AluNews - February 2017

Russia proposes creating aluminum OPEC: Trade Minister

Reuters - February 27th, 2017

Russia is proposing the creation of an OPEC-like organization for the global aluminum industry, TASS news agency quoted Russian Industry and Trade Minister Denis Manturov as saying on Monday.

Russia's Rusal was overtaken by China's Hongqiao as the world's biggest aluminum producer several years ago, as Rusal cut back its production capacity due to a fall in prices.

Manturov told reporters about the idea of an aluminum-making group on the sidelines of an economic conference in Russia's Black Sea resort of Sochi.

OPEC, the Organization of the Petroleum Exporting Countries, unites some of the world's largest oil producers. Its members, together with non-OPEC oil producers such as Russia, agreed to reduce oil production and support global prices in 2016.

"It is currently at the stage of a proposal," Manturov told reporters.

"At the first stage" of creating such an organization for aluminum, participation of officials such as industry ministers "would be enough".

"What is more important is that all governments, which are the main producers and exporters of primary aluminum, agree on principles of single policy in the area of standards and technology," the minister said.

Rusal, controlled by Russian tycoon Oleg Deripaska, was not available for immediate comment. Shareholders include trading giant Glencore and Russian businessmen Viktor Vekselberg and Mikhail Prokhorov.

Rusal's 2016 production rose one percent year-on-year to 3.685 million tonnes and is expected remain stable in 2017.

Prices for aluminum, used in transport and packaging, have risen 12 percent in London since the start of 2017. The metal closed 0.85 percent up at $1,901 a ton on Monday.

Higher Power Prices Prompt Partners' Write Down in Portland Aluminium

Alumin Iuminsider - February 24th, 2017

Higher power prices negotiated by the operators of Portland Aluminium with AGL Energy have prompted them to write down their stake in the joint venture by a total of USD229 million.

Year-end filings by Alumina Ltd indicate that the firm and its partner Alcoa wrote down their stake in the smelter by USD126 million each.

Though the short-term future of the smelter is secure for the next four years due to the AUD200 million bailout from the state of Victoria, Alumina Ltd's Chief Executive Peter Wasow says that, because of renewable energy boondoggles and bans on onshore gas, power will remain too expensive and too unreliable to allow Victorian businesses to compete.

"If Eastern Australia can't break the stranglehold that subsidised renewables have on the market that are forcing out not only baseload but intermediate load, I don't see how we are going to generate electricity reliably or affordably within four years," explained Wasow.

However, Wasow indicates that all is not lost, as the plant's future is not irrevocably dependent upon east-coast power grid reform. He says that studies are being carried out to discover alternative power sources for the plant pursuant to an agreement with the state government. In addition, a lower dollar or higher aluminium prices four years hence could make up for higher power costs.

"Unless the political will exists to combat the unreasonable moratoriums on onshore drilling gas and reserves are released into the market, gas will be very, very expensive and we will be short of it," he said.

Wasow went on to say that, despite a fall in underlying profit, last year was a significant time for the company

"Alumina today is a completely different corporate animal with a much better portfolio," he said.

"Restructuring has delivered the strongest refining portfolio that AWAC has yet enjoyed and made significant inroads into the third-party bauxite market, in which it is now the number two or three player."

Rusal Aluminum production increase furthur to 7.53 million mt in 2016

Scrap Register - February 21st, 2017

Alumina production in Rusal increased about 1.7 percent in 2016 to 7.53 million metric tons from 2015. Aluminum production for the year totaled at 3.63 million metric tons, which increased 1.1 percent year on year, according to Platts.

Global demand for Aluminum in 2016 increased about 5.5 percent year on year to 59.7 million metric tons. Global aluminum supply also increased 3.6 percent to 59 million metric tons year on year.

Despite 4 million mt per annum of new Chinese capacity in 2016 and some restarted capacity it is expected that the Chinese market will develop into a moderate surplus and still be at a high risk of supply tightness due to the possibility of new environmental measures against pollution and a decline in new capacity additions, Rusal said.

China's giant aluminium machine cranks up again: Andy Home

Reuters - February 21st, 2017

Global aluminium output was running at an annualised pace of 62.0 million tonnes in January, a new all-time record.

Once again this was a record forged in China.

While primary metal production in the rest of the world fell by 182,500 tonnes on an annualised basis over the course of December and January, it surged in China.

True, Chinese production figures come with a strong health warning, particularly at this time of year, but the underlying trend is becoming increasingly clear.

Smelters are responding to price signals.

In Shanghai, the most actively traded aluminium contract is trading above 14,000 yuan per tonne for the first time since November. Excepting last year's late spike, it's the highest price since early 2013.

The irony is that part of the reason for strong pricing is the threat of capacity curtailments in China on environmental grounds.

The jury is still very much out on whether that threat will become a reality but in the short term over-production rather than under-production is a more pressing issue for the aluminium price.

Graphic on aluminium production vs Shanghai price:

tmsnrt.rs/2mhkeVp

CRANKING BACK UP

Chinese aluminium output hit a new record of 2.95 million tonnes in January, according to figures from China's Nonferrous Metals Industry Association (CNIA).

That was equivalent to an annualised rate of 34.7 million tonnes, 56 percent of the world total, and represented year-on-year growth of almost 19 percent.

The statistics may overstate the reality.

CNIA aluminium production figures, published by the International Aluminium Institute, have a history of wild swings over the period covering both Western and Chinese New Years.

Still, while individual data points may be suspect the underlying trend points to a significant upswing in production, as shown in the graphic above.

Chinese aluminium production started to contract in December 2015 and failed to increase during the first half of last year.

That was a reaction to the late 2015 slump in prices to below 9,000 yuan per tonne, with some producers curtailing capacity and new projects stalling.

However, the steady recovery in prices over the second half of 2016 has incentivised restarts and new capacity additions with production growth turning positive again in September and accelerating every month since.

THE ENVIRONMENTAL IMPERATIVE

Partly priced into the most recent leg of this price recovery has been the possibility of the forced closure of aluminium capacity on environmental grounds.

China's Ministry of Environmental Protection has proposed shutting industrial capacity in five provinces over the winter months to alleviate chronic pollution problems in cities such as Beijing.

Aluminium smelting is one of the industrial sectors potentially targeted.

This, it cannot be overstated, is still a proposal and one that is likely to get plenty of pushback both from aluminium producers and local governments.

Also, while capacity curtailments are possible they are not going to happen soon since this winter is almost over.

But as smog rises to the top of the agenda for Chinese policymakers, the environmental imperative may trump all others, including economics.

A more immediate impact from Beijing's new focus on clean air has been felt by suppliers of precursor materials for aluminium smelting such as coal tar, pitch and anode.

All these industries were the subject of tough environmental inspections last year, a clampdown that has continued into 2017, according to the AZ China consultancy.

"The operating rates of coal tar and pitch plants will be at a low level over a long term period, and that will put big pressure on prices," it said.

Rising prices for these often overlooked inputs into the smelting process represent a real and present driver of higher aluminium prices, even while the vaguer, deferred threat of smelter closures lingers in the background.

Nalco Inks Power Deal with Plant to Fuel New Aluminium Smelting Capacity

Aluminium Insider - February 20th, 2017

India's National Aluminium Company (Nalco) announced an agreement last week to purchase eighty percent of the power produced by the plant proposed to be built at Gajamara. The US$2.1 billion coal-fired plant is a joint venture between Nalco and National Thermal Power Corporation Limited (NTPC) and is expected to generate 2,400 Mw.

"Nalco will be buying 80 per cent of the power which will be used for feeding our planned greenfield aluminium smelter at Kamakhyanagar close to the site chosen for the power station. Rest of the power will be sold by NTPC to other sources. We will shortly form the JV (joint venture) company for the power project," explained Nalco's Chairman and Managing Director T. K. Chand.

According to domestic reports, the power purchase agreement to govern the arrangement is expected to be finalized by the end of the current fiscal year. This project is one of several aluminium-related projects in the region that are expected to revive the economy of the area, boosting industrial growth, and generating employment among skilled, semi-skilled, and unskilled workers.

The plant is to be fueled via coal from mines allocated to Nalco and is likely to send power to the company's new greenfield smelter being constructed thirty miles away at Kamakhyanagar. The US$1.8 billion smelter is planned to have a nameplate capacity of 600 thousand metric tons per annum once it is fully operational.

In addition to the new plant at Kamakhyanagar, Nalco plans a brownfield expansion at its 460 thousand metric ton smelter at Angul. Nalco is dedicating US$1.5 billion to the expansion, which is expected to add 500 thousand metric tons per annum to the plant's capacity.

According to the company, the expansion at Angul is intended to pare down the costs of production and take advantage of economies of scale. In addition, state-of-the-art technology will be installed, enhancing energy savings and overall efficiency.

EGA Places Order for Seventh Aluminium Billet Furnace from Austria's Hertwich

Aluminium Insider - February 18th, 2017

Emirates Global Aluminium (EGA) has ordered an additional batch homogenizing furnace from Austrian aluminium equipment manufacturer Hertwich Engineering. The order, placed late last month, is for a furnace to be utilized in the heat treatment of billets and is expected to go into operation later this year.

The furnace in question, which is the seventh such unit to be ordered by EGA from Hertwich, is designed to be used with billets 125 mm to 406 mm in diameter and between 5 m and 8 m in length and has a heat range of 450°C and 620°C. The furnace's design helps to apply a more uniform heating of the billets by alternating the direction of the incident gas flow, avoiding the problem of loss of energy of the gas stream that is encountered by other furnaces. Such an improvement also significantly shortens heating time compared to other units. Additionally, instead of conventional cooling techniques that are conducted at separate cooling stations by air drawn one way across the billets, the new ovens alternate cooling airflow as well.

This oven will bring the total number of ovens Hertwich has delivered to EGA to seven – five such ovens at EGA's Jebel Ali plant, and the remaining two are in operation at the firm's Al Taweelah smelter. EGA began purchasing ovens from Hertwich in 1994 when the first continuous homogenizing plant was commissioned at Jebel Ali. As a result of initially positive experiences with Hertwich ovens, EGA is planning to replace its older batch furnaces with up-to-date units produced by the firm.

Hertwich plans to use ancillary equipment from the existing oven, including equipment that loads the trolley, the automated spacer handling, ultrasonic testing, furnace charging and operation, transfer to the cooling station and unloading the stack, sawing, weighing and packaging, to support the new oven it will be installing.

China battles air pollution and aluminium overcapacity

Aluminium Insider - February 15th, 2017

A recent proposal by China's government to halt some coal and metals production facilities to fight air pollution over the winter could affect alumina refineries and would create shortages of alumina, if implemented, but would have a limited impact on aluminium supply. This could be concluded from the latest information coming from China after The Ministry of Environmental Protection (MEP) distributed the draft to relevant local governments and companies, seeking reaction. The impact on aluminium production would likely be limited to about 1 million tonnes (Mt), the deputy chairman of the China Nonferrous Metals Industry Association, Wen Xianjun said. The plan suggests shuttering capacities during the four months when coal-powered central heating is used in northern China. The proposal involves the suspension of alumina production in three provinces, that would affect about 50 % of running capacity, in Henan, Shandong and Shanxi provinces, operations which account for about 28 Mt of the annual production, or 40 % of the nation's total.

China's northeast has battled growing pollution as emissions from metal industry, coal burning in winter and increased transport have left major cities blanketed in thick smog. The environmental authority proposes to cut operational aluminium capacity by 30%, alumina by 50% and carbon by 50% in two municipalities and 26 cities across the four provinces of Shandong, Shanxi, Henan and Hebei during the winter when air pollution is most severe in China, a source who had read the draft proposal told Metal Bulletin. Based on the cuts over three months, the measures would reduce China's total annual aluminium output by 17 %, according to Reuters calculations.

However, Chinese market participants have largely downplayed the immediate implementation of the proposed measures, saying cuts will be not be carried out until the fourth quarter of 2017 and not without "serious reworking" of the plans. Many believe the proposal is too radical and the Ministry has not considered the consequences. It's not known when the Ministry expects to decide on whether to implement the plan.

Alumina production in China in 2015, the latest for which figures are available, was 56 Mt, according to state-backed researcher Antaike. It was just under half of the world's alumina production of 112.7mil. tones. Still, based on new capacity build and restarts, Deutsche Bank predicted a 7% increase in Chinese alumina production in 2016 to 61.5 Mt and then a further 6% growth to 65 Mt in 2017. A significant amount of refineries are currently being constructed, while many new large refineries are in the planning and approval stage.

Despite that, China will continue to import between 2.5 and 3 mil. tonnes (net imports) annually during next five years, to meet demand from smelters, according to Deutsche Bank. This would result stable and even higher global alumina prices in 2017 and beyond.

Tighter alumina market in 2016 has already resulted in rising alumina prices, while from 2017 onwards, new lower cost refining capacity additions should keep pace with smelter additions, with alumina imports the balancing item.

Aluminium of Greece Collaborates with GE to Drive Efficiency Using Predix*-Based First-of-Their-Kind Digital Smelter Solutions

Business Wire - February 13th, 2017

DUBAI, United Arab Emirates--(BUSINESS WIRE)--GE (NYSE:GE) and Aluminium of Greece (AOG), a Mytilineos Group subsidiary, today signed a 10-year agreement in Dubai, the United Arab Emirates, to implement global first-of-their-kind digital smelter solutions for AOG to enhance its aluminium smelting process and contribute to increased operational efficiency and productivity.

The digital solutions are a significant step in charting the next generation of smelting operations globally. The agreement was signed by Dimitris Stefanidis, CEO of Aluminium of Greece and Joseph Anis, President & CEO of GE's Power Services business in the Middle East and Africa, in the presence of senior officials of both companies in Dubai.

"As the largest vertically integrated bauxite, alumina and aluminium production and trading unit in the European Union, we are constantly looking at innovative technologies to enhance our performance standards. The application of digital industrial solutions is a remarkable opportunity to achieve process optimization across our operations and to push productivity levels," said Dimitris Stefanidis. "With GE's digital smelter solutions, we are setting a global first for the aluminium industry that will contribute to our operational efficiency and set new benchmarks in the sector."

Underlining GE's strong global collaboration, digital strength and industrial know-how, the digital solutions for smelting operations are being created by a team of engineers and developers based in San Ramon, USA; GE Power's Digital Smelter Center of Excellence (COE) in Dubai, UAE; and GE's Global Research Center in Bangalore, India. The project will be executed by the team based at the COE in Dubai, while the facility that the solutions will be implemented at is located in Agios Nikolaos, Viotia, Greece.

"GE has been at the forefront of digitizing the future of industry globally and in the region, providing digital industrial solutions for power generation and the LNG industry, among others" said Joseph Anis. "By bringing together the strengths of our multi-locational teams and GE Power's Digital Smelter Center of Excellence in Dubai, we will collaborate with AOG to create a new chapter in the history of smelting operations as well."

GE has supported AOG's growth and development over the decades, having supplied it with advanced technologies and signing multi-year agreements to cover the maintenance of gas turbines and associated generators.

The digital solutions will operate in the cloud, powered by Predix*, GE's operating system for the Industrial Internet. Virtual sensors will facilitate the ongoing evaluation of parameters such as temperature and chemistry that are not ordinarily monitored continuously. This, in turn, will help to anticipate the health and condition of the pot, providing timely monitoring reports on the operations of the plant.

"We will be able to recreate an actual smelter using artificial intelligence and physics-based models," stated Bhanu Shekhar, Chief Digital Officer for GE Power in the Middle East and Africa. "This is a living digital model that will continuously generate smelter data, and will be a game changer in helping to address the challenges of power usage and the consumption of raw materials in the smelting industry."

"The application of the digital smelter solutions will contribute to the operational efficiency improvement of the Aluminium of Greece, by lowering raw materials' consumption, decreasing energy consumption, and reducing pot leakages," concluded Dimitris Stefanidis.

GE's digital solutions for aluminium smelting can help unlock a new era of productivity for this critical industry in Europe, the Gulf Cooperation Council (GCC) and beyond. A one percent increase in efficiency of aluminium smelter operations can contribute to an annual global savings of US$970 million across the total cost of production, US$936 million in output increase, and US$464 million in operations and maintenance costs. In the GCC region alone, the same one percent increase translates into US$28 million in savings on operations and maintenance. Today, the region's aluminium smelting industry accounts for up to ten percent of the world's total production, and GE has a strong history of leadership in the sector to enhance competitiveness, efficiency and sustainability for customers.

Aluminium smelter feels the heat of uncertain electricity supply

The Australian - February 13th, 2017

The Tomago aluminium smelter in NSW has avoided a potentially damaging second shutdown after a tumultuous 48 hours that highlighted its susceptibility to electricity supply shocks.

Tomago had braced for a crisis at the weekend after learning that AGL Energy, which feeds electricity into the smelter, was planning to withdraw its electricity.

The utility had already cut its supply to Tomago on Friday afternoon as spot prices for electricity soared amid the state's heatwave.

But while demand on Saturday soared to levels similar to those seen on Friday afternoon, spot prices failed to spike to the same level.

Whereas the spot price surged to $14,000 per megawatt hour during peak demand on Friday, prices briefly slumped to just $88 per megawatt hour on Saturday afternoon and went no higher than $449.80 per megawatt hour when demand was at its highest.

The lack of a similar price move appeared to reprieve Tomago, with AGL opting not to go through with its planned curtailment of supply.

The Tomago smelter ­represents about 10 per cent of NSW's electricity consumption.

Australian Workers' Union national secretary Daniel Walton said AGL's ability to withdraw its supply had created significant uncertainty for the smelter, located just outside Newcastle.

"The company and the union are working together to minimise disruption and loss, but it is increasingly difficult to predict what AGL will do next," Mr Walton said.

Electricity outages can be crippling for aluminium smelters if their potlines cool and freeze, with a major power outage at Alcoa's Portland smelter in Victoria causing serious problems late last year.

The Portland outage initially forced the closure of more than half of its manufacturing ­capacity, prompting fears the smelter may be forced to close.

Alcoa eventually agreed to keep Portland operating until 2021 after the state government committed more than $200 million towards subsidising the smelter's power agreement with AGL.

The move came as 18 business and community groups banded together calling for a fix to the nation's rising energy strains.

"The status quo of policy uncertainty, lack of co-ordination and unreformed markets is ­increasing costs, undermining investment and worsening ­reliability risks. This impacts all Australians, including vulnerable low-income households, workers, regional communities and trade-exposed industries," they said in a statement that includes backing from members of the Business Council of Australia, the Australian Aluminium Council and The Australian ­Industry Group.

At Tomago, employees and managers worked through extreme heat on Saturday to prepare the smelter's potlines for the shutdown. "On Saturday, management and AWU members at the smelter were expecting an outage and made preparations for it but it never happened," Mr Walton said.

"This is extremely disruptive for a company and a workforce trying to navigate difficult economic circumstances."

A spokeswoman for AGL declined to comment further, but a statement from AGL on Saturday said the company had provided "significant notice" to Tomago to allow them to prepare for the outage as required under its agreement with the smelter. AGL said the smelter had been able to go through such situations in the past without adverse effect.

"The commercial agreement has been in place with the smelter since 1991 and exists to give flexibility to AGL to manage its customer load during plant ­outages," the statement from AGL said.

Tomago aluminium smelter 'on the verge of disaster' as electricity cut off

Illawarra Mercury - February 10th, 2017

The Tomago aluminium smelter near Newcastle is on "the verge of disaster" after it was hit with an energy curtailment notice by energy supplier AGL on Friday afternoon.

As the state's power grid comes under increased pressure due to extreme heat, the smelter – the largest energy consumer in the state – has been asked to reduce its consumption for almost four hours from 3.45pm on Friday, a process that chief executive Matt Howell has warned will force workers to operate in "extreme heat", potentially causing a "catastrophic" outcome.

Mr Howell said that the Australian Energy Market Operator (AEMO) had confirmed it needed the smelter, which consumes 12 per cent of the state's energy, to bring down its energy consumption for a maximum of three hours.

AEMO has already warned that forecast demand from 5pm to 6pm will exceed supply by 189 megawatts.

The agency has called for a "market response" and said it would intervene "as required".

The market operator said in a separate statement that it had advised generators of "potential electricity supply shortfalls" in NSW and ACT during the afternoon peak from about 3.30pm until 5.30pm.

But Mr Howell said AGL has signalled a curtailment of 3 hours and 45 minutes – one hour and 15 minutes for each of the smelter's potliners – above what AEMO asked for.

The curtailment began at 3.45pm, as scheduled.

"You would have to ask AGL why they are doing that," he said.

The longer time period is significant because of the heat that the smelter operates at. The longer operations are cut off, the more likely damage becomes.

A similar situation unfolded in the Victorian city of Portland in Victoria in December, where a power outage forced molten aluminium in more than 200 smelting pots to cool and solidify.

"Every minute causes significant cell instability … once you turn it off there's a risk it wont come back on," Mr Howell said.

In a statement, a spokeswoman for AGL said if power to the smelter was not curtailed, "schools, homes and other small businesses will suffer a loss of power at the peak periods of demand this afternoon".

"AGL has certain contractual rights in relation to interruption of the supply of electricity to the Tomago Smelter," she said.

"To maintain the stability of the electricity system, AGL has agreed with AEMO that it will exercise these contractual rights.

"AGL's contractual rights have been long agreed with Tomago to support the security of supply to NSW in conditions such as those today.

"They are not intended to cause damage to the facility, provided Tomago's procedures are followed.

"This procedure has been implemented previously without adverse effect in similar circumstances to those that exist today."

However Mr Howell said it was a "disgrace" that the smelter was being forced to cut its operations.

"This is a direct consequence of insufficient generation in the market," he said.

"We should have the cheapest, most reliable energy in the world and yet it's the most expensive and least reliable.

"It's a disgraceful situation that needs to be fixed."

The Australian Workers Union has accused energy supplier AGL of "bastardry", and called for Prime Minister Malcolm Turnbull to "pick up the phone" and intervene.

"AGL has its hand hovering above a button that could batter the Tomago aluminium smelter and put a wrecking ball through the regional economy," the union's National Secretary Daniel Walton

"Our information is that power could be cut this afternoon for a period of four hours. If that happens, the results could be catastrophic.

"Workers will have to pull out all stops in sweltering heat to save the plant's equipment. They may not be successful.

"Tomago is in a precarious economic position and it cannot afford for AGL to cut power. For AGL to do so would be an unimaginable act of bastardy."

Meanwhile NSW opposition leader Luke Foley has called on the Berejiklian government to explain why the Liddell Power Station in Muswellbrook is running at only half capacity.

Mr Foley today said "whistle blowers" had told him that just two of the four units at Liddell Power Station were operational.

The reports were confirmed with the Australian Energy Market Operator.

"The Premier's top priority over the coming days is to ensure the reliable supply of electricity," he said.

Norsk Hydro: China to boost aluminium output by up to 9 pc in 2017

South China Morning Post - February 10th, 2017

Norway's Norsk Hydro, one of the world's top aluminium makers, said on Thursday it was unclear whether China would cut production this winter to battle smog and that it expected the country's aluminium output to rise by up to 9 per cent this year.

Expectations that Beijing will scale back production to improve air quality from November have helped drive aluminium prices to 20-month highs.

But Norsk Hydro chief executive Svein Richard Brandtzaeg said that was far from certain.

"We have heard similar signals before (from the Chinese government) without necessarily seeing dramatic changes," he said in an interview.

If implemented, the cuts would take place against the backdrop of rising Chinese capacity, as new energy efficient production comes on line and rising prices entice smelters that shut down in 2015 to restart. China accounts for around half the world's aluminium production.

Norsk Hydro said it expected Chinese primary aluminium output to increase by 7-9 per cent this year after growing 3.7 per cent in 2016.

"The ramp up of new capacity continued in the northwest regions (of China), in Shandong in the east, in Guizhou in the south east of China and in Inner Mongolia in the north," Norsk said in a statement.

Chinese demand meanwhile would grow by 4-6 per cent this year after rising 7.4 per cent in 2016, Norsk said.

Norsk said it expected China to have a 1.5 million tonne surplus of aluminium this year, offsetting a deficit of 1.5 million tonnes elsewhere in the world.

Rio Tinto Sets Production Records for Bauxite, Alumina, and Aluminium in 2016

Aluminium Insider - February 9th, 2017

Anglo-Australian metals and mining titan Rio Tinto released results for 2016 yesterday. The firm touted the US$8.5 billion in cash generation and US$3.6 billion in shareholder returns it generated over the course of last year.

Net cash generation was down ten percent year-on-year from US$9.383 billion, but underlying earnings were up, coming in at US$5.1 billion, a 12% increase over last year's total of US$454 billion. Net earnings ended the year in the black at US$4.617, a turn-around from last year's net loss of US$866 million.

As of the last day of 2016 Rio carried a net debt of US$9.587 billion, which is 30% less than at the end of 2015 when net debt totaled US$13.783 billion.

Rio Tinto placed a particular emphasis on developing its aluminium and bauxite trade during the last fiscal year, but production gains were largely offset by a drop in the market's prices. The firm delivered 47.7 million metric tons last year, 9% above 2015's production of 43.7 million tons. Alumina production ended the year at 8 million metric tons, 5% more than the previous year's total of 7.8 million metric tons. Primary aluminium production rose as well, from 2015's total of 3.3 million metric tons to 3.6 million metric tons last year, which was good for a 10% increase.

The firm said it set production records in all three areas – at Weipa and Gove for bauxite, Yarwun, Jonquière, and São Luis for alumina, and at ten of the company's smelters, including Kitimat, for primary aluminium. Kitimat was particularly notable for reaching its nameplate capacity of 420 thousand metric tons per annum in the spring of last year.

Gross sales of aluminium, alumina, and bauxite for the year totaled US$9.5 billion, down 7% from 2015's US$10.1 billion. Underlying EBITDA dropped 10% year-on-year, from US$2.7 billion in 2015 to US$2.5 billion last year. Underlying earnings fell 15% to US$947 million last year fro US$1.2 billion in 2015.

"Today's results show we have kept our commitment to maximise cash and productivity from our world-class assets, delivering $3.6 billion in shareholder returns while maintaining a robust balance sheet," opined Rio Tinto's CEO J-S Jacques. "At the same time, we strengthened the portfolio and advanced our high-value growth projects as we look to the future."

"We enter 2017 in good shape," he went on. "Our team will deliver $5 billion of extra free cash flow over the next five years from our productivity programme. Our value over volume approach, coupled with a robust balance sheet and world-class assets, places us in a strong position to deliver superior shareholder returns through the cycle."

Rio Tinto expects to finish the year having produced 48 to 50 million metric tons of bauxite, 8.0 to 8.2 million metric tons of alumina, and 3.5 to 3.7 million metric tons of primary aluminium.

$700 million African bauxite mine contract awarded to Fluor

Mining Global - February 9th, 2017

Fluor Corporation, one of the world's largest publicly traded engineering, procurement, construction (EPC), maintenance, and project management companies, has announced that it has been awarded an engineering and program management consultancy contract for a major bauxite mine in the Boké region of Guinea, Africa. The contract, approximately $700 million in value, was awarded by Guinea Alumina Corporation S.A (GAC).

Working alongside GAC, Fluor will manage the development of a 12 million-tonne-per-annum bauxite mine, a dedicated export terminal in Port Kamsar and rail and other infrastructure upgrades.

The mine, which is scheduled to begin production in 2018, will supply high-quality raw materials for alumina production facilities globally. Fluor successfully completed the feasibility study for GAC in the second quarter of 2016.

"Fluor has worked with GAC since the preliminary phase of the project to develop a customized, capital-efficient design to meet the company's unique business objectives," said Rick Koumouris, president of Fluor's Mining & Metals business.

"We will leverage our global expertise in marine structures, port terminals and mineral processing along with our experience in Guinea to deliver innovative design and project execution solutions that improve capital efficiency."

"Guinea Alumina Corporation, a key investment for Emirates Global Aluminium, will drive significant local growth within Guinea and secure Emirates Global Aluminium's position upstream in the aluminium chain," said Abdulla Kalban, managing director and chief executive officer of Emirates Global Aluminium, which owns GAC.

"We look forward to our continued relationship with Fluor to ensure further cost optimization and ultimately a safe and successful project."

Altech Chemicals Offers Update to High-Purity Alumina Project

Aluminium Insider - February 7th, 2017

Australia's Altech Chemicals Ltd announced an update on the due diligence activities surrounding funding of its high-purity alumina (HPA) project.

According to the update, the independent reviews and pilot plant test work associated with the project are approaching completion. The firm has been working with German KfW IPEX-Bank on structuring financing for the project.

Altech elaborated upon the due diligence being carried out by detailing visits to sites in the Western Australia cities of Meckering, Fremantle, and Perth, as well as to a site in Johor, Malaysia in August of last year. According to the company, no major flaws were uncovered in the initial reviews at those sites.

Pilot plant confirmatory test work programs and detailed audits were requested, however. Altech says such test work are now in progress.

"The last five months have been extremely busy for the company as we worked with the various due diligence consultants to complete confirmatory pilot plant test work and respond to a large number of detailed information requests," explained Altech's managing director Iggy Tan.

Altech Chemicals is based in Subiaco, Western Australia and is attempting to develop a marketable process for delivering 99.99% (4N) HPA. It plans to construct a 4,000 metric ton per annum HPA plant at Tanjung Langsat Industrial Complex, Johor, Malaysia. The plant is expected to be fueled by the company's kaolin deposit at Meckering, Western Australia. The firm is fast-tracking HPA production due to an agreement with Mitsubishi for 100% of its proposed HPA production for ten years.

Tajikistan to Increase Primary Aluminium Production in 2017

Aluminium Insider - February 3rd, 2017

Tajik Minister of Economic Development and Trade Negmatullo Hikmatullozoda told a local news agency on Tuesday that his country is expecting to produce 179 thousand metric tons of aluminium, an increase over 2016's total of 129.3 thousand metric tons.

The minister emphasized that the plan is only preliminary at this juncture, the number hinging upon aluminium price and global demand for the metal. He said that globally, including in CIS countries like Ukraine, Armenia, and Kazakhstan, demand for the metal was not as strong as expected.

Minister of industry and new technology of Tajikistan Shavkat Bobozoda told local media last month that the country plans to increase domestic processing of primary aluminium. He went on to say that domestic demand was in the area of 30 thousand tons per annum, and the country's capacity is expected to rise to a high of 10 thousand metric tons in the current year.

Aluminium is a significant contributor to Tajikistan's economy. Tajikistan Aluminum Company (TALCO) is the country's largest state-owned enterprise and has a yearly capacity of 500 thousand metric tons. Its operations make up almost half of the country's GDP and ninety percent of its foreign exchange earnings. The firm uses forty percent of the electricity generated by the country and is one of its biggest taxpayers.