AluNews - July 2009

PM: Smelter work won’t stop

Trinidad News - Wednesday, July 1 2009

By Richardson Dhalai

Two weeks after a High Court ruling stopped site works for the construction of the Alutrint aluminium smelter plant, Prime Minister Patrick Manning yesterday vowed the plant will be built unless the court rejects the entire project.

Manning said there was a high cost to work stoppage on the project which would proceed pending a review of an application for a certificate of environmental clearance (CEC) by the Environmental Management Authority (EMA).

"The cost of stopping work on that project, it is a very high so what we have decided to do is to continue until such time there is a rejection of the project and that has not happened," Manning said, adding, "it is unlikely that will happen."

On June 16, Justice Mira Dean-Armorer ruled the EMA acted in an "outrageous", "irrational", "procedurally irregular" and illegal manner when it granted a CEC for work to start on the construction of the smelter plant at La Brea.

The judge found the EMA failed to consider a crucial report on the cumulative impact of the smelter plant and a now under-construction power plant, as well as a planned port facility, and this tainted the process to approve plans for the project.

The judge was invited to stay her ruling to allow lawyers for Alutrint and the State to file an appeal but she declined. Her decision ought to have stopped all work on the project, but activity still continues at the site, according to environmentalists.

However, Manning told reporters in San Fernando yesterday that the court had objected to the process under which the CEC was granted and not to the smelter plant itself.

"The courts did not object to the smelter, the courts just said the process needed to be beefed up in a certain area and that’s what we are seeking to do now," he said.

Manning added the EMA "is moving as fast as possible to ensure that if a CEC is granted in the future, it is in accordance with all the procedure and to obtain the satisfaction of the court."

Asked to disclose the sums already invested on construction activities at the smelter and power plant sites, Manning said, "Plenty money.. It costs hundreds of millions."

Should the appeal process reach to the Privy Council, Manning admitted the London- based court may rule in favour of environmental preservation as opposed to sustainable development.

"(The UK) is a developed society with standards which are very relevant to them but not relevant to us. They (the Privy Council) took the point of view there would be no hanging....they are going to take a pure position on environmental preservation as opposed to sustainable development," he stated.

He made these points as he commented on the need for the Caribbean Court of Justice, which is based in Port-of-Spain, to become the country’s final appellate court.

Hindalco closes Novelis plant in UK, to recast capex plan

Business Standard - July 2, 2009

Nevin John & Abhineet Kumar / Mumbai

Aditya Birla group flagship firm Hindalco Industries has decided to trim its overseas operations and is restructuring its capital expenditure in India in an effort to stabilise operations.

As part of this overall plan, Novelis, which Hindalco acquired for $6 billion in 2007, is closing its sheet mill at Rogerstone in the UK, involving 440 job losses.

Sunirmal Talukdar, Hindalco's chief financial officer, confirmed the closure, saying the decision was forced by falling demand.

Other company sources said two Novelis mills in Canada were also facing closure.

Earlier this year, slumping copper prices and demand forced Aditya Birla Minerals, another Hindalco subsidiary, to close its Mount Gordon copper mine at Queensland in Australia.

Company sources said the factory at Mount Gordon would continue to process stockpiles of ore and was likely to produce 1,800 tonne of copper concentrate per month for about 12 months.

Novelis’ net loss widened to $1.91 billion in 2008-09 from $117 million in 2007-08, primarily on account of $1.5 billion impairment charges and unrealised mark-to-market losses of $519 million. The company's net sales dropped 9.5 per cent to $10.18 billion in the same period.

Mumbai-based analysts said Novelis' near-term profits were also under pressure from cyclical weaknesses in North America and Europe, which accounted for 70 per cent of its sales.

Can-sheets and foils and packaging, which together account for 60 per cent of Novelis’s business, are also in the shadow of a downturn, especially after customers like Ball and Rexam closed their units.

Meanwhile, Hindalco is expecting to recast it capital expenditure of Rs 25,000 – 30,000 crore over the next four years. "Since capital goods prices have come down, the company is expecting a savings of 15 to 16 per cent on its capex. But it is not reducing the capex, instead it is planning additional capacity with the same capex," said Hindalco Managing Director Debu Bhattacharya.

The company, which plans to raise Rs 2,400 crore through a qualified institutional placement (QIP), has tied up for funds for its prestigious Rs 5,300-crore Utkal Alumina project. Bauxite mining for the Utkal project, however, has been delayed six months for want of funds.

Jharkhand Aluminium, another greenfield project, has also been delayed a year owing to financing issues.

Hindalco is now looking for a joint debt raising programme for its greenfield projects, said company officials.

Talukdar said the cash and cash equivalents of Rs 5,000 crore on the books would help the company to execute projects on time.

Analysts, however, feel that Hindalco and Novelis would be stretching the balance sheet if they draw up further fund-raising plans. The group already has a consolidated debt of $5.2 billion (about Rs 25,000 crore), of which Novelis alone accounts for $2.4 billion (about Rs 11,500 crore).

Hindalco alone has Rs 13,000 crore of debt, of which about Rs 4,800 crore is due in four years and Rs 5,000 crore is being paid in installments till 2013-14. The remainng debt is for working capital.

Hindalco shares were down 3.53 per cent at Rs 83.40 on Wednesday, when the Sensex gained over 1 per cent.

Rio Tinto Group has found a buyer

The Gazette (Montreal) - July 6, 2009

Global mining giant Rio Tinto Group has at last found a buyer for part of the packaging assets that it inherited when it took over Canada's Alcan Inc. aluminum business in 2007-08 for $38 billion U.S.
Bemis Co. of Wisconsin is picking up 23 former Alcan flexible food packaging plants in the U.S., Canada, Mexico, Brazil, Argentina and New Zealand for $1 billion U.S. in cash and $200 million U.S. in Bemis shares. Bemis, a multinational packaging group, will add 4,600 employees
Rio said the price was the best available in the present state of the world economy and hinted the remaining parts of the Alcan Packaging unit may be sold soon.
Rio, caught with a heavy debt burden when aluminum and other commodities collapsed late last year, completed a $15.2 billion U.S. rights issue last week that left China's second biggest aluminum producer with a 9 per cent equity stake, down from 19 per cent earlier. Rio offered new shares to existing shareholders.
The Bemis deal brings Rio's total divestments, including international coal, iron ore and potash assets, to $3.7 billion U.S. so far this year The remaining packaging assets, including the European food, tobacco, drug and beauty products. could raise a further $2 billion U.S.. Australia's Amcor is a potential buyer.
The plants Bemis is buying had revenue of $1.5 billion U.S. last year or 23 per cent of the Alcan Packaging's total. That will bring Bemis's annual revenue to well over $5.2 billion U.S..
© Copyright (c) The Montreal Gazette

Chinalco Blocked in Alumina Project in Vietnam

Trading Markets (press release) - Mon. July 06, 2009

VIETNAM, Jul 06, 2009 (SinoCast Daily Business Beat via COMTEX) -- ACH | Quote | Chart | News | PowerRating -- The blocked investment in aluminum mines in Tay Nguyen, central Vietnam by the Aluminum Corporation of China (Chinalco) stirs wide concerns of the ambitious Chinese tycoons.
Vietnam has rich bauxite resource and the total reserve is estimated to be 8 billion tons, ranking the world's third largest. Impressively, over 5.5 billion tons are reserved in Tay Nguyen. As Vietnam is lack of technologies, the bauxite mining and processing in Vietnam is relied on foreign countries.
Tay Nguyen is an absolute mountain area with poor transportation and to develop the bauxite resource there will need investment as huge as over USD 10 billion. An arm of Chinalco won a contract to build an alumina plant in Vietnam, involving total investment of USD 460 million, and kicked off the construction in July 2008.
However, a group of Vietnamese scientists and some retired generals fiercely opposed this project. On the contrary, a similar project invested by US-based Alcoa Co. got almost no complaints from the Vietnamese.
Source: (July 06, 2009)

Mena Aluminium 2009: The region's rise as a global producer

AME Info - Jul 5, 2009

The Middle East is emerging as a significant region for primary aluminium production.
United Arab Emirates: Monday, July 06 - 2009 at 09:17
In 2008 it produced 2.6 million tonnes of primary aluminium, accounting for around 6.5% of world market share according to the new MEED Insight report Mena Aluminium 2009.
MEED Insight estimates that by 2010, assuming all planned projects are completed on time, aluminium production capacity in the Middle East and North Africa (Mena) region will be 4.3 million tonnes a year (t/y).
This figure rises to 10.8 million t/y provided all the expansion projects at existing smelters and greenfield projects planned beyond 2010 proceed. This will mean that the Mena region will have about 19% of world capacity by 2013-14.
GCC producers will continue to account for a major part of the Mena region's aluminium production. Of the 6.5 million tonnes of potential aluminium capacity planned beyond 2010, 4.4 million tonnes will be built in the GCC. In the longer term, MEED Insight estimates that by 2020 the GCC alone will produce some 10 million t/y of aluminium, accounting for 20% of global market share.
The region's downstream aluminium industry is under developed. The Middle East consumes only 16% of the domestically produced primary aluminium while exporting the remaining 84%.
The extrusion industry - manufacturing aluminium products from its primary form - accounts for almost 70% of the aluminium demand in the Middle East, of which 90% is allocated to the construction market.
Due to low demand for finished aluminium products, there is a limited number of rolling and casting producers in the region. More rolling and casting factories will need to be built for the aluminium industry to benefit from a sophisticated downstream market.
Although the Middle East is currently attracting investments in new aluminium plants due to its energy feedstock advantage, securing affordable long-term power and bauxite supplies are two issues that need to be addressed for the region to ensure success in the industry.
Competition for bauxite supplies is mainly expected to come from China, while securing sufficient gas to feed aluminium plants' power stations is becoming more difficult given the direct competition for gas from the Middle East's hydrocarbons, petrochemicals and utilities industries.
Globally, aluminium consumption growth averaged 6.1% between 2000 and 2007. However, with the world economy entering a deep recession, there is uncertainty as to the short-to-medium-term growth path for aluminium demand. Large supply curtailments have been announced by producers across the world, in an effort to revive both prices and demand for aluminium.
The slowdown in the global economy has led to a dramatic drop in aluminium prices. The determining factor in a price recovery will be how fast the consumer market can absorb the accumulated aluminium inventories once global demand returns.
This is particularly important for the Middle East region, as it exports the majority of its primary aluminium production to international markets.

DJ INTERVIEW: Russia's RusHydro eyes aluminum production -CEO

PRIME-TASS (subscription) - Jul 7, 2009

Interview with Vasily Zubakin, CEO of RusHydro

LONDON, Jul 7 (Dow Jones) -- Russian state-controlled hydro power monopoly RusHydro sees entering aluminum production by constructing new smelters in Russia as its strategy for the future, Chief Executive Vasily Zubakin told Dow Jones Newswires Monday.

"Our strategic target is to export electricity in the form of aluminum," he said. The price of energy is the main contributor to the cost of producing aluminum.

"The market for aluminum will definitely come back (to its pre-crisis state) in some years," he added.

Zubakin said that RusHydro, which owns 25,000 megawatts of hydroelectric capacity, wants to build new smelters, not take over the existing ones in Russia, which are owned by aluminum giant United Company Rusal.

RusHydro and debt-laden Rusal are equal partners in construction of the 3,000MW hydro power plant in Siberia, which will feed the Boguchansk aluminum smelter, also jointly built by Rusal and RusHydro.

After several months of tug of war between the partners, Rusal has paid its share of the investment, Zubakin said.

While production of aluminum remains a long-term strategic task, in the near future the world's largest publicly traded generator of renewable energy is planning to increase its presence in Asia, Zubakin said.

Zubakin said that RusHydro is looking to India, Nepal and Bhutan with an eye to buying assets, but mostly it wants to establish joint ventures with the local companies there.

In the former Soviet Union, the company is most interested in renewable-energy projects in Central Asia, notably in Kyrgyzstan, he said.

In Russia itself, Zubakin said he sees energy demand stabilizing after a steep drop. "Last autumn and the winter were very bad. We saw a sharp decline in electricity demand, as the plants curbed their production, but in spring there was some increase in demand, which has stabilized since then," he said.

Demand for electricity in a crisis-stricken Russia is currently averaging about 6% from levels seen in 2008, but in some heavily industrialized regions the figure is twice as high.

Zubakin said devaluation of the Russian ruble by about a third during the winter has helped the economy, notably the country's metals and mining companies.

For RusHydro, the devaluation brought the possibility of electricity export to neighboring China, he said. Before the devaluation, the price of electricity in Russia's eastern edge was higher than in neighboring China. However, because Chinese customers pay dollars for exported electricity, while RusHydro's production costs are fixed in rubles, devaluation of the ruble made export profitable.

Zubakin added that although a further devaluation of the ruble would ease pressure on domestic companies, he doesn't expect the Russian government to follow that path.

The Russian state owns a 61. 93% stake in RusHydro, whose global depositary receipts were listed in London Monday. Zubakin said that he sees nothing wrong in reducing this stake to 51% in order to attract more investors, but added that such a decision is to be taken by the state.

NALCO eyes 20% growth in aluminium output

Hindu Business Line - Jul 7, 2009

New Delhi, July 7 (PTI) State-run NALCO is targeting a 20 per cent increase in its aluminium production to 4.35 lakh tonnes for the current fiscal over the year-ago period. The company produced 3.61 lakh tonnes of the metal in the last fiscal. In terms of the agreement signed by NALCO with the ministry of mines in March, 2009, it will produce 4.35 lakh tonnes of aluminium in the current fiscal, as against 3.61 lakh tonnes in the previous financial year, Mines Minister Mr B K Handique informed Lok Sab ha.

The PSU is looking to produce 1.8 million tonnes of alumina in the current fiscal as against 1.5 million tonnes produced in the previous fiscal, he said. Moreover, the company also targets an 18 per cent growth in bauxite production to 5.5 million tonne s for the current fiscal. The bauxite out put in the last fiscal stood at 4.7 million tonnes. In addition to the mineral, NALCO aims to generate 6,510 million units in the current fiscal as compared to 5,541 million units in FY'09.

Alcoa reduces losses by cutting personnel, overall expenses

Pittsburgh Tribune-Review - Friday, July 10, 2009

Rick Stouffer

Alcoa Inc. sharply reduced its second-quarter losses by cutting personnel, its dividend and overall expenses in response to a rapid slowdown in aluminum demand, analysts said Thursday.

Alcoa executives, after disclosing the aluminum giant's third straight quarterly loss, told analysts that the cost-cutting efforts, coupled with price drops for raw materials, will serve the company well moving forward.

"Our cash generation initiatives, productivity improvements and portfolio changes are working. Now Alcoa has the staying power and reduced cost base to withstand the most serious downturn in the history of the aluminum industry," said CEO Klaus Kleinfeld.

On Wednesday, Alcoa reported a loss in the April-June quarter of $454 million, or 47 cents a share, compared to net income of $546 million, or 66 cents a share in the same period a year ago.

The company reported losses of $497 million in the January-March quarter and $1.2 billion in the final three months of 2008. This is the first time in 17 years Alcoa reported three straight quarterly losses.

The company lost 32 cents a share from continuing operations. Analysts in a Bloomberg survey expected 38 cents a share loss.

"The big thing for Alcoa is they've done a good job on costs," said Charles Bradford, an analyst with Affiliated Research Group LLC, New York.

Dahlman Rose & Co. analyst Anthony B. Rizzuto Jr., in a research note, said the company has cut more than 21,000 jobs worldwide, with 75 percent of the reductions permanent.

In April, Alcoa said it agreed to sell its automotive electrical systems unit to Platinum Equity, a Los Angeles private-equity firm, for an undisclosed price. It cut its quarterly dividend to 3 cents a share from 17 cents a share, saving $400 million annually.

"The lower-cost raw material environment positively impacted results," Rizzuto said. "The company benefited from lower prices for raw materials such as coke and pitch. Given the slack demand for these materials, we anticipate that the company should be able to maintain these cost savings over the near-term and may see an additional benefit as some higher cost contracts expire."

Bradford said Alcoa's cost-cutting and lower prices for raw materials take time to filter down to the company's income statement.

"Alcoa's a big caustic soda user and there's been a large drop in the price of caustic soda, so that will help them going forward," Bradford said. "They've done a great deal, but the question is, can they do more?"

Kleinfeld, speaking Wednesday with analysts, said that Alcoa was well-positioned to grow as the broader economy recovers and that some end markets — such as the beverage can and auto markets — showed signs of stabilizing. But the company expects further weakness in the aerospace industry, with a 6 percent decline in deliveries of large aircraft.

Recent demand from China, the world's biggest producer and consumer of the lightweight metal, will be short-lived as the country gradually becomes self-sustaining, Kleinfeld said.

"The price of aluminum in China is 20 cents a pound more than in the West, around 70 cents a pounds compared to 90 cents a pound, with a lot of aluminum capacity being reopened in China to take advantage of the higher price," said Bradford. "I don't think reopening capacity is a very good idea."

Last summer, aluminum was selling for a record $1.50 a pound, he said.

Alcoa is maintaining a forecast for an industrywide demand contraction of 7 percent this year, Kleinfeld said

Alcoa: Brazil Bauxite Mine Being Commissioned, Shipments Soon - July 09, 2009


LONDON -(Dow Jones)- U.S. aluminum producer Alcoa Inc. (AA) said late Wednesday its Juruti bauxite mine in Brazil is in the process of being commissioned, with the first shipment expected within the next 90 days, the company noted.

Juruti, located in the heart of the Amazon in the west of the state of Para, is expected to initially produce 2.6 million metric tons of bauxite annually, and will supply the needs of Alcoa's joint venture at the Alumar alumina refinery in Sao Luis, Maranhao state.

Alumar has already begun to produce its first alumina and is on target for ramp-up to full production during the second half of the year.

Alcoa has a 54% stake in Alumar through its Alcoa World Alumina and Chemicals joint venture with Alumina Ltd. (AWC.AU), in which Alcoa holds a 60% interest.

BHP Billiton PLC (BHP) meanwhile has a 36% interest in Alumar and Rio Tinto Alcan, a subsidiary of Rio Tinto PLC (RTP), has the remaining 10% stake.

Around four tons of bauxite makes two tons of alumina, which is then smelted to make around one ton of aluminum metal.

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


Jamalco reports record production figures

Published on Thursday, July 9, 2009 Email To Friend Print Version

MANDEVILLE, Jamaica (JIS) -- The Jamalco bauxite plant is reporting record production figures for the first six months of the year, with output at 3, 944 metric tonnes of alumina per day, exceeding the projected daily target of 3,650 metric tonnes.

The company was also able to meet 100 per cent of its specifications for the period, and only "fell" to 99 per cent on one occasion, said Managing Director, Jerome Maxwell, at a meeting held recently to update business leaders on the company’s performance for the first half of 2009.

He lauded the company’s workforce, noting that the excellent performance was due to their hard work.

The achievements, Maxwell said, were significant, even with the continued low demand for the product globally and record alumina inventories of more than four million metric tonnes, representing some four months’ supply on the London Metal Exchange.

He added that as a result of the low demand for alumina worldwide, production has been curtailed at all Alcoa refineries in North and Latin America and the Caribbean, except for Jamalco and Alumar in Brazil. He said that Jamalco has moved from ninth to fourth among Alcoa refineries.

Maxwell told the business leaders at the meeting, that while there had been some increase in the price of alumina, the industry "will take time to recover".

He said that in accounting terms, Jamalco was "breaking even" and was managing operations on a "cash basis" in order to cover the cost of its operations.

Refinery Manager, Silvio Porto, said that much of the company’s success could be credited to the competence of the workforce and contractors. "We are in the game to win, not lose and when the going gets tough, the competence of the team is important," he stated.

He explained that Jamalco had implemented the seven principles of the Alcoa Business System (ABS) and was on a drive to achieve continuous improvement that would consistently deliver results.

The ABS is modelled after a similar system used by Toyota Motor Corporation, which involves the company’s leaders, at various levels, going to different departments each week to view work processes, coach staff and offer advice.

Capital Expenditure Manager at Jamalco, Richard Hall, in the meantime, informed that the company was curtailing its capital project programme, noting that only those projects that are absolutely necessary for continued production will be pursued.

Other company speakers at the meeting included Manager, Corporate Services and Government Affairs, Leo Lambert, who gave an update on the company’s community framework, while Lands Superintendent, Evon Williams, gave an overview of Jamalco’s land acquisition and resettlement programme.

Venezuela aluminum output normal despite strike

Reuters - Mon Jul 13, 2009

CARACAS, Jul 13 (Reuters) - Venezuela's state aluminum smelters operated normally on Monday despite the start of a strike by workers demanding the government address industry problems they blame on outmoded equipment and insufficient investment.

Spokesmen for the Alcasa and Venalum smelters said some workers had stayed away, but there was enough staff to maintain production.

Venezuela's government promised months ago to launch a plan to revive the aluminum industry, but has not yet done so. Industry officials has estimated it will take more than $1 billion to pay debt and invest in adequate new technology.

Venalum is 80 percent owned by the state Corporación Venezolana de Guayana (CVG), and the other 20 percent is owned by Japan's Showa Denko KK (4004.T), Kobe Steel Ltd (5406.T). , Sumitomo Chemical Co Ltd (4005.T), Mitsubishi Materials Corp. (5711.T), Mitsubishi Aluminum and Marubeni Corp (8002.T).

Venezuela said last month it was interested in buying the Japanese firms' minority stake. The Japanese companies had expressed interest in selling after a dispute with the government over prices and shipments.

Aluminum Co of America (AA.N) and Alcan have small stakes in the Venezuelan firms Alcasa and Bauxilum.

(Reporting by Fabian Andres Cambero, writing by Patricia Zengerle; Editing by David Gregorio)

© Thomson Reuters 2009 All rights reserved

Aluminum Workers Protest in Venezuela

Latin American Herald Tribune - Mon Jul 13, 2009

CARACAS – Workers in Venezuela’s state-owned aluminum industry took to the streets of Ciudad Guayana on Monday to demand that their contracts be fulfilled and that the government devises a rescue plan for the firms they work for, media outlets said.

The workers belong to the Bauxilum, Carbonorca Venalum and Alcasa companies, the rescue of which was announced by President Hugo Chávez more than four months ago but the details of which have not emerged.

Leaders of the demonstrators told the press that their incomes and labor rights are up in the air and that the government is showing itself to be passive amid the collapse of the sector.

The Caracas press on Monday collected statements from the heads of the firms in which they said that the extent of their deterioration is such that they could shut down within a few weeks if the government does not intervene.

They said, for example, that for the first time in 30 years, on July 9 Bauxilum could not produce a single gram of aluminum oxide because of damage to its installations.

Bauxilum is at the beginning of the aluminum production chain and so its inactivity could paralyze Venalum and Alcasa, which produce primary aluminum from aluminum oxide.

The crisis, which is reflected in the finances of the firms and in the deterioration of their equipment, began several years ago and was acknowledged by Basic Industries and Mining Minister Rodolfo Sanz, who also heads the Corporacion Venezolana de Guayana, to which the state alunimum sector belongs.

Sanz said that although the international price per ton of aluminum stands at around $1,200, Venezuela’s cost of production is about $3,500 per ton.

He also admitted that to recover efficiency at the sector’s firms millions of dollars in investment would be needed along with revising the collective bargaining agreement with workers. EFE

Nalco Shuts Two Power Units on Coal Shortage, Fin. Express Says

Bloomberg - July 14 2009

By Dave McCombs

National Aluminium Co. has shut two units of its captive power plant because of a coal shortage and may be forced to curtail output of the metal, the Financial Express reported, citing a company spokesman it didn’t identify.

Nalco is operating 835 of the 840 pots at its smelter in Angul in eastern Orissa state, allowing it to maintain production levels, while increasing the risk of a reduction, the report said.

Noranda settles New Madrid claimNashville Business Journal - Wednesday, July 15, 2009

Noranda Aluminum Holding Corporation announced it has settled a $23.6 million insurance claim with three of its insurers tied to a winter power outage at its New Madrid, Mo., smelter.

The outage at then end of January occurred when a major winter storm struck Southwestern Missouri. The outage affected Noranda’s production capacity at the New Madrid plant by an estimated 75 percent.

Combined with the company’s earlier $43.8 million settlement with Factory Mutual Insurance Company, provider of 65 percent of its coverage, the release brings the total claim settlement to $67.5 million.

The release is the final settlement of the company’s claim tied to the outage, Noranda says.

Franklin, Tenn.-based Noranda is a private company that makes aluminum products and rolled aluminum coils. Noranda is owned by affiliates of Apollo Management LP.

Venezuela aluminum firms struggle with debt

eTaiwan News - Associated Press 2009-07-17

Venezuela's state-run aluminum companies are struggling with a multimillion dollar debt because production costs more than double incoming revenue.

Mining Minister Rodolfo Sanz calls the situation faced by the four state firms _ Bauxilum, Venalum, Carbonorca and Alcasa _ "difficult" and "complex."

Sanz says the companies are struggling with a $99 million debt, but the government of President Hugo Chavez plans to settle its debts with workers.

Employees of the four companies have been staging protests this week to demand back pay and benefits.

Sanz said Thursday it costs the companies about $3,700 to produce a metric ton of aluminum, but the metal sells for roughly $1,600 on the international market.

Slowdown signs - Carbonorca June carbon anode output down by 24pct YoY

SteelGuru - Friday, 17 Jul 2009

Platts reported that Venezuela's CVG Carbonorca carbon anode output totaled 7,643 tonnes in June 2009, down by 24% YoY on output of 10,048 tonnes in June 2008. June production was also down by 14.2% MoM on output of 8,910 tonnes in May 2009.

A Carbonorca official said that its production had not been affected yet by widespread protests by CVG workers in the streets of Puerto Ordaz. She added that "We have our contingency plan in effect, so everything is normal except that union officials are barring entry to buildings for both plant workers and administrative personnel."

Carbonorca's carbon anode sales totaled 8,832 tonnes in June 2009, down by 19.4% YoY on sales of 10,960 tonnes in June 2008. June sales were also down by 21.2% MoM on sales of 11,212 tonnes in May 2009.

All June carbon anode sales were to CVG Alcasa primary aluminum smelter. Carbonorca has carbon anode installed capacity of 140,000 tonnes per year and forms part of the CVG's 640,000 tonnes per year primary aluminum complex in Puerto Ordaz, Bolivar state.

(Sourced from

Kaiser Aluminum Announces Quarterly Dividend Payment

FOXBusiness - Thursday, July 16, 2009

FOOTHILL RANCH, Calif., Jul 16, 2009 (GlobeNewswire via COMTEX) ----Kaiser Aluminum Corporation (Nasdaq:KALU) today announced that its Board of Directors has declared a quarterly cash dividend payment of $0.24 per share on the Company's outstanding common stock. The dividend will be payable on August 17, 2009 to shareholders of record at the close of business on July 27, 2009.

Kaiser Aluminum, headquartered in Foothill Ranch, Calif., is a leading producer of fabricated aluminum products, serving customers worldwide with highly-engineered solutions for aerospace and high-strength, general engineering, and custom automotive and industrial applications. The Company's North American facilities produce value-added sheet, plate, extrusions, forgings, rod, bar and tube products, adhering to traditions of quality, innovation and service that have been key components of our culture since the Company was founded in 1946. The Company's stock is included in the Russell 2000(r) index. For more information, please visit

The Kaiser Aluminum Corporation logo is available at

Certain statements in this release relate to future events and expectations and, as a result, constitute forward-looking statements involving known and unknown risks and uncertainties that may cause actual results, performance or achievements of the company to be different from those expressed or implied in the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include: (a) the effectiveness of management's strategies and decisions; (b) adverse changes in the markets served by the company; (c) the company's inability to achieve the level of cash generation, margin improvements, cost savings, or earnings or revenue growth anticipated by management; (d) the impact of the company's future earnings, financial condition, capital requirements and other factors on its ability to pay future dividends and any decision by the company's board of directors in that regard; and (e) the other risk factors summarized in the company's Form 10-K for the year ended December 31, 2008 and other reports filed with the Securities and Exchange Commission.

This news release was distributed by GlobeNewswire,

SOURCE: Kaiser Aluminum Corporation

Century Aluminum completes power contract

WFIE-TV - Jul 16, 2009

HAWESVILLE, KY (WFIE) - Century Aluminum has completed a new, long-term power contract for its Hawesville, Kentucky's smelter.

The smelter received its electrical power from Kenergy Corp (part of the Big Rivers system) in an agreement that was about to expire.

The companies have been working for 5 years to work out an agreement that would meet the needs of both the Hawesville smelter and Rio Tinto Alan's Sebree smelter.

An agreement has now been reached that would meet the needs of both smelters through 2023.

The Hawesville smelter's plant manager, Matt Powell, says the new agreement is "essential to the future of the smelter and the economic well-being of our local communities."

One of the smelter's potlines was curtailed in March, resulting in the loss of 20 jobs.

Aluminum extruders are reorganizing the supply base - 7/16/2009

By Tom Stundza

With purchasing of aluminum extrusions at 556 million lbs down 38% in the first quarter from the January-March period of 2008, producers are reducing output, reorganizing operations and, in at least one case, liquidating.

Major suppliers Kaiser Aluminum and Norsk Hydro are reducing output to match weak demand from auto parts and general products fabricators and construction materials firms. Signature Aluminum US in Greenville, Pa., has shut down and is being liquidated by owner firm H.I.G. Capital while Indalex has been pushed into bankruptcy reorganization by owner Sun Capital Partners and may be bought by the Sapa Group.

Further cutbacks in extrusion production are expected this summer—at Bellwood, Va., by Kaiser Aluminum and at Adrian, Mich., by Norsk Hydro—now that General Motors plans to idle 13 of its assembly plants in the U.S. and Mexico for weeks this summer, and Chrysler has suspended production indefinitely at its North American plants after filing for Chapter 11 bankruptcy protection.

"The aluminum extrusion industry actually is in its third year of recession," insists John D. Gottwald, CEO of extruder Tredegar Corp. in Richmond, Va, "We continue to look for signs of a bottom," he says. But it hasn't happened yet. Tredegar's sales from ongoing U.S. operations in aluminum extrusions were $45.1 million in the first quarter, down 50.5% from $91.1 million in the first quarter of 2008.

BPA proposal looks like it will keep Ferndale-area Intalco smelter going

Bellingham Herald - 17-Jul-2009


The path to continued operation of Alcoa Intalco Works and its 500 jobs appeared almost clear Friday, July 17, after the Bonneville Power Administration announced the framework for a long-awaited power supply deal with the big aluminum smelter.

"We believe this framework gives us the opportunity to survive," said plant manager Mike Rousseau.

While many complex details of the power contract remain to be worked out, the power supply proposal contains three key features Alcoa had asked for:

THE BELLINGHAM HERALD Timeline of Ferndale-area smelter

A power supply that would be all but guaranteed for at least seven years.

An industrial power price set at the same level as that paid by other Northwest industries that get their power from public utility districts or municipal power systems.

Enough power to operate the plant at or near two-thirds of full capacity.

The tentative deal also commits the company to provide 528 full-time jobs, including both Alcoa employees and those employed by contractors operating at the plant west of Ferndale. That is roughly equivalent to the current number, Rousseau said.

The terms of the proposed power deal are intricate, and things could still come unraveled. All the terms must be approved by Sept. 30, when Intalco's current power contract is set to expire.

Another potential crisis could come at the end of March 2010. At that point, BPA proposes to take a look at power price and supply in the region to determine if it will be financially feasible to provide power over the final five years of the seven-year agreement.

Rousseau said Alcoa is willing to keep the plant operating with that degree of power supply uncertainty, because the company's own assessment is that the economics of power will be favorable enough next spring to get the final five years of power supply into place.

As aluminum prices plummeted due to a global economic slump, Alcoa reported huge losses on its global operations and closed or curtailed aluminum production in many places, cutting production by 20 percent.

Earlier this year, Rousseau and other company officials had said it would be difficult to continue to operate the Intalco smelter at a loss without a guarantee that BPA power would still be available when the economy improves.

Rousseau said the proposed deal framework appears likely to provide the guarantee the company needs.

"We want to run this facility," he said.

BPA is the federal agency that markets the low-cost power produced by federal dams on the Columbia River system. Decades ago, when that cheap power was plentiful, aluminum smelters sprang up across the region, because they need vast amounts of power to produce the lightweight metal.

Today, BPA no longer has enough cheap power available to meet regional demand. As a result, most of the region's aluminum smelters shut down years ago.

In recent years, officials from public power systems around the Northwest have argued that Alcoa Intalco Works should be pushed off the BPA power system too, to make more cheap power available for their customers, and they have tried to get federal courts to order BPA to do just that. But their legal efforts have not been successful so far, and BPA officials have not accepted their arguments either.

An aluminum smelter's appetite for power is enormous. At two-thirds capacity, Intalco uses 320 megawatts of power. That's enough power to light up 320 million 100-watt bulbs, and is roughly equivalent to about one-fourth of the power consumption of the city of Seattle.

Few other industries use anything near that much. The now-departed Georgia-Pacific Corp. pulp and paper mill on Bellingham Bay used about 40 megawatts.

Alcoa is the world's biggest aluminum producer. According to information on the company Web site, Alcoa owns all or part of 10 U.S. smelters. Five of those have been shut down "temporarily," while three more, including Intalco, are operating at reduced capacity.

Alcoa has 15 smelters outside the U.S., including in Australia, Brazil, Canada, Iceland, Italy, Norway and Spain.

Reach JOHN STARK at or call 715-2274.

Venezuela Pledges to Settle Debts to Aluminum Workers

Latin American Herald Tribune - 17-Jul-2009

CARACAS – The Venezuelan government on Thursday urged patience from workers in the state-owned aluminum industry who have been protesting over past-due wages and benefits, announcing that the debts will be settled beginning July 31.

Basic Industries and Mining Minister Rodolfo Sanz said four aluminum smelters based in the southern region of Guayana are running a "chronic deficit" that has forced the government to step in and keep them afloat.

Sanz announced that the government has approved an additional 213.22 million bolivars ($99.17 million) to help pay the sums that Bauxilum, Carbonorca, Venalum and Alcasa promised to pay in collective bargaining agreements.

Those payments will be made in three installments, the first on July 31, the second on Sept. 15 and the third on Oct. 31, Sanz told a press conference at the headquarters of the holding company for Venezuela’s state-owned aluminum firms.

The minister said the government has never disregarded labor demands nor refused to settle contractual debts with the close to 10,000 workers on those four companies’ payrolls.

"We need the workers to be patient. The companies are not generating what they need to meet their contractual obligations," Sanz said, adding that the collective bargaining agreements will be honored as soon as possible.

He said the sector’s "structural problems" "have been aggravated by an increase in the cost of production," which he estimated at $3,700 per ton, compared with a sale price for the product of "less than $1,600 per ton."

Sanz said President Hugo Chavez’s government is committed to bailing out the aluminum smelters, as evidenced by its $190.69 million cash injection in April and now another $99.17 million to avoid the plants’ total collapse.

Union officials say the government has not acted forcefully enough amid the crisis in that industrial sector, which they say could collapse entirely without state action.

Ormet’s rates tied to aluminum

Marietta Times - July 18, 2009

By Evan Bevins,

The Public Utilities Commission of Ohio this week approved an arrangement under which Ormet's electrical rates will be based on the price of aluminum, with other AEP Ohio power customers making up the difference for any discounts.

But the PUCO set limits on how much of a discount the company can receive and how much money AEP Ohio can recover in a year. The commission also upped the premium Ormet would pay if the price of aluminum rose higher than was needed for the company's Monroe County facility to make ends meet.

According to a release from the PUCO, if AEP Ohio attempted to recover the maximum amount allowed under the deal, it would add less than $2 a month to the average customer's bill in 2010 and 2011. If the discount Ormet receives totals more than the amount AEP is allowed to recover, the power company can recover that at the end of the arrangement, which runs through 2018.

Ormet filed a request for the special arrangement in February, describing the deal as "essentially an on-or-off switch" for the Hannibal plant in documents filed with the PUCO.

Reno resident Ron Hill, 68, said he shouldn't be on the hook for Ormet's bill.

"Would somebody pay my electric bill if I used too much, or would they say, 'shut the electric off?'" he said. "Cut (workers') wages and put it on the electric bill. Why not? I work in construction, and I took cuts all the time."

Ormet says power accounts for 30 to 35 percent of the cost of producing aluminum. The request for assistance was made to help the facility stay afloat after aluminum prices plummeted over the last year.

The plant employs about 900 people, with an annual payroll of more than $54 million. The estimated economic impact of the plant on the region, including employees in Pennsylvania and West Virginia, is in the neighborhood of $195 million, according to PUCO documents.

Maintaining those jobs and economic benefits were key to the rationale for the special arrangement.

"It was a huge step in securing Ormet's future and that of its employees," said Ormet spokeswoman Linda King.

Ormet and AEP must evaluate the arrangement ordered by the PUCO before putting it into a binding contract, officials with both companies said. AEP spokesman Jeff Rennie said his company must apply to the PUCO before it can start to collect the revenues forgone in the new Ormet deal, as well as a temporary one already in place.

The PUCO approved Ormet's request to set a discounted rate based on production levels for the current year. Beginning in 2010, Ormet will submit to the PUCO a "target price," the average price of aluminum that would provide the company with the minimum cash flow to keep operations going. In a brief filed with the commission, Ormet attorneys describe this as essentially "life support."

The maximum discount Ormet can receive in 2010 and 2011 is $60 million. That number will be reduced to $54 million in 2012 and then by $10 million a year in subsequent years.

The Ohio Consumers' Counsel had advocated an even lower limit on Ormet's discount, about $32 million. However, counsel spokesman Ryan Lippe said the office was pleased with some of the provisions the PUCO added.

"Certainly there are more consumer protections in the PUCO's decision than in Ormet's original proposal," he said.

Lippe said the consumers' counsel wants to see a statewide standard for dealing with cases like this.

Hill expects more such cases be filed, and he'd like to see voters decide on them instead of the PUCO.

"I got a funny feeling if this got on the ballot, you'd see the biggest landslide in history" against it, he said.

To view documents pertaining to Ormet's special arrangement request, go to and search for case number 09-0119.

RUSAL announces H1 2009 results

SteelGuru - Monday, 20 Jul 2009

Rusmet reported that UC RUSAL provides an H1 update on the success of its Cost Efficiency Leader program which is aimed at counteracting the consequences of the global economic downturn and increasing the efficiency of the company.


1. Economic effect from cost reduction measures exceeded USD 620 million in H1. Annualized cost reduction in 2009 is planned to reach USD 1.1 billion.

2. Average aluminium production cost was reduced by 27% by July compared to December 2008.

3. Energy costs were cut by more than 20%.

4. Raw materials expenses decreased by 41%.

5. Bauxite production was 5.8 million tonnes in H1, a reduction of 35.5% compared to H1 2008. The full year reduction of bauxite production is planned to be 5.6 million tonnes.

6. Alumina output was 3.7 million tonnes in H1, a reduction of 34% compared to H1 2008. By the end of 2009 alumina production is planned to be cut by 3.9 million tonnes.

7. Aluminium production was 1.98 million tonnes in H1, a reduction of 10% compared to H1 2008. Total cuts of aluminium output in 2009 are planned to amount to 0.5 million tonnes.

8. Production figures are preliminary and may be revised following audit completion.

Mr Oleg Deripaska CEO of RUSAL said that "RUSAL’s half year results demonstrate that we have developed and are successfully implementing a comprehensive program of actions aimed at reducing production costs, which are already one of the company’s key competitive advantages. By the end of the year we plan to reduce costs by another 7% to 8%. This will provide us with a strong margin of safety and will give confidence that RUSAL can succeed in any market conditions. In the near future we intend to sign an agreement with our creditors on a long term debt restructuring and concentrate our efforts on developing a flexible production system capable of immediately reacting to our customer’s changing needs. This will increase the opportunity to utilize our competitive advantages while launching new alloys, which will enable our clients to reduce their costs dramatically by purchasing metal produced in accordance with the specific requirements of their products."

1. Reduction of Production Output

In the Q2 of 2009, as part of its Cost Efficiency Leader program, RUSAL continued to reduce production across its least efficient and environmentally challenged facilities according to previously announced plans. The current reduction compared to H1 2008 is 4.5% at the Siberian smelters and 33% at the Urals smelters. In H1 2009 aluminium output was reduced by 39% compared to H1 2008 at the smelters outside Russia, Zaporozhye Aluminium Smelter, ALSCON and Kubal.

RUSAL also completed the optimization of alumina production through the suspension of its operations at Alpart and Windalco and Eurallumina and by cutting volumes by 39.5% at Aughinish helping to balance on the Atlantic market.

2. Production Cost Cutting

RUSAL’s key objective is to achieve the lowest production costs in the global aluminium industry. One of the main tools that allows us to reach such an ambitious cost cutting objective is the implementation and development of the RUSAL Production System. It will provide extra savings of resources help standardize work processes in accordance with the current output levels, reduce wastes and ensure the best HSE performance figures in the entire aluminium industry. Through a series of complex cost cutting measures, the company reduced the average cost of production per tonne of aluminium by 27% compared to December 2008.

Considerable cuts were achieved in key components of the production cost. The most critical problem today is electricity costs amidst a rapid growth of national power tariffs. Nevertheless, RUSAL was able to decrease its electricity costs by over 20% as a result of reducing the share of electricity purchased at unregulated prices, improving technologies, and increasing the effectiveness of production processes.

Raw materials expenses were cut by 41% as a result of new contracts for key types of raw materials. The costs of finished product transportation were reduced by 33% through optimized logistics, new transportation routes, hiring transportation operators on a tender basis and agreeing new transportation terms.

Therefore, the total economic effect from these cost-cutting measures in H1 exceeded USD 620 million. Overall the company is expected to achieve USD 1.1 billion of cost reductions not taking into account the investment programs.

3. Optimization of the Management System

As part of our efforts to raise the efficiency of the company’s businesses and improve the coordination of our activities while implementing the Cost Efficiency Leader program, RUSAL has completed the restructuring of its management system. In order to shorten the supply chain, the Raw Materials Division became part of the Aluminium Division while the management of the captive energy assets was transferred to the Energy and Construction Division. In addition, 2 new units, Transportation Directorate and Executive Directorate have been set up. The Transportation Directorate is responsible for searching for the most effective routes and logistical schemes and implementation of the program for the fullest utilization of new rolling stock and delays avoidance. The Executive Directorate supervises and coordinates all the ongoing cost-cutting activities.

4. Debt Restructuring

The negotiations on the terms and conditions of the long-term debt restructuring are almost finalized. RUSAL is planning to sign the agreement within the validity period of the standstill agreement.

Ormet awaits dispute findings as power deal provides good base

SteelGuru - Tuesday, 21 Jul 2009

Platts cited Mr Michael Tanchuk CEO of Ormet as saying that a decision on whether to idle more potlines at Ormet's 260,000 tonnes per year Hannibal, Ohio, aluminum smelter now hinges on the outcome of arbitration with Swiss trader Glencore after a power deal approved by state regulators this week provided the company with a very good base to continue operations.

Mr Michael said that the 6 potline smelter currently has 4.6 potlines operating, the minimum required under covenants with Ormet's banks, but has been mulling reducing this to 4.

The Ohio Public Utilities Commission recently endorsed an unusual 10 year discount arrangement between Ormet and its electricity supplier, American Electric Power that ties the price of the smelter's power supply to the price of aluminum on the London Metal Exchange. This could reduce Hannibal's electricity cost to as low as USD 34 per MWh, depending on operating levels, from USD 43 per MWh set by the previous 2 year contract with AEP. Power accounts for about a third of a smelter's costs.

Mr Tanchuk said that "We get a slightly lower power rate for 2009, so it helps for 2009. Looking forward, it's a very good base for the company. But is it enough? That will depend on a couple of things how the Glencore arbitration turns out and how we do with other cost-cutting initiatives."

He added that a "moderate improvement" in aluminum prices would help, too.

Mr Tanchuk said that "The panel is developing its findings." He said that the new power contract is really a big step for us. It really shows the support we have with the Public Utilities Commission, the governor, the legislators and our employees."

(Sourced from

RUSAL not to expand aluminum production till mid 2011

SteelGuru - Tuesday, 21 Jul 2009

Prime-Tass reported that United Company RUSAL is not to expand aluminum production till mid 2011 when it plans to start first capacities at Tayshet and Boguchany Aluminum Plants expecting the supply demand balance in the international market will recover.

Mr Alexei Arnautov Rusal aluminum division director told Prime-TASS that "In mid 2011 we plan to put into operation by one block at Tayshet and Boguchany Plants each. They are already short to complete noticed press service. Within this we do not exclude a possibility to consider an additional production cut of 5% more to provide putting these 2 units into operation without pressing the market."

He added that "As it has been informed before, RUSAL plans to cut primary aluminum production in 2009 by 50,000 tonnes or 11% less than the total output."

RUSAL has decreased production of primary aluminum in January to June 2009 by 10% to 1.98 million tonnes, alumina by 34% to 3.9 million tonnes, bauxites mining to 35.5% to 5.8 million tonnes in comparison with the same period 2008.

In 2008 RUSAL plants produced 4.424 million tonnes of aluminum, 11.317 million tonnes alumina.

RUSAL enjoys 12% share in world aluminum production and 15% share in world alumina production.

(Sourced from Prime-Tass)

Brazil Aluminum Production Down 6.2% In First Half 2009 - July 20, 2009: 11:46 AM ET

RIO DE JANEIRO -(Dow Jones)- Brazilian aluminum output fell in the first six months of 2009, the Brazilian Aluminum Association, or ABAL, said in a statement Monday.

For the period from January to June, Brazil's aluminum production fell 6.2% from a year earlier to 770,700 metric tons, ABAL said.

Brazil's June aluminum production fell 9.3% from the same month last year to 126,100 metric tons, according to ABAL.

The largest producer in June was CBA, with 39,000 tons, followed by Albras, a subsidiary of mining giant Vale SA (VALE), with 37,800 tons, and Alcoa (AA), which produced 26,800 tons.

BHP Billiton (BHP) output was 14,300 tons, while Novelis produced 8,200 tons.

Valesul, another subsidiary of Vale, produced no aluminum at all in June, compared to 7,700 tons in June 2008.

Earlier this year, Vale said high Brazilian energy costs did not make production worthwhile at the Rio de Janeiro plant site.

However, there were some timid signs of recovery.

Of the three major producers, sector-leader CBA showed a 2.1% rise in June and a 1.1% rise for the first half of 2009, while Albras showed no change from last year, and Alcoa was down 12.3% in the first half.

-By Daniel McCleary, Dow Jones Newswires; 55-21-2586-6085;

BPA Will Raise Rates for Power and Transmission Jul-21-2009

The new rates will remain in place until October 2011.

(PORTLAND, Ore.) - The Bonneville Power Administration announced today numerous rate changes that are expected to take effect October 1st, 2009.

Rates for customers that buy power and transmission will increase on average by 6 percent. Transmission rates will stay the same. Power rates will increase by an average of 7 percent. This is the first power rate increase since 2002 and it’s driven by both rising costs and decreasing surplus revenues.

The company says power customers will also receive $163 million in returned overcharges due to a 2007 U.S. Ninth Circuit Court decision. Financial benefits for residential and small farm consumers of investor-owned utilities, which are based on BPA’s power rates as well as other factors, will be $173 million.

BPA’s relatively new rate for wind integration services has been reduced substantially from the initial proposal due primarily to efforts from the wind power industry to improve their operational practices.

The new rates cover the agency’s fiscal years 2010-2011. Under the rates, the average priority firm rate for wholesale power is $28.77 per megawatt hour. That compares to the previous rate of $26.90 per megawatt hour.

"Nobody wants a rate increase, and we have worked very hard to keep the increase as low as possible," BPA Administrator Steve Wright said. "We tightened our belt and worked with stakeholders to keep the increase to a minimum, while honoring our commitments to fish, wildlife and maintaining system reliability." BPA says the primary causes of rising costs are actions to improve safety and reliability of the Columbia Generating Station nuclear plant and actions to protect threatened and endangered salmon. BPA does not own or operate the nuclear plant, located in Hanford, Wash., but markets the power produced by the plant.

The power rate increase is down from the initial proposal of 9.4 percent in February, and it is considerably lower than the potential 15 to 20 percent increase that looked likely in early April. At that time, BPA’s financial picture had deteriorated significantly due to below average water and the poor economy.

BPA stated in a press release, "Once the threat of a higher rate increase became clear, BPA identified more than $100 million in cost reductions through a public cost review process. These cost reductions, combined with an innovative agreement with the U.S. Treasury Department to provide an expanded line of credit, allowed the power rate increase to be brought back down to 7 percent."

In other rates developments, BPA has instituted a wind integration rate of $1.29 per kilowatt per month, which was reduced from the initial rate proposal of $2.72 per kilowatt per month. This is due primarily to actions taken by wind generators to reduce their use of BPA generation for reliability when wind power ramps up or down unexpectedly.

"The wind integration rate is part of a larger agency strategy to bring more of this renewable resource into the system that would otherwise not occur." Wright said. "There’s been an explosion of wind power on the BPA system, especially since 2005. We’re proud of this accomplishment, but it has led to operational challenges including risks to reliability and substantial costs. The wind integration rate, which has been reduced due to collaboration with the wind power industry, will help address those issues and put us in a position to bring more wind on board than would have been possible just a year ago."

BPA says their aggressive approach to integrating wind is one of the reasons the agency continues to have the largest ratio of wind relative to load of any transmission provider in the United States.

The new rates will remain in place until October 2011. How the rates will affect retail rates will vary with individual utilities due to a number of variables such as what portion of a utility’s power or transmission is purchased from BPA.

BPA’s rates for its direct service industries assume power will be sold to the Alcoa Ferndale and Columbia Falls aluminum plants, although that decision will ultimately be made through a contract negotiation process. BPA rejected a proposal from Alcoa for a variable power rate tied to world aluminum prices but has established a rate that will be the basis for negotiations of new contracts with aluminum companies. These contract negotiations will be subject to a public process.

Source: BPA

Venezuela will announce Al recovery plan in 15 days (subscription) - Jul 20, 2009

São Paulo 21 July 2009 07:08

Workers from the Venezuelan state-owned aluminium sector worked normally on Monday after reaching an agreement with the country’s government that ended road protests and blockades, but now they are waiting for the official announcement of a recovery plan, which they expect in 15 days.The government’s priority will be to invest some 410 million Bolivares ($190 million) in the local bauxite and alumina producer CVG Bauxilum, according to union leaders...¡¡

Chinese firm buys 2.5 million tonnes of alumina from Trafigura

SteelGuru - Thursday, 23 Jul 2009

Reuters reported that China's CPI Mengdong Energy Group has agreed to import 2.5 million tonnes of alumina from international trading house Trafigura Group.

An industry source said that the alumina will be shipped in equal amounts to the Chinese buyer over 10 years from 2010.

The alumina will be priced at less than 14% of the price of the 3 month aluminium contract of the London Metal Exchange MAL3. The contract also set the maximum and minimum prices for alumina, the main material for production of aluminium. That term price was about 10% lower than prices for current spot alumina to China, based on Friday's LME aluminium prices at USD 1,705 per tonne in London.

Trader said that spot alumina to China was being offered at about USD 265 per tonne to Chinese ports.

The source said that "The alumina will be given to HMHJ. The imports are to secure supply of alumina for the smelter."

Trafigura's contract will cover 18% of HMHJ's alumina needs in 2010, which are about 1.4 million tonnes. HMHJ's facilities in Inner Mongolia are capable of turning out 700,000 tonnes of primary aluminium in 2010 and that output will consume around 1.4 million tonnes of alumina. 2 tonnes of alumina are normally needed to make 1 tonne of primary aluminium in China, the world's top producer of the metal.

Mr Judy Zhu commodity analyst at Standard Chartered Bank Limited said that "It is a way that the aluminium smelter locks up the material supply."

A trading manager at a large aluminium smelter said that CPI and Trafigura's contract was unlikely to increase supply of alumina in China given the delivery time was for 10 years.

(Sourced from Reuters)

Century Aluminum Reports Second Quarter 2009 Results (Pressemitteilung) -

MONTEREY, CA -- (Marketwire) -- 07/23/09 -- Century Aluminum Company (NASDAQ: CENX) reported a net loss of $33.9 million ($0.46 per basic and diluted share) for the second quarter of 2009. Reported second quarter results were negatively impacted by a charge of $9.2 million ($0.12 per basic and diluted share) related to ongoing costs associated with the production curtailments at the Ravenswood, WV and Hawesville, KY primary aluminum smelters. Lower of cost or market inventory adjustments of $26.9 million ($0.36 per basic and diluted share) favorably impacted the quarterly results.

read the entire report at

Southwire to Pay Unprecedented Fine for Clean Air Act Violations

U.S. (press release) - 07/23/2009

Contact Information: Laura Niles, (404) 562-8353,

(Atlanta, Ga. – July 23, 2009) In the largest civil settlement obtained for alleged violations of the Secondary Aluminum Maximum Achievable Control Technology (MACT) regulations at a single facility in the Southeastern United States, Southwire Company has agreed to pay a total of $337,500 in civil penalties to the United States and the Commonwealth of Kentucky to address alleged noncompliance in testing, operational, monitoring, and record-keeping requirements of the Clean Air Act (CAA) at its Hawesville, Ky. secondary aluminum production facility.

The civil action, a response to a Feb. 20, 2006 Notice of Violation from the Kentucky Energy and Environmental Cabinet Department of Air Quality (KDAQ) and a Feb. 21, 2006 Finding of Violation issued by the U.S. Environmental Protection Agency, addresses penalties associated with the facility’s lack of air quality monitoring measures and procedures which have since been addressed. As a "major source" as defined by the Clean Air Act (CAA), the secondary aluminum production facility must comply with all pertinent regulations at the federal, state, and local levels pursuant to the CAA.

In Aug. 2007, the KDAQ confirmed that air pollutant levels from the secondary aluminum production facility meet the industry standards established by the MACT rule, which regulates the emission of metallic hazardous air pollutants, dioxins/furans, and hydrogen chloride, hydrogen fluoride and chlorine associated with secondary aluminum production. Because the facility has come into compliance with the MACT standards since notification of the violations, the settlement requires no further action to address compliance with the CAA at the facility.

Top Alumina Producer, UC Rusal, Says It is Staying

Government of Jamaica, Jamaica Information Service - Thursday, July 23, 2009


Russian alumina conglomerate, UC Rusal, which owns 52 per cent of local alumina production, has reaffirmed its commitment to continue operating in Jamaica, Minister of State in the Ministry of Energy and Mining, Hon. Laurence Broderick, has confirmed.

"They have successfully negotiated debt rescheduling arrangements with a consortium of Russian and western banks amounting to US$11.9 billion, out of a total debt of US$14.5 billion," Mr. Broderick told the House of Representatives on Tuesday (July 21) as he made his contribution to the Sectoral Debate.

"We have been assured that the company is trying its best to resolve its debt situation, in a manner that will ensure its long term future and involve little or no disposal of existing assets," he explained.

UC Rusal currently holds majority shares in West Indies Alumina Company (WINDALCO) which has plants at Ewarton, St. Catherine, and Kirkvine, Manchester, as well as ALPART (Alumina Partners), Nain, St. Elizabeth. This represents 23 percent of the company's overall production output.

Mr. Broderick said that the issue of Rusal's viability, in the face of the current global economic crisis, was of concern to the Ministry and, by extension, the administration.

He said that, through diplomatic channels and various meetings, the Ministry sought a clear indication from the company regarding its future in Jamaica.

"Despite the present difficulties relating to the global downturn in the aluminium industry and their own financial difficulties, UC Rusal has unequivocally asserted that they intend to remain in Jamaica for the long haul," Mr. Broderick said.

Operations at the plants have been scaled down since April of this year, consequent on a fall in demand for alumina on the world market resulting from the global economic crisis.

Mr. Broderick informed the House that while UC Rusal takes the necessary steps to revive its operations, the Ministry was reviewing options within existing agreements with the Government, to ensure that the interests of Jamaica, the administration and workers in the sector are secured.

He also informed the House that a joint bauxite task force has been established, to closely monitor critical aspects of the closing down process within the local bauxite/alumina sector and the possible impact.

Noting concerns arising regarding the "proper" closure of the facilities, Mr. Broderick said the process was being undertaken at the directive of Prime Minister the Hon. Bruce Golding whom, he said, had mandated that it be closely monitored.

Ministries and agencies comprising the task force include: the National Environment and Planning Agency (NEPA); the National Lands Agency (NLA); Water Resources Authority (WRA); the Energy and Mining Ministry, inclusive of its Mines and Geology Division; and the Jamaica Bauxite Institute (JBI).

He said that, since May, the multi-agency group has been working in close collaboration with the bauxite and alumina companies "to ensure compliance with the agreed monitoring regime."

The areas being monitored include: mothballing of the plants; environmental management; land rehabilitation; maintenance procedures; safety; land and reserve management; employee interests; industrial relations; and community outreach programmes.


Alcoa plant still to get upgrades - JULY 26, 2009

MASSENA EAST: Officials say smelter, tapped for $600m modernization, will restart


MASSENA — Potlines at Massena East are shut down and the price for aluminum is woefully low, but Alcoa isn't giving up on its $600 million modernization project as workers report to the plant each day to ready it for restart.

Alcoa decided in March to idle the smelter temporarily and lay off more than 100 workers in an effort to save money until market conditions improve.

The company was able to work out a deal with the New York Power Authority that allowed it the idle the plant without losing its long-term power contract.

Among the many terms of the agreement, NYPA agreed to extend contract deadlines for the modernization while Alcoa agreed to keep 250 employees working during the curtailment.

Russian Agapov Group's Rusoro Mining to exploit Venezuela's gold resources (Pressemitteilung) (Pressemitteilung) - 2009-07-28

The Caracas evening newspaper EL MUNDO reports today (Monday) that the Venezuelan government

is set to finalize an agreement for the exploitation of Venezuela's gold resources with a Russian company.

VHeadline Venezuela News reports:

El Mundo reveals that the company is Grupo Agapov-owned Rusoro (CEO Andre Agapov pictured right) which is already in association with the Venezuelan State in a socialist 50/50 joint venture in south-eastern Bolivar State.

The news comes during an official visit to Venezuela of Russian deputy Prime Minister Igor Sechin and El Mundo notes that both countries

have been working on the deal for close on two years following the signing of four cooperation agreements leading up to the 5th High-level Venezuela-Russia Inter-governmental Commission at which is it extra-officially said that conversations will begin on US$6 billion in investments required by key Venezuelan Guayana Corporation (CVG) subsidiaries to acquire update technology after some fifteen years of no investments.

Basic Industries & Mining (Mibam) Minister Rodolfo Sanz said a week ago that the Venezuelan government is evaluating whether or not such investments can be realized with an emission of debt bonds supported by Venezuela's gold reserves.

The CVG/Mibam will also finalize an agreement with Russian Agapov's Ruscaolin to initiate a joint venture to be named CIPROCA for the development and construction of porcelain and ceramics, including bathroom furnishings and sanitary products as well as water-based paints.

Following the signing of the agreements, El Mundo reports, that Minister Sanz is scheduled to travel to Ciudad Guayana to meet with workers from the state-owned Siderurgical del Orinoco (SIDOR) iron & steel works and CVG aluminum sector employees to initiate industrial development plans and to continue working towards solutions to labor problems in the state-owned company's key subsidiaries.

VHeadline Venezuela News,

Alcoa chief sees slow recovery for U.S. companies-CNBC

Reuters - Mon Jul 27, 2009

Asia stock rally pauses ahead of more earnings Oil eases to $68 as Asian equities pause from rally | Video

Euro holds firm vs dollar after upbeat U.S. data More Business & Investing News... NEW YORK, July 27 (Reuters) - U.S. manufacturers are showing signs of coming back from the economic downturn, but recovery will take time, the chief executive of aluminum producer Alcoa Inc (AA.N) said on Monday.

Klaus Kleinfeld said in an interview with cable TV business channel CNBC that aluminum inventory levels were very low since demand from manufacturers dried up in the recession.

"I think it will take a while for some companies to recover," he said. "They have all played the game of selling off their inventories.

"But they sold them down to a level that is not maintainable and that's the reason why I believe we are seeing this uptick in the U.S."

Kleinfeld said since the economic downturn late last year, the aluminum price tumbled from over $3,400 per tonne to $1,400. Manufacturers were not buying the metal and Alcoa was forced to cut back on production to manage supply.

"We have inventory levels pretty much all across the industries that are so low we've never seen before," he said. "In our industry we had a freefall - a 60 percent price decline in five months."

But now, "we see that China has come back, it's actually started to roll nicely again. The U.S. has clearly bottomed out and we even see some signs of uptick here."

Asked where he saw signs of a rebound, Kleinfeld pointed to the auto industry.

"Both Ford (F.N) and Toyota (7203.T) have announced that they will revamp production for their most popular models in the second half of this year," he said.

Also, the "Cash for Clunkers" program in which motorists can trade in old cars for more fuel efficient models was likely to increase auto production.

"Everyone pretty much assumes that's going to mean another 250,000 cars for the U.S. though it's obviously back-end loaded to the end of this year," said Kleinfeld.

"Even on the Class A truck side, demand level has gone up 10 percent so that's pretty good," he said. (Editing by Carol Bishopric; editing by Carol Bishopric)

© Thomson Reuters 2009 All rights reserved

Ormet/Glencore Arbitration Concludes And New Power Contract Authorized

Business Wire (press release) - Mon Jul 27, 2009

Evaluating Business Operations in Light of Ruling

HANNIBAL, Ohio--(BUSINESS WIRE)--Ormet Corporation ("Ormet") announced the conclusion last week of its previously disclosed arbitration with Glencore. The tribunal has determined that Glencore Ltd. ("Glencore") must pay specified monetary damages to Ormet. The tolling agreement with Glencore formally ends once the alumina, already received from Glencore, is processed into aluminum and paid for at the 2009 tolling rate.

Ormet also announced a recent order by the Public Utilities Commission of Ohio ("PUCO") approving a long-term power arrangement between Ormet and American Electric Power-Ohio ("AEP-Ohio"). The unique arrangement, which is planned to be in effect through 2018, would provide electric service to Ormet's Hannibal facility at rates below applicable large user industrial tariff rates when the LME falls below a predetermined level. The support is capped at $60 million per year which will decrease beginning in 2012. In addition, Ormet was granted standard credit terms and the return of $7 million held on deposit. Ormet is in the process of finalizing the arrangement with AEP, at which time it will become effective.

In light of the above announcements, Ormet is currently evaluating its business operations, and is evaluating the possible impact of the conclusion of the arbitration with Glencore on the recent PUCO order.

Given current aluminum industry conditions, market prices, reduced demand for aluminum, and worldwide economic conditions generally, Ormet expects that further reductions in its production will be necessary. Ormet is actively exploring other measures to minimize costs and rationalize its operations.

This press release contains forward-looking statements within the meaning of the federal securities laws. Such statements are based on current expectations, and the actual results and the timing of certain events could differ materially from those projected in or contemplated by these forward-looking statements due to a number of factors. Readers are cautioned that Ormet's business is subject to numerous significant risks and uncertainties, including those discussed in Ormet's 15c2-11 information and disclosure statements for the year ended December 31, 2008 and the quarter ended March 31, 2009 (copies of which are available at Ormet's website at

Headquartered in Hannibal, Ohio, Ormet Corporation is a major U.S. producer of aluminum. Ormet employs approximately 1,000 people. Its aluminum smelter based in Hannibal, Ohio has an annual aluminum production capacity of approximately 266,000 metric tons. For more information, visit Ormet's website at

Ormet Shutting Down Potlines

WTRF 28 Jul 2009

The WARN notice predicts 833 jobs will be cut.

Story by Dave Elias

HANNIBAL, Ohio -- A huge economic blow is expected to hit Monroe County as Ormet Corporation has informed the United Steelworkers that it plans to indefinitely shutdown up to six potlines at its aluminum smelter in Hannibal Ohio.

USW President Denny Longwell confirms for 7 News and that Ormet sent a WARN notice to the USW announcing that the projected date of the first reduction is September 26, 2009 with the rest of the cuts occuring October 11, 2009.

The WARN notice predicts 833 jobs will be cut. The notice was signed by Mike Griffin, Ormet Vice President of Operations.

7 News has a TEAM of reporters working on every angle of this story for you. Stick with us for the very latest developments.

Ormet Spokeswoman Linda King confirms that the WARN notices did go out, but had no further comment.

Monroe County Commissioner John Pyles tells 7 News that he has been informed that 136 salaried workers are also losing their jobs.

SPF signs memorandum with RusAl to support Zaporizhia Aluminum

Ukrainian Journal (subscription) - 27 Jul 2009

KIEV, July 27 – The State Property Fund and Russia's Russian Aluminum (RusAl) have signed a memorandum on agreed actions to support the activities of Zaporizhia Aluminum Plant (ZalK) and an annex to the agreement on the sale and purchase of Mykolaiv Alumina Plant Ltd.

"The fund's actions target the realization of a government policy regarding relations with the owners of privatized companies to combat the international financial crisis," the fund said in a statement.

The rest of the story is available to subscribers only.

Poor old aluminium - 28 Jul 2009

POOR old aluminium: it might be the lightweight metal of the future but it's lagged the commodity price recovery, improving 19 per cent this year, compared with 84 per cent for copper and 45 per cent for nickel.

While everyone focuses on prices, the cost of production is often overlooked. Deutsche Bank's metal watchers have picked up on a sharp decline in the cost of caustic soda, used to refine bauxite into alumina.

The trends are positive for Alumina, owner of 40 per cent of the Alcoa Worldwide Alumina and Chemicals (AWAC) joint venture, which accounts for 17 per cent of global production.

The caustic soda price has plunged from $US820 a tonne in the 2008 June quarter to about $US80 a tonne. Caustic soda accounted for 20 per cent of Alumina's operating costs in 2008, declining to a forecast 12 per cent in the December (second) half.

Alcoa’s Belda Plans to Step Down as Chairman in 2010 (Update4)

Bloomberg - 29Jul2009

By Rob Delaney

July 29 (Bloomberg) -- Alcoa Inc. said Chairman Alain Belda will retire in April after 40 years with the company and Chief Executive Officer Klaus Kleinfeld may take over the position in addition to his current duties.

Belda will step down as an Alcoa officer on Aug. 1 and as chairman on April 23, when the company convenes its annual shareholders meeting, New York-based Alcoa said today in a filing with the U.S. Securities and Exchange Commission.

While CEO, Belda proposed a $27.4 billion acquisition of Canada’s Alcan Inc. in May 2007 that would have been the biggest metals-industry takeover at the time. In May 2008, Kleinfeld was named CEO less than two weeks before Alcoa’s share price began a decline of as much as 89 percent as the global recession cut demand for base metals.

Alcoa has more than doubled since reaching a March 6 low of $4.97 as distributors began to replenish inventories. Aluminum on the London Metal Exchange has risen 17 percent this year.

Alcoa fell 25 cents, or 2.2 percent, to $11.01 at 4:15 p.m. in New York Stock Exchange composite trading.

Belda was appointed chairman and CEO of Alcoa, the largest U.S. aluminum producer, in January 2001 and has been with the company since 1969. Belda, 66, worked for Alcoa’s Brazilian operations in the 1970s and was appointed president of the Brazil unit in 1979, according to Kevin Lowery, an Alcoa spokesman.

The Alcan purchase, aimed at countering Alcoa’s loss of market share to Chinese producers, was rejected by shareholders and the Canadian company eventually was acquired by Rio Tinto Group in 2007.

New Chairman

Kleinfeld, 51, who joined Alcoa as chief operating officer in August 2007, is "anticipated" to take on the additional role of chairman, Alcoa said.

On July 8, Alcoa reported a second-quarter loss that was smaller than analysts’ estimates. Production cuts and workforce reductions implemented to contend with lower aluminum demand amid the global recession helped save money, the company said.

To contact the reporter responsible for this story: Rob Delaney in Toronto at

Kaiser Aluminum Q2 Earnings Decline - Quick Facts

RTT News - 7/29/2009

Kaiser Aluminum Corp. (KALU: News ) posted second quarter net income of $20 million or $0.97 per share, compared to $23 million or $1.11 per share in the prior year period. Excluding the impact of pre-tax, non-run-rate net gains of approximately $22 million, adjusted net income was $7 million or $0.32 per share.

On average, 3 analysts polled by Thomson Reuters expected the company to report a profit of $0.49 per share. Analysts' estimates typically exclude special items.

Net revenue for the period was $232 million, compared to $414 million in the year-ago period.

see the full report at

Aluminum prices fall - 7/29/2009

Aluminum sheet prices are unsettled while demand, shipments slide

Tom Stundza

Aluminum shipments have yet to reboundJust as one aluminum company is trying to convince buyers that prices should rise due to tightening supply, another producer tells its workers that many are about to lose their jobs because of collapsed demand and a third says further cutback are possible.

Aluminum common alloy sheet, grade 3003, slipped back 10¢ to $1.38/lb this month because of weak demand, even though aluminum ingot increased 5¢ in the Midwest market. However, Novelis of Atlanta has announced a premium on prices for some sheet products offered through its Web sales program as a result of a spike in demand from its customers caused by low inventory levels within aluminum distribution industry. American Metals Market says service center destocking over the past six months has sparked a recent increase in demand for Web sales. "We've seen a spike in demand for products that we have available in stock because people haven't wanted to carry inventory," a company spokesman says.

On the other hand, Ormet is poised to further curtail operations at its 260,000 metric ton/year smelter in Hannibal, Ohio. Despite a lack of confirmation from the company, union and market sources say a shutdown to 20% of capacity is planned for Hannibal this summer. The smelter already is down to operating 77% of its potlines in an economicallydepressed region of southeastern Ohio.

The Aluminum Association reports that producer shipments during the first half of 2009 totaled an estimated 7.912 billion pounds, 26.7% below the 2008 six-month total of 10.790 million. And, while analysts suggest there has been a pickup in orders in North America in recent weeks, its 2% six-month rate of growth pales versus the 17% improvement in global bookings.

Meanwhile, Century Aluminum reported a third consecutive quarterly loss last week and slashed production to combat weak demand for aluminum amid a more than 65% drop in sales. "The demand outlook has improved somewhat in certain regions and sectors," CEO Logan Kruger says in a statement. "However, we remain convinced the industry must take additional supply side actions for a global balance to be achieved."

Since the economic downturn late last year, metal demand and prices have plummeted and Century has cut production capacity at its Ravenswood, W.Va., and Hawesville, Ky., aluminum smelters. Kruger now says that "despite recently improving metal prices, we believe the balance of risk remains on the downside."

RusHydro held talks with RusAl

The Moscow Times - 7/29/2009

RusHydro held talks with RusAl on building an aluminum smelter at Boguchansk, the company’s chief executive, Vasily Zubakin, told reporters Wednesday. (Bloomberg)

Feds: Aluminum companies must divest NC facility

The Associated Press - 30 Jul 2007

RALEIGH, N.C. — The Justice Department says it has reached a settlement requiring two aluminum companies to sell a facility in North Carolina.

Federal officials said Thursday the divestment is necessary in order for Sapa Holding AB to move ahead with its proposed $150 million acquisition of Indalex Holdings Finance Inc. The department expressed concern about competition within the aluminum sheathing market if the companies were not forced to shed one of the facilities.

The companies can choose to divest either Sapa's aluminum sheathing manufacturing plant in Catawba or Indalex's aluminum sheathing facility in Burlington.

Federal officials said Sapa and Indalex are the only two manufacturers of aluminum sheathing in the United States. The sheathing is used in coaxial cable.

Copyright © 2009 The Associated Press. All rights reserved.

Alcoa Completes Deal to Acquire Bauxite and Alumina Interests in Suriname

FOXBusiness - Friday, July 31, 2009

Alcoa (NYSE:AA) today announced that Alcoa World Alumina LLC has completed its previously announced transaction to acquire BHP Billiton's bauxite and alumina refining interests in Suriname. Terms are not disclosed.

Suriname Aluminum Company LLC (Suralco), a subsidiary of Alcoa World Alumina LLC, and N.V. BHP Billiton Maatschappij Suriname (BMS), a BHP Billiton subsidiary, have been participants in mining and refining joint ventures in Suriname since 1984. BMS had a 45% interest and Suralco a 55% interest in the joint ventures. Prior to the establishment of the joint ventures, BMS had separately conducted mining operations in the country, while Suralco has been active in Suriname for almost 100 years.

Suralco is a part of Alcoa World Alumina and Chemicals (AWAC) a joint venture between Alcoa and Alumina Limited, with Alcoa holding 60 percent.


Alpart retirees lose health-care benefits

Jamaica Gleaner - Friday | July 31, 2009

Golden agers who spent their lives toiling in the bauxite industry have been dealt another severe blow as the global economic meltdown continues to unleash its effects on the alumina sector.

Two hundred and fifty retirees who received health-care benefits financed by the Alumina Partners of Jamaica (Alpart) will lose that assistance today.

This means the senior citizens will now have to find alternative ways to finance their medical costs at a time in their lives when they are most likely to be most in need of health care.

A letter to the retirees, dated March 24, 2009, over the signature of Human Resource Manager Alberto Fabrini states: "As you are aware, Alpart took a number of steps this year to maintain the company's operations under trying circumstances."

The letter added that due to the continuing severe decline in the global aluminium industry and the corresponding reduction in demand for alumina worldwide, the company would temporarily cease operations commencing March 15.

Medical plan terminated

However, Alpart said it could only continue to grant health benefits until the end of July.

"As a consequence, the Alumina Partners of Jamaica Medical Plan will be terminated effective July 31, 2009, and medical benefits under the plan for all categories of employees will cease on that date."

The correspondence adds: "Alpart had also extended the benefits under our employee medical plan to our retirees and, as a result, all medical benefits enjoyed by our retirees under the pan will also cease."

The letter states that the management of Alpart fully understands and empathises with the concerns and anxieties that will be felt by the retirees and their families.