AluNews - February 2014

Inalum to build new smelter, boost output

The Jakarta Post - February 28th 2014,

In a bid to double its production capacity by 2019, state-owned aluminium maker PT Indonesia Asahan Aluminium (Inalum) is planning to build a new smelter in the first half of this year, with estimated investment to reach US$1 billion.

Inalum development director Winardi Sunoto said on Thursday that the company was conducting a feasibility study, which was expected to be completed by the end of this year.

“As soon as the study concludes, we will continue with bidding to get contractors and complete other steps that may take between six and eight months,” he told The Jakarta Post on the sidelines of a smelter summit, adding that construction would kick off after the series of steps.

The planned smelter is designed to have a production capacity of 200,000 tons of aluminum ingots. As part of its gradual expansion plan, Inalum is upgrading the capacity of its existing smelter to 300,000 tons of aluminum ingots from 250,000 tons at present.

The expansion plan was born after the Indonesian government took over Inalum from Nippon Asahan Aluminium (NAA), a consortium of 12 Japanese firms, following the expiration of their 30-year contract.

Before the takeover, Inalum, which operated the only aluminum smelter in Southeast Asia, shipped 60 percent of its total output to Japan. The remaining portion was sold to domestic buyers who also relied on imports to meet high demand.

According to Winardi, the company will opt for syndicated loans and raise funds from bond issuance to finance smelter construction.

“We are examining the most competitive option to execute our expansion plan,” he explained.

Earlier reports said that Inalum would likely spend $2 billion on various development projects to include the new smelter, a 600-megawatt steam-fueled power plant to support its operation, a carbon factory in North Sumatra, and an alumina refinery in Mempawah, West Kalimantan, which it will jointly develop with state-owned miner PT Aneka Tambang (Antam).

The refinery, which is slated to produce smelter-grade alumina, will be essential to Inalum’s operations, as it will secure the raw material for aluminum ingot production, which will also double along with the firm’s significant capacity increase.

At present, Inalum imports around 500,000 tons of alumina from Australia to produce the alumina ingots, as the refinery is not available locally.

Winardi said that the firm expected to sell its total ingots domestically and stop exports next year amid surging national consumption and competitive edge in the delivery period thanks to its proximity with local buyers. The biggest output of Inalum now goes to its buyers in Jakarta, followed by those in Surabaya, East Java, and Medan, North Sumatra, which jointly absorb more than 200,000 tons of its overall production.

Domestic demand of aluminum ingots is estimated to reach 600,000 tons each year, but Inalum, which is the only aluminum smelter in the country, can only supply less than half of the figure, leaving the majority to imports.

RusAl Wants to Make Indonesia its Regional Alumina Production Hub

The Moscow Times - February 28th 2014,

Aluminum giant United Company RusAl wants to make Indonesia a regional hub for its alumina production and will decide on an initial investment by the end of this year, said a senior official with its parent company.

Maxim Sokov, first deputy CEO of En+, said it was an "ideal time" to invest in Indonesia with global aluminum prices expected to bottom out this year, thanks in part to the country's ban on bauxite exports.

"We are in the moment in the cycle when there are a number of events that are coming together to help prices start to go upwards again," Sokov said this week during a visit to Jakarta as part of a high level Russian delegation led by its deputy prime minister.

"Indonesia ticks all the boxes and is the best platform for the next cycle of growth."

Indonesia banned all unprocessed mineral ore exports last month in an effort to force miners to build smelters and process their raw materials domestically. Before the ban, the Southeast Asian nation provided about 60 percent of China's bauxite imports.

The withdrawal of Indonesian bauxite from the global market has found widespread support among global mining giants like loss-making RusAl, which has been hit hard by weak aluminum prices.

Sokov said RusAl has lost its position as the world's top aluminum producer to Aluminum Corp. of China Ltd., or Chalco, after the Russian company shut down at least three smelters in the western part of the country. New Opportunity

RusAl is now looking at Indonesia to replace the lost smelting capacity.

"Our plan is to close all the high-cost smelters, keep our low cost base and look for the new opportunities to expand that low cost base. Indonesia is that new opportunity," Sokov said.

RusAl on Tuesday signed an MOU with Indonesia's PT Arbaya Energi to build an alumina smelter in West Kalimantan, the heart of the country's bauxite industry. Bauxite is a key ingredient in making alumina, which is then processed to yield aluminum.

Sokov said the company will decide by the end of this year whether to build the smelter after first conducting a feasibility study, declining to say how much the smelter would likely cost.

Indonesia's Chief Economics Minister Hatta Rajasa said the two companies planned to invest as much as $3 billion in smelters, according to The Jakarta Post.

RusAl previously signed an MOU in 2007 to build an alumina smelter in Indonesia, but decided against investing when the global financial crisis hit.

Sokov, who is also a board member of Russia's Norilsk Nickel, is much more optimistic this time around due to a combination of production cuts, smelter shutdowns and stable global demand growth.

He expects aluminum prices to return to $2,500 a ton in the next three to four years, about the same time it would take for a new Indonesian smelter to come into operation. The benchmark LME three-month aluminum price reached $1,761 a ton on Thursday, down about 2 percent so far this year.

For Indonesia, Sokov estimates Southeast Asia's largest economy needs about 3 million tons of aluminum a year, which requires around 6 to 7 million tons of alumina.

"If Indonesia wants to convert up the value chain, it has the best momentum and has everything in its own hands. If it loses this opportunity, it will be a real pity," Sokov said, adding that the Philippines and Malaysia could be alternatives as a regional hub.

Russia’s Rusal Eyes Indonesia as Future Alumina Hub, Plans Smelter

The Jakarta Globe - February 27th 2014,

Jakarta. Russia’s aluminum giant United Company Rusal wants to make Indonesia a regional hub for its alumina production and will decide on an initial investment by the end of this year, said a senior official with its parent company.

Maxim Sokov, first deputy CEO of En+, told Reuters it was an “ideal time” to invest in Indonesia with global aluminum prices expected to bottom out this year, thanks in part to the country’s ban on bauxite exports.

“We are in the moment in the cycle when there are a number of events that are coming together to help prices start to go upwards again,” Sokov said this week during a visit to Jakarta as part of a high level Russian delegation led by its deputy prime minister.

“Indonesia ticks all the boxes and is the best platform for the next cycle of growth.”

Indonesia banned all unprocessed mineral ore exports last month in an effort to force miners to build smelters and process their raw materials domestically. Before the ban, the Southeast Asian nation provided around 60 percent of China’s bauxite imports.

The withdrawal of Indonesian bauxite from the global market has found widespread support among global mining giants like loss-making Rusal, which has been hit hard by weak aluminum prices.

Sokov said Rusal has lost its position as the world’s top aluminium producer to Aluminum Corp of China (Chalco) after the Russian company shut down at least three smelters in the western part of the country.

New opportunity

Rusal is now looking at Indonesia to replace the lost smelting capacity.

“Our plan is to close all the high-cost smelters, keep our low cost base and look for the new opportunities to expand that low cost base. Indonesia is that new opportunity,” Sokov said.

Rusal on Tuesday signed an MOU with Indonesia’s Arbaya Energi to build an alumina smelter in West Kalimantan, the heart of the country’s bauxite industry. Bauxite is a key ingredient

in making alumina, which is then processed to yield aluminum.

Sokov said the company will decide by the end of this year whether to build the smelter after first conducting a feasibility study, declining to say how much the smelter would likely cost.

Indonesia’s Chief Economics Minister Hatta Rajasa said the two companies planned to invest as much as $3 billion in smelters, according to The Jakarta Post.

Rusal previously signed an MOU in 2007 to build an alumina smelter in Indonesia, but decided against investing when the global financial crisis hit.

Sokov, who is also a board member of Russia’s Norilsk Nickel, is much more optimistic this time around due to a combination of production cuts, smelter shutdowns and stable global demand growth.

He expects aluminum prices to return to $2,500 a ton in the next three to four years, around the same time it would take for a new Indonesian smelter to come into operation. The benchmark LME three-month aluminum price reached $1,761 a ton on Thursday, down around 2 percent so far this year.

For Indonesia, Sokov estimates Southeast Asia’s largest economy needs about 3 million tons of aluminium a year, which requires around 6-7 million tonnes of alumina.

“If Indonesia wants to convert up the value chain, it has the best momentum and has everything in its own hands. If it loses this opportunity, it will be a real pity,” Sokov said, adding that the Philippines and Malaysia could be alternatives as a regional hub.

Ormet Is Looking to Sell Smelter

The Intelligencer / Wheeling News-Register - February 23rd 2014,

Several months after shuttering its local plant and almost one full year since it filed for bankruptcy, Ormet Corp. has announced the smelter plant and surrounding property - including land on which natural gas currently is being produced - is up for sale.

The company, in noting the plant's assets for a potential new buyer, is touting the ability to restart each of its closed smelter's six potlines independently, as well as expected natural gas royalties from the adjacent land.

Calibre Group, the company's investment bank, already has begun to reach out to prospective purchasers and investors and is assisting Ormet with other strategic initiatives that may add value for a potential buyer.

To help pay off debts, the aluminum producer, which filed for bankruptcy on Feb. 25, 2013, has sold many of the raw materials required to make aluminum, including copper rods, carbon anodes, and alumina. It also sold its former Burnside, La. facility in December to Almatis for $39.5 million.

Amid rising electric costs and declining aluminum prices, Ormet filed for bankruptcy last year. The company reduced its workforce throughout 2013 to cut costs.

Following an October ruling by the Public Utilities Commission of Ohio, the company suspended all operations just a few days later. This left nearly 1,000 employees wondering if they had worked their final shifts at the Hannibal smelter.

Now, company officials say they hope to sell the facility, with an annual capacity of 270,000 metric tons of aluminum, to a new operator.

"The outlook for aluminum demand is strong, driven by increased use in automobiles, changing demographics in the developing world and a robust aerospace industry," Ormet officials said.

When Wayzata Investment Partners offered $221 million for Ormet last year, part of the new business plan involved eventually powering the aluminum smelter plant with a natural gas power plant. Although this did not materialize, Magnum Hunter Resources is pumping about 11.7 million cubic feet of natural gas daily from Ormet property directly across Ohio 7 from the Hannibal plant.

Magnum Hunter is the parent company of Triad Hunter, which drills and fracks wells in the Upper Ohio Valley, as well as Eureka Hunter, which processes and transports natural gas via pipelines.

Ormet "is anticipating a royalty stream from oil and natural gas production from its Marcellus Shale leases with additional opportunities available that can help to offset purchase and restart costs," the company said.

Although company officials at Ormet have been unavailable for additional comment, the bankrupt firm should be receiving production royalties for gas drawn from its property. Lease contracts throughout eastern Ohio have paid from as low as 12.5 percent to at least as high as 20 percent.

Ormet also said its current relationship with the United Steelworkers is "very good."

"We are hopeful that a buyer will step forward with a plan to restart operations so that the Ohio Valley men and women who have dedicated their lives and careers to Ormet can get back to their jobs," USW spokesman Tony Montana said.

Union officials believe Ohio Gov. John Kasich should have worked to get the Public Utilities Commission of Ohio, Ormet and American Electric Power to find a solution that would have kept the plant running. However, the governor has no direct authority over the PUCO. Ohio Rep. Jack Cera, D-Bellaire, is hoping to change that through legislation he introduced in the Ohio House that would allow the governor to override the PUCO in certain cases, such as Ormet's dispute with AEP.

"The USW will continue to press Gov. Kasich, the PUCO and AEP to negotiate a fair electricity supply arrangement," Montana said.

Despite losses Century wants to reopen Ravenswood smelter, officials say

Top News Today - February 21st 2014,

Despite a loss of $40.3 million the previous year, Century Aluminum still has hopes of reopening its Ravenswood smelter, said the company in a financial statement.

Century Aluminum lost a sum of $9.7 million in the last 3 months of 2013, according to the financial statement released. The statement also talked about the company paying $8.4 million to its last chief executive officer, Logan Kruger.

The company lost around $6.9 million during 2012’s fourth quarter.

"We remain absolutely and resolutely committed to reopening our smelter at Ravenswood, West Virginia, and are working hard on a number of processes to this end," Century stated in its annual report.

Randy Moore, sub-district director for the United Steelworkers of America in West Virginia, said, "That is what they keep telling us. But nothing really takes place.

"We still have the situation with the retirees. We still need a power deal and we still need aluminum prices to improve," Moore said. "But I'm glad to hear that."

Century shut down its Ravenswood plant in February 2009 and 651 employees had to lose their jobs.

In order to make Century Aluminium reopen Ravenswood smelter, West Virginia legislators as well as State Public Service Commission, as an incentive package in October agreed to let the company pay less for their electricity power.

Century officials had rejected the deal considering it not very beneficial. But they still wanted to find out a deal suitable for everyone.

In its annual report, Century said it is making efforts to get a favorable arrangement for electric power, reducing electricity costs, in order to keep its aluminium plant in Mt. Holly, S.C. open.

"Likewise in Iceland, we continue to work with numerous constituencies to seek a way forward for the Helguvik project," the report stated.

Michael Bless, Century's president and chief executive officer, said, "The last several months closed out what we believe was successful and forward-looking year for Century."

According to its filing with Federal Securities and Exchange Commission, the company reported improved economic conditions earlier this year.

During 2013’s first quarter, Century reported a profit of $8.3 million, in comparison to a $4.4 million loss suffered during 2012’s first quarter.

Aluminium industry growing in cheap energy countries

ABC - February 19th 2014,

International aluminium companies are moving to countries where energy costs are much cheaper.

Along with a low commodity price, ageing facilities and a high Australian dollar, increased costs are one of the reasons Alcoa will close the Point Henry smelter in Geelong, Victoria, at a cost of 500 jobs.

The highest cost incurred in aluminium smelting is energy.

It makes up more than 40 per cent of all costs, compared with around 30 per cent for other processing operations

Senior commodities analyst with the ANZ Bank, Mark Pervan, says Australian companies find it hard to compete with the lower prices of gas, nuclear and hydro energy in other countries.

"A lot of the aluminium industry is migrating towards the Middle East and it's also migrating to places like Russia where they've got cheap energy.

"But also to countries you might not think of, places like Iceland and Canada, where there's a lot of hydro capacity and very cheap power."

Another contributing factor to the smelter's demise is a global glut of aluminium.

"China right now is producing way too much aluminium, and they're being subsidised by the government.

"They live in a market where they can source low-cost power and they also get a 30 per cent premium on the international price when they sell it for domestic use."

AWU and Rio Tinto strike workplace deal

Australian Mining - February 18th 2014,

The AWU says a new workplace agreement struck with Rio Tinto shows how the union is “able to move with the times”.

The landmark agreement comes after years of hostilities between the two parties over conditions at Rio’s Bell Bay aluminium smelter.

The agreement, approved by a ballot of workers, has been lauded by both the union and the miner as flexible in light of a recent downturn in the aluminium market.

The AWU had previously said workers at the plant were receiving less in wages than their mainland counterparts and mounted a sustained attack on the multinational miner.

However, AWU national secretary Paul Howes said guaranteed wage increases were dropped from negotiations in favour of securing entitlements which could previously be cut at Rio’s discretion.

Under the deal, workers continue to have common law contracts that are focused on rates of pay but a number of conditions that were previously part of those contracts have been included in the new enterprise agreement, The Australian reported.

These include above the minimum requirements for redundancy payouts made up of three months’ notice and half a month’s pay for each year of service capped at 65 weeks, medical insurance for families and singles and death and disability payments equal to the worker’s base salary.

Paul Howes said the deal secured certainty for Bell Bay employees “without creating any adverse working conditions that would damage the company’s performance”.

“This is an agreement and arrangement which demonstrates that the union movement is able to move with the times.

“The reality is when we started this campaign the dollar was lower and the aluminium price was a couple of grand higher.

“Now we are in a situation where Australian aluminium production is under a huge amount of pressure because of the low price on the LME (London Metal Exchange) and the high Australian dollar. So the priority for our organisation today is ensuring the job security of our members at that plant. We would never bargain for wages that come at the expense of job security. That has always been our union’s philosophy."

A Bell Bay spokeswoman said the agreement was “fair and flexible for our workforce and for the business”.

Alcoa to Close Point Henry Aluminum Smelter and Rolling Mills in Australia

Alcoa Inc. - February 17th 2014,

Alcoa (NYSE: AA) today announced it will permanently close its Point Henry aluminum smelter and two rolling mills in Australia. The smelter and an adjacent rolling mill are located in Geelong, Victoria. The second mill and a recycling facility are located in Yennora, New South Wales. The smelter will close in August and the rolling mills by the end of 2014.

The Point Henry smelter was placed under strategic review in February 2012 due to challenging market conditions. A comprehensive review found that the 50-year-old smelter has no prospect of becoming financially viable. The two rolling mills serve the domestic and Asian can sheet markets which have been impacted by excess capacity. Alcoa of Australia operates the smelter where approximately 500 employees work. Alcoa Inc. operates the rolling mills which employ about 480 people.

“We recognize how deeply this decision impacts employees at the affected facilities and are committed to supporting them through this transition,” said Chairman and Chief Executive Officer Klaus Kleinfeld. “Despite the hard work of the local teams, these assets are no longer competitive and are not financially sustainable today or into the future.”

The Anglesea coal mine and power station that currently supplies approximately 40 percent of the power needs for the Point Henry smelter has the potential to operate as a stand-alone facility after the smelter closes. Alcoa of Australia will actively seek a buyer for the facility.

The Portland Aluminum smelter in Victoria will continue normal operations, as will Alcoa of Australia’s bauxite mining and alumina refining operations in Western Australia.

“These are hard decisions to make,” said Alan Cransberg, Managing Director, Alcoa of Australia Limited. “We understand how difficult this is for our employees and their families, our contractors, suppliers and community partners. Everyone has worked hard to improve the competitiveness of the smelter and rolling business. They are part of a proud history of Alcoa in Australia over the last 50 years and part of the significant contributions we have made to the Australian economy and local communities. We appreciate the ongoing support of the Australian and Victorian governments and will continue to work closely with all levels of government, our employees, unions and community stakeholders to manage through these changes.”

Total 2014 restructuring-related charges associated with the closures outlined above are expected to be between $250 million and $270 million after-tax and non-controlling interest, or $0.22 to $0.25 per share, of which approximately 60 percent would be recorded in the first quarter. Cash costs during 2014 are expected to total approximately $160 million.

The closures will reduce Alcoa’s global smelting capacity by 190,000 metric tons and reduce Alcoa’s can sheet capacity by 200,000 metric tons. Including the closure of the Point Henry smelter, Alcoa has announced closures or curtailments representing 551,000 metric tons of smelting capacity, exceeding the 460,000 metric tons placed under review in May 2013. Once the Point Henry closure is complete, Alcoa will have total smelting operating capacity of approximately 3,760,000 metric tons, with approximately 655,000 metric tons, or 17 percent, of high cost capacity offline.

Rio's remarkable turnaround in aluminium

The Australian - February 17th 2014,

LOTS of remarkable things and figures in Rio Tinto's 2013 results. The $US10.2 billion profit comfortably beat market consensus, as did the annual dividend of $US1.92 a share. Then there was the "stunning" operating cost reductions, as chief executive Sam Walsh crooned from a soggy London.

But more remarkable than anything else was the turnaround in the aluminium business. It has been the runt of the litter ever since Rio plonked down $US38 billion in its ill-timed acquisition of Canadian group Alcan in 2007.

A breakdown of the 2013 profit shows that net earnings from aluminium shot from a miserable $US54m in 2012 to $US557m, and in a particularly tough market for the light metal too. It's still well short of where Rio would want it to be in terms of earnings capacity.

But with increased talk that the production cutbacks that Rio and the rest of the industry have been making might actually see global supply go in to deficit in the next year or two, aluminium might finally be worthy of some respect.

It has to be said that commentary on Rio's earnings in recent years has generally run along the lines that while its iron ore cash-printing machine is indeed a wonderful beast, it was a real shame that aluminium was such a dog.

On the 2013 figures at least, that sort of commentary is no longer valid. The margin and earnings improvement in aluminium came despite a 9 per cent decrease in prices over the period, although being a producer meant Rio collects the price premium flowing from the fact that much of the metal holed up in warehouses is locked up in financing deals, thanks to higher forward prices and low interest rates.

Rio has worked hard at stripping out costs, and it reckons that aluminium's earnings increased by $US392m from cash cost improvements. The aluminium result could have been $US40m higher still had it not been for the big wet in Queensland earlier in the year.

Knocking the aluminium division in to shape has been painful stuff, with Rio either selling, closing or curtailing five aluminium assets in 2013.

The most painful of all was the decision to suspend alumina production at the Gove bauxite/alumina operations in the Northern Territory. Walsh took time out from his scripted presentation notes last night to talk about the agonising decision, one that could yet be reversed if aluminium was to surprise everyone and bounce back big time in the next couple of years.

Walsh said Rio had turned itself inside out in deciding that the loss-making alumina stream at Gove just had to stop. There is no doubting that. But it also serves to demonstrate the depth of his resolve to pursue greater value for shareholders. And that is clearly occurring in aluminium. Depending on the various views out there on iron ore's future direction, Rio might just need a leg up from aluminium in years to come.

Workers fear Alcoa is set to announce close of Geelong plant

The Age Victoria - February 11th 2014,

Alcoa workers fear the company is about to announce the closure of its Geelong aluminium plant, costing hundreds of jobs.

The union covering the 700 full-time workers at the Point Henry factory expect an announcement any day.

‘‘I’m very pessimistic about what that announcement will be,’’ said Ben Davis, state secretary of the Australian Workers Union.

He expected the company to confirm its departure from Geelong ‘‘in the next few weeks’’.

It follows Toyota’s announcement on Monday that it will close its Altona car-making factory in Altona in 2017, costing 2500 jobs.

Mr Davis said Alcoa had made it clear it was not interested in government assistance.

Geelong has already suffered manufacturing job cuts at its Ford factory and Shell refinery.

Mr Davis said the city was facing a manufacturing crisis, and there was little movement from state, federal or local governments to face the issues head-on.

‘‘We’ve got a Prime Minister who has shown real antipathy towards manufacturing, especially unionised manufacturers,’’ he said.

‘‘We’ve got a Premier who is asleep at the wheel. And we’ve got a mayor of Geelong who is more interested in putting his name on billboards than doing anything,’’ he said.

An Alcoa spokeswoman declined to comment, but said the company was in regular contact with unions and staff.

Mr Davis also said there were growing fears that Shepparton’s SPC Ardmona plant would shut soon unless the state government stepped in to help fund a plan by its owner, Coca-Cola Amatil, to revive the business.

The federal government this month declined to put in $25 million – a figure to be matched by the Victorian government – to help the highly profitable food and beverages giant invest in the fruit and vegetable processor.

Nanshan America starts Indiana casthouse

Metal Bulletin Ltd - February 11th 2014,

Nanshan America Advanced Aluminum Technologies has started up its new aluminium casthouse in Lafayette, Indiana, the company said on Monday February 10. The Nanshan America Lafayette plant is fully commissioned and now casting alloy log and billet for both internal consumption and external sales, according to the subsidiary of China’s Nanshan Group Co Ltd.

The casthouse has an initial capacity of 300 million lb of aluminium billet and log annually. It is designed to produce billet and log in 8-,10-,12-,14- and 18-inch diameters with lengths of up to 300 inches.

Nanshan has operated two extrusion presses at the plant since last year.

“We are looking forward to establishing partners for our log and billet products, along with continued success in building our extrusion business with our 5,000- and 9,200-ton presses,” Eric Angermeier, gm, said in a statement.

Nanshan America makes custom extrusions, standard extrusions and seamless tubing for the automotive, hydraulic and high-pressure piping sectors.

Mozambique: Bauxite Company in Danger of Closure

All Africa - February 10th 2014,

Maputo — The only bauxite mine in Mozambique, located at Penhalonga in the central province of Manica, is at risk of closing, for lack of a market for its product, reports Monday's issue of the Beira daily paper “Diario de Mocambique”.

The managing director of the company, Mina Alumina, John Makle, said the company can extract up to 13,000 tonnes of bauxite a year. But from 2011 onwards it has only been producing 7,500 tonnes.

The company used to sell its bauxite to Zimbabwe and Zambia, but its clients in those countries are no longer buying.

“The economic crisis in Zimbabwe has seriously affected us”, said Makle. “Right now, we're waiting for a new market, the South African market, that wants to acquire our product”.

The fall in production has already led the company to sack 42 of its 65 workers. A further eight workers are at imminent risk of losing their jobs.

The Mina Alumina trade union committee accepts that the company is facing financial difficulties in paying the dismissed workers heir redundancy pay. Like the employer, the unions see selling bauxite to South Africa as a possible lifeline.

The proposal from South Africa is to purchase 5,000 tonnes of bauxite a year from Mina Aluimina. A sample of 30 tonnes is being sent to South Africa for analysis and assessment. If the potential buyer approves, then the mine could be saved.

“We cancelled further sackings”, said Makle, “because at the last moment a new buyer in South Africa appeared, and asked for several tonnes for assessment. At the same time the Zimbabwean Minister of Mines has told the company Zimforce to buy our bauxite again, though not in large amounts”.

For a longer term solution, the company hopes to attract partners who would invest in processing bauxite, setting up factories in the provincial capital, Chimoio, and in Manica Town.

Aluminum faces first deficit in nine years on output cuts: Sumitomo

Live Mint - February 10th 2014,

Global demand is expected to outpace supply by 37,000 metric tonnes in 2015 from a surplus of 312,000 tonnes estimated for this year

Tokyo: Japanese trading house Sumitomo Corp., which has stakes in smelters from Brazil to Australia, forecast aluminium will swing into a deficit next year for the first time since 2006 as lower prices accelerate output cuts.

“Global demand will outpace supply by 37,000 metric tonnes in 2015 from a surplus of 312,000 tonnes estimated for this year,” said Shingi Yamagiwa, manager of light metals trading at the Tokyo-based company. Aluminium prices are down 18% over the past year on the London Metal Exchange (LME). Top producers including United Co. Rusal, Rio Tinto Group and Alcoa Inc. have announced output cutbacks. China has tried to curb the capacity of its plants that account for almost half of world output, weighing down prices in a market that’s over-supplied.

“Western producers will continue to cut output, while China will adjust its production soon as the price of electricity pressures high-cost smelters,” Yamagiwa said in an interview on 7 February.

The metal touched $1,671.25 a tonne on 3 February, the lowest price since July 2009. The contract for delivery in three months was little changed at $1,718.50 a tonne at 11.23am in Tokyo.

Global aluminium demand may exceed output by 390,000 tonnes this year, Macquarie Group Ltd said 9 January, as demand improves and output is curbed amid unplanned closures and bankruptcies. Deutsche Bank AG forecast a 5.6% increase in global use of the metal this year in a 14 January report, with China’s demand growth at 9.5%.

BHP Billiton Ltd, the world’s biggest miner, said 17 January that it may cut as many as 450 jobs amid plans to close its Bayside aluminum smelter in South Africa.

Record premium

Premiums buyers pay for aluminium in the US Midwest were at 20 cents to 20.5 cents a pound ($420-$431 a tonne) from a record 20 cents to 21 cents a pound in January, Harbor Intelligence said on 4 February. The surcharge is added to the price for immediate-delivery metal on the LME.

Supply cutbacks, limited scrap supply and an increase in orders also helped boost the premiums, according to Wood Mackenzie Ltd.

“Premiums to Japan are expected to jump to a record $375 a tonne in the third quarter from around $255.5 this quarter on soaring fees in the US,” Yamagiwa said. The fee is settled on a quarterly basis in Japan. “Record LME inventories, of which the majority is locked in financing deals, also supported the premiums,” Yamagiwa said. Aluminum stockpiles tracked by the LME reached an all-time high 5.49 million tonnes on 16 January.

As much as 80% of stockpiles may be tied in transactions that make the metal unavailable to buyers, according to Societe Generale SA. Consumers including brewer MillerCoors Llc said last year that lengthy waits for metal inflated costs by $3 billion. BLOOMBERG

FinnvedenBulten divests its Swedish aluminium business, increased focus on magnesium

Finnveden Bulten - February 5th 2014,

FinnvedenBulten has, as part of the ongoing restructuring of the foundry business in the Finnveden Metal Structures division, signed an agreement to sell the division’s Swedish aluminium business in Finnveden Gjutal AB. The buyer is International Aluminium Casting Sweden AB, which operates with aluminium die-casting in Sweden and Estonia.

“Our strategy within Finnveden Metal Structures is to offer a unique combination of sheet metal stamping and magnesium die-casting to meet the need for weight reduction in the automotive industry. The sale of the aluminium business is an important part of the ongoing restructuring program and streamlining of the die-casting operation where all magnesium die casting is concentrated to one focused foundry located in Poland. At the same time we are pleased that the aluminium operation can continue with new owners having aluminium die casting as their main business,” says Johan Westman, President and CEO of FinnvedenBulten.

The divested aluminium business and additional restructuring costs are expected to lead to a positive net contribution to the operating profit amounting to around SEK 10 million during Q1 2014. The transaction is expected to be completed in March 2014 provided that certain conditions are met.

The effects from the total program are expected to generate approximately SEK 30 million in improved earnings compared with the outcome in 2012. The full effect is expected to be seen from the second half of 2014 after the transferred magnesium business has been tuned in into the Polish foundry.

Surinamese company targets investment in mining sector

GINA (Government Information Agency) - February 4th 2014,

Executives of Earthmoving Company LUNA N.V. met with the Natural Resources and the Environment Minister, Hon. Robert M. Persaud to discuss opportunities within the gold mining and bauxite sectors.

During discussions the Company which is based in Paramaribo, Suriname expressed an interest to establish an operation in Guyana to provide supplies and services to both the bauxite and gold mining sectors. The company also pointed out that new technologies suitable to Guyana’s conditions will be made available, particularly in the area of mining, rehabilitation and road building.

Minister Persaud during discussions welcomed the interest from the private Surinamese company to invest in Guyana’s gold and bauxite mining sectors. Further, the Natural Resources and the Environment Minister highlighted that the sector is open to new technologies and innovation to enhance current practices.

The Company also met with a number of local businesses to share expertise and build partnerships. (Natural Resources Ministry)

Rio begins refinery shutdown

The Australian - February 3rd 2014,

MINING giant Rio Tinto will today begin shutting down its alumina refinery on the Gove peninsula in Arnhem Land, commencing a five-month operation that is expected to see the plant mothballed by August.

The first wave of about 90 redundancy notices was distributed last week. All but about 350 of the present roughly 1500-person workforce is scheduled to go or be redeployed, with potentially devastating consequences for northeast Arnhem Land.

Workers will today embark on a two-day operation halting one of the plant's three parallel bauxite digestion trains. The other two will be switched off in similar operations beginning on April 1 and June 1 respectively, with corresponding reductions in employment. Each train takes about two months to place in care and maintenance mode.

A spokesman for the company, Anthony Havers, said about 20 per cent of the workforce would be affected by this first stage of the shutdown, followed by 30 per cent in stage two and 50 per cent in the final stage. The first redundant workers are expected to officially leave their posts at the start of next month.

The plant is next door to the town of Nhulunbuy, the Northern Territory's fourth-largest settlement and a service centre for the region. Nhulunbuy grew up around the refinery, and could lose up to three-quarters of its population due to the shutdown.

Rio estimates its spend on wages, goods and services will decrease from about $460 million to about $170m annually, stripping about $300m from the economy. The changes are likely to see corresponding reductions in services and business activity, relied upon by Nhulunbuy and the surrounding Aboriginal communities. School pupil numbers could plummet from about 950 to as few as 275, according to estimates.

Denise Fincham, a businesswoman and representative of the Gove Community Advisory Committee, a stakeholder group established to manage the crisis, said locals were under suffering extreme stress. "There's no information coming from Rio Tinto, or the NT and federal governments, about what sort of support packages there are going to be," she said. "There's a lot of frustration and pent-up anger."

Mr Havers promised Rio would begin releasing details of its support packages this month. He said the GCAC would be briefed at a meeting tomorrow, which Ms Fincham described as "D-day" for the community.

It is understood federal Opposition Leader Bill Shorten plans to visit Gove later this week to draw attention to its problems.

Documents seen by The Australian indicate federal cabinet is considering a package for Gove along the lines of that offered to Holden workers. However, both the federal and NT governments have been reluctant to show their hands before Rio.

Oman opens $385m aluminium rolling plant

Food Production Daily - January 30th 2014,

Oman Aluminium Rolling Company (OARC) has opened a $385m plant in Sohar, north of the capital Muscat, which will be operational by the end of Q1 2014.

The annual capacity of the plant is 140,000 tons of multi-purpose aluminium sheets which will be sold regionally and exported to the Middle East, Asia, Europe, Australia, North and South America.

Smelted aluminium

The factory is located next to Sohar Aluminium Smelter, where smelted aluminium is transferred to the rolling processing with various alloys, depending on the market needs.

Hilal Al Kharusi, chairman, OARC, said the site will create jobs for Omanis, diversify the national economy and export processed aluminium overseas.

Emphasis should be given on diversifying the national economy and providing job opportunities for Omanis, this huge project will be a milestone in the Omani industrial sector and bring in numerous benefits to the national economy,” he said.

We are looking at reaching full plant operational capacity in the first quarter of 2014.

We started contributing to local businesses through providing job opportunities and contracting with local vendors and small businesses and we plan to export processed aluminium to different countries overseas.”