AluNews - May 2008

Russian giant sees red over Rio attack

The Age, Australia - May 2, 2008

Barry FitzGerald

RIO Tinto has upset Rusal. The Russian aluminium giant, and a contender to Rio's claim to be the world's No. 1 aluminium group, has taken time out from May Day celebrations to raise concerns about an attack on its credentials by Rio Tinto Aluminium chief executive Dick Evans.

Rusal said it "notes with some concern the misleading remarks" by Mr Evans at a media briefing reported yesterday in BusinessDay.

"RTA is a global company operating in many countries of the world and Rusal has an effective working relationship in a number of areas, which Mr Evans might not be aware of," Rusal's Moscow head office said in a statement.

"Rusal, as the world's major aluminium producer, believes that even in the situation of the strong competition in the aluminium industry, mutual respect and partnership are the key principles that provide for sustainable and efficient development of the individual companies and the industry as a whole."

The companies are partners in the QAL alumina refinery in Queensland. RTA is operator and 80% partner and Rusal has held a 20% interest since 2005. In the controversial Wednesday briefing, Mr Evans said Rusal would like to see an expansion of QAL "as much as possible" while RTA was more inclined to go for a smaller "de-bottlenecking" project.

"Their (Rusal's) challenge is that they have a lot of alumina," Mr Evans said. "That's the good news. The bad news is that it's almost all in the wrong location and it's almost all in the third and fourth cost quartile."

Mr Evans said RTA would have to look "very hard" at going beyond a "de-bottlenecking" expansion because it might be better off with a third expansion of its wholly owned Yarwun refinery, also near Gladstone.

"And that might be different for Rusal, because they might not have the same kind of options that we have," Mr Evans said. "In fact, they don't."

"So we would look at what is best for our shareholders, not what is best for their shareholders."

Rusal countered that while QAL offered an expansion opportunity, so did several of Rusal's "first-class" bauxite and refinery operations. "We have yet to discuss in any detail either an expansion increment or timeline for any capacity increase (at QAL)," Rusal said.

"Any capacity expansion would be determined by the underlying economics and market conditions."

Rusal did not mention the issue in its statement, but it is likely to have been annoyed by Mr Evans' claim that Rusal "lobbied vigorously against" Rio in Rio's dealings with antitrust regulators during its Alcan acquisition, "hoping to get a bigger share of QAL or something else".

But sources at the time of the Rio acquisition said Rusal's objection to the merger was confined to the elimination of the only alternative bauxite supplier to QAL as a result of the Rio-Alcan merger.

BHPB approves US$1.9 billion Worsley alumina expansion

Reuters, May 1, 2008

BHPB plans to spend nearly US$2 billion expanding the Worsley alumina refinery in Australia

BHP Billiton said it would spend nearly US$2 billion expanding an alumina refinery in Australia, saying the outlook for the material was strong.

The expenditure, long on the drawing boards, is the latest move by the world`s biggest diversified mining house to keep up with multi-billion-dollar expansions underway by rival Rio Tinto, which BHPB is trying to acquire via a hostile US$147 billion offer. Rio Tinto has made its growth prospects in aluminium and alumina key planks in its defence against BHPB.

The expansion, cleared by environmental regulators in March, but only now approved by BHPB`s board, would lift annual production capacity at the Worsley refinery in far western Australia by 1.1Mt to 4.6Mt starting in 2011 at a cost of US$1.9 billion. It will also require mining more bauxite and upgrading ports. Rio Tinto last year graduated from a regional supplier of alumina and aluminium to one of the world`s largest in the sector when it bought Alcan of Canada.

BHPB, though bigger than Rio Tinto overall, ranks only sixth in the world in aluminium making.

Commodities analysts point to strong global demand for aluminium and alumina. Aluminium prices are running well ahead of the 2007 average of US$1.20/lb, trading at about US$1.34/lb, while alumina sells for about US$400/t versus US$300 last year.

"This decision to invest in further production capacity underlines our confidence in the future of the alumina market," said BHP Billiton Aluminium president Jon Dudas.

BHPB has an 86% interest in Worsley Alumina, while Japan Alumina Associates (Australia) holds 10%, and Sojitz Alumina, a unit of Japanese trading firm Sojitz has 4%.

Commitment to smelter stressed by Rio Tinto

The Herald Eastern Cape, South Africa - Friday May 2, 2008

Patrick Cull BUSINESS CORRESPONDENT

RIO Tinto Alcan stressed yesterday that it remained committed to the Coega aluminium smelter project and that talks with the task team set up with government to discuss the timing of the investment would continue next week.

The reassurance follows a statement attributed to Rio Tinto Alcan chief executive Dick Evans that the Coega smelter, delayed due to power shortages, could eventually be abandoned.

An Alcan source said last night that the situation remained as it was at the time the project was initially placed on hold – that a team, consisting of members from government, Rio Tinto and Eskom, would review the terms of the project in order to align its timing with the availability of secure power generation capacity from Eskom.

In an earlier statement, Evans said Rio Tinto Alcan was "committed to working closely with the South African government to assist in mitigating the current energy crisis, while maintaining the option for future long-term development of the Port Elizabeth region".

He said Rio Tinto had operated successfully in South Africa for several decades, "and we look forward to continuing our mutually beneficial presence in the future".

The statement issued at the time said Rio Tinto Alcan would work with the government to minimise the impact of a potential rescheduling on regional economic development.

Sandeep Biswas, senior vice-president of business development at Rio Tinto Alcan, said the objective was to preserve the feasibility of the project and its underlying benefits for Rio Tinto and South Africa.

An Alcan source said the project would move into "an interim phase pending the outcome of ongoing discussions regarding the timing of the project. As the detailed feasibility study is concluded, the project team will be adjusted for this interim phase as appropriate".

The source was "not aware" of any changes in this regard, adding that details of what the "interim phase" would involve would be released shortly. The source acknowledged the staff initially deployed to the project would be scaled down for the time being.

Evans said his division was in the process of establishing priorities within the enlarged portfolio of development projects created by the Rio-Alcan merger.

He said Rio‘s Abu Dhabi smelter plan appeared unlikely to proceed because the United Arab Emirates was reassessing its strategy.

Evans had also flagged the possibility of smelter sales following a portfolio review.

"We will also be reviewing our bauxite opportunities and our refining opportunities, but it is more likely there may be a divestiture on the smelting side," said Evans.

Alcoa wants carbon trading exemption to avoid closures

SteelGuru, India - May 05, 2008

The Australian Business reported that Australia biggest alumina exporter Alcoa has warned that even a modest carbon cost on aluminum production could lead to plant closures in Australia and moves to higher emitting plants in countries such as China.

Alcoa has told the Garnaut Climate Change Review that the aluminum sector should be awarded free emission permits. Otherwise market shortfall caused by plant closures would be met by competitors in other countries including some with significantly higher emissions.

Mr Alan Cransberg MD of Alcoa Australia said Alcoa had already made substantial cuts in emissions both in Australia and globally, having achieved its 2010 target in 2003.

The aluminum sector's call follows the warning by the Australian Petroleum Production and Exploration Association to the review that an emissions trading scheme in Australia could prompt liquefied natural gas investment to move to Qatar, Malaysia or Nigeria countries that didn't intend to have such a scheme

Mining group gets go-ahead in foreign partnerships

Nhan Dan, Vietnam - May 3, 2008

The Prime Minister has allowed the Vietnam Coal and Mineral Industry Group (TKV) to set up joint stock companies with foreign partners for bauxite-aluminum projects.

Under the scheme, the TKV is allowed to set up a joint stock company with at most 40% of its stake sold to foreign partners and nine other% to the public. The group will keep 51% to hold the control right of a majority share holder.

The permission will enable the mining giant to invite the Alcoa group of the US to buy up to 40% of shares of the Nhan Co aluminum production project in the Central Highlands province of Dak Nong , with a capacity of 600,000 tonnes a year.

It will also be able to sell to the Yunnan Metallurgy Group of China at most 20% of the stock of a bauxite-aluminum project in Lam Dong province, also in the Central Highlands.

The Government also asked the TKV to submit detailed explanations for its joint-venture plan with the BHP group, under which the BHP will contribute 49% to a railway project leading from the Central Highlands to the southern central province of Binh Thuan and 10% to a bauxite mining and processing project in Cambodia.

The group will also take part in mining and processing bauxite in Cambodia , contributing 10% to the investment. (VNA)

Rio Tinto Alcan partners in new research facility dedicated to aluminium products and processes in Quebec

CNW Telbec (Communiqués de presse), Canada - May 2, 2008

MONTREAL, May 2 /CNW Telbec/ - Rio Tinto Alcan, along with local

partners, officially inaugurated the CURAL (Centre universitaire de recherche

sur l'aluminium), an integrated research and development laboratory dedicated

to aluminium products and processes. The Centre is located on the campus of

the Université du Québec à Chicoutimi, in Saguenay, Quebec.

"I am very pleased to reconfirm Rio Tinto Alcan's commitment to an

integrated research and development strategy with CURAL," said Jean Simon,

president, Primary Metal, North America, Rio Tinto Alcan. "This initiative is

another step in our efforts to contribute to economic diversification and the

development of new industrial applications and value-added activities in the

Saguenay-Lac-Saint-Jean region."

Announced in November 2005, Rio Tinto Alcan's share of the total

investment of more than CAN$9 million cost was approximately CAN$2 million.

"This new infrastructure and equipments at the university are significant,"

declared Jacynthe Côté, president and chief executive officer, Primary Metal,

Rio Tinto Alcan. "They increase considerably research synergy between the

university and our organization, in line with the strategic needs of Rio Tinto

Alcan."

The inauguration ceremony was attended by the Honourable Jean-Pierre

Blackburn, Federal Minister of Labour and Minister of the Economic Development

Agency of Canada for the region of Quebec, and Claude Béchard, Minister of

Natural Resources and Wildlife for the Quebec government and Minister in

charge of the Saguenay-Lac-Saint-Jean region.

CURAL aims at intensifying research in the treatment of bauxite and metal

fabrication processes, particularly forging and assembling. Working in

conjunction with the nearby National Research Council's Aluminium Technology

Centre, the new university laboratory will promote fundamental research at

levels allowing easier large scale technological transfer and increased use of

aluminium.

Ormet Announces Tolling Agreement with Glencore

FOXBusiness - Monday, May 05, 2008

SEND ComtexDigg It StumbleUpon Newsvine Reddit HANNIBAL, Ohio, May 05, 2008 (BUSINESS WIRE) ----Ormet Corporation, an independent U.S. producer of aluminum, today announced that it has entered into a tolling agreement with Glencore LTD. Under the tolling arrangement, which will be in effect for the remainder of 2008 and all of 2009 and will account for substantially all of Ormet's production during this period, Ormet will receive an up front payment in connection with the sale to Glencore of substantially all of Ormet's existing inventory of alumina, work in progress and finished goods, and will receive ongoing tolling fees as alumina is converted by Ormet into aluminum for Glencore under the agreement.

In addition, Glencore has agreed to purchase alumina which Ormet had previously contracted to acquire from a third party during 2008. Glencore will own all alumina, work-in-process and finished product subject to the tolling arrangement.

The agreement will free up approximately $13 million of working capital for Ormet, resulting in additional near term liquidity, as a result of the sale to Glencore of Ormet's existing inventory as part of the tolling arrangement. Ormet, with the assistance of their financial advisor, is exploring alternatives to eliminate a potential $15 million liquidity shortfall in the second half of 2008. Alternatives such as monetizing working capital, raising new debt, additional equity or contributing equity to the pension plans are all being evaluated and priorities will be set to address this potential need.

Ormet had previously entered into pre-pricing agreements with Glencore providing for the sale to Glencore of substantially all of Ormet's finished product for 2008 and 2009 at prices generally reflective of the market prices for aluminum on the London Metal Exchange at the time the respective pre-pricing agreements were entered into, less a customary discount.

Pre-pricing agreements were in place for substantially all of Ormet's 2008 finished goods production and approximately 23% of Ormet's 2009 finished goods production by the end of January 2008. Pre-pricing agreements with Glencore for the remaining approximately 77% of Ormet's 2009 finished goods production was in place by March 12, 2008. The tolling fees under the arrangement with Glencore, which are higher rate for 2009 than in 2008, incorporate the pricing reflected in these pre-pricing agreements. The pricing under the tolling arrangement also incorporates alumina costs for 2008 reflective of Ormet's existing purchase agreements and alumina costs at market for 2009.

In other news, Ormet announced that the company's full year 2007 and first quarter 2008 financial results are expected to be released on May 12, 2008. Effective April 30, 2008, the Company and Wachovia, its loan agreement agent, entered into Amendment No. 8 to the Company's Loan and Security Agreement dated as of February 14, 2007. The amendment reinstates the minimum EBITDA and minimum molten aluminum production maintenance covenants. In addition, the amendment reduces the maximum credit amount to $65,000,000 and releases or eliminates reserves in a total amount of $20,000,000. Ormet paid down the term loan of approximately $11,500,000 on April 30, 2008.

Ormet will conduct a live conference call on Monday, May 12, 2008 at 3:00 p.m. ET, to review the Company's 2007 4th Quarter and 2008 1st Quarter financial results and provide an update on its current business. Mike Tanchuk, President & CEO, and James Riley, CFO, will host the conference call. The Company will post its financial results on its website (www.ormet.com) prior to the call.

To participate, individuals should dial 877-407-8291. No pass code is required. A replay of the call will be available until Monday, May 19, 2007 by dialing 877-660-6853, entering account number 276#, and using replay pass code 283867#. For questions, please call 740-483-2776.

Certain statements contained in this press release constitute forward-looking statements within the meaning of the federal securities laws. Such statements are based on current expectations, and actual results and the timing of certain events could differ materially from those projected in or contemplated by these forward-looking statements due to a number of factors. Readers are cautioned that Ormet's business is subject to numerous significant risks and uncertainties, including but not limited to the significant ongoing liquidity and capital needs of Ormet.

Headquartered in Hannibal, Ohio, Ormet Corporation is a major U.S. producer of aluminum. Ormet employs approximately 1,000 people. For more information, visit the website at www.ormet.com.

SOURCE: Ormet Corporation

James Communications, Inc. Linda King, 412-428-0050 or 412-296-2284

Director of Public Relations lregelman@jamescomm.net Copyright Business Wire 2008

UPDATE 1-Vietnam allows Alcoa 40 pct stake in alumina plant

Reuters - Mon May 5, 2008

HANOI, May 6 (Reuters) - The Vietnamese government said on Tuesday it will allow Alcoa Inc (AA.N: Quote, Profile, Research) to own up to 40 percent of a major alumina mining and refining project in the central highland of Daknong.

The project, with an annual capacity of 600,000 tonnes of alumina, will be 51 percent owned by state-run coal producer Vinacomin and 9 percent would be sold to the public, the government said in a directive.

The directive said the refinery must pay an annual royalty of 10 percent of its net profit to the government.

It also said Vinacomin would be allowed to conduct negotiations with China's biggest maker of aluminium, Chalco (2600.HK: Quote, Profile, Research) (601600.SS: Quote, Profile, Research), over a 40 percent stake in a bauxite mining project.

Vietnam has said it needed about $15.6 billion to invest in major bauxite and alumina refining projects by 2025, to make use of its vast and largely unmined bauxite ore reserves. (Reporting by Nguyen Nhat Lam; Editing by Alan Raybould)

Kaiser Aluminum's Out In The Cold

Forbes, NY 05.08.08

Ruthie Ackerman

The perfect storm has hit the aluminum industry in recent months: Rising input and energy prices have combined with a weak dollar to raise costs and soaring global inventories amid a slowdown in the U.S. housing and automobile markets has cut into sales.

On Thursday, Kaiser Aluminum (nasdaq: KALU - news - people ) said its first-quarter profit more than doubled on gains from hedging and reduced costs, but its sales increased only 1.7% from the prior year.

The maker of fabricated aluminum products said that the 1.7% sales gain to $399.0 million, up from $392.2 million in the prior year, was driven by an 8.0% increase in shipments of fabricated products that was partially offset by lower shipments in the primary aluminum segment, as well as lower realized prices in both the fabricated products and primary aluminum segments. Analysts had expected revenue of $378.6 million.

"Continuing strong demand for aerospace and defense applications and restocking at service centers led to increased shipments," said chief executive Jack A. Hockema.

Investors weren’t impressed. Kaiser’s shares sank 10.6%, or $7.85, to $66.09 at the close.

Record shipments of heat-treated plate, driven by strong demand for aerospace and defense-related applications, along with restocking at service centers, led to the shipments gain.

The fabricated products segment was positively impacted by greater volume, mix, and value-added prices that were offset by unfavorable energy costs, planned major maintenance expense, currency exchange rates, and depreciation.

First-quarter plate shipments hit a record level, despite an unfavorable product mix and a short unplanned outage of a light-gauge heat-treating furnace, the company said.

Recently there has been an increase in demand for aluminum plate because of the production of the new Airbus A380. Eventually demand for aluminum plate is expected to exceed supply once the Airbus A380 reaches full production, which is forecasted to for 2010--good news for Kaiser.

Kaiser has recognized the opportunity and has been ramping up by bringing on new capacity at Trentwood, Kaiser's flat-rolled aluminum mill in Washington state, the majority of which is already locked up in long term contracts.

"Equipment installation for phase three of our heat treat plate expansion at Trentwood begins later this summer. We expect it to be fully operational by year-end," said Hockema.

Meanwhile, on April 25, Century Aluminum (nasdaq: CENX - news - people ) reported its sales increased 5.2% to $471.1 million, up from $447.7 million, an indication that Kaiser’s sales are slowing more than its competitors.

Kaiser’s net income for the three months ended March 31 rose to $39.1 million, or $1.92 per share, compared with $17.1 million, or 85 cents per share, in the prior year.

The company reported operating earnings of $41 million, up from a $4 million loss in the prior year, due to a boost of $31 million on unrealized gains from hedging transactions. Kaiser said it realized higher aluminum prices and improved costs for alumina, which is used to produce aluminum, which helped to partially offset the impact of unfavorable currency exchange rates.

Analysts polled by Thomson Financial expected earnings per share of $1.06.

On Thursday Alcoa (nyse: AA - news - people )'s shares soared to their highest levels in over six months amid speculation that mining titan Xstrata (other-otc: XSRAF.PK - news - people ) may be interested in acquiring the company.

Recent media reports have linked Xstrata to Macarthur Coal, which The Wall Street Journal said is mulling the takeover bid as mining sector consolidation heats up in Australia.

Last week, Citigroup analyst John Hill said that China is shifting to a net importer of aluminum, which should benefit the metal in the second half of the year.

Global aluminum inventories have been tracking higher because of strong supply growth out of China. (See " China's Pain Is Century Aluminum's Gain") At the same time, the downturn in the U.S. housing and automobile market has decreased demand for the metal.

China produces 31% of the world’s aluminum supply, while the U.S. produces 7%.

Century Aluminum's shares have gained 9% since Hill's note was published and Alcoa's stock has jumped 14% since the May 1 close of $34.72.

The Associated Press and Thomson Financial contributed to this article.

RusAl Wage Talks in Jamaica

The Moscow Times, Russia - Monday, May 12, 2008

United Company RusAl, the world's largest aluminum producer, said Thursday that its Jamaican bauxite and alumina plant was operating normally and that wage talks with a labor union were ongoing.

The plant, operated by Alumina Partners of Jamaica, has two unions, with one already agreeing to renew workers' contracts, said Halvor Molland, a spokesman for Norsk Hydro. Hydro owns 35 percent of the plant. RusAl, owner of the majority stake, commented separately in an e-mailed statement. "There is no immediate risk of production disturbances," Molland said. Talks are over the renewal of a three-year contract, he said. (Bloomberg)

Hayes Lemmerz to close Georgia-based facility

Houston Chronicle May 12, 2008, 7:58AM © 2008 The Associated Press

NORTHVILLE, Mich. — Hayes Lemmerz International Inc., which makes aluminum and steel wheels for cars and trucks, said Monday it will close a facility in Gainesville, Ga., by the end of the year.

Hayes said worldwide overcapacity in the light vehicle aluminum wheel market and aluminum wheel imports caused the company to close the facility.

The facility employs 290 people.

"The phase-out is a difficult but necessary step in our overall plan to provide our customers the highest quality products at competitive prices and to improve profitability," Chief Executive Curtis Clawson said in a statement.

Alcoa To Close facilities in Texas, Mexico; To Cut 1465 Jobs

RTT News, NY - 5/12/2008

Alcoa Electrical and Electronics Solutions, the electrical solutions business of aluminum producer Alcoa Inc. (AA: News, Chart, Quote ) Monday revealed plans to shutdown facilities in Mexico and Texas in the third quarter. A decline in production demand and a change in logistic processes have prompted the company to take the decision. The restructuring is expected to affect a total of 1465 employees.

As per the plan, Alcoa would close operations in Puebla, Mexico as well as its warehouse in Del Rio, Texas. The closure will result in the elimination of about 65 jobs in Del Rio and nearly 1,400 jobs in Puebla. The company will provide full severance and outplacement support services to the affected employees.

Jon Jensen, President of Alcoa Electrical's Light Vehicle Market and Operations-Americas, commented, "This difficult decision is the result of the competitive conditions in the marketplace, and the actions are necessary to adjust AEES capacity to market demand and to improve our logistics processes."

On May 8, Alcoa announced the appointment of Klaus Kleinfeld as its President and Chief Executive Officer, succeeding Alain Belda. Prior to joining Alcoa, Kleinfeld was associated with electronics and industrial conglomerate Siemens AG as President and Chief Executive Officer.

For its first quarter, Alcoa reported a sharp decline in profit, hurt by higher raw material and energy costs as well as a weaker dollar. Earnings for the quarter declined to $303 million or $0.37 per share from $662 million or $0.75 per share for the year-ago quarter. Sales declined 6.7% to $7.38 billion from $7.91 billion in the same quarter last year.

Earlier in February, Alcoa reported a partnership with Aluminum Corporation of China to acquire 12% of the UK common stock of mining company Rio Tinto Plc (RTP: News, Chart, Quote ). Rio Tinto, the second-biggest aluminum producer, recently reported a 5% reduction in output at its New Zealand smelter, representing 1,400 metric tons a month, due to power constraints caused by drought.

Alcoa spent $410,000 in first quarter on lobbying

Houston Chronicle, United States - May 12, 2008

© 2008 The Associated Press

WASHINGTON — Aluminum producer Alcoa Inc. spent $410,000 in the first quarter to lobby on energy and other issues, according to a disclosure form.

The company lobbied the federal government on issues related to defense spending, climate change and access to electricity from the Bonneville Power Administration in Portland, Ore.

The Bonneville Power Administration, a federally-administered regional power agency, operates a group of hydroelectric dams. In February, the BPA issued a proposal to allow greater access to its hydroelectric power.

In the first three months of the year, the company lobbied Congress and the Federal Energy Regulatory Commission, according to a form filed April 17.

Lobbyists are required to disclose activities that could influence members of the executive and legislative branches, under a federal law enacted in 1995

Alcoa A Step Closer To Greenland Aluminum Smelter -Co

Trading Markets (press release), CA - Tuesday, May 13, 2008;

Greenland has moved a step closer to becoming the site of a new world-class aluminum smelter with the government agreeing to a second phase of joint studies into a potential project with Alcoa Inc. (AA), the U.S. producer said Tuesday.

If the project eventually gets the go-ahead, a smelter could be up and running by 2014-2015, with an annual capacity of 340,000 metric tons.

Last week, Greenland's Parliament backed the government's recommendation that a smelter be sited at Maniitsoq. Significant funding has been allocated by Parliament to the joint studies, which will extend through 2009 and will delve in detail into the economic, social, and environmental aspects of the proposed facility.

The smelter would make Greenland the latest location for Alcoa to become what its new chief executive calls an "anchor tenant." Klaus Kleinfeld, who took over the helm at Alcoa last week, told Dow Jones Newswires that the new smelter would be a "magnet" for other industries.

"Most of the time, smelters are in regions where there's not much employment, and are often used as magnets for other industries," he said. "In this way we act as an 'anchor tenant,' something that has seen many times in our history."

Greenland's Parliament is expected to convene again in 2009 to consider the country's ownership position in the project. Alcoa has been has actively working with Greenland's government as a potential aluminum partner since mid-2006.

The site for the proposed smelter was selected after extensive collaborative studies involving Alcoa, Greenland's government, and the communities of Nuuk, Sisimiut, and Maniitsoq, all of which have expressed strong support for the project.

The second phase of studies in Greenland is similar to those Alcoa conducted in Iceland, which has since led to the construction of the company's first new primary aluminum facility in 20 years. Fjardaal in eastern Iceland was officially opened in June 2007, and Alcoa and the government there are nearing a decision on whether to build a second smelter in Bakki, Husavik, in the country's north.

"We're moving things forward in Greeland in a similar way to the Iceland smelters - we have approval from the Greenland Parliament for a technical study repeating what we have done in Iceland," Kleinfeld said.

-By Andrea Hotter, Dow Jones Newswires; +44 (0)20 7842 9413; andrea.hotter@dowjones.com

Smelter Announcement possible soon for Alcoa

The Gazette (Montreal), Canada - Tuesday, May 13, 2008

Alcoa Inc. might soon announce the $1.5-billion expansion of its Deschambault aluminum smelter near Quebec City will go ahead with assurance that a further 500 MW of power will be available from Hydro-Québec. The smelter's annual capacity will almost double to 485,000 tonnes. ''We're actively negotiating with the Quebec government and Hydro-Québec, but these are complex matters and we can't say any more now,'' said Robert Després, Alcoa Canada's vice-president, public and government affairs.

© The Gazette (Montreal) 2008

Chinese aluminium smelters plan further large expansions

Mineweb, UK - Tuesday , 13 May 2008

Aluminium producers continue to plan (and build) massive amounts of new smelting capacity. According to our calculations, there are about 5.0mtpa of aluminium projects under-construction, which will be completed within the next 12-24 months. Most of the new, expanded projects have easy access of coal resources and cheap power tariffs. Hopes of China becoming a net importer of aluminium look likely to be pushed back further.

Spot alumina prices have recovered in recent months to trade around $425/t fob (as indicated by the latest Nalco sales tender in India). Prices are being supported by rising costs (bauxite and power), which are setting the floor for prices, and growing demand from aluminium smelters as they ramp back up after the 1Q 08 power-related production problems.

Aluminum extrusion shipments have nosedived

Purchasing.com, MA - 5/14/2008

By Tom Stundza

Purchasing of aluminum extrusions has withered in the building and construction, transportation, and engineered products markets, and may not recover until 2009, especially if analysts are correct that residential construction won’t rebound until sometime next year.

The Aluminum Association says shipments of aluminum extruded products of 294 million lb in March were down 12.1% from March 2007. Three-month shipments of 880 million lb are off 7.3% from the year-to-date 2007 total of 949.3 million. Association data shows that new-order shipments through March are flat for the extruded products and tubing category but dropped 3.5% in March from the previous month.

"The aluminum extrusions industry in the U.S. continues to suffer from a cyclical downturn," says John D. Gottwald, CEO of Tredegar Industries, a major producer, in a first quarter earnings report. The Richmond, Va.-based company says first quarter shipments of extrusions dropped by 12.5% in the first quarter of 2008 compared with the first quarter of last year, "with demand down in most market segments." Extrusions are sold.

Gottwald says the decreases in net sales and ongoing operating profit from continuing aluminum extrusion operations in the first quarter of 2008 compared with the first quarter of last year were mainly due to lower volume. Still, since 65% of U.S. sales of aluminum extrusions are related to non-residential construction, Tredegar is spending $24 million over the next 18 months to expand the capacity at its plant in Carthage, Tenn., too boost future capacity to service that sector when demand perks up.

Chalco raises cost of Saudi smelter project by 50%

SteelGuru, India - May 15, 2008

It is reported that Aluminum Corporation of China Limited has raised the cost of its smelter project in Saudi Arabia by 50% to USD 4.5 billion after allowing for the construction of a power plant. Chalco will hold a 40% stake in the 1 million tonne per annum capacity plant and 20% of an associated power plant. The smelter will cost USD 3 billion.

Mr Xiao Yaqing chairman of Chalco said that it plans to tap cheaper power resources in the Middle East as electricity prices rise in China.

Meanwhile, Fitch Ratings said that aluminum production in the Middle East will outpace growth in other regions over the next 5 years as producers abandon higher cost locations in the US and Western Europe. It added that aluminum production in the region could double by 2011 from 2 million tonnes now.

China's Aba Aluminum Smelter Halted After Earthquake

Bloomberg - May 15, 2008

By Li Xiaowei

A 120,000 metric ton aluminum producer in China's Sichuan province halted output after suffering casualties when the country was hit by its strongest earthquake in more than half a century, an official said.

The Aba smelter, located in the epicenter of the quake in Wenchuan county, has stopped output since the May 12 earthquake, Xu Xiaohua, a press official at Aba's parent company Bosai Minerals Group Co., said by phone from Chongqing today. There is no time table for the resumption of production, Xu said.

The magnitude 7.9 quake killed almost 15,000 people, destroyed buildings, disrupted commodities shipments, and damaged power lines. The province's three other aluminum smelters haven't reported disruptions, according to CRU International Ltd.

``Domestic stockpiles are considered quite high at the moment so consumers can work through these before supply disruptions filter through to the price,'' Li Junchao, an analyst at Shenyin Wanguo Futures Co., said in Shanghai.`` I don't think there will be much impact on aluminum prices because 120,000 tons of capacity is not large.''

China is the world's largest producer and consumer of aluminum, which is used in aircraft and cars, with a total capacity of more than 15 million tons. Smelters in Sichuan have a total capacity of 600,000 tons, Wan Ling from mining and metals researcher CRU said May 12.

Aba Casualties

The number of workers dead or missing at the smelter exceeds 30, with more than 100 injured, Xu said. Economic loss is more than 100 million yuan ($14 million), he said.

``We rescued 5 people buried under the rubble in the past two days,'' said Xu.

Sichuan Aostar Aluminum Co., Guangyuan Aostar and Qiya Aluminum are the other three producers in Sichuan and none have reported any disruption to operations so far, and neither did two other producers in Chongqing, Tiantai and Dongcheng, Wan said by phone from Henan today.

``Transport difficulties and possible power disruptions after the quake pose supply risks'' for the other smelters though its hard to estimate the impact now, Wan said.

The earthquake damaged power infrastructure in China's southwest. State Grid Corp. of China, the nation's largest electricity distributor, said it has restored 40 percent of the power supply in Sichuan that was disrupted by the earthquake, reconnecting about 300,000 homes.

Aluminum-making is electricity-intensive.

The Aba plant added 100,000 tons of capacity this month, according to Eric Zhang from Shanghai-based commodities researcher CBI China Co. It could smelt 20,000 tons before the expansion.

To contact the reporter on this story: Li Xiaowei in Shanghai at Xli12@bloomberg.net.

Smelter boss declines mayor's offer of help

Southland Times, New Zealand - Friday, 16 May 2008

By EVAN HARDING

The boss of the Tiwai Point aluminium smelter has turned down an offer from Invercargill Mayor Tim Shadbolt to help it fight the Government on the emissions trading scheme, apparently because the company is confident of getting its way.

The smelter's owner Rio Tinto Alcan told a select committee if the Government introduced an emission trading scheme in its current form it would put aluminium production at risk and could even result in the smelter being moved offshore. Mr Shadbolt said that would cripple Invercargill.

Having recently fought a high-profile campaign to fight government funding cuts at the Southern Institute of Technology, Mr Shadbolt yesterday e-mailed New Zealand Aluminium Smelters general manager Paul Hemburrow asking if they would like some support.

However, Mr Shadbolt said Mr Hemburrow e-mailed back declining the offer as the company was confident the emissions bill would not be passed in its current form as there were so many submittors arguing the same point and the government couldn't ignore the advice it was receiving. Mr Hemburrow said this week if the bill proceeded as it was currently written it was likely to put the smelter on the pathway to closure.

A 2005 Infometrics report, asked for by Venture Southland, said the smelter's closure would result in about 5 percent of Southland's population moving out of the region, a $250 million loss in property values, an $8 million loss in government funding and a $195 million permanent loss to Southland's gross domestic product.

There would also be a 55 percent reduction of cargo volume through South Port, the loss of up to 2500 children from the region, a significant reduction in health-related services and the loss of skills and volunteer capability to the region.

Infometrics economist Adolf Stroombergen, who put the 2005 report together, said yesterday its findings would still be in the ballpark region but Southland's economy was now more diverse and robust than it was in 2005.

China and Saudi Arabia sign electrolytic aluminum project

People's Daily Online, China - May 19, 2008

The Aluminum Corp. of China Limited, Malaysia Mining Corporation (MMC) and the Saudi Binladin Group (SBG) in the Kingdom of Saudi Arabia, recently met in Beijing to sign a joint agreement on the production of electrolytic aluminum with an annual output of one million tons in Jazan Economic City.

In the meantime, the Saudi Arabian General Investment Authority (SAGIA) also signed "the memorandum of understanding of commitment to support" on the project with the three parties.

The agreement is an important step for the Chinese aluminum industry to develop towards energy and resources-rich areas outside China; and gradually achieve a strategic adjustment in the company's structure.

Merrill Lynch Global Metals and Mining Conference

riotinto.com May 13, 2008

Speaker: Tom Albanese, Location: Florida, USA

Summary

Tom Albanese sets out to this key financial audience the reasons why he believes

the mining sector will continue to prosper given demand from developing economies

why prices will stay high due to supply constraints

why Rio Tinto, with its growth prospects and low-cost production, will be a key beneficiary of this growth.

Rio Tinto well positioned to benefit from long term demand growth

The mining sector is in a sweet spot with strong demand and constrained supply, and the likelihood that this will continue for many years

Rio Tinto has long standing strategy to invest in tier one assets. The value of that strategy is increasingly apparent today. Rio Tinto is a great business with outstanding operating assets, an organisational capability second to none and great growth prospects

At a time of financial turbulence the quality of mining earnings shines through - delivering the physical building blocks of economic growth and generating abundant cash.

The developing world fuelling demand

Established economic order of the world is changing - future GDP growth will be driven by the developing world. China and India just at the start of their most metals intensive growth phase.

Strong demand growth will lead to a continuation of current momentum, meaning a doubling of the current size of the markets for our three key products or iron ore, aluminium and copper between now and 2022.

Every 10% upward shift in China and India's urbanisation rates brings 240 million people into the cities - the entire population of urban dwellers in the USA.

The average dweller in the Chinese countryside uses 155 kilo s of steel - his cousin living in a developed coastal city uses 817 kilos - over five times as much.

Supply side constraints mean higher prices

Sector-wide supply constraints have led to consistent under-delivery industry-wide against expectations

Combined with tight inventories this has kept prices high

Longer term factors are at work such as length of time it takes to get permits for new mines, skilled people shortage, rising energy costs

What is different about this cycle is that new capacity has been added at the top of the cost curve - rising marginal costs mean better margins for existing low cost operators

Rio Tinto predicted total growth rate over 8% p.a. through 2015 - amongst the best in the industry

Aluminium - 7.6% CAGR (compound annual growth rate)

Iron ore - 9.4% CAGR

Energy (metallurgical coal, thermal coal and uranium) - 11.6% CAGR.

Copper - over 8.4% CAGR

Rio Tinto well-positioned in key products

Market consensus has consistently under-estimated both aluminium prices and iron ore prices. Much too early to call the end of the iron ore price cycle.

There has been a structural shift in the supply of both aluminium and iron ore which favours established low cost producers like Rio Tinto.

Iron ore

Rising costs of iron ore production delivered to China have been driving up spot prices - the market clearing price. Costs have risen for all suppliers but the relative position of Rio Tinto has improved - well positioned towards the bottom of the cost curve

Aluminium

Drivers of demand for aluminium in China are more sustainable than the drivers of supply

Construction of Chinese smelters over the last five years has populated the cost curve with low capital cost, high operating high cost smelters mostly in the fourth quartile

Those well positioned lower down the cost curve like Rio Tinto Alcan shown here will enjoy higher sustainable margins

For Rio Tinto Alcan the cost of energy per tonne of aluminium is around half the Chinese level

To view the slide presentation go to

http://www.riotinto.com/response/documents/Rio_Tinto_Tom_Albanese_Merrill_Lynch_conference_May08.pdf

Time to call Rio Tinto's bluff in New Zealand

Stuff.co.nz, New Zealand - May 15, 2008

By CHRIS TROTTER - The Dominion Post | Friday, 16 May 2008

Once again the masks have slipped. Once again we have caught a glimpse of the true faces of our masters. Once again, New Zealand's acute vulnerability to the power of vast transnational corporations has been brutally revealed.

As an exercise in raw economic coercion, Rio Tinto's submission to the parliamentary select committee scrutinising our Government's proposed emissions trading scheme (ETS) was chilling.

Ranged before the elected representatives of the New Zealand people were the appointed representatives of one of the world's largest and most profitable corporations.

Including its joint ventures, Rio Tinto employs 73,000 people in 61 countries. It is the global leader in smelting aluminium, with annual revenues of US$49 billion (NZ$65 billion), a sum roughly equivalent to 30 per cent of New Zealand's entire gross domestic product.

As living proof that neither race nor gender counts for very much in this new age of equal- opportunity capitalism, Rio Tinto's Asia/Pacific president is a woman of Chinese descent, Ms Xiaoling Liu. It was from her that the select committee received the bad news.

In its current form, she explained, the ETS posed a threat to the economic competitiveness of the Bluff aluminium smelter's production. Rio Tinto could not, therefore, guarantee the smelter's long-term future if the Government's scheme (in its current form) was permitted to proceed.

And that was that.

Her judgment, as cold and bleak as a Southland winter, was left to slowly defrost on the committee-room table. And now, while Invercargill shivers, and its voluble mayor, Tim Shadbolt, shakes his fist, our government must determine its response.

Thirty years ago, faced with such a flagrant challenge to its sovereignty, a Labour government might have countered Rio Tinto's presentation by threatening to nationalise its New Zealand operation. Today, quite apart from exposing the nation to all manner of WTO penalties, such a threat would be laughed out of court.

Rio Tinto, "whose business is finding, mining and processing the Earth's mineral resources", not only dominates the world's aluminium smelting industry, but also controls the lion's share of the planet's bauxite deposits. Without bauxite, of course, an aluminium smelter is useless.

So, should the Government call her and Rio Tinto's bluff?

By forcing Rio Tinto's departure, and the shutting down of the Tiwai Pt smelter, Labour would be free to divert 15 per cent of New Zealand's total electrical energy production (the amount consumed by the smelter) to other uses.

The period in which new generation facilities need to be commissioned could be dramatically extended, and electricity price rises smoothed considerably, by such a massive energy windfall.

Unfortunately, calling Rio Tinto's bluff would also entail ripping the heart (and, according to Mayor Shadbolt, the soul) out of Southland's economy. By local estimates, at least 3000 jobs – many of them extremely well- paid – would be lost, with devastating social and economic consequences for the entire Southland region.

While the fourth Labour government was only too willing to consign thousands of workers to the human scrap-heap in the name of economic rationalisation, I'm not so sure that this Government is ready to follow suit, at least, not in an election year.

Murray Horton, from the Campaign Against Foreign Control in Aotearoa, thinks they should: "Go ahead and close the smelter and bugger off", he thunders. "See if we care, the country will be much better off without you.

The smelter is the single biggest user of electricity, consuming one-sixth of the total. It pays a top-secret, super-cheap price that is not available to any other user and all it does is export electricity from New Zealand in the form of alumina, while being subsidised by all other electricity users."

Way back at the beginning of this latest period of globalisation, Jack Welch, the CEO of General Electric, notoriously remarked: "Ideally you'd have every plant you own on a barge." The theory was, big business could hold unions and governments to ransom by threatening to go offshore if the cost of labour, or environmental regulation, became too expensive.

What Mr Welch and his ilk failed to foresee was that a time would come when the greenhouse gas emissions from every plant they owned represented so great a threat to the planet that the location of their barges no longer really mattered.

I'd invite Rio Tinto to do their worst but I suspect they already are.

China, Tajikistan Agree to Build New Bauxite-Producing Plants

RedOrbit, TX - Tuesday, 20 May 2008, 21:00 CDT

DUSHANBE. May 20 (Interfax) - China and Tajikistan have signed an agreement on the construction of two aluminum fluoride and cryolite- producing plants in Tajikistan, the Tajik Aluminum State Company (TALCO) said.

The agreement was signed in Beijing on Tuesday.

"TALCO Management Ltd. and the Chinese State Heavy Machine- Building Company signed a contract for the production of aluminum fluoride and cryolite in Beijing on May 20, 2008," the company said.

The value of both plants is $30 million.

The company would not specify the capacities of the plants that will produce these two components, which are used in aluminum production, and the source of funding for the project.

Both plants will be built within a year, the company said.

"Over 60% of the raw materials necessary for the production of aluminum will be produced in the Republic of Tajikistan using local raw materials for a period of five years," TALCO said.

In 2007, TALCO produced 419.26 million tonnes of primary aluminum, exceeding the previous year's figures by 1.3%. TALCO is the main company in Tajikistan and accounts for three-fourths of the country's exports.

(c) 2008 Daily News Bulletin; Moscow - English. Provided by ProQuest Information and Learning. All rights Reserved.

Eskom Interrupts Smelter Power on Colder Weather (Update1)

Bloomberg May 21, 2008

By Carli Lourens

Eskom Holdings Ltd., South Africa's state-owned electricity utility, interrupted supplies to aluminum smelters late yesterday as colder weather boosted demand and six power plants required repairs.

While 6,156 megawatts of Eskom's installed capacity of 40,274 megawatts is out of service, the utility forecasts demand to peak at a 33,567 megawatts today, Andrew Etzinger, demand side general manager at the Johannesburg-based company, said in an interview from Cape Town.

Eskom's ageing plants have struggled to cope with demand since last year as Africa's biggest economy expanded at the fastest pace in 25 years in 2006. South Africa's power shortage will last for at least seven years after the government delayed approval of the utility's 343 billion-rand ($44.9 billion) expansion plan.

Six coal-fired plants have generator units out of service because of breakdowns, including boiler-tube leaks, and scheduled maintenance work, Etzinger said. Eskom supplies about 95 percent of the country's power.

While planned maintenance accounts for 2,277 megawatts, another 3,879 megawatts is down because of ``unplanned'' repairs, Etzinger said.

To contact the reporters on this story: Carli Lourens in Johannesburg at clourens@bloomberg.net

Columbia Falls Aluminum Co. considering layoffs

Reiten Television KXMB Bismarck, ND 23-May-2008

KALISPELL, Mont. (AP) The Columbia Falls Aluminum Co.

announced Friday it's considering reducing production at its smelter by as much as two-thirds.

Executives have notified union leaders at the Aluminum Workers Trade Council that it may have to lay off workers sometime in July.

Haley Beaudry, the company's external affairs manager, couldn't say how many employees might be laid off. The Aluminum Workers Trade Council has more than 225 members.

The notice to union leaders said the company is considering shutting down two of the three potlines currently in operation at the plant.

The company says the cutbacks are being considered because of the high cost of energy and raw materials, along with the stagnant worldwide price of aluminum.

Information from: Dax VanFossen/KOFI-AM, http://www.kofiradio.com (Copyright 2008 by The Associated Press. All Rights Reserved.)

Aditya Birla Group plans huge investments in Orissa

SteelGuru, India - May 24, 2008

KalingaTimes reported quoted Mr Kumaramangalam Birla chairman of Aditya Birla Group as saying that Orissa is an important investment destination of the group companies and is planning huge investments in the state.

Mr Birla said that all the investments put together would be to the tune of INR 80,000 crore in sectors such as alumina, cement, telecommunication and retail. This includes the investments already made in the ongoing projects.

During his meeting with Mr Navin Patnaik chief minister of Orissa, Mr Birla reportedly discussed about the problems facing the ongoing projects of the group companies and the projects for which memoranda of understanding had been signed.

As regards the Utkal Alumina International Limited's alumina refinery of project at Kashipur in Rayagada district where the affected people have been demanding more benefits, Mr Birla said that it had sought the intervention of the government to resolve the issues involved. Apart from the alumina refinery at Kashipur, the other projects for which the company has signed MoUs include a world class aluminum complex in Koraput and Sambalpur districts at a cost of INR 11,000 crore, and a cement plant in Sundargarh district.

Aluminum Casting Information on How to Cast Aluminum is Now Released

Hobart, Washington USA (PRInside) May 23, 2008

Aluminum Casting Information and stats on the Aluminum Casting Process and Aluminum Extrusion can now be found at a new section on Metal Casting website that is all about how to cast Aluminum. The new Aluminum Casting section can be accessed by users and non-users by visiting the following web address:

www.metalcastingzone.com/aluminum-casting/

Here is an excerpt from the Aluminum Casting section page on Metal Casting Zone:

'Aluminum is amongst those metals which can be ‘cast' by every process used in metal casting. These processes, in descending order of quantity of aluminum casting are: die casting, permanent mold casting, sand casting, plaster casting, investment casting, and continuous casting. The casting process is selected on the basis of factors such as cost, feasibility, quality, etc.

Feasibility is not a problem, as all the above methods are quite practicable. However, the most suitable casting method can be decided according to the design features or dimensions. For instance-Large products are made using sand casting. The quality factor is also important in selecting the casting process. Quality refers to both, mechanical properties (ductility and strength) and soundness (surface imperfections, cracking, and porosity freedom).'

The new Aluminum Casting webpage is there to provide users with all of the information they need on the Aluminum Casting Process and learning the basics of How to Cast Aluminum. It can be visited for free at: www.metalcastingzone.com/aluminum-casting/. This new section of Aluminum Casting information will continue to be updated with the latest and greatest information on the basics of Aluminum Casting at: www.metalcastingzone.com.

About Metal Casting Zone: Metal Casting Zone is a Community Site that brings users into a deeper relationship with Metal Casting.

Contact Information:

Metal Casting Zone

Author: Kent Klein, Director of PR

Email: PressReleases@metalcastingzone.com

Website URL: http://www.metalcastingzone.com

Phone: 425-503-8401

City/State: Seattle, Washington

Inga 3 feasibility tenders expected this year, says BHP Billiton aluminium president

Creamer Media's Mining Weekly, South Africa - 23rd May 2008

A committee established to study the feasibility of building the 4000-MW Inga Three hydroelectric project in the Demo-cratic Republic of Congo (DRC) is expected to invite public tenders this year, BHP Billiton president for aluminium Xolani Mkhwanazi tells Mining Weekly.

BHP Billiton has signed an agreement with the DRC government to investigate, with the DRC’s national electricity utility Snel, the possibility of setting up an aluminium smelter in the DRC’s promising Bas Congo region, where a conceptual smelter study was completed at the start of 2007.

"We think there is a project there," says Mkhwanazi.

Envisaged is a $3-billion aluminium smelter which will use up to 1 600 MW of electricity to produce 800000 t/y in its first phase.

BHP Billiton has acquired suitable land in Muamba, a DRC town lying on the Atlantic Ocean coast at the mouth of the Congo river, where a promising port site has been identified.

The Inga Three prefeasibility study has been completed and BHP Billiton has agreed to lend the DRC government $10-million in order to expedite the full Inga. The feasibility study is now under way, pending African Development Bank (ADB) funding.

As part of this agreement, a com- mittee made up of the DRC’s depart- ments of energy, public enterprises, finance, industry and commerce, Snel and BHP Billiton was formed to oversee the feasibility.

The committee, which meets monthly, has since appointed a chair- person, identified a project leader and agreed to terms of reference.

SNC Lavelin’s prefeasbility study is being reviewed and the World Bank and ADB rules will be followed in inviting inter- national tenders.

"We are hoping that international tenders will be invited in the next two months," Mkhwanazi tells Mining Weekly.

BHP Billiton intends synchronising its aluminium smelter pro-ject with the Inga Three project.

"Absolute synchronisation is important to us so that first power coincides with first metal," says Mkhwanazi.

If everything goes according to plan, the first aluminium could be produced in the first quarter of 2015, from alumina imported from Australia and South America.

In an entirely separate transaction, BHP Billiton has entered into an agreement with two other entities to build an alumina refinery in Guinea, which could come on stream in 2012.

"We are now leading the finalisation of a full bankable feasibility study and we are optimistic that there is a project there as well," says Mkhwanazi.

If there is, the refinery proposed will have a capacity process of at least three-million tons of bauxite a year, bringing it close to Worsley’s 3,5-million-ton-a-year capacity in Australia, which is the prime supplier of alumina to BHP Billiton’s energy-constrained aluminium smelters on Southern Africa’s east coast, one at Hillside, in KwaZulu-Natal, and the other at Mozal, in neighbouring Mozam-bique. South Africa’s energy crisis has resulted in BHP Billiton having to close potlines at the Bayside, also in Kwazulu-Natal.

BHP Billiton, with a production of 1,3-million tons a year, is the world’s fourth-largest aluminium producer.

Editor: Esmarie Swanepoel

Saudi profits from mineral wealth rush

AME Info, United Arab Emirates - May 22, 2008

State-owned Saudi Arabian Mining Company (Maaden) will launch an initial public offering of 50% of its equity in July. The float represents the Middle East’s largest ever mining company IPO.

Saudi Arabia: Thursday, May 22 - 2008 at 17:23

Maaden's IPO is expected to raise $2.47bn

The issue of 462.5 million $5.50 shares is half of Maaden’s stock and values the company at $4.9bn.

The IPO is expected to raise $2.47bn and will provide the last link in the financing arrangements for the company’s huge aluminium project says Maaden chief executive officer Abdullah Dabbagh.

Financing for the joint venture aluminium project with Rio Tinto Alcan is expected be concluded by August.

JP Morgan Chase & Company is advising Maaden over the IPO which will be restricted to Saudi institutions and individual investors. The remaining Maaden stock will be held by the Public Investment Fund which is controlled by the Ministry of Finance.

Financing complicated by construction costs

Escalating construction and material costs have complicated finalisation of the estimated $7.5bn venture, which involves building a 670,000 tonnes-a-year smelter, alumina processing facility and 1,800 megawatt power plant, north of Jubail on the kingdom’s east-central coast at Ras Al Zour.

Rio Tinto Alcan will own 49% of the venture and draw on a 30-year bauxite reserve, in northern Saudi Arabia at Az Zabirah, to supply the smelter’s alumina refinery. Maaden is targeting 2012 for the smelter’s start-up.

The project is a major diversification for Maaden which at present generates most of its income from gold mining in the Kingdom but this will be dwarfed by the aluminium project, as well as by a phosphate venture now being developed.

The phosphate project is being carried out with Saudi Basic Industries Corporation at a cost of $4.5bn. This involves extracting phosphates in the Jalamid area of central northern Saudi Arabia and constructing a processing plant with a capacity to produce 3 million tonnes-a-year of di-ammonium phosphate fertiliser.

International market interest

The venture, when commissioned, is set to take more than 20% of the global market for phosphate-based fertilisers and is generating wide ranging international interest.

Standard Chartered Bank and Riyad Bank are advisors to Maaden and SABIC who hope to raise $2bn in Islamic financing for the project. Korean Export Insurance Corporation is also discussing providing $600m for the project.

Both the aluminium and phosphate projects are predicated on the building of a state-funded 1,500 kilometre railway linking the coast with the new mines in the north.

The rail link is expected to also open up mining opportunities for nickel, silicon, manganese, and other bulk ores.

Unexplored mineral resources

However, most of Saudi Arabia’s mineral wealth still remains unexplored. The kingdom has two major geological regions. The Arabian Shield on the west side contains precious metals where large deposits of gold, iron ore, copper, phosphates, silver, uranium, bauxite, coal, tungsten, lead and zinc wait to be exploited.

The sedimentary cover to the north, west and south is the location of very large volumes of industrial minerals including world-scale deposits of phosphates and bauxite

Dabbagh points out 'there is a million square kilometres of ground to explore and we have only just started.’

Dubal to ship 100,000 tonnes of aluminum to Japan in 2008

SteelGuru, India - May 25, 2008

Dubai Aluminum Company Limited expects to ship 100,000 tonnes of aluminum to Japan in 2008, the majority of which will be billet with 52% share, followed by high purity aluminum with 25% share, foundry alloy with 11% share and standard purity with 9% share.

At present, Dubal has the capacity to produce more than 950,000 tonnes of finished aluminum products a year, comprising foundry alloy for automotive applications, extrusion billet for construction, industrial and transportation purposes and high purity aluminum for the electronics and aerospace industries.

A strategic plan is unfolding, the ultimate goal of which is the realization of Dubal's vision to become the fifth largest producer of primary aluminum in the world by 2015, by producing 2.5 million tonnes per year.

Dubal will once again showcase the company's specialized alloy products that are used extensively by Japanese auto part manufacturers at the automotive engineering exposition 2008. The show provides a platform for manufacturers of automobiles, parts and material, testing and measurement equipment, software, car electronics and related companies to exhibit their latest products and technology.

Novelis Investing $30 Million to Improve and Expand Aluminum Operations in Brazil

FOXBusiness - Monday, May 26, 2008

SAO PAULO, Brazil, May 26, 2008 /PRNewswire via COMTEX/ ----Novelis Inc., the world leader in aluminum rolling and beverage can recycling, announced today that it will invest more than US$30 million in its operations in Brazil over the next 18 months in a number of projects designed to increase production capacity and introduce new technology.

"These investments will allow us to continue to meet the demands of the rapidly growing markets in South America as well as provide a technology platform from which we can expand our offering of innovative, high-value products to our customers," said Martha Finn Brooks, president and chief operating officer for Novelis.

Close to $21 million will be invested in process technology and equipment improvements at the company's aluminum rolling mill and recycling complex in Pindamonhangaba. The improvements will provide a double-digit increase in the plant's rolling capacity to 400,000 metric tons per year and will increase its annual capacity for aluminum recycling from 80,000 to 150,000 metric tons.

The company also announced that it will invest $4.6 million at its Ouro Preto plant to install its Novelis Fusion(TM: 98.89, -1.59, -1.58%) solidification technology for the production of aluminum sheet ingots with multiple alloy layers. These multi-alloy ingots can be rolled into sheet products with previously unattainable product features.

The proprietary Novelis Fusion(TM: 98.89, -1.59, -1.58%) technology opens up new opportunities for aluminum sheet in market segments such as automotive, architecture, building and construction, durable goods, electronics and transportation. The Ouro Preto site will be the first plant in South America, and one of four globally, offering this breakthrough technology to Novelis customers. For more information on Novelis Fusion technology, please visit www.novelis.com/fusion .

In addition, the company said that it will invest $4.7 million in an information technology project aimed at integrating and unifying its current operating systems in Brazil. The activity will serve as a global pilot project for Novelis and will later be implemented in the company's operations worldwide.

Novelis also confirmed that it is pursuing a project to expand its hydroelectric generating capacity in Brazil. Public hearings are currently under way on a proposed 23 MW development in Nova Brito, in the state of Minas Gerais.

Currently, Novelis produces about 60% of the energy it requires for its operations. In recent years, Novelis has invested some R$500 million in the construction of new power plants to meet the demands of its factories and to render its business more competitive. The company operates nine hydropower plants in the state of Minas Gerais with a total installed generating capacity of 117 MW.

"Together, all of these investments demonstrate the degree of confidence that our parent company, Hindalco Industries Limited, has towards business in Brazil and the company's commitment to maintain the standard of excellence in our operations and our products," said Tadeu Nardocci, President of Novelis South America.

About Novelis in Brazil

Novelis is the leading producer of aluminum rolled products in South America and is also involved in bauxite mining, alumina production, chemicals, primary aluminum production and recycling. The company employs approximately 2,000 people throughout Brazil. The company's main assets in the country are the aluminum smelters in Aratu (BA: 81.48, +0.07, +0.08%) and Ouro Preto (MG), aluminum rolling operations in Pindamonhangaba and Santo Andre (SP), and nine hydropower plants located throughout the state of Minas Gerais. For more information, visit http://www.novelis.com.br

NZ govt eyes power-saving measures after dry spell

Reuters UK - Tue May 27, 2008

WELLINGTON (Reuters) - New Zealand could face electricity conservation measures in three weeks unless key hydro catchments get good rainfall, the government said on Tuesday.

Despite some voluntary scaling back of power usage by big business users, the key South Island hydro lakes remain very dry, Energy Minister David Parker said in a statement.

"Unless we have some increased inflows in the South Island hydro catchments in the next three weeks, further conservation measures will have to be looked at," Parker said in a statement.

Parker said work was continuing on a range of contingency measures if rain did not appear, but did not detail any specific plans.

About two-thirds of New Zealand's electricity comes from hydro power, with most of the major schemes located in the South Island.

New Zealand's official level of hydro storage has already fallen into the "minzone", a technical level where state agency The Electricity Commission considers conservation measures.

Last Wednesday, wholesale electricity market operator M-Co said New Zealand's stored energy had fallen 8 percentage points over the previous week to be 60 percent of average.

Concerns over supply are putting upward pressure on prices, with prices at the North Island reference point of Haywards rising 30.6 percent last week to NZ$277.68 ($215.26) per megawatt hour.

Rio Tinto Ltd/Plc on May 16 said it would cut output by 10 percent at its Tiwai Point aluminum smelter. The smelter, in the southern part of New Zealand's South Island, consumes about 15 percent of the country's electricity. New Zealand's last power crisis was in 2003, when an advertising campaign urged residential consumers to try and cut their electricity usage by 10 percent, alongside voluntary business cutbacks.

If the crisis had got worse, the government had planned to start cutting residential hot water supplies, followed by rolling power cuts for residential users, followed by widespread blackouts.

(Reporting by Adrian Bathgate; Editing by James Thornhill)

UC Rusal Restarts Operations In Nigeria

LeadershipNigeria, Nigeria - May 26 23:05:08

Nigeria's sole aluminium smelter owned by Rusal Company, the world's largest aluminium and alumina producer, has made its first shipment of 72 tonnes of aluminium ingots from the plant of Aluminium Smelting Company of Nigeria Ltd. (Alscon), located in the southern port town of Ikot Abasi, to the port of Rotterdam in the Netherlands.

Andrey Partyanskiy, managing director, Alscon, in a statement said that it has exported the first aluminium ingots produced at its recently re-opened smelter in Nigeria, citing that the company will now seek new sites for additional smelters and places to mine bauxite, the principal ore used to make aluminium, in Africa.

The first shipment was made from the smelter which had been idle since 1999, restarted in February even though the plant has been a subject of an ownership wrangle.

Andrey said the beginning of export shipment marks a significant milestone for Alscon and represents new opportunities for all stakeholders in the sector.

He said sales of metal to the local market will also commence and will have a positive impact on Nigerian local industries. According to Andrey, Nigeria has a huge potential for becoming one of the major producers of aluminium in Africa.

Andrey added that at full capacity, the smelter would provide 1,900 jobs. Associated small and medium-size businesses to support the smelter are expected to also create approximately 20,000 related jobs for the state of Akwa Ibom.

Alscon had a capacity of 193,000 tons a year when it opened in 1997 at a cost of US$2.5-billion. It is virtually new, partially completed in 1997, it operated for just about three years on a trial basis, and had stood idle since 2000, when a combination of inadequate and costly gas supplies for electricity generation, and difficult transportation access by river, made production impossibly costly to sustain.

Due to inefficient management, the smelter only produced a lacklustre 40,000 tonnes before it was shut down in 1999. It produced its first aluminium in eight years in February this year.

UC Rusal hopes to get the plant to its original capacity by 2010 through an investment of US$300-million. It is now operating 40 of the smelter's cells, with a target of 140 cells by year end and 432 cells by 2010.

The Oleg Deripaska-controlled company took over a majority stake in Alscon in February 2007, but found itself in hot soup down the line in Nigeria and the United States, where US companies tried to persuade the Bush administration to back them in a bid to oust the Russian billionaire from the Nigerian smelter.

In November last year, it was said that UC Rusal had been taken to court in Nigeria and the US by the Los Angeles-based Bancorp Financial Investment Group, which had sued it for abusing the privatisation process in 2004 resulting in it being awarded Alscon on a low bid.

The Nigerian government was also reportedly ready to investigate how Deripaska was able to take control of Alscon for only US$250-million. With new smelters generally costing about US$4,000 per ton to build, UC Rusal's price for Alscon was almost one-third the going rate at US$1,667 per capacity ton for the 77.5% stake.

But last month the Nigerian government had changed in its stance towards the company, commending it when it announced that it had spent over US$20-million in refurbishing and modernising the smelter since taking over Alscon. Minister of state mines and steel development, Alhaji Mohammed Gusau, is on record as having told journalists after touring the plant in April that he was pleased with the world-class quality of aluminium produced by Alscon and the scale of production which the plant has reached only two months after the launch.

He was also satisfied with the cordial relationship, which exists between the company and the local communities and urged the population to create a favourable working environment for the company to operate, adding that "the achievements in both production and social aspects are commendable and we look forward to seeing more of those in the future".

Rio Tinto's Kitimat soap opera isn't over yet

Globe and Mail, Canada - May 29, 2008

KONRAD YAKABUSKI kyakabuski@globeandmail.com

MONTREAL -- Rio Tinto Alcan head Dick Evans has, let's just say, eclectic musical tastes that veer from the disco classics of Boney M. to the overwrought ballads of Eros Ramazzotti. But no matter what you think of the tunes, you've got to admit that they're an improvement on the cacophony coming out of the global aluminum market.

Prices of the lightweight metal have been hovering around $3,000 (U.S.) a tonne of late, up about a quarter since year-end. They're either on their way to $4,000, as global power shortages force metal producers to slash output, or to $2,000, as a U.S. slowdown and new Chinese smelters coming on stream this year induce a market glut. How's that for clarity?

Major investment decisions aren't based on short-term prices. But if you can't predict where the price of aluminum will be in 10 months, how can you pretend to know where it will stand in 10 years?

Yet, this is pretty much what the Montreal-based Mr. Evans must do as his bosses at British-based parent, Rio Tinto, prepare to make some big decisions not only about whether to expand smelter capacity in Canada, but whether they really want to be in the aluminum business at all.

It may sound absurd to suggest that, only months after its $38-billion takeover of Alcan Inc., Rio Tinto is reconsidering. But, then again, it takes a healthy appetite for the surreal to think that Aussie rival BHP Billiton is serious about proceeding with a hostile bid for Rio Tinto that is worth something like $170-billion at recent share prices. That's about the gross domestic product of British Columbia.

Speaking of B.C., the interminable saga surrounding the fate of Alcan's Kitimat smelter may be coming to a head. The town council wants closure. Not of the smelter. Of the mud-slinging.

The decade-old dispute has centred on the 900-megawatt Kemano hydro power project. Alcan owns it outright under a 1950 deal with the provincial government. Kitimat says the government of the day gave Alcan water rights to produce aluminum. Period. Alcan has ratcheted down production at the smelter and sold surplus power to B.C. Hydro at several times the cost of production. The B.C. Court of Appeal recently upheld Alcan's right to do this. And the town has decided to forgo an appeal to the Supreme Court of Canada.

So, the courts have decided. Alcan can legally walk away from its aging 54-year-old smelter - which is near the end of its productive life - and simply sell all of Kemano's output. A recent long-term purchase agreement approved by the province's utilities commission has provisions for Alcan to sell up to 380 MW to the utility at prices starting at $65 per MW/h, about 10 times more than Kemano's cost of production. That agreement does not preclude selling additional power, although B.C. Hydro would need to build additional transmission capacity to handle it.

Why, then, would Rio Tinto's board even contemplate plowing well upwards of $2-billion to modernize and expand the smelter based on uncertain aluminum prices when it can earn colossal guaranteed returns by simply selling all of Kemano's electricity?

The baldly commercial answer is, it wouldn't. Yet, Mr. Evans, a man of his word, still insists the new smelter is a go. There's even been some ground-clearing on the site. But Mr. Evans still needs a final green light from Rio Tinto's board. A decision is promised by year's end, and, as devoted watchers of As Kitimat Turns know, there have already been so many plot twists to this soap, you'd be naive to expect there won't be more.

The B.C. government probably, maybe wants a new smelter. It's a big investment, and without one, Kitimat, and a northwestern hub, would more or less wither. Besides, the new smelter would spew out 40 per cent fewer greenhouse gases in a province bent on walking the get-tough-on-climate-change walk.

On the other hand, no smelter equals zero emissions. And B.C. Hydro could get all that clean Kemano power, instead of just some of it, and maybe eliminate the province's dependence on dirty coal-based electricity from Alberta.

So, cue eerie music, here's that new twist. Until recently, Alcan had given top priority to building a massive 720,000-tonne smelter in South Africa. That's suddenly been delayed indefinitely - perhaps permanently - by that country's insoluble power crunch. Expansions at Kitimat and Alma, Que., just became top-of-mind for Mr. Evans.

It's not clear that Kitimat is on Rio Tinto chief Tom Albanese's mind at all. You might say that figuring out how to fend off BHP occupies his days. Spinning off the aluminum business to Alcoa and Aluminum Corp. of China, which own 9 per cent of Rio Tinto, is one option. The process will take months.

As Kitimat Turns has not quite ended its run.

Alcoa Warrick Operations Moves to Reduce Emissions

Inside INdiana Business (press release), IN - May 27, 2008

Alcoa Warrick Operations Communications and Public Affairs Manager Sally Rideout Lambert says upgrades are being made to all four production units at the facility's power plant.

A $500 million project to reduce emissions at Alcoa's Warrick Power Plant in Newburgh has taken a significant step forward. The first of four units has gone online and all should be operating by the end of the year. Construction started in 2005 and Alcoa says once the project is completed the new scrubbers will reduce sulfur dioxide emissions by 98 percent and hydrochloric acid emissions by 99 percent.

NEWBURGH, IN: May 27, 2008 - A $500 million project to improve the environment with the installation of Wet Flue Gas Desulphurization technology (scrubbers) at Alcoa's Warrick Power Plant took a significant step forward Monday when the first of four units went online. All four units will be connected and activated individually and should be fully operational by year's end.

Construction started in 2005, and once completed later this year, the scrubbers will provide for a:

-98% reduction in Sulfur Dioxide (SO2)

-99% reduction in Hydrochloric Acid (HC1)

-60% reduction in mercury (Hg)

-50% reduction in Sulfuric Acid (H2SO4)

-49% reduction in Particulate Matter (PM)

During this time, hundreds of local contractors have worked at the site constructing an integrated environmental control system at the Warrick Power Plant that will ultimately include Wet Flue Gas Desulphurization spray/absorption towers, flue gas booster fans, and support facilities.

Major physical changes at the plant include new stack configurations, slurry handling and preparation facilities, water treatment facilities to reuse Warrick Operations discharge waters, dry fly-ash handling, an electrical sub-station, and improved control facilities for the entire system. More than 25 new, permanent employees have been hired to operate the new equipment.

"This is a significant investment to reduce emissions well beyond anything required by regulation while increasing the global competitiveness of the Warrick Operations," said G. Royce Haws, Primary Metals Location Manager. "It is a strong demonstration of Alcoa's commitment to sustainability and to the future of Warrick Operations.

It is securing jobs at Alcoa, increasing work for the area's construction industry, and significantly contributing to a cleaner local environment. The benefits to the region are immense."

The Warrick Power Plant Unit 2 had been taken out of production in April to allow the scrubber to be tied-in to the unit. Now that the scrubber is an integral part of the unit, it will not be possible to operate Unit 2 for production of power without also operating the scrubber. Area residents can visibly see the work of the scrubber as the process creates a white water vapor plume coming from one of the new, gray chimneys constructed alongside the familiar red and white stacks.

The Warrick Power Plant is a four-unit, 742 megawatt (MW), coal-fired, steam-electric generating facility. Units 1, 2 and 3, rated at 144 MW each, and one-half of the 300 MW Unit 4 are owned by Alcoa. Vectren, provider of natural gas and electricity to the region, owns the other half of Unit 4. All of these units were placed in service between 1960 and 1970. Of the Alcoa-owned generation, nearly all of the power is provided to Warrick Operations.

About Warrick Operations

Alcoa Warrick Operations is an integrated facility housing a 309,000 metric ton per year (mtpy) primary aluminum smelter and rigid packaging operations that produce aluminum sheet for beverage and food can ends, tabs, lithographic sheet, and other flat-rolled aluminum products.

Alcoa's Warrick Power Plant is a 742 megawatt (MW) coal-fired power plant that provides the power necessary to operate the plant. Warrick Operations is one of the largest aluminum smelting and fabricating facilities in the world with more than 120 acres under roof and 14,000 total acres in the community. Alcoa generates $1 Million a day into the local economy and employs more than 2100 people. More information can be found at www.alcoa.com\warrick.

China considering curb on aluminum exports

Reuters - Thu May 29, 2008

SHANGHAI (Reuters) - China is considering policy measures to restrain exports of low value-added aluminum products and bring China's foreign trade in aluminum into balance, an industry official said on Thursday.

Beijing is trying to reduce the country's exports of goods from heavily polluting or energy-intensive industries, especially as it faces recurring power shortages.

"We are aware that China is a net exporter of aluminum in the first four months, although we can see there were net imports of primary aluminum," said Jia Mingxing, vice chairman of the China Nonferrous Metals Industry Association.

Jia said the association was in discussions with the government, including the Ministry of Commerce, on adopting such policies, which could include raising export taxes on aluminum rod and other products.

He declined to give a possible time frame for implementing the measures.

"We will make decisions in accordance with the development of the trade situation," he told reporters at a conference held by the Shanghai Futures Exchange.

"We aim to secure balance in the aluminum trade situation in China," he said.

John Kemp, chief economist at RBS Sempra Metals said it was unlikely that China would remain such a massive exporter of aluminum, both primary and secondary, in the medium term.

"Clearly, the government policy is to deter energy-intensive sectors," he added, noting that the country's increasingly tight power availability would restrain energy-intensive sectors.

China exported 610,000 metric tons of aluminum products in the first four months of the year, while importing 222,714 metric tons. Imports of primary aluminum during the period totaled 48,993 metric tons, while exports were 22,080 metric tons.

(Reporting by Alfred Cang and Rujun Shen; Writing by Edmund Klamann; Editing by Keiron Henderson)