AluNews - January 2015

Press Metal in RM2b smelter expansion plan

The Star Online - January 29th 2015

Press Metal Bhd will invest RM2bil in the Phase 3 expansion of its aluminium smelter project to raise production capacity, said group chief executive officer Datuk Paul Koon Poh Keong.

He said the additional capital injection would bring the company's total investment in aluminium smelting facilities in Sarawak to RM5.5bil.

The Phase 3 expansion will be located next to the company's existing smelter in Bintulu's Samalaju Industrial Park within the Sarawak Corridor of Renewable Energy (SCORE). Press Metal also owns an aluminium smelter in Mukah. Both smelters are currently in full operations.

"Every year, we (Press Metal) generate more than US$1bil in aluminium exports for the country," said Koon in a presentation at a SCORE forum. The forum was part of the three-day International Energy Week 2015 hosted by the Sarawak Government.

Regional Corridor Development Authority CEO Tan Sri Wilson Daya Dandot chaired the session, which featured two other panel speakers – Sarawak Planning Unit director Datuk Ismawi Ismuni and Sakura Ferro Alloys general manager Chris Rowe.

Stage one of the phase III project is expected to be operational by the last quarter of 2015 and stage two by the first quarter of 2018. Upon completion of the expansion project, Press Metal will raise its total smelting capacity to 766,000 tonnes from 440,000 tonnes per annum to become the largest smelter in South-East Asia.

The existing Samalaju smelter has an installed capacity of 320,000 tonnes per annum, while the Mukah smelter has a designed capacity of 120,000 tonnes per annum.

Last month, Press Metal signed a power purchase agreement with Syarikat Sesco Bhd (owned by Sarawak Energy Bhd) for an additional 500MW of power for a 25-year period for the proposed new smelter.

Koon said Press Metal currently produced aluminium ingots and billets, which are exported to various countries, including Mexico and North America.

According to him, aluminium is today more widely used, including in the automotive industry in the United States and in window buildings due to its energy-saving advantage.

He said as the aluminium smelting industry could generate many spin-off activities, "we are aggressively looking at getting downstream industries to be players in Sarawak".

Koon said if aluminium downstream industries currently operating in Peninsular Malaysia could build plants next to Press Metal's smelter, they would be able to buy molten aluminium instead of having to purchase aluminium ingots first and then melt them down for processing activities, thereby saving costs.

Earlier, Ismawi sought the help of Press Metal and other energy-intensive industries which are operational in Samalaju Industrial Park to attract downstream industries to set up manufacturing facilities in SCORE.

Other pioneer investors in Samalaju are Japan's Tokuyama, which owns a polycrystalline silicon plant, and OM Materials Sarawak Sdn Bhd, which is ramping up its production of ferro alloys.

"With these trigger industries (in operation), hopefully we can build the clusters and bring in the small and medium industries in downstream activities," he added.

He said with the production of polycrystalline silicons for solar cells, Sarawak could develop the whole supply chain of the solar industry.

SNC Lavalin to upgrade former Dubal site

Construction Week - January 28th 2015

SNC-Lavalin has been awarded a contract by Emirates Global Aluminium (EGA) to carry out an energy optimisation project at its Jebel Ali facility.

EGA is the company that was set up following the merger between Emirates Aluminium (Emal) and Dubai Aluminium (Dubal).

The contract will involve an upgrade of the three original potlines at the former Dubal smelter, which now has seven potlines.

A system developed in other EGA plants will be introduced, as well as a new potline control system. SNC Lavalin said the engineering, procurement and construction (EPC) contract was already underway and that work is set to conclude in 2017.

"We are proud to be a part of EGA's continued growth and success," said Dale Clarke, executive vice-president of the firm's mining and metallurgy business.

Following its recent takeover of Kentz, SNC Lavalin now employs around 20% of a 45,000-strong global workforce in the Middle East. Based on 2013 figures, it has annual revenues of $10bn.

GCC aluminum output targets 5 million tonnes in 2015

Shanghai Metals Market - January 26th 2015

The collective aluminum output by five aluminum majors in the GCC region has increased by 31% during 2014, when matched with the previous year.

The primary aluminum production by these five companies totaled 4.928 million tonnes in 2014 as compared with the total production of 3.749 million tonnes in 2013. The five companies are Emirates Global Aluminium (UAE), Aluminium Bahrain (Bahrain), Ma'aden Aluminium (KSA), Qatalum (Qatar) and Sohar Aluminium (Oman).

According to the Gulf Aluminium Council, the region's aluminium production constitutes 10% of the global production. The major contributors to the steep rise in production were Ma'aden Aluminium and Emirates Global Aluminium, which posted the highest year-on-year growth in production. The GCC aluminium production targets to cross the 5 million tonne landmark in 2015.

Almost 40% of the primary aluminium produced in the region is consumed by domestic aluminium market players who use them for various local and international projects. The balance is exported to different regions of the world.

Global aluminium demand to grow at 7.6pc

Trade Arabia - January 26th 2015

Global primary aluminium demand is expected to grow at a compound annual growth rate (CAGR) of 7.6 per cent from 2014 to 2017 with Asia and the Americas generating the greatest share of demand, said a top official.

UAE-based Emirates Global Aluminium (EGA) exported 56 per cent of its production in 2014 to Asia and the Americas, explained Adel Abubakar, managing director of Dubal America, highlighting that the company was well placed to achieve further market share.

He was speaking at the recent Platts Aluminium Symposium 2015, which was staged in US city of Scottsdale, Arizona.

Abubakar added that substantial future growth will be in value added products - a niche focus for EGA, where about 85 per cent of the 2.4 million tonnes manufactured each year comprises re-melt products, billets and slab.

"With the UAE-based EGA ranking among the top five primary aluminium producers in the world and being a significant exporter to world markets, EGA is in a strong position to leverage the continuous growth in demand forecast for primary aluminium," he said.

EGA also leveraged its participation at Platts 2015 to further promote the EGA brand and to network with industry colleagues and clients.

Hidden energy exports through primary aluminium remain a concern

Business Standard Ltd. - January 19th 2015

Consecutive years of below five per cent economic growth and 0.7 per cent contraction of the manufacturing sector last year ensured a 6.2 per cent fall in the country's primary aluminium use to 1.58 million tonnes (mt) during 2013-14. Even while India is to grow at 5.5 per cent in FY15, aluminium will likely again experience a fall in growth.

This is happening when Vedanta and Hindalco are raising production by a significant amount. Government-owned National Aluminium Company (Nalco), exercising production discipline for the sake of profit improvement, is now engaged in reviewing whether more capacity use at this juncture will prove beneficial. A demand fall for two years in a row has led the Indian aluminium sector to sell the rising surplus abroad. Primary producers' exports climbed 142,322 tonnes to 487,081 tonnes in 2013-14. Exports had reached 523,802 tonnes till mid-December 2014.

The question is, when Prime Minister Narendra Modi is campaigning hard for 'conservation of power', should the country be exporting primary aluminium in such large quantities? Production of a tonne of aluminium requires the use of close to 14,800 kilowatt-hours of electricity and that translates into up to 35 per cent of metal smelting cost. In a way, selling primary aluminium in the world market amounts to our exporting energy.

Unlike smelters in West Asia using gas and many, in other places, using hydro power, the ones here draw electricity from coal-fired power plants. In the event of our exporting about 750,000 tonnes of primary aluminium in the current financial year, we end up exporting a large amount of energy. This is when power shortage remains the Achilles' heel of the Indian economy. The country is witnessing a peak power shortage of nine per cent and this being the average. Some states are doing with much less power than others.

The Federation of Indian Chambers of Commerce and Industry says in a report on power transmission that there is a correlation between power consumption and gross domestic product (GDP). "Power shortages currently cost India a GDP loss of $68 billion (0.4 per cent of total GDP)," it says. India has plans to add 88,000 megawatt (Mw) of power generating capacity over a five-year period. Going by the record, there will again be a large gap between the target and capacity commissioned. Environmental groups make the point that aluminium exports finally boil down to carbon dioxide emissions at the point of electricity generation by burning coal.

"Smelting of aluminium from intermediate product alumina requires a lot of coal-fired electricity use. So, in white metal export is embedded considerable energy. You have a chicken and egg situation here. Local industry constituents have in recent periods built smelters and also expanded capacity at existing sites, in anticipation of demand for aluminium growing at more than the GDP growth rate. Economic slowdown put paid to such hopes. "I am sure the worst time for the industry is behind us and incremental demand from principal consumption points like electrical and electronics will take care of much of surplus now exported," says Nalco chairman Ansuman Das. Industrial production growing at a five-month high of 3.8 per cent in November 2014, perhaps marking a turnaround in outlook, and the government's resolve to kick-start major projects requiring a host of official clearances would result in improvement of domestic aluminium demand, says Das. The optimism is widely shared by his industry colleagues.

It can't be otherwise since both Hindalco and Vedanta Aluminium remain engaged in building new smelting capacity with power backup. Acquiring bauxite deposits and then doing the actual mining by overcoming protests by NGO-backed tribals and adivasis, however, remain a major issue for aluminium makers. With the commissioning of two new smelters of 360,000 tonnes each, Hindalco now has capacity of 1.3 mt. Vedanta owns a 500,000-tonne smelter in Odisha's Jharsuguda and another 570,000-tonne unit at Korba in Madhya Pradesh. The Vedanta target is to build aluminium capacity of 2.6 mt by setting up a 1.1 mt smelter at Jharsuguda. Nalco wants to become a million tonne capacity producer by building a 500,000 tonne smelter at Sundargarh in Odisha, for which state-level clearances are in place. But the project, requiring investment of Rs 16,450 crore, will be viable only if Nalco manages to get a large enough coal block to feed the 1,260 Mw power complex in the upstream.

2014 Aluminium Production in the GCC reached to 4,928,143 tons, an increase of 1,179,527 tons compared to 2013

Zawya - January 19th 2015

Collectively the five Aluminium companies (EGA, Alba, Ma'aden , Qatalum and Sohar Aluminium) produced 4,928,143 tons of primary Aluminium in 2014 compared to 3,748,616 tons in 2013, an increase of 31%.

GCC Aluminium production constitutes 10% of the total world production.

Mr. Mahmood Daylami added, "The main increase has come from Ma'aden Aluminum, Saudi Arabia start-up which was successfully ramped up during the year, and EMAL Phase 2 project completion before the target date".

He also added that the production for 2015 is expected to be more than 5 million tons.

GCC remains to be one of the leading hubs for the Aluminum business where 40% of its production utilized by the Downstream Aluminium industry in the Gulf for Regional and International market, while the balance of the primary Aluminium production are exported to different regions of the world.

GCC Aluminium production are of the highest quality and the plants are modern, and environmentally-friendly and are regarded to be the most advanced in the world.

Chinese aluminium smelters shut more capacity as prices dive

Reuters - January 14th 2015

  • Smelters shut more capacity after big cuts last year
  • Already shut 580,000 tonnes since November - analyst
  • Further cuts needed to support prices - smelter exec
By Polly Yam

HONG KONG, Jan 14 (Reuters) - Chinese aluminium smelters are likely to close more than 500,000 tonnes of capacity in coming months as domestic prices fall below the cost of production amid slowing demand and plentiful supply, industry sources said.

However, further cuts of 1.5 million to 2.0 million tonnes would be needed this year to counter planned new capacity in the world's top consumer and producer of aluminium and boost prices that hit a record low on Wednesday, they said.

China's aluminium smelters shut about 2 million tonnes of capacity in the first half of 2014, pushing up prices to the year's high in September, but nearly half was brought back on, supported by local government subsidies and lower raw material prices.

Another round of cuts began in November, and about 580,000 tonnes had been cut since then up to last week, with another 500,000 tonnes likely to be cut by mid-year, said Xu Hongping, analyst at China Merchants Futures.

However, last year's restarts and new capacity, estimated at more than 4 million tonnes in 2014, have boosted China's output to record highs since June.

The aluminium contract in Shanghai traded at a record low 12,445 yuan a tonne on Wednesday, which a smelter executive said was below the cost of production and logistics for most of China's estimated 30 million tonnes of operating capacity.

"This time the cut should expand to 2 to 2.5 million tonnes," said the executive at a medium-scaled smelter, who declined to be named because he was not authorised to talk to media.

He expected smelters to start closing more capacity in the second quarter, since some local governments did not want the smelters to close before the Lunar New Year in mid-February.

Domestic prices could rise sharply only if total cuts in 2015 expanded to more than 2 million tonnes, said an official for a state-owned smelter.

China is expected to add about 4.5 million tonnes of capacity aluminium capacity this year, according to information provider SMM, although the impact will be spread over the year.

Traders say prices are also being hurt by slow domestic demand as China's economic growth cools, while tight credit conditions are affecting producers of semi-finished aluminium products in Guangdong province.

One Guangdong producer planned to resell more than 100,000 tonnes of primary aluminium stocks for cash, the smelter executive said.

Banks have cut credit to metals firms after an alleged metal financing scam came to light in mid-2014..

Yunnan Aluminium to Acquire 51% Stake in SLACO Before Building 1 Million-Tpy Alumina Refinery

Shanghai Metals Market - January 9th 2015

Yunnan Aluminium Co. is planning to acquire 51% stake in Sino Lao Aluminum Corporation Limited (SLACO) for $ 28.05 million via new subsidiary, Yunnan Aluminum International Company., Ltd. (YALICO), it said in a statement filed to the Shenzhen Stock Exchange today.

After the deal is completed, YALICO will develop bauxite resources across 147.86 square kilometers on the Bolaven plateau in southern Laos, and build 1 million-tpy alumina refinery as well as 3 million-tpy bauxite mine, it added.

SLACO holds mining rights to bauxite resources over an area that stretches 147.86 square kilometers in Laos' southern Champasak Province. The company's prospecting – conducted in two stages – over this area found approximately 140 million tonnes of bauxite (gibbsite) reserves, with an average grade of 39.13% in stage one and 41.31% in stage two, with Al-Si ratio at 8.47 in stage one and 9.51 in stage two. Bauxite in the region outperforms that in China in quality, which helps reduce costs for bauxite mining and alumina refining, it said

Alba sets all-time production record in 2014

Bahrain News Agency - January 5th 2015

Aluminium Bahrain B.S.C. (Alba)'s metal production soared to 931,427 metric tonnes in 2014 – jumping 18,727 metric tonnes from 912,700 metric tonnes achieved in 2013.

A ceremony to mark Alba's all-time production record was held at the HRH Princess Sabeeka Oasis on Monday, January 5.

The event was attended by Alba's Chief Executive, Tim Murray, Chief Operations Officer, Isa Al Ansari, Chief Financial Officer, Ali Al Baqali, Chief Marketing Officer, Jean Baptiste Lucas, Chairman of Alba Labour Union, Ali Al Binali as well as a large number of senior officials and employees.

Commenting on the company's production record, Alba's Chief Executive, Tim Murray said:

"Alba continues to push the limit on operational performance with our existing assets. In 2014 we were able to exceed the record production in 2013 which shows the dedication and commitment of our workforce. I would like to thank the Alba Board, Alba Management, Alba Labour Union and all the Alba Employees and Contractors for their performance in both production and safety in 2014. We look forward to an even more fruitful 2015."

Alba sets all-time production record in 2014

Zawya - January 5th 2015

  • Alba achieves production record of 931,427 metric tonnes in 2014
  • Alba 's production record driven by the contribution of its dedicated workforce and commitment to safety
Aluminium Bahrain B.S.C. ( Alba )'s metal production soared to 931,427 metric tonnes in 2014 - jumping 18,727 metric tonnes from 912,700 metric tonnes achieved in 2013.

A ceremony to mark Alba 's all-time production record was held at HRH Princess Sabeeka Oasis on Monday, January 5, 2015.

The event was attended by Alba 's Chief Executive, Tim Murray, Chief Operations Officer, Isa Al Ansari, Chief Financial Officer, Ali Al Baqali, Chief Marketing Officer, Jean Baptiste Lucas, Chairman of Alba Labour Union, Ali Al Binali as well as a large number of senior officials and employees.

Commenting on the company's production record, Alba 's Chief Executive, Tim Murray said:
" Alba continues to push the limit on operational performance with our existing assets. In 2014 we were able to exceed the record production in 2013 which shows the dedication and commitment of our workforce. I would like to thank the Alba Board, Alba Management, Alba Labour Union and all the Alba Employees and Contractors for their performance in both production and safety in 2014. We look forward to an even more fruitful 2015."

Jamaica to Resume Mining Bauxite in 2015

Latin American Herald Tribune - December 26th 2014

Mining activity connected to the Alpart bauxite/alumina plant will resume in January with the goal of extracting and exporting up to 2 million tons of raw bauxite during the next 18 months, the Jamaican government said.

The Minister of Science, Technology, Energy and Mining, Phillip Paulwell, announced the signing of an agreement with Russian aluminum company UC Rusal to restart mining.

"The new deal represents an expression of the government's commitment to ensure that the full potential of the bauxite/alumina industry is realized in the shortest possible time," Paulwell said.

UC Rusal will invest $400 million to modernize the Alpart plant and to fund infrastructure and transportation improvements, the minister said.

The refinery is scheduled to re-open in December 2016 with an annual production capacity of 1.65 million tons of smelter-grade alumina, Paulwell said.