AluNews - February 2016

Dubai's Masharie to Ramp Up Aluminium Production

Aluminium Insider - February 29th, 2016

Dubai Investments' (DI) private equity arm Masharie announced that it would increase extruded aluminium production by 10,000 metric tons per year to meet the demands of the downstream industries, transportation and electrical sectors in the United Arab Emirates and the Persian Gulf region.

Masharie subsidiary Emirates Extrusion Factory (EEF) will increase output of extruded aluminium as well, as it will commission its third extrusion line this summer, which will boost output by 6,000 metric tons per year.

White Aluminium Extrusion (WAE), another Masharie subsidiary, is planning to use technology imported from Italy to build an anodizing plant with a capacity of 4,800 metric tons per annum. The plant is expected to commence production in the second quarter of this year. Increases in downstream demand and construction in the region have prompted the move.

EEF and WAE, as an exporter of roughly seventy percent of its product, is seeking to break into new markets regionally, in the Persian Gulf region, and on the African continent as well. EEF and WAE are at present conducting business more than 26 countries across the Persian Gulf, Africa, Asia and Europe, with key markets being Oman, Saudi Arabia, Kuwait, Jordan, Morocco, Algeria, Tunisia, Ethiopia, among others.

"Emirates Extrusion Factory and White Aluminum Extrusion are building on its market leadership as demand surges for high-quality aluminum systems for architectural as well as downstream applications," said Managing director of EEF and WAE Khalfan Al-Suwaidi. "We will continue to focus on exports in the medium to long-term as there is a huge demand for our products in growing markets across the GCC, Africa, Middle East and the Levant. A spurt in construction has put added demand for aluminum profiles at our plants."

"There have been significant investments in the transportation, electrical and industrial sectors across GCC countries, and there is increasing demand for aluminum products for these sectors," he continued.

DI unit eyes record extruded aluminium production

Trade Arabia - February 27th, 2016

Masharie, the private equity arm of Dubai Investments (DI), has announced plans to expand its extruded aluminium production capacity by over 10,000 tonnes per annum as demand from downstream industries, transportation and electrical sectors surges across the UAE and GCC.

Masharie subsidiary Emirates Extrusion Factory (EEF), a leading aluminium extrusion company based in Techno Park Dubai, is commissioning its third extrusion line by July 2016, which will increase the production capacity by6,000 metric tonnes per annum.

EEF will also start its new powder coating plant with an annual capacity of 5,500-6,000 metric tonnes by July this year.

Another Masharie subsidiary White Aluminium Extrusion (WAE) - a leader in aluminium and glazing sector - is set to commission an anodizing plant with knowhow from Italy and a capacity of nearly 4,800 metric tonnes per annum in the second quarter of 2016 as demand for aluminium products surges amidst rampant construction and other downstream projects in the region.

South32 maintains offline capacity at SA aluminium smelters

Mineweb - February 26th, 2016

JOHANNESBURG – South32 will continue running its South African aluminium operations at a reduced capacity as market conditions show little sign of improvement.

Twenty-two smelting pots – temporarily suspended in September – are likely to remain offline until July, said CEO Graham Kerr.

Having already resulted in a 2% decrease in production in the December quarter, the continued suspension is expected to render a loss of 18 000 tonnes (t) for the financial year to June 2016. However, it is also expected to deliver a slight improvement in cash flow as it allows South32 to defer planned pot relining.

For the six months to December 31 2015, revenue from South Africa Aluminium fell 27.6% year-on-year to $596 million even as sales volumes increased 3%. Average realised sales prices fell to $1 642/t from $2 338/t over the same period in 2014. Underlying earnings before interest and tax (Ebit) decreased by $148 million to $21 million.

At Mozal, its other African aluminium unit, sales fell 12% due to the scheduling of shipments between corresponding periods. Although it did manage to reduce operating unit costs by 8% to $1 653/t, lower realised sales prices weighed on earnings. "While additional productivity gains are being pursued, the cost profile of the smelter will be more heavily influenced by power and raw material inputs, given the operations high variable cost base," the company said.

Eskom and the National Energy Regulator of South Africa (Nersa) are reviewing commodity-linked pricing agreements struck between the smelters' former owner, BHP Billiton and the power utility. Thanks to the long term contracts, it enjoys deeply discounted electricity prices. Mike Fraser, South32's COO for Africa, said the matter is likely to be resolved in negotiations.

According to Kerr, the company would also consolidate its local Mamatwan and Wessels manganese mines in the Northern Cape under one management team in order to maximise cash flow and build flexibility into the mines and smelter.

This follows the announcement of major restructuring at its South African manganese operations in September. It will continue with the operational suspension of three out of four furnaces at Metalloys, and will reduce saleable manganese ore production by 900 000t per year and reduce its headcount by 620 employees at Hotazel.

Alba upgrades technology for Line 6 project

Trade Arabia - February 24th, 2016

Aluminium Bahrain (Alba), the Bahrain-based aluminium smelter, has announced that it has upgraded the technology for its Line 6 Expansion Project from EGA DX+ to the EGA DX+ Ultra.

The signing ceremony was held today (February 23) in Dubai, UAE, and was attended by Shawqi Al Hashimi, Alba's director for Line 6 Smelter Project and Engineering; Abdulla Kalban, managing director and CEO, Emirates Global Aluminium (EGA); Dr Ali Al Zarouni, senior vice president, Jebel Ali Operations, technology development and transfer; and members of the EGA technology development and transfer department.

The upgrade to the EGA DX+ Ultra Technology will boost Alba's production to 540,000 metric tonnes per annum (mtpa), an increase of 26,000 mtpa versus prior projections. This will bring Alba's total production capacity to approximately 1,500,000 mtpa making Alba the largest single site smelter in the world, said a statement from the company.

The DX+ Ultra Technology will improve energy efficiency, which in turn will allow Alba to increase its metal production with no increase in overall energy consumption, it said.

Alba's Line 6 Expansion Project timeline remains on track with "first hot metal" scheduled for January 1, 2019, it added.

Alba's Al Hashimi said: "We are very fortunate to have EGA as a partner in the Line 6 Project. The upgrade to DX+ Ultra Technology is a game changer that will allow Alba to increase output through the use of low energy consumption technology and further strengthen our position as a leading, low cost producer."

Jebel Ali Operations' Al Zarouni added: "Research and technology development have been hallmarks of EGA since the inception of our business. We have dedicated considerable resources – both human intellect and financial investment – to these activities over the years. DX+ Ultra Technology is the result of the latest efforts to develop lower CAPEX and lower energy, high amperage reduction cells."

One of the biggest industrial projects in Bahrain, Alba's Line 6 Expansion Project will make the company the largest single site smelter in the world upon its completion, said a statement.

This project is expected to have a big impact on country's economy as well as strengthen the kingdom's position as the hub for the downstream aluminium industry in the GCC, it added. – TradeArabia News Service

Odisha's bauxite reserves to attract more than Rs 30,000 crore in the next few years

The Economic Times - February 16th, 2016

KOLKATA: It may be early yet, but there seems to be signs of revival in big ticket investment in Odisha's aluminium sector. If recent announcements are anything to go by, the state, home to more than half of India's bauxite reserves, is poised to attract investment worth well over Rs 30,000 crore in the next few years.

While engineering major Larsen & Toubro (L&T) said it is hopeful of getting final clearances for its estimated Rs 12,000 crore greenfield refinery project, public sector major National Auminium Company(Nalco) said on Monday it has committed Rs 20,550 crore for expanding its alumina refinery at Damanjodi and setting up an aluminium park at Angul.

Natural resources giant Vedanta Ltd also said it will sign a MoU with Odisha for an aluminium park, expected to garner investments of Rs 1000 crore.

"The entire value chain of Nalco, starting from bauxite mining to aluminium making is based in Odisha, our major focus is to strengthen the investment climate of the State, thereby boosting Odisha's industrial upsurge," Tapan Kumar Chand, Nalco chairman said, during the Make in India (MII) investors' meet.

Similarly, L&T is planning to set up a 3 million tonne (mt) refinery in the state's Rayagada district. "We had submitted the proposal to the (Odisha) government and we hope we will get the last mile clearance in next 2-3 months," L&T's senior executive vice-president (power, minerals and metals) Shailendra Roy, said on the side lines of the MII Week in Mumbai. The L&T project, conceived in 2005 in joint venture with Dubai Aluminium, was planned as.

Rs 30,000 crore venture with a 1.5 mt smelter and a captive power plant. However, it went into a limbo before getting revived around two years back.

"The investments of Rs 12,000 crore will be made in phases," Roy said. L&T will start with the process of land acquisition, designing, once the final approval is in place, he added.

Top consultants like R Muralidharan, senior director, Deloitte in India feel the investor interest in aluminium is linked to predicted growth in power, building and construction, packaging and transport sectors that is estimated to raise the white metal's demand. "A higher awareness among consumers about aluminum's environment friendly qualities, vis-avis plastics, could also be fuelling its demand," he said.

Explaining the reasons behind renewed investor interest in Odisha aluminium sector, Abhijit Pati, CEO-Aluminium, Vedanta Limited said: "The medium to long term outlook for aluminium production in Odisha is extremely positive.

Availability of coal, another important raw material for the smelters, easy proximity to domestic markets, a large coastline that gives quick access to ports and export markets, make Odisha a favourable destination for downstream industries." Earlier in the day, Vedanta Ltd said it will sign a MoU with Odisha to commission an aluminium park at Jharsuguda.

The project, will provide direct and indirect employment to 17,000 people and come up adjacent to Vedanta's 1.6 mtpa smelter which also has 3600 MW of power generation facilities. The state government will provide necessary infrastructure for setting up the industries like land, electricity etc., the cost of which will be recovered from potential investors.

Chinese may buy into $2.6b Amrun bauxite mine on Cape York

The Cairns Post - February 15th, 2016

MINING? giant Rio Tinto ­remains committed to the $2.6 billion Amrun bauxite mine ­expansion near Weipa despite its profits falling 51 per cent to $6.3 billion and a tightening of capital access.

But the corporation is considering a joint venture partner to help fund the project it currently 100 per cent owns and manages.

Work has already started on the extension, which will average 600 construction jobs over three years, peaking at 1100.

Rio chief executive Sam Walsh saidChinese investment in Amrun was under consideration.

It was most likely to be state-owned Chinalco, Rio Tinto's biggest shareholder with a 9.9 per cent stake.

L&T may get nod from Odisha to set up 3 mtpa aluminium plant

Business Standard - February 14th, 2016

Engineering major Larsen & Toubro (L&T) today said it is likely to get the final clearance from the Odisha government for setting up a 3 mtpa aluminium plant in Rayagada district in the next 2-3 months, a top company official said.

The company is planning to set up a 3 mtpa green field integrated aluminium refinery in the state with an estimated investment of Rs 12,000 crore.

"We had submitted the proposal to the (Odisha) government and we hope we will get the last mile clearance from it in the next 2-3 months," company's senior executive vice-president (power, minerals and metals) Shailendra Roy, told PTI on the sidelines of the Make in India (MII) Week here.

He further said once the final approval is in place the company will start with the process of land acquisition, designing.

We will start the process of preparing detailed plans as well as land acquisition. The investments of Rs 12,000 crore will be made in phases," Roy added.

Rusal to sell Alpart to Chinese company

BY AVIA COLLINDER Business reporter - February 12th, 2016

Owners of UC Rusal have signed an agreement with a Chinese firm for the purchase of Alumina Partners of Jamaica (ALPART), a bauxite mining and alumina processing plant located at Nain, St Elizabeth, in the south of Jamaica.

Reliable sources said yesterday that – in a process likely to be concluded by the third quarter of 2016 – the price had been agreed on and that the Chinese company will now enter into its due diligence phase before the financial close later this year.

The source said that full-scale reopening of the plant would mean employment and inflows from the bauxite levy. No development plans were mentioned at this stage.

Other sources have named the Chinese company as Jiuquan Iron & Steel (Group) Co Ltd (JISCO) – a producer of carbon steel, stainless & special steel and steelmaking raw materials — as the buyer.

Alpart's current production capacity is approximately 1.7 million tonnes of alumina annually. It is capable of expansion to more than two million tonnes per annum.

The company was first established in the early 1960s, starting with a union of three companies (Anaconda, Kaiser Aluminium and Reynolds Metals). Since then it has undergone several partnership and ownership changes, the last of which took place in 2011, resulting in the company being 100 per cent owned by UC Rusal Ltd.

In September 2011, UC Rusal inked a deal to acquire the remaining 35 per cent stake in Alumina Partners of Jamaica (Alpart), giving it full ownership of the St Elizabeth-based refinery.

However, hampered by the global economic recession and soaring energy costs, the Alpart plant was shut down in early 2009.

Nevertheless, in September 2015, UC Rusal announced a full resumption of operations.

As it turns out, Rusal, which produces aluminium, continues to be affected by sliding metal prices.

On February 10, United Company Rusal Plc in its fourth-quarter and full-year 2015 trading update said aluminium production in the final quarter of 2015 totalled 878 thousand tons – declining four per cent quarter over quarter (QoQ) and remaining flat year over year. Also, during the period the price decreased by 6.2 per cent QoQ to US$1,729 per tonne.

Rusal said in its update that it does not plan on restarting the aluminium smelters idled in 2013 and is considering further aluminium production cuts totalling approximately 200 thousand tonnes per annum.

It was noted that output at Windalco and Bauxite Company of Guyana were lower QoQ due to seasonal planned repairs and destocking

Labour dispute at Icelandic smelter – a threat to the country's agreement model?

Nordic Labour Journal - February 8th, 2016

A bitter labour dispute between trade unions and employers at Rio Tinto Alcan's Icelandic smelter Isal is in its second year. Workers have twice threatened to go on strike, but have pulled back at the last minute because of fears the smelter would be shut down. Six trade unions are negotiating, but most of the 500 employees at the smelter in Straumsvík belong to the Hlíf union.

The unions want wage increases in line with what other trade unions in the industry have achieved. But the issue which have led to negotiations grinding to a halt, is Rio Tinto Alcan's desire to outsource certain tasks. The company leadership wants to outsource just over 30 jobs. The unions oppose this, arguing that everyone should be paid the same and that this should be made a statute in the new wage agreement.

An agreement from 1972 bans the company to outsource work without the agreement of the unions. Rio Tinto Alcan claims this weakens the company's competitiveness.

Negotiating without the power to do so?

The Icelandic employers' union SA negotiates on behalf of the smelter, but the negotiation delegation is mostly made up by representatives from the factory leadership. The Hlíf union says the negotiation delegation basically does not have the power to reach an agreement with the unions.

"Whenever we believe we are getting close to a deal, the employers' delegation has to make international telephone calls to discuss it with the Rio Tinto Alcan top leadership. They are always told no, and the negotiations stop," says Hlíf's leader Kolbeinn Gunnarsson.

The employers' organisation SA's lawyer Ragnar Árnason does not consider it unusual that the negotiation delegation calls the group's leadership to discuss proposals for a deal.

"Both parties in the labour market have the right to negotiate and present their demands, but no-one is forced to reach an agreement. The employees have the right to strike, and employers have the right to impose a lockout," says Ragnar Árnason.

Locked situation

Icelandic media have launched various theories for why the conflict is so entrenched. One is that the company really is looking to renegotiate the agreement it has with the state energy company Landsvirkjun to buy electricity. The agreement runs all the way to 2036.

"The employees have concluded that the employer would welcome a strike, as that would give them a chance to close the factory," says the union lawyer Ástráður Haraldsson.

"We believe the mother company would not at all be interested in ending a strike. In which case we are locked in a situation which nobody knows how to solve," he continues.

The negotiations have not been helped by the fact that the Rio Tinto CEO Sam Walsh wrote an email to all employees in early 2016 announcing all wages in the gigantic raw material group would be frozen for the whole of 2016. Rio Tino is one of the world's larges producers of iron ore and prices are record low. This means negotiations have yet again stalled.

Possible sympathy action

Iceland's trade union movement is discussing sympathy actions in order to force the aluminium giant back to the negotiating table. The leader of the Icelandic Confederation of Labour, Gylfi Arnbjörnsson, has said limited strike action, a ban on overtime and export bans are all measures under consideration. Other trade unions can also call for sympathy strike action.

Hlíf's leader Kolbeinn Gunnarsson says Icelandic workers should get a 32 percent wage increase between 2013 and 2018 according to the collective agreement. Rio Tinto Alcan's employees have so far not been part of the collective agreement for aluminium workers, but have had a separate agreement with the company. Now, Hlíf will demand a collective agreement with Rio Tinto Alcan, to secure the employees the same wage increases as Iceland's two other aluminium companies.

Alcoa celebrates 1 billionth tonne

Australian Mining - February 5th, 2016

Alcoa has celebrated a new historic milestone, with the workforce having achieved 1 billion tonnes of bauxite mined over their 53 years in Western Australia.

President Alcoa Mining Garret Dixon congratulated past and present employees on their hard work for the company at a commemorative celebration in Mandurah last night.

"We're very proud of this achievement and also our decades-long, internationally recognised land rehabilitation program – one of the most critical parts of the mining process which sees jarrah forest ecosystems restored," Dixon said.

"In Australia, our bauxite is used to produce alumina to supply approximately eight per cent of world alumina demand and we make alumina as low as one third of the greenhouse footprint per tonne of product of some of our Asian competitors."

Dixon said Alcoa had made a significant contribution to the WA and Australian economy, injecting billions of dollars each year into Peel and South-West communities, the State and the nation.

At present Alcoa employs approximately 4,000 people and spends more than $2.2 billion per annum in local procurement and payroll, as well as millions of dollars and thousands of volunteering hours into local community groups and projects.

The Honorable Nigel Hallett MLC attended to represent Premier Colin Barnett, and the celebration was also joined by Huntly mine's Jim Blacklock, Alcoa's longest serving mining employee.

"Since joining the company in December 1971 (44 years ago), I've seen huge change," Blacklock said.

"The automation of processes and the volume of production are what impress me the most. But by far it is the people who have given me the greatest enjoyment; they're brilliant."

Alcoa named a mining road after Jim Blacklock in recognition of his commitment and service to the company, in a tradition that Alcoa has upheld for other long-serving employees such as Alcoa's first WA Manager of Mines, Jim Langford, who had the popular Langford Park, located at Alcoa's rehabilitated Jarrahdale mine site, named after him.

Bell Bay Aluminium to reduce power consumption

The Advocate - February 4th, 2016

BELL Bay Aluminium has announced it will reduce its power consumption by about 10 per cent from today.

The Northern smelter will reduce power usage of between 30 and 40MW for up to five months.

BBA general manager Ray Mostogl said Tasmania currently faced a challenging time due to the combination of historically low dam storage levels, the lowest spring rainfall on record and the extended outage of the Basslink cable.

''We have reached an agreement with Hydro Tasmania on the best energy savings measure we can provide to assist with managing Tasmania's energy security during this difficult time,'' Mr Mostogl said.

''BBA has more than 60 years of history with Hydro Tasmania.

''As the state's largest consumer of electricity we have been in negotiations with Hydro since the Basslink outage occurred to ensure this measure minimises the impact on the smelter's viability,'' he said.

Mr Mostogl said the company was not planning on reducing its permanent workforce, but the reduction of power usage could affect the number of contractors working at the site during the five month period.

''We will work with our national and international customers, Hydro Tasmania, state government, suppliers and the local community to minimise any impact,'' he said.

''Potentially there may be redeployment opportunities available for some contractors from BBA to support Hydro Tasmania with work on additional generation assets.''

Guinea miner Alufer to produce 5 million tonnes of bauxite in 2017

Reuters Africa - February 1st, 2016

CONAKRY Feb 1 (Reuters) - Guinea-focused bauxite miner Alufer will produce 5 million tonnes of bauxite next year, the mines minister said on Monday, potentially boosting Guinea's output by more than a quarter.

Guinea holds nearly a third of the world's reserves of bauxite, the metal used to make aluminium, and currently produces around 18 million tonnes. Some mining investment has been held up due to a global commodity price slump.

"Alufer will produce 5 million tonnes of bauxite from 2017 for an estimated cost of $140 million," said mines and geology minister Abdoulaye Magassouba at an event marking the signing of a convention between Guinea and Alufer.

The independent miner, whose main Bel Air open-pit mine is located near the West African country's Atlantic coast, is set to eventually ramp up production to 10 million tonnes, Magassouba added.

Bauxite production at the site was originally due to begin this year but was held up due to contract negotiations. Alufer also has a mining permit in the Labe District in the centre of the country. (Reporting by Saliou Samb; Writing by Emma Farge; Editing by Lisa Shumaker)