AluNews - September 2016

Alba board pleased with the progress of Line 6 project

Trade Arabia - September 28th, 2016

Aluminium Bahrain (Alba), the Bahrain-based international aluminium smelter, has been performing reasonably well in light of the market conditions, according to a statement issued by the chairman of Alba's board of directors, Shaikh Daij Bin Salman Bin Daij Al Khalifa.

The statement was made following the third quarterly meeting for this year, held today (September 28) at Alba.

Shaikh Daij said: "We are pleased with the tremendous success of the recent $1.5 billion financing which was the largest corporate loan in the history of the Bahrain. Alba is focused on its future growth strategies and we remain committed to deliver Line 6 on schedule and below the budget."

Alba's Line 6 Expansion Project is one of the largest brownfield developments in the region. Expected to begin production by early 2019, this project will boost the smelter's per-annum production by 540,000 metric tonnes, bringing its total production capacity to around 1.5 million metric tonnes per year.

With a capex of approximately $3 billion, the Line 6 project involves the construction of a sixth pot line utilising EGA's proprietary DX+ Ultra Technology, a 1,792 MW power station and other industrial services.

Bechtel is the EPCM contractor for the Line 6 Expansion Project smelter. For Power Station 5 (PS 5), GE and GAMA Consortium was awarded the EPC contract, while Siemens is the Power Distribution System contractor.

During the meeting, the board approved the minutes of the previous meeting, which was held on June 1, 2016, the half-yearly financial statements as well as 2017 marketing plan.

In addition, the board reviewed reports of the executive committee, board audit committee, and the nomination and remuneration committee while updates were also given on reports related to safety, financial performance, Line 6 Expansion Project, Project Titan Phase II and industry market trends.

In addition to Shaikh Daij, the board comprises six directors appointed by Bahrain Mumtalakat Holding Company - Yousif Abdulla Taqi, Osama Mohammed Al Arrayedh, Fahad Nasser Al-Hazzani, Dr Mohamed Kameshki and Suha Karzoon; two directors appointed by Sabic Industrial Investments Co (SIIC) - Fahad S. Al Sheaibi and Khalid Al-Garni; and two independent directors -- Abdul Aziz Al Humaid and Mutlaq Al-Morished.

Alba currently produces more than 960,000 metric tonnes per annum of the highest grade aluminium, with products including standard and T-ingots, extrusion billets, rolling slab, properzi ingots, and molten aluminium.

Rio Tinto opens the doors of its modernised smelter to the Kitimat community - September 24th, 2016

KITIMAT, BC, Sept. 24, 2016 /CNW/ - Rio Tinto welcomes employees and community members of all ages to visit its modernised Kitimat smelter. Throughout the day, interactive exhibits, family activities and bus tours of the new state-of-the-art facilities are planned.

Gareth Manderson, general manager of Rio Tinto BC Works says: "This smelter represents the next chapter built on our 60 year legacy as a leading aluminium producer here in Kitimat. The modernisation project was the largest private infrastructure investment in BC's history. It has doubled the production of the smelter while reducing overall emissions by nearly 50 percent. Our leading-edge facility is now one of the greenest in the world and produces aluminium with one of the lowest-carbon footprints supporting the rapidly expanding Pacific Rim and North American markets."

Mr. Manderson continues: "It is an honour to share this achievement with the people who made it possible our employees, their families, our local communities, suppliers, contractors and our customers. We are now ready to evolve on the foundation we have created and build a successful and competitive business that will support our employees and communities for years to come."

The modernised smelter clearly illustrates Rio Tinto's commitment to projects that increases our competitiveness through productivity and leverages our unparalleled hydro power position, further reducing our environmental footprint.

Kitimat Modernisation Project

Rio Tinto has been present in British Columbia for over 60 years. Kitimat works is one of the largest manufacturing complexes in the province of BC and is a significant contributor to economic and community sustainability in northern BC. Our aluminium smelter is located alongside a deep-water port immediately south of the community of Kitimat. It has an annual nameplate production capacity of 420,000 tonnes of value-added primary aluminum products.

Government Tells Nalco to Reconsider Foreign Expansion Plans

Aluminium Insider - September 23rd, 2016

India's Mines Secretary said recently that National Aluminium Company should concentrate upon building more smelters domestically in order to take advantage of cheap and readily available power instead of pursuing overseas expansion projects.

"We have asked Nalco to concentrate on making aluminum domestically, rather than exporting alumina," Mines Secretary Balvinder Kumar said in a recent interview. "We want to reduce our dependence on imports."

According to commentators, the refocus upon local smelting is a small part in the government's wider plan to promote domestic manufacturing, encourage exports of value-added goods, and an effort to curtail the shipping of minerals. It may also be a reaction to Nalco's agreement with Iran to explore establishing capacity in that country.

"We have a surplus power generation capacity and prices have come down," explained Kumar. "There is enough demand in the country. Nalco can set up a 2 million ton-a-year smelter in India. Then they don't need to sell alumina to anyone."

The firm settled upon Iran after a search of several Asian countries with cheap power to sell. Nalco has struggled with power costs in recent years, as it was forced to import expensive coal to fire its power plants until very recently, when power capacity finally eclipsed demand, dropping power prices as a result.

"From the government's perspective, they are correct. It's better to process raw materials within the country," said Emkay Global Financial Services Ltd.'s Goutam Chakraborty. "But for Nalco, margins are better for alumina, not aluminum."

Nalco was established in 1981 as a public sector company administered by the Ministry of Mines. It is the largest integrated aluminium complex in Asia, and the sixth largest in the world. The complex conducts bauxite mining, alumina refining, aluminium smelting and casting, power generation, rail and port operations. The main units of Nalco are at Damanjodi (Mines & Refinery complex) and Nalconagar, Angul (Smelter & Power Plant Complex).

Nalco told to rethink overseas expansion plans

Live Mint - September 21st, 2016

The shift in strategy reflects the govt's plan to promote domestic manufacturing, encourage exports of value-added products and curb shipments of minerals

New Delhi/Mumbai: State-run National Aluminium Co. should focus on building more smelters in India to benefit from cheap and abundant electricity supplies rather than pursue overseas expansion, according to federal mines secretary Balvinder Kumar.

"We have asked Nalco to concentrate on making aluminum domestically, rather than exporting alumina," Kumar said in an interview in New Delhi. "We want to reduce our dependence on imports." National Aluminium, or Nalco's, chairman Tapan Kumar Chand didn't answer calls to his mobile phone seeking comment.

The shift in strategy reflects the government's plan to promote domestic manufacturing, encourage exports of value-added products and curb shipments of minerals. Drawn by the availability of cheap power, Nalco in May signed an initial agreement to explore setting up a smelter in Iran, which would be fed with the raw material alumina from the company's refinery in India.

"We have a surplus power generation capacity and prices have come down," Kumar said. "There is enough demand in the country. Nalco can set up a 2 million ton-a-year smelter in India. Then they don't need to sell alumina to anyone."

Nalco scouting

Nalco zeroed in on Iran after scouting for opportunities across energy-rich nations in the Middle East and Southeast Asia. The company had battled high energy costs, having to import expensive coal to produce electricity from its captive power plants. The situation has reversed since then, after India's generation capacity and coal output raced past demand, driving down electricity prices.

"From the government's perspective, they are correct. It's better to process raw materials within the country," said Goutam Chakraborty, a Mumbai-based analyst at Emkay Global Financial Services Ltd. "But for Nalco, margins are better for alumina, not aluminum."

India consumes about 2 million metric tons of aluminum annually, about a fifth of which is imported, Kumar said. Nalco runs a 460,000-ton a year smelter and a 2.2 million-ton a year alumina refinery in the eastern state of Odisha, according to its website. Vedanta Ltd. and Hindalco Industries Ltd. are the other major aluminum producers in the country.

India's daily average spot electricity price was Rs2.7 a kilowatt hour on 20 September, declining from an average Rs7.31 in the year ended 31 March 2009, according to the Indian Energy Exchange, the country's biggest electricity exchange

Aluminium Bahrain increases loan for expansion to $1.5bn

Gulf Business - September 8th, 2016

The company was initially aiming to borrow between $500m and $750m from banks

Aluminium Bahrain (Alba) said on Thursday it had received financial commitments worth $1.5bn from banks to finance its line 6 expansion project.

Alba plans to become the world's largest single aluminium smelter complex, boosting its annual output by 540,000 tonnes to 1.5 million tonnes, by adding a sixth "potline" used to produce the metal from raw materials such as bauxite.

The company was initially aiming to borrow between $500m and $750m from banks, but has decided to raise the amount after strong interest, Alba said in a bourse statement.

The two-part loan will consist of an unsecured conventional tranche of $882m and an Islamic tranche of $618m, and is expected to have a tenor of seven years, Alba said.

It did not specify when the loan would be signed, but said it expected the interest rate to be 325 basis points over the London interbank offered rate.

Bankers had previously said Alba aimed to raise a total of around $3bn to finance the project through various means possibly including an international bond or sukuk issue. After the expansion of the bank loan, it did not say on Thursday whether a bond or sukuk issue might still happen.

Rusal Announces Pair of Senior Appointments in Aluminium Division

Aluminium Insider - September 2nd, 2016

Russian Federation aluminium giant UC Rusal announced two senior staff appointments to its Aluminium Division yesterday.

The firm announced the appointment of Oleg Buts to the position of Managing Director of the Irkutsk Aluminium Smelter (IrkAZ) in southern Siberia. Buts is replacing Evgeny Kuriyanov, who has been named the Managing Director of the Krasnoyarsk Aluminium Smelter (KrAZ) in west-central Siberia.

Buts is an alumnus of Krasnoyarsk State Technical University, where he specialized in Casthouse Equipment and Technologies. He completed a Business Management training course in Production Systems at the Higher Business School at Moscow State University in 2004. Buts began his career in 2001 as a non-ferrous casting operator at Krasnoyarsk Aluminium Smelter. He worked his way up from a regular employee to a senior manager of the casthouse in only four years. Buts then became head of the casthouse business unit at the Sayanogorsk Aluminium Smelter (SAZ), where he managed the implementation of the methods and approaches of the production system at all six plants at the Sayanogorsk industrial site, including SAZ, Khakas Aluminium Smelter (KhAZ), and SAYANAL. He was appointed as Director of Department for Production System Training at Production development Directorate of UC Rusal in 2011, which is the position he held prior to the appointment in question.

Kuriyanov graduated with honors from Irkutsk State Technical University in 2004, where he specialized in Nonferrous Metallurgy. He earned an MBA degree from the Higher Business School at Moscow State University in 2011. Kuriyanov began his career in 1999 at Bratsk Aluminium Smelter as a molten salts' pot operator. From 2004 to 2015, he worked at Krasnoyarsk Aluminium Smelter in a wide variety of positions, including as a pot operator and a Director for Reduction Process prior to his appointment as Managing Director of Irkutsk Aluminium Smelter in 2015.

Chinese tycoon to buy US aluminium maker for $2.33 billion

Business Recorder - September 1st, 2016

A Chinese billionaire has agreed to acquire US aluminium maker Aleris Corporation for $2.33 billion including debt, one of his companies said, the latest overseas take-over by a Chinese firm. Zhongwang USA, an investment firm controlled by Liu Zhongtian, said in a statement it would pay $1.11 billion in cash for Cleveland-based Aleris and take on its net debt of $1.22 billion.

Liu is the founder and chairman of Hong Kong-listed China Zhongwang, which is the world's second-largest manufacturer of industrial aluminium extrusion products, it said. His net worth is estimated at $3.1 billion by American financial publication Forbes. "This acquisition is an international expansion to establish a complementary business foothold," Liu was quoted as saying in the statement. Chinese companies have been snapping up overseas assets in recent years as they try to expand their markets and as their country's economic growth slows.

A US national security regulator has approved state-owned China National Chemical Corp's planned $43-billion take-over of Swiss pesticide and seed giant Syngenta, the two companies said earlier this month, in what would be by far the biggest overseas acquisition by a Chinese firm.

The deal is still subject to approval by a number of other anti-trust regulators around the world. The Aleris deal is intended to help the Chinese tycoon tap into the North American and European markets as the US firm has a partnership with Figeac Aero, a supplier to companies including Airbus, Boeing and Bombardier. Aleris also has 13 production facilities throughout North America, Europe and China, according to a filing with the Hong Kong bourse by China Zhongwang on Monday. But the aluminium industry faces serious overcapacity in China and the European Union Chamber of Commerce in China warned in February that more than 60 percent of the sector has negative cash flow. Zhongwang USA did not specify how the take-over would be funded.