AluNews

Vedanta eyes 1.7 mt aluminium output this fiscal

India Today - June 30th, 2016

Vedanta Limited is chalking out plans to produce 1.7 million tonne of aluminium this fiscal through a capacity ramp-up at Balco and Odishas Jharsuguda plants.

"Ever since April 1 this year, we have been ramping up our aluminium lines at Balco and Odisha. We would expect that all the Balco lines would be raised this year," Vedanta Limited Group CEO Tom Albanese told PTI.

The Anil Agarwal-led company is a major shareholder at Balco in Chhattisgarh and Jharsuguda plant in Odisha.

"In Odisha, we have four new pot lines that we would be ramping up," he said.

"... That would get us to total annualised production capacity of about 1.6-1.7 million tonnes of aluminium per year and I would compare it with last years aluminium production level of about 900 thousand tonnes."

The company is also looking to commission pot lines five and six at the Odisha facility.

Sohar Aluminium Announces Record Output for 2015

Aluminium Insider - June 29th, 2016

The Sultanate of Oman's Sohar Aluminium announced a production record on Sunday as it released its 2015 Sustainability Report. The report highlighted certain operational efficiency benchmarks the company has achieved as well.

Sohar Aluminium, which is Oman's biggest non-hydrocarbon industrial venture, announced a year-end production total of 377,186 metric tons. That's an increase over 2014's output of 363,528 metric tons. The firm chalks up the improvement to operating at its highest-ever amperage of 389 kA. In addition, production rates were among the highest in the industry for the technology the firm used, running at 2,879 kg Al per pot per day.

"To achieve this feat, all departments across the smelter operated at significantly better levels than in previous years," explained the report. "The plant also achieved its best specific energy efficiency in the last five years at 13.7 kilowatt-hours/kilo. With the completion of the AP 39 lining, the plant is well on its way to operate at around 400kA efficiently. Metal purity levels improved significantly through the year contributing to outstanding customer satisfaction."

Sohar's smelter, located just outside Sohar Industrial Estate, produces 375,000 metric tons per annum from its three-quarter mile-long potline of 360 individual pots. The firm's "amperage creep" initiative aims to have amperage boosted to 400 kA, enabling a boost in output of about 28,000 metric tons per annum.

"A decade since we first began our operations in Oman, I am pleased and proud to say that Sohar Aluminium has emerged as a leader in the Omani metals and industrial sector, a strong contributor to the Omani economy and a real agent of change in the North Al Batinah (Governorate)," explained Mulham Basheer Abdullah al Jarf, Chairman of the Board of Directors.

"As Sohar Aluminium moves forward with capital improvement programmes such as the amperage creep project, asset reliability and operational efficiency will gain prominence as a significant value creator," added Said Mohamed al Masoudi, Chief Executive Officer. "In 2015 the total Value Creation for the plant was an impressive $33.8 million."

Sohar Aluminium was founded in the fall of 2004 and is jointly owned by Oman Oil Company, Abu Dhabi National Energy Company PJSC – TAQA, and Rio Tinto Alcan.

Alcoa files SEC registration form to pave the way for separation

S&P Global Platts - June 29th, 2016

Alcoa has filed an initial Form 10 registration statement with the US Securities and Exchange Commission paving the way for its planned separation into two standalone, publicly traded companies, the US company said Wednesday.

Last September, Alcoa announced plans to split into two independent, publicly traded upstream and downstream aluminum companies by the second half of 2016.

Alcoa Upstream Corp. -- to be renamed Alcoa Corp. prior to separation -- will hold the company's upstream and North American packaging businesses, while the value-add businesses will remain in the existing company, which will be named Arconic Inc.

"Alcoa Corporation has a low-cost base that will enable resilience and value-creation at all stages of the commodity cycle. Arconic is a technology-driven company producing performance materials and highly engineered products for growth markets, poised to deliver consistent profitable growth," Klaus Kleinfeld, Alcoa chairman and CEO, said in a statement.

Alcoa Corp's businesses will include bauxite, alumina, aluminum, cast products and energy, and rolling mill operations that will serve the North American packaging market.

Arconic will be a global leader in precision engineering and advanced manufacturing, with businesses including the engineered products and solutions, global rolled products, and transportation and construction solutions segments.

The separation will occur by means of a pro rata distribution by the current company Alcoa Inc. of at least 80.1% of the outstanding shares of the newly formed upstream company, initially named Alcoa Upstream Corp., which will own the upstream businesses.

The current publicly traded company will continue to own the value-add businesses and will change its name to Arconic Inc.

After the distribution becomes effective, Arconic will own no more than 19.9% of the outstanding shares of common stock of the new upstream company.

"In light of recent volatile commodity market conditions and conditions in the high-yield debt market, Arconic's retention of Alcoa Corporation shares positions both companies with appropriate capital structures, liquidity, and financial flexibility and resources that support their individual business strategies," the Form 10 filing stated.

The separation is on track to be completed in the second half of 2016, the company said.

ASSET BASE

According to the Form 10 filing, Alcoa Corp's asset base will include "the world's largest bauxite mining portfolio and what we believe is the most attractive global alumina refining system, both with first quartile cost curve positions."

Alcoa Corp. reported 45.3 million bone dry mt of bauxite production in 2015, with ownership in seven active bauxite mines globally, four of which it operates.

"In addition to supplying bauxite to our own alumina refining system, we are seeking to grow our newly developed third-party bauxite sales business," the form says.

The company is also the world's largest alumina producer, with nine refineries on five continents.

"In addition to supplying our aluminum smelters with high-quality feedstock, we also have significant alumina sales to third parties, with almost 70% of 2015 production being sold externally," the form notes.

The company said it continues to improve alumina margins by shifting spot sale to API or spot pricing from LME aluminum-based pricing; in 2015 the percentage of third-party smelter grade alumina shipments that were API or spot-priced rose to 75% from 68% in 2014, and up from 5% in 2010, with the figure expected to rise to around 85% this year.

The bauxite and refining operations supply a strategic global aluminum smelting portfolio with a "highly competitive second quartile cost curve position," it adds.

SMELTER PORTFOLIO

The smelter portfolio is "well-positioned to benefit from robust growth in aluminum demand," the form said, forecasting record global aluminum demand in 2016 of 59.7 million mt, up 5% from 2015.

"Our aluminum business intends to continue its pursuit of operating efficiencies and incremental capacity expansion projects. We intend to react quickly to market cycles to curtail unprofitable facilities, if necessary, but also maintain optionality to profit from higher metal price environments through the restart of idled capacity," the form says.

Since 2010 the company has closed, divested or curtailed 35% of total smelting operating capacity and 25% of total operating refining capacity.

In casting, the company currently operates 15 casthouses providing value-added products, and also has three casthouses that are currently curtailed. Value-added products grew to 67% of total cast products shipments in 2015, compared with 65% in 2014 and 57% in 2010, and are set to grow further to 70% this year, the form says.

Alcoa Corp. has rolling operations in Warrick, Indiana and Saudi Arabia which, together, serve the North American aluminum can sheet market -- the Warrick mill is focused on packaging, producing can body stock, can end and tab stock, bottle stock and food can stock, and industrial sheet and lithographic sheet, while the Ma'aden rolling mill currently produces can body stock, can end and tab stock, and hot-rolled strip for finishing into automotive sheet.

"Following the separation, it is anticipated that the facilities manufacturing products for the North American can packaging market will be located only at the Warrick and Ma'aden Rolling Mills, and that the Arconic rolling mills will not compete in this market," the form says.

Alba Seeks US$750 MM Loan to Fund Line 6 Project

Aluminium Insider - June 23rd, 2016

Sources told Reuters on Tuesday that Aluminium Bahrain (Alba) is negotiating with financial institutions to obtain a US$750 million loan to fund its ongoing Line 6 expansion.

Alba is raising US$3 billion to finance the project via a mix of loans from banks and export credit agencies as well as through international bonds.

This latest development comes on the heels of the firm's announcement last month that it has been forced to cut US$500 million out of the CAPEX associated with its Line 6 project. The Bahrain-based smelter laid the blame at the feet of the late drop in global crude oil prices.

Sources said that the first round, consisting of inviting banks to participate, has already begun. The firm is seeking a seven-year note with an amortizing structure whereby the principle is paid along the way instead of at the end of the term. Rates are expected to be between 300 and 350 basis points over the London interbank offered rate. The loan will be offered either via cash or as an Islamic-compliant tranche, the sources explained.

The Line 6 project will boost Alba's production capacity by 514,000 metric tons per annum when it comes online, making it the largest single- site smelter in the world. The total capacity will be over 1.45 million metric tons when fully ramped up

Aluminium Bahrain B.S.C., or simply Alba, is one of the largest industrial companies in the Middle East and is one of the top 10 largest aluminium producers in the world. Originally incorporated in 1968, the company is based in Bahrain and 87% of its total workforce are Bahraini nationals. It began operations in 1971 with a 120,000 metric ton annual capacity. Modernization bumped the output up to 450,000 metric tons in 1992. In the spring of 2005, Alba opened Line 5, raising output by 860,000 metric tons per year. Maximum output for the smelter is in the neighborhood of 1.2 million metric tons per year.

EGA to go ahead with construction of Guinea bauxite mine

The National - June 23rd, 2016

Emirates Global Aluminium [EGA], one of the world's largest producers of aluminium, is moving ahead with the construction of a US$1 billion bauxite mine in the Republic of Guinea.

The investment will secure access to the mineral used in making aluminium and boost the company's production of the metal in the long run.

The mine, first announced in 2013, will be built by EGA subsidiary Guinea Alumina Corporation [GAC]. It is expected to start production in 2018. With an output of 12 million tonnes of bauxite a year, the mine will be one of the key producers of the highest-grade bauxite in the world, said William Morrell, the GAC chief executive.

"This will put us in a position where we will be in charge of our destiny from mine rights right through to metals, giving us robustness, even in a downward market," Mr Morrell said. "It puts us in a much stronger position to compete on a level footing with them."

It will also secure low costs for the parent company EGA as commodity producers the world over feel the strain from lower prices. Bauxite is the rock processed into alumina, which in turn is processed into aluminium. Guinea has the world's largest reserves of bauxite. The mine will create about 4,000 jobs in Guinea, as well as employment in Abu Dhabi. The bauxite produced will supply EGA and will also be sold on the world markets, Mr Morrell said.

Despite the hard times for commodity producers, Abdulla Kalban, the EGA chief executive, said he was bullish about the long-term demand for aluminium, with its increasing use in the manufacture of cars, aircraft and construction fuelling demand. Already, there are signs that demand is increasing. The price of aluminium traded in London has gained about 8.5 per cent so far this year after dropping 19 per cent last year.

"This investment builds on our plan to secure EGA's supply chain and capitalise on growth in the third-party bauxite market," Mr Kalban said.

"Despite the prevailing challenges facing the aluminium industry, we remain confident in the long-term outlook for the sector, and believe it is the right time for us to invest in high-quality, cost-competitive assets."

GAC signed a 25-year mineral concession deal with Guinea in 2013, with the possibility of renewing it for another 25 years. The concession has bauxite reserves totalling about 1 billion tons. Mr Morrell said negotiations for financing the $1bn are well under way.

"It will be significantly project-financed, so we are working with multilaterals," he said, declining to name the financiers.

"We started negotiations in earnest eight months ago. We are also looking at other sources of funding apart from project finance, which include export credit agencies and commercial banks all over the world.

The UAE, the world's fourth-largest producer of aluminium, is counting on EGA to help push its efforts at making the country's economy less dependent on oil amid the biggest slide in energy prices since the global financial crash of 2008.

EGA, which was created by the merger of Dubai Aluminium and Emirates Aluminium in 2013, posted an almost 50 per cent drop in net profit last year as the price of aluminium plunged amid a supply glut.

Along with its project in Guinea, EGA is in the process of building a $3bn alumina refinery in the UAE as a boom in regional infrastructure projects spurs demand. The refinery is expected to be operational by next year and will be completed in two phases, each with an annual production capacity of 2 million tonnes.

EGA, which is owned equally by the Abu Dhabi investment firm Mubadala Development Company and the sovereign wealth fund Investment Corporation of Dubai, has a production capacity of 2.4 million tonnes per year.

Indonesian Firm Preparing to Begin First Domestic Smelter-Grade Alumina Production

Aluminium Insider - June 20th, 2016

Cita Mineral Investindo (CITA) is planning to produce Indonesia's first alumina upon the completion of the company's refinery in Ketapang, West Kalimantan. The firm says production is expected to commence within the next several days.

CITA's new US$1.15 billion-smelter was constructed by Well Harvest Winning Alumina Refinery (WHW), a joint venture between CITA, China Hongqiao Group Ltd., and its subsidiary Shandong Weiqiao Aluminium and Electricity Co. Ltd. Energy consultancy firm Winning Investment (HK) Company Ltd. is also involved in the project.

The firm says the smelter in question is set to produce smelter-grade alumina (SGA). CITA president director Liem Hok Seng said that the new smelter would put Indonesia in the same class as the People's Republic of China, the Russian Federation, Australia, and the United States.

"This move certainly creates added value to locally-mined bauxite, which in the past had to be processed overseas into SGA-type alumina and then exported again to Indonesia to create aluminum," said Seng last week.

According to reports, the first phase of the smelter's operations has it turning out one million metric tons of alumina per year while being powered by CITA's coal-fired power plant, which will send the plant 80 megawatts. Additionally, CITA will build port facilities, housing, and facilities for 2,500 workers. Exports of alumina are expected to begin next month.

The second phase involves an expansion of the existing facilities to reach a capacity of two million metric tons, said CITA commissioner Harry K. Tanoto. That phase is expected to finish by the end of 2018. CITA has lenders lined up to fund a portion of the US$350 million expansion.

Ownership of the smelter is split up thusly: China Hongqiao is the majority stakeholder at 56%, CITA holds a 30% interest in the smelter, Winning Investments has 9%, and Shandong Weiqiao owns the remaining 5%.

CORRECTED-Guinea's CBG gets $1 bln loan to boost bauxite production

Reuters - June 17th, 2016

Guinea's Bauxite Company (CBG) has reached an agreement in principle over a $1 billion loan to increase production capacity at the Kamsar treatment plant, the firm's general director told Reuters on Friday.

Guinea has around a third of the world's reserves of bauxite, used to make aluminium, although development has been hampered by years of military rule and popular unrest.

The West African country produces around 19 million tonnes per year.

"We have obtained the agreement in principle of all our financial partners for the loan of $1 billion for the expansion project of the CBG," Namory Conde said, declining to name the backers.

He said the loan will support a goal to boost bauxite production at the factory from the current annual output of 14.5 million tonnes to 18.5 million tonnes in 2018, an increase of nearly 30 percent.

The ultimate goal is to nearly double output to produce 28.5 million tonnes of bauxite in 2027, Conde said.

Halco Mining consortium, controlled by aluminium producer Alcoa, global miner Rio Tinto and Dadco Investments, has a 51 percent stake in CBG, while the remaining 49 percent is owned by the government.

Bahrain's Alba smelter to go live in early 2019

Construction Week Online - June 7th, 2016

RELATED ARTICLES: Oil prices reduce Alba Line 6 costs by $500m | Alba picks Bechtel as Line 6 expansion contractor | Bahrain's Alba approves 2015 dividend worth $41.3m

Aluminium Bahrain (Alba) says its new smelter is on track to start production in early January 2019.

In April Bechtel was awarded an engineering, procurement, and construction management (EPCM) deal for the so-called Line 6 Expansion Project.

Under the terms of the contract, Bechtel will be responsible for the design and construction of the sixth pot line, as well as supporting industrial services.

Chairman of Alba's board of directors, Shaikh Daij Bin Salman Bin Daij Al Khalifa, said: "Alba's status as an international producer of high-grade aluminium will be bolstered once Line 6 Expansion Project is completed. We are pleased with the reduced capital cost and fast-paced progress of the Project and, are confident of delivering the first hot metal in early January 2019."

The new line will boost Alba's production by 540,000 metric tonnes per annum (mtpa), bringing its total production capacity to 1,500,000 mtpa.

Norsk Hydro: Hydro enters into new long-term power contract for Neuss aluminium plant in Germany

GlobeNewswire, Inc. - June 2nd, 2016

Norwegian aluminium company Norsk Hydro ASA's 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 1.3 TWh (150 MW) annually in the five year period from 2021 to 2025.

The power contract supplements the power contract which was entered into in July 2015, totaling 0.9 TWh (100 MW) annually in the eight year period from 2018 to 2025. These two contracts replace 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) is replaced by an internal power contract.

"I am pleased that we have been able to secure power for our Neuss aluminium plant until the end of 2025. In line with the global trend, the German exchange-traded forward power prices have fallen EUR 25-30 since 2012. Together with the ongoing Better Rolled Products improvement ambition, which targets NOK 900 million in annual improvements by the end of 2019, this contract further strengthens the competitiveness of our operations," says Executive Vice President and Head of Rolled Products Kjetil Ebbesberg.

Hydro's Neuss plant is 100 percent owned by Hydro and located in the Western part of Germany, close to Düsseldorf. It currently produces primary aluminium at two-thirds of its total 235 000 mt annual capacity, then casting and delivering sheet ingot to the next-door Alunorf hot rolling mill. Furthermore, the Neuss plant is stepping up recycling and has recently commissioned a EUR-45 million facility for recycling 50,000 tonnes of used beverage cans (UBC), contributing to lower metal cost and Hydro's target to become carbon neutral by 2020.

Yarwun Lays Off Fifty in Final Round of Labor Cuts

Aluminium Insider - June 2nd, 2016

In a memo distributed to Rio Tinto workers at Queensland's Yarwun bauxite operation, general manager Colin McGibbon explained why fifty workers were released in the final round of cuts intended to make the plant profitable again.

"Commodity prices have decreased to some of the lowest levels we've seen in recent history, with no clear line of sight to when they will improve," he explained.

"Over a number of months we have taken the necessary steps to align our organisational structure with this model," he went on, "and today we announced the last step in the process. As a result, a number of our colleagues were notified that their roles have been made redundant."

Rio Tinto, like all of the ex-China market's alumina producers, have had to find ways to remain profitable living in the wake of the incessant increase in supply spilling out of the People's Republic of China. The Middle Kingdom has increased production by 200% over the last five years, and by 693% over the past decade.

"It has been a tough year and we still have a long road ahead of us," McGibbon continued, "but we have an excellent team to take Yarwun forward. Leaders will brief their teams as quickly as possible, starting this afternoon.This is an opportunity to ask questions and also discuss the role your team needs to play to ensure our joint success."

Smooth sailing in the alumina marketplace is not on the horizon for Yarwun or any other ex-China producer, as the China Non-Ferrous Industry Association announced recently that it expected a 5.2% increase in output, bringingthe country's total production to 61 million metric tons.

The latest round of layoffs brings the total number of Rio Tinto Yarwun workers put out of work over the past two months to one hundred.

Govt aims to auction up to 25 mines by August: Mines Secretary

Moneycontrol - June 1st, 2016

The government plans to auction as many as 25 mines containing minerals such as iron ore, gold, bauxite and limestone by August this year.

So far, the mineral-bearing states have put under the hammer 47 mineral blocks, of which six have been sold, garnering a revenue, including royalty, DMF and NMET contributions, of about Rs 18,146 crore.

Auction process for 17 blocks was deferred due to insufficient bids.

"Very soon states will put for auction 50-60 blocks. We expect notice inviting tenders (NITs) for 20-25 mines to come out in the next 2-3 months," Mines Secretary Balvinder Kumar said at an event here today.

Elaborating on the efforts taken by the government to boost the mining sector in the country, Kumar said that 100 blocks of about 100 sq km each will be soon offered for exploration.

"The National Mineral Exploration Policy (NMEP) will be notified in 1-2 months and then the process of auctioning of these blocks will begin through reverse bidding. I think in 2-3 months this should start," the Secretary noted.

Raising concern on the menace of illegal mining activities, Kumar said a pan-India monitoring system is being prepared, which would identify any mining activity undertaken outside the purview of authorised mining activity and the control room of this system would be in the Indian Bureau of Mines.

He added that offshore mining rules would be in the public domain soon and the government has identified 50 offshore mining blocks which will come up for auction in three-four months.

Madhya Pradesh Secretary Mineral Resources Department Sheo Shekhar Shukla said the state has put up three limestone and one diamond block for composite lease through e-auction.

Giving details of opportunities for investors in the mining sector in MP, he added that by October 2016 the state would put up auction notices for five more limestone blocks, adding that in the next two years about 24 mining blocks would be ready to be offered to investors.

He added that Madhya Pradesh is looking forward to the framework of a new mineral exploration policy by the Centre and the state would welcome the formation of joint ventures between the private sector and the State Mineral Corporation for joint exploration.

Alba on schedule with its Line 6 Expansion Project

Bahrain News Agency - June 1st, 2016

Manama, June 1 (BNA): Aluminium Bahrain B.S.C. (Alba), the Bahrain-based international aluminium smelter, is on track to meet its strategic growth by accelerating the early works on Line 6 Expansion Project, according to astatement issued by the Chairman of Alba's Board of Directors, Shaikh Daij Bin Salman Bin Daij Al Khalifa.

The statement was made following the second quarterly meeting for this year, which was held on Wednesday, June 1, 2016 at Alba.

Adding further, Shaikh Daij said: "Alba's status as an international producer of high-grade aluminium will be bolstered once Line 6 Expansion Project is completed. We are pleased with the reduced capital cost and fast-paced progress of the Project and, are confident of delivering the first hot metal in early January 2019."

During the meeting, the Board reviewed reports of the Executive Committee, Board Audit Committee, and the Nomination and Remuneration Committee while updates were also given on reports related to Safety, Financial Performance, Line 6 Expansion Project, and Industry Market trends.

The Board also agreed on the dates for the upcoming Committees as well as Board Meetings for 2016.

In addition to the Chairman of the Board, Shaikh Daij Bin Salman Bin Daij Al Khalifa, the Alba Board of Directors comprises six directors appointed by Bahrain Mumtalakat Holding Company - Yousif Abdulla Taqi, Osama Mohammed Al Arrayedh, Fahad Nasser Al-Hazzani, Dr. Mohamed Kameshki and Suha Karzoon. The two directors appointed by Sabic Industrial Investments Co (SIIC) are Fahad S. Al Sheaibi and Khalid Al-Garni and two independent directors, Abdul Aziz Al Humaid and Mutlaq Al-Morished.