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Aluminium/Bauxite

Ford bets it all on aluminum-bodied F-150, which heads to dealers next month – by Dee-Ann Durbin (The Associated Press/Windsor Star – November 12, 2014)

http://www.windsorstar.com/index.html

DEARBORN, Mich. – Russell Barnett, a Ford dealer in Tennessee, is ready for aluminum.

Ford is using the metal almost exclusively in body of the 2015 version of its bestselling F-150 pickup, which starts arriving at dealerships next month. Barnett is already answering customers’ questions about the truck. And he’s updated his repair shop not only for the F-150, but in anticipation that other Ford brands such as the Mustang will eventually make the switch from steel.

But, just in case, he ordered some extra steel-bodied 2014 pickups.

“There will be some people who won’t want to change for a while,” says Barnett, who says pickups make up around half of the annual sales at his dealership in rural Winchester.

Ford is doubling down on aluminum, which is lighter — and more expensive — than steel but just as tough. The new truck is the company’s response to customers’ requests for a more fuel-efficient and nimbler pickup. Ford hopes the advantages outweigh customer doubts about the durability of aluminum or potential repair costs for the pricier metal.

It’s a big risk. So far this year, one out of every three vehicles Ford sold in the U.S. was an F-Series pickup. Morgan Stanley estimates F-Series trucks account for 90 per cent of Ford’s global automotive profit.

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COLUMN-Chinese stockpiles mean bauxite may not be a sure bet – by Clyde Russell (Reuters India – October 29, 2014)

http://in.reuters.com/

LAUNCESTON, Australia, Oct 29 (Reuters) – Bauxite is one of the few natural resources to attract positive commentary amid the sharp falls in many commodities in the past few months.

Certainly the outlook appears quite constructive for the mineral used to make alumina, which in turn is the primary ingredient for aluminium.

Indonesia produced about 12 percent of the world’s output and was the top supplier to China prior to Jakarta imposing a ban on exporting raw mineral ores in January.

The Ebola outbreak in West Africa appears to have had a limited impact on shipments from Guinea, so far, but the risk of disruption rises as long as the deadly disease remains prevalent in the region.

Also, much of the planned new supply is in West Africa, including major projects in Mali, and the longer the Ebola crisis endures, the more likely delays and cost overruns become.

Throw in signs that, excluding China, aluminium demand is rising as the U.S. and other economies recover, while Chinese aluminium output remains robust, and it’s not hard to see bauxite as a shining light in the commodity firmament.

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COLUMN-Why China blurs the global aluminium picture – by Andy Home (Reuters U.S. – October 27, 2014)

http://www.reuters.com/

Oct 27 (Reuters) – Is the world aluminium market in a supply-demand deficit or surplus? It’s a simple enough question but an extraordinarily difficult one to answer.

That much was clear at last week’s LME Seminar. Two respected bank analysts, Citi’s David Wilson and Natixis’ Nic Brown, offered diametrically different views.

Deficit, according to Brown, and one that will steadily increase over the next two years. Surplus, according to Wilson, with no sign of deficit until 2017 at the earliest.

Calculating supply-demand balances in any industrial metal is a tricky business, but the problems are compounded in aluminium.

There is, for example, no aluminium equivalent to the International Study Groups that do so much of the statistical leg-work in the copper, zinc, lead and nickel markets. The International Aluminium Institute (IAI) releases monthly production figures but only for primary metal, leaving the secondary scrap component of the supply chain shrouded in statistical darkness.

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Alcoa earnings beat forecasts, propelled by higher aluminum prices – by Allison Martell and Nicole Mordant (Reuters India – October 9, 2014)

http://in.reuters.com/

REUTERS – Alcoa Inc (AA.N) reported a stronger-than-expected increase in third-quarter profit on Wednesday as higher aluminum prices and lower costs drove a recovery in its business unit that produces aluminum.

In an interview, Alcoa Chief Executive Klaus Kleinfeld said the “upstream” raw materials business had its best quarter since the 2008 economic slump. “Our performance this time is more great proof that our strategy is working,” he said.

The aluminum company traditionally has been one of the first S&P 500 companies to report quarterly results, and some see it as a bellwether for the broader U.S. economy because it supplies major industries such as auto and airplane manufacturing.

Alcoa’s stock rose 2 percent in after-hours trading to $16.42. It is up 50 percent this year, outperforming the market and aluminum prices.

In the third quarter, Alcoa’s net income rose to $149 million, or 12 cents a share, from $24 million, or 2 cents, even as it took restructuring charges for smelter closures.

Alcoa’s growing business making specialized goods for automotive and aerospace customers has helped offset a weak market for less-processed aluminum. The company has also been working to improve costs.

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[South African] Smelters need support to survive – by Mark Allix (Business Day Live – September 4, 2014)

http://www.bdlive.co.za/

SMELTERS and foundries need support if they are to survive. As a start, Eskom has to sort out its electricity supply problems, and government’s R4-trillion infrastructure plan needs to get under way soon.

Better still, the private sector should be encouraged to provide more traditionally sourced energy. BHP Billiton has turned off its Bayside aluminium smelter in KwaZulu-Natal. Smelting costs too much, even though the company has a hugely preferential electricity pricing agreement with Eskom.

Bayside, BHP Billiton’s Hillside aluminium smelter and the Mozal smelter near Maputo in Mozambique together used about 9% of South Africa’s total electricity output.

A chunk of state infrastructure funding is being spent on building new energy capacity — mainly the delayed Medupi and Kusile coal-fired power stations, but also the Ingula hydropower project in KwaZulu-Natal.

The manufacturing sector is under pressure from strikes, above-inflation wage and increases in administered price, as well as poor maintenance and development of infrastructure.

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Rio Tinto’s Kitimat aluminum smelter upgrade price tag rises to US$4.8 billion – by Ross Marowits (Canadian Business – Aug 7, 2014)

 http://www.canadianbusiness.com/

The Canadian Press – MONTREAL – Rio Tinto will pump another US$1.5 billion into the aluminum smelter upgrade at Kitimat, B.C., increasing the total project cost to US$4.8 billion, as the mining giant says it remains confident about long-term fundamentals about metal demand.

The London-based company announced Thursday that its board has approved a further $1.5 billion expenditure to complete the modernization. That’s on top of $400 million that was previously allocated but unspent.

Rio Tinto Alcan’s former CEO Jacynthe Cote had said that difficulty in finding the right workers pushed the project off schedule and over budget.

There are about 1,100 employees at Kitimat and nearly 3,000 people working on the smelter upgrade, which is expected to start metal production in the first half of 2015.

Engineering, procurement and construction is 70 per cent complete but construction is only half finished, spokesman Bryan Tucker said Thursday.

The company announced in 2011 that it would upgrade the aging Kitimat smelter, boosting its aluminum production capacity by more than 48 per cent to about 420,000 tonnes per year.

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RPT-COLUMN-China aluminium surplus likely to cap price rally – by Clyde Russell (Reuters India – July 22, 2014)

http://in.reuters.com/

Clyde Russell is a Reuters columnist. The views expressed are his own.

LAUNCESTON, Australia, July 22 (Reuters) – Rising Chinese output is likely to act as a brake on aluminium’s 15 percent rally since May, even as the global outlook for the industrial metal improves.

It’s no secret that much of Chinese aluminium smelting capacity operates at a loss and is reliant on subsidies from local and regional governments to survive.

But the price gain in the second quarter resulted in capacity that was either idled, or about to be shut, remaining in operation, according to a July 17 report from Beijing-based consultants AZ China.

This is despite some 80 percent of Chinese smelters, representing some 20 million tonnes of annual capacity, operating at a theoretical loss, AZ China said.

The average cash cost for a Chinese aluminium smelter in the second quarter was 14,161 yuan ($2,282) a tonne, above the Shanghai Futures Exchange (SHFE) spot price of 13,435 yuan, the report said.

Still, the average cash cost for Chinese smelters was 2 percent lower in the second quarter than the first as inputs such as electricity and alumina decreased in price, allowing plants to remain in business.

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B.C. claims privilege on Kitimat report – Wendy Stueck (Globe and Mail – July 13, 2014)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

VANCOUVER — In an ongoing tussle over the Kitimat Airshed Study, lawyers representing two women in an Environmental Appeal Board case have asked that agency to force the province to turn over the study or explain its claim of cabinet privilege.

The study, which the province commissioned last year to weigh the impact of industrial emissions on the Kitimat Airshed, has yet to be publicly released, even though some groups interested in its conclusions – including the District of Kitimat – had expected to see it before the end of June.

Now, the report is the subject of a tug-of-war between the province and appellants in the EAB case, which concerns sulphur dioxide emissions from the Rio Tinto Alcan smelter in Kitimat. The province says it received a draft of the Kitimat Airshed Report in March and that it is “now part of discussions around cleanest LNG requirements” and will be released later this year. For now, however, the government says the report is being discussed by cabinet and subject to Crown privilege.

Emily Toews and Elisabeth Stannus – the appellants in the EAB case – would like to see the report now, maintaining it would provide the most up-to-date information about industrial emissions in Kitimat.

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Alcoa pledges finished products push as results beat Wall Street – by Nicole Mordant (Reuters U.S. – July 8, 2014)

http://www.reuters.com/

(Reuters) – Alcoa Inc’s (AA.N) chief executive officer said on Tuesday the aluminum company would push deeper into the market for more profitable finished products like truck wheels and aircraft fuselages as it reported quarterly results that beat analysts’ expectations.

At the same time, CEO Klaus Kleinfeld said Alcoa was focused on cutting costs and improving the performance of its traditional commodity business, which has been hit by weaker aluminum prices.

Alcoa’s shares rose as much as 2 percent in after-hours trading. The company’s stock price is up nearly 40 percent this year.

“The transformation of Alcoa truly is in high gear and the results show this. Our strategy is working,” Kleinfeld said on a conference call.

Alcoa’s strategy to boost value-added fabricated product output and broaden its footprint in other light-weight materials like nickel, titanium and lithium has partially offset the pain of prolonged weak underlying primary aluminum prices on the London Metal Exchange CMAL3, which have been close to or below breakeven for many smelters over the past year.

Alcoa has idled or permanently closed loss-making smelting capacity as it ramps up its smelter complex in Saudi Arabia, which will be the world’s lowest-cost.

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RPT-After 125 years, Alcoa looks beyond aluminum – by Allison Martell (Reuters India – June 27, 2014)

http://in.reuters.com/

(Reuters) – Alcoa Inc, the company that helped create the aluminum industry more than a century ago, is reinventing itself as a manufacturer of specialized components for aerospace and automotive customers, including some that contain no aluminum at all.

The company’s deal for jet engine part maker Firth Rixson, which uses little aluminum, is its biggest move yet to escape the terrible primary aluminum market by crafting the parts its customers need, even if they are made of nickel or titanium.

It announced the proposed $2.85 billion deal to buy Firth Rixson earlier on Thursday. Alcoa talks constantly about expanding its downstream businesses, which sell truck wheels, aircraft parts and other goods. Now it is rebranding itself in ways that would have seemed unthinkable just a few years ago.

“We are really material-agnostic,” Chief Executive Officer Klaus Kleinfeld said in an interview on Thursday. “We love, internally, that we have fights over what is the right material, in front of our customers, together with our customers.”

From an upstart, this would be one thing. But Alcoa has been synonymous with aluminum since 1888, and it has a role in every part of the sector: mining bauxite, refining it into alumina and smelting alumina to create aluminum.

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Indonesian miners delay alumina refinery plans on legal uncertainty – by Wilda Asmarini and Yayat Supriatna (Reuters India – June 19, 2014)

http://in.reuters.com/

(Reuters) – Bauxite producers are delaying plans to build alumina refineries in Indonesia due to legal uncertainty over a mineral ore export ban imposed five months ago, government and industry officials said.

Indonesia’s Constitutional Court has yet to decide on a legal challenge against a Jan. 12 export ban on bauxite, nickel and other mineral ores imposed by the government to force miners to build refineries and processing plants.

Before the ban, Indonesian bauxite exports accounted for about 12 percent of global aluminimum production, with China taking the bulk of shipments for processing into alumina, an intermediate stage in the production of aluminium.

As many as five alumina refinery projects are underway in Indonesia, industry officials said, but the legal uncertainty means firms have slowed their construction plans for the refineries, which can cost as much as $1 billion each.

“They are worried if the court allows exports again, bauxite producers will be able to resume shipments of raw materials. Investors want the ban to remain,” Dede Suhendra, Mineral Enterprise Director at the mining ministry, told reporters.

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Aluminum industry must think beyond cars for long-term growth, says demographer – by Ross Marowits (Canadian Business Magazine – June 3, 2014)

http://www.canadianbusiness.com/

The Canadian Press – MONTREAL – A rapidly aging population means the aluminum industry needs to look beyond the high demand for lightweight cars if it wants to grow long into the future, a Canadian demographer said Tuesday.

University of Toronto economics professor David Foot told an aluminum conference that spending patterns will shift as people age, potentially impacting the long-term demand for the metal.

“When we get into our 60s and 70s, we drive our automobiles a little less, we fly a little less, so some of the current uses of aluminum which are great, are not going to be long-term growth prospects,” he said in an interview.

The aluminum sector foresees “game changing” demand from planes, trains and automobiles, which are increasingly using the metal to lower the weight and improve fuel efficiency and environmental emissions.

For instance, automaker giant Ford already plans on reducing the weight of its F-150 pickup truck by increasing the amount of aluminum used to 315 kilograms from 45 kilograms on current models.

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Rio Tinto leader Ray Ahmat cuts a trail for others – by Sarah-Jane Tasker (The Australian – May 31, 2014)

 http://www.theaustralian.com.au/business

RAY Ahmat, the first local Aboriginal superintendent at Rio Tinto Alcan’s bauxite mine in Weipa, has outlined the opportunities to develop local talent after taking out a top award at an industry function.

Mr Ahmat received the Overall Indigenous Award at the Queensland Resources Council’s Indigenous Awards last night for his contribution as a role model in the state’s sector.

He leads a large operational team of more than 170 people at the mine, on the Western Cape of York Peninsula in Queensland, managing pre-mining and post-mining activities.

Mr Ahmat, born and bred in the region, said his parents were strong role models in his life. His father had worked at the mine for 32 years and his mother spent 28 years at the operation.

“I got to where I am to seeing what they did,” he said. Mr Ahmat, who is a Yupungathi traditional owner, joined the miner 15 years ago as a truck driver before moving up the chain to superintendent — a path he hopes he can encourage others in his community to follow.

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Jacynthe Côté exiting as head of Rio Tinto’s aluminum unit – by Bertrand Marotte (Globe and Mail – May 28, 2014)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

MONTREAL — Jacynthe Côté, Rio Tinto Ltd.’s head of aluminum operations, is stepping down. The Anglo-Australian global mining giant said on Tuesday that Ms. Côté is leaving Montreal-based Rio Tinto Alcan “for personal reasons to pursue other interests.”

She is being replaced by BP PLC veteran Alfredo Barrios, 48, the executive director and executive vice-president (downstream) at joint venture TNK-BP, one of Russia’s largest vertically integrated oil and gas companies. Ms. Côté was promoted to the job in 2009, two years after her predecessor – Richard Evans – presided over the huge $38-billion takeover of Alcan Inc. by Rio Tinto.

“Jacynthe has long been a key member of Rio Tinto’s leadership team and has enjoyed a successful career with Rio Tinto and Alcan spanning more than 25 years,” said Rio Tinto chief executive Sam Walsh.

“The ongoing improvement in the performance of the Aluminium business is testimony to her commitment to the business throughout her career.” Under Ms. Côté’s watch, aluminum prices fell dramatically, forcing significant cost-cutting measures and job cuts at head office and elsewhere.

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Côté’s exit leaves Rio Tinto at crossroads – by Sophie Cousineau (Globe and Mail – May 28, 2014)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

It is a bittersweet end to Jacynthe Côté’s distinguished 26-year career at Rio Tinto Alcan.

The Laval University-trained chemist who rose through the ranks at Alcan became head of Rio Tinto’s aluminium business in January, 2009, just as the financial crisis was ripping through the world economy. No other woman had accomplished such a feat in the company’s 112-year history.

On the day she was appointed, though, she announced the closing of the Beauharnois, Que., smelter she once directed, and that pretty much set the tone for her five-year term. As aluminium prices fell and Rio Tinto suffered from an acute case of buyer’s remorse over its $38.1-billion (U.S.) acquisition of Alcan – in cash no less – Ms. Côté closed smelters, laid off employees and turned every rock she set her eyes on to cut the producer’s costs.

Last year, the unit’s underlying earnings, at $557-million, were 10 times higher than in 2012. Now that the worst of the mining downturn appears behind Rio Tinto, Ms. Côté is leaving the company’s aluminium unit to “pursue other interests.” However, her replacement by BP veteran Alfredo Barrios as chief executive comes at a time when Alcan’s future within Rio Tinto is clouded.

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