AluNews - March 2015

Brazil Aluminium - São Luís (Alumar) Facility

noodls - March 30th, 2015

BHP Billiton today announced that South32 has agreed with Alcoa, its joint venture partner and operator of the Alumar aluminium smelter, to suspend potline I from 15 April 2015. This follows the suspensions of potlines II and III in the prior financial year due to market conditions. All three potlines have been and will continue to be subject to ongoing review, having regard to market conditions.

The temporary suspension of the smelter does not impact operations at the Alumar refinery or Mineração Rio do Norte bauxite mine.

The decision to suspend production at the Alumar smelter will not have a material financial impact for South32 or BHP Billiton.

South32 Brazil Aluminium

South32's Brazil Aluminium business comprises a 14.8 per cent interest in the Mineração Rio do Norte open-cut bauxite mine (MRN Mine), a 36 per cent interest in the Alumar alumina refinery and a 40 per cent interest in the Alumar smelter. ?

Norsk Hydro signs power contract for pilot plant with Axpo Trading

Thomson Reuters - March 27th, 2015

Norsk Hydro, one of the world's largest aluminium producers, has signed a long-term power contract with Switzerland's Axpo Trading for a pilot plant in Norway, it said on Friday.

"The contract covers a fourth of the Karmøy pilot plant's power needs in the period 2021-2030," Hydro said in a statement.

It includes annual supply of 0.25 terrawatt hours (TWh) over 10 years from the beginning of 2021, and a total delivery of 2.5 TWh.

The firm has already signed a contract with Lyse Produksjon for 330 GWh annually, a third of the plant's power needs, for the period 2031-2040.

The Karmoey pilot plant in Norway is for full-scale industrial testing of Hydro's so-called HAL4e technology and is expected to have an annual aliminium production capacity of 75,000 tonnes and to cost around 3.9 billion Norwegian crowns ($514.51 mln).

Australian Bauxite is on a roll with development of Campbell Town mining centre

The Sydney Morning Herald - March 27th, 2015

What's new?

Australian Bauxite (ABX) has been swift in developing its first bauxite mining centre near Campbell Town in Tasmania. Australian Bauxite mobilised the construction contractor to the site in December 2014 and was producing its first bauxite within three months.

The new Campbell Town mining centre comprises three bauxite deposits, in Bald Hill, Fingal Rail and Nile. First mining is under way at the Bald Hill deposit, where Australian Bauxite is extracting direct shipping ore (DSO) quality bauxite. The Campbell Town mining centre was developed within a modest capital budget of $5 million and was completed on schedule.

The Bald Hill bauxite deposit hosts a resource of 1.6 million tonnes, with 1.18 million in the indicated category and 0.42 inferred. The Campbell Town mining centre resource totals 3.51 million tonnes categorised into indicated of 1.67 million tonnes and inferred, 1.84 million tonnes. The resource will support an initial mine life of 10 years.

Australian Bauxite's mining plan will see the Bald Hill deposit mined first, followed by the Fingal Rail and Nile deposits. All three deposits appear to host extensions to the known deposit. In the first month of operations at the Campbell Town mining centre, bauxite mining and screening exceeded the 500,000 tonnes annual capacity, hitting a run rate of 900,000 tonnes.

During ramp-up, rail shipments will be a modest 1100 tonnes of DSO bauxite per day, increasing to about 2000 tonnes a day later in the year. Bauxite shipments to customers are expected to begin before the end of the June quarter 2015.

The quality of the DSO bauxite will see mining and screening operating costs come in below the modelled number of $8 a tonne free on board. Australian Bauxite was able to remove an ore crusher from the processing plant, which we estimate will save around $1.50 a tonne in operating costs. Not requiring a crusher in the process flow will have saved, we estimate, up to $1 million in development costs as well.

Australian Bauxite is debt free and had a discretionary cash reserve of $3.5 million.

Outlook

With operations under way at Campbell Town, Australian Bauxite is turning greater attention to its DL-130 bauxite deposit, also in Tasmania. The DL-130 project will become Australian Bauxite's second mining centre, with operations expected to start in 2016. What is important about the DL-130 bauxite deposit is the fact that it is a Campbell Town twin and is closer to the Bell Bay Port.

Tasmania has been the focus of attention as the first production centres come to life. With this process now well under way, Australian Bauxite is evaluating the best way forward for its mainland bauxite deposits in Binjour, Inverell-Guyra and the Goulburn deposits.

Overall, Australian Bauxite is developing its suite of bauxite assets in a manner that is adding shareholder value. Going forward, Australian Bauxite will be well leveraged to any improvement in the bauxite price.

Price

Since December 2014, Australian Bauxite's share price has been trading in a broad descending triangle, which could indicate volatility to the downside to complete the pattern. A recent surge in the price has taken out the resistance around the 29 to 30 cent region to break the descending pattern. The price has moved to the next resistance level of 32 cents, and may now have to consolidate to resist any price weakness.

Worth buying?

Based on our estimated operating costs, the Campbell Town mining centre will generate robust operating margins. Amplifying the numbers by the weak Australian Dollar and a bauxite price that is resisting weakness could see a major rerating of Australian Bauxite.

Throw into the mix mining from DL-130 next year and the bauxite assets held along the east coast of Australia; this places Australian Bauxite in a strong position to deliver future value.

Disclosure: Fat Prophets, and interests associated with the company, hold shares in Australian Bauxite.

UC Rusal begins bauxite mining

The Gleaner - March 25th, 2015

Prime Minister Portia Simpson Miller says bauxite mining has resumed in Nain, St Elizabeth.

According to Simpson Miller, Russian aluminium company, UC RUSAL began extraction of bauxite at Alpart on Monday.

The Prime Minister says UC RUSAL has secured all the required permits for its operations.

She says haulage of bauxite from the plant to the port will commence by the end of April, 2015.

Prime Minister Portia Simpson Miller was speaking in Parliament yesterday during her contribution to the 2015 Budget debate.

Aluminium firm Rusal says considering more smelter shutdowns

The Economic Times - March 25th, 2015

Top global aluminium producer United Company Rusal is looking at shutting down more smelters, Deputy CEO Oleg Mukhamedshin told reporters on Wednesday, in order to keep supply under control.

The company has cut its capacity by 800,000 tonnes in the past two years by shutting down smelters, said Mukhamedshin, who is also the director for strategy, business development and financial markets.

Alpart resumes bauxite mining

Jamaica Observer - March 24th, 2015

KINGSTON, Jamaica – Prime Minister Portia Simpson Miller announced a short while ago that the Russian company UC RUSAL yesterday commenced the mining and processing of bauxite at the Alpart refinery at Nain in St Elizabeth.

So far, the company has employed some 40 people and it has given its commitment to employ another 70 people by the end of April, the prime minister said.

Simpson Miller made the disclosure while addressing the House of Representatives in her budget presentation Tuesday.

The haulage of the bauxite from the factory to the ports will take place during April.

Aziana Limited to sell Manantenina Bauxite Project to Indian buyer

Proactive Investors Australia Pty Ltd - March 23th, 2015

Aziana Limited (ASX:AZK) has signed a conditional agreement to sell its Manantenina Bauxite Project in Madagascar for a total consideration of US$2 million (A$2.56 million) to India's Thankys Exports Pvt. Ltd.

The non-binding agreement includes a royalty of US$0.50 per tonne of bauxite mined.

Manantenina currently has a resource of 10.09 million tonnes. Further high quality bauxite has been identified over more than 80 square kilometres of the project but is as yet unquantified.

Thankys exports gibbsiferous bauxite from their existing mines in India and has been involved in the exploration for and development of bauxite deposits since 1980.

Noise fears over Bridgnorth factory expansion plan

Shropshire Star - March 19th, 2015

Multi-million pound plans to expand a Bridgnorth factory will create more noise for residents, it has been claimed.

People living close to the Bridgnorth Aluminium plant off Stourbridge Road also fear a furnace stack planned for the site would become an eyesore. A number of residents raised their concerns at a meeting of Bridgnorth Town Council, where the plans were discussed by councillors.

The expansion of Bridgnorth Aluminium Ltd will create 65 jobs through a £40 million investment. The plans include building a new aluminium strip production line.

Sian Bladen said: "Over recent years Bridgnorth Aluminium has gradually increased its footprint and this has caused issues with residents as noise has escalated along with its industrial landscape creating a significant blight on the environment."

Mayor councillor Edward Marshall said he supported the application after seeing what it did for the community, but agreed to ask Shropshire Council to consider the comments made by the residents.

Shropshire Council will make a decision on the plans by May 15.

India approves allocation of bauxite block to Odisha Mining

Thomson Reuters - March 17th, 2015

India has approved a proposal from Odisha to allocate a bauxite deposit with reserves of over 150 million tonnes to the state mining company, a move likely to help companies like Sesa Sterlite Ltd (SESA.NS) that are banking on the raw material to fire their aluminium smelters in the state.

In a parliament response on Tuesday, junior steel and mines minister Vishnu Deo Sai said the proposal to allocate the Karlapat bauxite deposit to Odisha Mining Corp (OMC) had been approved and conveyed to the state government.

OMC, which has bauxite mining joint ventures with companies including Vedanta and Hindalco Industries Ltd (HALC.NS), last month scrapped its joint venture with global mining giant Rio Tinto (RIO.AX) (RIO.L) to focus its efforts on mining independently.

A senior Sesa Sterlite executive, who did not want to be named, said the approval would lead to more bauxite availability within the state which was good news for the aluminium industry as a whole.

Bauxite from Gove gives Rio plant more options

Gladstone Observer - March 17th, 2015

BAUXITE from Gove will be added to the mix at Rio Tinto Alcan's Yarwun site.

Acting general manager Greg Bacon said the majority of bauxite, the raw material that makes alumina, will still come from their Weipa site, but one million of the seven million tonnes would come from Gove.

This year the company has also started exporting a raw material called alumina hydrate, which is used in fertilisers, paints, inks and glass manufacturing.

Mr Bacon said this would make it easier and more cost effective for the plant to manage its maintenance.

Alumina hydrate is made before the end of the alumina refining, which means the whole process doesn't have to stop if maintenance is needed in the later stages.

He said up to 300,000 tonnes of hydrate would be exported this year, compared to the three million tonnes of alumina.

"It's a good opportunity for us," he said.

"We can reduce our energy consumption on site so we aren't having to fire that up in the calcines and it goes straight out to the customer in the hydrated form."

Rusal raises China aluminium exports with Australian government

Mining Weekly - March 16th, 2015

Top global aluminium producer Rusal said it has 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.

John Hannagan, chairman of Rusal Australia, and a director of the Australian Aluminium Council, said he had alerted the Australian government to China's rising exports.

"I have contacted both Customs and the Trade minister's office seeking to have the matter of China semis ... put on the agenda of the next meeting of the World Customs Organisation," Hannagan told Reuters.

China is the world's top producer and consumer of aluminium, as well as semis, semi-manufactured shapes used in everything from window frames to beer cans.

Exports of primary aluminium ingots attract heavy export duties in China, but producers have been sidestepping the tax and other costs by ramping up shipments of lightly processed metal, which is often remelted at its destination.

Swelling semis exports have seeped into Asia, hurting the export markets of regional producers such as Australia, as well putting downard pressure on prices and premiums - the surcharge paid to obtain physical metal.

China's exports of aluminium products grew about 19% last year, a trend expected to continue in 2015, given Chinese domestic prices compared with international markets.

Benchmark London Metal Exchange aluminium prices have fallen around 15% in the past three months while high global aluminium premiums - the delivery cost to obtain metal - have begun to crumble.

China's primary aluminium exports attract a 15% tariff on top of a 17% VAT, however exports of semi-manufactured shapes don't attract the tariff, and are eligible for a 13% VAT refund, making them more competitive.

The World Customs Organisation is a Brussels-based body that represents 179 customs administrations governing around 98 percent of world trade. It is involved in the definition of goods for the application of tariffs, according to its website.

Alba potline control systems upgraded

Trade Arabia - March 15th, 2015

Aluminium Bahrain (Alba), a leading aluminium smelter in the world, has completed the upgrade of its potline control systems for Reduction Lines 4 and 5 with the Alpsys system.

The Alpsys system includes enhanced control features and fast monitoring to maintain optimum pot parameters which will improve performance and also enhance safety, Alba said.

Alba's acting director for potlines Abdulla Habib said: "Alba continues to push the limits on improving operational performance. The upgrade to the new Alpsys system is a major milestone and will improve productivity and safety. I congratulate the teams for completing the project on time and below budget."

CNA plans investment in China aluminium mining

The Business Times - March 12th, 2015

CNA Group has signed a non-binding memorandum of understanding to take a 5 per cent stake in a bauxite-processing plant and mine in Shanxi, China.

The value of the investment will be determined after due diligence, the company said on Thursday.

Michael Ong, chief executive of CNA, a building management systems provider, described the move as a "new strategic direction to develop revenue streams from investments to balance cyclical project revenues".

The agreement is with LiuLinxian Senzetengfei Aluminium Industry Co, which will provide engineering expertise and services to operate the business within China.

The mine has estimated reserves of S$600 million and the plant is already generating income of about S$10 million a year, CNA said. The investment, if completed, will have a material impact on 2015 results, the company added.

CNA shares traded at 2.2 Singapore cents on Thursday after the announcement.

Rusal Starts Bauxite Mining in Guyana

Engineering & Mining Journal - March 12th, 2015

UC Rusal commenced mining operations at its $25 million Kurubuka-22 project, which is located near Kurubuka in Guyana. The bauxite deposit is estimated at 30 million metric tons (mt). Development began in 2013 with construction of the mine, infrastructure development, building of access roads, barge loading facilities at the Berbice River, and a factory that allows the maintenance of a full production cycle from mining to dry bauxite barge loading. Optimization of logistics costs has been reached thanks to a reduction of transportation distance from the mine to a sea reloading point.

President of Guyana Donald Ramotar and Vladislav Soloviev, CEO of Rusal, attended the opening ceremony. "The development of the Kurubuka-22 mine is in line with Rusal's strategy to strengthen vertical integration and secure aluminum production through in-house raw materials supply. The start of operations at the new mine will allow Rusal to supply its refineries with high-quality bauxite in the long run," said Soloviev.

Rusal has been operating in Guyana since 2004 and owns a 90% stake in the Bauxite Co. of Guyana. The company's annual bauxite production capacity is 1.7 million mt. Most of it is shipped to the Nikolaev refinery in Ukraine and the Aughinish refinery in Ireland.

Alcoa smelting, refining review raises fears of Australian closures

The Sydney Morning Herald - March 9th, 2015

A global review of smelting and refining capacity by aluminium giant Alcoa has raised fears of plant closures and hundreds of potential job cuts in Australia.

Alcoa on Friday said it would review 500,000 tonnes a year of smelting capacity and 2.8 million tonnes of refining capacity "for possible curtailment or divestiture".

Some 14 per cent of the US company's global smelting capacity is affected and 16 per cent of its refining capacity.

Potential actions include full shutowns of plants, curtailment of production or sales, with decisions to be announced as reviews are completed.

Since 2007 Aloca has already curtailed, closed or sold 1.3 million tonnes a year of its highest cost smelting capacity since 2007, representing 31 per cent of its total capacity.

In Australia, Alcoa's partner Alumina Ltd noted on Monday that the review does not include the companies' jointly owned Portland smelter in Victoria.

But Alcoa's Kwinana refinery in Western Australia is seen as vulnerable, benbg reportedly the least profitable of the US company's three plants in the state. The other plants are at Pinjarra and Wagerup.

Alcoa's president of global primary products, Bob Wilt, said the company was aiming to create a lower cost business.

"Ou goral is to move down the global aluminum cost curve to the 38th percentile and the global alumina cost curve to the 21st percentile by 2016," he said in a statement in the US on Friday.

"The results from this review will help achieve those goals. We'll take action only after a thorough strategic review to determine the best outcome for our shareholders and in consultation with our stakeholders."

Alcoa considers cutting more smelting, refining capacity

MarketWatch, Inc. - March 6th, 2015

Alcoa Inc. Friday said it would look at cutting or selling up to 14% of its global smelting capacity, as the world's biggest aluminum producer by revenue continues to fight sluggish prices and an oversupplied global market.

New York-based Alcoa AA, +0.70% said it would review 500,000 tons of smelting capacity and 2.8 million tons of refining capacity for "possible curtailment or divestiture." Since 2007, the company has already closed or sold 1.3 million tons, or 31%, of its "highest cost global smelting capacity."

Alcoa has turned itself around recently by investing in profitable auto and aerospace markets. Last year's operating results were the best full year since 2008, and it posted a 2014 net profit of $268 million, compared with a loss of $2.3 billion in 2013.

However, the company remains weighed down by sluggish prices for raw aluminum and tepid global economic growth, while facing an oversupplied market made worse by rising Chinese exports.

After climbing to above $2,000 a ton last year, prices for raw aluminum on the London Metal Exchange have fallen back to around $1,800 a ton. And Alcoa's stock fell almost 4% one day this week after Bank of America Merrill Lynch reduced its rating to neutral from buy, citing lower aluminum prices, partly because of Chinese exports.

Alcoa may close or sell some aluminum plants to cut costs

Trib Total Media, Inc. - March 6th, 2015

Alcoa Inc. may pare its aluminium capacity by closing or selling plants in a move to lower costs as prices are falling and production in China is growing.

New York-based Alcoa, which has an operations base and research center in Pittsburgh, said it will review high-cost operations across its global system of production facilities over the next 12 months, as part of the long-running effort to make its commodity aluminum business more competitive.

The company said it is contemplating cutting its smelting capacity by 14 percent and reducing refining capacity by 16 percent. Aluminum production involves refining bauxite into alumina, and smelting alumina to produce aluminum.

"Alcoa continues to take decisive action, transforming its upstream portfolio to create a lower cost, globally competitive commodity business," Bob Wilt, president of Alcoa's global primary products, said in a statement.

The company, which is working to diversify its business into producing higher-value aluminum parts for automotive and aerospace markets, has idled about 19 percent of smelting capacity and 7 percent of its alumina refining capacity. It started cost-reduction initiatives in 2010.

Alcoa owns or has interests in 20 smelters in the United States, Canada, Brazil, Australia, Norway, Iceland, Spain and Saudi Arabia. It owns or has interests in nine refineries in the United States, Brazil, Suriname, Spain, Australia and Saudi Arabia.

Revenue from its production, or upstream, operations accounted for 43 percent of the company's total revenue in 2014.

The price of aluminum for delivery in three months dropped to a seven-month low in January on the London Metal Exchange. China's aluminum production rose 9.1 percent last year.

Alcoa said the review will consider several alternatives for reducing capacity, including partial or full plant curtailments, permanent shutdowns and divestitures. Since 2007, it has curtailed, closed or sold 31 percent of its highest-cost smelting capacity.

Alcoa stock closed Friday at $14.48 a share, up 10 cents, or 0.7 percent.

"I was surprised at the magnitude" of the potential capacity cuts, said John Tumazos, an analyst with Very Independent Research in Holmdel, N.J.

There's a chance Alcoa could cut production too much, he said. Demand for aluminum is increasing from automakers, such as Ford Motor Co., which is building an all-aluminum body pickup.

And Chinese aluminum makers may have to raise prices because energy costs — key to production of the metal — are rising as the country tries to reduce pollution.

"I think the aluminum business is getting better," he said. "But if they (Alcoa) tighten the market and earn an extra profit, they won't cry."

US: Kobe Steel considers US$835m aluminium plant

Just Auto - March 5th, 2015

Kobe Steel is considering setting up a JPY100bn (US$835m) aluminium plant in the US as it looks to increase sales to Japanese automakers that are operating in North America.

Norsk Hydro to up aluminium output at Norway's Sunndal plant

Thomson Reuters - March 2nd, 2015

Norsk Hydro will increase the annual primary aluminium production capacity at its Sunndal plant in Norway by 35,000 tonnes by the middle of this year, the aluminium producer said on Monday.

The firm had previously said it would raise production if market conditions were satisfactory. (Reporting by Stine Jacobsen, editing by Terje Solsvik)

National Aluminium plans RO7mn capacity expansion

Muscat Daily - March 1st, 2015

National Aluminium Products Co (Napco) is planning a RO7mn capacity expansion to substantially increase volumes and increase market share.

The company will install two additional extrusions presses in a phased manner this year and also set up a power coating plant. The company board has approved the capacity expansion in line with its business strategy.

"The estimated cost of the expansion will be approximately RO7mn, including related civil construction. With the strategy devised, upon achievement, the company expects a substantial increase in volume and profitability post expansion," Napco said in yearly financial report submitted to the Muscat Securities Market on Sunday.

The company said it will focus on broadening local market share as well as more exports to GCC, African and Asian countries with consistent quality, improved service and concerted marketing efforts. "The expansion programme undertaken will enable the company to capture much larger volumes and spur its growth and sustain profits in the coming years."

With a plant in the Rusayl Industrial Area, Napco is one of the leading extruders of aluminium profiles in the GCC. It has an annual production capacity is 18,000MT, with two state-of-the-art extrusion presses.

Napco said regional markets, especially GCC, remain promising for future growth with expansion of infrastructure projects in general and the building and construction industry in particular. "The company will continue to explore opportunities for growth in its traditional and new markets as the prospects for the aluminium extrusion industry look optimistic."

It added that installed capacity in the region is expected to increase further in 2015.

The company posted total revenues of RO19.4mn for the year ended December 31, 2014, an increase of four per cent over the previous year. Net profit, however, dropped to RO701,000 from RO1.18mn.

"Net profit decreased primarily due to pressure on operating margins resulting from increased input costs, as a result of higher raw material prices and increased wage bill. Increased competitive supplies from abroad and a price-sensitive market," also hurt full-year profits, the company said.

ALUMINIUM BAHRAIN BSCC (ALBH)

4-Traders - February 25th, 2015

Aluminium Bahrain B.S.C. (Alba), a leading aluminium smelter in the world, successfully completed the integration of an additional Line 5 Rectiformer (R50).

The Rectiformer is a critical piece of power equipment used in the smelting process. The addition of R50 will further enhance Alba's ability to meet future creep capacity objectives as well as provide added backup protection.

The entire project - managed by Alba Power Department -- was achieved with a remarkable 223,000 man-hours of work without a single LTI, thus strengthening Alba's reputation one of the leaders of workplace safety. The project was successful executed in 22 months without impacting metal production.

Speaking on this achievement, Alba's Director for Power, Amin Sultan said:

"Alba is committed to remain a globally competitive smelter, and continually focusses on lean management and operational efficiency. Completion of this project is a very good example of coordinated efforts of interdepartmental teams and I applaud their efforts for the emphasis placed on safety."