AluNews - January 2010

Berlusconi warns Alcoa over 2 smelter closures: report
MarketWatch - 31-Jan-2010
LONDON (MarketWatch) -- Silvio Berlusconi, the Italian Prime Minister, warned U.S. aluminum producer Alcoa Inc Friday that it risked damaging relations with the Italian government if it went ahead with its decision to shut down two smelters, the Financial Times reported.
In a letter to Klaus Kleinfield, Alcoa's chief executive, Berlusconi urged the US giant not to act on its decision to shut down two smelters by Feb. 6 and to await the outcome of Alcoa's appeals to the European Commission over electricity subsidies.
Shutting down the two plants in Sardinia and near Venice "could alter relations between the Italian government and the multinational," the newspaper said, citing Berlusconi.
Newspaper Web site: http://www.ft.com

Cabelum aluminum supply down by 70pct
SteelGuru - 29 January 2010
BNamericas reported that the aluminum supply at Venezuelan cable producer Cabelum has dropped some 70% because of 2 production lines that were shut down at aluminum reducer Alcasa and the 360 cells that were stopped at aluminum reducer Venalum.
A Cabelum official said that under normal conditions the company receives 1,800 tonnes per month of aluminum and now this has fallen to around 600 tonnes per month. The government's goal is to provide each transforming company with only the aluminum needed to operate at minimum capacity and by doing so avoid closures.
The official said that the situation, which has lowered production levels, is a result of the energy rationing plan that was implemented by Mr Hugo Chávez president of Venezuela.
In November Cabelum started the Phase II of an expansion project worth USD 11.6 million which includes the installation of drawn wire and cabling machinery that will increase production to 30,000 tonnes per year.
Meanwhile, the official said that with the increased production, the company could start exporting to markets like Chile, Brazil and Bolivia.
(Sourced from BNamericas.com)

Brazilian energy costs are not competitive for Al - Votorantim
Metalbulletin.com (subscription) -
São Paulo 29 January 2010 15:13
Energy prices in Brazil are “not competitive any more” for aluminium production, Votorantim chairman Carlos Ermírio de Moraes told Brazilian business newspaper Valor Econômico. The Brazilian Aluminium Assn (Abal), the Brazilian Assn of Major Power Consumers and Free Consumers (Abrace), Novelis and Votorantim have all told MB recently that power costs in Brazil are too high (MB Jan 25). Moraes reportedly raised the issue with Brazilian president Luiz Inácio..Copyright © Metal Bulletin Ltd. All rights reserved.
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Spanish smelters under threat too as Alcoa awaits energy ruling
Metalbulletin.com (subscription) - 28 January 2010
London 28 January 2010 10:53
The future of Alcoa’s three primary aluminium smelters in Spain, which have capacity of over 400,000 tpy, hangs in the balance as the US producer waits for the European Commission to rule on the validity of energy tariffs agreed with the government. Combined with the planned suspension of 194,000 tpy of smelting capacity in PortoVesme and Fusina in Italy, closure of the smelters, which have a combined capacity of 408,000 tpy, would mark the end of Alcoa’s primary smelting activities in Europe. Instead, the project in Saudi Arabia with Ma’aden would herald a new era of primary production for the US producer in the Middle East, where energy is cheaper. Alcoa may shut the San Ciprian, La Coruna and Aviles smelters in Spain if the commission does not rule in its favour on energy tariffs it agreed with the government in 2005, market participants said. “Keep an eye on Spain. It might follow soon after,”...

Alcoa to shut Italy aluminium plants by Feb 6.
Reuters -Thu Jan 28, 2010 6:03am
LONDON, Jan 28 (Reuters) - U.S. aluminium producer Alcoa Inc (AA.N) said it plans an orderly shutdown of its two Italian smelters by February 6, despite government efforts to find energy at a competitive price.
But the company committed earlier this week to restarting one of the plants if it can secure cheap power and conditions are conducive.
(Reporting by Karen Norton; editing by William Hardy

Investors urged to consider energy sector
The Trinidad Guardian - Thu Jan 28, 2010
The energy sector is stirring back to life and suppliers must begin their investment now to take advantage of new opportunities when the sector picks up speed in 2010, says Alutrint’s Chief Executive Officer, Philip Julien. He said Alutrint as well as several other energy and heavy industry companies were planning to pick up the pace of their production and construction activities in 2010 in anticipation of higher demand for products and commodities. Speaking at this year’s Energy Conference at the Hyatt Regency Hotel in Port of Spain on Tuesday, Julien said local suppliers and businesses would be well advised to invest now to position themselves to take up the new opportunities that will arise when the global economy begins to turnaround. “At Alutrint, our construction peak this year will see more than 1,600 workers employed on site over the course of this year. We have started making preparations in anticipation of us meeting the legal requirements of the court order."
He said the company would comply with all local laws and had been making a significant investment in training and recruitment for the new facility as well as investing in its corporate social responsibility programs to make a difference in the lives of citizens in communities close to where the smelter will be operating. “We are looking at recruiting as much of our staff from the La Brea area, and we have taken the commitment to train many of them to take up positions at our firm. “We believe this is an important way to improve the quality of life in the area as well as change the social dynamics of the communities in a positive way,” he saiid.
He said 450 persons had applied for their on-the-job-training programme. Of that figure 85 were chosen for the training programme and the top 65 will be hired as part of their permanent staff. “The training programme will include team building as well as a technical proficiency component depending on their speciality. “The recruits who are successful in joining our permanent staff will get an opportunity to carry their training even further when they embark on the foreign training component of the programme. “Trinidad and Tobago is very lucky to start an aluminium industry from the ground up—with a blank slate, and we must take advantage of this opportunity for research, to improve the percentage and value of local content, take advantage of opportunities for skills transfer as well as partner with training, planning and research organisations so we can get the most out of this new industry,” added Julien.

EU to probe power prices for Aluminium of Greece
Reuters UK -, Jan 27 (Reuters)
Europe's competition watchdog is investigating whether Greece's state-owned power utility illegally subsidised smelter Aluminium of Greece by selling it electricity below market prices.
The European Commission said on Wednesday that Public Power Corp (PPC) (DEHr.AT) might have undercharged by 17.4 million euros ($24.5 million) and it would investigate the case under European Union state aid rules.
The Commission said in a statement that it would also investigate allegations that state-owned Public Gas Corp paid the construction costs of a gas pipeline belonging to Aluminium of Greece, southeast Europe's biggest aluminium smelter.
It did not identify the complainants.
"We have to make sure that Aluminium of Greece did not receive an unfair economic advantage over its competitors but paid, as everybody else, the market price for the electricity and gas it bought," Competition Commissioner Neelie Kroes said.
The Commission has already investigated a number of complaints that the aluminium company received privileges before Greece joined the EU in 1981. It has taken a preliminary view that due to the timing, those privileges need not be repaid.
Aluminium of Greece is a unit of the Mytilineos Group (MYTr.AT), which aims to become PPC's biggest rival in the Greek electricity market.
PPC said last July it would seek arbitration to resolve a dispute with Aluminium of Greece, which has refused to accept a 10 percent increase in PPC's electricity prices, citing profitability concerns amid a slumping metals market. (Reporting by Pete Harrison, editing by Dale Hudson

Shares of Russian aluminum giant UC Rusal slide in Hong Kong trading debut
CanadianBusiness.com - 27-Jan-2010
HONG KONG (AP) - Shares of Russian aluminum giant UC Rusal tumbled in their first day of Hong Kong trade Wednesday following a $2.2 billion initial public offering clouded by concerns over the company's massive debts.
Rusal's shares were 8.2 percent lower from their IPO price of 10.80 Hong Kong dollars ($1.38) after falling more than 10 percent.
The company's tycoon owner, Oleg Deripaska, Russia's richest man before the financial crisis, called the lackluster performance "reasonable" given recent declines in global markets.
The IPO attracted criticism that Hong Kong regulators were undermining the Chinese territory's credibility as a financial hub by allowing a company struggling with nearly $15 billion in debt to list shares.
Hong Kong, eager to broaden its limited role as a center for Chinese IPOs by attracting more foreign companies, declined the listing before reversing course. However, regulators imposed a host of restrictions on the offering that barred retail investors.
Deripaska, who presented Hong Kong's stock exchange with an aluminum Russian doll, said more Russian companies would turn to Hong Kong to raise capital.
"Growth in Asia ... will also create benefit in Russia," he said.
The company plans to use proceeds to pay down its debts.

Yankuang's bauxite project in Australia approved by Australian authority
Trading Markets (press release) - Jan 25, 2010 (Xinhua via COMTEX) --
Jinan, Jan.15 (InfoChina)-The Foreign Investment Review Board (FIRB) of Australia has approved the setup of a joint alumina refinery by Yankuang Corporation and the Australian miner Bauxite Resources Ltd (BRL), said Yankuang Corporation on Monday.
The two sides signed agreement for the joint development and ownership of an alumina refinery in the southwest of Western Australia.
Under the agreement, Yankuang will contribute 75 percent of the costs of the proposed alumina refinery to earn a 50 percent interest in the profits. BRL will receive a 25 percent free carried interest and will fund a further 25 percent to bring its interest up to 50 percent.
The Yankuang Corporation, the parent company of Yanzhou Coal Mining (600188.SH; 01171.HK; YZC.NYSE), is a giant state-owned enterprise mainly engaged in the coal, coal-chemical, power and aluminum industries.
Earlier, Yanzhou Coal Mining acquired the Australian coal miner Felix Resources for 3.33 billion Australian dollars at the end of 2009.
The move of founding alumina refinery might be the start for Yankuang to build integrated business line in coal, power and aluminum overseas. (by Zhang Yuenan, zhangyuenan@xinhua.org)

DJ Consortium Eyes Building Cameroon Alumina Smelter -Official
Trading Markets (press release) - Jan 24, 2010
YAOUNDE, Cameroon, (Dow Jones Commodities News via Comtex) --
Cameroon Alumina Ltd., a new consortium with license to explore and exploit Cameroon bauxite, says it's working on a feasibility studied to build the country's biggest alumina smelter, a senior official of the group told Dow Jones.
Cameroon Alumina Ltd. is a joint venture of three companies: United Arab Emirates aluminum smelter, Dubai Aluminium Company Limited (Dubal), which holds a 45% share; Hindalco Industries Limited (500440.BY), which also holds 45%; and U.S.-based Hydromine Inc., owner of the remaining 10%.
"We've plans to build an aluminum refinery in Cameroon. This project will cost us $4 billion," Hydromine Inc. chairman and CEO Peter L. Briger told Dow Jones Friday.
"If we find the consistency of energy, we can produce about 500,000 tons yearly," Briger said, adding that their decision for the project came "after the government of Cameroon asked us; why not add value to the bauxite you'll be extracting?"
Cameroon Alumina Ltd., which has been exploring for bauxite in eastern and north-central Cameroon, has drilled 11,000 boreholes at its mining site. "Data from the extractions show that the quantity and quality of bauxite found on the site are very rich," the Hydromine executive said.
Bauxite reserves discovered in Cameroon's eastern, north-central and western regions are estimated around a billion tons, a 2009 report published by Cameroon showed.
Cameroon bauxite remains virtually unexploited, except by the state-run Societe Camerounaise d'Alumine, or Alucam.
Alucam produces 90,000 tons of aluminium yearly, and after merging with Rio Tinto Alcan, the consortium aims to more than triple the yearly aluminium output.
-By Emmanuel Tumanjong, contributing to Dow Jones Newswires; +237-9655-6261, +237-7773-1930; tnuel@yahoo.com

Dubai aluminum achieves 2009 target of 1 mil. tons
China Post - 24-Jan-2010
ABU DHABI -- Dubai Aluminium Co., the United Arab Emirates aluminum producer building the world's largest smelter, said it achieved its output target of 1 million metric tons of the metal last year.
Production was 1.01 million tons, making Dubal the “largest single-site aluminum producer of value-added products in the world,” Chief Executive Officer, Abdulla Kalban, said in an e- mailed statement today. “It was also achieved in the midst of the global economic recession, which forced many other primary aluminium producers into a partial close-down of production capacity.”
Dubal's smelter was producing at about 20 percent below full capacity after a power outage, Kalban said on Nov. 10. The company's smelting capacity has grown more than seven-fold since 1979, when it produced 135,000 tons a year, according to the statement.

Abu Dhabi carbon project to clean air, boost oil output
Zawya - Nadim Kawach - 23-Jan-2010
More than one million people in Abu Dhabi will bask in a much cleaner and healthier atmosphere when a major carbon clearing project in the emirate is commissioned within five years, the project manager said yesterday.
The venture, which could cost more than $1 billion (Dh3.67bn), is expected to remove in excess of five million tonnes of carbon dioxide (CO2) a year from the emirate's air and push them back where they came from underground.
By sending such immense CO2 quantities back into oil reservoirs deep underneath the emirate's desert, the emirate's main onshore oil producing company will be able to increase recovery rates from its hydrocarbon wells.
The Abu Dhabi Carbon Capture and Storage Project is the first major CO2 hunting in the world and will allow the country to sharply reduce its carbon emission rates, already among the world's highest relative to per capita.
"Abu Dhabi is a major oil and gas producer and is heavily reliant on these fossil energy sources to produce its electricity and operate its factories... hence it felt there is a need to reduce emissions," said Yves Rey, Senior Project Manager a the Carbon Management Unit.
"This is the first large project of its kind in the region and the whole world. It will contribute to largely reducing CO2 emission in the emirate as it will capture in excess of five million tonnes a year in the first phase," he told Emirates Business in an interview at the just-concluded World Future Energy Summit in Abu Dhabi.
Rey said the project, which has been initiated by the Abu Dhabi-based Masdar Initiative, has been in the design stages and that a contract for its construction could be awarded late this year. He could not elaborate on exact investments but said costs of such projects could exceed $1bn.
The project involves the construction of two carbon capture plants near the main power facilities in Taweela north of Abu Dhabi city and at the Emirates Aluminium Company (Emal) in Musaffah just at the eastern entrance of the capital.
"The construction of the plants will be completed in 2015 but there will be a second stage afterwards. The locations were selected because of the large rate of consumption of oil and gas at those sites," Rey said.
"Carbon and other gases will be captured at those sites. Those gas will be separated from CO2 and released into air as they are not harmful to the atmosphere. CO2 will then be kept in compressors, where water is separated and removed. Afterwards, CO2 will be transferred via a 500km high-pressure pipeline network and sent back into oil reservoirs underground.
For this reason, the project will have a dual effect: it will largely reduce CO2 emission in the atmosphere and at the same time help push crude oil out of the reservoir. This means it will enhance the oilfield's recovery rate."
Rey said the first stage of the project would involve only the emirate's onshore oilfields, most of which are run by the Abu Dhabi Company for Onshore Oil Operations (Adco), one of the largest oil firms in the world.
"This is a crucial project as the UAE has one of the highest per capita carbon emission rates in the world given its massive use of fossil fuels and its large hydrocarbon resources. It is the first such project in the Middle East and the world's first major carbon capture venture. Developed countries do not have such a project because it is an environmental rather than a commercial venture."
Abu Dhabi is the main oil producer in the UAE, pumping around 2.3 million barrels per day. It controls nearly 92 billion barrels of proven crude reserves and 6.5 trillion cubic metres of natural gas, accounting for nearly eight per cent and five per cent of the world's oil and gas wealth respectively.
According to the Abu Dhabi Department of Economic Development, the UAE's oil and gas consumption grew by as fast as eight per cent annually during 2000-2008, with gas demand soaring from around 31 billion cubic metres to 58 billion cubic metres. Oil consumption surged from around 255,000 bpd to 467,000 bpd.
By Nadim Kawach © Emirates Business 24/7 2010

Venezuela's power crisis grows as plant cuts capacity
Houston Chronicle - Jan. 23, 2010 By STEVE BODZIN Bloomberg News
Venezuela's biggest fossil-fueled power plant, is operating at less than a fifth of its designed capacity, exacerbating a power crisis that has shuttered businesses from aluminum plants to shopping malls.
The plant operated at 273 megawatts of power late last week, or at about 14 percent of its 2,000-megawatt capacity, according to a daily report from Venezuela's grid manager, the National Electric System Administration Center, known by its Spanish acronym CNG.
The plant hasn't produced at more than 26 percent of capacity in at least three months, according to the center.
Demand growing
Venezuela is suffering its most severe electricity crisis in six years because of growing demand and a drought that cut water levels in the hydro dams that provide 73 percent of the its power.
Guri Lake, the biggest reservoir, is at 52 percent of useful capacity, according to the CNG daily report.
“The plant needs a total overhaul, a cleanup or maybe a complete replacement with a more modern plant,” Miguel Lara, who headed Venezuela's power planning agency from 1999 to 2004, said in a telephone interview.
Venezuelan utility Cadafe, which ran Planta Centro until handing it over to state oil company Petroleos de Venezuela, said in 2003 it planned to spend $100 million to boost capacity to 1,600 megawatts from 900.
Two years later, Cadafe said the plant was operating at about 500 megawatts and it would spend $400 million to overhaul the plant. This year's federal budget allocated $3.2 million to the project.
“They didn't take the actions they planned,” Lara said. “If it rains they will delay the investments again.”
$8 billion invested
The government is investing in power plants other than Planta Centro and has brought 4,622 megawatts of new generation online since 2001, Energy Minister Rafael Ramirez told reporters in Caracas. “We invested $8 billion in the electricity sector,” he said.
Chavez's ally Ali Rodriguez visited Planta Centro twice last week as his first acts since being named electricity minister Jan. 15, the state-run Bolivarian News Agency reported. Rodriguez replaced Angel Rodriguez who was fired for power rationing problems.
Planta Centro's low output has utilities in Valencia, the country's manufacturing center, rationing electricity, the local newspaper El Carabobeno reported on Jan. 20. Customers are being blacked out for three hours at a time, the newspaper said.
The country's electrical system is at risk of a “collapse” by April and the government may have to extend power rationing, Patrick Esteruelas, a Latin America analyst at Eurasia Group in New York, told clients on Jan. 19.
Chavez halted production lines at state-run aluminum and steel companies in December to save electricity. Customers of Edelca, the utility that serves the country's heavy industries, used 20 percent of Venezuela's power in the first 11 months of last year, according to CNG's November monthly report.

Brazil's Vale to sell subsidiary's aluminum assets
People's Daily Online - 23-Jan-2010
Brazil's mining giant Vale, the largest iron ore producer in the world, Friday announced plans to sell the aluminum assets of one of its subsidiaries to a French company.
Its subsidiary Valesul Aluminio S.A. (Valesul) in Rio de Janeiro state has reached an agreement with Aluminio Nordeste S.A., a company of the French Metalis group, on the transaction, it said.
The assets included in the agreement are Valesul's anode plant, reduction plant, smelter, industrial services and administrative facilities and inventories, involving a total of 31.2 million U.S. dollars.
Valesul operated an aluminum smelter with a nominal capacity of 95,000 metric tons per year until March 2009. The company ceased its aluminum smelting operations in April for development in other fields.
Source: Xinhua

WINDALCO eyes reopening of Ewarton plant
Jamaica Observer - Garfield Meyers - January 22, 2010
MANDEVILLE, Manchester -- Even as it gets ready to implement a redundancy programme for all permanent staff by March 31, WINDALCO is contemplating the re-opening of its Ewarton alumina refinery in St Catherine.
The reopening, an authoritative source told the Observer yesterday, could be "possibly by the end of the year".
The source, with strong links to the bauxite/alumina sector, said representatives of the world's largest aluminium producer UC Rusal, which has majority ownership and control of WINDALCO, have been in the island since the start of the new year and had discussions with the Government on the Ewarton plant.
"There are positive signs that possibly by the end of the year the Ewarton plant will be re-opened," the source, who declined to be named, said.
The source stressed that any re-opening would be dependent on a "smaller staff" and "different terms" than had existed previously. The current workforce at Ewarton numbers 310, inclusive of agricultural and support staff.
All told, 762, permanent staff positions are to be made redundant at the WINDALCO (West Indies Alumina Company) locations, inclusive of Ewarton, the Kirkvine refinery and head office in Manchester, and its shipping port -- Port Esquivel in St Catherine.
WINDALCO's permanent staff have been operating on the basis of 40 per cent cut in salary and a reduction of hours to a three-day work-week since the suspension of mining and refining operations nine months ago because of the crash in the global metals market and the worst economic recession in decades.
Yesterday, senior communications officer for WINDALCO, Kayon Wallace, said only, that "any comment at this time would be premature". She confirmed that officials of the Russia-based UC Rusal -- which has controlling interest in 55 per cent of Jamaica's bauxite/alumina sector (when at full production), including the closed Alpart plant in Nain, St Elizabeth -- "are on the island".
Efforts late yesterday to reach Mining Minister James Robertson failed.
Vincent Morrison, president of the National Workers' Union (NWU), which represents bauxite/alumina workers, told the Observer that he had heard "such reports being bandied about for some time but had heard nothing official from the company". He said that his organisation would "welcome" any re-opening. "We believe that the recovery of the Jamaican economy is tied centrally to the bauxite/alumina sector," he said.
There was extreme pessimism in Government and bauxite/alumina circles last year about the ability of the heavily indebted UC Rusal to revitalise its role locally. Pessimism was heightened by high energy costs at the Rusal-owned plants.
But bauxite/alumina sources say hope has been growing because of a slow but definite revival in the world's metals market as major industrialised economies gradually recover. Also, UC Rusal's prospects have risen following the completion this week of an elaborate deal to refinance US$4.5 billion of debt which is reported to exceed US$15 billion.
The closure early last year of operations at the WINDALCO plants as well as at Alpart chopped more than half Jamaica's earnings from bauxite/alumina, said to have netted in the region of US$500 million annually at its height. The downturn also left about 2,000 bauxite/alumina workers without jobs.

Masdar develops first CCS project
StrategyEye - January 21, 2010
The Abu Dhabi Future Energy Company (Masdar) is developing its first carbon capture and storage (CCS) project at a steel plant in the UAE. The facility hopes to capture 800,000 tons per year of carbon dioxide emissions from the Emirates Steel Industries plant, with operations expected to begin in 2012. Financial details of the project were not disclosed.
The captured carbon dioxide will be transported through a network of pipelines linking the facilities to oilfields where the gas will be used in enhanced oil recovery. The network is scheduled for completion in 2015. Masdar is planning to connect the pipelines to other carbon reduction projects including an aluminium plant, a gas-fuelled power plant and the firm’s Hydrogen Energy joint venture with BP. Masdar says it hopes to capture 5m tons of carbon dioxide emissions by 2014.

Kaiser Aluminum Corporation Announces the United Steelworkers Ratification of ...
CNNMoney.com (press release) - January 21, 2010
FOOTHILL RANCH, Calif., Jan. 21, 2010 (GLOBE NEWSWIRE) -- Kaiser Aluminum Corporation (Nasdaq:KALU) today announced that union members at the Company's Newark, OH and Spokane, WA facilities have ratified a new five-year labor agreement. The agreement which affects approximately 800 union members is effective on October 1, 2010 and extends through September 30, 2015.
The new labor agreement provides for the extension of wages and fringe benefits of the current contract through September 30, 2015. In addition it calls for the extension of the potential profit sharing contribution for the Union VEBA through September 30, 2017. The VEBA is administered by four trustees and the assets are managed by an independent fiduciary. Further, the new labor agreement also extends the term of the Director Designation Agreement that allows the union to nominate candidates which, if elected, would constitute up to 40% of the Company's board of directors.
"Kaiser Aluminum values the contribution of our Trentwood and Newark employees to the Company's success as a leading manufacturer of semi-fabricated specialty aluminum products, allowing us to meet demanding customer requirements for product quality and consistency and to achieve a reputation for 'Best in Class' customer satisfaction," said Jack A. Hockema, President, Chief Executive Officer and Chairman of Kaiser Aluminum. "We look forward to maintaining our long term relationship with the United Steelworkers as we continue to be a supplier of choice for our customers in the aerospace and defense, automotive and general industrial market segments."
Kaiser Aluminum, headquartered in Foothill Ranch, Calif., is a leading producer of semi-fabricated specialty aluminum products, serving customers worldwide with highly-engineered solutions for aerospace and high-strength, general engineering, and custom automotive and industrial applications. The Company's North American facilities produce value-added sheet, plate, extrusions, forgings, rod, bar and tube products, adhering to traditions of quality, innovation and service that have been key components of our culture since the Company was founded in 1946. The Company's stock is included in the Russell 2000® index. For more information, please visit www.kaiseraluminum.com.

No new production line 5 for Alcasa - Mr Jose Gil
SteelGuru - 20-Jan-2010
Business News Americas cited Mr José Gil union leader of Sintralcasa as saying that Venezuelan state aluminum reducer Alcasa has decided not to build a production line 5 due to a new business strategy that focuses on transforming aluminum.
He said that this is the business for the country and this is where the profits are.
Mr Gil said that the company's vision has changed and now does not include the line 5 projects that were proposed as a part of the previous strategy of producing and exporting primary aluminum.
He said that now we plan to transform aluminum, since selling primary aluminum is not very profitable with such high production costs and low prices. Value can be added in transforming and so that's where the real business is.
In December the national government announced a series of measures designed to cut power use by 560 MW at basic industry companies in Guayana region and Alcasa shut down production lines 1 and 2 as part of this plan. After the announcement was made, the company started the process of permanently shutting down and dismantling the 2 lines, making upgrades in these areas and on another aluminum transformation line as well.
Closing down lines 1 and 2 will reduce total production by 20% since lines 3 and 4 combined have capacity of 168,000 tonne per year out of Alcasa's total 210,000 tonne per year.
(Sourced from Business News Americas)

Saudi Arabia considers giant aluminium plant
GulfNews - 20-Jan-2010
Riyadh: Saudi Arabia plans to establish a giant primary aluminium production plant worth 26 billion Saudi riyals.
The plant will have a production capacity of 720,000 tonnes of primary aluminium in a year.
This information was contained in a study conducted by the Gulf Organisation for Industrial Consulting (GOIC). The report, released yesterday, showed that Saudi Arabia is working on a full-fledged plant to process bauxite ore and establish an aluminium smelter in Ras Al Zour, north of Jubail on the eastern coast of Saudi Arabia.
Saudi Arabian Mining Co. (Maaden) signed a cooperation agreement with Rio Tinto Alcan to build an aluminium smelter and rolling mill as part of Phase 1 of the Aluminium Complex, located in the Minerals Industrial City at Ras Al Zour.
According to the GOIC study, entitled "Aluminium trade and industry in GCC states," the Maaden and Alcan joint venture is part of a strategic project to obtain raw minerals in Al Zobaira mining region.
The project also includes an aluminium refinery with an annual capacity of 1.6 million tons and an aluminium smelter with an annual productive capacity of 720,000 tons in addition to a huge port for export of the products. There will also be a power generating plant with a capacity of 1,400 megawatts.
These projects will make electricity, steam and desalinated water available to the region.
The mining facilities in Al Zobaira will be linked with the refinery and smelter in the new mineral industrial city in Ras Al Zour via the ambitious north-south railroad, the study said, adding that the kingdom is also building a huge aluminium smelter at its prestigious King Abdullah Economic City in Rabigh, on the western coast of Saudi Arabia.
The first phase of the project will have a production capacity of 700,000 tonnes, and the investment will reach about $5 billion.
This was under an agreement signed between Emaar, the Economic City in Jeddah and Emirates Aluminium (EMAL).
It is expected that the project will create 2500 jobs and attract huge investments

CPI joins global aluminium industry body the IAI
SteelGuru - Wednesday, 20 Jan 2010
It is reported that at its 76th Board Meeting, held in London on October 12th 2009, the leading Chinese power generator and aluminium producer China Power Investment Corporation has been elected to membership of global aluminium industry body the International Aluminium Institute.
In welcoming CPI as a member of the Institute, Mr Artem Volynets chairman of IAI & deputy CEO of UC Rusal remarked that “CPI’s role as a major energy and aluminium producer reflects the growing importance of China as a global commodity producer and the world’s largest aluminium consumer.”
The CPI delegation, which met with the IAI, was led by Mr Wang Limin COO and chief economist with the CPI. CPI joins Aluminium Corporation of China as the second Chinese member of the IAI and will be represented on the IAI Board of Directors by Mr Guo Yaode DG, Department of Aluminium related Business.
Mr Volynets observed that the IAI now represents over 80% of global aluminium capacity. The challenge for the industry, as it emerges from the financial crisis is sustainability in its fullest sense, environmental, economic and social.
He said that the industry continues to improve the environmental, safety and social elements of production, to promote the benefits of aluminium use and recycling and has set challenging goals for industry performance in these areas.
He added that the economic challenge is equally demanding, with a clear focus on reducing costs at all levels and improving efficiency in key areas such as energy consumption. We are confident that we will emerge from this financial crisis better placed to respond to market conditions.
(Sourced from Newmaterials.com)

Alba push to boost ties with Sapa
Gulf Daily News - 19 Jan 2010
MANAMA: Alba welcomed representatives from Sapa Profiles to the Alba plant and held discussions on strengthening business ties between the two companies.
Sapa Profiles is one of the world's leading aluminium companies specialised in the extrusion of aluminium billet and the production of a range of value-added products.
Their team was visiting Alba for an extensive review of the company's casthouse operations and support services.
"Sapa is one of our valued customers in Europe, and it was a privilege to meet them in person and discuss how Alba's high-grade aluminium could continue meeting the specific requirements of their products," said Alba chief financial officer Tim Murray.
"We held fruitful discussions with the representatives, and also assured them that each of our products meet the stringent quality and performance requirements expected at Sapa's European plants."
Alba has been consistently ranked as one of the largest aluminium smelters in the world and is known for its technological strength and innovative policies.
It has maintained a high track record for safety and continues to enforce strict environmental guidelines and has surpassed production targets set for the year. It supports numerous community oriented programmes and social activities that have underlined its status as one of Bahrain's leading industrial organisations that remains fully committed to its corporate social responsibility.

World's largest copper smelter transported across continents
Minerals Processing -
Copper has been around for at least 10,000 years, but more than 95 per cent of all copper ever used has been extracted since 1900. After tin, which smelts at campfire temperatures, copper was first smelted by accident in Persian pottery kilns.
Today metallurgists smelt copper at 1200º C in a large-scale, multiphase commercial process usually consisting of a smelting plant, acid plant, tank house, and slag concentrator.
When one of Australia’s largest mining concerns asked China’s NERIN Engineering Company to design and build the world’s largest copper smelter and then ship it to the copper smelting region in Adelaide, NERIN faced a significant challenge. The new smelter would have to function as a whole but be modular in design so that it could be prefabricated in sections then taken apart to be transported in manageable pieces.
Fortunately, NERIN knows nonferrous metal smelting. Its name, in fact, is an acronym for the former Nanchang Engineering and Research Institute of Nonferrous Metals and is associated with the Sinosteel Corporation and the state-owned Assets Supervision & Administration Commission of Jiangxi Province. The firm is at the heart of nonferrous metal production in China, the world’s largest market for copper, aluminum, and other nonferrous metals.
Demand for copper in China has been volatile, quadrupling in six years from June 1999 to May 2006. In a world run by electricity, copper mining and production is expected to continue booming, providing incentive for massive infrastructure projects in the Asia-Pacific region.
To tackle this huge project, NERIN gathered 25 engineers in multiple disciplines –including metallurgy, mineral processing, chemical engineering, civil structure, water supply and drainage, thermal, and electrical – to work intensively together for two months. NERIN chose Bentley’s PlantSpace to build a virtual model of the plant in conjunction with other Bentley software.
"This super large-scale plant model was the first application of the PlantSpace system in China’s nonferrous metal industry,” TongJun Li, Bentley’s engineering software representative at NERIN said.
“This project could not have been done without 3D design, which helped us to work efficiently, keep quality high, and also allowed us to explore plant asset management concepts. We couldn’t imagine taking on this huge project without good 3D tools.”
The basic methodology was to build the entire smelting system as one unified module in PlantSpace, then use PlantSpace’s tools to explore different modularization concepts based on process flow, structure, equipment, and installation. The internal volumes and shapes of the transport vehicles were the ultimate constraint.
“The smelter had to break down into a large number of modules so that it could be trucked and shipped for long distances,” Li said.
“This is what ruled out traditional 2D design. Without the 3D model, we would not have been able to implement the modular design or arrange the transportation.”
Working with the model, NERIN designers built the huge smelting plant to custom specifications, produced all the piping and instrumentation drawings, and completed the design of nearly 3,000 equipment models while simultaneously completing the design of ancillary structures such as steel supports and main process pipelines.
Models were reviewed by many parties and kept synchronised by ProjectWise Navigator, which was also used to divide, track, and edge match 2D engineering drawings; facilitate collision and interference checking; and produce 3D visualisations and animations.
Upon final assembly in Adelaide, the mammoth smelter became a vital component of the infrastructure needed to support modern civilization’s need for copper. Because supplies are limited, copper must be mined and smelted as efficiently as possible, which calls for the best available engineering and construction talent and technology.
In this case, that meant building the smelter three times in two locations: once virtually in PlantSpace, once physically in modules pre-assembled in China, and once in its entirety in Australia. By deploying the optimum mix of tools and talent, China’s NERIN was able to efficiently deliver one of Australia’s most important new industrial assets.

Venezuela may face total power collapse - Report
SteelGuru - 17-Jan-2010
Eluniversal.com reported that Venezuela will face in 120 days a national power collapse if the water levels of the Guri hydroelectric dam continue to decline and if the government does not take the necessary steps to reduce electricity consumption and creates other forms of power generation, since 70% of electricity supply in Venezuela depends on Guri hydroelectric power plant.
This is the main conclusion of a Corpoelec's report on the situation of the Venezuelan electricity system. The document was issued on December 25th 2009 and provides alarming details about the situation of Guri dam.
According to the report, 70% of electricity used in Venezuela is generated by Corpoelec's Electrificación del Caroní through hydroelectric plants located at the Caroni River. The average power of those plants is 7,500 MW. That is, they are generating more electricity than they should.
Less than a month ago, top officials of Corpoelec and Edelca presented to the workers of the basic industries a group of measures that are part of the national energy saving plan. They estimated that it was necessary to cut energy consumption by 1,600 MW to prevent a widespread power collapse.
In the report prepared by Corpoelec, dated December 25th 2009, the National Electric Corporation lists a series of measures to be taken urgently, but the savings would amount to 980 MW. The report suggests several measures to save the aforementioned 980 MW, including the following:
1. Reduction of energy demand in shopping malls (20 MW)
2. Use of 35 million energy-saving bulbs in addition to the 15 million that have been already replaced (200 MW)
3. Reduction of energy demand in public administration buildings, under presidential decree No 6,992 (50 MW)
4. Increase of thermoelectric generation to its highest levels (100 MW)
5. Implementation of higher tariffs to large commercial users
6. Reducing energy sales to Brazil by 70% (60 MW).
7. Reduction of energy demand in basic industries such as the aluminum smelters Venalum and Alcasa, and steelmaker Sidor by 300 MW, 60 MW and 200 MW respectively, for a total of 560 MW
(Sourced from www.eluniversal.com)

Proposed Alumina refinery draws concern
ABC Online - 13-Jan-2010
A proposal to build an alumina refinery at the Kemerton Industrial Estate is drawing concerns over the impact it could have.
The Chinese Corporation, Yankuang, has signed a heads of agreement with Bauxite Resources to develop the refinery and explore tenements in the Darling Ranges.
The Member for Murray-Wellington, Murray Cowper, says the most recent proposal from Bauxite would see the refinery and smelter built at Kemerton.
He says he has concerns about contamination of the local water supply.
"I have been very active in listening to my community, particularly in Australind and Leschenault who are adverse to any noxious industries going into Kemerton," he said.
"They're not against the development of Kemerton, in fact they support it but they do not want a noxious industry."
Bauxite Resources' Managing Director Dan Tenardi says the company is looking at other options in the Collie area but Kemerton has a lot of potential.
"There are some very good synergies for us in that area with industry that's already there," he said.
"To that end, the Kemerton site was also designed for a smelter industry so of course it's on our list."

Alba 'remains focused on growth'
Trade Arabia - 13-Jan-2010
Aluminum Bahrain (Alba) has taken concrete steps in addressing the threats posed by the economic crisis, and remains focused on continued growth, said its chairman Mahmood Hashim Kooheji.
Kooheji was speaking at the 'Gulf Industry Forum,' held on the sidelines of region's key industrial event Gulf Industry Fair in Bahrain.
“We are at a key moment in history after having experienced probably one of the worst economic crisis in recent times. The possibilities of recovery are very much in evidence but depend upon the speed and quality of structural reforms,” he remarked.
He detailed on how Alba carved out a pivotal role for itself in the Kingdom’s industrialisation drive.
“The story of Alba follows this trajectory since the company’s formation spurred the growth of aluminium industry in Bahrain as well as served as a pioneer in industrial diversification in the region,” Kooheji said.
Alba’s inception was the first ever non-oil industrial initiative in the region, and marked the beginning of the economic diversification in the Gulf. When it began operations in 1971, Alba was the first ever aluminium smelter in the entire region and held this position for nearly a decade.
Currently, Kooheji said, there are seven main companies in the downstream sector, and more than 500 small to medium scale enterprises.
Lauding the visionary leadership, Kooheji said that the catalysts for growth can be found in bold policy initiatives and in the creation/ development of ‘springboards’ that stimulate economic activity.
"Today aluminium is Bahrain’s second major export after oil with total exports in 2008 accounting to nearly $19.17 billion and its contribution to the GDP is 12 per cent.," he added.
According to Kooheji, the challenge for all sectors and all economies was to examine one’s core competencies, streamline operations, focus on efficiencies, explore new markets, and remain growth oriented.
"The crisis presented a key opportunity for turning focus on one of the chief resources in any economy and any organisation, namely, the human resource," he said.
In early 2008, Kooheji recalled, the aluminium industry suffered a 60 per cent drop in prices in just six months. Alba had to make a choice: how to remain competitive in an industry that was going through one of its worst crisis?
A global consultancy was hired to do a performance review. Alba began to focus on operational efficiency, reduce excess costs, streamline operations and explore new markets.
“Management structure was right-sized to help achieve this goal. The idea was to have a less bloated structure that enables swifter decision making,” Kooheji pointed out.
The keyword was efficiency, and that was at the heart of Alba’s initiatives, he added.
Laying out the road ahead for Alba, Kooheji said that Alba will continue its commitment to the principles enshrined in Bahrain’s Economic Vision 2030.
“The Economic Vision 2030 aims to lay the groundwork for economic growth that benefits people, an efficient and effective government, and a just and thriving society.
Welcoming the competition in the region, Alba chief said, "We believe it will benefit the entire region as a whole since it will turn the GCC into a force in the aluminium industry."
"The business friendly policies of the government and the foresight shown by the political leadership have been at the heart of Alba’s growth and success. Such inspiring springboards are essential for industries and economies to thrive and to succeed," he added.-TradeArabia News Service

Malaysia and China sign $11 billion energy investment deal
Radio Australia - 12-Jan-2010
SNOWDON: China's leading power and distribution company the State Grid Corporation signed the cooperation agreement with the wholly-Government owned 1Malaysia Development Company in a ceremony witnessed by the Prime Minister Najib Razak. The Chief Minister of Sarawak Abdul Mahmud says the first stage of the plan is to invest in three dams and an aluminium smelter. The federal Government believes China's interest will inspire confidence among global investors in Malaysia. Chief economist with Maybank Investment Bank in Kuala Lumpor Suhaimi Ilias agrees and says it marks a change of direction for the government.
ILLIAS: Obviously one of the first things the Prime Minister did upon entering office was to make an official visit to China and since then there has also been a visit by Premier Hu Jintao to Malaysia. So I think definitely China could potentially be a new major source of foreign direct investment for Malaysia.
SNOWDON: It wont be without controversy. Sarawak in Borneo, the resource rich island shared between Malaysia and Indonesia, has been a development battle ground for many years. The giant and some say unneccessary Bacun Dam has been mired in corruption scandals and built over the objections of the local indigenous people. Ten thousand have been relocated as an area one and half times the size of Singapore has been cleared and is to be flooded. Meena Raman from Friends of the Earth Malaysia says the latest agreement is a further outrage especially as no details of the proposed developments have been released.
RAMAN: Because the kinds of industry that will be attracted will be dirty industries like aluminium smelters that are really not necessary. And this is really not sustainable because we are very concerned about the impact this will have on communities in Sarawak and in relation to forest biodiversity and so on in that area plus pollution. We can't understand why there is more dam building for more energy projects when there is already excess capacity.
SNOWDON: Since the Bacun Dam was approved back in the 1990's the federal government passed special legislation exempting Sarawak from the need to publish environmental impact assessments on development projects - a boon for any investor. Foreign investment in Malaysia fell dramatically last year during the global financial crisis. But it hadn't really recovered from 1998 when the government imposed capital controls to prevent foreign funds leaving the country during the Asian Financial crisis. It was a radical move that some foreign investors haven't forgiven. Economist Suhaimi Ilias says there are many reasons including education and red tape why investors avoid Malaysia posing a challenge the government will struggle to overcome. He says recent political and social conflicts aren't helping.
ILLIAS: We have an issue of even local companies as well as foreign direct investors who have been in Malaysia for a long time are increasingly reinvesting less of the profits they make in Malaysia in the country in fact they are rechanelling it to outside Malaysia.

Hydro Aims to become the Leader for Reducing Emissions on the Aluminium Industry
R & D Magazine - 12-Jan-2010
After having already reduced direct emissions from primary production by 70 percent since 1990 - equal to a staggering three tonnes CO2-equivalents per tonne metal produced - Hydro aims to curb emissions even further and take global lead in the aluminium industry within the global fight against climate change.
BEST: "The new European quota trading scheme will award those that are best in class and penalise those that are not, and it should be obvious to everyone in which group we want to belong," states Tom Petter Johansen, head of the Norwegian Smelters unit in Hydro's Primary Metal business area. (Photo: Jon Kr. Schnell)
The renewed push to cut direct emissions from primary production is not only important from an environmental perspective, but also financially as Europe moves towards a new regime of industry emission benchmarks, with aluminium set at 1.5 tonnes of CO2-equivalents per tonne metal produced.
With free emission allowances for top performers when the new European emissions trading scheme (ETS) comes into force in 2013, there will be a strong incentive for industry players to reduce their carbon footprint and thereby reducing costs.
"Simply put, the new European quota trading scheme will award those that are best in class and penalise those that are not, and it should be obvious to everyone in which group we want to belong," said Tom Petter Johansen, head of the Norwegian Smelters unit in Hydro's Primary Metal business area.
"Although we have not reached the benchmark just yet, the impressive results over the last years make me confident that we are there by 2013," he added.
Cuts already amount to one million cars, more to come In 2009, the average emission level of CO2-equivalents from Hydro's fully-owned Norwegian smelters at Sunndal, Årdal, Høyanger and Karmøy slipped just below two tonnes per tonne metal produced, down from around five tonnes in 1990 and 2.5 tonnes in 2000.
"With a total production from these smelters last year of about 740,000 tonnes, this represents an annual reduction of 2.22 million tonnes CO2-equivalents compared to the 1990-level, which is equal to taking one million cars off the road," Johansen pointed out.
The strong improvement have not only come both through closures of outdated Søderberg lines, but also through systematic work to reduce anode effect and anode consumption.
Through further process improvements, control system adjustments and more stable operations thanks to the Hydro's aluminium metal production system, Johansen is confident that there is much more to come.
"Based on the determination and strong efforts made both from our employees at the plants and within the R&D-community to curb emissions from the electrolysis, I am convinced that we will shortly become the global leader in this area," Johansen said.

A brief UC Rusal primer
FT Alphaville (blog) - 12-Jan-2010
Posted by Neil Hume
Oleg Deripaska’s UC Rusal and its 1,141 page/2.5kg IPO prospectus rolls into town later this week.
According to the Times, at the core of Rusal’s pitch to institutions is this claim on how it wants to invest in its $2.6bn flotation proceeds:
Rusal has deliberately positioned itself to exploit the urbanisation and industrial growth of China and now claims that it can put aluminium on to the docks at Shanghai more cheaply than its Chinese rival, Chalco.
Rusal’s secret weapon over rival producers, says the paper, is an abundance of “stranded” hydroelectric power in Siberia that cannot be moved far afield and is sold cheaply to local industry.
Indeed, the claim features prominently in a research report FT Alphaville has seen from one of the underwriters.
It says that the indebted company sources nearly 80 per cent of its energy requirements from hydroelectric power in Siberia, unlike its rivals which are dependent on fossil fuels.
That means Rusal’s flagship smelters, which generate nearly 80% of the company’s total output (an estimated 4.3m tonnes in 2009), do so at an average cost of $1,338 a tonne.
From the report, the author of which we have been asked not to identify:
“This puts the company in the 1st quartile of the cost curve by exploiting availability of abundant, low cost, stranded hydro power in the region. Power costs constitute only 26% of the company’s total production costs compared to 36% for the industry in H1 2009.
We estimate power consumption in Siberia is running somewhere below 50% capacity right now. Given there are few other power intensive industrial activities in the region, we the potential for aluminium production to double before it become constrained by the availability of cheap power.
So Rusal, which owns 18 aluminium smelters, 12 alumina refineries, 8 bauxite mines and some other mines, is basically a Siberian power play.
But that’s not all. Rusal’s smelters are close to the world’s biggest aluminium consumer — China. This, it is claimed, gives Rusal a transport advantage of circa $40 a tonne over the weighted average of China’s trading partners.
At the moment, Rusal sells only 14% of its output to China, according to the report. But that could change given anticipated increases in carbon regulations in China and the intention of the Chinese government to restrict new aluminium supply.
The report eventually arrives at a valuation range of $20bn-$26bn, using discounted cash flow and peer group valuation multiples. (That implies a PE range of 14.1-18.3 times 2010 earnings, apparently).
We believe that Rusal should trade somewhere between Chalco and Western peers considering its low cost, tier 1 assets, the Russain risk and the Chinese premium for the Hong Kong listing.
Although it could be worth more.
UC Rusal is scheduled to repay some $5bn of debt to its lenders by the end of 2013 under the proposed debt terms (excluding the VEB loan). Even after considering this, we estimate free cash flow to equity increase at 7% CAGR creating a value of $36.5bn by 2012, a 40 per cent upside to the top end of our valuation range.
As for the risks factors in the report these largely focus on debt and legal claims on Deripaska’s stake. And these have been widely covered in the media…
From Thursday’s FT:
UC Rusal yesterday broke its silence on its upcoming initial public offering in Hong Kong, as the heavily indebted Russian aluminium group rebuffed warnings that it is in financial difficulty and presented itself as a play on global economic recovery.
Rusal, controlled by Russian oligarch Oleg Deripaska, is coming to market with a gross debt burden of $14.9bn, of which $5bn must be paid back by 2013 and the rest due on a “pay as we can basis”.
Artem Volynets, Rusal deputy chief executive, said: “When I was in business school I learnt that high gearing is good.”
Speaking ahead of the global roadshow, he added: “It disciplines management and provides investors with high return on equity.”
There are other risk factors, however, such as the fact that US Rusal is net short bauxite (it purchased 8.8m tonnes of the stuff in 2008) and also the rather mature age of its assets.
Its smelters and refiners, according to the report, have an average age of around 42 years and nearly 75 per cent of the group’s aluminium production comes from “Soderberg technology,” which is said to be power intensive and pollutive compared to “pre-technology” (whatever that is).
So its just as well that cheap power is on hand.
Rusal also has a very low effective tax rate of 13%, compared to the corporate tax rate of 20% in Russia, the report states.
Rusal will list on the Hong Kong Stock exchange later this month.

Alcoa reports 'disappointing' $277 million fourth quarter loss
Pittsburgh Tribune-Review - Jan 10, 2010
Alcoa Inc. said Monday it lost $277 million in the fourth quarter because of higher energy costs and currency costs, missing analysts' estimates.
The aluminum producer's loss of 28 cents a share was significantly less than the fourth quarter of 2008, when it reported a loss of $1.19 billion, or $1.49 a share. Fourth-quarter sales fell to $5.43 billion, down 4.5 percent from a year ago.
For the year, Alcoa had a net loss of $1.09 billion, or $1.23 a share, compared to a profit of $147 million, or 10 cents a share, in 2008. Sales for the year dropped to $18.4 billion, from $26.9 billion in 2008.
Alcoa, the nation's largest aluminum producer, is based in New York and has its operations center in Pittsburgh.
On an operating basis, excluding certain items, Alcoa's fourth-quarter profit was 1 cent a share, which was below the analysts' average estimate of 6 cents a share.
"This quarter was disappointing," said John Stephenson, who helps manage $1.45 billion, including Alcoa shares at First Asset Investment Management in Toronto. The miss on earnings was "significant," he said.
Alcoa's shares closed at $17.45, up 43 cents a share, or 2.5 percent, but traded lower after hours. Alcoa released its results after the market closed.
CEO Klaus Kleinfeld said the aluminum industry suffered three blows last year: a 60 percent drop in prices over five months, a widespread drop in demand and the credit crunch. Kleinfeld said Alcoa expects 2010 will be better than last year, but below the record levels of 2008. He predicted a 10 percent growth in aluminum demand and an improvement in key markets.
A restructuring resulted in the elimination of 24,600 jobs worldwide, resulting in a savings of $325 million, Kleinfeld said. Seventy-five percent of the job cuts are permanent, and another 20,000 jobs have been eliminated through various divestitures, reducing the company's total work force to 59,000, Kleinfeld said.
This year, Alcoa is expected to benefit from an increase in global demand for aluminum. Demand will increase about 9 percent, excluding China, and 12.5 percent when China's demands are included in the forecast, said industry expert James Southwood, president of Commodity Metals Management Co. of Marshall.
China's aluminum consumption rose an impressive 34 percent in December, compared with December 2008, but Southwood said that won't last. Aluminum demand in China probably will increase by about 15 percent this year over 2009.
The news that demand will increase this year should be considered in the light that 2009 was a very bad year for aluminum, Southwood said.
"We aren't going to get back to 2008 levels until 2011," he said.
The drivers of growth in aluminum demand will be the transportation industry, including automotive, along with residential construction, Southwood said. A rebound in commercial construction is not likely to occur until the middle of the year, he added.

China Henan asks aluminium smelters to prepare output cuts
Reuters India - Jan 10, 2010
The power operator in Henan province has warned local aluminium smelters that its power supplies to the smelters may fall due to local power shortages, smelter officials said on Monday.
"The power bureau called us on Sunday asking us to prepare for production cuts at our smelter since the local power supply is tightening," an administration official at a large smelter in Henan told Reuters.
"I can imagine they would call others."
A manager at another large smelter in Henan said the company had received calls from the power operator on Sunday and Monday about warnings of power supply cuts.
Henan, the top primary aluminium producing province in China, has more than 4 million tonnes a year of aluminium smelting capacity.
China is the world's top producer and consumer of the metal. (Reporting by Polly Yam; Editing by Jacqueline Wong)

Negotiations with EU on trade deal make progress
Zawya - Taha Hussain -10 January 2010
DOHA: Negotiations between the GCC Secretariat General and the European Union on concluding the free trade agreement are progressing, said Abdulrahman bin Hamad Al Attiyah, the GCC Secretary General.

He said that the discussions he had recently with the Swedish Trade Minister in Stockholm, Eva B. whose country holds the EU presidency has had a positive impact on trade and economic relations between the GCC and EU, especially with regard to free trade agreement.

Al Attiyah stressed the need to settle pending issues that holds back the conclusion of the free trade agreement, namely those related to taxes imposed on petrochemical export from the GCC to the EU. He said the two parties agreed to step up negotiations between them on the agreement.

Despite that the GCC countries adopted a unified customs tariff of 5 percent which was one of the conditions set by the EU before a free trade agreement could be signed, there are still obstacles put by the EU on the way to a conclusion of an agreement after 18 years of discussions, said Al Attiyah.

The EU imposes heavy taxes on GCC exports preventing their products to access European markets although the balance of trade between the two blocks is always in favor of the EU side.

After imposing a carbon tax of 50 percent on oil and its derivatives as well as on petrochemicals, the EU also imposed up to 6 percent tax on GCC exports of aluminum despite that most of exports from non-oil GCC countries consist of petrochemicals and aluminum. As a result prices for aluminum from the GCC increased in European markets, while demand for these products went down. The negotiations between the two sides also focused on the participation of EU countries in the capital of national shareholding companies.

By Taha Hussain © The Peninsula 2010

Iran's biggest aluminum plant launched
Press TV - 09-Jan-2010
Iran has launched its biggest aluminum production plant to increase its output capacity by 47 percent to 457,000 tonnes per year.
The Hormozal aluminum smelter plant came on stream at the cost of 400 million Euros and 2 trillion Rials (about $200 million).
Hormozal was officially inaugurated in the southern city of Bandar Abbas on Saturday with the presence of President Mahmoud Ahmadinejad.
The plant is a joint venture between Iran and Italy. The giant project, with an annual production capacity of 147,000 tonnes, would create 7,700 direct and indirect jobs.
The 230 KA technology has been applied in the project, the Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO) said in a statement.
Iran's aluminum exports have reached approximately $125 million in the first half of the current Iranian year (beginning March 21).
A report released by IMIDRO in October shows a total of 87,693 tonnes of aluminum having been exported in the same period, up 18 percent compared with the previous year.
It says Iran's aluminum output increased by 22 percent to 143,622 tonnes in the same period.
The data shows that two Iranian companies, Iralco and Almahdi, produced 86,544 and 57,078 tonnes of aluminum respectively in the first half of the year.

Industrial plants and airlines face fresh carbon reporting rules
Business Green - 08 Jan 2010
Expansion of EU emissions trading scheme means new reporting requirements for around 170 UK industrial plants
James Murray
An estimated 170 industrial sites across the UK have until the end of April to submit data to the government on their historic carbon emissions, under new EU emissions trading scheme (ETS) rules that came into effect at the start of the month.
From 2013, phase three of the ETS will come into effect extending the cap-and-trade scheme to cover a wider range of carbon intensive sites and companies.
In an attempt to avoid a repeat of the over-allocation of emission allowances that dogged the first phase of the scheme, the EU has introduced rules that will require those installations that will be included in the scheme for the first time in 2013 to provide data on their greenhouse gas emissions for the period from 2005 to 2008. The EU will then use the data to set the emissions cap for those facilities at an appropriate level and ensure that over allocation of allowances is avoided.
The UK government announced this week that those installations that will be brought into the ETS have until April 30 to provide historical emissions data.
They also have until June 30 to provide independently verified historical production data for the 2005-2008 period so that the government can work out how to allocate the distribution of free emission allowances during phase three of the ETS.
The installations affected by the new reporting rules include all large scale units where fuels are combusted, ferrous metal and aluminium plants that use over 20MW of thermal energy, as well as a number of chemicals and ceramics factories.
A spokeswoman for the Department of Energy and Climate Change said that the government expected that around 170 individual installations would be affected. "The operators of installations new to the EU ETS in Phase III have been, and will continue to be contacted to inform them of their obligations and the deadlines pertaining to them," she added.
The announcement came as airlines operating routes that take off or land at EU airports also begin having to collect emissions data for the first time.
Airlines are to be included in the ETS from 2012 and are required to begin monitoring their emissions from the start of this year in order to provide the EU with data that will help establish an appropriate level of free allowance allocation.

Aluminum Output 'Withering' in Europe as Rio, Alcoa Shut Plants
BusinessWeek - January 07, 2010,
By Anna Stablum and Firat Kayakiran
Jan. 8 (Bloomberg) -- Rising aluminum prices in 2010 may not be enough to halt the decline in European output of the metal as producers quit the region for cheaper electricity in the Middle East.
Half of Europe’s remaining capacity may shut by the end of this year and two-thirds could be cut through 2013, according to the European Aluminium Association. Relying on imported metal would raise costs for fabricators of aluminum products such as foil and window frames, who employ more than 200,000 people in Europe, the EAA said. End-users such as Volkswagen AG and Bayerische Motoren Werke AG would also end up paying more.
“Western European smelters are gradually withering on the vine,” said Julian Kettle, a London-based analyst at metals research company Brook Hunt who has tracked the aluminum market for more than two decades.
Aluminum consumers in the European Union pay a 3 percent duty on imports. Metal delivered into Rotterdam, Europe’s largest port, also incurs transport and insurance costs that are currently about $65 a metric ton, according to U.K. research firm CRU International Ltd.
The aluminum spot price on the London Metal Exchange was $2,307 a ton as of 3:07 p.m. yesterday. On that basis, duty, delivery and insurance costs on imports was about $134 a ton. Europe used 5.3 million tons and produced 3.9 million tons in 2009, according to CRU.
Italian Closures
Europe was the fourth-biggest aluminum producer in 2009, trailing China, North America and Russia, according to Brook Hunt. It was the largest in 1940, accounting for half of global supplies of the metal that’s used in of cars, aircraft and beverage cans.
Norway’s Norsk Hydro ASA, Europe’s third-biggest producer, said Dec. 11 it may close a German smelter because of power costs. Output started at Hydro’s 585,000-ton smelter in Qatar, it reported 10 days later. Alcoa Inc. signed a contract on Dec. 20 to build a $10.8 billion aluminum complex in Saudi Arabia by 2013, a month after saying it would close two Italian smelters.
Electricity is the biggest single cost for producers. European plants pay tariffs equal to about $950 for each ton of metal produced, Daniel Brebner, an analyst at Deutsche Bank AG in London, wrote in a Dec. 11 note. Some producers are struggling to renegotiate “competitive” power contracts, Brebner said.
The European Commission’s emissions trading system imposes carbon-dioxide quotas on utilities and requires those exceeding their limits to buy or borrow credits. European electricity prices are the highest in the world because generators pass on the cost of their emissions, the EAA said.
EU Probe
There’s “no legal certainty” whether EU regulators will allow producers to access electricity at below market prices, the Brussels-based EAA said in an e-mailed response to questions.
Alcoa idled the Fusina and Portovesme smelters in Italy, which have a combined annual capacity of 194,000 tons, after the commission ruled against reduced power tariffs. Alcoa’s output in Spain, where it has three smelters, may also be vulnerable to curtailment, Brebner said. The commission opened a probe in 2007 to establish whether Spanish power prices comply with EU state- aid rules.
Alcoa is “continuing dialogue” in Spain to reduce costs, company spokesman Kevin Lowery said. When asked for further comment, he referred to Alcoa’s third-quarter filing, in which it said the Spanish tariffs conform with all applicable laws and regulations.
Cheap Power
“It is a one-way road for some industries in Europe and I think that is to disappear and emerge in other areas where there is cheap power,” Brebner said.
Rio Tinto Group, the London-based company that’s the world’s second-largest aluminum producer, stopped smelting at its 148,000-ton plant in Wales at the end of the third quarter of last year after an energy contract ended. Hydro is evaluating the future of its Nuess smelter in Germany and the European Commission is still considering whether to approve Germany’s proposed 40 million-euro ($57 million) aid package for the plant, Hydro spokesman Erik Brynhildsbakken said.
Industrial users pay 36.80 to 48.60 euros per megawatt hour under electricity supply contracts, compared with 20 euros in the Persian Gulf, according to the EAA.
Emirates Aluminium Co. Ltd., a joint venture between Abu Dhabi state-owned investment company Mubadala and Dubai Aluminium Co., the largest aluminum smelter in the Middle East, started production on Dec. 1. Emal, as the venture is also called, will reach its initial capacity of 700,000 tons a year by the end of 2010.
“With the full ramp-up of Qatalum and Emal, output in the Middle East will continue to grow,” said Massimo Rossi, an analyst at London-based researcher CRU Group.
Global aluminum demand will rise 12 percent to 38.9 million tons in 2010, after shrinking 6.6 percent in 2009, Macquarie Group Ltd. said in a Dec. 29 report. Aluminum cash prices will average $1,984 a ton in 2010, the bank said, compared with $1,671 in 2009.
--With assistance by Edmond Lococo in Boston. Editors: Simon Casey, Tony Barrett
To contact the reporter on this story: Anna Stablum in London at +44-20-7330-7500 or astablum@bloomberg.net Firat Kayakiran in London at +44-20-7330-7484 or fkayakiran@bloomberg.net
To contact the editor responsible for this story: Stuart Wallace at +44-20-7673-2388 or swallace6@bloomberg.net Simon Casey at +44-20-7673-2631 or scasey4@bloomberg.net

Major redundancy at Windalco
Jamaica Gleaner - 06-Jan-2010
NINE MONTHS after Windalco suspended production at its Ewarton refineries, the bauxite company says it will implement a redundancy exercise for its 762 permanent employees at the end of March, this year.
Production was suspended last year as a result of a sharp reduction in demand for aluminium in the wake of the global economic meltdown.
In a news release yesterday, Windalco said while it acknowledged that there has been some improvement in the global economy, the alumina industry has only seen marginal movement.
"With this in mind and with no immediate end in sight to the period of suspended production, the management felt the decision was in the best interest of the company," the release said.
Andrew Currie, acting managing director of Windalco said: "The redundancy exercise is in direct response to feedback from many employees. We thank the entire workforce for the role they played in establishing Windalco as a leading company in Jamaica. The tireless efforts and dedication of the workers have advanced the standards of the local bauxite and alumina industry."
Counselling sessions
Recognising the impact the redundancy exercise would have on many, Currie also urged the employees to take advantage of the series of personal and financial counselling sessions being organised by the company.
The company's management is currently redefining its needs and will be designing the new organisation structure, which will be implemented on April 1, 2010.
A small complement of workers will be required to undertake activities aimed at preserving its assets and meeting legal and community obligations. This will also require support from local contractors to meet other ongoing needs.
Additionally, the new organisational structure will ensure a continuation of the agricultural activities and third-party business at Port Esquivel in St Catherine.
Windalco 's facilities have formed a long and proud partnership with the local communities and people of Jamaica in their more than 50 years of operation. During this time, these facilities have significantly impacted on community development and nation building.

Venezuela Aluminum Cuts 'Shrugged Off' as Supply Leads Demand
Bloomberg - By Steven Bodzin - 05-Jan-2010
Venezuela’s decision to cut aluminum output to save electricity is being “shrugged off” as global supplies grow faster than demand, said Douglas Horn, a commodity analyst at CPM Group.
“I’ve been surprised that prices haven’t reacted more positively,” Horn said today in a telephone interview from New York. “There is a ton of aluminum supply out there. There’s plenty of cushion.”
Corp. Venezolana de Guayana, the holding company of Venezuela’s state metal producers, said last month it would cut output by 40 percent at Venalum, an aluminum smelter with capacity to produce 430,000 metric tons a year. It also started dismantling two production lines at the 210,000 ton-a-year Alcasa smelter and shut four furnaces at the Siderurgica del Orinoco steel mill.
Primary aluminum for delivery in three months rose $35, or 1.5 percent, to $2,302 a ton today on the London Metal Exchange. The metal has climbed 2 percent since Venezuela announced the cuts on Dec. 23, while copper has jumped 6.9 percent.
Venezuela is rationing power after the El Nino weather pattern reduced water levels in the Guri dam, which provides 70 percent of the country’s electricity.
To contact the reporter on this story: Steven Bodzin in Caracas at sbodzin@bloomberg.net.

Guiyang invests CNY1.7bln to build aluminum deep-processing base in western China
Alibaba News Channel - Jan 4, 2010
On the morning of December 31, 2009, Guiyang Baiyun aluminum and aluminum-processing base was formally started in Baiyun district. Guiyang will probably become a new aluminum deep-processing base in western China.
It covers 282.8 hectares, and its estimated investment totals to 1.7bln yuan. By the end of 2012, the total value of aluminum and aluminum processing industry will reach around 12bln yuan.
Additionally, the expected investment of its first project is more than 80mln yuan with the annual production of 6mln aluminum wheel hubs.
It is learned that after the project is completed, its predicted value per year can hit 420mln yuan and can increase more than 500 employees.

More than 20 countries to participate in 'Aluminium India 2010' in Mumbai
India Infoline.com - 04-Jan-2010
At the Bombay Exhibition Centre, aluminium manufacturers, aluminium processors, technology suppliers as well as end consumers will come together – ALUMINIUM INDIA will display the entire value creation chain for this material.ore than 100 exhibitors from 20 countries will present themselves a few weeks from now at ALUMINIUM INDIA 2010 in Mi fastest growing aluminium markets only last year. Now the second edition is to follow from 25 to 27 February.
All the key players in the Indian market will be represented in Mumbai, among them Balco, Fata Hunter, Indo Foil, Jiwanram Sheoduttrai Group (J.S. Group), Five Solios, Pyrotek or Wagstaff. Bhoruka, India’s leading extruder, is also taking part in the trade fair as an associate sponsor. ALUMINIUM INDIA is receiving support from the Ministry of Mines and the Ministry of Science and Technology. The London Metal Exchange will also present itself at the trade fair in 2010.
With the Foundry & Casting Pavilion as well as the Extrusion Pavilion, the trade fair also offers two joint theme stands. German and Russian companies will present themselves in the respective national pavilions, among others.
Alcastek: Congress to accompany the trade fair
IN 2010, ALUMINIUM INDIA will again be accompanied by the Alcastek International Conference, the internationally renowned congress on aluminium casting, rolling and extrusion technology. The two-day technology forum, which will be held for the fifth time already, is the most important meeting place in this sector in India for experts from industry and politics.
The lecture programme will cover the entire aluminium production and processing chain. But the congress will also focus on the situation of the Indian aluminium market after the crisis and on energy issues this year. Speakers will include experts from Alcan, Nalco, Sapa, Dubal, Emal or Novelis.
Growth market India
India is one of the fastest growing markets for the aluminium industry. While the per capita consumption of aluminium in India is still one of the lowest (approximately 1 kg per capita), the subcontinent already takes eighth place in absolute production figures and also holds some 10% of the world’s bauxite deposits. Demand comes primarily from the electrical, transportation, packaging and construction industries

A Hard Pitch for Rusal
Wall Street Journal - 04-Jan-2010
By Patience Wheatcroft
As a sales pitch, the prospectus for Rusal is about as enticing as an invitation to invest in Bernie Madoff's boys' latest venture. The first dire warning against putting any cash into this Russian aluminium giant comes in large red letters on page three of the document. Then many more of its more than a thousand pages detail the causes for concern.
The Hong Kong Stock Exchange has agreed to list the shares but, such are its concerns about the company, it has insisted on the extraordinary restriction that the stock may only be sold to professional investors prepared to buy in blocks of at least HK$ 1 million. Given the significant qualms that must have given rise to such a stipulation, the mystery is why the Hong Kong exchange is prepared to have the shares on its board at all.
.The risks inherent in the business range from the commercial and financial to the personal and the political, often becoming inextricably intertwined. Undeniably, prospects for the world's largest aluminium business are hitched to the outlook for the world economy. The slump impacted demand, tore into prices and pushed Rusal into the red, in a big way: a net loss of $868 million in the first half of last year. Even taking an optimistic view on world trade, Rusal isn't predicting a return to the dividend lists before 2013.
That is because of its crushing debts, the reason for its desperate dash to find some cash from a flotation. Even after some shuffling of obligations last year, it has $14.9 billion of debt, of which $4.5 billion is due for repayment by October this year. That is one mighty big risk factor: if the debt cannot be extended, refinanced or repaid, well that might spell the end for Rusal.
But such concerns are prosaic compared with some of the risk factors that pertain to this fascinating business. How intense must have been the discussion amongst the extensive team of blue chip advisors employed to get the business floated as they wondered how best to explain the company's more colorful aspects.
Most of these centre around Oleg Deripaska, the man who runs the company and owns 53.4 per cent of it, although that will fall to 47.6% after flotation. Mr. Deripaska's has been a remarkable career. In 1993, he was a 25-year-old graduate working as a manager in a smelter at Sayaogorsk. Fifteen years later, he was labelled as the 9th richest man in the world by Forbes magazine, with a fortune put then at $28 billion and an empire that encompassed resources, energy, manufacturing, financial services, construction and aviation.
Mr. Deripaska had stopped working in smelters and moved to owning them, emerging as the victor in the notorious 'aluminium wars' which raged in Russia in the 1990s. He took to oligarchy in style, acquiring a London home in the heart of upmarket Belgravia and other essential trappings of the billionaire lifestyle, including a luxury yacht on which, last summer, the U.K.'s business minister, Peter Mandelson, was on vacation.
Mr. Deripaska's relationships with other governments are less cordial. Amongst the risk factors is the fact that his applications for visas to travel to the United States were turned down in 1998, 1999 and 2,000. The refusal came under the section "based on security, unlawful activity and related reasons," and Canada also turned down applications in 2003 and 2006. The prospectus notes that there has been speculation in the media that the refusals might be because of "alleged connections with organized crime." But potential investors may find it reassuring to know that Mr. Deripaska "to the best of his knowledge" is not under investigation by any U.S. authority and he has since been allowed into the country.
That may not sound like a ringing endorsement of the man at the top of the business but the controversy does not end there. There is the little matter of the court case, now under way in London, in which a former business associate, Michael Cherney, is claiming that a fifth of Rusal belongs to him and is only being held in trust by Mr. Deripaska.
This case could have an adverse effect on the company and the trading price of its shares, concedes the prospectus.
In deciding how to explain the aspects of Rusal that make it such a unique investment proposition, the advisors appear to have opted for a certain strain of deadpan humor. Thus we learn that other Deripaska-owned businesses supply close to 70% of its energy requirements to Rusal. "Generally speaking, such transactions may be on terms more or less favorable to the group than those that could be obtained from a third party supplier," we are told. And that must be true but, given that energy costs are such an important part of the aluminum equation, accounting for more than a quarter of the cost of goods sold, the statement rather raises the question about what the future may hold for the group.
Similar questions must arise from the company's complicated structure which involves a trading structure located in Switzerland, a principal-trading company in Jersey, a holding company registered in Jersey and the holding of group assets through a number of interconnecting holding companies scattered in what used to be referred to as tax havens.
Those advisors know the risks: "Russian tax and customs laws and regulations, including the transfer pricing rules...are subject to varying interpretations and changes, which can occur frequently." Those who followed the Yukos saga, and saw how tax demands could appear to be politically rather than fiscally inspired, would have to agree. This is not yet a problem for Rusal, for prime minister Vladimir Putin appears to be a supporter of Mr. Deripaska, and Russia's state bank is one of the cornerstone investors in the IPO.
But the biggest risk factor of all, and it is not spelt out in the prospectus, is that oligarchs can lose their popularity with the Russian PM. A bet on Rusal is a bet on its chief remaining in favor.

Venezuela may shut metal output to save power-paper
Reuters - Mon Jan 4, 2010
CARACAS, Jan 4 (Reuters) - Venezuela may be forced to close its aluminum, steel and bauxite operations in the south-east of the nation due to a drought and electricity shortfall, a minister was quoted as saying on Monday.
"If we have to close the basic industries in Guayana, because the Guri (reservoir) is drying up, well we have to close them," Electricity Minister Angel Rodriguez said in an interview with financial daily El Mundo.
"We have to avoid the reservoir drying up completely."
The Guri, one of the world's largest hydroelectric dams, close to the Orinoco river, supplies about two-thirds of the South American oil-producing nation's electricity, but is at dangerously low levels, officials say.
President Hugo Chavez's government has imposed electricity rationing across the nation, from Caracas shopping-malls to the state-owned heavy industries in Guayana state that consume around a quarter of the nation's power output.
But after drastic cuts already at aluminum smelters Venalum and Alcasa, plus steel mill Sidor, the industries may need to be shut altogether to ease strain on the system, Rodriguez told the newspaper.
"In other countries, they have closed industries. So if we, because of the emergency situation, have to close industries, ministries, and change working hours, we will have to. And the Guayana basic industries form part of this."
The minister gave no timetable for taking a decision on closing the basic industries.
The Chavez government blames an unprecedented drought, and soaring demand during five years of economic growth from 2004-2008, for the strain on the power-grid.
But critics say negligence and lack of investment during Chavez's nearly 11 years in power are to blame.
Sidor, which was nationalized from Argentina-based Ternium (TX.N) in 2008, said last week it was installing five generators to compensate for power-rationing affecting its production. It has not quantified the impact on output, which was forecast at 3.61 million tonnes of liquid steel for 2009.
Basic Industries Minister Rodolf Sanz said last month that 558 megawatts in consumption would be saved in the state-run heavy industry, mainly by closing two furnaces at Sidor, and reducing output at Venalum and Alcasa.
He said ouptut would fall by nearly 40 percent, or around 14,000 tonnes a month, at Venalum. The company is 80 percent owned by the government and 20 percent by a consortium of Japanese companies Showa Denko (4004.T), Marubeni (8002.T), Kobe Steel (5406.T), Sumitomo Chemical (4005.T), Mitsubishi Materials (5711.T) and Mitsubishi Aluminum.
At Alcasa, the government shut two production lines, cutting output by about 1,600 tonnes a month, officials said.
Venezuela's mining sector shrank 10.2 percent in 2009, compared with the previous year, according to estimates by the Central Bank.
Officials say Venezuela's oil industry, the bedrock of its economy, has been relatively untouched by the power cuts. (Reporting by Patricia Rondon; Writing by Andrew Cawthorne; Editing by Marguerita Choy)

Nigeria: UC Rusal to Sell Shares in Alscon
AllAfrica.com -Sylvester Enoghase 03 January 2010
Lagos — The world's third biggest primary aluminum producers, UC Rusal may have perfected plans to sell half of its shares in Aluminum Smelter Company of Nigeria Plc (ALSCON) to fund investment in other countries.
Investigations by Daily Independent also revealed that more than 40 percent of the workers, especially in the pot room, considered a very technical department, have secured fresh opportunities in aluminum plant in Quatar and Ghana as a result of gradual collapse of operational work and poor condition of service in ALSCON
A reliable source revealed to Daily Independent at the weekend that UC RUSAL is not comfortable with the information about the outcome of the recommendations made by the Committee set up by the National Council of Privatisation (NCP).
Although the report is yet to be made public,it was gathered that the management has not fulfilled its obligations in the agreement reached with Nigeria and so may sell off part of its shares to fund other investments in other countries.
According to the source, UC RUSAL purchased a 77.5% block of shares in ALSCON, a 193,000-tonne smelter reduction, anode-producing and casthouse areas, a port on the Imo River and a power-generating station with an offer of $250 million, well under Bancorp Financial Investment Group (BFIG)'s bid of $400 million while Germany's Ferrostaal AG and the Government of Nigeria remain minority shareholders with 7.5% and 15% blocks respectively in 2006
The source also revealed that the Committee's report after investigations has clearly mentioned that dredging of the Imo River and Opobo Estuary has still not commenced over three years of takeover, and as a result, no meaningful production is going on at the smelter, since raw materials and finished goods can only be brought in or exported via the Imo River- Opobo Estuary
Noting that the Nigerian authorities have decided to accelerate their review of what UC Rusal has done and spent, or allegedly failed to do and spend at ALSCON since 2006, the source added that the committee recommended the cancellation of government's transaction with the organisation.
The source however claimed that UC RUSAL, aware of the fact that the Government of Nigeria may cancel the deal and call for compensation over its inability create 1,900 local jobs at the smelter with additional active development of small and medium-scale business around the smelter, developing necessary infrastructure including port facilities, technical maintenance companies, medical and social services will generate approximately 20,000 jobs in Akwa Ibom state as agreed in the biding deal, has now planned to sell of half of its stakes to invest in other companies outside Nigeria.
But a source from BPE that spoke to Daily Independent on Sunday, who would not want his name mentioned said "To the best of my knowledge as a staff of BPE, I am not aware of UC RUSAL trying to sell part of its shares."
The source however disclosed that the NCP's committee report has not be made public and so will not be in a position to reveal the recommendations made.
However, a management staff of ALSCON that spoke to Daily Independent, but would not want his name mentioned, claimed that the company is facing hard times as a result of the global economic meltdown that affected the company in Guinea and in Nigeria.

Hindustan Construction Receives Fabrication Order for Greenfield Smelter ...
AZoBuild - 04-Dec-2010
HCC (Hindustan Construction Company), a leading infrastructure construction and development company has been awarded a prestigious contract worth Rs. 108.73 crore from Hindalco Industries Limited, an Aditya Birla Group Company and industry leader in aluminium business to fabricate pot shells for a greenfield smelter project at Lapanga, Sambalpur in Orissa.
This contract involves fabrication of 362 numbers of Pot Shells. These pots require high precision quality works to maintain very low tolerance limit as per specification. The pot shell fabrication work is to be completed in 19 months from the date of issue of this Order.
Source: http://www.hccindia.com/

Nalco regulates power supply to smelter on dwindling coal stock
Business Standard - 04-Jan-2010
BS Reporter / Kolkata/ Angul January 4, 2010, 0:56 IST
The captive power plant of National Aluminium Company (Nalco) in Angul has started regulating power supply to the smelter, located next to it, owing to acute coal crisis.
The Nalco CPP has reached super critical condition where it has only two days coal supply.
The power supply to the Nalco smelter plant will be regulated till the coal stock of its captive power plant (CPP) stabilizes.
“The CPP is currently feeding 740-750 MW of power to the smelter complex as against the normal requirement of 810 MW needed to run 960 pots. However, there has been no cut in aluminum output despite the short supply of power”, said K S Shreedharan, executive director, Nalco.
He said, the coal supply from the Mahanadi Coalfield Ltd (MCL) has been less than the requirement to run all the units of CPP at optimum level.
He, however, clarified that the fire at the rapid loading system at Nalco's linked Bharatpur coal mine has not hit coal supply as loading of the dry fuel is being carried out through other means. This has been possible due to perfect coordination among the Railways, MCL and Nalco authorities, he claimed.There was a big fire at the rapid loading system at the Bharatpur coal mine under MCL's command area on Tuesday.
Out of the nine 120 MW units in Nalco's CPP, two units are now shut down due to maintenance and other reasons. An average of 740 MW of power is produced from the seven working units. The eighth unit will be on stream after the coal stock situation improves, said Shreedharan.
Sources said, though MCL meets its annual coal supply commitment to Nalco, the supply is not evenly distributed. In some months it is low and in other months it is on the higher side. As a result, in most part of the year, the coal stock of the company is not more than three days supply.
While the company requires 18,000 to 20,000 tonnes of coal everyday to build up its stock, the present supply is 14 to 15,000 tonnes per day.
Nalco's smelter plant has 960 working pots, out of which 740-745 pots are presently operational due to short supply of power. The daily aluminium production stands at about 1200 tonnes.
However, Nalco is now eyeing on more coal supply from MCL so that they can build up stock and produce more power by operating eight units of its CPP.

Aluminium: Doom to boom in 2010
Commodity Online - By Geena Paul 01-Jan-2010
MUMBAI (Commodity Online): Aluminium has been the worst performer among base metals in 2009 and investors will never forget the setback they suffered by putting their money in aluminium in the previous year. But, there is no guarantee that the scenario will remain the same in 2010.
But, like any other base metal, China holds the key to the aluminium prices. If Chinese demand soars the prices will climb up and India’s aluminium producers are set to cash in on that.
Long term prospect of aluminium is bright as China is still in the middle of completing urbanization and its metal intensive growth is likely to continue for many years to come.
About 65% of aluminium consumption is in the east and middle south China. The urbanization of North West and south west has great potential for aluminium demand in the coming years.
In the short term, overcapacity, plenty of inventories and reopening of smelters due to return to profitability will cap any upswing in aluminium prices.
However, the current average cost of the Chinese smelters is $2,000 and is rising further due to increase in bauxite and alumina and coal and power prices. These cost push factors provide a strong floor for aluminium prices.
LME aluminium is expected to trade between $2,000 to $2,400 in 2010.
Indian aluminium producers are best placed with captive bauxite, alumina, power and are insulated from across the board cost increases to a large extent.
In the pure aluminium space, the top company will be India’s Nalco. It is one of the cheapest aluminium producers and has volume upside of 30% in both aluminium and alumina due to brown field expansion.
Aluminum has been the worst performer among the base metals this year with returns close to 47% only.
Enam, a leading brokerage and research house has come out with its latest report on China’s aluminium sector and its outlook saying that aluminium demand in China is expected to grow by 15% in 2010 on the back of revival in construction and auto segments.