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Aluminium/Bauxite

Alcoa Sees Record Aluminum Deficit Even as Goldman Predicts Glut – by Joe Deaux and Sonja Elmquist (Bloomberg News – January 27, 2016)

http://www.bloomberg.com/

Alcoa Inc., which is spinning off aluminum assets later this year, sees something that much of the market doesn’t: an end to the prolonged surplus that left prices near a six-year low.

With about half the world’s aluminum plants losing money, the U.S. company that invented the domestic industry more than a century ago says global demand will exceed production this year by a record 1.2 million metric tons, forcing car and appliance makers to draw down inventories. While others predict smaller deficits, many banks including Goldman Sachs Group Inc. and producers like Norsk Hydro ASA say the glut will only get bigger.

Prices tumbled 19 percent last year, the most since 2008, and reduced output has been indicated in China, home to about half the world’s smelting capacity. But energy prices have kept plunging and the yuan is weakening.

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Aluminum Island Offers Cheap Power Oasis Amid Commodities Tumble – by Omar Valdimarsson (Bloomberg News – February 14, 2016)

http://www.bloomberg.com/

Iceland’s aluminum smelters are doing just fine even as the deepest market plunge in about seven years pressures production across the world.

That’s because most of them tap cheap power from the north Atlantic island’s vast stores of geothermal and hydro-power in contracts that are linked to the price of the metal. The island’s three smelters, run by Rio Tinto, Century Aluminum and Alcoa, last year contributed 38 percent of the $15.6 billion economy’s total exports.

“There are about 300 aluminum smelters in the world and there are probably fewer than five smelters anywhere that are paying less for power than Alcoa and Century pay in Iceland,” Ketill Sigurjonsson, chief executive officer of consultant Askja Energy Partners, said in an interview.

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NEWS RELEASE: Rio Tinto and Indspire launch $2 million award program for Indigenous students in Canada

MONTREAL, Feb. 11, 2016 /CNW Telbec/ – Rio Tinto has partnered with Indspire through a $1 million contribution to establish the Rio Tinto Award for Indigenous Students. Rio Tinto’s contribution is being matched by the Canadian government, for a total of $2 million.

Alf Barrios, chief executive of Rio Tinto’s aluminium group stated: “We are very proud to establish the Rio Tinto Award for Indigenous Students through our partnership with Indspire, an Indigenous-led charity that invests in the education of Indigenous people in Canada.”

“Rio Tinto has been invested in Canada for over 100 years and we have a long history of working closely with Indigenous people across this great county. At Rio Tinto, we know just how critical education is to the success of the communities in which we work, and to the success of our business.”

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Bauxite prices boosted by temporary ban on mining in Malaysia – by (Strait Times/Bloomberg – January 26, 2016)

http://www.straitstimes.com/asia

KUALA LUMPUR (BLOOMBERG) – Bauxite mining in Malaysia went on a tear after neighbouring Indonesia banned exports, transforming an industry that hardly existed until 2013 into China’s biggest supplier.

In September alone, China bought a record 3.7 million metric tonnes of Malaysian aluminum-rich bauxite. It was a US$170.8 million (S$244.3 million) windfall for the oil palm-covered hills in eastern Pahang state, where dozens of companies have rushed in, paying smallholder-farmers for their land to be dug up.

Now, chunks of farmland resemble moonscapes of bauxite quarries and dusty rock piles, which some residents, including Pahang royalty, say have polluted the environment. In response, the government halted mining on Jan 15, starting a three-month moratorium to gain control over an industry that has exposed gaps in Malaysia’s mining laws.

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Aluminum stockpiling fund gives glimpse of China metals reforms – by Polly Yam and David Stanway (Reuters U.S. – January 21, 2016)

http://www.reuters.com/

HONG KONG/BEIJING – China’s plans to set up funds to manage coal and steel capacity closures and stockpiling schemes offer nervous markets some clarity on the likely future make-up of the country’s sprawling and predominantly state-run metals and mining industries.

As the world’s largest producer of aluminum, steel and other metals, and the biggest consumer of copper and iron ore, China is crucial to global metals markets which have slumped in the past year as Chinese industrial demand growth slowed.

China’s slowdown has hit revenue at global miners such as BHP Billiton and Rio Tinto, and the market is keen to know what China plans for its own state-run mining and metals giants – many of which have kept producing even as prices drop below the cost of production.

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Bauxite in Malaysia: The environmental cost of mining (BBC News – January 19, 2016)

http://www.bbc.com/

Bauxite mining has become a controversial political issue in Malaysia. As the government implements a temporary ban on extracting the aluminium ore, BBC South-East Asia correspondent Jonathan Head visits the most-affected area.

Amid the monotonous dark green lines of Malaysia’s endless palm oil plantations, there are now vivid red gashes in the hills behind the east coast town of Kuantan. These have appeared only in the past 18 months, as a frenzy of open-cast bauxite mining gripped Pahang province.

Tonnes of bauxite are being transported out of the region. It is the world’s main source of aluminium so is vital for the construction of everything from airplanes to saucepans and cooking foil.

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Alcoa smelter closure to bring U.S. aluminum output to post-WWII levels (Reuters U.S. – January 7, 2016)

http://www.reuters.com/

NEW YORK – Alcoa Inc’s (AA.N) plans to close its 269,000 tonne-per-year Warrick smelter, announced on Thursday, will bring U.S. aluminum output to its lowest level in more than 65 years as the industry endures tumbling prices amid rising trade tensions with China.

Warrick is the largest currently-operating smelter in the United States and the biggest shoe to drop in a string of recent curtailments and closures, potentially boosting prices and possibly bolstering some U.S. producers’ claims they are harmed by subsidized Chinese production.

The Evansville, Indiana plant’s closure, which will take place by the end of the first quarter, will leave Alcoa with just one active smelter: the 130,000 tonne-per-year Massena West plant, which was saved from closure with $70 million in New York state aid.

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Potential Malaysia bauxite ban to chip away at China stockpiles -industry – by Joseph Sipalan and Melanie Burton (Reuters U.S. – January 4, 2016)

http://www.reuters.com/

KUALA LUMPUR/MELBOURNE, Jan 4 A potential suspension on bauxite mining in Malaysia, the world’s top exporter of the aluminium-making ingredient, could dent stockpiles in China but is unlikely to curb breakneck output in the aluminium sector there, industry and analysts said on Monday.

The Southeast Asian nation is pushing to suspend bauxite output due to concerns over its impact on the environment, threatening to interrupt supply to No.1 aluminium producer China, a cabinet source said at the weekend.

The councillor in charge of the environment for Malaysia’s main producing state of Pahang, Mohd Soffi Abd Razak, told Reuters on Monday that Pahang’s chief minister and the national resources minister would make a joint statement on the issue “very soon”.

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Rivers, sea run red in Malaysia as bauxite exports boom – by Joseph Sipalan (Reuters U.S. – December 30, 2015)

http://www.reuters.com/

KUALA LUMPUR – Rivers and the sea ran red in parts of Malaysia this week after two days of heavy rain brought an increase in run-off from the booming and largely unregulated bauxite mining industry.

Demand from China for the aluminum ingredient has fed a rapid rise in bauxite mining in the third-largest state of Pahang, in the east of peninsular Malaysia, and concern is growing about the impact on the environment.

Media on Wednesday showed images of red seas and rivers near the state capital of Kuantan, the center of the industry and the location of a port from which much of the bauxite is shipped.

Reporters said the sea were discolored along a 15 km (9 mile) stretch of coast.

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Rio Tinto to increase aluminium output in 2016 despite global surplus – by Eric Onstad (Reuters U.K. – December 8, 2015)

http://uk.reuters.com/

LONDON – Global miner Rio Tinto (RIO.L) plans to boost aluminium production next year by about 10 percent due to productivity improvements, it said on Tuesday, despite a global surplus weighing on prices.

Hard-hit prices will remain under pressure until loss-making producers slash output, Rio said.

Rio (RIO.AX), one of the world’s biggest producers of the metal used in transport and packaging, told a presentation in London that it targeted output of 3.6 million tonnes in 2016.

“Just what the world needs, more aluminium,” said analyst David Gagliano of BMO Capital Markets in a note.

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Rio Tinto Now Has a Pair of 60-Year-Old Legal Problems in Canada – by Danielle Bochove (Bloomberg News – December 7, 2015)

http://www.bloomberg.com/

Rio Tinto Group has found trouble on both ends of Canada. The global mining giant is being told it can’t skirt a pair of lawsuits that reach back to projects built in the 1950s, a quarter-century before it first set foot in Canada.

On a single day in October, the Supreme Court of Canada cleared the way for separate aboriginal groups to challenge the future operations of a Rio Tinto hydroelectric dam in British Columbia and an iron-ore mine, with accompanying railway and port, in Quebec and Labrador.

The rulings received scant notice during the final days of a dramatic Canadian election that brought Justin Trudeau and his Liberals to power.

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Commentary: The Challenges Are Real, But the US Aluminum Industry Can Still Thrive – by Heidi Brock (Metal Miner – December 3, 2015)

http://agmetalminer.com/

Heidi Brock is the President & CEO of the Aluminum Association, based in Arlington, Va.

Like many industries in the global commodities sector, 2015 has been a bit of a roller-coaster for the North American aluminum industry. From highs, such as the release of the aluminum-intensive Ford F-150, to lows like the announced curtailment of some domestic production, this has unquestionably been a year of ups and downs.

However, some recent chatter and reporting suggesting a “collapse” of the US aluminum business, framing ours as an industry “fighting for its life,” are overblown, misjudged and simply incorrect.

It’s time to take a deep breath, tone down the rhetoric and look at the hard facts.

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Rio Tinto launches $2.6b bauxite push in Queensland – by Peter Kerr (Sydney Morning Herald – November 27, 2015)

http://www.smh.com.au/

Rio Tinto will spend $US1.9 billion ($2.6 billion) growing its exposure to the increasingly lucrative bauxite trade after announcing a redesigned expansion of a massive project in Queensland on Friday afternoon.

Known as the South of Embley project, the expansion has been expected for three successive years, but had so far been deferred by the Rio board.

Rio Tinto chief executive Sam Walsh told Fairfax Media on Friday that the project would have been difficult to approve if it were still in the scope put before the board in 2013, and praised his team for redesigning the project, which has been renamed “Amrun” in a mark of respect to the local indigenous people.

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Elliott Confirms Alcoa Stake, Supports Plans to Split Company – by Sonja Elmquist and Joe Deaux (Bloomberg News – November 23, 2015)

http://www.bloomberg.com/

Normally when an activist investor shows up on a shareholder register it comes with a set of ultimatums. Not with Alcoa Inc., where the arrival of Paul Singer’s Elliott Management Corp. was seen as an endorsement.

Alcoa was the best performer among major metal and mining shares on Monday as Elliott disclosed a 6.4 percent shareholding, saying Chief Executive Officer Klaus Kleinfeld’s plan to split the company in two would “create value substantially above the current share price.”

Elliott, which has sought changes at major companies including Hess Corp. and Samsung Group, built up the Alcoa stake on the assumption that the market was undervaluing its manufacturing business because of the metal price rout, according to people familiar with the transaction, who asked not to be identified discussing non-public information.

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Is the curtain coming down on U.S. aluminum smelting? – by Andy Home (Reuters U.S. – November 24, 2015)

http://www.reuters.com/

LONDON – At the end of the last century the United States was home to 22 aluminum smelters, all but one of them operating.

By the end of this year there will be just eight, of which only four will be producing metal, two of them at reduced rates.

The latest round of closures, led by Alcoa, is happening just as the metal’s usage in the United States is set to experience another quantum leap forward.

Aluminum has made steady inroads against steel in the automotive sector, a process that is going to markedly accelerate with the roll-out of the mass-market F-150 pick-up truck.

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