AluNews - May 2003

Kaiser curtailing last Ghana smelter line

Spokesman-Review 5/1/03

John Stucke, Staff writer

Kaiser Aluminum is curtailing the last potline at its Ghana smelter because of power shortages.

The company characterized the temporary shutdown as voluntary and said it intended to restart the plant after the rainy season replenishes Lake Akosombo later this year.

The curtailment further dwindles Kaiser's global metal-making role, already shrunk by the sale of its Tacoma smelter and the indefinite closure of the Mead smelter.

Kaiser and the government of Ghana have been sparring for more than a year over the Valco smelter's electricity supply.

The problems go back to more than a year ago, when Ghana reduced the electricity allocation to the smelter, forcing production cutbacks. Kaiser had filed for Chapter 11 bankruptcy a month earlier.

In January, Ghana reduced the smelter's allocation further. That prompted Kaiser to seek arbitration. The matter will be heard by the International Chamber of Commerce in Paris.

Kaiser is seeking to recover damages and declaratory relief. The company has not disclosed how much money it seeks.

The only property producing aluminum for Kaiser is a smelter in Wales. Kaiser owns a 49 percent minority interest in the smelter. The other 51 percent is owned by Rio Tinto.

The metal shipped from that smelter is sold into the European market.

Before the smelter closures, Kaiser was a leading aluminum producer.

When running at capacity, the Ghana smelter can produce 200,000 metric tons of aluminum each year, about the same as the Mead smelter.

3 firms begin due diligence on ALSCON

This Day, Nigeria, 1/5/03

From Nneoma Ukeje-Eloagu in Abuja

The National Council on Privatisation (NCP) has approved Dangote Industries Nigeria Limited (DINL) as the preferred bidder for the Audit Section of Nigeria Hotels Limited (NHL) with an offer price of N100 million.

The NCP also approved Chyzob Enterprises as preferred bidder for No 8 and 10 Lees Road Ikoyi, also properties of NHL at offer prices of N131 million and N70 million respectively.

Dangote Industries is also reserve bidder for No 8 Lees Road with an offer price of N130 million while Beta Consortium is reserve bidder for No 10 Lees road with an offer of N51.5 million.

However, Ferrostaal of Germany, ALCOA of USA and Russian Aluminum in conjunction with Brastsk Aluminum plant are set to commence due diligence on Aluminum Smelter Company of Nigeria (ALSCON) next Monday for three weeks. The three companies are in a quest for 51 per cent controlling equity and management control in ALSCON.

A statement from the Bureau of Public Enterprises (BPE) signed by the agency's Deputy Director, External Relations also notes that the BPE has been directed to commence negotiations with Dantata Investments & Securities Limited (DIL) requesting that they review upward their bid price of N160 million for Central Hotel Limited, Kano.

Meanwhile, prospective investors in ALSCON have been issued bidding documents and the Information Memorandum following their payment of $15,000 non-refundable applicable fee.

The Federal Government's share holding in ALSCON increased to 90 per cent after writing off several of the company's debts including housing estates, access roads, reclamation, dredging and harbour, and converting what was left to equity. Ferrostaal of Germany, a current shareholder and prospective core investor has 7.5 per cent while ALCOA another prospective core investor holds 2.5 per cent equity.

The NCP had last year approved guidelines directing that prospective core investors must supply verifiable evidence of their ability to own and technically manage ALSCON before they can be pre-qualified.

Such evidence would include a record of successful investment and technical management in an aluminum smelting company as well as the requisite financial resources and technical competence to improve and run the plant efficiently. This is expected to enhance financial and economic value to shareholders in particular, and Nigerians in general.

Technical and operational capabilities must also be demonstrated by indicating number of years in aluminum smelting industry, local and international experience in the industry and a list of plants owned or managed by the prospecting firm.

Kaiser Aluminum Comments On Corporate Strategy

HOUSTON, Texas, May 2, 2003 - Kaiser Aluminum today affirmed its strategy of maintaining market leadership and growth in the aluminum fabricated products business upon emergence from Chapter 11.

In light of that strategy, and to further the ultimate planned emergence from Chapter 11 -- which the company's advisors have indicated could occur in 2004 -- Kaiser has determined that it is appropriate to explore the possible disposition of one or more of its assets in the commodity-oriented businesses of bauxite/alumina and primary aluminum.

In commenting on the strategy, Kaiser's President and Chief Executive Officer Jack A. Hockema said, "The key word here is 'explore.' We will only consider pursuing transactions that are on acceptable terms, and any potential sale of assets would be subject to a number of prior approvals including, but not limited to, the company's Board of Directors, the Bankruptcy Court, and the company's Debtor-in-Possession lenders. Clearly, although we are exploring the alternatives, we have made no definitive decisions as to whether we will pursue any specific transactions, no such transactions are imminent, and no assurances can be given that any acceptable transactions will ultimately materialize.

"I want to emphasize that during this exploration, Kaiser will maintain the same unwavering commitment to quality and service for which we are known in all of our businesses," Hockema said. "In short: business as usual for customers, suppliers, and employees."

Ferndale plant shutdown will affect taxes

by Matt McDonald

The Western Front, WA May 02, 2003

The Whatcom County economy is in danger because the Alcoa Intalco Works aluminum smelter in Ferndale will begin layoffs in the coming weeks because of high power rates and may shut down completely, leaving many more employees without jobs.

Alcoa, the sixth largest employer in Whatcom County, announced on April 23 that 125 of the 689 Ferndale aluminum smelter employees would be laid off this year. If power rates continue to rise, the complete shutdown of the plant may take place when the power supply agreement with Bonneville Power Administration ends Sept. 30.

The BPA has proposed to increase power rates as much as 15 percent because of the drought season and the 2001 Western Washington energy crisis, said Mike Hansen, press officer for the BPA.

The BPA's 15 percent power rate increase will cost $30 million per year to power the Ferndale plant, said Mellani Hughes, public affairs and communications manager for the northwest region of Alcoa.

"I don't think any smelter in the world can operate at those energy rates they are proposing," Hughes said.

Hansen said increased power rates are not the main reason for the plant's layoffs and possible closure. He said the dropping world aluminum market price could contribute as well.

Alcoa's Ferndale and Wenatchee plants consume half of the energy that is taken to power all of Seattle, Hansen said. To keep power rates low for the rest of their clients, the BPA had to take another course of action with the Ferndale plant.

"We have been paying Alcoa approximately $20 per megawatt to not take our power because of the energy crisis we went through a year ago to pay their employees while they were down," Hansen said.

The Ferndale plant reopened April of last year under the capacity of the BPA deal, Hughes said. The plan was designed when the plant was down, so employees still received pay.

The direct impact of the Ferndale plants layoff and closing could cause a ripple effect of job losses in Whatcom County and estimates are taking place on the total amount, said Hart Hodges, director of the center for business and economics research.

Job losses are not the only problem for the local economy. The plants property taxes totaling $1.6 million to be paid to the local government will be lost if the plant shuts down and cannot pay.

"(Whatcom County) taxpayers will pay for the lost smelter property tax," Whatcom County assessor Keith Willnauer said.

U.S. Rep. Rick Larsen, D-Lake Stevens, has pushed the BPA not to raise energy prices by reducing costs and suggesting other ways for the BPA to deal with financial troubles.

Alcoa is a formal participant in the BPA rate case; and the employees are active in trying to generate state and local support, Hughes said.

"Unfortunately it is a federal agency decision, so local support only gets you so far," she said.

The BPA is trying to reduce power rates internally by putting a freeze on hiring, giving no employee bonuses for 2003 and reducing staff, Hansen said.

"The best scenario is aluminum rates go up and they can pay for power, while our rates go down and people can go back to work ... we are holding out with hope," Hansen said.

If the plant does not shut down, county taxpayers may still have to make up for lost tax money, Willnauer said.

Pechiney still eyes Corus arm

By Rebecca Bream

Published: May 4 2003 17:59 | Last Updated: May 4 2003 17:59

Pechiney, the French metals group, still hopes to buy Corus's aluminium division, a deal thwarted in March by the steelmaker's Dutch supervisory board, but it does not expect the sale process to restart for some time.

Philippe Varin, who joined Corus as chief executive from Pechiney last week, reiterated the company's strategy of selling its aluminium assets to concentrate on the carbon steel business. But opposition from members of Corus's Dutch supervisory board, who do not want the sale simply to subsidise lossmaking UK steel plants, will have to be surmounted before the disposal takes place.

Last October, Corus agreed to sell its aluminium assets to Pechiney for €750m (523m), and the two parties are bound by an exclusivity clause until October this year. Although Pechiney's management thinks the disposal could take longer than that, it is confident the French group has the best chance of clinching the deal.

Olivier Mallet, chief financial officer of Pechiney, said: "Nobody else will get it. The synergies provided by Corus's aluminium business are still best with Pechiney."

Pechiney is particularly interested in Corus's aluminium plant in Koblenz, Germany, which specialises in flat rolled products for the aerospace industry. Part of Corus's restructuring plan is to scale down its aluminium-smelting business and concentrate on making more higher margin aluminium products to sell to aeroplane and car manufacturers.

Mr Mallet said Pechiney was not aware of the problems with the Corus aluminium disposal until the split between the steelmaker's Dutch and UK staff became public.

Canadian Companies Have C$16.5 Bln Pension Shortfall, Post Says

By Reg Curren

Toronto, May 3 (Bloomberg) -- Canada's largest publicly traded companies, including Nortel Networks Corp. and Bombardier Inc., have a combined C$16.5 billion ($11.6 billion) shortfall in their pension plans, the worst shape they have been in for 30 years, the National Post reported.

An analysis of Canada's Standard & Poor's/TSX 60, the index containing the country's 60 biggest companies by market value, found more than 70 percent have pension deficits, with nine exceeding C$500 million, the newspaper said. The Post conducted its own study, the paper reported.

The deficit jumped five-fold at the end of 2002 compared with the year-ago period because declining stock markets reduced the value of pension-fund assets as liabilities rose with an aging population, the Post said. At the end of 2002, the combined deficit -- the gap between current and future pension obligations and the expected value of future investments -- soared to C$16.5 billion from C$3.3 billion.

Leo de Bever of the Ontario Teachers' Pension Plan said the country's pension funds haven't been in such poor shape since the 1970s, the newspaper reported. Deficits don't mean workers won't get their pensions when they retire, though they have meant increased contributions from companies to cover the shortfall, creating ``a serious drag on corporate earnings,'' de Bever told the Post.

Nortel, Bombardier, Alcan Inc. and Imperial Oil Ltd. account for more than half of the C$16.5 billion, the paper said.

Alcoa agrees to buy stake in South America operations for $410 million

Associated Press, Mon, May. 05, 2003

PITTSBURGH - Alcoa Inc. said Monday it had agreed to purchase a Brazilian company's share of the aluminum maker's South American operations for $410 million.

The purchase of the stake from Camargo Correa, one of Brazil's leading construction groups, would give Pittsburgh-based Alcoa complete control of its South American operations.

Under the deal, which the aluminum maker expects to complete by the third quarter, Alcoa will buy Camargo Correa's 40.9 percent shareholding in exchange for $410 million of common stock, roughly 18 million shares.

Alcoa, based in Pittsburgh, is the world's leading producer of aluminum.

Committee passes Noranda bill despite deregulation fears
Skieston Standard Democrat, MO 05/04/03
Kyle Schlosser

JEFFERSON CITY — Noranda’s hopes to find a reasonable price for power after June 2005, which is when the previously attained power for the aluminum smelting plant runs out, were given a boost on Thursday. The house committee on Communications, Energy, and Technology voted Senate Bill 555 (SB 555) 14-6 “do pass” to the floor of the Missouri House were it will be debated in the next few weeks.

The passage of this bill to the floor was not without controversy from many on the committee.

Senator Peter Kinder described SB 555 as an effort to “save 1,100 aluminum workers jobs.”, while some on the House committee saw SB 555 as a “slippery slope” into the deregulation of municipal utilities. Many in the House called this bill the “camel’s nose in the tent” meaning that once the bill is passed it will be hard to keep other companies from wanting to buy their power on the open market as well to get a better price.

These fears are not only those of legislators, but also those of union organizations. The AFL-CIO and the United Steelworkers of America oppose the bill, the very people whose jobs the bill is trying to save. The unions are afraid of this small scale deregulation as becoming something much larger and similar to the California deregulation crisis. In California, aluminum smelting plants choose instead to make money off of their already bought power instead of keeping the plants open and profiting off of the power crunch seen in recent years in that state.

During an executive committee hearing held on Thursday after the Missouri House session adjourned for the week, members of the committee added an amendment restricting the sell of the power bought by Noranda in hopes to suppress fears of the unions.

The representatives of Noranda attending the hearing did not have time to comment on the remarks made by the representative of the United Steelworkers of America regarding this fear. During the testimony of the representatives of Noranda, which included George Swogger and Steve McPheeters, both of Sikeston, stated that if Noranda is lost, most of the work they do will go across the river to Kentucky. In Kentucky there are two aluminum smelting plants which have fixed rate power through 2010.

They further went on to state that they are truly different and unique to the state of Missouri, as they are running at peak levels of power usage 24 hours a day. To this they added that they were not looking for deregulation of municipal utilities. Which did little to change the opinions of some members of the committee without help from some Bootheel area members of the House of Representatives. Rep. Lanie Black and Rep. Peter Myers both worked for the passage of this bill in the committee and came to an understanding with most of its members that this was a needed piece of legislation for the economic future of the very poor Bootheel area. Black even missed his Agriculture Committee hearings in order to sit through the two meetings this week regarding this bill. Opposition could grow as the bill waits for its turn on the House floor among those with fears of municipal utility deregulation. As some in the committee hearing vowed to Black and Myers not to vote against it, but said they would also not vote in favor for it. The fight for this bill can be summed up by the comments of Rep. Schlottach of Gasconade County regarding SB555 “There is no easy way to get off of this train”; either the Representatives are against the bill and losing 1,100 Bootheel area jobs or voting for it and risking other companies asking for the same treatment.

ADWEA in Sohar smelter talks

Gulf News, United Arab Emirates Dubai |By A Staff Reporter | 05-05-2003
Oman and Abu Dhabi Water and Electricity Authority are negotiating the establishment of an aluminium smelter in Sohar.

The project also involves an unnamed international strategic investor and technology provider, announced a senior Omani official at the International Investment Summit.

"LNG-based projects are one of the major focus areas of the Omani government. Several studies commissioned by the government have clearly brought out the comparative advantage in industries on natural gas," said Maqbool bin Ali bin Sultan, Omani Minister of Commerce and Industry.

"While the LNG project was commissioned a few years ago and its further expansion is underway, the other projects are under implementation," he added.

Eskom, IDC show interest in $2.1bn Pechiny smelter

Business Report, Africa May 9, 2003

By Reuters

Johannesburg - Power utility Eskom and the government's Industrial Development Corporation (IDC) were considering taking a combined 25 percent stake in French metals giant Pechiney's $2.1 billion aluminium smelter project near Port Elizabeth, officials said yesterday.

"It has always been our intention to consider taking a maximum of 25 percent [in the Coega smelter]," said Eskom spokesperson Fani Zulu. He did not give details.

Pechiney said earlier the project was expected to lead to production of about 460 000 tons of primary aluminium a year. Construction was scheduled to begin later this year.

State-owned Eskom had signed an energy supply contract for the smelter. It would invest $294.5 million to kick-start the Pechiney smelter.

Pechiney said in February it was looking for investors to take between 55 percent and 65 percent of the new smelter.

"Pechiney ... is keeping the discussions very close to its chest and we have not been brought into that circle," said Vuyelwa Vika, a spokesperson for the Coega Development Corporation (CDC), which manages the east coast site where the smelter will be built

Quoting research data, the CDC said global demand for aluminium was expected to reach a record 22.4 million tons by 2005 - at least 2.73 million tons above last year's demand.

Pechiney had already awarded a $742.8 million contract for general construction and management of the smelter in the Coega industrial development zone to specialist construction firms Technip-Coflexip of France and Bateman of South Africa.

The government was keen to produce positive spin-offs from Pechiney to drive economic activity in the poverty-stricken Eastern Cape.

The Pechiney smelter would generate an increased income of $26 million a year to the Port Elizabeth area, the CSIR said.

On a national scale, the smelter would result in additional income of between $184 million and $267 million over the construction period, the CSIR said in a research note.

As a result of this investment and downstream economic activity, between 36 541 and 57 553 jobs would be sustained or created, Vika said. - Reuters

Action urged to limit impact of Brussels emissions rules

By Joanna Chung
Financial Times (subscription), UK Published: May 12 2003
Aluminium producers and chemical companies have urged the government to use its influence in Brussels to reduce the impact of a European Union environmental directive.

The companies fear the directive, aimed at stemming carbon dioxide emissions, will further damage their competitive edge.

To meet the commitments of the Kyoto Protocol, the EU emissions trading directive - to be introduced in 2005 - will come into effect with an existing UK regulation that already imposes a climate change levy.

Jeremy Nicholson, director of the Energy Intensive Users' Group, said: "Industry feels very strongly that it has been singled out with the climate change levy and it seems that it is a double insult to face the two together."

By entering into 10-year negotiated agreements with the government, companies can receive an 80 per cent discount on the levy if they meet their energy-efficient targets. Under this regime, British industry cut carbon dioxide emissions by 13.5m tonnes last year, beating targets by almost three times.

The EU emissions trading scheme, based on a "trade-and-cap" concept, would set caps on absolute emission targets of carbon dioxide per installation in designated sectors. Companies would, in effect, buy excess emissions on the market. The government is working on a national allocation plan for emissions limits to be set for each affected installation.

"We simply don't know what the price of carbon will be on the market," said Mr Nicholson. "The lower [the emissions cap] is set, the higher the rate. It is a risk issue for the industry. We simply don't know what the financial impact will be. It does nothing for certainty of investment or planning. The only thing we do know is that we will be clobbered with something."

Wyn Jones, managing director of Alcan Smelting and Power UK, said that although he agreed with the principle of emissions trading as a "flexible and efficient" way to reduce emissions, he said it was "incompatible" with existing climate change agreements between government and industry. "Excessive taxation or regulatory pressure will inevitably result in future investment being targeted overseas rather than in the UK," he added.

Speaking to the all-party parliamentary group for the aluminium industry last week, Mr Jones urged the government to use current negotiated agreements as a model for the EU regulation.

Robert Siddall, utilities policy manager at the Chemical Industries Association, said: "Every year we will have to work a little harder to improve emissions."

He said that cutting down needed to remain reasonable and achievable. "We accept that we have to do our bit but at the same time we want a competitive chemical industry."

Alcoa set for big refinery growth

The West Australian, Western Australia, May 11, 2003

By Michael Southwell

MINING giant Alcoa is preparing to announce a big expansion of the controversial Wagerup alumina refinery near Yarloop.

The $1 billion project would boost output at Wagerup from 2.3 million tonnes a year to 3.5 million tonnes or 4 million tonnes, making it the world's biggest alumina refinery.

It is understood Alcoa is also considering expanding its Pinjarra refinery.

Environmental and health concerns have plagued Alcoa's WA operations in recent years.

A State Government-sponsored forum of medical experts, which includes representatives from Alcoa, has established that emissions from the Wagerup plant are linked to health problems among nearby residents.

Since late 2001, Alcoa has settled some claims from workers and bought dozens of properties around the plant from people who complained that fumes were making them ill.

Environment Minister Judy Edwards said in December 2001 she would instruct the Department of Environment Protection not to grant any new environmental licence to the Wagerup refinery which would allow an increase in emissions.

Yesterday, Dr Edwards said environmental licensing approval for any expansion plan would depend on the results of an independent emissions audit report which would be available soon.

Alcoa says it has significantly reduced emissions from the plant.

In recent weeks, Sydney-based public relations consultant UMR has been conducting telephone surveys and focus groups in towns around Wagerup and Pinjarra to gauge community feeling about Alcoa, on behalf of the company. Local people were given $75 and a free meal to take part in discussions.

State Development Minister Clive Brown is said to be supporting the Alcoa plan and is understood to have taken the issue to Cabinet.

Mr Brown failed to respond to questions sent to him on the issue by The West Australian last Wednesday.

Alcoa has had plans to expand Wagerup since 1995, when it obtained approval for the project from the Environmental Protection Authority.

In July last year, the public outcry over health and environment issues forced the company to announce it would shelve the expansion plans, in favour of expanding another refinery in Jamaica.

But in February, Alcoa World Alumina executive vice-president John Pizzey said expansion of the Wagerup and Pinjarra refineries remained on the drawing board.

Alcoa spokesman Brian Doy said expansion in WA could be considered only when Alcoa felt it had community and government support.

Mr Doy said the polling of community issues around Wagerup and Pinjarra was part of a process to ensure the company understood and remained responsive to community issues and attitudes.

Yarloop Concerned Residents Committee chairman Tony Hall said increasing the size of the Wagerup refinery would sound the death knell for the community.

"It would be an outrageous move, considering they have failed to resolve the existing health issues here and failed to prove that the emissions reduction work has actually changed anything," he said.

"A lot people have said that if that plant is allowed to expand, they are going."

DJ Malaysia Plant To Produce 230,000 MT/Yr Aluminum By '06

Kuala Lumpur, May 13 (Dow Jones) - Masco Aluminium Bhd is building an aluminum plant in Malaysia, and expects to produce 230,000 metric tons a year when the first phase of the project is completed by 2006, the Business Times reported Tuesday.

The 13 billion ringgit ($1MYR3.8) integrated aluminum complex in the western state of Perak will include an aluminum smelter with a total capacity of 690,000 tons a year.

The smelter will be constructed in three phases, with each phase having one production line with a capacity of 230,000 tons a year.

The first phase is expected to be completed within 36 months from August, while the entire complex is expected to be completed within the next five years.

Masco chairman E W C Wong, who owns more than 50% of the company, said production will cater solely for domestic consumption to help Malaysia reduce its dependence on imported aluminum.

Malaysia imports about 200,000 tons of aluminum a year, Wong said.

Masco will use technology from China in the construction of the complex, with workers expected to be sent to China and Europe for training, the report said.

-By Benjamin Low, Dow Jones Newswires, 603-2692-5254,

Smelter losing millions, New Zealand , 14 May 2003 By PAUL GORMAN

The Tiwai Point aluminium smelter is losing $6 million of revenue each month as it plays its part in cutting power use.

The Comalco-Sumitomo owned New Zealand Aluminium Smelters (NZAS) plant outside Invercargill voluntarily reduced its power consumption by 10% at the start of April, ahead of the Winter Power Taskforce's initial call for 5% savings.

General manager Tom Campbell said NZAS was "being a good citizen" and had made the decision in a repeat of its move during the 2001 power crisis. Circumstances have not matched the 1992 winter, when one of the smelter's four potlines had to be shut because of power restrictions.

The self-imposed savings regime translates to a direct 10 per cent cut in furnace use, with 60 of the 600 furnaces now idle. Monthly output has been reduced by about 2000 tonnes.

If the shortage continued for a year, the total revenue loss for the smelter company would be close to $100m. Ninety per cent of the smelter's electricity is supplied by Meridian Energy through a long-term contract; the remainder is bought directly by NZAS on the spot market. At any time, the smelter can draw 550 megawatts (MW) of electricity from the grid, about the same as Christchurch.

Mr Campbell said the 10% reduction in output would not have any effect on the smelter's 800 staff, but repercussions were being felt by the contracting community that supported the plant.

NZAS had made no plans to make cuts greater than 10 per cent, and was hoping it would not come to that. "We pray not. We are like any other business in New Zealand. If further cuts were needed, equally shared around, we would need to look at it. (But) there's no reason why we should share a disproportionate share of the pain."

Rain into the lakes in the last 10 days had provided some good news, but NZAS was still concerned about the long-term availability of power.

German ally wheels up Hindalco’s fortunes

Rumi Dutta in Mumbai

Business Standard, India Published : May 13, 2003

Hindalco Industries, the aluminium business of the A V Birla group, is set to witness a threefold growth in the wheels business during the current financial year, with its German technology partner, Stahlschmidt & Maiworm GmbH, offering to source one lakh wheels for its European customers.

This comes as a shot in the arm for the aluminium major at a time when it has been hit by a slack in demand, with the growth in the domestic passenger car still some distance away.

Hindalco’s alloy wheel plant at Silvassa, which went on stream in September 1999, produced only around 50,000 wheels last year. It has an installed capacity of three lakh wheels per year.

The plant was set up in technical collaboration with Stahlschmidt & Maiworm, one of the world leaders in the alloy wheels with plants in Germany, South Africa, Poland and the US.

Confirming the development, senior executives at Hindalco, said, "Having assessed our production capability at low cost, Stahlschmidt & Maiworm has decided to source alloy wheels from India for its global clients.

"The order for one lakh wheels comes as a major export boost for the company’s new line of business."

"We had initially started with a focus on the domestic market. The domestic wheels and wheel-rims sector is not very large with limited number of manufacturers. What gives our product an edge both in domestic as well as export segment is the quality, thereby making it a top of the line product," they added.

Hindalco’s domestic order-book comprises order from Fiat India, for its Palio model. The company is also in talks with leading car makers, including Maruti, Hindustan Motors, Ford and Mercedes Benz.

Hindalco’s Aura brand of alloy wheels are priced in the range of Rs 13,000-19,000 for a set of five wheels depending on the size and specification of the wheel and the car.

According to analysts, the market for alloy wheels is growing. Apart from being lightweight and corrosion-resistant compared with the conventional models, alloy wheels offer better cooling and precision machining and more efficient impact absorption. They also do not require repainting.

Alcoa to Cut 4,250 Jobs at Mexican Automotive Operations May 13, 2003

Alcoa plans to fire 14 percent of the workers at its auto-parts factories in Mexico because it lost a contract and automobile production is declining. The world's biggest aluminum manufacturer will eliminate 1,700 jobs in Ciudad Acuna and 2,550 in Torreon by the end of July. The maquiladoras, near the U.S. border, make electrical systems for car ignitions and lighting for Ford and other automakers.

Alcoa Intalco lays off 50 and warns of more

Seattle Post Intelligencer, WA Thursday, May 15, 2003

Alcoa Intalco Works laid off 50 workers Monday and expects to release roughly 50 more employees next month, as it struggles with high energy rates.

If the Bonneville Power Administration implements a proposed rate increases Oct. 1, expected to be around 15 percent, Alcoa may shut down the Ferndale facility, according to company spokeswoman Mellani Hughes.

Smelter to study wind power

The Southland Times, New Zealand 15 May 2003

Meridian Energy and Comalco New Zealand plan to investigate the potential for a wind farm at Tiwai, a spokesman said yesterday.

Comalco New Zealand energy manager Jason Franklin said the joint venture would test the quality of the wind around its New Zealand Aluminium Smelter site to assess the potential for a wind-generated electricity supply.

A 60m testing tower would be installed on Comalco-owned land within the next month and wind monitoring would continue for up to a year, he said.

The smelter has reduced production during the past two months because of soaring electricity spot market prices.

Low hydro-lake levels throughout the country had forced the spot prices up with major electricity users the most seriously affected.

NZAS general manager operations Tom Campbell said yesterday the production cutbacks were likely to continue for the rest of the winter, despite welcome rainfall in the hydro-lakes during the past two weeks.

Mr Franklin said if results from the testing showed the wind was strong and consistent enough to support a wind farm, the project would progress to a planning stage.

It was not unreasonable to expect a farm could be fully operational within five years if the conditions were right, he said.

A wind farm would give the smelter the option of using it as an alternative power supply when conditions were suitable, reducing pressure on hydro-lake levels, Mr Franklin said.

Kaiser Aluminum posts wider loss on energy costs

Reuters, UK, Thu May 15, 2003 02:58 PM ET

(Adds analyst and company comment)
NEW YORK, May 15 (Reuters) - Bankrupt Kaiser Aluminum Corp.KLUCQ.OB , North America's third-largest aluminum producer, reported on Thursday a slightly wider first quarter net loss because of higher energy costs and sluggish manufacturing demand.

The Houston-based company, which hopes to emerge from bankruptcy next year, posted a net loss of $65.1 million, or 81 cents a share, in what it called "disappointing results." That compares with a net loss of $64.1 million, or 79 cents a share in the year-ago period.

"Kaiser, like its peers, will face an uphill battle for the rest of the year because of weakness in the auto sector, softness in the European economies, and high energy costs," said Argus Research analyst David Kerans.

Excluding a gain of $8.1 million, or 10 cents a share, from the sale of a smelter, Kaiser posted a loss of 91 cents a share in the first quarter.

Revenue fell to $339.4 million from $370.6 million in the year-ago quarter on weakness in its fabricated business and lower aluminum shipments. The company said earlier this month it is looking into selling some bauxite mining operations, alumina refineries, and aluminum smelters to help it emerge from bankruptcy.

The company, grappling with heavy debt and low aluminum prices, filed for bankruptcy protection last February. Asbestos litigation and increasing medical and pension costs also led to a credit and cash flow crunch.

It said Thursday that it is making steady progress in its Chapter 11 case and meets regularly and productively with its constituent committee.

Russia intends to develop commercial and economic ties with Guyana - Putin

Interfax, Russia 15 May 2003

MOSCOW. May 15 (Interfax) - Russia intends to expand its relations with Guyana, including expanded joint efforts in commercial and economic ties, Russian President Vladimir Putin said at a meeting with Guyanese President Bharat Jagdeo in Moscow on Wednesday.

"Russia is displaying increasing interest in working with Guyana," Putin said. "We will welcome the development of commercial and economic relations between our countries," he added.

Putin regretted that trade turnover between Russia and Guyana dropped to less than one tenth of what the two countries enjoyed during the Soviet- era times.

Moscow and Georgetown can pursue commercial and economic ties along various avenues. "One of the most promising areas is joint efforts in extracting and processing aluminum ore," Putin said.

Noranda officials express gratitude

Skieston Standard Democrat, MO 05/16/03

NEW MADRID - Noranda Aluminum company officials have expressed their gratitude to area legislators for their leadership in the passage of the bill this week which will give Noranda more flexibility to purchase energy in the future.

Senate Bill 555 successfully cleared the Senate, under the leadership of State Sen. President Pro Tem Peter Kinder and Sen. Bill Foster. Rep. Lanie Black and Rep. Peter Myers engineered the bill’s passage on the House side.

The bill contains an emergency clause which would make the bill law upon the governor’s signature. Gov. Bob Holden is expected to sign SB 555 as early as next week.

"We certainly appreciate the work of Senator Kinder and Senator Foster, representatives Lanie Black and Peter Myers, and basically all the legislators from Southeast Missouri," said Steve Heddle, president of Noranda-New Madrid. "They really brought our concern to the front and did a tremendous job in getting the bill through the Senate and the House. The bill gives us at least a fighting chance against the continuing trend of rising energy costs."

Heddle said that while the bill allows Noranda to sell power back to the providers from which it is purchased, the greater concern for Noranda is the rising costs of both power and fossil fuel energy. He said one-third of Noranda’s operating cost is energy and that the company’s electricity costs will rise 28 percent on an annualized basis beginning June 1.

"Even with this legislation, our annualized costs for power will go up about $25 million annually, effective June 1," Heddle added. "What a lot of people don’t realize is that with very 0.1 cent per kilowatt hour increase in cost, that 0.1 cent translates into $4 million in increased costs per year at our aluminum smelter at New Madrid. While the legislation will help us in the procurement of power in the future, there are no guarantees. We just hope we can weather the storm of rising energy prices and remain competitive in a very challenging industry."

In its final version, SB 555 was supported by the United Steelworkers of America, as well as other labor unions across the state. The Senate vote was 32-0 and the House tally was 129-0.

The largest employer in the Bootheel, Noranda Aluminum has 1,075 employees with an annualized payroll of more than $50 million. The firm spends over $20 million each year in the procurement of goods and services in the region.

Nalco To Ramp Up Production To 1,000 Tonne A Month By Dec

Financial Express, India, Suresh Nair & Vijay Trivedi

Mumbai, May 16: National Alumi-nium Company Ltd (Nalco) will increase its presence in the rolled-products segment in the aluminium market by the end of the current calender year.

Sources at Nalco (Bhubaneswar) said that the production was planned to be ramped up to around 1,000 tonne per month by December 2003. Currently, Nalco is producing only around 300 tonne per month of rolled products.

"Certain equipment have to be installed, the technology providers have been making visits to fill up the lacuna and we expect to ramp up capacity to around 1,000 tonne per month by December," sources said.

Another reason for the curtailed production could be the availability of hot metal, which have to be allocated among different products like castings and billets.

According to official sources, the plant would be ramped up to its maximum capacity gradually as the products capture the market. The production planning is carried out after a feedback is received from the company’s marketing department.

Until recently, Nalco was a primary producer of alumina and aluminium. With the launching of rolled products, Nalco positioned itself in the aluminium intermediary market, both in the country as well as in the international sphere.

In November 2001, Nalco had acquired International Aluminium Products Ltd (IAPL), an aluminium rolled-projects manufacturing company abandoned by Mukand Ltd, and subsequently merged it as a unit of the smelter plant.

The plant was first commissioned in March 2002. The Rs 330.81 crore plant has been built in collaboration with technology suppliers FATA Hunter of Italy.

The 50,000 tonne per annum plant is well-equipped to produce a variety of rolled-products like foil stock, fin stock, can stock, circles, cable wraps and standard sheets, with wide ranging applications in the consumer durables and packaging industry.

Govt To Resume Nalco Equity Sale Process Next Week

Indian Express, India , Ravi Shanker Kapoor

New Delhi, May 16: Even as opposition to the privatisation of profit-making National Aluminium Company (Nalco) remains unabated, the disinvestment ministry next week will restart the process for the sale of its equity in the open market. There is, however, no move to restart strategic sale of the aluminium major.

Nalco divestment comprises two parts — open market sale of 30 per cent equity by way of American depository receipts (ADRs), and selling 29.15 per cent shares to a strategic partner along with the management control. Another 2 per cent would be offloaded in favour of employees. After the completion of divestment, the government stake will come down from 87.15 per cent to 26 per cent.

The government’s original decision was to go about with Nalco divestment in a sequential fashion, the open market sale to be followed by strategic sale. According to official sources, the ministry wants to recommence the open market sale on grounds that this is disinvestment and not privatisation. And all opposition is against privatisation.

Among those opposed to Nalco privatisation is Orissa chief minister Naveen Patnaik. The main works of the company are located at Damanjodi and Angul in Orissa. The due diligence exercise for the strategic sale of Nalco was suspended on October 29 last, following manhandling of the Hindalco team by union members at Angul. Hindalco is one of the bidders for Nalco.

Work on the prospectuses to be filed with the Securities and Exchange Commission and the Securities & Exchanges Board of India will begin next week, said officials in the department of mines. Representatives of the ministry, the department of mines, Nalco, ABN Amro/Enam and JP Morgan/I-Sec will be involved in the work on prospectuses.

ABN Amro/Enam are global coordinators-cum-advisers for all three transactions — that is, domestic, ADR and strategic sale. JP Morgan/I-Sec are joint global advisers for domestic and ADR transactions.

MoD expects to complete the sale of 10 per cent Nalco equity sale in the domestic market and 20 per cent stake as ADRs by the end of October in this year. The domestic sale is expected to precede ADR transaction, because filing prospectus with Sebi is much simpler than filing with SEC.

Nalco is expected to receive a good response from the domestic and overseas investors, especially as the uncertainty in the West Asia has ended with the Iraq war, said official sources. They, however, are not so bullish about the political factor. With all political parties gearing themselves for the next general elections, and rollback having become a regular feature, officials said.

Capral pulls $120m project from NSW

Sydney Business Review, Australia 5/17/03

A State Government inquiry into a "state-significant" world-class aluminium plant in South-West Sydney has been terminated because the applicant, Granville-based Capral Aluminium, could wait no longer for approval - and moved interstate.

Queensland is the winner of the $120 million project and several hundred jobs. NSW loses this capital investment as well as the loss of jobs with the closure of plants at Yennora and Minto.

Capral planned to consolidate operations at a new extrusion and finishing plant of 50,000 sq m at Smeaton Grange Industrial Estate in Camden because of ageing equipment at other locations, its proximity to the Western Sydney Orbital, and because workers could transfer easily. However, residents opposed the project and an inquiry was set up to resolve the issue but "delays in the approval process had disadvantaged the NSW proposal," Capral's managing director, Greg L'Estrange, said.

Options were relocation to Ipswich in Queensland or going off-shore. Further delays in the inquiry tipped the company in favour of Ipswich where it will lease a purpose-built 76,000 sq m facility site in the $1 billion Bremer Industrial Park.

The project will include a 61,685 sq m factory, a 9686 sq m transport hub, administration office and a hard-stand area of 62,011 sq m. The extrusion factory is expected to be completed by December and the remainder of the premises by March 2004.

"The professional and progressive attitude of the Queensland Government and the Ipswich City Council has greatly impressed," Greg L'Estrange, said. Production at Minto and Yennora will now be absorbed into the Ipswich facility and the company's existing plant at Campbellfield, in Victoria. Sydney employees would be offered positions at Ipswich.

The Yennora facility will convert to Capral's NSW regional hub providing warehousing, cross-dock facilities and value-adding services, according to Greg L'Estrange.

Capral sold its plant at Granville last year for redevelopment. Its head office will remain on the site. Meanwhile, Landcom, which owns the Smeaton Grange Industrial Estate, has sold 20 blocks for $12.5 million.

Russia, Guyana presidents meet in Moscow

Jamaica Observer, Jamaica , 5/16/03

GEORGETOWN -- Guyana's President Bharrat Jagdeo met with President Vladimir Putin of Russia in Moscow last Wednesday and discussed future trade and economic relations.

According to the Guyana Information News Agency (GINA), President Jagdeo raised with Putin the possibility of Russia investing in Guyana's bauxite industry.

Such an investment had earlier been discussed with representatives of the private Russian aluminium giant, RUSAL, with which Guyana has entered into a memorandum of understanding.

President Jagdeo, who is due back home this weekend, had travelled to Moscow as head of a four-member delegation to a five-day session of the World Forum of Foreign Graduates.

Alcan's future looks bright

Company's mettle worth the share price

Toronto Star, Canada, 5/18/03 PAT MCKEOUGH

Alcan (TSX: AL) is the world's second-largest producer of primary aluminum behind U.S.-based Alcoa, with roughly 18 per cent of the world's production capacity. It also makes aluminum sheet, foil, wire and cable, as well as parts for doors, windows and automobiles. North America accounted for 42 per cent of its 2002 sales, followed by Europe (40 per cent), Asia Pacific/Africa (15 per cent) and South America (3 per cent).

Alcan's sales fell from $7.8 billion in 1998 (all amounts except share price in U.S. dollars) to $7.3 billion in 1999. In October 2000, the company merged with European aluminum producer Algroup. Consequently, sales jumped to $12.6 billion in 2001. The soft economy cut aluminum prices in 2002, and Alcan's sales fell to $12.5 billion.

Profits from continuing operations fell from $379.8 million (or $1.67 a share in 1998) to $372.5 million (or $1.66 a share in 1999), but shot up to $587 million (or $2.52 a share) in 2000 after the Algroup merger. Profits fell steadily to $465 million (or $1.44 a share) in 2002. Alcan's balance sheet is strong. It ended 2002 with $110 million in cash, and long-term debt of only 0.4 times equity.

Alcan is doing a good job of controlling its costs. By combining certain operations after the group merger, Alcan cut its pre-tax operating costs by $70 million in 2001 and $157 million in 2002. A separate restructuring plan saved $178 million in 2002. This plan aims to cut costs by $200 million a year. These cuts helped Alcan's cash flow rise 18.7%, from $3.42 a share in 2001 to $4.06 a share in 2002.

This strong cash flow also lets Alcan take advantage of the soft global economy with shrewd acquisitions. In late 2002, it agreed to buy VAW Packaging for about $370 million. VAW operates 14 plants in eight countries that make containers for the food and pharmaceutical industries. Packaging accounted for 22 per cent of Alcan's sales in 2002. That should grow in 2003, since this deal greatly expands Alcan's packaging operations in fast-growing markets like China and Turkey.

The company is also bolstering its core aluminum business so it can meet higher demand when the economy improves. In 2002, the company paid $343 million for 40 per cent of the Alouette aluminum smelter in Quebec. This plant is one of the most technologically advanced smelters in the world. Alouette recently secured a new, long-term power contract from Hydro Quebec that will let it double its capacity by 2005. Alcan's stock is down by roughly a third in the last year due to the drop in aluminum prices. It now trades for a reasonable 16.8 times the $1.70 (U.S.) a share it should earn in 2003. It also trades for only 73 per cent of its 2002 sales of $38.94 (U.S.) a share. The $0.60 (U.S.) dividend yields 2.1 per cent.

New RusAl Smelter

Moscow Times, Russia May 19, 2003

NOVOSIBIRSK, Western Siberia (Reuters) -- Russian Aluminum, the world's No. 2 primary aluminum producer, will buy a controlling stake in a project to build a smelter in eastern Siberia, a manager of the project said Monday.

"We have an agreement according to which we will retain a blocking stake of a little over 25 percent, while RusAl will have a little less than 75 percent," a manager with Alyukom-Invest said, adding that the formal deal would be signed shortly.

Alyukom-Invest, a firm owned by former managers of Bratsk, the country's biggest aluminum smelter and now part of RusAl, started the Alyukom-Taishet project to build a 250,000 metric-ton per year smelter in the energy-rich Irkutsk region in 2000.

But it only built a test capacity capable of producing 11,200 tons of aluminum per year, still idle. Earlier this year it started talks with RusAl on building a smelter jointly.

RusAl spokeswoman Eugenia Harrison confirmed RusAl had an agreement with Alyukom-Invest to acquire a stake in Alyukom-Taishet. She declined to provide details of the deal.

The Alyukom-Invest manager said the two companies planned to finance the Alyukom-Taishet project in a proportion corresponding to their stakes in it.

Last month Irkutsk region Governor Boris Govorin said the two companies had come to an agreement to jointly start building in 2004 a smelter with a capacity of 500,000 tons of aluminum per year.

Hydro Aluminum's Texas plant nears full capacity

Reuters, 05.19.03, 12:22 PM ET

NEW YORK, May 19 (Reuters) - Hydro Aluminum North America, a unit of industrial giant Norsk Hydro ASA <NHY.OL>, on Monday said production at its new remelt plant in Commerce, Texas, was nearing full capacity, two weeks ahead of schedule.

The 90,000 tonnes-per-year aluminum scrap reprocessing plant, a $37 million investment, is part of Hydro Aluminum's long-range strategy to raise capacity in the North American market.

Production at Commerce started on Nov. 15, 2002. Ramp-up had been expected to take about 20 weeks to reach full capacity, Hydro said last year.

Hydro Aluminum now has a total U.S. remelt capacity of more than 400,000 tonnes, including plants in Henderson, Kentucky; Monett, Missouri; Ellenville, New York; Phoenix, Arizona, and St. Augustine, Florida.

The company has invested nearly $85 million in its North American remelt operations over the past four years, it said.

Martin Carter, president of Hydro Aluminum North America, said Commerce's rapid ramp-up resulted from previous experience in its remelt network in Europe and from having established a similar plant in Henderson, Kentucky, in 2000.

Commerce is designed to produce primary-quality billet using 5 percent of the energy typically consumed in making primary aluminum at smelters. The plant also enables customers to recycle their own scrap to optimize their own production processes.

The facility makes billet from recycled aluminum for the U.S. Southwest -- mainly the transportation and building and construction market segments in Texas.

Hydro Aluminum North America is part of Hydro Aluminium, which it said is Europe's biggest aluminum company and one of the world's top three integrated aluminum companies.

Copyright 2003, Reuters News Service

Iranian delegation studies economic alliances with Venezuela

Venezuela Electronic News, Venezuela 5/19/03

CVG president, Major General (ret.) FRancisco Rangel Gomez is to travel to Teheran at the end of May to discuss Venezuela's aluminum industry and the possibility for establishing bilateral economic agreements between Iran and Venezuela. Iran's Ambassador to Caracas, Ahmad Aghahi has visited Venezuelan Guayana Corporation (CVG) HQ in Puerto Ordaz to get to know details in a portfolio of regional development deals, with special emphasis on aluminum and iron.

"We consider that the interchange of experience and products may be interesting for both countries," Ambassador Aghahi told reporters adding that he expects satisfactory results from Rangel Gomez' visit to his country and the understanding they have already recahed on two proposals. "Iran is a bauxite consumer as well as iron exporter, and for that reason we are looking into becoming a customer of Venezuela as a first step."

CVG general director, Rafael Sanchez Marquez says that the opportunity will benefit not only State enterprises selling raw materials but also the establishment of assembly lines in Venezuela as well ... "the Iranian delegation members have shown a particular interest in setting up a tractor assembly line in Venezuela, allowing us to manufacture good quality machinery as they already do in Iran."

Sanchez Marquez adds that the aluminum sector is also in process of starting up a new production line and has a special interest in V-350 technology which has been developed for Venezuelan specialists counting on worldwide certification.

Geology encounter inspired Alcan exec

Harvard-educated Carroll heads major unit


Montreal Gazette, Canada Monday, May 19, 2003

Cynthia Carroll leads Alcan's Primary Metal group, the aluminum giant's largest in terms of capital assets.


Cynthia Carroll put her career on hold to go to Harvard Business School during the oil exploration downturn of the 1980s. That decision led to a job at Alcan between academic years and a full-time post after graduation.

It's not the toughest assignment Cynthia Carroll has had, but being peppered with teenage questions about how she landed on the executive team of a large company did require reflection.

"You can't have a rigid game plan about being here, here and here," said Carroll, staking out imaginary life goals with her hands.

"I told the students you just have to do your best in the present."

Carroll insists she has never looked too far ahead in her career. Nonetheless, it has unfolded pretty nicely.

She was headed for liberal arts in college, but an encounter with geology jogged Carroll's preconceptions and landed her a job traipsing over mountains and mucking around drilling sites for an oil company.

Taken with the deal-making side of the oil patch, she headed back to school to study business and later landed a job with Alcan Inc. Carroll now heads the group responsible for the company's worldwide aluminum smelting operations.

As head of Alcan's Primary Metal group, the company's largest in terms of capital assets and international presence, Carroll is responsible for 16 smelters and related power-generation facilities.

This means a lot of time on the road, visiting the company's plants or operations of other companies that might make interesting joint ventures.

The trips take her from Alma, Que., to Kitimat, B.C., as well as to Australia, Brazil and China.

"I've been living like that for a while," said Carroll in describing the travel. "And I still enjoy it; learning from different perspectives and approaches is exciting."

Carroll, a sprightly 40-something, gives the impression she's got plenty more get up and go for business travel. Then again, she's been bouncing from place to place for a while.

Inclined toward history and languages as a student, Carroll ended up in the sciences by chance: she took a geology course to fulfill her undergraduate curriculum requirements, and ended up loving it.

Summer jobs with oil giant Amoco cemented her enthusiasm for geology.

"I was climbing mountains, flying in helicopters all over the Rockies, got to be outdoors and was taken with it," said Carroll, a native of Philadelphia.

She spent eight years with Denver-based Amoco, travelling frequently across the western U.S., overseeing drilling wells, managing teams of people and putting together joint ventures.

Women in geology and the oil business were rare at the time, but Carroll says she never sensed her credibility was at issue.

But she did learn a skill that has served her well ever since.

"I had to deal with some tough and rough oil types," Carroll said. "Early on, I had to learn how to defend a position in circumstances where I was being challenged."

Eventually, Carroll gravitated away from the geology end of the oil business and into management and deal-making.

With oil exploration slowing in the 1980s, Carroll decided to take a risk: she went from a comfortable house, a dog and skiing excursions in Colorado to a postage-stamp-size dorm room at Harvard Business School.

"People told me I was out of my mind to be interrupting my career," Carroll said.

But the move to learn more about the fundamentals of business paid off. Carroll spun a job at Alcan between academic years into a full-time job with the company after graduation.

Alcan has since entrusted her with some hefty mandates, including turning around a packaging plant in Kentucky and running a $1-billion refinery in Ireland.

Carroll's success in improving performance at major plants and forging strong ties with the communities where Alcan operates are two reasons she has landed promotions, said Daniel Gagnier, Alcan's senior vice-president for corporate and external affairs.

"She is not intimidated by what is at stake, is a good negotiator and manages and motivates her teams well," he said.

Reflecting on what she thinks accounts for her success, Carroll cites her openness to change and new challenges, an ability to work with people from different cultures and countries and staying results-oriented.

"I have never done a lot of 'managing my career,' " Carroll said. "I just stayed geared to working to get results with my team."

Getting results means constantly looking for ways to improve productivity at smelters, transferring successes from one Alcan operation to others and scouting out ways to improve the company's strategic market position, Carroll said.

"You need to be aware of what you need to do to enhance your abilities," Carroll said.

There is still a dearth of women in senior positions in manufacturing but, in Carroll's view, gender is not an issue.

"In manufacturing, the results are apparent," she said.

"It doesn't matter if you are a man or a woman."

(Alcan does have another female senior officer: Martha Finn Brooks heads the business group responsible for rolled products in the Americas and Asia.)

Despite the demands of her job, Carroll doesn't feel she's had to give up a lot. She has four children and told her career-day students they don't have to give up a family to pursue a career.

But she does have an ace in the hole that helps her juggle all this: her husband stays at home.

"It was a mutual decision," Carroll said of the arrangement.

As for her next challenge, Carroll is still resisting looking beyond the business at hand.

"I have never done that because life doesn't happen that way. Too many unforeseen things intervene.", Profile of Cynthia Carroll

© Copyright 2003 Montreal Gazette

France's Pechiney to forge new alliances with Venezuelan Guayana Corporation (CVG)

Venezuela Electronic News, Venezuela Tuesday, May 20, 2003

By: David Coleman

Venezuelan Guayana Corporation (CVG) officials have announced that French Pechiney executives have expressed intent to set up a new alumina processing plant in Venezuela for which 200 tonnes of bauxite will be required. CVG president, Major General (ret.) Francisco Rangel Gomez says a precondition of agreement is that the bauxite should be processed locally, adding greatly to its overall viability.

Studies of potential demand for alumina on international markets have brought about Pechiney's interest in a new strategic association with the CVG to modernize and enlarge production capacity at CVG Bauxilum. Rangel Gomez points out that discussions have been focused on a feasibility study as the basis of future business, apart from an existing 6 strategic alliances contracts ... he emphasizes that any association between the CVG and Pechiney will be framed within Guayana regional policy with the sole purpose of changing industry conditions, not only in the export of raw materials but in adding value to resources in a step by step approach.

"We have asked Pechiney to speed up the feasibility study for the new plant to produce 1,000,000 metric tonnes of bauxite, since we consider that Venezuela is making advantages available to compete in international markets. In the near future, we will be setting up a timetable to determine bauxite quality and volume. Pechiney is to evaluate the possibility of a location in Caicara del Orinoco, which ties in with the construction of a 3rd bridge over the Rio Orinoco (between Caicara and Cabruta) which will provide easy access to a developing center in the Orinoco-Apure Axis."

Pechiney representatives says they're satisfied with CVG Bauxilum's progress and achievements, adding that they have in mind two investments in “red mud” storage ... the first earmarked for keeping actual levels while the second is for storing dry material. As to CVG Alcasa's Line 5, a feasibility study is being carried out on engineering work and highlighting the importance of commercial relations for the main raw materials.

Venezuela's Alcasa, Glencore sign aluminum project

Reuters, 05.21.03, 7:08 PM ET

CARACAS, Venezuela, May 21 (Reuters) - Venezuela's state-owned aluminum smelter CVG-Alcasa said on Wednesday it signed an agreement with Swiss-based Glencore International AG to proceed with a $650 million project for a fifth production line.

The expansion project, due to begin in the first quarter of 2004 and be completed in 36 months, will more than double Alcasa's production capacity to 450,000 tonnes from a current210,000 tonnes.

Wednesday's signing of the memorandum of understanding in the south eastern city of Puerto Ordaz confirmed a Jan. 31 announcement by Venezuela's state industrial holding Corporacion Venezolana de Guayana (CVG), which awarded the Alcasa Line V project to a consortium led by Glencore.

The other consortium members were Pechiney of France <PECH.PA> and U.S. construction firm Fluor Daniel (nyse: FLR - news - people).

CVG-Alcasa said in a statement on Wednesday that Glencore, as financing partner in the project, would provide $540 million of the total investment. It would be repaid over a period of 12 years by part of the production of the new smelter line.

The Venezuelan state, through Alcasa, would put up the rest.

The Alcasa Line V project forms part of strategic plans announced by Venezuela's state-run aluminum industry to expand its overall annual output capacity by more than 400,000 tonnes to more than 1 million tonnes by the end of the decade.

Copyright 2003, Reuters News Service

Nalco employees strike work to protest privatisation

Our Correspondent in Bhubaneswasr

Business Standard, India Published : May 22, 2003

Work in public sector National Aluminium Company (Nalco) was today severely affected with various employees' union of the company going on a strike to protest against the "fresh attempts" of the government to privatize the profit making PSU.

The strike coincided with the general country-wide agitation by the left-oriented trade unions today to protest against the economic policies of the Centre.

Official reports said work had come to a grinding halt at the aluminium major's smelter and captive power plant (CPP) at Angul as also the refinery and bauxite mining complex at Damanjodi in Korapur district. A skeleton staff, however, had been deployed to take care of the pot line in the Angul smelter, sources said.

Nalco employees also staged a demonstration outside the company's corporate office in Bhubaneswar. While class three and four employees of the company had abstained from work, the executives were present in the office. Twenty seven pro-strike activists were rounded up outside the Nalco office for picketing.

Slovenia metals contracts 'safe' for Hydro

Reuters, 05.21.03, 11:49 AM ET

LJUBLIANA, May 21 (Reuters) - Slovenian state-owned aluminium producer Talum will continue with its contracted metal arrangements with Norsk Hydro Aluminium after the smelter is privatised, a senior Talum official said on Wednesday.

There had been mounting industry talk that marketing contracts between the two firms might be jeopardised after the Slovenian government said on Tuesday it had invited two other firms for binding bids for 85.6 percent of Talum.

"The contracts with Norsk Hydro Aluminium will continue to be valid regardless of who will buy Talum. Nobody is considering breaking them up," Danilo Toplek, chief executive of Slovenian aluminium smelter Talum, told Reuters.

The Ministry of Environment and Energy said it had set June 30 as the final date for binding bids for Talum, and invited Hungarian aluminium producer Magyar Aluminium and Slovenian investment company Sinal to perform due diligence in Talum.

A spokesman for Norsk Hydro <NHY.OL> said his firm had a "commercial/technical arrangement" with Talum under which the Norwegian metals giant sold about half of Talum's 80,000 tonnes a year production, while supplying alumina and technical expertise to the plant.

"We have a contract to market part of their products which they are supporting with sales into southern Europe and I assume we are supplying all of their alumina needs," Thomas Knutsen said.

He declined to comment on industry talk that Norsk Hydro had made an offer for Talum last year but that it had come well under the government's estimate of 18 billion tolars ($90.3 million).

(Additional reporting by Declan Conway)

Copyright 2003, Reuters News Service

Alcoa signals expansion plans

ABC Online, Australia Thursday, May 22, 2003. 1:04pm (AEST)

Mining company Alcoa has told the Western Australian Government it wants to expand its alumina operations into the State.

State Development Minister Clive Brown has confirmed the company's plans but it is not clear whether the expansion targets the Wagerup refinery.

Alcoa will not confirm the proposal, which has met strong community opposition amid ongoing health concerns in the area.

But Mr Brown says the company is aware it will need government and community support to go ahead.

"For any major expansion to take place or with any new project, there are regulatory requirements that the company will have to go through and Alcoa would have to go through those the same as any other company would," he said.

A Government forum found emissions from the refinery were linked to health problems.

VRA threatens blackout

- Says cannot guarantee power supply under Tarzan

- Demands CEO’s interdiction

Ghanaian Chronicle, Ghana, 5/21/03, John Bediako, Akosombo

Five days after the deadline from the Volta River Authority (VRA) workers to government to remove their chief executive, Dr. Charles Wereko-Brobby, signals from the control rooms are that the nation may soon be plunged in total blackout.

Like the second coming of Christ, the exact date and time has not been specified, but from the ‘signs of the fig tree’ it is going to be this week.

They therefore cautioned President John Agyekum Kufuor to beware of the consequences if he failed to hear their appeal and embarked on trips to look for investors to a country where power supply cannot be guaranteed.

Chronicle tapped this information from meetings that were held on Monday, this week, a few hours after Energy Minister Paa Kwesi Nduom made government’s position clear on the impasse between the power producers and their boss at meetings that were held at the Aboadze Thermal Plant (Western show boys), others from Kumasi, harbour boys from Tema and the Dam giants from Akosombo.

At 12 noon on May 19 this year, the VRA staff groups - Western area - passed a resolution signed by the chairman, senior staff association (SSA), Western branch and the union chairman, Aboadze, stating that “We the VRA workers of the Western area, comprising senior and unionized staff, having met on Monday, May 19, 2003 at the TTPS training room at 12 noon and having noted with concern and deliberated an earlier resolution passed by the workforce on May 5, this year and also having considered the minister of Energy’s press release, we hereby unanimously resolve again as follows:

a) that Dr. Charles Wereko-Brobby and the Board cannot remain in office while investigations go on. We wish to state that Dr. Charles Wereko-Brobby and the Board should leave office immediately.

b) That if by 8:00 a.m. Wednesday, May 21, 2003 Dr. Charles Wereko-Brobby and the Board remain in office, we shall lay down our tools. Similar resolutions came from Tema, Kumasi and Akosombo.

At the Akosombo community centre at 5:20 p.m. on Monday, this week, the leaders of the SSA and the unionized staff relayed their resolutions from other stations to the gathering, concerning the intended strike action.

The biblical quotation at John 11:49-51 was repeated where it reads, ‘It is better for one man to die than the entire nation to perish.’

Earlier, on May 9 this year, the national executive of both SSA and the unionized staff of VRA, presented a petition to the minister based on a resolution passed to register total loss of confidence in the leadership of Dr. Charles Wereko-Brobby and the VRA Board.

The continued stay of the CEO after May 16, 2003, according to the workers, would worsen the already volatile industrial situation in the authority.

The petition went on to state that VRA’s prime mandate is to generate and supply adequate and reliable power and this is the yardstick of which Ghanaians would judge the performance.

“We foresee the country heading for power shortage owing to the mismanagement of the water in the reservoir for hydroelectric power generation and the probability of the strategic reserve plant (SRP) to supply the needed thermal complement.

The dropping rate of point six feet daily in the dam is worrying since the plant cannot operate below 235 feet, barely two feet to that level.”

The capacity of the thermal plant at Aboadze, they said, cannot carry the nation through the shortage and we cannot expect Cote d’Ivoire Electricity (CIE) to bail us because of our indebtedness to them.

According to them, the genesis of these problems is the shelving by the CEO of a good and well-planned 330mw additional plant in Tema, which was on course for implementation but was discarded for the SRP, which not only delayed in coming but also turned out to be expensive to run.

The plant, which was originally intended to be an emergency power plant, has up to date, not generated a unit of power, even though the authority is carrying a huge financial burden from rental and other technical problems.

One clear piece of evidence of the looming crisis is the request by the Volta Aluminium Company (VALCO) to shut down, as well as the trend of financial commitments to General Electric (GE) and Takoradi International Company (TICO).

The re-spraying of new pickups, the changing of number plates of boarded vehicles, and the high rate of resignations that rocked the authority were among a catalogue of issues that were raised.

Energy Minister Kwesi Nduom, on Monday, this week, addressing the issues, said that he had constituted a committee to review the matters raised and report back to him on Monday June 2, this year and the scope of the review will include, but not be limited to the SRP, operations of the provident fund, executive pay, working hours, procurement procedures and image of the VRA.

Discussions picked at the meeting include storming the head office in Accra, total sit-down strike or not going to work at all, for all to remain in darkness with the exception of the security.

They however would protect plants and equipment against destruction by people who may apportion it to the strikes.

CVG's Alcasa train 5 to produce additional 240,000 tonnes of aluminum

Venezuela Electronic News, Venezuela 5/22/03

CVG Alcasa and Switzerland-based Glencore AG say that, after several months work on the construction of a 5th aluminum reduction train, a Memorandum of Understanding has been signed by both companies in a first factory expansion phase. Venezuelan Guayana Corporation (CVG) president, Major General (ret.) Francisco Rangel Gomez views the news as "a tremendous advance for CVG Alcasa which has worked doligently to overcome a strong economic recession over the last space of years."

"CVG Alcasa was created with 5 trains in mind, but only four were constructed and then trains 1 and 2 had to be closed five years, when they (the previous government) tried to privatize it ... only two trains were left in production and it was not sufficient to achieve break-even."

The newly-announced Train 5 plans will have an important and positive impact on the southeastern Guayana region of Venezuela since it will require the participation of regional small-to medium supply industries and will generate a considerable number of jobs in road construction ... CVG president Rangel Gomez estimates some 3,000 jobs during the construction development and 270 more permanent jobs on top of 2,700 workers currently employed at CVG Alcasa whose president, Dixon Rosillon says the company now faces the real prospect of economic recovery to become a profitable force in the international market for aluminum and products. Rosillion sees full production phased in over the next 36 months after the construction work begins early next year on completion of environmental impact and other studies and recommendations.

Glencore International AG director general Michael Ambrusten says the signing of a Memorandum of Understanding is an important first stage from which will derive contract definitions and other processes to begin construction of the new Train 5. Last February, CVG Alcasa had announced that it would enter into a joint venture led by Glencore also with the participation of French Pechiney and US Fluor Daniel.

Rangel Gomez says "CVG Alcasa is currently producing 210,000 tonnes of aluminum per year and the incorporation of Train 5 will add another 240,000 tonnes to arrive at 450,000 metric tonnes per year ... bringing additional revenues in the order of US$350 million ... it is yet another example of renewed faith in foreign investment in Venezuela ... we're talking of an investment in the region of $650 million where Alcasa itself will contribute $105 million with the remaining capital from Glencore to build what is today recognized to be the largest aluminum reduction facility in Latin America.

ALUMINUM is why the smelter and Kitimat was built.

But critics say Alcan is now positioning itself to use less power for smelting and more for lucrative power sales.
KITIMAT’s analysis of the potential for Alcan to sell more power – at the cost of hundreds of northwest jobs – is sound, says Terrace’s economic development officer.
Brian Baker, executive director of the Terrace Economic Development Authority, says he can find no flaws in the case made by Kitimat officials.
“What they say about power sales is legitimate,” he said. “You do lose your competitive edge. Our competitive edge is cheap power.”
“I totally agree with their argument.”
But Baker said he has greater difficulty with the tactics being contemplated in Kitimat, particularly any court challenge.
“Are we going to have an alienated multinational that has a very extensive legal team?” he asked. “I’d like to think leveller heads will prevail.”
Alcan has pulled out of other locations in the world, he said.
“I don’t think it’s likely. But it’s not beyond the realm of possibility.”
He also agrees the Quebec government has crafted much more effective deals to ensure Alcan creates and maintains jobs there.
“Quebec did their homework better,” Baker said. “They have a better deal.”
Baker says the provincial government, in concert with the affected northwest towns, should carry out a detailed analysis of how Quebec deals with Alcan or even mount a fact-finding mission to that province.
Power subsidies there are linked to jobs at Alcan plants.
“Quebec seems to have exactly what we want,” he said. “Megawatts for jobs.”
That knowledge, he said, would help fortify the communities and the province in any upcoming negotiations with Alcan.
“Maybe it won’t be as good as what Quebec has,” he said. “But maybe something can be worked out.”
Baker says the issue of where any surplus power to the smelter’s needs could be sold is also of interest. He said cheap Alcan power could be a major tool to attract new industries to the Terrace area if it could be used beyond the immediate Kitimat area.

Chalco's alumina production up 10.1% yoy in first quarter

Interfax, China 21.05.2003

Shanghai. (Interfax-China) - Alumina output from the Aluminum Corp. of China (Chalco) reached a quarterly record high of 1.39 mln tons during the first quarter, a jump of 10.1% compared to the same period a year ago, the company announced to Interfax.

The robust alumina production growth mainly came on the back of strong domestic demand, noted Chalco's VP and CFO, Chen Jihua, in the report. Meanwhile, Chalco's primary aluminum production was stable during the period, edging up 0.4% year-on-year to 181,300 tons.

Apart from supplying alumina to its electrolytic aluminum plants, Chalco sold 1.04 mln tons of alumina to external entities, up 5.1% from a year earlier. It also sold 176,000 tons of primary aluminum in the three-month period, a rise of 11.1%.

In the first quarter, the average selling price of its alimina stood at RMB 2,450 (USD 296) per ton, surging 24.8% on a yearly basis, while the selling price of its primary aluminum came to RMB 14,036 (USD 1,695) per ton, increasing 6.6%.

Source: Chalco's quarterly financial report

In order to lock-in profits in the face of price fluctuations, Chalco is drafting plans to increase the amount of alumina supplied under long-term contracts, while closely monitoring domestic aluminum producers' alumina import prices and their pricing of electrolytic aluminum, the company said in its report.

With global alumina supply growth continuing to lag demand, Chalco expects the gap to persist worldwide for the rest of 2003. It also foresees a continued widening of the gap on the domestic market.

Chalco predicted that primary aluminum supplies for the remainder of 2003 would continue to surpass demand on the world market and put downward pressures on primary aluminum prices, it noted in the report. However, supported by sustained strong domestic demand, China will remain the world's fastest growing market for primary aluminum, it forecast.

To date, the ongoing SARS epidemic in China has not produced any significant impact on its operations and none of its employees have been infected by the disease, Chalco added in the report.

Britain: Sunday Times “Rich List”

The Sunday Times, 22 May 2003

The other winners, according to the Sunday Times, are those who “acted with the most boldness.” The paper singles out the Reuben brothers, whose fortune is derived from their “extraordinary” performance in the Russian aluminium industry in the early 1990s. Extraordinary indeed. During the process of capitalist restoration and the selling off of state assets at bargain basement prices, David and Simon Reuben amassed an incredible 2.1 billion by investing in Russia’s aluminium industry and property. They jumped 248 places to rank fifth on the list after their wealth was “reassessed.”

CVG's Alcasa train 5 to produce additional 240,000 tonnes of aluminum

Venezuela Electronic News, Venezuela 5/22/03

CVG Alcasa and Switzerland-based Glencore AG say that, after several months work on the construction of a 5th aluminum reduction train, a Memorandum of Understanding has been signed by both companies in a first factory expansion phase. Venezuelan Guayana Corporation (CVG) president, Major General (ret.) Francisco Rangel Gomez views the news as "a tremendous advance for CVG Alcasa which has worked doligently to overcome a strong economic recession over the last space of years."

"CVG Alcasa was created with 5 trains in mind, but only four were constructed and then trains 1 and 2 had to be closed five years, when they (the previous government) tried to privatize it ... only two trains were left in production and it was not sufficient to achieve break-even."

The newly-announced Train 5 plans will have an important and positive impact on the southeastern Guayana region of Venezuela since it will require the participation of regional small-to medium supply industries and will generate a considerable number of jobs in road construction ... CVG president Rangel Gomez estimates some 3,000 jobs during the construction development and 270 more permanent jobs on top of 2,700 workers currently employed at CVG Alcasa whose president, Dixon Rosillon says the company now faces the real prospect of economic recovery to become a profitable force in the international market for aluminum and products. Rosillion sees full production phased in over the next 36 months after the construction work begins early next year on completion of environmental impact and other studies and recommendations.

Glencore International AG director general Michael Ambrusten says the signing of a Memorandum of Understanding is an important first stage from which will derive contract definitions and other processes to begin construction of the new Train 5. Last February, CVG Alcasa had announced that it would enter into a joint venture led by Glencore also with the participation of French Pechiney and US Fluor Daniel.

Rangel Gomez says "CVG Alcasa is currently producing 210,000 tonnes of aluminum per year and the incorporation of Train 5 will add another 240,000 tonnes to arrive at 450,000 metric tonnes per year ... bringing additional revenues in the order of US$350 million ... it is yet another example of renewed faith in foreign investment in Venezuela ... we're talking of an investment in the region of $650 million where Alcasa itself will contribute $105 million with the remaining capital from Glencore to build what is today recognized to be the largest aluminum reduction facility in Latin America.

ALUMINUM is why the smelter and Kitimat was built.

But critics say Alcan is now positioning itself to use less power for smelting and more for lucrative power sales.

KITIMAT’s analysis of the potential for Alcan to sell more power – at the cost of hundreds of northwest jobs – is sound, says Terrace’s economic development officer.
Brian Baker, executive director of the Terrace Economic Development Authority, says he can find no flaws in the case made by Kitimat officials.
“What they say about power sales is legitimate,” he said. “You do lose your competitive edge. Our competitive edge is cheap power.”
“I totally agree with their argument.”
But Baker said he has greater difficulty with the tactics being contemplated in Kitimat, particularly any court challenge.
“Are we going to have an alienated multinational that has a very extensive legal team?” he asked. “I’d like to think leveller heads will prevail.”
Alcan has pulled out of other locations in the world, he said.
“I don’t think it’s likely. But it’s not beyond the realm of possibility.”
He also agrees the Quebec government has crafted much more effective deals to ensure Alcan creates and maintains jobs there.
“Quebec did their homework better,” Baker said. “They have a better deal.”
Baker says the provincial government, in concert with the affected northwest towns, should carry out a detailed analysis of how Quebec deals with Alcan or even mount a fact-finding mission to that province.
Power subsidies there are linked to jobs at Alcan plants.
“Quebec seems to have exactly what we want,” he said. “Megawatts for jobs.”
That knowledge, he said, would help fortify the communities and the province in any upcoming negotiations with Alcan.
“Maybe it won’t be as good as what Quebec has,” he said. “But maybe something can be worked out.”
Baker says the issue of where any surplus power to the smelter’s needs could be sold is also of interest. He said cheap Alcan power could be a major tool to attract new industries to the Terrace area if it could be used beyond the immediate Kitimat area.

Britain: Sunday Times “Rich List”

The Sunday Times, 22 May 2003

The other winners, according to the Sunday Times, are those who “acted with the most boldness.” The paper singles out the Reuben brothers, whose fortune is derived from their “extraordinary” performance in the Russian aluminium industry in the early 1990s. Extraordinary indeed. During the process of capitalist restoration and the selling off of state assets at bargain basement prices, David and Simon Reuben amassed an incredible 2.1 billion by investing in Russia’s aluminium industry and property. They jumped 248 places to rank fifth on the list after their wealth was “reassessed.”

Economist: Northwest done as aluminum king

The Olympian, Olympia Washington, Saturday, May 24, 2003

SPOKANE -- The Northwest's time as a major source of the world's aluminum is likely past, an economist said Friday at a regional conference.
The high cost of electricity needed to produce aluminum and the low prices that aluminum brings make it too expensive to operate the region's smelters, Terry Morlan said in a presentation at the Pacific Northwest Regional Economic Conference.

"It looks to us that the Pacific Northwest's era as an aluminum production center for the U.S. and the world is most likely over," said Morlan, a Northwest Power Planning Council economist.

Of the 10 aluminum smelters in the Northwest, only two are operating, and those at reduced levels. Of the eight others, two have permanently closed and two companies have filed for bankruptcy protection.

At one point, the region produced 43 percent of the nation's aluminum, employing 10,000 people in good-paying hourly jobs. But the smelters, built in the 1930s, '40s and '50s, are inefficient and use large amounts of expensive electricity, Morlan said.

Electricity prices, which for four decades were below $5 per megawatt-hour, since 1980 have steeply risen to about $35 per mwh, he said. Meanwhile, the price paid for a ton of aluminum has decreased by about 1 percent a year. The problem is exacerbated by reduced access to federal Bonneville Power Administration electricity by smelters and expansion of capacity in other countries, such as China, Morlan said.

Prospects aren't bright that power rates will come down, or aluminum prices will go up soon.

BPA lost about $600 million the last two years, and expects to lose another $300 million this year. The agency is looking for ways to cut costs internally, but rate increases might be unavoidable, the agency said.

"We are doing everything we possibly can to minimize future power increases," BPA spokesman Mike Hansen said from the agency's Portland headquarters. "But even if, God willing, we can hold rates to where they are today, it doesn't bode well for the aluminum industry."

It was difficult to find anyone from the industry to comment on Morlan's presentation.

DSI Inc., an organization that represented Northwest industries that purchased power directly from BPA, no longer has an office.

Jack Speer, a spokesman for Alcoa, whose Ferndale smelter near Bellingham is operating at two-thirds capacity, said he couldn't comment.

He referred a reporter to the company's corporate spokeswoman in Pittsburgh, but Joyce Saltzman was not in her office Friday, a secretary said.

"Low aluminum prices, as a result of a depressed world aluminum market, combined with high energy costs, and that doesn't appear to be a very good formula for Northwest aluminum companies," the BPA's Hansen said.

©2003 The Olympian

Alcoa an example of business thriving in Texarkana

Texarkana Gazette, TX 5/25/03

Alcoa's Mill Products Plant located on the outskirts of Texarkana is a thriving company that provides jobs for approximately 350 people in the Texarkana area.


Texarkana Gazette

Alcoa's Mill Products Plant located on the outskirts of Texarkana is a thriving company that provides jobs for approximately 350 people in the Texarkana area.

The plant specializes in the production of coiled aluminum sheet products for customers in the commercial transportation, automotive, construction and distribution markets.

A large segment of the aluminum sheet products produced at the plant supply the commercial truck trailer and construction markets.

The company has a monthly payroll of more than $1.5 million with an additional $500,000 spent on local goods and services, which has a positive impact on the immediate community and the city of Texarkana.

The employees of Alcoa are committed to being strong contributors to the community. Employees volunteer with numerous local agencies and participate in activities such as building homes with Habitat for Humanity, planting trees at Bringle Lake and building stalls for the Runnin WJ Ranch.

"Alcoa is a member of the community and as a member of community we feel its important to make a strong contribution and we do that through corporate initiatives as well as through encouraging employees to become involved in community activities," said Ann Whitty, director of manufacturing.

Alcoa continues to grow as a company and is in the process of opening a new production line and a new product line for Alcoa that will potentially increase employment by almost 30 people.

"We'll employ 27 people on the tube mill when we're at full production," Whitty said. "We're excited about having this new product line at Texarkana and delighted that the new customers will be using our products. The addition of these tube mills will provide Alcoa's customer a full range of welded tube products."

Texarkana was selected for tube mill production based on the geographic location of potential customers, existing raw material source for the mills and a dedicated workforce capable of insuring the success of this expansion, officials said.

The welded tube line transforms coiled aluminum sheets into a tube or other cylindrical shape.

The two lines will produce products with a diameter from half an inch to two inches in various gauge, lengths, alloy, temper, shape and finishes.

Welded tube products can be found in a variety of furniture, recreational and medical-aid supplies.

The facility started production in 1986 as Alumax Inc., but became part of Alcoa when Alumax was acquired in 1998.

The plant was originally built to serve the aluminum can market but in 1994 was converted from can stock to common alloy sheet.

The facility is situated in 900,000 square feet of covered space on a 120 acre wooded tract in Nash, Texas.

Qatar's UDC, Dubal plan aluminum smelter in Qatar

MENAFN, Africa - 26/05/2003

Qatar's privately held United Development Co. (UDC) and Dubai Aluminium Co. (Dubal) announced on Sunday plans to set up a joint venture to build an aluminium smelter in Qatar at an estimated cost of $2.1 billion, Reuters reported.

The smelter would initially produce 516,000 tonnes a year of primary aluminium with the potential of expanding to one million tonnes a year. UDC would have an initial 51 percent stake, while Dubal would own the rest.

UDC is one of Qatar's largest private holding companies with interests ranging from energy to real estate. Dubal is one of two aluminium producers in the Gulf. The other is Aluminium Bahrain (Alba). Saudi Arabia is conducting a feasibility study for what would be one of the largest aluminium plants in the Middle East.

Iran, Venezuela's CVG in alumina plant talks"

IRNA, Iran May 25, 2003

Iran intends to increase its aluminum producing capacity from the

current 140,000 to more than 1 Mt/y within 10 years and to this end is seeking the help of Venezuela's state-owned heavy industry giant CVG.

US Firm Opens Talks to End Dispute with Ghana's Government, Africa May 27, 2003

Reed Kramer Washington, DC

Negotiations are taking place this week in Ghana to resolve an ongoing dispute between the government and an American mining company that is complicating an otherwise cooperative relationship between two countries with long historical ties.

The disagreement, involving Houston-based Kaiser Aluminum and its Ghanaian subsidiary, Valco, has led to a suspension of all lending to Ghana by the Overseas Private Investment Corporation (Opic), a U.S. government agency that provides political risk insurance and loans to American businesses investing abroad.

"Ghana is being seen as not acting in a commercially reasonable manner that would ensure investor confidence," OpicPresident Peter Watson stated in a letter to Ghana's ambassador in Washington early this year. As a result of Ghana's actions, he said, "All applications for investment support in Ghana will remain under review." Watson, who refused several requests for an interview, said through a spokesperson this week that the agency "is accepting applications but not acting on them at the current time."

This week's negotiations in Ghana involve the Kaiser corporate vice president and general counsel, Edward F. Houff, and a ministerial team led by Ghana's energy minister, Dr. Paa Kwesi Nduom. Riva Levinson, who represents Kaiser Aluminum in Washington, said the company is "hopeful that a commercially negotiated deal can be reached."

The talks are being closely monitored in Washington, where the dispute has received high-level attention at a number of agencies, including the Treasury, State and Commerce Departments and the office of U.S. Trade Representative Robert Zoellick. At issue is the price and availability of electric power for the aluminum smelter at Tema operated by Valco, the Volta Aluminum Company, which is owned by Kaiser (90%) and Alcoa (10%).

Kaiser Aluminum first invested in Ghana shortly after the country gained independence from Britain in 1960. Since aluminum processing requires a large volume of affordable electricity, the investment was made feasible by construction of the huge Akosombo Dam on the Volta River, built with U.S. government assistance in what was regarded in Washington as a Cold War counterpoint to the massive Soviet-built Aswan Dam in Egypt.

Part of the current disagreement centers around the 50-year Master Agreement that was signed in 1962, when Kaiser began operations in the country. Although the agreement remains in effect, the government argues that the Power Contract contained in the Agreement has expired and that renewal is subject to Parliamentary approval. The government has sought to garner international support for its stance by publishing its position paper in various media, including (see The Position of Ghana on the Arrangements with Valco.

Ghana says Valco is paying 1.1 U.S. cents per kilowatt-hour, while the cost of producing electricity in the country has risen to 6.5 cents. Kaiser disputes the government's cost calculation and says the price of 3.0 cents that Ghana is demanding would push the cost of producing aluminum above the world market price.

A mediation effort in January broke down with no agreement. A new set of talks in Washington earlier this month proved more productive and resulted in concurrence by both sides to abide by arbitration, if negotiations don't produce a resolution, according to government and private sector sources. Kaiser has submitted the case to the arbitration panel of the International Chamber of Commerce.

"Should there be the need to continue on the arbitration path, we will be responsive, we will participate and we will respect whatever conclusions come in the end," Ghanaian Energy Minister Nduom told AllAfrica during a visit to Washington last month. He sharply dismissed suggestions by U.S. officials that Ghana acted without regard to the rule of law in this case, calling adherence to the law the "centerpiece" of President John Kufuor's program since he took office in early 2001.

"This is the government that has said 'zero tolerance' for corruption and that no one is above the law," Nduom said. "For anybody, anywhere to suggest that this particular government would not respect contracts or any part of the rule of law is something that we will contest very, very vigorously."

Ghana no longer has sufficient hydroelectric power to meet rising industrial and consumer demand and must generate electricity from thermal plants that burn petroleum, a more expensive process. In addition, Ghana has to import power from Cote d'Ivoire, Nduom said. The water level in Volta Lake has dropped to an unsustainably low level, and the lake needs healing, he said.

One concern on the Ghanaian side is the fact that Kaiser Aluminum has been in bankruptcy for more than a year. According to Jones Day, the company's law firm, the action was caused by an "unusually weak aluminum market," as well as the cost of asbestos litigation and rising retiree pension and medical obligations. Kaiser has said the bankruptcy plays no role in the dispute with Ghana and will not affect its future in the country. The company's largest shareholder is Maxxam, a Houston holding company controlled by financier Charles Hurwitz.

The discussions this week in Accra are aimed at resolving the disagreements and devising a solution that does not require arbitration. That prospect appears to have been enhanced by Ghana's willingness to accept an arbitrated outcome, if needed. Already, the atmosphere for discussion has improved, leading to an easing of the tensions that had been hampering bilateral ties, according to both U.S. and Ghanaian officials.

Even without a final accord, Ghana's acceptance of binding arbitration is expected to open the way for resumed lending by Opic to the country. Earlier this month, Opic took part in a trip to Ghana in connection with financing for a $100-million upgrade by CMS Energy for its thermal power plant at Takoradi. The expansion by the Michigan-based firm would significantly contribute to lowering the cost of electricity in Ghana, a core issue in the dispute between Kaiser Aluminum and the government. Last month, CMS Energy joined with other firms to establish the U.S. Ghana Economic Council to encourage improved bilateral ties.

According to Nduom, the government of Ghana wants to find an "amicable settlement" with Kaiser that will bring the matter to a close.

Kitimat urges B.C. government to back community's battle with Alcan

Vancouver Sun, Canada Tuesday, May 27, 2003

VICTORIA (CP) -- Kitimat residents were urged Tuesday to reconsider launching a court battle against Alcan Inc., the B.C. north coast community's largest employer.

Skeena MLA Roger Harris, who represents Kitimat in the B.C. legislature, said lawsuits are not the best way to resolve business disputes.

But Kitimat's mayor, a former B.C. Liberal candidate, said attempts to negotiate with Alcan have been fruitless and the courts appear to be the community's last resort.

"We want some kind of certainty for our community," said Richard Wozney. "We don't want to go through this for another 10 or 15 years in order to decide who's right and who's wrong."

Alcan signed a contract with the B.C. government in 1950 that allowed the company to use cheap hydroelectric power to run its aluminum smelter in Kitimat.

But Kitimat is concerned that Alcan has been using the deal in recent years to expand its international power sales at the expense of local jobs, Wozney said.

"We've got legal opinions which have told us that what Alcan is doing now is in breach of the contract," he said.

Alcan's Kitimat smelter employs about 1,800 people and the company provides about 6,000 direct and indirect jobs in the northwest. The smelter manufactures and exports about 275,000 tonnes of aluminum annually.

Wozney was part of a Kitimat delegation that handed the government a petition Tuesday demanding the province enforce the 1950 agreement that forces Alcan to use surplus hydroelectric power to create local jobs and not international electricity sales.

More than 70 per cent of Kitimat voters signed the petition.

"What you see around here is the grass roots of Kitimat," said former mayor Ray Brady, a New Democrat supporter.

"There's past presidents of the chamber of commerce, there's NDPers, there's some Liberals. It's a real cross section of the community."

Harris said he's trying to ensure Kitimat builds winning conditions that provide economic growth in the region.

He said there are differing legal opinions of the contract Alcan has with the province, and starting a court fight could hurt the community.

"I am very uncomfortable being in that environment where a single individual, a judge that has no ownership of what he could do, could make a ruling that in fact could allow Alcan the free sale of power," said Harris.

Alcan spokesperson Richard Prokopanko said Alcan would rather continue talking to Kitimat than fight the community in court.

RusAl Output Hike

Moscow Times, Russia May 27,2003

KRASNOYARSK, Western Siberia (Reuters) -- The world's No. 2 aluminum smelter, Krasnoyarsk, said Tuesday that it plans to increase production significantly, but in the medium-term it will push up existing capacity.

The Krasnoyarsk smelter, owned by Russian Aluminum, will produce 890,000 metric tons of primary aluminum this year.

Alcoa Launches New Websites for Primary and Alumina Markets

Business Wire (press release) May 27, 2003

PITTSBURGH--(BUSINESS WIRE)--May 27, 2003--Alcoa has launched new websites for two of its major markets - Primary Metals ( ) and Alumina and Chemicals (AWAC) ( ). These new sites outline Alcoa's capabilities, solutions the company offers, locations and nameplate capacity for Alcoa's aluminum smelters and alumina refineries worldwide, and news from these markets.

"There is no company in the world with more experience in mining, refining, and smelting aluminum than Alcoa," said G. John Pizzey, executive vice president and group president of Alcoa Primary Products. "There is no better way for customers to understand our industry leadership more quickly than a global snapshot of our capabilities. We want to be the starting point of choice for the manufacturers of aluminum products worldwide, and with these new websites customers will see that we are a global source for their global needs."

In addition to these two new websites, Alcoa has also created more than 30 countries sites, location-specific websites, a global map tool, community highlights and customer success stories on

CONTACT: Alcoa Inc. Joyce A. Saltzman, 412/553-4467

$20.3 billion global corporation will use online training to spread its ethics and compliance culture to newly acquired companies

Business Wire (press release) May 27, 2003

Alcoa, the world's largest aluminum producer, has chosen Integrity Interactive's Web-based training courses as part of a company-wide enhancement of its ethics and compliance programs, Integrity Interactive announced today.

Integrity Interactive is providing Pittsburgh-based Alcoa with online training modules covering more than 140 ethics and compliance topics ranging from antitrust prevention to safety-related issues. Alcoa, a $20.3 billion, 127,000-employee corporation with operations in 40 countries, will use the Integrity Interactive modules to quickly and efficiently train a substantial portion of its employees in ethics and compliance issues. Employees receive e-mail notifications listing the required courses and recommended supplemental courses. The Integrity Interactive tracking system tells Alcoa's ethics compliance managers who have taken the required courses, whether they completed them, and how well they did. The company plans to expand its use of Integrity Interactive courses after the initial rollout is completed in 2003.

Alcoa selected Integrity Interactive for its compliance expertise, high completion rates and courses that favor plain language and real-world scenarios over legal terminology. That makes them appropriate for the full range of Alcoa employees, from the executive team to front-line workers, according to Perry Minnis, Alcoa's Director, Ethics Compliance and Advisory Services. Integrity is also customizing some of its modules with Alcoa-specific policies and information.

"Historically, our process for teaching our value system and ethics was accomplished through preventive law training, normally conducted at a business' request. Many employees learned throughout their career by asking questions and observing co-workers," Minnis said "When our population went from 60,000 to more than 100,000 over the last several years, however, we didn't have years for people to catch up. A Web-based system is a convenient, cost-effective vehicle that reaches large audiences. The message is also consistent. It would have been hard to maintain that consistency if we did all the training through our managers. " Alcoa's Integrity Interactive-based training program is part of a broad-based program to reinforce its culture and ethics throughout global operations with a particular focus on the companies it acquired during a 1990s expansion period that quadrupled its size. Starting in 2000, the company launched an aggressive program to promote its corporate culture, which included ethical and compliance guidelines. Integrity Interactive offered the means to train a significant part of the fluctuating employee population in a relatively short time with consistency and without large overhead expenses.

"Progressive companies like Alcoa that are serious about propagating their corporate cultures and value systems are increasingly realizing the value of Web-based ethics and compliance training," said Integrity Interactive President Carl Nelson. "We're grateful for the opportunity to show how well our training can work in a large, geographically dispersed company like Alcoa, the way it does at other Integrity Interactive customers such as Chevron Phillips, Cox Communications, Dow Corning, and General Dynamics."

Masco to invest US$1.5b in machinery for plant

Star, Malaysia - May 26, 2003

MASCO Aluminium Sdn Bhd expects to invest US$1.5bil in machinery alone for the upcoming aluminium smelting plant in Lumut, Perak.

Its chairman E.W.C Wong, told Bernama in an interview that the machinery – from China, France, Japan, Germany and the US – would employ the latest technologies for the production of aluminium.

With these latest technologies, he said the company would be able to produce high quality aluminium.

Work on the RM9.8bil aluminium smelting plant project is expected to commence in August this year and would be undertaken by Masco, a company set up by Charus Development Co, a New York-based joint venture between several US, China and German companies.

Wong said that once the plant was built, two of the biggest alumina suppliers, Swiss company, Glencore International AG and Comalco from Australia, would be supplying the raw material (alumina) for Masco.

He said the two companies would be also doing the marketing and distributing work for the company.

He said the new plant would also provide employment opportunities for locals with about 2,000 personnel comprising professionals and general workers would be recruited.

Personnel would be recruited by batches and some would be selected to go for training abroad. – Bernama

Dubal in Qatar smelter venture

Gulf News, United Arab Emirates - May 25, 2003

Doha/Dubai |By WAM and A Staff Reporter | 26-05-2003

His Highness Sheikh Hamad bin Khalifa Al Thani, Emir of Qatar, received yesterday Sheikh Hamdan bin Rashid Al Maktoum, Dubai Deputy Ruler and UAE Minister of Finance and Industry.

Sheikh Hamdan conveyed greetings from President His Highness Sheikh Zayed bin Sultan Al Nahyan and His Highness Sheikh Maktoum bin Rashid Al Maktoum, Vice President, Prime Minister of the UAE and Ruler of Dubai.

They discussed issues of mutual interest and focused on ways to enhance fraternal relations between the UAE and Qatar.

An agreement on joint investment in aluminium industry was signed, in the presence of Sheikh Hamad and Sheikh Hamdan, between the Dubai Aluminium Company (Dubal), and Qatar's United Development Company (UDC).

Ahmed Humaid Al Tayer, Minister of Communications, who is also the Board Chairman of Dubal, and Hussein Al Fardan, UDC Board Chairman, signed the agreement.

According to the agreement, the two sides will enter into a joint venture to build, own and operate a primary aluminium smelter at the Ras Laffan Industrial City, about 80km north of Doha.

The smelter will initially produce 516,000 metric tonnes a year of primary aluminium with the potential to expand in phases to over one million metric tons a year, said a joint statement by the two companies.

The smelter's primary electrical energy requirements will be met by a dedicated power plant with natural gas supplied from Qatar's huge North Field (proven reserves of 900 trillion cubic feet).

The smelter will utilise Dubal's CD 26 technology developed jointly with COMALCO Aluminium Ltd. of Australia, and will benefit from Dubal's experience and expertise gained at its Jebel Ali smelter in Dubai, said the statement.

The project's strength is derived from a combination of the partners' respective abilities. UDC brings in project development and management skills and favourable Qatar conditions, whilst Dubal brings in very successful technical, operation and marketing know-how.

These capabilities, together with the potential synergies between two world scale smelters, will position the Qatar smelter among the world's lowest cost primary aluminium producers, added the statement.

In addition to the smelter project, other UDC projects include a district cooling company established recently in partnership with Tabreed of UAE, a urea formaldehyde plant in partnership with Qatar Fertilizer Company (Qafco), a Linear Alkyl Benzene (LAB) project in partnership with Qatar Petroleum (QP), and the multimillion dollar West Bay Island international resort project.

UDC also plans to list its shares on the Doha Securities Market in due course

Dubal , on the other hand, is currently undergoing an expansion which will raise aluminium capacity to 710,000 metric tones.

Dubal has six potlines with a current capacity of 536,000 metric tonnes per annum, a dedicated 1450 MW power station and a desalination plant, capable of producing 30 million gallons of fresh water daily.

Dubal's metal is sold to customers across the world, from Japan and the Pacific Rim, to the U.S., Europe and the Middle East.

Boeing considers composite material for fuselage, wing

Wilmington Morning Star, NC - May 28, 2003

The Associated Press

The Boeing Co. may use composite materials instead of aluminum in building the fuselage and possibly the wings of its new jet model, the 7E7.

The company has long said it would incorporate some of the research on composites and other technology from its now-shelved Sonic Cruiser project into the mid-sized, super fuel-efficient 7E7. Composite materials, which are stronger, corrosion-resistant and lighter than aluminum, are also generally more expensive to produce.

Boeing already uses some composites in its 777 jet, most notably in the tail. But a Boeing engineering team in the company's Frederickson, Wash., division is figuring out how to use composites in the wing while containing the costs, according to The Seattle Times. And if composites are used, the wings would probably be built overseas.

John Triplett, director of Structural Composites in Frederickson, said that the wings would most likely be outsourced to a supplier.

Although Triplett would not say who might get the wing work, the Times reported that Japan is the likeliest candidate, because of its ability to do complex manufacturing, its expertise in composites and a large Boeing-based airline industry.

Boeing is already working with the Federal Aviation Administration to win certification on expanded composite use, the Seattle Post-Intelligencer reported, citing unidentified sources. Although composites are already used in Airbus and Boeing planes, they received greater scrutiny after the 2001 crash of an American Airlines jet shortly after takeoff from New York. The Airbus A300 tail, made of a nonmetallic composite, snapped off before the crash, which killed 260 people on board and five people on the ground.

Boeing will also probably use new aluminum alloys, some fiberglass, more titanium, and stainless steel in its 7E7, which the company expects to enter service in 2008.

Airbus is also planning to use more composite materials in its superjumbo jet, the A380, now in development.

SUAL Gets Nadvoitsy

Moscow Times, Russia - May 28, 2003

MOSCOW (Reuters) -- The shareholders of No. 8 aluminum smelter, Nadvoitsy, have approved its full integration into the country's second-biggest aluminum producer, SUAL, the group said Wednesday.

SUAL currently controls 92 percent of Nadvoitsy, which produced around 74,000 metric tons of aluminum last year.

Kaiser's Valco smelter to operate fully by Jan '06

Reuters, 05.30.03, 6:10 PM ET

NEW YORK, May 30 (Reuters) - Kaiser Aluminum and Chemical Corp. <KLUCQ.OB> said on Friday it signed a memorandum of understanding with Ghana and Volta River Authority for its 90 percent owned Volta Aluminum Co. (Valco) smelter in Ghana to be fully operational by January 2006.

Kaiser's news release said the two parties reached a memorandum of understanding in which Ghana agreed to allocate power to Valco on a firm basis from sources not solely dependent on the Volta Lake and for aluminum smelter operations to return to normal.

At January 2, 2003, Kaiser announced it had curtailed production at Valco due to reduced power allocation for 2003. Then on April 30, it shut primary aluminum production completely due to power shortages.

Water levels used to generate power in the region had fallen, but rain was expected to replenish the nearby lake during the rainy season later in the year.

Valco has five potlines, each with a 40,000 annual metric tonne capacity of primary aluminum production.

Kaiser said the memorandum, drawn up after a three-day meeting in Accra, Ghana, specified that Ghana and the power authority will work with Valco to provide firm power to the Valco smelter at competitive prices and levels.

May 2003 until December 2005 will be considered a transitional period during which energy rates and allocation and other operational issues will be determined.

Specifically, Kaiser and Ghana agreed Valco's power supply will be a mixture of hydro and thermal and Ghana will take all reasonable steps to ensure the restoration of the Volta Lake to operational levels.

Additionally, Valco said it will conduct feasibility studies of potential bauxite reserves and alumina production in Ghana and will seek investment partners for those operations.

Copyright 2003, Reuters News Service

Century and Kaiser Reach New Alumina Supply Contract

Business Wire (press release)

MONTEREY, Calif.--(BUSINESS WIRE)--May 30, 2003--Century Aluminum Company (Nasdaq:CENX) and Kaiser Aluminum and Chemical Corporation have entered into a new supply contract covering all of the alumina requirements of Century's Hawesville (KY) Operations for the period from January 1, 2006 through December 31, 2008.
The price of alumina purchased under this contract will be indexed to the price of primary aluminum on the London Metal Exchange. An existing alumina supply contract between Century and Kaiser covering the requirements of the Hawesville facility is priced at a similar market-based formula and expires December 31, 2005.
The Hawesville reduction plant has capacity to produce 244,000 metric tons of primary aluminum a year. Approximately two units of alumina are required to produce one unit of aluminum. Alumina, the feedstock for producing primary alumina, is chemically refined from bauxite ores.
Century owns 525,000 mtpy of primary aluminum capacity. In addition to the Hawesville plant, it owns and operates a 170,000-mtpy plant at Ravenswood, WV and a 49.67 percent interest in the 222,000-mtpy reduction plant at Mt. Holly, SC. Alcoa, Inc. owns the remainder and is the operating partner. Century's headquarters are in Monterey, CA.