AluNews - March 2016

Alcoa shuts Warrick aluminum smelter after 56 years of operation

Scrap Monster - March 29th, 2016

Aluminum major, Alcoa has permanently closed its aluminum smelter at Warrick County, along the Ohio river in Indiana.

Aluminum major, Alcoa has permanently closed its aluminum smelter at Warrick County, along the Ohio river in Indiana. The company had earlier announced that it would close the smelter operations by end-March this year. The company was forced to shut operations at the 56 year old smelter due to drastic drop in aluminum prices, which made it financially unviable for them to run the smelter operations.

According to the company, almost 325 out of the 600 people who worked at the smelter would be laid off. The remaining 275 employees have either expressed their willingness to accept severance or retirement packages or have already found new jobs. Meantime, operations will continue uninterrupted at the plant's rolling mill and power plant which employs nearly 1,200 people.

Alexander Alford, Alcoa's smelting division location manager termed the closure as the end of an era. He admitted that it would be a tough day for hundreds of employees who have been working in the smelter for many long years. He thanked the dedication and professionalism of employees in their efforts to safely bring down the smelter over the past two months. Meantime, United Steelworkers Local 104 has applied for Trade Adjustment Assistance with the US Department of Labor. It stated that a resource fair will be hosted next week for smelter workers who are affected by the layoffs.

Alcoa announced that it intends to curtail alumina output by nearly 1 million mt by end of second quarter this year. This is inclusive of the planned curtailment of 810,000 mt of refining capacity at its Point Comfort operations in Texas.

The Warrick smelter's five potlines had a production capacity of 269,000 metric tons of aluminum a year. Warrick operations were one of the largest aluminum smelting and fabricating facilities in the world. The company had completed an investment of more than $400 million in 2008, to upgrade the plant's pollution control mechanisms.

Alcoa Adds to Ex-China Capacity Cuts as Warrick Plant Ends Production

Aluminium Insider - March 29th, 2016

Aluminium manufacturing operations ceased at Alcoa's plant in Newburgh, Indiana, on Thursday. The production shut-down at Warrick represents the latest in the continuing curtailment of capacity by aluminium manufacturers outside of the People's Republic of China.

The smelter, which first opened in 1960, had been on the chopping block since January of this year. Alcoa cited declining aluminium prices and a corresponding lack of competitiveness as the reason for the decision to end aluminium smelting at the plant.

The plant employed 600 in smelting operations, but only 325 individuals were ultimately laid off. The remainder found other employment, accepted severance packages, or took retirement. Those laid off will be paid through next Thursday.

Alcoa's plant will continue to operate its rolling mill and power plant, which, together, employ 1,200.

Employees gathered on Thursday to mark the occasion with a group photo. They also received a commemorative aluminium coin.

John Martin, Alcoa's vice president of smelting for the U.S. and Brazil, was on hand for the ceremony as well.

"There was never another smelter in this state, and our work has always been unique, something admired for the skill and commitment it required," Martin wrote in a statement sent to employees.

The lion's share of those laid off in the move are members of United Steelworkers Local 104, which has applied for Trade Adjustment Assistance with the United States Department of Labor. Trade Adjustment Assistance, which provides job-search, training assistance and other benefits to help laid-off workers find new employment, has yet to be approved by the Labor Department at press time. The union is also hosting a job fair for its members next week.

Alcoa has been cutting capacity along with the rest of ex-China aluminium producers. The firm closed two mills in Brazil with a combined capacity of 170,000 metric tons per annum as well as curtailing 373,000 metric tons of capacity in Washington State.

India's aluminium consumption to rise to 20 MT: Anil Agarwal

Business Standard Private Ltd. - March 26th, 2016

Describing aluminium as the future, Vedanta Resources Chairman Anil Agarwal on Saturday said the consumption of the metal will rise to 20 million tonnes (MT) from the present 2 MT going ahead.

"India only has 1.5 MT aluminium production and the consumption is about 2 MT. It is going to be 20 MT. Every thing will move to aluminium. Whether railway, construction, aerospace, automobiles," he said replying to a query on setting up small and medium firms in India's manufacturing sector.

Agarwal, however, did not elaborate on the time period.

Speaking at a CII event here, he said aluminium as a light metal is being considered as the future of industry and setting up a small and medium enterprise (SME) in the sector will require an investment between Rs 25-500 crore.

Vedanta Ltd, part of the London-listed metals and mining conglomerate, through its subsidiary Balco produces Aluminium in India.

On loan from banks to SMEs, he said: "It is a myth (that banks cannot lend). They are looking for SME proposals."

When asked about the downturn in mines and minerals sector both globally and in India, he said: "This is the time to build. Who bothers about competition, we love it. Important thing is opportunity. We can grow in a slow market."

When asked about reasons behind India lagging in production of oil and gas, the mining baron said it is just a "perception".

"Perception is that we have no oil. We have a habit of staying poor. India has huge reserves of oil. When we acquired Cairn India there was marginal feed. Today, if the government gives support and we go full hog, I can create 4 times production," he added.

"I feel Indian government and state-run ONGC should give oil fields to Indian entrepreneurs on revenue sharing basis and give clear environmental norms," he added.

He said his firm Cairn India is aspiring to produce 50% of India's oil consumption.

Stressing on least government intervention in business, Agarwal said policies need to be open and there should be transparent environmental norms.

He said technology has developed to an extent that one can extract natural resources from Earth without minimum environmental impact.

Giving a glimpse of his "amazing" journey he said, in the last 30 years, Vedanta has raised Rs 2 lakh crore, about $30 billion, from the London market, which his firm has invested in India.

"We brought it here and invested in oil and gas, copper, aluminium, iron ore and zinc. And with this investment of Rs 2 lakh crore, every year at least USD 4-5 billion has been paid to the government as taxes, royalty and on top of that 60 lakh new employment has happened," he noted.

When asked if doing business in India was difficult, the mining baron said,"it will get better. One needs to keep working. Keep moving ahead.

State corrects layoff notice for Noranda's Gramercy plant; 444 jobs at stake

NOLA Media Grou - March 23rd, 2016

The state has revised a layoff notice issued last week for the Noranda alumina plant in Gramercy. The corrected figure the Louisiana Workforce Commission provided Wednesday (March 23) indicates 444 employees would lose their jobs if the plant closes as expected.

The company declared Chapter 11 bankruptcy in February, citing declining aluminum prices and struggles in negotiating levies with the government of Jamaica, where its primary bauxite mine is located. Alumina is extracted from bauxite to create the the metal.

Noranda told the state it would complete a "fast track expansion" of its Gramercy plant's capacity to produce non-metallurgical and chemical grade alumina in order to attract new customers. If those measures fail to spur business, the company intends to go through with its plant closure by mid-May.

Noranda has already postponed its layoffs once and said the job cuts would be temporary if business conditions change. The company suffered a significant setback earlier this year when one of its main customers went bankrupt and a power outage shut down production at its smelter at New Madrid, Missouri.

Nalco Eyeing Iran as Potential Home for New Smelter

Aluminium Insider - March 21st, 2016

India's state-owned aluminium producer National Aluminium Company Limited (Nalco) is looking abroad for a location to build its planned 500,000 metric-ton-per-annum aluminium smelter. According to the company's top executive, the Islamic Republic of Iran is at the top of the list.

"Three things push up the production cost of aluminium in India energy, labor and freight. We want to take these three advantages in the international markets. So, we are searching for a place where we can manage costs, and in West Asia these benefits are available. We are now weighing among Iran, Oman and Qatar, with Iran being a frontrunner," explained Tapan Kumar Chand, chairman and managing director of Nalco.

The amount of Nalco's investment will depend upon the power arrangement that is made for the plant, he went on to explain.

"If we can get direct power, with long-term agreement, then we will only go for the smelter unit. If we go only for the smelter unit, the cost can be around Rs 12,000-13,000 crore (US$1.8 billion to US$1.9 billion). But if we have to go for a power plant, the cost will be more," Chand said.

"We are planning to send a team in May," he said. He went on to say that the final decision may be made in the next two to three months.

Nalco already plans to expand its domestic refining capacity by adding one million metric tons per annum to its Damanjodi unit. The company expects such an expansion to cost US$3 billion.

"This brownfield expansion has become possible because of the coal block allocation (Utkal coal blocks). The state government has given the Pottangi mines (bauxite) and they expect some value addition in Odisha. Now on the raw material front, Nalco is secure," said Chand.

Chand said that Nalco is entering a growth phase, expecting to increase bauxite and alumina by ten percent this fiscal year, and an increase in primary aluminium production of between ten and fifteen percent.

ALSCON to begin production

The Nation - March 18th, 2016

The embattled Aluminium Smelter Company of Nigeria (ALSCON) in Akwa Ibom State is to begin production soon, its Managing Director, Mr. Dimitry Zavyalov, has said.

He said this while briefing the Clan Head of Ikpa Ibekwe, Etebom Akpan Akpan and his council in Ikot Abasi. He said the company would bounce back, irrespective of the difficult period it is facing.

"The Management of UC-RUSAL Aluminium Smelter Company of Nigeria (ALSCON), the new owners of ALSCON, will not relent in exploring available possibilities with appropriate authorities for ALSCON to come back to life,'' he said

He stressed the importance of aluminium and the technicalities involved. He said the production of aluminium products required professionals.

Zavyalov, however, said only committed workers would be re-absorbed when the company resumed production. He said the management had taken steps that would yield positive results for the company and the host community when production starts.

He said negotiation for connection of the national grid to ALSCON was in progress. He reiterated the Transmission Company of Nigeria (TCN's) commitment to completing work on schedule.

Akpan thanked Zavyalov for the visit and for relating with the host community. He expressed displeasure over the challenges facing the company, saying that the community was worried about the situation in ALSCON.

Akpan said the community was proud to be associated with the Management of ALSCON especially for working in close consent with the appropriate authorities as well as carrying the community along towards the resuscitation of ALSCON.

Indonesia hopes four new smelters complete in 2016 -mining official

Reuters - March 16th, 2016

Indonesia hopes four new smelters will be completed in 2016, a mining ministry official said on Wednesday, as low commodity prices continue to create financial problems for the mining industry and shrink government returns.

Indonesia banned metal ore shipments in early 2014 to encourage firms to build smelters and shift exports from raw materials to higher-value finished metals. But the ban cost the country, the world's top nickel ore exporter at the time and a major supplier of bauxite, billions of dollars in lost revenue.

Dozens of smelter projects have been delayed, many of them in nickel, as a result of the current downturn in commodity prices, and only five nickel smelters of a targeted 12 were completed last year.

"In 2016 we hope four additional smelters will be operational," Coal and Minerals Director General Bambang Gatot told reporters. They will process nickel, alumina and lead.

The latest figure is around half of an earlier smelter target for this year.

Indonesia's mineral export rules have been a flashpoint between the government, which is constitutionally bound to maximise returns from resources, and companies including U.S. miner Freeport McMoRan Inc.

New rules issued by the government in February allow mining companies to revise the capacity of their planned smelters, in hope of helping them build domestic processing facilities, Gatot said, adding that Freeport's $530 million smelter bond was still being discussed.

"The $530 million isn't regulated. It was just a way for us to control their seriousness," he said.

Freeport was forced to halt overseas shipments last month after the government demanded the company first pay a $530 million deposit for a smelter before it renewed the permit.

The government is still reviewing the $1.7 billion price tag Freeport put on a stake in its local unit, he said.

"We need to agree on parameters first."

The government's non-tax revenue from mining missed its target by 43 percent in 2015 and could remain flat in 2016, also below target, he said. ($1 = 13,265 rupiah)

World's top aluminium maker plans further expansion

The Star - March 15th, 2016

SHANGHAI: The world's biggest aluminum producer has grown nearly five-fold in five years. It's about to get even bigger.

China Hongqiao Group Ltd, which last year surpassed Russia's United Co Rusal Plc as the biggest maker of the metal, would expand capacity by 16% this year to about 6 million tonnes, chief executive officer Zhang Bo said at a press conference in Hong Kong.

That comes after data showed China's aluminum output falling in the first two months of the year as companies reduce output to stem losses.

"Ultimately Hongqiao is taking market share from other producers, as they are one of the lowest-cost producers in China and globally," Daniel Kang, analyst at JPMorgan Chase & Co, said by phone from Hong Kong. Theclosely held group had kept costs down by building power plants and developing its own raw materials supply chain, he said.

Hongqiao posted a 31% slump in full year net profit on March 11, as margins were squeezed by a price plunge driven in part by excess supply in China. Hongqiao's aluminum output grew 40% last year to 4.4 million tonnes, exceeding Rusal's 3.6 million tonnes.

Aluminum prices might have bottomed out and would trade between 11,000 yuan a tonne and 12,000 yuan a tonne in China this year as demand stayed relatively strong, Zhang said. The metal last traded on the Shanghai Futures Exchange at 11,335 yuan a tonne, down 0.4% for a 4.8% gain on the year. The metal lost 17% in 2015.

"Aluminum consumption is quite strong and I think the market right now calls for more supply, not less," Zhang said. He declined to estimate how much the company will produce in 2016.

Hongqiao, based in China's coastal Shandong province, has ballooned in size since its public listing in 2011. The prospectus for its initial public offering put capacity at the end of 2010 at 1.1 million tonnes, compared with 5.2 million tonnes now.

The company was still expanding even as it cut capital expenditure, which would be 15 billion yuan this year, down from 17 billion in 2015, Zhang said.

China Hongqiao, world's largest aluminium producer, to expand capacity

South China Morning Post Publishers Ltd - March 14th, 2016

China Hongqiao, the world's largest producer of aluminium, aims to raise the annual capacity of the lightweight industrial metal by around 15 per cent this year if the market recovery continues.

The Shandong-based firm aims to spend up to 15 billion yuan this year on expanding its output capacity of aluminium, alumina, bauxite and electricity, besides retrofitting its coal-fired power plants to meet future carbon emission requirements.

Last year's spending totalled 14 billion yuan.

Its debt-funded rapid capacity expansion in an industry afflicted with over-capacity has been a concern for investors, but the firm insists its expansion is rational since its production costs are much lower than its rivals because it has its own power plants and in-house upstream materials production facilities.

"This year's actual capital expenditure will depend on market conditions," chief executive Zhang Bo said on Monday. "If demand is good, we will stick with the plan, otherwise, we can slow down new capacity expansion or even suspend expansion."

Market conditions permitting, the company aims just over 6 million tonnes of annual aluminium capacity by the year-end, from 5.19 million tonnes last year. It also plans to add up to four units of power generators of 330 megawatts (MW) each. It had 9,330 MW at the end of last year.

In the industry supply chain, bauxite is refined into alumina, which is then smelted into aluminium in an energy-intensive process. Electricity typically accounts for around 40 per cent of smelters' total operating cost.

Hongqiao on Friday posted a 31.3 per cent drop in net profit to 3.65 billion yuan for last year on the back of a 10 per cent decline in average aluminium price in China and sharply higher finance costs whereas revenue increased 22.2 per cent.

A 39 per cent rise in sales volume to 4.12 million tonnes was not enough to offset the price drop.

Zhang expects aluiminium price to range between 11,000 yuan and 12,000 yuan a tonne this year, after falling as low as 9,000 yuan in last year's fourth quarter on "irrational" sale by debt-leveraged traders.

"Traditional demand growth from construction, transportation and electrical sectors will continue, albeit at a slower pace," he said. "This will be complemented by demand from new applications like food packaging, hand-held electronic devices and computers."

He said a joint move by six of the industry's top producers to set up an aluminium stockpiling firm in January to purchase stocks when prices fall to "irrational" levels will also help support prices amid oversupply.

Aluminum Sector Presses U.S. On Chinese Exports

The Wall Street Journal Asia - March 9th, 2016

The U.S. aluminum industry is doubling down on efforts to convince the Obama administration to challenge China over trade practices that it says violate international rules and are fueling a flood of cheap Chinese aluminum imports.

A group backed by the United Steelworkers union, which includes aluminum workers, and

Co., the second-largest producer of raw aluminum in the U.S., sent a team of re- searchers to China last year to investigate evidence of government subsidies for aluminum makers, Century says.

The group says it expects to provide evidence showing the Chinese government has been providing billions of dollars in subsidies to some aluminum companies, including access to low-interest loans. It plans to present its findings to U.S. trade officials in the next few months as part of a growing push to take the grievance to the World Trade Organization, which regulates global trade and of which China is a member

separate group called the Aluminum Association, backed by aluminum giant Inc., the top raw-aluminum producer in the U.S., has made similar claims. It says it is also lobbying U.S. authorities to seek Chinese government commitments to rein in subsidized production. A spokeswoman for Alcoa says the association "represents our view on this issue."

Zhu Haiquan, a spokesman for the Chinese embassy in Washington, D.C., said he didn't have details on the aluminum case but that WTO members "should strictly abide by the WTO rules, and use trade remedy measures in a prudent, restrained and rules-compliant way."

The moves show how U.S. producers. are seeking to push back as Chinese aluminum exports, which reached a value of $23.8 billion in 2015 from $6.2 billion a decade ago, hammer rivals around the world.

"We're convinced the administration gets it," Century Chief Executive Mike Bless said in an interview.

Industry calls for U.S. government intervention have so far fallen flat.

A group of U.S. aluminum companies in October petitioned the U.S. Commerce Department, claiming a big Chinese aluminum manufacturer was engaging in deceptive practices to avoid export duties.

The Commerce Department, which was expected to rule on the claim earlier this year, instead delayed its decision. A bipartisan group of congressional representatives in February sent a letter to the House Ways and Means Committee, which has jurisdiction

Rio Tinto's Bell Bay risks closure if Tassie energy crisis worsens

Financial Review - March 8th, 2016

Rio Tinto's Bell Bay aluminium smelter could face a long-term production cutback or even closure with the loss of hundreds of jobs if it loses any more supply in Tasmania's electricity crisis, general manager Ray Mostogl? says.

Bell Bay has three pot lines capable of producing a combined 190,000 tonnes and has agreed to cut back its electricity use by 10 per cent for four or five months to help ease the crisis caused by the failure of the Basslink undersea cable and the drought.

That will cost about 10,000 tonnes of production worth $21 million but Mr Mostogl said there could be worse to come if the crisis deteriorates further. Aluminium smelters use vast amounts of electricity to convert alumina to metal and Bell Bay employs 1500 workers directly and indirectly.

"We're at a point now where we have slowed that chemical reaction up as slow as we possibly can, and any more reduction in energy would really require significant cutbacks in our production, which potentially puts that part of the process or that volume out of action for a couple of years," Mr Mostogl said.

"The world is oversupplied with aluminium so people are looking for a weak link to reduce production. So it would be difficult to mount a case to restart that lost production within the foreseeable future, and that obviouslyhas quite material impacts on employment and even our own future," he told The Australian Financial Review.

"Once you start talking about taking out a pot line or half a pot line you are on a very slippery slope."

Bell Bay uses about a quarter of Tasmania's electricity supply to produce aluminium, and is one of several large users that have agreed to cut back consumption to help Hydro Tasmania the state's monopoly electricity supplier through the crisis. Hydro's storages are 16 per cent full.

Heavy industry depends on reliable, low-cost electricity, and Singapore-listed Basslink Ltd is unable to say when it will find and fix the damage. Hydro plans to import 200 one megawatt diesel generators and millions of litres of diesel fuel each week to restore supply in the meantime.

European Commission: New Aluminium Technology Could Make Production Cleaner, More Efficient

Aluminium Insider - March 4th, 2016

Utilizing new technology now under development could reduce greenhouse gas (GHG) production in the aluminium industry by two-thirds and energy consumption by over one-fifth in 2050 according to a report released yesterday bthe European Commission's Joint Research Centre. Achievable reductions for primary aluminium production in the intervening years may be higher, according to the report, with reductions in GHG emissions of almost three-quarters and an increase in energy efficiency of almost one-quarter.

The report uses data collected from the status of the aluminium industry in EU28 countries and Iceland. JRC studied existing aluminium smelters and how they operated. The researchers also examined technologies now in development in the EU, including the use of dynamic AC magnetic fields, wetted drained cathodes, inert anodes or carbon capture and storage (CCS).

According to the data, the described reduction levels can be achieved that are now in the first stages of research. The report suggests that efforts should be made by member governments to implement policies that foster further research and development of the technologies in question, as well as efforts to make these technologies commercially viable.

The report and research done to support it bolsters the European Commission's 2015 Energy Union package. The package points out the continuing need for EU member countries to fund and otherwise encourage new technologies like carbon capture and storage (CCS) and inert anode technology (in the aluminium production process) in order to achieve upcoming climate targets in a cost-effective manner.

The total output of aluminium by the EU in 2013 was approximately 8.9 million metric tons. The EU imported 3.3 million metric tons of aluminium ingots and remelted 6.1 million metric tons that year. Primary aluminium production was roughly 4.2 million metric tons, with recycled aluminium making up the remaining 4.7 million metric tons of production.