AluNews - April 2008

Century Aluminum and Pingguo Qiangqiang Enter Into Carbon Joint Venture - April 01, 2008

Century Aluminum Company (NASDAQ: CENX) announced today that it has entered into a joint venture agreement with Pingguo Qiangqiang Carbon Co., Ltd. (PQQ) to acquire a 40 percent stake in Baise Haohai Carbon Co., Ltd. (BHH), which owns a newly constructed carbon anode and cathode facility located in the Guangxi Zhuang Autonomous Region of south China. The purchase remains subject to government approvals and other conditions. Century will utilize the output from this plant to secure carbon supplies for its worldwide smelter operations.

"As we expand our aluminum production, it becomes increasingly important for us to secure our strategic raw materials," noted Century's president and chief executive officer Logan W. Kruger. "We have been very impressed with BHH's product quality and environmental stewardship. We value the partnering relationship we have developed with PQQ and we appreciate the support we have received from the government and the people of Guangxi."

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

MAXXAM Reports Results

Business Wire (press release), CA - 01 Apr 2008

MAXXAM Reports Results for Fourth Quarter, Twelve Months of 2007 and Receives Notification from the American Stock Exchange Related to Late Filing of Its 2007 Form 10-K

HOUSTON--(BUSINESS WIRE)--MAXXAM Inc. (AMEX:MXM) reported a net loss of $17.4 million, or $3.32 loss per share, for the fourth quarter of 2007, compared to a net loss of $22.9 million, or $4.36 loss per share, for the same period a year ago. Sales for the fourth quarter of 2007 totaled $20.9 million, compared to $70.0 million in the fourth quarter of 2006.

For 2007, MAXXAM Inc. (the Company) reported a net loss of $46.9 million, or $8.93 loss per share, compared to net income of $374.4 million, or $59.71 earnings per share, on a fully diluted basis, for 2006. Sales for 2007 were $95.9 million, compared to $291.5 million for 2006. The 2006 results included a net gain of $430.9 million due to the cancellation of the Company’s interest in Kaiser Aluminum Corporation (Kaiser), resulting in the reversal of the Company’s losses in excess of its investment in Kaiser.

As discussed below, on January 18, 2007, The Pacific Lumber Company (Palco) and its wholly owned subsidiaries (collectively, the Debtors), including Scotia Pacific Company LLC (Scopac), filed for reorganization under Chapter 11 of the Bankruptcy Code. As a result, the Company deconsolidated the Debtors’ financial results beginning January 19, 2007, and began reporting its investment in the Debtors using the cost method. Accordingly, the Company’s consolidated financial results for the three months ended December 31, 2007 include no activity for the Debtors. The Company’s consolidated financial results for the twelve months ended December 31, 2007 include the Debtors’ financial results only for the period from January 1, 2007 thru January 18, 2007.

Environmental Impact of Smelter in Húsavík Assessed

IcelandReview, Iceland - 04/03/2008

The government has decided that the planned Alcoa aluminum smelter in Bakki near Húsavík, northeast Iceland, will undergo a formal environmental impact assessment and that preparations for constructing the 250,000-ton smelter can begin.

According to head of Nordurthing municipality Bergur Elías Ágústsson, research indicates that there is enough geothermal energy in the area to power a smelter, Morgunbladid reports.

"We did not begin at the wrong end. We first […] examined whether we could meet the energy demands of the smelter," Ágústsson said, adding it will also be possible to enlarge the smelter later on. "But that will of course be in agreement with the authorities."

Nordurthing and its neighboring municipalities, Skútustadahreppur, Thingeyjarsveit and Adaldaelahreppur, have undertaken a joint planning of the area where a potential power plant and electricity lines are included.

Ágústsson said the plan is to complete the construction of the smelter in 2015.

Mining investments to push Guinea 2008 growth-IMF

Reuters - Thu Apr 3, 2008

By Saliou Samb

CONAKRY, April 3 (Reuters) - Large mining investments will push Guinea's economic growth to 4.5 percent in 2008 from a sluggish 1.8 percent the previous year, a visiting International Monetary Fund team said.

Guinea has around one third of the world's known reserves of bauxite, the ore used to make aluminium, and rising global demand has led several operators to plan large mines and processing plants or expansions to existing installations.

"Following real GDP growth of about 1.8 percent in 2007, economic activity is expected to rebound substantially to around 4.5 percent in 2008, underpinned by several large foreign-financed investment projects underway in the mining sector," the IMF team said in a statement late on Wednesday.

Last year an official from a national anti-poverty programme said mega-projects, mainly to mine bauxite and refine it into alumina, which can be smelted to make aluminium, would bring in nearly $27 billion in investments by 2015.

Canadian-listed Global Alumina Corp (GLAu.TO: Quote, Profile, Research) is planning a $4.78 billion, 3.95 million tonne-a-year alumina refinery and U.S. Alcoa (AA.N: Quote, Profile, Research) and Canada's Alcan, bought last year by Rio Tinto (RIO.L: Quote, Profile, Research), plan to add an alumina refinery to their Guinea venture.

China agreed in January to fund a $1 billion hydropower dam in return for bauxite mining rights.

And Russian aluminium group RUSAL plans to raise its Guinean bauxite mining output to 7.4 million tonnes per year from 5.7 million by 2011, and expand capacity at its Fria alumina refinery to 1.05 million tonnes per year from 640,000 tonnes.


Despite its mineral riches, most of Guinea's 9 million people live in desperate poverty. Less than a third of adults are literate, according to the U.N. Human Development Report, which ranks Guinea 160 out of 177 countries.

High energy and commodity prices have already triggered violent protests in several West African countries. The IMF praised the government's decision on Monday to raise fuel pump prices by more than 60 percent to cut subsidy costs and curb smuggling, but called for "focused and targeted" measures to reduce the impact on poor Guineans.

Rising prices were a factor in the run-up to a violent general strike last year against the authoritarian rule of President Lansana Conte, who marked 24 years on Thursday since he seized power in a military coup.

Some 137 people were killed during that strike -- most shot dead by Conte's security forces before a deal was struck to appoint consensus Prime Minister Lansana Kouyate -- and union members are threatening another strike over political gripes.

Despite a continuing political power struggle with Conte, the former diplomat Kouyate has worked to revive Guinea's stricken economy, bringing down inflation.

Kouyate has also targeted infrastructure development and local refining capacity to help the country benefit from its bauxite industry, which is second only to Australia's.

In December the IMF approved a three-year, $75 million loan programme for Guinea. A month later Guinea struck a deal with the Paris Club of sovereign creditors to cancel $180 million of its foreign debts and reschedule a further $120 million.

The IMF team welcomed that deal, but noted that Guinea's external financing position remained fragile and called for continued discipline to avoid debts mounting up again. (For full Reuters Africa coverage and to have your say on the top issues, visit: (Writing by Alistair Thomson; editing by Daniel Flynn/Ruth Pitchford)

Rio Tinto looking for Chinese mining partner: report

Marketwatch April 5, 2008

Rio Tinto PLC said it would like to work with Chinese state-owned firms such as its shareholder Aluminum Corp. of China (2600.HK) to develop mining projects around the world, the South China Morning Post reported Friday, citing an interview with Chief Executive Tom Albanese.

The report said Rio Tinto is looking for firms that can bring in capital or had access to infrastructure.

"Rio Tinto has been very successful in discovering some of the biggest new ore bodies in the world," Albanese said.

"Many are in very remote locations that require a lot of infrastructure. We see opportunities for cooperative relationships with senior Chinese SOEs on large-scale development (of such mineral deposits)," he added.

Newspaper Web site:

-Contact: 201-938-5400

Striking miners surface for pay talks

RussiaToday, Russia - Apr 3, 2008

A group of striking miners in the Urals, who had vowed to stay underground until they’d been given a pay rise, have reportedly come to the surface to begin negotiations. The aluminium miners are demanding a 50 per cent increase in pay and better conditions. They have spent the last ten days deep below the earth’s surface.

The miners had vowed to stay underground until their demands are met.

Russia's aluminium giant, Rusal, has reportedly stopped work on all mines, which belong to the mine's owner SUBR, in order to investigate the strike. The town of Severouralsk is at a standstill, and thousands have been left without any income.

Local authorities and various mediators are taking part in the talks, but the miners say the only tangible support they've received are letters and emails from around the country.

The town's mayor, Vasily Brezhetenko, said the miners are putting the whole region at risk.

"To us, the future of our city hinges on bauxites. I don’t even feel like talking about this. I’ve lived here all my life. I’d hate to see my city and the factory I've given my whole life to vanish like this," he said.

The world's largest aluminium producer can afford to terminate production at five of its mines but they insist they are unable to raise wages.

Viktor Radko, mine manager, said that the company needed to gain stability. "If we yield to the demands that keep coming in, we will never learn to do things in a civilizsd way, and the company will never gain stability and rhythm," he said.

Rusal has recently taken a number of measures, which some see as a way to pressure the authorities to lobby for them. They have been criticised for cutting the financing of regional social programmes, and have taken the miners to court over the dispute.

Smelter equipment coming

Trinidad News, Trinidad and Tobago - April 6 2008


EQUIPMENT IS on the way to Trinidad from China for the construction of the country’s first aluminum smelter plant, the Alutrint Smelter.

Prime Minister, Patrick Manning made the announcement Friday night at the gala commissioning of the 428-room Hyatt Regency Trinidad, Port-of-Spain. Manning also announced that construction on the country’s second iron and steel complex is slated to commence by August.

Manning said, "We will initiate construction of our first aluminum fact equipment is now on the water from China."

In quick succession, the Prime Minister listed a string of development plans, including the new port in the capital city which he said has attracted bidders from around the globe and is to be completed in three years, a $25 billion transportation highway upgrade over the next eight years, the ongoing construction of the Performing Arts Academies, Govern-ment Campus and the establishment of the country’s first national philharmonic orchestra, in tandem with plans for performance arts.

He made the statements before a large VIP audience including President George Maxwell Richards and his wife, Dr Jean Ramjohn-Richards, Government Ministers, Jamaica Prime Minister, Bruce Golding, Caricom Secretary General, Dr Edwin Carrington and executive chairman of the Urban Development Corporation UdeCOTT, Calder Hart.

Turning to the recently launched G-pan, which was used by the National Steel Symphony on Friday night, Manning boasted of its range, tone, size, standardisation and metalurgical qualities, adding that it represents a quantum leap over what existed before.

"So much so that I am in a position to say that the days of the oil drum as an instrument are no more, those days have passed," he said.

Manning noted that the time had come to give young people a recreational alternative and Government commissioned the establishment of the band, Divine Echoes.

"We invested heavily in that, in fact about $1 million worth of instruments... and from the quality of music we have heard... they will succeed in the purpose for which they were established," he said.

Hart said that successive governments "since 1995 all agreed and placed priority on the development of the Port-of-Spain International Waterfront Project," of which the Hyatt Regency is a part.

"Thirteen years ago when we successfully completed the negotiations for the siting of the ACS headquarters the decision was taken that this site would be home to high quality office accommodation and a luxury hotel and conference centre," Hart said.

Of the Waterfront Project which drew heavy public skepticism and began without a sod turning ceremony, Manning said it constitutes the largest building construction project ever undertaken in Trinidad, two 26-storey buildings, each floor providing 15,000 square feet of space, the 428-room Hyatt Regency Hotel, the largest conference centre in the English-speaking Caribbean, 1,200 car park stalls, a waterfront promenade which will be open to the public of TT, making Port-of-Spain a waterfront city akin to Sydney, Australia.

"At a total cost of $1.85 billion excluding VAT and finance charges, in addition to say that the project has been conducted and delivered on time and within budget," Manning said.

Construction at the Waterfront commenced in August 2005.


The Spokesman Review, WA - April 6 2008

Pyrotek is an international organization that specializes in the development, manufacture and sale of high-temperature materials for industrial applications within the aluminum, glass and steel industries. Based in Spokane since its inception in 1956, Pyrotek employs over 1,700 employees in 31 countries. For more information, please visit our website:

The following position will be based in Pyrotek's Corporate Office in Spokane, WA. Full benefit packages are available including medical and dental benefits, 401(k) and Profit Sharing.

Pyrotek is looking to hire the best Global Product Managers we can find. If you have a degree in engineering, 5-7 years experience managing a technical product line, bright, have strong people skills, and enjoy working with people from all over the world, we want to talk to you.

We are currently looking for a Global Product Manager (GPM) to manage our thermocouple and protection tubes product line. The GPM will work closely with all functional areas of the company including; regional sales managers, sales engineers, manufacturing/ operations managers, finance, and development. GPM will also work closely with customers through the sales engineers defining new and evaluating existing products, technical support, installation of trials, and working through quality issues.

The most immediate need for this position is to define the product roadmap, work with manufacturing to define global manufacturing strategy, complete global competitive analysis, establish global pricing, etc. This position will also be responsible for creating training and ordering tools to reduce the sales force dependency on product manager and associated specialists.

This position requires 50% international travel and a valid passport.

Qualified candidates should submit their resumes, letters of introduction and salary requirements to or via fax to 509-927-2408. AA/EOE

Senior Commercial Analyst

iTWire, Australia - April 6 2008

Rio Tinto Iron Ore (RTIO), a member of the Rio Tinto Group, is the second largest iron ore supplier globally. In Australia, RTIO operates eleven mines, three ports and the largest privately owned railway network in the world.

Since 2003, RTIO's growth strategy in the Pilbara has seen approximately US$5 billion committed to port, rail, power and mine assets to increase capacity and capitalise on strong international demand. RTIO's Pilbara operations produced over 160 million tonnes of iron ore in 2007 with plans to double production to 320 million tonnes over the next five years.

We currently have vacancies in our Perth office for Senior Commercial Analysts. You will be operating in a competitive and rapidly changing environment, actively contributing to the RTIO Business Planning and Analysis team.

The Senior Commercial Analyst opportunity will be a pivotal role providing high quality and timely commercial advice and analytical support to senior management to create business value for RTIO.

Candidates for this role should be highly driven people with financial valuation or resources experience. The successful candidates will be able to demonstrate highly developed analytical skills, financial modelling ability, strong communication skills and ambition with a desire to succeed.

A lateral and analytical thinker, you will be capable of presenting complex financial information to a financial and non-financial audience. A professional, influencing and outcome focused style and the ability to communicate fluently across all levels of the organisation is critical to your success in this role.

Tertiary qualifications in a Commercial discipline with post graduate qualifications (CIMA, CA, CPA, CFA, SIA or a technical discipline with an MBA is a requirement for this role.

Opening in Rio Tinto Perth's Business Planning & Analyst Team - Working directly with the business, front end commercial focus

Please apply online via the link below, job ref DF17701

Rio Tinto Alcan accelerates study of Alma smelter expansion project

The Canadian Press, MONTREAL - 07 Apr, 2008

MONTREAL — Rio Tinto PLC is undertaking a preliminary study on expanding the Alcan Alma smelter in the Saguenay-Lac-Saint-Jean region of Quebec.

Chief executive Tom Albanese said Monday the potential expansion would add 170,000 tonnes to the smelter's current annual production of 400,000 tonnes.

"I am very pleased to announce today that we are aggressively moving ahead with a pre-feasibility study for an expansion of our Alma plant," Albanese said in a speech to the Canadian Club.

If it proceeds, the expanded smelter would be one of the largest in North America.

The study will evaluate the cost, timing and conditions for completing the expansion.

The London-headquartered company, which completed its takeover of Alcan last November, plans to spend US$2 billion over 10 years on capital projects in Quebec, with support of the provincial government.

It is also proceeding with a US$2-billion modernization of the Alcan Kitimat smelter in British Columbia.


Mineweb, UK - Monday , 07 Apr 2008

Author: John Helmer

Rusal makes concessions to striking bauxite miners

Russian miners' union confident of gaining strike demands as Rusal postpones legal action.

Striking bauxite miners at the Rusal-owned Severuralsk mine, in central Russia, have called off their occupation of one of the mine shafts, on signs that Rusal is ready to make wage, welfare, and other labour contract concessions.

A spokesman for the striking miners, Oksana Sgibneva, told Mineweb that a court hearing, convened last Friday on Rusal's move to call in police and marshals, was postponed until April 8. "Everything now depends," she said, "on the condition of the case."

Severuralsk ("North Ural Bauxite Mining Company", Russian acronym SUBR ) operates five shafts, and all have been shut down since the day after miners at the Red Riding Hood mine refused to come to the surface, when their shift had ended on March 26. The miners then circulated a list of 11 demands. Rusal warned that the strike was illegal, and promised court action to put an end to the occupation.

This ended at the start of the weekend, when an all-night negotiating session between managers and the underground miners agreed on a temporary negotiating document. In exchange for returning to the surface, the miners secured Rusal's undertaking to open formal negotiations on the 11 demands, starting today. The union spokesman told Mineweb "work is still suspended at all 5 mines. At the moment, a working group [for negotiations] has been created. It includes representatives of strikers from both unions, representatives of Rusal, and the managing director of SUBR. Rusal has already announced that it is ready for negotiations."

Rusal has yet to acknowledge the strike on the company website, and Rusal's spokesman refuses to respond to questions from Mineweb. Instead, the company sent out a selectively addressed email, claiming that work at the Red Riding Hood mine and the four others at SUBR is planned to resume soon.

Union sources say they do not expect to get agreement from the management for the full 50% of salary increase they demanded ten days ago. However, they are confident of gaining between 20% and 30%. In addition, a demand for Rusal to restore company funding of sanatorium and recreational programmes, which were cancelled on January 1, has already been accepted. "At the last round of meetings," Sgibneva said, "Rusal announced that, because aluminium prices have gone up on the world market, they were intending to revive the social programmes by themselves."

The Severuralsk strike is the first by unionized workers against the powerful aluminium group, controlled by Oleg Deripaska. Workers at other Rusal plants, such as the Krasnoyarsk smelter, have complained at payroll cuts and elimination of the welfare programmes that were a traditional part of the production plant's obligation to its workers during the Soviet period. Strike action has been rare, however; and an effective strike rarer still.

One reason in this case is that the Independent Union of Miners, which appears to have initiated the wildcat action, has drawn solidarity from the other unions at the mine, and from the local town. News of the strike has also spread across Russia on television, prompting considerable sympathy for the wage claims, and little for Deripaska, who is reported to be first or second among Russia's wealthiest oligarchs.

The economics of the strike appear also to have weighed with Rusal. Severuralsk produces about 3.5 million tonnes of bauxite per year, or 20% of Rusal's global bauxite total. Inside Russia, it is the second most important supplier of bauxite to the Rusal smelters. The 10-day halt to production already accounts for more than 96,000 tonnes of bauxite. This is equivalent to the production of almost 24,000 tonnes of primary aluminium. At the prevailing LME fix, this is worth more than $68 million to the privately owned Rusal. The longer the stop-work continues, the more expensive it becomes for Rusal.

By contrast, the wage and welfare demands sought for the 3,000 miners of Severuralsk, if granted by Rusal this week, stand to cost the company less than $20 million for this year.

Despite boom conditions in the domestic Russian economy, and significant growth reported in average real income this year to date, there remain substantial lags for wage earners in pockets of the economy, moving east of Moscow and St.Petersburg, and outside the oil, gas and steel sectors. By contrast, independent measurement of spot prices for bauxite, alumina, and aluminium (in the international market) suggest that bauxite has grown in price by 20% since 2003; alumina by 63%; and aluminium by more than 200%.

Keeping the lid on the bauxite price has been a key Rusal objective, but without auditied published financial data it is not clear how it has been able to do this in Russia. In the two cost breakdowns Rusal has published -- one in February 2000, and a second in June 2007 -- bauxite is reported to amount to 43% of the cost of alumina production; labour cost just 6%. In the cost of aluminium, Rusal has estimated that 46% is accounted for by alumina, while labour comprises between 6% and 9%.

Electricity is significantly cheaper in the Russian aluminium production cycle, compared to the international average, and Russian labour is also relatively cheaper.

Bauxite Billionaires

Business Spectator, Australia - 8 Apr 2008 12:24 PM

Paul Messenger

Energy costs will continue to put pressure on Chinese Aluminium production costs; however the US and European smelters and refineries have higher production costs than the Chinese operations and it will be those assets in the US and Europe that will be the first to "shut down" if/when prices ease – they are the swing producers – not China. Unlike western smelters and refineries, the Chinese are very good at managing output and can easily re-deploy people without the need for permanent closures.

The recent growth in the Chinese alumina and aluminium capacity has been and continues to be driven by demand and that demand is from China so that is where the largest increase in supply capacity has been in recent years. We think China will continue to have a large alumina and aluminium industry for a long time but it is likely that demand growth for aluminium metal will increasingly be met by imports. In contrast, Alumina requires far less energy and so rising energy costs are not such a big factor in alumina production. China has expanded alumina capacity dramatically in recent years and plans further substantial growth over the next few years. Most of this growth was and will be possible through imports of bauxite from Indonesia, India and Australia. China will continue to be a major importer of bauxite for the foreseeable future.

Chinese bauxite imports are heavily reliant on supplies from Indonesia, but there is uncertainty about the future of that supply. Until recently most bauxite exports were from Bintan Island but those resources, having been mined for about 70 years, are almost depleted. The other source of Indonesian bauxite supply is Kalimantan; which has large bauxite resources but also environmental issues relating to the swampy ground over which the bauxite needs to be transported, and without a ready supply of road building materials some of these projects, are experiencing delays. There has also been talk in the Indonesian Parliament about banning future exports of bauxite in favour of building refinery capacity to convert bauxite to alumina in Indonesia.

The biggest concern that the Chinese alumina refineries have is the prospect of future restrictions in supply of bauxite from Indonesia – this is why they are actively seeking alternative suppliers, particularly in Australia. Shipping costs are a major component of the cost of imported bauxite. Cape Alumina’s proximity to China gives us a distinct competitive advantage over other bauxite regions of the world. Cape Alumina’s other key strengths in terms of future bauxite supply are national security, political stability, environmental management and quality control.

Rio Tinto is currently the only company exporting Australian bauxite to China, and the Chinese are acutely aware of the risks of being solely reliant on your competitors for your raw material. This is potentially a far greater problem for China than the recent duopoly of Australian iron ore supply because it is actually a monopoly.

While the Middle East has cheap energy, which will make them highly competitive in aluminium production, they do not have large bauxite deposits. Future refineries in the Middle East could source bauxite from India, but the fragmented nature of the Indian bauxite industry being dominated by small miners, including illegal miners, and traders as well as social conflict issues and political pressures to restrict the export of bauxite will force Middle East refineries to look further afield. Guinea has about a third of the world’s bauxite but exports only a relatively small percentage of the world’s needs. Apart from the serious political, infrastructure and labour issues that exist in Guinea, Cape York is actually closer to the Middle East so shipping costs will be lower.

Cape Alumina could be a potential future supplier of bauxite to the Middle East but it is China that will continue to be the key driver behind seaborne bauxite trade in this part of the world and Cape Alumina is very well placed to capitalise on this growing market.

CEO - Cape Alumina

Golden Aluminum set to close June 6

Youngstown Vindicator, OH - Wednesday, April 9, 2008

By Don Shilling

A sharp increase in aluminum prices forced the plant shutdown.

WARREN — The slowdown in the housing industry has claimed another victim — Golden Aluminum Extrusions.

The Warren plant has filed a federally mandated notice that says it will close June 6. The plant has 110 total employees, plus about 20 who were laid off previously.

The company is calling it an "idling" because it hopes to reopen the plant if market conditions improve, said Mary Frazzini, human resources manager.

"It’s a very sad day here," she said. "This is in no way, shape or form a reflection of the employees or their hard work.

The housing market has been down for some time, but the final push to close the plant came from a sudden spike in aluminum prices, she said.

The company is paying 30 percent more for aluminum this month than it did last month. The company’s products are made of aluminum.

"We don’t have enough orders to offset the cost increase," Frazzini said.

Golden Aluminum Extrusions bought the plant last September from Alcoa. The plant used to be known as Excel Extrusions and primarily extrudes aluminum which is made into items for home construction, such as window and door frames.

Golden takes thick sections of aluminum and produces thin strips that are sent to customers for processing.

Alcoa had been struggling with its domestic extrusion business before the sale. Workers in the Warren plant were working only 32 hours a week because of low orders.

Last year,Alcoa also sold two other extrusion plants and closed one. To replace that production, it moved its extrusion business into a joint venture with Sapa Group, which is based in Sweden but has plants in the U.S. and other countries.

Golden Aluminum Extrusions was a new company created to buy two Alcoa plants — the one in Warren and one in Plant City, Fla. The company is owned by Golden Metals of Fort Lupton, Colo. Frazzini said production from the Warren plant will be moved to the Florida plant, which has 140 employees.

Earlier this year, Indalex Aluminum Solutions closed extrusion plants in Girard and Niles, citing a downturn in orders. The closings eliminated about 325 jobs. The Girard plant produced aluminum for the building and construction industry, while the Niles plant targeted the transportation industry.

China seeking to buy a more than 9% stake in BHP

China Knowledge Online, Singapore -Apr. 9, 2008

China is planning to buy a more than 9% stake in BHP Billiton Ltd, the world’s largest mining company, in a bid to block BHP's planned acquisition of rival Rio Tinto, market sources reported on Wednesday.

Chinese authorities had not yet decided which state-owned financial institution might take a lead role in seeking sellers within BHP's diverse shareholder base, sources said.

The move comes after Aluminum Corporation of China (Chinalco), the nation's largest aluminum producer, bought a 9% stake in Rio Tinto Ltd for US$14 billion in February just weeks before BHP launched an all stock US$135 billion takeover bid for Rio.

Analysts noted that the potential merger of BHP and Rio could monopolize the commodities market and push up the prices of iron ore and coal. In this sense, beyond, Chinese steel producers see this as a great threat to sustainable development.

Australian Resources Minister Martin Ferguson said the government would deal with any request by a foreign company for approval to take a stake in an Australian company in a fair and open manner.

Copyright © 2008

To access our page on Bloomberg, type CKFI (GO)

Rio Tinto Says South Africa Smelter Delayed Up to Four Years

April 8 (Bloomberg)

By Dale Crofts

Rio Tinto Group's plans to build a $2.7 billion aluminum smelter in South Africa have been delayed as much as four years because of an inability to secure power supplies, said Dick Evans, chief executive officer of the company's aluminum business.

Workers on the Coega Project in Port Elizabeth, which was scheduled to start in 2010, have been moved to other smelting projects in Canada and Saudi Arabia, Evans said yesterday in an interview in Montreal.

London-based Rio is in talks with state-owned South African utility Eskom Holdings Ltd. about whether its planned expansion will allow Rio's development of the Coega smelter. Eskom plans to spend 300 billion rand ($42 billion) during the next five years, and its first major new plant will start producing some power in late 2011.

``We've gone to them and offered to defer the project as opposed to taking a legalistic approach,'' Evans said. ``We think it's in our long-term interest to work with the government to make sure the power is fully there and we are not competing with residential use at the point we start up a smelter.''

Rio rose 61 pence to 5,901 pence in London Stock Exchange trading. The stock has climbed 94 percent in the past year.

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

China's Chalco says new alumina plant to cost 'over 3 bln yuan'

Forbes - 04.09.08

BEIJING (XFN-ASIA) - Aluminum Corp of China Ltd expects to start work soon on an 800,000 ton-per-year alumina refinery in northern China, with the cost estimated at 'over 3 bln yuan,' according to Zhang Qing, Chalco's investor relations manager.

'We've gotten NDRC approval for the new plant, but haven't broken ground on the site yet,' Zhang told XFN-Asia, referring to the National Development and Reform Commission, China's central government economic planning agency.

Zhang cited a rule-of-thumb construction cost estimate of around 5,000 yuan per ton of capacity, which suggests overall costs nearer to 4 bln yuan. However, Zhang would only say that the cost is expected to be 'over 3 bln yuan.'

(1 usd 7.0 yuan)

Chinalco:Aims To Be World Class Multi-Metal Mining Co - April 10, 2008: 11:01 AM EST


SANTIAGO -(Dow Jones)- Aluminum Corp. of China, also known as Chinalco, aims to become a "world class multi-metal mining company," senior business manager Deng Gang said Thursday.

He said that because China lacks a leading diversified mining company with international competitiveness, it "lacks the right of say" in the global sector.

Speaking at the CRU, a copper conference, in Santiago during CESCO week, Deng said copper is the key growth segment that Chinalco is looking to develop.

"We plan to build Chinalco into a multi-national ... and develop and strengthen the company's copper segment, to make it world class," he added.

The company intends to "enter into smelting when conditions mature" and will initially look at securing increased copper mine and semis production capacity, Deng noted.

"Copper end-users have been a direct victim of the sharp price rise," he added.

Deng said that China's metals and mining sector was set to undergo a structural adjustment which would be sped up as large-scale consolidation became a "certain trend of development."

Chinalco, founded in 2000, has grown rapidly to become the world's second biggest alumina producer and third largest aluminum company. It owns Aluminum Corp. of China Ltd. (ACH), or Chalco. Chinalco expanded into copper in 2007 through a deal giving it access to deposits in Peru and by becoming the holding company of Yunnan Copper Group, China's third-largest producer.

Deng said Chinalco currently accounts for 4.6% of China's semis output with 560,000 metric tons a year, and 13% of its cathodes production with 1.5 million tons.

But its first aggressive move onto the international scene came earlier this year. In February, Chinalco teamed with U.S. aluminum producer Alcoa Inc. (AA) to acquire a 9% stake in Rio Tinto PLC (RTP), which is itself fending off a hostile takeover offer from BHP Billiton PLC (BHP). Another megamerger, between Brazil's Vale (RIO) and U.K.-listed Xstrata PLC (XTA.LN), was recently called off.

-By Andrea Hotter, Dow Jones Newswires; +44 (0)20 7842 9413; andrea.hotter@

U.S. aluminum demand slipped last year and may continue sliding in 2008, MA - 4/10/2008

By Tom Stundza

Purchasing of aluminum mill products dropped by 7% in the U.S. last year and probably will slide again this year because of "what is now clearly a recession in the U.S.," says analyst Stephen Briggs at Societe Générale in London. However, he and other analysts see global demand expanding by 10% again this year, so prices will continue to bedevil domestic buyers. "The fact that aluminum prices have rallied in the face of a possible U.S. recession shows that the U.S. economy is less important to global aluminum demand than it was in recent years," writes analyst Lloyd O'Carroll at Davenport & Co. in Richmond, Va. in a recent report.

In its review of 2007 business, the Aluminum Association reports that demand from domestic buyers for key products sheet and plate dropped by 5.8% from 2006 while extruded products shipments fell 15.7% and electrical wire and cable dipped 8.1%. Only 15% of the buyers polled by Purchasing in March expect to increase aluminum buying in the near future, bringing the five-quarter average to 26%. In fact, the aluminum buying index overall has dropped to 41.9 in March on an index where 50 indicates growth.

On the other hand, global aluminum demand has been growing strongly because of expanded purchasing by manufacturing and housing in the BRIC nations of Brazil, Indian, China and Russia. In fact, Chinese growth was 38% last year.

Aluminum smelting in North America expanded by 6% last year to 5.64 million metric tons, but most of that increase was triggered by 13% growth in exports of mostly primary ingot destined for fabrication elsewhere (since exports of mill products slipped by 1%). However, latest new-order data from the Aluminum Association suggests that purchasing will be depressed in the U.S. and Canada again this year.

Also, early 2008 exports of aluminum ingot to China may slow as the year progresses. The worst Chinese winter weather in decades damaged power networks in southern provinces in late January to early February, forcing electricity-intensive aluminum smelters to shut down or reduce production. Smelters have gradually resumed production since late February and most are expected to return to full operations in late April or early May.

Guinea says RUSAL risks losing alumina plant

Guardian, UK, Reuters, Thursday April 10 2008

By Saliou Samb

CONAKRY, April 10 (Reuters) - Guinea's government has warned Russian aluminium group RUSAL that it risks losing its Friguia alumina factory if it does not successfully renegotiate a share transaction with the West African state.

RUSAL said in a statement its purchase of the Friguia factory was legal and that the company had received no official complaint about it from the Guinean authorities.

Guinea is the world's top bauxite exporter with around one third of all known reserves of the ore used to make aluminium.

The government has identified RUSAL as one of the operators whose contracts are up for review by a minerals and petroleum contracts revision committee known as CIRCAM.

RUSAL, which had previously operated Friguia under a long-term contract, acquired full control of the plant in 2006.

The deal involved buying 100 percent of the Friguia company from the state, along with the government's 15 percent stake in the operating company, Alumina Company of Guinea.

RUSAL said at the time that the total value of the deal, including investments, modernisation and a planned expansion that would eventually increase the plant's output capacity to 1.5 million tonnes of alumina per year, from between 600,000 and 700,000 now, one of a raft of planned expansions in Guinea.

Prime Minister Lansana Kouyate, whose year-old government has initiated a review of minerals permits, said in February the country needed to derive more benefit from its mineral riches.

"The prime minister pointed out that we are faced with a poor contract which has moreover been poorly implemented," government spokesman Ousmane Souare said in comments broadcast on state television after a cabinet meeting late on Wednesday.

"Regarding the privatisation, the CIRCAM has received instructions from the cabinet to begin renegotiating the price of the sale of Friguia shares to determine the exact value of the factory, under the threat of cancellation, pure and simple, of the privatisation," Souare said.


RUSAL said the transaction was above board.

"We have acquired the Friguia bauxite and alumina complex in full accordance with the clauses of an agreement, which had passed all stages of juridical coordination with the government of Guinea and with the procedures existing in that country," the company said in a statement issued to Reuters in Moscow.

"We have not received any official warning of complaints about the agreement or its implementation by us from Guinea's authorities," it said.

Kouyate was appointed a year ago as a consensus premier in a deal to end a violent general strike called by unions against President Lansana Conte's rule. Some 137 people were killed during the strike, mostly shot dead by Conte's security forces.

Relations between Conte and Kouyate have soured in recent months in a growing power struggle between reformers and a powerful clique that has formed around the aging, diabetic Conte during his autocratic 28-year rule.

Last week Conte issued a presidential decree cancelling a deal Kouyate had earlier signed with Libyan investors to purchase stakes in three hotels in Guinea. (For full Reuters Africa coverage and to have your say on the top issues, visit: (Additional reporting by Aleksandras Budrys in Moscow; writing by Alistair Thomson)

Bauxite Workers in Surinam Go on Strike

RedOrbit, TX - Saturday, 12 April 2008

Text of report by Caribbean Media Corporation news agency website on 12 April

Paramaribo, Surinam: Some 500 workers in Suriname's bauxite industry, on Saturday went into their third day of strike action, demanding better wages and improved benefits.

The workers from US-based Kier CCC, a contractor for the Suriname Aluminium Company (Suralco), walked off the job after rejecting a proposal from the company.

The workers are claiming that a proposed salary increase is insignificant and are demanding a pay rise of at least US$2.00 per hour. Disgruntled workers staged a protest Thursday and Friday in front of the Suralco alumina refinery in Paranam, vowing to continue industrial actions on Monday. According to the workers they only received 60 per cent of the monies being paid to their employers by Suralco.

Meanwhile, in an official statement the Suralco management is distancing itself from "a dispute between the contractor companies and their employees".

According to the bauxite company, for over 15 years Suralco has been outsourcing its less critical non-core operations to sub- contractors. The Suralco management maintains that the company could only offer suggestions how much the workers should be paid, but the final decision is taken by the contractor and subcontractor companies.

Workers are claiming that their salaries have not been increased for over 10 years.

"We didn't protest before because it was mandatory to work 12 hours a day, but since this has been cut back recently to eight hours a day we can't cope any longer with these salaries," said a worker who didn't want to be named.

"We have to work very had for low salaries while the costs of living are increasing every day. Since we don't have a trade union that doesn't mean that we don't have rights," another worker added.

Calling on the government to intervene the workers say that they will establish a union to look after their interests.

Originally published by Caribbean Media Corporation news agency website, Bridgetown, in English 2010 12 Apr 08.

(c) 2008 BBC Monitoring Americas. Provided by ProQuest Information and Learning. All rights Reserved.

Source: BBC Monitoring Americas

The Games plan of Rusal chief Oleg Deripaska

Times Online, UK - 12 Apr 08.

Our correspondent looks at the oligarch running 'Putin's Olympics'

Mark Franchetti in Moscow

The crucial shareholders’ meeting at Norilsk Nickel, the world’s largest nickel and palladium miner, had not gone in favour of Oleg Deripaska. But Russia’s richest man seemed unfazed as he strolled into a wood-panelled conference room framed with large maps and antique books at Basic Element, his £11 billion investment company.

Soft-spoken and wearing a blue shirt emblazoned with his initials, he appeared steely calm as he discussed his ambition to see his company Rusal, the world’s largest aluminium producer, merge with Norilsk – a plan that suffered a setback at last week’s board meeting when shareholders resisted attempts to have three of Deripaska’s men elected to Norilsk’s board.

Deripaska has been trying to buy a blocking stake in the firm held by Mikhail Prokhorov, who is in the middle of an acrimonious "divorce" from Vladimir Potanin, his business partner of 15 years and Norilsk’s other principal shareholder.

If Deripaska gets his way he would create a £50 billion mining giant capable of rivalling Rio Tinto and BHP Billiton. Potanin, however, is said to be against the merger and last week’s board vote was seen as a key test for Rusal’s potential takeover.

The arm-wrestling over Norilsk is also pitting Deripaska against Alisher Usmanov, the owner of Metalloinvest, who last year bought 24% of Arsenal football club and who is now seeking a merger with the nickel giant. Prokhorov, who is understood to be unhappy with a clause in Deripaska’s deal, could be close to clinching a new agreement with Usmanov.

Far from appearing frustrated, however, Deripaska broke into a relaxed smile at the mention of Norilsk. "Everything will be clear next week," he said in an interview with The Sunday Times.

"Yes, I’m interested in a merger because Norilsk is a good company but it’s a complex project. It’s not an easy job but there is a synergy between Norilsk and Rusal. There’s great potential to grow.

"I haven’t heard that Potanin is against a merger. He is a reasonable man and he wants to look at the real figures. It’s not about rivalling other companies around the world. It’s about growing in Russia."

According to the latest list of the world’s wealthiest people compiled by Forbes magazine, Deripaska, who recently turned 40, is now worth £14 billion, making him the richest of Russia’s 87 billionaires and more than £2 billion better off than his close friend Roman Abramovich, owner of Chelsea football club.

Deripaska laughs off the claim, saying there are several Russians richer than him. "There is a Russian saying that money does not like attention and I don’t see why one should count other people’s money," he said. "The only thing that has changed since the claim that I’m Russia’s richest man is that my people now tell me that everything appears to have become more expensive for Basic Element."

Russia’s richest man or not, what is beyond doubt is that Deripaska is far from feeling he has reached his peak. He says he normally works a 16-hour day and spends most of his life in his office or on a plane crisscrossing Russia and the world to attend meetings and visiting factories.

Deripaska’s group has moved into aluminium production in Nigeria and China and signed agreements to produce coal in Kazakhstan. Basic Element also holds a 25% stake in Austria’s Strabag and a 10% stake in Germany’s Hochtief, two construction companies, and a 20% stake in Magna International, the Canadian automotive group.

Founded 11 years ago, Basic Element now holds assets in timber, mining, manufacturing, financial services, construction and aviation, and owns or co-owns companies that employ some 300,000 people on five continents. Last year Rusal postponed preparations for a flotation in London, a decision Deripaska said was dictated by the negotiations over Norilsk and by market conditions.

Despite his group’s rapid overseas expansion, Deripaska is bullish about Russia. "I see the company expanding mostly in Russia over the future," he said. "There are better opportunities here. I’ll invest abroad only in very specific cases, for instance to get into a good coal or bauxite deposit, but when you compare the prices with the same opportunities in Russia, it’s much easier to do it here.

"Do people really know what’s going to happen in the future in emerging markets in terms of business? Here we feel there is predictability and stability. In my view Russia is the best place to invest in the world right now."

Less than two years ago, Deripaska, who owns a £25m mansion in London’s Belgravia and learnt to speak English at the London School of Economics, bought LDV, the Birmingham van manufacturer, but has no plans to expand further in Britain.

"It’s too expensive to invest in Britain,’ he said. "You have very good people there, very good engineers and specialists, but it’s a very tough market. I spend very little time in London. I haven’t visited my friend Roman’s stadium since last summer. I have no time. It’s crazy."

Even for a country that has spawned nearly 100 billionaires in less than two decades and is long used to rags-to-riches stories, Deripaska’s rise is remarkable. Born in the city of Dzerzhinsk, close to Moscow, he moved at the age of four with his widowed mother, an engineer, to a traditional Cossack village near Krasnodar, in southern Russia.

When his mother had to move to work in another city he stayed with his grandparents, living off the land, milking the family’s cows and fetching water from the well. When his grandparents died, the state seized their home as part of a programme of breaking up Cossack settlements.

"I was seven but I remember it very well. It was a difficult time," said Deripaska, a keen horse rider who now owns a mansion close to Krasnodar and remains deeply attached to Russia’s south and its Cossack villages.

For seven years he moved from relative to relative before living again with his mother.

At university he studied quantum physics. As the Soviet Union collapsed and new opportunities opened up, Deripaska joined a metals exchange as a trader.

At 25, Deripaska went on to become director-general of the Siberian Sayansk aluminium plant. "I was a plant manager, studying the business as a whole," he said. "This is very important. Many people came in at the top and do not know what’s happening on the floor.

"I made my way from the bottom and I learnt to deal with problems. In 1994, for instance, we had a crisis. We didn’t have enough raw materials but we managed to change technologies when lacking almost everything, at times even power."

It was also a very dangerous time to be in business, when rivals were routinely dealt with by contract killers, and when mafia clans, corrupt state officials, ruthless entrepreneurs and former KGB officers fought over the spoils of communism. The aluminium sector was highly lucrative but also deeply murky.

In one attempt at a hostile takeover, Deripaska’s commercial director was seriously wounded.

The tough young trader turned businessman came out on top of the so called "aluminium wars". In 2000 Abramovich bought up most of the holdings in Russia’s aluminium industry and merged them with Deripaska’s company to create Russian Aluminium (Rusal). Abramovich later sold his stake to Deripaska, who since then has been undisputed king of one of Russia’s most profitable industries.

"I’m always asked the question, how did I do it? A lot of hard work. The key for me was learning the business from the factory floor," said Deripaska, who had just returned from a Kremlin meeting between Russia’s biggest entrepreneurs and Dimitry Medvedev, the country’s next president.

"Yes, Russian business has developed fast but there is no miracle here. A person who studied physics can also easily learn marketing, business and so on. It’s not rocket science."

Controversy still lingers, however. Mikhail Chernoy, a former associate of Deripaska’s and one of the early movers in Russia’s post-Soviet aluminium industry, has tried to sue Deripaska claiming that he owes him 20% of Rusal. Deripaska is adamant that he owes him nothing and denies there was any partnership.

The US State Department has revoked a visa it had granted Deripaska and is still refusing him entry to America for reasons it will not disclose. Deripaska, who is said to blame the problem on muck-raking business rivals, would not comment on the issue and said he hoped to see the matter resolved in the near future.

There can be little doubt that Deripaska – who is said to be on very good terms with Vladimir Putin, the outgoing president, and Medvedev, the man Putin chose as his successor – is well regarded in the Kremlin, not least because he is spearheading the government’s multi-billion-pound investment in Sochi, the site of the 2014 winter Olympics – one of Putin’s pet projects.

Deripaska’s group is to renovate the Black Sea resort’s airport and build several Olympic facilities, investing some £1.2 billion to develop the region. Deripaska also plans to invest some £1.5 billion a year to improve Russia’s ailing infrastructure, mainly by building roads and airports. A firm believer in bringing in foreign technology, expertise and investment, Deripaska and several foreign companies are involved in a £5.6 billion project to build a section of ring road round St Petersburg.

Complaining that salaries in Moscow are too high and people too lazy, Deripaska said that, if he could, he would move the Russian capital to Novosibirsk in Siberia, where, he said, "people are less spoilt".

"Russia needs more time, he said. "Leading developed countries have business histories going back hundreds of years and companies that are 50 years old. The stance abroad among investment banks is simple. They want to pay less when investing here. And I always say why? We are more profitable, we have more opportunities to grow – why a discount? I can grow 20% a year, why should you pay less?

"We are trying to create good companies that will be competitive in 50 years. And I have no doubt that Rusal will still be around and in very good shape.

"Russia has great potential and tremendous opportunities. I truly believe that it’s the best place to be in as a businessman."


UNITED Company Rusal was created last March via the merger of two Russian aluminium giants, Rusal and Sual, with the alumina assets of Swiss group Glencore.

UC Rusal accounts for almost 12% of the global output of primary aluminium (4.2m tonnes annually) and 15% (11.3m tonnes annually) of alumina, the key component in the manufacture of aluminium metal. It also produces 72,000 tonnes of aluminium foil.

The group’s assets include 12 alumina refineries, 15 aluminium smelters, three foil mills and seven bauxite mines.

Dubal to host ARABAL 2008 in Dubai under the patronage of HH Sheikh Hamdan Bin Rashid Al Maktoum

Al-Bawaba, Jordan - 14-04-2008

Aluminium giant is first company in region to host the bi-annual event for the fourth time, promises to deliver an extremely successful conference and exhibition in silver jubilee year.

Dubai Aluminium Company Limited ("DUBAL"), the seventh largest producer of aluminium in the world and a leading player in the Arabian Gulf, has today confirmed that it will host the 13th International Arab Aluminium Conference and Exhibition ("ARABAL 2008"), which will be held at the Grand Hyatt Hotel in Dubai from 9 to 12 November 2008. The event, which will be held under the patronage of HH Sheikh Hamdan bin Rashid al Maktoum (Deputy Ruler of Dubai, UAE Minister of Finance and Chairman of DUBAL), is expected to attract relevant participants from the aluminium industry in the Gulf region as well as representatives of international aluminium industry players.

Importantly, ARABAL 2008 marks the 25th anniversary of ARABAL’s inception, the inaugural event having been hosted by Kuwait Aluminium Company from 24 to 26 October 1983. An ARABAL Conference and Exhibition has been held every second year since then, with the honour of hosting the prestigious event rotating between the major aluminium producers in the Arab world – namely Kuwait Aluminium, Aluminium Bahrain ("ALBA"), DUBAL and the Aluminium Company of Egypt ("EGYPTAL"). Given the rapid growth of the aluminium industry in the region, as evidenced by the new smelter development projects already announced in the UAE (Emirates Aluminium in Abu Dhabi), Oman, Qatar and Saudi Arabia, the number of potential ARABAL event hosts is likely to expand directly in the near future.

"We are extremely privileged to be hosting ARABAL 2008, and equally proud that we can do so under the patronage of HH Sheikh Hamdan bin Rashid al Maktoum," says Khalid E Buhumaid (GM: Corporate Relations & International Affairs and Official Spokesperson for DUBAL). "By design, the event provides a forum for specialists and major aluminium companies from the Arab world to transfer their experiences and exchange information with the regional aluminium smelters and other downstream companies, alongside participants from multinational organisations. Over the years, it has evolved into one of the most important events in the international aluminium industry calendar, such that we are confident of attracting more than 600 delegates from across the globe."

Strong interest already exists regarding the Middle East, reflecting its rapid growth in recent years and potential to become a leading player in the aluminium industry. In 1980, the region contributed 1 per cent of the total world aluminium production. Today, it accounts for about 7 per cent of the 38 million tonnes of metal produced on the world market each year. Moreover, the region is ideally positioned to play an even greater role as a primary producer – especially given the need for additional production capacity created by the increasing demand for the metal worldwide, coupled with the vast energy resources available and convenient location of the Middle East on the world map. Indeed, leading industry experts believe that, by 2020, the Middle East will produce approximately 6 million tonnes of aluminium a year (equating to more than 10 per cent of global production); and that, by 2030, the volume produced by the region will rise to about 10 million tonnes.

Already, several major international aluminium companies, such as Rio Tinto Alcan and Hydro, have invested in joint venture smelter developments in the GCC region, specifically in Qatar, Oman and Saudi Arabia. Current estimates indicate that the number of smelter complexes in the region will increase at least by six over the next decade.

ARABAL 2008 will also stimulate commercial opportunities for Dubai by showcasing the city’s superb tourism and business infrastructure to an international audience; and will simultaneously demonstrate its innovative and cosmopolitan flair.

According to Buhumaid, the chosen theme for ARABAL 2008 is "The Changing Dynamics of the Aluminium Industry in the Gulf Region". This will be interpreted through a combination of plenary session and panel discussions in the conference component, the content of which will focus on the specific needs of the fast-growing sector. The topics addressed will range from energy and power generation challenges in building smelters; securing bauxite and alumina supplies; project financing; marketing aluminium metal; skills development and training; innovation and product development; responsible aluminium production; emerging trends in the aluminium industry; and value-adding downstream industries. "Acknowledging the international status of ARABAL 2008, the programme will feature regional and international speakers who are authorities in their respective fields of expertise," says Buhumaid. "The exhibition component of ARABAL 2008 will complement this by focusing on education for the aluminium industry in the Gulf region; as well as the world-class environment, health and safety initiatives already implemented by leading aluminium companies with a view to protecting the environment, employees and neighbouring communities."

Buhumaid adds that ARABAL 2008 is the fourth of its kind to be hosted by the company. The previous ARABAL events hosted by DUBAL in Dubai were:

§ 3rd International Arab Aluminium Conference and Exhibition, 24 to 26 October 1987;

§ 7th International Arab Aluminium Conference and Exhibition, 14 to 16 October 1995; and

§ 10th International Arab Aluminium Conference and Exhibition, 11 to 14 November 2001.

"This is a true feather in DUBAL’s corporate cap, as DUBAL is the first company to host an ARABAL event for the fourth time," says Buhumaid. "We will mark this milestone by delivering one of the most successful ARABAL events ever, thus ensuring that this silver jubilee year is truly memorable."

© 2008 Al Bawaba (

Chinese Foreign Mining Acquisition Equal to All of 2007

Daily Reckoning - Australian Edition, Australia April 14th, 2008

By Dan Denning

Dan Denning is the author of 2005's best-selling The Bull Hunter (John Wiley & Sons). A specialist in small-cap stocks, Dan draws on his network of global contacts from his base in Melbourne, Australia and pens the small cap newsletter, The Australian Small Cap Investigator. He is also a contributing editor to the Australian resource investing publication Diggers & Drillers.

In the beginning of the resource bull market, all commodities were created equal. They all rose together, with the exception of a few products like aluminium and rubber, which lagged the rest of the group. Now, things are different. Call it the great energy sorting.

What does that mean? Investors are going to have to begin considering the embedded energy costs in tangible goods. Everything in life takes energy, from making your scrambled eggs in the morning to smelting aluminium. Some resources are more energy intensive than others.

Take the Mexican stand off between BHP Billiton (ASX: BHP) and Rio Tinto (ASX: RIO). BHP feels its exposure to coking coal, oil, and gas gives it an earnings advantage over Rio. Not so!, says Rio. Rio says its exposure to iron ore, copper, and aluminium means it will grow is earnings more and sooner than BHP.

Energy earnings versus metals earnings. It kind of reminds you of the Priority Dispute between Newton and Leibniz over who invented the calculus, doesn't it? Chicken, egg. Egg, chicken. Cluck.

Aluminium is an energy-intensive metal, and therefore more price sensitive in an energy-scarce world. This is to Rio's advantage, the company reckons. "The price for aluminium now has a new base," Rio's chief economist Vivek Tulpule told investors in Melbourne last week.

"Margins for existing aluminium producers who have cheap energy, their own bauxite, and who aren't exposed to the Chinese currency, go up. This is a phenomenon that people have only started to clue on to very recently."

Tulpule also said that, "Though Chinese aluminium supply had traditionally risen in tandem with demand, keeping a lid on prices, soaring energy costs in China and rising bauxite costs had made Chinese producers the most expensive in the world."

In gold, the mantle of lowest-cost producer has always been coveted. In resource, the mantle of lowest-energy-intensity may be the key to figuring out which resources will go up the fastest. Energy-sensitive resources will see producers get hit hard by rising costs. This will cause some to close up shop, reducing production and supply. Prices will rise.

"An energy shortage in Chile may do for copper what cuts in electricity supplies did for platinum in South Africa spark a record-setting rally in prices," according to Heather Walsh at Bloomberg. "Chile may be forced to limit power use for the first time since 1999 because a drought has reduced water levels at hydroelectric reservoirs."

Proximity and possession of energy may even better than access to cheap capital in coming years. Energy is a kind of capital, isn't it? If that's the case, Australia has a huge capital base, with its reserves of coal, natural gas, and uranium.

Thermal coal prices are set to double from US$55 to US$125. That's based on the agreement between Japan's Chubu electric power and Xstrata which should be come the benchmark for 2000-09 contract prices. Spot prices for thermal coal have tripled in the last year. Spot coking coal (steel marking) prices have quadrupled in the last 12 months, and in the last two months they've doubled. Notice a pattern?

"The value of announced cross-border acquisitions by China so far this calendar year is now US$24.5 billion from 56 deals according to Thomson Financial-already almost equaling the record of $US29.8 billion for all of 2007," according to Colleen Ryan in the Financial Review. As usual in the financial world, the easiest way to find where asset prices are headed is to follow the money.

"China's acquisitions of foreign targets reached US$15 billion in the mining sector-the most active sector, largely comprising companies engaged in metals, mining, and chemicals-rising from just US$243 million in the same period last year," Ryan writes. Are you listening BHP?

Dan Denning

P.S. to get The Daily Reckoning direct to your inbox sign up to our free e-mail newsletter or if you prefer to use RSS, subscribe to the Daily Reckoning RSS feed.

4 RusAl Bauxite Mines Resume Work

The Moscow Times » Issue 3884 » Frontpage Top Wednesday, April 16, 2008

By Nadia Popova / Staff Writer

Four of the five mines at United Company RusAl's bauxite mines in the Sverdlovsk region resumed operations Tuesday, as more than 5,000 miners agreed to return to work.

A hard core of 74 miners at one pit, the Little Red Riding Hood mine, continued a hunger strike over a 50 percent wage hike demand and an end to weekend shifts.

The company agreed to end weekend shifts and offered a 5 percent wage increase beginning May and 25 percent more by year's end, miners said Tuesday.

RusAl spokeswoman Yelena Shuliveistrova declined to confirm that the company had made the offers, however. "We are still in the process of negotiations," she said.

"The order to resume operations was issued due to the multiple requests from the majority of the miners," RusAl said in an e-mailed statement earlier Tuesday. "The four mines of the North Urals Bauxite Mining Complex came to work at midnight."

Miners at the Little Red Riding Hood mine began an underground occupation March 26. After 10 days underground, more than a week of subsequent negotiations and a three-day hunger strike, the miners admitted they hadn't gotten much out of the company.

"I feel angry and frustrated, but I will have to go back to work," said one miner, blaster Igor Taroyev. "The employer has distributed an official document saying we had to begin work. If I don't go, I'll be fired."

Taroyev said he had learned that one of his fellow-strikers, Andrei Savin, had died of a heart attack on Monday. Savin, in his 50s, had worked at the mine for more than 20 years, Taroyev said.

The head of the miners' union at the complex, Valery Zolotaryov, was briefly arrested and then released Tuesday after being accused of organizing sabotage.

n RusAl said its bauxite output grew 13 percent and aluminum output 9.4 percent in the first quarter of 2008.

Rio Tinto to sign $7.5 bln Saudi smelter deal by Aug

Guardian, UK Reuters, Tuesday April 15 2008

By John Irish

DUBAI, April 15 (Reuters) - Saudi Arabian Mining Co (Maaden), which plans to sell shares to the public this year, said on Tuesday it expects to sign a deal with Rio Tinto by August for a $7.5 billion aluminium complex.

Maaden and Rio Tinto unit Alcan agreed last year to develop one of the world's largest aluminium-making projects, including a smelter, an alumina refinery and a power station, in Saudi Arabia, the world's biggest oil exporter.

"We are hoping to finalise the aluminium joint venture with Rio Tinto by August," Maaden Chief Executive Officer Abdullah Dabbagh told reporters on the sidelines of a conference in Dubai.

The 670,000-tonne-per-year smelter should cost about $7.5 billion, Dabbagh said. Earlier, the project cost was quoted as $7 billion.

To help finance expansion, state-owned Maaden plans to raise 9.25 billion riyals ($2.47 billion), plus a premium, in an initial public offering (IPO) this year in Saudi Arabia, Dabbagh said.

The sale of a 40 percent stake in an IPO was awaiting approval of Saudi Arabia's Capital Markets Authority, he said. Maaden will also sell a 10 percent stake to two state funds.

"I'm hoping it will happen this year. If not, it will be a problem for us," Dabbagh said.

The share sale, on which JPMorgan Chase & Co is advising, was initially planned for last year.

Maaden, which generates most of its revenue from gold production, is developing projects, including phosphate mining, worth about 44 billion riyals as the kingdom seeks to diversify its economy away from energy.

The phosphate venture with state-controlled Saudi Basic Industries Corp (SABIC) will cost about 17 billion riyals, and Maaden should finalise a loan to help fund it by next week, Dabbagh said, without specifying the size of the loan.

Maaden had appointed banks to arrange a $2.3 billion syndicated loan for the venture, a banking source said in February.

"At the moment, we are hoping to close a loan, which includes an Islamic tranche, for a phosphate project by next week," Dabbagh said.


Saudi Arabia has been making efforts to attract investment from big aluminium makers, relying largely on gas-fired electric power.

Alcan said last year it would own 49 percent of the aluminium project, which would draw on a 90-million-tonne bauxite reserve in Az Zabirah in northern Saudi Arabia, representing 30 years of mining in terms of proven reserves.

Maaden expects the project's first metal to be poured by 2012, Dabbagh said.

Saudi Arabia's mineral reserves of gold, silver, copper, lead, zinc, tantalum, among others, were "almost the size of the Canadian shield", Dabbagh said, referring to the vast layer of solid bedrock that covers much of northern Canada.

"The problem is that it is not being explored," he said, adding the government had passed a new mining law to allow foreign companies to ramp up exploration and production of minerals.

(Writing by Daliah Merzaban; editing by Chris Johnson)

Whinnen Resources (ASX:WWW) Acquires Option for African Bauxite Project

ABN Newswire (press release), Australia - Apr 17, 2008

Perth, Whinnen Resources Limited (Whinnen, the Company) (ASX: WWW) is pleased to announce that it has entered into a conditional agreement to acquire 85% of the Fongo Tongo Bauxite Project in the Republic of Cameroon in Africa, for a total consideration of US$8 million.

Payment will comprise US$4 million cash and US$4 million in shares, and will be subject to satisfaction of milestones as outlined below.

The Fongo Tongo project is located 14kms northwest of the major town of Dschang in western Cameroon and is a high-grade bauxite deposit relative to other deposits around the world. The project covers an area of 916km2 which is very well drained allowing year-round mining and exploration operations. It exists as a series of hilltops on a laterised plateau at between 1500 to 1800 metres above sea level.

The area was first explored in 1956 by the Cameroonian Department of Mines and Geology and again by Alcan in the 1970s and 1980s. All exploration was done by hand and there has been no modern exploration of the project (i.e. never been drilled).

Alcan completed a feasibility study in 1980, which was based on an initial mining target of 1Mt per year of washed bauxite, and a hydro-electric powered alumina refinery producing 400,000t of alumina per year capable of expanding to 1,200,000t of alumina per year. Alcan wrote that the bauxite reserves were calculated at 34.0 Mt at 47.0% Av.Al2O3, and 2.47% R.SiO2 at Fongo Tongo only. The Company believes that these historical results may be equal to the JORC term Inferred Resources, but not reserves. These numbers are in a category varying from indicated (IND) to potential (POT). The low category of the bauxite reserves is emphasized, which means a major exploration program will be required to prove the reserves.

Under the agreement, Whinnen will acquire 85% of Yekani Mining Company (Cameroon) S.A (Yekani) which holds 100% of the Fongo Tongo Bauxite Project. The remaining ownership of Yekani will consist of 15% held by Cameroonian interests. Exploration Licence (Permit de Recherché) number 028 was granted to Yekani in March 2006. If a mineable resource is outlined, Whinnen plans to convert the tenement to a mining or exploitation permit, in which the Cameroon Government will have up to a 10% shareholding in Yekani.

There is scope to increase the tonnage of bauxite, as other occurrences at nearby locations have not been followed up. Other bauxite occurrences are located within the permit area; among these, those at Djeu, Melang, Bamboutos, Fomdjoumetah and Bamboutos North have been subject to reconnaissance pitting.

Recent sampling by Whinnen indicated grades of up to 54% Al2O3 at surface. Bauxite is easy to surface drill when compared to other commodities as it is near surface and of a soft nature. Bauxite is classed as a bulk mining commodity such as iron ore and coal.

A feasibility report written by Alcan in 1980 was based on an initial mining target of 1,000,000 tonnes per year of washed bauxite and a hydro-electric powered alumina refinery producing 400,000t of alumina per year capable of expanding to 1,200,000t of alumina per year.

The project area is well serviced by the town of Dschang which is connected by sealed roads to the capital Yaounde and the Port of Douala. There is an electricity grid and telecommunications, including mobile phone service, over the area. The area also has abundant flowing water and a large pool of potential labour.

It is envisaged that the bauxite could be mined and washed onsite and then transported by slurry pipe to the Douala, Cameroon's major port capable of handling ocean-going ships. Douala is Cameroon's second largest city and is well developed, and the centre of much of the country's oil industry.

Current global aluminium production is around 38Mt per year, which is forecast to increase to 55Mt by 2013. This means an additional 17Mt of aluminium metal - implying another 33Mt of alumina capacity and 80Mt of Bauxite capacity. The aluminium market needs increasing reserves of high grade bauxite low in contaminants and located near low-cost power sources. The Fongo Tongo Project has these attributes.

Whinnen initially plans to sell bauxite from the Fongo Tongo Project to alumina refineries. There is growing demand from alumina refineries in China, Russia, and the Middle East. China is a potential new market for bauxite and the average import price for bauxite to China has risen over 40 per cent over the past year, and imports have risen to 8Mt a quarter.

With the cooperation of the Cameroonian Government, Whinnen hopes to establish an alumina refinery in Cameroon in the medium term, using carbon friendly hydroelectric power.

Compared with other African countries Cameroon enjoys relative political and social stability, which has permitted the development of agriculture, roads, railways, and large petroleum and timber industries. A new and modern mining code which promotes investment in exploration and mining was drafted and published in 2001, and came into force in 2004.

Fongo Tongo is relatively high-grade bauxite deposit when compared with other deposits around the world, as can be seen from the table below. The amount of reactive silica is also favourable.

Deposit Name Al2O3% R.SiO2


Fongo Tongo Mining Outline

Based On Alcan Prefeasibility 47 2.72

Alcoa Darling Range reserves 32.5 unknown

Worseley Boddington 30.7 unknown

Alumina (Alcoa) - Cape Bougainville

(Has Resource/Environment Sensitivities) 36 1.9

Alumina - Alcoa Mitchell Plateau

(Has Environment Sensitivities) 46.8 4.6

Vale - Paragominas 50 4%


Table 1 - Various Bauxite Deposits with published grades


Whinnen's priority after satisfactory completion of Due Diligence is to;

1. Prepare an exploration and drilling programme based upon a desktop review of the previous data and on-site review.

2. Convert any previous resource to JORC compliant status, if possible. To fast track trenching and drilling to estimate JORC resource of 100 Mt.

3. Initiate an optimisation study to access infrastructure and all factors affecting project economics including hydroelectric power, slurry pipeline and economics of exporting bauxite versus alumina.

4. Given the favourable mineralogy of the resource, the company will be evaluating all options including the likelihood of an Alumina refinery in the medium term.


The area is well serviced by the large town of Dschang which is connected by sealed roads to the capital Yaounde and the Port of Douala. There is an electricity grid, telecommunications, including mobile phone service over the area. The area has abundant flowing water and a large pool of potential labour.

It is envisaged that the bauxite could be mined and washed onsite and then transported by slurry pipe to the Port of Douala. This would be similar to the recently commissioned 242 km long slurry pipeline which is operating successfully at Paragominas in Brazil. There is a hydroelectric power station at Edea to the south and sites for many other hydroelectric power stations within close vicinity.

The city of Douala is the second largest in Cameroon. It is a well developed city and the centre of much of the country's oil industry. The port at Douala is a capable of handling 30,000 tonne ships.

The Port of Douala is currently importing alumina for the Rio Alcan's Hydropowered Aluminium Smelter at nearby Edea. There is currently no alumina plant in Cameroon.


Since 1980 the price of bauxite and alumina has increased significantly as the world's energy resources have become more expensive and demand increases for aluminium. Current production is around 38 Mt per year. This is forecast to increase to 55Mt by 2013. This means an additional 17Mt of aluminium metal, implying another 33Mt of alumina capacity, 80 Mt of Bauxite capacity, and new electricity generating capacity of 29,000MW.

The aluminium market needs increasing reserves of bauxite that is of a high grade and low in contaminants located near low-cost power sources.

The Fongo Tongo Project has these attributes.


Whinnen Resources Limited initially plans to sell the bauxite to alumina refineries. There is growing demand from alumina refineries in China, Russia, and the Middle East. Until recently, bauxite and alumina production has essentially been established to service the large aluminium companies needs, but sales of bauxite to third parties is becoming more common. China is a potential new market for bauxite. In China, imports have increased over the past three quarters as a response mostly to the dropping of import duties. The average import price for bauxite to China has risen over 40 per cent over the past year, and imports have risen to 8Mt a quarter.


The Republic of Cameroon is a unitary republic of central and western Africa. It borders Nigeria to the west; Chad to the northeast; the Central African Republic to the east; and Equatorial Guinea, Gabon, and the Republic of the Congo to the south. Cameroon's coastline lies on the Bight of Bonny, part of the Gulf of Guinea and the Atlantic Ocean. The country is called "Africa in miniature" for its geological and cultural diversity. Natural features include beaches, deserts, mountains, rainforests, and savannas. The highest point is Mount Cameroon in the southwest, and the largest cities are Douala and Yaoundé the capital.

Cameroon became a German colony in 1884. After World War I, the territory was divided between France and Britain as League of Nations mandates. In 1960, French Cameroon became independent as the Republic of Cameroon. The southern part of British Cameroons merged with it in 1961 to form the Federal Republic of Cameroon. The country was renamed the United Republic of Cameroon in 1972 and the Republic of Cameroon in 1984.

Compared with other African countries, Cameroon enjoys political and social stability. This has permitted the development of agriculture, roads, railways, and large petroleum and timber industries.

A new and modern mining code was drafted and published in 2001. The new law came into force in 2004 and promotes investment in exploration and mining.


Pursuant to a conditional agreement, Whinnen proposes to acquire 85% of the issued capital of Yekani, inclusive of all rights, title and interest in the tenements.


The consideration for the acquisition is as follows:

1. A non-refundable payment of US$150,000, to be paid within 7 days of execution of the agreement, for the right to conduct due diligence on the Fongo Tongo Bauxite Project. In the event that Whinnen elects to proceed with the acquisition the US$150,000 shall form part of the acquisition consideration;

2. The payment of US$350,000 into an interest bearing escrow account, within 7 days of execution of the agreement. In the event that Whinnen elects to proceed with the acquisition the US$350,000 will be released to the Vendors as part consideration for the acquisition;

3. On expiration of the due diligence period (being approximately six months), should Whinnen elect to proceed with the acquisition, the consideration for the acquisition shall be the payment to the Vendors of up to USD$4 million in cash and the issue of up to US$4 million in Whinnen shares, to be satisfied as follows:

(i) Within 60 days of the election to proceed, payment of the sum of US$1.5 million in cash and US$2 million in Whinnen shares to be issued at an issue price determined as the VWAP based on the 7 trading days from the date of the announcement of satisfactory completion of Due Diligence; and

(ii) On the proving of a JORC compliant resources of not less than 100 Mt at grades better than 40% Al2O3 pre-washed, payment of the sum of US$2 million in cash and US$2 million in Whinnen shares to be issued at an issue price determined as the VWAP based on the 7 trading days from the date of announcement of satisfactory completion of Due Diligence.

Pursuant to the terms of the agreement, no less than sixty (60) percent of shares issued as consideration under the agreement will be subject to voluntary escrow for a period of 12 months from the date of issue.


The agreement is subject to a number of conditions, inter alia;

(i) the shares in Yekani being transferred free of all encumbrances;

(ii) completion of satisfactory due diligence; and

(iii) the obtaining of any necessary shareholder and regulatory approvals for the proposed transaction.


As the consideration for Yekani comprises the issue of shares in Whinnen, such issue may require the approval of shareholders in general meeting. If necessary, a Notice of General Meeting and Explanatory Memorandum will be dispatched to shareholders immediately following a decision by the Board to proceed with the proposed acquisition.

Tenement Subject of Agreement

The Exploration Licence issued by the Government of Cameroon, is known as "Permit de Recherché" Number 028 MINIMIDIT/DMG/SDAM, applicable for bauxite.

Vendors and Apportionment of Consideration

Vendor names

- Emmanuel Tem

- François Ekoko

- François Kamdom

- Arrow Creek Investments 169 (Pty) Ltd

- Thunderstorm International

- Nahum Holdings Limited

Total Option Consideration US$ 150,000

Total Possible Consideration US$ 8,000,000


Subject to satisfactory completion of due diligence on the Fongo Tongo Bauxite Project and a decision by Whinnen to proceed with the acquisition of Yekani it is proposed, subject to shareholder approval, to raise a yet to be determined amount through the issue of new shares and options.


1. The data contained in this announcement relating to the resources at Fongo Tongo does not comply with the JORC Code ("Historical Data"). The historical Data is not reported in accordance with the JORC Code and it is uncertain that following evaluation and/or further exploration the resource or reserve will ever be able to be reported in accordance with the JORC Code.

2. The Historical Data is extracted from the following reports:

a. First phase feasibility study of the Bauxite Deposits of Fongo Tongo Area Cameroon, Report Number M-ER-222-80, August 1980, by Alcan International Limited.

b. Western Region of Cameroon, prefeasibility Study for an Integrated Bauxite-Alumina-Aluminium Industry, January 1984, by Alcan International Limited.

c. Technical Report on Work carried out at the Fongo Tongo Permit Area, April 20 2007, Yekani Mining Company Cameroon SA.

3. The Company believes the Historical Data is relevant to shareholders and the market generally as it is fundamental to an understanding of the potential mineralisation of the area and the Fongo Tongo Project. Alcan are an internationally reputable company and the amount of work done indicates that their work has relevance.

4. The Company believes that the Historical Data is reliable as it was commissioned and performed by Alcan International - a highly respected international mining house with experience in developing such projects. Alcan's resource was based on long trenches and hand dug wells up to six metres. There was no drilling done at all as mineralisation is shallow and flat-lying. All trenches and wells were logged. The quality of assay data and laboratory tests is not known but of sufficient accuracy for Alcan to commission a pre-feasibility study. Mapping and surveying seems to be of a high standard but before the advent of Global Positioning System (GPS). The nature of the historic work programs seem thorough and based on conservative parameters.

5. The Historical Estimate is material as it was carried out by Alcan International, who already had an aluminium smelter in Cameroon and was looking to prove up bauxite resources. The size of Fongo Tongo and published grades indicate that it could be economic to mine. Whinnen plans to resample the existing pits and trenches as well as conduct drilling in existing and new locations within the Fongo Tongo project area. Whinnen intends to initially fund the program from current cash reserves and raising money through the placement of more shares subject to shareholder approval. All other Whinnen projects will be continued to be explored.

6. The Company believes that these historical results may be equal to the JORC term Inferred Resources, but not reserves. Alcan wrote that the bauxite reserves were calculated at 34.0 Mt at 47.0% Av.Al2O3, and 2.47% R.SiO2 at Fongo Tongo only. These numbers are in a category varying from indicated (IND) to potential (POT). The low category ("indicated" to "potential") of the bauxite reserves is emphasized, which means a major exploration program will be required to prove the reserves.

7. Whinnen has conducted an initial scouting trip to the area. Metallurgical testing by Whinnen indicates grades of up to 54% Al2O3, in random samples.

8. The Company intends to bring the Historical Data into compliance with the JORC Code within 6 months of execution of the agreement detailed in this announcement. The matters to be further evaluated include historical assay techniques and accuracy, existence of sampling trenches and wells, resampling and new trenching and possibly drilling of the Fongo Tongo area.

9. The ASX has granted a waiver to Listing Rule 5.6 to allow the Company to disclose the Historical Data and the announcement is otherwise in compliance with ASX guidelines and all company updates.

The information in this report which relates to Historical Data is based on information compiled by William Witham, who is a Member of the Australasian Institute of Geoscientists. William Witham is a full-time employee of Whinnen Resources Limited and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". William Witham accepts responsibility for the accuracy of the information disclosed regarding the Historical Data and consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

About Whinnen Resources Limited

Whinnen Resources Limited is a Perth-based company listed on the Australian Stock Exchange (ASX:WWW). Whinnen has five exploration properties all located in Western Australia. Hinkler Well is located approximately 50 kilometres north of the Yeelirie Uranium deposit in the eastern goldfields. The primary focus at Hinkler Well is the calcrete-rich Abercrombie creek which is located down stream of the Dawson Well Deposit (U3O8 Ltd) and upstream of Nova Energy's Centipede and Abercrombie Deposits. The Peterson project is located on the southern shores of Lake Raeside and is immediately south of Energy Metal's Stakeyard Well project. The White Ring Project is located in the Ashburton region , 100kms south of the Manyingee Uranium Deposit. The Company's other projects are Murders Pool and Lansdowne in the Kimberley Region of Western Australia.


William Witham

Managing Director

Whinnen Resources Ltd

Tel 08 9388 2967


James Moses

Fortbridge Consulting

Mob: 0420 991 574


The Market Price for the Resources China Wants is Rising

Part of a long article is shown below. To view the entire article go to


The real bombshell from Rio's announcements yesterday is that it will sign a deal with Saudi Arabian Mining Company to build a giant aluminium complex in the Kingdom. The complex will include the whole aluminium chain, a power generation facility, an alumina refinery, and an aluminium smelter.

As we argued in a recent newsletter, aluminium is the most energy-intensive of the metals. Its production is migrating from cheap energy-challenged areas (China and South Africa) to energy-abundant areas (the Gulf States). The Saudi smelter will produce 617,000 tonnes of the metal each year, making it one of the world's largest. It will cost US$7.5 billion to build.

Rio didn't say how much it would get of that US$7.5 billion. But between Rio, Worley Parsons (ASX:WOR), Leighton (ASX:LEI), and a host of other Aussie mining services and infrastructure companies, the move by the Saudis into minerals and metals production should be good news for Aussie firms. Our preferred play on aluminium continues to be bauxite, the ore from which alumina is made, which later is smelted into metal.

The votes are running 20-1 in favour of more technical analysis. Ask, and ye shall receive, only it will probably be over at Money Morning. We want to make a home for Gabriel Andre's analysis of global indices, Aussie indices, and individual shares. But after careful thought, we believe that kind of approach is more suited to our sister e-letter, Money Morning.

The DR will stick with its skeptical end-of-the-worldism while Gabriel and Al Robinson over at Money Morning track money flows, moving averages, and the technicals (which are often described as the 'language of the market'. Watch this space for further details and feel free to write in with your suggestions to

Chalco to add 900,000 tonnes of alumina capacity in Guangxi

SteelGuru, India - April 20, 2008

Interfax China reported that the Aluminum Corporation of China Co. Ltd will officially bring online an additional 900,000 tonnes of alumina production capacity on May 26th 2008 as part of an ongoing project at Pingguo county in Guangxi Province.

An official with Chalco's Guangxi subsidiary said that "The Pingguo plant plans to produce 1.22 million tonnes alumina this year, including output from the third phase of the project which is scheduled to come online on May 26th 2008".

The first phase project began operations in 1995 and second phase got underway in 2003, giving the project a total capacity of 900,000 tonnes of alumina each year. The third phase of the project, will double the project’s total current capacity, bringing it to 1.8 million tonnes of alumina per year.

Chalco Guangxi has access to abundant bauxite resources in Pingguo, which will feed the company's three alumina projects. The company also has an on-site electrolytic aluminum production plant.

Workers stop hunger strike at RusAl mine

RIA Novosti, Russia - 19/ 04/ 2008

SEVEROURALSK, April 19 (RIA Novosti) - The workers at a Urals mine owned by Russia's aluminum giant RusAl have stopped a hunger strike they had gone on almost a week ago to demand higher wages.

RusAl said Friday it has reopened the bauxite mine in the Sverdlovsk Region, where workers have been on strike since late March.

On March 26, some 100 workers refused to leave the mine, called Krasnaya Shapochka (Little Red Riding Hood) demanding a raise. The miners were holding talks with employers and trade union representatives. On April 13, a total of 75 miners declared a hunger strike.

A RusAl spokesman said Friday following a mine inspection about 600 miners had decided to return to work.

UC RusAl, controlled by Basic Element, owned by Russia's richest man, Oleg Deripaska, became the world's largest aluminum producer after a March 2007 merger between RusAl, rival Sual and Swiss Glencore's alumina assets.

UPDATE-Century Aluminum sets deal to buy Glencore alumina

Reuters - Tue Apr 22, 2008

NEW YORK, April 22 (Reuters) - Century Aluminum Co (CENX.O: Quote, Profile, Research) signed a long-term agreement to buy alumina from Glencore AG, a subsidiary of Swiss-based Glencore International AG, the U.S. aluminum producer said in a filing with the Securities and Exchange Commission posted on Tuesday.

The deal was signed on April 16 but became effective as of April 14, the SEC release said.

Under the deal, Glencore will supply Century with 290,000 tonnes of alumina in 2010, 365,000 tonnes in 2011, 450,000 tonnes in 2012, 450,000 tonnes in 2013, and 730,000 tonnes in 2014, Century said.

The alumina price will be indexed to the price of primary aluminum traded on the London Metal Exchange, the filing said.

On Tuesday, benchmark LME aluminum for delivery in three months MAL3 finished at $3,085 per tonne.

Century said the current agreement replaces a prior deal that was set last November.

Alumina, derived from bauxite, is the basic material used to produce primary aluminum.

Company executives have said recently that securing raw materials was key to its expansion strategy.

Glencore, international metals trader and producer, holds a 28.5 percent stake in Century and is its largest stockholder.

Based in Monterey, California, Century Aluminum owns primary aluminum capacity in the United States and Iceland, and alumina and bauxite assets in the U.S. and Jamaica. (Reporting by Carole Vaporean; editing by Jim Marshall)

Indonesia Antam says to build alumina plant in '08

Reuters - Tue Apr 22, 2008

JAKARTA, April 22 (Reuters) - Indonesian state miner PT Aneka Tambang ANTM.JK plans to start building a chemical grade alumina plant on Kalimantan island this year, its president director said on Tuesday.

The plant is part of the company's plans to reduce its dependence on nickel and step up its bauxite and gold business. Experts say having more than one commodity in its basket reduces volatility for the company.

Last year, Antam teamed up with three international firms partners, including Japan's Showa Denko KK (4004.T: Quote, Profile, Research) and Marubeni Corporation (8002.T: Quote, Profile, Research), to conduct a feasibility study for the plant which will process bauxite into alumina.

"Our target is to start construction later this year," Dedi Aditya Sumanagara said, adding that the plant is expected to have a capacity to produce 300,000 tonnes of alumina every year.

He did not elaborate on the investment needed for building the plant as it is still being negotiated with the partners.

The company plans to speed up a number of projects to help sustain growth when the price of nickel, a key ingredient for stainless steel, falls.

The projects include a nickel pig iron project on Maluku island with China's Tsingshan Holding Group and a $1.5 billion alumina and bauxite complex with Russia's United Company RUSAL (RUSL.MM: Quote, Profile, Research).

Antam, 65 percent owned by the Indonesian government, is involved in the exploration and production of nickel ore, smelting of ferro-nickel, exploration and production and refining of gold and silver, bauxite, and iron sands.

Indonesia is rich in mineral such as coal, nickel, copper, and gold but it has not seen fresh investment for years due to issues such as graft, red tape and a complicated regulatory environment.

Several global mining firms such as Freeport-McMoran Copper & Gold Inc. (FCX.N: Quote, Profile, Research) and Newmont Mining Corp (NEM.N: Quote, Profile, Research) have operations in Indonesia. (Reporting by Yayat Supriatna, writing by Andreas Ismar, editing by Sugita Katyal)

Emal awards USD 200 million contract to Alstom

SteelGuru, India - April 23, 2008

Trade Arabia News Service reported that Emirates Aluminum has awarded a USD 200 million contract to Alstom for the supply of its gas treatment centers. The deal is the largest of its kind in the aluminum industry and secures the use of Alstom’s best practice technology to reduce both fluoride and sulphur dioxide emissions as a core part of Emal’s focus towards strict environmental controls.

As a landmark JV between Dubai Aluminum Company and Mubadala Development Company, the investment reflects Emal’s commitment, both as a key player in the UAE’s economy and towards raising global smelting standards.

Mr Duncan Hedditch CEO of Emal said that "This significant investment shows how seriously Emal is taking its environmental commitment. The smelter’s gas treatment centers will utilize some of the most environmentally sound technology currently available in the market."

Mr Gregoire Poux Guillame MD of environment control systems for Alstom said that "Alstom is honored to work collectively with Emal to take significant steps towards environmentally sound aluminum production."

Alstom gas treatment centers are responsible for conducting fluoride and alumina recovery, sulpher dioxide scrubbing as well as power generation. Alstom will be responsible for a turn key supply of the plants that includes all aspects from design to erection, as well as commissioning of the performance tests. Each gas treatment centers at Emal will consist of 32 compartments, with the total filtration area for each GTC corresponding in size to approximately eight soccer fields.

RUSAL Invests $20m in ALSCON

This Day (subscription), Nigeria - 04.24.2008

From Kunle Aderinokun in Abuja,

Russian Aluminum (RUSAL), yesterday said it has invested over $20 million within 11 months of its acquisition of Aluminum Smelter Company of Nigeria (ALSCON).

RUSAL, which took over 77.5 per cent of the company in February 2007, promised that, it would within three years of takeover, invest over $150 million to refurbish and modernise ALSCON.

In a statement signed by its Head, Public Communications, Mr Chigbo Anichebe, BPE said this disclosure was made during a Post-Privatisation monitoring visit to ALSCON by the Bureau of Public Enterprises (BPE), to assess its level of performance and ensure the company adheres to the tenets of the Share Purchase Agreement it signed with the Federal Government.

In a bid to reach 75 per cent capacity by the end of first year and to have the 324 cells produce metal within 12 months, the company has concluded rehabilitation and commissioning of Gas Turbine Unit (GTU) No 1 reduction plant and repair of small ingots casting line No 1 and 3, and mixers No 1 and 4. On labour issues, the company informed that 357 staff were in ALSCON as at the time of handover in February 2007, and by March 2008, the number has increased to 703 (638 Nigerians and 65 expatriates).

Also, the number of expatriates has reduced from 72 to 65 after privatisation, while the number of Nigerians in management has increased from 26 to 66. BPE personnel were told that training for staff commenced in April 2008, to coincide with the warm weather in Russia.

The company also disclosed to the Bureau officials that similar on-the-job trainings for staff would be organised in Nigeria, with resource persons c from Russia and other parts of the world.

Ball Corp to Close Wash. Plant; To Book 2Q Charge $7 Million - April 23, 2008: 05:36 PM EST DOW JONES NEWSWIRES

Ball Corp. (BLL) late Wednesday said it will close its aluminum beverage can manufacturing plant in Kent, Wash., blaming current market conditions.

As a result, the Broomfield, Colo., company will record a $7 million charge in the second quarter.

The plant was acquired in 1989 and employs 111 people.

Ball Corp. also said it named Robert Alspaugh as a director and re-elected George Smart, Theodore Solso and Stuart Taylor to its board.

The company also declared a dividend of 10 cents, payable June 16 to shareholders of record June 2.

-Freddy Sebastian; 201-938-5400;

$220M for Alcoa in Russia

The Moscow Times, Russia - Thursday, April 24, 2008

Alcoa, the world's third-largest aluminum producer, said Wednesday that it planned to increase spending to $220 million this year on its two plants in Russia to help boost output and efficiency.

The company will invest slightly less than the combined $290 million spent in the previous three years, Yevgeny Luzov, Alcoa country manager for Russia, said Wednesday. (Bloomberg)

Guinea to Negotiate Bauxite Mining Contracts as Prices Rise

By Daouda Tamsir Niane and Antony Sguazzin

April 24 (Bloomberg)

Guinea, holder of the world's largest bauxite reserves, may seek a bigger share of profits from foreign mining companies including Russia's United Co. Rusal after commodity prices jumped.

The West African nation will review mining agreements, said Yamoussa Bangoura, president of Circam, the government committee responsible for altering the accords. Strikes and protests over foreign ownership of the mining industry led to the deaths of 113 people last year.

Guinea follows Zambia and the Democratic Republic of Congo in reviewing agreements to mine Africa's natural resources because of the seven-year boom in prices that has created record earnings for the industry. The price of aluminum, the commodity made from bauxite, more than doubled during the past five years to $3,080 a metric ton on the London Metal Exchange.

``It is not our goal to cancel the agreement with any company,'' Bangoura said in an April 16 interview in Conakry, Guinea's capital. ``There is no resistance to come back to the table. We think there are no big difficulties to come to solutions.''

Almost 50 percent of Guinea's 10.2 million people live in poverty, according to data compiled by the U.S. Central Intelligence Agency. The country has 7.4 billion metric tons of bauxite reserves, or 30 percent of the global total, U.S. Geological Survey figures show.

Aluminum Rises

Bauxite is refined into alumina, which is smelted into aluminum. The metal, used to make beverage cans and car parts, increased 8.9 percent in the past year on the LME.

Rusal, the world's largest aluminum producer, operates the Friguia alumina and bauxite complex at Fria in Guinea, where it can refine 700,000 tons a year of alumina, or about 1 percent of global demand. Vera Kurochkina, a spokeswoman for Rusal in Moscow, said she couldn't confirm whether the company received notification of talks with Circam.

``We purchased the bauxite and alumina complex in Fria in full compliance with the terms of the agreement that passed all stages of legal approvals with the Guinea government and in full compliance with the procedures existing in the country,'' she said.

Rio Tinto Group, the world's third-largest mining company, is developing the 170 million-ton-a-year Simandou iron-ore project in Guinea.

``We would naturally cooperate fully with any government review,'' Christina Mills, Rio spokeswoman in London, said by phone without elaborating.

Alcoa Inc. also operates in Guinea. Kevin Lowery, a spokesman for the New York-based aluminum producer, wasn't immediately able to comment.

To contact the reporters on this story: Daouda Tamsir Niane in Conakry via Johannesburg at; Antony Sguazzin in Johannesburg at

Governor Says RusAl May Close Smelter

Bloomberg The Moscow Times » Issue 3891 25 April 2008

United Company RusAl may close its Novokuznetsk plant and build a new smelter complex should it fail to meet targets to cut pollution, Kemerovo Governor Aman Tuleyev said.

RusAl will consider building a 300,000-ton smelter if it is not able to complete its 2 billion ruble ($85 million) program to clean up the area as early as 2010, Tuleyev said on his web site after discussing the matter Wednesday with chief executive Alexander Bulygin.

Company spokeswoman Vera Kurochkina was not immediately available for comment. A RusAl official in Moscow, who declined to be identified due to company rules, said the possibility of a new smelter was in an early stage of discussion.

RusAl ended so-called open-hearth output last year at the Novokuznetsk Aluminum Plant, which began operating in 1943, cutting emissions in half, the Kemerovo regional web site said.

Nalco lines up $1 billion project in Iran

Sify, India - Saturday, 26 April , 2008, 09:17

Ajoy K. Das/ DNA MONEY

Against the backdrop of demands for stiffer UN sanctions against Iran and Indian rebuff to US `guidance' on Indo-Iranian relations, public sector National Aluminium Company Ltd (Nalco) has lined up a $1 billion investment to put up smelters and a power plant in Iran.

The new Nalco overseas project, to be implemented in joint venture with Kerman Development Organisation, Iran, entails a 1.55 lakh tonne smelter in the first phase and another identical capacity smelter in the second phase, along with a 750MW gas based captive power plant.

Officials in Nalco said that the Indian aluminium major would have majority stake in the project along with management control.

Nalco has called bids to hire an engineering consultant for the project. Companies have until May 20 to submit their intent to participate in the venture, the company said.

Nalco's overseas investments are part of its strategic plan to convert its surplus alumina production into metal in geographies with lower energy costs.

It has already signed a deal with the Indonesian government to invest $3.4 billion in setting up a 5 lakh tonne smelter in two phases and a 1250mw power plant. Investments in South Africa are also currently under consideration.

Meanwhile, the metal refiner will complete its Rs 5,100 crore expansion of its domestic production facilities by end of current calendar. It would then ramp up bauxite mining capacity from 48 lakh tonne to 63 lakh tonne, alumina refinery to 21 lakh tonne from 15.75 lakh tonne, and metal production to 4.6 lakh tonne from 3.45 lakh tonne.

It is estimated that, even after meeting the requirement of its smelters at home, Nalco will be left with a surplus of 1.2 million tonne of alumina for the export market. This surplus alumina would be sufficient to produce around 5 lakh tonnes of metal, assuming there are no merchant exports of the commodity to international markets.

While Nalco's overseas venture makes business sense, analysts are not too sure of the public sector company's ability to successfully navigate the diplomatic geo-political quagmire involving Iran and its nuclear weapon ambitions.

It may be recalled that last year, Essar pulled the plug on a proposed refinery in Iran, which would have violated US sanctions against the country and jeopardized Essar's investments in the US. The ambitious $7 billion Iran-Pakistan-India gas pipeline too has been hanging fire over uncertain diplomatic relations between the countries.

The Indian government may have snubbed an US `guidance' on Indo-Iran relations ship seeming to follow an independent foreign policy, analysts are not sure whether Indian corporates are in a position to go ahead with investments in Iran risking governmental ire in western economies where demands for sanctions against Iran is getting strident by the day.

The Nalco project is expected to fleetingly figure, along with other energy related issues, in Prime Minister Manmohan Singh and foreign minister Pranab Mukherjee's meeting with Iranian president Mahmoud Ahmadinejad during the latter's visit to New Delhi on April 29.

Under license from

Suriname growing impatient over bauxite negotiations

Caribbean Net News, Cayman Islands - Monday, April 28, 2008

By Ivan Cairo, Caribbean Net News Suriname Correspondent, Email:

PARAMARIBO, Suriname: The Suriname government is growing impatient with the lack of progress being made in negotiations with mining multinationals Alcoa and BHP-Billiton to sign a multi-billion bauxite mining contract Natural Resources minister Gregory Rusland announced last week.

Suriname is seeking to secure continuation of the bauxite industry, including development of new mines and establishment of an integrated aluminum sector, since current resources would be depleted by 2010.

"We were trying to negotiate in a relaxed manner, but the government is losing its patience with the lack of progress and we arrived at a point that we will communicate this to the companies," said the minister in an invited comment.

He further added that, if talks with Alcoa and BHP-Billiton don’t produce results shortly, the government will look into other options and invite other possible investors.

The Suriname government is aiming at establishing an integrated aluminum industry, including bauxite mines, an aluminum smelter and hydro-power facilities in West-Suriname, while the two multinationals are only willing to operate bauxite mines in the said region.

Warren Pedersen, general manager of Suralco, a local subsidiary of Alcoa, said recently that, due to developments on the international markets, investment costs for the West Suriname operations have increased to nearly US$5 billion.

Suriname wants to keep the current alumina refinery in Paranam, since several hundred people are employed there, but it also wants to develop an integrated aluminum industry.

"If that seems impossible with the current companies we will certainly try to implement those plans with other partners," the minister warned.

"We have some ideas but the situation is not that easy since we are talking about multi-billion investments and there are not a lot of companies that could mobilise that amount of money," Rusland added.

On April 3, a top delegation of Alcoa traveled to Paramaribo to discuss several issues with the government after joint-venture partner BHP-Billiton reportedly presented a unilateral proposal to the government without consulting Alcoa/Suralco.

Several years earlier, the two companies signed a Memorandum of Understanding for the West Suriname operations. Feasibility studies have indicated some 325 million tons of bauxite in the Bakhuys Mountains in West-Suriname.

Meanwhile, Member of Parliament Winston Jessurun reiterated earlier views urging the government to look for other investors, since according to him the mining companies are deliberately delaying the negotiations.

According to the politician, Suriname should look after its own interest and seek ways to interest other possible investors for the project.

In August 2007, a Chinese business delegation, including officials from the China Development Bank, China Aluminum Company (Chalco), Sino-Hydro and China Grid, traveled to Suriname for talks with the Suriname government.

According to Rusland, the Chinese companies had also shown interest in investing in the bauxite sector.

DJ Rusal Chief Urges Japan Cos To Join Nuclear Project -Kyodo

Trading Markets (press release), CA - Sunday, April 27, 2008

MOSCOW, Apr 27, 2008 (Dow Jones Commodities News via Comtex) -- HIT | news | PowerRating | PR Charts -- The Russian chief of the world's largest aluminum producer, United Co. Rusal, has called on Japanese companies to take part in a project to build a nuclear power-generating and aluminum-making industrial complex in the Russian Far East, Kyodo News reported.

"We'd like to cooperate with Japanese companies and we'd like to bring them to participate in this project," Russian billionaire Oleg Deripaska said in a recent interview with Kyodo News and other news organizations, mentioning Hitachi Ltd. (6501.TO) as one of such promising companies.

Deripaska, 40, is the owner of investment company Basic Element, which has Rusal under its wing. Aluminum production requires huge amounts of electricity.

Deripaska said three locations are being considered as a site for the complex. But he stopped short of naming the candidate locations.

He cited the need to sign agreements related to the peaceful use of nuclear technology among Japan, Russia and the United States and "homogenize" different standards for nuclear technologies and safety as prerequisites for cooperation with Japanese firms.

"We have our own safety and technological standards," he said, adding, "It's not just a matter of taking your ABWR (advanced boiling water reactor) or BWR (boiling water reactor) technology."

"And the issue is homogenization of the standards that could be done in a couple of years," he said. "I do believe that if we really want to see nuclear stations being built in the safest way, we need to promote the homogenization of standards."

Rusal Holder Puts U.S.Last on Investing List

Wall Street Journal - April 28, 2008; Page B4


MOSCOW -- Russian metals billionaire Oleg Deripaska said the U.S. is "the last country on the list where we would invest" because of Washington's refusal to grant him an entry visa.

In a lunch with reporters from around the world at a posh Moscow restaurant Friday, Mr. Deripaska discussed plans for United Co. Rusal, the aluminum giant that is his largest holding. Rusal last week took a 25% stake in OAO Norilsk Nickel, the world's largest producer of that metal.

He said Rusal, where he is the controlling shareholder, is considering whether to increase its stake further, adding that he would also consider -- depending on the terms -- a three-way deal with OAO Metalloinvest, another Russian metals company that has held preliminary talks with Norilsk. Any of those combinations would create one of the world's largest mining giants, able to take on global players like BHP Billiton.

Mr. Deripaska brushed off concerns that such a large company would pose a monopoly threat. "Proper leadership and resource concentration work better than this broad belief in the invisible hand," he said.

Rusal, he said, would consider conducting its initial public offering on several markets in Europe and Asia, including China, though he wouldn't specify any time frame. The U.S. market, he said, is no longer attractive for a listing after the post-Enron tightening of regulation.

In his first public comments on the issue, he blamed his U.S. visa problems, which have dragged out for years despite work by prominent lawyers and lobbyists on his behalf, on unspecified "competitors" who he said spread false information about him to the State Department.

A U.S. Embassy spokeswoman declined to comment. People familiar with the situation have said the visa troubles are tied to his alleged links to organized crime. Mr. Deripaska has long denied any such ties.

"If the government is unreasonably pushing us out, why should we stay there in business?" he said of the U.S.

People close to General Motors Corp. have said he owns a stake of just under 5%, but Mr. Deripaska declined to comment on any such holding. GM and OAO GAZ, the Russian car maker he controls, are discussing joint production of a low-cost car for the Russian market.

In contrast with the U.S., Mr. Deripaska had words of praise for the Chinese authorities. "They understand business, they know the value of big shareholders being behind the companies," he said. China's clear industrial policy, something he said Western countries are just beginning to consider, makes China a much more dynamic competitor.

"We will meet you in five years and I will be very curious to see what's going to happen in your economies under the Chinese influence," he told a German reporter.

Just two weeks before Russia inaugurates a new president, Dmitry Medvedev, and incumbent Vladimir Putin moves over to the prime minister's post, Mr. Deripaska said there is "no risk" of political instability from the transition. Russian business is ready to help the new president, he said, noting that "it's important to have good relations" with the Kremlin.

One of his recent deals, last year's effort to buy OAO Russneft, an oil company, has been delayed by legal challenges and regulatory delays widely viewed as politically motivated pressure on the seller, Mikhail Gutseriev.

Mr. Deripaska denied the deal was political, adding he hoped to complete it within a few months.

He said the huge financial resources Russia has accumulated thanks to the boom in prices for its commodity exports in recent years has isolated it from the international credit crisis. Basic Element, his holding company, hasn't had trouble raising capital internationally, he said.

Write to Gregory L. White at

Russia’s richest man looks to HK rather than London

Taipei Times, Taiwan - Tuesday, Apr 29, 2008, Page 1


Russia’s richest man, Oleg Deripaska, on Sunday gave his strongest indication yet that he intends to float his multibillion-dollar aluminum business in China rather than on the London Stock Exchange.

Deripaska — who enjoys a close friendship with Russia’s president, Vladimir Putin — denied that the political row between Britain and Russia had led him to dump plans to hold a flotation in London.

"There is no connection," he said.

But Deripaska said that his United Company RusAl, the world’s largest aluminum producer, was likely to be listed in Hong Kong.

"It would give us a more comfortable solution," he said.

China offered a better business climate than Britain, he suggested, adding that the Chinese "train" is "driven by entrepreneurs who know what to do over the next 10 years."

Although business between Russia and Britain continues to thrive, Deripaska acknowledged that investing in the UK had been made more difficult by the diplomatic feud that has raged since the 2006 murder of Alexander Litvinenko.

"It’s like stepping on a rake," he joked.

London has attracted many listings from Russian companies in recent years and celebrated the 100th Russian firm to float last week.

But Deripaska also conceded that listing in Hong Kong offered fewer "legal" difficulties than the London Stock Exchange.

It is still not clear when RusAl’s initial public offering will take place — it has been subject to repeated delays after high court claims by one of Deripaska’s former partners.

Deripaska is Russia’s richest tycoon, with a US$28.6 billion fortune, according to this month’s edition of Forbes Russia.

DJ Rusal Planning To Expand Its Smelter Ops In Africa - FT

Trading Markets (press release), CA -Tuesday, April 29, 2008;

Apr 29, 2008 (Dow Jones Commodities News via Comtex) -- -- DOW JONES NEWSWIRES

Russian aluminum giant United Co. Rusal plans to expand into new parts of Africa after it revives a smelter in Nigeria, its first on the continent, the Financial Times reported on its Web site Tuesday.

Artem Volynets, Rusal's director of corporate strategy, said he was seeking sites for additional smelters and new places to mine bauxite, the material used to make aluminum.

"We believe that this is just the beginning of the potential future investments (in Africa)," Volynets told the FT. "We are very much looking forward to continuing our growth there."

Rusal took a 77.5% stake in Nigeria's Alscon smelter early last year, hoping to revive a plant that had been closed for eight years. The company said it is investing $300 million to update the gas-powered smelter in the Niger Delta, and it production in February. The company aims to restore its full capacity of 197,000 metric tons of aluminum per year by 2010, according to the FT report.

Rusal is also enlarging its mining and refining operations in Guinea, which has a third of the world's bauxite reserves. The Guinea projects combined with the smelter in Nigeria will allow the company to run a complete production cycle in west Africa, exporting finished aluminum by sea to the U.S. and other market.

Volynets also told the FT that Rusal was eyeing Libya as a potential site for its next African smelter, although he said he would also consider other countries on the continent with the oil, gas or hydro resources needed to fuel the energy-intensive smelting process.

Volynets also said he would welcome further cooperation with Chinese companies, which are themselves seeking African resources.

"We are keen for partnerships with China, with African countries and anybody else who can help develop opportunities in Africa," Volynets told the FT.

Newspaper Web site:

Russia’s richest man looks to HK rather than London

Taipei Times, Taiwan - Tuesday, Apr 29, 2008, Page 1


Russia’s richest man, Oleg Deripaska, on Sunday gave his strongest indication yet that he intends to float his multibillion-dollar aluminum business in China rather than on the London Stock Exchange.

Deripaska — who enjoys a close friendship with Russia’s president, Vladimir Putin — denied that the political row between Britain and Russia had led him to dump plans to hold a flotation in London.

"There is no connection," he said.

But Deripaska said that his United Company RusAl, the world’s largest aluminum producer, was likely to be listed in Hong Kong.

"It would give us a more comfortable solution," he said.

China offered a better business climate than Britain, he suggested, adding that the Chinese "train" is "driven by entrepreneurs who know what to do over the next 10 years."

Although business between Russia and Britain continues to thrive, Deripaska acknowledged that investing in the UK had been made more difficult by the diplomatic feud that has raged since the 2006 murder of Alexander Litvinenko.

"It’s like stepping on a rake," he joked.

London has attracted many listings from Russian companies in recent years and celebrated the 100th Russian firm to float last week.

But Deripaska also conceded that listing in Hong Kong offered fewer "legal" difficulties than the London Stock Exchange.

It is still not clear when RusAl’s initial public offering will take place — it has been subject to repeated delays after high court claims by one of Deripaska’s former partners.

Deripaska is Russia’s richest tycoon, with a US$28.6 billion fortune, according to this month’s edition of Forbes Russia.

DJ Rusal Planning To Expand Its Smelter Ops In Africa - FT

Trading Markets (press release), CA -Tuesday, April 29, 2008;

Apr 29, 2008 (Dow Jones Commodities News via Comtex) -- -- DOW JONES NEWSWIRES

Russian aluminum giant United Co. Rusal plans to expand into new parts of Africa after it revives a smelter in Nigeria, its first on the continent, the Financial Times reported on its Web site Tuesday.

Artem Volynets, Rusal's director of corporate strategy, said he was seeking sites for additional smelters and new places to mine bauxite, the material used to make aluminum.

"We believe that this is just the beginning of the potential future investments (in Africa)," Volynets told the FT. "We are very much looking forward to continuing our growth there."

Rusal took a 77.5% stake in Nigeria's Alscon smelter early last year, hoping to revive a plant that had been closed for eight years. The company said it is investing $300 million to update the gas-powered smelter in the Niger Delta, and it production in February. The company aims to restore its full capacity of 197,000 metric tons of aluminum per year by 2010, according to the FT report.

Rusal is also enlarging its mining and refining operations in Guinea, which has a third of the world's bauxite reserves. The Guinea projects combined with the smelter in Nigeria will allow the company to run a complete production cycle in west Africa, exporting finished aluminum by sea to the U.S. and other market.

Volynets also told the FT that Rusal was eyeing Libya as a potential site for its next African smelter, although he said he would also consider other countries on the continent with the oil, gas or hydro resources needed to fuel the energy-intensive smelting process.

Volynets also said he would welcome further cooperation with Chinese companies, which are themselves seeking African resources.

"We are keen for partnerships with China, with African countries and anybody else who can help develop opportunities in Africa," Volynets told the FT.

Newspaper Web site:

BHP Approves $1.9 Billion Worsley Alumina Expansion (Update2)

Bloomberg May 1, 2008

By Rebecca Keenan

BHP Billiton Ltd., the world's largest mining company, approved a $1.9 billion expansion of the Worsley alumina project in Western Australia, adding export capacity to meet demand from aluminum smelters.

``The expansion project will lift capacity of the Worsley refinery from 3.5 million tons per annum of alumina to 4.6 million tons,'' the Melbourne-based company said today in a statement. BHP said in April 2006 it planned to expand by 800,000 tons at the plant at a cost of $700 million.

BHP and takeover target Rio Tinto Group are adding production of alumina, a powder refined from bauxite ore that's processed into aluminum metal, to meet demand for the lightweight metal. The price of alumina for immediate delivery has risen 14 percent this year, according to Metal Bulletin.

``It is certainly a reasonable sized expansion and will increase Australian alumina exports significantly,'' said Kate Penney, an analyst at the Australian Bureau of Agricultural and Resource Economics.

Average alumina spot prices for the year will rise to $365 a ton this year, up from the average $341 last year, said Penney.

BHP rose as much as 28 cents, or 0.7 percent, to A$42.55 and was at A$42.50 at 12:36 p.m. Sydney time on the exchange.

``The decision to invest in further production capacity underlines our confidence in the future of the alumina market,'' BHP Aluminum President Jon Dudas said in the statement. Construction will start immediately and first production is expected in the first half of 2011, BHP said.

Mining, Refining Capacity

Worsley is a joint venture with BHP holding 86 percent, Japan Alumina Associates 10 percent and Sojitz Alumina 4 percent. The expansion will expand mining, add refinery capacity and upgrade the port, BHP said.

Alumina from Worsley is sold to customers and is also used at BHP's own aluminum smelters, BHP spokeswoman Samantha Evans said today. The aluminum unit accounted for 15 percent of BHP's sales in the year ended June 30, according to Bloomberg data.

BHP is also developing an alumina refinery in Guinea with Global Alumina Corp. and raised the cost estimate by 11 percent to $4.78 billion in March because of a weaker dollar and higher construction expenses.

The price of aluminum has risen 22 percent in London this year. Consumption of the metal, used to make beverage cans and aircraft, in China may rise 15 percent a year through to 2015, Rio's head of aluminum Dick Evans said yesterday. Rio may boost output at the Queensland Alumina Ltd. refinery by 26 percent, he said.

To contact the reporter on this story: Rebecca Keenan in Melbourne at

Rio keeps its defences up

Melbourne Herald Sun, Australia - May 01, 2008

Stephen McMahon

RIO Tinto is working to generate bigger synergies out of its $38 billion acquisition of Alcan as part of its defence against BHP Billiton's hostile takeover.

Rio Tinto Alcan chief executive Dick Evans yesterday said savings from the amalgamation of both companies' aluminium units will have risen from $640 million to $1.17 billion by the end of next year.

But this may not be enough to satisfy shareholders from being seduced by BHP Billiton's offer of 3.4 shares for every Rio share - valuing the deal at about $180 billion.

BHP shares yesterday closed at $42.27 - a 5 per cent premium to Rio's closing price of $136.08.

However, BHP has yet to lodge its application with European regulators for anti-trust clearance that will start the clock ticking.

Mr Evans said Alcan's former suitor and now major Rio shareholder Alcoa might be using its stake to allow it a second bite of the cherry if BHP was successful and decided to sell-off some of the assets.

"Could there be assets that are sold in whatever final outcome happens here? I think the answer here is, potentially," Mr Evans said.

"I think their idea of having a seat at the table, or at least near the table, would be at least they have some visibility of what's going on and therefore might be at an advantageous position whatever outcome happens."

But Mr Evans flatly rejected attempts to claim that Rio had overpaid for Alcan. He said that any claims by BHP that it was too high a price were undermined by BHP's late efforts to get involved in the bidding for Alcan.

Mr Evans said the massive spike in the price of aluminium meant any buyer would be paying substantially more now.

Aluminium is now trading at about $US1.34 a pound - 11 per cent above last year's average price.

Mr Evans forecast that aluminium production and prices will increase. Some analysts forecast the price may even push past $US2 a pound.

This comes after Rio last week angered BHP by questioning the relevance of its small but highly profitable oil division.

Rio is now taking the fight to BHP by pushing its credentials as the world's number one aluminium producer.

Rio ready to work with Chinese

Sydney Morning Herald, Australia - May 1, 2008

"We would be open to engaging [in] a joint venture opportunity [in Cape York]."

RIO TINTO has signalled its willingness to join forces with its biggest Chinese shareholder, Chinalco, to develop bauxite projects in Cape York.

The chief executive of Rio Tinto Alcan, Dick Evans, yesterday noted the $3 billion Aurukun bauxite project owned by Chalco - the listed aluminium subsidiary of Chinalco - was adjacent to the southern portion of Rio's Weipa tenements.

"There certainly is a possibility - and something we would be open to engaging with Chalco - of a joint venture opportunity there," he told the Herald.

Rio hopes to expand bauxite production at Weipa from 22 million tonnes a year to 35 million tonnes by 2013. Chalco has yet to develop a mine and refinery based on the Aurukun deposit, previously owned by Alcan.

Mr Evans said his division was in the process of establishing priorities within the enlarged portfolio of development projects created by the Rio-Alcan merger.

He said Alcan's Coega smelter project in South Africa, which has already been delayed due to power shortages in the country, could eventually be abandoned.

Rio's Abu Dhabi smelter plan also appeared unlikely to proceed in the near future because the United Arab Emirates was reassessing its industry strategy.

Mr Evans also flagged the possibility of smelter sales following a portfolio review. Alcan owns attractive, low-cost hydro-powered smelters in Canada, but it also has some higher cost smelters in Europe.

"We will also be reviewing our bauxite opportunities and our refining opportunities, but it is more likely there may be a divestiture on the smelting side."

Rio is attempting to sell Alcan's downstream packaging and engineered products divisions as part of $US15 billion ($16 billion) in planned asset sales to pay off debt.

Mr Evans said the packaging sales process was well advanced and a sale this year was "quite achievable", noting a data room providing detailed information for buyers had been prepared. Rio was still compiling a data room for the engineered products division.

Mr Evans said one advantage of the merger with a diversified miner like Rio was the greater access to project funding, even in times of softer aluminium prices.

"Historically, pure [aluminium producers] found it easy to invest when prices were high, but difficult when prices were low."

Mr Evans said the outlook for aluminium was strong and he found BHP Billiton's criticism of aluminium as a low-margin business "amusing" since less than a year ago, the Australian miner was "falling all over itself" to participate in Alcan's internal auction process.

Rio denies it has overvalued Alcan

The Age, Australia - May 1, 2008

Barry Fitzgerald

RIO TINTO has hit back at claims by takeover suitor BHP Billiton that the additional $US33 billion in value Rio now sees in last year's $US38 billion acquisition of Alcan smacks of voodoo economics.

According to Dick Evans, chief executive of Rio's enlarged aluminium unit, Rio Tinto Alcan (RTA), BHP's attacks on Rio for paying too much for Alcan have more to do with sour grapes flowing from confusion between former BHP Billiton CEO Chip Goodyear and his replacement, Marius Kloppers, during their changeover period.

The former Alcan CEO disclosed that BHP missed out on the bidding war for Alcan because it could not get its act together and sign a confidentiality agreement.

"I find some of the rhetoric perhaps a bit amusing because of my unique vantage point," Mr Evans told a Melbourne briefing yesterday. "I know that less than 12 months ago BHP was sort of falling all over themselves to get into the Alcan game at a time when the market cap was already $US35 billion.

"From our perspective, it seemed to have been a bit of confusion between the CEOs and maybe a lack of understanding of how fast things were moving . They were unable to get a confidentiality agreement signed."

Mr Evans said BHP wanted to dot the i's and cross the t's "too many times to get a confidentiality agreement to get in the game".

He said there had been a paradigm shift in the aluminium market since Rio acquired Alcan and that if he was selling Alcan today, the price would be more than $US38 billion.

But how much is open to question. "It's a hypothetical question, but based on the movement in the future price curves, less the movement on the cost side, we have given a range from zero to $US33 billion, depending on your assumptions on prices and growth rates," Mr Evans said.

BHP has gone to the other extreme, saying Rio would be lucky to sell Alcan for $US20 billion ($A21 billion), even if aluminium prices are up substantially because of power shortages affecting southern African production and increased cost pressures on China's high-cost industry.

Rio has to convince the market that BHP should pay up for the additional value it sees in the Alcan acquisition by increasing its spurned 3.4-for-1 scrip offer. The bid is yet to go live as BHP delays lodging its application for antitrust clearance in the key European market.

Mr Evans yesterday talked up the ability for RTA to extract more than the $US1.1 billion in after-tax synergies from the merged Rio and Alcan aluminium businesses. Rio had originally forecast $US600 million in savings.

"I am confident we will deliver on the $US1.1 billion (by the end of 2009) and longer term there is more than that," Mr Evans said.

Rio could go a long way to convincing the market on the value of the Alcan acquisition by selling Alcan's now non-core packaging business, part of the $US15 billion in asset sales it has promised to reduce debt.

Mr Evans expects a sale by the end of the year. He said several parties remained interested but that the pace of the sale had been slowed by the impact on private equity deals of the global liquidity crisis.

The reporter owns BHP Billiton shares.

Rio and Rusal clash over joint venture

The Age, Australia - May 1, 2008

Barry Fitzgerald

SIMMERING tension between Rio Tinto and Russian metals billionaire Oleg Deripaska over the multibillion-dollar expansion potential of their Queensland alumina joint venture at Gladstone in Queensland (QAL) has boiled over.

Bad blood between Rio and Mr Deripaska's Rusal was created last year when Rusal lobbied hard with antitrust regulators over Rio's $US38 billion acquisition of Canadian aluminium group Alcan.

According to the chief executive of Rio's Rio Tinto Alcan (RTA) unit and former Alcan chief, Dick Evans, Rusal lobbied "vigorously" against the Alcan deal in the hope it could win a divestment of Rio's 80% QAL stake, allowing Rusal to march to 100% and cement its position as the world's biggest alumina producer ahead of RTA.

But having failed in that quest, Rusal has been left to urge RTA to go for a 2 million tonnes a year expansion at QAL, while RTA, as the senior partner, is looking for a 1 million tonnes expansion, with a feasibility study into the smaller "de-bottlenecking" project expected to start inside 12 months.

"Their (Rusal's) challenge is that they have a lot of alumina," Mr Evans said. "That's the good news. The bad news is that it's almost all in the wrong location and it's almost all in the third and fourth-cost quartile.

"So they would just love to expand available capacity such as we have here."

Mr Evans said RTA would have to "look very hard" at going beyond a "de-bottlenecking" project at QAL because it might be better off having a third expansion of its Yarwun refinery, also in Queensland.

"And that might be different for Rusal because they might not have the same kind of options we have. In fact, they don't," he said. "So we would look at what is best for our shareholders, not what is best for their shareholders."

Rio on the road to spruik aluminium

The Age, Australia - Apr 29, 2008

RIO Tinto gets the chance today to lend some weight to its claim that it would rather be the world's No. 1 aluminium producer than the 60th-ranked oil producer like its hostile takeover suitor, BHP Billiton.

The dig at BHP's globally small but highly profitable oil division infuriated BHP chief Marius Kloppers. He responded last week by claiming Rio had missed the boat on both China and booming oil prices.

Rio nevertheless gets the chance to ram home its point in investor and media briefings on its aluminium division, now known as Rio Tinto Aluminium (RTA) after last year's $US38 billion acquisition of Alcan.

RTA's Montreal-based chief executive, Dick Evans, heads up the roadshow, which will take in Melbourne today, followed by Sydney. It will come as no surprise to BHP that Mr Evans will talk up the fact that key assumptions in the Alcan takeover — most notably the aluminium price and synergy benefits — are being exceeded.

Aluminium prices have improved sharply from the (calendar) 2007 average of $US1.20 a pound. It is now trading at about $US1.34 a pound, and forecasters including Barclays Capital and UBS say the metal could be on its way to $US2 a pound.

Rio will be hoping it does as a movement of US10¢ a pound from the 2007 average could boost its earnings by $US620 million. But exchange rate movements, such as the strong Canadian and Australian dollars, can take back much of that gain .

Mr Evans could also highlight the "clean and green" component of much of RTA's aluminium production thanks to its access to hydro-electric power in Canada, as well as pass comment on the situation in South Africa where BHP's aluminium unit is having to deal with mandatory power cuts to its smelters because of southern Africa's power crisis.

His arrival comes as BHP's share price continues to outperform Rio's because of strength in oil prices, fuelled by strikes affecting North Sea oil output and attacks on facilities in Nigeria. BHP's spurned 3.4-for-1 scrip now values Rio shares at $149.22 compared with Rio's market price of $141.20, a BHP share ratio of 3.2 shares.

Not too much is being read into the 5.6% premium implied by the BHP offer as the group has yet to lodge its application for anti-trust clearance with European regulators. When it does, the regulator can take 90 days to make a decision beyond a preliminary assessment period of 25 to 35 days. Even then, the regulator could extend its deliberation.

Meanwhile, Rio has had some success in its BHP-criticised development pipeline by securing a tax deal with Indonesia for the proposed $US2 billion development of an initial 45,000- tonnes-a-year mine in Sulawesi.

The president of Rio's Indonesian unit, Mike Jolley, said that agreement was based on a combination of fixed rates and prevailing regulations, without saying what they were. "This will provide sufficient certainty to the company to support a multibillion-dollar investment," he said.

To complete the "contract of work" covering the development Rio still needs to secure agreements from the regional and provincial governments.

Once that is achieved, the contract will be submitted to the Indonesian parliament for review.

Rio said it believed the Sulawesi deposit was one of the best undeveloped nickel resources in the world. The eventual aim is to increase annual production to 100,000 tonnes of nickel.

The reporter owns BHP shares.