AluNews - August 2010

China Exporters Won't Face Stiffer US Tariffs Because of Yuan, US Says
Bloomberg - 31-Aug-2010
The Obama administration rejected a plea from U.S. manufacturers to increase duties on imports from China to compensate for the effects of a weak yuan.

Makers of aluminum and glossy paper said an undervalued currency acts as a subsidy for Chinese producers, letting them undercut their American competitors. The Commerce Department rejected those arguments in two decisions released yesterday.

The cases became the focus of advocates for manufacturers after the Treasury Department declined to label China a currency manipulator during a recession in which U.S. manufacturing employment stagnated. Lawmakers have vowed to seek legislation requiring the Commerce Department to act if it failed to do so on its own.

“The Commerce Department made its finding while still managing to ignore the elephant in the room, which is China’s currency manipulation,” Senator Charles Schumer, a New York Democrat, said yesterday in a statement. “Once again, even when the opportunity is thrust into its hands, the administration has refused to take action.”

The complaints were rejected because China’s currency policy isn’t “specific to the enterprise or industries being investigated,” Ronald Lorentzen, the Commerce Department official responsible for the decision, said in a statement.

Duties on Aluminum

The department yesterday also imposed preliminary duties of as much as 137.65 percent on the import of aluminum products from China used for door and window frames, gutters, car parts and furniture. All but two groups of producers of the goods will face those highest duties.

While the aluminum duties affect $514 million in imports, imposing tariffs based on China’s currency valuation would have given many more manufacturers grounds to file complaints against their competitors in China.

“It’s now up to Congress to pass legislation to strengthen and modernize our trade laws so that the devastating impact of currency manipulation can be factored into penalties,” said Scott Paul, executive director of the Alliance for American Manufacturing, which represents steelworkers and steelmakers. “There appears to be strong bipartisan support for holding China accountable and passing legislation.”

The decisions released by the Commerce Department yesterday didn’t deal with whether China’s currency is undervalued. They focused instead on whether China’s currency policies represent a financial contribution to exporters and provided specific benefit to those exporting the aluminum and glossy paper.

One Price

“The exchange system of China is ‘unified,’ meaning that there is only one ‘price’ for every user,” the department said. Under global trade rules, subsidies must be meet certain standards in order to be countered by duties, including being targeted.

China is the second-largest trading partner with the U.S., and it ran up a $119 billion trade deficit with the U.S. in the first half of 2010, putting it on a course to exceed last year’s total of $227 billion

China announced in June that it would adjust its peg of the yuan to the dollar. China kept the yuan stable at about 6.83 per dollar from July 2008 to June 2010, after allowing it to gain 21 percent in the previous three years.

The yuan “remains substantially below the level that’s consistent with medium-term fundamentals,” Nigel Chalk, the International Monetary Fund’s China mission chief, said last month.

Antam set to build $450m alumina project early next year
Jakarta Post - 09/01/2010

State mining company Aneka Tambang (Antam) will launch its US$450 million chemical grade alumina (CGA) project in Tayan, West Kalimantan early next year, the company said Tuesday.

“We expect the construction to be completed by December 2013 and commercial production to start in the first quarter of 2014,” Antam corporate secretary Bimo Budi Satriyo said in a statement.

Bimo said that CGA plant would be built and operated by Antam in cooperation with Showa Denko of Japan.

Indonesia Chemical Alumina (ICA), the two companies’ joint venture to run the project, has named a consortium comprised of Wijaya Karya, Tsukishima Kikai and Nusantara Energi Abadi to build the plant. The engineering, procurement and construction (EPC) contract for the construction of the CGA plant was signed on Tuesday.

“The Tayan CGA project will add value to Antam’s vast bauxite reserves,” Bimo said, adding that the project will produce 300,000 tons of CGA per year.

Showa Denko will use 200,000 tons, or 66.67 percent of the Tayan plant’s total alumina production, to substitute for the current alumina output from its Yokohama plant. The remaining 100,000 tons will be sold on the Indonesian domestic market.

CGA products are used to produce functional and electronic materials. Alumina is a processed material which uses bauxite as a raw material. It can be made into many products, such as aluminium and toothpaste. Aluminium hydroxide, an intermediate product in alumina production, is used as coagulant for water purification.

The joint company will transfer Antam’s bauxite production to the Tayan CGA factory, which will be built on a 36,410 hectare plot in Tayan, West Kalimantan.

Earlier this month, Antam spent $525,000 to buy a 15 percent share of ICA to maintain a controlling 80 percent stake in the joint company, which was established in 2007. Showa Denko currently owns a 20 percent stake in ICA.

Analysts previously said the increased stake in ICA and realization of the Tayan CGA project would increase Antam’s revenue in the future, as it will no longer rely on its gold production to boost revenues.

Ormet Announces Extension
MarketWatch (press release) - Aug 30, 2010
HANNIBAL, Ohio, (BUSINESS WIRE) -- Ormet Corporation, a top U.S. producer of aluminum, today announced that it has agreed with the owners of an anode facility located in Mead, Wash., to extend an existing purchase agreement to allow for further due diligence of the plant and its assets until October 25, 2010. If the purchase is completed, the carbon anode facility would be used to supply Ormet's Hannibal, Ohio, smelting operation.
Headquartered in Hannibal, Ohio, Ormet Corporation is a major U.S. producer of aluminum. Ormet employs approximately 1,000 people. For more information, visit the website at
SOURCE: Ormet Corporation James Communications, Inc. Linda King, 412-296-2284 or 412-428-0050

Ma'aden-Alcoa JV Chooses Wagstaff to Supply Critical Casting ...
TTKN News - 30 Aug 2010
MONTREAL–The Ma’aden-Alcoa joint venture has selected Wagstaff, Inc. to supply the joint venture’s vertical direct chill casting complex with t-ingot, rolling ingot, and extrusion billet casting equipment. The contract includes capital equipment and technology to produce aluminum rolling ingot and extrusion billet at the casting complex, currently under construction and scheduled to start production in 2013 in Ras Az Zawr, Saudi Arabia.
The greenfield smelter and rolling mill comprise the first of two phases in this super-project, which will leverage Saudi Arabia’s bauxite and energy resources with Alcoa know-how, management expertise and support to create the world’s largest and lowest cost fully integrated aluminum manufacturing complex. The rolling mill will be the region’s first and one of the most technologically advanced in the world and will primarily produce can stock, end stock and tab stock for the regional market. It will have initial hot-mill capacity of between 250,000 and 460,000 metric tons per year.
The new contract for the casting complex supply includes Wagstaff leading edge ingot and billet casting systems, as well as integrated automated controls, which have been shown to deliver improved recovery rates, and higher levels of workplace convenience and safety. The casting facility will also feature Alcoa’s advanced proprietary ingot casting technology which yields highly improved surface finish to rolling ingots with consequential gains in rolling efficiency and product quality.
“As a longstanding, dedicated supplier to global Alcoa casting facilities and with many successful greenfield installations in the Middle East and around the world, Wagstaff is uniquely positioned to provide precision, state-of-the-art direct chill casting equipment to the Ma’aden Alcoa joint venture, and to remain a constant resource from current equipment design activities through delivery, commissioning, operator training, post-startup technical support, and beyond,” said Ray Kilmer, Vice President, Alcoa Global Rolled Products.

US Likely to Find China Subsidized Aluminum
Wall Street Journal - 30 Aug 2010
The U.S. Commerce Department is expected Tuesday to find that $550 million in imported Chinese aluminum was illegally subsidized by the Chinese government, people familiar with the situation said, potentially leading to higher import duties as early as next week.
The preliminary decision could boost costs for some U.S. manufacturers, pitting some U.S. aluminum companies against their American manufacturing customers.
The decision, in the latest big U.S. trade case involving China, comes as the White House faces increasing concern about the labor market and the fragile economy. It underscores the delicate balance between free trade and jobs. The Commerce Department on Friday reported that imports surged at a 32.4% annual rate in the second quarter, the fastest pace since 1984.
Following the success of the U.S. steel industry in cases of dumping brought against foreign producers, several midsize and small domestic aluminum companies banded together alleging that Chinese-made aluminum extrusions hurt the U.S. industry between 2007 and 2009.
The $3.57 billion domestic annual market for aluminum extrusions—shapes squeezed out of aluminum—includes companies that assemble the extrusions for aluminum siding, door frames, bicycles and other products. The aerospace industry uses other types of aluminum and isn't affected by the extrusions case.
China is the world's largest exporter of aluminum extrusions, with such exports increasing more than 10-tenfold since 2001. Canada and Australia have made claims similar to the Commerce Department's. Canada last year levied dumping duties on Chinese aluminum extrusions, and a case is pending in Australia.
Once the preliminary duty is announced, the penalty can be assessed in about a week. Importers of Chinese aluminum extrusions would then have to post cash deposit or bonds for the assessed duties.
Typically, a government subsidy involves providing an industry with cheaper resources or favorable tax treatment. A full investigation and a final ruling—at which point the amount of the duty could well change—typically take several months to a year or so.
China's share of the U.S. extrusion market rose to 20% last year from 8% in 2007. At the same time, U.S. manufacturers' capacity-utilization rate, which measures how much of a factory is in use, fell to 50% from 68%. Overall, Chinese aluminum exports have been falling, because the country is using more of the metal to fuel its internal growth.
Chinese producers and importers say the weak U.S. economy, rather than imports, has hurt U.S. producers and that some of the companies complaining to the Commerce Department had purchased Chinese aluminum extrusions for product manufacturing.
Peter Koenig, an outside counsel for Zhaoqing New Zhongyua Aluminum Co. which makes aluminum extrusions in China and has a U.S.-based import division, said the company hasn't received benefits, grants or loans from the Chinese government. "There is really not a foundation to have a subsidy finding," he said.
The aluminum industry, which filed its last trade case in 2004, has been far less active in filing trade cases than the steel industry. Late last year, the U.S. steel industry won its biggest case against Chinese importers, which, according to the ruling, had dumped $2.8 billion of illegally subsidized steel. Steelmakers won another case in June that saw further duties against $200 million in illegally subsidized Chinese-made drill pipes.
"I think the domestic aluminum extruders are pushing for this tariff after the success the steel industry has had in reducing Chinese imports," said Bruce Schwartz, president of fence maker Jerith Manufacturing Co., near Philadelphia. He is concerned that the Chinese will be able to avoid penalties by sending complete fences instead of extruded fence parts. "If a product like my fence or an aluminum ladder is shipped fully assembled into the U.S., it will completely avoid the tariff, giving a significant price advantage to the Chinese producers," Mr. Schwartz said.
He said he laid off workers as a result of the weak economy and didn't expect to rehire them at this point even if the ruling leads to fewer imports and higher prices for Chinese products.
Duncan Crowdis, president of Bonnell Aluminum, which makes door frames for office towers and hotels and is one of the domestic petitioners, said Chinese imports have overwhelmed the market and depressed prices. His Newnan, Ga., company, a unit of Tredegar Corp., has cut its work force to about 850 from 1,300 in 2007. Prices, he said, have fallen between 30% and 50% over that time, mostly as a result of Chinese imports, but also because of the weak economy.
The U.S. International Trade Commission, which investigates whether foreign products are illegally dumped or cause injury to domestic producers, this year issued its ruling in this case and found that U.S. aluminum extruders were injured. It is expected to announce an antidumping duty in October. That duty would be in addition to the duty levied for illegally subsidies.
Write to Robert Guy Matthews at

BHP Billiton dims lights on SA growth
Times LIVE - Aug 29, 2010
Marius Kloppers, the Tukkies chemistry graduate who is chief executive of the world's largest mining group, was indirect when responding to a question on BHP Billiton's SA future at the year-end results presentation in London.
EVASIVE: Marius Kloppers was circumlocutory when responding to a question on BHP Billiton's SA future Picture: REUTERS
Asked about plans for the group's aluminium smelters in SA and Mozambique, he replied: "We will not deploy capital in those businesses. There have been major changes in smelting technology over the past 10 years."
Though not mentioned by Kloppers, the local smelters that process Australian alumina were brought on stream long ago based on long-term contracts with Eskom to deliver power at competitive prices.
SA, which has no aluminium ore of its own, would essentially be earning foreign exchange by exporting electricity.
With Eskom now scrambling to finance the making good of more than a decade of lackadaisical management of power supplies by ramping up its prices, analysts and commentators understand why BHP Billiton will not be looking to SA for growth in this sector.
The Melbourne-registered group has largely completed its SA development programmes at the Douglas-Middelburg thermal coal colliery and at its manganese mining and smelting facilities. There's nothing new on the drawing boards.
The SA operations are essentially the legacy of the group's earlier and partial SA incarnation.
Elsewhere around the globe, growth prospects are different, and their funding and development will be throughout the economic cycle.
This is even though Kloppers expressed reservations about the ability of governments in developed economies to sustain the vigorous pump priming that has so far deflected threats of economic depression. He was also cautious on Chinese growth prospects as Beijing tightens the financial screws to deflate a property bubble.
The year to end-June delivered another record performance. Group revenue rose by 5% to $52.8-billion from fiscal 2009's $50.2-billion, contributing to a 65% increase in operating profit to £20-billion from $12.2-billion.
And with the group's rock-solid balance sheet, sound cash flow and extensive funding commitments from its financiers, Kloppers has no reservations about BHP Billiton's capacity to grow organically and, if need be, to diversify through acquisitions.
Gold remains a no-no. But at present BHP Billiton is engaged in a hostile $40-billion bid for Potash Corporation of Saskatchewan, Canada's leading producer of fertiliser products.
The bid represents a fundamental diversification, even if it becomes a rough-and-tumble over the price.
According to mining analysts, BHP Billiton's financial strength gave the group an edge over possible counter-bidders.
In Australia, the group and its peers are engaged in a raucous fight with Canberra over proposed royalty tax increases.
In the past year, the group authorised $2.9-billion capital commitments for organic growth projects across the globe, taking the end-June outstanding total commitment to $10-billion.

The Russian metallurgical industry dreams of a titanium valley
RusBusinessNews - 27.08.2010 — Analysis
In three months the Sverdlovsk region will send an application to the federal authorities to create a free economic zone called the "Titanium Valley." The plans are for this project to work with the Verkhnyaya Salda Production Association (the VSMPO-Avisma corporation) to manufacture titanium and aluminum alloy products for the domestic and foreign machine-building industry. But, as a columnist for RusBusinessNews explained, the company's managers fear that the corporation will not be able to able to achieve world-class productivity, since they must also finance community and sports facilities in the Sverdlovsk region. And the governor, Aleksandr Misharin is not yet ready to release VSMPO from its public social obligations.
The "Titanium Valley" project has been discussed for years. Several years ago, Eduard Rossel, the governor of the Sverdlovsk region at the time, proposed the idea to create a free economic zone in the city of Verkhnyaya Salda. The regional government even approached the federal Ministry of Economic Development with this proposal. But their request was turned down. As a result, business sees no tax relief on the horizon and is thus in no hurry to invest in an increase in the advanced processing of titanium products at VSMPO. Only Boeing has shown any interest, organizing a joint venture with Ural Boeing Manufacturing, which specializes in machining titanium forgings for the Dreamliner aircraft.
In 2010, at the Farnborough Airshow in Britain, Boeing signed an agreement with the Rostekhnologiya corporation (the VSMPO-Avisma's primary shareholder) to establish a research center for titanium technology and materials. This research center will be in Moscow, not Verkhnyaya Salda, but VSMPO's management hopes that it will help facilitate the advanced processing of titanium. In particular, the center will be responsible for training specialists to able to coordinate the production of chassis parts and other Boeing components.
In preparation for this step, VSMPO approved an investment program until 2013. This year $105 million will be invested in equipment upgrades and next year the investment will grow to $200 million annually. The funds will primarily be spent on increasing the volume of production in the forging and stamping shop, which stopped fulfilling orders in 2008.
According to Nikolai Melnikov, VSMPO-Avisma's executive director, they produced 27,500 tons of titanium mill products the year before the economic crisis hit, but this fell to 19,700 tons in 2009. Now, orders for titanium slab have grown to 22,500 tons, and further increases in production volume are expected in 2011. "Judging by the orders coming from the United Aircraft Corporation and the defense industry, next year is looking more like 2007," a manager evaluated the situation. Purchases of new equipment will help increase the production of titanium mill products by 12,000 tons a year and improve product quality. VSMPO also plans to open their own foundry.
For years there have been issues with poor quality castings coming from Russian plants. According to the press office of the Sverdlovsk regional Union of Industrialists and Entrepreneurs, the foundry capacity is obsolete. The average service life of casting equipment at the plants in the region is over 23 years and more than 70% of the equipment is worn. The condition of the production facilities for casting processing means that precise, high-quality castings of complex geometric shapes and sizes cannot be produced. Thus, the production of castings operates at only 20-60% of capacity. Some shops only work a few shifts a month, due to the lack of orders. In connection with this, a program was launched in the Sverdlovsk region to encourage the growth of castings production until 2020, but industrialists note that the situation is not improving.
Tatyana Kansafarova, the vice president of the regional Union of Industrialists and Entrepreneurs, believes that it is necessary to change the legislative framework of the Sverdlovsk region and Russia, and to more actively lobby for the interests of the foundry industry in order to attract investment.
VSMPO's managers say that they aren't experiencing any problems with investment, but they are still counting on assistance from the government. According to Mikhail Voevodin, the general director of VSMPO-Avisma, it has been determined who is going to participate in the free economic zone, but before they invest, the candidates would like to know what incentives the government is going to offer them. "Investors want to be sure that the free economic zone will really be established. You can hardly count on someone coming and giving money unless there is a favorable tax structure," he emphasizes.
Aleksandr Misharin, the governor of the Sverdlovsk region, claims that the federal government is prepared to free investors from income tax, VAT, and customs duties obligations. According to him, the fate of the project depends on how quickly and ably the officials and businessmen can finalize the proposal. This will take at least three months and, as the regional head hopes, by the end of 2010 a decision will have been made on the Titanium Valley. Aleksandr Misharin expects that businesses in Verkhnyaya Salda that receive these incentives will be able to produce globally-competitive products and create new jobs.
Mikhail Voevodin told the governor that VSMPO will not be able to compete on the global market if must subsidize the housing and public utilities sector, sports facilities, dining, and other types of infrastructure. But Aleksandr Misharin let him know that VSMPO's public social obligations were only going to increase. According to Mr. Misharin, in 2010 the corporation will owe not only a billion rubles in taxes, but must help to finance a maternity hospital in Verkhnyaya Salda and also take part in a program to develop sports and community facilities.
And, of course, salaries for the corporation's employees must be increased and new jobs created, as well.The questions remains - how will VSMPO compete on the global market against companies that do not have to build maternity hospitals? Vladimir Terletsky

Vimetco CEO:$2000/Ton Pivotal For Aluminum Smelters
Trading Markets (press release) - 27 Aug 2010
The pivotal level for whether or not aluminum smelters are able to operate profitably is $2,000 a metric ton, the Chief Executive of Netherlands-based Vimetco NV (VICO.LN) told Dow Jones Newswires Friday.
According to Frank Muller, the $2,000/ton level is "borderline" for many smelters. "Below this level, a lot of smelters find it very difficult," he said. "The economic crisis has not gone away--we will see further shutdowns," he said.
Some of these closures--which are expected to happen mainly in China because of the country's high cost of energy--will likely be permanent, Muller added.
Vimetco, which joined other aluminum producers in slashing budgets, reducing capacity and delaying projects during the economic downturn, restarted its investment program in 2009 as market prices and demand improved. The company--the seventh-largest aluminum producer in the world--is focusing on high value-added products as it grows its business.
Muller said the company is currently producing around 760,000 tons a year in China and 206,000 tons in Romania. Production at its Chinese operations will rise by around 90,000 tons as the company completes the third stage of an expansion, while a potline of about 46,000 tons has been idled in Romania.
"Our focus is on quality--demand [for metal] rises when quality rises, and this is a key issue for improving the market in China," he said. "With a quality product you can substitute imports or low quality domestic production in China," he added.
The company doesn't face the same exposure to high coal prices as domestic Chinese smelters do because it has its own integrated power supply. Muller said the company remains confident that China's demand for aluminum, used in construction and automotives, will continue as the world's biggest consumer of the metal feeds its voracious appetite for growth.
For example, the rate of growth in the Chinese car market is an extra 1 million cars a month, with each car accounting for some 170 kilograms of aluminum, Muller said.
The company's primary aluminum production rose 54% year-on-year in the first half 2010, to 429,000 metric tons.
Primary aluminum sales were also higher at 437,000 tons, a rise of 46% on year.
Processed aluminum production was up 29% at 62,000 tons and processed aluminum sales rose 54% to 58,500 tons, the company said.
Net profit for the first half was meanwhile unchanged at $15 million.
The successful continuation of our vertical integration strategy, combined with the investment made in China and a tight focus on cost control has had a positive impact on the business," said Muller. "We have continued our policy of securing raw material and energy sources along with continuously improving our technology and the range and quality of our products."
The aluminum producer, which has the capacity to produce around 1.1 million tons annually at operations in China and Romania, reported primary metal sales of 649,000 metric tons and processed products sales of 88,000 tons last year.
-By Andrea Hotter, Dow Jones Newswires; +44 (0)20 7842 9413;

Venezuela's aluminum smelter operates at 30 percent capacity for labor protest
El Universal - 26-Aug-2010
“We, workers, are witnessing a fight for personal benefits, bribery, just like in the Fourth Republic,” said Manuel Díaz, director of Venalum trade union
About 2,200 contractor's workers and nearly 4,800 workers of Venezuelan aluminum smelter CVG Venalum are demonstrating since Thursday morning in the premises of the plant. They rejected delays in the renewal of their collective bargaining agreement and failure to comply with the effective agreement, reported Manuel Díaz, a director of the workers union.
The trade union leader said that Venalum "is operating only at 30 percent capacity because workers are tired of the breaches to the collective bargaining agreement, which has not been renewed in the last four years.#
"Meritocracy and technological improvements have been disregarded and apparently authorities are trying to undermine the company. We want that the USD 700 million received by the government for future contracts to be used to optimize the plant and pay labor liabilities," he added.
Díaz said that the workers are disappointed at the so-called workers' governance. "We, the workers, are witnessing a fight for personal benefits, bribery, just like in the Fourth Republic."

Vedanta halts refinery expansion, questions Govt's intentions
Economic Times - 26-Aug-2010
MUMBAI/KOLKATA: Vedanta Aluminium has halted its expansion programme at the alumina refinery at Lanjigarh, in Orissa, after the government issued a notification making it mandatory for companies to seek environment clearance for any major change in processes.
On August 24, the Central government said that Vedanta Aluminium had not sought prior approval for expanding the refinery capacity to 6 million tonnes from 1 million tonnes. Another government decision that day, announced by the minister of state for environment and forests Jairam Ramesh, stopping plans to mine bauxite at Nyamgiri near Lanjigarh, attracted much more attention but the brake on the refinery expansion could have a longer term impact on the fortunes of Vedanta. The bauxite was to be supplied to the refinery.
The chief operating officer of the Anil Agarwal-controlled company, Mukesh Kumar, expressed his doubts on Thursday over the “intention” behind these announcements in view of an earlier notification.
The ministry of environment and forests had said on August 19 that for all projects which were increasing capacity and where terms of references—the guidelines and scope for any expansion—have been mentioned and where construction activities have been started, the terms of references may be suspended or withdrawn.
"Instances have come to the notice of this ministry where project proponents have undertaken construction activities without obtaining requisite environmental clearance...No activity relating to any project covered under this notification, including civil construction, can be undertaken at site without obtaining prior environmental clearance," the notification added.
The notification relates to environment impact assessment (EIA)— a crucial part of the project approval process under the Environment Protection Act. The EPA is the umbrella legislation that regulates the impact of all industrial and commercial activities on environment.
The Vedanta official said that no prior approval for expansion was needed according to the rules in place—the Environment Impact Assessment notification of 2006—before the changes announced on August 19.
"There is no threshold limit given in the EIA notification for such a project," Mr Kumar told ET. "Hence prior environment clearance, as per the notification for our proposed expansion, is not mandatory before undertaking any construction activities."
Mr Kumar also referred to a section in the 2006 notification which stipulates that approval to the terms of reference for any project has to be announced within 60 days from the date of submission. "If the decision is not conveyed within 60 days, then the terms of references suggested by the applicant, "shall be deemed as final terms for the EIA study."
Vedanta had submitted its proposal for expanding the capacity to the ministry of environment and forests for approval on October 3, 2007. The company didn't get approval within 60 days, which is the mandatory period as per the notification.
Mr Ramesh did not respond to calls and text messages sent to his mobile.
While the expansion programme has been stopped, Vedanta Aluminium will continue with operations at the existing one million tonne refinery in Orissa. The unit is presently running at 90% capacity with bauxite purchased from outside the state. "Though Niyamgiri is off limit, we are hopeful of getting fresh allocation of bauxite reserves within 30 km of our refinery. There are some 500-600 mt of reserves in and around our refinery. Logistically, it won't be much of a problem," said Mr Kumar.Vedanta needs three million tonnes of bauxite to operate its one million tonne refinery. The company has been sourcing 60% of its bauxite needs from group company Balco. It has also been using a blend of the ore using bauxite purchased from states like Maharashtra, Gujarat, Chhattisgarh, Madhya Pradesh, Andhra Pradesh, Jharkhand and Bihar.

Qatalum's loss is gain for others
MEED (subscription) - 27 August 2010

Sohar Aluminium and Emirates Aluminium will have capacity to sell to make up for smelter closure

The complete shutdown at the $5.7bn Qatar Aluminium (Qatalum) smelter has proved that even the best made plans can go wrong.

The plant is a brand new facility with the state-of-the-art technology. The 50:50 joint venture partners of Qatar Petroleum and Norway’s Hydro are what many would consider to be a perfect match of local knowledge and international expertise.

So how a power outage at the smelter resulted in a complete loss of primary metal production is something that needs to be explained. Hydro, who sells the metal produced, will be demand to know what caused the company to lose 20 per cent of its global capacity overnight.

Digging out the solidified metal from the 444 cells affected is a laborious process and the full start-up of Qatalum has now been delayed by at least six months. However, it is the loss of the metal and the loss of its customer’s faith that will concerning Hydro shareholders.

The only positive aspect of the whole situation is that the cast house is still in full working order so as long as Qatalum can source metal then it can still produce billet and foundry alloy for its customers.

There is a global surplus of primary metal and the local smelters in the GCC such as Oman’s Sohar Aluminium and the UAE’s Emirates Aluminium will hopefully have some spare capacity to sell. Qatalum certainly needs all the help it can get.

Alba eyes major push at top aluminium expo
Gulf Daily News - August 26, 2010
MANAMA: Alba's commitment to enlarge the global presence of its products, expand its customer base, and position Bahrain as a destination for international investors will be the thrust behind its involvement as a sponsor and participant in Aluminium 2010.
Aluminium 2010, a major trade fair and conference and one of the foremost B2B platforms for the aluminium industry, will be held from September 14 to 16 at Essen in Germany.
It will be attracting the who's who of the industry encompassing the entire spectrum of the value chain, from producers, processors, technology suppliers to consumers.
More than 890 companies from 45 countries are expected to attend the event.
"The fair offers Alba a tremendous opportunity to explore business possibilities with potential trade partners, meet customers and suppliers from around the world, learn about new developments in the industry, and project Bahrain's attractiveness as an economic destination," said Alba chief executive Laurent Schmitt.
"Our support for this event highlights our continuing commitment to strengthen the growth of the industry, and also, underlines the confidence we have in the industry's long-term success," he added.
The exhibition area at Aluminium 2010 has been increased to 60,000 sqm this year and the halls will be given a clearer thematic structure to include elements from the value chain: primary production and supplier technologies, casting and heat treatment, semi-finished products and semi-fabricates, surface treatment and technologies, metal working and processing, and a segment devoted to aluminium joining technologies.
A conference, under the theme "Aluminium - Material of the Future", will also be held alongside the exhibition.
Five different sessions are planned during the three days and are expected to cover topics related to production processes, transport, automotive, surface and aluminium markets.

Ex-growth future likely for Southern African aluminium smelters - BHP Billiton
Creamer Media's Mining Weekly - August 25, 2010
... aluminium smelters compared with Worsley, which BHP Billiton also operates and partly owns and which incorporates a bauxite mine and alumina refinery in ...

Global Aluminum Production Falls
MetalMiner - August 25, 2010
Recent smelter closures have seen global aluminum production drop in July for the first time since Q1. Output dropped to 112,000 tons per day in July from 114,100 tons per day in June according to a Reuters report. That equates to an annualized drop of 640,000 tons conveniently very close to the 700,000 tons predicted by us recently as the capacity in Henan province that had been earmarked for closure following government directives to close out dated, polluting and less efficient plants. In fact while most of the drop did come from China, it may have had more to do with low prices squeezing producers margins than the government directives.
At the same time exports from China have almost doubled this year to 1.03 million tons as a mix of primary metal chasing higher physical premiums and downstream semi finished products have found ready export markets. Some downstream products such as small extrusions still carry export rebates of 13-15% but volume bar and plates products had export rebates slashed last year and the only exports now are those miss-labeled as a finished product – a frequent tax avoidance game played by Chinese exporters brave enough to take on the customs inspections at ports.
Bloomberg reported that China became a net exporter of aluminum for a second month in July as imports plummeted and exports stayed firm. The paper suggests this is due to falling domestic demand and it’s true to say inventory in Chinese domestic warehouses has jumped 65% this year as production surged to a record 1.42 million tons per month prior to the recent closures.
Outside of China, smelters in North America and the Middle East have closed following power outages. Rio Tinto Alcan’s Laterriere smelter in Quebec lost one of its two pot-lines last month following a transformer failure. Production could be down for weeks or months, details are almost non-existent. Likewise Norsk Hydro’s JV Qatalum smelter in Qatar experienced a power failure this month as it was ramping up towards its 585,000-ton capacity. How much of the plant has been effected is uncertain but estimates are up to 120,000 tons of production capacity down.
None of this seems to have impacted the price. Wider fears about growth in the US and China seem to be driving equity markets at present and the metals prices are taking a lead from that. If prices continue to slide towards $2000 per ton there will be less incentive for marginal capacity to be brought on-stream in China over coming months. In the medium term prices are expected to rise but in the short term the markets are looking rather uncertain. –Stuart Burns

Vedanta Won't Drop India Project
Wall Street Journal - AUGUST 25, 2010
NEW DELHI—Vedanta Resources PLC won't abandon its mining project in the Niyamgiri Hills of the eastern Indian state of Orissa despite the federal environment ministry blocking the plan, the chief operating officer of its local aluminum unit said Wednesday.
The federal ministry rejected clearance for the London-listed company's plan Tuesday, saying the project had violated forest laws and its proponents displayed "blatant disregard" to the rights of tribal people in the area.
However, Vedanta's Mukesh Kumar said there was no violation of any forest or environment laws and the state government has implemented the Forest Rights Act in the area. "There is no question of abandoning this project," he said.
Mr. Kumar said Orissa Mining Corp., a body under the state government, and not Vedanta, holds the mining lease for the area. The state may legally challenge the federal ministry's decision to block the project, he added.

Chalco Seeks to Invest in Coal, Power Producers to Cut Costs, Xiong Says
Bloomberg - Aug 24, 2010
Aluminum Corp. of China Ltd., the country’s biggest producer of the metal, is seeking to invest in coal and power producers, and is studying projects in Southeast Asia to access cheaper power and raw materials.
“In neighboring countries such as in Southeast Asia, there are rich bauxite, coal and hydropower resources, and Chalco is actively seeking investment opportunities,” Chairman Xiong Weiping, 53, said in a Bloomberg Television interview today in Hong Kong. “We are willing to form strategic partnerships with power and coal companies by stake purchases to ensure stable and low-cost supplies.”
Xiong plans to diversify into coal, iron ore and rare earths as higher fuel costs and aluminum overcapacity in China, the world’s biggest metals consumer, crimped profit margins. The Beijing-based company known as Chalco posted a loss of more than 500 million yuan ($74 million) in June alone on power costs.
“Chalco will not simply expand aluminum and alumina capacity in the future, and will focus on building our own coal production base and coal-fired or hydropower plants to produce aluminum,” Xiong said. The company buys almost 20 million metric tons of coal a year.
Chalco, which posted a second-quarter loss on Aug. 23, fell as much as 3.2 percent to HK$6.06 and traded at HK$6.08 at 11:20 a.m. local time in Hong Kong. In Shanghai, it fell 1.1 percent to 10.16 yuan.
“With electricity cost accounting for roughly 35 percent of smelting cost, we believe the company would remain under margin pressure, unless there is a strong recovery in demand,” Goldman Sachs Group Inc. said in a report yesterday.
Malaysian Power
Chalco in February agreed to jointly develop and operate a $1 billion smelter with billionaire Syed Mokhtar Al-Bukhary in Malaysia’s eastern Sarawak state where a $2.4 billion hydroelectric dam is near completion.
“Securing coal and hydropower resources is key to ensuring Chalco’s cost competitiveness and protect against price fluctuations,” Xiong said. It plans to build two to three coal production bases in three years, he told reporters yesterday.
Indonesian coal shipments to China more than tripled to 34.8 million tons in the first seven months of the year, or about a third of the nation’s total purchase. The Southeast Asian country is China’s largest coal supplier, according to Chinese customs data.
Capacity Cuts
Chalco plans to shutter 330,000 tons of outdated aluminum capacity by 2011, Xiong said today. That would be about a third of the 1 million tons of capacity the Chinese government wants closed in the whole country as part of its plan to curb metal pollution and energy usage.
The company plans to build new low-cost facilities at Liancheng Aluminum Plant in Gansu, Xiong said.
China, the biggest consumer of aluminum, is suffering from overcapacity as production has “developed too fast,” depressing prices, Xiong said. The company yesterday said output in China would surpass demand by 500,000 tons.
Demand has also been hurt as the government curbed property speculation, he said. More than a third of aluminum demand comes from the property sector.
“China will step up urbanization and will restructure the real estate market, in particular provide more government- subsidized apartments, which will boost aluminum demand,” Xiong said. “In the next three years, aluminum demand will increase as the economy grows and aluminum replaces other metals. I expect the 20-30 percent overcapacity will disappear.”

Vedanta vendetta - Final nail in Vedanta aluminium plans in India
SteelGuru - 25 Aug 2010
It is reported that in a big blow to Vedanta Resources, the Indian government has rejected environment clearance to its USD 1.7 billion bauxite mining project in Orissa.
It not only rejected proposal to mine bauxite in the Niyamgiri Hills of Orissa but also slapped a show cause notice on why the permit for its Lanjigarh refinery should not be cancelled, which is increasing its capacity to 6 million tonnes per year from 1 million tonnes per year without getting the requisite clearance. The refinery has also illegally diverted 26 hectares of forest land.
The environment ministry, which detailed serious violations by Vedanta at Niyamgiri Hills, said allowing mining at this site would deprive two primitive tribal groups of their rights and shake their faith in the law of the land.
Giving reasons for the denial of clearance, Mr Jairam Ramesh the environment minister of India said that there has been a very serious violation of the Environment Protection Act, Forest Conservation Act and the Forest Rights Act.
He said “There have been no emotions and no politics and no prejudice involved in this report. I have taken this decision in a proper legal approach.”
The decision came after the Forest Advisory Committee, which had submitted the report to Mr Jairam Ramesh after reviewing the suggestions given by the N C Saxena panel seeking ban on the mining project in Orissa’s Niyamgiri Hills in view of various violations at the site.
The Saxena report has citied many violations of the in principle environment clearance given to Orissa Mining Corporation in 2008 including non compliance with the provisions of the Forest Rights Act.
(Sourced from Press Trust of India and ET)

Revstone Buys Kaiser Aluminum Forging Operations
PR Newswire (press release) - 24 Aug 2010
SOUTHFIELD, Mich., Aug. 24 /PRNewswire/ -- Revstone Industries, LLC announced Friday the acquisition of Kaiser Aluminum's forged metals facility in Greenwood, SC. The facility will operate as part of Revstone's Cast Metals division under the new name Revstone Contech Forgings. The addition brings aluminum forging to Revstone's award-winning aluminum casting operations, improving Revstone's ability to meet a more fuel efficient auto industry's demands for lighter-weight parts and components.

"The acquisition of this aluminum forging operation takes our Revstone vision to the next level and allows us to offer an even wider range of process solutions to our customers," said George Hofmeister, Chairman and CEO of Revstone.

"It is our strategy to seek out and develop production processes that provide high integrity, lightweight products to the transportation industry. Aluminum forgings fit very well into that vision because they provide safety critical components with superior mechanical properties that can't be achieved through other processes."

"The Greenwood facility is already a solid operation," said David Jaeger, President of Revstone's Cast Metals Group. "Our emphasis will be to grow the business with additional product families and extended value-add operations like machining and assembly."

Revstone engineers, designs, manufactures, and markets innovative products for the transportation & heavy truck industries, with more than $1 billion in projected revenues. With the purchase of Kaiser Greenwood assets, it now operates more than 50 parts manufacturing facilities throughout North America.

Alcoa names Chris L. Ayers COO of primary products
BusinessWeek - August 23, 2010, 3:15PM
Alcoa names Chris L. Ayers COO of primary products
Aluminum manufacturer Alcoa Inc. said Monday its board has named Chris L. Ayers as chief operating officer for its global primary products business, effective immediately.
Alcoa makes primary aluminum for numerous industries, operating 23 aluminum smelters around the globe and nine alumina refineries. It maintains bauxite assets in Australia, Brazil, Jamaica, Suriname and Guinea.
Ayers previously served as COO of the company's cast, forged and extruded products division within Alcoa's engineered products and services business.
Separately, Alcoa named Kevin J. Anton as chief sustainability officer. He has led the company's sustainability steering committee for the past year, and previously served as vice president of finance and strategy for Alcoa Global Primary Products.
Anton will be responsible for developing a sustainability strategy and action plan that coordinates the efforts of government affairs, environment, health and safety, as well as Alcoa's marketing, communications and philanthropic efforts.

Aluminum Surplus to Swell as China Boosts Output, Sumitomo's Kamitani Says
Bloomberg - Aug 22, 2010
Global aluminum production may outpace demand this year by more than predicted because of expansion led by China, the biggest supplier and consumer, said Japan’s third-largest trading house.
The company increased its forecast because output in China “appears to be greater than we expected earlier this year,” Motoi Kamitani, Sumitomo Corp.’s manager of light metal trading, said in an interview in Tokyo Aug. 20.
Aluminum, used in cars, packaging and homes, has dropped by 7.9 percent London this year as world supply exceeded demand by 314,000 metric tons, according to the World Bureau of Metal Statistics on Aug. 18. Prices jumped 45 percent in 2009, the first annual advance in three years, as stimulus measures lifted the global economy out of its worst recession since World War II.
Sumitomo predicts a surplus of 2.5 million tons for 2010, up 32 percent from its January estimate of 1.9 million tons and compared with 1.8 million tons in 2009, Kamitani said. Supply may exceed demand by 2.3 million tons next year, he said.
Aluminum production in China may jump 29 percent from last year to 17.4 million tons, or 5.5 percent more than the January estimate, he said. Demand may increase 21 percent to 17.3 million tons, or 4.8 percent more from January, he said.
The country has produced 1.3 million tons to 1.4 million tons a month since the second half of last year as prices advanced, up from 800,000 to 900,000 tons a month in the first half of 2009, he said. “There’s still room for a further increase as the country has an annual capacity of 20 million-22 million tons,” he said.
Importer in 2012
From 2012, China may turn into a net importer as demand outstrips production and domestic stockpiles drop, Kamitani said.
Auto sales in China, the world’s biggest market, may climb to 16 million this year, the China Association of Automobile Manufacturers said Aug. 10, boosting its prediction from a previous estimate of 15 million. The State Information Center said in April auto sales may jump 17 percent to 16 million from a record 13.6 million in 2009.
Demand in Japan, Asia’s largest importer, may expand 17 percent to 2 million tons this year from 2009, a level 7 percent above the January estimate, he said. Usage increased in the auto industry after a subsidy program exempted purchases of electric, hybrid, natural gas and some diesel vehicles from taxes. Information technology exports also increased, he said.
Lower Fees
Aluminum buyers in Japan may win a cut in fees from major suppliers for October-December as charges for immediate delivery drop to $110 a ton and traders may be forced to sell the metal amid rising costs to maintain stockpiles, Kamitani said. It would be the third straight quarterly decline, he said.
Premiums for the third quarter were set at $120 to $122 a ton over the London cash price, down from $122 to $124 the previous quarter, three executives involved in the negotiations said in early June. The fee was $125 to $130 in the first quarter, the highest level in at least 14 years.
The metal climbed 0.8 percent to $2,056 a ton at 2:16 p.m. in Singapore.

Noranda Bauxite optimistic
Jamaica Observer - August 22, 2010
Noranda Jamaica Bauxite Company, boosted by increased demand and improved prices for the commodity, have latched unto the new wave and are poised to significantly increase their output.
Sources at Noranda, one of the few companies that had maintained production in the face of the massive fallout in the bauxite sector last year, are expressing cautious optimism, even as they prepare to boost their production driven by an increased appetite within their parent group of companies in the United States.
Noranda currently produces and ships 4.6 million tones of bauxite per year and plans within the next two years to increase that by 10 per cent. Sources at the company note that Noranda's production volumes are not driven only by market prices however, as significant investments are also being made in both employee training and additional equipment sourcing to secure this increased capacity.
They contend that although prices have increased from the market low of 2009, they are still below industry norms so gains will have to come from increasing efficiencies.
The St Ann based company will be loading in excess of 120 ships this year and company spokespersons note that increased productivity and the availability of cheaper energy sources such as LNG will be critical to the viability of their operations locally.
Noranda also has in place a unique programme to encourage employees to recommend ways and means of enhancing production and productivity that is reaping success, resulting in significant savings and improvements in employee productivity. The initial roll out of the programme to all employees saw them responding with close to 500 suggestions for improvements. These suggestions are being actively followed up, company sources note.
Pundits such as Dennis Morrison, an economist and expert on the sector make it clear that for the industry to rebound, a new approach is required centered around more efficient production and sourcing cheaper energy, particularly for alumina production.
Energy and Mining Minister James Robertson has championed the need for a cheaper energy source in the form of Liquid Natural Gas (LNG), seeing it as critical to the survival and growth of Jamaica's productive sector including cost sensitive ones such as bauxite and alumina which currently rely on oil fired kilns which are uneconomic based on the volatile price factor of the fuel.
The recent reopening of UC Rusal's Ewarton works also driven by increased demand within the Russia based group, is also said to be contingent on significantly increased productivity and economies of scale.
Noranda Bauxite, which was formerly owned by Kaiser, is wholly owned by Noranda Intermediate Holding Corporation, Nashville, Tennessee. Noranda is a leading North American integrated producer of value-added aluminium products, while Noranda Bauxite in Jamaica provides all the bauxite ore used for alumina production at Noranda's alumina refinery.

New bauxite reserves found in Binh Phuoc
Thanh Nien Daily - 8/21/2010
Construction site of Vietnam's first aluminum plant in the central highlands province of Lam Dong. Bauxite reserves of nearly 1 billion tons have been found in the southern province of Binh Phuoc.
Bauxite reserves of nearly one billion tons have been detected in the southern province of Binh Phuoc, the National Institute of Mining – Metallurgy Science and Technology said Friday.
Located in two mines in Bu Dang District, the new reserves are the third largest after those found in the central highlands provinces of Dak Nong and Lam Dong, according to the institute under the Ministry of Industry and Trade.
Lam Dong was estimated to have some 1.2 billion tons of bauxite reserves, and Dak Nong, 3.4 billion tons. Bauxite is refined into alumina, which is then smelted into aluminum metal.
The newly-discovered reserves will meet the demand of the ministry’s plan to build an aluminum plant in Binh Phuoc in 2016, the institute said.
Vietnam’s first aluminum plant is being constructed in Lam Dong and expected to start production this year with the capacity of producing 650,000 tons of alumina annually. Another plant also broke ground in Dak Nong early this year.
Vietnam has 5.4 billion tons of bauxite reserves, the world’s largest after Guinea and Australia, according to a US Geological Survey report published last year.

Next round of rebate cuts in China may include aluminium semis
SteelGuru - 21 Aug 2010Reuters reported that China may consider a cut in tax rebates for semi finished aluminium products in its next review, likely lowering output in the world's biggest producer of the metal.
Industry sources and analysts said that aluminium products are the only base metal that now qualifies for tax rebates. But Vice Commerce Minister Mr Jiang Yaoping had said last week that China may cut a series of tax rebates given to exporters of energy intensive products.
(Sourced from Reuters)

Spot aluminium premiums in Asia rise on Qatalum shutdown -trade
Reuters Africa - Aug 19, 2010

* Spot aluminium premiums rise in Asia on Qatalum
* Offers above $120 versus around $110 in June to July
* End-users hope LME stocks cap premiums

HONG KONG/TOKYO, Aug 19 (Reuters) - Spot primary aluminium premiums are up about $10 in Asia as a production halt caused by power loss at the 585,000-tonne capacity Qatalum smelter in the Middle East crimps supplies, traders said on Thursday.
Producers offered spot aluminium at premiums of around $120 per tonne for good Western metal, the benchmark grades for premiums in Asia, traders said, with brokers asking above $120, up from around $110 in June to July.
"We are limiting spot sales mainly because of the Qatalum issue," a supplier source said.
He added the firm is only selling to selected clients and wanted premiums at least $120 per tonne over cash London Metal Exchange prices .
"The impact from reduced output (at Qatalum) will be felt in the coming six months," said an aluminium end-user in Japan, the top importer of primary aluminium in the region.
Norsk Hydro (NHY.OL: Quote) said last week that the Qatalum smelter, a 50/50 joint venture between Qatar Petroleum and the Norwegian aluminium company, had suffered a sudden shutdown of production due to a power outage, which would delay the smelter's ramp-up schedule.
Continuous electricity supply is a must for energy-intensive primary aluminium production and an unplanned shutdown to cells could lead to repairs for weeks or months, Chinese smelter officials said.
A trader at a large Japanese trading house said he expected the shutdown could cause a loss of 100,000 tonnes of metal and that could tigthen supplies in Asia.
Trading houses are building stocks on expectations of higher spot premiums in the coming months, but spot supplies are scarce in the region, traders said.
"We want to buy some Russian aluminium. But there is not much around and supplies in LME warehouses (in Asia) are expensive with the cost over $100," an international trading house dealer said.
Non-good Western metal, including Indian and Middle East, is being offered to China and Taiwan at premiums of $100-$105, compared to below $100 in June to July, traders said.
Despite more than 4.4 million tonnes of LME aluminium stocks on hand, cash aluminium MAL0 has seen an $18 backwardation over the delivery period on Sept 15 MALc1, implying tight supplies given that prompt deliveries are more expensive than those for forward.
But buyers are cautious about paying high premiums considering that the backwardation may spur more stocks going from the LME warehouses and to the spot market, traders said.

Buying from Japan and South Korea, active spot aluminium buyers in Asia, has slowed in the past few weeks, and spot orders from China, whose imports hit a record last year, have been very quiet in the past few months on abundant local supplies, they said. (Editing by Ed Lane)

RPT-Aluminium ETP awaits regulatory approval -source
Reuters Africa - 17-Aug-2010
HONG KONG/SINGAPORE, Aug 17 (Reuters) - A physically-backed aluminium exchange-traded product (ETP) planned by Glencore International [GLEN.UL] and Credit Suisse (CSGN.VX: Quote) is likely to be launched on a Swiss exchange, a source familiar with the matter said.
Swiss-based Glencore, the world's biggest commodity trader, and Credit Suisse declined to comment.
The size of the ETP, which would allow investors to invest in aluminium without the complications of managing a physical stockpile or repeatedly rolling forward contracts on the London Metal Exchange (LME), would depend on how popular the fund proves to be.
The ETP would buy metal only after investors purchase units.
ETP is an umbrella term covering exchange traded funds (ETF) and exchange traded notes (ETN).
"(The launch) has been waiting for the final approval (from the local regulator) for ages. The ETF can be launched the day the regulator agrees," the source said on Tuesday.
He said the two essential processes of organizing the ETP -- securing suppliers of the metal and finding a warehousing system to stock it -- had been arranged.
Although the fund itself may not have stocked up on any metal yet, market watchers say a steady fall in LME stocks over the past three months may be the result of potential suppliers acquiring material with which they could start the investment vehicle.
"There is no shortage of aluminium and the steady deliveries out of LME warehouses may be low-level buying by someone linked to the ETF putting together a stockpile," a trader in Sydney said.
Several industry sources told Reuters last year that Glencore and Credit Suisse were planning an aluminium ETP. [ID:nLH639020]
ETPs have proven popular for precious metals, as many investors regard them as cheaper, easier and safer than derivatives contracts. [GOL/SPDR]
A senior executive at Russia's UC RUSAL (0486.HK: Quote), the world's biggest aluminium producer, said in April that the firm was also considering an aluminium ETF. [ID:nTOE63B079] (Additional reporting by Pratima Desai in London, editing by Anthony Barker)

New Zealand : AGL and New Zealand firm Meridian Energy to set up $1 billion ...
Power-Gen Worldwide - August 16, 2010
AGL Energy Thursday said it had reached an agreement with New Zealand firm, Meridian Energy for the construction of a wind farm in Victoria State. The cooperation will see the New Zealand renewable energy firm, Meridian, and AGL set up a wind farm at an estimated $1 billion worth of investment. The wind farm will subsequently become the biggest such renewable energy project of its kind in the south west of Victoria.
The new wind farm is expected to produce 420MW and will be constructed by Danish firm, Vestas, and Leighton Contractors. Named the Macarthur wind farm, the project is expected to be complete by early 2013, according to a statement from AGL Energy. As such, the 420 MW Macarthur wind farm is expected to provide power to about 220,000 in Victoria State and will reduce green house gas emissions for the state by a whopping 1.7 million tons per annum. This is the equivalent of retiring about 420,000 auto mobiles from Australian roads. A statement from AGL Energy further said that the investment had been helped by the adjustments made to the country s Renewable Energy Scheme. Michael Fraser, AGL chief executive, said the investment is line with AGL s renewable energy plans and thus foments the company s position as one of the foremost developers, owners and operators of clean energy assets in Australia. In the agreement, AGL and Meridian will submit 50% of the overall investment cost each for the wind farm. The Macarthur wind farm will run 140 Vestas wind turbine generators. AGL said its 50% investment input into the project will be financed through its existing balance sheet capacity. Additionally however, AGL gets all of the wind farm s energy output and renewable energy certificates. AGL said the wind farm project would create employment for some 400 individuals directly, and an additional 800 indirect jobs to be generated during the construction. Upon completion, the wind farm will employ 30 full time employees. Analysts said the major renewable energy undertaking is sign that investors are regaining confidence in the Australian Clean energy sector following a long period of uncertainty. Meridian Energy is the largest state-owned electricity generator in New Zealand, supplying electricity to the largest customer, the Tiwai Point Aluminium Smelter and over 180,000 residential, business and rural customers throughout our country. Its electricity is generated entirely from renewable resources.Ltd.

Vedanta Aluminium's Orissa Mine Should be Rejected, Government Panel Says
Bloomberg - Aug 16, 2010
Vedanta Resources Plc’s plan to mine in the Indian state of Orissa should be rejected because it will endanger the livelihoods of locals, a panel set up by the environment ministry said.
“Allowing mining in the proposed lease area by depriving two primitive tribal groups of their rights over the proposed mining sites in order to benefit a private company would shake the faith of tribal people in the laws of the land,” a four- member committee said in a report.
Permission to Vedanta, controlled by billionaire Anil Agarwal, to mine in the Niyamgiri hills in Orissa has been delayed for more than four years by opposition from tribal communities and concern over damage to the environment. The panel report, if accepted by the ministry, may hurt the company’s plan to raise capacity at its Indian unit, Vedanta Aluminium Ltd.
Vedanta Aluminium spokesman Bibek Chattopadhyay declined to comment on the committee’s findings.
India’s environment ministry formed the panel in June to investigate the impact of mining on local tribes and wildlife in Orissa, where Vedanta hopes to develop bauxite reserves.
‘Final Clearance’
The report will be considered by another panel on August 20, Minister for Environment and Forests Jairam Ramesh said in New Delhi today.
“The immediate issue in front of me is whether to issue final clearance for mining,” Ramesh said.
The company has violated laws including the Forest Conservation Act and the Environment Protection Act, the 119- page report said. Chattopadhyay declined to comment.
Vedanta Aluminium plans to use bauxite from the proposed mine to run its alumina refinery in that region. The mine will help the company, which produced 762,000 metric tons of alumina in the year ended March 31, reduce its raw material costs. Aluminum is made from alumina refined from bauxite.
Vedanta Aluminium won approval for a 375 billion rupee ($8 billion) expansion from the Orissa government to increase its smelter and refinery capacity six fold each to 1.6 million tons and 6 million tons respectively, Senior Vice President A.K. Samal said last week.
Separately, Vedanta Resources said today it agreed to buy as much as 60 percent of Cairn India Ltd. for $9.6 billion to gain access to India’s biggest onshore oil field.
To contact the reporters on this story: Bibhudatta Pradhan in New Delhi at; Abhishek Shanker in Mumbai at

Platts Introduces World's First Daily Alumina Price Assessments (press release) - 15 hours ago
"A daily assessment of alumina, reflecting its value at given locations particularly in the Asia-Pacific region, will enable the whole
aluminum complex to ...

Bauxite and Alumina Moving Rapidly to Spot Pricing
MetalMiner - August 16, 2010

Following relatively quietly on the heels of the iron ore contract, many other commodities are moving from annual priced contracts to spot or monthly pricing. The speed at which this is happening is catching some by surprise but is not wholly unexpected or even unwelcome by buyers it seems. A recent Financial Times article suggested most European companies that depend on raw materials believe annual price contracts are no longer appropriate. Although the steel industry’s association Eurofer fought vigorously to preserve the annual benchmark, a survey published last week and reported in the FT found that 67% of managers taken from the survey group of 250 steelmakers, chemicals and specialty manufacturers believe that contracts with a fixed annual price are out of date, only 24% support benchmark prices. Nor did most managers believe that dynamic pricing would necessarily lead to higher pricing although they accepted it would add to volatility.

This view may be why a change to the bauxite and alumina pricing mechanisms only recently announced by Alcoa and now by other members of the Alcoa Worldwide Alumina Alliance (AWAC) has been met with such equanimity. Possibly that and the fact John Dudas, head of BHP Aluminium has reportedly spent the last 18 months doing the rounds in the industry garnering support for a change. Marius Kloppers, head of parent BHP Billiton was an early advocate of more flexible iron ore pricing and has worked for the last five years to move a range of commodities the group produces onto dynamic prices usually tied to indexes.

According to The Australian newspaper, Alumina Ltd, number two to Alcoa in AWAC and the world’s biggest supplier of third party alumina, is progressively moving clients onto a pricing mechanism to be based on a new alumina index to be launched by Platts on August 16. The index will include a daily Australian FOB spot price and a North China alumina assessment. Apparently 20% of AWACS contracts roll over for renewal each year and the plan is to move these onto index pricing as they fall due.

Stepping back from the buyers complaints about miners strong arming them into agreements, they (the miners) don’t want buyers reneging on long term fixed price contracts if spot prices fall. Nor do they want to lose out because of spot prices consistently being at a premium to contract prices. It is fair to say the bauxite and alumina pricing mechanisms were created for the convenience of vertically integrated smelters not to reflect the underlying dynamics of the raw materials concerned. Miners argue for example that the spot price has generally (though not consistently) been above the contract price for several years, currently by about $45/ton. The objective though is not so much higher prices but prices that more fairly reflect the fundamentals of that product rather than the vagaries of a downstream product. With bauxite and alumina increasingly being purchased by new smelters in China and the Middle East that do not have captive raw material sources, an open market price becomes more viable and more relevant. It looks like alumina at least will become increasingly important for aluminum buyers to track as another fundamental price driver for the semi finished sheets, plates and bars they buy. –Stuart Burns

Rio Tinto, Japan's Mitsui to jointly explore for bauxite in Laos
Platts - 16Aug2010
Anglo-Australian miner Rio Tinto and Japanese trading house Mitsui have set up a joint venture company, Lao Sanxai Minerals, to explore for bauxite in Laos, Mitsui said Friday, when it opened the JV office at Vientiane. The JV, owned 70% by Rio Tinto and 30% by Mitsui, will explore the possibility of mining bauxite in a 484 square km tenement between the Sanxai and Dakcheung areas in the southern part of Laos, the company added.

Rio Tinto and Mitsui received a five-year exploration license from the Laos government in December 2008 and the JV was established in April 2010.

A Japanese company source involved in alumina projects said: "There are risks, which could be stemming from political conditions or associated with the mine itself, etc. The benefit of Rio Tinto working with Mitsui is that

they have gained a partner willing to share the 30% risk."

Rio Tinto, which operates one of the world's largest bauxite mines in Weipa, Australia, will lead the exploration activities.

Mitsui has also said that the JV will look at alumina production if there is a proven bauxite deposit.

"Most bauxite producing countries are interested in adding value to mineral products, and are eyeing alumina production ... when they issue bauxite mining related licenses," said the Japanese company source. "Only

resources majors like Rio Tinto and large companies with expansive investment capabilities, are able to take part in bauxite projects," the source added.

A Mitsui spokeswoman said preliminary exploration activities, which involved surveys on foot, were launched in February before the establishment of the JV. Collection of mineral samples will start in November. The overall

exploration costs are estimated to be around $8 million.

The Japanese company source also pointed out that the mining fees in Laos was very low. "Mining related license fee in Laos is very low, less than $120,000 per year, and it should not be difficult to renew after the current license expires in 2013," the source said.

If the tenements have sufficient bauxite to produce over 2 million mt/year of alumina, the project is likely to advance into production, said a second Japanese source involved in alumina projects.

Around 8 million mt of bauxite is said to be required for 2 million mt of alumina.

Laos is known to have rich bauxite deposits but they have yet to be explored.

A joint venture between Australian exploration company Ord River Resources and China Nonferrous Metals International Mining launched a feasibility study for a bauxite project at the Polaven Plateau in southern

Laos in March, eyeing 20 million mt/year of bauxite production for 5-7 million mt/year of alumina.

--Mayumi Watanabe,

Novelis sees strong demand for flat rolled aluminum products
SteelGuru - 16 Aug 2010
Reuters reported that US aluminum producer Novelis Inc sees current strong demand for flat rolled aluminum products continuing into its fiscal Q2 and beyond and that its own shipments are limited by its capacity.
The company, based in Atlanta but acquired by Hindalco Industries in 2007 after a spin off from Alcan Inc, projected 34% demand growth in the flat rolled aluminum segment over the next 5 years.
Novelis executives spoke to analysts after reporting 15% increase in shipments to 746,000 tonnes, 29% gain in net sales to USD 2.5 billion and net income of USD 50 million for its fiscal 2011 Q1 ended June 30th 2010.
Mr Philip Martens president & CEO of said that "We saw stronger than expected demand in all four regions. As a result of the increased volume globally we recorded record results."
(Sourced from Reuters)

Smelter moves to reduce emissions
ABC Online - 16-Aug-2010
A central Queensland aluminium smelter has acknowledged it needs to substantially reduce its emissions to meet tough new environmental guidelines.
Boyne Smelters Ltd (BSL) in Gladstone has been told it needs to reduce fluoride emissions by 20 per cent and particulate emissions by 30 per cent to meet new licensing requirements by the Department of Environment and Resource Management (DERM).
The company will also need to develop a new process for measuring its hydrocarbon emissions.
BSL general manager Guy Fortin says the company is working hard to meet DERMs new requirements.
He says BSL has publicly committed to making improvements across the operation and says work on reducing emissions has already begun.
Mr Fortin says there have already been some noticeable improvements.

Chalco mulls alumina price hike on spot market rise
SteelGuru - Sunday, 15 Aug 2010Xinhua reported that Aluminum Corporation of China Limited is likely to mull alumina price hike on spot market rise.
The current quoted price of spot alumina is approaching CNY 2,800 per tonne while Chalco's alumina offer is only CNY 2,650 per tonne. China Aluminum International Trading Company Limited is planning to raise the price to CNY 2,750 per tonne.
China's alumina imports in January to July period accumulated to 2. 62 million tonnes down 20.4 YoY while the alumina import in.
According to the latest statistics from the General Administration of Customs, July almost doubled from June rising from 140,000 tonnes to 270,000 tonnes.
Mr Shan Guibin Aluminum Industry Analyst with Aladdin Consulting said that the spot alumina supply is likely to overtake that in August for more than 100,000 tonnes and the estimated output of electrolytic aluminum will approach 400,000 tonnes in September if the aluminum price goes smoothly this month.
Mr Shan said that there's room for the alumina price to go up, given the surging demand is not fully satisfied by the newly added alumina supply. However, the immediate price hike from alumina plants may result in fluctuations in alumina price.
(Sourced from Xinhua)

How to utilise all that power in Sarawak?
Malaysia Star - Leng Kuen - 13Aug 2010
There have been news reports that say Sarawak Energy is willing to pay 8 sen per kWh, while the
aluminium smelters are only willing to pay 4 US cents per ...

Ormet prepares for alumina negotiations, decision on Mead looms
Platts - 13Aug 2010
Michael Tanchuk, president and CEO of US aluminum producer Ormet Corp., said Friday the Ohio-based company has worked hard to "dramatically" reduce its cost structure. Now, it looks to cut costs further bynegotiating a new alumina supply agreement and, possibly, buying a long-idled carbon anode plant in Washington state.
In a late Thursday interview with Platts, Tanchuk said Ormet -- owner and operator of a 260,000 mt/year smelter in Hannibal, Ohio -- is preparing to enter into negotiations to purchase alumina for 2011. Ormet began buying alumina following a contractual dispute last year with Swiss supplier and producer Glencore International, with whom Ormet had a tolling arrangement. As a result, Ormet's recently announced second-quarter earnings were affected by a $56.3 million increase in alumina costs.
"We did one-year contracts for alumina this year," Tanchuk said. "So, we'll start negotiating for next year. We'll try to negotiate some fixed-price numbers." The company sources all of its alumina "from the Atlantic basin," he said without elaborating.
The 160,000 mt of anodes Ormet uses annually come from China. To address volatility in prices, Ormet earlier this year reached a memorandum of understanding with CDC, a St. Louis, Missouri, demolition and recovery firm, to acquire the long-shuttered Mead plant. For the past several months, Ormet has been performing due diligence, but a final decision is looming.
According to Tanchuk, a final purchase decision must be made by August 26. Part of the reason for Ormet's lower costs was its decision last year to idle two of Hannibal's six potlines. There has been speculation, including among United Steelworkers officials, the two idled potlines will be restarted.
Not yet, Tanchuk said, though that is the long-term goal. "The lines are prepared for restart," he said. "It wouldn't take us long to energize the lines, but the market has to be there for us." Restart conditions are not expected to be optimal "in the short term, as in the next few months," at least, most likely, through the end of this year.
Ormet's metal is pre-priced for the balance of 2010. "It's too early to pre-price 2011," he said. Looking ahead, Tanchuk sees "some recovery in pricing," but also "some volatility in pricing. I think I've never seen the application side [of the aluminum market] growing so much, in all parts of life. I see some sound demand numbers going forward."
Ormet posted a profit of $5 million in the second quarter, up from $4.3 million a year ago, though net sales from continuing operations fell slightly.
The company said net income for the first six months of 2010 totaled $5.2 million compared with $13.9 million in the comparable period of 2009. This year's results reflected one-time charges associated with Ormet's March 2, 2010, refinancing of $5 million and non-repeatable other income of $3.2 million related to a legal dispute settlement.
According to the company, net sales from continuing operations for the three months ended June 30, 2010, were $108.3 million versus $116.1 milliona year earlier. The decrease was primarily attributed by Ormet to a reduction in operations in the 2010 period, which was partially offset by higher average realized selling prices of about $498/mt for the 2010 period compared with the 2009 period and the impact of going from a toll-based revenue stream to selling aluminum in 2010.
Sales for the latest period benefited from the pre-pricing built into the tolling agreement which, when inputing a price for alumina, was priced
significantly above the price of aluminum sold in Q2 2010, the company said.
Ormet added its gross quarterly profit was $14.1 million compared to a gross profit of $16.7 million for the same period last year.

Norsk Hydro: force majeure for Qatalum deliveries
Reuters Africa - Aug 12, 2010
OSLO, Aug 12 (Reuters) - Norwegian aluminium producer Norsk Hydro (NHY.OL: Quote) said on Thursday it had declared force majeure for aluminium deliveries from its Qatalum smelter in Qatar after a power failure delayed the plant's ramp-up schedule.
Declaring force majeure frees companies from contractual obligations due to events beyond their control.
"In certain markets affected by the Qatalum stoppage, we unfortunately have had to declare force majeure," Norsk Hydro spokesman Thomas Knutzen told Reuters.
Hydro said the force majeure would affect its clients mainly based in Asia, the Middle East and to some extent in the United States.
"The largest (impact) will be towards Asia," Knutzen said, adding that the notice was issued on Wednesday.
Qatalum, a 50/50 venture between Qatar Petroleum and the Norwegian aluminium firm, had a sudden shutdown of production early on Monday due to a power outage. Some analysts said the force majeure notice was unsurprising given that the power outage caused a significant drop in temperature in the plant's reduction cells.
The company says full capacity will not be reached this year as had been expected.
"The declaration of force majeure is really just formalising the earlier news that production will be less," said Stephen Briggs, an analyst at BNP Paribas.
Qatalum, with a design capacity of 585,000 tonnes of primary aluminium, was running at some 60 percent of capacity prior to the outage, the Hydro spokesman said.
(Additional reporting by Karen Norton in London; Editing by Jane Baird)

Garmco made the right decision to leave aluminium mill scheme
MEED (subscription) - Aug 12, 2010
The move to exit the aluminium rolling mill scheme in Sohar reflects the current economic climate
The metals park planned around Sohar Aluminium’s smelter in Oman suffered another setback this week as Bahrain’s Gulf Aluminium Rolling Mill Company (Garmco) pulled out of a proposed $350m rolling mill.
Garmco were supposed to provide the technical expertise at the 200,000 tonnes a year tonnes-a-year (t/y) facility, but has now decided to expand operations at its plant in Bahrain.
The move by Garmco was also prompted by the fact that two rolling mills are being planned in Saudi Arabia and the UAE that will have a joint capacity of 960,000-t/y.
Where this leaves Sohar is another question. The smelter was to be the centrepiece of Oman’s industrial diversification plans. In March, there was even talk of a phase two at the smelter that would have doubled capacity.
Now it is not clear whether the rolling mill project will still go ahead as the UAE’s Abu Dhabi Water & Electricity Authority (Adwea) and Oman’s Takamul Investments have not commented on their plans.
Whatever happens, the project will be delayed by a number of months as another partner is sought. Such a delay could prove deadly if the Saudi Arabian and UAE rolling mills come on stream earlier.
Garmco’s decision may have surprised and upset its partners, but in the current climate and with two world-scale plants on the horizon the decision is the right one for the firm.

Nippon Light Metal to boost aluminum output in China
SteelGuru - 12 Aug 2010
Nippon Light Metal Company will boost aluminum product output in China as demand from the world’s largest consumer may grow 16% annually in the next 5 years.
Mr Takashi Ishiyama president of Nippon said that the fifth largest Japanese maker of rolled aluminum products plans to add at least 2 production facilities in China within 3 years on demand growth.
Aluminum in London is little changed this year, curbed by concern that the recovery in advanced economies may stall as Europe’s sovereign-debt crisis spurred governments to narrow fiscal deficits and cut stimulus spending. Nippon Light Metal raised its earnings forecast for the year to March 31 and expects growth in China and other Asian markets to offset any slowdown in the U.S., European and Japanese economies.
Mr Tadao Hosoo an economist at Mitsubishi UFJ Research & Consulting Company said that “Aluminum demand in China is expected to grow as automakers will increase the use of the metal to reduce vehicle weight for fuel efficiency. China’s per capita consumption of the metal is still very low compared with other countries, which means the nation has large potential for demand growth.”(Sourced from Bloomberg)

Qatalum to Restart Aluminum Production - 12 Aug 2010
After a power failure cut electricity supplies to the reduction cells at the Qatalum aluminium plant on Monday, all available resources have been in place to limit the consequences of the power outage.
Attempts to resume production continued late on Monday and early on Tuesday, but proved impossible as the cooling process had already solidified the liquid electrolyte. The incident caused no injuries.
“Safety has had top priority in all considerations during this critical situation in Qatar. I’m pleased that everyone is safe and no one is hurt,” Aasheim says.
Qatalum is in the middle of the ramp-up towards full output, and produced at around 60 percent of full capacity at the time of the incident. Hydro is working to determine how long it will take before the plant will reach full capacity.
Aasheim says Hydro considers the situation very serious.
”We have to get to the bottom of this to determine what caused the power outage to ensure that it doesn’t happen again,” she says. Qatalum has established an investigatory commission of representatives from Qatar Petroleum and Hydro.

Alcan begins its modernization - Aug 10, 2010
Rio Tinto Alcan (RTA) modernization is underway with the closure of potline seven August 5 and the upcoming closure of potline eight later this month.
The potlines are where the first phase of construction of the Kitimat Modernization Project (KMP) will begin.
“It’s extremely positive news today,” Michel Lamarre, project director for the RTA KMP said in a media conference call August 5, adding that “it means additional funds for KMP”.
“It means progressing our construction that we have already started, and progressing further. It means really getting this site ready for the full construction of the KMP,” he said.
Vice-President, of Operations and Strategic Projects Paul Henning added, “KMP has always needed the real estate that line seven and eight sit on right now, so we knew it had to go.”
The $2.4 billion KMP will replace the existing potlines which use the Söderberg smelting process to replace them with Aluminium Pechiney AP35 technology potlines.
RTA gained the technology when Alcan acquired the Pechiney SA aluminium conglomerate of France in 2003.
Besides producing purer aluminum, the AP35 technology also allows for capture and scrubbing of toxic emissions
AP35 technology will also allow RTA to reduce it’s greenhouse gas emissions.
To read the entire article, click on the blue title above

Shift to spot pricing to boost Alumina
Sydney Morning Herald - August 11, 2010
ALUMINA has predicted major benefits will flow from the industry's push for alumina to be traded on global markets on a spot price/index-related basis rather than it being linked to aluminium metal prices.
Alumina - a 40 per cent partner in the Alcoa-managed AWAC global alumina joint venture - has predicted that the wholesale shift away from the aluminium price link could be complete in five years. A similar shift is under way in iron ore markets.
Spot pricing for alumina (it is smelted into aluminium metal) is $US40 ($44) to $US50 a tonne higher than long-term alumina contracts. If that was to apply to all AWAC's expected 15.6 million tonnes of alumina output for this year, the additional revenue would total $US780 million. But while the move to full index pricing takes up to five years, existing long-term contracts are being washed out at a rate of 20 per cent a year.

Fault found in 2009 blast that killed St. Anna firefighter
Herald Times Reporter - Duke Behnke - August 11, 2010
The NIOSH report speculates that a thermite reaction had ignited the
aluminum shavings and that the addition of water and foam generated hydrogen gas, ...

Norsk Hydro's Qatar smelter hit by power outage
Reuters Africa - 10-Aug-2010
OSLO, Aug 10 (Reuters) - Norsk Hydro (NHY.OL: Quote) said on Tuesday the Qatalum smelter, a 50/50 joint venture between Qatar Petroleum and the Norwegian aluminium company, had suffered a power failure that would delay its ramp-up schedule.
"Qatalum will not be in full production in 2010. It's too early to tell when we will achieve that, but the delay is for months, not years," Hydro spokeswoman Inger Sethov told Reuters.
Qatalum, with a design capacity of 585,000 tonnes of primary aluminium, suffered a sudden shutdown of production, due to a power outage on Monday morning, Hydro said.
Shares in Norsk Hydro fell 4.1 percent at 0746 GMT, against a 1.2 percent drop on Oslo's benchmark index .
"Power was out for almost five hours, leading to a significant drop in temperature in the reduction cells and making it impossible to resume metal production," Hydro said in a statement.
The failure affected both the connection to Qatar's national power grid and Qatalum's own power plant, it said, adding it would investigate the cause of the failure in co-operation with local authorities.
"We had reached 60 percent of the total 585,000 tonnes capacity," Sethov said.
The facility has 704 production cells, of which 444 were in production and must be restarted. The remaining 260 cells, which had not been put in production, will be phased in as planned by the end of 2010, the company said.
Analyst Eivind Bergkaasa at Arctic Securities said the failure was "a very serious incident in the middle of a ramp-up phase."
This will have a negative impact on earnings estimates for 2011, but it's too early to say how big," Bergkaasa said.
However, Hans Erik Jacobsen, analyst at First Securities, said he thought the Hydro stock had overreacted to the news.
"Although it's too early to say anything about the economic consequences, it will not be significant in a Hydro context," Jacobsen said. (Reporting by Oslo newsroom; editing by James Jukwey)

Kaiser Aluminum Corporation Acquires Nichols Wire Facility, Florence, Alabama
MarketWatch (press release) -Aug 9, 2010
FOOTHILL RANCH, Calif.,(GlobeNewswire via COMTEX) -- Kaiser Aluminum Corporation today announced it has completed the acquisition of the Nichols Wire facility in Florence, Alabama which manufactures bare mechanical alloy wire products, nails and aluminum rod for aerospace, general engineering, and automotive applications. The facility, which employs approximately 100 personnel, will be integrated into Kaiser Aluminum's Fabricated Products business segment. The business typically generates annual value added revenue, which represents net sales less the hedged cost of alloyed metal, of approximately $15 million at profitability levels comparable to the existing Fabricated Products portfolio.
"The Nichols Wire business is an excellent strategic fit for Kaiser Aluminum, expanding our offering of small diameter rod, bar and wire products to our core markets and end-use applications," said Jack A. Hockema, President, Chief Executive Officer and Chairman. "The Florence facility, a long-term customer to our Newark, Ohio facility and supplier to our Jackson, Tennessee facility, provides a natural complement to our existing operations. We are pleased to welcome the Nichols' employees as new members of the Kaiser team and look forward to increased potential as the business is integrated into Kaiser Aluminum," concluded Mr. Hockema

Australia's Alumina Sees Balanced Alumina Market
CNBC - By Reuters - 9 Aug 2010
Australia's Alumina sees supply and demand for alumina in balance for the rest of 2010, it said on Tuesday, after reporting a return to the black in the first half as alumina prices and demand recovered.
Alumina's shares rose 1.8 percent in a weaker market as its dividend beat forecasts and it flagged that its Brazilian alumina refinery was on track to reach full capacity by the end of this year after suffering problems in the first half.
It said alumina demand in 2010 was expected to grow by 12 percent, a slightly higher forecast than earlier in the year.
"There is, however, a likelihood of some volatility in pricing as China manages its supply and demand position," the company said in its market outlook.
It also reassured investors on cost controls, saying the average cash cost of alumina production fell $4 per ton from the second half of 2009, excluding its Brazilian operation.
Alumina, a 40 percent partner in the Alcoa World Alumina and Chemicals joint venture with Alcoa [AA 11.66 0.07 (+0.6%) ], reported underlying earnings after tax of $22 million for the six months to June 30, up from an underlying loss of $10 million a year ago.
The result was well below an average forecast of $39 million from four major brokers, but its dividend beat the average dividend forecast of 1.5 cents
For the full year, analysts are expecting underlying earnings after tax of A$134.6 million ($123.4 million), according to Thomson Reuters I/B/E/S, rebounding from last year's underlying loss of A$2.2 million.
Alumina expects to produce between 15.3 million and 15.6 million tons of alumina in calendar 2010, down from an earlier forecast of 15.8 million tons.
It said the market was moving away from tying alumina prices to aluminum, with a spot market index likely to be announced, which would better reflect bauxite and alumina costs and speed up a move toward spot pricing of alumina.
Alumina's shares last traded up 1.8 percent at A$1.67, while the broader market was down 0.3 percent.

Government to resurrect VALCO - 9 Aug 2010
Government is planning to revive the Volta Aluminum Company (VALCO) about the same time that the country is expected to produce oil in commercial quantities
Presenting its report to the Minster of Energy recently, the committee set up by Government to examine the probability of restoring VALCO, said Ghana’s power generation current level of 2000 Megawatts (Mw) could be managed with the resuscitation of VALCO.
In spite of the current unsatisfactory power supply in the country, Government is still keen on resurrecting the company.
Ghana expects to move onto half power generation somewhere around 5000Mw by 2015.
But Government believes that the production of crude oil in commercial quantities could prevent any energy mess-up in future.
VALCO will operate on two of its potlines, BUSINESS GUIDE has learnt.
With the activation of the crude oil and gas production commercially, a number of power project are expected to spring up and these could culminate in the significant increase in power supply soon, Government emphasizes.
VALCO, one of Africa’s largest smelters, was shut down two years ago following power supply constraints.
It was established by KAISER Aluminum (USA) and the Government of Ghana to produce aluminum products for processing about 42 years ago but Government later acquired 90 percent shares under a joint venture agreement with RUSAL, a Russian company.
Though stakeholders in the company have held discussions consequently to plot the technical details of bringing the company on-stream, industry pundits have said the current tariff regime poses a threat to the survival of the company.
But Government sources contacted by the Business Guide maintained that the oil and gas activity would ensure the development of renewable energy in Ghana.
The sources also hinted that electricity from oil and wind could be generated to achieve about 10 percent of renewable energy by 2020.

Vimetco's Romanian subsidiary, Alro, signs refinancing loan with EBRD Business News - 09.08.2010 Michael Roberts
Amsterdam, 6 August 2010 - Vimetco NV (LSE: VICO), the global producer of primary and processed aluminium products, today announces that its Romanian subsidiary, Alro SA , (BSE: ALR), the biggest aluminium producer from Central and Eastern Europe, signed a syndicated loan with the European Bank for Reconstruction and Development (EBRD) that refinances most of the company's existent debt. The EBRD will retain $75 million on its account, with $105 million to be syndicated to commercial banks.
"The EBRD facility offers Alro a good basis for continuing its development strategy by further consolidating its financing structure", said Marian Nastase, Vice-President of the Board at Alro. "We are pleased with the outcome of the negotiations, as it recognises the soundness of our business, the potential for growth and the solidity of our programme for overcoming the effects of the international crisis. We are committed to pursuing our long term strategy of vertical integration and focusing on higher added value products."
Alro has implemented a strong programme that helps the company consolidate its position on the international aluminium market. It has secured the raw materials supply, reopened its alumina refinery in Tulcea and achieved a good cost structure by renegotiating supply contracts and improving production processes. The aluminium producer has, now, also finalised the loan restructuring process.
All these measures give Alro the sound basis for further pursuing its long-term development programme, focused on increasing the output of higher added value products and on improving the quality and product range at the plant in Slatina.
Alro registered a net profit of RON 50.5 million (USD 16.9 million), in Q1 2010, compared to USD 8.3 million registered in Q1 of 2009. The Company's turnover for Q1 2010 was RON 414 million (USD 139 million), compared to USD 118.7 million turnover in Q1 of last year.

China orders energy-wasting factories to close
BusinessWeek - August 8, 2010
BEIJING, China's government has ordered 2,087 steel and cement mills and other factories with poor energy efficiency to close as it struggles to cut waste and improve the country's battered environment.
The "backward" facilities produce steel, coke, aluminum, paper and other materials in areas throughout China and must close by late September, the Ministry of Industry and Information Technology announced Sunday.
Authorities said last week that a five-year plan to improve energy efficiency suffered a setback this year as China's economic rebound and a construction boom boosted demand for steel, cement and other energy-intensive products.
The plan calls for a 20 percent reduction in China's energy consumption per unit of economic output, or energy intensity, by the end of this year. The government said in March it had cut energy intensity 14.4 percent by the end of 2009 but it said last week that energy intensity crept up 0.09 percent in the first half of this year.
China overtook the United States last year as the world's biggest energy consumer, though with a larger population it still is well behind in consumption per person, according to the International Energy Agency.
China's surging energy demands have alarmed communist leaders, who worry about dependence on imported oil and gas from volatile regions such as the Gulf and pollution damage to scarce water supplies and forests in a densely populated country.
The country's growing presence in international energy markets has prompted complaints that it is pushing up crude prices and making supply deals with international pariahs such as Iran and Sudan.
China is the world's biggest steel producer and a major producer of other industrial materials as well. Its newest facilities are equipped with the latest technology but there are thousands of small, outdated paper mills and other businesses that local authorities are reluctant to close for the sake of jobs and tax revenue.
In the latest crackdown, the facilities would lose their certification to emit pollutants at the end of September, utilities would cut off power supplies and banks would be ordered to stop dealing with them, the ministry said.
Its list included 762 cement factories, 279 paper mills, 175 steel mills, 192 coking plants and an unspecified number of aluminum mills.
Provinces with the biggest numbers of affected facilities are Henan in central China and Shaanxi in the north, both traditional centers for heavy industry, with more than 200 each.
Beijing warned in March that China was lagging on efficiency due to its stimulus, which was based in part on pumping money into the economy through massive spending on building new highways and other public works. Banks also were ordered to lend more to support private sector construction.
That set back government efforts to shift the economy away from heavy manufacturing and toward more technology-based businesses and cleaner service industries.
The economy grew by 11.9 percent in the first quarter over a year earlier and by 10.3 percent in the second quarter. Stimulus spending and a flood of lending by state banks helped to boost growth from a low of 6.1 percent in the first quarter of 2009.
Chinese industries use 20 to 100 percent more energy per unit of output than their U.S., Japanese and other counterparts, according to the World Bank. Chinese officials say energy use is 3.4 times the world average.
Associated Press researcher Bonnie Cao contributed to this report.

Costs at Bakun Dam project set to balloon
Malaysia Star - Leng Kuen - 08-Aug-2010

Sarawak's current capacity of 1300MW already considerably exceeds peak demand of 900MW (excluding power to Press Metal Bhd's aluminium smelter, ...

Bauxite making a comeback - But recovery depends on efficient energy mix
Jamaica Gleaner - 08-Aug-2010
LONG REGARDED as a major pillar of the Jamaican economy, the bauxite and alumina sector fell from being the country's third-highest earner of foreign exchange to among the relatively minor placings, as the global economic recession took hold and demand for the metal used extensively in the automotive, household goods, canning and aircraft industries, among others, declined.
But, driven by a new wave of economic recovery in Europe, North America and Asia, there are strong signals that the industry is making a comeback, as seen in the performance of Noranda Bauxite's Jamaican operations, which had maintained production even as most companies on the island shut down, and UC Rusal, the Russian alumina giant, which last month announced the reopening of its Ewarton operations.
In both cases, increasing demand within their group of companies in their home markets is acting as a spur to ramp up production levels.
Economist and expert on the sector, Dennis Morrison, believes the prospects for recovery are very good, and he attributes this to the overall climate of growth and the rising price of bauxite and alumina on international metal exchanges.
"The global economy is recovering, and the rising prices for these metals reflects these forces. We can also see this in the improving profitability of companies like Alcoa," Morrison noted.
However, he made it clear that for Jamaica to see anything near a full recovery of the sector an entirely new approach was needed.
"For us to recover, our product will have to be competitively priced, and this will require us diversifying and modernising our plant and bringing new efficiencies to labour. Most critical will be finding a diversified energy mix that is cheaper than the current arrangement, which is unsustainable," Morrison said.
Serious problems
Producing alumina, the semi-refined ore which is converted to aluminium, is where the highest value-added earnings lie. But Jamaica's oil-fuelled kilns makes this largely uneconomic in the present climate.
According to Dr Carlton Davis, a former head of the Jamaica Bauxite Institute in a 2008 Gleaner article, "If we take the average price of producing a tonne of alumina at one of our more efficient plants in 2003 and 2008 (year-to-date), and multiply by our total annual production of about 4.2 million tonnes, the cost to the industry has moved from about US$150 million in 2003 to close to US$550 million (and rising) now. No more illustration is necessary to show that we have serious problems on our hands."
About 85 per cent of all the bauxite mined globally is used to produce alumina for refining into aluminum metal. Another 10 per cent produces alumina, which is used in chemical, abrasive, and refractory products. The remaining five per cent of bauxite is used to make abrasives, refractory materials, and aluminium compounds.
Morrison pointed out that as aluminium consumption collapsed last year, inventories rose to astronomical levels before producers carried out production cuts at smelters, and in turn, at alumina refineries world-wide. These inventories remain high, but the production cuts have halted the rapid build-up. This is one of the factors behind the 50 per cent increase in aluminium prices since February this year.

Ravenswood Aluminum Plant Changing Owners
WSAZ-TV - Aug 6, 2010
The Alcan Rolled Products plant in Ravenswood is changing owners.
Reporter: The Associated Press
RAVENSWOOD, W.Va. (AP) -- The Alcan Rolled Products plant in Ravenswood is changing owners.
Parent company Rio Tinto announced Thursday that it had received a binding offer from funds affiliated with a U.S. private equity firm and a sovereign wealth fund run by the French government to buy a 61 percent stake in Alcan Engineered Products, excluding the cable division.
Rio said terms of the offer were confidential.
The Ravenswood plant is part of Alcan Engineered Products.
The plant opened as Kaiser Aluminum in 1957 and has changed ownership several times.

Rio gets Alcan Engineered Prods offer
Trading Room - Aug 5 2010 AAP
MELBOURNE, Rio Tinto Ltd has received a binding offer for 61 per cent of its Alcan Engineered Products (AEP) division.
Although terms of the deal have not been disclosed, under the plan Rio would sell the stake to Apollo Global Management and France's sovereign wealth fund, the Fonds Strategique d'Investissement.
The move is in line with Rio Tinto's strategy of selling non-core parts of the company associated with its takeover of Alcan in 2007, to reduce debt.
Rio Tinto has completed divestments of over $US10.3 billion ($A11.23 billion) since the beginning of 2008.
As of June 30 this year, Rio Tinto's debt was about $US12 billion ($A13.08 billion).
Rio Tinto chief financial officer Guy Elliott said Rio Tinto would have exited all downstream businesses associated with Alcan, except Alcan Cable, when the transaction proceeds.
"We look forward to participating in the upside potential of AEP, both as a minority shareholder and key supplier to the business," Mr Elliott said.
AEP has around 10,000 employees in 26 countries and develops aluminium products for applications in industries including aerospace, mass transport, automotive, packaging, energy and building.
By Xavier La Canna

Rio Tinto Alcan continues to move forward towards the Kitimat Modernisation ...
Canada NewsWire (press release) - 04-Aug-2010
MONTREAL, Aug. 5 /CNW Telbec/ - Rio Tinto Alcan will increase the pace of construction activity and take another step forward with site preparation for the Kitimat Modernisation Project (KMP). The focus of this work will be on the construction of a new Reduction Services Building. Rio Tinto Alcan will also close and dismantle two of the current smelter's pot lines to prepare the location for future buildings.
The estimated cost of this work is US$50 million and is in addition to the ongoing activities resulting in the construction of an anode pallet storage facility and intensive road works required for the KMP.
"The modernisation of our Kitimat smelter remains a strategic priority for Rio Tinto Alcan," said Jacynthe Cote, chief executive of Rio Tinto Alcan. "With the increased activity, we are continuing to lay the groundwork for profitable growth through this important project that will transform our smelter into a top tier, low-cost, large-scale, and low-carbon asset."
"We are pleased that the work needed for the KMP continues to move forward," said Jean Simon, president of Primary Metal - North America for Rio Tinto Alcan. "This development demonstrates the company's commitment to the sustainable future of the aluminium industry in British Columbia and is a significant indication that we are moving closer to the realisation of the KMP."
The permanent closure of the two pot lines represents a production curtailment of about 67,000 tonnes per year and is an essential requirement of the KMP Business Plan. The proposed modernisation of the Kitimat aluminium smelter would increase its current production capacity to approximately 400,000 tonnes per year, an increase of more than 40 per cent. The modernised Kitimat smelter will use Rio Tinto Alcan's proprietary AP technology - the most cost-effective, energy-efficient, and environmentally friendly smelting technology available. This will allow the modernised plant to reduce overall total emissions, including greenhouse gas emissions by up to 40 per cent per year.
About Rio Tinto
Rio Tinto is a leading international mining group headquartered in the UK, combining Rio Tinto plc, a London and NYSE listed company, and Rio Tinto Limited, which is listed on the Australian Securities Exchange.
Rio Tinto's business is finding, mining, and processing mineral resources. Major products are aluminium, copper, diamonds, energy (coal and uranium), gold, industrial minerals (borax, titanium dioxide, salt, talc) and iron ore. Activities span the world but are strongly represented in Australia and North America with significant businesses in South America, Asia, Europe and southern Africa.

Aluminium Bahrain may demolish 2 potlines
SteelGuru - 05 Aug 2010
MEED reported that Aluminium Bahrain is considering plans to demolish the 2 original two potlines at its smelter as part of its USD 1 billion to USD 2 billion modernization and expansion plans.
The sources said that Alba is going to build the new line, but they will demolish the original two lines. Instead of running old lines with the old technology they are modernizing the smelter and making it more efficient as well as raising the capacity.
Alba has plans to increase production at the smelter from the current level of around 870,000 tonnes per year to 1.2 million tonne per year. However, the technology from the original potlines is now almost 40 years old and newer more efficient technology is available.
Mr Laurent Schmitt CEO of Alba said that "Alba has no comment about that for the time being. We are conducting studies and looking at different options so I have nothing to say at the moment."
(Sourced from MEED)

VALCO Set To Restart Operations
Peace FM Online - 04-Aug-2010
After a two year shut-down in its operations due to power supply constraints, Volta Aluminum Company (VALCO) is now ready to restart operations by the end of 2010.
The company is expected to begin production on at least two of its lines following the current and expected increase in electricity supply in the country.
With the discovery of gas and oil and the coming on board of a number of power projects, power supply is expected to increase significantly.
A committee set up to study the technical details of bringing the company back on stream has completed its feasibility studies and presented its report to the Minister of Energy.
“There has been a clear indication and commitment by the Minister that VALCO is reopened. Even though Ghana is interested in moving on to half power generation somewhere around 5000 by 2015, the 2000 we have now is enough for the country…” Spokesperson for the Energy Ministry Edward Bawa told Citi Business.
VALCO - one of the largest smelters in Africa with a workforce of over 500 was established by KAISER aluminum (USA) and the Ghana government to produce aluminum products for processing. Subsequently government acquired 90 percent shares under a joint venture agreement with RUSAL.

Alcan recruiting after it moves to full production - 04-Aug-2010
UP TO 30 jobs are being created at the Alcan aluminium smelter in Lynemouth, Northumberland, as the company looks to return to full production for the first time in almost two years.
With a revival in global demand for aluminium, and prices having risen 70% from their floor in 2008, Alcan’s parent company Rio Tinto has decided to return to full capacity at the country’s biggest aluminium smelter, which is also the county’s biggest private employer.
The plant had cut production by a third in late 2008 as the world economy headed into recession and vehicle producers – one of the major end users of Lynemouth stock – cut output by 50%. But the price of the metal has now risen from around US $1,300 per tonnes at the end of 2008 to US $2,200 per tonnes this year.
The rise has been described as “stellar” following a surge in demand from the automotive and other consumer sectors.
Wyn Jones OBE, managing director of Rio Tinto Alcan’s UK operations, said: “We expect to be back to full production by the end of the year.
“We have begun re-starting all the pots which were closed down. This process takes a lot longer than closing them down and we expect to be operating at full capacity once more by the end of the year.
“This will be the first time in two years we have been operating at full capacity. We had to lay off staff when the production was cut but we have begun recruiting again."

China's Kaiman Aluminium starts up new 350000 mt/year smelter
Platts - Aug 4, 2010
99.7% grade primary aluminium smelter in August, a company source said Wednesday.
"We just started up the plant and are testing the machinery now," the source said. "We are only operating partially at the moment and have not set any specific deadlines for when we can fully ramp up capacity or how much we aim to produce this year."
The new smelter marks the company's debut into aluminium metal production. It produced only alumina earlier.
"This is our first smelter so we will take our time to ensure everything works out smoothly," the source said.
Kaiman has the capacity to produce up to 1.8 million mt/year of alumina, of which about 1.2 million mt are smelter grade, and the rest alumina trihydrate.
"We will be able to feed our new smelter operations with our own alumina when in full production," the source said.
Yuencheng Mok,

RusHydro and RusAl ordered to launch Boguchansk hydroelectric power plant
SteelGuru - 04 Aug 2010
RIA Novosti reported that Mr Vladimir Putin Russian Prime Minister ordered Russia largest hydro electric power producer RusHydro and the world top aluminum company RusAl to get the Boguchansk hydropower plant in Siberia into operation on time.
Mr Putin said the Russian government had recently approved a loan of up to RUB 28.1 billion through state owned development bank Vnesheconombank for completion of the Boguchansk power plant.
He said that "I am requesting the investors in this project, RusHydro and RusAl to launch the plant on schedule, in particular to start operation of the first three units in 2011 and put the entire plant into operation in 2013."
Mr Putin also said the companies must work out an efficient project management scheme and fully comply with their commitments for construction of the hydropower plant and an aluminum smelter.
Mr Igor Sechin Deputy Prime Minister earlier said the construction of the Boguchansk plant was considerably behind schedule, with concrete placement and assembly work less than 90 percent finished in 2010.
Mr Evgeny Dod CEO of RusHydro said the company would be able to resolve all organizational and financial issues with RusAl.
Construction started at Boguchansk in 1980. The project is key to the economic development of the Krasnoyarsk Region.
(Sourced from RIA Novosti)

Alcan Cable closing plant in Roseburg, Ore., in consolidation move - August 03, 2010
ATLANTA - Alcan Cable says its manufacturing plant in Roseburg, Ore., will close by the end of this year and production will be consolidated at other North American locations.
The move will affect 77 employees at the Oregon plant.
The company, a subsidiary of Rio Tinto PLC (NYSE:RTP), said Tuesday the closure would address the weak current and projected market conditions for aluminum cable. The connector product is used to link homes to the electric grid and for transmission lines, underground cables and other electrical products for residential, commercial, utility and industrial markets.
"This decision is difficult, but has been made necessary by the prolonged poor market conditions and outlook in the market," said Jack Miller, president of Atlanta-based Alcan Cable. "Moving forward, Alcan Cable will focus on its North American production at its remaining cable facilities and continue to provide high quality cable products and service to our customers."
Bryan Tucker, a Montreal-based spokesman for Rio Tinto, said the decline in the U.S. housing market as well as stiffer competition in the industry made a streamlining move necessary.
The Roseburg plant, which began production in 1991 and makes insulated and bare cable, is one of seven Alcan Cable manufacturing operations.
There are also plants in Jonquiere and Shawinigan, Que., Sedalia, Mo., Williamsport, Pa., and Chatsworth, Calif., as well as one in China in Tianjin.
Alcan Cable said it has established a severance program and an on-site out-placement centre at Roseburg.

Argentina Colder Than Antarctica Spurs Record Power Imports, Shuts Plants
Bloomberg - 02-Aug-2010
Dow, Siderar and
aluminum maker Aluar Aluminio Argentino SAIC are among companies closing plants, cutting output or seeking alternative energy sources after ...

Electricity glut in Sarawak
Malaysia Star - August 3, 2010
Bakun & Murum will result in considerable oversupply by 2013 in absence of firm commitments
PETALING JAYA: There is likely to be a major power glut in Sarawak with the coming on stream of two major hydro power projects by the end of 2013 and the lack of firm commitments from investors to take the power up, industry players said.
There will be 2,400MW of capacity from the RM7.3bil Bakun Dam by the end of 2012 while a further 944MW will be added from the RM3.5bil Murum Dam by the end of 2013.
About 300MW of hydropower from the first turbine at the RM7.3bil Bakun Dam is expected to be generated by the middle of next year and 600-900MW by end of next year; by 2012, all eight turbines are expected to be in place.
Murum Dam is currently 27% completed with the RM3.5bil job awarded to China’s Three Gorges Project Corp and sub-contracted to Sinohydro Corp Ltd.
Total installed capacity from these two dams is 3,344MW but firm power that is available for use at anytime will be about 2,420MW (1,770MW from Bakun and 650MW from Murum).
Sarawak’s current capacity of 1,300MW already considerably exceeds peak demand of 900MW (excluding power to Press Metal’s aluminium smelter, which will initially take up 90MW).
Apart from organic demand, industries from the Sarawak Corridor of Renewable Energy (SCORE) are projected to start taking about 500MW in 2012 and close to 2,000MW by 2014, according to projections by Sarawak Energy Bhd, the state electricity utility.
Sarawak Energy owns Murum Dam while Bakun Dam is owned by Sarawak Hidro Sdn Bhd which is in turn wholly-owned by the Government’s Minister of Finance Inc.
“By 2015, Sarawak expects a commitment of 2,590MW which exceeds the combined firm capacity of Bakun and Murum (2,420MW),” an industry source said.
However, industry players are not convinced that commitments will materialise to increase the power demand by 2,600 MW a year, nearly three times Sarawak’s current demand.
Sarawak Hidro still does not have an agreement to sell its electricity although the dam is going to be flooded soon. Sarawak Energy can’t make a firm decision to buy from Sarawak Hidro because it in turn does not have firm commitments by anyone to purchase the power. There is no agreement on tariffs as yet.
There are said to be 25 negotiations going on with 12 potential purchasers at an advanced stage of working out the details on the term sheet, sources indicated.
“It is a Catch 22 situation,” said an industry source. “Investors want to know how Sarawak Energy is strategising its position in relation to the Bakun Dam project. Sarawak Energy needs to get the financial commitment from Sarawak Hidro in terms of their financial models (upon which the tariffs will be calculated).”
In the interim, Sarawak Energy is likely to be take power from Bakun to maintain its gas turbines and coal fired plants. “Sarawak Energy needs to do maintenance,” said the industry source. “It will probably shut down these plants and draw down the power from Bakun.”
There has been talk that Sarawak Energy is eyeing the purchase of the mammoth Bakun project at an indicative price of RM6bil (minus compensation costs for a previously botched job as well as resettlement costs) compared with the asking price of RM8bil.
The issue of tariffs is also another thorny matter with Sarawak Energy looking at just below 8 sen per KwH while their heavy offtakers – the aluminium smelters – are only talking of slightly less than four US cents (13.6 sen on an exchange rate of RM3.40 to the dollar) per KwH.
At Sarawak Hidro, various costs are imputed, making the tariff range acceptable at 10 to 15 sen per KwH.
Current talks with two potential aluminium smelters are focused on the commercial terms in the initial power purchase agreements.
These are: ·The smelter project by Cahya Mata Sarawak Bhd (CMS) and Australia-based Rio Tinto Alcan, which requires between 900MW and 1,200MW for an initial annual capacity of up to 720,000 tonnes; and Smelter Asia with an initial annual capacity of 330,000 tonnes requiring 600MW. Smelter Asia is jointly owned by Tan Sri Syed Mokhtar Al-Bukhary’s vehicle GIIG Holdings Sdn Bhd and China’s Aluminium Corp.
At the same time, there are ongoing talks with smaller users of 150-200MW such those in poly silicon, manganese and ferro silicon industries. They do not use as much power as smelters and cost of power is not a significant part of their overall costs.
The power glut does not stop at Bakun and Murum. Plans to build another five smaller dams are likely to commence later.
A 245MW dam can be built in Limbang if Sarawak Energy succeeds in pushing the Sarawak grid from Miri to Limbang, something which will involve passing through Brunei.
“Sarawak Energy hopes to get strong commitment from Brunei before the end of this month for up to 400MW by 2015; the first phase of offtake is for 100MW in 2012,” said the industry source.
The 100MW dam at Lawas may be built in one or two years as Sarawak Energy is expected to engage with Sabah Electricity Sdn Bhd and Tenaga Nasional Bhd on supply of power to the state, pending their decision to proceed with the 300MW Liwagu hydro dam in Sabah.

Estreito hydro project in Brazil to begin test operations in December
HydroWorld - 02-Aug-2010
BRASILIA, Brazil 8/2/10 (PennWell) -- Brazil's 1,087-MW Estreito hydro plant will begin test operations in December, a spokesperson for the consortium building the hydropower project told wire services.
Commercial operations for the hydropower project would begin in January or February 2011, project officials told Business News Americas.
Estreito is being built on the Tocantins River on the border between Tocantins and Maranhao states. The project sold power in the October 2007 auction for delivery in 2012. The project is expected to cost 3.6 billion reais (US$2 billion), the mines and energy ministry said previously.
Brazilian miner Vale, US aluminum producer Alcoa, construction firm Camargo Correa and European utility giant GDF Suez hold stakes in the project.
The hydro project is included in the Brazilian government's growth acceleration plan known as PAC.
In other news, Brazil's 210-MW Serra do Facao hydropower plant is projected to come online within three months, the president of project developer Serra do Facao Energia consortium told wire services.
The Serra do Facao hydro project initially was planned to come online in October 2010.
The plant is located in the Brazil's center-western state of Goias.