AluNews - October 2004

Union, Alcoa reach tentative agreement at Wenatchee smelter (subscription), OR 10/01/2004 Associated Press

Alcoa announced Friday that it had reached a tentative agreement with two labor unions representing workers at the Wenatchee Works aluminum smelter, potentially saving hundreds of jobs at the plant.

About 400 plant workers had received layoff notices in July, effective on or about Oct. 1. Alcoa rescinded the notices Friday after the two sides reached an agreement on health benefits.

"We are delighted that we have been able to reach this tentative agreement. Hopefully this will be approved and we will have the conditions to enable restart of the Wenatchee smelter," Alan Cransberg, Alcoa's President of North American Primary Metals, said in a news release.

Wenatchee Works in central Washington was idled in July 2001 when aluminum prices fell and the cost of energy skyrocketed. With wholesale aluminum prices up more than 20 percent in the past year, the company had sought to reopen the plant but demanded concessions from workers.

The company's final offer asked union members to pay 10 percent of their health care premiums and accept more health care costs. In July, leaders in the Wenatchee Aluminum Trades Council refused, without first discussing the offer with union members. The move rankled some members, who later said they would have voted to accept the offer.

The Trades Council is an umbrella group representing the Wenatchee Works' five trade unions.

The United Steelworkers of America then stepped in to take over negotiations.

The tentative deal would place smelter employees on the company's "Select Benefits" health care program beginning in January 2005 until the contract covering 15 Alcoa facilities and 8,900 employees is renegotiated in 2006.

The agreement requires a vote of union members.

If approved, two of the four lines at the smelter are expected to be restarted, depending on the availability of acceptable power contracts, the company said. The move would be completed by mid-2005.

The smelter has been on standby for three years since the West Coast power crunch. Alcoa was able to keep the workers on the payroll because of money it made by selling its share of electricity from the Chelan County Public Utility District.

Alcoa says Wash. smelter won't be closed after all

Investor's Business Daily (subscription) The Associated Press October 01, 2004

The world's largest aluminum maker, Alcoa Inc. Friday said that if a tentative agreement is approved, it will restart production at its idled aluminum smelter in Wenatchee, Wash., most likely bringing back 400 employees who were slated to be laid off.

The Pittsburgh-based company issued layoff notices in July when it could not agree to labor terms with the local chapter of the United States Steelworkers Union and the Aluminum Trades Council of Wenatchee, Wash. But those workers will have a chance to vote in coming days on keeping their jobs.

If the agreement is approved, Alcoa says it plans to restart the smelter that has been idle since 2001 due to high power costs in the region and opportunities to sell its power reserves at a profit.

Since 2001, workers at the plant have been performing maintenance duties and public service projects. The company said two of the four lines at the smelter would likely be restarted.

Under the new agreement, Wenatchee employees will receive health care benefits starting in January 2005 that are similar to benefits that Alcoa's nonunion employees receive.

Those benefits will last for the Wenatchee workers until 2006, when a master contract is renegotiated for 8,900 union workers at 15 Alcoa facilities.

"We are delighted that we have been able to reach this tentative agreement. Hopefully this will be approved and we will have the conditions to enable restart of the Wenatchee smelter," said Alan Cransberg, Alcoa's President of North American Primary Metals.

Local workers, who wanted to preserve their jobs at the plant, were at odds with some of their representatives and the national union's initial rejection of the contract.

The national USWA felt the contract that involved benefits cuts would set a bad pattern agreement for workers at other Alcoa plants. And union officials claimed victory in the matter.

"We repeatedly told Alcoa that negotiations over health insurance benefits for the USWA's 9,000 members who work under the Master Agreement could only happen at the master negotiating table," said Andrew Palm, USWA vice president of Administration and Chairman of USWA's Alcoa Negotiating Committee. "We have maintained that important principle."

And David Foster, Director of USWA District 11, said the tentative agreement would maintain the integrity of the Alcoa master agreement, would keep members employed at the restarted facility and would make sure they receive the same health care benefits as other aluminum workers when a new master agreement is negotiated.

When restarted, the Wenatchee facility and Alcoa's Intalco facility in Ferndale, Wash., may likely be the only aluminum smelters operating in the Pacific Northwest, which used to have nearly a dozen such facilities.

Alcoa willing to resume labor talks at Quebec smelter

By Leslie Wines

Last Updated: 10/1/2004 6:00:42 PM

SAN FRANCISCO (CBS.MW) -- Alcoa said Friday that it remains willing to negotiate with representatives of about 800 striking unionized workers at a smelter in Becancour, Quebec, after talks ended Thursday night.

The Pittsburgh-based company's stock (AA) closed up 42 cents to $34.01.

Shares of fellow aluminum producer Alcan (AL), which owns 25 percent of the Becancour smelter, ended up 93 cents at $48.73.

Representatives of the union, Syndicate des employees de l'Aluminerie de Becancour, Thursday said they don't expect talks to resume soon.

Alcoa said it is willing to resume talks with the union anytime.

In September, Alcoa warned that its third-quarter earnings would fall short of analysts' prior expectations for a number of reasons, including the Becancour strike. Alcoa reports results on Thursday.

The strike, which began in July, has forced Alcoa to cut the smelter's output to about one-third of normal. About 100 managers remain at work.

An Alcoa spokesman said the company is not seeking layoffs at the Becancour site at this point, but instead wants changes in work rules and methods.

© 1997-2004, Inc.

Kaiser closes on sale of refinery, mining operation

Houston Business Journal, TX 04 Oct 2004

Houston-based Kaiser Aluminum has completed the sale of its Gramercy, La.-based alumina refinery and Jamaica-based KJBC bauxite mining operation to Gramercy Alumina LLC and St. Ann Bauxite Ltd. Both companies are subsidiaries of Century Aluminum Co. and Noranda Inc.

The transaction included cash proceeds of approximately $23 million, subject to certain adjustments.

As previously disclosed, Kaiser expects that it will use a substantial portion of the proceeds to satisfy certain retained obligations and to fund certain transaction-related costs.

Kaiser Aluminum, which is working to emerge from Chapter 11 bankruptcy, produces fabricated aluminum products, alumina, and primary aluminum.

© 2004 American City Business Journals Inc.

Russian Firm Seeks Venture in Venezuela

Forbes 10.04.2004, 07:28 PM

Russian Aluminum, or Rusal, is seeking a joint venture with Venezuela's state mining conglomerate to build a bauxite plant, Venezuela's vice president said Monday.

Rusal and the Corporacion Venezolana de Guyana, or CVG, would invest at total of $500 million to build the factory, Jose Vicente Rangel told Venezuela's state-run news agency.

Rangel met with Oleg Deripaska, a representative of Rusal, in Russia this week.

The CVG produces bauxite, an ore which is used to make aluminum at its Bauxilum subsidiary in eastern Venezuela. The CVG has the capacity to produce 640,000 tons of aluminum annually at its nearby Alcasa and Venalum aluminum plants.

Russian Aluminum, headquartered in Moscow, accounts for 75 percent of Russia's primary aluminum output and 10 percent of global output.

Venezuela wants to expand aluminum production at its plants by adding new production lines.

Since President Hugo Chavez took office in 1999, Venezuela has forged stronger ties with Moscow while relations between Caracas and Washington have suffered.

Chavez said Sunday that Venezuela was planning to buy at least 40 military helicopters from Russia to patrol the increasingly dangerous border it shares with Colombia.

SUAL Empire Grows

Moscow Times, Russia 04 Oct 2004

MOSCOW (Reuters) -- The country's smallest aluminum smelter, Volkhov, and Pikalyovo alumina refinery have become full subsidiaries of No. 2 aluminum producer SUAL, the company said Monday.

The two plants, located in northwestern Russia, used to be part of Metallurg, in which SUAL and its ally Sevzapprom controlled 80 percent.

Another 14 percent in Metallurg belonged to the country's top aluminum company and SUAL's main rival, RusAl. Last week, SUAL announced an additional issue of its shares to be swapped for Metallurg stock.

PBGC to take over Kaiser's pension plan

Houston Business Journal, TX 04 Oct 2004

The Pension Benefit Guaranty Corp. is assuming responsibility for Kaiser Aluminum's pension plan, which covers active and retired employees at some of Kaiser's facilities represented by the United Steelworkers of America.

The PBGC took over managing Kaiser's salaried employee pension plan in December 2003 and the inactive pension plan in June 2004.

The U.S. Bankruptcy Court for the District of Delaware ruled in February that Kaiser met the legal requirements for distress termination of the pension plan and several other plans.

Houston-baser Kaiser, which is working to emerge from Chapter 11 bankruptcy, produces fabricated aluminum products, alumina and primary aluminum.

Alba to bolster strong links with Far East firms

Gulf Daily News, Bahrain 04 Oct 2004


ALBA is sticking to its established markets in the Far East as its massive expansion project nears completion.

Bahrain's Free Trade Agreement (FTA) with the US will not immediately increase Alba's exports to the US, said chief executive Bruce Hall.

He said that Alba would instead continue to develop its strong links with companies in the Far East.

"We will look at opportunities in Europe and the US but we will continue to build on our traditional customer base in the Far East," he said.

"We are at a disadvantage when trading with Europe because of the six per cent import duty our products are subject to.

"Similarly, high shipping costs to the US make it difficult for us to compete with Canadian smelters which are much closer."

He was speaking at the Alba Club yesterday prior to a Press tour of Alba's smelter.

Alba's $1.7 billion (BD642.6 million) Potline 5 expansion project will make the smelter the largest in the world outside of Eastern Europe.

The new potline will add more than 300,000 tonnes per annum (tpa), an extra 60pc, to the company's current capacity.

This will take the total primary aluminium produced by Alba over 800,000tpa, when the project is completed early next year.

Meanwhile, Alba's Line 5 project surpassed the 17 million-man-hour safety milestone with only two lost-time incidents.

The Line 5 project team congratulated the workforce for this achievement and presented their 7,200 on-site employees with a commemorative gift.

"We are extremely proud to have passed 17m man-hours with only two lost time incidents as this is a major accomplishment for any construction project of this scale," said Line 5 Project general manager Niall O'Byrne.

"We would like to thank our contractors and the whole Line 5 Project Team for their efforts in implementing all the safety measures and for their commitment in ensuring that an accident-free environment is maintained at all times on the construction site."

The Potline 5 project is divided into two elements, with a major power station development, at a cost of $450m, alongside the smelter expansion which, costs $1 bn (BD378m).

In April 2002 Alba appointed Mott McDonald as the cngineering and construction manager for the power station development.

The engineering, procurement, construction and management contract for the smelter expansion was awarded in July 2002.

SMS Supplying Homogenizing/Sawing Plant for Venalum

33Metalproducing 06 Oct 2004

Part of smelter’s capacity expansion

Venezuelan aluminum smelter CVG Venalum has ordered a new continuous homogenizing and sawing operation from Hertwich Engineering, an SMS Meer business unit. The 80,000-metric tons/year installation is part of Venalum’s 70,000-mtpy expansion of its Peurto Ordaz smelter.

The order includes an ultrasonic inspection station and billet-handling equipment. All the processes are fully automated, according to SMS. Along with the homogenizing furnace and air-and-water cooling station, the installation includes automatic stacking, weighing, and banding equipment for long and short billets.

Commissioning is scheduled for June 2005.

by Metal Producing & Process (

USWA Makes Comprehensive Proposal to Save Ormet October 05, 2004 02:00 PM US Eastern Timezone

Union Says Management 'Unable to Lead Restructuring'

COLUMBUS, Ohio--(BUSINESS WIRE)--Oct. 5, 2004--News from the United Steelworkers of America: Frustrated with Ormet Corporation's inability to propose a viable plan to restructure their Company, the United Steelworkers of America (USWA) today sent the company a comprehensive proposal to save Ormet.

"The USWA remains vitally interested in bargaining a new agreement that would facilitate the reorganization of the Company in the interest of the employees and retirees we represent and the communities in which they live," David McCall, director of USWA District 1, said in a letter to Ormet CEO Emmett Boyle.

McCall said the union's proposal "could form the basis of innovative and modern collective bargaining agreements and the reorganization of the Company," pointing to "the Union's proven track record of successfully restructuring troubled companies" in steel, aluminum and other industries.

The letter characterized the company's proposed plan of reorganization as "the product of a fervid imagination," noting that Ormet has ignored the USWA's "vast reservoir of experience," and failed to provide "the information needed to understand the Company's proposal and the business structure supporting that proposal" in spite of repeated requests.

"Unlike you," McCall told Boyle, "we are prepared, without precondition, to bargain in good faith over every aspect of this proposal."

"You have shown yourself unable to lead the restructuring of the Company," the letter concluded. "We pray that you now have the wisdom to follow."

Contacts United Steelworkers of America (USWA) Dave McCall, 614-888-6052

BHP Billiton's boss cold-shouldered in Moscow

Mineweb, South Africa '05-OCT-04 16:00' GMT © Mineweb 1997-2004

By: John Helmer

MOSCOW ( -- When Charles (Chip) Goodyear of BHP Billiton made the first-ever official visit to Moscow for a chief executive of his company this week, he received a limp handshake from a demoted minister, and a warning not to think of investing in Russia unless he comes back with a strategic partnership arranged with a Russian company. Twenty-four hours later at Goodyear's front office in London, executives and spokesmen were still having trouble finding out whom their boss had met, and what he had discussed with them. PERTH ( -- Goodyear met on Monday with Victor Khristenko, who currently holds the Industry and Energy portfolio in the Russian government, after losing his deputy prime ministership in President Vladimir Putin's March cabinet reshuffle. Khristenko's spokesman Vasily Asmakov told Mineweb "the meeting had a get-acquainted character. Mainly, Mr. Goodyear was asking for recommendations on how it is better for a foreign company to do business in Russia."

Asked whom else Goodyear may have met in Moscow, BHPB spokesman Mark Lidiard first said "we would not comment on that." On checking with Goodyear's delegation in Moscow, he said "we have met a number of ministers appropriate to our business interests," indicating there had been more than one minister. He refused to disclose the other identity.

Russian officials in charge of mining and diamonds were blunt that they had not been on Goodyear's itinerary. A spokesman for the Minister of Natural Resources, Yury Trutnev, said that "Trutnev was not at that meeting [with Khristenko], because it was not announced to us." Nor was Trutnev expecting to meet Goodyear this time. The spokesman commented politely, but with a subtle warning to Goodyear to get his bureaucratic ducks in order: "Hopefully there will be another meeting of Charles Goodyear with Trutnev if they are really interested in natural resources investment." Trutnev is in charge of licensing all mineral, oil and gas extraction projects.

BHP Billiton is currently selling alumina to Russia, and describes the second aluminum producer in the country, Siberian Ural Aluminum (SUAL) as a client. SUAL's international arm is now headed by Brian Gilbertson, Goodyear's predecessor as chief executive of BHP Billiton. Neither BHP Billiton nor SUAL would say if they have been in negotiation to fill Alcoa's place as a strategic partner in SUAL's development of an alumina refinery and aluminium smelter in the Komi region, near SUAL's expanding Middle Timan bauxite mine. SUAL announced Alcoa's withdrawal a few days ago.

Bill Spears of SUAL said: "It is not our policy to disclose the identity of those participating in business meetings with us. Regarding Komi, I can only confirm that SUAL is in active discussion with leading global firms, that are potential partners for the Komi project." He added that "given the costs involved of shipping alumina to Russia, there is clearly an advantage to sourcing supplies locally." But he also noted that SUAL's smelter expansion plans could consume much of the projected capacity for alumina to be refined at Komi.

BHP's diamond division, based in Antwerp, has been trying for several years now to develop a relationship with Russia's dominant diamond miner Alrosa, and according to Khristenko's office, Goodyear mentioned his company's interest in diamonds. However, the CEO of Alrosa Alexander Nichiporuk did not meet Goodyear. Late Tuesday, Alrosa told Mineweb there had been no sign from BHP Billiton of wanting to meet during Goodyear's visit.

De Beers, the global diamond-mining leader, preceded BHP Billiton into Moscow late last week, and managing director Gary Ralfe met with Prime Minister Mikhail Fradkov, as well as with the Alrosa leadership, for talks on investment in the mining sector.

It is possible that BHP's corporate memory retains a jaundiced view of the Russian diamond-mining sector, in which the company wrote off about $5 million exploring the Snegourochka ("Snow Girl") property in the Arkhangelsk region in the early 1990s. Another unhappy experience at that time was the pre-feasibility study BHP did of the Udokan copper deposit in the Chita region, the licence for which went to an ill-equipped Russian rival, who eventually lost it for lacking the capital or expertise to build a mine. Then there was the $35 million BHP's Hamilton Oil subsidiary lost in the mid-1990s at an abortive offshore oil and gas project at Prirazlomnoye, above the Arctic Circle. A study of coal mining in the far eastern region of Sakha was relatively modest in cost, but it too went nowhere. Little wonder then that BHP closed down its Moscow representative office several years ago, and that apart from the diamond probes, the company has kept its distance from Russia.

According to a statement issued today by BHP Billiton in London, Goodyear went to Moscow on a 'fact-finding mission", to assess Russia "as both a market for our product where we currently sell bauxite and alumina, and potentially as a future resource base." In Khristenko's statement, Goodyear was reported as mentioning "the prospects of participation of BHP Billiton in Russian projects in the oil and gas, metallurgical, and coal sectors, and also in extraction of diamonds."

He was also reported by the Russians as having "expressed interest in investment of significant means in natural resources development in the territory of the Russian Federation and asked the minister to designate the basic steps which are necessary to be taken into account by foreign companies for lodging investments in Russia."

Khristenko reportedly told Goodyear "there should be a precise understanding of the existing legislation and the basic directions of its reform." In addition, Khristenko recommended that Goodyear conclude "a strategic partnership with Russian companies...[to] allow [BHP Billiton] to exploit advantages at reforming the legislation, to lower risks, and to receive the best representation about features of interesting sectors." In case Goodyear did not quite get the message, Khristenko repeated his emphasis, saying "strategic partnership with Russian companies opens opportunities for cooperation between the [Australian and Russian] companies in third countries." As he was winding up the meeting, Khristenko reportedly added: "Strategic partnerships serve the improvement of positions of Russian companies both on the international commodity market, and on stock markets."

Norilsk Nickel, Russia's leading mining company, with interests in nickel, copper, platinum group metals, and gold, said it had not met with Goodyear.

According to Lidiard, "Mr Goodyear is not in Russia to discuss any specific projects or investment opportunities." Khristenko's spokesman told Mineweb that the minister had said "that when BHP Billiton will choose a precise project, they could meet again and discuss everything regarding the concrete example."

OUR TAKE: Alcoa Mends Fences

Motley Fool October 5, 2004

By Brian Gorman

Alcoa (NYSE: AA) rarely pops up as a hot stock at cocktail parties, but that doesn't mean that the firm isn't important. As the world's largest aluminum company, it's connected to many parts of the economy, so how it manages its business should be of at least general interest to investors.

In this case, what seems worthy of some attention is Alcoa's recent dealings with its labor force in Wenatchee, Washington. As what some might call an "old economy" company, Alcoa employs a huge number of people, about 120,000 at the end of 2003. Workers, then, are a large asset.

In late July, Alcoa announced that it would permanently close its Wenatchee smelter because it could not arrive at an agreement with the plant's 400 employees over a plan for health care benefits. The firm indicated that it would have to record a $20 million charge to third-quarter earnings to account for the shutdown, according to the Chicago Tribune.

This week, though, Alcoa managed to reach a deal with workers at the site. As a result, Alcoa should be able to bring the plant back on line soon. In addition, it won't have to take the charge, which should help offset some of the disruption to the company's operations from Hurricane Ivan.

The lesson is that investors should pay close attention to labor issues and companies that effectively negotiate with employees, since this can have a marked effect on the bottom line. It should also be said that labor disputes are anything but uncommon. For example, while it has not made huge headlines, a union representing almost half of Disney's (NYSE: DIS) Walt Disney World theme park employees recently rejected a labor contract.

For its part, Alcoa is not exactly batting 1,000 with employees. More than 800 workers are striking at its Becancour, Quebec, smelter, according to CBS MarketWatch. Still, the company has said it remains open to resuming talks with workers there at any time.

In today's global economy, Alcoa and its peers have more flexibility than ever before to relocate production in order to tap into cheaper labor and lower energy prices. Nevertheless, the art of negotiation and effective labor management remain attributes to which investors should pay close attention.

Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.

Kaiser sold

Jamaica Gleaner, Jamaica Tuesday | October 5, 2004

KAISER BAUXITE Company completed the sale of its partnership interest in Kaiser Jamaica Bauxite Company (KJBC) last week, the company has stated.

The 49 per cent stake will go to St. Ann Bauxite Limited, a joint venture between Century Aluminum Company and Noranda Aluminum Incorporated, both of the United States. The government of Jamaica maintains its 51 per cent stake in the company.


It will be business as usual for the most part, KJBC general manager Michael Muirhead told employees prior to the change in ownership. Mr. Muirhead will remain at the helm of the new entity and most employees have been offered new contracts under the same terms as their existing ones.

While initial changes would be minimal, Mr. Muirhead said more capital investments would be made by the new owners to make the entity more efficient and productive.

Kaiser started operations in St. Ann in 1967 but the parent company filed for bankruptcy protection in 2002 faced with a weak market and pending asbestos litigation. It had to sell off various assets to pay its debts and stabilise its finances.

Along with the sale of its KJBC stake, Kaiser has also sold its interests in the alumina refinery at Gramercy, Louisiana, for a combined total of US$23 million. Century and Noranda each paid half of the purchase price.

Agreement on the sale had been reached in July, but Canadian-based Alcan Aluminium on July 5, 2004 filed a motion with the U.S. Bankruptcy Court in Delaware for an order to stop Kaiser from completing the sale. Alcan claimed it has a patent on certain aspects of the technology used by Grammercy in the alumina refining process and objected to Kaiser selling the technology.

Kaiser Jamaica Bauxite Company produces about 4.5 million tons of bauxite annually and two-thirds of this is shipped to Grammercy for processing to alumina. The Gramercy refinery has the capacity to produce 1.25 million metric tons of alumina a year and Century and Noranda each purchase about 500,000 metric tons of this alumina a year for their aluminum plants.


Bauxite is converted into alumina during its refining process, and in turn alumina is the raw material from which aluminum is produced.

"This acquisition will represent a positive move for employees in the local industry, and Jamaica, because it strengthens the prospects of long-term operation of assets that generate significant local employment and foreign exchange earnings," said Norman DaCosta, vice-president and deputy island supervisor of the National Workers Union, with responsibility for the bauxite industry, when the prospective sale was announced in July.

Nalco, Orissa govt lock horns over mines

Financial Express, India Wednesday, October 06, 2004 at 0000 hours IST


BHUBANESWAR, OCT 5: National Aluminium Co Ltd (Nalco) and the Orissa government are engaged in a tug-of-war over two prized bauxite mines with total proven reserves of nearly 169 million tonne.

Nalco had applied for the Potangi and Kodingamali bauxite reserves way back in 1992. Both are near the current captive mines at Panchpatmali that feed its Damanjodi alumina plant.

After sitting on the issue for over a decade, the state government recently allotted only the Potangi mines to the central public sector major.

With global companies eyeing Orissa’s huge bauxite reserves, the government is now reluctant to hand over Kodingamali to Nalco. Kodingamali has 100m tonne and Potangi 69m tonne.

According to persons in the know, the state has hinted that Nalco should not stake its claim to Kodingamali if it wants the mining lease for Potangi.

Govern-ment officials admit that Nalco has first right to the mines, since it was the first applicant, and the government cannot lease out the reserves to any other party unless Nalco surrenders its claim. This is why Nalco is now being urged to renounce its claim.

In 1997, the state government had made an attempt to hand over the mines to Orissa Mining Corp (OMC). The government-owned corporation and Aditya Aluminium Co Ltd of the Aditya Birla group had signed a pact to set up an aluminium complex based on the reserves.

According to the pact signed in August 1997, Aditya Aluminium was supposed to set up a 1 million tonne refinery at Kansariguda in Koraput district. But the deal fell through when the Union government pointed out that Nalco had applied for the mines much earlier.

Panchpatmali is the largest bauxite mine in Orissa with over 200 million tonne in reserve. This is enough to feed Nalco for the next 35 years.

But, with Nalco having expanded the plant and planning another expansion, it needs an extra 1.5m tonne of bauxite a year.

In the first phase of the current expansion, Nalco has already expanded bauxite mining capacity to 48 lakh tonne per year, the refinery to 15.75 lakh tpa, smelter to 3.45 lakh tpa and captive power plant to 960mw.

It is now waiting for the Cabinet Committee on Economic Affairs (CCEA) to clear the second phase.

Hydro Complete Modernization of Aluminium Foil Plant 05 Oct 2004

Hydro has strengthened its leading position in the global market for premium aluminium foil following the successful modernization of one of its production facilities at the Rolled Products plant in Grevenbroich, Germany.

Hydro invested approximately EUR 35 million in the three-year-long project.

"As a preferred partner in particular to the packaging industry, we now are fit to meet the further growth of this industry," says sector president Svein Richard Brandtzaeg.

The modernized facility, known as the main line at the Grevenbroich plant, has doubled its productivity and therefore can compensate for the omission of several, technically outdated facilities built in the 1960s. The revamp has included several major innovations, including the world's first equipment of foil mills in three-phase AC drive technology as well as separators with servo-driven cutting tools.

Further, the rewinder for the doubling machine - for the first time - features a pinch roll with a double-acting diaphragm cylinder in order to control the tension at the rewinder.

The new rolling facility was inaugurated on October 3. "All those involved can be proud, because they mastered this large-scale project within the given time and cost, while maintaining operations without reducing our shipment volumes," says Hendrik Brenig, who heads the sector's Foil business unit.

Welsh Island Of Anglesey Looks For A New Power Plant

Yahoo News Friday October 8, 12:28 AM

LONDON (Dow Jones)--The local council on the Welsh island of Anglesey Thursday said it wants developers to submit proposals to build a new power plant on the island, adding only one firm has so far submitted a plan.

The council is anxious to get a new plant built by 2010 when British Nuclear Fuels PLC (BNF.YY) will shut the 1,060-megawatt Wylfa nuclear power plant. Wylfa is the sole power source for a large aluminum smelter on the island, a joint venture between the U.K.'s Rio Tinto PLC (RIO.LN) and Kaiser Aluminum Corp. (KLUCQ) of the U.S.

The council's Managing Director, Geraint Edwards, said the town is conducting a feasibility study to find a new power plant site, adding he hasn't discounted the possibility that BNFL will build a new nuclear plant on the island.

"The government has not closed the door on nuclear power so we still don't know what the story is with Wylfa," Edwards said.

He said only one company, privately-owned Canatxx Energy Ventures of the U.S., has submitted a proposal to build a power plant at Rhosgoch, an 190-acre site on the island.

But Canatxx's offer included too many conditions, so the council began to actively look for other companies to submit proposals, Edwards said.

"Canatxx is not in the front running, but they are in the frame," he said. "They put forward an offer that was so conditional, we're looking elsewhere."

Canatxx's U.K. Chief Executive Denis Volter said the company recently bought a separate site in Anglesey, called the Great Lakes Chemical works, where he hopes to build a 1,200-MW power plant and a 42.5 million cubic meter liquified natural gas terminal by 2008.

The company has not applied for permits for either project, but Volter said he plans to meet with the council to discuss a new plans to build a plant at Great Lakes in the next few weeks.

Company Web site:

-By Nina Sovich, Dow Jones Newswires; +44 (0)207-842-9353;

Global Alumina - The Next Generation Conference

PR Newswire (press release) 07 Oct 2004

TORONTO, Oct. 7 /PRNewswire/ -- Global Alumina Products Corporation ("Global Alumina") (TSX-V: GPC.U), a company that proposes to produce alumina for sale to the global aluminum industry, today announced that Bruce Wrobel, Global Alumina's Chairman and Chief Executive Officer and Michael Cella,

Global Alumina's Senior Vice President and Chief Financial Officer will present at Canaccord Capital's Base Metal Miners: The Next Generation Conference taking place Thursday, October 14th at Le Royal Meridien, King Edward Hotel in Toronto.

"We are honoured that Canaccord Capital has recognized the potential of what we believe is one of the best undeveloped deposits in the world," said Bruce Wrobel, Chairman and CEO of Global Alumina. "Global Alumina is aggressively moving forward towards commencing construction of its 2.8 million tonne per annum alumina refinery."

Canaccord Capital's Base Metal Miners: The Next Generation conference brings together companies pursuing significant growth opportunities in their respective metals. Each presenting company has the potential to play a significant role in global supply dynamics of their metal within the next decade.

Copper, Aluminum Rise to 9-Year Highs as Inventories Slump

Bloomberg, United States - Oct. 7

Copper and aluminum futures rose to nine-year highs in London on signs that growth in worldwide demand, led by China, will outpace production and drain inventories through next year.

Copper stocks in warehouses monitored by exchanges in London, New York and Shanghai have plummeted about 80 percent this year to 166,449 tons, about four days' global use. BHP Billiton and other miners have failed to keep up with demand, spurring hedge funds and other speculators to increase bets on rising prices.

``Strong demand and tight supplies have prompted these players to add to their long positions,'' Robin Bhar, an analyst at Standard Bank in London, said in an e-mailed report. Hedge funds, loosely regulated investment pools, account for about half of London Metal Exchange trading, Barclays Capital estimates.

Copper for delivery in three months rose as high as $3,065 a metric ton on the LME, $7 below the peak reached in January 1995. The metal, used in copper wiring and plumbing, traded up $21, or 0.7 percent, at $3,059 a ton at 8:29 a.m.

Copper inventories at LME warehouses have slipped 4.8 percent in the past two days to 95,350 tons. Aluminum stocks have slumped 52 percent this year to 683,125 tons as power shortages in China and a strike at a Canadian smelter owned by Alcoa Inc., the world's biggest producer, curbed supplies.

Aluminum traded up $14, or 0.8 percent, to $1,874 a ton. The metal, used to make beverage cans, car parts and window frames, earlier reached $1,874, the highest since April 1995.

Chinese Demand

Commodities prices have climbed the past two years because of demand from China, the world's biggest consumer of copper, aluminum, steel, iron ore and coal. China, the fastest-growing of the world's 20 largest economies, uses about 30 percent of the copper it imports to make power cables.

Production of copper may be 950,000 tons less than demand of 16.8 million tons this year, London-based Bloomsbury Minerals Economics Ltd. said this week, predicting the deficit may last until 2006. Chile's state-owned Codelco, Phelps Dodge Corp. and other copper producers are expanding mines to meet demand.

Copper miners operated at 93 percent of capacity in June, up from 89 percent in January, John Meyer, an analyst at Numis Corp. in London, said in an e-mailed note.

``This may not be sufficient to return the market to a supply demand balance next year,'' Meyer said. ``Producer inventories are also thought to be relatively low as miners and traders have already taken advantage of high price levels.''

Worldwide economic growth has spurred demand for metals used in construction and manufacturing. China's economy grew 9.7 percent in the first half. The U.S. economy, the world's largest, may have expanded 3.7 percent in the third quarter, according to economists surveyed by Bloomberg. Japan also is using more copper, and growth in Brazil, Argentina and Chile is curbing exports, Meyer said.

Aluminum Deficit

This year's aluminum deficit is forecast at 600,000 tons by Bloombsbury. Chinese aluminum producers closed as much as 630,000 tons of capacity this year and have idled more than twice that in new projects because of power shortages, the government said.

The Shanghai Futures Exchange, where copper and aluminum trade, was shut today for China's three-day national holiday. Copper for December closed Sept. 30 on the exchange at 29,180 yuan ($3,526) a ton. Aluminum was at 17,000 yuan a ton.

Other metals also rose on the LME. Hedge funds and other investors are buying metals, oil and other commodities search of better returns than they can get from stocks and bonds. The Standard and Poor's 500 index of U.S. companies has gained 2.7 percent this year. Copper has climbed 33 percent and crude oil in New York is up 62 percent.

Zinc, used to coat galvanized steel, climbed as much as $13, or 1.1 percent, to $1,166 a ton, a seven-month high. Nickel rose $320 to $16,300 and tin gained $100 to $9,150.

Lead, used in car batteries, rose $31, or 3.3 percent, to a record $980 a ton. It has soared 74 percent in the past year as auto sales increase.

To contact the reporter on this story:

Simon Casey in London at

To contact the editor responsible for this story:

Stephen Farr at

Will Alcoa Clear the Air?

Austin Chronicle, TX 07 Oct 2004


To hear the Alcoa Corporation tell it, air quality in Central Texas is heading for a win-win situation. Environmentalists aren't so sure.

Alcoa announced last week that it was shutting down three of the four coal-burning power plants it uses to fuel its enormous aluminum smelter in Rockdale (about 60 miles northeast of Austin), with hopes of leasing the plant sites to other companies that would then replace them with much cleaner facilities. Alcoa's Rockdale facility is the heaviest air polluter in the state, pumping out some 100,000 tons of toxic particulate matter annually. If the proposed new plants materialize, they would use new technology to reduce sulfur dioxide emissions by 95% and nitrogen oxide by 90%. They could also save some of the 110 jobs that will be lost when the old plants close, employment that is vital in the town of 5,600 people.

Environmental leaders aren't exactly jumping for joy, however. "The history of Alcoa here in Central Texas is they've gotten loophole after loophole after loophole to keep polluting from those old power units," said Travis Brown, spokesman for Neighbors for Neighbors, a Lee County group that unsuccessfully fought Alcoa's plans to strip-mine lignite coal there for the plants, which are in neighboring Milam County. "Because of that, we're skeptical that they might find some way to finagle another year or two to keep those plants open."

A lawsuit by Neighbors for Neighbors was the catalyst for last week's announcement – in January 2003, U.S. District Judge Sam Sparks found the Alcoa facility to be violating federal law, and told the company it could either retrofit the half-century-old plants with new pollution controls, replace the old plants, or shut them down entirely. Alcoa chose the second option, making its decision on the day of Sparks' imposed deadline.

"Everything we've heard is that it's extremely difficult for a power company to get the financing to build a new coal-fired power plant," said Brown, who is also the energy projects director for the Texas branch of Public Citizen, another environmental activist group. "Here's why we're skeptical: If they chose to just shut down those units, they had until the end of 2006 to do that. By deciding to pursue getting new units, their deadline for shutting those old units down is the end of August 2007. So we're skeptical that they're just trying to buy a little more time. And one reason is because Alcoa has steadily been moving its manufacturing operations out of the U.S., just like all industries." Brown noted that Alcoa is building new smelters in Iceland and Trinidad.

"We believe that we can complete this the way that we've chosen," replied Alcoa spokesman Jim Hodson. "We would not have chosen that option if we didn't think we could do it."

Hodson said that Alcoa is in negotiations with other companies to go in on the venture, but declined to specify which ones. Brown said that he'd heard discussions had been held with Dallas-based Genova Power.

Hodson said the proposed new plants would use Circulating Fluidized Bed technology, which he said is not easy to explain in layman's terms, but basically it recirculates ash back into the boiler, burning coal more efficiently. This is especially important at the Rockdale facility, which relies on the soft lignite coal strip-mined from the surrounding area, which produces even more air pollutants than other forms of coal.

Once in operation, the lessee of the new plants would presumably sell power to other customers, either privately or on the open market; the aluminum smelter would continue to operate mainly on power supplied by the remaining fourth plant, a newer, TXU-operated facility capable of supplying 80% of its power needs.

If the scheme works, it will please not only worried Rockdale residents but Austinites, as well – the Alcoa facility contributes to our air-quality problem as we border on nonattainment of federal ozone standards, though more of the region's problems are caused by automobile emissions. But, Brown says, seeing will be believing: "We have some sources telling us that [Genova] is having trouble getting backing. ... We don't think they'll get a deal."

Court Cautions on ALSCON

This Day, Nigeria 07 Oct 2004

From Lillian Okenwa in Abuja

Justice Stephen Adah of an Abuja Federal High Court yesterday urged persons and firms expressing interest in the purchase of Aluminium Smelter Company of Nigeria, Akwa Ibom State to do so with all cautions because of the dispute over the company.

Adah issued the warning at the resumed hearing of the suit filed against Bureau of Public Enterprises (BPE) by BFI Group.

Counsel to BFI Group, Chief Adeniyi Akintola (SAN), asked the court to make an interim order preserving the company in dispute pending the determination of the matter but he declined.

Instead of making an order, the trial Judge said "people are aware that the matter is pending in court."

BPE had earlier argued that the case against it was incompetent.

Mr. Rafiu Yusuf, who represented BPE, argued that the issues surrounding the botched sale of ALSCON were contentious and ought to have been commenced by a writ of summons as against the originating summons adopted by the plaintiff. Accordingly, BPE asked the court to strike it out.

Responding, Akintola noted that contractual disputes could be instituted in court by originating summons.

Justice Adah would on November 1 rule on the preliminary objection filed by BPE.

Following the collapse of negotiations, the US-based BFI Group, last month sought the help of the judiciary to compel Federal Government to conclude the sale of Aluminium Smelter Company of Nigeria Plc to it.

The group asked for an interlocutory injunction to restrain the Bureau from embarking on fresh privatisation exercise of ALSCON.

BFIG on July 9 lost its bid to take over the 77.5 per cent shares of government in the aluminium company at Ikot Abasi, due to its non-payment of the 10 per cent bid price (about $41 million) for the company.

Apart from losing the take over of government shares in ALSCON, BFI Group has lost $1 million (about N133 million) being the bid bond it submitted to Bureau of Public Enterprises for ALSCON.

The group had on June 14 emerged the winner of the bid for ALSCON with its bid price of $410 million but was given 15 bank-working days, which expired on midnight of July 8.

Hulamin 'vindicated' on dumping charges

Business Report, South AfricaOctober 7, 2004

By Margie Inggs

Durban - Hulett Aluminium (Hulamin) has won a partial victory against US aluminium giant Alcoa, which had accused it of selling into the US at prices that produced dumping margins exceeding 100 percent.

The local rolled products aluminium producer yesterday disclosed that the US department of commerce had concluded its nine-month investigation with a ruling that Hulett was selling series 6000 plate into the US at prices producing a 3.5 percent dumping margin. This means 3.5 percent less than would be charged by US firms.

Peter Staude, Hulamin's chairman and the chief executive of Tongaat-Hulett, which owns 50 percent of the company, said the finding vindicated its position that Alcoa's allegation of injurious dumping had no merit.

"However, we are also disappointed that the department of commerce has continued to apply its 'zeroing methodology'," Staude said. This excluded amounts charged by the defendant that were the same or higher than a local producer's, creating a false level on which the dumping margin was based.

"If the commerce department had not applied that methodology in this case, the level of dumping would have reduced to zero."

The World Trade Organisation (WTO) appellate ruled in August that the application of this methodology in anti-dumping investigations violated the US's WTO obligations.

Staude said the firm would challenge the commerce department on any anti-dumping duty order that might eventually be entered against imports from South Africa.

The dumping case has returned to the US International Trade Commission (ITC), which will assess whether the US aluminium rolling industry is suffering material injury as a result of the imports.

"Hulett Aluminium has previously stated, and continues to believe, that Alcoa's allegation of being materially injured by imports of such a narrowly defined range of 6000 series aluminium plate is outrageous."

The sector accounted for less than 1 percent of the US market for aluminium rolled products. The ITC is expected to issue its final decision on the issue next month.

Wenatchee union members approve contract with Alcoa

The Associated Press October 8, 2004 7:30 PM

WENATCHEE, Wash. - A contract that will restart the Wenatchee Works aluminum smelter and call 400 employees back to work has been approved by union members at the Alcoa plant here.

Jo Keyser, president of the Wenatchee Aluminum Trades Council, which represents five unions in the plant that has been idle since July 2001, confirmed that the tentative agreement reached last week had been accepted.

"It's been voted on. It's passed," Keyser said Friday. "We just want to go back to making aluminum. We hope Alcoa will honor this contract."

The contract calls for workers to pay 10 percent of their health care premiums and accept more health care costs.

Plant manager Bob Wilt said workers will begin reporting to work on Monday, but the plant won't begin producing aluminum again until January.

Union and Alcoa leaders are expected to sign the agreement sometime in the next couple of days to make it official, Wilt said.

"Obviously, we're very pleased for the employees and the community," Wilt said. "We said all along that we hoped the workers would have the right to vote. We hoped they would approve what we thought was a very fair package."

The vote came more than three years after Alcoa idled the smelter because of soaring electricity rates and falling aluminum prices.

The smelter's employees have remained on the payroll since the plant's shutdown in part because of an agreement with the Chelan County Public Utility District to market Alcoa's 23 percent share of unused power generated at Rocky Reach Dam on the Columbia River. Alcoa has received more than $76.7 million since the agreement took effect July 1, 2001.

Alcoa said in July it would close the plant unless it had a contract with employees and sent layoff notices to 402 employees, including 390 hourly and salaried workers.

The threat of layoffs, which were to have taken effect Oct. 1, prompted renewed negotiations between the Trades Council, the United Steelworkers of America and Alcoa.

The Trades Council is an umbrella group for the five unions at the smelter.

Wilt said restart of the plant's four aluminum-making pot lines will depend on when the smelter can receive the raw materials needed to produce aluminum.

"We tentatively placed orders earlier this week pending the outcome of the vote," Wilt said. "We're confirming those orders this morning. We're seeing if we can shorten lead times to facilitate a quicker restart."

Worker reaction was mixed.

"In my personal opinion, it's good," said Peter Korab, a 49-year-old pot tender with 30 years at Alcoa. "It's a benefit to the community and for the employees. The main thing is that people will be working again."

For six-year employee Salvador Bravo, 27, the vote was disappointing.

"I think it was a big mistake," said Bravo, who studied at Wenatchee Valley College the last three years to earn a degree and switch careers.

"We're giving the company more power, more control to decide our future," he said. "For me, there's no future there."

Information from: The Wenatchee World,

Alcan selling ores and concentrates trading division to management team

CBC News, Canada 11:48 PM EDT Oct 08 2004

MONTREAL (CP) - Aluminum giant Alcan Inc. has signed a deal to sell its ores and concentrates trading division to its current management team.

Financial terms of the deal, announced Friday, were not released. The deal includes the assets and commercial agreements of the copper, lead and zinc concentrate and secondary trading business, which was operated through Pechiney World Trade (USA), Inc. and Pechiney Trading Ltd.

The division was acquired last year in the takeover of Paris-based Pechiney Group. In September, Alcan announced that Novelis will be the new name of its rolled products division, which is to spun off as $6-billion-US business by year-end.

Alcan said the trading business will be operated by Ocean Partners Holdings Ltd., a private company set up by the division's current management.

"The ores and concentrates trading business is first rate; built and grown by the current management team over the past 12 years," said Geoffery Merszei, Alcan's executive vice-president and chief financial officer. "This is a great opportunity to ensure a smooth transition for this business."

Alcan (TSX:AL), is the world's second-largest aluminum producer by size, behind U.S. metals giant Alcoa. The Montreal company employs 88,000 people and has operations in 63 countries.

It has been restructuring its operations to focus on its aluminum smelting business. The Novelis spinoff and Friday's trading division sale are part of that strategy to focus on core operations.

Shares in the company fell 46 cents to close at $61.43 in Friday trading on the Toronto stock market.

© The Canadian Press, 2004

Xstrata narrows choices

Townsville Bulletin, Australia 09oct04

By Andrew Trounson

GLADSTONE in Queensland has emerged as the front-runner as the site for Anglo-Swiss miner Xstrata's proposed Albion zinc metal plant, with a decision on the project expected early next year.

The plant would treat ore from the former MIM zinc mine at McArthur River in the Northern Territory.

A decision to go ahead with the project is crucial to the long-term future of the mine. Without the Albion project and an associated expansion of the underground operation as an open pit, the isolated McArthur River mine faces shut-down within two years, with the loss of about 320 jobs.

About 900km southeast of Darwin, McArthur River produces a mixed zinc and lead concentrate that is exported to smelters from Bing Bong port 120km away on the Gulf of Carpentaria.

Xstrata wants to expand the mine to improve profitability, but the mixed concentrate is difficult for smelters to process and only in limited demand.

Before the Xstrata takeover in June 2003, MIM was studying the feasibility of constructing a metal plant on-site to produce zinc metal using the company's Albion processing technology, which produces metal without the need for smelting.

MIM had explored the possibility of taking gas from the Timor Sea to power the plant, but Xstrata is now looking at sites near existing power infrastructure with Gladstone shaping as the most likely destination. Concentrate from the mine would then be shipped to the plant.

This week's decision by the developers of the $US3 billion Papua New Guinea-to-Queensland gas pipeline to proceed with initial development spending may increase the attractiveness of Gladstone. Xstrata's Albion plant is a potential customer for the PNG pipeline.

A decision to build the metal plant in Gladstone would be a much-needed boost for the region, which has suffered a spate of industrial setbacks.

Last month, Aldoga put on hold its $2 billion Gladstone aluminium smelter project, while in July, Queensland Energy Resources decided to shut its shale oil plant with the loss of about 100 jobs. Last year the area was hit by the collapse of the $1.7 billion Australian Magnesium project.

Xstrata chief executive Mick Davis told The Weekend Australian there was a wide range of potential sites.

"For the Albion process to work it needs a sustained, long-term, relatively cheap power source," he said.

McArthur River was "a hopeless case" in its current configuration as an underground mine selling mixed concentrate. "But if we can find the right location, and size it correctly, we can convert McArthur River into a very attractive operation," he said.

A decision to either close the mine or go ahead with the open pit and build the Albion plant would be made by March.

At the time MIM was assessing the project, it was estimated to cost up to $500 million.

The size of any Albion plant will depend on its location and power costs. Scenarios under consideration include a plant producing 150,000 tonnes of zinc a year that could be scaled up to 300,000 tonnes, or a larger operation with a 450,000 tonne capacity.

Alcoa woes weigh on Alumina

Sydney Morning Herald (subscription), Australia October 9, 2004

By James Chessell and wires

Despite a solid third quarter for Alcoa, investors continue to worry that the world's biggest aluminium producer and its Melbourne partner, Alumina, are losing ground to competitors which are extracting higher contract prices for the metal.

The Pittsburgh-based Alcoa, which last month warned earnings would lag Wall Street expectations, said on Thursday that net profit for the quarter rose slightly as labour problems and the effect of Hurricane Ivan offset high aluminium prices.

Alcoa posted a $US283 million profit ($389 million) for the three-month period compared with $US280 million the previous year.

Analyst Lloyd O'Carroll of BB&T Capital Markets said the results were in line with lowered expectations. "Once the labour issues are resolved, the outlook is quite favourable," he said, noting that aluminium prices remained high.

But local analysts said this did not necessarily translate into good times for Alumina.

The Melbourne group, formerly part of WMC, is plugged into the China boom through its 40 per cent share of AWAC, a global alumina alliance with Alcoa.

"There still appears to be no sign of an increasing linkage between the alumina and aluminium prices, which potentially infers a degree of downside risk to some [Alumina] numbers in the market," Macquarie Equities noted.

"Although the Australian export stats continue to point to an industry-wide increase in the linkage, we suggest that [Alumina] is losing ground to their competitors - other Australian producers BHP Billiton, Rio Tinto and Alcan."

Analysts were concerned the presentation accompanying Alcoa's result indicated the US company expected no improvement in alumina prices in the fourth quarter.

In its earnings release, Alcoa said the third quarter was affected by a long-running strike at its Becancour, Quebec, smelter and costs associated with the impact of Hurricane Ivan on the Jamalco refinery in Jamaica.

Last month, Alcoa warned that results would fall short of Wall Street expectations because of plant shutdowns, restructuring costs and weakness in some markets.

Alcoa last month suspended operations at an alumina refinery in Jamaica in anticipation of Hurricane Ivan.

Balco to invest Rs 6,000 cr on modernisation

Times of India, India FRIDAY, OCTOBER 08, 2004 04:14:19 AM ]


KORBA: The joint sector Bharat Aluminium Company Limited (Balco) has kicked off a Rs 6,000 crore modernisation plan.

The company has started work on two smelter plants (the biggest in Asia having a length of 1 km each) and the work on the 540-MW power plant was going on.

The company has decided to generate about 900 MW of power from its captive power plants, which are being installed in collaboration with China.

Balco chairman Anil Aggarwal, who heads the Sterlite group of industries, met Chhattisgarh CM Raman Singh and promised development of the state in power and aluminium sector. He also assured establishment of the first aluminium park at Korba.

Kaiser pension bailout to hurt early retirees

Spokesman-Review October 9, 2004

Hundreds will lose enhanced pension payments

John Stucke, Staff writer

Hundreds of retired Steelworkers in Spokane are poised to lose thousands of dollars each as a federal agency takes control of the underfunded pension plans of bankrupt Kaiser Aluminum Corp.

Steelworkers who retired early from the old Mead smelter to draw an enhanced pension stand to lose their monthly supplemental pension payment. The federal agency, the Pension Benefit Guaranty Corp., also wants that group to pay back the monthly supplements they've collected since April.

Kaiser recently handed over its retirement obligations to the PBGC, which insures corporate pension plans.

For Steelworkers such as Terry Luding, the move erased hundreds of dollars from his monthly check.

Luding worked for 26 years at Mead, moving from the pot rooms where workers made molten metal to the other units of the vast smelter. After nearly two years of being locked out of the plant during a labor dispute, he was ready to return to work.

Kaiser, however, had other plans. The company sold its federal allotment of electricity during the power crisis of 2000-2001 and laid off most of its workers.

The company kept the smelter idled and by February 2002 filed for bankruptcy protection.

Luding worked odd jobs during the down time until he qualified for early retirement last spring. He was expecting to net about $800 a month from his basic pension plan, plus a $400 supplemental payment designed to help early retirees bridge the gap between their retirement dates and when they can begin collecting Social Security.

For months it seemed to be working well for Luding and perhaps as many as 500 other Steelworkers in the Spokane area in similar circumstances, said Steelworker Gary McKinney.

But their long-awaited good fortune ran out this week.

When the PBGC takes over a pension program, it disallows everything but the most basic payment. That means Luding and others like him will lose the $400-per-month early retirement bonus.

"It just really seems unfair," he said. "Why is it that the working guys are getting their pensions cut while executives … aren't?" Luding referred to generous retirement deals cut by Houston-based Kaiser's top executives when the company was faltering.

Even worse for the Steelworkers, the PBGC has declared that the $400 supplemental payments shouldn't have been made to Steelworkers since April.

This means the federal government wants its money – the equivalent of $2,000 per Steelworker who retired early – back.

PBGC spokesman Jeffrey Speicher said while unpopular, the agency is designed to insure only the most basic pension payments. It does not cover enhanced severance deals such as the $400 supplemental payment Steelworkers successfully bargained for with Kaiser.

For its part, the PBGC's bailout of Kaiser has been a $555 million disaster. The agency collected a mere $19 million in premiums from Kaiser since 1994 — thanks to a 13-year-old Congressional cap that now has the PBGC on the brink of failure unless it, too, is bailed out.

Speicher said the PBGC will be sending out notices, perhaps in early 2005, that will inform Steelworkers of their pension benefits and if they owe any money. If they do owe, Speicher said, the amount would be withheld from future pension checks and stretched over the life expectancy of each retired Steelworker to lessen the financial hit.

The entire episode frustrates Steelworkers, whose ranks have been decimated by Kaiser's bankruptcy. The Mead smelter has closed and been sold and the company has dropped its once-generous medical coverage for retirees, forcing them to find expensive individual insurance policies.

It has prompted Steelworkers to seek reforms, such as the protection of early retiree payments and medical insurance.

He said the PBGC has been seeking its own reforms, such as the ability to place liens on the assets of bankrupt companies that fail to meet pension plan promises.

Proposed Trinidad Alcoa Plant Expanding

Forbes Associated Press 10.10.2004, 01:23 PM

The production capacity of Alcoa Inc.'s proposed aluminum plant in Trinidad is being expanded by 29 percent, the prime minister said.

The plant will be Pittsburgh, Pennsylvania-based Alcoa's first aluminum smelter in the Caribbean. The company operates refineries in Jamaica and Suriname for alumina, the base material for aluminum.

The Trinidad plant was initially slated to have a capacity to produce 275,000 short tons (250,000 metric tons) annually, but Prime Minister Patrick Manning said the capacity was being expanded to 354,000 short tons (322,000 metric tons).

Independent power producers will bid for an up to 750-megawatt power plant to "supply the smelter and provide for normal increases in electricity demand," Manning said Friday during his 2005 budget speech that was published in newspapers at the weekend.

The smelter is expected to open by 2008, while the power plant will begin operation in 2007.

Alcoa Inc. will own 60 percent of the plant while Trinidad's government will own the remaining 40 percent. Manning said the aluminum smelter will source alumina from Jamaica and Suriname.

"This project has implications for the expansion of intra-Caribbean business activity as it is anticipated that it will generate trade in the order of US$200 million a year," Manning told Trinidad's Parliament.

The plant is expected to employ about 575 people, officials said.

The new plant is part of Trinidad's efforts to capitalize on its large natural gas reserves. Natural gas from Trinidad will fuel the power plant to be built for the aluminum smelter.

Trinidad and Tobago, a two-island nation of 1.3 million residents, is located in the southern Caribbean, about 10 miles (16 kilometers) off Venezuela's coast.

Aluminium conference on the way

Gulf Daily News, Bahrain 10-Oct-2004

MANAMA: The Advances in Production and Processing of Aluminium (APPA) 2nd international conference will be held in Bahrain from December 5 to 7 next year.

The event is being organised by the Bahrain University's College of Engineering and will be held at the Bahrain International Exhibition Centre (BIEC).

It is aimed at enhancing and promoting knowledge about recent advances and techniques in the production and processing of aluminium and is inviting experts, manufacturers, researchers and engineers to meet and exchange ideas about this industry.

The international gathering will provide a unique opportunity to disseminate recent research, technological development and long-term market dynamics regarding the aluminium industry.

Topics that will be covered in the event are classified into five broad groups which are as follows: production of aluminium, structure and properties of aluminium alloys, processing of aluminium, production planning and control and related issues.

The Aluminium Middle East 2005 international exhibition for advanced aluminium technology will coincide with the conference and will also be held at the BIEC.

For more information on the event, contact the conference secretariat on 17876114 or 17876624.

Gulf Extrusions develops new aluminium alloy

Al-Bawaba, Jordan October 10, 2004

Gulf Extrusions, the UAE-based leader in aluminium extrusion in the GCC region, has developed a new aluminium alloy that can sustain high quality surface finish at significantly high extrusions speeds. The new alloy can be used as raw material through extrusion processes accelerated to an amazing 133 per cent higher than normal production speeds.

While optimizing machine use for extruders, the alloy will ensure higher productivity without requiring higher investment in production equipment.

"For an extruder, it is always a challenging goal to improve machine output and achieve higher metal recovery. The development of the new alloy was a result of Gulf Extrusions investment into improved product quality, as

well as optimised extrusion processes," explained Robert Holtkamp, Director of Sales and Marketing, Gulf Extrusions. "That means, with the existing infrastructure Gulf Extrusions will now have significantly higher production capacities, without compromising in any way on the structural strength or surface quality of the extruded profiles."

The development of the alloy was the result of an experiment that was carried out by Gulf Extrusions, with the support of Dubai Aluminium Company Limited (Dubal), over a period of two years. The objective of the experiment was to examine and improve upon the output limitations of normal extrusion processes. It was noted that many factors influence machine output; with one of the most important being the speed at which the extrusion process takes place. The existing composition of the aluminium alloy 6063 (most

commonly used in extrusion processes) could support speeds of approximately 30 m/min (metres per min). At speeds higher than this, the extruded profile becomes prone to problems such as high temperature surface cracking (or

hot tearing), resulting in poor surface finish and lower over all quality.

During the experiment, Gulf Extrusions trialled 4 different aluminium alloy compositions, as well as improved die designs to facilitate higher m/min ratio, without affecting the surface finish. While die correction was carried out by rounding off edges to improve surface finish, the four alloys went through process tests as billets (raw material for extrusion); through the extrusion process; and through the anodizing process for achieving the final profile finish. (

Century/Noranda Bauxite Port in Jamaica Damaged;

No Interruption in Aluminum Production Expected

Business Wire (press release), CA - Oct. 11, 2004

Century Aluminum Company (NASDAQ:CENX) and Noranda, Inc., reported today that there has been a failure of bauxite loading equipment at their jointly-owned St. Ann port facility in Discovery Bay, Jamaica. The failure is interrupting bauxite shipments from St. Ann, and St. Ann is evaluating the damage to determine the duration of the interruption.

Bauxite from this facility supplies the alumina refinery in Gramercy, LA, that is also jointly owned by Century and Noranda. It also supplies bauxite to the Sherwin refinery in Corpus Christie, Texas. The Gramercy refinery supplies alumina to Century's Hawesville (KY) reduction plant and Noranda's New Madrid (MO) reduction facility. The facility also supplies chemical grade alumina to other customers.

Neither Century nor Noranda anticipate any interruption in aluminum production as a result of the equipment failure at St. Ann.

Century owns 615,000 metric tons per year (mtpy) of primary aluminum capacity. The company owns and operates a 244,000-mtpy plant at Hawesville, KY, a 170,000-mtpy plant at Ravenswood, WV and a 90,000-mtpy plant at Grundartangi, Iceland. Century also owns a 49.67-percent interest in a 222,000-mtpy reduction plant at Mt. Holly, SC. Alcoa Inc. owns the remainder and is the operating partner. Century's corporate offices are located in Monterey, CA.

Contacts Century Aluminum Company A. T. Posti, 831-642-9364

German co. signs $70-mln deal to upgrade Rusal's Yerevan foil mill

Interfax, Russia 11.10.2004 06:58:00 GMT

Yerevan. (Interfax) - Germany's Achenbach will start upgrading Russian aluminum giant Rusal's Armenal foil mill in Yerevan, Armenia, in the middle of October under a contract worth $70 million signed on Friday.

A spokesman for Armenal told Interfax that a consortium of German banks led by Bayerische Landesbank, the project's financial consultant, would lend $45 million and that Rusal would provide $25 million. German state insurer Hermes is insuring the credit.

The contract states that the upgrade must start in the middle of October and will take 18 months to complete. Armenal will achieve full capacity by the end of the period.

The upgrade will turn Armenal into a fully integrated foil mill with enhanced product range and increase profit margins. Capacity will rise to 25,000 tonnes of foil annually.

The first trial consignment of 150 tonnes of foil should be produced by the end of 2005.

Armenal said it was aiming for a 2.5%-share of the world aluminum foil market by 2008.

Siemens will partner Achenbach in the upgrade. Orders worth $10 million will be placed with local factories.

NALCO completes phase one smelter expansion

India, FL 10/11/2004 5:33:27 PM IST

National Aluminium Company Ltd. (NALCO) said on Monday that it has completed the first phase of an aluminium smelter expansion with the starting of the last pot.

All 240 pots under expansion in Phase I have been commissioned, the state-run aluminium major said, adding that with this, the total installed capacity of its smelter had been achieved at 720 pots.

With this expansion, the production capacity of NALCO's smelter at Angul in Orissa has gone up to 345,000 tons per year from 230,000 tons a year.

The company has submitted a US$1bn proposal with the Government to further raise its smelter capacity by 115,000 tons.

NALCO has also sought permission for increasing its alumina capacity to 2.1mn tons from 1.575mn tons, bauxite mining capacity to 6.3mn tons from 4.8mn tons and power generation capacity to 1,200 MW from 960 MW.

RusAl Borrows $800M

Moscow Times, Russia - 12 Oct 2004

LONDON (Bloomberg) -- Russian Aluminum signed an $800 million loan with 11 banks, the largest to date for a Russian metal company, as lenders boost the amount they provide to the nation's borrowers.

The transaction for RusAl, the country's biggest aluminum maker, brings the amount of loans raised by the country's borrowers this year to $7.8 billion. The loan was coordinated by BNP Paribas and Citigroup, the top two arrangers of loans to Russia this year, responsible for 9.8 percent and 8.1 percent of transactions, respectively.

The loan, backed by export contracts for the sales of aluminum and its alloys, will be used to retire older debts.


San Francisco Chronicle, CA Tuesday, October 12, 2004

As health care costs escalate, more companies raise premiums, trim coverage for former workers

Carolyn Said, Chronicle Staff Writer

Like his father before him, Evo Alexandre of Moraga worked most of his life for Kaiser Aluminum Corp. Alexandre, 72, took early retirement in 1986, in part because the company guaranteed his medical benefits for life.

But Kaiser Aluminum, once one of Oakland's premiere companies, fell on hard times. Two years ago, the company, now based in Texas, filed for bankruptcy and told salaried retirees like Alexandre that they would need to pay $130 per person per month to retain their benefits. On Jan. 1, it doubled the premium to $522 per couple per month. Two weeks later, the company asked a bankruptcy court to let it terminate medical benefits for all its retirees, salaried and nonsalaried alike, and it did so, effective May 31.

Alexandre is well aware of the irony of his situation: Kaiser Aluminum was founded by progressive industrialist Henry J. Kaiser, who also founded Kaiser Permanente, now the nation's largest nonprofit HMO.

"At the same time (Kaiser Permanente has grown), Kaiser Aluminum is reneging on its promises of medical benefits for its retirees -- retirees who devoted long careers to the company," he said. "Very sad ... but true."

Alexandre's situation is hardly unique. Beset with spiraling health care costs, an aging workforce and an economy that still has lots of slack, more companies are boosting the bottom line by paring health care benefits for their retired employees.

Full article can be read at

No selloff: Govt decides to expand Nalco

Times of India, India THURSDAY, OCTOBER 14, 2004 06:36:13 AM ]

NEW DELHI: The UPA government on Wednesday reportedly reversed the course of action contemplated by the previous NDA government on the aluminium giant Nalco, launching a Rs 4,091.51 crore expansion plan. This means the corporation would not be disinvested.

The expansion plan of the aluminium major was understood to have been approved by the Cabinet Committee on Economic Affairs (CCEA).

It will go a long way before making the public sector undertaking globally competitive, sources said.

The NDA government had delayed the expansion proposal because it was serious about disinvesting Nalco, sources said.

The UPA government's policy, they emphasised, was not to disinvest the profit-making PSUs. The completion of the second phase of the expansion will make Nalco's refinery capacity the sixth largest in the world. Nalco is already Asia's largest integrated aluminium complex.

Dispute resolved at Alcoa

Evansville Courier & Press (subscription), IN October 15, 2004

By TOM RAITHEL Courier & Press staff writer 464-7595 or

Alcoa said Thursday that it and the United Steelworkers of America have resolved their dispute over outside contractors, ending the threat of a strike at Alcoa Warrick Operations in Warrick County.

Kevin Lowrey, a spokesman for Alcoa's headquarters in Pittsburgh, Pa., said the company would not discuss the matter further until union leaders met with their members in the next few days to review the agreement.

In addition to Warrick Operations, the agreement covers three other plants where union representatives submitted five-day strike notices to the company in late July. The other Alcoa plants are located near Knoxville, Tenn., in Davenport, Iowa, and in Rockdale, Texas.

The five-day notice is required prior to a strike under the current five-year agreement between Alcoa and the United Steelworkers. It means there must be five days of negotiations before workers can strike. Those days of negotiation can be spread out over several months.

Negotiations over the dispute were held on the corporate level with some local assistance.

The issue concerned the use of outside contractors to do work that would otherwise be done by workers within the plant. Local 104 of the United Steelworkers, which represents about 1,700 workers at Alcoa Warrick Operations, listed 11 specific grievances in its five-day notice.

The work was primarily electrical, mechanical and facility maintenance at Warrick Operations.

Warrick Operations primarily makes aluminum for the tops and tabs of beverage cans.

It also makes aluminum for home-exterior products, Venetian blinds, food cans, pet food cans, aerosol cans, cleanser cans and bottle closures.

Canada Funds SUAL

Moscow Times, Russia 14 Oct 2004

MOSCOW (Reuters) -- Russia's second-largest aluminum producer, SUAL, will get a $20 million loan from Canada's export credit agency Export Development Canada to finance part of a $2.1 billion project in the Komi republic, SUAL said Thursday.

The EDC loan will be used to finance a feasibility study for alumina and aluminum plants, as well as basic engineering studies and services.

Russian Aluminium claims offshore status

Mineweb, South Africa'14-OCT-04 12:00' GMT © Mineweb 1997-2004

By: John Helmer

MOSCOW ( -- Responding to reports of a government investigation of its tax payments, Russian Aluminium (Rusal), Russia's largest aluminium producer and exporter, says that its offshore status legalizes the tax benefits it currently draws.

"The Russian government is well aware that Rusal is the only Russian metals company whose revenues do not primarily come from the mining of Russian ore," company spokesman Yevgenia Harrison said in a prepared statement. "To a very large extent, we are processors of imported raw materials. Thus a relatively large portion of Rusal's value added is created outside of the Russian Federaton."

Harrison was responding to a Tax Ministry report, commissioned by the Prime Ministry, and delivered on September 6. A spokesman for the prime ministry said the report is being studied. In the report, tax payment rates of several several major metals companies were disclosed and analyzed. Rusal, which is controlled by Oleg Deripaska, and does not publicly disclose detailed financial data, was reported to have paid tax amounting to just 2% of revenues. This was well below comparable rates reported by the Tax Ministry for the other metal exporting companies examined, and even further behind the rates disclosed by Russian oil exporters.

According to the Tax Ministry report, Rusal was able to lower its tax rate by the use of tolling contracts, and by a regional tax relief scheme for corporate affiliates registered in the fareastern region of Chukotka. Rusal's revenues in 2003 are reported to have been $4.5 billion.

Harrison has so far failed to respond to questions about the Chukotka scheme, which was uncovered by the independent state auditor, the Accounting Chamber, in a report that was forwarded in May to the tax authorities.

Specifically, the questions posed by Mineweb in hopes of clarifying many of the issues surrounding Rusal are similar to those exercising the minds of the Russian tax authorities: What proportion of Rusal's exports were made under tolling contracts in 2003, and H1 2004? How do you explain the 65% increase in the volume of Russian exports of aluminium in 1Q 2004, reported by Russian Customs, although smelter production in that period is reported to have risen by less than 5%? And what would you estimate to be the proportion of Rusal's value added that occurs outside the Russian Federation?

If a reponse is received from Rusal or from its spokesperson, Mineweb will report it.

Regarding the latest Tax Ministry report, Harrison said that Rusal is not under official investigation. "To dramatise what is a routine governmental report into an article that insinuates that Rusal has acted somehow improperly is misleading and damaging to the company's corporate reputation; a reputation that we are working hard to develop as the company, and indeed Russia, moves forward. "

Her disclosure that, for Russian tax purposes, Rusal is now predominantly a foreign company enlarges on a strategy statement issued in May by Rusal CEO Alexander Bulygin. Reported on the company website to explain why Rusal was offering to sell its aluminium-rolling plants in Russia to Alcoa of the US, Bulygin said: "This transaction arises from Rusal's strategy to focus on its strengths upstream, as a leading producer of primary aluminum and alloys. While we saw much promise in these two plants, we felt that to truly prosper they needed to be part of a company with a strong international downstream customer base." Approval for the deal, which was anticipated in June, has so far not been granted by the Kremlin.

At the same time, Rusal has said it is proposing to build alumina and aluminium complexes around the world. Rusal officials have said they are bidding at sites that include Nigeria, the Congo, Australia, and Venezuela. Individual project costs have been estimated up to $1 billion. No project financing strategy has been disclosed, because the projects have yet to be finalized.

Inside Russia, Rusal has withdrawn from negotiations to partner Siberian Ural Aluminum (SUAL) in a proposed new metal production complex in the northwestern republic of Komi. It has also refused to proceed with a new aluminium smelter in the Ukraine, which was promised in 2000, when Rusal acquired the state shareholding in a crucial raw material supplier, the Nikolaev alumina refinery.

Rusal has been able to expatriate its earnings and shield them from tax by heavy reliance on tolling, according to a leading Moscow industry source. Rusal's tolling schemes provide alumina, as the property of an offshore company, to processing into aluminium by Rusal's smelters. They do not own the aluminium, and must return it to its designated offshore owner, when they receive in payment a fee for processing. This does not incur domestic value-added tax.

The profitability of aluminium exports for the offshore tolling contractor can be gauged from the large margin of difference between the price Rusal declares at Russian Customs for aluminium, as it leaves the country, and the price at which the same metal is declared at US Customs, when imported to the United States. The average price in the first half of 2004 for Russian alumium imported to the US was $1,685 per metric ton. The average price of Russian aluminium exported from Russia in the same period was $1,262, a gap of $423 per ton. According to the US trade data, the US imported 524,455 tons in the period to July 31 of this year, mostly from Rusal. The price gap is roughly equal to $222 million.

Harrison claims that tolling is legal in Russia. "There was a debate about tolling in Russia; today the situation is that, with some amendments, it has been decided that tolling remains in the national interest."

A year ago, the government and members of parliament attempted to legislate an end to tolling, and offered to offset the tax increases to the exporters by eliminating the 5% export duty on the metal. But officials could not resolve differences in the interpretation of different laws, including the new customs code, which came into force on January 1.

According to a spokesman for Yury Vasiliev, who currently heads the State Duma tax subcommittee, "Since January, 1, 2004, tolling has been officially buried by the coming into force of the new Customs code which has cancelled this preferential mode of the taxation. However, before implementation of the new code, the Ministry of Taxes unexpectedly dispatched a letter in which it is still allowed to [preserve] tolling operations. The letter is based on the legal collision which has arisen in connection with acceptance of the new Customs code." The conflict between the customs code and the tax code is still unresolved, he added.

Other ministry officials admit the loophole must be resolved by new legislation. According to a Moscow banker, "I can't say anything about the national interest of tolling, or comment on governmental decisions and laws. But I am reluctant to think that such giant as Rusal would go straight against the law. So they found a loophole in the legal decisions after January 1."

According to spokesman Harrison, "Rusal complies with all applicable legal and tax requirements, securing the appropriate governmental tolling licences on each and every transaction...the Russian government reports aluminium exports in two ways, at total market price and based on tolling value (ie, the value-added in Russia), which can add to the confusion about interpretation of data."

International legal experts interpret the confusion as creating a potentially massive tax liability for Russian metal exporters. To date, Rusal has not submitted financial and trading statements to foreign regulatory authorities. But early this month, Mechel, a Russian steelmaker, did. The filing in Washington sets a new international legal standard for disclosure by Russian metals companies of its trading and tax schemes, and of its potential liabilities under Russian law.

In the first-ever listing of a Russian metals company for a US share issue under regulation by the US Securities and Exchange Commission (SEC), the Russian steel, iron-ore and coal exporter Mechel admitted, through its US legal representatives, that Russian pricing schemes for international trade may be challenged by the Russian tax authorities, and lead to potentially large backtax claims.

Tax evasion in Russia is "widespread", the Mechel filing acknowledges, but enforcement of the tax rules is "selective". Russian transfer pricing rules, the company concedes, empower the tax authorities to impose additional tax on companies when transfer pricing bewteen related entities, or in foreign trade transactions, is found to differ from market pricing by more than 20 percent. The rules, according to Mechel, "are vaguely drafted, leaving wide scope for interpretation by Russian tax authorities." Acknowledging the risk of a challenge, the prospectus says that "if such price adjustments are upheld by the Russian courts and implemented, our future financial results could be adversely affected. In addition, we could face significant losses associated with the assessed amount of prior tax under-paid and related interest and penalties." Mechel's financial statements indicate that in the first half of 2004 its tax payment rate was 4.5%; in 2003 it was 2.3%.

According to an international banker, "if you cut and pasted those admissions into a corporate application for a loan, most bank credit committees would find it difficult to agree to lend."

Kaiser Aluminum Reaches Pension Settlement with PBGC

Business Wire (press release), CA -October 15, 2004 11:50 AM US Eastern Timezone

HOUSTON--(BUSINESS WIRE)--Oct. 15, 2004--Kaiser Aluminum has executed a settlement agreement with the Pension Benefit Guaranty Corporation (PBGC).

The company and the PBGC have agreed, among other things, that:

-- Kaiser will continue to sponsor specified pension plans for hourly employees at plants in Los Angeles, Calif.; Tulsa, Okla.; Sherman, Texas; and Bellwood, Va., and will satisfy the estimated $4.4 million minimum funding standard for these plans;

-- The PBGC will have an allowed post-petition administrative claim of $14 million, which is expected to be paid upon the consummation of a plan of reorganization for the company or the consummation of a plan for its subsidiary, Kaiser Alumina Australia Corporation, whichever comes first;

-- The PBGC will have allowed pre-petition unsecured claims in respect of the three Kaiser-sponsored pension plans that were terminated in the amount of $616 million, which will be resolved in plans of reorganization;

-- In respect of its total pre-petition unsecured claims, PBGC's cash recovery from proceeds of Kaiser's sale of its interests in the Alpart alumina refinery in Jamaica and the QAL alumina refinery in Australia will be limited to 32% of the net proceeds distributable to holders of the company's Senior Notes, Senior Subordinated Notes, and the PBGC.

The agreement is subject to approval by the U.S. Bankruptcy Court for the District of Delaware. The company expects shortly to file a motion with the Court seeking approval of the agreement.

Kaiser's Form 10-Q for the second quarter of 2004 contains additional information related to pension matters.

Kaiser Aluminum (OTCBB:KLUCQ) is a leading producer of fabricated aluminum products and owns interests in alumina and primary aluminum assets.

Company press releases may contain statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The company cautions that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may vary materially from those expressed or implied in the forward-looking statements as a result of various factors.

Contacts Kaiser Aluminum, Houston Scott Lamb, 713-332-4751

Global Alumina Signs Definitive Concession Agreement With Republic ...

PR Newswire (press release) Monday October 18, 9:15 am ET

BOKE, Guinea, Oct. 18 /PRNewswire-FirstCall/ -- Global Alumina (TSX-V: GPC.U - News), a company that proposes to produce alumina for sale to the global aluminium industry, announces that the Republic of Guinea and Global Alumina signed an investment and concession agreement for the development and construction of a 2.8 million tonne per annum alumina refinery in Conakry, Guinea.

"Global Alumina's refinery and associated railroad and port infrastructure upgrades will greatly enhance the Republic of Guinea's economic development, create employment opportunities and make optimum use of its large bauxite reserve," stated Dr. Alpha Mady Soumah, Minister of Mines and Geology. "Global Alumina has been a model partner throughout this process and we will continue to co-operate with Global Alumina in every aspect as its alumina refinery proceeds to construction."

Highlights of the agreement include:

* An initial term of 99 years for the management and operation of the refinery, subject to renewal upon agreement of the parties; * Exclusive mining concession with inferred bauxite resources greater than the refinery's expected requirements over the 99 year initial term for the refinery and its anticipated expansions. The mining concession

has an initial term of 25 years with an automatic extension of 25 years, plus continuous 10 year renewals upon delivery by Global Alumina of a maintenance plan;

* Access to, and use of, existing infrastructure, including railway and port, and the right to upgrade infrastructure; * Multi-year tax holiday and import duty and customs relief; * Well-defined royalty to the Republic of Guinea; * All land necessary for the implementation of the project will be made available by the Republic of Guinea at no cost to Global Alumina; * The Republic of Guinea guarantees the right to exchange and transfer currency;

"Signing the investment and concession agreement is a significant milestone for Global Alumina and the economic development of the Republic of Guinea and the welfare of its people," said Bruce Wrobel, Chairman and Chief Executive Officer of Global Alumina. "We are now aggressively pushing forward on commencing construction of the refinery's supporting infrastructure, and looking forward to commencing construction of the refinery in the middle of 2005."

The investment and concession agreement will come into effect upon ratification by the Guinean National Assembly and promulgation by the President of the Republic of a law adopting the agreement. Completion of this process is expected within 90 days.

RUSAL targets at Tadjikistan`s projects worth over $1.3 bln.

Gateway 2 Russia, Russia 18 Oct 2004

OAO Russian Aluminium (RUSAL) plans to implement a number of projects in Tadjikistan for a total worth of over $1.3 bln, RUSAL said referring to Tadjikistan President Emomaly Rakhmonov but denying to provide the respective information independently.

According to E. Rakhmonov, RUSAL will take part in the project to complete construction of Rogunskaya GES and invest $560 mln to the effect.

Besides, RUSAL will invest $600 mln to construct a new aluminium works with the capacity of 200,000 tons. RUSAL will build two electrolyze shops with the capacity of 100,000 tons, and invest $160 mln in the project.

The respective agreement was reached over the meeting of Russia's President Vladimir Putin and Tadjikistan President Emomaly Rakhmonov. The cooperation agreement between Tadjikistan's government and RUSAL was sealed on Saturday, Oct. 16.

Russia’s Largest Hydro Power Plant Won’t Be De-Privatized

MosNews 19.10.2004 12:47 MSK (GMT +3),

Russia’s Highest Arbitration Court satisfied a claim by the country’s power grid monopoly Unified Energy System and ruled against the de-privatization of the country’s largest Sayano-Shushenskaya hydroelectric plant on Tuesday, Oct. 19.

This means that the attempts by the regional authorities of the Siberian Republic of Khakassia, backed by Russia’s largest aluminium producer RusAl, to take control of the hydroelectric plant and to keep buying electricity at low internal prices have failed.

The conflict between the regional authorities and the management of the power monopoly began in 2003. As MosNews reported earlier this year, when Sayano-Shushenskaya HPP was privatized in 1993, the government of Khakassia did not become a shareholder of the company, receiving the right to buy energy for internal use in the republic at a minimal price instead.

75 percent of the energy in the republic is consumed by the Sayani aluminium plant which is controlled by the Russian Aluminium company, 75 percent of which is owned by business tycoon Oleg Deripaska. The discount deal was due to expire in 2004, but the republic’s officials, nagged by RusAl, decided to fight for their cheap energy.

In 2003 the governor of Khakassia Alexei Lebed filed a suit, claiming that the power plants privatization was conducted with violations and should therefore be considered illegal. In March 2003 the East Siberian Arbitration Court satisfied the governor’s claim and began the procedure of de-privatization. The chairman of the power monopoly, Anatoly Chubais, brought the conflict to the attention of the public, decrying the start of de-privatization and promising to challenge the court’s decision in the Higher Arbitration Court.

Simultaneously, UES shareholders agreed with Chubais’ suggestion to re-register the hydro plant in the Krasnoyarsk region, thus removing it from Khakassia’s jurisdiction altogether. Such a move was made possible by the fact that the power plant is located right on the border between the two regions.

Worried that they may lose altogether, the Khakassian authorities offered to settle the dispute out of court. A peaceful agreement, according to which the regional government was to take back its de-privatization claims, and Unified Energy System would change its mind about registering the power plant in the neighboring region, was discussed, but never signed.

Now the fate of the conflict has been decided by the Highest Arbitration Court of Russia which ruled in favor of the power monopoly.

Guinea: Japanese-Backed Company Signs Deal to Build $2 Billion Alumina Plant

UN Integrated Regional Information Networks, Africa October 20, 2004


A Japanese-backed company has signed a definitive agreement with the government of Guinea to build a US$ 2 billion alumina refinery in the northwestern mining town of Sangaredi, next to the biggest bauxite mining complex in the world.

If the planned refinery is actually built, it will be the largest foreign investment project undertaken in West Africa since a consortium of international oil companies led by ExxonMobil invested US$3.7 billion to develop the oilfields of southern Chad. Chad began to export oil via a pipeline to the coast of Cameroon last year.

The agreement between the Global Alumina Production Corporation (GAPCO), a company backed by Japan's Marubeni and Mitsubishi industrial conglomerates, and the Guinean government provides for the construction of a refinery that will produce 2.8 million tonnes of alumina a year for export, GAPCO said in a statement on Monday.

Construction work is due to begin towards the middle of next year and the refinery, to be built 200 km north of the capital Conakry, is scheduled to produce its first alumina for export in 2008.

Guinea is one of the world's largest producers of bauxite, an ore which is refined into alumina, a fine white metallic powder, and then smelted to become aluminium.

The West African country contains one third of the world's recoverable bauxite reserves. Bauxite is Guinea's main export and largest source of foreign exchange.

The country's bauxite mines are owned and operated by three of the world's largest aluminium companies, Alcoa of the United States, Alcan of Canada and Rusal of Russia.

Investment goes ahead despite political uncertainty

Industry sources said the arrival of GAPCO on the scene marked an attempt by Japanese aluminium producers to claim a slice of the market.

However, the Canadian-listed company has emerged as a major investor at a time of increasing international concern about the stability of Guinea's government.

Diplomats in West Africa are concerned at the poor health of President Lansana Conte, who has ruled Guinea with an iron hand for the past 20 years, and the steady deterioration of the country's economy.

A rapid rise in the price of rice, the staple food of Guinea's eight million people, triggered riots in the capital Conakry earlier this year and ethnic tensions run high in the densely forested southeast of the country.

The International Monetary Fund and World Bank have suspended aid to Guinea and the European Union is withholding large sums of aid money until the government implements democratic reforms and clamps down on corruption.

Diplomats have long warned that Guinea could easily fall prey to the sort of conflicts that have already brought suffering and misery to neighbouring Sierra Leone, Liberia and Cote d'Ivoire.

However GAPCO's Chief Financial Officer, Michael Cella, dismissed such worries as groundless.

"I regard the government of Guinea as really extremely stable for the region, having had only two leaders in 40 years," he told IRIN by telephone from New York.

Cella said GAPCO planned to raise $600 million in equity capital for the refinery project through a share issue in the second quarter of 2005. The remaining $1.4 billion of finance would come from export guarantee agencies, such as the US Overseas Private Investment Corporation (OPIC) supplier credits and loans from multilateral lending agencies, he added.

Cella said GAPCO had already held preliminary discussions with the World Bank, the European Investment Bank and the African Development Bank about providing finance for the project.

GAPCO is headed by Bruce Wrobel, a US entrepreneur and venture capitalist, who made his fortune by building and operating power plants in the United States and various other countries around the world. Marubeni acquired his original company, Sithe Energies, in 1996 and Wrobel has retained a close association with the Japanese conglomerate since then.

Founded in the British Virgin Islands in 1999, GAPCO raised $50 million in a private placing in Canada in February this year and listed on the TSX Venture Exchange for small high risk companies in Toronto in May.

Japan will take nearly half the alumina output

Cella said Marubeni would have the right to buy at least 20 percent of GAPCO's alumina production and had an option to acquire up to 20 percent of the company's shares.

Mitsubishi would have the right to buy at least 25 percent of the refinery's output and had an option to buy up to 25 percent of GAPCO's equity.

The Japanese industrial groups have each appointed a director to GAPCO's board.

GAPCO's other strategic partners are Karim Karjian and Safwat A Safwat, two Lebanese businessmen with close links to the Guinean government, who are also directors.

These two men helped the government of Guinea sell the country's 700,000 tonnes per year alumina refinery at Friguia to Rusal in 1997. But they subsequently fell out with the Russian aluminium giant, which tried unsuccessfully to sue them in a UK court last year.

According to recent reports in the Russian media, Rusal has now shelved plans to invest further in alumina production in Guinea and is studying the construction of an alumina refinery in Congo instead.

However, Guinea's bauxite deposits remain of strategic interest to the US government, which gave GAPCO $507,000 in 2002 to conduct a feasibility study of the alumina plant in Sangaredi.

According to GAPCO, Guinea presently provides half of all the bauxite imported by the United States and Canada.

The Sangaredi refinery will be situated next to Guinea's largest complex of bauxite mines, which is operated by the Compagnie des Bauxites de Guinee (CBG). Its open cast mines produce between 12 and 14 million tonnes of ore per year and constitute the biggest bauxite mining complex in the world.

Despite the high political risks of investing in Guinea, the financial rewards are potentially huge.

GAPCO noted at the time of the February placing that the world price for alumina had soared from US$180 per tonne to over $500 over the preceding 24 months as a result of steadily increasing demand from China and a general upturn in the world economy.

The spot price of aluminium on the London Metal Exchange has risen 14 percent so far this year to US$1,810 per tonne in response to rising demand for the metal.

Supplies of bauxite guaranteed

GAPCO said in its May submission to the TSX Venture Exchange that the Guinean government had undertaken to guarantee supplies of bauxite for the Sengaredi refinery from the CBG mines, in which it owns a 49 percent stake.

Most of the remaining shares in CBG are owned by Alcan of Canada and the US aluminium giant Alcoa, which has operational control of the mining company.

These two North American producers signed a memorandum of understanding with the Guinean government in May to build their own 1.5 million tonnes per year alumina refinery in the same area.

GAPCO made clear that its own factory would compete with this plant, were it to be built.

The Japanese-backed company said the estimated $2 billion cost of building its own alumina refinery would include the construction of a 130 megawatt power station, fuelled by coal imported from South Africa, and the construction of a 43-metre high dam to provide water.

It would also cover the cost of upgrading the 130 km railway from Sengaredi to the port of Kamar and enlarging port facilities at Kamar to handle the large imports of coal, limestone, fuel and sulphuric acid required by the alumina refinery.

GAPCO said it would also build a completely new town to house the 1,000-strong workforce of the refinery, whose production capacity could be raised to 4.2 million tonnes per year in due course.

The company signed an agreement with the US engineering giant Honeywell last July to design and build the plant

Cella said work on expanding the port at Kamar would begin "within weeks."

He declined to reveal how much revenue the Guinean government would derive from the new alumina refinery, but an industry source familiar with the project predicted that Conakry would earn "tens of millions of dollars per year" in royalties during the early years of production, during which GAPCO would enjoy a tax holiday.

Cella said GAPCO planned to build further alumina refineries in Guinea in due course

SUAL Boosts Output on High Prices

Moscow Times, Russia Thursday, October 21, 2004. Page 7.

By Samantha Shields

Bloomberg SUAL, the aluminum maker that is seeking $2.1 billion for a new refinery and smelter, increased output of all its products this year as aluminum prices gained as much as 20 percent.

SUAL produces two-thirds of the country's bauxite and a quarter of its aluminum. The company's aluminum output of about 890,000 tons per year trails only Russian Aluminum domestically and ranks SUAL seventh in the industry worldwide.

Nine-month aluminum production rose 4.1 percent to 690,800 tons, the company said in a statement. Alumina output rose 1.8 percent to 1.55 million tons and bauxite production jumped 15 percent to 3.79 million tons. Silicon production rose 12 percent to 42,600 tons.

SUAL is trying to raise $2.1 billion to build a refinery and smelter at its bauxite mine in the Komi republic. The project would let the company increase aluminum output by almost 60 percent, ease Russia's shortage of the raw material alumina and more than double SUAL's annual bauxite output to 9.93 million tons by 2010.

SUAL said in August it would borrow $150 million to help finance Komi. The European Bank for Reconstruction and Development and the International Finance Corporation, the World Bank's private financing arm, are each lending $45 million. The rest is being organized by Barclays, BNP Paribas, ING, Societe Generale and Standard Bank London.

SUAL in March said it might sell shares or debt to finance the project.

SUAL will close its London office before the end of the year to concentrate staff in Moscow.

President Brian Gilbertson said he wanted his staff near him in Moscow, said Maxim Titov, a SUAL spokesman, confirming a report in the Financial Times.

Gilbertson, formerly chairman of Vedanta Resources, was appointed president of SUAL in August. A former chief executive officer of BHP Billiton, he quit Vedanta in July after guiding the company through an initial share sale that raised ?507 million ($925 million).

Billionaire Viktor Vekselberg, who controls SUAL through Renova holding company, said in April the aluminum group may sell shares to the public.

Gilbertson said SUAL could double production by developing all of its existing internal projects. He said the company would then be well placed to look for international bauxite and alumina projects and even other commodities. Russia is the world's second-biggest producer of primary aluminum, behind China.

Update 2: Alcoa Restructures Key Management

Centre Daily Times, PA 10.20.2004, 05:05 PM

Alcoa Inc. has completed a substantial restructuring within its corporate ranks, placing key executives atop four new divisions organized by industry rather than geographic region, the company announced Wednesday.

The world's largest aluminum producer has aggressively pursued expansion in international markets while seeking to cut costs. Analysts say that the restructuring appears to be the next step in that direction.

Bernt Reitan, formerly head of the primary products division, is now group president for the new global primary business, serving the aluminum and alumina markets.

The other three newly named group presidents will head the divisions of global extruded products, mill products (North American and European markets), and packaging. The packaging group, with major operations in the United States and Australia, will be combined with Alcoa's Asia operations and the global industrial foil business.

"Globalization continues to transform the way our business operates," said Alain Belda, chairman and chief operating officer. "Today's changes will help us be more agile in swift-moving markets and allow us to better leverage our global manufacturing capability."

Belda said the restructuring greatly simplifies Alcoa's corporate structure and it will reduce costs.

Corporate structure at Alcoa has not been a big topic of discussion on Wall Street and analysts said it was not immediately clear what effect the changes will have.

Alcoa is in the midst of expansion projects in Iceland and Brazil and is also seeking to acquire facilities in Russia.

"While I wouldn't call the company's divisions fiefdoms, but control clearly ran down lines of European, Australian, and domestic," said Charles Bradford of Bradford Research/Soleil Securities in New York. "This is a company that has a goal of reducing costs by $1.2 billion by the end of 2006, so this could be part of that.

Helmut Wieser will lead the mill products group; Mario Longhi will head the global extruded and end products group; and Joe Muscari is group president for the rigid packaging, foil and Asia group.

Bill Christopher will continue to lead Alcoa's aerospace, automotive and commercial transportation group. Paul Thomas, formerly head of North American fabricated products, will now serve in a new position of executive vice president for people and culture.

Alcoa shares closed down 4 cents at $31.26 Wednesday on the New York Stock Exchange.

Russia's RusAl to complete 1st stage of Tajikistan plant by 2010, Russia 20 October 2004 14:56

Russia's largest aluminum producer Russian Aluminum (RusAl) plans to complete the construction of the first stage of its new aluminum plant in Tajikistan by the end of 2010, while the second stage is to be completed by the end of 2013, a company official told Prime-Tass on Tuesday.

According to the official, each stage of the plant will have a production capacity of 100 tonnes of aluminum annually.

The official said that the decision as to where to locate the new plant will depend on the results of a feasibility study that is to be completed in 2005.

According to the official, the total investment in the plant's construction will amount to U.S. $600 million.

The official said that RusAl also plans to invest $150 million in the construction of two electrolysis units in the Tajikistan state-controlled aluminum plant. The total capacity of the two units will amount to 100,000 tonnes per year, the official said. He did not disclose the details of cooperation of RusAl with the Tajikistan state-controlled aluminum plant.

To finance the construction, RusAl plans to use its own funds, as well as funds raised from foreign and Russian banks, the official said.

Chinese firms investing in overseas mines

China Business Weekly, China 2004-10-19 07:31

HONG KONG: China has increased investments in overseas mining projects for base metals in recent years, to meet its large and rising demand for raw materials.

The Chinese Government has encouraged large firms to extend their businesses abroad, and has implemented preferential policies to facilitate their overseas investments, industry sources said.

Numerous key projects have been finalized or are under negotiation.

For bauxite and alumina, State-owned Chalco and Companhia Vale do Rio Doce signed a framework agreement last May to build an alumina refinery in Brazil.

The first phase of the refinery will see 1.8 million tons of capacity due in 2007, at a cost of US$1 billion. Final capacity is projected at 7.2 million tons.

The government of Queensland said in mid-July that China will bid on the Aurukun bauxite deposit in the Australian state.

China's Foreign Engineering and Construction Co has agreed to an A$770-million (US$567.03-million) export-credit facility with Australia-based Aldoga Aluminium Smelter Pty Ltd.

China Nonferrous Metal Mining & Construction (Group) is expected to complete a study by next month on investment needed to develop a bauxite deposit and build an alumina refinery in Dac Long in central Viet Nam.

Startup is expected in 2009, and initial capacity is expected to be 2 million tons.

Sichuan Aostar Aluminium Co Ltd, a unit of Sichuan Electric Power Corp, one of China's major aluminium producers, has tied up with Ashapura Minechen to bid for a project to build a 500,000-ton alumina refinery in India's Gujarat state.

Copper is another metal resource Chinese firms plan to explore overseas.

Jiangxi Copper in June signed a letter of intent with Ivanhoe to study the possibility of taking a stake in Canadian mining promoter Oyu Tolgoi's copper-gold project in Mongolia.

Jiangxi Copper said in May it and other smelters in China United Copper Co Ltd could take a stake in the to-be-expanded capacity of Saindak copper mine in Pakistan.

China's MCC Resources Development Co (Pvt) Ltd has a lease until 2012 to mine copper.

MCC, which restarted production at the mine in August 2003 after several years of closure, will make 13,000 tons of blister this year.

Codelco and China's Minmetals are negotiating a possible joint venture to develop new deposits in Chile.

China has expressed an interest in acquiring a stake in Codelco's Gaby copper deposit, which will take about US$500 million to build.

Zhuzhou Smelter was negotiating with a Pakistan-based company to jointly develop a zinc mine in the southern Asian country, a board official for its listed arm, Zhuye Torch Metals, said.

China Nonferrous Metal Mining Construction (Group) in May said it expected to start operations at the Tumurtin-Obo zinc mine, in southeastern Mongolia, in 2006.

The firm expects to produce 300,000 tons of zinc concentrate annually for Chinese smelters - including Huludao Nonferrous and Baiyin Nonferrous.

China Nonferrous and the Mongolian Government, which is investing US$38 million, own 51 per cent and 49 per cent, respectively, in the mine.

Several Chinese companies also mine nickel elsewhere.

The Chinese Government agreed earlier this year to allocate US$650 million for the Ramu nickel deposit in Papua New Guinea, in exchange for an 85-per-cent stake, for China Metallurgical Construction Co, in the project.

Standard Bank Asia Ltd said, on September 15, an agreement could be completed within six months.

Construction is expected to be completed in mid-2007, and the project is expected to yield 33,000 tons of nickel and 3,000 tons of cobalt annually for at least 20 years.

(Business Weekly 10/20/2004 page9)

Alcan Joins World Economic Forum's Global Greenhouse Gas Register

CNW Telbec (Communiqués de presse), Canada Oct 21, 2004

MONTREAL, Oct. 21 /CNW Telbec/ - Alcan Inc. (NYSE, TSX: AL) announced today that it has joined the World Economic Forum's (WEF) Global Greenhouse Gas Register, an initiative to stimulate the disclosure and management by companies of their world-wide climate emissions. The decision follows another impressive year for both Alcan and Pechiney greenhouse gas (GHG) programs, as both exceeded their reduction objectives for 2003.

"Joining the WEF's greenhouse gas register underlines the importance of global accountability in Alcan's commitment to the environment," said Travis Engen, President and Chief Executive Officer of Alcan Inc. "The success of our GHG reduction programs further solidify Alcan's pledge to be a leader in environmental and sustainability issues," he added.

Developed in partnership with leading international business and environmental organizations, the register aims to spur voluntary corporate climate action around the world by creating a global standard for the disclosure of emissions inventories and reduction targets.
Successfully Targeting Greenhouse Gases In 2003, Alcan's GHG program, TARGET, reduced emissions by 300,000 tonnes, more than double the established objective; Pechiney reduced its direct emissions by 650,000 tonnes of CO2 equivalents, exceeding its annual reduction target by 100,000 tonnes. Over the same period, the companies met

all their reduction objectives against voluntary and mandatory national targets. Since 1990, both Alcan and Pechiney have significantly reduced their specific perfluorocarbon (PFCs - a greenhouse gas) emissions by 70 percent. While the methodologies behind these results differ, Alcan has accounted for both in this first integrated report. The Pechiney GHG reduction activities and reports are being integrated into Alcan's program, TARGET.

TARGET is a key element of Alcan's environment, health and safety management system called EHS FIRST. Alcan expects to achieve its annual reduction objective of approximately 190,000 tonnes of CO2 in 2004 and 2005.

In addition, The Climate Group, a non-profit organization committed to reducing large organization's GHG emissions, recognized Alcan in the UK as one of five companies having achieved exemplary emission reductions between 1990 and 2000.

Alcoa - Mt. Holly Commended for Environmental Excellence

Capitol Reports (press release), United States 10/21/04

GOOSE CREEK, SC (10/21/04) -- Alcoa (NYSE:AA) and the University of South Carolina jointly announced today that Alcoa - Mt. Holly has been recognized as a leader in environmental excellence by being named to the South Carolina Environmental Excellence Program (SCEEP). A committee of industry, environmental, governmental, academic and public interest representatives recommended the Alcoa plant for inclusion in the program after reviewing the facility's environmental standards, certifications and initiatives. This is the first time that the Mt. Holly smelter has been named to the program.

Alcoa invested $6.5 million in the Mt. Holly smelter last year to improve its environmental performance and increase its production capacity. In keeping with Alcoa's commitment to meet or exceed existing environmental standards, more than $3 million of that investment was tied directly to environmental projects. The projects included process control improvements that allow the plant to further minimize fluoride emissions and modifications that lower particulate emissions.

Alcoa's Mt. Holly smelter has held ISO 14001 certification for environmental management standards since 1996 from the International Standardization Organization. In addition, the smelter is an Alcoa pilot test site to identify and evaluate passive "green technology" environmental solutions that can enhance the quality and reduce the quantity of storm water discharged into the environment. Other environmental programs at Mt. Holly include: an Employee Home Waste Recycling Area for employees to divert waste from their homes to recycling opportunities instead of county landfills; monetary rewards for employees who make feasible suggestions to improve EHS (environment, health and safety) programs; and merit pay raises that are dependent on annual key EHS performance indicators.

Alcoa's Mt. Holly has been a part of Goose Creek since it was built in 1977. The facility is the most advanced plant of its kind in the United States, a pacesetter in production efficiency, energy utilization and environmental protection. The facility currently employs about 600 people, and contributes more than $150 million to the local economy through payroll, taxes and the purchase of goods and services. The plant produces aluminum ingot that is processed by customers into products such as foil, cans and automotive parts shipped throughout the United States and Mexico.

SCEEP was established in the late 1990s to recognize and encourage industry and business leaders committed to environmental improvements beyond regulation requirements. Administered by the Institute for Public Service and Policy Research at the University of South Carolina, the sponsors of the program include the South Carolina Department of Health and Environmental Control, the South Carolina Energy Office, and the South Carolina Department of Natural Resources.

IMCO Recycling Signs Long Term Aluminium Supply Deal with DaimlerChrysler Posted October 22nd, 2004

IMCO Recycling Inc. today announced that its German subsidiary, VAW-IMCO Guss und Recycling GmbH, has signed a long-term agreement to supply molten aluminium alloys to DaimlerChrysler AG.

The metal to be supplied under the agreement will serve as a base load for a new recycling facility that the company will build in Deizisau, Germany, near DaimlerChrysler AG's foundry in Stuttgart. The plant is expected to begin operations in early 2006 and will have about 40 employees.

VAW-IMCO currently supplies molten aluminium alloys to this customer from its Toeging plant in Bavaria. The metal is delivered via a heating station installed close to the DaimlerChrysler foundry. The company said it expects the volume of its Toeging facility that is now provided to DaimlerChrysler AG to be replaced by other business.

Richard L. Kerr, president and chief executive officer of IMCO, said the company specializes in the just-in-time delivery of molten metal that will be provided to DaimlerChrysler AG. "This delivery method, in which we use utilize customized trucks and refractory-lined crucibles, lowers customers' energy, labour, maintenance and capital expenses as well as melt loss, thus increasing their productivity.

"We are pleased to reach this agreement because it further broadens our participation in the transportation sector, the largest and fastest-growing aluminium market."

Mr. Kerr said the aluminium content of vehicles manufactured throughout the world "has risen significantly over the past decade. This increase has occurred because the use of aluminium instead of traditional materials lowers fuel consumption and emission, improves vehicle safety and performance, extends service, in part through less corrosion, and provides much higher end-of-life value."

IMCO Recycling also announced that VAW-IMCO will start operations in December at a new facility which will produce magnesium from scrap. About 90 percent of the output of the plant, which is being built next to the Toeging facility, will be provided to the European auto industry.

The magnesium plant will have a rated annual capacity of 15,000 tonnes and is expected to begin operating at a rate of 5,000 tonnes per year in the first quarter of 2005. It will recycle magnesium scrap and produce cast magnesium ingots.

For more information on aluminium, click here.

Posted October 22nd, 2004

Brian Gilbertson's success comes from being nimble (Interview)

Business Report, South Africa October 22, 2004

Will you be living in Moscow now? A colleague mentioned that you once said you're not quite sure where you live as your dog, your CDs and your wife were all in different parts of the world, have you got them one city yet?

That must have been a while ago; my dog is dead now. It was one of the more traumatic moments of my life [and] one of the saddest things I ever had to do. I held him in my arms while they put the needle in.

I'm definitely going to be living in Moscow. I have an apartment, which has a nice view, 10 minutes from the office. But the Russian winter lies ahead.

What happened to setting up a Sual office in South Africa?

This is a Russian company, and this is not a company you can run from the farm.

Do you still regard South Africa as home?

I still have three homes here, and I am delighted that I will be walking along the beach in Plett in a few years' time.

When will you retire - you're 60 now?

I'm 61. I plan on taking the concept of non-executive director [of newly announced empowerment company Incwala Resources] to a new level.

Will you have to be taken from the boardroom kicking and screaming?

I probably have more experience leaving boardrooms than staying in them. I have never left a boardroom 'kicking and screaming'.

Does that have anything to do with the kind of severance packages you get?

I wasn't expecting that comeback.

I read somewhere that you got offered a �50 million package to go to Sual?

I heard that too. Luckily, Sual is not publicly traded so that is not disclosed.

You're probably one of the most famous high-earning executives in the world. Are these types of salary packages reasonable?

One day I am going to write a thesis on executive remuneration. You really must not underestimate the responsibility of the position of chief executive. Last year I spent the first two days of my Christmas holidays dealing with Securities Exchange Commission filings.

The signatures of the chief financial officer and mine had to be on that document. That's a very serious responsibility to bear and should be properly rewarded.

Executives these days also have no security of tenure ... they plan to work with certainty only a couple of years. You can't get a contract for longer than a year, companies don't like it.

Executives get compensated and then get offered incentives like shares schemes to stay with a company.

And with those share schemes, you're almost never allowed to trade [because you're involved in a deal] - as your shareholders all do - and three quarters of the time you're in a closed period.

You speak often of your time at BHP Billiton. Do you have any pearls of wisdom for South African executives going to Australia?

No, we had a great time in Australia. The establishment of the company was one of the recent successes of our industry.

Paul Andersen and I did the deal in two hours, here at Jan Smuts Airport. He was on his way back to Australia from a visit to Algeria. I went back to Plett. I'd interrupted my holiday to come and meet with him.

I wrote it out by hand on two sheets of paper, put in the fax machine, sent it across to him and he came back to me and said: 'Ja, that sounds OK, I'm going to have to check it with my board and so on, but it sounds like a deal.'

Six months later, we were in the middle of Christmas then, there were no lawyers and merchant bankers about until about January 10 and they were all getting very excited about the potential fees involved.

But the entire deal was done by July 1, all the due diligence in 26 countries around the world, one of the most complicated mergers - potentially - was done.

Australia is a very interesting country. I had set it as my objective to work through every restaurant in Melbourne that was in the restaurant guide before I departed.

So there is no particular weirdness towards South African executives there?

I don't think so. Australians are very friendly people. I mean the Australian press is very hostile towards just about everything in the business world. They are worse than the British press. They were hugely critical of the dea

l from the outset. Paul Andersen and Don Argus were criticised awfully in the press for doing the deal. But I think afterwards, the press came round to say maybe it wasn't so bad at after all.

But like journalists all over the world, if you tell the truth they will give you a fair hearing

Not 'you were paid too much, you bastard'?

No, no, not at all. In fact, in fairness, I actually think he said something along the lines of 'well, I think, it's a hell of lot of money, but you know'.

But Brian's a great guy ...

No, he didn't say it that way, but if the company has done well then executives deserve ... No, you're right he did, it was a whole kind of thing on executive remuneration and he said shareholders needed to get involved and, I don't remember him going on as long as that. But what else is he going to say when he is asked to comment on something like that?

Clearly, it had been a great success - the company. He couldn't say this guy is being paid because he has screwed up everything. The deal that Paul and I delivered was a great deal.

Everyone, everyone benefited from it. It's the greatest company the world has ever seen! In our industry, it really is! Go and look at their results.

Would Sual consider investing in a smelter at Coega? I read that too, I really don't know - I haven't put that to anyone. Firstly, you would have to be sure it was in the interests of the shareholders. Ultimately, they are making an investment to make money.

I think what would make it possible is that Sual has a particular technology, which is a set a set of large pots.

A potline is a great big pot, bigger than this room, in which you have molten alumina, pass a current through it and you make aluminium.

The design of the pot and the technology you used are critical in the efficiency and the environmental issues. Sual has a new technology and they are running these pots and testing them.

The gentleman in charge of this project, Skornakov, believes that it's going to change the world.


Well, I mean, you know, he's paid to believe that. So that would be interesting. You remember that Coega was going to use AP50, the Pechiney, which had also never been used. I haven't heard anything about that in a while. I suspect the technology question for Coega hasn't been decided.

The aluminium industry in southern Africa was started with Hillside and that was a decision that was made when I was in the chair. It was, by the way, one of the most remark

able decisions I have ever seen.

It could never have been in the current climate of corporate governance. There was this board that was essentially drawn from Rembrandt and Sanlam, facing a change in the world as they'd known it with the new government coming in here.

In fact, we'd been debating the project for hours and hours and we had a break for lunch. As we walked across the road to go to lunch, there was this protest march of toyi-toying workers and I thought 'these guys, they have just destroyed my project. They will never vote for it.'

They went back, all these elderly gentlemen, and they voted in favour of a $2 billion [R12.6 billion] investment - the biggest investment ever made by a South African company in a technology they knew nothing about and in an industry we had no raw materials for!


Well, ja, I was involved in the Hillside and Mozal smelters. But, hey, I'm not here to build Coega or anything. I'm here to run Sual.

Do you think Coega will ever have an aluminium smelter?

Well, you put smelters where the power is cheap, and Coega has the last tranche of cheap power that's available. Can it be financed? Has it got alumina supplies? I don't know.

What is the best mistake you ever made? The worst mistake?

Best. That worked out fabulously? I'll need to think about that.

You seem quite excited about the Incwala Resources empowerment deal? Why isn't it just another empowerment deal? So what, there's another empowerment company? Why the excitement?

It'll only be exciting if we get it right. Otherwise, it will be dullsville. If we get it right, this will become an in dependent, self-sustaining company that will grow and run operations and will build new mines and will, with a bit of luck, be the biggest in South Africa.

Now, to do that, you take the opportunities that you can from the empowerment process.

There is R100 billion worth of projects coming through - that someone's going to do. We've got equity capital. The other guys, I don't know, may get it, they're not there yet.

Again, I think Incwala is a step ahead. I think the structure that Ian Farmer and Sir John Craven came up with doing this with vendor financing from the promoters of the deal and the employees coming in to the structure - all very creative. I think it's ground-breaking stuff.

I think no one else will be able to do an empowerment deal without following this mould. I think this company has a good asset in there and a strong financial structure.

And you only need a little bit of merger and acquisition activity and you can be a company of size. Success comes to those who are nimble.

What do you do in your spare time?

I like cycling, I enjoy music, enjoy going to opera. I have just come back from Glynbourne. Every year, I try to make the Salzburg Festival. And I like going to interesting places. I enjoy the south of France, Croatia. Dubrovnik is a fascinating place.


No, I'm not a cold-weather person, and this is my big dilemma with Russia.

State asks for help on bauxite resource

Brisbane Courier Mail, Australia 22oct04

Tony Grant-Taylor

IF the State Government hoped its decision to relieve aluminium giant Alcan of its Aurukun bauxite lease would allow it to put the resource on the market post-haste, it is not panning out that way.

The Government yesterday called for registrations of interest from parties willing to help "the State Government assemble the information needed to underpin a future call for competitive bids" for Aurukun.

Premier Peter Beattie and Minister for State Development Tony McGrady said the Government intended to form an "industry reference group" to provide expert advice on what information bidders would need.

Mr Beattie told Parliament this was necessary because current information on the Aurukun resource dated from the 1960s and 1970s and did not comply with contemporary mining industry technical or reporting standards.

Aurukun was held by French group Pechiney, which was taken over by Alcan late last year, until the Government in May legislated to take the lease back.

The Government hopes to auction Aurukun on the condition that a successful bidder will not just mine bauxite but build an alumina refinery in the state to process it – the same condition the Bjelke-Petersen regime extracted decades ago when it granted Cape York bauxite leases to Comalco, Alcan and Pechiney.

But that would require a bidder to commit to spending perhaps $US1.5 billion – something international resource companies are highly unlikely to do without having up-to-date, extensive and expensive exploration data on the deposit.

The Government had previously indicated the state would prove up the deposit – so perhaps it is hoping the reference group will reveal someone willing to provide the necessary expertise – and perhaps someone, possibly from China, who is desperate enough to get their foot on the bauxite to take a very big punt.

Abramovich Sells Stake in Russian Aluminum

Philadelphia Inquirer (subscription), PA Associated Press 10/22/2004

MOSCOW - Basic Element, the holding company controlled by aluminum baron Oleg Deripaska, is close to acquiring full control of Russia's biggest aluminum maker, Russian Aluminum, the Interfax news agency reported Friday.

"The company Basic Element is announcing the completion of talks to acquire a 25 percent stale in Russian Aluminium," Basic Element said in a news release carried by Interfax.

Under the deal, Basic Element would buy out the remaining stake owned by Roman Abramovich, the billionaire who owns the Chelsea soccer club. The deal would mean that Deripaska has bought out the entire 50 percent stake formerly owned by Abramovich in the world's third largest primary aluminum producer.

The value of the 50 percent-stake has been estimated at some $2 billion. Neither Basic Element nor Abramovich have valued the 25-percent stake, and spokesmen were not immediately available for comment Friday evening.

Basic Element also invests in the steel, automotive, energy and timber industries.

Russian Aluminum, headquartered in Moscow, accounts for 75 percent of Russia's primary aluminum output and 10 percent of global output.

Alumina up 39pc due to shortage, says Chalco

The Standard, Hong Kong 2004-10-26

Staff reporter

Aluminum Corp of China, or Chalco, the world's second-largest alumina producer, said the average sales price of alumina in the third quarter rose 39 per cent due to a shortage on the mainland and globally amid improving economic growth.

The average sale price of its alumina was 3,614 yuan (HK$3,402) a tonne in the third quarter, Chalco said, up 38.8 per cent from a year earlier but 3.9 per cent lower than the first half.

The average price for primary aluminium rose 10.7 per cent from a year ago to 15,842 a tonne.

Chalco said the selling price of its alumina is at 4,130 a tonne and the price of imported alumina has reached US$460 (HK$3,588) a tonne.

Global demand for alumina has been outstripping supply as economic growth accelerates.

The global economy will probably expand by 5 per cent this year while China's will grow by 9 per cent, the International Monetary Fund said.

Chalco said the shortage would probably continue this year as China was expected to consume 13 million tonnes of alumina products, about double the 6.7 million tonnes the country would produce.

``It is also expected the global shortage of alumina will continue for a relatively long period,'' it said. ``During the fourth quarter, alumina prices are expected to remain high.''

Chalco targets to expand its alumina production capacity to 8.5 million tonnes and primary aluminium capacity to 1.33 million tonnes in 2005.

It signed an agreement with Brazil's Companhia Valedo Rio Doce in May for an alumina production project that could produce 7.2 million tonnes.

Its production of alumina products rose 8.1 per cent in the third quarter from a year ago to 1.73 million tonnes, while production of primary aluminium products edged up 1.9 per cent to 200,000 tonnes. It sold 8.7 per cent of alumina externally during the quarter to 1.36 million tonnes, but sales of primary products slipped to 176,000 tonnes. Chalco expects domestic production volume of primary aluminium to rise 12 per cent to 6.2 million tonnes this year, slightly higher than the 5.9 million tonnes consumption, a rise of 13 per cent.

Meanwhile, Angang New Steel, China's second-largest Hong Kong-listed steelmaker by market value, said its net profit leapt by 75 per cent in the third quarter to 498.8 million yuan, from 284.9 million yuan a year earlier, on the surge in prices. Turnover increased to six billion yuan from 3.45 billion yuan.

Angang Steel said it boosted exports during the third quarter to benefit from higher prices overseas.

The company's shares dropped in Hong Kong and China before the earnings announcement on concern that demand for cars is waning in China after Shanghai Automotive reported a 23 per cent drop in third-quarter profit on Friday.

Alcoa Invests 64 Million Euros in Environment and Technology in Spanish Smelters

The Scotsman, UK Oct. 25, 2004

Business Editors

GENEVA – (BUSINESS WIRE) – Oct. 25, 2004 – Alcoa (NYSE:AA) announced today that it will invest 64 million euros in technology and environmental improvements for three of its smelters in northern Spain.

At its smelter in Aviles, Alcoa will invest 46 million euros in innovation and technology improvements that will allow the plant to achieve environmental standards set by the European Union to begin in 2007. The directives are to lower the total fluoride emissions, dust and benzoalfapyrene and must be completed by the end of 2006. The Aviles project is a result of Alcoa R&D efforts to introduce newly developed improvements to Soderberg pot technology.

Earlier this month, Alcoa signed a voluntary agreement with the regional government of Galicia impacting two of Alcoa’s smelting facilities, one in San Ciprian, the other in La Coruna. The agreement includes specific actions and projects addressing emissions proposed by Alcoa to improve the local environment, which will include an 18 million euros investment by the company over the next five years. Alcoa’s Alumina refinery in San Ciprian is also included in this agreement.

Alcoa is the world’s leading producer and manager of primary aluminum, fabricated aluminum and alumina facilities, and is active in all major aspects of the industry. Alcoa serves the aerospace, automotive, packaging, building and construction, commercial transportation and industrial markets, bringing design, engineering, production and other capabilities of Alcoa’s businesses to customers. In addition to aluminum products and components, Alcoa also markets consumer brands including Reynolds Wrap(R) foils and plastic wraps, Alcoa(R) wheels, and Baco(R) household wraps. Among its other businesses are vinyl siding, closures, fastening systems, precision castings, and electrical distribution systems for cars and trucks. The company has 120,000 employees in 42 countries and has been a member of the Dow Jones Industrial Average for 45 years and the Dow Jones Sustainability Indexes since 2001. More information can be found at

CONTACT: Investor Contact – William F. Oplinger, 212-836-2674

Media Contacts –

Alcoa Inc. Kevin G. Lowery, 412-553-1424


Alcoa Europe Dave Bouffard, 0041 22 919 6075


Alcoa Announces Reorganisation and Formation of a New Global Extruded Aluminium Products Business October 25th, 2004

Alcoa today announced a reorganization of its management structure to better align itself with global markets. Alcoa will create a new global primary business, serving the aluminum and alumina markets, and a new global extruded products business. It will also create an integrated North American and European business serving the mill products markets. The rigid packaging business, with major operations in the United States and Australia, will be organized into a new global business group, and combined with Alcoa's Asia operations, and the global industrial foil business.

These four new businesses, along with two existing global businesses serving the packaging and transportation markets, will give Alcoa a more simplified structure better suited to serve its customers. The leaders of these six businesses will report to Alain Belda, Alcoa Chairman and CEO.

To continue its growth strategy, the company will rely on regional presidents, who have primary responsibility for negotiating expansions in Europe, Asia, Australia, and Latin America. A new post, Executive Vice President for People, ABS, and Culture, will drive corporate initiatives, such as deployment of the Alcoa Business System and quality.

"Globalization continues to transform the way our business operates," said Alcoa Chairman and CEO Alain Belda. "Today's changes will help us be more agile in swift-moving markets and allow us to better leverage our global manufacturing capability. The new management team and structure give us an opportunity to further reduce costs, improve productivity, and grow our business."

Bernt Reitan will run the new Global Primary Products business, encompassing the company's aluminum smelters, alumina refineries, energy assets, and mines. The European primary business, headed by Luis Fossati, and the Latin American primary operations, directed by Josmar Verillo, will now report to Reitan. This business, with approximately $5.7 billion in annual third-party revenues, will be based in New York City.

Helmut Wieser will lead the new North American and European Mill Products group with approximately $3.3 billion in annual revenues. Philippe Royer will become the new President of European Mill Products, reporting to Wieser, along with Bob Wetherbee, who is the President of North American Mill Products. Wieser's group will be based in New York City.

Mario Longhi will head up a new Global Extruded and End Products group, serving the extrusion and building and construction markets. Dave Dobson, the President of North American Extruded Products, and Dave Schlendorf, the President of Alcoa Building and Construction Systems, will report to Longhi, along with the European Extruded Products business. Longhi's group has approximately $3.1 billion in revenues and will be based in Geneva, Switzerland.

Joe Muscari will take a new role as head of the Rigid Packaging, Foil, and Asia group. Muscari will oversee the company's global can sheet business strategy and its assets in North America, Latin America, and the Asia Pacific. He will also develop a global strategy for a new, global industrial and commercial foil business. Muscari will continue to have responsibility for Alcoa's operations in Asia and the growth strategy there. The group has approximately $2.9 billion in revenues and will be based in New York City.

Bill Christopher will continue to lead Alcoa's Aerospace, Automotive and Commercial Transportation group with approximately $4.6 billion in revenues. Bill Leahey will continue to direct the global Packaging and Consumer group with approximately $3.8 billion in revenues. Those groups are based in Cleveland, Ohio and New York City respectively.

Paul Thomas will now serve in a new position of Executive Vice President for People, ABS, and Culture. In that role, he will have primary responsibility for driving the company's major change initiative, deployment of the Alcoa Business System. Functions reporting to Paul include human resources, communications, Environment, Health and Safety, quality, operations management consulting, and marketing services. Hamish Petrie, Vice President for People and Communication, will retire in 2005 after supporting the transition.

To help expand the company's global footprint, Alcoa will rely on the leadership of key executives with proven expertise in driving growth: Ric Belda in Europe; Wayne Osborn in Australia; Lloyd Jones in the Asia Pacific region; and Josmar Verillo in Latin America. In addition to their other responsibilities, these executives will coordinate expansions in their regions, negotiations on long-term energy contracts, and public strategy. Ric Belda will also oversee the integration of the pending acquisition of manufacturing assets in Russia.

Kaiser granted more time to file reorganization plan

Houston Business Journal, 26 Oct 2004

Houston-based Kaiser Aluminum announced Tuesday that the U.S. Bankruptcy Court has extended the deadline for Kaiser to file a bankruptcy reorganization plan.

This is the seventh amendment to Kaiser's post-petition credit agreement.

The modification would change the date for Kaiser to file a Chapter 11 reorganization plan from no later than Dec. 31, 2004, to no later than Feb. 13, 2005, which is currently the expiration date of the post-petition credit agreement.

The company's lenders have consented to this change. Kaiser expects the court to enter an order approving the seventh amendment before Oct. 31.

The amendment, once effective, resets a financial covenant and permits the sale of Kaiser's interests in and related to the QAL alumina refinery in Australia.

Kaiser is a producer of fabricated aluminum products and owns interests in alumina and primary aluminum assets.

© 2004 American City Business Journals Inc.

SUAL to start construction of alumina works under Komi-Aluminium project in April of 2005.

Gateway 2 Russia, Russia 26 October 2004 18:09

Siberian Urals Aluminium Co. (SUAL) will launch construction of alumina works under Komi-Aluminium project in April of 2005, Komi Governor Vladimir Torlopov said.

Construction of aluminium works set forth by the same project, has been shelved for indefinite time as no agreement on fixed tariff rates with RAO UES and Gazprom was reached.

Komi-Aluminium is a project to construct integrated alumina and aluminium complex. The production is expected at up to 6 mln tons of bauxite, 1.4 mln tons of alumina and from 300,000 to 500,000 tons of aluminium on year. Project investments will exceed $2 bln.

Abramovich Quits Aluminium Business

MOSNEWS, Russia 26.10.2004 12:53 MSK (GMT +3)

Roman Abramovich, the Russian business tycoon, has completed his exit from the aluminium business, having sold his remaining 25 percent stake in Russian aluminium giant RusAl to fellow oligarch Oleg Deripaska for a reported $2 billion, The Guardian reported on Tuesday, Oct. 26.

Basic Element, the holding company through which Deripaska controls his assets, said that "negotiations over the acquisition of 25 percent of the shares of Russian Aluminium have been completed". It said that the purchase had been made from the main shareholders of RusAl and that Basic Element now owns 100 percent of the company’s shares. RusAl is Russia’s largest aluminium producer which accounts for three quarters of the country’s primary aluminium output and for a tenth of global production.

Abramovich who has close ties to former President Yeltsin’s circle was thought to be the next Russian oligarch in the Kremlin’s sights. He’s been living in London, where he bought the Chelsea soccer club, and slowly selling off some of his assets in Russia. Earlier Abramovich sold a 25-percent stake in RusAl to Deripaska for a reported $3 billion, and in June 2004 it was reported that he wanted to sell the remaining 25 percent.

In a conversation with The Guardian a source close to Abramovich dismissed speculation that he was shifting his assets out of Russia in the wake of the Kremlin’s high-profile pursuit of oil giant Yukos and its owner Mikhail Khodorkovsky. The facts, however, speak for themselves, and when Abramovich’s term as the governor of remote northern region of Chukotka expires this year there will be nothing holding him in Russia.

Ormet CEO Quits

WTAP-TV, WV 27 Oct 2004

Abby Ham

The chairman and chief executive of Ormet Corporation has quit, saying it's time to hand over leadership while the company works to emerge from bankruptcy.

The Wheeling-based aluminum maker says R. Emmett Boyle's resignation is effective immediately.

President and Chief Operating Officer Michael Williams has been named interim CEO.

Ormet filed for bankruptcy protection in January citing low metal prices, weak demand, high energy costs, and rising healthcare costs. The company had tried to negotiate a deal with creditors for a year before filing for bankruptcy protection.

Last month, Ormet asked a bankruptcy judge in Columbus, Ohio, for permission to break labor contracts at two eastern Ohio plants.

Ormet has 2,000 workers in West Virginia, Ohio, Indiana and Tennessee.

Steelworkers Hail Departure of Ormet CEO Boyle;

Look Forward to Possibility of Improved Relations with the Company

Business Wire (press release), CA October 27, 2004 05:01 PM

COLUMBUS, Ohio--(BUSINESS WIRE)--Oct. 27, 2004--News From USWA: The United Steelworkers of America (USWA) welcomed Emmett Boyle's resignation today as the Chairman and CEO of Ormet Corporation. The union has consistently identified Boyle's outmoded and confrontational management style as a major impediment to negotiating a new labor agreement while the company restructures under Chapter 11-bankruptcy protection.

"Emmett Boyle and Ormet have learned the same lessons as Bill Bricker at LTV, Richard Wardrop at AK Steel, Joe Corvin at Oregon Steel and others," said USWA International president Leo W. Gerard. "You must deal with the Steelworkers in a constructive way if you want to run a successful company."

In negotiations, the company was seeking significant changes to the two collective bargaining agreements covering Ormet's Hannibal, Ohio facilities, as well as major modifications to the existing retiree benefits programs. In spite of repeated requests, the company has failed to provide the USWA with the information needed to understand the company's proposal and the business structure supporting the plan.

In addition, the company has rejected all offers made by the union to assist in developing a reorganization plan to ensure the long-term viability of the facilities.

"Boyle relentlessly pursued a hopeless and self-defeating path instead of acknowledging our proven track record of successfully restructuring companies in the steel, aluminum and tire industries," said Gerard.

"We look forward to opening a dialogue with the management team and creditors at Ormet," said USWA District Director Dave McCall. "We are hopeful that with Boyle out of the way, we can engage in a rational dialogue of good faith bargaining and reach an agreement that will provide long-term viability for Ormet, its creditors, our members and the communities in which it operates."

Contacts United Steelworkers of America Wayne Ranick, 412-562-2444

Aluminium production to double

The Standard, Hong Kong 28 October 2004 / 01:46 AM

Lee Yuk-kei

Asia Aluminum Holdings will join with its chairman Kwong Wui Chun and partners in a HK$3 billion expansion that will double the company's aluminium production capacity, chief financial officer Gilbert Lau said.

The disclosure came as the company posted a 7.5 per cent decline in net profit in the year ending June 30.

Benby Chan, deputy chairman and chief executive officer of Asia Aluminum, the country's largest aluminium extruder, said production capacity would be lifted by 50 per cent to 300,000 tonnes from 150,000 tonnes.

The company is also building a 400,000 tonne flat-rolled production line at its new Asia Aluminum Industrial City at Zhaoqing, which is scheduled for completion in mid-2005.

Asia Aluminum said sales rose 25 per cent to HK$2.9 billion in the first half on strong demand from China and the United States. But net income fell 7.5 per cent to HK$222 million.

Its gross profit margin for the full-year of 2004 is 23.8 per cent. Chan said that would widen thanks to lower production costs and the addition of higher-margin products at its new plant.

He said 150,000 tonnes of orders were lined up, about 15 months' work.

Scottsboro Aluminum’s facilities may be sold at auction today.

Scottsboro Daily Sentinel, AL Published October 26, 2004

By Ken Bonner

The building is scheduled to be sold at absolute auction on Thursday, Oct. 28 if a minimum bid of $2.3 million is achieved. Sealed bids are due to be received by today in the offices of Hilco Real Estate or Graham and Company.

Hilco Real Estate of Northbrook, Illinois has been attempting to sell the property for Jackson National Life Insurance Company who took the facility over when Scottsboro Aluminum filed bankruptcy and closed the plant. The asking price had been $5.5 million.

Hilco hired Graham and Company, an Alabama firm, to assist with the sale.

The property consists of manufacturing and warehouse space totaling approximately 1.05 million square feet and about 85 acres of land. The structure was built in 1967.

According to Jeremy Pope of Graham and Company’s Huntsville office, the highest bidder will be notified on Thursday. If two or more bidders bid the same amount they will be given several hours on the 28th to present their best offer.

"We do have interest in the property," Pope, a commercial agent, said. "We have several companies and individuals that are looking at the property but I don’t think they will be able to make the bid date."

Pope confirmed the property would not sell this week unless the minimum bid was reached or exceeded.

"We do expect offers in the next several weeks," he said.

© 2004 The Daily Sentinel. All rights reserved

VALCO deal draws Minority's anger

GhanaWeb, Ghana Oct 27,2004

Accra, Oct 27,GNA - The Minority group in Parliament criticised the Presidency for rushing through the deal to take over the 90 per cent share offer of the Volta Aluminium Company (VALCO).

"This is being rushed through. We know we have to take a decision but we have to know the details before we do so,'' Mr Seidu Adamu, Minority Spokesman on Energy said.

Their anger and frustration was eased by a reconciliatory speech given by Papa Owusu Ankoma, Minister of Justice and Attorney General, who appealed for the group's support for ''a peculiar transaction.'' He said time was essential but Parliament could not have time to look at the deal until all issues have been settled.

The minister said although a memorandum was placed before the house in July, the House's sitting arrangements and other issues pertaining to the deal had brought about this "special circumstances."

Mr Adamu had criticized the government for "fumbling with the negotiations and this has put us in a difficult situation... Some of us are ready to make concessions though."

Mr Doe Adjaho, Minority Chief Whip, asked how five million dollars was paid to VALCO as part of 18 million dollar deal without Parliamentary approval.

He suggested that the intended 9.5 million dollar pay off package for the VALCO workers should be worked into the final agreement of purchase to ensure payment.

Mrs Hannah Tetteh-Kpodar, NDC-Ewutu Senya, said," we are in this deal due to Kaiser bankruptcy rather than our government's ingenuity.'' Kaiser Aluminium and Chemical Corporation, a majority shareholder of VALCO, has offered to sell its shares in the company to the government of Ghana for 18 million dollars.

Rusal to take stake in QAL

Sydney Morning Herald (subscription), Australia October 29, 2004 - 2:20PM

Russian-based aluminium producer Rusal has purchased a 20 per cent stake in Queensland Alumina Ltd (QAL) from Kaiser Aluminium.

The auction was authorised by the US Bankruptcy Court for the District of Delaware.

The successful bid provides for a base price of $US401 million in cash, subject to certain working capital adjustments.

It also includes the purchase of Kaiser's alumina and bauxite inventories and the assumption of Kaiser's respect of approximately $US60 million of QAL debt.

Kaiser will also transfer its existing alumina sales contracts and other agreements relating to QAL to Rusal.

Rusal is the third largest aluminium producer in the world and accounts for up to 10 per cent of the world's output.

The company accounts for 75 per cent of Russia's primary aluminium output and 10 per cent of the global primary aluminium output.

"Taking a stake in QAL, the world's biggest alumina refinery, represents another important step in Rusal's long term global strategy," said Rusal's director for Business Development, Australia, Duncan Hedditch.

"Rusal intends to increase its aluminium production significantly over the next decade, and securing alumina supplies to support that growth is an integral part of that strategy.

"This stake in QAL also provides us with further global spread of our asset base, and gives us a presence in Australia."

The sale of Kaiser's stake is subject to a court approval process in the United States on November 8.

The transaction also requires the formal consent of QAL's two existing shareholders, Alcan Inc (which holds a 41.6 per cent stake) and Comalco (which holds the remaining 38.6 per cent).

In Australia, the sale will require the approval of the Foreign Investment Review Board as well as other statutory approvals.

It is anticipated that this approval process will be completed by the end of the first quarter, 2005

Attorney General Defends VALCO buyout

GhanaWeb, Ghana Thursday, 28 October 2004

Accra, Oct 28,GNA - Papa Owusu Ankomah, Attorney General and Minister of Justice, on Thursday said Ghanaian would be reliving the vision and dream of an integrated aluminium industry by purchasing the stake on offer in the Volta Aluminium Company (VALCO).

"Forty years ago, many Ghanaians thought of Dr Kwame Nkrumah's vision as wishful. Today, President Kufuor has a vision that in about twenty years, Ghana would be a star of Africa."

Papa Owusu Ankomah was winding up the debate on the purchase of 90 per cent shares of VALCO in Parliament.

He said during Nkrumah's day, he had a river, a dream and deposits of bauxites but he managed to turn it into a dam with its related benefits.

"Now we would realise this dream with a much stronger bargaining power. We have a dam, a smelter and bauxite deposits to make a stronger impact."

He said Parliament was not rpt not called up to rubberstamp a done deal but to share and approve a deal that was in the interest of the people of Ghana.

The Attorney - General, who is the lead negotiator of the purchase, said the five million dollars given out is a sign of good faith and that Government had pursued the interest of the country diligently.

Dr Paa Kwesi Ndoum, Minister of Energy, said VALCO was of strategic importance to the economy of Ghana.

He denied allegations that the dispute over power tariffs between VALCO and Government brought about the sale.

He said the parent company of VALCO had filed for bankruptcy at court in the United States and the case had to be concluded before the sale could proceed.

Dr Ndoum said aluminium was in high demand in emerging economies like China and the rest hence the viability of VALCO.

"We are working on the realities of the times and not on hopes," he said.

He said the Government did not intend to be the manager or operator of the plant.

The Minority had expressed dissatisfaction on the events leading to the deal.

They asked that such deals should be more transparent and more prudent in the future, else "Parliament ends up earning certificate of embarrassments on such deals," Mr Seidu Adamu, the Minority Spokesman said.

Parliament ratified the agreement by 120 votes against one.

Noranda Says Minmetals Moving Ahead in Takeover Talks (Update1)

Bloomberg, United States Oct. 28

Noranda Inc., Canada's biggest mining company, said China Minmetals Corp. is moving ahead with negotiations to buy it and reported a seven-fold increase in third-quarter profit as copper and nickel prices soared.

Minmetals, a Chinese state-owned metals trader and producer, is almost finished doing due diligence on Noranda and has started preparing legal documents, Noranda Chief Executive Officer Derek Pannell said in a conference call. Pannell said a transaction likely won't be completed until the first quarter and there's still no guarantee an agreement will be reached.

``They have visited many of our operations, met with our staff and, where appropriate, consulted with our own advisers,'' Pannell said. ``Minmetals appears to have worked diligently to understand the various components of the company and Noranda personnel have cooperated fully to help them achieve this.''

Minmetals entered into exclusive talks with Noranda last month, tentatively agreeing to pay a small premium to market value and spin off the company's aluminum unit. Noranda's shares have fallen about 7.5 percent since it announced the talks and dropped 40 cents to C$20.84 as of the 4 p.m. close of trading on the Toronto Stock Exchange.

Noranda now has a market value of about $6.2 billion ($5.1 billion). The Toronto-based company owns 59 percent of Falconbridge Ltd., the world's third-biggest nickel producer, and itself is 42 percent owned by Brascan Corp.

Earnings Soar

Third-quarter net income of $133 million, or 42 cents a share, compares with a restated $18 million, or 4 cents, a year earlier, the company said. Sales jumped 47 percent to $1.72 billion. Noranda was expected to earn 41 cents a share, the average of three analysts polled by Thomson Financial.

``The big news is still Minmetals,'' said Ian Howat, an analyst at National Bank Financial in Toronto who rates Noranda ``sector perform'' and doesn't own any shares. ``What their earnings are doesn't matter. Maybe four months from now they won't be publicly traded.''

Noranda said its copper and nickel each fetched 60 percent more than in the year-ago period as Chinese demand for the metals cut inventories. Almost half of the company's revenue came from copper and nickel generated more than a quarter. Noranda also produces aluminum and zinc.

To contact the reporter on this story:

Doug Alexander in Toronto at

To contact the editor responsible for this story:

Erik Schatzker at

No repeat of MIM's pushover

The Australian, Australia October 29, 2004

WHEN the giant China Minmetals last month outbid Xstrata, the Brazilians and other major miners for Canada's Noranda, Xstrata must have known that this represented a dramatic change in the mining game. The biggest customer wanted to become a supplier.

The Swiss-based company decided to move quickly. Now was the time to go for a second MIM and try and grab WMC from Australian institutions before they woke up to the new value paradigm.

And so just as in the MIM situation, Xstrata is using its proven tactics to encourage the hedge funds to buy WMC and put it in play.

The hedge funds, fresh from their ALH coup, joined the game and began buying WMC stock -- taking it above Xstrata's initial price of $6.35.

That means BHP, Rio Tinto and Anglo American are now doing their sums but Xstrata clearly thinks they will sit pat.

As their stake in WMC grows, hedge funds will put great pressure on WMC to sell so the funds can get on to the next game. They haven't the slightest interest in the long-term value shown by the dramatic Chinese move on Noranda.

By coincidence, on the same day the world's biggest dairy exporter, Fonterra, decided to bid for National Foods.

Fonterra believes dairy is going to be a boom industry in a few years because China is looking to dramatically increase its consumption.

NatFoods will be a key player in the long-term China market, so normally Australians would be very nervous about a New Zealand company's bid. But NatFoods is buying the non-dairy group SPC to give it extra clout with Woolworths and Coles -- that's a rival strategy, so we have a debate on our hands.

Accordingly, the Fonterra/NatFoods situation is different to Xstrata/WMC.

Why is one of China's major metals groups buying Canada's copper, nickel and aluminium giant Noranda? The Chinese know that the markets for copper and nickel will be transformed in the next five years, so they want to buy into producers while they are still cheap.

It is clear that while oil prices may fall in the short term they are heading into much higher territory because production will not be able to meet increasing demand.

That means the market for copper and nickel will explode. For example, the hybrid car is going to dominate car production in China and elsewhere. Hybrids are driven by a mixture of petrol and electric motors and require twice the copper and nickel as a normal car.

Noranda had copper and nickel but did not have a third important growth mineral in a carbon-sensitive world: uranium.

For Xstrata, being a major producer of uranium as well as coal is a fantastic advantage.

WMC's copper will give Xstrata huge clout in the world copper market and Xstrata also knows that it will be difficult for the Chinese to buy into WMC as well as Noranda.

On a quick set of sums, if Xstrata pays $6.35 a share for WMC it can still increase earnings per share from existing profits because British accounting standards state earnings differently. It was this technique that Xstrata used so brilliantly to extract MIM at a token price from the Australian institutions who simply didn't do their homework.

This time, Xstrata has chosen its adviser carefully. Gresham, which received a success fee from MIM for getting Xstrata to buy MIM at a ridiculously low price, will lead the Swiss group's Australian advisers.

Gresham's MIM success fee came in part because of its knowledge of hedge funds and it will use that technique to try and batter the WMC board into doing an MIM and sell out at a low price.

But all Australian miners have been shocked at the MIM transfer of Australian wealth to international markets and WMC can be expected to fight unless the bidding gets to $8 and above.

The WMC board will not be the same pushover as MIM.

Russia’s aluminum giant RUSAL gains firm footing on Japan market

ITAR-TASS, Russia 28.10.2004, 17.49

TOKYO, October 28 (Itar-Tass) - Russia’s RUSAL Company, the world’s third biggest aluminum producer, has opened a trade office in Tokyo to become the biggest Russian private company operating on the Japanese market.

Japan along with the United States is the largest importer of RUSAL products, according to RUSAL management representative Peter Fennimore. This year, the Russian company will supply Japan with 375,000 metric tons of aluminum, ninety percent of which is primary aluminum, he said.

The main goal is to gradually increase in RUSAL exports the proportion of products with high added value, including aluminum rolls, to 50 percent of the total exports in the next five years.

Through the efforts of the RUSAL office in Japan, which a Japanese national, Yasuo Arase, will head, the company hopes to expand the number of its end consumers in Japan. Japan’s top industrial companies, such as Toyota, Mitsubishi and Marubeni, have been named among RUSAL’s key partners in this country. All deliveries will come to Japan directly from Russia.

Parliament Approves Sale of Valco Shares, Africa Ghanaian Chronicle (Accra) October 29, 2004

Linda Akrasi

Parliament has adopted and approved by resolution the agreement between the Government of Ghana and Kaiser Aluminum and Chemical Corporation for the sale and purchase of the issued shares of Volta Aluminum Company (Valco) held by Kaiser.

The approval was made after a hot debate from members of both sides of the house.

Whilst submissions of the majority were for the resolution, the minority was against it.

The committee, in its report, told the house that the sale and purchase agreement would ensure a continued demand for gas from the West African Gas Pipeline project with wider benefits to the country as a whole.

They noted that as a demonstration of its good faith, government made a part payment of US$5 million to Kaiser and placed the balance of US$13 million into an escrow account at Barclays Bank, London UK under government's control.

The committee further observed that if government acquired the shares of Valco, the arbitration with Kaiser would fall away.

Also, government would be able to recoup its finances.

The committee noted that the decision to sell the shares in a back-to-back transaction to third parties would ensure that government would not be responsible for Valco's existing liabilities.

Some members questioned the rationale behind the government buying the shares of Valco and whether it made good business sense to buy the company and also if it was value for money.

The Attorney General, Papa Owusu Ankoma, explained to the committee that there had been due diligence done for the Government of Ghana by PriceWaterHouse Coopers, which indicated that the deal was good and that government should take advantage of it.

Energy Minister, Paa Kwesi Nduom, after the debate, told the house that the government had entered into the agreement, not because they disagreed on the purchase of power but because Valco would not rely on hydroelectricity as the source of power.

He said in spite of all the arbitration, they agreed with Kaiser to set all the legal issues aside and settle the issue amicably.

The minister added that the issue had been dealt with in the interest of the country.

The purpose of the agreement is that the vendor (Kaiser Company) had agreed to sell all issued shares it holds in Valco Aluminum Company, amounting to 90%, to Ghana.

Kaiser Aluminum and Chemical Corporation of USA and Alcoa Limited also of USA have 90% and 10% shareholdings respectively in Valco.

Kaiser and Valco, sometime in February 2002, commenced arbitration proceedings against the government of Ghana and VRA at the International Court of Arbitration of the International Chamber of Commerce in London.

Sometime in December 2003, Kaiser, which has for sometime been involved in bankruptcy proceedings before the US Bankruptcy Court of the district of Delaware, USA offered to sell its interest in Valco to the Ghana government.

Ghana buys VALCO

GhanaWeb, Ghana 29 Oct,2004

Accra, 29 Oct,Daily Guide – Ghana has finally acquired full ownership of Volta Aluminium Company (VALCO)

President John Agyekum Kufuor, who announced this at a durbar of chiefs and people of Suame Magazine in Kumasi, announced that his government has purchased document, has been laid before Parliament for discussion and approval.

$18m, instead of the proposed $35m.

Consequently, he declared, four companies from the United States, Australia, Russia and Norway, have agreed to team up in a partnership with Ghana, to establish an all-embracing aluminium company.

President Kufuor, therefore, called on the youth to avail themselves of this opportunity when the company commences business.

The President pointed out that business and companies were opening up in the country, and he indicated that within the shortest possible time, Ghanaians would experience the real ‘positive change’ in their lives

Ghana approves Valco purchase from Kaiser

ACCRA, Oct 29 (Reuters) - Ghana's parliament has approved the purchase of 90 percent of the Volta Aluminum Company (Valco) from Kaiser Aluminum Corp. (KLUCQ.OB: Quote, Profile, Research) , the government said on Friday. "The passage of this motion effectively means that we have bought Valco...the only hurdle left was parliamentary approval," said Kobina Hammond, Ghana's deputy energy minister. "Valco will be Ghana's property by the close of today."

The purchase for $18 million paves the way for Ghana to sell a large chunk of Valco to an industrial partner and create an integrated aluminium industry in the former British colony.

Russian giant RUSAL, a consortium led by BHP Billiton (BLT.L: Quote, Profile, Research) and Alcoa (AA.N: Quote, Profile, Research) , which holds the remaining 10 percent of Valco, have all shown interest in mining and refining bauxite in Ghana, industry sources said earlier this month.

The Minerals Commission, which regulates mining in Ghana, estimates there are 120 million tonnes of bauxite at Kibi in the east of the country.