AluNews - April 2006

Bill's passage will only mean good for region

Henderson Gleaner, KY April 1, 2006

Editor:

The future for western Kentucky looks brighter following passage of House Bill 275 through the General Assembly. The bill was a vital piece of the complicated process underway to allow Big Rivers Electric Corporation to resume control of its generation and transmission operations, which in turn will help safeguard jobs at the Alcan and Century aluminum smelters as well as facilitate ongoing economic development opportunities throughout our region.

State Reps. Gross Lindsay of Henderson and Dwight Butler of Harned co-sponsored the bill, demonstrating a deep understanding of the issues involved and a willingness to provide leadership. The work of Rep. Eddie Ballard and House Speaker Jody Richards also made sure the measure moved quickly through that chamber.

State Sens. Dorsey Ridley, Carroll Gibson, and Robert Stivers, -- along with Senate President David Williams -- made sure that the importance of the bill was felt equally in the Senate, where it likewise was approved unanimously. And even though he was in the hospital at the time, Gov. Ernie Fletcher took time out from his recovery to sign the bill into law.

The entire process was a remarkable example of bipartisan cooperation on an issue of great importance to the people of western Kentucky.

HB 275 is one of the necessary steps to allow Big Rivers to resume operation of its generating plants. It also allows us to continue working on details of new, long-term power contracts with the aluminum smelters that provide so many jobs and subsequent economic benefits in our part of the Commonwealth.

Big Rivers Electric Corporation is grateful for the insight of so many people who came together to make this piece of legislation possible. On behalf of our member cooperatives and the more than 107,000 homes and businesses served by them throughout this part of the state, we offer our heartfelt gratitude to everyone who made this brighter future possible.

Michael H. Core, president and CEO

Big Rivers Electric Corp.

Mark Bailey, president and CEO

Kenergy Corp.

Kaiser operations rebound in 2005

The Spokesman Review, WA Saturday, April 1, 2006

From Staff Reports

Kaiser Aluminum lost $753.7 million in 2005, largely on the sale of factories that were hurriedly sold as part of the company's bankruptcy strategy.

Despite the accounting loss, the company issued a press release that said operating income in 2005 reached $59.8 million on sales of $1.08 billion. That compares favorably to the $817.6 million operating loss in 2004.

The company is reorganizing and hopes to emerge from Chapter 11 bankruptcy protection in the second quarter this year. Once it exits bankruptcy, Kaiser will focus on manufacturing and selling fabricated aluminum parts rather the mining bauxite, refining alumina and smelting aluminum.

The company's 49 percent stake in a smelter in Wales is among the last commodity plants that the company still holds.

This change makes the role of the company's Trentwood rolling mill a key part of the company's future.

Kaiser CEO Jack Hockema said in a press release that the company earned an $87.2 million profit from its fabricated products unit, which includes Trentwood.

Kaiser's bankruptcy plan of reorganization has yet to be approved by United States District Court. The company also needs to handle appeals by certain insurers before it can exit bankruptcy with a clean financial statement.

For the fourth quarter, Kaiser had operating income of $14.3 million. The company had quarterly sales of $273.8 million, up $16.1 million from the similar period in 2004.

Falconbridge studying Chile hydro project

Metro Toronto, Canada - Mar 31, 2006

SANTIAGO, Chile (Reuters) - Canadian miner Falconbridge <FALlv.TO> said Friday it is evaluating a project to build a $600 million hydroelectric power plant in southern Chile.

Toronto-based Falconbridge said the project, known as Energia Austral, would involve the construction of a 740 MW Rio Cuervo hydroelectric power generating plant in Chile's Aysen region.

Energy-poor Chile is searching for ways to supply growing demand amid threats of interruptions. The mining industry, which produces Chile's No. 1 export copper, is the nation's top energy consumer.

Falconbridge said in a statement issued in Santiago that the project site would be on lands owned by the company in the Rio Cuervo area, which have no use for cattle breeding or tourism but with "great hydroelectric potential."

Falconbridge, which merged with Noranda in mid-2005, is one of the world's leading producers of copper, nickel and zinc.

Noranda had originally planned to build three hydroelectric power plants in the Aysen area to supply its Alumysa aluminum plant project. But development was halted after the government, under pressure from salmon farmers and environmental groups, decided not to allow the aluminum plant to be built there.

(c) Reuters 2006.

Chávez inaugurates $2.5 billion hydroelectric dam

Daily Journal (subscription), Venezuela - Mar 31, 2006

President Hugo Chávez on Friday said that a new $2.5 billion hydroelectric dam, built to serve some 12% of Venezuela’s electricity needs, is a sign of pro-gress in the South American nation.

"This is a monumental effort that forms part of the integrated development project and industrialization of the country," Chávez said in a ceremony to inaugurate the Caruachi dam near the city of Puerto Ordaz, about 310 miles southeast of the capital of Caracas.

Construction began along the Caroní River in 1988 and the plant started generating electricity in April 2003. The dam – Vene-zuela’s second-largest – has gradually increased its electrical output but didn’t become fully operational until its 12th turbine was put into service on Friday.

Chávez said state aluminum and iron producers in the area will use electricity from by the Caruachi dam, which will generate an average of 11.3 billion kilowatt-hours per year – enough to power a city of 6 million. Three dams – the Caruachi, Guri and Macagua – together produce 75% of Venezuela’s electricity and supply energy to border regions in the neighboring countries of Brazil and Colombia. Chávez also hailed the Caruachi as "an example of respect for nature, ecological balance, the use of alternative energy sources," and said it would save as much as 76,000 barrels of oil a day.

Venezuela consumes an estimated 150,000 barrels of daily to produce electricity.

Almost 60% of funding for the dam was provided by state utility and mining company Corpora-ción Venezolana de Guayana through its subsidiary Electrici-dad del Caroní, while the rest was financed through loans from international lenders including the Inter-American Development Bank.

Alcoa responds to smelter concerns

http://www.trinidadexpress.com/index.pl/article_news?id147902047

Trinidad & Tobago Express, Trinidad and Tobago - Sunday, April 2nd 2006

Alcoa's facility located in Chaguaramas, Trinidad.

The following was sent to the Express by Wade Hughes of Alcoa Trinidad and Tobago Project Team

DEAR EDITOR:

A recent guest Q&A makes a number of incorrect assertions about the aluminium smelting process and Alcoa's proposal to establish an aluminium smelter and associated downstream activities at Cap-de-Ville. We would very much like the opportunity to correct these assertions.

What we read:

"The working environment is high-risk in terms of cancers - this is very well researched and documented, although Alcoa is investing a lot of money in seeking to convince us it's not."

The Facts:

The body of scientific knowledge indicates that the risk of cancer is very low in modern prebake aluminium smelters. Healthwise, the longest running independent study of health in the aluminium industry (based principally on Alcoa's Australian operations), has found that the total cancer incidence rate within the organisation is the same as the rate within the general population. (Healthwise was initiated and continues to be supported by Alcoa in the interests of occupational health.)

Commentary on the Australian Broadcast-ing Corporations Media Watch website and a statement made by the chief researchers from the Healthwise study following the release of the first round of findings from Healthwise in 2002 offer perhaps the most succinct insight into the confusion and claims made in your guest Q&A and elsewhere.

What the researchers really say:

"Alcoa and the Healthwise researchers contacted "Media Watch" after our story, concerned that viewers and readers might infer that the report is a shock horror revelation of soaring cancer rates.

In fact, all of the stories (and particularly the headlines) tilt the story, with The Age and West Australian headlining the matters of greatest concern, and the Australian Financial Review taking a more sanguine view.

Media reinterpretation is an inevitable part of reporting, so here's what the researchers say when they get a chance to summarise the results of their own preliminary work:

Statement from Health-wise Investigators and the Chair of the Healthwise Scientific Advisory Board

The findings of the Healthwise study of current and former aluminium workers released by the investigators of Monash University and the University of Western Australia should give little cause for alarm, according to the investigators and the study's independent advisory board.

In a statement this afternoon, Professor John McNeil, Head of the Department of Epidemiology & Preventive Medicine, Monash Medical School, and Professor Geoffrey Berry, Chairman of the Scientific Advisory Board, emphasised that the results of the study were preliminary and ongoing.

"More detailed information from which stronger conclusions will be drawn will become available in the coming years. However, at this point, there seems little cause for alarm from any of the study's findings," Prof McNeil said."

- http://www.abc.net.au/mediawatch/alcoa.htm

That was in 2002.

Findings published by the researchers in 2004 -specifically related to Alcoa's smelting operations in Australia - indicate the following:

l Overall, there were no more newly diagnosed cases of cancer than would have been expected on the basis of general population rates during the study period 1983 to 2002.

l The mortality rates for all four major causes of death (cancer, circulatory disease, respiratory disease, and injury/trauma) were no higher than for the general population.

l The mortality rate for all causes combined was significantly less than for the general population.Â

Properly peer-reviewed scientific studies by Armstrong et al did indicate a correlation between lung and bladder cancer in smelter workers who had worked for 30 years in certain older Canadian smelters in the 1940s to 1970s. Arm-strong's study indicated an increase risk in incidence of lung cancer of one case per 100 workers over 40 years and an increase in risk in incidence of bladder cancer of one case per 100 workers over 40 years.

The kinds of coal tar pitch volatile exposures observed in those old Canadian smelters with their different technology are much higher than they would be in the modern prebake smelter that Alcoa would build in Trinidad. Ongoing surveillance of workers in modern prebake smelters has not replicated these findings.

Alcoa reacted to the Armstrong study findings by (i) significantly publicising them (they had been published some years before, but no other organisation-government, union, regulatory body-had given them any prominence) and (ii) reducing occupational exposure limits for coal tar pitch in Alcoa smelters worldwide to one-quarter the limit currently allowed by the US Occupational Safety and Health Administration (OSHA).

What we read:

Alcoa wants to establish an aluminium smelter in Trinidad because of " weak environmental legislation, weak workers' rights."

The Facts:

The environmental, health, and safety performance of this smelter would be the equivalent of Alcoa's most modern prebake smelters anywhere in the world. Alcoa imposes US OSHA, or higher, standards for protecting employee health and safety in all its facilities worldwide. (Alcoa's alumina transfer station at Tembladora was one of the first Trinidad and Tobago operations to be compliant with OSHA.)

Alcoa also supports Freedom of Association - the right of workers to join, or not join, organisations as they so choose. (Alcoa's Tembladora facility is unionised.)

What we read

" in the developed world, these industries are being closed down."

The Facts:

Most of the aluminium smelters built over the past 20 years have been built in the developed world. Most of Alcoa's 26 currently operating smelters are based in the developed world, close to population centres. Over the past few years, Alcoa has purchased, and today operates, two smelters built in that period in Quebec, Canada, and the US Last year, Alcoa reopened a smelter in the northwest US Alcoa is currently building one smelter in Iceland, studying the feasibility of building a second there, and expanding a smelter in Norway. It is the cost of energy and not concerns over environmental or health and safety issues that causes the curtailment of production in regions such as North America and Europe

What we read:

" if there were spills or accidents and this material (spent pot lining) was somehow disbursed in the area, there would be an ecological meltdown."

The Facts:

Spent pot lining won't be "disbursed" in the area and could not cause an "ecological meltdown" - whatever that might be in scientific terms. Spent pot lining is considered to be a hazardous waste, and practices for safely containing and managing it are well understood.

It will not be landfilled in Trinidad and Tobago. Properly handled, it can be a valuable raw material for other industries, such as the cement industry. Today, there are a number of reprocessing facilities operating successfully for this and other purposes in the US Canada, Australia, Brazil, and Europe. Alcoa led the aluminium industry in the pursuit of a process for recycling this material.

If we are unable to find a useful, safe purpose for it in Trinidad and Tobago, we'll ship it - safely and legally - to a reprocessing centre elsewhere, as we will be doing for our spent pot lining generated by our new smelter in Iceland.

What we read:

" (fluoride) reacts with the calcium in the bones and gives rise to brittle bones."

The Facts:

Once again, in terms of human health, this is a reference to health effects seen in cryolite miners and smelter workers back many years ago. No such effects have been seen in Alcoa smelter workers over the past 30 to 40 years - and never seen in the people living in adjacent communities to Alcoa smelters.

As noted, the conditions that existed in those old smelters do not exist in Alcoa smelters. Modern control technology captures and recycles more than 95 per cent of the fluoride emissions that would have been emitted from these old smelters. Animals grazing outside the buffer zones of modern prebake smelters are at no risk and, properly managed, can safely graze inside the buffer zone - as is done at a number of Alcoa smelters in North America and Australia.

What we read:

"I can't say we will (have environmental controls)."

The Facts:

Yes you can. As outlined above, we will.

What we read:

" no land has been cleared yet (at the proposed site at Cap-de-Ville) but there are rumours it is imminent."

The Facts:

The rumours are misguided. It is not imminent. No land will be cleared until a full and public Environmental Impact Assessment has been completed. Then, only about one-third of the site will need to be cleared for buildings and infrastructure. The remainder will be buffer zone, productively put to use for such things as conservation, ecological education, agriculture, and horticulture under a plan developed in full consultation with the local communities and relevant agencies and institutions.

For more information about Alcoa and the project, visit www.alcoa.com/trinidad_tobago.

6,000 new jobs to be created ...with 3.7 billion dollars investment in VALCO

Gye Nyame Concord, Ghana Friday, 31 March 2006

Akosombo (E/R), March 31, GNA - The Government with its private sector partners is to inject 3.7 billion dollars into the operations of the Volta Aluminium Company (VALCO) to create additional 6,000 jobs, President John Agyekum Kufuor has announced.

This investment, to span a four-year period, would enable Ghana to use VALCO to anchor an integrated aluminium industry, he said. Opening the Seventh bi-annual meeting of the Ghana Investment Advisory Council (GIAC) at Akosombo on Friday, President Kufuor said the success of the venture would lead to the realisation of the country's goal of achieving middle-income status.

The GIAC provides, among other things, feedback on policy reform and their impact on the investment climate; identifies priority areas for change or improvement and suggests solutions based on practical investor experience.

The three-day meeting would provide the platform to evaluate progress and recommendations and determine the future of the country's private sector.

President Kufuor said to open up the economy for accelerated growth; the Government was seriously considering accessing the capital fund market internationally.

He said this would be done with all due caution to ensure that it would yield positive results for the economy.

He made reference to the World Bank Study - Doing Business in 2006 - that rated Ghana first, as the easiest place for doing business in West Africa, 9th in Africa and 82nd in the world.

Additionally, the Ghana Business Leaders' Confidence Index undertaken during the last quarter of 2005 by the Steadman Group showed that business confidence was high.

Some 73 per cent of business executives interviewed said the current economic conditions were better than six months before while 87 per cent were confident that conditions would be better still in the next six months.

President Kufuor identified the link between capital and investment as crucial to the achievement of sustained economic growth.

He, therefore, welcomed the growth in mutual funds and other capital produce, the decrease in secondary requirements from 35 per cent to 15 per cent, decline in interest rates and the drop in inflation to 12.1 per cent in February 2006.

He said the vision of middle-income status was backed by viable policies, premised on hard gains, adding that the almost seven billion dollars debt cancelled by bi-lateral and multi-lateral creditors had provided economic space and focus on Government's priorities.

Mr Kwamena Bartels, Minister of Private Sector Development and President's Special Initiative (PSI), said last year was the best for President Kufuor's Government citing reaching the Highly Indebted Poor Countries (HIPC) completing point with its subsequent debt cancellation and qualifying for the Millennium Challenge Account

Rusal completes acquisition of Guyanese bauxite miner

Engineering News (press release), South Africa - 05 April 2006

One of the world's three largest aluminium producers, Rusal, has completed the deal to privatise the Guyana Republic's state miner Aroaima Mining Company (AMC).

AMC's financial and production operations, the majority of its assets, infrastructure and bauxite deposits (with total reserves of 96-million tons) are being transferred to the ownership of Rusal's subsidiary in Guyana, the Bauxite Company of Guyana Inc (BCGI).

BCGI was launched in December 2004 as part of Rusal's memorandum of understanding with the Government of Guyana to revitalize the country's bauxite industry.

Rusal holds a 90% stake in BCGI, while the Government of Guyana is the owner of the remaining 10%.

Since April 2005, BCGI ran AMC under the terms of a management contract.

In parallel with this development, RUSAL has launched confirmatory drilling at the Linden group of bauxite deposits in Guyana.

BCGI's privatisation of the Guyanese state mining company AMC has been formally finalised through the asset purchase agreement and a vesting order signed by Guyana's Prime Minister, Samuel Hinds. In accordance with the framework agreement between RUSAL and the Government of Guyana, announced in January 2006, BCGI acquires AMC's assets and assumes a $20 million investment commitment. The Government of Guyana retains a 10% stake in BCGI.

The investment programme, covering the period 2005 to 2007, will boost AMC's production capability from 1,3-million to 2,5-million tons of bauxite a year.

In 2005, when BCGI was the managing company of AMC, $10-million was invested in the Guyanese operation, primarily, in new mining equipment.

In line with the privatisation deal, Rusal will contribute these assets to BCGI's charter capital.

The Government of Guyana will transfer part of AMC's assets to BCGI's chartered capital in proportion to its shareholding.

Simultaneously, RUSAL has also launched confirmatory drilling at the Moblissa-Bamia bauxite deposit, part of the Linden group.

The company secured a licence to develop this group of deposits in 2004.

The preliminary estimate of the group's total reserves is about 120-million tons of bauxite - enough to ensure a full supply of raw materials to a 1,5-million t/y alumina refinery.

Depending on the results of the confirmatory drilling, Rusal will decide whether to conduct a feasibility study for an alumina refinery.

In Guyana, the company also holds a licence to develop the Ituni group of deposits with potential reserves of 100-million tons of bauxite, it expects to begin exploratory drilling at the group in 2007.

Alcoa Touts $1.5B Aluminum Smelter

Houston Chronicle, United States April 5, 2006, 6:58PM

By ADAM RANEY Associated Press Writer, © 2006 The Associated Press

PORT-OF-SPAIN, Trinidad — Alcoa Inc.'s proposed US$1.5 billion (euro1.2 billion) aluminum smelter in southern Trinidad will bring jobs to the Caribbean nation and help diversify its energy-based economy, a company official said Wednesday.

The smelter, planned for Cap-de-Ville, will produce 341,000 metric tons a year of aluminum and employ between 750 and 800 workers. The company has signed a preliminary deal with the government to own and operate the smelter for 30 years.

"There's a win, win, win here _ for the people, the country and Alcoa," said Randy Overbey, Alcoa's president of primary metals development.

U.S.-based Alcoa filed an application in March for environmental clearance for the smelter. The next step will be an Environmental Impact Assessment, which requires that the project's possible environmental and health effects are made known to the public before it is finalized.

Alcoa hopes to start construction sometime next year, said Jerome Maxwell, Alcoa's president for the Caribbean and Africa.

The project _ which includes building a power plant at the smelter site that would use five percent of Trinidad's natural gas to fuel the smelting process _ has run up against some opposition.

Fitzroy Beache, head of an anti-smelter group in Cap-de-Ville, said he and his fellow activists aren't interested in the kind of developments proposed by Alcoa.

"After the gas is finished what's gonna be left. We'll be back to square one. Meanwhile, they want to come here build a smelter and destroy this place," he said.

Overbey said he hopes the smelter is in operation for as many as 50 years, although he acknowledged current proven gas reserves of 30 trillion cubic feet would run out before then.

The company has said it will hold a 100 percent interest in the smelter.

Trinidad and Tobago is one of the wealthiest countries in the Caribbean, relying on oil and gas for more than 25 percent of gross domestic product.

Russian Aluminum Giant Rusal Expands to China

MosNews, Russia 05.04.2006 15:16 MSK (GMT +3), Updated: 15:23 MSK

Russian aluminum giant Rusal said Wednesday it had bought a Chinese plant to reduce dependence on outside suppliers of ore and products used in aluminum extraction, RIA-Novosti news agency reported on Wednesday.

"We intend to achieve complete self-sufficiency not just in [the supply of] bauxites and alumina, the main raw materials used in aluminum smelting, but also in products essential to the electrolysis process, such as cathodes, coke and carbon loam," the agency quoted Valery Matviyenko, director of Rusal’s engineering and construction department, as saying.

The facility, purchased from China’s Hongyuan Carbon Plant Co., produces 15,000 metric tons of cathode blocks for alumina electrolysis, and will cover about 50% of Rusal’s cathode needs, Matviyenko said. He said it would protect the company against disruptions in the cathode supply and enable it to improve quality through direct technology control.

Rusal plans to invest $3 million in upgrading its new production unit and in construction of an additional furnace to increase output to 25,000 tons.

The company ranks among the world’s top three producers of aluminum and alloys, and exports to 40 countries across the world. It accounts for 75% of Russia’s aluminum output and 10% of global production.

NALCO plans $3.4 bn Gulf smelter, hold 51%

REUTERS Wednesday, April 05, 2006 at 1440 hours IST

MUMBAI, APRIL 5: National Aluminium Co. Ltd. (NALCO) plans to build a $3.4 billion, 500,000-tonne aluminium smelter in the Gulf, in partnership with an oil producer, its chairman said on Wednesday.

National Aluminium, India's second-largest aluminium producer, will hold 51 per cent in the venture that will also have a 1,500 megawatt power facility and a jetty, he said.

"We are going to submit a proposal to the government soon. The location will be either Qatar or Oman," C.R. Pradhan said.

"It may a take a year for the proposal to be cleared. At best the clearance could come in 5-6 months."

The company has set a target to produce 348,000 tonnes of aluminium in the year to March 2007, down 3 per cent from 358,000 tonnes last year because of a scheduled shutdown for maintenance, Pradhan said.

Alumina output will drop marginally to 1.57 million tonnes from 1.59 million in 2005/06, he added. ($1 44.7 Indian rupees)

Pechiney Settlement

WTAP-TV, WV - Apr 5, 2006

Plaintiffs reached separate financial agreements ...

Story by Nicole Ward Email | Bio

Pechiney, the Ravenswood aluminum plant accused of illegaly monitoring employee conversations reached a settlement Wednesday with 17 current and former workers.

The lawsuits were first filed in 2003 against Pechiney Rolled Products of Ravenswood. The company now operates as Alcan Rolled Products-Ravenswood.

Pechiney was accused of installing audio surveillance equipment in various parts of the facility and secretly listening to conversations for at least three years.

The plaintiffs reached separate financial agreements before the jury could begin deliberations in Jackson County Circuit Court.

The workers' attorney Leah Boggs, says terms of the settlement aren't being released.

Each plaintiff had sought at least 100 dollars in damages for every day their conversations were monitored, and five million dollars in punitive damages.

Company officials denied monitoring employee conversations and did not admit any wrongdoing in agreeing to the settlement.

RUSAL to Have Enough Cathode/Anode of China

Kommersant, Russia Apr. 07, 2006

Russia’s aluminum giant, RUSAL, that acquired a cathode producer in China never stops at what has been accomplished. The company announced Thursday it intends to construct its own anode works in that country. Nowadays, RUSAL is buying the coal-graphite product from Viktor Vekselberg’s Energoprom, but its recent moves signal it will soon shift to self-sufficient production. Energoprom doesn’t appear concerned – the company has staked on the export.

Construction of anode works in China is being canvassed with authorities, said RUSAL representative Vera Kurochkina, adding it is too early to speak of investment or production capacity of the enterprise. She said RUSAL needs roughly 400,000 tons of anodes a year. The project value could be $200 million to $300 million, the analysts calculated.

Russia’s aluminum giant appears to have enough money for a new undertaking. RUSAL is ready to invest $2 billion in 2006, including half of the amount to be funneled into construction of new facilities.

RUSAL’s success in China will enable it to drop contracts for cathode/anode deliveries made with Energoprom, Russia’s key maker of coal-graphite product that is controlled by SUAL’s co-owner Viktor Vekselberg.

"RUSAL stopped ordering anode packs at Energoprom this year," said Anatoly Seleznev, general director at Energoprom’s partner Uglerodprom. RUSAL accounts for less than 10 percent of Energoprom production now.

"Losing a big client will be a pity, of course," Seleznev said, "but Energoprom is primarily targeted at foreign markets in the sales policy." It exports around a third of all coal-graphite product now; for some items, the export share reaches 70 percent. The company is likely to clinch big deals to ship cathode packs to Canadian Alcan and has been long cooperating with Alcoa.

http://www.kommersant.com/page.asp?id664439

Eskom mulls smelter interruptions as power squeeze bites

Engineering News (press release), South Africa, 08 April 2006

Electricity utility Eskom will consider invoking the interruptability clauses it has with various energy-intensive clients, particularly those in the metals sector, as the reserve position between South Africa’s winter peak and its installed power capacity continues to narrow.

At present, Eskom estimates the margin to be about 2 500 MW, but it is in the process of reviewing its plans in light of higher-than-anticipated demand as well as the six per cent growth target identified in South Africa’s Accelerated and Shared Growth Initiative, Asgisa.

Eskom CEO Thulani Gcabashe is on record as saying that the utility will be able to meet its contractual obligations to its existing large users, as well as Canadian metals firm Alcan, should it decide to pursue a R12-billion aluminium-smelter project at the Coega industrial-development zone, in the Eastern Cape.

However, he has pointed out that some of South Africa’s smelters – most likely referring to those in the chrome and aluminium industries – operate under an interruptible contract, which Eskom may consider enforcing to ensure security of supply.

"That is really part of the deal. They (the smelters) lived through the era of excess capacity without being interrupted, while having interruptible contracts. So it might be time to interrupt, but that is constrained by duration and frequency," Gcabashe states.

It is understood that the aluminium smelters, should they be interrupted, would require power to resume within three to four hours to avoid metal congealing in the pots. The net destructive effect on ferrochrome smelters is said to be potentially less deleterious, but only if the outages are planned.

It is unclear, though, whether BHP Billiton, which operates several potlines in Kwazulu-Natal, South Africa, and in Maputo, Mozambique, has been successful in transferring the bulk of these potential interruptions from the aluminium to the chrome industry. Should this be the case, the ferrochrome industry is likely to suffer the brunt of any planned interruptions, and will, therefore, be seeking close cooperation with the utility in a bid to limit asset and revenue damage. Interestingly, the mining giant recently sold its interest in Samancor Chrome to the Kermas group, in which International Mineral Re- sources is currently seeking to acquire a 32,5% interest.

Meanwhile, it has also emerged that, despite ongoing debate over the appropriateness of a new aluminium-smelter investment in light of South Africa’s growing power squeeze, Alcan is close to making a decision on the proposed Coega smelter.

It is understood that negotiations on the final electricity-tariff regime for the facility are at an advanced stage, with only notification of final agreement awaited by Eskom.

A 15% shareholder in the planned smelter, the State-owned Industrial Development Cor- poration, argues that the project continues to make sense for South Africa and that it is optimis- tic it will proceed.

CEO Geoffrey Qhena points out to Engineering News that the project, which has been scaled up to 720 000 t/y, will not be built in a single year, and that Eskom has factored the smelter build-up into its planning.

Eskom concurs, stating that it is confident of meeting its commitments to Alcan, particularly given that the plant will be built in phases – should construction start toward mid-2008, Alcan expects the smelter to be built in at least two phases, over a 72- to 80-month timeframe.

Gcabashe suggests the decision now largely depends on what Alcan makes of Eskom’s tariff offer.

It is believed that Alcan will receive a tariff based on the amortised cost base of the new-build programme, which could be between 20 cents and 30 cents a kilowatt hour – this could not be confirmed, however. Hillside and Mozal, on the other hand, have more favourable tariffs, founded on South Africa’s installed base, while their tariffs are also aligned to the ebb and flow of the aluminium price itself. However, Eskom’s sole shareholder, the South African government, has made a policy decision to disallow any further commodity-linked deals, given that they now have to be accounted for as embedded derivatives and can, thus, cause material financial-statement volatility.

"I think it is still a worthwhile project. The timing is quite in order and has been planned for," Gcabashe told an investment conference at the beginning of March. However, he admitted that proposed expansions to BHP Billiton’s Hillside and Mozal smelters had not been incorporated into Eskom’s current planning.

Qhena agrees, stating, philosophically, that "times change" and that the business case for the Coega smelter has, therefore, been aligned to South Africa’s more constrained electricity position. "For us to be satisfied to proceed, we have to base the business plan on what Eskom is providing. If we base it on contracts of the past, it would not be realistic," Qhena concludes.

But there are still lingering doubts about the wisdom of pursuing an energy-heavy project, such as the aluminium smelter, given South Africa’s current generation constraints. Some feel it to be inappropriate, and suggest that it would be more beneficial if this scarce, well-costed resource were directed in support of other economic endeavours.

Industrial-policy expert Dr Zavareh Rustomjee, former Department of Trade and Industry DG, believes the benefits still outweigh the costs to the economy as a whole, and more particularly to the Eastern Cape economy.

However, he says its developmental impact would be premised on Alcan’s offering the equivalent of an export-parity price to downstream aluminium users, which, he said, was reportedly also a precondition to its receiving the favourable power tariff from Eskom.

A similar demand was made of Saldanha Steel when it received the 37E accelerated-depreciation incentive, but then owner Iscor, now Mittal Steel, reneged and priced on the basis of import parity. "I believe the net effect of a new aluminium smelter can be positive, provided that comparative advantages is translated through an export-parity price commitment," Rustomjee explains.

Hydro Reach Agreement to Close Aluminium Plant in Stade

Azom.com April 7th, 2006

Hydro and the works council for the aluminium plant in Stade have reached an agreement on the terms and time of the closure of the plant, as decided by Hydros board of directors in June 2005.

The aluminium plant in Stade has 410 employees and a production capacity of approximately 70,000 tonnes of primary aluminium.

The agreement with the works council includes a frame for social plan and business development activity. Hydro will also grant an additional premium payment related to operational performance in the remaining working time of the Stade plant.

The agreement enables the company to schedule and carry out the practical shutdown by the end of December 2006.

The value of the social plan package is estimated at EUR 38 million, of which most is expected to be charged in second quarter 2006. To balance new German regulations, the figure is somewhat higher than previously estimated.

Hydro decided in June 2005 to close down the aluminium plant in Stade with all its operations - carbon anode production, electrolysis and casthouse for extrusion ingot - due to high power prices in Germany.

RusAl Capacity at Bratsk

The Moscow Times, Russia Monday, April 10, 2006. Issue 3389. Page 6.

IRKUTSK --RusAl plans to increase annual capacity at its Bratsk smelter by a further 150,000 tons, the company's deputy general director, Alexander Livshits, said on Friday.

Bratsk increased output of aluminum to 973,596 tons in 2005 -- above its nameplate annual capacity of 955,000 -- from 955,273 in 2004. (Reuters)

Lam Dong bauxite project underway

Viet Nam News, Vietnam - (08-04-2006)

HA NOI — The nation’s largest mining company, Viet Nam Mineral Corporation (VIMICO), yesterday started construction work on its Lam Dong bauxite mining and processing project, the first of this kind in Viet Nam, according to company officials.

VIMICO said the VND7.8 trillion (US$493 million) project, located in the central province of Lam Dong, is to have an annual production capacity of 1.7 million tonnes of bauxite and 600,000 tonnes of alumina. At that rate the complex, scheduled to be operational in 2009, has sufficient mineral reserves to operate for more than a century, it added.

The government earlier this year approved VIMICO’s application to be the sole investor in the massive project. The company plans to finance the scheme with loans of VND5.5 trillion from international banks, VND1.2 trillion from the State Investment and Development Fund, and VND500 billion from the Fund for Equitisation of State-owned Enterprises.

According to sources close to the corporation, Japanese Mitsui Group and Belgium’s Fortis Bank are considering extending loans for the project. The Viet Nam Bank for Investment and Development (BIDV) last month announced it too was considering granting loans through the Viet Nam Investment Fund (VIF), recently established by BIDV and US-based Viet Nam Partners LLC.

According to the Ministry of Industry, the world’s four biggest alumina importers – the US, Canada, Russia and China – import a combined total of 14 million tonnes of the mineral each year to be refined into aluminium. Output from the Lam Dong project would be largely earmarked for export to these countries, the ministry said.

Geological surveys reveal Viet Nam has reserves of more than 8 billion tonnes of bauxite, used in alumina production, ranking it fourth behind only Australia, Guinea and Brazil.

The northern provinces of Cao Bang and Lang Son contain 120 million tonnes of bauxite deposits while central highland provinces have an estimated 7.9 billion tonnes, none of which has been exploited to date. — VNS

Q & A Crisis, what crisis?

Trinidad & Tobago Express, Trinidad and Tobago Sunday, April 9th 2006

http://www.trinidadexpress.com/index.pl/article_news?id149801171

Between them, Alcoa smelter headmen Wade Hughes and Randy Overbey talked to virtually every arm of media last week; as always, we tried to cover ground others mightn't.

Q: The fears of those opposing your smelter are unwarranted?

A: People have a right to be concerned. All I'm saying is that the public health issues raised largely in the Press claiming the kind of very negative things happening to people and the environment, those are unwarranted.

You've encountered this before?

We have. I'll use Portland, Australia as an outstanding example, where headlines looked very much like headlines recently here, yet 20- plus years later, the situation is different. It truly is a smelter- in-the-park, we truly do have the support of the community.

Randy Overbey...chairperson of Alcoa's worldwide climate change strategy team.

Why would so many people all over the world have the same unwarranted objections?

Part of it is lack of information. People react to what they're told without knowing whether it's accurate or not and in this case people have been given information that is not representative of the smelter facility we would build and operate here.

You rely on your own studies of your own smelters?

Yes, we have information prepared and ready to go we are excited about sharing with the people of Cap-de-Ville and Chatam.

Studies paid for by Alcoa?

Alcoa paid for a recent (30-year) study in Australia but it was done by two leading universities and overseen by an independent panel to ensure their work really was independent. Those studies affirmed no public health concerns in the area of cancer and heart disease and the kinds of things that have been said here that would be above the expected baseline in the general public. So, yes, we paid for it but that can be viewed as positive: Alcoa cares enough about getting the information and understanding the possible impacts and we're prepared to look at the results whether positive or negative. A study in Italy indicated a slight increase in pancreatic cancer risk - Alcoa paid for and is continuing to support that study to be sure we get the best understanding. If there are mitigating steps we can take, we're interested in knowing what those are.

Can you pay someone's salary for 20 years and genuinely expect them not to try to please you?

I really do trust major competent universities to be independent.

You put a good spin on your paying fines for pollution?

Things do go wrong in industrial plants from time to time. Sometimes those are mistakes made by individuals, breakdowns even in well-designed equipment that result in excursions we'd prefer not to have. Sometimes those result in penalties which we have to pay. I'm not trying to hide that at all. I think it's characteristic of almost every manufacturing company to have to deal with some level of that.

Our objective is to have zero non-compliance events. Are we perfect on that score? Not yet but we've made dramatic progress.

And so you should; because your industry is by its nature dangerous?

I don't know I'd say by its nature it's dangerous. Certainly any manufacturing setting, (even) driving to work each day can be a dangerous event. Those potential dangers are mitigated by good operation, design, training, safety procedures and containing those things that could otherwise be harmful.

People opposed to the smelter cite a bunch of scientific studies, too - what's wrong with their science?

We'd like to sit down and see the work to which they refer and share with them the work we're using. We'll compare notes on that. The body of data we're using, which we think is scientifically sound, indicates that for a modern smelter operated in a modern way, there would be no public health impacts from that. If you choose to go to a website and put in certain words, you can gather up negative information. You could easily say, as with the case of the pancreatic cancer I've just shared - just one smelter, never repeated anywhere else in the world - you could scrape that up and say, "Aha! Aluminum production causes cancer!" And you could stop there and never consider that the indicators are very slight, could be confounded by other factors in the region and that study has never been repeated anywhere.

Are you saying that none of the objections raised are on good scientific ground?

Their objections don't match the scientific ground we have, is what I would say. I'm confident the information we're using is accurate.

Do you accept global warming?

(Smiling broadly) I'm the chairperson of Alcoa's worldwide climate change strategy team. As a company, we have seen enough evidence to move past the debate whether climate change could be real or not on to action. Since 1990, we have reduced our absolute volumes of greenhouse gas emissions by 26 per cent. That is an outstanding achievement if you compare it to Kyoto protocols.

How much carbon dioxide is produced by a 340,000-tonne smelter?

Quite honestly, I'd have to go look at that data; I don't have that at the tip of my fingers.

Does 1.7 tonnes of CO2 to every tonne of aluminum sound about right?

I'd have to look at my data to make sure.

Ballpark? I'd have to Call it even, then, one-to-one? (Chuckling) I'd have to take a quick look at my data to give you a direct answer.

We're talking about a minimum of 340,000 tonnes of carbon dioxide every year - and it's really more like four times that in effect?

I'd agree with you a smelter will produce CO2 emissions and our company's position on that is, global warming is truly a global issue requiring a global response. It's not a point issue. I'd put this facility in the context of our overall direction where we have reduced our greenhouse gases worldwide. Do I think the CO2 emissions will affect the health of the people who live and work in and around that smelter? I don't.

Yet you chair a committee working to reduce Alcoa's emissions?

Absolutely!

So you're not concerned about CO2 as a public health issue in the peninsula, but you're terribly concerned about them globally?

I'm not concerned that CO2 emissions will cause a public health risk for people who live around the facility or anywhere in Trinidad. I am concerned about CO2 emissions in general as a society and as a company adding up to where they affect our environment I want to assure you that Alcoa (has) a people value that we stand behind and we want in every way to talk openly.

But you've refused live television debate opportunities; that sounds ?

(Finishing question) Like we're dodging an issue. And that's not our intent at all. We have some data we'd like to share and I'm concerned that a live TV debate (might not be) a constructive forum for actually getting that done. If we can talk with people, I'm not ruling out, down the road, a debate. I'm just saying I want us to have a chance in a constructive setting to put forth the information we think would make a difference.

Do you not think you were given that opportunity amply in the last few days?

No, I don't at all.

You've been on every talk show, had Press releases, Press conferences, a page and a half of rebuttal in the Sunday Express?

I don't feel that's enough. I think there's a very big difference between saying something on television or radio, even having it printed in the Press and the opportunity to sit down with an individual or group across a table and just talk about their concerns and our project. I'm not comfortable that a live TV debate would fit that constructive environment?

Is it that you wouldn't have control?

That's right. I don't want to just grab on to your words but a live TV debate strikes me as confrontational and argumentative.

Is it not attractive that both sides could prove and refute?

I'm not ruling it out, just saying we're not prepared or willing to do that until we've had the opportunity to speak with the people in the region who are potentially affected.

You talk about smelter-in-a-park - is there no irony there?

I really don't think there is because we have smelters in parks. In San Luis in Brasil, an island about one-fourth the size of Trinidad, (with a population of) roughly a million, we have a smelter that is larger than the one we would build here. There we operate a highly successful smelter in the park. In and around the smelter are extensive green spaces, agriculture, horticulture We hope some community members will be able to join us for a trip to San Luis so they can see firsthand what a smelter like we have in mind really looks like, how the park around it can embrace agriculture and families On the day we signed the MoU in May 2004, we had a public meeting. We've had 25 meetings in Bonasse, Cedros.

So after you've done all this, why do people remain so opposed?

I think we got off to a very beneficial start but for whatever reason, that is no longer available to us. We sit here desiring direct communication with the people but there's something between us and them stopping that from happening.

Might it be the appearance that you really aren't open to the other side's contention that you really are quite a dangerous operation?

We are prepared to sit in a constructive environment about those concerns.

Don't you feel a bit like tobacco companies saying there are all sorts of studies showing no link between smoking and cancer?

I don't share that concern because I've been with Alcoa 38 years and (can say) when we see any hint of a health problem for our employees or the public, we immediately want to know what we can to do to mitigate it.

Maybe I framed the question inelegantly; I'm asking whether, by not having an open debate, you're not putting yourself in the position where people will see you as a tobacco company denying the cancer risk?

And I've tried to say we haven't ruled out that debate that some people seem to desire. There are some baseline things we want to communicate before we do that.

RusAl to Take Over Guinea Operations

The Moscow Times, Russia Tuesday, April 11, 2006. Issue 3390. Page 7

Russian Aluminum, the world's third-largest producer of the metal, will spend $300 million to gain full control of its operations in Guinea, which has the world's biggest reserves of the ore used to make the metal, the company said Monday.

Under the deal with the Guinea government, RusAl will buy 100 percent of Friguia, a local bauxite and alumina producer, and acquire the 15 percent it did not already own in Alumina Company of Guinea, which manages Friguia's operations, RusAl said in a statement.

Until now, RusAl has been operating the Friguia mine through a long-term concession agreement.

The deal comes as part of RusAl's $8 billion metals and energy expansion plan, as the company looks to leapfrog Pittsburg-based Alcoa and Montreal-based Alcan, the world's top two aluminum producers. RusAl is Russia's leading aluminum producer, controlled by billionaire Oleg Deripaska.

"The value of the transaction, including investments in the modernization of the complex and raising its capacity, is estimated at over $300 million in the next three years," RusAl spokeswoman Vera Kurochkina said.

The West African country agreed to let RusAl obtain full control of Friguia under the condition that the Russian producer doubles the capacity of the plant.

At current capacity, the plant annually produces 600,000 tons of alumina and 2.8 million tons of bauxite per year. Bauxite is used to produce alumina, a semi-product that is smelted to make aluminum.

Kurochkina said RusAl could double the existing capacities by 2009.

In the last two months RusAl's acquisitions have included Nigeria's Alscon aluminum smelter, Guyana's bauxite producer Aroima Mining, and a Chinese cathode blocks plant in Liangshi, Northeast China.

RusAl also manages mining company Compagnie des Bauxites de Kindia on the basis of a 25-year concession agreement with the Guinean government.

Rusal Implements Two Major Projects - Constructs Taishet Aluminum Plant and Modernizes Bratsk Aluminum Plant

Financial Information Service(Registration), Russia 10.04.06

IRKUTSK, April 10. /FIS/. Rusal's Deputy Director General shared the company's short-term plans in the Irkutsk region. The plans include the construction of Taishet Aluminum Plant (under consideration there are two options as regards the capacities - on the basis of 600 thousand tons of aluminum per annum). The project is supposed to create about 1,700 extra jobs and RUR1.5 billion of extra taxes. Rusal's second project, the modernization of Bratsk Aluminum Plant is to be implemented in seven years. Twice as much is to be invested in the Bratsk plant modernization project as compared with the modernization of Krasnoyarsk Aluminum Plant. As a result, the Bratsk plant's output will grow by 150 thousand tons and the plant will implement all necessary ecological safety procedures of aluminum production.

Chinese workers for Alutrint smelter plant

Trinidad & Tobago Express, Trinidad and Tobago Tuesday, April 11th 2006

-Anna Ramdass

Consideration is being given to import expert Chinese workers to operate the Alutrint aluminium smelter.

This was revealed yesterday by Clement James, Alutrint's corporate communications manager, at the Joint Select Committee meeting at the Red House to enquire into the establishment of the proposed Alcoa smelter plant.

The question was raised by Opposition Senator Carolyn Seepersad-Bachan who asked if there was a plan to import 1000 Chinese labourers to work on the plant.

James said there is a technical agreement between Alcoa and a Chinese based company CMEC and admitted some consideration us being given to bringing in expert Chinese technical staff.

He explained that the expertise that is needed to run the plant is not available in this country and added that there are also talks to establish a training centre where people can be trained in this field.

"We are hoping to have a training centre built in La Brea," he said.

"In Trinidad and Tobago there isn't a range of skills of people to handle jobs like that, so we are looking at bring in the Chinese to develop and train," he explained.

James said the smelter plant is new to this country as well as the technology it utlises. He said it is a "prebake technology" that uses a high amount of electricity and is supposed to be a much cleaner process and less harmful to the environment.

When questioned as to the amount of local persons to be employed at the plant, David Small, Director of the policy performance management unit at the Energy Ministry, said a total of 880 persons will gain permanent employment.

He said this is a combination of the jobs that will derive from the smelter, the run mill and the wire and cable plant.

AIH renews Queensland Alumina contract

Seven.com.au, Australia - 10/04/06

Alinta Infrastructure Holdings (AIH) has renewed its gas transport contract with Queensland Alumina Ltd, locking it in for another 10 years.

Queensland Alumina receives gas through AIH's Queensland Gas Pipeline (QGP) to run the world's biggest aluminium refinery at Gladstone in central Queensland.

The new contract, which comes into effect on July 1, is for the transport of at least 13 petajoules a year until 2016 and represents a slight increase in both gas throughput and revenue compared to forecasts.

"The execution of this significant contract, whilst consistent with our expectations as previously expressed to the market, further confirms the importance of the QGP to the Queensland gas market and its role in supporting industry," AIH chief executive John Cahill said.

Mr Cahill said this and other recently signed contracts meant AIH was confident it would deliver the distributions it had forecast for 2006 and 2007.

Queensland Alumina is a joint venture between Alcan, Comalco and Rusal.

The announcement of the new contract came after the market had closed with AIH down three cents to $1.84.

Leader praises Alcoa's planned smelter, though some are concerned

Fort Worth Star Telegram, TX Tue, Apr. 11, 2006

ADAM RANEY, Associated Press

PORT-OF-SPAIN, Trinidad - Alcoa Inc.'s proposed $1.5 billion aluminum smelter will boost the economy and be environmentally safe, Trinidad's prime minister said Tuesday.

The Pittsburgh-based company's modern smelter technology will keep emissions of fluorides and other pollutants at levels safe for people and wildlife, Prime Minister Patrick Manning said at the annual general meeting of the American Chamber of Commerce of Trinidad and Tobago.

Environmental lobbyist Petra Bridgemohan challenged Manning's comments, saying he was not a specialist in the field.

"It's not new technology and the emissions are no less risky to the public health," Bridgemohan said.

The smelter, planned for Cap-de-Ville in southwest Trinidad, will produce 375,888 tons of aluminum annually and employ 750 to 800 workers. The company has signed a preliminary deal with the government to own and operate the smelter for 30 years.

The Alcoa project was the second proposed aluminum smelter for the two-island Caribbean nation of 1.3 million people.

Trinidad's government has also signed on with Venezuelan company Sural to build a proposed aluminum smelter in La Brea, in southern Trinidad. The holding company would be called Alutrint, with the Trinidadian government controlling 60 percent and Sural 40 percent.

The proposed smelters were awaiting final approval from the country's environmental regulator, said Manning. He added he was confident both would be built.

"If we want to build a modern industrial state, we must develop iron, steel and aluminum technology," he said.

Alcoa, the world's largest aluminum producer, has said it hopes to start construction sometime next year.

The project, which includes building a power plant at the smelter site that would use 5 percent of Trinidad's natural gas, has faced some opposition from area residents who say it will destroy their community.

Trinidad and Tobago is one of the wealthiest countries in the Caribbean, relying on oil and gas for more than 25 percent of its gross domestic product.

EMA boss talks tough - We will enforce TT green laws

Trinidad News, Trinidad and Tobago April 11 2006

NEWSDAY REPORTER Tuesday,

THE Environment Management Authority (EMA) flexed its muscles during a Joint Select Committee meeting in Parliament yesterday, when the authority’s CEO Dr David Mc Intosh, declared that no smelter will be built in the country, unless the companies involved — ALCOA and Alutrint — adhere to local environmental standards.

Mc Intosh made this bold statement in the presence of representatives from Alutrint, which has a 60 percent stake by government and which wants to set up the smaller of two smelters in the country. No representative of ALCOA was present yesterday.

Officials from the Energy Ministry, National Gas Company and the National Energy Corporation, were part of the Joint Select Committee meeting on the proposed aluminium smelters, which was chaired by Independent Senator Mary King.

Mc Intosh’s announcement came after Alutrint’s communications manager Clement James said the pre-baked process used by third generation smelters, which the company plans to use in TT, was environmentally safer since the flouride emissions were less.

But the EMA CEO said: "whatever kind of bake, whether pre-baked or post-baked, if the companies do not meet our environmental standards, no Certificate of Environmental Clearance (CEC) will be granted. At the end of the day, the CEC rules."

Noting that public consultation will help decide if the companies get CECs, Mc Intosh said the EMA has already put out Alutrint’s Environmental Impact Assessment or EIA.

"The only application before us is Alutrint’s. ALCOA’s application for a CEC was incomplete and the EMA has returned it to them." He said the EIA tells what would be discharged from the smelter, a solid waste containing hazardous substances like cyanide and silicon, air pollutants like flouride, and liquid waste. It also tells how the company plans to dispose of them.

"We would expect any proposed smelter in the country to meet our standards, and if they don’t, no CEC can be issued," Mc Intosh said.

He further added, "I’m sure the proponents are fully aware of the standards our country has set to protect its citizens and its flora and fauna."

Mc Intosh said Alutrint’s EIA, which is out for public comment and would go until April 28, is a very transparent process and he’s encouraging citizens to look at it.

He said hydrogen flouride in high concentrations, can negatively affect cattle, and cause a brittle bone disease in humans.

But while the EMA has air and water pollution standards, legislation is yet to be enacted to give them teeth, the EMA CEO said.

"The EMA has submitted strategic plans to Cabinet concerning these rules and we expect them to be passed so we can begin to deal with existing plants," he said.

Alcoa labor talks to focus on health costs

Pittsburgh Post Gazette, PA - Thursday, April 13, 2006

Contract covering USW workers, 20 percent of firm's U.S. work force, expires May 31

By Len Boselovic, Pittsburgh Post-Gazette

For months, Alcoa Chairman and Chief Executive Officer Alain Belda has been preaching that 9,000 workers represented by the United Steelworkers union have to start paying for their health insurance -- just like Alcoa's 36,000 other U.S. employees.

The issue comes to a head May 31 when a five-year contract covering those USW workers, 20 percent of Alcoa's U.S. work force, expires.

Although there have been ongoing informal discussions between the company and the union, negotiations aren't scheduled to begin until May 18 in St. Louis. In addition to concessions on health care, Alcoa wants newly hired union workers to be covered by an enhanced 401(k) retirement plan instead of a pension plan. The company recently instituted that change for most newly hired salaried U.S. workers.

The negotiations come against a backdrop of robust demand and pricing in the industry. On Monday, Alcoa reported record quarterly earnings of $608 million and said it expected the market to remain strong.

Normally, bountiful profits give unions negotiating leverage because their employer wants to capitalize on market conditions. Some analysts say that may not be the case at Alcoa, which disclosed this week that it was building inventories in case of a strike. They speculate the aluminum producer could offset losses from strike-bound plants with production at other facilities. Moreover, USW negotiators have to be mindful of Alcoa's aggressive expansion of capacity overseas.

"I don't think they're going to strike," said John Frankola of Vista Investment Management, a Pittsburgh firm that owns Alcoa shares. "I think most employees know this is a global marketplace and they are competing with workers in Brazil, Iceland and China."

Charles Bradford of Bradford Research in New York believes Alcoa's objective is to make employees use health care more wisely by having to pay for a portion of it.

"If you've got a deductible, you'd use health care less," Mr. Bradford said. "I think all the unions now recognize the more they push on health care, the money's got to come out somewhere else."

Alcoa has wrested health-care concessions in other recent labor negotiations, including contracts covering workers represented by the USW. Mr. Belda told analysts in January that Alcoa's U.S. workers who contribute to health-care benefits pay more than $200 monthly for family coverage.

On Monday, he re-emphasized the importance of controlling health-care costs, telling analysts, "I will not mortgage the future of the company by having a runaway cost escalator.

"We're never looking for a confrontation, but we must be and will be prepared," Mr. Belda said.

The company and union tried to get a head start on contract talks last year while they negotiated wages for the fifth year of the current contract. Efforts foundered on both fronts.

Not only couldn't they reach agreement on a new contract, but they also were deadlocked on the wage proposal. Alcoa wanted to freeze wages because of rising health-care costs while the union asked for a 2.5 percent pay increase. An arbitrator sided with the union in August.

Meanwhile, the USW is challenging Alcoa's January decision to start charging health insurance premiums to 2,500 to 3,000 retirees and spouses of retirees who worked at 15 plants that have been sold or closed. The union filed a class-action lawsuit in federal court in Knoxville, Tenn., seeking to overturn the decision.

The monthly premium for family coverage is more than $400, USW spokesman Gerald Dickie said. Retirees and spouses at plants Alcoa still operates are not being charged a premium, he said.

"The company could not make this unilateral change," Mr. Dickie said.

Alcoa spokesman Kevin Lowery said the premiums were imposed under provisions to cap retiree health- care costs that the USW agreed to in 1993 and again in 1996 and 2001. The agreement allowed Alcoa to begin charging premiums this year for retirees who worked at plants that were closed or sold, he said.

"It's really hard to have missed this agreement," Mr. Lowery said.

The 11 days between the start of negotiations and the expiration of the current contract doesn't leave much time for Alcoa and the USW to come to terms. However, S&T Wealth Management portfolio manager Andrew Seibert said that even though Alcoa could probably handle a strike, "I don't think they want to do that." He's expecting that talks will go well.

"Everybody loses if there's a strike," said Mr. Seibert, who owns Alcoa shares.

Ghana to sign MCA compact on July 28

African News Dimension, South Africa April 13, 2006

By Andnetwork .com

Ghana is to draw a substantial development assistance of about 500 million dollars to boost its economy within the next three months from the US Millennium Challenge Account (MCA).

This followed a favourable report from the Millennium Challenge Corporation (MCC), the US body charged with the administration of the Fund and the Ghanaian Team negotiating the Compact.

The two are set to sign the document on July 28, Mr John Hewko, Vice President of the MCC, told President John Agyekum Kufuor on Tuesday.

This was when he led a six-member delegation to brief President Kufuor who is on a three-day working visit to the US on the status of Ghana's Compact Proposal.

When signed, the assistance would be the biggest so far and is expected to impact on the lives of more than two million rural people in 23 districts of Ghana.

Mr Hewko noted that the funds would give a massive boost to Ghana's economy and said it was for this reason that the MCA Development Authority had been established.

The Authority, he said, would report directly to his office to ensure effective management of the Funds.

President Kufuor said the next six weeks would be crucial and asked the two sides to work diligently to meet the set target date. Ghana's Compact Proposal envisages radical transformation of the country's agriculture through the provision of roads, access to credit, irrigation and other essential infrastructure to help reduce rural poverty.

The MCA is the US' reward for just rule and sound policy decisions, which promote economic growth and reduce poverty.

President Kufuor later received a delegation of ALCAN, a Canadian Bauxite and Aluminium Company that had expressed interest in investing nearly one billion dollars in Ghana's bauxite industry.

Mr Jacynthe Cote, President and CEO, who led the delegation said they were determined to set up a mine and refinery facility in the country.

ALCAN is the third International industry giant to express desire and commitment to take a stake in the bauxite and aluminium industry in Ghana.

President Kufuor asked the company to proceed with dispatch saying, "I want to see the sector roll out as soon as possible." Ghana has huge bauxite deposits at Kyebi in the Eastern Region and Nyinahin in the Ashanti Region.

Source: Ghana Web

RusAl Q1 Output Rises

The Moscow Times, Russia Friday, April 14, 2006. Page 6.

Russian Aluminum raised first-quarter output after buying smelters and mines under plans to become the world's biggest producer of the metal by 2013.

Production of primary aluminum, used in everything from airplanes to beverage cans, rose 2.3 percent to 684,153 tons, the company said Thursday in a statement.

Output of intermediate material alumina jumped 20.5 percent to 964,454 tons and production of raw material bauxite increased 30 percent to 1.55 million tons. (Bloomberg)

Carbon prices hit record on worries of permits curb

Shanghai Daily, China 2006-04-14

Mathew Carr

EMISSIONS prices traded near a record high in Europe on expectations that governments will force greater reductions in output of carbon dioxide after 2007.

The supply of permits is restricted because governments including Poland and Greece have yet to establish a system for tracking ownership of the allowances, limiting sales. The prices of carbon dioxide permits have jumped as much as 54 percent this year as drought in Spain and high natural gas costs forced utilities to burn more coal, increasing emissions.

"The sellers are not in the market," Charlotte Streck, director of Climate Focus in Rotterdam, said on Wednesday in an interview. Climate Focus is an adviser on policies designed to curb greenhouse gases, blamed by some scientists for global warming. Clients include Endesa SA, Spain's largest power utility.

European Union carbon-dioxide allowances for December 2006 traded at 29.30 euros (US$35.42) a metric ton on the European Climate Exchange in Amsterdam at 2:32pm local time. That's 75 cents shy of Wednesday's record of 30.05 euros a ton. Permits for 2007 rose to a record 30.70 euros on Wednesday, said broker Spectron Group Plc.

The emissions trading system has helped push power prices across the region to records, increasing costs for companies that consume a lot of electricity. That includes Alcoa Inc, the world's largest aluminum producer, which has factories in Europe. German power prices for next year rose to a record 59.35 euros a megawatt hour this week, according to broker ICAP.

Factories and power stations in the EU can use allowances granted by governments or credits from projects in developing nations, known as certified emission reductions, to comply with the EU law.

The CERs must be approved by a United Nations board and must cut emissions by replacing hydrocarbon-fueled power stations with alternatives such as windfarms and hydro regimes.

Australian aluminum firm gets nod to build Vietnam plant

Thanh Nien Daily, Vietnam Friday, April 14, 2006 13:29:20

Australia’s Alcan Group, the world’s second largest aluminum producer, has got a license to build a construction components-aluminum smelter complex in central Vietnam.

The US$200 million complex will be built in the Chan May-Lang Co Economic Zone (EZ) in Thua Thien-Hue Province.

In the first stage this year the export-oriented construction components plant, costing $20 million, will be built and it is expected the first batch of products will be shipped in the next two months.

Alcan has become the fist company to set up shop in the EZ which expects to grow into a trade hub and an international standard resort.

Source: Tuoi Tre – Translated by Ha Viet

Azerbaijan Aluminum to double output to 60,000 tonnes by 2008

TMCnet April 15, 2006 (Interfax News Agency Via Thomson Dialog NewsEdge)

BAKU. April 14 (Interfax) - Azerbaijan Aluminum plans to increase aluminum production at its Sumgait smelter to 60,000 tonnes by 2008, company production director Jamil Safarov said on Wednesday.

"Production amounted to 29,000 tonnes in 2005, this year we are forecasting 30,000 tonnes in 2006, and by 2008 we intend to double this figure," he said.

Safarov said the company has drafted a plan of action to expand production. "We plan to restore the operation of two pot houses, which will enable us to double production. This will create 480 new jobs," he said.

Work on restoring the pot houses has already begun. "This work will require a year. Investment will initially be provided by the government, but investors might be attracted in future," he said, without specifying the cost of the project.

Safarov also said the company's Ganja alumina refinery is expected to produce 450,000 tonnes this year. "We get 5,000 tonnes of alumina every month, and the rest is exported," he said.

Azerbaijan Aluminum comprises the Ganja alumina refinery, Sumgait smelter and Zaglik alunite quarry. Azerbaijan put these enterprises into Fondel Metal Participations BV's trusteeship for 25 years in 2001. The Dutch company pledged to invest $1 billion but has so far invested just $50 million. It had planned to build a 100,000-tpy smelter at a cost of $250 million-$300 million.

But at the beginning of 2006 the government cancelled the trusteeship contract with Fondel Metal. vp

GOIC issues a report on aluminum industry in GCC

AME Info, United Arab Emirates April 15 - 2006

Qatar: Saturday, April 15 - 2006 at 12:12 GMT+4

Gulf Organization for Industrial Consulting (GOIC) expected that the share of GCC member states in world production of primary aluminum will be 10% of the total world production in 2010.

In a report lately issued by GOIC it is stated that primary aluminum production has steadily increased during the last three decades from 0.9% in 1975 to 4.9% in 2005. Also the report says that it is expected that a quantum jump is likely to take place during the next decade raising GCC share to around 10% by 2010 with the expansion of existing smelters and commissioning of new smelters, thus establishing the GCC region as a major player in global aluminum industry.

The report also clarified that the capacity build up is likely to exceed 3.75 MPTA by 2010 when the new smelters are commissioned in Oman, Saudi Arabia and Qatar, and when the planned expansion program of ALBA with installation of the sixth pot line project is implemented. The capacity will further increase if the long-term plan of DUBAL is realized to achieve 1.5 Mt/yr by 2011.

The report also added: ALBA's annual production of metal was 525,000 Tons and 732,000 Tons in 2004 and 2005, respectively. 100% of slabs are consumed by GARMCO for conversion to flat products. 99.7% of aluminum ingots are exported to international markets. While in DUBAL the production was 600,000 TPA of aluminum in 2004.

Being located in Dubai, DUBAL has the advantage of expediting shipments to markets in the Far East (Japan, Korea, Taiwan and China), the ASEAN region, as well as Europe and USA. Furthermore, it also reported that plans are ahead for establishing new smelters in Oman, Saudi Arabia and Qatar. Oman is having a long-standing plan for setting up an aluminum smelter in Sohar. As a joint venture of Oman Oil Company, the project is executed with an initial capacity of 330,000 TPA, and it is scheduled to double its capacity to 660,000 TPA by 2010. In Saudi Arabia, there is a good reserve of about 126 Mt of bauxite containing 57.5% alumina. Maaden Co. has decided to build an aluminum smelter within a project that will comprise the mining project in the north, and a bauxite refiner and an aluminum smelter on the east coast. The project is estimated to cost US D 302 billion with a capacity of 600,000 TPA of aluminum. Yet, due to lack of railroad that can carry bauxite from the north to the east coast, the project may not be feasible till a rail link is established. The indicative timeframe is 2008-2009.

As far as Qatar is concerned, the report says, that the indicative timeframe is 2008/2009. As for Qatar, the proposed smelter project is to be implemented by a joint venture company of QP and Hydro, and to be based on Hydro reduction technology. The smelter will be located in Mesaieed Industrial Area, with a proposed capacity of 570,000 TPA, and the indicative timeframe for commissioning is 2009.

In addition, the report talks about the semi-finished aluminum products, and that the GCC states made notable progress in the production of rolled and extruded products. They have almost attained self-sufficiency. For extruded products, they meet regional requirements and export 40% of the production to international markets. More than 80% of cold rolled products are exported. Yet, they still import 55,000 TPA of rolled products, mostly foil and coated flat products. UAE comes first in aluminum secondary metal product firms (80), followed by Saudi Arabia (5), Bahrain (2), and one each in Kuwait, Oman and Qatar. As for rolling mills, there are two establishments in the GCC states: GARMCO in Bahrain and Profiles RHF LLC in Sharjah, UAE. GARMCO, with a production capacity of 162,000 TPA of cold rolled products and 20,000 TPA of foils, produced around 138,000 TPA of cold rolled products in 2004, and 150,000 tons in 2005, as well as 15,000 tons of foils in 2004.

The Profiles RHF LLC of Sharjah operated in July 2000 with a capacity of 20,000 TPA of rolled products and 5,000 TPA of foils. The plant has a plan to increase cold rolling capacity to 65,000 TPA.

Due to the expansion in the construction sector, several extrusion plants have been set up all over GCC states. There are 22 major extrusion plants in the region with a total production capacity of 300,000 TPA, and the overall capacity utilization exceeds 88%. Most of the plants have anodizing, powder coating and painting facilities. About 60% of the extruded products are used in GCC and the balance is exported to international markets.

The report also says that Cables are manufactured in Midal Cables which started production in 1977 as a joint venture between Inter Steel Bahrain and Olex Cables Australia. The major product lines are aluminum and aluminum alloy conductor and wire, metal form products, and aluminum and aluminum alloy redraw rod and wire. The metal form products are manufactured by Conform extrusion technology for both simple and complex shapes in solid, hollow and sheet forms of aluminum and aluminum alloy. 60% of Medal's products are exported to overseas markets in 57 countries. A number of downstream industries have come up to draw the cast aluminum rod into wires.

Aluminum powder is produced in Bahrain Atomization International Company set up in 1973 as a joint venture between the Government of Bahrain and Breton Investments Limited. The plant capacity, which is fully utilized, is 6,500 TPA. Almost 100% of the production is exported.

Aluminum wheels are produced by Aluwheel Company in Bahrain. Several models of alloy wheels blank castings and wheel alloy ingots are produced from the liquid aluminum supplied by ALBA. The production capacity is around 15,000 TPA of which 20% is for blank wheels and 80% for alloy ingots. 100% of the products are exported.

The number of firms for aluminum finished product industries amounts to 496 with investments exceeding US D 950 millions, and labor force of more than 24,000. Of these industries, 16 are engaged in coating, 8 in barrel making, 12 in foil production and more than 400 in fabricated items such as doors and windows, to meet the requirements of the booming construction sector.

The average imports and exports of aluminum products in the GCC states for the last four years, the report says, amount to 407,490 TPA and 1,104,970 TPA, respectively. Thus, the GCC region as a whole is a net exporter of aluminum products. Bahrain and UAE are the net exporters, and all other states are net importers.

The report also clarifies that the environmental aspects, both the smelters of ALBA and DUBAL are certified ISO 14000 companies, and have shown considerable concern for the environment. ALBA has spent a huge sum of US D 310 millions towards improvement in environment. DUBAL has also spent over US D 120 millions in environment management plan during the last two expansion programs. Also, there has been considerable progress in downward industries for semi-finished rolled and extruded products, and powder in the GCC states. The opportunities exist for setting up further downstream facilities for production of semi-finished products as well as parts and components for development of engineering industries.

Qatar to build largest aluminium plant in the world

Newindpress (subscription), India Sunday April 16 2006 00:00 IST

ANI

NICOSIA: Qatar's Energy and Industry Minister Abdallah al -Attiyah and the Chief Executive Officer of Norsk Hydro Eivind Reiten have signed an agreement in Doha to form a joint venture to develop, construct and operate the Qatalum aluminium plant in Qatar.

Production at the plant will begin sometime in 2009, while its full production capacity is to be reached a year later.

The Qatalum joint venture company will be established to build and operate the primary aluminium plant, which comprises a smelter having an initial capacity of 585,000 tons of primary aluminium per year, a cast house, a carbon plant and a dedicated gas power plant that will have an initial capacity of 1,350 mw.

The power plant will provide energy to the project, but at the same time it will serve the national grid of Qatar.

Qatalum will help improve Norsk Hydro's relative cost position in the production of primary aluminium.

GG says Jamaica will continue holding its own in international negotiations

Observer Reporter Saturday, April 15, 2006

Jamaica will continue to press for more favourable terms of trade and investment for small economies. GOVERNOR General Professor Kenneth Hall says Jamaica will continue to be an effective participant in international trade negotiating forums, such as the World Trade Organisation (WTO) and the African, Caribbean and Pacific (ACP) states/European Union (UN).

Delivering the Throne Speech in Parliament on Wednesday to signal the beginning of the 2006/07 financial year, the governor general pointed out that in the ongoing Doha Round negotiations "Jamaica will continue to press, in conjunction with other developing states, for more favourable terms of trade and investment for small economies".

He emphasised that as it related to developments in Jamaica's sugar and banana industries, such developments "will fully engage us so as to ensure that the best interests of our farmers and other persons involved in these industries are adequately protected to the fullest extent possible".

Giving details of the programmes and policies to be pursued by the Government in 2006/07, the governor general said that in relation to economic co-operation with CARICOM partners, strengthening the linkage with sister islands in the region would be "a matter of high priority".

He said the subject of energy and energy security would become an integral part of Jamaica's foreign policy, both regionally and on a global scale.

The governor general informed that on a bilateral basis, the Jamaican government should soon conclude an energy/alumina/aluminium co-operation agreement with the Republic of Trinidad and Tobago.

Other foreign relations that the governor general highlighted are the hosting of the second Diaspora Conference in Kingston in June. The conference is expected to attract approximately 455 delegates from countries such as the United States, Canada, and the United Kingdom.

The governor general also said that the Jamaican government would be opening a high commission later in the year in South Africa to serve the island's interest in Southern and Eastern Africa.

Alcoa starts making beverage-can sheeting in Russia

MarketWatch Apr 18, 2006

MOSCOW (MarketWatch) -- Alcoa Inc. (AA), the world's largest aluminum company, launched a $6 million production of beverage cans' sheet in Russia Monday, Kommersant newspaper reported Tuesday.

Alcoa doesn't give away its production capacity, but says that by spring of 2007 it's likely to fully satisfy demand of Russian can producers.

Currently, Russian can producers buy sheet from Alcoa and Canada's Alcan Inc. (AL), the paper said.

Newspaper Web site: http://www.kommersant.ru

-Contact: 201-938-5400

Alcoa Strike Could Hurt Aluminum Production, Driving Up Prices

Wall Street Journal (subscription), NY - Apr 16, 2006

By Paul Glader

If workers at Alcoa Inc. decide to strike after their master contract expires next month, industry experts say the aluminum giant could face lower shipments, production headaches and possible safety risks for employees.

Alcoa's salaried staff -- including lawyers, engineers and office clerks -- have been asked to volunteer to work at smelters and rolling mills if a strike takes place this summer, the company said.

Negotiators for the world's largest aluminum maker ...

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Bauxite workers strike

Caribbean Broadcasting Corporation, Barbados Wednesday, 19 April 2006

Workers at one of Jamaica's main bauxite plants went on strike on Wednesday in a dispute over productivity incentive payments.

More than 1,000 employees stopped work at the St. Ann Bauxite Co., formerly Kaiser Bauxite, according to Lambert Brown, president of the University and Allied Workers Union.

"Production has been severely affected and the union regrets that, as it is not our will," Brown said. "But the workers need to get what rightfully belongs to them, and they will stay off the job until that happens."

St. Ann Bauxite, which is owned by Falconbridge Ltd. and Century Aluminum Co., has annual production capacity of 4.5 million tonnes of ore.

The union said the company violated an agreement to make productivity incentive payments tax free and owes the striking workers J$40 million worth of collected tax.

Brown said the agreement that productivity payments would not be taxed was reached in good faith and emerged from the government's plan to lower taxation of productivity payments in the sector.

The company said in a statement that it was forced to comply with a directive from the Ministry of Finance and Planning that all productivity incentives would be taxed.

Officials said they would meet Thursday to save the industry from further losses following industrial action at other plants earlier this year.

Gov't giving up 10% more of Jamalco

Jamaica Observer, Jamaica - Apr 19, 2006

by camilo Thame

The government's stake in the bauxite company, Jamalco will be reduced by 10 percentage points to 20 per cent, as part of a deal with its majority partner Alcoa, to avoid a US$120 million capital injection into the operation.

Alcoa therefore, by solely funding the US$800 million expansion that was announced two years ago, will increase its ownership to 80 per cent from the current 50 per cent.

The government had initially agreed to fund US$120 million or 15 per cent of the estimated US$800 million capital expansion. Alcoa would fund the other 85 per cent which would have increased its stake from 50 per cent to around 70 per cent.

However, estimates tabled in parliament last week indicated that plans to expand the Jamalco refinery at a cost of US$800 million would be "fully funded by Alcoa resulting in Alcoa's ownership interest increasing to about 80 per cent and CAP's reducing to 20 per cent".

Clarendon Alumina Production (CAP) is the agency that currently holds the government's 50 per cent stake in Jamalco.

In March 2004, Alcoa announced plans to expand the alumina refinery at Halse Hall, in a cost sharing arrangement that would result in the dilution of the government's stake.

The expansion which will increase the capacity of the refinery from the current 1.25 million metric tonnes a year to 2.8 million tonnes, was to be completed by 2007.

It is unclear, however, if the completion date will be met, as the "pre-enginnering works [is expected to] commence during 2006/2007" according to notes to this year's budget.

Yesterday, the Business Observer was unable to reach the chairman of CAP, Dr Carlton Davis for his comments. Questions posed to Jamalco officials on the issue were not responded to up to press time last night.

The Jamalco expansion follows the restructuring, some three years ago, of the taxation arrangements under which the bauxite/alumina industry operated - with the objective of encouraging new investments in the sector.

The major element of that change was to move to a system of direct tax on profit in the bauxite/alumina industry rather than a levy on production that was introduced 30 years ago. There was also an adjustment to the structure of the royalty paid for the industry's raw material - bauxite.

The government first secured a seven per cent stake in Alcoa in the mid 1970s when Michael Manley's socialist administration argued that the country should own a share in a strategic sector that was based on a finite resource.

That stake was pushed to 50 per cent in 1985 when, in the face of a world recession, Alcoa decided to close the Jamaican plant because of soft demand for alumina and aluminium. At the time, the Edward Seaga government decided to keep the plant open and subsequently restructured the relationship.

The upgrading of the Jamalco facility is part of a US$1.3-billion investment initiative being led by Alcoa, which also includes the development of the Juruti bauxite reserve in Brazil, as part of a global strategy to meet the growing worldwide demand for aluminium.

Last year, Jamaica produced four million tonnes of alumina, a record, and grossed US$870 million.

It is expected that the Jamalco expansion, once completed, will add another US$300 million a year in gross earnings.

Alcoa's move to T&T part of global plan

Jamaica Gleaner, Jamaica - Apr 18, 2006

PORT-OF-SPAIN (Guardian):

ALCOA'S PROPOSAL to build its controversial US$1.5 billion aluminium smelter in south-west Trinidad is part of a strategy to shift production to countries with cheaper energy and raw-material costs, international wire services reported yesterday.

Alcoa CEO Alain Belda has cut expenses by shedding jobs and closing plants in the U.S., such as a smelter in Maryland, while looking to expand production outside of the U.S. where raw-material costs are cheaper.

Alcoa is expecting aluminium production to double by 2020.

SMELTER

The company agreed to build a smelter in T&T in February, where it has secured supplies of natural gas, according to a Reuters report.

Alcoa also is building a smelter in Iceland and considering a second plant there to tap cheap geothermal power.

On Monday, Alcoa, the world's biggest aluminium maker, said its first-quarter profit more than doubled to a record US$608 million as metals prices surged. Sales rose 16 per cent to a record US$7.24 billion from US$6.22 billion. Aluminium prices were up 29 per cent on average during the quarter, reaching a 17-year high in February.

RAW-MATERIAL COSTS

"Demand remains strong in aerospace, construction, power generation," analyst Scott Burns of Morningstar Inc. said.

"All these things are going for the company. It's just a matter of whether or not they can control their rising raw-material costs."

Alcoa benefited as costs for caustic soda and natural gas, both used in aluminium production, fell compared with the previous quarter, Burns said. Costs and expenses rose 9.5 per cent to US$6.24 billion compared with a year ago, slower than the gain in sales, Alcoa said.

UPDATE 1-Alcoa explores joint alumina venture with Vietnam

Reuters - Monday 24 April 2006, 3:38pm EST

(Updates with more details)

NEW YORK, April 24 (Reuters) - Aluminum producer Alcoa Inc. (AA.N: Quote, Profile, Research) said on Monday one of its affiliates is exploring a potential joint venture with the Vietnam National Coal-Minerals Industries Group for a bauxite mine and alumina refinery in the Southeast Asian country.

The venture would be 49 percent owned by Alcoa. Materials produced by the refinery would be taken to port by a rail line to be developed by other investors, Alcoa said.

The Pittsburgh-based company said its Alcoa World Alumina and Chemicals affiliate has signed a memorandum of understanding with Vietnam National Coal-Minerals Industries Group, known as Vinacomin, to explore the feasibility of developing the bauxite mine and alumina refinery in Vietnam's Dak Nong province.

The project would study the feasibility of constructing and operating the refinery in the Gia Nghia bauxite deposit, with first stage capacity between 1 million and 1.5 million metric tons per year. Alumina, which is smelted into aluminum, is found in bauxite ore.

Under the joint venture, Alcoa would be responsible for the marketing of alumina produced by the refinery. As part of the agreement, transportation from the Dak Nong refinery to port would be carried by a railway to be built by other investors.

Vinacomin is responsible for all bauxite development in Vietnam and was recently formed as a result of the merger of the Vietnam National Coal Group and the Vietnam National Minerals Corp.

© Reuters 2006. All Rights Reserved.

Alcoa World Alumina Signs MOU with Vinacomin for Bauxite, Alumina Refinery Joint Venture

Finanzen.net, Germany 24.04.2006 18:50:00

Alcoa (NYSE:AA) today announced that its Alcoa WorldAlumina and Chemicals affiliate has signed a memorandum ofunderstanding (MOU) with Vietnam National Coal-Minerals IndustriesGroup (VINACOMIN) where the parties will explore the feasibility ofcreating a joint venture to develop a bauxite mine and aluminarefinery in the Dak Nong Province of Vietnam.

The agreement calls for creation of a joint venture to explorefeasibility of construction and operation of an alumina refinerylocated in the Gia Nghia bauxite deposit area in Dak Nong Province,with first stage capacity between 1.0 and 1.5 million metric tons peryear, and expansion opportunities from there. Bauxite in the region isamong the highest quality in the world.

The joint venture would be 51 percent held by Vinacomin and 49percent held by Alcoa World Alumina and Chemicals. Alcoa will appointthe managing director of the facility who will operate it utilizingthe Alcoa Business System and in close connection with Alcoa's globalrefining system. Alcoa will be responsible for the marketing ofalumina produced by the refinery.

As part of the agreement, transportation from the Dak Nongrefinery to sea port will be carried by a railway to be implemented byother investors. The two parties will continue to work together tooutline the next steps in their cooperation.

Vinacomin is responsible for all bauxite development in Vietnamand was recently formed as a result of the merger of the VietnamNational Coal Group and the Vietnam National Minerals Corporation.

Alcoa World Alumina and Chemicals is a global alliance betweenAlcoa and Alumina Ltd, with Alcoa holding 60 percent.

Alcoa is the world's leading producer and manager of primaryaluminum, fabricated aluminum and alumina facilities, and is active inall major aspects of the industry. Alcoa serves the aerospace,automotive, packaging, building and construction, commercialtransportation and industrial markets, bringing design, engineering,production and other capabilities of Alcoa's businesses to customers.In addition to aluminum products and components, Alcoa also marketsconsumer brands including Reynolds Wrap(R) foils and plastic wraps,Alcoa(R) wheels, and Baco(R) household wraps. Among its otherbusinesses are vinyl siding, closures, fastening systems, precisioncastings, and electrical distribution systems for cars and trucks. Thecompany has 129,000 employees in 42 countries and has been named oneof the top most sustainable corporations in the world at the WorldEconomic Forum in Davos, Switzerland. More information can be found atwww.alcoa.com

FORCE MAJEURE ON SUPPLY CONTRACTS FROM GOVE ALUMINA REFINERY DUE TO CYCLONE MONICA

Press Release - ALCAN INC. Quotes:( AL , AL )

Free Market News Network, FL - Monday, April 24, 2006 8:15:00 AM EST

Montreal, Canada — Alcan Inc. (NYSE, TSX: AL) announced today that it has declared Force Majeure on supply contracts from its 2.0 million tonne-per-year (Mt/y) Gove alumina refinery in the Northern Territory of Australia after a category 5 cyclone caused Alcan Gove to interrupt production.

"In accordance with Alcan’s Cyclone Emergency Procedures, the site has initiated the shutdown of operations in preparation for Cyclone Monica," said Jacynthe Côté, President and Chief Executive Officer, Alcan Bauxite and Alumina. "All decisions and actions are taken to ensure the safety of employees and the community, as well as to protect the environment and the integrity of the equipment. As a result, we are minimizing the impact on the community, ongoing operations as well as our major expansion project that is underway," Côté continued.

Côté emphasized, "We are already working diligently with our customers to minimize the impact on their operations. We intend to resume production and project construction activities as soon as weather conditions stabilize and it is deemed safe to do so."

Alcan (NYSE, TSX: AL) is a leading global materials company, delivering high quality products, engineered solutions and services worldwide. With world-class technology and operations in bauxite mining, alumina processing, primary metal smelting, power generation, aluminum fabrication, engineered solutions as well as flexible and specialty packaging, today’s Alcan is well positioned to meet and exceed its customers’ needs. Alcan has 65,000 employees in 59 countries and regions, posted revenues of US$20.3 billion in 2005 and was selected as a Super-Sector Leader on the Dow Jones Sustainability World Index. For more information, please visit: www.alcan.com.

Protest over Alcoa smelter

Cay Compass, Cayman Islands Sunday 23rd April, 2006

PORT–OF–SPAIN, Trinidad (AP) – About 200 people have marched through a park in Trinidad’s capital to protest Alcoa Inc.’s proposed US$1.5 billion aluminum smelter, saying it will harm the environment and its neighbours.

The smelter, planned for Cap–de–Ville in southwest Trinidad, would produce 341,000 metric tons a year of aluminum. It’s one of at least three major industrial projects proposed in recent years in Trinidad.

"If we end up with just an industrialized island where you can’t eat the food or breathe the air where will we be then?" Petra Bridgemohan, a spokeswoman for an anti–smelter group, said Friday.

Trinidad’s government has also partnered with Venezuelan company Sural to build a smaller aluminum smelter plant and aluminum parts factory in the country’s south and U.S.–based Westlake Chemical has said it intends to build a petrochemical plant in Trinidad.

The projects still need approval from government regulators.

Manning has said the Alcoa smelter will be environmentally safe and will boost the economy.

Trinidad is one of the wealthiest countries in the Caribbean, relying on oil and gas for more than 25 percent of gross domestic product.

CHALCO's Electrolytic Aluminum Project Commissioned

TMCnet - Apr 21, 2006

(SinoCast Via Thomson Dialog NewsEdge)BEIJING, Apr 21, 2006 (SinoCast via COMTEX) --On April 18, Shanxi Guanlu Co., ltd. (SXGL) (SZSE: 000831), an aluminum producer in the central Chinese province of Shanxi, declared that its subsidiary's 200,000 ton-electrolytic aluminum project has been put into production. And the annual production capacity is expected to reach 120,000 tons.

The above-mentioned subsidiary is Shanxi Huasheng Aluminum Co., Ltd. (Huasheng Aluminum), which is a joint venture between SXGL and China's only alumina producer and largest primary aluminum producer-Aluminum Corporation of China Ltd. (CHALCO) (SEHK: 2600). CHALCO holds 51% stake with a total investment of CNY 510 million, and SXGL becomes the holder of the rest stake by injecting the electrolytic aluminum project worth CNY 490 million.

This case shows that CHALCO did not stop its fast expansion in the middle stream of the industrial chain, after it acquired Fushun Titanium Co., Ltd. and Fushun Aluminum Co., Ltd.

Due to rise of alumina price, SXGL had shut down a part of its electrolytic aluminum production lines. So insiders analyzed that the cooperation between the two companies will benefit SXGL a lot, because CHALCO had committed to supplying 100,000 tons of low-cost alumina to SXGL every year.

From dycj.ynet.com, Page 1, Thursday, April 20, 2006

info@SinoCast.Com

Alcoa training managers for jobs in case of strike

Knoxville News Sentinel (subscription), TN April 26, 2006

By REBECCA FERRAR, ferrarr@knews.com

Master labor contract with Steelworkers expires May 31

MARYVILLE - Alcoa Tennessee officials have been training managers since April 3 to work hourly positions in case there's a strike during negotiations that begin May 18 with the United Steelworkers of America, Local 309.

"We're preparing for a strike," Geoff Cromer, president of Alcoa's primary metals unit in North America, said Tuesday during an interview that also included Bob Wetherbee, president of the company's Rigid Packaging Division, and Malcolm Murphy, the division's location manager.

While Alcoa officials stressed neither side wants a strike, the aluminum giant is taking precautions.

The five-year master labor contract covers 9,000 employees at 15 plants, including about 80 percent of the 1,646 workers in Blount County, which makes aluminum and aluminum sheets for beverage cans.

The contract expires May 31, at which point both sides could agree to continue talks without a strike.

Negotiations will take place in St. Louis.

Alcoa officials expect the union will have difficulty with provisions including higher contributions in the company's health-care plan, a cap on retirees' medical benefits, and a two-tiered system for new workers that replaces a 30-year pension benefit with a defined contribution plan such as a 401(k).

Union officials could not be reached for comment.

Alcoa officials said they want workers to contain rising health-care costs by being more conscious of how much they're spending on care. The need for cost controls is driven by the increased pressures of a global economy, they said.

Alcoa's return on capital at the Tennessee rigid packaging operations is "dangerously low," officials said, a problem complicated by global competition with far lower employee and energy costs.

Power can cost $40 per megawatt-hour in Blount County compared to about $22 worldwide, they said, and payroll and benefits make up about a third of Alcoa's costs in the United States, compared to 5 percent to 8 percent at plants in China.

"We can compete," Murphy said, because Chinese plants' "productivity (and) quality is not the best," but eventually those foreign workers will become more productive.

"The (Alcoa) plant is viable if we grow and change."

Many Alcoa managers took vacations during the spring so they would be available to work this summer should a strike occur. Alcoa officials plan to put up fences at the Blount County plant to increase security.

Steelworkers have been picketing the plant weekly to protest changes to retirees' benefits. Officials said those demonstrations have been peaceful and praised the quality of their longtime work force.

Cromer also said the hourly workers have been "cooperative" as managers observe how to do their work if a strike occurs.

Alcoa officials said a strike could hurt the company in the long run because, if production slows down, Alcoa's customers might seek alternatives such as plastic containers and not come back.

Business writer Rebecca Ferrar may be reached at 865-342-6357.

Bauxite Mining not to Blame for Rising Waters - Fernandez

Government of Jamaica, Jamaica Information Service, Jamaica - Tuesday, April 25, 2006

BY: INGRID BROWN

Bauxite and alumina operations have been blamed for rising waters in some communities in recent times, but at least one expert in this area, has sought to dispel this view.

Basil Fernandez, Managing Director of the Water Resources Authority (WRA), tells JIS News, that the first recorded case of rising water occurred 142 years before bauxite operations even started in Jamaica.

He notes that Moneague in St. Ann, which is one of the communities being affected by rising waters, had similar cases of flooding in 1810 and again in 1916 and 1933. In the last two instances, he says, almost one square mile of area was flooded with a number of houses covered, and lives were lost.

"These incidents of flooding preceded bauxite mining or bauxite operations in the Moneague area," Mr. Fernandez tells JIS News. West Indies Alumina Company (Windalco), formerly Alcan Jamaica, began bauxite operations in the island in 1952.

In terms of Harmons, Manchester, the WRA head says that prior to the flooding of 2002 and 2005 through to this year, there were reports of inundation in the area in 1916 and 1933. "Again, that also predates the bauxite mining operations in the area and the conclusion that we can draw is clearly that in both instances, flooding has been taking place in these areas prior to the implementation of the bauxite aluminum industry in Jamaica," he says.

According to Mr. Fernandez, the WRA, following assessments of the affected areas and data collated over the last couple of years, has been able to deduce a possible cause for the flooding. In the case of Harmons, he blames the heavy rains associated with tropical storms Isadore and Lily for the 2002 flooding and hurricanes Dennis, Emily and Wilma for the flooding of 2005 an thereafter.

"The basic thing is that we have had significant input of rainfall, which has exceeded the storage capacity of the limestone. This has meant that ground water levels have risen significantly and in many instances, have come above ground level," he explains.

He adds that this has given rise to numerous springs, which flow into these low line depressions, allowing the water to come all the way from Mile Gully moving through a highly permeable zone from Melrose Hill down into Porus, and then south to Harmons and into the Milk River systems, where it discharges before flowing out to sea.

"It has to do with a high degree of rainfall, the high permeability of the limestone in the region, the low storage capacity available in the limestone and hence, the water has come to the surface," he points out.

A similar thing, he notes, has occurred in Moneague, where there have been very high levels of rainfall exceeding 2,800 millimetres for the year. This is similar to what happened in 1916 and 1933. "Again, it is all related to the volume of rainfall, the permeability of the limestone, the large catchment area and the capacity of the limestone being exceeded, and therefore, the water has to be discharged somewhere," he says.

Stressing that the drilling operations being conducted by Jamalco in Harmons, and Windalco in Moneague are not to be blamed for the flooding,

Mr. Fernandez says, "there has seen drilling taking place to determine the thickness of the bauxite deposit, but as I have mentioned to the citizens at community meetings, when you are drilling to the bauxite deposit, you are just basically auguring and taking samples for analysis".

"Once you remove the drill out of the hole, the bauxite immediately closes around the hole. They don't drill into the limestone because they are not interested in the limestone; they are just interested in the bauxite," he adds.

As to what can be done to address the rising waters, Mr. Fernandez says, "we have to just wait on nature for the water to run off because what has happened is because of the high water table. There is very little storage space and there is nowhere for the water to go so the water keeps rising."

He however expects that as the rainfall reduces due to the dry season, the ground water levels are going to fall. "So, you will find that storage space will be created in the aquifer and the water gradually drains away," he explains, noting that this is already happening in the affected communities.

In Moneague, the water level has declined by approximately three to four inches and Fernandez says the rate of decline is expected to increase and the water will begin moving out of the system very quickly.

But while the rising waters have affected peoples' lives, forcing residents from their homes, mining operations have also been hampered. According to

Mr. Fernandez, the flooding has resulted in the abandonment of pits in Harmons and new roads have had to be cut to transport the bauxite from the mining areas to the loading facility. Mining pits have also been abandoned in Moneague.

Mining, he says, "will return once the water is drawn, but right now, they cannot mine in those areas. It means they will have to find new mining areas, which may be further from the plant and the quality may be different. it does have an impact on the plant production."

Given that the flooding is as a result of heavy rainfall and the permeability of limestone in the areas, Mr. Fernandez says that there could possibly be a repeat of the problem in a number of years. As such, he notes the importance of demarking areas that can be safe for housing to minimize property losses and disruption of lives.

He informs JIS News of plans to embark on a floodwater control project by next year, to look at mapping these flood-prone areas, and to carry out hydraulic analyses to better guide development in those areas.

UES Seeks $15Bln Investment Per Year

The Moscow Times, Russia Wednesday, April 26, 2006. Issue 3401. Page 7.

By Marta Srnic, Bloomberg, Reuters

LONDON -- National power utility Unified Energy Systems is seeking local investors to help raise an annual $15 billion by 2009 for new plant and equipment, CEO Anatoly Chubais said.

UES, the world's largest power producer by capacity, must raise annual investment from $5 billion now to meet soaring demand for electricity, Chubais said in an interview at the Russian Economic Forum in London on Monday.

"Most of this money should come from Russian sources," Chubais said. "We see this increased power demand and I believe the only answer is just to increase investment."

Chubais, one of the architects of Russia's asset-sale program in the 1990s, is struggling to break up UES and raise as much as $50 billion for upgrades and expansion, in part by selling generating companies to private investors and freeing prices.

Aging Soviet-era equipment, rising energy consumption and insufficient investment led to blackouts in Moscow last May.

"Additional share issues in power companies can be public offerings and private offerings," Chubais said. "Both options are being analyzed. Today, the thermo-electric power industry is absolutely ready for that and critically needs it."

UES may lure Russian investors through projects similar to a $6 billion project in Siberia, with Russian Aluminum, to complete a hydropower plant and build an associated smelter, Chubais said.

The plant, on the site of the half-completed Boguchanskaya hydroelectric unit in the Krasnoyarsk region, will cost more than $4 billion, 70 percent of which will come from loans and the remainder from RusAl and UES.

Chubais said UES may receive 160 billion rubles ($5.8 billion) from the government for Federal Grid Co. shares that are being created in a spinoff of the grid.

The government, which owns 53 percent of UES, is required by law to own 75 percent of the high-voltage grid operator. Chubais said he sent a letter to the government asking it to approve the transaction. The answer may take two to three months, he said.

Chubais also vowed to uphold the pledged pro-rata division of assets for minority shareholders in the UES breakup. In a first stage, he said three holding companies for generating assets, or gencos, will be distributed to shareholders in a first stage, probably this year.

The next stage, taking place through 2008, will be a reorganization of the entire company on a pro-rata basis, he said.

UES stock has risen 80 percent this year. The stock slipped 0.4 percent to 76.1 cents midday after closing at an all-time high Monday.

In February, President Vladimir Putin urged the government to help lure domestic and foreign investment in power companies to avoid blackouts and sustain economic growth.

SUAL Looks Abroad

The Moscow Times, Russia Wednesday, April 26, 2006. Issue 3401. Page 6

SUAL said it was in talks with a partner amid plans to double production and expand into other commodities to take advantage of soaring prices.

"We have a very interesting and very serious potential international partner," SUAL chairman Viktor Vekselberg said in an interview late Monday.

"We're looking to become a real international diversified company. We will decide on the partnership" by the middle of the year, he said.

Vekselberg ruled out a merger with Russian Aluminum. "A merger with RusAl is not so realistic," he said. (Bloomberg)

RAO UES Russia and Rusal to Establish Two Joint Ventures 'Zavod' and 'Stantsia' under Boguchansk Project

Financial Information Service(Registration), Russia 25.04.06

KRASNOYARSK, April 25. /FIS/. Directors' Board of RAO UES Russia assigned its representatives in the Directors' Board of HydroOGK OJSC to vote for the decisions related to the development of the corporate structure of the Boguchansk Energy-metallurgical Association Project (BEMA Project). The BEMA Project includes the completion of the Boguchansk hydropower station of the projected capacity of 3 thousand MW on the Angara River and the construction of an aluminum plant of the capacity of 600 thousand tons of primary aluminum per annum, which is to become the major consumer of electric power generated by the HPS. HydroOGK and RUSAL will implement the project on a parity basis.

Alcan restarts Aussie alumina refining site

Montreal Gazette (subscription), Canada Tuesday, April 25, 2006

Alcan Inc., the world's second-largest aluminum producer, said it restarted production at its alumina refining site at Gove, in northern Australia, following a tropical cyclone. Output at the 2-million-tonne-a-day refinery, which was halted Thursday in advance of Tropical Cyclone Monica, should be restored in full in about two days, Alistair Field, Alcan's vice-president of Pacific operations and Gove's acting site manager, said yesterday. Damage to the site was minimal, he said.

Cameroon: Bauxite-Aluminium Development Project Takes Root

Cameroon Tribune (Yaoundé), April 25, 2006

Lukong Pius Nyuylime

An inter-ministerial committee met in Yaounde recently to study the way forward.

It is exactly half a year since the Republic of Cameroon, represented by the Prime Minister, head of government signed a letter of intent with the Montreal-based multinational, Alcan Primary Metal Group to expand the activities of the latter and develop the aluminium industry in Cameroon.

The expansion project seeks to boost ALUCAM"s production capacity to 260,000 tonnes yearly, up from today's 100,000 tonnes. The letter of intent streamlines the following projects: modernizing and increasing the intensity of the existing plant in Edea; constructing a second set of electrolysis with a production capacity of 150,000 tonnes per year; and developing a new hydro-power station on River Sanaga at Nachtigal, with an installed capacity of about 33 MW, to cover part of ALUCAM"s energy needs.

Alumina joins $2bn Vietnam push

The Age, Australia April 26, 2006

By Barry Fitzgerald

ALCOA and the Melbourne-based Alumina have signed up with the Vietnamese Government to investigate the $2 billion-plus development of an integrated bauxite-alumina project in the central highland province of Dak Nong.

Should the Anzac Day accord proceed as planned, Alumina's involvement — through its 40 per cent share of the Alcoa-managed AWAC global alumina alliance — would represent the biggest direct investment in Vietnam by an Australian company.

BHP Billiton was a trailblazer for the Australian resources industry into Vietnam with its 1993 victory in securing development rights to the Dai Hung oilfield. But that proved to be a victory BHP wished it had never had, with the company later walking away at a cost of $260 million when Dai Hung proved to be on the small side.

BHP remains active in Vietnam and last year secured exploration licences for bauxite as a possible precursor to it also building a $2 billion-plus bauxite-alumina project, also in Dak Nong.

AWAC's Dak Nong project is one of many that it has under consideration around the world, including a $1.5 billion expansion of the Wagerup refinery in Western Australia. Government approval for the environmentally controversial Wagerup project is pending.

But as AWAC's growing list of alternative projects around the world indicates, AWAC is not reliant on its WA operations for growth.

Dak Nong bauxite is said to be among the highest quality in the world. Vietnam has the added attraction for potential new developments of low labour rates and the availability of hydro-electric power, with the latter increasingly important to aluminium producers because of the increasing use of carbon tax penalties in developed countries as a means to curb greenhouse gas emissions.

AWAC's deal is with Vietnam National Coal-Minerals Industries Group(Vinacomin). It calls for the creation of a joint venture to explore the feasibility of a bauxite-alumina refinery project based on the Gia Nghia bauxite deposit area in Dak Nong.

First-stage alumina capacity has been estimated at 1-1.5 million tonnes a year, with expansion potential.

(It takes four tonnes of bauxite to make two tonnes of alumina, which is enough to make one tonne of aluminium, from which 60,000 beverage cans could be made).

While Vietnam is happy to introduce foreign equity and technology to develop an alumina industry, it will keep outright control, with Vinacomin holding 51 per cent and AWAC holding the other 49 per cent.

Vinacomin is responsible for all bauxite development in Vietnam and was recently formed as a result of the merger of the Vietnam National Coal Group and the Vietnam National Minerals Corporation.

In a recent briefing to investors, Alumina said that with strong global aluminium demand continuing, the outlook for the alumina market was favourable.

It said that high caustic soda, energy and raw material costs were a worry for the industry. But with its growth projects under way, AWAC was adding lower cost production to its portfolio. From 2009, AWAC will have increased its annual capacity by about 3.2 million tonnes of alumina.

Russia builds resource alliances with Africa

Mineweb, South Africa - '25-APR-06 13:00' GMT © Mineweb 1997-2004

By: John Helmer

MOSCOW (Mineweb.com) -- Russia is building new resource alliances with Africa aiming, first and foremost, at the oil and gas sector, and then at diamond mining.

To the extent these are capital-sharing partnerships, in which Russian state-controlled companies introduce more capital than they export, they are different from the Russian oligarch ventures that have been seen in Africa already -- Norilsk Nickel's short-lived attempt to buy into, then take over Gold Fields; Renova's manganese licences in South Africa's Kalahari; or Russian Aluminium's Nigerian government-funded takeover of the Aluminium Smelter Company of Nigeria (ALSCON).

Another difference between the new state-controlled Afro-Russian alliances and those of the oligarchs is that the latter aim solely at exporting resources with mininal beneficiation or local value-adding. The former, by contrast, combine already established African expertise and market access in order to optimize returns in international markets for both the African and the Russian partners.

A visit to Africa planned later this year by President Vladimir Putin is likely to raise public awareness of the new strategy; the visit itinerary will include South Africa, Angola, Morocco, and possibly Namibia and the Democratic Republic of Congo. Before then, Putin will host several African observers to the G8 summit conference in St.Petersburg in July. President Thabo Mbeki will be one of them, and energy issues will be the principal item on the G8 agenda.

Gazprom, the dominant supplier of natural gas to northern Europe from Russia, and Sonatrach, the dominant supplier of natural and liquefied gas to southern Europe from Algeria -- both state owned corporations -- have already started planning for what critics have begun calling the gas producers' Opec.

This follows Putin's visit to Algiers last month, and meetings there between Gazprom's chief executive Alexei Miller and two Algerian officials, the minister of power, Shakib Khelilem, and the president of Sonatrach, Mohammed Meziane. A formal memorandum of cooperation is due to be signed whern the latter come to Moscow soon; Gazprom will not say exactly what date has been fixed.

Swaps of gas deliveries between European and North American markets, a common pricing framework, joint exploration projects, pipeline and LNG plant construction on each other's territory, and other forms of cooperation are already in the pipeline. Industry reports indicate that Gazprom has already undertaken to deliver Sonatrach LNG cargoes to the US west coast, and exchanging landline deliveries of Gazprom fuel to France.

To avoid accumulating dollar surpluses, and to invest in downstream gas-fired power systems, gas distribution networks, and retail gas assets, Gazprom is also aiming to buy sizeable stakes in German, UK and other European energy companies. Such deals to capture end-customer business within Europe have triggered media warnings of Russian control over the political insecurities of its neighbours.

Gazprom executives are reluctant to answer questions about their Africa strategy for the time being. Natalia Bortsova, a gas industry analyst in Moscow, told Mineweb that "Gazprom has a serious intention to produce LNG, but currently has no production facilities of its own." Sonatrach was the pioneer of cold liquefication of gas 40 years ago, but according to Bortseva, the technology required for that is readily available in the marketplace now. However, Gazprom acknowledges that Sonatrach has considerable experience building LNG plants, operating them, and marketing the product.

Referring to the Russian LNG project on the island of Sakhalin, in the Sea of Japan, Bortsova said that "Sakhalin LNG is controlled by Shell, and Gazprom has been trying to get a share there without success yet. [An LNG project for St.Petersburg involves] PetroCanada and Gazprom, but the negotiations are still in stage of memorandum of intentions." She acknowledged that Gazprom's desire to export LNG to the US market will run into potential competition with Sonatrach, already a major US supplier, unless the two companies agree to cooperate. "It is very important to create the partnership, not to compete," Bortsova said.

Paolo Scaroni, the chief executive of ENI, an Italian oil and gas group, told the European Parliament last week that he was afraid the small number of gas supplying nations could encourage the formation of an Opec for gas. "We are increasingly dependent on a small number of suppliers," he said.

In Angola, Russian state strategy is being supervised by the installation of Vneshtorgbank (Foreign Trade Bank) in Luanda, and by steady expansion of Russian diamond operations, independent of the Israelis and others. Alrosa already participates as a shareholder in the Catoca diamond mine, and it holdsa a stake in Angola's diamond marketing network. Alrosa has done well out of the recent shakeup in the Angolan diamond sector. It has begun to eneter the diamond sector of neighbouring Democratic Republic of Congo (DRC).

The chief executive of Alrosa, Alexander Nichiporuk, recently defended his African focus. "The African direction," he told a meeting of company managers, "is not an alternative, but a significant addition to the industrial and exploration work which is conducted in the basic region of Alrosa activity, the republic of Sakha." Among this year's priorities in the region, Nichiporuk said, "we should determine the directions of further cooperation with the adjacent African countries."

Rusal's owner Oleg Deripaska reportedly sought, without success, to have Putin visit Nigeria to buttress his recent acquisition of the local aluminium smelter company, ALSCON. That transaction has been called corrupt privatization in lawsuits filed in both Nigeria and the US by a rival bidder.

Russian relations with Nigeria have been seriously damaged by the hostage-taking and ransoming of a group of Russian seamen from an oil tanker, who were held without trial in Lagos for two years, until released last December. The Nigerian government also antagonized Moscow by favouring the Chinese over the Russians in the award of military modernization contracts. Nigerian officials in Moscow won't comment.

JSW Aluminium in Vizag

Andhra Cafe, India 04-25-2006

By andhracafe

JSW Aluminium, an unlisted company belonging to the owners of JSW Steel Ltd, plans to set up refinery as well as an Aluminium manufacturing unit at Visakhapatnam in the State.

It has signed an agreement with the Andhra Pradesh Mineral Development Corp. (AMDC), for the supply of bauxite ore.

In the first phase the company plans to set up the refinery unit, with capacity of 1.4 million tonne per annum, while the aluminium plant would be constructed in the second phase.

Alcan reviewing half dozen aluminum projects

NDTV.com, India April 28, 2006

MONTREAL (Reuters) Alcan Inc. is reviewing a half dozen projects aimed at expanding its primary aluminum production capacity, the company said on Thursday.

With aluminum prices at an 18-year high, Alcan is looking at expansion projects in Canada, Cameroon, China, and Iceland, and at the Coega greenfield joint-venture South Africa, Dick Evans, its recently appointed president and chief executive, told the company's annual meeting.

Montreal-based Alcan, the world's second-largest maker of primary aluminum, has previously outlined the projects, but surging aluminum prices have sparked renewed interest in the company's expansion plans.

"We're working on them all simultaneously to see which ones we can bring forward first, and it's too early to say how those different options would progress," Evans told reporters after the annual meeting.

In its home province of Quebec, where Alcan has the core of its primary smelting, potential expansions include additional capacity at its Alma smelter, or the replacement of an older smelter in the Saguenay region.

Quebec expansions will hinge on the provincial government's forthcoming energy policy and the effect that will have on rates charged by provincially owned utility Hydro-Quebec to large industrial power users.

The company is also looking at the possibility of investing in its Kitimat, British Columbia, smelter, something a delegation of local politicians from the town pressed for at the meeting.

Another project in the pipeline is the Utkal alumina mine and refinery planned for India's Orissa state. Alcan holds 45 percent of Utkal Alumina International Ltd., and has faced opposition from a Montreal-based rights advocacy group over the project.

"We have not yet made a decision to participate as an equity partner and are not yet convinced that the project meets Alcan's high standards from both financial and sustainability standpoints," Evans told the annual meeting.

He added that if Alcan does decide to proceed with the development of a new bauxite mine and up to 1.5 million tonne alumina refinery at Utkal, the company intends to hire an independent organization to assess social and environmental impacts.

Meanwhile, in Sohar, Oman, the $1.7 billion joint-venture smelter project there is scheduled to begin production in the third quarter of 2008. The 350,000 tonne aluminum smelter represents Alcan's first major investment in the Middle East.

Alcan has a 20 percent stake in the Oman smelter, which has a single AP35 potline, but the company also owns an option to acquire up to 60 percent of a second potline at the smelter, if that expansion goes ahead.

Evans acknowledged that rising aluminum prices augur well for Alcan's profits this year, but he declined to offer details as the company is in a quiet period ahead of its first-quarter results next week.

Analysts are looking for Alcan's first-quarter profit to almost double to $1.01 a share from 59 cents a year earlier, before exceptional items, according to Reuters Estimates.

Alcan shares fell C$1.94, or 3.3 percent, to C$57.43 on the Toronto Stock Exchange and dropped $1.58 to $51.05 on the New York Stock Exchange on Thursday.

Activists lobby for projects in B.C., Quebec, but against project in India

940 News, Canada April 27, 2006, EST.

MONTREAL (CP) - Alcan Inc.'s (TSX:AL) annual meeting Thursday became the rallying point for British Columbia and Quebec groups that want their region chosen for the company's next major aluminum smelter expansion.

Another group, meanwhile, demanded that Alcan back out of a proposal to build a major bauxite mining and alumina smelting project in a poor region in India.

Richard Evans, at his first annual meeting since being appointed chief executive this spring, confirmed that Alcan is looking at five or six major primary aluminum projects, evaluated mainly on their access to cheap energy.

One of these is in Kitimat, B.C., where Alcan may modernize and expand its old smelter, while the other would involve the expansion of a modern refinery in Alma, Que.

Evans said Alcan would like to expand Kitimat, with new smelting technology that would be 30 to 35 per cent more efficient. A major engineering challenge is how to situate an enlarged smelter, as the site is hemmed in by mountains.

"I would like nothing better than a good project for Kitimat," Evans said. "It is in our interest to build the biggest smelter that will fit on the site."

The other primary metal ventures are in Cameroon, China, Iceland and South Africa.

A Montreal-based order of Roman Catholic nuns, along with Ethical Funds Inc. of Vancouver, proposed that Alcan set up an independent advisory committee to evaluate the project in Kashipur, India.

Their proposal got 37 per cent of shareholder votes, unusually high support for a proposal that is opposed by a company board.

Evans said the company, which would have a 45 per cent stake in the project, has not made a decision whether to proceed.

He said Alcan would have the project evaluated by a third party for its environmental, social and economic impact if it did decide to go ahead.

But he said the company does not want its agenda dictated by activists, who might force Alcan into expensive studies for projects it might not carry out.

Lise Parent, spokesperson for the group opposed to the Indian project, described the vote as "a great victory."

"It's a clear signal that shareholders are more aware of social impacts."

Her group claims the mining project is being forced on the region by multinationals against the will of the local populace.

Meanwhile, Owen Ness, former vice-president for human resources at the Montreal-based company, complained about stagnant Alcan share values during a time of high aluminum prices.

"As shareholders, we haven't done very well," complained Ness.

Evans agreed that the integration of Pechiney of France, acquired in 2003, has been a drag on the company.

But Evans said the merger has achieved annual synergies of $400 million US, above the original target by $40 million.

He added that Pechiney has contributed smelting technology that enables Alcan to become a partner in major aluminum projects. It also brought the company aerospace business - an area Alcan had previously been absent from.

Evans noted that shares have increased since the start of the year.

"It is evident that investors are beginning to appreciate the earnings power, the organizational strength and the attractive pipeline of new investment opportunities."

Kaiser Ratifies Teamsters Contract

Houston Chronicle, United States April 27, 2006, 10:33AM

© 2006 The Associated Press

FOOTHILL RANCH, Calif. — Kaiser Aluminum on Thursday said it has ratified a three-year contract with the International Brotherhood of Teamsters covering about 125 union members at the company's Los Angeles plant.

The contract calls for "industry-level wage increases" effective May 1st, the company said.

Kaiser Aluminum produces fabricated aluminum products for aerospace and general engineering, automotive and custom industrial applications.

In late March, the company reported a net loss of $753.7 million in 2005 related to Chapter 11 restructuring, while 2005 sales grew 16 percent to $1.09 billion.

Private sector gets involved in petrochemical industry

Kuwait Times, Kuwait 27 Apr 2006

By Ben Garcia

KUWAIT: The laying of the foundation stone for the first privately owned Oil and Petrochemical industry in Kuwait was held yesterday at Sabahiya refinery. His Highness the Prime Minister Sheikh Nasser Mohamed Al-Ahmed Al-Sabah was the chief guest during the occasion, as he laid the stone after speeches from the Minister of Energy Sheikh Fahd Al-Ahmed Al-Jaber Al-Sabah and Wael Al-Sager, vice-chairman of Petroleum Coke Industries Co. (PCIC) -- the company which won the project. Several high-ranking officials were also present during the occasion, including dignitaries from Japan, South Korea and India.

The Minster of Energy wished the company success and informed them of their social, national, political and occupational responsibilities, which should be considered upon operation. "The national dimension of responsibility is represented by supporting, qualifying and relying on the national manpower. The political dimension is represented in confirming and dedicating the national private sector's capability to successfully enter the oil sector, and occupational dimension is represented by emphasising the technical and marketing feasibility of foreign partners," Sheikh Fahd said.

He noted that in these days, the global oil industry witnessed accelerated development, which has exceeded the most optimistic expectations. "Oil management in Kuwait did not stand with folded arms, but has quickly set up the necessary strategies and policies required to accommodate, keep in pace with and exceed the results of these developments," he said.

Sheikh Fahd added that among the most significant strategies Kuwait has adopted include increasing of oil production to more than 4 million barrels per day by 2020 and expanding refining capacity inside the country to 1.4 million barrels a day. Sheikh Fahd also noted the endless support of HH the Amir Sheikh Sabah Al-Ahmed Al Jaber A1-Sabah for several important initiatives, which he personally recommended and supported when he was still prime minister.

On his part, Al-Sager introduced PCIC to the visitors. According to Sager, this petroleum coke production project is a fitting and bold model that embodies the concerted efforts of the public sector-with its huge resources and capabilities-and the efforts of the private sector-with its flexibility and experience.

He added that the project is also a successful model of cooperation with foreign partners. He said the US corporation Fuller Industries brings the most sophisticated technologies in this field. The Indian company-Rain Calcining - will carry out the building, operation and maintenance of the project. Oxbow, from the US, will undertakes the marketing of the project's entire production of 350,000 tons of coke each year for the next twenty years. "This coke is mainly used in the aluminium industry, and the key consumer markets in the Gulf region are Bahrain and the UAE at present, and Oman and Qatar in the future," Al-Sager said.

"We are confident that we will be able to sell the entire production, this is based not only on the lack of similar plants and the rapidly increasing demand, but also on the fact that the Kuwaiti primary material used in its production and the end product made by the Kuwaiti oil refineries is of the best quality in the world," he enthused.

Aluminium sector must not expand

China Daily 04/27/2006 page10

By Wan Zhihong, (China Daily)

China will continue its macro economic control measures on the aluminium industry in order to adjust the structure of the sector, said the National Development and Reform Commission (NDRC), the nation's leading industrial watchdog.

NDRC said efforts to curb further expansion of the high-energy consuming aluminium and alumina sectors should continue in 2006.

The commission said authorities should prevent new aluminium projects, limit overcapacity in existing facilities, curb investment in alumina projects and enhance the threshold for entering the sector.

With active investment in China's aluminium industry in the past few years, overcapacity has become a pressing issue.

The growth rate slowed down, and many aluminium enterprises suffered losses.

In 2005, the total production capacity of China's aluminium industry amounted to 10.7 million tons, but the country only consumed 7.12 million tons, accounting for 75 to 78 per cent of the production capacity.

Domestic aluminium manufacturers continue to suffer losses due to a decrease in the price of aluminium, as well as the high price of alumina, the main raw material, said Lang Dazhan, deputy general manager with China Non-Ferrous Metal Industry Association.

Nearly half of China's alumina demand is met by imports, Lang pointed out.

China's aluminium exports are controlled by government policies and the country reintroduced a 5-per cent tariff on aluminium exports.

But because of the great oversupply in the domestic market, the export of aluminium still amounted to 1.32 million tons in 2005.

The Chinese Government has paid great attention to the restructuring of the aluminium sector. NDRC said since 2004 the nation has suspended or stopped new aluminium manufacturing projects worth a total of 17.3 billion yuan (US$2.16 billion).

"China's aluminium industry must embrace consolidation. And the nation's biggest aluminium producer, Aluminium Corp of China Ltd (Chalco), is doing a good job facing up to market depression," said Lang.

"Despite overcapacity in the sector, Chalco, the world's second-largest alumina producer, has started merger and acquisition (M&A) activities in the past year."

Its latest acquisition in the domestic market took place in March, when Chalco agreed to buy Fushun Aluminium Co for 500 million yuan (US$62.1 million).

"Chalco's purchase will boost its production capacity," said Zhang Lei, a researcher with China Merchants Securities.

Zhang said the company is trying to become a more integrated player through capacity expansion and domestic acquisitions.

Apart from the domestic market, Chalco is attempting to explore overseas markets such as Brazil, Australia and Viet Nam.

It is poised to make its largest single investment in Australia, as it seeks to ease shortages of raw materials.

The company will submit a final bid by May to build a A$2.9 billion (US$2.2 billion) bauxite mine and refinery in Queensland.

Sources said the company will take a controlling stake in an alumina plant in Viet Nam that would cost more than US$1 billion.

Chalco will go on with its M&A plans, said Xiao Yaqing, Chalco chairman and chief executive officer.

"We hope that through our M&A activities, the production of primary aluminium can be increased. We expect to reach an output of 3 million tons of primary aluminium by the end of the year," said Xiao.

Last year the Chinese State-owned company produced 7.18 million tons of alumina and 1.05 million tons of aluminium metal.

Eastern corridor hinges on refinery decision

ABC Regional Online, Australia Thursday, 27 April 2006

The Townsville Mayor says the Port Eastern Access Corridor will go ahead if Chinese aluminium company Chalco decides to build an alumina refinery south of the city.

Tony Mooney says he also intends to try to woo support from the National Party to fund the $120 million project.

The National Party is reported to have negotiated up to an extra billion dollars in next month's federal Budget for road infrastructure.

Chalco is looking at Townsville, Bowen and Gladstone as possible sites for the refinery to process bauxite from the Aurukun deposit.

Councillor Mooney says the access corridor is essential if the Federal Government is serious about increasing the export capabilities of Australia's ports.

"We know it will have a multi-million dollar impact on port revenue which will help underpin a lot more infrastructure in the port directly," Cr Mooney said.

"But there's no doubt that if the alumina refinery goes to the Stuart Industrial area that the eastern corridor is a foregone conclusion, if it doesn't go, well then, we have to depend on federal support."

Jamaica, Trinidad aluminium alliance

Jamaica Gleaner, Jamaica -Thursday April 27, 2006

PORTIA SIMPSON Miller said Jamaica's ability to reap earnings from its bauxite industry has been stymied by the high energy cost for conversion to alumina and aluminium, the Trinidad Guardian reported yesterday.

She said on a visit to Trinidad that the proposed use of LNG from T&T to operate Jamaica's bauxite plants and for conversion is an "exciting prospect" for Jamaica.

"This alumina would be sent to Trinidad for conversion to aluminium in the proposed aluminium smelter. It is a big investment of cash and national commitment of resources in which Jamaica will be a minority partner," she said. "This will result in a stronger Jamaican economy. A stronger Jamaican economy will result in an expanded market for Trinidadian goods and services and more opportunities for Trinidadian investments in Jamaica."

TRADING PARTNERS

Simpson Miller delivered the feature address at a luncheon hosted by the T&T Chamber of Commerce and the Manufacturers' Association at the TTMA building in Barataria on Tuesday. She was on a two-day visit to T&T.

She observed that T&T already enjoys a large trade surplus with Jamaica, which exceeds US$300 million per annum. Forty per cent comprised food, while 60 per cent was petroleum-based products.

"We imported over 26 million barrels of petroleum last year. Of this, Petrojam, the state-owned refinery, bought US$359 million in finished petroleum products from this country. The multi-national companies also spent over US$200 million in finished petroleum product imports for our market."

Simpson Miller assured that as collaboration between both countries continues, Jamaica will remain a good customer and partner both in petroleum products and LNG purchasing arrangements.