AluNews - November 2006

ABB control system starts up at Alunorte Alumina refinery expansion in Brazil

Automation.com (press release), MN, 2006-11-01

Baden, Switzerland, November 1, 2006 – ABB has successfully put into operation the latest automation system expansion at Alunorte's Alumina refinery in Barcarena, Brazil. This expansion project includes System 800xA Extended Automation and intelligent device integration.

After a history of successes in the first three production lines, Alunorte trusted ABB to continue supplying automation systems to their process in its latest expansion project. Since April 2006, after only five months of commissioning and 12 days of ramp-up operation (which is the lowest ramp-up time ever registered for this kind of industry) Alunorte has been operating at nominal load.

Alumina do Norte do Brasil S.A. (Alunorte) is an Alumina refinery controlled by CVRD group. The plant is located in Barcarena-PA (north of Brazil). Alunorte Maintenance Manager Mr. Roberto Trindade says: "We have a frame agreement with ABB since the first expansion. We do not buy a package; with ABB's know-how and our operational technology we build the project solutions together."

With two completely new lines (expansion 2 project), Alunorte planned to become and successfully became the largest alumina refinery in the world, increasing production from 2.5Mt/y up to 4.2Mt/y. (Note: Alumina is a white powder obtained from bauxite ore through a chemical process. This alumina is the main raw material for aluminum production.)

ABB took the challenge of executing the project with the largest number of fieldbuses in the world. All device interfaces are completely integrated with ABB's Industrial IT Extended Automation System 800xA. All the necessary libraries for communication with 35 different device types from several suppliers were developed and tested during the project phase in close cooperation between Alunorte, ABB and third party suppliers. The result was a significant enhancement in the solutions library.

The automation system has a total of 18 000 I/O points using the ABB S800 I/O System, Foundation Fieldbus, Profibus interfaces and 13 redundant AC800M controllers. All motor control center interfaces with the system are via Profibus communication and all instrumentation is done via Foundation Fieldbus High Speed Ethernet.

This integration with intelligent devices provides a centralized amount of diagnostic information, opening up a wide range of possibilities in the asset optimization area for ABB & Alunorte's next implementation.

ABB is a leader in power and automation technologies that enable utility and industry customers to improve performance while lowering environmental impact. The ABB Group of companies operates in around 100 countries and employs about 107,000 people.

 

Alcan CEO rejects merger talk

Globe and Mail, Canada - 01-Nov-2006

Says company not a target; reports that profit soars fivefold

TAVIA GRANT AND ANDY HOFFMAN

Alcan Inc. is not a takeover target, the chief executive officer says, after reporting record third-quarter profit that surged more than fivefold on higher aluminum prices.

Speculation that the Montreal-based aluminum producer could become the subject of a takeover bid amid rising metal prices, increased demand and a consolidating industry is starting to diminish, Dick Evans, Alcan's president and chief executive officer, said yesterday.

"Our share price has never, in the last few months, and currently does not reflect any takeover premium whatsoever, in our view," he said in a television interview.

Alcan is the world's second-largest aluminum company behind Alcoa Inc. Russia's Rusal Ltd. is expected to take over the top spot following a deal this month to combine with fellow Russian producer Sual Group and the alumina assets of Swiss commodities trader Glencore International AG.

Analysts have suggested that global mining giants BHP Billiton Ltd. and Rio Tinto PLC could target Alcan for its rising cash flows and strong stable of smelter and refinery assets.

Alcan has decided to sit on the sidelines of a merger and acquisition frenzy that has gripped the mining sector amid an extended boom in commodity prices.

Earlier this month at an investor conference, Mr. Evans said he saw little advantage to increasing Alcan's size and scale.

The company considered bidding for nickel giant Inco Ltd., but abandoned the plan because it didn't want to buy at what it felt was the top of the cycle.

Instead, Alcan has elected to spend roughly $750-million (U.S.) buying back up to 5 per cent of its shares and said yesterday it will begin the repurchase this week.

Driven by a 40-per-cent increase in the average aluminum price compared with a year earlier, operating cash flow climbed to a record $803-million in the third quarter, Alcan said.

"With aluminum market fundamentals expected to remain firm and normal seasonal patterns in cash flow, we expect fourth-quarter cash from operations to be even stronger," Mr. Evans said in a release.

On the company's conference call, Mr. Evans pegged China's growth in aluminum demand at 20 per cent, more than 10 times the growth in the U.S.

"The U.S., while still important, is much less important than it was 10 or 20 years ago," he said.

Alcan expects "tight market conditions to persist" in aluminum next year. This year, it sees world primary consumption gaining about 6.7 per cent, while production from new capacity is expected to increase world supply by about 5.7 per cent.

As a result, the company continues to expect a market deficit of about 300,000 tonnes this year compared with a balance in 2005.

Third-quarter sales rose 18 per cent but volume slipped 5.5 per cent, mostly because of lower sales in Europe, where the Steg smelter in Switzerland was closed and production was interrupted at its smelter in Iceland.

On the conference call, Mr. Evans said the company may close its smelter in the Netherlands after problems negotiating a cheap supply of electricity.

Alcan yesterday tapped Michel Jacques to take over the company's primary metal group, replacing Cynthia Carroll, who is assuming the reins of London-based Anglo American PLC. Mr. Jacques is currently head of the engineered products unit.

Alcan's third-quarter profit rose to $456-million (U.S.) or $1.20 a share from a year-earlier $81-million or 21 cents. Operating cash flow hit a record $803-million.

Alcan was expected to earn $1.23 a share, according to analysts polled by Thomson Financial.

 

 

Alcan Building UBC Recycling Plant

Recycling Today, OH Thursday, November 2, 2006

Alcan is investing $7 million in its Specialty Sheet Alcan Rhenalu facility at Neuf-Brisach, France to recycle used beverage cans. The new capacity is scheduled to come on stream by the beginning of 2008.

"This investment will further strengthen Alcan Specialty Sheet's position as a leading supplier of aluminum can body stock in Europe," said Michel Jacques, president and CEO, Alcan Engineered Products. "Neuf-Brisach would become a unique location in Europe in that it will have a fully integrated UBC processing, rolling and finishing facility on the European continent," he added.

The investment will see the installation of an additional remelting furnace in the Neuf-Brisach cast house for UBC recycling as well as an adjacent logistic and handling facility. The Neuf-Brisach site employs about 1,650 people.

"In line with our growth strategy, Alcan Specialty Sheet is building a strong continental position in UBC recovery and processing together with our customers. By being able to offer competitive end-to-end customer solutions, highlighted by this investment, further underscores aluminum as the material of choice for beverage cans," said Christophe Villemin, president Alcan Specialty Sheet. "This investment will provide an economical and environmentally friendly solution to producing can body stock using UBC-based metal," he added.

The investment will foster high quality beverage can recycling in Europe, contributing to Alcan's strategy of optimizing material loops. Recycled aluminum saves about 95 percent of energy use and greenhouse gas emissions compared to the production from primary resources.

Alcan Specialty Sheet is a key player in the European rolling industry, and occupies leading positions in the beverage can and closures, automotive, bright products, and industrial and customized solutions markets. It includes rolling and recycling operations in Neuf-Brisach, France, and Singen, Germany, as well as dedicated R&D capabilities in Voreppe, France, and Neuhausen, Switzerland.

 

Russian merger plan will create new king of the hill in aluminum market

Purchasing.com, MA November 2, 2006

By Tom Stundza

Some time in 2007, there will be a new Russian alumina and aluminum giant that will be known as RusAl and will be bigger than the current leaders of the pack, Alcoa of the U.S. and Alcan of Canada. Formally, the company will be incorporated as United Company Russian Aluminum and will be blended from the existing RusAl and the Sual Group, the two Russian smelters, and the alumina assets of Swiss commodities trader Glencore International.

Glencore is the world’s largest commodities trader, buying and selling such base metals as aluminum, nickel, copper, zinc and lead. The company had sales of $91 billion in fiscal 2005, up from $71 billion a year earlier, and has stakes in mines, smelters and metals refineries worldwide. By acquiring Glencore’s alumina assets, Rusal will gain alumina production in Jamaica and Ireland, which can produce about 4.4 million metric tons annually. About two tons of alumina are used to produce one ton of aluminum.

The merger may not mean all that much in North America since buyers here purchase more mill products than ingot and regional producers, as a group, will retain a hefty capacity lead over the Russian company. Still, the new company will influence European buying patterns and probably metals pricing worldwide since it will have the overall capacity to produce about 11 million metric tons of alumina and about 4.4 million tons of aluminum a year. The new RusAl’s output in 2007 or 2008 will compare with the average annual production of 3.6 million metric tons by Pittsburgh-based Alcoa and 3.5 million metric tons by Montreal-based Alcan.

This will all happen, of course, if the merger is approved by the Federal Antimonopoly Service (FAS) and the European Union’s competitiveness agency. Igor Artemiev, head of the FAS, has told reporters his agency is most interested in hearing whether Russian aluminum market competition and domestic prices may change after the marriage.

Still, that may only be a formality since Russian President Vladimir Putin has been lobbying for this merger. He has been overseeing the consolidation of various energy, steel and other nonferrous metals firms into state-aligned companies as surging crude oil, natural gas and commodities prices have underpinned Russia’s dramatic yet under-publicized eight-year economic boom.

Russia already is the world’s second-biggest aluminum producer, behind China. The former Soviet state also now is the world’s biggest nickel producer, fourth-biggest steelmaker and No. 6 copper producer. Oil and gas assets are being consolidated into state-controlled Gazprom and Rosneft, and state-owned weapons exporter Rosoboronexport is buying VSMPO-Avisma, the world’s biggest titanium producer.

The architect of the new RusAl is Oleg Deripaska. He is the country’s youngest billionaire at age 38, has holdings in various major industrial conglomerates and has emerged as a friend of Putin. (He also has married into the family of former President Boris Yeltsin.)

"The RusAl merger is a key step as Deripaska seeks to properly price and protect valuable assets by creating a national champion, and he can’t do something like that without Putin’s involvement,’’ writes analyst James Fenkner at Red Star Asset Management in Moscow. "This merger is a mutual decision of the state and the businessmen involved,’’ agrees analyst Kyrill Chuiko, at UralSib Financial Corp. in Moscow. "It leaves the firm well placed to buy assets abroad, it’ll have political support at the top level."

© 2006, Reed Business Information, a division of Reed Elsevier Inc. All Rights Reserved.

 

Alcan to Decide on China Aluminum Plant By Year's End (Update1)

Bloomberg November 1, 2006 23:29 EST

By Xiao Yu

Nov. 2 (Bloomberg) -- Alcan Inc., the world's second- largest aluminum producer, may decide to build a plant to make sheet metal in China by the end of the year amid rising demand.

Government officials in southwestern China's Guangxi Zhuang Autonomous Region paid ``great attention'' to the plan, Helen Jiang, director of government affairs at Alcan's Beijing office, said. She didn't say how big the plant may be. Beijing Antaike Information Development Co. said yesterday Alcan wants a joint venture to make 110,000 metric tons of sheet a year.

Demand for aluminum in China, the world's biggest user of the lightweight metal, is expected to double in 15 years. Montreal-based Alcan is expanding into processing as China raises taxes on exports of unprocessed metal and encourages development of plants to make aluminum sheet, which can be used directly by aircraft or automobile makers.

``We'll probably decide where to invest by the end of this year,'' Jiang said today in an interview from Beijing. ``We're also looking at other areas in China's east.''

Soaring demand from China, fueled by 10.4 percent economic growth in the third quarter, helped send aluminum futures prices on the London Metal Exchange up 39 percent in the past year.

Alcan and Qingtongxia Aluminum, China's second-biggest aluminum producer, set up the nation's first primary aluminum joint venture two years ago in western Ningxia Autonomous region. It includes a 150,000-ton smelter and a coal-fired power plant.

Antaike is a research body affiliated with the China Nonferrous Metals Industry Association and advises the government on policies.

Expansion Plans

Aluminum Corp. of China, the nation's biggest aluminum producer, plans to spend as much as 15 billion ($1.9 billion) by 2010 to increase processing capacity to as much as 2 million tons from last year's 820,000 tons, Ding Haiyan, assistant to the company's general manager, said June 12.

Global aluminum demand will rise by 3.6 percent this year driven by growing use of the light metal in planes and car parts, said Helmut Wieser, executive vice president of Alcoa Inc., the world's biggest aluminum producer.

To contact the reporter on this story: Xiao Yu in Beijing at yxiao@bloomberg.net

 

 

Rusal buys 56.2% stake in Eurallumina

ITAR-TASS, Russia 03.11.2006, 18.37

LONDON, November 3 (Itar-Tass) -- Russian Aluminum (Rusal) has acquired 56.2% stake in the Italian-based Eurallumina, a Russian company representative said in London on Friday.

The annual output of Russian Aluminum will now enlarge by 600,000 tonnes.

The stake was bought from the British-Australian mining corporation Rio Tinto. The cost of the deal is not disclosed.

 

Alcoa Develops 'Engineered Natural Systems' to Reduce Discharges

GreenBiz, DC Nov. 3, 2006

ISLANDIA, N.Y.- Alcoa says it is actively developing, evaluating, and implementing natural sustainable technologies to reduce the environmental footprint at its aluminum smelting, refining, and production facilities.

The innovative technologies, called Engineered Natural Systems, use a variety of plants, soils, and microbes to reduce the volume of discharged stormwater and process water as well as the concentrations of pollutants in the discharged water. These passive "green" technologies are helping Alcoa to achieve environmental goals stated in its "2020 Strategic Framework for Sustainability," which calls for the company to reduce process water usage by 70% from 2000 to 2010 and achieve zero water discharge by 2020.

Alcoa retained the Engineered Natural Systems Group of ENR 200 environmental management and consulting firm, Roux Associates Inc., to provide professional expertise during the research, development, design, and installation of these natural systems at three of Alcoa's facilities -- in Mt. Holly, Lafayette, and Iceland.

"Roux was hired not only because of our experience in this area, but also because of our ability to work with Alcoa in coming up with innovative approaches," said Walt Eifert, Principal Hydrologist of Roux Associates and Director of its Engineered Natural Systems Group. "We were willing and able to work closely with Alcoa to push these technologies further than ever before."

A pilot-scale constructed treatment wetlands system in conjunction with the development of a natural, sustainable, phytotechnology sprayfield at Alcoa's smelter facility in Mt. Holly succeeded to reduce process water discharges to a local publicly owned treatment works (POTW) by 60-70%. The cost to achieve this result was at least 50% less than conventional approaches, according to Alcoa.

Due to the success of the project, the development team was bestowed with Alcoa's coveted Environmental Health and Safety Achievement Award. The project was selected for the award by an independent panel of experts from renowned international organizations, including the World Environment Center, the Conference Board, the Center of Study for Corporate Sustainability in Argentina, and the Center for Environmental Education and Communications in China.

Alcoa plans to expand the constructed treatment wetlands and sprayfield at Mt. Holly to further reduce stormwater and process water discharges at the entire site. The company also transferred knowledge it gained at Mt. Holly to construct a similar Engineered Natural System at its new smelting operations in Iceland. The Iceland smelter will begin operations in 2007.

The challenge at Alcoa's Lafayette Engineered Products Plant was different: remove PCBs from stormwater efficiently and at low cost. The sustainable solution selected to treat the water was an Engineered Natural System called natural media filtration.

Using natural leaves and mushroom compost, Alcoa built a pilot filtration system that enabled the Lafayette facility to reduce PCB levels in its stormwater by a factor of 10,000, from 1 part per million to less than 100 parts per trillion. According to Alcoa, this is the first demonstrated compost technology for PCB removal.

The Lafayette plant was able to achieve very stringent limits for PCB levels that were specified in its new operating permit. With the natural media filtration system, the facility now consistently achieves non-detect levels for PCBs using USEPA testing methods.

Total suspended solids in stormwater and aluminum levels in process water were also reduced by the natural media filtration technology.

Capital investment costs for the natural media filtration system at Lafayette were 60% less than a conventional sand filter carbon and membrane filtration system, according to Alcoa. Savings in operations and maintenance costs were more than 70%. The technology development team for the natural media filtration system was awarded the prestigious Alcoa Environmental Health and Safety Achievement Award for sustainable water treatment of PCBs.

Partnership with Roux Associates. "We were excited to prove the cost-effectiveness of natural systems to Alcoa," said Roux's principal, Walt Eifert. "Engineered Natural Systems are not applicable for all discharge problems, but they can be extremely effective and inexpensive under the right conditions."

Roux and Alcoa are currently developing a full-scale ENS system to handle process wastewater generated at Mt. Holly. The system will be fully operational in 2007.

 

Jamaica mulls 10% stake in T&T smelter - Deal linked to LNG pact

Jamaica Gleaner, Jamaica Friday | November 3, 2006

Jamaica could take approximately 10 per cent of the 125,000 tonnes a year Alutrint aluminium smelter being planned by the Trinidad and Tobago government.

But, officials here say that Kingston would like the deal to be part of a broader package under which it provides alumina for the plant and Port of Spain supplies it with LNG to fire electricity generators here.

"We see the whole thing as a package," said Dr. Carlton Davis, the secretary to the Jamaican Cabinet and chairman of Clarendon Alumina Production (CAP), the vehicle used by the island's government to hold its 50 per cent in a 1.3 million tonne alumina refinery it owns with the U.S. metal giant, Alcoa.

Alutrint, as currently configured, would be built at La Brea on Trinidad and Tobago's southwest coast as a joint venture between the Trinidadian government and the Sural Group, a Venezuelan manufacturer of pure aluminium and alloy rods - which would be one of the downstream activities of the Alutrint facility.

The Alutrint smelter, to be built with Chinese technology and projected to cost between US$500 million and US$700 million, is separate from another plant of nearly twice its size, proposed by Alcoa for Trinidad, the English-speaking Caribbean's only energy surplus country with reserves of oil and gas.

Predicated supply

Alutrint, however, is largely predicated on Jamaica supplying the smelter with about 250,000 tonnes of alumina a year, much of which would be expected to come from Aloca/CAP refinery, whose capacity is to more than double under a US$1.5 billion expansion proposed by Alcoa.

But that expansion, projected to be ready by 2010, is itself predicated on affordable energy - an issue that the Jamaican government is attempting to address by converting from oil to natural gas-fired electricity plants.

The Alcoa refinery would have a 285 megawatt electricity genera-ting capacity, enough to run the facility and providing a surplus for sale to the national grid, an important part of the strategy for Jamaica to expand its electricity production and rising demand rapidly whittles away at surplus capacity.

More than two years ago, Kingston and Port of Spain signed a memorandum of understanding, in which the Trinidadians undertook to supply Jamaica with LNG and to be a partner in a storage and regasification facility here. This, at the time, was viewed as an important development in the context of the emerging single market and economy in the Caribbean Community (Caricom), of which Jamaica and Trinidad and Tobago are members.

It is against that backdrop that Cabinet secretary Davis, one the world's leading experts on the bauxite/alumina/aluminium indus-tries, sees the potential LNG/alumina deals between the two countries.

"We think that this would be a tremendous blow for Caribbean economic integration," Davis told the Financial Gleaner.

Despite the Kingston/Port of Spain MoU, doubts have arisen recently over whether the Trinidadians, with annual gas output of about 18 million tonnes a year, will meet Jamaica's proposed need of 1.15 million tonnes.

Sunk wells

Recently sunk wells that appeared promising have provided disappointing results, and Trinidad and Tobago and Venezuela are yet to work out a sharing mechanism for a substantial gas find in the narrow gulf separating the two countries. Trinidadian officials have been signalling that these developments could place pressure on the country's capacity to meet new supply undertakings, especially under what Port of Spain sees as concessionary terms as implied by the MoU.

"We are optimistic," Davis said. "This is an important regional development."

At the same time Jamaica, which has shelved plans for a land-based LNG storage and regasification plant in favour of cheaper floating facility, is exploring alternative sources for natural gas. And Davis suggested that things have to move quickly.

"It is not only about the Jamalco refinery expansion," he said. "It is very critical that we expand electricity generation to meet the growing domestic demand. We can't wait until we begin to have blackouts. And we have to produce at the cheapest cost."

business@gleanerjm.com

 

 

China, Africa clinch trade deals worth US$1.9 billion

AFP, BEIJING Taipei Times, Taiwan Monday, Nov 06, 2006, Page 1

Chinese businesses are set to extend their reach even more deeply into Africa following the announcement of trade deals worth US$1.9 billion yesterday.

The contracts are part of ambitious plans unveiled by Chinese Premier Wen Jiabao () on Saturday, the first day of the China-Africa summit, for the two sides to double their trade to US$100 billion in four years.

The 16 contracts announced yesterday covered cooperation in natural resources, infrastructure, finance, technology, textiles and communications, said Wan Jifei (fw), chairman of the China Council for the Promotion of International Trade.

The deals, with 10 African countries, came at the end of a trade conference attended by 1,500 Chinese and African businessmen that was held alongside the two-day summit of national leaders.

By far the biggest deal was one worth US$938 million for China's state-owned CITIC conglomerate to set up an aluminum plant in Egypt, according to a copy of the agreement given to reporters.

Chinese firms also clinched a US$300 million deal to renovate a highway in Nigeria, signed a contract to build a telephone line in Ghana at a cost of US$30 million and agreed to set up a US$60 million textile business in Sudan.

A new copper project worth US$200 million in Zambia was also announced, along with plans to build a US$55 million cement factory in Cape Verde and a mining contract worth US$230 million with South Africa.

There were no deals announced in the oil or gas sectors, which are among the most significant spheres of economic cooperation linking China and Africa. However, by the start of this year, China already had investments in 27 major oil and gas projects in 14 African countries, according to official Chinese figures, and in recent months has taken further stakes in nations such as Kenya, Angola and Nigeria.

The two-day summit brought together leaders from China and 48 African nations and was described by Beijing as its biggest and most important international gathering since the founding of the communist regime in 1949.

 

Position of power

The Columbian, WA Sunday, November 05, 2006

COURTNEY SHERWOOD Columbian staff writer

It's a tough time to be a voter-owned power and water company.

Electric power costs are up. Water rights are increasingly contested.

The Bonneville Power Administration -- long the guarantor of cheap electricity -- won't promise as much inexpensive power after 2011.

Clark Public Utilities, the third-biggest public utility in Washington and one of the 25 largest in the nation, has added challenges.

Natural gas prices have been higher than expected for the past six years, making a nine-year-old gas-fired power plant less cost effective than the utility had hoped.

While electricity demand is down since 2000 -- largely due to the shutdown of the region's aluminum industry and cutbacks in the paper industry -- it's edging ever up again. That power has to come from somewhere.

Meanwhile, the Salmon Creek watershed may one day be depleted by the utility's deep wells and other nearby development. Clark Public Utilities needs to establish new water sources for its 29,000 water customers -- a project that's run into obstacles from another public agency.

Despite all these challenges, customers should be confident, says Wayne Nelson, general manager and chief executive officer of the utility.

Nelson, 55, who joined the utility in 1989 and became general manager in 1999, acknowledges the hurdles his agency faces.

Clark Public Utilities is ready to face them, he said.

Power costs

Trying to lock in low, long-term power will be among the utility's greatest challenges.

Three-quarters of Clark Public Utilities' 2006 electricity budget is spent on procuring power for customers, for a total bill of $251.2 million.

Roughly 28 percent of the utility's electric spending goes to the Bonneville Power Administration, the regional power wholesaler that sells hydropower from a string of dams on the Columbia-Snake river system.

Another 62 percent of electric costs -- more than $154 million -- goes to run the River Road Generating Plant.

The final tenth of power costs are spread among smaller contracts and purchases of market power.

That River Road consumes such a large share of the utility's power procurement budget has been a source of contention since before the plant was built in the mid-1990s.

Diversifying

Before the gas-fired plant was built, Clark Public Utilities had a guarantee that the Bonneville Power Administration would meet all its electricity needs.

The local utility's leaders -- among them current commissioners Nancy Barnes and Carol Curtis, as well as former commissioner Jane Van Dyke and former general manager Bruce Bosch -- were worried about getting all power from one source.

Natural gas rates had been low for decades, and the utility's leaders gambled that ratepayers would benefit from a natural gas-fired power plant.

"Clark was looking to diversify its power supply, and diversification is a good thing," said John Harrison, spokesman for Northwest Power and Conservation Council, a planning and conservation agency headquartered in Portland. "Building River Road gave Clark another option, and a good one. There's nothing wrong with having a power plant in your back pocket."

When the 248-megawatt River Road Generating Plant started up in 1997, its cost to generate electricity was $27 per megawatt-hour, nearly comparable to what the utility was paying the Bonneville Power Administration at the time, Nelson said.

Higher rates

Since 2000, the price of natural gas has risen -- and with it, the cost to generate power at River Road.

For almost five months this year, the plant sat idle because it was cheaper to buy electricity from the region's power grid than to generate it locally, said Mick Shutt, utility spokesman.

When Clark built River Road, it surrendered its guarantee that Bonneville Power would meet local needs, said Jim Malinowski, a retired electrical engineer who fought construction of River Road in the 1990s and is now running against incumbent Curtis for a seat on the utility's board.

Before construction of River Road, local residential rates were 4.21 cents per kilowatt-hour -- 15th highest out of 21 public utility districts in the state.

The power crisis of 2000 and 2001 drove up rates for everyone, but Clark customers were disproportionately affected. They now pay 7.86 cents per kilowatt-hour, the third highest public utility rate in the state, Malinowski said, citing a report by the Washington Public Utilities Districts Association.

A typical household that uses 1,500 kilowatt-hours of power in a month has seen bills climb from $63.15 to $117.90 over the past 15 years.

Curtis, up for re-election on Tuesday, defends the decision to build River Road.

Bonneville won't be able to meet Pacific Northwest power needs indefinitely, Curtis said, and as a result "River Road is a valuable regional resource."

Somebody needed to build new power plants in the 1990s to meet growing demand, agreed Harrison of the Northwest Power Council, though he would not comment on River Road's specific value to Clark County ratepayers.

If the entire region benefits, the entire region should pay the costs, not just local ratepayers, Malinowski said.

"It may benefit the region, it may benefit Bonneville, but it won't benefit Clark Public Utilities' customers in any way," he said.

Nelson defends the power plant as an asset to the community -- one the utility plans to hold on to.

Bonneville power

When Clark Public Utilities built River Road, it also gave up the guarantee that the Bonneville Power Administration would meet all of its electricity needs. Still, Bonneville remains a major source of electricity for the local utility, providing more than a quarter of the electricity local ratepayers will use this year.

That could change in 2011, when Bonneville's regional resource agreement expires.

Clark Public Utilities is one of dozens of agencies and special interests working to negotiate a replacement contract, as Bonneville attempts to balance the interests of power customers, farmers in need of irrigation water, fish conservationists, recreational fishermen, Indian tribes and countless others throughout Oregon, Washington, Montana and Idaho.

Complicating the negotiations: demand for electricity is up, but the hydropower sources of electricity that Bonneville markets are holding steady, and in some cases declining.

In order to meet its legal obligations to local utilities, in the coming decades Bonneville will have to buy power on the open market -- a proposition almost certain to raise rates, Nelson said.

Under Bonneville's draft plans for post-2011, public utilities would buy the federal wholesaler's power at different rate tiers. Though Clark Public Utilities might be able to buy some power at the lowest rates available, it would likely also be forced to pay higher rates for some of its electricity purchases -- or to obtain that electricity elsewhere.

The exact rates are not spelled out in Bonneville's draft proposal -- online at www.bpa.gov/power/pl/regionaldialogue/ -- and will depend on operating costs and other factors.

For Clark Public Utilities, however, the changes likely mean less guaranteed cheap power after 2011.

Finding water

Though Clark Public Utilities' electric customers far outnumber its water customers, the utility also faces challenges if the Salmon Creek water basin gradually dries up.

The utility serves just over 29,000 water customers in Hazel Dell, Salmon Creek, La Center, Amboy and a number of unincorporated areas of the county.

Clark has pumped water from beneath the land that feeds Salmon Creek for decades. In recent years the state Department of Ecology became concerned about the environmental side-effects and asked the utility to find a new source.

"The new supply is in the Vancouver Lake lowlands area," Nelson said.

Getting permission to pump water there has not gone smoothly.

The Port of Vancouver argued that a new well field would undermine its multimillion-dollar cleanup of polluted groundwater 1 1/2 miles to the south by pulling tainted water out beyond the cleanup area.

The dispute led Clark Public Utilities and the port to court, which initially ruled in the port's favor.

The utility filed an appeal, and both sides are waiting for a ruling, with no word on when they may get results.

The port has signalled willingness to work with Clark Public Utilities to find a better source for its wells. So far the two agencies do not see eye to eye.

Nelson said he expects a well and water-treatment facility will eventually be built in the Vancouver Lake lowlands area. In the long run, that's likely to push up rates for Clark Public Utilities' water customers, though no figures are available.

Positive outlook

Despite the controversy surrounding River Road, the uncertainty regarding future rates and the unresolved dispute over future water supplies, Nelson remains positive.

Reliability, contained costs and customer service are Clark's top priorities, Nelson said, and for the most part he believes the utility is serving its customers well.

"It takes a lot of effort to make sure the system is not falling apart," Nelson said. Many industrial customers require more than just a working system -- they need absolute reliability.

To ensure steady production of its circuit-etched silicon wafers, for example, Camas-based WaferTech worked with Clark Public Utilities to guarantee reliable power far more stable than what residential customers require, said Jim Short, WaferTech director of facilities.

Though Clark's power purchase costs are up considerably over the past five years, in a number of budget areas the utility spends less than others in the state, Nelson said.

The utility has one electric system employee for every 556 customers -- a significant increase in efficiency since 1996, when it employed one worker for every 476 customers.

"Most utilities are open Monday through Friday, 8 a.m. to 5 p.m.," said Clark Public Utilities spokesman Shutt. "We have 24-hour phone service, 24-hour online service, longer open days.

"There's always been a commitment to the customer, and we continue to work to make things better."

Courtney Sherwood covers Clark Public Utilities. She can be reached at 360-759-8041 or courtney.sherwood@columbian.com.

 

Global Alumina Enters Negotiations To Form JV To Develop And Operate Its Alumina Refinery Project In Republic Of Guinea

Trading Markets, CA Sunday, November 05, 2006; Posted: 10:21 PM

(RTTNews) - Sunday, Global Alumina Corp. (GLA.U.TO) revealed that it has entered into exclusive negotiations to form a joint venture to develop and operate the company's alumina refinery project in the Republic of Guinea. The company said the potential joint venture participants are BHP Billiton, Dubai Aluminium Co. Ltd. and Mubadala Development Co. PJSC.

As per the terms of the agreement the parties have agreed to negotiate the terms and conditions on which the potential participants would acquire shares in the company's indirect, wholly-owned subsidiary Guinea Alumina Corporation, Ltd.

Further, the company and the proposed participants have also entered into a Loan Facility Agreement pursuant to which the proposed participants have agreed to provide interim financing of $100 million to fund Project expenditures incurred up to the date definitive joint venture agreements are entered into. Each of the agreements is effective as of November 2, 2006.

Copyright(c) 2006 RealTimeTraders.com, Inc. All Rights Reserved

 

 

BHP seeks African alumina refinery stake

NEWS.com.au, Australia November 07, 2006 12:00am

By Mandi Zonneveldt

BHP Billiton is negotiating to take a lead role in the development of a $US2.8 billion ($A3.6 billion) alumina refinery in the west African nation of Guinea.

It has been revealed BHP (bhp.ASX:Quote,News) is in talks with Canada's Global Alumina to take a 33.3 per cent stake in the development.

BHP (bhp.ASX:Quote,News) would also become the operator. Guinea has about a third of the world's known bauxite reserves and is the world's second-largest producer of the mineral.

The government of Guinea - one of the poorest countries in the world - has been encouraging companies to convert the raw bauxite to alumina before shipping it overseas.

Global Alumina has been working on the project in Guinea for two years, but ran into difficulty earlier this year after an international investment company pulled out of a $US50 million financing deal.

In a statement to the Toronto Stock Exchange, Global Alumina said it had entered into exclusive negotiations with BHP, Dubai Aluminium Company and Mubadala Development Company to form a joint venture to develop the refinery.

The companies have until March next year to finalise a deal, but have agreed to provide Global Alumina with funding of $US100 million in the interim.

The Canadian company has admitted it is experiencing "liquidity issues". The new refinery, which has government approval, is expected to produce 3 million tonnes of alumina a year by 2010.

BHP has exploration leases in three areas in Guinea, but company spokeswoman Emma Meade said Global Alumina's project was the most advanced of its potential options.

She said there was still a lot of work to be done before the deal went ahead.

BHP shares closed 19 higher at $27.64.

 

GLOBAL ALUMINA ANNOUNCES AGREEMENT WITH RESPECT TO JOINT VENTURE NEGOTIATIONS

AND EXECUTION OF LOAN AGREEMENT

Chris Hendriks : Monday, November 6, 2006 10:23 AM

TORONTO, ON – November 5, 2006 – Global Alumina Corporation (the "Company") (TSX: GLA.U) today announced that it has entered into exclusive negotiations to form a joint venture to develop and operate the Company's alumina refinery project in the Republic of Guinea (the "Project"). The potential joint venture participants are BHP Billiton ("BHP Billiton"), Dubai Aluminium Company Limited ("DUBAL") and Mubadala Development Company PJSC ("Mubadala").

Under the terms of the agreement entered into today, the parties have agreed to negotiate the terms and conditions on which the potential participants would acquire shares in the Company's indirect, wholly-owned subsidiary Guinea Alumina Corporation, Ltd. ("GAC"). The parties would concurrently enter into shareholder and project management agreements governing the joint venture and the development, construction and operation of the Project and off-take agreements with respect to the remaining alumina, not already subject to off-take contracts, to be produced by the Project. BHP Billiton would be the project manager. The exclusivity period terminates March 31, 2007. The transaction, if consummated, would result in the Company retaining a one-third interest in the Project and BHP Billiton, DUBAL and Mubadala acquiring a one-third, one-quarter and one-twelfth interest in the Project, respectively.

The Company and the proposed participants have also entered into a Loan Facility Agreement pursuant to which the proposed participants (or related companies) have agreed to provide interim financing of $100 million to fund Project expenditures incurred up to the date definitive joint venture agreements are entered into. The loan will be advanced to GAC, and the facility will be fully guaranteed by the Company and GAC's parent Global Alumina International Ltd. The loan facility will be secured by a pledge of shares of GAC. If the parties are unable to agree on the definitive joint venture agreements by November 30, 2006, amounts advanced under the Loan Facility Agreement are required to be repaid prior to June 1, 2007. Amounts available under the Loan Facility Agreement will be advanced, subject to the Company satisfying the conditions precedent to draw down, to fund approved Project costs. Conditions precedent to the initial drawdown of $20 million have been satisfied. There is no assurance the Company will be able to draw down the full amount of the facility.

Each of the agreements entered into today is effective as of November 2, 2006.

BHP Billiton is the world's sixth largest producer of primary aluminium, with a total operating capacity in excess of one million tonnes of aluminium, approximately 14 million tonnes of bauxite and four million tonnes of alumina per annum. BHP Billiton is one of the world's largest non-integrated producers of primary aluminium.

DUBAL is the owner of one of the largest single site aluminum smelters in the western world. DUBAL, which is wholly owned by the Dubai government, produces and exports primary aluminum products to more than 40 countries world-wide. DUBAL is also party to a subscription agreement with the Company dated August 10, 2005, a copy of which is available on the Company's reference page at www.sedar.com. DUBAL will also maintain its right to 40% of the expected annual alumina production from the proposed refinery under its off-take agreement with Guinea Alumina Corporation, SA, a wholly-owned subsidiary of GAC, dated September 30, 2005.

Mubadala Development Company is a principal investment company wholly owned by the Government of Abu Dhabi, with a mandate to establish new businesses and acquire (wholly or partly) existing businesses either in the United Arab Emirates or abroad. Mubadala invests in a wide range of strategic sectors including energy, utilities, health, real estate, public-private partnerships, basic industries and services.

There can be no assurance the negotiations with respect to the proposed joint venture and associated agreements will be successfully completed or that the Company or its affiliates will fulfill the various conditions precedent to borrowings under the Loan Facility Agreement. The proposed joint venture agreement will be subject to the review and approval of the Toronto Stock Exchange.

This press release has been filed less than 21 days before the entering into of the Loan Agreement. In the Company's view, this is both reasonable and necessary in the circumstances. The Company requires additional capital to continue funding ongoing development and construction of the Project and has determined that the joint venture contemplated by the agreement is its best available means to continue such funding. Due to the failure by Emirates International Investment Company LLC ("EIIC") to purchase from the Company a $50 million principal amount convertible debenture, the Company is experiencing liquidity issues. EIIC's decision to not proceed with the transaction was previously announced on June 2, 2006. The expedited closing of the Loan Agreement and the initial advance thereunder will allow the Company to continue development of the Project during the negotiation of the proposed joint venture documents.

A copy of the Loan Facility Agreement will be made available on the Company's reference page at www.sedar.com.

- More –

GLOBAL ALUMINA ANNOUNCES AGREEMENT WITH RESPECT TO

JOINT VENTURE NEGOTIATIONS AND EXECUTION OF LOAN AGREEMENT …/3

About Global Alumina:

Global Alumina Corporation is a company that intends to use the vast bauxite resources of Guinea to produce alumina for sale to the global aluminum industry. Global Alumina is positioned to be one of the largest companies focused solely on alumina production and sales, and offers an opportunity for socially responsible investing in a country that holds over one-third of the world's bauxite resources. Global Alumina is headquartered in Saint John, New Brunswick with operations in Boké, Guinea and has administrative offices in New York, London, Montreal and Conakry, Guinea. For further information visit our website at www.globalalumina.com.

For further information, please contact:

Michael Cella Elynn Wareham

Global Alumina GCI Group

P: 212-351-0010 P: 416-486-5910 C: 416-697-5414

cella@globalalumina.com ewareham@gcigroup.com

 

 

China Commodities Weekly - Chalco cuts spot alumina price

Mineweb, South Africa - Nov 6, 2006

By: This is a company press release.

China Commodities Weekly - Chalco cuts spot alumina price

SHFE aluminium prices came under downward pressure last week after the Chinese government announced that it would raise the export tax for primary aluminium from 5% to 15%. The cash month contract was traded at Rmb20,500/t (US$2,563/t) by market close on Friday, 3.9% down week on week. SHFE registered that aluminium inventory was down by 4,386t or 16.6% from the previous week, at 29,638t, helped by the rush to export before 1 November to get metal out ahead of the export tax rise.

Shanghai copper prices fell together with LME prices last week. The cash month contract dropped to Rmb68,300/t ($8,538/t) by the market close on Friday, a decrease of Rmb2,150/t ($269/t), or 3.1% off on the previous week.

Last week, Chalco lowered its spot alumina price again to RMB2400/t ($300/t) from RMB2950/t($369/t). This is the third cut within three months, on the back of the quick rally of alumina output from China this year. This price cut caused Chalco alumina prices to trade at a discount to the weakening imported alumina prices, reported at around $255/t (CIF).

Chinese flat steel prices remain under downward pressure. Last week, rebar prices increased by 0.6% wow to $326/t ex-VAT, while flat product prices slipped again. Hot rolled coil prices were down by 1.4% wow and 3.2% mom respectively to $422/t ex-VAT, while cold rolled coil prices dropped by 0.8% wow and 1.8% mom to $517/t. Galvanised steel traded at $619/t excluding VAT, down by 0.3% wow but up by 2.1% mom.

Local reports have suggested that the average grade of Chinese domestic iron ore has been declining. Our analysis of regional supply and demand in China appears to confirm this, suggesting an average grade of just 23% in Hebei this year.

Chinese domestic iron ore prices surged last week due to the demand for winter reserves at Chinese steel mills. Hebei 66% iron ore fines increased by 4.5% wow and 9.4% mom to $89/t including VAT and we hear that demand in northern China will remain very strong for at least the next two weeks.

Chinese iron ore stocks at major ports are reported to have fallen sharply in the week to 3 November, down by 1.33 million tonnes. Stocks now stand at just 36.4 million tonnes, down by 3.7 million tonnes since the beginning of September. Port stocks are now at their lowest levels since early May.

Macquarie Research - Commodities

 

Alcoa's Cleveland workers go on strike

Washington Times, DC Nov. 7, 2006 at 2:46PM

More than 800 members of the United Auto Workers at Aloca Inc.'s Cleveland plant have gone on strike, the Cleveland Plain Dealer said Tuesday.

Alcoa and members of UAW Local 1050, who make forged-aluminum auto and truck wheels and aerospace parts, disagreed on numerous topics, from healthcare to mandatory overtime.

Employees last month rejected, by about a 70-percent margin, a 4-year contract that would have raised pay 8.9 percent to a maximum of $20.25 per hour by 2010. It also would have included a $1,500 lump sum payment and resulted in work rule changes.

Alcoa said it must deal with absenteeism to curb mandatory overtime: "We can't run production efficiently when people don't come to work," said company spokeswoman Marian Lowes, noting that "in some areas of the plant," including the section that makes aerospace parts, unexcused absenteeism has been as high as 14 percent.

"It's seven times higher than the average" in other manufacturing plants, she said.

 

 

Making Good Money Out Of Old Plants

BusinessWeek - 09-Nov-2006

U.S. companies are reviving Soviet-era factories—and winning new markets

by Jack Ewing

Alcoa Inc.'s AA mile-long rolling mill south of Budapest seems like a throwback to the Soviet era. The sun struggles to penetrate smudged skylights. Massive Russian-made machines from the 1960s grind away amid clouds of steam. Forklifts the size of flatbed trucks rumble by, stacking coils of aluminum sheeting like giant rolls of toilet paper.

Yet the 65-year-old factory in the city of Szekesfehervar isn't the dinosaur it appears to be. Those brutish Russian machines, long since retrofitted with computer controls and precision rollers, need just 15 minutes to reduce an ingot the size of a sofa to a roll of sheeting a few millimeters thick. In fact, Alcoa Inc. is so pleased with its Hungarian operations that it's spending $83 million to add more modern equipment to the plant and make more sophisticated products. "The investment projects show our long-term commitment," says Bela Forgo, Alcoa's country manager for Hungary.

Across Central Europe, U.S. companies are getting great mileage out of old factories they bought on the cheap. That these soot-stained giants are worth something may come as a surprise to anyone who has spent much time in the former Warsaw Pact region. The countryside is still littered with the carcasses of factories that didn't survive the transition to market economics. But some were always more competitive than they looked.

STEAM TURBINES. Last year, electricity producer AES Corp. AES converted two 1950s-era coal-fired plants in Hungary to generate power from agricultural waste such as sawdust or sunflower seed shells. While AES added equipment to burn the new fuels, Communist-era steam turbines still turn the generators. "We've managed to breathe some new life into those businesses," says John McLaren, president of Arlington (Va.)-based AES's European and African operations. And Pittsburgh-based U.S. Steel Corp. X has become a major player in Europe with its purchase of a huge steel complex in Slovakia in 2000 and another in Serbia in 2003. In the second quarter, its European operations generated $188 million in profits--one-third of U.S. Steel's total operating income.

Central Europe's cast-offs have helped U.S. companies conquer a piece of the Continent that might otherwise have eluded them. General Electric Co.GE was an also-ran in European lighting before it purchased Hungarian bulb maker Tungsram in 1989. Now GE is No. 3, with 12% of the market. And workers there have proved more adaptable than they're sometimes given credit for. "Hungary is an attractive place not only because assets could be bought from the government, but also because it has a good workforce," says Istvan Szini, chairman of GE's Hungary unit. Now Hungary is home to one of GE's two main centers for lighting research and development.

Modernizing these plants hasn't been cheap, but it has turned out to be money well spent. Alcoa has laid out $900 million in Hungary on both acquisition costs and new gear. Today the original brick buildings are filled with Japanese robots and German equipment. U.S. Steel last year invested $249 million in Slovakia and Serbia, with much of that used to meet European Union pollution standards. But profits from the mill were twice that. "Prior to these acquisitions we had some shipments into Europe but not many," says David H. Lohr, president of U.S. Steel Kosice. "This has been a major step in learning about this market."

Ewing is BusinessWeek's European regional editor.

 

RusAl to Spend $3M on China Plant

Bloomberg Friday, November 10, 2006. Issue 3537. Page 5.

BEIJING — Russian Aluminum will invest $3 million to expand the capacity of a factory in northern China to produce 67 percent more metal, deputy general manager Alexander Livshits said Thursday.

RusAl said it would be able to produce 25,000 blocks of aluminum cathode, or refined aluminum, at its factory in Shanxi province, from the current annual output of 15,000 blocks.

The company is also considering plans to invest in two additional projects, including the construction of a factory that has the capacity to process as much as 1 million tons of alumina per year, Livshits said at a news conference.

RusAl plans to spend $16 billion by 2013 as it expands production and makes acquisitions from Iceland to Venezuela, the company said Sept 21. It plans to increase output capacity by more than 60 percent in the next eight years to achieve annual production of 5 million tons.

 

Alcan mulls bauxite mine in Madagascar

Hemscott, UK 09-Nov-2006

NEW YORK (AFX) - Canadian aluminum producer Alcan Inc. on Thursday said it plans to study the development of a bauxite mine and alumina refinery in Madagascar.

The facility would have an initial capacity of 1 million to 1.5 million tons of alumina annually.

Alcan said it would undertake the study with Access Madagascar Sarl, a Malagasy company that holds exploration rights in the region. The companies expect to complete the study during the second quarter of 2007. Feasibility studies could follow.

Alcan studied the same region for development in the 1960s and 1970s, said Jacynthe Cote, president and chief executive of Alcan Bauxite and Alumina. Now the company returns with 'vastly improved technology,' she said, which could make a project viable.

Shares of Alcan rose 23 cents to $47.05 in morning trading on the New York Stock Exchange.

Copyright 2006 Associated Press.

 

Rusal to build alumina plant in China

Interfax.cn (subscription), China Nov 9, 2006

Beijing. November 9. INTERFAX-CHINA - Russian Aluminum (Rusal) will build an alumina plant with annual output exceeding 1 million tons in China, and it will invest $3 million in the extension of a cathode plate plant, Rusal Deputy General Director Alexander Livshits said at the Third Russian-Chinese Investment Forum in Beijing on Thursday.

The full text of this story is available to subscribers of our weekly and daily news services

 

Alcan keen to invest more in China

China Daily, China 2006-11-09 15:05

Alcan Inc, the world's second-largest aluminum producer, is in talks to increase its investment with China's No 2 maker of the lightweight metal to tap rising demand, Bloomberg News said.

The Canadian company is "looking at taking a larger position" by investing in a 250,000-ton a year expansion at State-owned Qingtongxia Aluminum Group, Cynthia Carroll, head of Alcan's primary metal group, said. "We are very pleased with the progress that has been made."

Alcan, which paid about US$150 million for a 50 percent stake in a 150,000-ton production line at Qingtongxia in 2004, wants to increase market share in China, where demand is forecast to double by 2015. Swiss commodities trader Glencore International AG signed an agreement to buy shares in Qingtongxia in August.

"Chinese aluminum smelters are worth investing in because they have good prospects for profit in the next few years," said Liu Defei, an analyst at Beijing Antaike Information Development Co by phone from Beijing yesterday. Liu said aluminum prices are rising and the costs of alumina, a raw material, are falling. Antaike advises the government on policies.

Aluminum for delivery in three months has risen 38 percent in the past year on the London Metal Exchange as economic growth in China, the fastest-growing major economy, increases demand for beverage cans and cars.

"We continue to look at other opportunities in China," Carroll said in an interview in Beijing. "Aluminum is the most sought-after metal in China." She didn't say how much Alcan may invest.

Alcan set up its joint venture with Qingtongxia, in western Ningxia Hui Autonomous Region, two years ago. The venture includes a 150,000-ton capacity smelter, or the No 3 smelting line, and a coal-fired power plant.

"We are obviously still very much interested in the option on the No 4 smelting line," which was completed last year and has a capacity of 250,000 tons a year, James Zhao, director in charge of Alcan's Asia primary aluminum business, said in e-mail response to Bloomberg News questions

 

 

United Russian Aluminum seeks to purchase assets

RosBusinessConsulting, Russia - 13.11.2006,

Moscow 15:23:04.RUSAL, SUAL and Glencore have filed to the Federal Anti-Monopoly Service for a permit to purchase RUSAL and SUAL assets by the Russian Aluminum consolidated company, RUSAL's press service said. The consolidated company will comprise the following assets of RUSAL: four aluminum plants and three alumina plants in Russia, a bauxite and alumina plant in Guinea, two bauxite companies: in Guinea and Guyana, a share in QAL (Australia), ArmenAl, SayanAl and a cathode plant in China.

SUAL will contribute seven Russian aluminum plant to the consolidated company, a Ukraine-based aluminum plant, an alumina plant, North Ural Bauxite Mine (SUBR), Ural Foil, a silicon plant, SUAL-Silicon-Ural and SUAL-PM.

Glencore International AG will pass on its alumina plants to the new company, Aughinish in Ireland, Windalco and Alpart in Jamaica, Eurallumina in Italy, and an aluminum plant, Kubikenborg, in Sweden.

 

China investors wary of Russian environment rules, crime, red tape

RIA Novosti, Russia 13/ 11/ 2006

KHABAROVSK, November 13 (RIA Novosti) - Bureaucracy, the 'criminal factor', and environmental regulations are discouraging Chinese investors from investing in Russia's economy, the governor of the Far Eastern Khabarovsk Territory said Monday.

Viktor Ishayev told journalists that far fewer projects were being implemented than planned, with financing falling well below what was hoped; however, the governor hailed new investment agreements and said the booming East Asian country had huge potential as a consumer market.

The official said: "Another reason for Chinese entrepreneurs' reluctance to invest money in Russia's economy is that there are no 'exclusive' proposals in natural resources production projects."

Ishayev said only five projects were being implemented out of the 13 projects, worth $800 million, which had been considered at the first Russian-Chinese forum in Khabarovsk in 2004, and that the volume of financing was only $4.3 million, or 0.5% of the total projected sum.

However, the governor said China has huge potential as a consumer market, and that bilateral cooperation was likely to focus on pipeline transport, development of ports and airports, agriculture, natural resources processing, and environmental protection projects.

He said Russia and China signed 10 investment agreements worth a total worth of over $1 billion during the November 9-13 investment forum in Beijing. The agreements envision cooperation in oil and gas, the power industry, banking, and aluminum production.

Last year, Russia was China's eighth largest trading partner after the United States, Japan, South Korea, Germany, Hong Kong, Singapore and Malaysia. Trade between the two countries exceeded $29 billion.

Russia and China hope to more than double the current annual turnover in the next few years.

Ishayev said natural resources account for 70% of trade with China, while the share of high-tech goods Russia supplies to China is just over 2%. He said 70% of China's exports to Russia are high-tech products.

 

Alcoa Howmet’s Ti-Cast Operation Wins Casting Contest Award

dBusinessNews Cleveland (press release), OH 13 Nov 2006

CLEVELAND -- Alcoa’s Howmet Products and Services’ Ti-Cast facility in Whitehall, Michigan, has received the 2006 Casting Contest Award - aerospace category - from the Investment Casting Institute. The award recognizes Howmet Products and Services for its outstanding leadership in demonstrating the benefits of the investment casting process.

According to Michael A. Pepper, vice president and general manager, Howmet Products and Services, Howmet’s Ti-Cast facility was recognized for producing a complex flight control manifold, manufactured for customer Parker Hannifin. "It is a product that could not be produced by any other process than investment casting," said Pepper. "The manifold has one of the most complex geometries ever manufactured using the investment casting process."

The casting is complex for a number of reasons, including hollow serpentine passageways, compactness, asymmetry and net-shape surface areas. The part is cast from a titanium alloy. The selection of this titanium alloy and the investment casting process gives the flight control manifold the targeted combination of light weight and high strength. "In addition, the investment casting process provides a high ‘buy-to-fly’ ratio for the customer’s raw material requirements. More than 95 percent of the purchased material is used in the final casting," said Pepper.

 

RUSAL to launch new plant in Siberia

RosBusinessConsulting, Russia - 14.11.2006,

Moscow 10:36:36.Oleg Deripaska's holding continues its growth. The first stage of negotiations on construction of the aluminum plant in Siberia has been completed. Tayshet has been approved as the place for the new plant. It is planned that the plant's capacity will be 750,000 tonnes of premium aluminum per year, reports RBC Daily. An expert thinks that 2.5m tonnes of alumina is necessary for such a plant. The projected cost of the plant is $1.5bn.

Yury Paranichev, the acting Governor of Irkutsk region, has signed an order, establishing a working group to monitor RUSAL's investment projects. The group consists of representatives of RUSAL and regional and municipal authorities.

 

 

Capital Projects > Tamana InTech Park > Tenants > Alutec/Alutrint

www.eteck.co.tt 2006

The Alutec and Alutrint plants were established as with shareholding agreement between the Government of the Republic of Trinidad & Tobago and Sural Group. Sural is one of the world's leading manufacturers of pure aluminum and alloy rod by the continuous casting process; a major manufacturer of products based on aluminum: aluminum and alloy rod, aluminum cable (bare and insulated aluminum conductor) and wire for electrical applications; aluminum alloy bars, rod and wire for mechanical and welding applications. The Alutec plant will have 60% GORTT and 40% SURAL ownership, while the Alutrint Centre will have 60% SURAL and 40% GORTT ownership.

The Alutec and Alutrint Plants will be located in the Light Manufacturing Zones of the TIP. The plants will be located along the southern runway which is the southern most area of the TIP. In keeping with e TecK’s model of environmentally sensitive development the plants were strategically designed to maintaining Green Spaces. It is vital that the plants interact at its boundaries with the surrounding development and landscape.

Alutec

Alutec is a down–stream aluminum company that will be setting up a proto-type product plant on TIP. The Alutec plant will conduct research and development of a new manufacturing process for aluminum.

The plant has been designed to facilitate the use of elegant large span steel trusses to create maximum and economical structural bays with minimal interference from columns. Exposed ‘designed’ services for lighting, ventilation etc to allow for maximum flexibility & ease of maintenance. The location of administration functions, laboratory and meeting area at high level providing dramatic views of the production below.

External hard and soft landscaping will be done around the building to enhance natural beauty of the location.

Alutrint

The Alutrint Centre will be a subsidiary of Sural located on TIP. SURAL is a leader in the technology of continuous casting and rolling of aluminum alloys. Currently, Sural owns three major manufacturing plants located in Pto.Ordaz, Venezuela; Taranto, Italy; and Quebec, Canada and has international sales and marketing representatives in Europe, North America and South America.

The Alutrint Centre will house two plants; a Wheel Plant and an Automotive Parts Plant. The process used for manufacturing of these products will be based on the research conducted in the Alutec Plant. Both plants will have separate administrative facilities and are required to have high levels of security.

Exposed ‘designed’ services for lighting, ventilation, water, power will allow for maximum flexibility & ease of maintenance. The design the façades to the plant areas will be ventilated facades - thereby allowing a natural flow of air across the entire length of the building. Additionally, external hard and soft landscaping will be done around the building to enhance natural .....

 

Guinea: Country Finds Hope in Alumina Refinery

allAfrica.com November 17, 2006

Tami Hultman, Washington, D.C.

In the dry season, a pervasive red dust wafts from the crushers at the bauxite operations that have dominated economic activity for over three decades in Guinea – home to a third of the world's known supply of the raw material for aluminum. The late afternoon light that gilds the north-western mining town of Sangaredi lends a rosy hue to the dust hanging in the still air, coating surfaces, being inhaled, leaving a metallic taste on the tongue.

With a population of 40,000, Sangaredi is a product of the mining industry, but it is not a prosperous commercial center, and it has not spawned a stable middle class. Despite the endless movement of bauxite-loaded boxcars to the port of Kamsar 140 kilometers away, and despite the gold, iron ore, diamonds and uranium in its soil, Guinea is one of the world's ten poorest countries. The United Nations Development Index notes that "forty-seven years of authoritarian rule have left the country with social indicators similar to those of countries emerging from prolonged wars". UN humanitarian coordinator for Guinea, Mbaranga Gasarabwe, says the situation has been worsening – with a life expectancy of under 50 years, an infant mortality rate of around 13 percent, often due to malaria, a maternal mortality rate that in the past seven years has risen from 529 to 847 per 100,000 live births and an HIV prevalence rate that has recently doubled. Only one in eight people has access to health care.

The residents of Lamarana Diop are among those who do not. Less than an hour's drive from Sangaredi, the villagers live much like their ancestors of a century ago. Even before the four-month rains make most roads impassable, the trip requires an all-wheel drive vehicle, plus a walk through overgrown paths that emerge in a small clearing of mud and grass structures, iron cooking pots over open fires and scrawny chickens pecking dirt. After a day trying to scratch a crop from fields cleared with archaic slash-and-burn techniques, women braid hair and nurse babies, while men lounge against the walls.

All that is about to change. The village is in the 700-square-kilometer concession area of Global Alumina, a Canadian-registered company – and recent signatory to the Global Compact – which is building a refinery to process bauxite into alumina. To do so economically, as well as to export the alumina for smelting into finished aluminum, the company is also constructing a water-supply dam and power plant and upgrading railroad and port infrastructure. From the beginning, company officials say, they have aimed to be a business that sets a new standard for social responsibility, both for the water, land and air that have suffered from the caustic by-products of mining – and for the people who live near the operations.

For the past two years, the people of Lamarana Diop and 19 other villages that will be relocated have worked with Global Alumina to define the terms of their move to new homes the company is building among adjacent hills. Local residents collaborate with company teams to site the settlements and to outline the need for services, including skills training for future jobs. The company is committed to building well-functioning communities, as well as to paying fair compensation to each person resettled.

Tens of thousands of people will be employed for the initial construction stage, with thousands of new cash-producing jobs for Guineans. Although educational enrollment in primary school is one area of significant improvement in the past five years – thanks partly to a vibrant "Education for All" initiative spurred by the United Nations Millennium Development Goals campaign to reduce global poverty – an estimated 87 percent of women and the majority of men remain illiterate.

partial article only see the full article at http://allafrica.com/stories/200611170959.html

 

Norsk Hydro to build 600,000 ton smelter in Iceland?

IcelandReview, Iceland - 11/17/2006

Norwegian oil and aluminum company Norsk Hydro and the Icelandic government met yesterday to discuss the possibility of building a 600,000 ton smelter in Iceland within the next eight years.

The company’s representatives met with Iceland’s Minister of Industries Jón Sigurdsson yesterday to present their ideas, as Bladid reports.

Manager of the North Atlantic branch of Norsk Hydro, Bjarne Reinholdt, told Bladid the price of energy and raw material has to be calculated precisely before deciding whether building a smelter will pay off.

Thomas Knutzen, communications officer at Norsk Hydro, said Iceland is in an important location for aluminum smelters, midway between Europe and America.

Knutzen told Bladid that Norsk Hydro is also interested in technological development of energy matters in Iceland.

 

 

DaCosta found dead

Jamaica Gleaner, Jamaica - Saturday | November 18, 2006

Dionne Rose and Angelo Laurence, Gleaner Writers

The trade union movement reacted with shock and sadness yesterday to news that veteran trade unionist Norman DaCosta is dead. The 59-year-old is believed to have committed suicide at his home in Cocoa Walk, near Cross Keys in Manchester.

Close friend and colleague, Danny Roberts said that, up to 1:40 yesterday afternoon, he spoke with Mr. DaCosta on the phone as he made arrangements to meet with him in Mandeville.

"I didn't detect in his voice that anything was wrong," Mr. Roberts told The Gleaner.

He however noted that he was aware that Mr. DaCosta was experiencing some challenges in his life, including a minor motor vehicle accident from which he was recovering, while also facing a lawsuit related to his alleged "exposure" of a firearm during a meeting at Windalco earlier this year.

According to reports reaching The Gleaner, Mr. DaCosta was sitting on the verandah of his home, when his wife and two sons left him. He was inside when they returned and, when they asked him to open the door to let them in, he left the area shortly before they heard an explosion.

A pool of blood

One of the family members went to the back of the house where he saw blood coming from under the door. The police were then summoned and Mr. DaCosta's body was found in a pool of blood with his firearm clutched in his hand.

The police told The Gleaner that they had recovered a revolver, five live rounds and one spent shell. The body was removed for an autopsy and the police are conducting further investigations.

The lawsuit was filed against DaCosta by a member of the Windalco management team who had accused him of exposing his licensed firearm and barring members of the company's negotiating team from leaving a meeting during wage negotiations.

Mr. DaCosta also faced defeat at the National Worker's Union NWU) presidential and vice- presidential race in late September where he lost his vice presidential seat.

"The challenges were an accumulation of things but I never thought it would have reached breaking point," said Mr. Roberts.

NWU President Vincent Morrison said Mr. DaCosta's untimely death was a shock to the union.

"We had a pleasant chat (yesterday) and I didn't pick up any clue at all that there was any problem," he said. "We wish to express our profound condolences to the family."

Mr. Morrison said Mr. DaCosta was an excellent worker. "I think Norman's legacy will be the contribution he made to the bauxite and aluminium workers over the 25 years."

Senator Dwight Nelson, President of the Jamaica Confederation of Trade Unions (JCTU), said Mr. DaCosta's death has left a void in the trade union movement.

"He was a strident unapologetic fighter for the worker's cause. I know that there are many who might disagree at times with his approach but nobody could question his commitment, his dedication and his loyalty," Nelson said.

Paris Lyew-Ayee, executive director of the Jamaica Bauxite Institute said Mr. DaCosta's passion for his work in the bauxite sector will be greatly missed.

"He was very knowledgeable of the industry, extremely passionate about it, especially the rights for the workers to be involved," he said.

The Jamaica Teachers' Association hailed Mr. DaCosta as an undisputed champion trade unionist and a champion of workers' rights.

Meanwhile Lambert Brown, president of the University and Allied Workers Union, said that, among the legacy to his activism on behalf of bauxite workers, was the tax-free productivity incentive scheme, a limited indexation of wages to devaluation and a significant salary increase and fringe benefits to bauxite workers.

Norman DaCosta had been with the Trade Union movement for more than 25 years. He has held various positions in the NWU including union delegate at Alcan Kirkvine in Manchester, before he was appointed a full time officer of the NWU.

 

Norsk Hydro to build 600,000 ton smelter in Iceland?

IcelandReview, Iceland - 11/17/2006

Norwegian oil and aluminum company Norsk Hydro and the Icelandic government met yesterday to discuss the possibility of building a 600,000 ton smelter in Iceland within the next eight years.

The company’s representatives met with Iceland’s Minister of Industries Jón Sigurdsson yesterday to present their ideas, as Bladid reports.

Manager of the North Atlantic branch of Norsk Hydro, Bjarne Reinholdt, told Bladid the price of energy and raw material has to be calculated precisely before deciding whether building a smelter will pay off.

Thomas Knutzen, communications officer at Norsk Hydro, said Iceland is in an important location for aluminum smelters, midway between Europe and America.

Knutzen told Bladid that Norsk Hydro is also interested in technological development of energy matters in Iceland.

 

 

Alcoa to restructure businesses, reduce work force

Reuters Tue Nov 21, 2006

By Steve James

NEW YORK, Nov 21 (Reuters) - Aluminum producer Alcoa Inc. (AA.N: Quote, Profile, Research) on Tuesday announced a restructuring of its product operations that will include plant closings and could ultimately result in a 10 percent reduction of its worldwide work force.

About 6,700 jobs will be cut in the next year and a further 6,400 jobs will be moved into a joint venture with Norway's Orkla ASA (ORK.OL: Quote, Profile, Research) with the intent eventually to spin it off, the Pittsburgh-based company said.

The restructuring program is expected to save $125 million per year before taxes, said Alcoa, which currently employs 129,000 people globally.

Alcoa said it has a letter of intent with Orkla ASA's Sapa Group to form a joint venture to combine its soft alloy extrusion business -- in which aluminum is molded into various shapes for products such as furniture -- with Sapa's extruded aluminum business.

The venture will be majority owned by Orkla and operated by Sapa and is expected to be set up by the end of the first quarter next year, subject to approvals.

"There have been questions about the profitability of our downstream (product) operations, in particular soft alloy extrusion," spokesman Kevin Lowery told Reuters. "So we will be exiting that business through a joint venture."

Alcoa's operations are split between upstream, such as bauxite mining and refining to produce aluminum, and downstream businesses that produce a variety of aluminum products for the aviation and automobile industries, as well as for food cans and kitchen wrap.

The joint venture with Orkla will allow Alcoa to focus on better-performing downstream businesses.

"Our overall downstream operations have continued to improve their financial performance the past few years," said Chairman and Chief Executive Officer Alain Belda.

He noted that flat-rolled product segments have grown 14 percent annually since 2002 and are in a strong position to capture further growth in China and Russia. Also Alcoa Howmet and Alcoa Fastening Systems have improved profitability by more than 60 percent in the past year, Belda said.

Alcoa said it will have restructuring charges in the fourth quarter of between $375 million and $425 million after tax. The company also will recognize an $85 million to $95 million after-tax gain in discontinued operations in the fourth quarter from its sale of its Home Exteriors business on Oct. 31.

As part of the review of its overall downstream operations, Alcoa plans a targeted restructuring program to further increase efficiency and profitability.

The restructuring will include some plant closings and consolidations that will affect about 6,700 positions during the next year.

In the flat rolled products business, the restructuring of can sheet operations will result in the elimination of some 320 positions, including the closure of the Swansea can sheet facility in Wales.

Restructuring of the hard alloy extrusion production operations serving the aerospace, automotive and industrial products markets, will result in approximately 370 positions being eliminated in the United States and Europe.

In the automotive and light vehicle wire harness and component operations, the manufacturing operations of the AFL Seixal plant in Portugal will close and restructuring of the AFL light vehicle and component operations in the United States and Mexico will affect more than 4,800 positions, Alcoa said.

The consolidation of selected operations in global packaging production will eliminate approximately 470 positions, while reduction in the global primary metals and alumina operations will affect about 330 positions.

In January 2005, Alcoa said it was exploring streamlining its operations as a result of the company's new global business structure. The plans called for the reduction of about 2,000 positions during the year. (Additional reporting by Leonard Anderson)

 

 

Aluminum plant may hire 130 people

Daily Inter Lake, MT : Wednesday, Nov 22, 2006 - 11:29:22 pm MST

By NANCY KIMBALL

Columbia Falls Aluminum Co. has begun the process of hiring up to 130 workers and craftsmen to staff the expected start-up of the second of its five potlines.

No company officials were available to provide or confirm information this week, but news of the hires and a job fair on Wednesday in Kalispell spread fast among those searching the local job market.

Montana Job Service Manager Mike Shoquist said his office started testing applicants late last week for job skills required in three categories.

Shoquist said the company is seeking about 100 laborers, who need basic math and reading skills and forklift operation experience.

In addition, the call went out for 20 or 30 millwrights and electricians.

Freedom Bank President Don Bennett said the company is looking for journeyman electricians.

One estimate put laborers’ wages around $19 an hour, and the millwrights’ and electricians’ wages in the $23 to $24 hourly range.

By midday Wednesday, Shoquist said about 120 people had gone through the Job Service’s "Prove-It" job testing system specifically for the aluminum company’s job openings.

Around noon, computer testing stations were in full use at the Job Service. Jim DeWaters of the company’s human resources department was conducting question-and-answer sessions to offer information to applicants.

Shoquist said the Job Service geared up quickly after conferring with company officials a little more than a week ago.

"It’s welcome news, but it just came out of the blue last week," he said.

Although the time has expired for laid-off CFAC workers to be automatically recalled, some former workers received direct word of the pending hires and potline restart.

With a Flathead Valley unemployment rate of around 3 percent, the CFAC hirings could have an impact on other businesses that have been having trouble filling positions over recent months.

"Some people think it’s a bummer," Bennett said of the potential drain it could cause on the labor pool.

Since last spring, Shoquist said, the Job Service has routinely carried between 500 and 600 job postings.

"Almost any employer would say they have trouble finding workers," he said.

Many former CFAC workers went into business for themselves after being laid off from the aluminum plant, he said, using their craftsman skills in the construction trades and related fields that have been booming in the Flathead.

"Electricians are probably turning work down now," Shoquist speculated, primarily because of the glut of new home construction.

Despite the advantages of running their own businesses, he said many now may return to the aluminum plant for benefits, predictable paychecks or simply an indoor work environment. They also may want to hedge against the national trend toward a slowing construction market.

Wages almost certainly will be the key for the aluminum plant, or any other labor-market employer, to attract the most qualified pool of applicants.

"To attract people to the area — the cost of housing and cost of living is pretty high here," it will take competitive pay, he said. "If you’re going to be an employer of choice … you’ve got to offer higher-than-average wages."

Columbia Falls Aluminum currently operates one potline and employs about 150 people. The plant has been running the single potline — 20 percent of its capacity — since March 2003.

In June, the company signed a contract that will supply up to 140 megawatts of electricity for the next five years. Bonneville Power Administration and Flathead Electric Cooperative also signed the contract. The plant currently uses 70 megawatts of electricity.

Under the contract, BPA will provide its direct service industry customers financial payments in lieu of physical power. Monetary benefits are capped at $59 million a year, which allows the five Northwest aluminum companies to receive up to 560 average megawatts annually.

Now that Columbia Falls Aluminum doesn’t receive power directly from BPA, Flathead Electric is involved with receiving, authorizing and paying those financial benefits.

At the time the contract was signed, Haley Beaudry, CFAC’s manager of external affairs, said the company had no plans to expand operations.

Reporter Nancy Kimball can be reached at 758-4483 or by e-mail at nkimball@dailyinterlake.com

 

 

Chinese aluminum demand straining smelters - Alcoa

Reuters Mon Nov 27, 2006 1:01pm ET

Chinese aluminum demand straining smelters - Alcoa

World demand for aluminum, driven mostly by China, shows no sign of easing and could make it difficult for smelters in the West to keep up, even with new construction, a senior Alcoa Inc. (AA.N: Quote, Profile, Research) executive said on Monday.

Bernt Reitan, group president of the aluminum producer's global primary products business, said China's consumption of the metal is likely to grow 14 percent in the next two years, more than four times the rate in the rest of the world.

"We believe it will be challenging for new smelter construction in the West to keep pace with this demand growth," Reitan said on an investor Webcast. "Therefore we believe aluminum markets will be balanced to potentially short over the coming years.

"We have estimated China's consumption growth to be 14 percent. In addition, metal demand outside of China will grow by 3 percent per year from 2006 to 2008 -- this alone is equivalent to two or three new smelters per year."

Reitan said that, in addition to demand growth, the world will lose some production supply in the United States and Europe where deregulated energy markets are causing smelting capacity to be shuttered due to uneconomic power rates.

As for alumina -- which is refined from bauxite and smelted into aluminum -- Alcoa expects a surplus next year of between 1.5 million to 3 million tons.

"The range depends on the ability of the Chinese to ramp up the new refinery capacity," said Reitan, noting that 1.5 million to 3 million tons in a more than 70 million-ton market was a relatively small percentage.

"Anecdotal evidence suggests that many industry participants drive alumina inventory to unsustainable and risky levels to take advantage of or avoid the high spot prices, so some of this surplus will be needed to refill normal supply chains," he said.

"In the long term, we remain bullish on the alumina segment because limited access to bauxite and high construction costs will constrain the pace of refinery capacity expansion."

Reitan said that, if China becomes more self-sufficient in alumina, the role of the spot market will change.

"There are very few customers outside of China that purchase from the spot market and all major aluminum producers are either integrated or have long term alumina contracts," Reitan said.

"Even in China, a much smaller percentage of sales are made on a true spot basis than in recent years. Spot pricing is having a smaller influence on the market than in the past -- including the Chinese market."

He believes China will continue to be short in total aluminum, with net imports approaching 1 million tons for the next couple of years.

"In fact, we believe net exports of primary aluminum will actually fall due to many factors, including increased demand, increase in export tariffs on primary aluminum and the cancellation of the VAT (Value Added Tax) rebate on ingot."

Reitan said investors were questioning whether the Chinese were over-producing primary metal and potentially bringing more aluminum stocks to the rest of the world.

"We do not believe China will become either a net exporter of alumina or primary aluminum," he said, noting that exporting either material would violate Beijing government policy.

Alcoa stock was down 62 cents, or 2.02 percent, at $30.09 in afternoon trading on the New York Stock Exchange.

© Reuters 2006. All Rights Reserved.

 

Alcoa: Chinese aluminum production focused on domestic market

Penn Live, PA 11/27/2006, 7:11 p.m. ET

By DANIEL LOVERING, The Associated Press

PITTSBURGH (AP) — China will strive to build its aluminum-producing capabilities, but will not become a significant exporter of the metal or its precursor, alumina, in the coming years, Alcoa Inc. said Monday.

Outdated smelting and refining technology and limited access to bauxite, aluminum's raw material, will prevent China from making more aluminum than it can use, said Bernt Reitan, president of Alcoa's global primary products group.

"China has been a net importer of aluminum metal for the past seven years," he said in a conference call with analysts and reporters. "We believe China will continue to be short on aluminum."

Strong growth in China's production of aluminum and alumina, an intermediate material from which aluminum is smelted, has not caught up to domestic demand, Reitan said.

China has also seen a sharp upturn in imports of high-cost bauxite, mainly from Indonesia, and the country has been forced to import alumina in significant quantities over the past five years, Reitan said.

Alumina imports are projected to hit 7 million metric tons this year, but will drop to 3.14 million metric tons in 2007 and 2.81 million metric tons in 2008 as the nation tries to reduce its dependence on imported alumina, he said.

Reitan said Alcoa is well-positioned to take advantage of "the most attractive upstream opportunities in the industry," which has inventories at all-time lows. The aluminum industry is healthy and continues to grow, Reitan added.

Alcoa spokesman Kevin Lowery said the company held the conference call to offer its perspective on recent growth in the Chinese market.

"We're saying that the metal piece of the market is going to remain very tight, that the aluminum market will remain tight, which means that demand is strong," Lowery said.

Morgan Stanley analyst Mark Liinamaa said it was no secret China has been increasing alumina production, and many industry observers assumed a greater amount of aluminum would flow out of China as a result.

 

Alcan Secures Long-Term Energy Supply for COEGA Aluminium Smelter Project

PR Newswire UK (press release), UK - Nov 24, 2006

PORT ELIZABETH, South Africa, November 24 /PRNewswire/ --

- Company to be Lead Partner With 25-40 Per Cent Equity in 720kt Smelter, Using Alcan's Proprietary World-Class Technology

Alcan has secured a long-term supply agreement with South-African energy firm, ESKOM Holdings Limited, for the purchase of up to 1355 MVA of electricity for the proposed 720kt greenfield COEGA aluminium smelter project, which will have a total estimated cost of US$2.7 billion. The agreement provides for a 25-year supply, set to begin in 2010.

"Alcan is engaged in successfully developing some of the most attractive smelter projects for primary aluminium production in the world, including this potential smelter in South Africa, all characterised by secure, competitively priced, long-term energy supplies, and leveraged by our world leading technology," said Dick Evans, President and Chief Executive Officer, Alcan Inc.

"Today's agreement is a key step towards the realisation of this important project - important for both Alcan and South Africa," said Michel Jacques, President and Chief Executive Officer, Alcan Primary Metal Group.

Alcan will now begin discussions with potential partners, and will launch a selection process for an EPCM firm to conduct the project's detailed Front End Engineering Design. Similar to the successful business model implemented at Sohar Aluminium in Oman, Alcan's current intention is to retain between 25-40 per cent of the equity of the project and seek partners for the balance. Project financing is expected to account for approximately 60 per cent of the total investment required.

The greenfield project will use the latest version of Alcan's proprietary AP35 Series Smelting Technology and is expected to operate in the 1st quartile of the industry's global cost curve. AP Series Smelting Technologies are used in 80 per cent of the world's newly installed capacity, outside China, over the past 10 years.

Subject to successful completion of the project's next steps and financing arrangements, construction is expected to begin in 2008 and result in first metal production before the end of 2010.

Alcan Inc. (NYSE, TSX: AL) is a leading global materials company, delivering high quality products and services worldwide. With world-class technology and operations in bauxite mining, alumina processing, primary metal smelting, power generation, aluminium fabrication, engineered solutions as well as flexible and specialty packaging, today's Alcan is well positioned to meet and exceed its customers' needs. Alcan is represented by 65,000 employees in 61 countries and regions, and posted revenues of US$20.3 billion in 2005. The Company has featured on the Dow Jones Sustainability World Index consecutively since 2003. For more information, please visit: www.alcan.com.

Statements made in this press release which describe the Company or management's objectives, projections, estimates, expectations or predictions may be "forward-looking statements" within the meaning of securities laws. The Company cautions that, by their nature, forward-looking statements involve risk and uncertainty and that the Company's actual actions or results could differ materially from those expressed or implied in such forward-looking statements or could affect the extent to which a particular projection is realised. Reference should be made to the Company's most recent Quarterly Report on Form 10-Q or Annual Report on Form 10-K for a list of factors that could cause such differences.

Distributed by PR Newswire on behalf of Alcan Inc.

 

 

The Outlook for Alcoa and Aluminum

Seeking Alpha, NY Nov 28th, 2006 with stocks: AA

Yaser Anwar submits: I've conducted an analysis on Alcoa (AA) and the general outlook for aluminum:

* Aluminum has under performed this cycle and continues to face much skepticism as a result of growing production of aluminum and alumina and the threat of accelerating growth via falling spot alumina prices. The longer term outlook will be influenced by supply moves in China and Europe.

* Alcoa provided a somewhat bullish year and a half outlook. AA pointed to a balanced or a modest surplus market for alumina and a balanced market for aluminum in 07 and 08, using what management called "conservative assumptions".

* AA also talked about an internal study that Alcoa recently completed on the supply outlook from China, which remains uncertain and a key swing variable in the industry.

* Alcoa highlights that the market for aluminum is expected to operate at a 400K tonnes deficit in 06 and will be balanced for 07. AA’s demand assumptions were based on 14% per year growth in China [which, according to AA's management, were conservative by historical standards] and 3% per year growth through 08.

* China’s aluminum deficit is expected to remain between 800K to 900K tonnes for 07 and 08 vs net imports of 897K tonnes in 06. AA expects China's metal production to increase 3 mill tonnes to 12.2 mill in 08 from 9.2 mill in 06, and includes the ramp up of recently started capacity. The new capacity coming online will add around 1.9 mill tonnes.

* AA points to operating costs of $250 to $300 per tonne for projects that rely on imported bauxite, which accounts for 5 mill tonnes of the projects. The remaining 8 mill tonnes of supply will utilize domestic bauxite and have full operating costs of $175 to $225 per tonne according to AA.

* Alcan (AL) recently pointed to average cash costs of $180 to $250 per tonne and Brook Hunt recently published estimated cash costs of $120 to $225 per tonne for refineries in China, with those using domestic bauxite at the low end and those using imported bauxite at the high end of these ranges.

* AA will benefit from ongoing consolidation [three way merger of Russian aluminum producers OAO Rusal and Sual Group with Glencore Intl.] of the aluminum industry and a slightly higher aluminum price in 2007. Consolidation will result in a better pricing environment and less volatility in sales and EPS over the course of the business cycle.

* Higher aluminum price will result from rising global consumption combined with continued tight inventories. Also, production increases in China may moderate due to higher power costs. Investors should also keep in mind that aluminum faces competition from plastics, steel, glass, and ceramics. Plastic, in the form of polyethylene terephthalate [PET], provides strong competition in the container market. Steel competes with aluminum in automotive applications.

 

USW WINS $1.3 MILLION FOR EMPLOYEES AND RETIREES IN KENTUCKY

Business Wire (press release), CA 11/28/06

News from USW: Several hundred former employees and retirees of an aluminum smelter in Hawesville, Ky., now represented by the United Steelworkers, are entitled to share the $1.3 million proceeds of a stock distribution from the reorganization of a mutual insurance company into a stock company, a federal appeals court has ruled.

The United States Court of Appeals for the Sixth Circuit on Nov. 22 reversed a previous decision in favor of Southwire, a former owner of the smelter, issued on Sept. 29, 2004 by the U.S. District Court for the Western District of Kentucky at Owensboro.

The Appeals Court cited Kentucky law and the demutualization plan adopted by Prudential Insurance in making its decision to remand the case back to district court for further proceedings consistent with the new opinion.

The former employees and retirees were supported by the USW, which engaged the Washington law firm of Bredhoff & Kaiser, to argue their case and paid all legal expenses.

The smelter has been owned since 2001 by Century Aluminum, which also claimed a right to the funds but stated that if it prevailed it would give the funds to employees and retirees. The Appeals Court dismissed an appeal by Century as moot.

NSA, a unit of Southwire, created a defined benefit pension plan for employees in 1970. In 1986, NSA terminated the plan and replaced it with annuity contracts purchased from the Prudential Insurance Co. of America. NSA kept the surplus of approximately $11.5 million.

In 2002, as Prudential Insurance reorganized from a mutual insurance company into a stock company, Prudential Financial, Inc., it issued 35,119 shares of stock to the Bank of New York (BNY), successor to the former pension plan trustee.

Prudential’s demutualization plan required the new company, Prudential Financial, to issue stock to eligible policyholders as consideration for their membership interests in the old company.

BNY denied it was entitled to the stock, which was sold under court order for $1.3 million, and filed legal action after receiving conflicting claims for the money from the employees, Southwire and Century. The bank’s filing, known as an interpleader, asked that the court identify the rightful owner.

The district court in 2004 granted summary judgment to Southwire and denied summary judgment to employees and to Century. The employees and Century appealed, leading to the review by the United States Court of Appeals.

 

 

Dubai launches the largest aluminum smelter in the world

Middle East North Africa Financial Network, Jordan Kuwait News Agency (KUNA) - 29/11/2006

Dubai Aluminum Company (DUBAL) began operating the largest Aluminum Smelter in the world in association with Abu Dhabi's Mubadala Development Company, Ahmed Humaid Al-Tayer Vice-Chairman of the board of directors at DUBAL said Wednesday.

"The project would play a key role in the manufacturing sector of Dubai and would contribute to seven percent to its national income, in addition to expediting the overall growth of the country," said Al-Tayer at the launching ceremony of the project attended by United Arab Emirates' (UAE) Minister of Finance and Industry Sheikh Hamdan Bin Rashid Al-Maktoum.

The first phase of the project will be operational in 2010 and when all phases are completed, the smelter will have 1.4 million tons production capacity, which will make it the largest aluminum smelter in the world. Al-Tayer added.

The ownership of the project is to be shared equally between DUBAL and Mubadala as per the Joint Protocol was signed in February this year.

DUBAL is the industrial flagship of Dubai. The company produces and exports high quality aluminum products to more than 44 countries worldwide. (end) jd.

 

'Russian Aluminum' Set to Double Its Capitalization in Five Years

Financial Information Service(Registration), Russia Nov 29, 2006

MOSCOW, November 29. /FIS/. The company to be created on the base of Rusal, SUAL and Glencore - 'Russian Aluminum' - is set to double its capitalization in five years. The aluminum giant is making preparations for IPO. It is too early to speak of actual market value - the company has to prove that it is not susceptible to political risks.

'Rusal' is set to double the market value of the merged company in five years,' said Director General of the aluminum company Alexander Bulygin to The Wall Street Journal.

 

 

Aluminum company on upswing

Billings Gazette, USA - Thursday, November 30, 2006.

KALISPELL - Columbia Falls Aluminum Co. expects to restart the second of its five potlines during the first three months of 2007, a company spokesman said.

Haley Beaudry, manager of external affairs, said the market for aluminum has improved while the price of aluminum oxide, or alumina, has fallen in recent years.

The price of the raw ore, alumina, was as high as $600 a ton at one time but has now fallen below $300, Beaudry said.

The plant held a job fair on Nov. 22, taking applications for as many as 100 laborer positions and 20 or 30 millwright or electrician jobs. The single potline now in operation produces about 35,000 tons of aluminum per year. The plant has about 150 employees.

The plant has been running the single potline - 20 percent of its capacity - since March 2003.

 

Novelis Korea Invests in Multi-Alloy Casting

PR Newswire (press release), NY, Nov. 30, 2006

Investment Continues Global Roll-out of Breakthrough Novelis Fusion(TM) Technology

ATLANTA, Nov. 30 /PRNewswire-FirstCall/ -- Novelis Inc. (NYSE: NVL) (TSX: NVL) today announced that its joint venture in Korea, Novelis Korea Limited, will invest US$4.1 million to install Novelis Fusion(TM) casting technology in its Ulsan, South Korea, plant.

The proprietary Novelis technology allows the commercial production of aluminum ingots with multiple alloy layers. The ingots can then be rolled into sheet products with previously unattainable combinations of product attributes, such as high strength and high formability.

The Korean investment continues the global roll-out of the breakthrough technology which first entered production in March of this year at the Company's plant in Oswego, New York. In September, Novelis announced that it will invest $32 million in the construction of a Novelis Fusion(TM) casthouse at its Sierre, Switzerland, facility.

The Novelis Fusion(TM) casting center at Ulsan is expected to be operational by mid-2007 and will have an initial annual capacity of more than 25,000 metric tons.

"The existing configuration of the Ulsan casting facilities allows a rapid and cost-efficient conversion to the Novelis Fusion process," said Martha Brooks, chief operating officer for Novelis Inc.

"This investment is further evidence of our confidence in the Novelis Fusion technology and the positive response we are receiving from the marketplace," said Ms. Brooks. "In North America, we have converted virtually all of our traditional "clad" material to the new technology, and we are working with dozens of customers around the globe on the development of applications in markets such as automotive, architecture, electronics and household appliances."

Traditional multi-alloy aluminum ingots are produced using a manual cladding process, and are limited to a small range of alloys. Novelis Fusion(TM) technology delivers both process and product improvements, including the ability to cast previously impossible combinations of alloys.

"Commercially, this investment will open the door to a new range of high- end product offerings in Asia," said Jacquie Bartlett, vice president, Sales and Marketing, for Novelis Korea. "With the Novelis Fusion technology, we will start by offering a full range of high-quality brazing sheet and fin stock products to local customers that today must rely on imports."

"Our longer term focus will be on developing new product opportunities in conjunction with our Asian customers," added Ms. Bartlett. "As the market demand for Novelis Fusion products increases, we will expand our production capacity."

This is Novelis' second major investment in South Korea this year. In March, Novelis announced that it will invest $30 million over a two-year period to increase production capacity at its Yeongju rolling mill by 100,000 metric tons and expand its capability in the beverage can end market.

For more information on Novelis Fusion(TM) technology, please visit http://www.novelis.com/fusion.

 

Alcoa to set up plant in Orissa

Daily News & Analysis, India - Nov 28, 2006

Ajoy K Das

The world’s largest aluminium producer seeks larger India footprint

Alcoa, the world’s largest primary aluminium producer, is mulling an India entry. The $26 billion company is likely to set up a mega alumina-refining and smelting plant in Orissa.

The Pittsburgh-headquartered metal giant which operates in 350 locations — straddling 43 countries — and employs 1.29 lakh people does not have a footprint in India and is looking to establish its presence in one of the fastest-growing aluminium markets in the world, either on its own or through a joint venture route.

Alcoa does have a marginal presence in the country by virtu of being in a small joint venture with ACC-Alcoa ACC Industrial Chemicals Ltd-that produces 10,000 tonnes of high-value tabular alumina at Falta, about two hours from Kolkata. Definitive plans of the company are yet to be unveiled officially and e-mails to Alcoa office in Pittsburgh did not elicit a reply but highly placed officials in Orissa government said that a team from Alcoa had twice visited the state for taking stock of the bauxite reserves apart from familiarising with the process of securing mining rights and possible locations of refineries and smelters.

The officials, however, added that the state government had not yet been approached but once Alcoa does so, the government would activate industrial promotional agencies to start facilitating any investment proposals.

Though the size of proposed Alcoa’s investments could not be confirmed, typically, the minimum global benchmark for integrated aluminium projects involves a one million tonne aluminium plant costing around Rs 8,000 crore, including a captive power plant and an upstream alumina refining and mining capacity of around Rs 5,000 crore.

Recently, Alcoa’s vice-president Helmut Wieser said in Singapore that the company was looking at projects in India although it understood that it was not an easy market to enter given the country’s limited logistic and transportation infrastructure.

The high cost of power would also weigh against investments in an energy- intensive project. At the same time, Alcoa was also looking at setting up refining and a 3.4 lakh-tonne smelting capacity in Russia and a mining and refining joint venture in Vietnam.

In fact, an underdeveloped logistic and transportation infrastructure, protracted process of securing bauxite mining lease and controversial environment issues have prevented Orissa from developing into a global base of metal production even though existing natural resources offer the potential of it being the lowest cost producer of aluminium in the world as shown by the government owned National Aluminium Company Limited (Nalco). And ironically, the latter continues to be only integrated producer in the state for the last 25 years even though over years several companies like L&T, Pechiney, Rusal have over the years scouted around to set up base but developed cold feet thereafter.

Utkal Alumina, conceived by Toronto based Alcan through its erstwhile affiliated Indian Aluminium Company Limited (Indal) was dogged by controversial environmental issues and now under wings of Hindalco Industries, following latter’s acquisition of Indal, is yet to take off. Vedanta Resources, however, has come closest to get its project off the ground and is scheduled to start bauxite refining production in March 2007.

But Vedanta is still awaiting final clearances from the courts for its mining operations which environmentalists have challenged for allegedly devastating the sensitive bio-diversity of the Lanjigarh forests and hills.