium Smelter

Local Residents Place High Hopes on Guinea's New Aluminum Refinery

allAfrica.com November 1, 2005

Sebastian Satigui, Conakry

For many citizens of Kamsar and Sangaredi, two cities about two hundred miles north of the capital Conakry in the West African nation of Guinea, bauxite mining has always been the business of government and of multinationals.

Market analysts estimate that Guinea is endowed with an estimated 25 billion metric tons of bauxite, accounting for at least a third of known world reserves. Guinea's bauxite supplies nearly 50 percent of U.S. and Canadian imports.

Local populations, however, largely have been ignored in the planning and execution of projects that have yielded billions of dollars since the beginning of bauxite exploitation in the mid-1970s in Guinea, the world's second largest bauxite producer after Australia.

During a recent site visit by a delegation from the United States Congress-funded African Development Foundation (ADF), headed by the president, Nate Fields, feedback from grassroots residents suggested that a new era in bauxite mining has emerged in Guinea, thanks to the participatory approach being developed by Guinea Aluminum Corporation, a subsidiary of Global Alumina, a Canadian-registered company with operational headquarters in New York.

The company's estimated outlay of U.S.$2.3 billion dollars to build a refinery for processing bauxite into alumina for export to world markets is the largest foreign direct investment to date in Guinea

In Kamsar, where the delegation visited the construction site for the new port, Mamadou Barry, a 57-year-old man dressed in a traditional green costume with a large straw-hat and sunglasses protecting him from the hot October sunshine, says: "I have lived here all my life. I have seen and heard about a number of projects. Until Global Alumina began to develop its project, nobody had ever asked me my opinion, let alone proposed a job for me and my children".

Mamady Youla, Guinea Aluminum Corporation's director general, explains that the company, as a matter of policy, chose to involve local populations in the planning and construction of the new installations. "We could have brought here bulldozers and other mechanical engines to clean the area in two weeks," he said. "However, we preferred to give a chance to those who wanted to earn some money. We hired over 300 people and the job was done in four months".

When the ADF delegation arrived in Sangaredi, it was welcomed by Martina Fabri Forget, a Canadian sociologist who worked for many years in mining projects in South America and Asia. She was hired by Global Alumina to help organize nineteen villages located around the mine to deal with the changes that will affect their environment. Fabri Forget emphasizes that her role is to work with grassroots population to figure out what their needs are and help them achieve them. So far, she has organized several task forces in charge of planning for the construction of schools, heath centers, housing, roads and other infrastructure to be funded by Global Alumina. "The reason why I love this project is the commitment to the people. We are not here to just take the bauxite out but to make sure the populations benefit from the wealth of their environment."

She is echoed by Mamadou Diouldé Bah, president of Sangaredi's Rural Development Community, who says "we feel that this project is ours." He adds: "Everybody in the surrounding villages understands that this project, while enriching its promoters, will greatly improve the conditions of living of Sangaredi citizens".

Guinea's people are among the world's poorest. The country ranks 156 out of 177 nations on UNDP's Human Development Index 2005, which incorporates life expectancy and educational attainment as well as standard of living. Ruled for more than two decades by General Lansana Conté, who seized power in 1984 and was elected president in 1993 and reelected in 1998 and 2003, Guinea has suffered from surrounding turmoil. Conflicts in neighboring Liberia and Sierra Leone have spilled fighting, refugees and humanitarian emergencies into the country, which also borders Cote d'Ivoire, Guinea-Bissau, Senegal and Mali.

Despite the high hopes placed in Global Alumina's project by local populations, some critics believe the company needs to better prepare for the consequences of environmental degradation that can harm the area where the large refinery will operate.

Defending the company's approach, Youla says has Global Alumina has entered into a strategic partnership with the United Nations Development Program and its sister agencies to broaden the social and economic impact of the project and is working toward a similar development alliance with the United States Agency for International Development and the African Development Bank. The company is also a signatory to the Global Compact, a United Nations effort initiated by Secretary General Kofi Annan to encourage socially responsible business practices around the world. "We really take all aspects of this project very seriously," the director general says.

Alcan cost pressures eat into price gains

Metro Toronto, Canada Tuesday, November 01, 2005 1:46:48 PM ET

By Carole Vaporean

LONDON (Reuters) - Alcan Inc.<AL.TO> is benefiting from higher metal prices and meeting savings goals set after last year's acquisition of France's Pechiney but has been dogged by rising costs, Chief Operating Officer Richard Evans said.

"The whole industry has been under a lot of cost pressure. Most of the (aluminum) price increases have been offset by energy, raw materials and transportation costs," Evans told Reuters.

He said about 80 percent of aluminum price gains had been offset by cost increases at the world's No.2 producer.

"So it is not Pechiney. It's the same pressures that have affected (No.1 producer) Alcoa <AA.N> and other producers." Evans said Alcan has set a cost reduction target of $360 million from the acquisition.

"We expect those to be fully implemented by the end of the year, with the full benefit coming in 2006, '07, '08."

While price increases had generated an $800 million annual gain in the 2003 to 2005 period, Alcan had incurred $670 million in annual cost increases that were independent of Pechiney.

"So they have offset much of the price increases that we've had in the last two years," he added.

London Metal Exchange three-months aluminum started 2003 around $1,350 per ton and finished Tuesday at $1,976.

Price increases in other metals like copper and nickel had been greater, with smaller cost increases.

Key to much of this was China, which had been very positive for many commodities, but slightly negative for aluminum because of over-expanded primary aluminum production. "We think that is about to change," he said. "Whereas they had been adding smelting capacity at 30 percent a year, that's slowing down. We think that's going to continue slowing down."

Factors behind this were alumina and power shortages in China along with a five percent export tax implemented this year.

Two years ago the Chinese government offered domestic producers a 15 percent rebate to export aluminum to stimulate capacity development. But over-expansion led to the current tax with a net 20 percent change in price for Chinese smelters. "The stage is set for a potential major shift in China's impact on primary aluminum," Evans said.

In addition, he thought China had made a clear shift in its investment from primary aluminum to alumina and downstream semi-fabrication.

"The net effect of all of that, we think, is that the primary capacity in China will slow, but the alumina and semi-fab will increase. So you can assume that will put (downward) pressure on alumina and semi-fab prices, but upward pressure on primary aluminum prices, whereas the exact opposite has been true for the last three years."

China would increasingly seek investments outside the country, in Australia and elsewhere.

"You'll continue to see this because they need the raw material," he said.

Evans saw a number of projects in the pipeline to expand global alumina production.

"We think spot alumina prices will fall in 2006 and 2007, because smelting capacity growth is slowing and development of alumina is growing."

(c) Reuters 2005. All rights reserved.

Kaiser Aluminum announces major expansion at Trentwood

kgw.com (subscription), OR 11/01/2005 Associated Press

Kaiser Aluminum Corp. said Monday it will spend $75 million to expand its rolling mill in the Spokane Valley, a dramatic sign for a factory that once seemed in danger of closing.

Demand for the Trentwood mill's rolled aluminum has skyrocketed as the aerospace industry and other manufacturing sectors have rebounded.

The mill employs about 600 workers, and it is not clear if the work force will be expanded anytime soon.

"It is anticipated that this will have a positive effect on employment," said Geoff Mordock, a Kaiser spokesman. "The level of employment when this equipment is installed will depend mostly on the general level of business and market activity at that time."

The expansion is expected to take three years.

"This is an important expansion to meet a growing worldwide demand in our major markets for high-quality fabricated aluminum products," said Jack A. Hockema, president and CEO.

The expansion includes the addition of a state-of-the-art thick plate stretcher, horizontal heat treat furnaces, an ultrasonic inspection system and other equipment to complement existing capabilities for light gauge plate and sheet.

The new equipment will enable Kaiser to supply stretched plate in thicknesses of up to 10 inches, he said.

Kaiser, once the largest manufacturing employer in Spokane County, endured a lengthy labor dispute and then high electricity prices in the last five years, with the company ending up in bankruptcy court.

The Trentwood mill and a smelter in nearby Mead once employed some 2,000 workers. But the Mead smelter has been permanently closed.

German Government: Plans Norsk Hydro Talks Over Aluminum Plants

Business Online, UK November 02, 2005 07:03 ET (12:03 GMT)

BERLIN -(Dow Jones)- The German government is planning to hold talks with Norsk Hydro ASA (NHY) in a bid to prevent the Norwegian oil-and-gas firm's closure of two aluminum plants in Germany, a government spokesman confirmed Wednesday, without specifying a date.

German newspaper Bild earlier Wednesday reported that German Chancellor Gerhard Schroeder has invited several German politicians and Norsk Hydro Chief Executive Eivind Reiten to discuss how to save the aluminum plants from closure.

Hydro plans to close its Stade plant in Germany, which has annual capacity of 70,000 tons of aluminum. It said it wasn't able to negotiate a competitive deal regarding high energy prices.

The company's part-owned Hamburg aluminum smelter, with a capacity of 130,000 tons, is due to close at the end of the year, also due to the lack of a new power contract.

German Government: Plans Norsk Hydro Talks Over Plants -2-

German Economics and Labor Minister Wolfgang Clement told reporters Wednesday that it's "very good" that the chancellor is getting involved.

"It's an extraordinarily important issue," Clement said. "It's difficult to comprehend that they didn't come to any solution in Hamburg."

Clement was referring to the offer by Georgsmarienhuette Holding (GGM.YY), which had unsuccessfully bid for the Hamburg smelter.

A spokesman for the German government said the talks will examine whether Norsk Hydro could be willing to sell the plants to another company.

The owners of the Hamburg plant - Hydro, Alcoa Inc. (AA) and Austrian Aluminum AG each own 33% stakes - offered the plant for sale but said last month that bids from several parties did not meet the needs of the owners.

"It's up to the owners if (a sale of the Hamburg plant) is to be re-opened or not," Hydro spokesman Thomas Knutzen said Wednesday.

Knutzen wouldn't comment on whether his company would consider selling the Stade plant, but said Hydro would discuss it with the government if it was on the agenda.

He said his company was participating in the talks because, "we are keen to make sure Germany has an energy policy that means we can maintain our operations there," in particular, Hydro's 230,000 ton Nuess smelter.

The company said it plans on keeping that smelter open for a few more years.

"If we can help them to improve (such an energy policy), we are happy to work on that," Knutzen said.

Asked if there was any chance that Hydro would consider keeping the Stade plant open, he said, "It has been decided to close it by (Hydro's) board, but it hasn't yet been implemented."

The root of the problem, as Hydro has said previously, is power prices that make the two plants unprofitable after their power contracts expire at the end of this year.

-By Andrea Thomas and Andreas Kissler in Berlin and Ian Talley in Olso, Dow Jones Newswires; +49-30-288-8410; andrea.thomas@dowjones.com

Copyright (c) 2005 Dow Jones & Company, Inc.

Romania: Alum Tulcea to invest ten billion ROL

Reporter.gr (subscription), Greece 16:13 - 02 November 2005

Alum Tulcea producer invests ten billion ROL in the upgrading of loading and stocking equipment for alumina, the company also installing a de-dusting system in conformity with a technical solution offered by Alro Slatina plant, Alum's majority shareholder. Alro managed the implementation of this project by its own resources, "ACT Media News Agency" informs.

"Prior to the implementation of this investment, loading ships with alumina used to generate a huge dust cloud. The de-dusting system allowed us to eliminate the losses and to observe the standards in the field of environment protection", Dan Mircea Gheorghe, Director general of Alum Tulcea, said.

Along with the loading system, a de-dusting and unloading installation from railway wagons, also drafted and manufactured by Alro Slatina, is in the finalization course at the alumina stocking silos. These works are part of an extended programme, according to the environment protection norms that include waste industrial water treatment, electro-filters repair and strengthening the waste damp barrage.

The development strategy applied by Marco Industries at Alro Slatina is also extended to Alum Tulcea. Slatina plant already fulfils all its obligations in the field of environment protection, as they are set by the European Union. Alro's investments in environment protection programmes went beyond a 70 million dollars mark, and the emissions of noxious gases are below the limits accepted by the EU.

A similar situation can be seen at the aluminium alloys producer Alprom Slatina. Marco Industries' investment programme provides the increase of alumina production at Alum Tulcea by one million tonnes per year.

Alro is set to achieve a production of 420,000 tonnes of alumina per year and Alprom 120,000 tonnes of aluminium kerfs annually. Alum Tulcea is the sole Romanian producer of calcinated alumina used to obtain aluminium. The company is one of the main suppliers of raw material for Alro Slatina plant. The main markets for alumina produced by Alum are in the European Union (Italy, Greece, Germany, France, Great Britain, Hungary etc.), Turkey and countries in the Balkan zone.

Source: ACT Media News Agency

Alcan spinoff Novelis exits aluminum alloys business in Europe; 105 jobs affected

CBC News, Canada 09:35:58 EST Nov 3, 2005

ATLANTA (CP) - Alcan spinoff Novelis Inc. is quitting the aluminum alloys business in Europe and closing a small money-losing plant, affecting 105 jobs in Italy.

Novelis announced Thursday it will leave the European aluminum casting alloys business and will close the company's operation in Borgofranco, Italy, by the end of March of next year.

The plant currently employs 105 people.

Novelis said it had formally informed the Italian government and unions of the closure decision, as required by Italian law.

"The casting alloys business is not a core part of the Novelis strategy," said Chris Bark-Jones, president of Novelis' European unit. "We are focused on enhancing our product portfolio in high-value rolled-products markets where we enjoy technological leadership. The Borgofranco operation is not related to our rolling business and is not significantly linked to any of our other facilities."

Moreover, Bark-Jones said, "the plant operates in an environment of unfavourable economic conditions and structural overcapacity."

"The facility is disadvantaged in terms of scale, technical capability and cost base. As a result, it has become increasingly less competitive in today's marketplace. Despite the efforts made by the plant's employees, it has recorded consistent losses. All options, including a sale of the plant, have been fully evaluated, but we believe there is no feasible way of sustainably operating the plant."

Novelis expects to take a charge on its books of about $24 million US for the plant closure.

Novelis, which was spun off by Montreal-based aluminum giant Alcan in January, is the global leader in aluminum rolled products and aluminum can recycling. The Atlanta-based company has 36 operating plants in 11 countries and more than 13,000 employees. The company supplies aluminum sheet and foil to the automotive and transportation, beverage and food packaging, construction and industrial, and printing markets.

© The Canadian Press, 2005

Germany's Schroeder urges Norsk Hydro to maintain German aluminium ops - report

ForexTV.com, NY 11/03/05 09:22 am

FRANKFURT (AFX) - Germany's chancellor Gerhard Schroeder is urging Norway's Norsk Hydro ASA not to shut down its aluminium production in Germany, Financial Times Deutschland reported.

Schroeder has invited Eivind Reiten, CEO of Norsk Hydro, and the premiers of Hamburg, Lower Saxony and North Rhein-Westphalia to the chancellery tomorrow to discuss electricity prices and conditions of aluminium production in Germany, the newspaper said, citing sources among participants of the planned meeting.

Norsk Hydro is planning to close its primary aluminium plant in Stade, Germany, by the end of next year primarily due to soaring electricity prices, affecting 420 employees there.

And the smelter and carbon production of Northern German Hamburger Aluminium-Werk GmbH (HAW), in which Norsk Hydro holds a 33.33 pct stake, is set to shut down at the end of this year.

HAW employs about 450 people. maria.sheahan@afxnews.com ms/tc

Kaiser Aluminum Announces Post-Emergence Board of Directors

Business Wire (press release), CA November 04, 2005 02:00 PM US Eastern Timezone

Future directors bring experience in metals, labor, finance, economics, energy and government

FOOTHILL RANCH, Calif.--(BUSINESS WIRE)--Nov. 4, 2005--Kaiser Aluminum today announced it has selected the individuals who will serve as directors of the company after it emerges from Chapter 11 in early 2006. The new board -- which consists of labor leaders; finance, accounting and governance professionals; and leaders with experience in metals, energy, aerospace, engineering and manufacturing industries -- was selected by a committee of advisors including management and representatives of principal creditor interests in the Chapter 11 case.

Upon emergence from Chapter 11, members of the Kaiser Aluminum board will include George Becker, Carl Frankel, Teresa Hopp, Bill Murdy, Al Osborne, Georganne Proctor, Jack Quinn, Tom Van Leeuwen and Brett Wilcox. Jack Hockema, president and CEO of Kaiser Aluminum, will serve as chairman of the new board.

"This outstanding slate of leaders who will serve as our post-emergence directors represents another critical step toward building our future as a new, financially strong company with an efficient and flexible operating structure, excellent quality products and a loyal, growing customer base," said Hockema. "These men and women will offer invaluable guidance and oversight to the company as it continues to compete and grow as a world-class producer of high-quality aluminum products following emergence from Chapter 11."

"The post-emergence board will be comprised of a unique set of individuals, each with significant knowledge and experience in areas critical to the success of Kaiser Aluminum," said Lisa Beckerman, chair of the board selection committee and legal advisor to the Unsecured Creditors Committee in the Chapter 11 case. "Although they come from diverse backgrounds representing top organizations in their respective fields, these future board members share in a vision for the future of this company and its goals for growth and success."

George Becker served two terms as president of the United Steel Workers of America (USW) international and served in many other roles with the USW for over forty years. Now retired, he is currently chairman of the labor advisory committee to the U.S. Trade Representative and the Department of Labor, appointed by President Bill Clinton and reappointed by President George W. Bush. He is also a member of the U.S.-China Economic & Security Review Commission chartered by Congress to study and report on a wide range of issues. Previously, he served as an AFL-CIO vice president, chairing the AFL-CIO Executive Council's key economic policy committee. During that time, he was an executive member of the International Metalworkers Federation and chairman of the World Rubber Council of the International Federation of Chemical, Energy, Mine and General Workers' Unions. Mr. Becker also served two terms as the USWA International Vice President for Administration.

Carl B. Frankel currently serves as a union-nominated member of LTV Steel Corporation's corporate board of directors and a member of the board of directors of Us TOO, a prostate cancer support and advocacy organization. Previously, he was general counsel to the United Steel Workers of America (USWA). Prior to this tenure, he was associate general counsel to the USWA for twenty-nine years. From 1987 through 1999, he served at the staff level of the Collective Bargaining Forum, a government-sponsored tripartite committee consisting of government, union and employer representatives designed to improve labor relations in the United States. He is an elected fellow of the College of Labor and Employment Lawyers and a published author of several articles. He has also earned the Sustained Superior Performance Award from the NLRB and the Outstanding Performance Award from the NLRB. Mr. Frankel earned a Bachelor's degree and Juris Doctorate from the University of Chicago.

Teresa A. Hopp is a board member and audit committee chair for On Assignment, Inc. in Calabasas, California, where she is responsible for oversight of Sarbanes-Oxley compliance. She previously served as chief financial officer for Western Digital Corporation. Prior to joining Western Digital Corporation, Ms. Hopp served as an audit partner for Ernst & Young LLP where she managed audit department resource planning and scheduling, and served as internal education director and information systems audit and security director. She graduated summa cum laude from the California State University, Fullerton, with a Bachelor's degree in Business Administration.

William F. Murdy is chairman and chief executive officer of Comfort Systems USA. Previously, he served as interim president and chief executive officer of Club Quarters; chairman, president, and chief executive officer of Landcare USA, Inc. He has also served as president and chief executive officer of General Investment & Development (GID) in Boston, Massachusetts, and as president and managing general partner with Morgan Stanley Venture Capital, Inc. Previously, he served as senior vice president-Petroleum Operations at Pacific Resources, Inc. Mr. Murdy's current directorships also include UIL Holdings. He holds a Bachelor of Science degree in Engineering from the U.S. Military Academy, West Point, and a Master's degree in Business Administration from the Harvard Business School.

Alfred E. Osborne, Jr., Ph.D. currently holds several leadership positions and since 2002 has been senior associate dean at the University of California at Los Angeles' (UCLA) Anderson School of Management. Since 1987, he has been director, and more recently faculty director, of the Harold & Pauline Price Center for Entrepreneurial Studies. He also has served as associate professor of Global Economics and Management, and faculty director of The Head Start Johnson & Johnson Management Fellows Program. Previously, he held various administrative posts at UCLA, including terms as chairman of the Business Economics faculty and director of the MBA program. In addition, Dr. Osborne is a trustee of the WM Group of Funds and holds several corporate directorships, including Nordstrom, K2 Sports, EMAK WorldWide and FPA's Capital, Crescent and New Income Funds. He holds a Doctorate degree in Business Economics, a Master's degree in Business Administration, a Master of Arts degree in Economics and a Bachelor's degree in Electrical Engineering from Stanford University.

Georganne C. Proctor served from February 2003 to April 2005 as executive vice president of Finance for Golden West Financial Corporation, the holding company of World Savings Bank, the second largest U.S. thrift behind Washington Mutual. From 1994 through 2002, she was senior vice president, chief financial officer and a member of the board of directors for Bechtel Group, Inc.; and also served in several other financial positions with the Bechtel Group from 1982-1991. From 1991-1994, Ms. Proctor served with Walt Disney Company as director of Project & Division Finance of Walt Disney Imagineering and director of Finance & Accounting for Buena Vista Home Video, International. She holds a Master's degree in Business Administration from the California State University, Hayward, and a Bachelor's degree in Business Administration from the University of South Dakota.

Former United States Representative Jack Quinn (R-NY) became president of Cassidy & Associates after serving in Congress for twelve years. Mr. Quinn assists clients to promote policy and appropriations objectives in Washington, D.C. with a focus on transportation, aviation, railroad, highway, infrastructure, corporate and industry clients. Recently, he was elected to trustee of the AFL-CIO Housing Investment Trust. While in Congress, Mr. Quinn was chairman of the Transportation and Infrastructure Subcommittee on Railroads. He was also a senior member of the Transportation Subcommittees on Aviation and Highways and Mass Transit. In addition, he was chairman of the Executive Committee in the Congressional Steel Caucus. Prior to his election to Congress, Congressman Quinn served as supervisor of the town of Hamburg, New York. He received a Bachelor's degree from Siena College in Loudonville, New York, and a Master's degree from the State University of New York, Buffalo. He received honorary Doctorate of Law degrees from Medaille College and Siena College. He is also a certified school district superintendent through the New York State Education Department.

Thomas M. Van Leeuwen, CFA, has served as a director in the equity research departments for both Credit Suisse First Boston and Deutsche Bank Securities, two of the world's leading international financial service providers. Prior to that, Mr. Van Leeuwen was first vice president of equity research with Lehman Brothers. He held the position of research analyst with Sanford C. Bernstein & Co., Inc., and systems analyst with The Procter & Gamble Company. He holds a Master's degree in Business Administration from the Harvard Business School and a Bachelor of Science degree in Operations Research and Industrial Engineering from Cornell University.

Brett Wilcox is a consultant or board member to a number of metals and energy companies. He previously was chief executive officer of Golden Northwest Aluminum, Inc., and manager of Northwest Energy Development, LLC. He also served as executive director of Direct Service Industries, Inc., a trade association of large aluminum and other energy-intensive companies, and as an attorney with Preston, Ellis and Gates in Seattle, Washington. He was vice chairman of the Oregon Progress Board and a member of the governors' comprehensive review of the Northwest Regional Power System. He has also served on the Oregon governor's task forces on the structure and efficiency of state government, employee benefits and compensation, and government performance and accountability. Mr. Wilcox received a Bachelor's degree from the Woodrow Wilson School of Public and International Affairs at Princeton University and a Juris Doctorate from Stanford Law School.

Contacts For Kaiser Aluminum Debra Hotaling, 213-489-8211

CVRD Announces Capacity Expansions in Bauxite and Alumina

Finanzen.net, Germany 05.11.2005 01:07:00

RIO DE JANEIRO, Brazil, November 5 /PRNewswire/ -- Companhia Vale do Rio Doce (NYSE: RIO) (CVRD) informs that its Board of Directors has approved the investment for the development of phase II of the Paragominas bauxite mine and stages 6 and 7 of its alumina refinery (Alunorte), both located in the state of Pará, Brazil.

The construction of stages 6 and 7 of CVRD refinery, each with an annual production capacity of 935,000 tons of alumina, will result in an increase of the Alunorte production capacity to 6.26 million tons per year (Mtpy). Alunorte will then consolidate its position as the largest and most modern alumina refinery in the world.

The total estimated investment in the project is US$ 846 million, implying a very competitive capex per additional ton of capacity, despite the surge in equipment prices and the strong appreciation of the Brazilian Real against the US Dollar. The start up of stages 6 and 7 is expected for the second quarter of 2008.

Currently, the alumina refinery is developing stages 4 and 5, which will increase of its production capacity to 4.4 Mtpy from 2.5 Mtpy. The start up of stages 4 and 5 is scheduled for the first quarter of 2006, and the ramp-up conclusion is expected for the third quarter of 2006.

The total estimated investment in the development of phase II of the Paragominas bauxite mine is US$ 196.1 million. The project will allow Paragominas to achieve a capacity to produce 9.9 Mtpy. Phase II is scheduled to come onstream in the second quarter of 2008.

Paragominas phase I - production capacity of 5.4 Mtpy - is being developed simultaneously with the construction of a 244 km pipeline to transport the bauxite from the mine to the alumina refinery in Barcarena, in the state of Para. This pipeline, the first in the world to transport bauxite , is designed for a nominal capacity of 14.4 Mtpy, which will be achieved at Paragominas phase III. Paragominas phase I is scheduled to start up in the first quarter of 2007.

Both projects are in line with CVRD strategic focus on the upstream of the aluminum production chain, due to its significant competitive advantages supported by its high quality bauxite reserves and a modern and low cost alumina refinery.

Web site: http://www.cvrd.com.br

Germany Fails to Halt Norsk Hydro's Smelter Closures (Update1)

Nov. 4 (Bloomberg)

The German government said it failed to halt the closure of two aluminum smelters owned by Norsk Hydro ASA, after talks in Berlin between Chief Executive Officer Eivind Reiten and officials. The plants employ 850 people.

``Hydro didn't budge from its plan,'' to close smelters in Hamburg and Stade in the state of Lower Saxony, said Andrea Weinert, a spokeswoman for Economics Minister Wolfgang Clement. ``The talks focused particularly on energy costs in Germany.''

Weinert said Hydro, the world's fourth-biggest aluminum- maker, reiterated its commitment to keep open a plant in Neuss that employs 5,000. Talks will take place in December between Reiten and the state government in North-Rhine Westphalia to cut that plant's energy costs, she said.

Hydro has said it may close all its German units unless the government cuts ecological charges on electricity and utilities agree to more favorable supply contracts. Wholesale power prices in Germany have risen 24 percent in the past year, according to Global Insight Inc.

Christian Democrat Juergen Ruettgers, prime minister of NRW state, will seek to mediate on Hydro's attempt to cut its electricity bill at Neuss, said Michael Peter Steffen, a Cologne- based spokesman for Hydro, in a telephone interview. The plant draws its energy supplies under contract from utility RWE AG.

Energy Burden

Government officials ``are aware of the necessity of cutting Germany's aluminum industry's energy burden,'' said Steffen.

German metal makers have asked the government to halt trading in carbon-emission allowances, which they say has caused power prices to surge, the Die Welt newspaper reported today, citing the head of the non-ferrous metal producers' association.

Trading in certificates allowing power plants to emit carbon dioxide has increased electricity prices this year, Martin Kneer, head of the WVM metal smelters' association, told the newspaper.

Hydro will keep open an aluminum forge in Hamburg- Finkenwerder, saving about 550 jobs in the region, Steffen said.

Oslo-based Hydro said on Oct. 21 that it ended talks to sell the Hamburger Aluminium-Werk GmbH plant to Georgsmarienhutte Holding GmbH. The 135,000 metric-ton-a-year smelter, which employs 450 people, will shut by the end of the year, Hydro said.

The Norwegian company's Stade plant employs 430 and will be closed by the end of 2006, said Steffen, in a telephone interview said.

To contact the reporter on this story:

Brian Parkin in Berlin at at bparkin@bloomberg.net

Aleris to Close California Rolling Mill

Recycling Today, OH Friday, November 4, 2005

Aleris International Inc., headquartered in Beachwood, Ohio, has announced that it has concluded an evaluation of potentially redundant manufacturing facilities related to the recently completed ALSCO acquisition and will be permanently closing and dismantling its Carson, Calif., rolling mill and coil coating facility. Production will be phased out during the first quarter of 2006 and the site will be closed shortly thereafter.

"Process limitations at this facility and a related unfavorable cost structure have led us to conclude that continued operation of Carson is not justified," John Wasz, president of Aleris Rolled Products, says. "We will serve our West Coast customers from our other production facilities. In addition, this decision will allow us to capture a substantial portion of the $12 million of synergies on an annualized basis, announced with the ALSCO acquisition," Wasz says.

Aleris has approximately 163 employees at the Carson facility, which supplies semi-fabricated aluminum coil and painted coil for building and construction, consumer durables and electrical applications. Aleris estimates the closure will result in restructuring charges related to asset impairments, employee termination benefits and other costs ranging from $23 million to $25 million in the fourth quarter of 2005 and $3 million to $5 million in 2006.

Aleris International is a major North American manufacturer of rolled aluminum products and a global leader in aluminum recycling and the production of specification alloys. The company also manufactures value-added zinc products, including zinc oxide, zinc dust and zinc metal. Aleris operates

33 production facilities in the United States, Brazil, Germany, Mexico and Wales. It employs approximately 4,000.

What's good for the goose...

Trinidad & Tobago Express, Trinidad and Tobago Sunday, November 6th 2005

Mark Meredith Â

The area of Union Industrial Estate being prepared earlier this year for what turned out to be ALUTRINT's 125,000-tonne aluminum smelter site.

Aluminum is the goose, and the silvery eggs Government hopes it will lay may be good for some, but for others maybe not. Will the giant omelette being prepared in southwest Trinidad by Alcoa Inc, the National Energy Company (NEC), and Sural of Venezuela be an indigestible experience for the communities arranged around the table of development?

You can find out this Wednesday when plans for the smaller of the two proposed aluminum smelters are presented at a public consultation hosted by ALUTRINT Ltd at the La Brea Community Centre from 5.30 p.m. to 8 p.m. A second consultation is set for Monday, November 14 at the same venue.

ALUTRINT is the joint venture company formed by NEC and Sural to develop an "Aluminum Complex" at Union Industrial Estate.

It includes a smelter capable of producing 125,000 tonnes of aluminum per year - Alcoa's Chatham smelter would be 341,000 tonnes. The Government's equity ownership in the Union venture is 60 per cent and Sural's 40 per cent.

Sural, which manufacture aluminum rods, wire and cables, will lend its expertise to the Government's bid to establish a downstream aluminum industry in this country. The Union aluminum complex, which comes with a rod mill and wire/cable plant, would occupy 100 hectares of the industrial estate and be situated in close proximity to thousands in the communities of Sobo and Vessigny. ALUTRINT hopes to see its "1st metal in the 4th quarter of 2007".

In advance of the consultation, ALUTRINT has produced and advertised a "Non-Technical Summary of an Environmental Impact Assessment" (EIA). In the summary, ALUTRINT admits errors have been made regarding the development.

"There is some resentment among the residents of the communities surrounding Union Estate regarding the establishment of a gas-based heavy industrial complex in their neighbourhood," it observes.

"This came about because of the manner in which a rural community was transformed into an industrial site and the lack of proper consultation at the start of and throughout the transformation exercise," it acknowledge of the sudden, wholesale destruction of hundreds of acres of verdant forest, abundant wildlife, and a way of life for generations.

ALUTRINT realises that "the communities are skeptical of any industrial development on the Union Estate and this extends to the ALUTRINT project".

People are also "skeptical of any benefits to be derived from the 'industrialisation' of their community". ALUTRINT concedes that "the management of community issues are never simple and requires the establishment of open lines of communication between the industrial stakeholder and residential neighbour."

As such, ALUTRINT say it will promote public awareness, education and "community right to know".

It states that the "major positive impact of the project" will be the creation of jobs in an area of high unemployment - 800 persons during the operational phase of the project which, they say, will last 40 years.

It is claimed that 1,500 indirect jobs will be created as a "result of this type of project".

 The aluminum smelter is based on "proven modern technology", they say, assuring that emissions from the complex will comply with World Health Organisation and US Environmental Protection Agency (EPA) standards, as well as our own draft pollution rules. They are confident that emissions of "nitrogen oxides, sulphur oxides, carbon monoxide, carbon dioxide, hydrogen fluoride, polycyclic aromatic hydrocarbons, alumina dust and other particulate matter" will all fall within these standards due to their "air emission handling systems".

Hazardous solid waste from the complex will include "dross", the residue from the oxidisation of alumina, spent pot linings, and sludge from wastewater. All hazardous wastes will remain on site "until such time as they require removal". Some wastes will go to "secure purpose-built hazardous waste facilities on Union Industrial Estate or at the Forres Park Sanitary Landfill".

Spent pot linings - carbon impregnated with fluorides and alumina - are the most toxic wastes derived from an aluminum smelter.

The smelter pot room will contain 156 pots in two groups of 78 pots. When spent, "options" for their disposal "include crushing and fixation in cement followed by burial of the cement blocks in a secure lined cell".

But whether this burial site for pot liners is at oversubscribed Forres Park is unclear from the summary.

You have an opportunity of getting some clarification on the pot liner issue on Wednesday.

You may want to ask, as it isn't mentioned, about the smelter reportedly being of "Chinese" design and what the track record of such a smelter is like.

Those with a global view may want to know how the smelter will impact our obligations towards arresting climate change. Smelter pot rooms produce PFCs that come with global warming potentials 6,500 to 9,200 times higher than carbon dioxide. They can remain in the atmosphere for over 50,000 years. You may be concerned, too, about the location of such a plant in close proximity to communities; the effect of emissions of fluorides and sulphur dioxide not captured by handling systems, and the wind direction in the area - whether ALUTRINT's environmental management plan will be up to the task.

Alcan says aluminium price sustainable

Reuters South Africa, South Africa - Sat Nov 5, 2005 9:44 AM GMT

By Nick Trevethan

LONDON (Reuters) - Aluminium prices, which soared to a 10-year peak on Friday, are sustainable and could go higher, a senior official at world No.2 producer Alcan Inc. said.

"At today's currency values and energy costs this is a sustainable price," Richard Evans, Alcan's Chief Operating Officer told Reuters in an interview.

London Metal Exchange aluminium contracts for delivery in three months touched $2,040 a tonne on Friday, supported by speculative buying.

"In terms of how high it would have to go before it becomes unsustainable, you have to look at aluminium in comparison with other competing materials, particularly steel and resins," Evans said in a telephone conversation from Canada.

"Aluminium has lagged (competing materials) over the last three to five years and that would argue that from today's prices there is room for further appreciation just to get back to that earlier competitive position."

However, Evans declined to quantify how much higher prices could go.

COST CURVE

He said a basic shift in the cost curve, a change in the business climate for Chinese smelters and cuts in European capacity were the driving fundamental factors.

"If you look at what has happened to the cost curve over the last three years it has shifted upwards by $200-300 a tonne."

"The main reasons are currencies -- the weaker dollar, energy costs and other raw materials costs -- coke and pitch," he said.

Evans said this changed the risk profile for smelters which moved the price floor up.

"This is because much of the new capacity that has been added in the last few years is in China and has low capital cost but high variable operating costs.

"Most of the Chinese capacity is in the upper quartile of the cost curve and much of it losing money already at today's prices," he said.

That made Chinese producers far more sensitive to high input prices and more likely to idle capacity than a producer with a relatively low variable operating cost basis.

He said the changing business climate in China could also support world aluminium prices.

"Over the last three years the conventional view was that China was building capacity at an uncontrolled rate and that would continue and the country would be a major and increasing exporter."

"But...when these smelters were envisioned alumina prices were very low, they had readily available soft loans, low power prices and very simulative trade incentives/

"Every one of these factors has reversed."

Evans said Chinese capacity growth and primary metal exports were slowing but semi-fabricated exports were rising.

He expected semis production and primary metal production to come into balance.

"For the last 18 months or so we have said that we expect the market in China to come into balance but it would not be a surprise to us if it over-corrected for a couple of years," he said.

European producers were labouring under rising costs which was resulting in cutbacks, Evans said.

Alcan has said it is closing the Lannemezan smelter in France next year and is in talks to sell the Steg smelter in Switzerland. The company is also seeking a solution for its Vlissingen smelter in the Netherlands which is buying power on the spot market.

Norsk Hydro is also closing capacity in Europe citing soaring energy prices.

© Reuters 2005. All Rights Reserved.

Rio Tinto expects China demand to underpin planned aluminum expansion

Forbes - 11.06.2005, 07:28 PM

SYDNEY (AFX) - Rio Tinto is planning to lift production capacity of aluminum by up to 600,000 metric tons a year on expectations that demand from China will continue to underpin the global aluminum market.

Rio Tinto chief executive of the aluminum products group, Oscar Groeneveld, told an annual investor seminar in London the group is considering building new greenfield plants in the Middle East or Asia -- possibly in Malaysia.

'We're actively seeking greenfield opportunities for our smelting business,' Groeneveld said, according to the company's website.

The location of the greenfield sites will depend on the price of electricity, he said.

In the nine months ended September, Rio Tinto produced 618,100 tons of aluminum metal with production hitting record levels in the third quarter.

Groeneveld told the briefing China's self-sufficiency in aluminum could end within two to three years, based on industry forecasts that China's annual consumption will rise to 10 mln tons by 2010 from six mln tons in 2004.

'We think there's going to be a good market in China for aluminum and over the middle term they will become importers of the metal compared to the last couple of years when they've exported quite a lot,' he said.

He said China's dependency on alumina and bauxite imports is already increasing.

Groeneveld said rising power costs, particularly in Europe, are affecting the viability of smelters with about one mln tons of productive capacity at risk worldwide.

He said Rio Tinto is also considering expanding the world's biggest alumina refinery, the Queensland Alumina refinery (QAL) at Gladstone in Australia.

Rio Tinto subsidiary Comalco owns 38.6 pct of QAL, Alcan Inc owns 41.4 pct and Rusal owns 20 pct after acquiring its stake from US group Kaiser Aluminum last year.

An expansion of one mln tons a year is being considered for the refinery which currently has a capacity of 3.8 mln tons.

Groeneveld said Comalco is also planning a further expansion of its own alumina plant at Gladstone which began production in April.

He said the 1.4 mln tons a year plant's capacity could be lifted by 200,000-300,000 tons annually because of high world demand for alumina.

Groeneveld said China is also underpinning demand for alumina and is expected to account for about half of annual global demand growth which is forecast at 4.5 pct a year over the next four years.

In the first nine months of 2005, Rio Tinto's alumina production jumped 42 pct to 2.2 mln tons when compared with the first nine months of 2004.

Comalco recently completed a 150 mln aud expansion of its Weipa bauxite operations in northern Australia, which supply the Gladstone refineries, boosting annual capacity to 16.5 mln tons.

Groeneveld said Comalco believes it can quickly further expand output at Weipa to 20 mln tons annually.

Meanwhile, Rio Tinto chief executive of iron ore, Sam Walsh, told the briefing the group expects continuing strong steel demand in China to underpin growth in iron ore markets.

He quoted estimates from industry consultants AME that China's demand for iron ore will double to 420 mln ton a year by 2010 from 208 mln tons in 2004.

'Even after this recent rapid increase in per capita steel demand in China, we believe there's good evidence that the growth will continue,' Walsh said.

The investor seminar is being repeated in Sydney today.

(1 usd 1.36 aud)

Rio to expand alumina output

Brisbane Courier Mail, Australia 07nov05

By John Lehmann and Nigel Wilson

RIO Tinto is considering expansion of the world's biggest alumina refinery, the Queensland Alumina operation at Gladstone.

But it has rejected expansion of its adjacent Boyne Island aluminium smelter - Australia's largest, which produced 541,000 tonnes last year - in favour of greenfields plants either in the Middle East or Asia, possibly Malaysia.

The group's head of aluminium, Oscar Groeneveld, told a weekend investor briefing in London that Rio was planning to lift production capacity of aluminium metal by up to 600,000 tonnes a year on expectations China would lead a surge in global demand.

The location of the greenfields sites would depend on the price of electricity, almost certainly ruling out significant expansion of brownfields smelting operations in Australia and New Zealand.

Rio Tinto subsidiary Comalco, which owns 38.6 per cent of QAL, has been under pressure from the federal and Queensland governments to join its partners Alcan (41.4 per cent) and Rusal (20 per cent) in a 1 million tonnes a year expansion that would provide a foundation market for the $3.5 million PNG Gas project. QAL's current rated capacity is 3.8 million tonnes.

Mr Groeneveld said expansion was on the cards following the decision of the US group Kaiser Aluminium to sell its QAL stake to Rusal last year to avert bankruptcy.

Comalco is bringing the capacity of its own $1.5 billion alumina plant at Gladstone, which began production in April, to 1.4 million tonnes a year. Mr Groeneveld suggested this could be lifted by a further 200,000 to 300,000 tonnes annually because of the high world demand for alumina.

Comalco recently completed a $150 million expansion of its Weipa bauxite operations, lifting annual capacity to 16.5 million tonnes, and is building a second shiploader to be operating by the end of next year.

Mr Groeneveld told analysts China's self-sufficiency in aluminium could end within two to three years, referring to industry forecasts that annual consumption would balloon from 6 million tonnes in 2004 to 10 million tonnes in 2010.

"We think there's going to be a good market in China for aluminium and over the middle term they will become importers of the metal compared to the last couple of years when they've exported quite a lot," he said.

"The alumina and bauxite dependency is already very strong for imports and we see that increasing."

Mr Groeneveld said rising power costs, particularly in Europe, were affecting smelters' viability, with 1 million tonnes of productive capacity at risk worldwide.

At the London briefing, Rio Tinto iron ore division head Sam Walsh offered an olive branch to Chinese steel mills in negotiations for new iron ore contracts that come into force from April 1. Last year China criticised the aggressive stance of the Pilbara iron producers which secured a 71 per cent increase in prices to about $US40 a tonne, warning there could be repercussions for future contracts.

Mr Walsh quoted estimates from industry consultant AME which showed China's demand for iron ore would double to 420 million tonnes a year by 2010.

Despite the bullish outlook on China, Rio chief executive Leigh Clifford warned higher fuel costs and shortages of machinery, skilled labour and particularly tyres for giant trucks could constrain global mining production.

"It's quite conceivable that a lack of availability of off-road tyres will constrain the global industry's ability to expand production and meet demand next year," he said.

Ormet to close Ohio plant, lay off 600

Fort Worth Star Telegram, TX , Associated Press, Mon, Nov. 07, 2005

WHEELING, W.Va. - Aluminum maker Ormet Corp. said Monday it will close its Ohio rolling mill late next year and lay off 600 workers.

The plant will close at the end of 2006. The Wheeling-based company has been using salaried employees since more than 1,200 members of the United Steelworkers went on strike last November at the plant and another operation in Hannibal, about 115 miles southeast of Columbus.

Ormet said Aleris International Inc. will buy some assets at the Hannibal rolling mill site as well as operating facilities at the Bens Run Division in Friendly, W.Va., and Specialty Blanks in Terre Haute, Ind. for $133 million.

The Bens Run Division, which employs 35 people, recycles aluminum scrap into molten metal. Specialty Blanks employs 80 people and makes precursors to lighting fixtures.

"Our plan is to continue to run those businesses in the places they are as is, with the current employees," said Mike Friday, chief financial officer for Aleris. The company, based in the Cleveland suburb of Beachwood, employs 4,000 people worldwide and makes common alloy aluminum sheet used in building and construction applications.

Union officials will meet soon to consider their options, said Denny Longwell, a staff representative for United Steelworkers of America District 1.

In April, Ormet emerged from 14 months operating under Chapter 11 bankruptcy protection. As part of its reorganization plan, the company was cleared to break labor contracts and reorganize its debt.

Ormet has about 2,200 employees and operations in Ohio, West Virginia, Indiana and Louisiana.

ON THE NET Ormet: http://www.ormet.com

Norwegians invest in Brazilian alumina

Webindia123, India November 08, 2005

Barcarena, Brazil

A key partner in Brazil's huge Alunorte alumina plant will pay $288 million toward a $846 million upgrade and expansion that will make it the world's largest.

Norsk Hydro AS, which has a 34-percent stake in the venture, said Monday the plant's expansion will hike yearly capacity by more than 40 percent to 6.5 million metric tons, making the alumina refinery the world's largest.

Brazil's Cia. Vale do Rio Doce holds a 57 percent in Alunorte, with private Japanese and Brazilian companies holding the remaining 9 percent.

Part of the expansion entails boosting the capacity of the Paragominas bauxite mine to 9.9 million metric tons per year by 2008 and construction of a 146-mile pipeline to transport the bauxite to Alunorte.

That pipeline, which will have a nominal capacity of 14.4 million metric tons per year, will be the first in the world to transport bauxite.

The expansion will be the third at Alunorte since 2000, when Norsk Hydro acquired an interest in the refinery.

Norsk Hydro's share of the enlarged facility's production will be 2.2 million metric tons per year and be used at its Qatar aluminum project.

Inpex produces 330,000 barrels of oil per day and is expected to produce 370,000 barrels per day once the merger is completed.

CVRD clears US$1bn alumina, bauxite expansion plan - Brazil

BNamericas, Chile Monday, November 7, 2005 12:22 (GMT -0400)

The board of Brazilian iron ore miner CVRD (NYSE: RIO) has approved a US$1.04bn investment plan to boost bauxite and alumina output capacity, the company said in a statement.

Investment includes the construction of stages 6-7 at CVRD's Alunorte alumina refinery and phase 2 of the Paragominas bauxite mine, both in Pará state. "Both projects are in line with CVRD strategic focus on the upstream of the aluminum production chain," reads the CVRD statement.

The US$846mn estimated investment for Alunorte aims to boost its annual production capacity to 6.3Mt, consolidating its position as the world's largest alumina refinery. Project startup is due in second quarter 2008.

Currently the alumina refinery is developing stages 4-5, which will increase its production capacity from 2.5Mt/y to 4.4Mt/y. The operational startup is scheduled for 1Q06 with the ramp-up phase due to wrap up by 3Q06.

CVRD owns 57% of Alunorte while Norsk Hydro (NYSE: NHY) owns 34% and private Japanese and Brazilian companies hold the balance.

BAUXITE EXPANSION

In addition, CVRD approved plans to invest an estimated US$196mn in phase 2 of the Paragominas bauxite mine. The expansion would increase production capacity to 9.9Mt/y by 2Q08.

Paragominas' phase 1 project, which will create production capacity of 5.4 Mt/y, is underway and due to start operations in 1Q07.

Phase 1 development is advancing alongside construction of a 244km pipeline to move bauxite from the deposit to the alumina refinery in Barcarena. The bauxite pipeline, the world's first, is designed for capacity of 14.4Mt/y to meet needs of a future phase 3 mine expansion.

BNamericas.com

Invensys Selected for Process Automation at Chinese Alumina Plant

33Metalproducing 08 November, 2005

New Luoyang Xiangjiang Wanji Aluminum Ltd. boasts 400,000 TPY

Invensys Process Systems' I/A Series digital automation was selected for the new Luoyang Xiangjiang Wanji Aluminum Ltd. alumina plant in the Henan province of China. The hardware integration services for the 400,000 tons/year bauxite refining facility will use Bayer process technology to make alumina.

The automation systems will use the I/A Series redundant control processors at seven control nodes serving plant-wide processes for raw material processing, solvent extraction, settling, separation, product filtration, evaporation, and baking.

The control nodes are interconnected with a redundant network built around the control and dispatching center, equipped with 15 sets of operator workstations and seven sets of engineering and operational workstations. This centralization will provide real-time data and full graphics of the plant's automation network.

Luoyang Xiangjiang Wanji Aluminum Ltd. was recently formed through the merger of Luoyang Wanji Aluminum and the Shenzhen Xiangjiang Group. This new alumina refining plant is part of a Chinese government initiative to increase the domestically-produced supply of alumina through consolidation and construction of larger, more efficient processing plants.

SNC-Lavalin gets contract for $330M aluminum smelter expansion in Dubai

CBC News, Canada 11:14:21 EST Nov 9, 2005

MONTREAL (CP) - Engineering giant SNC-Lavalin Inc. has won a new contract to work on a planned $330-million expansion of an aluminum smelter in Dubai.

The Montreal company said Wednesday it will provide engineering, procurement and construction management services to the Dubai Aluminum Co. on the Jebel Ali aluminum smelter project, which has an overall capital cost of $330 million.

The company did not say how much money the contract is worth.

The expansion is expected to increase the smelter's capacity by more than 100,000 tonnes of liquid aluminum a year.

"We have been working with Dubal on this site since 2004 and we see it as a vote of confidence that we have been selected to carry out another contract at this state-of-the-art smelter complex," said Pierre Ranger, vice-president of SNC-Lavalin.

Dubai Aluminum said the company is expanding capacity of the Jebel Ali smelter to meet increased demand from customers in the United States, the Far East, the Middle East, Europe and Mediterranean.

SNC-Lavalin (TSX:SNC) is one of the biggest engineering and construction companies in the world and a global leader in the ownership and management of infrastructure.

© The Canadian Press, 2005

Kaiser Aluminum wins another Airbus contract

kgw.com (subscription), OR 11/10/2005

By NICHOLAS K. GERANIOS / Associated Press

Kaiser Aluminum Corp. has signed another long-term agreement with Airbus to supply heavy aluminum plate for aircraft production, Kaiser said Wednesday.

The multi-year deal will significantly increase the amount of fabricated products produced at Kaiser's Trentwood mill in the Spokane Valley.

"Kaiser Aluminum has been a major supplier of high-quality aluminum sheet and light gauge plate to Airbus for years and this agreement further strengthens the long-term relationship between the two companies," said Jack A. Hockema, president and CEO of Kaiser Aluminum, in a press release.

The Trentwood plant was originally built during World War II to provide aluminum for warplanes built by Boeing, Airbus' main competitor. Trentwood continues to supply aluminum to Boeing, whose commercial aircraft factories are in the Seattle area.

The plant has about 600 workers, and Kaiser would not say if the new contract will expand employment. Kaiser also declined to say how much the new contract was worth.

Once battered by the decline of the aerospace industry and high electricity prices, the Trentwood plant has enjoyed a resurgence as airplane makers increase their sales.

"The aerospace manufacturing industry has been experiencing significant growth with the continued increase in air traffic compounded by retirement of aging aircraft," Hockema said.

Kaiser Aluminum recently announced a $75 million expansion of its Trentwood facility, including the addition of a state-of-the-art heavy gauge stretcher, horizontal heat treat furnaces and ultrasonic inspection system. The equipment will allow it to make aluminum plates up to 10 inches thick.

The expansion will take three years.

The heavy gauge contract is the second recent long-term contract awarded to Kaiser Aluminum by Airbus this year. In June, Airbus awarded Kaiser a six-year agreement to provide heat treat aluminum sheet and light gauge plate to its aircraft operations.

Headquartered in Toulouse, France, Airbus is jointly owned by the European Aeronautic Defense and Space Co. (80 percent) and BAE Systems (20 percent).

Kaiser Aluminum has more than 2,000 employees and 11 plants in North America.

Once the largest manufacturing employer in Spokane County, Kaiser had a lengthy labor dispute and then high electricity prices in the last five years, which landed the company in bankruptcy court.

The Trentwood mill and a smelter in nearby Mead once employed some 2,000 workers. The Mead smelter has been permanently closed.

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

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

Alcan Makes Major Investment in New Canadian Aluminum Research Lab

Azom.com - 10th November 2005

Alcan has announced that it is investing CAN$2.1 million in a share of a new university laboratory for integrated research into aluminum products and processes at the Université du Québec à Chicoutimi (UQAC). The laboratory will require a total investment of CAN$9.4 million, and other local partners are pledging their individual commitments.

"We are very proud to contribute to the creation of this laboratory, which reinforces the Saguenay–Lac-Saint-Jean region’s position as a centre of excellence in aluminum research," said Cynthia Carroll, President and Chief Executive Officer, Alcan Primary Metal Group. "The laboratory’s activities will complement those already in operation at the Arvida Research and Development Centre (ARDC) and the Aluminum Technology Centre (ATC), reinforcing the Quebec and Canadian aluminum industry’s competitive edge."

The laboratory will focus on research into activities that complement those at ARDC and ATC, namely metal/new product fabrication by forging and assembly, and bauxite processing.

"This new infrastructure and equipment at UQAC is important as it will optimize and leverage research efforts between the university and Alcan. The new laboratory will allow the Company to further enhance Bayer process efficiencies in solid liquid separation and residue disposal, which is aligned with Alcan's sustainability business model," added Jacynthe Côté, President and Chief Executive Officer, Alcan Bauxite and Alumina.

The laboratory will be completed by the fourth quarter 2006.

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

http://www.alcan.com/

Is There A Future For The Ormet Rolling Mill Property?

WTOV9.com, OH 6:35 p.m. EST November 9, 2005

WOODSFIELD, OH -- The Ormet Corporation's announcement that they're closing the rolling mill in Hannibal, Ohio, came as devastating news to many of the 600 workers who will lose their jobs, but some in Monroe County say the closing could be seen as a good thing.

Monroe County Economic Developer Lou Stein says now that Ormet is moving out, it will make a lot of room for new industry to move in, and it won't take long before the jobs return to the area.

Stein says he is preparing to enter into talks with all the rolling mill property owners to discuss leasing the land and its buildings out to numerous new industrial businesses.

Stein says he gets leads from industries looking to settle in southeast Ohio on a regular basis, but he never had any space to offer them until now.

Stein says the Ormet property is ideal with its rail, river and highway access.

"I think the potential is to not only bring back the jobs that were lost, but to create more jobs and to do it in a way that has a much more sound economic footing that is spread over may different industries and many companies," said Stein.

Stein says that a major problem in Monroe County is the fact that it's too dependent on the aluminum industry.

He says industries will also likely be drawn to Monroe County because they'll be able to utilize the skilled workforce that Ormet let go.

Jill Del Greco, NEWS9

Global Alumina releases third quarter 2005 results

PR Newswire (press release), NY Nov 9, 2005

Third Quarter Highlights:

- Significant corporate highlights include:

- President of the Republic of Guinea Lansana Conte promulgated Global Alumina's Basic Agreement to construct and develop its 2.8 million tonnes per annum alumina refinery

- Subscription agreement for an estimated $200 million was signed with Dubai Aluminium Company Limited ("DUBAL")

- Subscription agreement for $100 million was signed with Emirates International Investment Company LLC ("EIIC")

- Global Alumina closed the initial $20 million of DUBAL's subscription agreement, the first $50 million tranche of EIIC's subscription agreement and an off-take agreement with DUBAL for 40% of Global Alumina's alumina production (subsequent to the third quarter ending)

- Significant financial highlights include:

- Cash and cash equivalents of $9.3 million at September 30, 2005

- Construction-in-progress of $41.1 million at September 30, 2005

- Loss for the three and nine months ended September 30, 2005 of $3.4 million ($0.03 per share) and $10.8 million ($0.09 per share) respectively, and $8.3 million ($0.08 per share) and $15.3 million ($0.16 per share) for the same periods during 2004

- Engineering and professional fees for the three and nine months ended September 30, 2005 were $1.8 million and $6.5 million respectively, and $7.9 million and $13.7 million for the same periods during 2004

"The development of Global Alumina's 2.8 million tonne per annum refinery continues to gain momentum. Our project is being well received by potential customers as well as potential investors within the aluminium industry. We are steadily increasing levels of construction activity on site as we prepare for the full mobilization of our construction contractors while we continue to attract world-class talent to key management and staff positions," stated Bruce Wrobel, Chairman and CEO of Global Alumina. "Most importantly, Global Alumina continues to deepen our relationship with the Government of Guinea as we jointly seek to add value to Guinea's vast bauxite reserves."

The Power of Rising Energy Prices

Washington Post, United States Wednesday, November 9, 2005; Page D01

Soaring Costs Have Md. Aluminum Plant on the Brink

By Justin Blum, Washington Post Staff Writer

For 35 years, the aluminum plant surrounded by fields of soybeans and corn in Frederick County has provided high-paying, reliable jobs that lured workers from faraway states.

But now the plant's owner, Alcoa Inc., is warning the 600 employees that they could be out of their jobs for a reason well beyond their control: soaring electricity prices brought on by deregulation. The company says it can run a plant overseas for a fraction of the electricity costs at its Maryland site.

Alcoa says it may have to close its aluminum plant in Frederick County after its contract with its power supplier expires. It expects its power bill to more than double next year. (By Ricky Carioti -- The Washington Post)

The plant's closure, and the loss of jobs paying an average of $55,000 a year plus benefits, would ripple through the region's economy. Eastalco Works, as the plant is known, would become be the latest victim of a U.S. industry contracting at home while expanding overseas.

"I guess we can't compete anymore," said Howard Cline, a quality-control worker who started at the plant 31 years ago and does not know what type of work he would seek if his job vanishes. "I don't like it. I'm 50 years old. I'm not ready to retire. I guess they're going to make that choice for me."

Alcoa, one of the largest global aluminum companies, says operations at the Eastalco plant are likely to be drastically curtailed by year's end and could later be entirely shuttered.

The company's long-term power contract, which was signed years ago before electricity prices shot up, is about to expire, and Alcoa says it cannot pay the rate being offered by suppliers. The electricity costs would be far higher than what Alcoa pays at its plants in other parts of the world.

Alcoa weighs electricity and labor costs, among other factors, in deciding where to spend money on new plants. But access to cheap power is the company's biggest concern. In the last quarter, the company reported lower profit compared with the comparable period last year, in part because of higher energy costs.

The electricity industry says the reason for the higher domestic prices is straightforward: The cost of coal and natural gas, which fuel most of the country's power plants, has risen dramatically.

But Alcoa, with a 24-hour plant that uses more electricity than any other business in Maryland, sees another force at work. The company says electricity deregulation -- allowing competition among suppliers and letting the market, not regulators, determine prices -- has pushed costs higher than they otherwise would have been. That marks a dramatic shift in position for Alcoa, which years ago had championed deregulation as a way to lower prices.

At the 400-acre facility outside Frederick, a collection of drab buildings and belching smokestacks set among farms and rolling hills, workers turn a white powder into aluminum. The powder comes from Suriname and contains aluminum and oxygen atoms that are turned into aluminum in a process that consumes huge amounts of electricity. Companies that buy the aluminum later transform it into door frames, windows and car parts.

Over the years, the operation has become more automated and efficient. Workers are less visible than in earlier years in cavernous buildings dominated by the din of exhaust fans and featuring the faint smell of sulfur.

Eastalco's closing would add to an industry trend of declining U.S. production. Domestic production last year at aluminum smelting plants such as Eastalco's was about 2.5 million metric tons, down about 31 percent from 2000 production.

Similar forces are at work in Europe, where plants are closing. Production is shifting to places where power is cheaper, such as the Middle East, Russia and China.

"Over the next 10 years, over the next 15 years, I think you're going to see primary domestic smelting capacity in the U.S. wither away," said John Mothersole, a Washington-based senior economist with the consulting firm Global Insight Inc. "That's just because of the cost of electricity. . . . We don't anticipate for industrial rates you'll be able to purchase electricity at a rate that will make it competitive in a global market."

Some plants have survived in other parts of the United States because they receive power from aluminum-company-owned electric plants or from government-owned facilities that provide cheaper power, analysts said.

The power bill at Eastalco is eye-popping. The company expects this year's electricity bill to total $89 million, a below-market rate stemming from a contract signed in the mid-1990s. Under that plan, Alcoa has been paying from the mid-$20s to the low $30s per megawatt-hour, the company said.

But once the contract with Allegheny Power expires at the end of the year, Alcoa says, it would have to pay about $70 per megawatt-hour, ringing up a bill of $195 million in 2006. The company says prices would need to be from $35 to $40 a megawatt-hour for the plant's doors to remain open.

Alcoa and many other heavy electricity users had long wanted government regulators to stop setting prices for electricity based on utility operating costs and allow market forces to determine price.

Since the mid-1990s, about 22 states and the District have decided to deregulate electricity, which is supposed to create competition and lower prices by allowing customers to buy power from providers that could be hundreds of miles away, rather than just their local power company.

"Deregulation was sold to the country as a way to eliminate any kind of fat that existed in the local utility and as a way to reduce costs," said Marc Pereira, vice president of energy for Pittsburgh-based Alcoa. "With all this competition, you're going to see lower prices. That sounded pretty good. . . . But the reality has been different."

The electric industry and some researchers say deregulation has kept prices lower than they otherwise would have been. The main reasons for sharp price increases recently, the industry says, are higher demand and fuel costs.

"Whether you have a regulated system or a market system, prices would be higher," said Ray Dotter, a spokesman for PJM Interconnection LLC of Valley Forge, Pa., which operates the wholesale electricity market in the region. "A competitive system for electricity has saved billions of dollars in cost below what it would have been in a regulated system."

Years ago, when companies chose locations to build aluminum plants, they did it to be close to the country's lowest-cost power providers. Eastalco long relied on cheap power provided by the Allegheny generating facilities that are close to cheap coal.

With deregulation, the situation changed. Regulators were out of the picture.

Now wholesale prices are being set in the marketplace managed by PJM. Retail providers look to that amount when setting their prices.

That is one reason Alcoa says deregulation has pushed up prices.

If the market were still regulated, the company said, the price it pays would be more closely related to the price of coal, the dominant fuel for Allegheny's plants. But the company said that the PJM market establishes prices that are more heavily pegged to the price of natural gas. The most expensive unit of electrical generation, the company said, is used to determine the market rate. And that price is typically for power generated with natural gas, whose costs have increased much more rapidly than coal's.

PJM says its market works on the same principles behind other successful commodities markets and encourages participants to offer the best possible price.

James Owen, a spokesman for the Edison Electric Institute, a power industry trade group in Washington, said deregulation has lowered prices overall. He said it is impossible to calculate whether the Eastalco plant would have been better off under regulation because there are too many variables, including decision-making of regulators.

Owen said that Alcoa's price expectations are unreasonable and that asking power providers to give them a steep discount is also unreasonable when the electricity can be sold in the market for far more.

"That's like asking for $1.50-a-gallon gasoline," Owen said. "That's a non-starter."

Alcoa said that it has talked to 17 providers and that all of them are quoting the same price, which the company says is far too high. The company believes deregulation took away a local power company's incentive to negotiate with a big buyer. In the past, Allegheny might have welcomed the stability of a customer who would use a huge amount of electricity around the clock. But now the power from those plants can be more easily sold to a broader market.

"It took away advantages we had," Eastalco plant manager Brian S. Dahlberg said. "It's the most lucrative model for the power company."

Allen Staggers, a spokesman for Allegheny, said that the power company wants Eastalco to succeed but that providing cut-rate power would not be fair to Allegheny shareholders or other customers.

Workers said they are not sure who is at fault. But they said the forces changing the aluminum industry have left them frustrated.

Some say they want to relocate to aluminum plants in other states if they can get work there. That would mean another move for workers such as Rod Erskin, 40, who started at Eastalco a year ago after working at a Washington state aluminum plant that was shut.

"This is a good job -- it always has been," Erskin said. "I just may have to keep moving to do it."

Aleris: No plans to run Hannibal mill

Crain's Cleveland Business, OH 2:30 pm, November 11, 2005

By DAVID BENNETT

Aleris International Inc. of Beachwood says it has no intention of continuing operations at a rolling mill where 500 United Steelworkers of America union members have been on strike for the past year.

In a prepared statement, Aleris spokesman Kim Pichanick confirmed that it will cease operations at the mill in Hannibal, Ohio, that the Beachwood-based company bought this week from aluminum producer Ormet Corp. of Wheeling, W. Va.

"We have respect for the union and their concern for their members, but we have additional capability to operate efficiently at other U.S. plants, which are predominantly union-represented, and we have no need to operate at the Hannibal facility," she said.

Ms. Pichanick wouldn’t say if Aleris, which recycles scrap metal and produces aluminum sheets, is negotiating with the union to hire on any local members at Ormet operations involved in the $133 million acquisition.

In addition to the Hannibal mill, Aleris is acquiring some assets of two other Ormet plants, including the Bens Run Division in Friendly, W.Va., and Specialty Blanks in Terre Haute, Ind.

United Steelworkers District 1 director David McCall on Wednesday issued a statement indicating that the union hopes to negotiate with Aleris to keep the Hannibal mill running.

Mr. McCall didn’t return a phone call today regarding Aleris’ response. A voice message at the USWA District 1 in Columbus said offices were closed for the Veterans Day holiday.

Port Workers in Russia’s St. Petersburg Go on Strike, Threaten Aluminium Exports

MOSNEWS, Russia 11.11.2005 11:21 MSK (GMT +3)

On Thursday, Nov. 10, crews manning tugs and other service ships in the Sea Port of St. Petersburg, Russia’s main export outlet in the northwest, began an indefinite strike, Dow Jones Newswires reported.

The strike was going ahead despite a local court ruling. The city court of St. Petersburg ruled on Monday, Nov. 7, that the proposed indefinite strike would be illegal, saying that in declaring it the labor union had not followed all the necessary legal procedures. By law, the labor union should have appealed to the arbitration authorities before declaring the strike, but the port workers went ahead with the strike without getting the necessary permission.

The tugs will not move cargo ships either inside or outside the port, and fuel tankers will not service cargo ships, virtually halting the port’s work.

The unions have already staged a series of one-hour warning strikes involving 700 employees. The seafarers are demanding a pay rise, claiming they are paid only a tenth of what their counterparts in other countries receive. The strike involves seafarers manning 40 vessels at the port, including five ice breakers and five oil tankers.

In July-September, St. Petersburg was hit by a strike by dockers. The strike at the St. Petersburg port is yet another manifest of the growing labor union movement in Russia, highlighted by the strike of Ford workers at the Vsevolzhsk plant.

One of the port’s main clients is the world’s third largest producer of aluminium Russian Aluminium (RusAl). The port workers strike is sure to threaten the schedule of RusAl’s aluminium exports to the markets, which are already experiencing shortages.

Alumina prices have hardened by 200% due to acute shortage’

Financial Express, India Sunday, November 13, 2005 at 0000 hours IST

Ashapura Minechem is in the business of mining. In 2004, Ashapura Minechem entered a 50 : 50 JV with China's Sichuan Aostar Aluminum corp, to construct a 1 mtpy Alumina Refinery in the Kutch district, in Gujarat. Chetan Shah, managing director, spoke to Jitendra Kumar Gupta about the company and its future plans. Excerpts:

What factors have contributed to the growth of the company over the last one year? Sales growth for Ashapura Minechem Ltd (AML) has moved up by 89% over the last FY year?

The sales growth of last 2 years is a result of the initiatives we have taken over the last 5 years. We have consolidated our position as market leader and a significant international player in both bauxite and bentonite business. There is no doubt that the upturn in global and commodity cycles has helped us. Apart from the growth in bulk minerals, value-added products like bleaching clay and calcined bauxite have also helped the sales growth.

Ashapura has formed a JV with Sichuan Aostar Aluminum Corp (SAAL) of China.What kind of benefits is the company looking forward from this JV?

In 2004, AML entered into a 50:50 JV with China's SAAL, to construct a 1 mtpy alumina refinery in the Kutch district, in Gujarat. SAAL is a subsidiary of Sichuan Electric Power Corporation, which generates and distributes 23000 MW of power, with assets base over $9 billion. They won and operate an Aluminium smelter with a capacity of 3,00,000 tonnes under expansion to 5,00,000 tonnes. Their annual requirement of Alumina is likely to be million tonnes. The project is structure with a 75% buy-back of the end product by them. AML, as one of the chief promoters of this project, is ideally placed to reap the benefits as the prices of Alumina in the international market is expected to rule every firm in the near future and the demand from China would continue to rule every firm over the next few years. The project is estimated to generate revenues to the tune of $250 million.

Full story at http://www.financialexpress.com/fe_full_story.php?content_id108468

Chinese takeaway

Trinidad & Tobago Express, Trinidad and Tobago Sunday, November 13th 2005

Mark Meredith

Like everyone else in the community of Square Deal Corner in La Brea, the resident of this modest, lovingly maintained home and garden will have to leave to make way for ALUTRINT's aluminium smelter, soon to rise from the earth of Union Estate beyond.

"The state of pollution in Nanching is bad. The sky is brown. When you come from a country (New Zealand) that literally sparkles and the sky is so many shades of blue, and are then presented with a landscape of grey and brown and a head heavy from fumes and goodness knows what else, you kinda wonder: how do you live like that?" wrote New Zealand TV One's Katie Wolfe while visiting China recently.

If she comes to Trinidad's south west peninsula in ten years' time, she may well ask the same question. It is a Nanching aluminium smelter that ALUTRINT wish to import to Union Estate. It will sit with a power plant, three urea ammonium nitrate plants (UAN) and, possibly, a purpose-built hazardous waste facility for spent pot liners. It won't be far from Alcoa's mega smelter, and steel smelter/s, or an assortment of petrochemical processing plants straddling giant industrial estates from Point Lisas to the tip of Cedros, even reclaiming the sea for such a purpose at Oropouche; a Nanching by the Caribbean sea.

At ALUTRINT's first public consultation in La Brea's community centre on Wednesday night, the audience was shown slides of a Chinese takeaway in Nanching. The Union smelter will be a "carbon copy" of the Nanching model, said ALUTRINT's Project Development Manager, Phillip Julien, son of the Prime Minister's energy guru Ken Julien. He said that the Chinese were "truly proud of the design" and that the smelter would be built for a "very good price".

In a surreal moment, photos of the Nanching smelter were projected onto the community centre's mural of lush Trinidadian countryside: smelter pot rooms floating upon a green tropical wetland.

We were told by Julien that the Chinese were "proud of the superiority of their smelter and, to demonstrate that, they've created many green areas within the smelter itself". The slide was of a large industrial complex dominated by an emissions stack soaring out of shot. Small shrubby trees, like conifers, were arranged neatly on an area of grass within the grounds of the ten-year-old plant. "This is interesting," he said of a large housing complex we heard was "just on the outskirts" of the smelter. It too was sprinkled with baby conifers.

"China has proven, and we've done a lot of homework on this, that their design meets international environmental standards while maintaining its efficiency," claimed Julien of the smelter sitting under Nanching's poisoned skies.

He told us China had "tripled aluminium production in the last nine years" and now possessed 136 smelters, more than any other country; 17 per cent of the world smelter market. Its 19 per cent economic growth in the same time period had "forced China to develop a wealth of talent and experience in designing and building aluminium smelters".

But this growth has also forced China to take stock, something we may want to copy too. In 2004, the Chinese People's Daily reported a central government circular ordering that projects conflicting with "land use management" and involving "over-investment and low-level repeated construction with consumption of huge energy, water, materials and great pollution should be firmly stopped". No new projects of "steel, aluminium and cement would be approved this year", the circular decreed.

During the Q&A session at the consultation, I asked Julien if we could get a copy of the emissions data from the Nanching smelter; a track record. He thought that might be possible, only problem was it would be in Mandarin. He could get it translated, he offered.

The Chinese aluminium smelter company responsible for the takeaway delivery to Union Estate is called the China National Machinery & Equipment Import & Export Corporation (CMEC). The translation from Mandarin on its website (www.cmec.com) says CMEC specialises in "joint venture and cooperative businesses" and deals "principally in contracting international engineering projects, exporting complete plants and equipment, importing and exporting mechanical and electrical products and engaging in external economic and technical cooperation. Its turnover in 2004 reached US$1.7 billion".

In fact, the corporation seems to do just about everything. But there is no mention anywhere of Nanching, aluminium, smelters, or examples of such plants in China or any of the "120 countries and regions" CMEC has "business relationships" with around the world.

ALUTRINT's Phillip Julien emphasised the size (125,000 metric tonnes) of the Union smelter. "It's smaller, a more compact size, rather than the typical large, mega smelters built by the large multinational companies."

Who could he be referring to? Looking at the ALUTRINT brochure with a cover featuring a tiny green shoot poking through the earth, and the tag line: "An Aluminium Complex that's the right fit for T&T!", I wondered if their proposed neighbours, Alcoa, had a copy.

Explaining that ALUTRINT was "breaking the barrier" by building a smelter purely to serve downstream requirements - the rod mill and wire/cable plant - and that Chinese technology "was the only one that supports such a small smelter", he wanted to emphasise something.

"We have to vie for customers and one thing prospective customers look for is the environmental track record." What ALUTRINT are doing is "of a much higher standard than if we were simply making metal and putting it on the international market" he said.

Wednesday's consultation highlighted the Environmental Impact Assessment (EIA) study which is being directed by Dr Ahmed Khan of local company, Rapid Environmental Assessments Ltd (REAL). When asked, Khan told me he had not written an EIA for an aluminium smelter before, which was why he had brought in experienced personnel from the US and UK to assist.

Much of what was presented was featured in the Non-Technical Summary highlighted in last week's Sunday Express. However, we learned that the emissions stack would start at 60 metres, but the final height would depend on modelling exercises. When questioned, we learned the smelter would capture 99 per cent of emissions, and that the company would carry out medical sampling of the community throughout the life cycle of the plant.

We learned that hazardous waste, like spent pot liners and "dross", remains a problem. Ahmed Khan told us the most "viable option" was encasement of waste in cement and insertion into a cell in a "purpose-built" landfill.

We learned Phillip Julien wasn't really happy with the landfill option. Nor was an interested Solid Waste Management Co Ltd employee at the consultation who had worked out that the aluminium complex would produce five million kilogrammes of waste from pots and dross during its lifespan. He was surprised "that such a modern smelter plant" had no purpose-built waste unit.

We learned that waste storage will have to take place at Union Estate for the first few years, with the possibility that any purpose-built waste unit might have to be permanently located there.

We also learned something Alcoa - whose smelter at 341,000 tonnes would be more than twice the size of ALUTRINT's - are apparently unaware of. Having said earlier this year they "didn't yet know" how they would dispose of their pot liners, Alcoa have since thrown up the idea of shipping the stuff somewhere else.

Sorry guys. According to Dr Khan, this country is a signatory to the Basle Convention which prohibits the transshipment of hazardous waste.

We learned that our contributions to climate change through greenhouse gas emissions from the smelters and other heavy energy-based industries would be countered by carbon sequestration, or reforestation, led by National Energy Company's (NEC) Dr Reeza Mohammed.

We learned from Dr Khan that the NEC has a "master plan for the industrialisation of the south west peninsula". And we learned again, in case we had forgotten, the human trauma such a process entails.

Driving over the red earth of the ever-evolving Martian landscape of Union Estate six months after my last tour, I found not much had changed. Rather than swirling dust clouds bothering residents, they were now being plagued by mosquitoes breeding in the rain-filled craters of the red planet next door.

A leaden atmosphere of depression, inevitability and loss seems to hang over the area, like a Nanching sky. At Union Village the residents have nearly settled on their relocation area and compensation package with NEC. The 100-year-old community is making way for two giant UAN plants.

The other community being moved is at Square Deal Corner. They are making way for ALUTRINT, but their relocation issues have not been settled to their satisfaction - far from it. The accommodation on offer from NEC makes them angry.

I drove down their terrible road/track, past proud little homes and patios, painted mailboxes, vegetable gardens, flowers and shrubs, the tiny shop, and children playing basketball against a backdrop of gouged red cliffs and shorn forest walls.

"Our life is in limbo. What will become of us?" asked an angry spokesman of the ironically named Square Deal community at the consultation. "We want to know. We want to get on with our lives," he said in exasperation at having to avoid his neighbours because he wasn't able to tell them what would become of them.

A moment that encapsulates the reality of industrial development Trinidad-style came when an elderly, blind woman from Square Deal was led to the microphone. Her voice was loud, quivering with emotion, booming from the speakers.

"I'm a grandmother, with 14 children and grandchildren. I build my home 38 years ago! You want me to move to a tool shed! No garden! I am not moving to a tool shed! If you want me to move put me in a proper house. And you want to give me $15,000 for my home!", she wailed, addressing the ALUTRINT panel, head and sightless eyes focused in another direction.

(The second ALUTRINT consultation, where questions raised in the first consultation will be answered, takes place tomorrow evening at La Brea Community Centre from 5.30 p.m. to 8.30 p.m.)

Striking aluminum employees unsure where to work next

Associated Press 14 Nov 2005

HANNIBAL, Ohio - Employees on strike against an aluminum mill say they have lost cars and homes since they stopped working, and they are trying to figure out how they'll earn money now that the plant is scheduled to close at the end of the year.

So far, the people who worked for Ormet Corp. haven't been eligible for unemployment benefits, and finding a new job would be tough in an area with one of highest unemployment rates in Ohio.

Ormet, recovering from bankruptcy, announced last week that it is closing its mill that rolls aluminum into sheets, laying off 500 hourly workers and 100 salaried employees.

About 1,200 members of the United Steelworkers went on strike last November at the mill and a second Ormet plant in Hannibal, about 115 miles southeast of Columbus.

Ormet, based in Wheeling, W.Va., said it plans to continue operating a reduction plant that turns ore into aluminum for processing, but striking workers are worried about its future, too.

"I imagine we'll all be in this situation," said Mike Judge, a reduction plant worker.

Judge said his wife cries every day about the worsening economy in the area.

"She can't believe this. None of us can," he said. "Nobody knows what we are going to do."

Many coal and manufacturing companies that used to populate the Appalachian region have left or aren't hiring. Workers at the PPG Natrium chemical-processing plant, in New Martinsville, W.Va., across the Ohio River from Hannibal, are also on strike.

"Where are we going to go?" said Don King, who works at the reduction plant. "People have already lost their cars, their homes."

The news of the plant's closing is a blow for Monroe County, which had the state's fourth-highest county unemployment rate in September at 8.3 percent.

U.S. Rep. Ted Strickland, a Democrat from Lisbon whose district includes the plant, wrote a letter to the state unemployment benefits officials on Friday, asking them to reconsider their earlier ruling denying benefits to rolling mill workers now that the plant is closing.

Strickland, who is running for governor next year, said the mill's employees have no jobs to return to through no fault of their own.

The unemployment office will review the request when it receives the letter, Dennis Evans, a spokesman for Ohio Department of Job and Family Services, said Monday.

Ormet sold some assets of the plant to Beachwood-based Aleris International Inc.

Aleris has 18 months to clear the equipment from the facility and it could be two years before a new company can move in, said Tracey Craig, director of the Monroe County Chamber of Commerce.

The closing has local officials worried about tax revenues. Ormet is the largest employer in the county, which has about 15,000 residents.

"It's going to hurt our county government. It's going to hurt our school system," Craig said. "They were already under tight budgets to begin with, let alone when this sale goes through."

Ormet announced in April that it had emerged from bankruptcy, about 14 months after it filed for Chapter 11 protection.

The company has not met with the union in weeks and there are no negotiations scheduled, said Linda Regelman, a spokeswoman for Ormet.

After the workers went on strike, groups of protesters were arrested twice, and sheriff's deputies said some had knives, baseball bats and other weapons. Union officials disputed the charges, saying some of them may have had pocket knives or axes for chopping wood for fires but were not brandishing weapons.

Including the workers to be laid off, Ormet has about 2,200 employees and operations in Ohio, West Virginia, Indiana and Louisiana.

Kaiser Aluminum Delivers Strong Improvement in Third Quarter 2005 Earnings

Business Wire (press release), CA November 14, 2005 04:19 PM US Eastern Timezone

FOOTHILL RANCH, Calif.

Third Quarter Highlights

-- Total operating income for continued operations increases to $15.0 million

-- Fabricated products operating income of $24.5 million doubles results from Q3 2004

-- Fabricated products operating income reached $62.7 million for the first nine months, an almost threefold increase over the same period in 2004

Kaiser Aluminum today reported significantly improved third quarter earnings. Operating income for the third quarter of 2005 was $15.0 million. In 2004, a $160.5 million operating loss occurred in the third quarter and included a $155.0 million charge related to pension plans assumed by the Pension Benefit Guaranty Corporation as part of the company's Chapter 11 reorganization. The current year result reflects significant improvement in the fabricated products business segment, where operating income of $24.5 million was approximately double the level of the prior year period. Improved earnings from continuing operations of the primary aluminum segment and lower ongoing corporate general and administrative expense from the restructuring of ongoing retiree obligations also contributed to the improved 2005 results.

For the first nine months of 2005, operating income was $32.0 million. A $175.2 million operating loss occurred for the first nine months of 2004. The year-over-year change reflects significant improvement in business performance as well as the large third quarter 2004 pension charge noted above. Fabricated products operating income reached $62.7 million for the first nine months of 2005, an almost threefold increase over the same period in 2004. Year-to-date 2005 earnings from continuing operations of the primary aluminum segment also were improved, while corporate general and administrative expense was lower primarily for the reasons discussed above.

Year-over-year changes in income or loss from continuing operations, both for the third quarter and first nine months, primarily reflect the operating income improvements described previously. For the third quarter of 2005, income from continuing operations was $3.9 million contrasted with a $173.2 million loss in the third quarter of 2004. For the first nine months, a current year loss from continuing operations of $5.0 million compares with a $210.6 million prior year loss.

In addition to the comparisons previously described, several significant items related to actions taken by the company during its Chapter 11 reorganization also affect the net income comparisons. Such items are reported as results from discontinued operations and are described below. Third quarter 2005 net income was $11.9 million. By comparison, the third quarter 2004 net loss was $69.5 million and included a $101.6 million net gain from the sale of the company's interest in and related to Aluminum Partners of Jamaica (Alpart). For the first nine months of 2005, net income of $381.9 million includes a $365.6 million net gain from the second quarter sale of the company's interest in Queensland Alumina Limited. For 2004, the nine-month $109.3 net loss benefited from a second quarter sale of the Mead, Wash. smelter facility for a $23.4 million net gain as well as the Alpart sale.

"We are very pleased with this quarter's results, especially with the continued improvement achieved in our fabricated products business," said Jack A. Hockema, president and CEO. "For the second time this year, the initial time occurring in the first quarter, fabricated products earnings have reached levels not seen since the 1998-2000 time frame. We are seeing the benefits of staying focused on improving the operations and market position of our core business, while at the same time executing a difficult and lengthy restructuring process for Kaiser."

Net sales for third quarter 2005 grew to $272 million, an 11 percent increase from 2004, and for the first nine months grew to $816 million, a 19 percent increase from the same period last year.

"Although most of our volume growth this year occurred in the first quarter, we have continued to see the benefit from higher pricing, especially for conversion prices which represent the increment customers pay for value added in fabricated products over underlying metal cost," Hockema said. He added, "We're also experiencing a notable product mix improvement due to strong aerospace demand and very favorable market conditions in heat treat plate products. In view of the strong foundation we have built from our exemplary service to the heat treat plate market segment, we are taking steps to capitalize on our position by making a major investment in this business."

Kaiser Aluminum last week announced a $75 million expansion of the Trentwood facility, located near Spokane, Washington. The expansion will increase the company's capacity for producing sheet and plate products and add the capability to manufacture heavy gauge stretched heat treat plate in thicknesses of up to 8-10 inches.

On September 8, 2005, the U.S. Bankruptcy Court for the District of Delaware approved the company's Disclosure Statement related to its Second Amended Plan of Reorganization (POR). Solicitation of the votes of creditors is underway and is scheduled to be completed in mid-November. The court has scheduled a POR confirmation hearing for January 9, 2006 and January 10, 2006. Assuming POR confirmation, including U.S. District Court affirmation, at or near that time, it is possible the company could emerge from Chapter 11 during the first quarter of 2006.

Alcoa Modernizing Hungarian Operations

Recycling Today, OH 11/14/2005

Alcoa announced a $83 million investment in a major modernization project at its Alcoa-Kofem Ltd., operations in Hungary. The modernization includes the expansion of flat-rolled mill products capability and related infrastructure, addition of Dura-Bright aluminum wheel production in Hungary, and launching a new manufacturing operation for airfoil castings. Alcoa expects the project to be completed by the end of 2007.

The core of the investment is the modernization of Alcoa-Kofem's Flat Rolled Products manufacturing unit, which involves expansion of its brazing sheet capability to offer a full range of gauges. Brazing sheet is used primarily in the automotive and heat exchanger markets. Kofem currently produces sheet, coil and some brazing sheet at Szekesfehervar.

In addition, Alcoa-Kofem, which has been producing forged aluminum wheels since 1997, will begin production of Dura-Bright aluminum wheels in Hungary.

Finally, the new airfoil manufacturing operation in Kofem will support Alcoa Howmet's growing jet aircraft and industrial gas turbines business in Europe.

Smelter Asia signs technology deal with Chalieco

Business Times - Malaysia, Malaysia November 15 2005

SMELTER Asia yesterday signed a cooperation framework agreement with China Aluminium International Engineering Corp Ltd (Chalieco) to secure its aluminium smelter technology for a smelter in Sarawak.

Chalieco is China’s sole aluminium smelting technology provider, Smelter Asia said in a statement.

The signing ceremony in Kuala Lumpur was witnessed by former Prime Minister Tun Dr Mahathir Mohamad and chairman of China Non-ferrous Metal Industry Association, Kang Yi.

Smelter Asia will head a consortium of Malaysian companies to jointly develop an aluminium smelter in Sarawak.

Smelter Asia is wholly-owned by GIIG Holdings, a company controlled by Tan Sri Syed Mokhtar Al-Bukhary and one of Dubai’s best known corporate face, Mohamad Ali Alabbar.

Specialising in non-ferrous metallurgy for aluminum and magnesium, Chalieco is a unit of Aluminium Corp of China, the majority shareholder of China’s biggest alumina and aluminium producer, Aluminium Corp of China Ltd.

Smelter Asia said the agreement was for Chalieco to provide high amperage pre-baked pot technology, undertake technology transfer and provide the necessary support in engineering, software, technical services, proprietary equipment, and manpower training and development.

"This partnership is a good move. Smelter Asia wins on both counts," said a Hong Kong-based commodities analyst. — Bernama

Alcan Highlights Oman, Middle East Gulf as an Important Sustainable Growth Platform for Aluminum

Finanzen.net, Germany 15.11.2005 11:07:00

SOHAR, Oman, November 15 /PRNewswire/ -- Speaking at the Middle East Economic Digest (MEED) Conference today, Alcan Inc.'s (NYSE: AL, TSX: AL) Senior Vice President and President and Chief Executive Officer, Alcan Primary Metal Group, Cynthia Carroll, said that the Company is well positioned for sustainable business growth in the Middle East Gulf region. Ms. Carroll identified Alcan's participation in the proposed Sohar aluminum smelter project, located in the Sultanate of Oman, and the adoption of the its leading edge aluminum smelting technology package and engineering solutions by others in the region as critical examples.

"The Sohar aluminum smelter project is an important example of how the Middle East Gulf region is strategically turning the challenges of the aluminum industry into sustainable business opportunities," said Ms. Carroll. "Alcan's global, full-economic cost leadership, operational know-how and management expertise, and presence in Oman, are an excellent platform from which to build an unsurpassed partnership and business development opportunities in the region," she added.

In February, Alcan signed a Shareholders' Agreement for the development of the proposed 350 kt/year smelter project. This project is the first time that proven AP35 Technology will be used in a new smelter. A second potline of similar capacity is planned to be established in the future. The smelter will provide a major economic boost to the Al Battinah Region of Oman.

"Alcan's proven smelting technology package is the best available in terms of full economic cost, environmental impact, and sustainability for smelter expansion. Aluminum remains the material of choice in an ever widening range of product applications, due to its cost effectiveness and sound environmental record," said Ms. Carroll.

In her remarks to the conference, Carroll outlined three key challenges facing the aluminum industry which the Middle East Gulf region is well suited to address: energy costs, raw material availability, and achieving a sustainable business model that addresses environmental regulations and social expectations.

"These issues are not necessarily new, but taken together they are increasingly challenging and are among the points that Alcan is focusing on as it strives for value maximisation," said Ms. Carroll later on in the day to a group of local and international senior executives meeting to further discuss opportunities in Oman and the Middle East Gulf region. "At Alcan, we view globalisation as an engine for promoting diversity, helping generate new markets, and stimulating innovation and technology transfer. The Middle East Gulf region and particularly Oman are showing signs of progress that address these realities, and that is why we are here," she concluded.

Ms. Carroll's speech as well as the presentation will be made available on the Company's website at www.alcan.com.

RusAl Seeks To Up QAL Alumina Refinery Output To 5M Tons

Yahoo! News Thursday November 17, 6:25 PM

LONDON (Dow Jones)--World no. 3 aluminum producer Russian Aluminium (RAL.YY) seeks to increase alumina output capacity to 5 million metric tons from the current 3.85 million tons at its part-owned Queensland Alumina Ltd. refinery in Australia, a RusAl spokeswoman said Thursday.

RusAl bought a 20% stake in QAL in 2005, with Alcan South Pacific Ltd. (AL) owning 41.4% and Comalco Aluminium Ltd. 38.6%.

"Queensland has great potential for development of RusAl's alumina interests as we pursue our strategic goal of securing raw materials for our aluminium smelters and seeking opportunities to expand metal production," Director of International and Special Projects, Dr Alexander Livshitz said.

RusAl is currently discussing an upgrade of the refinery with its other shareholders, RusAl spokeswoman Vera Kurochkina said.

RusAl seeks to become the world's top aluminium producer within the next 10 years.

A key factor for upgrading QAL will be the successful completion of the Papua New Guinea gas pipeline which will enable construction of a co-generation power plant at the refinery, RusAl said in an earlier statement.

"The partners are actively considering this project, plus an enhancement of the bauxite residue facility, which together represent an investment of over $200 million," the statement said.

Alcan Highlights Oman Middle East Gulf as an Important Sustainable Growth Platform for Aluminium

Azom.com 18th November 2005

Speaking at the Middle East Economic Digest (MEED) Conference this week, Alcan Inc.’s Senior Vice President and President and Chief Executive Officer, Alcan Primary Metal Group, Cynthia Carroll, said that the Company is well positioned for sustainable business growth in the Middle East Gulf region. Ms. Carroll identified Alcan’s participation in the proposed Sohar aluminum smelter project, located in the Sultanate of Oman, and the adoption of the its leading edge aluminum smelting technology package and engineering solutions by others in the region as critical examples.

"The Sohar aluminum smelter project is an important example of how the Middle East Gulf region is strategically turning the challenges of the aluminum industry into sustainable business opportunities," said Ms. Carroll. "Alcan’s global, full-economic cost leadership, operational know-how and management expertise, and presence in Oman, are an excellent platform from which to build an unsurpassed partnership and business development opportunities in the region," she added.

In February, Alcan signed a Shareholders’ Agreement for the development of the proposed 350 kt/year smelter project. This project is the first time that proven AP35 Technology will be used in a new smelter. A second potline of similar capacity is planned to be established in the future. The smelter will provide a major economic boost to the Al Battinah Region of Oman.

"Alcan’s proven smelting technology package is the best available in terms of full economic cost, environmental impact, and sustainability for smelter expansion. Aluminum remains the material of choice in an ever widening range of product applications, due to its cost effectiveness and sound environmental record," said Ms. Carroll.

In her remarks to the conference, Carroll outlined three key challenges facing the aluminum industry which the Middle East Gulf region is well suited to address: energy costs, raw material availability, and achieving a sustainable business model that addresses environmental regulations and social expectations.

"These issues are not necessarily new, but taken together they are increasingly challenging and are among the points that Alcan is focusing on as it strives for value maximization," said Ms. Carroll later on in the day to a group of local and international senior executives meeting to further discuss opportunities in Oman and the Middle East Gulf region. "At Alcan, we view globalization as an engine for promoting diversity, helping generate new markets, and stimulating innovation and technology transfer. The Middle East Gulf region and particularly Oman are showing signs of progress that address these realities, and that is why we are here," she concluded.

http://www.alcan.com/

Company sees big benefits in smelter revamp

ABC Online, Australia Monday, November 21, 2005. 11:19am (AEDT)

Hydro Aluminium says a $135 million upgrade of its Kurri Kurri smelter, west of Newcastle, will ensure the long-term viability of the operation.

After almost five years, the company has completed upgrades to all three potlines as well as the demolition and construction of a new anode baking furnace.

Chief executive Trevor Coombe says the work has significantly reduced energy consumption and greenhouse gas emissions, while output has increased by 10 per cent.

"There's a societal benefit because there's less impacts going into the environment but there is actually an obvious benefit for the company as well which provides us with an opportunity to be viable for a longer period of time which is the bottom line for us," he said.

Alcoa and you

Trinidad & Tobago Express, Trinidad and Tobago - Sunday, November 20th 2005

Mark Meredith

Alcoa's 341,000 tonne Cap-de-Ville aluminium smelter will consume four to six per cent of Trinidad's total natural gas reserves, which Alcoa believes to be between 26-32 trillion cubic feet, over the 30 years or more it expects the plant to operate.

The power needed for smelting, 570 megawatts, will be almost half of the current national grid, and it will be "sponsoring" a plant to deliver that power, with Government agreeing "in principle" to building and paying for a port.

It knows "what it will not do with hazardous waste", like spent pot linings, but not exactly what it will do with it. The twin pot rooms of the smelter will be a kilometre in length and produce waste "eight years from today". It expects "to break ground" on the project in 12 months, with construction taking two years.

The smelter site will occupy 1,500 acres of forested land, the rest will form the "park" in which the smelter sits.

"Science" informs Alcoa that the smelter will pose no threat to human and environmental health. It doesn't "expect" it to have any "negative direct impact on the ability to fish in the Gulf of Paria", and it has a "goal of having no negative impact on groundwater or rivers".

Alcoa "hopes to talk to as many people in Chatham/Cap-de-Ville/Cedros as possible", once those people "are willing to listen and talk to us".

The information is not from a public consultation (that will come during the EIA process), as Alcoa has told me it is not ready to put its plans "in the papers" until it has reached "directly all the people who have expressed an interest in meeting us".Some weeks ago, Alcoa made a presentation to the Council of Presidents of the Environment (COPE), an umbrella organisation representing 14 of this country's environmental NGOs. I was invited to attend by one NGO member, and then uninvited a few hours later. This week Alcoa held another presentation.

The advertisement that arrived among the Tuesday morning e-mails was marked "For Urgent Attention" of T&T Chamber of Commerce members and was headlined: " 'WHY TRINIDAD?' ALCOA & YOU, The Smelter in the Park Concept & the Cap-de-Ville site, ALCOA'S DEVELOPMENT PLAN".

Why indeed? I invited myself along to the presentation that night by Alcoa's president, Primary Metals Development, Randy Overbey, in Westmoorings. Overbey delivered a flawlessly smooth, feel-good presentation on Alcoa's plans for Trinidad.

Alcoa's "first attraction (to Trinidad), quite honestly, is energy. Natural gas," said Overbey. "I admire the direction Government is taking. Let's take a slice of this gas and conduct it back into the development of an industry like this." consume 4-6 per cent of our. Having been told Alcoa

would total natural gas reserves, I asked him something I expected the business community to have asked: what will Alcoa pay for our gas? Overbey was "unable to share" that information. Everybody laughed, but I missed the joke.

Logistically, the smelter works well for Alcoa too, said Overbey, explaining our proximity to its operations in Brazil, Suriname, Jamaica, and being near the United States. It would be an "exciting economic driver for the region".

He said Alcoa knew what "they would not do" with toxic spent pot linings (SPL), and that to put them in a landfill-a solution ALUTRINT have indicated is their most "viable option" for the Union Estate smelter. Overbey alluded to this:

"We heard a description, something along the lines, which is not what we have in mind, that you could somehow put the SPL into a cement block and then put that cement block into a landfill. This is not what we have in mind, so don't confuse the two," he repeated.

Alcoa's likely option is recycling it: crushing the SPL and adding it to cement kiln fuel (it has a high carbon content). The high temperature "destroys" the cyanides and "the fluorides are tied-up and you never see them again. That's what the science says". Then, "we can put in about one to one and a half per cent of the total of Portland cement mix. It can go in at that rate". It makes good cement, said Overbey.

It would like to recycle it here, as shipping the waste might require permits and produce problems. It has been talking with a local cement company.

"I've read that trees will die. That's not the case," said Overbey of the forest not being cleared for the smelter. "We've read a lot about public health concerns regarding the smelter, like impacts will be rampant, miscarriages will be rampant, extremely outdated concerns about cancer.

 "I'd first appeal to your basic logic and say that if any of these were true we wouldn't be allowed to operate a single smelter anywhere in the world."

He said that Dr Oyebode Taiwo, of Yale University Medical School-"who advises Alcoa on health impacts"-would be here shortly to "interface" with our medical community and concerned citizens. "I've read that he's hired to say what Alcoa want him to say, and he would be offended by that. It would call into question the integrity of Yale Medical School. . . the claims are inflammatory, not based on science or fact. He'll show you the medical evidence behind what we say."

They were "excited" about Chatham's "smelter in a park", and showed us examples of other smelters in the park in Australia, and in Brazil where they hope to take Cedros citizens on a fact finding tour. The smelter in a Chatham park will have two-thirds of its 1,500 acres set aside for conservation, education and agricultural initiatives, said Overbey. "Even the possibility of hunting. We understand hunting is important to some of our future neighbours."

He emphasised the 1,500 jobs the smelter would require for its construction; the 750-850 permanent jobs required to run it; that they "would like nothing better than a very high percentage of employees coming from the local community...three years from today we need 800 people trained and ready to work in the facility...our positions will be open to everybody based on their skills, training and education".

Alcoa, as you would expect from a US company with an income of over US$21.5 billion in 2003, are rather good at presentation, selling the product; it's slick and polished like aluminium; non-stick, too.

There were a number of Alcoa brochures on the table in the foyer. Two caught my eye. "It all starts with dirt" was a fold-out poster which explains how Alcoa makes aluminium and the versatility of the product. The cover cartoon depicts the process in four steps: a pile of dirt (bauxite) becoming a pile of alumina becoming a shiny ingot becoming a finished, soaring jetliner.

Unfold the poster and you'll find the sunny, happy land of Planet Alcoa. Here, "Alcoans" toil cheerfully, mining, refining, smelting, fabricating, producing the magical metal for computer parts, cars, cans, planes, poles, greenhouses-a myriad useful things, all produced, it appears, painlessly for the environment or communities where these processes take place.

A look at aluminium's other side reveals displaced indigenous peoples, evicted from ancestral forest lands flooded for dams for smelter power, or cleared for the strip mining of tropical forests for bauxite.

Back in 1964, Alcoa's Suriname Aluminium Company (SURALCO) built the Afobakka Dam, creating a 650 square mile reservoir that drowned seven Maroon villages, displacing about 6,000 people. The Maroons were reportedly paid US$3 in compensation each.

It also inspired a wildlife rescue effort by International Society for the Protection of Animals: "Operation Gwamba: the Story of Rescuing 10,000 Animals from certain death in a South American Rain Forest".

Two hours from Paramaribo, says a recent issue of Conde Naste Traveller, "acres of rusting metal-the hulk of an aluminum plant that Alcoa had abandoned in 1998-squatted in the forest like a lost city...To house refugees (from the flooding), the government erected a shantytown called Brownsweg at the foot of the Afobakka dam. At midday we rode a cloud of dust into Brownsweg, an unpaved slum of cramped huts..."

At Alcoa's presentation, not a word was spoken of the relocation issues facing, what is said to be, 100 Cedros families, or what will happen to the area when the gas fizzles out. Previously, Overbey has told me relocation was the government's responsibility.

In 2003, Alcoa and BHP Billiton signed an agreement with the Suriname government to expand their bauxite and exploitation rights for the country. The area of Bakhuys is believed to hold between 200 and 700 million tonnes of bauxite, and mining will affect up to four indigenous peoples, say advocacy groups.

A July 2005 report by Amazon Conservation Team said the two extraction giants also want to build a hydroelectric dam that, critics say, will flood the lands of the Wanapan, Section, Washabo and Apura peoples. It will force the Trior from their homes.

The Amazon Alliance reports that "Suriname does not recognise collective land rights nor does it accept traditional or tribal institutions as legal persons, therefore making it impossible for them to hold land rights".

In Brazil, at the smelter in the park at Sao Luis Island that Alcoa wish to take Chatham residents to as an example of progressive industrialisation, the Earth Island Institute says that 20,000 people were evicted to make way for the expansion of aluminium facilities there. To power the smelter, a dam was built that flooded 938 square miles, "including six towns and two Indian reserves", reports the 1996 book Greenwash.

The other document at Alcoa's presentation was also expensive, and very nicely produced: Alcoa's "Sustainability Initiative" for its Karahnjukar smelting/power project in Iceland. Alcoa's Iceland project was featured in the Express of March 27th & 28th It's significance to us is that our smelter and theirs are the only new ones Alcoa are to build in 20 years, and both will utilise the same "state of the art" technology.

There were only a couple of copies of the 97-page document. The cover features a computer-generated graphic of the 57 sq km Halslon reservoir that has inundated the fragile Icelandic highlands of Karahnjukar. A study of the document revealed 34 indicators of sustainability of the project, including the impacts of the dam, diverted rivers, power lines and the smelter, as well as the economic and social impacts.

The majority of impacts are environmental, such as: "Emissions from the smelter will have a direct effect on the air quality of East Iceland...Fluoride emitted from the Fjardaal smelter could accumulate in vegetation in the immediate vicinity of the smelter.

Aluminium smelting operations require wastewater discharges into Icelandic waterways that could indirectly affect aquatic fauna through changes in water chemistry (which) could be economically damaging to the region...The presence of industrial facilities creates the potential for direct contamination of local groundwater...", and biodiversity threats, erosion, and so on.

There were too many impacts listed to dwell on here, and therein lies the paradox of Alcoa's tasteful presentation of its clear admission of the dangers. The Karahnjukar document grabbed my attention because only that morning I had received an e-mail from an Icelandic friend.

It pointed me to a new World Wildlife Fund (WWF) report on the destructive effects of dams, which said, "bad dams and bad economics are alive and kicking", noting the Karahnjukar dam was rejected by Iceland's planning agency, only to be overruled by the environment ministry.

Alcoa's Karanjukar is singled out as one of the world's six most destructive dam projects, highlighted for the "excessive" environmental damage caused.

And just for one smelter.

The future takes flight at Trentwood

The Spokesman-Review Sunday, November 20th 2005

The long nightmare for Kaiser Aluminum Corp. is nearing its end. Although the company will not emerge from bankruptcy until early next year, recent announcements signal a promising future, particularly for the Trentwood rolling mill.

For starters, Kaiser plans to invest $75 million at Trentwood over the next few years. The money will buy furnaces, an ultrasound inspection system and heavy gauge stretcher, a machine that improves the flatness of aluminum plate up to 10 inches thick. The process relieves internal stress.

The reason for adding the new equipment became apparent almost immediately. Airbus, the European airplane manufacturer, will add the hefty plate to the other sheet and plate it already buys. Boeing Co. has been a long-time Trentwood customer.

And last week Kaiser disclosed the directors who will control the reorganized company, with present president and chief executive officer Jack Hockema serving as chairman. Among the future board members are George Becker, former president of the United Steelworkers of America, as well as the union's former counsel, Carl Frankel. Trusts that will benefit Kaiser retirees will hold two-thirds of the common shares of the new Kaiser.

The union also picked former U.S. Rep. Jack Quinn, R-N.Y., who is now a lobbyist, and Brett Wilcox, former chief executive officer at Golden Northwest Aluminum. Other members come with extensive corporate and academic backgrounds. Overall, the group will be a significant upgrade from the sad gang that delivered Kaiser to its creditors.

Most encouraging of all the news is Kaiser's third-quarter earnings report. This week, the company reported operating income of $15 million, with the division that includes Trentwood checking in with a $24.5 million net, bringing the nine-month total for those operations to $62.7 million. Net income for the quarter was $11.9 million. With all the adjustments made as Kaiser worked through bankruptcy, comparisons with prior periods are difficult. But income is income.

For years, Kaiser has ducked profitabilitv as if it were a summons. The company declared $3.1 billion in liabilities when it filed bankruptcy in February 2002, and debt service has been an anchor dragging Kaiser down for at least the last 20 years. After reorganization, the burden will be a feathery $50 million. Debt service will no longer be the crushing handicap that limited ongoing reinvestment in new equipment.

Unfortunately, the Mead smelter and its 1,000 jobs are history, as is Kaiser's other Northwest smelter in Tacoma. High electricity prices since 2000 have nearly wiped out that segment of the region's aluminum industry. The Mead property has been sold, its potlines scrapped out.

But roughly 600 jobs have been preserved at Trentwood, which has rolled aluminum ingots into strips, sheets and plates for the aircraft industry since World War II. More workers may be added to tend the new equipment and fill the new orders. The sprawling plant, one of the largest under roof in Washington, will remain a contributor to the coffers of local and state governments, although Olympia's take will be significantly lower.

Not only will the expenditures for Trentwood's new equipment be exempt from Washington's sales tax, the state's business and occupation levy

will be reduced considerably because Trentwood benefits from relief the Legislature gave aerospace manufacturers in 2003. Although directed at Boeing, which at the time was pondering where to assemble the 787, the lower rates also apply to Boeing suppliers. Or Airbus suppliers. Kaiser will be allowed to credit 10 percent of its property taxes against its B&O obligations.

Also, the B&O rate applicable to aerospace companies was reduced by 12 percent as of Oct. 1, and will fall 40 percent below the standard rate the day Boeing begins 787 production.

If we must have targeted tax relief in order to keep vital industries — and that's a strong if — it's nice when a Spokane company or two strays into the bull's-eye.

The rebound in the commercial airline business could not have come at a better time for Trentwood, or for other Spokane-area makers of aerospace components, for that matter. A few years ago, Kaiser managers decided to tie Trentwood's future to that of the aircraft industry. Other operations, like the production of aluminum can sheet, were discarded. Those decisions eliminated hundreds of jobs. A slowdown in aircraft orders did nothing to ease the pain.

Today, that call looks much better for Kaiser, Trentwood and Spokane. Here's to the future.

CVG-Alcasa and Brazilian Vamtec in aluminum for technology exchange deal

VHeadline.com, IL 21 Nov 2005

BNamericas.com Harvey Beltran: Venezuelan aluminum smelter Alcasa and Brazilian company Vamtec have signed a letter of intent to swap aluminum for technology upgrades and assistance.

The deal includes assessing the technical, economic and financial feasibility for the installation of industrial waste processing plants as part of a technology upgrade to be implemented at Alcasa's facilities in eastern Venezuela.

The plants will be manufactured by Vamtec ... "Vamtec will complete the respective evaluations and after that the agreement will be signed; so we expect that within two weeks they [Vamtec] will be here," an Alcasa official told BNamericas.

The Alcasa source also said this week representatives from the science and technology ministry will visit the smelter to discuss the possibility of a consultancy agreement for the technology upgrade process. "It has to do with the same issue [as Vamtec] and it's evidence that there are several companies and sectors interested in Alcasa's technology upgrade process, not only locally but from abroad," the official said.

Alcasa is considering 24 projects to be implemented for the plant's technology upgrade, for which the government has provided US$104 million. The projects are focused on operations in the carbon anode plant, reduction, industrial services, the foundry and the rolling plant. In the carbon anode plant the funds will be used to improve grinding and crushing equipment.

Alcasa is in the Matanzas industrial zone of Puerto Ordaz in Venezuela's Guayana region. State heavy industry holding company CVG controls 92% of the smelter and the remaining 8% belongs to US aluminum giant Alcoa. It has installed capacity of 210,000t/y but is expanding to 450,000t.

Century Aluminum Subsidiary Accelerates Icelandic Expansion

Market Wire (press release) 11/21/2005

MONTEREY, CA -- (MARKET WIRE) -- 11/21/2005 -- Century Aluminum Company (NASDAQ: CENX) announced today that Nordural ehf, a wholly owned subsidiary, will have sufficient electricity to accelerate the expansion of its primary aluminum capacity to 220,000 metric tonnes per year (mtpy) by mid-to-late 2006.

The Nordural plant, located near Reykjavík, currently operates at a rate of 90,000 mtpy. It was previously announced that the plant would initially expand to 212,000 mpty by mid-to-late 2006 and that power for the additional expansion to 220,000 mtpy would be available by mid-2007.

"We have been very pleased with the Nordural expansion, which has remained on schedule and budget," said Craig A. Davis, Century's chairman and chief executive officer. "Accelerating the expansion demonstrates the quality of the partnership that has developed between Century and the Icelandic power companies."

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 220,000 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 745,000 mtpy by mid-to-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.

Oleg Deripaska Officially Confirms RUSAL's Intention to Build Aluminum Plant near Karabula Station in Krasnoyarsk Krai

Financial Information Service(Registration), Russia Nov 21, 2005

KRASNOYARSK, November 21. /FIS/. President of Russky Aluminiy Oleg Deripaska officially confirmed the plans to build up an aluminum plant of the capacity of 500 thousand tons of metal near the station of Karabula in the Krasnoyarsk Krai. Currently underway is the siting of the plant. The aluminum plant will bear most expenses related to the development of social sphere and construction of housing in the settlement of Tayozhny, which is to become the base of the new enterprise.

$135 million green upgrade

Maitland Mercury, Australia -Tuesday, 22 November 2005

MICHELLE MEEHAN

A Kurri Kurri aluminium smelter has become a leaner and greener operation in a bid to remain competitive in the international market.

Hydro Aluminium announced the completion of its five-year Smelter Upgrade and Retro-Fit (SURF) program yesterday.

The $135 million project included the installation of a new scrubbing centre on the carbon plant greenmix area, the demolition and construction of a new anode baking furnace and upgrades to all three potlines.

Hydro chief executive officer Trevor Coombe said the upgrade provided wins for the business, the community and the environment, reducing the smelter's impact on the environment and improving the long-term viability of the facility for its 572 employees.

The SURF project will lead to a 80 per cent decrease in the fluoride emissions from potline one, 40 per cent less gas being used in the carbon baking furnace and a 10 per cent increase in production with no extra power needed.

Mr Coombe said although the smelter been prosecuted in the past for its emission levels, it had been running without problem for the past four or five years, with efficiency rather than environmental impacts the reason behind the upgrades.

"The output is more for the same amount of energy and coupled with the reduction in emissions that is a major reduction in our greenhouse footprint," Mr Coombe said.

"We will be far more effective, far more efficient and far more environmentally friendly (because of this upgrade)."

Mr Coombe said the SURF project was designed to ensure the smelter could remain competitive in the tough international market.

"The things we've done with SURF were to make ourselves more competitive," he said.

"We're a price taker, not a price maker because the aluminium price is declared each day in the newspapers and on the metal exchange.

"So we have to respond always to reduce our costs and make ourselves more efficient

"We're not a large smelter. We're on the bottom edge of the medium smelters and a lot of the smaller smelters are closing.

"Eventually when they all fall off the tree the next in the list is us so you've got to be smart in what you do to keep ahead of the game."

The Kurri Kurri smelter began production in 1969 under the ownership of Alcan.

Since 1995 it has changed hands three times, being bought by Capral (1995), then VAW (2000) and finally Norwegian multi-national company Norsk Hydro.

It has a production capacity of 150,000 tonnes per year.

China aluminum firms to team up for price talks next year - report

Bloomberg 11.22.2005, 08:50 PM

BEIJING (AFX) - China's 20 largest aluminum companies will team up to negotiate alumina prices next year with global suppliers such as BHP Billiton in a bid to lower production costs, the China Daily reported.

The newspaper cited Wen Xianjun, an official with the China Nonferrous Metals Association as saying the companies -- including 19 smelters which account for more than 60 pct of the nation's aluminum smelting capacity -- and China Minmetals Corp, China's largest base metals trader, will meet early next year.

'The smelters are ready to cut production if they can't get lower alumina prices,' Wen was quoted as saying.

Rising alumina prices are causing losses for 80 pct of Chinese smelters, the paper said, citing the association.

bjburo@xinhuafinance.com

BHP Says Chinese Aluminum Demand to Double by 2015 (Update4)

Nov. 23 (Bloomberg)

BHP Billiton, the world's biggest mining company, expects China's consumption of primary aluminum to more than double in the next ten years due to increased demand for the metal in construction and transportation.

China's use of the metal, excluding metal produced from scrap, is forecast to rise to 16 million metric tons by 2015, from 7 million tons this year, Melbourne-based BHP said today.

Soaring Chinese demand has helped aluminum prices rise 35 percent in the past two years to a 10-year high, raising costs for Toyota Motor Corp. and Rexam Plc, the world's largest beverage-can maker. Global demand may double by 2025, requiring BHP and rivals to add 35 million tons of production capacity, according to London-based CRU Strategies.

``Looking forward we see primary aluminum demand rising by more than 5 percent per annum between now and 2010,'' Rod Kinkead-Weekes, vice president of strategy at the company's aluminum unit, said on a teleconference with analysts and reporters. ``The main locomotive for growth is China.''

BHP Billiton shares fell 5 cents, or 0.2 percent, to A$21.62 on the Australian Stock Exchange at 1:32 p.m. in Sydney.

Aluminum for delivery in three months yesterday fell $26 to $2,039 a metric ton on the London Metal Exchange, the first decline in three days. It closed at a 10-year high of $2,065 a ton on Nov. 21.

Increased construction costs are putting pressure on project developments and keeping supply ``stretched,'' Kinkead- Weekes said. Rising electricity costs are crimping margins at some smelters and more closures are likely in the U.S. and Europe, he said.

Stockpiles

The market for alumina, the raw material used in aluminum making, is expected to remain ``tight'' next year, BHP said in a presentation lodged with the exchange. Strong Chinese demand is continuing and alumina stockpiles are declining, it said.

BHP will increase capital spending through 2010 to expand alumina and aluminum production capacity to meet rising demand, said Vince Nicoletti, chief financial officer of the aluminum and alumina business.

BHP may triple development capital spending in the year ending June 30 to about $300 million, before raising it to about $400 million the following year and to about $650 million in 2006-2007, the company said in the presentation. These investments include unapproved expansions at Worsley in Australia, Alumar in Brazil, Surinam and Mozambique.

`Double-Digit Growth'

China's total aluminum consumption, including material produced from scrap, is expected to rise to 20 million tons by 2015, Kinkead-Weekes said. Total global consumption is about 42 million tons, including 10 million tons produced from scrap, he said.

``Chinese aluminum consumption continues to show double- digit growth rates,'' BHP Billiton said in the presentation. ``Falling Chinese aluminum exports support Asian premiums.''

China's exports of the metal are slowing and it may become a net importer, said Kinkead-Weekes.

To contact the reporter on this story:

Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net.

China's Chalco wins new Guinea bauxite exploration license

Mining Weekly, South Africa 22 Nov 2005

Guinea has granted another bauxite exploration license to the Aluminum Corporation of China (Chalco), the world's second largest aluminium producer, senior officials said.

"Chalco has obtained a renewable three-year exploration licence," Cece Malomou, a senior official in the Mining Ministry, told Reuters.

Another ministry source, who asked not to be identified, said the concession was in the Fria region in the northeast of Guinea, close to the projected site of an alumina refinery being planned by Greek company 3PL Trade.

Chalco and 3PL are already partners in another exploration concession covering more than 500 square km.

"The Chinese are currently only covering 50% of their bauxite requirements and they want to find new openings to guarantee their bauxite needs," the source said.

The Fria region, some 160 km from the capital Conakry, already has an alumina refinery operated by RUSAL, the world's No. 3 primary aluminium producer which is owned by Russian tycoon Oleg Deripaska.

Guinea contains around one third of the world's proven reserves of bauxite, used to make alumina which is then refined into aluminium. The poor West African country is the world's second largest bauxite producer, after Australia.

Guinea's Compagnie des Bauxites de Guinee (CBG), based in the northwest region of Boke, produces around 14-million tons of bauxite annually and is the world's largest exporter.

Alcoa, Alcan Agree to Guinea Venture

All Associated Press NewsNEW YORK (AP) - November 22, 2005 11:56 AM ET

Aluminum producers Alcoa Inc. and Alcan Inc. have agreed with the government of Guinea to build an alumina refinery with an initial annual capacity of 1.5 million tons in that country, Alcoa said Tuesday.

Under the agreement, Alcan and Alcoa's majority owned Alcoa World Alumina would own at least 80 percent of the venture, although the Guinean government would have an option to acquire an equity stake. Alumina produced by the refinery would be sold to Alcan and Alcoa.

Pennsylvania business news in brief

Associated Press 23 Nov 2005

PITTSBURGH - Aluminum producer Alcoa Inc. on Wednesday announced plans to curb production at its majority owned Eastalco aluminum smelter in Frederick, Md., due to the high cost of powering the plant.

Alcoa said it has not been able to arrange a competitively priced power supply for the facility and, as a result, will cut production on Dec. 19 and plans to lay off up to 600 employees.

The company said the curtailment will cost $14 million before taxes, a charge to be posted in the fourth quarter.

Alcoa said 100 workers would continue to be employed as it prepares the plant for the production cuts. After production is sidelined, about 25 employees will be kept on to maintain the site. In October, the company told the 600 employees they faced possible layoffs if a power arrangement was not reached.

Komi Project Loan

The Moscow Times, Russia 23 Nov 2005

RusAl and SUAL will borrow $720 million by the end of 2008 to build an alumina mining and refining complex in the northwest Komi region, Vedomosti reported, citing project director Vladimir Kremer.

The newspaper did not say where the money would come from.

The Komi facility will cost $1.2 billion and produce as much as 1.4 million metric tons of alumina per year. RusAl and SUAL are Russia's biggest aluminum producers. (Bloomberg)

Russian Aluminium takes Tajik ploy to Queensland

Mineweb, South Africa '23-NOV-05 17:55' GMT © Mineweb 1997-2004

By: John Helmer

MOSCOW (Mineweb.com) -- Russian Aluminium (Rusal), the third largest aluminium producer in the world, has been pitching for the opportunity to buy low-priced new bauxite in the northern Australian state of Queensland, a pitch with the potential to undercut its current partners at Queensland Alumina Limited (QAL).

A senior Queensland government minister appears to be in on the scheme. Last week, in a two-day visit to Moscow, Anna Bligh, Queensland's deputy premier, and minister of finance, as well as of state development and trade, went to Rusal headquarters, where she met with Alexander Livshitz, the senior Rusal manager in charge of the company's foreign relations.

Bligh has refused to answer Mineweb's questions directly. Instead, her spokesman in Brisbane, Chris Taylor, endorsed a newspaper report, published by The Australian, in which Livshitz said Rusal is thinking of two moves -- one to joint-venture with the winner of the new mine project at Aurukun, without having to bid for the mine; and the second, to expand the QAL alumina refinery, if it can get the bauxite required from Aurukun, the new deposit the Queensland government has put up for fresh bidding. The newspaper report intimated that it had interviewed Livshitz. Its text is the same as a press release issued by Rusal on November 16.

For Bligh to endorse Rusal's idea of an opportunity is an unusual step so early in the Queensland government's review of the Aurukun bidding.

The Aurukun project is estimated to cost up to US$300 million for the mine, and up to $800 million for the accompanying refinery. QAL is already supplied with bauxite from Comalco's operations in Queensland, and Comalco, the Australian subsidiary of Rio Tinto of the UK, holds a 38.6% shareholding in QAL. Alcan holds the remainder -- a 41.4% stake.

Aurukun has thus the potential to become rival supplier to QAL. Once in operation, the pricing of Aurukun bauxite is likely to compete with the raw material currently going into the QAL refinery. If it materializes, an Aurukun alumina refinery would be a direct competitor.

Early this year, after Kaiser Aluminum was obliged by a US bankruptcy court to sell its QAL stake, Rusal paid US$401 million in cash for the asset, and agreed to accept liability for about $60 million in Kaiser debt. This deal added about 770,000 tons of alumina per year to Rusal's supply base, with what a Rusal statement describes as an option to increase this to 1 million tons per year.

The Queensland state government has revoked the 30-year old mining lease for Aurukun held by Pechiney, because the leaseholder (now Alcan) had failed to meet its pledge to build a new alumina refinery to process the bauxite. Other conditions precedent include reaching an agreement on royalties and environmental protection with the Aurukun native people, the Wik and Wik Way, who have occupied the area on Cape York, in the far north of Australia.

According to Queensland government materials, Aurukun is estimated to contain 325 million metric tons of beneficiated bauxite.

Responding to the government's call for expressions of interest, Rusal volunteered. However, the company dropped out of the running in October, before it was obliged to post the $50,000 fee to enter the formal bidding process. The target price of the project is considerably higher than Rusal has paid for acquisitions to date.

Rusal generates about $5 billion in revenues per annum, and carries at least $2 billion in debt. As a privately owned operation belonging to Oleg Deripaska, it does not provide public, audited financial reports. It currently produces about 2.7 million tons of primary aluminium per year at four Russian smelters, the bulk of which is exported. More than 3 million tons of alumina, and more than 4 million tons of bauxite are also produced, mostly in Guinea and Ukraine.

In a statement released by Rusal last week, following Livshitz's meeting with Bligh, the company "indicated its availability to discuss the possibility of a joint venture mine development and/or bauxite off-take from Aurukun as a potential future source of bauxite to supply its 20% interest in the Queensland Alumina Limited (QAL) refinery at Gladstone, in either its existing or an expanded configuration."

Although Rusal is officially no longer a bidder, its interest in a "joint venture mine development" extends towards a list of 9 contenders for Aurukun; this includes Alcan, BHP Billiton, and Chalco, the big Chinese aluminium concern, which Australians judge to be the most likely to make the top offer.

QAL, Livshitz reiterated to the Queensland official, "is a key asset for Rusal and we are treating seriously discussion of a major expansion. The [QAL expansion] project is obviously only possible if supported by all the shareholders and we have grounds to believe that our partners in QAL [Alcan and Comalco] are also disposed to pursue this opportunity."

As the minister in charge of the Aurukun project, Bligh's visit to Rusal has been downplayed by Australian Embassy officials. They noted that, in addition to Rusal, she had also met with a Russian tourist agency, a sheepskin importer, a deputy mayor of Moscow, and a round-table of other Russians and Australians active in bilateral business.

According to her office, Bligh's visit to Moscow was part of a multi-state trip that included stops in the US, the UK and Germany. She declined to say whether she has visited, or plans to visit Alcan, Rio Tinto, or Chalco at their headquarters to discuss the Aurukun bidding.

Bligh was also asked to say how she interprets current UK High Court action, in which Rusal has been accused of defrauding its partner in a proposed expansion of the Tajikistan Aluminium Plant (TadAZ), and illegally taking control of the plant. She declined to say if the UK court records bear on the qualifications for companies the Queensland government judges qualified to invest in the state's bauxite and alumina resources.

According to spokesman Taylor, Rusal "are not a bidder [for Aurukun]". But when Bligh issued her own press release, she claimed that Rusal's purchase of Kaiser's stake in QAL "is the first major investment by a Russian company in Australia and I hope it will be a sign of things to come." Livshitz told her what he has in mind.

Exactly what to expect from Rusal is being tested in the High Court in London, where testimony suggests that Rusal has made a number of promises to the Tajik government and to its initial partner at TadAZ, which have turned out badly; that is, for the partner, Avaz Nazarov, Ansol, and associated companies. They were evicted from their position at TadAZ last December, and replaced by Rusal trusties.

According to the ruling issued a month ago by Justice William Blackburne, Rusal is attempting to cover its takeover of TadAZ, and the conversion of the multi-million dollar proceeds of sale of its aluminium, by litigating against the plant's former management and trade and investment company, Ansol.

The judge did not spare Rusal criticism during court hearings in July. In the ruling issued on October 21, Blackburne wrote: "A particular feature of the evidence that has surprised and concerned me is the role of Rusal. …Rusal has now become Ansol’s rival and, as part of the pursuit of its commercial interests is promoting this litigation."

At stake in the London courtroom are no less than $200 million in claims and counter-claims, and control of the largest industrial asset of Tajikistan, the Central Asian country bordered by Afghanistan and Russia.

TadAZ produces 360,000 tons of aluminium per year, a fraction of Rusal's total output. But if Rusal can procure additional power supply to raise the TadAZ output, and at the same time position itself as the plant's principal creditor, Rusal would be able to take over the plant by privatization.

Justice Blackburne also signaled that, if Rusal cannot avoid trial on Nazarov's charges, the evidence may go against the Russian company. According to Blackburne, "there is a serious question whether… Rusal was acting in conformity with the terms of its joint venture with Ansol." After Blackburne rejected an application for leave to appeal against his October 21 verdict, Rusal and TadAZ prepared to seek an appellate court ruling. That has now been abandoned.

After Blackburne's ruling in October, Nazarov told Mineweb he is "determined to hold Rusal to account for riding roughshod over the agreements we had in place. Rusal has a poor record in this regard and does not yet appear to have cleaned up its act. The Government of Tajikistan have been fed a tissue of lies over the operation of TadAZ and we look forward to setting the record straight." Rusal responded through a spokesman: "Rusal was drawn into this case by TadAZ's opponents purely in an attempt to create a smokescreen to draw attention away from allegations of fraud against Ansol."

Between Tajikistan and Australia, there is a world of difference. But in the global aluminium industry, Rusal's tactics to establish direct control over bauxite, alumina and metal assets have been quite similar from country to country. Litigation records in the US, Switzerland, the Caribbean, and the UK confirm this, as do the out of court settlements which Rusal and its associated companies have paid.

Local politicians are a natural target for lobbying, as the current High Court action involving Tajikistan, and an earlier one involving the government of Guinea have attested. Rusal has been cultivating Australian officials for some time, and the company was a sponsor of an Australian trade promotion in Moscow in May. Two of Rusal's senior management were, until they decided to resign recently, veterans of the Australian aluminium industry.

Bligh's promotional approach to Rusal last week is presented by her spokesman, and by other Australian officials, as nothing more than an attempt to promote optimum investment benefits for the home state. And that is what Tajik government officials are currently saying about the contest for TadAZ.

At this stage, Comalco and Alcan are unwilling to comment on their partnership with Rusal at QAL, and noone is suggesting that Rusal is positioning itself against the interests of its partners. Still, what Livshitz told Bligh, and what Bligh agreed to, has the potential for generating a contest over bauxite and alumina, the likes of which Queensland has not seen before.

Alumina refinery may go begging

Brisbane Courier Mail, Australia - 24nov05

Richard Owen

THE Queensland Government backed away yesterday from public demands that the company chosen to develop the Aurukun bauxite deposit on western Cape York must build a new $3.5 billion alumina refinery somewhere in the state as well.

Premier Peter Beattie told mining industry leaders at the Queensland Resources Council's annual lunch in Brisbane to expect "some argy bargy" over Aurukun as the bidding process progressed.

This was because getting a mine would be "easy" but delivering on a refinery or aluminium smelter would be "much more difficult" due to the cost of materials, infrastructure and energy.

"What I'm worried about is getting the value adding and the processing and that's why we've allowed a non-conforming (configuration)," he said, signalling that recent site and infrastructure briefings attended by the 10 potential bidders may have reined in government expectations.

BHP digs into $1bn alumina plant

Australian, Australia November 24, 2005

Andrew Trounson

BHP Billiton is going ahead with a full feasibility study on a $900million expansion of its Worsley alumina refinery in Western Australia, with construction starting as early as October next year.

The project would add to an already hot construction market in the state that could yet delay a go- ahead for rival Alcoa's plans for a $1.5 billion expansion of its Wagerup alumina refinery.

BHP revealed yesterday preliminary plans to plough up to $US2 billion ($2.7 billion) into alumina and aluminium capacity expansion over the next four years to capitalise on tight markets caused by soaring Chinese demand.

But BHP Billiton Aluminium head of strategy Rod Kinkead-Weekes said a long-term pricing mechanism that linked alumina prices to aluminium metal prices was not providing high enough alumina prices to underwrite the necessary greenfield expansion.

"Long-term prices have to reflect the reality," Mr Kinkead-Weekes told an analysts briefing in Sydney.

BHP, along with other alumina producers, is starting to lobby customers to better link prices to the alumina market's tighter fundamentals. But while BHP aluminium chief Alex Vanselow said customers were "starting to come around", observers said the system was well entrenched. And while there could be incremental gains, it could be years before contracts were completely de-linked from metal prices.

But the upside benefit to the miners is potentially enormous. Currently, contract alumina prices are set at around 13-14 per cent of the aluminium price, which equates today to about $US270 a tonne. That compares with spot prices of well over $US500 a tonne.

Based on already slated expansion across the industry, BHP's projections point to supply deficits opening up from 2008 onwards for alumina and the aluminium metal it is smelted into.

"The locomotive for growth is China," BHP said.

It forecast China's primary aluminium metal demand would more than double to 16 million tonnes a year by 2015.

Mr Kinkead-Weekes said continued high prices would be needed to support expansion in the face of rising energy and raw material costs.

"What I'm saying is that the non-conforming sector may end up being the life-line for this project. Now I don't know that, but that could well be the case. It's a cost factor."

BHP Billiton's vice-president on aluminium strategy Rod Kinkead-Weekes, who was in Brisbane last week, told an investor briefing yesterday it planned to boost alumina and aluminium production through the lower risk option of expanding existing operations in Australia and South America.

BHP Billiton, China's Chalco, Brazil's Companhia Vale do Rio Doce, Japan's Mitsubishi, Alcoa of the US, Russia's Sual, Canada's Alcan, India's Hindalco and Norway's Hydro Aluminium have until January 30 to lodge provisional proposals for either a "preferred" or "optimal" bid configuration for Aurukun.

The State Government has made it clear a "preferred" bid should encompass a mine dedicated "wholly or substantially" to feeding a new greenfield refinery in Queensland with an output of at least 600,000 tonnes a year.

However, an "optimal" or non-conforming bid must include "at least a mine" and either a new alumina refinery with an annual output of less than 600,000 tonnes, or an "expansion of existing alumina refining and/or aluminium smelting capacity" in Queensland.

This could well favour a bid from the Aurukun lease's dispossessed former owner Alcan which has a 41.1 per cent stake in the joint venture with Comalco and Rusal running Gladstone's QAL alumina refinery and has been pushing for a $1 billion expansion.

Mr Beattie, who officially launched the Queensland Minerals and Energy Academy yesterday to foster student involvement in the sector, said he was still "desperate" to get a new alumina refinery for the state and possibly a smelter, but had to acknowledge the magnitude of the challenges involved.

Aurukun's traditional owners were "inside the tent" and part of the bid process, Mr Beattie said.

"They will negotiate the best position for them regardless of what happens," he said.

"I just wanted everybody to know, including the traditional owners, that digging a hole in the ground is easy. It's putting in the processing that's hard."

The Courier-Mail sought comment from the Cape York Land Council but calls were not returned.

BHP to put $3bn shine on aluminium

The Age (subscription), Australia November 24, 2005

By Barry Fitzgerald

BHP Billiton is to crank up investment in new capacity at its aluminium/alumina division to as much as $3 billion over the next five years as it sets out to secure its full share of the forecast supercharged growth in consumption, with China again underpinning the bullish outlook.

The big-ticket item in the planned growth of the division is a proposed $900 million expansion of the group's 86 per cent-owned Worsley alumina refinery in Western Australia from production of 3.5 million tonnes a year to 4.3 million tonnes a year.

A feasibility study into the expansion has been kicked off and is due to be completed in mid-2006. Subject to government and corporate approval, construction will start in October-November 2006 and commissioning will begin at the end of 2008.

Planning for the big expansion comes as the Worsley joint venture puts the finishing touches to a debottlenecking program that will lift capacity at Worsley from 3.25 million tonnes a year to 3.5 million tonnes a year by the first quarter of next year.

BHP's growth ambitions in the aluminium business were revealed at a business unit briefing in Sydney yesterday. The group's bullish outlook for the aluminium market and its growth ambitions line up with those that Rio Tinto outlined in its investor briefing in Sydney two weeks ago.

Global aluminium giants Alcan and Alcoa also endorsed the bullish outlook for the industry yesterday by announcing an agreement to investigate the potential for a $US1 billion-plus alumina refinery in Guinea. Alcoa's involvement will be through AWAC, the global alumina alliance 40 per cent-owned by Melbourne-based Alumina Ltd.

Despite the strong outlook on aluminium and alumina, neither BHP nor Rio shares had a good day yesterday, falling 12¢ to $21.55 and $1 to $60.70 respectively on news that copper prices had taken a hit in China and reports of another steel production cutback in Asia ahead of the start to full-blown iron ore price negotiations.

At yesterday's briefing BHP vice-president of aluminium strategy Rod Kinkead-Weekes said global aluminium consumption was forecast to grow from 32 million tonnes in 2005 to 51 million tonnes in 2015. China's consumption will lead the charge, rising from 7 million tonnes a year to an estimated 16 million tonnes a year.

China is a big aluminium producer itself but at present 2 million tonnes of annual aluminium metal production is idled because of chronic power shortages.

China plans to double its power supply base by 2010 but the question remains whether there will be enough surplus in the system for all the idled capacity to be brought back on.

Mr Kinkead-Weekes said there was a feeling that a power surplus would not occur, making it more likely China would be a net importer of metal in the future.

The reporter owns BHP Billiton shares.

BHP stays mum on India aluminium; confirms bauxite interest

Metals Place, UK 23 Nov 2005 Source: Dow Jones

Anglo-Australian miner BHP Billiton Ltd. declined to comment Tuesday on reports it may build an alumina refinery and aluminium smelter in India but confirmed its interest in bauxite mining in the country.

Indian newspaper The Economic Times reported Monday BHP Billiton and Corus Group PLC are separately seeking to develop aluminium projects in eastern India's Orissa state.

The report quoted unnamed sources as saying BHP may look for a local partner to develop an alumina refinery with an annual capacity of at least 1 million metric tons and an aluminium smelter producing 250,000 tons a year.

A spokeswoman for the Melbourne-based miner neither confirmed nor denied the story.

"These kinds of reports come out of India all the time but we won't comment on media speculation," the spokeswoman said.

She did confirm however that BHP is interested in bauxite deposits in Orissa state.

The Economic Times article also said London-based Corus is considering making value-added aluminium products in Orissa.

Last month BHP confirmed local media reports it had signed a memorandum of understanding with Japan's Mitsubishi Corp. to jointly develop an aluminium smelter in Malaysia.

The Bernama news agency reported the smelter project in Sarawak state is key to the government's development of the 2,400 megawatt Bakun hydroelectric dam given the energy-intensive smelting process.

BHP currently produces over a million metric tons a year of primary aluminium from smelters in South America, Africa and Australia.

Rusal to invest heavily in Siberian projects

RIA Novosti, Russia 13:03 | 25/ 11/ 2005

KRASNOYARSK, November 25 (RIA Novosti, Lyudmila Zabortseva) - Russian aluminum giant Rusal will be investing heavily in projects in Russia's Far East and Siberia in the coming decade, the company's deputy CEO said Friday.

Speaking at a conference on the economic development of eastern Russia, Alexander Lipschitz said Rusal would channel $600 million annually into operating and projected facilities in that part of the country.

He said Rusal's investment this year in five Siberian plants, including the KrAz smelter in Krasnoyarsk, Russia's aluminum capital, and the Achinsk alumina plant, a major supplier of the raw ingredient for aluminum, were expected to come in at $300, a 70% increase year-on-year.

Over one million metric tons of European aluminium smelting capacity is at risk of closure

Metals Place, UK 25 Nov 2005

Over one million metric tons of European aluminium smelting capacity is at risk of closure due to high energy costs, UBS analyst Robin Bhar said Thursday.

Canadian producer Alcan's 50,000 tons-a-year Lannemezan smelter in France and its 40,000-ton Steg smelter in Switzerland are among those Bhar considered " very likely" to close.

He also listed the 130,000-ton Hamburg smelter, owned by Alcoa and Norway's Norsk Hydro, as well as Anglo-Dutch Corus Group's 129,000-ton Delfzijl smelter in the Netherlands and its 90,000-ton Voerde smelter in Germany.

The threat of closure is also very likely at Norsk Hydro's 70,000-ton Elbewerke (Stade) smelter in Germany and Magyar's 35,000-ton Inota smelter in Hungary.

Swiss trader Glencore's 105,000-ton Sundsvall smelter in Sweden falls into the "likely" to close category, Bhar said. Also in this group are Norsk Hydro's 230, 000-ton Rheinwerk smelter in Germany and Alcan's 190,000-ton Vlissingen smelter in the Netherlands.

In total, Bhar estimated 1.069 million tons could close.

Producing aluminium is highly energy intensive, enough for it to be characterized by some as solid electricity.

Bhar said power typically constitutes about 25-30% of total cash production cost. This assumes that power rates approximate $20-25 a megawatt-hour, with a standard specific energy (MWh/ton) of about 15, he added.

"The problem, increasingly, for producers is that they are being squeezed out by other power consumers in regions that have become power short. To make matters worse, this is coinciding with an ongoing re-rating of energy in all forms," Bhar said.

Additionally, soaring carbon dioxide prices are putting pressure on power rates in Europe.

"High fuel prices, combined with soaring carbon dioxide prices, have sent power prices higher. Carbon prices have risen about fourfold, from six euros a ton to 23 euros a ton since the beginning the year," Bhar said. "Wholesale power prices in the more deregulated, open markets rose all along the curve to historically high levels during the recent quarter."

But Bhar believes an environment of structurally strong energy prices should result in high aluminium prices since power constitutes a large, and growing, cost component for the industry.

The migration of capacity away from areas such as Western Europe and the U.S. could result in further capacity closures, he said.

Electricity prices forces Comalco to cut production

Stuff.co.nz, New Zealand 26 November 2005

Low hydro lake levels and rising spot electricity prices have forced New Zealand Aluminium Smelters Ltd (NZAS) to reduce production at Tiwai Point by 5 per cent.

Acting general manager operations Kerry Moran said yesterday it was uneconomical for the smelter to operate at full capacity.

If lake levels remained low and demand for electricity constant, the price for spot power would continue to rise, he said.

Cells used in the aluminium smelting process would be taken out of production early next week.

With the Christmas break looming, there wouldn't be enough skilled workers to bring them back into use until mid-January at the earliest, Mr Moran said.

NZAS was also mindful of the need to conserve water in an attempt to reduce the probability of drastic action being needed next winter.

"In a tight electricity market, conservation is an important factor in ensuring the security of supply," he said.

AdvertisementAdvertisementNational Party energy spokesman Nick Smith said NZAS' decision to take 20 cells out of production would cost New Zealand $1 million a week in exports.

"These are the chickens coming home to roost on a Government that has discouraged investment in electricity.

"They killed off Project Aqua and the Dobson Hydro scheme and now we don't have the electricity to drive industry," he said.

It was significant the smelter was reducing production in summer and not during the peak loads of winter.

"This reflects just how serious New Zealand's electricity supply problem has become.

"The cut shows the Government's policies are not working.

"We must reform the Resource Management Act and provide an environment that encourages investment in new generation, " Dr Smith said.

Export of aluminium to reach 660,000 tons

People's Daily Online, China 27 Nov 2005

China's net export of aluminium is expected to reach 660,000 tons this year, but the figure will drop to 300,000 tons in 2006, the Economic Information Daily reported.

Quoting Ding Shenwei, director of the Research Department of China International Finance Corporation, the report also said China would import 500,000 tons of aluminium next year.

Statistics showed in the first eight months of this year, China imported on average 52,000 tons of aluminium each month, a drop of39 percent from 86,000 tons in the same period of 2004.

Source: Xinhua

The story of a firm partnership

Jamaica Observer, Jamaica - Nov 26, 2005

Title: Kaiser Aluminium. In partnership with Jamaica 1953-2003

Author: Lance Neita

Reviewed by: A W Sangster

This book compiled by Lance Neita, the public relations manager for Alpart, is a compilation of stories about the involvement of the Kaiser Bauxite Company in Jamaica over a 50-year period. It is the story of an American company that has made its mark in an indelible way on the country and in particular, initially in the parish of St Elizabeth and later in the parish of St Ann.

As Eugene Miller, vice-president, US and Jamaica Bauxite/Alumina Operations of the Kaiser Aluminium and Chemical Corporation, notes in the introduction, the book is not a history of Kaiser Aluminium, or of Kaiser Bauxite or Alpart or any of its subsidiaries in Jamaica. There are no financial statements or business strategies in the book.

"Rather, it is an account supported by written documents and more importantly by the personal accounts of so many of our former and current Jamaica employees who lived it and, yes, loved it!"

You might say it is a people book, for it is full of intriguing stories of individuals - both local and expatriate - who contributed skills, commitment and personalities that helped to make the company the good corporate citizen it has been, and contributed to the force that it has been in partnership with Jamaica.

That partnership has been a productive one. The company on the one hand developed a profitable business in the mining and processing of Jamaican bauxite. On the other hand there was an outstretched hand from the company to help to build Jamaica. As Neita says in a Finale - Partners in Jamaica's Progress:

"The company had come into the Essex Valley in the 1950s and had, over the years, been strong supporters of education, agriculture, health, youth development, culture, sports and community development.

Today, the Alpart/KJBC landscape is literally dotted with schools, colleges, playfields, community centres, clinics, roads, skills centres, small businesses, youth clubs, senior citizens' associations, small farmers' associations, service clubs, housing developments, that all bear the stamp of Kaiser Development Assistance."

The book of some 160 pages has 12 chapters, which, while being very people-oriented, gives interesting and important historical aspects of the development of the Kaiser operations in Jamaica. It was published in 2004 with a limited circulation. It is surprising that the book does not have an ISBN number, which is a serious omission, and the book needs wider circulation for its significant record of Kaiser's historical journey.

Chapter one charts the beginning of the relationship. The company in its early exploration liked what it saw in St Elizabeth in terms of bauxite resources. But there was a disadvantage. Other companies had come before and purchased large tracts of land so that the lands that were available to Kaiser were of 'a patchwork nature'.

That may, in the long run, have been to the company's benefit as it meant negotiation with a larger number of smaller owners and the company would have acquired the skills of dealing with the people of St Elizabeth. It also meant that people developed a great deal of loyalty for the company in its development.

One such person was James Larmond, who was one of the first drivers for the company executives. Larmond, who worked for decades with the company, later became confidante, friend and advisor to Don Tretzel and his family on Jamaican mores and customs.

The story of Don Tretzel is the story of a pioneer extraordinaire. He came to Jamaica in 1952 as the works manager at a time when the operation of the plant was just beginning.

The process at the time was simply the drying of the red bauxite ore and shipping it to the United States for processing. Shipping of the ore was a critical need and so Tretzel took on the task of constructing a railway line from the plant at New Building to the sleepy little fishing village known as Little Pedro near to Alligator Pond.

This 12-mile standard gauge line was cut through the Santa Cruz Mountains. Tretzel personally supervised the project and often took over the locomotive controls, driving it from point to point to check maintenance and operational integrity.

The raw bauxite ore was dried in kilns at the port, moisture content being reduced from 20 per cent to 15 per cent with the ore flowing more freely on conveyor belts.

Over a 20-year period, Tretzel's name became a byword in St Elizabeth as he threw himself into the numerous projects that were to reflect the involvement of Kaiser with the community.

The government recognised his contribution to community development and industry leadership with the award of the Honorary Commander of the Order of Distinction (CD), the first American and non-Jamaican to receive this honour.

This first chapter also recognises two stalwarts with over 40 years of service. They were Ken Parchment, 'Parchie' to all, administrative driver, star pace bowler, and great company employee who gave this advice to those who would follow: "Never forget where you are coming from."

Another 40-year veteran was Cliff Richards, who was the telephone operator described as an ocean of stability. Such were the men - locals and expatriates - who were the pioneers in the Kaiser Jamaica story.

As the company and its production base grew, the outreach into the community increased. Some examples:

. In agriculture. Many small farmers were helped in resettlement programmes to acquire land and to develop good farming practice. The company also developed a dairy farm which was stocked with local cattle breeds. Initially the company had some 10,000 acres leased to 800 farmers. Various orchard crops were established as well as cattle and goat-rearing projects. An agricultural training centre was also established.

. In education. One fine example is St Elizabeth Technical High School in Santa Cruz. The company provided the land and helped the first principal Edmund Roper to start the school, even lending tents to hold some classes until permanent buildings were constructed.

The company also helped in the early days of the College of Arts, Science and Technology (now the University of Technology) with the provision of a specialist engineering area known as the Kaiser Laboratory.

. In sports. Sports played an important role in employee development and the company sponsored teams in cricket, football, and netball which competed within the parish as well as in inter-bauxite competitions

. In the Environment. The mining and processing of bauxite and later alumina generate waste products, dust and caustic residues. Increasingly the bauxite companies were forced to pay close attention to these pollutants.

The company, like the others, developed environmental departments which worked closely with the Jamaica Bauxite Institute (JBI) and other government agencies to set up policies and mechanisms to safeguard the environment.

Another major initiative was a massive tree-planting exercise in which 15,000 trees were planted in a Labour Day project associated with the community. The company also carried on an extensive replanting activity in the mined-out lands.

The move to the North Coast. The company expanded its operations by moving to the North Coast with mining developments in St Ann and the building of a port in Discovery Bay, which was later named Port Rhodes. A certain amount of community resistance to the proposed development had to be overcome.

The Entry of Alpart. As Kaiser Bauxite moved to the north coast of Jamaica, Kaiser Aluminium was organising a consortium that included Reynolds Metals and Anaconda to develop the plant called ALPART (Alumina Partners of Jamaica), which would take the processing of bauxite ore a stage further with the manufacture of alumina. The construction of this plant represented a new era of industrial activity and prosperity for the parish of St Elizabeth.

Three years after the start of construction, the plant went into action on May 18, 1969. The first carload went down to Port Kaiser on August 5, and the first shipload left the port on August 9, on the Ocean Splendour. Eventually, after further expansion the plant had a production capacity of 1.3 million tons.

The Production Levy. 1974 was a watershed year in the history of Kaiser Aluminium in Jamaica. It was the year when the newly elected government of Prime Minister Michael Manley announced plans for new legislation governing the bauxite industry.

The discussions took place from a perspective of a reshaping of the national policy on issues, including income tax, royalties, ownership, and Government policy.

The bauxite companies began negotiations with the government and after a time the government unilaterally imposed a new bauxite levy of 7.5 per cent. This was considered in violation of contract and three of the companies submitted the dispute to the World Bank's Centre for Settlement of Investment Dispute.

At this point, Kaiser Aluminium stepped back from the rest. Edgar Kaiser, president of the company, and Cornell Maier flew to Jamaica after months of negotiations to conclude an agreement with the prime minister. Edgar Kaiser declared, "We are here today to celebrate a new partnership based on a heritage of mutual accomplishments, friendship and trust."

He was to also speak about faith. One line was:

"Faith is assured, is never afraid, because it sees not the problem but the solution."

The best of friends must part, and so after 50 years Kaiser Bauxite, experiencing an economic downturn in the United States, sold its Jamaica interests. But the presence remains and the legacy of those 50 years will remain as a shining beacon of what can be accomplished with the vision and commitment to a partnership among people. Hopefully, the book will have wide distribution not only in St Elizabeth but in all Jamaica.

Australia's Worsley alumina refinery expansion gains environmental approval

ForexTV.com, NY 11/28/05 10:35 pm

SYDNEY (AFX) - Construction of what will be Australia's biggest alumina refinery has moved closer with the 900 mln aud Worsley refinery expansion in Western Australia receiving environmental approval, The Australian newspaper reported, citing government officials.

Worsley Alumina is a joint venture between BHP Billiton with 86 pct, Japan Alumina Associates with 10 pct, and Sojitz Alumina with 4 pct.

BHP Billiton is conducting a feasibility study for a 700,000 metric tons a year expansion with construction expected to begin within a year.

The newspaper said yesterday's approval will allow BHP to expand Worsley to an annual capacity of 4.4 mln tons a year, around 600,000 tons more than the world's biggest refinery operated by Queensland Alumina at Gladstone in eastern Australia.

It said the West Australian Environmental Protection Authority said "emissions from the refinery were very unlikely to cause direct acute or chronic health effects on the surrounding population".

The alumina industry has attracted strong community criticism in Western Australia with Alcoa Inc, the world's largest aluminum company, being accused of poisoning its employees and causing health problems for householders living near one of its plants.

Alcoa is also seeking environmental approval for a 1.5 bln expansion of its Wagerup alumina refinery, also in Western Australia, with an EPA decision expected in weeks.

(1 usd 1.35 aud)

bruce.hextall@xfn.com

BHP and Alcoa expand Brazilian production

egoli.com.au, Australia 29/11/05

By: James Seabrook

BHP Billiton Limited (BHP) and Alcoa Inc (AAI) have announced plans to expand production capacity at their Alumar Consortium plant by 440,000 metric tons per year, or 17%. The news follows BHP, which has a 46% interest in the consortium, commenting yesterday that world aluminium demand would rise by more than 5% each year to 2010, when it will reach 42 million tonnes.

The expansion is taking place in two stages. 48 new pots will operate in the first stage with the remaining 52 pots starting up in March 2006.

The total expected incremental production in 2006 is approximately 50,000 metric tons.

The expansion is part of a US$1.6 billion investment plan that Alcoa Aluminio is implementing for its primary metal production operations in Brazil.

Other work to date includes the implementation of a bauxite mine in Juriti, the doubling of the alumina refinery in Sao Luis and modernization of the aluminum smelter in Pocos de Caldas.

The current project is within the consortium’s original timetable and budget.

For aluminium production, the consortium consists of Alumina, 53.66%, and BHP Billiton, 46.34%.

Lower Angara Area to Become Russia's New Zone of Economic Growth

Financial Information Service(Registration), Russia 28.11.05

KRASNOYARSK, November 28. /FIS/. Implementation of the program of the development of Lower Angara area in the Krasnoyarsk Krai aims at creating a new zone of economic growth in the territory of Russia. The program is to be implemented in two stages. In the first stage, in 2006-2010, the first phase of Boguchanskaya hydropower station (capacity of 1,620 MW), Boguchansky Aluminum Plant and Boguchansky Pulp and Paper Combine will be constructed to form the Boguchansk Power and Metallurgical Association.

BHP Billiton, Eskom in talks on tariffs for Mozal expansion

Mining Weekly, South Africa Nov 28, 2005

World number-five aluminium producer BHP Billiton said yesterday that it would push for 'economic' rather than 'cheap' electricity rates for its planned Mozal 3 expansion, in Mozambique.

President of the group's aluminium division, Alex Vanselow, told analysts and journalists that feasibility studies for the expansion, expected to come on stream in 2009, had been completed, but that final board approval was pending the outcome of negotiations on long-term power-supply contracts with Eskom and the Mozambican government.

He said that BHP Billiton would negotiate for prices that would enable all the stakeholders to achieve satisfactory margins.

The South African government this year indicated that it was uncomfortable with embedded derivate exposure across all of its State-owned enterprises and has said it will support Eskom in its bid to restructure and, where possible, move away from commodity-linked electricity-tariff agreements.

The commodity-linked pricing system was responsible for attracting large aluminium-smelting investments to Southern Africa, including the Hillside smelter, in Richards Bay, and Mozal, located near Maputo.

Eskom is currently also negotiating prices with Canadian firm Alcan, for its long-awaited smelter at the Coega Industrial Development Zone, on the outskirts of Port Elizabeth.

BHP Billiton previously indicated that a further 500 MW of power would be required after the expansion, in addition to the 900 MW already consumed at Mozal.

Should it go ahead, Mozal 3, would add an extra 250 000 t of aluminium ingots a year to the smelter's production, through the construction of a new potline, bringing Mozal's total production to about 800 000 t/y.

Vanselow declined to provide a cost estimate for the project.

BHP Billiton has a 47% stake in Mozal, Japan's Mitsubishi 25%, South African funding parastatal Industrial Development Corporation 24% and the Mozambican government 4%.

The first phase of the smelter was completed in 2000, at a cost of $1,220-billion, which took the smelter to 253 000 t/y and the second phase (Mozal 2) increased capacity to 506 000 t/y at a cost of $665-million in 2003.

Mozal generated record production figures of 551 000 t for the 2005 financial year, owing to 'benchmark' performance from the AP30 technology employed at the smelter, Southern Africa aluminium COO Xolani Mkhwanazi said.

Markets to remain 'tightly balanced'

Both aluminium and alumina are expected to remain in a supply deficit, at least for another two years, aluminium marketing director Julius Matthys said.

He added that alumina supply would remain tight next year but should expand in 2007.

"The market is extremely tight and utilisation rates are basically at 100%."

"Through the whole of 2006 utilisation rates will stay at extremely high levels, effectively 100% capacity.

"In 2007, our view is that it will remain tight but it won't remain as high a utilisation as it is today," Matthys said.

He cautioned that aluminium-demand growth has proved 'inelastic' to changes in prices and remains well above global GDP growth figures.

The group estimates that some 2-million tons a year of aluminium production capacity is currently idle in China, owing to power constraints in that country.

While cash costs for the production of both alumina and aluninium have edged upwards over the last few years, BHP Billiton's relative position has remained unchanged, strategy vice-president Rod Kinkead Weekes added.

He also emphasised that, seen in context of the greater BHP Billiton investment portfolio, the aluminium business is under no pressure to make large investments, and will therefore only commit to, "large, long-life and low-cost" growth projects

BHP Billiton sees alumina tightness easing in 2007

Reuters South Africa, South Africa Mon Nov 28, 2005 12:51 PM GMT

LONDON (Reuters) - Alumina supply will remain tight next year but should expand in 2007, the world's biggest mining company BHP Billiton said on Monday.

"The market is extremely tight and utilisation rates are basically at 100 percent, said Julius Matthys, BHP's head of aluminium marketing, referring to the global industry's capacity.

"Through the whole of 2006 utilisation rates will stay at extremely high levels, effectively 100 percent capacity.

"In 2007 our view is that it will remain tight but it won't remain as high a utilisation as it is today."

© Reuters 2005. All Rights Reserved.

Kaiser Aluminum wins reorganization OK

NewKerala.com, India 30 Nov 2005 # UPI

FOOTHILL RANCH, Calif. : California-based Kaiser Aluminum Corp. said Tuesday its creditors overwhelmingly approved its bankruptcy reorganization plan.

More than 90 percent of Kaiser's creditors accepted the plan, the company said.

"The company's reorganization has addressed a significant number of very complex issues," said Jack A. Hockema, chief executive of Kaiser. "Many difficult decisions had to be weighed to achieve a fair and equitable outcome for all the creditors involved. That the plan was accepted by such an overwhelming majority of our creditors is a testament to the dedication and tireless efforts of all those involved in the process."

The bankruptcy court has scheduled hearings on Jan. 9, 2006, and Jan. 10, 2006, to consider confirmation of the plan and hear any unresolved objections.

Kaiser fabricates aluminum products for aerospace and high-strength, general engineering, automotive and custom industrial applications.

Alcoa, Rio Tinto Aluminium await Malaysia govt approval for smelters - report

Forbes 11.29.2005, 08:47 PM

KUALA LUMPUR (AFX) - Alcoa Inc and Rio Tinto Aluminium are awaiting the federal government's approval to set up aluminium smelters in Sarawak, The Star reported.

The newspaper quoted deputy chief minister George Chan Hong Nam as saying that the state government supports the companies' applications to the International Trade and Industry Ministry (MITI).

He said MITI has approved and issued manufacturing licenses for similar projects to Australia's Comalco Alumina and Dubai-based Smelter Asia Sdn Bhd.

With the exception of Comalco, the others have yet to submit their environmental impact assessment (EIA) reports on their proposed projects, he said.

Comalco's detailed EIA was approved by the Department of Environment in 2000.

'Depending on their sizes, Sarawak can take in two aluminum smelters in Similajau, Bintulu. It will cost at least two bln usd to set up a smelter,' said Chan, who is also the state's Industrial Development Minister.

He said other prominent investors are also interested in setting up similar smelters, although they have not submitted their plans.

'A project proponent will only be determined upon successful negotiations and finalization of the terms and conditions (regarding the power supply) with Sarawak Hiro Sdn Bhd, the owner of Bakun hydroelectric power project,' he added.

The Bakun dam will be able to produce up to 2,400 megawatts of electricity when fully operational.

Chan said Similajau was identified for the energy-intensive aluminum smelter projects because it is close to the Bakun dam and Bintulu port.

leefun.chew@xfn.com

Alcan to Close Aluminum Cast Plate Plant in Vernon, California

Azom.com 30th November 2005

Alcan has announced today that it will close its Vernon, California aluminum cast plate facility effective January 21, 2006. The Company is in discussions for the sale of equipment and real estate to potential buyers.

"Over the past 18 months we have thoroughly explored and examined various alternatives for the Vernon cast plate business. In a challenging economic environment it has struggled to remain competitive, and we have reluctantly taken the decision to close the operation," explained Michel Jacques, President and Chief Executive Officer of Alcan Engineered Products.

The plant produces aluminum cast plates for the mold and tool making industries. The Company has assured the 64 unionized (United Auto Workers) and 12 salaried employees affected by the closure, that they will be treated fairly. State and local employment development departments have been notified of the closure and Alcan will work closely with them during this transition. "We will be managing the social and personal consequences in the most sensitive way possible," concluded Jacques.

http://www.alcan.com/

Yevgeny Zhukov to Head RUSAL’s Sayanogorsk Aluminum Smelter

Russia Newswire (press release), Russia 30 Nov 2005

MOSCOW (RNWire) – RUSAL, a top three global aluminium producer, has appointed Yevgeniy Zhukov Managing Director of Sayanogorsk Aluminium Smelter where he previously held the position of Reduction Plant Director.

Mr. Zhukov will play a key role in meeting one of the company’s main goals which is to increase alloy production to 50% of total output by 2013. His main responsibility will be to drive forward modernization of the Sayanogorsk Aluminium Smelter, with a strong focus on improving environmental performance, increasing production capacities and updating production technologies.

The modernization of the smelter began in 2003 as part of a $62 million project and is planned to take three years to complete. The development will see the smelter equipped with 18 new cells, upgraded gas scrubbers, and improved prebaked anode production technology. This expanded foundry and renewed equipment will allow the billet production to be raised considerably – it is expected that overall, the smelter’s capacity will rise by 5.5% and reach 480,000 tons of aluminium per year.

Biographical Details:

Yevgeniy Zhukov was born September 24, 1968, in Alma-Ata, Kazakhstan. In 1992, he graduated from the Krasnoyarsk State Pedagogical Institute with a major in Chemistry and Biology. Mr. Zhukov received his second degree – in Metallurgical Engineering – in 2001 from the Krasnoyarsk Academy of Non-Ferrous Metals and Gold. He began his career in the aluminium industry in 1993 as a worker at the Krasnoyarsk Aluminium Smelter where he eventually became Senior Production Shop Foreman. In 2001, he was appointed Deputy Director for Production of the Novokuznetsk Aluminium Smelter and a year later became Head of Reduction Plant. For the eight months prior to his recent appointment, Mr Zhukov headed the reduction plant at the Sayanogorsk Aluminium Smelter.

About RUSAL

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

BHP Billiton to Ramp Up Mozal's Capacity

AllAfrica.com, Washington November 29, 2005

Charlotte Mathews Johannesburg

THE third phase of Mozambique's Mozal aluminium smelter will add 250000 tons of capacity to the plant's 551000 tons, BHP Billiton president for aluminium Alex Vanselow says.

Vanselow says that the capital cost of the expansion cannot be disclosed at this stage because there is more work that still needs to be done.

BHP Billiton has completed its feasibility study and is holding discussions with Eskom and the Mozambican government on sourcing the power.

BHP Billiton said last year that the third-stage expansion at Mozal depended on the availability of electricity.

Mozal uses four times Mozambique's average national electricity consumption -- excluding Mozal -- of 250MW, and requires another 520MW to raise capacity.

The first two phases of development cost about $2bn.

Vanselow says that BHP Billiton needs economical power that will allow a return for both smelters and power suppliers.

Though Mozal and the Hillside smelter in SA are setting production records, they offer further expansion potential in the form of increased capacity, Southern African Aluminium chief operating officer Xolani Mkhwanazi says.

Vanselow says Mozal and Hillside are on the leading edge of global high-amperage technology in AP30S smelters and moving into an experimental phase.

He says areas of the plants are being tested to see how they behave at higher amperages.

Technical aluminium vice-president Ian Jacobson says test work shows there is headroom, but it is necessary to manage the risk across the whole asset.

Aluminium marketing director Julius Matthys says the demand and supply fundamentals in the aluminium market remain attractive.

By 2015, demand is expected to be close to 50-million tons, while, even with new production and capacity increases, global supply will remain relatively flat at a little more than 35-million tons.

Global Alumina Announces Third Subscription Agreement

Yahoo! News (press release) Tuesday November 29, 11:39 am ET

Subscription Agreement Valued At Close To US$50 Million

TORONTO, Nov. 29 /PRNewswire-FirstCall/ - Global Alumina Corporation (TSX: GLA.U - News) announced today that it has entered into a subscription agreement with IDB Infrastructure Fund L.P. (IDBIF), a limited partnership established in the Kingdom of Bahrain, pursuant to which IDBIF will subscribe for 22,222,222 Common Shares of Global Alumina at a subscription price of US$2.25 per Common Share, resulting in an aggregate purchase price of US$49,999,999.50. After the completion of the subscription, IDBIF will hold approximately 12.54% of Global Alumina's issued and outstanding Common Shares.

"With our third subscription agreement, Global Alumina has now secured US$488 million, or 70%, of our objective of US$700 million in subscribed equity," stated Bruce Wrobel, Chairman and Chief Executive Officer of Global Alumina. "The combination of the addition of another strategic equity partner, escalation of construction activities for the proposed refinery and expansion of our operational management team gives Global Alumina significant momentum as we continue to aggressively pursue our corporate and financial goals."

His Excellency the President of the Islamic Development Bank, Dr. Ahmad Mohamed Ali, said: "The IDB Infrastructure Fund's approximately US$50 million investment in Global Alumina will add value to Guinea's bauxite reserves by producing, in Guinea, alumina for export. The investment is a prime example of the Fund's private equity investments supporting commercially attractive projects which promote the economic development of Member countries of the Islamic Development Bank."

Under the subscription agreement, so long as IDBIF holds more than 5% of Global Alumina's issued and outstanding Common Shares, Global Alumina will not issue any Common Shares at a price per share of less than US$2.25, other than pursuant to: (i) the terms of certain pre-existing agreements, including the subscription agreement dated August 10, 2005 between Global Alumina and Dubai Aluminium Company Limited; (ii) an exercise of warrants issued by Global Alumina prior to the execution of the subscription agreement; (iii) an exercise of management stock options granted in the ordinary course and consistent with past practices; or (iv) an offering of Common Shares made to the public by way of prospectus.

The closing of the transaction is subject to certain conditions, including the approval of the Toronto Stock Exchange.

BHP Billiton weighs Mozal aluminium smelter expansion

Metals Place, UK - Source: MiningMX 30 Nov 2005

BHP Billiton was in talks with South African power utility Eskom to supply more power to its Mozal aluminium smelter in Mozambique ahead of a 250,000 tonne expansion, said Alex Vanselow, president of the group's aluminium division.

Mozal produced 551,000 tonnes of aluminium in the 2005 financial year, record output.

"We have finished a feasibility study on Mozal III and we are in discussions with Eskom and Mozambique to source power, but there's nothing at this stage that we can disclose," Vanselow told an analysts' briefing on aluminium.

The plan is to add another potline, which would increase capacity by 250,000 tonnes, he said, declining to reveal the costs because there was "still some work to be done."

There are a number of brownfield expansions projects BHP Billiton was considering to increase output, apart from employing higher amps at its existing smelters to boost production.

A proposal to increase output at the Alumar smelter in Brazil has been taken to the board for consideration. However, there are some outstanding matters to resolve with its joint venture partner, Alcoa. The plan is to raise production to 3.5 million tonnes from the current 2 million tonnes/year.

On a broader front, supplies of alumina, the raw material needed to make aluminium, are expected to remain tight over the next couple of years as demand continues to race ahead of refineries. The refineries were operating at full capacity, said Julius Matthys, BHP Billiton's aluminium division marketing director.

"The market is extremely tight and utilisation rates are at 100%," he said. "Through the whole of 2006, utilisation rates will stay at extremely high levels, which is effectively 100% of capacity."

The tight market conditions are expected to ease slightly in 2007.

Any hiccup in production would be seen instantly in prices, he said.

BHP Billiton sees primary aluminium consumption rising to 51 million tonnes per annum (mtpa) from 32 mtpa this year. Chinese demand is expected to more than double to 16 mtpa in that period.

Global use of primary aluminium will have increased fivefold from 1970 to 2015. The whole aluminium industry has a turnover of $180bn/year.

Aluminium producers, particularly those in Europe and the United States, face a tough ride, particularly because of increasing power costs as sky-high fuel prices are felt, said Rod Kinkead-Weekes, the vice-president of aluminium strategy.

"In general, what we're seeing is project delays and the supply side struggling to keep pace with demand," he said, explaining there were rising input costs of power, coke and alumina, which is made from bauxite.

Economic bauxite deposits have been consumed, he said.

"One could say the fat rabbits have been caught. The remaining resources are in more challenging countries where things move more slowly and project risk is much higher… Alumina supply will be stretched for some time," he said. The higher input costs are bad news for expensive aluminium smelters.

"It's good for (aluminium) prices, it's good for those at the bottom of the cost curve and those with locked in or hedged inputs," he said. "This will be serious for some at the top of the cost curve particularly those with expiring power contracts."

"We've already seen smelter closures in Europe and the US and there will be more to come and this is fundamentally because power prices will be structurally higher in those regions than in the past."

Matthys said an estimated 20% of EU smelting capacity has to renegotiate power contracts before the end of 2007.

Robin Bhar, a metals analyst at UBS in London, is reported by Dow Jones, to estimate that a million tonnes of European aluminium smelting capacity could be closed down because of high energy costs.

GidroOGK and Rusal are in talks to attract loans to realize joint project.

Analytical Information Agency, Russia - 29/11/2005 11:09

GidroOGK and Rusal are in talks to attract loans to realize joint project concerning the finishing building of Boguchanskaya GES and construction of aluminium wors, the member of the Board of RAO UES of Russia, the chairman of GidroOGK Vyacheslav Sinyugin said at the conference in Moscow.

RAO and Rusal have decided to participate in the construction of station and an aluminium works on a 50/50 basis. On July 29,2005, the companies have signed the memorandum of intentions to realize joint project. According to preliminary estimates, its total cost will total about US$3 billion.

"AK&M", 29/11/2005 11:09

China's Aluminum Corp seeks to buy smelters

Reuters Tue Nov 29, 2005 4:41 AM ET

By Polly Yam

HONG KONG, Nov 29 (Reuters) - Aluminum Corp. of China Ltd.(2600.HK: Quote, Profile, Research), the country's largest such group, is seeking to buy stakes in Chinese smelters and will complete at least one purchase before the year-end, a company official said on Tuesday.

Company spokesperson Zhang Qing said Shanxi Guanlu Co. Ltd. (000831.SZ: Quote, Profile, Research) and Jiaozuo Wangfang Aluminium Industry Co. Ltd. (000612.SZ: Quote, Profile, Research) were on its acquisition list.

"We are in talk with many smelters," Zhang said.

Aluminum Corp. had also expressed interest in stakes in Baiyin IBIS Aluminium Co. in Gansu province, Fushun Aluminium in Liaoning and Western Mining Baihe Aluminium Co. Ltd. in Qinghai, officials at the three smelters said.

Those five possible acquisitions would increase Aluminum Corp's capacity by more than 800,000 tonnes of primary aluminium.

Joe Zhang, analyst for UBS Securities Asia, said in a report on Tuesday that rapid expansion by Aluminium Corp would be a problem as the aluminium sector would likely remain unprofitable for at least a few more years.

Many smelters in China have been operating at a loss so far this year due to high prices of the main raw material alumina and Beijing's measures, including credit curbs and higher power fees, to cool investment in the energy-intensive aluminium industry.

Smelters want to secure supply of cheaper alumina by selling a stake to Aluminum Corp., which is also the country's dominant producer of alumina.

"Costs of alumina are too high," the official for Western Mining said when asked why it wanted to sell a stake to Aluminum Corp. The smelter has a capacity of 112,000 tonnes a year.

The official for Baiyin IBIS said it was willing to sell a 51 percent stake to Aluminum Corp. The 130,000 tonnes a year smelter received 100,000 tonnes of alumina a year from Aluminum Corp. and the contract would expire by the end of 2007.

A Jiaozuo official said Aluminum Corp. was in talks with the government of Jiaozuo city, which owned 52 percent of the 250,000 tonnes per year smelter.

Jiaozuo posted net losses of 36.9 million yuan in the first half this year due to high prices of alumina.

Shanxi Guanlu would sell a 50 percent stake in its new 200,000 tonnes per year smelter to Aluminum Corp., market sources said. It also operates another 110,000 tonnes of capacity.

Chinese smelters paid $615 a tonne for imported alumina, up 45 percent so far this year.

China, the world's largest buyer of spot alumina, imported 5.8 million tonnes in the first 10 months of 2005, up 18.3 percent from a year ago.

But Aluminum Corp's prices for spot alumina had risen 7.6 percent so far this year to 4,660 yuan a tonne.

Aluminum Corp. bought a 28 percent stake in Lanzhou Aluminum Co. Ltd. (600296.SS: Quote, Profile, Research) for 767.3 million yuan in January.

It has said it would produce more than 7.5 million tonnes of alumina this year and 1.05 million tonnes of primary aluminium.

© Reuters 2005. All Rights Reserved.

Some 3-mil mt aluminium smelting capacity at risk for closure: ML

Metals Place, UK 30 Nov 2005

Merrill Lynch has estimated that about 3.092-mil mt of aluminium smelting capacity in the US, China and Western Europe is at risk for closure during 2005-2007 amid high costs. Chinese producers account for at least half of those smelters, which have the highest cash costs, it said Tuesday.

Costs of power and alumina, typically two-thirds of the costs of making aluminium, are expected to keep costs high for these smelters through 2007. US and European producers typically face average alumina costs, but higher power costs than producers in the rest of the world, it said. However, Chinese producers, on average, face higher alumina and power costs than both US and European producers.

"Chinese aluminium smelters, which have the highest cash costs in the industry, are at the greatest risk for closure," said Merrill Lynch. Chinese power and alumina costs are significantly higher than those of the US and Europe, and the situation is not expected to change materially through 2007. Chinese aluminium cash costs, estimated to be $1,776/mt during 2005 and about $1,559/mt during 2007, are expected to remain higher than those of the US and Europe, said Merrill Lynch.

Aluminium prices on the LME continue to be higher than those on the SHFE. On a year-to-date basis, the three-month aluminium price on the LME has averaged about $1,870/mt, while comparable prices on the SHFE are only about $1,736/mt. Chinese producers have increased production of aluminium at costs above prices on the SHFE during the last two years.

"We believe this situation is unsustainable in the long-term, and see downside risks to long-term Chinese aluminium production, if prices do not improve," said Merrill Lynch. China is expected to increase the export tax on primary aluminium to 10% from 5% in January in an effort to further slow investment in the domestic industry. At first the export tax will be 10%, but if government officials believe that exports are not decreasing as much it as intends, then it is expected that the tax will increased to 20%," said Merrill Lynch.

Additionally, it is expected to decrease the tax rebate on aluminium products to 6% from 11%. Increasing the tax while decreasing the rebate will likely increase China's exports of primary aluminium in December, but will also likely decrease exports next year. On a fully calculated net basis, total aluminium trade data (primary aluminium, alloys, scraps, semis, and other products) shows that during the January to October period, China remains a net importer of aluminium with net imports totaling 310,000mt, but net imports have declined 20.5% versus the same period last year.

Total aluminium imports have increased 6.4% year-to-date to 2.438-mil mt, while exports have increased 11.9% YTD to 2.181-mil mt. Imports of primary aluminium plus alloy decreased by 41.5% YTD, 45.7% year-over-year, and 13.3% on a month-over-month basis. Exports of primary aluminium plus alloy decreased by 10.1% YTD, 42.6% year over year but increased 21.6% month over month. "China's apparent consumption, which is calculated as production plus net imports/exports, shows that China consumes more aluminium than reported. This lends further proof that China is a net importer of total aluminium," added Merrill Lynch.

Romania: ALRO Slatina Launches Public Offer for Alum Tulcea's Takeover

Reporter.gr, Greece 17:06 - 30 November 2005

ALRO Slatina aluminium producer launched a public offer for the takeover of Alum Tulcea Co., which is due to take place November 29 through December 20, 2005 with the share price being at 5.6 RON, ACT Media news agency reports.

"Our strategy provides for the integration of Alum Tulcea alumina producer into the ALRO Group," said the Vice-chairman of ALRO's Administration Board, Marian Nastase.

Since the takeover of Alum's majority share package in September 2005, ALRO Slatina has implemented the investment plan designed for the alumina producer with the upgrading of alumina loading and stocking equipment.

In addition, a dust collector system was installed, in line with a technical solution supplied by ALRO Slatina plant.

ALRO's technological investments are set to reach a level of 25 million dollars this year, following a three-year investment of 145 million earmarked for the plant's production lines upgrading and for environment's protection. Based on estimates, aluminium production is set to reach 260,000 tonnes per year in 2006.

In 2004, the company posted a turnover of approx. 500 million dollars and the net profit was 31.5 million euros.

Source: ACT Media News Agency

Dubal suggestion wins environmental award in IdeasUK competition

Strategiy, United Arab Emirates Wednesday, November 30, 2005 7:08:00 am

Dubai Aluminium Company DUBAL has received one more international recognition when one of the suggestions submitted by its employees won the IdeasUK Environmental Trophy in the IdeasUK competition held recently.

Mr. Abdulla Kalban, Chief Executive Officer, DUBAL, said: "This international acknowledgement could not have been possible without the technical expertise and the commitment of our employees. We are proud of our employees who are furthering their role in DUBAL's success story."

The suggestion titled "Avoid breakdown and sound pollution due to crust breaker cylinder" submitted by Mr. A.K. Singh, Maintenance Mechanic and Mr. Arogyanathan, Maintenance Technician, won the environmental award. Other companies who participated in the competition were British Gas, Glaxo SmithKline, Lloyds TSB, ST Micro, Ricoh UK etc.

"The DUBAL suggestion lists measures that help in reducing noise levels, dust particle levels, emission of fluorides, 20% reduction in breakdown calls, and substantial savings in conversion from silencers to permanent piping. These measures help increase efficiency in the Potrooms," added Mr. Kalban.

There were 28 short-listed finalists in the competition out of which three were from DUBAL. All the finalists along with the area representatives attended the conference recently in Chester, UK. The finalists were required to discuss their ideas with the judging panel as per the competition rules.

Earlier, the same suggestion submitted by the same DUBAL employees won Environment Trophy in the 'Idea of the Year' competition from the US-based Employee Involvement Association (EIA-US). DUBAL had won the Environmental Award in the EIA-US competition for the fourth time in a row.

In 2004, DUBAL implemented and awarded 8,064 suggestions with an overall employee participation of 93%. This means 93% of eligible employees submitted at least one awarded suggestion. Besides employee involvement, the Suggestion Scheme resulted in savings of more than AED4.16 million in 2004 and cumulative savings of AED43 million since the scheme's inception.

This year DUBAL plans to achieve 100% employee participation and increase the average number of suggestions per employee to four from 2.8 at present. This year an ambitious target of 9,000 has been set for awarded suggestions.