AluNews - October 2010

Sohar Aluminium smelter expansion proposal in pre-feasibility stage
Zawya - 30 October 2010
MUSCAT -- Oman Oil Company SAOC (OOC), which owns a 40 per cent stake in Sohar Aluminium, is hopeful that a long-standing proposal to expand the capacity of the $2.4 billion smelter will come to fruition. On Wednesday, a top executive of the state-owned company which has major investments in the energy, petrochemicals and industrial sectors, revealed that moves towards a possible expansion of the giant smelter were in the "pre-feasibility" stages.
"I think, subject to meeting other conditions, an expansion is likely," Mulham al Jarf, Deputy CEO, Oman Oil Company, said. "We are already looking at the pre-feasibility of that, but this will be largely driven by gas availability," Al Jarf added in comments to journalists on the sidelines of a joint Omani-Spanish Business Forum, held at Al Bustan Palace Hotel.
Asked about the scope of the expansion envisaged by shareholders, Al Jarf said: "It would have to be a full (additional) line, which today is 360,000 metric tonnes."
Any eventual decision to proceed with the expansion of project, which hinges largely on a government commitment to provide additional natural gas volumes, would lead to the establishment of a mammoth smelter of a world-class capacity of 720,000 metric tonnes per annum.
Sohar Aluminium percent by the Abu Dhabi National Energy Company (TAQA), which is a subsidiary of the Abu Dhabi Water and Electricity Authority (ADWEA), and 20 per cent by mining giant Rio Tinto Alcan. The company also owns and operates a state of the art 1,000 MW combined cycle captive power plant.Earlier, in a presentation at the Omani-Spanish Business Forum, Mulham al Jarf outlined Oman Oil Company's expanding investment footprint within the Sultanate and across the globe. Incorporated in 1996 to pursue investment opportunities in the energy sector both locally and internationally, OOC plays an important role in the Sultanate's efforts to diversify the Omani economy and to promote Omani and foreign private sector investment, Al Jarf said.
Significantly, the wholly government owned investment vehicle now boasts an impressive portfolio of 32 investments in nine countries spanning the energy value chain. These investments cover seven key areas: Hydrocarbon Exploration and Production (27 per cent), Energy Infrastructure (10 per cent), Refining and Marketing (34 per cent), Petrochemicals (15 per cent), Power (per cent), Shipping (2 per cent), and Metals (9 per cent). In addition to sizeable investments in the Sultanate, Oman Oil also has investments in China, India, Pakistan, Spain, Hungary, South Korea, Kazakhstan and the GCC, he noted.
Later, in comments to journalists, Al Jarf outlined initiatives by Oman Oil to strengthen its upstream activities in the Sultanate through the establishment of a dedicated operating company.
"As you know, we get a 20 per cent right to participate in any new exploration blocks during their development phase. Our strategy now is to build up our own operating company. We have spun off a dedicated upstream company to focus and manage those investments."
Asked about plans for Block 60, which was recently relinquished by international energy firm BG, he said Oman Oil had been asked by the government to "take it forward". "Yes, we are reviewing it for the government; we are looking at it now," Al Jarf stated.
In June, BG announced its decision to exit from Block 60, an onshore concession covering an area of around 1,500 sq km, and which includes the Abu Butabul gas and condensate reservoir.
BG's departure, Al Jarf said, had "nothing to do with the asset itself", but "with its own priorities as a global company". More about the Abu Butabul field's promising hydrocarbon potential, he added, would be known over the next few months.
Significantly, Oman Oil is also exploring the potential to set up its own power company in the Sultanate. "We are studying creating our own power development company. We are in the process of it. We have enough captive power plants in Oman, whose experience we can use to develop it further. We have Sohar Aluminium

Steelworkers reject offer
Evansville Courier & Press - 29-Oct-2010
The Steelworkers Local 9423 rank-and-file have turned down a tentative agreement on a new four-year labor contract at Century Aluminum’s smelter in Hawesville, the company announced Friday.
Century reached a tentative agreement with union negotiators on Oct. 21. The proposed contract would cover nearly 500 workers at the Hancock County smelter.
“The plant is operating normally and we will discuss next steps with the union leadership as appropriate,” plant manager Matt Powell said in a statement.

Russia in talks on bauxite leases
The Australian - October 30, 2010
RUSAL has approached Queensland with an expression of interest in taking over the long-delayed $3 billion Aurukun bauxite project.
The state government yesterday confirmed reports from Moscow that Russia's global aluminium bear initiated discussions in August after China's state-owned aluminium company, Chalco, withdrew from an agreement to build a mine at Aurukun and an alumina refinery at Abbott Point.
The Chalco deal followed the government's reclamation of the Aurukun concessions from industry leader Alcan in the wake of its controversial acquisition from Pechiney in February 2004. The French company had sat on the mining rights for Aurukun since 1975.
The terms of the Chalco deal required China Inc to invest $3bn on a 10 million tonnes a year mine and a further $2.2bn on a 3.3mtpa refinery.
Chalco walked away from that deal in July, extending 35 years of frustration and delay in developing what is a world-class resource that sits at the southern extension of Rio Tinto's fabulous Weipa operations.
It is understood that Rusal met state Natural Resources Minister Stephen Robertson on August 25 and the Russian aluminium company subsequently presented an aggressive case for its acquisition of the Aurukun leases to the Queensland co-ordinator general, Graeme Newton.
While refusing to confirm its approach to the Bligh government, Rusal yesterday indicated that any interest it had in Aurukun would be for its use as a feedstock for the Queensland Alumina joint venture.
"Rusal has a long-term requirement for bauxite to process at its Queensland Alumina joint venture," Rusal chairman John Hannagan said yesterday.
"The company will investigate all opportunities for competitive bauxite supply to QAL. Rusal has no interest in exporting bauxite from Australia to Russia (a totally uneconomic exercise)."
Rusal owns 20 per cent of QAL, which is the world's biggest alumina refiner.
The balance of of the project is controlled by Anglo-Australian miner Rio Tinto, which is said to be watching closely the progress of any discussion about the status of Aurukun. Given the proximity of the undeveloped deposit to Weipa, Rio would see itself as the natural developer of Aurukun.
But it is believed Rusal is acting alone, rather than with Rio Tinto, in its assessment of Australian bauxite options that include Aurukun.
There has been speculation that BHP Billiton is somehow connected to Rusal's pitch. This speculation is wrong and the Global Australian has no knowledge of Rusal's interest in sourcing raw materials from Queensland's northern Cape.
Given the Chalco deal was conditional on building a new refinery at Gladstone, an agreement that would allow Rusal to deliver Aurukun product to the QAL refinery at Gladstone would represent a downshift in the government's aspirations for investment in new value-adding capacity.
The controversy that would probably be triggered by allowing Rusal to take over the Aurukun mining concessions might be a disincentive for the state government's further engagement in discussions with the Russian company.
Rusal is controlled by Russian oligarch Oleg Deripaska, a billionaire who carries some notoriety both at home and abroad.
That said, Rusal was one of 10 aluminium industry standards that were invited to join the Aurukun Industry Investment Group after the decision to take the project away from Alcan in 2004.

More Duties Proposed for Chinese Aluminum Products
Wall Street Journal - 28-Oct-2010
WASHINGTON—The Obama administration said Thursday it wants to slap antidumping duties on Chinese aluminum products, giving a boost to a group of U.S. aluminum producers and the United Steelworkers union.
The proposed duties, which require further action by the International Trade Commission, could add 59.31% to the cost of Chinese aluminum extrusions, which are products squeezed out of aluminum alloys and often used in construction. The Chinese imports were valued at more than $500 million last year.
The aluminum case is one of several trade-policy disputes simmering between the U.S. and China that involve the steelworkers, who have been among the most active petitioners for sanctions against Chinese imports. The steelworkers pushed the Obama administration to launch an investigation of China's green-technology sector last month. The steelworkers also initiated action to get antidumping duties levied on Chinese-made tires.
The U.S. decided in August against pursuing the more charged issue of whether China's undervalued currency was providing an unfair subsidy for aluminum producers.
But the administration set countervailing duties of 6.2% to 137.7% on the aluminum imports.
China is the world's largest exporter of aluminum extrusions. The value of such products shipped to the U.S. jumped to $513.6 million in 2009 from $306.8 million the year before.
Write to Tom Barkley at tom.barkley@dowjones.com

Bintulu Port hopes to build and operate Samalaju project
Malaysia Star - 28-Oct-2010
KUCHING: Bintulu Port Holdings Bhd has commissioned hydraulic and environmental impact assessment studies on the proposed Samalaju port project in Bintulu.
Chief executive officer Datuk Mior Ahmad Baiti Mior Lub Ahmad said the company was now working on a detailed proposal for the development, management and operation of the proposed port for submission to the Sarawak government by Dec 1.
“The proposal will include the project’s layout plan, schedule and terms of the new port’s privatisation,” he told StarBiz.
»The proposal will include the project’s layout plan, schedule and terms of the new port’s privatisation« DATUK MIOR AHMAD BAITI MIOR LUB AHMAD
Bintulu Port received a letter of intent from the Sarawak government last week to submit a detailed proposal on the project.
If the proposal was accepted, Bintulu Port said it would be appointed to build, own and operate the new state port, the fourth in Sarawak. The other three state ports are in Kuching, Sibu and Miri.
The state government has earmarked some 450ha for the port project. The new port will serve the energy-intensive industries in the Samalaju Industrial Park within the Sarawak Corridor of Renewable Energy.
Three aluminium smelters, a managese smelter and steel-related industries have been planned for the Samalaju Industrial Park. Japan’s Tokuyama Corp, the first major investor in the park which is currently being developed, is investing more than RM2bil in a polycrystalline silicon plant.
These industries will draw their power supply from the 2,400MW Bakun hydro-electric dam, which is expected to produce electricity by mid-2011.
Mior Ahmad said the size of the proposed port and its annual handling capacity had yet to be determined but it would be phased in line with the industrial development in the area.
“We have to discuss the various details, including the duration of the appointment as the licensed operator as well as terms and conditions of the privatisation of the port undertakings with the state government,” he added.

Montenegro - The Government helps KAP aluminum smelter overcome issues
ISRIA (registration) - 27-Oct-2010
Economy Minister Branko Vujovic signed Tuesday with Vyecheslav Krylov, Chairman of the aluminium smelter KAP Podgorica, a settlement agreement by which the Government becomes an owner of a significant portion of shares in KAP and the Boksiti Mines and helps the majority owner CEAC to overcome the problems brought by the economic downturn. The Government’s intervention will focus on the decision-making process, social and financial issues and guarantees.
The agreement specifies that the Government will own around a 29% stake in KAP and around 31% in Boksiti, which will enable the Government to have one representative each in the two companies’ managing boards, with the right to veto important decisions concerning production, business and investment plans and loans. The agreement requires CEAC to invest EUR 39 million over the next five years (EUR 21 million in the first two), and the investor is expected to put more of the KAP and Boksiti capacity to use, said Minister Vujovic, adding that this should help make KAP more competitive on the aluminium market, attract more investment and help increase production.
According to the Minister, by virtue of this agreement, the KAP and Boksiti restructuring programmes will be adopted and the number of KAP and Boksiti employees will be reduced to slightly over 1,300 and 300, respectively, based on voluntary redundancy and with adequate compensation. This policy already gave results in 2010 with a 20% increase in aluminium production and export in comparison to previous year, and the Government expects an even bigger increase in the next year, said Minister Vujovic.
President Krylov noted that this agreement is very important as it cements the cooperation with the Government in a successful way, underlining that the financial and social issues have been resolved, which has enabled KAP to operate profitably. He emphasised that the most important task – the development of both KAP and Boksiti – has been achieved and that it is now necessary to utilise the advantages of KAP and Boksiti over their competition, such as the proximity of the European market deficient in aluminium products. He added that action in this regard is already being taken and that further steps will be made in the future.

Congo Says Talks With BHP on Building Inga 3 'Very Advanced'
Bloomberg - Oct 27, 2010
The Democratic Republic of Congo’s government is in “very advanced” talks with BHP Billiton Ltd. on the Inga 3 hydropower project, as the world’s biggest mining company seeks electricity for a possible aluminum smelter.
Congo formally invited offers to build the project on the Congo River yesterday, Energy Minister Gilbert Tshiongo Tshibinkubula wa Tumba said today in Kinshasa, the capital. BHP, studying development of a smelter in the country, is continuing talks with the government on both ventures, which are at an “early conceptual phase,” Rosheeka Amarasekara, a London-based spokeswoman for the company, said by telephone.
Inga 3 is part of the planned $22 billion Inga power complex, estimated to generate about 40,000 megawatts, almost twice the capacity of China’s Three Gorges dam. A previous proposal for the 5,000-megawatt Inga 3, estimated to cost $5.2 billion, was shelved when Western Power Corridor, a venture between five African countries, was dissolved.
“BHP could potentially support the development of Inga 3 by constructing an aluminum smelter in the Bas Congo province which could source power from the Inga 3 hydropower scheme,” Amarasekara said. The company can’t provide estimates on output or costs, she said.
BHP Smelter
BHP said in 2007 its plant could use about 2,000 megawatts of power from the proposed Inga 3 project and produce 800,000 metric tons of the metal a year.
“While waiting for the construction of Inga 3, Congo will face a deficit in 2015 in the order of 858 megawatts as demand rises, notably the demand of miners,” the energy minister said today. The country wants Inga 3 to be operational by 2020, he said, adding that 3,500 megawatts to 4,200 megawatts will be “prioritized” for BHP’s smelter.
The nation needs $6.4 billion over the next five years to rehabilitate and build its electricity network. Congo is seeking $22 billion between 2015 and 2025 for Inga 3 and the Grand Inga dam, which would harness the power of the Congo River, the second-biggest by volume after the Amazon.
Congo’s rivers could produce more than 100,000 megawatts at 341 different sites, the minister said. Only 2.5 percent of their energy potential is currently being exploited. Congo has 2.463 megawatts of hydropower installed and 1.382 is being used, he said.
To contact the reporters on this story: Michael J. Kavanagh in Kinshasa at mkavanagh9@bloomberg.net; Jesse Riseborough in London at jriseborough@bloomberg.net. To contact the editor responsible for this story: Amanda Jordan at ajordan11@bloomberg.net.

China 2010 Aluminum Consumption Better Than Expected
BusinessWeek - October 27, 2010
China’s aluminum surplus is likely to narrow next year, as strong growth in consumption will absorb an increase an output, according to Beijing Antaike Information Development Co.
The world’s largest consumer is estimated to have a 350,000-metric-ton surplus this year, down from an earlier forecast of 800,000 tons, said Antaike analyst Li Yang in a speech at a conference in Zhengzhou today. He forecast the surplus will narrow further to 300,000 tons in 2011.
“Aluminum-related industries have been performing really well this year, boosting the demand for the metal,” Li said. “Looking into the future, the government’s push for energy conservation will underpin demand growth.”
Aluminum is used in cars, cans and airplanes. Alcoa Materials President Timothy Reyes said yesterday the country is going to shift to a net aluminum importer in the next few years.
The country’s consumption is likely to total 16.8 million tons this year, up 22 percent from 2009, while output may gain 28 percent to 17.5 million tons, Li said. Exports of aluminum and its alloy may reach 350,000 tons, he said.
Aluminum output in China may grow to 16 million tons this year, Zhang Fengkui, head of the nonferrous metals office at the Ministry of Industry and Information Technology, said yesterday.
Antaike forecast output will grow 11 percent to 19.5 million tons in 2011, while consumption will increase 12 percent to 18.8 million tons and exports will total 400,000 tons.
Aluminum on the London Metals Exchange declined 1.1 percent to $2,365 a ton at 12:19 p.m. in Shanghai. The metal has climbed 6 percent this year.
--Helen Sun. Editors: Jarrett Banks, Matthew Oakley

Montenegro partly regains ownership in KAP
BusinessWeek - October 27, 2010
PODGORICA, Montenegro
Montenegro's government has regained 29 percent ownership in the nation's biggest aluminum smelter majority owned by Russian tycoon Oleg Deripaska.
The deal enables the government to have one representative on the managing board with the right to veto some of the company's decisions.
Workers have said they want the Montenegrin government to take over the KAP aluminum factory from Deripaska. Once Montenegro's biggest producer, KAP has halved production since a global crisis hit the aluminum business last year. Dozens of the factory's 2,100 workers have been fired in recent months.
Montenegrin government sold KAP to Deripaska's Central European Aluminum Company five years ago for euro48.5 million ($674.73 million).

China ministry cuts 2010 aluminium output forecast
Alibaba News Channel - 25 Oct 2010
ZHENGZHOU, China, Oct 26 - China will produce 16 million tonnes of primary aluminium this year, an official from the Ministry of Industry said on Tuesday, signalling a cut from the previous forecast of 17 million tonnes.
Zhang Fenghui, a director at the ministry, told reporters on the sidelines of a conference that Henan province, which has already closed 700,000 tonnes of annual capacity, would close more in the fourth quarter, bringing the total to 1 million tonnes by the end of the year.
Output would rise early in 2011 as the pressure to save power subsided, he said, but the country would close a further 700,000 tonnes of capacity.
Zhang said that China's current annual smelting capacity was 21.1 million tonnes, and another 2.4 million tonnes was under construction, with a further 7 million tonnes planned by 2015, so the total would reach 30.5 million tonnes by then.

World-first in aluminium recycling cuts landfill waste
Inside Waste Weekly - 26 October 2010
Victoria’s Environment and Climate Change Minister Gavin Jennings, on October 20, officially switched on state-of-the-art recycling machines at Sims Aluminium that will cut by 95% the amount of hazardous waste going to landfill from its aluminium recycling. Visiting Sims Aluminium secondary plant in Laverton North, Jennings said the two new “dross” presses would eliminate hazardous salt and aluminium oxide from the recycling process.
The government provided funding of $773,000 through the HazWaste Fund to help purchase the machines, which cost $1.97 million. The fund is a key part of the government’s strategy to eliminate hazardous waste from landfill by 2020.
General manager of Sims Group Holding’s Australian manufacturing division, Doug McLean said the dross presses remove the need to use salt in the smelting process.
Traditionally, this waste has had the salt content removed in conjunction with Cheetham Salt, however, due to Cheetham’s discontinuance of this aspect of their operations, the waste was required to be redirected to landfill.
As a consequence of this change, Sims Aluminium embarked on a program to find an alternative process which was complementary to its existing smelting technology.
“After investigating numerous options, Sims Aluminium’s technical staff developed (in-house) a process to eliminate the need to use salt in the recycling process, utilising existing technology available from Europe,” said McLean.
“With trials commencing in early 2009, this process was successfully proven, which will eliminate the need to dispose of approximately 1.8K tpa of salt, and allow the balance of the waste, approximately 12K tpa, to be recycled into several applications due to the removal of contained salt.”
McLean said s the funding had allowed Sims to become the only known secondary aluminium smelter in the world to operate a ‘salt free’ process utilising dross press technology.
Several recycling applications for the aluminium oxide waste have been identified, with its future use to be determined by late 2010. Once this is completed, it is expected that the entire plant will operate on a salt-free basis, with close to 100% of slag waste recycled.
“Although salt-free smelting technology is not new within the secondary aluminium industry, the modification and application of this process into a new technically viable process, will allow Sims Aluminium to meet both is corporate and environmental commitments into the future,” said McLean.
“This project would not have proceeded without the support of the EPA Victoria’s HazWaste funding,” he added.
In the two years the HazWaste Fund has been operating, $18.3 million of a total of $30 million has been allocated to almost 60 different projects.

Kaiser Aluminum posts lower-than-expected profit
Reuters - Mon Oct 25, 2010
* Q3 net earnings 29 cents/shr vs $1.14 in '09 quarter
* Adj earnings 32 cents/shr vs Street view 43 cents
* Sees Q4 shipments slightly lower than Q3
* Shares down 0.7 percent

NEW YORK, Oct 25 (Reuters) - Kaiser Aluminum Corp's (KALU.O) third-quarter profit dropped 74 percent, missing Wall Street estimates, and the company warned on Monday of a quarter-to-quarter decline in shipments.
Net income fell to $6 million, or 29 cents per share, from $23 million, or $1.14 a share, a year earlier, the Foothill Ranch, California-based company said.
Excluding certain items, earnings were 32 cents per share. On that basis, analysts on average were expecting 43 cents, according to Thomson Reuters I/B/E/S/.
Net sales rose slightly to $263 million from $252 million.
"Demand for our general engineering, automotive and industrial applications continues to reflect a slow recovery," said Chief Executive Officer Jack Hockema. "We do not anticipate any meaningful restocking of service center inventories until the economic recovery is strong enough."
He said Kaiser anticipated that fourth-quarter shipments would be slightly lower than the third as a result of normal year-end seasonality.

Ma'aden and Alcoa Pour First Concrete for Middle East's First Integrated ...
MarketWatch (press release) - 24-Oct-2010
RIYADH, Saudi Arabia & NEW YORK, Oct 24, 2010 (BUSINESS WIRE) -- Ma'aden, the Saudi Arabian Mining Company, and Alcoa, today poured first concrete for the Middle East's first fully integrated aluminum smelter and food grade can sheet rolling mill, at Raz as Zawr in the Eastern Province of the Kingdom of Saudi Arabia.
The construction landmark came just ten months after the two companies signed agreements to establish the world's lowest cost, fully integrated aluminum industry within the country.
First production from the smelter and rolling mill is scheduled for early 2013. Initially, the smelter will produce 740,000 metric tons of primary metal. The rolling mill will initially produce 380,000 metric tons of food grade can sheet. Both are designed for significant expansion.
In marking the occasion Engineer Abdullah Busfar, vice president Ma'aden Aluminium SBU and Project Management said, "Today we have begun laying the foundations of an entirely new industry for Saudi Arabia. This is an industry that will create value for the project partners and their shareholders, numerous different opportunities for Saudi and international businesses and thousands of new direct and indirect jobs. That we are able to do so just over 10 months after Ma'aden signed the joint venture agreement with Alcoa speaks volumes for the hard work, professionalism and dedication of the project teams."
Ken Wisnoski, Alcoa's president of Global Primary Products Growth said "the event represented an important step in fulfilling a commitment to a disciplined budget and project schedule.
"We thank the government of the Kingdom of Saudi Arabia for its continued support, the leadership of our respective companies and, most importantly, the people who are turning the vision of diversifying Saudi Arabia's economy into reality.
"This project, and future expansion, will be the region's first, and the world's lowest cost, fully integrated aluminium complex. It is poised to fulfill a significant share of the growth in global aluminium demand in years to come," Wisnoski said.
n addition to the smelter and rolling mill, the second phase of the joint venture will include a bauxite mine with an initial capacity of 4 million metric tons per year and an alumina refinery with an initial capacity of 1.8 million metric tons per year. First production for mine and refinery is scheduled for early 2014. Alcoa will provide alumina feedstock for the smelter in the interim.
Total capital investment in the joint venture is expected to be approximately SAR 40.5 billion ($US 10.8 billion). Ma'aden holds 74.9 percent of the joint venture; Alcoa 25.1 percent with provisions in place to enable an increase to 40 percent.
About Ras Az Zawr
Ras Az Zawr is the location for Ma'aden's minerals industry complex, a 77 square km site, 90km north of Al Jubail on the Arabian Gulf coast of Saudi Arabia. In addition to housing the alumina refinery, aluminum smelter and rolling mill for the Ma'aden Alcoa joint venture aluminium industry, it is also the site for Ma'aden Phosphate Company's integrated chemical and fertilizer facility currently near completion. The phosphate complex consists of a phosphoric acid plant, a sulphuric acid plant, an ammonia plant, a DAP granulation plant, a co-generation plant and desalination plant, as well as related infrastructure. It will process phosphate concentrate brought by rail from Al Jalamid. This will produce about 2.92 million mtpy of granular DAP, plus approximately 400,000 mtpy of excess ammonia and about 200,000 mtpy of excess phosphoric acid. Ras Az Zawr also has 25 square kilometers of land set aside for industrial expansion and downstream industry.

Chalco Shuts 10% of Aluminum Output Capacity on Energy Curbs, Analysts Say
Bloomberg - 22-Oct-2010
Aluminum Corp. of China Ltd., the nation’s biggest maker, has shut 10 percent of its aluminum- producing capacity after local governments implemented power restrictions, according to analysts.
Smelting plants with a combined capacity of at least 400,000 metric tons were closed as local governments limit power use for industrial producers, Heng Kun, a Shanghai-based analyst at Essence Securities Co., said by phone today. The plants are in Henan, Guangxi, Guizhou and Shanxi, he said.
Shen Hui, a spokeswoman for Beijing-based Aluminum Corp., known as Chalco, declined to comment when asked about cuts.
“Our calculations show they have shut about 400,000 tons, around 10 percent of the company’s total output capacity,” said Wan Ling, a senior consultant at CRU International Ltd.
China, the world’s largest aluminum maker, has started to control production of energy-intensive industries such as steel and aluminum in some regions, as Beijing aims to meet the country’s energy-saving target set in its 11th “Five-Year Plan,” which ends this year. Energy represents as much as half the cost of making the metal used in cars, cans and airplanes.
Aluminum prices in Shanghai have surged about 19 percent since the end of June as smelters cut output on higher power tariffs and falling prices. Chinese authorities raised power surcharges for some smelters by as much as 100 percent from June to curb overcapacity.
Output Reductions
Jiaozuo Wanfang Aluminum Manufacturing Co., which is controlled by Chalco, cut capacity by 140,000 tons, and the output loss will be 30,000 this year, the Henan province-based company said on Oct. 18.
Chalco’s Zunyi Plant and Guizhou Plant, both in Guizhou province, halted a combined 200,000 tons of capacity, according to CRU’s Wan. The Pingguo Plant in Guangxi halted 80,000 tons and Shanxi Huaze Aluminum & Power Co. is also affected, according to Essence Securities.
Shares of Chalco lost 1 percent to HK$7.85 today, and are down 8.2 percent this year.
China will sell 96,000 tons of aluminum ingots from state stockpiles on Nov. 1 and Nov. 2, the National Development and Reform Commission said today on its website. This is about 20 percent of stockpiles reported by the Shanghai Futures Exchange, according to Bloomberg calculations.
“The sales of state stockpiles may very well be timed to counter lower supplies from Chalco and other producers,” said Beijing Capital Futures Co. analyst Xiao Jing.
SRB Stockpiles
China’s State Reserve Bureau, the government’s stockpiling agency which operates under the National Development and Reform Commission, bought about 590,000 tons of aluminum last year from domestic smelters. Commercial stockpiles of primary aluminum in China are at 400,000 tons to 500,000 tons, according to Beijing Antaike Information Development Co. estimates last month.
“It’s not a large amount given the current level of inventories in China,” said Pang Ying, an analyst at Shenzhen Rongtuo Trading Co. “The government probably wants to send a signal they are serious about combating inflation. They probably chose aluminum because that’s the metal they have most of.”

India orders construction halt at Vedanta refinery
BusinessWeek - 21-Oct-2010
India's environment ministry orders Vedanta Resources to immediately halt all construction work aimed at expanding its aluminum refinery in the state of Orissa.
The ministry said Thursday in a letter to Vedanta that the company illegally started construction work at the site even though it had not been given the required environmental clearances.
The ministry also asked the Orissa government to take legal action against the company.
The move comes two months after the ministry denied the London-based mining giant permission to mine bauxite for its refineries in eastern India, citing violations of environmental and human rights laws.

Oman Minister Eyes Sohar Aluminum Expansion Decision In 3Q 2011
Capital.gr (press release) - 21-Oct-2010
LONDON -(Dow Jones)- A decision on whether to develop the second phase of Oman's Sohar aluminum smelter is expected in the third quarter 2011, the country's minister for commerce and industry said Thursday.
Maqbool Ali Sultan told Dow Jones Newswires the development of phase two has been delayed due to limited natural gas supplies.
"Phase two is very important for all Sohar shareholders and Oman as well," he said. "The main problem for phase two is the gas. We're working on the gas availability and when we have the gas, then phase two of the smelter will go ahead.
"We will hear about the gas sometime in the second half of 2011, I think in the third quarter," he said.
Sohar Aluminum, owner of the smelter, plans to double its production capacity to 720,000 metric tons a year from its current 360,000 tons a year. Sohar Aluminum spent $2.4 billion to build the first phase of the smelter.
Sohar Aluminum is 20% owned by Rio Tinto Alcan, a unit of Anglo-Australian mining titan Rio Tinto PLC (RIO), 40% by Oman Oil and 40% by Abu Dhabi Water and Electricity Authority.

Government may halt Vedanta's alumina plant expansion
domain-B - 20 October 2010
Vedanta Resources' growth plans in India is likely to get another jolt with the government seriously considering a halt to the expansion of its alumina refinery in Orissa, citing serious violation of environmental laws.
The move, which comes two months after the government rejected the UK-based group's bauxite mining plans in the state, will affect Vedanta's plan to expand the Lanjigarh unit's capacity from one million tonnes to six million tonnes a year.
The ministry of environment and forests had, in August, asked the company to explain why green clearance given to its refinery should not be revoked after a probe found it violating laws, including sourcing bauxite from mines that did not have green clearance.
The company, however, denied regulatory violations of any kind at its Lanjigarhv refinery.

Jamalco exports down again
Jamaica Observer - Wednesday, October 20, 2010
Alumina exports earnings for 2010 now likely to be flat
A second month of decline in alumina exports from Jamalco — the larger of the two operational refineries in Jamaica — and lower-than-capacity sales by Windalco has positioned the country to repeat last year's lacklustre performance in export of the commodity.
Recent data from the Port Authority of Jamaica (PAJ) showed that Jamalco's alumina export fell by 12.2 per cent in September from year-earlier levels, following a 23.3 per cent decline in the prior month.
At the same time, 48,493 tonnes left Port Esquivel in Old Harbour, St Catherine, in September after the first set of shipments — totalling 50,599 tonnes — since it reopened its Ewarton plant in July was made by Windalco in August.
Windalco Ewarton expects to produce 321,000 tonnes of alumina for a half year's production from its 650,000-tonne capacity, but is exporting at a rate that will yield sales of closer to 250,000 tonnes for 2010.
What's more, Jamalco's exports for the first nine months of the year was 73,670 tonnes lower than the comparative period in 2009.
Even if the Clarendon-based operations attains last year's final quarter export levels of just under 370,000 tonnes, total export volume of alumina will likely come in at 1.57 million tonnes or 17.6 per cent lower than in 2009.
At present, alumina prices up to May this year were estimated to be 25 per cent higher than a year before. So if the prices hold Jamaica should see an modest increase in earnings from alumina this year of approximately three per cent.
On the other hand, crude bauxite export for Port Rhoades for the first nine months of 2010 stood at 4.04 million tonnes, or 56 per cent higher than the comparative period last year and higher than export of the commodity for all of last year. Bauxite prices up to May were tracking at 12.2 per cent above year-earlier levels.

IDC keeps quiet over smelter pollution
Legalbrief (subscription) - 19 October 2010
The Industrial Development Corporation of SA (IDC) has declined to comment on environmental studies of its Mozal aluminium smelter situated outside Maputo, in Mozambique.
A report in The Times notes the plant will emit poisonous gases such as sulphur dioxide and nitrogen oxide for six months starting in November during a 'bypass' while its two fume towers are repaired. Mozambican and SA environmental groups have questioned whether the bypass was the safest option during repairs, since 700 000 people live around the factory. Mozal said the emissions would not endanger the population and released documents for public perusal at the Mozambican Department of Environmental Affairs (Micoa) after pressure from media and NGOs. However, journalists can consult the documents at Micoa but cannot make copies. Activists have accused the company of double standards because it made the documents available in hard copy and electronically to interested parties concerning its activities in SA, but neglected to do so in Mozambique.

http://www.timeslive.co.za/africa/article707842.ece/IDC-keeps-MUM-over-Moz-polluting-smelter

China smelters eye spot alumina deals over term contracts
Reuters Africa - Oct 19, 2010
* Smelters not keen on index pricing for term contracts
By Polly Yam
HONG KONG, Oct 19 (Reuters) - Chinese aluminium smelters are shunning term contracts for raw materials for 2011, and instead are betting spot supplies will remain competitive, a gamble that may see some units shut or cut output if they get it wrong.
Annual contract prices of alumina, the key ingredient in aluminium smelting, are set to rise towards 16 percent of the price of primary aluminium on the London Metal Exchange.
India's state-run National aluminium Co (NALU.BO: Quote) (NALCO) sold 270,000 tonnes of term alumina for 2011 at 15.83 percent of the monthly average LME aluminium price on an FOB basis, compared to 15.055 percent for 2010 [ID:nDEL003436] [ID:BMA006531]
A trading source at an international trading firm and a Chinese smelter official said many in the industry see prices above 16 percent of the LME price in 2011 from 14.5-15 percent this year, for Australian alumina, the most popular origin to Chinese smelters.
"Above 14 percent, many Chinese smelters would lose money using imported alumina. If they cannot remain profitable, they would prefer production cuts," said an international trade manager at a large smelter.
Instead smelters are hoping that spot prices remain low allowing then to operate at profit, or buy cheaper Chinese origin material. But that also comes with a risk.
"What are they going to do? Buy in domestic market? They don't trust (other) domestic term contracts. They will have to buy spot and the market could change quickly," said a Western alumina producer source.
Foreign sellers say the reality is that many smelters have few options to secure stable alumina supplies in China as top domestic alumina producer Chalco (2600.HK: Quote) (601600.SS: Quote) prefers to sign term contracts and reliance solely on smaller alumina suppliers for spot deals is too risky.
Chalco has indicated 17.5 percent of Shanghai exchange prices <0#SAF:> for 2011 term shipments to local smelters, compared with 17-17.5 percent this year, smelter officials said.
LME aluminium MAL3 has risen nearly 20 percent in the second half of the year. Chinese aluminium prices SAFc3 gained 12 percent from the end of June to 16,390 yuan on Monday, capped by abundant supply in the world's top producing nation.
Still, high term prices for imported alumina have already spurred Chinese smelters to cancel at least one million tonnes of 2010 imports after strong LME aluminium prices pushed up term alumina prices above locally produced supplies for much of this year, smelter officials estimated.
Smelters bought Chinese spot alumina to replace imports, which dropped 22.4 percent in the first nine months of the year. In China, spot Chinese alumina traded at 2,700-2,800 yuan a tonne versus above 3,000 yuan for Australian term material.
"Many people are talking about 16 percent. We are thinking and have not offered yet," said an international trading firm broker whose firm sold term alumina to China.
China produced near 20 million tonnes of alumina in the first eight months of the year, up 38 percent from a year ago, and is expected to add at least 2.4 million tonnes of annual capacity next year.
Alumina demand was above 21 million tonnes in the first eight months of the year, based on the primary aluminium production for which two tonnes of alumina are needed for one tonne of metal production in China.
Adding to the uncertainty, smelters seeking new term imports also face a new price system as major Western alumina producers such as Alcoa (AA.N: Quote) plan to switch to index pricing. [ID:nN07254868]
"Basically, index pricing will use spot prices to lock up large amounts of term materials. We'd rather buy spot," said the smelter international trade manager, referring to spot buying in the international and domestic markets. (Editing by Ed Lane)

China Jiaozuo Wanfang Aluminium cuts smelting capacity
Reuters - Oct 18, 2010
SHANGHAI Oct 19 (Reuters) - China's Jiaozuo Wanfang Aluminium (000612.SZ) said on Tuesday it would cut its aluminium smelting capacity by one-third due to a shortage of electricity.
The company, which owns an annual aluminium smelting capacity of 420,000 tonnes, said it will reduce its capacity by 140,000 tonnes per year, effective immediately. (Reporting by Ruby Lian and Soo Ai Peng; Editing by Ken Wills)

Will Aluminum-Lithium Beat Composites for Narrow Body Airliners?
Gerson Lehrman Group - Oct 18, 2010
Aluminum-Lithium alloys will likely become the material of choice over composites for the fuselages of the next generation of narrow-body aircraft. Lighter than traditional Aluminum, the trade-offs between composites and the new lightweight alloys appear to be favoring Aluminum-Lithium.

click on the link above to read the full story

Your Daily Alumina
Resource Investor - Oct 18, 2010
We've all heard the lines about increasing global competition for natural resources.
The world is not the same as it was ten or even five years ago. New sources of demand have emerged for oil, iron, copper and natural gas. And competition for all of these resources has become fiercer.
This isn't just talk. Watching the news, you can see the signs of "elbows out" resource markets all over the globe.
Case in point: This week, metals and oil data provider Platts announced it will start publishing the world's first daily alumina price.
Traditionally, alumina (the ore that smelters use to make finished aluminum) has been priced indirectly. The industry simply used a percentage of the world price for finished aluminum. This was seen as an acceptable proxy for alumina demand.
But demand for the input commodity can be different than demand for the end metal. If smelters foresee a pickup in aluminum demand, they might start aggressively buying alumina in order to start turning out new product. In such case, alumina demand (and therefore price) might be going up even as aluminum metal prices stay relatively calm.
In the past, this wasn't a big deal. Alumina producers sold supply under long-term contracts to several buyers globally. The market was fairly orderly.
But with aluminum smelting capacity picking up in places like China, things are getting more complex. With more users (and more geographically diverse users), the global demand profile can change quickly.
Alumina producers (not to mention investors and traders) want to know about these changes. If a buyer in Shanghai is ramping up output and willing to pay more than a European smelter, producers want to shift supply to this higher-value market.
In order to make such adjustments, you need to be able to see emerging sources of demand. A daily price helps detect such.
Welcome to the competitive resource marketplace. It's more complicated and dynamic. Things change quickly, and everyone wants to be able to adjust in near real-time.
Long-term contracts are being shunned for spot pricing. Meaning that assured supply is getting harder to find.
This is one of the reasons we're seeing end-users of many commodities get aggressive in purchasing direct interests in mines and oil fields. If you can't secure supply contractually, you need to own the supplier.
Here's to your daily dose of alumina.

Cape Alumina: Law makes bauxite mine unviable
MarketWatch - October 18, 2010
Cape Alumina's decision to scrap a $1.2 billion dollar bauxite project in Queensland due to environmental laws shows a "cloud of uncertainty" is settling over part of the state, an analyst says.
Cape Alumina on Monday said its Pisolite Hills project had been rendered unviable by the Queensland's Wild Rivers declaration.
The laws were introduced to curb development around near pristine rivers, and the Pisolite Hills project was subject to 500 metre-wide buffers around high preservation areas.
Cape Alumina said the decision would reduce the amount of bauxite able to be mined at its project site by 45 per cent, rendering the project unviable.
"It does throw a huge cloud of uncertainty over the area in terms of whether companies will spend further dollars on production and development up there," said Mine Life resources analyst Gavin Wendt.
"All of a sudden the Queensland government has come in an effectively changed the rules.
"Other companies that were spending money up there would be thinking twice and giving priority to areas elsewhere," he said.
Cape Alumina managing director Dr Paul Messenger said Queensland would be denied $1.2 billion in new economic activity and hundreds of jobs.
The project was to have cost about $400 million, with $21 million already invested.
"This project would have been a boon for the traditional land owners and Aboriginal people of western Cape York, providing them with a rare opportunity to gain social and economic independence and prosperity," Mr Messenger said.
Cape Alumina remained in a trading halt on Monday.

China's Power Restrictions Affect Aluminum More, Macquarie Says
BusinessWeek - October 16, 2010
China’s power restrictions “has been greater and is likely to be more long-lasting on aluminium than on steel,” Macquarie Group Ltd. said in a report.
Macquarie has a “positive view” on aluminum prices for the fourth quarter, according to the report dated Oct. 18. “However, any near-term strength in aluminium prices would encourage the quick ramp-up of new projects next year, once the pressure from Beijing eases.”
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

Vimetco sees brisk aluminum demand in 2011
SteelGuru - 16 Oct 2010
Reuters reported that the global aluminium market is buoyant, demand will remain brisk and prices are likely to average USD 2,300 per tonne to USD 2,400 per tonne in 2011.
Mr Frank Mueller CEO of Vimetco said that "We've seen big demand in the second half of 2010 and we expect further strong growth in demand worldwide. We could sell more than we have available. The price now is a good price for aluminium we see it averaging USD 2,300 to USD 2,400 next year it's justified by the fundamentals."
Vimetco is a vertically integrated producer, owning a bauxite mine in Sierra Leone along with an alumina refinery, aluminium smelter and rolling mill in Romania. It has the capacity to produce just over 1.0 million tonnes per year of primary aluminium. But this will rise to 1.115 million tonne per year next year with the completion of an expansion in China which will take smelter capacity there to 850,000 tonnes per year.
Mr Mueller said that we're very focused on downstream; looking to increase output of added value products. As part of this Vimetco plans to boost capacity at its Alro rolling mill in Romania to 120,000 tonnes by 2015 from 40,000 tonnes. The 265,000 tonne per year Romanian smelter is operating at a reduced rate and is expected to produce 206,000 tonnes in 2010.
He said that the plant had an electricity contract until 2018 which related to a continued production volume of 206,000 tonnes. The Tulcea alumina refinery in Romania is running below capacity for technical reasons, because at full capacity the plant would need maintenance and cleaning.

Borehole in Southwest Iceland Looks Promising
IcelandReview - 15.10.2010
At a meeting about the aluminum smelter which is being constructed in Helguvík on Reykjanes peninsula in southwest Iceland, held at the Ministry of Industry yesterday, it was revealed that experimental drilling at the peninsula’s high temperature geothermal area has been successful and that the area is likely to be able to provide the smelter with sufficient energy.
The project which has gone through delays might now be up and running again. The executives of Nordurál – Century Aluminum, who will operate the Helguvík smelter, have decided to focus on constructing it in three 90,000-ton stages, Morgunbladid reports.
The annual production capacity of the smelter will thus be 270,000 tons but not 360,000 tons as originally planned. CEO of Nordurál Ragnar Gudmundsson said the fourth stage will be worked on when circumstances allow.
According to Morgunbladid’s sources the company can continue with the project’s execution as soon as an agreement on energy purchase and necessary permits are at hand.
Mayor of Gardur Ásmundur Fridriksson said it is positive that Nordurál is now prepared to focus on completing the smelter’s first three stages because then it will be easier to ensure the required energy.
At the meeting it was also revealed that planning issues in Grindavík are moving ahead and it is believed that an agreement between the energy company HS Orka and the municipality regarding a power plant in Eldvörp is underway.
“We have become more optimistic,” Fridriksson said after the meeting.
The construction of the aluminum smelter in Helgavík and connected power plants will take six to ten years. In that time around 2,000 jobs can be created.
The Sudurnes region on Reykjanes peninsula is harder hit by unemployment than any other region in Iceland.

Aluminum: Recasting Alcoa
TIME - 15-Oct-2010
Two thermal rods and a souped-up golf cart could save Alcoa $47 million this year. The STARprobe project that depends on them first came online at Alcoa's Deschambault smelter, located just outside Quebec, in June. Rods are dipped into an orange bath of molten cryolite and alumina in each of the plant's 264 pots, the steel basins in which aluminum is made. Temperature readings are then sent wirelessly to the cart and recorded on a space-age computer deck in eight languages.
The instant readout not only saves time but is also helping save Alcoa. "This is literally a process that took 16 hours in a lab just three months ago when it was done manually," says Geff Wood, manager for global primary-metals manufacturing and process-control systems. "Now it's mistakeproof, it's safer for our employees, it extends the life of the pots, and its cost is made up one week after implementation."
Read more: http://www.time.com/time/magazine/article/0,9171,2025155,00.html#ixzz12UvyiO4p

Yunnan Aluminium to establish JV with parent company and strategic investors
SteelGuru - 15 Oct 2010
Yunnan Aluminium its parent company Yunnan Metallurgical Group and other strategic investors plan to establish CNY 720 million JV.
The JV will build 300,000 tonne aluminum alloy technology upgrade project in Qujing City Yunnan Province. Yunnan Aluminum will invest CNY 432 million while Yunnan Metallurgical Group and other investors will together spend CNY 288 million on it. Project spending will total CNY 3.24 billion of which CNY 1.8 billion will be used on the first construction phase and CNY 1.44 billion on the second.
The project will take 4 years to complete and will be put into use in 2014. It will bring in CNY 4.98 billion in annual sales income at full production capacity.
(Sourced from www.capitalvue.com)

Official sees Boguchansky smelter reaching full capacity in 2016
HydroWorld - October 14, 2010
Russia's Boguchansky aluminum smelter in the Krasnoyarsk Region is expected to reach its full annual production capacity of 600,000 tonnes in 2016, Mikhail Bershadsky, the region's minister for economy and regional development, said Thursday.
He also said that the plant was expected to produce 70,000 tonnes of aluminum in 2013 at first and increase production to 150,000 tonnes in 2014.
The launch of the first production stage of the smelter has been postponed to 2012 from 2010 planned earlier.
The Boguchansky aluminum smelter is constructed along with the Boguchanskaya GES hydropower plant and is being financed by hydropower producer RusHydro and aluminum maker United Company RUSAL.
Copyright 2010 Prime-Tass Business News Agency All Rights Reserved

A mixed year for Mubadala
MEED (subscription) - 15-21 October 2010
Abu Dhabi developer awards three big contracts but cancels two tenders. Projects expected to move forward quickly look set to be delayed
Mubadala has had mixed fortunes in 2010. It has been the most active developer in Abu Dhabi with the award of three major building contracts – the $218m (AED800m) Rosewood Hotel, the estimated $1.5bn New York University and, through its development manager Aldar Properties, the $1.3bn Cleveland Clinic.
But the success of the contract awards is tempered by two high-profile tender cancellations. In February, the investment fund cancelled the tender for the estimated $1.6bn Tawam hospital in Al-Ain. It has now put its estimated $1.4bn football stadium project on hold after receiving bids from contractors for the design and build contract in June.
The two cancellations, although very different projects, have a common theme: In both cases Mubadala said the decision to cancel the tenders was a government move, not its own.
For the projects it is developing itself, Mubadala’s plans are also being scrutinised more than ever following its announcement in late September that it had made losses of $1.2bn. The planned MGM development on Abu Dhabi island is already under review and there is now an expectation that many of the projects that were expected to move ahead quickly will now be delayed.
The government has a vested interest in making sure Mubadala’s plans stack up financially. It has given the firm a capital injection of $3.5bn to cover its most recent losses. This does not mean Mubadala will just stop spending.
The announcement that it plans to develop a $7bn aluminium smelter in Malaysia demonstrates there are funds available if the business plan is strong enough. The worry for firms looking for work in Abu Dhabi is that Mubadala and the government no longer find the same level of robustness at home. Outside the construction and real-estate sectors, there is a broader concern for the wider economy. If the government is not investing in Abu Dhabi’s infrastructure then neither will the private sector.

Mozambique: External Environmental Monitors Working At Mozal By Paul Fauvet
AllAfrica.com - 13 October 2010
Maputo — A team from the Swiss company SGS has arrived in Mozambique and has begun monitoring the environment at and around the Mozal aluminium smelter at Beluluane, on the outskirts of Maputo.
SGS has been hired to monitor the emissions from Mozal during a period of four and a half months when the smelter's fume treatment centres (FTCs) will operate without filters.
Mozal insists that all the projections show that, while emissions will increase during this period, the amount of pollutants emitted (mainly hydrogen fluoride, dust and tars) will be well below the limits stipulated by the World Health Organisation (WHO). The SGS monitors will be on hand to check that this is indeed the case.
SGS is the largest company in the world providing testing, inspection, verification and certification services. It has a reputation as a tough and disciplined company, and its findings are generally regarded as reliable.
In the last fortnight of October, the SGS team will monitor the emissions of Mozal with the FTC filters working, which will provide a baseline against which to test emissions when the filters are bypassed in order to rebuild the FTCs.
Although it has become conventional to talk of a six month bypass operation at Mozal, in fact the smelter plans to operate without FTC filters from 1 November to 17 March - a total of 137 days.
The Mozal management is at pains to stress that the bypass is not something it would embark upon unless it were absolutely necessary. The cost of rebuilding the FTCs is put at about 10 million US dollars, and that is money that Mozal would rather not spend. But it has no choice: the FTCs are in a structurally dangerous condition and might collapse ...

Read the entire article by clicking on the link above

Kaiser Aluminum to buy Alexco assets for $90M
BusinessWeek - October 13, 2010
Kaiser Aluminum Corp. said Wednesday it bought the assets of aerospace industry supplier Alexco LLC for $90 million.
Kaiser said it will pay for the acquisition with cash on hand and expects the deal to close in December.
The company said Alexco's hard alloy extrusions would complement Kaiser's sales of aluminum products for aerospace companies. Aluminum extrusions are used in the production of many products, including airplane wings and fuselages, automotive parts and drilling equipment.
Alexco is based in Chandler, Ariz.
Kaiser shares rose 34 cents to close at $46.11

Aluminium firms enter power production to lower losses
Sify - 14-Oct-2010
Power is the new buzz word for aluminium manufacturers in India. In a bid to protect the bottom line from the fluctuating price movement of the metal in the international market, companies like National Aluminium Company (Nalco), Vedanta Aluminium among others, are all set to emerge as independent power producers.
This will also help them get cheap power, whose rising prices are putting pressure on the manufacturing cost of the metal.
"Our intention behind entering into power production is to protect the bottom line of the company from fluctuating London Metal Exchange prices," A K Sharma, director (production), Nalco said.
Aluminium prices have witnessed major swings in the last three years. At the peak of global economic activity, prices of the metal had reached an all time high of $3,400 a tonne in 2008 which dropped 47 per cent to reach at $1,800 a tonne in August 2009.
On the back of tangible improvement in the economy, the metal is now hovering around $2,400 a tonne, up 30 per cent from the price in August 2009.
These fluctuations have their reflection in the annual result of companies like Nalco which posted a 36 per cent drop in net profit to Rs 814.22 crore during FY10, as compared to Rs 1,272.27 crore in the previous financial year.
Talking about entering power production, Sharma said, "We feel that the power deficit scenario in India is going to continue for next 10-15 years, which prompts us to enter into independent power production space. As rates for merchant power is higher, we will be able to fetch higher price for the power produced from our IPP," he said.
Nalco is one of the bidders of the proposed 4,000 Mw capacity ultra-mega power plant (UMPP) in Orissa , he added.
The company is also mulling to build an independent power project in Orissa in collaboration with one of the state power agencies along with wind mill projects.
"We have received bids to set up wind mills to produce power. These units will be strictly on build-operate-transfer basis and will be constructed by third parties," Sharma said.
It is not only Nalco that is betting big on power production segment, Vedanta Aluminium, a subsidiary of London-listed Vedanta Resources Plc has also entered into power production segment with setting up of 2,400 Mw independent power plant at Jharsuguda in Orissa with the first unit of 600 Mw commencing operation recently.
"We need enough power to feed our existing smelter along with future requirement of power that will arise with our expansion plan," Mukesh Kumar, chief operating officer of Vedanta Aluminium said.
He also said that though company's Jharsuguda unit was basically for trading power, but would draw power to its smelter in case of any deficit.
"We will sell power to our aluminium smelter which has some cost advantage due to saving on transmission charges and other costs," Kumar added.
"We may consider transferring some power to smelter during severe power deficit. But, that will be strictly for a short-period," Sharma said.
Referring to this matter, an analyst with a Mumbai-based brokerage firm said that rising power deficit in the country along with uncertainty over coal block allocation for captive use were some of the factors driving this diversification.

Aluminum import in to China may surge 5 million tonnes by 2015 - Harbor
SteelGuru - Thursday, 14 Oct 2010
According to research group Harbor Intelligence, the import demand for aluminum in China might increase 25 times to 5 million tonnes in 2015 due to the strong local demand.
Also, China’s demand for aluminum may increase by 12.9% annually from 2011 to 2015. The production growth will increase by 9.8% per year. Meanwhile, the increasing demand and shortage of supply may drive up the price of the metal and benefit major producers such as Alcoa.
The price of aluminum has gain 23% to USD 2, 390 per tonne since the beginning of the year. Accordingly, it boosts the global usage of metal by 13%. However, China’s government still shut down smelters with inefficient energy consumption despite of the increasing demand.
(Sourced from YIEH.com)

Rio Tinto Alcan weighing developing projects
Metro Canada - Ottawa - October 13, 2010
MONTREAL - Aluminum demand has been picking up but weakness in the global economy continues to weigh heavily on Rio Tinto's plans for several costly development projects in Canada, the head of the mining giant's aluminum business suggested Wednesday.
"What makes us cautious is the macro-economics," Rio Tinto Alcan CEO Jacynthe Cote told reporters.
"Are we totally out of the recession, will the economy continue growing moderately in 2011 and will we still have significant inventory of aluminum in the world."
Rio plans to invest up to US$6 billion on various projects in Quebec as it begins to reopen the purse strings for several global development projects.
Work on the Kitimat smelter upgrade and other development projects was slowed in 2009 because of the global recession, which depressed aluminum demand and prices.
Aluminum prices have rebounded, rising to about US$2,300 per tonne this fall as demand has exceeded forecasts earlier this year. But they remain below pre-crisis levels and will remain so until aluminum inventories decrease, Cote added.
While she wouldn't indicate which way the company was leaning as it prepares its spending budgets for next year, Cote said she's "fairly relaxed" because the company continues to invest hundreds of millions in three projects in Quebec and British Columbia.
Among them is a pilot plant for its AP50 technology, which will improve productivity by 40 per cent. The company broke ground on the Saguenay, Que., facility a few months ago and has received approval to spent $429 million.
It is also building a new high-efficiency, 225 megawatt turbine that will increase energy capacity at its Shipshaw power station. The $250-million project is slated to be completed by the fourth quarter of 2012.
Rio is spending $578 million preparing its smelter in Kitimat, B.C., for an upgrade using Rio Tinto Alcan's proprietary AP technology.
Earlier, Cote told business leaders that developing countries are primarily responsible for a "palpable" improvement in global demand being experienced by the aluminum industry amid an economic recovery.
"It is real, but it's still fragile and uneven," she told the Montreal Council on Foreign Relations.
The Montreal-based aluminum producer's biggest international clients in construction and transportation were hit hard by the economic crisis.
"What we've seen since the outset of 2010 is an across-the-board improvement, to the extent that in most of our markets, sales are exceeding our forecasts from the beginning of the year," Cote said.
Demand was up 17 per cent in the first three quarters of 2010 over 2009. By the end of 2010, global demand will exceed 40 million tonnes and should increase by 13 to 14 per cent.
Emerging countries are driving the improvement while the U.S. recovery remains fragile and some European countries are "stuck in neutral," she said.
Aluminum demand is benefiting from growing economies like those in China, Brazil and India. As societies become richer, they use more aluminum, which is good for the industry, including the aluminum division of Rio Tinto plc (NYSE:RTP), Cote said.
For example, annual per capita aluminum demand in developed countries is 20 kilograms. It's currently one kilogram in India, five kilograms in Brazil and Indonesia and 10 kilograms in China, she said.
Cote said Rio Tinto Alcan forecasts that global demand will nearly double over the next decade and grow at an average rate of four to five per cent over 20 years.
"To sustain that pace, the industry will have to build a network nearly as large as our facilities in Saguenay-Lac-Saint-Jean (Que.) every nine months," she said.
Quebec is the focus of much of Rio Tinto Alcan's plans.
Since 1990, it has increased aluminum production in the province by 80 per cent, while reducing greenhouse gas emissions by 40 per cent.
Quebec produces seven per cent of the world's aluminum — as much as the United States — and ranks third in the world behind China and Russia.
Rio Tinto Alcan was formed in 2007 following the US$38.1-billion acquisition of Canadian-based Alcan Ltd. by Rio Tinto plc. (NYSE:RIO).
Rio Tinto is one of the world's largest miners with operations spanning the globe. The Anglo-Australian company's major products are aluminium, copper, diamonds, energy (coal and uranium), gold, industrial minerals and iron ore.

Showa Denko to Establish New Unit for Implementation of Alumina Project
Webnewswire.com (press release) - Oct 13, 2010
Showa Denko K.K. (SDK) has decided to establish a new unit within its Inorganics Sector effective October 16, 2010 to carry out its chemical alumina project in Indonesia.
As announced in the news release of August 31, 2010, SDK will build a new chemical alumina plant in West Kalimantan, Indonesia, jointly with Antam.
The new unit, named Alumina Project, will provide technical support to the construction work and assist Antam in conducting business after start-up of the new plant.

Majority of aluminium money does not stay in Iceland
IceNews - 12-Oct-2010
The majority of funds that went to build the Karahnjukar hydroelectric dam in East Iceland have not found their way back to the Icelandic state and last year more than half of Alcoa’s export revenues were sent overseas.
A new report into the effects of heavy industry on eastern Iceland has just been released. One of the conclusions of the report is that the foreign labour force used to build Karahnjukar was far bigger than predicted – at around 80 percent of all workers. The huge size of the project, the then-low unemployment and the then-high value of the krona are named as reasons.
The report also says that only a portion of the damming costs stayed in the country. Of the ISK 140 billion invested, only a third actually went into the Icelandic economy. The report says that the Alcoa aluminium smelter in Reydarfjordur (which the Karahnjukar dam was built to power) cost ISK 126 billion overall; but of that figure, only ISK 36 billion stayed in Iceland. There is no way of knowing what percentage of the money stayed in the east of Iceland, RUV reports.
On the positive side, the smelter continues to return funds to the economy. Last year it exported ISK 74 billion worth of aluminium and bought electricity from Landsvirkjun for at least eleven billion. The report calculates that ISK 28 billion (or around 40 percent of the export value) remained in the Icelandic economy. That is somewhat higher than previously estimated – partly because tax has been added to the purchase of electricity since the plant opened, thereby increasing tax payments to the treasury.

Director of Hungarian toxic spill firm arrested
Sacramento Bee - Oct. 11, 2010
BUDAPEST -- The managing director of MAL Ltd., the owner of the plant behind last week's catastrophic toxic waste spill in Hungary, has been arrested, Prime Minister Viktor Orban told parliament on Monday.
Orban repeated that the toxic spill was not being treated as a natural disaster, but as negligence.
"The factory was built and operated by humans, and it was the release through carelessness of the man-made hazardous material that caused Hungary's most serious ecological catastrophe," Orban said.
The aluminum plant near Ajka, western Hungary, should be brought under state control and its assets frozen, Orban said.
The prime minister was speaking a week after close to a million cubic metres of toxic red mud spilled from a waste storage reservoir, killing seven people and covering villages and large areas of countryside.

Moscow Region new factory to produce 1 billion aluminum cans per year
SteelGuru - 11 Oct 2010
A representative of the Moscow Region’s Ministry for Foreign Trade Affairs said that the Can Pack Group has opened a new aluminum can factory in the Moscow Region’s Volokolamsk district that is able to produce 1 billion cans per year.
The spokesperson said that this new factory in Volokolamsk has a completely automated beverage can production line and is able to make up to 1 billion cans per year. The factory has also been prepared for the installation of a second production line, increasing the factory’s capacity to 2 billion cans. Investment in the project totaled about USD 120 million.
He said that establishing the factory helped create 180 new jobs. People working in the factory have all completed training courses at the company’s other facilities. This production facility meets all Russian and international environmental standards

Mubadala, 1MDB reinforce strategic relationship with major investment
AME Info - Saturday, October 9 - 2010
Abu Dhabi's Mubadala Development Company (Mubadala) has today signed two collaboration agreements on a strategic partnership with 1Malaysia Development Berhad (1MDB) that could lead to significant increases in FDI in Malaysia.
The agreements have been signed with Mubadala Real Estate & Hospitality (MREH) and Mubadala Industry (MI). MI has agreed to assess the viability of an investment of up to $7bn for the development of a major initiative in the aluminium sector based on hydro power in the Sarawak Corridor of Renewable Energy (SCORE).
The two state-owned companies are starting preliminary assessment work on the project, which will create more than 10,000 jobs during construction and another 2,000 specialist jobs.
MREH has agreed to collaborate with 1MDB to explore the potential joint development of key strategic projects within the Kuala Lumpur International Financial District (KLIFD), the 34.4 hectare development in Kuala Lumpur that is being led by 1MDB. The full scope of MREH's participation in projects to be located within the KLIFD will be finalized in 2011 following completion by 1MDB of the KLIFD master plan.
KLIFD will provide a state-of-the-art home for world-class institutions operating in Malaysia's financial system, including major international banking and financial institutions, financial services, investment houses and regulators. KLIFD will further cement Malaysia's position as a leader in global Islamic finance. It is a key component in Greater KL, which is identified as a National Key Economic Area (NKEA) to move Malaysia's capital city up the value chain in the global economy.
Prime Minister Dato' Sri Mohd Najib Tun Haji Abdul Razak and His Excellency Khaldoon Khalifa Al Mubarak, Chairman of the Executive Affairs Authority of the Government of Abu Dhabi and Chief Executive Officer and Managing Director of Mubadala Development Company, witnessed the signing by 1MDB Chief Executive Officer, Mr Shahrol Halmi, and Mubadala Chief Operating Officer, Mr Waleed Al Mokarrab Al Muhairi.
H.E. Al Mubarak's visit is a strong expression of Abu Dhabi's confidence in Malaysia and Mubadala's commitment to partner with 1MDB.

Fierce bidding expected from S Korean firms for Maaden rolling mill
SteelGuru - Saturday, 09 Oct 2010
The US’ Fluor is expecting bids for the engineering, procurement and construction package on the USD 2.5 billion aluminum rolling mill project at Ras Al Zour in Saudi Arabia to be submitted by November 5.
The companies planning to submit bids for the contract include the South Korean trio of Samsung Engineering, Daelim and Hyundai Heavy Industries.
According to sources, the bids from the South Korean contractors are going to be competitive for this billion dollar project. Fluor is pushing ahead with an engineering, procurement, construction and management strategy and will execute the projects in a number of packages. The rolling mill is owned by JV of Saudi Arabian Mining Company and US based Alcoa. Most of the major equipment for the facility has also now been procured.
The rolling mill is part of USD 10.8 billion aluminum complex and will have a capacity of up to 450,000 tonne per year when completed in the Q4 of 2013. The site will also include 1.8 million tonne per year alumina refinery and a 740,000 tonnes per year aluminium smelter with 4 million tonne per bauxite mine being built at Al Baitha. Maaden holds 74.9% stake in the aluminium complex while Alcoa owns the remaining 25.1%.
(Sourced from MEED)

Foster Wheeler Awarded Contract for a New Delayed Coking Unit in Argentina
Kansas City Star - 08-Oct-2010
Foster Wheeler AG (Nasdaq: FWLT) announced today that its Global Engineering and Construction Group has been awarded a contract by YPF.S.A. for a new delayed coking unit to be built at YPF’s Complejo Industrial La Plata in Argentina. Foster Wheeler’s scope of work includes detailed engineering, procurement services and support to construction and plant start-up.
The terms of the agreement were not disclosed and the contract value was included in the company’s second-quarter 2010 bookings.
The unit will use Foster Wheeler’s leading Selective Yield Delayed Coking (SYDECSM) technology. The planned new facility will have a capacity of 28,000 barrels per stream day, and will produce anode coke to be used in the aluminum industry.
“Foster Wheeler has been working with YPF since 2008 to develop the right coking solution for the Complejo Industrial La Plata and remains committed to working towards the successful completion of the new facility,” said Umberto della Sala, president and chief operating officer, Foster Wheeler AG.
Foster Wheeler’s SYDECSM process is a flexible thermal conversion process used by refiners worldwide to upgrade heavy residue feed and process it into high value transport fuels and coke products for fuel and metallurgical markets. The SYDECSM process can be designed to maximize clean liquid yields while minimizing fuel coke yields, or to achieve other objectives, for example, to minimize heavy gas oil yields or to produce specific grades of coke for industrial use. Foster Wheeler is a market leader in delayed coking and has supplied its process technology worldwide for over 80 new cokers and has implemented more than 70 delayed coker revamps.

Read more: http://www.kansascity.com/2010/10/08/2290321/foster-wheeler-awarded-contract.html#ixzz11q6LIXMl

Vietnam set to export alumina from March 2011
SteelGuru - Friday, 08 Oct 2010Reuters reported that Vietnam is scheduled to start exporting alumina from a bauxite complex in the Central Highlands from March 2011 while construction of another nearby bauxite project was ready to begin.
A member of the bauxite project's management committee in Lam Dong province said that the USD 460 million Tan Rai alumina plant invested in by state mining firm Vinacomin would start operating next February and its first products were expected in March.
(Sourced from Reuters)

Alcoa moves to alumina index price, Aviles ramps up
Reuters - Oct 7, 2010
NEW YORK (Reuters) - Alcoa Inc (AA.N), the largest U.S. aluminum producer, expects both its Aviles smelter in Spain and its alumina refinery in Sao Luis, Brazil to be running at full capacity by the end of the year.
Company executives also said on Thursday that the world's biggest alumina producer is changing the way it prices its alumina, an intermediate material used to produce aluminum.
"During the (third) quarter, we restarted production at Aviles and anticipate achieving full capacity by the end of this year," said Chief Financial Officer Chuck McLane, speaking to analysts on a conference call after reporting earnings.
Looking to next quarter, he said, Alcoa expects production at Aviles to increase by 25,000 tons as it ramps up.
Alcoa reported a lower third-quarter profit, but beat consensus estimates and raised its outlook for global demand.
Its revenue rose 15 percent on higher volumes in aerospace and increased market share in the building and construction market, with greatest strength coming from China, India, Russia and Brazil. (Graphic link.reuters.com/cys47p)
In June, the entire area surrounding the smelter in Aviles, Spain flooded, forcing the facility to shut down. Significant repair work allowed the smelter to begin operating in August.
In Brazil, McLane said, the Alumar alumina refinery in Sao Luis operated at an annual run rate of 2.9 million tons by quarter end and remains on track to achieve full production run rates of roughly 3.5 million tons by the end of 2010.
Chairman and Chief Executive Officer Klaus Kleinfeld added that the Juruti bauxite mine and the Sao Luis alumina refinery achieved record production levels in September.
"Even though we had to overcome failures of the ship unloader, we expect that we have a permanent solution in place by the end of this month. And in general we are on track to achieve full production by the end of this year," he said.
Alcoa's third quarter alumina production was up by 157,000 tons. Kleinfeld said increases at Sao Luis, Pinjarra and Surinam were slightly offset by a reduction at its Point Comfort, Texas refinery.
For the fourth quarter, McLane said Alcoa sees its global alumina output rising by 150,000 tons over the third quarter.
For overall global supply, Alcoa estimates a 450,000-tonne surplus from China, and a 200,000-tonne deficit from the West.
Kleinfeld also said Alcoa is in the process of changing the way it prices its alumina, away from linking to a percent of the London Metal Exchange aluminum price and using instead a basket of indexes to better reflect underlying costs.
"We have been successfully concluding contracts for our 2011 volume, using a monthly average of a basket of different published alumina prices, not favoring one over the other. I think that is much fairer than pricing that existed before."
He said the new pricing scheme better reflects the cost structure for the alumina industry, including ocean freight, oil, gas and coal compared with the traditional LME aluminum price. An alumina index price also gives more flexibility and reflects alumina's short-term volatility.
Kleinfeld said Alcoa is currently completing alumina contracts on the new pricing basis, with about 20 percent of its customer volume coming up every year.
"So, it will take awhile until this will ripple through the system. But I think the customer understands why a change like that is needed. Because frankly, alumina has very different cost drivers from aluminum," he said.

Vedanta revises production plan
Independent - Friday, 8 October 2010
Vedanta Resources confirmed yesterday that it has postponed its planned aluminium expansion after it was denied a licence to mine bauxite by the Indian government in August.
The world's biggest zinc producer said that it had reviewed its capital expenditure plans after India's environment ministry scotched its proposal to build the mine in the tribal area of Orissa state, on environmental concerns.
The statement came as part of a production report, which showed that Vedanta's output of refined zinc grew by 25 per cent in the second quarter, to 176,000 tonnes. Zinc is the group's most profitable commodity, accounting for more than 40 per cent of its earnings.

BPA to extend Intalco power deal one year
Bellingham Herald - 07-Oct-2010
The Bonneville Power Administration has announced its intention to offer a one-year power supply extension to the Alcoa Intalco Works aluminum smelter west of Ferndale that would help to secure the facility's 500 jobs through May 2012.
Intalco's current power deal with the federal agency had been set to expire a year earlier, in May 2011.
Intalco workers have been living with job insecurity for years as Alcoa, BPA and other power users wrangled over how much cheap hydroelectric power should be allotted to the smelter here, and under what terms. The company's use of 320 megawatts of power is roughly equivalent to one-fourth the power consumption of the city of Seattle.
Some public utility district officials argue that BPA should reserve its limited supply of cheap Columbia River hydropower for them. But BPA Administrator Steve Wright has argued that the Intalco smelter is a net economic benefit to the region, creating an estimated 1,500 indirect jobs in addition to the direct payroll of about 500.
Because of their huge appetite for power, aluminum smelters can't operate profitably without cheap power sources. In an earlier era of abundant hydropower, smelters flourished across the Northwest. Most of those smelters shut down during the power crisis of 2000-01. Intalco was idle too for a time, but it managed to reopen and maintain production at about two-thirds capacity.
The power contract extension won't be official until other power users in the region have a chance to comment on it.
BPA is also in the process of trying to work out a longer-term deal that would make smelter operations more of a long-term proposition.
U.S. Rep. Rick Larsen, D-Everett, said the long-term deal remains key.
"It's great news that BPA is moving forward to extend this contract for a year," Larsen said. "It will be even better news when a long-term contract is established and finalized."
Reach JOHN STARK at 715-2274 or john.stark@bellinghamherald.com .

Vedanta bags GMDC bauxite mining deal
Economic Times - 05-Oct-2010
AHMEDABAD: London-listed Vedanta Resources has won the bauxite mining bid for Gujarat Mineral Development Corporation (GMDC). The Anil Agrawal-owned company will get 5 lakh tonne of bauxite from GMDC-owned mines. With ample supply from Gujarat mines, Vedanta can run its Orissa-based refinery with the fullest capacity. Leading mineral companies like Aashapura Minechem and Alpine Miners were also in the fray to get the bid in their favour. GMDC has 9.12 lakh tonne of bauxite reserves.
Vedanta wants to use the sea route to bring Gujarat bauxite to Visakhapatnam. From there it can reach the refinery by road or railway. The company requires minimum 60 lakh tonne of bauxite every year to run it’s refinery with 100% capacity utilisation.
“We own a group of bauxite mines at Gadhshisa in the Kutch. Out of that we invited the bid for 5.7-lakh tonne of bauxite, which has been won by Vedanta,” said VS Gadhvi, MD of state-owned GMDC. Vedanta had made a bid at Rs 648 per tonne. “Vedanta could start mining these reserves in 10 months. The company has already deposited 25% of the bidding amount with us and it would lift 60,000 tonne of ore from the mines,” Mr Gadhvi added.
Normally traders are active in the exports of such medium grade metallurgy bauxite. But with Vedanta winning the bid, it will be used within the country. Other metal companies are also showing interests in GMDC reserves.
GMDC will receive Rs 33 crore from sale of these reserves. Besides, Rs 8 crore will go to the Gujarat government in the form of royalty. Thus total bidding costs for Vedanta arrives at Rs 41 crore. Jamnagar is the largest district in Gujarat with 60 million tonne of bauxite reserves while others include Porbandar (20 million tonne), Amreli and Sabarkantha.
After the environment and forests ministry rejected Vedanta’s bauxite mining project in Niyamgiri hills in Lanjigarh, the company is looking for bauxite reserves in other states. Company officials also confirmed that they are prospecting the raw material in other part of the country.
Vedanta had set up its 1 million-tonne alumina refinery in Orissa in 2008, and has been sourcing it’s bauxite requirements from Andhra Pradesh, Chhattisgarh, Jharkhand and Gujarat. Though Gujarat has plenty of bauxite, it suffers on quality parameters.
“Bauxite in the state contains higher level of silica which has to be reduced to half,” said one of the senior officials at the state mining ministry.

Red sludge floods towns in western Hungary, 2 dead
The Associated Press - 04-Oct-2010
BUDAPEST, Hungary — The reservoir of an alumina plant in western Hungary burst on Monday, flooding several towns with towering waves of red sludge. Two people died, seven were missing and several dozen were injured, rescue services said.
The spill of an estimated 600,000-700,000 cubic meters (yards) of sludge affected seven localities near the Ajkai Timfoldgyar plant in the town of Ajka, 160 kilometers (100 miles) southwest of Budapest, the capital.
In Devecser, the sludge flooded some 400 homes, and 40 people had to be rescued in the neighboring town of Somlovasarhely. In Kolontar, the rushing sludge reached a height of two meters (6.5 feet).
The sludge, a waste product in aluminum production, contains heavy metals and is toxic if ingested, the National Disaster Management Directorate said.
Some 120 people, including six who were seriously hurt, were treated by medical staff. Two of the injured were in life threatening condition. The most common injuries caused by the caustic sludge were burns on the skin and eyes, said Jozsef Czirner, the regional rescue service director.
The disaster agency said 390 residents had to be temporarily relocated and 110 were rescued from the flooded towns.
Army vehicles, two helicopters and some 40 soldiers were sent to assist with rescue efforts, state news wire MTI reported citing the defense ministry.
Police were also investigating the cause of the incident, MTI said.

Noranda Reaches Agreement with United Steelworkers Union
Benzinga - 04-Dec-2010
Noranda Aluminum Holding Corporation (NYSE: NOR) (“Noranda”) is pleased to announce a new five year labor agreement at its alumina refinery in Gramercy, Louisiana. On October 1, 2010, the agreement between Noranda Alumina LLC and the United Steelworkers of America Local 5702 was ratified by the refinery's union members. Approximately 350 Noranda employees are covered under this contract.
“We are pleased with the outcome of negotiations with the Steelworkers' leadership and the ratification by the union membership,” said Noranda's President and CEO, Layle K. “Kip” Smith. “This five year agreement is an important element to support sustainable operations in our integrated upstream business.”
Noranda Aluminum Holding Corporation is a leading North American integrated producer of value-added primary aluminum products, as well as high quality rolled aluminum coils. Noranda is a public company controlled by affiliates of its private equity sponsor.
Noranda Aluminum Holding Corporation, Robert Mahoney, Chief Financial Officer, 615-771-5752 robert.mahoney@noralinc.com

iUS$3-B infrastructural upgrade coming with natural gas ? Robertson
Jamaica Observer - October 03, 2010

ENERGY and Mining Minister James Robertson has said that the bauxite/alumina and energy sector will soon be bolstered by over US$3 billion in infrastructural upgrade catalysed by the country's foray into natural gas.
Breaking down the investment at a luncheon in recognition of Noranda Jamaica Bauxite Partners' first anniversary of operations in Jamaica, Robertson said the Liquid Natural Gas (LNG) infrastructure component was valued at approximately US$600 million, while some US$800 million would be expended on retooling within the country's five operational bauxite/alumina plants to make them more efficient. Some US$700 million was earmarked for the development of new generating capacity including renewable sources of energy, while around US$1.2 million was slated for increasing the efficiency and capacity of the national grid.
He made the announcement against the background of Noranda's recently announced US$150 million (J$140 billion) investment over the next five years in the bauxite sector, with the minister stating that Noranda's investment could double when natural gas becomes available at the "doorsteps of the industry".
"We are going to do this in less than 30 months as natural gas will add some 480 megawatts of new generating capacity for the sector enabling a possible doubling of the plant's capacity," said Robertson at the luncheon, held at the Jewel Dunn's River Resort and Spa in St Ann last week.
The Minister's optimism was shared by the Chairman and CEO of Noranda Aluminum Layle "Kip" Smith and president and general manager of Noranda Jamaica Bauxite Partners, Pansy Johnson. Noranda Aluminum, a US-based conglomerate, now holds 49 per cent of the shares formerly held by the St Ann Bauxite Mining Company with the Government of Jamaica owning 51 per cent.
Smith, in expressing his pride in the strong performance of the company in only one year of operations, noted that it had moved from "survival and renewal to growth in less than one year", while Johnson pointed to Noranda's success in moving its "investment in the business and communities back up to full capacity of some US$60 million annually".
Johnson also referred to other positive benchmarks, including successful negotiation of deferred wage increases, assistance to 150 students through scholarships, improving the infrastructure of a number of primary schools and the overall positive impact in local communities as a result of the firm's return to normal levels of production.
Noranda's five-year expansion plan includes major projects such as the dredging of the Discovery Bay pier and skills training to increase the productivity of its workforce.
The company undertook a major 'leap of faith' a year ago when it increased its shares in the then St Ann Bauxite Partners, while the majority of other local companies closed down due to falling demand and depressed prices.Its confidence in the industry has paid off as the parent company reported an increase in bauxite production from 3.1 million tonnes to 4.6 million tonnes this year, as aluminum prices rebounded on the world market.

Rio Tinto/Alcan confirm interest in building aluminium industry in Paraguay
MercoPress - 02-Oct-2010
The Paraguayan Foreign Affairs ministry said in a release that the proposal was formalized by Patrick Tobin, CEO of the company during a meeting with Foreign Affairs minister Hector Lacognata, currently visiting Ottawa.esides ratifying interest in investing 2.5 billion US dollars in Paraguay for an aluminium smelter presented the industrial park project for the development of local subsidiary alumnum industries, “an obvious complement for the original investment”.
The plan is to build the smelter to the southeast of Paraguay close to the Itaipú and Yaciretá hydroelectric dams which Paraguay shares with Brazil and Argentina.
The plant is scheduled to begin production in 2016.
If the Rio Tinto/Alcan project finally takes off it would become the country’s major investment project since the construction of the two dams across the river Paraná, shared with Argentina and Brazil.
The Paraguayan Foreign Affairs ministry release mentions that Rio Tinto explores extracts and processes different kinds of minerals and metallic; it has over 90.000 staff world wide in over 50 countries. Alcan is considered the world’s leading corporation in aluminium, with over 150 years of uninterrupted experience in at least 27 different countries.
Rio Tinto/Alcan officials are also in contact with Itaipú hydroelectric dam which would supply the energy. Copper consumers much electricity because of the electrolysis system used for its refining.
“If Alcan decides to establish the smelter close to Itaipu, we are in a position to provide all the necessary energy for the project”, said Gustavo Colas, the Paraguayan representative at the Itaipú bilateral board, the largest operational hydroelectric complex in the world..
The aluminium plant when finished would generate 1.000 direct jobs and another 9.000 indirect.

Rio Tinto Alcan to build casting plant in Iceland
Montreal Gazette - 01-Oct-2010
Rio Tinto Alcan is raising the total investment required for a 20 per cent capacity boost at its Straumsvik (ISAL) smelter in Iceland by $140 million to $487 million.
The extra funds are being committed for construction of a casting plant, the company said Friday. The decision came after it signed a 26-year energy supply pact with the State-owned Iceland power utility.
Rio Alcan said expanding the smelter's primary aluminum capacity and investing in a new casting plant is "part of our strategy to develop our top-tier assets." Cast billet products go mainly to the auto, construction and aerospace markets.
Straumsvik uses hydroelectric power, has low carbon-dioxide emissions and a top safety and environmental record, the company added. The smelter, which exports mainly to Europe, will reach the new target annual capacity of 230,000 tonnes by July 2014. It now employs 450.
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