AluNews - July 2006

Kaiser stack went ‘kaboom’

"As we drove past the Tacoma tide flats yesterday evening on the way home from Seatac, a familiar object was missing. This mornings Tacoma News Tribune tells the story of the landscape change. There is also a video of the "kaboom". The story and video at the web address:"

Bob & Janet Mohr

Alcoa may be takeover prey

TRIBUNE-REVIEW Tuesday, July 4, 2006

By Rick Stouffer

Industry analysts speculated Monday that aluminum producer Alcoa -- with 2,000 employees in the Pittsburgh area -- could be the next old-line company to be acquired, with mining company giants the most likely buyers.

Three factors are generating the buzz: Wall Street has funds available to put together what some industry watchers say could be a $47 billion offer for Alcoa; several large commodity-related companies are in the market to buy; and they appear to have plenty of cash.

"Other large deals recently have gone down," said Charles Bradford, a metals analyst in New York with Soleil Securities. "Phelps Dodge felt it was vulnerable to a takeover, and it was so it went after Inco and Falconbridge."

Bradford was referring to one of two large deals -- totaling $72 billion -- announced in the last eight days. Steelmakers Arcelor and Mittal Steel are combining, while Phelps Dodge, of Phoenix, is acquiring two Canadian nickel producers, Inco and Falconbridge.

There's no lack of potential buyers for Alcoa, the world's largest aluminum producer.

Among the names being mentioned are two international mining companies, London-based Rio Tinto, and Melbourne, Australia-headquartered BHP Billiton.

Both Rio Tinto and Billiton are heavily involved in the aluminum process, a fact that would not be lost on U.S. regulators should a deal be proposed, analysts said. Rio Tinto spokeswoman Heather Keers and BHP spokesman Tracey Whitehead said their companies do not comment on market speculation or rumor.

"Rumors have been going on for some time. We didn't comment when they first started, and we're not going to comment now," said Alcoa spokesman Kevin Lowery.

"Does a deal between Alcoa and Rio Tinto or BHP make sense? No, it doesn't," said Bradford. "There would be significant issues with the antitrust situation."

However, Bradford didn't say Alcoa was above a potential takeover.

"Anglo-American (based in London) is being talked about as an acquirer," he said. "So is Xstrata (of Zug, Switzerland), although I don't know if it is big enough to acquire Alcoa."

Xstrata spokeswoman Claire Divver said her company had "no comment on speculation of this kind."

Alcoa isn't the only aluminum company considered a target. Bradford said Alcan, the world's second-biggest aluminum producer, is being mentioned, "with the same names associated with Alcoa also associated with Alcan." Alcan is based in Montreal, Canada.

An Alcoa buyout could affect the Pittsburgh area. The company employs 1,250 in two North Shore facilities and 750 at a research center in Upper Burrell, Westmoreland County.

Any drop in personnel would go along with the company's decision earlier this year to formally move its headquarters to New York from Pittsburgh, a decision that didn't mean many jobs lost, but a big loss in prestige.

Alcoa's common shares yesterday rose 74 cents, 2.3 percent, to close at $33.10.

Aleris International, Inc. Announces Organizational Changes Related to the Pending Acquisition of the Corus Aluminum Business

CNW Telbec (Communiqués de presse), Canada July 3, 2006

BEACHWOOD, Ohio, July 3 /CNW/ -- Aleris International, Inc. (NYSE: ARS) announced today several organizational changes related to its planned acquisition of the downstream aluminum businesses of Corus Group plc.

Sean M. Stack, currently Senior Vice President, Treasurer and Corporate Development of Aleris, will become Executive Vice President of Aleris and President-Europe upon completion of the pending Corus Aluminum acquisition.

He will have regional leadership responsibility for all of the European aluminum rolled products and extrusion businesses to be acquired from Corus as well as responsibility for all of Aleris's existing European-based aluminum recycling and specification alloy businesses. Corus Aluminum's Canadian operations will report to John Wasz, Executive Vice President, Aleris and President, Aleris Rolled Products, North America. Mr. Stack joined Aleris in 2004. Previously, Mr. Stack served as Vice President and Treasurer of Commonwealth Aluminum, and was Vice President and Treasurer of Noveon, Inc. prior to that.

Alfred Haszler, currently Managing Director of Corus Aluminum Rolled Products, will become, upon the closing of the pending Corus Aluminum acquisition, Senior Vice President of Aleris and President, Aleris Rolled and Extruded Products-Europe. He will have responsibility for the European rolled products business, as well as the aluminum extrusions business. Werner Graf

will continue to lead the extrusion business as Managing Director, reporting to Mr. Haszler. In his new position, Mr. Haszler will report jointly to Steve Demetriou, Chairman and CEO of Aleris and Sean Stack. Mr. Haszler has served in his current position since 2004, and has worked in various management positions with Corus and the Koblenz plant operations in Germany since 1970.

Gerhard Buddenbaum, Executive Director, Corus Aluminum Division and a member of the Corus Group plc. Executive Committee previously announced his retirement from Corus, effective June 30. He will be retained by Aleris following the acquisition as a senior consulting advisor.

Commenting on the leadership announcements, Mr. Demetriou said, "Alfred Haszler and Sean Stack will bring aggressive and top quality leadership to our expanding European business. Alfred Haszler is well known in the rolled products industry and will lead one of the most capable and technically proficient businesses in our industry. Sean Stack brings financial acumen and strategic vision to our European businesses. Under their leadership, I am confident we will have one of the strongest leadership teams in our industry."

He went on to say, "We look forward to having Gerhard Buddenbaum on our team. He has been a dynamic executive in the aluminum industry throughout his long and distinguished career.

The organizational changes are expected to take effect upon the closing of the pending Corus transaction. The closing of the acquisition is envisaged in the third quarter of 2006.

Aleris International, Inc. is a major North American manufacturer of rolled aluminum products and is a global leader in aluminum recycling and the production of specification alloy. We are also a leading manufacturer of value-added zinc products that include zinc oxide, zinc dust and zinc metal.

Headquartered in Beachwood, Ohio, a suburb of Cleveland, the Company operates 41 production facilities in the U.S., Brazil, Germany, Mexico and Wales, and employs approximately 4000 employees. For more information about the Company, please visit our Web site at .

CVRD ups Valesul stake to 100% - Brazil

BNamericas, Chile Monday, July 3, 2006

Brazilian miner CVRD (NYSE: RIO) has acquired a 45.5% stake in aluminum smelter Valesul from Anglo-Australian group BHP Billiton (NYSE: BHP) for US$27.5mn, CVRD said in a statement.

As a result, CVRD now owns 100% of Valesul, which is in Rio de Janeiro state and has capacity of 95,000t/y of primary aluminum and aluminum alloys in the form of ingots and billets.

"The acquisition of Valesul is aligned with CVRD's strategy for the aluminum business of focusing on organic growth in the upstream of the value chain and strategic partnership in smelters," the miner added.

Valesul reported net revenues of US$58mn in the first quarter of 2006, while Ebitda in the period amounted to US$8mn. Valesul had gross debt equal to zero as of March 31 of this year.

Rio de Janeiro-based CVRD will include Valesul in its financial statements starting the third quarter of this year.

In addition to iron ore - of which it is the world's largest producer - and alumina, CVRD produces manganese, ferroalloys, kaolin, potash and most recently copper.

‘Russian machine’

Daily Sun, Nigeria Tuesday, July 4, 2006 National Index

Eight years ago, Mr Dieter Matron was about the most influential personality in Akwa Ibom State. He was the managing director of the Aluminium Smelter Company of Nigeria (ALSCON), Ikot Abasi – the largest company after Mobil.

Now, that is history: Just as ALSCON almost became history owing to some controversial suspension of work for the past seven years, for reasons best known to its owners, the Federal Government, which was the biggest shareholder, Ferrostaal AG of Germany, which seconded Matron to the company and the American-owned Reynolds, which also provided the general manager in the person of Mr Jim Schweitdkardt.

Today, Matron is almost alone. All the courtiers and hangers-on are no more. Reason: The ownership and management of ALSCON have changed hands. The situation could not have been more saddening than a few days ago when the officials of RUSAL, the Russian company buying over ALSCON, came round to inspect their jumbo catch.

While the boisterous Russians were milling all over the place with so much vim, the hitherto influential Matron stayed with traditional rulers of Ikot Abasi who equally came out to meet the Russians, who were received at the conference room of the company.

I’m relieved:

Sensing Matron’s lonesomeness, this correspondent walked up to him and sought his opinion about the take-over of the company he built from scratch. "I’m relieved now. The decision to shut down the plant was the most painful business decision I have ever taken in my life. Now, I’m relieved, I’ve now retired, though I’m into some consultancy in Europe," he said.

Asked why he attended the take-over ceremony since the company was no longer his responsibility, Matron said ALSCON was still his baby.

Workers’ reaction

Matron might have been even more relieved when the workers employed in his area almost bared their fangs on the BPE iron lady, Mrs Irene Chigbue, who led the Russians (or was it the other way round?) alongside Sen. Udo Udoma to the company. The workers needed their pay, as either salary or severance pay. They appeared to mean it, forcing Chigbue to commit herself. "If by the end of this month you don’t get your money, next time you see me call me a liar." But from the way the workers behaved, which needed the help of Sen. Udoma and the police to calm them, maybe, if they do not get their pay as Chigbue promised, next time they see her, they might do more than call her a liar.

While all that was going on, Matron stood aside incognito.

RUSAL’s statistics

The facts sheet of the new owners of Alscon, as made available to Daily Sun and signed by Vera Kurochkina and Alexy Ivanov, put the company as one of "the world’s top three aluminium producers. The company’s annual turnover was $6.1 bn in 2005. Sixty-five per cent of Rusal’s products are delivered to end users in transportation, construction, packaging, machinery and equipment, electrical and consumer goods industries. The company’s current capacity allows it to produce annually, bauxite – 6.2 million tonnes; alumina – 4.1 million tonnes; primary aluminium and alloys – 2.7 million tonnes; aluminium foils and foils-based packaging - 0.1 million tonnes and, aluminium beverage cans – 3.0 billion cans.

Rusal allocates over $20 million annually to personnel development, over $10 million is distributed among social, charitable and sponsorship programmes each year, the gross dust and gas emission of the company’s plants have been reduced by over 20 per cent over five years."

20,000 jobs

They had, during the reception coordinated by the outgoing Managing Director, Mr Murtala Muhammed, promised that they would employ at least 20,000 workers when the company begins operation by the end of 2006.

Norsk Hydro Plant Decision

The Moscow Times, Russia Wednesday, July 5, 2006. Issue 3446. Page 6.

Norwegian energy company Norsk Hydro said Tuesday that it had not yet made a decision on its potential investment in an aluminum plant in eastern Russia.

Television NRK-text earlier said Norsk Hydro's unit Hydro Aluminum, one of the world's top aluminum producers, planned to invest 6 billion kroner ($963.5 million).

This would be one of Norway's biggest investment in its energy-rich eastern neighbor.

"We are in early talks to evaluate the possibility of such a project with a Russian company … but talks about specific investment sums are premature," said Thomas Knutzen, spokesman for Norsk Hydro's aluminum activities. (Reuters)

Alcan Seeks S. African Smelter Partners, Matona Says (Update1)

July 4, 2006 (Bloomberg)

Alcan Inc., the world's second-largest aluminum producer, is looking for partners to invest in a smelter in South Africa, a government official said.

Alcan, based in Montreal, is considering whether to build the $2.7 billion smelter at Coega port in the southeast of the country. Its decision is contingent on securing a cheap and reliable source of electricity from Eskom Holdings Ltd., South Africa's state-owned power company.

``Part of the work that has to be done is for Alcan to look for partners to come into the project,'' Tshediso Matona, director-general of South Africa's trade and industry department, told a press conference in Pretoria today.

South African Public Enterprises Minister Alec Erwin on May 9 said he expected Alcan to take a final decision on the smelter by the middle of the year.

The negotiations were at an ``exceptionally advanced'' stage and the delay in completing them didn't mean the project may be scrapped, Erwin said today.

Alcan is investigating six or seven different options to expand its production capacity, and will decide by year-end which should go ahead first, Chief Executive Officer Richard Evans said in Beijing on May 18.

To contact the reporter on this story:

Mike Cohen in Cape Town at

Aluminum players want cheap power -- or else

Globe and Mail, Canada 05-Jul-2006


MONTREAL -- In the coming months, dozens of Alcoa's Quebec employees will head to Iceland to teach out-of-work fishermen how to run the aluminum smelter the world's biggest producer of the lately lucrative lightweight metal is building in -- you'll love saying it -- Fjardaal.

Isolated Iceland (population 300,000) has become a new hot spot for aluminum production because the island country has vast untapped electricity potential. It can't export the power for obvious reasons -- the North Atlantic separating it from most of the developed world -- so, aluminum manufacturers are flocking to Iceland to cash in on the cheap, clean and abundant hydro and geothermal electricity it's offering.

In fact, with the 320,000-tonne Fjardaal smelter still a year away from completion, Alcoa is now considering building a second facility in the Nordic country. And Montreal-based Alcan, which already has a 180,000-tonne smelter in Iceland, is negotiating energy contracts in order to more than double its capacity to 460,000 tonnes.

The chefs of Reykjavik better learn how to make poutine, quick, because the influx of aluminum-savvy Quebeckers is going to create a demand for the gooey indulgence, NHL games on satellite and more Celine Dion alongside Bjork on the radio. Indeed, everywhere in the world they're building aluminum smelters or considering it -- China, South Africa, Brazil, Oman, Trinidad, Cameroon -- they should brush up on their Québécois because they'll be counting on experts imported from La Belle Province to get the job done.

Barely a century old, the aluminum industry is still a young one as far as metals go. Quebec has been the centre of its development almost since American scientist Charles Hall and his French counterpart Paul Héroult simultaneously discovered how to extract aluminum from bauxite ore. Hint: Add gargantuan amounts of electricity.

Starting in 1901, Quebec's hydroelectric industry begat its aluminum industry and the two developed synchronously. Despite the massive expansion of aluminum smelters in the developing world in recent years, Quebec still accounts for about 10 per cent of global production, or close to three million tonnes annually. The world's biggest mining engineering firms, from U.S.-based Bechtel to Canada's SNC-Lavalin, have established their global aluminum practices in Montreal. Aluminum consultants and research institutes abound here. The result is that, when Alcan's 40-per-cent-owned Alouette smelter completed a $1.4-billion expansion to 550,000 tonnes last year, it could boast having spent more than 80 per cent of the development costs in Quebec.

Alas, as Alcan and Alcoa weigh expansion plans in Quebec and elsewhere, the two companies have embarked on a tension-filled tango with Premier Jean Charest's government. They're telling Mr. Charest not to count on them as levers of regional development any more without coughing up mega-megawatts of electricity at below-market prices for decades to come; Mr. Charest is telling them not to count on him unless they can prove aluminum smelters should take precedence over currently lucrative export markets for Quebec's surplus power. Who'll call whose bluff first?

Quebec's 10 aluminum smelters consume almost as much electricity as all of its 3.5 million household's combined. Alcan meets 90 per cent of its own electricity needs -- at unbeatable costs -- since its hydroelectric stations were grandfathered when Quebec nationalized the power industry in 1962. But technically, the hydraulic resources are still owned by the province. And Alcan will need to buy up to 500 MW of power from Hydro-Québec if it is to carry through with a $1-billion, 150,000-tonne expansion of its Alma smelter.

Alcoa's Baie-Comeau smelter is faced with closing without a $1.2-billion modernization; it's also put a $1-billion expansion of its Deschambault smelter on hold pending negotiations with Mr. Charest to secure cheap electricity.

Alcoa's smelters are among four in the province that benefit from risk-sharing contracts with Hydro-Québec that guarantee electricity at below the going rate for large manufacturers in Quebec, which stands at 4.1 cents per kilowatt-hour. But those 24-year contracts negotiated by premier Robert Bourassa in the 1980s in exchange for billions in investments come up for renewal starting in 2010.

Quebec's well-oiled aluminum lobby is warning Mr. Charest not to make the mistake electricity boards in Oregon and Washington did a few years back; they allowed power companies to abandon their customers in the aluminum industry in order to cash in on California's electricity shortage. But that shortage proved short-lived, and the high-paying aluminum industry is history in the Pacific Northwest.

Mr. Charest, meanwhile, is heading into an election year. And the economic picture is not pretty. Quebec's other big regional employer, the forest industry, is shrinking faster than Star Jones Reynolds' waistline. The province's manufacturing industry is too. Bombardier's regional jet exports are in decline. And business investment is at its lowest in the province since the 1991 recession.

Aluminum has become to Quebec what the auto industry is to Ontario. You can bet Dalton McGuinty would bend over backward to stop GM from moving to Fjardaal.

New Kitimat Smelter Plan Laid out

Terrace Standard, Canada Jul 05 2006

ALCAN COULD have a new smelter up and running in Kitimat by 2012, says a senior company official.

But that date requires a start this year to clear a complex number of hurdles, the first of which is approval from the company's board of directors, Paul Henning told Terrace and District Chamber of Commerce members June 29.

Henning, who runs the current Kitimat smelter, says the new technology would likely be what's called an AP35+, which can produce 400,000 tons of aluminum per year using the same amount of power the company uses at its current smelter.

That compares to the existing VSS smelter that produces 272,000 tons per year. That smelter uses antiquated technology and is the only such smelter remaining in any of Alcan's operations, said Henning.

He hopes to have the board of directors approval by the end of this year.

"I don't have environmental permits, I don't have agreements with Alcan or agreements with the province," Henning cautioned, adding the process of getting those approvals in place could well lengthen his timeline.

Alcan officials have previously been hesitant to discuss firm dates because of the uncertainty of how long those approvals could take, but a second Alcan official says completion is expected to take six years from the time board approval is given.

"If we were to get approval in 2006, you could see first metal coming online in 2012," said Colleen Nyce.

The six-year construction timetable allows Alcan to build in phases, opening new potlines gradually while closing older ones.

And though the new smelter will require far fewer employees than the current one, the company is relying on a coming bulge of retirements to even out its workforce requirements without having to lay people off.

Alcan now has 1,500 employees in Kitimat and forecasts a drop to 1,000 at the new planned smelter.

Henning also predicts the company will have to hire people to replace some of those due to retire.

"Yes, we're reducing the workforce," Henning said. "But we're doing it in a way that is gentle, I guess - we're not laying people off."

The prospect of job loss in Kitimat has made its municipal council worried about the future of the area.

It's one of the reasons why the council opposes any plan for Alcan to sell surplus power. The council wants the power used instead in Kitimat on development to provide jobs.

It describes Alcan's current plan as the "small smelter option" and prefers Alcan uses its power as well as that available from a deal with BC Hydro to construct a larger smelter with no resulting drop in employment.

The new technology affects primarily the pot room operations, said Nyce, adding that new lines will likely be built at the current smelter site.

Henning's chamber of commerce presentation was the first from a company official that involves potential construction and completion dates for a long-rumoured smelter replacement project at Kitimat.

But Alcan CEO Dick Evans has lately been saying that the smelter is among its top three priorities when it comes to modernization.

Nyce added that settling a collective agreement with the Canadian Autoworkers' Union ahead of schedule and the safety record of employees at the Kitimat facility have played a large role in Alcan's decision to focus on the Kitimat project.

"It's because of the excellent operational performance of Kitimat this last year and a half that has really given the decision makers the confidence to look more closely," she said referring to the plant's record-setting 2 million hours without a lost-time accident.

Henning became visibly emotional when he spoke at the chamber meeting here about how proud he was of the employees for achieving that milestone.

It's a first in the history of the Kitimat smelter.

A projected construction cost has yet to be released.

Kaiser Aluminum Being Listed on Nasdaq

Houston Chronicle, United States -July 6, 2006, 1:08PM

© 2006 The Associated Press

FOOTHILL RANCH, Calif. — Kaiser Aluminum Corp. said Thursday it is emerging from Chapter 11 bankruptcy and will be listed under the symbol "KALU" on the Nasdaq starting Friday.

The maker of fabricated aluminum products said it will focus its growth on plate products, forgings, and custom extrusions. In a statement it cited a $75 million expansion of its Spokane, Wash., rolling mill as a key to its strategy.

The company filed for reorganization in 2002 and divested several commodity businesses. Kaiser also said it addressed debt and asbestos-related liabilities while in bankruptcy.

Washington Group International Awarded 10-Year Bauxite Mining Contracts in Jamaica

PR Newswire (press release), NY 06-Jun-2006

BOISE, Idaho, and DENVER, July 6 /PRNewswire-FirstCall/ -- Washington Group International Inc. (Nasdaq: WGII) today announced contracts giving it a major role in the Jamaican bauxite mining industry. With the two awards, Washington Group will be mining and delivering approximately one-third of Jamaica's annual bauxite production. Jamaica is one of the world's leading producers of bauxite, the base mineral from which aluminum is refined.

In a transaction with Jamaican alumina producer West Indies Alumina Company (WINDALCO), Washington Group has been awarded two 10-year contracts that will generate gross revenues of approximately $300 million combined,

to mine and deliver approximately five million metric tonnes of bauxite ore annually to WINDALCO refineries. The ore will be taken from two existing WINDALCO mines in central Jamaica -- the Ewarton Mine and Kirkvine Mine.

Washington Group also will perform mine development and post-mining reclamation.

"We are enthusiastic about the opportunity to serve WINDALCO and the Jamaican bauxite industry. This is a terrific fit with our international mining skills and is consistent with our strategic plan for continued global expansion in the mining industry," said Bob Zaist, president of Washington Group's Mining Business Unit, which is headquartered in Denver.

Washington Group International has a long, successful history of surface mining internationally. Its current projects include coal, zinc, silver, copper, gold, lead, and phosphate mining operations in the United States, Canada, Latin America and Europe.

WINDALCO is a joint venture of Glencore Alumina Jamaica Limited and the Government of Jamaica. In addition to mining rights at the two mines, WINDALCO owns two refineries and a shipping port.

Washington Group International Inc (Nasdaq: WGII) provides the talent, innovation, and proven performance to deliver integrated engineering, construction, and management solutions for businesses and governments worldwide. Headquartered in Boise, Idaho, with more than $3 billion in annual revenue, the company has approximately 24,000 people at work around

the world providing solutions in power, environmental management, defense, oil and gas processing, mining, industrial facilities, transportation and water resources. For more information, visit

Ormet Corp., union cut deal

2TheAdvocate, LA Jul 6, 2006

By GARY PERILLOUX, Advocate business writer

The United Steelworkers has reached a tentative labor pact with Ormet Corp. for its Burnside refinery and for facilities in Ohio.

The deal, which still must be ratified by about 200 Ormet workers in Burnside, would provide a signing bonus, wage increases and profit-sharing, though the parties won’t release details before a vote.

"We’re very encouraged they will vote in favor of the new contract," Ormet spokeswoman Linda Regelman said.

Should the union reject the proposed pact, a 72-hour notice would enable renegotiation, she said.

Union leaders couldn’t be reached for comment.

In Burnside, the refinery produces metal agents that are the forerunner of primary aluminum made in Ohio, where about 1,500 workers had been on strike for 19 months.

Approval of the contract would avert a potential strike in Burnside and resolve outstanding issues from the company’s bankruptcy filing. Ormet emerged from a Chapter 11 reorganization in April 2005. Labor negotiations have been under way since late 2004. Burnside employees have continued to work under a contract that expired in September.

Story originally published in The Advocate

Kaiser Out of Bankruptcy, on to Nasdaq

Houston Chronicle, United States July 7, 2006, 10:18AM

© 2006 The Associated Press

FOOTHILL RANCH, Calif. — Kaiser Aluminum Corp. began trading on the Nasdaq exchange on Friday, a day after formally emerging from bankruptcy.

Shares were at $51 in morning trading.

The company makes fabricated aluminum products and has sold off most of its commodity-based holdings and eliminating all material debt, legacy and asbestos-related liabilities that caused the bankruptcy.

Kaiser filed for bankruptcy in 2002, following a prolonged labor dispute that included what was ultimately ruled an illegal lockout of workers. The West Coast energy crunch several years ago also hurt the company, as aluminum production requires large amounts of electricity.

NALCO says $887 million expansion on track

Financial Express, India Friday, July 07, 2006 (Reuters)

MUMBAI, JULY 7: The Chairman of India's second-largest aluminium maker, state-run National Aluminium Co Ltd, said on Friday it was on track to complete an ongoing $887 million expansion by 2008.

Pradhan said the company aimed to fund the Rs 40.90 billion expansion from internal accruals, providing half the money and the remainder through loans.

"The expansion is on track," he said over telephone from his office in Bhubaneshwar in Orissa.

The expansion, scheduled for completion in 2008, will raise its aluminium smelter's capacity in Orissa by 115,000 tonnes from 345,000 tonnes now.

It also involves raising alumina production capacity to 2.1 million tonnes from 1.575 million, bauxite mining to 6.3 million tonnes from 4.8 million and power generation to 1,200 megawatts from 960 MW.

Pradhan said the company had suffered a production loss of about 2,000 tonnes of aluminium following a two-day strike in June by workers after the federal government, which owns 87.15 per cent of the firm, said it would sell 10 per cent.

On Thursday, the government decided to put all stake sales in state-run firms on hold after a key ally threatened to pull out of the ruling coalition.

The company expects to produce 345,000 tonnes of aluminium in the financial year ending in March 2007, Pradhan said.

It is still studying plans for building a 500,000 tonne aluminium smelter in the Gulf and another for managing a smelter in Indonesia, he said.

"We are talking to different people about these projects," he said.

National Aluminium is also examining a proposal to build a 1.5 million tonne aluminium smelter in Andhra Pradesh or in Orissa.

This project, along with the foreign plans, are part of a five-year expansion plan, which is estimated to cost $3.25 billion, he said

Aluminum industry signs mou in support of Asia Pacific Partnership

The Fabricator, IL July 11, 2006

Leaders of the aluminum associations of Australia, China, Japan, and the U.S. signed a memorandum of understanding (mou), agreeing to work to support the objectives of the Asia Pacific Partnership (AP6). India and Korea also agreed to the document but were unable to attend the formal signing.

The agreement was signed at an environment, health, and safety conference jointly sponsored by the China Nonferrous Metals Industry Association, the Aluminum Association (U.S.), and the International Aluminum Institute.

In the agreement, the aluminum associations pledge to share information about environmental-control best practices, energy efficiency, health and safety education, recycling, and measurement and reporting.

Following the signing, the Aluminum Task Force of the AP6 met informally to discuss its work plan. The plan is scheduled to be submitted to the AP6 Policy Implementation Committee (PIC) by the end of August 2006.

Strike Looms for Jackson County Employees

WOWK, WV 7/10/2006 08:46 AM

The clock is ticking for some employees in Jackson County.

Story by Craig McKee

An agreement has still not been met as a contract extension deadline looms at Century Aluminum. Plant Manager Ron Thompson posted an open letter to employees on the website, a website devoted to the contract talks. Thompson calls the company's final offer very competitive. The union represents 580 hourly employees. It has refused to put the proposed contract up for a vote. Members say they will not accept changes to health care and they claim *that* is part of the plan.

Copyright 2006 West Virginia Media.

SUAL Group gets $600-million syndicated loan

Ural Business Consulting, Russia 10.07.2006 12:14:17

SUAL Group, one of the world’s top ten aluminum producers, is to be given a syndicated loan of $600m by BNP Paribas and Citigroup, reports the company’s spokesperson.

The money will be used for refunding the credit payment debts (SUAL got a $425-million syndicated loan in June 2005) as well as for financing the company’s trading capital and other corporate needs.

The credit conditions are in cull compliance with the flexible borrowing system adopted by SUAL Group, which means that the loan is given for a term of five years, with amortization after a two-year grace period and the annual interest rate set at LIBOR + .85% for the first three years of payments (starting on the day of the first installment) and at LIBOR + 1.2% for the rest of the payment period. The two banks set to loan proceedings on June 26, 2006.

‘This is the greatest credit we have ever received. Our creditors considered both the favourable opportunities of the Russian market and the impressive records of our activity. I believe the interest rate we’ve got will set the profitability standards for similar loans to other Russian mining and metallurgical enterprises,’ said First Vice-President for Finances of SUAL Holding JSC Josef Bakaleinik, reports their spokesperson.

Alcoa Loss in Russia

The Moscow Times, Russia Wednesday, July 12, 2006. Issue 3451. Page 6.

Alcoa, the world's largest aluminum producer, said Tuesday it made a loss of $78 million in Russia and the Chinese state of Bohai during the second quarter this year.

The loss runs counter to record profits for the company worldwide, with net income up 62 percent to an all-time record $744 million, compared to the same period last year, U.S.-based Alcoa said Monday in a statement. (MT)

Aluminum Fjords

IcelandReview, Iceland 11-Jul-2006

They haven’t built a new house in over ten years, Gudmundur Bjarnarsson, the mayor of Neskaupstadur, told me four years ago when I last visited the former fishing village, located in Iceland’s remote East Fjords.

It made sense. Neskaupstadur felt like the armpit of the East Fjords. Who the heck would want to move here?

It was winter. The streets were completely iced over; the low-hanging gray clouds swallowed the town. The town’s main entertainment center was a shabby pizza joint with a couple of pool tables. Boxed in by mountains on either side, Neskaupstadur felt like Iceland’s gulag.

Every teenager I spoke to couldn’t wait for his or her get-out-of-jail-free card, which came in the form of a ticket to Reykjavík to study anything at the University.

Then Alcoa arrived in 2003. The world’s largest aluminum company is constructing one of the world’s largest smelters, what’s called a mega project (any project over a billion dollars), in the town of Reydarfjördur, and now the entire East Fjords region is booming.

"Alcoa is the gold, and there are many ways to the gold," says Björgvin, a 38-year-old resident of Reydarfjördur, who has a tattoo of a naked woman caught up in a fishhook on his forearm.

Björgvin, like everyone I spoke to in the five main coastal communities making up the district of Fjardabyggd, is overjoyed by Alcoa’s decision to build and operate a smelter in Reydarfjördur. Björgvin is so ecstatic that he purchased a pair of vanity license plates for his Nissan Patrol that read: ALCOA.

And why not get excited? The former gulag now boasts an immaculate football stadium right on the water’s edge. Freshly built, the designer turf is so fine it will be a shame to see footballers step on it with their cleats. There’s also a housing boom underway. In 2000, there was exactly one new house built in the Fjardabyggd region. Today, I count 14 new houses under construction in Neskaupstadur. In a town of 1,469 residents, that’s like an entire sub-division.

Sure, the smelter is an eyesore, a scar on a fashion model’s face, but so was the fish factory that once occupied Reydarfjördur’s harbor. The smelter will belch out pollution, but like Dröfn, a 22-year-old native of Neskaupstadur who studies in the capital area explained, there’s pollution in Reykjavik. "Lots of it."

The biggest issue is that in order to power the smelter, a dam is under construction in Iceland’s Eastern Highlands. A large swath of untouched wilderness is soon to be flooded. And the environmental damage isn’t complete. Plans are in the works for a new smelter in the Húsavík area.

"If Alcoa follows its plan for future smelters here, Iceland will become the A in Alcoa," says Andri Snær Magnason, a popular writer living in Reykjavík whose current book, Dreamland: Self-help for a Terrified Nation, takes a critical look at the government’s policy of relying on heavy industry for economic growth.

I ask Dröfn about the opposition to the smelter, a project that is highly unpopular amongst the Reykjavík crowd. She laughs sarcastically; most of my friends from school haven’t even been out here.

The man with Alcoa plates on his car hasn’t even heard of Andri Snær.

To be sure it’s not an easy question: how should Iceland balance the need for economic development with the necessity to protect its most valuable asset—the raw nature that characterizes this island nation?

It’s a no brainer for those living in the east. As the manager of an outdoor store located in a new shopping mall in Reydarfjördur says: "The smelter is something the East needed. It was either build the smelter or close down the town." EW

RUSAL Reports H1 2006 Results

Russia Newswire (press release) 13-Jul-2006

MOSCOW (RNWire) - RUSAL, the world’s third largest aluminium producer, today reported its production and financial results summary for the first half of 2006. Alexander Bulygin, the company's CEO says: "We have delivered strong performance in the first half of 2006.

RUSAL has taken major strides to expand into global markets through significant acquisitions and long-term investments in Africa, Asia and South America. The launch of the Boguchanskoye energy and metals project in the Krasnoyarsk region of Siberia demonstrates our continued investment in Russia.

We intend to capitalise further on favourable market conditions and accelerate our strong growth by implementing modernisation programmes, launching new production facilities, purchasing assets, entering new markets and providing our clients with new opportunities."


- The company's revenues increased by more than 33% to $4 billion compared to $3 billion in the first half of 2005.

- International sales of aluminium increased by 40% to $2.8 billion compared to $2 billion in the first half of 2005.

- Aluminium production increased by 2.1% to 1,373,390 tonnes compared to the first half of 2005.

- Output of high value-added casthouse products increased by 11% to 465,762 tonnes compared to the first half of 2005 results.

- Alumina production grew by 9% to 1,997,011 tonnes.

- Bauxite output increased by 56.7% to 3,788,938 tonnes.

Alexander Bulygin, RUSAL's CEO says: «We have delivered strong performance in the first half of 2006. RUSAL took major strides to expand into global markets through significant acquisitions and long-term investments in Africa, Asia and South America. The launch of the Boguchanskoye energy and metals project in the Krasnoyarsk region of Siberia demonstrates our continued investment in Russia. We intend to further capitalize on favorable market conditions and accelerate our strong growth by implementing modernization programmes, launching new production facilities, purchasing assets, entering new markets and providing our clients with new opportunities.»

Key Growth Projects

- RUSAL acquired 77.5% of the Aluminium Smelter Company of Nigeria (ALSCON), which includes a 193,000 tonne smelter, in a $250 million transaction.

- RUSAL and the Government of Guinea reached an agreement on the privatisation of the Alumina Company of Guinea/Friguia (ACG/Friguia) bauxite and alumina complex. RUSAL plans to almost double the output of ACG/Friguia by 2008 from its current capacity of 600,000 tonnes of alumina and 2.8 million tonnes of bauxite per year.

- RUSAL reached an agreement with the Government of Guyana on the privatization of the Republic’s leading mining company, Aroaima Mining Company (AMC). This project will raise RUSAL’s total bauxite production capacity from its current level of 6.2 million tonnes to 8.7 million tonnes in 2008.

- RUSAL acquired a cathode plant located in north-eastern China with an annual capacity of 15,000 tonnes of cathode blocks. The Chinese plant will cover 50% of RUSAL's annual demand for cathode blocks.

- RUSAL and HydroOGK (a subsidiary of RAO UES) signed a cooperation agreement to construct the Boguchanskoye energy and metals complex. This $3.6 billion project includes the completion of a 3,000 MW Hydro Power Plant (HPP) and the construction of a 600,000 tonne per year aluminium smelter in the Krasnoyarsk region.

- The Boguchanskoye energy and metals complex, the centerpiece of the Lower Angara Region Development Programme, has attracted 34.41 billion rubles ($1.3 billion) from the Russian Investment Fund to finance key infrastructure works including the reconstruction and building of the Kansk-Aban-Boguchany-Kodinsk highway, the construction of a bridge across the Angara river along with a section of the highway Boguchany-Angarsky, and the construction of a railway line between Karabula and Yarki.

- RUSAL and the Queensland Government established a joint working group to develop power projects in Australia.

- RUSAL signed a Memorandum of Understanding to develop a coke production facility in Nizhnekamsk.

Production Results

The 10% increase in the production of high value-added casthouse products and 2.1% growth in aluminium output resulted from RUSAL's ongoing programs to bolster production, modernize equipment and improve the technical and economic parameters of smelter operations.

The 22% increase in alumina output was driven by the acquisition of 20% of the QAL Refinery in Australia in April 2005, as well as modernization programmes undertaken at the Achinsk and Nikolayev alumina refineries.

The acquisition of Aroaima Mining Company in Guyana, participation in the Komi Aluminium project, and a production increase at Compagnie des Bauxites de Kindia in Guinea secured a 56.7% uplift in bauxite output as compared to the first half of 2005.

Expansion of the product range manufactured by the Extruded Products Division along with growth of market demand secured a 28.4% increase in the production of aluminuim profiles and architectural and construction systems during the first half of 2006.

Near 24% growth in aluminium beverage can production came as a result of the commissioning of a second processing line at the ROSTAR-Vsevolozhsk plant located in the St. Petersburg region.

More than 2% growth in aluminium foil production was achieved through increased productivity at the SAYANAL plant.

UPDATE 1-Century Aluminum workers to vote on contract offer

Reuters Fri Jul 14, 2006 2:26pm ET

NEW YORK, July 14 (Reuters) - Workers at Century Aluminum Co.'s (CENX.O: Quote, Profile, Research) smelter in Ravenswood, West Virginia, will vote in about two weeks on the company's latest contract offer, union and company officials said on Friday.

The United Steelworkers union said it will take Century's "last, best and final offer" to the membership of local 5668-04 for a secret ballot vote. The union plans to hold informational meetings with members on July 18 and conduct a secret ballot contract vote the following week.

The union did not specify a date for a vote on the offer, which Century presented to the negotiating committee on June 20.

The existing labor agreement covering 580 hourly workers at Century's Ravenswood 168,000-tonne-per-year aluminum smelter will be extended day to day, both sides said.

The union decided to take the company's last offer to the Ravenswood workers after a July 12 meeting with Century Aluminum's West Virginia subsidiary and a federal mediator. The meeting was called by the Federal Mediation and Conciliation Services.

"This is a decision that impacts several hundred of our members, their families, retiree's and the entire community and the International Union believes that this decision should be made by the bargaining unit members who work at the Century Aluminum Plant in Ravenswood," said union representative Tim Dean .

Century said it welcomed the union's decision to submit the offer to a vote by the workers.

© Reuters 2006

Iranian experts produce alumina from nepheline

IranMania News, Iran Saturday, July 15, 2006 - ©2005

LONDON, July 15 (IranMania) - Experts at a research and industrial plant in Azarshahr, East Azarbaijan Province, have managed to produce alumina from nepheline concentrate, MNA reported.

The project, first in its kind in the Middle East, was inaugurated in this small city located in northwest Iran by the Minister of Industries and Mines Alireza Tahmasbi. The plant uses nepheline concentrate as the raw material for aluminum production.

The project, also to be carried out in Sarab - another city in the province - is slated to annually produce 200,000 tons of aluminum, the minister said adding that the production is expected to be boosted to 500,000 tons per annum.

He put the investment required for the production of 200,000 tons of alumina per year at the Sarab Alumina Plant at around $700 million.

The minister also commented on Iran’s Fourth Five-Year Socioeconomic Development Plan’s objectives in the aluminum ingot production sector and said, aluminum production during the past 40 years had been planned for only 240,000 tons whereas, the figure is projected to increase to between 800,000 tons and one million tons per annum within the next 3.5 years.

Environmental permit sought for bauxite project in Berbice River

Stabroek News, Guyana Friday, July 14th 2006

The Bauxite Company of Guyana Inc (BCGI) has submitted an application for an environmental authorisation for the extraction of bauxite from approximately 3,400 acres of land on the East Bank of the Berbice River near Hururu Village.

The company is making an investment of US$18.6M with a projected annual turnover of US$60.8M. It is envisaged to produce three million metric tonnes annually at the rate of 10,000 tonnes per day. The project will have a life of 20 years.

The bauxite will be loaded onto trucks and transported to Kwakwani where the bauxite will be taken by barge to Aroaima thereafter for export.

The notice in Wednesday's Guyana Chronicle described the area where the mining is to take place as Deposit 22 Kurubuka situated in the Kwakwani area, 140 kilometres southwest of New Amsterdam, Berbice. The location is situated on the right bank of the Berbice River within the Hururu Amerindian Reservation.

The Environmental Protection Agency (EPA) said that the project would need to have an Environmental Impact Assessment (EIA) done before any decision is made, since this development may have significant impacts on the environment. The EPA said members of the public are invited within 28 days of the notice to make written submissions to the agency, setting out those questions and matters that they would require to be answered or considered in the EIA.

The project summary said a mine plan and project operation plan have been prepared for the Deposit 22 Kurubuka which is estimated at 38 million tonnes of bauxite. The geological exploration has been completed though the site-layout, mine planning, site-clearing are yet to be done.

During the mobilisation phase also the company would be mobilising its equipment and machinery, constructing its site office, mechanical workshop and fuel bond and construction of additional haulage roads.

According to the summary, the project is expected to create employment for approximately 75 persons; 20 during the mobilisation phase and 55 in the subsequent operational phase. Also the project is expected to bring economic and social benefits to the immediate and surrounding communities of Hururu, Kwakwani, Aroaima, Ituni and Linden by creating direct employment opportunities and social benefits.

The company said the technological benefits would be the state of the art machinery and equipment which will be sourced internationally. And as part of the implementation, training will be done for local staff to ensure technology transfer.

Within the project area there are no settlements or residents, the summary said. According to the company, the nearest settlement of Hururu is approximately eight to ten miles away from the project area.

In justifying the investment, the company said that over the past years the demand for metallurgical grade bauxite has increased significantly owing to the high demand for aluminium. "This global demand has been met nationally with sluggish production and delivery by suppliers. A contributing factor is the absence of investments to consolidate and expand production," the company said.

According to the company, it conducted a feasibility study on the current demand and found that an opportunity for investment existed. The study indicated that with a project of the appropriate scale of production and efficient management, Guyana could become competitive in the metallurgical bauxite market. Based on this, BCGI conceptualised the project to meet the current market demands, meet the expanded overseas market demands and ensure that there is a continuous supply of metallurgical grade bauxite.

The company has prepared an Environmental Management Plan as required by the Guyana Geology and Mines Commission (GGMC) for the granting of a mining licence. BCGI has engaged Environmental Management Consultants to conduct its EIA in accordance with the EPA's established guidelines for the conduct of mining EIAs and international best practices.

The company was registered on November 19, 2005 and is a subsidiary of the RUSAL Group, the third largest aluminium company in the world. As of April 1, 2006, BCGI effectively took over the operations of Aroaima Mining Company through a privatisation arrangement. (Johann Earle)

'PR nightmare' aside, Glencore connection comes in handy

Globe and Mail, Canada - 15 Jul -2006


E-mail Eric Reguly | Read Bio | Latest Columns

LONDON -- Xstrata PLC boss Mick Davis calls it a "PR nightmare" that he has to endure. When he attempts a foreign acquisition that may not be popular with the target firm or local politicians, a bogeyman called Glencore International AG is hauled out of the closet and given a public flaying. At that point, Xstrata goes on the defensive. It happened last year in Australia and this year in Canada, when Xstrata went after Falconbridge Ltd.

Glencore is the world's largest commodities trader. It is based in Switzerland and controls about 36 per cent of Xstrata's equity. Glencore's problem -- and hence Xstrata's -- is its past association with Marc Rich, the onetime fugitive financier who was pardoned by former president Bill Clinton on his last day in the White House. Glencore's alleged role in the Iraqi oil-for-food scandal hasn't helped its image.

Mr. Rich is no longer associated with Glencore; Mr. Davis has said he has not even met the man. The allegation in the oil-for-food scandal apparently went nowhere. Glencore denied any impropriety.

Still, Xstrata can't shake Glencore's tarnished image. So why doesn't Mr. Davis sue for divorce? The short answer is: He can't. Glencore is an investor and investors don't have to sell. The longer answer is that Xstrata benefits greatly from the Glencore relationship. It has, in fact, been instrumental in propelling Xstrata's extraordinary growth.

Glencore is more than just an investor in the classic -- that is, passive -- sense of the word. It has pumped billions of dollars into Xstrata by participating in its equity financings, such as rights offerings. Glencore did so again recently when Xstrata raised $2.5-billion (U.S.) to help fund the Falconbridge play. "Having a large shareholder who puts up capital is tremendously helpful," Mr. Davis says.

Glencore has another crucial role. With trading offices in about 50 countries, it has a good idea of what's going on in the global commodities market, from aluminum to zinc and everything in between. "We tap into Glencore's market intelligence," Mr. Davis says.

Take the case of thermal coal. Two years ago, Xstrata was set to renew coal supply contracts at about $58 a tonne. Glencore advised Xstrata to delay the negotiations -- it was aware of impending coal shortages and suspected the price would soon soar. Xstrata waited. Sure enough, prices rose sharply and Xstrata renewed the contacts at $125 a tonne.

Mr. Davis says Xstrata has total operating autonomy. Glencore has the right to appoint only three names to Xstrata's 12-member board. He says he "would have no difficulty" seeing Glencore reduce its Xstrata stake but doesn't think that will happen soon. It's not hard to see why: Xstrata's market value has risen from $500-million to more than more $23-billion in five years.

Ormet workers praise contract

Marietta Times, OH 15-Jul-2006

By Kate York,

Striking Ormet workers learned the details Friday of a tentative agreement reached between their union and the company two weeks ago and a vote will come Sunday.

The agreement gives workers wage increases, improved pension, $1,500 signing bonuses, guaranteed 40-hour workweeks and gives retirees back their health benefits.

"Everybody seems to be pretty positive about it," said 26-year Ormet employee and United Steelworkers of America Local 5724 member Ron Jackson. "It’s the attitude that if (Ormet CEO Ken) Campbell is willing to work with us, we’re willing to work with him."

Two union locals have been on strike since November 2004 after Ormet Corp.’s bankruptcy reorganization plan nullified union contracts. On June 30, Ormet officials announced a tentative agreement had been reached between the union’s international chapter and the company, though few details were provided.

The agreement will mostly apply to the company’s aluminum reduction facility in Hannibal, with about 900 union workers. The company’s other Hannibal facility, an aluminum rolling mill, was sold to Aleris International in December and is not in operation.

Local 5724, in Clarington, held informational meetings for its members Friday about the agreement and union members will vote Sunday on whether to ratify it.

Friday’s meetings were attended by 617 Local 5724 members, said vice president Jim Markus. About 350 retirees attended a separate meeting.

"Overall, I think they felt it was a good agreement but there are still some local issues that were not explained or settled," he said. "Ormet and its new CEO have agreed that in 90 days those issues will be resolved."

What is already part of the agreement includes a new and improved grievance procedure that penalizes the company for being untimely responding to grievances, Markus said.

"Before you could file a grievance and it could months or even years before it would be resolved," he said.

The agreement also enhances workers’ safety and health rights and provides them with a full-time contract coordinator to assist the union in the oversight of the new agreement

"This is a full-time employee who will be paid for by the company," said Markus. "They’ll basically serve as a watchdog over the agreement."

Under the agreement, the union workers’ life, death, sickness and accident benefits will remain the same, Markus said, and the health benefits for retirees will continue.

One of the sticking points in contract negotiations had been ensuring that about 2,000 Ormet retirees would not lose their health benefits as they were scheduled to do on Dec. 31, 2007, according to Ormet’s reorganization plan.

"The new agreement now is that as long as we can get Ormet back up and running they’re obligated to fund that health benefit until 2018," said Markus. "And they’re putting more in through profit sharing."

In the new agreement, Ormet officials agreed to create a profit sharing pool of five percent of the company’s quarterly EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) profits to be divided among all bargaining unit employees.

The agreement also allows for negotiated annual wage increases of three percent and increased earning capabilities for overtime, vacation and holiday pay.

If approved the contract would be in effect until Dec. 31, 2009.

"I’m hopeful this will get things started," said Jackson. "The valley is hurting."

Markus said he is also optimistic but concerned that even if the contract is approved there is still in obstacle in the path to going back to work—Ormet is seeking a new power agreement and can’t reopen the plant until it has one.

"Everything still hinges on that," said Markus. "But we’re hopeful."

Ormet Contract Ratified

Wheeling Intelligencer, WV 16-Jul-2006


CLARINGTON — Members of the United Steelworkers Local 5724 voted Sunday to ratify the contract agreement negotiated by union leaders and Ormet Primary Aluminum Corp.

Though the vote effectively ended the 19-month strike, restarting production is contingent upon Ormet securing an electricity deal to power the plant.

The vote was 551-79, said Mark Shaw, the USW contract coordinator for District 1.

"The overwhelming majority of our members recognize that this is a good deal. They want to get back to work, but we need a power deal now more than ever."

Linda Regelman, a spokeswoman for Ormet, said Friday that even if the union ratified the labor agreement Sunday, Ormet still would not be able to restart production right away. Restarting the aluminum reduction plant’s potlines is contingent upon Ormet Primary Aluminum Corp. negotiating a power contract to provide electricity for the plant — whether through the Public Utilities Commission of Ohio or independently.

Shaw said that if the company can’t secure a electricity at reduced industrial rates offered to other similar operations, the plant can’t make money on production. Without an energy contract, the company couldn’t afford to spend the estimated $120 million it will take to restart production.

"I know that the company has talked with AEP," Shaw said. "The quickest, best way to get a deal is not to go through the courts and the (Public Utilities Commission of Ohio)," but to negotiate a deal independently.

Shaw did say, however, that a limited number of workers — in order of seniority in their departments — will return to the casting house and potlines to prepare for the pending restart.

Local 5724 President Denny Longwell on Friday mentioned some concessions the Union made in negotiating the agreement, including some changes in the wage structure and some reductions in the amount of jobs through restructuring the work force — though he said he expected retirees to voluntarily vacate most of those lost positions. He said that the union had secured pay raises for every member and hiring preferences for those laid off after Ormet shut down and sold its rolling mill.

Longwell said when the union started its strike in November 2004, there were more than 930 workers.

Q & A Alcan's Metal Maven (Dick Evans)

TIME Sunday, Jul. 16, 2006

Positioning aluminum to become a "precious" commodity again


With a 37-year career in the aluminum industry, handling coups and monetary crises, Richard Evans, 59, is no stranger to challenges. After four months as CEO of Montreal-based Alcan--the world's No. 2 aluminum producer and the market leader in such products as balsa wood and Stelvin wine caps--the record-making fly fisherman spoke with TIME's COCO MASTERS about energy efficiency, China and his Audi S8.

In nearly every industry, we see evidence of how doing good is good business. How is Alcan doing good?

Alcan's environmental-health and safety program, EHS First, has resulted in a substantial reduction in injuries and illnesses, and improvements in our environmental footprint. We work with aboriginal peoples to provide training and employment in Australia and Canada and have a U.N.-recognized initiative in Cameroon, where we have reduced the AIDS level in our workforce and further taken the program outside the plants to help the entire community.

What initiative have you just inked in Ghana?

The development of bauxite reserves and a large potential in investment for an alumina refinery. We've also announced sustainability initiatives with local communities as part of the global compact under the U.N. This is a three-year commitment on safe water.

Where else is Alcan expanding?

We have a list of six or seven expansion opportunities. The one in Oman will be finished in early 2008. Oman was chosen because of its abundance of natural gas. We're considering expanding our Iceland plant based on geothermal electricity--very clean, renewable electricity at reasonable cost. That fits into Alcan's philosophy of developing energy resources to support our smelting and is similar to what we've done in Canada, where we own our electric requirements and generate it through hydropower.

Aluminum is energy intensive. How are you improving efficiency?

We have upgraded to AP35 and have AP50 under development. AP originally stood for Aluminum Pechiney, and it is numbered by the amperage of the cells. So AP35 is technology that uses 350,000 amperes. It improves the capital efficiency of the plant and the energy efficiency of using the electricity. Today it's about 95% efficient, whereas when I started 30 years ago, 85% was typical.

How is China's appetite for metal going to affect aluminum supply and prices?

China has built more capacity than they have electricity to support or alumina to feed operations. This has driven up the price of alumina because they're a big importer of alumina. Over the next two to three years, some of that capacity will be activated, but probably not all of it. In the mid- to longer term, China will be in balance. It will not be an exporter and could even go into deficit and be an importer [of aluminum]. That would be good for the world aluminum market. The price of aluminum going forward will be higher than it has been historically.

What should people keep in mind when considering aluminum's use today?

It is one of the most energy-efficient materials for transportation and building. Substituting 1 ton of aluminum for 2 1/2 tons of steel saves 20 tons of CO2 over the life of the vehicle.

You and your wife drive two all-aluminum vehicles?

I drive an Audi S8. She drives a Jaguar XJ8.

So why don't U.S. automakers use more aluminum in their vehicles?

There's more focus on efficiency and performance in Europe. With energy prices back up in the U.S., my guess is that there will be a renewed interest, but they've fallen behind European competitors in the technology to lightweight their vehicles.

'The days of taking our ore are gone'

BBC News, UK 18-Jul-2006

The Ghanaian government wants the Okyenhene (tribal king) of eastern Ghana's Akyem Abuakwa region to grant land access to mining companies interested in exploiting huge deposits of bauxite - the raw material used to produce aluminium.

The Okyenhene told the BBC's Claire Gilderson why he's in no hurry to sacrifice the Atiwa rain forest and will wait for the highest bidder who can prove that profit is not their only concern.

The Okyenhene is a staunch environmentalist

Formerly known as the Gold Coast, you'd be forgiven for thinking that Ghana is a prosperous country with a strong economy.

Exploitation from mining multinationals has attributed to our lack of development. Obuasi and Tarkwa in the south-west are rich in gold yet poor infrastructure, bad roads, lack of sanitation and poverty are prevalent in these areas.

These multinationals promise opportunity for development, but where is the evidence?

Mining companies have also damaged our environment and neglected our communities. Water bodies have been polluted and forests have been destroyed.


The Atiwa rain forest in my kingdom is approximately 43km squared. It's a substantial part of our livelihood and helps generate rainfall for the farmers.

The local community in Kyebi is clearly in need of development

Cutting down these trees in exchange for surface mining would be disastrous.

We are not prepared to fell trees for economic short term sustainability. There has to be long term sustainable programmes in place.

People have also been displaced and neglected. Many communities end up more impoverished after the mining companies leave, than before they arrived.

The promise of jobs equates to unskilled labour and the workers are left with no tools, no skills and no training.


They are not able to apply for decent jobs and have nothing to fall back on when the multinationals leave.

I am not against mining if the ore and the production process are owned by our people.

Unfortunately in the past we have been quick to sign inequitable contracts in the hope of eradicating poverty.

Contracts must stipulate healthcare for the workers, decent housing, better pay, more benefits, training, care for the environment and social responsibility.


We have to make laws to protect our people and our land. As traditional leaders we must negotiate hard and bargain from a position of strength in future.

The land beneath the rain forest is rich in aluminium ore

The days of taking our ore are gone.

Canada or Australia do not tolerate such inequity, neither will we.

This is the 21st Century and we have a responsibility to future generations to turn the minerals that God has blessed us with into symbols of wealth and development such as schools, hospitals, universities, decent roads, infrastructure and respectable jobs which will transform lives and raise standards of living.

Ghana needs to take a cue from South Africa - in Johannesburg you can visibly see what has been done with their gold.

We need to hold onto our property and wait for the highest bidder who is someone that not only cares about their profit but also cares about our people.


The BBC's Africa Have Your Say radio programme is debating how mining communities can prosper from the minerals beneath their feet, on Tuesday 18 July at 1600 GMT. If you would like to take part send your views and experiences by clicking on the link below. Or you can send an SMS text message to +44 77 86 20 20 08.


Trinidad accepts Alcoa plant's environmental filing

Reuters - Thu Jul 20, 2006 12:39pm ET

NEW YORK, July 20 (Reuters) - The Republic of Trinidad and Tobago's Environmental Management Authority accepted Alcoa Inc.'s (AA.N: Quote, Profile, Research) application for environmental clearance this week for a proposed aluminum smelter in the Cap-de-Ville area in southwestern Trinidad, Alcoa said on its Website.

"It's another milestone in the project," Alcoa spokesman Kevin Lowery told Reuters.

He said EMA's acceptance of the application means it will issue draft terms within 21 working days for Alcoa's proposed Trinidad operations.

"What will happen from there, the EMA will create the terms of reference for completing the assessment, meaning the guidelines that Alcoa will need to follow in both construction and operation of its facility in Trinidad," said Lowery.

"That's what is expected to be issued in 21 days," he added.

Once the draft guidelines are issued, the EMA will complete a more comprehensive Environmental Impact Assessment (EIA) for the proposed site. Terms of Reference are essentially instructions for conducting the EIA, Alcoa said.

Alcoa, the world's largest aluminum producer, plans to build a 341,000 tonne-per-year aluminum smelter, an associated anode plant and a cast house at the Trinidad site. The casthouse will produce 240,000 tonnes of billet and forging stock per year.

Lowery said Alcoa would produce the first metal at the site in 2008, "if everything goes as planned."

The plant will be powered by a self-contained power plant fueled by natural gas, a plentiful resource on the island, which is the largest supplier of liquefied natural gas to the U.S.

Alcoa expects the new smelter and related facilities to cost $1.5 billion and to employ 750 to 800 people.

Draft Terms of Reference will be open for public review before they are finalized to give the local community, nongovernmental organizations and the public a chance to comment on the project's environmental and social issues.

Randy Overbey, Alcoa's president of Primary Metals Development, said on the company's Website that the Environmental Impact Assessment will contribute to feasibility studies currently underway for the smelter.

"We want to design a world-class facility in terms of its operational, environmental, and social performance. A thorough and comprehensive EIA is essential for doing that," he said.

"It also provides a structured framework for answering the questions posed by the community. To that end, we will ensure that the draft Terms of Reference are widely distributed and publicized." Overbey added.

In February, Alcoa signed an agreement with the government of Trinidad and Tobago to build and operate the proposed aluminum smelter.

Alcoa will hold 100 percent interest in the plant.

Vietnam holding one fifth of world bauxite aluminum

Thanh Nien Daily, Vietnam 20-Jul-2006

Some 5.48 billion tons of bauxite aluminum, accounting for 20 percent of the world aluminum reserves, have been found in Vietnam’s southern mountainous province Dac Nong, a local source reported.

In addition, workers recently discovered around one million tons of crude ore from an outdoor mine 0.5m underground when they were building a factory foundation in Nhan Co commune, Dac R’Lap district.

The government has asked the Vietnam Mine Corporation to immediately scour foreign contractors, probably Australian and Chinese partners initially, to build facilities that could tap bauxite aluminum and manufacture aluminum-made products on the spot, a local construction department said.

Added to this, the government also agreed to build a railway linking the three provinces of Dac Nong, Binh Thuan, and Lam Dong with in order to ease the course of exploiting and transporting aluminum and ore.

Source: Sai Gon Giai Phong – Translated by An Dien

Alcoa may stop Italy plants over EU power issue

WAVE, KY 21-Jul-2006

NEW YORK (Reuters) - Alcoa Inc. (AA.N), the world's largest aluminum producer, may idle two of its Italian aluminum operations if special electricity tariffs agreed to by the Italian government are blocked by the European Commission, a company spokesman said on Friday.

"While we're not threatening, we are saying that the plants would likely be idled if this power arrangement is interrupted," company spokesman Kevin Lowery told Reuters.

On Thursday, the European Union said it was opening an in-depth investigation into cheap power tariffs Italy granted to some industrial users, including Alcoa's plants in Sardinia and Fusina.

The European Commission said it was challenging preferential electricity tariffs granted to energy-intensive industries, without formally notifying Brussels.

Preferential rates given to an Alcoa plant in Sardinia seemed to help a small sector on the island rather than regional development, the Commission said.

It said electricity prices in Sardinia were not higher than in other parts of Italy and might over-compensate Alcoa for a possible regional handicap.

Alcoa's Fusina plant near Venice was not located in an area with a low standard of living and high unemployment, the usual criteria to qualify for state aid, the EU statement said.

Alcoa operates a primary aluminum smelter and a sheet and plate plant in Fusina and a primary aluminum smelter in Portovesme, Sardinia.

The spokesman added that survival of the two Italian facilities depended on running them with competitively priced power, a policy Alcoa applies to all of its operations worldwide.

Lowery said a shutdown would affect 1,000 jobs and about 200,000 tonnes of aluminum production per year, or about one-fifth of Italy's annual consumption.

Proposals to revive undersea cable project

Business Times - Malaysia, Malaysia July 22 2006

by Francis Fernandez,

SEVERAL proposals have been submitted to the Government to revisit the proposed undersea cable across the South China Sea to transfer power from Sarawak's Bakun hydro-electric dam to Peninsular Malaysia, people familiar with the matter said yesterday.

Business Times was told that the rationale is because proposals for a aluminium smelter to take up the bulk of Bakun's 2,400 megawatts power have been unsatisfactory.

It could cost as much as US$1 billion (RM3.68 billion) to hook up Peninsular Malaysia with Sarawak, via an undersea cable.

It is believed that Asea Brown Boveri Ltd, a unit of Switzerland's ABB Group, the world's biggest maker of power transformers, which was linked to the project, as early as 1996 has teamed up with a local partner to bid for the job.

Some two years ago, Eden Enterprises (M) Bhd had informed Bursa Malaysia that it will work with Asea Brown Boveri on a power project in Malaysia.

The project is awaiting government approval, it said, without providing specific details of the project.

As many as five companies had submitted proposals to operate a smelter in Sarawak, but on a financial basis most of the proposals were deemed risky as the operators had no firm control over the supply and price of bauxite and alumina, the main mineral needed for an alimunium smelter.

Soaring Chinese demand has led to a 53 per cent rise in the price of alumina, a white powder used to make aluminium, in the past 12 months.

Extreme price fluctuation of bauxite and alumina means that an operator of a smelter will not be able to control operation cost, even though they have one fixed variable in their favour, namely the supply of electricity.

Among the companies which had submitted bids to build and operate a smelter plant in Sarawak are Tan Sri Syed Mokhtar Al Bukhary's GIIG Capital Sdn Bhd and a Sino-Malaysian consortium which includes Cahya Mata Sarawak Bhd and State Grid Corp, China's leading and largest state-owned enterprise.

The proposals are believed to have been floored by their inability to satisfy the Government on their ability to have control over the price of bauxite and alumina.

Others who have submitted bids - namely the Rio Tinto group, the world's second largest miner by market capital; and Alcoa Inc, the world's leading producer of alumina - have greater control of bauxite and alumina, as they have fixed long-term supply, but both the bids had minimum local participation.

Brazil's Federal Revenue Department Fines Alcoa Unit

Easy Bourse (Communiqués de presse), France Thursday July 27th, 2006

WASHINGTON -(Dow Jones)- Alcoa Inc. (AA) disclosed Wednesday that Brazil's Federal Revenue Department has levied a fine of about $304 million against the aluminum producer's Brazilian subsidiary.

The Federal Revenue Department issued a notice of violation late last month to subsidiary Alcoa Aluminio S.A., Alcoa said in its quarterly report filed with the Securities and Exchange Commission. The department's claim stems from the unit's failure to qualify for a method Alcoa uses to determine anticipation of payment of corporate income and social contribution taxes, according to the filing.

Alcoa Aluminio believes the claim is without merit and will defend itself against the claim, Alcoa said. The fine encompasses fiscal years 2000 to 2005.

Also, Alcoa said the Italian Minister of Environment and Minister of Public Works sued Alcoa Trasformazioni Srl.'s plant at Fusina, Italy, alleging the plant is liable for environmental damage. The plaintiffs assert that Alcoa, as the site's current owner, has the responsibility to prevent contamination of the bordering Venice Lagoon, according to the filing. Alcoa said the site was contaminated by "previous activities."

Alcoa Trasformazioni denies responsibility for the pre-existing condition, Alcoa said. Alcoa has sued the sellers of the Fusina site for indemnification.

The plaintiffs seek compensation for damages to the environment plus the costs of installing a physical barrier along the plant's border with the Venice Lagoon, according to the filing.

-By Antonie Boessenkool, Dow Jones Newswires; 202-862-7139;

Congress charge on sale of bauxite at throwaway price

Newindpress (subscription), India Thursday July 27 2006

BHUBANESWAR: Congress on Wednesday accused the Naveen Patnaik government of allowing Vedanta Aluminum Limited (VAL), which was erecting a refinery in Kalahandi district, to source bauxite ore at the "cheapest price".

"Is it not a well-conspired design to defraud the state when you are letting the Orissa Mining Corporation (OMC) follow double standard while selling its iron and chrome ore through tender route and bauxite on negotiation route?," senior Congress leader Srikant Jena questioned in a letter addressed to the Chief Minister on this issue.

Jena on Wednesday released copies of the letter at a press conference where he again alleged that the agreement between the state government and VAL had "caused loss of more than Rs 50,000 to the exchequer."

The charge, however, had been earlier countered by the steel and mines Minister Padmanabha Behera. Behera said the government had signed the agreement as per the price fixed by Indian Bureau of Mines. The Congress leader said the government was ‘misleading’ the people by quoting false price of bauxite. "While the market price of bauxite ore is Rs 2,350, we are selling per tonne of bauxite at Rs 178 to Vedanta," he said.

"Why did not the state government go for global tender for selling of bauxite ore, which is a transparent process?," Jena asked.

Alcoa, Bechtel Partner for Smelter Study

Houston Chronicle, United States - Jul 25, 2006

© 2006 The Associated Press

PORT-OF-SPAIN, Trinidad — Alcoa Inc. has selected engineering giant Bechtel Corp. as its partner in a feasibility study for its proposed US$1.5 billion (1.2 billion euro) aluminum smelter in Trinidad, a company spokesman said Tuesday.

The study for the proposed smelter at Cap-de-Ville on Trinidad's southwest coast was expected to be completed by San Francisco-based Bechtel by year's end, Hughes said.

Last week, Trinidad's Environmental Management Authority accepted Alcoa's application for an environmental review at the site. The Pennsylvania-based Alcoa company must complete an environmental impact assessment, which requires that the project's possible environmental and health effects are made known to the public before the deal is concluded.

Hughes said the company hopes to start construction next year. The smelter would produce 375,890 tons (341,000 metric tons) of aluminum annually and employ as many as 800 workers. Alcoa would own it.

Bechtel is currently constructing Alcoa's newest aluminum smelter in northeast Iceland. The design of the Cap-de-Ville smelter would be similar to that in Iceland, Hughes said.

The proposed smelter by Alcoa, the largest aluminum producer in the world, has met some opposition in the Caribbean nation. Critics say the smelter would harm the environment and its neighbors, but the company and Prime Minister Patrick Manning say it would be environmentally safe and boost the economy.

Ghana Subsidises VALCO to ¢1.5 Trillion While Ghanaians go to bed on empty stomachs!!

Palaver 26-Jul-2006

Ghana’s sovereign Parliament last week approved an amount of ¢350 billion as subsidy to the beleaguered Volta Aluminum Company Limited (VALCO) in approving the Supplementary Budget presented to the House by Finance Minister Kwadwo Baah Wiredu.

How this ridiculous situation occurred at a time when the Government is increasing electricity prices and is also subsidising the price of the same commodity for VALCO, a company in which the multinational corporation ALCOA has 10% ownership, is the story of one of the most irresponsible policy decisions and incompetent negotiations that any Third World country could take or engage in.

When for the construction of the Akosombo Dam, Kwame Nkrumah negotiated the very low power rate of US$2.265 mills per kilowatt hour (kwhr) with VALCO, it was understandable because the supply of electricity at the time was more than the demand. In fact, the whole country was going so consume not more than 15% of the total electricity that the Akosombo Dam Project was going to produce, so we needed an investor like VALCO to create the market in order to make the Project economical, profitable and attractive to investors.

When the NPP Government came to power, the supply-demand situation was changing and in recognition of this, VALCO itself had agreed with the PNDC/NDC Governments through a series of re-negotiations to increase the power rate.

The last NDC re-negotiated power rate in December 2000 would have earned VRA, and therefore Ghana, about US$30 million a year. The NPP Government cancelled this Agreement, VALCO closed down, and the principal shareholder, Kaiser Aluminium, sold out its 90% shares to the Ghana Government. The minority shareholder, Reynolds Metals, also sold out its 10% interest to ALCOA, which retained that interest, making the present VALCO shareholding Ghana Government: 90% and ALCOA: 10%.

The Ghana Government then had to renegotiate the resumption of operations by VALCO. At that time the supply-demand situation had changed completely. The whole of Ghana had been hooked on to the national grid and Akosombo was also supplying power to La Cote d’Ivoire, Togo and Benin. There was therefore more demand for electricity than VRA could produce, forcing the Authority to put more reliance on the more expensive thermal generation.

It was at this time that the NPP Government took two disastrous policy decisions:

(i) At a time when the total production of electricity could not meet the demand – what with the whole country now connected to the national electricity grid and Cote d’lvoire, Togo and Benin all taking supplies from Ghana – the Ghana Government decided that VALCO should come back on stream;

(ii) Since VALCO’s operations would not be profitable if it paid the same price for electricity as all other consumers, the NPP Government negotiators incompetently agreed that VALCO should pay US$2.7 mills/kwhr. A mill is 1/100 of a cent, so translated into cedi terms, it means VALCO pays ¢595.0 for every kilowatt-hour of electricity supplied to it by VRA whilst it cost VRA ¢256.7 to produce that quantity of electricity.

This is where the VRA’s losses have come from, and hence the need for a state subsidy.

In our April 28 – May 1, 2006, Vol 12 No. 57 edition, we carried a Front Page Comment titled, "VRA is Broke".

In that Comment, we provided evidence to the effect that VRA, once the flagship of Ghanaian corporate business, is broke and may be declared bankrupt. We opined in that Comment that in 2005, VRA posted an operating loss in income of ¢727 billion compared to an operating profit of ¢437 billion in 2004.

We attributed this poor performance of VRA to the cost of production of power being much higher than the selling price of power to VRA’s customers. We provided evidence to show that for every kilowatt-hour (kwhr) of energy sold to Valco, VRA subsidised Valco to the tune of ¢455/kwhr or US4.8 cents/kwhrs.

We stated that with Valco back on stream, the mix of VRA power had shifted to thermal power being utilised as base load whilst the cheaper hydropower was now a supplementary power load. We stated that there was no need for Valco to be brought back on stream at a time when crude oil prices were constantly spiralling upwards.

We at ‘Ghana Palaver’ thought the Government and VRA had paid no heed to the issues we raised. But apparently, we were mistaken for on 2nd June 2006, the Chief Executive of VRA, Mr. Joshua K. Ofedie, wrote a letter to the Minister of Finance and Economic Planning titled, "Impact of Energy Supply to Valco on Financial Situation 2006".

In this letter, the VRA stated that it had "further reviewed our coverage cost of service in the light of prevailing cost of fuel and also the supply mix required to meet Valco demand". Based on crude oil price at end of May 2006 of about US$60/bbl, VRA determined that its average cost of power production was ¢595/kwhr or US6.27 cents/kwhr.

Meanwhile, VRA was selling power to Valco at ¢256.5/kwhr or US2.7 cents/kwhr. Thus for every kwhr of power sold to Valco, VRA incurred a loss of ¢339/kwhr or US3.57 cents/kwhr.

In 2005, VRA supplied Valco 25 Gwhr of power and lost ¢87.88 billion or US$9.25 million in that transaction.

In 2006, VRA is required to supply Valco 1,240 Gwhr of power. The VRA is expected to lose ¢420.6 billion or US$44.27 million in this transaction also.

For the years 2005 and 2006 therefore, VRA is losing ¢508.45 billion or US$53.52 million in its dealings with Valco.

According to the VRA Chief Executive, the "additional cost of supply to VALCO would be spread evenly over all consumers" and that the under recovery of additional burden imposed by VALCO on the Bulk supply Tariff (BST) is ¢787.08 billion or US$82.85 million for ECG and ¢119.23 billion or US$12.55 million for 2006 alone. As a result of VRA’s under recovery of tariffs from VALCO, VRA in 2006 alone will lose ¢1.41 trillion or US$148.92 million. For 2005 and 2006, VRA loses as a result of power sales to Valco will amount to ¢1.50 Trillion or US$158.17 million.

Following this letter of gloom and doom from the VRA, the NPP Government in its Supplementary Budget Estimates presented by the Minister of Finance and Economic Planning on 13th July 2006 states at page 110, paragraph 443 that: "subject to reconciliation of data between VRA and Government, an amount of between ¢274.4 billion and ¢320 billion is earmarked to be allocated to the Ministry of Finance and Economic Planning to be used as compensation to VRA for the difference in costs of generation and sale of power to VALCO".

In simple English, what the Finance Minister is saying is that VRA has subsidised VALCO to the tune of ¢1.50 Trillion, and that ¢320 billion of the additional resources of ¢4.28 trillion expected from the Multilateral Debt Relief Initiative would be used to subsidise VALCO’s operations.

This subsidy of ¢320 billion to VALCO, amounting to wilfully causing financial loss to the State, could be used to build schools, hospitals, and provide good drinking water to many of our villages and citizens.

A number of issues have still to be resolved:

(i) The VRA’s subsidy to VALCO is ¢1.5 Trillion and Government is absorbing only ¢320 billion. When will the outstanding balance of ¢1.18 Trillion be paid to VRA to save the Authority from collapse?

(ii) If Government does not obtain additional resources in future, how will VALCO’s indebtedness to VRA be liquidated?

(iii) Is the Ghanaian taxpayer going to be saddled with additional taxes to cater for VRA’s subsidy to VALCO permanently?

(iv) How can the disparity between the cost of power to VALCO and revenue from power sales be bridged since VALCO would not like to pay more than the ¢285/kwhrs or US3.00 cents/kwhr for power it has negotiated with the NPP Government whilst the production cost of power is over ¢700/kwhr?

(v) If this disparity cannot be bridged, does it mean that tariffs to domestic customers are going to be raised to bridge the gap?

(vi) In subsequent years, as VALCO’s power requirements increase, VRA’s subsidy to VALCO will also increase. How do we as a nation ensure that VRA does not collapse?

(vii) VRA cannot continue to subsidise VALCO, another corporate entity, in such large amounts in perpetuity and hope to survive.

Finally can some one tell Ghanaians the wisdom in reopening VALCO at this time? And does President Kufuor and his Government realise that whoever negotiated this deal with Valco has wilfully caused financial loss to the State amounting to Trillions upon Trillions of cedis?

We reproduce below the VRA Chief Executive’s letter to the Minister of Finance and Economic Planning, which speaks for itself.

Russia's SUAL, Venezuela's CVG mull aluminum production deal

RIA Novosti, Russia 18:49 | 27/ 07/ 2006

MOSCOW, July 27 (RIA Novosti) - Siberian-Ural Aluminum Company [RTS: SUAL] and Corporacion Venezolana de Guyana (CVG) will prepare a feasibility study for integrated industrial aluminum production in Venezuela, the Russian company's press office said Wednesday.

The companies signed a letter of intent to prepare a feasibility study and a financial substantiation plan for full-cycle aluminum production in Venezuela, from the extraction of raw materials to the rollout of high added-value products.

The parties signed the document during Venezuelan President Hugo Chavez's visit to Russia.

The feasibility study will focus on prospecting, mining, transportation, and processing of bauxites, and the production of alumina, primary aluminum, and high added-value aluminum products.

SUAL has enterprises in nine Russian regions and in Ukraine, and annually mines over 5.4 million metric tons of bauxite, some 2.3 million metric tons of alumina, over 1 million tons of primary aluminum, and about 60,000 metric tons of silicon. It also manufactures aluminum products, including foil, wire, and wheel rims, and exports 80% of its production.

Century Aluminum workers reject contract, plan strike (3:10 pm)

Charleston Gazette, WV July 28, 2006

Joe Morris, Business Editor

Union workers at the Century Aluminum of West Virginia Inc. plant in Ravenswood have rejected the company's contract offer and intend to go on strike next week.

Members of United Steelworkers' Ravenswood local voted 299 to 218 against the Century offer, said Eli Morris, the local's grievance chairman. The union will issue a 72-hour strike notice Saturday morning, according to Morris.

The union represents 580 of the plant's 680 workers, and they have been working under an extension of a contract that was to expire on May 31.

Earlier this month, negotiators had agreed to meet with federal mediators in an attempt to broker an agreement. Rank-and-file members had been voting all this week by mail on the offer that resulted from those talks.

Health-care benefits appear to be the sticking point, but both sides have refused to discuss details of the contract dispute.

Alcoa sees global Al, alumina deficit by mid-2007 - Regional

BNamericas, Chile Friday, July 28, 2006 18:31 (GMT -0400)

The worldwide alumina and aluminum markets are slated to be in deficit by mid-2007, Franklin Feder, president for Latin America of US aluminum producer Alcoa (NYSE: AA) told BNamericas.

"There is greater demand than supply," Feder said during a brief interview at the 61st annual congress organized by Brazil's metallurgy and materials association ABM in Rio de Janeiro.

Feder declined to comment on how big the deficit would be for either product.

"There is an accelerated demand and few plants starting production," he added.

Alcoa announced last year a US$1.6bn investment plan for its primary metal production operations in Brazil.

Pittsburgh-based Alcoa has primary aluminum, fabricated aluminum and packaging operations in Brazil plus a bauxite mine in Jamaica. In Latin America, the company is also active in Argentina, Colombia, Peru, Uruguay and Venezuela.

By Roberta Pregnaca,

ALUMINUM FINANCING - Rusal raises US$2.6 billion

Canadian Mining Journal, Canada - Sunday, July 30, 2006

MOSCOW - RUSAL, the world's third largest aluminum producer, has closed a record-breaking syndicated credit facility. The loan has been oversubscribed, with a total order book over US$2.6 billion, substantially exceeding the initial mandate of US$1.5 billion, following strong demand from a wide range of international banks.

The funds will be used to refinance Rusal's existing debt, support the company's capital investment program, and for general corporate purposes.

The facility for Rusal is the largest syndicated loan for a non-oil private corporate in Russia to date. It also represents one of the largest-ever aluminum pre-export financings in the world, and is one of the largest international financings in Russia in 2006.

Rusal ( has headquarters in Moscow and operations in nine regions of Russia and 13 foreign countries. It produces approximately 2.7 million tonnes of primary aluminum and alloys, or 75% of the Russian output. See also CMJ August/September 2004 for background on the company.

Century Aluminum closing facility after strike notice

San Jose Business Journal - 9:04 AM PDT Monday 31-Jul-2006

Century Aluminum Co. said Monday its union has presented a strike notice, and the company is in the process of shutting down its Ravenswood, W.Va., facility.

Monterey-based Century (NASDAQ:CENX) said the company is also notifying customers and suppliers who will be effected if a strike occurs.

On Saturday, the United Steelworkers union gave the company a 72-hour strike notice after ongoing contract negotiations failed.

The company said the action could put the future of the West Virginia operation in jeopardy.

Century Aluminum Co., the parent of Century Aluminum of West Virginia, owns primary aluminum capacity in the United States and Iceland, as well as an ownership stake in alumina and bauxite assets in the United States and Jamaica.

Alcoa Secure 5 Year Power Deal for Washington Aluminum Smelter 31-Jul-2006

Alcoa announced today that it has secured power in the open market to operate one potline at its Intalco Works aluminum smelter in Ferndale, Wash., with the intention of operating the plant for five years by using benefits provided in a recent agreement with Bonneville Power Administration (BPA).

"This agreement has helped us build a bridge until 2011 when we hope to be able to once again purchase cost-based BPA power like other key industries in the Pacific Northwest," said Alan Cransberg, President, Global Manufacturing, Alcoa Primary Products. "A coalition of employees, local and state government officials, community leaders and the BPA has worked together to be part of this solution that will enable Intalco Works to continue operating past October 2006."

The BPA agreement signed in June provides aluminum companies in the Pacific Northwest with financial benefits to help reduce the cost of open market power purchases made after the current BPA contract expires in October. Alcoa has since been able to secure enough power to continue operating Intalco Works at 90,000 metric tons per year (mtpy), which is a third of its capacity.

"A number of our key stakeholders have come together to help support the 450 family-wage jobs at this smelter," said Mike Rousseau, Alcoa Intalco Works plant manager. "The total economic impact of Alcoa's operations in Washington amounted to $210 million in 2005, and we'll be able to continue to positively contribute to the state's economy because numerous people in our community and region have worked together on this issue."

Alcan Lays Cornerstone of US$35 Million Slovakian Aluminum Extrusion Plant, Germany 31.07.2006 20:07:00

LEVICE, Slovakia, July 31 /PRNewswire/ --

- Investment Strengthens Company's Presence in Eastern Europe

Alcan Extruded Products, a business unit of Alcan Engineered Products, today laid the cornerstone of its new aluminum extrusion plant in Slovakia. The site's new production capacity is expected to come on stream in the first half of 2007.

"Today's symbolic cornerstone ceremony not only underscores Alcan's presence in Slovakia, but also the key role this new facility will play in Alcan Extruded Products' long-term strategy," said Michel Jacques, President and Chief Executive Officer, Alcan Engineered Products. "This US$35 million investment further improves Alcan's position in meeting Eastern Europe's growing demand for soft alloy extruded products," he added.

The new plant will operate two aluminum extrusion press lines and ultimately employ approximately 200 people.

"This facility represents a tangible commitment to Alcan Extruded Products' customers and to supplying superior solutions for their needs," said Reinhard Fleer, President, Alcan Extruded Products. "Building on Alcan's successful experience at its Decin facility in the Czech Republic, the Slovakian site strengthens Alcan's long-term position in soft alloy extruded products in Eastern Europe," he added.

Levice's Mayor, Stefan Misák, and other local representatives attended the ceremony. The investment will also contribute to the region's economic development through services provided to Alcan by local companies. These services will include logistics, transportation, construction, engineering, and consulting.

With a focus on specialty aluminum products, Alcan Extruded Products is a key player in Europe, with a footprint that extends into Eastern Europe and China. The business unit employs approximately 3,000 people across nine aluminum extrusion facilities in five countries.

RUSAL Commissions Fifth Boiler at Friguia Bauxite and Alumina Complex

Russia Newswire (press release), Russia - 31-Jul-2006

MOSCOW (RNWire) — RUSAL, the world's third largest aluminium producer, has announced the start-up of the fifth boiler in the thermoelectric station at the Friguia bauxite and alumina complex in Guinea. Total investment into the project to date is over US$20 million.

The construction and commissioning of the fifth boiler are part of a modernisation programme aimed at expanding capacity of the facility that was acquired by RUSAL in April 2006.

The three-year expansion programme includes modernisation of the existing production systems, installation of new equipment and expansion of the bauxite mine. In addition, RUSAL is investing heavily in the regeneration of local infrastructure including red mud disposal, waste disposal plants, highways and railways and also the reconstruction of objects of social importance. The cost of the project will total over US $300 million and once completed, it is expected to almost double the output from the refinery.

The launch of the new boiler will ensure greater reliability of all production processes at the alumina refinery in the areas of steam supply and generation of electrical energy. Moreover, the project is of significant local importance - the thermoelectric station operating at the plant is the only one in Guinea that generates both electricity and water and serves the whole city of Friguia as well the production plant.