AluNews - May 2010

Russia blames economic crisis for problems in Montenegro of a few Russian ... Business News - 31.05.2010
Montenegrin Minister of Economy Branko Vujovic, however, believes that the survival of the Aluminum Combine Podgorica (KAP) and niksićckih bauxite mine depends on the readiness for dialogue of workers and employers or, as he put it, otherwise all government efforts will be futile.
Russian Ambassador to Montenegro Jakov Gerasimov said in Podgorica that the Russian investors who bought the Montenegrin company does not plan to leave Montenegro. Gerasimov said that both Russia and Montenegro decided to accept the laws of market economy, whose principles are based on profits and that the economic crisis is "solely to blame" for the current situation.
"I think that all these situations and dissatisfaction of workers are resulting from economic reasons, and I expect that with the help of the state all of this will be quickly resolved," Gerasimov said, adding that Russian investors like the Central European Aluminum Company (CEAC) Russian tycoon Oleg Deripaska and the Mirax Montenegro have worked out. " Tanjug Source:;

Gas subsidies hurt supply and demand
Zawya - 31 May 2010
Subsidies on gas in the GCC and the Middle East are upsetting the demand-supply equation and hampering new projects, a top oil executive said a recent conference in Dubai.
"When you have subsidies then you have a higher demand. The subsidies have a negative impact on the economics of a project.
"On one hand it creates additional demand, and on the other it makes it tougher for the gas company to operate," said Hamid D Jaffar, Chairman of Crescent Petroleum.
"Even the national oil companies will look into the economics of the subject before proceeding ahead," he said.
Gas in the region is used for household consumption and as a feedstock for petrochemical plants, aluminium smelters and other industries. The demand for gas has therefore been rising as population in various countries rise and as industries enhance their production.
This has led to a gas shortage in the region where two countries - Iran and Qatar - with two of the highest gas reserves in the world are located. Saudi Arabia, which has ample gas reserves and now sources gas that it earlier flared in its oil fields, sells it to its customers at $0.75 per million British Thermal Unit (mmBTU).
Gas in the international markets was priced at $4.01 per mmBTU yesterday. Even worse is the condition of a country such as Iran, which sits on the second-largest gas reserves in the world, but still is a net importer of gas.
Nader H Sultan, Chairman of Ikarus Petroleum Industries, which has subsidiaries in Saudi Arabia that produce petrochemicals, said the primary problem for companies that need gas as a feedstock is not the price but whether they will be able to secure additional supplies. "However, we have no problem for our industries that are already operating."
Natural gas use in the Middle East is expected to more than double in the next 20 yeasrs as compared to the levels in 2003, according to the US Energy Information Administration (EIA).
Oil-exporting countries in the region have deliberately expanded domestic natural gas use to make more oil available for export. Gas producers such as Qatar are also developing projects to turn their gas resources into ready cash, as part of economic diversification, notably through liquefied natural gas (LNG) and gas-to-liquids (GTL) projects, as well as increasing petrochemical production.
By Shashank Shekhar
© Emirates Business 24/7 2010

China details 2010 metals capacity closing plan
SteelGuru - May 30, 2010
Reuters quoted the Ministry of Industry and Information Technology said China, the world top producer of steel and some base metals will close down more outdated metals production capacity this year.
China has said it will close a total 300,000 tonnes of copper smelting capacity, 600,000 tonnes of lead and zinc capacity, 800,000 tonnes of aluminium capacity and millions of steel capacity under a three year plan which started last year to reduce overcapacity and cut down pollution.
China has pledged to cut the amount of carbon dioxide produced from each unit of economic growth by 40% to 45% by 2020 compared with the 2005 level.
According to the report posted on the central government web site ( and the ministry web site ( which said the closed capacity details were given in a two day meeting starting this year that Beijing target is to shut down outdated capacity of 339,000 tonnes of aluminium, 117,000 tonnes of copper smelting, 113,000 tonnes of zinc and 243,000 tonnes of lead.
It said some 8.25 million tonnes of outdated steel capacity, 30 million tonnes of iron production capacity, 21.27 million tonnes of coke capacity and 1.44 million tonnes of ferroalloy capacity would also be closed this year.
(Sourced from Reuters)

Antam seeks $169m loan to finance alumina project
Jakarta Post - 05/31/2010
State mining firm PT Aneka Tambang (Antam) is seeking US$169 million bank loans to finance its chemical grade alumina project in Tayan, West Kalimantan, the company's president director has said.
"We have been in talks with JBIC *Japan Bank for International Corporation* and several commercial banks," Antam's president director Alwin Syah Loebis said last week.
The project aims at processing bauxite to alumina. Antam and its partners, Japanese companies Showa Denko and Marubeni Corp, have formed joint venture company PT Indonesia Chemical Alumina (PT ICA) to manage the project. Antam holds a 65 percent participating interest in PT ICA, while Showa Denko and Marubeni hold the remaining 35 percent.
The project needs as much as $400 million in investment. As Antam holds a 65 percent stake in the project, the company must contribute as much as 65 percent of the needed amount or $260 million.
Alwin confirmed that, up to 65 percent of the $260 million or $169 million would be financed by Antam through bank loans. "We expect to complete the financing process this year," he said.
PT ICA has selected a consortium of the Wika Group comprising PT Wijaya Karya, Tsukishima Kikai Co. Ltd. and PT Nusea to undertake the engineering, procurement, and construction (EPC) contract for the project.
"The construction is expected to start at the beginning of next year," Alwin said. Antam expects the project to begin commercial operations in 2014.
Aside from the alumina project, Antam is also preparing another bauxite processing facility in Mempawah, also in West Kalimantan. This project requires up to $900 million in investment. Antam will team up with China's Hangzhou Jinjiang Group. "We expect to sign the agreement soon," Alwin said.
He added that the two bauxite projects were part of Antam's effort to comply with the regulations under the new mining law ordering mining companies to refine ore before exporting it by 2014 at the latest.
"We expect that, by the time that producing raw ore is prohibited in 2014, we can start producing alumina from West Kalimantan," Alwin said.
Despite the two bauxite projects, Antam's main commodity production is still focused on nickel and gold. The company plans to boost its ferronickel production from 12,000 tons in 2009 to 18,500 tons in 2010. Antam also said it would increase its gold production from 2.6 tons in 2009 to 3 tons in 2010.
The Indonesian government holds 65 percent of Antam shares, while private investors hold the remaining 35 percent.
The company booked net profits of Rp 604.3 billion in 2009 and has agreed to pay as much as 40 percent of its net profits as dividends for its shareholders.

BHP Billiton, Eskom Agree on Supply for Mozal Smelter
BusinessWeek - May 30, 2010
By Nicky Smith
May 30 (Bloomberg) -- BHP Billiton Ltd., the world’s biggest mining company, and Eskom Holdings Ltd. agreed today on an amended power supply contract for the Mozal aluminium smelter in Mozambique as losses by the utility threaten the region’s future power supply.
“Discussions relating to the contracts for the supply of electricity to the Hillside and Bayside smelters in South Africa will continue over the coming months with the intention of concluding binding agreements” before the end of the 2010/11 financial year, the companies said in a joint e-mailed statement today.
The contracts with the state-owned power utility are partly based on the price of aluminum and currency rates. A new accord “may involve BHP Billiton assuming responsibility for the commodity pricing and currency-exchange risks related to the contracts, which would in turn reduce the volatility of Eskom’s earnings and improve its balance sheet,” the Melbourne-based BHP said in April.
The agreement “removes the impact of embedded derivatives on Eskom’s balance sheet, as well as all onerous conditions,” Eskom’s Acting Chairman Mpho Makwana said in the statement. BHP smelters in South Africa and Mozambique use as much as 2,150 megawatts of power, equivalent to more than 5 percent of installed capacity operated by Eskom, which supplies almost all of South Africa’s electricity.
The utility, struggling to fund a 460 billion rand ($64 billion) expansion program, posted a 9.75 billion-rand net loss in the fiscal year ended March 31, 2009. South Africa ran out of power in January 2008 after decades of over capacity and a failed reorganization of power utility stalled new investment.
Eskom is also in talks with Anglo American Plc over a deal.
--Editors: Hellmuth Tromm, Nicky Smith.

Alcoa boss wants aluminum plant in Arctic Norway
Barents Observer - 29 May 2010
Outgoing Executive Vice President of aluminum giant Alcoa, Bernt Reitan, confirms that his company wants to build an aluminum plant in Finnmark, northern Norway. The great gas resources in the Barents Sea is what makes the region interesting, he says.
In an interview with Norwegian newspaper Dagens Nęringsliv, the prominent business leader says Alcoa would be interested in building a new plant with an annual capacity output of 350,000 tons of aluminum on the coast of the Barents Sea. That is about the same size as the plant built by the company three years ago at Iceland.
-The further north, the more gas, Reitan says. –Finnmark would be perfect for the building of a gas power plant and an aluminum plant, he adds. He maintains that Norway has world-leading experiences within aluminum production and that the country remains a priority area for the company.
Alcoa is not the first company eyeing new aluminum production in the Barents Region. A few years ago, the Norsk Hydro company reportedly offered Russian authorities investments in a new plant in the Kola Peninsula in return for a stake in the Shtokman gas field.
The company did get shares in the gas project, but only after it had merged its petroleum unit with Statoil. However, the aluminum part the company continued to show interest in a new aluminum plant in the region, and in late 2008 held meetings with regional authorities on the issue.
Alcoa, which today owns two plants in Norway, one in Lista and one in Mosjųen, might the first company to use Arctic gas to fuel its aluminum production.
A new plant in northern Norway would cost an estimated 1.5 billion USD. In addition comes the construction of a gas power plant with a value of about one billion USD.
Mr. Reitan believes Norwegian authorities are too passive in the promotion of new industry. –Norway is in a unique position in the economic crisis now troubling big parts of Europe. We [Norway] face fantastic opportunities. If the politicians want, he adds.

Contract talks under way between Alcoa, USW
BusinessWeek - 28 May 2010
Representatives of Alcoa Inc. and its largest union are hoping to reach tentative agreement on a new contract covering thousands of employees before the Memorial Day weekend ends.
Alcoa and the United Steelworkers Union are negotiating several key issues, ranging from health-care benefits to a compensation plan for new employees that differs from the existing wage package.
"We're working hard to get an agreement and we certainly believe that we can get it done by Monday night," Jim Robinson, director for USW District 7, said in an e-mailed statement Friday.
The last time the steelworkers union went on strike at Alcoa was in 1986.
The current contract, which expires at midnight Monday, covers about 5,400 employees at 10 facilities in Texas, Arkansas, Washington, Tennessee, Indiana, New York, Iowa, and North Carolina.
Negotiations began in mid-April.
Alcoa spokesman Kevin Lowery said the parties are talking about several topics: "When you're negotiating, it evolves."
Alcoa outlined three key issues on a website dedicated to the talks: health care, compensation and workplace flexibility.
Alcoa has proposed a health-care program that offers employees a series of options. Robinson said this week that the changes as initially proposed would "dramatically increase" the employees' costs and provide fewer benefits.
Alcoa also proposed a compensation package for new employees that would offer the same wages but exclude retiree medical benefits and include fewer instances in which wage premiums would be paid.
The third proposal seeks to make some operational practices more flexible, such as adjustments in work schedules and staffing levels.
The discussions come as Alcoa, which was battered during the recession when demand dried up for aluminum, is seeing market conditions improve. The company eliminated thousands of jobs, curbed production and sold businesses.
Based in Pittsburgh, it expects to benefit this year from a rebound in global automotive production and has forecast a 10 percent increase in worldwide aluminum consumption.
Alcoa has about 59,000 employees in 31 countries.

Gov says Boguchanskaya hydro plant won't launch in 2010
HydroWorld - 28 May 2010
Russia's Boguchanskaya hydropower plant is not expected to be launched in 2010, Lev Kuznetsov, governor of the Krasnoyarsk Region, told reporters Friday.
Previously, the first three of the plant's nine units were scheduled to be launched in late 2010.
The construction of the Boguchanskaya GES in the Krasnoyarsk Region is being financed by hydropower producer RusHydro and aluminum maker United Company RUSAL.
Copyright 2010 Prime-Tass Business News AgencyAll Rights Reserved

Alcoa Says Norway Needs Competitive Power Agreements
BusinessWeek - May 27, 2010
Alcoa Inc., the largest U.S. aluminum producer, said the government of Norway must support “globally competitive” power contracts to draw additional investments in the industry.
Alcoa has two aluminum smelters in Norway, where power agreements will expire after 2020, Kevin Lowery, a spokesman for New York-based Alcoa, said today in a telephone interview.
With government support for power, the company could consider additional investments in Norway along the lines of a smelter the company recently built in Iceland, the Oslo-based newspaper Dagens Naeringsliv reported today, citing Alcoa Executive Vice President Bernt Reitan. Such a plant may involve an investment of 10 billion kroner ($1.53 billion), have a capacity of 350,000 tons and may be located in Finnmark in the north, the paper said, quoting Reitan.
“First things first, we need to repower our existing plants,” Lowery said in response to questions about Reitan’s remarks. “If we do that, then we would consider investment in additional assets.”
Alcoa’s existing smelters in Norway have combined annual capacity for 282,000 metric tons of aluminum, or 5.9 percent of the company’s global total, according to Alcoa’s 2009 annual report published in February.
Alcoa rose 57 cents, or 5.1 percent, to $11.82 at 4 p.m. in New York Stock Exchange composite trading. The shares have fallen 27 percent this year.

Novelis to Invest $300 Million to Expand Rolling Operations in Brazil
PRNewswire 27 May 2010
ATLANTA, May 27 /PRNewswire/ -- Novelis announced today that it will invest approximately $300 million to expand its aluminum rolling operations in Pindamonhangaba, Brazil, in response to the growing demand for its products in South America.
The expansion will increase the plant's capacity by more than 50 per cent to over 600,000 metric tonnes of aluminum sheet per year. The project, which includes the addition of a third cold rolling mill, a new ingot casting center, a new pusher furnace for the hot rolling mill and various ancillary improvements, is expected to come on stream in late 2012.
"We are experiencing strong demand for our products in South America, particularly for beverage can sheet," said Phil Martens, President and Chief Operating Officer, Novelis Inc. "Growing per capita income and changes in consumer behavior are driving double-digit growth in demand for beverage cans. Many of our South American customers are accelerating their investments in can making plants and our expansion at Pindamonhangaba will allow us to stay ahead of that demand."
According to Abralatas (Brazilian Association of Highly Recyclable Cans Manufacturers), can sales in Brazil grew by 11.7 percent in 2009, representing a consumption of 14.8 billion units or 40.5 million aluminum cans per day.
"This is the largest single capital investment Novelis has made since the company was launched five years ago," said Martens. "This is a reflection of the company's strengthened financial position, enabling us to make significant strategic investments to support future growth."
Novelis is the leading producer of flat rolled aluminum products in South America. The Pindamonhangaba facility is an integrated hot rolling, cold rolling and recycling complex located in the state of Sao Paulo mid-way between the major cities of Sao Paulo and Rio de Janeiro. Novelis also operates a foil mill at Santo Andre, Brazil, two aluminum smelters at Ouro Preto and Aratu, and nine hydroelectric plants located throughout the state of Minas Gerais.
The aluminum can is also a recycling success story in Brazil where the recycling rate is currently estimated at better than 91 percent, placing Brazil among the world leaders in beverage can recycling. Novelis is South America's largest recycler of cans, processing about 8 billion cans in 2009, providing both economic and environmental benefits.
"Novelis has had a long and mutually beneficial presence in Brazil," said Alexandre Almeida, Senior Vice President of Novelis Inc. and President, Novelis South America. "This investment is further evidence of our commitment to the region and our continued partnership with Brazil as it grows in economic prosperity."

Alutrint in limbo
Trinidad & Tobago Express - May 27th 2010
The future of the Alutrint aluminium smelter at La Brea - one of the country’s largest single investments - will be decided by a new government that campaigned on a promise of ’no smelter will be built’.
Whether the $3.2 billion project, stalled because of a High Court injunction, will be abandoned or not is a decision energy experts are waiting on as they remain unsure about the oil and gas policies of the People’s Partnership.
The status of an industrial port under construction at Claxton Bay, an industrial island in the Gulf of Paria and a steel complex, is also unknown.
A port and power plant are being built on the Union Industrial Estate, La Brea, in support of the smelter.
But Prime Minister Kamla Persad-Bissessar and electoral candidates Errol McLeod, Winston Dookeran, and Ernesto Kesar previously said that smelter projects would not be pursued.
The new administration has been given some time because of the court action.
In June 2007 a judicial review application was filed challenging the Environmental Management Authority’s (EMA) decision to grant a Certificate of Environmental Clearance (CEC) to Alutrint for the smelter’s construction.
The challenge came from the Peoples United Respecting the Environment, and the Rights Action Group.
The High Court injunction stopped the project.
The case was argued in the Appeal Court, with the EMA warning of catastrophic consequences - financial, environmental and social - should the order be allowed to stand.
Anti-smelter activist and university professor Wayne Kublalsingh said his group met with coalition members separately ’and they have given the assurance they will stop the smelter or halt the process and re-evaluate it’.
Dr Kublalsingh said his group was asked to come up with alternative plans for the smelter site, but there was no objection to the power plant or port.
’We are developing plans for 500 acres of arable land that (steel company) Essar was supposed to build on,’ he said.
A fisheries plan is also being developed for the Claxton Bay area, he added.

Employers: Health Insurance Coverage To Remain, But Costs May Rise
Kaiser Health News - May 26, 2010
Business Insurance reports that, in the wake of health reform, 88 percent of employers "responding to a Towers Watson & Co. survey said they definitely or likely will continue providing coverage to employees. Just 3% said they are likely to drop coverage and instead pay the annual $2,000-per-full-time-employee penalty that starts in 2014. The remaining 9% said they haven’t yet decided what to do as a result of the change in federal law." Forty-three percent said they would reduce or revoke retiree coverage. "One key reason that employers may eliminate or reduce retiree coverage is that there won't be the same need by retired workers, especially those not yet eligible for Medicare, because of the new law. .... 89 percent of employers surveyed say the law will reduce the number of uninsured, and 56 percent say it will improve access to care" (Geisel, 5/25).
The Associated Press adds that the "benefits consultant surveyed 661 companies this month and found that 94 percent of those that responded believe the reform law passed by Congress earlier this year will raise costs. Eighty-eight percent plan to pass the increases on to employees, and 74 percent anticipate reducing health benefits and programs." A Towers Watson executive said employees should approach the finding with this perspective: "You've got coverage now, you're likely to continue to have it through your employer, and it's something you want to monitor over time" (Murphy, 5/25).
Meanwhile, Bloomberg Businessweek reports on possible benefits changes at Alcoa: "Alcoa, the country's largest aluminum maker, and the union are in talks to replace a labor accord covering almost 6,000 workers at 11 plants across the U.S., which expires May 31. ... The company revised lower its health-care proposal to bring the cost of comprehensive family coverage [under its non-union plan] to about $272 a month, [Company spokesman Kevin] Lowery said. Comprehensive family coverage will rise to about $315 a month under Alcoa's plan, from $87 now" for union workers (Lococo, 5/26).
This is part of Kaiser Health News' Daily Report - a summary of health policy coverage from more than 300 news organizations. The full summary of the day's news can be found here and you can sign up for e-mail subscriptions to the Daily Report here. In addition, our staff of reporters and correspondents file original stories each day, which you can find on our home page.

Norsk Hydro mulls over EUR 371.4m investments in hydropower - report
HydroWorld - 25 May 2010Norwegian aluminium major Norsk Hydro ASA (OSL:NHY) plans to invest between NOK 2 billion (USD 304.2m/EUR 247.6m) and NOK 3 billion in new hydropower projects in Norway in the next five to six years, the company's head of energy Ola Saeter told business daily Dagens Naeringsliv (DN) today.
The company has not made any special investments in hydropower in Norway over the past couple of years due to the financial crisis and the strong decline in demand for aluminium, according to Saeter. Now Norsk Hydro identified several profitable power projects.
Currently, Norsk Hydro is the second biggest hydropower producer in Norway with a production of 9.4 TWh annually. However, this is not sufficient to cover the company's needs. At full capacity, Hydro needs 14 TWh to meed the demand of its domestic aluminium production. The aim is to raise own energy production by 1 TWh.
(NOK 1.0 = USD 0.152/EUR 0.124)
Copyright 2010 AII Data Processing Ltd.All Rights Reserved
ADP News Nordic

Africa should eye tax hikes on resource firms-study
Reuters - 24 May 2010
Contract reviews unlikely to scare off investors-study
* Chinese presence is chance to improve returns
* African countries should widen tax base
By Mark John
DAKAR, May 24 (Reuters) - African states should consider renegotiating unfavourable contracts with multinationals to ensure they get a fair return on their natural resources, a joint OECD/African Development Bank study urged on Monday.
The growing presence of companies from China and other emerging countries on the continent also gives governments the chance to reap higher rewards from mineral, energy and other resources by putting them to competitive bidding, it said.
"Where multinational firms fail to abide by minimal corporate governance standards in terms of tax contributions, governments should consider renegotiating concessions," the report to the Bank's annual meeting argued.
"African states are entitled to receive a fair deal for the exploitation of their natural resources," it concluded.
The proposal was one of several made in a joint paper by the bank and the Paris-based Organisation for Economic Co-operation and Development aimed at gradually weaning the continent off foreign aid by boosting tax and other domestic revenues.
The lack of transparency surrounding many resource contracts in Africa and the fact that many of its governments have little experience in negotiating production agreements and tax regimes mean their terms vary wildly.
The report said some African governments were often hesitant to revisit unfavourable contracts and tax arrangements for fear of scaring off investors, but said that was unlikely to happen.
"Multinational enterprises may threaten to leave but they are unlikely to actually abandon the exploitation of mines because of a reasonable rise in taxes or royalties," it said.
To the alarm of some potential investors, several mineral-rich countries have already made it clear they want to see more revenues from their resource sectors.
Following a sector-wide review of contracts in its lucrative mining sector, Democratic Republic of Congo has demanded changes to U.S.-listed Freeport-McMoRan's (FCX.N) agreement for its Tenke Fungurume copper and cobalt mine.
Guinea's current government argues Russian aluminium company UC RUSAL (0486.HK) underpaid for its Friguia alumina refinery in 2006 and is seeking $860 million in what it says are unpaid taxes, a claim RUSAL disputes.
Ghana, Africa's second largest gold producer, has said it wants to double mining royalties, and Sierra Leone hiked royalties in the mining sector late in 2009.
For new contracts, the report called on African governments to take advantage of the growing demand for their resources by emerging economies to get the best deal possible.
"Increased interest in Africa's minerals from Chinese corporations and other new partners is an opportunity for governments to reap the fiscal rewards of competitive bidding. African states must use this opportunity to generate higher public resources," it said.
While urging governments to improve taxation of their extractive industries, the report called on them to widen and diversify the typically narrow tax bases across the continent.
While Equatorial Guinea was able in 2008 to collect $4,865 per capita in tax -- largely in oil proceeds -- others such as Burundi, Congo, Ethiopia and Guinea-Bissau have an annual tax take per head as low as $11, it calculated.
Options included targeting wealthier Africans with specific levies such as urban property taxes, road tolls or luxury good taxes, it argued, acknowledging many such moves would likely be opposed by influential elites.
(Editing by Richard Valdmanis)

China Becomes Net Aluminum Exporter for First Time Since 2008
BusinessWeek - 24 May 2010
May 24 (Bloomberg) -- China, the world’s largest aluminum producer and user, in April exported more of the metal than it imported for the first time since the end of 2008 as supply outpaced demand.
Outbound shipments rose to 48,546 metric tons, exceeding imports of 28,987 tons, according to data from the Beijing-based Customs General Administration. Foreign shipments totaled 2,212 tons in March and 118 tons in April 2009.
China’s aluminum production capacity will expand 20 percent this year, Neil Buxton, managing director at London-based researcher GFMS Metals Consulting, said May 21. Stockpiles monitored by the Shanghai Futures Exchange have climbed almost 65 percent this year to a record 489,495 tons.
“Consumption in China is also strong, but not enough to absorb the growth in domestic production,” Buxton said.
Output of aluminum, used in industries from aerospace to packaging, will exceed consumption by 1.5 million tons this year, according to a Royal Bank of Scotland Group Plc forecast. That would be a fourth consecutive year of oversupply.
Chinese exports of the metal will probably remain elevated even after some output cuts linked to higher local power prices, Buxton said. Rising physical premiums in Europe, Japan and the U.S. gave Chinese exporters an incentive to sell more metal overseas, he said.
European premiums paid for aluminum jumped to $105 a ton in Rotterdam, the highest in at least a decade, according to London-based researcher CRU. In the U.S. Midwest, the premium advanced to the highest since 2005. The premiums are added to the price of metal for immediate delivery on the London Metal Exchange.
“We believe that the domestic market currently remains in an oversupplied situation,” Kevin Norrish and Gayle Berry, analysts at Barclays Capital in London, said in a May 21 report. Production expansion may slow because of rising costs and tighter environmental legislation, they said.
--Editors: Dan Weeks, Stuart Wallace
To contact the reporter on this story: Chanyaporn Chanjaroen in London at
To contact the editor responsible for this story: Stuart Wallace at

Rio says tax is top sovereign risk worldwide
Sydney Morning Herald - May 24, 2010

Global miner Rio Tinto says it is reviewing all investments in Australia due to the proposed resource super profits tax (RSPT), describing the country as its No.1 sovereign risk concern.

Australia, which accounts for the bulk of Rio's revenue from iron ore, coal and other commodities, had been considered a top safe-haven investment destination for miners hunting the raw materials to fuel Asia's growth.

But plans by Prime Minister Kevin Rudd to introduce a 40 per cent tax on miners' so-called super profits has sparked high-stakes political battle ahead of a general election later this year.

"This is my No.1 sovereign risk issue on a global basis," chief executive Tom Albanese told reporters today, noting that the tax had set up the prospect of a long period of uncertainty which was corrosive to new investment.

Mr Albanese's remarks were seen as adding pressure on Canberra to scrap or alter the plan as government representatives enter a second week of industry consultations. Separate meetings late last week with Rio and BHP Billiton yielded no modifications.

Rio Tinto's most immediate investment plans will require about $US10 billion to increase iron ore production by 50 million tonnes in the Pilbara region of the state of Western Australian.

"The issue is the potential magnitude of the change this tax will bring about and that has heightened concerns of sovereign risk here in Australia," said Wilson HTM analyst John Young.

Mr Rudd unveiled the tax earlier this month, arguing the government was not receiving its fair share of the resources boom, which helped the economy avoid recession during the global financial crisis.

"There will be many many many statements, by many, many companies, all of whom may have this in common. They don't want to pay more tax," Mr Rudd said in parliament today. "This government believes the time has come for tax reform, which delivers a fair return for all Australians."

The treasurer, Wayne Swan, in a television interview on Sunday said Australians were being "short-changed" by the miners under the existing tax regime.

An online opinion indicated tentative public support for the mining tax. The Essential Media poll found 43 per cent of 1044 respondents supported the tax and 36 per cent were opposed.

"Sovereign risk is typically assessed through surveys of mining executives such as Tom Albanese, so you may see this reflected in Australia becoming higher risk," said Stephen Bartrop, portfolio manager for LimeStreet Capital Australian Resources' Hi-Alpha Fund.

Mr Albanese said he was bracing for a "worst-case" scenario if the tax is introduced as planned in 2012.

"We'd be asking our managers to evaluate it on a worst-case basis," he said, adding that capital would shift in the meantime to other exploration hot-spots such as Canada.

Rio Tinto is conducting exploration work in 30 countries, including Guinea, Madagascar, parts of South America and North America, Russia and Mongolia as well as Australia for everything from copper, diamonds and gold to bauxite, iron ore and coal.

"The proposed resources super profit tax has in a short time created a significant amount of angst for all Australians," Simon Bennison, chief executive of the Association of Mining and Exploration Companies in Australia said.

Daniel Manley, a stocks dealer at broker Burrell & Co, said the mining tax was undermining market sentiment.

"That sort of sovereign risk that is now associated with Australia is weighing heavily," said Mr Manley.

Not on today’s sharemarket though, as shares in Rio rallied 3.5 per cent, outperforming a 2 per cent rise in the general market.

The tax won the support of the head of the Organisation for Economic Cooperation and Development (OECD), Angel Gurria, who said on ABC radio over the weekend the 40 per cent tax on mining companies is justified.

Mr Albanese dismissed government claims that Australia held limited resources for mining and that now was the time for the country to reap as much revenue as it could from the sector.

"I've heard arguments over the past two weeks that say the resources are ultimately finite in Australia and there needs to be as much of a slice of that pie grabbed as possible while you can. I don't think this is true," he said.

Saudi-Alcoa alum JV awards $453 mln in contracts
Reuters - May 23 2010
RIYADH, May 23 (Reuters) - State-controlled Maaden (1211.SE) on Sunday said it
awarded contracts worth $453 million for its planned Saudi-based aluminium joint-venture with Alcoa Inc (AA.N).

Maaden, also known as the Saudi Arabian Mining Co, said in a statement that a $202 million contract went to U.S.-based Fluor Corp (FLR.N) and WorleyParsons (WOR.AX) for the supervision, engineering and procurements of the complex's alumina refinery to be completed by December 2014.

Fluor Corp also won another $177 million for engineering works, procurements and supervision of the construction of the complex's rolling mill before the end of 2013, it added.

Fluor Arabia Ltd, the Saudi affiliate of Fluor Corp, was awared a $74 million contract for management of services at the complex and engineering works and supervision of infrastructure at the site, Maaden added.

On May 2, Maaden said Swiss-based ABB (ABBN.VX), U.S.-based Fluor Corp (FLR.N) and WorleyParsons (WOR.AX) have won the first contracts for its $10.8 billion aluminium joint-venture.

Maaden did not disclose the value of another contract it awarded to Swiss-based ABB (ABBN.VX) to deliver electric power to the aluminium smelter. (Writing by Souhail Karam; Editing by Dinesh Nair)

Brazil could become net aluminum importer by 2014 - Mr Garcia
SteelGuru - May 22, 2010
BNamericas cited Professor Fernando Garcia as saying that without new investments to boost domestic production, Brazil could become a net importer of aluminum by 2013 to 2014, when consumption is expected to surpass the country's installed capacity.
Professor Fernando Garcia said during the 4th international aluminum congress in Sćo Paulo that "By the 2016 Olympics, we could see Brazil returning to the situation of the 1960s, when the country was a net importer of aluminum.
He pointed out that the domestic production of semi finished aluminum products has grown faster than several economic sectors in Brazil but there is an urgent need to expand capacity in order to supply increasing demand over the coming years.
According to Mr Garcia's estimates, annual aluminum consumption will grow 6.6% to 9.1% through 2020 but imports could exceed exports much earlier than that.
National aluminum association Abal forecasts that domestic consumption will rise 21% in 2010 to 1.2 million tonnes. Mr Adjarma Azevedo president of Abal said at the congress that local consumption could reach 2 million tonne per year by the end of the decade, while the country's installed capacity is only 1.6 million tonne per year.
Mr Mauro Moreno coordinator economy and statistics of Abal previously said that in 2010, aluminum import volumes are forecast to increase 47% to 236,900 tonnes compared to 161,200 tonnes last year and exports are forecast to total 743,200 tonnes down 19.3% from 921,400 tonnes.
While Brazil's aluminum industry is threatened by the possible lack of supply, companies complain that energy costs and the tax burden make new investments unfeasible.
Mr Alexandre Almeida president of Atlanta based Novelis pointed out that the main challenge to invest in Brazil is energy supply, which is much more expensive than in other countries. The executive, also speaking at the congress agreed with Garcia and forecasts a shortage of aluminum on the domestic market by 2013.

According to Mr Almeida, imports could increase through several forms from aluminum sheets to finished products, such as air conditioning equipment. He added that recycling is one form of mitigating the problem but it's not the final solution.
(Sourced from Business News Americas)

Qatar's new aluminium smelter eyes peak output
GulfNews -May 23, 2010
With a capacity of 585,000 tonnes a year, Qatalum has set its sights on taking on Dubal and Bahrain's Alba as a global player in value-added aluminium products.Image Credit: Supplied pictureDubai: With global aluminium prices expected to hold at the $2,000 (Dh7,346) a tonne-plus level through the year, Qatar's newly commissioned giant smelter is aiming to make a perfect pitch.
It was last month that the $5.7 billion Qatalum plant was formally commissioned with an annual installed capacity of 585,000 metric tonnes of premium quality aluminium ingots.
Since then, shipments have already been made to clients in Europe, Southern Asia and the Far East, as well as to Saudi Arabia.
In fact, Qatalum which expects to touch peak production before the year is out sees a significant buildup in its prospects among a regional clientele over the medium term.
"Certainly, the growth of regional markets especially in the construction industry is fuelling and increasing the appetite for aluminium," said Jan-Arve Haughan, Qatalum chief executive officer.
"If the demand exists in Qatar, Qatalum, with the strategic help of our partners Qatar Petroleum and Hydro, could meet that demand as we are ideally located to do so."
Infrastructure-led project activity continues to tick along nicely in Qatar and much the same can be said about Saudi Arabia.”
Global dominance
If all goes according to the script, it will not be long before Qatalum takes its place alongside regional entities Dubal and Bahrain's Alba as a global player in value-added aluminium products.
Given the capacity of 585,000 tonnes a year, the plant already has the scale to make it happen.
To get its output to a widest possible audience, Qatalum can call on help from Norsk Hydro, the Norwegian supplier of aluminium and aluminium products and a shareholder (along with Qatar Petroleum) in the Qatari smelter.
It was in 2006 that Qatalum was established as a joint venture between Qatar Petroleum and Hydro.
While "Asia and the greater Middle East, together with Europe and North America, form our main target markets for the near future, Hydro is in the process of setting up a regional sales office in Doha to cover the Middle East, Gulf states and southern Africa," Haughan said.
This "could serve as an indication of the future reach of our metal," he added, though unwilling to be drawn into any calculations on potential future percentages coming from each export territory.
Market observers, meanwhile, believe aluminium prices should not have too much trouble staying over the crucial $2,000 a tonne mark.
After touching $2,620 a tonne in 2008, it did hit a hurdle last year dropping more than 20 per cent. The slide has since corrected and analysts believe aluminium prices should average $2,160 a tonne this year.
Even otherwise, Haughan is bullish on the metal.
"The long-term forecast for the industry is positive. Qatalum's products will be used by the manufacturing and construction industries and historically we have seen aluminium consumption has developed somewhat better than the GDP, and more precisely, better than the average industrial production," Haughan said.
"This is probably the best indicator for understanding and predicting the market."
Most of the output will take the form of value-added products, extrusion ingots and foundry alloys.
The manufacturer has a long-term marketing and sales agreement with Hydro, which allows it "to go straight into the products market," Haughan said.
"The primary aluminium from Qatalum will be taken to market by an experienced sales force, ensuring high-quality aluminium will end up in lightweight transportation, consumer goods, construction, and consumer industries, among others," Haughan said.
"And at the end of a product's lifecycle, it can be recycled indefinitely."
Downstream potential
Qatalum — and its strategic location in Mesaieed Industrial City — should create downstream potential for allied industries as well. Haughan reckons as much."The potential is amotiv expectations and we are delivering as was committed."
Price Correction
As with other commodities, aluminium prices did not emerge unscathed from the recent volatility induced by the euro uncertainties.
"After a high of almost $2,500 (a tonne) in mid-April, prices have come down sharply but are now stabilising above the $2,100 mark," said Tobias Merath, vice-president and head of commodity research at Credit Suisse.
"We attribute the correction mostly to the liquidation of existing long positions amid fading risk appetite," he said.
"On the fundamental side, consumption-related indicators are pointing toward improving demand conditions," he said.
"Although the aluminium market seems to be abundantly supplied... financing deals are reportedly tying up significant volumes of exchange inventories, limiting the physical availability of the metal," he added.
"Nevertheless, aluminium remains the most excessively supplied base metals market with no signs of a slowdown in restarts of idled capacity. Based on a supportive macro-economic recovery scenario, we expect to see moderately higher prices over the one-year hinanciarul - 2
Alro Slatina aluminium manufacturer (west of Bucharest) recorded a Q1 2010 net profit of RON 50.526 million, up by 85 percent from Q1 2009, according to data submitted to the Bucharest Stock Exchange (BVB).
The net turnover amounted to RON 414.16 million, 6.46 percent higher than the one recorded in Q1, 2009 of RON 389 million. The total revenues amounted to RON 469.885 million (plus 25.28 percent), while expenditure totalled RON 408.184 million (plus 17.39 percent).
Alro, the largest aluminium manufacturer in Central and Eastern Europe, provided a total production of electrolytic aluminium of 228,000 tonnes and carried out an investment programme of 15.28 million US dollars.
The budget was submitted for approval to an extraordinary General Shareholders’ Meeting of April 30. Together with its budgetary investment in its alum refinery, Alum Tulcea, amounting to 6.39 million US dollars, the total value of the company’s 2010 investment in the two facilities will near 21.6 million US dollars.

Part of Kaiser plant may reopen
Spokane Journal of Business - 21- May 2010
Ormet Corp., a Hannibal, Ohio-based aluminum producer, says it has agreed tentatively to buy the shuttered former Kaiser Aluminum Corp. Mead Works smelter and plans to reopen the carbon anode facility there if it completes the purchase.
That facility, which occupies a fraction of the sprawling smelter property, likely would reopen within a year, after Ormet does some startup work there, and would employ 75 to 100 people in full-time, well-paying jobs, says Mike Griffin, Ormet's vic...

Aluminum Producers in China 'Losing Money,' May Reduce Output
San Francisco Chronicle - May 21 (Bloomberg) -- Aluminum producers in China are operating at less than the cost of production after domestic prices fell and the government raised power rates for smelters, said Liu Xu, an analyst at China International Futures Co.
All "producers in China are definitely weighing output cuts now," Liu said today. "It's based on how far prices have fallen, without even taking into account that the cost for some producers will increase after the new power rules."
China, the world's largest maker of the metal, said last week it will raise power surcharges for some aluminum companies by as much as 100 percent from June, to curb overcapacity. Aluminum in Shanghai has fallen 13 percent this year and London Metal Exchange prices have dropped 11 percent on concern that Europe's debt crisis may derail the global economic recovery.
Producers in China are probably unprofitable, with an average production cost of 15,300 yuan a ton, said Wan Ling, a Beijing-based analyst at CRU International Ltd. That compares with today's price on the Shanghai Futures Exchange of 15,105 yuan ($2,212), taking this month's fall to 6.8 percent.
"At these prices all aluminum producers in China are losing money," said Jia Zheng, a trader at Soochow Futures Co. "So far we haven't heard of any output cuts yet. Producers will try to maintain output for a long as they can because it is costly and time-consuming to restart idled capacity."
The metal used in cars and airplanes gained 0.4 percent in London to $2,000 a metric ton at 2:26 p.m. in Singapore.
China's measures to raise power charges may affect 6 percent, or 1 million tons of smelting capacity in China, according to estimates by Aluminum Corp. of China, or Chalco, the country's largest producer.
Stockpiles Surge
China is cutting overcapacity as stockpiles of the metal in warehouses monitored by the Shanghai Futures Exchange have jumped 61 percent this year after smelters ramped up output on expectations demand will improve as the global economy recovers.
Higher production costs and weak aluminum prices may force smaller smelters to cut production in the second half, Eric Zhang, an analyst at Shanghai Metals Market, a unit of CBI China Co., said in a report last week.
"Zinc and lead producers will be next," said Jiang Donglin, research department manager at Shenzhen Zhongjin Lingnan Nonfemet Co., the country's third-largest zinc maker.
"The bigger ones that have their own mines are still in the black," Jiang said. "Some of the smaller ones, which have to import concentrate, have already started to operate at a loss and it's only a matter of time before they cut output."
Read more:

Brazil : RUSAL, Brazil company still talking about massive Kurupung hydro project
HydroWorld - 20 May 2010
Interest remains in developing a 3000 megawatt hydroelectricity plant in the Middle Mazaruni with talks about two consortiums involving Russian bauxite company, RUSAL, the government of Guyana and Brazilian electricity company, Electrobras.
In a recent letter sent to Gianfranco Miceli the Director of Business Deve-lopment of Brazilian company, Andrade Gutierrez Con-struction, by RUSAL General Manager Alexey Gordymov, it was stated that the Russian company is ready to further develop the project at Kurupung if certain terms are accepted. This hydro-power project had been floated many times in the past. In the letter dated May 14, which was seen by this newspaper, Gordymov told Miceli that he hoped that their meeting in Miami in March this year was productive and at least the parties could exchange their intentions and recognise how they could move the project forward. He recalled that despite efforts they could not find any amicable solution at the time. He recalled that during the March meeting it was understood that one of the crucial points for Miceli was to get Electrobras to be part of a consortium. He mentioned the building of a smelter. After numerous internal reviews and discussions, they would like to continue dialogue on the main principals, Gordymov said. He outlined six points. According to the letter, Consortium A would be created with three main stakeholders: Electrobras, the Govern-ment of Guyana and Rusal. This consortium would be responsible for developing the Hydropower Plant and distribution of energy , Gordymov wrote. He said the consortium would build a 3000MW hydropower plant which would be done in three phases. He said that the first 1000MW would be sold to Brazil beside what is energy required by Guyana and the second 1000MW (probably less) would go to the smelter. The third 1000MW would be sold to Brazil, he said. He outlined Consortium B which would be created between the government of Guyana and RUSAL for the construction of an aluminum smelter. RUSAL would control the consortium . According to the letter, Consortium B has a right to declare an option to use energy in the second phase of up to 1000MW in case smelting capacity will be built before commissioning 2nd phase . Such an option has to be declared no later than six months after the commissioning of the first phase, Gordymov outlined. He said that if this option is not declared by Consortium B within that time then Consortium A has a right to use the energy of the second phase at its own discretion. In this case, the third phase will be developed by Consortium A when Consortium B decides that the smelter is needed, according to Gordymov. Copyright 2010 TendersInfo - Euclid Infotech Pvt. Ltd.All Rights ReservedProvided by Al Bawaba

PM: Full speed ahead on smelter
Trinidad & Tobago Express - May 20th 2010
The ruling PNM administration plans to continue construction of the country’s first aluminium smelter at a cost of US$600 million, Prime Minister Patrick Manning said yesterday.
The Government will also push plans to a gas to polypropylene project, the first such facility in the region.
’This US$2.5 billion plant will produce annually 450,000 tonnes each of both propylene and polypropylene and therefore establish the foundations of a major plastics industry in our country,’ he said.
The smelter facility will produce 125,000 tonnes of aluminium annually and will generate the manufacture of products for transportation, industrial and household use, he said.
Manning was speaking yesterday at the opening of the Trade and Investment Convention at the Hyatt Regency Trinidad Hotel, Port of Spain.
’We have also almost completed a petrochemical facility for the production of melamine and urea ammonium nitrate, for the first time in Trinidad and Tobago. This will generate new industries in a wide variety of areas,’ Manning said.
He told local and foreign manufacturers and distributors that two international summits hosted by Trinidad and Tobago last year brought businesspeople to the country from around the world.
’Let me assure you that those meetings were not talk shops and that very tangible business opportunities emerged from them,’ Manning said. ’This is because the Government of Trinidad and Tobago has been very aggressive in creating an environment for the development of the business sector and, in particular, the entrepreneurial and small and micro-enterprise sector.’

Alcoa (NYSE:AA) Seeking Lower Energy Costs
Commodity Surge (blog) - May 20th 2010
To combat their many rivals, Alcoa (NYSE:AA) is implementing a new strategy to cut the cost of energy, which accounts for about 30 percent of aluminum production costs.
High energy costs in Brazil could be their first target, as they're already looking at investing about $3 billion into a new smelter in the country, while closing others where the energy costs are prohibitive for doing business.
Alcoa will probably close their plant in Maranhao first, which has the highest plant costs in the world for them.
They are thinking about building a hydroelectric dam in Para state to lower production cost to become more competitive. The plant in that area is estimated to be able to produce at least 300,000 metric tons of aluminum on an annual basis.
Alcoa has been under pressure lately, and this is a response to competitors who have lower operational costs and higher margins. They're going over their entire company structure to see where they can make production changes like this.
Brazil aluminum production accounts for about 25 percent of the assets of Alcoa.

US trade panel approves aluminum case against China
SteelGuru - Wednesday, 19 May 2010
Reuters reported that US trade panel approved a Commerce Department investigation that could lead to duties on hundreds of millions of dollars of aluminum goods from China.
The US International Trade Commission voted 6-0 that there was enough evidence that US producers of aluminum extrusions used in the auto industry and other sectors have been harmed by the imports to proceed with the probe.
The United States imported more than USD 500 million of the goods from China in 2009. The Commerce Department launched its investigation last month after receiving a petition from US producers complaining of unfair Chinese practices.
The manufacturers have asked for anti dumping duties of roughly 33% to offset what they says are below market prices on the Chinese made product. They also want additional duties to offset Chinese government subsidies. The Commerce Department will set preliminary duties in coming months and final duties within a year or so. The ITC will vote a second time and could strike down any duties.
US construction and automobile industries are two of the biggest consumers of aluminum extrusions, which are made by squeezing heated aluminum into a mold. Uses include doors and window frames, structural framing systems, roofing and exterior cladding. The case follows a number of other US industry complaints against their Chinese competitors and comes just before US Commerce Secretary Mr Gary Locke is headed to China on a trade mission to promote US clean energy exports.
At a briefing ahead of that trip, Mr Locke defended US anti dumping and countervailing duty actions against Chinese charges that they were protectionist.
He said that the US only takes action when an industry files a petition and wins a decision in its favor. Also, less than 3% of US imports from China have been hit by anti dumping or countervailing duties.
(Sourced from Reuters)

Petrobras to build coke plant in KSA
Saudi Gazette - Wednesday, 19 May 2010
JEDDAH - Petrobras signed a preliminary agreement with Saudi outfit Modern Mining Holding Company Limited to undertake an in-depth study of the feasibility of developing, funding, building and operating a calcined petroleum coke (CPC) plant in Saudi Arabia.
CPC is a raw material for the aluminum industry and results from the process of calcining green petroleum coke (CVP). The technique consists of heating the CVP at high temperatures to remove residues.
The plant is expected to be built in Jubail or Raz az Zawr and to process up to 700,000 tons of CPC per year, with CVP provided by Petrobras.
The estimated investment for the project is approximately $450 million, to be financed in equal shares by the partners, with the possibility of funding from government and financial institutions. The plant is forecast to go on stream in the second half of 2012.In 2009, the Petrobras and Modern Mining signed an MoU. - SG

Emir opens $2.3bn power plant
Gulf Times - Wednesday, 19 May 2010
HH the Emir Sheikh Hamad bin Khalifa al-Thani yesterday inaugurated a $2.3bn power plant in Mesaieed Industrial City.
The inauguration ceremony was attended by HE the Deputy Premier and Minister of Energy and Industry Abdullah bin Hamad al-Attiyah, HE the Speaker of the Advisory Council and a number of sheikhs and ministers.
Al-Attiyah said the total expense of the project had reached $2.3bn and it would produce 2,000 megawatts of electricity.
“This is a major leap as economic progress is measured by the production of energy,” he said.
Qatar also plans to inaugurate another plant in Ras Qurtas in the hope of achieving enough production capacity to allow the state to become an electricity exporter.
“We have a very large project, as we are working on building Ras Qurtas station which has a capacity of 2,730 megawatts,” al-Attiyah told reporters on the sidelines of yesterday’s inauguration ceremony.
With both plants online, Qatar will have a surplus that will be used for “projects which depend on energy in their production, such as the aluminium factory,” al-Attiyah said. “Exporting... is on our schedule,” he added.
“We can export 500 megawatts to Kuwait and other Gulf Co-operation Council countries,” said Abdullah Salat, president of the plant’s owner, Masaieed Power Company.
Masaieed was established in 2006 as a partnership between Qatar’s Water and Electricity Company, with a 40% stake and Qatar Petroleum with 20%. The balance is divided between two Japanese firms - Chubu Electric Power with 30% and Marubeni Corporation with 10%.
Qatar’s electricity production capacity is currently 4,200 megawatts, according to official figures. AFP

Alcoa May Build New Brazil Smelter, Shut Down Others
BusinessWeek - May 18, 2010
(Adds comment from Alcoa’s managing director for Brazil in third paragraph, number of Brazil plants in fifth paragraph.)
By Lucia Kassai and Matt Craze
May 18 (Bloomberg) -- Alcoa Inc., the largest U.S. aluminum producer, said it may invest $3 billion in a new smelter in Brazil and shut other units in the South American country because of “prohibitive” energy costs.
Energy costs at its plants in the northeastern state of Maranhao are the highest among Alcoa’s highest worldwide, said the company’s managing director in Brazil, Franklin Feder. Alcoa may build a hydroelectric dam to power the new plant in Para state, which would produce a minimum of 300,000 metric tons of aluminum a year, Feder said.
“The new investment depends on demand and energy costs,” Feder told reporters in Sao Paulo. “Energy costs became prohibitive in Brazil.”
Alcoa, based in New York, is shifting production to low- cost energy sites from Iceland to Saudi Arabia as it seeks to compete with rivals Aluminum Corp. of China Ltd., or Chalco, and Norsk Hydro ASA. Electricity accounts for about one-third of the cost to produce aluminum, used in airplanes and soda cans.
The U.S. aluminum producer operates eight plants in Brazil.
Alcoa fell 1.7 percent to $11.89 at 2:30 p.m. in New York Stock Exchange composite trading. The stock has dropped 26 percent this year.
--Editors: Robin Saponar, Dale Crofts
To contact the reporters on this story: Lucia Kassai in Sao Paulo at Matt Craze in Santiago at
To contact the editor responsible for this story: Dale Crofts at

Alba staff to undergo training in Norway
Trade Arabia - Wed, 19 May 2010
Aluminium Bahrain (Alba) said seven supervisors from its metal production group and the carbon department, will undergo a three-week course at Norwegian University for Science and Technology.
The company said the training comes as part of its commitment to strengthen employees’ knowledge base, and support the company’s development strategy.
Alba’s Human Resources & Training manager, Abdul Rahman Janahi said: "Training is a priority at Alba and is a result of instructions issued by the Alba Board of Directors, and is being consistently implemented."
"The training department is committed to finding suitable training courses in Bahrain and abroad to cope with rapid improvements in technologies as well as new innovations and developments that are being introduced on a regular basis," he noted.
“The training course in Norway was selected amongst many other courses because of its suitability for Alba employees, and for meeting the requirements of the company. We also have a vocational training programme to employ and qualify university graduates, and to prepare and familiarise them with the work environment," Janahi added.
In the first two-weeks of the course, trainees are expected to cover the theoretical side of the aluminium industry while during the third week, they will be attending the Aluminium Industry Conference, said a statement from Alba.
Here they will meet aluminium industry professionals from around the world, learn about the latest developments in the industry, discuss the future of aluminium and identify emerging market demands, it added.-TradeArabia News Service

Worker Self-Management Introduced in Primary Industry Companies in Guayana ... - May 16th, 2010
Merida, – Yesterday president Hugo Chavez swore in a range of directors of state owned companies that comprise the Venezuelan Corporation of Guayana (CVG). The directors were chosen by workers’ working groups and ratified by the president. Chavez also announced a range of measures to further implement the Plan Socialist Guayana, including some nationalisations and eliminating outsourcing.
A range of workers and ministers told the press that it was the first time in CVG history that directors had been nominated by workers, and were workers themselves. CVG includes 15 state-owned primary industry companies in Guayana.
CVG Workers and the government have confronted a range of problems, including corruption, deteriorating machinery, drops in the prices of aluminum and steel, and power shortages. Last year Chavez lent his support to a worker proposed plan for the industries to be directly controlled by workers, called Plan Socialist Guayana, but it has been met by a range of bureaucratic maneuvers to prevent its implementation.
Yesterday, in a ceremony in Alcasa, Chavez was finally able to swear in new directors of some of the companies that make up CVG. They were, Jose China as director of Bauxilum, Jose Mendez for Carbonorca, Elio Sayago for Alcasa, Rada Gamluch for Venalum, Rafael Guerra for Alucasa, Carlos Zzari for Cabelum, Otto Delgado for Alunasa-Costa Rica, and Caros de Oliveira for Sidor.
The new directors swore to completely dedicate themselves against corruption and inefficiency and to productivity and sustainability of each of the companies that form the corporation as well as loyalty to the national government.
A range of ministers and around 600 workers of CVG attended the act.
Workers chose the new directors in working groups that they formed with some of the ministers and sent this list to Chavez, which he approved in its entirety on Thursday.
The executive will take a new approach to the industry, which includes a range of decisions that Chavez announced at the swearing in ceremony.
CVG will reduce the high levels of exportation of primary materials like steel and aluminum, and divert them instead towards local and national projects. Chavez said there needs to be a plan to create companies to process such material in the country.
“The primary material companies in Venezuela were designed just to produce the primary material and hand it over to the international and national private sector so that they could process it and add value, at each stage of the productive chain they were exploiting the workers and speculating with prices,” Chavez explained.
He also ordered that the transport system of the primary material be nationalised. He said that according to studies done during working groups with the workers, the transport system was “one of the main causes of high costs and losses, and a big business for the private companies.”
Chavez motivated a new system of buying and selling in CVG, where, “everything is transparent and not a single cent is lost, because such wealth belongs to the people.”
Another decision is to reduce the levels of dependence on imports such as lime and caustic soda, as well as to talk with state oil company, PDVSA about it buying and nationalising the Venezuelan company Norpro, to then be able to have a direct supply of the chemical propanol.
Chavez also ordered the nationalisation of Matesi, an iron and steel company, and Comsigua, another iron and steel company. The Argentinean owners of Matesi offered the company to the government at a price five times its worth, according to Chavez, and after spending nearly a year negotiating with the two companies, among others, over prices, the government has decided it has no “other alternative but to nationalise them”.
And, as some managers and administrators have been reluctant to provide information required to take some of these decisions, Chavez said, “If some manager or administrator hides information, this is suspicious and should be cause for immediate removal from their position. It’s necessary to defeat such resistance to change.” He warned that some positions are occupied by “enemies of the revolutionary process”.
Chavez also denounced the levels of outsourcing within CVG, where companies like Sidor, paid BsF 423 million ($US 98 million) in 2009 to outsourcing companies, and only 41.34% of this went to the workers’ wages. He said such activity was a way of delivering profits to the bourgeoisie and “leaving us with the losses” and demanded “an end to such a perverse mechanism”.
He called for the creation of a plan that will allow, in the medium term, for the eradication of outsourcing in the area.
Finally, Chavez announced an investment of BsF 432.4 million as well as $125.9 million into modernising a lot of the sector’s machinery. He said this would include renovating and extension of a hospital in the area and improving technology related to electricity supply. He also said the government would pay off BsF 25 million ($US 5.8 million) owed to workers of Ferrominera Orinoco, using a fund created from dividends of the state owned communication company CANTV.
A worker at Alcasa, Alberto Parra, told ABN, “A lot of the managers ...associated with corrupt practices, refused to accept our presence because they know that we bring transparency to the finances, but thanks to President Chavez and the organised working class, our participation in decision making will be stronger and stronger every day.”
“We’re going to construct a great socialist zone here,” Chavez said.
In July last year workers proposed a new model of production based on workers control, which president Chavez supported. He then presented a new plan, “Plan Socialist Guayana 2009-2019” which involved transforming the state owned CVG and its companies into socialist companies. The plan was a result of weeks of discussion among CVG workers and included direct worker control over production, improved working conditions, and public auditing.

Venezuela's Chavez orders expropriation of iron, aluminum makers, transport ... - 15 May 2010
CARACAS, Venezuela (AP) - President Hugo Chavez announced Saturday the expropriation of a group of iron, aluminum and transportation companies in Venezuela's mining region.
Among the expropriated companies is Materiales Siderurgicos, or Matesi, which is the Venezuelan subsidiary of Luxembourg-based steel maker Tenaris SA.
Venezuela's socialist president said in a televised that his government was going to take over Matesi because "we couldn't reach an amicable and reasonable settlement with the owners."
Chavez said production at the company has been paralyzed since midway through last year, when Venezuela's president announced plans to nationalize it.
Chavez said he was also going to expropriate Venezuelan-owned Orinoco Iron and aluminum-maker Norpro de Venezuela C.A., which is an affiliate of the U.S. company Norpro in association with France's Saint Gobain, among other companies.
As well, Venezuela will take over transport companies that ship raw materials in areas southeast of Caracas. He did not name the companies.Since coming to power more than a decade ago, Chavez has nationalized major companies in the electricity, oil, steel and coffee sectors, as well as other private businesses.

Aluminum May Advance as China Ends Discounted Power
BusinessWeek - May 14, 2010, 4:28 AM EDT
By Glenys Sim
May 14 (Bloomberg) -- Aluminum may climb as China, the world’s largest producer, ended discounted power rates to high- usage companies as part of the country’s efforts to conserve energy and resources.
“The cost of producing aluminum will increase and this is bullish for aluminum prices,” Li Yang, an analyst at state- owned researcher Beijing Antaike Information Development Co., said in a phone interview today. Energy represents as much as half the cost of making the metal used in cars, cans and airplanes.
China stopped selling electricity at discounts to high- consumption companies with immediate effect, the National Development and Reform Commission said in a statement yesterday, and the government will impose financial penalties on companies whose power consumption exceeds state-set limits. Users affected by the policy change include makers of aluminum and ferroalloy.
Aluminum for three-month delivery has dropped 3.7 percent on the London Metal Exchange this year as supplies outpaced demand. The metal declined 1 percent to $2,148 a metric ton at 3:35 p.m. in Singapore, while prices on the Shanghai Futures Exchange ended the day at 15,815 yuan ($2,317) a ton, down 9.1 percent this year.
“Higher power prices will support aluminum prices but the gains will be limited because everyone can see how high domestic stockpiles are at the moment,” Wan Ling, a senior consultant at CRU International Ltd., said by phone from Beijing.
Stockpile Jump
Inventories of aluminum in warehouses monitored by the Shanghai Futures Exchange have jumped 61 percent this year as Chinese smelters ramped up production on expectations that demand will improve as the global economy recovers.
“It’s too soon to ascertain exactly how much smelting capacity will be affected by the increase in power prices,” said CRU’s Wan. “It probably won’t be much because the high power consumption smelters make up only a small portion of total production capacity.”
Higher production costs and weak aluminum prices may force smaller smelters to cut production in the second half, said Eric Zhang, an analyst at Shanghai Metals Market, a unit of CBI China Co., said in an e-mailed report today. In Henan, China’s largest producing province, power rates at smelters have been raised by an average 460 yuan a ton since the end of April, he said.
China may add 2 million to 3 million tons of aluminum smelting capacity this year, according to the China Nonferrous Metals Industry Association.
“The profit margins of producers will definitely be affected,” said Antaike’s Li. “Producers will now have to look at their cost structure to see if it’s still profitable to operate, if they have to cut production or shut operations, or if they have to slow down their expansion plans.”
Shares of Aluminum Corp. of China, the country’s largest maker of the metal, lost 3.3 percent to HK$6.96 by 3:59 p.m. in Singapore, down 18.3 percent this year. The benchmark Hang Seng Index in Hong Kong dropped 1.2 percent.
--With assistance from Xiaowei Li and Xiao Yu. Editors: Matthew Oakley, James Poole.
To contact the reporter for this story: Glenys Sim in Singapore at
To contact the editor responsible for this story: James Poole at

UC RUSAL Returns to Black in First Quarter
CNBC - 13 May 2010
Russia's United Company RUSAL, the world's top aluminum producer, returned to the black in the first quarter, boosted by higher aluminum prices and cost cutting, and said it aims to expand in Asia and is close to securing financing for two smelters.
Industry watchers are optimistic about prices of the lightweight metal, which is widely used in the construction, auto and packaging industries, on the back of a recovering global economy.
Aluminum prices have been in a free fall since mid-April dropping 16 percent to a three-month low of $2,056 a ton on Tuesday. But the average price is expected stay above $2,000 per ton this year, up 20 percent from 2009, based on a poll by Reuters.
"UC RUSAL plans to continue our sustainable development by introducing new, efficient aluminum and energy production capacities, reducing operating costs, diminishing our debt and further expanding our presence in Asia," said the company's chairman, Oleg Deripaska, in a statement.
RUSAL, the first non-Asian company to make its primary listing in Hong Kong with its January IPO, had cut its average cash operating costs for aluminum by 23 percent last year to $1,471 a ton.
Global demand for aluminum is expected to rise by 12.6 percent in 2010 after consumption fell 8 percent on the year in 2009, the company forecast.
The company reiterated its previously stated plan to boost aluminum production by 3 percent this year, and alumina production by 11 percent to tap the strength of the metal. It made 3.9 million tons of aluminum in 2009, or about 10 percent of the global output.
To meet growing demand, the company said it is in talks to get project financing for its BEMO and/or Taishet smelters, and expects to receive long-term loan facilities by mid-year.
It said it plans to restart construction of the initial phases of the BEMO and Taishet smelters, with projected capacity of 147,000 tons and 187,000 tons of aluminum per year, respectively, with a target of starting metal production in the third quarter of 2011.
The company posted a net profit of $247 million for the first three months of 2010, compared with a loss of $638 million a year ago, it said in a statement on Friday.
The company said its operating margin was at 16 percent for the first quarter against a negative 14 percent in the same period last year. Aluminum output fell 4 percent to 973,000 tons and output for alumina, the material for aluminium, also dropped 14 percent to 1.8 million tons.
Its Chinese competitor Aluminium Corp of China (Chalco), also reversed losses to post a quarterly net profit.
U.S. aluminum maker Alcoa [AA 12.80 0.34 (+2.73%) ] reported a loss in the first quarter last month, but would have recorded a profit that matched market forecasts after excluding charges

Mounds of bauxite locked up at Awaso
Joy Online - 12 May 2010
Tonnes of bauxite have been locked up at Awaso in the Western Region following the collapse of the railway line connecting the Ghana Bauxite Company to the Takoradi Port.
The tracks which form part of the Western Railway line have seen serious deterioration especially in the last four years to the extent that the Ghana Bauxite Company has resorted to carting the ore with heavy duty trucks by road.
Officials complain that whole consignments of ore are often abandoned in transit either because the trains transporting the cargo cannot continue due to breakdowns or damages to the rail tracks.
Officials of the company expressed their frustrations when members of the Parliamentary Select Committee on Mines and Energy visited yesterday.
Benjamin Tetteh, correspondent for Joy News reports who was present at the meeting and said that thousands of ounces of bauxite have been left at the mines because it cannot be transported.
He said management have among other solutions suggested a public/private partnership programme to look for alternative means of transport.
Source: Joy Business/

Capital spending, job cuts to save St Ann Bauxite US$13m a year
Jamaica Observer - Wednesday, May 12, 2010
The move by St Ann Bauxite to reduce its employee headcount by 160 persons and outsource its mining operations to a third party is expected to save the company US$4 million ($356 million) to US$5 million ($445 million) annually.
What's more the company has cut capital expenditure by US$7 million to US$8 million.
Noranda Aluminum -- which owns 49 per cent of St Ann Bauxite Bauxite -- in a filing to the US Securities and Exchange Commission (SEC) said that the "the substantial portion of our bauxite mining to third party contractors" was contracted out on April 21, 2010.
The termination "through a combination of voluntary retirement packages and involuntary terminations", according to Noranda, will result in pre-tax charges of US$3 million to US$4 million in the second quarter of 2010.
During 2009, Noranda "received a claim from the UAWU in Jamaica which alleges that (it) failed to properly negotiate with the union in advance of declaring approximately 150 UAWU members redundant".
Noranda said it was contesting the claim "vigorously".
St Ann Bauxite has a special mining lease with the Government for the supply of bauxite.
The lease ensures access to sufficient reserves to allow St Ann to ship annually 4.5 million dry metric tonnes of bauxite from mining operations in a specified concession area through September 30, 2030. In return for these rights, St Ann is required to pay fees called for in the establishment agreement totalling in excess of US$2 million.
St Ann provides a secure source of bauxite to our wholly owned alumina refinery in Gramercy, Louisiana. Its alumina refinery provides a strategic supply of alumina to its New Madrid smelter at costs below recent spot market prices for alumina.
Currently, Noranda has a contract with St Ann to purchase approximately 2.4 million tonnes of Jamaican bauxite per year at a mutually agreed upon purchase price per dry metric tonne. That contract runs to December 31, 2010. St Ann also sell these raw materials to third parties.
For instance, last month Noranda reached an agreement in principle with Glencore to extend Sherwin's contract to purchase bauxite from St Ann through 2012.

Alcoa to temporarily curb aluminum output in Italy
Reuters - 11-May-2010
NEW YORK, May 11 (Reuters) - Alcoa Inc (AA.N) will temporarily curtail aluminum production at one of its Italian smelters as part of a plan to keep its facilities operating in the country, a company spokesman said on Tuesday.
"We will begin the action soon at Fusina," spokesman Kevin Lowery said of the facility near Venice.
He also told Reuters there were positive signs from the European Union over resolving an electric power issue that prompted the U.S. aluminum company last year to threaten to idle its two smelters in Italy.
Alcoa's plan for the Fusina smelter is aimed at avoiding substantial losses but does not foresee layoffs since workers will either be assigned to smelter maintenance or transferred to the associated rolling mill. In addition, some workers are expected to take voluntary early retirement.
"We are trying to minimize the impact on workers in Fusina," said Lowery.
Alcoa's plan, presented on Monday at a meeting in Rome with Italian government and union representatives, also calls for investment and structural action to revitalize operations at the Portovesme smelter on the island of Sardinia.
A senior Italian Alcoa executive told employees the meeting was positive in its primary objective to keep Alcoa in Italy.
Last November, Alcoa said it would temporarily idle its 194,000-tonne-per-year smelters at Portovesme and Fusina after the European Commission ordered it to pay back most of the state aid it had received in Italy since 2006. Alcoa has complained about high power prices in Italy.
In March, Italy's parliament approved a power decree offering favorable conditions to some industrial consumers to convince Alcoa to keep its Italian plants working.
Lowery confirmed Italian reports that the company plan would cost about 60 million euros ($76.8 million) over three years.
He also said there were signs the EU Commission's evaluation of the Italian power decree was positive even though Alcoa is still waiting for official word.
EU approval is essential for the economical sustainability of the Portovesme smelter as well as for the achievement of a competitive energy price for three years, which are required conditions to keep the plant operational, Alcoa says.

Ormet Releases Financial Results
MarketWatch (press release) - 11-May-2010
HANNIBAL, Ohio, May 11, 2010 (BUSINESS WIRE) -- Ormet Corporation, an independent U.S. producer of aluminum, announced its results of operations for the three months ended March 31, 2010. The results for the three months ended March 31, 2010 were a net profit of $0.2 million compared to a net profit of $9.6 million for the same period of 2009. The 2010 first quarter results include one-time charges of $5.0 million associated with the March 2, 2010 refinancing and non-recurring other income of $3.2 million associated with a legal dispute settlement.

Results of Operations for the three months ended March 31, 2010 ............... click the link above to read the entire report

'India will set up four more nuclear reactors by 2020'
Press Trust of India - 11-May-2010
Bhubaneswar, May 11 (PTI) Keeping in view the ever increasing energy requirement, India is all set to establish at least four nuclear reactors besides the world's first thorium-based reactor by 2020.

This was stated by eminent scientist and director of Indira Gandhi Centre for Atomic Research (IGCAR), Kalpakkam, Baldev Raj today while delivering a lecture on "Challenges and Opportunities in Nuclear Energy" on the occasion of the 12th National Technology Day celebrated by Nalco here.

Of the four nuclear reactors, he said two would be set up at Kalpakkam in Tamil Nadu while locations for the other two would be decided soon.

Stating that as many countries had stopped working on developing thorium-based nuclear reactors, Raj pointed out that India has emerged as a leader in this field.

EU slaps interim duties on Chinese aluminium wheels
Reuters - 11-May-2010
BRUSSELS, The European Union has imposed provisional anti-dumping duties of up to 20.6 percent on imports of aluminium wheels originating from China following a complaint of unfair competition from European manufacturers. The European Commission, the executive arm of the 27-nation EU, said on Tuesday an investigation had revealed that imports of Chinese aluminium wheels, used by car makers such as Renault (RENA.PA) and BMW (BMWG.DE), harmed European producers.
It said EU manufacturers has suffered a significant decrease of production and sales, loss of market share, as well as price depression due to cheaper imports from China.
"A provisional anti-dumping duty is hereby imposed on imports of aluminium road wheels ... originating in the People's Republic of China," the Commission said in the EU's official journal. (Reporting by Bate Felix; Editing by Dan Lalor)

Abu Dhabi to get $1bn aluminium rolling mill
National - May 09. 2010
General Holding Corporation (GHC), the Abu Dhabi Government’s industrial investment arm, plans to create 3,000 jobs and build a US$1 billion (Dh3.67bn) aluminium mill as it accelerates the emirate’s industrialisation drive.
The midstream aluminium-rolling mill, to be built next to Emirates Aluminium Company (EMAL) in Taweelah, would take aluminium from EMAL to manufacture products including cans, foil and trays for small and medium-size industries.
Aluminium has averaged $2,196 a tonne this year as demand gradually returns after the global financial crisis. ........................

Chinese 2010 aluminium capacity seen growing more than 15pct
SteelGuru - Sunday, 09 May 2010
Reuters reported that China's aluminium output in 2010 may climb to more than 15 million tonnes and its smelting capacity grow between 2 million tonnes to 3 million tonnes.
The report quoted Mr Wen Xianjun vice chairman of China Nonferrous Metals Industry Association as saying that China's aluminium smelting capacity increase this year would be against 20.6 million tonnes in 2009.
He said that "The production is still growing fast and pressure is mounting from excessive smelting capacity. Capacity is increasing too fast, but investment is still enthusiastic."
Mr Wen said that China's aluminium output was 13 million tonnes in 2009 investment in new aluminium projects jumped more than 100% from a year earlier to CNY 6.29 billion.
Mr Wen said the aluminium industry was also facing pressure from higher energy costs as power tariffs were expected to rise this year.
He added that "I'm not pessimistic about aluminium prices this year, but smelters are probably making money due to higher cost.”
(Sourced from Economic Times)

Heavy Industry Gets Cheap Energy in Iceland
IcelandReview - 08-May-2010
Large-scale industrial companies in Iceland pay ten to 50 US dollars less for each megawatt hour of electricity than aluminum companies in the United States, as Hördur Įrnason, CEO of the National power company Landsvirkjun, revealed at the company’s general meeting last month.
Arnason explained that all agreements Landsvirkjun makes with large-scale industrial companies include that the price of electricity changes with the price of aluminum, reports.
Aluminum companies in other countries where such agreements exist pay 25 to 26 US dollars for each megawatt hour, according to numbers from January and February 2010.
There are also agreements on a so-called cost price, which is in fact the market price with a discount, Įrnason stated. Companies with such agreements pay 37 to 44 US dollars per megawatt hour.
The market price is 59 US dollar per megawatt hour in Europe and 75 US dollars in the United States. Įrnason claimed that aluminum companies which pay that price quickly go bankrupt.
Large-scale companies in Iceland pay USD 26 (EUR 20) per megawatt hour and so Icelandic electricity is up to USD 50 less expensive than the electricity in America.

Vimetco Plans to Produce 26% More Aluminum Products in Romania
BusinessWeek - May 7 (Bloomberg)
Vimetco NV, the aluminum company controlled by Russia’s Vitaliy Machitski, plans to expand its output of processed products in Romania by 26 percent this year while keeping production of primary metal flat.

Production of goods such as sheet, coils and plates at its Alro plant will reach 40,000 metric tons, compared with 31,700 tons last year, Chief Financial Officer Marian Nastase said by phone from Bucharest yesterday. Output of primary aluminum, mostly derived from alumina, will stay at about 186,000 tons, he said. Production was 288,000 tons in 2008.

“The margin is significantly higher” for products than for primary aluminum, Nastase said.

Aluminum companies slashed production last year in response to the global recession, driving prices 45 percent higher, the most since 1994. That’s now spurring plants to reopen and expand, with Barclays forecasting a jump of almost 11 percent in global supply this year. Western European output will be little changed as producers contend with higher power prices.

“We cut production last year because of the high cost of energy,” Nastase said. The situation with energy costs is still too “unpredictable” to increase primary output, he said.

Vimetco, based in Amsterdam, restarted its bauxite mine in Sierra Leone and reopened its refinery in Romania in the fourth quarter, Nastase said. The company’s Chinese units produced about 412,000 tons of primary aluminum in 2009 and 58,000 tons of aluminum products.

Aluminum for delivery in three months, the benchmark contract on the London Metal Exchange, traded at $2,094.75 a ton as of 9:39 a.m. in London. The metal should trade at $2,000 to $2,500 this year, the chief financial officer said.

--Editors: Stuart Wallace, John Deane
To contact the reporter on this story: Anna Stablum in London at
To contact the editor responsible for this story: Stuart Wallace at

China to wash out obsolete capacity with firm hand - Mr Wen Jiabao
SteelGuru - Friday, 07 May 2010
It is reported that Premier Wen Jiabao has recently pointed out that China should take firm hand to solve obsolete capacity problem in some high energy consumption industries, such as steel industry and chemical industry.
China sets a goal to slash energy consumption per unit of gross domestic product by 20% during 2006 to 2010. Though the energy consumption per unit of gross domestic product was cut by 14.38% totally during the first four years, it still has a long way to run, especially after the energy consumption per unit of gross domestic product rose 3.2% in Q1 2010.
Premier Wen Jiabao stressed that government should strictly curb the excessive rises in high energy consumption and high discharge industries and intensify efforts to wash out obsolete capacities.
This year, 10 million kilowatts of small sized thermal units, 25 million tonnes of backward iron making capacities, 6 million tons of steel making capacities, 50 million tonnes of cement capacities, 330,000 tonnes of electrolytic aluminum capacities, 6 million tonnes of loaded containers of plate glass capacities and 530 thousand tons of paper making capacities will be closed down.
Chinese government will focus on energy saving and pollution emission reduction of key areas through investing more in new technologies to help save energy and reduce pollution emission. Besides, concrete steps will be taken to raise energy usage rate.
(Sourced from

Finding opportunity in aluminum waste
Hamilton Spectator - 06-May-2010
Ray Dubosq sees profit where others see only an ugly waste.
The ugly waste is called dross. It's the scum that forms on the top of a pot of molten aluminum as it cools. The problem for the industry has always been the longer the molten metal takes to cool, the thicker the crust of waste will be and the greater the amount of potential metal lost.
"The problem has always been if you don't cool it right away, then it turns to garbage," said Ray Dubosq, owner of Hamilton-based MFS Systems (2207) Inc.
For the past 20 years, first as a contractor and now as the owner, Dubosq has been building a reputation in the metals industry for a new solution to that problem -- a simple and environmentally sensitive way of cooling metal quickly to reduce losses.
"We've got quite a niche in the market now," Dubosq said. "Before us, there was a lot of dumping going on, a lot of this material would end up going to the dump."
At its most basic, Dubosq's system involves cooling the metal by placing it in a drum rotating through water. The water cools the drum, which in turn cools the metal without releasing any noxious steam or vapours into the air.
Traditionally, dross has been skimmed off the surface before the metal is poured into a mould or casting flask. By remelting the dross, a company could recover about 30 per cent of its volume in usable aluminum.
Dubosq's rotary coolers, however, can cool a load from 920 C to 100 C in about an hour, compared with eight hours for traditional methods. The dross resulting from rotary cooling contain up to 55 per cent usable aluminum -- that means a better payoff for the trouble of remelting it and less energy used to achieve more results.
At current prices of $1 a pound for aluminum, that's a healthy boost for the industry.
"When you melt aluminum six to 10 times a day, that can all add up really fast," Dubosq boasts. "The worst that happens with our process is the heat evaporates some of the water."
Dubosq bought the rights to the MFS technology three years ago through his Hamilton welding company RRD Welding and Fabrication.
The system was developed in 1972 by Oakville-based engineer Philip McMahon, who also pioneered the bulk cooling of heated materials such as quicklime.
By 2007, he was ready to retire and wanted to sell his brainchild to someone with the skill to market it properly.
For most of those years, Dubosq was involved with MFS as a contract welder before buying the technology.
The rotary coolers are now made by RRD Welding's associate company MFS Systems (2007) Inc. The company also makes rotary reclamation furnaces, scrap drying and preheating systems, and sand handling and preparation systems.
MFS is a small operation for now. Six employees have turned out four machines in two years, but as environmental regulations around the dumping of dross tighten, inquiries are coming in from around the world about a promising new way of dealing with the problem.
Companies in South Korea, Thailand, Norway, Iceland and the United States have all expressed interest in the machines that cost between $650,000 and $1.5 million, depending on size. Each takes about 10 weeks to complete.
"We're gearing up to do half a dozen machines a year and we'll grow to 20 employees once we get going strong," Dubosq said.
Part of that growth, he said, will come from finding other uses for rotary coolers.
"Anything that's bulk heated can be cooled in our machine," he said. "I bought this technology because I see the potential for it."
Companies like his, Dubosq said, can be an example to other small firms with big ambitions.
"Companies all around us are closing, but a few others are starting to thrive," he said. "We're a local company doing global work because the markets really are open to everybody."

Australia's super-tax on miners fails to deter Chinese investments
China Daily - 04-May-2010
If approved, resource tax not scheduled to start until July 2012
BEIJING - Australia's recent plan to impose a super-tax on mining groups will not deter Chinese companies from investing in that nation's mining sector, industrial insiders said.
Under the latest plan, Australia will tax miners 40 percent on profits for their operations in 2012. Revenue generated will be used to pay for infrastructure improvements, retirement fees and company reforms, the Australian government said on Sunday.
Zhang Ye, vice-general manager of China National Minerals, a wholly owned subsidiary of metals trader China Minmetals, said the proposal would not affect Chinese companies' decision to invest in Australian mining.
Analysts said Chinese companies like Chinalco and Yanzhou Coal Mining, which have already invested in local mining resources, might be affected.
Chinalco, China's largest aluminum producer, is Rio's largest shareholder with a 9.3 percent stake.
Yanzhou Coal Mining Co Ltd last year paid $2.9 billion for the acquisition of Australian Felix Resources Ltd.
Some Chinese companies complained that the Australian government doesn't have a favorable attitude toward Chinese companies investing in the nation's mines, industrial analysts said.
But that won't deter Chinese companies' from buying overseas resources, said Zhang Lin, an analyst with the Beijing-based Lange Steel Information Research Center.
Chinese companies have long wanted to invest in overseas resources to secure raw material supplies.
Zhang Ye said the Australian government would make a balanced decision between attracting overseas investments and imposing taxes from a long-term perspective.
The resources tax on Australian mining companies is scheduled to start in July 2012, and is expected to create $11.1 billion in revenue for the Australian government in the first two years.
During the past decade, profits of Australian mining companies amounted to $74 billion.
The tax may reduce BHP's earnings by 17 percent and Rio's by 21 percent in 2013, according to UBS AG estimates.
Some Australian mining companies are worried the move will affect future investment in the industry, making mining assets less attractive.
Iron ore company Cape Lamerber Resources on Tuesday scrapped an Australian project, citing the nation's plans for a new mining profit tax as reason, according to Reuters.
"These planned activities will no longer occur given the outcome of the Henry tax review, which is looking to impose a retention tax or a super tax on mineral projects developed in Australia," the company said in a statement.

Vale says stays in aluminum with Norsk Hydro deal
Reuters India - 04-May-2010
* Vale says pricey electricity slows aluminum growth
* Says becoming investor rather than operator in aluminum
RIO DE JANEIRO, May 4 (Reuters) - Brazilian miner Vale's purchase of a 22 percent stake in Norsk Hydro will give Vale long-term access to aluminum markets even after it exits the aluminum industry as an operator, a Vale director said on Tuesday.
Vale (VALE5.SA: Quote, Profile, Research), the world's largest iron ore miner, said on Sunday it would sell its aluminum assets to Norwegian aluminum maker Norsk Hydro (NHY.OL: Quote, Profile, Research) in a surprise $4.9 billion deal that lets Vale keep exposure to the aluminum value chain from bauxite to aluminum products.
"This is a strategic repositioning in which Vale stops being an operator and becomes a major partner of a global aluminum company, and makes that company (Norsk Hydro) much more competitive in the future," said Vale Aluminum Director Ricardo Carvalho in a conference call with reporters.
High-cost electricity in Brazil has made it difficult for Vale to expand in the energy-intensive aluminum business. At the same time, Norsk Hydro has consistently had to buy raw material such as bauxite from other companies.
Analysts were largely positive on the deal, describing Vale's aluminum segment as less profitable than its core iron ore business.
"We see the sale of aluminum and bauxite assets as strategically positive for Vale," said HSBC analysts in a research note. "The aluminum division has always had weak performance and the capital freed up can be applied to develop more lucrative assets in iron ore."
Carvalho denied the company was reducing aluminum exposure to boost iron ore investments, saying the deal was structured such that the principal compensation to Vale came in the form of Norsk Hydro shares rather than cash.
In addition to shares, Vale will receive $1.1 billion of cash for assets including the world's largest alumina refinery and one of the world's biggest bauxite mines. The Norwegian company will assume $700 million of debt.
"Despite having the advantage of extensive access to the raw materials needed for aluminum production (alumina and bauxite), Brazil has lost competitiveness in the sector due to high electricity tariffs compared with other countries," analysts for Brascan Corretora said in a research note.
Vale was part of a consortium that bid last month for the rights to build an 11,000 megawatt hydroelectric dam in the Amazon but lost out to a rival group.
Carvalho said the deal was unrelated to that dam auction and had been negotiated long before it.
"This transaction provides (Vale) with the flexibility to exit the assets in future through a liquid instrument, but also provides a strategic stake in Hydro should Vale turn more constructive on aluminum longer term," analysts for UBS Investment Research said. (Editing by Steve Orlofsky

EMAL's partners weigh expansion
National - 04-May-2010 Chris Stanton
May double in sizeImproved aluminium price makes phase two more feasible
A decision on whether to double the size of Abu Dhabi’s new aluminium smelter will be reached this year as the market’s prospects improve, according to Mubadala Development, which owns half of the project.
Emirates Aluminium (EMAL) is completing the initial, US$5.7 billion (Dh20.91bn) stage of its smelter at Taweelah, which it expects will reach full capacity of more than 700,000 tonnes a year by the end of this year. But Mubadala and Dubai Aluminium (DUBAL), the smelter’s co-owners, have already been weighing an expansion to 1.4 million tonnes a year, which would make the plant the largest in the world.
Aluminium prices are recovering from a drop of 60 per cent a year ago and are now at “comfortable” levels, said Waleed al Muhairi, the chief operating officer of Mubadala, a strategic investment company owned by the Abu Dhabi Government.
“Obviously, if aluminium prices go up, great, that’s perfectly fine, but we’re in a good place right now,” he said. “That’s all being fed into the feasibilities for phase two.”
The final investment decision would not be based on short-term fluctuations in the market, Mr al Muhairi said. “Just as we’re bullish on EMAL phase one, I have high hopes for phase two,” he said. “But ultimately it’s going to be determined on cold, hard analytical facts, as all our decisions are.”
Aluminium futures on the London Metal Exchange fell from a high of $3,300 a tonne in July 2008 to a low of $1,288 in February of last year, forcing many producers to slash output and shelve plans for expansions. Contracts for delivery in August traded at $2,255 a tonne in London last week, and a weighted average of 16 forecasts by Bloomberg shows most analysts expect prices to remain above $2,100 a tonne at least for the next three years.
The cost of aluminium production is driven principally by the price of electricity, and the cost of producing each tonne of metal at the first stage of the Taweelah smelter will fall within the bottom quarter of smelters worldwide, EMAL officials have said.
The smelter, which started production in late November of last year, is several kilometres long and obtains electricity from its own natural gas-fired power station with the capacity to produce 2,200 megawatts of electricity, enough to power a small city. Mubadala and government officials have described the smelter as a major part of the emirate’s efforts to capitalise on its abundant energy resources and diversify the economy away from crude oil exports.
“We believe in the strength of that business. We believe it’s an important business for Abu Dhabi going forward,” Mr al Muhairi said.
The rationale is not unique to Abu Dhabi. Qatar is increasing output at its new smelter, which will be able to produce 585,000 tonnes a year by the end of the year, while DUBAL is incrementally expanding its 30-year-old Jebel Ali plant to more than 1 million tonnes a year.
Plants are planned also for Oman and Saudi Arabia. EMAL’s chief executive could not be reached for comment yesterday, but the former head of the company, Duncan Hedditch, said in December that the second stage would probably be less costly than for the first, which was put out to tender during a peak in construction costs. Mr Hedditch left his post early this year after announcing his departure months earlier.
Revenue from the first stage would also help secure low-cost financing for the project, Mr Hedditch said at the time.
“It’s quite different from phase one. In phase one, we were a project; in phase two, we’ve already got an operating business,” he said. “We’ll have a track record.”
* additional reporting by Asa Fitch

Aluminum Smelter Likely to Go Into Indonesian Hands When Partnership With ...
Jakarta Globe - 03-May-2010
The government is likely to take full control of PT Indonesia Asahan Aluminium, the nation’s only aluminum smelter, when its partnership with the Japanese government ends in 2013, the state-owned enterprise minister said on Monday.

Mustafa Abubakar said the government had begun initial talks with the Japanese government about the fate of the company, also known as Inalum.

“Principally, we want our SOEs to control and operate Inalum, but the Japanese ambassador, Kojiro Shiojiri, proposed extending the contract by injecting more funds into the company,” he said.

He said the talks were in the preliminary stage and the amount of potential investment had not been discussed.

Mustafa said the company had potential and he would invite other state-owned enterprises to take a stake.

“I see a good business opportunity in Inalum, and when the contract expires in 2013, the government will step in to be the majority shareholder,” he said.

Based in Kuala Tanjung, North Sumatra, Inalum is 58.9 percent held by Tokyo-based Nippon Asahan Aluminium. The rest is owned by the Indonesian government.

But with NAA’s contract set to expired in 2013, the House of Representatives has demanded the company be nationalized because it was a build, own, transfer (BOT) contract.

Daryatmo Mardiyanto, a member of the House’s Commission VII, which oversees energy issues, on Monday said Indonesia should take control when the contract expired. “We’ve been waiting for 34 years [Inalum was established in 1976]. Now it’s our turn to show that we can,” he said.

The government should remain committed to the contract until it expired but then exercise its option to take control, he said.

Mustafa said state-owned enterprises specializing in manufacturing, such steel company PT Krakatau Steel, were good potential candidates to represent the government in Inalum.

The ministry uses state brokerage PT Danareksa to manage its minority shares, worth Rp 4.7 trillion ($521.7), in nine companies.

As much as 60 percent of Inalum’s production of 225,000 tons is exported to Japan. The rest is sold domestically.

Inalum posted a net profit of $121 million for the 2008 fiscal year, the last year for which data is available.

Glencore-Xstrata merger would rival BHP Billiton
The Australian - 03-May-2010
GLENCORE International is believed to be studying a merger with British-listed Xstrata to create a company worth about pound stg. 55 billion ($90.4bn) and rivaling BHP Billiton.
Glencore, the world's largest commodity trader which already owns 34 per cent of Xstrata, is also considering an initial public offering, according to sources.
Swiss-based Xstrata, the largest producer of coal burned by power stations and the fourth largest producer of copper and nickel, has a market value of pound stg. 31.9bn.
A deal would help Glencore, also based in Switzerland, to fund its activities and ease liquidity constraints, as well as provide the ability for some of the group's partners to exit their stakes in the company. In December 2008, after commodity prices tumbled, Glencore had its credit rating cut by Standard & Poor's to the lowest investment grade.
Glencore, which trades metals and oil and controls mines and smelters, sold as much as $US2.2bn ($2.4bn) of bonds to investors, including BlackRock and the Government of Singapore Investment Corp, which convert on an IPO or "other pre-determined qualifying events".
The trader is under pressure over how it will deliver equity to investors, according to sources.The company announced in December that the terms of the bonds gave Glencore a pre-conversion equity value of $US35bn.
Advisers were working on a two-stage proposal in which Glencore would merge with Xstrata in a "reverse takeover" and then reduce its stake in the enlarged group to below 40 per cent, London's Sunday Telegraph reported. .
Xstrata management would retain control of the combined company, the report said.
Xstrata chief executive Mick Davis has expanded Xstrata through more than $US35bn of acquisitions since it sold shares in an IPO in London in 2002.
Glencore told bondholders in March last year that in an attempt to strengthen the company's finances, senior staff had agreed to defer until at least 2012 their first termination payment in the event of their departure.
But since then commodity prices have recovered.
Copper has rebounded 64 per cent on the London Metal Exchange in the past year, aluminium has gained 46 per cent and nickel has more than doubled.
BHP had a market value of $210.7bn at the close of trading on Friday, its sales in the year to June 30, 2009 being $54.2bn, , according to data compiled by Bloomberg.
Glencore announced in March that its sales in 2009 were $US106.4bn.
As well as trading commodities, Glencore owns 8.7 per cent of Moscow-based aluminum producer United Co. Rusal.

Norsk Hydro signs $4.9B deal with Brazil's Vale
BusinessWeek - 02-May-2010
OSLO, Norwegian aluminum producer Norsk Hydro ASA says it has signed a $4.9 billion deal to buy the aluminum operations of Brazilian mining company Vale S.A.
Norsk Hydro says it will pay $1.1 billion in cash for the operations and give Vale shares in Norsk Hydro representing 22 percent of the company.
Considering the shares' value April 30, the total value of the deal is $4.9 billion.
Norsk Hydro said Sunday the deal includes the majority of Vale's bauxite, alumina and aluminum assets, and will secure Norsk Hydro's bauxite supplies for up to 100 years.The company said it will finance the deal by launching a rights issue of 10 billion Norwegian kroner ($1.7 billion).

Venezuela gives billion-dollar boost to metals industry
Caribbean Net News - May 3, 2010
CARACAS, Venezuela (AFP) -- Venezuelan President Hugo Chavez has announced plans to invest nearly a billion dollars in a state-run consortium of 15 aluminum, iron and steel producers mired in financial crisis for months.
In all, some 933 million dollars will be pumped into the ailing Corporacion Venezolana de Guayana (CVG) over the next two years, Chavez told labor unions late Friday.
Worker complaints of unpaid wages and government negligence have been growing for months at iron and aluminum makers Carbonorca, Venalum, Bauxilum and Alcasa, and at the Sidor steel mills, all of which were nationalized by Chavez in 2008.
Factory production has also dropped from government-mandated power rationing, amid a crippling national energy crisis.

ABB, Fluor, WorleyParsons win Saudi-Alcoa contract
Reuters - RIYADH, May 2 (Reuters) -
Swiss-based ABB (ABBN.VX), U.S.-based Fluor Corp (FLR.N) and WorleyParsons (WOR.AX) have won the first contracts for a planned $10.8 billion aluminium joint-venture between Alcoa (AA.N) and Saudi Maaden (1211.SE).
Maaden, also known as the Saudi Arabian Mining Co, said in a statement on Sunday that the contracts are linked to the construction of theintegrated aluminium complex at Ras al-Zour. It did not give the value of the contracts. (Writing by Souhail Karam; Editing by Dinesh Nair)

Asbestos suits killing companies and jobs and opportunity
Southeast Texas Record (Opinion)- 4/30/2010
Let us observe a moment of silence for another productive member of our society that has passed away.
It was a company, not a human being, but it provided livelihood for hundreds of men and women, useful products and services for millions more.
Durabla Manufacturing, a Pennsylvania-based maker of sealing products, recently died after a long illness caused by asbestos lawsuits -- 108,000 suits in 30 years. A notice of bankruptcy, delivered to U.S. District Judge Eduardo Robreno of Philadelphia on April 12th, served as the death certificate.
Death by asbestos lawsuit is an increasingly common form of fatality for otherwise healthy American corporations. Durabla is the 89th company to suffer such a fate in the last 28 years. Other victims include Lykes Bros. Steamship, Babcock & Wilcox, Pittsburgh Corning, W.R. Grace, Kaiser Aluminum and Congoleum.
To say the death of these companies was senseless would be an understatement. Millions of employees were put out of work when the companies went under, millions of shareholders saw their investments destroyed, and alleged victims of asbestos exposure received a pittance for claimed injuries. Plaintiffs attorneys, such Beaumont's Walter Umphrey -- one of the pioneers of asbestos litigation -- did exceedingly well.
What's the logic of that?
Several years ago, senior U.S. District Judge Jack Weinstein, noticing the upward trend in asbestos lawsuits, warned that "every company with even a remote connection to asbestos may be driven into bankruptcy."
Do you realize how many tens of thousands of companies in America have a remote connection to asbestos? Do you have any idea how many employees would lose their jobs and how many shareholders would lose their investments if every such company succumbed to death by asbestos lawsuit?
A person with genuine injuries resulting from another party's negligence deserves redress, but asbestos lawsuits aren't providing much of that. The suits seem to be enriching a predatory few while being ruinous to the lives of millions.

Disgruntled Workers Take Over Montenegrin Aluminum Plant
RadioFreeEurope/RadioLiberty - May 01, 2010
PODGORICA -- Hundreds of disgruntled workers have taken over an administrative building at Montenegro's Podgorica Aluminum Plant (KAP) to protest the planned layoff of dozens of workers, RFE/RL's Balkan Service reports.
But KAP Chairman Vyacheslav Krilov said after emergency talks with Montenegrin Economy Minister Branko Vujovic today that the company's restructuring plan and reduction of workers would be postponed until the adoption of a new collective agreement with the workers' unions had been adopted.
"I hope and I am convinced that we will find a solution and sign a joint protocol," Krilov said.
Vujovic also held talks with representatives of KAP's majority shareholder, the EN+ Group -- which is owned by Russian billionaire businessman Oleg Deripaska -- in a bid to resolve the crisis.
KAP, Montenegro's top exporter, was acquired by the EN+ Group in 2005 but has fallen on hard times since the global economic crisis slashed the demand for metals.
KAP management has said about 2,500 of the company's 4,000 workers need to be laid off for the company to stay in business.
On April 29, workers gathered at the plant's gates and prevented Krilov from entering the plant. Company security guards prevented some of the workers from physically attacking Krilov, who is Russian.
The workers then forced their way into KAP's administrative building, smashing several windows. No one was reported injured.
The employees then demanded that the government of Prime Minister Milo Djukanovic, who negotiated the KAP sale directly with Deripaska, take over management of the factory.
Krilov said at a news conference on April 29 that the layoffs are in line with Montenegrin law and were prompted by the workers' refusal -- on the advice of the unions -- to sign new work contracts.
Vujovic said before the talks that some of the layoffs might have been against the law.
The management has declined to reveal the number of people who have been laid off. Union leaders say about 200 workers have received notices in the last two days