AluNews - September 2009

Gramercy Alumina and St. Ann Bauxite to Noranda Aluminum Holding
Trading Markets (press release) - Tue. September 01, 2009
Noranda Aluminum Holding Corporation has acquired the remaining 50% ownership interests in Gramercy Alumina LLC and St. Ann Bauxite, Ltd. from Century Aluminum Company, a producer of primary aluminum.
St. Ann Bauxite is based in Jamaica, while Noranda, Gramercy Alumina, and Century Aluminum are based in the US.
Noranda is a manufacturer of primary aluminum products and rolled aluminum coils, while Gramercy Alumina operates as an alumina refinery. St. Ann Bauxite is a bauxite mining company.
Announcement (August 4, 2009):
Noranda has signed an agreement to acquire the 50% ownership interests in Gramercy Alumina and St. Ann Bauxite from Century Aluminum.
Upon completion, Noranda would hold 100% ownership of Gramercy Alumina and St. Ann Bauxite.
Century Aluminum and Noranda would also enter in an agreement under which Century Aluminum would purchase alumina from Gramercy Aluminum for a limited period of time.
Jones Day is acting as legal advisor to Century Aluminum on the transaction.
Deal Type Acquisition
Sub-Category Minority Acquisition
Deal Status Completed: 2009-08-31
Deal Participants
Target 1 (Company) St. Ann Bauxite, Ltd.
Target 2 (Company) Gramercy Alumina LLC
Acquirer (Company) Noranda Aluminum Holding Corporation
Vendor (Company) Century Aluminum Company
Deal Rationale
The divesture would allow Century Aluminum Co. to focus on its aluminum smelting business.

Southwire Unveils New Website Offering Enhanced User Experience
Reuters - Tue Sep 1, 2009
Southwire, North America`s leading manufacturer of electrical wire and cable and global leader in the supply of continuous cast copper and aluminum rod systems, has launched a completely redesigned web site, www.southwire.com, that makes it easier for customers, distributors, contractors, engineers and other industry visitors to interact with the company.
Southwire has long been ranked among the nation`s most innovative users of information technology by Information Week, which annually rates the top 500 companies using information technology in their business. In 2008, Southwire was ranked 6th by the publication.
"The site is designed to make the user experience with Southwire more satisfying and effective," explained Southwire President and CEO Stu Thorn in a video introduction to the site. "We also wanted everyone to come away with a better understanding of our culture of collaboration, our commitment to innovation, and the many ways we are working to maintain the quality of life and the environment for our employees, customers and the communities where we do business."
The evolution of the Southwire web site was guided by user responses to a needs survey and managed by a cross-functional team representing all parts of the company. Special attention was paid to making the site easier to navigate, more interactive and faster for the user to accomplish a wide range of practical tasks, from finding information about products and technical services to placing orders.
Among the many enhanced features on the site are Q-Service, a web-based ordering and self-service system, and SWIM, which incorporates EDI and Internet technology to enable vendor-managed inventory.
The refreshed site also includes information about Southwire`s ongoing sustainability efforts as well as an enhanced video library that features product demonstrations, training and instruction, along with vignettes about the company`s community outreach programs.
Southwire customers include electrical contractors, plant and facility engineers, do-it-yourselfers, OEMs and utilities. The company was founded in 1950 and now serves wire and cable markets in the United States, Canada and Latin America. Southwire also serves OEMs internationally and provides SCR
copper and aluminum rod systems around the world.

About Southwire Company
A technology leader, Southwire Company is a leading wire and cable manufacturer in North America, manufacturing building wire and cable, metal-clad (MC) cable,
FlatWire Ready®products, cord products, utility cable products, industrial power cable, copper and aluminum rod and continuous casting technology. Visit
Southwire`s website at www.southwire.com.
Southwire Company
Gary Leftwich, 770-832-4884
www.southwire.com; gary_leftwich@southwire.com
Copyright Business Wire 2009


Noranda to Increase Production at Gramercy and St. Ann Facilities
Reuters - Wed Sep 2, 2009
Noranda Aluminum Holding Corporation ("Noranda" or the "Company") yesterday announced that it had become the sole owner of Gramercy Alumina LLC ("Gramercy")
and St. Ann Bauxite Limited ("St. Ann") (formerly each owned 50% by Century Aluminum Company ("Century"). St. Ann operates a Jamaican bauxite mine and related facilities pursuant to a partnership agreement with the Government of Jamaica and supplies Gramercy`s bauxite requirements. The Gramercy alumina refinery supplies substantially all of the alumina used at Noranda`s New Madrid smelter.
Layle K. "Kip" Smith, Noranda`s President and Chief Executive Officer, commented today as follows: "We are pleased to have completed this transaction, which advances our vertical integration strategy. Bauxite and alumina are critical raw materials for Noranda, and 100% control of the operating assets in St. Ann and Gramercy provides us security of supply and long-term cost competitiveness for these essential raw materials. We thank Century for its strong partnership
support over the last five years."
"The support of the Government of Jamaica continues to be critical to the success of St. Ann`s operations," he added. "We look forward to continuing and strengthening our partnership with the Government of Jamaica as we build a sustainable foundation for our integrated business in Jamaica."
Noranda also announced today that in order to support increased customer demand, Gramercy and St. Ann will both immediately increase production. "We are very excited to be increasing our output during these difficult times," said Larry
Holley, President of Gramercy and St. Ann. "The ramp-up at these sites will support our key constituents, including customers, suppliers, employees and communities. The support of Noranda by the Government of Jamaica has been critical to our decision to increase production."
Production capacity of alumina and bauxite at Gramercy and St. Ann is approximately 1.2 million metric tons and 4.5 million metric tons, respectively.
The ramp-up of production at both locations is expected to be completed during the fourth quarter of 2009.

Alcoa Raises World Aluminum Forecast on China Demand (Update2)
Sept. 3 (Bloomberg)
Alcoa Inc. Chief Executive Officer Klaus Kleinfeld raised his 2009 forecast for global aluminum consumption because of demand triggered by China’s stimulus spending.
The largest U.S. aluminum producer expects China’s consumption of the lightweight metal to rise 4 percent this year, compared with Alcoa’s previous prediction of zero growth, Kleinfeld said in an interview in New York. That alters the company’s outlook for global demand to a decline of 5.5 percent from a previous forecast of minus 7 percent, Kleinfeld said.
Alcoa is counting on economic-stimulus spending in China to boost metal demand enough to help the company return to profitability after three consecutive net losses. Chinese imports of aluminum and aluminum products almost doubled in the first seven months of 2009 compared with a year earlier, according to the country’s customs data.
"China is back," Kleinfeld said. "They had a lot of shovel-ready projects" planned for 2011, which the government is starting now in response to the global economic slowdown. "Also, the perceived deficiencies in the social network have been improved with the stimulus program, and that directly leads to people looking to upgrade from motorcycles to cars."
Asked for a 2009 earnings forecast, Kleinfeld declined to provide a number, saying only that stimulus spending in the U.S. and China would affect Alcoa’s results "positively." The company is predicted to post a 2009 loss of 90 cents a share, the average estimate of 19 analysts surveyed by Bloomberg.
Second-Half Forecast
China’s second-half aluminum consumption will rise 8 percent from a year earlier, Kleinfeld said.
Alcoa will be "free cash flow positive very soon," Chief Financial Officer Charles McLane said on July 8, after reporting a second-quarter loss.
Alcoa fell 4 cents to $11.55 at 4:15 p.m. in New York Stock Exchange composite trading on Sept. 2. The shares have declined 62 percent in the past 12 months.
The Chinese government is spending 4 trillion yuan ($590 billion) to stimulate its economy, the world’s third- largest after the U.S. and Japan.
"Without China, things would be much worse," Luther Lu, an analyst at Friedman, Billings, Ramsey & Co. in Arlington, Virginia, said in a telephone interview.
Aluminum futures in Shanghai have jumped 16 percent since April 1, prompting smelters to restart idled capacity and increasing demand for alumina, a raw material.
‘Bullish Sentiment’
"For the aluminum price to get a meaningful recovery, you need the rest of the world," Lu said. "When China’s demand is up, it certainly provides bullish sentiment for all commodities, and that will help Alcoa."
Aluminum on the London Metal Exchange has slumped 32 percent in the past 12 months as the global recession curbed demand for raw materials. The price has rebounded 20 percent this year after a record 36 percent decline in 2008.
The U.S. recession "is bottoming out" and poised for "a slow return," while Europe is "a mixed picture," Kleinfeld said in the interview.
"Outside of China, the recovery is nonexistent," John Stephenson, who helps manage about C$1 billion ($910 million) at First Asset Investment Management in Toronto, said in a telephone interview. First Asset holds about 1 million Alcoa shares.
Aluminum Inventories
Aluminum prices may rise even as inventories monitored by the London Metal Exchange are near record highs because most of the stockpiled metal is locked into financial arrangements that make supplies inaccessible to users, Kleinfeld said.
"Almost all of it is tied up in financing deals" creating short-term tightness in supplies, Kleinfeld said.
The metal is tied up in so-called cash-and-carry trades, which let speculators sell forward futures when buying the commodity on the spot market.
Aluminum inventories monitored by the LME have almost doubled this year to 4.61 million metric tons.
To contact the reporter responsible for this story: Rob Delaney in Toronto at robdelaney@bloomberg.net.

Alcan gets $750M in pacts for aluminum auto components
Reliable Plant Magazine - Sep 3 2009
Alcan Engineered & Automotive Solutions, part of Alcan Engineered Products – a business unit of Rio Tinto – is becoming a key player in the growing market for greener car components, having been awarded a total US$750 million worth of multi-year contracts over the past 12 months for its innovative, lightweight aluminum solutions.

"These contracts with several leading original equipment manufacturers (OEMs), in both premium and mass production markets, represent significant market share gains for our business," said Christel Bories, president and CEO, Alcan Engineered Products. "As a result of our growth strategy of focusing on select markets over the last three years, we are becoming the preferred development and production supplier of advanced lightweight solutions during a high-growth period for these products."

Alcan Engineered & Automotive Solutions has been awarded more development projects in 2009 than it has in any other given year over the last decade. The unprecedented downturn, lower production volumes and major restructuring in the automotive industry have not detracted from the upcoming demand for greener vehicles. In light of environmental regulations, tax incentives, and volatile fuel prices, global car manufacturers recognize that developing low CO2 emission vehicles is a key success factor for the future.

"Our global reach, world-class R&D centers, proven expertise, and cutting-edge manufacturing technologies in lightweight materials have been essential in establishing our solutions as smart design elements in tomorrow's green cars, and I expect our strong market position to grow further in the Asian and North-American regions," added Wolfgang J. Schmitz, president, Alcan Engineered & Automotive Solutions.

Fall in Commodity Prices May Help Indonesia's Antam Reduce Project Expenses
Jakarta Globe - September 02, 2009
Ardian Wibisono
State miner PT Aneka Tambang said it was seeking to trim investment on two major projects currently worth a total of $700 million by renegotiating their construction costs with developers.
Alwin Syah Loebis, president director of the firm ,also known as Antam, said late on Tuesday that the slump in commodity prices amid the economic downturn would likely bring down raw material costs for the projects. He did not say how much the company planned to cut costs.
"We are currently negotiating with prospective contractors in the hope that the investment value could be decreased to current fair market value," he said.
The two projects are a $400 million aluminia factory in Tayan, West Kalimantan, and a $300 million coal-fired power plant in Pomala, South East Sulawesi. Cost estimates for the facilities were made when commodity prices were at their peak last year, making construction more expensive.
Antam is currently in contract talks with several candidates for construction of the projects, which the company aims to begin early next year, with operations starting in 2013.
The factory is expected to produce 300,000 tons of alumina a year. Alumina is processed from bauxite and is the raw material for aluminium.
Alwin said Antam held a 20 percent stake in the planned power plant, with the balance held by PT Indika Energy and PT Nava Bharat, the local arm of India’s Nava Bharat Ventures, a diversified energy and mining company.
Aside from decreasing the cost of raw materials to lower production costs, Antam was also considering building the power plant closer to its existing ferronickel processing facility in Pomalaa, Southeast Sulawesi.
The coal-fired plant is part of the company’s strategy to reduce its ferronickel production costs. Antam now uses a 102 megawatt hour diesel plant to supply electricity to its ferronickel smelters. After the power plant is completed, production costs are expected to fall 10 percent to 15 percent, from $4.91 per pound.
"If the distance can be shortened [between the power plant and the factory], electricity prices could fall to 9 cents per kilowatt hour from 13 to 14 cents currently," Alwin said.
To fuel the power plant, Antam said it was planning to acquire three coal mining companies, which it has not yet named. The miner has set aside Rp 300 billion for the purchases, which are expected to be completed by the end of the year.
Antam’s net profit dropped to Rp 223.77 billion ($30 million) in the fist half from Rp 1.46 trillion in the same period last year of because of the fall in commodity prices and below-target production .
Alwin said with nickel prices beggining to rise several months ago, he expected second-half results to improve.
Antam shares closed down Rp 50, or 2.2 percent, to Rp 2,200 on the Jakarta Composite Index on Wednesday.

This Essential Q3 2009 Brazil Mining Report is Now Available
Reuters - Tue Sep 1, 2009

DUBLIN--(Business Wire)--
Research and Markets
(http://www.researchandmarkets.com/research/c4ea5a/brazil_mining_repo) has
announced the addition of the "Brazil Mining Report Q3 2009" report to their offering.
Brazil Mining Report provides industry professionals and strategists, corporate analysts, mining associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Brazil's mining industry Brazil has one of the largest and best developed mining sectors in the world. In fact, Brazil is responsible for one-quarter of the world's iron ore output and is the fifth largest producer of. Meanwhile, the country also has ample supplies of bauxite, niobium, manganese, nickel, tantalum, copper and gemstones.
All of the major global mining companies operate in Brazil include Australia's BHP Billiton and UK-based Rio Tinto, as well as the host nation's Vale (Companhia Vale do Rio Doce, previously known as CVRD).
In June 2009 it was reported by The Times that global mining giant Anglo-American is in negotiations with Dubai Natural Resources World to develop an iron ore project in Brazil. Anglo-American is seeking investment in order to bring its sizeable Brazilian iron ore reserves into production. Meanwhile, some analysts believe that a cash injection will be vital for Anglo-American to hold off the numerous suitors circling the company. In total, Anglo-American estimated that it needs US$3.6bn to develop its iron ore deposits in Brazil.
Many of these reserves were gained after the company purchased Brazil's MMX-Minas Rio in 2008 for US$5.5bn. According to The Times, a stake in this company is being offered in order to raise the funding to start production.
Anglo-American has been criticised for paying over the odds for MMX. However, if it can successfully divest a stake, it would go someway to vindicating the decision and would relieve pressure on the troubled company. So far in 2009, the miner has been forced to lay-off 19,000 workers and cut capital expenditure by US$4.5bn.
Meanwhile, in June 2009 South African mining major Anglo American rejected rival mining group Xstrata's proposed 'merger of equals', raising the possibility of counter bids from the biggest players in mining, such as Vale, and underlining BMI's prediction of increased consolidation in the sector. Last year Vale failed in its attempted acquisition of Xstrata, and with the latter saying that it wants to participate in mergers and acquisitions as acquirer or target, the Brazilian giant could come back to the table. Vale raised BRL18.4bn (US$9.1bn) in a share sale in July 2008 for acquisition and expansion, and it has around US$11bn in cash and US$15bn in undrawn loan facilities, meaning that it would be able to offer a hefty cash component for any offer. A combination would offer Vale geographic and product diversification, increasing its exposure to coal and
copper. However, in a research note Citigroup said that the 'challenges to a Vale- Anglo deal remain substantial, including Vale's lack of experience in
Africa, lack of synergies and difficult financing.' Global Overview BMI examines the phenomenon of increased Chinese activity in the global mining
sector and what this means for the industry.
Industry Forecast
In 2009 investment in Brazil's mining sector is expected to fall by around 30%, according to the National Department for Mining Production. Between October 2008 and February 2009 prospecting licences fell by 37% year-on-year (y-o-y) due to the global economic downturn and the knock-on effects on credit and consumption.
However, in a bid to ease the pressure on the mining sector, the government is looking to implement a legal measure that enables the extractive industry to raise bank loans more easily. At present banks are reluctant to make loans to mines, as the pay-back period is very long and the ventures tend to be quite high risk. However, calls to introduce tax-cuts for mining companies have been rebuffed by the authorities. Despite a contraction in real terms in 2008, BMI forecasts that the Brazilian mining sector will return to growth in 2009. By 2013, the market should be expanding by around 6% a year in real terms and will reach a value of US$41.65bn, an increase of around 70%, compared to 2008


Gramercy plant's output to mushroom

The Times-Picayune Thursday September 03, 2009

by Matt Scallan, The Times-Picayune

http://www.nola.com/business/index.ssf/2009/09/gramercy_plants_output_to_mush.html

Noranda Aluminum gained full ownership of the Gramercy Alumina plant this week. Company officials told employees Thursday that the company wants to ramp up the plant to its full capacity as quickly as possible, in order to gain market share. At a time when aluminum producers are struggling with low prices and excess capacity, the new owners of the Gramercy Alumina plant in St. James Parish are ramping up production in an effort to gain market share, company officials said Thursday.
"By increasing our production, we're really trying to take advantage of well-positioned assets," said Kyle Lorentzen, chief operating officer of Noranda Aluminum, which acquired full ownership of the 50-year-old alumina plant in Gramercy this week and told some of its 470 employees "if we're not growing, we're dying.
Thursday morning officials of the Franklin, Tenn., company handed out blue Noranda T-shirts to employees, who seemed happy with the news that the company reached a deal to acquire the 50 percent of the company owned by Century Aluminum Ltd. of Monterey, Calif. The companies had acquired the plant and a 49 percent stake in the St. Ann Bauxite mine in Jamaica in 2004. Noranda also acquired Century's stake in the mine in the deal announced Tuesday. Terms of the deal were not disclosed.
"It's good news for the employees. We've worked very hard to keep this place going," said David DeLaneauville, president of United Steelworkers of America Chapter 5702, which represents some workers at the plant.
Gramercy Alumina President Larry Holley told employees that the company wants to ramp the plant up to its full 1.2 million metric ton per year capacity as quickly as possible in light of aggressive sales offers by Noranda.
"If we could do it all tomorrow, that's what we'd like to have," he said.
Noranda had been partners with Century Aluminum in the Gramercy plant as well as the St. Ann mine, which supplies virtually all of the bauxite that is the plant's feedstock.
The Jamaican government owns 51 percent of the mine, which also will ramp up to its full capacity of 4.5 million tons per year by the end of 2009.
James Robertson, Jamaica's minister of energy and mining, accompanied company officials to the site and called the deal "the silver lining" in the economic clouds over the Jamaican economy. Three of the island's five bauxite mines are shut down at the moment, he said.
"I can't think of any success story or any positive messages in the last 12 months that are equal to this one," he said.
Noranda is trying to build market share at a time of low prices and high inventories of aluminum.
The price of aluminum dropped from $1.40 per pound in July 2008 to a low of 60 cents per pound earlier this year and is currently about 80 cents a pound.
It's a measure of the state of the economy that the company is promising to invest more money into the plant's equipment but is weighing the cost of changing its name from Gramercy Alumina LLC to Noranda.
Lorentzen said the company would work aggressively to gain market share during the downturn.
"Things will get better," he said. "We believe these assets are strong assets that will position us for the sustainable future that we're looking for."
Matt Scallan can be reached at mscallan@timespicayune.com or 985.652.0953.

BAUXITE COMEBACK

Thursday, September 03, 2009

St Ann plant plans return to full production in 90 days

BY ALESIA EDWARDS, Observer staff reporter alesiae@jamaicaobserver.com

DISCOVERY BAY, St Ann - St Ann Bauxite Partners Limited is planning to bring back its plant to full production over the next 90 days, which would defy local and international trends that have seen a slump in the bauxite and alumina sector.
The St Ann Bauxite plant, which is at present operating at 64 per cent of its capacity, got the shot in the arm Monday when the American company, Noranda Aluminium Holding Corporation, announced that it had formally acquired the shares of its fellow minor partner, Century Aluminium, which jointly owned 49 per cent of the plant.
Noranda said yesterday that it would now be entering into an agreement with the Jamaican Government, which owns the other 51 per cent share, to bring back the plant to full capacity.
Noranda and Century had entered into a partnership in 2004, to purchase the 49 per cent share from Kaiser Aluminium, after that company filed for bankruptcy.
Noranda had first announced on August 4 this year that it would fully acquire St Ann Bauxite in Jamaica and Gramercy Alumina operations in the US from Century Aluminium Company, in a bid to recover the US$80 million it wrote off over six months on the operations due to the global downturn.
The company said then that the acquisition would allow it to "vertically integrate" its operations by securing alumina for its aluminium operations.
President of St Ann Bauxite Larry Holley said that the company was hoping to boost its annual production to 4.2 million tonnes, up from the 3.0 million tonnes now being produced, within the proposed 90-day period.
"Our current workforce is only working at 85 per cent schedule, so moving the current workforce back to 100 per cent, in stages over the next 90 days, we will be able to accomplish the 4.2 million tonnes," Holley said.
The St Ann Bauxite president said he was mindful of the current condition of the industry but said an aggressive sales programme had resulted in increased demand for their product.
"We will have to watch the market as we move forward and are poised to do everything we need to do to continue bringing production up. We have got the capability here for around 4.5 million, or more, on an annualised basis, and we certainly would like to have all of that production moving," Holley said yesterday.
Holley was among a team that included representatives of Noranda, the Ministry of Mining and Energy and the Jamaica Bauxite Institute that yesterday addressed St Ann Bauxite workers at a meeting. He said the 90-day plan to improve production would involve the implementation of new capital projects, including land development.
"We are preparing the implementation of Noranda's core productivity programme, which is going to be vital to us against the competition in the marketplace as we go forward; the aim is to have every employee involved in that, and we want ideas coming up to the management, not just ideas going down from the management," Holley said.
He said the approximately 550 employees at the company will play an important part in the daily operation.
Yesterday, Minister of Mining and Energy James Robertson said the partnership with Noranda represents a 'comeback' for the alumina industry. He said there were some very promising prospects for the industry during this financial year, with some 110 shipments expecting to leave the ports.
Robertson said his government was pleased at the bold step taken by Noranda and that there were new investments in the industry that the administration would be pursuing.
He said, too, that talks were being held with UC Russal, operators of Alpart and Windalco, to see what measures could be implemented, particularly in the area of providing alternative energy supply.
"We have an understanding of the issues that they face; our commitment to giving them an alternative energy supply, liquefied natural gas, is a project that I work on a daily basis; we are doing everything to get the bauxite alumina industry back to full production as quickly as possible," said the minister.
At the same time, general manager at St Ann Bauxite, Pansy Johnson, said workers would soon be brought up to date on Noranda's plan for the company and how the change would impact them.
"Within the next 90 days all our employees will return to full employment; we don't have a corporate plan in place yet, but we are going to be working it through.
We are going to be discussing with the unions, with the employees, so you are going to be informed along the way what we are doing."
 

Itochu to Boost Alumina Investment as Chinese Demand Expands

Bloomberg - 08-Sep-2009

By Aya Takada and Ichiro Suzuki

Itochu Corp. of Japan plans to spend about $350 million to buy stakes in bauxite and alumina projects overseas as rising demand is fueled by economic growth in China, the world’s largest consumer of aluminum.

The company plans to acquire as much as 20 percent in two alumina refineries in Asia or Africa to obtain as much as 350,000 metric tons of supply, Katsuichi Uede, deputy general manager at Tokyo-based Itochu’s non-ferrous and metal materials department, said in an interview.

Aluminum prices have gained 20 percent this year on the London Metal Exchange as China, the world’s third-largest economy, became a net importer. Trading companies such as Itochu and Sumitomo Corp. are raising investment in overseas resources amid increased competition to secure supplies.

"Demand is expected to grow by as much as 5 percent annually, or at a faster pace than steel and copper, as use of aluminum in cars and buildings increases," said Tomomichi Akuta, research analyst at Mitsubishi UFJ Research & Consulting Co. in Tokyo. "The growth will be led by China, which may represent more than half of the global consumption eventually."

The metal for delivery in three months on the LME fell 0.6 percent to $1,855 a ton at 10:58 a.m. Tokyo time. Alumina is a powder refined from bauxite ore and processed into aluminum.

Itochu’s proposed investments would be made by the year ending March 2016 as the company aims to triple its control over alumina refinery capacity to 570,000 tons annually. Of that, 230,000 tons will come from the Worsley project in Western Australia, in which the company has a 5 percent stake, Uede said.

Rising Demand

"Global aluminum demand is expected to rise by 3 to 4 percent a year on average in the next two decades," Uede said yesterday. The growth will be led by China and the auto industries in other countries, he added.

Itochu is in talks with a number of companies about participation in bauxite and alumina projects in Southeast Asia, Uede said, without elaborating. The company estimates at least $1,000 of investment is necessary for each for each ton of alumina production capacity, he added.

Marubeni Corp., a Japanese trading company, said last year it would provide support including logistics and administration to Aluminum Corp. of China Ltd. to build an alumina refinery in Vietnam. The country has 5.4 billion tons of bauxite reserves, the world’s largest after Guinea and Australia, according to a U.S. Geological Survey report published in July.

Vietnam National Coal-Mineral Industries Group, the state- owned mining company, may start bauxite production next year, Duong Van Hoa, vice president of Vinacomin, said on Sept. 5

Middle East

Itochu plans to ship increased alumina supply to smelters in the Middle East as they expand, Uede said. Currently it supplies alumina to countries including China and South Africa.

Middle Eastern countries such as the United Arab Emirates are expanding into businesses including metals and petrochemicals that can benefit from access to cheap fuel. Emirates Aluminium Co., the project to build the world’s biggest smelter, is on schedule to produce its first metal next April, Chief Executive Officer Duncan Hedditch said May 11.

Dubai Aluminium Co., the largest smelter in the Middle East, and Mubadala Development Co., the Abu Dhabi state-run investment vehicle, are partners in the Emal project. Itochu imports aluminum produced by Dubai Aluminum for sales in Japan.

Itochu currently has minority stakes in two overseas refineries for 190,000 tons of alumina a year. Worsley accounts for 175,000 tons and the rest is from Alunorte in Brazil.

BHP Billiton Ltd., the world’s largest mining company, approved a $1.9 billion expansion of the Worsley project last year, boosting capacity from 3.5 million tons a year to 4.6 million tons.

The expansion is expected to be completed in 2011, Uede said. Worsley is owned 86 percent by BHP, 10 percent by Japan Alumina Associates Ltd. and 4 percent by Sojitz Alumina Pty. Japan Alumina is equally owned by Itochu and Sojitz Corp., a Tokyo-based trading company.

To contact the reporter on this story: Aya Takada in Tokyo at atakada2@bloomberg.netIchiro Suzuki in Tokyo at isuzuki@bloomberg.net.

Vinacomin expects to start bauxite production as prices rise

Bloomberg - 08-Sep-2009

Vietnam National Coal-Mineral Industries Group, the state-owned mining firm developing the world’s third-largest bauxite reserves, may start production next year to take advantage of Chinese demand for aluminum.

  ?

The mine, in Tan Rai, Lam Dong province in central Vietnam, may start output as early as August 2010, and produce 650,000 tons of alumina annually by late 2011, Duong Van Hoa, vice president of Vinacomin, said in an interview in Buon Ma Thuot in Vietnam’s Central Highlands. Bauxite is refined into alumina, which is then smelted into aluminum metal.

Vietnam is positioning itself for an increase in demand for aluminum as the global economy recovers. China’s consumption of the metal will rise 4 percent this year because of its economic stimulus plan, Alcoa Inc., the world’s third-largest aluminum maker, said last week.

"We expect prices to rise a lot by the time we start exporting alumina, since prices of metals are all on an uptrend at the moment," Hoa said on September 5 on the sidelines of a conference to promote investment to the Central Highlands region bordering Laos and Cambodia.

Aluminum for delivery in three months fell 0.2 percent to $1,850 a ton on September 4 on the London Metal Exchange. The metal closed at a 13-month high of $2,070 on August 5.

‘Dramatically expand’

Aluminum Corp. of China Ltd., the country’s largest producer, signed a $1.5 billion agreement with Vinacomin in November 2006 to develop a second mine in Nhan Co, Dak Nong province on the Cambodia border. Alcoa agreed in June 2008 to work with Vinacomin to develop the aluminum industry, according to a statement from the New York-based company.

The mine in Dak Nong will produce about 1.6 million tons of refined ore, equivalent to the Lam Dong project, by the end of 2012, Hoa said. Tan Rai is 190 kilometers (118 miles) northeast of Ho Chi Minh City.

"The venture appears to be part of a larger Vietnamese government plan to dramatically expand the exploitation of the Highlands’ bauxite reserves," the US Congressional Research Service said in a July 29 report.

Vietnam has 5.4 billion tons of bauxite reserves, according to a US Geological Survey report published in July. The South-East Asian nation’s reserves are the world’s largest after Guinea and Australia, the report said.

Vietnam expects to export alumina to China and the Middle East, Vinacomin’s Hoa said.

"China is back," and will propel demand for aluminum, Alcoa Chief Executive Officer Klaus Kleinfeld said in an interview last week. Alcoa, the biggest US mining producer, expects demand from China to slow the decline in global aluminum demand this year to 5.5 percent, from 7 percent previously, Kleinfeld said.

Rusal halts Friguia alumina plant in Guinea after export block

Steelguru - 07 Sep 2009

Reuters reported that Russian metals firm Rusal has stopped production at its Friguia alumina plant in Guinea the world's biggest exporter of aluminium raw material bauxite.

The source said that the company halted output at Guinea's biggest industrial project after a ship carrying the industrial mineral for export was prevented from leaving the port of Conakry.

He said that "Since yesterday, we have been banned from exporting our production for nonpayment of an environmental tax. It's the ministry of the environment which has taken this decision."

Mr Mahmoud Thiam mines minister of Russia said that "I have been informed of the decision. Relations between the mining firms which operate there and Guinea's military junta have often been strained."

Months after taking power in December 2008, Captain Moussa Dadis Camara government said that it was investigating the conditions of the sale of the Friguia refinery to Rusal.

Rio Tinto which has spent millions of dollars developing what could be one of the world's biggest iron ore projects, has disputed the government's decision to award a section of its concession to another firm.

(Sourced from Reuters)

Aluminum Fee to Soar 53% to 14-Year High in Japan (Update1)

Bloomberg 09-Sep-2009

By Aya Takada

Sept. 9 (Bloomberg) -- Japan, Asia’s second-largest aluminum importer, agreed to increase the fee it pays to producers by at least 53 percent to the highest in 14 years as surging Chinese demand saps regional supplies.

The premium, a benchmark for buyers in Asia, will climb to $115 a metric ton over the London Metal Exchange cash price in the three months to Dec. 31, four industry executives involved in talks said, quoting deals reached so far. That would be the highest since Japan began mostly purchasing through long-term contracts in 1996, said the people, declining to be identified as the talks are private.

Aluminum climbed 24 percent this year as China, the world’s biggest producer and consumer, became a net importer under a 4 trillion yuan ($586 billion) stimulus plan that shielded the country from the global recession. Increased fees may boost costs for Japanese fabricators such as Furukawa-Sky Aluminum Corp. and Kobe Steel Ltd.

"Strong Chinese demand is the largest factor boosting purchasing costs for base metal users in Japan," Kazuhiko Saito, chief analyst at Tokyo-based commodity broker Fujitomi Co., said today by phone. "The situation is tough as Japan’s domestic demand is still weak, making it hard for manufacturers to pass higher raw material costs to consumers."

Japanese buyers pay a fee in addition to the LME cash price to reflect local supply and demand and to include freight and insurance costs.

Japan’s Economy

The premium, applied to so-called Good Western-grade ingot, rose as high as $75 a ton this quarter, the first gain in a year, as Japan’s economy emerged from the worst postwar recession. Some deals for the next quarter are being still negotiated with offers at $120 or above, the people said.

Aluminum for delivery in three months on the LME gained 0.4 percent to $1,902 a ton at 1:38 p.m. in Tokyo. The metal touched a seven-year low of $1,279 a ton on Feb. 24.

Reduced Chinese exports spurred Asian buyers such as South Korea and Taiwan to boost purchases from Australia, South America and Africa, increasing the premium.

China’s imports of refined aluminum soared 1,481 percent from a year earlier to 1.1 million tons in the seven months ended July 31, as stimulus measures boosted demand from builders and carmakers and the government stockpiled the metal.

Aluminum exports from China fell by 77 percent to 9,147 tons in the same period, according to the custom’s data.

Rusal Shipments

Asian supplies also became scarcer this quarter because of reduced shipments from Russia. Output by United Co. Rusal, the world’s biggest aluminum producer, fell 10 percent in the first half to 1.98 million tons as the company joined Alcoa Inc. and Rio Tinto Group in reducing production to curb a slump in prices.

Rusal halted some Japanese deliveries this quarter after agreeing in June to sell as much as 1 million tons to Glencore International AG, the Swiss commodities trader that owns 9.7 percent of the Moscow-based company, Dow Jones reported June 16.

Aluminum demand in Japan improved as government incentives boosted sales of hybrid cars and electric appliances that consume less electricity. Japan’s shipments of aluminum rolled products rose to 166,673 tons in July, the highest level in nine months, according to the Japan Aluminium Association. Compared with a year earlier, shipments dropped 20 percent as demand from the construction sector remained weak.

Sumitomo Light Metal Industries Ltd. will shut its aluminum extrusion plant near Tokyo in March, the Tokyo-based company said Sept. 2, citing a protracted slump in demand from builders.

Aluminum stockpiles in Yokohama, Nagoya and Osaka ports fell to 174,200 tons at the end of July, according to Japanese trading house Marubeni Corp. That was the lowest level since the company began compiling data in June 1995.

To contact the reporter on this story: Aya Takada in Tokyo atakada2@bloomberg.net.

Caribbean news briefs

The Associated Press - 9/8/2009

(AP) — PORT-OF-SPAIN, Trinidad - Trinidad is forecasting its economy will rebound and grow 2 percent next year following steep, damaging declines in the prices of its energy exports.

Finance Minister Karen Nunez-Teshiera says the Caribbean nation's economy has shrunk 0.9 percent over the last year.

She said in a budget presentation to the legislature that the government will borrow US$1.2 million to cover a shortfall. It is the second consecutive year with a budget deficit for the oil- and natural gas-rich country.

The government is placing its hopes for an economic revival on energy-based projects including the establishment of a plastics industry, at least two aluminum smelters and new exploration and production of oil and gas.

UC Rusal's Alscon stake under threat in Nigeria [UPDATE]

Metalbulletin.com (subscription) - 07 September 2009

Windhoek, Namibia

[Adds comments from Rusal] Nigeria may seize United Co Rusal’s aluminium smelting assets in Nigeria if it follows the advice of a cabinet-appointed committee, which said the Russian company has not invested as agreed in the plant. The company has failed to fulfil this and other conditions of its purchase of a majority stake in the Aluminium Smelting Co of Nigeria (Alscon) in 2006, a five-member committee appointed by the Nigerian cabinet has found. Rusal paid $250 million for a 77.5% stake in Alscon. Germany's Ferrostaal AG and the Nigerian government are minority shareholders with...

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UAE Emal smelter 60pct complete - Report

Steelguru - Thursday, 10 Sep 2009

Reuters reported that Emirates Aluminium planned to be the world's largest single aluminium smelter is 60% completed.

Mr Yousuf Abdulla Bastaki project director of Emal said that "Construction works are ongoing according to plan and the budget allocated by the company, pointing to more than 60% of the project being completed."

Mr Bastaki said that the plant will eventually have the capacity to produce 1.4 million tonnes per year and would come fully online between 2013 and 2014

The company said that Dubal aims to bring the Phase I of the aluminium smelter online in December with a capacity of 700,000 tonnes per year.

Emal is a 50:50 JV between Dubai Aluminium Company and Mubadala Development Company, an investment vehicle owned by the government of the emirate of Abu Dhabi. Abu Dhabi is the capital of the 7 member federation of the UAE.

(Sourced from Reuters)

Alcoa Re-Aligns Global Primary Products Business to Sustain and Accelerate Improvements, Seize Growth Opportunities

Reuters - Sep 3, 2009?

NEW YORK--(BUSINESS WIRE)--Alcoa (NYSE:AA) announced today a re-alignment of its Global Primary Products (GPP) business organization that will sustain and accelerate the many improvements the operations have made, and seize growth opportunities as the economy recovers.

Effective immediately, John Thuestad, 49, has been named to the new position of Chief Operating Officer for GPP Worldwide, reporting to Bernt Reitan, Alcoa Executive Vice President and President GPP. Thuestad was formerly President of GPP-United States.

Jean-Pierre Gilardeau, 57, has been appointed to the new post of President, GPP-North America and Iceland. He had been President, GPP-Canada and Iceland. He will report to John Thuestad and will be responsible for overseeing Primary operations in the U.S., Canada and Iceland.

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Bob Wilt, VP of Operational Excellence in U.S. Primary, will replace Thuestad as President of GPP–United States. Pierre Morin, VP Operations GPP-Canada, will become President, GPP-Canada.

Bernt Reitan said, "These changes strengthen our Primary business on a both a global and regional basis, puts proven leaders in our key U.S. and Canadian markets, and further aligns our organization for continued success."

More details at http://www.alcoa.com/global/en/news/news_detail.asp?newsYear2009&pageID20090903006000en

Sayano-Shushenskaya Hydroelectric Dam Accident

For those of you with fast internet access and an interest in Engineering there is a Preliminary PPS about Sayano-Shushenskaya Accident available at

http://www.kegge.net/Alunews/Accident.pps

The file is 4.2 mBytes

Aluminium Bahrain puts expansion plans on hold

MEED (subscription) - 9 September, 2009

Aluminium Bahrain is delaying work to increase capacity at the world’s largest smelter as the economic downturn reduces demand for its products and global metals prices fall.

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With dwindling reserves of hydrocarbons, economic diversification is a priority for Bahrain. Aluminium Bahrain (Alba) is one of the country’s oldest and most ambitious ventures, created to reduce the country’s dependence on oil, generate export earnings, maximise use of its natural resources and create jobs.

The initiative to build a major aluminium smelter in Bahrain was first mooted in the mid-1960s. Manama saw a gap in the market to position itself as a staging post to link Australia, one of the world’s major exporters of alumina, with the leading consumer markets for aluminium in Europe, the Americas and Asia.

As well as its location, the kingdom had ready access to the gas supplies needed to drive energy-intensive aluminium production. Bahrain has natural gas reserves of about 3.25 trillion cubic feet, much of it associated gas from the Awali oil field. With approval granted in 1968 for a smelter producing 56,000 tonnes a year (t/y) of aluminium, the smelter poured its first hot metal in 1971, with a production capacity of 120,000 t/y.

Mumtalakat Holding Company, the investment arm of the Bahrain government, holds a 77 per cent stake in Alba. Sabic Industrial Investments, a subsidiary of Saudi Basic Industries Company (Sabic), holds 20 per cent and Germany’s Breton Investments holds a 3 per cent stake. Proposals to offer up to 40 per cent of the company through an initial public offering, first suggested in April 2007, have yet to come to fruition.

Since opening 38 years ago, Alba’s plant has been upgraded five times. In 2005, the addition of a new $1.7bn reduction line, Line 5, increased capacity to more than 830,000 t/y, making it the largest modern aluminium smelter in the world.

The expansion of Line 5 included a new power station, cast house and other facilities. France’s Alstom Power was the engineering, procurement and construction contractor to build the power station to support the fifth potline, a project valued at $1.7bn. The consultant to the overall project was the UK’s Mott MacDonald, and the US’ Bechtel carried out the front-end engineering and design contract. Finance was secured through the Industrial Bank of Japan.

Today, Alba’s production capacity stands at 870,000 t/y and the company contributes about 12 per cent to Bahrain’s gross domestic product (GDP).

Creating employment

The smelter and associated downstream industries have emerged as a major source of employment for Bahrain. Alba now employs 3,000 people directly - more than 80 per cent of them Bahraini nationals - and sustains additional jobs in downstream manufacturing companies that use its products.

"Gulf smelters have the advantage not just of geography but of energy supply," says Massimo Rossi, senior consultant with the primary aluminium team at UK metal consultant CRU. "They have access to the gas and electricity resources that they need and can build captive power plants so that they do not have to rely on the national grid.

"This has given them longer-term access to competitively priced energy supply than many smelters in Europe or the US. They are also close to the consumer markets of Europe and to Asian markets such as China, Korea and Taiwan. This offers the benefit of being able to shift supply to meet the strongest demand, and that has been very beneficial."

The company produces four types of aluminium: standard ingots and larger T-ingots, which are used for re-melting; billet, used for extrusion of aluminium profiles or sections; and rolling slabs, which are used in rolling mills for plate sheet and foil.

To do this, Alba imports 1 million t/y of raw alumina, as well as petroleum coke and pitch, through its own marine terminal, which includes a 450,000-t/y coke calcining (a thermal treatment process used in aluminium production) facility and a water desalination plant.

Some 45 per cent of the metal produced supplies Bahrain’s downstream aluminium industry, including companies such as Gulf Aluminium Rolling Mill Company (Garmco), the largest downstream aluminium business in the Gulf, which produces 165,000 t/y of material, including 35,000 t/y of aluminium foil.

Garmco, in which the government holds a majority stake, also owns Midamerica Extrusions, a US-based manufacturer of extruded and rolled products, and has 14 international subsidiaries. In September 2007, it signed a memorandum of understanding to build a plant in Oman that will produce 165,000 t/y of finished material. Construction work on the plant is due to begin in June.

Other local downstream industries that depend on Alba’s products are Bahrain Atomisers International (BAI), Bahrain Aluminium Extrusion Company (Balexco) and Midal Cables, which uses metal delivered while still molten from the Alba smelter to produce conductors, rod and wire. In 1992, Midal launched a subsidiary company, Aluwheel, which exports 500,000 cast wheels a year to automotive manufacturers in Europe and the US. The remainder of Alba’s output is exported to more than 25 countries around the world.

Aluminium is a power-hungry industry. Alba’s site southeast of Manama includes a dedicated energy complex - four power stations able to generate 1,504MW via combined-cycle technology, where waste heat generated by the gas turbines is used to power steam turbines. The plant also supplies electricity to Bahrain’s national grid in the summer peak demand period.

Expansion plans

Before the global economic downturn took hold in mid-2008, Alba’s five-year plan included a provision to increase capacity to 1.2 million t/y. This figure is, it says, "the maximum size for the Alba smelter, logistically and environmentally, to ensure optimum productivity and economies of scale".

The plan to increase output to more than 1 million t/y by 2012 requires a sixth production train, which will only be built if and when Bahrain reaches a deal to source additional gas feedstock. To date, talks have taken place with suppliers in Qatar and Iran.

However, the company announced in January that it plans to delay its expansion for two years, responding to falling global demand for aluminium, because of the worldwide slowdown in construction, and falling production in the shipbuilding, aviation and automotive industries, which in turn has driven down world metal prices.

In mid-May, the price of aluminium on the London Metal Exchange (LME) was hovering at about $1,550 a tonne, half the level of July 2008’s peak of $3,380 a tonne, when it was announced that Alba had put its expansion plans on indefinite hold because of "a shortage of gas needed for power generation".

"Expansion is off the table for the next couple of years," confirmed Mahmood al-Kooheji, Alba’s chairman.

Al-Kooheji said Alba had set up an in-house group to study the likely impact of the downturn on the smelter’s current and future business, and plans to expand. This could mean the prognosis for GCC aluminium producers is less bullish than anticipated.

Regional production has doubled since 2000 to 1.8 million t/y and is projected to achieve a further fourfold increase by 2020, when the region is expected to generate more than 12 per cent of the world’s aluminium supply, according to projections from the Gulf Aluminium Council. Middle East aluminium producers currently account for 5 per cent of the world’s aluminium.

Alba does not release its corporate figures. However, falling revenues because of lower global demand are undoubtedly a factor in its decision to postpone expansion, even though the smelter is now stretched to full capacity, with output currently at 860,000 t/y.

The major challenge Alba faces is securing the liquefied natural gas it needs to generate electricity for the smelter. With global energy demand rising, securing access to gas is not easy. "To date, Alba has been able to take advantage of low-cost energy," says one Dubai-based industry observer. "But its future expansion is being held back by questions over the avail-ability of gas feedstock. The company has been involved in long and complicated negotiations with Iran over gas supply for several years. This uncertainty means Alba is unlikely to be able to expand in the near future."

Another issue is securing access to the raw materials needed. Alba currently imports most of its alumina from mines in western Australia, but competition from the growing number of aluminium smelters in the Gulf is putting pressure on Alba to secure further supplies through long-term agreements.

One option would be to follow its UAE-based rival Dubai Aluminium (Dubal) into upstream investment in the aluminium industry. Dubal is involved in bauxite mining in India and Africa. In May 2007, the company set up a joint venture with Abu Dhabi state investment vehicle Mubadala Development Company (Mubadala), Australia’s BHP Billiton, and its aluminium supply division Global Alumina International, to develop the Sangaredi refinery in the Republic of Guinea. It has also signed agreements to import alumina from bauxite-rich Brazil, through a partnership with Brazilian mining company Vale, which was signed in April.

Alba has in the past hinted that it is interested in setting up partnerships with third parties, possibly in Saudi Arabia or India. It has held talks with several mining companies, including Saudi Arabian Mining Company (Maaden), with a view to securing future supplies. Alba chairman Mohamed Alghatam told MEED in 2006 that the company was discussing Alba’s involvement in Maaden’s integrated alumina refinery and smelter project, but since the project has been split into two phases, effectively delaying the refinery, no announcement has been made.

That the need to secure sources of raw materials could become Alba’s Achilles heel became apparent in 2008, when a dispute with US mining giant Alcoa, which supplied Bahrain with bauxite from its mines in western Australia, ended up in a federal court in the US. Alba is suing Alcoa with a $1bn claim for damages, following a dispute over pricing and supply.

While power supplies account for about one quarter of a smelter’s operating costs, sourcing alumina accounts for a sizeable 45 per cent of total operating costs.

It takes up to five tonnes of bauxite to pro-duce two tonnes of alumina. Once fed into the smelter, this will yield one tonne of aluminium. Securing supplies of bauxite will be critical to future Gulf production of aluminium as regional producers like Bahria seek to increase their share of global production.

Guinea lifts RUSAL export ban - Report

Steelguru - Friday, 11 Sep 2009

Reuters cited Mr Pape Koly Kourouma environment minister of Guinea as saying that Guinea has lifted an export ban on products from Russian metals firm UC RUSAL's Friguia alumina refinery.

RUSAL shut down production at Friguia, the biggest industrial project in the West African country after exports from the port of Conakry were blocked following a dispute over environmental taxes, the latest in a series of disputes between the government and foreign mining firms.

Mr Kourouma said that we have decided to lift the ban on exports. He said that RUSAL, one of several foreign resources firms operating in Guinea must pay environmental tax amounting to the local equivalent of around USD 500,000.

Friguia, one of Guinea's largest employers normally produces around 52,000 tonnes of alumina per month but that was temporarily cut by more than 50% in July as part of a company wide move to reduce production in response to lower demand globally.

In May, Mr Mahmoud Thiam mines minister of Guinea said that the government was reviewing the 2006 sale of Friguia to RUSAL.

Rio Tinto disputes one of the previous government's final acts, the handing of part of its Simandou iron ore concession to another firm but Captain Moussa Dadis Camara's administration has rejected the London and Sydney listed miner's complaints.

RUSAL, which has debts of USD 16.8 billion had already said that it will cut aluminium output by 500,000 tonnes this year before an accident at a power plant in Russia last month which may reduce production by an additional 500,000 tonnes. The company produced 1.98 million tonnes of primary aluminium in the H1 of 2009 down 10% from the same period of 2008. Full year output in 2008 was 4.4 million tonnes.

Plans afoot to resuscitate bauxite plants

radiojamaica.com - Thursday, 10 September 2009

James Robertson.Energy Minister will meet on Thursday with representatives of UC-RUSAL which has controlling interests in three local bauxite plants.

The meeting will seek to discuss plans to resuscitate operations of Kirkvine, Ewarton and Alpart plants,

At a press conference on Thursday morning, Mr. Robertson said his Ministry has been working assiduously to revive the bauxite alumina industry which ground to a halt due to the impact of the global economic crisis.

Mr. Robertson admitted that the three plants were not up to par in relation to production capacity.

"Those three plants their production costs fall in the bottom four percentile in terms of their capacity and cost of production and that is something we have to address,"

"In addressing that we are going to be looking at the cost of energy. The cost of energy is approximately 30% of the cost of running those plants and that is where we plan to get the greatest difference," Mr. Robertson said.

He added that the Jamaica Bauxite Institute (JBI) is trying to determine a costing to put the plants back in full operation.

Jamaica's bauxite/alumina sector has in recent months been affected by the fall off in the international demand for alumina and the closure of two major mining companies.

UPDATE 3-Guinea court reclaims Friguia from RUSAL

Reuters - Sep 10, 2009

By Saliou Samb

CONAKRY, Sept 10 (Reuters) - A court in Guinea has cancelled the 2006 sale of the Friguia alumnia refinery, the West African country's biggest industrial project, to Russia's UC RUSAL, lawyers for the Guinean government said on Thursday.

The decision is the latest development in a dispute between the government, which took power in a military coup in December, and some of the foreign mining firms operating in the West African country.

"The court has decided to annul the transfer of the Friguia refinery," said lawyer Momo Sacko, a legal adviser to the presidency. "That means that from now on, the factory is 100 percent owned by Guinea."

Officials at RUSAL's headquarters in Moscow were not immediately available to comment on the court's decision.

Guinea, a poor country, which sit on huge deposits of iron ore, as well as bauxite, on Africa's Atlantic coast, may try to sell the refinery to another firm.

"We will settle the formalities, but what's certain now is that Guinea is free to negotiate with whichever company it chooses for the renewal of the plant," Sacko said.

ONGOING DISPUTES

Guinea, the world's biggest exporter of aluminium raw material bauxite, has been investigating the conditions of sale of Friguia to the Russian firm.

In May, Mines Minister Mahmoud Thiam said figures seen by the government indicated the plant was sold at around $20 million dollars, far below independent valuations of $250 million, and that a legal process was underway to determine if the sale was legal. [ID:nL1993295]

"We have won for the moment the civil action which consists of bringing all the shares in Friguia back into the hands of the state," said Jean Alfred Mathos, who represented the state in court.

The ruling was made by a court of first instance, and RUSAL has the right to appeal, he said.

RUSAL stopped operations at Friguia last week after the government blocked exports from the port of Conakry during a disagreement over environmental taxes.

On Wednesday, the government lifted that export ban, but said RUSAL was one of three companies that would be audited by a government-appointed committee.

Earlier on Thursday, RUSAL said Friguia was operating and shipping its products as normal.

Among other resources firms with operations in Guinea are world No.2 iron ore miner Rio Tinto (RIO.L)(RIO.AX), and world No.3 gold producer AngloGold Ashanti (ANGJ.J), the latter of which was among the firms the audit committee said would come under scrutiny.

Rio contests the previous government's decision to give a section of its Simandou iron ore concession, potentially one of the world's biggest such mines, to BSGR, a firm which has no history of producing iron ore, though Captain Moussa Dadis Camara's administration has upheld it. (Writing by Daniel Magnowski; Editing by Marguerita Choy)

St. Ann port to be used full time

Go Jamaica - 2009-09-10

Government says the port facilities of the St. Ann Bauxite Company are to go back into near full time operation soon.

The Mining and Energy minister, James Roberston says managing partner, Norando is to increase bauxite shipments from 3 million tonnes of alumina to 4.2 million tonnes per year.

Mr Robertson says the increase in bauxite shipments from the St. Ann port will coincide with improvements being made at the Gramercy dock in New Orleans in the United States.

Gramercy is to process 2.8 million tonnes of bauxite.

According Mr Robertson, the remaining bauxite will be processed by a Glencore-controlled company, Sherwin.

Glencore is the government’s major partner in the St. Ann Bauxite Partners.

The Jamaica Bauxite Institute will carry out the studies on the three remaining plants.

Financial blow for Anglesey

News Wales - 10/9/2009

The Isle of Anglesey County Council yesterday afternoon received written confirmation that Ynys Môn Estates LLP has withdrawn its application for the Tŷy? Mawr project in Llanfairpwll.

County Council Leader, Councillor Clive McGregor, called the news a: "huge blow for Anglesey."

He said: "The County Council was clearly supportive of the Tŷy? Mawr project on an economic basis, especially as the developer had backers in place and maintained that the project could be delivered.

"The County Council would also have vigorously defended its decision to award planning permission for the Tŷy? Mawr project at a public inquiry to be held in November."

The application to create a retail, leisure and office scheme on land near Llanfairpwll was given the go-ahead by the Full Council in January. The Welsh Assembly Government decided to "call in" the application for determination in April.

Cllr McGregor said: "With the application now withdrawn, however, neither the inquiry nor the project itself will go ahead."

"Today's news represents a huge blow and a missed opportunity in terms of new investment and jobs on the Island. Attracting inward investment to the Island is difficult enough at the best of times and, with Anglesey Aluminium's impending closure, we continue to face uncertain times during the current harsh economic climate."

Anglesey Aluminium berth to boost cruise liner tourism?

WalesOnline - Darren Devine - Sep 9, 2009

The closure of smelting firm Anglesey Aluminium could have a silver lining for the Welsh tourism market... bringing large cruise vessels to Holyhead.

Cruise Wales is carrying out a computer-modelling programme to establish whether the metal firm’s port berth could be adapted to cope with 85,000-tonne cruise liners like the Westerdam, which is due to arrive in Holyhead next summer.

The upgrade could cost as little as £500,000, a fraction of the £7m Cruise Wales had estimated it would cost to improve the existing facilities at Holyhead to attract larger lines.

Currently such ships when sailing through the Irish Sea tend to by-pass Wales and call instead at ports like Liverpool and Dublin that have facilities to cope with large liners.

Cruise Wales adviser Margaret Llewellyn said Anglesey Aluminium, which is to end smelting on September 30 with the loss of 250 jobs, is letting the port use its berth.

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read the entire article at

http://www.walesonline.co.uk/news/wales-news/2009/09/10/anglesey-aluminium-berth-to-boost-cruise-liner-tourism-91466-24651375/

RUSAL completes modernization at Krasnoyarsk smelter

Steelguru - Saturday, 12 Sep 2009

RUSAL announced that the completion of its 5 year environmental modernization program of the Krasnoyarsk aluminium smelter. The company invested over USD 300 million in the program.

Earlier KrAZ commissioned a new gas treatment plant the 23rd in succession which marked the completion of the environmental modernization program launched in 2004. The aims of Clean Soederberg a modernization program developed by RUSAL’s Engineering and Technology Centre were to reduce environmental impact and improve efficiency of the smelting facility. As part of the program, KrAZ equipped its potrooms with automatic alumina feeding systems installed new gas treatment equipment, converted to dry anodes and raised amperage in its potrooms.

The program, a RUSAL proprietary solution helps Soederberg smelting facilities, built several decades ago, to improve their environmental performance to an acceptable level and stay environmentally competitive with prebaked anode smelters. For example, the modernization program resulted in a reduction of KrAZ’s emissions per tonne of aluminium output including a 1.5 fold reduction in HF, a 2.7 fold reduction in tar and a 2.5 fold reduction in benz pyrene.

Mr Victor Mann technology development director at RUSAL said that "We believe in the great potential of Soederberg pots which represent over 60% of global aluminium production. This Clean Soederberg project of unprecedented size and results has given a second life to KrAZ. Certain emissions are now almost three times lower than before the project was commenced. We see our biggest challenge as being to apply this experience at RUSAL's other Soederberg plants and to secure global leadership in the highest international environmental standards."

Venezuelan aluminum exports to fall in 2009

Steelguru - Saturday, 12 Sep 2009

It is reported that Venezuela’s aluminum export is projected to slide to 1.4 million tonnes in 2009 from 1.6 million tonnes in 2008.

Bauxilum, the nation owned aluminum producer said that because of the slow demand and low price the company faced difficulty in seeking financial supports to expand its capacity.

According to Bauxilum, they expect to raise USD 284 million in 2010, and USD 80 million will be spent on replacement of old machinery.

U.S.-Russia Business Council Announces Alcoa CEO as New Chairman

PR Newswire (press release) - 11 Sep 2009

WASHINGTON, Sept. 11 /PRNewswire-USNewswire/ -- The U.S.-Russia Business Council (USRBC) announces the appointment of Klaus Kleinfeld, President and CEO of Alcoa Inc., as the Council's new Chairman effective September 25 following the Council's Annual Meeting in New York City. Mr. Kleinfeld succeeds Neville Isdell, who has held the position since 2004 and is stepping down following his retirement as Chairman and CEO of the Coca-Cola Company.

"This is both a promising and challenging time in U.S.-Russia relations," Mr. Kleinfeld said. "While differences may exist in foreign policy, the potential for cooperation in many areas is enormous, from bilateral trade and investment to collaboration on regulatory and other policies. Business will play a key role in identifying and building these opportunities."

USRBC President Ed Verona commented that Kleinfeld's long-standing relations with Russia, combined with Alcoa's considerable investment in that country, make him a natural choice to assume the leadership of the Council. "Klaus brings an extensive network of personal relationships in Russia and an infectious optimism about the prospects for achieving progress in the bilateral relationship. He is the ideal leader for the Council in this era of the 'reset' in U.S.-Russia relations."

A native of Germany, Kleinfeld has been with Alcoa since being named a director in 2003. He was named President and CEO of Alcoa in May 2009, after a 20-year career with the global electronics and industrial conglomerate, Siemens AG, where he served as chief executive officer.

Alcoa is the world's leading producer of primary aluminum, fabricated aluminum and alumina, with 63,000 employees and operations in 31 countries. Alcoa entered the Russian market in 1993 when it opened a facility in Lyubachany, and acquired two major manufacturing facilities in 2005 in Samara and Belaya Kalitva. The company's total investment in Russia is approximately $750 million.

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The USRBC (www.usrbc.org) is a Washington-based association representing approximately 250 companies, among them some of the leading firms in the U.S., Russia and Europe. Founded in 1993, its primary mission is to promote trade and investment between the United States and Russia.

SOURCE U.S.-Russia Business Council

China's surplus aluminium capacity

Mineweb - Friday , 11 Sep 2009

The chairman of China's biggest aluminium company reckons the country has excess production capacity of 20-30% for aluminium and alumina

DALIAN, China (Reuters) -

China currently has 20-30 percent excess production capacity of both primary aluminium and alumina, Xiong Weiping, the chairman of China's top aluminium firm Chalco (2600.HK: Quote) told Reuters on Friday.

He said the surplus would not last forever, but its duration would depend on the pace of economic growth.

Xiong also said that Chalco's parent firm, state-owned metals conglomerate Chinalco, would continue unswervingly on its strategy of becoming an international multi-metals firm.

(Reporting by Zhang Shengnan, Aileen Wang and Tom Miles; Editing by Jonathan Hopfner)

© Thomson Reuters 2009 All rights reserved

Ormet Posts Profit For Second Quarter

Wheeling Intelligencer - September 11, 2009

By MICHAEL SCHULER

HANNIBAL - A glimmer of economic hope emerged from Monroe County this week as aluminum maker Ormet Corp. announced it has turned a profit.

Ormet reported a net profit of $4.3 million for the second quarter of this year and a $13.9 million net profit for the six-month period ending June 30.

This is a big difference from a year ago, when the company reported a net loss of $5 million for the second quarter and a net profit of $4.2 million for the six-month period ending June 30, 2008.

While the profit is up, the company reported total net sales of $116.1 million for the second quarter, a drop from the $133.7 million in sales for the second quarter 2008. The company attributed the decline in sales to the reduction in the number of potlines used and lower prices of non-toll aluminum sow on the London Metal Exchange.

The cost of legal and professional fees also is being attributed to a $700,000 increase in operating costs from the second quarter 2008. This stemmed primarily from a lawsuit the company filed earlier this year in U.S. District Court regarding a dispute with Glencore Ltd., which was providing Ormet with alumina. Ormet claimed that Glencore has not honored its contract.

Alumina is the primary component in the production of aluminum. Ormet reported in April that all of its production capacity had been dedicated to the production of aluminum for Glencore under a tolling agreement.

Ormet received a partial settlement from the tribunal ruling and the supply of alumina from Glencore ended. Ormet also was paid a monetary award from Glencore.

Because of the dispute, the company cut back on production. On July 30, Ormet issued a Worker Adjustment and Retraining Notice that 833 hourly and 149 salaried employees could lose their jobs by the end of this year. In August, however, the company backtracked, saying it would lay off no more than 100 workers and keep four of its six potlines open after the company began getting its own alumina.

"Ormet has made significant progress with the new power contract clearly on the horizon, conclusion of the arbitration and the committed metal position for the remainder of the third quarter and a portion of the fourth quarter," said Mike Tanchuk, president and chief executive officer, Ormet. "We can now direct our focus on next steps which include longer term raw material supply and the refinancing of the company."

Rio sells Alcan Cable

Australian Mining - 15 September 2009

by Michael Mills

Rio Tinto agreed to the sale of a chunk of its Alcan Engineered Products business overnight, signing a definitive agreement with US-based Platinum Equity.

The company agreed to sell 56% of Alcan Engineered Products’ Cable Division.

Cable manufactures aluminium energy cable products for the North American utility and construction markets.

The business has seven production sites in the USA, Canada and China.

Rio Tinto Alcan will retain the outstanding 44% stake and will remain a key supplier of aluminium rod and molten aluminium to Cable's plants, the company said.

According to Rio chief financial officer Guy Elliott, this is the first time the company has entered into an agreement with a private equity partner.

"We will be able to step back from day to day management of the business but retain an economic interest in its recovery as market conditions improve," he said.

According to Platinum partner Brian Wall, the firm will provide Rio Tinto an opportunity to participate in the future recovery of the business without having to manage that recovery themselves.

"We will execute a carve-out and transition the business to a standalone entity," he said.

The terms of the transaction are confidential, although both parties expect it to close in several weeks.

Is the smelter viable?

Trinidad & Tobago Express - September 13th 2009

Symposium talks

Rohandra John

It is not enough for government to say that the proposed Aluminium Smelter Plant in La Brea is economically viable, it must provide the proof.

This was the general consensus of participants gathered at a symposium entitled "Economics of the Alutrint Smelter Plant" held at St Mary's College in Port of Spain yesterday.

Anti-smelter activists and other concerned citizens gathered at the symposium again called on Government to provide a Cost- Benefit Analysis of the smelter plant, saying that such information should be made public. They pointed out that while Government continues to tout the project as being economically viable it is yet to present a Cost-Benefit Analysis and other financial details that will substantiate this claim.

Participants at yesterday's symposium also passed a resolution that called on Govenrment to release "immediately to the people of T&T the rationale for the Aluminium Smelter, including detailed costs of natural gas and other inputs and expected revenues over the next 20 years." The resolution also calls on the Government to suspend "with immediate effect the Aluminium Smelter project" in the event that this information was not forthcoming.

Russia says Guinea alumina ruling could damage ties

Reuters South Africa - Sep 12, 2009 8:12am GMT

Robin Paxton

MOSCOW (Reuters) - Guinea on Friday stood by its decision to strip UC RUSAL of a large alumina refinery in spite of warnings from Russia that relations with the West African country could be damaged.

UC RUSAL, controlled by Russian billionaire Oleg Deripaska, also staked its claim to Guinea's biggest industrial project. The world's largest aluminium producer issued a statement to say the Friguia refinery was its "legitimate property."

A court in Guinea, the world's biggest exporter of aluminium raw material bauxite, cancelled the sale in 2006 of the Friguia refinery to UC RUSAL, the latest development in a dispute between the new government and foreign miners.

"Guinean authorities have made an attempt to expropriate UC RUSAL's property in court," the Russian Foreign Ministry said in a strongly worded statement.

The ministry said it hoped Guinea would take responsibility for the "possible consequences of such actions for the general climate of traditionally constructive Russian-Guinean relations, as well as for the social-economic situation in the country."

The government in Guinea, which also sits on rich iron ore and gold reserves, took power in a military coup in December. It has set up a committee to audit UC RUSAL and two other foreign miners, including AngloGold Ashanti.

"The audit committee went to court with their findings and obtained a judgement in their favour," Guinean Mines Minister Mahmoud Thiam told Reuters on Friday, adding that he wasn't aware of any statement by the Russian government.

"RUSAL is free to appeal and I assume will," he added.

"LEGITIMATE PROPERTY"

Thiam said in May that figures seen by the government indicated Friguia was sold at around $20 million, far below independent valuations of $250 million.

UC RUSAL said it had purchased Friguia in full compliance with Guinean legislation.

"We consider the plant to be our legitimate property," the Russian company said.

It said it had not received a formal resolution of the court and further actions of the company will be determined in compliance with the applicable legislation upon the receipt of the court decision."

The ministry said it would follow the situation closely.

UC RUSAL says on its website, www.rusal.ru, that it is the largest foreign employer in Guinea. Facilities controlled by the Russian company employ about 2,400 people, says UC RUSAL, which also owns bauxite deposits in the country.

UC RUSAL says on its website that the Friguia refinery has capacity to produce 640,000 tonnes a year of alumina and alone employs more than 1,000 people. The plant is located in Fria, a town 160 km (100 miles) from the capital, Conakry.

UC RUSAL stopped operations at Friguia last week after the government blocked exports from the port of Conakry during a row over environmental taxes. The ban was lifted on Wednesday.

Lawyer Momo Sacko, a legal adviser to the presidency, said on Thursday that Guinea was "free to negotiate with whichever company it chooses for the renewal of the plant."

© Thomson Reuters 2009 All rights reserved

Alcoa`s AWAC Opens Juruti Bauxite Mine in Brazil

Reuters - Tue Sep 15

Alcoa Moves to Top Quartile in Low-Cost Production;

New Mine A Benchmark in Sustainable Development

NEW YORK--(Business Wire)--

As part of Alcoa`s (NYSE:AA) ongoing effort to continually move its global primary products operations down the cost curve, Alcoa today commissioned the opening of its new bauxite operations in Juruti, Brazil. The Juruti operations,

which are part of the Alcoa World Alumina and Chemicals (AWAC) joint venture with Alumina Limited in which Alcoa holds a 60 percent share, consist of a port facility, a mine and a 50 kilometer rail system to the port. Initial output at the mine will ramp up to 2.6 million metric tons per year (mtpy).

Bauxite from Juruti will be shipped to the Alumar alumina refinery in Sao Luis, Brazil which is undergoing a 2.1 million mtpy expansion program that will bring total production there to 3.5 million mtpy. Following the expansion, Alcoa Aluminio and AWAC combined hold a 54 percent share of the refinery. The

remaining share is held by BHP Billiton (36 percent) and Rio Tinto Alcan (10 percent). The Alcoa share of the combined investment for the two Brazil initiatives is approximately US$2.2 billion and will place Alcoa`s overall

manufacturing system in the top quartile on the global cost curve in terms of low-cost production. The refinery expansion is on-schedule for commissioning later this fall.

"We have taken steps to make the Juruti project the best mining project in the world…world-class in terms of efficiency and our commitment to sustainable development principles," said Franklin Feder, President of Alcoa Latin America.

"This mine will serve our operations in Brazil and lower our costs. At the same time we will mine bauxite and return the area to the same, if not better, condition than when we initially arrived. Our commitment is to deliver on both the business efficiency and the stewardship of the region."

The Juruti Project will mine - and re-vegetate - a total of 6,000 hectares over a period of 40-60 years. That`s equivalent to one day`s worth of the current deforestation in the Amazon according to the latest data published by Brazil`s Ministry of the Environment. Recognizing that no permanent deforestation is

acceptable, Alcoa has already been working with NGO`s and re-forestation experts for years to ensure that the mined-out areas will be totally re-vegetated with native species. For every Brazil nut tree removed during the mining process,

Alcoa will replant 10 trees. And for every other species of tree impacted during the process, Alcoa will replant 2 trees for each tree removed. In total, Alcoa estimates it will plant 15 million trees over the next 50 years in the Juruti region. For more information on the Juruti project, go to www.alcoa.com/juruti.

Rusal Won’t ‘Dare’ Seek Arbitration, Guinea Says (Update1)

Sept. 15, 2009 (Bloomberg)

By Alpha Camara

United Co. Rusal won’t "dare" challenge Guinea’s seizure of the Friguia alumina smelter through international arbitration because it was improperly acquired, an adviser to the African country’s president said.

The Moscow-based company should exercise its right to challenge the Sept. 10 decision made by a Guinean court within the 10 days stipulated, the adviser, Momo Sacko, said in an interview from Conakry late yesterday. Rusal has said it may seek arbitration and says the plant is its "legitimate" property.

Guinean President Moussa Camara said in April he had asked the justice ministry to consider legal action over Rusal’s deal because in 2006 Guinea was paid $19 million for the assets by Rusal, while consultants had valued them at $257 million, he said.

"They will not dare to lodge a complaint elsewhere," Sacko said. If they do not appeal in Guinea "they can consider themselves as losers."

Rusal wasn’t immediately available for comment.

While the plant was taken over by Russky Alyuminiyum it is now operated by Rusal and this breaches the agreement with the government, Sacko said. Russky Alyuniniyum, which means Russian Aluminium, is the former name of Rusal before its merger with Sual Group in 2006.

Guinea’s government is capable of managing the plant on its own and may choose to do so rather than seeking a new partner, Sacko said.

"Guinean experts in the past proved they can indeed manage the company and make it profitable," Sacko said.

‘Reviewing Agreements’

Guinea, the largest exporter of bauxite used to produce aluminum, in December ordered Rio Tinto Group, the world’s second-biggest iron ore producer, to hand over part of an iron- ore concession. The country is also reviewing agreements between the previous government and companies including AngloGold Ashanti Ltd. Camara took power last year after a military coup.

Friguia has the capacity to produce 640,000 metric tons of alumina a year, according to Rusal’s Web site. Bauxite is an ore used to make alumina, which in turn is used in the manufacture of aluminum.

To contact the reporter on this story: Alpha Camara in Lagos at acamara4@bloomberg.net

BHP Says ‘No Question’ to Build Guinea Aluminum Plant (Update1)

Sept. 15, 2009 (Bloomberg)

By Firat Kayakiran

Sept. 15 (Bloomberg) -- BHP Billiton Ltd., the largest mining company, is certain it will build a planned $4.8 billion aluminum plant in Guinea even after the government queried some deals between foreign companies and the previous administration.

"Guinea will be developed, no question about that," Jon Dudas, the company’s head of aluminum, told an industry conference today in Dusseldorf, Germany. "There’s a lot of fear in Guinea at the moment but there are some positive aspects as well." He didn’t say when construction will begin.

Melbourne-based BHP is developing the alumina refinery with Global Alumina Corp. and Dubai Aluminium Co.

Guinea, led by President Moussa Camara, won approval from a local court to seize a refinery owned by United Co. Rusal, the world’s largest aluminum maker, presidential adviser Momo Sacko said on Sept. 11. Rusal yesterday said it hadn’t received court notification and would use "all legal means" to keep control of the site. Camara took power last year after a military coup.

In December, Guinea, the largest exporter of bauxite, told Rio Tinto Group to hand over part of an iron-ore concession. The country is also reviewing accords between the last government and companies including AngloGold Ashanti Ltd. Alumina is refined from bauxite ore and used to make aluminum.

Camara took power on Dec. 23 in a coup following the death of Lansana Conte, who ruled for 24 years.

BHP’s planned 3.3 million-metric-ton-a-year refinery, which also includes a bauxite mine, was delayed after alumina demand slumped and construction is expected to begin at about the end of next year, Toronto-based Global Alumina said in May. The refinery is expected to take about four years to build and start up, Global Alumina Chairman Karim Karjian said at the time.

BHP and Global Alumina each own 33 percent of the development, while Dubai Aluminum controls 25 percent and Mubadala Development Co. the remainder.

To contact the reporter on this story: Firat Kayakiran in Istanbul at fkayakiran@bloomberg.net

UPDATE 1-S Africa to renegotiate long-term smelter contracts

Reuters - Tue Sep 15, 2009

* Eskom posted big loss on long-term aluminium contracts

* BHP says contract prices internationally competitive

By Wendell Roelf

CAPE TOWN, Sept 15 (Reuters) - South African power utility Eskom [ESCJ.UL] will have to renegotiate long-term aluminium contracts, the main factor behind the utility's record annual loss, Public Enterprises Minister Barbara Hogan said on Tuesday.

Eskom reported a loss of 9.7 billion rand ($1.30 billion) in August, arising mainly from fair value losses from derivative contracts linked to the price of aluminium and called "embedded derivatives". [ID:nLR677617]

Eskom had signed multi-decade aluminium smelter contracts with BHP Billiton (BHP.AX)(BLT.L), one of the world's top mining companies. BHP defended the price it had negotiated as "internationally competitive". [ID:nLS663418]

"The embedded derivatives is a big problem. We will have to renegotiate that contract for embedded derivatives," Hogan told parliament's public enterprises portfolio committee.

"It is a complete misnomer to say that the embedded derivative contract was actually a hedging risk, that is completely wrong."

Eskom, which is struggling to meet growing demand in Africa's biggest economy, has a funding shortfall to pay for its 385 billion rand power expansion programme.

In the 1970s, when Eskom had surplus power, it sought deals with companies such as BHP to pay for electricity based on tariffs linked to the price of metals.

BHP had based a decision to invest $6 billion to build its aluminium smelters in South Africa because of the availability of long-term power supply contracts.

According to Eskom, some of these commodity-price linked contracts had more than 20 years to run.

The contracts are based on commodity prices, the exchange rate and the standard electricity price.

"The embedded derivative was a contract that was entered into when there was surplus energy with smelters," said Hogan.

"We have already been in discussion with some of the companies with smelter interests and we will have to renegotiate that contract," she said.

© Thomson Reuters 2009 All rights reserved

BHP Billiton: Focused On Upstream Aluminum, To Add Assets

EasyBourse.com - 16 sep 2009

By Andrea Hotter Of DOW JONES NEWSWIRES DUESSELDORF

-(Dow Jones)- BHP Billiton PLC's (BHP.LN) aluminum business will continue to remain focused on the production of bauxite, alumina and smelted metal, and will look for "good tier resources in the ground" as it grows, the company's aluminum president said Tuesday.

"We need to pick a part of the production chain," Jon Dudas told the Metal Bulletin aluminum conference in Duesseldorf, Germany, noting that the company doesn't plan to focus on rolled products, known as the downstream part of the production chain.

"We'll look for good tier resources in the ground and good power to convert that" into production, he added.

Dudas said as an integrated aluminum producer, BHP Billiton generates power at various sites around the world.

"Power is absolutely a function of what's the lowest cost availability," he added.

"We'll still look to develop power as it's important to any smelter we control in the future," he told delegates.

Aluminum production is extremely energy intensive, with power accounting for around a third of overall production costs.

Researchers collaborate to reduce energy use in aluminium production

Australian Metal Worker - 17 September 2009

SCIENTISTS from CSIRO and five universities are researching ways to reduce the amount of energy used in the primary production of aluminium.

Primary production of aluminium is highly energy intensive. According to the researchers, reducing the amount of energy used will help the Australian aluminium industry maintain competitiveness while increasing sustainability and energy efficiency.

The ‘breakthrough technologies for primary aluminium’ research cluster brings together researchers from Swinburne University of Technology, the University of Auckland, the University of New South Wales, the University of Queensland, and the University of Wollongong, in collaboration with CSIRO scientists.

The Australian Aluminium Council has welcomed the establishment of the research cluster, saying it addresses a fundamental need of the aluminium industry.

The researchers will investigate design improvements for high temperature aluminium reduction cells such as new materials for sidewalls and cathodes, improvements to process control and regulation, and breakthrough technologies for novel electrolytes, non-consumable anodes and multistage high temperature production.

Chinese Aluminum Giant Looks Towards Iceland

IcelandReview - 16/Sep/2009

A number of companies have expressed interest in Icelandic geothermal energy company Theistareykir ehf. Chinese authorities are considering purchasing a 32 percent stake in the company, likely on behalf of Chinalco, the country’s largest aluminum manufacturer.

Further information has been requested and the Chinese Embassy in Iceland confirmed yesterday that a Chinese delegation had announced plans for its arrival in Húsavík, where Theistareykir ehf. is headquartered, next weekend or early next week, Morgunbladid reports.

Energy company Nordurorka, national power company Landsvirkjun and Húsavík Energy (OH) all hold a 32 percent share in Theistareykir ehf. and Nordurorka is interested in selling its share. OH intends to use its preemption.

Others who have expressed interest in the company include Alcoa Fjardarál, which operates an aluminum smelter in east Iceland, and HS Orka, an Icelandic geothermal energy company, which is now in 43 percent ownership of Canadian Magma Energy.

A declaration of intent between Alcoa, the government of Iceland and Nordurthing municipality on harnessing energy in the geothermal area Theistareykir for an aluminum smelter at Bakki, near Húsavík, expires on October 1.

While the local government of Nordurthing formally decided yesterday to renew the declaration of intent with Alcoa with eight votes against one, it remains uncertain whether other parties involved agree.

However, Alcoa is still looking for ways to harness geothermal energy in Theistareykir.

According to Morgunbladid’s sources, representatives of Icelandic pension funds have been approached on possible participation in funding energy harnessing in Theistareykir. That matter is in the initial stages and pension funds are looking into the proposal.

Government leaders announced yesterday that they are in agreement that the first option on further energy harnessing is a hydropower plant at Búdarháls by the river Thjórsá. Theistareykir and geothermal area Bjarnarflag by Mývatn are other options that are being considered.

"I find it very important that operations such as the Búdarháls power plant are launched and that we arrange matters in such a way that projects can also continue in north Iceland," said Minister of Industry Katrín Júlíusdóttir.

Aluminium losing its glister – BHP Billiton

Creamer Media's Mining Weekly - 16th September 2009

By: Martin Creamer

JOHANNESBURG (miningweekly.com) – Aluminium was losing its appeal, BHP Billiton chief commercial officer Alberto Calderon said on Wednesday.

Calderon told Citigroup analyst Clarke Wilkins during a marketing briefing that the long-term issue with aluminium was that China was not only self-sufficient in the metal, but would also become a long-term exporter of aluminium.

BHP Billiton's glowing reports on copper, iron-ore and energy minerals had prompted Wilkins to ask whether the company's omission of any reference to aluminium and nickel in the briefing signalled that it was less optimistic on the outlook for those two metals.

Calderon replied that China, being an exporter of aluminium rather than importer, limited aluminium to being a good business, "but certainly not one with great potential".

BHP Billiton operates large aluminium smelters in KwaZulu-Natal in South Africa and at Mozal in Mozambique.

"We are happy with the aluminium assets that we already own. There are tier-one opportunities with aluminium assets in Mozal and the mandate of the president of aluminium is try to expand into tier-one opportunities, but clearly the house view is that aluminium is not in the league of coking coal, iron-ore, copper, potash or petroleum," Calderon said.

On nickel, he said that the "massive presence" of pig iron nickel had put a structural ceiling on the nickel market.

In China, 80 000 t of pig iron nickel had come into the market, as a reaction to the high nickel prices of the boom period.

"What we already have in Cerro Matoso and Nickel West are tier-one assets. If we could get similar assets, we would be happy to do so, but we probably would not go the route of more Ravensthorpe-type downstream investments," Calderon added.

Cerro Matoso is in Colombia and Nickel West is in Western Australia.

NALCO to invest in nuclear power project

Reuters India - Wed Sep 16, 2009

By Jatindra Dash

BHUBANESWAR, India (Reuters) - State-run National Aluminium Co Ltd (NALCO) plans to invest in a nuclear power project to give the metal maker a new revenue stream, company directors said on Wednesday.

NALCO hopes to sign a joint venture agreement by the end of this month with state firm Nuclear Power Corporation of India Ltd for a minority stake in one of its projects, B.L. Bagra, NALCO's director for finance, said.

"In one of the projects, of 1,000 MW, we are partnering with them as a minority partner with a possible stake of 40 to 49 percent," he said.

"It is an additional business line... We can earn money being an independent power producer," A.K. Sharma, director for production, said.

Both officials declined to say how much NALCO would be investing.

NALCO, India's third-largest aluminium maker, produced 361,262 tonnes of aluminium in 2008/09 that ended in March. It has a 960 MW thermal power plant in Angul in Orissa that feeds its aluminium smelter in the same state.

Glencore, China's CIC in cooperation pact: sources

Reuters - Polly Yam, George Chen - Thu Sep 17, 2009

Asian shares pull back, dollar gains respite Nikkei falls 1.2 percent, Aiful news hurts financials Oil falls towards $72, as drop in Asian equities weighs More Business & Investing News... By Polly Yam and George Chen

HONG KONG (Reuters) - China's $200 billion sovereign wealth fund has added privately-held commodities trader Glencore International AG GLEN.UL to its roster of approved investment partners as it deepens its access to global raw material markets, two sources familiar with the matter said on Thursday.

A source familiar with China Investment Corp's strategy said Glencore and CIC's fixed-income department recently concluded a preliminary "commodities product investment agreement." The source was not able to offer any additional details.

A manager at a trading and investment firm in Asia, which is a client of Glencore, said top management from Glencore visited CIC in Beijing in August and signed a memorandum of understanding in which CIC agreed to invest in Glencore's products or bonds.

A CIC spokesman declined to comment when contacted by Reuters.

It was not immediately clear how CIC would work with Glencore, the world's biggest commodities trader, which typically trades its own book. But Glencore also has a derivatives trading venture with Credit Suisse, which has an expanding business offering commodity investment products to customers.

CIC, founded in late 2007 and the youngest major player of the world's sovereign fund families, has set up client-like relationships with many banks and funds already, relying on external asset managers for some investment areas where it is not strong enough to play alone.

For example, CIC committed $800 million in a new $6 billion global Morgan Stanley (MS.N) real estate fund late last year, thereby allowing CIC to become an investor of the fund as well as a client of Morgan Stanley in the real estate investment area.

CIC was also reported by Britain's Independent on Sunday last month to be one of six companies interested in lending cash to Glencore in return for a stake in the trading house.

Commodities is a relatively new investment area to CIC as the sovereign fund set up its commodities team within its fixed-income department only late last year.

The state fund so far has less than 10 investment professionals specializing in commodities, so the sovereign fund has to rely on external managers for investments in commodities area, said a source familiar with CIC's investment strategy.

Glencore, founded in 1974, has been one of the top sellers of primary aluminum, nickel, alumina and base metal concentrates to the Chinese market for decades.

Glencore International, the world's biggest commodity trader, and Credit Suisse (CSGN.VX) were in advanced discussion about creating the world's first physically backed aluminum exchange traded fund (ETF), four industry sources across Asia said.

Speculation over a possible IPO of the secretive commodities giant, estimated to be worth up to $40 billion, has been rife in recent months, but bankers told Reuters in June that any public listing was likely to be years away.

(Editing by David Cowell)

Alcoa CEO sees sustainable, slow recovery-magazine

Reuters - Marilyn Gerlach, Simon Jessop - Thu Sep 17, 2009 7:12am EDT

FRANKFURT, Sept 17 (Reuters) - The world economy is now on its way to sustainable recovery but the way up will be a slow one, the chief executive of aluminium producer Alcoa Inc (AA.N) told a German magazine on Thursday.

"The freefall has ended... I now see again a series of positive signs," Klaus Kleinfeld told Capital.

"I believe the uptrend is sustainable but I do not expect that we will have a quick, jerky upward movement. I believe the level will stabilise and then gradually proceed further up."

He said the aluminium price is now at $1,900 per tonne after having fallen as low as $1,100 per tonne.

"This increase is a completely important indicator," he added.

A second indicator is that distributors' inventories are empty, with inventory depletion reaching levels "never seen since Alcoa was founded".

"More and more traders are asking for our delivery conditions. They recognise that they are unable to deliver as soon as the demand starts. They are afraid now that they will miss the first surge of demand," Kleinfeld said.

He said the usual dent seen during the summer break has not materialised to a large extent. "There is not a region in the world, not even in Europe, where the holiday effects have always been the strongest, where we see a slackening in demand," he said.

Kleinfeld said the recovery has already started in Brazil, and he expects India will post growth again this year.

China is for him a "phenomenon", having put out the most intelligent economic stimulus programme, and will achieve its 8 percent growth target for this year.

He said there are also positive signs emerging in the United States, citing an increase in housing sales, orders for manufactured goods and car production. (Reporting by Marilyn Gerlach; editing by Simon Jessop)

South Africa: Rusal Outcome to 'Set Tone for Guinea Investors'

AllAfrica.com - 17 September 2009

Saliou Samb And Daniel Magnowski

Johannesburg — Resources companies with operations in Guinea will be unsettled by a court decision to rescind a deal with Rusal, but even a jumpy Guinean government is unlikely to throw out the economically vital miners.

A court in the world's biggest bauxite exporter said last week that the 2006 sale of the Friguia alumina refinery to Russian metals giant Rusal was unlawful, and the Guinean state would resume ownership of its largest industrial operation. Since then, the government said it was open to talks with Rusal, the world's biggest aluminium maker .

The court's decision is the latest in a string of disputes between the government of Capt Moussa Dadis Camara -- who took power in a military coup in December after the death of president Lansana Conte -- and the foreign mining groups that work in the west African country.

Government rhetoric has become increasingly confrontational in recent weeks, after an easing of its aggressive stance earlier this year, but behind the scenes there is room for manoeuvre.

"I think the government will not break completely with Rusal, for practical reasons," a Rusal official said this week, speaking on condition of anonymity. "The government knows if it ruptures brutally with Rusal, it will have problems selling alumina, and above all taking over all the costs of the plant. That makes me believe the government wants more money in this case."

Guinea has repeatedly referred to the discrepancy between the price for which Friguia was sold by the Conte government, and what it says is an independent valuation.

Economic Control Minister Al Hassen Onipogui said this week: "For the moment, we've only calculated the loss made in the sale of the plant to be the difference between 22m (sale price) and the 250m estimated to be the minimum real value of the plant."

Signs are that the government would welcome a financial settlement, rather than take over a refinery. "The sale was illegal ... and our partners know Guinea was totally wronged," Mines Minister Mahmoud Thiam said. Thiam is seen as a moderate voice in Camara's inexperienced, sometimes erratic government. "(Rusal) know they can contest the judgment, but they can also come to the negotiating table."

Rusal maintains it is legally entitled to the 52000-ton-a-month refinery, while Russia has accused Guinea of trying to "expropriate" Rusal property.

Diplomatic outrage may conceal a willingness to do business. "I think Rusal has understood, because at a higher level, we have had contact which leads us to believe they are ready to negotiate," Thiam said.

The motivation for taking on Rusal may be political as well as financial. Camara has seen opposition towards his junta grow in the past month as speculation intensifies that he will stand in presidential polls early next year. By setting out his stall as champion of the national interest, he has sought to regain some support garnered in the early days of power fighting corruption.

"It's strategic for the junta to take control of something so important for the country and sell it on their own terms," said Rolake Akinola, west Africa analyst for Control Risks, a London-based consultancy.

For groups such as world number two iron ore miner Rio Tinto and number three gold miner AngloGold Ashanti , which signed contracts under the Conte government, there may never be true security.

"Commercial interests will come into the calculation but this reinforces the risk of contractual instability," Akinola said. "The key factor against mining firms is that deals were struck under Conte."

What happens next will probably set the tone for investment in Guinea. "Everything depends on the way in which this dispute is resolved, because right now the signal sent out by the authorities is not good for investors, who may fear finding themselves in the same situation," the Rusal source said.

Even if Camara would like to take a harder line, the economic reality that mines are responsible for about 70% of exports limits his options.

"The government will only push so far," Akinola said. "They've not driven anyone out of the country."

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India's NALCO gets approval for bauxite mine

Reuters - Fri Sep 18, 2009

NEW DELHI, Sept 18 (Reuters) - Indian state-run National Aluminium Co Ltd (NALCO) (NALU.BO) said on Friday it had got the federal government's nod for bauxite mining lease in Andhra Pradesh state, where it plans to build a refinery.

NALCO said in a statement it was planning to build a 1.4 million tonne alumina refinery in the Visakhapatnam district of the southern state at an estimated investment of 60 billion rupees ($1.2 billion).

The company said the new mines are estimated to have bauxite reserves of 85 million tonnes. ($148.1 rupees) (Reporting by Devidutta Tripathy)

Aluminum Makers May Be Most Hurt by European CO2 Regulations

Bloomberg - Sept. 18 2009

By Jeremy van Loon

Aluminum makers such as Rio Tinto Group may be hurt more by Europe’s emissions rules than most manufacturers, according to a study of polluting companies that found the majority suffered no significant new costs.

Melting alumina requires so much electricity that London- based Rio Tinto and Alcoa Inc. are more affected by higher electricity costs brought on by carbon-dioxide limits.

Some may consider moving to regions without emissions caps as the European Union toughens its emissions limits, according to the research on nine companies that discharge 5 percent of the CO2 regulated in the EU emissions-trading program.

The report, written by The Climate Group, an environmental organization, and commissioned by the German Marshall Fund, explored economic and competitive impacts of rules that are being studied in the U.S. The authors said they aimed to "inform the current U.S. Congressional debate" about the effects of requiring permits to release CO2.

Companies that participated in the study include cement maker Lafarge SA, drugmaker Johnson & Johnson and U.K. utility Centrica Plc as well as an unidentified "global" aluminum maker and a German engineering company.

Rio Tinto, Alcoa and BHP Billiton Plc are among the world’s largest makers of aluminum, a metal used in planes, beer cans and bicycles. Rio Tinto plans to close a smelter in Anglesey, Wales, at the end of this month because it could not renew its power-supply contract at a low enough price, company spokesman Nick Cobban said in an interview.

Pollution Allowances

A system to cap emissions and then create a market for the trading of spare pollution allowances is the centerpiece of U.S. President Barack Obama’s proposal to fight global warming. The House of Representatives passed a cap-and-trade measure in June and the plan now faces debate in the Senate.

The European Union is gradually limiting the greenhouse gases emitted by its 11,000 factories and power plants as part of the world’s largest carbon-trading system. The EU is phasing in auctioning of permits that are now largely granted for free. Aluminum makers are not regulated directly in the EU and are set to be included in the rules in 2013.

Overall, carbon limits and trading have had little or no impact on profits at the companies surveyed, the study said. The rules have made companies invest in new assets that have created "shareholder value," the authors of the report said.

"At an operational level, a market price for carbon has led companies to improve the way they monitor and report their production costs," the authors wrote.

To contact the reporters on this story: Jeremy van Loon in Berlin at jvanloon@bloomberg.net.

EU firms insist carbon caps have not damaged competitiveness

Business Green - 18-Sep-2009

Survey of businesses impacted by cap-and-trade scheme reveals talk of job losses accounts for little more than scaremongering

James Murray, BusinessGreen, 18 Sep 2009

The EU's high-profile emission trading scheme (ETS) has had "minimal" impact on businesses' competitiveness and, in some cases, has delivered commercial benefits, according to nine of the largest companies affected by the cap-and-trade scheme.

That is the conclusion of a report carried out by The Climate Group think-tank and commissioned by the German Marshall Fund of the United States lobby group, which is likely to be seized upon by US environmental campaigners currently attempting secure support for a proposed US cap-and-trade scheme modelled on the EU ETS.

The study, entitled The Effects of EU Climate Legislation on Business Competitiveness: a Survey and Analysis, was based on interviews with executives at blue chip firms that combined account for five per cent of the emissions covered by the ETS. It found that, to date, initial fears that the scheme would damage the competitiveness of European firms, contribute to job losses, and encourage some carbon-intensive businesses to leave the EU have proved unfounded.

The firms interviewed, which included energy giant Centrica, an unnamed global steel manufacturer, a global aluminium producer, and large purchasers of energy such as Tesco and Johnson & Johnson, said that they had not relocated their operations, reduced their workforce, or lost market share as a result of carbon pricing.

A number of executives also said that the introduction of the ETS had been " positive" for their business as the need to measure and report on carbon emissions had allowed them to identify cost-effective energy efficiency measures.

Some respondents did voice concerns that the limited impact of the scheme had been a result of the relatively low price of carbon allowances during the early phases of the scheme. They also warned that the imminent lowering of the emission caps from 2013 could encourage some businesses to relocate operations to regions without carbon constraints, particularly if main competitor countries fail to implement their own carbon-pricing mechanisms.

However, the report found that all of the companies interviewed, including those more carbon-intensive companies, were broadly in favour of the scheme.

Mark Kenber, international policy director of The Climate Group and the report's co-author, said that the survey provided a valuable counter to those groups in the US lobbying against the proposed Waxman-Markey climate bill on the grounds that they believe the adoption of a cap-and-trade scheme would lead to a loss of market share and soaring costs for businesses.

"Companies with operations in Europe have made some adjustments since the introduction of the EU ETS and EU climate policies," he said. "But concerns about loss of competitiveness have to date either not materialised or have been alleviated through policy design."

Nalco to setup smelter plant in Indonesia

odishatoday.com - 09/19/2009

Bhubaneswar ( Orissa ) In a bid to spread its wing in foreign soil the public sector navratna, Nalco will set up a smelter plant in Indoanesia. The Govt of Indonesia has approved the foreign investment proposal of the company.

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The Nalco is also planning to acquire a coal mine of 200 million tones resever in joint venture for setting up the smelter and power plant.

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In view of the abundant reserve of natural gas and availability of cheap electricity in Iran, Nalco has decided to set up a smelter plant in that country. It has prepared a feasibility report and also conducted due diligence.

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The public sector alumina major which has posted a a net profit of Rs 1272 cr and an export earning of rs 2085cr in 08-09 , has decided to set up 5 lakh tonne smelter plant and 1250 MW power plant at Brajaraj nagar in Jharsuguda district. The proposal has been conditionally approved by Govt of Orissa.

Similarly it has decided to set up 14 lakh tonne Alumina Refinery in neighbouring Andhra Pradesh. The company has prepared a fesibility report. The centr has accorded propr approval for the mining lease proposals of Andha Pradesh for awarding leas to Nalco.

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In the 28th annual general meeting of the company which was held in Bhbubaneswar, it has approved a dividend payout of 50% amounting to rs 322.16 crore.

Speaking in a press conference Nalco has revealed that it has recorded alumina production of 1576500 tonnes during 08-09. Similarly it has reported a highest ever aluminium cast metal production of 361,262 tonnes against 360,457 tonnes in 207-08.

It has also achieved the highest-ever domestic sale of 271274 tonnes of metal,surprising the previous best of 263,494 tonnes in 06-07.

100 in plant closure march

TeleText - 19-Sep-2009

Nearly 100 protesters have taken to the streets of Holyhead in a march against the closure of an aluminium plant.

The Anglesey Aluminium firm on the outskirts of Holyhead will close at the end of this month, axing 500 workers.

The rally, organised by Unite, began at the town hall and took marchers to the front gates of the plant, owned by the Rio Tinto Group and Kaiser Aluminium.

National Aluminium plans nuclear power plant

Times of India - 20 September 2009

BHUBANESWAR: The state-owned National Aluminium Co (Nalco) is focusing on diversification, including setting up a nuclear power plant and moving

into other metals, to meet the economic meltdown.

As part of its plans, the company has begun talks with the Nuclear Power Corp of India Ltd (NPCIL) to set up a nuclear power plant of 1,000 MW capacity, said Nalco chairman and managing director C.R. Pradhan.

"We are in talks with NPCIL. We have plans to become an independent power producer," Pradhan said after the company's 28th annual general meeting here saturday.

Nalco also aspires to be a global player in metal business and is in the process of diversifying into other metals from its core business interest, aluminium.

"We are trying to spread the risk keeping in view the economic meltdown, instead of remaining dependent on one commodity. It is part of our diversification plan," said Nalco finance director B.L. Bagra.

Company officials said it has drawn up an ambitious plan to grow both organically and inorganically, and that the aluminium major is planning to acquire new mineral resources, especially coal, bauxite and copper.

According to them, Nalco has almost completed its second phase of capacity expansion on an investment of Rs.4,402 crore.

This will raise its bauxite mining capacity from 48 lakh tonnes to 63 lakh tonnes and that of alumina manufacturing capacity from 345,000 tonnes to 460,000 tonnes.

Along with diversification, the company is planning to leverage its strength in aluminium and alumina business to set up smelter plants in Indonesia and Iran.

Australia Flags Possible Compromise On Copenhagen Climate Plan

NASDAQ 20-Sep-2009

CANBERRA -(Dow Jones)- The Australian government has put forward a possible compromise plan designed to break a likely deadlock between advanced and developing nations at United Nations-led climate change talks in Copenhagen in December.

Australia, the biggest per capita polluter in the developed world due to its reliance on coal-fired generation for around 80% of its electricity needs, has a vested interest in achieving a comprehensive global deal at the December talks.

Such a deal would clear the way for it to proceed with a domestic cap-and- trade plan, currently held up by the Senate but scheduled to begin mid-2011, without handicapping the economy by making polluting industries less globally competitive.

The compromise plan, outlined by Climate Change Minister Penny Wong in a speech in New York Sunday, would offer developing nations a more flexible way to curb their greenhouse-gas emissions.

Rather than commit to specific caps on carbon emissions, developing countries could submit a legally binding "national schedule" detailing how they propose to reduce emissions of the heat-trapping gases.

These national schedules would, in the case of advanced nations, include ambitious Kyoto  ?Protocol-style economy-wide emissions reduction targets, Wong said.

But for developing nations taking on international mitigation obligations for the first time, the schedules could be more flexible - and tailored to individual national circumstances. That could mean mapping out renewable energy targets, a technology standard, or a target to reduce deforestation, she said.

"The one-size fits all model is not going to get the agreement we need," Wong said. "It won't get the broad participation from developing economies that the climate needs."

The Australian proposal comes as business leaders, heads of state and the world's major investors meet in New York this week for preliminary negotiations ahead of the Copenhagen conference, where the aim is to hammer out a successor treaty to the Kyoto Protocol, which expires in 2012. The discussions in New York are to continue at the Group of 20 meeting that follows in Pittsburgh, Sept. 24- 25.

Political differences between advanced and developing nations have threatened to deadlock the Copenhagen talks. China and India are digging in against legally binding caps on carbon emissions, arguing that they would be a form of economic discrimination against poorer countries. China also says that 20% of its carbon emissions come from products made for export and that it shouldn't bear the burden.

But China appears to have shifted subtly recently, with some influential Chinese economists arguing that China might soon be rich enough to afford some of the changes necessary to combat global warming.

India has pledged that it won't allow per capita emissions to surpass the average per capita emissions of developed countries.

Driven by a wave of urbanization and industrialization, China recently surpassed the U.S. as the top emitter of greenhouse gasses. But Beijing insists that rich industrialized countries have a responsibility to clean up first.

Rich countries like the U.S. should cut their emissions at least 40% from their 1990 levels by 2020, Chinese officials have said - a schedule much more aggressive than those being considered in the U.S. or Europe.

Leaders of the Group of Eight leading nations agreed in July to slash emissions of heat-trapping gases by 80% by 2050 and to hold global warming to less than two degrees Celsius.

But the G8's failure to agree on shorter-term emissions-cutting targets and a firm amount of aid for developing countries led a larger group of nations to decide to drop numerical targets.

Australia's own emissions targets for 2020 are relatively modest, ranging from just 5% on year 2000 levels in the absence of any global deal, up to a highly conditional 25% only if world leaders agree to a comprehensive global pact that caps the emissions of both developed and developing nations.

The Australian government's hand in global climate negotiations was weakened in August when opposition lawmakers rejected legislation aimed at capping greenhouse-gas emissions in the country.

The Australian cap-and-trade plan - similar to one operating in Europe since 2005 - would cap carbon dioxide emissions from July 2011, forcing heavy polluters like power generators and aluminum and cement makers to buy so-called carbon permits to account for their greenhouse emissions.

The government plans to reintroduce the climate change legislation in November, just days out from Copenhagen, in a move that could result in a call by the government for early elections - seeking a broader public mandate for its climate policy - if it can't convince key conservatives to back the cap-and- trade plan.

-By Rachel Pannett, Dow Jones Newswires; 61-2-6208-0901; rachel.pannett@ dowjones.com

RusAl rushes to restructure debt as talks failSuzy Jagger, Politics & Business Correspondent

Times Online - 20-Sep-2009

RusAl, the world’s largest aluminium producer, is racing to complete debt restructuring plans after talks with the Libyan Investment Authority (LIA) and other sovereign wealth funds failed, The Times has learnt.

RusAl — which is controlled by Oleg Deripaska, the Russian oligarch, and which is estimated to have been worth as much as $30 billion at the height of the commodities boom — has to restructure about $7.4 billion (£4.5 billion) worth of debt to foreign banks.

It had been in active discussions with the Libyans about selling a 10 per cent stake in the Russian group. It is not known whether Mr Deripaska was prepared to reduce his own stake as part of a refinancing deal with Libya.However, RusAl became frustrated at the lack of progress and the slow speed at which officials in Tripoli operated and has walked away. It is also understood that talks with other sovereign wealth funds about selling a stake were abandoned. The LIA was unavailable for comment.

It is not clear how Mr Deripaska and the LIA were introduced. However, Jacob Rothschild, the fourth Baron Rothschild, was until last year an adviser to the Libyan Investment Authority. His son Nathaniel — a friend of Mr Deripaska — was also on the advisory board of RusAl.

A deal with Libya would have had a number of advantages apart from a much-needed injection of capital. Any deal with Tripoli would have been faster than pursuing the protracted process of preparing for a partial float on a big stock market. It could also have prepared the way for RusAl to negotiate other contracts in Libya and may have offered the Russians the opportunity of building an aluminium smelter in the North African country, exploiting its plentiful energy supply.

A spokesman told The Times: "RusAl has been in contact with a number of capital providers and is considering a variety of options for capital-raising, including a possible IPO, and we are not commenting on any individual negotiations."

On top of the money that it owes foreign banks, RusAl owes about $4.5 billion to the Kremlin-controlled VEB bank and $2.1 billion to other Russian banks. Its deadline for debt restructuring had originally been September 18, a date agreed at the end of July when Mr Deripaska and the coordinating committee representing RusAl’s banks presented the restructuring proposal to 70 international lenders.

On Friday, RusAl said that it had agreed another extension to the deadline for renegotiating its repayment schedule to foreign and Russian banks. The standstill agreement on debt repayment to [foreign] banks has been extended until the end of October. The company did not provide the total sum of debt.

The statement explained that it expected to complete negotiations with Russian creditor banks by the end of September. It added: "By the end of October, RusAl and its lenders intend to complete all the procedures on restructuring." It is also believed that RusAl is considering whether a stock market listing in Hong Kong would be feasible to raise new funds.

It is thought that it has ditched plans to list on the London stock market and instead favoured a partial float of a 10 or 20 per cent stake in Hong Kong and Paris.

Last week, Artem Volynets, RusAl’s deputy chief executive, said: "No decision has been made at this moment about the timing, venue or any of the parameters of a potential listing. We are completing the restructuring and will sign the significant final documents in the next few weeks, so [the] very logical step is equity raising to reduce our debt to levels according to the reduction schedules."

Rio tightens Cuts in Aluminium

International Business Times Australia - 22 September 2009

Rio Tinto has given a cautious outlook for its strained aluminium division, which is the one where the company bought Alcan in 2007, took on billions of debt, and has been in recovery mode since then.

The company said yesterday in a series of presentations in Canada (and released to the ASX) that it is maintaining a tough approach to cost cuts, capital spending, along with a very conservative outlook for the metal in world markets.

In short, it's hack, slash, not spend, spend, with the approach being to keep the businesses existing assets operating at whatever levels, with a minimum of new capex.

This is based on an outlook that sees upside in China, but also uncertainty, with fears of a double dip slump in demand in the next year or so.

Rio said that it is looking to cut capital spending by 15% at its Alcan aluminum unit next year as the outlook for a recovery in demand remains mixed.

Rio Tinto Alcan is seeking to reduce so-called sustaining capital spending to $500 million in 2010, from a forecast $586 million in 2009.

The company said it would be maintaining a tight hold on growth capital in 2010 with further reductions compared to 2009.

It said it was "mindful of retaining the capability to efficiently run and grow the business when markets recover".

The company is studying its budget for growth capital spending for next year and is forecasting expenditure of $1.1 billion this year for all of 2009.

Working capital initiatives and reductions in growth and sustaining capital expenditures have improved cash flow this year so far by US$1.4 billion compared to 2008.

But according to industry analysts, the supply of aluminum will again exceed demand this year and in 2010.

That is important to Rio, as it is still one of the group's two major businesses, along with iron ore.

Carmine Nappi, Rio Alcan's head of industry analysis said in her presentation that "for the time being, the recovery signs in aluminum main end-use markets are still mixed.

"We remain cautious because some headwinds are also at work.

"Our base case is for 4.1% growth in aluminium demand over the next two decades."

She said the current energy surplus in China is expected to be temporary with increasing competition for energy in China from residential and transportation sectors.

"Between March (10.4Mtpa) and July (12.8Mtpa) Chinese production increased 2.4Mtpa on restarts and commissioning of new capacity

"Based on CRU - Quarterly Review capacity estimates for China, this would imply a latent capacity of about 6.8Mtpa in July 2009 or an utilisation rate of 65%," she said.

(That's the Commodity Research Bureau of London.)

Ms Nappi warned that the impact of the overhang of unsold metal could see a possible "W-shaped scenario where growth returns for a few quarters before petering out once more.

"This would slow down aluminum shipments and make additional contributions to an already high stock level."

In a separate announcement, Rio also said yesterday that it had completed the sale of its Corumb ?¡ iron ore mine in Brazil and the associated river logistics operations to Vale S.A. for a cash consideration of US$750 million.

Rio announced the sale of Corumb ?¡ in late January as it struggled with a crushing debt burden, falling revenues and took the Chinalco option (now discarded).

The sale was part of a larger transaction that included the Potasio Rio Colorado potash project in Argentina and the Regina exploration assets in Canada. The potash transaction closed in February for a cash consideration of US$850 million.

"Over the last 18 months, Rio Tinto has announced asset sales of US$6.6 billion including the Corumb ?¡ and potash transaction.

"In addition, Rio Tinto has received a binding offer from Amcor for US$2.025 billion for Alcan Packaging global pharmaceuticals, global tobacco, food Europe and food Asia divisions.

"During 2008, Rio Tinto announced divestments comprising the Greens Creek mine in Alaska for US$750 million, its interest in the Cortez operation in Nevada for US$1.695 billion and the Kintyre uranium project in Western Australia for US$495 million.

"Announced transactions in 2009 comprise the Group's interest in the Ningxia aluminium smelter in China for US$125 million, its Jacobs Ranch coal mine in the United States for US$761 million, Alcan Packaging Food Americas to Bemis Inc for US$1.2 billion and 56 per cent of the Alcan Engineered Products cable division to Platinum Equity for an undisclosed amount," Rio said in its statement.

Ormet Power Contract Finalized

Business Wire (press release) - 21-Sep-2009

HANNIBAL, Ohio--(BUSINESS WIRE)--Ormet Corporation ("Ormet") announced today that a power agreement between the company and American Electric Power-Ohio (AEP-Ohio) has been finalized.

The agreement, entered by the Public Utilities Commission of Ohio ("PUCO"), remains in effect through December 31, 2018 and would provide electric service to Ormet's Hannibal facility at rates below applicable large user industrial tariff rates when the LME falls below a predetermined level. The support is capped at $60 million per year which will decrease beginning in 2012.

"We have worked long and hard to reach an agreement that is mutually beneficial and helps secure the jobs of hundreds of employees," said Mike Tanchuk, Ormet’s CEO. "This could not have been done without the help of our many supporters, including Governor Ted Strickland, Chairman Alan Schriber and the PUCO, the USWA, and our employees. We also appreciate the cooperative approach taken by AEP throughout this process. We now are focusing on the critical next steps for the company which include refinancing."

This press release contains forward-looking statements within the meaning of the federal securities laws. Such statements are based on current expectations, and the actual results and the timing of certain events could differ materially from those projected in or contemplated by these forward-looking statements due to a number of factors. Readers are cautioned that Ormet's business is subject to numerous significant risks and uncertainties, including those discussed in Ormet's 15c2-11 information and disclosure statements for the year ended December 31, 2008 and the quarter ended March 31, 2009 (copies of which are available at Ormet's website at www.ormet.com).

Headquartered in Hannibal, Ohio, Ormet Corporation is a major U.S. producer of aluminum. Ormet employs approximately 1,000 people. Its aluminum smelter based in Hannibal, Ohio has an annual aluminum production capacity of approximately 266,000 metric tons. For more information, visit Ormet's website at www.ormet.com.

Contacts

Ormet Corporation

Linda King, 412-428-0050 or 412-296-2284

  ?

Balco mishap: Staff of Chinese firm flee

Hindustan Times - September 25, 2009

Ejaz Kaiser

Korba, September 25, 2009

SEPCO of China, which was building the chimney that collapsed at Vedanta Group’s Balco power plant here on Wednesday, has downed the shutters at its local office in Korba.

Korba collector Ashok Agrawal confirmed: "The staff and contractors involved in the chimney construction have fled the city."

The Chinese company, which won the contract in a global bidding, later appointed Delhi-based Gannon Dunkerley Company to build the 240-metre high chimney at the 1,200-MW power plant, about 220 km northeast of state capital Raipur.

Investigating the cause of the collapse, the state public works department said the contractors had used poor quality materials. "More revealing facts are expected once the investigation begins," said Agrawal.

But Balco chief executive officer Gunjan Gupta claimed in a press release that continuous rains and lightning during the past few days were probably responsible for the incident.

The district administration, however, has arrested Balco’s human resources and industrial relations chiefs Ranjit Lal and BK Bhatia, respectively, for the collapse of the chimney.

As the death toll kept mounting — 41 in the last count — Chhattisgarh Chief Minister Raman Singh said on Thursday, "No one will be spared for the lapses."

Eyewitnesses Shyamlal Ragey and Pusao Ram, workers at the project, said all of the 100 people who were in and around the structure at the time of the accident might have been killed.

But only a few bodies had been claimed so far, as most of them were from Chhapra district in Bihar and different parts of Jharkhand, said Korba Superintendent of Police Ratanlal Dangi.

Laxmi Chouhan, who is contesting alleged land encroachment by Balco in the Supreme Court, said the area where the chimney and the power plant were being built was marked for a green belt and botanical garden. Also, a Korba municipal commissioner, JJ Mahobe, said, "We never granted any no-objection certificate to Balco for this project."

Alcoa power

WatertownDailyTimes.com - SEPTEMBER 24, 2009

NYPA reform should maintain allocation

The 478 megawatts of preservation power for Alcoa operations at Massena supporting hundreds of jobs could be in jeopardy under the recommendations from a New York City-based organization to overhaul the New York Power Authority's economic development programs.

One of NYPA's nine programs under scrutiny by the Citizens Budget Commission is the preservation power program that for the past 50 years has reserved low-cost power from the St. Lawrence-FDR Power Project for Alcoa. According to the commission's study, NYPA is not getting a fair return on its Alcoa investment when the benefit of the low-cost hydropower is calculated as a per-job subsidy.

Taking note of the recently negotiated contract with Alcoa, Elizabeth Lynam, one of the report's authors, noted that the aluminum maker is receiving $150 million worth of power annually to sustain 900 jobs and pave the way for a $600 million investment in its Massena operations.

"That tradeoff is questionable," she said.

China dominates global aluminium industry

SteelGuru - Sunday, 27 Sep 2009

Engineering reported that China continues to dominate the global aluminium industry accounting for one third of world production and world consumption of primary aluminium.

While China is self sufficient in aluminium metal and is approaching self sufficiency in alumina, dependence on imported bauxite remains high, despite rising output. However, power supply issues and high costs of production could result in declining production in the long term and the possibility that China will become a net importer of primary aluminium.

Russia, Canada, the US, Australia, Brazil, Norway and India are the principal producing countries after China, together accounting for about Q3 of world output of primary aluminium.

The report indicates that, although some 200 smelters half of which are in China produce primary aluminium, 14 companies operating about 100 plants, controlled over 60% of output in 2007. Consolidation of Russian aluminium producers Rusal and Sual with commodities and raw materials supplier Glencore in 2006 into UC Rusal and the acquisition of aluminium wire and cable manufacturer Alcan by mining giant Rio Tinto in 2007, resulted in 2 aluminium producers comparable in size to the world’s leading producer of primary aluminium, fabricated aluminium and alumina, Alcoa.

World aluminium output rose by between 0.15% and 12.2% per year between 1994 and 2008, averaging 5% per year. Growth averaged around 7% per year after 2001 mainly owing to explosive expansion in production in China. Output began to contract in the H2 of 2008 and this accelerated in 2009, meaning that world aluminium production is likely to decline for the first time in 15 years and by as much as 5%.

In 2009, almost 50 aluminium smelter projects with a total capacity of 20 million tonnes per year were at different stages of development but only 10 with a total capacity of 2.8 million tonnes per year were already under construction. The report states that for most of these projects, no decision with regard to timing has been finalized and the timetables of the others are under review. At the same time, most of the significant producers are idling high cost and inefficient capacity in response to low demand and prices.

The earliest significant project to come on line will probably be Qatalum in Qatar, a JV between national oil and Gas Company Qatar Petroleum and pipe network and accessories provider Hydro which is likely to be a low cost producer. During 2008, a new 300 million tonne per year smelter started operations in Oman and UC Rusal restarted output in Nigeria.

Reported production which excludes as much as 2 million tonnes in China of refined secondary aluminium and aluminium alloy amounted to about 8.8 million tonnes in 2007 mainly in the US, Japan, Germany and Italy. A further 3 million tonnes per year to 3.5 million tonnes per year of secondary aluminium is recovered directly into end uses. US based recyclers of aluminium and zinc Aleris International, owned by global private investment firm Texas Pacific and formed in 2004 by the merger of recycling firm Imco Recycling and aluminium sheet manufacturer Commonwealth Industries is probably the world’s largest aluminium recycling company.

Aluminum rolling and recycling company Novelis which acquired Alcan’s secondary facilities in the US and Hydro Aluminium North America is a significant aluminium recycler. Used beverage cans are the largest source of scrap and raw material for secondary aluminium ingots.

(Sourced from Engineering News)

RUSAL commissions first complex of new Casthouse at Irkutsk

Steelguru - Saturday, 26 Sep 2009

UC RUSAL announced commissioning of the first start up complex of new Casthouse 3 at its Irkutsk aluminium smelter. The company invested approximately USD 50 million in the expansion of IrkAZ casting facility and commissioning of its 1st line.

The new line casts 22.5 kilogram ingots, a totally new product for the smelter. When running at full capacity the line can produce 27 tonnes per hour. Its output in September is expected to be 6,000 tonnes.

Developed by RUSAL’s teams, the casthouse expansion project started at IrkAZ in 2006. Casthouse 3 will have 2 lines. In January 2009 the smelter began the start up and commissioning of the first line which has 2 independent tilting furnaces, 60 tonnes capacity each with heat treatment and stirrers and one casting conveyor. The benefits of the new equipment in Casthouse 3 include a higher level of productivity compared to the existing casting machines and fully automated casting and stacking.

Mr Alexey Arnautov RUSAL’s director of the aluminium division said that "Commissioning of the new modern equipment that has the shortest changeover time before it can shift to a more popular product will improve the rate at which we are able to respond to the changing needs of our customers and is an important step towards better product quality and higher efficiency of the company’s aluminium smelters, a critically important factor given the current economic difficulties.".

(Sourced Rusmet)

Aluminum smelters eye new carbon strategies

American Metal Market - Anne Riley - Sep 25, 2009

In an effort to further drive down costs in an ever-volatile marketplace, big-name aluminum smelters are broadening their carbon procurement strategies—from relaxing specifications to expanding supplier networks. The push has been fruitful.

Carbon products, including coke and pitch for use in the electrolytic process, account for 12.3 percent of costs in aluminum smelting, according to Pittsburgh-based Alcoa Inc., making carbon the No. 3 input cost after alumina (37.1 percent) and power (34.8 percent).

But unlike alumina and power, the prices of which are largely out of producers' hands in the short- to mid-term as they are tied to the London Metal Exchange and long-term power deals, respectively, carbon costs are one place where immediate cost-savings are possible.

"It's a difficult time, and carbon is actually one of the areas where everyone is focused on reducing cost pressure. Some of the other components are not something you can really work on in the short term—power is more negotiation with the government; alumina is something that's moving with the market," Francesco Bassoli, director for Alcoa Europe's Refining and Smelting Council, told AMM on the sidelines of Metal...

This is a preview of the article. The full article is available only to our subscribers and trial users.

Alba reshuffle to combat crisis

Gulf Daily News - Tuesday, September 29, 2009

By MANDEEP SINGH

ALBA yesterday announced plans to downsize its executive management structure in a bid to save the company millions of dinars during the economic crisis.

Chairman Mahmood Al Kooheji said the re-structuring would mean job losses across the firm, but claimed all those leaving would be sent away with compensation packages to the "fullest satisfaction".

Mr Al Kooheji, who said the aluminium industry was going through one of the most volatile periods in its history, revealed there will now be five executives instead of 11.

He said the number of managers had already been cut from 36 to 27.

Mr Al Kooheji was speaking during a Press conference at the Alba Club in Riffa to make the announcement.

"Aluminium prices dropped from $3,300 (BD1,247) per tonne to around $1,400 (BD529) per tonne in a six month period last year, with only a limited recovery so far," said Mr Al Kooheji.

"We have done this after involving an international consultant who studied the situation for several months, taking into confidence the employees and their interests.

"This will save us a substantial amount of money in the years to come as well as make us a leaner and fitter organisation.

"Our decision to have a leaner executive management structure has been a strategic move to streamline the production and decision-making process and enable the company to be swift in responding to current market dynamics.

"Many smelters are either cutting down their production or closing their units entirely but we have weathered the storm well and will come out very strong."

Mr Al Kooheji said a number of executive managers had already left the company, which had paved the way for streamlining its management structure.

"We have also redefined the functions and work streams in the company to better respond to the present conditions," he said.

Mr Al Kooheji said Alba's production, which has crossed 870,000 tonnes per annum, would not be affected by the cuts.

Alba chief executive officer Ahmed Saleh Al Noaimi, chief operating officer Mohammed Mahmoud, project management officer Paul Otteson and chief financial officer Tim Murray attended the Press conference.

mandeep@gdn.com.bh

58 killed as Guinean soldiers open fire at rally

Independent - Tuesday, 29 September 2009

By Tom Peck

At least 58 people were killed when Guinean security forces fired into the crowd at an opposition rally at a football stadium yesterday, according to a human rights organisation in the country.

Witnesses said several prominent opposition leaders were arrested and protesters were injured in violence that began when thousands of people took to the streets and met in the stadium despite a massive security operation by the authorities. Opposition parties had organized the protest in the main football stadium in the capital Conakry, which drew some 50,000 people. Soldiers wearing the red berets of the presidential guard later entered the stadium and fired into the crowd.

"At one hospital alone, we have counted 58 bodies," Thierno Maadjou Sow, president of the Guinean Human Rights Organisation said. "It seems there are many more corpses in (the other hospital)," he said.

The violence is the worst in the country since military ruler Captain Moussa Dadis Camara seized power in 2008, hours after the death of longtime dictator Lansana Conte. He has recently said he has the right to run in forthcoming elections if he chooses, which has angered opposition leaders.

Guinea, which lies on Africa's west coast, is the world's biggest exporter of bauxite, a raw material used in aluminum production.

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China Targets Aluminum Sector in Push Against Overcapacity

Wall Street Journal - SEPTEMBER 30, 2009

By CHUIN-WEI YAP

BEIJING – China's cabinet, which has long warned it aims to curb excess capacity in key industrial sectors, set a ban on new aluminum smelters for three years.

The State Council, China's highest executive body, also issued new rules to contain excessive capacity in seven other sectors, including revisiting a years-long campaign to curb steel output.

Premier Wen Jiabao said earlier this month that excess industrial capacity due to slower external demand is his biggest worry as China's economy continues to recover. Wednesday's move doesn't change China's broad policy focus on stimulating the economy, but shows that the government is increasingly dealing with excesses of its expansionary policies.

A failure to rein in excess capacity "will make it hard to prevent vicious competition in the market and raise profits, and will lead to shuttering of companies, or insufficient use of capacity, layoffs, big increases in bad assets held by banks," the government said in its sternest warning on the subject yet.

Aluminum producers in China -- both the world's largest producer and consumer of the metal -- have massively increased production capacity in recent years, taking advantage of rising prices before the economic crisis.

The cabinet's move to ban new capacity in aluminum, and to also trim outdated capacity at existing smelters -- a measure first proposed by industry officials in a plan submitted to the State Council in February -- is seen as a means to boost aluminum prices and root out smaller and more-inefficient aluminum smelters in a sprawling, energy-guzzling and difficult-to-control industry.

But the market largely shrugged off the news Wednesday, a day before China's eight-day national holiday break, and aluminum prices rose only slightly on the London Metal Exchange aluminum after the announcement.

Aluminum prices have been major laggards in a wider rally among base metals this year, rising just 23% so far even as copper prices almost doubled and zinc prices climbed 42%.

"The worry in the industry isn't so much about new capacity, it's about the existing overcapacity," said Wang Zhouyi, senior base metals analyst for Shanghai Cifco Futures.

While the cabinet wants to limit capacity at inefficient aluminum smelters by 800,000 tons over one year, such measures might be cold comfort for a market faced with capacity nearing 20 million tons, and demand projected this year at around 16 million tons.

The ban isn't the first time China's cabinet has sought to control aluminum output. It issued an industry revitalization plan earlier this year with broad aims to consolidate the industry and target overcapacity, but its efforts have so far had limited success, with unbridled production swiftly returning every time prices show signs of inching up.

"Aluminum smelters are very flexible," said Wang Lin, an aluminum analyst with CRU, a metals consultancy. "They can pop up very fast, usually when prices recover, and they're quite difficult to control."

Uncontrolled aluminum output has also been an irritant for policymakers for environmental considerations. Aluminum production is the most energy-intensive among base metals, with electricity charges accounting for nearly 50% of input costs.

As the domestic economy recovers, new problems are arising from the unprecedented amount of credit that have been released to bolster growth. While overcapacity has been an issue for years in key traditional industries like steel and aluminum, warnings by the State Council last month of overcapacity and redundant construction in such advanced industries as wind power and polysilicon were Beijing's first toward more high-tech sectors.

Last month, China underlined its concerns by discouraging certain imports of polysilicon, which is used for solar power, and certain wind power technology from its preferred list of imports, underlining official concerns.

Beijing also Wednesday reiterated its targets for containing overcapacity on the steel sector, which includes plans to close smaller steel mills by 2011.

—Terence Poon, Juan Chen and Yue Li contributed to this article.

NALCO sells aluminium at $90.18/T premium -source

Reuters - Wed Sep 30, 2009

India's National Aluminium Co Ltd (NALCO) (NALU.BO) sold 4,500 tonnes of aluminium ingots at a premium of $90.18 per tonne over the LME cash price on a CIF basis, a company source said on Wednesday.

The buyer was Hong Kong's Hongfan International Ltd, said the official who has direct knowledge of the deal but could not be named due to company policy.

The shipment would start from October and conclude in March, the source added.

NALCO, whose tenders serve as an international benchmark, last sold aluminium ingots at a premium of $85.25 per tonne early this month, the source said. (Reporting by Jatindra Dash)

The conflicting trends in aluminium market

Commodity Online - 2009-09-29

By Julian Murdoch

As always, gazing into the future of a commodity is an iffy proposition at best, but usually there is at least some general consensus on where the market's trending. For aluminum, however, that's not quite the case at the moment.

At the ISRI Commodities Roundtable Forum on aluminum last week, one analyst reportedly suggested that aluminum could rise to $3,000 per metric ton by May 2010—quite a jump from this year's prices, which have fluctuated between just over $1,000 to just under $2,000 so far. Even looking historically, the highest price aluminum has hit in the past five years is comfortably under the $3,000 mark.

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Many producers also have positive—albeit more conservative—estimates. Rio Tinto Alcan, for example, expects long-term aluminum demand growth to be along the lines of 4-6%. In the short term, though, executives are more cautious, stressing their current strategy of cash preservation instead of talking price.

But not all analysts are quite so pie-in-the-sky optimistic; Goldman Sachs' forecast is a downright downer. Goldman sees aluminum trading at a much more modest $1,700 per metric ton, or 78 cents per pound—a price below Tuesday's cash price of $1,864.50 per metric ton (84.5 cents per pound).

Why the confusion?

Conflicting forces are at play in the aluminum market. On the one hand, you've got the general, though cautious, optimism of global recovery; a weaker U.S. dollar (pretty much always positive for commodity prices); and China's recent transformation into a net importer of unwrought aluminum. On the other hand, current aluminum inventory levels at the London Metal Exchange are very high:

To offset this inventory overhang, the industry has announced "a significant amount of smelter curtailments" (Mineweb). But even so, market demand has not been high enough to bring down existing inventories.

Besides, not everyone has closed smelters. And by "not everyone," I mean China.

China has consumed more aluminum this year than in 2008, and at the same time, it has also created new smelting capacity. According to a Reuters report, Chinese smelter capacity has grown at such a rate that utilization is only about 75%, which gives China plenty of room to keep on smelting.

Thus we're in this bizarre world of high inventories and increasing production. The International Aluminum Institute released figures this week showing August aluminum production increased by 0.3% (6,000 metric tons) to a total of 1.954 million tons produced for the month. So it looks like producers are banking on the global economic recovery.

Meanwhile, prices have recovered very well since the beginning of the year: In the future, we may need to consider more than just construction and manufacturing demand when looking at the aluminum picture: A bona-fide, physically backed aluminum ETF may soon become reality. Glencore International and Credit Suisse are currently in talks to create such an ETF, though at this point, when is unknown—1 month, 6 months, a year? It's too soon to tell.

Besides allowing investors to invest in physical aluminum like they can with gold and silver, the creation of such a fund would benefit commodity trading giant Glencore, by giving it another avenue to sell its aluminum inventory. While no official numbers on the subject exist, Glencore is believed to have over 1 million tons of aluminum lying around. I'm sure the prospect of offloading that to a secured location for the benefit of ETF investors has them salivating.

Right here, right now

As for right now, investors who buy into the $3,000 prediction do have at least one option: the iPath DJ-UBS Aluminum Subindex Total Return ETN (NYSE Arca: JJU), which tracks aluminum futures contracts. Yet, with the recent rumblings against futures-based exchange-traded products and an extremely in-flux CFTC, a physically backed product may be more attractive to investors.

Alternatively, there are plenty of fairly pure-play, "buy-the-cow" options. Companies like Alcoa (NYSE: AA), Rio Tinto (NYSE: RTP), Reliance Steel and Aluminum (NYSE: RS) and the Aluminum Corporation of China (NYSE: ACH) all provide exposure to aluminum. Better yet, they may already be in your portfolio.

As you can see, Chalco, Rio Tinto and Reliance clearly outperformed this year, while Alcoa, the traditional play in the space, lags at the bottom of the chart, down there with the spot and futures returns for the metal itself.

The reason for the split: Those runaway freight trains of success—Chalco, Rio Tinto and Reliance—all have additional factors boosting their performance. In the case of Rio Tinto and Reliance, it's steel; for Chalco, it's China.

After falling long and hard last autumn, Alcoa has managed to partly recover, as aluminum prices also rose; its stock price has experienced a year-to-date increase of 26%. Whether or not Alcoa's stock will continue to perform will depend on third-quarter results, scheduled to be reported on October 7—the start of earnings season. You can be sure that analysts will be asking tough questions about the company's outlook on the state of the aluminum market and the global economic recovery picture. (Courtesy: Hardassetsinvestor.com)

Wales aluminum company proposes woody biomass power plant

Biomass Magazine - September 29, 2009

By Lisa Gibson

Anglesey Aluminum Metals Ltd., Holyhead, Wales, has submitted an application for approval of a 299-megawatt biomass power plant to be located near the company’s aluminum smelter and possibly power it, according to Stephen Cox, biomass engineer with the company.

If approved, the plant would consume about 2.4 million tons of woody biomass, such as wood chips, pellets or agricultural residues, per year, Cox said. He declined to release a cost estimate for the project, but said Anglesey Aluminum hopes to commence basic construction in early 2011 with a three-year construction period. Currently, the company is going through the appropriate planning applications and engineering feasibilities.

How the energy will be used is undetermined, Cox said, but it could be used to power the company’s smelter or be sold to the grid. Anglesey relies now on power from the Wylfa nuclear power plant, which is scheduled to close in 2010.

Along with the application made under Section 36 of the Electricity Act, the company submitted an Environmental Statement to the Department of Energy and Climate Change. Consultations with national and local organizations were held in June and another public exhibition to present the findings of the Environmental Impact Assessment will be held in October, according to the company.

Siemens to supply reversing rolling mill to Chalco North East Light Alloy

SteelGuru - Thursday, 01 Oct 2009

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Chalco North East Light Alloy Company Ltd, a subsidiary of the Aluminium Corporation of China, has ordered a single pass reversing finishing mill with twin coiler from Siemens VAI Metals Technologies.

The mill is part of a hot and cold mill expansion which will be erected in Harbin. The order is worth some EUR 13 million and includes key electrical and mechanical components together with the automation and process technology. The new rolling mill is scheduled to start production in August 2011.

Chalco North East Light Alloy Company Ltd based in Harbin in the northern Chinese province of Heilongjiang, produces plate and sheet, strip, foil, tube and pipe from aluminum, magnesium and aluminum magnesium alloys. The company's products are used mainly in aviation, transport and communication as well as the electronics and lighting industry.

The new reversing mill will increase Chalco NELA annual production capacity by 210,000 tonnes of strip and allow production of end products of increased hardness and reduced thickness at enhanced quality levels. The plant has been designed for rolling strip with a width of up to 2,100 millimeters at a speed of up to 363 meters per minute.

The finishing mill comprises a 4 high stand with automatic hydraulic gauge control as well as positive and negative work roll bending. Siroll ISV Sprays are used for spray cooling. In addition to the mechanical equipment, Siemens will be supplying the entire automation system and the drive technology for the rolling mill, including Sinamics SM150 medium-voltage converters and Sinamics S120 low-voltage converters, as well as thickness and profile measurement systems and the sensor technology. The automation system embraces the basic automation, including the technological controllers and the operating and monitoring equipment.

The scope of supply also includes the process automation equipment for the entire hot strip mill, which also comprises a reversing roughing mill to be supplied by a local vendor. This degree of system compatibility ensures a consistently high product quality. All the systems and components belong to the "Siroll Alu" integrated solution platform from Siemens for aluminum rolling mills. Siemens will also be responsible for commissioning the plant and training the customer's personnel.

Workers begin search for new jobs as Anglesey Aluminium closes

Daily Post - Oct 1 2009 By Owen R Hughes

Anglesey Aluminium

HUNDREDS of workers will start a search for new jobs today after the power switch was turned off on the Anglesey Aluminum smelter.

Workers on the two pot lines left their final shifts amid sadness and anger that nearly 40 years of smelting has come to an end.

They voiced fears about their futures as they struggle to find new work.

Ian Connolly, 39, a senior pot line worker from Valley, said: "I came here today as my family’s main breadwinner and left it on the dole."

Paul Jones, 35, from Bangor, said: "They had a fire here last summer and now I think they should have pulled the plug then. We worked so hard to get this plant back to full production and then they shut it down, it is a sad day."

Gareth Owen, 60, of Llanfaethlu, said: "I have been here 23 years but never did I expect to be here when they switched off the power."

Nigel Watkinson, 49, of Bangor, who has worked at the plant for 22 years, said: "Where am I going to go now? I have been looking for weeks but there is nothing out there, it is very sad and we will miss this place."

The plant turned off the power after the failure to sign a new electricity deal beyond September 30 despite a £48m sweetener from the UK and Welsh Governments. A re-melt business will remain, employing 80 of the 540 staff that were at the site.

Chris Williams, 44, from Valley, said: "The company has given us a good living over the years and it is sad that it has come to an end.

"There is no bad feeling from me though towards the company."

Dewi Roberts, treasurer of the We Care workers’ charity, which has raised £91,000 for good causes, said: "I don’t blame the company, I blame the Government for not dealing with the power issue 10 years ago by allowing a gas powered station to be built on Anglesey."

Anglesey MP Albert Owen is now calling on the parent companies Rio Tinto and Kaiser Aluminium to provide the area with a substantial cash legacy and wants the Assembly to give special attention to the island’s economy. He is also demanding a specific recovery plan to be set out.

He said: "We need more than just warm words we need action and hard cash."

He added: "We need specific plans in place and the island to be given ‘special status’."

A fast track job search team has been set up in Llangefni JobCentre Plus for workers from Anglesey Aluminum. There will be 10 staff on hand to support workers.

Noranda Aluminum returns to full capacity

Southeast Missourian -Thursday, October 1, 2009

By Jill Bock ~ Standard Democrat

MARSTON, Mo. -- Noranda Aluminum, one of the largest employers in Southeast Missouri, is returning to full production, Gov. Jay Nixon said at a ceremony Wednesday.

On a stage set up in front of the plant's administrative office, Nixon was accompanied by officials from both political parties, members of the United Steelworkers Local, officials from Noranda Aluminum Inc. and officials from Jamaica, where the bauxite used to produce aluminum is mined.

Nixon said the company has suffered from a global decrease in the price of aluminum and steep increases in the cost of production. Another blow came during the January ice storm, when power outages reduced the plant's production capacity by nearly 80 percent for weeks.

On Monday, Nixon said, the plant will "rev back up to full throttle" as it restarts its third production line. The company has rehired 38 laid-off workers; it employs about 900 total.

The governor also announced a $2 million job retention training program along with $1 million in stimulus funds to provide for upgrades at the plant.

"To compete in the 21st-century economy, it's absolutely vital that Missouri workers have access to up-to-date, innovative job training," Nixon said. "I am pleased that we have reached this agreement to help enhance the knowledge and skills of Noranda's workers, while providing critical resources to help keep this major employer right here in our state. This agreement is good for Noranda, good for the steelworkers here in the Bootheel and good for our entire state."

The Missouri Division of Workforce Development will invest the $2 million to provide customized and detailed training to Noranda workers in a variety of areas, including computer skills, industrial maintenance, carbon processing manufacturing procedures and safety. To cover the costs of the training, a portion of the monthly withholdings tax collected by Noranda will be diverted to pay for instruction and materials. Three Rivers Community College will operate the program.

Bud Joyner, Three Rivers director of career education and workforce development, said the college also hopes to deliver much of the training. Already Three Rivers is providing some of the technical skills training on the company's new equipment and will begin providing safety training for workers.

The $1 million Community Development Block Grant, funded by the federal stimulus package, will help the aluminum company continue upgrades. Noranda plans to spend a lot to upgrade and modernize its production operations, and the funds will assist the company in retaining jobs throughout the process.

The funding, in the form of a forgivable loan, was made by the Missouri Department of Economic Development to New Madrid County, which in turn awarded the funds to Noranda. If Noranda maintains the jobs for 10 years, the loan will be forgiven.

Nixon's administration is working on other incentives for Noranda, including development tax credits and additional grants, according to a new release from Nixon's office. The total package is expected to total about $8 million.

New Madrid County Presiding Commissioner Clyde Hawes said the announcements were good news.

"Maybe now employment might get back to normal," he said.

Mr. Richard B. Evans joins CGI Board of Directors

PR Newswire (press release) - MONTREAL, Sept. 30

CGI Group Inc. (TSX: GIB.A; NYSE: GIB), a leading provider of information technology and business process services, announced today that Mr. Richard B. Evans, has joined the CGI Board of Directors.

"We are very pleased to welcome Dick to the CGI Board of Directors," said Serge Godin, Founder and Executive Chairman. "His vast experience in the global market place will contribute to the execution of our strategy. I look forward to collaborating closely with him towards the realization of CGI's goals."

Mr. Evans is the recently retired CEO of Rio Tinto Alcan and former CEO of Alcan, and is current Chairman of the Board of the International Aluminium Institute and past Chairman of the U.S. Aluminum Association. A graduate of Oregon State University with a Bachelor's degree in engineering, he also holds a Master's in management from the Stanford University Graduate School of Business.

About CGI

Founded in 1976, CGI is one of the largest independent information technology and business process services firms in the world. CGI and its affiliated companies employ approximately 26,000 professionals in over 100 offices across 16 countries. CGI provides end-to-end IT and business process services to clients worldwide from offices in Canada, the United States of America, Europe, Asia Pacific as well as from centers of excellence in North America, Europe and India. CGI's annualized revenue run rate is currently $3.8 billion and as at June 30, 2009, its order backlog was $11.8 billion. CGI's shares are listed on the TSX (GIB.A) and the NYSE (GIB) and are included in the S&P/TSX Composite Index as well as the S&P/TSX Capped Information Technology and MidCap Indices. Website: www.cgi.com.

SOURCE CGI GROUP INC.