AluNews - October 2008

Plan for new St Ann bauxite/alumina plant should be clear by end of 2009

Jamaica Observer, Jamaica - Wednesday, October 01, 2008

In another year Century Aluminum, along with Hong Kong-based Minmetals Aluminum Company, will know whether they will be investing in a bauxite and alumina joint venture project in Jamaica.

The two companies in 2006 had set up to determine whether it would be feasible to establish a 1.5 million-tonne alumina plant in Jamaica.

According to its second quarter financial statements issued in July, Century said that the "conceptual study" was completed successfully and that both firms had commissioned a full feasibility study for a bauxite and alumina joint venture project in the island.

"The study is scheduled to be completed by the end of 2009," said the report.

The proposed site of the plant is south of Discovery Bay.

The plan proposed in 2006 was looking at the possibility of establishing a plant that would have a capacity to refine 1.5 million metric tonnes of alumina, and would require capital outlay of around US$1.5 billion.

Currently, industry standard for converting bauxite to alumina is approximately two metric tonnes of bauxite for every tonne of alumina. Therefore, for the venture to be feasible, the survey would have to reveal deposits of the ore that could yield three million tonnes of bauxite yearly.

If found to be feasible, construction could take another two to three years, an estimate given to the Business Observer by Giulio Caseloo, Century's then vice president of bauxite and alumina.

Rio Starts to Restore Idled N.Z. Aluminum Smelter (Update1)

Oct. 2, 2008 (Bloomberg)

By Gavin Evans

Rio Tinto Group, the world's second- biggest aluminum producer, started restoring idled capacity at its New Zealand smelter, a process that may take 10 weeks.

The 350,000 metric ton-a-year Tiwai Point operation, 79 percent owned by Rio Tinto Alcan, is restarting 93 smelting cells after rain on New Zealand's South Island restored hydroelectric output and cut power prices, General Manager Paul Hemburrow said.

``We return each cell one at a time and it's quite labor intensive,'' Hemburrow said in a telephone interview from the plant near Invercargill. ``It could be eight to ten weeks'' before full production is reached, he said.

The smelter, which uses almost 15 percent of New Zealand's power, cut production by 11 percent in May as the nation's hydroelectric reserves fell to half their seasonal average and prices soared. Storage, which refers to the amount of usable water in the system, was 4 percent below average yesterday.

Tiwai Point, 21 percent owned by Sumitomo Chemical Co., makes the world's purest aluminum and supplies metal for almost half the hard-drives and capacitors in the world's computers and LCD screens. It gets about 10 percent of its power at spot prices and has lost about 2,900 tons of output a month since May as energy costs surged.

Electricity cost an average NZ$27.64 ($19) a megawatt-hour nationwide yesterday, having reached a record NZ$392.72 June 1.

August Plan

Rio Tinto's plans to resume output in August were thwarted by a continued dry spell on South Island and transmission constraints that restricted power supplies from the North Island. The high- voltage cables liking the two islands will remain at half capacity until an upgrade is completed in 2012.

Government-owned generator Meridian Energy Ltd. supplies the smelter from its nearby 850-megawatt power station on the shores of Lake Manapouri.

The company plans to seek changes to its operating rules early next year that could boost the plant's output by 89 gigawatt-hours a year, enough to supply 11,000 homes, and 1.7 percent more than the plant produced in 2007.

Aluminum for delivery in three months on the London Metal Exchange gained $6 to $2,415 a ton in Asian trading today. The metal fell 0.5 percent yesterday its fourth straight decline.

To contact the reporter on this story: Gavin Evans in Wellington at gavinevans@bloomberg.net

BPA boss tells Intalco workers no guarantee of future cheap power

Bellingham Herald, WA -

JOHN STARK - THE BELLINGHAM HERALD

Although he made no promises, Bonneville Power Administration boss Steve Wright has told local aluminum workers there is still hope that Alcoa Intalco Works can get a new deal from his agency to ensure their jobs for many years ahead.

Wright, BPA's administrator since 2000, visited the big aluminum smelter west of Ferndale Tuesday, Sept. 30.

Alcoa is now trying to work out a power sales agreement with BPA that will be cheap enough to keep its 660 workers employed for the 20-year period beginning in 2011. Wright told an audience of about 200 workers that getting there won't be easy.

"No matter what agreement we come to with Alcoa, it won't be a guarantee that this plant will continue to operate," Wright said. "We want this plant to have a reasonable chance to survive, but candidly, it can't be too good a deal, it can't be too sweet a deal. ... I'm still optimistic we're going to find a way to get there. ... I need to say to you in all candor, I can't promise you that this will work out."

That's because the Northwest's public utility districts and municipal power systems would prefer that all of BPA's low-cost hydropower be reserved for them. Aluminum plants blossomed across the Northwest in the early years of the Columbia River hydroelectric system, when power was plentiful. But today, BPA no longer has enough hydropower to meet demand, and the public utility systems argue that federal law entitles them to get first shot at what is available.

Wright's visit was a reunion of sorts with workers who protested outside his office in 2001 when power market disruption forced a shutdown at Intalco for about a year. If there were any hard feelings left over from that episode, they were not in evidence.

"It isn't every day you have 400 people standing outside your window shouting your name," Wright said, holding up a souvenir protest T-shirt reading "Wright is wrong."

Tuesday's mood was different. Workers expressed gratitude to Wright for coming to the smelter to meet them and hear their concerns.

At one stop on Wright's plant tour, a group of workers in orange hardhats stood beside a stack of shiny aluminum cylinders and ingots as company planning and logistics supervisor Michelle Lehnert explained where Intalco's production goes: A plant in Portland, Ore,. manufactures window frames and other construction components, and another company in Spokane manufactures airplane components.

Wright told the workers that this kind of information will help him make a case for the region-wide benefits from aluminum production, beyond the payroll in Whatcom County.

Elsewhere in the region, many business leaders and public officials contend that they need all the cheap BPA power they can get to create more jobs in their own communities. As they see it, a cheap power supply to Intalco would come at their expense.

Under the terms of Alcoa's current deal with BPA, the company gets a cash subsidy instead of BPA power. Beginning in 2011, Alcoa hopes to get back on the BPA system. But the smelter's demand on that system would be substantial. Intalco now uses somewhere around 300 megawatts of power to operate at two-thirds capacity. By way of comparison, the entire city of Seattle uses about 1,200 megawatts.

Wright said BPA can guarantee a supply of about 7,500 megawatts of hydropower for the region, but that's not enough to meet demand. BPA meets that demand by buying far more costly power from other sources, and those purchases get factored into the price that BPA customers must pay.

"My job is to serve the 10 million people in the Northwest," Wright told workers. "It's important to understand that we do hear from other communities."

Wright makes the decisions on new power supply contracts for Intalco and other BPA customers, in consultation with his superiors at the U.S. Department of Energy. He said he expects to issue a draft contract proposal for Intalco some time in the weeks or month ahead, and then get public input before making that proposal final.

In an interview after his tour, Wright said he must divide up the BPA power supply in a way that is fair to all the competing interests in the region.

"We have to be able to make a credible case that the Northwest economy as a whole will be better off," Wright said.

Smelter workers tried to make that case to Wright, while also reminding him of the struggles their own families would face if the smelter is forced to shut down.

Barry Hullett, a plant operations manager, said Intalco gives back good value for the power it uses. Aluminum is a lightweight metal that saves fuel in cars and other vehicles, he noted.

"We do need a lot of power to make aluminum," Hullett said. "If we don't make it here, it's going to be made somewhere else."

T.J. Faulk told Wright he has been working at Intalco for six months, since his construction work dried up in the Seattle area amid the economic downturn.

"This is by far the best job I've ever had," Faulk said. "This is an important job to me and I want to hold onto it."

Another worker told Wright it was important for the U.S. to hold on to what's left of its manufacturing jobs.

"Everything's going to China," he said. "We can't all be longshoremen."

Further fall of aluminum price in China may trigger production cut

SteelGuru, India - October 03, 2008

It is reported that spot aluminum price in China is possibly to fall below the cost line of CNY 15,000 per tonne after the National Day holiday which may force domestic aluminum producers to cut production.

Aluminum futures price on the Shanghai Futures Exchange arrived at a peak of CNY 20,900 per tonne at the beginning of this year but has declined to CNY 15,500 per tonne this week, due mainly to oversupply.

China's crude aluminum output is estimated to reach 14.45 million to 14.9 million tonnes in 2008, compared with 14.32 million tonnes in 2007. Though the output increase is moderate, analysts estimate the nationwide inventory at over 500,000 tonnes.

Despite the price decline, downstream enterprises still have no will to make purchases as some aluminum makers, especially big ones, are still expanding their production capacities despite general oversupply.

Recently, Aluminum Corporation of China Limited said it had no plan to reduce production on large scale on the ground of market uncertainties.

Carbon permits the key in fulfilling Garnaut's projections

The Australian, Australia - October 03, 2008

CRITICS complain that Ross Garnaut's greenhouse gas cuts won't save the earth from overheating. Yet his Climate Change Review projects extraordinary adjustment for the Australian economy. This would transform Australia's energy base that, harnessed to the population's muscle and brains, generates our national prosperity.

In 2006, Australia emitted 576 million tonnes (Mt) of carbon dioxide equivalent greenhouse gases. This would rise to more than 1000Mt by 2050 with business as usual and would near 2000Mt by century's end.

Garnaut's report maintains that Australia can pull its weight in a global deal to reduce emissions by 80 to 90 per cent on 2000 levels by the middle of the century.

It would jack up electricity prices, bury coal-burning emissions underground, shut down most of our aluminium industry, take up renewable energy and perhaps nuclear power, convert our petrol-guzzling car fleet to electricity and anticipate technologies that suck carbon dioxide out of the air.

Per head of population, Australia emits 28 tonnes of greenhouse gases each year, more than any developed economy. Only five countries rank higher: Bahrain, Bolivia, Brunei, Kuwait and Qatar.

With strong economic growth, Australia's power emissions are still rising. We are meeting our Kyoto targets, but only by ending mass land clearing.

Our rich coal deposits provide a cheap power fuel and burning coal emits carbon dioxide. Australia's electricity supply is more emissions intensive than any other developed economy.

On latest figures, Australia's electricity is generated mainly from black coal (54 per cent) followed by brown coal (21 per cent), natural gas (15 per cent), oil (2 per cent) and renewables (8 per cent).

Breaking the link between economic growth and fossil-fuel emissions would be the job of a carbon emissions trading scheme, with a permit price initially set at a modest $20 a tonne. As the number of permits were reduced, their price would rise, prompting business and households to switch to lower emissions activities that previously lost out on cost grounds.

The graph's dark shaded section shows the projected fall in Australia's emissions as part of a global deal to stabilise atmospheric greenhouse gas concentrations at 550 parts a million. By mid-century, emissions fall 60 per cent below business as usual, shown by the top line. The shaded parts in between show electricity generation provides most (41 per cent) of this emission reduction.

But Australia's actual emissions are still around 400Mt by 2050. Although that's a big fall on business as usual, it is far short of an 80 per cent cut on 2000 levels.

But Australia still meets its 80 per cent "entitlement" cut by spending $24 billion or so (in today's dollars) on 300Mt of annual permits sold by other countries.

Such international permit trade occurs because carbon-heavy Australia finds it more expensive than other countries to cut emissions. But this trade mostly ends after the projected permit price rises above $250 a tonne by the last quarter of the century, making "backstop technologies" commercially viable. Biosequestration technology could grow algae to take carbon dioxide outof the air, converting it to stable carbohydrates.

When the backstop technologies kicked in, there would be no need to stop burning fossil fuels. By then, the economy would have been "decarbonised". To begin with, the rising price of carbon permits would push up electricity prices and curb growth in the demand for power. In the first decade, the big emissions reduction would come from curtailing and even shutting down some of our seven aluminium smelters: Bell Bay in Tasmania, Boyne Island in Queensland, Kurri Kurri and Tomago in NSW, and Port Henry and Portland in Victoria. Smelting alumina powder from bauxite into solid aluminium takes massive amounts of electricity. Australia's aluminium smelters expanded in a big way after the oil shocks of the 1970s, lured by our cheap (and sometimes subsidised) electricity. With the 21st-century greenhouse shock, aluminium will be produced where "stranded" hydro-power can't go to other purposes. And Tasmania's spare hydro can be pumped into the national power grid.

Our coal industry doesn't have to follow aluminium out the door, but only if carbon capture and storage technologies become cost effective at the rising carbon price.

If this happens, "dirty" coal-fired electricity generation would gradually contract over the next few decades as carbon emission prices rise. Clean coal, gas and renewable energy such as solar, wind and geothermal, would take over. From mid-century, electricity demand would rise as the vehicle fleet is converted to cleaner electricity. Two-thirds of Australia's electricity would be generated from renewables, clean coal and gas supplying the rest.

But if clean-coal technology doesn't come up to scratch, its place would be taken largely by nuclear power, using Australia's rich uranium deposits. Garnaut's key trick is to begin cautiously, allowing carbon pricing to take root, before letting market forces transform the economy's energy base.

Rio Tinto CEO Tom Albanese speaks at the Melbourne Mining Club

Business Spectator, Australia - Thursday 2 October 2008

Address by Tom Albanese, Chief Executive, Rio Tinto

Consolidation and Diversity – Resources in the 21st Century , Melbourne, Australia

http://www.businessspectator.com.au/bs.nsf/Article/Rio-Tinto-CEO-Tom-Albanese-speaks-at-the-Melbourne-K29KZ?OpenDocument

Century Aluminum Provides Update on Iceland Operations

International Business Times, NY - 06 October 2008

MONTEREY, CA -- (Marketwire) -- 10/06/08 -- Century Aluminum Company (NASDAQ: CENX)confirmed today that immediately available cash balances for its Icelandoperation are held with a AA rated European financial institution.Additional cash balances of $30 million, which by their terms becomeavailable this week, are held in U.S. dollars with Iceland banks and willbe guaranteed by the government of Iceland according to a notice releasedby the Icelandic government today. This amount constitutes all funds heldwith Icelandic banks other than amounts posted as collateral for Century'sIcelandic krona hedges.

Construction for the new smelter at Helguvik is continuing per the projectschedule and Century will continue to assess the situation in Iceland as itdevelops. "We continue to believe in the importance of the Helguvikproject for the Company, our shareowners and its benefit to the Icelandicpeople and economy" said Logan Kruger, Century's president and chiefexecutive officer. "We will monitor the situation closely."

DJ Chalco Cuts Alumina Price By 9.4% To CNY2,900/Ton

Trading Markets (press release), CA - Mon. October 06, 2008

LONDON, Oct 06, 2008 (Dow Jones Commodities News via Comtex)

Aluminum Corp. of China Ltd. (ACH), China's largest alumina producer by output, cut its spot price for alumina for the third time since June, by 9.4% as of Oct. 1.

Chalco said on its Web site that it lowered its spot alumina price to CNY2,900 a metric ton from CNY3,200/ton.

In August, Chalco cut its spot alumina price by 9% to CNY3,200/ton from CNY3,500/ton, citing weaker market demand. And in June the company cut the spot alumina price by 17% to CNY3,500/ton from CNY4,200/ton.

Chalco is owned by Aluminum Corp. of China, also known as Chinalco, which is the world's second biggest alumina producer and third largest aluminum company.

Alumina is a key raw material used in the production of aluminum.

Web site: http://www.chinalco.com/

-By Devon Maylie, Dow Jones Newswires; +44 (0)20 7842 9483; devon.maylie@dowjones.com

From: Willem

Sent: Tuesday, October 07, 2008 5:24 PM

Subject: Alunews 2008_10_07

Alcoa third-quarter net down; cutting back spending

ReportonBusiness.com, Canada - 07-Oct-2008

NEW YORK (Reuters) - Aluminum producer Alcoa Inc said it was halting major capital projects in the face of uncertain markets, after it posted a lower-than-expected quarterly profit on softer demand in key sectors like the aerospace and auto industries. Alcoa, among the first major U.S. companies to post third-quarter results as the credit crisis spreads, said the sharp decline in metal prices and falling demand are forcing it to stop "all non-critical capital projects" and make targeted reductions to match market conditions.

Bechtel wins Saudi smelter deal

SteelGuru, India - October 08, 2008

MEED reported that US based Bechtel has clinched a key aluminum smelter project in Saudi Arabia.

Meed without saying how it got the information reported that Betchel has been appointed as the engineering, procurement and construction management contractor for Al-Zabirah smelter project at Ras al Zour.

The smelter is being developed by Alumco a joint venture of Saudi Arabian Mining Company and the British Canadian company Rio Tinto Alcan.

Guinea power protest halts RUSAL bauxite trains

Reuters - 07-Oct-2008

By Saliou Samb

CONAKRY, Oct 7 (Reuters) - Guinean townsfolk demanding mains electricity have halted trains carrying bauxite from one of Russian aluminium maker RUSAL's operations since Monday, local people and a company official said on Tuesday.

Guinea is the world's top exporter of bauxite, the ore used to make aluminium, and RUSAL exports both the ore and refined alumina from the West African country, where most people live in poverty despite huge bauxite and iron ore reserves.

"No train has gone through since yesterday. The roads leading to the bauxite plant and the railway line for shipping out the ore are all blocked by various objects put there by angry locals," one witness told Reuters from the town of Mambia, half way between RUSAL's Kindia mine and the capital, Conakry.

A company spokeswoman at RUSAL's Moscow headquarters could not be reached for immediate comment.

Demonstrations over poor public services are common in Guinea, and protests over poor electricity services often target bauxite operations as these tend to generate power for surrounding towns under their agreements with the government.

RUSAL's Compagnie des Bauxites de Kindia (CBK) exports bauxite via rail through Mambia to Conakry's port. RUSAL exports alumina from its Fria plant to the north via a different route.

Guinea has around one third of the world's known bauxite reserves.

A RUSAL official in Guinea, who declined to be named, said residents of Mambia were angry at the poor public services like power and water despite a $200,000 annual payment made by RUSAL to fund improvements in local infrastructure and services.

"Mainly they are demanding electricity, but also water," the official said.

The witness in Mambia said that despite power pylons being set up, the town had never been connected to mains electricity.

A Mines Ministry official contacted by Reuters confirmed the disturbances at Mambia but gave no details.

Disruption to bauxite operations by popular protests appears to have become more common since a general strike early last year against the aging President Lansana Conte's authoritarian rule that halted bauxite shipments and alumina production.

At least 137 protesters were killed during the general strike, most of them shot dead by Conte's security forces.

Alcoa CEO sees positive long-term aluminum prospects

Reuters - Tue Oct 7, 2008

NEW YORK, Oct 7 (Reuters) - The head of aluminum producer Alcoa Inc (AA.N: Quote, Profile, Research, Stock Buzz) said on Tuesday that longer-term prospects for pricing and global demand are good despite measures to rein in capital expenses and review underperforming assets to combat softer demand and tighter margins.

"While we face volatile and uncertain markets today, longer- term trends will drive a rebound in global aluminum demand and the forward market reflects underlying optimism on medium-term aluminum pricing," said President and Chief Executive Officer Klaus Kleinfeld.

During a conference call with Wall Street analysts to discuss lower-than-expected third-quarter results, he said Alcoa sees Chinese aluminum demand growing by 15 percent this year, though that rate was down from its previous estimate of 22 percent.

"Brazil and Asia will continue to grow and we project 6 percent global growth, which is 2 percentage points below our previous estimate," he said.

Asked about the outlook for the global aluminum industry, Kleinfeld said: "The credit crunch has forced those seeking liquidity to sell metal."

Inventory levels were currently at around 29 days -- relatively low compared with the 49 days supply in 2003.

On the supply side, about one-third of capacity is "under water," he said, meaning that they were operating at a loss because of high raw material costs and low aluminum prices.

Alcoa, which has already curtailed production at its Rockdale, Texas aluminum smelter, would cut back on capital investments during the current volatile period of global financial turmoil, said Kleinfeld.

"Under the current environment we have curtailed production at Rockdale. Curtailing Rockdale was necessary," he said.

"In the longer term, expectations are positive. We share the view that the market prospects are good.

"We should continue to see quite a bit of demand. Our mid- to long-term prospects for alumina and aluminum are good," said Kleinfeld.

RUSAL says minerals output unaffected by Guinea protests

Reuters South Africa, South Africa - Wed 8 Oct 2008, 13:32 GMT

[-] Text [+] CONAKRY (Reuters) - Power protests in Guinea that halted trains carrying bauxite for Russian aluminium firm RUSAL have not affected its output, the company said on Wednesday.

RUSAL exports bauxite refined product alumina from Guinea, which holds one third of the world's reserves of the ore, as well as other minerals.

"The situation in Guinea does not affect the company's overall performance targets," RUSAL said in an emailed statement.

Most Guineans live in poverty despite the country's lucrative raw materials, and while resources firms are keen to launch operations there, analysts say political instability is a concern for investors.

Blockages placed on railway lines by townsfolk demanding mains electricity have stopped trains running since Monday and were still in place on Wednesday.

"We are working on solving the problem. A delegation is in place to negotiate with the demonstrators," said Ministry of Mines official Yamoussa Bangoura.

Demonstrations over poor public services are frequent in Guinea, and protests over poor electricity services often target bauxite operations as these tend to generate power for surrounding towns under agreements with the government.

"UC RUSAL and local authorities in Guinea together with the Ministry of Mines and Geology are taking all necessary measures to resolve the current situation and provide for the social stability in the region," RUSAL said.

RUSAL's Compagnie des Bauxites de Kindia (CBK) exports bauxite via rail through Mambia to Conakry's port. RUSAL exports alumina from its Fria plant to the north via a different route.

As well as RUSAL, U.S. aluminium company Alcoa and London-listed Rio Tinto dig bauxite in Guinea. Rio is also majority owner of Simandou, which it says is the richest unexploited iron ore deposit in the world.

Alumina falls in a heap at the foot of its partner

Sydney Morning Herald, Australia - October 9, 2008

Jamie Freed

ALUMINA LTD's share price fell to a 10-year low yesterday after its joint-venture partner, Alcoa, published third-quarter earning results that were far short of market expectations.

Alcoa earned $US268 million ($372 million) in the third quarter, compared to consensus forecasts of $US400 million-plus.

Citing a downturn in the global aluminium market, Alcoa halted a share buyback program and cut off spending on all but its most critical projects.

Alcoa's chief financial officer, Chuck McLane, said a $US700-a-tonne drop in the aluminium price over the third quarter was the largest-ever quarterly price decline. The full effects of lower prices will not be known until the present quarter because of a delivery lag.

At the same time, the prices of inputs like caustic soda and coke continued to rise, squeezing margins in the aluminium division. And Alcoa was forced to halve the mark-to-market value of its $US1.2 billion investment in Rio Tinto in concert with China's Chinalco as Rio's share price fell.

But the margins in Alcoa's alumina division - the proxy for Alumina's earnings - improved by 8.8 per cent compared with the second quarter as the US dollar increased in value.

Based on Alcoa's results, Alumina's earnings in the third quarter amounted to about $US84 million.

A Macquarie Equities analyst, Brendan Harris, said the alumina division result was "robust" but the overall negative sentiment associated with Alcoa's results led to a massive sell-off in Alumina's shares. Alumina closed 47c lower at $2.50.

Alcoa indicated the planned expansion of the Wagerup refinery in Western Australia could be delayed if difficult economic conditions persisted. But despite capital spending cutbacks, the Alcoa World Alumina and Chemicals joint venture will continue construction of its bauxite mine and refinery project in Brazil.

Alumina's chief executive, John Bevan, said AWAC would keep spending money on studies of the Wagerup expansion and a project in Suriname despite Alcoa's project spending cuts.

Alcoa's chief executive, Klaus Kleinfeld, said it had lowered its expectations of aluminium demand growth this year to 6 per cent from 8 per cent because of the global economic downturn. But he said the long-term outlook for aluminium was positive, with the forward curve higher than the present price of $US2290 a tonne.

Alcoa's shares have lost two-thirds of their value since May, meaning the company has a market value of just $US13.5 billion. That compares unfavourably to Rio's $US38.7 billion acquisition of its Canadian rival, Alcan, last year.

Following the Alcan acquisition, Rio has better-quality smelters than Alcoa, but its alumina refineries are more expensive to operate than those of its US rival.

Rio has yet to divest Alcan's packaging and engineered products division, which could be tough in light of tight credit markets and falling demand for aluminium in Europe and North America.

Alcoa Signs Power Contract With Bonneville Power Administration

RedOrbit, TX - Monday, 13 October 2008

Alcoa has signed a memorandum of understanding with Bonneville Power Administration for a power contract to supply its Alcoa Intalco Works aluminum smelter through 2028.

The memorandum of understanding (MoU) provides the framework for a contract which would begin in October 2011. It would provide up to 240MW of direct power sales, enough to operate the facility at 50% capacity, contingent upon Bonneville Power Administration (BPA) acquiring additional power to augment the NW power system, within certain threshold price levels.

Under the terms of the contract, Alcoa would commit to minimum payroll levels, based on the amount of power supplied. In addition, assuming at least 10 years of power can be assured prior to the contract start, Alcoa would commit to spending between $125 million and $160 million by 2028.

John Thuestad, president of Alcoa's US primary products, said: "Alcoa Intalco Works has been a part of the Northwest community for more than 40 years. With the passion of our employees and support of the local community we have survived difficult periods including the NW power crisis of 2001.

"While there is still much work to do, I am confident we will bring this negotiation to a successful conclusion in an effort to increase the competitiveness of the plant and continue to provide family wage jobs and value to the region. There are opportunities to improve the overall environmental performance of this plant as well as improve its productivity. We realistically cannot do that without some certainty on a long-term power solution. This MoU helps create the frame008work to eliminate that barrier."

Chinalco suspends up to 120,000 tons of aluminum smelting capacity - insider

Interfax China, China - October 13, 2008

Shanghai.INTERFAX-CHINA - The Aluminum Corporation of China Group (Chinalco), China's largest aluminum and alumina producer, has suspended up to 120,000 tons of aluminum smelting capacity due to weak demand and plunging aluminum prices, an industry insider told Interfax on Oct. 13.

This article is only accessible to Interfax subscribers. To gain access to this article, as well similar in-depth articles and industry-specific content, please contact our sales staff by telephone (+852 2537 2262)

Violence Hits Protest at Bauxite Mine

The Moscow Times, Russia - 13 October 2008

Guinean security forces shot two people dead during protests at a bauxite mine owned by United Company RusAl, the BBC reported, citing unidentified witnesses.

The protesters accused RusAl of not honoring an agreement to provide electricity and water to the community and protect residents from environmental hazards, the report said. An unspecified number of people were injured.

The demonstrators attacked company property and blocked railway lines used to transport bauxite for export to the port in the capital, Conakry.

Guinea has one-third of the world's reserves of bauxite, an ore used to make aluminum.

On Wednesday, a leader of the protesters said RusAl's mine had been shut down for two days because of the demonstrations. RusAl said it was working with the government to resolve the situation.

RUSAL's Guinea bauxite trains restart work

Reuters South Africa, South Africa - Oct 11, 2008

Trains carrying bauxite across Guinea for Russian aluminium firm RUSAL have started moving again after a five-day protest blocked the railway line, sources said on Saturday.

At least one person was killed and others injured when armed police cleared demonstrators in the town of Mambia, who were demanding electricity and water, from the line on Thursday.

"We have had two trains today (Saturday)," said a source within RUSAL who did not want to be named. "The first arrived at midnight and the second this morning.

Another source working at the port of Conakry, capital of the world's biggest bauxite producer, said the trains had arrived. Officials at RUSAL's headquarters in Moscow could not immediately be reached for comment.

RUSAL's Compagnie des Bauxites de Kindia (CBK) exports aluminium ore bauxite via rail through Mambia to Conakry's port. RUSAL exports refined product alumina from its Fria plant to the north via a different route.

Despite Guinea's lucrative mineral deposits, most Guineans live in extreme poverty and protests against poor public services are common.

RUSAL said on Wednesday, two days after the trains were halted, that the disruption "does not affect the company's overall performance targets".

© Reuters 2008. All Rights Reserved.

Chinese mining company hopes to construct US$1b aluminum plant in Guyana

Caribbean Net News, Cayman Islands - Oct 9, 2008

By Kevin Lindon, Caribbean Net News Guyana Correspondent Email: kevin@caribbeannetnews.com

GEORGETOWN, Guyana: Guyana’s president Bharrat Jagdeo during a recent visit to China met with a number of current and future investors in Guyana.

The Guyanese leader has announced that he held discussions with the head of Bosai Minerals Group head, while in that country on future investment and expansion plans.

According to Jagdeo, the mining company is hoping to construct a US$1 billion aluminum plant in Guyana shortly.

Jagdeo told reporters that already he had spoken to some of the banks in that country who have committed to fund the project.

Bosai Minerals is currently one of the largest bauxite companies in Guyana.

The president meanwhile, says members of China’s Import and Export Bank (EXIM Bank) have also committed to fund feasible investments in the South American country by Chinese who are willing to invest.

Jagdeo on a one week visit to China inked a US$40 million deal with the EXIM bank for the construction of a transmission main for the Guyana Power and Light Company.

During the same visit the Guyanese leader participated in the global economic forum organized by the Chinese government and hinted that he secured a number of new potential investments for Guyana.

Alcoa Signs Power Contract With Bonneville Power Administration

RedOrbit, TX - Monday, 13 October 2008

Alcoa has signed a memorandum of understanding with Bonneville Power Administration for a power contract to supply its Alcoa Intalco Works aluminum smelter through 2028.

The memorandum of understanding (MoU) provides the framework for a contract which would begin in October 2011. It would provide up to 240MW of direct power sales, enough to operate the facility at 50% capacity, contingent upon Bonneville Power Administration (BPA) acquiring additional power to augment the NW power system, within certain threshold price levels.

Under the terms of the contract, Alcoa would commit to minimum payroll levels, based on the amount of power supplied. In addition, assuming at least 10 years of power can be assured prior to the contract start, Alcoa would commit to spending between $125 million and $160 million by 2028.

John Thuestad, president of Alcoa's US primary products, said: "Alcoa Intalco Works has been a part of the Northwest community for more than 40 years. With the passion of our employees and support of the local community we have survived difficult periods including the NW power crisis of 2001.

"While there is still much work to do, I am confident we will bring this negotiation to a successful conclusion in an effort to increase the competitiveness of the plant and continue to provide family wage jobs and value to the region. There are opportunities to improve the overall environmental performance of this plant as well as improve its productivity. We realistically cannot do that without some certainty on a long-term power solution. This MoU helps create the frame008work to eliminate that barrier."

Chinalco suspends up to 120,000 tons of aluminum smelting capacity - insider

Interfax China, China - October 13, 2008

Shanghai.INTERFAX-CHINA - The Aluminum Corporation of China Group (Chinalco), China's largest aluminum and alumina producer, has suspended up to 120,000 tons of aluminum smelting capacity due to weak demand and plunging aluminum prices, an industry insider told Interfax on Oct. 13.

This article is only accessible to Interfax subscribers. To gain access to this article, as well similar in-depth articles and industry-specific content, please contact our sales staff by telephone (+852 2537 2262)

Violence Hits Protest at Bauxite Mine

The Moscow Times, Russia - 13 October 2008

Guinean security forces shot two people dead during protests at a bauxite mine owned by United Company RusAl, the BBC reported, citing unidentified witnesses.

The protesters accused RusAl of not honoring an agreement to provide electricity and water to the community and protect residents from environmental hazards, the report said. An unspecified number of people were injured.

The demonstrators attacked company property and blocked railway lines used to transport bauxite for export to the port in the capital, Conakry.

Guinea has one-third of the world's reserves of bauxite, an ore used to make aluminum.

On Wednesday, a leader of the protesters said RusAl's mine had been shut down for two days because of the demonstrations. RusAl said it was working with the government to resolve the situation.

RUSAL's Guinea bauxite trains restart work

Reuters South Africa, South Africa - Oct 11, 2008

Trains carrying bauxite across Guinea for Russian aluminium firm RUSAL have started moving again after a five-day protest blocked the railway line, sources said on Saturday.

At least one person was killed and others injured when armed police cleared demonstrators in the town of Mambia, who were demanding electricity and water, from the line on Thursday.

"We have had two trains today (Saturday)," said a source within RUSAL who did not want to be named. "The first arrived at midnight and the second this morning.

Another source working at the port of Conakry, capital of the world's biggest bauxite producer, said the trains had arrived. Officials at RUSAL's headquarters in Moscow could not immediately be reached for comment.

RUSAL's Compagnie des Bauxites de Kindia (CBK) exports aluminium ore bauxite via rail through Mambia to Conakry's port. RUSAL exports refined product alumina from its Fria plant to the north via a different route.

Despite Guinea's lucrative mineral deposits, most Guineans live in extreme poverty and protests against poor public services are common.

RUSAL said on Wednesday, two days after the trains were halted, that the disruption "does not affect the company's overall performance targets".

© Reuters 2008. All Rights Reserved.

Chinese mining company hopes to construct US$1b aluminum plant in Guyana

Caribbean Net News, Cayman Islands - Oct 9, 2008

By Kevin Lindon, Caribbean Net News Guyana Correspondent Email: kevin@caribbeannetnews.com

GEORGETOWN, Guyana: Guyana’s president Bharrat Jagdeo during a recent visit to China met with a number of current and future investors in Guyana.

The Guyanese leader has announced that he held discussions with the head of Bosai Minerals Group head, while in that country on future investment and expansion plans.

According to Jagdeo, the mining company is hoping to construct a US$1 billion aluminum plant in Guyana shortly.

Jagdeo told reporters that already he had spoken to some of the banks in that country who have committed to fund the project.

Bosai Minerals is currently one of the largest bauxite companies in Guyana.

The president meanwhile, says members of China’s Import and Export Bank (EXIM Bank) have also committed to fund feasible investments in the South American country by Chinese who are willing to invest.

Jagdeo on a one week visit to China inked a US$40 million deal with the EXIM bank for the construction of a transmission main for the Guyana Power and Light Company.

During the same visit the Guyanese leader participated in the global economic forum organized by the Chinese government and hinted that he secured a number of new potential investments for Guyana.

Alcoa Signs Power Contract With Bonneville Power Administration

RedOrbit, TX - Monday, 13 October 2008

Alcoa has signed a memorandum of understanding with Bonneville Power Administration for a power contract to supply its Alcoa Intalco Works aluminum smelter through 2028.

The memorandum of understanding (MoU) provides the framework for a contract which would begin in October 2011. It would provide up to 240MW of direct power sales, enough to operate the facility at 50% capacity, contingent upon Bonneville Power Administration (BPA) acquiring additional power to augment the NW power system, within certain threshold price levels.

Under the terms of the contract, Alcoa would commit to minimum payroll levels, based on the amount of power supplied. In addition, assuming at least 10 years of power can be assured prior to the contract start, Alcoa would commit to spending between $125 million and $160 million by 2028.

John Thuestad, president of Alcoa's US primary products, said: "Alcoa Intalco Works has been a part of the Northwest community for more than 40 years. With the passion of our employees and support of the local community we have survived difficult periods including the NW power crisis of 2001.

"While there is still much work to do, I am confident we will bring this negotiation to a successful conclusion in an effort to increase the competitiveness of the plant and continue to provide family wage jobs and value to the region. There are opportunities to improve the overall environmental performance of this plant as well as improve its productivity. We realistically cannot do that without some certainty on a long-term power solution. This MoU helps create the frame008work to eliminate that barrier."

Chinalco suspends up to 120,000 tons of aluminum smelting capacity - insider

Interfax China, China - October 13, 2008

Shanghai.INTERFAX-CHINA - The Aluminum Corporation of China Group (Chinalco), China's largest aluminum and alumina producer, has suspended up to 120,000 tons of aluminum smelting capacity due to weak demand and plunging aluminum prices, an industry insider told Interfax on Oct. 13.

This article is only accessible to Interfax subscribers. To gain access to this article, as well similar in-depth articles and industry-specific content, please contact our sales staff by telephone (+852 2537 2262)

Violence Hits Protest at Bauxite Mine

The Moscow Times, Russia - 13 October 2008

Guinean security forces shot two people dead during protests at a bauxite mine owned by United Company RusAl, the BBC reported, citing unidentified witnesses.

The protesters accused RusAl of not honoring an agreement to provide electricity and water to the community and protect residents from environmental hazards, the report said. An unspecified number of people were injured.

The demonstrators attacked company property and blocked railway lines used to transport bauxite for export to the port in the capital, Conakry.

Guinea has one-third of the world's reserves of bauxite, an ore used to make aluminum.

On Wednesday, a leader of the protesters said RusAl's mine had been shut down for two days because of the demonstrations. RusAl said it was working with the government to resolve the situation.

RUSAL's Guinea bauxite trains restart work

Reuters South Africa, South Africa - Oct 11, 2008

Trains carrying bauxite across Guinea for Russian aluminium firm RUSAL have started moving again after a five-day protest blocked the railway line, sources said on Saturday.

At least one person was killed and others injured when armed police cleared demonstrators in the town of Mambia, who were demanding electricity and water, from the line on Thursday.

"We have had two trains today (Saturday)," said a source within RUSAL who did not want to be named. "The first arrived at midnight and the second this morning.

Another source working at the port of Conakry, capital of the world's biggest bauxite producer, said the trains had arrived. Officials at RUSAL's headquarters in Moscow could not immediately be reached for comment.

RUSAL's Compagnie des Bauxites de Kindia (CBK) exports aluminium ore bauxite via rail through Mambia to Conakry's port. RUSAL exports refined product alumina from its Fria plant to the north via a different route.

Despite Guinea's lucrative mineral deposits, most Guineans live in extreme poverty and protests against poor public services are common.

RUSAL said on Wednesday, two days after the trains were halted, that the disruption "does not affect the company's overall performance targets".

© Reuters 2008. All Rights Reserved.

Chinese mining company hopes to construct US$1b aluminum plant in Guyana

Caribbean Net News, Cayman Islands - Oct 9, 2008

By Kevin Lindon, Caribbean Net News Guyana Correspondent Email: kevin@caribbeannetnews.com

GEORGETOWN, Guyana: Guyana’s president Bharrat Jagdeo during a recent visit to China met with a number of current and future investors in Guyana.

The Guyanese leader has announced that he held discussions with the head of Bosai Minerals Group head, while in that country on future investment and expansion plans.

According to Jagdeo, the mining company is hoping to construct a US$1 billion aluminum plant in Guyana shortly.

Jagdeo told reporters that already he had spoken to some of the banks in that country who have committed to fund the project.

Bosai Minerals is currently one of the largest bauxite companies in Guyana.

The president meanwhile, says members of China’s Import and Export Bank (EXIM Bank) have also committed to fund feasible investments in the South American country by Chinese who are willing to invest.

Jagdeo on a one week visit to China inked a US$40 million deal with the EXIM bank for the construction of a transmission main for the Guyana Power and Light Company.

During the same visit the Guyanese leader participated in the global economic forum organized by the Chinese government and hinted that he secured a number of new potential investments for Guyana.

Alcoa Fully Expects Shining Prospect Shares in Rio Tinto plc to be Moved Smoothly

MarketWatch - Oct. 17, 2008

Working With Chinalco,Administrators To Ensure Orderly Process.

PITTSBURGH, Oct 17, 2008 (BUSINESS WIRE)

Alcoa said today it expects its joint shareholding in Rio Tinto to be transferred promptly and smoothly from a custodial account with Lehman Brothers International Europe in London to a custodial account with another nominee unaffiliated with Lehman Brothers. Alcoa said it is working closely with administrators of Lehman Brothers International Europe and with Chinalco, its close and long-term business partner, to achieve the transfer. Alcoa and Chinalco hold the shares jointly through a special purpose vehicle named "Shining Prospect," which is the custodial account holder.

Shining Prospect holds the Rio Tinto shares in a separate designated custodial account pursuant to a custody agreement with Lehman Brothers International Europe. No one disputes that Chinalco and Alcoa are the owners of the shares. These shares are held in custody -- they are not assets of Lehman Brothers International Europe or any other Lehman affiliate -- and are therefore not subject to the claims of Lehman's general creditors.

Alcoa's strong partnership with Chinalco dates back to 2001. The two companies have worked closely together on growth initiatives in the aluminum industry, environmental and safety best-practice sharing, cultural exchanges in Asia and the U.S. and this recent investment in Rio Tinto plc.

Alcoa hurting as global prices dip

Melbourne Herald Sun, Australia - October 18, 2008

US aluminum giant Alcoa is reviewing capital spending at its Australian operations as turmoil in global financial markets curbs demand for the metal.

"Alcoa of Australia is responding to the current financial market upheaval by ongoing focus on our efficiencies and operational costs, reviewing capital expenditure," said company spokeswoman Michaela Southby yesterday.

"We know how to be competitive in a lower-metal-price environment."

Chief executive officer Klaus Kleinfeld said slowing demand, slumping prices and a global credit crisis had forced Alcoa's hand.

It is reducing manufacturing, halting all non-critical projects and closing unprofitable units and shuttering production.

Rio Tinto Group and Freeport-McMoran Copper & Gold have said they might delay or defer some projects because of market turmoil.

Alcoa, which exported about $4.2 billion of products from Australia last year, is studying an expansion of the Wagerup alumina refinery in Western Australia. That project is estimated to cost $5.60 billion by JPMorgan Chase & Co.

The Wagerup expansion will be assessed as part of the review process, Ms Southby said.

The review will likely be completed within weeks, she said.

"This is not decision that we have to take at this point in time," Mr Kleinfeld said, referring to a final development decision on Wagerup.

He told analysts on October 7: "If we were to take it at this point in time, we would not do it."

New York-based Alcoa has slumped 66 per cent this half and closed at $12.21 yesterday.

Moody's Investors Service cut its outlook on Alcoa of Australia to "negative" from "stable" on October 14 citing weakening demand, high operating costs and the outlook for lower aluminum prices.

Alcoa employs about 6280 staff and 1500 contractors at its Australian operations and has been operating in the country since 1961.

The company produces about 8.5 million metric tons of alumina in Australia, or 13 per cent of world demand. It produces 31 million tons of bauxite and 530,368 tons of aluminum.

The Alcoa World Alumina & Chemical venture, 60 per cent owned by Alcoa and 40 per cent controlled by Alumina Ltd., produces one quarter of the world's alumina.

Shrinking BHP bid still fits a shrinking Rio

The Age, Australia - October 18, 2008

Barry FitzGerald

BHP Billiton's hostile scrip bid for Rio Tinto has become the incredibly shrinking bid in value terms. Since the bid was announced in February, it has plunged from $150 billion to $94 billion in value.

This week's savaging of BHP's share price — and Rio's — has taken the value of the conditional bid to below $100 billion for the first time.

Not that the plunge puts BHP out of the race. Because of BHP's less-severe share-price fall since February, Rio is now trading at a hefty discount to the implied value of the BHP offer.

That discount reflects ongoing concerns that BHP's offer might yet be tripped up by the European Commission, which has to make a decision on giving the offer antitrust clearance by January 15.

And if the EU were to attach conditions to its clearance that BHP did not like, BHP could exercise its right not to proceed. BHP shares slid $1.21, or 4.69%, to $24.59 while Rio closed $3.39, or 5.13%, lower at $62.62 (2.54 BHP shares).

Meanwhile, state-owned Chinalco did its best to dispel suggestions that it no longer had control over the 9% stake in Rio that it owns with Alcoa and that is held in an account with collapsed investment bank Lehman Brothers.

Chinalco said the shares were held in a "separate designated account pursuant to a custody arrangement with Lehman Brothers".

It said there was no basis on which its ownership of the shares could be validly challenged or on which its shares could form part of the general assets of Lehman, now in the hands of administrators. Chinalco is "discussing" with the administrators for the "orderly" transfer of the shares out of Lehman accounts.

The reporter owns BHP shares.

Rio May Delay $10 Billion Asset Sale on Market Crisis

Your Mining News (press release), UK - Friday, Oct 17, 2008

Rio Tinto Group, battling a $86 billion takeover bid from BHP Billiton Ltd., may delay the planned sale this year of $10 billion of assets because of the global financial crisis.

The company is also reviewing its near-term spending timetable and project costs against the backdrop of the current markets, according to a statement from London-based Rio today. It wants to sell the assets to help pay for its $38.1 billion purchase last year of aluminum producer, Alcan Inc.

The worst financial crisis since the Great Depression is freezing credit and threatening to tip the global economy into recession, curbing demand for metals. Freeport-McMoRan Copper & Gold Inc., the world's largest publicly traded copper producer, said yesterday it may defer projects to save cash.

Acquirers will find it harder to source funds and even if they can source funds, they'll have to pay more, said Steve Robinson, a senior investment manager with Alleron Investment Management in Sydney, which manages A$1.2 billion ($839 million). Given what's happened with commodity markets, they may not find buyers prepared to pay a premium.

Source: Bloomberg

Alcoa officials discuss economic impact of smelter shutdown

Cameron Herald, United States - 16-oct-2008

By Raymond Jordan, staff writer

Alcoa will provide qualified hourly and salaried employees with medical benefits and severance pay after its Rockdale aluminum smelter is shut down early next year, plant manager Royce Hawes told a community advisory panel Tuesday.

Severance packages will be provided for workers who have been with the company for more than two years and the packages will differ slightly depending on how long that person has worked there, Hawes said.

For more than an hour during an open meeting at the Alcoa Training Center Tuesday night, Hawes fielded questions posed by members of the Community Advisory Panel to Alcoa Rockdale Operations (CAPARO), ranging from severance packages, impact on the surrounding communities and plans for the future.

According to figures from Alcoa, more than 1,160 day-to-day employees and contractors from 60 surrounding communities will be affected by the smelter shutdown.

Milam County will be hit the hardest as 550 workers will be laid off by February, followed by Williamson County with 90, Lee County with 77, Robertson County with 61, Burleson County with 49, Brazos County with 40 and Bell County with 30 workers.

Specifically, Rockdale will lose 364 jobs, Cameron 77, Taylor 71, Thorndale 54, Lexington 51, Hearne 50, Caldwell 44, Bryan College Station 40 and Milano 36.

Hawes said the plant will continue running its atomizer and carbon plant "as long as we can make a profit," adding that he hopes to keep about 140 employees.

"I hope to keep those 140 for a long time," he said.

Those workers would run the remaining operations at the plant and maintain the potlines in the event of a future restart.

"I do believe we’ll be in a position to restart," Hawes said. "I have not yet thrown in the towel. We’re not ready to turn this plant in for salvage."

Hawes went on to say if Alcoa ever was thinking about starting one of its plants back up, they would be in a better position if the potlines were ready to go.

"We will know the final future in probably three years," Hawes said.

Alcoa cited ongoing power supply issues as the main reason for shutting down the smelting operations in Rockdale. The company also cited bad overall economic conditions, Alcoa spokesman Kevin Lowery said.

Certain conditions would have to be met before the plant could be restarted, Hawes said.

First, there would need to be a long-term agreement for power. Also, the price of metal, which has fallen steadily world wide in recent months, would have to go up, he said.

RusAl Sees End to Profitability

The Moscow Times, Russia - 17 October 2008

United Company RusAl said Thursday that 75 percent of aluminum producers in China, Europe and the United States were unprofitable after the price of the metal fell on slowing demand.

The proportion of unprofitable producers will "inevitably lead to fundamental changes in the global aluminum industry," chief executive Alexander Bulygin said in a statement.

Aluminum has fallen 36 percent since July on concern that a global economic slowdown will cut demand. RusAl pays less for electricity than some of its rivals because the company has its own supplies of hydropower. Energy accounts for about 40 percent of the cost of aluminum smelting.

Rival companies will be forced to cut output and expansion plans, Bulygin said. Rio Tinto Group, the world's second-biggest producer after RusAl, said Wednesday that it idled some sections of its highest-cost plants.

RusAl will "take advantage of this challenging time," Bulygin said. "In this environment, even if the global economy falls into the recession during the coming year and in the worst-case scenario, the demand for aluminum drops by 10 percent, supply will still be far behind demand in the medium term," he said. That will secure "sustainable growth" for the aluminum price, Bulygin added.

RusAl, controlled by Oleg Deripaska, said Tuesday that it applied to Vneshekonombank for a loan to refinance credits from foreign banks used to build and modernize plants.

Chalco Plans to Operate Low-cost Aluminum Smelters

TradingMarkets October 16, 2008

BEIJING, Oct 16, 2008 (SinoCast via COMTEX) -- ACH | Quote | Chart | News | PowerRating -- Aluminum Corporation of China Ltd. (SHSE: 601600; SEHK: 2600; Chalco) plans to reduce production of those high-cost aluminum smelting devices and raise production of those low-cost devices, in a bid to cut production cost, said its board secretary Liu Qiang yesterday.

The company is now discussing the plan but has not clinched details and when to start the plans, said Mr. Liu. Zhang Qing, another Chalco executive, said that the plan would not impact the company's total output.

Currently, aluminum producers would lose around CNY 2,000-3,000 in producing every ton of aluminum, as they spend about CNY 17,000 producing a ton of aluminum but sell the products at about CNY 14,000 each ton, said industry analysts.

Chalco warned last week that its net profits for July-September 2008 would slump 50%-plus from a year ago, due to hiking raw material and fuel cost and slumping production prices.

Besides, Chalco said that it was enhancing construction of its own mines to lower production cost.

From www.nbd.com.cn, Page 1, Wednesday, October 15, 2008 info@SinoCast.Com

Rio Tinto Alcan plans minor smelter cutbacks

Reuters - Oct 15, 2008

LONDON (Reuters) - Aluminum producer Rio Tinto Alcan (RIO.L: Quote, Profile, Research, Stock Buzz) (RIO.AX: Quote, Profile, Research, Stock Buzz) plans minor production cutbacks at two or three higher-cost smelters due to weak prices and is hunting for takeovers of firms hit by market turmoil, its CEO said.

"In a couple of cases we are reducing the number of pots operating without shutting down potlines," Chief Executive Dick Evans told Reuters in an interview on Wednesday.

"If prices fall further, then we might accelerate that."

About 80 percent of Alcan's production is in the lowest half of the cost curve and production at all smelters is cash flow positive at an Aluminum price of $2,300 per tonne.

The London Metal Exchange benchmark price was around $2,250 on Wednesday morning.

While Alcan trims some higher cost output, it was also increasing some production at lower cost smelters, including ramping up a new operation in Oman and resuming some output in New Zealand that had to be reduced due to low water levels.

Evans said Alcan, one of the world's two biggest producers along with Russia's UC Rusal, was expected to see flat to slightly higher overall production in 2009.

Much of output in China is burdened by some of the world's highest costs and producers there are moving to cut output, which would help stabilize prices, Evans added.

"More likely than not, (the) Aluminum (price) has bottomed, just because of looking at the cash costs of the cost curve and apparently fairly significant quantities of capacity are coming out of China."

Evans said he had heard 1 million tonnes of production were being shut down in China, about 7 percent of the nation's total, but this could double if prices remained weak.

HUNT FOR TAKEOVERS

Canadian-based Alcan is also planning to defer some growth projects and look for acquisition opportunities thrown up by the current market turmoil, Evans said.

Alcan had previously released a growth plan of new projects to boost output to around 7 million tonnes per year from current levels of around 4 million.

"With the significant downturn in prices, even more importantly in asset values, I think we will try to keep some of our powder dry to potentially make acquisitions," he said.

"We might choose to defer some of our organic growth projects to have flexibility to make some acquisitions, as Alcan did in the last downturn."

All of the group's planned growth projects are attractive low-cost operations and would likely go ahead after some possible delays. By waiting, the group might enjoy lower capital costs as prices of steel and other commodities fall.

In looking for takeovers, the group could target low-cost operations where joint venture owners might want to sell off stakes to realize cash, he said.

This is the strategy Alcan used during the last downturn, when it bought 40 percent of the Alouette smelter in Canada from the Quebec government and steelmaker Corus and then doubled production there, Evans said.

He said Alcan was slightly ahead of schedule in making a planned $1.1 billion in after-tax cost savings by end 2009 following Rio's purchase of the firm for $38.1 billion last year.

The company was only making short-term purchases of items that had seen sharp price rises during the commodities boom, such as pitch, coke and caustic soda, since those prices were expected to fall in the current environment.

(Editing by David Cowell)

UPDATE: Rio Tinto Alcan: May Make Sense To Buy, Not Build Operations

EasyBourse.com, France - Oct 15, 2008

LONDON -(Dow Jones)- The acquisition of aluminum assets or companies struggling under the weight of the downturn in the global economy and falling metals prices may make sense for Rio Tinto Alcan (RTP) going forward, its chief executive said Wednesday.

"It may make sense for us to buy rather than build (aluminum operations)," Dick Evans told Dow Jones Newswires. The company did this in the last economic downturn, building a stake in Canada's Alouette smelter in two different tranches, he noted.

But Evans said the company would only look at high quality assets owned by stressed sellers, and wouldn't look to buy low quality, high cost operations.

"We operate virtually at capacity, and this won't change unless we suddenly see a massive reduction in aluminum consumption," Evans added.

Rio Tinto Alcan operates around 80% of its smelters within the bottom half of the cost curve, with just 5-6% being in the upper part of the curve. "Today, none of our smelters are cash flow negative," he added. In contrast, around 50% of China's smelters are cash flow negative, he noted.

Evans said while the company is reviewing production at its higher cost assets, it hadn't identified which might see some output shuttered during the current global downturn. "Normally with smelting, producers don't react instantly - they play chicken a little bit and wait to see if their neighbor cuts output first, which might boost prices and prevent them from having to make their own cuts," Evans said.

But that only works if companies have deep pockets, he said, with China already having announced more than 1 million metric tons of cutbacks and more likely in the fourth quarter.

Aluminum prices have fallen a massive 94% since their peak in July at $3,380 a ton, and recently hit a 34-month low of $2,150/ton.

This represents an "overcorrection" of prices, Evans said, just as was seen first in the equity markets.

"Just a month ago, few had any inclination of the state of the credit markets, and we've since seen a massive dumping of positions on the market which has accentuated the impact of the economic downturn," he said, noting the liquidation of Lehman Brothers' aluminum positions as an example. "We didn't see what would instead have been an erosion of prices - there was an instantaneous collapse," he said.

Evans said it's not clear whether the market has yet found its bottom.

Global inventories had started to rise prior to the economic meltdown, he said, although were still relatively low at around 6 weeks' consumption.

"Demand has been falling, inventories are up, and the market looked forward 12 or 24 months, saw a supply-demand surplus and discounted this back into the current environment," he said.

Company Web site: http://www.riotinto.com

-By Andrea Hotter, Dow Jones Newswires;

Aluar to invest roughly US$500mn in final stage of expansion - Argentina

Business News Americas, Chile - Oct 14, 2008

By Harvey Beltrán,

Argentine aluminum producer Aluar (Buenos Aires: ALUA) will invest nearly US$500mn in the final stage of the expansion at its Puerto Madryn plant, where the company plans to add 96 electrolytic cells, a company executive confirmed for BNamericas.

Aluar is also in the process of investing US$315mn in another stage of the expansion where it will add 72 more cells, the executive said.

Works are aimed at pushing up the plant's aluminum capacity by close to 105,000t/y, to be tagged for the domestic market, Aluar recently told the Buenos Aires stock exchange in a statement.

In June, Aluar fired up 24 new electrolytic cells to complement the first stage of the company's expansion project, which helped boost production capacity by roughly 137,500t, taking output from 272,500t/y to 410,000t/y.

The latest expansion will take the company's total capacity to 515,000t/y.

Aluar, Argentina's only aluminum producer, exports some 85% of its production, mainly to the US, Europe and Asia, and is controlled by the Madanes Quintanilla family.

Russian giant Basic Element to review strategy

The Standard, Hong Kong - Monday, October 20, 2008

Basic Element, the Russian conglomerate owned by billionaire Oleg Deripaska, may shelve plans to list overseas if the financial tsunami continues to worsen.

It has also stopped any major expansion overseas as "the collecting of assets is over," according to CEO Gulzhan Moldazhanova.

The Russian giant has unloaded a US$1.5 billion (HK$11.7 billion) stake in Canada auto-parts maker Magna and 9.99 percent of German constructor Hochtief after less than one year, but Moldazhanova said there would be no further disposals.

Basic Element, which has more than 100 companies, reportedly wants to list overseas its subsidiaries - including a 52 percent stake in aluminum subsidiary UC Rusal and resources unit SMR, as well as power and energy provider EuroSibEnergo, branded En+, and car manufacturer GAZ Group - with Hong Kong as a potential destination.

However, the plans might be put on hold if the market worsens.

"In the events of the last two months, the market has changed," the CEO said, "so whether we shall go public or not will depend on the overall market condition and the world's perspective [on IPOs]."

Basic Element companies are changing strategy to survive the turmoil. The key to the future is who will be the first to be ready to overcome the challenges, Moldazhanova said.

Russian-listed GAZ car group will slash its production of luxury cars by 30 percent to 30,000 from 45,000 by next year, while sticking to plans for other models, said Alexander Filatov, director of Strategic Development at Russian Machines, parent company of GAZ.

SMR, the pending listing resources arm of Basic Element, said it will focus on cost control as fuel prices have put pressure on costs and falling prices have squeezed profit margin.

Moldazhanova said Russia would be less badly hit by the financial tsunami.

Russia’s rich hammered by global crisis

The Chronicle Herald.ca, Canada - Sun. Oct 19

By CATRINA STEWART The Associated Press

MOSCOW — Russia’s business elite is ripe for a dramatic reshuffle as the country’s worst stock market crash in a decade wipes tens of billions off their fortunes in a matter of weeks.

Many of the oligarchs — the term for the businessmen who amassed vast fortunes through the flawed privatizations of the 1990s and a natural resources boom under Vladimir Putin’s eight-year presidency — have lost paper fortunes through plunging stock prices.

But some of them are in a much more precarious position: the ones who borrowed heavily against their shares and who in some cases are being squeezed to sell assets or cancel business deals.

"The funding squeeze has hit Russia more than mostplaces and you are seeing enormous stress on the oligarchs who borrowed to finance growth," said David Aserkoff, an analyst at Renaissance Capital.

Aluminum king Oleg Deripaska, ranked by Forbes in May as the wealthiest Russian with an estimated fortune of some $28 billion, is one of most high-profile victims of the crisis. The owner of a majority stake in aluminum company Rusal, he has expanded his vast interests abroad, buying stakes in General Motors Co., construction companies Strabag SE and Hochtief, and Magna International Inc, Canada’s largest auto parts maker.

But as he expanded, he borrowed heavily, using shares as collateral, say analysts. When the stock market went south, much of this collateral was slashed in value, which entitled creditors to issue margin calls — demands to put up more money.

Deripaska’s Basic Element holding company ceded its 20 per cent stake in Magna bought last year for US$1.5 billion to creditors and "relinquished" its 10 per cent stake in Hochtief to Germany’s Commerzbank. Rusal also borrowed to acquire Mikhail Prokhorov’s 25 per cent stake in mining company Norilsk Nickel this year; Rusal has insisted it has no problems with refinancing the loan.

But speculation is swirling in the market about almost every oligarchic holding — ranging from Vladimir Yevtushenkov’s Sistema holding to Mikhail Fridman’s Alfa Group. Leverage helped swell the number of Russian business figures on Forbes’ list of the world’s rich this year to a new high of 87. Leverage will now likely help shrink that number.

"They’ve been obsessed about Forbes," billionaire Alexander Lebedev said in an interview with The Associated Press. Lebedev, a part-owner of national airline Aeroflot, said he has seen about two-thirds of his stock portfolio wiped out by the crisis, and joked that he has fallen off the Forbes list.

ALCOA moves to cut costs: Union meets to quell rumors of personnel reductions

Maryville Daily Times, TN - Oct 18, 2008

By Robert Norrisof The Daily Times Staff

As aluminum prices fall and demand declines, ALCOA Inc. is seeking to trim costs at Tennessee Operations and at other facilities worldwide, prompting concern for jobs at the local plants.

"All ALCOA locations have been asked to gather people to discuss how best to capture new opportunities, lower costs, improve efficiency, reduce inventories and improve our processes," Christy Newman, community relations manager at Tennessee Operations, said Friday.

Worries over possible personnel reductions at the company's plants in Alcoa prompted United Steel Workers Local 309 to hold a meeting Tuesday to address rumors circulating among employees.

One of the rumors was that the company had informed the union that hundreds of employees would be laid off unless Local 309 agreed to other cost-saving measures. Brickey Beasley, president of Local 309, said that was not the case.

"It's nothing like that. That's one of the reasons we had the meeting Tuesday. There were rumors on the floor," Beasley said. "We wanted to tell the folks about the information we had. Sometimes rumors get out of hand. We just wanted to make sure everybody understood."

Beasley said the union recognizes that ALCOA is looking to cut costs at smelting operations across the whole ALCOA system.

"It's expensive to make aluminum, and the company is looking at making cost reductions. I'm sure, in time, they will look at people and labor. Right now it's about equipment."

Newman said ALCOA was looking at a number of categories to rein in expenditures: raw material consumption rate, operation supplies, vehicle costs and lease expense, personnel costs and capital expenditures.

"Falling metal prices and increased costs for raw materials present strong challenges. We've seen metal prices fall by one-third compared to where they were in July," Newman said. "This is the biggest decline in the history of the industry. A third of the smelters in the world are operating at a loss, according to industry estimates."

Earlier this month, ALCOA announced it is laying off 660 workers at its Rockdale, Texas, smelting plant because of the high cost of power, turbulent market conditions and inefficiency at the plant.

Reuters reported Thursday that low prices are spurring aluminum smelters in China, the world's top producer and consumer of the metal, to shut down some high-cost capacity, reflecting a wave of shutdowns in the global market.

"While Tennessee Operations can't impact the cost of metal we can impact the cost to make it. We're working to improve the cost position at Tennessee Operations," Newman said.

"We can't give details, as yet, because we're still pulling together ideas and plans. But it is fair to say we are looking at all aspects of the operation in order to improve our competitiveness."

Beasley said the situation changes day to day.

"The state of ALCOA in Tennessee -- sometimes it's not that good -- but it's not as bad as the rumors would leave some to believe," he said.

LME aluminum price to average USD 2,400 per tonne - Analysts

SteelGuru, India - Oct 17, 2008

Analysts at JP Morgan expressed that the LME Aluminum average price will be USD 2,400 per tonne in the year 2009.

JP Morgan is a leading financial services firm with global scale and reach. The quantity of aluminum in stock have reached to 1.15 million tonnes, the LME price will decrease by 12% down to USD 2,715 per tonne. That is more than they estimated before.

It is estimated that in the year 2009 year aluminum supply will increase by 8%, which is higher than 6% in the year 2008. Aluminum consumption will increase by 6% in the year 2009 that is the same increasing rate than in the year 2008.

The situation that the demand exceeds supply will be alleviated if the aluminum price declining forced to reduce smelter production especially in China.

(Sourced from YIEH.com)

Oligarch's battle clouds an economy

Financial Times, UK - Oct 18, 2008

By Catherine Belton and Neil MacDonald

The towering smokestack of Aluminium Plant Podgorica is a Montenegrin landmark. The soil for kilometres around is tinged with red, white and black from the by-products of smelting done the old-fashioned way.

One way or another, the toxic smoke will soon stop billowing from the plant, known as KAP.

A €30m ($40m, £23m) environmental refit has started at the 38-year-old smelting and processing complex on the edge of Montenegro's capital. That is on top of €50m of promised technical upgrades to boost the plant's productivity.

But KAP's frustrated billionaire owner could also simply shut it down.

Oleg Deripaska, the politically connected Russian -metals tycoon, bought majority control of the debt-ridden plant and its associated bauxite mines for €48.5m in late 2005, months before the smallest former Yugoslav republic split from Serbia by means of a peaceful referendum.

The plant accounts for half of Montenegrin exports and about 14 per cent of gross domestic product.

But rising electricity costs have scuppered plans to turn round the loss-making company, souring Mr Deripaska's relationship with the Balkan state.

The Russian oligarch was pursuing a lawsuit for €300m at a Frankfurt arbitration court, alleging the government misled him on the value of KAP's assets, Montenegrin officials revealed last month.

The move comes as Mr Deripaska, who on paper is Russia's richest man, with an estimated fortune of $28bn (€21bn, £16bn), faces an increasing financial squeeze as a result of the turmoil on global markets.

As one of the most leveraged Russian oligarchs, he was already forced to divest his 20 per cent stake in Magna, the Canadian car parts maker, to creditors last week after margin calls.

Mr Deripaska, whose empire spans carmaking and aluminium, has cultivated close ties to the Kremlin and is known for aggressive business tactics.

The government claims that the Central European Aluminium Company, a subsidiary of Mr Deripaska's Basic Element, was exerting "political pressure" in a bid for extended electricity subsidies. Russian investments in the Balkans sometimes appear to lack business logic, with tycoons instead bending to fit Moscow's -strategic -priorities.

The money-losing KAP acquisition stems from "the monstrous combination of awfully rich but fearful oligarchs and a poor but powerful Russian government", says Blagoje Grahovac, a former Yugoslav army general and advocate of pro-western reforms.

Extensive Russian property investments could similarly be a front for Moscow to seize a Mediterranean coastal foothold and counter Montenegro's Nato membership aspirations, western analysts say.

But Russian officials say the KAP dispute is Mr Deripaska's "private matter" - a fairly ordinary problem in a region where new power plants will not be ready in time to avert serious shortages in the next few years.

CEAC filed the lawsuit last November - a year before the first scheduled reduction of its statesubsidised electricity under the privatisation agreement, with subsidies set to end altogether in two years.

CEAC executives have warned that they might close KAP, Europe's most outdated aluminium operation, without a better electricity deal.

The plant and the mines employ almost 4,000 in a country of fewer than 700,000 people. Workers and retail investors hold hundreds of small stakes.

"If KAP went belly up . . . other people would suffer too," says Kaha Avaliani, chief executive at CEAC Holdings.

Mr Deripaska closed the KAP deal with Milo Djukanovic, the prime minister who led the country to independence.

"The price KAP gets now is subsidised by the state. And our partner [Mr Deripaska] accepted the forthcoming price rises in sales and purchase agreements," Mr Djukanovic says.

Electricity is the key cost factor in aluminium making. Initially, the state power company appeared to be giving the Russians bargain prices.

However, the contract linked the price of power to that of aluminium, so record metal prices this year brought rising losses for the plant.

CEAC executives said they had counted on taking over a power plant that would give KAP cheaper power.

After tough negotiations, CEAC won bidding to revamp the old Pljevlja coal mine and thermal generating station.

However, parliament blocked the deal, as it would give too many assets to a single foreign investor.

"That was a serious setback for us," Mr Avaliani said. "We need our electricity from somewhere, and the market is scary."

The solution might be for the Russians to build a second coal-fired power plant, under a tender the government has promised to put out within weeks.

Branimir Gvozdenovic, the minister for economic development, told the Financial Times this month: "We're ready to continue dialogue . . . to define a strategy for rehabilitation and survival of the aluminium plant."

The KAP overhaul is "on track" for completion in two years, Mr Avaliani said.

Engineers are installing fans to suck the smoke away from the pot lines where molten metal cools.

However, the timetable also cuts off subsidies in November 2010.

Additional reporting by Catherine Belton in Moscow. Copyright The Financial Times Limited 2008

Nalco to set up Rs 10k-cr smelter plant in Indonesia

Financial Times India : Oct 18, 2008

R Ravichandran

National Aluminium Company Ltd (Nalco) is planning to set up a Rs 10,000-crore smelter project at Indonesia. A consultant appointed to analyse the pros and cons of the project has given a green signal. Nalco will soon come out with a detailed project report (DPR), including financial structuring, equity partnership, business model, among others, said CR Pradhan, chairman and managing director, Nalco.

Talking to FE on the sidelines of a three-day seminar on aluminium diecasting, organised by the Aluminium Association of India said, "We have received a favourable report from the consultant on this project and we will soon come out with a DPR in this regard. Based on this, we will move further."

"We will look for partners for this 5,00,000 tonne, 1,300 mw smelter project. It could either be a local partner someone from outside. Everything, including the exact project cost, financial tie-ups, JV partners etc, will be known only after our DPR is ready," he added. The company plans to export raw material from India to smelt it in Indonesia and then bring back the aluminium for finished products. For this, we will have to approach the Indonesian government for various approvals. The company has similar plans for Iran as well, he added.

According to Pradhan, the Rs 5,000-crore brownfield project at Orissa is nearing completion and the project will have additional capacities of bauxite, alumina, aluminium and power. The bauxite capacity will go up from 48 lakh tonne to 63 lakh tonne, alumina capacity will go up from 16.5 lakh tonne to 21 lakh tonne, aluminium capacity will go to 4.6 lakh tonne from 3.45 lakh tonne and the power capacity will be increased to 1,200 mw as against the present 960 mw, he said.

Pradhan also pointed out that the per capita consumption level of aluminium in India was expected to grow sharply in the years to come due to its increased usage across various applications. Many reputed auto majors are already sourcing die casting components from India. With most of them already setting up shops in India and expanding their operations in a big way, there is an immense potential for a quantum leap for the aluminium die-casting industry, he added.

The time is ripe to take stock of the present status of the industry and chart a roadmap for the future. In the days to come, considerable attention needs to be given on improving alloy design and processes,...

Pradhan concluded....

Century Aluminum posts higher 3Q profit

MarketWatch - Associated Press 10.21.08

MONTEREY, Calif. - Century Aluminum Co. said Tuesday third-quarter net income surged nearly five-fold on a higher volume of aluminum shipped and cost cutting.

Net income jumped to $37 million, or 57 cents per share, from $7.5 million, or 17 cents per share, a year ago.

Excluding a $3.3 million tax benefit and a $50.4 million charge for changes in the value of certain financial instruments to reflect market conditions, the company earned $84.1 million, or $1.31 per share. Analysts polled by Thomson Reuters expected, on average, earnings per share of $1.43.

Sales rose more than 20 percent to $552.2 million, topping analysts' estimates of $549.5 million.

"We are carefully managing the business in this environment of unprecedented dislocations in the global financial markets," Chief Executive Logan W. Kruger said in a statement. "We have suspended discretionary spending."

The Monterey, Calif., based company said it is closely monitoring and evaluating its smelter project in Helguvik, Iceland, in light of disruptions in global financial markets.

"We have ceased making any new capital commitments and are reducing project spending," Kruger said, noting the company will "soberly evaluate the feasibility of all elements of the project during the near term."

Century Aluminum (nasdaq: CENX - news - people ) owns primary aluminum capacity in the United States and Iceland, as well as an interest in alumina and bauxite assets in the United States and Jamaica.

Kaiser Aluminum starts construction on space inside Midlink Business Park

Kalamazoo Gazette October 21, 2008 09:47AM

Posted by Alex Nixon

COMSTOCK TOWNSHIP, MI -- Kaiser Aluminum started construction last week to outfit space it plans to occupy late next year inside the Midlink Business Park.

The Foothills Ranch, Calif.-based company plans to take over more than half of the space in Midlink's East building to produce fabricated aluminum products for a variety of industries, Midlink officials said in a written statement.

Over the approximately yearlong construction project, workers will raise the building's roof by about 20 feet, install 10 interior truck docks and build 20,000 square feet of offices inside the more than 464,000-square-foot space. Kaiser previously said it would invest $120 million to set up its Kalamazoo operation.

When Kaiser Aluminum is fully operational at Midlink East during the fall of 2009, the two Midlink buildings will be 78 percent occupied, Midlink officials said. Kaiser has said it expects to employ 300 workers by the end of 2009.

Midlink is a former General Motors Corp. stamping plant on Sprinkle Road at Interstate 94 in Comstock Township. Businesses opening there can take advantage of a state Renaissance Zone program that eliminates virtually all local and state taxes for up to 15 years.

"The continued growth at Midlink is a testament to the spirit and commitment of the Kalamazoo region to be innovative in not only the products we offer but the space in which we make them," said Ron Kitchens, chief executive officer of Southwest Michigan First.

Norsk Hydro Sees Chinese 2008 Aluminum Demand Growth Dropping

Tuesday October 21st, 2008 / 8h37

-By Andrea Hotter, Dow Jones Newswires

LONDON -(Dow Jones)- The increase in Chinese demand for aluminum is likely to slump by more than two thirds this year, putting an end to the "extraordinarily high" annual growth rate seen in 2007, Norsk Hydro ASA (NHY.OS) said Tuesday.

The Norway-based company said apparent consumption of primary aluminum, used in transportation, packaging and construction, is expected to drop from around 38% year-on-year growth in China to a growth rate of 10%-12% this year.

The company added that estimated aluminum production growth of 12-14% in China will depend on the energy supply situation and ongoing efforts by the authorities to moderate the expansion of primary capacity and primary metal exports.

China's forecast aluminum production and consumption were adjusted downwards from the second quarter partly due to voluntary reductions in production, for energy conservation due to the country's hosting of the Olympics. In addition, the negative economic developments have also affected China, Norsk Hydro added.

Source : Dowjones Business News

Alro, NADCAP certified for conformity with aerospace industry standards

Financiarul, Romania - October 21st, 2008

The largest aluminum producer in Central and Eastern Europe, Alro Slatina Co., has received the NADCAP (National Aerospace and Defence Contractor Accreditation Programme) performance certification for conformity with the aerospace industry requirements.

According to a company release, remitted to AGERPRES, the certificate was awarded by the NADCAP Management Council, in accordance with SAE Aerospace Standard AS 70003, following the testing of aluminum alloys produced at Slatina for heat treatment, conductivity measurement, tensile testing, hardness and metallography.

The accreditation was received in September, for a period of one year, recognizing the conformity of Alro’s processes with the international requirements of the aerospace industry.

The certification is the result of Alro’s significant investment program that is focused on diversifying output, increasing high value added production and improving quality. Over the past 6 years, the company has invested more than USD 270 million in technological and environmental projects, improving the production mix and the quality of output.

This year, Alro successfully completed the modernisation of its cold rolling mill, following a USD 4.8 million investment, doubling the mill’s processing capacity to 36,000 tpa and improving the quality of flat rolled products such as sheets and coils, meaning the facility’s performance will rank amongst the highest of modern mills in operation.

"Since its privatization, Alro has implemented an ambitious investment program aimed at transforming the company into a producer of value added goods", stated Gheorghe Dobra, Alro general manager.

Alro is a branch of Vimetco N.V., global primary and processed aluminum producer, vertically integrated. Alro is the largest aluminum producer in Central and Eastern Europe, with a production capacity of 265,000 tpa.

Main markets for the company products are the European Union (Hungary, Poland, Greece, Germany and Romania), the United States and South Korea. The aluminum producer is ISO 9001 certified for the quality management and also EN 9001 certified for production units for aerospace industry, its products being in line with the primary aluminum quality standards of the London Metals Exchange - LME).

Alcoa plant to cut production

Victoria Advocate, TX - October 23, 2008

BY ALLISON MILES - AMILES@VICAD.COM

Alcoa's Point Comfort plant will decrease alumina production by about 25 percent by the end of November, the company announced Thursday.

That reduction equals about 550,000 metric tons a year, according to a company news release.

Two of the plant's six digester units will close with the reduction, company spokeswoman Laurel Cahill said.

Alcoa will lay off some workers to meet the new production demands, although the company has not determined specific numbers, Cahill said.

"It's never easy when employees are affected by business conditions beyond their control," she said, explaining that they would not announce those numbers until the affected workers were notified.

But Point Comfort's plant is flexible, Cahill said, and will increase operations when the time is right.

"When market conditions change we are ready to respond," she said.

The digester unites aid in the first step of the alumina process, Cahill said. During that step, she explained, bauxite is mixed with a caustic under high temperatures.

Alumina is a product that aids in the production of aluminum.

Cahill attributed the close to market conditions. Right now the demand for aluminum is down, she said, and the same applies to alumina.

Alcoa is reviewing the potlines and digesters within its global smelting and refining systems, Bernt Reitan, Alcoa executive vice president and president of global primary products said in a company news release.

"Aluminum prices have fallen dramatically over the past few months," Reitan said. "We will continue to take steps to match production with demand in the marketplace, focusing on our highest cost operations."

Point Comfort's closures will closely resemble what the plant did in preparation for Hurricane Ike, Cahill said. They will bring them down in a stable, coordinated way and, when the time comes, they can bring them back up.

Guyana seeking more Chinese investors

Caribbean Net News, Cayman Islands - Friday, October 24, 2008

GEORGETOWN, Guyana: Following President Bharrat Jagdeo's recent visit to China to meet with high level officials, including that country’s premier and governor of the Chinese Import and Export Bank, Charge d' Affaires of the Guyana Embassy in Beijing, Choo An Yin has called on Chinese companies to explore investment opportunities in Guyana.

Yin made this call while participating in a seminar under the theme "Road to the Caribbean" held in Tianjin City, Beijing, China on Tuesday upon an invitation by the China Chamber of International Commerce- Tianjin Chamber of Commerce and China Council for the Promotion on International Trade (CCPIT) Tianjin Sub-Council:.

Yin in her presentation to the Chinese companies explained the investment environment in Guyana and encouraged Chinese companies in Tianjin City to visit Guyana.

Earlier this month, when Jagdeo met with the Chinese premier and governor of the Chinese import Chinese Import and Export Bank (EXIM Bank) he indicated that they committed to fund feasible investments in the South American country by Chinese who are willing to invest

Jagdeo had said he held discussion with a number of current and future investors in Guyana and highlighted amongst them the current Chinese firm Bosia Minerals Incorporated, a bauxite company in Guyana indicated their intentions to set up a US$1 billion aluminum plant at their Linden complex.

Kaiser Aluminum's Kalamazoo plant being built for efficiency gains

http://www.mlive.com/kzgazette/news/index.ssf/2008/10/kaiser_aluminums_kalamazoo_pla.html

Kalamazoo Gazette Thursday October 23, 2008,

by Alex Nixon |

COMSTOCK TOWNSHIP, MI -- Kaiser Aluminum's Kalamazoo operation is key to the company's future growth, Kaiser officials said Wednesday.

When completed in 2010, the 464,000-square-foot space in the Midlink Business Park is expected to be Kaiser's most efficient, lowest-cost producer of "general engineering" aluminum bars and rods, said Jack Hockema, Kaiser chairman, president and chief executive officer.

"This is a critical strategic project for us," Hockema said during a tour of the massive, nearly bare space Wednesday. "It's critical to our organic growth initiatives.

"We expect it will be the lowest cost producer (in the nation)," Hockema said.

Kaiser began construction last week that will outfit about a quarter of the former General Motors Corp. stamping plant in Comstock Township with aluminum melting and casting equipment, two press lines, 10 truck docks and new offices, among other work.

In February, state officials announced they had awarded $3.7 million in tax incentives to Kaiser Aluminum in exchange for its $80 million investment and 300 new jobs.

On Wednesday, Hockema said Kaiser wouldn't discuss what it's spending to get the Kalamazoo plant up and running, but figures published by the Gazette were "in the ballpark." Hockema also declined to discuss what the plant's annual production capacity is expected to be in 2010.

The plant will take mostly scrap aluminum and press it into rods and bars, products that are used by machine shops and others to make parts such as engine manifolds, electrical connectors and machinery components.

Kaiser chose Kalamazoo to set up its newest plant because, "logistically, it's tremendous for us," said Martin Carter, Kaiser vice president and general manager of common alloy products. None of its competitors have operations in the Midwest, and Kalamazoo's proximity to Michigan's automotive suppliers and Chicago -- the country's largest market for Kaiser's products -- is key to keeping shipping costs low.

Hiring has started for the 150 to 200 workers Kaiser expects to need by the end of next year, said Jason Harloff, who will be the plant's general manager once construction is completed.

While manufacturers have increasingly looked overseas for low-cost parts, Kaiser intends to out-compete foreign companies with efficient, low-cost and high-quality production in Kalamazoo, said Keith Harvey, vice president of sales and marketing.

"This place is being built to take it on," Harvey said of foreign competition.

Kalamazoo is a key to Kaiser Aluminum's growth strategy

Michigan Business Review - MLive.com, MI - Wednesday October 22, 2008,

http://www.mlive.com/businessreview/western/index.ssf/2008/10/kalamazoo_is_a_key_to_kaiser_a.html

by Lynn Stevens

Kaiser Aluminum CEO Jack Hockema toured the new Kalamazoo site Wednesday.The new general-engineering alloy facility at Midlink Business Park in Kalamazoo is a critical strategic project in Kaiser Aluminum's organic growth program, CEO Jack Hockema said on a visit to the site Wednesday.

When the more than 464,000-square-feet of a former General Motors Corp. stamping plant is fully revamped, its technology and location will help Kaiser Aluminum [Nasdaq: KALU] challenge all competitors in aluminum rod and billet fabrication.

"It's designed to take on overseas competition," Hockema said.

It is Kaiser's first plant in the Midwest and it's targeting automotive manufacturers and other industries concentrated in the region.

Kalamazoo's location midway between Chicago and Detroit helped land the new plant. The types of products the plant will make are relatively low-value-added, so the cost of shipping them becomes a disproportionately large part of prices, Hockema explained. In fact, shipping can outweigh the cost of production, he said. Building the company's newest plant in proximity to its major customer bases makes Kaiser price-competitive for those customers.

Customers include appliance manufacturers, automotive suppliers, machinery equipment manufacturers, electrical markets and other industries that require light weights, good machinability and good electrical conductivity. Those users are concentrated in the Midwest, according to Keith Harvey, vice president for sales and marketing for general-engineering and aerospace.

A similar extrusion plant in Los Angeles serves customers west of the Rocky Mountains, Hockema said.

Further, the new plant will be fitted with the most advanced technology in the Kaiser system for rod and billet manufacturing. It will be the lowest-cost fabricator in the Kaiser family, Hockema predicted.

"Kaiser has a long history of tremendous technological depth," he said. "This will be world-leading in quality and cost attributes. We have some proprietary technology that will be used here -- we expect the products to be superior."

The more than 464,000-square-foot Kaiser operation will include a melting furnace, two presses, testing stations and storage or depot facilities. Although a Midlink Business Park spokesman ballparked the cost of converting the space in the former General Motors Corp. stamping plant at $80 million, Hockema refused to confirm that amount.

The Kalamazoo plant is the second step in Kaiser's $250 million total organic growth program, he said. The total cost of setting up operations will consume roughly half that program budget.

Photo by Lynn Stevens

Kalamazoo Plant Manager Jason Harloff stands in front of the location for a 6,000-ton aluminum press.The company has begun hiring, according to Plant Manager Jason Harloff -- although there was no equipment in the space this week. Employment will be at around 50 percent by the end of the second quarter of 2009, he predicted, and reach full employment of 150 to 200 at the end of 2009.

Kaiser will bring in experts from some of its 10 other plants in the U.S. -- Harloff is from the Chandler, Ariz. tube-mill plant -- and its plant in Canada, but the majority of employees will be local residents, according to Martin Carter, vice president/engineer for commercial alloys.

Kaiser Aluminum signed a 25-year lease in Midlink Business Park last week and is making a commitment for the long term, the company officers said.

"This facility lends itself to expansion," Carter said. "We'll have the 4,000-ton press and the 6,000-ton press -- we could add a third, and another melter. We fully expect to make those commitments."

Chinalco to further cut production

Trading Markets (press release), CA - October 26, 2008

BEIJING, Oct 26, 2008 (Xinhua via COMTEX) Aluminum Corp of China is possibly to further cut its output of electrolytic aluminum and alumina amid sliding aluminum price, China Securities Journal reported, citing Lu Youqing, vice general manager of Chinalco, parent of Chalco.

Lu estimated that the company's alumina output might be slashed by 15 percent.

Chalco announced on Oct 23 that it would cut electrolytic aluminum capacity by 720,000 tons per year or 18 percent of its total capacity on aluminum price decline and soft demand. It warned that it would look into market and operating status to decide whether to further cut the capacity.

However, analysts are unoptimistic on the supporting effort of the capacity cut to the price slump.

SMELTER UPGRADE: Rio Tinto promises US$300M more to Kitimat project

Canadian Mining Journal, Canada - October 26, 2008

BRITISH COLUMBIA — RIO TINTO ALCAN of Montreal is proceeding with the US$500-million modernization of its Kitimat aluminum smelter, with parent company Rio Tinto promising another US$300 million on top of the US$200 million it committed earlier. The money is earmarked for an anode baking furnace, electrical substation, casthouse, construction camp and ancillary services.

The modernization of the Kitimat aluminum smelter will increase its current production rate by more than 60% to approximately 400,000 t/y from 245,00 t/y. Rio Tinto Alcan's proprietary AP technology is likely the most cost effective, energy efficient, and environmentally friendly smelting technology available, allowing the modernized plant to reduce greenhouse gas emissions by up to 40% per year.

Additional news releases are posted at www.RioTinto.com/RioTintoAlcan.

Alcoa eyes growth in Russian aluminum demand

Reuters - Oct 27, 2008

By Robin Paxton

MOSCOW (Reuters) - Alcoa Inc (AA.N: Quote, Profile, Research, Stock Buzz) will sell 60 percent of its Russian-made aluminum products to domestic customers this year, up from 50 percent in 2007, as the U.S. firm bets on Russia's economy riding out the global financial crisis.

Alcoa's two Russian plants would reverse current losses as demand grows in tandem with reforms in the aerospace, automotive and shipbuilding sectors, Oleg Kalinsky, chairman of the Alcoa Metallurg Rus plant in southern Russia, said in an interview with Reuters.

"The economic difficulties will not influence our long-term commitment to Russia, because the market will grow," said Kalinsky, who also handles Alcoa's public affairs in Russia.

"The Russian economy is vigilant enough to withstand the crisis."

Pittsburgh-based Alcoa said this month it was halting major capital projects due to uncertain global markets. Operations in Russia, where the company is investing $768 million and employs 7,900 people, would not be affected, Kalinsky said in the company's Moscow offices.

Alcoa acquired two aluminum fabrication plants in Russia in 2005 -- the Samara Metallurgical Plant, which was the Soviet Union's largest such enterprise, and Alcoa Metallurg Rus, in the southern town of Belaya Kalitva. Neither is yet profitable.

"We understood the road would be difficult, as the assets had not been modernized for 20, 30, 40 years," Kalinsky said. He declined to estimate when the plants might first turn a profit.

"When you put so much money in, you do everything possible to complete the investment and start turning a profit," he said.

Alcoa has spent about 90 percent of the total $768 million it plans to invest in Russia by the end of 2008, including the $257.5 million acquisition price of the two plants, Kalinsky said.

CONSUMPTION GROWTH

Per capita aluminum consumption in Russia, at 5-6 kg per year, is about seven times lower than in the United States, where the average person consumes between 35 kg and 40 kg.

"Per capita aluminum consumption will increase. When it increases, we will develop in line with this market and will satisfy this market," Kalinsky said.

"When we increase the quality and volume of our product, consumption patterns will also change," he said, adding that end-users would replace imports with Russian-made products.

In early 2009, the company will open a new "end-and-tab" line at its Samara plant to produce parts for drinks cans. The parts are currently imported.

Kalinsky also forecast strong Russian demand for aluminum in the aerospace and shipbuilding sectors.

"In order to develop a diversified economy, not just based on oil, gas and metals, Russia is going into areas such as aerospace and shipbuilding," he said.

Alcoa also will attempt to increase sales of forged aluminum wheels produced at the Belaya Kalitva plant by persuading truck manufacturers to replace the heavier steel wheels more favored in Russia at present.

"There has to be a shift in mentality," Kalinsky said. "We will have to market our product long term to increase consumption, to introduce aluminum wheels as a very competitive product in relation to steel wheels."

STRONG ECONOMY

Kalinsky said Russia, which built its gold and foreign exchange reserves into the world's third-largest during the period of high oil prices, was well equipped to withstand the global financial crisis.

"The strength of Russia lies in the fact that the excessive price of oil that we experienced was stored away in gold and currency reserves," he said. As of October 17, Russia held $515.7 billion in gold and foreign exchange reserves.

"The Russian economy will have difficult times, but they will not be as severe or as damaging as the crisis of 1998, when we didn't have any internal reserves," Kalinsky said.

"The measures taken by the Russian government are timely and efficient."

Alcoa's long history and wide range of products -- the company's production spans bauxite to finished products in 34 countries -- would help the company grow in Russia, he said.

"Our company has seen pretty much everything in its 120-year history -- the heavy recession of the 1930s, the 1970s oil crisis in the U.S. It all goes in cycles. We're confident Russia will grow and develop."

(Editing by Karen Foster)

Gazprom, RusAl Sign Vietnamese Deals

The Moscow Times, Russia - 28 October 2008

By Denis Dyomkin / Reuters

Gazprom and United Company RusAl signed deals Monday to participate in natural resources projects in Vietnam as the Kremlin aims to triple annual trade between the countries to $3 billion.

President Dmitry Medvedev presided over the signing of the deals, which will involve Gazprom exploring for oil and gas off the Vietnamese coast, during the visit to Moscow of his Vietnamese counterpart, Nguyen Minh Triet.

"The negotiations confirmed the framework for strategic partnership between Russia and Vietnam," Medvedev said after the meeting.

Russia still enjoys close ties with Vietnam, formed during the Soviet era. Medvedev said talks had focused on increasing annual trade between the countries first to $3 billion, and subsequently $10 billion, from more than $1 billion in 2007.

He said the countries were prepared to conduct joint "geological exploration in Vietnam, Russia and third countries."

Gazprom signed a 30-year agreement with Vietnamese state oil monopoly group Petrovietnam to explore four blocks of Vietnam's continental shelf. Gazprom said in a statement that it would finance initial exploration work.

The companies' existing joint venture, Vietgazprom, will carry out the work. It is already exploring off Vietnam's coast.

Separately, the two sides created a new joint venture, Gazpromviet, to work in Russia and third countries. Gazprom subsidiary Gazprom Zarubezhneftegaz will own 51 percent and Petrovietnam 49 percent of the joint venture, which will work at the Nagumanosvkoye deposit in Russia's Orenburg region.

The blueprint for Russian-Vietnamese partnership in energy is Vietsovpetro, a joint venture between Petrovietnam and state-owned Zarubezhneft from the 1980s, which produces more than 150,000 barrels of oil per day on average from the Bach Ho field.

RusAl signed a memorandum of understanding with Vietnamese company An Vien to build an alumina refinery witha a capacity of 1.5 million tons per year to run on bauxite mined from the Binh Phuoc deposit in southern Vietnam, which RusAl estimates to contain about 700 million tons of bauxite.

RusAl chief executive Alexander Bulygin said at the signing ceremony that investment in the bauxite and alumina project was estimated at $1.5 billion. RusAl would hold 51 percent of the joint venture and An Vien 49 percent, he said.

Construction is scheduled to begin in the first quarter of 2012 after a preliminary feasibility study is conducted next year and in 2010, RusAl said in a separate statement.

Vietnam has the world's third-largest explored reserves of bauxite, the raw material from which alumina and aluminum metal are made.

Vietnam is also prepared to invest at least $750 million in a $1.5 billion joint venture to build a fertilizer plant in the republic of Kalmykia, the republic's president, Kirsan Ilyumzhinov, said after the signing ceremony.

The plant would be built next year and would generate $1 billion in annual sales at current prices, he said.

Officials working on plan if Bluff smelter is sold

Carbon News, New Zealand - Tuesday 28th October 2008

Officials from a swathe of government agencies are quietly drawing up a contingency plan for the Bluff aluminum smelter at Tiwai Point.

This is an informal procedure only, but the planning envisages the consequences of Rio Tinto, the current owner, being acquired by BHP Billiton, which is in the throes of a hostile takeover of the British mining company.

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http://www.carbonnews.co.nz/story.asp?storyID2268

Lincoln Electric Upgrades Indalco Alloys Aluminum Wire Rod Mill

ThomasNet Industrial News Room (press release), NY - August 29, 2008

TORONTO, August 29, 2008 -- The Lincoln Electric Company announced today the successful completion of the modernization of the Continuous Cast Aluminum Rod Mill at its Canadian subsidiary, Indalco Alloys Inc., the world's only fully integrated aluminum welding wire producer.

The multi-million dollar modernization was conducted by CONTINUUS-PROPERZI, an Italy-based designer and manufacturer of rod production lines. It is a tangible example of the Lincoln Electric commitment to provide superior quality rod for the manufacture of premium quality aluminum welding wires. The upgrade of the Continuous Cast Rod Mill applied the latest technology to the Company's casting process. The modernization also included the upgrade of the electrical controls and user interface via continuous line data from the rod mill.

In making the announcement today, Joseph G. Doria, President and Chief Executive Officer of Lincoln Electric Company of Canada, said, "This new generation rod mill demonstrates Lincoln Electric's commitment to continuous improvement in its processes and to serving our customers with the latest and best technology, while providing stability of supply which is so important these days with so many global supply chain issues."

Located in Mississauga, Ontario, adjacent to Toronto, Indalco is an ISO 9001 and ISO 14001 certified company and one of the major global manufacturers and processors of high alloy aluminum rod and welding wire.

European Leader in Aluminum Rolling Chooses Quintiq to Schedule Cold Mill Production Area

PR Newswire UK (press release), UK - October 27 2008

'S-HERTOGENBOSCH, The Netherlands

- Quintiq Selected Following Successful Scheduling Implementation of the Hot Mill

Quintiq, a leading provider of advanced planning and scheduling (APS) solutions, today announced that it has won a contract from the Novelis Rogerstone aluminum rolling mill in the United Kingdom to provide a supply chain scheduling solution for the plant's cold bay. This agreement follows the successful implementation in 2001 of a Quintiq Scheduling (APS) solution for the hot mill at Rogerstone.

An early adopter of advanced planning and scheduling, Novelis has been working with Quintiq for many years to improve efficiency and enhance performance. Previous and ongoing Quintiq implementations at Novelis sites include the company's hot mill at Oswego in the United States, its cold rolling and finishing manufacturing centers in Oswego and Kingston (Canada), and its recycling and remelt/cast center in Oswego, as well as over a dozen implementations at other production sites throughout Europe.

The Novelis plant at Rogerstone, one of the largest aluminum rolling mills in Europe, is part of Novelis Inc, a world leader in aluminum rolling and recycling, which produces an estimated 19 percent of the world's flat-rolled aluminum products.

The Novelis facility at Rogerstone selected the Quintiq solution because of its ability to handle the complexity of the cold bay's supply chain. The cold bay consists of numerous resources with multiple dependencies, as well as alternative routing capabilities. Quintiq is able to take into account all of the constraints involved in the manufacturing of aluminum rolled products, including space availability, active cooling, virtual materials, consumables, stock and dispatching. Novelis Rogerstone's resources in the Cold Bay area consist of a tandem rolling mill, multiple annealing furnaces, a 64" rolling mill, slitter and tension leveler, as well as the cut-to-length line and packing which will all be integrated by Quintiq into a unified system.

"We chose Quintiq because over the years they have demonstrated the ability to design scheduling solutions for our complex manufacturing processes," explained Dr. Oliver Picht, General Manager of Novelis Rogerstone. "With Quintiq's in-depth understanding of aluminum rolling processes in general and Novelis' business processes in particular, I am confident this implementation will help us achieve the next level of supply chain quality."

The aim of this implementation is to significantly improve delivery performance, improve cycle times and reduce inventory while at the same time increase throughput, so that Novelis can grow with the market. Quintiq solutions enable Novelis to optimally plan its production, linking into the logistics operations, opening the way to improved customer service, reduced capital requirements and scheduling flexibility.

Dr. Victor Allis, CEO and co-founder of Quintiq, commented: "We are very pleased that the Novelis plant at Rogerstone has decided to expand its implementation of Quintiq solutions. Novelis projects are always challenging due to the production volume, expanse of their product portfolio and the complexity of their supply chain. However, it is just these challenges that make working with Novelis satisfying as they bring out the best in our planning capabilities."

Capgemini, a leading management consulting and IT services organization with extensive experience in Quintiq solutions, will handle the implementation together with Quintiq expertise in the Kuala Lumpur development center.

Rio Tinto sees bright future in China

Ottawa Citizen, Canada - 29-Oct-2008

The effects of the current financial crises ''will dissipate over time'' while the industrialization of China - now taking a breather - will contribute to a renewed demand for such commodities as aluminum, the CEO of mining giant Rio Tinto said yesterday.

The near-term slowdown of growth in China is largely because of its government's tightening of monetary policy to tackle inflation, Tom Albanese told a Board of Trade of Metropolitan Montreal luncheon yesterday. But longer-term growth will be driven by its domestic economy and fuelled by industrialization and urbanization, he said.

"We believe the China phenomenon is sustainable and that it will outlast the cyclical impacts of the mature and troubled financial centres," said Albanese in a speech delivered 368 days after the global giant acquired Montreal-based Alcan in a record-setting deal.

In a nod to that anniversary, Albanese untied $22 million U.S. yesterday for Rio Tinto Alcan's ongoing project in Quebec's Saguenay region. That money will be used to build a 225-megawatt high-efficiency turbine at the Shipshaw power station. He also announced that Rio Tinto Alcan will be the title sponsor of Montreal's self-service bicycle-rental system to be offered next April.

Demand for key Rio Tinto products will increase as hundreds of millions of Chinese move to cities, said Albanese, who used aluminum as an example. Current per-capita consumption of the lightweight metal in China is about nine kilos, compared with about 20 kilos in such countries as Taiwan and South Korea. If China were to reach a similar level of consumption, it would require an additional 13 to 15 tonnes of aluminum per year, or the equivalent of 38 per cent of today's total world demand, he said.

The Chinese economy ''has paused for breath,'' Albanese told business leaders, adding that longer-term growth will be sustained in large part by China, India and other emerging markets.

Global demand for such Rio Tinto products as seaborne iron ore, copper and aluminum is expected to double by 2022, he said.

''If we look past 2010, we see all of the same economic drivers driving metal consumption that we would have seen earlier this year,'' he later told reporters.

Rio Tinto, which last year spent $38.1 billion U.S. in cash to acquire Alcan, is now battling a takeover bid by BHP Billiton, contending that the all-share offer from its competitor is too low.

''The fact remains that BHP Billiton needs Rio Tinto, while the reverse is not true,'' Albanese said.

Despite the current financial crises, Rio Tinto Alcan's $1.8-billion project for Quebec's Saguenay region and its project in Kitimat, B.C., are on track, Dick Evans, the head of Rio Tinto Alcan, told reporters.

Earlier this month, the company announced a $300-million investment to advance the planned modernization of the Kitimat smelter.

''The good news is that these big projects are staying alive and moving along, and we are doing work with substantial activity during a period when much of the (mining and metals) industry is just dead in the water,'' Evans said.

Meanwhile, Saguenay project gets another $22M

But those projects are subject to a company-wide review of capital spending, both executives said.

''We are doing what is prudent today to keep things on a critical path,'' Evans said. ''None of us know how quickly (markets are) going to recover, but we think we are best positioned relative to our competitors to continue more work than they are during this period and to accelerate it when the outlook is more clear.''

Rio Tinto Alcan has started to gradually reduce production at its highest-cost smelters, one in China and one in Britain, Evans said. But all of its Canadian operations are running ''full-out.''

'All of our Canadian operations are cash-flow positive and some are strongly cash-flow positive even in today's low prices,'' he said.

In December 2006, Alcan said that it would invest more than $1.8 million U.S. in the Saguenay region in a controversial deal that was linked to its access to low-cost hydro-electric power from Hydro-Québec.

The centrepiece of the Saguenay enhancement is a $550-million pilot plant at its Jonquière site to develop the company's proprietary AP50 smelting technology.

As of yesterday, Rio Tinto has committed more than $430 million U.S. to the AP50 pilot project, Albanese said.

© The Gazette (Montreal) 2008

BHP must adjust, hints Rio

The Age, Australia - October 30, 2008

Barry FitzGerald

BHP BILLITON has been accused by its takeover target Rio Tinto of wearing rose-coloured glasses by refusing to acknowledge the need for production cutbacks in response to the global economic slowdown.

Rio managing director Tom Albanese did not name BHP in a hard-hitting speech in Montreal but it was clear who the message was directed at as, among the mining majors, BHP stands out with its "business as usual" statements.

"Those that don't review programs will stand out in not announcing any adjustments, but to think that anyone is immune from this near-term market outlook is simply not credible," Mr Albanese said.

"This is not an environment to be wearing rose-coloured glasses. I believe that Rio Tinto's position of providing clear and open guidance is the best policy in today's environment."

Rio recently said it could curtail aluminium production and would be reviewing the pace of its capital expenditure on new projects in light of the global economic slowdown.

But BHP has argued it is in a unique position, because of its financial strength and oil earnings, to keep investing through the cycle. BHP managing director Marius Kloppers has also told antitrust regulators that the takeover bid is about delivering more product, more quickly. Production cuts or supply constraints are not what the European Commission's antitrust arm would want to be hearing ahead of its January 15 decision on BHP's clearance to proceed.

As it is, BHP yesterday confirmed it would not proceed with a bauxite project in Suriname and was planning to quit its alumina refinery joint venture in the country with the Alcoa/Alumina AWAC joint venture.

The decision was based on an analysis that the risk/reward balance of the project did not stack up. Rio's focus on BHP not budging on its expansion and investment plans is with the group's new Ravensthorpe nickel mine in Western Australia.

Its focus has legitimacy because BHP's takeover bid is scrip-only, on a 3.4-for-1 basis. BHP hosted a touring party of 33 analysts at the loss-making operation yesterday.

In a slide presentation lodged with the exchange, BHP confirmed that the 50,000 tonne-a-year project was likely to take until mid-2010 to reach nameplate capacity. At current annualised production rates of about 16,000 tonnes of contained nickel, the operation would be struggling under the weight of depressed nickel prices, higher input costs and problems with scaling in pipework.

That has raised questions about whether in a non-Rio bid environment, BHP might have moved to mothball the $US2.2 billion project.

The reporter owns BHP shares. http://www.kitcometals.com/kitco

BHP Billiton exits bauxite venture

Sydney Morning Herald, Australia - October 30, 2008

Jamie Freed

BHP Billiton has cancelled a proposed $US727 million ($1.12 billion) bauxite project in Suriname and has made plans to exit its alumina refinery joint venture in the South American nation when its present bauxite source runs out in 2010.

The company said the decision was not related to the recent downturn in the aluminium market, which has forced rivals such as Rio Tinto and Alcoa to review their investment plans.

"Our decision to discontinue the Bakhuis project [is] based on the risk/reward balance of that particular project," said a BHP spokesman, Peter Ogden. "We remain fully committed to our investment pipeline."

BHP holds a 45 per cent stake in a Suriname refinery majority-owned by the Alcoa World Alumina & Chemicals joint venture between Alcoa and Alumina.

BHP had been conducting a feasibility study on the Bakhuis project independently of AWAC, which plans to source its own bauxite in Suriname when the present supply runs out. Bakhuis would have produced 6.9 million tonnes a year, starting in the first half of 2010.

Alumina's chief financial officer, Ken Dean, said yesterday that he had not yet discussed plans for Suriname with BHP or Alcoa since BHP had decided to exit the country.

He said AWAC planned to access new bauxite sources in Suriname. Barring that, it might be possible to import bauxite from elsewhere to feed the 2.2 million tonne a year refinery. Alcoa has operated in Suriname for 92 years.

Mr Dean said the Suriname refinery is profitable at today's prices and sits in the middle of the global alumina cost curve. That means it is cheaper to operate than AWAC's Point Comfort refinery in Texas, which last week shut capacity due to falling prices, but more expensive than its lower-cost refineries in Western Australia.

In a prospectus for a rights issue to help cover capital cost blowouts at a project in Brazil, Alumina said construction of a new bauxite mine in Suriname was likely to require "significant capital expenditure" in 2010.

BHP said it would review all options for its stake in the refinery. It is understood negotiations with the Suriname Government broke down earlier this month. A report from Suriname said possible purchasers of the stake included the Swiss commodities trader Glencore and the Chinese aluminium producer Chalco.

Chinese aluminum smelters call for export tax rebate on aluminum profile

Interfax China, China - October 30.2008

Shanghai. October 30. INTERFAX-CHINA - Chinese aluminum smelters, struggling with shrinking demand and tight profit margins, called on the government for help through measures including an export tax rebate for aluminum profile at a routine meeting held by the China Nonferrous Metals Industry Association (CNMIA), an official told Interfax on Oct. 29.

Alcoa Warrick Operations will lay off about 100

Evansville Courier & Press, IN - October 30, 2008

By Jimmy Nesbitt (Contact)

Alcoa Warrick Operations is laying off about 100 people, citing an unprecedented drop in aluminum prices and a number of other financial issues.

The layoffs were announced Thursday. They include contractors, salaried and hourly workers, said Kevin Lowery, Alcoa's director of corporate communications.

The positions will be cut over the next year.

"Some will be achieved through attrition," Lowery said.

The layoffs are part of a companywide initiative to reduce costs, conserve cash and adjust and align production with current demand. A sharp decline in aluminum prices has happened as market demand for aluminum softened, according to a press release from the company. The company also is struggling with high input costs and the ongoing financial and credit crisis that is affecting businesses worldwide.

Lowery said he couldn't predict whether there would be additional jobs cuts.

"It's difficult to say what's going to happen with the global economic environment," he said.

The price of aluminum on the London Metal Exchange has fallen from $3,300 a ton in July to $2,150 a ton. The drop in prices during the third quarter of this year was among the largest declines in industry history, according to the release.

"It is projected that as a result of the high costs and low metal price, more than one-third of all smelters in the world are losing money," according to the release.

Alcoa recently shut down a smelter in Rockdale, Texas, that wasn't profitable because of overall market conditions.

"The longer term view on aluminum continues to be strong with consumption of aluminum still projected to nearly double by the year 2017," according to the release. "However, the short-term situation for many smelters in the world is one of survival."

The Warrick County plant employs about 2,150 people and began operations in 1960. Lowery noted that Alcoa recently celebrated its 120th anniversary and plans to continue to have a strong presence in Warrick County.

"We want to be there for another 120 years," he said.

ALCOA to lay off 114 at Tennessee Operations

Maryville Daily Times, TN - October 30, 2008

By Robert Norris

After weeks of speculation about the future of jobs at ALCOA Tennessee Operations, employees learned today the company is laying off "approximately" 114 hourly, salaried and contractor workers.

Kevin Lowery, spokesman for the Pittsburgh-based aluminum company, said the job reductions were due to world-wide conditions in the industry.

"There’s been unprecedented drop in aluminum prices in a relatively short period. That drop, combined with the fact that the cost to make aluminum has not come down — that’s not a sustainable operation," he said.

In July, aluminum prices on the London Metal Exchange (LME) were approximately $3,300 a ton. Today, the price of aluminum on the LME is approximately $2,150 a ton, according to the company.

The layoffs further reduce employment at the Blount County operation that at one time was the largest aluminum manufacturing facility in the world and employed 12,000 people, about 10 times more than currently work at the South Plant smelter and the North Plant rolling mill.

"A third, if not more, of all the aluminum smelters in the world are losing money," Lowery said. "We said back in the beginning of the month that we had targeted reductions to reduce costs and were exploring ways to align production with demand."

The cuts are to be phased in over a year’s time, some through attrition.

Alcoa's Wenatchee Works smelter will lay off 29 employees,

in what a company official says is part of a national effort to cuts costs.

KPQ, WA - October 30, 2008

Alcoa company spokesman Kevin Lowery, speaking from the company's Pittsburgh offices, says employees were informed of the decision today. He says reduced demand for aluminum played a major factor in the decision.

Lowery says the layoffs will include contractors, salaried and hourly employees. Alcoa's Wenatchee Works has about 400 workers. Lowery says the plant still figures prominently in the company's plans. The Wenatchee Works smelter operates two "pot" lines and expects to open a third production line after a new long-term contract with the Chelan County PUD takes effect in 2011.

Intalco trims jobs as metal price falls

Bellingham Herald, WA - October 30, 2008

JOHN STARK

Citing a plunge in world aluminum prices because of weakening demand, Alcoa Inc. has announced some layoffs at Alcoa Intalco Works as part of a company-wide cost-cutting effort.

Kevin Lowery, spokesman at the company's Pittsburgh headquarters, said the Intalco job cuts would affect fewer than 50 workers. About half of the job losses will affect workers employed by firms who do contract work at the smelter west of Ferndale.

Some of those losing their jobs will be Intalco's hourly wage production workers, while others will be salaried staff. The cuts were announced to workers Thursday, Oct. 30, but as of that afternoon, the individuals affected had not been notified, Lowery said. He declined to give further details.

Until now, Intalco has employed about 660 people.

Just last July, Lowery said, aluminum sold for $3,300 a ton. Today the price is $2,150 - a drop that he termed "unprecedented."

The company is cutting jobs as a last resort after other cost-cutting measures failed to bring costs and revenues into line.

"What we're talking about here is trying to secure the future of the operations," Lowery said. "We had to go to the people side of it, which is something you try to do last."

While the price of metal has fallen, the price of power has not, Lowery noted. Industry experts estimate that about one-third of the world's aluminum smelters are unprofitable to operate under present conditions. Lowery said the company does not disclose information about the profitability of Intalco or other individual smelters.

He did note that earlier this year, Alcoa shut down its smelter in Rockdale, Texas, because of power issues.

"The longer-term view on aluminum continues to be strong - with consumption of aluminum still projected to nearly double by the year 2017," Lowery wrote in a prepared statement. "However, the short situation for many smelters in the world is one of survival."

The layoff announcement comes three weeks after the company announced a tentative long-term power supply deal with the Bonneville Power Administration that was billed as giving the local smelter much-improved prospects for survival over the next 20 years.

Alcoa plans layoffs at Massena plants

News 10 Now, NY - 10/30/2008

MASSENA, NY-- Alcoa is cutting jobs at its Massena locations.

Alcoa spokesperson Kevin Lowery tells News 10 Now that as many as 35 hourly and 15 salaried workers at Alcoa's West plant and 25 hourly and 20 salaried workers at the East plant could be layed-off.

Lowry cites falling aluminum prices as the reason for the layoffs. He says fewer than 100 people total at both plants will be affected.

Layoffs will happen over the next 12 months.

Alcoa Inc. cutting 115 Blount County jobs

Knoxville News Sentinel, TN - October 30, 2008

By Roger Harris

Aluminum maker Alcoa Inc. said today it is cutting 115 jobs at its Blount County smelter operation.

The Pittsburgh-based company said the job cuts are part of a corporatewide effort to reduce costs in the face of plummeting aluminum prices.

Employees were told of the job cuts earlier today, Alcoa spokesman Kevin Lowery said.

Hourly and salaried workers as well as contractors will be affected by the cuts, which will be phased in over the next 12 months.

Some of the jobs will be eliminated through attrition, Lowery said. Severance pay will be provided to workers who are laid off.

Alcoa’s Blount County operation currently employs about 1,250 workers who produce sheet aluminum for the beverage can industry.

Aluminum prices have fallen from about $3,300 per ton in July to about $2,100 today.

"That kind of a drop is unprecedented… and we need to take some of our cost reduction efforts to the next step," Lowery said.