AluNews - December 2006

Carbonorca workers request immediate investments in plant - Venezuela

Published: Tuesday, December 5, 2006 18:36 (GMT -0400)

Employees at Venezuelan carbon anodes manufacturer Carbonorca, which supplies the country's aluminum industry, are asking that the government make immediate investments to upgrade the plant.

"We have some proposals for more investments at the plant in equipment that is in very bad shape," the leader of Carbonorca's labor union Supco, Juan Rodríguez, told BNamericas.

Equipment needing prompt upgrades includes the automatic systems for the anode treatment furnaces and especially the refractory area, which has not received investments for several years, the union leader said.

"The situation is quite unstable in that [refractory] area and it is one of the most productive areas of the plant," he said.

The last investment plan at the plant involved US$8mn to replace a single furnace, "but now I wouldn't know how much is needed for these upgrades," Rodríguez added.

In the first half of 2006, Carbonorca presented the project upgrade plan to state holding company CVG and the mining and basic industries ministry (Mibam), both of which approved and offered support via financial backing, but the funds have not yet been provided.

In July, the company announced it would invest some US$7.4mn to modernize equipment, but Rodríguez said the money has still not been made available to carry out the plan.

CVG owns 10% of Carbonorca, which is based in the city of Puerto Ordaz in eastern Venezuela, while aluminum reducers Alcasa and Venalum - both controlled by CVG - each hold 45%.

By Harvey Beltrán, Business News Americas

 

Alcan poised for acquisitions in cycle downturn

Reuters Tue Dec 5, 2006 12:12pm ET

MONTREAL, Dec 5 (Reuters) - Alcan Inc. (AL.TO: Quote, Profile , Research) (AL.N: Quote, Profile , Research) is poised to make large acquisitions if the cyclical aluminum market heads back into a downturn, the Canadian company's chief executive said on Tuesday.

Dick Evans said Alcan has strong cash from operations and a solid balance sheet, which will allow it to benefit from the current aluminum cycle, which is longer and stronger than many people expected.

Alcan has focused on being a low-cost operator and expects to be cash positive and operating "full out" in any market downturn, Evans told analysts at the Desjardins Securities Materials Conference in Montreal.

"If that were to happen we would be looking for acquisitions as we did with Pechiney, Alusuisse and Alouette in the last down cycle," he said.

Alcan, the world's second-largest maker of primary aluminum, took over Swiss aluminum and packaging maker Alusuisse in 2000 and followed that in early 2004 with the acquisition of France's Pechiney.

In 2002, Alcan also made two investments bringing its stake in the 243,000-tonne Alouette aluminum smelter in Quebec to 40 percent.

Until late 2005, aluminum had largely lagged the rapid price rally in other commodities.

The metal, which topped $3,100 a tonne in May only to fall back in subsequent months, has been on a new upturn. Aluminum futures <MAL3> hit a six-month high of $2,851 on the London Metal Exchange on Tuesday.

On the question of diversification away from aluminum, Alcan did take a look at participating in the takeover battle for big nickel and copper producers Inco and Falconbridge, but balked the prices in play for those mining assets, Evans said. Falconbridge is now owned by Swiss-based miner Xstrata Plc (XTA.L: Quote, Profile , Research) and Brazil's Companhia Vale do Rio Doce (VALE5.SA: Quote, Profile , Research) took over Inco.

Evans said that in the longer term Alcan could be interested in acquiring titanium producing assets, largely because of the metal's use, along with aluminum, in the aerospace industry.

"We have have no current, active plans to acquire anyone in titanium," Evans said.

"I doubt that this is the right time to be doing that because they are very strong at this point in time, but it would be something that would be on our watch list for the future," he added.

Otherwise, Alcan will continue to make smaller acquisitions in the aluminum engineered-products and packaging businesses, Evans said.

The company also expects to expands its composites business, which has doubled in the last five years and is profitable, he said.

Evans said Alcan will almost certainly top its forecast for cash from operations of $2.7 billion this year and an average of at least $2.8 billion in 2007 and 2008.

"That's one reason why we went ahead and increased the dividend ... announced the share buyback and still feel we can execute on a very attractive pipeline of investment opportunities, he said.

Alcan shares were up 31 Canadian cents at C$57.06 on the Toronto Stock Exchange and ahead 11 cents at $49.93 in New York on Tuesday morning.

($1$1.14 Canadian)

© Reuters 2006. All Rights Reserved.

 

Alumina slump

Shanghai Daily, China - 2006-12-06

CHINA, the world's fastest-growing major economy, will overtake Australia to become the top maker of alumina next year, prompting prices of the commodity to slump further, Beijing Antaike Information Development Co said yesterday.

Production in China of the material used to make aluminum will jump by 45 percent to 20 million tons in 2007, Wang Feihong, chief analyst at Antaike, said. Prices may average 2,000 yuan (US$255) a metric ton in 2007 compared with 4,000 yuan this year.

 

Alcan starts studies to expand Cameroon smelter

Ici Cemac, Cameroon 5-dec-2006

Tansa Musa [ Yaoundé - ]

Canadian aluminium giant Alcan Inc.'s Cameroonian venture Alucam has started technical and economic studies to more than triple production at its Edea aluminium smelter, its general manager said on Friday.

In October 2005, Alcan signed a letter of intent with the Cameroonian government for the upgrade and expansion of their Alucam joint-venture and the construction of a new hydroelectric power station. Alcan and the government each own 46.7 percent of Alucam. The letter of intent allowed the company a two year period to conduct tests on the quality, quantity and accessibility of deposits of bauxite, the raw material for aluminium. "The expansion of the Edea factory, which will raise production from 90,000 to 300,000 tonnes per year, is the option chosen by Alucam as the most favourable to maintain and reinforce industrial activities in the whole region," Alucam General Manager Raphael Titi Manyaka said in a statement. The smelter will be increased through upgrades to the existing potline and the construction of a second potline. It would represent a boost of approximately two percent to Alcan's annual capacity of almost 3.5 million tonnes.

The smelter's expansion combined with the hydroelectricity development on the Sanaga River will require some 675 billion CFA francs ($1.37 billion), 30 percent of which will be direct investment in Cameroon, Titi Manyaka noted. "Alucam hopes to set up economic activities that will contribute to sustainable development for the entire region," he said, adding that local people would be employed in the construction and running of the project. An environmental impact assessment is on-going in order to evaluate the effect on the natural and human environment.

Public consultations will run from December 6 to 20. Alcan and the Cameroonian government agreed on a set of conditions in order for this project to be realized. If they are met and the findings of the various studies are positive, Alcan and Cameroon could proceed with the expansion of Alucam. The feasibility of the project will require the construction of the Lom Pangar dam by the government, which would provide electricity for the project and the Cameroonian grid. Alcan is also considering a $2 billion-plus plan to build a new aluminium smelter in South Africa.

© 2006 Reuters

 

 

Aluminum smelter debate begins in Trinidad

Caribbean Net News, Cayman Islands - Thursday, December 7, 2006

by Stephen Cummings, Caribbean Net News Trinidad and Tobago Correspondent

Email: stephen@caribbeannetnews.com

PORT OF SPAIN, Trinidad: A major aluminum smelter symposium has begun in Port of Spain, Trinidad.

This comes at the same time as a raging debate over the setting up of smelter plants in the country announced by Prime Minister Patrick Manning.

There are arguments for and against the idea, which has forced the government to host a symposium to get the views of the public on the issue.

A number of anti-smelter groups and environmentalists in the country have condemned the government's move on smelters, citing serious health risks associated the venture.

Prime Minister Manning has sought to defend his administration's decision by saying that citizens stand to benefit in a big way, as the move will bring huge economic benefits to the country by providing temporary and permanent jobs both at the construction stage as well as in downstream industries.

"I have not heard one new idea to cause us to change our minds on smelters in Trinidad and Tobago," the Prime Minister is quoted as telling a group in Port of Spain.

He also said government will debate the issue in Parliament.

Manning also sees the setting up of smelter plants as having the effect of moving the country to what he termed "full employment".

This view, however, does not sit well with some. Many have also indicated that they have taken no comfort from the Prime Minister's words that "smelters are safe".

A number of anti-smelters groups and environmentalists are also planning massive protests against the government's decision.

 

Rusal cuts link with Nigerian aluminium smelter deal

Mineweb, South Africa - '06-DEC-06 19:00' GMT © Mineweb 1997-2006

By: John Helmer

MOSCOW (Mineweb.com) --Russian Aluminium (Rusal), a company owned by Oleg Deripaska and proposing to become the world's largest aluminium producer, is cutting its links to the acquisition of Nigeria's aluminium smelter, which Rusal announced publicly it was buying last February. That deal is being challenged by a rival bidder for the smelter, BFI Group of California (BFIG), which has gone to the Nigerian federal appeals court, and to the federal US District Court in New York, charging that it has been illegally and corruptly excluded from the Nigerian government's privatization award of the Aluminium Smelter Company of Nigeria (ALSCON) to Rusal. The 32-page claim by BFIG was filed in the US on March 16.

In a subsequent 2-page filing in the New York court, obtained by Mineweb, John Martin Parker identified himself as the sole director of Dayson Holding Limited, a limited liability company registered in Tortola, in the British Virgin Islands, which he says actually holds the interest in ALSCON. According to Parker, Dayson conducts no business in New York, and has no premises, bank accounts, or employees in New York. It had also not been served with the court claim documents lodged by BFIG.

BFIG has told Mineweb that Rusal used Dayson as a cutout, through which Rusal bought the control shareholding in ALSCON from the Nigerian government; and that in the British Virgin Islands Dayson has no known employees and conducts no active business.

In order to avoid a US court trial of the BFIG suit, Parker claims that Dayson is "an indirect subsidiary of Rusal (Jersey)", but in no other way connected to the Rusal group, or its US companies listed as defendants in the BFIG claim. Without admitting that Dayson is the legal owner of the ALSCON smelter, Parker testified that the US court should have no jurisdiction over the action.

BACKGROUND

On February 3, in a posting on the corporate website, Rusal said "it has signed a share purchase agreement to acquire a majority stake in the Aluminium Smelter Company of Nigeria (ALSCON) in Akwa Ibom from the Nigerian Bureau of Public Enterprises (BPE). The $250 million transaction will add almost 150,000 tonnes annually to RUSAL's aluminium production capacity. According to the terms of the deal, RUSAL has received a 77.5% block of shares in ALSCON, a 193,000-tonne smelter (reduction, anode-producing and casthouse areas), a port on the Imo River and a power-generating station. Germany's Ferrostaal AG and the Government of Nigeria remain minority shareholders with 7.5% and 15% blocks respectively. The $250 million purchase price will cover the purchase of the shares in ALSCON, as well as the dredging of the river. The company, together with Ferrostaal AG and the Government of Nigeria, also plans to invest an additional $150 million over the next three years to complete, refurbish and modernise ALSCON."

The announcement also quoted Rusal chief executive Alexander Bulygin as saying: "The acquisition is part of our strategy to boost aluminium production and strengthen RUSAL's position as a global company. With its technologies and expertise, RUSAL will ensure that ALSCON's products are highly competitive, transforming the smelter in a key driver behind the development of the Nigerian economy and our business in the region. Having now become one of the largest investors in Nigeria, we are ready to actively contribute to the industrial growth in the country."

"We are very pleased that RUSAL is committed to this project, which is vitally important to Nigeria and the people of Ikot Abasi in particular," the website quoted BPE General Director Irene Chigbue. "I hope that the successful divestiture of ALSCON to one of the world's largest aluminium producers will send a strong signal to the international community and persuade those investors that are wavering to invest in Nigeria."

The announcements left no doubt that it was Rusal which was taking over ALSCON, with current smelter capacity of about 200,000 tons of aluminium. ALSCON is virtually new. Partially completed in 1997, it operated for just three years on a trial basis, and has stood idle since 2000, when a combination of inadequate and costly gas supplies, and difficult transportation access by river, made production impossibly costly to sustain. According to a document submitted by Rusal to the Nigerian government in April 2004, 25% of the plant’s planned production capacity remained to be installed and made operational. That document also reveals the plant was ready enough to produce and sell enough aluminium within two years to pay off both Rusal’s acquisition offer, and its proposed operational investment.

Rusal won the bidding for ALSCON with an offer that was $160 million less than the rival bid from BFIG, which initially won the government’s privatization auction in May 2004 with an offer of $410 million. According to Nigerian press reports of the transaction, the effective price of the smelter stake was actually set by the Nigerian government’s Bureau of Public Enterprises (BPE) at $393.8 million, but Rusal was able to secure government subsidies worth $143.8 million. These comprise a subsidy, estimated by Business Day newspaper of Lagos, at $11.7 million per annum for gas to fuel the power plant for the smelter; a 20-year moratorium on increases in the gas price; and government funding of the cost of dredging the Imo River estimated at $160 million. The river, which is the key to access to and for the plant, is described by the BPE director-general Irene Chigbue as "like a highway. It is a mode of transportation. It is not the property of ALSCON."

Rusal spokesmen have repeatedly refused to answer Mineweb’s questions about the transaction terms. These have been reported in Nigeria as limiting Rusal’s initial payment to $50 million, and making payment of the balance conditional on completion of river dredging and access. According to BFIG and US court submissions, Rusal has not made the $50 million down-payment for the ALSCON award, the deadline for which, according to BFIG, passed eight months ago. BFIG spokesman Frank Scherer told Mineweb: "It must be recognized that it is Dayson Holding, not Rusal, that has legally acquired ALSCON. This becomes especially confusing as Dayson takes all possible steps to distance itself from Rusal in its declarations. In addition, Dayson's $1 million bond to be qualified to bid for ALSCON never did appear, despite DG Chigbue's promise to deliver it to the [Nigerian] House of Representatives Committee on Privatization and Commercialization."

Responding to the initial filing of the US lawsuit by BFIG, Rusal announced that it "fails to see a rationale for the lawsuit to have been lodged with the U.S. court. The Russian company believes the legal claims are groundless, rejects all accusations on their merits and believes the suit is nothing more than a public relations action staged by BFIG to attract attention and, possibly, to put pressure on the Government of Nigeria."

Rusal said it was thinking of counter-suing BFIG "for damages to the reputation of the Russian company." It claimed that BFIG's initial winning bid for ALSCON "was disqualified by the Government of Nigeria (the National Council on Privatisation) for non-compliance with the tender conditions." Rusal, the statement went on, "was invited to participate in the negotiations regarding the purchase of ALSCON's shares after BFIG had been disqualified. RUSAL signed a share purchase agreement to acquire a majority stake in ALSCON from the Nigerian Bureau of Public Enterprises in February 2006."

The Rusal publications do not mention Dayson. Recently, when Rusal announced details of a proposed mega-merger with SUAL of Russia and alumina refineries of the Swiss-based Glencore group, there was no mention of the inclusion of ALSCON. However, bauxite mines and an alumina refinery in Guinea were identified as African assets to be included in the proposed merger, currently under review by regulatory authorities. Asked this week to clarify the company's relationship with Dayson, Rusal spokesman Vera Kurochkina declined to respond.

According to BFIG , Rusal is hiding behind Dayson, but never legally qualified for the bidding because Dayson did not pay its bid bond. BFIG’s bond, it is alleged, was paid, but not returned by the government. Contract terms for the asset contest were rewritten by Nigerian officials, BFIG charges, so that Rusal could win, with minimum commitment of its own cash, and legal liability diverted to a shell company in Tortola.

According to a non-binding resolution of the Nigerian House of Representatives, issued on April 28, 2005, after a review of the bidding process by the parliamentary Committee on Privatization and Commercialisation, BFIG’s bid had been cancelled "without any valid or legal reason", while the action of BPE and the Nigerian presidency, taken in favour of Rusal’s offer, "amounts to corruption and fraud to the Nation."

 

Alcan Inc. completes acquisition of France's Carbone Savoie for US$135 M

CBC News, Canada - Wednesday, December 6, 2006 | 5:47 AM ET

PARIS (CP) - Alcan Inc. (TSX:AL) announced Wednesday it has completed its acquisition of the remaining 70 per cent stake of France's Carbone Savoie for US$135 million.

The takeover also includes some related technology and equipment from GrafTech International Ltd. The Montreal-based aluminum giant first announced its takeover intentions in October.

"With Carbone Savoie now part of the Alcan family, the company has strengthened its commitment to aluminum smelting technology development in Europe and more particularly in France," said Michel Jacques, president and CEO of Alcan Primary Metal Group.

Carbone Savoie makes cathode blocks, which are essential to the production of aluminum as they act as conductors in the electrolysis process. It has some 500 employees at two sites, both near Alcan's facility in Vereppe, France.

Alcan has about 65,000 employees in 61 countries and regions. It posted revenues of US$20.3 billion in 2005.

© The Canadian Press, 2006

 

Metals self-reliance is Beijing's new mantra

The Australian, Australia December 07, 2006

China is taking charge of its underdeveloped resources sector, writes Richard McGregor in Maashan

CHINA has long excelled at manufacturing. Now its firms are applying the same ruthless business methods to increasing production of mined and refined raw materials to meet swelling domestic demand and cash in on high commodities prices.

This resources mini-boom has produced scores of mines like the one under construction in the rough hills near the Maashan steelworks in central China, where gangs of workers are racing to dig up enough iron ore to meet the company's target of doubling steel output within three years.

Even amid this frenzy of growth, executives at the state-owned Maashan cast a jealous eye at the breakneck expansion of privately owned mines elsewhere in Anhui province.

"We are making a stable transition from old to new mines, to make sure that our dependence on imports will not increase," says Cui Xian, in charge of mining at Maashan, China's ninth-largest steel maker. "But the private mines can go even faster. They only have to choose an area where it is easy to mine."

China's hunger for natural resources is being felt around the world, from the iron ore mines of outback Australia to the oil fields of Sudan, and has been a big factor in forcing up global prices to generational highs. But along with this has come the rush to lift output at home. State enterprises like Maashan have tied up resource deposits but the biggest impetus has come from private firms. China's publicised forays offshore in search of raw materials and oil to feed double-digit annual growth of its economy have overshadowed the fact that it remains a nation rich in many resources. About 90 per cent of China's primary energy needs are supplied locally.

Although that figure will decline over time as oil imports rise, it still sets China apart from neighbours such as Japan, South Korea and Taiwan, which have relied almost entirely on imports and nuclear power. Local producers have heftily lifted domestic output of alumina, copper, zinc, coking coal, lead and iron ore over the past 12 months. The same advantages enjoyed by Chinese manufacturing are at work in the resources sector.

Producers have access to cheap capital and labour and pliant local governments desperate to attract business to their regions.

The expansion has also produced the same problems that bedevil China's economic development in general. Coal-mining accidents kill around 5000 workers a year, although reliable figures are elusive. Mines have wreaked havoc on the environment. In addition, the jump in domestic output has for some minerals brought global prices down, just as Chinese overcapacity in manufacturing has for consumer goods.

The central Government has also boosted the resources sector, by giving freer rein to entrepreneurs and, to a limited extent, foreign investors, to kick-start production and help meet demand. Until recently, the resources sector was closed to local private and foreign investment.

Alumina, the powder refined from bauxite that is used to make aluminium, has seen the biggest growth. High global prices and a decision by the Government to allow private entrants into a market dominated by a state monopoly is forecast to push Chinese production up from about 4.3 million tonnes a year in 2000 to more than 27 million tonnes by the end of the decade. The Government protected the alumina monopoly by the state-controlled Chalco before and after its foreign IPO in late 2001, to ensure the listing was successful.

But when local smelters complained about how shortages of alumina were driving up prices and leaving them short of the raw material, the Government opened up the industry. With huge profits to be gained from getting alumina to the market quickly, private firms, with the support of local governments, poured money into new plants. So rapidly did production rise that China will go from being an importer of 7 million tonnes of alumina in 2005 to a net balance in 2008.

"It had been in the making for about two years, but once it was unleashed it came through in a torrent," says Jim Lennon, of Macquarie Research, in London.

With little need for the kind of feasibility studies required by multinationals to test their business and environmental cases, the plants were built cheaply and quickly. The explosion in production of alumina has reverberated around the world. Global prices have slid from a high of $US650 a tonne earlier this year to about $US250 now. Many of the plants built in the past two years, which are uneconomic at below $US300 a tonne, will have to close.

The rapid construction of iron ore mines, prompted by a 70 per cent increase in global contract prices in 2005, also comes with a self-destruct button. The new mines, which have pushed Chinese production up by about 40 per cent this year, are mainly in drought-stricken northern China and use scarce water.

On top of this, the focus on quick profits and the poor quality of Chinese ore - about 10 tonnes of dirt need to be dug up to find a tonne of ore - is devastating the environment around the mines. In the short term, however, the mines have delivered fat profits.

"Based on current market prices, the rule of thumb is a one-year return period on equipment investment and a three-year return period on total investment," says a Macquarie Research report.

 

 

National Symposium on the Aluminum Smelters

Trinicenter.com, Trinidad and Tobago December 11, 2006

by Christopher E. M. Castagne

The symposium on the aluminum industry in Trinidad and Tobago which took place this past Wednesday was the most positive development in the entire smelter issue so far. For the first time in this two year old debate, the nation was presented with credible, relevant and current information on all of the major aspects of the proposed smelters. This included information and research on the economic, social, engineering, legal, and environmental concerns and implications, as well as on the Global Aluminum Industry, presented by local and international experts with decades of experience.

Sadly, the huge significance of what transpired was totally missed by the press, and, to a lesser extent, the general public. The press seriously disappointed by only attempting to perpetuate the much abused and clichéd assumption that Trinidadians like bacchanal in looking for some sort of action story, and totally sidelined the actual content of the proceedings in their coverage of the event. That aside, if the conspiracy theorists could let go for a split second the fact the symposium was mandated by the Prime Minister and given to the NEC, an acknowledged serious conflict of interest, but realize that in the end neither party had any controlling interest or significant input into the proceedings, they might just be able to recognize some of the resounding victories scored by the people of this nation in the process.

In fact, perhaps the most significant implication of the entire venture lies in the final outcome, that was so far from what was originally anticipated (or dreaded, rather), and in the fact that in hosting such, the organizers, principally the South Chamber of Industry and Commerce, were so resoundingly successful at meeting the highest demands of the concerned public in terms of presenters and content of presentations, composition of invited audience, live coverage for the public (two TV stations, broadcasting on three channels, two local and one cable, as well as radio) and even public opportunity for live participation, via the Internet. While it deserves commendation, their success is not the significant part; that it was solely due to the overwhelming public pressure that these conditions were successfully met is! If one were to look closely, one would realize that this has largely been the story with each stage of this struggle so far. Further, to extrapolate that experience into the future, we would be all well-advised not to pay any heed whatsoever to whatever cries, claims or lamentations of "done deals" we hear floating around, and to understand, with conviction, that the truth shall always prevail in the end; and that with perseverance, comes success!

To expand on some of what was mentioned above, the following is a short report on some of the salient outcomes from the symposium.

Energy Minister Lenny Saith’s short contribution was simply to outline Government's justification for the proposed smelters, the main benefits identified as monetizing natural gas, technology transfer, economic diversification (including possible downstream industries), sustainable jobs and wealth creation. About the concerns raised, he simply said that an (unspecified) proportion of Alcoa’s produce would be sold for local use, that relocation would be carried out with respect and dignity and that the smelters will be subject to the "rigorous regulatory process" to ensure they comply with the Town & Country and EMA legislation. Absolutely no scientific or empirical evidence, no facts or figures, were used to support his claims, each of which was later picked to pieces and shown to be at best unlikely, at worst totally false! And this was done by unemotional, objective intellectual experts and authorities who clearly outlined their points and provided undisputable supporting research.

First, Colin Pratt, an international expert in the aluminum business, gave an insightful overview of the global aluminum industry. He showed aluminum to be a high demand product with a huge, expanding and secure market, and showed Trinidad as an ideal location for smelting due to relatively clean energy at a competitive price and favourable positioning to raw material (e.g. from Jamaica) and market (Europe and North America). He also mentioned that out of the original big six companies who controlled the business worldwide, Alcoa was one of the only two remaining and the only one with the original guarded, vertically integrated structure. He also mentioned that due to recent increases in transparency in power regulations and energy prices aluminum companies were finding it difficult to set up smelters in first world countries! Additionally, he said he found the argument about downstream industries curious as these are usually situated much closer to the market, i.e., in Europe or America, and would not work easily in Trinidad.

All of these points were of much interest during the economic presentation by Mr. Gregory McGuire, a leading economist, former Chairman of NGC and current UWI lecturer. McGuire confirmed that the current industry price for natural gas in Trinidad and Tobago is too expensive to attract smelters. Based on estimations for the price of natural gas that would be required for the Alcoa smelter to be economically feasible, he showed that the country would be generating significant losses from the enterprise, especially with Alcoa maintaining 100% interest as is the case. In terms of economic diversification, McGuire mentioned that the smelters would only achieve diversification within the energy-based industry and use of natural gas, but that Trinidad currently already has one of the most diversified gas portfolios in the world, thus nothing new would be accomplished. Entry into the global aluminum market via production of aluminum and downstream products he saw as having positive economic potential for the country under certain conditions, which the listener was able to realize are basically not being met by the Alcoa smelter. In terms of downstream spinoff industries, the case of local steel production was recalled as having been similarly justified, with the anticipated downstream activities never materializing! More than one presenter would subsequently agree that these can still take place in Trinidad, without the presence of any smelters, based on imported aluminum as in Japan, where such activity is thriving.

Dr. Roy McCree presented just before McGuire. McCree is an accomplished social scientist and lecturer, born and bred in Pt. Fortin, who has done extensive research on the impact of industrialization on the socio-economics and quality of life of Point Fortin, La Brea and the entire southwestern peninsula. He began by highlighting the diversity in size, demographics, history and lifestyles of the various communities in the peninsula and environs, exposing the common notion of a single homogeneous mass as far from reality and illustrating the doomed nature of any "one size fits all" approach to developing the area. He proceeded to put the issue into important historical and current context, with the La Brea and Pt. Fortin experiences of the oil industry up to the mid to late 20th century and Atlantic LNG at present, respectively. Using hard facts, he showed how general increase in economic activity to the area associated with industrialization usually results in only minimal socio-economic benefits to the pre-existing residents, as the more sustainable and higher paying jobs always go to persons from outside the area. He also reminded the audience that the positive social contributions to the La Brea area in the days of the oil refinery only came about as a result of the fierce rioting in the 1930s, and were not due to "philanthropic" philosophies of the oil companies!

Other speakers (Prof. John Spence) showed how intended objectives of sustainable jobs and economic activity and improvement of socio-economic situation and quality of life could be achieved without the presence of any smelter per se, i.e., alternative development, including agriculture and downstream aluminum industry based on imported aluminum which could be smelted in Guyana using renewable energy, vast uninhabited land space, and promoting Caribbean integration.

Prof. Julien Kenny reinforced this possibility and suggested such activity would be far more along the lines of the Caribbean Aluminum Industry as envisioned by Dr. Eric Williams. He also outlined government’s breach of local legislation and international treaties and agreements, and highlighted the lack of legislative infrastructure to manage and control these industries and recent examples of very serious consequences of this lack of environmental management on a small scale. Health effects were shown to be minimal when the industry is subject to proper precautionary practice, for which legislation and enforcement power are most necessary. (Recent experiences of our Caribbean neighbours in Jamaica highlight our vulnerability to the unscrupulous activities of these multinationals, specifically Alcoa (See T&T Review- Monday Dec. 4th article by John Maxwell p. 10).

Note: After 12 years in court and exhausting all appeals, when Alcoa was finally commanded to pay money to one villager for damages caused to his roof and house, the company made it clear that it was not going to accept that as any reason to repay the remaining 59 households who also sustained damage, leaving them the possibility of having to pursue the cases in court one by one! (See www.jamaica-gleaner.com/gleaner/20010417/lead/lead1.html)

NOTE: All papers available at www.stcic.org/symposium/index.htm

(except McGuire)

 

Alcan to Invest US$9.5 Million for Automotive Sheet Upgrade at Neuf Brisach Plant in France

PR Newswire UK (press release), UK - Monday 11 December 2006

PARIS, France, December 11 /PRNewswire/ -- Alcan will invest US$9.5 million in its Specialty Sheet facility at Neuf-Brisach, France, to upgrade its existing automotive continuous annealing and quenching line. The project is scheduled to come on stream in the first half of 2008.

"By improving the quality and expanding product and process capabilities, this investment will further strengthen Alcan Specialty Sheet's position as a major player in the aluminium automotive market in Europe and demonstrates Alcan's strategic commitment to this market," said Christel Bories, President and Chief Executive Officer, Alcan Engineered Products.

The investment will significantly improve the aluminium strip's surface and mechanical properties, to better satisfy current customer requirements and anticipate future developments in the aluminium car body market. It will further enhance Neuf-Brisach's environment, health and safety profile.

"Alcan Specialty Sheet is a leading supplier of premium sheet products to the automotive industry, supported by unique R&D capabilities and efficient recycling solutions," said Christophe Villemin, President Alcan Specialty Sheet, "This investment is part of a continuing strategy to better align the Neuf-Brisach plant's capabilities, positioning it as a world-class manufacturing centre for automotive sheet, can stock and recycling," he added.

In May, Alcan announced that it was investing US$15 million in Neuf Brisach to add state-of-the-art aluminium can body trimming and slitting capacity, and an associated complementary packing line and new storage and dispatching capacity. In November, a further US$7 million was announced to add new capacity to recycle used aluminium beverage cans.

Alcan Specialty Sheet is a key player in the European rolling industry, and occupies leading market positions for beverage can and closures, automotive, customized industrial sheet solutions including high quality bright surface products. It includes world-class rolling and recycling operations in Neuf-Brisach (France) and Singen (Germany), as well as dedicated R&D capabilities in Voreppe (France) and Neuhausen (Switzerland). Alcan Specialty Sheet employs 2,500 people.

 

 

Alcan gets status in lawsuit between smelter town and B.C. government

Winnipeg Free Press, Canada - Tuesday Dec12 2006

VANCOUVER (CP) - Alcan has won full-party status in a lawsuit launched by the town of Kitimat against the B.C. government over the company's use of hydro power.

Alcan sought to be included as a full party in the legal action, but a lower court judge ruled it deserved only intervenor status. The B.C. Appeal Court has overturned that decision, saying Alcan has a lot at stake in the case and should be considered a full respondent.

The District of Kitimat is challenging a government order that allows Alcan to sell power from its Nechako hydro station instead of requiring the company to use the power to make aluminum and create jobs.

Kitimat claims the power should be used for the development and benefit of B.C.'s northwest, not to make profits for Alcan.

Mayor Richard Wozney says the population of his town has dropped by up to 3,000 since Alcan started selling power while cutting back on aluminum production.

 

 

RusAl Borrows $200M

The Moscow Times, Russia Thursday, December 14, 2006. Issue 3561. Page 6.

Russian Aluminum, the world's No. 3 maker of the metal, borrowed $200 million from a group of banks to refinance its purchase of a stake in the world's biggest alumina refinery.

The credit will be used to refinance the purchase of 20 percent of Queensland Alumina, operator of the world's largest smelter of alumina, a semi-product used to produce aluminum. RusAl, owned by billionaire Oleg Deripaska, bought the stake for $401 million from Kaiser Aluminum in May. (Bloomberg)

 

Columbia Falls Aluminum Co. claims 807 acres of land it owns is worth $1

Columbia Falls Hungry Horse News, MT 13 Dec 2006

By CHRIS PETERSON

Hungry Horse News

The Columbia Falls Aluminum Co. has protested its tax valuation and if it's successful, it could put a big dent in the Columbia Falls school district's budget.

Currently CFAC pays about $289,000 to the elementary side of the budget and $128,774 to the high school budget. If their protest is successful, the elementary would get about $165,000 and the high school $73,500.

In short, the tax appeal has the potential to be a rather large hit to the school's budget.

The company is seeking a 4/7 reduction in valuation, from $69.5 million to $29.5 million, school Superintendent Michael Nicosia told the board Monday. CFAC is a wholly owned subsidiary of the Swiss-based Glencore Corp.

It currently operates one of five potlines at the plant, though it's in the process of adding about 130 jobs in anticipation of starting up more capacity early next year.

CFAC filed the tax protest earlier this fall and the Flathead County Tax Appeal Board ruled in favor of the Department of Revenue.

But CFAC has now appealed its case to the State Tax Appeal Board and if the company isn't satisfied with that ruling, it can take its case to district court, said Scott Williams, regional manager for the Department of Revenue in Kalispell.

Company spokesman Haley Beaudry said the company hired an independent assessor to determine the value of the plant. He claimed that assessment found the plant was worth far less than what the state claimed.

CFAC has already received a reduction in its assessment. Earlier this year the Department of Revenue dropped the valuation of the plant from about $80 million to $69.5 million, noted Conrad Peterson, an appraiser with the Department of Revenue.

But Beaudry noted that other idled plants in the Northwest are being scrapped because they're not worth much.

But CFAC isn't just about buildings and equipment. It also owns about 807 acres of land. According to its appeal to the county, the company claims the acreage is worth $1 and the plant and equipment is worth about $27 million, as stated by the company's financial controller, Robert L. Vixie.

The state values the land at about $2.89 million.

The state tax appeal probably won't be heard until next summer. The company has paid its November 2006 tax bill, but when a protest is filed, the difference between the company's appeal and the state valuation is held in escrow until the appeal process is completed, explained Peterson.

Meanwhile, county and school budgets will have to make up the difference through reserves.

Nicosia said the bottomline is if CFAC is successful, it will put more of the tax burden on residential homeowners

http://www.hungryhorsenews.com/articles/2006/12/13/news/news1.txt

 

Ghana: Despite $1.5b Investment & $100m Windfall

Ghanaian Chronicle (Accra) December 13, 2006

Emmanuel Akli, Port-of-Spain

While Canadian-owned ALCAN, which owns Ghana Bauxite in Tarkwa has been having it cool with residents of Western Region, where they mine for the fast depleting resource and have continued to resist worker agitation for a hike in the stagnant rates charged per tonne hauled by Ghana Railways, their American counterpart, ALCOA (American Aluminium Company)has run into a major national storm in the Carribean.

The decision by the government of Trinidad and Tobago in the caribbean to grant this aluminium giant, a permit to construct a $1.5 billion aluminium smelter plant to refine bauxite mined from Jamaica and Surinam into aluminium and export to the American market has sparked off heated debate in the country.

In Ghana, the Volta Aluminium Company (VALCO) and neighbouring ore aliminium producers, who depend on the precious metal for the production of their end products like roofing sheets, pots and pans have rolled out the red carpet for Alcan, who are setting up near Kibi to mine and produce the raw material, bauxite with Government support and that of the custodians of the land, the Okyehene, Osagyefo Amoatia, a noted environmentalist.

In Trinidad, though the government led by the Prime Minister, an oil geologist, Mr. Patrick Manny has vowed to see to the execution of the project in the south eastern part of the island, majority of the people are opposed to the project for fear that it might diminish the gas reserves of the country and pollute the environment.

The government is keen on seeing to the execution of the project because of the expected $100million that will accrue to the country annually. The project is also expected to create 2500 jobs downstream. In a country that has an unemployment rate as low as 5% the government hopes to beat down the figure possibly to zero percent to make life bearable for the people.

But the people living in the village of Charttan, where the project is to be sited and the opinion leaders in the country do not see this as beneficial and have vowed to use legal means to stop the project.

It is common to see people at the capital, Port-of-Spain wearing red bands and chantting anti smelter slogans.

Prof. Julian Kenny, a chemist by profession and one of the leaders crusading against the project told reporters from Canada including yours truly that government had not taken into consideration the negative effect of the project and that it was concerned only about the benefits.

He noted that the government of Trinidad and Tobago (TT) is able to meet its annual budget of $58 billion.

The currency for TT is also a dollar. The US dollar is exchanged for 6 TT dollars.

According to Kenny if the government was able to raise such a budget then he did not understand why it should be rushing for the $100 million that would accrue to the state from the project.

According to the University of Toronto-trained professor, the government of Mr. Patrick Manny has also hidden a lot of information about the project from the people of TT. He said they do not know how much the government was going to sell the gas that would fire the smelter plants of ALCOA from the country's gas and oil fields.

Apart from this, he noted, gas is a non-renewable natural resource and that if it is depleted the people of TT are going to suffer. He noted also that Trinidad with such a small geographical area does not need such plants because it could pollute the environment.

He revealed that they as opinion leaders might take legal action against the government to stop the project because the latter has also breached the environmental laws of the country.

"It is contemptuous of the people to breach the laws of the land so we might file an injunction to stop the project since the $100 million taxes that will accrue to us is not important than the health of the people," he said. An opposition leader, Mr. Winston Doonkeran, in an interview with reporters confirmed that the government had indeed hidden a lot of information about the project from the people of TT. Mr. Dookeran, who is an economist and former governor of the central bank of Trinidad and Tobago, however said he would not rush to condemn the project until he had laid hands on all the financial aspects of it.

When this reporter and other colleagues travelled to the village of Charttan, where the project would be sited, the people who are mostly of Indian and African origins vowed that their heads would have to be chopped off before the project could go on.

According to them Trinidad is a small island and that they would have nowhere to go to, if their lands were taken away from them for the project.

They also accused their government of allowing Americans to use TT as their base to produce materials for their war machines.

Despite all this hullabaloo, the prime minister, Mr. Patrick Manny appeared on television last week to say that no matter the level of protestation against the project, his government will still go ahead. The government has a vision to turn the oil and gas rich island into a developed state by the year 2020.

Trinidad and Tobago, which lies just seven nautical miles off the coast of Venezuela, is the biggest supplier of liquefield natural gas to the United States. It is also the world's leading exporter of methanol and ammonia. Experts however say the gas has only a 20-year life span and that it could be used up even before the anticipated date if the ALCOA project comes on board.

Trinidad and Tobago is the leading economy in the Caribbean. Every single road in the capital, Port-of-Spain is asphalted. The same applies to every road leading to the various parts of the country. The northern part of the island is entirely mountainous, thus leaving only the southern sector for the people to settle.

The island also has nothing like what we call villages in Ghana. Buildings in the villages are comparable to those found at East Legon in Accra.

Their major problem however is traffic jams at the capital and a high crime rate. Last year for instances 390 murder cases were recorded in a country that has a population of just 1.3 million people.

This has compelled the government to spend more on security. This reporter noted whilst lodging at the capital Port-of-Spain last week that every 30 minutes helicopter flies around the island especially along the sea border with Venezuela.

Security devices have also been parachuted into the sky to monitor the activities of people in the capital.

 

 

Alcan expected to make huge smelter announcement in Saguenay, Que.

CBC News Thursday, December 14, 2006 | 12:43 PM ET

SAGUENAY, Que. (CP) - Alcan is expected to announce Thursday it will build a high-tech smelter that will produce more metal and create hundreds of jobs in the Saguenay-Lac-St-Jean area, about 250 kilometres north of Quebec City.

Premier Jean Charest and Alcan president Dick Evans are scheduled to make an announcement in the city of Saguenay this afternoon. The project will be done in several phases and will require new hydroelectric dams, sources say. The smelter will use new technology called AP50, which uses more electricity and allows more metal to be smelted.

Alcan announced earlier Thursday it is boosting its aluminum research-and-development centre in France, creating over 50 technology and engineering jobs as it spends US$70 million in the Rhone-Alpes region.

The company has set a target of developing a 20 per cent more energy-efficient and environmentally friendly smelting technology.

"Alcan is aggressively pursuing breakthrough aluminum technologies to address rising energy costs and increased environmental expectations," Michel Jacques, CEO of Alcan Primary Metal, told employees at the company's R&D centre in Voreppe.

Alcan's overall technology spending will total US$70 million in 2007 in the Rhone-Alpes region, with the R&D centre creating more than 50 new technology and engineering

The company recently strengthened its technology with the US$135-million acquisition of Carbone Savoie, a global leader in the design and production of cathode blocks. Cathode design is critical in the aluminum electrolysis process.

Alcan employs about 1,200 people in R&D activities throughout eight sites, including sites dedicated to aluminum technologies in Arvida, Que., and in St-Jean-de-Maurienne and Voreppe, France.

© The Canadian Press, 2006

 

Alcan launches breakthrough aluminum technology initiative in France

CNW Telbec (Communiqués de presse), Canada December 14, 2006

TARGETS 20 PERCENT MORE ENERGY EFFICIENT, ENVIRONMENTALLY FRIENDLY CELL STRENGTHENS RHONE-ALPES REGION AS INNOVATION PLATFORM

RHONE-ALPES, France, Dec. 14 /CNW Telbec/ - Alcan is launching a research

and development (R&D) initiative centered in France and focused on its leading

AP series aluminum smelting technology. This is part of Alcan's new R&D

strategy, based on the core competencies of the Company's two R&D hubs in

France and Canada. The Company has set an ambitious target of developing a 20

percent more energy efficient and environmentally friendly cell through the

accelerated introduction of new innovative technologies.

"Alcan is aggressively pursuing breakthrough aluminum technologies to

address rising energy costs and increased environmental expectations," said

Michel Jacques, President and Chief Executive Officer, Alcan Primary Metal,

while speaking to employees at the Company's R&D Centre in Voreppe. "In line

with Alcan's objective of maximizing long-term sustainable value, this

initiative will harness a combination of existing and emerging technologies,

focused on developing a more energy efficient and cleaner smelting process,"

added Mr. Jacques.

Alcan's key Rhône-Alpes R&D hub in France will strengthen its position as

an innovation platform focused on breakthrough aluminum technologies, creating

more than 50 new technology and engineering jobs. This will be supported

through Alcan's overall technology spend totalling US$70 million in 2007 in

the Rhône-Alpes region.

Alcan will conduct this advanced cell technology R&D at its centres in

Rhône-Alpes and continue to enhance the development of its leading AP30 Series

technology at its St. Jean-de-Maurienne platform. Over the past ten years, AP

Series technology has become the smelting technology-of-choice for the

majority of the world's newly installed capacity, outside China and Russia.

The Company has also further strengthened its technology platform in the

Rhône-Alpes through its recent US$135 million acquisition of Carbone Savoie, a

global leader in the design and production of cathode blocks. Cathode design

is a critical factor in the performance of reduction cells in the aluminum

electrolysis process.

"These recent developments and this new R&D initiative, anchored in the

Rhône-Alpes region, will not only reinforce France's importance to Alcan, but

also the Company's position as the world's centre for leading aluminum

smelting technologies. These activities will be coordinated closely with

Alcan's R&D efforts in Canada," continued Mr. Jacques.

In 2005, Alcan achieved record technology sales and invested US$227

million in global R&D. The Company employs approximately 1,200 people in R&D

activities throughout eight sites, including sites dedicated to aluminum

technologies in Arvida (Canada) and in St. Jean-de-Maurienne and Voreppe

(France). The Company's R&D network includes research laboratories, Applied

Engineering Centres and plant technical departments covering all major markets

and regions.

Since it combined with Pechiney in 2003, Alcan has continued to develop

its new unrivalled AP50 smelting technology at its Rhône-Alpes R&D hub. AP50

operates at an unsurpassed 500 kilo amperes (kA) and is focused on increased

productivity and the reduction of full economic cost. AP50 technology is now

ready to move from its research phase to industrial development.

 

With power on, production to restart at long-dormant Ormet plant

Centre Daily Times, PA - Associated Press

HANNIBAL, Ohio - The first new batches of aluminum will be poured next week at Ormet Corp.'s southeast Ohio plant months after the end of a year-and-a-half strike that shuttered the site, a company spokeswoman said Thursday.

The opening had been delayed while the company negotiated how much it would pay for power.

One of the plant's production lines will begin making aluminum on Tuesday, and employees will continue preparing the other five to restart, spokeswoman Linda Regelman said.

Reopening the plant is a bright spot for employees, who are trying to rebound after the strike, and the company, which is shutting down its only two other plants by the end of the year, a union official said.

"A lot of people had kind of written this plant off. They thought it would never restart, and I think we're going to prove a lot of them wrong," said Loren Hartshorn, president of the Steelworkers Local 5724.

The Canonsburg, Pa.-based company is in the process of recalling members of the United Steelworkers who went on strike in 2004 after workers refused to accept court-approved concessions to help Ormet emerge from Chapter 11 bankruptcy.

About 1,200 workers at the plant and a separate rolling mill in Hannibal joined the strike, but 500 were laid off when Ormet closed the mill, which rolled aluminum into sheets, and sold its assets.

Union workers ratified a new contract in July. The company expects about 600 workers from the Steelworkers Local 5724 to return, and up to 400 new workers could be hired once all the production lines are reopened in the spring, Regelman said.

The company negotiated with American Electric Power for months after the labor dispute was settled, saying it needed to secure affordable electricity to make reopening the plant profitable.

"It's been a long road," Regelman said.

Ormet's new power agreement was approved by state regulators last month and, after workers prepared smelting pots to restart, electricity was turned back on Monday.

About 500 union members are back at work, and people laid off from the rolling plant will receive first consideration for open positions at the remaining plant, Hartshorn said.

Before the labor dispute, Ormet was the largest employer in Monroe County, which has the state's highest unemployment rate at 8.4 percent.

Work starting at the plant is a welcome change in Hannibal, which hugs the Ohio River, said Steve McHenry, a 28-year Ormet employee who was called back to his job in July.

"This company is a lot of the tax base for the county," McHenry said. "And it really makes a difference to Monroe County."

Ormet currently employs about 900 people at its plants in Ohio and Louisiana, but 300 of those jobs will be lost when the two Louisiana plants close at the end of the month, Regelman said. The company sold plants in West Virginia and Indiana last year.

 

 

Alcan Says Absence of Chinese Power Contracts Curbs Investments

Bloomberg 15-Dec-2006

By Dale Crofts

Dec. 15 (Bloomberg) -- Alcan Inc. Chief Executive Officer Dick Evans said an absence of long-term power contracts in China is curbing the company's investment there, even while Chinese demand for aluminum is increasing about 20 percent a year.

``We think over time China is probably not the ideal place to have low-cost primary smelting,'' Evans said yesterday in an interview in Saguenay, Quebec. ``We would be looking for much better visibility on longer-term power contracts, which are not in existence in China today. They are year-to-year contracts.''

Alcan, based in Montreal, doesn't plans to invest in a 250,000 metric-ton-a-year expansion at China's state-owned Qingtongxia Aluminum Group, Evans said. The company paid $150 million for a 50 percent stake in a 150,000 ton production line at Qingtongxia, in western Ningxia autonomous region, in 2004.

About half the electricity used at Alcan plants is supplied by the company's own generators, compared with an industry average of 25 percent. Alcan is targeting 55 percent of its total smelting costs to be in the lowest quartile of world output.

``It's a positive profitable facility today but is a third- quartile facility in world economic terms,'' Evans said of Qingtongxia. ``The capital cost in China is lower but the operating costs are fairly high, and particularly power is high.''

China may account for 34 percent of aluminum consumption by 2010, up from 13 percent in 2000, according to Toronto-based Canaccord analysts Gary Lampard and Orest Wowkodaw.

To contact the reporter on this story: Dale Crofts in Chicago at dcrofts@bloomberg.net .

 

Romanian prosecutors probe into disputed privatization of aluminum smelter

International Herald Tribune, France - December 15, 2006

BUCHAREST, Romania: Prosecutors have launched a corruption investigation into the 2002 sale of Romania's largest aluminum plant, Alro Slatina, authorities said Friday.

The auction was contested by some of the world's biggest aluminum producers and was criticized by the World Bank at the time for lacking transparency.

The Anti-Corruption Department said in a statement that prosecutors have begun an investigation into suspected corruption associated with the sale. Investigators are looking into whether the smelter was intentionally sold at a lower price than its real value in exchange for a bribe, private news agency Mediafax reported.

Conef, a U.S.-owned company, part of the Marco Group which already controlled 42 percent of the stock, bought about 10 percent of the shares to obtain a majority stake of the Alro aluminum plant for $11.4 million.

Companies interested in buying Alro_ including Alcoa Inc. of the United States, Canada's Alcan Aluminum Ltd. and France's Pechiney — gave up their pursuit of Alro, claiming the government favored Conef in a process unfairly weighted against them.

 

Kaiser Aluminum appointed Martin Carter to the position of vice president-general manager

Los Angeles Business, CA - 15-Dec-2006

Kaiser Aluminum appointed Martin Carter to the position of vice president-general manager, common alloy products, effective at the beginning of the first quarter of 2007, the company said Friday.

In the newly created position, Carter will oversee common alloy extrusion and forging operations for the general engineering, automotive and custom industrial markets.

Carter previously spent 16 years at Norsk Hydro and most recently was president of Hydro Aluminum North America.

 

Tajik, Russian builders begin damming mountain river to construct major power station

Kyiv Post, Ukraine - Dec 15 2006, 17:18

DUSHANBE, Tajikistan (AP) - Tajik and Russian builders on Friday began damming a mountain river after diverting it by a series of explosions as part of a major joint power station project, officials said.

About 400 tons of explosives were used to divert the Vaksh River into two large concrete tunnels to allow construction of a dam for the Sangtuda 1 hydroelectric station, said the project's construction chief Alexander Ryabinkin.

The blocking of the Vaksh was to reduce by half the production of the upstream Nurek power station, which generates almost 70 percent of the ex-Soviet republic's electricity. That was to cause a one-day nationwide blackout beginning at 11 p.m. (1800GMT) on Friday.

Only strategic facilities, government buildings, military facilities and hospitals were to be supplied with electricity during the 24-hour outage.

The 670-megawatt-hour Sangtuda power station, about 110 kilometers (68 miles) southeast of the capital Dushanbe, is expected to become operational in 2009. Russia's Unified Energy Systems owns 75 percent of the $480 million project and the Tajik government holds a 25 percent stake.

Russia began construction of another major power station in Tajikistan last year, also on the Vaksh. The more than $1 billion project to build the Rogun power plant is being funded by Russia's main aluminum maker, Rusal.

The Rogun and Sangtuda power plants _ the country's largest energy projects _ were started by the Soviet government and abandoned during a civil war that broke out in Tajikistan in 1992. The war between the Moscow-backed secular government and the Islamic opposition ended with a power-sharing agreement in 1997.

The completion of new power plants will allow Tajikistan to satisfy its own energy demands and sell electricity to neighboring countries.

Tajikistan currently produces 17 billion kilowatt-hours annually and imports 4 billion from neighboring Uzbekistan.

President Emomali Rakhmonov, who attended the ceremony of blocking the Vaksh on Friday, called the event "another step toward Tajikistan's energy self-sufficiency."

The Central Asian nation is wracked by the massive flow of heroin from neighboring Afghanistan and rampant unemployment. An estimated 1 million of the country's 7 million people have left searching for jobs in Russia or other former Soviet republics.

 

RUSAL Starts Aluminum Plant in Khakassiya

Financial Information Service(Registration), Russia - 15.12.06

ABAKAN, December 15. /FIS/. Rusal Aluminum Plant of the capacity of 300 thousand tons of aluminum per annum will be put online on Friday in Khakassiya. This is the first enterprise in Russia with the use of the most advanced Russian and foreign technologies that was built in Russia during the last 20 years, said Head of the HAZ Construction Project Vasiliy Sobolev.

 

SUAL Plans to Start Construction of Aluminum Plant in Kazakhstan

Financial Information Service(Registration), Russia - 15.12.06

MOSCOW, December 15. /FIS/. 'SUAL' Group is planning to start the construction of a USD1.5 Billion aluminum plant in Kazakhstan (Ekibastuz).

First Vice President on Business Development of 'SUAL-Holding' OJSC Artyom Volynets noted that the feasibility study is to be completed in 2007 and if its conclusions are positive the plant construction is to begin in 2008.

The plant is to start making aluminum in 2010 and will reach its full production capacity of 500 thousand tons per annum in 2011.

 

 

RusAl Opens Plant

St Petersburg Times, Russia Tuesday, December 19, 2006

MOSCOW (Bloomberg) — Russian Aluminum opened the first aluminum plant built in the country since the Soviet era as Oleg Deripaska expands the company into the world’s biggest maker of the metal.

RusAl began production at its Khaz smelter in the Irkutsk region on Friday, the company said. It is the first smelter built in Russia in 20 years.

 

Chinese company buys Iamgold’s bauxite assets for US$28mln

China Knowledge Online, Singapore - Dec. 20, 2006

Bosai Minerals Group Co. will buy over some bauxite assets from Canadian gold producer Iamgold Corp. for US$28 million.

According to the announcement by Toronto-based Iamgold, Bosai Minerals will pay the US$28 million in cash after it completes a confirmatory review of the aluminum ore assets.

Chongqing-based Bosai Minerals has also agreed to assume US$18 million in third-party debt for stakes in Omai Bauxite Mining Inc. and Omai Services Inc.

Yuan Zhilun, Managing Director of Bosai Minerals expressed that "The Guyana Bauxite deposit is well known to the industrial minerals industry as a first-class material and Bosai Minerals is pleased to carry on the tradition."

BMO Capital Markets acted as financial advisor to Iamgold.

 

Iamgold sells stake in Omai Bauxite Mining for $46M

Resource Investor, VA - 19 Dec 2006 at 12:09 PM

By Jon Nones
Iamgold said today it has sold its stake in Omai Bauxite Mining Inc. and Omai Services Inc. in Guyana to China's Bosai Minerals Group Co. for $46 million.

Omai Bauxite is an open-pit mine with projected bauxite sales of US$63 million in 2006 and 560 employees.

The deal fits into Iamgold's plans to focus on its core assets, the company said today.

 

 

Ormet back on line: Workers, others see hope for the future

Marietta Times, OH - Wednesday, December 20, 2006

By Brad Bauer, bbauer@mariettatimes.com

HANNIBAL — Aluminum poured Tuesday for the first time in over two years at Ormet’s Hannibal Reduction Plant, an important step toward getting more of the company’s 1,000 workers back on the job.

To date, 488 union workers have been called back to Ormet after a 20-month labor dispute ended in July. The past few months were spent negotiating for reduced power rates and working to get production lines ready for use.

Steve Rykowski, of Rayland, a 30-year Ormet employee, proudly watched Tuesday as the first 6,400 pounds of aluminum was poured into casts.

"I can’t even count the number of times I have watched that," Rykowski said. "But that felt very good. Very good."

At full production, the reduction plant is capable of producing 1.6 million pounds of aluminum per day. Ormet is located about 50 miles north of Marietta on Ohio 7.

"A lot of people had written this plant off. They thought it would never restart, and I’m proud that we’re going to prove them wrong," said Loren Hartshorn, president of the Steelworkers Local 5724.

The strike at Ormet began in November 2004 when 1,200 union workers at the plant and at a separate rolling mill refused to accept concessions aimed at helping the company emerge from bankruptcy.

Ormet’s rolling mill remains closed and the company sold all of the facility’s equipment last year to a competitor. The mill had employed about 500 workers.

"Today is the first step toward getting all six of our lines back up and getting more people back to work," Hartshorn said. "I’d like nothing better than to offer everyone of those rolling mill workers jobs, too."

Most of the reduction plant workers should be back to work by summer, Hartshorn said.

About 100 workers have moved on since the strike and indicated they would not come back.

Prior to the plant closure, Ormet was Monroe County’s largest employer. The county currently posts the highest unemployment in the state at 8.4 percent.

Ohio Governor-elect Ted Strickland and West Virginia Gov. Joe Manchin were on hand for the event.

Ormet CEO Ken Campbell said the plant could not have reopened without the help of the two public officials.

"Clearly, they were never interested in anything but getting a thousand people back to work," Campbell said.

Campbell was brought into the local facility about 9 months ago.

Strickland said he was proud of the way union workers and Ormet officials were able put their past behind them.

"We were able to lay aside preconceived notions, a negative history and think of what we can do together for the people who live in this region," he said.

 

 

Alcan boss says Quebec can maintain aluminum base as technology advances

Canada.com, Canada: Thursday, December 21, 2006 Article tools

Robert Gibbens, CanWest News Service; Montreal Gazette

MONTREAL - The aluminum smelting industry _ long dominated by North America and Europe _ is steadily shifting its weight to the Mideast, Africa and Asia in search of low-cost electric power and the mass markets of the future, says Alcan Inc.'s CEO Richard Evans.

It is now China that dominates global aluminum, a market of 35 million tonnes annually, up from 25 million tonnes in 2001. But Evans said Wednesday Quebec has a ``unique opportunity'' to hold its ranking because of its hydro power and the technology base Alcan will develop in its Saguenay region.

Canada, with hydro-rich Quebec and British Columbia, only a decade ago rivalled the United States and Europe in primary aluminum production. Since then China, with 1.2 billion people, has staged history's fastest economic take-off with annual growth of 10 per cent.

It's the biggest producer and consumer of aluminum.

Alcan will go on investing heavily in the new low-cost energy areas of the Mideast, Africa and Asia to compete in future market growth, Evans said.

``But we're determined to develop our Canadian smelting base further and hold the leadership in energy-saving technology ... that's the key to our $1.8-billion US investment in the Saguenay.''

The numbers add drama to global aluminum's story. In1995, the U.S. made up 17 per cent of world output, Canada 11 per cent, Russia 16 per cent, Europe 16 per cent, Latin America 10 per cent and China nine per cent.

By 2005 the U.S. share was down to eight per cent, Canada nine per cent, Russia 13 per cent, Europe 14 per cent, Latin America seven per cent while China jumped to 25 per cent.

On the demand side, in 1995 the U.S. share was 29 per cent, Europe 26 per cent, Asia 25 per cent and China eight per cent. By 2005, the U.S. had dropped to 22 per cent, Europe to 23 per cent, Asia to 21 per cent and China hit 23 per cent. China's internal demand is up 20 per cent this year.

Last week Alcan and Quebec announced a long-term partnership to build a $550-million US pilot plant with 60,000 tonnes capacity at Jonquiere to test the company's new AP50 smelter-process technology. It will save energy consumption, reduce emissions and raise productivity.

That's the first step in a $1.8-billion US, 10-year investment program that should create 740 skilled jobs and add a further 390,000 tonnes of new capacity. Almost all of Alcan's Saguenay operations are based on its own captive hydro power. A long-term contract signed with the CAW speeded up the project.

Construction of the pilot plant starts in 2008 for a 2010 start-up. The additional 390,000 tonnes of capacity will be completed by 2015.

Quebec is providing a 30-year, $400-million, interest-free loan, research tax credits and other benefits including extended water leases and 225 megawatts of new power that will assure 2,600 megawatts through 2045.

Evans said aluminum projects the world over are partnerships between developers and governments because smelters have a life of 30 to 50 years, consume huge amounts of capital, use resources belonging to the host country and affect the environment.

That also applies to the bauxite mines that supply aluminum's basic raw material and the refineries that produce the white powder for the smelter cells.

Also, aluminum projects must constantly face the risk of violent metal market price swings. ``You need long-term contracts also because it costs millions of dollars to shut down a smelter in bad times.''

Aluminum ingot now trades at around $1.20 US a pound, down sharply from last May's peak. Many believe prices may decline slightly in 2007 if the U.S. economy weakens. In the early '90s prices were around 48 cents for several years after Russia flooded world markets with surplus metal.

Evans said Alcan's 10-year program will provide a stable economic base for the Saguenay for the foreseeable future, parallel with the expansion of the Kitimat plant in British Columbia.

``The technology is critical,'' he added. ``Our research centre in France, where the AP50 process was initially developed, is getting more investment and staff to speed the next breakthrough that will yield another 20 per cent energy saving. It will also be tested in Quebec and it can be fitted retroactively to existing smelters.''

Alcan closed down the old polluting Sodeberg lines at Arvida-Jonquiere two years ago. It is committed to shutting down its older smelters at Shawinigan and Beauharnois by 2015 and also its Vaudreuil alumina plant in the Saguenay. Attrition and transfers should cushion the impact. Modernization of Vaudreuil would be ``enormously expensive,'' said Evans.

Alcan targets 55 per cent of its primary aluminum production in the first quartile of the industry's cost-curve and most of its new projects will be in the first.

It is completing an alumina expansion in Australia, expanding Kitimat to 400,000 tonnes and ISAL in Iceland to 460,000 tonnes, with interests in new smelters in Oman and South Africa and a joint-venture in China. It now operates or has interests in 22 smelters in 11 countries.

``Aluminum will stay on a solid growth path because it can be recycled, it is versatile and cost-competitive,'' said Evans. ``Carbon composites may gain market share in aerospace, but that's only two per cent of total demand.''

He said a hostile bid for Alcan from one of the world's major resource groups, as has been rumoured, is ``highly unlikely'' at this stage.

Montreal Gazette

© CanWest News Service 2006

 

Jamaica delays bauxite mine plan

ForexTV.com, NY - 12/21/06 04:09 pm (GMT)

KINGSTON, Jamaica (AFX) - Jamaica has postponed plans to allow bauxite mining in an undeveloped region in the island's north after activists said damage to the environment would be irreparable, an official said Wednesday.

Agriculture Minister Roger Clarke said he withdrew a license for U.S.-based aluminum producer Alcoa Inc. and state-owned Clarendon Alumina Production Ltd. to begin mining in a largely uninhabited region called Cockpit Country following threats of street protests by conservationists.

"We met with the environmentalists and we have agreed to meet again in January to review their presentation against the scientific data," Clarke said.

A judgment on whether a mining license will be granted will likely be made next month, he said.

Cockpit Country, which has an unusual terrain of rocky cliffs and limestone formations, is one of the island's best-known natural areas. It's home to about 80 bird species and is a critical aquifer to five of Jamaica's largest rivers, according to the Jamaica Environmental Trust.

Clarendon is a partner with an Alcoa subsidiary in a bauxite mining and alumina refining operation called Jamalco.

Jamaica is the world's fifth largest producer of bauxite, the principal ore used in aluminum. It's the country's second largest earner of foreign income after tourism.

Copyright 2006 Associated Press

 


 

Alcan and union reach new agreement at Alma aluminum smelter in Quebec

CBC News, Canada Friday, December 22, 2006 | 3:28 PM ET

SAGUENAY, Que. (CP) - More than 90 per cent of the hourly and office employees represented by the United Steelworkers union at Alcan's (TSX:AL) Alma smelter in Quebec voted to ratify a new long-term collective labour agreement, the company said Friday.

The contract is expected to be signed on Dec. 27. The new contract is effective as of Jan. 1, 2007 and initially runs through Dec. 31, 2011, but can be extended to 2015 if Alcan has begun work on expanding the smelter by the end of 2010.

"Alcan is very pleased with the outcome of the vote," Alcan spokesman Jean Simon said in a release.

"It is a clear demonstration that the parties are determined to work together toward common objectives, including the potential expansion of the Alma smelter."

The Alma smelter has a capacity of 408,000 tonnes and employs about 1,000 people. Alcan has a global smelting capacity of 3.5 million tonnes per year, represented by the company's network of 21 smelters in 10 countries.

Its shares dipped 39 cents to $53.96 in Friday afternoon trading on the Toronto Stock Exchange.

© The Canadian Press, 2006

 

EU clears proposed takeover of Corus by Tata Steel

International Herald Tribune, France : December 22, 2006

BRUSSELS, Belgium: The European Union on Friday cleared the proposed US$9.2 billion takeover (€6.98 billion) of British steelmaker Corus Group PLC by India's Tata Steel.

The European Commission's antitrust office said the transaction "would not impede effective competition" in Europe. If completed, the deal would mark the biggest ever Indian takeover of a foreign company.

Tata Steel is in a battle for control of Corus with Brazil's CSN, and British takeover regulators early this week set a Jan. 30 deadline for both companies to come forward with new offers.

Brazil's Companhia Siderurgica Nacional SA had raised the stakes in the takeover war for Corus last week when it made a US$9.6 billion bid that topped a sweetened offer by Tata Steel.

Corus is a producer of carbon steel and aluminum products. The Commission said in a statement it would accept the takeover because the activities of the two companies "only overlap to a limited extent."

The takeover of Corus would create the world's biggest steel company and continue consolidation in the global steel industry after Lakshmi Mittal's Mittal Steel Co. acquired Arcelor SA to create a powerhouse which has a 10 percent share of the market.

Corus, which employs 47,300 people worldwide, has been searching for a business partner for a year.

The company — formed through a 1999 combination of formerly state-owned British Steel PLC and Dutch metals producer Koninklijke Hoogovens NV — is under pressure to link with a low-cost rival and has said it would make sense to find a partner with assets in countries such as Brazil, India and Russia, as rising raw material and energy costs in Britain and the Netherlands chip away at profits.

Tata Steel is considered a main player in India.

 

 

Aluminum Plant in Jizan to Generate 12,000 Jobs

Middle East North Africa Financial Network, Jordan - Arab News - 24/12/2006

(MENAFN - Arab News) JEDDAH, 24 December 2006 — The aluminum complex under construction at Jizan Economic City (JEC) - the fourth economic city to be promoted by the Saudi Arabian General Investment Authority (SAGIA) — expects to create some 12,000 new jobs. One of JEC's anchor investments, the aluminum complex is the largest mineral processing facility to be built in JEC's industrial zone and led by Saudi-based Western Way for Industrial Development Co (WWIDC).

The plant, when completed, targets production of 1.4 million tons of alumina and 660,000-700,000 ton aluminum per annum. All the alumina will be made from bauxite imported from Greece. Total investment in the complex as well as in the associated plants required to supply adequate power, is estimated at $4 billion.

"We anticipate the creation of about 12,000 direct and indirect job opportunities," stated Dr. Ruwaid Akkad, a member of WWIDC's board of managers.

"This strategic initiative will positively affect the lives of the people in Jizan and southern part of the Kingdom."

"The complex will rank among the most cost-effective aluminum production facilities in the world, and will set a benchmark in the Kingdom as one of the first, large scale, non-oil related projects to be implemented in the country," WWIDC Chairman Dr. Abdullah Basodan told Arab News yesterday.

"This project will generate further investments in the key Saudi minerals sector, since production in the GCC will witness an increase," he added. According to WWIDC, the availability of aluminum and other primary metals will help the Kingdom benefit from the creation of downstream industries and major employment opportunities.

The refining and smelting of aluminum will employ the latest technology. A Chinese-led international consortium of technology and equipment suppliers will provide WWIDC and the Kingdom with a quality project at a "competitive price."

The project will also include investment from other large Chinese and international organizations including local investors. In the beginning of 2007, WWIDC will officially announce the registered name of the complex, as well as the new investors participating in the project. WWIDC's mission is to develop the Kingdom's mineral resources sector and encourage international joint ventures. The company is one of the main leaders and developers of the aluminum smelter, he added.

JEC is being developed by an international consortium, which includes Saudi Binladin Group (SBG) and MMC Corporation Berhad of Malaysia. Custodian of the Two Holy Mosques King Abdullah laid the foundation stone of the JEC and its aluminum complex on Nov. 4.

 

Guyanese need to embrace technology to move forward

Stabroek News, Guyana - Dec 21, 2006

By Christopher Yaw

Guyana needs to move from an economy based on primary products and natural resources to a production or technologically diversified-type economy if the country is not to persist in its backwardness, engineer Professor Clem Sankat has said.

Delivering the feature address at the Guyana Association of Profes-sional Engineers (GAPE) 38th anniversary dinner at the Georgetown Club recently, the Guyanese professor who resides in Trinidad and Tobago said development cannot depend on production of primary goods or natural resources alone. Dubbing technology God's blessing to earth, he said it offers the poor a way to wealth by cleverness rather than by back-breaking labour. "It is no surprise the Asian nations like Indonesia, Korea, and Thailand have trod this path leading to prosperity and a greater standard of living for their people," he said.

The focus of Sankat's address was to highlight efforts being made by his faculty at the University of the West Indies St Augustine campus to produce higher quality graduates to boost engineering and development in the Caribbean. In the course of his speech he made several suggestions associated with developing Guyana's potential.

Sankat said one of the areas open for exploitation by Guyana is the conversion of alumina to aluminium while acknowledging there are new players in the industry from Russia, India, China and Venezuela. These players are attempting to take advantage of the growth of aluminium prices with China and India being projected as the biggest consumers in the next 30 years.

Having picked up the information at a symposium, the professor who is also actively involved in research and development, told attendees, "in all the discussions there was no mention of Guyana but there was talk about the use of alumina from Suriname and Jamaica."

The making of aluminium requires cheap energy and now there are also environmental concerns. Sankat observed, "therefore the solution in Guyana is to move from bauxite to alumina to aluminium in your own country using cheap sustainable energy."

Making a strong point for development in the country the Professor contended that for 40 years, "we talking about hydro [but] we still don't have it. For 30 years we talking about a bridge [over the Berbice River] and we still don't have it. I would like to go to the Corentyne because a sick relative is there. [But] I can't go there because I have to worry I might miss the boat. Good things are happening but they need to happen much more quickly to encourage the young people that the country has a real future as it has the resources and talent."

The Berbice Bridge Com-pany Inc (BBCI) presented a cheque for US$5.4M to the consortium of Bosch Rexroth BV of the Netherlands and Mabey & Johnson of the United Kingdom as the first tranche of payment for the design and construction of the bridge across the Berbice River in late August. Physical work on the bridge is slated to begin during the first half of next year, while completion is slated for the first quarter of 2008. The bridge, a floating structure similar to the Demerara Harbour Bridge, will be 1.75 kilometres and will extend from D'Edward Village on the western bank of the Berbice River to Crab Island on the eastern bank.

Sankat noted that development should be across the board since in the interest of maintaining rural stability farming should also be industrialized over a period of time. This is so, he said, because great potential exists for engineering in the area of food and agriculture production and processing. "We are still too much involved in primary agriculture, not getting downstream production going where you can really begin to add value," he observed. "We need to go beyond mere production although there is a void for Guyanese fresh produce in Trinidad. It calls for putting in good systems and infrastructure, good post-harvesting handling systems, such as a good packing house for instance and you can ship... plantains and bananas are in huge demand. We have the production levels however we are not matching our production with the market place."

In today's world Sankat said, development should start with, "what is the need I am going to fill?"

In making his case for technical development of the country as a way forward Sankat borrowed from a Nigerian engineer who said the difference between a developed, rich and prosperous country and an underdeveloped poor and wretched country is their level of technological and scientific development.

It is not progress in sport, it is not refinement in culture, neither the colour of their skin or rhetoric or erudition in debate on the floor of the UN it is simply science and engineering technology advancement. The G7 countries achieved their enviable status because they are the greatest science, engineering and technology nations in the world.

Recalling a visit to Grenada in 1982 he said while observing the way they were processing nutmegs at the time he thought he was back at the turn of the century. Ladies using mallets were extracting the nutmeg, which comes out of a dried fruit that resembles a small coconut.

There was one machine, he said, called a 'Jawbone Impact Cracker' the output of which was terribly produced nutmegs that were damaged and chipped with just a few good ones. "I thought that there must be a way to take away the manual drudgery and to build a cracker that would work."

The Professor said students were involved in the project and noted that the objective was to mimic the lady with the mallet by striking the nutmeg seed with one blow to open it thereby minimizing damage to the product.

"So we built a 'Centrifugal Seed Cracker' with rotating blades to accommodate various sizes of nutmeg seeds," he said. The blades would pick up the seeds and hurl them at the right velocity so they hit an inclined surface and fall down. Four of the machines were built and are in Grenada.

"I got students involved in this as it happened over a period of time, I am suggesting students be involved in practical creative work such as this to be solution oriented," he said.

 

Trinidad scuttles proposed Alcoa aluminum smelter

The State, SC Associated Press Mon, Dec. 25, 2006

PORT-OF-SPAIN, Trinidad - Trinidad has scuttled a proposed $1.5 billion Alcoa aluminum smelter that faced increasing opposition over environmental concerns, Prime Minister Patrick Manning said in comments published Monday.

"We have decided to immediately discontinue all plans to establish an industrial estate in Cap-de-Ville," a farming village in southwest Trinidad, Manning was quoted as saying in Trinidad and Tobago's Newsday newspaper.

The announcement was a victory for dozens of Cap-de-Ville farmers and fishermen who set up a protest camp to block construction, saying the smelter would poison their water supply for generations.

U.S. Aluminum maker Alcoa Inc., based in Pittsburgh, had signed a preliminary deal with the government to own and operate the smelter for 30 years. The facility would have produced 375,000 tons of aluminum a year and employed up to 800 workers, the company has said.

Representatives of Alcoa, which had insisted that the smelter would be environmentally safe, could not be immediately contacted about Manning's comments in a Christmas Eve address.

The prime minister also said Trinidad will speed construction of another aluminum smelter off the southwest coast.

"We shall accelerate development of a new industrial estate offshore at Otaheite Bank from which aluminum production can now be pursued together with other industrial plants," Manning said.

 

Rusal to Attract USD1 Billion for Creation of 'Russian Aluminum'

Financial Information Service(Registration), Russia 25.12.06

MOSCOW, December 25. /FIS/. Rusal concluded a loan agreement for USD1 billion and obtaining of USD674 million under this agreement, as said in the company's press release. On December 20, 2006, Rusal made the first borrowing in the amount of USD674 million under a short-term intermediate loan attracted for the purpose of financing the actions specified in the agreement on the merger of Rusal, SUAL and alumina assets of Glencore.

 

Trinidad seeking alternative sites for smelter

Caribbean Net News, Cayman Islands - Wednesday, December 27, 2006

by Dale Crofts

CHICAGO, USA (Bloomberg): Alcoa Inc. has said that Trinidad's government approached it about building an aluminum smelter in an alternative location to that planned on the island's Cap-de-Ville, denying a report that the project was cancelled.

Alcoa, the world's biggest aluminum producer, will hold discussions with Trinidad's government about two potential new sites for the smelter, spokesman Kevin Lowery said by phone Tuesday. He denied an Associated Press report that Trinidad had scuttled the project.

Trinidad has decided to "immediately discontinue" plans to allow New York-based Alcoa to build the $1.5 billion smelter in Cap-de-Ville after fisherman complained the smelter would poison their water supply for "generations," the Associated Press said earlier this week, citing Prime Minister Patrick Manning in the Trinidad and Tobago's Newsday newspaper.

Alcoa had signed a preliminary deal with the government to own and operate the smelter for 30 years, the AP said. The plant would produce as much as 375,000 tons of aluminum a year and employ 800 workers, the agency said.

 

 

Govt tells Alcoa to move smelter project site - Trinidad & Tobago

BNamericas, Chile Wednesday, December 27, 2006 18:13 (GMT -0400)

Trinidad & Tobago's Prime Minister Patrick Manning has announced Alcoa's (NYSE: AA) aluminum smelter project on Trinidad must move from the town of Chatham to an offshore location, a spokesperson with the prime minister's office confirmed to BNamericas.

A new industrial estate off the island's Oteihete Bank area will be the smelter project's new site, the spokesperson said.

However, the government has asked Alcoa to consider other sites in addition to Oteihete Bank for the project, Alcoa spokesperson Kevin Lowery told BNamericas.

"A few days before Christmas, the government contacted us and said it would like us to look into a few other sites. We have said we'd be happy to talk to them about it and understand more of their thinking," he said.

Alcoa had proposed the construction of a US$1.5bn, 341,000t/y smelter at Chatham in the Cap-de-Ville area on the southeast coast of Trinidad island.

Currently, the company is reviewing the feasibility of the project, Lowery said.

According to a report by newspaper Trinidad Guardian, Alcoa will have to carry out a new environmental impact assessment (EIA) for the project taking into account its new location.

Pittsburgh-based Alcoa is the world's largest aluminum maker. In Latin America, it owns 60% of the 1.25Mt/y Jamalco alumina refinery in Jamaica in addition to bauxite mines and an alumina refinery in Suriname, a smelter in Brazil and other interests in Mexico.

By Pablo Gaete

Business News Americas

 

 

Alcoa to shut down three units of power plant

Temple Daily Telegram, TX December 29, 2006

ROCKDALE - Alcoa Inc. is pulling the plug Sunday on its three-unit, 360-megawatt Sandow Power Plant after 50 years of transforming lignite coal into electricity to operate its aluminum smelter.

Alcoa is shutting down its power plant near Rockdale as pledged in a U.S. Department of Justice motion filed last month in federal court in Austin, said Alcoa spokesman Jim Hodson.

Alcoa buys enough electricity - 450 megawatts per year - from the neighboring 545-megawatt TXU Sandow 4 Steam Electric Station to operate 4.5 potlines at its Rockdale Operations smelter, Hodson said.

"When these three power units shut down, one of two things will happen: Either we will get some additional power to keep all six potlines running, or we will reduce to 4½ potlines. Right now we are working on getting enough power to keep all six potlines running. I think it’s likely at the beginning of next year we will have enough power for all six."

The shutdown will occur when the three units burn all lignite in the tubes, which is expected to occur shortly before midnight Sunday, Dec. 31, said Hodson.

Between 60 and 70 Alcoa Inc. employees at the three Sandow power units will continue working at the site into January on matters related to the shutdown, Hodson said.

Meanwhile, Alcoa and the International Brotherhood of Electrical Workers Local 2078 are negotiating over the effects of the power plant shutdown on the employees, Hodson said. IBEW officials could not be reached Thursday and did not return phone calls.

The shutdown is part of stipulations put forth in a motion filed in November by the Justice Department on behalf of the EPA in U.S. District Court, Western District of Texas in Austin. The motion seeks to resolve issues affecting TXU’s plans to build the proposed Sandow 5 power plant at the Alcoa compound in Milam County amid pending deadlines imposed by a 2003 court order.

The consent decree stemming from the 2002 federal court lawsuit filed by Neighbors For Neighbors Inc., Environmental Defense and Public Citizen Inc. citing air pollution from Alcoa’s aging Sandow Power Plant, required Alcoa to upgrade the power plant, shut down the power plant or decommission the plant and rebuild - the option Alcoa chose, Hodson said.

Federal Judge Sam Sparks of Austin is expected to hear arguments Feb. 2 on the motion for a stipulated order that would result in a payment of $859,000 in penalties resolving Alcoa’s anticipated failure to begin operation of Sandow 5 by the April 25, 2007, consent decree deadline. As mentioned in the stipulated order, Alcoa is closing its Sandow Units 1-3 four months earlier than ordered in the original consent decree.

 

Alcoa smelter gets cold shoulder in Trinidad

Reuters AlertNet, UK 28 Dec 2006 21:09:39 GMT

By Linda Hutchinson-Jafar

PORT OF SPAIN, Dec 28 (Reuters) - Residents of a remote village in Trinidad won a battle against corporate America this week when the government pulled the plug on plans by Alcoa <AA.N> to build a giant aluminum smelter near their homes.

Bowing to a year of stormy protests, Prime Minister Patrick Manning said the government was scrapping plans to open an industrial park in Cap-de-Ville, in a sleepy, southeast farming region where the $1.5 billion smelter was to have been located.

Instead, the government now intends to accelerate development of a new, off-shore industrial park at Otaheite Bank, in a southern region where the proposed Alcoa smelter and other industrial plants will be located.

The battle against the world's largest aluminum producer looks set to continue, however, as fishermen and residents of Otaheite prepare to stage their own protests against the smelter, which would have a capacity to produce around 340,000 metric tons of aluminum per year.

Just like the villagers of Cap-de-Ville and adjoining Chatham, the people of Otaheite fear potential pollution and harmful emissions from the plant.

They also fear it could wreak havoc with the local fishing industry and impoverish the estimated 400 Otaheite families that depend on it for their livelihood.

"We have a consensus. We will protest," said Suresh Seepersad, a spokesman for the Otaheite Fishermen's Association.

"As fishermen and residents of the area, we will be ready to die for this cause," he said.

Ricky Undheim, vice president of the Cap De Ville/Chatham Environmental Protection Group, said protesters from the first site for the smelter would stand shoulder-to-shoulder with their counterparts in Otaheite to fight against the U.S. aluminum giant.

"We are disappointed," Undheim said, referring to Manning's plans to relocate the smelter to Otaheite. "We will continue the struggle." he said.

 

 

China's Soaring Aluminum Output Facing Possible Curbs

Manufacturing.Net - December 29, 2006

By Anita LaFond, News Editor, Manufacturing.net

Although China's aluminum production is projected to grow 12 percent, this is just too fast amid surging international prices, causing China's power planning and regulatory National Development and Reform Commission (NDRC) to consider curbing the burgeoning industry, according to research released Friday by Industrial Info Resources.

The commission is taking note of a market where aluminum prices averaged over $2,700 per ton in the fourth quarter of 2006 compared to a price of $2,100 per ton at the beginning of the 2006.

In the Chinese domestic market the aluminum price increase to the equivalent (at a yuan conversion of CNY7.82: $1) of $2,685 to $2,813 per ton from $2,493 at the beginning of 2006.

Alumina prices slumped to the equivalent of $306 per ton on the domestic market from $767 in the first half of 2006, the NDRC reported.

The fall in the feedstock price is encouraging more investment in production capacity as the profit margins increase. It is estimated that China’s alumina output may have topped 15 million tons in 2006 which represents and increase of 805 over 2005, the report said.

In November, China lowered the import tariff on alumina from 5.5 percent to 3 percent which has marginally lowered the import cost of the feedstock. Most of the Chinese alumina producers are on a small scale, use outdated production techniques and have a production cost that is over 50 percent higher than the global average.

The research shows that on the London Metal Exchange aluminum hit a record $3,275 per ton in May. Global supply growth is expected to be maintained at a rate of 6.5 percent in 2007 with China driving the margins with a 12 percent growth in production and a 14 percent growth in demand. The global aluminum surplus is expected to be at around 200,000 tons during the year.

At the same time aluminum output is expected to have risen 17.8 percent in 2006 to 9.2 million tons and will increase a further 14 percent to 10.5 million tons in 2007. A 5 percent levy was put onto aluminum exports in January 2006 in an attempt to conserve domestic resources and this was raised to 15 percent in November, according to Industrial Info Resources' report.

The World Bureau of Metal Statistics show that the world market carried a 328,000 ton surplus of aluminum from January 2006 to October 2006. Demand rose to 28.2 million tons, an increase of 1.6 million tons on the 2005 figure. Global production was up 5.2 percent for the same period reaching an all time high of 2.91 million tons for the month of August.

© 2006 Advantage Business Media. All rights reserved.

 

Rising rouble hurts Russian trade balance with Africa

Mineweb, South Africa - Dec 28, 2006

By: John Helmer

MOSCOW (Mineweb.com) --Russian exports to Africa have slowed almost to stagnation point this year, while imports into Russia from Africa have been growing by almost 10%, the latest Russian customs figures show. Altogether, imports from Africa in the first half of the year were $514 million, but growing much faster than exports totaling $1.2 billion. According to a new report by Russia's pre-eminent Africa expert, Andrei Maslov, Russian exporters to Africa are in serious danger from the strengthening rouble of losing in the African markets to lower-priced competitors from the Ukraine and China.

Year-end data show that the rouble -- once one of the weakest currencies in the world after the government defaulted on its debts in 1998 -- has risen 9.23% this year against the US dollar. It is up 8.3% against a basket of currencies. Russian reserves are approaching $300 billion, one of the largest in the world.

According to Maslov, who heads Rosafroexpertiza ("Russian Expertise on Africa") in Moscow, "the rise in prices for Russian products is seldom compensated by an increase in product quality or effective promotion." He warned that unless the Russian government steps into the Africa trade to guarantee export contract performance, and unless Russian exporters, especially of vehicles and heavy equipment, improve their after-sale support, parts supply, and service, "important African markets can be lost for Russian production."

Oil from Russia, and minerals from Africa, remain big elements in the two-way trade. But their precise value is not accurately captured by Russian trade statistics, or anyone else's. Russian crude oil and petroleum products are flowing into both North Africa and Nigeria, according to LUKoil, currently the leading Russian oil exporter; but the trade goes through third-country affiliates or agents of the Russian producers, masking the country of origin.

Alrosa's share in mining diamonds in Angola -- valued at more than $30 million annually -- is also missing from the picture, because the stones are traded into international markets and counted as Angolan exports. Russian tourism to the region -- especially valuable for Egypt, and increasing for Tunisia and Morocco -- isn't captured in the statistics at all.

The Republic of Guinea (Conakry) was the leading African exporter to Russia in 2005, primarily of bauxite and alumina moving into the Russian Aluminium (Rusal) smelter production chain. But in the first half of 2006, according to Russian Customs data, the value of the import shipments recorded from Guinea had begun to fall sharply. This is despite 9-month production data, issued by Rusal, purporting to show that Rusal's bauxite operations had turned out 30% more mineral, compared to 2005; and despite announcements from Rusal indicating substantial increases in its output capacity in Guinea of both bauxite and alumina. Rusal refuses to answer questions relating to its trading operations.

South Africa (SA) was Russia's next largest source of imports in 2005, but its export value also appears to be slipping this year. SA, followed by Morocco and Egypt, mostly ship fresh foodstuffs. Almost no crude oil from Russia has been delivered to SA refineries for several years.

Comparing Russian exports to Africa with international rivals, the value of Russian exports has jumped twofold since 1999, calculated in US dollar prices. But Chinese exports to the region have increased in the same period by sixfold; and Ukrainian exports have grown even faster by ninefold. Maslov forecasts that total Chinese sales to Africa this year will reach $24 billion. Ukrainian exports to the region will hit $2.7 billion.

Maslov told Mineweb he believes the high growth rate of African demand for imports is sustainable, and that lack of protectionist duties favours growth of Russian sales into the region by 25% per year, according to his forecasts.

On the other hand, Maslov said Russian exporters to Africa need improved credit support from the state banking sector and technical support from other agencies. In SA, Vnesheconombank (VNE) has a representative office in Johannesburg. Vneshtorgbank (VTB), the state trading bank, has recently established a regional office in Luanda. The Moscow-based Obi Bank, part-owned by the state, part by the Metropol group, is contemplating opening a subsidiary to be called Banque Miniere du Congo ("Mining Bank of Congo") in Kinshasa next month.

Mineweb always carries details of at least 20 independently written top mining, mining finance, metals and mining sector analysis articles on its homepage as well as a fast news feed to keep you right up to date with what is going on in the mining and metals sectors worldwide. These are continuously updated through the day. Click here to go to Mineweb's home page and access the latest news and comments on developments in mining and metals worldwide.

 

 

The Bauxite/Cockpit Country dilemma

Jamaica Gleaner, Jamaica Sunday | December 31, 2006

Anthony R. D. Porter, Contributor

As most readers should know by now, the object of any mineral exploration programme - be it for bauxite, gypsum, or some other substance - is to ascertain its quality (or grade) and its economically extractable and treatable tonnage.

By the early 1950s, when British Aluminium Company Limited (BACL) commenced prospecting operations in Jamaica, many of the large bauxite-bearing properties in western St. Ann and eastern Trelawny (extending from Claremont through to Clark's Town) had already been acquired by Kaiser and Reynolds. Some estates, such as Stonehenge, were also under option to Kaiser, but others such as Windsor, Fontabelle, and Pantrepant were privately owned.

With little room to manoeuvre, BACL set about obtaining the rights to explore the Windsor property which it did in three stages: 1) taking surface samples, 2) scout drilling (i.e. reconnaissance drill holes), and 3) systematic grid drilling (at 100 ft centers) on at least four of the most northerly deposits or glades (unforested open spaces). The tonnage and grade (i.e. the total alumina and silica content) of these deposits were ascertained.

The rugged karst limestone extending some 10 or so miles to the south (i.e. the Cockpit Country) was reported to consist of "small crater-like glades with insignificant accumulations of fair grade terra rossa, too small and too remote to be considered a mining proposition" (G.A. Daniel, February 1955, BACL report).

Several years later, the Aluminium Company of America (Alcoa) entered the picture and joined the other major players (Kaiser, Reynolds and Alcan) in their quest to find economic reserves of bauxite in Jamaica. By the beginning of the 1970s, Alcoa had obtained licences to explore in several parishes, including the bauxite-bearing region over the southern half of Trelawny parish. (See the Government of Jamaica's Department of Mines Annual Reports for that period, and various JIS "Facts on Jamaica" brochures.) So, up to that time, there were at least three exploration campaigns for bauxite in Trelawny.

Bauxite prospecting

The fourth bauxite prospecting programme in Trelawny that I am aware of commenced in 1989, when the Government of Jamaica and Alcan Aluminium Ltd., entered into an agreement to conduct a "Feasibility study on the establishment of an alumina refinery on Jamaica's North Coast" (Daily Gleaner, Thursday December 14, 1989, Page 3).

Many exploration holes were drilled manually (so as to avoid damage to any crops and property) by crews employed by the Jamaica Bauxite Institute, and numerous samples analysed by Alcan. Using manual methods, holes can be drilled to a depth of about 45 ft, but beyond that, it becomes more difficult and time consuming to lift out the rods. There are, however, portable machines that can now do the same thing and, unless someone gets careless, this type of works poses no more threat to the environment than those farming the land.

Although the project never got off the ground, much new information was generated on the quality and quantity of bauxite in the parish of Trelawny. This information is now more than 10 years old and its period of confidentiality has, I believe, expired. If so, and Jamalco has had a chance to review this and the earlier data, then the results must have been sufficiently encouraging to warrant further work.

Workable compromise

Two of the questions that always come up are: 1) Why does Jamalco have an interest in exploring for bauxite in Trelawny when its existing alumina refinery at Halse Hall in Clarendon is located so far away? And, 2) Is there a plan to pick-up where Alcan left off and construct a refinery on the north side?

In 2004, the Government of Jamaica and Alcoa announced that the alumina plant at Halse Hall was to undergo a major expansion in effect doubling its refining capacity. Such a venture requires a doubling of reserves and this may well be the answer to question 1. But, "I don't know" is the most honest answer that I can give (at this time) to question 2.

Here is a possible solution to the deadlock.

Having worked in the bauxite industry for many years, I have a vested interest in not seeing it go under. It would be an economic blow of seismic proportions. On the other hand, the Cockpit Country Stakeholders' Group (CCSG) and other support groups have a vested interest in ensuring that the environmental integrity of the Cockpit Country (CC) is maintained.

One of the major issues, therefore, that needs to be resolved is what exactly constitutes the limits of the CC.

From a geological standpoint, I would argue that the CCSG limits extend too far south and, to ensure the continued viability of the bauxite industry, their line should be shifted westwards to at least the 350,000 Easting Jamaica False Coordinate (which roughly corresponds to a NS line from Clarks Town through Barbecue Bottom to near Albert Town). This to my mind is a workable compromise.

The rugged, deeply-eroded karst landscape west of this line is composed of dolomitic limestone and dolomite (called the Troy Formation) and this member of the White Limestone Group, in my experience, plays host mainly to low-grade bauxite, aluminous - laterite and clay.

Anthony Porter is a former chief geologist at Alcan Jamaica Company.