AluNews - April 2016

Balco plans to enhance capacity to 1 MTPA

Business Standard - April 30th, 2016

Vedanta-controlled Bharat Aluminium Company Limited (Balco) would be expanding its production capacity to 1 million tonne per annum (MTPA).

The proposal for the expansion and modernisation of Balco facility located in Chhattisgarh's Korba district was designed in 2013. It was however put on hold following global economic slowdown. Vedanta ChairmanAnil Agarwal, who visited Balco early this week for the first time after taking over 51% stake in the company in 2001, asked the officials to revive the plan and expedite the expansion programme with immediateeffect.

The Government of India holds remaining 49% stake in the company that was incorporated in the year 1965 as a Public Sector Undertaking (PSU).

"The company would be investing Rs 10,000 crore for the expansion plan," Balco spokesperson told Business Standard. The old plant would be dismantled and a new one with modern technology would be set up that would facilitate to enhance the capacity to 1 MTPA, he added.

At present, Balco is equipped to produce 575,000 tonne per annum aluminium. Because of power constrains, the plant is unable to run to the full capacity. The 1200-Mw power plant had been commissioned while thecompany had bagged the Chotia coal mine in the auction to feed it. The power plant was a major milestone as it would help feeding the proposed plant under the expansion programme.

The company is also eying bauxite mines in Madhya Pradesh and Chhattisgarh as the deposits in Chhattisgarh's Kawardha and Mainpath was depleting. The stock would feed the plants for another three years only.

After the capacity expansion in Balco, Chhattisgarh would emerge as the second largest aluminium producing state in the country. Earlier, the state was ranked third. The enhanced capacity would also help Chhattisgarh to produce 35% of the Country's aluminium.

REFILE-UPDATE 1-Rusal's aluminium output rises with new smelter's trial run

Reuters - April 29th, 2016

(Adds details on new smelter, loans; refiled to replace duplicate word in headline)

* Rusal's Q1 output includes 39,000 T from Boguchansk smelter

* Boguchansk's annual capacity is 147,000 T

* Boguchansk's official launch planned in 2016

* Rusal agrees refinancing deals

April 29 Russian aluminium giant Rusal increased its first-quarter production by 1.7 percent to 916,000 tonnes, owing to a new smelter and several debt refinancing deals, the company said on Friday.

Rusal, which last year was overtaken by China's Hongqiao as the world's biggest aluminium producer, has been hit by weak prices for the metal. However, limited restarts of smelters in China were helping the market, it said.

Rusal's first-quarter sales rose 2.7 percent on the same period last year to 957,000 tonnes and included 39,000 tonnes produced in a trial run by its new Boguchansk smelter in Russia's Krasnoyarsk region.

The official start-up for this smelter, which Rusal built in partnership with power generating group Rushydro, has been repeatedly postponed amid weak aluminium prices.

The smelter's first stage has an annual capacity of 147,000 tonnes and its formal opening will be announced as soon as Rusal, controlled by Russian tycoon Oleg Deripaska and part-owned by Glencore, receives technical approval from the Russian authorities, it said in March.

However, Boguchansk's first-quarter production shows the smelter will manage to reach its annual capacity this year if it keeps production running at the same pace in the remaining quarters.

On Friday, Rusal said only that it planned to officially start the smelter later this year.

It also said aluminium prices on the London Metal Exchange have grown by more than 10 percent so far this year amid growing metal supply tightness and very limited restarts in China.

Three-month aluminium hit a nine-month peak on Friday as speculators pushed prices higher in the wake of a weaker dollar and firmer oil prices, but analysts were cautious.

"Although the aluminium price strengthening in March and April ... prompts a stronger outlook for second-quarter earnings, we think it might prove temporary," VTB Capital said in a note following Rusal's results on Friday.

Rusal's shares fell 1.8 percent in Hong Kong on Friday.

Rusal also said that it would repay $524 million of its debt to a syndicate of international banks, using a refinancing tranche and $109 million of its own funds.

It also entered into new credit facilities for up to $178 million with Russia's Gazprombank for its debt refinancing with the same bank and agreed with Sberbank , the country's largest lender, a new credit limit of up to $100 million. (Reporting by Sonali Paul and Polina Devitt; additional reporting by Anastasia Lyrchikova; editing by Joseph Radford and Greg Mahlich)

Nalco to go for toll-smelting of aluminium in Iran

Business Standard - April 27th, 2016

Taking advantage of availability of cheap gas based power in the Gulf region, National Aluminium Company (Nalco) plans to go for toll-smelting arrangement soon with three Iranian companies to produce aluminium.

Nalco CMD, T K Chand, who was in Iran recently as part of an Indian business delegation, has already held preliminary discussion in this regard with top officials of the government there and state-owned Iranian Mines & Mining Industries Development & Renovation Organization (IMIDRO).

"Nalco is exploring the possibilities of toll-smelting in Iran through IRALCO (Iranian Aluminium Company), Al-Mahadi, and SALCO. If things work out, the toll-smelting can be done in next 3 to 4 months", Chand said.

This arrangement, he said, will be a precursor to the proposal to set up an 0.5 million tonne per annum aluminium smelter and 1,000 Mw gas based power complex at Chabahar free trade zone in Iran.

Through toll-smelting, Nalco intends to convert its alumina, currently exported to the international market, to aluminium by paying a tolling fee to the concerned companies.

Nalco annually exports about one million tonnes of alumina. If it is converted to aluminium, the topline of the company would go up significantly as the sale price of aluminium is six times that of alumina.

What has prodded Nalco to go for toll-smelting or an aluminium smelter in Iran is the availability of low cost power there. Energy cost constitute nearly 40 per cent of cost of producing aluminium. In Odisha, Nalco is sourcing power from its captive generating plant at Rs 2.60 per unit. The gas based energy in Iran is available at half this rate, Chand said.

Meanwhile, Nalco and IMIDRO have constituted a joint task force to pursue the greenfield smelter cum power complex project at Chabahar free trade zone.

The task force, consisting of senior project executives of Nalco, IRALCO and officials from Iran's industries ministry, is expected to submit a feasibility report on the project in three months.

"This project, to be set up in joint venture, is expected to be highly cost competitive combining the advantages of low cost Nalco alumina and low cost Iranian energy", Chand said.

Based on the report submitted by the task force, the ownership pattern, project financing, long-term supply of gas and other aspects of the proposed smelter project would be decided.

Nalco, for some time, had been looking to set up a greenfield smelter at a place where energy is available at competitive price. The company had shortlisted Iran, Indonesia and Oman as possible locations for the overseas smelter.

While it dropped Indonesia on the ground of logistics problems, it has chosen Iran over Oman because of energy cost advantage, sources said.

Rio Tinto cuts 41 jobs at Weipa bauxite mine operations

Townsville Bulletin - April 21st, 2016

MINING giant Rio Tinto is laying off more than 40 staff at its Weipa bauxite operations.

The 41 staff are spread across the East Weipa and Andoom ventures and include six in leadership roles, six other professional staff, seven trade or operational employees and 22 in support roles in operations and maintenance areas.

A Rio Tinto spokesman said "we are working to reduce costs across Rio Tinto in a challenging environment and to ensure our Weipa bauxite operations remain globally competitive".

"Our focus is on providing all the support we reasonably can to the people who are affected,"

he said.

The Cairns Post understands that no voluntary redundancies were called for, instead the company restructured operations to identify the roles it could do without.

The staff who have lost their jobs include long term as well as newer employees. It is understood some have left with packages of up to $200,000.

The job cuts --- with no more planned at this stage — do not impact on the new $2.6 billion Amrum mine expansion which is in the construction stage.

When it comes on line in 2019 workers at the East Weipa project, which is winding down, will transfer over. The Andoom mine has about another 15 years of life left.

Rio employs 1400 staff and contractors at Weipa. Up to 1100 construction workers will be hired at Amrun during the peak over three years.

Two week ago Rio Tinto flagged job cuts at Weipa.

It wrote to all personnel, ­warning them of job losses as part of a review to cut costs ­because of falling aluminium prices and competition.

Weipa operations general manager Gareth Manderson told staff they "need to transform our business during 2016 in order to build resilience ­irrespective of market cycle".

"The work we have completed together over the past few years to improve our safety performance, productivity and cost position has positioned us well, however global market conditions, increased competitor activity and lower prices (particularly alumina) requires that we continue this work at an increased the pace," he said.

The company froze new and replacement roles.

"In addition, the management team has commenced a detailed review of work programs, organisational structures and budgets," Mr Manderson said.

"This may result in changes for individuals and teams, and raises the possibility that some of our colleagues will leave Rio Tinto Weipa operations," he said.

Rio Tinto has pared back its 2017 guidance for iron ore shipments by up to 5 per cent after facing delays in its driverless trains project in Western Australia.

Rio reported solid production performances, with bauxite volumes up six per cent on the previous corresponding period, alumina seven per cent, aluminium 10 per cent and copper 27 per cent.

Retiring chief executive Sam Walsh described the first-quarter performance as a demonstration of Rio's operational excellence and highlighted the aluminium business.

Global aluminium smelters' production costs on decline

Aluminium Insider - April 20th, 2016

Production costs for smelters are highly dependent on the global economic environment, which affects oil prices, and the prices of other commodities, including those that create smelters' input costs. For instance, during the global economic crisis in 2009, production costs for aluminium smelters decreased between 30 and 40% compared to the record high costs in 2008. Following the economy recovery in the years after, businesses' production costs increased but remained lower than 2008 levels. Since 2012, smelters' production costs have been gradually falling, reaching similar levels as in 2009 by end of 2015.

Another reason for decreasing production costs of smelters is the implementation of new and cheaper technologies with lower electricity consumption and higher efficiency, either in entirely new low cost capacities or through the replacement of high cost old technologies. This trend has been especially strong in China.

Alumina, electricity and carbon (anodes) costs represent the three major cost factors of every smelter. While alumina and carbon costs are mostly similar for smelters, electricity and labour costs significantly vary from region to region.

Four years ago in the spring of 2012, when LME cash aluminium price was just below US$ 1900 / tonne, some 60% of world's (excluding China) primary aluminium producers had production costs above the market price. Today, with the price hovering around US$ 1500 / tonne again, up to 60 % of global production (ex China) would be unprofitable without premiums. With added aluminium premiums the percentage of loss making production is 45 – 50% of the global total (ex China) of around 28 million tonnes. Chinese smelters have approximately the same percentage of profitability, if looking at the SHFE aluminium price. How could this be possible?

The answer is that production costs for smelters around the world have decreased significantly in the meantime. Additionally, premiums sharply fell during 2015, after the record high levels reached during the previous two years, which has had an vital effect on smelters' profitability.

The main reason for falling production costs has been a significantly lower oil price (falling from nearly US$ 100 /bbl in 2012 to below US$ 40 /bbl today), lower alumina prices (~ 35 %), lower electricity costs (for smelters whose electricity tariffs are linked to the LME aluminium price.) However, the main cost reduction came from devaluation of local currencies (as was case with the Russian ruble and Chinese Yuan), along with the strengthening of US dollar against other major currencies in recent years. Lower production costs can also be attributed to lower prices on the electricity market, while other smelters have built their own power plants or switched suppliers to get lower prices. In general, all input costs have decreased, including costs for wages and other benefits for workers due to currency devaluation and a lower number of employees at some smelters.

The lowest and highest production cost regions

Smelters with the lowest production costs are situated in the Persian Gulf, Canada, Russia, Iceland and South Africa, and are currently in the range US$ 1100 – 1450 per produced tonne. Smelter Ma'aden in Saudi Arabia, with a capacity 740 kT /y, is the lowest cost smelter in the world (~ US$ 1050-1100 / tonne), according to Alcoa, which holds a 25% stake. This statement is based on their own low cost alumina, electricity and anode production, and among other things, high relative production. The author believes that among the lowest cost smelters in the world are those situated in Canada, before all the Kitimat smelter (owned by Rio Tinto Alcan), due to its low electricity costs.

In contrast with 2012, new Chinese smelters have also joined the group of lower cost smelters, before all in the Northwestern province, Xinjiang, which has low electricity costs (due to low coal prices) and new low cost technology (consuming less than 13,000 KWh per produced tonne of aluminium). Smelters in China have been known as occupying the very top of the cost curve. If taking into account that the aluminium price is several hundred US dollars higher on the Chinese market (Shanghai stock exchange), compared to the LME price, these Chinese low cost smelters (of around US$ 1450 / tonne) have similar profits as the lowest cost smelters in the world (US$ 1100 – 1200 /tonne). Production costs of marginal smelters were also reduced during the last four years, from nearly US$ 3000 to around US$ 2250 / tonne. The highest cost smelters are also located in China, Australia and South Eastern Europe.

Electricity costs vary widely depending on the region, with power tariffs around US$ 20/ MWh in the Middle East, US$ 35-40/MWh in the USA and Europe, and around US$ 55/ MWh in China, after the latest additional subsides on electricity prices were introduced. The Chinese government has again lowered the on-grid coal-fired power tariff by RMB0.03/kWh (US$ 4.6 /MWh), starting from January 1, 2016. According to CRU, China's primary aluminium production based on self-generated power accounted for 62% of total production in 2015. Chinese smelters with their own power plants benefit from weak coal prices in recent years. If coal prices remain weak and the electricity market is no longer constrained, large power end-users, including aluminium smelters, would be able to sign better deals for their power supply.

Smelters using the latest technology consume as little as 12.2-12.5 MWh/t of primary aluminium produced, whereas on average global smelters consume 14.5-15 MWh/t. Many smelters have variable power costs, when rates are a fixed percentage of the LME aluminium price.

The carbon anode manufacturers are mainly exposed to global oil and coal costs. Anodes are made from petroleum coke and recycled carbon mixed with liquid pitch. A significant amount of heat is used as the anodes are baked for 18 to 20 days at over 1,000 °C. As the oil and coal prices have tumbled in recent years, so has the cost base of anode makers.

The highest labour costs in the aluminium industry are in Australia, North America, Norway and in the European Union while the lowest are in China and India. But labour costs fall with higher productivity and between 2010 and 2016, Brook Hunt (Wood Mackenzie) predicted that labour costs would fall by 17% to US$ 89/t of aluminium produced.

New aluminium smelters will naturally be set up in regions where production costs are at the lower end of the spectrum. In the near term, Russia and the Middle East will most likely see new production capacities being built up, whereas in the long term Malaysia, Angola, Paraguay and Greenland could be further candidates.

Production costs of major producers decreasing

The declining aluminium price, lower oil prices and Russian ruble devaluation all helped UC Rusal to cut costs since its energy supply contracts are linked to the LME price. UC Rusal has long term contracts to supply power from low cost hydro power plants in Siberia. At the end of 2015 UC Rusal's production costs fell below US$ 1500 / tonne. Rio Tinto Alcan has similar production costs, thanks to low cost smelters in Canada, powered also by low cost hydro power, with the Kitimat smelter having the lowest power tariff in the world (below US$ 6 /MWh), while its other Canadian smelters pay less than US$ 7 / MWh. Norwegian Norsk Hydro claims it lowered production costs to around US$ 1400 /tonne at the beginning of 2016, down from around US$ 1600 /tonne in 2014, while Alcoa's costs have also probably gone down to around US$ 1600 /tonne by now, following an intensive cost cutting programme and capacity reduction (closure of high cost capacities). Chalco has the highest costs, around US$ 1800 /tonne, of all major producers.

Of the world's 50 highest-cost smelters, 37 are located in China, and the average cost of production in 2015 was US$ 1,918 a tonne, 14 % above the average cost for the rest of the world, which is US$ 1,684 a tonne, according Wood Mackenzie.

The difference between major Western producers and China is that employment, not profit, is the main factor behind the decision of companies and local governments to continue operating smelters despite making losses. Based on the SHFE price in Q1, about 50% of China's aluminium producers were unprofitable and should the price remain at current levels for an extended period, Chinese net capacity additions should start decreasing.

Higher production costs in the future are expected only in the case of higher oil prices (to be reflected upon other commodities in terms of main input costs), but also in extreme situations of higher political tensions and natural disasters, when supplies are being interrupted.

Nalco eyes 68.95L tonnes of bauxite

The Times of India - April 19th, 2016

Koraput: The National Aluminium Company Limited (Nalco) targets to produce 68.25 lakh tonnes of bauxite and 21.50 lakh tonnes of alumina from its mines and refinery unit at Damanjodi in Koraput district during the current fiscal year. "In 2015-16, we broke all our records by producing 63.4 lakh tonnes of bauxite and 19.53 lakh tonnes of alumina at our Damanjodi unit," said chairman-cum-managing director Tapan Kumar Chand.

In the coming years, Nalco will emerge as a global player in mining, metal and energy sectors. There would be a major turnaround in the business plan of the company to meet the turbulent business environment, he added. Chandfelicitated 30 outstanding achievers, including operators to assistant general managers, of mines and refinery unit with CMD Excellence Awards, which carries a cheque of Rs 5,000.

The central PSU has also declared an interim dividend of 25, which is Rs1.25 a share of Rs 5 each, amounting to Rs. 322.16 crore for 2015-16, on the paid-up equity share capital of Rs 1,288.62 crore. Chand presented a cheque, amounting to Rs 260.72 crore to Union steel and mines minister Narendra Singh Tomar as interim dividend on the 80.93% shares held by the government of India in New Delhi on Monday.

In 2014-15 fiscal, the company had declared a total dividend of Rs 451.02 crore. It may be mentioned that since inception, Nalco has paid Rs 5,679 crore as dividend, including Rs 4,860 crore as share of the Government of India.

Bechtel wins $3.5B contract for Aluminium Bahrain expansion

Al Bawaba - April 18th, 2016

Aluminium Bahrain (Alba), the Bahrain-based leading international aluminium smelter, has named International Bechtel as the engineering, procurement, and construction management (EPCM) contractor for its landmark Line Six expansion project.

Under the terms of the contract, Bechtel will be responsible for the design and construction of the sixth potline as well as support industrial services, Alba said in a statement.

The project is expected to cost $3.5 billion.

Alba will be the world's largest single-site aluminium smelter upon completion of the Line Six project, which will boost its production by 540,000 tonnes per annum (tpa), bringing its total production capacity to 1.5 million tpa. Line 6 will have 424 pots that will use the proprietary EGA DX+ Ultra technology thus significantly increasing operating efficiencies.

Alba chairman Shaikh Daij bin Salman Bin Daij Al Khalifa said: "The appointment of Bechtel is a step forward towards delivering the Line Six expansion project, which is a significant milestone for the Kingdom of Bahrain. Alba and Bechtel have a history that spans over 25 years, and we are confident that Bechtel will deliver excellence at all times."

Bechtel president for mining and metals Shaun Kenny said: "Bechtel is grateful and privileged to have been selected to work with Alba to develop the sixth potline. Our shared values of safety and quality, high expectations and pride in achievement have underpinned project success since our first engagement with Alba over 25 years ago, to our most recent, the completion of Line Five in 2005.

"When Alba added Line Five, it was at that time the world's longest potline. We are proud to be working with Alba again to add Line Six, to make Alba the largest single-site smelter in the world and mark another world class achievement for Bahrain, Alba and Bechtel."

Bechtel has extensive industry-specific experience in the region and was previously the EPCM contractor for Alba's Line Four and Five expansions, the statement added.

$40m bauxite mine at Weipa shows promise for 250 jobs next year

The Cairns Post - April 18th, 2016

A NEW $40 million bauxite mine is on track to start production next year with jobs for up to 250 people over the life of the project.

Bauxite Hills, north of Weipa on Western Cape York, has a Direct Shipping Ore resource of 65.3 million tonnes, worth about $3 billion at today's prices, and a mine life in excess of 13 years.

Metro Mining chief executive Simon Finnis said the Environment Impact Statement had been submitted to the Department of Environment and Heritage Protection, another key milestone.

He said it appeared the company was on track to begin mining by September 2017.

"Metro believes final determination of the EIS may be achieved later this year, enabling site construction to start straight after the wet season, and mining operations to commence in September next year," Mr Finnis said.

In January Metro secured native title and land access agreements with the Ankamuthi people and the Old Mapoon Aboriginal Corporation.

The agreement includes a cultural heritage management plan, employment and training opportunities for traditional owners, business development and contracting opportunities for Ankamuthi businesses and payment of mining benefits for the life of the project.

Mr Finnis said Metro expected 200-250 people would be employed during peak production, including a significant indigenous percentage.

In August last year Metro secured an offtake Memorandum of Understanding with Xinfa, one of the largest integrated aluminium companies in China and a major Metro shareholder.

China's imported bauxite demand is expected to double to more than 100 million tonnes a year in a decade.

Metro has launched a takeover bid for neighbouring, unlisted public company Gulf Alumina. To date Metro has gained acceptance for more than 22 per cent of the fully paid ordinary shares in Gulf.

Indonesia's Inalum and Antam to Partner with Chalco on Alumina Plant

Aluminium Insider - April 17th, 2016

PT Indonesia Asahan Alumunium (Inalum) and PT Aneka Tambang (Antam) Tbk have signed a joint venture agreement (JVA) forming a joint venture to build a grade smelter alumina refinery (SGAR) plant in conjunction with AluminiumCorporation of China (Chalco). The new plant is to be named PT Inalum Antam Alumina (IAA). According to reports, the smelting plant will be built in West Kalimantan, Indonesia.

The joint venture formed by Inalum and Antam will be the majority stakeholder in the project, according to Inalum CEO Winardi Sunoto. "Local shares is 51 percent minimum, meaning that we are the majority [shareholders]. Or 55 percent to 45 percent," he said.

Antam will be a forty percent stakeholder in the joint venture IAA, while Inalum will own sixty percent of IAA. Chalco will hold the remaining shares of the plant, which is expected to yield one million metric tons per annumof alumina when completed. Sunoto said that a planned second stage of the project could double capacity in the future.

Antam is expected to supply bauxite to the alumina plant, while Inalum will be the major recipient of alumina for smelting into raw aluminium. Domestic supply of bauxite ore will free Inalum from depending upon imports and foreign-exchange reserves.

Inalum's present capacity is 250,000 metric tons per annum. In order to run at one hundred percent capacity, the plant requires 500,000 metric tons each year. The planned refinery will help Inalum achieve its plans to doublecapacity by the year 2020.

Inalum was founded in 1976 as a joint venture between the Indonesian government and Nippon Asahan Aluminium Co., Ltd. It was originally formed to construct and operate the Asahan Hydroelectric and Aluminium Project that dammed the Asahan River. Inalum became entirely state owned in late 2013.

Antam is a vertically-integrated mining and metals company that was formed in 1968 as a conglomerate of several state-owned mining companies and projects.

Nalco breaks production record of bauxite, alumina: Chand

Web India 123 - April 16th, 2016

National Aluminium Company Limited (Nalco) broke the previous production records by producing 63.40 lakh tonnes of bauxite and 19.53 lakh tonnes of alumina at its mines and refinery during the 2015-16 fiscal.

NALCO CMD Tapan Kumar Chand who felicitated 30 outstanding achievers of both the units ranging from Operators to Assistant General Managers with CMD Excellence Awards at Damonjodi today said now the journey of Nalco has begun which would make the company a truly global player in mining, metal and energy sectors.

Mr Chand said with concerted efforts, in 2016-17, Nalco will achieve the target of producing 68.25 lakh tonnes of bauxite, an increase of 7.1 per cent and 21.50 lakh tonnes of alumina, an increase of 9.2 per cent as comparedto last fiscal.

Describing 2015-16 as the seminal year, the Nalco CMD further said there would be a major turnaround in the business plan of the company to meet the turbulent business environment.

The Company he said was regulating its production to tide over the crisis but now it is is braving it out by augmenting production to beat margin erosion.UNI BD DP AD SHS RAI2258

Vedanta kicks off ramp up of second smelter at Jharsuguda

Business Standard Private Ltd. - April 15th, 2016

The mining major aims to commission two potlines of the smelter to reach a capacity of 0.6 mtpa by the end of this financial year

Diversified metals and mining major Vedanta Resources has initiated the ramp up of its second aluminium smelter at Jharsuguda.

Vedanta aims to commission two potlines of the smelter to reach a capacity of 0.6 million tonne per annum (mtpa) by the end of this financial year. The second smelter with a rated capacity of 1.25 mtpa is located within the product specific SEZ (Special Economic Zone) developed by Vedanta close to the site of its standalone smelter.

"The second smelter at Jharsuguda has been lying idle for three years mainly due to want of power. Now that we have got a favourable order from the state power regulator to use two units (600 Mw each) from our own power plant (of 2400 Mw capacity), we are in a position to expand capacity of this smelter. We have also decided to raise capacity of our second smelter at Korba to 0.5 mtpa. The expansion work on this smelter would take off from April 21", a senior official at Vedanta Ltd told Business Standard.

Vedanta owns two aluminium smelting facilities at Jharsuguda. While the standalone smelter of 0.5 million tonne per annum (mtpa) is running at full capacity, the other smelting unit of 1.25 mtpa capacity, within its product specific SEZ, was running at depleted capacity for want of power.

The company has already invested Rs 12,000 crore on the smelter complex at Jharsuguda. Commissioning of the SEZ facility promised to boost the local economy by generating business potential worth Rs 15,000 crore every year. Direct and indirect employment opportunities for nearly 12,000 persons are set to be created.

In 2015-16, Vedanta logged four-fold jump in aluminium production from 19,000 tonne to 76,000 tonne. Vedanta's overall aluminium output moved up five per cent from 0.87 million tonne (mt) to 0.92 mt by the end of 2015-16.

Alumina production from Vedanta's Lanjigarh refinery was marginally down one per cent last financial year to 0.97 mt as one stream was under shutdown for want of bauxite. Vedanta has approval to expand Lanjigarh refinery to four mtpa and it would be ramped up in phases on further visibility of bauxite sources, the company said in a statement.

In 2015-16, Vedanta imported around one million tonne of alumina and the imports are going to escalate this financial year with the company going for ramp up in smelter capacities.

"Global alumina prices are at the level of $250 and at this price point, it would be sustainable for us to carry on with imports. Also, we are focusing on cost reduction and operational efficiency. Our overall aluminium production cost is $1,477 a tonne while that of Jharsuguda smelter alone is still lower at $1,460 per tonne, making us one of the most cost competitive aluminium producers", he said.

During last financial year, Vedanta's sales of value added products in aluminium business rose seven per cent to 0.2 mt, supporting higher realisations.

ARENA backs plan to use solar energy for alumina smelting

Reneweconomy - April 14th, 2016

A project that could lead to the use of solar thermal technology by Australia's large industrial sector – and cut its reliance on fossil fuels in half – has been selected by the Australian Renewable Energy Agency in its latest round of funding.

Led by the University of Adelaide, the project will work with Australian aluminium giant Alcoa to evaluate the potential for using concentrating solar thermal technologies to generate the industrial process heat used in its alumina refineries in Australia and beyond.

The $15 million project – which ARENA chief Ivor Frischknecht has described as "essential" – was awarded a $4.5 million from the Agency, making it "the biggest project in the round by far."

"This is about turning bauxite into alumina. It uses a huge amount of heat," Frischknecht said at the ARENA funding announcement on Wednesday. "Aluminium refining and smelting is obviously big industry in Australia, so this is about exploring options that use solar thermal to generate that heat, as opposed to vast amounts of gas, or some plants use coal."

The project team – which also includes the CSIRO, ETH Zurich, Hatch, IT Power, UNSW and the San Diego State University – aims to develop the technologies and process knowledge to progressively integrate low temperature CST, solar reforming of natural gas, and high temperature CST into the existing Bayer process.

Ultimately, the goal is to develop technologies to maintain continuous production through hybridisation with solar energy to reduce the use of fossil fuels by up to 45 per cent, cut emissions and hedge against increasingly volatile natural gas prices.

University of Adelaide project leader Gus Nathan told RenewEconomy that the project was important because it was one of the first to test the use of solar thermal in industrial heat generation, rather than the generation of electricity.

"Electricity is less than half the total energy needs in society, and there is currently no commercial demonstration of thermal energy – solar thermal – in the generation of industrial heat processing," Nathan said.

In terms of potential fossil fuel energy displacement, he added, "this is actually bigger than electricity, so it's important. …We're targeting about 50 per cent renewable energy."

Nathan said that while the actual project itself had not formally kicked off, the research and development team had been meeting with Alcoa to get the quoting underway. In the short term, the team hoped to deliver a funding submission for demonstration within two years.

If all goes to plan with the Alcoa project, the implications for industry could be huge, with applications for similar refininf processes including magnesia, zirconia and lime, said Nathan.

"Broadly," he added, "the use of solar thermal is applicable to most chemical processes that use heat – steel, iron, glass, fuels – it's a pathway to broader industry."

Alcoa strikes power deal to keep Intalco aluminium plant open

Mining Weekly - April 13th, 2016

NEW YORK – Alcoa has agreed to a new power deal for its 279 000 t/y Intalco aluminium smelter in Washington state, according to a statement from its power supplier, staving off the closure of one of the last remaining US aluminium plants.

Both sides struck a deal starting on July 1 that would keep 2.5 potlines open at the plant, according to a posting on the Bonneville Power Authority (BPA) website.

The plant was slated to close by the end of June. Alcoa shuttered its 269 000 t/y Warrick smelter at the end of March, bringing US aluminium output to its lowest in more than 65 years as the industry struggles with low metalprices amid rising tensions with China.

Terms of the deal were not disclosed, but the BPA is seeking comment on the agreement by April 22.

Nalco eyes JV route for 5-lakh tn aluminium plant in Iran

Moneycontrol - April 13th, 2016

The state-owned aluminium maker Nalco is considering setting up a 5-lakh tonne per annum aluminium plant in Iran through a joint venture (JV).

Nalco CMD T K Chand, who was part of the delegation led by Petroleum Minister Dharmendra Pradhan to the Islamic country, met a top Iranian official yesterday and discussed the feasibility of setting up such a plant in the Chabahar Free Trade Zone (FTZ), a senior official said.

"Chand met Iran's Mines and Mining Industries Development and Renovation Organisation head Mehdi Karbasian in Tehran over the proposed JV for setting up the plant, which includes a smelter and a gas-based power plant," he added.

The discussions also touched on Nalco's interest to further expand its presence in Iran through more co-operation in bauxite mining and aluminum ingot production, the official said.

The public sector undertaking (PSU) has been scouting for opportunities to set up a gas-based thermal power plant and an aluminium smelter in Iran, Qatar and Oman.

The Navratna firm faces a daunting challenge of keeping operational and raw material costs in check in its bid to stay competitive even as it aims to expand capacity to take advantage of infrastructure boom in India.

It takes around USD 1,500-1,700 to produce one tonne of aluminium, with alumina and power accounting for 40 percent each of the cost and raw materials and others contributing the remaining 20 percent.

Yesterday, Nalco had announced that a task force has been set up by the PSU and Iran's industries ministry to deliberate on the proposed smelter and gas-based power plant in Chabahar FTZ.

The task force, comprising senior officials from Nalco, directors of Iran's Ministry of Industries and executives of Iranian Aluminium Company, has been given three months to submit its report on the feasibility of the project.

Alcoa cuts jobs as earnings fall

RTÉ Commercial Enterprises Ltd - April 12th, 2016

US aluminium giant Alcoa reported a steep drop in first-quarter earnings on tumbling aluminium prices last night as it announced it was cutting as many as 2,000 jobs.

Net income for the quarter ending March 31 was $16m, down 92% from the same time last year. Revenues dropped 15% to $4.9 billion.

Alcoa's results were hit by a 40% drop in alumna prices and a 26% decline in aluminium prices.

The results from the company kick off the quarterly reporting season in the US.

Prices of industrial commodities have been in retreat due to slowing demand from China and other emerging economies. Those effects were partly offset by $364m in cost cuts.

Alcoa also continued to curtail low-efficiency industrial operations, including shutting down a smelter in Indiana and curtailing some refining capacity in Texas.

Alcoa said it had already cut 400 jobs and settled on plans to eliminate another 600. Alcoa is also "evaluating another reduction of up to 1,000 positions," citing tough market conditions.

Its chief executive Klaus Kleinfeld said plans remain on track to divide the company in two, with one division specialising in commodity products and another on value-added products for the aerospace and auto industries.

Alcoa trimmed its forecast for aerospace, projecting 6-8% global growth in 2016, down from 8-9% previously expected.

But it said long-term demand remains strong in the sector.

"Powerful trends continue to drive long-term market strength" for commercial jet airframes and jet engines, Alcoa said.

In automotive, Alcoa said it continues to see global growth of 1-4%, with 1-5% growth in North America.

Chinese Smelters to Ramp Up Capacity: CNIA

Aluminium Insider - April 11th, 2016

The People's Republic of China has ramped up aluminium production on account of a rally in the global price of the metal, according to an interview conducted with a top official at China Nonferrous Metals Industry Association.

Wen Xianjun, deputy chairman of CNIA told Bloomberg News last week that up to half of China's capacity is now profitable. He went on to explain that such restarts were not in violation of the agreement brokered by CNIA, as the deal allowed for some flexibility in production. The December agreement specified that producers would commission no new smelters, keep already idled capacity offline, and increase what it called "production flexibility"to combat a drop in price to a point lower than it has been in six years.

"While we're continuing to limit strictly the addition of new capacity, we're encouraging those who can achieve positive cash flow to restart output because demand is good," Wen told Bloomberg last week.

The news does not come as a surprise to many market observers, as China Hongqiao, the largest aluminium producer on the globe, said last month that it would increase supply this year by sixteen percent, or six million metrictons. The increase was likely a result of China's aluminium production fell in January and February due to suppliers cutting output to slow losses.

Smelters in China's south plan to restore 1.4 million metric tons of capacity this year, including 800,000 metric tons by July, according to CRU Group's chief aluminium analyst Wan Ling. The increased supply could reach the market as early as June, which will place downward pressure on the global market. Wan also pointed out that China idled 3.8 million metric tons last year.

Aluminium was trading at US$1,515 per metric ton on Thursday, having risen almost six percent since late November.

Layoffs Coming at Rio Tinto's Weipa Operations

Aluminium Insider - April 10th, 2016

Anglo-Australian mining giant Rio Tinto Group is warning employees at its bauxite operations at Weipa, Queensland that layoffs are on the horizon. The firm cited declining aluminium prices and increased competition as reasons behind the coming force reduction.

Rio Tinto did not specify exactly how many of the site's 1,400 employees would receive pink slips. According to the firm, the layoffs would not affect employees at nearby Amrun, however they did indicate that some Weipa personnel would be moved to Amrun as it expands its operations.

Gareth Manderson,Weipa operations general manager, told staff they "need to transform our business during 2016 in order to build resilience – irrespective of market cycle".

"The work we have completed together over the past few years to improve our safety performance, productivity and cost position has positioned us well, however global market conditions, increased competitor activity and lower prices (particularly alumina) requires that we continue this work at an increased the pace," he said.

According to reports, Rio Tinto is freezing new and replacement roles.

"In addition, the management team has commenced a detailed review of work programs, organizational structures and budgets," Mr. Manderson said.

"This may result in changes for individuals and teams, and raises the possibility that some of our colleagues will leave Rio Tinto Weipa operations," he said.

"Over the next few weeks your leaders will talk with their teams about the potential impacts of the changes.

"It is important that we recognize why these changes are being made and what we need to do."

Manderson went on to say that Weipa had three focus areas: prevention of fatalities and elimination of injuries, remaining a low-cost producer, and the transition to Amrun operations.

"We must stay ahead of our competitors by continuing to remove waste and improve productivity," he said.

"We need to ensure that we are well-placed to start Amrun operations in a way that meets the needs of our shareholders, customers, workforce and community.

"I acknowledge that this is a difficult time for people in our business and I encourage you to talk directly with your leader about any concerns or feedback you may have."

Rio Tinto warns of job cuts at Weipa bauxite operations

Cairns Post - April 9th, 2016

MINING giant Rio Tinto is flagging job cuts at its Weipa bauxite operations.

The company is not revealing exact numbers, but has written to all personnel, ­warning them of job losses as part of a review to cut costs ­because of falling aluminium prices and competition.

The operation employs 1400 staff and contractors. It is not expected to impact the ­separate $2.6 billion South of Embley expansion, now known as Amrun.

Construction has started on the extension with up to 1100 people to be employed at its peak over three years. Many of the current staff are expected to move to the new operation.

Weipa operations general manager Gareth Manderson told staff they "need to transform our business during 2016 in order to build resilience ­irrespective of market cycle".

"The work we have completed together over the past few years to improve our safety performance, productivity and cost position has positioned us well, however global market conditions, increased competitor activity and lower prices (particularly alumina) requires that we continue this work at an increased the pace.

NALCO registers highest-ever bauxite, alumina production

The Hindu - April 4th, 2016

Overcoming the sluggish market sentiment, National Aluminium Company Limited, a central public sector unit, has performed outstandingly by registering the highest-ever production in bauxite and alumina.

"The company has registered an all-time high production of 63,40,142 tonnes of bauxite in 2015-16 fiscal, which is 10.47 per cent higher, and 19,53,000 tonnes of alumina, 5.51 per cent higher than the corresponding figures of the previous fiscal," the company said in a statement.

According to Tapan Kumar Chand, NALCO Chairman and Managing Director, these are the highest-ever production figures since the inception of the company.

NALCO said the performance assumed significance at a time when 70 per cent aluminium companies the world over had reported loss and the aluminium industry was reeling under heavy pressure due to sluggish international market.

The company remained profitable all through by successfully handling the market downturn by focusing on its bauxite mining and alumina refining arm, besides effecting several cost reduction measures, particularly in metal production, Mr. Chand pointed out. The Navratna PSU also produced 3,72,18 tonnes of metal, registering an increase of 13.79 per cent as compared to the corresponding figure of the previous fiscal, which includes the highest-ever production of 1,01,380 tonnes of wire rods. During the year, the metal sale was also higher by 14.21 per cent at 3,72,424 tonnes and power generation was up by 13.84 per cent at 5841 million units, as compared to the previous year.

NALCO said the mining lease of south, central and north blocks at Panchpatmali bauxite mines of the company in Koraput district had been extended by Odisha up to March 2020.