AluNews - April 2013

Emal said to secure funds for Kizad plant expansion

The National - April 30th, 2013,

Emal, a joint venture between Mubadala, a strategic investment company owned by the Abu Dhabi Government, and Dubai Aluminium, raised US$3.4 billion in loans, according to Bloomberg. Of those loans, $2.93bn are conventional, while $475 million are Islamic products, a source told the newswire.
Construction of the new smelter is under way, and the $4.58bn expansion project will increase output at the Khalifa Industrial Zone Abu Dhabi (Kizad) to 1.3 million tonnes per year by 2015, from 800,000 per year.
The aluminium producer expects to raise a further $600m from export credit agencies, according to Bloomberg. The company received bids from a group of 22 foreign and local banks for loans of $4.3bn in January. It plans to raise $1bn of bonds in the second half of the year, according to Bloomberg, most likely with a 16-year tenor and an amortizing structure. Emal did not respond to requests for comment.
Industrial expansion is a central plank of Abu Dhabi's efforts of economic diversification, and Kizad is the epicentre of the emirate's industrial drive. The zone was officially inaugurated late last year, but Emal had already been operational at the site in Taweelah. The smelter serves as an anchor tenant, attracting downstream industries that feed off its output.
Emal will be joined in Kizad by Emirates Steel, after the state-owned steel maker opted to build its next expansion project there. Aluminium and steel production is energy intensive, and Abu Dhabi is racing to expand its supply of natural gas to cater to industrial expansion. While Abu Dhabi National Oil Company (Adnoc) is working to increase domestic gas production, Mubadala and Abu Dhabi's International Petroleum Investment Company (Ipic) are adding to import capacity.
A shortage of gas is threatening to slow the pace of industrial development. The Emirates Steel expansion, which will increase output by 1.6 million tonnes of per year, will not commence until the gas has been allocated. Once the new mill has been constructed, it will help to attract downstream industries, and contribute to the critical mass Kizad needs to become an industrial and logistics hub. In November, Mubadala signed a bauxite supply agreement with Guinea. Bauxite is an essential ingredient in aluminium production.

Aluminium capacity growth hinges on Odisha resources

Business Standard - April 29th, 2013,

Soon after the closure of its bauxite-starved one-million tonne (mt) alumina refinery at Lanjigarh, an official of Vedanta Aluminium was asked whether the company would consider moving the plant out of Odisha in case the raw material deadlock was not broken. Not an outrageous question by any means.
Denied mine development at the 90 mt bauxite deposit in the Niyamgiri hills because of cancellation of stage-two environment clearance in August 2010 by the central ministry of environment and forests and incessant protests by the local Dongria Kondh tribals, the company, for whatever reasons, was not bailed out by state-owned Odisha Mining Corporation organising supply from its own sources.
This is despite an earlier understanding. Vedanta ran the refinery as long as it could, braving severe logistical challenges in getting bauxite from wherever possible, at high cost. Refinery operations were finally suspended on December 5, 2012.
So, the agony of Vedanta refinery, which is to be expanded to five mt, subject to sorting out regulatory issues, is not going to end too soon unless, of course, the state starts feeding the plant with bauxite from its own sources. Is it not time, the state started considering giving Vedanta access to small deposits in non-forest areas and also mines that have remained closed?
London Stock Exchange-listed Vedanta Resources of which Vedanta Aluminium is an associate, says it is largely because of the Lanjigarh refinery setback that the group's alumina production during 2012-13 was down 43 per cent to 527,000 tonnes. In the absence of supply from Lanjigarh refinery, Vedanta perforce has to get the intermediate raw material alumina from multiple sources to keep the 500,000-tonne smelter at Jharsuguda running.
But there is a big extra cost involved in sourcing alumina from different parts of the country. The reason why India is seen as a highly cost-effective aluminium production centre is because it facilitates fully integrated operations from bauxite mining to alumina refining to metal smelting backed by low-cost coal fired power. All aluminium cost calculations for Vedanta have, however, gone haywire because of the Lanjigarh refinery impasse.
The long staying ordeal notwithstanding, Vedanta Aluminium Managing Director Sushil Roongta remains firm in his belief that India, sitting on bauxite resources of 3.5 billion tonnes (bt) and non-coking coal resources of 293 bt, has all the potential to become the world's second largest aluminium producer after China.
In 2012, of the world primary aluminium production of 47.388 mt, China alone had a share of 21.671 mt. India's production last year in comparison was 1.714 mt. Russia, with production of 4.026 mt, Canada with 2.781 mt, the US with 2.07 mt and UAE with 1.814 mt are ahead of us in producing nations' table.
No doubt, India could have made much faster progress in growing aluminium capacity had it not been for enormous delays in getting allocations of bauxite and coal deposits and securing environmental and forest clearances. Unarguably, the project which suffered maximum delays is Utkal Alumina's 1.5-mt alumina refinery in Odisha's Rayagad district. The original promoters Norsk Hydro and Alcan (now part of Rio Tinto) quit the project citing frustratingly long delays. The project is now almost ready for commissioning, thanks to Hindalco playing the rescue act.
For identical reasons, Dubai Aluminium sold its 24.5 per cent ownership of Raykal Aluminium to Vedanta. Raykal Aluminium of which the principal promoter is Larsen & Toubro got prospecting rights over nearly 280 mt of bauxite deposits at Sijmali and Kurumali in Rayagad and Kalahandi districts of Odisha as long back as in 1993. With Vedanta coming on board, chances of renewal of prospecting rights and their finally becoming licences have considerably improved.
The Indian process is so slow that even if the mines at Sijmali and Kurumali finally become operational, it will not be before some years. "We have got to keep faith with Odisha to grow our aluminium industry. The state alone has bauxite resources of 1.81 bt and coal resources of 71.45 bt," says Roongta. While Vedanta will finally have 1.75 mt of aluminium smelting capacity in Odisha, NALCO should have a capacity of 1.067 mt in the state. In the coming years, Hindalco will have total capacity to smelt 1.7 mt of aluminium with Odisha figuring prominently in that.

ALPART to Resume Operations Early 2016

Live Mint - April 26th, 2013,

Minister of Science, Technology, Energy and Mining, Hon. Phillip Paulwell, has announced that the bauxite and alumina company, Alpart, in Nain, St. Elizabeth, should resume operations in the first quarter of 2016, following completion of the refinery’s new energy infrastructure.
The re-opening will come some seven years after production ceased at the plant, due to a decline in the global bauxite industry.
Mr. Paulwell noted, however, that the owner of the plant, UC Rusal, has indicated that while it is forging ahead with the implementation of its energy solutions, if there is overall market improvement, it would “immediately move to open the plant”.
The Minister was making his contribution to the 2013/14 Budget Debate in the House of Representatives on April 24.
UC Rusal has presented a plan for an energy solution, which involves a shift from coal to gas, as their main energy source.
Meanwhile, he informed that the Government has now reached an agreement with UC Rusal on the purchase price for the sale of its seven per cent interest share in WINDALCo. The price has been approved by Cabinet.
"The bauxite alumina sector is very important to us as a nation, not only for the revenue that it can bring, but also in light of the fact that so many Jamaican communities and workers depend on the industry for their survival,” the Minister told the House.

Nalco aims Rs 25,000 crore turnover by 2020

Live Mint - April 26th, 2013,

Nalco has set a target for production of aluminium and alumina at 1.7 million tonnes (MT) and four MT, respectively by 2020.
One of the objectives of the company is also to transform itself from being only an “aluminium producer” to a metal producer and energy provider.
It also plans to venture into two new fields of activity beyond aluminium by 2016 and enter into joint venture pacts with domestic and foreign clients to develop long-term relations.
The company aims to invest Rs1,053 crore during the current fiscal.

Saeed Al Tayer inaugurates Aluminium Middle East 2013

AME Info - April 24th, 2013,

His Excellency Saeed Mohammed Ahmad Al Tayer, CEO and Managing Director of Dubai Electricity and Water Authority, and Vice Chairman of Dubal, on Tuesday, April 23, 2013, inaugurated Aluminium Middle East 2013, the leading exhibition for aluminium products, technologies and investments in the Middle East, being held at the Dubai International Convention and Exhibition Centre (DICEC).
Event organiser Reed Exhibitions has revealed that 162 exhibitors from at least 25 countries are taking part in this edition of the exhibition, which is also expected to gather more than 3,500 trade visitors from over 70 countries. Aluminium Middle East 2013 runs until April 25 at Sheikh Saeed Halls 2 and 3 of DICEC.
The 2013 edition underlines the Middle East and North African region's rapidly growing role in the global aluminium industry, highlighting investment plans in new smelters and expansion of existing capacities by the regional market players from the Gulf Co-operation Council (GCC) countries. With the strong expansion drive in the region, the GCC is expected to account for 13% of the world's total aluminium production by the end of 2013. Moreover, GCC countries are expected to collectively boost aluminium production capacity by up to 40% to reach 5 million metric tons by 2014, from around 3.7 million tons in 2012.
Saeed Fadhel Al Mazrooei, President and CEO of EMAL, said, "While the industrial flagship expands into one of the largest single-site aluminium smelters, EMAL continues to set the benchmark for the global aluminium industry, reinforcing the region's position as a major hub for aluminium production in the world. We are proud to be the Diamond Sponsors of Aluminium Middle East for the third successive year. This is truly a demonstration of EMAL's commitment to our industry and to the region. We look forward to participating in the event along with our peers from the aluminium industry."
Mohammed Bader-Eddin, Show Director of Aluminium Middle East 2013, said, "This edition of Aluminium Middle East has been highly anticipated, especially since the GCC region's aluminium sector has come under the global spotlight given its growing international stature. GCC countries are currently striving to consolidate their position in the region and the world by focusing on boosting their annual production and adding new capacity, while also adopting the latest technologies and the highest standards in sustainability and environmental conservation.
Aluminium Middle East 2013 will serve as an excellent platform for key regional and international industry players to discuss emerging challenges and opportunities in the sector. Moreover, the Business Matching segment of the event will facilitate participating companies to explore and build long term business relationships with the right partners."

Bauxite mine flagged for north Qld

World News Australia - April 23rd, 2013,

A far north Queensland indigenous mayor says a bauxite mine planned for the region will boost the economy and create much-needed jobs for locals. The development of a bauxite mine on Queensland's Cape York will help allay welfare dependency in the region, a local mayor says.
Deputy Premier Jeff Seeney on Tuesday announced a shortlist of five firms given the go-ahead to produce detailed proposals to develop a mine in Aurukun.
The list includes four multi-national firms, as well as the Australian Indigenous Resources group, which is a joint-venture between traditional owners and Aust-Pac Capital.
Aurukun Mayor Dereck Walpo says the mine, which will be the first major development in the area, will transform the community.
"We're going to have a better economy, autonomy, better developments, better education, better health," he told AAP.
"All in all we won't be depending on welfare anymore."
He says the community will work with whichever firm develops the mine.
Mr Seeney says it would be a boost for local residents if an indigenous group had a stake in the mine.
"We have an opportunity to provide them with an ownership and I think that will be critically important to the long-term development of the cape," he said.
If Australian Indigenous Resources was successful in its bid the joint-venture would likely work alongside a multi-national firm, Mr Seeney said.
A decision about the mine lease will be made in the next six months.

2013 Alumina and Electrolytic Aluminum Industry Global and China

Environmental Expert - April 22nd, 2013,

China’s bauxite features poor quality and low self-sufficiency rate of high-quality bauxite. With the gradual release of new alumina capacity and expansion of downstream smelting capacity in China, China has rapidly increased the import of bauxite. China’s imports of bauxite mainly come from Indonesia, Australia and India, among which, Indonesia accounts for more than 70%.
As the electricity cost in western region is lower than that in the eastern region of China, the electrolytic aluminum capacity of the western region has continued to expand, but in the meantime, the high energy-consuming and high-cost electrolytic aluminum capacity of the eastern region hasn’t been reduced in large scale, leading to serious overcapacity in China’s electrolytic aluminum industry in 2012.
Global and China Alumina and Electrolytic Aluminum Industry, 2012-2013 mainly analyzes the supply & demand and industry development trend of alumina and electrolytic aluminum in China and worldwide, and sheds light on the business performance and development planning of key enterprises in the global and Chinese aluminum industry.
As a giant in the global aluminum industry, RUSAL mainly produces primary aluminum, aluminum alloy, bauxite and alumina. RUSAL is a typical producer of upstream aluminum products with a relatively complete industry chain, and its own bauxite resources can meet 70% of its demand.
Meanwhile, RUSAL continues to integrate upstream hydropower and thermal power resources. In 2012, RUSAL reduced the output of primary aluminum to 1.038 million tons, it also plans to eliminate 300 kilotons of primary aluminum capacity before 2013, and increase the output proportion of processed aluminum products to 39%.

REFILE-Bosnia's loss-making Aluminij dips into reserves

Reuters - April 19th, 2013,

SARAJEVO - Loss-making Bosnian aluminium smelter Aluminij Mostar will dip into capital reserves and may cut more jobs, in an attempt to stay afloat while it tries to access international funding.
The general manager of Aluminij, Bosnia's biggest exporter and a major employer, on Friday said he was hopeful that a long-standing ownership row with the government of Bosnia's Muslim-Croat federation could be resolved in the next few days.
That would clear the way for Aluminij to seek finance from organisations such as the European Bank for Reconstruction and Development and the International Finance Corporation, part of the World Bank.
Aluminij, which sells aluminium mainly to the depressed European construction and auto industries, warned last month that it may face closure if it posted a similar or bigger loss this year to the 65.8 million Bosnian marka ($33.6 million) loss of 2012.
Customers include trading and mining powerhouse Glencore International.
General manager Ivo Bradvica said on Friday that the smelter, located in the southern town of Mostar, would cut core capital to around 110 million marka. He declined to give the current level of core capital.
He said the management would also see if there was any scope to cut more jobs from its 817-strong workforce which had already been reduced by 8 percent over the past 18 months.
Pending a deal, the government has also pledged to help Aluminij get privileged status with its main power supplier, the majority state-run utility EPZHB, and to reschedule a 30 million marka debt owed to the utility, he said.
Aluminij has repeatedly asked for state subsidies, saying the price of energy accounts for more than 60 percent of the cost to produce a tonne of metal.
He also said that an upgraded foundry and casting line will go online this month. "If the conditions allow, it will boost output by 30,000 tonnes to a total of 190,000 tonnes a year," said Bradvica.

China's transformation of the aluminium industry

9 News - April 18th, 2013,

Deep in north-western China lies a region where there is 1.16 trillion tonnes of very cheap thermal coal. China is planning to use this coal to power and develop a significant aluminium production capacity. Commonwealth Bank analysts have been there and seen the plans. The Chinese are drawing on additional high quality bauxite reserves in Shanxi province. The new domestic alumina capacity threatens local marginal cost producers in Shandong as well as pressuring seaborne alumina pricing.
China's plans in Xinjiang province are likely to transform the global aluminium and alumina industries, the analysts maintain. The province's aluminium capacity is expected to grow from 1.5 million tonnes per annum at the end of 2012 to 8-12mtpa by 2020 and could be up to 30mtpa should demand warrant. These are big quantities but other smelters globally are not expected to give up and let Xinjiang take over. The analysts note that, despite losses, these smelters are benefiting from tax concessions, power subsidies and other support and stay waiting for better times.
The analysts found out that Shanxi province has one billion tonnes of bauxite reserves which is underpinning the strong growth in alumina capacity. This is supported by new technology, better quality bauxite and lower energy costs. This translates to 333-400m tonnes of alumina or 167-200m tonnes of aluminium. Additional alumina capacity of 3.7m tonnes was installed in Shanxi in 2012 with another 6.6mt committed to over the next two years. The analysts suspect the alumina supply growth in Shanxi will displace around 75% of the high-cost supply from Shandong. Shandong is the world's marginal alumina producer and sets the price, relying largely on imported bauxite from Indonesia. Hence, the analysts see that role diminishing in favour the new capacity in Shanxi. Directives to reduce bauxite import dependence should see more aluminium units coming from Indonesia as alumina and not bauxite.
China's alumina refiners, especially Shandong, are price sensitive and the analysts maintain they will ration output when product and input prices move against them. Since August 2011 international prices were more attractive than the domestic alumina price and China imported the product, despite having sufficient domestic capacity. Recently, in February 2013, Australian alumina prices were US$18.76 per tonne more attractive than domestic Chinese prices but, accounting for seaborne freight and port handling, this advantage is negated.
The ramifications of such large, new low cost smelting capacity on medium term alumina and aluminium prices is material.

Vedanta’s Anil Agarwal to restart mothballed Orissa plant

Live Mint - April 18th, 2013,

Mumbai - Vedanta Resources Plc, controlled by billionaire Anil Agarwal, may soon restart a mothballed alumina refinery after a change in mining rules helps resume supply of raw materials to the plant.
Vedanta Aluminium Ltd had to shut its factory in December at Lanjigarh in Orissa after permits held by bauxite miners in Jharkhand and Chhattisgarh expired. The environment ministry said on 13 March that they don’t need fresh approvals to renew those licences, clarifying an earlier court order and paving the way for replenishments of the ore.
“The move has provided an opportunity to us,” Sushil Kumar Roongta, managing director of Vedanta Aluminium, said in an interview. “We’re working to see how soon we can get raw material commitment needed to restart the factory.”
Vedanta Resources needs to fire up its alumina refinery to help boost cash flow and cap interest expenses that have quadrupled in the last two years after it was forced to idle its copper smelter and iron ore mines by India’s environmental rules. Standard and Poor’s placed the nation’s most indebted metals producer’s credit rating on watch with negative implications on 3 April, saying the company’s ability to refinance will be ‘‘tested” in the coming quarters.
‘‘Any move to reopen the alumina refinery will be a big positive for the company as it would help save as much as $120- 150 a ton on expensive alumina imports,” said Giriraj Daga, an analyst with Nirmal Bang Equities Pvt. Ltd in Mumbai. ‘‘The key to starting the factory will be bauxite supplies.”

China’s new smelters set to swamp effort to dam aluminium flood

SCMP - April 16th, 2013,

Aluminium smelters are set to open in China at a faster pace than producers there and worldwide shut loss-making plants to tackle a glut that keeps the metal’s prices weak.
So far this year, analysts estimate cutbacks in aluminium production have totalled as much as 700,000 tonnes in China, the world’s biggest consumer and producer, after prices shed more than 10 per cent since January.
That alone could bring an over-supplied market into balance – the global market surplus is forecast at 687,455 tonnes this year and 747,000 tonnes in 2014, according to analysts polled by Reuters.
Action has also been taken by Russia’s United Company RUSAL, the world’s largest aluminium producer, which said last month it would cut output this year by 300,000 tonnes after posting a net loss.
But China is on course to add around 4 million tonnes of new capacity this year, much of it with lower cash costs by using cheap energy sources, according to Janet Kong, managing director of research at China International Capital in Hong Kong.
Analysts say there could be years more of market surpluses, although the industry is clearly under strain.
In late March, for example, China’s top aluminium producer Chalco posted a worse than expected net annual loss of 8.2 billion yuan (HK$10.19 billion), hit by low aluminium prices and rising costs.
“The pain is definitely there,” said Metals Strategist Michael Widmer at Bank of America/Merrill Lynch in London.
“You’re looking at companies like Chalco booking huge losses in the last quarter and the full year, so ultimately, something has to give. The industry is not in good shape.”
Benchmark three-month aluminium on the London Metal Exchange has given up about a third of its value since touching a high of US$2,803 (HK$21,757) a tonne in May 2011 and is the weakest performing base metal on the exchange over the past four years.
Cutbacks in China are estimated at 500,000 tonnes of annual capacity, mostly among small and mid-sized smelters in Henan and South China, according Kong at China International Capital Corp.
Paul Adkins of Beijing-based aluminium consultancy AZ-China pegs the Chinese cutbacks higher, at 700,000 tonnes.
“Going forward we do expect more cutbacks ... and delays in new capacity construction if prices remain low. That said, we don’t expect the market to tighten as there is no lack of (new) capacities,” Kong said.
China may cut an additional 500,000 tonnes this year, but this would be cancelled out by the 4 million tonnes of new capacity, she added.
This will allow large Chinese producers to keep some older loss-making smelters in business because their new operations lower their average costs nationwide, she added.
Other loss-making smelters will continue to operate due to worries about unemployment and high shutdown costs.
“The net reality is that China’s productive aluminium capacity continues to increase quite substantially, well beyond the rise in demand that the market requires,” said analyst Duncan Hobbs at Macquarie in London.
Global producers are trying to work with Chinese firms on output cuts and some major ones held a meeting with large Chinese smelters in China two weeks ago, but failed to reach any agreement, a source with direct knowledge of the meeting said.
In the longer run, China’s environmental protection efforts may help reduce capacity.
China plans to publish a list of aluminium smelters that meet its environmental standards, with firms selected receiving help in cutting costs, while those left off could be forced to curb output as they become less competitive, according to sources with direct knowledge of a separate closed-door meeting.
Some high-cost capacity may also be vulnerable in Europe, but operations in the United States are likely to benefit from lower energy costs due to the boom in shale gas production there, said analyst David Wilson at Citigroup in London.
“I suspect going forward that the US smelters will not be facing the same kind of pressure that smelters in Europe are facing.”
Last year, US producer Alcoa announced plans to reduce operations at two Spanish smelters and one in Italy by a total of 240,000 tonnes.
Also propping up smelters globally are high premiums that consumers are forced to pay for metal for immediate delivery, above the LME cash price.
Even though LME aluminium stocks are hovering at record highs above 5 million tonnes, most of it is not accessible, tied up in financing deals or stuck in depot queues, sending premiums soaring in recent years.
In Europe, premiums for duty-paid aluminium surged to record highs of around US$300 a tonne last year, although they have dipped this year to around US$280-US$295.
Wilson estimates that about three-quarters of European Union smelters are loss-making based on the LME price alone, but after adding in premiums, only a quarter are in the red.
“As long as you’ve got the financing deals and the high physical premiums in place, the smelters and the companies can at least survive, barely, but they can survive,” said Widmer.

China’s new smelters set to swamp effort to dam aluminium flood

The Gleaner - April 16th, 2013,

The Jamaica Government is to outline a solution that it hopes will facilitate the reopening of the Russian-owned Alpart and Kirkvine bauxite plants.
Science, Technology, Energy and Mining Minister Phillip Paulwell will outline the solution when he makes his contribution to the 2013/14 Sectoral Debate.
The Government has been engaged in months of intense negotiations with the Russian-based aluminium company, UC Rusal, for the resumption of operations at the facilities, which closed in 2009.
Paulwell said the high cost of energy is a major issue affecting the reopening of the plants.
While UC Rusal is investing US$100 million in a coal-fired electricity generating system for Ewarton, Paulwell said "they are maintaining that gas is the energy solution for both Alpart and Kirkvine, and I am to report on that fully in the Sectoral Debate".
He said the plants are being maintained, and are ready for operation.
"In fact, I did a tour recently, just to satisfy my mind that the possibility exists for them to be re-opened within a short time frame."
A downturn in the global aluminium market forced UC Rusal to cease its operations at Kirkvine, Ewarton and Alpart in 2009. The Ewarton refinery, located in St Catherine, was reopened in July 2010 and the Government, in 2012, was able to secure a deal with UC Rusal to maintain operations at the refinery and save the 600 local jobs at the facility.

Rio Tinto Q1 Output Up And Production Guidance Intact

Trefis - April 15th, 2013,

Rio Tinto (NYSE:RIO) has released its operations review report for Q1 2013. The company said that it has achieved significant milestones at its two major growth projects at Pilbara in Australia and Oyu Tolgoi in Mongolia. According to CEO Sam Walsh, the firm remains on track for first production this year and will deliver attractive returns to shareholders in the years ahead. The copper operations have been hit due to a landslide at the Bingham Canyon mine in Utah which has resulted in the suspension of production.
Year-over-year, Rio’s iron ore production was up and so was the production of aluminum mined and refined copper. However, the production of hard coking coal and alumina declined. The production of alumina was affected by production issues at the Gove refinery whereas production of hard coking coal was impacted by operational issues and wet weather at the Hail Creek mine.
The company releases financial numbers on a semi-annual basis rather than a quarterly basis. Hence, there is no data available on price realizations for iron, aluminum and copper – the three most watched commodities in the market. Market prices of each of these have been declining for quite some time.
Rio achieved a record first quarter iron ore shipments of 57.3 million tonnes, a 7% year-over-year increase. This was achieved on operational streamlining, productivity improvement and a rapid recovery from seasonal weather disruptions. The Pilbara iron operations are running at full capacity of 237 million tonnes a year and are on track to achieve a capacity of 290 million tonnes in the third quarter. You can check the effect of iron ore shipments on Rio’s Trefis valuation using our interactive graph below.
At 150,000 tonnes, mined copper production was 26% higher year-over-year. However, Rio has had to revise its production guidance for copper for the rest of the year due to a landslide at its giant Bingham Canyon mine in Utah that accounts for 17% of the United States’ total copper output. Rio’s share of mined and refined copper production in 2013 is now expected to be approximately 540,000 tonnes and 205,000 tonnes, respectively. This assumes a production decline for mined copper at 125,000 tonnes and refined copper of about 100,000 tonnes.
While thermal coal production showed 28% year-over-year growth, coking coal production declined by 3% due to the impact of lower than expected overburden removal in 2012 as well as wet weather. Bauxite production was 10% higher than Q1 2012 driven by higher volumes at Weipa, in line with increased bauxite requirements from the expanded Yarwun refinery and increased third party demand. Aluminum production was 14% higher than the corresponding quarter in 2012, reflecting the resolution of the lockout at Alma and the power outage at Shawinigan. The ramp-up of smelting capacity at Alma continued and the smelter operated at close to full capacity throughout the quarter.

UPDATE 1-China's new smelters set to swamp effort to dam aluminium flood

msn money - April 15th, 2013,

LONDON - Aluminium smelters are set to open in China at a faster pace than producers there and worldwide shut loss-making plants to tackle a glut that keeps the metal's prices weak.
So far this year, analysts estimate cutbacks in aluminium production have totalled as much as 700,000 tonnes in China, the world's biggest consumer and producer, after prices shed more than 10 percent since January.
That alone could bring an over-supplied market into balance - the global market surplus is forecast at 687,455 tonnes this year and 747,000 tonnes in 2014, according to analysts polled by Reuters.
Action has also been taken by Russia's United Company RUSAL Plc, the world's largest aluminium producer, which said last month it would cut output this year by 300,000 tonnes after posting a net loss.
But China is on course to add around 4 million tonnes of new capacity this year, much of it with lower cash costs by using cheap energy sources, according to Janet Kong, managing director of research at China International Capital Corp. in Hong Kong.
Analysts say there could be years more of market surpluses, although the industry is clearly under strain.
In late March, for example, China's top aluminium producer Chalco posted a worse than expected net annual loss of 8.2 billion yuan ($1.3 billion), hit by low aluminium prices and rising costs.
"The pain is definitely there," said Metals Strategist Michael Widmer at Bank of America/Merrill Lynch in London.
"You're looking at companies like Chalco booking huge losses in the last quarter and the full year, so ultimately, something has to give. The industry is not in good shape."
Benchmark three-month aluminium on the London Metal Exchange has given up about a third of its value since touching a high of $2,803 a tonne in May 2011 and is the weakest performing base metal on the exchange over the past four years.
CHINA BUILDS SMELTERS
Cutbacks in China are estimated at 500,000 tonnes of annual capacity, mostly among small and mid-sized smelters in Henan and South China, according Kong at China International Capital Corp.
Paul Adkins of Beijing-based aluminium consultancy AZ-China pegs the Chinese cutbacks higher, at 700,000 tonnes.
"Going forward we do expect more cutbacks ... and delays in new capacity construction if prices remain low. That said, we don't expect the market to tighten as there is no lack of (new) capacities," Kong said.
China may cut an additional 500,000 tonnes this year, but this would be cancelled out by the 4 million tonnes of new capacity, she added.
This will allow large Chinese producers to keep some older loss-making smelters in business because their new operations lower their average costs nationwide, she added.
Other loss-making smelters will continue to operate due to worries about unemployment and high shutdown costs.
"The net reality is that China's productive aluminium capacity continues to increase quite substantially, well beyond the rise in demand that the market requires," said analyst Duncan Hobbs at Macquarie in London.
Global producers are trying to work with Chinese firms on output cuts and some major ones held a meeting with large Chinese smelters in China two weeks ago, but failed to reach any agreement, a source with direct knowledge of the meeting said.
In the longer run, China's environmental protection efforts may help reduce capacity.
China plans to publish a list of aluminium smelters that meet its environmental standards, with firms selected receiving help in cutting costs, while those left off could be forced to curb output as they become less competitive, according to sources with direct knowledge of a separate closed-door meeting.

China to publish list of aluminium smelters that meet green standards

Reuters - April 12th, 2013,

HONG KONG - China plans to publish a list of aluminium smelters that meet its environmental standards, with firms selected receiving help in cutting costs, while those left off could be forced to curb output as they become less competitive.
Lower production in the world's top producer and consumer of aluminium would help support international prices, which have fallen more than 8 percent so far this year.
The Ministry of Industry and Information Technology is preparing the move in the wake of a similar list for steel mills published last week, with the country's new leaders under pressure to tackle a festering pollution crisis that has become a source of increasing public fury.
The plan was disclosed earlier this week in a closed-door meeting of large aluminium smelters and government officials, sources with direct knowledge of the matter said on Friday.
"The ministry has not done (the list for aluminium smelters yet). It should be within this year," said an industry source who attended the meeting in Beijing but declined to be named due to the sensitivity of the issue.
He added that smelters that make it onto the list would receive government support through steps such as lower power fees and loans.
"Smelters that fall outside the aluminium list would be treated differently, such as getting less credit from local banks," said a source at a large smelter.
Companies not on the list would become less competitive and may be forced to cut production or close if domestic aluminium prices stay low, he added.
Like steel mills, the aluminium list is expected to include smelters that are medium- or large-sized and meet environmental and energy-saving standards, the sources said.
The ministry on April 2 published the names of 45 steel plants in the first part of a list for that sector.

Signature campaign seeks restarting of Vedanta refinery

India TV News - April 12th, 2013,

Bhubaneswar - A large number of people who have been affected by the Dec 5, 2012 closure of the Vedanta alumina refinery in Odisha have launched a signature campaign seeking its reopening, a leader of the move said Friday.
The plant was shut down as there was a shortage of the raw material, bauxite, in the area.
Joining the signature campaign, many local villagers and people who worked at the plant said they would submit memoranda, along with over ten thousand signatures, to different local authorities in Kalahandi district, where the plant is located.
"We handed over a memorandum to District Collector Gobinda Chandra Sathy," Sridhara Pesnia, president of the Lanjigarh Anchalika Vikash Parishad, an organisation campaigning to save the plant, told IANS.
A separate delegation including hundreds of villagers submitted a similar memorandum to the collector of neighbouring Rayagada district, Sashi Bhusan Padhi, he said.
"We will also meet Chief Minister Naveen Patnaik in Bhubaneswar and submit a memorandum with more than ten thousand signatures. We will request him to take steps to resume the alumina refinery," he said.
Vedanta had to close its one-million-tonne-capacity alumina refinery at Lanjigarh in Kalahandi district, about 600 km from here, Dec 5, 2012, due to shortage of bauxite.
Pesnia said the plant had offered employment and means of livelihood to more than 15,000 people in Kalahandi and Rayagada districts.

Sterlite Industries (India) Limited Production Release for the Fourth Quarter and Year Ended 31 March 2013

Business Wire - April 10th, 2013,

Aluminium production at 245 ktpa Korba-II smelter was 62,000 tonnes, in line with the corresponding prior quarter. The smelter operated above its rated capacity for the full year.
At the 325ktpa Korba-III aluminium smelter, mechanical and electrical completion and pre-commissioning of the rectifier, potline and related utilities for the first phase of 84 pots out of the total 336 pots have been completed. Further work is in progress, and we plan to tap first metal in Q2 FY2014. The smelter plans to initially draw power from the existing 810MW power plants at BALCO. The first 300MW unit of the BALCO 1,200MW captive power plant is awaiting final stage regulatory approvals.
Having obtained the Stage-II Forest Clearance for the 211mt coal block at BALCO, the process for diversion of forest land has been initiated by the State Government, and we are in the process of signing the mining lease agreement. We expect to commence mining in Q2 FY2014.

L&T's Odisha alumina refinery project in limbo

Business Standard - April 9th, 2013,

Engineering & construction giant L&T on Tuesday said its integrated alumina refinery and smelter project in the state is under suspension.
L&T through a joint venture partnership with Dubai Aluminium Ltd (Dubal) in 2005 had proposed to invest Rs 30,000 crore on a three million tonne per annum (mtpa) alumina refinery, 1.5 mtpa smelter project and a captive power plant (CPP) at an investment of Rs 30,000 crore.
The refinery project was to be established in Rayagada district on about 4,000 acres of land. The smelter complex with capacity of 1.5 mtpa was to come up near Sambalpur.
“Our integrated alumina refinery and smelter project proposed in Odisha is suspended and stopped. I had come to meet him (Odisha chief minister Naveen Patnaik) for this project,” L&T chairman A M Naik said.
Asked on the problems faced by the project, he said “There are no problems. They (the state government) are processing it. The chief minister has assured me that he will look into it seriously.”
Naik evaded direct reply to whether L&T would supply bauxite to Vedanta from two mines- Kutrumali and Sijimali where it has prospecting license and was awaiting grant of mining lease (ML) from the state government. “It is an integrated project where we are also investing by way of CPP at the project site,” he said.
On the possibility of grant of ML by Odisha government, he said, “I think the state government will look into it very objectively.”
L&T had won PL for Sijimali and Kutrumali bauxite mines in south Odisha's Rayagada and Kalahandi districts with total deposit of close to 300 million tonnes, in 1992. But two years later after the expiry of PL, the state government denied ML to L&T since it had no end-use plant.
The state government is now considering possibility of granting ML to L&T these mines. ML for L&T was to come to Vedanta Aluminium Ltd (VAL’s) rescue since it had picked up Dubal’s 24 per cent stake in L&T promoted Raykal Aluminium which was formed to implement the engineering major’s refinery project.
The state steel & mines department had sought the views of its Advocate General on the matter. On the contrary, VAL which was running its one mtpa alumina refinery at Lanjigarh entirely on externally sourced bauxite was forced to go for temporary shutdown of the refinery on December 5 last year on bauxite unavailability. Since then, the company has been struggling to obtain the raw material from alternative sources. To operate at full capacity, VAL needed 300,000 tonnes of bauxite every month.

Top 10 Largest Aluminium Smelters In The World

Gulf Business - April 8th, 2013,

The GCC is expected to account for 13 per cent of the world’s total aluminium production by the end of 2013, with total output estimated to reach five million tonnes per year by 2014.
Aluminium Bahrain (Alba), Dubai Aluminium (Dubal), Emirates Aluminium (Emal), Qatar Aluminium (Qatalum) and Sohar in Oman collectively produced 3.73 million tonnes of primary aluminium in 2012, up seven per cent from 3.48 million tonnes in 2011, according to the Gulf Aluminium Council (GAC).
The region is ramping up production even as global demand for aluminium is anticipated to reach 70 million tonnes per year by 2020.
Abu Dhabi’s Emal plans to increase production capacity to 1.3 million tonnes by 2014 and the Ma’aden Aluminium Complex in Saudi Arabia’s Ras Al Khair, a $10.8 billion joint venture with Alcoa, will have a total output of 740,000 tonnes per year when complete.
Here are the top 10 operational primary aluminium smelters in the world by capacity, as of December 2012.
1. NAME: HUOMEI HONGJUN ALUMINIUM SMELTER
Country: China
City: Hongjun
Capacity in tonnes per year (tpy): 1,060,000
2. NAME: DUBAI ALUMINIUM CO (DUBAL)
Country: UAE
City: Jebel Ali, Dubai
Capacity (tpy): 1,040,000
3. NAME: KRASNOYARSK ALUMINIUM WORKS (BRAZ)
Country: Russia
City: Krasnoyarsk
Capacity (tpy): 1,008,000
4. NAME: BRATSK ALUMINIUM WORKS (BRAZ)
Country: Russia
City: Bratsk
Capacity (tpy): 1,006,000
5. NAME: ALUMINIUM BAHRAIN (ALBA)
Country: Bahrain
City: Askar
Capacity (tpy): 890,000
6. NAME: XINJIANG EASTHOPE COAL POWER & ALUMINIUM
Country: China
City: Xinjiang
Capacity (tpy): 860,000
7. NAME: EMIRATES ALUMINIUM (EMAL)
Country: UAE
City: Taweelah
Capacity (tpy): 800,000
8. NAME: DONGFANG XIWANG ALUMINIUM SMELTER INNERMONGOLIA
Country: China
City: Dongfang Xiwang
Capacity (tpy): 780,000
9. NAME: XINFA GROUP
Country: China
City: Wujiaqu
Capacity (tpy): 740,000
10. NAME: HILLSIDE ALUMINIUM
Country: South Africa
City: Richards Bay, Hillside
Capacity (tpy): 720,000

Bauxite Resources Limited (ASX:BAU) Fortuna Prospect Exploration Drilling Results

Yahoo 7 Finance - April 7th, 2013,

Perth - Perth-based bauxite explorer and developer, Bauxite Resources Ltd (ASX:BAU.AX - News) (PNK:BXRDF - News) is pleased to provide an update on bauxite exploration activities in its northern Darling Range tenement area, Western Australia.
An exploration drilling campaign has been completed on the Company's Fortuna prospect, located on private farmland near the regional town of Wundowie, Western Australia, with the aim of identifying additional bauxite resources. This work was carried out on exploration tenement E70/2230 to which BRL retains 100% bauxite rights. The project area lies adjacent to the 73.3Mt Felicitas bauxite resource to which BRL retains 30% beneficial interest. The drilling area has excellent road access to Perth, existing heavy rail approximately 15km to the north and Kwinana Port approximately 120km from the project area.
The exploration program comprised 302 vertical holes drilled for 2,857 metres across an area of approximately 385Ha at a nominal 160m x 80m drill pattern. A preliminary review of the data shows that significant bauxite grades and thicknesses are present, with approximately 65% of the holes containing available alumina grades of greater than or equal to 25%, with at least 2m thickness, reactive silica less than 5%, and maximum strip ratio of 1:1. Bauxite thicknesses of up to 13.5m (average 5.2m) were intersected.
Preliminary examination of the FTIR analysis received to date (for above mentioned significant holes) indicates;
- Available alumina in the range of 25 - 53% (arithmetic average 31.7%)
- Total alumina within bauxite of up to 59%
- Reactive silica ranges 0.1 - 4.6%
- ~10% of above samples have been checked by low temperature (143o) digest
The mineralised zones have limited overburden which increases potential for lower mining excavation costs. Fortuna represents the southern extension of the Felicitas resource, and remains open to the east and south. Further drilling is planned to commence in the June quarter. The assay results quoted have been achieved without the aid of beneficiation processes.
Final check low temperature bomb digest and XRF analytical data for the program is expected during April 2013. Preliminary review by BRL geologists suggests that bauxite mineralisation encountered may provide BRL a wholly owned bauxite resource, and add to total bauxite resources. A resource estimation study will be undertaken by RPM Global; once geological modelling is completed BRL expects to receive a JORC classified resource estimate during the June quarter 2013.

Lucintel Projects Good Growth in Global Bauxite Mining Industry through 2018

The Times.com - April 5th, 2013,

Texas - The global bauxite mining industry is forecast to reach $10.6 billion by 2018. The industry is consolidated with the top 10 players dominating the market. Competitive rivalry is high with a low threat of entry from new players and high exit barriers in bauxite mining industry. Players use advanced technology for the mining of ore, which is beneficial for increasing productivity.
Lucintel, a leading global management consulting and business research firm, has conducted a competitive analysis on the industry and presents its findings in “Global Bauxite Mining Industry 2013-2018: Trend, Profit, and Forecast Analysis.” Several aspects such as governmental regulations and growth in related complementary industries, general economic environment, fluctuations in input prices, and the performance of end-use markets have major impacts on industry dynamics.
The report studies the major challenges faced by the industry. The industry faced a decline in demand due to Europe’s unemployment rate increase. Europe faced the surge in unemployment because most of its countries were locked in recession. The increasing unemployment rate suppressed domestic demand, which led to low economic growth.
The study reveals the key drivers of the bauxite industry. Bauxite is the most important aluminum ore. Application of aluminum in vehicle manufacturing is increasing rapidly due to the associated benefits, such as corrosion-free, high-density, and lightweight features that make aluminum desirable for use in motor vehicles. Growth in the transportation sector, such as in airplanes, trucks, railcars, and marine vessels, accelerated bauxite demand, as aluminum is widely used in many transport applications.
This industry research report is intended to provide industry leaders with a competitive benchmarking of the bauxite mining industry. The study provides up-to-date information on the market share, profit margins, capabilities, and strategies of the leaders.

Record bauxite output by Nalco

Business Line - April 3rd, 2013,

Despite delay in renewal of mining lease, the company has achieved the highest-ever bauxite production of 54.19 lakh tonnes, against 50.03 lt achieved in the previous fiscal. Its alumina refinery produced 18.02 lt of alumina hydrateagainst 16.87 lt achieved in 2011-12.
However, during the year, the company’s metal production slumped marginally from 4.13 lt to 4.03 lt, due to planned shutdown of pot shells of the smelter.
According to Ansuman Das, CMD, besides coal shortage, the dwindling LME prices of metal, forced the company to cut down its production of metal to some extent. “It was not commercially viable to produce more metal using expensive imported coal,” he said.

Southland looks for alternatives to Tiwai Point smelter

One News - April 2nd, 2013,

Southland is preparing for the worst as uncertainty continues over the future of the Tiwai Point aluminium smelter.
Officials are set to discuss what other industries the region could attract and even if the plant could be sold to the Chinese.
The Tiwai smelter produces the highest quality aluminium in the world. So if need be, Shadbolt is offering to try sell it to a Chinese buyer in Invercargill's soon-to-be sister city.
"We will be taking the role, I guess, of salesman," Shadbolt said.
'Quite a gap'
The Government tried to help negotiate a deal over the weekend but said the owners walked away from talks.
Prime Minister John Key said there is "quite a gap" between the long-term offer on table from Meridian Energy and that from the smelter's owners Rio Tinto.
Rio Tinto shunned the offer of a short-term taxpayer-funded subsidy to resolve electricity negotiations.
It will resume discussions with Meridian Energy on a deal after nine months of negotiations reached a deadlock.
But the union says the Government needs to do more as workers are already selling their homes out of fear.
"We don't believe the Government at this point in time has done anywhere near enough," said Hobbs.
Meanwhile, Pacific Aluminium said in a statement it believes a commercial agreement can still be reached.
Pacific Aluminium communications manager Anthony Havers said a commercial agreement in the best interests of all parties could still be reached and it looks forward to continuing productive negotiations.
NZ Aluminium Smelters acting general manager Stewart Hamilton said Tiwai management believed a commercial agreement could still be reached after the past few weeks of discussion.
He believed workers understood the situation smelter bosses were in.

UC Rusal Gives Conditions to Resume Production at ALSCON

This Day Live - April 1st, 2013,

The current operator of the Aluminium Smelter Company of Nigeria (ALSCON) in Ikot Abasi, Akwa Ibom State, United Company Rusal (UC Rusal), Monday gave two conditions for resumption of operations at the aluminium factory.
The company which commenced production at the factory about six years ago recently announced temporary suspension of operations at ALSCON over irregular power and gas supply and legal brouhaha surrounding the ownership of the aluminium plant.
In an interview with THISDAY in Uyo, the Public and Government Relations Director of ALSCON, Mr. Albert Dyabin, said for the company to resume production soon, the two conditions must be met.
Dyabin, who has been transferred back to the headquarters of the UC Rusal in Moscow, Russia, after three years in Nigeria is now replaced by Mrs. Tatiyana Snirnova.
He listed the two conditions before production could resume to include stable power supply and elimination of legal uncertainties around ALSCON.
He explained that since UC Rusal started production at ALSCON in February 2008, there was never stable power supply to the factory hence the company suffered from a lot of distractions as a result of power disruption.
“ALSCON suffered from frequent distraction from power supply which resulted in six times collapse of the entire production processes and complete breakdown of equipment and had to resume production from zero point," Dyabin said.
This disruption of production, he lamented led to considerable financial losses saying “as at today, this problem of power supply is not resolved and we will try to resolve it by connecting ALSCON to the national grid.”
Dyabin maintained that for the early resumption of production, all the legal uncertainties around ALSCON must be eliminated.
According to him, even when the Bureau of Public Enterprises (BPE) decided to conceal offer to the BFI Group, the decision of the Supreme Court is not concealed as it still exists.
“That is why we say some legal limbo is not still clear. When these conditions are met, it could be possible to resume production at ALSCON,” he stressed.
Dyabin said the company had taken steps to reduce the consequences on the suspension of production on staff and traditional communities.