AluNews - May 2006

Aussies sign up for Vietnam venture, New Zealand - Apr 30, 2006


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

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

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

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

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

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

AWAC's deal is with Vietnam National Coal-Minerals Industries Group – or Vinacomin. It calls for the creation of a joint venture to explore the feasibility of a bauxite-alumina refinery at the Gia Nghia bauxite deposit area.

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

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

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

Vinacomin is responsible for all bauxite development in Vietnam.

Carbonorca finishes quality control system audit

TMCnet - May 03, 2006

( Via Thomson Dialog NewsEdge)A team of internal auditors from Venezuelan carbon anodes maker Carbonorca have finished auditing the company's quality control system, a company executive told BNamericas.

Carbonorca already has ISO 9001 certification and the point of the audit was to "make sure that we are meeting standards to be able to maintain it," plant manager Palmiro Jimnez said about the certification.

The company also is working to improve plant conditions to reach ISO-14000 standards, he said.

The audit results will allow the company to make the necessary corrections to be ready for the anticipated fourth quarter re-certification audit, performed by Venezuela's state quality control agency Fondonorma, which is in charge of issuing certifications.

Carbonorca, which supports the aluminum industry, is based in Puerto Ordaz in eastern Venezuela. State holding company CVG owns 10% of Carbonorca, while aluminum reducers Alcasa and Venalum each hold 45%.

Alcan Shareholders hear Kitimat Case

Northern Sentinel, Canada May 03 2006

All three levels of government representing Kitimat denounced power sales at the Alcan annual general meeting in Montreal last Thursday.

MLA Robin Austin, MP Nathan Cullen, a city delegation including all but two city councillors, the city manager and local CAW representative Rod Slezak travelled to Montreal for the meeting.

"In my opinion Kitimat dominated the AGM," Austin told the Sentinel. "Over half an hour was spent on Kitimat."

The nine-member delegation told the meeting attendees that in the short term power sales might work, but in the future a new provincial government might strip the company of its ability to use the Nechako reservoir for anything but aluminum production, Austin explained.

"It’s not good for Canadians to give our water away," the provincial NDP member added.

Instead Alcan should take advantage of the cheap water supply and expand the current smelter, Austin said. The reaction from the corporation was respectful, he continued.

Mayor Rick Wozney who attended last year’s meeting described the openness of this one as refreshing.

"I thought it was a complete 180 turnabout," he said. "Last year we weren’t allowed to speak but this year it was very good." However, he added, there wasn’t much of a response from the company. "There weren’t any earth-shattering comments."

Alcan did offer assurances that Alcan board chairman Yves Fortier, board member Milton Wong, and Alcan Primary Metal president Cynthia Carroll will be visiting Kitimat on July 5.

"It certainly was good they committed to come to Kitimat," Wozney said. "It was quite successful I feel."

The delegation also extended an invitation to new president Richard Evans as well.

A delegation from Kitimat will continue to attend Alcan AGMs until the issue of power sales is resolved, the mayor pledged.

© Copyright 2006 Kitimat Sentinel


Press Information Bureau (press release), India - May 2, 2006

Public Sector Aluminium major National Aluminium Company Ltd. (NALCO) has achieved 6.7 per cent of the second phase expansion of its smelter and 8.38 per cent in captive power plant during 2005-06. It has placed orders for geo-technical investigation, site grading works, construction water and power, civil and structure I, material handling, township consultancy and pot shells of its Aluminium smelter. It has also placed orders for construction power, road and drainage, main boiler house package, chimney and material handling contract of its captive power plant.

Work is also in progress for the second phase expansion of its Alumina Refinery. Orders have been issued for construction works, material handling, piling works, lime storage shed, township consultancy and stacker.

The Government has approved NALCO's second phase expansion of the capacity of bauxite mine from 48,00,000 TPY to 63,00,000 TPY alumina refinery from 15,75,000 TPY to 21,00,000 TPY, aluminium smelter from 3,45,000 TPY to 4,60,000 TPY and captive power plant (CPP) from 960 MW to 1200 MW in October, 2004, at an investment cost of Rs.4091.51 crore.


T&TEC upgrade to cost $1b

Trinidad & Tobago Express, Trinidad and Tobago Friday, May 5th 2006

Anna Ramdass

CABINET has agreed to spend over one billion dollars in the next six years to upgrade the facilities of the Trinidad and Tobago Electricity Commission (T&TEC) to cater for the proposed aluminum smelter plants.

Public Utilities Minister Pennelope Beckles disclosed this at a post-Cabinet press conference at Whitehall, Port of Spain, yesterday.

Beckles said this upgrade comes from a recommendation of the T&TEC committee of energy that submitted a report to Cabinet which stated the figures of the bulk energy requirement for this country from 2006-2012.

The report, according to Beckles, stated that T&TEC expects the percentage of energy to increase for residential, commercial and small to medium industries as the smelters come on stream if given authorisation.

Beckles maintained, however, that the price of the upgrade does not mean that residential customers would have to fork out more money for electricity bills.

She explained the technical aspect of this project, which includes an advanced metering infrastructure system, will cost $210 million and will ensure quality monitoring.

She said the system also will eliminate T&TEC's estimated billing and will improve the level of customer service. This system is scheduled to be completed by December 2007.

Beckles said there are also transmission and sub-transmission projects that will see the installation of 100 kilometres of transmission lines and 12 new sub-stations for interconnectivity to power stations that will cost some $844 million.

She said this is necessary to facilitate the use of power generators.

With respect to telecommunications, a microwave system which Beckles said is obsolete has to be replaced at a cost of $30 million.

The expansion of the fibre optic network to interconnect all sub-stations as well as to provide operating data from the field to operators at the control systems which will support broad band applications will cost $40 million.

Beckles said that Cabinet agreed that the National Energy Corporation will continue to work with Powergen and T&TEC on the generation project for Union Estate and Point Lisas which are required urgently to supply to the proposed Altruint project and other projects.

She added that it was agreed that T&TEC finance its share of the equity finance in generating projects with Powergen.

Alcan says potential Kitimat expansion ranks high

Metro Toronto, Canada -Thursday, May 04, 2006 10:37:00 AM ET

MONTREAL (Reuters) - Alcan Inc. <AL.TO> <AL.N> said on Thursday its smelter at Kitimat in British Columbia is among the top of potential expansion projects the company, the world's second-largest maker of primary aluminum, is looking at.

"It's one of the top three that we're looking at out of those six or seven," Alcan President and Chief Executive Dick Evans told ROB TV. He declined to rank the projects in detail.

Using existing Alcan-owned hydro-electric power generating assets, the smelter at Kitimat in British Columbia could be modernized and its 277,000 tonnes of annual output expanded by 30 to 35 percent, Evans said. Using additional energy would increase the expansion potential, he added.

Evans said the availability of power resources at appropriate prices is key when considering smelter expansion or greenfield projects.

Earlier this week, Evans told Reuters that it would take three to four years to bring any big aluminum smelting projects on stream in Quebec's Saguenay region or at Kitimat.

Other projects Alcan is considering include topping off capacity at its 408,000-tonne Alma smelter or building a new smelter in Quebec to replace older capacity.

Other potential expansion projects are in Cameroon, China and Iceland. Alcan is also looking at a new smelter as part of a joint-venture project at Coega in South Africa.

A new 350,000-tonne smelter in Oman, in which Alcan has a 20-percent stake and rights to participate in any expansion, could come online in the second half of 2008.

($1$1.11 Canadian) (c) Reuters 2006

GOVERNMENT- OWNED Clarendon Alumina Production Limited (CAP) is projecting a US$2.76 million loss this year.

Jamaica Gleaner, Jamaica - 05-May-2006

These projected losses follow on an estimated US$9.48 million loss in the last financial year ended March 31. The company is in a 50/50 joint venture with Alcoa at the Jamalco plant in Clarendon.

Bauxite is refined into alumina at the plant. This in turn is shipped overseas to produce aluminium.

Former CAP board member Norman DaCosta said he found the the announcement surprising. Mr. DaCosta said the projection comes amid a very upbeat global market for aluminium producers and exporters.

The overall aluminium industry is awash in profits. Alcoa, the world's top aluminium producer and CAP's partner announced record profits last month, while Canadian aluminium producer Alcan Inc. said that its net profit in the first quarter of the year was more than twice the equivalent figure for 2005 and a record for the company.

With continuing demand coming from developed countries and emerging markets such as India and China, the world aluminium deficit is expected to continue up to 2007 said Mr. Da Costa.

The CAP financial results reported in the Estimates of Revenue and Expenditure for public sector bodies tabled in Parliament last month failed to disclose the reason for the losses. It stated that the plant continues to make significant direct contributions to the national budget in respect of levy, taxes and royalties, and to the country's development through employment, infrastructure development and critical foreign currency inflows.

It said that during this year, there are plans for further expansion of the Jamalco refinery from an annual capacity of 1.25 million tons currently to 2.8 million tons, at a cost of US$800 million. The project will include the introduction of superior technologies to lower raw material consumption and improve efficiencies, bringing the plant in line with Alcoa's other low-cost facilities.

This expansion will be fully funded by Alcoa, resulting in Alcoa's ownership interest increasing to about 80 per cent and CAP's reducing to 20 per cent after the expansion. Pre-engineering works are to start this financial year and the plant's ongoing capital programme is projected at US$61.40 million, with the main projects being the construction of a residue disposal lake to maintain and protect the environment and mining infrastructure work to expand Jamalco's refinery years.

The financial report stated that the projected net loss of US$2.76 million, is an improvement of US$6.72 million or 71 per cent on the 2005/06 estimated loss of US$9.48 million. It said production is in accordance with refinery capacity, while alumina sale is based on existing marketing contracts.

The Financial Gleaner was unable to get a response from CAP's management up to press time yesterday.

Saudi Arabia to float 50% of Maaden by end of 2006

Middle East North Africa Financial Network, Jordan - May 2, 2006

(MENAFN) A cabinet statement said Saudi Arabia is to float 50 percent of state mining company Maaden at the end of 2006, Reuters reported.

Maaden said last month it intended to float a 50 percent stake in an initial public offering but did not specify when.

A state pension fund and a social insurance body will each have the option of acquiring 5 percent of Maaden in the sale, the cabinet said.

This would leave 40 percent for the public offering. The statement also said that Maaden's capital would rise to $2.14 billion, but did not give a comparative figure.

Maaden has embarked on ambitious development projects that include exploiting phosphate reserves in northern Saudi Arabia and mining bauxite for aluminium production as part of a government bid to diversity the economy from reliance on oil. Maaden said last month it would raise annual gold production by 25 per cent to 300,000 ounces from early 2007.

Guinea assembly okays Alcoa/Alcan alumina refinery

Reuters South Africa, South Africa Sat May 6, 2006 10:47 AM GMT

By Saliou Samb

CONAKRY (Reuters) - Guinea's national assembly voted overwhelmingly on Friday to ratify a convention on the planned construction of a 1.5 million tonne-per-year alumina refinery at the northern port of Kamsar by aluminium giants Alcoa and Alcan.

The plant will refine bauxite -- of which Guinea has one third of the world's known reserves -- into alumina which is then smelted into aluminium metal.

U.S. Alcoa and Canadian Alcan plan to build the refinery around 300 km (190 miles) from the West African country's capital Conakry at Kamsar, where the companies already have bauxite loading operations through a joint venture.

Compagnie des Bauxites de Guinee (CBG), the world's top bauxite exporter, is majority controlled by Halco, a joint venture of Alcoa and Alcan.

CBG currently produces around 14 million tonnes of bauxite a year, of which it exports some 12 million tonnes for refining abroad.

Alcoa spokesman Kevin Lowery in New York said the new plant would be operated by Alcoa under the CBG joint venture, with costs shared by Alcoa and Alcan, and produce 1.5 million tonnes of alumina per year.

"The next phase is we will go into the detailed studies that need to be done before construction can begin. There is not a specific date on that," Lowery said. "We have said construction may begin in early 2007, and production could happen in 2009."

Lowery said feasibility studies along with engineering, financing, legal work, and environmental impact assessments costing $25-30 million would begin following ratification by the national assembly.

"That will take about a year to do. From there you go into what the actual cost of the project is. Then, you go to construction," he said. "This is real. We are planning to spend significant amounts of money on the project."

Some members of parliament had complained of being asked to vote on the project before the submission of a feasibility study, but National Assembly President Aboubacar Sompare said the vote had been passed by 58 votes to three with two abstentions.

After ratification by the national assembly, the convention on the refinery must still be promulgated by President Lansana Conte.

Guinean officials have put the initial cost of the project at $1 billion -- less than half the price tag projected for a rival 2.8 million tonne-a-year alumina refinery planned by Canada's Global Alumina in the same region of Guinea, which company officials have said will come on stream in late 2008.

Mines Minister Ahmed Tidiane Souare said that it had been vital to secure parliamentary assent for the refinery to prevent Alcoa and Alcan shifting the project elsewhere.

"If the convention had not been adopted soon, the partners were preparing to transfer it to Ghana," Souare said.

Nearby Ghana already has a sizeable bauxite refining industry.

© Reuters 2006. All Rights Reserved.

Alcan's new CEO no stranger to danger


Globe and Mail Update

Montreal — Richard Evans, Alcan Inc.'s new leader, knows a thing or two about performing under extreme pressure.

A highlight of his 37 years in the aluminum business was a stint in the late seventies and early eighties as works manager for a Kaiser Aluminum facility in the politically unstable West African country of Ghana.

Not only did he turn around the strike-plagued operations in difficult conditions - he was there at a time when the plant "survived three coups and two monetary crises," as Mr. Evans' sprawling CV dryly notes.

(Remember the 1979 headline-grabbing coup leader Flt.-Lt. Jerry Rawlings?) this was in notes mode when it came to back desk. Think it should come out anyway. - barbara Mr. Evans was ultimately rewarded with the title of honorary chief for his contributions to Ghana's economic development.

It's fair to say that in his new job as president and chief executive officer of Montreal-based Alcan - the world's second-largest producer of primary aluminum after Alcoa Inc. - he won't face quite the same set of crisis-management situations.

But as the successor to Travis Engen, he does have his work cut out for him in the wake of two company-transforming moves on Mr. Engen's watch: the blockbuster acquisition of French rival Pechiney SA in 2003 and the later spinoff of Alcan's rolled products division.

Asked about the "vision thing"?this refer to something other than his vision for the company?- I don't think so, I've e-mailed him about it in a recent interview at head office in downtown Montreal, Mr. Evans said that - short term - the top job at Alcan is following through on the $6-billion (U.S.) Pechiney purchase with consistently solid bottom-line results and enhanced profit margins.

"We need to deliver on the promises we made about Pechiney. That's a first priority. If we don't do that, we ourselves are a takeover target," he said.

"That will continue to be the theme for the first year."

Record first-quarter results unveiled last Tuesday (MAY 2) that easily beat the Street's expectations made for an auspicious start.

Longer term, the goal is to return to a growth strategy after digesting Pechiney, said Mr. Evans, 58, a former college track star from Oregon who trained as an industrial engineer and has been at Alcan for about 8 years.

"We will more quickly than previously planned be in a financial position that we could choose to grow again because our debt [to capital] ratio will be coming down more quickly than expected," he said. It now stands at 38 per cent, compared with 40 per cent at the end of 2005. The target is 35 per cent, possibly by the end of this year so long as aluminum prices remain at 18-year-high levels.

Smelter expansion projects at a half-dozen locations are being evaluated, including Kitimat, B.C.; Alma, Que.; Iceland; and Cameroon.

The smelter-expansion program is part of a larger effort to shift smelting capacity away from high-cost areas such as Europe and North America to places like Africa, the Middle East and possibly India, where energy and other costs are lower.

Alcan also tries to locate facilities closer to bauxite resources, Mr. Evans said. Bauxite is the most common aluminum-bearing ore.

Analyst Charles Bradford of Bradford Research/Soleil Securities Inc. in New York said he's confident Mr. Evans - an aluminum veteran on intimate terms with the cyclical nature of the business - won't go running off in all directions opening new smelter operations at the top of the cycle.

So far, Alcan's management team has been "judicious in expanding," and Mr. Evans' comments on the first-quarter conference call about carefully considered growth plans "make eminent sense to me," Mr. Bradford said.

Aluminum supply and demand are in a fine balance these days, he added.

"The aluminum industry has a knack for blowing a good thing and building too much capacity that ends up driving prices down."

Also a key part of Mr. Evans' longer-term vision is the goal of spinning greater profit margins from downstream businesses - such as packaging and engineered products - as opposed to the upstream mining, refining and smelting.

In addition to state-of-the-art smelting technology, the Pechiney deal brought with it a welcome expansion of Alcan's packaging division and an entirely new business - aerospace.

Alcan is now a leading supplier of aluminum products to airline giants Airbus SAS and Boeing Co., and is working on winning over Bombardier Inc.

"We've had discussions with Bombardier and we would be happy to supply them in the future," Mr. Evans said.

He pointed out that Alcan is at full capacity as it tries to keep up with existing demand in a red-hot aerospace market that is driven in part by the need for lighter materials to offset higher fuel costs.

The automotive industry represents a huge opportunity as well, and Alcan is already an important supplier to car makers in Europe.

(Mr. Evans and his wife, who live in Montreal, drive two all-aluminum European luxury cars made with Alcan materials and components, an Audi A8 and a Jaguar XJ8.) But don't ask Mr. Evans about North American auto manufacturers.

"North American auto makers are less innovative than their European counterparts and of course they're suffering the consequences from that," he said.

After fruitlessly trying to win over the North American car industry to the concept of all-aluminum vehicles - "we spent hundreds of millions of dollars and the [aluminum] industry did as well, with very little progress" - Alcan switched its strategy to selling car companies on individual components like bumpers, suspension parts and engine blocks, he added.

"In Europe, we have a much closer working relationship with the auto makers."

Alcoa CEO sees demand keeping aluminum price high

Reuters Tuesday 9 May 2006, 5:12pm EST

By Carole Vaporean

NEW YORK, May 9 (Reuters) - Alcoa Inc. (AA.N: Quote, Profile, Research), the world's No. 1 aluminum producer, sees strong demand running well into the future keeping prices high, barring a major unforeseen event like a Chinese recession or a terrorist act, Chairman and CEO Alain Belda said on Tuesday.

Speaking to analysts at the Merrill Lynch Global Metals, Mining and Steel conference in Florida, he said strong demand has been primarily driven by the urbanization of large populations in countries like China and India.

Belda's remarks were monitored in New York via webcast.

"Supply and demand, we think, is very robust. With the exception of some terrorist act or some big event in China, I don't see that these supply/demand fundamentals are going to change too much," Belda said. "The world is continuously growing and the consumption of aluminum is growing with it."

On Tuesday, investors pushed London Metal Exchange aluminum <MAL3> over $3,000 a tonne for the first time since 1988.

Not only has heavy demand sent aluminum to 18-year highs, it has also brought inventory levels down to 31 days worth of global aluminum supply, about half the level seen in 2003.

Increased demand for cars, airplanes and commercial transportation will require manufacturers and engineers to implement more intelligent designs with lighter products.

With the number of vehicles on the road seen doubling in 10 years, he said lighter cars will be needed to cut emissions.

"Lighter cars is where we come in," he said, comparing aluminum with heavier steel used to build most cars.

Along with healthy demand, he added that soaring input costs have driven metal prices to recent peaks, including huge increases in alumina, anode coke, oil and natural gas and transportation costs.

"The world needs significant upstream capacity. We are doing one share of that, but that's never going to be fast enough and I don't think we can catch up," said Belda.

He said the company sees an aluminum market deficit of 500,000 tonnes in 2006 and 200,000 tonnesin 2007. In alumina, Alcoa forecasts deficits of 400,000 tonnes in 2006 and 200,000 tonnes in 2007.

"This is a directional range of what we think will happen, and we see the market continuing to be short for quite some period of time," he added.

To meet demand, Alcoa continually looks for places to set up new operations around the world, but Belda said the emphasis is on locating low-cost sites with available power supply.

"We're preparing our plan to be competitive wherever we are and we have alternatives in low-cost country facilities," he said.

In China, where Alcoa has been investing since 1993, Belda said it has a structure that is not only concerned with running operations, but also looking for potential acquisitions .

"I don't think it's an option to not participate in China. If they have built it cheaply, or have a competitive advantage because they have been subsidized by the government or whatever it is, we'll take advantage of that. So far, we're pretty happy with the investments we've made," the chief executive said.

Belda told conferees final talks were set for the end of May to finalize a deal at Pingyao, China.

"The big issue was energy. We said we would do the deal when we had assurance of a long-term contract. At the moment, we have the opportunity to build a hydroelectric facility close to Pingyao. So we're in final discussions at the end of this month. That doesn't mean it will get completed then," he added.

To be competitive in the U.S., Belda said Alcoa is preparing for labor talks with the United Steel Workers whose umbrella contract covers 8,800 union workers at Alcoa plants throughout the U.S. and expires on May 31.

While both sides are close on most issues, he said, healthcare remains the sticking point.

"It's not about the total cost, it's mostly about the behavior," he said, adding that users of medical benefits should understand their costs and pay a share of them.

All 129,000 Alcoa employees worldwide contribute to their medical costs except those covered by the USW pact, he said.

While Alcoa was prepared for a walkout, Belda said, "I hope we're not going to have a major strike."

© Reuters 2006. All Rights Reserved.

Alcan Refocuses Specialty Aluminas Business 10th May 2006

Alcan has announced the reorganization of its global speciality aluminas business, entailing the gradual, yet permanent shut-down of the Company’s Specialty-Calcined Alumina plant (UPCA) in Jonquière, Quebec by year end. In addition, a number of UPCA’s customers will now be served by Alcan’s Gardanne plant in France.

"For quite some time now, UPCA has not been profitable. This decision regarding the site was taken following an in-depth analysis of all possible alternatives, as well as concerted efforts to identify and implement solutions within its current collective labour agreement," said Jacynthe Côté, President and Chief Executive Officer, Alcan Bauxite and Alumina.

"Alcan is now focused on working with its customers to define next steps and meeting promptly with union representatives to minimize impacts on employees," concluded Côté.

The alumina processed by UPCA, a small unit of Alcan’s Vaudreuil Works, will now be redirected towards aluminum production. The plant employs 85 people and produces 55,000 tonnes of specialty alumina for the ceramic and refractory market. The entire Vaudreuil Works employs approximately 1,000 people and has an annual alumina production of over 1.4 million tonnes.

Alcoa trains managers to run plants in case of strike

WSTM-TV, NY 10-May-2006

PITTSBURGH Alcoa, the world's largest aluminum producer, is training managers to operate 15 U-S plants should 9-thousand union workers strike next month.

The company's five-year contract with the United Steelworkers expires May 31st.

A strike is possible because Alcoa wants those workers to start paying part of their health insurance premiums for the first time.

Company spokesman Kevin Lowery says the company would use salaried employees to keep the plants running, and would hire temporary workers if necessary.

He said Alcoa and the union are both hoping to avoid a strike.

James Robinson, the union's chief negotiator, said the company does not have as many managers to cover for striking workers as it once did.

Alcoa has 129-thousand employees in 42 countries. Its Massena Operations in northern New York is the longest continually operating aluminum facility in the world and the largest private employer north of Syracuse with 14-hundred employees.

Giant hydropower project jeopardized by dispute between Tajikistan, Russian investor

Calgary Sun, Canada -2006-05-10 12:16:04


Concrete mixers are all that's left of a grandiose Rogun hydroelectric power station.

ROGUN, Tajikistan (AP) -- A rusty excavator is stuck partway up a mountain, towering above crumbling control rooms, tunnels and corroding machines and pipes -- an ugly scar against the snowcapped peaks of the Pamir Range.

It's all that remains of a grandiose Soviet project: the Rogun hydroelectric power station, which would have created the highest dam in the world and made Tajikistan a regional electricity supplier in Central Asia.

The project died with the 1991 Soviet collapse. Now even poorer, after a five-year civil war, Tajikistan badly needs to complete it. A long-sought investor -- Russian Aluminum, the third-biggest aluminum producer in the world -- offered to revive the project two years ago, but Rogun remains deserted: The Tajik government and Rusal cannot agree on the kind and size of dam to be built.

The project is crucial for the country's economic future, said Sukhrob Khoshmukhamedov, an independent Tajik economic analyst. "We have long dreamed of finishing this project," he said.

Tajikistan's economy is a shambles, with 75 percent of people living below the poverty line, according to U.N. figures. Up to one in six of Tajikistan's 6 million people work in Russia as seasonal laborers, by some estimates, sending home a sum greater than the $200 million national budget. Trafficking drugs from neighboring Afghanistan is another income source.

The country's steep, fast-running mountain rivers are Tajikistan's greatest economic asset. The nation's overall potential hydropower capacity is 527 billion kilowatt hours of electricity a year -- the largest in the world.

The Rogun project, designed in 1976, was the biggest of several that Soviet planners had in mind for Tajikistan. Workers had built the dam on the Vakhsh River, about 74 miles east of the capital, Dushanbe, up to 131 feet high when funding ran dry in 1992. While the Moscow-backed secular government and Islamic opposition were fighting a civil war, flooding washed away the dam.

Despite Rusal's willingness to build the dam, the government is withholding approval for the company's plans.

Rusal wants to build a 918-foot concrete dam to generate electricity primarily for its own use. The government wants the dam to be 180 feet higher and built out of earth and rock, just as the original Soviet plans specified.

Rusal says its design would trim $200 million off the project's estimated $1 billion cost and save four years of work. The government says the Soviet design is safer and will generate more electricity.

The government wants to export electricity to China, Russia, Pakistan, Kazakhstan and Afghanistan and has already begun talks with other countries to build power transmission lines, Deputy Energy Minister Akram Sulaymonov said.

The government envisions a dam that could generate up to 13.4 billion kilowatt-hours of electricity a year, he said. Tajikistan currently produces 17 billion kilowatt-hours annually -- 4 billion short of what it needs.

To break the deadlock, both sides agreed to allow an unnamed independent engineering company chosen by the World Bank to conduct a study and submit its design recommendations by June 15.

Aluminum production is a power-intensive industry and Rusal sees Tajikistan as a cheap source of electricity.

The company hopes to build a new aluminum factory in the country by 2013 with an annual capacity of 300,000 tons (330,700 short tons), said Rusal's Tajikistan representative, Konstantin Zagrebelny. The company is also eyeing acquiring Tajikistan's state-owned aluminum company TadAZ, when its planned privatization goes through and plans to expand TadAZ's capacity by 100,000 tons (110,200 short tons) a year, Zagrebelny said.

Overall, Rusal plans to invest about $2 billion in Tajikistan over the next decade, with the dam accounting for half that amount. But Zagrebelny stresses the company's priority is to consume electricity, not sell it.

For now, darkened, empty windows stare out of shabby apartment blocks in the town of Rogun, abandoned by workers who once came from all over the Soviet Union to build the dam.

The local market has been reduced to a single vendor selling vegetables out of a truck. The town's population has shrunk to 8,000 from 25,000 in the past decade -- and it has no regular electricity supply.

Resident Gulmurov Djabirov, 31, has been going to Russia for seasonal work for eight years. He says he doubts work will ever resume on the dam.

"I don't see any machines here, any cars," he said. "But if it gets moving, I will no longer have to go to Russia."

Clarendon Alumina borrowing to pay debt

Jamaica Gleaner, Jamaica Wednesday | May 10, 2006

Susan Gordon, Staff Reporter

WORLD ALUMINIUM prices are at record levels, but Government-owned Clarendon Alumina Production Limited (CAP) is taking out short-term loans and advances to 'smooth out' its cash flow, says general manager and chief financial controller Winston Hayden.

Last Friday the Financial Gleaner reported that CAP was projecting a loss of US$2.76 million for the fiscal year 2006/2007. This loss follows an estimated loss of US$9.48 in the previous fiscal year. CAP is in a 50/50 joint venture with Alcoa at the Jamalco plant in Clarendon.

"In order to 'smooth out' it's cash flow over the medium term, the company (CAP) is refinancing its debt on more favourable terms. It has made use of short-term loans and advances in the interim," Mr. Hayden said in a written statement.

He ascribed CAP's financial challenges to the continual rise in record-level oil prices, unprecedented harsh weather conditions and a strike at the end of 2001.


"There's a loss projected for 2006/2007 because although the operation is expected to perform well, the cost of oil, the most expensive raw material used in the process, is expected to remain high," Mr. Hayden stated referring to the projected US$2.76 million loss.

In addition, he said the price of caustic soda, another key raw material had roughly doubled within the last year. What seemed to have impacted heavily on CAP's operations according to Mr. Hayden, is the the 'wildcat' strike at the end of 2001 which he said cost the company approximately US$20 million.

He explained that although a level of profitability is expected for the company in the near future owing to favourable market conditions for alumina, CAP will not recover in full in one year. The results of Jamalco's expansion plans which started three years ago to increase the Halse Hall Clarendon refinery production from 1.25 million metric tonnes per annum to 2.65 tonnes will not materialise in time to take the company out of its woes this year.

This expansion plan cost US$77 million in the first stage and another US$1.2 billion ultimately, according to public affairs and communication officer for Jamalco, Brian Doy.

While CAP is expecting losses this year, Alcoa last month reported record profits for its last quarter. Mr. Hayden said Jamalco is a competitive alumina operation rated among the most efficient plants in the world.


Norman DaCosta, a former board member of the bauxite industry watchdog, the Jamaica Bauxite Institute Board, said that blaming the losses on high oil prices is a contrived explanation.

Firstly, Mr. DaCosta said the high prices for alumina of over US$670 per tonne and aluminium of over US$2,700 per tonne on the world market more than compensate for the increase in world oil prices. He said the increases also cover the hike in costs for other inputs such as caustic soda.

And hurricanes should not have been an insurmountable profit barrier either as Mr. DaCosta said it is industry practice to store a stockpile of bauxite in covered domes to last for as long a one month.

Alcan Iceland smelter gets expansion power

Metro Toronto, Canada Thursday, May 11, 2006 7:43:37 AM ET

MONTREAL (Reuters) - Alcan Inc. <AL.TO> <AL.N> said on Thursday it had obtained 40 percent of the energy needed to more than double the capacity of its 180,000 tonne ISAL smelter in Iceland.

Alcan, the world's second-largest maker of primary aluminum, said that under an agreement signed with Reykjavik Energy, it would buy 200 mega watts of geothermal power beginning in 2010 for 25 years.

Alcan said it is negotiating with Iceland's national power company, Landsvirkjun, for the remaining 60 percent of energy needed to power the project to expand the smelter's annual capacity by 280,000 tonnes.

The company would add one potline using AP35 technology to boost capacity to 460,000 tonnes.

The ISAL smelter employs 470 people. The expansion project would represent an 8 percent addition to Alcan's global aluminum smelting capacity of 3.5 million tonnes a year.

ISAL is one of roughly a half dozen expansion or greenfield projects Alcan is reviewing. The company has said those selected to go forward would depend largely on the power resources available.

SUAL aluminum group considering plant construction in Far East

RIA Novosti, Russia 12/ 05/ 2006

KRASNOYARSK, May 12 (RIA Novosti) - Siberian-Ural Aluminum Company (RTS: SUAL) said Friday it was in talks with hydroelectric company HydroOGK over construction of an aluminum plant in Russia's Far East.

"We are holding consultations with HydroOGK and we will pick one of four possible construction sites for a hydrolysis plant with capacity of 1 million metric tons in July," said SUAL Vice President Vasily Kiselyov.

He said SUAL, one of the world's top-10 aluminum companies, would consult with HydroOGK and electricity monopoly Unified Energy System, which owns 100% of the hydro company, on a weighted average electricity price for the plant for the next 10-15 years.

Kiselyov said that fixing a long-term electricity tariff would be important for the plant in terms of price formation for its products, given that a one-cent rise in the tariff increased the cost of a ton of aluminum by $150.

Established in December 2004, HydroOGK holds 15 stakes in Russian hydroelectric power plants, or half of the country's total hydroelectric resources.

Kiselyov said global aluminum markets were favorable as demand was increasing by 5.5% annually.

"There is a shortage of aluminum on the market, which is why prices will remain high," he said, adding that the rapidly developing Far East needed new energy facilities.

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

Boguchansk HPP to be commissioned in 2009 - senior manager

RIA Novosti, Russia 12/ 05/ 2006

KRASNOYARSK, May 12 (RIA Novosti) - The first part of a new hydroelectric plant in central Siberia is expected to be commissioned in 2009, a deputy director at RusAl said Friday.

The 3,000-megawatt Boguchansk facility in Krasnoyarsk Territory is being built as part of a partnership agreement between the aluminum giant and electricity monopoly Unified Energy System to set up an energy and metals conglomerate, which will also include an aluminum smelter with an estimated capacity of 600,000 tons.

"We believe the first leg of the Boguchansk will be operational in 2009," Alexander Lifshits said, adding that RusAl would seek co-investment to build the station and an aluminum plant from the Investment Fund, set up in 2005 to develop major nationwide investment projects with joint public-private financing.

"RusAl board has decided to sign a partnership agreement and to approve an application to the Investment Fund," Llifshits told a business forum in the Siberian city of Krasnoyarsk.

Prime Minister Mikhail Fradkov said in December the government expected the first leg of the Boguchansk HPP would be commissioned in 2010.

Investment in the project is expected to top $5 billion.

Lifshits, a former finance minister under president Boris Yeltsin, said the company would take responsibility of social issues, including housing for employees, in exchange for tax privileges from the government.

Governor signs bill (again) that could save smelters

Henderson Gleaner, KY May 13, 2006

By CHUCK STINNETT, Gleaner staff 831-8343 *

It was legislation so important that it unanimously passed both houses of the legislature and was signed into law by Gov. Ernie Fletcher while he was in the hospital in February.

The language in House Bill 275 is difficult to comprehend. But its intent is straightforward: To try to help save 1,400 jobs of the best-paying jobs in western Kentucky.

And it is important enough that corporate executives traveled from California and Canada to watch the governor sign it a second time, this time just for show.

The new law opens the door for Big Rivers Electric Corp. to ensure that Alcan's Sebree aluminum smelter and Century Aluminum's smelter in Hawesville will have a guaranteed, long-term source of power.

"It doesn't guarantee that a contract will happen," Fletcher told a roomful of corporate, utility and community officials at his ceremonial signing of House Bill 275 at the Kenergy Corp. headquarters here Friday.

But without it, officials say the deal -- which still requires months of negotiations and regulatory review -- would probably be dead.

Big Rivers sold power to the two smelters for years. But as part of its bankruptcy reorganization, Big Rivers in 1998 leased its power plants (including the city's Station Two generating station) to LG&E Energy Corp. (now called E.On U.S.).

Western Kentucky Energy, an LG&E/E.On subsidiary, has operated the plants ever since.

As part of the bankruptcy, the smelters won the right to buy part of their power from other suppliers. By 2011, they are to buy all of the huge amounts of electricity they need on the open market.

In the years since then, the smelters have learned that cheap power isn't so easy to find. And LG&E/E.On has learned that it can lose a lot of money running power plants that sell much of their power on the open market.

So E.On wants out -- and the smelters want back in.

House Bill 275, which was co-sponsored by state Rep. Gross Lindsay of Henderson, could help make that happen. Big Rivers is willing to accept a hefty sum of money to terminate the lease and resume operating its power plants. It has agreed to supply power to the smelters until 2023.

But while Big Rivers is in much healthier financially than a decade ago, its creditors are concerned about the risk it would assume relying on two customers -- the smelters -- to buy about half of its power.

House Bill 275 provides a safety valve, changing state law to give the Big Rivers co-op the right to sell more power to other utilities than was previously allowed. That could ensure Big Rivers a way to sell surplus power in the event that one or both smelters should curtail operations someday in the future.

But in the meantime, Fletcher said, the legislation could help save the smelters.

"There are 1,400 jobs at stake, and this is an essential piece of legislation to save those jobs and potentially help the companies expand," the governor said.

Among those on hand were Yvon D'Anjou, president of Alcan's Primary Metals Group in Montreal, and Peter McGuire, vice president and associate general counsel of Century Aluminum in Monterey, Calif.

Henderson County Judge-executive Sandy Watkins, a former Alcan supervisor who has led efforts for more than two years to find a solution to the smelters' pending power supply crisis, hailed the passage of the bill earlier this year.

"Today just shows what can happen when people are working together to find a solution to a major, major problem," Watkins said.

China's electrolytic aluminum output seen at 9 mln tons this year

Forbes 05.14.2006, 11:48 PM

BEIJING (AFX) - China is expected to produce nine mln tons of electrolytic aluminum this year, the China Security Journal reported, citing an industry official.

Pan Jiazhu, vice president of the China Non-Ferrous Metals Industry Association, was quoted as saying that electrolytic aluminum output in the first quarter rose 15.83 pct year-on-year to 2.04 mln tons, with total 2006 output expected to hit nine mln tons.

Electrolytic aluminum production capacity is expected to reach 11.6 mln tons by the end of this year, Pan added.

China's electrolytic aluminum producers posted a net loss of 148 mln yuan in the first quarter, down from a 350 mln yuan loss in the same period last year.

(1 usd 8.00 yuan)

Analysts say strike at Alcoa would have minimal effect

Fort Worth Star Telegram, TX 15-May-2006

Associated Press

PITTSBURGH - Alcoa Inc. is facing a possible strike by thousands of U.S.-based unionized workers, but the effect on the world's largest aluminum maker would be negligible, analysts say.

The 9,000 workers are threatening a walkout over contentious issues such as health care benefits. They represent about 20 percent of the company's U.S. employees, but only about 7 percent of its 129,000-strong global work force.

Alcoa says its managers have been shadowing the workers in recent weeks and are poised to take over their jobs at 15 plants nationwide, a tactic used by the company during its last strike two decades ago.

The move comes ahead of talks between Alcoa and the United Steelworkers starting Thursday in St. Louis to negotiate a new five-year contract. The current one expires at the end of the month.

"I think Alcoa has the upper hand here and I don't see how they could come out of it in any bad way," said Robert E. Brooks, editor of the Cleveland, Ohio-based trade journal Metal Producing and Processing. "The trend is for the corporations to have the advantage in these types of negotiations."

Alcoa's expansion abroad and labor's diminishing role over the past 20 years have left the unionized workers at a disadvantage and the fate of costly U.S.-based primary aluminum operations uncertain, he said. The facilities also are less reliant on labor because of technology and more-efficient processes, Brooks said.

The relationship between productivity and manufacturing operations is "a completely different metric than it was in 1986," Brooks said, noting that Alcoa's position is further strengthened by its current profitability.

Alcoa earned $1.2 billion on sales of $26.1 billion last year, with profit more than doubling in the first quarter of this year compared with the same period last year because of strong demand and high aluminum prices.

"I doubt it (a strike) will have any significant impact on Alcoa's operations," Brooks said. "I doubt it will have a very significant impact on the market, either, because there are lots of other suppliers of those products."

Alain Belda, Alcoa's chief executive, has said health care costs will be the key issue at the upcoming talks. He has defended a plan to cut costs by requiring workers to pay a portion of their health insurance, just as union members do at 11 plants outside the national contract.

"Though it is never pleasant to go through a labor strike, I am very conscious of the consequences of not confronting the health care issue," he told analysts last month. "I will not mortgage the future of the company by having a runaway cost escalator."

Alcoa's proposal also includes replacing pension plans with a 401(k) plan for newly hired union workers and allowances for the company to outsource more work.

James Robinson, the union's chief negotiator, said he opposes offering different wages and benefits to new workers and that Alcoa should pay its fair share of health care cost increases.

He said the shadowing of union workers by managers has "been a cause of some friction," and warned that Alcoa once had managers capable of running the facilities, but that's "a lot less true today."

Charles Bradford, an analyst at Bradford Research/Soleil Securities in New York, said Alcoa has "changed a lot in the past five years - a huge number of acquisitions, a bigger company."

The domestic plants are much less important today and could be phased out, Bradford said.

"With prices this high, it's not going to happen too fast, but the handwriting's on the wall if any of these plants aren't competitive," he said.

A strike would probably hurt Alcoa's shipments, but could also drive up the price of aluminum as supply tightens, said Bill Selesky, an analyst at Argus Research Corp.

The proposed strike would affect plants from Indiana to North Carolina to Texas, facilities where there are fewer salaried and union workers than there were 20 years ago, according to Alcoa spokesman Kevin Lowery.

Mark Berger, a professor at the University of Missouri Law School in Kansas City, Mo., said "this is something industrial unions are finding all over the place, that their economic power is not what it once was, making negotiations more difficult.

"Ultimately, compromise will have to come out of it," he said.


Alcoa Inc.:

United Steelworkers:

Century and Minmetals Enter Into Bauxite and Alumina Joint Venture

MONTEREY, CA -- (MARKET WIRE) -- 05/15/2006 -- Century Aluminum Company (NASDAQ: CENX)

announced today that they have entered into a joint venture agreement with Minmetals Aluminum Company to explore the potential of developing a bauxite mine and associated 1.5 million ton alumina refining facility in Jamaica.

The first stage of the project, a pre-feasibility stage, will assess the quality and quantity of bauxite reserves. This stage is expected to take approximately 18 months. If this stage is successful, a full feasibility study would follow. The parties estimate that the mine and alumina refinery could be operational within three years following the completion of the feasibility study.

"Growing upstream into bauxite and alumina is central to our strategy," said president and chief executive officer Logan W. Kruger. "We are pleased with the working relationship we have developed with Minmetals, who we believe will be a strong partner. It is good to be working in Jamaica, where we already have a presence and we appreciate the support we have received so far from the Jamaican government."

Century's primary aluminum capacity will stand at 745,000 mtpy by the fourth quarter of 2006. The company owns and operates a 244,000 mtpy plant at Hawesville, Kentucky; a 170,000 mtpy plant at Ravenswood, West Virginia; and a 90,000 mtpy plant at Grundartangi, Iceland that is currently being expanded to 220,000 mtpy. The company also owns a 49.67-percent interest in a 222,000 mtpy reduction plant at Mt. Holly, South Carolina. ALCOA Inc. owns the remainder of the plant and is the operating partner. 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


Minmetals to buy alumina refineries

The Standard, Hong Kong Tuesday, May 16, 2006

Minmetals Resources, the Hong Kong- listed unit of the mainland's largest metals trading group, is in talks to acquire two alumina refineries from its parent.

Yvonne Lee

Minmetals Resources, the Hong Kong- listed unit of the mainland's largest metals trading group, is in talks to acquire two alumina refineries from its parent.

"Our controlling shareholder granted us privilege to acquire its assets by 2007, as there is not much time left before the deadline, so we should speed up the feasibility studies of any possible acquisitions," president Xu Huizhong said Monday.

The company intends to acquire 51 percent interest in Shewin Alumina, an alumina refiner in the United States, and 33 percent interest in Guangxi Huayin from parent China Minmetals Non- ferrous Metals, who holds a 58.86 percent stake in Minmetals Resources.

Huayin Alumina, an alumina refinery project in southern China, aims to start production in 2007 with an annual capacity of 1.6 million tonnes. Aluminum Corp of China, or Chalco, the mainland's dominant producer of the metal, also has a 33 percent interest in Huayin Alumina.

To further diversify its business, Minmetals Resources may also buy more aluminum smelters in the mainland, although 80 percent of the country's aluminum smelters are losing money.

"We see the tough environment of the industry provides us a valuable opportunity for expansion because we can buy targets at lower costs," Xu said.

But Minmetals Resources has yet to decide on how to finance the acquisitions. "We currently have no plan to sell shares as we have 980 million yuan (HK$949.13 million) cash on hand and positive cash flow," he added.

Meanwhile, Xu expects a correction in the price of alumina in the near term after the price of the metal hit a record high this month on the London Metals Exchange.

Minmetals Resources said the net profit margin of its trading business can be maintained at 9 percent this year through hedging, reducing inventories, and securing long-term contracts.

China's alumina output outstripped demand last year prompting the government to implement measures to reduce the overcapacity.

Minmetals Resources expects Beijing's tightening policies not to have an adverse impact on its efforts to improve underperforming projects.

Shares of the company slumped 4.04 percent to end at HK$2.375 Monday. This year, the company's shares have gained 26 percent.

Gazprom Adds Romania to Gas Corridor

Kommersant, Russia - May 15, 2006

Gazprom’s Gazexport has sealed contracts with three gas companies of Romania - Romgaz, Transgaz and Conef. The contracts will provide to Gazprom the long-term access to gas shipping facilities of Romania, allowing it to step up gas deliveries to Turkey and start gas export to Israel. In addition, Gazprom will increase gas deliveries to Alro Slatina aluminum plant with no intermediary services of Germany.

"We have made long-term contracts for gas deliveries with our Romanian partners, Conef, Romgaz and Transgaz," Alexander Medvedev, deputy chairman of Gazprom management committee, told reporters in Bucharest Friday. The news conference was held to shed light on Medvedev’s talks with Theodor Stolojan, economic advisor to Romanian president, and Ioan-Codrut Seres, minister of economy and commerce of Romania.

Seres said Gazprom clinched a deal with Romgaz to set up a venture and construct an underground facility of gas storage with capacity of 2 bcm.

The contract that Gazexport concluded with Transgaz spells out gas transit terms via Romania. Gazprom will not only construct a storage facility but also deliver gas to Romanian market and to markets outside of Romania, Seres specified.

Russia has been shipping gas to Romania since 1979. For Gazprom, Romania is a vital transit country for shipping gas to Turkey, the third biggest consumer of Russia’s gas. Moreover, via Romania, Bulgaria and Turkey, Gazprom may reach the states of the Middle East and launch gas deliveries to Israel.

Another achievement of Gazexport is preliminary agreement of Romanian gas trader, Conef SA, to enter into a long-term contract for between 40 bcm and 50 bcm of Russia’s gas to be delivered to Marco Groupe from 2010 to 2030. Marco Groupe controls Alro Slatina aluminum maker, and the contract will allow Gazprom to ship gas to Romania without intermediary services of WIEE and WIEH.

KrAZ aluminum plant net profit in 1Q06 doubles to $83 mln

RIA Novosti, Russia 16/ 05/ 2006

MOSCOW, May 16 (RIA Novosti) - Krasnoyarsk Aluminum Plant (RTS: KRAZ) net profits in January-March 2006 doubled year on year, to 2.25 billion rubles (about $83 mln), the company said in a press release Tuesday.

Revenues for the world's second largest aluminum producer in the reporting period were 9.04 bln rubles (about $330 mln), 11.7% up on the first quarter of 2005.

Sales profits were 3.25 bln rubles (about $120 mln), up 12.8% year on year. Pre-tax profits rose 3.05 bln rubles (about $113 mln), up 18.7%.

KrAZ accounts for 27% of Russia's and 3% of global aluminum output. It is 99.36% owned by RUSal, which is itself 100% owned by metals magnate Oleg Deripaska.

Steelworkers vote to OK strike if Alcoa talks fail

ABC News May 17, 2006

NEW YORK (Reuters) - An overwhelming majority of United Steelworkers (USW) union members at 15 Alcoa Inc. <AA.N> plants voted to authorize strikes if negotiations on a new labor contract fail, the union said on Wednesday.

The Master Agreement between the union and the world's biggest aluminum producer expires on May 31 and negotiators for both sides are in St. Louis to begin talks on Thursday.

Union members gathered last week to set priorities and to vote to give its negotiators the clout of a strike mandate.

The two sides have been holding informal discussions for the past year, and both parties have said they see eye-to-eye on most issues. But healthcare, including retiree benefits, remains the sticking point.

"Alcoa is making record profits. We believe that our members have contributed significantly to those profits and we want a contract that provides for the economic security of our members and retirees," said the union's lead negotiator Jim Robinson, Director of District 7.

The union said its slogan for the Alcoa talks is "Leave no one behind," and Robinson said in Wednesday's press release, "We will not stand for second class citizens in our workplace or in retirement."

For its part, Alcoa has said the current medical plan, in which union workers pay no premiums for healthcare, was out of line with 80 percent of its U.S. employees who pay for a part of their healthcare insurance coverage.

In several recent speeches, Alcoa CEO Alain Belda said the company's position was not about total cost, rather that users of medical benefits should understand their costs and pay a part of them along with the rest of Alcoa's employees.

Belda also said the company was preparing for the possibility of a strike by training outside workers and taking other similar measures, but added he hoped there would not be a strike.

The expiring labor agreement covers about 9,000 of Alcoa's more than 45,000 U.S. employees, at plants in Warrick and Lafayette, Indiana; Badin, North Carolina; Richmond, Virginia; Massena, New York; Hot Springs and Gum Springs, Arkansas; Wenatchee, Washington; Davenport, Iowa; Louisville, Kentucky; Alcoa, Tennessee; and Point Comfort and Rockdale, Texas.

Copyright 2006 Reuters News Service

Alcan Seeks to Buy Aluminum Product Plants to Expand (Update3)

May 18 (Bloomberg)

Alcan Inc., the world's second- largest aluminum producer, aims to expand by buying companies that make aluminum products rather than primary metal, Chief Executive Officer Richard B. Evans said.

``It's very likely we will continue to make acquisitions in the downstream business, less likely we'll do so in the upstream business,'' Evans said in an interview in Beijing today. ``The main reason is commodity prices are high. We are in the strong part of the cycle; there are considerable premiums that would have to be paid in order to make those acquisitions.''

Prices of aluminum and other metals have soared on demand led by China, the world's biggest consumer of most metals including copper, steel and aluminum, and on buying by pension and hedge funds seeking greater returns than stocks and bonds.

Evans ``has been looking at small acquisitions to fill gaps in the company's existing portfolio,'' said Tony Robson, a Sydney-based analyst at Global Mining Research. Still ``Alcan makes its best margins upstream rather than downstream.''

Aluminum for delivery in three months gained 65 percent in the past year in London, reaching $3,310 a ton on May 11, the highest since at least 1988, Bloomberg data shows. The metal traded at $2,880 a ton today.

Alcan, which more than doubled its net income to a record in the first quarter, expects drivers for profit growth to ``continue as strong in the second quarter,'' Evans said today.

``We have inventories at low and healthy levels and we have strong demand,'' he said.

Increased Shipments

The company boosted shipments of aluminum used in cars, beverage cans and aircraft and raised prices 19 percent on average in the first quarter. Evans expects global demand for primary aluminum to exceed supply by 300,000 tons this year.

Alcan said on May 2 net income doubled to a record $453 million in the first quarter, beating analysts' expectations, as the price of the light metal used in beverage cans and aircraft rose. Montreal-based Alcan's shares have risen 41 percent in the past year, outperforming the 15 percent gain in Alcoa Inc., the world's largest aluminum producer.

Alcan generates annual revenue of about $500 million from its operations in China, Evans said. In China, the company operates 11 plants, including packaging factories, an extrusion plant and has a 50 percent stake in the Qingtongxia smelter in northwestern China.

``We have the opportunity of making further investment'' in the joint venture in China, said Evans. ``It is one of the six or seven opportunities that we have in the smelting business around the world,'' he said today.

Alcan will decide by year-end which of the six or seven projects they will go ahead first, Evans said.

Alcan is also considering investments in projects including expansions of smelters in Quebec, Iceland and Cameroon. Others include the doubling of an as-yet-unbuilt smelter in the Persian Gulf state of Oman, and a new plant in South Africa.

To contact the reporter on this story:

Xiao Yu in Beijing at

No definite start date for Alcasa Line V aluminum production project, IL 19-May-2006 (Harvey Beltran): Venezuelan aluminum reducer Alcasa wants to resume the Line V production project, where construction had been due to start in the first quarter of 2006.

In February, the company announced that it would begin preliminary works on Line V in 1Q 06 but it still has not begun and there is still no definite start date.

"So far only some groundwork and some of the basic engineering has been done," an Alcasa official told BNamericas.

Alcasa has put together a team to develop the objectives, strategies, policies and plans aimed at reinstating the Line V project, according to the official.

The team has received backing from the president of state holding company CVG Victor Alvarez, who also serves as Mining & Basic Industries (Mibam) Minister, to seek out solutions to project obstacles.

Venezuela's government will assume 51% of the total cost of US$685 million for the construction of Line V, and Alcasa is looking for an investor to cover the remaining 49%. "The president [Carlos Lanz] has been meeting with investors and when something is finalized we will announce it," the official said.

The Line V project would help increase primary aluminum output by close to 240,000 t/y, bringing production at the state-owned reducer to 450,000 t/y.

The Alcasa plant is in the Matanzas industrial zone in the city of Puerto Ordaz in eastern Venezuela. The company is 92% owned by state-holding company CVG, and the remaining 8% is the property of US-based Alcoa.

Shining Interest: Russian investment promises a future in foil for Armenia

Issue #20 (190), May 19, 2006 |

Suren Deheryan and Arpi Harutyunyan, ArmeniaNow reporters

After shutting down as a victim of post-Soviet fallout, Armenal aluminum plant reopened in late 2005 with a $100 million Russian-based investment, and a year of large-scale renovation that should make it one of the three largest foil-producing factories in the Commonwealth of Independent States by 2008.

A $100 million Russian investment restarted the plant

Opened with great fanfare by Russia’s prime minister, and Armenia’s president on the outskirts of Yerevan, Armenal represents one-fourth of Russia’s total investment in Armenia – a number that is growing rapidly as Russian businessmen are more and more looking south for money-making opportunities.

Now the only foil producer in the Caucasus and Middle Asia, Armenal hopes to produce 25,000 tons of product, primarily for home and commercial use, in its first year.

If its ultimate renovation plans are realized, by the end of 2007 Armenal will be producing 12 percent of all the foil in the CIS (representing 12 former Soviet countries, of which Armenia is the smallest).

Armenal restarted operations using pre-processed materials. According to the plant’s director general Georgi Avetikian, by this summer Armenal will be ready to process raw materials into aluminum. "Starting at that stage the plant will become an autonomous enterprise and will receive raw materials from the Russia-based Rusal enterprise," says Avetikian.

Already, Armenal is processing some 650 tons of aluminum ribbon and is on track to begin exports to Europe and the United States.

One of Armenia’s largest enterprises since the Soviet times, the Kanaker Aluminum Plant was renamed Armenal after becoming the property of Rusal in 2000. Rusal, which operates a smelting plant in Siberia, is one of the three largest aluminum producers in the world. It produces 75 percent of all of Russia’s aluminum and 10 percent of world output.

In acquiring the plant, Rusal beat out Bamo (a Russian firm led by an Armenian, Murad Muradian, which recently purchased the Karen Demirchian Sport & Concert Complex in Yerevan for $5.7 million). The French IGET company and Petersburg Foil Plant had also expressed interest in the Kanaker factory at some point.

The plant will eventually be the third largest foil producer in the CIS

Rusal purchased a 44 percent stake, paid for in raw materials. The remaining 56 percent stake in the enterprise (of which 30 percent belonged to the government and 26 percent to the plant’s employees) remained under the government’s control until 2003.

In that year, Rusal became the sole owner and renamed the plant "Armenal". To secure ownership of the plant, Rusal took on the government’s share, including a $1.7 million debt. Following a decision of the board of shareholders, Rusal bought the remaining 26 percent stake for $500,000 and, although the shares nominally belonged to employees, that money was transferred to the state budget, as the shares became virtually worthless due to the debt.

In the estimation of Rusal’s vice-director Alexander Livshits, the complete makeover of the facility raises expectations for it to become one of the most efficient aluminum product manufacturers in the world.

Re-equipping the plant cost $70 million, of which $20 million was invested by Rusal and the rest taken in loans from German banks.

"Armenia and Russia are strategic partners, and we look to the future with optimism," Russian Prime Minister Mikhail Fradkov said during his visit to Armenia in 2005 to attend Armenal’s reopening ceremony. "The investment in Armenal is a considerable share of Russia’s investment participation in Armenia’s economy. It does not represent the real potential of our two countries, but it may be a good start."

From bauxite to patties

Jamaica Observer, Jamaica - May 18, 2006

Diplomat sees bright future for trade between J'ca, T&T

Desmond Allen, Executive Editor - Operations

When the figures are totted up, the balance of trade between Jamaica and Trinidad and Tobago is distinctly in favour of the twin-island state in the southern Caribbean. That, outgoing Trinidad and Tobago High Commissioner Denis Francis confidently believes can and will change.

Francis who leaves Kingston month-end after six years for Port of Spain, en route to Geneva, Switzerland for his next overseas posting, sees a bright future for trade between the two Caribbean Community (Caricom) partners, in the context of the emerging Caricom Single Market and Economy.

"There is a lot of potential that should be pursued and I hope will be pursued between the two countries," said Francis, "once there is a commitment to making the sustained effort that is required to establishing and developing our markets".

More specifically, the diplomat said: "Trinidad and Tobago would like to see an increased flow of goods and services from Jamaica to its market." Francis noted the planned purchase of Liquified Natural Gas (LNG) by Jamaica from T&T, but pointed to big ticket items, such as the proposed aluminium smelter to be built in Trinidad with Jamaican bauxite as feedstock and, possibly, with Jamaican involvement as an investor.

"Through projects like this, we expect that Jamaica's exports to Trinidad and Tobago will increase," he predicted.

Jamaica's external trade deficit with Trinidad and Tobago for 2004 was estimated to be US$465 million. But, petroleum products make up a significant portion of imports from that island republic, so with oil prices at more than 50 per cent above 2004 levels, the trade deficit could be closer to US$700 million.

Francis, dean of the diplomatic community until his tour of duty ends, said that quite apart from the bigger projects, Jamaicans could look at exporting furniture to his country. He recalled that in the past, at least one Jamaican company did good business selling furniture to Trinidad and he suggested it was a market worth revisiting at this time.

"We should look at things as seemingly small as patties.

Trinidadians love patties," Francis told Caribbean Business Report.

Earlier this year, Vincent Chang, CEO of leading patty maker, Tastee had indicated in an Observer Families in Business interview that the company was advanced in its plans to export the product to Trinidad and Tobago.

"We love jerk. We love dancehall. So many of your well established deejays go regularly to do gigs in Trinidad," Francis added.

Francis who came to Jamaica for his second assignment after spending over seven years in Canada, said he would leave with great memories of his stint here.

He said he had discovered the Jamaican spirit and one of the most rewarding aspects of his stay was the rapidly intensifying bilateral relationship between Kingston and Port of Spain. He was profuse in thanking the government and people of Jamaica for "their warm hospitality and all the kindness that they have extended to me, which has allowed me to complete my mission successfully".

"This is a beautiful country and I wish nothing but success and prosperity for the Jamaican people," he said in his parting shot.

Feasibility Study to be Done for Alumina Plant at Lydford in St. Ann

Government of Jamaica, Jamaica Information Service, Jamaica - May 17, 2006


The Government, through Jamaica Bauxite Mining Limited, has reached an agreement with Century Aluminium Company and China Min Metals Aluminium Company Limited, to conduct a feasibility study for the establishment of an alumina plant at Lydford in St. Ann.

This was announced yesterday (May 15), by Information and Development Minister, Senator Colin Campbell, at a post-Cabinet press briefing held at Jamaica House.

He said the aluminium companies have formed a joint venture with a view to exploring the potential of developing a new bauxite mining and alumina refining enterprise in Jamaica.

Speaking further, the Information Minister noted that the pre-feasibility study, which is to get underway shortly, could include the possible utilisation of the old Reynolds facility at Lydford, which had ceased operations in 1988, but has since been owned and managed by Jamaica Bauxite Mining Limited.

"The study is expected to be completed in 18 months and will review all aspects necessary for developing and operating an alumina plant with a capacity of 1.5 million tonnes annually," Senator Campbell pointed out.

"The government, of course, is pleased about the study and is looking forward to the results as well as working with its partners on this joint venture," the Minister added.

Aluminum plant goes for higher capacity

Viet Nam News, Vietnam (22-05-2006)

HA NOI — The Viet Nam National Coal and Mineral Industries Group (Vinacomin) has requested an increase in the capacity of a proposed aluminum plant from 100,000 tonnes per year, already approved by the Government, to 300,000 tonnes per year.

The proposed facility is located in Nhan Co Industrial Zone in the Central Highlands province of Dac Nong.

Construction of the plant, already licensed to be built at the lower capacity, has been delayed because the smaller scale project was viewed as inefficient and could not attract investors.

The plant is a significant project for 2006-10 in the bauxite exploitaiton and aluminum manufacturing sector. Vinacomin drew up a detailed plan for the facility to be built at an estimated cost of US$200 million.

According to the Ministry of Industry, the plan received Government approval, but its small capacity made the project infeasible.

The Government has since granted permission to Vinacomin to manage bauxite mines in Dac Nong Province, and the corporation is charged with responsibility for developing new projects and seeking foreign partners.

In keeping with the new strategy, the Ministry of Industry agreed that the proposed plant’s increase in capacity was appropriate. The higher-capacity expansion facilty was expected to more successfully lure foreign investment in the project. Capacity of the facility was expected to be further increased to 600,000 tonnes per year in the future, according to the ministry. — VNS

Century Aluminum workers ratify new agreement

Evansville Courier & Press (subscription), IN May 23, 2006

Workers at the Century Aluminum plant in Hawesville, Ky., have ratified a new collective bargaining agreement, the company said Tuesday.

Members of the United Steelworkers approved a new four-year agreement that extends into 2010. The agreement covers about 600 hourly workers at the company's Hawesville operations.

Hindalco to set up alumina smelter: Rs 7,700 cr MoU signed with MP Govt

Central Chronicle, India May 25, 2006

By Our Staff Reporter

Bhopal, May 23 Aditya Birla group's Hindalco today signed an MOU with the Madhya Pradesh government for setting up a Rs 7,700 crore greenfield 3.25 lakh tonne capacity aluminum smelter along with a 750 megawatt captive power plant and a captive coal mine in Sidhi district.

Hindalco MD D Bhattacharya and Commerce and Industry department Principal Secretary O P Rawat signed the MoU in the presence of Chief Minister Shivraj Singh Chouhan here.

The project located at Bargaon village would provide direct employment to 4,000 and indirect employment to 12,000 people, The first phase entailing investment of Rs 7,700 crore would be completed in four years, while there would be another investment of Rs 10,300 crore in the second phase, Bhattacharya told reporters.

The Chief Minister has expressed satisfaction over the new project and assured the government's full cooperation. Keeping in view investment proposals for Rs 84,000 crore, the state's infrastructure was being upgraded and developed.

Bhopal and Indore airports were being upgraded to international standard, he added. Welcoming fresh investments, Chouhan said the government was committed to take the state to the developed category from its present 'Bimaru' status clubbed along with other backward states of Bihar, Rajasthan and Uttar Pradesh.

Chouhan said the state's industry policy was being modified to attract more investments. All clearances to Hindalco will be provided within a fortnight, he added. ''The Sidhi project is likely to be completed in about four years,'' said Bhattacharya. Hindalco Group Executive President Pragya Ram said, ''The Aditya Birla Group has already invested Rs 6,000 crore in this state and three projects are underway thereby employing roughly 5,500 persons.''

Aleris buying aluminum business of Corus

Monsters and, UK May 24, 2006

BEACHWOOD, OH, United States (UPI) -- Ohio`s Aleris International Inc. has signed a definitive agreement to pay about $932 million for the aluminum business of Britain`s Corus Group PLC.

The price of the deal, which includes Corus` primary aluminum smelters, entails debt assumption of about $36 million, Aleris said Wednesday.

The combined company will have some 8,800 employees and operate 51 manufacturing locations in North America, South America, Europe and Asia.

Copyright 2006 by United Press International

Companies expect good business opportunities in Montenegro

MTI (Subscription), Hungary 25th May,2006

Budapest, May 24 (MTI) - Hungarian companies expect that the independence of Montenegro will not have an adverse effect on their market positions in the country, the business daily Vilaggazdasag reported on Wednesday quoting company sources.

Hungarian investors in Montenegro have set their eyes on local markets, which means the independence of the country is unlikely to affect them, deputy state secretary at the ministry of economy and transport Abel Garamhegyi told the paper.

Hungary is not only the biggest foreign investor in Montenegro, but the largest single investment has also been done by the Hungarian company Magyar Telekom, which has acquired 76.53 percent of Telekom Montenegro for EUR 140 million, the paper said.

According to director of Magyar Aluminium Lajos Tolnay, the increasing popularity of Montenegro is also due to the fact that few bureaucratic obstacles face foreign investors, Vilaggazdasag said. Magyar Aluminium plans to acquire a 10-15 year mining concession in Montenegro and import 150-200,000 tonnes of bauxite to Hungary, the paper said.

RUSAL Funds Atomic Energy

Kommersant, Russia May 25, 2006

RUSAL has sent a draft financing plan for a new atomic power station to the Russian Atomic Energy Agency suggesting paying 30 percent of the station’s cost for the future power energy supply. The power generated at atomic power stations is the cheapest for smelters. The Russian Atomic Energy Agency, however, still declines to discuss this scheme.

RUSAL has suggested funding 30 percent of the construction of a new atomic power station and securing the remaining 70 percent in bank loans, a source in the Russian government said. In return, RUSAL asks to consider this share as the payment for future energy supplies. The company also informed of its plans to double the aluminum output to the annual 5 million metric tons and provide at least one half of it with the power of its own production.

Late last year, the head of the Russian Atomic Energy Agency Sergey Kirienko promised to map out an investment plan to build 40 atomic power-generating units worth $60 billion by 2030. SUAL is also reputed to be in talks with he atomic officials. The atomic power is the cheapest for the industry, apart from hydro power.

The Russian Atomic Energy Agency declined to comment the negotiations with aluminum companies. Sources in the agency explain off the record that a governmental decree should be enacted to endorse the construction of the station and approve of the placement of power-generation facilities before any long-term bilateral agreements are signed.


Local aluminium operation continues to shine production

Engineering News (press release), South Africa 26 May 2006

Diversified resource company BHP Billiton’s presentation to analysts made in March this year reported that the alumina (aluminium oxide, used in the production of aluminium) and aluminium market fundamentals remained positive.

It also stated that aluminium demand had proved largely inelastic to rising prices, and that physical premiums were beginning to rise again.

BHP Billiton Aluminium Southern Africa COO Dr Xolani Mkhwanazi discusses with Mining Weekly in an exclusive email interview topics relating to the company’s local aluminium operations, including power constraints, future expansion at Hillside and Mozal and its effective use of AP30 advanced aluminium smelter technology.

What will the impact of Hillside and Mozal having to loadshed be?

Loadshedding at the smelters results in loss of production. The actual loss is dependent on the duration of the loadshed.

We have put in place plans to mitigate the impact of any load shedding that may occur.

We also work closely with Eskom to jointly manage load shedding events to protect the position of both parties.

What has become of your Hillside 3+ and Mozal 3 expansion plans?

We are still actively pursuing both opportunities.

We are currently in discussions with Eskom for power.

We are also talking to a range of other approval authorities in relation to other critical aspects of the respective projects.

Our internal feasibility studies will be completed in the near future, following which we will be in a position to make recommendations to our board.

Is there any leeway for you to obtain power supplies in addition to Eskom’s from new IPPs?

We have long-term power contracts in place with Eskom for power supplies to all our current smelters (Hillside, Mozal and Bayside).

We enjoy a longstanding and mutually beneficial relationship with Eskom, and we are quite satisfied with it as our supplier.

There are no IPPs which have been established.

We keep a close watch on power developments in South Africa and the region, and constantly assess opportunities.

In South Africa and Mozambique, we are obliged to work with the national utilities (Eskom and EDM respectively) in sourcing power through their networks.

Could Bayside be one of the first casualties in that full dependence may have to be placed on the most modern smelters?

No. Bayside is a well run and profitable oper- ation. We have a ‘merit order’ in place (established in conjunction with Eskom) in terms of which all potlines are shed on an equitable basis dependent on the operational requirements of the individual smelters.

Bayside’s power requirements are relatively small in comparison to the other smelters.

What are the chances of stranded power opportunities becoming

available to you in the Middle East, Russia, Malaysia, Africa and elsewhere for global expansion? There are many such opportunities.

We are looking at a number of opportunities in African countries, including the Democratic Republic of Congo.

The other countries mentioned are covered by my colleagues in London and fall outside of my area of responsibility.

Can BHP Billiton still lay claim to operating the world’s best smelter using AP30 technology? Please also explain AP30.

AP30 is a particular type of advanced aluminium smelter technology developed and licensed by Pechiney (now part of the Alcan Group).

Hillside and Mozal are amongst the most efficient aluminium smelters in the world, measured on production, cost (energy efficiency), quality and cost (current efficiency) criteria.

Besides power constraints, are aluminium businesses still suffering raw-material constraints?

We do quite well in managing our raw materials, and have no real constraints.

We are fortunate in having our own bauxite and alumina operations, and have a number of suppliers of other key materials.

How much potential do you envisage in Africa for bauxite and raw materials?

West Africa contains much of the world’s bauxite reserves, and is an area of focus for all aluminium companies, including ourselves.

We are also looking at sourcing other raw materials in South Africa, such as carbon anodes.

What are your priorities at present?

My priorities revolve around improving business efficiencies at our existing operations and growing our business in Southern Africa.

Critical is that we remain an employer of choice, offering our employees exciting career opportunities and space for personal growth, and a safe and healthy working environment.

How will you take aluminium production to greater heights in the region?

We are constantly looking at making our existing smelters more efficient, and we area achieving good results through projects such as our ‘high amperage’ projects at both Hillside and Mozal.

Building new smelters in the region is dependent on our sourcing a reliable power supply at internationally competitive prices.

Of course, many other factors play a part in our decision, such as the fiscal benefits granted by host countries for large industrial projects.

Ural aluminum plant already processed 5,000,000 tons of bauxites from Timanskiy deposit

Ural Business Consulting, Russia 26.05.2006

Ural aluminum plant (subsidiary of SUAL JSC) has already processed 5 million tons of bauxites from Timanskiy deposit by May 24, 2006. The company processed its first million tons between October 1998 and June 2001, the 3 million tons record was set in June 2004.

Given the particular properties of Timanskiy bauxite, the plant’s employees from the production department and from experimental and argil shops had to adapt their techniques as well as introduce new schemes and equipment to deal with these peculiarities.

‘The 5-million-ton figure is an impressive hallmark for both argil specialists and all of the company’s personnel as well as for the staff of Timanskiy bauxite mine. We started cooperating as early as 1993 when we set to perfecting the technological aspects of the work and using the new Russian deposit bauxites in our production,’ said GD of Ural aluminum plant Boris Smolyanitskiy.

With deadline near, no holiday at Alcoa negotiations

MarketWatch May 26, 2006

ST. LOUIS (MarketWatch) -- With their contract expiring after Tuesday and the price of aluminum at stake, Alcoa Inc. (AA) and the United Steelworkers union will negotiate throughout the holiday weekend.

"They're going to go right through the holiday and right up through the contract expiration," union spokesman Gerald Dickey said.

The union has authorized a strike if an agreement isn't reached by midnight Tuesday, and the near-term price of aluminum, already in a rally, is expected to surge if a strike occurs.

Aluminum has slipped a bit recently, to below $2,800 a ton, but peaked at $3,300 a ton May 11, up about 48% since January.

"There is progress being made, but you've still got to get the final thing done," Alcoa spokesman Kevin Lowery said Friday.

If no agreement is reached by the deadline, "a strike is possible, or we could continue to work under the previous agreement and continue discussions," Dickey said.

"It all depends what kind of progress has been made," Lowery said.

Analysts have said a strike is more likely than not.

The negotiations, which have been going on since May 18 at a suburban St. Louis hotel, involve 15 U.S. plants covered by the master contract. Those plants produce 30% of Alcoa's aluminum and employ 9,000 workers, about 7% of Alcoa's global work force of 129,000.

The four main issues of disagreement are health-care costs for current employees, a cap on retiree benefits, proposed changes to benefits for new hires, and work that can be contracted out.

The company's proposal to have union workers pay a share of their health-care costs, as other Alcoa employees do, is particularly contentious.

Alain Belda, Alcoa's chief executive, has said he won't mortgage the company's future with runaway health-care costs. In 2006, Alcoa expects health-care costs for U.S. workers will total $700 million to $800 million.

"We've had this health-care package for decades, and now they want changes that we feel are clearly unwarranted," Dickey said. "Why would we entertain those proposals when Alcoa is experiencing record profits?"

Alcoa reported net income of $608 million, or 69 cents a share, in the most recent quarter, ended March 31, compared with $260 million, or 30 cents a share, a year earlier.

While the union sees possible leverage in high aluminum prices, the company's strength is its transition to a global aluminum power from a U.S. one.

Alcoa is building more smelters outside the U.S., and Belda has said 42% of the company's production will be in countries with lower costs by 2009.

In addition to the master contract, negotiators are discussing local issues at the 15 U.S. plants. Those negotiations have resulted agreements on several issues, the company and the union said.

Shares of Alcoa were trading recently up 1.3% at $32.06.

-Contact: 201-938-5400

Alcoa shows interest in building aluminum plant in Kyrgyzstan

Kyrgyzstan Development Gateway, Kyrgyzstan 26-May-2006

The biggest aluminum manufacturer in the world, Alcoa Company, shows interest in building a plant in Kyrgyzstan , reports Reuters citing the Ministry of Industry, Trade and Tourism. The project is estimated $4.1 billion worth.

The Kyrgyz authorities held negotiations during Akaev's presidency on the similar project with the biggest Russian aluminum manufacturer, RusAlom Company, expecting to bring investments valued to 2.5 billion US dollars, however, the things did not move further than a mere protocol on intended cooperation.

The production output of the plant of interest for the Alcoa Company might make 300,000-350,000 tons of aluminum a year, says the Ministry of Industry and Trade in its press release.

"The details are unknown yet and no agreements are in place. The agreements have not been signed, the interest has been just expressed," said the representative of the Ministry of Trade and Industry to the Reuters.

The only aluminum manufacturer in Central Asia is aluminum plant in Tajikistan that manufactures some 400,000 tons annually. The RusAl Company is exploring the project on construction of a new aluminum plant in Tajikistan that would require investments worth more than 1 billion US dollars.

The Kyrgyz authorities reported earlier this year that President Bakiev discussed perspectives of aluminum production with co-owners of the Eurasian Industrial Association, Alexander Mashkevich and Alijan Ibragimov.

The Eurasian Industrial Association and RusAl Company in late 2005 postponed the aluminum plant joint project in Kazakhstan worth 3 billion.

Maaden to invest $9.3bn by 2011

Reuters Monday, May 29, 2006


Saudi state mining firm Maaden said it would invest at least SR35 billion ($9.33 billion) over the next five to boost the industry's contribution in the oil-reliant economy.

The investment covers the development and exploitation of precious and non-precious ores in the country.

'This will help raising by four folds the contribution of mining and related transformation industries in the Saudi economy', the firm said in a statement.

The company plans to float half of its capital by the end of this year.

The firm has invested SR638 million to develop five gold mines in the country of which the total production is set to rise from 250,000 ounces per year currently to 300,000 ounces at the start of 2007, it said. Maaden also produces 500,000 ounces of silver.

The firm has embarked on development projects that include exploiting phosphate reserves in the north and mining bauxite for aluminium production.

Maaden plans to start exporting phosphate from its 3 million tonnes per years phosphate project in 2008. The project, whose total cost is estimated at $2.5 billion, also includes building the world's largest fertiliser plant, the company said.

Saudi officials call the planned Ras Al Zour industrial zone the biggest step yet to diversify the oil-driven economy.

The plant will produce di-ammonium phosphate and will be in direct competition with Morocco's Phosphates Board (OCP), the world's largest phosphate producer and top fertilisers supplier.

The site will process bauxite and phosphate from mines in the northern al-Jalamid area. The state also plans a $2 billion rail link from the northern phosphate and bauxite mines to Ras Al Zour.Reuters

Organizations Accuse Aluminum Industry of "Greenwashing"

Recycling Today, OH - May 30, 2006

Nonprofit environmental organizations the Container Recycling Institute (CRI), Washington, D.C., and the International Rivers Network (IRN), Berkeley, Calif., say that "greenwashing" by the aluminum industry masks the real environmental costs of aluminum production.

CRI Executive Director Pat Franklin says the Aluminum Association "reported an increase of less than one percentage point in the national aluminum can recycling rate—from 51.2 to 52.0 percent, but they failed to mention that we still are trashing 800,000 tons of aluminum beverage cans a year." Franklin adds that this amounts to the annual output of three to four major primary aluminum smelters.

"Frankly, I was surprised to see how slight the increase was, given the record-breaking prices for scrap aluminum cans in 2005," Franklin says, adding that 100 million fewer cans were recovered for recycling in 2005. In 2004, 51.5 billion cans were collected for recycling, while 51.4 billion cans out of the 99 billion sold in 2005 were recovered for recycling.

Jennifer Gitlitz, CRI research director, says, "These trashed cans must be replaced with new cans made entirely from virgin materials, and that is where the environmental damage occurs."

She says that bauxite mining and processing are a major source of water pollution. "Each ton of aluminum cans requires five tons of bauxite ore to be strip-mined, crushed, washed and refined into alumina before it is smelted," she explains. "The process creates about 5 tons of caustic red mud residue which can seep into surface and groundwater."

Gitlitz continues, "We’re talking about immense energy consumption. Three percent of the electricity generated worldwide goes to aluminum. While aluminum companies often cite big savings from recycling, they fail to mention that at current wasting levels, about 23 billion kilowatt-hours are squandered globally each year through ‘replacement production.’" She adds, "About 7 kWh are saved per pound (33 cans) recycled. Had the billions of cans trashed been recycled, the electricity saved could power 1.3 million American homes."

Glenn Switkes, Latin America director of the International Rivers Network, says, "Aluminum companies are relocating to the tropics because governments in developing countries are providing them with subsidized hydroelectricity. These dams have irreversible impacts on biodiversity, and displace thousands of riverbank dwellers and indigenous peoples."

Aluminum production also contributes to climate change, according to the CRI. About 95 million tons of greenhouse gases were produced by the global aluminum industry in 2005, according to the association.

"While the industry as a whole has made laudable technical improvements to reduce greenhouse emissions for each ton of primary aluminum produced," Gitlitz says, "it has consistently failed to eliminate the portion of greenhouse gasses that come from replacing 1.5 million tons of trashed cans with new ones made from virgin materials—that is to say—from bauxite and electricity."

Primary aluminum smelting also generates sulfur dioxide and nitrogen oxide emissions, which contribute to smog and acid rain. "Had the cans wasted in 2005 been recycled," Gitlitz says, "they would have avoided the emission of 75,000 tons of SOx and NOx."

Franklin also says the recycling rates for aluminum cans are higher in states with beverage container deposit laws, or bottle bills. She says that in the 11 U.S. states with such laws, 75 percent to 95 percent of all cans sold are recycled. "States without deposits only recycled 35 percent of cans sold," she adds.

"This means that there is already a realistic policy option to combat container waste," Franklin says, "but it has not been adopted more widely due to industry lobbying, public relations and lip service."