AluNews - July 2015

Century Aluminum to shut down Ravenswood smelter immediately

Reuters - July 28th, 2015

Century Aluminum said it will shut its Ravenswood smelter in West Virginia immediately as it had failed to secure competitive power supply amid tough market conditions.

Aluminium producers are seeing their profits dwindle due to sinking prices of the metal, which are currently near six-year lows. Premiums, a surcharge received by producers for delivery of metal, have also more than halved this year.

The Ravenswood smelter has been idled since February 2009.

"The decision to permanently close the Ravenswood plant is based on the inability to secure a competitive power contract for the smelter, compounded by challenging aluminum market conditions largely driven by increased exports of aluminum from China," Century said in a statement late on Monday.

"As a result, the economics of restarting and operating the facility are unfavorable," it added. Century is controlled by Swiss commodities trade house Glencore.

The combined impact of stronger output and a sharper-than-expected slowdown in top producer China has sent a market surplus in aluminium ballooning this year, a quarterly Reuters poll showed earlier this month.

Producers, including Alcoa Inc and Rusal, have recently blasted China's swelling exports as a factor behind plunging primary aluminium prices. China's exports of semi-finished aluminium, used in beer cans and window frames, grew by 30 percent in the first half.

Asked if he was considering launching a trade case against China, Alcoa Inc Chief Executive Officer Klaus Kleinfeld said earlier this month the company was considering all options.

Rusal has also raised China's swelling aluminium exports with the Australian government, and wants the issue tabled at the next meeting of the world's top customs body.

Falling aluminium prices could add to uncertainty around Cairn-Vedanta merger

Live Mint - July 23rd, 2015

Vedanta Aluminium is contemplating a massive reduction in headcount and other austerity measures

Falling aluminium prices could add to the uncertainty around the proposed merger of mining and minerals company Vedanta Ltd and its oil and gas arm Cairn India Ltd, as the share price of Vedanta slips, making the share-swap ratio seem unfavourable for Cairn shareholders.

Vedanta Aluminium, the company's aluminium division, is contemplating a massive reduction in headcount and other austerity measures to weather the impact of falling benchmark prices of aluminium on the London Metal Exchange (LME), Reuters reported.

"If at any point of time any further debacle happens, (like the) LME crashes down further, obviously the domestic aluminium producers will have no room to operate," Abhijit Pati, chief executive officer of Vedanta Aluminium, told Reuters on Tuesday. "We have already started making austerity drives, but that will not suffice. We are going into a huge amount of headcount reduction."

Aluminium prices on the LME are at a six-year low of $1,660 per tonne, having fallen steeply from $2,555 per tonne three years ago.

Analysts said the aluminium business contributes up to 12% of the operating profit at Vedanta Ltd and could impact overall profitability and the share price. Vedanta has two main aluminium divisions: Balco Ltd, which has an installed aluminium smelter (production) capacity of 325,000 tonnes per annum (tpa) and the Jharsuguda smelter under Vedanta Aluminium that has an installed capacity of 1.25 million tonnes per annum (mtpa).

On 15 June, the day after the merger was announced, shares of Cairn India were trading at Rs.187.60, while shares of Vedanta were trading at Rs.181.25. Since then, however, there has been a divergence in the stock price performance of the two companies, with Vedanta's shares falling by 25%, while Cairn's shares shed 12.5%.

On Wednesday, shares of Vedanta Ltd lost 0.37% to close at Rs.136.10 in Mumbai trading, while the Cairn India scrip rose 2.58% to Rs.166.95. The benchmark Sensex rose 1.15% to close at 28,504.93 points.

A steeper fall in the share price of Vedanta compared with Cairn India could make the share-swap ratio for the proposed merger look unattractive for Cairn shareholders.

"Usually, a 1:1 swap ratio means that the two companies (Vedanta and Cairn India) should be at more or less the same price, or the entity being merged should be at a discount. That is when it is easy to sell a merger to the shareholders. But in case of Vedanta, it is completely opposite," said an executive at a financial advisory firm, adding that this could bring the share swap ratio into question. He requested anonymity.

As per the terms of the merger, for each stock held, shareholders of Cairn India will get one ordinary share and minority shareholders will receive an additional 7.5% redeemable preference share of Vedanta Ltd, which can be redeemed at the face value of Rs.10 at the end of 18 months. The transaction represents a 7.3% premium to Cairn India's 12 June closing stock price, the firm said at the time of the transaction.

Some minority shareholders have already expressed concerns.

On the sidelines of the Cairn India annual general meeting held in Mumbai on Tuesday, a representative of United India Insurance Co. Ltd said the company opposes the merger and arrangement between Cairn India and Vedanta. He declined to be identified.

United India Insurance holds less than 1% stake in Cairn India. However, recent reports have suggested other shareholders may have reservations about the proposed deal as well. On 6 July, CNBC-TV18 news channel reported that Life Insurance Corp. of India (LIC) wants a better share-swap ratio for minority shareholders. LIC and UK-based Cairn Energy Plc. are the largest minority shareholders in Cairn India and hold a little less than 10% each.

Shandong Electric Power Corporation hands over the first unit of power plant to Balco

The Economic Times - July 21st, 2015

Shandong Electric Power Corporation (Sepco) of China has handed over the first unit of a proposed 1200 MW power plant to Bharat Aluminium Company (Balco). With handing over of the first unit of the proposed Rs 5000 crore project last week, Balco is poised to raise aluminium capacity to 5.7 lakh tonne, up from 3.5 lakh tonne at present.

As a result, Chhattisgarh will account for almost 25% of the country's aluminium output once the new smelters become operational. While Balco already runs a 270MW and 540 MW power plant, the increase in the company's aluminium and power generation capacity is likely to lead to a four-fold rise in downstream industries in the state.

The officials present during the handing over included Ramesh Nair, CEO & whole time director, Balco, Pankaj Sharma, Head- 1200 MW(Operation) of Balco and Lu Fujan of Sepco.

Speaking on the occasion, Sharma said commencement of the first unit of the 1200 MW power project will reduce Balco's dependence on external sources for power. Work on the remaining three units of the 1200 MW power plant is due to be taken up shortly, he added.

All the units of the 1200 MW power plant would become fully operational in six months after full requirement of coal is met and on attaining set standards of operation.

Daily average aluminum output falls to 68,500 tonnes in June: IAI

Reuters - July 20th, 2015

Daily average primary aluminum output excluding China fell to 68,500 tonnes in June from a revised 68,900 tonnes in May, data from the International Aluminium Institute (IAI) showed on Monday.

Global production for June, excluding China, was 2.056 million tonnes, down from a revised 2.135 million recorded in May.

Bahrain industry to receive a boost from smelter expansion

Zawya - July 20th, 2015

The $3.5bn Line 6 expansion is forecast to increase the company's annual output by 514,000 tonnes to reach 1.45m tonnes per year when at full production. Alongside construction and installation costs, the budget also covers the building of a new 1350-MW power station, the fifth linked to the Alba complex. The last major upgrade of the Alba plant was in 2005, when the fifth production line was rolled out at a cost of $1.7bn.

Additional capacity at the plant, which is already the sixth-largest aluminium smelter site in the world by output and the second-largest in the Middle East, is expected to act as a significant driver for economic growth and job creation in Bahrain. It will also spur further profit growth at Alba, which reported a 21% jump in net profit in 2014 to BD96.4m ($257m), according to a report issued in May by state-owned holding company Mumtalakat, which has a 69.4% stake in the firm.

Value addition

Alba's growth has encouraged the clustering of several downstream businesses in Bahrain. Next to the Alba foundry is the Gulf Aluminium Rolling Mill Company (Garmco), the Middle East's largest facility for making aluminium sheets and coils. Around half of Alba's output feeds into the domestic market, with the remainder exported.

According to Jean-Baptiste Lucas, CEO of Garmco, the expansion plan is good news. "Bahrain's downstream aluminium industry is very happy to see the approval of Alba's Line 6 expansion plans," Lucas told OBG. "This will put Alba back in the game as a global player and revitalise the industry, unlocking growth opportunities for downstream companies," he said, noting how the move will also enable expansion amongst downstream players.

Beyond the immediate advantages for local industrial companies, the Alba expansion could also serve to attract industrial foreign direct investment, despite rising competition - both in the region and globally. "Bahrain is still competitive in industry and has a good chance at attracting international companies who are interested in the Middle East," said Lucas. "Factories with a small- or mid-sized footprint like auto parts suppliers could find many advantages in coming to Bahrain."

The construction of the Alba extension, which is scheduled to start next year, is also expected to support growth in other sectors. According to Marco Neelsen, the CEO of port operator APM Terminals Bahrain, which manages the Khalifa Bin Salman Port, the Line 6 project is expected to bring new business to transportation and logistics companies. Up to 700,000 tonnes of imports are estimated to be required for the building of the new Line 6, he told OBG.

Further diversification

Many of the same competitive advantages that drove the creation of Alba in 1968 - the low cost of raw materials, competitive energy prices and skilled labour - continue to draw manufacturing interests to Bahrain. Serving as a platform for the Saudi Arabian market, in addition to the rest of the Middle East, Bahrain's ease of doing business and access to international markets has led to a thriving sector.

Indeed, manufacturing continues to be a major contributor to growth in the kingdom. Bahrain's headline real GDP expanded 2.9% year-on-year (y-o-y) in the first quarter, according to a report issued by the Economic Development Board in June. Growth in the non-oil economy, which constitutes more than 80% of the kingdom's GDP, reached 5.0%, while manufacturing grew 5.9% y-o-y in the quarter, after a 4.2% rise in 2014.

According to other industry participants, the country must push to strengthen and diversify the economy as well as look to streamline some of its bureaucratic procedures to speed up new developments. "Bahrain should look beyond oil for income," Jalal Mohammed Jalal, managing director of mixed activity conglomerate Mohammed Jalal & Sons Group, told OBG. "Gulf Petrochemical Industries Company was a great step in the right direction but since then, new industry has slowed and this is the major problem we're facing today."

Norsk Hydro: Long-term ICMS tax framework established for Hydro's Brazil operations

MarketWatch, Inc - July 17th, 2015

The Brazilian state of Pará has published a long-term ICMS tax framework for the aluminium producer Norsk Hydro ASA and related entities, developed between the parties. A new 15-year framework will replace the existing ICMS deferral on July 17.

"Our ambition is to develop robust and viable operations in Pará and to be an enabler for sustainable growth in the region. To do this, we need stable and predictable framework conditions. We are pleased to have agreed on a long-term ICMS framework for Hydro's operations in Pará," says Alberto Fabrini, executive vice president and head of Bauxite and Alumina in Hydro.

The aluminium plant Albras, the alumina refinery Hydro Alunorte, and the bauxite mine Hydro Paragominas are covered by this framework. Hydro will publish further details on the framework as soon as possible on www.hydro.com

ICMS is a value added tax collected by the Brazilian states. The aluminium industry in Pará has an ICMS deferral on intra-state purchases, which expires July 17, 2015. Hydro Paragominas, Hydro Alunorte and Albras have been subject to ICMS taxation on diesel and, since February 1, 2014, also de facto on fuel oil, as the state of Pará changed the collection point of ICMS tax from the distributor located in the state to oil refineries located outside the state of Pará. Currently this amounts to around BRL 250 million on an annual basis.

Under the new 15-year ICMS framework, Hydro Paragominas and Hydro Alunorte will continue to pay ICMS on diesel and fuel oil, while other intra-state purchases will have a renewed deferral for the period. Albras will pay ICMS on a 50 percent basis of electricity purchases, while other intra-state purchases will have a renewed deferral for the period. ICMS tax paid by Albras on electricity is expected to be offset by increasing domestic sales of primary aluminium, at a sales price including ICMS.

Hydro will continue to support verticalization through the aluminium value chain, contribute to development in the region and act as an enabler for sustainable growth in the state of Pará. Bauxite production at Hydro Paragominas is refined at Hydro Alunorte alumina refinery. Alumina from Hydro Alunorte is used as raw material in the primary aluminium plant Albras, a joint venture between Hydro and the Japanese consortium NAAC (Nippon Amazon Aluminium Co. Ltd.). Hydro also extends the value chain through selling 50,000 tonnes liquid aluminium annually from Albras to local cable producer Alubar. Hydro and Albras will increase domestic sales volumes on market terms to support the establishment of new value added downstream industries in Pará. Albras is also planning to high-grade its portfolio by upgrading 40,000 tonnes of its annual production capacity from standard ingot to primary foundry alloys, for sale to the domestic market.

Through the "from B to A" improvement program, Hydro has over the last years initiated significant efforts to lift production to nameplate capacity at Hydro Paragominas (9.9 million tonnes) and Hydro Alunorte (6.3 million tonnes), while reducing costs and improving operations. The increase to nameplate capacity has been achieved at Hydro Paragominas. Hydro Alunorte is still increasing production towards nameplate capacity. During the process of stabilizing and increasing production, Hydro Alunorte has identified additional measures to lift production beyond nameplate capacity, towards 6.6 million tonnes.

The CAP alumina refinery project is a joint venture between Hydro and Dubal Holding LLC. The project is currently put on hold due to market conditions. The CAP project will be subject to a technical review and Hydro is investigating the potential for continuing this project within 2018, should the market conditions improve sufficiently. This will require expanding the Paragominas bauxite mine to 14.8 million tonnes.

Hydro Paragominas has a nameplate production capacity of 9.9 million tonnes of bauxite annually. Hydro Alunorte, owned 92% by Hydro, has a nameplate capacity of 6.3 million tonnes alumina annually and is the world's largest alumina refinery. Albras, owned 51% by Hydro and 49% by the Japanese consortium NAAC (Nippon Amazon Aluminium Co. Ltd.) has an annual production capacity of 460,000 tonnes. The CAP project, owned 81% by Hydro and 19% by Dubal Holding LLC, is expected to have an initial annual capacity of 1.9 million tonnes of alumina. All operations are located in the state of Pará in Brazil.


Certain statements included within this announcement contain forward-looking information, including, without limitation, those relating to (a) forecasts, projections and estimates, (b) statements of management's plans, objectives and strategies for Hydro, such as planned expansions, investments or other projects, (c) targeted production volumes and costs, capacities or rates, start up costs, cost reductions and profit objectives, (d) various expectations about future developments in Hydro's markets, particularly prices, supply and demand and competition, (e) results of operations, (f) margins, (g) growth rates, (h) risk management, as well as (i) statements preceded by "expected", "scheduled", "targeted", "planned", "proposed", "intended" or similar statements.

Although we believe that the expectations reflected in such forward-looking statements are reasonable, these forward-looking statements are based on a number of assumptions and forecasts that, by their nature, involve risk and uncertainty. Various factors could cause our actual results to differ materially from those projected in a forward-looking statement or affect the extent to which a particular projection is realized. Factors that could cause these differences include, but are not limited to: our continued ability to reposition and restructure our upstream and downstream aluminium business; changes in availability and cost of energy and raw materials; global supply and demand for aluminium and aluminium products; world economic growth, including rates of inflation and industrial production; changes in the relative value of currencies and the value of commodity contracts; trends in Hydro's key markets and competition; and legislative, regulatory and political factors.

No assurance can be given that such expectations will prove to have been correct. Hydro disclaims any obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise.

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

Metro Mining raising $5.6M to complete Bauxite Hills DFS

Proactive Investors - July 16th, 2015

Metro Mining (ASX:MMI) is raising $5.6 million to fund the final stages of preparation for development of its Bauxite Hills Project at Cape York, Queensland.

Notably, this includes a fully underwritten 1 for 7 non-renounceable entitlement offer at $0.08 per share to raise approximately $3.6 million.

This follows on a placement on 15th July 2015 of 25 million shares at $0.08 to raise $2 million.

Following the capital raising, the company will be well funded with more than $8 million in cash on hand.

The rights issue is underwriting by joint lead managers Argonaut Capital Limited and GMP Securities Europe LLP.

Proceeds will be used to:

- Complete the Bauxite Hills Definitive Feasibility Study;
- Complete authorities and licenses to operate the Bauxite Hills Project (environment approvals, Native Title Agreements);
- Secure pre-commitments for mining and transhipment contractors as required;
- Exploration activities and business development;
- Proposed buy-back of shareholders' un-marketable parcels;
- Provide working capital.


Bauxite Hills remains on track for first production in the third quarter of 2016 at a rate of up to 2 million tonnes of direct shipping ore (DSO) per year.

Environmental permitting and DFS are on track for completion for Q4 2015

Simon Finnis, chief executive officer, said:

"We are delighted with the very strong support for the company from both Metro's longstanding shareholders and new investors.

"Completion of the Offer will strengthen Metro's balance sheet and allow Metro to be fully funded through the completion of Bauxite Hills' permitting and DFS."

Bauxite Hills Project

The Bauxite Hills Project is located about 95 kilometres north of Weipa on Queensland's Cape York Peninsula and five kilometres south-east of the port at Skardon River.

It has an Ore Reserve of 48.2 million tonnes with high grade total alumina of 50.2% and reactive silica of 6.3%, which is typical of Western Cape York bauxite deposits destined for export.

According to a CM Group Marketing Study the forecast quality and nature of the bauxite is suitable for export as DSO.

The DSO operation will allow development of a low capital and low operating cost mine which avoids a number of significant costs traditionally associated with production of a beneficiated bauxite product including costs for infrastructure, water and energy.

In addition, no tailings dams are required.

Proposed mine operations are simple using trucks and front end loaders with no blasting required.

Mine operations have been designed to have minimum impact on the environment. Topsoil and overburden will be stripped ahead of mining and placed on the mined out areas immediately after mining.

The bauxite will be hauled to the barge load-out facility at the Skardon River then transported by barge approximately 10 kilometres offshore where it will be transhipped onto bulk carriers for export to overseas customers.

Metro Mining is working through the necessary approval processes for the grant of the mining lease including Environmental, Native Title and access routes across the adjoining lease.

Project Economics

The Pre-Feasibility Study previously established compelling financial returns based on sustaining Capex of A$18.1 million, Average Operating Cost (FOB) is A$26.7/tonne and an Average Price Received (FOB) based on A$55.3/tonne.

This would amount to a healthy Average Cash Margin (FOB) of A$28.6/tonne and an even healthier Average Annual Net Profit After Tax of A$37.9 million.

Construction Capex for 2016 is estimated at just $27.4 million, which is modest relative to the forecast revenues from an increasing bauxite price and the strong project metrics.

Cape York

Adding further interest, the company holds 1,300 square kilometres of exploration permits in Cape York.

A comprehensive exploration program is planned for the second half of 2015.

This offers the opportunity to increase production by replicating the Bauxite Hills model.

Analysis

On completion of the capital raising, Metro Mining will be well funded to progress the DFS for the Bauxite Hills Project with more than $8 million in cash and no debt.

With a marketability study by CM Group indicating that the Bauxite Hill product is suitable for low temperature refining process used in over 80% of China's current refining capacity and potential offtake from major shareholder Xinfa Group of China, the project could have a clear path to production.

Share price catalysts ahead are significant for MMI:

- Definitive Feasibility Study Q3 2015
- Native Title Agreements Q4 2015
- Environmental Approvals Q4 2015
- Financing and funding Q4 2015/Q1 2016
- Construction and pre-strip Q2 2016/Q3 2016
- Production Q3 2016

MMI also enjoys strong support from Xinfa with an 8% stake.

Recent PFS metrics provided for a post-tax NPV of A$197 million and 88% IRR, truly outstanding parameters highlighting the quality of the project. With a mine life of 25+ years following recent reserve increase, this will ensure a long profitable production profile.

With positive bauxite market fundamentals with increasing demand and positive outlook, we continue to believe that MMI will be a stand out share market performer in 2015/16.

Norsk Hydro Reaches Longterm Power Contract For Neuss Aluminium Plant In Germany

RTT News - July 10th, 2015

Norwegian aluminium company Norsk Hydro ASA's (NHY,NHYDY.PK,NHYDY.PK) fully owned subsidiary, Hydro Aluminium Rolled Products GmbH, has secured a power contract with Axpo Trading AG, a Switzerland-based energy company with captive power production and international trading activity, totaling 0.9 TWh (100 MW) annually in the eight year period from 2018 to 2025.

The new power contract will replace parts of an existing combination of internal and external power arrangements entered into in 2012, supplying Hydro Neuss primary aluminium plant with a total of 2.2 TWh (250 MW) annually in the period from 2013 to 2017. In the period from 2018 to 2020, the remaining 1.3 TWh (150 MW) of the expiring power sourcing arrangement will be replaced by an internal power contract supplied by Hydro.

Rio Tinto re-opens Kitimat aluminium smelter after modernisaton

Digital Look - July 8th, 2015

Rio Tinto has re-opened its Kitimat aluminium smelter in Canada following an extensive modernisation, which the miner says will fundamentally transform its performance.

The company said the modernisation will increase production capacity by 48% and result in Kitimat becoming one of the lowest-cost smelters in the world. It is now focused on safely ramping up towards its annual production rate of 420,000 tonnes.

The modernised smelter, which was delivered in line with the revised schedule and budget, is powered exclusively by Rio Tinto's wholly-owned hydro power facility and uses the company's proprietary AP40 smelting technology which will effectively halve the smelter's overall emissions.

Aluminium chief executive Alf Barrios said: "At full production, Kitimat will be one of the most efficient, greenest and lowest-cost smelters in the world.

"Positioned in British Columbia on the west coast of Canada, Kitimat is well placed to serve rapidly growing demand for aluminium in the Asia-Pacific region and to serve the North American market."

Rio Tinto completes $3.3bn upgrade of Kitimat aluminium smelter in Canada

Mining Technology - July 8th, 2015

Rio Tinto Alcan has reopened its Kitimat aluminium smelter in Canada after completing its $3.3bn modernisation and is preparing its first shipments of metal from the facility.

According to the company, the smelter upgrade will increase production capacity by 48%.

The decision to increase production comes due to increasing demand for aluminium across the Asia Pacific region, as well as North America, Sky News reported.

Following the extensive modernisation the mining major plans to focus primarily on ramping up safely towards its production rate of 420,000t a year.

The new facility uses the company's AP40 smelting technology and will now result in reduction of greenhouse gases, fluorides, and hydrocarbons by 36% to 98%.

Rio Tinto aluminium chief executive Alf Barrios said: "The modernisation of Kitimat will fundamentally transform its performance, moving it from the fourth quartile to the first decile of the industry cost curve. At full-production, Kitimat will be one of the most efficient, greenest and lowest-cost smelters in the world.

"Positioned in British Columbia on the west coast of Canada, Kitimat is well placed to serve rapidly growing demand for aluminium in the Asia-Pacific region and to serve the North American market."

In March, Unifor Local 2301 opposed the project saying that the company was allowed by province to undertake its smelter modernisation without considering the harmful sulphur dioxide emissions from it that cause respiratory and heart problems.

ANTAM and Inalum Sign Memorandum of Understanding to Develop Smelter Grade Alumina (SGA) Plant

ANTAM - July 7th, 2015

PT ANTAM (Persero) Tbk (ASX: ATM; IDX: ANTM; ANTAM) and PT Indonesia Asahan Aluminium (Persero) (Inalum) are pleased to announce that they have signed Memorandum of Understanding (MoU) to develop smelter grade alumina (SGA) plant. The MoU was signed by ANTAM's President Director Tedy Badrujaman and Inalum's President Director Winardi on 3 July 2015 in Jakarta.

ANTAM's President Director Tedy Badrujaman said: "ANTAM's cooperation with Inalum is an important step in our undertaking to add value to Indonesia's vast bauxite reserves and to support the synergy between state-owned enterprises."

Inalum's President Director Winardi said: "Our partnership with ANTAM will support the development of the downstream and value added bauxite industry in Indonesia. The partnership will be a positive momentum to encourage business integration in the bauxite industry."

Under the MoU, ANTAM and Inalum plan to seek, evaluate and conduct selection process of prospective strategic partner in developing the SGA plant as well as selection of partnership scheme. ANTAM and Inalum also aim to create Joint Venture Company and conduct comprehensive study on legal, financial and technical–operational aspects.

Alba gets go-ahead for $3.5bn plant expansion

Trade Arabia - July 7th, 2015

Construction work on a sixth potline at Aluminium Bahrain (Alba) was given the go-ahead yesterday (July 6).

Chairing the weekly Cabinet meeting, His Royal Highness Prime Minister Prince Khalifa bin Salman Al Khalifa welcomed the landmark plan, which will boost Bahrain's standing as a major aluminium producer, said a report in the Gulf Daily News (GDN), our sister publication.

Deputy Premier and Mumtalakat Holding Company chairman Shaikh Khalid bin Abdulla Al Khalifa briefed the session about the $3.5-billion expansion.

A major bulk of $2.5 billion will be allotted to build the smelter and the remaining $1 billion will be pumped to build the fifth Alba energy plant.

Work on the 1.4-km smelter is expected to start in the first half of next year and become operational by late 2018. The mega project will boost the Alba annual production by an additional 514,000 tonnes per annum.

The Premier gave directives to fast-track the implementation of judicial processes, whether civil, commercial or Sharia, in co-ordination with relevant bodies.

He stressed the importance of incorporating technology, retracking procedures and using all available means to ensure the fast implementation of rulings and resolutions.

Garmco inks $55m expansion deal

Trade Arabia - July 6th, 2015

Garmco, a leading aluminium rolling mill, has entered into an agreement with Fives, an industrial equipment supplier, to build a new state of art cast house valued at $55 million at its facilities in Bahrain.

The re-melt project is an EPC (engineering, procurement and construction) turn-key project, which will enable Garmco to develop its metal recycling capability and lower the cost of metal casting.

The project will run for a duration of approximately 21 months, starting in September. The first stage has already commenced and is being managed internally by Garmco with the support of a local supplier. This stage consists of the construction of a scrap storage area and segregation unit. The new project, once complete, will enable Garmco to produce 120,000 tonnes of aluminium slabs.

Mahmood Al Soufi, chairman of Garmco, said, "We are delighted to launch this important expansion project in collaboration with Fives. This facility will have a number of advantages for Garmco. Importantly, it will create 50 new jobs, further bolstering Garmco's position as one of the most sizable employers in Bahrain, and will generate significant cost savings."

"This project, alongside one or two others, forms an integrated part of a three-year strategy and will contribute to the profitability and growth of the Company regionally and internationally. We look forward to the commencement of the next phase of work on the project and our continued collaboration with world-class partners as we further build Garmco's capacity and reach across global markets."

Jean-Baptiste Lucas, CEO of Garmco, said: "With the launch of this re-melt expansion project, we move the company even further down the path of efficiency – both in terms of the value and savings that can be extracted – but also in terms of furthering our commitment to sustainable operating and manufacturing practices. The project, once complete, will see Garmco better positioned than ever to deliver high quality, competitive products to our customers around the world."

Garmco is a global exporter of flat rolled aluminium products with a network of subsidiaries and associates companies spanning the Middle East, Asia, Far East, Australia, Europe and the US. The group employs over 830 staff worldwide (660 in Bahrain and 170 overseas), and has an annual turnover exceeding $450 million.

Aluminium Bahrain says Q2 production rises 3.1 percent

Yahoo News - July 6th, 2015

luminium Bahrain said on Monday its second-quarter output rose 3.1 percent despite challenging market conditions.

The company, which owns one of the largest smelters of the lightweight metal, said second-quarter production stood at 238,904 tonnes against 231,713 tonnes in the same 2014 period.

Alba's sales increased by 2,383 tonnes over the second quarter of 2014 reaching 232,193 tonnes, it said in a statement.

Increased output from China has pressured global aluminium prices, forcing major producers including United Company Rusal and Alcoa to idle capacity in an attempt to provide support in the face of a supply glut.

In June, Alba won government approval for a planned $3.5 billion expansion that will boost its output by more than 50 percent.

The company will release its full results on July 29.

Mineral production goes down in 2014-15

Business Standard - July 6th, 2015

Coal production fell to 541.2 million tonnes in 2014-15 from 563.1 mt in 2013-14

At a time when the government is pushing for 'Make in India', mineral production is estimated to have significantly decreased in 2014-15 compared with 2013-14.

Together, 12 major minerals in the fuel and metallic category, under direct control of the Union government, showed a 11 per cent fall. These being coal, lignite, petroleum, natural gas, bauxite, chromite, copper, gold, iron ore, manganese, zinc and lead.

Coal production fell to 541.2 million tonnes in 2014-15 from 563.1 mt in 2013-14. Bauxite output is estimated to have decreased to 20.2 mt from 21.6 mt in 2013-14. Iron ore, imperative for the steel industry, which is facing a global slowdown, fell 15.3 per cent, after rising 12 per cent in 2013-14.

Chromite, copper, manganese, zinc and lead had a big production fall of 29 per cent, 19 per cent, 16 per cent, 12 per cent and eight per cent, respectively. Barring lead, the other four, in that order, had in 2013-14 risen by 0.7 per cent, 12.3 per cent, 10.5 per cent and 5.4 per cent. In value terms, lignite, chromite and gold showed a sharper decline than their volumes, indicating a fall in prices. For coal, petroleum and natural gas, the decline in value was same to that in volumes. "The decline in mineral production (in FY15) is largely due to stagnant growth in end-use industries. For this reason, the decline is across a broad range of commodities," said Kameswara Rao, leader (energy, utilities and mining), PricewaterhouseCoopers.

Global mineral consumption was less the year before, with China leading the reverse charge. Also, India's raw material prices did not decrease in equal proportion to international prices, making our industries less competitive. As a result, finished products were imported in huge amounts. "The competitiveness of end-use products is impacted, to, resulting in higher imports of final products and, to a lesser extent, raw materials," added Rao.

Chinese aluminum producers will have to cut production: Rusal exec

The Australian - July 4th, 2015

Chinese aluminium smelters will be forced to reduce production levels because they cannot continue to operate with such low global market prices, according to the world's largest aluminium producer.

Chinese smelters "expected the price to recover but it's already [been] more than six months. The price is very low and these producers are suffering from losses, so they have to start shutting down," said Oleg Mukhamedshin, deputy chief executive of United Rusal Co., in an interview this week.

Chinese producers of aluminium have been criticised for pumping out vast quantities of the metal even though prices have plunged 6 per cent since the beginning of the year, and have been hovering near six-year lows in recent weeks. Critics such as Rusal say a range of government subsidies keep unprofitable Chinese producers afloat, even as smelters in the West are cutting back.

"The issue is that we still can see that certain production in China is subsidised," he said. "That's why we think 50 per cent of Chinese producers are still loss-making."

Mr Mukhamedshin said the prices seem to have reached a bottom, and he expects all-in prices to get back to around $US1,950 or $US2,000 ($A2,555 or $A2,621) a metric tonne by the fourth quarter. The current all-in price is between $US1,800 to $US1,850 a tonne.

Furthermore, demand is "very strong and growing by 6.5 per cent to 7 per cent every year," he said, so Rusal is also expecting an aluminium deficit in 2016 and 2017.

But aluminium producers in the West want a sustained deficit to lift prices back to more profitable levels, which won't come unless China reduces production.

Earlier this week, Alcoa, a heavyweight producer in the aluminium industry, permanently closed its Pocos de Caldas smelter in Brazil, at a loss of 96,000 metric tonnes. The firm blamed "market conditions" and said the Pocos smelter was high-cost.

Last month, the trade body European Aluminium said Chinese exports were damaging to European producers.

"Chinese exports of aluminium products to Europe have increased by almost 30 per cent since the beginning of 2015, posing an unprecedented threat to the European aluminium industry," it said in a press release.

Problems with the build-up of aluminium stocks in warehouses authorised by the London Metal Exchange are also starting to subside, and companies are getting hold of more metal. That adds to the downward pressure on prices. Since the beginning of the year, stocks held at warehouses authorised by the LME have declined by about 15 per cent, to 3.56 million metric tonnes.

Chinese smelters may face additional pressure as the Chinese government seeks to clamp down on heavy polluters, including coal-fired plants and aluminium smelters, he said.

Rusal itself is still considering shutting another 200,000 tonnes of production and "will make a decision this year," he said.

Analysts say aluminium prices aren't going to recover soon until China takes action.

"Unless the Chinese government changes [something]...this will probably continue," said Daniel Briesemann, a metals analyst at Commerzbank. "[But] I think at some point the pain will be too big, it will be too painful to continue operating."

Guinea eyes exporting 40 mln tons of bauxite by 2024

Shanghai Daily - July 2nd, 2015

Guinea plans to increase its bauxite export from the current 17 million tons to 40 million tons per year by the year 2024, the country's Mines and Geology Minister Kerfalla Yansane said Wednesday.

In this regard, the Guinean government and several mining companies operating in the country recently signed in Paris various agreements regarding joint utilization of mining infrastructures such as railway lines and ports, he said.

The minister said the multilateral agreements will provide opportunities for new investments of up to 7.3 billion U.S. dollars in Guinea's mining sector.

"With these agreements, the Guinean government under the leadership of President Alpha Conde will lay a strong foundation for the development of the country's mining sector," Yansane said.

Guinea which is the world's largest bauxite producer, has proven bauxite reserves of 18 billion tons. It is estimated that the country could have reserves of up to 25 billion tons.

New Aluminium Smelter Could Be On The Way

Grapevine - July 2nd, 2015

A partnership between a Chinese and an Icelandic company has been struck to build an aluminium smelter in north Iceland.

Kjarninn reports that Klappir Development ehf. and China Nonferrous Metal Industry's Foreign Engineering and Construction (NFC) have signed an agreement to build a smelter in Hafursstaðir, in Skagabyggð, north Iceland. The smelter will be capable of producing 120,000 tonnes of aluminium every year, if completed.

Prime Minister Sigmundur Davíð Gunnlaugsson and Chinese ambassador to Iceland Zhang Weidong were present at the signing, which took place at the Ministerial House in Reykjavík.

A statement from the two companies says that they plan to cooperate in both the funding and managing of the smelter. The total cost of construction is estimated to be about 100 billion ISK, or 780 million USD. They say 800 temporary jobs will be created for the smelter's construction, with 240 more permanent positions once the smelter is complete.

The electricity needed to power such a smelter is not yet available, as other heavy industry projects in Iceland that are farther along in production find themselves lacking power sources as well. The Icelandic Environment Association has also stated they do not want any more smelters built, but the municipality of Skagabyggð has already expressed their willingness to have the project.

Alcoa closes aluminium smelter

Just Auto - July 1st, 2015

Alcoa permanently closed its Poços de Caldas primary aluminium smelter in Brazil on 30 June.

The smelter has been furloughed since May 2014 and the underlying market conditions that led to that move have not improved.

"The closure of [Poços] permanently removes a high cost smelting facility from the Alcoa system and is another step in creating a more profitable primary metals business," said the supplier's global primary products president Bob Wilt.

Total global smelting capacity has been reduced by 96,000 metric tonnes, to 3.4m. The Poços mine, refinery, aluminium powder plant and casthouse remain in operation.

Alcoa expects to book restructuring-related charges in second quarter 2015 of between US$100m and $110m after tax, or $.08 to $.09 per share, of which approximately 60% is non cash.

ALRO Slatina continues investment in modernisation • In its 50 years of life, the company has produced almost 10 M tons of aluminium

Nine O`Clock - June 30th, 2015

The Slatina-based plant was built 50 years ago and, all this time, has produced over 9.5 M tons of aluminium.

The highest production was recorded in 2008 – 265,000 tons of primary aluminium. The crisis caused a notable decrease of production, but, in the last 2-3 years, the company has managed to stabilise its production at a rate of almost 200,000 tons.

According to Gheorghe Dobra, CEO of the company, Alro will continue the modernisation of operations, with a budget of USD 59 M for 2015. The effort is aimed at growing the cost-effectiveness of the unit and its recycling capacities, while also expanding the range of products. In the last ten years, as a result of investment worth over USD 500 M, of which 100 M in environment protection features, the company ahs upgraded its equipment trying to remain competitive on international markets as well as in order to fully comply with existing environment protection regulations.

In 2005, Alro bought Alum Tulcea, in 2006 it merged with Alprom Slatina and then purchased a bauxite mine in Sierra Leone, making it a vertically-integrated group, Dobra stresses. The only thing missing from the equation is the energy production part, as energy now accounts for 35% of the cost per ton of aluminium. As a matter of fact, the company had major issues with energy in the last four years because of the cost of renewable energy and co-generation fee, paying a total of 160 M euro. 'In the last four years we have been through a very difficult time because of the eco-fees, we have paid EUR 160 M. Now, after the reduction of the green certificate quota, we are on level playing field with our competitors in Europe', Dobra also said during a meeting marking 50 years of Alro.

Alro is the largest aluminium smelter in Central and Eastern Europe

Alro is the largest aluminium smelter in Central and Eastern Europe. Alro is today one of Romania's largest companies with an important contribution to the local and national economic development. The company is part of the international industrial and investment group Vimetco NV, which operates in the aluminium industry. Alro's shares are traded on the Bucharest Stock Exchange.

Alro's primary aluminium facilities are located in Slatina and currently comprise a smelter and processing facilities, including a cast house, hot and cold rolling mills and an extrusion shop. The company also owns Alum S.A., an alumina refinery based in Tulcea, which has currently suspended production for a modernisation programme.

Alro's production processes and products have been certified in accordance with international standards ISO 9001, ISO 14001 and ISO 18001 (OHSAS 18001). In January 2006 the company obtained Romania's Integrated Environmental Authorization certificate.

Alro's customers consist of end users and metal traders both within Romania and beyond. More than 80% of Alro's output is sold on the international market through the London Metal Exchange, and based on direct contracts with long-term customers in 25 countries of the world. In fact, Alro products are sold directly throughout the European Union, in Italy, Greece, Austria and Hungary, as well as Turkey, the Balkan countries and the United States.

Rio Tinto aluminium smelter in New Zealand faces possible power crunch

The Economic Times - June 30th, 2015

Rio Tinto's aluminium smelter in New Zealand, which has suffered losses in two of the last three years, faces a July 1 deadline to decide whether to extend its power supply contract with utility Meridian Energy .

The decision could determine the future of the 350,000-tonne-per-year smelter, which is the country's single biggest energy consumer, beyond 2017 following a battle by the plant's owners to slash its power costs.

The smelter has struggled with weak aluminium prices and a high New Zealand dollar for several years, and has been seeking cheaper power, even though it returned to an underlying profit of NZ$56 million in 2014 after two years of losses.

The plant was given a NZ$30 million subsidy in 2013 by the government to bridge the price gap between Meridian and the plant's owners, New Zealand Aluminium Smelters (NZAS), which is a joint venture between Rio Tinto and Sumitomo Chemicals.

NZAS also has an option later in the year to reduce the amount of power it buys from Meridian by about 30 percent.

The two sides have been holding talks on the issues, but NZAS declined to comment, while a Meridian spokesman said it did not know what the decision would be.

In April, NZAS Chief Executive Gretta Stephens said in a statement the plant faced "an extremely tough operating environment here in New Zealand."

Some analysts said that the likelihood of the smelter remaining open had increased after the local dollar had fallen 12.6 percent so far this year, improving the smelter's export returns and helping to offset a renewed weakness in aluminium prices which are hovering around one year lows.

"With the lower New Zealand dollar, most expect NZAS will seek to maintain power contracts, with some potential to gain some supply from another generator," said analyst Craig Stent at Harbour Asset Management.

The smelter is one a few worldwide making high-quality aluminium used in plane construction and electronics, and the costs of closing the plant and cleaning up the site has been estimated at hundreds of millions of dollars.

Longer term, the New Zealand power sector regulator is looking at reforms to setting transmission charges which might deliver savings of as much as NZ$50 million a year.

The smelter, close to the southern city of Invercargill, consumes about 13 percent of New Zealand's power output and a decision to close would cause a glut, sending prices lower in a market which has seen scant growth.