The ENAL Newsletter News Page
Argentina's Aluar signed twenty-year gas supply contracts with Spanish Repsol and domestic Pan American Energy and is ready to start expansion works at its plant in Puerto Madryn in the southern province of Chubut. The expansion project at the plant in Puerto Madryn will require US$650mn in investment and increase production capacity by 35% to nearly 400ktpy from 280ktpy. Construction work at the smelter will add two new 74-cube lines to the six existing ones plus one new rebar line to ease congestion and an anode treatment line. (BNamericas.com - 05/17/05)
Aldoga Aluminium Smelter is banking on Chinese capital and engineering to get its aluminum smelter project back on track. The company reduced its cost estimate to A$1.5 bn. The studies on 420ktpy smelter are expected to be ready next month and financing in October-November, allowing construction to begin by year-end, first production two years later, and full capacity in late 2008. (Dow Jones Newswires - 05/17/05)
Rusal raised a $200-mn unsecured loan from the Paris-based Natexis Banques Populaires to partially refinance its purchase of a 20% stake in Australia's Queensland Alumina. As a result of the deal, the Russian company acquired an additional 770,000mt/year of alumina per year, and has an option to increase this to 1-mn mt/year through further expansion of QAL. (Platts - 05/17/05)
Century Aluminum Company announced that Nordural ehf., a wholly owned subsidiary, signed an agreement with an Icelandic geothermal power producer, Hitaveita Sudurnesja hf., and the municipality of Reykjanesbaer to explore the feasibility of constructing a new aluminum smelter in Helguvik, Iceland, or at another mutually agreeable site. The agreement gives Nordural exclusive rights to the project. First production of primary aluminum would be targeted for 2010-2015. (Business Wire - 05/16/05) Subscribers, click here to read ENAL's Comment on this item
Bahrain entered the record books when Alba new potline five was energised in a record 77 days. The company embarked on the "100-day safe-startup" challenge 77 days earlier in an attempt to achieve the safe commissioning of its new 1.2-kilometre reduction line 5 - currently the longest AP 30 potline in the world - consisting of 336 electrolytic pots - within the record-breaking time of 100 days, smashing the last record set by a smaller smelter, by 80 days. The startup project resulted in over $39 mn savings for Alba. The creation of potline five has expanded the company's annual aluminium production by over 310ktpy, making the company the largest aluminium smelter in the world outside of eastern Europe, with a total output of 830ktpy. (Bahrain Tribune - 05/16/05)
RusAl plans to take part in the expansion of the Kosovo B power plant and construction of the new Kosovo C power plant. The two power plants are seen as a long-term supplier to Montenegro's 120ktpy KAP smelter, for which RusAl is in detailed acquisition talks. By the end of May, RusAl is expected to sign a deal to buy a 65.4% stake in KAP and a 31.8% stake in Rudnici Boksita, KAP's main producer of bauxite. The potential deal would see RusAl buy power from Montenegro for the first three years before switching to the Kosovo power plants. (Metals Insider - 05/16/05) ENAL Subscribers, click here and scroll down for ENAL's Comment
RusAl is considering the opportunity to acquire new bauxite-mining assets. The company is getting ready to sign a memorandum of understanding with the government of Venezuela, where RusAl proposes to set up an alumina plant alongside a bauxite-mining development. The date for signing the memorandum has not yet been settled. Furthermore, a due-diligence analysis of Indian aluminum and ore-mining plants owned by the Vedanta in the state of Rusan is being held. Also, the company is weighing up a number of productive bauxite deposits in Cambodia, Malaysia and Vietnam. The company also launched a joint venture together with the Guyana government for mining bauxites to be refined at RusAl's Nikolayev alumina plant. (The Russia Journal - 05/11/05)
China, poised to cancel tolling and processing of aluminium within three months, will allow more of its largest and most efficient smelters to import their main raw material to cover a looming shortage. But scrapping tolling and processing, allowing smelters to import alumina duty-free as long as they export the end product, would still halve the number of importers in China to about 15. Minmetals, Chalco and six other smelters are the only firms who regularly receive permits to import alumina for processing into aluminium for either domestic or overseas sale. Some of a further 20 smelters currently importing alumina for tolling and processing will soon be granted similar permits. Production under these permits attracts an 8% import tariff on the raw material and a 17% value-added tax on the output, missing out on the tax breaks for imports wholly dedicated to exports. China plans to end tolling and processing, which currently uses about 30% of its imported alumina, to reserve more of its aluminium output. The ban on tolling and processing is expected to be enforced from July 1. Beijing may allow smelters with annual capacity of 100ktpy and approval from the powerful State Development and Reform Commission to join those companies already permitted to import alumina. Smelters that do not meet the requirements would be given time to improve. The State Development and Reform Commission is asking selected smelters to submit information by May 15. Environmental and land permits are also required. The Ministry of Commerce had already selected 11 smelters, including Wanji Aluminium Co., Zhongfu Industry Co. Ltd. and Sanmenxia Tianyuan Aluminum Co. Ltd., as possible importers. The other smelters currently allowed to import alumina not for tolling and processing are Lanzhou Aluminium, Yunnan Aluminium, Jiaozuo Wangfang Aluminium, Baotou Aluminium, Shanxi Guanlu and Qingtongxia Aluminium. Industry sources said the government might allow smelters holding 2005 contracts to extend the provisions until Oct. 1, while smelters with multi-year contracts would be allowed to meet their commitments. (Reuters - 05/10/05)
Malaysia's Cahya Mata Sarawak Bhd signed a memorandum of understanding with two China's engineering companies Luneng Group Co. Ltd and Sinohydro Corp, Cahya Mata to consider setting up an aluminium smelter in east Sarawak state. The smelter is expected to be the main customer for power from a $2.4 bn, 2,400-MW Bakun hydroelectric dam that Malaysia is building in Sarawak. Local tycoon Syed Mokhtar Albukhary has plans for a $2 billion, 500,000-tonne-a-year aluminium smelter in Sarawak, due for completion in 2007, through a joint venture with Arab businessman Mohamed Ali Alabbar. (Reuters - 05/09/05) Meanwhile, from AFX News Limited (05/04/2005), Industrias Metalurgicas Pescarmona SA (Impsa) of Argentina has won a 122 mln usd contract to supply turbines for the huge Bakun hydroelectric dam in Borneo, Asian Wall Street Journal reported, citing people familiar with the matter. The yet-to-be announced contract for four turbines was signed last month after Impsa and its Malaysian partner, Muhibbah Engineering Bhd, beat Alstom SA of France in bidding for the deal, the report said. Alstom, which won a contract to supply turbines for the first phase of the Bakun project three years ago, was widely considered to be the front-runner in the latest competition. But while the French company submitted a bid that was 10 mln rgt, or about 2.6 mln usd, lower, the Malaysian government opted for the Impsa-led joint-venture because it guaranteed that a higher proportion of the contract would be sourced in Malaysia, the Journal cited industry executives as saying. A senior Impsa official based in Kuala Lumpur confirmed the turbine award, but declined to elaborate, the report said. Subscribers, click here and scroll down to read the ENAL Comment"
Diversified mining house BHP Billiton is in talks with Mozambican authorities about the expansion of its Mozal aluminium smelter, with electricity availability seen as the main constraint. General manager Carlos Mesquita yesterday said a feasibility study on the expansion had been completed and BHP Billiton was in talks with the authorities on how and when to proceed with the $500 million (R3.05 billion) project that would boost aluminium production to 750,000 tons a year from 540,000 tons. "Mozal is ready to start the third phase. The site is already prepared. The only constraint we have now is power availability," said Mesquita. The shortage of additional electric power capacity was a major handicap, he said, adding that Mozal already used four times the country's national average consumption. "We are discussing with the Mozambique government the various options and a possible solution for the energy that is required for the extension, but we are confident that we will achieve good results," he said. "From the moment the [additional] energy is available, the expansion project will start and could come on stream in two to three years." The existing Mozal smelter requires about 1,000 megawatts of electricity produced in South Africa. Mozal launched operations in September 2000 producing 250,000 tons of primary aluminium a year. It doubled production with the completion of a phase two expansion project. Mozal has sparked significant gains for Mozambique, helping economic growth average just under 10 percent in the last five years. Mozal and petrochemical firm Sasol's $1.2 billion natural gas plant have been described by the government as "mega projects" and seen by analysts as a boost to one of Africa's poorest, yet fastest growing, economies. Mozal is located in Beluluane, about 20km from Maputo. The settlement is growing into an industrial park fuelled by Mozal's monthly spending of about $11 million on local products and services. "We have invested $7.1 million to bring the gas pipeline to Mozal so the industrial free zone now has electricity, land, infrastructure and gas," Mesquita said. About 1,150 employees, 94 percent of whom are Mozambicans, work for Mozal. BHP Billiton owns 47 percent of the smelter, Japan's Mitsubishi owns 25 percent, the Industrial Development Corporation has 24 percent and Mozambique 4 percent. (05/04/05 - Business Report - Mateus Chale)
Sual and Rusal agreed to become equal partners in the Komi aluminium project which involves the development, construction and operation of a bauxite-alumina. The joint agreement also defines the terms of reference for the second stage of the project to build an alumina refinery 12km from the city of Sosnogorsk with a capacity of 1.4-mil mt/year due to start up in 2008. The companies plan to invest a total of $1.2-bn into the project and the financing is to be made on a parity basis by means of debt and shareholders' capital. (Platts - 04/25/05)
Aluminum of Greece decided to proceed with the construction of a €190mn power plant, while Metka, as expected, is the preferred bidder to construct the plant. The agreement will be approved by the company’s AGM on May 23. The company also decided to lease land within its area in order for Mytilineos to construct its own power plant. ( www.reporter.gr - 04/25/05) Subscribers, click here and scroll down to read ENAL's Comment
Alcoa announced that its Alcoa World Alumina and Chemicals (AWAC) affiliate and the Government of Jamaica have approved plans to immediately expand the Jamalco refinery in Clarendon, Jamaica by 150,000 mtpy as the first phase of the overall 1.5 mtpy capacity expansion. This first phase will cost approximately $77 mn, with the commitment of another $25 mn to finalize detailed engineering on the full project over the next three months. Full production from the first phase is expected by the end of 2006. (Business Wire - 05/05/05)
Alcoa is examining a possibility to build a 300ktpy smelter in Brunei. The raw materials would most likely come from Western Australia. The company will make the final investment decision in the first or second quarter of 2006. (Brudirect.com News - 05/04/05)
The Carnegie analyst John Olaisen predicts that Hydro will spin off its aluminium division in the same way it did with its fertilizer operations. The division is being prepared for divestment in the first instance by expanding Hydro Aluminium's refining in Mexico and India to counteract the problems in Europe where costs are high and growth low. The company is planning to invest NKR 2 bn (US$ 317mn) in a new aluminium plant plus associated gas power generation. (Asia Intelligence Wire - 05/03/05) Subscribers, click here and scroll down to read ENAL's Comment
Anxiety over the privatisation of ALSCON has begun signalling possibilities of another botched attempt. The latest fear stems from information that Rusal, earlier disqualified from the bid process, may have received the nod of the Federal Government to acquire the plant at $160 mn, a price far below the $410 mn BFI Group Corporation of America had offered to pay as preferred bidder. The latest round of controversy has the National Assembly angered by what it called uncompetitive method adopted in the selection of Rusal as the core investor. BFI Group is said to have petitioned the US State Department for Commerce over alleged anti-American action exhibited by Nigerian Government for denying it the take over of ALSCON. Privatisation analysts expressed fears that the purported sale of ALSCON to Rusal might still fail as the proposed probe by the House of Representatives was likely to make the environment hostile for any new operator of the plant. (This Day - 05/02/05)
RUSAL has aggressive plans to expand its refining of the intermediate product alumina to match its rapidly growing smelting business. Under a 10 year strategic development plan adopted by company's management last year RUSAL will nearly double its metal output to 5 mn tonnes in 2013. It aims to boost alumina output to 8 mn tonnes from 3.1 mn in 2004. The main increase by 2008 is expected to be provided by Australia's Queensland Alumina (QAL) in which RUSAL purchased a 20% stake last year. This year RUSAL will receive just 60,000 tonnes of QAL's alumina, but after the existing QAL supply contracts start to run out, RUSAL will receive 580,000 tonnes in 2006, 650,000 in 2007, and 770,000 per year from 2008. RUSAL expects to commission in 2008 the first stage of a new unit at its Friguia refinery in Guinea, which will increase its capacity to 1.5 mn tonnes in 2009 from around 780,000 now. New facilities will be launched in 2008 at the Mykolayiv refinery in Ukraine which will raise capacity to 1.6 mn tonnes in 2009, from current 1.3 mn. Prior to that in 2007, RUSAL will upgrade its Russian Achinsk refinery for it to produce 1.1 mn instead of 1.06 mn now. The company is also examining building a refinery in Guyana, where it is involved in bauxite mining. It is in talks with Venezuelan and Indian authorities on involvement in alumina production in those countries. It also plans to bid at a tender to develop a 500 mn tonne Aurukun bauxite deposit in Australia. (Reuters - 04/29/05)
Mozambique is seeking investors to build a 1 400 megawatt hydropower plant on the country's Zambezi River. The planned plant at Mphanda Nkuwa would add to the Cahora Bassa station, which lies upstream of the new site and is sub-Saharan Africa's largest hydropower station. Mozambique needs to meet growing demand at home from a planned titanium plant and a possible future expansion to an aluminium plant. ( www.businessreport.co.za - 04/25/05)
Ukraine's State Property Fund wants to re-nationalize the country's aluminium smelter Zaporizhsky Alyumineyvy Kombinat (ZALK) because the Russian owner failed to meet its obligations. The plant was sold in 2001 to a unit of Russian car maker AvtoVAZ . Should obligations on Zalk not be implemented, the Fund will return the company to the state property fund. Earlier this month SUAL bought 69% in the Ukrainian smelter from AvtoVAZ's investment arm. (Reuters - 04/26/05) Subsribers, click here and scroll down to read ENAL's Comment.
Noranda Aluminium achieved a new long-term power deal for its 250ktpy New Madrid smelter in Missouri. The deal with AmerenUE, a unit of St-Louis based power generator Ameren Corp, will start on Jun 1 and run for a minimum of 15 years. (Metals Insider - 04/25/05) Subscribers, please click here and scroll down to read ENAL's Comment.
Aluminum of Greece decided to proceed with the construction of a €190mn power plant, while Metka, as expected, is the preferred bidder to construct the plant. The agreement will be approved by the company’s AGM on May 23. The company also decided to lease land within its area in order for Mytilineos to construct its own power plant. ( www.reporter.gr - 04/25/05)
Sual and Rusal agreed to become equal partners in the Komi aluminium project which involves the development, construction and operation of a bauxite-alumina. The joint agreement also defines the terms of reference for the second stage of the project to build an alumina refinery 12km from the city of Sosnogorsk with a capacity of 1.4-mil mt/year due to start up in 2008. The companies plan to invest a total of $1.2-bn into the project and the financing is to be made on a parity basis by means of debt and shareholders' capital. (Platts - 04/25/05)
Norsk Hydro will not sell its aluminum plant in Hoyanger after all. The company failed to find a buyer who would agree to its requirements to modernize and extend the plant. ( Dow Jones Newswires - 04/25/05) Subscribers, click here and scroll down to read ENAL's Comment.
Smelters and officials from aluminium-producing provinces, such as Henan, are lobbying the central government to allow smelters holding overseas tolling and processing contracts to finish their commitments. About 30% of China's alumina imports are bought for tolling and processing, which allows smelters to import the raw material duty-free before exporting the finished product. For non-tolling and processing business, China charges an 8% tariff on alumina imports, as well as 17% value-added tax. In order to cover a domestic shortfall, the government was also considering allowing more smelters to import alumina. At present only seven of China's more than 100 aluminium producers consistently receive permits for importing alumina. Beijing has banned smelters with capacity under 100ktpy from directly importing alumina for tolling and processing. The ban includes smelters using outdated technology or built after April 2002 without central government approval. (Reuters - 04/25/05)
Aiming to cool its power-hungry aluminium sector, China will retain a low-tariff policy until the third quarter of 2005, enabling many smelters to avoid immediate closure. The delay in ending tolling and processing provisions will prompt smelters to export large amounts of the metal in the next few months and rush to import alumina, their main raw material. (Reuters - 04/25/05)
ABB received an order from Brazil worth $30 mn to supply three industrial substations, including the largest turnkey substation ever for an industrial customer in the country. The contract, by aluminium producer Companhia Brasileira de Alumínio (CBA), will sharply increase production at a CBA smelter in the state of Sao Paulo. The 750 MVA substation will provide power for an additional furnace room, so that CBA can increase its primary aluminium production to 460ktpy. ABB is already supplying CBA with a 230kV substation and rectifiers for another furnace room that is due to commence operation in May 2005. (The Engineer Online - 04/25/05)
Rio Tinto may team up with Cahya Mata Sarawak Bhd, a Malaysian construction and financial services group, to build a $US2 bn aluminium smelter in eastern Sarawak state, on the island of Borneo. The company is studying the tax incentives that could justify the capital investment. The smelter would use most of the power from the nearby $US1.2 bn Bakun hydroelectric 2400-megawatt dam project, under construction in the Borneo jungle. This project is controversial because of its potential environmental impact and the potential impact on the region's native Penan people. Several other companies have expressed interest in building a smelter, including Chinese power producer Shandong Luneng Group, and Smelter Asia Sdn Bhd, which is owned by Malaysian businessman Syed Mokhtar Albukhary and Dubai-based businessman Mohamed Ali Alabbar. BHP Billiton was no longer interested in the project, the report said. (The Age - 04/24/05)
Croatian aluminium smelter Tvornica Lakih Metala (TLM) widened its net loss by 56 mn Croatian kuna ($9.79 mn/7.58 mn euro) to 218.8 mn kuna ($38.25 mn/29.6 mn euro) in 2004. The company increased its revenue by 48.2% to 806 mn kuna ($140.91 mn/109.04 mn euro) in 2004. Domestic operating revenue rose by 3.7% to 148.6 mn kuna ($25.98 mn/20.1 mn euro). The company doubled its operating revenue to 593.1 mn kuna ($103.69 mn/80.24 mn euro). TLM's costs rose by 45% to over 1.0 bn kuna ($174.82 mn/135.29 mn euro). The Croatian Government owns 86% in TLM, which will be privatised by the end of 2005, ( www.seeurope.net - 04/22/05) Subscribers, click here and scroll down to read ENAL's Comment
The mystery group which controls Gladstone's stalled $2 bn Aldoga aluminium smelter teamed with Queensland miner Metallica Minerals to fund development of the company's bauxite deposits on Cape York Peninsula. Under a complex non-binding memorandum of understanding, Metallica plans to raise $1.86 mn through a placement to Anegada Metals Corporation. Anegada will emerge with 9.3 mn Metallica shares equating to about 13% of its expanded capital and a seat on the board. Metallica intends to then lend $1.5 mn to its own subsidiary Cape Alumina Pty Ltd to fund an accelerated drilling program and scoping study on its Weipa bauxite project. Under a separate leg of the deal Anegada will sell its 100% stake in Aldoga Minerals (which owns its West Australian exploration rights) to Cape Aluminium. Anegada Metals Corp is a wholly owned British Virgin Islands subsidiary of Transal Holdings controlled by Uzbekistani industrial tycoon Azam Aslanov and his two sons, Amon and Firkat. The company is the major shareholder in the Aldoga Aluminium Smelter project and owns 80% of Aldoga Minerals – the balance of which is owned by Aldoga's original promoter John Benson. (The Courier Mail - 04/22/05) Subscribers, click here and scroll down to see ENAL's Comment
According to industry sources the state-controlled Chalco is in talks with Shanxi Guanlu Co. Ltd. and Jiaozuo Wanfang Aluminium Co. to take a controlling stake in the respective smelters but was not pursuing it aggressively. Shanxi Guanlu has annual capacity of 330ktpy of primary aluminium and Jiaozuo has 204ktpy. (Reuters - 04/22/05)
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