AluNews - May 2007

State Grant Supports Study of Aluminum Energy Efficiency

UK News, KY - (May 1, 2007)

Media Contact: Dan Adkins, (859) 257-1754

LEXINGTON, Ky. (May 1, 2007) −-? The University of Kentucky Center for Aluminum Technology (CAT) will receive a $181,200 state grant to study energy efficiency in aluminum melting, a project that could help

the industry save up to $9 million annually.

The grant, the largest of five energy research grants announced April 20 by the state Office of Energy Policy, will support the study titled "Aluminum Melting Furnace Design Optimization Using Integrated Modeling," a CAT project designed to improve efficiency in the aluminum melting process. The principal investigator is Subodh Das, director of CAT, which is affiliated with the UK College of Engineering.

"The goal is to help improve the energy efficiency in aluminum melting from the current industry average of 2,000 Btu per pound to the practically achievable average of 1,500 Btu per pound, and move toward the theoretically possible level of 550 Btu per pound, " Das said. "There are many aluminum companies in Kentucky, and we are hopeful that the research findings from this project will keep them competitive in today’s global market."

The project focuses on the use of simulation software packages developed in previous United States Department of Energy (USDOE) projects to assist CAT’s industrial partners in redesign and modification of existing melting and holding furnaces.

The energy saving potential in the proposal for Kentucky’s aluminum industry, based on the USDOE-accepted Government Performance Reporting Act (GPRA) spreadsheet approach, would be over one trillion Btu by 2025. At current natural gas cost of $8 per million Btu, the annual savings will approach $9 million in current dollars.

For the U.S. aluminum industry, savings are estimated to approach 14 trillion Btu/year, which is equivalent to a cost savings of $112 million/year.

The Office of Energy Policy announced that it will provide $518,192 in funding to energy research projects at UK and the University of Louisville. In addition to the CAT project, others funded will focus on biodiesel production and cellulosic ethanol research.

"In October 2006, I committed $1 million to support research and development projects that specifically address energy efficiency and renewable energy opportunities for the Commonwealth. This is the first installment on that commitment," said Gov. Ernie Fletcher.

"Energy efficiency and renewable energy provide new opportunities and markets for Kentucky. This research will help us capture these opportunities."

Below is a list of the other projects and the amounts awarded:

"Canola and Sunflower for Oil/Biofuel Production in Kentucky," Sam McNeill, University of Kentucky, Biosystems and Agricultural Engineering, $57,487;

"Construction of a Fixed Bed Reactor for Continuous Production of Biodiesel," Mark Crocker, University of Kentucky, Center for Applied Energy Research, $58,413;

"Improving Biodiesel Production Efficiency," David Hildebrand, University of Kentucky, Plant and Soil Sciences, $85,237; and

"Kentucky Industrial Wood Wastes as a Renewable Energy Resource," R. Eric Berson, University of Louisville, Department of Chemical Engineering, $135,855.

Twenty renewable energy and energy efficiency proposals, valued at more than $2.1 million, were submitted for evaluation. Those funded were selected on five criteria that included technical merit, partner diversity and relevance to Kentucky’s energy strategy.

"Kentucky’s researchers are finding new solutions that will help strengthen our energy future while respecting the environment," said John Davies, director of the state Division of Renewable Energy and Energy Efficiency.

The grants, which will be awarded in May, are targeted at advancing the goals of the Commonwealth’s Comprehensive Energy Strategy. The document is available online.

Alcan clears another hurdle in plan to upgrade Kitimat smelter in B.C.

Vancouver Sun (subscription), Canada -: Tuesday, May 01, 2007

KITIMAT, B.C. (CP) - Alcan Inc. (TSX:AL) and the Canadian Auto Workers have reached a tentative contract agreement for 1,300 production and maintenance workers at the company's aluminum smelter in Kitimat, B.C.

The deal is a "transition" agreement which will ensure labour stability while construction to modernize the 55-year-old smelter goes on until 2011, the union said in announcing the deal Tuesday.

Along with setting the stage for investment in the smelter, the agreement "establishes gains on key issues such as wages, benefits, quality of work life issues, job security, health benefits for current and future retirees, and transition issues" related to new technology, the union said.

Details weren't disclosed. Local CAW members will hold a ratification vote Wednesday.

Alcan has been steadily reducing its workforce in Kitimat, currently at 1,550, down from 2,500.

Modernization of the smelter would increase its production by more than 60 per cent, the company said, from its current 245,000 tonnes per year to about 400,000 tonnes per year, however it would also reduce the employee count further to about 1,000.

The agreement with the union comes as Alcan closes in on a deal with the B.C. government and B.C. Hydro that will allow the aluminum producer to proceed with the $2-billion smelter upgrade.

Late last year, the B.C. Utilities Commission refused to ratify a long-term power purchase agreement between B.C. Hydro and Alcan Inc. because the utility made a mistake in its calculations and failed to prove the benefits would offset the costs.

The regulator's approval of the agreement between the utility and aluminum producer was one of three conditions set by Alcan for the final go-ahead of the upgrade.

The tribunal said in reasons for its ruling that B.C. Hydro made a mistake in the price that it used as a benchmark to establish the cost effectiveness of the agreement and failed to show the benefits of the deal would offset additional costs.

© The Canadian Press 2007

Aluminum producer gets award for sustainability

Montreal Gazette (subscription), Canada - Saturday, May 05, 2007

Exxon, Dow and Starbucks are previous winners

LYNN MOORE, The Gazette

Next Friday night at a gala in Washington D.C., Alcan Inc. will receive a gold medal for international corporate achievement in sustainable development.

It will be joining the ranks of companies that include Exxon Corp., Dow Chemical Co. and Starbucks.

The World Environment Centre's gold medal is probably of more interest to the corporate world than that of environmental activists, according to several people who track sustainable development.

The research director of the Washington, D.C.-based watchdog National Environmental Trust struggled this week for something positive to say about the medal.

"I'm sure it will look nice on their wall," Tom Natan said.

One observer said it's a medal that is held in the highest regard by those who receive it.

Francois Meloche, an analyst with Groupe Investissement Responsable Inc., said the award is not one that he would factor into an assessment of Alcan. His Montreal-based firm advises some of Canada' biggest institutional investors and rates companies according to social and environmental criteria.

Toby Heaps, editor of the Toronto-based magazine Corporate Knights, said that while many awards in the corporate circuit "aren't based on scientific rigour," there has to be some substance to the company.

"You can't drive on total fumes," he said.

A jury, which the WEC described as independent, commended Alcan for its Community Investment Program, saying it demonstrated exemplary corporate philosophy that produces long-term results.

In 2005, Alcan contributed $11.2 million U.S. through that program, including the widely respected $1-million (U.S.) Alcan Prize for Sustainability.

But one member of the nine-person jury has a link to Alcan.

Robert Slater is a senior fellow with the Winnipeg-based International Institute for Sustainable Development.

Daniel Gagnier, Alcan's recently retired vice-president of corporate affairs, is chairman of IISD's board. And Milton Wong, an Alcan board member, also sits on IISD's board.

"It all looks very incestuous, doesn't it?" said David Runnalls, IISD's president and CEO.

"But I think it would be a real stretch to make the argument that because Dan Gagnier is the chairman ... and Bob Slater is listed as a senior fellow, that there is any relationship between that and Bob's performance as a member of the (WEC) jury."

Not only is Slater's relationship with IISD "very tangential," he has been involved with the WEC for more than a decade, Runnalls said.

Slater, whose credentials include an eight-year stint as a senior assistant deputy environment minister, was out of the country and could not be reached for comment.

According to several people who work for North American watchdog outfits, this sort of "back-slapping" and "glad-handing" is a common occurrence and is one reason why they believe the WEC jury would garner more credibility if it included a member from a watchdog group.

WEC president and CEO Terry Yosie said he does not see any problems or a potential conflict-of-interest situation.

"We go to great lengths to protect (the gold medal award's) integrity. One of the reasons that the WEC award has the cachet that it does is because it's not influenced by lobbying considerations," Yosie said. "And I don't think that there is an optics issue here," he said.

Alcan spokesperson Anik Michaud also downplayed the link between Slater and Gagnier and Wong.

One indication that it didn't work in Alcan's favour is the fact that Alcan was among the medal contenders for three years running, Michaud said.

In Africa, Alcan will use power from coal

Montreal Gazette (subscription), Canada - Saturday, May 05, 2007

We won't own it, company says in defence. Around the world, it uses hydro, geothermal and gas

LYNN MOORE, The Gazette

In Quebec and British Columbia, Alcan Inc. uses hydroelectricity for its energy-hungry smelters while in Iceland it taps right into the earth, using geothermal energy. But on Alcan's horizon are some smelter projects that will rely on natural gas, oil and - to the horror of many observers - coal.

"They are not really hitching their wagon to a clean low-carbon future with their recent investments," said Toby Heaps, editor of Corporate Knights.

The proposed $2.7-billion (U.S.) Coega smelter in South Africa involves a 25-year deal with the state-owned utility Eskom in which Eskom supplies the smelter with electricity generated by coal-fired generators. While Alcan is the venture's main corporate partner, its stake has yet to be defined, but is said to range between 25 per cent and 40 per cent.

Alcan isn't building Coega's power source nor will it own it, said Patrick Tobin, Alcan's director of government and corporate relations.

And Eskom is not building new generators specifically for Alcan, but "first and foremost to supply the grid which is in dire need ... of improvement ... and increased production," given the blackouts afflicting the country, Tobin said.

That position is "a cop-out," said Tom Natan, research director of National Environment Trust. "Everyone who does business needs to look upstream and downstream."

Alcan will seek to mitigate the environmental footprint of the new coal-fired generators by working with Eskom, Tobin said.

In Sohar, Oman, Alcan's joint-venture smelter, which has a 350,000-tonne capacity, is expected is be on line in mid-2008. Its dedicated power supply is based on natural gas. Alcan is the managing partner of that venture.

On Monday, Alcan announced its participation in a $7-billion (U.S.) mine-to-metal project in Saudi Arabia that could yield the world's largest integrated aluminum operation. The Saudi smelter is to have an initial capacity of 720,000 tonnes a year, but its design will accommodate the potential to expand annual production to more than 2 million tonnes. Alcan would hold a 49-per-cent stake in the project, which features a bauxite mine, an alumina refinery, an aluminum smelter and an oil-driven power plant. © The Gazette (Montreal) 2007

China imports less aluminum amid expanding production capacity

People's Daily Online, China - May 5, 2007

China imported 254,323 tons of unforged aluminum and aluminum products in the first quarter of this year, a decline of 7.7 percent year on year, according to customs statistics.

Alumina imports went down 13.9 percent to 1.47 million tons in the three months.

The decline was due largely to expanding production capacity at home, said Yang Hongjie, an analyst with Haitong Securities.

Yang predicted that domestic production would likely to slow down in the coming months as the Government was taking stricter measures to curb extraordinary expansion in production capacity for alumina, unforged aluminum and aluminum products.

Some other industry observers said import duty on raw materials would probably be scrapped in the near future. However, the policy won't be much helpful for alumina import, as domestic buyers prefer local products.

In a related development, China exported 141,695 tons of unforged aluminum and aluminum products between January and March, down 51 percent from the year-earlier level.

Source: Xinhua

Alcoa-Alcan deal aims to forge aluminum powerhouse, Canada - Monday, May 07, 2007

By Matt Daily and Robert Melnbardis

NEW YORK/MONTREAL (Reuters) - Alcoa said on Monday it would make a hostile bid for Canada's Alcan Inc. for nearly $27 billion, after talks between the two aluminum producers failed to lead to a deal.

If successful, the bid would create the world's largest producer of the metal, which is used in products ranging from beverage cans to airplanes.

The value of the bid in cash and Alcoa stock rose to $74.47 per Alcan share during the day from an initial $73.25 as Alcoa's shares gained 8.3 percent. But expectations that a higher bid may surface drove Alcan's shares well beyond the price and they ended up 34.5 percent at $82.11 in New York.

"The starting gun has just gone off," said John Ing, analyst and president of Maison Placements Inc. "As for possible suitors, it's pretty well anybody nowadays. Nobody is immune from takeover ... There's so much liquidity around, that there are a lot of companies that would be interested."

Most big metals and mining companies have been seen as possible buyers for Alcan, industry sources said. That list would include Anglo-Australian majors Rio Tinto and BHP Billiton , Anglo American Plc , Brazil's CVRD , Norway's Norsk Hydro and Russia's United Company RUSAL, among others.

Alcoa Chief Executive and Chairman Alain Belda said the planned link-up would better position the company to compete with fast-growing competitors. That group includes players such as Russia's RUSAL and China's Chalco <601600.SS>, which saw its value nearly triple with its listing in Shanghai last week.

"Emerging global players in Russia, China, India and the Middle East are quickly expanding and adding capacity on a global basis," Belda told a conference call.

Montreal-based Alcan, which was split off from Alcoa in the 1920s because of antitrust concerns, said it plans to consider the proposal and advised shareholders to wait until it has fully reviewed the offer.

"I just think that Alcan was perennially undervalued and it was inevitable something like this would happen," said John Redstone, an analyst at Desjardins Securities.

An Alcoa-Alcan combination would control about 25 percent of the alumina raw material and primary aluminum markets and put its production capacity well above that of rival RUSAL.

Alcoa said its move comes after nearly two years of talks between the companies ended in November without a merger agreement. It put the enterprise value of the deal at $33 billion, including $6 billion in debt.

"We are very disappointed that those efforts did not result in a negotiated transaction -- a conclusion we would have strongly preferred," said Belda, adding, "therefore we are taking our offer directly to Alcan shareholders."

Alcoa, which is the world's largest aluminum seller in terms of revenues, said the combined company would see finished aluminum production capacity of 7.8 million tons compared to RUSAL's 4 million tons.

BHP Billiton, Rio May Enter Bidding War for Alcan (Update1), Canada - Monday, May 07, 2007

By Tan Hwee Ann and Rob Delaney

May 8 (Bloomberg) -- Alcoa Inc., the world's largest aluminum producer, may face competition for its $26.9 billion bid for rival Alcan Inc. from mining companies including BHP Billiton Ltd. and Rio Tinto Group, said Credit Suisse Group.

Alcoa could also become a target, said Credit Suisse analysts led by New York-based David Gagliano in a May 7 report. Potential bidders include Anglo American Plc., Cia. Vale do Rio Doce, OAO GMK Norilsk Nickel and Teck Cominco Ltd., they said.

A five-year rally in metal prices has sparked 473 deals or bids in the industry this year, valued at $55.4 billion, data compiled by Bloomberg show. Shares of New York-based Alcoa and Alcan surged yesterday, with Alcan rising past the bid price.

``We believe there is a very good possibility that other bidders emerge for either Alcan or Alcoa,'' said the Credit Suisse's analysts. ``With what will likely be an extensive antitrust review period, other interested parties will have plenty of time to do their work on both companies.''

Alcoa's offer values Alcan's shares at $73.25, or 20 percent more than the closing price on May 4. Shares of Montreal-based Alcan surged 35 percent to $82.11 in New York, a record daily gain. Alcoa rose 8.3 percent to $38.63, the biggest one-day gain since November 22.

Alcoa's shares are worth between $40 and $50, and Alcan's shares are worth between $70 and $90, Credit Suisse said.

Samantha Evans, a spokeswoman for Melbourne-based BHP Billiton, the world's largest mining company, said the company doesn't comment on rumor and speculation. Ian Head, a spokesman for London-based Rio, the world's third-largest miner, also declined to comment.

Attractive Businesses

London-based Anglo American is the world's second-largest miner, and Brazil's Vale is the world's largest iron ore exporter. Vancouver-based Teck Cominco, the world's second- largest producer of zinc, last year failed in its bid for rival Inco Ltd.

Alcoa and Alcan's alumina and aluminum businesses would be attractive to mining companies, while their packaging and rolling units would lure non-mining companies, Credit Suisse's analysts said. Alcoa and Alcan's combination would control about 25 percent of the alumina and aluminum markets, the analysts said.

The Times of London said Feb. 13 that BHP Billiton and Rio Tinto may be planning bids for Alcoa.

Shares of Melbourne-based Alumina Ltd., Alcoa's partner in the world's biggest alumina producer, surged as much as 41 cents, or 5.6 percent, to A$7.74 on the Australian Stock Exchange and traded at A$7.68 at 10:18 a.m. Sydney time.

A successful Alcoa bid for Alcan could ``deliver significant benefits,'' to the Alcoa World Alumina & Chemicals joint venture, Alumina's Chief Financial Officer Ken Dean said today in a statement posted on the Australian Stock Exchange.

The venture is the ``exclusive vehicle'' for any bauxite and alumina businesses of Alcoa and Alumina, and Alcan has stakes in a number of bauxite and alumina assets, Dean said. Alumina owns 40 percent of the venture, and Alcoa the rest.

To contact the reporter on this story: Tan Hwee Ann in Melbourne at ; Rob Delaney in Toronto at

Airbus wary of Alcan-Alcoa deal, Canada - Mon May 7, 2007 3:37PM EDT

NEW YORK, May 7 (Reuters) - Plane maker Airbus said on Monday it is "wary" of an acquisition of Alcan Inc. (AL.TO: Quote, Profile, Research (AL.N: Quote, Profile, Research by Alcoa Inc. (AA.N: Quote, Profile, Research in one of the first signs of customer resistance to the hostile deal.

"Large-scale consolidation among existing metal businesses is something to be wary of since it could alter negatively the way materials are developed, priced and supplied," Airbus spokeswoman Mary Anne Greczyn said in an e-mail statement. "Airbus will watch very closely any developments in the Alcoa situation."

Airbus, a unit of EADS (EAD.PA: Quote, Profile, Research, vies with Boeing Co. (BA.N: Quote, Profile, Research as the world's largest plane maker.

Airplane manufacturers are heavily reliant on the light-weight metal, though newer designs are shifting to carbon composite materials.

Boeing's new, mid-sized 787 Dreamliner, and Airbus' rival A350 XWB, have been designed to use a much higher percentage of carbon composites, heralding a broad shift in the plane-making business from metal to man-made materials.

Alcoa on Monday said it would make a nearly $27 billion bid for Alcan. A deal would create the world's largest aluminum producer, which would control about 25 percent of the alumina raw material and primary aluminum markets. The aluminum giant's production capacity would exceed that of Russian rival RUSAL.

Other customers also expressed concern about the impact of the deal on the aluminum market.

Bill Ferko, chief financial officer of Genlyte Group Inc. (GLYT.O: Quote, Profile, Research, a maker of lighting fixtures, which uses aluminum in reflectors and outdoor lighting systems because of its resistance to rust, said: "If they would be consolidating facilities or reducing supply, and if others are not there to replace them, that would be a concern."

Rio Tinto could be next takeover target: Citigroup analyst, Canada - Mon May 7, 2007 3:37PM EDT

While much of the market may be focused on shares of Alcan Inc. and its takeover suitor Alcoa Inc. – itself rumoured to be the target of both BHP Billiton and Rio Tinto earlier in 2007 to help the mining giants boost their aluminum operations – the merger and acquisition frenzy in metals and mining has some wondering who will be next.

The de-rating of Rio Tinto for example, has opened up a value arbitrage and is now "well into leveraged buyout territory," according to Citigroup analyst Heath Jansen.

"Rio stands out as a potential acquisition candidate, either by private equity or the incumbent mining companies," he said in a note to clients.

However, the company’s market capitalization of more than US$70-billion is an obvious barrier.

Anglo American has the most to gain in Mr. Jansen’s opinion, since it would diversify the company’s earnings base on a currency, commodity and country basis.

BHP Billiton has the size to buy Rio Tinto, but would likely run into antitrust problems in the iron ore, coking coal and diamond markets, Mr. Jansen said.

Alcoa says it would invest $7B in Alcan

United Press International - May 8, 2007 at 10:17 PM

WASHINGTON, May 8 (UPI) -- Alcoa Inc. would invest up to $7 billion at six Canadian plants if its bid for rival Alcan Inc. succeeds, the company said in a regulatory filing Tuesday.

The U.S. aluminum producer said in a Securities and Exchange filing its investment would be "the single-largest private sector investment program in Quebec's history to date."

Alcoa also said Alcan would have "significant board representation in the combined company" if Alcoa's $27.49 billion cash-and-stock offer goes through, The Wall Street Journal reported.

Separately, Jana Partners LLC, a self-described activist hedge fund with a stake of less than 5 percent in Alcoa, said it wanted the U.S. company to drop the Alcan bid and put itself up for sale.

"Given Alcoa's long history of failing to generate shareholder value through acquisitions, we believe that its greatest value can be realized through a sale or breakup of the company," Jana Managing Partner Barry Rosenstein said in a letter to Alcoa Chairman and Chief Executive Alain Belda.

An Alcoa spokesman played down Jana's ownership stake and relevance, saying, "We have 867 million shares in our company."

Bid to curb overheating in aluminum industry

China Daily, China - 2007-05-09 08:51

By Wan Zhihong (China Daily)

China will take further macroeconomic control measures in the aluminum smelting sector, a move to speed up the restructuring of the aluminum industry.

The nation will work to ease overheating in the aluminum smelting sector and encourage more consolidation, according to the National Development and Reform Commission (NDRC), the top planning body.

Blind investment in the aluminum smelting industry has already been discouraged. The investment in the sector last year decreased 9.6 percent, said the NDRC.

However, with the rise in prices for aluminum products and with the electricity shortage easing, there has been a rebound in aluminum and alumina production facilities. In January and February, the fixed-asset investment in aluminum smelting increased by 124.2 percent over last year.

"China must curb blind investment in the aluminum industry. Aluminum projects that fail to meet industry policies, environment evaluation and other related regulations should be stopped," said Lang Dazhan, deputy director of the aluminum department of China Non-Ferrous Metal Industry Association.

This year China's aluminum output is expected to reach 10.5 million tons, and the demand will be 9.6 million tons. The rapid output growth, compounded by the curbs on aluminum exports, will ease the price of the metal in the domestic market, he said.

Aluminum prices have risen in recent years, buoyed by high costs and strong demand at home and abroad. Now there are more than 90 aluminum plants in China with a combined production capacity of around 10 million tons.

"China should take further measures to quench the thirst of alumina companies to build new manufacturing capacities," said Lang.

Last year alumina production in the country jumped to 13 million tons, while price of alumina declined sharply because of ballooning production at home and abroad, he said.

With active investment in the aluminum industry in the past few years, overcapacity has become a pressing issue. The growth rate slowed down, and many aluminum enterprises suffered losses.

The government has focused its attention on the restructuring of the sector. NDRC said that since 2004, new aluminum manufacturing projects worth 17.3 billion yuan have been suspended or stopped.

Chalco's move

China's aluminum industry must embrace consolidation, and the nation's biggest aluminum and alumina producer, Aluminum Corp of China Ltd (Chalco), is doing a great job to boost its production capacity, said Lang.

"Despite overcapacity in the aluminum sector, Chalco has been active in mergers and acquisitions in the past years."

Last March, Chalco agreed to buy Fushun Aluminum Co for 500 million yuan. The Fushun Aluminum plant, which produces primary aluminum and carbon products, had a smelting capacity of 14,000 tons in 2005 and net assets of 503 million yuan before the purchase.

Chalco will continue its mergers and acquisitions, said Xiao Yaqing, CEO of the company. It's trying to become a more integrated player through capacity expansion.

Last year, Aluminum Corp of China, parent of the listed Chalco, recorded 22.5 billion yuan in net profit, an increase of 18.1 billion yuan over its profit three years ago.

Production of alumina has accounted for about 60 percent of its profit. The company will increase its alumina production by opening new manufacturing facilities.

"We hope that through our M&A activities in the aluminum sector, the production of primary aluminum can be increased," said Lu Yongqing, vice-president of the company.

(China Daily 05/09/2007 page15)

Oxbow completes acquisition of the business of Great Lakes Carbon Income Fund

Canada NewsWire (press release), Canada May *, 2007

TORONTO, and WEST PALM BEACH, FL, May 8 /CNW/ - Great Lakes Carbon Income

Fund (the "Fund") (TSX: GLC.UN) and Oxbow Carbon and Minerals Holdings, Inc.

("Oxbow") announced today that Oxbow has completed its acquisition of all of

the assets of the Fund.

With the completion of the acquisition, the Fund's Unitholders will

receive approximately C$14.00 per trust unit of the Fund ("Unit"), payable in

cash upon redemption of their Units, for an aggregate purchase price of

approximately C$527 million. In accordance with the Fund's declaration of

trust, as amended and approved by the Unitholders and the board of trustees of

the Fund, the Units are expected to be redeemed on or about May 10, 2007.

Following the redemption, the Fund will cease to be a reporting issuer and the

Fund will be wound-up as promptly as possible. The Units will be de-listed

from the Toronto Stock Exchange as soon as practicable prior to the


Oxbow owner and founder William I. Koch said he believed the acquisition

was a great strategic fit. "We had our eye on Great Lakes Carbon for quite

some time," said Koch. "They have a lot of strengths - including their four

calciners, a large number of talented employees and quality facilities. We

think this is a good fit for both companies."

Koch said he does not envision making any radical changes to Great Lakes

Carbon. "They have been in business for nearly 100 years," he said. "We feel

that they have tremendous depth and a strong presence in the marketplace."

The approximately 310 Great Lakes Carbon employees will become part of

the Oxbow Group - bringing the total number of employees at the West Palm

Beach-based company to approximately 1,200.

BMO Capital Markets served as financial advisor to the Fund on the

acquisition. Torys LLP served as Canadian and U.S. counsel to the Fund and

Osler Hoskin & Harcourt LLP served as special counsel to the board of trustees

of the Fund.

Callisto Partners LLC served as financial advisor to Oxbow on the

acquisition. Davies Ward Phillips & Vineberg LLP served as Canadian counsel

and Paul, Hastings, Janofsky & Walker LLP served as U.S. counsel to Oxbow.

Alcoa/Alcan: BHP Billiton repeatedly named in rival mix; investors see possible bidding war, shareholder says

Financial Times (subscription), UK - May 8 2007 14:54 | Last updated: May 8 2007 14:54

By Courtney Bosh and Nadia Damouni in New York

Alcan has long been pursued not only by Alcoa but also by BHP Billiton, according to an Alcan shareholder and industry sources.

So much so, that it is understood Alcoa would not be surprised to encounter a competitor in its hostile run-up for Alcan, if it does not become a target itself. An industry source said Alcoa could, in fact, have made the hostile move to preempt becoming the target of consolidation.

BHP has been rumored to be scouting both of the aforementioned aluminum companies, but it is thought unlikely it could swallow the two at the same time due to the amount of cash needed and antitrust considerations, according to the shareholder and industry sources. It has for some time been speculated that Alcoa and BHP were talking to Alcan, the shareholder elaborated, adding that the target’s investors are anticipating a rival bidder to surface even though yesterday’s offer had a 20% premium over Alcan’s already high share price at USD 61.00 on Friday’s close.

"The rumor mill is that [Alcan has] been talking to Alcoa, BHP Billiton and possibly others. We will see if somebody else will come out of the woodwork and top that price," the shareholder commented.

In addition to AngloAmerican being mentioned as a potential rival suitor for Alcan or Alcoa over the past year, Xstrata was tagged as another likely buyer by the industry source. Due to the cyclical nature of the industry and long lead times for projects to come to fruition, however, private equity firms are less likely to pursue either Alcoa or Alcan, despite a possibility that some may have already run numbers on the companies, according to a previous adviser to Alcan.

One industry banker explained the expected rivalry for Alcan from a strategic as a sign of the times for low-growth basic industries, such as steel or mining. Players look for growth by merging to rationalize capacity and raise prices, he said.

Copyright The Financial Times Limited 2007

Dispute over top job led to hostile Alcan bid

Ottawa Citizen (subscription), Canada - Tuesday, May 08, 2007

Merger talks failed over who would be CEO, leading to Alcoa's $33B offer: SEC filings

Lynn Moore, The Montreal Gazette

MONTREAL - A "merger of equals" between Montreal-based Alcan Inc. and its larger U.S. rival Alcoa Inc. turned into a $33-billion U.S. hostile takeover bid after negotiations stalled over significant details like who would be CEO of the new company, according to documents filed yesterday with the U.S. Securities and Exchange Commission.

The U.S. filings indicate the two sides could not agree on who would be chief executive and who would be board chairman of the combined company.

Two weeks before Christmas, Alcan CEO Richard Evans told Alcoa CEO Alain Belda that Alcan would not go ahead with the merger project and it was terminated.

Alcan was put into play yesterday when Alcoa announced its bid for the 105-year-old company. Alcoa, which claims that it and Alcan share the same corporate DNA, said that a successful bid would create the world's largest aluminum producer with dual head offices in Montreal and New York.

It would be the largest corporate takeover in Canadian history.

"Combining the two companies will bring significant benefits to Montreal, to Quebec and will ensure that Canada remains a world leader in the mining and metals industry," Alcoa CEO Alain Belda said during a Montreal press conference.

Alcan stock prices soared 34 per cent on Monday to $90.57 from $67.55 on Toronto Stock Exchange, suggesting the market is betting on higher offers for Alcan. Among the rumoured potential suitors are mining giants BHP Billiton and Rio Tinto Group.

Based on Alcoa's closing stock price Friday, its offer yesterday for Alcan had a value of $73.25 US per Alcan share, according to Alcoa.

A statement issued by Alcan said that it will "consider the proposal and how it could impact the interests of Alcan's shareholders and other stakeholders." It advised shareholders to await Alcan's assessment of the bid.

Should the deal go ahead, the new combined aluminum producer would be the fifth largest metals and mining company in the world, said Mr. Belda who told reporters that the new company would be listed on the TSX,

"None of the top-10 mining companies in the world are currently traded in Canada," said Mr. Belda who, as a teenager lived in Montreal's St. Laurent district when his father worked for Abitibi-Price, an earlier configuration of forestry giant Abitibi-Consolidated.

The new company will have the scale and cost structure to compete in a global industry where large low-cost players are coming from Russia, China and elsewhere, said Moroccan-born Mr. Belda whose family emigrated to Brazil.

"Bigger is better in this type of business because of the type of risks we have to take (when we ) go to very politically risky and economically risky places to make investments, each one of $2 billion," he said.

Alcoa is keenly aware how "embedded Alcan is in the economic and social and cultural fabric" of Quebec and Canada, said Mr. Belda who met recently with an array of provincial and federal and municipal officials.

Instead of loosing a head office, Montreal will see Alcan's expand while the new company's commitment to Quebec will increase, primarily through research and development opportunities, Mr. Belda said.

"Montreal will be the home of the headquarters of the global primary products business of the combined companies.

"On a stand-alone basis, this business by itself will rank as one of the largest companies in Canada and perhaps the largest in Quebec. By itself, it will be the largest stand-alone aluminum company in the world with $32 billion U.S. in revenue in 2006 and almost 38,000 employees in 29 countries," he said.

© The Ottawa Citizen 2007

Alcoa move may spark bidding war for Alcan

Brisbane Times, Australia - May 9, 2007

Jamie Freed

THE mining sector is set for another wave of consolidation at the top after US aluminium producer Alcoa launched a hostile $US33 billion ($40 billion) cash and scrip bid for its Canadian rival Alcan on Monday night.

Analysts expected the move could spark a bidding war for Alcan - and possibly even Alcoa - involving global miners like BHP Billiton, Rio Tinto, CVRD, Anglo American and Xstrata.

Alcoa revealed it had held discussions with Alcan about a possible merger of equals for two years before it lodged its hostile offer at a 20 per cent premium to Alcan's share price. The talks broke down last November, meaning a rival bidder for Alcan could swoop in as a white knight.

Alcoa's offer for Alcan has been viewed as both offensive and defensive by analysts, given both companies have been cited frequently as takeover targets during the past year.

In a conference call, analysts questioned the timing of the deal given that in January, Alcoa had announced plans to buy back up to 10 per cent of its shares within three years.

Alcoa chief financial officer Charles McLane said his company had not received approaches from rival miners between January and May that had spurred Alcoa into launching a pre-emptive strike on Alcan.

Deutsche Bank noted a merger between Alcoa and Alcan might create an aluminium company too large to be attractive to the major diversified miners.

Sources told Canada's Globe and Mail that BHP approached Alcan in December to discuss a possible merger but talks stalled because the Canadian miner preferred to remain independent.

Australian analysts said global mining companies were likely to find Alcan more attractive than Alcoa. Although Alcoa has more attractive bauxite and alumina refining assets, Alcan has cheaper smelters and a smaller downstream business.

"I don't suspect you will get multiple bidders, but I think you will see a counterbidder for Alcan," UBS's Glyn Lawcock said.

BHP and Rio have been rumoured to be interested in the aluminium companies since a Herald report last May. Earlier this year there was speculation in Brazil that CVRD was eyeing Alcan and renewed rumours in London that BHP and Rio were looking at Alcoa. Additionally, Anglo American's new chief executive Cynthia Carroll - a former top executive at Alcan - has embarked on a growth strategy in her new role.

In the past Alcoa was deemed an unlikely suitor for Alcan due to competition concerns. But Alcoa said it would divest assets if necessary and expected the deal could be completed by the end of the year, with eventual cost savings of $US1 billion a year.

Alcoa CEO dismisses talk of Alcan failure

National Post, Canada - Wednesday, May 09, 2007

Peter Koven, Financial Post

Alain Belda looks relaxed and confident, even if he shouldn't.

Sitting in a conference room in downtown Toronto, the chief executive of Alcoa Inc. appears certain that he will win what is expected to be a long and difficult battle to buy Montreal-based Alcan Inc.

There's no reason he should feel that relaxed. By his own admission, Alcoa put together its massive US$27-billion hostile bid in just the past two-and-ahalf weeks. Investors reacted by immediately driving Alcan stock far above the offer price in preparation for rival bids.

And the investment community is speculating that Alcoa has effectively put itself in play as well.

But Mr. Belda's not worrying about any of that.

"We're all potential targets," he says. "This company is on the market every day. We're permanently a target for anyone who wants to buy or sell ... obviously there's an amount of liquidity in the market that puts every company [in play]."

Mr. Belda seems genuinely baffled that the friendly merger talks with Alcan, which went on for nearly two years, fell apart so abruptly late last year.

As far as he was concerned, both sides firmly agreed to the strategic logic of the proposed "merger of equals," and it's a mystery that Alcan's board got cold feet.

He still hopes to get back to the table with Dick Evans, Alcan chief executive, to negotiate a friendly deal.

But he says the merger of equals they nearly reached last year is dead.

"It's difficult after you've made a [hostile] offer to make a merger of equals, because some shareholders have sold, some new ones have come in, they've paid a higher price. A merger of equals is a non-premium agreement."

Analysts have speculated that Alcan is less interested in a merger than Alcoa because it has better assets and is generally a stronger company.

It has also outperformed Alcoa's stock, which has trailed well behind most major resource companies.

Yesterday, an Alcoa shareholder called JANA Partners LLC slammed the takeover bid and said the company should be sold or broken up to bring in some shareholder value.

Mr. Belda dismisses all the critics, even as he acknowledges that more of them will probably come out of the woodwork.

He says the stock has underperformed other resource companies simply because the Chinese are producing aluminum as they import other commodities, and Alcan has done better because of takeover rumours.

As for the possibility (some would call it a likelihood) of a takeover battle, he says the company has thought about every possible contingency plan and is ready for whatever happens.

And while he says Alcoa is prepared for rival bids and isn't worried about being in play itself, he also makes it clear that he wants this deal completed as quickly as possible.

"The best thing we can do for both companies is move towards a negotiated deal pretty fast." © National Post 2007

Alain Belda looks to go out with a bang

Globe and Mail, Canada - May 9, 2007

ANDREW WILLIS AND SINCLAIR STEWART With files from Boyd Erman and Jacquie McNish

TORONTO, NEW YORK -- A day into the deal of his life, Alcoa Inc. chief executive officer Alain Belda has nailed down many of the planks needed to build the world's biggest aluminum company.

Quebec leaders seem supportive of the one-time Montreal resident's hostile, $27-billion (U.S.) bid for Alcan Inc. Tough takeover laws make it difficult (but not impossible) for rivals to turn the tables and take a run at Alcoa. And Mr. Belda sees competition watchdogs blessing this union, if the combined companies sell one or two auto-parts and aerospace facilities.

But Alcoa's own restive shareholders and the voracious appetite of cash-rich rivals mean the 63-year-old Alcoa chief faces a long, expensive campaign to win Alcan, and a real risk that his own company could end up in play.

Mr. Belda said yesterday in an interview that there are unbeatable benefits in a union of Alcoa and Alcan, including $1-billion in annual cost savings and a neat fit of global smelters and mining properties. He said: "No one else can come close to what we have to offer as a mining company, and as the builder of a great Quebec company."

That doesn't mean others won't try to top his bid, or take out Alcoa. Mr. Belda acknowledged with a smile yesterday: "The problem with our industry now is cash. Those companies with exposure to copper and nickel, the commodities that China needs, are rolling in cash."

BHP Billiton Ltd., a player in all base metals, has had its eye on Alcan for two years at least.

The company more recently made takeover overtures even after the talks with Alcoa collapsed, said sources close to BHP. The world's largest mining company is interested in aluminum because it would diversify its product lines.

At a mining conference yesterday in Dublin, BHP head Chip Goodyear hinted that the company might be ready to go for Alcan, saying that BHP is interested in the sector. Mr. Goodyear said he liked companies whose focus is on smelting, where the key is low-cost power. This is a strength of Alcan's. According to people conference attendees, Mr. Goodyear said he would prefer not to make a hostile bid and likes the role of white knight.

Britain's Rio Tinto PLC has also been interested in Alcan "for some time," sources close to the company said. Tom Albanese, who is the company's CEO-elect, dodged questions on possible acquisitions when queried at the Dublin conference. Anglo American PLC, another British mining giant, is also considered a contender, and newly named CEO Cynthia Carroll is an Alcan veteran.

Alcoa only opted to table a hostile offer for Alcan after getting achingly close to a deal last fall, with agreement on the structure of the combined company and even a name: AlcoaAlcan. One stumbling block was something known as a "standstill agreement," which restricts a company's ability to pursue other opportunities while it is hammering out a merger. Alcan wanted a two-year lock-up, according to people familiar with the deal. Alcoa countered with one year, and was rejected in December.

Sources close to the discussions suggested that Alcan's board was divided on the merger, and said Alcan CEO Dick Evans appeared willing to move forward with the deal, while others were skeptical.

Skeptics can also be found among Alcoa's shareholders. New York hedge fund Jana Partners LLC put out a press release yesterday calling for Alcoa to cancel the proposed merger and instead put itself up for sale. Mr. Belda said Jana has had minimal contact with Alcoa, and said, "We have worked long and hard to come to this point, and believe the course we are on is in shareholder's best interest."

Bill Selesky, an analyst with Argus Research in New York, said Alcoa shareholders have grown "somewhat angry" over the stock's performance and pace of earnings growth. An Alcan takeover could help remedy these ills, he said, and perhaps gild the career of Mr. Belda, who has been "beat up" over the past few years by impatient investors.

"A lot of people view Alcoa management as being too laid back, not pushy enough, not aggressive enough," he said. "I think it's going to be a legacy for [Mr. Belda] - to go out with a bang."

Mr. Belda said legacy and long-term considerations are always top-of-mind, as mining projects typically tie up billions of dollars and play out over decades. On Alcoa's recent performance, he said, "When you look at our P/E ratio, we have done well on the E, the earnings, but would like to do better on the P [the price.]"

Rivals will get a better sense of what is under the hood at Alcan next week, when the Quebec government is expected to make public all electricity contracts between the province and the company.

Alcoa held off on an offer after Mr. Evans said early this year that Alcan's various agreements with the province, including water rights to the Saguenay River, could act as a "black box" that would thwart potential bidders. Alcoa was also reluctant to move forward on a possible hostile bid until the outcome of the Quebec elections in March.

Mr. Belda said he spoke yesterday with Quebec Premier Jean Charest, and "while he was quite passionate about what Alcan means for Quebec, he was open to listening to our plans."

On the issue of Alcan's hydroelectric operations, which supply the electricity that is central to producing aluminum, Mr. Belda joked: "We built some of those dams," referring to the fact that Alcan was spun out of Alcoa in 1928.

"These companies were together. For good reasons, they separated. There are now compelling reasons to put them back together," said Mr. Belda.

Alcoa has been mustering politically savvy types to help it with its takeover effort. These include Gordon Giffin, the former U.S. ambassador to Canada, and Jacques Ménard, who headed Hydro-Quebec and works for BMO Nesbitt Burns, one of the investment dealers advising Alcoa.

Major bauxite player in Jamaica is Russia's UC RUSAL

Jamaica Observer, Jamaica - Wednesday, May 09, 2007

Dennis Morrison

The world economic landscape is changing at an unprecedented rate and the effects of this change are evident right here in Jamaica.

At the start of the 1970s, the local bauxite industry was owned and operated by six transnational corporations - Alcan of Canada, and Alcoa, Reynolds, Kaiser, Revere and Anaconda, of the USA. The only western majors missing were the French-based Pechiney and Alusuisse of Switzerland. The tide of mergers and acquisitions, and uneven business fortunes have removed most of these names from the industry in the past 25 years.

Neither Pechiney nor Alusuisse exist any more, having been absorbed by Alcan. Reynolds was gobbled up by Alcoa which also took over Alumax, another important American aluminium company, when in the 1990s it joined Alcan as the two aluminium giants of the day aggressively pursuing acquisitions.

Anaconda was bought by Atlantic Richfield in the late 1970s, while Revere dropped out of the aluminium industry when it fell into financial difficulties and filed for Chapter 11 Bankruptcy Protection in 1982. It remains as a very small outfit nowadays. Kaiser is just now recovering to somewhat of its former self (less alumina and bauxite), after also emerging from Chapter 11 Bankruptcy Protection recently.

Today, Alcoa remains the only player from the early 1970s, with continuing operations in Jamaica, through its stake in the Jamalco facilities that involve bauxite mining and alumina refining in the mid-island parishes. The major player in Jamaica by far is now U C RUSAL, the Russian behemoth, which has just entered the local industry by absorbing Glencore's stakes in Windalco and Alpart. Glencore had taken an ownership stake in Jamaica's industry by acquiring Alcan's assets here in 2001, which was followed by a close contest at the auction for Kaiser's share of Alpart in 2004.

U C RUSAL is the product of the consolidation process that has taken place in the aluminium industry in post-Soviet Russia, the Ukraine and Kazakhstan, and now projects itself as the world's largest aluminium and alumina producer, operating in 17 countries across five continents. It is a merger of RUSAL and SUAL, the two aluminium entities around which much of the post-Soviet aluminium industry was organised and as indicated earlier, includes Glencore's alumina assets. All indications are that the company will expand and modernise its Jamaican assets as world bauxite resources become scarcer and as it seeks to enhance its position in a world industry that is becoming even more highly competitive.

Its advantages include the possession of low-cost hydro power for aluminium smelting, which is in surplus in the Commonwealth of Independent States (CIS), aluminium smelter capacity which can be expanded at lower capital cost than that for greenfield plants, a huge financial scale, proximity to European and Japanese markets, and access to capital. Its competitive position with regard to energy and its energy resource base are particularly important, given the current and projected high cost of energy globally. U C RUSAL has also inherited a strong research and development and technology apparatus from the Soviet period, that should allow it to function as a vertically integrated outfit deriving benefits from downstream activities.

The company was formed only in March 2007, eclipsing Alcoa as the largest producer of aluminium and alumina, but could lose its top ranking with the news of Alcoa's intention to acquire Alcan. This comes after rumours over many months that BHP Billiton Ltd., the world's biggest miner, and Rio Tinto, another large mining company, were making moves to acquire Alcoa. The word of Alcoa's intention has since been followed by another round of speculation that BHP Billiton could, after all, seek to buy Rio Tinto. This cycle of move and counter move should really not surprise market watchers because, for various reasons, the world has entered a new phase of mergers and acquisitions that mirror profound changes in the structure of the global economy.

The frenzy of mergers and acquisitions has been felt more in the financial services sector and in some manufacturing activities, but less so in the commodities business. That is changing rapidly as investors size up the long-term shifts in demand for commodities that are intensively used in the major growth sectors.

Alcoa may sell aerospace, automotive in Alcan deal

Reuters Thu May 10, 2007 8:41AM EDT

(Reuters) - Alcoa could divest parts of its aerospace and automotive businesses to satisfy regulatory requirements as part of any deal to buy Alcan, Alcoa said on Thursday.

"Overlaps are mostly in the aerospace business, and there is a slight one in automotive products," Alcoa Chief Executive and Chairman Alain Belda said, naming automotive sheet and heat exchangers in particular.

The combined company would continue to be investment grade, he said, adding the debt-to-equity ratio would approach 60-40 initially.

"We will remain investment grade," he said, speaking at a conference webcast from Dublin.

A combined Alcoa-Alcan -- which would be by far the world's biggest aluminium producer -- would give investors greater exposure to the price of aluminium (MAL3: Quote, Profile, Research, he said, describing the market for the metal as "strong in the short and long term".

Most of the combined company's sources of raw materials bauxite and alumina would be in the bottom half of the cost curve, he said, and it would itself generate 34 percent of the power it needed.

On Monday, Alcoa said it would make a hostile bid for Alcan for nearly $27 billion after talks between the two firms failed to lead to a deal.

UMC, Norsk Hydro sign MOU for $4bn aluminium project

WA Business News (subscription), Australia 15-May-07

by Mark Beyer

Perth-based exploration company United Minerals Corporation Ltd has reached a memorandum of understanding with Norwegian aluminium producer Norsk Hydro to form a joint venture to assess development of a $4-5 billion bauxite mine and alumina refinery in the Kimberley region.

The proposed project would be based on bauxite deposits in the remote Mitchell Plateau, locted north west of Wyndham.

UMC said the potential for an integrated bauxite mine and aluminium refinery was heavily driven by the expected development of gas projects in the Browse Basin, off the Kimberley coast.

These projects include Woodside's Browse project and Japanese company Inpex's Ichthys project.

"The joint venture will endeavour to take advantage of this historic availability of major energy sources in the Kimberley for the first time," the company said.

A UMC announcement is pasted below:


The Directors of United Minerals Corporation NL (UMC) advise that a Memorandum of Understanding (MOU) has been reached with Norsk Hydro's ("Hydro") subsidiary, Hydro Aluminium AS ("Hydro Aluminium") to form a joint venture. Norsk Hydro is a Fortune 500

Company with market capitalisation of approximately US$41 billion. It is one of the world's largest integrated aluminium producers and is owned 43% by the Norwegian Government.

Hydro Aluminium has established an excellent record in Australia's aluminium industry through its smelter operations in the Hunter region of New South Wales, where it wholly owns and operates the 170,000tpa aluminium smelter at Kurri Kurri and is a joint venture partner in the Tomago smelter.

The purpose of the joint venture will be to develop an integrated bauxite mine and alumina refinery in the Kimberley region of Western Australia. The cost of such an initiative is estimated in the order of A$4 5 billion including associated infrastructure. Success will depend on achieving a large and reliable supply of bauxite at an acceptable grade and an equally large and reliable supply of gas at commercially viable prices.

For the last 12 months, UMC's 100% subsidiary Bauxite Australia Pty Limited, has been exploring in areas adjacent to the Mitchell Plateau bauxite deposits. A year 1 drilling program commencing in 2006 made a successful start in identifying extensive bauxite mineralisation on the Company's leases.

The potential for a substantial integrated bauxite mine and alumina refinery is heavily driven by forthcoming developments of gas projects which have been announced for the Browse Basin off the Kimberley coast. The WA Government has created the policy framework to ensure that sufficient reserves of gas from these projects are dedicated to onshore domestic use. The joint venture will endeavour to take advantage of this historic availability of major energy sources in the Kimberley for the first time.

The joint venture is subject to completion of satisfactory due diligence and formal documentation. Hydro will hold 75% of the joint venture and UMC 25%. Once bauxite and energy requirements are generally satisfied, Hydro will contribute 100% of feasibility expenditure with respect to the alumina refinery through to the conclusion of a bankable feasibility study (BFS). UMC will have

the opportunity to participate in the project up to its 25% share.

NWA plans to restore smelter site

Dalles Chronicle, WA - May 14, 2007

Northwest plans to hire about 25 workers locally for maintenance and utility assignments

By ED COX of the Chronicle

Northwest Aluminum Company announced Friday that its former smelter plant in The Dalles will be dismantled and razed, and the site restored for sale and redevelopment over the course of the next two years.

Northwest Aluminum has entered into an agreement with Pro-SE Services, Inc., a California company specializing in engineering and demolition services, that includes the complete dismantling and demolition of the plant structures, removal of process materials and wastes, and preparation of the site for redevelopment.

According to a press release from the aluminum company, it will hire about 25 local workers to perform certain utility and maintenance services, The property will be offered for redevelopment upon completion of the project sometime in 2009.

According to a press release from the aluminum company, the site restoration project will have negligible environmental impact, pose no risk to the surrounding community and cause no disruption to neighboring businesses.

The US Environmental Protection Agency, the Oregon Department of Environmental Quality and the City of The Dalles will perform oversight for various phases of the project, according to the release.

The Dalles City Manager Nolan Young said the project will have four major impacts for The Dalles. First, he said, it means the end of the aluminum

industry in the direct community, though perhaps not the region, with a re-opening of the Goldendale plant "still an option" and a desirable one.

Second, he said, there will be some economic benefits to local workers and businesses, such as motels and restaurants serving the forces brought in by the sub-contractors.

Third, he said, the opening of 94 acres of additional flat, industrial land, now "pretty scarce" in the community, is a boon to economic development.

And fourth, the removal of the visual "blight" of an abandoned industrial plant improves the aesthetics of the city, he said.

Although the project be neither short nor easy, Young noted that "the task itself will be economic development, and the end product will be economic development."

Alcoa Captures Carbon

Red Herring, CA - May 15, 2007

CO2 capturing technology renders greenhouse gas emissions benign.

By Andrea Quong

In a baby step toward making dirty industrial processes cleaner, Alcoa, the world’s second largest producer of aluminum, said today it was starting to use a new technology to capture and render benign carbon dioxide emissions from its refineries.

The technology, which is being used at Alcoa’s alumina refinery in western Australia, will prevent 70,000 metric tons of carbon dioxide from being spewed into the atmosphere, an amount roughly equivalent to the annual emissions of 17,500 cars, the company said.

Capturing and storing carbon dioxide, the world’s most common greenhouse gas, is beginning to gain credence among climate change experts as a stopgap way to reduce greenhouse gas emissions from existing factories and plants until the clean technologies of the future -- renewable energy, alternative fuels, and the like -- can be fully developed.

"There’s a significant amount of demonstration being done where they’re testing the technology," said Kurt Zwally, manager for global warming solutions at the National Wildlife Federation, in Washington, D.C. "It’s not at industrial scale yet."

Alcoa is one of a number of companies that’s experimenting with the technology for use in heavily polluting industrial processes. In Alcoa’s case, carbon dioxide generated at its Kwinana alumina refinery will be captured and mixed with bauxite residue, a by-product of one of the steps of the aluminum-making process. The combination of the two compounds renders the CO2 benign and the resulting mix can then be used in bricks, roads, or in agriculture, Alcoa spokesperson Kevin Lowery said.

"It would be our intention to roll this out to all of our Australia refineries and from there to expand it to all of our refineries worldwide," Mr. Lowery said.

Alcoa, which generates more than 33 million metric tons of carbon dioxide emissions a year worldwide, has wrestled its greenhouse gas emissions down to 75 percent of its 1990s levels, he said. Capturing the carbon dioxide from Alcoa’s alumina refineries in Australia could reduce annual emissions by 300,000 metric tons; applied to all of the company’s nine refineries worldwide, the air could be spared more than one million metric tons per year, according to Mr. Lowery.

But technology still hasn’t yet taken hold in the arena where it could make the biggest impact – coal-fired power plants. "Coal’s going to be part of our energy mix for quite a long time," said Mr. Zwally. "We need to be able to use this to capture CO2 at power plants."

Alcan could be predator

Montreal Gazette, Canada - Tuesday, May 15, 2007

Alcan Inc. could decide to execute "the Pac-Man defence" and gobble up Alcoa Inc. instead of being snared by the U.S.-based aluminum producer in a hostile takeover, some industry analysts say.

A bid by Montreal-based Alcan for the larger Alcoa would only require one head office -- in Montreal -- and could be a lot easier to swallow for regulators and politicians on both sides of the Atlantic, New York analyst John Tumazos said in a note to clients.

"Canadians are not unpopular in the world these days," Tumazos, of Prudential Equity Group, wrote in a May 13 note to clients that sketched the pros and cons of a reverse takeover.

Not only would the Quebec government likely prefer that a Canadian company hold long-term water rights now ceded to Alcan, new deals in the Middle East and elsewhere might evolve more smoothly, Tumazos said.

"Simpler regulatory issues in Euruope might sidestep anti-Americanism if Alcan were the buyer," he said.

Carol Levenson, director of research at Gimme Credit, a New-York independent research firm on corporate bonds, told her clients that "Alcan is unlikely to go quietly."

"We would not be surprised to see the compnay make a leveraging defensive move itself, perhaps eve an Pac-Man defense of going after Alcoa," Levenson said in a note to clients.

According to the New York Times, which yesterday reported on Tumazos' suggestion of a reverse bid by Alcan, the tactic first gained currency in the 1980s, when it was dubbed the Pac-Man defense, after the popular video game in which players could change roles and go after their pursuers.

The strategy seemed to get a thumbs-up in Quebec's National Assembly yesterday. Responding to a question from the opposition, Economic Development minister Raymond Bachand said that he too wished it was Alcan, "this jewel of Quebec" that was proposing an Alcoa takever.

On May 7, Alcoa CEO Alain Belda held a press conference in Montreal to annouce his company's $33 billion U.S. bid for Alcan, pledging, among other things, that the new combined company would have dual headquarters in New York and Montreal and it would beef-up its investment committment to Quebec.

© The Gazette 2007

Martha Finn Brooks Named President of Novelis Inc.

PR Newswire (press release), NY - May 16, 2007

Board of Directors and Executive Team Announced

ATLANTA, May 16 /PRNewswire-FirstCall/ -- Novelis Inc. today announced the appointments of Martha Finn Brooks as President and Chief Operating Officer and Steve Fisher as Chief Financial Officer, effective immediately.

The appointments follow the acquisition yesterday of Novelis by Hindalco Industries Limited (BSE: HINDALCO) .

Novelis also announced its Board of Directors, led by Kumar Mangalam Birla as Chairman. Mr. Birla is also Chairman of Hindalco Industries Limited and of the Aditya Birla Group.

Debu Bhattacharya, Managing Director of Hindalco, has been named Vice Chairman of the Novelis Board.

Other Novelis Board members named today were:

-- A.K. Agarwala, former Director of Hindalco and currently Chairman of

the Business Review Council of the Aditya Birla Group.

-- Clarence Chandran, Novelis Board member since 2005, Chairman of the

Chandran Family Foundation Inc., and of the Conros Corporation.

-- Donald A. Stewart, Chief Executive Officer of Sun Life Financial Inc.

and Sun Life Assurance.

In her new position as President, Ms. Brooks becomes the senior Novelis executive, responsible for all global activities of the aluminum rolling and recycling company.

Edward Blechschmidt, who has been Acting Chief Executive Officer of Novelis since January of this year, will step down from that role but will continue to provide support in the role of senior advisor to Hindalco.

Ms. Brooks has been Chief Operating Officer of Novelis since the company's 2005 creation via spin-off from Alcan Inc. Since then, she has led the effort to shape Novelis into a world leader in the aluminum industry, emphasizing innovation and customer partnership, and championing Continuous Improvement and Lean Six Sigma processes throughout the operations.

"Martha has been an essential element in the building of Novelis over the past two years," said Mr. Bhattacharya, "and she will make a great leader for the company as we look to accelerate the Novelis business strategy and maximize the opportunities for both Novelis and Hindalco.

"I would also like to thank Ed for his contribution to Novelis," said Mr. Bhattacharya, "stepping into the role of Acting CEO and guiding Novelis through its acquisition by Hindalco. I look forward to Ed's continued guidance as an advisor to me and Hindalco in the coming months."

Prior to joining Novelis, Ms. Brooks was President and Chief Executive Officer of the Americas and Asia division of Alcan's Rolled Products group, a position she held since 2002. Before that, she was Vice President at Cummins Inc., a leading producer of electric power generation systems and engines.

Ms. Brooks is a director of the International Paper Company and a member of the Board of Trustees of the Manufacturer's Alliance. She is also a trustee of the Yale-China Association, Keep America Beautiful Inc., and the Hathaway Brown School. She holds a BA in economics and political science and a Masters of Public and Private Management, specializing in international business, from Yale University.

Steve Fisher, newly appointed Chief Financial Officer, was previously Vice President of Strategic Planning and Corporate Development. Mr. Fisher was a chief architect of Novelis' corporate strategy and managed the discussions that led to the acquisition of Novelis by Hindalco. Prior to joining Novelis in 2005, he spent 13 years in a variety of consulting and management roles in the energy field, most recently as Vice President and Controller for TXU Energy, the non-regulated subsidiary of TXU Corp. Mr. Fisher holds a BBA in finance and accounting from the University of Iowa and is a certified public accountant.

"Steve has a strong track record of financial leadership," said Mr. Bhattacharya, "and we look forward to his contribution in his new position, leading the financial activities of Novelis within Hindalco."

Rick Dobson, Senior Vice President and Chief Financial Officer since 2006, will step down from that position, but will remain in an advisory role during a transition period.

Mr. Bhattacharya said, "We thank Rick for his contribution during a challenging time for Novelis as it emerged from a complicated and difficult spin process, and we wish him well in his new endeavors."

Additional members of the corporate team announced today include Les Parrette as General Counsel, Chief Compliance Officer and Corporate Secretary, and Bob Virtue as Vice President of Human Resources. Brenda Pulley continues as Vice President Corporate Affairs and Communications.

The company's four regional Presidents continue in their current roles: Kevin Greenawalt in North America, Arnaud de Weert in Europe, Tom Walpole in Asia, and Tadeu Nardocci in South America.

About Novelis

Novelis, a subsidiary of Hindalco Industries Limited, is the global leader in aluminum rolled products and aluminum can recycling. The Company operates in 11 countries, has approximately 12,900 employees, and reported revenue of $9.8 billion in 2006. Novelis supplies premium aluminum sheet and foil products to automotive, transportation, packaging, construction, industrial and printing markets throughout North America, Europe, Asia and South America. For more information, visit

About Hindalco

Hindalco Industries Limited is Asia's largest integrated primary producer of aluminum and a leading integrated producer of copper. Based in Mumbai, India, Hindalco recorded revenues of approximately US$4.3 billion for the fiscal year ended March 31, 2007. Hindalco's integrated operations and operating efficiency have positioned the company among the most cost-efficient aluminum producers globally. Hindalco's stock is publicly traded on the Bombay Stock Exchange, the National Stock Exchange of India Limited and the Luxembourg Stock Exchange. Visit

'Russian Aluminum' and 'GidroOGK' Start Construction of Boguchansky Aluminum Plant

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

MOSCOW, May 16. /FIS/. A VIP ceremony of the stone laying was held today in the settlement of Tayozhniy, Boguchansky district, Krasnoyarsk Krai. The aluminum plant will have electrolyzing, casting and anode works and power supply and infrastructure objects. The enterprise will be equipped with electrolyzers RA -300 developed by the engineering and technological center of the united company, which are rated among the world's three best technologies.

Jazan project signs US firm

AME Info, United Arab Emirates - Wednesday, May 16 - 2007 at 13:13

Saudi Arabia

Saudi's Western Way for Industrial Development has signed agreements with the US' Gerald Metals relating to a proposed aluminium plant at Jazan Economic City. Gerald will supply bauxite to the plant and buy all the aluminium produced. Gerald has also agreed to fund 20% of the $4bn project, according to the promoters of JEC.

Alcoa urges Alcan to avoid delays in takeover play

Montreal Gazette, Canada Thursday, May 17, 2007

Lynn Moore, The Gazette

Alcoa Inc. yesterday asked Alcan Inc.'s board not to delay its consideration of whether Alcoa meets the terms set out in an energy deal between Alcan and the Quebec government.

Any delay that Alcoa faces in getting its deal done, increases the odds of another company moving in and attempting to take Alcan or Alcoa or both, said Robert Mantse, senior vice-president of the bond rating firm DBRS.

"The more time you give other players to look at the deal, to figure it out" the greater the risk, Mantse said from the Toronto.

In a letter to Alcan's board of directors, Alcoa CEO Alain Belda, wrote, "We understand that the continuity agreement permits you to defer consideration of our proposals for Qubec until a later date. We believe however it is in all parties' interests, including those of Qubec, for you to commence such consideration at this time," Belda wrote.

According to the fine print of the 10-page Alcan-Quebec pact, Alcan's board may choose not to begin that consideration until the requirements of all regulatory bodies and authorities examining an Alcan takeover or acquisition have have been met.

That would include, according to a senior government official conversant with the deal, requirements made by anti-trust authorities in Canada, the U.S., the European Union and elsewhere.

"Everyone is watching everyone else but not everyone has a full process in place (yet)," said Mantse who is among the analysts who believe that Alcan could execute a "Pac-Man defence" and go after Alcoa.

Mantse noted that when Inco Ltd. and Falconbridge Ltd. tried to merge, both companies were put into play. And that friendly merger was held up by EU regulators long enough for other companies to come into the matrix. Inco eventually went to Companhia Vale do Rio Doce (CVRD) while Falconbridge was taken by Xstrata PLC.

Other observers contend that time is not a huge factor in the Alcoa bid.

A Toronto-based analyst, who asked not to be identified, said that he believes delay will not deter a mammoth mining companies such as Rio Tinto PLC and BHP Billiton PLC that might be eying Alcan.

"They will wait until the last minute to make their move and it doesn't matter" when that occurs, the analyst said.

Alcan spokeswoman Anik Michaud said that Belda's letter was received and "consideration of the letter will follow due process."

Alcan has until Tuesday to respond formally to Alcoa's cash and stock bid, worth an estimated $33-billion U.S.

In his letter to Alcan board chairman Yves Fortier, Belda said that Alcoa firmly believes that its proposals "fulfil the letter and sprit of the continuity agreement and that no one else can match the benefits we offer to Alcan's stakeholders in this and many other respects."

Alcan shares closed at $90 on the Toronto Stock Exchange yesterday, up 69 cents.

© The Gazette 2007

UPDATE 1-Alcoa would keep Alcan's Quebec, global projects

Reuters Thu May 17, 2007 9:53AM EDT

MONTREAL, May 17 (Reuters) - Alcoa Inc. (AA.N: Quote, Profile, Research said on Thursday that under its $28 billion takeover for Alcan Inc. (AL.TO: Quote, Profile, Research, it would keep the Canadian company's Quebec and global expansion projects.

Alcoa said it sent a letter to Alcan's board of directors outlining how it would meet the Canadian company's obligations on investment in Quebec when combining the operations of the two big aluminum makers.

Alcoa said it not only would honor both company's current plans for expansion and job growth in Quebec, but was prepared to carry forward three key Alcan projects worldwide.

Those listed were: a 720,000-tonne aluminum smelter at Coega, South Africa; the 2008 start-up of the 350,000-tonne Sohar smelter joint venture in Oman; and a new integrated power plant, alumina refinery and 720,000-tonne aluminum smelter at Ma'aden, Saudi Arabia.

Alcan has a preferential power rate under long-term contracts with Quebec government-owned utility Hydro-Quebec, and waterways rights that are key to its ability to economically produce aluminum in the Canadian province.

In return, Alcan has made commitments on investing in the province and maintaining its head office in Montreal. Alcoa said its unsolicited offer honors those commitments.

Rapid Chinese aluminum production increases could harm high metal price

Mineweb, South Africa - Thursday , 17 May 2007

Cheap alumina could tempt China to restart its idled aluminum production, shifting the aluminum market into surplus, generating a fall in aluminum prices, according to a recently published Standard & Poor’s scenario.

Author: Dorothy Kosich

Standard & Poor's Rating Services forecasts that the price of aluminum will gradually begin to decline, primarily because of the rapid decline in the price of alumina as China ramps up its production.

S&P Primary Credit Analyst Thomas Watters calculates that aluminum prices should fall to $1 or $1.10 per pound for 2007. "Still there's no doubt that the average price of aluminum should remain considerably above the average price curve of the past five years," he added.

"Despite expectations of good aluminum prices, challenges to the credit quality of primary aluminum should remain considerably above the average price curve of the past five years," Watters said.

China increased its alumina capacity by 60% last year, or about 22% of world alumina supply, according to S&P's research. "By current estimates, that will nearly double to 28 metric tons per year by the end of 2008," Watters wrote. He anticipates that China will achieve self-sufficiency in alumina production in 2009.

"In addition we expect that alumina producers will use hedging techniques to lock in lower alumina prices," he said. "Lastly, with export rebates on semifabricated aluminum producers still intact, Chinese producers have an incentive to export these products, which increases the demand for local primary aluminum production."

"The question remains how quickly access to this cheap alumina will tempt China to increase its idled aluminum production and shift the market into a surplus," Watters suggested. The International Aluminum Institute said Chinese aluminum production has already increased 40% since the beginning of the year.

Watters suggested that the Chinese government could change its rebate structure and impose tariffs on semifabricated products, adding that a tariff on them could reduce the need for additional local primary aluminum supply.

Sizing up Kaiser: -- It's doing just fine

The Spokesman Review, WA - May 17, 2007

Bert Caldwell, The Spokesman-Review

Kaiser Aluminum Corp., once a global heavyweight, now bobs along outside the metals industry mainstream.

Since emerging from bankruptcy last July, the company has focused on high-end manufacturing. Barely anything remains of its once far-flung mining, refining and smelting operations. Locally, the Mead smelter where 1,000 men and women once toiled for good, family wage jobs has been gutted. But the Trentwood rolling mill rolls on.

In fact, as Kaiser's first-quarter earnings report makes clear, Trentwood is the company's mainstay. While announcing results that disappointed investors — Kaiser shares have tumbled more than 13 percent over the last two days — the earnings release highlighted the contributions of its fabrication operations in general, and Trentwood in particular.

Two new heat-treat furnaces have been installed, and a third is due early next year. So is a stretcher that, by pulling a plate several inches thick, improves its metallurgical characteristics. That equipment will wind up a $105 million expansion at Trentwood, but perhaps just for the time being. Chief Executive Officer Jack Hockema told analysts Tuesday the company continues to monitor demand for treated metal, which has several applications in aerospace manufacturing.

Kaiser is also an interested spectator of the consolidation, real and proposed, in the aluminum industry. Although unwilling to discuss specifics, Hockema made clear the company's readiness to pick off assets other aluminum producers might sell off as they respond to new challenges in the metals industry.

Unlike the pre-bankruptcy Kaiser, which foundered beneath $3 billion in debt, the reorganized company has the cash and cash flow to be a player.

"We have a lot of dry powder," said Hockema. "We see ourselves as well-positioned to be a buyer of assets that are attractive for our portfolio."

He added that, because Kaiser has about $1 billion in tax offsets available, buying assets in the United States makes the most sense. He did not rule out purchases overseas.

He did not mention Canada, where the latest of the metals mega-mergers will play out unless another company steps into the middle of the proposed purchase of Alcan Inc. by Alcoa Inc. Alcan is one of the crown jewels of Canadian industry and, as importantly, manufacturing in Quebec. The French-speaking province may have much to say about a potential takeover by Alcoa, based in Les États-Unis.

Last week's conference call by Alcoa officials contained some clues about potential opportunities for Kaiser. Chief Executive Officer Alain Belda said the company had already had some discussions with regulators regarding possible over-concentration of assets in some businesses. Aerospace, he said, "is probably the most significant one."

One of the plants that could be in play is at Ravenswood, W.Va. That would certainly be a facility familiar to Kaiser; Ravenswood was a Kaiser plant until 1989.

Aluminum Pellets May be New Fuel for 21st Century, FL - Saturday, May 19, 2007

Pellets made out of aluminum and gallium can produce pure hydrogen when water is poured on them, offering a possible alternative to gasoline-powered engines, U.S. scientists say.

Hydrogen is seen as the ultimate in clean fuels, especially for powering cars, because it emits only water when burned. U.S. President George W. Bush has proclaimed hydrogen to be the fuel of the future, but researchers have not yet found the most efficient way to produce and store hydrogen.

The metal compound pellets may offer a way, said Jerry Woodall, an engineering professor at Purdue University in Indiana who invented the system.

"The hydrogen is generated on demand, so you only produce as much as you need when you need it," Woodall said in a statement. He said the hydrogen would not have to be stored or transported, taking care of two stumbling blocks to generating hydrogen.

For now, the Purdue scientists think the system could be used for smaller engines like lawn mowers and chain saws. But they think it would work for cars and trucks as well, either as a replacement for gasoline or as a means of powering hydrogen fuel cells.

"It is one of the more feasible ideas out there," Jay Gore, an engineering professor and interim director of the Energy Center at Purdue's Discovery Park, said in a telephone interview on Thursday. "It's a very simple idea but had not been done before."

On its own, aluminum will not react with water because it forms a protective skin when exposed to oxygen. Adding gallium keeps the film from forming, allowing the aluminum to react with oxygen in the water.

This reaction splits the oxygen and hydrogen contained in water, releasing hydrogen in the process.

"I was cleaning a crucible containing liquid alloys of gallium and aluminum," Woodall said. "When I added water to this alloy -- talk about a discovery -- there was a violent poof."

What is left over is aluminum oxide and gallium. In the engine, the byproduct of burning hydrogen is water.

"No toxic fumes are produced," Woodall said.

United Company RUSAL and HydroOGK to put up Boguchanskiy aluminum plant

Ural Business Consulting, Russia - May 17, 2007

United Company RUSAL and HydroOGK started the construction of Boguchanskiy aluminum plant; the future facility will be capable of producing 600,000 tons of aluminum a year and is going to hit Russia’s top five largest aluminum plants. The project requires over $2.3 billion worth of investments. The plant is expected to be launched in December 2009 and to reach its full capacity in the second quarter of 2011.

According to the two companies’ press release, the new plant will be part of a large Boguchanskiy power engineering and metallurgical enterprise comprising an electrolysis shop, a foundry, an anodic unit, and electricity-generating and maintenance facilities.

‘Boguchanskiy aluminum plant is one of the five enterprises currently built by United Company RUSAL throughout Russia. I’m positive we’ll be able to use the experience we obtained while working on Khakas aluminum plant in this project,’ RUSAL chairman Alexander Bulygin says.

‘This is the first time HydroOGK is taking part in the construction of an aluminum plant. Our company is to become the main consumer of electricity supplied by Boguchanskaya power station, and the whole project will greatly facilitate the development of Lower Angara Region,’ HydroOGK chairman Vyacheslav Sinyugin reports.

The symbolic laying of the foundation stone took place in the village of Tayozhniy, Boguchanskiy district; the ceremony was attended by Governor of Krasnoyarsk Territory Alexander Khloponin, RAO UES of Russia chairman Anatoly Chubais, RUSAL BOD member Oleg Deripaska, RUSAL chairman Alexander Bulygin, and HydroOGK chairman Vyacheslav Sinyugin.

Bechtel named top U.S. contractor

Construction and Maintenance News, Belarus - May 17, 2007

US construction firm Bechtel has been named the top U.S. contractor for the ninth consecutive year by Engineering News-Record (ENR), a leading U.S. trade publication for the construction industry. ENRs Top 400 Contractors list is based on revenue. In 2006, Bechtel had its fourth straight record year with revenue of $20.5 billion, a 13 percent increase over 2005. Bechtels project highlights for 2006 included the start of work in India on expansion of what will be the worlds largest refinery; collaboration with the University of California on management and operation of Los Alamos National Laboratory, the nations premier institution for defense research; successful work on high-profile civil projects ranging from the London Underground to the Tacoma Narrows Bridge in Washington state; the completion of two major power plants ahead of schedule; progress on construction of aluminum smelters in Oman and Iceland; and ongoing work to upgrade Cingulars wireless network across the United States.

Since its founding in 1898, Bechtel has worked on more than 22,000 projects in 140 countries on all seven continents. Today Bechtels 40,000 employees are teamed with customers, partners, and suppliers on hundreds of projects in nearly 50 countries.

UAE eyes stakes in bauxite firms

Gulf Daily News, Bahrain Saturday 19th May 2007

DUBAI: Abu Dhabi government investment agency Mubadala Development said it plans to join state-run Dubai Aluminium to create a company to buy stakes in bauxite mining companies and develop reserves of the ore.

The two companies will set up Emal International to look at acquisitions or developments in countries such as Algeria, Morocco and India, Mubadala's chief operating officer Waleed Al Muhairi said yesterday.

The two already joined to build a 1.4 million tonnes a year aluminium smelter in the UAE and bought into a $3 billion Global Alumina project in the African nation of Guinea.

"The issue here is the security of supply of alumina," Muhairi said

Mubadala and Dubai Aluminium joined with Australia's BHP Billiton to buy two-thirds of the Global Alumina project in Guinea that includes mining for bauxite and building a refinery to make alumina, or semi-processed bauxite.

The refinery, which will be complete as early as 2009, will have capacity of 3m tonnes a year of alumina, Muhairi said.

United Company RUSAL Begins Construction of Eurasia's Largest Bauxite and Alumina Complex

Russia Newswire (press release), Russia - 21/05/2007

MOSCOW (RNWire) – United Company RUSAL, the world's largest producer of aluminium and alumina, today announced completion of a state Feasibility Study appraisal for the construction of Komi Aluminium Bauxite and Alumina Complex in the Komi Republic. Investments into the project will exceed US $1.5 billion.

The project includes the construction of a 1.4 million tpa alumina refinery in the Komi Republic's Sosnogorsk region and capacity expansion at the operating Middle-Timan bauxite mine from 2.6 up to 6.4 million tpa. The feasibility study was developed by the Russian National Aluminium and Magnesium Institute (VAMI) which is part of United Company RUSAL.

Construction will commence in June 2007. The refinery will operate using state-of-the-art Bayer technology. The future refinery's infrastructure is currently being built at the production facility site in the Sosnogorsk region. Railway tracks have been laid from the Vorkuta-Moscow line to the site and a small concrete production plant has been built in addition to administrative and general-use buildings. All construction is being carried out by the Engineering and Construction Division (ECD) of United Company RUSAL.

Valery Matvienko, director of the Engineering and Construction Division commented: "The Komi Aluminium project is one of the company's top strategic priorities due to its potential to strengthen United Company RUSAL's raw materials base and play a crucial role in the implementation of greenfield smelter construction projects in Russia. The fact that an in-house engineering and construction division can manage this project at all stages - from feasibility study development to commissioning and maintenance - gives United Company RUSAL the opportunity to quickly and efficiently implement business ideas and maintain production dynamics".

The proven reserves of the Eurasia Middle-Timan bauxite deposit, the largest in Russia and Eurasia, amount to 260 million tonnes. The complex is expected to be commissioned at the end of 2009 and will create more than 10,000 new jobs. The start-up of the complex will secure more than a 40% increase in Russia's alumina output. By completion of the project the total amount of investment in infrastructure development in the Komi Republic is expected to reach US $25 million.

Dubal enters into Dh11b joint venture

Khaleej Times, United Arab Emirates - 22 May 2007


DUBAI — Dubai Aluminium Company Limited (Dubal), the world's seventh largest producer of aluminium, yesterday said that it entered into a joint venture worth Dh11 billion ($3 billion) with three other companies to develop and operate an aluminium refinery project in the Republic of Guinea.

Abdullah Kalban, CEO of Dubal, said the project would bring tremendous benefits to Guinea's economy. It will create more employment opportunities and enhance the quality of life in the community of Kamsar, where the project will be built.

In a Press statement, Dubal, whose annual production of aluminium products will reach 920,000 metric tonnes by end-2008, announced its substantial investment in Guinea Alumina Corporation Limited (GAC), a wholly-owned subsidiary of Global Alumina International Limited (GAI).

The other parties to the joint project are Broken Hill Proprietary Company Pty Limited (BHP Billiton) and Mubadala Development Company PJSC (Mubadala).

"We are delighted to join hands with such reputed and experienced players," Kalban said. "The Guinea project is a key element of Dubal's global growth strategy and its vision to be among the top five aluminium producers in the world by 2015."

Under the agreement, Dubal will own a 25-per cent stake in GAC while GAI and BHP will each hold 33.33 per cent and, Mubadala, 8.33 per cent. It was also agreed that Dubal will at the same time enter into a long-term purchase and sale agreement with GAC regarding the alumina to be produced at Sangaredi.

In a Press conference, Bruce Wrobel, co-chairman and CEO of Global Alumina International Ltd (GAI), said the $2 billion of the $3 billion project would be sourced from lateral and multi-lateral financial institutions and won't be needed until the end of this year, when construction of the project starts.

"With this joint venture, we hope that we'd be more attractive in terms of pricing and financing," he said, adding that the lenders are reviewing the recent changes in the project design.

Wrobel said the joint project would have the initial capacity to produce three million tonnes (mt) of alumina per year, and which could later on be increased to five mt, and then to 10 mt.

Officials of the companies expressed confidence in Guinea, whose government is headed by its Prime Minister.

"It is pretty stable," said Karim Karjian, co-chairman of Global Alumina. He noted that officials of Guinea's new government vowed a "100 per cent support" for the Sangaredi Refinery Project that would begin producing alumina in 2009 to 2010, after the construction period.

Headquartered in New Brunswick and with administrative offices in New York, London, Montreal and Conakry (Guinea), GAI is set to be one of the few companies dedicated to producing and selling alumina. BHP is the world's sixth largest producer of primary aluminium while Mubadala is a principal investment company owned by the Government of Abu Dhabi.

BHP has an annual production capacity of one million tonnes of aluminium, some 14 million tonnes of bauxite, and four million tonnes of alumina.

Dubal said Guinea is known to have some one-third of the world's bauxite reserves. It added that the Sangaredi project would assure Dubal of a long-term access to low-cost alumina.

Bauxite is an ore needed to produce alumina, a chemical compound of aluminium and oxygen.

Dubal added that the project would include a mine facility with the capacity of extracting nine million metric tonnes of bauxite per year. And with its 690-squre kilometre mining concession, the Sangaredi Refinery Project is assured of bauxite reserves of some one billion tonnes.

Alcan Shareholders Urged To Reject Alcoa's Bid

Bloomberg News, May 23, 2007


Alcan Inc., a Canadian aluminum producer, urged shareholders to reject a $27.4 billion bid from competitor Alcoa Inc. as "inadequate" and said the board of directors has been in talks with other potential suitors.

The $74.60-a-share offer "does not adequately reflect the value" for Montreal-based Alcan and "does not offer an appropriate premium for control," the chairman, Yves Fortier, said yesterday in a filing. "Alcan and Alcoa have fundamentally different approaches and track records in creating shareholder value."

Alcoa wants to create the world's largest aluminum company, head off competition from Chinese producers and avoid becoming a takeover target for mining companies including BHP Billiton Ltd. and Rio Tinto Plc. Shares of Alcan have jumped 33% since the May bid, topping the offer from New York-based Alcoa.

"To get this done, Alcoa is going to need to sweeten its bid," a metals analyst at Standard & Poor's in New York, Leo Larkin, said in an interview before yesterday's announcement. "Alcoa is going to do whatever it takes to get this deal done."

RUSAL Launch Climate Change Initiative May 23rd, 2007

UC RUSAL, the world’s largest producer of aluminium and alloys, announces today a new initiative entitled Paving The Way To A Safer World, which is comprised of measures to reduce harmful impact on the environment and minimise climate change risks.

This initiative is part of UC RUSAL’s wider strategy to secure its dynamic development as an energy and metals corporation with the Company’s operations based on the principles of sustainable development.

The Intergovernmental Panel on Climate Change (IPCC) stated in its most recent climate report that the major cause of observed rising trends in the Earth’s average temperatures is very likely increased concentrations of identified greenhouse gases in the atmosphere produced by human activity.

UC RUSAL understands the importance of climate change to future generations and has established two related goals:

To reduce direct greenhouse gas emissions by the company’s existing smelters by 50% overall by 2015. Achievement of this goal will allow UC RUSAL to continue developing its aluminium business and meet the demands of global consumers without compromising its goal of carbon neutrality;

To be carbon neutral over the long-term, as part of the full life-cycle use (and re-use) of our aluminium products. Improved unit energy efficiency at our operations will be the key element of the drive to carbon neutrality, supplemented by a broad offsets program.

Since 2000, the companies now comprising UC RUSAL have invested over USD 1 bln in environment protection activities. For 2007-2013, the United Company has allocated USD 1.4 bln for operations reconstruction programmes focused on environmental protection. This will allow for a reduction in pollutant emissions by almost 1.5 times by 2015. The larger-scale modernisation programme will bring all of UC RUSAL’s smelting facilities to a single environmental standard.

"As a global company, we believe that UC RUSAL must take an active leadership role in global issues. We realize that leadership is first and foremost about taking responsibility – responsibility for the environment in the countries where we operate, responsibility in terms of the highest international safety standards and responsibility for the lives of the people around us. I believe that the threat of serious climate change can and must be avoided through practical steps focused on reducing GHG emissions. I hope that the Environmental Care Programme that we are implementing – and that is based on the use of clean energy and modern technologies – as well as the new initiative we announced today will be a powerful call for joint action, " said Alexander Bulygin, UC RUSAL CEO.

The efficient increase of consumption and utilisation of environmental-friendly energy are key elements of UC RUSAL’s carbon neutrality strategies. UC RUSAL uses hydro-electricity to produce up to 80% of its aluminium output, minimising greenhouse gas emissions and eliminating other negative environmental effects. By 2013, the Company plans to produce 140 billion kWh of energy at its own generating facilities. Hydropower projects are at the centre of UC RUSAL’s development plans. UC RUSAL is also committing substantial time and investment to researching the possibilities of more efficient and environmentally friendly use of coal.

Re-melting of aluminium requires only 10% of the energy to produce primary aluminium, which produces a positive contribution to sustainable development through substantial energy savings. By 2013, the United Company is planning to have increased its share on the secondary aluminium market to 50%.

As a first step, and to advance the Company’s carbon reduction initiative, UC RUSAL and the United Nations Development Programme have signed a memorandum of understanding (MOU) regarding a preparatory project designed to accelerate greenhouse gas emissions reduction efforts among industrial companies. The MOU was signed in Moscow today. UC RUSAL is the first company in Russia to have joined UNDP in its effort to create a global network of projects driven by the single goal of addressing the challenge of climate change.

"The climate change initiative of UC RUSAL marks a new stage in the development of Russian business and underscores the need for further commitment to sustainable development principles and, ultimately, a safer future for the planet. I hope that this initiative and the agreement we have signed today will create additional momentum, urging other Russian companies to implement large-scale measures to reduce emissions and minimise climate change risks," said Marco Borsotti, Russia Coordinator for the United Nations Development Programme.

RUSAL Complete Feasibility Study on 1.4M tpa Alumina Plant May 23rd, 2007

United Company RUSAL, the world’s largest producer of aluminium and alumina, today announced completion of a state Feasibility Study appraisal for the construction of Komi Aluminium Bauxite and Alumina Complex in the Komi Republic. Investments into the project will exceed US $1.5 billion.

The project includes the construction of a 1.4 million tpa alumina refinery in the Komi Republic’s Sosnogorsk region and capacity expansion at the operating Middle-Timan bauxite mine from 2.6 up to 6.4 million tpa. The feasibility study was developed by the Russian National Aluminium and Magnesium Institute (VAMI) which is part of United Company RUSAL.

Construction will commence in June 2007. The refinery will operate using state-of-the-art Bayer technology. The future refinery’s infrastructure is currently being built at the production facility site in the Sosnogorsk region. Railway tracks have been laid from the Vorkuta-Moscow line to the site and a small concrete production plant has been built in addition to administrative and general-use buildings. All construction is being carried out by the Engineering and Construction Division (ECD) of United Company RUSAL.

Valery Matvienko, director of the Engineering and Construction Division commented: "The Komi Aluminium project is one of the company’s top strategic priorities due to its potential to strengthen United Company RUSAL’s raw materials base and play a crucial role in the implementation of greenfield smelter construction projects in Russia. The fact that an in-house engineering and construction division can manage this project at all stages - from feasibility study development to commissioning and maintenance - gives United Company RUSAL the opportunity to quickly and efficiently implement business ideas and maintain production dynamics".

The proven reserves of the Eurasia Middle-Timan bauxite deposit, the largest in Russia and Eurasia, amount to 260 million tonnes. The complex is expected to be commissioned at the end of 2009 and will create more than 10,000 new jobs. The start-up of the complex will secure more than a 40% increase in Russia’s alumina output. By completion of the project the total amount of investment in infrastructure development in the Komi Republic is expected to reach US $25 million.

Gallium and aluminum tigers in your tank?

Inside Greentech (press release), CA -May 23, 2007 -

Exclusive By Dallas Kachan, inside greentech

An Indiana startup called AlGalCo is to commercialize a Purdue University research development that extracts hydrogen from water using aluminum and gallium as catalysts.

Researchers say the process could provide hydrogen-on-demand for fuel cells or internal combustion engines, with the possibility of replacing gasoline.

The method makes it unnecessary to store or transport hydrogen—two major challenges in creating a hydrogen economy, said Jerry Woodall, a professor of electrical and computer engineering at Purdue who first invented the process while working as a researcher in the semiconductor industry in 1967.

"The hydrogen is generated on demand, so you only produce as much as you need when you need it," said Woodall, who presented research findings detailing how the system works during a recent energy symposium at Purdue.

Woodall and student researchers (photo) >

The technology could be used to drive small internal combustion engines in various applications, including portable emergency generators, lawn mowers and chain saws. The process could, in theory, also be used to replace gasoline for cars and trucks, he said.

Hydrogen is generated when water is added to pellets of the alloy, which is made of aluminum and a metal called gallium. The researchers have shown how hydrogen is produced when water is added to a small tank containing the pellets.

The oxygen and hydrogen contained in water split, releasing hydrogen in the process.

The gallium is critical to the process because it hinders the formation of a skin normally created on aluminum's surface after oxidation. This skin usually prevents oxygen from reacting with aluminum, acting as a barrier. Preventing the skin's formation allows the reaction to continue until all of the aluminum is used.

The Purdue Research Foundation holds title to the primary patent, but AlGalCo LLC has received a license for the exclusive right to commercialize the process. As of press time, the company had not responded to inquiries from Inside Greentech. Nor does it yet have a web site.

Woodall says it was by accident that he discovered the process while working as a researcher in the semiconductor industry.

"I was cleaning a crucible containing liquid alloys of gallium and aluminum," Woodall said. "When I added water to this alloy—talk about a discovery—there was a violent poof. I went to my office and worked out the reaction in a couple of hours to figure out what had happened."

In order for the technology to be economically competitive with gasoline, Woodall says the cost of recycling aluminum oxide must be reduced.

"Right now it costs more than $1 a pound to buy aluminum, and, at that price, you can't deliver a product at the equivalent of $3 per gallon of gasoline," Woodall said.

However, the cost of aluminum could be reduced by recycling it from alumina using a process called fused salt electrolysis, he said. The aluminum could be produced at competitive prices if the recycling process were carried out with electricity generated by a nuclear power plant or windmills.

Because the electricity would not need to be distributed on the power grid, it would be less costly than power produced by plants connected to the grid, and the generators could be located in remote locations, which would be particularly important for a nuclear reactor to ease political and social concerns, Woodall said.

Even at the current cost of aluminum, however, the method would be economically competitive with gasoline if the hydrogen were used to run future fuel cells, he said.

"Using pure hydrogen, fuel cell systems run at an overall efficiency of 75 percent, compared to 40 percent using hydrogen extracted from fossil fuels and with 25 percent for internal combustion engines," Woodall said. "Therefore, when and if fuel cells become economically viable, our method would compete with gasoline at $3 per gallon even if aluminum costs more than a dollar per pound."

The technology underscores aluminum's value for energy production.

"Most people don't realize how energy intensive aluminum is," Woodall said. "For every pound of aluminum you get more than two kilowatt hours of energy in the form of hydrogen combustion and more than two kilowatt hours of heat from the reaction of aluminum with water. A midsize car with a full tank of aluminum-gallium pellets, which amounts to about 350 pounds of aluminum, could take a 350-mile trip and it would cost $60, assuming the alumina is converted back to aluminum on-site at a nuclear power plant."

"How does this compare with conventional technology? Well, if I put gasoline in a tank, I get six kilowatt hours per pound, or about two and a half times the energy than I get for a pound of aluminum. So I need about two and a half times the weight of aluminum to get the same energy output, but I eliminate gasoline entirely, and I am using a resource that is cheap and abundant in the United States. If only the energy of the generated hydrogen is used, then the aluminum-gallium alloy would require about the same space as a tank of gasoline, so no extra room would be needed, and the added weight would be the equivalent of an extra passenger, albeit a pretty large extra passenger."

"If I can economically make hydrogen on demand, however, I don't have to store and transport it, which solves a significant problem," Woodall said.

Energy Dept.: Hydrogen claim has drawback

MSNBC - May 23, 2007

Refuting professor, it says alumina waste would require costly recycling

The U.S. Department of Energy on Wednesday strongly refuted a top university researcher's claim that department "egos" were hindering a breakthrough towards clean energy transportation based on hydrogen.

"A statement that DOE is ignoring a solution because of 'egos' goes against all the facts," DOE spokesman Jonathan Shrader told in an e-mailed response to the allegations last week by Purdue University engineer Jerry Woodall.

"The department takes stewardship of U.S. tax dollars and the nation's energy problems very seriously," Shrader said, adding that the Purdue requests for funding were not as good as other proposals. "All submitted applications are rigorously peer reviewed and only the top rated proposals are selected for funding," he said.

"Among the 502 pre-applications and pre-proposals" submitted for 2007, "only 249 submissions were encouraged, based on technical merit, to submit full proposals," he said. "In both reviews, the technical merit of Purdue University’s pre-proposal was judged insufficient to warrant the submission of a full proposal."

Shrader said that "a drawback in the (Purdue) concept is that in addition to hydrogen, alumina (aluminum oxide) is produced. The regeneration of alumina back to aluminum is extremely energy intensive and cannot be accomplished on-board a vehicle.

"For the concept to work," he added, "in addition to delivering the aluminum fuel to the fueling station and 'pumping' it into the vehicle, the alumina waste would need to be removed from the vehicle and then transported to a site for regeneration back to aluminum."

Woodall's proposal of taking the alumina waste for recycling to a power plant is less energy efficient than the standard set by the department, Shrader said.

"So while alternative sources of electricity, such as wind or nuclear, could be used," Shrader said, "the question is what are the best and most practical uses of this electricity for optimum implementation of hydrogen technologies."

Shrader noted that every funded hydrogen project includes a 4-8 page paper that is published online at .

Alcoa to study feasibility of a hydro-powered smelter

Reliable Plant Magazine, OK Author: RP news wires May 23, 2007

On May 23, the Greenland Home Rule Cabinet agreed to enter into a memorandum of understanding (MOU) with the aluminum company Alcoa Inc. The agreement entails cooperation on a feasibility study for constructing an aluminum smelter with a 340,000 metric-ton-per-year capacity in Greenland.

The MOU also encompasses a hydroelectric power system and related infrastructure improvements, including a port. The exact size and cost for the overall venture will be determined when the project plan is finalized.

Under the MOU, the parties will begin site selection, environmental studies, engineering assessments and other aspects of the project. If the viability of the project is proved, groundbreaking for the hydroelectric power system would be expected in 2010, and for the smelter in 2012. The smelter could then commence operation by the end of 2014.

"Alcoa has a disciplined growth strategy, as aluminum demand is strong and consumption is expected to grow significantly over the next decade. We have nearly 120 years of experience in developing and operating aluminum smelters around the world in a sustainable manner, sensitive to the environment, and valued by the communities in which Alcoa operates," said Alcoa chairman and CEO Alain Belda. "We will bring our technology and management capabilities to this venture to ensure the development of a highly competitive, environmentally friendly smelter that adheres to our stringent values and delivers sustainable development."

"The aluminum industry offers an excellent opportunity that we may in Greenland exploit our hydropower resources for the benefit of the country’s occupational and business development," stated Siverth K. Heilmann, Greenland’s minister of trade, labor and vocational training. "At the same time, the project is in full accordance with the cabinet’s long-term goal of replacing hydrocarbon-based energy production with hydropower, one of the reasons being concern for the global environment.

"I have visited smelters in different parts of the world, and through personal experience learned about Alcoa’s consideration for the environment and commitment to ensure that a future smelter will also in Greenland become an asset to the local community, socially and educationally, as well as economically."

About the choice of Alcoa as partner in preference to other interested aluminum companies, explains, "Alcoa has shown their determination to invest considerable resources in the development of this project together with us. Simultaneously, they have been ready to meet Greenland’s requirements as to the pace of the project development, the environmental process, efforts in training and education, etc. We still have far to go and important decisions to make before the project becomes reality, but with this agreement, Greenland and Alcoa have taken a very important step on the way."

In order to facilitate a quick initiation of the important field surveys, the parties have agreed that the MOU will be signed in connection with the upcoming meeting of the Joint Committee in Ilulissat, on May 25-27.

Preferred sites for the proposed smelter will be collaboratively identified by Alcoa and the Greenland Home Rule Government. The three municipalities of Nuuk, Sisimiut and Maniitsoq, which have all selected potential locations, support the project, and will take active part in the continued work. Final recommendations will go to the Greenland Home Rule Government for ratification.

Upon completion, this development project would represent one of the largest investments in Greenland’s history, stimulate economic growth and manufacturing diversity, create up to 600 direct, stable jobs, and contribute to increase Greenland’s overall productivity and economic self-support.

Kobe Spray Forming Yields Strong Aluminum Alloy

Design News, MA - 23 May, 2007

Doug Smock, Contributing Editor -- Design News, May 24, 2007

Kobe Steel Ltd. says it has created the world's strongest aluminum alloy, with a tensile strength of 780 MPa, using a proprietary spray forming process.

Sample bars of 10 mm in diameter and 100 mm in length are now available for application testing, Initial tests are being conducted on thin film wiring used in liquid crystal display panels. But Kobe is seeking other applications that can make use of the new alloy's light weight, high strength and processing features.

Mass production capabilities have not yet been established, but Kobe hopes to supply the metal alloy as bars, wire rods, shapes and plates. "This value-added aluminum is suitable in applications where high performance is required," said Senior Researcher Hideo Hata at Kobe Steel's Materials Research Lab. "By 2008, we're aiming to commercialize the new material for use in special purpose vehicles – such as race cars – and aircraft and aerospace parts," he said.

The tensile strength of the new aluminum alloy is said to be 10 percent higher than the 710 MPa of Weldalite, an aluminum-lithium alloy developed by Lockheed Martin Corp. and used in the external fuel tank of the Space Shuttle. Generally speaking, as strength increases, material workability goes down. However, with a breaking elongation of 14 percent, Kobe Steel says its new material has nearly three times the ductility of Weldalite's 5 percent. Ductility is 1.4 times that of titanium alloy and maraging steel.

Key to the development is use of a process called spray forming. While still in a molten state, metal is "sprayed" into droplets and is quickly quenched as it turns from a liquid to solid state. Molten metal in an induction furnace flows out of a small hole in the bottom of the furnace. Nitrogen gas is blown as the molten metal exits the hole, atomizing the material into a fine mist of droplets. The droplets accumulate and solidify into a preform on a table. Spray forming prevents the segregation of high-density alloy elements and enables melting with a uniform, fine microstructure. This can not be achieved using conventional melting and casting processes.

The result is an alloy with a uniform and fine microstructure. Zinc, magnesium and copper are added as alloys for strengthening. Kobe Steel developed its own proprietary after originally trying a spray-forming process developed by Sandvik Osprey Ltd. in the United Kingdom. Eventually, ingots of up to 240 kg will be produced to make large parts.

Vietnam to increase investment in developing aluminum industry

People's Daily Online, China - 23 May 2007

Vietnam is expected to pour the investment in seven bauxite mining and alumina production projects with estimated capital of hundreds of millions of dollars upward, said Doan Van Kien, general director of the Vietnam National Coal and Mineral Industries Group (Vinacomin) on Thursday.

The group has also planned to invest or cooperate with partners, after 2010, in building an alumina refinery with annual capacity of 100,000 tons of alumina and investment of 250-300 million dollars in central highlands Lam Dong province, and two others with capacity of 300,000 tons and capital of 750-900 million dollars each in central Binh Thuan province, and northern Quang Ninh province.

The group has also planned to build a railway with expected investment of 1.2 -1.3 billion dollars and a seaport worth some 360 million dollars to serve aluminum production in the central highlands and south central regions.

China's leading mining firm, Chalco, has recently agreed to contribute 40 percent to a bauxite mining project worth 300 million dollars in central highlands Dac Nong province, with the state-run Vinacomin making up the remaining 60 percent.

Chalco would also hold share of 60 percent in a 1.1-billion dollar alumina refinery, which is expected to produce 1.9 million tons of alumina in the first phase and four million tons in the second one.

Source: Xinhua

USD10bil to develop aluminium industry

VietNamNet Bridge, Vietnam 24/05/2007 (GMT+7)

In order to develop the aluminium industry, Vietnam will need a huge sum of capital, estimated at $8-10bil.

The Vietnam National Coal and Mineral Industries Group (Vincomin) has been assigned by the Government to lead a project on aluminium industry development, according to Doan Van Kien, Director General of Vincomin.

Under the strategy on aluminium industry development, Vietnam will make investment in seven bauxite ore exploitation and alumin production projects (alumin is a by-product of bauxite, used for making aluminium).

The bauxite ore mines to be exploited are located mostly in the Central Highlands, in Dak Nong and Lam Dong provinces. Alumin factories will also be built there and in Binh Thuan province. The projects will be invested in by Vietnamese companies or joint ventures between domestic and foreign partners. The projects all will be very big, capitalised at from several hundred million to one billion dollars each.

Moreover, Vincomin will make investment itself, or cooperate with foreign partners to develop projects on aluminium electrolysis. An aluminium electrolysis factory, which belongs to the Lam Dong bauxite-aluminium complex, will be built soon; it will have the capacity of 100,000 tonnes/year in the first period of operation. The factory is estimated to cost $250-300mil.

There will also be two other alumimium electrolysis factories: Binh Thuan (300,000 tonnes/year, $750-900mil) and Quang Ninh (300,000 tonnes/year, $750-900mil). These two projects are expected to be implemented after 2010.

Vincomin plans to build infrastructure items which can support production and exploitation in the Central Highlands and the south of the central region. A new railway from Dak Nong-Lam Dong to Binh Thuan with the length of 26-280 km will be built. The project will be implemented in 2008-2015, estimated to cost $1.2-1.3bil.

Vincomin also plans to build Hon Hong port in Bac Binh district in Binh Thuan Province, which will have the capacity of 10mil tonnes/year until 2015, and 25mil tonnes/year until 2025. The investment capital for the first phase of the project will be $190mil (until 2015), and $170mil for the second phase (until 2025).

Vincomin has reached an agreement with China’s Chalco on cooperation to exploit bauxite in Dak Nong. The two companies will join forces to run projects on bauxite ore exploitation, alumin refining and aluminium electrolysis, and to build an alumin factory-power plant-aluminium electrolysis factory complex.

Vincomin and Chalco will set up a mining joint venture, in which the former will hold 51% of capital, while the later, 49%, and an alumin joint venture, in which Chalco will hold the controlling stakes (60%).

Phuoc Ha

State law a hurdle to hostile Alcoa bid

Reuters Thu May 24, 2007 3:18PM EDT

By Caroline Humer

NEW YORK (Reuters) - If Canadian aluminum company Alcan Inc. (AL.TO: Quote, Profile, Research, the subject of a hostile takeover bid from U.S. rival Alcoa (AA.N: Quote, Profile, Research, defends itself by turning the tables with an offer for Alcoa, some tough Pennsylvania anti-takeover laws stand before it.

Pennsylvania is one of a handful of U.S. states with laws designed to protect companies, and the jobs, based there. But in the end, the likelihood of such an offer succeeding may come down to how much Alcan is willing to pay, rather than the law itself.

Pennsylvania takeover laws allow a company to consider a wide-range of constituents such as employees and community, rather than just shareholders, when it reviews a buyout offer. That means a company can reject an offer for a broader range of reasons than in other states.

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Alcoa made a more-than-$28 billion bid for Alcan (AL.N: Quote, Profile, Research this month, but Alcan rejected the offer this week, saying it did not reflect the company's value.

After the announcement, Alcan Chief Executive Dick Evans refused to rule out the possibility that among its takeover defenses was a possible run at Alcoa, leaving analysts to speculate about the possibility.

Such a move is called a Pac-Man defense, named for the video game in which the Pac-Man, properly fed, turns around and eats the ghost that had been chasing after him.


Pennsylvania was one of several states that turned to tougher takeover laws after a wave of hostile deals in the 1980s.

"Pennsylvania decided that it was not going to be victimized by corporate raiders, particularly by those coming from the other side of the Hudson, meaning Wall Street," said Anthony Sabino, a professor of law at St. John's University in Queens, New York.

The laws put up a number of obstacles, including making it easy for a target company to use a poison pill defense, which typically involves increasing the number of shares outstanding to make a buyout more expensive for any would-be acquirer.

The laws also limit a shareholder's ability to call a special meeting -- a tactic used when a company is running a proxy battle to gain control of the board. They also set minimum severance payments and protect labor contracts.

In addition, the laws have an anti-greenmail provision aimed at stopping companies that signal an intention to take a large stake as a takeover step but then simply sell the shares at a profit, as well as other limits on the control a shareholder can exercise.

That said, as with any hostile offer, the trick to getting a deal done often has to do more with how much the would-be acquirer is willing to spend than with the roadblocks.

"It's not impossible to do a hostile in Pennsylvania. There are a number of states that have relatively restrictive takeover laws, but what often happens is that the price being offered becomes high enough that shareholders are coaxed into accepting the bid," said Allen Michel, professor of finance and economics at Boston University's School of Management.

"Hostile offers often become friendly deals in the end due to the high premiums offered," he said. "The Pennsylvania laws are a two-edged sword. They can chase away offers or serve as a catalyst for a committed bidder to offer a very large premium and, in the end, become successful."

Alcoa shares were down 9 cents, or 0.2 percent, at $40.28 and Alcan was off $1.47, or 1.7 percent, at $84.42, both on the New York Stock Exchange.

(Additional reporting by Jessica Hall in Philadelphia)

Alumina producers to cut production to combat declining prices (subscription), China -24 May, 2007

Shanghai. May 24. INTERFAX-CHINA - Thirteen Chinese alumina producers have agreed to cut production in an attempt to stop the decline of alumina prices, company sources told Interfax today.

The 13 alumina producers are Shandong Weiqiao Aluminum, Chiping Xinfa Huayu Alumina, Luneng Jinbei, East Hope Group, Sanmenxia Kaiman Aluminum, Henan Huiyuan, Nanshan Aluminum, Luoyang Xiangjiang Waiji Aluminum, Yixiang Aluminum, Lubei Chemical, Yuneng Metallurgical Group, Nanchuan Xianfeng Alumina and Shanxi Xiaoyi Tianyuan Chemical Engineering.

"The 13 companies had a meeting in Qingdao in late April, where they agreed to set the alumina cash price at a minimum of RMB 3,900 ($509) a ton, and agreed to take action to stabilize the market, such as reducing production if the price drops," said an official surnamed Wei, with Nanchuan Xianfeng Alumina, a subsidiary of Chongqing Bosai Mining Group.

"Nanchuan Xianfeng Alumina is able to produce 200,000 tons of alumina per annum. That capacity will be increased to 400,000 tons per annum when our new alumina plant commences production next year," Wei added.

According to Wei, his company will launch equipment maintenance in June and July this year, which will reduce production by 14,000 to 15,000 tons during that period.

"Since we are facing highly built stockpiles and prices lower than RMB 3,900 ($509.64) a ton, as quoted by some small rivals, production reduction could be an effective way to stabilize prices," Wei said.

He said the lowest cash price offered in the market is currently RMB 3,600 ($470.43) a ton, and even some companies who are taking part in the agreement currently offer a price lower than RMB 3,900 ($509.64). However, he refused to provide the names of those companies.

"The downward trend of alumina price is inevitable due to excessive market supply. We have noticed that downstream aluminum smelters have ample alumina stockpiles, and expect alumina market prices to fall," he said.

Shandong Weiqiao Aluminum and Electricity Co. Ltd. also planned to cut alumina production due to pressure from its own high stockpiles, a source close to the company told Interfax.

"The company's alumina stockpiles are as much as 100,000 tons now," the source said.

An official with the marketing department of Chongqing Yuneng Metallurgical Group, who wished to remain anonymous, said the company currently has no plans for reducing production, since the company's sales have not been impacted by declining prices.

Yuneng Metallurgical plans to produce 150,000 tons of alumina this year, remaining unchanged from last year, he said.

"We think the possibility for an alumina price increase this year is minimal, because of pressure from oversupplies," he commented.

Some companies are offering alumina per-ton-prices between RMB 3,600 ($470.43) and RMB 3,700 ($483.50) to their long-term clients, he said.

He admitted that his company has some large long-term contracts with clients at a price a little bit lower than RMB 3,900 ($509.64) a ton.

Liu Defei, an analyst with Beijing Antaike Information Co. Ltd., a leading consultancy affiliated with the China Nonferrous Metals Industry Association (CNMIA), told Interfax that alumina supplies will be in excess of about 1 million tons this year.

He predicted that the alumina cash price would fall to a low point of RMB 3,000 ($392.03) a ton within the year. "I doubt all of the 13 companies would actually cut production in the following months, although they agreed to do so together. There are different interests and production plans among those companies. Only the market can decide price fluctuations," he said.

Chalco, China's largest producer of alumina, did not take part in the price cut agreement. The company was not available to comment on this issue when reached by Interfax today.

Chalco's alumina price is set to remain at RMB 3,900 ($509.64) per ton during the second quarter of this year. On March 21, Chalco raised alumina prices for the second time this year to RMB 3,900 ($509.64) per ton, up 8.3 percent from the previous 50 percent rise on Feb. 1, which was to RMB 3,600 ($470.43).

BHP Billiton remains tight lipped on possible takeovers, no comment on Alcan

Forbes, NY - May 23, 2007

LONDON (Thomson Financial) - BHP Billiton Ltd, which has been linked to a number of acquisitions recently, remained tight lipped on possible acquisition targets, declining to comment on a report that it has entered early-stage discussions with Alcan Inc.

Alcan has entered talks with BHP Billiton (nyse: BBL - news - people ) as it looks to fend off an unwanted takeover attempt by US rival Alcoa Inc (nyse: AA - news - people ), Canada's Globe and Mail newspaper reported, citing people familiar with the matter.

'We don't comment on market rumours,' said London-based BHP Billiton spokesman Illtud Harri.

The company has been tied to a number of takeover rumours recently, including speculation that the miner is planning a takeover of rival Rio Tinto PLC (nyse: RTP - news - people ), but the Globe and Mail story is unusual in that it cites 'people familiar'.

BHP Billiton is the world's sixth-largest producer of primary aluminium and one of the world's largest non-integrated producers of primary aluminium. Its bauxite mines, aluminium smelters and alumina refineries are based in Australia, Africa and Brazil.

Earlier today, Billiton chief executive Chip Goodyear, who is due to step down at the end of 2007, said the company is always looking for acquisitions and he refused to dismiss speculation the miner was planning to buy Rio Tinto.

Alcan late Tuesday rejected Alcoa's 28.4 bln usd hostile bid, arguing that it undervalues the company and is 'highly conditional and uncertain.'

In an interview, Alcan chief executive officer Dick Evans said all options are being considered, and he refused to rule out any scenario including one in which Alcan would turn the tables by launching its own bid for Alcoa.

BHP approached the company about a possible union late last year, but was rebuffed, sources said. Rio Tinto PLC has also been cited by several industry observers as another logical suitor for Alcan.

Officials at Alcoa declined to comment, saying they are still studying Alcan's response.

Ronald Thompson died May 17

Daily Mail - Charleston, WV -Saturday May 26, 2007

Richard "Rick" Love has assumed day-to-day responsibilities for Century Aluminum's Ravenswood plant. Plant Manager Ronald Thompson died May 17.

Signing paves way for Chinese bauxite mining project in Queensland

Mineweb, South Africa - Friday , 25 May 2007

Chinese aluminium producer CHALCO has signed an agreement to develop the big Aurukun bauxite deposit in northern Queensland and will undertake alumina refinery study.

Author: Ross Louthean


An agreement has been signed between the Chinese mining group Chalco, the Queensland Government and the Aboriginal traditional landholders over a large bauxite deposit on the Cape York peninsula (the same area as Rio Tinto's big Weipa bauxite operation which has already been going for 45 years and which currently mines over 16 million tonnes of bauxite a year - and still has over 1 billion tonnes of reserves).

CHALCO (Chinese Aluminium Company) won the right to develop the Aurukun deposit against international competitors two years ago and today signed an agreement with Queensland Deputy Premier Anna Bligh and elders and councillors from the Wik and Wikway people.

The Aurukun deposits were for years held by the Aurukun Associates, a consortium made up of Billiton Aluminium Australia BV (Royal Dutch Shell) and Pechiney, but were returned to the Crown after years of inactivity.

Chalco plans to develop deposits just north of Aurukun and is to undertake studies for a refinery either in Bowen, Townsville or Gladstone.

The blueprint involves a projected expenditure of $A3 billion and a mining of 6.4 million tonnes of bauxite on deposits on that are considered to have at least a 30 years life. An earlier Queensland Government statement suggested a mining rate of 7.5 Mtpa to produce 2.1 Mtpa of alumina. The state government said that as part of the agreement with CHALCO the government had been asked to assist in provision of "common user" infrastructure for a maximum outlay of $A300 million.

The construction phase was expected to employ 700 and more than 100 on completion.

Ready to execute aluminium expansion

Mining Weekly, South Africa 25 May 2007

South Africa’s state-owned power utility Eskom has indicated to BHP Billiton it may have power to facilitate the expansion of the two largest of Southern Africa’s three operating aluminium smelters in five to six years’ time, BHP Billiton Aluminium Southern Africa COO Dr Xolani Mkhwanazi tells Mining Weekly.

The two smelters together produce 1,25-million tons of aluminium a year – 700-million tons from Hillside and 550-million tons from Mozal – and this output contributes significantly towards making BHP Billiton the fifth-largest producer globally.

"We are working together with Eskom in their new-build programme and Eskom has indicated to us that it believes that it will be able to give us the power we need in 2012-13," he says.


On power that BHP Billiton would require to go ahead with expansion plans in South Africa, Mkhwanazi calculates that the proposed Hillside Three Plus expansion project would require another 300MW and Mozal Three another 650 MW.

About three years’ notice would be enough notice for BHP Billiton to execute the expansions. "The moment Eskom guarantees the power, we will advance our project plans and ask the Board for approval to move from prefeasibility to feasibility and then to construction," he says.

The market is good, aluminium prices are good and the company is ready to go as soon as power can be guaranteed. Demand is outstripping supply globally and, because of the general shortage of power the world over, the gap between supply and demand is expected to widen.

Present power security at the existing Hillside operation in Kwazulu-Natal and the Mozal operation in Mozambique is sound and backed by long-term power contracts, Mkhwanazi says.

"Eskom’s load sheds are within our contractual limits and they have not gone beyond that," the former South African power regulator reports, pointing to Eskom having an installed capacity of 40 000 MW and 2006 peak demand of 32 000 MW.

"So it is not all doom and gloom. It is the peaking time on cold days that can become tricky or when a few power stations are down for maintenance," he says. He adds that any interruptions or load-sheds usually are done with advance notice.

Mkhwanazi reports a successful turnaround of BHP Billiton’s smaller aluminium smelter, Bayside, also in Kwazulu-Natal.

Bayside has been restructured, its product range rationalised and its sales focused into the domestic market. "We decided that Bayside must supply South Africa and all exports from Bayside have ceased," Mkhwanazi reports.

Once a producer of 200 products, Bayside now produces only 30, having also invested in a world-class casthouse for value-added products and managing to contain its costs despite continued use of older technology.

Mkhwanazi does not expect the emergence of Alcan at Coega to have an impact on BHP Billiton’s wider aluminium businesses, which are overwhelmingly export focussed.

While the power that is being allocated to Alcan could in theory have provided the wherewithal for the long- awaited Mozal Three and Hillside Three Plus expansions, Mkhwanazi says that Alcan applied for the power allocation long ago. "There are no ill feelings – we have already expanded two of our smelters and our time for more expansions will come," he says.

He cites skills retention and skills development as his top priorities, along with transformation, meeting the Department of Trade and Industry black economic empowerment codes of best practice, employment equity, affirmative procurement and enterprise development.


In Africa, BHP Billiton may build an alumina refinery in partnership with Canadian company Global Alumina, and Middle Eastern companies Dubal and Mubadala.

"Discussion is taking place and we are optimistic that we will get somewhere with that. As one of the most recent movers in Guinea, we may be the ones that end up building the only really modern alumina refinery on a continent which has 40-billion tons of high quality bauxite of the world’s 90-billion in total," Mkhwanazi says.

He cautions, however, that a refinery cannot be expected in the short term and that the lack of basic infrastructure in Africa only adds to the timeframes.

The same long timeframes would apply to BHP Billiton’s vision of a possible aluminium smelter in the Democratic Republic of Congo (DRC), which can only follow the establishing of power infrastructure and the availability of "stranded" electricity, on which aluminium smelters traditionally feed.

Envisaged, though, is the possibility of building another two-potline aluminium smelter in Africa, similar to Mozal’s in Mozambique.

BHP Billiton’s other aluminium assets include interests in the Worsley alumina refinery in Australia, and alumina and smelting operations in Brazil and a bauxite mine and refinery in Suriname. The Southern African business represents more than half of global earnings before interest and tax (Ebit) and Mkhwanazi forms part of BHP Billiton Aluminium’s global executive.

Edited by: Laura Tyrer

Ashapura JV to start refinery construction by Nov

Reuters India, India - Fri May 25, 2007 11:38 AM IST

MUMBAI (Reuters) - Ashapura Minechem Ltd. expects its joint venture with China's Qingtongxia to start construction of a one million tonne alumina refinery by November, an Ashapura official said.

The minerals producer plans the refinery in Gujarat through an equal joint venture with Qingtongxia Aluminium Group, China's second largest aluminium producer.

Sandeep Nadkarni, manager for finance and strategic planning for Ashapura group, said the company was also close to acquiring 600 acres of bauxite baring leases in Kerala.

Hiring and new projects to continue, Alcan says

Montreal Gazette, Canada - Saturday, May 26, 2007

LYNN MOORE, The Gazette

While fighting Alcoa Inc.'s first takeover bid, Alcan Inc. will maintain a "business as usual" posture that includes hiring new employees and proceeding with new projects, the company told its managers in an internal document issued yesterday.

But should Alcoa bring forward "a new proposal that made sense, it will be considered," the document said.

"It is far too early to determine how this will play out," said the document, a copy of which was filed with U.S. regulators.

The "proposed Alcoa-led acquisition of Alcan is not the right choice for our shareholders and employees," said the document, which was worded in a question-and-answer format.

It reiterated that Alcan is in discussions with unidentified third parties and stated that no options, including that of a "Pac-Man strategy," in which Alcan would go after Alcoa, have been ruled out. "At this point, all avenues are being explored."

The document also looked at whether the fact that former Pechiney SA president Jean-Pierre Rodier is working as an Alcoa adviser would mean that the U.S.-based aluminum producer would have an easier time overcoming anti-trust hurdles.

Rodier was at the helm of Pechiney when Alcan launched a hostile bid for the French aluminum producer about four years ago. He knows the aluminum industry, the European regulatory maze and is especially knowledgeable about some of Alcan's European assets.

"No one has a crystal ball ... (but) that said, so far Alcoa has shown little or no appreciation of the potential regulatory risks relating to the merger it is proposing," the document concluded.

On Tuesday, Alcan's board rejected Alcoa's May 7 bid of about $33 billion U.S., saying that it was too low, laden with too many conditions and understated the complexity and time required to win regulatory approval for the new company that would emerge as the world's largest aluminum producer.

A day later, Alcoa reaffirmed its offer, saying that it was strategically and financially compelling. It also expressed confidence that it could secure regulatory approvals.

The combined company would almost certainly have to divest aerospace and automotive assets to appease regulators and there is wide speculation about which other assets would be sold to settle regulatory concerns or stabilize debt loads.

Last month, Alcoa said it plans to sell its packaging business. Attention was then focused on Alcan's packaging unit.

Yesterday's document noted that Alcan's unit is "very different" from Alcoa's.

At Alcan's annual meeting last month, Alcan CEO Dick Evans also pointed out that it "makes considerably more profit on that business than Alcoa does."

Alcan's managers were told, in yesterday's note, that Alcan will move ahead with the relocation of the head office of its downstream businesses within Paris.

Among Alcan's current projects is a recently announced, mine-to-metal project in Saudi Arabia that could yield the world's largest integrated aluminum operation.

The smelter of the joint-venture is to have an initial capacity of 720,000 tonnes a year, but its design will accommodate the potential to expand annual production to more than 2 million tonnes.

© The Gazette (Montreal) 2007

Chinese firms to build $5b aluminum plant in KSA

Middle East North Africa Financial Network, Jordan - 26/05/2007

(MENAFN) Gulf Daily News reported that two Chinese companies have signed a framework agreement to build two aluminum processing plants and related facilities worth nearly $5 billion in Saudi Arabia.

Under the terms of the agreement, the two Chinese contractors will help the Saudi company Western Way for Industrial Development obtain funds equivalent to half of the project costs from Chinese banks.

The China Nonferrous Metal Industries Foreign Engineering and Construction Company (NFC) will build an alumina plant and an electrolytic aluminum plant in the southeastern Saudi city of Jazan, while the China National Machinery Industry Corporation will construct a dock and a power plant supporting the plants.

The alumina plant will have annual output of 1.6 million tons while the capacity of the electrolytic aluminum plant will be 660,000 to 700,000 tons.

China launches Shanghai Nonferrous Metals Index (subscription), China - May 29, 2007

Shanghai. May 29. INTERFAX-CHINA - China launched the Shanghai Nonferrous Metals Index (SMMI) yesterday, the country's first nonferrous metals daily price index, a top official from the Shanghai Nonferrous Metals Trade Association (SNMTA) said.

Through the launch of the SMMI, the SNMTA aims to provide reliable daily nonferrous metals indicators to users and investors, which will allow China to have more influence on price-setting in the international market as well as benefit domestic nonferrous enterprises, according to SNMTA's chairman, Zhang Minxiang, on Sunday. International prices are currently based on London Metal Exchange prices.

The SMMI will enable the Chinese government to more easily monitor the domestic nonferrous metals market, collect data and draft regulations, secretary-general of the Shanghai Price Association, Chen Daxuan, said.

SMMI figures will be based on the spot price of six nonferrous metals - copper, aluminum, nickel, lead, zinc and tin - representing 90 percent of China's entire nonferrous metals output.

The weighting of each metal has been set according to figures provided by the National Bureau of Statistics and the General Administration of Customs, and will be re-adjusted every two years in order to update weighting within the nonferrous metals sector.

The pricing reference is currently provided by 105 companies, including nonferrous metals producers and 12 listed nonferrous metals and metals traders, including Chalco, Jiangxi Copper Co. Ltd., Yunnan Tin Co. Ltd. and Jinchuan Nickel Group, according to the SNMTA announcement.

Alcan up for grabs

Malaysia Sun, Malaysia -Monday 28th May, 2007

Norsk Hydro the Norwegian energy and power company, is preparing to offer more than $30 billion for Canadian aluminum producer Alcan.

Norsk Hydro is owned 43% by the Norwegian government. Its current aluminum division accounts for 4% of world output.

The Norwegian bid will compete with many others in the arena.

Alcoa and other mining giants, including Australia's BHP Billiton, are considering competing for control of Alcan.

Alcoa promotes carbon capture technology in China

People's Daily Online, China 28 May, 2007

Multinational Alcoa announced Monday that it plans to introduce a new carbon capture system to China and other countries throughout the globe.

Alcoa said its factory in western Australia has already launched the new system, which is expected to sharply lower greenhouse gas emissions in the aluminium industry.

Alcoa's new carbon-capture system handles alumina processing residue by mixing "red mud" with CO2. "Red mud" is a kind of solid waste left over after alumina is extracted from bauxite. Its high alkalescence is harmful to water, land and air if released without proper treatment.

By mixing red mud with CO2, Alcoa successfully lowers the PH value of red mud to the level of normal alkali soil. The treated red mud can be used as construction materials for roads and buildings, or as a soil enhancer.

It is predicted that in Alcoa's Australian plants alone, the new technology will cut CO2 emissions by 300,000 tons annually, equivalent to the emissions from 75,000 motor vehicles.

Alcoa is one of the world's major producers of alumina, electrolytic aluminium and aluminium products. Currently it has 18 enterprises in China.

Source: Xinhua

Baltic Aluminum to Build $1.2Bln Plant

The Moscow Times, Russia - Wednesday, May 30, 2007. Issue 3667. Page 5.

Baltic Aluminum, a hitherto little-known Russian company, is planning a $1.2 billion smelter near St. Petersburg to break United Company RusAl's monopoly on output of the metal in the country, a local government official said Tuesday.

The smelter would have capacity to produce 360,000 tons per year of aluminum, said Alexander Butenin, press secretary for Leningrad region's committee for economic development.

A first stage of 180,000 tons would go into production by September 2010, and capacity could be doubled by September 2013, he said, citing data from a proposal received by the committee mid-May.

"In principle, the capacity of this enterprise could be increased to 540,000 tons after 2013," Butenin said.

Vedomosti, citing another local government official, said Baltic Aluminum was connected with billionaire investor Mikhail Fridman's Alfa Group. Local newspaper Delovoi Peterburg said it was controlled by A1, the investment division of Alfa Group.

A1 officials declined to comment and the project was not listed on the company's web site, Butenin did not confirm the ownership of Baltic Aluminum.

He said a decision on whether to build the smelter in the Kingisepp locality within Leningrad region, near Russia's border with Estonia, would probably be taken by July.

Delovoi Peterburg quoted Baltic Aluminum CEO Ravil Musin as saying the smelter would use imported raw materials.

Aton analyst Dmitry Kolomytsyn said that there did not seem to be a strong basis for the proposal.

"Baltic Aluminum probably has no experience in the industry, so this doesn't seem to be a very good investment," Kolomytsyn said.

Mikhail Fridman was ranked the country's sixth-richest man in the May edition of Forbes. He was one of only two men in the Forbes top 10 with no direct known investment in metals.

Alfa Group, Fridman's private equity vehicle, is better known for its interests in retail, telecoms, banking and oil.

The group controls Alfa Bank and X5, the country's largest food retailer, and holds stakes in mobile phone companies VimpelCom and MegaFon as well as a minority stake in TNK-BP.

United Company RusAl, formed this year by a merger of RusAl, SUAL and assets of commodities trader Glencore, is the country's only producer of aluminum and accounts for one-eighth of world supply of the metal used in cars, construction and packaging.

Alcoa, which operates two aluminum-fabricating plants in Russia, has expressed interest in building a smelter in the Far East.

Hydro Aluminum, a unit of Norwegian energy and metals group Norsk Hydro, has also held discussions about building a smelter in Russia.

Reuters, Vedomosti

India's Hindalco, Sterlite may join Alcan race

Reuters Canada, Canada Wed May 30, 2007 10:37 AM EDT

MUMBAI (Reuters) - India's biggest aluminum maker, Hindalco (HALC.BO: Quote), and Sterlite Industries (STRL.BO: Quote), are in talks with global firms to separately bid for Canada's Alcan (AL.TO: Quote) (AL.N: Quote), the Hindustan Times newspaper said on Wednesday.

Citing unnamed sources, the paper said Sterlite's parent Vedanta Resources Plc (VED.L: Quote) was in advanced talks with global miner Rio Tinto (RIO.AX: Quote) to form a special purpose vehicle to bid for the aluminum major.

London-based Vedanta will likely invest $3-$4 billion and Rio Tinto could put in $10-$12 billion in the joint venture, the paper said.

Hindalco Industries Ltd., which earlier this year bought Canadian aluminum firm Novelis for $5.9 billion, was in talks with BHP Billiton (BHP.AX: Quote) (BLT.L: Quote) for a joint bid but a deal was some distance away, the paper said.

A Vedanta spokesman declined comment, while a spokeswoman for Hindalco said it was not the company's policy to comment on


Media reports earlier this week said Norwegian aluminum group Norsk Hydro (NHY.OL: Quote) and Rio Tinto (RIO.L: Quote) might place separate bids to trump Alcoa's (AA.N: Quote) $28.5 billion hostile bid for Alcan, a takeover that would create the world's largest aluminum group.

© Reuters 2007. All Rights Reserved.

China's Chalco expects strong full year alumina output growth

Forbes, NY 05.30.07, 4:37 AM ET

BEIJING (XFN-ASIA) - China's largest producer of aluminum and alumina Aluminum Corp of China Ltd (Chalco) does not expect alumina output in China to slow anytime soon, a Chalco spokesperson told XFN-Asia.

'We don't expect there to be any slowdown in alumina output this year, either by us or by smaller domestic miners. In fact, most are increasing production or have plans to do so,' said Zhang Qing.

Her assertion is at odds with a forecast made by the country's top economic planner earlier today.

The National Development and Reform Commission (NDRC) said the country's alumina output growth, expected to be rapid in the first half, will slow down in the second half due to weaker prices.

China produced 4.27 mln tons of alumina in the three months to March, up 53.7 pct year-on-year, while output of electrolytic aluminum rose 36.6 pct to 2.77 mln tons.

In a statement published on its website, the NDRC said China's current annual capacity in alumina and electrolytic aluminum is estimated at 17 mln tons and 12.5 mln tons, respectively.

When asked where alumina prices are headed in the second half, Zhang said: 'There's really no way to predict these things with any accuracy.'

CVRD says energy woes will limit investment

Mining Journal Online, UK - 30-May-2007

CVRD investments will be limited because of energy availability

Delays with electricity generation projects in Brazil will limit investment by mining giant CVRD in 2012 and 2013, the chief executive of the world`s biggest iron ore miner said.

Underscoring concerns expressed by power sector analysts about possible energy shortages in Brazil at the start of the next decade, CVRD`s CEO Roger Agnelli said Brazil was running out of time to launch new power projects, which are held back by environmental authorities.

"There is no doubt we need to respect the environment, but we cannot keep discussing because ahead of us, we`ll have a serious energy problem," Agnelli told a seminar on development.

"There won`t be energy if we don`t accelerate the process of adding power plants, be it hydroelectric, coal or nuclear."

"Next decade, CVRD investments will be limited because of energy availability," he said.

Apart from iron ore, which does not require a lot of energy, CVRD produces alumina and aluminium in an energy-intensive process.

"We have gigantic bauxite reserves and capacity to produce alumina, but we are thinking of no new investment in the aluminium area because there is no available energy," he told reporters on the sidelines of the seminar.

Alcan sells Dutch smelter

Toronto Star, Canada - May 31, 2007 11:21 AM

Canadian Press

MONTREAL – Alcan Inc. (TSX: AL) has reached an agreement in principle to sell the Vlissingen smelter in the Netherlands to British private equity firm Klesch & Co.

Financial specifics were not disclosed Thursday.

The 700-employee smelter, with capacity of 200,000 tonnes annually and 2006 revenue of $600 million (U.S.), is owned 85 per cent by Alcan and 15 per cent by Hunter Douglas.

"This transaction clearly demonstrates Alcan's ongoing commitment to value-based portfolio optimization and is aligned with our business strategy and target of improving Alcan's competitive position on the cost curve," stated Michel Jacques, president of Alcan's primary metal group.

The agreement is expected to be completed during the summer after consultation with worker representatives in the Netherlands and France.

UAE to build world's largest aluminum smelter (Pressemitteilung), Austria 2007-05-31 15:34:50 -

TAWEELAH, United Arab Emirates (AP) - This sand-blown wasteland 15 kilometers (10 miles) northeast of Abu Dhabi will house the world's largest aluminum smelter, a US$8 billion (¤6 billion) joint venture launched Thursday that will have the capacity to produce some 1.4 million tons of aluminum per year.

The initial construction management contract, worth US$300

million (¤223 million), was awarded at Thursday's groundbreaking ceremony to engineering firms SNC-Lavalin of Canada and Worley Parsons of Australia.

The project would go a long way toward supplying a shortfall in world aluminum supply said Kelly Driscoll, a metallurgy expert with the London-based consultancy firm CRU.

But Driscoll warned that too much capacity, too quickly, could result in an oversupply that might bring aluminum prices below the cost of production.

The overall project is owned by Emirates Aluminum, a joint venture between the Dubai Aluminum Company and the Mubadala Development Co., the investment and development arm of the government of Abu Dhabi emirate.

The first of two construction phases is expected to be finished by 2010 at a cost of US$5 billion (¤3.7 billion), according to a press release issued at the site Thursday. The first phase will allow for the manufacturing of 700,000 tons of aluminum per year, while the second phase will double that production capacity, the statement said.

The smelter project «will propel the UAE onto the global industrial stage,» said Khaldoon Khalifa Al Mubarak, Mubadala's chief executive.

UC RUSAL considers Mozambique bauxite project

Mining Weekly, South Africa - 31 May 2007

RUSAL considers mining raw material bauxite in Mozambique

United Company RUSAL, the world`s largest aluminium producer, is considering mining the raw material bauxite in Mozambique, Interfax news agency reported, citing a Russian government official.

Officials from RUSAL held discussions in December about developing bauxite reserves in the African country, Interfax quoted Mikhail Kamyshin, official representative of Russia`s foreign ministry, as saying.

He was speaking ahead of a three-day visit to Russia by Mozambique`s foreign minister, Alcinda Antonio de Abreu.

RUSAL merged with rival Russian producer SUAL and assets of commodities trader Glencore in March to create a company that accounts for one-eighth of world aluminium production.

United Company RUSAL spokeswoman Vera Kurochkina declined to confirm whether or not the company was looking at Mozambique.

"We are interested in growing our raw material base and are constantly studying different options for its development," she said.

In Africa, United Company RUSAL already mines bauxite in Guinea and is the majority owner of the Aluminium Smelter Co of Nigeria (ALSCON).

United Company RUSAL is majority owned by Oleg Deripaska, Russia`s second-richest man according to Forbes magazine. (May 31 Reuters)

Alcan subsidiary to invest US$17 million to meet growing demand for cathode products

Canada NewsWire (press release), Canada - 31 MAY, 2007

Investment in enhanced equipment will offer leading-edge solutions for Carbone Savoie's customers PARIS, France, May 31 /CNW Telbec/ - Carbone Savoie, an Alcan subsidiary, today announced plans to invest US$17 million to enhance equipment at the Notre-Dame-de-Briançon and Lannemezan sites in order to rapidly meet the needs of its cathode products customers.

"This investment underlines Alcan's commitment to strengthening its carbon products activities and to consolidating its position in this market to rapidly meet the increasing needs of its customers," said Jean-Philippe Puig, President, Alcan Primary Metal, Europe and Cameroon.

The investment will result in the conversion of the anode baking furnace at the Lannemezan site as well as the installation of a cathode machining line which will lead to greater graphitizing capacity at Notre-Dame-de-Briançon. It will also rapidly increase cathode production capacities starting in late 2008. Before moving forward with this project the Company must first complete required legal procedures and obtain necessary administrative and environmental permits.

Jean-Pierre Cleirec, CEO of Carbone Savoie stated that "Carbone Savoie is dedicated to meeting the growing demand for cathode products. This initiative demonstrates our desire to remain present in all of the carbon market segments and to consolidate the activities at Notre-Dame-de-Briançon and Lannemezan." Carbone Savoie, a global leader in the cathode products market, already operates two production sites and a research centre in France. The investment in the production site at Lannemezan will create approximately 70 jobs.

Carbon Savoie is recognized for its technical expertise and the quality of its products. In 2006, it had revenues of US$ 120 million and employs close to 500 people.