AluNews - January 2006

Ormet Rolling Mill Shuts Down

WTOV9.com, OH 5:58 p.m. EST January 3, 2006

HANNIBAL, OH -- The Ormet rolling mill in Monroe County is officially closed.

According to a corporation spokesperson, the last day for operation was Dec. 31st. The closing means hundreds of rolling mill workers have lost their jobs, but some of those workers are still on the picket line.

The former Ormet rolling mill workers say they aren't giving up hope just yet.

Ormet sold off the assets inside the rolling mill to Aleris International, an aluminum recycling corporation, in November. Tuesday, spokespeople for both Ormet and Aleris did confirm that Aleris bought all of the equipment inside the rolling mill.

However, Aleris Chief Financial Officer Michael Friday said they do not need most of the equipment they bought from Ormet. He says Aleris will transfer the equipment they do want to their plants across the country and dispose of the rest of the machinery.

United Steelworkers of America Local 5760 members said they believe there is still a chance Aleris could lease the unused equipment to another company that would rehire the workers.

"Until someone actually completely puts a concrete barrier across this driveway, where nothing is coming on or out I think we'll be here," said union worker Bill Hughes.

Ormet spokesperson Linda Regelman said they still have a few people working inside the rolling mill who are tearing out the equipment to give to Aleris. She said she does not know how long the transfer will take, and she said she could not comment on the status of the rolling mill property and buildings that Ormet still owns.

In the meantime, there are some new negotiations going on between Ormet and the rolling mill workers.

USWA 5760 President Chuck Ballard said they are "effects bargaining," which means they are trying to work out deals on things like severance pay, pensions, vacation pay and grievance liability for the former workers.

Those talks are expected to resume this week or next week.

Jill Del Greco, NEWS9

Alba slashes halon use 80pc

Trade Arabia, Bahrain Wednesday, January 04, 2006

Manama

Alba has replaced more than 80 per cent of the halon it uses in fire and cooling systems and despatched the redundant gas to a Saudi-based treatment and recycling facility.

It is the first time that such an exercise involving two countries has been carried out to ensure that environmentally harmful substances are disposed of properly, said Alba.

The smelter is now on the verge of declaring itself as a totally chloro fluoro carbons (CFC) free and ozone-friendly aluminium smelter.

Halons have been used all over the world in fire extinguishing and cooling applications - but, as CFCs, they are also ozone depleting substances.

An international agreement, the Montreal Protocol, was signed more than a decade ago to protect the stratospheric ozone.

It stipulates that the production and consumption of substances that deplete ozone are to be phased out and, Bahrain, a signatory to the Montreal Protocol, has enacted laws that ban the import and use of these substances by 2010.

"Alba faced problems in finding an appropriate way of safely disposing the recovered gases and we kept the halon safely in store for more than four years, while we worked closely with government authorities to establish a halon bank," said the Alba safety health and environment manager Hassan Alaradi.

With the help and support of the Environmental Affairs Directorate and the Saudi Government, Alba finally obtained the necessary approval and successfully despatched the halon.-TradeArabia News Service

ALCAN REACHES AGREEMENT IN PRINCIPLE FOR THE SALE OF ITS FROGES ROLLING MILL

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

Free Market News Network, FL Wednesday, January 04, 2006 8:54:00 AM EST

Paris, France — Alcan Inc. (NYSE, TSX: AL) announced today that it has signed an agreement in principle for the sale of its Froges, France, rolling mill to Industrie Laminazione Alluminio S.p.a (ILA). Based in Sardinia, Italy, ILA specializes in continuous casting and aluminum foil rolling, providing European and Mediterranean medium-size companies with aluminum solutions for the packaging and building markets.

"We are pleased with the outcome of a process that began more than a year ago and is in line with Alcan’s strategy to focus on core operations within its Engineered Products business. It will enable Froges to benefit from new market opportunities and a secure and competitive supply of continuously cast metal," said Michel Jacques, President and Chief Executive Officer, Alcan Engineered Products. "ILA and Froges share complementary portfolios and focusing Froges' activities on foil for the packaging industry will further contribute to the mill’s sustainable future," he added.

With investments planned to upgrade efficiency and environmental performance, ILA intends to increase Froges' production volumes of foil products. ILA also intends to retain all employees. Froges rolling mill will operate under the name of Laminoirs Aluminium Froges. The transaction, which is not material to Alcan, is expected to be completed in the first quarter of 2006. Froges has almost 70 employees and annual revenues of approximately €25 million.

Best year ever for Century Aluminum

IcelandReview, Iceland 01/04/2006 | 12:00

The newspaper Morgubladid reports that Nordurál aluminum plant at Grundartangi, which is owned by Century Aluminum, recorded its greatest profits in 2005 since it began operations in 1997, despite the unfavorable exchange rate of the US dollar. The plant had been designed to produce 90,000 tons of aluminum, but in fact production reached a record 93,000 tons.

Nordurál’s income is in US dollars, and the accounts are published in that currency. The low exchange rate and new wage agreements have meant that salary costs have increased proportionately, while electrodes have also incurred increased expense as they are purchased from the Euro area and the dollar has weakened against the Euro.

On the other hand, the price of aluminum has remained very high, production has gone well, all the company’s debts are in dollars, and a great deal of new share capital has entered the company in conjunction with its expansion to 220,000 tons.

The expansion of the plant is going well, and it is envisaged that the first part will be brought into use in February and the rest in August, when expansion will be complete.

Chinese alumina plant to be digitally automated

Control Engineering, IL January 4, 2006

Luoyang Xiangjiang Wanji Aluminum Ltd. (LXWA) has contracted with Invensys Process Systems China for its greenfield alumina plant in Luoyang Xinan County, Henan Province, China. Invensys will furnish Foxboro's I/A-Series digital automation to control plant-wide processes as well as providing hardware integration services for its new, 400,000-metric-ton/year, Bayer-process-based bauxite-refining facility. Its alumina product will be a feedstock for making aluminum metal.

LXWA plant-automation systems will employ I/A-Series redundant-control processors at seven control nodes, serving processes throughout the plant. Control nodes are for raw materials processing, solvent extraction, settling, separation, product filtration, evaporation, and calcination (roasting). Control processors will be connected to over 5,200 I/O points, representing a wide variety of sensors, devices, and signal interfaces.

Control nodes will be interconnected with a redundant network built around a control and dispatching center, with 15 sets of operator workstations and seven sets of engineering-and-operational workstations. The centralized facility will provide real-time data and full graphics of the plant automation network, supporting production monitoring and optimization applications. LXWA, and its engineering and design firm, selected Invensys based on the reliability and reputation of I/A Series systems installed at multiple plant sites, Invensys says.

With the formation of Shanghai-Foxboro Co. Ltd. (SFCL) in 1982, Foxboro says it's the first major American manufacturer to establish a joint venture in China. The company also advised that, in 1991, SFCL became the first company in China to be certified under ISO 9001.

New alloy for faster jet fighters

Pravda, Russia 19:24 2006-01-05

A new high-strength aluminum alloy being developed by American researchers could make jet aircraft fly farther and faster.

The new alloy is being developed for use in the F-35 Joint Strike Fighter, which will become the primary fighter for the U.S. military.

Researchers at Ames Laboratory's Materials Preparation Center will produce about 400 pounds of an aluminum-yttrium-nickel alloy over the next few months as a benchmark for testing.

The material is being developed in conjunction with aircraft engine manufacturer Pratt & Whitney to replace heavier or costlier components in the "cool" sections of jet engines. The material also could be used in other parts of an aircraft such as wing spars.

If the new material performs up to expectations, researchers say it could have a dramatic impact on the performance and efficiency of both commercial and military aircraft. Engineers estimated that replacing various components in one particular jet engine with the Al-Y-Ni alloy could potentially lighten the engine by 350 pounds, UPI reports.

Deal made to sell Ormet's assets for $133M

Parkersburg News, WV Thursday, January 05, 2006

By BRAD BAUER

HANNIBAL - A deal to sell the assets at Ormet's Hannibal rolling mill has closed and equipment at the facility was being removed or disabled Tuesday, striking steel workers said.

Chuck Ballard, president of United Steel Workers Association Local 5760 said, production at the mill stopped last week. He said he is currently negotiating a severance package for the 500 employees who were employed at the Monroe County aluminum manufacturing facility.

"I expect they're going to offer us what they have to by law and that's about the size of it," Ballard said. "I don't get the warm fuzzy feeling they're going to give us anything they don't have to."

Ballard said some of the former workers will be eligible for pensions, vacation and sick time accumulated while employed at Ormet.

Last month, Ormet announced plans to sell the equipment at the mill and operating facilities at the Bens Run Division in Friendly and Specialty Blanks in Terre Haute, Ind., to Aleris International Inc. for $133 million.

Aleris, the company based in the Cleveland suburb of Beachwood, employs 4,000 people worldwide and makes common alloy aluminum sheet used in building and construction applications.

Aleris officials have said they decided not to continue operating the Hannibal rolling mill because the company increased production at its current facilities at a much lower cost.

Officials also said purchasing the equipment will make it more difficult for another company to move into the facility and compete.

More than 1,200 union members have not worked at either of Ormet's two Monroe County plants since going on strike in November 2004.

Ormet, which filed for bankruptcy in January 2004, imposed a restructuring plan that reduced pensions and other benefits in November, leading to the strike.

A small victory came for the striking workers late last month when a Monroe County judge ruled the workers were eligible for unemployment benefits.

Linda Regelman, a public information officer for Wheeling, W.Va.-based Ormet, said Tuesday the company is not yet commenting on the benefit ruling.

Regelman said although the equipment at the Hannibal mill has been sold, Ormet still owns the building and grounds.

Union workers have expressed hope that the property would be sold and another company would come in and reopen the facility.

"There are no plans to reopen the facility," Regelman said. "There's no equipment."

Alcoa upgrade threatened

Sunday Times.au, Australia 06jan06

By Nigel Wilson

LABOUR conditions rather than environmental approvals will determine whether Alcoa proceeds with a $1.5 billion alumina refinery expansion at Wagerup, south of Perth.

Alcoa of Australia managing director Wayne Osborn yesterday warned that soaring wages and labour shortages sparked by the resources boom in Western Australia would need to be overcome.

"Labour cost issues are a pivotal part of competitiveness," he said. "Australia has to pretty much stand on its own against global competition."

The costs could force Alcoa to find a new method of constructing the third phase of Wagerup to make the expansion internationally competitive.

Mr Osborn's warning mirrors increasing concerns in Western Australia that skills shortages and high labour rates could cripple major infrastructure projects and reduce the State's capacity to fully engage in the world commodity boom. Last year, Woodside said the inability of Australian industry to compete meant that much of the fifth production train on the North West Shelf would be built overseas.

Speaking after Western Australia's Environmental Protection Authority approved the expansion, subject to 10 stringent conditions, Mr Osborne said it would take another six to eight months for Alcoa to commit to the project.

Originally Alcoa had planned to begin construction last year but a series of factors, including health concerns about plant emissions, led to extensive studies and delays in environmental approvals.

"What we do need to do is clearly find a way of doing the project that addresses the issues of labour costs and productivity which have been a particularly focal point in Western Australia in recent times," Mr Osborn said.

"Globally, projects have seen cost increases associated with raw materials and so forth.

"In Western Australia there has been a compounding effect here with the labour shortage and productivity."

He would not quantify the effect of skills shortages on Wagerup 3 but said the expansion was competing with Alcoa's capacity expansions at brownfields sites in Jamaica and Brazil.

To make Wagerup 3 competitive, the project might have to be broken into parts, and to a greater degree than was normal with a manufacturing construction project in Australia, he said.

Wagerup is expected to take about 5 million man hours to complete.

It is one of the more efficient alumina refineries in the world, and this would improve further through economies of scale.

Mr Osborn said the world market for alumina was robust, particularly as a result of the urbanisation of the BRIC countries (Brazil, Russia, India and China), which could be a substantial driver of products such as aluminium.

"The cycle seems to have moved to another level of demand (compared with previous cycles)," he said.

"Alcoa's view is that the Wagerup 3 project is attractive.

"There are some short-term issues that impact on the project economics but these are issues that will have a solution.

"We are confident we will get there, but it is just not possible to put a timetable on it."

Western Australia's Chamber of Minerals and Energy said Alcoa's Wagerup expansion would substantially expand the State's resources sector.

Tough terms put on Alcoa plant

Australian, Australia January 06, 2006

Nigel Wilson and Alana Buckley-Carr

ALUMINIUM giant Alcoa will be forced to relocate residents suffering from chemical sensitivity symptoms if it proceeds with a planned $1.5 billion expansion of its Wagerup alumina refinery near the small town of Yarloop in Western Australia.

The Environmental Protection Authority yesterday recommended its toughest guidelines, which must be met by Alcoa and the state Government if the project goes ahead. Dogged for almost a decade by complaints about chemical emissions affecting the health of workers and local residents, the Wagerup refinery produces 2.6 million tonnes of alumina - the main ingredient of aluminium.

Under the planned expansion, production at the refinery, just 2km from Yarloop, would almost double to 4.7 million tonnes, resulting in an additional 150 permanent jobs and providing an extra $11 million each year in revenue to the government.

EPA chairman Wally Cox said the assessment of the Wagerup proposal was the most complex undertaken by the authority because of the plant's history of health-related complaints.

"These are the most stringent conditions the EPA has recommended for any industrial or mining project in Western Australia," Dr Cox said.

The conditions include conducting an independent health study before construction begins, extensive and continuing independent monitoring of emissions and a program to fund the relocation of people assessed to be suffering chemical sensitivity symptoms.

The EPA said it had recommended measures to ensure confidence that health-related incidents would not increase because of the proposal.

"The central problem is that despite all investigations there has been no specific causal link identified between any individual compound or mixture of compounds emitted from the refinery or particular refinery source, and health issues reported in the area," Dr Cox said.

Alcoa Australia managing director Wayne Osborn said the company did not object to any of the conditions. "In fact, we welcome that because it gives confidence for the community around the overall operation and the proposed expansion," he said.

"We believe that transparency is valuable."

Mr Osborn said the company would consider the EPA report but it would be many months before it would decide whether to invest in the expansion. The EPA's recommendations were welcomed cautiously by Yarloop residents.

Alex and Jan Jovanovich are hoping the relocation conditions imposed by the EPA will give them the money needed to start a new life in Bunbury.

Having endured seven years of headaches, nausea, bloody noses and sore eyes, Mr Jovanovich said he would not put up with it any longer.

"Certainly, there is something in the air and you can smell it now," he said. Mr Jovanovich said he had become frustrated with efforts to improve Yarloop, as people left town to escape Alcoa's emissions.

"Alcoa has absolutely ripped the heart and soul out of this town," he said.

Acting environment minister Mark McGowan said the EPA advice was only the first step in the assessment process.

There would now be two weeks for public appeals and comments.

Construction of 500 MW power plant kicks off in Hormozgan

Tehran Times, Iran 2006_01_07

Tehran Times Economic Desk

TEHRAN – "Work on construction of a power plant at 500 megawatts kicked off yesterday in this special zone," executive and board director of the Persian Gulf Special Mineral Industries Zone in Hormozgan Province Bahman Ayyar Rezaii told the Persian service of IRNA on Saturday.

The implementation of this project, valued at €158m, will be implemented by joint partnership of the Siemens of Germany and an Italian company and is going to be delivered on a turnkey basis. Moreover, Azarab Energy Company is a participant in certain technical aspects of the contract and the plant is expected to be operational within 22 months.

"The completion of this plan and others to come are in line with anticipated production of 13.1 million tons steel and over one million tons of aluminum within the 4th Cultural and Socioeconomic Development plan, requiring 5,000 megawatts electricity in the foreseen future," Rezaii said, adding that some negotiations over building another electricity plant at 1500 megawatts have been conducted with Essar Group of India and Azarab.

The Persian Gulf Special Mineral Industries Zone, spread in an area of 5,000 hectares, is located 13 KM west of Bandar Abbas on the outskirt of Shahid Rajaii Port.

FFE India bags Rs 120 crore Kuwait order

Chennai Online, India - Jan 6, 2006

The Chennai-based FFE Minerals India signed a contract here on October 13, with Petroleum Coke Industries Company (PCIC), Kuwait, valued at approximately Rs 120 crore, to design and supply a 350,000 ton/year coke calcining plant in Kuwait. Under this contract, FFE Minerals will also assist PCIC in engineering and project management. FFE Minerals India is also expanding its Chennai facility having acquired land in the Chennai IT Corridor and plans to double its employee strength to 1,200 in view of the growing importance of India in the global market.

FFE Minerals belongs to the 120-year-old cement major F L Smidth and is a world leader in minerals processing technology.

PCIC has awarded the civil, structural and architectural design contract to Bhagwati Designs, another F L Smidth company, and is also in the process of issuing local tenders for civil, mechanical and electrical construction contracts and will invite bids from the local contractors soon.

Two Calif. Republicans used influence to fight investigation of campaign contributor

North County Times, CA - 2006_01_08

By: Associated Press Wire Reports -

LOS ANGELES (AP) -- Two Republican congressman from Northern California used their positions to try to stop a federal investigation of a Texas businessman who had given them political contributions, the Los Angeles Times reported Sunday.

Reps. John T. Doolittle and Richard W. Pombo, along with former House Majority Leader Tom DeLay of Texas, fought an investigation by federal banking regulators of Houston millionaire Charles Hurwitz, according to government documents and copies of letters between the congressmen and Federal Deposit Insurance Corp. officials obtained by The Times.

The FDIC was seeking $300 million from Hurwitz for his alleged role in the collapse of the United Savings Association of Texas, which cost taxpayers $1.6 billion.

Hurwitz had a controlling interest in the savings and loan company, but the investigation was dropped after the Republican leaders voiced their opinions, the newspaper reported.

In 1999, DeLay wrote a letter to the chairman of the FDIC criticizing the investigation of Hurwitz as a "form of harassment and deceit on the part of government employees."

When investigators persisted, Doolittle and Pombo allegedly used their power as members of the House Resources Committee to subpoena the agency's confidential records on the case, the Times reported. Those records included details of evidence federal investigators had compiled on Hurwitz.

In 2001, the congressmen inserted many of those documents into the Congressional Record, making them public and accessible to Hurwitz's lawyers.

Federal officials said their case was damaged, and in 2002 dropped it.

Doolittle and Pombo have publicly defended Hurwitz, saying the inquiry was unfair.

Hurwitz's lawyer said Friday that investigators had been overzealous. This summer, a judge in Texas agreed and awarded Hurwitz attorney fees and other costs in a civil suit he filed.

"They sought to humiliate him," U.S. District Judge Lynn N. Hughes, said in the ruling. The government is appealing the decision.

Hurwitz has been a prolific campaign donor since the early 1990s.

Some of his contributions have been made with money from his Houston-based flagship company, Maxxam Inc., through subsidiaries such as Kaiser Aluminum, and through a company political action committee, Maxxam Inc. Federal PAC.

In the last three federal elections cycles, those entities have given about $443,000 in political contributions, mostly to conservative politicians, including President Bush, for whom Hurwitz pledged to raise $100,000 in the 2000 campaign, documents show.

Starting in the 2000, the businessman and his committees have distributed at least $30,000 to DeLay and his federal causes, including $5,000 for his current legal defense fund in the Texas money-laundering case.

Hurwitz also contributed $1,000 to Pombo for his 1996 re-election campaign. And through the Maxxam PAC, Hurwitz gave Doolittle $5,000 for his 2002 re-election campaign and then followed up with $2,000 more for his 2004 race, documents show.

UES to Spend $8.2Bln in Siberia

The Moscow Times, Russia Tuesday, January 10, 2006. Issue 3327. Page 7.

Bloomberg

LONDON -- Unified Energy Systems, the world's biggest power company by capacity, plans to spend $8.2 billion expanding hydropower in eastern Siberia, which will help produce more energy to export to China.

UES and the regional government in the Sakha republic, formerly Yakutia, are setting up the South-Yakut hydropower company, which will include four hydroelectric plants, according to Vyacheslav Shtyrov, president of the local government. China will need at least 40 billion kilowatt hours of power per year.

"This year, the project feasibility study development will be started," Shtyrov told President Vladimir Putin on Jan. 6, according to remarks published on Putin's web site. "It will be highly efficient because of excellent parameters of river gates."

Power plants in Sakha, which has 22 percent of the country's hydropower resources, will be linked by cables with UES's countrywide grid to supply electricity to customers in eastern Siberia and the Far East, according to Shtyrov.

The government, which plans to boost industrial development in Asian Russia, needs to secure power supplies for mining companies, oil and gas producers and smelters, which may be built in the region. "We are resolving a global task," Shtyrov said. "This is when a unified power grid will appear for the first time in the history of our country."

The South-Yakut hydropower complex will be able to generate 5,000 megawatts, UES deputy chief executive Vyacheslav Sinyugin told Putin on Jan. 6. The four plants will be built on two Aldan River tributaries, the Uchur and Timpton rivers.

The power plants will supply electricity to the domestic market, including to aluminum smelters that may be built in the Khabarovsk region, according to Sinyugin's remarks. Sinyugin did not name investors in the smelter project.

The South-Yakut hydropower complex will also supply electricity for exports to China, North and South Korea and Japan, according to Sinyugin.

Construction of new hydroelectric plants may start in 2008 if a feasibility study is completed this year, according to Sinyugin. The first power plant is slated to go online in 2015. The government should decide "if it wants to keep control over this complex as one of strategic state resource," he said. The law gives the state control over the existing hydropower plants but does not regulate ownership of new plants.

China would like to get as much as 56 billion kilowatt hours of power per year, UES Deputy chief executive Vyacheslav Leonid Drachevsky said in November in a statement.

UES exported 235.8 million kilowatt hours to China in the first ten months of last year, Prime Tass reported in November.

Rusal signs $4bn smelter and energy agreement

Mining Weekly, South Africa 10 January 2006

The world's third largest primary aluminum producer Rusal and RAO UES have signed an agreement pertaining to construction of an aluminum smelter and completion of the Boguchanskaya hydropower plant (HPP) in Siberia.

Yesterday, the two parties announced that they had signed the basic conditions of partnership agreement, a document that contains key parameters of the Boguchanskaya energy and metals complex project, including the structure of its implementation and the principles of cooperation between the partners.

The two parties plan to sign the partnership agreement itself in the first quarter of 2006.

According to preliminary estimates, total investment for this project will amount to over $4-billion, which includes the creation of an infrastructure for the power plant and the smelter.

The project should take about seven years to complete.

HydroOGK (a subsidiary of RAO UES) and Rusal will complete the Boguchanskaya HPP and build a new aluminium smelter, which will become the primary consumer of electric power generated by the HPP.

As specified in the basic conditions of partnership agreement, the first stage of the greenfield aluminum smelter and the initial complex of the Boguchanskaya HPP will be completed in 2009.

The installed capacity of the Boguchanskaya HPP will be 3 000 MW, generating annually 17,6 billion KW/h.

The smelter's capacity will amount to 600 000 t of aluminium per year.

The cost of completing the Boguchanskaya HPP is estimated at $1,5-billion (not including the cost of developing the inundation zone).

The construction of the smelter will cost $2,1 billion.

Rusal and HydroOGK intend to finance the project with their own, as well as attracted funds.

An independent financial consultant will be appointed to develop the most efficient funding scheme. Boguchanskaya HPP construction will be launched in January 2006.

The Russian Government has committed part of the funds in RAO UES's 2006 investment programme for the HPP construction in 2006 - a total of 2,6-billion rubles ($91-million).

In total, 4,5-billion rubles ($157-million) will be invested into constructing the Boguchanskaya HPP through the RAO UES investment programme and funds obtained by HydroOGK.

The feasibility study of the aluminum smelter construction should be completed in 2006.

Rusal has allocated about 3-billion rubles ($100-million) of its investment budget for next year to fund the study and other project activities in 2006.

UES to Spend $8.2Bln in Siberia

The Moscow Times, Russia Tuesday, January 10, 2006. Issue 3327. Page 7.

Bloomberg

LONDON -- Unified Energy Systems, the world's biggest power company by capacity, plans to spend $8.2 billion expanding hydropower in eastern Siberia, which will help produce more energy to export to China.

UES and the regional government in the Sakha republic, formerly Yakutia, are setting up the South-Yakut hydropower company, which will include four hydroelectric plants, according to Vyacheslav Shtyrov, president of the local government. China will need at least 40 billion kilowatt hours of power per year.

"This year, the project feasibility study development will be started," Shtyrov told President Vladimir Putin on Jan. 6, according to remarks published on Putin's web site. "It will be highly efficient because of excellent parameters of river gates."

Power plants in Sakha, which has 22 percent of the country's hydropower resources, will be linked by cables with UES's countrywide grid to supply electricity to customers in eastern Siberia and the Far East, according to Shtyrov.

The government, which plans to boost industrial development in Asian Russia, needs to secure power supplies for mining companies, oil and gas producers and smelters, which may be built in the region. "We are resolving a global task," Shtyrov said. "This is when a unified power grid will appear for the first time in the history of our country."

The South-Yakut hydropower complex will be able to generate 5,000 megawatts, UES deputy chief executive Vyacheslav Sinyugin told Putin on Jan. 6. The four plants will be built on two Aldan River tributaries, the Uchur and Timpton rivers.

The power plants will supply electricity to the domestic market, including to aluminum smelters that may be built in the Khabarovsk region, according to Sinyugin's remarks. Sinyugin did not name investors in the smelter project.

The South-Yakut hydropower complex will also supply electricity for exports to China, North and South Korea and Japan, according to Sinyugin.

Construction of new hydroelectric plants may start in 2008 if a feasibility study is completed this year, according to Sinyugin. The first power plant is slated to go online in 2015. The government should decide "if it wants to keep control over this complex as one of strategic state resource," he said. The law gives the state control over the existing hydropower plants but does not regulate ownership of new plants.

China would like to get as much as 56 billion kilowatt hours of power per year, UES Deputy chief executive Vyacheslav Leonid Drachevsky said in November in a statement.

UES exported 235.8 million kilowatt hours to China in the first ten months of last year, Prime Tass reported in November.

Rusal signs $4bn smelter and energy agreement

Mining Weekly, South Africa 10 January 2006

The world's third largest primary aluminum producer Rusal and RAO UES have signed an agreement pertaining to construction of an aluminum smelter and completion of the Boguchanskaya hydropower plant (HPP) in Siberia.

Yesterday, the two parties announced that they had signed the basic conditions of partnership agreement, a document that contains key parameters of the Boguchanskaya energy and metals complex project, including the structure of its implementation and the principles of cooperation between the partners.

The two parties plan to sign the partnership agreement itself in the first quarter of 2006.

According to preliminary estimates, total investment for this project will amount to over $4-billion, which includes the creation of an infrastructure for the power plant and the smelter.

The project should take about seven years to complete.

HydroOGK (a subsidiary of RAO UES) and Rusal will complete the Boguchanskaya HPP and build a new aluminium smelter, which will become the primary consumer of electric power generated by the HPP.

As specified in the basic conditions of partnership agreement, the first stage of the greenfield aluminum smelter and the initial complex of the Boguchanskaya HPP will be completed in 2009.

The installed capacity of the Boguchanskaya HPP will be 3 000 MW, generating annually 17,6 billion KW/h.

The smelter's capacity will amount to 600 000 t of aluminium per year.

The cost of completing the Boguchanskaya HPP is estimated at $1,5-billion (not including the cost of developing the inundation zone).

The construction of the smelter will cost $2,1 billion.

Rusal and HydroOGK intend to finance the project with their own, as well as attracted funds.

An independent financial consultant will be appointed to develop the most efficient funding scheme. Boguchanskaya HPP construction will be launched in January 2006.

The Russian Government has committed part of the funds in RAO UES's 2006 investment programme for the HPP construction in 2006 - a total of 2,6-billion rubles ($91-million).

In total, 4,5-billion rubles ($157-million) will be invested into constructing the Boguchanskaya HPP through the RAO UES investment programme and funds obtained by HydroOGK.

The feasibility study of the aluminum smelter construction should be completed in 2006.

Rusal has allocated about 3-billion rubles ($100-million) of its investment budget for next year to fund the study and other project activities in 2006.

Norsk Hydro Seeks Energy for 2 Aluminum Factories

The Moscow Times, Russia Thursday, January 12, 2006. Issue 3329. Page 5

By Yuriy Humber, Staff Writer

A plan by Norsk Hydro to build two aluminum factories in Russia hinges on the Norwegian energy and metals group striking a favorable deal with Russian energy firm HydroOGK, a spokesman for HydroOGK said Wednesday.

Norsk is one of four companies, two of which are Russian, in negotiations with Unified Energy Systems subsidiary HydroOGK, which controls half of Russia's hydroelectric resources, spokesman Yevgeny Druzyaka said.

"We are in talks with all four companies and will have another round of negotiations with each this spring," Druzyaka said, without stating how many of the four HydroOGK had the capacity to service at the same time.

He said Norsk had requested power in the country's Northwest and in the far eastern Khabarovsk region.

The Norwegians have eyed Russia for several months now, attracted by low energy costs. One-third of all aluminum production costs stem from electricity.

Norsk vice president Harald Martinsen expressed interest in building a $1 billion, 250,000-ton aluminum smelter in Khabarovsk on his visit to the city last month, during which he met with HydroOGK. The parties signed a preliminary agreement, but the Norwegians are still "looking at different opportunities" in several Russian regions, Norsk spokesman Thomas Knutzen told Reuters on Wednesday.

Energy prices in Europe stand at about 3.7 cents per kilowatt, above the 1.5 cents per kilowatt and 2.2 cents per kilowatt Russian aluminum producers RusAl and Sual respectively pay, said Denis Nushtayev, a metals analyst with Metropol investment bank.

Khabarovsk is close to China, which is short of primary aluminum -- the kind of aluminum Norsk's Knutzen said the company would focus on in Russia.

In the Northwest, Norsk is likely to opt for rolling metal production targeting European clients, Nushtayev said.

Aluminium Industries Support Asia-Pacific Partnership Goals to Advance Clean Industrial Development

January 11, 2006 01:53 PM US Eastern Timezone

WASHINGTON & SYDNEY, Australia--(BUSINESS WIRE)--Jan. 11, 2006--The aluminum industries within the six member countries of the Asia-Pacific Partnership on Clean Development and Climate have pledged to work together to achieve the partnership's objectives.

Aluminum industry representatives attending the AP6 Ministerial Meeting yesterday announced the development of a memorandum of understanding (MoU) for voluntary action in the areas of cleaner air, energy conservation, recycled materials and improved industrial efficiencies. The MoU will be formally signed at an industry meeting scheduled for Beijing in early May 2006.

U.S. Aluminum Association representative Steven J. Demetriou, chairman and CEO of Aleris International, said, "Aluminum is an industry sector that can make practical, measurable contributions to clean economic development and the reduction of greenhouse gases. We are committed to harnessing the advantages of aluminum to achieve economic and social progress as well as measurable improvement in environmental quality.

"Aluminum contributes to a sustainable future when used efficiently. Recycled aluminum, for example, saves up to 95 percent of the energy required for virgin material. Other efficiencies include energy conservation from lighter-weight aluminum-constructed consumer vehicles, and fully recyclable buildings and packaging," Demetriou said.

Australian Aluminium Council president Wayne Osborn, managing director of Alcoa World Alumina Australia, said, "The aluminium industry welcomes the Asia-Pacific Partnership initiative and its objectives. We are focused on realising efficiency, technical and process management improvements across the sector."

Rio Tinto Aluminium chief executive Oscar Groeneveld said, "The Asia-Pacific Partnership fits very well with the aluminum industry's global sustainability initiative and this industry accord is designed to further that broad, co-operative approach, based on sustainable development principles, which maintains economic growth while addressing key environmental issues such as climate change."

The Asia-Pacific Partnership meeting brought together minister-level government and private sector officials from Australia, China, India, Japan, South Korea and the United States. Ministers received input from industry representatives on sustainable energy issues and technology development and deployment, and how industry and government can capture opportunities that meet the Partnership objectives.

"The governments and private sectors of the APP countries have the historic opportunity to leverage the ingenuity of the private sector, the power of markets and the strength of the public sector to achieve a more secure energy future, a cleaner environment and greater prosperity in our own countries and around the world," Secretary Bodman said. "The real strength of the APP is the private sector's participation and the chance for them to show leadership on these critical issues. I look forward to working with the six partner nations and the industry representatives to help the private sector succeed."

Secretary Bodman joined Australian Minister of Industry, Resources and Tourism, Ian Macfarlane to host a dialogue between the government ministers and CEOs from the six APP countries.

Draft Aluminium Industry MoU Areas of Cooperation

The Aluminum Association (US), the Aluminium Association of India, the

Australian Aluminium Council, the China Nonferrous Metals Industry

Association, the Japan Aluminium Association and the Korea Nonferrous

Metal Association have agreed to cooperate in the following areas:

1. Environmental Control Technologies and Information Exchange

- including identification of key indices and areas of

cooperation for climate protection relevant to the aluminum

sector, emissions benchmarking efforts and identification of

voluntary measures to reduce perfluorocarbon (PFC) and

greenhouse gas (GHG) emissions.

2. Energy Efficiency - including identification of voluntary

measures to reduce energy consumption per unit of production,

and to improve the efficiency of aluminum operations.

3. Health & Safety Education and Information - such as safety

workshops, shared industry best practice guidelines and

information exchange to improve workplace health & safety

efforts.

4. Recycling Education & Techniques - including advanced

recycling methods to save energy and reduce GHG emissions in

aluminum production.

5. Product Applications - including mechanisms to advance and

improve packaging; light-weighting of ground, aviation and sea

transport; and residential and commercial construction.

6. Measurement and Reporting (Environmental Monitoring /

Production Related Statistics) - including air emissions and

sustainability indices monitoring, and reporting of

statistical information to address and determine progress on

voluntary energy-intensity based metrics under the

partnership.

7. Information Exchange - the leaders of the Aluminum

Association, the Aluminium Association of India, the

Australian Aluminium Council, the Japan Aluminium Association

and the Korea Nonferrous Metal Association pledge to meet

regularly to exchange information and monitor progress in each

of the areas of cooperation. They will also report annually to

their respective governments on the goals that they have set

and the progress in achieving those goals.

Contacts

Aluminum Association

Robin King, 703-358-2975

rking@aluminum.org

or

Australian Aluminium Council

Ron Knapp, 0417 682 001

rknapp@aluminium.org.au

ALSCON: Why RUSAL ended talks with FG

Nigeria Daily Independent, Nigeria Wednesday 11th January, 2006

By Bassey Udo Energy Editor, Lagos

A new insight has emerged into why Russian Aluminium (RUSAL) severed negotiations with Abuja on the Share Purchase Agreement (SPA) of the Aluminium Smelter Company of Nigeria (ALSCON).

RUSAL, along with an American company, BFIGroup, participated in the bidding for the company’s 77.5 per cent equity on June 14, 2004.

RUSAL was disqualified by the National Council on Privatisation (NCP) for violating the guidelines but was re-invited on the orders of the Presidency to open negotiations on the SPA.

This followed the disqualification of BFIG that had earlier been declared winner of the bid with an offer of $410 million.

Negotiations with the special committee – comprising officials of the NCP, Bureau of Public Enterprises (BPE) and Minister of Power Steel, Liyel Imoke – continued until recently when RUSAL pulled out after the government rejected the stiff conditions it put forward.

There were indications on Monday that RUSAL took the decision because of BFIG’s insistence that it should stop the talks, which are contemptuous of the legal action to get the government to reverse the disqualification of the bid winner.

A letter by BFIG dated November 21, 2005 and signed by its chief legal counsel, Thomas Crehan, warned of dire legal consequences if RUSAL did not "immediately cease and desist from any and all actions to negotiate with the Federal Government of Nigeria and/or any of its agents, agencies, bureaus or ministries for the purchase of the shares and/or assets of ALSCON".

Negotiations to acquire ALSCON violate the agreement with RUSAL at the May 20, 2004 pre-bid conference, Crehan argued, and "are tortuous interference in the contract rights of BFIGroup Corporation (and) inappropriate and damaging to BFIGroup and the Nigerian people".

The letter put "RUSAL on final notice that its conduct constitutes blatant intentional interference with the contract rights of BFIGroup".

Crehan said the company would seek legal and equitable remedies under Nigerian, United States and international laws if RUSAL did not heed the warning.

Copies of the letter were sent to RUSAL offices in Moscow, New York, London and Nigeria as well as top U.S. officials; including Secretary of State, Condolezza Rice, Secretary of Commerce, Carlos Gutierezz and Congressman David Dreier.

BFIG Chief Executive Officer, Rueben Jaja, explained in an online interview from the U.S. that RUSAL left because, as witnesses to "the bad faith and impunity" exhibited towards his company by Nigerian officials, RUSAL concluded that it would not have a better deal from the transaction if it continued.

Jaja accused President Olusegun Obasanjo of deliberately misleading BFIG in continuing with the bid, and recalled that prior to its payment of the $1 million bond, the board of BFIG had visited the President to confirm allegations then that the government had resolved to hand over ALSCON to RUSAL.

He said Obasanjo denied the allegations and encouraged to bid.

"Upon this basis, we were allowed to bid, and we won the bid in an open fashion on national television. And the very next we won the bid, we were told that the President disqualified us and sent government officials to bring the disqualified Russians back for negotiations".

Rusal to boost aluminum output with launch of new technology

RIA Novosti, Russia 13:29 | 12/ 01/ 2006

MOSCOW, January 12 (RIA Novosti) - Russian metals giant Rusal has brought into operation a new type of electrolysis cell that the company says will increase its production efficiency by 30% and reduce emissions by the same level.

The RA-400 cell, launched at Rusal's Sayanogorsk aluminum smelter in Siberia, is designed to produce three metric tons of aluminum per day, and was the product of $11.3mln of investment, the firm said. Rusal plans to install two more of the cells at Sayanogorsk, and will equip all its new smelters with the new technology, the company said.

"The launch of the RA-400 is yet more proof of our innovative leadership - a strong foundation for our strategy to increase aluminum production to 5 million tons and become one of the world's most environmentally friendly metal producers," Valery Matvienko, director of Rusal's Engineering and Construction Division, said in a statement.

Rusal's aluminum production in 2004 totaled 4.1mln mt.

Rusal is the world's third largest primary aluminum producer. The company accounts for 75% of the aluminum produced in Russia and 10% of world output of the metal.

China's 2006 alumina output to rise 11.8 pct to 9.5 mln tons - report

Forbes 01.12.2006, 08:49 PM

BEIJING (AFX) - China's alumina output is expected to rise 11.8 pct year-on-year to 9.5 mln tons this year, the Securities Times reported, citing Kang Yi, director of the China Non-ferrous Metal Association.

Kang also expects China's aluminum output to total 8.5 mln tons in 2006, up from an expected 7.8 mln tons last year.

Kang said China's alumina production accounts for about 11 pct of the world's total, with aluminum output contributing some 22.5 pct to the world's total output.

Alumina is a key raw material for the production of aluminum.

No further details were provided.

delia.liu@xinhuafinance.com

RUSAL Launches Russia's Most Powerful Electrolysis Cell RA-400

Russia Newswire (press release), Russia Friday, January 13, 2006 6:53 AM

MOSCOW (RNWire) – RUSAL, a top three global aluminium company, has launched Russia’s most powerful electrolysis cell running at 400 kA. RA-400 is a second generation cell based on RUSAL’s proprietary production technology. The first generation pot, running at 300 kA, was put into operation in 2003. The company’s investment in the project totals $11.3 million.

The launch of the RA-400 cell at the Sayanogorsk Aluminium Smelter is a result of the company’s continuous investment in building its R&D base – a priority area of RUSAL’s growth strategy. The new cell will guarantee better environmental, technical and economic results with electrical current efficiency expected to exceed 94%, and power consumption – less than 13,800 kW/h per one tonne of aluminium produced. Designed to produce 3 tonnes of aluminium per day, the RA-400 cell, will also raise RUSAL’s production efficiency by 30% and secure a 30% reduction in emissions compared to those of the RA-300.

RUSAL will launch two additional RA-400s at the Sayanogorsk Aluminium Smelter and equip all of its greenfield smelters with the new generation cells.

"RUSAL undertakes large-scale modernisation projects to boost production and improve environmental standards at its plants, but more importantly, we are constructing new smelters, which operate our proprietary technology and meet the highest international standards. The launch of RA-400 is yet another proof of our innovative leadership – a strong foundation for our strategy to increase aluminium production to 5 million tons and become one of the world’s most environmentally friendly metal producers," says Valery Matvienko, Director of RUSAL’s Engineering and Construction Division.

The RA-400 cell was created at the Engineering and Technology Centre (ETC), a unit of the company’s Engineering and Construction Division tasked with developing and introducing new and more effective production technologies. RUSAL’s ETC is currently working on a reduction technology for a high current density, which will become the basis of the third generation cell – RA-500. With engineering solutions and a prototype cell already in place, the ETC specialists are set to test RA-500 at RUSAL’s Krasnoyarsk Aluminium Smelter as early as this year.

Alcan closing Swiss aluminum smelter

United Press International 1/12/2006 2:12:00 PM -0500

SIERRE, Switzerland, Jan. 12 (UPI) -- Canada's Alcan Inc. is closing its big Steg primary aluminum smelter in Switzerland.

Alcan, which expects to complete the closure in April, said it will keep running its foundry, rolling and extrusion operations in the Valais region, where the company employs about 900 people.

About 180 workers will be out of a job as a result of the action, Alcan said.

"For the past three years, we have worked diligently to identify a viable solution for ongoing smelting operations," said Cynthia Carroll, Alcan's chief executive.

"However, with the expiration of our long-term energy contracts at Steg, the unprecedented rise in current energy costs in the Valais region and across Europe has made the production of primary aluminum at this particular facility economically unsustainable."

© Copyright 2006 United Press International, Inc. All Rights Reserved

Shanxi Guanlv's JV Proposal Won Approval

homeway.com, Page 1, Wednesday, January 11, 2006

SHANXI, Jan 12, 2006 (SinoCast via COMTEX) --The extra shareholders' meeting of Shanxi Guanlv Co., Ltd. (SZSE: 000831) on January 9 approved the company's plan of building a joint venture with the nation's biggest raw aluminum producer Aluminum Corporation of China Limited (SEHK: 2600).

Under the terms of an agreement clinched between the two parties on December 6, 2005, they planned to invest CNY 1 billion in building a venture, which will be engaged in producing and selling electrolytic aluminum, aluminum alloys and carbon products.

Aluminum Corporation will own 51 percent of the venture with an investment of CNY 510 million in cash, and Shanxi Guanlv will hold the rest 49 percent by investing in its 200,000-ton electrolytic aluminum facilities, which has a net asset value of CNY 490 million.

At the shareholders' meeting, all shareholders and their agents voted for the foresaid cooperative proposal.

The project is set to be put into production this March, according to an announcement posted previously.

From homeway.com, Page 1, Wednesday, January 11, 2006

info@SinoCast.Com

Norsk Hydro Considers Building 2 Aluminium Plants in Russia

MOSNEWS, Russia 12.01.2006 13:55 MSK (GMT +3)

Norway’s Hydro Aluminum is looking into the possibility of building two aluminum plants in Russia — one in the northwest and one in the Far East, a source familiar with company’s plans told Interfax on Wednesday, Jan. 11.

The Khabarovsk territory administration disclosed some details of a possible project to the news agency after a visit of a Hydro Aluminum delegation to the area. Representatives of the HydroOGK company were also part of the delegation. A report posted on the administration’s website says that HydroOGK signed a cooperation agreement with Norsk Hydro and Rosnor AS in relation to the project.

The press service of HydroOGK generating company said that the agreement has not spelt out the parameters of the future project but only expresses the intentions of the parties. For instance, HydroOGK would be responsible for supplying electricity to the facility. A spokesman for the Russian power generating company said electricity would be delivered from the Bureya hydropower plant currently under construction.

The volume of investments in the plant in the Khabarovsk territory is estimated at $2 billion, the administration’s website reports. Several site options exist but the delegation is believed to prefer the town of Toki near the port of Vanino. The potential capacity of the Bureya power station facilitates the construction of an aluminum plant with an annual capacity of 200,000-300,000 tons of aluminum, experts say.

The source believes that all decisions relating to the projects will be made in 2006. Norsk Hydro was unavailable for comment.

Hydro Aluminum is the world’s third biggest integrated aluminum company. In 2004 its primary aluminum production stood at 1.7 million tons and receipts at $12 billion. It is part of the Norwegian Hydro group.

HydroOGK is a 100% subsidiary of Unified Energy Systems (UES) established at the end of 2004 in the framework of energy sector reform. Ultimately it will run 49 hydro power stations with a combined capacity of 22,900 megawatts.

It is also planning to participate in another aluminum project under which, together with RusAl, it would fund the completion of the Boguchany hydropower station and the construction of an aluminum plant using its electricity. The sides are completing negotiations on the details of the final partnership agreement which they expect to sign in the first quarter.

Rusal Buys Majority of Guyana Bauxite Co. (AP)

Schaeffers Research, Ohio 1/13/2006 2:54 PM

GEORGETOWN, Guyana

Russian mining company Rusal has bought 90 percent of one of Guyana's two major bauxite operations and will take control of it in March, officials said in a joint statement Friday.

Rusal, Russia's main aluminum maker, signed the agreement with the government late Thursday.

The company's new name will be the Bauxite Company of Guyana. It was formerly the state-owned Aroaima Mining Company, located in the eastern Berbice region, 140 kilometers (85 miles) east of the capital of Georgetown. Guyana will retain a 10 percent share of the company.

Rusal will invest some US$20 million (euro16.5 million) over several years to improve the mine's production, which should increase from 1.4 to 2.8 tons (1.3 to 2.5 metric tons).

In December 2004, the Montreal, Canada-based Cambior Inc. bought 70 percent of the state-owned Linden Mining Enterprise. Guyana retains 30 percent of the company, whose main mining operation is in Linden Town, 110 kilometers (70 miles) south of the capital.

Bauxite was Guyana's leading foreign exchange earner in the 1970s. It now ranks No. 4 after sugar, gold and rice.

Copyright 2006 Associated Press

Russia's primary aluminium export up 9.5%

Metals Place, UK 13 January 2006

Source: Analytical Information Agency

Export revenue from Russian primary aluminium sales from January to October period of 2005 was US$4.74 billion, up 23 percent from the same period in 2004 (US$3.851 billion), the Federal Customs Service said.

The export volume raised 9.5 percent to 3.63 million tones from 3.31 million tones.

Export of nickel for the corresponding period totaled 236.6 thousand tones, revenue from sales was US$3.35 billion, up 18.7 percent.

Export of refined copper dropped 8 percent to 272.1 thousand tones from 295.6 thousand tones.

China's alumina output is expected to hit 9.5 million metric tons

Metals Place, UK 13 January 2006

China's alumina output is expected to hit 9.5 million metric tons this year, up 11.8% from 8.5 million tons in 2005, state-run China Securities Journal says.

Citing Kang Yi, the chairman of the China Nonferrous Metals Industry Association, the newspaper says production of primary aluminium is likely to rise to 8.5 million tons in 2006 from an estimated 7.8 million tons last year.

The newspaper gives no reason for the projected output increases.

China's annual alumina output accounts for around 11% of the world's production every year, while the country's primary aluminium output accounts for 22.5%, according to the newspaper.

Alumina is a key raw material used to make aluminium.

China, the world's largest aluminium producer and an important exporter of the metal, relies heavily on imports to meet domestic alumina demand.

Japan's Mitsubishi Corp gets exploration rights for bauxite in Guinea - report

Forbes 01.15.2006, 06:18 AM

TOKYO (AFX) - General trader Mitsubishi Corp has obtained exclusive rights to explore for bauxite, the ore used to produce aluminum, in two areas of Guinea from the government of the West African country, the online edition of the Nihon Keizai Shimbun reported Sunday, citing sources close to the deal.

The mining concessions mark the first entry of the firm into the business of developing bauxite mines. The company is already the biggest aluminum producer among Japan's trading firms, operating refineries in Australia and elsewhere.

Mitsubishi will soon begin exploring for bauxite deposits in Guinea, investing a few hundred million yen in the project over a three-year period, the report said.

Bauxite ore is processed to create alumina, also called aluminum oxide, an intermediate material that is refined to make aluminum.

Based on the results of the exploration, Mitsubishi will consider building a plant to produce alumina, with Guinea seen as the likeliest site. Plant construction will likely cost at least 1 bln usd, the business daily said.

Mitsubishi will supply the alumina turned out by the plant to refineries it operates in Australia and Mozambique as well as other major aluminum producers.

The company thinks the concessions in Guinea have enough bauxite to enable a refinery to use 1.4 mln tons of alumina annually for several decades, the report said.

Another 30 Tons Of Toxic Waste Removed This Afternoon

Bernama, Malaysia January 15, 2006 17:42 PM

JOHOR BAHARU, Jan 15 (Bernama) -- Work to remove toxic waste which was emitting ammonia gas in Sungai Gatom, near Labis, which was entering its third day Sunday, was progressing actively with 30 tons of the toxic waste being taken out this afternoon.

Segamat District Information Officer, Fadzilah Mohamad said efforts to remove all the 300 tons of the toxic material by the contractor, Kualiti Alam Sdn Bhd, were in progress under the supervision of the Department of Environment (DOE) and the Johor Fire and Rescue Department.

"Work to remove the Aluminum Dross is progressing smoothly despite the cloudy weather and 30 tons of the toxic waste had been removed up to noon today," she said in a statement here.

She said 70 tons of the toxic matter had been removed yesterday and sent to a waste disposal centre in Bukit Nenas, Negeri Sembilan.

Fadzilah said that as of 11am Sunday, 398 people from 87 families residing in the affected areas namely Kampung Sungai Gatom, the Labis Forestry Department Quarters, Keretapi Tanah Melayu Berhad squatter area and Taman Ah Pong had been evacuated to several relief centres provided by the local authorities.

She said 329 victims were now staying at the Kampung Paya Merah Community Hall and Multipurpose Hall, Sekolah Rendah Jenis Kebangsaan (T) Labis (53) and Rumah Sejahtera Chaah (16).

RUSAL Pockets Guyana’s Mines

Kommersant, Russia - Jan. 16, 2006

The South American country of Guyana and RUSAL have struck a deal to privatize bauxite mines in Berbice owned by the state-controlled Aroaima Mining Company (AMC). The contract will provide RUSAL with the source of raw materials for the Nikolaevsky Aluminous Plant in Ukraine. After acquiring Guyana’s mines the Russians will probably lose interest in Venezuelan bauxite mines the operation of which it has been negotiating with the local authorities for two years.

AMC said that it sold its mines for $22 million to Bauxite Company of Guyana Inc., RUSAL’s subsidiary with 10-percent stake belonging to Guyana’s government. Bauxite Company is set to boost the extraction of bauxites by 80 percent to 2.5 million metric tons a year, the company’s general manager Alexey Gordimov told Stabroek News agency. The country’s prime minister Samuel Hinds hopes that RUSAL will make the industry lucrative. The Russian aluminum giant is expected to put some $20 million into the project.

A part of the bauxites will be shipped from Guyana to the Nikolaevsky Aluminous Plant, while the remaining part will go to consumers in the Caribbean, Mediterranean and Black Sea regions. 350,000 metric tons of bauxites are expected to be delivered at the Ukrainian smelter in 2006. The supply will go up to 1 million tons in 2008.

RUSAL also signed a ten-year contract with Oldendorf Carriers, a German shipping company, to transport the cargo. The Russians will pay some $8 or $10 for every metric ton of bauxites to be taken from the northern part of the South America to ports in the Black Sea, according to Alexey Bezborodov, the director of projects of SeaNews.

The agreement with the government of Guyana is the first successful project of RUSAL in South America. The Russian company has been in the talks with Venezuela’s authorities on the bauxites mining since 2003 but the parties have not come to terms yet. The deal with Guyana may decrease RUSAL’s interest in bauxite mines in Venezuela.

by Maria Cherkasova, Evgeny Khvostik

All the Article in Russian as of Jan. 16, 2006

Rusal Hit by Fresh London Court Ruling

Russia Journal, Russia 16th January 2006 @ 11:06

By John Helmer in Moscow

Deripaska, who has a home on Belgrave Square and a visa for UK domicile, is the Russian owner of Russian Aluminium (Rusal), the third largest aluminium producer in the world, and of stakes in bauxite mining and alumina production located across the globe, from Queensland to Guinea.

Russians usually celebrate the New Year twice, on December 31, when the modern calendar requires it; and on January 13, according to the Old Russian calendar, abandoned after the Bolshevik Revolution. According to the Russian tradition, as the Old Clock approaches the Old Midnight, one must compose a wish for the New Year. Then, in the time it takes for the clock to chime to twelve, the wish should be scribbled on a piece of paper, and set on fire. When the chimes have rung, the ashen wish should be dropped in a glass of champagne, and swallowed. The ritual assures zagodat zhelaniye, the chances of the wish coming true.

Between December 31 and January 13, Deripaska’s wishes didn’t come true, for he has been hit by a UK High Court judgement exposing him and Rusal to the most serious threat it has ever faced in an international court. The latest ruling also triggers an embarrassing process of question and answer with Rusal’s international lenders, whose loan contracts all require that material changes in the circumstances of the company, including legal liability, should be fully disclosed and explained, in order to prevent foreclosure.

What began a year ago in London, as a claim against a trader by a smelter in Tadjikistan, which Rusal controls, has become a trial of the business ethics of Rusal itself, its owner, and trusted lieutentants. The evidence of their involvement in fabricating documents, falsifying contracts and correspondence, and laying false charges was termed "smoking-gun evidence" by Justice William Blackburne in court on January 9. Deripaska.himself is cited in court as having admitted to managing the Tadjikistan Aluminium Plant (TadAZ) through Rusal. As further confirmation of his personal stake, in recent remarks in the US, Deripaska reportedly promised personally to investigate whether the plant is polluting the region’s air and streams.

Deripaska’s target in London is Avaz Nazarov, who controls the Ansol group of companies, and formerly supplied and managed TadAZ, which is state owned. Tajikistan’s most important industrial plant and the country’s leading exporter, TadAZ currently produces 360,000 tons of aluminium per annum. At the current international market price, that is worth about $845 million. TadAZ contributes roughly one-fifth of the entire gross domestic product of the country, 60% of its export revenues, and a large part of the Tajik treasury’s taxes.

However, the breakup of the Soviet Union, and subsequent civil war in Tajikistan, severely limited the plant’s ability to operate, cutting off supplies of the alumina required for the production line, operating capital and credit for trade, as well as the rail system, on which the land-locked republic had depended during Soviet times. By the mid-1990s, production at TadAZ had fallen from design capacity of 517,000 tons per year to less than 200,000 tons. Because costs to supply and operate the plant were larger than sales revenues, TadAZ was losing about $40 million per year.

In 1996, Nazarov began large-scale supply of alumina to the smelter, and financed the shipment of aluminium to ports in Russia or Estonia. Output has steadily increased. From the year 2000, the operating balance-sheet moved from red to black, and Hydro Aluminium, the Norwegian aluminium group, became the largest buyer of the metal.

In the claim in the London High Court, which TadAZ lodged in May 2005, it is alleged that the Nazarov group of companies bribed the smelter management to look the other way while it overcharged TadAZ for its alumina, shortchanging the company of alleged profits of about $220 million.

In its counter-claim, the Nazarov group charges that Deripaska, Alexander Bulygin, the Rusal CEO, and Rusal-controlled companies seized control of TadAZ in December 2004, violating an agreement they had earlier signed with Nazarov, in order to defraud him and his companies of more than $200 million. The supply of aluminium contracted with Hydro was cut off. Rusal trusties were placed in management positions of the smelter and the trading chain, and a new tolling arrangement set up with a shell company, registered in the British Virgin Islands, which Rusal controlled. In their court claim, the Nazarov group charges breach of contract, fraud, and unlawful conspiracy involving Deripaska’s companies.

Hydro has launched its own claim in a closed arbitration tribunal in London, alleging that TadAZ has violated its contract obligations to deliver metal for Hydro to purchase. Evidence and witnesses produced by TadAZ in that proceeding have contradicted claims in the court which is hearing TadAZ’s claims against the Nazarov group. That arbitration has now been concluded, and the result remains confidential – neither TadAZ nor Rusal has been keen to publicise the outcome.

Following detailed argument in court last July, Nazarov won his first major legal victory, when Justice Blackburne ruled on October 21, lifting a set of injunctions TadAZ had earlier obtained against the assets of the Nazarov group. In November, however, lawyers for TadAZ – who admit their parallel involvement with Rusal – sought again an emergency injunction against the property, cash and assets of the Nazarov group worldwide. After Nazarov responded in court with evidence disputing the fresh claims, Herbert Smith, the lawyers for TadAZ, abruptly withdrew their application on January 4. Nazarov’s lawyers, Clyde & Co., then applied for a hearing, and asked for the award of indemnity costs, arguing that TadAZ’s litigation had been an attempt to harass and damage the Nazarov group, and should be sanctioned with penalty costs.

On January 9, Justice Blackburne ruled in favour of Nazarov’s case, and awarded indemnity costs, which coupled with the costs awarded under an earlier October judgment amount to what sources close to the case call "a significant 6-figure sum". The judge’s remarks from the bench during Monday’s hearing reinforce what he had earlier said in the July hearings, implicating Rusal as Nazarov’s commercial rival, seeking to oust him from a business Rusal believes it has already taken over.

In parallel, the High Court has issued default judgements against a number of defendants, including Hasan Saduloev, brother-in-law of the ruling President of Tajikistan, and CDH Investments Corporation of the British Virgin Islands, an entity with an exclusive tolling arrangement with TadAZ since December 2004. They failed to respond, after being served with the Nazarov counter-claim several months ago. The Tajiks argue that they have not been served legally, under Tajik law. However, Tajik interests have given evidence aginst Nazarov in the High Court proceedings.

Nazarov said the latest court ruling "TadAZ and Rusal have yet again failed in their attempts to artificially concoct a smoke screen argument against Ansol, in order for Rusal to illegally secure for itself exclusive control of the Tajik business."

At Rusal’s Moscow office, spokeswomen for the company Vera Kurochkina and Ekaterina Sedova were reported to have left for the day. London spokesman for Rusal, Jon Simmons, said: "Rusal is not a party to the litigation between Tajik Aluminium Smelter and Ansol.

This is a straightforward case concerning a company accused of defrauding Tajikistan of large sums of money. That company, Ansol, is trying to create a smokescreen of conspiracy to draw attention away from itself. The allegations against Ansol are also the subject of criminal investigations in Tajikistan. Rusal was drawn into this case by TadAZ’s opponents purely in an attempt to create a smokescreen to draw attention away from allegations of fraud against Ansol."

After pressing TadAZ to make its abortive legal moves in the High Court, Rusal has signaled that it intends to dispute the jurisdiction of the London court over its role in the affair. A defeat on this score by the Nazarov group would expose Rusal, and Deripaska himself, to legal challenges from a variety of directions.

Hydro, financially three times larger than Rusal, has not limited its reaction to the London arbitration to recover the metal owed by TadAZ. According to statements by the company, it has opened negotiations on Rusal’s home turf, and is discussing the construction of one, possibly more primary aluminium plants in the Russian Fareast, using electricity from the HydroOGK, a subsidiary of the state-owned Unified Energy Systems (UES). The establishment of a foreign-owned aluminium smelter is unprecedented; Alcoa of the US is the only other major aluminium producer working on Russian territory, and it is operating two aluminium rolling-mills it acquired from Rusal. Hydro executives said in December, and again this week, that they are looking at opportunities to build greenfields smelters of about 250,000 tons in capacity in the Russian Fareast; an official of HydroOGK confirmed this week that the utility company is talking to both Rusal and Hydro.

According to a Rusal statement issued a month ago, Rusal and HydroOGK have signed an outline agreement, according to which "HydroOGK (a subsidiary of RAO UES) and Rusal will complete the Boguchanskaya HPP and build a new aluminium smelter, which will become the primary consumer of electric power generated by the HPP." The Rusal statement also reports that "the installed capacity of the Boguchanskaya HPP will be 3,000 MW, generating annually 17.6 billion KW/h. The smelter’s capacity will amount to 600,000 tonnes of aluminium per year. The cost of completing the Boguchanskaya HPP is estimated at $1.5 billion (not including the cost of developing the inundation zone). The construction of the smelter will cost $2.1 billion. Rusal and HydroOGK intend to finance the project with their own, as well as attracted funds."

Rusal was asked to say if the Hydro moves are potentially competitive. As Old New Year’s Eve began in Moscow, the company had not responded.

Article printed from The Russia Journal: http://beta.russiajournal.com

URL to article:

http://beta.russiajournal.com/?p9074

IFC approves $150m for aluminium project

Engineering News (press release), South Africa 17 Jan 2006

Global aluminium producer Rusal yesterday said that it welcomed the decision by the International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD) to endorse the group's entry in Komi Aluminium - a project to design, construct and operate a modern bauxite and alumina complex near the town of Ukhta, Komi Republic.

The two bodies will also pay out loans totalling $150-million for the first stage of its implementation.

The decision followed the approval by EBRD and IFC of Rusal's plan to enhance the company's corporate governance and financial disclosure.

The loan will be disbursed for a period of nine years.

It will be used to increase bauxite production at the Middle Timan deposit from the current 1,8-million tons a year of bauxite to 6-million tons by 2008, and to conduct groundwork for the construction of an alumina refinery near the town of Sosnogorsk.

The IFC and EBRD are also considering the option to finance the next stages of the project development, Rusal said.

Over the next 18 months, the group will carry out a number of activities to improve its corporate governance practices.

It will introduce a corporate governance code and elect three independent directors to head newly created independent Board of Directors Committees. Over the next six months, Rusal will disclose the company's ownership structure and key financial results of the group, it said yesterday.

How should South African investors view Ghana?

Accra Daily Mail, Ghana Source: Imara Tuesday, January 17, 2006

Following a fact-finding tour of West African economies by senior executives, the Imara financial services group has good news and bad news for South Africans looking for potential profit from Ghana.

It believes South Africa's alumina smelting activities for Ghanaian clients may soon be under threat, but big opportunities could emerge within Ghana's reforming banking sector.

Imara, incorporated in Botswana, but with a significant Johannesburg presence, differentiates itself through its knowledge of African markets and in-depth research into African economies and equity markets.

Imara's African Opportunities Fund managed by Harare-based fund manager John Legat currently has no stake in Ghana, but that could change following its recent scrutiny of banking reform and commodity beneficiation strategies.

John Legat commented: "It was time to take a long look at Ghana, especially when the gold price topped $500. Gold underpins its economy and its stock exchange is dominated by Ashanti, which accounts for 90% of the US$10 billion market capitalisation.

"Ghana is moving towards its Millennium Development Goals so quickly that roughly US$4bn of Ghana's US$6bn foreign debt is due to be cancelled. Inflation has halved from 32.9% to 15%. A 4.5% real rate of growth has been maintained for two decades, with 5.8% growth likely for 2005.

"As fund managers we focus on equity opportunities, especially as the values of some listed companies have fallen 40%. However, our investment research throws an interesting sidelight on how South Africa might be impacted by new developments."

Ghana is eager to derive more value from its commodities, curtailing the long-standing practice of outsourcing most value-adding processes to countries such as South Africa.

For instance, Ghana's bauxite is processed into alumina in the Caribbean and the alumina smelted into ingots in South Africa. Only then are the ingots rolled and formed in Ghana. One Ghanaian exporter of cold rolled and continually cast aluminium is now preparing to use a local smelter, enabling ingots to be produced in Ghana rather than South Africa.

This potential loss could be more than offset by financial sector developments which South Africans are well qualified to exploit.

Legat explained: "Ghana's banks have not been keen to lend, partly because risk-free rates are so high. Some banks had loan-to-deposit ratios as low as 1%. Banks have preferred to take in low-cost deposits, invest in T-bills - at 18% in Ghana until recently - and pay out large dividends. However, major bank reforms will ease reserve requirements, potentially freeing large amounts of liquidity.

"Strong locally based players such as Standard Chartered and Soc Gen predict major growth in 'small ticket loans' averaging US$2,000 for education, non-mortgage house loans, auto loans etc.

"Lending to the agricultural sector is highly profitable since a cocoa marketing board guarantees to buy from farmers, ensuring a low rate of non-performing loans. There is obvious scope for some of the southern-African micro-lending specialists to move in. They may be tempted by the estimated default rate on new retail loans of about 2%."

Ghana's Bankers' Association is also setting up a credit reference system, another factor which may make the market more attractive to micro-lenders. Less than 12% of Ghanaians have a bank account and bank lending is equivalent to just 18% of GDP.

Legat added: "Financial service opportunities beckon and it will be no surprise if micro-lenders who have honed their skills in the Southern African market decide to have a closer look."

The Imara Group is an independent investment bank with more than US$140 million under management in southern Africa and is one of the region's leading issuers of equity capital, having raised more than US$1 billion for sub-Saharan corporations

The Group was originally founded as Edwards & Co in 1954. Robert Fleming bought into Edwards in 1994, but JP Morgan became owners in 2000 at a time when JP Morgan was actually retreating from Africa. Employees and minority shareholders from around the region decided to fill the vacuum being left by JP Morgan and others and formed Imara Holdings Ltd, which was incorporated in Botswana in 2002. Imara is regulated by the Bank of Botswana, and all investment offices are now regulated by their appropriate regulator.

The Chairman of the holding company is Philip Gray. The CEO of the Group is Mark Tunmer.

Chalco to buy 60% stake in 100,000 mt aluminium plant

Source: Dow Jones Metals Place, UK 17 January 2006

Aluminium Corp. of China Ltd., or Chalco, signed a letter of intent to buy a 60% stake in a Shandong-based aluminium plant in early January, according to a statement published on the company's Web Site Tuesday.

Shandong Huasheng Jiangquan Group Co. currently owns the plant, which has an annual capacity of 100,000 metric tons.

The plant includes two coal-fired power generators that can each produce 135 megawatts of electricity.

Chalco didn't state the amount it paid for the stake.

Analysts said Chalco is trying to expand across China after it aggressively pursued to buy stakes in different aluminium plants recently.

The company signed a few preliminary agreements to buy stakes in aluminium companies in the western province of Gansu and central China provinces of Shanxi and Henan late last year.

The Chinese aluminium giant is also exploiting mineral resources overseas.

In December, it signed a Memorandum of Understanding with Vietnam Charcoal Group to jointly develop Vietnam's Dak Nong bauxite mine.

Chalco, the flagship unit of its parent Chinalco, is China's largest aluminium and alumina producer.

Chalco is listed in the U.S. and Hong Kong.

According to a Xinhua news agency report, Chinalco's alumina production last year rose 15% on year to 7.8 million tons.

Chinalco's 2005 aluminium output was 1.4 million tons, up 16% on year.

Russian Aluminum Opens Itself to Banks and will tell everyone else who owns it soon

Kommersant, Russia Jan. 18, 2006

Rusal, considered one of the most secretive of the Russian metal companies, will disclose the names of its owners within the next six months, and convert to consolidated accounting under international standards and will introduce three independent representatives on the board of directors within a year and a half. It's all the price of an agreement with the International Financial Corp. and European Bank for Reconstruction and Development to allot $150 million to Komi Aluminum, a joint enterprise of Rusal and SUAL. Kommersant has obtained information that, in the documents presented by Rusal, only one owner is named – Oleg Deripaska.

IFC representative Christopher Goss told Kommersant that that the boards of directors of the banks made the decision to provide the $150-million credit to the aluminum company on January 10. The details will be worked out at a multilateral meeting between Rusal, SUAL, which have parity shares in the aluminum plant, and the two banks. It is known only that the banks will both provide $75 million for ten years. Those funds will be used to expand bauxite production at the Sredne-Timanskoe deposit from 1.6 million metric tons to 6 million tons by 2008 and to prepare for the construction of an alumina plant with a capacity of 1.4 million tons.

The banks first expressed their willingness to credit the project in August 2004, when SUAL was the sole owner of Komi Aluminum. The banks reacted cautiously when Russian Aluminum became involved in the project in April 2005, intentionally drawing out the decision process. Finally, they demanded more information about the ownership structure of Rusal and Basic Element, which is officially the owner of all Rusal stock. Analysts estimate that Rusal is worth $10-12 billion. In additional to the requirements the banks placed on Rusal, they are demanding that Basic Element adopt a code of corporate ethics and disclose information about its investments. No requirements were made of SUAL, which has had a relationship with the EBRD for four years already. The real motivation for Rusal's cooperation with the banks may be to preserve its relationship with SUAL. Kommersant has information that Rusal proposed buying the aluminum business from SUAL owner Viktor Vekselberg. They failed to agree on a price but may still discuss the sale of SUAL's share in Komi Aluminum.

by Maria Cherkasova, Dmitry Belikov

All the Article in Russian as of Jan. 18, 2006

Rusal refinery to up Guyana bauxite shipments to 1 mln tpy

TMCnet January 18, 2006

MOSCOW. Jan 16 (Interfax) - Rusal's Mikolayiv (Nikolayev) Alumina Plant in Ukraine will raise bauxite imports from Guyana to 1 million tonnes per year from 2008, Rusal told Interfax.

Rusal, one of the world's three biggest aluminum producers, and Guyana have signed an agreement on privatizing bauxite mines in Berbice, in eastern Guyana, and a contract to sell 2 million tonnes of bauxite a year over the next ten years.

Rusal said that not all of the bauxite would be shipped to Rusal's own alumina refineries. These will receive 350,000 tonnes in 2006, rising to 500,000 tonnes in 2007 and 1 million tonnes from 2008. The rest will be shipped to refineries in the Caribbean, Mediterranean and Black Sea regions, partly because contracts already exist to supply bauxite to third countries. But Mikolayiv will need additional bauxite in order to achieve its plans to raise alumina production to 1.6 million tonnes from 1.3 million tonnes.

Rusal does not produce more than 60% of the alumina its smelters require, and the Guyana deal will enhance its mining potential, Rusal said.

Aluminii, a Moscow-based consultancy, said the Guyana deal was consistent with Rusal's strategy of bridging its raw material deficit. The consultancy said Rusal aimed to double aluminum output by 2013 and was looking to step up its involvement in upstream projects in Russia and abroad.

In April 2005, Rusal closed the purchase of 20% of Australia's Queensland Alumina Mill, which will guarantee it an additional 770,000 tonnes of alumina a year. Rusal already has bauxite mines in Guinea, and alumina plants in Guinea, Russia and Ukraine.

Rusal said in a January 13 press release that it and Guyana agreed to privatize bauxite mines and other assets in Berbice, owned by AMC. AMC is managed by the Bauxite Company of Guyana, Inc. (BCGI), set up in 2004 and which is 90% owned by Rusal and 10% by Guyana.

Rusal will invest $20 million in the project and the state company will receive $22 million from BCGI under the privatization. An agreement is expected to be signed on March 30, 2006 to transfer assets to the joint venture.

The parties have also signed an agreement with freight company Oldendorf Carries to transport bauxite for ten years.

Berbice should produce a total of 2.5 million tonnes of bauxite in 2006.

Guyana's government is also hoping that Rusal will build an alumina refinery in the country.

Rusal increased primary aluminum output 3.1% to 2.671 million tonnes in 2004, alumina 5.3% to 3.14 million tonnes and bauxite 11.9% to 4.867 million tonnes. The company aims to increase alumina production to 8 million tonnes in eight years.

Rio Tinto FY output at record levels across many operations

Forbes 01.18.2006, 12:02 AM

SYDNEY (AFX) - Rio Tinto said a strong operational performance seen in the first nine months of the year continued in the final quarter with many operations setting production records for the full year.

The dual-listed Anglo Australian mining group said in its fourth quarter production report that shipments from its Hamersley's iron ore operations in Western Australia's Pilbara iron ore province set a new record for both the quarter and the full year.

It said the Western Australian iron operations were helped by the ramp-up of new ship loading facilities at the port of Dampier.

Hamersley's annual iron ore output rose 16 pct in 2005 to 86.132 mln metric tons after final quarter output rose 11 pct from the previous final quarter to 22.44 mln tons.

Output from the Rio Tinto managed Robe River joint venture, also in the Pilbara, rose 8.0 pct year-on-year to reach 27.764 mln tons in 2005.

Wholly-owned Iron Ore Company of Canada's output of iron pellets and concentrate rose 40 pct to 9.188 mln tons.

Rio Tinto said its Kennecott Utah Copper unit in the US continued its focus on the higher grade molybdenum ore to take advantage of higher margin production afforded by strong molybdenum markets

Fourth quarter molybdenum production was 16 pct higher than the previous record set in the third quarter, taking full year production to 15,600 tons, a 130 pct jump on the previous year.

Rio Tinto said alumina production for 2005 jumped 33 pct from 2004 to 2.963 mln tons.

However, fourth quarter production at the new Comalco Alumina Refinery at Gladstone in the Australian state of Queensland continued to be impacted by digestion pump performance, with the refinery producing 220,000 tons of alumina over the three months.

The group said its aluminum smelters in Australia and New Zealand all performed at record levels during the year, allowing group annual aluminum output to rise 2.0 pct to 853,700 tons.

Gold and copper production at the Grasberg mine in Indonesian Papua increased further during the quarter, benefiting from increased access to higher grade ore and improvements in mill throughput, Rio Tinto said.

It said Grasberg, in which Rio Tinto is a joint venture partner with Freeport McMoran Inc of the US, raised its full year output 128 pct from 2004 when output was affected by a landslide.

Rio Tinto's share of Grassberg's copper output was 109,600 tons while its share of Grasberg gold production rose 710 pct to 670,000 ounces.

The group's share of copper from the BHP Billiton managed Escondida joint venture in Chile rose five pct in 2005 to 381,100 tons while its copper output from the Kennecott Utah mines fell 16 pct to 220,600 tons.

Hard coking coal output from Australian mines rose 6.0 pct to 7.19 mln tons in 2005 but output of other types of coal fell 6.0 pct to 30.863 mln tons.

Rio Tinto said it boosted pre-tax expenditure on exploration and evaluation in 2005 by 60 mln usd to 250 mln usd from a year earlier, reflecting increased brownfield exploration to expand existing resources and continued evaluation work on advanced projects.

bruce.hextall@xfn.com

Contractor claims he thought waste material was fertiliser

Malaysia Star, Malaysia Thursday January 19, 2006

By MARSHA TAN and FARIK ZOLKELPLI newsdesk@thestar.com.my

JOHOR BARU: The contractor who was hired to dump the toxic waste in Labis has come forward to claim that he was duped into believing the waste material was fertiliser.

Tey Tian Seng, 30, also revealed that there are two more such illegal dumpsites in the state.

In a press conference in Segamat yesterday, Tey said he was engaged by a Malacca-based company late last year to dump waste but he didn't know the material was aluminium dross.

Tey: ‘I am very sorry to the people. I really did not know that it was dangerous material’

"I was told by the company that it was some form of fertiliser," said a distressed Tey who fretted over how he and two other drivers did not wear protective gear when handling the waste.

Tey declined to identify the location of the two sites because he wanted to inform the Department of Environment (DOE) first.

He said a middleman would identify the dumping ground, usually a sand mining site, and Tey’s job was to deposit the waste and cover it up with soil. Tey also said he was paid RM50 per tonne for the task.

(He would have been paid RM15,000 for depositing the 300 tonnes of waste recovered at Kampung Sungai Gatom in Labis).

"I am very sorry to the people. I really did not know that it was dangerous material. I hope I can set things right by coming forward and help the authorities get to the bottom of this," said Tey, who was accompanied by his lawyer Pang Hok Liong.

Meanwhile, State Tourism and Environment Committee chairman Freddie Long said that since Jan 13, some 330 tonnes of aluminium dross buried 3m in the ground had been unearthed and sent for disposal at Bukit Nenas in Negri Sembilan.

Long said the authorities have been monitoring the air and water quality in the affected areas and found that the ammonia level was below the danger point. A total of 568 evacuees from 135 families were allowed to go home on Tuesday, he said.

Johor Mentri Besar Datuk Abdul Ghani Othman, when met at a function later, said the two sites were in an oil palm plantation at Batu 8 and Batu 9 of Jalan Yong Peng in Labis.

He added that the DOE would seal off the area and arrange to remove the waste as soon as possible.

"Next, it will have to ascertain what kind of waste it is and whether it is hazardous to the environment," he said.

Alba wins ISO certification

Trade Arabia, Bahrain Wednesday, January 18, 2006

Manama

Bahrain Aluminium (Alba) board of directors chairman Dr Mohamed Al Ghatam yesterday received the International Standards Organisation (ISO) 9001:2000 certification.

The certification was awarded following a detailed quality audit of its casthouse production processes, among others. The function was attended by Alba acting chief executive Ahmed Saleh Al Nuaimi, engineering and maintenance general manager Hussain Al Ali, cast house manager Abdul Hameed Najim and quality management systems co-ordinator Kishore Ghosh.

The audit, conducted by DNV, an independent foundation that is headquartered in Norway with about 300 offices and 6,400 highly qualified engineers and technical personnel in 100 different countries, examined both Alba's new and existing Quality Management Systems.

It also examined the interfaces between the cast house systems and the stores, marketing, maintenance and purchasing departments.

"The internationally recognised ISO 9001:2000 standard is not a product standard - it is applicable to any manufacturing or service industry and was created by the ISO to set international requirements for Quality Management Systems," said Brochoff.

"In qualifying for this certification, Alba has proved that its Quality Management System have been certified against a best practice standard and found compliant.

"The ISO 9001:2000 is the latest version of the ISO quality standard and places more emphasis on continual improvement and customer satisfaction than the older versions.

"It applies to the processes of an organisation that influence quality and its major clauses cover Quality Management Systems, Management Responsibility, Resource Management, Product Realisation, Measurement, Analysis, and Improvement."

Bauxite sector shutdown could be averted

radiojamaica.com, Jamaica Wed Jan 18, 2006

A wide scale shutdown of the local bauxite sector could be averted Wednesday in the wake of an understanding arrived at early Wednesday morning during an emergency meeting at the Ministry of Labour.

A proposal has been formulated aimed at ending the strike by scores of independent contractors at the Jamalco Plant in Halse Hall, Clarendon.

Following signs that the strike was about to spread to other bauxite companies Labour Minister Horace Dalley intervened Tuesday night and summoned officials of the Union of Technical, Administrative and Supervisory Personnel, UTASP to the meeting.

UTASP was embroiled in a bitter feud with Jamalco over whether it had representational rights on behalf of the company's 250 independent contractors.

Following an eight hour meeting chaired by the Labour Minister an understanding was reached with UTASP concerning its status.

However, the parties have declined to disclose details of the proposal pending a meeting which will be held with Jamalco workers.

General Secretary of UTASP St. Patrice Ennis says it's now up to the Jamalco workers to decide whether the Labour Ministry's proposal should be accepted.

The strike by the contractors has had a major impact on Jamalco which has curtailed operations until further notice.

Until Tuesday, the executive of the bauxite alumina council decided to shut down the sector for two days in support of the Jamalco workers.

There is no word whether this threat still stands in light of the Labour Ministry's intervention.

In the meantime, the Government is worried that the industrial unrest at Jamalco could jeopardize expansion plans for the company.

Minister with responsibility for the bauxite industry Dr. Paul Robertson says every effort should be made to maintain stability at the company so that the expansion is not derailed.

Jamalco is currently undergoing a one-point-two billion US dollar expansion which is expected to increase annual production by one-point-five million metric tons.

The first phase of the expansion is scheduled to be completed by the end of this year.

Bauxite dispute headed for court

Taneisha Davidson

Thursday, January 19, 2006

JAMALCO contract workers resumed work yesterday at the Halse Hall plant in Clarendon after a night of talks that ended in a five-point agreement brokered by the labour ministry, averting a larger crisis within the testy bauxite/alumina industry.

Jamalco, which was forced to scale down operations Monday, said in a release yesterday that operations at the refinery were returning to normal.

But, the 100 independent contract workers were no closer to the recognition they sought from Jamalco - the right to have union representation.

Instead, the parties agreed that the Union of Technical, Administrative and Supervisory Personnel (UTASP) would have the courts determine the employment status of independent contractors and whether they are entitled to union representation.

"We will be exploring the possibility of taking the matter to court because we believe that this is a case of importance," UTASP general secretary St Patrice Ennis told the Observer. "This has implications for the industry."

The Jamaica Confederation of Trade Unions (JCTU) will join with UTASP in the legal fight.

Jamalco workers went on strike Monday after the company refused to recognise UTASP as the representative of the 100 workers, prompting the intervention of labour minister Horace Dalley. Dalley called the emergency meeting to avert a larger crisis in the industry, after trade union executives threatened a two-day lock-down of the industry saying that Jamalco was infringing on the workers' rights to union representation.

"We have also been given the assurance that there will be no victimisation of any of the workers that participated in the strike," said Ennis.

Bauxite crisis talks

Dalley calls meeting as industry shutdown looms

Observer Reporter Wednesday, January 18, 2006

Government and trade union officials were last night locked in an emergency meeting trying to resolve a strike at the Jamalco alumina refinery in Clarendon that yesterday threatened to spread to other plants in the vital bauxite sector.

Labour Minister Horace Dalley called the meeting after the Local Bauxite/Alumina Council warned of a two-day lock down of bauxite companies in support of a strike by over 100 Jamalco independent contract workers.

The independent contract workers are accusing the Jamalco management of infringing on their right to union representation.

"The Local Bauxite/Alumina Council has mandated a two-day total shutdown in support of the Jamalco workers who cannot exercise their fundamental right of taking on union representation," chairman of the council, Norman Dacosta, told the Observer yesterday.

He said the decision was made yesterday during a meeting of the council, which included union delegates of all bauxite/alumina companies.

The lockdown, Dacosta said, "will occur any time after midnight. and we will extend this time if we do not get a satisfactory response".

The Union of Technical, Administrative and Supervisory Personnel (UTASP) issued the strike notice on Jamalco last Friday night after being informed by the labour ministry that it could not process the union's claim for bargaining rights on behalf of the contracted employees, because they are not considered workers under the definition of the Labour Relations and Industrial Disputes Act (LRIDA).

".We have been advised that the overall terms and conditions of employment are in the nature of independent contractors, that is, the persons employed by Jamalco under the contract for service are not workers within the meaning of the Labour Relations and Industrial Disputes Act," the ministry responded in a January 5 letter to UTASP's claim filed on September 22 last year.

In 2001, Jamalco fired 300 workers, who were then represented by the University and Allied Workers Union, after a wildcat strike. Some of those workers were re-employed, but were required to register with the Office of the Registrar of Companies as private companies or contractors before returning to work.

The contracted employees have since been seeking to join UTASP, but the company has insisted that this is not possible as they are individually contracted and not part of a single bargaining unit. The company has also questioned UTASP's right to issue a 72-hour strike notice without having representational rights.

But UTASP general-secretary St Patrice Ennis has insisted that even if the workers do not fit the LRIDA's description of a worker, they have the right to freedom of association under the Jamaican Constitution, and based on that right he had issued the strike notice.

Yesterday, placard-bearing workers picketted the Jamalco entrance and Llewellyn Christian, chief delegate for UTASP-represented staff at the refinery, told the Observer that the contracted workers had no alternative but to withdraw their services. He also described the atmosphere at the plant as tense.

"People are apprehensive, they think the situation out here at the front is very tense, they don't want to be crossing any picket lines, and inside the plant the situation is dangerous because the plant is unmanned and anything could happen," said Christian. "I am not prepared to endanger the lives of the people I represent."

He accused the management of playing hardball on the issue and urged the company to either close down the plant safely or resolve the dispute in the shortest possible time.

However Jamalco's public relations and communications manager, Blossom Laidlaw, said the company could not afford to completely shutdown operations as it would be very time-consuming to get back to 100 per cent after the dispute had been settled.

"We have to keep it going, but we are not producing because if we close it down it would take three days to bring it back up and then it would take another two weeks to get it back to normal," she said.

Jamalco Location Manager Alberto Fabrini, in a release explained that the company was forced to curtail its operations to ensure the safety of the workforce and the surrounding communities, as well as to protect the company's assets.

"Jamalco allows for freedom of association," added Fabrini. "However, there is a legal process that must be followed by any entity seeking representational rights. Jamalco cannot and will not step outside this legal process."

The strike began on Monday at 4:00 pm, causing the company to lose approximately 3,800 to 4,000 metric tonnes of alumina, which is normally produced daily.

The company yesterday said it deemed the withdrawal of service by the contractors as a breach of their contract, and notified them accordingly.

MALAYSIA: Dirty Dam Draws Dirty Smelters

OneWorld.net, UK 19 January 2006

Inter Press Service (IPS) ,Anil Netto

KUALA LUMPUR , Jan 19 (IPS) - Transnational aluminum smelters, some teaming up with Malaysian partners, are beating a path to eastern Sarawak state with an eye to surplus power from the problem-ridden Bakun Dam.

The much-delayed dam in Sarawak, on Borneo island, was originally scheduled for completion in 2003, but is now only expected to gradually generate electricity from late 2009.

Faced with soaring electricity tariffs and raw material costs, many aluminum plants have closed shop in the United States and Europe. Major smelters are now scouring the globe for places where electricity is cheap and their sights have narrowed down on Bakun's excess potential even as environmentalists worry about the impact that the dam, and now the smelters, would have on the environment.

In particular, smelters from China, the world's largest aluminum user, have been showing a keen interest in Bakun. Last year, over 40 smelters stopped production in China due to higher costs and government moves to curb pollution -- resulting in a loss of more than half a million tons of aluminum.

The 2,400 megawatt Bakun hydroelectric dam project was approved by the administration of former premier Mahathir Mohamad in 1994, amidst an outcry that the dam would submerge rainforests covering an area the size of Singapore and displace thousands of indigenous people.

Planners ambitiously aimed to channel 70 percent of the dam's generated power across the South China Sea to Peninsular Malaysia by laying over 600 km of submarine cables. It would have been the longest undersea transmission line in the world and an expensive proposition.

Local firm Ekran was awarded the contract to manage the project while the construction contract went to the Zurich-based multinational Asea Brown Boveri (ABB). But by 1997, with the onset of the Asian financial crisis and amidst disputes over cost over-runs, the government announced that it was delaying the project and paid compensation to the firms involved.

In 1999, it was announced that the dam would be scaled down. The submarine cable idea, its technical feasibility always in major doubt, was scrapped but work on the river diversion tunnels began and have now been completed.

In 2001, the government, perhaps mindful of the work already done since 1996, decided to stick to the original 2,400 MW capacity. But without the undersea cables, the economic justification for the dam -- to channel electricity to the more industrialised peninsula -- evaporated.

''It's utterly unnecessary,'' said one Sarawak-based political analyst of the dam, declining to be identified for fear of repercussions. "The only people who need the dam are the Sarawak politicians and their cronies.''

Moreover, he added, Sarawak has a wealth of alternative energy resources such as natural gas. According to the Bintulu Development Authority, the state has a total known gas reserve of about 50 trillion standard cubic feet.

On Bakun, the government faced a stark choice: cut its losses -- some two billion ringgit (0.5 billion US dollars) already spent and prevent any further environmental damage or pour more money -- a further 5-6 billion ringgit (1.3-1.6 billion dollars) -- into an ever-deeper hole. It decided to press on.

The government, through an outfit called Sarawak Hidro, took over the management of the project. A Malaysia-China Hydro Joint Venture consortium, led by a Malaysian firm, Sime Darby Berhad, is now constructing the dam. Already, there are reports of cost overruns and delays.

But what to do with all that surplus electricity from the dam? After all, Sarawak state itself and neighbouring Sabah have comfortable reserve margins. Electricity demand in Sarawak remains modest (currently under 1,000 MW).

Plans to distribute Bakun's power to the rest of Borneo, which is politically divided among Malaysia, Brunei and Indonesia, never took off.

Enter the giant multinationals, teaming up with local firms, seeking approval to build a smelter in Sarawak. The production of aluminum requires a huge amount of electricity, accounting for close to 40 percent of production costs, which explains why many smelters are built near major sources of electricity supply.

One visitor to a popular local current affairs blog summed it up: ''Bakun Dam is the solution to Sarawak's power shortage. But they forgot Sarawak has no power shortage. That's no problem to the dam's promoters: just create a shortage by building an aluminum plant. That way, they succeeded in finding a problem for the solution.''

Even the business weekly, 'The Edge' seemed to agree: ''In Sarawak, the main reason the federal government is allowing an aluminum smelter is to salvage Bakun,'' it said in a candid report. Among those The Edge reported as bidding for approval to build a smelter is local firm Smelter Asia, teaming up with China Aluminium International Engineering, which reportedly wants to set up a 500,000 tonne capacity plant that would consume about half of Bakun's output.

Another Malaysia-China consortium is seeking approval for a 3.2 billion dollar smelter. The local firms in this consortium are Cahya Mata Sarawak (CMS) and Press Metal.

Giant multinationals reportedly also in the running are Australia-based Rio Tinto Group, BHP Billiton teaming up with Mitsubishi Corp, and the Alcoa Group.

Smelter Asia is owned by tycoon Syed Mokhtar Al-Bukhary, who has warm ties with former premier Mahathir Mohamad. CMS, on the other hand, is a well-connected group with diversified interests in Sarawak led by Sulaiman Abdul Taib, the son of the powerful Sarawak chief minister Taib Mahmud.

Critics point out that its unit, CMS Cement, which is capable of producing some 2 million tons a year, has a near monopoly on cement in Sarawak while another unit, CMS Steel, produces 300,000 tonnes of steel bars and wire rods.

In 2004, the group announced that CMS Energy had been awarded a 51 percent stake in a contract worth RM 130 million (30 million dollars) for the "Design and Execution of the Hydraulic Steel Structure Package" of the dam. The group is thus well placed to benefit from the dam's construction work, which requires huge amounts of cement and steel.

Apart from the questionable justification for Bakun, environmentalists are worried about the polluting effects of smelters. Smelters emit perfluorocarbon (PFC), which is detrimental to humans, animals and vegetation and has global warming potential.

''Communities in the adjacent areas would be affected by its polluting emissions, once it is built,'' said Wong Meng Chuo, a college lecturer and social activist who spent many years working among communities in Sarawak. "It is also of concern that the industry would bring changes to the social structure as well as to the cultural practices of the community.''

From experience, he said, such changes are always more of a negative nature since the community is often ill prepared for them. The smelter's impact on the natural environment "could be devastating, especially in a developing country like ours where law and enforcement is lax''.

''I think it's a dirty industry,'' agreed the political analyst who did not want to be identified. "We don't need it in Sarawak at a time when the environment has already been terribly degraded through logging and the rivers polluted through siltation and sedimentation.''

China favours Townsville for aluminium smelter: MP

ABC Regional Online, Australia Friday, January 20, 2006. 12:12pm (AEDT)

A north Queensland state MP says the Chinese consortium bidding to mine bauxite in the state's far north is favouring Townsville as a possible site for a aluminium smelter.

The Chinese group is among 10 vying for the lease on the Aurukun bauxite deposit and the successful company will have to value-add the resource in Queensland.

The Member for Thuringowa, Craig Wallace, returns today from a trip to China where he talked to mining industry officials.

He says Townsville has strong support from Chinese alumina customers.

"We've had discussions with some of the major aluminium users in China, especially in Beijing where they use a lot of aluminium in glazing for their windows, and they'll be lobbying the Chinese consortium members to ensure that Townsville gets a good run should they gain those deposits in Aurukun," he said.

Mr Wallace was on a private holiday to China.

Viet Nam, China sign aluminium industry development agreement

Viet Nam News Agency, Vietnam 01/19/2006 -- 21:41(GMT+7)

Ha Noi, Jan. 19 (VNA) - The Viet Nam Coal and Mineral Industries Group (VCMIG) and the Aluminium Corporation of China Limited (CHALCO) have just signed an agreement in Beijing on bauxite exploitation and aluminium production in Viet Nam's Central Highlands Dac Nong province.

Under the agreement, the two sides will invest in bauxite exploitation, alumina refinery and electrolysis. An industrial complex of alumina, power and aluminium electrolysis plants with a capacity of 1.9 million tonnes per year will be built in the first phase.

A 600 MW thermo power plant and another 300,000 tonnes per year aluminium electrolysis will be built after that.

Both sides also agreed to set up two joint ventures, in which the VCMIG will hold 51 percent of shares in the first, the Mine Exploitation Joint Venture, and CHALCO will hold 60 percent of shares in the other, the Aluminia Joint Venture.

At the signing ceremony, CHALCO also agreed to help Viet Nam ask China's Government for preferential loans to build a railway linking Dac Nong to a seaport.

Jamalco workers back on the job

Jamaica Gleaner, Jamaica Thursday | January 19, 2006

Dionne Rose, Staff Reporter

MORE THAN 200 independent contract workers who took strike action at the Jamalco bauxite refinery in Clarendon on Tuesday returned to work yesterday morning.

The workers had taken strike action to protest the company's refusal to grant them the right to union representation.

The decision to return to work was made following a meeting yesterday morning between the workers and representatives of the Union of Technical, Administrative and Supervisory Personnel (UTASP) and the Jamaica Confederation of Trade Unions.

UNION GOES TO COURTS

General Secretary of UTASP, St. Patrice Ennis told The Gleaner that following a marathon meeting at the Labour Ministry it was decided that the matter of union representation for the workers would be addressed through the courts.

He said the matter would be dealt with expeditiously.

"We have also agreed that we will retain the services of an attorney ... to collect data from the contractors to determine their true status and conditions of work for the writ to be filed to determine their true status," Mr. Ennis said.

In addition, he said the Labour Minister, Horace Dalley, had assured the workers that no sanctions would be laid against them following their protest action.

The island's trade unions had threatened a two-day shutdown of the bauxite sector if the matter had not been resolved.

Meanwhile, Jamalco said it was still conducting an assessment of the impact of the strike action by workers on the company's operations.

According to communications manager, Blossom Laidlaw, operations at the refinery are gradually returning to normal.

"We are pleased that the individual contractors have decided to end industrial action and taken their bid for representational rights through the legal process," said Alberto Fabrini, location manager, in a statement issued by the company.

Time for trade unions to modernise

Jamaica Observer, Jamaica Thursday, January 19, 2006

Michael Burke

The trade unions served a useful purpose in 1938 when conditions akin to slavery were still in existence.

But as the years have gone by workers have received all sorts of rights, thanks mainly to trade unions. Today they have to be creative in making their entities viable. So every now and then strikes are called, sometimes for reasons that are quite whimsical.

In some countries, trade unions have gone into the business of organising cooperatives. And I am suggesting that our local trade unions do the same in Jamaica.

This was the vision of Norman Manley, to develop a country where the poor would no longer have to depend on a few capitalists for employment. This is why in 1937 he established Jamaica Welfare (known today as the Social Development Commission).

Jamaica Welfare came about when the small banana farmers had been wiped out because of a certain disease that affects the banana plant. It so happened that the banana farmers had formed themselves into a cooperative in the 1920s and the elder Manley was their lawyer. So he put a proposal to the head of the United Fruit Company to give an endowment to the banana cooperative.

So Jamaica Welfare was set up in 1937. Immediately, farm cooperatives were set up like the Lucky Hill Farm in St Mary. All sorts of community centres were set up where craft work was done.

About four years later, the Young Men's Sodality of the Holy Trinity Roman Catholic Cathedral set up a credit union. All credit unions are cooperatives; the difference being that credit unions deal with savings and credit while the others are business enterprises. But they are all owned jointly.

By 1950 the Cooperative Act of Jamaica came into being which encompassed both the service or business cooperatives and the credit unions. There are two credit unions still in existence that were established before the Cooperative Act of 1950. These are the Sodality Credit Union and the GSB Credit Union. By 1942 the credit unions formed themselves into a league and by 1959 the National Union of Co-operative Societies was established.

Today, the Jamaica Cooperative Credit Union has a substantial number of shares in Radio Jamaica and so does the National Union of Cooperative Societies. Efforts by me over the last 17 years to get the credit union movement to buy shares in a hotel have not borne any fruit. So I have come up with another plan.

I would like to see a cooperative that offers services to the hotel industry. And eventually that cooperative could buy shares in one hotel. The hotel industry needs workers at various levels and it would mean that workers would become their own bosses. I would also like to see the bauxite credit unions buy shares in the bauxite plants.

Let's face facts. Apart from remittances, tourism is Jamaica's largest foreign exchange earner, even if the sugar industry which is on the decline is the largest employer of labour. The bauxite industry also brings in a sizeable amount of foreign exchange.

The main benefit to workers would be that it would not be a few people calling the shots. The truth of the matter is that there is still a form of physical slavery in Jamaica, only that it is now refined. The whip is no longer used but everyone is hyped up to own a car and a posh house. So employers prefer to employ men who are recently married because at that stage of marriage, the young man is usually doing everything to please his wife. And what does his wife want? A car and a house.

The employer will gladly give a recommendation to the employee to get a loan from a financial institution and hope that the repayment plan is as long as even 10 years. Since it is only that job which pays him sufficiently to service his loans, then he had better do as the boss says. In such a scenario, he does not even want to take industrial action when instructed by a trade union to do so for fear that the boss will shut down the business and simply live on the interest on his savings in the bank.

The solution for the workers could be cooperatives that buy on the stock market and give the workers real ownership.

And this is the area that all trade unions should be working on. But most of our trade unionists are set in their old ways and have absolutely no desire to retrain themselves into cooperative principles. The workers therefore will have to help themselves by forming their own cooperatives.

How Sydney tops Kyoto on emissions

The Age, Australia January 21, 2006

By Greg Hunt

Australia has just hosted the inaugural meeting of the Asia-Pacific Partnership for Clean Development and Climate, or Sydney partnership. What did it achieve and how does it meet criticisms?

In short, the Sydney meeting laid out a framework that has the potential to deliver more savings in greenhouse gases over the coming decades than the Kyoto process and it offered a genuine clean technology bridge between developed and developing economies that has been missing from Kyoto.

Three achievements stand out from the meeting, which brought together China, India, South Korea, Japan, the United States and Australia to promote clean technology and reduce greenhouse emissions.

First, by committing to clean technology exchange in steel, aluminium, cement, coal mining, power generation, fossil fuel emission reduction and renewable energy, the Sydney partnership laid the foundation for savings of up to 90 billion tonnes of greenhouse gases between now and 2050.

The greenhouse effect turns on one simple fact, the tonnes of CO2 and related greenhouse gases emitted, no matter whether they come from developed or developing countries.

The Australian Bureau of Agricultural and Resource Economics has estimated that the 90 billion tonnes of CO2 abatement flowing from the Sydney Partnership is of profound significance. It compares with an estimated annual saving of 500 million tonnes of greenhouse gases under the Kyoto process. If Kyoto is projected to 2050 then that would represent about 25 billion tonnes saved.

Let's assume, though, that the Kyoto benefits were tripled against present projections. The resulting abatement of 75 billion tonnes is well short of the partnership's projected 90 billion-tonne minimum savings.

The second achievement is that by initially focusing on the emerging giants of China and India - which have no commitments under Kyoto - the US, Japan and South Korea, the partnership members account for 50 per cent of global emissions today and an estimated 55 per cent in 2050.

The Sydney partnership provided the basis for the world's first major greenhouse aid initiative. Given that the great growth in emissions over the next 30 years will occur in China and India, we will have no hope of ensuring real change in our projected emissions without assisting them. This is precisely what the partnership agreed to do in both technology and direct aid of up to $400 million over the coming years.

Third, the Sydney partnership consciously engaged industry, despite criticism of that approach. The very people needed to change emissions practices - the power, transport, aluminium, cement and steel industries - have been largely excluded from the Kyoto process. With some recalcitrant exceptions, these industries are keen to produce more energy-efficient products.

The Sydney partnership has been criticised because it is not Kyoto and there are no binding targets. The response is simple. Both the savings from the Kyoto process and the Sydney partnership can be added together and, in the case of Sydney, have been projected over a 44-year period. They are complementary and the projected savings under each are from different physical processes as well as being largely from different countries.

In addition, the Sydney meeting was criticised as an Australian cover-up for not ratifying Kyoto. However, the purpose of Kyoto is to reduce emissions and it is enlightening to note that the European Union is predicted to overshoot its emissions targets by 5.1 per cent, Germany by 2.1 per cent, the Netherlands by 6.6 per cent, Denmark by 20.2 per cent, Japan by 13 per cent, New Zealand by 32 per cent and Canada by 19 per cent, among others.

Some of these countries are critics of Australia. Yet Australia, which has been criticised for not ratifying the agreement, is one of the few countries that will meet its targets.

The Sydney partnership was criticised because it will not lead to a reduction in emissions against actual volumes today, but only against the business-as-usual doubling of emissions expected by 2050.

True, it is expected that world emissions will double by 2050. However, if you take away 90 billion tonnes of emissions over that time, or 23 per cent of 2050 emissions, that is a real and powerful step forward. For Australia to have leveraged the biggest economies in the world into making cuts that may not otherwise have occurred is a major contribution.

While the Sydney partnership was only a first step in engaging China, India and the United States, it may well prove to be the decade's most important initiative in curbing the greatest sources of new emissions over the next half-century.

Greg Hunt is the Liberal MHR for Flinders and parliamentary secretary for the environment.

NALCO sells 30,000 T alumina in tender

Reuters India, India Fri Jan 20, 2006 4:19 PM IST

NEW DELHI (Reuters) - India's state-run National Aluminium Company Ltd. has sold 30,000 tonnes of alumina to a trading firm in Switzerland, a senior company official told Reuters on Friday.

"It was sold at $590 a tonne FOB (free on board) on the basis of a tender," the official said, adding that the alumina was for delivery in the middle of February.

© Reuters 2006. All Rights Reserved.

Anglo's extreme makeover

Mineweb, South Africa '20-JAN-06 08:38' GMT © Mineweb 1997-2004

By: Barry Sergeant

JOHANNESBURG (Mineweb.com) -- What would Ernest and Harry Oppenheimer think of the extreme makeover currently under way at Anglo American? What would they make of the underperformance that is forcing drastic deep-cut surgery on their once-magnificent creation?

In March 2001, when the then stricken global resources sector was in the earliest stages of emerging from years of depression, four stocks totally dominated the sector. Alcoa, BHP Billiton, Anglo American and Rio Tinto carried market capitalisations of $23 billion to $30 billion. Now the scene is very different.

The value of Alcoa, the world’s biggest aluminium stock, but more a fabricator of the metal than a miner, has contracted from $30 billion to $25 billion. Out goes Alcoa from the top four; its place has been seized by a true-blue resources company, CVRD, Brazil’s pride, worth $10 billion in 2001 and now $53 billion.

Rio Tinto’s market capitalisation has almost tripled, to $70 billion. In terms of size, BHP Billiton stands alone with a market capitalisation of $110 billion. Why has Anglo American lagged so heavily, with a current value of $53 billion? Why has the value of Anglo American only doubled while BHP Billiton’s has quadrupled?

Many of the answers can be found in examining entrepreneurial and leadership skills. Upon South Africa’s first democratic elections in 1994, Johannesburg hosted six mining houses. Anglo American then also controlled Johannesburg Consolidated Investment, or JCI, and then there were Anglovaal, Gencor (formerly General Mining & Finance Corporation, an entity successfully established for Afrikaners by Anglo American), Gold Fields of South Africa and Randgold & Exploration (formerly Rand Mines).

In this famous year for South Africa, the domestic resources sector plunged into an extensive and unprecedented period of corporate restructuring that included unbundling, or divestment. During 1994, Brian Gilbertson unbundled Gencor into consumer products, energy, forest products and investments. Free of the prohibitive shackles of apartheid, the mining houses exploded into frenetic activity beyond South Africa’s borders.

In May 1995 Anglo American unbundled its holdings in JCI into JCI Limited (gold, ferrochrome, coal and base metals), Anglo American Platinum (a consolidation of interests from both Anglo American and JCI, forming the world’s number one platinum-group metals producer, which has remained under Anglo American’s control), and Johnnies Industrial Corporation (Johnnic). The remnants of Johnnic recently fell to HCI, and the late Brett Kebble ruined the remnants of JCI.

Gilbertson, by contrast, working with just the remnants of Gencor, took and refined a model developed by Rio Tinto: go for world-class assets (low cost, long life), control maximum possible cash flow, and focus on just one listed company. Gilbertson unleashed a dazzling series of transactions, including the critically important acquisition of the worldwide mining assets of Billiton, itself a divestment from Royal Dutch/Shell.

Gilbertson pulled his company out South African gold and platinum in and around listing the new Billiton in London in 1997. On June 29 2001, Billiton merged with Australia’s BHP and was dual listed in London and Australia, retaining a secondary listing in Johannesburg. On January 6 2003 Gilbertson stormed out of a board meeting and resigned but by then he had formed the world’s biggest diversified resources stock.

The entity has since gone from strength to strength. Since becoming CEO, Chip Goodyear has found only one further merger and acquisition necessary, that of Australia’s WMC. That was paid for in cool cash of $7,2 billion, showing what real muscle is all about.

Anglo American adopted a completely different strategy, merging on October 15 1998 with Minorco, its international associate, to form a new company, Anglo American Plc. This entity shifted its headquarters and primary stock listing from Johannesburg to London.

Only on October 26 2005 did Anglo American finally concede (apparently so, anyway), that it was underperforming and out of sorts. It announced ‘further rationalisation and simplification of the group’s portfolio and structure and an increasing focus on controlled mining businesses which leverage the core skills of the group’.

By then, the cat was long out of the bag. In the half-year to June 30 2005, of Anglo American’s operating earnings of $3,2 billion, half was contributed by entities not managed directly by Anglo American: ferrous metals and industries, diamonds (De Beers), platinum (Anglo Platinum) and gold (Anglogold Ashanti). Indeed, ferrous metals and industries was the single biggest contributor to earnings, at 25% ($791m). Not one entity here – Kumba, Highveld Steel, Scaw Metals, Tongaat-Hulett, Terra, Samancor, and Boart Longyear – was directly managed by Anglo American.

In September last year, Citigroup pointed out that three of Anglo American’s divisions (forest products, industrial minerals and gold) used 50% of group assets to produce 18% of group operating profit. These kind of metrics do not impress investors.

Anglo American has not done anything imaginative for years. On the contrary, its past decade has been characterised by a series of poor decisions, not least pulling out of the auction for CVRD (too ‘expensive’); quitting the bidding on Australia’s North (which went to Rio Tinto); quitting Zambia Copper Investments and Konkola Copper Mines in 2002, at a cost of $34 million in 2002 in addition to a $353 million write-off taken in 2001.

Much at this time, Anglo American sold its 50% stake in the gigantic Salobo copper deposit in the Amazon to CVRD for a measly $51 million. The Zambia and Brazil copper transactions were executed at perfectly the wrong time, when copper was $1 500 a ton. Today it is at historic highs of $4 500 a ton. And so on.

Anglo American is now entering its most extreme makeover phase, more than a decade after Gilbertson imploded Gencor. In a year or so from now, Anglo American will be unrecognisable, if only its management can clear their heads of romantic notions, and instead implement what Ernest Oppenheimer would surely have done. The game is up.

see the graph at http://www.mineweb.net/sections/whats_new/830084.htm

Ormet and striking workers set to resume talks

Associated Press Fort Worth Star Telegram, TX 20-Jan-2006

HANNIBAL, Ohio - Ormet Corp. and unions representing about 1,200 striking workers at two southeast Ohio plants are scheduled to resume negotiations Jan. 31 in Pittsburgh, the company said.

Union members have not worked at Ormet's aluminum plants in Hannibal, along the Ohio River, since Nov. 22, 2004. Both union locals voted to strike four days before that, but a judge ruled last month that their action was forced by the company.

The ruling by Monroe County Common Pleas Judge William Harris means that the strike is actually a lockout, and workers may collect unemployment pay.

Ormet has appealed the ruling but is not challenging the unemployment benefits, spokeswoman Linda Regelman said.

But if the ruling is overturned, the Ohio Department of Job and Family Services would expect the $2.1 million paid in benefits to be returned to the state, the agency said.

Ormet, based in Wheeling, W.Va., filed for bankruptcy in January 2004 and imposed a restructuring plan that reduced pensions and other benefits in November.

That was a one-sided change to the existing labor contract, Harris ruled

Turkish companies to build metallurgical and aluminum plants in Turkmenistan

Turkmenistan.ru, Turkmenistan 20.01.06 19:06

Turkmen President Saparmurat Niyazov today received visiting Ashgabat Turkish Energy and Mineral Resources Minister Mehmet Hilmi Guler and Secretary-General of Justice and Development Party Idris Naim Sahin as well as accompanying them Recai Berber, head of the ERDEMIR industrial consortium, and Muhammet Chapa, head of SEHIL company.

The Turkish minister conveyed greeting messages from his President Ahmed Hejdet Sezer and prime minister of Turkey Rejep Tayyp Erdogan to the Turkmen leader.

As Mehmet Hilmi Guler noted, Turkey attaches great importance to strengthening and developing the bilateral relations with Turkmenistan. According to him, Turkish people watch with keen interest the transformations that take place on the land of their ancestors in the era of independence and are happy with the successes of their Turkmen brothers.

Saparmurat Niyazov also conveyed the best wishes to the leaders of Turkish republic, having stressed that every visit by envoys of the friendly state is another evidence of the sides’ aspiration for further expansion of mutually advantageous partnership.

According to the State news service (TDH), during the meeting, the sides discussed the progress of earlier accords, and above all, in the strategically important fuel and energy sector, including the supply of Turkmen electricity to Turkey. As is known, export of Turkmen electricity to Turkey started in December 2003 via Turkmenistan-Iran-Turkey energy bridge constructed under a trilateral accord. In this context, the sides reaffirmed their mutual interest in continuation and expansion of mutually advantageous cooperation in this sphere and agreed to expand the efficient partnership in the gas field.

During the meeting, the sides also discussed the issue of constructing a US $ 64.5 mln metallurgical plant, the first ever in the country. The plant will be constructed by the ERDEMIR industrial consortium and the SEHIL company, according to the signed contract. In this connection, Turkish representatives expressed readiness to launch this project noting that it would turn a new page in the history of the bilateral partnership. Turkish businessmen also pledged to construct one more facility, an aluminum plant, in Turkmenistan.

Having expressed satisfaction with the wish of the guests to take part in implementation of this large project, Saparmurat Niyazov said the construction of the first plant of the national non-ferrous metallurgy is planed in Mary province which has all necessary conditions and resources for that.

In an interview with the TDH, the Minister of Energy and Mineral Resources Minister Mehmet Hilmi Guler highly rated the meeting and said it was held in the friendly and trustworthy atmosphere which is inherent in relations between two countries.

Turkish Ambassador to Turkmenistan Hakky Akil also attended the meeting.

Alumina plant study could take two years

Stabroek News, Guyana Saturday, January 21st 2006

Although a feasibility study has commenced, it could take as long as two years to determine the viability of constructing an alumina plant in Guyana, says officials from the Russian Aluminum Company (RUSAL).

President Bharrat Jagdeo yesterday met with the RUSAL representatives at State House to discuss implications of the recent agreement signed by the two parties for the expansion of the bauxite sector.

A press release from the Government Information Agency (GINA) said last night that present at the meeting were Chairman of the RUSAL Board of Directors Oleg Deripaska, Director of RUSAL Alumina Division Andrey Raykov, Director of the Bauxite Company of Guyana Inc (BCGI) Roman Bolgarin, BGCI General Manager Alexy Gordymov and Chairman of the Guyana Geology and Mines Commission's (GGMC) Board of Directors Ron Webster.

The meeting addressed the reserve capacity of the existing bauxite mine and the feasibility of establishing an alumina plant at the Aroaima Mining Company (AMC), Mapletown.

GINA said that the meeting also addressed the possibility of commencing prospecting activities in other surrounding communities. Webster said that there are additional implications of the agreement which go beyond increased production and employment.

The transfer of advanced technology and the strengthening of relations between Guyana and Russia are among the other benefits of the agreement, GINA reported Webster as saying.

The company had been given a management contract for the AMC in December 2004 and production recommenced in 2005. An additional contract was signed with Cambior leading to the establishment of Omai Bauxite Incorporated, which manages the Linden operation. Production of bauxite in Guyana is said to have increased tremendously and Guyana is now in a favourable position with bauxite production and is slated to benefit from a possible price increase.

BALCO completing Rs 40 billion expansion project

Newindpress, India - Sunday January 22 2006 00:00 IST

RAIPUR: Bharat Aluminium Company Ltd. (BALCO) will complete a Rs 40 billion (over $900 million) expansion project at Korba city in Chhattisgarh by April end, a company official said.

This will raise its annual production to 370,000 tonnes per annum from the current 100,000 tonnes per annum.

"The work of commissioning of 288 smelter pots with latest Chinese technology, besides a 540-MW coal-fired captive power plant, is in the last leg. We expect the total commissioning by April this year," BALCO's chief of communications Deepak Pachpore told IANS.

The Indian government sold 51 percent equity of the profit-making public sector company BALCO to the Sterlite group in 2001 at Rs.5.51 billion.

The Sterlite group is part of Vedanta Resources, a Britain-based metals and mining major with operations in aluminium, copper and zinc in Britain, India, Zambia and Australia.

"Nearly 80 percent commissioning work has been completed and the remaining 20 percent is to be completed by April end," Pachpore said.

Top company sources said BALCO, which operates 639 hectares of the bauxite raw material belt on lease at Mainpat in Surguja district, 175 km from the plant, has been opening up new bauxite mines at Kawardha district for Chhattisgarh for its increased requirement.

Vedanta Resources Plc is investing $2.1 billion for setting up a 500,000-tonne-per- annum aluminium plant and 1,215-MW thermal plant by 2009 at Jharsuguda in mineral-rich Orissa state.

Metals Chief: Metals Merger Would Benefit Aviation

The Moscow Times, Russia Tuesday, January 24, 2006. Issue 3337. Page 7.

By Yuriy Humber, Staff Writer

The state needs to merge three of the country's key metal makers into one holding that would work as a joint venture with a foreign partner if Russia is to regain strength in the aviation industry, VSMPO-Avisma board chairman Vyacheslav Bresht said Monday.

Norilsk Nickel, steelmaker Mechel and titanium maker VSMPO-Avisma would fit together in a holding because they all produce alloys used in aviation, Bresht told RosBusinessConsulting.

The holding would, however, need to attract a foreign aviation giant, such as Boeing or Airbus, as a partner to design new competitive airplane models, he said.

In negotiating such a deal, the size of the merged metals holding would give the government more clout in negotiating a deal with a major foreign partner, he said.

Bresht's comments come days after newspapers reported that VSMPO-Avisma could be an acquisition target for state-owned arms dealer Rosoboronexport.

Last week, Rosoboronexport released a statement outlining a plan to forge a metals business based on newly formed holding company AT-Spetstekhnologia.

Both Bresht and Vladislav Tetyukhin, who each own 30 percent of VSMPO-Avisma, denied that Rosoboronexport had made an offer to buy their share in the titanium plant.

However, Bresht said Friday that he would be willing to sell his share if the state deemed it necessary, Interfax reported.

VSMPO-Avisma supplies 30 percent of Boeing's titanium needs and 65 percent of Airbus'.

Analysts on Monday were baffled by Bresht's comments.

"Neither Norilsk Nickel nor Mechel makes the kind of alloys that are deployed in aviation or the defense sector," said Slava Smolyaninov, a metals analyst with UralSib. "It would make much more sense to bring aluminum makers onboard for such a holding."

AVAS notified of Alro privatization irregularities

Tuesday, January 24, 2006

Mihai Istrate

The Government's Control Authority (ACG) notified the Authority for Recovery of State Assets (AVAS) about possible irregularities in the fulfillment of post-privatization obligations by Marco International, according to ACG head Cristian David.

The notification claims the taker of Alro Slatina did not completely fulfill its obligation of carrying out a portfolio investment worth 16.6 million dollars by the acquisition of shares in an aluminum producing company. The obligation should have been accomplished by June 30, 2003.

Alro acquired the majority stock of Alprom for 4.2 million dollars and invested in development and improvement of environmental standards over 10.4 million dollars.

ACG claims the 10.4 million dollars investment cannot be considered to be a portfolio investment because it did not result in the acquisition of shares.

The situation in which environment and development investments in Alprom would end up being accepted as portfolio investments would be unfair because with a single investment objective the owner of Alro will have fulfilled two different obligations, claim ACG representatives.

The government body demanded AVAS to give a solution in the interest of the Romanian state.

Marco International has controlled Alro Slatina since 2002 when it bought another ten percent stake in the company from AVAS, totaling to over 50 percent. In August 2005 Marco International came to control 85.26 percent of Alro through several capital increases.

AVAS, still a minority shareholder of Alro, sued the investor demanding the cancellation of the capital increase, claiming the operation impaired its interests.

Alprom was acquired at the end of 2002 by a consortium made of Marco Acquisitions Ltd., Marco International Inc. and ConefBucuresti.

Kaiser Aluminum Announces Resignation of Chief Financial Officer; Company

Business Wire (press release), CA January 24, 2006 07:03

Creates Newly-Formed ''Office of the CFO''

FOOTHILL RANCH, Calif.--(BUSINESS WIRE)--Jan. 24, 2006--Kaiser Aluminum today announced that Kerry A. Shiba has resigned as chief financial officer.

The company also announced the creation of the "Office of the CFO," which will handle Mr. Shiba's duties until a successor is determined. The "Office of the CFO" will consist of President and CEO Jack A. Hockema, Vice President and Controller Daniel D. Maddox and Vice President and Treasurer Daniel J. Rinkenberger.

Mr. Shiba's decision to resign is based on a personal relationship with another employee which the company determined to be inappropriate. The resignation is in no way related to the company's internal controls, financial statements, financial performance or financial condition.

"Kerry Shiba is a talented financial executive who made a significant contribution in the company's restructuring efforts," said Hockema. "However, we are fortunate to have a strong and experienced management team that stepped in immediately. We remain well positioned to complete the company's restructuring and lead it into the future."

Mr. Maddox joined the company in 1996 and, since 1998, has been the Corporate Controller and Principal Accounting Officer. Before joining Kaiser Aluminum, he was with Arthur Andersen LLP for 14 years.

Mr. Rinkenberger joined the company in 1991, became Assistant Treasurer in 1995, and was elected to the position of Vice President and Treasurer effective January 2005. Between 1997 and 2002, he served in the fabricated products business unit in various financial and business planning functions. From 2002 to 2005, Mr. Rinkenberger served as the company's Vice President - Economic Analysis and Planning.

Chinese electrolytic aluminum companies beleagued by overcapacity

People's Daily Online, China January 25, 2006

Electrolytic aluminum firms in China have been in an impasse due to overcapacity, along with high alumina price and lower electrolytic aluminum price, said the National Development and Reform Commission (NDRC) Tuesday.

Statistics from NDRC show that China's 86 cited electrolytic aluminum firms witnessed a 61-percent drop in profit during the first 11 months of last year, among which 56 firms suffered a total loss of one billion yuan (123.5 million U.S. dollars).

China's overall production capacity of electrolytic aluminum now stands at 10.3 million tons, with a surplus of 2.6 million tons, said an official with the NDRC on a press briefing held here.

He said the problem of overcapacity has become eminent in recent years with added production from newly-completed projects in such sectors as steel, electrolytic aluminum, ferroalloy, coke, calcium carbide, and copper smelting.

The steel price, for example, had kept dropping since the second quarter of last year, which was ascribed to a surplus of production capacity over the demand, he added.

He warned that the potential problem of overcapacity also exist in sectors such as cement, electric power, coal, and textile, .

The Commission has pledged to go on stepping up the industrial restructuring and curbing the expansion of production capacities in some sectors this year.

It urged the removal of of those makers with outdated facilities, and called for merging and retooling of the enterprises to upgrade the industry through the concentration and improvement of their competitiveness.

Source: Xinhua

Alro responds to privatization irregularity claims

Bucharest Daily News, Romania 2006_01_24

Mihai Istrate

Alro Slatina increased its participation to Alum Tulcea to 92.75 percent through the acquisition of a 67 percent stake for which nine million euros were paid, say the company's representatives in a press release. The operation was part of the vertical integration strategy in which Alro invested 27 million dollars so far, according to Alro vice president Marian Nastase.

The statement is a response to the claims of the Government's Control Authority (ACG) that the company had not respected its contractual obligations resulting from the privatization of the aluminum producer Alprom. ACG notified the Authority for the Recovery of State Assets (AVAS) about the possible irregularity and demanded a resolution to the profit of the Romanian state, on Monday.

According to the Alprom privatization contract, the investor had to make a portfolio investment worth 16.6 million dollars by the acquisition of shares in an aluminum producing company by June 30, 2003.

The government authority claimed that Alro's 10.4 million dollars investment in development and the improvement of the environmental standards of Alprom (which it acquired for 4.2 million dollars) could not be considered to be a portfolio investment because it did not resulted in the acquisition of shares.

Chinese alumina output to grow by 2-mil mt in 2006: Macquarie

Source: Platts Metals Place, UK 2006_01_24

Chinese alumina production is forecast to grow by 2-mil mt in 2006, and by well over 3-mil mt in 2007, said Macquarie Bank's division director of commodities and mining research, Adam Rowley. Speaking at Platts' annual Aluminium Symposium in Miami Monday Rowley suggested that alumina output from

China would rise to over 10-mil mt in 2006 and improve to almost 14-mil mt in 2007. While Chalco would remain the major producer of the raw material, new non-Chalco producers would account for 40% of this growth in output, he explained. Rowley estimated that there are 10 greenfield alumina refineries that are expected to start up in the 2005-2007 period. Rowley said that China's alumina imports were expected to peak this year at 7.2-mil mt. "As aluminium production growth slows and alumina production accelerates, we expect Chinese alumina imports to start to fall – but not until 2007," said Rowley, adding that alumina imports would fall back to 4.9-mil mt in 2007.

"The Chinese market does respond to economics," Rowley said, adding that the growth in alumina was in response to such high spot prices and that the focus of investment was shifting to alumina. Alumina prices are still high – at around $1,500/mt of aluminium produced – and these high spot prices for alumina have squeezed smelter margins even though aluminium prices have risen, he said. Rowley said that the really small smelters producing around 10,000mt of aluminium were fast disappearing and China was starting to see the development of larger smelters producing over 100,000mt/year and even 200,000mt/year. In 2004, Rowley said that he could identify 126 smelters operating in China with an average output of 53,000mt per smelter. By contrast, there were 111 smelters operating in the rest of the world with an average production of 209,000mt per smelter.

Chinese smelters need break-even export price of $2,061/mt

The removal of VAT rebates on aluminium exports, and now a 5% export tax have cut the attractiveness of exporting versus selling into the domestic market, he said. Chinese aluminium smelters now need high prices to justify exporting as the elimination of tolling has changed the economics of exporting aluminium from China. Rowley said that smelters will have to pay VAT and duty on imported alumina, which would add over $150/mt to the alumina prices and $300/mt to the alumina cost per tonne of aluminium, as well as the 5% export tax. Rowley estimated that Chinese producers would need a break-even export price of between $2,061-2,715/mt after the 5% export tax to continue exporting. "Some estimates say 80% of the Chinese aluminium industry was losing money in the second half of 2005," Rowley added.

Aluminium production growth in China is forecast to slow to 8.3% in 2006 with output rising to 8.5-mil mt, up from 7.85-mil mt in 2005. In 2007, production growth is estimated to fall back to 5.9% with some 9-mil mt produced. "Over the longer term, we do not see China as a natural supplier of aluminium to the rest of the world," said Rowley, who predicted that China would become a net importer of some 340,000mt by 2008.

Ministers look to extend life of plant

ic Wales, United Kingdom Jan 24 2006

Ministers are investigating the possibility of extending the life of Wales's only nuclear power plant beyond its planned decommissioning date.

Wylfa power station on the island of Anglesey, north Wales, is due to close in 2010.

But the Welsh Assembly's Economic Development Minister today said he had asked the DTI whether Wylfa could be kept in use because it supplies a huge aluminium smelting plant on the island.

Andrew Davies said there is not enough time to build an alternative energy source, such as a gas-powered station, before 2010.

He said he had approached the UK Government with Anglesey Aluminium Metal (AAM) about Wylfa, despite saying he does not think any new nuclear power stations should be built in Wales.

SUAL Group production continues stable growth.

Analytical Information Agency, Russia 24/01/2006

SUAL Group, one of world's top ten aluminium producers, has summarized its production results for 2005. In 2005 the Group's enterprises mined 5.41 million tones of bauxite, an increase of 7.8% from 2004.

SUAL Group produced 2.29 million tones of alumina, a year-on-year increase of 10.6%. The acquisition of the Zaporozhye Aluminium Combine compensated for a temporary decrease in production at the Pikalevo Alumina Plant resulting from the transitioning from nepheline concentrate to bauxite processing.

For the first time in the company's history, production of primary aluminium exceeded the 1 million ton mark. The 2005 figure of 1.05 million tones was an increase of 13.4% on the year.

The output of cable decreased by 1.3% in 2005, though revenues thanks to higher value-added production.

SUAL Group is a vertically integrated business and is among the ten largest aluminium producers in the world. SUAL comprises enterprises involved in bauxite mining, alumina refining, production of silicon, aluminium semi-finished and finished aluminium products.

"AK&M", 24/01/2006 12:52

New smelter plant...diversification in the energy sector

Trinidad & Tobago Express, Trinidad and Tobago Thursday, January 26th 2006

-Anna Ramdass

The Energy sector has a vision of diversification and, in order to make that a reality, an integrated downstream project is in the works.

David Small, the director of policy performance in the Energy Ministry disclosed yesterday that the Ministry has signed a technical agreement for the establishment of an aluminum smelter plant at Union Estate that will focus on the integration of downstream products.

Small revealed this at a Joint Select Committee meeting appointed to inquire into and report on Government Ministries.

Senator Mary King chaired the meeting at the Red House at which there were numerous representatives from the Energy Ministry.

Small said this technical agreement was the first step in the Alutrind Project that was signed three weeks ago.

He said an investment decision is expected to be made by the middle of this year and construction of the plant is anticipated to start in mid 2008.

"If we can get this project going..we can move Trinidad and Tobago to achieve 2020 vision," said Small.

He said the technical agreement is a sign of commitment, but there are still final arrangements that are to be made.

The Alutrind project smelter plant will be constructed at the Union Estate smelter facility. However, Small explained that the aluminum produced from that plant will be transported to the Tamana Industrial Park in Arima.

He said the downstream industries do not necessarily need to be located close to the Smelter plants.

Oswald Adams, director, downstream and retail marketing division, also disclosed that there are many projects lined up to diversify the energy sector.

He said discussions are ongoing with respect to the establishment of an ethylene plant as well as the production of metals and plastics.

"We have a well-rounded energy sector," said Permanent Secretary Leroy Mayers.

Alucasa to invest US$3.4mn to increase output - Venezuela

BNamericas, Chile Wednesday, January 25, 2006 18:05 (GMT -0400)

Venezuelan aluminum company Alucasa, a subsidiary of state heavy industry holding company CVG, will invest US$3.4mn in technological customization works this year to increase output.

"In 2005, the company produced 15,800t and with this year's investments we expect to increase output by about 25% in order to reach 18,500t/y," company executive Cesar Romero told BNamericas.

Alucasa's total output capacity, including production of rolled products and low-thickness aluminum foil, is 24,000t/y.

EXPORTS

Romero also said that Alucasa aims to reduce exports this year from 60% to 40% of its total output as part of the government's plan to boost local industry.

The company exports its products to Brazil, Ecuador, Spain and Mexico.

Located in the city of Guacara in Carabobo state, Alucasa is Venezuela's only aluminum processing company. It manufactures rolled products and low-thickness aluminum foil for mass and industrial consumption.

By Harvey Beltrán, BNamericas.com

Aluworks Happy With VALCO Reopening

Daily Graphic, Ghana (1/25/2006)

ALUWORKS Limited, producers of aluminium sheets and coils, says it is happy at the reopening of VALCO, the main supplier of aluminium to the company, as it will impact positively on its operations.

In an interview, the Managing Director of the company, Mr K. Venkataramana, explained that inventory, energy and transport cost would be reduced considerably as a result of the re-opening of VALCO.

Mr Venkataramana said "VALCO since its re-opening has been satisfying our demands and we are enjoying the benefits of the re-opening".

VALCO, three years ago, closed down its operations in the country, when its original owners, Kaiser, abandoned the project.

This affected the operations of Aluworks and other downstream aluminium processing companies which depended on the VALCO smelter. The closure of VALCO forced them to import aluminium ingots from South Africa at huge cost.

Mr Venkataramana said while the company was inspired by the re-opening of the smelter, the challenge now was how to deal with the soaring prices of aluminium ingots on the world market.

The government and Alcoa of the United States of America signed an agreement that led to the re-opening of VALCO in September last year.

"This has increased confidence in our people and the shareholders", Mr Venkataramana said, but was quick to add that the excitement was being dampened by the soaring prices of aluminium.

Over the past few months prices of aluminium on the world market has risen from $1,400 to $2,400 per tonne, a situation he described as a cause for concern.

Aluworks is also the major supplier of aluminium sheets and coils as raw materials to over 125 local tertiary industries and has a plant capacity of 30, 000 tonnes per annum.

Since December last year, the share price of Aluworks has moved up steadily from 5,000 per share to ¢5,510 per share, indicating investor confidence in the company.

The managing director indicated that the company would focus on its core competencies such as producing colour coating roofing sheets for both the local and West Africa regional markets and would introduce value-added aluminium foil in future.

The company intends to invest about $10 million in the colour coated line which is expected to be operational in next 15 months.

The company exports 45 per cent of its products to neighbouring countries especially, Nigeria, Burkina Faso, Togo and Cote d’ Ivoire.

"We intend to increase our exports by 50 per cent within the ECOWAS sub-region" Mr Venkataramana stated.

Story by Boahene Asamoah.

Kirgizia to repay Russian debt with enterprises

ITAR-TASS, Russia 27.01.2006, 06.33

MOSCOW, January 27 (Itar-Tass) -- Kirgiz President Kurmanbek Bakiyev said his country was ready to repay debts to Russia with industrial enterprises and production facilities.

"Yet in March 2002, when I was the prime minister of Kirgizia, I sent to the Russian government a list of enterprises, which we offered to the Russian side for resolving the problem of the foreign debt. Now we are returning to the issue," Bakiyev said in an interview published by the Rossiyskaya Gazeta on Friday.

The president recalled that several major enterprises are already under joint control with the Russian business. In a couple of months the bilateral Kirgiz-Russian intergovernmental commission will meet "to dot all the "i" in the debt repayment issue". "I will personally demand that," the president said.

Bakiyev said his country will decide in the near future on the project of constructing a cascade of hydropower plans and an aluminum plant with Russian investments. He said the Rusal aluminum company plans to build in Kirgizia a major aluminum plant that will create hundreds of jobs. To provide it with electricity the Unified Energy Systems (UES) of Russia electric monopoly plans to construct two Kambaratin hydropower plants on the Naryn River.

"Let the Russian business actively invest in Kirgizia. As the head of state I want to say that the Kirgiz Republic and the Russian Federation absolutely have no misunderstandings in each of the mentioned cooperation spheres. We are united in approaches and methods of implementing our strategic cooperation," Bakiyev said.

National Aluminium Plans To Set Up Refinery

TMCnet January 26, 2006

(Comtex Finance Via Thomson Dialog NewsEdge)NEW DELHI, Jan 26, 2006 (Dow Jones Commodities News via Comtex) --India's National Aluminium Co. Ltd. (532234.BY), or NALCO, plans to set up a refinery to produce aluminum in the southern Indian state of Andhra Pradesh, reports the Economic Times, without citing any sources.

State-run, NALCO is also considering increasing bauxite mining in the state. The investment for mining and setting up the refinery would be around INR50 billion, according to the report.

The federal government has suggested that the mining lease can in NALCO's name or be given to a joint venture between NALCO and Andhra Pradesh Mineral Development Corporation, the report said.

Newspaper Web Site: http://www.economictimes.com

-By New Delhi Bureau, Dow Jones Newswires; 91-11-2307 4020; djn.india@dowjones.com

-Edited by Costas Paris

(END) Dow Jones Newswires

US aluminium casting may need to double capacity by 2015: Thayer

Source: Platts, Metals Place, UK 2006_01_26

Market sentiment that the aluminium casting industry in the United States would need to double capacity within ten years to cope with demand has been dubbed "plausible" by a North American casting and foundry industry player.

Speaking at the annual Platts Aluminium Symposium in Miami Lakes, Florida, president and CEO of Breyer Casting Technologies Graham Thayer said although the current situation for the casting and foundry industry was "not a rosy picture for those in North America," it was possible that with the expected growth in demand for aluminium castings in the auto sector over the next ten years, combined with the current rate of attrition in the foundry industry, that the remaining aluminium casting operations would need to double capacity.

Thayer said after examining the capacity forecast myth he said he believed significant capacity additions would be required to cover growth and supplier attrition. But, he added, that the US aluminium casting industry was not sustainable under current conditions.

"Existing supply is not profitable, there is no incentive for capacity expansion," he said, noting that pricing pressures were draining capital from the industry, there is too much dependence on domestic auto companies and expected continued attrition would continue to drain the industry. He said there was also more investment needed in technology and capacity. Thayer said imports continued to increase stress on the domestic supply chain. "If there is a modest improvement in demand it will strain the current supply base and, if left unchecked, significant or permanent loss of domestic capacity or capabilities will occur," he said.

In an industry overview for castings produced in the US during 2005, Thayer said aluminium and magnesium were identified as the growth opportunity areas in the market-largely dominated by ferrous metals like gray iron and ductile iron. According to the American Foundry Society, the He also noted that according to American Foundry Scoiety, the US aluminium casting industry's shipments were 14.5-mil st in 2005. He also noted that, according to AFS figures, aluminium had a 33% slice of the $32.9-bil US casting sales pie during 2005. He noted that aluminium captured this share as a result of its value. Thayer said the US foundry market was expected to see a "fairly modest" 1.6% annual growth rate between 2005 and 2015. He also noted that foundries had a declining attrition rate of 2.2%/year. Thayer noted that AFS figures indicated that in 2004 58% of US aluminium shipments were diecast, while 26% were permanent mould and 16% were sand. He said by 2015, the split was expected to be 54%, 26% and 20% respectively.

Thayer said CSM Worldwide forecast that North America's compound annual growth rate to 2011 in the auto build industry was 0.9% – "so not a rosy picture for those in North America."

He noted that aluminium casting growth factors in the automotive markets were sustained high fuel costs, consumer demand for fuel-efficient or alternative fuel vehicles and new casting technologies. Thayer said there were several new casting technologies in place and aluminium casting use was forecast to grow to 280 lb/vehicle in 2015, from 245 lb/vehicle in 2005.

Thayer said in investigating the capacity increase "myth" he determined that by 2015 the US supply-demand relationship would reflect, at an 85% effective capacity utilization of 2.5-mil st, that an estimated 7.8% capacity addition would be required. He added that when the attrition rate was factored in required capacity addition was suggested at 34.7%. He then went on to say that if additional automotive castings were brought in to the supply-demand relationship at a 2.6% compound growth rate-the required capacity addition would be raised up to 48.7% by 2015. He then concluded that the myth was plausible and the industry could require double capacity in ten years time.

Corica to boost investment in Pavlodar smelter project

TMCnet January 27, 2006

(Interfax News Agency Via Thomson Dialog NewsEdge)PAVLODAR. Jan 26 (Interfax) - Kazakhstan Electrolysis Plant, a company owned by Switzerland's Corica AG, plans to spend $197 million on the construction of an aluminum smelter in Pavlodar, Kazakhstan, in 2006, compared with $112 million in 2005, the company's press office told Interfax.

This year, the main investment targets will be the construction of power transmission lines, a casthouse, warehouses and other facilities. The first equipment should be installed for the future pot-lines in March, and the installation of purpose-built gas scrubbers made by Norway's Alstom should begin in the second quarter.

Corica AG pledged at a 2003 tender to build the smelter in return for 31.76% of Aluminum of Kazakhstan, which controls Kazakhstan's alumina industry. The Swiss company must have 60,000 tpy of capacity in place in December 2007 and is due to build the whole 125,000 tpy first stage by September 2008.

The second stage, capacity 125,000 tpy of aluminum and 136,000 tpy of pre-baked anodes, should be introduced between 2010 and 2012.

The smelter's total capacity will be 250,000 tonnes of aluminum per year.

The whole smelter will cost $850 million to build.

Aluminium production to triple?

IcelandReview, Iceland - 01/27/2006 | 15:19

Iceland's aluminum production capabilities will triple in the next few years making Iceland one of the world's largest aluminum manufacturers in the world, reports Morgunbladid. In his keynote speech, at the conference "Orkulindin Ísland" underway today at Hotel Nordica, Thórdur Fridjónsson, the director of the Icelandic Stock Exchange, said that it was indisputable that operations currently underway had had a positive effect on economic growth.

Today, Iceland produces about 270,000 tons of aluminum per year but in 2008 that figure will increase to 800,000 and could reach 1,500,000 if projects currently under consideration will be approved said Thórdur. According to Thórdur if the Straumsvík Aluminum smelter is enlarged and ideas on new aluminum smelters in the South and North of Iceland come to fruition, Iceland's aluminum production capabilities will increase even more.

Thórdur said it was clear that the impact of heavy industry on Iceland's economy today is different from that in preceding decades and mentioned the increased participation of foreign labor as an example.

Private Sector to Play Key Role in Saudi Aluminum Industry

Middle East North Africa Financial Network, Jordan - Arab News - 30/01/2006

JEDDAH, 30 January 2006 — The future of the aluminum industry in Saudi Arabia looks bright because the Saudi government will increase the Kingdom's aluminum production. The government is considering involving the Saudi private sector in downstream aluminum industries.

"We believe that the development of an aluminum industry in Saudi Arabia will be significantly beneficial, not only for our country but for the Gulf region as a whole," said Dr. Abdallah E. Dabbagh, president and chief executive officer of Saudi Arabian Mining Company (Maaden).

State-owned Maaden obtained an official license in May 2001 to explore and investigate the Az-Zabirah site for deposits of bauxite which is the main source of aluminum. The study of the site showed that Maaden could build a refinery with an annual capacity not less than 1.4 million tons of alumina to be smelted into aluminum.

Industrial Development

The aluminum industry will contribute to the development of secondary industries in the Kingdom. When aluminum is available in molten form at a smelter, it can be economically used for the production of other products.

Typical aluminum products that are possible to produce are: foil, coils of aluminum sheet, extrusions for the manufacture of frames and wires for the manufacture of cables.

Maaden will also possibly be in a good position to produce magnesium on the same site, which will permit the manufacture of high-grade alloys.

In addition to the above downstream uses, existing industrial and national companies, such as Saudi Basic Industries Corporation (SABIC) and Saudi Aramco, will benefit from the project. Typically, SABIC will have a market to sell large quantities of caustic soda and other chemicals used in the aluminum production process. Aramco will also be able to sell natural gas, petroleum coke and soft pitch to Maaden for use in the production of aluminum.

Cash Generation

The aluminum business is a massive cash generator. The Kingdom is in a fortunate position when it comes to producing aluminum since the major elements of aluminum production costs are local. Only expatriate labor and spare parts, both representing less than 20 percent of the operating costs, need to be imported. Regardless of the imported costs, with Maaden's projected long-term sales of almost SR4 billion ($1.06 billion) per annum, the effects on the local economy will indeed be substantial.

Employment Creation

The aluminum business is a major employment creator, which is why governments in the Gulf often support it. "As can be seen, the major employment effect results from the refining and smelting activities," Dabbagh said.

"It is for this reason that we decided to achieve benefits as soon as possible by starting the project using imported bauxite. We are presently working on a macroeconomic study, which will advise us as about the additional effects on the Kingdom's economy," he added

Maaden estimates indicate that ultimately 4,000 direct employment and 9,000 indirect employment posts will be created as a result of the expansion of the aluminum industry.

According to Maaden, the benefits to flow from the Az-Zabirah Aluminum Project will provide (a) direct and indirect employment opportunities for Saudi citizens; (b) stimulate related downstream industries (over SR2.8 billion per year); and, (c) increase the Kingdom's gross domestic product (SR115 billion over 25 years) and improve its balance of payments (average SR2 billion per year). These benefits are consistent with the government's 6th and 7th development plans for the rapid growth of non-oil sectors of the Saudi economy.

According to Dabbagh, "Saudi Arabia will put in place the first totally integrated aluminum production facility in the region, and the Gulf will be among the largest regional producers of aluminum by the year 2020."

"We have a vision of the Gulf region becoming the largest aluminum producing region in the world," he added. Market conditions and the increasing global demand for aluminum are the stimuli that make many Gulf countries, in addition to the Kingdom, interested in expanding their aluminum industries.

The regional metal industry began in the 1970s with the production of primary aluminum, taking advantage of the abundant reserves of energy in the region. Today, regional smelters produce approximately 1.5 million tons of primary aluminum per year of which less than 40 percent is processed by regional downstream industries. This is about six percent of the total world aluminum production but with further expansion of existing production capacities and large new smelters, the total regional output for the Gulf will exceed 10 percent of total global output.

According to Dabbagh, the government will own less than 50 percent in Maaden by 2010 and in 2020 Maaden in its present form and structure will cease to exist leaving the mining sector in the hands of the private sector.

Lib-Dems call for nuclear-free Wales

ic Wales, United Kingdom Jan 30 2006

Wales should be nuclear-free by 2010, the Liberal Democrats said today.

The Lib Dems are the only one of the Assembly’s four main parties opposed to extending the life of Wales’s only nuclear power plant beyond its planned decommissioning date.

The Government is investigating the possibility of keeping the Wylfa station on Anglesey beyond 2010 because it powers an aluminium smelting plant which employs about 600 people on the north Wales island.

Lib Dem MP Jenny Willott and AM Mick Bates today supported a Friends of the Earth petition to rid Wales of nuclear power.

Ms Willott said: "We are opposed to an extension of Wylfa."

Full article:

http://icwales.icnetwork.co.uk/0100news/0200wales/tm_objectid16645576&methodfull&siteid50082&headlinelib-dems-call-for-nuclear-free-wales-name_page.html

Corica to boost investment in Pavlodar aluminium smelter project

Source: Interfax Metals Place, UK Jan 30, 2006

Kazakhstan Electrolysis Plant, a company owned by Switzerland's Corica AG, plans to spend $197 million on the construction of an aluminium smelter in Pavlodar, Kazakhstan, in 2006, compared with $112 million in 2005, the company's press office told Interfax.

This year, the main investment targets will be the construction of power transmission lines, a casthouse, warehouses and other facilities. The first equipment should be installed for the future pot-lines in March, and the installation of purpose-built gas scrubbers made by Norway's Alstom should begin in the second quarter.

Corica AG pledged at a 2003 tender to build the smelter in return for 31.76% of Aluminium of Kazakhstan, which controls Kazakhstan's alumina industry. The Swiss company must have 60,000 tpy of capacity in place in December 2007 and is due to build the whole 125,000 tpy first stage by September 2008.

The second stage, capacity 125,000 tpy of aluminium and 136,000 tpy of pre-baked anodes, should be introduced between 2010 and 2012.

The smelter's total capacity will be 250,000 tonnes of aluminium per year.

The whole smelter will cost $850 million to build.

"Aluminium doing the disconnect thing…again"

Metals Insider - 30 January 2006

MI WEEK IN REVIEW : Regular commentators on the aluminium market such as ourselves long know this market's habit of disconnecting from reality over the short term with prices moving in general step with underlying fundamentals but often opening up a gap between what appears to be happening and what the price implies should be happening.

This is one of those periods with LME prices ramping ever higher in the face of rising stocks and only so-so physical markets.

Bull Drivers

The bull drivers of this market were laid open for discussion at the Platts Metals Week conference last week with analysts queuing up to tell us why aluminium prices are justified in moving higher.

Very little that was said was in any way controversial and most of the main points have been covered in this column in recent weeks.

Rising energy prices will create a cost-push impact on metal prices, particularly since aluminium among all the LME metals is most acutely sensitive to the cost of power. A rise in the whole cost curve structure of the market will cause rolling closures among the higher-cost plants, particularly those in Europe which often lack the efficiencies of scale of newer producers in the developing world.

As the item about Alcan below indicates, this process is already well and truly underway with the Canadian giant taking after-tax charges against the closure of two of the legacy plants it inherited with its takeover of French producer Pechiney—the Lannemezan smelter in France and Steg in Switzerland. Combined capacity is 94,000t, which pretty much says it all about efficiencies of scale here.

The dynamics of the Chinese market are moving in the right direction with primary production growth slowing last year and exports showing signs of declining—albeit the last report for December does not give us any insight into how local producers have reacted to the most recent run-up in prices. One day the giant Chinese market will turn net importer, even if the long-heralded turnaround has been postponed several times already.

Compounding rising power costs—and China is no exception to this global rule—is the current high price and constrained supply of alumina. Small outages such as that reported last week by Alcoa at its Point Comfort refinery in Texas take on added significance when the spot alumina price is hovering at historic highs, both in outright terms and in terms of contract ratios to LME metal prices.

On the demand side, analysts have penciled in a good year for the light metal on the basis of renewed acceleration in Western World industrial production and continued strong growth in the developing world—China, but also countries such as India.

To the long list of reasons to be bullish we would add the current inflow of investment money in the aluminium market, the LME markets and the commodity markets in general. Purists out there don't like this one so much but in our view the flow of pension fund money, as opposed to existing hedge fund and CTA cash, is a new phenomenon in the LME markets.

Rising Stocks…Who Cares?

All of which helps explain why LME 3-month metal spent much of last week toying with next big resistance at $2,500 and why the producer selling that might be expected to cap it was largely conspicuous by its absence.

The light metal punched through there on Friday for a new cycle high up around $2,520 even though it retraced in a volatile day's trading to $2,486 at the kerb close. It was still a weekly gain of $107.50, or 4.5%, and some market players are already looking higher, and in some cases a lot higher, judging by the bull strategies being put on in the options market.

The temporary disconnect we refer to above comes in the form of rising visible inventories. The steady inflow of metal to the LME system so far this month has left the headline figure at its highest level since Dec 2004.

There has been a strand of thinking that this was a seasonal anomaly, reflecting a displacement of off-market stocks—particularly those held by producers—towards the exchange. We'll be looking at the IAI December producer figures in more detail tomorrow but our initial snap reading of them is that the expected drawdown in inventories didn't materialize.

The more powerful argument pushed by the many bulls in the market is that it doesn't matter much whether visible inventories are rising since the expected market deficit this year—figures in a 400,000-500,000t range were cited at the Platts conference—will sooner or later feed through to the world of visible inventory.

This may well be true, but even allowing for the fact that 3-month prices are exactly that—prices for delivery in three months' time—they seem to be pricing in some big changes over a relatively short period.

That timing-disconnect is also evident in the nearby market structure, which remains in contango and a wide one at that--$19.50 per tonne at the close of last week.

Rather, we suspect that it is the far forward curve—super-liquid in aluminium by comparison with just about any other LME metal—that is helping pull up the nearby structure. The nearby structure will at some stage catch up and if/when it does we will be in a full-blown physically-defined cash squeeze. It's just we're not there yet and in the interim 3-month prices look to have factored in a lot of good news in a very short space of time.

Weekly Metals Analysis 30th January 2006

Sucden Research

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RusAl EU Ruling

The Moscow Times, Russia Wednesday, February 1, 2006. Issue 3343. Page 6.

BRUSSELS -- Russian Aluminium, or RusAl, will gain easier access to the European Union market after EU regulators said the company no longer posed an unfair-trade threat.

The EU will scrap a requirement for RusAl's SayanAl unit to sell aluminum foil at a minimum price in the 25-nation bloc. The EU will also maintain SayanAl 's exemption from a 14.9 percent duty that the company would have faced had it not made a minimum-price pledge.

The EU imposed the trade restriction for five years in May 2001. (Bloomberg)