AluNews - October 2014

Inalum to Build $2b Aluminum Smelter

Indonesia Today - October 29th 2014

Jakarta. State-run aluminum maker Indonesia Asahan Aluminium, or Inalum, is planning to build an aluminum smelter valued at $2 billion and a calcined petroleum coke plant worth $30 million, in a move that will help it to produced value-added products.

The smelter will turn bauxite into aluminum, which the company needs to produce aluminum ingots. The move is expected to bring added value to the company, which is now under the state's control. The government took over Inalum after buying shares it didn't own from its Japanese partner last year. Inalum is also planning to diversify its business by producing aluminum alloy.

"We're conducting a feasibility study on the projects. Hopefully it can be completed soon so that the two plants can start operation by 2019-2020," Agus Tjahajana, chief commissioner of Inalum, said on Tuesday.

Agus said the company gets its raw materials for calcined petroleum coke from Dumai and bauxite from state-run miner Aneka Tambang. Inalum's need for aluminum reaches 500,000 metric tons per year and growing demand suggests the need for a smelter.

"Around 80 to 90 percent of Inalum's production is sold domestically. We only export it through tender if the supplies are unabsorbed here," said Agus. "We're still reviewing all possibilities, including the investment funding."

Anrak Aluminium says may get government approval for bauxite project

The Economic Times - October 29th 2014

SINGAPORE: India's Anrak Aluminium is optimistic of securing government approval to mine bauxite in three to four months, a company official said on Wednesday, possibly ending a three-year wait.

"We are hopeful of getting approval in three to four months," Hariharan Mahadevan, president of projects at Anrak, told an industry conference in Singapore.

The mine, located in the southeastern state of Andhra Pradesh, will have an annual capacity to produce 1.5 million tonnes of bauxite, used to make alumina which then goes into producing aluminium.

Its alumina refinery should be in place by April 2015, while the second phase will include a smelter, Mahadevan said. Amrak is a joint venture between Penna group of industries and Ras Al Khaimah Investment Authority, according to the company's Facebook page.

Vedanta Aluminium, which has been struggling to source sufficient bauxite to feed its 1 million tonnes per year alumina refinery in Odisha state, is also hopeful of an improvement in the supply of bauxite.

Billionaire Anil Agarwal, the founder of London-listed Vedanta Resources that controls Vedanta Aluminium, told reporters on Tuesday that the government of Odisha has assured him of adequate supplies in the next three to four months.

Bauxite Gap Seen by Alumina Ltd. as Indonesia Says Ban Stays

Bloomberg - October 29th 2014

China may face a shortage of bauxite should Indonesia's ban on ore exports last into next year, according to Melbourne-based Alumina Ltd., highlighting risks to raw-material supplies for the world's largest aluminum industry. There's potential for a so-called bauxite gap of 10 million to 15 million metric tons as stockpiles in the country run out, and prices may rise, Andrew Wood, group executive of strategy and development, said at a conference in Singapore. Bauxite is used to make alumina, which is processed into aluminum.

Indonesia banned raw ore exports in January, seeking to spur investment in processing facilities in Southeast Asia's largest economy, and R. Sukhyar, director-general of minerals and coal, said today that the curb will be kept in place. Before the restriction was imposed, the Asian country accounted for about 18 percent of global bauxite production in 2013 and was the largest supplier to China, according to Citigroup Inc.

"The Indonesian ban, and the extent it holds, is obviously a key uncertainty for Chinese refiners," said Wood. While there's a number of potential outcomes that will take a while to play out, all reasonable scenarios are likely to increase bauxite and alumina costs, he said.

The global bauxite market will swing to a deficit of about 6.3 million tons this year from a surplus of 49.3 million tons in 2013 as production tumbles, according to Citigroup. A gap of 15 million tons is equivalent to 5.1 percent of next year's estimated mined output, according to Bloomberg calculations based on figures in an Oct. 2 report from Citigroup.

CHINA: Novelis expands aluminium output

Just Auto - October 24th 2014

US aluminium company Novelis is ramping up production at its new automotive aluminium sheet plant in Changzhou, in China's Jiangsu province, to meet growing demand from the country's automakers.

Novelis has spent US$100m on the facility which has the capacity to make 120,000 tonnes of aluminium sheet per year. The company is banking on growing demand for light weight materials in the automotive sector with aluminium increasingly replacing sheet steel for body panels and other body parts.

The company forecasts a compound annual growth rate of 30% in global demand for automotive aluminium sheets by the end of 2020. By 2025, the company expects global demand to reach 1.58m tons. Novelis plans to have 900,000 tons of capacity in place globally by 2015.

In Asia, major automakers currently use around 50,000 tons of aluminium sheet per year but this is expected to grow rapidly.

Alcoa sells stake in Mt. Holly smelter to Century

Argus - October 23rd 2014,

Washington, 23 October (Argus) — Alcoa is selling its stake in the Mt. Holly aluminium smelter in South Carolina to partner Century Aluminum for $67.5mn.

Alcoa owns a slight majority share of the 229,000t/yr smelter and Century owns the rest. The deal is expected to close in the fourth quarter.

The deal is the latest move in Alcoa's bid to cut its primary aluminium smelting capacity in order to cut costs and move its operations into the more profitable secondary aluminium business. The sale will cut Alcoa's global smelting capacity to 3.5mn t/yr from about 4.2mn t/yr before it began a review process in May 2013 to look at curtailing more than 10pc of its smelting operations in the face of persistently low aluminium prices.

If the sale goes through, Alcoa will have sold, curtailed or closed 1.3mn t, or 31 pc, of its global smelting capacity since 2007.

"While Mt. Holly is a strong facility, its cost structure does not match Alcoa's criteria for a low-cost portfolio of upstream assets," Alcoa's global primary products segment president Bob Wilt said. "The sale will help achieve Alcoa's strategy to optimize its commodity portfolio."

The smelter faces electricity cost issues as the two producers have not yet been able to negotiate a favourable power supply contract with South Carolina utility Santee Cooper past the current contract's expiration on 31 December 2015. The utility's last proposal "would have given Mt. Holly the highest power cost of any smelter in the US," Century chief executive Michael Bliss said in August, as Century and Alcoa said they were letting the facility's contract expire and would continue talks for 2016 and beyond.

Century recently negotiated favourable power agreements for its smelters in Kentucky, one of which, the 205,000t/yr Sebree smelter, it acquired from Rio Tinto Alcan in June 2013 as that company looked to reduce its primary footprint. Sebree was also facing an expiring power contract with utility Big Rivers Electric, and Century negotiated a deal to buy power on the Midcontinent Independent System Operator market. The Kentucky Public Service Commission approved that agreement in January.

Bliss said it will not be as easy to do the same for Mt. Holly because of the lack of an organized power market in South Carolina, but his company would work on a solution.

The sale is subject to regulatory approvals. Alcoa does not expect the deal to result in a significant gain or loss.

Bauxite Resources new alumina refinery at Toodyay to take advantage of global demand for aluminium

ABC Rural - October 22nd 2014,

Global demand for bauxite seems to be on the rise again according to the head of a West Australian exploration company.

Bauxite Resources executive director and CEO Peter Canterbury said global demand for aluminium is a positive for the mining sector in the south west of the state, despite a recent lull in demand due to oversupply.

Aluminium is made from alumina, which is a product of the mineral bauxite prevalent in deposits along the Darling Ranges.

Mr Canterbury said Bauxite Resources is entering into a joint-venture with Chinese company Yankuang Resources to establish an alumina refinery at Toodyay to export bauxite mined from its nearby Fortuna project.

WA's most significant alumina refineries are BHP Billiton's Worsley refinery and Alcoa's Wagerup refinery.

Alcoa's Huntly mine near Dwellingup is the largest bauxite mine in the world.

Mr Canterbury said global bauxite demand is being fuelled by China's construction industry and a projected increase in aluminium used by US car makers.

"We're recently seeing that there are re-tooling efforts by the likes of Ford and potentially General Motors to use a higher level of aluminium in cars," he said.

Alcoa noted an increase in 'aluminium-intensive vehicles' in its third quarter report for 2014.

Alcoa's report also pointed to a projected seven per cent growth demand forecast for the bauxite this year.

BHP Billiton's 2014 annual report noted a six per cent increase in alumina production.

Russian firm set to build $1.5b mineral facilities

The Jakarta Post - October 22nd 2014,

Russia's investment and industrial group Vi Holding may pour around US$1.5 billion into building mineral processing facilities in Indonesia, a Russian minister says.

The projects would comprise a $1 billion alumina refinery and a $500 million ferronickel smelter, Russian Industry and Trade Minister Denis Manturov said Tuesday.

The $1 billion alumina project was to be located in Kalimantan with a total output capacity of 2 million tons per year, Manturov added. It is expected that the refinery will finish development within four years, according to the minister.

"The alumina to be produced by the Indonesian refinery will be shipped to China to supply its own industry where it will then be processed into aluminum," Manturov said after a meeting with Indonesia's newly inaugurated President Joko "Jokowi" Widodo.

Vi Holding depends largely on raw materials from overseas to support operations at its new aluminum smelter in China, which cost $3 billion.

Apart from that, the firm also aimed to set up a $500 million ferronickel smelter in Indonesia and talks were under way for a joint venture with a local partner, Manturov said, without disclosing the name of the private company. The project would be completed within three years, he added.

The planned investment came up following Indonesia's move to ban shipments of unprocessed mineral ore in a bid to spur growth in the country's downstream mining industry and add value to its exports.

Vi Holding board chairman Valery N. Krasnov also previously said that the firm would invest in building bauxite and nickel processing facilities in Indonesia.

Indonesia, a major producer of several mineral commodities such as bauxite, nickel ore and copper, has attracted fresh investments as miners are required to build local refineries and smelters in order to be able to export, as stipulated in the 2009 Mining Law. This includes Russia's United Company Rusal's plan to invest more than ¤1 billion ($1.28 billion).

As shipments of nickel ore and bauxite from the country have been terminated, global prices of these commodities have soared, benefiting Russia's major industry groups, such as Rusal and Norilsk Nickel.

Manturov said that Indonesia and Russia had also laid out potential cooperations to be developed in a wide range of areas, including energy, aviation, shipping, maritime infrastructure and railway development as well as military engineering.

"Politically, both countries have a good relationship based on friendship and a strategic partnership and this serves as a foundation to enhance economic ties, particularly in trade and investment," he said.

Enormous opportunities were available for Indonesian exporters to increase sales of some food products — such as fishery outputs — to Russia, in addition to key commodities such as palm oil, Manturov explained.

Bilateral trade has surged rapidly in recent years, up by 45.1 percent on average to $3.52 billion last year from 2009, according to statistics from the Trade Ministry.

Russia is the 27th-largest foreign spender in Southeast Asia's biggest economy, with the bulk of the investment going to hotel and restaurant businesses, according to data from the Foreign Ministry.

Boyne Smelters to continue at full capacity

The Bulletin - October 21st 2014,

BUSINESS hasn't been easy in the world of manufacturing.

Australia has been left with just four aluminium smelters after yet another one closed down in recent weeks.

But Boyne Smelters Ltd has continued to work on ways to cut costs and keep its 1200 employees in a job.

The biggest unknown is a percentage of its power costs, and the smelter in the past few weeks has managed to secure a 12-month contract for its variable supply.

The other 85% is supplied by a long-term contract with Gladstone Power Station.

Boyne Smelters Ltd general manager Joe Rea said the contract would enable them to work at full capacity.

"As you may know, the first quarter this year we had to curtail our production by around 13 tonnes and that was always going to hurt us," he said.

"We didn't put people off during that time… it has cost us, but we now have a contract that extends to October next year."

Mr Rea said the smelter was also hoping to become exempt from the Federal Government's renewable energy target, which was costing the smelter $25 million a year.

"The aluminium industry is going through unprecedented tough times and the headwinds we face competing on a world scale are as bad as it's ever been," he said.

"In fact it's 20% worse than the GFC and 40% worse than the long-term average for aluminium pricing."

In 2013 the site introduced its new vision 'Proudly Australian, operating beyond 2030', which is a guiding principle for its safety and business decisions.

"It's not just about what we do to keep the business viable against increasing overseas competition, but also, and more importantly, how and why we do it," Mr Rea said.

"The how is with Australian pride and that starts with no injuries to our workmates. The why includes strengthening the manufacturing future for young Australians."

CUTTING COSTS:

In the past two years, BSL has:
  • Reduced contractors by 46%
  • Reduced full-time employees by 15%
  • Reduced CO2 emissions close to 4%, equal to taking 10,000 cars off the road
  • Reduced energy consumption on Lines 1 and 2 by 3%, which equals the power to 30,000 houses
  • Controllable costs down 17%
  • IT, HR and procurement services reduced by 50%

Smelter records big safety milestone

CONVEYOR belts, fork lifts zipping around and extreme heat conditions can cause major safety hazards, but the workers at Boyne Smelters Ltd have achieved a historic safety milestone this year.

Now more than two million hours recordable injury free on site, the BSL workforce focus on one task at a team and look out for their mates.

BSL's 1200 staff and contractors achieved the milestone on September 28, an achievement never before reached in the plant's 32 year history and one that is

seldom seen in any heavy industry environment.

General manager Joe Rea said it was an incredible accomplishment that team members and team leaders at BSL were extremely proud of.

"These milestones don't come from luck, nor do they come from focusing on breaking records by the accumulation of consecutive safe days building on our safety board at the site's entrance," he said.

Mr Rea said BSL team members and leaders had worked on a number of complementary initiatives in the past 12 months in a bid to improve the site safety result.

"At the end of the day going home to our families is the biggest incentive we have," he said.

CONVEYOR belts, fork lifts zipping around and extreme heat conditions can cause major safety hazards, but the workers at Boyne Smelters Ltd have achieved a historic safety milestone this year.

Now more than two million hours recordable injury free on site, the BSL workforce focus on one task at a team and look out for their mates.

BSL's 1200 staff and contractors achieved the milestone on September 28, an achievement never before reached in the plant's 32 year history and one that is

seldom seen in any heavy industry environment.

General manager Joe Rea said it was an incredible accomplishment that team members and team leaders at BSL were extremely proud of.

"These milestones don't come from luck, nor do they come from focusing on breaking records by the accumulation of consecutive safe days building on our safety board at the site's entrance," he said.

Mr Rea said BSL team members and leaders had worked on a number of complementary initiatives in the past 12 months in a bid to improve the site safety result.

"At the end of the day going home to our families is the biggest incentive we have," he said.

Novelis to close aluminium smelter, focus on special products

Live Mint - October 17th 2014,

Novelis Inc., the foreign unit of Hindalco Industries Ltd, will close its plant in Brazil that produces primary aluminium at the end of December and increase its focus on making secondary products using recycled metal, according to a company statement on Thursday.

"The decision to end operations at Ouro Preto (Brazil) is consistent with our global strategy... transforming from a linear business model to a closed-loop business model focused on recycled content," Tadeu Nardocci, senior-vice president, Novelis and president, Novelis South America, was quoted as saying in the statement.

"In addition, the closure is driven by systemic issues affecting the entire primary aluminum industry in Brazil impacting cost of operations and overall competitiveness," Nardocci added.

The global aluminium industry is seeing manufacturing capacities shift from the western countries to Asia and the Middle East as the cost of manufacturing in these regions is lower, according to analysts.

The Ouro Preto facility employs about 350 people and produces 18,000 metric tonnes of aluminum a year in the form of billets.

Part of the Aditya Birla group, Novelis operates in 11 countries with approximately 11,200 employees and reported revenue of about $10 billion in FY14; it supplies aluminum sheets and foils to the transportation, packaging, construction, industrial and consumer electronics sectors

Metallica Minerals Signs Supply Contract with Consulmet for Cape York Bauxite and Heavy Mineral Sands JV

Resource Investing News - October 16th 2014,

Metallica Minerals Limited ("Metallica") is pleased to announce that the Cape York Bauxite and Heavy Mineral Sands (HMS) Joint Venture has executed a legally binding Supply Contract with Consulmet Pty. Ltd ("Consulmet") for the Urquhart Point HMS Project on the western coast of Queensland's Cape York Peninsula.

The Contract is a fixed price turnkey contract to supply and commission the HMS concentrator plant on site at Urquhart Point, 3km west of Weipa, Cape York.

Consulmet will now commence construction of the modularised plant in South Africa, and this will then be delivered to Weipa and assembled. The plant is expected to be commissioned late in May 2015 with HMS production commencing in June 2015.

The Joint Venture is between Metallica's wholly-owned subsidiary, Oresome Australia Pty Ltd and a private Chinese investor. For further information regarding the Joint Venture please refer to ASX Release dated 1 August 2014.

GMDC acquires 100 hectares of land for alumina plant in Kutch

Business Standard Ltd - October 15th 2014,

Mining major Gujarat Mineral Development Corporation (GMDC) has acquired land in excess of 100 hectares for the first phase of an alumina plant and aluminium smelter plant, which would be set up in joint venture with Navratna Public Sector Unit (PSU) National Aluminium Company Limited (NALCO) at Mandvi taluka in Kutch district. In all, 400 hectares of land is required for the first phase of the project.

The first phase of the project involves setting up an alumina plant whereby alumina will extracted from the ore bauxite by means of a process at an alumina refinery. The second phase involves setting up an aluminium smelter plant. Aluminium smelting is the process of extracting aluminium from alumina.

"We have already acquired 104 hectares of land for the initial phase of the project and are in process to acquire more than 300 hectares of land," said, the official.

The official added that a Detailed Feasibility Report (DFR) regarding the project, which has been submitted by NALCO, is under study.

"NALCO has submitted Detailed Feasibility Report prepared by a consultant appointed by it. The DFR is under study," said, the official.

GMDC has 26% equity in this joint venture and will supply bauxite for the project from its group of mines in Kutch.

Investment for the first phase of the project would be around Rs 5,400 crore, up from initial estimates of Rs 4,000 crore, he stated, adding that the total investment for the project (including the aluminium smelter plant) would be around Rs 10,000 crore to Rs 12,000 crore.

The capacity of the alumina plant and aluminium smelter plant is for one million tonne alumina and 0.5 million tonne aluminium smelter respectively, the official said, adding that the plant will deploy advanced technology.

India produced 1.48 million tonnes of aluminium in 2009-10 , according to 'Indian Mineral Industry at a Glance 2011-12', a report published by Nagpur-based Indian Bureau of Mines. The production increased to 1.62 million tonnes in 2010-11 and 1.65 million tonnes in 2011-12.

According to Union Ministry of Mines, the world aluminium consumption in 2010 and 2011 was 40.96 million tonnes and 44.88 million tonnes respectively.

REFILE--Rio Tinto to sell stake in Cameroon aluminium smelter

Thomson Reuters - October 14th 2014,

Rio Tinto plans to sell its shares in an aluminium smelter in Cameroon, ending several decades in partnership with the government because the project no longer fits the global mining group's strategy.

Rio, which makes more than 90 percent of its profit from iron ore, has been edging away from aluminium since its $38 billion 2007 acquisition of Canadian giant Alcan soured during the financial crisis, leaving it with heavy writedowns. It has ruled out new investments in the metal.

Rio Tinto Alcan, the mining giant's aluminium business, said on Tuesday it would work with Cameroon's government to find a new investor in Alucam Group, as the 100,000 tonne-a-year facility is known.

"Rio Tinto Alcan is proud of its long participation in the Alucam Group over several decades. However, the Alucam Group's new business model no longer fits with our strategy," Rio Tinto said late on Monday.

Its contracts for technical and administrative assistance will not be affected, the company added.

Rio Tinto Alcan and the government both have a 46.67 percent stake in the project while the AFD, the French Development Agency, has a 5.6 percent stake and employees own 1.1 percent.

The smelter employs some 570 people at Edea, 65km (40 miles) from Cameroon's economic capital Douala.

Settlers must get permit before mining

New Straits Times Press - October 14th 2014,

Felda Bukit Goh settlers interested in bauxite mining must obtain a permit to unearth the aluminium ore before they can start mining, said a state Land and Mines Department spokesman, adding that the permit can be issued only after the approval of the state executive council.

He said only land owners could make the applications, and they must submit a consultant's report, a copy of the land title and the quit- rent payment slip.

"They should also specify the type of mineral they plan to extract, and how it will be transported and (the by-products) disposed of."

The company transporting the bauxite may be required to pay royalty to the state government.

He said the department would be advised by other agencies, including the Minerals and Geoscience Department, before approving such applications.

It was learnt that Minerals and Geoscience Department officers had inspected the area to determine the depth of bauxite layers and their grades.

Several villagers had allowed mining companies to use excavators to inspect the bauxite deposits in their land, but the companies were waiting for permits before they could extract bauxite.

The process requires the top soil to be cleared before the aluminium ore could be extracted from the sedimentary rocks. After the extraction, the area would be covered with the top soil again to prevent the formation of water pools.

A Felda Bukit Goh office spokesman said it was informed about the mining proposal by Felda headquarters last month.

According to a letter made available to the New Straits Times, the Felda Land Department said it had no objection to the project, but that the mining companies must, among others, get a permit and sign an agreement with the settlers.

REFILE--Rio Tinto to sell stake in Cameroon aluminium smelter

Reuters - October 14th 2014,

Rio Tinto plans to sell its shares in an aluminium smelter in Cameroon, ending several decades in partnership with the government because the project no longer fits the global mining group's strategy.

Rio, which makes more than 90 percent of its profit from iron ore, has been edging away from aluminium since its $38 billion 2007 acquisition of Canadian giant Alcan soured during the financial crisis, leaving it with heavy writedowns. It has ruled out new investments in the metal.

Rio Tinto Alcan, the mining giant's aluminium business, said on Tuesday it would work with Cameroon's government to find a new investor in Alucam Group, as the 100,000 tonne-a-year facility is known.

"Rio Tinto Alcan is proud of its long participation in the Alucam Group over several decades. However, the Alucam Group's new business model no longer fits with our strategy," Rio Tinto said late on Monday.

Its contracts for technical and administrative assistance will not be affected, the company added.

Rio Tinto Alcan and the government both have a 46.67 percent stake in the project while the AFD, the French Development Agency, has a 5.6 percent stake and employees own 1.1 percent.

The smelter employs some 570 people at Edea, 65km (40 miles) from Cameroon's economic capital Douala.

INR 15,000 crore alumina project to come up near Mundra

Vibrant Gujarat - October 13th 2014,

An alumina plant and aluminum smelter project worth INR 15,000 crore would be set up near Mundra in Kutch district of Gujarat. It is a joint venture between National Aluminum Company Ltd (Nalco), a PSU with the Gujarat Mineral Development Corporation (GMDC), Union Minister of State for Mines, Shri Dinsha Patel said.

gmdc-alumina The minister expressed hope that this project would get its nod from the Gujarat cabinet soon and that the foundation stone of this project would be laid in a month. According to him, Nalco would have 51 per cent equity, while the GMDC will hold the remaining.

INR 6,000 crore is required for the initial investment into the project, which will be raised to about INR 15,000 crore at a later stage, Patel said. The project is for one million tonne alumina and 0.5 million tonne aluminum smelter. GMDC will supply bauxite for the project from its group of mines in Kutch.

Alcoa Reports Strong Third Quarter 2014 Profits as Portfolio Transformation Delivers

Alcoa Inc. - October 8th 2014,

3Q 2014 Highlights
  • Net income of $149 million, or $0.12 per share; excluding special items, net income of $370 million, or $0.31 per share, up sequentially and year-over-year
  • Revenue of $6.2 billion, up 7 percent sequentially, up 8 percent from prior year period
  • Engineered Products and Solutions delivers highest after-tax operating income in history of $209 million, 18th consecutive quarter of year-over-year after-tax operating income improvement; new record adjusted EBITDA margin of 23.5 percent
  • Global Rolled Products after-tax operating income up 30 percent sequentially, 45 percent higher year-over-year
  • Upstream business improves performance for 12th consecutive quarter; highest Primary Metals segment adjusted EBITDA per metric ton since second quarter 2008
  • $306 million year-over-year productivity gains; year-to-date productivity gains of $862 million, exceeding annual target
  • $249 million cash from operations; $34 million negative free cash flow
  • Global aluminum demand growth forecast of 7 percent in 2014 reaffirmed

3Q 2014 Portfolio Transformation Highlights
  • Firth Rixson acquisition on track to close by year-end, financing complete; U.S. regulatory approval granted
  • Signed multi-year contracts with Boeing and Pratt & Whitney worth more than $2 billion combined, underpinning aerospace growth
  • Opened world's largest aluminum-lithium (Al-Li) aerospace plant in Indiana, U.S.; $100 million Al-Li 2017 revenues already contracted
  • Record auto sheet production as expansion in Davenport, Iowa ramps up; Tennessee auto expansion on schedule
  • Smelter at Ma'aden-Alcoa joint venture fully operational, generated profits
  • Announced permanent closure of aluminum smelter in Portovesme, Italy and safely completed previously announced closure of Point Henry, Australia smelter

Vedanta embarking on doubling alumina refining capacity in Odisha; govt mulls to solve environment puzzle

The Economic Times - October 7th 2014,

Azad of the Niyamgiri Suraksha Samiti said the authorities at the public hearing didn't record the tribals' objections and neither did it meet other norms for such hearings. What Azad and other critics of the project, such as Amnesty International, ask is where will Sesa Sterlite get the bauxite needed to feed the plant's expanded 6 mt capacity?

Dave pledged that the company wouldn't move to mine the Niyamgiri bauxite deposit unless there was local support. But activists aren't convinced that the two processes still aren't linked. Documents on the Orissa State Pollution Control Board (OSPCB) site still refer to the deposit that's 3.7 km from the plant site.

Sesa Sterlite says it's counting on its 2004 agreement with Odisha Mining Corp. for the supply of 150 mt of bauxite committed under the memorandum of understanding (MoU), meaning that finding the ore is the state-owned company's responsibility. In 2012, VAL acquired a 24.5% stake in Larsen and Toubro's near-dormant aluminium projects in the state. Least week, Agarwal told reporters, "We are talking to L&T, which has been allocated three bauxite mines, to tide over our raw material problem." The state has also agreed to let it mine two deposits of laterite, a mineral with lower alumina content.

According to the company, it has submitted more than 42 mining and prospecting applications for captive bauxite. In the interim period, it will source bauxite from domestic suppliers or import it if the need arises.

Uncertainty over raw material forced Sesa Sterlite to shut the refinery temporarily in December 2012. It is still running below capacity with repercussions on its smelter at Jharsugda, where it converts alumina from Lanjigarh into aluminium. A surge in aluminium prices has made this end of the value chain viable again, provided it can negotiate cheaper power supplies.

There are other potential challenges. In its EIA submission, Sesa Sterlite said, "Expansion will be limited within the existing plant boundary." But the company will need an additional 500 or 888 hectares (depending on the EIA version), apart from the 2,000 hectares it already owns, to expand the red pond (to store the caustic soda rich waste), fly ash pond (waste from the power plant) and other ancillary requirements. To do this it will have to relocate three villages --Rengopalli, Bandagurha and Kothdwar. Gram sabhas have already been conducted and have approved the plan, according to a company spokesperson.

Kishore Chandra Deo, minister of tribal affairs in the previous UPA government, says this may not be enough. "Unless land losers have been given pattas recognizing their claims, and the amount deposited in their accounts, the new Land Acquistion Act that came into effect on January 1 would apply," he said.

Deo, who had opposed bauxite projects in his constituency of Araku in Andhra Pradesh on the grounds that tribals owned the minerals, believes only a constitutional amendment can allow the acquisition of 6th schedule areas.

Azad has little time for politicians though. A "grassroots movement" cannot be dependent on the politics of the day, he said.

"Rahul Gandhi declared himself the soldier of the Kondhs--where is Rahul Gandhi today?" Azad said. "Bhaktacharan Das (former Congress MP from Kalahandi), who was so strongly opposed to Niyamgiri, changed his line to let them mine Sijimalli, Kottrumalli and other nearby bauxite deposits. We won't allow that. It will only lead to the silting of the Indaravati river."

Rio rejects Glencore merger idea

News.com.au - October 7th 2014,

GLENCORE'S hopes of striking a deal to become the world's largest miner remain just that, after an approach was rebuffed by Rio Tinto.

THE world's second largest miner, Rio quickly responded to reports it was being courted by Anglo-Swiss Glencore by saying publicly that it was not interested. Glencore is now expected to seek support from Rio shareholders, with press reports suggesting it had already reached out to Rio's largest shareholder Chinalco.

The Chinese aluminium giant has a near 13 per cent stake in Rio, while global investors BlackRock hold more than eight per cent.

Rio said its board unanimously concluded that a tie-up with Glencore was not in the best interests of its shareholders, after consulting with financial and legal advisers.

The approach was made in July and rejected by August, according to Rio.

Its confirmation of merger interest boosted its shares, which gained $2.48, or 4.3 per cent, to $60.07.

Market views on the merits of a merger, which is estimated to be worth $US160 billion and would create the world's largest miner, were mixed.

The theoretical advantages include the opportunity to pool each company's strengths: Rio Tinto in iron ore and Glencore in coal and marketing.

However there are doubts about the value of a merger to Rio, and the risk of its shareholders being short-changed given the current weakness in Rio's share price due to falling iron ore prices.

"I can't see it myself, it looks like it would be diluting high quality Rio assets with second-tier Glencore assets," Morningstar analyst Mark Taylor said.

"I don't think it is the sort of diversification Rio wants.

"If they were coming with really meaningful high quality copper assets it might have legs, but Rio have got a lot of those anyway."

Glencore may also make a hostile bid, although there are doubts it has the financial clout.

CMC Markets chief market strategist Michael McCarthy said hostile takeovers were far more expensive, and the current weak commodity environment would likely discourage such a move.

But there is strong pressure on Rio's board to get the best for its shareholders, he said, given a recent history of poor deals, including the $US38 billion Alcan aluminium takeover while prices were at a peak.

"They need to make sure the next major deal they do goes very well," Mr McCarthy said.

Fat Prophets analyst David Lennox said Rio would be a good fit in a merger, creating considerable synergy savings, and with a strong balance sheet and lack of debt.

MASSIVE MINERS THAT MULLED A MERGER
RIO TINTO


* Produces aluminium, copper, energy and iron ore
* Operates in more than 40 countries
* Listed and headquartered in Australia and UK

GLENCORE

* Produces and sells metals and minerals, energy and agricultural products
* Operates in more than 50 countries
* Headquartered in Switzerland and listed in London, Hong Kong and Johannesburg

Australian Bauxite gets lift from lease for Tasmanian mine

The Age - October 7th 2014,

In a brief announcement to the market, Australian Bauxite reported that the Tasmanian Government had granted the right to mine at its Bald Hill project in Northern Tasmania.

Granting the mining lease will allow the company to move into the final stages of approval prior to development of the Bald Hill bauxite deposit getting underway.

In a State renowned for its environmental activism, the granting of a mining lease to a mine at Bald Hill would appear to be a landmark achievement for the company. We consider the relationship the company has built-up with the Tasmanian Government and the local communities is extremely important.

The company will soon be seeking additional mining leases for two further sites in Tasmania, in Fingal Rail and DL-130.

Mining at Bald Hill will start on a small scale but significant for the company, with production of direct shipping ore (DSO) quality bauxite of 500,000 tonnes a year.

Production of the aluminium ingredient will be scaled up over the next two years, with a final production target of 2.0 million tonnes of DSO bauxite. The capital estimate to bring Bald Hill into production is only $4.5 million, with an additional contingency amount of $500,000.

Operating costs have been estimated at $28 to $30 per tonne and are expected to decline as DSO volumes reach the 2.0 million tonnes level. Additional savings will be made in transport as the remaining sites are closer to the docks. Based on a bauxite price of $US77 a tonne, operating margins will be robust.

In support of mining, the company's Tasmania joint ore reserve code (JORC) mineral resources stand at 8.7 million tonnes.

Aleris to invest $350M to upgrade Kentucky facility

The Aluminium International Today - September 25th 2014,

Aleris has announced that it will invest $350 million to upgrade capabilities at its aluminium rolling mill in Lewisport, Kentucky, USA.

The investment positions Aleris to meet anticipated significant growth in North American automotive demand as the industry pursues broader aluminium use for the production of lighter, more fuel-efficient vehicles. Aleris is currently a leading supplier to the European premium auto industry, which has led the transition to aluminium driven by tighter emissions standards.

"We have partnered with customers in the premium automotive segment from our Duffel, Belgium facility for years to develop and produce some of the most technically advanced lightweight aluminium solutions available today," Steve Demetriou, Aleris Chairman and CEO said. "We are excited to bring these capabilities to our Lewisport, Kentucky facility to serve automotive customers in North America as they shift toward significantly greater aluminium use."

The company expects to begin construction on the project this fall, with a goal of shipping automotive body sheet material to customers by early 2017. When fully operational, the new facility will allow for the production of 480 million pounds of aluminium auto body sheet annually.

The company's investment will include the addition of heat treatment and finishing capabilities, including a new wide cold mill, two continuous annealing lines and an automotive innovation centre.

"The key to our success in Europe has been our strong partnership with customers on research and development," Demetriou said. "We will take a similar approach with our customers in North America, ensuring they have the aluminium innovation that meets their specific needs."

A recent study of North American light vehicle aluminium content released by Ducker Worldwide states that the use of aluminium sheet for vehicle bodies is expected to increase to 4 billion pounds by 2025, from 200 million pounds in 2012. The properties of aluminium, which include its formability, recyclability, and high strength-to-weight ratio, make it an excellent solution for automotive manufacturers as they work to produce lighter vehicles that will meet more stringent fuel emissions in the United States.

Aleris has served the automotive industry from its facility in Duffel for many years. Including Lewisport, the company has 11 rolled aluminium products facilities in North America, the majority of which serve building & construction, truck-trailer, and metal distribution customers. Upon completion of the facility's upgrade, Lewisport will be the company's first site in North America that is equipped with aluminium auto body sheet finishing capabilities.