AluNews - June 2009

Century Aluminum lets 31 more Hawesville pots idle

Reuters - Tue Jun 2, 2009

NEW YORK, June 2 (Reuters) - Century Aluminum Co (CENX.O) delayed repairing 31 damaged pots at its Hawesville, Kentucky primary aluminum smelter in order to manage production in the current economic downturn, a company spokesman said.

Under normal operating conditions a pot will go out every couple of years, he said. But Century has been slow to repair damaged pots as a way to control production levels.

"What we have done is a prudent way of managing our production in this environment. We have just been slow to repair the pots. This is normal operating procedure," he said.

Hawesville's near 250,000 tonne-per-year aluminum smelter has five potlines, each with 112 pots, but only four are currently running.

In March, the Hawesville plant closed one potline, cutting 4,370 tonnes of monthly output, or about 52,400 tonnes a year, to reduce the aluminum producer's significant cash losses in the face of depressed global aluminum prices and demand.

The cuts affected 120 employees, 10 or whom were laid off last Thursday, the spokesman for the Monterey, California-based aluminum producer said on Tuesday.

In April, Century Chief Executive Logan Kruger said the company may cut smelter output further amid excess supply that was keeping prices below many producer's cash costs.

When Century announced the Hawesville cuts in March, it also said its smelter was negotiating an "unwind" of its current power contract.

Late last week, its Century Aluminum of Kentucky subsidiary said it was unable to move forward on a proposed long-term power contract for Hawesville.

Significant weakness in both aluminum prices and wholesale electric prices prevented the two sides from reaching a deal.

"We have a contract that expires at the end of 2010," the spokesman told Reuters, adding that Century was working to extend that power contract.

"The unwind would have given us a contract that would have extended our energy supply through 2023. So, this does not hinder our near-term ability to operate," he said.

Century, along with Western Kentucky Energy (a subsidiary of E.ON U.S.), Big Rivers Energy, and Rio Tinto Alcan (RIO.AX) (RIO.L), has been working for over five years to unwind an existing contract between Big Rivers and Western Kentucky Energy, it said. The proposed agreement would provide long-term and affordable power to the two smelters in western Kentucky.

The aluminum producer said the new contract might support Hawesville's viability over the long-term, but its take-or-pay requirement could create short-term financial hardship.

"Regrettably, after discussions with WKE and Big Rivers over the past several weeks, we could not find a solution for mitigating the risk. We will continue to work diligently to secure a long-term power agreement that satisfies the needs of all western Kentucky constituents," said Hawesville vice president and plant manager Matt Powell. (Reporting by Carole Vaporean; Editing by John Picinich

Dak Nong begins bauxite mining

SGGP - Tue Jun 2, 2009

The public are keeping a keen eye on Nhan Co, the largest ever bauxite mine in Vietnam, which has just begun in Dak Nong Province. The project is expected to produce 650,000 tons of aluminum a year. SGGP paid a visit to the site to give readers a close up of the mine’s initial stage of production.

Read the full article at: http://www.saigon-gpdaily.com.vn/National/2009/6/71269/

Kaiser Aluminum Offers a Little Help

WLAJ - June 2, 2009

A little hope for the jobless...

Michigan Works is taking applications for jobs at Kaiser Aluminum, which will open a manufacturing operation next year in Kalamazoo. Officials say 41 jobs are available over the next two weeks.

They're looking for prodcution technicians, maintenance technicians and production team leaders through Michigan Works.

Each of the jobs require a high school diploma or General Equivalency Diploma, two years of work experience in a manufacturing setting, a driver's license, the ability to lift 50 pounds, and other minimum requirements.

Bosai is delaying plans to build a $1 billion aluminum plant

eTaiwan News - Associated Press 2009-06-04

GEORGETOWN, Guyana (AP) _ A Chinese mining company says it is laying off dozens of workers at its Guyana mines as the global economic crisis slows demand for bauxite.

Chongqing-based Bosai Minerals Group says it will dismiss 32 miners in the South American country's southeastern region.

Bosai in April laid off 120 workers in Guyana, or 20 percent of its local staff.

It said it expects Wednesday's layoffs to be its last this year.

Guyana Prime Minister Sam Hinds says Bosai is also delaying plans to build a $1 billion aluminum plant in southwest Guyana. He did not say for how long.

Bosai produces calcined bauxite, an aluminum component used in industrial manufacturing.

Montenegro to Bail Out BasEl Aluminum Plant

The Moscow Times - 04 June 2009

Bloomberg

Montenegro and the Central European Aluminum Company, a subsidiary of Basic Element, reached agreement on a bailout package for Kombinat Aluminijuma Podgorica, the country's biggest exporter, Finance Minister Igor Luksic said Wednesday.

The government of Milo Djukanovic will provide guarantees for a total of 45 million euros ($64 million) to cover KAP's debt to commercial banks and a layoff plan for workers, Luksic said.

The Russian company will hand over half its holding to the government and withdraw claims for 300 million euros in damages over an alleged false evaluation of KAP's assets before the 2005 takeover of the company.

Montenegro will receive a 29 percent stake in KAP and 32 percent of the bauxite mines that are a part of the company, as well as a right to veto decisions by the board of directors.

The company's production accounts for more than 15 percent of Montenegro's gross domestic product, according to KAP's web site.

Central European Aluminum has spent more than $40 million on equipment and environmental programs since acquiring the smelter and mine in 2005 for 58 million euros and assuming 90 million euros in debt, according to KAP's web site.

Abu Dhabi aluminium smelter at halfway stage

Gasworld.com (subscription) - 03 Jun 2009,

Rob Cockerill, gasworld.com

Abu Dhabi-based Emal International has successfully completed 50% of its new $5.6bn aluminium smelter at Taweelah in Abu Dhabi, according to a senior company executive.

Middle East news agency MEED reports that the project is now 50% complete and targeting an April 2010 start-up for the plant.

Smelting is a form of extractive metallurgy used to extract pure metals from their ores. Most metal ores contain small percentages of metal atoms compounded with either oxygen as metal oxide, with sulphur as metal sulphide, or with carbon and oxygen as metal carbonate.

Compared to most other metals, it is thought to be difficult to extract aluminium from ore, such as bauxite, due to the energy required to reduce aluminium oxide (Al2O3). Aluminium oxide has a melting point of around 2,000 įC and therefore, it must be extracted by electrolysis.

Increasing throughput of existing furnaces represents a challenge for the aluminium industry.

Producers need to constantly improve process yields, cut fuel consumptions and reduce emissions of gases, such as CO2 and NOX, with low-temperature Oxyfuel combustion technology uniquely designed to meet such challenges.

Linde has pioneered the use of oxyfuel technology in the aluminium industry in recent decades and has undertaken hundreds of successful installations – only this year Linde Gases revealed an agreement to install its oxyfuel technology at Stena Aluminium’s Swedish recycled aluminium facility.

Emerging market

While large deposits of bauxite occur in Australia, Brazil, Guinea and Jamaica and the primary mining areas for the ore are in Ghana, Indonesia, Jamaica, and Russia, smelting mainly occurs in Australia, Brazil, Canada, Norway, Russia and the US.

This is owing to the fact that smelting is such an energy-intensive process. Regions boasting considerable natural gas supplies and/or ready electricity supply are fast becoming aluminium refiners as a result, with the resource-rich Middle East a rapidly emerging market for this application.

As for the impending aluminium plant in Abu Dhabi, MEED reports that Emal International has already spent approx. 69% of the capital expenditure committed to the project and has awarded $1.2bn of contracts.

The 700,000-tonnes per year smelter complex was due to have fuel gas available for power by the end of May 2009, while Emal is to connect the plant to the national power grid this month (June).

Rio Scraps Chinalco Deal for $21 Billion Offering, BHP Venture

Bloomberg - June 5, 2009

By Rebecca Keenan and Shani Raja

Rio Tinto Group, the world’s third- largest mining company, scrapped an investment from Aluminum Corp. of China in favor of raising $21 billion from a share sale and agreeing to an iron ore venture with BHP Billiton Ltd.

The new shares will be sold at 1,400 pence each, 49 percent below yesterday’s close in London, raising $15.2 billion, the company said today in a statement. Shares of Rio and BHP both surged in Sydney trading.

Today’s deals allow Rio to reduce $38.9 billion in debt without selling bonds and stakes in its largest mines to Chinalco, defusing a backlash from shareholders and politicians. The collapse of the China accord is a setback for the nation’s plan to secure supplies of materials to drive economic growth.

"The ability of Rio to put away the deal and not have to rely on Chinese financing is a huge positive in terms of the dynamics of the market today and in the future," said Tim Schroeders, who helps manage $1 billion at Pengana Capital Ltd. in Melbourne. "You could say the Chinese ability to divide and conquer producers, and to have control over the market, has been lessened."

Rio rose as much as 13 percent in Sydney for their biggest gain since November 2007. They traded at A$72.99 at 3:06 p.m. Sydney time on the Australian stock exchange. BHP rose as much as 10 percent, its biggest gain since it abandoned a hostile bid for Rio, partly because of concern over its debt levels. Rio will cut its debt to about $23.2 billion, the company said today.

‘Wrong Deal’

The deal Rio Chief Executive Officer Tom Albanese, 51, brokered with Chinalco, as the Chinese company is known, was criticized by Legal & General Group Plc, the third-largest investor, and the Association of British Insurers, for not giving them the option to participate in the fund-raising. His Chinalco accord also spurred a Senate inquiry in Australia.

"The Chinalco deal was wrong in a strategic sense," said Prasad Patkar, who helps manage about $1 billion at Platypus Asset Management in Sydney. "The market was right in marking the management and board down for trying to jam it down shareholders’ throats. But you have to give Rio’s new Chairman Jan Du Plessis due credit for listening and pursuing alternatives."

Rio dropped the deal with Chinalco, which was agreed in February, after the improvement in financial markets, du Plessis said in a statement. "The financial terms of the Chinalco deal became markedly less valuable" and "our ability to raise a level of equity appropriate for our needs on attractive terms has improved considerably," he said.

‘Very Disappointed’

Chinalco is "very disappointed" with the failure of its investment plan, President Xiong Weiping said today in a statement. Today’s deal replaces the planned $19.5 billion investment from Chinalco, China’s biggest aluminum producer. The company, Rio’s biggest shareholder, will monitor the iron ore joint venture announced today by Rio and BHP, Xiong said.

"The global capital financial market has stabilized and individual companies now can get back to the stock market to raise equity or bonds to strengthen their balance sheets," said Winson Fong, who helps manage about $2 billion at SG Asset Management H.K. Ltd., adding that Rio’s decision won’t stop future Chinese investment overseas. "They’re no longer desperate to find strategic investors."

BHP agreed to pay Rio $5.8 billion to create the 50-50 venture, the two companies said today in a separate statement. The two companies may save more than $10 billion by combining their iron-ore assets in the Pilbara region of Western Australia, they said. The two will continue to sell their ore independently through their own marketing groups.

Falling Prices

BHP "played their hand pretty well," said Peter Arden, resource analyst at Ord Minnett Ltd., an affiliate of JPMorgan Chase & Co. "It’s a neat solution for both companies at a time of falling commodity prices. To be able to unlock this kind of value is extraordinary."

Rio and Melbourne-based BHP may supply 75 percent of China’s imports of iron ore this year, according to Goldman Sachs JBWere Pty. China is the biggest steelmaker. Brazil’s Vale SA is the largest iron ore producer. Rio last month agreed a 33 percent drop in contract prices with steelmakers in Japan and South Korea.

"While this deal has been more than 10 years in the making, I believe it has been worth the wait," Marius Kloppers, 46, chief executive officer of BHP, said on a call with reporters, adding he had initiated talks for the venture with Rio. "If we combine these we can get very, very substantial production, development and financial synergies.

A Pilbara joint venture had been studied in 1999 and was a key driver behind BHP’s hostile takeover bid for Rio, Citigroup Inc. said in a report last month. Kloppers dropped the planned acquisition in November last year, citing turmoil in global markets, slumping demand for commodities and Rio’s debt.

Deal Savings

"The synergies are there," Chris Weston, an institutional dealer at IG Markets in Melbourne said by phone. He didn’t foresee any competition concerns because BHP won approval in October last year from the Australian Competition and Consumer Commission for its hostile takeover of Rio. The regulator said the proposed acquisition wouldn’t be likely to substantially lessen competition in any market.

The cost of protecting Rio’s debt plunged. Credit-default swaps on Rio fell 125 basis points to 180 as of 11:15 a.m. in Sydney, according to National Australia Bank Ltd. The contracts, which decline as investor perceptions of credit quality improve, have fallen 82 percent since January, CMA DataVision prices show.

"Perversely the best outcome for bondholders was if the Chinalco deal failed," said Mark Bayley , an independent credit strategist based in Sydney. "A capital injection is a significant improvement for bondholders over the Chinalco convertible and asset sale option as it means there will be no additional debt."

Rio is cutting jobs and trying to sell assets to repay $10 billion of debt this year. It has total borrowings of $38.9 billion, incurred mainly through the 2007 purchase of Alcan Inc.

Earnings Decline

At $15.2 billion, the rights offering would be the second- biggest this year after HSBC Holdings Plc, which sold $18.3 billion of stock in April. Rio will offer 21 Sydney-traded shares for every 40 already held at A$28.29. That’s a discount of 57.7 percent to the last traded price, it said.

Credit Suisse Group AG, J.P. Morgan Cazenove Ltd. and Macquarie Capital Ltd. are acting as joint global coordinators on the rights issue.

Rio joins companies including Xstrata Plc, the world’s fourth-largest copper producer, that have sold $45.2 billion of stock to existing investors, data compiled by Bloomberg show.

The trading outlook for the rest of the year remains "uncertain," du Plessis said today in a letter to shareholders. It reported a 45 percent drop in first quarter earnings, down to $1.6 billion.

Under the plan announced Feb. 12, Chinalco had agreed to buy $7.2 billion of convertible debt and pay $12.3 billion for stakes in some Rio projects. Rio said today it will pay Chinalco a $195 million break fee.

To contact the reporters on this story: Rebecca Keenan in Melbourne at rkeenan5@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net.

Rio Tinto CEO Says He Still Has Support Of The Board

Trading Markets (press release) - Fri. June 05, 2009

MELBOURNE, Jun 05, 2009 (Dow Jones Commodities News via Comtex) -- RTOLY | Quote | Chart | News | PowerRating -- Rio Tinto Ltd. (RTP) Chief Executive Tom Albanese said Friday he retains the confidence of the company's board following termination of the miner's planned US$19.5 billion alliance with Aluminum Corp. of China, or Chinalco.

Some analysts believe Albanese should step down after presiding over the top-of-the-cycle purchase of Alcan, refusing to engage with BHP Billiton Ltd. (BHP.AU) on its takeover offer and then promoting an unpopular tie up with Chinalco, which has now been scuttled.

However, Albanese defended his actions during what he said was a period of unprecedented volatility and said he still has the support of the board.

Albanese said he was personally disappointed that the Chinalco deal had failed and looked forward to future engagement with the Chinese group.

"I look forward to working with Chinalco in the future, finding opportunities for mutual engagement and mutual cooperation and seeing if we can create new forms of synergies in the future," he said.

-By Alex Wilson, Dow Jones Newswires; 61-3-9292-2094; alex.wilson@dowjones.com

Columbia Falls Aluminum Factory closing

The Missoulian June 5, 2009

CFAC UPDATE: Columbia Falls Aluminum unlikely to reopen, even after recession ends

By ALLISON MAIER for the Missoulian

Columbia Falls Aluminum Co. will lay off its final 90 workers and close at the end of July, after years of financial problems.

"We don’t see right now the relief in sight that would help keep us running," said company spokesman Haley Beaudry.

A week ago, the company told its remaining employees, whose numbers have been whittled down to fewer than 90, of the impending layoffs. Under federal law, the company is required to give employees 60 days’ notice.

Beaudry said the company plans to continue production over those final two months, though a lot will depend on factors such as aluminum and electricity prices.

The layoffs aren’t much of a surprise, he said. Last summer, 124 workers were laid off. In December, the company announced plans to close in February; then a power-pricing agreement with the Bonneville Power Administration helped keep the plant open. When that announcement was made, CFAC still had nearly 200 employees.

This spring, as the recession deepened, the plant had to make more cuts, Beaudry said.

Aluminum companies nationwide are struggling to stay open because the price of raw materials continues to increase while the price of aluminum continues to fall.

That’s because some regions of the world, like the Middle East, have continued to produce large quantities of aluminum n as they enjoy low energy and commodity prices, Beaudry said. The basic rules of economics dictate that when there’s a surplus of aluminum available, the demand is low. And when demand is low, so are prices.

In recent months, the Columbia Falls plant has run at just 10 percent of capacity, with only half of one potline n in which aluminum is produced n operational. There are five potlines at the plant; a year ago, three were still in use.

Though he admits it’s a long shot, Beaudry said CFAC is looking at one final option in an attempt to prevent the plant’s closure: federal stimulus money.

The company has not made any formal move to apply for funding yet, mostly because it’s not entirely sure if it could explain how it qualifies for the money. Federal stimulus dollars have mostly been directed toward creating new jobs, Beaudry said, and CFAC wants its employees to keep their existing jobs.

In addition, Beaudry said, so many aluminum companies are struggling to remain open that Washington might not care as much about those in smaller towns.

"The number of jobs lost in Montana is tiny compared to the number of jobs lost in, say, Detroit," he said.

Which leads him back to the conclusion that there’s really not much the plant can do to remain open longer than this summer.

"I can’t say that there is any light at the end of the tunnel," he said.

Allison Maier is a senior studying print journalism at the University of Montana who is interning at the Missoulian this summer. She can be reached at 523-5241 or by e-mail at allison.maier@lee.net.

Putin Visits Town, Scolds Authorities

Wall Street Journal - Jun 4, 2009

By ANDREW OSBORN

MOSCOW -- Prime Minister Vladimir Putin visited a town ravaged by the global downturn and blamed one of Russia's most prominent tycoons, Oleg Deripaska, as well as local officials for its dismal condition.

In the visit -- much of which was broadcast on state television -- the prime minister cast himself as Russia's crisis-manager-in-chief, aiming to pacify the inhabitants of Pikalyovo and ensure the town's problems don't spread elsewhere.

Some political analysts said the visit was a powerful signal to other businessmen and regional officials to keep a lid on social discontent. Russia has hundreds of towns that rely on one or two factories for survival.

Pikalyovo, a Soviet-era town 130 miles southeast of St. Petersburg, has been in turmoil since the start of the year when the three factories that employ about one-fifth of its 21,000-strong population closed.

The biggest of the three factories, OOO Baselcement, is owned by Mr. Deripaska, who controls a sprawling, highly indebted conglomerate that ranges from industrial metals to construction.

Yevgeny Ivanov, a senior executive in Mr. Deripaska's conglomerate, said the Baselcement factory would restart production by month's end, producing alumina, used in the manufacture of aluminum, and cement. A person close to Mr. Deripaska said the tycoon was disappointed the situation had become so serious.

The other two factories are Pikalyevsky Cement, owned by OAO Eurocement Group, and Metakhim, owned by OOO U.K. Sevzapprom. During the Soviet era, and until five years ago, the three factories were part of one giant state enterprise and their supply chains and fortunes remain closely intertwined. That interlinked chain collapsed as the downturn set in and prices and demand for commodities tumbled.

Last month, Pikalyovo's situation turned even more grim, when the town's main utility -- a company owned and controlled by Baselcement -- shut off hot water and heating to the town because of unpaid bills.

Mr. Putin didn't name Mr. Deripaska when subjecting him and the owners of the two smaller factories to a public dressing down. "You made thousands of people hostages to your ambitions, to your unprofessionalism, and, maybe, simply to your greed," Mr. Putin told them in an emergency meeting. "Where is business's social responsibility?" he asked them. "It's absolutely unacceptable."

Mr. Deripaska, once estimated to be Russia's richest man and now fighting to save his businesses from creditors, stared at the floor as Mr. Putin spoke.

Mr. Putin demanded that Mr. Deripaska sign a contract with a supplier aimed at restarting the Pikalyovo plant.

Mr. Putin chided local officials, saying they had scurried around before his visit when they should have solved the town's problems long ago.

He ordered workers' unpaid back wages settled by day's end, and said the government would force the three factories to combine into one as they were in Soviet times. He said the factory owners had a short time to agree before the government intervened.

Pikalyovo's idled workers have become increasingly militant in recent months, culminating in a protest Tuesday that blocked a busy highway, backing up traffic for more than 200 miles. Mr. Putin condemned that action, saying it was illegal and that similar actions won't be tolerated, regardless of the circumstances.

Svetlana Andreyeva, a Baselcement spokeswoman, said Mr. Putin's criticism wasn't aimed specifically at Mr. Deripaska. Mr. Putin "perfectly understands what's going on," she said. "Our company has become a hostage of the situation." Baselcement blames the owners of the two other factories for the crisis. They deny they are to

Chinalco breakup to cost Rio Tinto USD 1 billion - Report

SteelGuru - Monday, 08 Jun 2009

The Observer reported that Rio Tinto has run up a bill of about USD 1 billion after it scrapped an investment from Aluminum Corp of China in favor of a rights offer.

As per report the mining company has racked up at least USD 300 million in adviser fees for the aborted deal as well as a USD 195 million break fee. Rio will also have to pay more than USD 400 million to banks underwriting the offer.

(Sourced from Bloomberg)

CFAC negotiates for lower electricity rates with hopes of reopening

The Missoulian June 8, 2009

By ALLISON MAIER

Though the Columbia Falls Aluminum Co. plans to stop production at the end of July, the company will continue to negotiate with Bonneville Power Administration, hoping that the plant can reopen in the future, spokesperson Haley Beaudry said Monday.

"In our mind, this is not a shutdown," Beaudry said. "This is a curtail on production right now."

Two weeks ago, Columbia Falls gave its remaining employees, which now amount to fewer than 90, notice that the plant would close in 60 days for financial reasons.

The plant had announced plans to close back in December; then a deal with Bonneville Power kept it operating longer. Beaudry said the company again was on the verge of stopping production earlier this spring, but was able to extend that period through part of the summer.

Currently, Bonneville is in the process of setting electricity rates for the next two federal fiscal years n starting this September and continuing through September 2011. The agency is in the midst of a lawsuit brought by various companies in the Northwest who say its rates are too high. Columbia Falls is part of the suit and will continue its involvement, Beaudry said.

Beaudry said the aluminum company will negotiate diligently with Bonneville for as long as it takes to reach a deal on electricity rates. Bonneville spokesperson Nanine Alexander would not give any details about current negotiations between the power agency and Columbia Falls, but said Friday that, in general, the administration is working with all of its customers to keep rates as low as possible.

Kaiser Aluminum Announces Appointments to the Board of Directors

GlobeNewsWire (press release) - June 8, 2009

FOOTHILL RANCH, Calif., June 8, 2009 (GLOBE NEWSWIRE) -- Kaiser Aluminum (Nasdaq:KALU) today announced that David Foster was elected to its board of directors at the annual Shareholders' Meeting on June 2, 2009, along with incumbents, Teresa A. Hopp and William F. Murdy . Mr. Foster's election fills the position of retiring director Carl B. Frankel. He will serve on the nominating and corporate governance committee. Mr. Frankel was appointed director emeritus and will continue to serve as an advisor to the board for a two year term.

"David Foster has been a strong supporter of Kaiser Aluminum and I am pleased to welcome him to our board of directors. In addition, the directors and I extend our appreciation to Carl Frankel for his time as an active member of the board. He has been a valued member these past three years and we look forward to his continued contribution in an advisory role," said Jack A. Hockema, President, CEO and Chairman.

Mr. Foster has been the executive director of Blue Green Alliance, a strategic national partnership between labor unions and environmental organizations to expand the job-creating potential of the green economy and improve the rights of workers at home and around the world. Prior to joining Blue Green Alliance, he was a district director of the USW. Mr. Foster is an adjunct faculty member of the University of Minnesota and a member of the board of directors of Evraz North America.

Kaiser Aluminum Corporation, headquartered in Foothill Ranch, Calif., is a leading producer of fabricated aluminum products, serving customers worldwide with highly-engineered solutions for aerospace and high-strength, general engineering, and custom automotive and industrial applications. The Company's North American facilities produce value-added sheet, plate, extrusions, forgings, rod, bar and tube products, adhering to traditions of quality, innovation and service that have been key components of our culture since the Company was founded in 1946. The Company's stock is included in the Russell 2000(r) index. For more information, please visit www.kaiseraluminum.com.

Six Japanese cos to quit Venezuela aluminum ops -Nikkei

Reuters - Tue Jun 9, 2009

Six Japanese firms, including Kobe Steel Ltd (5406.T) and Showa Denko (4004.T), have decided to quit aluminum smelting operations in Venezuela due to a dispute over prices with the Venezuelan government, their joint venture partner, the Nikkei business daily reported.

The group of firms -- which also include Japanese trading firm Marubeni Corp (8002.T), Sumitomo Chemical Co (4005.T), Mitsubishi Materials Corp (5711.T) and Mitsubishi Aluminum Co -- have a combined 20 percent stake in CVG Industria Venezolana de Aluminio C.A., commonly known as CVG Venalum.

A Venalum spokesman said he had no information on any decision by the venture's Japanese partners.

CVG Venalum mines bauxite and extracts aluminum from this ore. Every year it ships 90,000 tons to 160,000 tons to Japan for processing, accounting for 5 percent to 10 percent of Japanese demand.

The Japanese firms recently notified the Venezuelan side that they plan to withdraw from the joint venture and sell their shares, and the Venezuelan government has agreed to this in principle, the daily said.

The purchase price for the stake held by the firms is estimated at more than 50 billion yen ($509.9 million), the paper added.

Since 2004, the Venezuelan government had sought to raise prices for aluminum shipped to Japan to a level higher than international prices. Because the parties were unable to reach an agreement, exports to Japan were suspended last year, the report said. ($198.06 Yen) (Reporting by Chakradhar Adusumilli in Bangalore; Editing by Vinu Pilakkott)

Novelis Appoints Tadeu Nardocci to Lead European Operations

PR Newswire (press release) - Tue Jun 9, 2009

ATLANTA, June 9 /PRNewswire/ -- Novelis Inc. today announced that Antonio Tadeu Coelho Nardocci has been appointed President, Novelis Europe, effectively immediately. Mr. Nardocci succeeds Arnaud de Weert who has left the company to pursue other interests.

Mr. Nardocci had been Senior Vice President - Innovation, Technology and Strategy for Novelis since 2008. Previously, he was Senior Vice President and President of Novelis South America, the company's operating segment in Brazil, since 2005.

Mr. Nardocci has a strong track record in the aluminum industry. Prior to Novelis, he held a number of manufacturing and senior leadership positions with Alcan Inc. from 1980 to 2004, including Managing Director of the company's Southeast Asian business and President of Alcan Brazil Rolled Products.

In his new role, Mr. Nardocci will lead Novelis' extensive manufacturing and sales activities in Europe, which includes a network of 13 operating locations. Novelis is the leading producer of aluminum sheet and foil in Europe and is the region's largest recycler of aluminum beverage cans. The company also operates three European technology centers involved in product development.

"With his international management experience, deep technical knowledge and excellent customer relations skills, Tadeu is an ideal choice to advance our business objectives in Europe," said Phil Martens, President and Chief Operating Officer.

A native of Sao Paulo, Brazil, Mr. Nardocci holds a metallurgy degree from the University of Sao Paulo and has completed post-graduate programs in business administration in Brazil, Europe and the United States.

U.S. aluminum purchases dropped 21% in the first quarter

Purchasing.com - Tue Jun 9, 2009

Analyst suggests pickup will become evident in second half

By Tom Stundza -- Purchasing, 6/9/2009 11:01:00 AM

Demand of aluminum mill products has dropped 21.3% on an annualized basis in the first quarter, Purchasing.com has calculated from Aluminum Association data. The statistics show first quarter mill-product shipments of 2,985,000 lb minus exports of 252,900 lb plus imports of 332,700 lb. That totals 3,065,000 lb, which compares with 3,894,000 in the year-ago first quarter.

Aluminum Association data shows that sheet, foil and plate shipments all have dropped in excess of 20% from last year’s first quarter while extruded products are down 37% and electric wire and cable has slipped by almost 6%. New order bookings in the first four months of this year are indexed at 73.08 (100 2007), which compares with 101.75 through April of last year, a decline of 28.2%.

Paul Williams of CRU Group writes for Aluminum Association members that the global aluminum market may have hit bottom in early June but adds there still is a huge 444,000 metric ton (490 billion lb) stockpile of excess metal overhanging the market.

"CRU does believe the worst of the demand slump is over, although any global economic recovery will be fragile and bumpy, and no more so than in the U.S.," he writes. "Even with demand recovering from its first half nadir, we still expect global demand to fall by 11% this year."

Nalco to double capacity by 2014

Daily News & Analysis - Tuesday, June 9, 2009

Rajesh Kumar Singh

New Delhi: National Aluminium Co Ltd (Nalco) has prepared a five-year roadmap for growth, aiming to increase capacities of alumina, aluminium and captive power production by as much as two fold, a senior official familiar with the company's plans said. "The plan is to achieve aluminium smelting capacity of 1 million tonne per year, alumina capacity of 3 million tonnes and power production capacity of 2,500 mw by 2014," the official said.

The state-owned company currently has aluminium making capacity of 402,000 tonnes per year, which includes 50% of the ongoing expansion of the existing factories. Post expansion, which is due to be completed by September, Nalco's smelting capacity will reach 460,000 tonnes per year.

The company is expanding the capacity of alumina--a raw material derived from bauxite to be processed into aluminium--to 2.1 million tonnes from the present 1.58 million tonnes. Captive power capacity of the company will reach 1,200 mw at the end of the current expansion programme. "The ongoing expansion programme is almost over. We are now discussing the longer-term growth plan, either in India or overseas," the official said.

The expansion plan is expected to cost Rs 20,000 crore, a sizeable portion of which will be raised from the market, either in the form of debt or equity. "We have an investible surplus of Rs 3,000 crore. In due course, we hope to accumulate another Rs 3,000 crore," the official said.

Aluminium the base for Chinalco, Rio

The Age - June 9, 2009

Barry FitzGerald

ANALYST attention is turning towards the potential for Rio Tinto and China's state-owned Chinalco to mend fences by proceeding with a deal on Rio's Queensland aluminium operations.

Much of the fallout from Rio's decision to walk away from Chinalco's $US19.5 billion ($A24.6 billion) refinancing deal last week has focused on BHP Billiton replacing Chinalco as Rio's preferred partner in Pilbara iron ore. But as one industry analyst pointed out yesterday, people seem to be forgetting that Chinalco is ostensibly an aluminium group.

In the now-dead Chinalco deal, the Chinese were to spend $US2.15 billion to acquire key stakes in Rio's Weipa (bauxite), Yarwun (alumina) and Boyne Island (aluminium) operations. It was also meant to acquire a $US5.1 million stake in Rio's Hamersley iron ore unit - the commodity in which BHP has gone one better by moving into a 50:50 joint venture with Rio for all their Pilbara interests for $US5.8 billion.

Analysts argue that given Chinalco's continuing 9 per cent shareholding in Rio and Chinalco's aluminium heritage, the prospect of high-level discussions on Rio and Chinalco setting out to come up with a revised Queensland deal are strong. Apart from anything else, it would "de-weight" Rio's overexposed position to the light metal following the disastrous 2007 Alcan acquisition.

China has become the world's biggest aluminium producer but suffers a high-cost status because of low-quality bauxite reserves. Securing a foothold in Rio's Weipa bauxite and alumina operations was one of Chinalco's motivations in pursuing the original Rio refinancing deal. The deal would also have allowed the pair to control the Weipa resource in much the same way as Rio and BHP plan to with iron ore in the Pilbara. Weipa ranks as a world-class resource as much as Pilbara does in iron ore.

Meanwhile, BHP managing director Marius Kloppers has told analysts that BHP's interest with Rio does not stop in the Pilbara. He raised the prospect of more joint ventures in regions where both companies were active. The pair are already joint venturers in Escondida copper in Chile, and the RBM minerals operation in South Africa.

PM on smelter matter

Power102fm Trinidad & Tobago - 10-Jun-2009

By: Dennis James.

Prime Minister Patrick Manning does not believe the majority of people from La Brea and environs are opposed to the construction of the aluminum smelter plant.

Mr. Manning made the comment while speaking to reporters after the sod –turning ceremony this morning of a power plant being built to fuel the controversial project.

Those oppose to the move have cited concerns about health and environmental issues.

However, the government has insisted the necessary approvals are being met and the project will comply with stringent requirements.

Questioned on today’s demonstration leading to the Union Industrial Estate, Mr. Manning said many of those speaking out on the initiative are not residents of the community.

The Prime Minister said concerns about local employment on the project have been addressed by officials and assured that the workforce is dominated by nationals.

Prime Minister Patrick Manning

Meanwhile, one of the protestors said the time had come for citizens to speak out on matters of concern to them and not to take things for granted.

He said the smelter issue is one which demands this kind of attitude.

Vietnam farmers fall to bauxite bulldozers

SteelGuru - Friday, 12 Jun 2009

Asia times reported that a plan to mine bauxite deposits in Vietnam's Central Highlands and whose opponents include famed general Mr Vo Nguyen Giap has provoked dissent even in the companies involved while already tearing up the livelihoods of tea and coffee farmers in nearby towns.

The state controlled Tuoi Tre newspaper has said that "Hills that used to be plantations of tea have already been bulldozed into a 50 hectare site to locate the bauxite project."

Tuoi Tre said that "The same thing has happened to the coffee hills in Dak Nong province but on a larger scale the construction site may stretch to 200 hectares."

The government's plan to mine bauxite for the production of aluminum has resulted in an outpouring of concern on the part of Vietnamese environmentalists and scientists.

Recently, Mr Nguyen Tan Dung PM of Vietnam called for a thorough review of bauxite mining projects and a look at ways to better monitor its impact and ensure that environmental standards are followed.

(Sourced from Asia times.com)

Rio Tinto Says Aluminum Demand to Fall 12% This Year

Bloomberg 11-Jun-2009

By Matthew Craze

Global aluminum demand will fall 12 percent this year to 33.5 million tons because of a slump in housing starts and car purchases, said Carmine Nappi, a director of industry analysis at Rio Tinto Group.

Builders and automakers stopped buying metal earlier this year because of a slump in demand, Nappi said today at a seminar in Santiago. Aluminum demand fell 25 percent in March from the year-earlier period, he said.

Rio acquired Canada’s Alcan Inc. in 2007 for $38.1 billion to create the world’s largest maker of aluminum, and its base ingredient bauxite. A recovery in global industrial production would stem declines in aluminum prices that have fallen 43 percent in the past 12 months.

"The market is recovering," Nappi said. "There has been some turning point."

U.S. industrial production "will reach a trough in the next month or two" Nappi said. Demand in China started to recover since February and is the only part of the world where it isn’t contracting, he said.

Global demand in 2010 will increase 16 percent to 38.7 million tons, he said. Demand peaked in the second quarter of 2008 at an annualized rate of 40 million tons, he said.

To contact the reporter on this story: Matthew Craze in Santiago at mcraze@bloomberg.net.

GE inks $500M in power generation deals in Bahrain

Forbes - 06.11.09

By ADAM SCHRECK

DUBAI, United Arab Emirates -- General Electric Co. said Thursday it has signed over $500 million worth of contracts to supply equipment for what will become the biggest power plant in the Persian Gulf kingdom of Bahrain.

The deal reflects the Fairfield, Connecticut-based conglomerate's increased focus on the Middle East, where demand for electrical power is expanding rapidly as its population and infrastructure boom.

Under the terms of the deal, GE will provide equipment and long-term service to the Al Dur Independent Water and Power Project, which is slated to eventually produce 1,250 megawatts of power. That equals 30 percent of the country's existing power output.

"Al Dur is one of the most significant energy projects ever undertaken in Bahrain, and is needed to help meet the country's increasing demand for electricity and water," said Fahmi Bin Ali Aljowder, minister of works and the minister in charge of the electricity and water authority.

The contracts cover two steam turbines and four gas turbines. GE will maintain the turbines under a 20-year service agreement.

Al Dur is located along Bahrain's southeastern coast. The facility will also produce about 58 million gallons of desalinated water per day.

"The project is an example of the growing trend toward the integration of water and power production at a single site, especially in the Middle East where population and industrial growth rates exceed many other regions of the world," Joseph Anis, GE Energy's regional head, said in a statement.

The deal comes little more than a week after GE announced the opening of a new office and technology center in the tiny Persian Gulf island nation, which maintains close ties the U.S. and is home to the Navy's Fifth Fleet. That facility is expected to employ about 100 workers.

As it struggles to get its financial house in order at home, GE is increasingly looking to the fast-growing Middle East for new business.

The company inked a similar deal in December worth nearly $3 billion to supply Iraq with 56 gas turbines - enough to power about 5.4 million average American homes. The first of those turbines was due to be shipped this year, providing much-needed relief from blackouts that continue to plague the country.

Last July, GE's energy division announced a $500 million contract for natural gas-fired power equipment at an aluminum processing plant near Abu Dhabi, the capital of the United Arab Emirates. An additional contract worth $200 million for parts and services was announced in April.

Abu Dhabi has also become an important source of cash for GE, which has seen its financing arm weaken considerably as a result of the global financial crisis. Troubles at the financing unit have cost GE its top-notch credit rating and forced the company to slash its dividend to shareholders for the first time since 1938.

Oil-rich Abu Dhabi last year entered into a long-term agreement with GE to provide financing in the Middle East and beyond through an $8 billion joint venture. One of the emirate's state-backed investment funds is well on its way to becoming one of the U.S. company's top 10 shareholders.

By its tally, GE has signed more than $8 billion worth of Middle East power-generation projects in the last two years.

Ormet shuts Ohio potline, cites lack of alumina

Reuters - Fri Jun 12, 2009 1:29pm EDT

NEW YORK, June 12 (Reuters) - Ormet Corp (ORMT.PK), a U.S. primary aluminum producer, cut production capacity at its Hannibal, Ohio, smelter to five potlines from six as of May 20, after trimming output to 5-1/2 potlines on May 1, it said in its latest quarterly performance report posted on its website.

The smelter's total production capacity is about 265,000 tonnes of aluminum per year.

Citing a dispute with Swiss-based Glencore International AG GLEN.UL over a shortage of alumina supplies, Ormet said, it was forced to curtail aluminum output.

The aluminum maker said it may need to cut production further, possibly halting all operations, if Glencore fails to deliver alumina to the company under a tolling agreement that took effect in April 2008.

Raw material bauxite is turned into alumina, which is then smelted into aluminum.

Ormet said that as of May 21, about 50,000 tonnes of alumina has missed the scheduled arrival date. Ormet and Glencore agreed, however, to accelerate a third-quarter shipment of about 25,000 tonnes for delivery in May.

Under the tolling deal, all of the aluminum sow produced at the Hannibal smelter is committed to a single customer and is made from alumina supplied by Glencore, for which Ormet receives tolling fees.

A portion of the alumina that Glencore delivers to Ormet for tolling comes from the Windalco refinery in Jamaica, which was temporarily shut down earlier this year.

The tolling agreement with Glencore requires disputes to be settled by binding arbitration. On April 16, Ormet served Glencore with a demand for arbitration.

At the same time, it filed suit in the Federal District Court of Southeastern Ohio against Glencore seeking to prevent interruption of alumina deliveries under the tolling agreement. But in late May, Ormet said, it withdrew the suit to pursue a settlement through arbitration.

The company said its profitability in 2009 may be adversely impacted if Glencore fails to deliver alumina in the amounts and times specified in their tolling agreement, if the agreement is terminated, or if market prices for aluminum do not increase above current levels before the deal's expiration at year end.

At current London Metal Exchange prices for aluminum, Ormet pointed out that about half of the world's smelters are operating below cash break-even levels.

Aluminum prices have rebounded somewhat in recent weeks and Ormet said it thinks prices will continue to increase slowly.

"While we expect aluminum pricing will improve from current levels, no assurance can be given that it will improve or, if so, how quickly," the report said.

Elsewhere in the report, Ormet said, it continues to discuss the sale of its Burnside, Louisiana, marine terminal facility and land with prospective buyers after a previous interested buyer failed to complete the deal. (Reporting by Carole Vaporean; Editing by Christian Wiessner)

Wiping Out Excessive Aluminum Production Needs 3-5 Years

Trading Markets (press release) - Fri. June 12, 2009

BEIJING, Jun 12, 2009 (SinoCast Daily Business Beat via COMTEX) -- ACH | Quote | Chart | News | PowerRating -- Aluminum Corporation of China (Chinalco), the largest electrolytic aluminum producer in the country, is worrying about China's huge excessive production capacity of electrolytic aluminum.

Xiong Weiping, new general manager of the company, said yesterday at a press conference that the overmuch capacity in China would be no less than 4.5 million tons and it was a result of the twisted industrial structure. It will need three to five years at the least to reach new balance.

Mr. Xiong stressed that the alumina production capacity was also far higher than the actual demand. The electrolytic aluminum production capacity already reached 18.5 million tons, but the market just consumed 14 million tons.

The blinded investment in electrolytic aluminum plants when the international aluminum price flied high is a criminal. The Chinese government has already tightened the rein on investment in the sector.

Xiong Weiping believes that the Chinese economic rebound stands on sands rather than solid land, so the prices of bulk communities, such as alumina and aluminum, will continue swelling.

Source: www.p5w.net (June 12, 2009)

LME approves listing of ENRC KAS Ingot

SteelGuru - Saturday, 13 Jun 2009

ENRC is pleased to announce that London Metal Exchange has approved with immediate effect the listing of primary aluminium ingots produced at ENRC's aluminium smelter, Kazakhstan Aluminium Smelter, located in Pavlodar, Kazakhstan.

Registration of the ingots with the LME provides for their sale into an LME warehouse at LME list prices, which allows ENRC greater flexibility in its sales and marketing operations.

Approval was obtained once the requirements of a rigorous testing process were satisfied. KAS ingots were submitted to two consumers, who judged their fitness for use, and two surveyors, who subjected them to chemical analysis, before the ingots were declared suitable.

This is the first primary aluminium produced in the Republic of Kazakhstan to be made available via the LME.

This listing is another milestone in the rapid development of ENRC's aluminium business. The construction of KAS, the first state of the art aluminium smelter in the Republic of Kazakhstan, started in May 2005 and completed within an unprecedented 27 months, in December 2007, on budget and ahead of schedule. The smelter reached its full Phase 1 annual production capacity of 125,000 tonnes per annum in the first half of 2008, well ahead of its 2008 year end deadline, and in Phase 2 its capacity is set to double to 250,000,000 tonnes in 2010.

KAS and the further development of ENRC's aluminium business are of strategic importance to both ENRC and the region. KAS represents the largest private capital investment in the metals and mining industry in the Republic of Kazakhstan to date, with a total construction cost of USD 900 million. It is a key element of a significant future aluminium cluster being developed by ENRC within the country, in keeping with the government's ambitions to promote further domestic processing activity and the production of higher value added products. ENRC owns and operates a fully integrated aluminium business, including an energy company, bauxite mines, an alumina refinery, the KAS aluminium smelter, and a logistics company.

Mr Jim Cochrane head of sales & marketing and head of business development of ENRC said that "We are delighted to have reached this milestone. In a little over four years we have gone from construction to production to this official recognition of the quality of our primary aluminium product. This enhances the range of options open to us in selling our aluminium, providing another destination for our products in addition to our existing customers."

Denmark and Norway caution Vietnam on bauxite mining

ScandAsia.com - 2009-06-13

Denmark and Norway, which both are aid-Donors to Vietnam, have called on the Vietnamese government to be cautious in a planned bauxite-mining project because it might have severe consequences for the people and environment in the pristine Central Highlands, a diplomat said Wednesday.

"According to our information, thousands of people will be relocated due to the mining project, so we have asked the Vietnamese government about plans for resettlement and for securing the livelihood of these people" said the Danish ambassador to Vietnam, Peter Lysholt Hansen. He added that international donors were also seeking assurance that the government would mitigate negative impacts on the environment.

The Norwegian ambassador to Vietnam, Kjell Storlokken, who on behalf of donors recently visited the bauxite-mining areas, earlier this week warned in a meeting of donors, called the Consultative Group for Vietnam, that Vietnam should be careful in exploiting its abundance of natural resources. Pointing to the donor community's long-standing focus on the sustainable development needs of ethnic minority groups in the Central Highlands, Storlokken said the exploitation required 'careful stewardship' to ensure that the people of the Central Highlands benefit 'fully and fairly.'

"Equally, it is important that every effort must be made to limit the environmental cost of mining and minimize the impact on the natural surroundings to protect the legacy for future generations" Storlokken added. In response, Vietnamese Planning and Investment Minister Vo Hong Phuc tried to calm donors.

"Please be assured that Vietnam has prepared well for this project to ensure the economic effectiveness as well as a minimum of negative impact on society and the environment" Phuc said.

Government officials have maintained that the mining of bauxite ore, which is used to produce aluminium, is integral to the economic guidelines Vietnam's Communist Party laid out in its 2006 five-year plan. However, persistent social and environmental concerns have prompted the government to start off with a pilot project, promising to issue an environmental and economic impact report on two existing bauxite-mining projects before deciding to allow the remaining projects in the Central Highlands to proceed. The plan originally envisioned the exploitation of 5.4 billion tons of bauxite ore in six projects in the region until 2015.

Among the government's most outspoken critics is the 97-year old war hero and co-founder of the Vietnam Communist party, General Vo Nguyen Giap.

On May 20, he sent his third open letter to Vietnam's leaders and the National Assembly, urging them not to proceed with the bauxite-mining project. Instead, Giap wanted to see experts called in to conduct studies on how to stimulate the economy in the mountainous region.

Vietnam's bauxite reserves are among the world's largest at an estimated 8 billion tons. Bauxite is extracted from open-pit mines, requiring replacement of topsoil before the land can be reforested or used for agriculture. The refining process creates large amounts of caustic red slurry, which must be contained so as not to pollute water sources. Critics said geological factors make it hard to contain such waste in the Central Highlands and worry that pollution would affect the local coffee and cacao industries as well as damage rainforests, wildlife and the social fabric of the region's indigenous ethnic minorities.

New Australian water cleaning technology gains export interest

PACE Today (Process and Control Engineering) - 15 June 2009

A Victorian engineer who invented Creative Water Technology – a desalination technology – has been approached for export opportunities after becoming a finalist in INNOVIC’s Next Big Thing Award 2009.

Stephen Shelly became a finalist in INNOVIC’s not-for-profit awards program for his water cleaning technology, which he dubs Creative Water Technology.

"Desalination plants real cost for fresh water is over $1.00 per tonne and they only produce water," said Shelley.

"For $1.00 per tonne, Creative Water Technology can produce clean water, gypsum and salt that can be sold or re-used."

The technology enables highly contaminated waste water with contaminant levels of more than 300,000ppm to be cleaned. Waste contaminated at that extent would otherwise have to be stored or chemically treated at ten times the cost of the Creative Water Technology process, according to Shelley.

At the same time, valuable commodities such as salts, oils and greases are extracted and separated by the Technology for sale or reuse. Once processed, the extracted minerals are so dry they can be stored in a paper bag.

INNOVIC CEO, Joss Evans, said that Creative Water Technology already had export interest.

"Fresh water is a global issue. Creative Water Technology is experiencing demand from Australia, China, India, Africa, the United States and the Middle East," she said.

The technology has successfully completed field trials on-site in Alcoa's Point Henry Aluminum Smelter. The technology has also been externally validated by the Australian Sustainable Industries Research Centre.

Creative Water Technology is one of 25 finalists in INNOVIC’s International Next Big Thing Award 2009 - a competition to find and showcase the best new Australian and international innovations. Winners will receive over $60,000 in cash and prizes when they are announced on Thursday 2nd July.

An exhibition of the finalists will be held at the Melbourne Museum in Carlton from Sunday 30th May to Sunday 12th July. The free exhibition is open daily from 10am to 5pm.

New aluminum alloys, processes to help Alcan battle composites

Aviation International News - June 17, 2009

By: Thierry Dubois

Aluminum specialist Alcan (Hall 2 Stand B19) is developing new alloys and new processes to better compete with composite materials, the proportion of which has been steadily increasing in airframes over the past decades. At Voreppe in France, Alcan Engineered Products (Alcan EP) has a major research-and-development (R&D) center to devise and test these solutions. Officials at Alcan Global Aerospace, Transportation and Industry (Alcan Global ATI), a division of Alcan EP, want to change the perception that only composites have features such as reduced maintenance costs and integrated health and monitoring.

According to Alcan Global ATI president Christophe Villemin, proven metal solutions help aircraft programs stay on schedule. He was referring to the ongoing delays in the Boeing 787 program, which relies on composites for some 50 percent of its structure. "Our customers want delay-free machining and assembly," he insisted, adding that Alcan is now working on alloys that will fly on the successors of the Boeing 737 and Airbus A320.

To better support airframers, Alcan is offering more integrated solutions. For example, it can pre-machine plates at its factories. This is a way to improve the buy-to-fly ratio–reducing the amount of scrapped metal at the airframer’s facility.

Integral parts will offer several thicknesses on a single part. Friction stir welding provides such a benefit by creating a welded area that is almost as strong, mechanically, as the rest of the part. This enables post-welding machining and allows joining of two alloys that could not be welded with conventional techniques.

Friction stir welding was much touted in the defunct Eclipse 500 very light jet program, but it was used only to replace rivets. R&D engineer GaŽlle Pouget acknowledged that friction stir welding has been under development in Europe for years, notably by EADS, and he said it is getting closer to production.

Combined with a new shape of stringer, dubbed "top-hat," friction stir welding can yield panels that are 15 percent lighter and 14 percent stronger than conventional panels, said Bruno Chenal, director for technology and innovation. Alcan research engineers also have found that adding a "step" between two conventional stringers makes crack propagation slower by half. This can be done without adding weight, simply by making a panel thicker at one location and slimmer in nearby areas, yielding lower maintenance costs, thanks to longer times between overhaul.

Structural health monitoring will not be exclusive to composites soon. To see how a material is withstanding the effects of age and cycles, sensors like optical fibers can be included in an aluminum part. Moreover, "aluminum has a predictable behavior," Villemin insisted.

Another future possibility is tailored performance for aero-elasticity. In other words, the same part will have different behaviors in different areas. "The properties you need on a wing are not the same along the entire span," Chenal explained.

The quest for lightness is continuing. The latest generation of aluminum-copper-lithium (often referred to as aluminum-lithium) alloys are 4-percent less dense and 30-percent stronger than incumbent alloys. This allows using less metal for a given performance. Therefore, the total weight reduction is now in the 15- to 20-percent range, according to Alcan’s numbers.

Another benefit of new low-density alloys, including aluminum-lithium, is better resistance to corrosion. This allows increasing times between overhaul. Hence lower maintenance costs, Chenal stressed.

Finally, Alcan has been working on alloys that are compatible with composites. Previously, using metal next to composites raised corrosion issues, so airframers often chose to use only composites in a given area. "Now they have the choice," Chenal said.

He also mentioned the company’s involvement in recycling initiatives. It has participated in the Airbus-led Pamela R&D project for end-of-life aircraft dismantling. Alcan also wants to increase its pre-machining activity. "Recycling scraps and chips on site is greener than having to transport them from the airframer’s factory," he pointed out.

Venezuela interested in Japanese co's aluminum stake

Reuters - Tue Jun 16, 2009

CARACAS, June 16 (Reuters) - Venezuela's government is interested in buying a minority stake held by six Japanese companies in the Venalum aluminum smelter, after the Japanese partners said they planned to pull out.

Venalum's President Carlos Acosta said on Tuesday the government was studying the value of the companies' 20 percent stake. (Reporting by Fabian Cambero, editing by Maureen Bavdek)

TAJIKISTAN: JUST ENOUGH GAS TO KEEP ALUMINUM SMELTER IN ACTION

EurasiaNet - Tuesday, June 16, 2009

Uzbekistan has partially implemented an ultimatum to cut off gas exports to Tajikistan. As of June 16, Tashkent had cut the gas flow to the debt-ridden state to a trickle.

The limited supplies will be used to keep the TALCO aluminum plant going, the deputy chairman of Tajiktransgaz, Shavkat Shoimov, told the Asia Plus news agency on June 16. TALCO owes Tajiktransgaz $700,000 in unpaid bills, he added. Other industrial users owe the company some $13 million.

Uzbekistan almost doubled the cost of gas from $154 per thousand cubic meters (tcm) to $240/tcm at the beginning of 2009, leaving both neighboring Tajikistan and Kyrgyzstan with outsize debts. Tajiktransgaz reportedly owes Uztransgaz a total of $18 million.

Elsewhere, Kyrgyzstan is set to make monthly installments to pay off debts of $19 million to Uztransgaz in order to restore a full gas supply to the southern city of Osh.

Indian government to levy duty on aluminum imports for 2 years

Alibaba News Channel - 16 Jun 2009 02:10:41 PST

The central government of India is planning to impose a safe guard duty of up to 35% on some aluminum products for two years to protect the domestic industry against cheap Chinese imports.

Quoting an unidentified official reported, "The Board of Safeguards which is headed by the Commerce Secretary has approved the imposition of the duty for two years." The Directorate General had recommended the duty be imposed for four years.

A temporary duty of up to 35% for aluminum sheets and foils was already in place for a period of 200 days.

Earlier this month, the Directorate General of Safeguards concluded, "On the basis of findings it is seem that increased imports of unwrought aluminum, aluminum waste and aluminum scraps have caused and threatened to cause serious injury to the domestic industry producers."

India's top aluminum manufacturers, including BALCO, Nalco, Hindalco and Vedanta had filed the petition for imposition of the duty. Aluminum and aluminum product imports increased to 131,858 tonnes during the first quarter of this year from 96,074 tonnes during the same period of last year.

Cheap shipments also come from South Korea, Oman and Iran.

A safeguard duty is considered a temporary measure to reduce damage to the domestic industry from cheap imports.

Century Aluminum agrees to Hawesville power deal

Reuters India - Thu Jun 18, 2009 2:43am IST

NEW YORK, June 17 (Reuters) - Century Aluminum Co (CENX.O: Quote, Profile, Research) said on Wednesday it reached an agreement on a new, long-term power contract with E.ON U.S. and Big Rivers Electric Corp (Big Rivers) for its Hawesville, Kentucky, aluminum smelter.

Century said it has been negotiating for more than five years, along with E.ON U.S., Big Rivers and Rio Tinto Alcan, to unwind an existing power contract between Big Rivers and E.ON U.S., and to set a new long-term, cost-based power agreement for the two aluminum smelters in western Kentucky.

On May 29, Century said it was unable to move forward on the unwind agreement due to unfavorable business conditions that could have created unacceptable near-term financial risk.

E.ON agreed to help Century mitigate a significant portion of this risk during the near-term, the aluminum producer said.

For a limited period, to the extent that Century does not use all of the power under a take-or-pay contract, E.ON will, with some limitations, assume Century's obligations, it said.

As part of this arrangement, E.ON will defer payment of about $40 million, which it had previously agreed to pay to Century upfront and will defer funding of an escrow account of about $40 million that would have been used to reduce Century's power costs during the next several years, the company said.

E.ON will now pay these amounts if Century consumes power under the contract.

At Hawesville's current production rate, Century would receive the entire economic benefit of the deal in about eighteen months.

Century would repay over time payments made by E.ON above $80 million, though only if the LME aluminum price were to exceed certain undisclosed thresholds, the aluminum maker said.

"Although we still face significant issues in the near-term as a result of depressed aluminum prices, the unwind agreement is a major step forward for the long-term viability of the smelters and for the economic health of the local communities here in western Kentucky," said Hawesville vice president and plant manager Matt Powell.

The Hawesville smelter currently receives its electrical power from Kenergy Corp (a member of the Big Rivers system), under a power supply agreement between WKE and Kenergy that expires at the end of 2010.

Hawesville's 244,000 tonne-per-year aluminum smelter has five potlines, each with 112 pots, but only four are currently running.

In March, the Hawesville plant closed one potline, cutting 4,370 tonnes of monthly output, or about 52,400 tonnes a year, to reduce the aluminum producer's significant cash losses in the face of depressed global aluminum prices and demand.

(Reporting by Carole Vaporean; Editing by Christian Wiessner)

Trinidad judge quashes permit for aluminum smelter

Reuters - Wed Jun 17, 2009 12:11pm EDT

PORT OF SPAIN (Reuters) - A Trinidad and Tobago high court judge has quashed an environmental permit issued by a state agency for the construction of a 125,000-tonne aluminum smelter by government-owned Alutrint.

The ruling on Tuesday by Judge Mira Dean-Armorer, in response to a request by environmental activists and opponents of the smelter project in the southeast La Brea area, temporarily halts work on what would be the first aluminum smelter on the twin-island Caribbean state.

Dean-Armorer said the state Environmental Management Authority, which had issued a Certificate of Environmental Clearance (CEC) to Alutrint in 2007, had failed to take into consideration the cumulative impact of three major industrial projects, including the smelter, in the La Brea area.

Besides the planned smelter, a power plant is being built there and a port facility is also planned, and the judge said all of this could affect human health and safety.

Trinidad and Tobago's government said it would appeal the judge's ruling over the permit for the smelter, whose building is estimated to cost up to $600 million.

China's Exim Bank is providing a credit facility of US$400 million for the project.

Alutrint said it was reviewing the details of the judgment "with a view to determining future steps in managing this substantial development and its implications for the continued progress of the smelter project."

One anti-smelter activist, Dr. Wayne Kubalsingh, hailed the judge's ruling as a victory. "They have to look at the concerns of the residents," he told reporters.

Earlier this year, Venezuela-based aluminum producer Sural, which had a 40 percent stake in the Trinidad aluminum smelter project, withdrew due to financing problems.

The Trinidad and Tobago government, which owns the remaining 60 percent, has said it is looking for a partner.

(Reporting by Linda Hutchinson-Jafar; Editing by Pascal Fletcher and Lisa Shumaker)

© Thomson Reuters 2009 All rights reserved

O'Driscoll to succeed Fabrini as Alpart's managing director

Jamaica Observer - Jun 16, 2009

SANTA CRUZ, St Elizabeth - As a sequence to the suspension of bauxite mining and alumina processing, Alpart's mining director, Timothy O'Driscoll, has been appointed managing director of the plant, effective July 1.

He replaces Alberto Fabrini who has held the job since June 2007.

A news release from the Alpart management said O'Driscoll will have the responsibility of steering Alpart through "its temporary suspension of operations" which officially began on May 15 and is "expected to last for at least a year".

"During this temporary period Alpart will continue to conduct its community relations programmes in land rehabilitation, education, agriculture and other community development projects, as well as undertake studies in energy and environment improvement practices," the release said.

It said Alpart's owners - the Russia-based UC Rusal and Norway's Hydro Aluminium - have expressed confidence that under "O'Driscoll's leadership Alpart will be able to prepare itself for an efficient restart depending on market conditions, while maintaining its focus on safety and environmental performance during the mothballing period".

More than 900 workers lost their jobs when Alpart, Jamaica's biggest alumina producer, suspended operations because of the global economic meltdown which resulted in an oversupply on the global metals market and catastrophic drop in prices. A skeleton staff remains on the payroll to keep the plant at Nain in South East St Elizabeth well oiled and maintained.

Two other alumina plants at Kirkvine in Manchester and Ewarton in St Catherine have also suspended operations. The downturn in the bauxite/alumina sector has chopped by more than half Jamaica's retained earnings from the sector, estimated in recent years to be in the region of US$500 million annually - triggering serious difficulties for the Government as it seeks to meet budgetary demands.

The Alpart release reported its executive committee as saying that "it was grateful to Fabrini for his leadership, hard work and dedication, pointing out that under his tenure Alpart produced above its nominal capacity for the first time ever in 2008, while safety performance was brought up to a level within the first quartile of the industry.

"Fabrini introduced structured work procedures and management tools that led to significant improvements in performance, and that he was instrumental in achieving ISO 14000 certification as well as the implementation of improved quality systems at the company," it stated.

Members of Parliament for the Alpart operating areas Frank Witter (South - East St Elizabeth) and Michael Peart, (South Manchester), as well as Alpart Community Council Chairman Lenworth Blake, also paid tribute to Fabrini for "his management of the operations at a critical time for the industry, and his support for and involvement in community development around Alpart's operational areas".

Employees and community residents also said thanks to Fabrini for his contribution. "We have appreciated your straightforwardness in good times and in bad times, and indeed the level of communication that you maintained with us during the present crisis has helped to make the burden that much easier to bear," they were reported as saying in a statement.

O'Driscoll has had wide experience in the bauxite/alumina industry, including a previous assignment as operations and mine development manager for Jamalco. He has also worked for other bauxite and alumina operations in Guyana and Australia.

BPA edges closer to deal that would keep Intalco smelter operating

TheNewsTribune.com - 06/24/09

JOHN STARK; THE BELLINGHAM HERALD

The outlook for continued operation of the Alcoa Intalco Works aluminum smelter appeared a bit brighter Wednesday, June 24, after Bonneville Power Administration tentatively reaffirmed its willingness to provide enough low-priced power to maintain operations at the 500-employee facility.

That affirmation came in a complex 488-page draft document issued late Tuesday, June 23, in which the federal power marketing agency announced decisions on a number of legal and technical issues that affect the price it will charge all of its customers during the two-year period beginning Oct. 1, 2009. On issues of direct concern to Intalco, BPA overruled public utility districts and other power users, who had argued that BPA should not provide any power to Intalco if doing so would mean higher prices for other BPA power customers.

"We’re encouraged that BPA is defending the right to serve us," said Mike Rousseau, manager of the smelter west of Ferndale.

But Rousseau also noted that three key issues remain to be resolved before BPA issues its final decision on the two-year rate period in late July 2009:

How much cheap BPA power will be available?

Rousseau said Intalco needs at least 320 megawatts, or enough to operate two of the plant's three potlines.

What price will BPA charge?

BPA now indicates it is willing to charge Intalco the same industrial power rate that other industries in the region pay to their BPA-served public utility districts-something that Alcoa officials have sought for years. But will that rate be low enough to keep the local smelter operating when a sputtering global economy has depressed aluminum prices? The power price won't be set until next month.

Can BPA and Alcoa agree on a longer-term power contract of seven years or more?

Rousseau said a longer-term deal is critical because Alcoa could lose money on Intalco's aluminum production for the next couple of years if economic problems are prolonged. The Pittsburgh-based parent corporation would only be willing to do that if it has some guarantee of a low-priced power supply in the more distant future, when demand and price would be expected to rise.

"We need to have power certainty locked up for two potlines for a minimum of the next seven years," Rousseau said. "If we're going to bleed as much as we're bleeding right now, we need to be able to see where the transfusion is."

Talks on a longer-term deal are ongoing, but time may be growing short.

"We're still right on the edge," Rousseau said. "We need to get through this very quickly."

Trinidad says will send LNG to Jamaica after all

Reuters - Wed Jun 24, 2009

PORT OF SPAIN, June 24 (Reuters) - Trinidad and Tobago's Prime Minister Patrick Manning said Wednesday that sending liquefied natural gas to stimulate investments in Jamaica's alumina sector was now a matter of national priority.

Trinidad and Tobago signed an agreement in 2004 to supply Jamaica with 1.1 million tonnes of LNG per year for 20 years, beginning in 2009, for use by the Jamalco refinery and the Jamaica Public Service Company's electric power plants.

Trinidad later said it could not supply LNG to Jamaica because supplies were inadequate. But Manning told Parliament supplies had become available because the global supply and demand situation for gas has changed.

In the new environment, there is no longer the need for Jamaica to build regasification terminals, and floating terminals can be used, he said.

"In those circumstances, the government of Trinidad and Tobago now considers that a supply of LNG to Jamaica for the stimulation of investments in the alumina sector, to be a matter of national priority," he told Parliament.

The Jamaican government owns 45 percent of Jamalco and Alcoa Inc (AA.N) owns the rest. The global financial crisis and sharp falls in metals prices have hurt Jamaica's alumina sector, with some refineries cutting production.

The island's largest bauxite and alumina producing company, Alumina Partners of Jamaica, suspended production in May for what was expected to be a year-long shutdown.

Manning said he hopes to enter into an arrangement for Jamaica to supply alumina for Trinidad and Tobago's first aluminum smelter plant.

Trinidad and Tobago, through the Atlantic LNG plant, also exports LNG to the United States, Europe and the Dominican Republic. New technological developments in regasification have also allowed it to export gas to Brazil and Chile.

Atlantic's four processing trains cool natural gas to convert it to liquid for transport, and have a total production capacity of 15 million metric tonnes a year. It is regasified at terminals for transport ashore through pipelines. (Reporting by Linda Hutchinson-Jafar; Editing by David Gregorio)

Russian aluminum firm resumes support of 3,000-MW Boguchanskaya

HydroWorld - Wed Jun 24, 2009

Russian hydro utility RusHydro reports its partner in construction of the 3,000-MW Boguchanskaya hydroelectric project has dropped plans to stall completion of the giant Siberian project due to the economic downturn.

Russian aluminum giant UC RUSAL wanted to delay completion of Boguchanskaya until after 2010, even though the delay would come at a huge cost for RusHydro, its partner in the venture. RUSAL was hit by a steep drop in foreign demand, forcing it to postpone construction of the adjoining Boguchany smelter until market conditions improved. However, in April RUSAL appeared to be backing off the plan to halt the smelter. (HydroWorld 4/20/09)

RusHydro reported RUSAL remitted 256 million rubles (US$8.2 million) on June 9, 2009, for construction needs of Boguchanskaya. It said by the end of June, RUSAL plans to transfer another 551 million rubles (US$17.6 million). The utility said RUSAL should remit another 896 million rubles (US$28.7 million) in July -- for a total of 1.7 billion rubles (US$54.5 million) -- to redeem all of its debts to RusHydro and continue construction.

"We are pleased to note that RUSAL has backed off from its proposal to freeze construction of the Boguchanskaya HPP completely, and once again sees the project as a strategic and priority one for itself and has started paying off the construction debts," RusHydro Board member Alexander Toloshinov said.

RusHydro said it hopes RUSAL will sign an investment agreement before the end of June specifying a timeline and amounts for financing construction of Boguchanskaya up to 2012. RusHydro has declared a need to resolve the payment situation by the end of June to avoid breaching the construction schedule.

Despite the absence of funds, RusHydro said contractors have continued to fulfill their obligations. Russian equipment supplier JSC Power Machines has been installing the first of nine 333-MW turbine-generators. Russia's OMZ Group recently reported it supplied components for the project.

RusHydro announced in April it signed a contract with Krasnoyarsk territorial utility OJSC Krasnoyarskenergosbyt to sell the entire output of the half-built Boguchanskaya. RusHydro said the contract does not contradict the possibility of direct supply of electricity to large industrial customers in the region.

RusHydro shareholders approve share issue

A June 10 shareholders meeting of RusHydro approved a 19 billion ruble (US$609 million) secondary share issue to help finance massive expansion. Shareholders approved the issue of 19 billion shares with a nominal value of 1 ruble each via an open subscription.

Rushydro, the world's second largest producer of hydroelectricity after Hydro-Quebec, plans an 80 billion ruble (US2.5 billion) expansion this year after being forced to curb expenditure by nearly 30 percent in 2008 due to the difficulty of securing funds during a global credit crunch.

In November, RusHydro announced it would cut 17 percent of its staff and hold on to its stakes in other power companies, which had fallen by as much as 75 percent in value.

UPDATE 2-RUSAL to slash Guinea alumina output - source

Thomson Reuters - 06.24.09

By Saliou Samb

CONAKRY, June 24 (Reuters) - Russian metals firm RUSAL will cut alumina production at its Friguia plant in Guinea by more than 50 percent from July 1, a RUSAL executive in the West African country said on Wednesday.

RUSAL is cutting metals output across its operations as it attempts to restructure $7.3 billion in foreign loans, while metals prices are around half of their year-ago levels and demand is not expected to rise dramatically in the near future.

'The management has taken the decision...to reduce the factory's production which is currently around 52,000 tonnes of alumina per month to 20,000 tonnes,' the source said, speaking on condition of anonymity.

RUSAL, which employs around 1,200 people at Friguia, intends to continue paying full salaries and does not plan to cut jobs, he said.

The firm's Moscow headquarters could not be immediately contacted for comment.

Vietnam to deport 182 Chinese

Forbes -June 25, 2009

HANOI - VIETNAM will deport 182 Chinese caught working illegally at a cement plant and fine six Chinese contractors for importing workers without permits for a controversial bauxite and aluminium project, a state newspaper said on Thursday.

The 182 illegal workers were discovered in the southern province of Dong Nai, adjacent to Ho Chi Minh City, after provincial authorities detected foreign worker numbers creeping up, a report in Tuoi Tre (Youth) said.

It did not say when they would be sent home.

The newspaper said Dong Nai had more than 7,000 foreign workers, 1,500 of whom are Chinese. Fewer than 3,000 foreign workers in Dong Nai had permits. Fewer than 1,000 were not required to have permits, it said.

The newspaper also said Lam Dong province, next to Dong Nai, planned to fine six Chinese contractors who were partners with the Chinese firm China Aluminium International Engineering Co (Chalieco), involved in the construction of an alumina plant in Tan Rai in the Central Highlands.

There are 570 Chinese workers on the Tan Rai project, the newspaper said. The contractors had made 250 applications for work permits for foreign workers with the local authorities.

Chalieco, a subsidiary of China's state-run aluminium firm Chinalco, has been awarded a contract to build a $460 million aluminium plant at the Tan Rai bauxite complex.

Tan Rai is one of two bauxite complexes the government is pursuing in the Central Highlands via Vietnam's top coal miner, state-run Vinacomin.

Many Vietnamese have become worried about an influx of Chinese products and workers in recent years, and there has been widespread criticism of China's involvement in the controversial Central Highlands bauxite mining and aluminium producing plans.

Some consider that region strategically important because it is near the narrow centre of Vietnam and three-way border intersection of Vietnam, Cambodia and Laos.

Vietnamese are deeply suspicious of China after centuries of tense relations, wars and territorial skirmishes, despite the friendly rhetoric of the countries' leaders.

Montenegro’s KAP smelter 2008 losses estimated at 57 million euros

Balkans.com Business News (subscription) - 30.06.2009

The shareholder meeting of Montenegro’s aluminum producer Kombinat Aluminijuma Podgorica (KAP) estimated the company’s 2008 losses at 57 million euros but the official auditing report was not presented because KAP had no money to pay for the completed job.

"Since the auditor did not submit the financial report on KAP’s operations in 2008 because the company is temporarily unable to meet its due payments, the shareholder meeting did not examine this item on the agenda, nor did it discuss choosing a new auditor for the company for 2009", KAP said in a statement.

According to the shareholders and trade union representatives present at the meeting losses of KAP, majority owned by Russian Central European Aluminum Company (CEAC) , a subsidiary of Russian Basic Element, were 44 million euros in a net debt and around 13 million euros in due taxes.

KAP has halved its production levels and is making losses because of high aluminum production prices and low prices for the commodity on the bourse.

The Russian owners of KAP have in early June resolved a long-standing dispute with the Montenegrin government over KAP’s rising debts and unprofitable operations by agreeing to transfer a 29 percent stake in KAP back to the state, along with a 32 percent of the nearby bauxite mine that provides raw material for the smelter.

RUSAL says to cut Guinea alumina output for 1 mth

Reuters - Thu Jun 25, 2009

MOSCOW, - Russia's UC RUSAL plans to return to normal production levels at its Guinea alumina plant in August after reducing output by more than 50 percent from July 1, spokeswoman Vera Kurochkina said on Thursday.

A RUSAL executive in the west African country told Reuters on Wednesday that the plant will reduce alumina output to 20,000 tonnes from the current 52,000 tonne level from July 1. [ID:nLO401477]

RUSAL, the world's largest aluminium producer, reduced overall aluminium production by 7 percent in the first quarter, and alumina production by 25 percent. It has said it wants to reduce alumina output by 3.9 million tonnes by the end of 2009.

(Reporting by Polina Devitt, writing by Alfred Kueppers; Editing by Keiron Henderson)

BHP to Halt Output of Some Products at Smelter (Update2)

By Ron Derby

June 30 (Bloomberg) -- BHP Billiton Ltd., Africa’s biggest aluminum producer, will stop output of some products at its Bayside smelter in South Africa at the end of September as demand weakens.

"Bayside has experienced a sharp decline in domestic demand," spokeswoman Bronwyn Wilkinson said in an e-mailed response to questions today. The smelter will stop so-called casting rod and billet, and keep supplying slab metal, she said.

Ceasing rod and billet supply from the end of September won’t cut overall aluminum output from the smelter, she added. "It is the shapes the metal is being cast into that will change," she said in a separate e-mail.

Manufacturing in South Africa shrank a record 22.1 percent in the first quarter as the economy contracted by an annualized 6.4 percent and the country entered its first recession in 17 years. Melbourne-based BHP, which employs about 600 full-time staff at Bayside and about 300 contractors, is talking with workers’ representatives about the changes, Wilkinson said.

Hulamin Ltd., a South African aluminum processor, today said BHP agreed to supply it with raw materials until December 2010. About half of its extrusion billet and 30 percent of its rolling slab is supplied from Bayside, Hulamin said.

BHP said April 23 its aluminum output fell 7 percent in the nine months ended March 31 as power rationing was introduced in southern Africa. Eskom Holdings Ltd., South Africa’s state-run utility, began rationing electricity to avoid outages as the company struggled to keep up with demand from industry.

To contact the reporter on this story: Ron Derby in Johannesburg at rderby1@bloomberg.net

Trinidad to sell LNG to Jamaica

United Press International (subscription) - June 30, 2009 at 10:17 AM

PORT OF SPAIN, Trinidad and Tobago, June 30 (UPI) -- Trinidad and Tobago's prime minister said he looked at the economic data and his country's reserves and decided now is the time to send Jamaica natural gas.

Prime Minister Patrick Manning addressed T&T's House of Representatives last Wednesday on the country's economy and, more importantly, the difference between T&T's and other countries in the Caribbean.

Things aren't as rosy in some of those other countries -- Manning pointed out that unemployment in the Organization of Eastern Caribbean States ranged from 15 percent to 25 percent -- and if those other islands can't provide a quality of life their citizens want, "that is likely to lead to mass migration into the areas where they feel a better way of life might be available," Manning said.

"Trinidad and Tobago has had to take a long and hard look at the economies of some of these countries to see what contribution we can make at this time to their economic well-being."

As part of this plan Manning resurrected a proposal for T&T to sell liquefied natural gas to Jamaica. The countries had an agreement regarding natural gas in 2004, but Port of Spain withdrew, citing a lack of supply.

What has changed, Manning told legislators, is the global economic downturn has reduced demand for liquefied natural gas, and advancements in regasification have increased the economic feasibility for Jamaica to be on the receiving end of T&T's shipments.

"In those circumstances, the government of Trinidad and Tobago now considers that a supply of LNG to Jamaica for the stimulation of investments in the alumina sector to be a matter of national priority," Manning said.

That is the other side of the coin. Port of Spain is looking to widen its economic base with an alumina smelter -- still to be built but very much in the planning stages with $400 million in Chinese credit helping it along. It is expected to be in operation by 2011.

Trinidad and Tobago relies on natural gas and oil for 40 percent of its gross domestic product and 80 percent of its exports. The oil part of that equation is shrinking.

The U.S. State Department Web site points out that Port of Spain has made the switch from an oil-based economy to one based on natural gas. T&T is the world's No. 5 supplier of LNG and is the single largest supplier of the commodity to the United States. Two-thirds of the LNG entering the United States originates in Trinidad and Tobago.

As solid as a trading partner the United States is, Port of Spain is looking to diversify the market.

Manning is also hoping that Jamaica, which has abundant reserves of alumina, will look to Trinidad and Tobago as a customer of choice when T&T's alumina smelter comes online. Then Port of Spain will export aluminum, too.

This could also help Jamaica, since it closed its alumina production company in May. It could be shuttered for a year. Cheap fuel in the form of Trinidadian natural gas could allow for that facility to reopen sooner.