AluNews - June 2006

Union, Alcoa reach contract agreement

Joliet Herald News, IL 06/03/06, The Associated Press

PITTSBURGH — Thousands of union workers would receive annual wage increases but would have to start paying health care premiums under a tentative four-year contract with Alcoa Inc., the United Steelworkers said Friday.

The agreement reached in St. Louis late Wednesday, less than two hours before an existing contract was due to expire, averted a strike by about 9,000 workers at 15 of the aluminum company's plants nationwide.

The earlier contract has been extended to allow the union to inform its members of the details of the new agreement and organize a vote. The workers will receive a $1,500 bonus if the deal is ratified.

"Overall, we feel like it's a pretty decent agreement, especially after what management was coming after in the front end," said Howard Scott, a United Steelworkers spokesman.

Alcoa, the world's largest aluminum producer, had been pushing for a cost-sharing program offering employees a choice of five health plans, which "threatened to break down any centrality to the system," he said.

The company agreed to a single plan that will cost employees about $20 a week, Scott said. It also dropped a proposed two-tiered benefits plan, giving new hires the health plan and a pension rather than just a 401K.

Union workers will get annual pay raises, including a 2.5 percent increase in 2006 and a 2 percent hike in 2007, according to a United Steelworkers statement.

The union accepted a cap on retiree benefits, but negotiated with Alcoa to create a multimillion dollar fund that would cover some retiree medical expenses such as medicine.

"Alcoa's a very wealthy company," he said. "If they were to get away with doing this sort of thing to workers, nobody's safe. They genuinely can afford it."

Kevin Lowery, an Alcoa spokesman, said establishing the fund for retiree health costs was "a way to try to come up with a creative way to help address their concerns." He said he did not know the amount of the fund.

"We view this as a victory for everyone," he said.

Lowery said the cost-sharing aspect of the health plan for union workers was important because it would instill good consumer behavior.

"It makes people more informed when they make their health care purchase decisions," he said.

The union workers represent about 20 percent of the company's U.S. employees, but only about 7 percent of Alcoa's global work force of 129,000.

Before talks began last month, Alcoa officials said the company's managers were preparing to take over union jobs at 15 of its U.S. plants if the workers went on strike. Industry analysts said a strike would have little effect on the company's operations, citing its international production capacity.

The new pact covers workers at plants in Arkansas, Indiana, Iowa, Kentucky, New York, North Carolina, Virginia, Tennessee, Texas and Washington.

BPA finalizes plan to help aluminum companies

Coos Bay World, OR Friday, June 2, 2006 11:50 AM PDT

By Nicholas K. Geranios, Associated Press Writer

SPOKANE, Wash. (AP) - Aluminum mills in Washington, Oregon and Montana will get millions of dollars from the Bonneville Power Administration to buy cheap electricity over the next five years, the federal power marketing agency says.

The deal also provides electricity for Port Townsend Paper Co. in Washington state, the BPA said.

Mike Hansen, a BPA spokesman, said Thursday the deal will improve chances that the aluminum smelters, battered by high electricity prices, will operate in the future.

Beginning this fall, BPA will provide $59 million per year to the aluminum companies that will allow them to buy up to a daily average of 560 megawatts of electricity for a year on the open market. The BPA for decades provided electricity directly to the aluminum companies, but now wants to save its power for other customers, such as public utility districts.

The BPA will sell 17 average megawatts of electricity directly to Port Townsend Paper Co.

"This decision gives the aluminum companies and their employees a fighting chance to continue operations, while not unduly burdening other regional consumers," said Steve Wright, BPA administrator in Portland.

The money will go to Alcoa Inc., which operates aluminum mills in Wenatchee and Ferndale, Wash.; Columbia Falls Aluminum Co. in Montana; and Golden Northwest Aluminum Co., which operates mills in The Dalles, and Goldendale, Wash.

Alcoa will receive the value of up to 320 average megawatts; Columbia Falls will receive up to 140 average megawatts; and Golden Northwest will receive up to 100 average megawatts.

Sen. Conrad Burns, R-Mont., a member of the committee which oversees the BPA, said the deal has been in the works for months.

"I am pleased that BPA has offered an acceptable contract to (Columbia Falls), a plant which has purchased power from BPA for over 50 years," Burns said. "This is welcome news for the more than 150 employees..."

Haley Beaudry, a spokesman for the Columbia Falls plant, said the deal gives the smelter a chance to continue operating.

Companies must use the BPA money to make aluminum, not to buy and resell power, Hansen said.

The BPA is a quasi-governmental agency that markets power generated at the region's many federal hydroelectric dams.

Wright said the aluminum companies may not use the $59 million to drive their cost of electricity below the price paid by BPA's customers.

The BPA was not required to help the aluminum companies, but the decision recognized that the companies have been steady customers of BPA for decades, Hansen said.

The companies can begin receiving the money on Oct. 1.

If the aluminum companies take their full allocation of 560 average megawatts of benefits, BPA's public utility customers will see about a $1 per megawatt-hour increase over what their costs would have been absent the benefit, the BPA said. The wholesale rate for utilities is approximately $30 per megawatt-hour. ---

On the Web: BPA Web site:

Century Aluminum Company Icelandic Subsidiary Signs Energy MOU for Helguvik Greenfield Smelter

Market Wire (press release) - Jun 1, 2006

MONTEREY, CA -- (MARKET WIRE) -- 06/01/2006 -- Century Aluminum Company (NASDAQ: CENX) announced today that Nordural ehf., a wholly owned subsidiary, has signed a memorandum of understanding to purchase electrical energy for its primary aluminum reduction project in Helguvik, Iceland. The agreement was reached with the two major Icelandic geothermal power producers, Hitaveita Sudurnesja and Orkuveita Reykjavikur.

Under the agreement, power will be supplied to the new Helguvik plant in stages, beginning with an initial phase of up to 250 MW, which will support production capacity of up to 150,000 metric tonnes per year (mtpy). Hitaveita Sudurnesja will provide up to 150 MW in this initial stage, and Orkuveita Reykjavikur will supply up to 100 MW. Electricity delivery for this first phase is targeted for 2010. The MOU provides for a total of 435 MW, which will ultimately provide power for a 250,000 mtpy facility. The agreement is subject to the satisfaction of certain conditions.

"This agreement is a major step forward for our development plans at Helguvik," said Century chief executive officer Logan W. Kruger. "We continue to be very pleased with the business environment in Iceland and the strong support we have received from the local community, government officials and Hitaveita Sudurnesja and Orkuveita Reykjavikur. At Helguvik, we will continue our policy of developing our reduction plants in well-defined stages to ensure that our projects proceed in harmony with the best interests of the people and the economy of Iceland."

Century Aluminum Company owns and operates a 244,000 mtpy primary aluminum reduction plant at Hawesville, Kentucky; a 170,000 mtpy plant at Ravenswood, West Virginia; and a plant at Grundartangi, Iceland that is in the process of being expanded from 90,000 mtpy to 220,000 mtpy by the fourth quarter of 2006. The company also owns a 49.67-percent interest in a 222,000 mtpy reduction plant at Mt. Holly, South Carolina. Century also holds a 50-percent share of the 1.25 million mtpy Gramercy Alumina refinery in Gramercy, Louisiana and related bauxite assets in Jamaica. Century's corporate offices are located in Monterey, California.


Michael Dildine


Market Wire (press release) - Jun 1, 2006

Speculation over BHP, Rio bid for Alcan

Thursday Jun 1 15:37 AEST

Speculation BHP Billiton or Rio Tinto could make a bid for aluminium giant Alcan has resurfaced but analysts say the real target could be the world's biggest producer Alcoa.

Canadian reports have quoted investment bankers who say the mining giants have done modelling on bids and have been approached by bankers to set up deals.

Neither miner would comment on what they said were rumours and Alcan has also dismissed the reports as speculation.

Nonetheless, there is a growing expectation in the market that a bid for either Alcan or Alcoa could come soon, either from one of the Anglo-Australian miners or from Swiss-based Xstrata or Brazil's CVRD.

Local analysts say both BHP Billiton and Rio Tinto need to do something to boost the scale of their aluminium operations.

One said both companies had ambitions to be bigger in aluminium but the best way to achieve that would not be to go after Alcan, the second biggest producer, but to target Alcoa and its joint venture operations with local miner Alumina.

Speculation about an Alcan bid could be a smokescreen for a tilt at Alcoa, the analyst said.

Shaw Stockbroking analyst John Colnan said both BHP Billiton and Rio Tinto would be cashed up enough from the commodities boom to launch a bid for Alcan, which has a market capitalisation of around $US19 billion.

"Either would have the capacity," he said.

"Both of them are generating huge amounts of cash at this part of the cycle but Rio (Tinto) has a traditional stance of divesting at the top of the cycle, not investing."

Mr Colnan said the miners would both be interested in the upstream bauxite mining and alumina refining operations of Alcan but may not be so keen on the energy-hungry aluminium refining businesses.

At 1519 AEST on Thursday BHP Billiton had risen 33 cents to $28.58 while Rio Tinto had climbed $1.30 to $79.40.

©AAP 2006

Rival Mining Giants Weighing Bids for Alcan?

Resource Investor, VA - May 31, 2006

By The Canadian Press

TORONTO (CP) -- There is speculation that two of the world's largest mining companies are weighing a C$20-billion-plus bid for Alcan Inc.

The Globe and Mail quotes investment banking sources as saying Rio Tinto PLC [NYSE:RTP] and BHP Billiton Ltd. [NYSE:BHP] are both eyeing the Montreal-based aluminium giant.

Neither company has made a formal overture to Alcan [TSX:AL; NYSE:AL], which is the world's second-largest aluminium producer.

The speculation over Alcan comes in the midst of a recent run of bidding wars for Canadian companies such as Inco [TSX:N; NYSE:N] and Falconbridge [TSX:FAL.LV; NYSE:FAL].

The boom in base metal prices has set the world's largest mining companies on a buying spree.

Alcan has 65,000 employees, with 10,600 in Canada, and sports a market capitalization of $19-billion.

''BHP and Rio Tinto have modelled the Alcan takeover, and they've been pitched by bankers to do the deal. But I don't think Alcan is actually in talks with anyone,'' one investment banker with ties to Alcan told the Globe. But he added: ''If either bought Alcan, they would sell the packaging business.''

However, analysts and investment bankers cautioned that a takeover would face a number of hurdles - including regulatory scrutiny - and might not make strategic sense for the buyers.

''I see no reason why Rio Tinto should bid for Alcan,'' said London-based analyst Nick Hatch at Investec Securities. ''I see no real advantage in bidding for an aluminium asset when you already have a portfolio of aluminium and bauxite reserves.''

The financiers said any takeover proposal would likely need to be friendly because Alcan struck a sweet deal with Hydro-Quebec for the electricity it uses in refining, and a hostile buyout could lead to the cancellation of that contract with the government-owned utility.

Both BHP and Rio Tinto are the products of major mergers in the past few years, and both companies are now flush with cash and looking to become price-setting market leaders in all their major business lines.

London-based BHP is the world's largest mining company, although a relatively minor player in aluminium, and has a $76-billion capitalization and shares that trade at 13.9 times earnings.

Rio Tinto is the second-largest mining company, with a presence in most base metals, a $58-billion market capitalization and shares that trade for 11.4 times earnings. (Globe and Mail)

© The Canadian Press 2006

Canadian bauxite mine in Guyana temporarily closing due to Chinese competition

Brooks Bulletin, Canada Sunday, June 04, 2006

GEORGETOWN, Guyana (AP) - Cambior Inc. (TSX:CBJ) will shut down its bauxite mine in Guyana for July and August due to stiff competition from Chinese firms, officials said.

The Montreal-based company said its operation in Linden, a mining town about 115 kilometres south of Georgetown, would temporarily close because Chinese firms were able to produce high-end bauxite at a lower cost. Cambior will lose about $4 million to $5.5 million Cdn during the shutdown, the company said Saturday in a statement.

Some 500 workers are to be temporarily laid off this week, while another 61 have been dismissed in recent weeks, the statement said.

Guyana and China are among a few countries that produce a high-grade bauxite for aluminum used in aircraft and industrial construction, and to make kitchen utensils.

Cambior has invested more than $24 million reviving bauxite mines in Linden over the past two years. It closed its gold mine in western Guyana last year after reserves ran out following 12 years of mining.

Cambior has stockpiled large amounts of bauxite ore and could resume work before September if price levels improve, said company spokesman Peter Benny. He also blamed high fuel prices for driving up costs.

Cambior is a mid-sized Canadian gold miner with its main operations in Quebec and South America.

© The Canadian Press, 2006

Rio Tinto sees possible deal with China supporting Weipa bauxite expansion, NY 06/06/06 02:44 am (GMT)

SYDNEY (AFX) - Rio Tinto is looking into the possibility of a bauxite for alumina deal with a Chinese alumina producer to underpin a 400 mln usd expansion of its world class Weipa bauxite project in north east Australia, the mining group told analysts during a tour of its Australian project sites.

The dual-listed Anglo-Australian miner told the analysts it wants to build on the outstanding wholly-owned resource at Weipa where reserves can support the current 16.5 mln metric tons a year production rate for at least 70 years.

The move comes as Rio Tinto is considering whether to proceed with a second stage expansion of its Comalco Alumina refinery at Gladstone on Australia's north-east coast.

The analysts said the stage two expansion may be shelved, joining a growing list of alumina projects burdened down by the weight of escalating capital expenditure.

Credit Suisse analysts said exporting Weipa bauxite to China would be a logical step as alumina refineries there are cheaper to build and have lower operating expenses.

At same time bauxite mining in China is higher-cost and fragmented.

"It seems a logical conclusion - why compete with a country that enjoys lower capex/opex? Why not instead be the supplier of choice for the raw material, in this case bauxite," they said in a research note.

Rio Tinto has conceptual plans to lift Weipa's output to 25 mln tons a year at a cost of 400 mln usd.

The company told analysts it is looking at a potential bauxite for alumina swap, using the long life, low cost Weipa resource and swapping it at a cost for alumina.

The most likely partner would be a Chinese alumina producer such as Aluminum Corp of China Ltd (Chalco).

Chalco bauxite deal near

Courier Mail, Australia June 09, 2006

Liliana Molina

THE team behind the biggest industrial project in Queensland's history are in Beijing getting final approval for a $2.9 billion bauxite mine at Aurukun in the far north of the state.

Senior members of the Aluminium Corp of China (Chalco), China's biggest aluminium producer, currently are getting their bid ticked off by the company's board which is expected to meet with Premier Peter Beattie when he visits China later this month.

Chalco is due to hand in its final bidding document to the State Government by the end of this month.

The project has an estimated 560 tonnes of bauxite reserves and the company's provisional proposal to the government includes a 2.1 million tonnes per annum refinery in either Townsville, Gladstone or Bowen.

Bauxite is refined to make alumina which is smelted to make aluminium metal used in everything from cars and planes to construction materials.

The final touches come as Rio Tinto announced the planned expansion of its Comalco alumina refinery in Gladstone would be put on hold as it coped with operational issues, a high Australian dollar and faltering alumina prices.

A Comalco spokesman said the company was still concentrating on getting the first stage of 1.4 million tonnes running at full capacity.

It has been running at above 90 per cent of its 4.2 million tonnes design capacity.

Analyst Mark Pervan of Daiwa Securities yesterday warned more alumina processors could follow Rio Tinto's lead to manufacture a more favourable price for producers.

Some analysts have forecast prices to fall as much as 14 per cent as supply is increased at a faster rate than expected.

Macquarie Bank last month forecast alumina prices to fall as low as $500 a metric tonne by the end of the year after surging 44 per cent last year.

The shortfall and associated cost hikes for Chinese manufacturers sent them scurrying around the world to secure supplies of bauxite.

Chalco last month warned demand from China was likely to rise 14 per cent per year to reach 13.5 million metric tonnes by 2010 to keep up with economic growth and it was likely to be able to meet domestic demand by then.

"(A further faIl) may not occur if alumina producers are clever and manipulate between spot and contract markets," Mr Pervan said.

"Everyone is thinking the price is going to come off but if there are supply stoppages people will be revisiting supply and price numbers."

He also warned the upcoming hurricane season in the bauxite rich Jamaica and Gulf of Mexico region could affect supply in the next few months.

RUSAL begins search for bauxite in Guyana

Jamaica Observer, Jamaica Friday, June 09, 2006

Al Edwards

Private Russian company RUSAL, the second largest producer of primary aluminium in the world and the largest in Russia has began its search for fresh bauxite deposits in Guyana, Caribbean Business Report understands.

Guyana privatised bauxite mines in Berbice, which was run by the government-controlled Aroaima Mining Company (AMC).

This move allowed AMC to sell the mines to RUSAL's subsidiary Bauxite Company of Guyana Inc for US$22 million leaving the Caribbean country's government with a 10 per cent stake. The Russian company intends to mine the precious commodity for the Nikolaevsky Aluminous Plant in the Ukraine.

Guyana's President Bharrat Jagdeo expects up to a US$1-billion investment in the country's sector and hopes that RUSAL's presence will attract other mining companies to invest in the country. RUSAL says it should extract 2.5 million metric tons of bauxite a year, which will boost Guyana's bauxite mining by 80 per cent.

The Caribbean is expected to benefit from this bauxite-mining bonanza. Of the 2.5 million metric tons, 350,000 metric tons will be shipped to a smelter in the Ukraine smelter in Nikolaevsky with the first shipment expected later this year. RUSAL expects to send one million tons of bauxite back home in 2008. The remainder will be earmarked for the Caribbean, Mediterranean and Black Sea regions.

In order to ship the extracted commodity back to northern Europe, RUSAL has engaged the services of the German shipping company Oldendorf Carriers.

RUSAL produces 10 per cent of the world's aluminium and operates four smelters in Bratsk, Krasnoyarsk, Novokuznetsk and Sayanogorsk. The Russian billionaire Roman Abramovich who bought Chelsea Football Club was a major shareholder in RUSAL until he sold his shares in the company last year for 7.5 billion pounds.

RUSAL has been keen to exploit bauxite mining opportunities in South America for some time. It has tried since 2003 to successfully conclude an agreement with the government of Venezuela to acquire rights to mine in that country but met a dead end and instead the company turned to Guyana.

RUSAL has also sought to take up positions in the Caribbean. Back in 2004 it made an aggressive US$320-million bid for Kaiser's 65 per cent stake in Alpart's Jamaican-based aluminium refinery but that effort failed.

Bauxite is Guyana's fourth largest earner of foreign exchange after sugar, gold and rice.

Iran Aims to Increase its Aluminum Production Service: Economy, Iran 06-11-2006

TEHRAN, June 11 (ISNA)-According to the preplanned programs this year Iran will produce 220 thousand tons of Aluminum which for this 440 thousand tons of Alumina is required.

This is while the alumina production in Iran up to the end of its Fourth Development Program will only reach 280 thousand tons therefore for supplying the required amount Iran has to import this substance.

Iran for removing this obstacle plans to construct a one million ton capacity alumina production industrial unit.

The bauxite required for this industrial unit is mostly to be supplied by Guinea.

Iran through this program aims to produce 500 thousand tons of Aluminum.

Students riot in eastern Guinea, strike continues

Reuters South Africa, South Africa Sun Jun 11, 2006 2:41 PM GMT

By Saliou Samb

CONAKRY (Reuters) - Riots erupted in the eastern Guinean town of Kindia after a student was killed by a lorry, underscoring tensions in the West African country shuttered by a general strike to protest rising poverty.

"The army and police restored order after the uprising by the youths," senior police official Abou Camara said late on Saturday. "Some warning shots were fired and there were some truncheon blows dealt out."

Another police source, who asked not to be identified for fear of disciplinary action, said there were at least six wounded students.

The indefinite strike to protest sharp increases in the cost of basic good began on Thursday. It was the latest action by powerful unions spearheading the resistance to ailing President Lansana Conte.

Once a bulwark of stability in West Africa, Guinea is struggling with rampant corruption, a collapsing economy and a powerful but fractious military. Analysts fear a dangerous power vacuum if Conte -- a diabetic in his 70s -- were to die.

The strike closed businesses and government offices across Guinea but has not had a serious impact so far on the crucial bauxite industry and on Sunday some private businesses in the capital Conakry opened their doors.

There is growing discontent, however, on campuses after the main teachers union announced year end exams this week have been cancelled because of the strike.

The unions have demanded the government reverse a 30 percent increase in fuel prices announced in mid-May, which it said obliterated wage increases set a month earlier. A litre of gasoline costs 5,500 Guinean francs in a country where more than half the population lives on less than $1 a day.

Union leaders at the Compagnie des Bauxites de Guinee (CBG) -- the world's largest producer of the ore used to make aluminium -- decided last week not to follow the strike call due to the strategic importance of their sector.

The CBG is controlled by the world's largest aluminium producers, Alcan and Alcoa.

© Reuters 2006. All Rights Reserved.

Alcan's Evans Says Aluminum May Fall 20% as Mine Output Gains

June 12 (Bloomberg)

Aluminum prices that rallied to the highest since at least 1987 last month may fall as much as 20 percent next year because of rising mine output, Alcan Inc. Chief Executive Officer Richard Evans said.

A decline to $2,000 a metric ton from $2,500 now is ``not unrealistic,'' though demand will keep prices from falling much further than that, Evans said today in an interview at the company's headquarters in Montreal.

Aluminum has rallied 77 percent in the past three years. A weak dollar, high energy costs and sustained economic growth in China and India ``point to a higher level than the previous steady state, which was about $1,500,'' Evans said. He said he is comfortable with forecasts by analysts that aluminum will trade between $2,000 and $2,600 next year, he said.

Prices already have plunged 25 percent from $3,310 on May 11 on concern that rising global interest rates may slow economic growth and demand for metals. Central banks in Europe and Asia have raised rates, weakening investor confidence in commodities and companies that produce them.

Lower costs for alumina, the raw material derived from bauxite that smelters buy to produce aluminum, probably will undermine the price of the metal, Evans said.

Analysts are predicting the price of alumina for immediate delivery will fall about 50 percent to $300 a ton by next year as output rises, Evans said. Alumina is derived from bauxite ore. It takes two tons of alumina to make a ton of aluminum.

To contact the reporter on this story:

Christopher Donville in Montreal at

Alro close to merger with Alum

Bucharest Daily News, Romania 12-Jun-2006

Robert Comanoiu

Shareholders of the alumina producer Alum Tulcea could approve on July 10 the merger with Alro Slatina, Alum's main shareholder. Alro announced that the factory's shareholders would decide upon the merger on July 11, after an extraordinary session will be held. If a decision is not made then, another session will be held on July 12.

The merger was initially scheduled for last year but was blocked because a legal dispute between Alro and the Authority for the Recovery of State Assets (AVAS).

The aluminum producer Alro Slatina reported a 26.6 million euro profit for the first quarter of 2006, seven times larger than the same period of 2005, and a rising turnover from 96.2 million to 161.7 million euros.

Vice President of the Board of Directors Marian Nastase considers that the positive growth is based on the substantial price increase for aluminum on the international markets, which limited the negative influence of production costs rising.

"Compared to the previous year, prices have increased by approximately 300 dollars per ton due to the shortage of aluminum and aluminum alloys. Under these conditions the impact of increased production costs has diminished," said Nastase in a statement.

Alro's expenses went up during January-March 2006 by 25.5 million euros compared to the same period of 2005, the most significant increases being registered for electric energy and water supplies of 3.4 million euros.

Alro Slatina announced last week that it would invest 25 million dollars in new equipment used in the production process.

Last year Alro had a turnover of 446.5 million euros and a net profit of 32.6 million euros.

In January this year, Alro Slatina increased its participation with Alum Tulcea to 92.75 percent through the acquisition of a 67 percent stake for which nine million euros were paid. The operation was part of the vertical integration strategy in which Alro invested 27 million dollars so far, according to Alro vice president Marian Nastase.

Guyana seeks bauxite market-sharing deal with China

Caribbean Net News, Cayman Islands Wednesday, June 14, 2006

GEORGETOWN, Guyana (AFP): Unable to compete on the world market with cheap Chinese super-calcined bauxite, President Bharrat Jagdeo on Monday asked China to consider sharing the market with Guyana.

Competition from China is so fierce that Omai Bauxite Mines Inc. (OBMI), a Guyana-based bauxite company largely owned by Cambior Inc. of Canada, is closing for two months starting July 1 and will temporarily lay off its more than 500 workers.

"If we can reach some agreement with the Chinese ... then we may be able to secure the future of the calcined bauxite sale abroad," Jagdeo told a meeting of the workers who are set to be laid off from July to August.

OBMI is 70-percent owned by Canada's Cambior and 30-percent by the Guyanese government.

Mine officials say it is unprofitable to sell the aluminum ore below 150 dollars per tonne due to high production costs, including high fuel prices. China is selling bauxite at 110 dollars per tonne.

Jagdeo acknowledged that chances of a deal with China were slim.

"As you would recognize, it is the private companies that buy the bauxite not the governments abroad," he said.

The government has offered the laid-off workers 123 dollars monthly, and in exchange they will attend weekly computer classes.

OBMI also plans producing and selling more of a new product, Super Chemical Grade Bauxite (SCGB), being used mainly in water treatment.

Guyana to give stipend to laid-off bauxite miners at Cambior's Omai mine

CBC News, Canada 12:24:46 EDT Jun 13, 2006

GEORGETOWN, Guyana (AP) - About 400 bauxite miners in Guyana that have been temporarily laid off by Canadian mining company Cambior Inc. (TSX:CBJ) will receive monthly stipends from the government, an official said Tuesday.

The Montreal-based company will close its bauxite mine in the South American country for July and August due to stiff competition from Chinese firms, which are able to produce high-end bauxite at a lower cost, Cambior has said.

The government will provide workers for Omai Bauxite Mining Inc. the monthly national minimum wage stipend equivalent to $125 US or $139 Cdn to help them during the shutdown. To receive the funds, they must attend one day of computer classes each week, said presidential spokesman Robert Persaud.

Cambior will lose between $4 million US and $5 million US during the shutdown, the company has said.

Guyana and China are among a few countries that produce a high-grade bauxite for aluminum used in aircraft and industrial construction, and to make kitchen utensils.

Cambior has invested more than $22 million US reviving bauxite mines in Linden - a town 113 kilometres south of Georgetown - over the past two years. It closed its gold mine in western Guyana last year after reserves ran out following 12 years of mining.

Cambior has stockpiled large amounts of bauxite ore and could resume work before September if price levels improve, the company has said.

The mine company is 95 per cent owned by Cambior, with the rest held by the Guyanese government.

Cambior shares traded Tuesday at $2.83, down 14 cents, at the Toronto Stock Exchange.

© The Canadian Press, 2006

Russia's aluminum giant puts shady past behind it

No more bullets; now, it's financial probity

Montreal Gazette (subscription), Canada Tuesday, June 13, 2006

Trying to shake the image of the Russian industry's rock'em-sock'em past, aluminum giant Rusal is courting respectability in its bid to become the world's largest producer of the metal by 2013.

Adopting industry conventions and engaging in more public disclosure will help prepare the Moscow-based private company for a possible stock offering, Peter Finnimore, Rusal director of sales and marketing, said yesterday

But an initial public offering is not now "the favoured option," Finnimore said. "The business is strong at the moment, cash flow is solid and access to the debt market is probably a cheaper form of finance than going public at the moment."

Finnimore addresses the 11th World Aluminum Conference in Montreal today.

Also known as OAO Russian Aluminum, Rusal is controlled by billionaire Oleg Deripaska, whose meteoric rise to oligarchy status includes published accounts of his being threatened with a grenade launcher and allegations that he used death threats and fraud to build his empire.

Turf battles after the Soviet Union's collapse in 1991 were intense and included allegations of contract killings in the aluminum sector. When the dust settled, Deripaska, who is related to former Russian president Boris Yeltsin by marriage, was perched on top of what had been Russia's roughest industrial sector.

"It was a rocky time after perestroika and the fall of the Soviet Union. There is no question that it was pretty rough and tumble (10 or 15 years ago), but now it is a very, very different environment to operate in, a lot more stable, a lot more safe with a lot more investors' and customers' confidence," Finnimore said.

Even five years ago, for instance, Rusal was selling its aluminum to global traders "because the end-user wasn't prepared to take the risk of dealing with Rusal," he said.

"Today, we sell probably 85 to 95 per cent of our product directly to end-users," he said.

That "is a fairly good indicator of the confidence they have in Russia and Rusal in particular," he added.

Earlier in the day, Alcan Inc. CEO Dick Evans described Russia as something of a wildcard.

"Will Russia achieve the political and economic stability required to attract new large-scale investment? At this point, the trends are still hard to read," Evans said.

Rusal, which now describes itself as an aluminum and energy company, produced 2.7 million tonnes of primary aluminum in 2005 and its revenues reached $6.1 billion U.S.

Its assets include the world's two largest smelters, run on relatively cheap hydro power produced in Siberia. Two current joint ventures involve completing construction of dams left unfinished by the Soviet Union.

Acting on advice proffered by "a Big Four accounting firm," to make it more market-friendly, Rusal has moved some key offices outside Russia, said Finnimore, who, eight months ago, left Moscow to open an office in Cyprus, a recent addition to the European Union.

And in terms of corporate governance and public disclosure, Rusal is becoming more transparent, he said.

Last month, Rusal announced the appointment of two new board members known to the wider metals mining community; Andrew Michelmore and Horst Peters.

© The Gazette (Montreal) 2006

Rusal looking to expand in China (subscription), China 13-Jun-2006

Shanghai. June 13. INTERFAX-CHINA - Rusal, the world's second largest producer of primary aluminum, is surveying China for possible acquisitions to increase its foot hold in the increasingly important market.

Patrice L'Huillier, the director of Rusal's Finished Products Department, told Interfax during an interview that the company, Russia's largest aluminum producer, is trolling a seemingly eager Chinese marketplace for potential partners in both the aluminum and alumina sectors.

"We are researching a list of Chinese aluminum and alumina companies for likely opportunities of establishing a joint venture. Aluminum and alumina in China are equally important for us in the future," he said.

Since China is close to Russia and the demand here is strong, Rusal regards it as an ideal emerging market, L'Huillier said. He said the company is looking to shorten the distances between its smelters, raw materials and customers.

However, L'Huillier said it is still too early to tell when and with whom Rusal will partner.

But this will not be Rusal's first foray in China.

The company just acquired a cathode plant in April with an annual capacity of 15,000 tons in Linshi, in northeastern China's Shanxi Province. It plans to invest USD 3 mln to expand the plant's capacity to 25,000 tons.

All the products from the plant will be shipped back to Russia for aluminum production.

‘India’s aluminium consumption to increase at 8-9% per annum’

Navhind Times, India 13-Jun-2006

New Delhi, June 13: Driven by the continuous robust demand from the end-user segment, the aluminium consumption in India is expected to increase at 8-9 per cent, according to a study.

During FY 2006, the domestic aluminium market witnessed a growth in demand particularly from power, automotive and housing sectors and its consumption recorded an increase of 9.5 per cent in FY 2005.

In the country, the electrical segment has been the largest consumer of aluminium, accounting for 31 per cent of aluminium consumption, followed by automotive and building and construction segments, which are also poised to grow further. The current housing shortage is estimated to be around 19 million and industry experts forecast at least 7-8 million houses to be added every year, the study conducted by ICRA adds.

The study also sees a large growth potential for aluminium sector in India. "The current low consumption of aluminium in the country, besides the fact that India has the fifth largest bauxite reserves in the world, points to large growth potential for the sector," it says.

India’s per capita consumption of aluminium currently stands at 0.8 kg per annum, as compared to China (4 kg), and many other developing nations.

India is a major player in the aluminium sector, especially because of abundant bauxite reserves of 2.46 billion tonne (sufficient for 211 years of production), which makes the country one of the lowest cost producer of the metal in the world.

It accounted for 8.7 per cent of global bauxite production by producing 14 million tonne in 2004. However, production of aluminium in India aggregated 0.91 million tonne in 2005, accounting for 0.4 per cent of world.

After the strong increase in the prices of aluminium in 2005, the study further forecasts that prices of the metal will increase again in 2006, as world consumption exceeds production, leading to a decline in the stocks.

Global aluminium production, which has increased by 3.7 per cent during 2005 to 23.4 mt, is expected to up by 4 per cent during 2006, because of smelter capacity expansion in china and west asia.

On sensitivity of industry to government policies, the survey says, the reduction in the customs duties on primary and secondary forms of non-ferrous items, namely aluminium, copper, zinc and tin, and other base metals, from 10 per cent to 7.5 per cent by the government was a healthy step, which would keep check on a rise in prices.

"Government initiatives to boost the end user segment, like construction, power, automobiles, consumer durables etc, have been positive on demand front."

Novelis unveils new multi-alloy casting technology

Washington Business Journal, DC Atlanta Business Chronicle - 7:54 AM EDT Tuesday

Novelis Inc. has revealed a new process to simultaneously cast multiple alloy layers into a single aluminum rolling ingot -- technology the company called "game changing."

"Novelis Fusion" technology marks the first commercial production of multi-alloy aluminum ingots, according to Atlanta-based Novelis (NYSE: NVL).

"This is a game-changing technology," said Brian Sturgell, president and CEO of Novelis. "Engineers have tried for decades to cast multi-alloy ingots in a commercial environment. Novelis has now succeeded, demonstrating our ability to achieve -- and commercialize -- significant innovations that will enhance existing markets and permit development of new markets."

Novelis Fusion technology produces a high quality ingot with a core of one aluminum alloy, combined with one or more layers of different aluminum alloy(s). The ingot can then be rolled into a sheet product with different properties on the inside and the outside, allowing previously unattainable performance for flat rolled products and creating opportunity for new, premium applications.

"No longer will customers need to make trade-offs between core properties and surface properties in their aluminum sheet products," Sturgell said. "Now they can achieve the optimal combination of both. This technology positions Novelis to provide even greater support to our customers' success by helping them improve their current products and, more importantly, to develop a new generation of products with superior performance."

Novelis sees a potential market for the new technology in the automotive, architectural, building and construction, durable goods, electronics and transportation industries.

Russian smelter in grab for power

The Australian, Australia June 16, 2006

Andrew Trounson

RUSSIAN aluminium giant RUSAL is on the hunt for power projects in Queensland as it considers building an aluminium smelter in the state.

Power is key for aluminium - dubbed "congealed energy" because of the huge amount of power needed to smelt it - and RUSAL is believed to be looking at harnessing power from coal-seam gas or the proposed gas pipeline from Papua New Guinea.

Premier Peter Beattie met RUSAL chief executive Alexander Bulygin in Moscow yesterday to formalise an agreement to establish a joint working group to look at developing power projects in the state.

While the membership of the working group has yet to be finalised, former WMC boss Andrew Michelmore would be a natural choice. Mr Michelmore, who heads RUSAL's energy investment vehicle, was recently appointed to the company's board.

"The development of energy and aluminium projects based on RUSAL's competitive advantages will provide a significant impetus for industrial development in regional Queensland," Mr Beattie said.

RUSAL said the working group on power opportunities would form the basis for ongoing co-operation with Queensland in "exploring opportunities for the expansion of RUSAL's interests in Australia, the potential development of an aluminium smelter and the associated base-load generating capacity using alternative fuels."

RUSAL, the world's third-largest aluminium producer, is aiming to double its alumina and aluminium production by 2013, and is looking to diversify production beyond Russia.

RUSAL's aluminium production is now concentrated in Siberia, benefiting from abundant cheap hydro-electric power there, but sited thousands of kilometres from ports.

RUSAL is building a new 600,000 tonnes-a-year aluminium smelter in Siberia as part of a broader government-backed $US3.6 billion ($4.8 billion) hydro-electric project.

"Within the framework of our strategy we've been actively seeking new opportunities to produce globally competitive electric energy required for the construction of aluminium production facilities," Mr Bulygin said.

"We think Queensland has great potential for the establishment of additional energy generating capacity as the basis for the development of aluminium industry and related projects," he said.

A RUSAL smelter in Queensland would have a ready source of alumina feedstock on hand since RUSAL already has a 20 per cent stake in the Queensland Alumina Refinery in Queensland.

Chinese aluminium giant Chalco is also looking at possibly building an aluminium smelter in the state after signing a memorandum of understanding to develop the Aurukun bauxite deposit on Cape York.

RUSAL is owned by Russian billionaire Oleg Deripaska, one of the so-called oligarchs that emerged from the country's privatisation program in the wake of the collapse of communism.

Cambior Seeks Business Proposals From Alumina/aluminum Companies For Its Unit OBMI

Trading Markets, CA - Friday, June 16, 2006; Posted: 12:22 AM

(RTTNews) - Thursday Cambior Inc. (CBJ.TO, CBJ), a mining company, announced that it had mandated BMO Nesbitt Burns to solicit business proposals from parties involved in the alumina/aluminum business for developing metallurgical bauxite production in Linden, Guyana. The company also said that it was prepared to consider a partial or complete sale of its stake in OBMI as part of the deal.

The company said it has presently a 70%-equity position in OBMI, a private Guyanese company that owns or controls several bauxite deposits in the Linden region of Guyana. The Republic of Guyana owns the remaining 30%-equity stake.

The company said value of OBMI and its large high-grade resources would be maximized through the initiative. Cambior also expressed its desire and intention to focus on its core gold business rather than make significant new investments in the bauxite business.

CBJ closed Thursday's regular trading session at $2.61 and CBJ.TO at C$2.90

Copyright(c) 2006, Inc. All Rights Reserved

Alcoa execs see strong fundamentals for aluminum

Reuters Fri Jun 16, 2006 6:43pm ET

NEW YORK, June 16 (Reuters) - Executives at Alcoa Inc., the world's No. 1 aluminum producer, said they view demand for their products, industry fundamentals, and the world economy as very strong, contrary to recent harbingers of slowing growth that caused a slide in the metal price over the last month.

Speaking to investors and analysts on Thursday, chiefs across the top aluminum maker's businesses said they were bullish on their sectors' outlooks, based on demand.

"We think aluminum supply/demand will be in balance or in some deficit over time, being driven by one major factor--the urbanization of large masses of populations in the brick countries, namely China," said Joe Muscari, Alcoa's chief financial officer.

He said Alcoa projects a compound average growth rate in China's aluminum demand of 12.5 percent from 2005 to 2009.

Though China has become the world's largest aluminum consumer at nearly 7 million tonnes in 2005, he said there is still ample room for the country's consumption to expand.

Muscari pointed out that China's per capita consumption of aluminum is only 5.5 kilograms per year, compared with nearly six times that in other top consumers like Germany and Japan.

"Clearly there is significant potential for growth for a long time to come," the CFO said.

Similarly, Bernt Reitan, President of the Alumina and Primary Metals segment, said Alcoa sees a supply/demand balance over "the coming period."

"There are a lot of moving parts, the demand in the world, and you look at the economy around the world it is very strong. It's my view that we have a very strong fundamental situation in aluminum," Reitan said.

With strong growth in the top consuming countries, he said aluminum's strength will be sustained.

A huge factor constraining aluminum is an ongoing deficit in alumina, the raw material used to make aluminum.

"The global alumina market has been short for many years, and it is still very short. It takes time to build capacity. A lot of announcements are out there, but most of these projects are taking longer to build than they anticipated," he said.

Additional contraints to mining bauxite, the mineral that gets refined into alumina, also figure into demand pressures.

As Muscari points out, Bauxite is the most plentiful mineral in the earth's crust, but finding it at a site that is close to a port or close to the surface is not easy.

"Bauxite can be expensive to process and hard to access as it is often located in places that face geo-political risk. The most attractive deposits are in some of the most difficult environments in the world," he said.

China has a total of 2.2 billion tonnes of bauxite but, Reitan noted that its deposits are spread out and in a form that is hard to refine.

"They have to use much more energy to get a tonne of alumina based on Chinese bauxite. I don't know how many mines they have and what their plans are. I just notice that on the import/export statistics, ramp-up of their alumina capacity is mostly coming from imported bauxite, from other countries."

Further, he said China was at a cost disadvantage with its alumina refining capacity at the high end of the cost curve.

With demand projected to remain strong, Reitan, in response to a question, said Alcoa continually examines possible restarts of its idled capacity, even though Alcoa operates its smelters at close to 90 percent of its capacity.

"There are very healthy margins in U.S. smelting and there are opportunities for restarting those assets, and when that occurs, we will do it. We are continuously working on that."

Venezuela to take over "inactive" mines

MercoPress, Uruguay 18-Jun-2006

Venezuela plans to take over all inactive mining areas to form new joint ventures with a state majority stake and state-backed small mining groups foreseen under a mine law reform, announced Heavy Industries and Mining Minister Víctor Alvarez.

The mine reforms follow measures by Venezuelan President Hugo Chávez to increase state control over the energy industry of the world’s fifth oil exporter, where foreign and local companies were this year forced to accept new joint ventures giving the state oil firm PDVSA majority control.

"The areas that are inactive are going to be recuperated and rescued by the Venezuelan state," Alvarez told reporters outside the Congress where he handed over the proposed reforms to lawmakers.

According to Alvarez "most" of the mining fields "acquired more than 10 years ago via concessions or mining contracts remain inactive" with thousands of miners in the southern state of Bolivar unemployed.

Bolivar, which is home to large deposits of quartz, gold, bauxite and diamonds, is also the heart of Venezuela's iron and aluminium industry.

Under the plan some of the recovered mines would be placed under government control for "strategic reasons," others granted to small miners organized in cooperatives and still others "will be given to joint ventures that are majority-owned by the government".

Alvarez added that Venezuelan and foreign companies that have "complied with the law and with their contracts will be respected by the government."

Chávez, a close ally of Cuba who says he is constructing a socialist revolution for the dispossessed, has attacked oil contracts signed before his 1998 election for "robbing" Venezuela’s resources by giving preferential terms to foreign operators.

However Alvarez refused to comment directly when asked whether the reforms would affect Canadian gold miner Crystallex International, which is waiting for the government to approve a final environmental permit to start proper mining.

Crystallex has said its operating contract for the huge Las Cristinas gold mine will not be affected by the mine law reforms. But one lawmaker in the congressional mining commission said he believes the Canadian miner would be included, without giving more details.

"Sometimes the process of getting permits is used as an excuse and a pretext to justify inactivity," Alvarez said, without naming any mine operations.

Chinese OK for Chalco bauxite

The Australian, Australia June 20, 2006

Andrew Fraser, Resources

THE Chinese board of aluminium company Chalco has signed off on the company's proposal to mine bauxite at Aurukun on Cape York, opening the way for the company to make its final proposal to the Queensland Government.

Queensland Premier Peter Beattie met senior executives of Chalco in Beijing yesterday ahead of the end-of-month deadline before Chalco lodges its final proposal with the Queensland Government.

The final offer in what would be the biggest single Chinese investment in Australia entails spending nearly $3 billion to start up a mine at Aurukun near Weipa on Cape York and construct a refinery at Townsville, Bowen or Gladstone.

Chalco beat 10 other proposals to be named as sole developer of the bauxite deposits, worth up to $25 billion, but the Government wants to see further details of the mining and refining operations before it grants approval.

The main matter still outstanding and unlikely to be settled before the end of this month is the location of the refinery, with the long-term price of energy and availability of workforce being major issues.

While some sections of the state Government would like to see the refinery at Bowen so that jobs are created in an area of high unemployment, the cost of power to operate the refinery will be cheaper at Gladstone.

The bauxite deposits at Aurukun have been contentious for nearly 30 years. After recalling the leases, the Queensland Government named Chalco as the preferred developer for the deposits in early March.

China is interested in obtaining a reliable long-term supply of bauxite to make aluminium as part of its industrial expansion, and if it has its own raw material it will be less dependent on companies such as Alcan and Alcoa.

While Chalco is experienced in processing bauxite and has developed new technology in the refining process, it has less experience in mining.

It is still involved in discussions with other international mining companies about the possibility of undertaking a joint venture on the mining side, with one possible partner being the Russian aluminium company, Rusal.

Mr Beattie met that company last week while he was in Russia.

Guinea alumina output could hit 10m tonnes

Mining Weekly, South Africa 2006/06/19

Guinea could produce 10-million tonnes of alumina a year within a decade, more than ten times its current output, as investors flock to the West African nation, an industry executive told Reuters.

Brian Herlihy, vice-president for development at Global Alumina, said the Toronto-listed company expects to produce the first alumina from its own $2,8-billion refinery development in northern Guinea by the first half of 2009.

It could then expand capacity at the Boke plant to 4,5-million tonnes by adding a third train. Construction on the project began in 2005 and work on the refinery site starts this month, although Global has yet to finalise the financing.

"Global Alumina has the aim of building a second and a third refinery and our belief is that all that will be in Guinea," Herlihy said in an interview.

With the world's largest aluminium producers Alcoa and Alcan also planning a refinery through their Halco joint venture in Guinea, the country's alumina output is set to rise sharply from around 700 000 tonnes per year at present.

Guinea contains almost a third of the world's reserves of bauxite -- which is refined into alumina and then smelted into aluminium. Until now it has exported almost all its bauxite production of up to 15-million tonnes due to lack of refineries.

"In the next 10 to 15 years, I believe there will be 10-million tonnes a year of alumina exports from Guinea," Herlihy said, adding this would not reduce bauxite exports.

"Around eight companies are looking at concessions in Guinea at the moment," he said. "Guinea is going to play an important strategic role in the alumina industry."

Global Alumina, created solely for this project, aims to finance it with $1-billion in equity and $1,8-billion in debt.

Global, 25% owned by Dubai Aluminium, has already raised $440-million of equity, and is in talks with around five industry investors with the aim of raising the rest of the equity tranche by the end of the summer.

The company is also in advanced negotiations with a consortium of lenders -- including export lending agencies from France, China and South Africa -- with the aim of wrapping up the debt issue by November.

Anticipating an alumina boom in Guinea, Global is building a massive terminal at Kampsar port with the capacity to export 10-million tonnes a year, which could serve other new refineries.

Global Alumina will supply its Boke refinery with bauxite from its own concessions, although it would contract a mining company to produce the ore, Herlihy said.

The Global Alumina executive played down a nine-day general strike which ended on Friday to protest the economic policies of President Lansana Conte, which have stoked price rises and deepened poverty for the majority of Guineans living on less than $1 a day.

"My belief is that Guineans are eager to move towards economic development rather than civil strife," said Herlihy, noting that bauxite production continued throughout the strike.

The ability to build green-field refineries close to high-quality bauxite deposits outweighed political risks in Guinea, he said. With no heir apparent to the ailing Conte, political analysts fear a power vacuum should he die.

"We think that Guinea has the chance to see investment snowball," Herlihy said referring to the Halco refinery, a similar project planned by Rusal, and a major iron ore concession awarded to Rio Tinto in March.

Alcan says 3-4 mos to restore Iceland output

Reuters Tue Jun 20, 2006 12:16pm ET

TORONTO, June 20 (Reuters) - Aluminum-maker Alcan Inc. (AL.TO: Quote, Profile, Research) said on Tuesday it would take three to four months to restore production on a potline at its smelter in Iceland.

Production on the potline, one of three at the plant, was interrupted by a power failure. Alcan estimated lost production at 20,000 tonnes, or less than 1 percent of annual company-wide capacity.

The company said the cause of the power failure at the affected line, which has total capacity of about 70,000 tonnes per annum, is under investigation.

© Reuters 2006. All Rights Reserved.

Investors eye Guinea alumina

Finance24, South Africa 20/06/2006 13:30 PM

Conakry - Guinea could produce 10 million tonnes of alumina a year within a decade, more than ten times its current output, as investors flock to the West African nation, an industry executive told Reuters.

Brian Herlihy, vice-president for development at Global Alumina, said the Toronto-listed company expects to produce the first alumina from its own $2.8bn refinery development in northern Guinea by the first half of 2009.

It could then expand capacity at the Boke plant to 4.5 million tonnes by adding a third train. Construction on the project began in 2005 and work on the refinery site starts this month, although Global has yet to finalise the financing.

"Global Alumina has the aim of building a second and a third refinery and our belief is that all that will be in Guinea," Herlihy said in an interview.

With the world's largest aluminium producers Alcoa and Alcan also planning a refinery through their Halco joint venture in Guinea, the country's alumina output is set to rise sharply from around 700 000 tonnes per year at present.

Guinea contains almost a third of the world's reserves of bauxite - which is refined into alumina and then smelted into aluminium. Until now it has exported almost all its bauxite production of up to 15 million tonnes due to lack of refineries.

"In the next 10 to 15 years, I believe there will be 10 million tonnes a year of alumina exports from Guinea," Herlihy said, adding this would not reduce bauxite exports.

"Around eight companies are looking at concessions in Guinea at the moment," he said. "Guinea is going to play an important strategic role in the alumina industry."

Alcoa sees aerospace growth driving aluminum use

WAVE, KY 21-Jun-2006

By Carole Vaporean

NEW YORK (Reuters) - Alcoa Inc. (AA.N) sees a doubling of aluminum consumption over the next 20 years, with products in the flat-rolled segment, especially aerospace and other transportation applications, accounting for half of that growth, the company's segment president said.

At a recent presentation to analysts, Alcoa Group President Helmut Wieser said 30 million tonnes of aluminum are currently consumed worldwide, of which 15 million are used by the flat-rolled product market segment.

"In 20 years, we will grow from 30 million to 60 million tonnes (of aluminum consumed annually), with 50 percent consumed by flat-rolled," said Wieser.

For Alcoa, the segment's products include aerospace plate, can ends and tabs, brazing sheet for the auto sector, aluminum tread, and foil.

Wieser said Alcoa has seen revenue in the group grow at a compounded annual rate of 14 percent since 2002, driven by aerospace and commercial transportation markets of about 25 percent annual growth rate each. In the automotive sector, Alcoa's revenue has grown 12 percent annually since 2002.

"But the aerospace industry is ramping up frenetically."

Noting that build rates for the airplane makers have increased dramatically in recent years, he said industry forecasts predict that by 2024 the number of planes in the air will have doubled from to more than 35,000 from the current 17,000.

Jet orders for Boeing and Airbus are nearly sold out until 2010, according to Wieser.

Alcoa supplies about two-thirds of the metal in some Boeing Co. (BA.N) jets, more than 50 percent of the metal on Airbus' giant A380, and 80 percent of the metal in Canada's Bombardier (BBDsvb.TO) jets.

Wieser said only Alcoa can make the 32 meter-long plate needed for Boeing's 747 and Airbus A380 wing skins, or the 3.4 meter-wide fuselage skin sheet for the A380.

Not only are the makers of huge jetliners scrambling to fill orders, but micro or so-called executive jets are also sold out from makers like Eclipse Aviation Corp., which Wieser said already has orders for about 2,800 planes.

By the middle of next year, Alcoa's aerospace sheet and plate production will be expanded by 50 percent to capture the current opportunities in that market, Wieser said.

"We are capacity-constrained over the next three to five years. If we bring up our capacity to 50 percent increase mainly on the aerospace side, the industry is still capacity-constrained because of the pickup in aerospace build rates," he said.

To help meet demand, Alcoa has been growing its flat-roll operations in both Russia and China, where labor costs in particular are a fraction of those in the United States or Europe.

There has been a cost in Russia, however, where Alcoa is investing $200 million over two years to upgrade all of its facilities, he said.

Wieser said Alcoa is about nine to 12 months behind schedule and will be short $20 million to $30 million in anticipated revenue from Russia for this year due to unforeseen challenges. Among them, finding people with project management skills and overcoming language barriers.

"Improvement is happening there, but from a low level."

Alcoa is also working on more than 200 defense applications for the United States. Wieser said many new defense products rely on aluminum because its light weight helps speed and flexibility.

Bauxite decision

Advertiser Adelaide, Australia - Jun 20, 2006

THE Chinese consortium behind a bid to mine lucrative bauxite deposits in far north Queensland is expected to lodge its final bid by the end of June.

Following a meeting with CHALCO chairman Xiao Yaqing in Beijing yesterday, Premier Peter Beattie confirmed the bid would be finalised and lodged in Brisbane by June 30.

The world's second largest alumina producer, CHALCO beat a field of 10 bidders in February with a $2.92 billion offer to mine bauxite at Aurukun.

Norway's Hydro May Build Plant

The Moscow Times, Russia Friday, June 23, 2006. Issue 3438. Page 7.

By Yuriy Humber, Staff Writer

Hydro Aluminum, a division of Norway's Norsk Hydro consortium, could become the first foreign aluminum producer to build a plant in Russia.

The firm is in talks with SUAL, the country's second-largest aluminum producer, and HydroOGK, a subsidiary of state-controlled utility Unified Energy Systems, to set up an aluminum smelter and hydroelectric power complex in the Far East, a Hydro Aluminum spokesman said Thursday.

"Our ambition is to build a plant with a capacity of over 600,000 tons that would produce primary aluminum and look also to develop value-added products," Thomas Knutsen, a spokesman for Hydro Aluminum said by telephone from Oslo.

Cooperation in managing a power station that would provide the smelter with energy "can be discussed, if needed ... [but] the reason for our interest is aluminum," Knutsen said.

Earlier this month, HydroOGK and Russian Aluminum, the world's third-largest producer of the metal, sealed a deal to build the world's largest combined aluminum plant and energy complex in the Krasnoyarsk region. The project will require $6 billion in investments.

As international players seek to transfer production to countries with low-cost energy supplies to compete with emerging-market rivals, several have expressed interest in working with the country's largest hydroelectric power firm, HydroOGK.

Energy represents roughly one-third of aluminum production costs, with hydroelectric and atomic stations considered the cheapest long-term power sources.

With at least four aluminum companies, including the domestic producers SUAL and RusAl, pitching offers to HydroOGK, the Norwegians likely opted to team up with a local partner to increase their chances of securing the energy contracts, analysts said.

Some of the possible locations for the plant touted so far include the Khabarovsk region, Amur region's Komsomolsk-on-Amur and the port of Vanin on the Pacific coast.

Alcan, Ghana Team in Joint Venture

Houston Chronicle, United States June 22, 2006, 7:43AM

© 2006 The Associated Press

NEW YORK — Aluminum producer Alcan Inc. said Thursday it signed a memorandum of understanding with the Republic of Ghana to form a joint venture to explore the development of a bauxite mine and alumina refinery.

Canada-based Alcan will have a 51 percent stake in the venture, while Ghana will have a 49 percent stake.

The two parties will conduct a preliminary concept study to review the bauxite reserves, logistics and preselection of the refinery area and an analysis of social and environmental issues. The study is expected to be finished early next year and may lead to feasibility studies if successful.

The mine _ bauxite is an ore of aluminum _ and alumina refinery is seen having an initial capacity of 1.5 million to 2 million tons per year.

United Steelworkers ratify four-year contract with Alcoa

Akron Beacon Journal, OH Sat, Jun. 24, 2006

DANIEL LOVERING, Associated Press

PITTSBURGH - The union representing 9,000 Alcoa Inc. workers at 15 U.S. plants ratified a new four-year contract, the company and union officials said Friday.

A majority of workers nationwide approved the contract, but some plants voted against the deal, said United Steelworkers spokesman Howard Scott. Scott would not say which locals supported or opposed the deal, and the union would not release an overall vote total.

"This new agreement improves the competitiveness of these locations, and is a good outcome for our employees, the company, the communities in which we operate, and for our customers," said Alain Belda, Alcoa Chairman and CEO. "Both sides put a great deal of work into this agreement, which includes creative solutions to the issues we faced entering negotiations.

Pittsburgh-based Alcoa, which is the world's largest aluminum producer, will take a charge of about 4 cents a share in the second quarter to cover costs related to the contract negotiations, including preparing for possible strikes at the affected plants.

The company planned to use managers to run the plant in case of a strike, but United Steelworkers reached a last-minute agreement with Alcoa during talks in St. Louis last month. Industry analysts said a strike would have little effect on the company's operations, citing its international production capacity.

The deal includes average annual raises of 2.6 percent and a $1,500 ratification bonus for each worker, according to a statement from the union.

The union said the new deal includes a single family health insurance plan, instead of a multitiered plan proposed by the company, "that offers better coverage than what is available to the overwhelming majority of U.S. industrial workers."

Under the deal, Alcoa will invest millions in a fund to cover retiree health care costs. New hires will be covered under the same health care plan and defined-benefit pension plan that current workers receive, instead of just individual retirement accounts. The deal also boosts pensions and sickness and accident benefits, the union said.

Union workers voted on the contract Thursday and were given the opportunity to ask questions about the deal.

The previous contract expired May 31, but was extended to allow the union time to inform its members of the details of the new agreement and to organize the vote.

The union workers represent about 20 percent of the company's U.S. employees, but only about 7 percent of Alcoa's global work force of 129,000.

The new contract covers workers at plants in Arkansas, Indiana, Iowa, Kentucky, New York, North Carolina, Virginia, Tennessee, Texas and Washington.

On the New York Stock Exchange, Alcoa share rose 19 cents to close at $30.18

Iran, China to strike a deal on aluminum plant

IranMania News, Iran Friday, June 23, 2006 - ©2005

LONDON, June 23 (IranMania) - The North Khorasan Province and Chinese officials inked a memorandum of understanding (MoU) on Thursday June 22 for construction of a $1b aluminum factory in the city of Shirvan, MNA reported.

Nur-Ali Talebzadeh, deputy governor-general for construction and development, stated that the MoU needs to be ratified by Economic Council before the actual deal could go through and the Central Bank of Iran (CBI) is required to guarantee the 10-percent financing by the Iranian side, the Persian service of IRNA reported on Friday.

The plant will be built in an area of 130 hectares and 5,000 job opportunities are expected to come through as the result. Shirvan is home to 160,000 people and is located 60 km away from the provincial capital Bojnurd.

Strike affects Nalco operation

The Statesman, India 23-Jun-2006

Statesman News Service

ANGUL, June 23: Metal production at the Nalco smelter plant came to a halt and units of the company’s captive power plant here were affected following a 24-hour strike by workers and executives to protest against the sale of 10 per cent shares in the steel major by the Central government.

The Nalco Coordination Committee comprising All Workers’ Trade Unions and Officers’ Association here had given a call for ceasework today. All officials and workers, except a few engineers for maintenance jobs in the smelter and power plant, joined the strike.

Nalco has about 5,000 employees, including 1,150 officials, in these two key plants .

While no production of aluminium was reported at the smelter plant, all the 720 pot lines had to be kept alive and power supply for which continued, executive director Uma Ballav Pattanayak said. The smelter plant produces an average of 950 tons of aluminium daily, he added.

Strike also affected power output in the captive power plant which produced about 650 MW, instead of the normal 800 MW. Six 120 MW units were running part load while the seventh one had tripped due to the strike, coordination committee chairman Mr BC Ray said.

He added that with the successful strike in Angul, there would be a cease-work stir in the Nalco bauxite mine at Damanjodi also.

Mr Ray said the loss per day due to the strike would be Rs 15 crore.

Some of the striking workers said they would ensure that the share prices dip considerably by paralysing the production if the Centre does not retrace its steps.

Expressing solidarity with striking workers at the plant’s main gate, Rajya Sabha MP Mr Rudra Narayan Pany assured them that he would raise the matter in Parliament.

Several politicians and Central trade union activists have declared support to the employees and demanded the reversal of the divestment decision.

Even during the NDA regime, widespread political protests, strike by employees of the company and trade unions had forced the then government to rescind the decision to sell the shares of the company.

A repeat of the same agitation is in the offing now.

In Bhubaneswar, Citu leader and former MP Mr Sivaji Patnaik condemned the UPA government’s decision, while the ruling BJD appealed to all parties to stop hurling accusations against one another and join hands for a common cause.

Mr Damodar Rout, the BJD secretary general, who was unceremoniously sacked from the ministry recently, issued a statement lauding the fact that chief minister Mr Naveen Patnaik had opposed the divestment and written to the Prime Minister, Dr Manmohan Singh, yesterday.

Evidently taken aback by the criticism that Mr Patnaik, as steel and mines minister at the Centre, had approved of the divestment, Mr Rout said, instead of throwing mud on each other, political parties should protest against the move.

Alcan to sink $2bn into Ghana

Finance24, South Africa 23/06/2006 09:59 AM

Accra - World bauxite giant Alumina Refinery Plant by Alcan Incorporated is to sink US$2bn into Ghana's bauxite industry, the Ghana News Agency (GNA) reported on Thursday.

It said the giant Canadian bauxite company would build a refinery that would have the capacity for refining between 1.5 million and 2 million tonnes of bauxite annually.

Ghanaian President John Agyekum Kufuor said on Thursday in Accra, before the signing of a memorandum of understanding between the Ghana government and the company for the development of a bauxite mine and the refinery that the project was positive for the national economy.

"This is what the time asks for," he said.

Kufuor said he was happy that Alcan had decided to add value to the mineral, after operating in Ghana for the last 60 years mining bauxite ore for export.

Dick Evans, president and chief executive of Alcan Incorporated, said the company was pleased to have a partnership with Ghana to explore development of the country's extensive, high-quality bauxite reserves.

"Ghana has emerged as leader in economic and political stability in Africa, which has created opportunity for considering investments of this scale that would benefit both Alcan and the Ghanaian people," he said.

Jacynthe Cote, president and chief executive of Alcan Bauxite and Alumina, said that for the last six decades the firm had been contributing directly to Ghana's economy and social development.

"It currently holds an 80% stake in Ghana Bauxite Company Limited, through which it has enjoyed a very strong partnership with the government, which owns 20%, since 1974."

American giant Kaiser had an aluminium smelter in Tema, some 25km east of Accra, but imported bauxite from Jamaica.

Aluminium giant Alcoa eyes Africa for opportunities

Mining Weekly, South Africa - Jun 23, 2006

The world's biggest aluminium producer Alcoa said on Friday it was in talks to establish operations in other African countries besides Guinea and Ghana.

"We see Africa as a growth area. We are investigating opportunities in other African countries and have initiated talks with other governments on the continent," Jerome Maxwell, president of Alcoa's primary product business in Africa and the Caribbean, told Reuters.

He was speaking on the sidelines of a conservation conference in the Malagasy capital.

"We see demand growing so we need to grow to meet that demand and Africa is part of that strategy," he said.

Guinea's national assembly voted last month in favour of a planned 1,5 ton-per-year refinery that will process bauxite into alumina, the raw material for making aluminium. US Alcoa and Canada's Alcan plan to jointly build the refinery.

In April, Alcoa said it was in discussions with the government of Ghana to expand its investment in the country's integrated aluminium industry. The two parties have already restarted state-owned Volta Aluminium Co.'s smelter.

Production Back at Eastalco?

NBC 25, MD 2006/6/27 19:01:59

Posted by ChadMerrill

FREDERICK COUNTY, MD- The news was bleak for aluminum workers in Frederick County after Eastalco laid off almost all of their workers to start the year.

Eastalco is quiet today. Employee parking lots are almost empty. The aluminum plant which employed more than 600 workers now employs about 50 workers. Billions of dollars in equipment sits idle.

"It depresses everybody that works here. The capacity of this plant to make money today is just extraordinary, especially considering the price of aluminum," said Rick Dixon, Local Union President.

The plan for the plant to start making money again is already in motion. Eastalco Officials said the reason for massive layoffs was because of the high price of electricity. A new law coming out of the Maryland General Assembly will make it possible for Eastalco to build its own power plant with the help of the state.

"If we have joint ventures, it will be possible for facilities like this to be partners in getting their own power, which helps control their cost significantly," said Galen Clagget, Delegate of Frederick County.

Eastalco won't be fully operational again overnight. The permitting process could take up to two years and building it could take longer than that. Eastalco Officials said the soonest Frederick operations could be ready for the scale of production close to what it once was is 4 years.

"It's hard to say if we will be looking exactly like we did when the plant was running before, but certainly we need a significant amount of people to run the plant when we come back up," said Earl Robbins of Eastalco Public Affairs.

"I'm sure that there are a lot of them (former workers) that maybe didn't take early retirement that would want to come back and I’m sure that this would open opportunity for a lot of people looking for jobs," said Jim Strong, United Steel Workers.

Eastlaco puts the number of new jobs around 500 and many of brand new aluminum workers may need years of training for proficiency.

Delegate Clagett said Eastalco's power plant will likely be built near Baltimore.

Reported by Adam Hudson

Alcoa awarded $59.6 million for replacing metal

Seattle Post Intelligencer 28-Jun-2006

Company fixed defective boats


Alcoa Inc. -- which bailed out the Pacific Northwest's boat-building industry when vessels constructed here with bad aluminum started rotting at their berths -- has won a $59.6 million legal verdict against the company that made the defective metal.

The nightmare began for Keith Whittemore, president of Seattle-based Kvichak Marine Industries, and 53 other Northwest boat builders four years ago when a customer called to complain about corrosion in a $1.5 million passenger vessel in Hawaii called the Hula Kai.

"The boat was all of about two years old so we sent a crew to Hawaii to replace the plate with thicker metal," Whittemore said. "We didn't know why it was happening, but we wanted to get the customer up and running." The repair cost Kvichak about $200,000.

At about the same time, Nichols Brothers, another big boat builder on Whidbey Island, was having similar problems with a ferry it had constructed for a customer running between Los Angeles and Catalina Island.

"We put our heads together with the Coast Guard and had the metal tested," Whittemore said. "The metal was found to be susceptible to corrosion and cracking in saltwater. This was a marine alloy. This was not supposed to be the case."

The metal was made by Montreal-based Alcan Inc. and distributed by a company later acquired by Alcoa, based in Pittsburgh.

"We immediately stopped all production and laid off everybody in our shop," Whittemore said.

Kvichak, Nichols and the rest of the boat builders in the region began searching their records for boats built with the bad aluminum.

Ironically, Whittemore discovered that the crew that had just completed the rebuild work on the Hula Kai had used the same defective metal. He sent them back to do the job over again.

"We had boats all over the country with this metal in it," Whittemore said. "Two boats in our shop under construction were cut up for scrap and replacing those hulls probably cost us $1 million.

"Our company did not have the resources, nor would any of the yards have the resources to repair or replace all those affected boats. It would probably have cost us about $20 million to do so."

Whittemore praised Alcoa for its quick decision to accept responsibility.

Alcoa formed what became known as the aluminum boat solutions team, brought them to Seattle and paid for the builders to repair or replace 341 vessels.

About a dozen boat builders in the Northwest, most of them on Puget Sound, constructed the majority of the affected boats, said Whittemore, whose company ended up repairing or replacing 30 vessels.

Alcoa then turned to the Seattle law firm of Riddell Williams to file suit against Alcan.

Attorney Paul Kundtz of the firm said a key argument centered on Washington law that says goods must be suitable for their ordinary and customary use.

On May 22, after three weeks of argument before a jury in U.S. District Court in Tacoma, Alcoa won the $59.6 million verdict. About $57 million was to reimburse Alcoa for money it voluntarily paid to fix or replace the boats, Kundt said. Most of the rest of the damages went for engineering fees to inspect and analyze the damaged vessels.

P-I reporter Paul Shukovsky can be reached at 206-448-8072 or

Alumina Refinery tipped for Townsville

Courier Mail, Australia June 29, 2006

James McCullough

TOWNSVILLE is the frontrunner as the site of a $1.3 billion alumina refinery as part of China's largest single investment in the Australian resources industry.

The project could provide up to 4500 jobs for the region.

Chinese aluminium giant Chalco yesterday lodged its formal bid to develop one of Queensland's largest mining projects, the $3 billion Aurukun bauxite leases on Cape York Peninsula.

Chalco representatives submitted a final plan to develop, refine and smelt the bauxite reserves with a key proposal to construct a refinery at either Townsville, Bowen or Gladstone in a move which could cost up to $6 billion.

The original plan put to Government involved a mine and refinery likely to cost $3 billion, but it is understood the final Chalco bid also looks at the construction of a power station and smelter in the state.

"Given Chalco's commitment throughout the world, the possibility of a power station and smelter would not be out of the realm," an adviser close to the deal said yesterday.

The investment would be the largest by a Chinese company in Australia and would be a major boost to north Queensland employment and infrastructure.

A refinery is crucial in the plan and it is understood Townsville has firmed as the site of the construction given its port access, available labour and ability to dispose of waste from what will become one of the state's major projects.

Premier Peter Beattie yesterday said a final decision on the refinery's location would not be made for some time with analysts close to the project suggesting a decision in about two months.

"I'd caution people to take a few deep breaths and relax," Mr Beattie said. "There is still some way to go before a final decision is made on the location of the alumina refinery."

After receiving Chalco's formal bid documents yesterday, the State Government now is likely to formally accept the bid and progress with key decisions such as the refinery site selection.

A committee will assess the final bid and make recommendations to the Government on whether to proceed and confirm Chalco as the preferred developer and it would then have to undertake a detailed feasibility study which could take up to two years.

Chalco's project leader Zhongxiu Liang said the resource was one of the most attractive global sites for the company and it was committed to producing alumina from Aurukun within five years.

Alcoa advises hold on gas

Advertiser Adelaide, Australia 30jun06

ALCOA has called for up to 20 per cent of Australia's gas reserves to be kept for domestic use rather than exported.

The world's biggest aluminium group claims existing market mechanisms are unlikely to guarantee the continued security of our gas supply.

Alcoa's submission to the WA Government is set to escalate a debate over the future use of Australia's 150 trillion cubic feet of undeveloped gas reserves, highlighting fears domestic gas tariffs will have to rise sharply to shift gas from far higher international LNG prices.

Western Australia has gas reserves of 113 trillion cubic feet, about 80 per cent of the national total.

Earlier this year, the WA Government released a discussion paper on domestic gas policy seeking industry views on a formal gas reservation policy.

The paper uncovered a substantial disagreement between gas producers and consumers, as well as an argument that such key issues should not be decided by state governments but at a national level.

Federal Resources Minister Ian Macfarlane attacked the concept, saying free-market principles should guide the gas market.

Alcoa is the biggest single user of gas in Western Australia, producing 8 million tonnes of alumina a year - 13 per cent of world demand - from three refineries at Pinjarra, Kwinana and Wagerup, and generates annual export revenues of $3 billion.

Its submission said the cost of energy represented 28 per cent of its production costs in WA. "Alcoa considers state Government intervention to reserve gas to meet domestic needs is necessary and appropriate. Ongoing availability of gas to domestic users is of fundamental importance to the state's economy.

"There is a material risk that, in the absence of near-term government intervention, the availability of gas will be constrained and the price of gas significantly increased," the submission said.

Alcoa said the state Government should reserve a consistent portion - 15 to 20 per cent - of all offshore gas for domestic use.

"The regime must be field-specific, with gas reservation obligations applying to each particular gas field, so that there is a commercial incentive to producers to deliver reserved gas to the domestic market."

It also argues that the federal Government would need to be involved, and that access should be made available to upstream gas gathering, processing and trunkline infrastructure "on fair and reasonable terms".

Global demand for aluminium is expected to double from 30 million tonnes to more than 60 million tonnes by 2020.

This, Alcoa said, would require an expansion of alumina production through both greenfield and brownfield refineries.

IDC remains 'optimistic' that R12bn Coega smelter will proceed

State-owned development financier the Industrial Development Corporation (IDC) said on Thursday that it remained optimistic that aluminium group Alcan would proceed with the proposed R12-billion smelter investment at Coega, in the Eastern Cape, but was loath to set a timeframe to the project.

It was initially envisaged that Alcan, which will take a 49% stake in the project, would make an announcement during June.

The IDC is set to take a 15% equity position in the 720 000-t venture, which would consolidate South Africa's position as a leading international aluminium hub, adding to BHP Billiton's significant aluminium-production capacity in Richards Bay, South Africa, and Maputo, Mozambique.

Speaking at the release of results of the year ended March 31, 2006, CEO Geoffrey Qhena said a lot of work was going into progressing the project to the approval stage and that there had been an ongoing engagement between it, Alcan and power utility Eskom on venture. It was understood that the final electricity-tariff model was a key negotiation point, but concern had also been raised about Eskom's ability to guarantee security of supply in the current tight supply-demand power environment.

The utility is on record as saying that it would have sufficient capacity for the project, which would be built in phases and have a 72-month to 80-month construction phase, possibly starting in the first quarter of 2008. Eskom had also indicated that the tariff would be delinked from the aluminium price, but that it would receive what it termed a 'developmental tariff', which was expected to be close to the utility's long-term cost of production.

"It is taking long, but if one looks at the discussions we have had, it will be worth wait . . . by the time we come to making a decision, all the issues would have been ironed out.

"So we are still optimistic as an institution that it will happen, but I am reluctant to put a timeframe to it," Qhena said.

Environment Minister Announces Decision on the Alcan Spent Pot Lining Project in Jonquière, Québec

CNW Telbec (Communiqués de presse), Canada 29-Jun-2006

OTTAWA, June 29 /CNW Telbec/ - The Honourable Rona Ambrose, Minister of the Environment and Minister responsible for the Canadian Environmental Assessment Agency, today announced that the proposed Alcan Spent Pot Lining Project is not likely to cause significant adverse environmental effects. The Minister has consequently referred the project back to the responsible authority, Industry Canada, for appropriate action.

The Minister based her environmental assessment decision on the following information: - the comprehensive study report, including conclusions and recommendations, submitted by the responsible authority; - public comments received during a 24-day consultation period, and Industry Canada's response to the comments; - the implementation of mitigation measures and a follow-up program.

A copy of the Minister's environmental assessment decision statement can be found on the Canadian Environmental Assessment Registry ( using reference number 05-03-9911.

The proponent, Alcan Primary Metal Group, has developed a chemical process known as "Low Concentration Caustic Leaching and Liming," which converts spent pot lining, a by-product of aluminum production, into non-hazardous waste and recyclable materials. Alcan has sought funding from the responsible authority to support the construction and operation of a pilot plant for this process in Jonquière. The plant would be able to process up to 80,000 tonnes per year of spent pot lining. The material will come from the Alcan's stockpiles in Québec, as well as from sources around the world.

Alcan's proposed project was the subject of a provincial environmental assessment by the Québec "Bureau d'audiences publiques sur l'environnement," which concluded that the project would have a marginal impact on the environment.

The Canadian Environmental Assessment Agency administers the federal environmental assessment process, which identifies the environmental effects of proposed projects and measures to address those effects, in support of sustainable development.

For further information: Media may contact: Robert Deslauriers, Senior Communications Advisor, Canadian Environmental Assessment Agency, (613) 957-0396; About the environmental assessment process, please contact: Jacques Laurin, Project Analyst, Canadian Environmental Assessment Agency, (613)


UPDATE 3-Alcoa gains full ownership of two smelters

Reuters Thu Jun 29, 2006 10:29pm ET

(Adds details on Mitsui's smelting business)

LOS ANGELES, June 29 (Reuters) - Alcoa (AA.N: Quote, Profile, Research), the world's biggest aluminum producer, said on Thursday that it had taken full ownership of its Intalco and Eastalco smelters in Washington and Maryland.

The company said that affiliates of Mitsui & Co. (8031.T: Quote, Profile, Research), Japan's second-biggest trading company, and YKK Corp. will sell a combined 39 percent stake in the smelters and that Alcoa will receive an undisclosed sum to cover liabilities. The transaction is expected to be completed by the end of the month.

Intalco, a 278,000 metric ton per year smelter, is operating at one-third its capacity. Eastalco, a 195,000 metric ton per year smelter, was idled in December because it could not secure a competitively priced long-term power arrangement.

Alcoa said it is working with union, community, and elected officials to explore long-term power options that would allow the plant to reopen.

The U.S. smelters had been one of the biggest loss-making businesses for Mitsui, though the company expects a record profit this business year on booming commodity prices. Mitsui took a 14.5 billion yen ($126 million) charge on that business in the year ended March.

Alcoa has signed agreements with local power providers in the U.S. Pacific Northwest to help reduce the cost impact of market-based power purchases after current contracts end.

In the Pacific Northwest, Alcoa said, it signed agreements with the Bonneville Power Administration (BPA) and Public Utility District No. 1 of Whatcom County (Whatcom PUD) that provide financial benefits to help reduce the cost of market-based power from other energy suppliers after its current contract with BPA expires in October, 2006.

The agreements follow a BPA decision issued earlier this month that provided the three remaining Northwest aluminum companies financial benefits in lieu of cost-based, direct service power currently provided by BPA.

Under the terms of BPA's decision, each company is entitled to a benefit of $12/MWh based on its historical energy contracts.

In addition to the Intalco smelter, Alcoa operates the Wenatchee smelter in the BPA region, which is operating at approximately half of its capacity.

"The financial incentives will certainly help," said Alan Cransberg, President, Global Manufacturing Alcoa Primary Products.

"But even with the incentives, our energy costs in the (U.S.) Northwest will increase significantly. We are exploring all possible options to remain viable at Ferndale during the transitional period from October 2006 to 2011," said Cransberg.

He added that any viable long-term option for Intalco must include several key components, including long-term, globally competitive power, said Alcoa.

"The long-term future of Intalco hinges on successful negotiation of a cost-based energy contract with BPA beginning in 2011. We view the 2006 to 2011 contract as a bridge to that time period where we hopefully would be able to purchase power in the same manner as other key industries in the region," said Cransberg.

Port makes final preparations for Kaiser smokestack demolition

Tacoma Daily News, WA Jun 29 2006

By Todd Matthews, Editor

Three. , Two. One. BOOM!

That will be the sequence of events Sunday morning at 8am as the Port of Tacoma demolishes a 500-foot smokestack located on the former Kaiser Aluminum Smelter site.

The goal? Transform 96 acres of unused industrial space into a productive marine terminal.

On Friday afternoon, the final explosive charge will be loaded into the base of the 38-year-old smokestack by Salt Lake Seismic Services, a subcontractor responsible for demolishing the tower. According to port spokesman Mike Wasem, both the port and the contractor have taken steps to make sure the explosion has impacts on the community and the environment.

"Minimal impact is expected as a result of the stack demolition," said Wasem. "Ground vibration will be minimal, and noise from the explosion should be equal to that of a typical fireworks display."

Instead of imploding the stack, contractors have loaded the base of the structure with with explosives -- aiming to tip the stack over like a large tree so it lands on a dirt "landing pad."

Remote Access Technology, another subcontractor on the project, cleaned and pressure washed the concrete-and-steel interiors (which measures 26 inches thick at the walls, and eight inches thick at the toip), removing more than 100 tons of soot.

Though port officials are encouraging the public to watch this event on television, limited public viewing has been arranged at Blair Terminal off Port of Tacoma Road and Marshall Avenue. All roads near the Kaiser site will be closed prior to the stack demolition, and there will be no parking or camping out along Taylor Way, Alexander Avenue or anywhere in the immediate or adjacent area of the Kaiser property on the evening of July 1. This will be enforced by Tacoma Police, Port of Tacoma Security and Puyallup Tribal Police. Law enforcement will also patrol SR 509 to ensure that people are not parking along this busy roadway to view the event. Additionally, the U.S. Coast Guard will close the Blair Waterway to recreational vessels and personal watercraft for safety and security reasons.

Sunday’s demolition will be the second smokestack destroyed in the Pacific Northwest in the past three months. In May, the 499-foot Trojan Cooling Tower near Portland, Oregon was toppled.

According to Wasem, the site was originally developed in 1942. It was operated by the Olin Company during World War II. Kaiser purchased the plant after the war, and the Port purchased the 96-acre site in December 2002 after Kaiser curtailed production in 2000.

Tacoma-based R.W. Rhine has a $3.6 million contract with the Port to demolish and remove more than 70 vacant structures on the site.

While demolition is very technical and computer controlled, the Port has sponsored a contest, allowing members of the public the opportunity to push a ceremonial button, initiating the demolition process. According to Wasem, nearly 500 people entered the contest. A winner will be randomly selected Friday.

The Kaiser site will be incorporated into the Port's future maritime terminal growth plans, creating greater capacity for cargo.

Alcoa assures safe disposal of waste

Trinidad & Tobago Express, Trinidad and Tobago Saturday, July 1st 2006

IN response to environmental concerns highlighted by Cap-de-Ville residents, Alcoa, operator of the proposed aluminum smelter to be located in the area, assures that the company will adhere to the environmental standards.

In a letter issued to the Express by Wade Hughes, director public strategy, Alcoa said, "While it is common knowledge that the smelting process will produce hazardous waste material known as spent pot-lining, we can assure the people of Trinidad and Tobago that this material will not be land filled in the country".

He explained that "there a number of approved and licensed processes available for the productive use of spent pot lining in the areas in which we operate. For example, in Brazil, the material is safely recycled and used throughout the cement industry".

Hughes said that this is in keeping with Alcoa's commitment to adhere to the strictest environmental standards and laws as well as Basel Convention, which enables properly permitted and safely managed transportation of such materials.

The letter said that all products and by products resulting from the proposed facility are described in the application for a Certificate of Environmental Clearance and will be fully discussed during Environmental Impact assessment consultative process.

It added that the local pant would be of modern design and would utilise proven pre-bake technology, which is used at other Alcoa plants, which operate under strict environmental regulations.

The Trinidad plant on the southwest peninsula of the island would be designed to meet internationally accepted standards for protection of the environment and hum health such as those enforced the United States Environmental Protection Agency and those recommended by the World Bank and the World Health Organisation.

Strike hits output in Nalco unit

Hindu, India Saturday, Jul 01, 2006

Work affected in almost all Central Government offices across Orissa

BHUBANESWAR: Work was affected in almost all Central Government offices and establishments across Orissa on Friday as activists of various Central trade unions and political parties staged demonstrations opposing the Centre's decision to disinvest 10 per cent of shares in the National Aluminium Company (Nalco). The strike passed off peacefully.

With thousands of Nalco workers participating in the day-long strike called by seven Central trade unions, production of alumina and aluminium was affected in the company's smelter at Angul in Angul district and in the bauxite mines at Damanjodi in Koraput district. Work was also disrupted in the company's power plant at Angul.

Work was affected in the company's corporate office here, as officers and workers abstained from duty. Party activists and trade union members staged demonstrations outside the office.

With slogan-shouting agitators squatting on rail tracks, train services were hit. Movement of coal was also affected as workers in the industrial areas in and around Angul joined the agitation, bringing the trains to a complete halt.

Though protesters forcibly shut down many Central Government offices, life was normal outside, barring in a few industrial hubs. State Government offices and educational institutions functioned normally in most parts of the State.

The CPI (M), the CPI, the Orissa Gana Parishad, the Janata Dal (S) and the Samajwadi Party were among those who participated. Workers of the ruling Biju Janata Dal and the Bharatiya Janata Party also joined the strike, urging the UPA Government to withdraw its decision.