AluNews - February 2011

Qatalum ramp-up on track, says Norsk Hydro
Gulf Times - 28-Feb-2011
Productivity at aluminium producer Norsk Hydro’s Qatar joint venture Qatalum’s smelter plant exceeds previous estimates, its chief executive Sven Richard Brandtzaeg said yesterday. “Qatalum is running very well and production is at least on the level we have communicated before,” he told Reuters. “We are actually running on a higher power level than what we had planned and therefore we can get more metal from each cell,” he said. The firm’s 50/50 venture with Qatar Petroleum, launched in 2009, has a design capacity of 585,000 tonnes of primary aluminium.

Strike over: CVG and Alcasa aluminum unions agree to timetable of payments - 28-Feb-2011
Productivity at aluminium producer Norsk Hydro’s Qatar joint venture Qatalum’s smelter plant exceeds previous estimates, its chief executive Sven Richard Brandtzaeg said yesterday. “Qatalum is running very well and production is at least on the level we have communicated before,” he told Reuters. “We are actually running on a higher power level than what we had planned and therefore we can get more metal from each cell,” he said. The firm’s 50/50 venture with Qatar Petroleum, launched in 2009, has a design capacity of 585,000 tonnes of primary aluminium.

NORSK HYDRO : Hydro-Vale aluminium transaction to be completed today
4-traders (press release) - 02/28/2011
Norsk Hydro ASA (Hydro) expects to complete the takeover of Vale S.A.'s (Vale) aluminium business today, 28 February, 2011. Hydro's Board of Directors has on this basis resolved to issue approximately 448 million shares to Vale, through its wholly-owned subsidiary Vale Austria Holdings GmbH, as partial consideration in the transforming transaction under which Hydro takes over Vale's bauxite, alumina and aluminum operations in Brazil, as previously announced in May 2010.
The transaction provides Hydro with high-quality assets in Brazil, including full control and ownership of Paragominas, one of the largest bauxite mines in the world, 91 percent in the world's largest alumina refinery Alunorte, 51 percent in the Albras aluminium plant and 81 percent in the CAP alumina refinery project. The transaction also includes additional bauxite licenses and a volume off-take agreement for Vale's 40 percent stake in the MRN bauxite mine.
"This is a historic day for Hydro, marking the beginning of a new era as a fully integrated and truly global aluminium company. With this transforming transaction, Hydro will get the necessary resource base and strength to continue to take an active role in a promising and fast-growing aluminium industry," says Hydro President and CEO Svein Richard Brandtzæg.
"Hydro is now well positioned in three strategically important and resource-rich regions of the world - Brazil, northern Europe and Qatar - each area with distinct strategic importance to Hydro's future growth. I am particularly pleased to welcome onboard a crew of 4,200 new colleagues, highly competent and well-equipped to ensure a steady course for Hydro going forward," Brandtzæg says.
As part of the transaction, Vale contributes 60 percent in Paragominas, 57 percent in Alunorte, 51 percent in Albras and 61 percent in the CAP alumina refinery project. Prior to the combination, Hydro already had a 34 percent stake in Alunorte and 20 percent in CAP.
In total, around 4,200 Vale employees will become part of Hydro as a result of the transaction, representing significant addition of competence, expertise and skills within bauxite, alumina and aluminium operations. Executive Vice President Johnny Undeli will head Hydro's new Bauxite & Alumina business, headquartered in Rio de Janeiro, Brazil.
The transaction is valued at approximately USD 5.27 billion at closing. The consideration comprises 22 percent of Hydro's outstanding share capital valued at approximately USD 3.53 billion according to Hydro's closing share price of NOK 44.63 and NOK/USD exchange rate of 5.66 per February 25, 2011, approximately USD 1.08 billion in cash payment to Vale and assumption of approximately USD 0.66 billion of net debt within the contributed businesses as of end-January 2011.
In addition, Hydro has an obligation to take over the remaining 40 percent stake in Paragominas in two installments, in 2013 and 2015 respectively, against a cash payment of USD 0.2 billion for each installment.
Hydro will consolidate the assumed Vale operations in its financial statements starting March 2011 and the results generated by these businesses as of this month will be included in Hydro's first quarter results. A new reporting segment will be established, Bauxite & Alumina, which will include the bauxite and alumina-related operations. The Albras aluminium plant will be included in Hydro's Primary Metal reporting segment.
As partial consideration, 447,834,465 shares will be issued to Vale with a nominal value of NOK 1.098 each. Following the completion of the transaction the new share capital of Hydro will be NOK 2,271,760,107.048, divided into 2,068,998,276 shares, each with a nominal value of NOK 1.098. Hydro holds 33,387,070 own shares and the number of outstanding shares will consequently be 2,035,611,206.
The two largest shareholders in Hydro will be the Norwegian State, represented by the Ministry of Trade and Industry, and Vale with an ownership of 34.3 percent and 21.6 percent, respectively, of the shares issued, and correspondingly 34.8 percent and 22.0 percent of the shares outstanding.
According to the standstill and lock-up agreement entered into between Hydro and Vale, Vale have agreed not to increase its ownership in Hydro beyond 22 percent, to retain its shares in Hydro for at least two years after the transaction closes and following the two-year period not sell shares constituting more than 10 percent of Hydro's issued shares to any single buyer or group.
According to the agreement, Vale is entitled to have one representative on Hydro's Board of Directors. Mr. Tito Martins, Executive Officer and Head of Base Metals Operations in Vale, has been elected as a board member by Hydro's Corporate Assembly, and will join Hydro's board as its tenth member immediately following closing of the transaction.

Alumina industry says time right for carbon tax, but formula must keep ...
ABC Online - 28/02/2011
Australia's alumina and aluminium refining companies say the Federal Government has to get the carbon tax formula right or the industry here will shut down.
According to the Alcoa head of climate strategy, that simply means it would move to China where carbon emissions are triple those of here.
Tim McAuliffe says 60,000 people are employed in some way by alumina in the Northern
He says it's time to implement some sort of carbon tax or trading, but it just needs to be 'done right'.
"We're happy with the fact that we need to respond to climate change," he said.
"We've been doing it as an industry and it should happen on an economy-wide scale.
"The key for us, and it should happen for a whole lot of trade exposed industries and employees in Australia, is that the detail's got to be right so that we have an incentive ,so that it doesn't cost jobs and doesn't cause carbon leakage."
Carbon leakage is a term used the situation where a company or industry moves from somewhere like Australia to a country that has much less strict carbon rules and emissions control. Therefore the CO2 isn't being saved, it's just moving somewhere else.
The concern for refiners like Alcoa, BHP, Rio Tinto and other alumina and aluminium producers is that they are so-called 'emissions intensive trade exposed industries'.
"Emissions intensive means you have a pretty big carbon footprint, so a carbon tax could cost add an enormous cost to your bottom line.
"Trade exposed means you can't past the cost on to your customer because the price for the commodity is set globally, and you have no control over it. .
"So if the cost increases to a level that favours overseas competitors, the Australian businesses will dry up."
A couple of years ago, a Senate committee hearing into an emissions trading scheme travelled Australia to meet with key stakeholders.
t the time, committee chair Senator Christine Milne told me it would probably be preferable for aluminium companies to go overseas, as they would likely relocate to countries that use lower emissions trading energy technology such as hydro energy.
This is a point of view that doesn't make sense to Tim McAuliffe.
"Countries that have hydro, like Canada, don't move quickly on these things.
"For a start, if you're a pot room worker at a smelter in Geelong, then the last thing you want to see is your job disappear.
"The other thing is, the high growth area in alumina and aluminium at the moment is China, and I'll give you an example: in 2000 China had about 12 per cent of global production of aluminium.
"In 2010, it's more than 40 per cent and the vast majority of that is on coal.
"If a smelter closes here in Australia, that production would be picked up by the rapid growth area of China. It wouldn't see fewer emissions, it would see more emissions.
"(There would be) more emissions in terms of greenhouse gases, but also more emissions in other noxious substances. It would just be crazy to see the jobs leak offshore for no tangible benefit."

Iceland Channels Volcanoes to Win Europe's Clean Energy Supply Race
Bloomberg - Omar R. Valdimarsson - 27-Feb-2011

Of that, about 80 percent went to three aluminum smelters and a ferrosilicon smelter. Output could double or triple over the next 30 years, depending on whether Iceland exploits environmentally sensitive areas, Landsvirkjun estimates.

NEC: Materials for cancelled port can be used elsewhere
Trinidad & Tobago Express - Feb 26, 2011
Material bought by the National Energy Corporation (NEC) for an industrial port, which was cancelled following the Environmental Management Authority's (EMA) refusal to grant permission to build, can be put to other uses, including fixing landslides, the corporation said.
The company has not quantified the amount of material purchased ahead of the project that never was, but when first announced five years ago, the cost of the project was put at $960 million.
Two weeks ago, the EMA refused to grant the NEC a Certificate of Clearance.
Environmentalist Dr Wayne Kublalsingh, one of the leaders of a movement that fought the establishment of the industrial port near the Claxton Bay fishing facility on Trinidad's west coast, said the State-owned company should be held accountable for its financial wastage.
Kublalsingh said the NEC's investment was similar to the actions of Alutrint which went ahead and made deals with foreign companies for the building of the aluminium smelter even while the EMA considered its application for a CEC.
The CEC eventually granted to Alutrint was challenged in the court by Kublalsingh and others and, in June 2009, Justice Mira Dean-Armorer ordered an injunction ruling that the EMA had failed, among other things, to consider the cumulative impact of the smelter, power plant and port, and a lack of proper consultations with the people of La Brea.
In refusing the NEC permission to continue with the Claxton Bay project, the EMA gave similar reasons when it announced the Notice of Refusal to the NEC for the construction of a port, causeway, turning basin and navigation channel.
The EMA cited the NEC's failure, despite requests, to provide information on how the facility would affect the mangrove, fisheries and people in the area.
The NEC, a wholly owned subsidiary of the National Gas Company, operating out of a building at Rivulet Road, Couva, said the cancelled port was meant to serve the new Point Lisas South and East Industrial Estate and that with the application before the EMA for a CEC to develop the port, a certain amount of long lead materials including sheet piles, steel circular pipes and geotextiles were bought.
As a result of the EMA's refusal of the CEC, the corporation said it was "conducting a comprehensive review of the project in order to ascertain the implications of its cancellation.
This view includes the identification of alternative uses for the material that was acquired for the project, in such areas as road construction, erection of retaining walls and land restoration works."

India Bureau Charges Nalco Head, 3 Others With Bribery
Wall Street Journal - 25-Feb-2011
MUMBAI—India's Central Bureau of Investigation said it arrested Abhay Kumar Srivastava, chairman and managing director of National Aluminium Co., along with his wife and two others on bribery charges.
In a press release, dated Friday, CBI said the two other accused were a "middleman," who was brokering a deal between the NALCO Head and private group of companies based out of the central Indian state of Madhya Pradesh, and his wife. The agency didn't release their names.
The agency claimed to have seized 10.19 kg of gold and 2.95 million rupees in cash ($65,180); the overall value of which comes to about 24.3 million rupees, it said.
Further searches in various parts of the country are in process, the release said.
Officials of Nalco couldn't be immediately reached for comment.

Full cost of carbon would cripple companies
The Australian - 26-Feb-2011
AUSTRALIA'S biggest energy companies would be put out of business if they had to pay the world price for carbon emissions under a carbon tax.
New figures released by the Department of Climate Change yesterday show that just 30 companies are responsible for half Australia's carbon emissions.
The giant NSW power company Macquarie Generation is Australia's biggest emitter and would face a bill of $613 million if it had to pay the same $26 a tonne that the Rudd government's emissions trading scheme was based on.
The tax bill would be more than three times the company's latest profit of $196m, while the second-ranked Delta Electricity would face a bill of $538m, or almost 10 times its last full-year profit.
Compensation and carve-outs for the most energy-intensive companies will be some of the most contentious issues as the government negotiates its planned carbon tax with the Greens.
The annual survey of Australia's biggest emitters shows that just under 300 companies sent 437 million tonnes of carbon into the atmosphere in 2009-10.
However, this total, which represents 75 per cent of Australia's total emissions, is dominated by a small number of large energy and resource companies.
The top 30 companies account for just under 300 million tonnes of emissions and they would face an average tax bill of $270m at the carbon price of $26 a tonne.
Although this would make a small dent in the $20 billion profit forecast by BHP-Billiton, which ranks just outside the top 20, a carbon tax would make a big difference to the viability of many other companies on the list.
In addition to the energy companies, Bluescope Steel, ranked 11th, would be liable for tax of $320m against a last full-year profit of $140m. Wesfarmers, which owns Coles, would be liable for $134m while Qantas would be liable for $110m.
Under the carbon pollution reduction scheme proposed by the Rudd government, companies such as Alcoa, which exports energy-intensive aluminium against international competition, were to be given permits to emit carbon without charge, while the electricity utilities would also have received a portion of their permits free.

Mal completes trial run of technology reducing liquid content of red sludge
Budapest Business Journal - February 25th, 2011
The Hungarian Aluminum Production and Trading Company (Mal) has successfully completed trial operation of three pressure filters at its alumina factory in Ajka (C Hungary) that will increase the solid content of red sludge produced as a byproduct at the plant to over 50% from the previous 15%, György Kossa, the chairman of the government oversight committee monitoring the company's operations, told MTI on Thursday evening.
A containment reservoir burst at Mal's plant in Ajka last October, killing ten people and flooding two nearby villages with red sludge.
Kossa noted that the pressure filters, which Mal paid HUF 550 million to install in a new 1,100-square-meter hall, would begin regular operations on February 28.
Kossa said that Mal generated revenue of HUF 30 billion in 2010, up 6% from 2009. Earlier Econews information shows that Mal sustained pre-tax losses of HUF 362 million on revenue of more than HUF 28 billion in 2009 after posting profit of HUF 413 million on revenue of HUF 43 billion in 2008.

Rio Tinto Alcan starts exploration of bauxite mining project in Madagascar
SteelGuru - Friday, 25 Feb 2011
Reportedly, Rio Tinto Alcan began the study of the bauxite project in Manantenina area in southeast of Madagascar in early 2008. Currently the project has entered the initial exploration phase.
According to the official of Rio Tinto Alcan, it’s predicted that the deposit of the bauxite project may reach more than 100 million tonnes.
According to the plan, Rio Tinto Alcan will build an alumina refinery mine in this area designed annual production capacity of 1.5 million tons of alumina.
Furthermore, the establishment of alumina refinery will not only bring added value income but also create employment opportunities for local and foreign exchange earnings

Ormet works on reopening old plant
2TheAdvocate - Feb 24, 2011
Buoyed by higher alumina prices and $35 million in newly approved GO Zone bonds, Ormet Corp. is taking steps to reopen its Burnside plant by the end of the year, a move that would revive 250 jobs.
The plant, which converts bauxite into alumina, a key component in aluminum, was closed in late 2006.
Mike Tanchuk, Ormet’s president and chief executive officer, said Wednesday that the price of alumina is at about $400 per metric ton. Coupled with lower natural gas prices keeping production costs low, “we believe it’s worthwhile to restart the plant.”
Tanchuk said this will take about $50 million and a couple of months to put the financing in place. He said Ormet just got $35 million in GO Zone bonds approved and could have everything in order by the end of April, which would pave the way for the plant to reopen in the fourth quarter.
Tanchuk said the plant would require 200 hourly workers and 50 salaried employees, the same number of workers it had when it closed. Tanchuk said it is difficult to say how many former employees could be coming back because it’s not known how many workers moved away.
“I think we’ll be hiring a significant number of new people,” he said.
Tanchuk said the company closed the plant after the price of alumina fell from $600 per metric ton to $270 in about three months because of a glut of new capacity that came online in China.
Tanchuk said Ormet is now looking at cheaper natural gas, which fuels the plant, and a higher price for its product. Add in the expectation of exploding demand from developing countries, and “we expect those types of numbers will be what we see for the foreseeable future, and that means the cost structure of this plant will be competitive.”
Tanchuk applauded the state and its economic development officials for making the restart, if it happens, possible.“They’re a big reason why were still moving forward with this process,” he said. “I can’t say enough about them.”

Company to receive its bauxite mining lease today
Fijivillage - 25/02/2011
Chinese mining company Xinfa Aurum will today receive its 22 year bauxite mining lease and operations are expected to start in thirty days time in Bua.
This will see 1 million tonnes of raw Bauxite extracted and used to make aluminum.
Xinfa Aurum managing Director operations, Basilio Vanuaca said once they will be handed the lease today, they expect to have further talks with the land owning units and more paperwork before work starts.
Meanwhile, the five land owning units of the land in Nawailevu will receive more than $986,000 in lease money today from Government.
The land owning units who will benefit are Mataqali Naicobo, Mataqali Noro, Mataqali Nalutu, Vanua Navakasiga and Vanua Lekutu.
Story by: Paradise Tabucala

Romanian Alro's subsidiary to purchase mining operation in Sierra Leone Business News - Raiffeisen - 24.02.2011
According to a media release, Vimetco, the majority owner of the aluminum smelter Alro (ALR), plans to transfer to Alro’s subsidiary, the alumina producer Alum Tulcea (BBGA) the mining operations in Sierra Leone. The bauxite mines have an annual production capacity of 1.4 mn tons. The transaction worth around USD 25 mn will help Alro become an integrated player. Alum called a shareholders meeting for March 21 to approve a share capital increase worth RON 22 mn and the USD 25 mn bank loan to finance the acquisition of the mines.
Source : bne

Multinational company Mozal needs more electricity to expand in Mozambique
Macauhub - 2011-02-24
Maputo, Mozambique, 24 Feb - Mozal, a multinational company specialised in aluminium production, needs a further 500 to 600 megawatts of electricity to be able to move ahead with its third phase of expansion, said the company’s chairman cited by the Mozambican press.
Mike Fraser said that the project to build Mozal III depends on the availability of electricity in the country, as with the Cahora Bassa Hydroelectric facility operating at its full capacity, the required electricity can only be generated, in the medium and long term, in the central region of Mozambique, or more specifically in Tete province.
“One of the most important thins for Mozal is electricity. Our business can only grow with available electricity and construction of Mozal III needs more power. Before considering expansion of Mozal we need to secure access to electricity, therefore, at the moment, this is our biggest constraint,” Fraser said.
The chairman of Mozal, a company that is responsible for 70 percent of Mozambique’s exports, also said that he had been in touch with the Energy minister and state electricity company Electricidade de Moçambique (EDM), in order to gain access to more electricity to be able to expand Mozal based on a local source. (macauhub)

Alcoa Celebrates 125 Years of Modern Aluminum
Business Wire (press release) - 23-Feb-2011
NEW YORK--(BUSINESS WIRE)--This month marks a milestone in American history that’s known to few but benefits everyone. Thanks to the birth of the modern aluminum smelting process 125 years ago by Charles Martin Hall, thousands of products can be made safer, lighter, more fuel efficient and more recyclable.
“In the 125 years since his discovery, the development of aluminum has been nothing short of ground-breaking – opening up entire markets and industries, from cookware to electrical conductors, to car frames, to space shuttles and iPods.”
.Hall was just 22 years old and a student at Oberlin College in Ohio when he discovered the way to create aluminum by separating it from bauxite ore through electrolysis. The aluminum pellets created from this discovery are called “Alcoa’s crown jewels” because it led to the patent Hall received July 9, 1886, and later the founding of Alcoa.
In celebration of Hall’s remarkable invention, Alcoa, the company launched by Hall and a group of inspired investors, is initiating a series of events and activities to recognize Hall’s achievement and the influence of this miracle metal. This includes a donation of $10,000 to the college’s Green EDGE Fund, which finances environmental projects on the Oberlin campus and nearby community.
Alcoa Vice President and Chief Sustainability Officer Kevin Anton will kick off the recognition at a keynote address today at Oberlin College, which is also commemorating the anniversary with special programs.
“Hall’s process is of course the backbone of our company, but this singular ‘cracking of the code’ did much more than just build an American success story,” said Anton. “In the 125 years since his discovery, the development of aluminum has been nothing short of ground-breaking – opening up entire markets and industries, from cookware to electrical conductors, to car frames, to space shuttles and iPods.”
According to Anton, the innovation that occurred on Feb. 23, 1886, in Hall’s ‘woodshed’ lab remains today at the core of Alcoa’s DNA.
“We call aluminum the miracle metal not just for one reason – but for many,” he said. “Its properties are simply amazing: lightweight and ideal for promoting fuel efficiency in autos; strong enough to withstand deep ocean drilling and space travel; non-corrosive, making it perfect for use on the façade of buildings; and, of course, it is infinitely recyclable. No other material has all of these properties.”
Prior to Hall’s invention, aluminum extraction methods were crude and costly. It was a metal used rarely and only by those who could afford it. Thus in the late 1800s, it was used sparingly and as an ornamental metal, like its placement in 1884 at the top of the Washington Monument.
After Hall’s patented process, aluminum became more available and its attributes were recognized and sought after—in 1903 the Wright brothers recognized the lightweight properties of Alcoa aluminum were integral to their first flying machine. In the years that followed, from the industrial revolution to today, aluminum has been at the cornerstone of both the extraordinary and the everyday.
No other metal has aluminum’s sustainability advantage. Nearly 75 percent of the aluminum ever produced is still in use today. When an aluminum can is recycled, it can be back on the shelf in 60 days. Alcoa saves 95 percent of the energy it takes to make a can from new metal, which lowers the carbon footprint of an aluminum can.
The demand for this miracle metal in industries ranging from transportation and consumer electronics, to packaging and building & construction has never been brighter. As Anton notes, “Aluminum’s contributions to the advancement of society are limitless. And the ingenuity and out-of-the-box thinking and experimentation that were characteristic of Charles Martin Hall continue to drive our ambitions at Alcoa today.”

Turkish aluminum company investing $250 million in modernization
Hurriyet Daily News - February 23, 2011
Seydişsehir Eti Aluminum, a Turkish company located in the Central Anatolian province of Konya, is aiming to increase its production capacity with a $250 million modernization investment, according to an executive.
The company is hoping to increase its raw aluminum production capacity from 60,000 tons to 70,000-95,000 tons with the new investment, Director General Mehmet Arıi?kan told Anatolia news agency Wednesday.
Eti Aluminum is among the leading integrated aluminum facilities in the world, Arıi?kan said. Turkey's raw aluminum consumption is nearly 700,000 tons annually.
Eti Aluminum's annual production is 60,000 tons.
Noting that Eti Aluminum was privatized in 2005, Arıi?kan said they had begun to take important steps by establishing information, engineering and technological infrastructure following the privatization.
Arıi?kan said Eti aimed to implement its ongoing projects within the next four to five years, adding that the firm was working on some chemically processed mid-products to support the defense industry.

Saudi Maaden/Alcoa - Aluminum Complex - Aluminum Smelter
Zawya - 23-Feb-2011
In March 2009, MaadenMaaden announced the signing of a technology transfer agreement with
Aluminium Pechiney and a cooperation agreement with Rio tinto Alcan. Pechiney will provide its AP37/39 smelter technology and Rio Tinto Alcan will provide various ... (click on the link above to see the full article)

Rio Tinto CEO Tom Albanese: 'Our Strategy Is to Invest in Large, Long-life ...
Knowledge@Wharton - 23-Feb-2011
Among the business leaders who attended the Global Competitiveness Forum in Riyadh, Saudi Arabia, was Tom Albanese, CEO of Rio Tinto Group, the mining giant. In a recovering global economy, Rio Tinto has had a strong financial year: In early February, the company reported 2010 earnings of US$14.3 billion, a 194% increase from 2009. Demand and higher prices for all commodities drove the company's growth -- Rio Tinto even booked US$682 million in diamond sales, a 52% increase from last year.
It's a different situation than the one Albanese faced when he became the CEO in 2007. Not even a month into the job, rival mining company BHL Billiton launched a US$66 billion hostile takeover bid. The global financial crisis followed, and a US$19.5 billion investment deal with the Aluminum Corporation of China collapsed. The Chinese also accused four Rio Tinto employees of bribery, and in a secretive trial, sentenced them to up to 14 years in prison last March. These challenges were an instant and intense test of leadership, Albanese says. But not only did they make him tougher, they forced him to focus on getting the mining company back to what it did best.
In the first half of a two-part interview with Arabic Knowledge@Wharton, Albanese says Rio Tinto believes a long-term market perspective and ongoing engagement with stakeholders are critical to business success. He adds it is extremely important not to take political sides in a country nor indulge in bribery for access. Albanese notes Rio Tinto's business strategy is to begin with shareholder demands and invest in large, long-life, low-cost operations that are profitable through all economic cycles and provide the right returns.
An edited transcript of the conversation follows. The second half of the interview will appear in the next edition.

Arabic Knowledge@Wharton: We want to start with your experiences in China and other Rio Tinto global operations and some of the conflicts they presented for your company. What does this tell us about the international market? Is it becoming more restrictive?
Tom Albanese: First of all, Rio Tinto is a longstanding multinational company that's been mining in Africa and Australia, South America, North America and Europe for more than 100 years. So we have had a long history of working in many different jurisdictions. We have about 130 years of experience, our first mine being reopening the Roman mines in Seville, Spain in 1873. Our business requires us to basically find, develop, build mines, and then operate them over long periods of time, [literally] decades of mining. That means you must have the appropriate license to operate in that location, and that license of operation becomes a very dynamic license. It's not what we might have received in, say, 1910. It's no longer applicable in 2010. We always have to learn, adapt, and basically modify ourselves as we go forward.
The biggest trend we've seen in our sector over, say, the past 20 years -- [something] we thought would have happened after the collapse of the Soviet Union -- is that we've seen an opening up of the world, a sort of profusion of new demand. And while there were signs of that, I think you also had areas that plateaued. It wasn't as manifest, and I think that probably for us, it crystallized with the Asian financial crisis in the late 1990s. There was investment ahead of itself, and then it collapsed quite quickly.
As we looked at 2003 and 2004, we saw China beginning to emerge. What happened at that point -- in that period between the Asian financial crisis and the emergence of China's economy -- is global stakeholder engagement needed to become quite a bit more sophisticated. We had to stop thinking like engineers, which I am one, and we had to think more about the stakeholders with whom we were involved.
During that period, we greatly expanded upon our sophistication with local communities and civil society, notably global non-government organizations. We probably had more of an orientation on environmental issues and on the avoidance of what I call disenfranchised communities. Also, internally we recognized we had to change the way we ran our businesses from a safety perspective. So in that period, we put into place global standards for health, safety, environment, and community engagement, and we recognized that our reputation was only as strong as the weakest point in that reputation anywhere in the world.
That [approach] served us well for that period of time. But what we've seen now over the past two to three years -- a trend that's going to continue for the next 10 years -- is that our sector, resources and commodities, is increasingly coming under pressure; that is, supply can't keep up with demand. As a consequence, we're seeing more geopolitical tensions that are coming out from that. You're seeing more government-to-government engagement, more country-to-company type engagement that we would not have had to put much of a focus on 10 years ago.
This is causing us now to reshape that stakeholder mapping, and the stakeholder agenda, to be more sophisticated. In some cases we've found that by having a very strong local community agenda, some capitals of countries see that as creating a destabilizing influence. So you're doing what you think you're supposed to be doing in your home patch to earn that license to operate. But we would be then underrepresented in the capital city.
We have had to deal with dramatic changes recently. We fought a hostile takeover offer, we had challenges with China, and we had the global financial crisis. Looking ahead, we are in a period of very rapidly rising metal prices. While those are good for our business, all of a sudden everyone wants a piece of the action. So we have to be more globalized in how we respond to that.
Arabic Knowledge@Wharton: So now you're competing not just with other companies but also with governments…
Albanese: Yes. The investment we made 10 years ago in shaping our stakeholder engagement around communities, around employee health and safety and our environment will be a key part of the strategy differentiating ourselves as others want to get in. What we've seen so far is that notwithstanding the rhetoric, many state-owned mining companies don't have the skills, and nor do they follow their ideals. I find it incredibly powerful that if I meet with the prime minister of an emerging country, I can say that we will use the same employee health and safety standards, the same environmental and community standards, in their emerging country as we do in Australia, the U.S. or Canada. It is very hard for someone to compete with that. And people do compete, people do try to undercut that, people do promise and can't deliver. It does represent a short-term challenge for us; but what we have to do is persevere for the moment.
Arabic Knowledge@Wharton: How will state-backed competition change the market?
Albanese: The mining industry is different from the oil and gas industry for two reasons. In mining, the preponderance of production is from private or public companies, and only a small part of the production is by state-owned mining companies, which is almost the exact reverse of the oil industry.
There are reasons why. The first is that if you look at the typical oil deposit and you map it against the geologic timeline -- 4 billion years ago -- the geologic window which is the modern oil deposit basically comes from a very, very narrow sliver, probably the thickness of a hair on a geologic table that is about a foot-and-a-half long. Oil is a hydrocarbon. Heat it up too much, and it will turn to coal or evaporate, or something else will happen to it.
In contrast, you can find copper that has been deposited 50 million years ago, and you can also find copper that was originally deposited 3 billion years ago. You can deposit it as lake sediment, which can be turned into a mountain, and then it can metamorphose. But copper doesn't melt, it doesn't disappear, it doesn't vaporize. It keeps getting reconstituted in different forms. So if you're looking for gold or copper, if you're looking for iron ore, you've got a much larger part of that geologic time horizon, which means you have a much greater range of geologic terrains and a few number of countries that concentrate that wealth. That [is why] national mining companies have to be careful; it's more difficult for them to create an unreasonable commercial situation, because we can just go somewhere else.
Arabic Knowledge@Wharton: We were talking about the resource scramble…
Albanese: The resource scramble is driven more by the long-time horizons needed to develop resources than the scarcity of resources. There are high risks of exploration -- one in a hundred. Before you can build a copper mine in a new region, you've first of all got to find it. So you're going to spend at least five, maybe 10 years to find it if it's there. Then you'll spend five or 10 years to develop it. After that, you have probably five or 10 years before you start catching dividends back from it. So you're dealing with 10- to 20-year time horizons from the original spark of an idea to a dividend-producing mine. The supply response has a longer-term development period than sometimes the demand response. What we've seen over the past 10 years is that Chinese demand response has been so rapid, we as the industry leaders can't keep up with it.
What's interesting about it is people say, 'Well, copper prices are getting too high. We need copper for our iPads and our hybrid cars. What are you going to do about it?' Then those same people say, 'Well, we don't want you to build a copper mine in our backyard.' It takes longer because of community engagement and environmental studies to develop that copper than it would have 20 years ago. While some people say, 'You should should speed up development,' the changing nature of society and the greater range of stakeholder aspirations and requirements actually delay the time for development and actually dig in more [of] that higher-price period.
Arabic Knowledge@Wharton: Are more governments asking you to hand over information that could be private and proprietary?
Albanese: Our industry has never been too fussy about, say, trade secrets. In most of the countries that we explore, we're required to submit the data to the government. We have patented technology, but it's just straight commercial patents. For the most part, you buy a truck from the Japanese or Caterpillar. So, no secrets there. You buy your processing capacity from big international firms. Again, we may even use innovative technology with patents, but I don't think we have the same type of trade secret issues as some of the technology companies.
Arabic Knowledge@Wharton: What should companies do in situations that put them in conflict with governments?
Albanese: First of all, [what helps is] having a legitimized license to operate where you have recourse and you have a community relationship that's reasonably positive, meaning that you have the vast part of the community behind you. The law of the minority is sometimes a challenge. I mean, how big is the minority? Is this just one person out of a million that could speak up? You basically want to attract the bulk of a community to what you're doing, and that means delivering more than just the jobs that are being created by the mine.
Having a long-term perspective is important. The first part of it is being a good neighbor; the second part is having ongoing engagement. And the third part, which I think is very important, is that as a matter of our corporate policy we don't take political sides. We have a very strict policy against any corporate donations as political contributions.
We recognize that if we're going to be around for 50 or 100 years in a location, we can't afford to be backed by one political party. One constant in the world of politics is that parties change. We have that as a clear part of our code of conduct, as a core principle: No political donations or contributions.
The idea of transparency of payments to governments is very important. We were an original signatory of the EITI, or the Extractive Industries Transparency Initiative. We believe there should be full transparency of all payments between companies and governments, and they should be then subject to audit. That's part of our principles. Not all would believe in that, but that's where we want to differentiate ourselves.
Arabic Knowledge@Wharton: Maybe your company is large enough to buttress itself against the pressures of 'the cost of doing business.' How do you get around that?
Albanese: If you start saying yes to the wrong things early on, you're going to get stuck on a slippery slope downhill. It is about, first and foremost, educating every single employee about the need for compliance. If you make it clear upfront what your principles are, we do find over time that people do respect that. You don't see them asking for things that are unreasonable or not legal. But it does take longer, and we find ourselves at times frustrated by people who can run circles around us and then brag about being more nimble or this or that.
Arabic Knowledge@Wharton: It's almost a popular assumption that bribery is just a part of being competitive overseas and you have to work with that.
Albanese: We have no allowance for facilitation funds in any country, anywhere, and we make it very clear. We are working in global markets. We have listed our stock in Australia, in the U.K. and in the U.S., so we are subject to a whole set of global laws. And they do tend to overlap. I refer to the U.K. Anti-Bribery Law as being the equivalent to the Foreign Corrupt Practice Act in the U.S., but on steroids. That'll keep a cottage industry of lawyers going for a long time. What you've got to recognize is if you start going down that wrong path in any country, including the United States, you're going to be on the wrong path.
Arabic Knowledge@Wharton: When you talk about new markets, how does Rio prepare itself in entering new markets and working with those nations?
Albanese: First of all, we're not selling a consumer product. We only have a few thousand customers around the world and it's a business-to-business transaction. When we look at opening up new markets, the most important part is gaining access to new geologic terrain that we can explore, or we can be a partner with someone that's already there, or with the government to get access to that land. It means having the opportunities to secure tenure for doing exploration, and having assurances that success in exploration gives us the first right for development.
In principle that's no different than the patenting process around inventions. If you're going to look for the next pharmaceutical [blockbuster], the next Facebook, the next Microsoft Windows or the next version of refrigerator, you're not going do that research and development (R&D) unless you have some assurance that if you're successful you can get your patent and that that patent will hold. If you have that confidence then you will put risk capital in place, knowing that risk capital on R&D is a lottery ticket: You have one-in-a-million chance of winning. But you want to make sure if you have the right ticket that you can actually cash it in.
This means having, first of all, engagement in those countries. We have found, and certainly so in a more globalized world, that we have had to make efforts over the past five years to build the Rio Tinto brand. In the past, we've actually been happy to leave the subsidiary businesses to carry on in their brands locally. But if you can actually have that global brand, you can more clearly articulate global standards.
We want to use our global brand to access new terrain and new markets. Then we need to begin putting the right people on the ground. That is always challenging, particularly in remote locations, because you have to have people with the necessary intellectual skills of exploration but also the empathy skills, particularly around community relationships, to be that first contact point that a community or that country may have with Rio Tinto. Generally you think of geologists as people who are just happy to get out there and hammer rocks. What we find now is that geologists have to be the first emissary. It's very challenging, because imagine if you've got your house and a geologist goes into your backyard saying, 'I want to look for copper in your backyard.' You might initially be sort of excited [with] the thrill of the hunt. But you also may be scared about what that means, because you really don't want to have a big open pit in your backyard. So when we move into a remote location that happens to be a community's backyard, we have to be incredibly sensitized to how we present ourselves as Rio Tinto. We have to have the right first emissary and we're realistic about what it means without creating excess expectations.
That represents a dilemma of sorts, because on one hand you've got to put resources in to create that right first impression. On the other hand, if you put too many resources in, you actually elevate the expectation. And for us, one in a hundred of these first emissary contacts are successful. From a commercial perspective, 99 of those are unsuccessful. So, you start building resources, you start putting a presence in those areas, you start creating the dialogues, including with host governments who actually get their expectations built up.
I can remember close to home, before we acquired Alcan, we consolidated our ownership interests in the Diavik diamond mine in Australia from a company called Ashton. They had a small Canadian subsidiary, Ashton Canada, in northern Quebec, [where] they had made a discovery of a few small diamond-bearing dikes. I couldn't go to Montreal without people talking about setting up a cutting and polishing industry -- diamonds in their eyes, literally -- because we created this expectation.
Arabic Knowledge@Wharton: So, there are community demands. Then there are Rio Tinto's needs, and shareholder needs. How do you balance these?
Albanese: Let us start with the demands of the shareholders, because that drives our strategy and creates the basis for how we have to go in. Our strategy is to invest in large, long-life, low-cost operations that basically make money through all parts of the economic cycle and provide beneficial returns to shareholders. A very, very important part of that description [is that] you can't disappoint early on and lose that license to operate. That requires you to put that foundation in place.
If I look at our most profitable business last year, it was the Hamersley Iron mine business [in Australia], and that's been in business for more than 45 years. It was slowly nurtured during the 1960s and 1970s and is now very important for Rio Tinto. Look at the Kennecott Utah copper mine in Salt Lake City. That's been around for more than 105 years. Our aluminum assets in Canada have been around for more than 80 years. These are long-term assets and you can't assure yourself of that long-term license to operate with just engineering skills. You need a broader range of skills and also relationships to basically assure you have another 100 years ahead of you. The strategy is driven by our shareholders wanting part of their financial portfolio tied into large, long-life, low-cost mineral resources that produce a commodity product.
That's generally why they are there. Our shareholder base has been stable. Even in the past couple of years of difficult financial conditions, they want that access to those types of resources, and they are making a portfolio decision on the basis it might be on commodities… it gets it within an overall diversified portfolio. That means we have to have that long-term presence on the ground, and ultimately we have to have global standards.
There have been some unfortunate examples over the past year or so where if you breach those standards or you create disenchantment between yourself and a host country, and you end up destroying shareholder value.

Hindalco declares lock-out at India Alupuram plant
Reuters Africa - 23-Feb-2011
MUMBAI Feb 23 (Reuters) - India's No. 1 aluminium producer, Hindalco Industries Ltd, said on Wednesday it had declared a lock-out at its Alupuram plant in the southern state of Kerala.
The lock-out followed protracted acts of indiscipline by workers at the plant, the company said in a statement to the Mumbai exchange.
Hindalco does not expect any adverse impact on the company's financials due to the lock-out, it said. (Reporting by Neha Singh)

Vale to Spend More Than $1 Billion Building Guinea Railroad
BusinessWeek - February 22, 2011,
(Bloomberg) -- Vale SA, the world’s second-largest mining company by market value, will spend more than $1 billion to rebuild a 662-kilometer (411-mile) railway in Guinea, where it plans to start producing iron ore next year.
The railroad, running between the capital Conakry and Kankan, may be in operation by 2013 or 2014, Vale Chief Executive Officer Roger Agnelli said today, after Ricardo Saad, project manager for Vale’s Guinean Simandou mine, disclosed the investment. Then rail line has been out of operation since 1983.
“We shall be capable of building the railroad as soon as possible so that we can mark our presence in Guinea,” Agnelli told reporters in Conakry as the first track was laid. The event was also attended by President Alpha Conde and former Brazilian President Luiz Inacio Lula da Silva.
Mining companies including Vale and Rio Tinto Group have been lured by Guinea’s mineral riches. The West African country holds as much as half of the world’s bauxite, used to make aluminum, more than 4 billion metric tons of “high-grade” iron ore and “significant” deposits of diamonds and gold, according to the U.S. State Department.
Simandou, Zogota
Vale, based in Rio de Janeiro, last year agreed to pay $2.5 billion for Guinean iron-ore deposits. The sites include Simandou North Blocks 1 and 2, assets that were confiscated from Rio over a development dispute, and the Zogota project in Simandou South.
Conde said he sought a “win-win” cooperation with Brazil, after saying last month the government plans to own at least a third of new mining projects. “We’re actually doing a new mining code so that Guinea is the owner of the mines,” Conde said today.
Vale lost 1.1 percent to 48.65 reais in Sao Paulo trading as of 2:44 p.m. local time, valuing the company at 283.2 billion reais ($169.4 billion). BHP Billiton Ltd., based in Melbourne, is the world’s largest mining company by market value.
Vale, which targets investment of $861 million in the Simandou area during 2011, said in a statement today it will start production from Zogota in 2012 and ramp up to capacity of 15 million tons a year. The development of Blocks 1 and 2 will boost annual capacity to 50 million tons by 2020, the company said.
--Editors: Amanda Jordan, Tony Barrett
To contact the reporters on this story: Ougna Camara in Conakry via Accra at; Juan Pablo Spinetto in Rio de Janeiro at
To contact the editors responsible for this story: Emily Bowers at; Dale Crofts at

Chinese domestic alumina prices steady amid thin trade
Platts - 22Feb2011
Singapore (Platts)
China's domestic spot alumina prices ex-works basis continued steady amid thin trade Tuesday, industry sources said.
Prices were still heard highest in Henan province at above Yuan 2,800/mt ($426), with offers at Yuan 2,850/mt. In Shandong, major refiner Weiqiao was heard trading at Yuan 2,800/mt, with others mostly around Yuan 2,780/mt. Shanxi levels continued to hover at Yuan 2,750/mt, with Guangxi trades at Yuan 2,700-2,750/mt.
Platts' assessment for China domestic alumina ex-works Henan closed at Yuan 2,810/mt, unchanged from Monday, but up Yuan 10/mt from a week ago, and up Yuan 50/mt on the month.
Refiner and smelter sources said some smelter restarts and expected new smelter capacities this year have supported alumina, but there were also concerns that the added capacities could pressure aluminum prices downwards, which would in turn impact alumina.
Expected new alumina capacities and the recent interest rate increase from the central bank earlier this month were also areas of concern.
Hence, most sources expected alumina prices to likely to stay rangebound in the near term.
A Henan refiner on Tuesday indicated a tradeable level of Yuan 2,830/mt for 5,000-10,000 mt spot, while smelters' buying interest stood at a maximum of Yuan 2,800/mt for Henan materials.
"The Henan levels are too expensive, we won't pay more than Yuan 2,800/mt. We would rather buy from other regions where it's cheaper," one smelter source said.
"We just bought 23,000 mt from a trader for March delivery at Yuan 2,950/mt delivered for Shanxi materials," he added.
The front-month March aluminium contract on the Shanghai Futures Exchange closed at Yuan 16,890/mt on Tuesday, down from Yuan 16,970/mt on Monday, and flat from a week ago.
--Yuencheng Mok,

DJ IAI: Jan World Aluminum Output 2.126M Tons, +4000 Tons On Month
Trading Markets (press release) - Feb 21, 2011 (Dow Jones Commodities News via Comtex) --
Total world aluminum output in January rose by 4,000 metric tons to 2.126 million tons, from 2.122 million tons in December, according to figures released Monday by the International Aluminum Institute.
January's figure was up 141,000 tons from the January 2010 production of 1.985 million tons.
The IAI details of production follows, in thousands of tons:
January '11 December '10 January '10
Africa 147 149 144
North America 405 399 399
Latin America 190 194 196
Asia 219 216 206
West Europe 334 335 311
E/Central Europe 367 369 347
Oceania 194 194 192
Total 2.126 2.122 1.985

NOTE: The data included in this IAI Statistical Report have been derived exclusively from returns by the primary aluminum producers themselves. These producers may be either Members of the IAI or Official Correspondents, the latter being enterprises possessing, or which have possessed, effective control over primary aluminum production but which are not Members. Official Correspondents are approved by the Board of the Institute.
Neither sources outside the industry nor estimates are used.
Unwrought aluminum is aluminum in its basic cast form made from primary metal or from scrap and which is unworked in the metallurgical sense.
Total aluminum is unwrought aluminum plus unprocessed scrap, metal in process and finished semi-fabricated (mill) products.
Unwrought and total aluminum inventories are all relevant inventories over which primary aluminum producers have some degree of control, with the exception of metal included in LME or COMEX stock reports.
Further clarification can be found in "A Guide to the IPAI Statistical System - Revised Aluminum Inventory Reporting Guidelines" (dated Oct. 28, 1999) which is available from the IAI.
-By Francesca Freeman, Dow Jones Newswires; +44 (0)20 7842 9412;

China aluminium, lead smelters reopen capacity on power supply
Reuters Africa - 17-Feb-2011
Aluminium and lead production in China is rising after smelters in Henan and Guizhou received more power supplies this month, allowing them to ramp up idle and new capacity, smelter sources said on Thursday.
"We reopened some idle capacity. It would take us about three months to reopen all capacity," said a trader at a large aluminium smelter in central Henan province, the largest aluminium and lead producing area in China.
Power supply cuts forced aluminium smelters in Henan to keep well over 800,000 tonnes of annual capacity idle between December 2010 and January 2011.
The speed of reopening all idle capacity at the smelter, which had closed 650,000 tonnes of capacity, would depend on aluminium prices, the trader said, adding that most operating smelters in China were making only small profits from the current Chinese aluminium prices.
Aluminium prices on the three-month contract of the London Metal Exchange rose 11 percent in 2010 and traded at $2,490 a tonne on Thursday, up one percent this year.
Prices on the Shanghai Futures Exchange increased 2 percent last year and traded at 17,150 yuan on Thursday, up nearly 2 percent this year.
Increased production may push up aluminium and lead stocks in China, the world's top producer of the two metals, this month as the demand has not picked up from the Lunar New Year celebrations, smelter officials said.
"Demand is not good now. Many battery factories have not resumed full production yet from the holidays," a trading manager at a large lead and zinc smelter in Henan said.
Many fabricators, which use primary aluminium ingots to make semi-finished products, in southern Guangdong province were operating at 60-70 percent of capacity as well because some workers had not returned from holidays, said an senior fabricator executive in Guangdong.
A lead and zinc producer in Henan reopened all idle capacity this month after it had cut production by 10 percent in December and January, the trading manager at the firm said.
"Our idle capacity was reopened during the Lunar New Year holiday after having slowed the production for two months," he said, referring to the national holiday on Feb. 2-8.
A 100,000 tonne-a-year lead smelter in Lingbao city in Henan, which had halved production on local power cuts, closed all production for repairs in late January and plans to reopen full operations in early March, a manager at the smelter said.
"We don't have power shortages anymore," the manager said.
In southwest Guizhou province, where power-hungry aluminium smelters had suffered power cuts as energy demand soared amid the freezing weather in December and January, almost all power supplies were resumed this month, smelter sources said.
"We started production at a new 50,000-tonne capacity unit this week," said a fabricator executive, who also operates an aluminium smelter in Guizhou.
(Editing by Ed Lane)

Rusal to Start Talks Over Alleged Unpaid Taxes, Guinea Says
Bloomberg - Feb 19, 2011
Guinea is ready to begin talks with United Co. Rusal about 5 million euros ($6.8 million) of taxes the government alleges the company hasn’t paid, Minister of Economic and Financial Control Aboubacar Koulibaly said.
Rusal is likely to discuss the situation on Monday, Feb. 21, with an administrative committee, Koulibaly told reporters today in Conakry, Guinea’s capital city.
Guinea is the world’s biggest bauxite exporter. Rusal is the world’s largest aluminum maker.
“Rusal is concerned because the taxes that it should pay were not paid,” Koulibaly said today without giving more information.
To contact the reporter on this story: Ougna Camara in Conakry via Accra at
To contact the editor responsible for this story: Antony Sguazzin at

Hasan Ghana to invest four billion dollars in Sekondi Freezone
Ghana News Agency - 18-Feb-2011
Mpintsim (WR), Feb. 18, GNA - Hasan Ghana Investment Limited is to invest over four billion dollars in the Sekondi Industrial Freezone enclave.
The company would invest in mineral processing facilities, logistics terminals, residential complex, exhibition centres and many social amenities, which would also create opportunities for small and medium scale companies to be established.
Mr Luke Luang, President of the company, who announced this at a community durbar at Mpintsim on Thursday, said a Memorandum of Understanding had been signed with the three anchor tenants, namely Mpintsim, Sofokrom and Ando, which made them the only official developer of the industrial enclave.
Mr Luang noted that the first phase of the project, which was the construction of Integrated Aluminum Processing Industry, would create over 50,000 jobs for local artisans, adding "We are mindful of local content inclusion".
He said the enclave was also to support comprehensive industrial mineral processing activities, which would position Ghana as the gateway to the West Africa sub-region.
In addition, he said, the development of the industrial enclave would bring about value addition in the employment sector, investment, and global market share.
Hasan Ghana, a subsidiary of Hasan International Holding Company Limited, is well vested in city infrastructure, housing development, insurance, finance and many other government related projects.
Mr Kwame Nsiah Asante, Estate and Enclave Development Manager of the Ghana Freezones Board, said the project would cover over 2,500 acres of land acquired by government over a decade ago.
He noted that the completion of the projects would help in export and other strategic investment.
Mr Kobina Prah Annan, Sekondi/Takoradi Metropolitan Chief Executive, said the Government would construct two dams on River Pra to generate additional electricity for smooth operation of the company in the enclave aimed at achieving the better Ghana agenda.
He said the success of the project called for the collaborative efforts of the community, the Assembly and the Free zones Board.
Nana Yade Kojo IV, Chief of Mpintsim, on behalf of the other communities, lauded the Government's initiative and pledged the community's support for the project.

Alucam aluminum production down by 15pct in 2010
SteelGuru - 18-Feb-2011
According to official of Alucam, a Cameroon Aluminum smelter, the company’s annual production of aluminum in 2010 totaled 63 thousand tonnes down by 15% from the forecast due to the insufficient supply of electricity.
In fact, Alucam has planned to increase the annual aluminum production to 300 thousand tons by 2015. The company signed an agreement of power supply with AES SONEL in November 2009 to achieve the target.
(Sourced from

Unions support Rio Tinto campaign
Gladstone Observer - 18th February 2011
WAR ON RIO: The AWU has declared war on Rio Tinto's aluminium refineries in the Gladstone Region including The Boyne Smelter and Yarwun.
THE Australian union movement has thrown its support behind a campaign to improve wages, conditions and workplace rights at Rio Tinto’s aluminium operations in Australia with Gladstone a prime target.
Australian Council of Trades Union (ACTU) Secretary Jeff Lawrence said Rio Tinto Alcan had a proven record of denying workers at its Australian smelters and refineries representation on many workplace issues.
“Rio Tinto Alcan has systematically blocked workers from access to unions and the benefits of collective bargaining,” Mr Lawrence said.
Local AWU Representative, Tony Beers said Rio Tinto makes it very difficult for workers to have union representation.
“Contrary to what Rio Tinto says they constantly put barriers in front of workers for union representation.”
When speaking with The Observer yesterday Rio Tinto claimed they have always respected the choice for all workers to join a union.
“We recognise and respect that every employee has a right to chose to join a union or not.
“Rio Tinto Alcan regularly complies with union requests for entry onto sites in accordance with the Fair Work Act. We have never blocked an employee from talking to a union official when they are on site.”
Rio Tinto Alcan has smelters at Bell Bay, Boyne Island and Yarwun all of which will be first targets of the AWU for unionising.
President of CFMEU Tony Maher has spoken up in support for AWU’s goal to unionise the glass and aluminium sector.
“The AWU has my full support in its battle against the shiny arses – it’s our battle too.”

Smelter demands that blocked electricity contract be honoured
Sydney Morning Herald - 18-Feb-2011
The operator of the Kurri Kurri aluminium smelter, the Norwegian-owned Hydro Aluminium, says the future of its smelter in the Hunter Valley is in doubt because of a lack of government commitment.
Late last year the state government blocked Delta Electricity from signing a contract to supply Hydro, after two years of negotiations, because the privatisation of the state's power assets was moving into the final stage.
In a media release last week the state government instructed Hydro to talk to Macquarie Generation about a new supply contract. Telephone calls from Hydro to the government have gone unanswered.
Macquarie already supplies the rival aluminium smelter Tomago. Supplying Kurri Kurri as well would pose significant risks since more than 30 per cent of its output would be tied up in two companies.
If any of its generators encountered mechanical problems, Macquarie might face difficulties obtaining enough electricity from other suppliers at a competitive price in an emergency for any period of time.
It is believed Hydro has held preliminary talks with Macquarie for a possible contract, but finalising a new contract is likely to be a slow process. The new contract is to run for 10 years, from 2017.
Hydro said yesterday that it had reserved the right to seek compensation from the state government because it had blocked Delta from finalising a contract. Any such claim for compensation might be very substantial, it said.
''We have a contract with Delta, and we want that honoured,'' a Hydro executive, Trevor Coombe, said yesterday. ''Both boards have agreed to it.''
Hydro is already beginning to shelve capital spending plans due to the lack of certainty in finalising a new supply contract, raising questions about the future of the smelter.
In December the government sold output from the Wallerawang and Mount Piper power stations near Lithgow to TruEnergy, but it received no bids for output from its two power stations on the central coast, Munmorah and Vales Point.
Hydro's existing contract with Delta runs until 2017, although there are question marks about its ability to keep on supplying, since Munmorah, one of the oldest power stations in the state, is to be shut down by the middle of 2014.
Delta has approvals in hand for a $500 million rebuilding of its generators at Munmorah, although under existing government policy, all new investments in power stations are to be undertaken by the private sector.

Saudi project a test for expat recruitment - 17 February 2011
CONTENDING with an oppressive environment for women and delays in the granting of work permits, which effectively forced its expatriate workers to rely on 180-day visas, are just some of the challenges Alcoa World Alumina has faced in overseeing development of the $US10.8 billion ($A10.8 billion) Ras Az Zawr alumina refinery and smelter in Saudi Arabia.
Established as a joint venture between Alcoa and state-owned mining company Ma’aden, which holds a 75% interest, the Ras Az Zawr complex, when finalised in December 2014, will be the largest fully integrated mine-to-metal aluminium production complex in the world.
Plans for the project envisage a 30-year supply of bauxite at the rate of 4 million tonnes per annum with ore to be supplied from mines at Al Baitha in the north of the country.
The design capacity of the refinery is 1.8Mtpa, while the smelter will have a production capacity of 740,000tpa and an initial hot-mill will have capacity for 260,000tpa before rising to 460,000tpa by 2013.
Covering an area of 77 square kilometres, Ras Az Zawr is located 90km north of Al Jubail on the Arabian Gulf coast. Apart from housing the refinery, smelter and rolling mill, it is also the site for Ma’aden Phosphate Company’s integrated chemical and fertiliser facility, currently nearing completion.
Alcoa’s development plan will see it remain for five years, during which time it will train and mentor local workers and equip them with the skills necessary to eventually take over management of the operation.
The company’s current goal is to source at least half the workforce locally.
Speaking late last year at a Resources Workforce Strategies Conference, Alcoa human resources consultant Susie White touched on some of the challenges in attracting and retaining expats, especially those with female spouses, to work in the Middle Eastern country.
One point of contention had been the lack of work permits, which prevented access to shipments, bank accounts or even a driver’s licence for expat staff.
“The JV is a new business and even though we have been trying to register for a year, it just hasn’t happened,” White said.
“Originally we were told it would be May last year, and then August and then maybe tomorrow, but who knows when it will happen, so at the moment we are sending people on a 180-day visa which is also quite challenging.”
But perhaps one of the biggest hurdles the JV had had to overcome, apart from its location in what could best be described as a volatile part of the world, was the family needs of expats, especially when it came to living on a camp compound.
“We need to equip them early with what to expect,” she said.
“Availability for housing is also slim so we need to start this process early and are setting some service level agreements with some preferred compounds at the moment.
“We found a necessity to really support spouses because of the restrictions placed on females living and working in the kingdom and have established a two-day intensive cultural course and support programs, such as a ‘buddy’ system for new expats and their wives, linking them with somebody already on the ground
.”Language training in Arabic was also offered, along with the standard relocation expenses and bonuses.
“Where we have struggled a little bit is not just attracting the Y generation, but expats where the female partner of the relationship has a career,” White elaborated.
Women were not allowed to work in Saudi Arabia except as a teacher, doctor or nurse; however, some could work within the camp compound in other disciplines, such as yoga teachers.
Only marriage was considered legal in the kingdom, so relationships such as a de facto were not considered legitimate.
“Having worked for a company for three years that are putting more females into trades and engineering roles, to come to a country and work on a project where it is going to be very difficult for us to get females in at all has been a big change in my psyche and been very hard for me to understand and accept,” White admitted.
The restrictions placed on women were many.
“You can’t drive, you must wear conservative dress which covers you from head to toe at all times, you must be escorted when travelling outside the compound, it is difficult to meet and socialise with other Saudi women, generally it is forbidden for expats to talk about their wives, women can’t travel with men, can only eat in female sections of restaurants and there are no female toilets in any of the offices,” she said.
“You cannot drink alcohol, eat pork, practise any other religion or even bring the holy Bible into the kingdom and there are many travel restrictions.”
The Saudi weekend fell on Thursday and Friday with Friday being the holy day, which effectively meant there were only three business days in which to work, when taking into account the usual Saturday and Sunday expat weekend.
There were five prayer sessions a day in which everything stopped.
To assist in its recruitment drive, White said Alcoa had hired a trainee manager, tasked with building relationships with local technical colleges, in a bid to establish an 18-month training program targeted at school leavers.
“Obviously we have no operations yet because construction hasn’t started yet, but we are using neighbouring refineries from similar industries in the region to train up these people so that they will become our first operators in 12 to 16 months time,” she said.
During the recruitment and interview process, whether in person or over the phone, representatives of Ma’aden also had to be present, which posed another set of challenges.
“Saudis don’t really do business over the phone, have no concept of time management and may not even return emails, or may simply not even turn up to pre-arranged meetings,” White said.
Expat assignments were broken down into short-term and long-term stints of, respectively, six months for a variety of disciplines or a period of three to five years.

Noranda says sets production record in Q4 at Missouri aluminum smelter
Platts - 16Feb2011
Noranda Aluminum achieved record production in the fourth quarter at its 263,000 mt/year smelter in New Madrid, Missouri, shipping 152 million pounds of primary aluminum products, the company said Wednesday.
Last September, Noranda embarked upon a $38 million project to increase New Madrid's annual metal production by about 35 million pounds by 2013, relaunching a mid-2008 initiative that was sidelined by the recession and declining market conditions in early 2009.
Noranda, based in Franklin, Tennessee, said it invested $21 million in capital expenditures in the final three months of 2010, including $3 million in expansion projects at New Madrid and St. Ann Bauxite, operator of a Jamaican bauxite mine and related facilities.
Noranda has been ramping up production at the Jamaican mine since it acquired full ownership in 2009. Century Aluminum previously held a 50% stake in St. Ann.
--Bob Matyi,
Similar stories appear in Metals Week. See more information at

Chinese company plans to build plant in Indiana
Bloomberg - Feb 16, 2011
WEST LAFAYETTE, Ind. (AP) — A Chinese company that makes aluminum components for the auto industry and other businesses plans to build a factory in Lafayette, creating up to 150 new jobs by 2013.
Gov. Mitch Daniels and executives of Nanshan America Co. announced the project Wednesday at Purdue University in West Lafayette.
The company based in China's Shangdong province plans to invest up to $98.5 million to build a 420,000 square-foot plant and a 15,000 square-foot office building. The Indiana Economic Development Corp. says the project is a result of an economic trip Daniels made to Asia in November.
Construction is expected to begin this spring with the plant becoming operational in 15 months. Hiring is expected to start this fall.
State and local officials offered Nanshan more than $1.3 million in incentives.

Investments worth trillions at risk from climate change: study
Reuters - Feb 16, 2011
SINGAPORE (Reuters) - Climate change could put trillions of investment dollars at risk over the next 20 years, a global study released on Wednesday said, calling for pension funds and other investors to overhaul how they allocate funds.
Risks from more extreme weather, continued delay in climate policy by governments and uncertainty over the shape of a new global climate pact were major concerns, while renewable energy, agriculture and infrastructure could be opportunities.
The study, led by global investment consultancy Mercer, describes climate change as systemic risk because it challenges the conventional allocation of assets and requires new ways of assessing climate policy and change risks.
For example, global warming-related policy changes could boost the cost of carbon emissions for power generators, aluminum smelters, transport and other sectors by $8 trillion by 2030, said the report.
The Investor Group on Climate Change in Australia, which represents about $600 billion in assets under management, said stronger climate change policies were needed to drive emissions-cutting investments and reduce longer-term risks.
"Weather events like the recent floods in Australia will continue to impact infrastructure, food security and property, contributing to material portfolio risk for institutional investors," Chief Executive Nathan Fabian told Reuters.
The study was compiled with the help of the International Finance Corporation, part of the World Bank, and 14 institutional investors, mostly pension funds.
The report, designed as an investment guide, looked at four climate policy scenarios.
These ranged from regional divergence where some regions, such as the European Union and China/East Asia take strong action to reduce greenhouse gas emissions, to the least-likely scenario of a breakdown in efforts to fight climate change.
It also looked at the estimated flow of investment into low-carbon technologies such as wind, solar and nuclear, the impacts of climate change such as more extreme storms, floods and rising sea levels and costs from global carbon policy decisions.
It found that the cost of impacts on the environment, health and food security could exceed $4 trillion by 2030, with longer policy delays bringing rising costs, mostly from adaptation spending such as building sea walls.
It also found that investment needs could top $5 trillion by 2030 for low-carbon technologies such as energy efficiency, biofuels, nuclear power and carbon capture and storage.
The authors found a split between regions on emissions policies the most likely of the scenarios, with a cost on carbon pollution at $110 per tonne in the countries studied.
The "delayed action" scenario sees carbon costing just $15 a tonne to 2020, but jumping to $220 a tonne globally as 2030 nears.
Taking stern action sooner on climate policy was the least disruptive and best for investors, said the report.
"The uncertainties are lower than for the other scenarios, as investors are able to predict the pathways of policies with a reasonable degree of confidence," says the report of the "stern action" scenario.
Private equity investment opportunities in renewable energy, forestry and agriculture, infrastructure and real estate were also dependent on regional policies, it said.
(Editing by Clarence Fernandez)

Aluminium producer Alro doubles net profit to USD 50.4 million on ... - 15-Feb-2011
Aluminium producer Alro posted a preliminary net profit of USD 50.4 million last year, almost double on the previous year, the company has announced. Its turnover was of USD 570 million, up on the EUR 334 million posted the year before. The company paid a profit tax of EUR 7.9 million, while its other taxes amounted to EUR 19 million.
“Alro consolidated its position, both technologically and financially, and it benefited from the slight but continuous recovery of international market”, said Gheorghe Dobra, General Manager of Alro Slatina. “We implemented a cost reduction strategy ever since 2008, and having a sound and competitive cost structure, we were able take advantage of the improved situation from the aluminium market, with a higher London Metal Exchange (LME) price compared to 2009. We are well prepared to take all appropriate measures depending on international context,” he went on.
The aluminium price increased on London Metal Exchange to as much as USD 2,450/tonne, in 2010, compared to a high of USD 2,200 /tonne, a year before. However, in 2010, LME price didn’t go below USD 1,800 /tonne, while in 2009, in went as low as USD 1,600 /tonne.
The company’s total primary aluminium production for last year was approx. 241,000 tonnes, while its investment program was of USD 8.8 million. Alro continued its investments focused on increasing its wire rod production capacity, reducing utilities consumption, and consolidating the efficiency of the smelter.
Last year, Alro signed a syndicated loan with the European Bank for Reconstruction and Development that refinances most of the company’s existent debt. The EBRD retained USD 75 million on its account, with USD 105 million syndicated to commercial banks.
Alro SA is subsidiary of Vimetco, a global primary and processed aluminium producer.

Alcoa seeks 5 year relief for Wagerup
SteelGuru - 14-Feb2011
West Australian reported that Alcoa is asking the WA Government for a 5 year approvals relief as the aluminum giant tries to resurrect the USD 2.2 billion expansion of its world class Wagerup alumina refinery south of Perth. The much hyped project was shelved indefinitely just over 2 years ago when the global financial crisis triggered a collapse in aluminum prices.
Alcoa has been waiting for a return of more favorable market conditions while trying to secure a cheap gas supply deal before it can justify Wagerup's expansion. When Alcoa shelved the project in November 2008 aluminum prices were heading towards a low of USD 1288 tonne from USD 3317 per tonne peak during the China fuelled mining boom.
But in a sign the market has not recovered sufficiently for Alcoa's liking and that the WA gas market remains tight and expensive, the US giant is asking the State Government to extend the environmental approval for Wagerup's expansion by another 5 years.
If the extension were granted, it would give Alcoa until 2016 to start Wagerup's expansion designed to increase alumina output from 2.5 million tonnes per year to 4.7 million tonne per year.
The expansion project has been talked about as creating 1500 construction and 3000 direct and indirect jobs in the South West, as well as generating millions of dollars in taxes and royalties for the State.
Alcoa's original environmental approval for the expansion was granted in 2006 and is valid until September. But Alcoa and its partner Alumina have no intention of starting work on the expansion in the next few months which is why they are pleading for an extension rather than having to start the tortuous approvals process from scratch. (Sourced from West Australian)

Novelis to make India debut in October
Business Standard - February 15, 2011
Come October, Hindalco will bring Novelis, its Atlanta-based subsidiary and world leader in aluminium rolling products, into india.
Tapping the fast growing flat rolled aluminium products market in the country, with applications in the automotive sector, beverage cans and electronics, among others, Hindalco is setting up a 500 kilo-tonne per year plant in two phases, with an investment of $130 million (Rs 600 crore) in its first phase. The first phase will have a capacity of 135 ktpa and will be up and running by
The plant was originally set up in Rogerstone, Britain, but was dismantled and the machinery is being brought to India, as it was a high-cost plant and couldn’t survive competition from low-cost producing countries such as China. The project is underway for the transfer of all key equipment for flat rolled production to the new unit at Hirakud, Orissa. Orders have also been placed for other equipment to balance production. Says Hindalco, “This will enable the company to produce a wide range of superior engineering products, including can-body stock, for the local and export markets.”
Said Debnarayan Bhattacharya, managing director of Hindalco (and vice-chairman of Novelis), “The products will be sold by Novelis, as they are a known brand. We will have to make sure where do we get the maximum benefit for Hindalco and Novelis together. We will look at the export market from this plant itself.”
Currently, the demand for can-body products in India is 1.2 kg per capita as against 12 kg per capita in China. “Even if we produce half of what is consumed in China, our production will go up by six times,” he said.
The $600-crore investment at the Hirakud plant is for the first phase of the project and the investment plans in the second phase are being firmed up. Bhattacharya said, “It will be internal accruals to begin with and we may go for project financing for the second phase. The objective is that as the market develops, either in India or abroad, we will produce more. As soon as we see that we need to produce more, we will take the capacity up in a modular fashion.” Adding: “The can-body is one of the toughest things to produce in the world and also takes a lot of time to get approved by customers.” He said there currently were just two factories in India producing cans, one of Rexam, which uses steel to make cans and the other by Can-Pack, which uses aluminium.

Siemens to supply electrical equipment for Henan Zhongfu hot aluminum rolling ... - 14-Feb-2011
Siemens to supply electrical equipment for Henan Zhongfu hot aluminum rolling mill - Chinese aluminum producer adds flat products to his portfolio
Linz, Austria, 2011-Feb-14
Siemens has received an order from the Chinese company Henan Zhongfu Industrial Co., Ltd, to equip a new 2560 millimeter aluminum rolling mill with automation and drive technology. The rolling mill will be assembled in Gongyi in the Henan Province, where the first strip is due to be rolled in December 2012. The value of the order lies in the double-digit million Euro range.
The new hot aluminum rolling mill is part of Henan Zhongfu's comprehensive expansion project to develop its production of high-quality strip and sheet metal for new types of packaging materials. The 2560 millimeter hot rolling mill is designed for an annual production of 760,000 tons of flat products. The plant comprises four heating furnaces, a reversible roughing mill – consisting of a horizontal stand with edger, and a downstream four-stand tandem hot rolling mill, with coiler and pallet transport system.
Siemens will supply the complete automation and drive equipment for the hot rolling mill, from the furnace outlet side to the coiler, as well as for the coil conveyor to the high-bay warehouse. The automation equipment includes the basic automation, together with the technological control systems, the human-machine interface equipment, and the associated sensor systems. One important element is the process automation, which has integrated profile and flatness control to calculate the setpoints of the rolling plant online on the basis of analytical mathematical models. Self-learning neural networks adapt the models precisely to the given production conditions, thus facilitating flexible production planning while still maintaining the same high product quality. Sinamics S150 medium voltage converters and Sinamics S120 low-voltage converters will be supplied for the drives.
All the systems and components used are drawn from the integrated Siroll ALU solution platform for hot aluminum rolling mills. Their modular design and high degree of standardization guarantee a fast production ramp-up and safe, easy to maintain operation. Siemens will also be responsible for supervising the installation, commissioning, and customer training.
The deciding factors which enabled Siemens to win this order were its technological competence and the large number of worldwide references which it has accumulated in the aluminum industry. With this project, Siemens extends its leading position in the equipment of hot aluminum rolling mills still further.
Henan Zhongfu Industrial Co. Ltd is a subsidiary company of Henan Yulian Energy Group Co., Ltd. This group of companies not only owns aluminum production plants but is also active in the fields of electrical power generation, district heating and water supply.
Further information about solutions for steel works, rolling mills and processing lines is available at:

Alumina Trade to Shift to Spot Price in Three Years, Rusal Says
Bloomberg - 14-Feb-2011
Alumina, used to make aluminum, will be traded mostly in the cash market within three years not long- term contracts, adding to price gains for the material, the world’s largest maker of the lightweight metal said.
The move to a producer-set spot index, which makes the price less dependent on aluminum, will push alumina to $450 a metric ton this year from about $390, United Co. Rusal Deputy Chief Executive Officer Oleg Mukhamedshin said today.
“Long-term alumina contracts are gradually expiring and we expect that in two to three years most of the sales will be based on the index price rather than the long-term contracts,” Mukhamedshin said on a conference call. “This news is pushing the alumina price up.”
Alumina’s price would increase at a faster rate than Rusal forecasts for the lightweight metal. Rusal expects aluminum to “sustain above $2,500” this year, the company said today in a statement. Last year, aluminum averaged $2,199 a ton in London.
To contact the reporter on this story: Yuriy Humber in Tokyo at
To contact the editor responsible for this story: Andrew Hobbs at

4-traders (press release) - 13-Feb-2011
The board of directors is pleased to announce that it approved restarting the operations at the Windalco-Kirkvine Works Plant with effect from 1 July 2011. The restart of Windalco-Kirkvine Works Plant is subject to the approval by international lenders and further discussions of the Company with its partners on the project.
Shareholders and investors are advised to exercise caution when dealing in the securities of the Company.
This announcement is made pursuant to Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. Reference is made to the prospectus of United Company RUSAL Plc (the ?Company?) dated 31 December 2009 (the ?Prospectus?). Unless otherwise specified, capitalised terms in this announcement shall have the same meanings as the defined terms in the Prospectus.
As set out on pages 122 and 123 of the Prospectus, the Windalco-Kirkvine Works Plant is part of the West Indies Aluminium Company (Windalco) and is an alumina refinery in Jamaica owned by the Group and Jamaica Bauxite Mining Limited, representing the Jamaican government. The production at the Windalco-Kirkvine Works Plant was temporarily suspended in April 2009 due to cost-cutting measures.
The board of directors (the ?Board?) is pleased to announce that it approved restarting the operations at the Windalco-Kirkvine Works Plant with effect from 1 July 2011. The restart of Windalco-Kirkvine Works Plant is subject to the approval by international lenders and further discussions of the Company with its partners on the project.
The investment cost of the restart of operations at the Windalco-Kirkvine Works Plant from January to December 2011 is expected to be approximately USD9.5 million while the plant commissioning budget is approximately USD17.5 million. It is expected that the plant working capital in 2011 will increase by approximately USD24.5 million. The total capacity of the Windalco-Kirkvine Works Plant is approximately 600,000 tonnes of alumina per year. In 2011, the production of the Windalco-Kirkvine Works Plant is planned to be approximately 252,277 tonnes of alumina.
During the period in which operations at the Windalco-Kirkvine Works Plant have been suspended, the Company undertook a number of measures to ensure that when market conditions were such that they would make the restart of Windalco-Kirkvine Works Plant economically viable, the operations would be restored in more effective and competitive manner. The Company has carefully reviewed ways of optimizing the facility's structure and production process, reducing cash operating costs and improving the efficiency of the Windalco-Kirkvine Works Plant's operations. It is expected that the restart of the Windalco-Kirkvine Works Plant will increase the utilization of the infrastructure in Windalco (including port and railway) which is only partially utilized for the Ewarton Works Plant at present.
Windalco (West Indies Alumina Company) is situated on the island of Jamaica in the Caribbean. It comprises two alumina refineries (Ewarton Works and Kirkvine Works), a shipping port (Port Esquivel) and also bauxite mines in Schwallenburgh (Ewarton) and Russell Place (Kirkvine) and farms in Manchester and St. Ann. The production capacity of the Windalco is 1.2 million tonnes of alumina annually.

Venezuelan Government Resolves Strike at Venalum Aluminum Plant
Bloomberg - 13-Feb-2011
State-run aluminum company CVG Industria Venezolana de Aluminio CA began full operations again last night after a strike was resolved, Mining Minister Jose Khan said.
About 350 workers at Venalum, as the company is known, returned to work at 10:30 p.m. New York time last night, Khan said. The government agreed to meet with workers tomorrow to continue discussing labor issues, he said. The strike left the plant functioning at minimum capacity for about a week.
“We’ve had more than six meetings, we’ve had some lengthy discussions and even though there were some disagreements, our government managed to resolve this problem with no aggression toward the workers,” Khan said in comments carried on state television.
About 500 workers had continued working during the strike to ensure the factory retained a minimum level of functionality, Khan said.
To contact the reporter on this story: Charlie Devereux in Caracas at

Potential tightness in aluminum billet market brewing for Q2
Platts - 11-Feb-2011
US aluminum billet market sources are bracing themselves for a potential tight market scenario in the next few months, which could leave extruders scrambling for supplies and facing higher upcharges.
Market sources attributed the tightness more to a lack of imports than increased demand.
The wildcard nearby is the expected strength of the South American market and the potential reduction in imports, particularly as the Brazilian market strengthens. Market sources have said that currently about 10-15% of North American supplies are coming from overseas -- South America, Russia, and the Middle East. That is up from 5-6% five years ago.
One extruder said that "both my prime and secondary suppliers are saying metal is going to be tight at least through the first half of the year." But for now, he is getting adequate Russian supplies, "and there seems to be plenty of supply from them. I locked in my upcharges last December and have not heard of anyone going to 11 or 12 cents yet."
The Platts 6063 billet upcharge rose to 10-11.5 cents/lb plus P1020 delivered Midwest as of February 10, up from 9.5-11 cents the previous week and up from more historical levels of 8-9 cents in May 2010.
Another extruder agreed that the tightness is because of lack of imports but said there was "an increase in overall business for extruders. We have been able to increase orders with all our billet suppliers over and above the commitments we had agreed upon last fall."
The extruder said his contracted levels for 2011 with suppliers were higher than last year's. Nevertheless, he did not think upcharges "will take off."
A billet trader said he saw the current market "steadyish" and saw no panic yet. "There are a lot of shorts out there, but they are not coming into the market yet. This could be an issue later," he said. He pegged current billet upcharges at 10.5-12 cents, saying it's "a supply issue. There are no imports." He added that the $120-130/mt incentives the warehouses are offering for P1020 mean producers will continue to produce P1020 rather than billet.
The trader said upcharges could hit 15-16 cents. "I think upcharges will continue to pick up throughout the year due to seasonality," he said.
A remelter said this potential tight situation "is as people had anticipated.
He said there is not enough material in the Gulf "due to South America being red hot, and this is causing metal from the Midwest to move to the South." And in the Middle East, "the taps are not flowing as they should be."
The remelter said the min/max clause on contracts are tighter than they were last year, so that any new business is fresh spot business. "The billet producers will hold their customers to a higher degree of contract compliance this year," he said.
Another remelter said while the market is expected to be tight, "it will not be a market where people cannot get their metal."
He noted that US aluminum extrusion shipments were up 15% in 2010 versus 2009, but they are still far below the levels of 2006. "In any market when demand dropped so much, capacity had to be adjusted. Demand came back faster than supply came back," said the remelter. He said depending on the demand scenario this year, "some customers may not be able to get enough units, but I do not expect that to persist. If that happens and upcharges hit above 14 cents, then suppliers will dig out more capacity."
The remelter said that for that capacity to be turned on, producers need to ensure that demand is sustainable and double-digit upcharges will persist.
An extruder with a casthouse expected the billet market to "remain tight."
There is plenty of billet capacity, it's just that the capacity won't be turned on because of credit issues. Why produce billet and take a high risk of credit. It's smarter to just produce P1020 and dump it in an LME warehouse."
The remelter said he expected extrusion growth of 5-10% this year.
According to Davenport's Equity Research, US aluminum shipments are expected to grow 8.2% in 2011 from 2.2% growth in 2010, and 10.3% in 2012.
On a more bearish tone, a billet producer said he was very surprised to hear of 11-12 cents upcharges. "I am not seeing it," he said. "None of our customers have come to us to say they need more and will pay more."
--Tina Allagh,

Third smelter line on track to restart in March
The Wenatchee World Online - 11-Feb-2011
MALAGA — The hiring’s done and training under way as 80 workers move toward a possible March start-up of Alcoa Wenatchee Works’ third potline, mothballed for more than a decade.
Early hires, on the job for three months and already trained, have begun making carbon anodes – essential components in the aluminum-making process — as a first step in firing up the third smelter line.
“The training has gone well, with many of the first-hired workers now getting full command of their new skills and duties,” Alcoa spokeswoman Sharon Kanareff said Thursday. “The longer they’re on the job — practice makes perfect —
Jobs include a variety of potline tasks, including operating cranes and learning to make adjustments on the smelter pot, she said.
Local officials for Alcoa, the world’s largest aluminum company, announced Jan. 7 that the Wenatchee smelter would be one of three in the U.S. to restart idle production lines this year as worldwide demand for aluminum increases, particularly in aerospace industries and food and beverage products.
As yet, no firm start-up date for the smelter line has been set, said Kanareff, but the company is aiming for sometime in March. “Prep work is still under way, and its completion will determine when the line opens.”
The 435-employee Wenatchee Works has spent $1.5 million in preparation work to ensure the potline is operational by “spring flush” on the Columbia River, said plant manager Nik Winjum. That’s when massive amounts of snow runoff move down the river to produce a surge in power at the region’s hydroelectric dams.
The potline’s spring start is well ahead of the Nov. 1 activation date of a new contract with the Chelan County PUD for cheap power to operate the line. The new 17-year contract provides enough energy, said Winjum, to increase the smelter’s annual production by 42,000 metric tons. At its peak in the 1960s, the plant produced 210,000 tons annually.
After more than two months of planning, Alcoa and PUD officials are still in discussions to determine how to power the early start-up — where that electricity might come from and how much it’ll cost — prior to the new contract taking effect. The PUD is expected to manage the power delivery no matter where the electricity is generated, Winjum said.
The 80 new positions for the third line were filled from a hiring pool of 750 applicants. Additional jobs could be added once production on the line starts, said Kanareff, “but at this point, we’re not sure. We’ll continue to evaluate employment needs as this long process unfolds.”
Alcoa has estimated that the potline jobs will generate nearly $100,000 in wages and benefits per employee annually. According to a labor contract approved last year, hourly pay ranges from $16.75 for entry-level workers to $23.77 for employees in the highest job class. Wages vary depending on an individual’s seniority, worked overtime and other factors, Kanareff said.
Mike Irwin: 665-1179

Guinea revising its mining code - Mines minister
SteelGuru - Friday, 11 Feb 2011Mines Minister Mohamed Lamine Fofana said that Guinea which held its first democratic transfer of power last year, has started revising its mining laws in an effort to ensure its people benefit from the nation’s mineral wealth.
Mr Lamine Fofana said that “The revision of the act has started. It is nearing the stage of validation and this will be done in consultation with labor unions and other interested parties.”
Guinea holds as much as half of the world’s bauxite, used to make aluminum, more than 4 billion tonnes of high grade iron ore and significant deposits of diamonds and gold.
(Sourced from Bloomberg

Alcan to get new furnace: Beshear says $37 million project to retain 488 jobs
Evansville Courier & Press - 10-Feb-2011
Against the backdrop of heat shimmering from a vast underground furnace, officials of Rio Tinto Alcan on Thursday announced that the company will proceed with a $37 million investment that they said will help preserve the 488 jobs at the Sebree aluminum smelter.
The company will install a new bake furnace inside Building 261, a cavernous building that stretches longer than two football fields.
At temperatures reaching up to 1,900 degrees Celsius (3,500 degrees Fahrenheit), the furnace will bake 1,600-pound blocks of coke and petroleum pitch into giant electrical anodes that are used in the aluminum smelting process. The smelter produces 3,000 such anodes every week.
Replacing the nearly 40-year-old existing furnace will help the Sebree smelter better compete with newer, more efficient smelters around the world, the company said. Completion is expected by August.
"The new bake furnace is important for the future of our plant and a safer operation," Stephane Leblanc, Sebree's plant manager, said in a statement.
"Without it we would have to shut down the plant or buy anodes on the market. The investment will open the door to move forward with other projects that will make the plant more sustainable for the coming years," Leblanc said.
At a ceremony before more than 100 plant workers, elected officials and local business leaders, Gov. Steve Beshear said Rio Tinto Alcan's announcement is "exciting news for the community and the entire region."
"We're going to retain nearly 500 jobs here," Beshear said.
"This is one of the largest employers in this area," he noted. "There is nothing more important for families than a steady job and reliable income."
The rebuild of the vast below-ground furnace -- stretching 445 feet long and 100 feet wide -- is part of $50 million in modernization and improvement projects that Rio Tinto Alcan is pursuing at Sebree. The company also plans an upgrade in the smelter's potlines that, by boosting electrical amperage, will increase productivity.
The Kentucky Cabinet for Economic Development has approved $15 million in state corporate income tax incentives toward the Alcan investments.
"This plant is only one of a handful of aluminum smelters still operating in the United States," the governor noted Thursday. "It's an important part of Kentucky economic landscape. We're pleased that state government was able to step up and partner with Alcan." ............................................

Aluminum smelter has failed to earn USD 1.8 billion
El Universal - 10-Feb-2010
The situation of CVG Alcasa, a Venezuelan smelter, has not changed and following 17 days of operations at a minimum level, the board of directors of the basic industry is assessing the consequences.
Elio Sayago, the president of the state-run company said that the stoppage of the plant has led to a delay in the lamination process of 600 tons of primary aluminum and this means that the company has failed to earn USD 1.8 billion in revenue.
"Cash flow has declined and we have been not able to pay our suppliers. We had a VEB 40 million (USD 9.3 million) deficit in January. Therefore, we had to contract debts using January and February's production as collateral," Sayago said.
Protests have led to 5,000 hours of overtime in 16 days. In normal conditions, this amount of overtime hours is generated in a year and a half.
Meanwhile, the facilities of Venalum smelter are watched over by National Guard troops.

Iceland Resumes Alcoa Talks on Smelter, Vidskiptabladid Says
Bloomberg - 10-Feb-2010
Iceland’s government has resumed talks with Alcoa Inc. on building an aluminum smelter in the north of the island, Vidskiptabladid reported, without saying how it obtained the information.
John Thuestad, Alcoa’s president of global production, and Marcos Ramos, the company’s president of global primary products in Europe, met with Industry Minister Katrin Juliusdottir last week to discuss the project, the Reykjavik-based newspaper said.
To contact the reporter on this story: Omar R. Valdimarsson in Reykjavik
To contact the editor responsible for this story: Tasneem Brogger at

Ghana Mines Minister: Wants Integrated Bauxite Industry
Automated Trader - 10-Feb-2011
CAPE TOWN -(Dow Jones)- Ghana is seeking to develop an integrated bauxite industry in order to draw more value from its natural resources, the country's mining minister said Wednesday.
Alhaji Collins Dauda said that "bauxite would be a way to industrialize the country very fast." He was speaking on the sidelines of the Indaba mining conference here. He noted that Ghana is "losing a lot of money" by selling its resources without seeking to process them in order to generate more value.
Bauxite is a key ingredient used to make alumina which is in turn refined into aluminum.
He said that Vimetco NV (VICO.LN), the U.S.'s Alcoa Inc (AA), and China's Bosai Minerals Group had all expressed interest in participating in Ghana's desired development of an integrated bauxite industry.
He noted that talks have already started with Vimetco. For the moment, Vimetco submitted an application for a bauxite exploration license that the ministry is trying to review "as fast as possible."
Ghana has recently started to produce oil for the first time and expects to generate large amounts of wealth from its discoveries. Cheap access to energy could also play an important role in aluminium production. Around 35% of the costs of aluminum production is related to energy.
Dauda said transportation would also be a key issue. He believes that "not less than $500 million" would have to be invested in new railroads in order to push bauxite integration. At the moment, any plans for an integrated bauxite industry is still conceptual, Dauda said.
"We are still drawing the road map," he added.

Research and Markets: Cameroon Infrastructure Report Q1 2011 - Geovic Nkamouna ... - 09-Feb-2011
DUBLIN -- Research and Markets ( has announced the addition of the "Cameroon Infrastructure Report Q1 2011" report to their offering.
Cameroon Infrastructure Report provides industry professionals and strategists, corporate analysts, infrastructure associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Cameroon's infrastructure industry.
Cameroon's infrastructure sector remains mired by one of the worst Business Environments and Project Finance Landscapes on the continent. There have been some positive signs this quarter with large scale projects being signed by foreign investors, particularly from China. It is this foreign inflow of investment secured by the country's rich natural resources that has been responsible for BMI forecasts rising again for 2011. Construction industry value is expected to register 5.7% year-on-year (y-o-y) growth in 2011 and continue rising to reach 19.2% y-o-y by 2013. The industry will be valued at US$1.4bn by the end of the forecast period in 2015.
Key developments contributing to forecasts included: The announcement that subsidiaries of two large state-owned Chinese construction companies had signed agreements to construct new railway and port developments added upside to the forecasts. This is another instance of the well-worn Chinese model of investing in African infrastructure in order to ensure future resources. BMI believes that these relationships will pay dividends in the years to come and aid Cameroon as it attempts to diversify its economy. In September 2010, Australian iron-ore mining company Sundance Resources and Chinese construction company China-Africa Construction signed a memorandum of understanding to begin construction of a deepwater port at Lolabe and a connecting rail link.
Plans by US firm Hydromine to build and operate an aluminium smelter and two accompanying hydropower plants in Cameroon offer significant upside potential to our forecasts for the country's construction sector. If given the go ahead, the project, which is estimated to cost around US$2.8bn according to Reuters, would provide a boost to the growth outlook for Cameroon's construction industry, underlining our expectation that industrial construction, through foreign investment, will continue to drive sector growth in the next two to three years.
We continue to see the economy being driven forward by a relatively small number of major foreign investments in mining, oil & gas and infrastructure. In the coming year, the opening of the Rio Del Raybasin oil fields is the biggest new development, but construction is expected to continue on the LomPangar Dam (construction is expected to begin November 2010), Memve'ele hydropower station (at a cost of US$795mn) and the Kribi gas-fired power plant and multi-purpose port (at an estimated cost of US$655mn).
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Samsung Engineering in initial Saudi, Alcoa deal
Reuters - 09-Feb-2011
RIYADH, Feb 9 (Reuters) - State-run Saudi Arabian Mining Co (Maaden) 1211.SE and U.S. company Alcoa (AA.N) signed a letter of intent with South Korea's Samsung Engineering (028050.KS) worth 2.21 billion riyals ($590 million) to build part of a mega aluminium complex.
Alcoa and Maaden teamed up in 2009 to build the world's largest fully integrated aluminium complex in Ras Az Zawr, on the Gulf coast, fast becoming Saudi Arabia's mining cluster.
Maaden signed a letter of intent with Samsung which involves engineering, procurement and construction of a rolling mill as well as testing the plant, Maaden said in a statement on the bourse website on Wednesday.
The project would take 32 months to complete, it added.
The statement named the company only as Samsung but an industry source said the deal was signed with Samsung Engineering.
The first phase of the aluminium complex which includes a smelter and a rolling mill would be up and running by 2013 while a bauxite mine and an alumina refinery is set to start by 2014.
The rolling mill would produce 380,000 tonnes annually of aluminium sheets, it said. When Maaden and Alcoa first announced the project they said the mill would have a capacity of up to 460,000 tonnes. (Reporting by Reem Shamseddine; Editing by Hans Peters)

Novelis to debottleneck, expand across globe
Daily News & Analysis - 09-Feb-2011
Novelis Inc, the aluminium rolling giant that’s part of the Aditya Birla Group, has chalked out ambitious expansion and debottlenecking plans across the globe.
The company will also increase recycling capabilities by a third to 200,000 metric tonne per annum.
Philip Martens, president and chief executive officer, Novelis, said $80 million will be spent in a debottlenecking exercise across the globe, “which will lead to substantial capacity release in a few years”.
He was addressing investors at a conference call on Tuesday evening after announcing the company’s results.
Novelis had earlier said 3-4% of capacity will get released every year through debottlenecking from the current fiscal through 2014.
The exercise, Martens said, will increase the company’s Ebidta by around $30 million annually.
The maximum debottlenecking will happen in Europe, followed by Asia, United States and South America.
And recycling, Marten said, “throws up a lot of benefits”.
“By enhancing recycling ability, the company gets access to more clients, and has a low-cost alternative as well; it is the apt answer from a sustainability perspective,” he said.
The recycling project will be through an investment of $50 million.
Martens said Novelis is also keen on strategic initiatives, which includes expansion of its Brazil mill, which is on time and within cost. It is also aggressively exploring growth in Asia.
For the quarter ended December 2010, the company reported a net loss of $46 million as against a net profit of $68 million for the corresponding period last year.
This was mainly because of a charge of $74 million for refinancing of debt and $20 million for restructuring activities.
“With a strong global market demand across all the four regions, and with good numbers in this quarter, we expect to cross $1 billion of adjusted Ebidta for financial year 2011,” said Marten

Aluminum smelters Alcasa and Venalum operate at a minimum level
El Universal - 08-Feb-2011
The actions taken in Caracas by union leaders of CVG Venalum, a Venezuelan basic industry, were unsuccessful. Demonstrations mounted in the aluminum smelter on Monday and workers blocked the access gates of the plant. As a result, operations remain at a minimum level.
Administrative areas were empty while night shift workers who work from 11 p.m. to 7 a.m. remained in production areas.
"We have not received any salary increase in the last four years," said Manuel Díaz, the secretary general of Sutrapuval, an aluminum union. He said that workers asked the company to negotiate a collective bargaining agreement, to implement meritocracy and a pay scale.
"We did not reach any agreement in Caracas. This was only a smoke screen (...) They can not argue that the company lacks money. Where are the USD 500 million that Glencore gave them for future sales?," he said.
Meanwhile, Rada Gamluch, the president of Venezuelan smelter CVG Venalum, said that the workers' actions undermine the operative and financial stability of the company and "are aimed at creating anarchy." He stressed that demonstrations were promoted by external factors that "do not seek positive benefits."

Norwegian group Hydro to invest in aluminium foundry in Angola
Macauhub - 08-Feb-2011
Luanda, Angola, 8 Feb - Angola will soon have an aluminium foundry, the director of Hydro Aluminium Angola, Gustav Saatad said Monday in Luanda during the 1st National Conference on Clean Energy.
Speaking to Angolan news agency Angop, Saatad, the director of the Angolan subsidiary of Norwegian group Hydro, one of the world’s largest aluminium producers, said that the company aimed to produce aluminium in Angola, making use of the high potential for renewable energy in the country.
The aluminium foundry project is expected to cost US$5 billion and when it goes online will produce 450,000 tons of aluminium per year.
In May 2009 Hydro and the Angolan government signed a memorandum of understanding to analyse the feasibility or an integrated hydroelectric and aluminium production project.
At the same conference, Angola’s Water and Energy Minister, Emanuela Vieira Lopes, announced that 36 localities would benefit from solar powered systems, which would provide electricity to schools, medical posts, water pumping systems, public administration facilities, homes and police stations. (macauhub)

Ultra-fast aluminum inclusion analysis using OES
Laboratory Talk - o7-Feb-2011
Thermo Fisher Scientific has announced the launch of an improved method for the ultra-fast analysis of inclusions in aluminum using optical emission spectroscopy (OES).
The method, which utilises the Thermo Scientific Spark-DAT option, significantly enhances the capabilities of the Thermo Scientific ARL 4460 metals analyser, offering a faster and more accurate alternative to existing methods of characterising inclusions in aluminum.
Inclusions can affect the properties of aluminum, including mechanical strength, gas porosity, machinabilty, surface quality and fluidity, making their control vital in many cases.
The Spark-DAT allows ultra-fast counting of inclusions and identification of their type in a few seconds, making it highly effective for controlling inclusions during aluminum production.
When combining the inclusion analysis with the standard analysis in concentration, only a few seconds of additional time are necessary.
This ability to obtain elemental analysis information and inclusion contents with a single OES instrument greatly reduces investment cost.
The inclusion analysis is carried out under the same conditions as the regular elemental analysis.
Sample surface preparation, instrument maintenance and consumables are unchanged compared with a standard OES instrument, ensuring very low operating cost.
The Spark-DAT option on the Thermo Scientific ARL 4460 Metals Analyzer increases the versatility of the spectrometer.
From routine use to research, Spark-DAT provides a quick, simple and cost-effective solution for inclusion analysis in the aluminum industry.
An application note has been developed to demonstrate the benefits of the Spark-DAT option.

Aluminum Norf orders second 2 chamber furnaces from LOI Italimpianti
SteelGuru - Tuesday, 08 Feb 2011
Aluminum Norf GmbH, Neuss, the world's largest aluminum rolling mill continues to invest in advanced equipment technology for the aluminum recycling. As a centerpiece for its new recycling center Alunorf was elected in 2008, the LOI Thermprocess recycling technology. Now, the company ordered for the next stage a further two chamber furnace at the TCF LOI Thermprocess, part of the LOI Italimpianti group.
The new recycling system will have a daily capacity of 150 tonnes of liquid metal that is obtained exclusively from scrap. There are different aluminum melted down scrap metal. The resulting liquid metal is made into new ingots.
The LOI Thermprocess plant was chosen because of their outstanding performance of Alunorf and environmentally friendly and energy efficient operation.
Contaminated scrap can be used without pretreatment. The integrated gas treatment provides a safe and efficient combustion of pollutants. The recycling furnace is equipped with a regenerator system that achieves a high heat recovery from the exhaust of the furnace. The reduced and cooled exhaust gas amount reduces the investment cost of the filter system. Same time retaining the LOI regenerator required for the environmental rapid cooling of the exhaust gases.
The expansion of the Alunorf Recycling Center will start in autumn 2011 the trial run. The LOI Thermprocess TCF recycling technology is successfully in use worldwide and currently produces a total of about 2,000 daily tons of liquid metal.

Govt may conduct open tender to find operator of Inalum
Jakarta Post - 07-Feb-2011
The government may conduct an open tender to determine the operator of aluminum producer PT Inalum if its intention to take over the company in 2013 goes as planned.
Industry Minister MS Hidayat said Monday that he had received instructions from Vice President Boediono requesting the minister to consider the option of opening chances for not only state-owned companies, but also for the public to take part in operating Inalum.
“We’re going to start the negotiation with Nippon Asahan Aluminum [a consortium of 12 Japanese companies currently holding a collective 59 percent stake in Inalum] on Feb. 18 in Jakarta,” he told reporters after a coordination meeting with several ministries at his office in Jakarta.
Hidayat continued that the central government was also considering a plan in which the regional government could get involved in the management of the company.
Earlier reports said State-owned Enterprises Minister Mustafa Abubakar revealed that the government might set up a new state firm to manage Inalum.

Eastalco plant to be razed; Frederick County lawmakers weigh in on company's ...
Frederick News Post (subscription) - 04-Feb-2011
ANNAPOLIS — The former Alcoa Eastalco Works plant will be dismantled, making way for the company to sell the 2,200-acre property near Adamstown.
Earl Robbins, director of state and local government affairs for Alcoa, on Friday provided Frederick County lawmakers with an update on plans for the site.
Eastalco closed the aluminum smelting plant in 2005, but hasn't redeveloped or sold the site. During a snowstorm last quarter, one of the key buildings on the site collapsed, Robbins said. The collapse spurred the company to make a final decision to close the plant for good.
Robbins told the delegation that the company is going to begin dismantling the plant, a process that will take about 18 months.
More information about the demolition and the company performing the work is expected to be announced next week.

Vietnam's first alumina facility starts production
VietNamNet Bridge - 04-Feb-2011
Vietnam's first bauxite mining and refinery complex Tan Rai is expected to start production in April, some months later than initial plan, according to the Vietnam National Coal and Mineral Industries Group (Vinacomin).
Capitalised almost $700 million, Tan Rai complex, located in the Central Highland's Lam Dong province, is expected to supply 600,000 tonnes of alumina per year and post 2015, the total output will rise to 1.2-1.8 million tonnes per year.
In the initial plan of Vinacomin, which started building the complex in July, 2008, Tan Rai was scheduled to come online at the end of 2010.
The operations of Tan Rai and Nhan Co bauxite mining and refinery complex, also developed by Vinacomin, is hoped to turm Vietnam into a competitive alumina exporter worldwide.
Construction of Nhan Co in the Central Highlands' Daknong province started in early 2010 and Vinacomin set the target to complete the first phase construction by 2012.
With the total investment capital of $655 million, Nhan Co will be able to supply 650,000 tonnes of alumina per year once the first phase completes. Vinacomin plans to double the complex’s alumina output in the second phase to be developed after 2016.
Vietnam is recognised having the third largest bauxite reserves in the world after Genuine and Australia, but most of the mineral are untapped and concentrated in the country’s northern mountainous and the Central Highlands.
Together with Tan Rai and Nhan Co, Vinacomin are still working on several bauxite mining and refinery in partnership with international mining giants like China’s Chalco, US’s Alcoa, Australia-UK’s BHP Billiton, Japan’s Itochu and Sumitomo, and Russia’s Rusal. These projects will be operating after 2014 with a combined output of 4.5-6 million tonnes of alumina per year.

'Port Loko endorses SLEMCO: ESHIA report
Sierra Express Media - 03-Feb-2011
The Sierra Leone Exploration and Mining Company, SLEMCO is bracing up to kick-start the mining of about three hundred and twenty one million ton Bauxite in Port Loko District for a period of thirty-five years. The increase from about one hundred and fifty million tons to over three hundred million tons in a one hundred kilometer area was discovered after a successful satellite technology survey that was carried out in Maforki, Marampa, Koya, Buya and Yoni Chiefdoms in the Port Loko District, and Magbema Chiefdom in the Kambia District. (Chairman of SLEMCO, Alieu Mohame Sesay addressing the meeting)

Hanwha is front runner for Maaden aluminum mill
SteelGuru - Thursday, 03 Feb 2011South Korea’s Hanwha Engineering & Construction has emerged as the favored company to be awarded the engineering, procurement and construction contract for the aluminum rolling mill project at Ras al-Zour in Saudi Arabia.
The joint venture partners behind the scheme, the Saudi Arabian Mining Company (Maaden) and the US’ Alcoa, has also shortlisted South Korea’s Samsung Engineering and Daelim, but Hanwa is believed to be the lowest bidder.
The rolling mill will have a capacity of 380,000 tonnes a year when completed, which will make it the largest mill constructed outside of China in the past 20 years. The plant will produce can stock that will be sold within Saudi Arabia and the rest of the GCC.
The Ras al-Zour complex will also include a 1.8 million tonnes per annum alumina refinery and a 740,000 tonne per annum aluminum smelter, with a 4 million tonne per annum bauxite mine being built at Al-Baitha.
Maaden holds a 74.9% stake in the aluminum complex, while Alcoa owns the remaining 25.1%.
(Sourced from Meed)

Gaspe clay may transform aluminum making
Globe and Mail - 01-Feb-2011
The thick clay deposits in Quebec’s Gaspé region are the staging ground for a tiny exploration company’s attempts to transform the production of a key ingredient used in making aluminum.
Exploration Orbite VSPA Inc. (ORT.A-X1.920.021.05%) says it’s making headway in its multiyear project to extract alumina from aluminous clay at Cap-Chat. Its patented process is cleaner and less costly than the 19th-century Bayer method still in use around the globe, the company says.
“Our methodology is based on modern technology, making it less expensive and leaving a very small environmental footprint,” says Orbite president and chief executive officer Richard Boudreault.
If successful, the company’s initiative will allow Quebec aluminum producers to reduce their reliance on foreign sources of bauxite, while taking advantage of rising world prices for aluminum.
The Cap-Chat deposit appears rich enough, in fact, to supply all of the alumina required by Quebec aluminum companies. Currently, they produce most of their alumina from bauxite imported at great expense from sources around the world, Mr. Boudreault said.
Orbite’s extraction process does not produce the same toxic mess as the Bayer technique, which means it would reduce the potential for environmental disasters such as last year’s bursting of a Hungarian reservoir containing “red mud” – the toxic sludge left after producing alumina from bauxite. Hungary declared a state of emergency after the devastating spill at an alumina plant in Kolontar killed nine people in October.
The solid waste created by Orbite’s process is chemically neutralized, Mr. Boudreault said. “We’ve designed the whole process so that there is the lowest possible environmental impact.”
The Grande-Vallée property in the Gaspé is one of the largest and most alumina-rich deposits in the world.
Orbite’s extraction process might not have made economic sense a few years ago, but does now given the rising price of alumina on world markets, said Mr. Boudreault.
Today’s price is about $400 (U.S.) per tonne, up from about $250 in 2005.
Quebec has some 10 aluminum manufacturing plants, including several operated by giants Rio Tinto Alcan and Alcoa Inc. Aluminum companies operating in Quebec spend about $3-billion a year to secure their alumina needs.
Mr. Boudreault and his team worked on developing their clay extraction process for about three years, then put it through a series of tests for another two years.
The company is now setting up ore-processing operations and hopes to be producing a specialized, high-grade alumina by the end of the year, and alumina for large-scale aluminum production by 2013, he said.

Orbite set to tap alumina riches
The Province - 01-Feb-2011
MONTREAL – It has been a source of persistent frustration for Quebec’s aluminum producers for decades.
While a vast deposit of aluminous clay sits on their doorstep under the Gaspé peninsula, a proven resource capable of yielding the raw alumina they need to make their metal, the companies are forced to import the material by ship instead from Brazil and Jamaica. No one has figured out how to mine the local stuff cheaply.
Until now.
Richard Boudreault has spent the last six years developing a technology to extract alumina from the rich clay located in the Grand Vallée, a stretch of the Gaspé northeast of Murdochville. The junior he leads, Montreal-based Orbite VSPA Inc., owns the mineral rights to 3,500 hectares of land in the area. He believes he can make alumina for much less than it costs traditional alumina-from-bauxite producers now, which is an estimated $287 per metric ton. If he’s right, he’ll save his customers millions a year in transport costs.
Institutional investors are betting the Cornell University physicist can deliver, backing Orbite with $12-million in capital last fall. The company’s shares have soared from 50¢ three months ago to nearly $2 now on the Toronto Venture Exchange. Its market value has ballooned to $233-million.
Things could get even more heated in the coming days. Orbite is set to announce on Wednesday its $7.4-million pilot plant at Cap Chat on the St. Lawrence River’s south shore will start producing alumina on a test basis – a key step towards commercialization.
If results are positive, a full-scale alumina factory will follow. And then more factories. Ten years out, Mr. Boudreault expects to be producing all of Quebec’s alumina needs and employing more than 2,000 people.
To understand the scope of what that means, consider this: Rio Tinto Alcan and the other companies running Quebec’s 10 aluminum smelters currently import about $2-billion to $3-billion of alumina per year. Orbite estimates sourcing it domestically would boost Quebec’s gross domestic product by up to 3%, twice the projected impact of shale gas development in the province.
“This is going to have a fairly big impact,” Mr. Boudreault said in an interview Tuesday. “It’s a bit of a revolution.”
It is also, for the moment at least, still largely a show-me story. The company has proven that its processes work on a laboratory scale with a small pilot project. Now it has to demonstrate that capability on a much larger commercial level, producing a consistent volume of product at a stable cost for a significant length of time.
The Cap Chat plant will crank out one metric ton per day of metallurgical alumina during its six-month test phase.
Potential customers are divided on the potential, Mr. Boudreault acknowledges. Some are ready to move forward and sign preliminary sourcing agreements with Orbite. Others are saying ‘prove it.’
Alcoa reported a 13% growth in demand for aluminum in 2010 and forecasts 12% growth this year, fuelled by Asia’s growing economies. That demand, combined with a move to spot pricing for alumina, is expected to boost alumina pricing.
Unlike alumina-making with bauxite, Orbite produces alumina with a method that starts by crushing the clay and then acid-leaching it. The company plans to split its output, making alumina for use in aluminum and also supplying a higher-premium, ultra-pure alumina used to manufacture specialized components like LED lighting systems.
“Five years ago we had no process. We had a deposit of six square kilometres and we had no money,” Mr. Boudreault said. “We’ve been able to get money, develop the process, do one pilot plant, do a second pilot plant, go to the next step. One step at a time.”

New aluminium plant to create 300 jobs
ABC Local - February 1, 2011
The Tomago Aluminium smelter near Newcastle has signed a long term supply deal with a Bahrain-based firm to build a new manufacturing plant, creating around 300 new jobs.
Last year, Tomago warned delays in getting a new power deal would jeopardise the 30 million dollar Midal Cables plant, which will be built alongside the smelter.
It is expected to be operating by the end of 2012 and will eventually produce 50,000 tonnes of aluminium rods and conductors a year.
Tomago CEO Brian Cooper says it is a great opportunity to add value to the region's aluminium industry.
"Very much so, obviously taking the heat from the metal from Tomago, making products in a sustainable way," he said.
"Generating high value products to support construction within Australia, and also providing materials we can export as well through Sydney and Newcastle ports.
"Hopefully they'll be able to start construction by the end of this year and would certainly be taking metal from us by the end of 2012.
"As they get into the construction phase they would be looking to recruit by the end of this year, targeting people who know what the manufacturing industry is all about and can support that in a safe and sustainable manner," he said.

Qatalum smelter ramps up above half capacity
Gulf Times - 01-Feb-2010
Qatalum smelter ramps up above half capacity
By Pratap John/Chief Business Reporter
Jan Arve Haugan: Measures have been taken to prevent such incidents as power outage and shut down occurring in the future, he said
After a major shut down due to power outage in August last year, Qatalum has ramped up its Mesaieed plant, attaining more than half of the smelter’s capacity by mid-January.
According to Qatalum, this is an ‘impressive feat meeting world-class standards of productivity’.
In a statement, Qatalum CEO Jan Arve Haugan said the company had ramped up some 352 cells, including potline 2, as of January 14. The ramp-up following the outage, began in mid-September.
On August 9, Qatalum’s primary aluminium production was shut down following a power outage that lasted nearly five hours. Qatalum said its employees and suppliers worked round the clock to restore the pots affected by the power failure.
At the same time, the Qatalum casthouse stepped up re-melting of cold metal sourced from external suppliers. Joint venture partner Hydro postponed planned maintenance and increased production at other plants, in order to ensure that bulk of the planned shipments to Qatalum’s customers were met.
“Once the root causes of the incident were identified and addressed, measures were taken to prevent such incidents occurring in future,” he said.
Haugan attributed much of the plant’s performance and achievements to the ‘solid support’ of Qatalum’s owners, Qatar Petroleum and Hydro.
Qatalum was formally inaugurated by HH the Emir on April 12 last year.
In July last year, Qatalum achieved another major milestone when it was awarded ISO 9001: 2008 certification by accredited ISO auditors, Det Norske Veritas (DNV) Business Assurance Middle East.
Highlighting safety aspects, Haugan said ‘exhaustive processes’ have been put in place at Qatalum since the beginning of the project in order to ensure that the highest safety standards are maintained. Compared to the International Aluminium Associations benchmark figures, Qatalum rates ‘exceptionally high’ among industry leaders in safety.
During the shutdown, however, the Qatalum team had to cope with a previously largely inexperienced high-risk situation. The operational staff handled the ‘unexpected challenges exceptionally well’, showing great caution and teamwork, overcoming the challenges with no significant injuries and setting high standards for the future.
A similarly ‘high standard’ was maintained with regard to environmental concerns. Qatalum has a waste management system in place, which includes recycling of paper, cartons, plastics, used oil and many other materials. There is also active management of food and clinical waste, and use of process wastewater for irrigation.
With regard to monitoring, ventilation stacks have been equipped to enable collection of emission samples. Ambient air quality monitoring stations were set up at three locations, wells were drilled and groundwater monitoring established at seven locations throughout the site.
In November last year, a new deputy CEO joined Qatalum. Khalid Mohammed Sultan Ahmed Laram had worked with Qatar Petroleum for more than 25 years and was deputy general manager at Al-Khaleej Gas before joining Qatalum.
Speaking of the year ahead, Haugan said, “I am proud and pleased of the fact that everyone concerned has risen to meet the challenges that have faced us, especially through 2010. I am confident that Qatalum will be a strong catalyst for the development of aluminium related industries in Qatar. We are all looking forward to a positive 2011, and regaining our position as a leader in the Gulf for operational excellence, high-quality aluminium products and environmental performance.”