AluNews - February 2007

EU Clears Way for UC RusAl Merger

The Moscow Times, Russia - Friday, February 2, 2007. Issue 3588. Page 5.

The Associated Press

Dmitry Beliakov / Bloomberg

A worker pouring aluminum at a RusAl mill. The firm's merger with SUAL and Glencore may be completed by April.

BRUSSELS, Belgium -- EU regulators on Thursday cleared EN+, the owner of Russia's biggest aluminum producer RusAl, to absorb rival SUAL and the aluminum assets of Switzerland-based commodities trader Glencore, creating the world's biggest aluminum company.

The European Commission said the deal would not significantly impede competition in Europe because the new company would continue to face "effective" rivalry.

The company to be called United Company RusAl will control some 12 percent of global output with its activities stretching across four continents, binding together mines in Jamaica, refineries in Ireland, Jamaica and Italy, a Swedish smelter and all stages of aluminum production in Russia and Ukraine. Under the terms of the agreement, RusAl will issue new shares to acquire SUAL, which is controlled by Viktor Vekselberg, as well as the Glencore assets.

The EU investigated the supply chain for bauxite and aluminum products, but said market shares would be "well below a level" where it could try to control the market for any of these. Glencore will keep some bauxite and other activities and have a representative on the board of the new company. EU regulators said this should not pose an anti-monopoly problem because neither Glencore nor the new company had a large share of these markets and could not restrict competition by coordinating their behavior.

RusAl CEO Alexander Bulygin said EU approval was "a major milestone" toward completing the deal -- due to be wrapped up by April.

RusAl said the deal still needed a final rubber stamp from Russia and four European countries it did not name. The Federal Anti-Monopoly Service cleared the deal on Jan. 17.

Chalco Ups Alumina Price by 50%

Resource Investor, VA 01 Feb 2007 at 09:10 AM EST By Interfax-China

SHANGHAI (Interfax-China) -- The Aluminum Corp. of China (Chalco) [HKE:2600] raised alumina prices by 50% today to RMB 3,600 ($462) from RMB 2,400 ($308) a tonne, a company official told Interfax.

Further queries as to why such a sudden and drastic price hike was implemented, received no response from the company.

Guo Jianjin, an analyst with Shenzhen North Investment Co. Ltd.(Norinco), said Chalco increased the price as increasing demand from downstream industries was placing pressure on the country's rapidly rising alumina spot price, thus, Chalco stepped up prices to cash in on the situation.

The spot price of alumina in the domestic market is currently RMB 3,800 ($489.60), up nearly 81% from a low of RMB 2,100 ($270.57) in November.

Increasing production by aluminum companies has fueled the rapid consumption of alumina since September, as alumina prices declined dramatically due to increasing alumina supplies from other domestic alumina producers.

China's aluminum production is expected to increase 2 million tonnes this year, which will significantly drive up alumina consumption, Guo said.

Guo said Chalco would further increase alumina prices to as much as RMB 4,500 ($579.78) a tonne during the first quarter, as aluminum production continues to climb.

However, he warned alumina prices could fall in the second half as many alumina projects come on stream.

Heng Kun, a senior analyst with Everbright Securities in Shanghai, anticipated alumina producers, except Chalco, would offer nearly 18 million tonnes of capacity.

Roughly 40% of Chalco's alumina supply is based on the cash price of RMB 3,600 ($463.83) a tonne, while the remaining 60% of alumina supply from the company is actually fixed at long-term contracts with th price at 17% of average monthly aluminum futures price on the Shanghai Futures Exchange.

Chalco's stock price rose 1.29% to HKD 7.05 in Hong Kong in early morning trading today.

Shanghai Futures Exchange aluminum futures settled higher at RMB 19,500 today. Analysts believe aluminum prices might fluctuate within a limited range and will not fall heavily considering the low stockpiles.

London Metals Exchange's three month aluminum price closed at $2,730 a tonne yesterday, up $35 from the previous day.

© InterFax-China 2006. For more intelligence on Chinese metals and mining, click here or call Alison Crawford in London on +44 (0) 20 7256 3919.

Ormet Searches for New Chief Executive

WBOY-TV, WV Thursday, February 1, 2007 ; 06:00 AM

Officials want successor to have experience in the aluminum business and willingness to work together with union.

Story By Linda Harris

The search has begun for a new chief executive officer at Ormet Corp., the Ohio Valley aluminum company rebounding from a bitter, 18-month work stoppage.

Ken Campbell, the outsider brought in to heal the rift between labor and management and restore production, has been named chairman of Ormet's board of directors. The promotion leaves Campbell's old job as chief executive officer open.

Campbell said he didn't have any experience in aluminum production when he came to Ormet, so he had to rely on the expertise of a former manager who came out of retirement to oversee the restart. He said he'll expect his successor to have more than a passing knowledge of the aluminum business.

"We need to get a CEO who knows how to actually operate the plant," Campbell said. "(And) it has to be somebody I have confidence will continue to run the plant and deal with people the way I have ... It's got to be somebody who buys into my approach, somebody who is willing to work together. We've come a long way as a company, and I'm not going to let that go away."

Campbell said it could be April or May before the new CEO is on site. By that time all of Ormet's potlines should be up and running, all its workers recalled and even some new ones hired.

"My thing is turning around companies, making them work better when they're broken," Campbell said. "They all need something different. In this case, the problem was the union fellows and management weren't communicating as effectively as they might. I knew going in that was the thing I needed to get fixed for the place to work better. As it turned out, it wasn't really that hard to do...I don't think I did anything most people wouldn't have done."

Campbell said he never expected to be at Ormet for more than a year. The fact that the plan has changed and he'll be staying on as chairman and hiring a new CEO is a plus -- particularly since his job originally was just to get the plant ready to sell.

"If the company was being sold to somebody else, which was a likely possibility before, then people would have to wonder," he said. "But in this case, the owner decided he didn't want to sell the business because he likes (it)."


Oswego Palladium Times, NY 01-Feb-2007

By COLIN KENNEDY, Staff Writer

Novelis Inc., the worldwide aluminum products maker, is considering selling the company to the Indian-based Aditya Birla group for a multibillion dollar bid, the Associated Press reports.

Late last week Novelis Inc. confirmed that it was holding talks about the potential sale, although the company did not confirm any possible buyers and did not confirm a definite transaction. Nonetheless, shares jumped 24 percent on the news.

An Indian newspaper reported the group could pay $5 billion to $6 billion for the global leader in aluminum rolled products and aluminum can recycling.

The Aditya Birla group, a multinational conglomerate worth roughly $9.7 billion, is already involved in the production of aluminum and also produces copper, cement, chemicals, insulators, fertilizer, textiles, software, telecommunications and insurance. The group is also concerned with the social and economic development of the communities in which it operates, lending its hand to education, health and family welfare, and infrastructure development.

Novelis Inc. has a plant in Osewgo that employs 700 people, according to its Web site. The Atlanta-based company began operations in the Oswego area under the name Alroll in 1963. In 1965 the company was renamed Alcan, which it remained until two years ago when it became Novelis. In 2003, company officials said revenues were $6.2 billion.

No information on the potential sale has been posted yet on the Novelis Web site ( or the Aditya Birla Web site (

Alcan predicts aluminum surplus in 2007, MA February 2, 2007

By Dave Hannon

Supply increase could bring aluminum prices down

Aluminum producer Alcan is predicting a global surplus of aluminum this year which could bring aluminum prices down over the course of 2007.

In its recent earnings statement, Alcan said aluminum prices gained 30% in the fourth quarter of 2006, more than making up for a drop in shipments.

"For 2007, world primary aluminum consumption is forecast to increase by approximately 6.7% (6.8% in 2006), while production from new capacity and restarts is expected to increase world supply by about 7.8% (6.3% in 2006)" resulting in a small surplus of approximately 200,000 tons, about 0.5% of estimated total world supply. In 2006, there was an estimated deficit of 160,000 tons which pushed prices up.

Alcan also said it is seeing strong demand for aluminum for the cable and electric-conductor markets as industrial consumers use more of the metal as a substitute for copper. Copper prices have more than tripled in the past four years.

Alcan also said it plans to boost its supply of alumina after prices gained last year.

© 2007, Reed Business Information, a division of Reed Elsevier Inc. All Rights Reserved.

IAMGOLD seeking 'amicable' solution to bauxite sale

Stabroek News, Guyana - Friday, February 2nd 2007

-says will incur US$30M loss

Amid signs that the government is unhappy with a proposed deal and is trying to attract Russian investors to take over, IAMGOLD yesterday said it wants an "amicable" resolution to the sale of the Linden bauxite operations and argued that it will incur a loss of over US$30M on conclusion of the transaction.

In a press release issued yesterday through Omai Bauxite Mining Inc (OBMI), IAMGOLD which acquired 70% of the entity when it took over Cambior Inc last November, said Cambior had informed government of its intention since June 2006 to dispose of its interest in the loss-making operation.

Canada-based IAMGOLD said that when OBMI's proposed sale to Bosai Minerals Group Co Ltd of China was made known to government through the National Industrial and Commercial Investments Ltd (NICIL) late last year, the government said it was not provided with sufficient information to arrive at a considered decision.

As the 30% shareholder in OBMI, government is required, under the shareholders' agreement it signed with Cambior, to either exercise its right of first refusal and purchase the 70% within 30 days or waive the right. It has done neither as yet having asked for an extension to the January 22 deadline to February 12 to which IAMGOLD and Bosai have agreed.

"OBMI acquired a financially troubled operation at Linden. Subsequently, OBMI invested approximately US$70 million in plant and working capital in this operation, which continues to incur operational losses," the release said.

"IAMGOLD has advised the government that its primary expertise and focus is on the development of its gold assets in Guyana. IAMGOLD is prepared to commit further resources to the development of those assets. IAMGOLD, however, has no interest in funding the continued operations of the bauxite assets held through OBMI," explained the release.

Apart from OBMI, IAMGOLD also acquired Omai Gold Mines Ltd, where underground exploratory work is ongoing. Omai Gold officially closed its operations in 2005, but still has some 100 employees on site for exploration.

The release further noted that since June 2006 the government was informed that the company was preparing to sell its interest because of the losses incurred. "The government and NICIL were kept fully informed of the worldwide search conducted by the investment bank of BMO Capital Markets for an investor ready to continue the operations of OBMI."

The release added that at all times NICIL and the government had access to the same information, that was made available to the companies to facilitate due diligence in the bidding process. "This process was at all times transparently conducted, with full disclosure and publicly reported in the media."

The government has expressed concern with regard to the future productive use of Block 37, an ore reserve. And IAMGOLD said while it "understands the government's concern… it should be noted that Block 37 is an integral part of the Shareholders Agreement between Cambior and NICIL and is a part of the share purchase agreement with Bosai Minerals."

In addition, the release explained that OBMI has complied with its obligations regarding the Block 37 Prospecting Licence (PL) and Cambior relinquished to the government, rights held for two other properties at Bamia-Moblissa and Tiger Jump.

"It is IAMGOLD's understanding that Bosai has given the government every assurance of its intention to fully utilize Block 37 in accord with its obligations under the PL."

The release also explained that BOSAI has issued a press statement committing to a feasibility study and the possible investment of US$1 billion to develop and integrate the bauxite operations. There are concerns locally that Bosai, whose output has competed against Guyana's bauxite on the international market, could simply sit on Block 37 so that its production outside of Guyana garners a higher price.

The release said, "IAMGOLD is seeking an amicable and honourable solution to the present situation which will inure to the good of Guyana."

Bosai Minerals told Stabroek News on Saturday that it was committed to conducting feasibility studies toward an alumina refinery or aluminium smelter in two phases.

Currently, President Bharrat Jagdeo and Head of NICIL, Winston Brassington are in Russia and have held talks with RUSAL the aluminium giant on its plans to put up an alumina plant here. The government had insisted in a press conference before leaving for Russia that whichever company takes over OBMI must utilize Block 37 for not only producing bauxite but for alumina production. RUSAL had made a bid for OBMI but was not selected as the preferred bidder by IAMGOLD. This Russian aluminium company operates in Guyana through its subsidiary Bauxite Company of Guyana Inc in Berbice. It is believed that during Jagdeo's trip efforts would be made to mobilize a counter-offer to Bosai.

IAMGOLD's disclosure that OBMI had invested US$70M in plant and working capital in the financially troubled operations at Linden will also be viewed with great interest locally. This was the first time that a specific investment figure was publicized. There had been concerns that IAMGOLD was on the verge of making a windfall from the sale of the 70% stake to Bosai. Cambior had acquired the 70% stake from government for US$5M in cash, US$5M in equipment and the promise of significant investment. IAMGOLD intends to sell the 70% stake to Bosai for US$46M.

RusAl Sees Stable Aluminum Market

The Moscow Times, Russia - Monday, February 5, 2007. Issue 3589. Page 9.


NEW YORK -- Russian Aluminum, the third-largest primary aluminum producer in the world, expects the 2007 aluminum market to be nearly balanced, with demand remaining robust and no major supply issues on the horizon.

"My view is that the [aluminum] market will be relatively in balance, which is kind of boring. There's not going to be any big surplus. All indications we've seen tell me demand will be firm, supply will meet demand, and no major changes," said Peter Finnimore, RusAl's global head of primary metal sales.

"All the analysts' reports I read say plus or minus 200,000 tons, which basically tells me it's in balance. In a 35-million-ton market, 200,000 tons is neither here nor there."

RusAl's pending merger with smaller Russian rival SUAL is set to close in April and would boost the aluminum maker's total primary output to 4 million tons per year.

Villagers in Trinidad and Tobago battle Alcoa's plans

Miami Herald, FL Sun, Feb. 04, 2007

Villagers in Trinidad and Tobago are vowing to fight government plans to allow U.S.-based Alcoa to build an aluminum smelter on a man-made island.


OTAHEITE, Trinidad - When Ramos Ramdeo gazes at the water off this southern fishing village, he sees more than the crystal blue color, choppy waves and one of the world's richest shrimp spawning grounds. He sees his livelihood.

It's the kind of livelihood that has defined fisherman Ramdeo's existence for much of his 60 years -- and the kind that does not include an aluminum smelter and other industrial plants on a man-made, 3,500-acre island offshore.

That's what Prime Minister Patrick Manning has proposed after growing protests and a lawsuit forced him to abandon plans to put the smelter in the nearby Cap-de-Ville community in Chatham. And that's what residents in this seaside village are vowing to fight.

''The people who are down in Chatham, they don't want it. They were willing to lay their lives down on the line. It is not a good thing. We are together with them,'' Ramdeo said as he peered out at the spot where the industrial island would be built.

Otaheite, a village about 45 miles southwest of the capital city of Port-of-Spain, has become the latest battlefield in the struggle over Manning's desires to create a modern industrial state by allowing U.S.-based aluminum giant Alcoa to build a $1.5 billion smelter on this twin-island Caribbean nation. Manning and his ruling People's National Movement government argue that the Alcoa plant, and a less controversial one being developed for the nearby La Brea community, will create hundreds of new jobs, allowing the already industrialized nation to further diversify its oil and natural gas-based economy.

Already one of the wealthiest countries in the Caribbean with 12.6 percent economic growth last year and per capita income of $19,700, according to the CIA World FactBook, Trinidad and Tobago is a leading provider of natural gas to the United States.

''We are not ceasing our industrial development. We are going full pace ahead,'' Manning said last week at the eighth annual meeting of the African Union in Ethiopia.

''An aluminum smelter is expected to start construction this year, and we will have two in operation by 2012,'' he added.

But environmentalists say the negative impact of Alcoa's smelter's emissions and solid wastes residue will far outweigh any positive economic gains.

For months they have led a barrage of bruising protests that have shut down roads and often turned into shouting matches.

Alcoa spokesman Kevin Lowery said the proposed smelter would be operated on the same environmental, health and safety standards as those applied in the United States and other countries where the company now owns or operates about 20 smelters.

Alcoa estimates the project will add $100 million annually to Trinidad's economy.

Alcoa says there are residents in favor of the plant, but they're being drowned out by opponents.

''We spend a lot of time, effort and resources to do things the right way,'' said Lowery, noting that the company has set up a separate Trinidad and Tobago page on its website to explain its project.

Alcoa halted all feasibility studies after Manning's announcement and is currently looking at multiple sites. Lowery said it remains committed to ``the shared objective of putting aluminum facilities there.''

The smelter debate also has leaked into politics in an election year in this deeply polarized nation, where the population of 1.3 million is almost equally split between Afro-Trinidadians and Indo-Trinidadians. Opposition groups have used the controversy to try to portray Manning as being out of touch with the people.

'They cannot seem to understand the word `No.' 'No Smelter,' '' said Peter Vine, an agricultural physicist and lecturer at the University of the West Indies here, who is among the scholars, musicians, farmers and now fishermen fighting to keep the smelter out of Trinidad and Tobago. ``We don't want Alcoa. End of discussion.''

In abandoning Chatham as a potential site, Manning said last month that he was planning to accelerate the ``development of a new industrial estate, offshore Otaheite Bank, from which aluminum production can now be pursued together with other industrial plants.''

The announcement sent shock waves through Otaheite, a quaint fishing village where customers come to buy fresh fish and residents say that some 3,000 individuals make their living off the sea. Until Manning's announcement, most were spectators in the debate on the merits of the smelter.

But in a matter of hours, residents began mobilizing, erecting a ''No Smelter'' tent at the entrance to the fishing village. They wrote petitions they plan to send to President Maxwell Richards and put up huge banners saying ''Protect Our Environment!'' and ``We Deserve Better Say No To Smelter.''

''I work for a company that could make money off this thing, and they don't want it,'' Ramnarace Toolsie, 56, said as he walked in a drizzling rain to sign one of the petitions. ``They want the welfare of the people,''

So far the group averages about 100 signatures a day, a volunteer said. Some belong to people like Toolsie, who don't live in Otaheite but see the smelter as a nationwide issue. Others belong to locals like Dale Ball, a 24-year-old fisherman who sells in the market and fears the man-made smelter island will destroy his community.

''When all that chemicals go out into the sea, we won't have any fish,'' Ball said, sitting on a crate, the stench of fresh fish permeating the air while other young men hawked the day's catch: shark, shrimp, kingfish.

Suresh Seepersad, a spokesman for the Otaheite Fishing Committee, said the community needs an investment in its fishing industry -- not a smelter facility.

''That is where we're making a living. That is where the shrimp are breeding. When they do that, what will they do with us?'' said Seepersad, who wants the government to build a fish processing plant so that the nation can export more seafood.

The president of the state-owned National Energy Corp., Prakash Saith, said in a brief telephone interview that construction of the 341,000-metric-tons-per-year smelter, powered by Trinidad's own natural gas, ``is a very positive project for the country in terms of the rates of return for the country.''

But his arguments have fallen on deaf ears in Otaheite, a community of wooden shacks, two-story concrete homes and a soft-drink bottling plant where residents now spend their days selling fish and attending anti-smelter rallies.

''The desires of the few can't outweigh the desires of the many,'' said local businessman Reynold Budhai, 62.

''It's our livelihood on a daily basis. This is a threat to our livelihood, our very existence,'' he added.

Aluminium giant straddles the world

Mineweb, South Africa - Feb 2, 2007

By: John Chadwick

LONDON ( --RUSAL, SUAL Group and Glencore have welcomed the decision by the European Commission to grant clearance for the transaction to create United Company RUSAL. The enlarged company, which will consolidate RUSAL, SUAL and alumina assets of Glencore will be the world's biggest aluminium and alumina producer. Notification of the approval was announced by the European Commission on February 1. The only seeming major hurdle now to be overcome would be the proposed movement of domicile from Russia.

Under the terms of the merger agreement, RUSAL's shareholder will own 66% of the new company, with SUAL's shareholders owning 22% and Glencore 12%. The combined company owns bauxite mining, alumina refineries, aluminium smelting and foil production facilities and becomes the world’s largest aluminium and alumina producer, employing more than 110,000 people in 17 countries on five continents. It will account for some 12.5% of global aluminium output and 16% of global alumina production. Annually it will produce about 4 Mt of aluminium and 11 Mt of alumina.

Commenting on the EC’s approval of the merger agreement, RUSAL Chief Executive, Alexander Bulygin said: "The EC's approval of our merger agreement is a major milestone towards completing the transaction. The transaction has a compelling industrial logic and offers significant synergies for further growth."

The unified company will include RUSAL’s following assets: Bratsk, Krasnoyarsk, Novokuznetsk, Sayanogorsk Aluminium Smelters, Achinsk Alumina Plant, Nikolaev and Boksitogorsk Alumina Refineries, Friguia Alumina Plant (Guinea), Compagnie des Bauxites de Kindia (Guinea), Bauxite Co of Guyana, a stake in the Queensland Alumina Refinery (Australia), Eurallumina (Italy) as well as ARMENAL, SAYANAL and a cathode plant in China.

SUAL will contribute Irkutsk, Urals, Kandalaksha, Bogoslovsk, Nadvoitsy, Volgograd and Volkhov Aluminium Smelters, Zaporozhye Aluminium Combine, Pikalevo Alumina Refinery, SUBR, Urals Foil, as well as Silicon, SUAL-Silicon-Ural and SUAL-PM. Glencore will contribute the following alumina refineries: Aughinish in Ireland, Windalco and Alpart in Jamaica and Eurallumina in Italy, along with the Kubikenborg Aluminium Smelter in Sweden.

RUSAL ( is the world’s third largest primary aluminium producer, providing primary aluminium and value-added casthouse products to customers in 50 countries. Headquartered in Moscow, with operations in nine regions of Russia and 13 countries globally, RUSAL now accounts for 75% of aluminium production in Russia and 10% internationally. RUSAL has 47,000 employees and was established in March 2000 through a merger of several largest aluminium smelters and alumina refineries in the CIS.

SUAL Group ( is a vertically integrated company, one of the world’s 10 largest aluminium producers. It combines enterprises that extract bauxite, refine alumina and produce primary aluminium, silicon, aluminium semi-finished and finished products. SUAL’s enterprises form a full production cycle, from bauxite extraction (over 5.4 Mt/y), alumina refining (about 2.3 Mt/y) and primary aluminium production (more than 1 Mt/y) to the manufacture of aluminium semi-finished and finished products.

Glencore ( has global activities in the smelting, refining, mining, processing, purchasing, selling and marketing of metals and minerals, energy products and agricultural products.

Further information about the transaction can be found at

Rain Commodities bids C$437M to nab full-interest in Great Lakes Carbon

Brandon Sun, Canada - Monday, February 5th, 2007, Canadian Press

TORONTO (CP) - Rain Commodities Ltd. is bidding $437 million to acquire the remaining 80 per cent of coke producer Great Lakes Carbon Income Fund (TSX:GLC.UN) it doesn't already own in the largest takeover bid yet for a Canadian-based company by an investor from India.

Rain is bidding $11.60 per unit for the Toronto-based fund, which holds a 74 per cent interest in Great Lakes Carbon USA Inc., the world's largest producer of anode and industrial grade calcined petroleum coke, used in producing aluminum and industrial materials.

Including assumed debt and Rain's existing stake, the proposal places an enterprise value of $767 million on Great Lakes Carbon, which operates in Port Arthur, Texas; Enid, Okla.; Baton Rouge, La.; and La Plata, Argentina.

The offer's price was below Great Lakes' 52-week high of $11.83 on the Toronto Stock Exchange, which had some investors questioning the deal.

"This seems like a steal for the buyer based on the fundamental structure of this business and profitability," wrote one user on the StockHouse message board.

"I feel we unitholders are getting the short end of this deal - big time."

Great Lakes CFO Ronald Statile declined to comment on the offer. On Monday afternoon Great Lakes Carbon units traded up up 92 cents at $11.57.

Discussions between Great Lakes Carbon and Rain have been public since last October, when Great Lakes confirmed rumours that both sides were talking. In March, Rain purchased a near 20 per cent interest in the company from American Industrial Partners Capital Fund II for about $11.99 per unit, according to Statile.

RBC Capial Markets analyst Dirk Lever said the price of the current offer "seems reasonable."

"Could it be higher? I suspect so, it is their first offer. It just depends +how much the marketplace pushes them for it," he said.

Great Lakes Carbon serves primary aluminum customers such as Alcan Inc. (TSX:AL), BHPBilliton Ltd. and DuPont, and relationships between the aluminum industry and companies like Great Lakes can last for decades, Lever said.

"The aluminum smelters need very specific specifications of (calcined petroleum coke) to get the quality of aluminum they're producing. So they're unlikely to try and buy it from an unproven source," he said.

"It's a very specialized industry and they have a very well-established client base."

Rain's offer carries a break fee of $14.5 million payable to Rain if another offer is accepted. It follows a review of the trust's alternatives for maximizing unitholder value.

Both companies target a closing date at the end of the first quarter, subject to approval by two-thirds of Great Lakes Carbon unitholders.

Great Lakes, which reports in U.S. dollars, posted a third-quarter profit of US$8.8 million, compared to US$3.2 million a year earlier. Sales for the period were US$117 million, up from $104.3 million.

Rain Commodities, a holding company listed on the Mumbai Stock Exchange, has a publicly listed affiliate, Rain Calcining Ltd., described as Asia's largest producer of anode and industrial grade calcined petroleum coke.

Re-energized potline increases stability at Alcoa plant

Reliable Plant Magazine, OK - 05-Feb-2007

Alcoa Intalco Works aluminum smelter on February 5 produced the first molten metal from a re-energized potline that will increase production at the Ferndale (Wash.) operation by 7,500 metric tons per month.

The second potline was re-energized on February 4, only four months after the project was announced in September 2006. When the restart is complete, the smelter will be operating at two-thirds capacity, producing approximately 180,000 metric tons of aluminum per year.

Plant manager Mike Rousseau said the potline restart was an important milestone for the facility’s employees, their families and the local community.

"This plant has had a turbulent history, but the restart offers us all stability and a platform for a secure future. I congratulate everyone involved for their support and contribution to bringing this project to fruition," he said.

More than 140 employees have been added to the smelter site since the announcement, bringing the total number of Alcoa personnel to approximately 575. Approximately 200 contractors are also currently employed on site.

"Integrating so many new employees can be a challenge, but I am pleased to say that we have done it safely and ahead of schedule. We are providing an estimated 360 hours of safety and skills training for each new employee and that’s just the beginning of our long-term training investment," Rousseau said.

The smelter has not operated two potlines since April 2003. The restart was made possible due to favorable market conditions, as well as benefits from the Bonneville Power Administration (BPA) and the State of Washington, and a revised labor contract, secured in 2006.

The five-year BPA agreement, along with favorable market conditions, enables the viable purchase of power to run the facility from the open market until 2011. Alcoa views this agreement as a bridge to a longer-term power contract in 2011. It is investing in facilities and employees for this re-start on the assumption that an economical longer-term contract will be offered by BPA following its formal record of decision later this year.

BHP Studies Bauxite Mine, Aluminum Smelter in Congo (Update1)

Bloomberg - February 6, 2007 11:29 EST

By Stewart Bailey and Antony Sguazzin

Feb. 6 (Bloomberg) -- BHP Billiton Ltd., the world's largest mining company, is considering digging a bauxite mine and building an aluminum refinery in the Democratic Republic of Congo to exploit potential supplies of cheap hydropower.

The company, based in Melbourne, is studying the deposit in the country's southwest Bas-Congo province, near the Inga hydropower station on the Congo river, Benedict M'Poko, Congo's ambassador to South Africa, said today in an interview at the Mining Indaba conference in Cape Town. He gave no further details.

BHP Billiton already produces aluminum at refineries in South Africa and Mozambique, where it secured cheap supplies of power from Eskom Holdings Ltd. Now that utility's capacity is running short of demand, BHP Billiton is seeking new sources of power. It has turned to the Congo, which last year completed its first presidential election, five years after the end of a civil war that left 4 million dead.

The project would require a deepwater port and the rehabilitation of the Inga plant, M'Poko said. The government is seeking investors to help finance the upgrade of the Inga I and II turbines, which together generate 1,800 megawatts of electricity. It's also studying the construction of a third phase to provide as much as 3,500 megawatts and a fourth, called Grande Inga, which could generate 40,000 megawatts for supply to most of southern and central Africa.

Illtud Harri, BHP Billiton's spokesman, wasn't immediately available when telephoned by Bloomberg.

Aside from its traditional exports of gold, diamonds and copper, Congo's government is trying to stoke interest in prospecting for other minerals, like bauxite, methane gas and iron ore. An iron-ore deposit has been found in the country's east, and ore could be exported through the port of Nairobi if a rail link is repaired and upgraded, M'Poko said.

To contact the reporter on this story: Stewart Bailey in Johannesburg

Alcoa Named One of the World’s Top Low Carbon Pioneers

RosBusinessConsulting, Russia - 07-Feb-2007

NEW YORK--Alcoa announced today that it ranked #3 on a new international listing of the world’s top 50 low-carbon pioneers published by CNBC European Business, a monthly business publication affiliated with CNBC Europe. Companies were ranked on how they have connected climate change to their company’s operations.

Alcoa was the only metals company on the list and the top ranked of the three major U.S. corporations on the list (DuPont #11, 3M #22). Selection was based on multiple peer reviews, interviews and extensive research conducted by Thomson Financial and Innovest Strategic Value Advisers. The final list was compiled on the basis of the degree to which the company "had taken a courageous or ground-breaking stance on climate change during the past decade."

In selecting Alcoa, the publication said: "Any energy savings pass to the bottom line where aluminum production is concerned. But Alcoa has gone above and beyond: its initial goal was to achieve a 25% reduction in worldwide direct greenhouse gas emissions by 2010 from a base year of 1990, but it achieved this goal in 2003."

"We know we must address climate change," said Alcoa Chairman and CEO Alain Belda. "Though the challenge is significant, I believe we can all grow and prosper in a greenhouse gas constrained world. Actually, I believe there is no other option."

A founding member of the US Climate Action Partnership, Alcoa is also a member of the Dow Jones Sustainability Index for 2006/07 and was named one of the Global 100 Most Sustainable Corporations in the World by Innovest Strategic Investors and Corporate Knights, Inc. at this year’s Davos World Economic

Kaiser Aluminum Issues Statement on Former Board Member George Becker

Business Wire (press release), CA - Feb 5, 2007

FOOTHILL RANCH, Calif.--(BUSINESS WIRE)--Kaiser Aluminum (NASDAQ:KALU) today issued a statement attributed to President and Chief Executive Office Jack Hockema with regards to former board member George Becker, who died Saturday in Gibsonia, Penn.:

"We are deeply saddened at the passing of George Becker this last weekend. George was an outstanding individual and leader who transformed the United Steelworkers and was also a trusted advisor as a member of Kaiser Aluminum’s board of directors. We would like to extend our sincerest appreciation for George’s work and our condolences to both his family and the USW.

"In light of this news, we intend to work closely with USW representatives to select George’s replacement to the Kaiser Aluminum board of directors as quickly as possible."

BHP Billiton to Buy Into Guinean Bauxite Project

Resource Investor, VA 07 Feb 2007

By Gareth Tredway

CAPE TOWN (I-Net Bridge) -- Following news of BHP Billiton's [NYSE:BHP] interest in a very early stage DRC bauxite project, Marius Klopper, an executive director, says his company is also looking at a stake in Global Alumina's [TSX:GLA-U] Republic of Guinea-based deposit containing the same commodity.

Bauxite is aluminium ore which is smelted into alumina and then refined into aluminium.

The company already produces aluminium in Africa and more specifically in South Africa and Mozambique.

Speaking at his company's end-December interim results presentation, Klopper said the deal in Guinea would see his company become the "executor and a shareholder in the project" itself, which involves a potential mine and alumina refinery.

Klopper described the deposit's size as a "couple of billion tonnes" and said a R7-8 billion ($976 million to $1.15 billion) investment decision would be made in the future on the project.

According to the Global Alumina website, a 2.8 million tonnes per annum aluminium refinery is planned, with the potential to boost this to 4mtpa, with first production in 2009.

The company has a heavy exploration focus on Africa, including diamonds in Angola and mineral sands in Mozambique. Klopper said that more than half of BHP Billiton's exploration spend is in Africa.

"In terms of copper prospectivity, we are probably the largest landowner in the DRC," said Klopper.

In South Africa, he said the Klipspruit coal project, which would cost about $250-$300 million to build, was just recently added to the company's project pipeline, as a feasibility study stage project.

Klopper was speaking at a briefing in Cape Town on the company's interim results released earlier in the day.

For the half year to end-December BHP Billiton reported a record interim attributable profit of $6.2 billion, up 41% on the comparable period a year earlier.

An increased dividend of 20 US cents per share was declared, as well as another $10 billion share buy back program.

Klopper said if all of the company's distributions were added up since it merged with BHP Billiton earlier in the decade, the full market capitalisation at that time would already have been paid back.

BHP Billiton also said today that it has achieved empowerment ownership credits on its South African energy coal assets that exceed the country's legislative requirements.

At a briefing in Cape Town on the company's end-December interim results announcement, executive director Marius Klopper said that sales from coal assets, including the Eyesizwe transaction a number of years ago and the upcoming Optimum sale, will put the company's coal empowered ownership of production at between 30%-40%.

Under South Africa's mineral law 26% of a company's production must be under the control of previously disadvantaged South Africans by 2014, with 15% required by 2009.

© 2007 I-Net Bridge. All rights reserved.I-Net Bridge, Tel: +27-11-280-0644

Xinfa exercises option to acquire 10% of Cape Alumina from Metallica for $4.625 million.

Mineweb, South Africa - '07-FEB-07 10:57'


A major Chinese aluminium producer will acquire a 10% stake in Queensland company, Cape Alumina Pty Ltd, in a $4.6 million deal with Metallica Minerals Limited (ASX: MLM).

Metallica Minerals Managing Director, Mr Andrew Gillies, announced today that the company has been formally advised by Chiping Xinfa Huayu Alumina Co Ltd (Xinfa) that it has elected to exercise its option to acquire 10% of the issued capital in Cape Alumina Pty Ltd from Metallica. Metallica, which will retain a 40% stake in Cape Alumina after the Xinfa transaction, will receive total payments of $4.625 million, including the option fee of $250,000 received on 24 August, 2006. Xinfa will also today make a second payment to Metallica of $250,000 and pay the balance of $4.125 million within 90 days.

Mr Gillies welcomed Xinfa’s investment in Cape Alumina, which recently published a maiden JORC- compliant bauxite ore resource for its Wenlock project, located approximately 60 kilometres north-east of Weipa in Cape York, Queensland.

Cape Alumina Chief Executive, Dr Paul Messenger, said Xinfa’s presence as a shareholder in the company was a vote of confidence in the emerging bauxite supplier. "Cape Alumina’s close link with Xinfa may also lead to a major off-take agreement for bauxite eventually produced by Cape Alumina. Xinfa is one of the largest bauxite importers in China, which it uses to feed its Chiping alumina refinery and aluminium smelter complex in Shandong Province, eastern China," Dr Messenger said. Last year, Xinfa imported approximately 5 million tonnes of bauxite, while official statistics show that China imported 9.7 million tonnes of bauxite in 2006, a figure that is expected to grow further in 2007 and beyond.

Due to its close geographical proximity, stable government, political and economic ties Australia is highly regarded as a trustworthy and reliable industrial supplier to China. Cape Alumina is well positioned to capture part of the expanding Chinese market for bauxite imports as it is the only independent Australian company with significant undeveloped bauxite resources under tenure, Dr Messenger said.

Cape Alumina anticipates a number of its other 16 exploration permit applications in Cape York to be granted in the first half of 2007 with exploration drilling programmes currently being planned and a Scoping Study into mining, beneficiation and export of bauxite in progress.

Media contacts:

Mr Andrew Gillies

Managing Director, Metallica Minerals Ltd

Ph: (07) 3891 9611, Mob: 0416 137 556

Dr Paul Messenger

Chief Executive Officer, Cape Alumina Pty Ltd

Ph: (07) 3891 9611, Mob: 0400 065 547

Century Alu closer to Congo mine rights

Houston Chronicle, TX - Feb. 8, 2007, 1:48PM

MONTEREY, Calif. (AFX) - Century Aluminum Co. moved closer Thursday to getting the rights to establish an aluminum business in the Republic of the Congo.

The California company signed a memorandum of understanding with the Congolese government to build an aluminum smelter, refinery and bauxite mine and they have tentatively identified Pointe Noire as a potential site in the small central African country.

The deal specifies a minimum commitment of 500 megawatts of gas-generated electrical energy.

'We believe that the Republic of the Congo has all of the ingredients necessary to sustain a profitable aluminum industry,' the company said in a statement.

It did not outline a time frame within which it expects to sign a definitive agreement and start construction.

Century Aluminum shares fell 45 cents to $44.73 in afternoon trading on the Nasdaq.

Copyright 2006 Associated Press.

Hindalco to acquire Novelis for $6.0 Billion

India PRwire (Press Release), India - 11-Feb-2007

Following the transaction, Hindalco, with Novelis, will be the world's largest aluminum rolling company, one of the biggest producers of primary aluminum in Asia, and India's leading copper producer.

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Hindalco Industries Limited, India's largest non-ferrous metals company, and Novelis Inc., the world's leading producer of aluminum rolled products, today announced that they have entered into a definitive agreement for Hindalco to acquire Novelis in an all-cash transaction which values Novelis at approximately $6.0 billion, including approximately $2.4 billion of debt. Under the terms of the agreement, Novelis shareholders will receive $44.93 in cash for each outstanding common share.

Based in Mumbai, India, Hindalco is a leader in Asia's aluminum and copper industries, and is the flagship company of the Aditya Birla Group, a $12 billion multinational conglomerate, with a market capitalization in excess of $20 billion. Following the transaction, Hindalco, with Novelis, will be the world's largest aluminum rolling company, one of the biggest producers of primary aluminum in Asia, and India's leading copper producer.

Mr. Kumar Mangalam Birla, Chairman of the Aditya Birla Group, said, "The acquisition of Novelis is a landmark transaction for Hindalco and our Group. It is in line with our long-term strategies of expanding our global presence across our various businesses and is consistent with our vision of taking India to the world. The combination of Hindalco and Novelis will establish a global integrated aluminum producer with low-cost alumina and aluminum production facilities combined with high-end aluminum rolled product capabilities. The complementary expertise of both these companies will create and provide a strong platform for sustainable growth and ongoing success."

Acting Chief Executive Officer of Novelis, Mr. Ed Blechschmidt, said, "After careful consideration, the Board has unanimously agreed that this transaction with Hindalco delivers outstanding value to Novelis shareholders. Hindalco is a strong, dynamic company. The combination of Novelis' world-class rolling assets with Hindalco's growing primary aluminum operations and its downstream fabricating assets in the rapidly growing Asian market is an exciting prospect. Hindalco's parent, the Aditya Birla Group, is one of the largest and most respected business groups in India, with growing global activities and a long-term business view."

Mr. Debu Bhattacharya, Managing Director of Hindalco and Director of Aditya Birla Management Corporation Ltd., said, "There are significant geographical market and product synergies. Novelis is the global leader in aluminum rolled products and aluminum can recycling, with a global market share of about 19%. Hindalco has a 60% share in the currently small but potentially high-growth Indian market for rolled products. Hindalco's position as one of the lowest cost producers of primary aluminum in the world is leverageable into becoming a globally strong player. The Novelis acquisition will give us immediate scale and a global footprint."

The transaction has been unanimously approved by the Boards of Directors of both companies. The closing of the transaction is not conditional on Hindalco obtaining financing. The transaction will be completed by way of a plan of arrangement under applicable Canadian Law. It will require the approval of 66 2/3% of the votes cast by shareholders of Novelis Inc. at a special meeting to be called to consider the arrangement followed by Court approval. The transaction is also subject to certain other customary conditions, including the receipt of regulatory approvals. The transaction is expected to be completed in the second quarter of 2007.

Trinidad to declare new water pollution rules

Mycaribbeannews, FL Feb 11, 2007

PORT OF SPAIN, Trinidad – Within two weeks, the local Environmental Management Authority (EMA) will officially launch new water pollution rules for businesses and manufacturers operating on the island, as the agency plans to bring pollution levels down to meet the newly adopted World Health Organization standards.

EMA Chairman, Dr John Agard said the law which received parliament and cabinet approval in December, will be enforced and administered by the agency. Addressing questions raised by participants at an aluminum industrialization conference hosted by the University of the West Indies (UWI) Engineering Faculty on Saturday, the EMA chief said the agency is investing in developing and purchasing the capabilities required to ensure that the environment is protected, so there can be balanced growth together with industrialization.

He said manufacturers and businesses that release pollutants into the water ways will have six months to register with the agency, and will be required to submit a plan for dealing with polluted affluent if it is found to be above accepted international standards.

"It will be a criminal offense if businesses do not register with the EMA and declare their activities. If a business fails to comply the business can be shut down, the owners can face jail sentences and fines of up to TT$10,000 per day, until their operations are in compliance," he added.

Agard said the new Water Pollution Rules are only the first part of a larger plan for managing pollution in the country and more rules governing air pollution, coastal protection and other environmental issues will soon be released and declared law.

"This is the first part of a series of new legislation that will either be introduced to the parliament or updated, to account for new business activity and new monitoring technology. The strategy is to have an integrated legislative framework that acknowledges that pollution is multi-dimensional and different kinds of pollutants can impact on the environment in different ways. We feel that these issues needed to be addressed and our strategy takes this into account.

The Trinidad and Tobago Cabinet also approved an expansion of the EMA budget and staff from 70 to 200 by the end of 2007 so the agency can respond and acquire the new capacity required for improved monitoring and to acquire specialized expertise. Funding will also be expanded to facilitate training, new monitoring and testing equipment and to access the services of an internationally certified laboratory services such as the Caribbean Industrial Research Institute (CARIRI).

Dubal, Mubadala to Build Biggest Aluminum Smelter

MENAFN - Arab News - 12/02/2007

DUBAI, 12 February 2007 — Dubai Aluminum Company (Dubal), one of the world's largest aluminum producers owned by the Government of Dubai, and Mubadala Development Company, a wholly-owned investment and development vehicle of the Government of Abu Dhabi, have signed yesterday a joint venture agreement for the development of Emirates Aluminum (EMAL).

The joint venture agreement entails the construction and operation of a world class greenfield aluminum smelter complex in two phases. The first phase, with a cost of $5 billion, and the second phase, with an approximate cost of $3 billion, will produce a total output of 1.4 million tons capacity a year at the Khalifa Port and Industrial Zone in Abu Dhabi. This will make it the largest single site aluminum smelter in the world. The two entities will jointly develop, construct, own and operate the complex.

The first phase is expected to be operational in 2010. When completed and at full capacity, the new smelter will have a power plant capacity of 2,250 MW, with the required gas volume for the project already secured.

Plans are already under way to establish EMAL, the joint venture company with 50 percent stake each for Mubadala Development and Dubal. EMAL will oversee the operation and management of the new aluminum smelter.

The deal was signed by Khaldoon Khalifa Al-Mubarak, CEO and managing director, Mubadala Development and Abdullah Kalban, CEO, Dubal. Also present at the ceremony were Ahmed Humaid Al-Tayer, Dubal vice-chairman and members of the boards of both companies.

Emal first phase launch in 2010

Gulf News - 12/02/2007 12:00 AM (UAE)

By Shakir Husain, Staff Reporter

Dubai: Work on the $8-billion Emirates Aluminium (Emal) plant will begin in 2008 and the first phase will be ready in 2010, the project's promoters said yesterday.

Emal, in which Dubai Aluminium (Dubal) and Abu Dhabi investment firm Mubadala Development are equal partners, will be the world's largest single site aluminium smelter at its full capacity of 1.4 million tonnes in 2013.

The first phase will cost $5 billion and have a capacity of 700,000 tonnes per year.

The engineering, procurement and construction management tender is planned to be awarded by April and a financing deal is expected to be in place by the last quarter of this year, Dubal and Mubadala officials told reporters after signing a formal joint venture agreement. The front end engineering and design work has been completed and groundbreaking is expected in May.

"We are looking at a 70-30 debt to equity ratio. We are looking at various different structures, including Islamic finance," Mubadala chief executive officer Khaldoon Khalifa Al Mub-arak said.

Citi Group has been hired as financial adviser for the project. Al Mubarak said several financial institutions have shown interest in participating in possible debt instruments.

The smelter will have a gas-fired power plant of 2,250 megawatts. Al Mubarak said the Abu Dhabi government has committed to supply the required volumes of gas.

Emal aims to meet increasing global demand for aluminum, Dubal chief executive officer Abdullah Kalban said.

"Demand is growing at an annual rate of four cent or 1.3 million tonnes. This demonstrates the need to establish a smelter or two every year which is not happening in the world right now," Kalban said, adding that aluminium demand in the Middle East was growing at 11 per cent a year.

He said Emal will not adversely affect Dubal, which has a capacity of 860,000 tonnes and exports to Asia, Europe and the US. By the end of 2008 its output will increase by 60,000 tonnes.

"Our focus from now on will be on the Emal project," Kalban said.

Hindalco’s shares dive 14% after Novelis buy

Gulf Times, Qatar 13-February, 2007

MUMBAI: Shares of Hindalco Industries Ltd, India’s biggest aluminum maker, plunged the most in at least 16 years as investors bet company finances may be stretched after agreeing to buy Canada’s Novelis for more than $3.4bn.

Mumbai-based Hindalco on Sunday offered $44.93 in cash per share for the Atlanta-based aluminum-sheet maker, 17% more than the closing price on February 9. It will also assume $2.4bn of Novelis’s debt and borrow a further $2.8bn to finance the proposed acquisition.

Hindalco, part of the Aditya Birla Group run by Kumar Managalam Birla, follows India’s Tata Steel Ltd in buying rivals overseas as they expand.

There’s concern among some investors and analysts that companies such as Hindalco, which has outstanding bonds and loans worth Rs73bn ($1.65bn), may be overpaying. Novelis lost money in the third quarter.

"The price paid looks expensive," Rakesh Arora and Arijay Prasad, analysts at Macquarie Securities Ltd, said in a note to clients yesterday. Earnings at Novelis "have been depressed due to price caps in contracts which do not allow it to pass on high prices to customers."

Hindalco shares dropped Rs23.8, or 14%, to 149.45 on the Bombay Stock Exchange at the close. They earlier slumped as much as Rs25.15, or 14.5%.

The purchase "is a long-term strategic fit for Hindalco," Sunirmal Talukdar, the company’s chief financial officer, said yesterday.

Hindalco has arranged a bridging loan facility of $2.8bn for the takeover from UBS, ABN Amro and Bank of America Corp, he said.

UBS, Switzerland’s biggest lender, was the financial adviser to Hindalco on the takeover, while Torys, a Canadian law firm, was the legal adviser, Pragnya Ram, group executive president at the Aditya Birla Group, said yesterday. – Bloomberg

BHP Billiton, Rio Tinto eying Alcoa-report, UK - Tue Feb 13, 2007 4:14 AM GMT

By James Regan and Steve James

SYDNEY/NEW YORK (Reuters) - Mining giants BHP Billiton Ltd. (BHP.AX: Quote, Profile , Research)(BHP.L: Quote, Profile , Research) and Rio Tinto Ltd. (RIO.AX: Quote, Profile , Research)(RIO.L: Quote, Profile , Research) have drawn up separate plans for a $40 billion takeover of U.S. aluminium producer Alcoa Inc. (AA.N: Quote, Profile , Research), the Times of London reported.

The report revived long simmering speculation that one or more of the world's international miners, cashed up on the back of rocketing metals prices, would swoop on Pittsburgh-based Alcoa.

A takeover would give either Rio or BHP immediate access to millions of tonnes of bauxite, alumina and aluminium production, and possibly prompt a break-up of one of America's best known companies.

The report comes just days after India's top aluminium producer, Hindalco Industries Ltd.(HALC.BO: Quote, Profile , Research), agreed to acquire Novelis Inc. (NVL.TO: Quote, Profile , Research) (NVL.N: Quote, Profile , Research) in an all-cash deal that values the Canadian company at $3.5 billion.

"The big negative point on Alcoa is that it's got huge downstream elements to it, and that wouldn't be attractive," said Sydney-based Standard Bank analyst Richard Rossiter, referring to Alcoa's plants that make finished products such as rolled aluminium.

"The only thing that would make it would be if you dismembered it, but to what extent would dismembering it harm the business?"

Rio Tinto and BHP, which are listed in both Australia and London, refused to comment on the article, as did a spokesman for Alcoa, which has a market capitalisation of about $28.5 billion.

BHP executives featured prominently on the list, the newspaper said. It cited unidentified sources close to those on the list as saying Goodyear, who intends to leave by the end of the year, and executive directors Marius Kloppers and Chris Lynch had been approached or were being considered.

BHP, the world's biggest miner with a broad range of commodities, was understood to have done the groundwork on a bid for Alcoa, while Rio had considered a bid, but was not thought to have progressed as far as BHP, according to the Times.

In a research note on Monday, after India's Hindalco said it would acquire Novelis, Morgan Stanley's Liinamaa said merger and acquisition activity in the aluminium industry could serve as a catalyst for Alcoa.

Other analysts downplayed the likelihood of a bid, but would not rule out breaking up Alcoa given widespread merger activity in the mining sector.

"It's possible they might be planning to dismember the company," analyst Charles Bradford of Bradford Research/Soleil, said of Alcoa.

"Both BHP and Rio Tinto have shown no interest in downstream aluminium processing. Their interest has been primarily on the primary (metal) side and in fact both of them are significant players on the primary side," said Bradford.

Anti-competitive rules could toss up roadblocks, he added.

BHP is the fourth largest primary aluminium producer in the western world, churning out 1 million tonnes a year.

Rio, with mines, refineries and smelters in Australia, Italy, Britain, and New Zealand produces a similar amount.

Last month, Alcoa -- started in the 1800s as the Pittsburgh Reduction Company -- posted unexpectedly strong fourth-quarter earnings, helped by high metal prices and demand from the aerospace, transport and building sectors.

(Additional reporting by Deborah Haynes in London and Caroline Humer in New York)

Jamaica keeping watch on Alcoa...After report of possible takeover bids

Jamaica Gleaner, Jamaica - Wednesday | February 14, 2007

Jamaican bauxite officials last night were treating reports out of London of possible bids by two companies for its North American partner Alcoa as nothing but rumour, suggesting that for now it remains only an issue to watch.

Ownership changes in Alcoa would have likely implications for its multibillion-dollar expansion of the Jamalco refinery in Clarendon, which it co-owns with the Jamaican government.

"There is no hard information or basis on which to arrive at a position," said executive director of the Development Ministry and bauxite/alumina expert Dennis Morrison. "As far as Jamaica is concerned, it remains a hypothetical issue."

Alcoa is investing US$1.2 billion ($80 billion) to build capacity at the Clarendon-based refinery, a deal that would give it a majority stake in the plant.

The Times of London reported Tuesday that Australian firms BHP Billiton Ltd, the world's largest mining company, and Rio Tinto PLC, the world's second-largest iron ore producer, both based in Melbourne, Australia, are said to be considering separate bids of US$40 billion (euro30.7 billion) for Alcoa. The report cited unnamed sources.

The news sent Alcoa's shares soaring on Wall Street - up $2.00 at US$35 at 4:00 pm - despite scepticism in some areas of the market that the takeover would would occur.

Wire reports later downplayed the reports, quoting sources as saying Billington was not interested in a bid.

Morrison, citing news of Billington's denial, said before Jamaica could consider the implications and begin to strategise it had to be sure of which company was bidding, its character and likely intentions, "to see how it fits within Jamaica's policies and strategies."

The Alcoa stock rose as high as US$36.05 earlier in the day on the New York Stock Exchange.

The news also fueled market activity in Australia.

Officials with the mining companies declined to comment on the report Tuesday, as did Alcoa spokesman Kevin Lowery.

"We don't comment on rumours and market speculation," Lowery said. "It's not prudent to do so, nor is it productive."

Wall Street analyst Charles Bradford of Soleil-Bradford Research said he was sceptical of the Times report because "neither BHP or Rio Tinto have shown any interest in the downstream area of the business."

The downstream business refers to finished products manufactured from aluminum such as aerospace equipment and auto parts.

"There may be a theory out there that BHP would buy Alcoa and sell off all its downstream businesses, but I don't know who that buyer would be," Bradford said.

He has revised his Alcoa earnings forecast up 15 cents to US$3.20 a share for 2007, but said that was unrelated to the takeover speculation.

Bradford on Tuesday downgraded Alcoa stock to "hold" based on what he called the "possibly erroneous" report in the Times.

The Times said takeover speculation was fuelled by Alcoa's struggle to expand its business and a pending deal that would make Russia's OAO Rusal the world's largest aluminum producer, with about 12 per cent of the global output of aluminum.

The newspaper said neither BHP Billiton nor Rio Tinto had approached Alcoa about making a bid, and that BHP Billiton has already done the groundwork for a bid while Rio Tinto had not progressed as far.

Both companies recently reported company record earnings. BHP Billiton saw its net profit surge 41 per cent to a US$6.2 billion (euro4.7 billion) in the second half of last year, while Rio Tinto reported a profit for last year of US$7.44 billion (euro5.71 billion), up nearly 43 per cent.

Alcoa's market cap climbed above $30 billion on Tuesday.

Analysts say Alcoa takeover bid unlikely

International Herald Tribune, France February 13, 2007

SYDNEY, Australia: Potential takeover bids of Alcoa Inc. by one of two Australian-based companies reportedly considering such a move were unlikely because of the U.S. aluminum producer's company dynamics, cost factors and increasing Chinese competition, analysts said Wednesday.

BHP Billiton Ltd., the world's largest mining company, and Rio Tinto PLC, the world's second-largest iron ore producer, declined to comment on the takeover talk, sparked Tuesday by an unsourced report in the Times newspaper in London.

The report said the Melbourne-based mining companies were considering offers of up to US$40 billion (€31 billion) bid for the U.S. aluminum giant. Alcoa shares rose 6.38 percent to close at US$35 (€26.88) Tuesday on the New York Stock Exchange after rising as high as US$36.05 (€27.68) earlier in the session.

"We don't comment on market rumors and speculation," said Ian Head, a spokesman for Rio Tinto.

Analysts said they doubted a bid was pending, noting that BHP or Rio Tinto are focused more on the mining and raw materials end of the business than "downstream" industries like the manufacture of aerospace equipment and auto parts, which Alcoa emphasizes.

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"I think the downstream assets make it all too hard to be honest — I don't put any credence in these rumors," said Morgan Stanley analyst Craig Campbell.

BHP Billiton shares rose 0.8 percent to A$28.79 (US$22.44; €17.23) in trading Wednesday in Australia, while Rio Tinto gained 2.3 percent to A$77.20 (US$60.18; €46.21).

Stock Resource analyst Steve Bartrop said BHP's existing Australian aluminum assets could see the miner face antitrust issues if it made a bid for Alcoa, based in Pittsburgh, Pennsylvania.

Bartrop said there is little benefit for BHP in investing in Alcoa's U.S. aluminum smelting operations when it has its own low cost operations in Mozambique, South Africa and Brazil.

"It doesn't make much sense to buy higher cost smelters in the U.S. even with the proximity to market," he said.

Analysts at the U.K-based independent investment banking and brokering group, Numis, said the miners may have considered Alcoa in the past, but that such a bid was now doubtful.

"We are not convinced the value case relative to other options (organic, buybacks or other mergers and acquisitions) will be easy to make and, on balance, believe it is unlikely," it said in a statement.

Global investment bank UBS said both miners have the cash and flexibility to launch a takeover, but that the "timing could be questionable," with China providing increasing competition in aluminum production.

Meanwhile, Australia's Alumina Ltd. said Wednesday it is not aware of any information about a possible takeover of U.S.-based partner Alcoa. Alumina owns 40 percent of the Alcoa World Alumina and Chemicals joint venture in which Alcoa holds the remaining controlling stake.

Alumina's shares shot up 5.9 percent Tuesday on the takeover speculation, and rose another 1.52 percent Wednesday to A$7.34 (US$5.72; €4.39)

"We are not aware of any information with respect to the recent press speculation concerning a possible takeover of Alcoa by either Rio Tinto or BHP Billiton and the possible implications for the company resulting from that takeover," Alumina said in response to a share price query from the Australian Stock Exchange.

Alutrint smelter under environ scrutiny - Trinidad & Tobago

Bank News Americas, Chile Wednesday, February 14, 2007 13:11 (GMT -0400)

The Alutrint aluminum smelter project in Trinidad & Tobago is awaiting approval from the country's environmental authority, an Alutrint official, who wished to remain anonymous, told BNamericas.

Construction of the joint venture smelter, to be built at La Brea in Trinidad island's south, is behind schedule as the environmental authority has requested new information on a number of occasions, according to the source.

In 2005, Trinidad & Tobago Prime Minister Patrick Manning reportedly said that construction would begin in early 2006, though no work has been carried out to date.

Alutrint is a JV between Trinidad & Tobago's state-owned national gas company (NGC) and Venezuelan aluminum products maker Grupo Sural. China National Machinery & Equipment Import & Export also holds a stake in the project.

The US$465mn smelter will produce 125,000t/y to supply local car parts manufacturers as well as rod, wire and cable producers. Raw materials for the smelter will come from abroad, according to previous press reports.

Rs 9,000 cr UAE investment in Andhra alumina project

Economic Times, India -WEDNESDAY, FEBRUARY 14, 2007

HYDERABAD: The government of Ras Al Khaimah is planning to invest Rs 9,000 crore ($2 bn) in Andhra Pradesh to set up an alumina plant and aluminium smelter that is used in the production of ceramic tiles.

The government of Andha Pradesh has signed a Memorandum of understanding with the Ras Al Khaimah government on Wednesday to assure supply of bauxite used in alumina production, according to a statement from the chief minister's office on Wednesday. Ras Al Khaimah, part of the United Arab Emirates (UAE), is one of the largest producers of ceramic tiles in the world.

The alumina plant, which will be set up in Jerrela in Visakhapatnam district, will have a capacity of 2.5 million tonnes while the aluminium smelter will have 0.25 tonnes capacity. The plants will be assured of bauxite deposits available in Jerrela on a long-term contract basis from AP Mineral Development Corporation (APMDC).

APMDC will mine and supply 224 million tones of bauxite deposit that falls in Jerrela group of villages for the alumina plant. The price of bauxite will be decided by a high-level committee to be set up by the state government.

The government of Ras Al Khaimah proposes to complete the units within 36 months of getting clearances. The production unit will come up outside the tribal area and about 0.5% of the turnover of the company will be allocated for tribal welfare, according to the statement. The project has a scope for providing direct and indirect employment to over 10,000 people.

Martial law hobbles Guinea bauxite sector

Reuters AlertNet, UK 14 Feb 2007 15:01:06 GMT

CONAKRY, Feb 14 (Reuters) - Martial law in Guinea has forced the world's biggest bauxite exporter, Compagnie des Bauxites de Guinee (CBG), to halt mining activities and deliveries of ore to the Kamsar port, company officials said on Wednesday.

Guinea, which holds a third of the world's bauxite reserves, has been gripped by a wave of violent protests against President Lansana Conte's 23-year rule in which at least 110 people have been killed since early January.

Conte, a veteran general who seized power in a 1984 coup, declared martial law late on Monday in a bid to halt three days of violent protests and a national strike, the second this year, that began the same day.

"Work has been stopped at Sangaredi (mine)," said a CBG official. "There is a minimum service at Kamsar but the trains (to the port from the mine) have halted."

An industry source at Sangaredi, north of Conakry, said at least four people were killed in clashes between protesters and security forces there in the recent days of unrest leading up to the declaration of martial law.

But the mining town was calm on Wednesday.

"The army has taken over the town ... everything is halted," the source, who asked not to be named, told Reuters.

Martial law hands the military powers to arrest anyone threatening state security, to censor the media and all private communications, and to enforce a strict curfew for all but six hours each day.

After the curfew was relaxed slightly late on Tuesday, CBG officials speculated that it could be ended in the coming days in mining regions to allow work to continue in the crucial sector. It was not immediately possible to confirm this.


Industry sources said an operation to evacuate by plane family members of expatriates working for CBG in Kamsar started on Wednesday and a similar operation was planned for Sangaredi.

Most expatriate staff working in Conakry for major mining companies Rio Tinto Ltd. <RIO.AX><RIO.L> and BHP Billiton Ltd. <BHP.AX><BLT.L> were evacuated in the last few days.

U.S. aluminium giant Alcoa <AA.N> and Canada's Alcan <AL.TO> control the Halco joint venture that owns 51 percent of the CBG. The remaining stake is held by the government.

Alcoa spokesman Kevin Lowery declined to give details of any evacuation plan for CBG expatriate staff in Guinea. "Whatever we do will be done with an eye to protecting our people," he said.

Lowery had confirmed late on Tuesday that CGB's Guinea operations had been halted following the martial law decree.

The CBG normally produces just over 14 million tonnes of wet bauxite a year and exports some 13 million tonnes of dried bauxite, making it the world's top exporter.

CBG officials had previously told Reuters the company had lost $1 million a day due to disruptions caused by an 18-day general strike last month.

A spokesman for Russia's RUSAL said on Monday that its output had also been affected by the strike, before the declaration of martial law. It was not immediately possible to contact RUSAL officials on Wednesday.

Chávez allegedly closing aluminum plant in Costa Rica amidst impasse with President Arias

El Universal, Venezuela - 16-Feb-2007

President Hugo Chávez is allegedly closing an aluminum processing plant Venezuela operates in Costa Rica because he is at odds with his Costa Rican counterpart Oscar Arias, who has slashed out at the Venezuelan ruler, Costa Rican newspaper La Nación reported, as quoted by AFP.

According to La Nación, workers with Venezuelan company CVG Alunasa forwarded a letter to Arias showing their concern about the likely shutdown of the 400-worker plant based in Esparza, 100 km west San José.

The report claimed that Chávez is moving the plant to another Central American country.

The mayor of Esparza -one of the poorest regions in the country, and where Alunasa is one of the largest employers- said the plant for several days now has halted imports of aluminum for processing.

Chávez is allegedly "mad" at Arias' statements last February 1st, when he said that the special ruling powers the Venezuelan Legislature gave Chávez early in February were "a denial of democracy."

KhAZ and SAZ - Leaders of RUSAL

Financial Information Service(Registration), Russia - 16-Feb-2007

KRASNOYARSK, February 16. /FIS/. These days journalists of the Siberian Federal District are paying visits to Russia's leading aluminum enterprises: Khakassiya and Sayansk Aluminum Plants (KhAZ, SAZ).

The first phase of the KhAZ starting complex was put into operation on December 15, 2006. Currently under way are the works on the startup of the second starting complex. 'Khakassiya Aluminum Plant' is planning to reach the production level of 300 thousand tons of aluminum by 2008.

UAE: Rakia to build aluminum plant in India

MENAFN - 17/02/2007

(MENAFN) Officials at Ras Al-Khaimah Investment Authority (Rakia) announced that the authority has signed an agreement with the Indian state of Andhra Pradesh to set up an aluminum refinery plant and an aluminum smelter at the Indian state, Arab News reported.

The officials indicated that the refinery will have a capacity of one million tons yearly, while the smelter's annual production capacity will reach 250,000 tons. They added that the refinery and the smelter will have potential to double production capacity in the future.

It is worth mentioning that Andhra Prades has reserves of about 550 million tons of metallurgical grade bauxite in the Vishakapatanam and East Godavari districts.

uae: Plans to build the world’s biggest aluminum smelter

Monday Morning, Lebanon 19-Feb-2007

The Dubai Aluminum Co (Dubal) and Abu Dhabi’s investment vehicle, the Mubadala Development Co., have given the go-ahead for the construction of the world’s largest aluminum smelter at a cost of eight billion dollars.

The two firms formed a new equally-owned venture last week named Emirates Aluminum (Emal) to build the smelter with an annual production capacity of 1.4 million tons in Khalifa Port, in Abu Dhabi’s industrial zone.

Work on the first phase of the project will start in 2008, while operations are expected to begin in 2010, with an initial production capacity of 700,000 tons a year, the English daily Gulf News reported. The first phase is expected to cost five billion dollars.

Emal will become "the world’s largest single site aluminum smelter" when it reaches its full production capacity of 1.4 million tons a year, it added.

Dubal, which is owned by the Dubai government, is the Middle East’s largest aluminum producer with a capacity of 761,000 tons a year.

In August 2006, it acquired a 25-percent stake in Canada’s Global Alumina Corporation for 200 million dollars (166 million euros).

Mubadala owns a majority stake in Dolphin Energy, which is building a regional network to export gas via a submerged pipeline from Qatar to Abu Dhabi, and then on to Dubai, Oman and eventually Pakistan.

Alcan happy to remain independent company: CEO, Canada Monday, February 19, 2007

MONTREAL (Reuters) - Alcan Inc. is happy to remain independent, amid speculation that big international miners may want to buy their way into the aluminum sector, the Canadian company's chief executive said on Monday.

"We're not looking for being taken over. We're doing very well by ourselves thank you," Dick Evans, president and chief executive of Alcan, told reporters after a luncheon speech.

"We have plenty of capital to grow our business strongly. We've got a very good pipeline of projects, a very capable management team," he added.

Alcan recently forecast that its cash flow for 2007 would top the $3 billion generated in 2006.

Takeover speculation has swirled in recent months around global No. 1 aluminum maker Alcoa Inc. and Alcan, the world's second-largest maker of primary aluminum, in part because the commodities rally has extended to the lightweight metal.

Stock prices for both Pittsburgh-based Alcoa and Montreal-based Alcan rose last week after the London Times reported that BHP Billiton and Rio Tinto Ltd. were considering separate $40 billion bids for Alcoa.

Wall Street analysts were skeptical that takeover bids were looming. By Monday, Alcoa shares were almost flat and Alcan shares were off just under 1 percent.

Alcan shares were down 54 Canadian cents at C$63.22 on the Toronto Stock Exchange and off 39 cents at $54.76 on the New York Stock Exchange on Monday afternoon. Alcoa shares were up 7 cents at $34.70 in New York.

Alcan shares have risen some 20 percent in Toronto over the past three months on strong aluminum prices, but are below their 12-month high of C$64.99 set in early May.

Evans said Alcan's stock, which is widely held and gives the company a market capitalization of some $20 billion, is not trading on a takeover premium.

"I think the takeover risk comes when a company is struggling, underperforming, and there is much more value in the company than management is getting out. That's what some of the writers have said about Alcoa," Evans said.

($1$1.16 Canadian)

© Reuters 200

Alcan Mulls $3 Billion on Middle East Aluminum Smelter Projects

Bloomberg - February 20, 2007 17:29 EST

By Dale Crofts

Feb. 20 (Bloomberg) -- Alcan Inc., the world's second- biggest aluminum producer, said it may invest $3 billion in new projects in the Middle East to increase production in countries that offer cheaper energy supplies.

The company, based in Montreal, is interested in taking equity stakes in facilities such as the 20 percent interest it has in the Sohar smelter in Oman, said Anik Michaud, a company spokeswoman. Alcan will look at projects across the Middle East, including Saudi Arabia, she said today from Montreal.

The company's interest in spending as much as $3 billion in the region was reported by Gulf News on Feb. 19, citing Michel Jacques, the head of Alcan's primary metal unit.

Alcan is boosting aluminum production in countries that offer cheaper sources of power, such as the Middle East, where abundant supplies of natural gas are available to run power plants. Electricity can account for about 30 percent of the cost of aluminum production. Alcan receives frequent approaches from potential partners interested in the company's AP series of smelting technology, Michaud said.

Alcan and partners including Oman Oil Company SAOC and the Abu Dhabi Water and Electricity Authority are constructing a smelter capable of producing 350,000 tons a year of aluminum in Sohar, Oman, by the third quarter of 2008. The construction of the smelter will cost about $1.7 billion.

To contact the reporter on this story: Dale Crofts in Chicago at .

BPA announcing US Northwest power shares in spring

Reuters Tue Feb 20, 2007 9:19pm ET

The Bonneville Power Administration said on Tuesday it will announce this spring 20-year allotments of low-cost hydroelectric power to the utilities it serves in the Pacific Northwest.

The federal BPA, which expects to generate an average of between 8,151 megawatts and 8,467 MW over the next 10 years, supplies about 35 percent to 40 percent of the power used in Washington, Oregon, Idaho and western Montana.

The public utilities, investor-owned utilities and big power users like aluminum-makers are now making their cases for the amount of power the BPA will allot so they can make decisions on how to procure the rest of the electricity they will need from 2011-2031, said BPA spokesman Scott Simms.

"We're proposing to work with parties for a clear roadmap beginning this spring, so the utilities and other parties have the proper signals (from BPA) to meet their own needs," Simms said.

The BPA operates 31 hydroelectric dams and one nuclear power plant. The power it generates tends to cost less to produce than natural gas-fired plants.

The Pacific Northwest is forecast to have "modest regional power surpluses through 2016," recent studies by the BPA and the Northwest Power and Conservation Council show. But this account includes about 3,360 megawatts of average generation -- 15 percent of the region's total demand -- from the Northwest's independent power producers, Simms said.

The BPA does not know how much of the generation from independent power producers is available to the region. Most of it is generally sold in short-term deals along the West Coast.

How much is sold into California and how much stays in the Northwest will go a long way to determining price volatility and power reliability in the Northwest, the BPA said. Continued...

© Reuters 2007. All Rights Reserved.

International Group Sets Plan to Curb Global Warming, Canada - 20-Feb-2007

According to the United Nations, around 50% of the world's population will soon live in cities, but they account for 75% of all energy use.

More than a 100 corporate heads, international organizations and experts have come together and developed a plan that aims to fight greenhouse gas emissions.

Full story: The agreement urges government leaders to take action and limit emissions believed to be contributing to global warming. They called for a price to be set on emissions released by power plants and factories as a way to limit them. "Failing to act now would lead to far higher economic and environmental costs and greater risk of irreversible impacts," the Global Roundtable on Climate Change warned in a statement.


Many important corporations were represented including Ford, Toyota, Goldman Sachs, and Wal-Mart and the world's top aluminum producer Alcoa; "Of course, addressing climate change involves risks and costs. But much greater is the risk of failing to act," said Alain Belda, their chairman and CEO.


The Bush administration has refused to impose mandatory caps on emissions that contribute to climate change and unpredictable weather. The U.S is has also refused to ratify the Kyoto Protocol which has been signed by 166 nations. Americans alone produce 20 percent of the world’s output of greenhouse gases. China, the world's second largest producer, recently announced an initiative to cut greenhouse gases by 10% over the next five years.

Alcoa Establishes Innovation Center in Russia with Leading Universities - 22nd February 2007

Alcoa has announced today that it has established an Innovation Center of Excellence with leading universities in Russia to work on research and development projects focused on innovative mining, refining and smelting technologies.

"By establishing relationships with leading universities, national labs and industry partner research and development organizations in growing countries, Alcoa is multiplying its knowledge pool and is continuing to position the company on the cutting-edge of innovations within our key markets," said Mohammad Zaidi, Executive Vice President, Market Strategy, Technology and Quality. "By collaborating with the best and brightest around the world that have expertise in the sciences at the foundation of our key markets, we are creating a powerful leveraging engine."

Alcoa has signed agreements with Moscow State University in Moscow, St. Petersburg State Mining Institute in St. Petersburg, and Ural Polytechnic University in Ekaterinburg to work on research and development projects focused on transformational technologies in mining and refining. This complements the projects already started by Alcoa in Russia in the field of research. As of 2005, Alcoa Foundation has been supporting a major program in Russia to support education in three key technical universities in Moscow, Samara and Rostov-on-Don, the three key regions where the company has its offices and production facilities.

"Today’s business climate demands collaboration between business and universities, which Alcoa has been doing for years," said Dave Olney, Vice President of Technology and Alcoa Business System (ABS) for Alcoa World Alumina. "The scientific community in Russia has a distinguished reputation, and we are excited by the initial energy between our researchers and these universities."

Alcoa’s Innovation Center of Excellence in St. Petersburg, Russia, is part of a broader open innovation business model that focuses leveraging R&D resources in rapidly developing countries. Last month, Alcoa announced that it signed a memorandum of understanding (MOU) with India’s Council of Scientific & Industrial Research (CSIR) to partner in collaborative research projects that address critical global issues such as energy efficiency, alternative and renewable energy sources, environmental technologies as well as multi-material engineered solutions. In China, Alcoa is working with Northeastern University (NeU) in Shenyang and Central South University (CSU) in Changsha, both of which are under the direct administration of the Ministry of Education of China. The collaboration between Alcoa and NeU and CSU focuses on innovative process technologies, energy efficiency, and nanotechnology.

Costa Rica-Venezuela bickering centers on factory

CNN 8:24 a.m. EST, February 22, 2007

Story Highlights After 25 years, Venezuela announced closure of Costa Rica factory

SAN JOSE, Costa Rica (Reuters) -- Adding to weeks of diplomatic bickering, Costa Rica criticized Venezuela Wednesday, saying it had closed an aluminum plant in the Central American nation for "political reasons."

Relations between the two countries were strained earlier this month when Costa Rican President Oscar Arias criticized his Venezuelan counterpart Hugo Chavez for assuming extraordinary powers.

Last week, the Venezuelan government announced plans to close the 10,000 ton annual output CVG Alunasa plant, which employs 400 workers. (Read how Venezuela's congress granted Chavez new powers)

Arias' chief of staff, his brother Rodrigo Arias, linked the closure to the recent war of words and rejected the official Venezuelan explanation that the CVG Alunasa plant was not economically viable.

"It seems to us that there is a political motivation," Rodrigo Arias told reporters at a news conference.

He pointed out that Alunasa had increased its exports from Costa Rica to $47 million this year from $26 million in 2000. The Venezuelan plant has operated in Costa Rica for 25 years.

Venezuelan newspapers quoted Chavez on Wednesday as saying Arias sought to curry favor in Washington by criticizing the Venezuelan president, a harsh critic of U.S. President Bush. (Read about tensions between Venezuela and the United States)

Venezuela's Universal daily cited Chavez as saying Arias and other critics of his rule seek to please Bush, "so they get invited to the ranch in Texas."

At the news conference on Wednesday, Costa Rican Foreign Minister Bruno Stagno rejected the criticism.

"When Costa Rica defends these noble principles and purposes by all countries who love liberty and democracy, it has always done so in a sovereign manner," he said.

Arias has also criticized Cuba's communist government in recent months, likening Cuban leader Fidel Castro to Chile's late right-wing dictator Augusto Pinochet. Arias said each was "savage, brutal and bloody" in his own way.

Copyright 2007 Reuters.

Deripaska under pressure in mega-aluminium merger

Mineweb, South Africa '24-FEB-07 15:29' GMT © Mineweb 1997-2006

By: John Helmer

MOSCOW ( --Oleg Deripaska is under unexpected personal pressure, at home and abroad, just when his plan to take control of one of the largest bauxite and aluminium producers in the world is close to final government approval. And that is exactly why the trouble for Deripaska is growing now.

Russian government authorization this month of the creation of a monopoly aluminium concern, integrating domestic and foreign bauxite, alumina, and aluminium production assets, has followed a no-objection ruling from the European Commission (EC) in Brussels. The unconditional ruling was issued by the EC on February 1.

The published text indicates that EC anti-trust regulators found no evidence that the new United Company Rusal will control a significant volume of the alumina and aluminium traded in the European Economic Area. The Commission concluded, says the release, " that the operation would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it."

A fortnight later, the Russian Federal Anti-Monopoly Service confirmed its conditional ruling on February 14. Unlike the EC, the FAS concluded that "United Company RUSAL Limited can limit competition in world markets". Accordingly, following a government-wide review, FAS has made its approval conditional.

On the surface, the provisos appear relatively benign for Deripaska. The new Rusal must price its aluminium to consumers in line with the London Metals Exchange (LME) price, FAS has ordered: this, plus a markup of no more than 5% for domestic consumers; 10% for foreign consumers.

The Russian anti-trust regulator told Mineweb it has imposed five additional conditions: implementation of all supply and delivery contracts, especially for Russia's military plants; prohibition on shutting down production facilities; non-discrimination in supply and pricing between customers; the obligation to supply Russian plants with metal to meet their consumption capacity; and a duty to notify FAS ahead of price increases, and to disclose details of the chain the group uses for its trade.

"In actual fact, the situation described on paper is already the one in operation", a Moscow newspaper quoted Rusal spokesman Vera Kurochkina as saying. Under the surface, new and tougher conditions are being imposed as the Kremlin's price for the merger.

A website statement, attributed to Alexander Bulygin, chief executive of Russian Aluminium (Rusal), the prime mover of the merger, claimed the approvals support "the creation of Russia's first transnational corporation and the new leader of the global aluminium industry. We are now ready to round off the merger and plan to close the deal in the near future."

The merger of Rusal, owned by Oleg Deripaska; SUAL owned by Victor Vekselberg; and alumina assets of Swiss-based Glencore was announced in October 2006. They have agreed that, if there are no challenges to asset ownership in the proposed merger, Deripaska will own 66% of the new company, with Vekselberg and his associates 22%, and Glencore, 12%. Asset problems for Deripaska may produce a premium in cash or shares for Vekselberg, and vice versa, according to private undertakings between them.

The candidate chairman of the new company is SUAL chief executive, Brian Gilbertson. But he recently said he may drop out -- either because he doesn't want to wait for the initial public offering that has been planned for London; or because he will be ousted at the insistence of shareholders, or the Kremlin.

Rusal claims the combined company "becomes the world's largest aluminium and alumina producer, employing more than 110,000 people in 17 countries on five continents. The company will account for approximately 12.5% of global aluminium and 16% of global alumina production, respectively. The annual volume of production will be approximately 4 million tonnes of aluminium and 11 million tonnes of alumina."

Rusal remains a highly secretive operation, and has never issued public financial reports audited to international standards. Moreover, Bulygin has threatened investment advisors and banks lending Rusal money that if financial details of the company's books are leaked, the banks face exclusion from lending syndicates.

So secretive is Rusal's trade, both for incoming bauxite and alumina shipments to feed its Russian smelters, and for outgoing exports of aluminium, that employees in Rusal's transportation and trade divisions have been threatened with firing, if they reveal anything. Shipping companies which transport Rusal cargoes have also been threatened. Banks have also been pressured not to disclose the complex security arrangements and loan covenants which attempt to tie down, in case of borrower default, the movement of metal, as it passes from one Rusal affiliated company to another, in lengthy chains.

In Brussels, the secretiveness and complexity of Rusal's trading operations appear to have daunted anti-trust analysis. After two weeks of persistent questioning, the competition division spokesman Jonathan Todd released some of the data on which the EC approval was based. These show that the new Rusal share of the European market for aluminium would be at least double the 12.5% percentage which Rusal has released for the global market, and double the 16% estimate from Rusal for its global alumina market share.

According to Todd, the EC analysis found that, based on the most recent tonnage data for shipment and sales into the European Economic Area, the new company would take up to 35% of the market for smelter grade alumina (SGA). In the European market for standard primary aluminium, the new Rusal would have a market share of between 25% and 35%.

These market-share numbers are big ones -- and they were not revealed when the EC issued its finding that "the new entity's positions would be well below a level where it could prevent effective competition on any of these markets." For one thing, the EC did not release a threshold figure for "effective competition." For another, the EC analysis may have missed a substantially larger volume of aluminium that flows from the Rusal group into the European market, unreported in standard customs reporting.

Just how much metal and market share Todd and his colleagues may have missed is indicated by other Russian sources.

In February 2002, Renaissance Capital issued one of the very few investment bank reports ever done in Moscow on Rusal. Its author, Vladimir Titkov, was subsequently hired by the Rusal management.

Titkov reported that Rusal was selling 85% of its metal internationally, but less than 15% of the volume went to end-users. International traders Glencore and Gerald Metals took the lion's share of the export volume. This complicates the task of identifying where Rusal's aluminium ends up. But according to Titkov, Europe was taking 31% of export volume; Asia 39%; the Americas 30%.

According to the latest Russian customs data, in 2003, out of a total recorded export of 2.5 million tons of aluminium, 16% went to the European Union; that is, before its enlargement by 10 members. In 2006, the aggregate export volume jumped to 4.2 million tons, but destination data for the expanded Union, and the even larger European Economic Area, are not yet available from Russian customs.

A leading independent aluminium consultant in Moscow, Galina Stelmakova, warns that elaborate corporate identity changes and complex trading schemes conceal the final destination of Rusal's trade. "It is very difficult to determine by Russian export statistics what is really happening. European statistics show absolutely nothing. Rusal, for example, has a branch in Portugal. They have been exporting more than 1 million tons there, but Portugal never needs this volume of aluminium. So the scheme is that when the vessel is loaded, the declared destination is Portugal, but on the way the metal gets redirected to wherever they need to sell it."

London aluminium consultants told Mineweb that aluminium trading schemes operated by Rusal also use Monaco and Liechtenstein as pseudo-destinations. Lawyers who have tracked Rusal's metal for litigation claims report destinations including Panama, British Virgin Islands, and other tax havens.

Rusal's London representative, Jon Simmons, was asked to clarify Rusal's export figures. Company officials were uncontactable for a response.

Did the European Commission inadvertently misread the trade data, leading to the conclusion that Rusal's exports, and hence total exports to Europe of the proposed merged company, were lower in tonnage than is true? Did the EC competition directorate diminish the market share of Russian exports into the European Economic Area, in order to conclude that the competitive impact of the merger would be negligible? Todd declines to answer.

Yet, one year ago, in February 2006, the same EC competition division in Brussels analyzed the rough diamond trade and concluded that an export of $275 million in rough diamond value from Alrosa, the Russian diamond-miner, to De Beers, the global mining leader, constituted an anti-competitive relationship. This was despite data showing that the amount represented less than 4% of De Beers's annual rough diamond trade, and less than 10% of Alrosa's.

Ancillary evidence produced after the EC issued its ruling to end all trade between the two suggested that ruling had less to do with the evidence, and more to do with a private negotiation between De Beers and EC officials, kept secret from Alrosa. Lawyers for Alrosa have challenged the ruling, and have filed an appeal to void it in the European Court.

Suspicion that the EC's ruling on the Rusal merger may be flawed is unlikely to be challenged by a lawsuit in the European Court. However, in Washington, US anti-trust regulators may take a closer look. The US Government is already reviewing fresh evidence on Deripaska's business conduct, as officials defend their decision not to renew the temporary entry visa Deripaska was issued in 2005.

In Russia, there have been fresh signs that, while the Kremlin is agreeable to the creation of a national champion in the aluminium sector, it is reluctant to let Deripaska control it, at least not in the fashion in which he has been managing Rusal to date.

The state owned and managed military-industrial complex has told Deripaska it wants to take over Russia's molybdenum mines, which Deripaska controls through his Moscow holding, Basic Element.

Sources at the federal Finance Ministry acknowledge they are considering a plan to change Russia's tax laws, putting an end to schemes for minimizing tax onshore by transferring cashflows to havens offshore. The new Rusal company has announced that it proposes to register in the Channel Island of Jersey.

Transfer pricing has been illegal under Russian tax law for many years, but there has been no enforcement. Minimizing tax through tolling and trading schemes is illegal, if Russian tax men can prove the legal ties between the onshore and offshore companies. Until now, attempts to do that for Rusal have been stopped as soon as they have started.

For the moment, however, there are signs that high Kremlin officials want to put a stop to Rusal's tax optimization, while governors of regions, where Deripaska operates smelters, are supporting the status quo. The issue is so sensitive, some governors told Mineweb they will not discuss it.

In parallel, a move by Russia's trade ministry proposes to cancel the 10% import duty protecting the Russian market from foreign aluminium competition. If imports are freely allowed entry into the market to compete with the new Rusal, government officials have hinted that they may encourage foreign-owned aluminium companies to establish their own smelters to compete even more vigorously.

Officials at Ellenville's Hydro Aluminum plant talking with buyer

Times Herald-Record February 24, 2007

By Paul Brooks

Ellenville — Hydro Aluminum is in advanced stages of discussions with a new buyer for its local extrusion plant, which employs 260 workers.

But, in the meantime, 23 workers have lost their jobs in the latest layoffs.

"The layoffs were a reflection of business conditions that have existed for the last several months," said Lynn Brown, a vice president with Hydro's parent company. The industry has suffered very weak demand since November and December, he said.

The company said it tried to keep workers employed. It cut the workweek to four days from five, but then decided to lay off some workers and give the others a complete workweek. Four laid-off workers were able to find jobs in the casthouse, Brown said.

In June, when the company announced its plans to sell the plant, which makes aluminum parts, had 300 workers in the extrusion factory and 60 in the casthouse. Now, the work force in the extrusion plant is about 260; 50 at the casthouse. Brown said the company does not see any more layoffs at this point.

Officials have said little about the hunt for a buyer. A sale appeared near in December but did not materialize. Yesterday, Brown said Hydro is negotiating with a buyer.

"We are very intently in discussions that I would characterize as 'advanced' to sell the extrusion facility to an industry buyer," Brown said. "It is an extremely high priority for our folks and the folks in Ellenville."

Employees at the plant are as thirsty for information as those outside the company. "Nobody is saying anything," said Efrain Lopez, a village trustee who works at Hydro.

Union Back to Work at Ormet

Wheeling News Register, WV - Feb 23, 2007


HANNIBAL — All members of Local 5724 are back to work at the Ormet plant, according to current Chief Executive Officer and Chairman Ken Campbell.

"We are happy to report that we have been able to re-hire all of our union workers here at Ormet," Campbell said.

He also said Ormet is looking to hire some of the employees from its former rolling mill.

"Right now, we are offering jobs to many of the old rolling mill workers and have hired several of them. This is really good because these guys need jobs and are used to working with aluminum, so we mutually benefit," Campbell said.

Campbell mentioned that efforts to bring the plant up to full operation are progressing daily.

"Every day, we get seven or eight additional pots back online, and we should have everything up and running by June," he added.

Campbell said the effort to find a new CEO to replace him in this capacity is an ongoing process.

"As has already been made public, I am looking to step down as CEO because I am not trained in aluminum production, so we have been reviewing candidates for the position and we expect that he or she will begin working sometime in April," he said.

"Even though I will be stepping down as CEO, I will still be the chairman, so the new chief will need to check with me, as I should still be here three or four days per month," Campbell said.

While he will not be a day-to-day employee at Ormet, Campbell said he will continue following the principles that have brought him to this point.

"I am going to concentrate on doing business the way we are currently doing business. If you ask any of the employees here, they will tell you the atmosphere here now is much better than it used to be, so that is what I want for my legacy as CEO of Ormet," he said.

Campbell also explained that Ormet has reached a registration rights agreement that will permit its major shareholders much more freedom in trading.

"This agreement will allow our major shareholders who are currently restricted from selling company shares much greater freedom to perform transactions," he said.

Shareholders are urged to review the agreement in its entirety and to consult their own counsel before entering the agreement.

Campbell also mentioned that Ormet’s largest shareholder, MatlinPatterson, will forfeit their right to force a sale of all company shares.

"To this point, MatlinPatterson could have forced the other shareholders to sell their portions of the company, if MatlinPatterson would have so desired, but they are surrendering this right, which is a bonus for potential investors," he said.

Campbell noted that this is a great time for new investors to look at Ormet.

"The closing price for aluminum on Thursday was $2,870 per ton, which is unbelievably high. Once we are up to full capacity here, we should be producing 20,000 tons per month, so our business is only going to continue growing," Campbell said.

"We’re on a roll, and we plan to keep on rolling," he said.

Nemak SA de CV agreed to acquire Norsk Hydro ASA /Aluminum Castings Operations/ from Norsk Hydro ASA, Canada February 27, 2007 -

Norway — Nemak SA de CV, a subsidiary of Alfa SAB de CV, entered into an agreement to acquire the aluminum castings operations of Norsk Hydro ASA for GBP416 million (US$816.7 million). The operation comprises four state-of-the-art facilities located in Hungary, Germany, Austria and Sweden. In 2006, these plants are expected to produce approximately six million equivalent heads, and to generate revenue in the order of GBP485 million and EBITDA of GBP72 million. Altogether, they employ more than 2,200 people.

President Oscar Arias applauds Chávez' move

El Universal, Venezuela - 27 Feb 2-2007

Costa Rican President Oscar Arias Tuesday branded as "wise" President Hugo Chávez decision to keep in Costa Rica the operations of Venezuelan-owned aluminum processing plant CVG Aluminios Nacionales S.A. (Alunasa).

"I believe this has been a very wise decision by the Venezuelan Government. As a Costa Rican and in behalf of Costa Rica, I thank him," Arias said, and conceded that he heard of Chávez' decision in the press, rather than receiving an official communication.

However, Arias commented it was "really wonderful, because not only the jobs of 400 very humble Costa Ricans were at stake, but also 2,500 people depending on them. The truth is this has been the right decision," AP reported.

RusAl Looks to Nigeria

The Moscow Times, Russia Bloomberg 27 Feb 2-2007

Russian Aluminum, owned by billionaire Oleg Deripaska, completed its takeover of Nigeria's Alscon smelter after three years of talks, giving the Russian company a full production cycle for making aluminum in Africa.

RusAl will pay the Nigerian government $250 million for 77.5 percent of Alscon, the company said in a statement Tuesday. (Bloomberg)

Wayne R. Hale Named Chief Operating Officer of Century Aluminum Company

Market Wire (press release) 28-Feb-2007

MONTEREY, CA -- (MARKET WIRE) -- February 28, 2007 -- Century Aluminum Company (NASDAQ: CENX) announced today that Wayne Hale will succeed Jack Gates as executive vice president and chief operating officer, effective March 1, 2007. Mr. Gates, who is retiring after six years of distinguished service, will remain with Century through the first half of 2007 to assist with the transition.

Mr. Hale most recently served as senior vice president - upstream for Sual-Holding in Moscow, Russia. With Sual, he was accountable for mining, refining, smelting, HSE, logistics, procurement and sales. His operational responsibility included two bauxite mines, four alumina refineries and eight smelters in Russia and the Ukraine that produced more than one million tonnes of aluminum annually.

Overall, Hale has spent 30 years in metals and mining, including 26 years in the aluminum industry. He holds an undergraduate degree from Western Washington University and a MBA from Ohio University.

"We are delighted to welcome Wayne to Century Aluminum," said president and chief executive officer Logan Kruger. "He is accomplished in all aspects of our business and, most importantly, Wayne is a skilled business leader with a proven track record of safe and profitable operations."

Century Aluminum Company owns primary aluminum capacity in the United States and Iceland, as well as an ownership interest in alumina and bauxite assets in the United States and Jamaica. Century's corporate offices are located in Monterey, California.

Metalico Aluminum gets approval to start production

Reliable Plant Magazine, OK - Feb 28, 2007

Metalico Aluminum Recovery Inc. has been issued an air permit for its new aluminum smelting plant in the Syracuse area, clearing the final regulatory hurdle for the company’s planned expansion in Central New York.

Metalico Aluminum makes processed aluminum products, principally deoxidizing cones and shot used in the manufacture of steel. Production at the new facility is scheduled to begin this spring. When fully operational, the plant will have a production capacity of up to 6 million pounds per month and is expected to bring 70 jobs to the Syracuse area. The average selling price of deox in 2006 was approximately $1.08 per pound.

The company started producing aluminum deox at a pilot plant in leased space in Lackawanna, N.Y., in 2003. That plant generated approximately 900,000 pounds of product per month. With the purchase of its Thompson Road site in suburban Dewitt, N.Y., in early 2006, Metalico Aluminum announced plans to relocate and expand its operations after extensive renovations.

The new plant, when completed, will house a new 180,000 pound/28 million BTU reverberatory furnace, a 96-inch diameter turnings dryer, a 300-horsepower ring mill turnings crusher, three cone casting lines and a shot line, all supported by state-of-the-art pollution control equipment. Metalico Aluminum makes its products from aluminum turnings, old sheet, beverage containers, siding, clip and most other grades of scrap aluminum purchased from regional suppliers. The air permit, issued by the New York State Department of Environmental Services, also allows for a second reverberatory furnace, a sweat furnace and a rotary furnace to be added over the next few years, which could take Metalico Aluminum’s overall aluminum capacity to more than 10 million pounds of processed aluminum per month.

The expanded facility will ramp up to monthly production of approximately 6 million pounds by the spring of 2008. Jon Marantz, a veteran executive with more than twenty years of experience in the aluminum processing and refining industry, oversees the facility as Metalico Aluminum’s director of operations.

The company also co-located a traditional ferrous and non-ferrous scrap metal recycling yard on the Thompson Road site. Scrap operations have grown ahead of expectations since they began in June 2006. The growth of Metalico’s scrap operations in Syracuse over time is expected to create another 20 to 40 new jobs in Central New York.

Metalico Aluminum is a wholly-owned subsidiary of Metalico Inc., a rapidly growing holding company with operations in two principal business segments: ferrous and non-ferrous scrap metal recycling, and fabrication of lead-based products.