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Hindalco unveils expansion plans |
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While the Vedanta group's alumina/ bauxite project got stuck in environmental issues, the Aditya Birla Group's flagship company Hindalco Industries has earmarked a capital expenditure of Rs 40,000 crore between 2012 and 2014 on the company's greenfield projects for aluminium and alumina capacity expansion. The projects include the Utkal alumina project, Mahan project, and Aditya Alumina and Jharkhand alumina project, said Kumar Mangalam Birla, Chairman, Aditya Birla Group.
However, for the current financial year, the company plans to spend about Rs 10,000 crore and an amount of Rs 11,000 crore in the following year for the said expansion, Birla said on the sidelines of the company's Annual General Meeting (AGM). He said that the amount of the Capex would be raised by the way of debt. The company's current debt level stands at Rs 12,172 crore.
“The capex is on account of our ongoing expansion programme, which should be commissioned between 2012 and 2014. The Utkal project offers the potential to scale up to 3 million tons per annum (MTPA) at relatively low incremental capital cost,” he said. Moreover, he said that it is constantly looking at ways to increase promoters' stake in the company. “The robust growth prospects of the aluminium industry in India made investment in Hindalco attractive.” Birla added. |
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Jobs to be created at Cork aluminium plant |
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New jobs will be created with the expansion of a firm that designs aluminium window and door systems.
Batt O'Keeffe, Minister for Enterprise, Trade and Innovation, made the announcement at the opening of a new EUR eight million aluminium extrusion plant in Architectural and Metal Systems based in Little Island, Co Cork.
AMS have opened a new extruded aluminium plant the first of its kind in Ireland. Recruitment is now underway at the plant, which AMS says is the first of its kind in Ireland. The new plant will give the company control of extruded aluminium, a raw material that Irish firms have imported until now.
Announcing the 31 jobs, O Keeffe described AMS as an ambitious export led Irish firm that put innovation at the heart of its business growth model. He said that the economic recovery will be export led and AMS' expansion plan is a paradigm other Irish firms should follow with Government support as they continue to tackle unemployment, create jobs, drive competitiveness and return to growth.
Chris Martin MD of AMS said, “This gives AMS a unique level of flexibility which is unrivalled in Ireland and very rare in Europe or the UK.” |
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Copper usage to grow at a slower pace |
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Copper usage in China may grow at a slower pace this year as real estate curbs cut demand. Yang Changhua Senior Analyst, at Beijing Antaike Information Development Company said that consumption of the metal used in appliances and construction is expected to expand 11 percent to 6.2 million tons this year compared with 14 percent growth last year. The main contributor to the slowdown will come from the construction sector as the real estate market cools.
China's banking regulator told lenders last month to assess the impact of a property price drop of as much as 60 percent underscoring concern that the government may take additional steps to cool its real estate market. Previous stress tests carried out in the past year assumed home price declines of as much as 30 percent.
Zhu Bin, President of Research at Nanhua Futures Company said that Antaike's forecast for slowing consumption growth is expected; given the outlook for copper products output this year. Zhu said that even though demand from appliance makers and wire-and-cable manufacturers has been robust this year, copper-products output is expected to rise 16 percent this year compared with an increase of 18 percent last year. |
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Nalco sells aluminium ingot at a premium |
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National Aluminium Co Ltd (Nalco) sold 3,000 tons of aluminium ingots at a premium of US $95.13 per ton. Nalco will supply the metal to Hong Kong's Hongfan International Ltd, in six batches of 500 tons each from October to March. Nalco, the tenders of which serve as an international benchmark, last sold aluminium ingots at a premium of US$ 92.50 a ton, over the average LME cash price on a cost, insurance and freight basis in July. Meanwhile, Nalco has zeroed in on Sundergarh in western Orissa to relocate its second aluminium-cum-power complex, estimated to cost about Rs 16,000 crore, after the originally selected site of the project in Jharsuguda district ran into problem on environment grounds. The company is likely to submit a proposal on new location of the project to the state government soon. However, the fate of the project, even at the new location, hinges on availability of water. The company has written to the state government for construction of a barrage on a seasonal tributary to store water for use in the project. It has offered to bear the cost of the barrage estimated at about Rs 100 crore.
Though the company proposed to build a 0.5 million tons per annum aluminium smelter and a 1260-Mw captive power plant (CPP), the final project size will depend on the amount of water allotted to it. Going by the thumb rule, the project will require about 1,200 acres of land at the new location, which is about 200 km from the earlier site in Jharsuguda. Nalco was crowded out of Jharsuguda, which boasts of three other mega proposals for aluminium-cum-power complexes from Vednata, Hindalco and L&T-Dubal on environment pollution grounds. Seeing the rush of investment at Jharsuguda, the Orissa government had asked the Nagpur-based National Environment Engineering Research Institute (NEERI) to conduct a pollution carrying capacity study for the region. NEERI, in its report, has capped the total aluminium capacity for the region at 2 million tons. |
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Jiangxi Copper to build plant in Guangdong |
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Jiangxi Copper Company Limited will build 400,000 tons per year copper product plant in Zengcheng city of Guangdong province.
An agreement was signed by city officials and Long Ziping ED of Jiangxi Copper with total investment set at CNY 2 billion.
Kang Shuigen, spokesman of Jiangxi Copper said that Jiangxi Copper had planned to build a copper product plant with annual capacity of 300,000 tons to 400,000 tons and a total investment of around CNY 300 million.
Jiangxi Copper operates more than 500,000 tons of annual copper product capacity that uses refined copper as feed. The company plans to produce 900,000 tons of refined copper this year compared with 802,000 tons last year. |
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Aluminium Corp of China Ltd returned to a loss in the Q2 as a domestic supply glut dragged down prices for the lightweight metal. China's aluminium market has returned to a state of oversupply as producers restarted idled facilities and new production exceeded demand growth.
Chalco said that it reversed year earlier loss to post H1 net profit on higher sales volume and higher aluminium prices in the early part of this year. It forecast its earnings for the first nine months of 2010 to remain in the black.
Analysts are expected to revise downwards their earnings estimates after the disappointing first half result. Lacklustre global demand and increased exports from China pushed LME aluminium MAL3 below US$ 2,000 per ton at the end of June from a year high of US$ 2,486 in April.
Strong demand in China for the lightweight metal used in construction, transport and packaging had been the main growth driver of the global aluminium industry from 2003 to 2009 until the financial downturn dragged prices lower as demand weakened.
China became a net aluminium importer in 2009 as leading producers in the country cut production that helped support a recovery in global prices during the second half of 2009. Chalco's operating costs remain high, making it more vulnerable to softer aluminium prices. |
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Government to stop bauxite mining |
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In continuation to the Niyamgiri episode, the Centre has brought to a halt plans for bauxite mining in the picturesque Araku region of Andhra's Visakhapatnam district after ordering a comprehensive re-evaluation of environmental and human costs of the project.
In a recent decision, Centre agreed to set up a panel to look into impact of bauxite mining on the water table, reservoirs, forest cover, fauna and social issues concerning mining in the ecologically sensitive area. The decision was taken just before the Centre made up its mind on the Niyamgiri hills.
Minister of Mines B K Handique, in a letter to senior Congress MP V Kishore Chandra Deo, said that the environment impact report prepared by Indian Council of Forestry Research and Education for Araku was being re-examined following concerns raised by the MP. “Commencement of mining operations of bauxite in Visakhapatnam district will be on hold till this exercise has been completed,” Handique wrote. This will mean 10 cases of prior approval given by the mines ministry to entities like AP Mineral Development Corporation — a joint venture with Jindal South West Holdings and Ras-al Khaimah — and Nalco will now have to bide their time. Now, no further prior approvals will be granted until ministry of environment and forests completes re-evaluation of clearances.
Deo has written several letters expressing strong opposition to the mining saying that it would endanger environment and human lives. “This is a Schedule V tribal agency area and mining will totally bring to nought the forest rights law for STs which was your gift to the tribals,” he wrote. |
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Farallon announces extension of contract |
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Farallon Mining Ltd announced that it has extended its zinc and copper concentrates contracts for two-and-a-half years with Trafigura Beheer BV Amsterdam, up to December 2014. Terms that are more favourable have been agreed in both contracts reflecting the current market situation and adjusted to Farallon's quality.
For more than two years, since Farallon started production at the G9 mine the Company's concentrates have been shipped to smelters in Korea, China, Japan and Canada. Both Farallon zinc and copper concentrates are clean concentrates with unusually low levels of impurities. At the same time, both concentrates are high in precious metals. As a result, all smelters are fully satisfied with Farallon's quality, confirming the positioning of the Farallon brand in the international market.
Dick Whittington, President and CEO of Farallon Mining said, "We are very pleased to be able to restructure our concentrate off-take contracts and to extend our relationship with Trafigura. This is a key component in getting our products to market on a competitive basis and providing shareholder value at the same time.” |
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Australia–India in negotiations to resume Uranium exports |
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Australia is keen to resume negotiations with New Delhi on Uranium exports to India, given the possibility of the Abbott government coming to power. The huge swing away from the ruling Labor Party has almost ensured this, as Australia battles the nation's second hung parliament in its Federal history.
Though both the major political parties said they would push for closer trade pacts with India, China and Japan, the coalition has clearly spelt out that it would overturn Labor's ban on selling uranium to India, if used for energy purposes.
The Labour government has stoutly refused to sell Uranium to India saying that India isn't a signatory to the nuclear non-proliferation treaty. However, even before the apparent hung parliament scenario made waves over the weekend, the opposition party in Australia has vocally reinforced the need to renew trade ties and greater engagement with India.
Julie Bishop, deputy leader of the opposition Liberal Party, told that the coalition was keen to reinstate the in-principle agreement to sell Uranium to India. The accord would be a preliminary step toward exports from Australia, which holds 40 percent of the world's known Uranium reserves and exports worth over US $1 billion a year, a huge injection into the domestic economy.
Many in New Delhi have welcomed the possibility, for the ban on Uranium exports had become almost a `negative symbol' of Australian attitudes to India. Minister for power, Sushil Kumar Shinde, who was on a five-day visit to Australia in June this year, had said that he had initiated some discussions on sourcing Uranium supplies. Hoping that the Australian government would accommodate India's need for Uranium, Shinde had said, “The whole world is supporting us in our civil nuclear programme. It is for them (Australia) to decide.''
Australia is the third-largest Uranium producer behind Kazakhstan and Canada. If the accord between the two countries does prove fruitful, several key beneficiaries like mining giants Rio Tinto and BHP Billiton, stand to benefit. Rio owns 68 percent of Energy Resources of Australia and operates the Ranger Uranium mine in Northern Territory, while BHP owns the Olympic Dam uranium mine in South Australia. |
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Power failure at Norsk Hydro aluminium plant |
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Norsk Hydro said that the Qatalum smelter, a 50/50 joint venture between Qatar Petroleum and the Norwegian aluminium company, had suffered a power failure that would delay its ramp-up schedule. Qatalum will not be in full production in 2010. Qatalum, with a design capacity of 585,000 tons of primary aluminium, suffered a sudden shutdown of production, due to a power outage early August morning.
Power was out for almost five hours, leading to a significant drop in temperature in the reduction cells and making it impossible to resume metal production. The failure affected both the connection to Qatar's national power grid and Qatalum's own power plant and it would investigate the cause of the failure in co-operation with local authorities. The company have so far reached 60 percent of the total 585,000 tonnes capacity. The facility has 704 production cells, of which 444 were in production and must be restarted. The remaining 260 cells, which had not been put in production, will be phased in as planned by the end of 2010. |
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Unwrought aluminium inventory rises |
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Western world unwrought aluminium stocks rose to 1.192 million tons (MT) in July compared with a revised 1.189 MT in June. Unwrought stocks stood at 1.176 MT in July 2009. Total aluminium smelter stocks excluding finished end-products rose to 2.398 MT at the end of July from a revised 2.246 MT in June. |
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Global aluminium production to increase |
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Global aluminium production may outpace demand this year by more than predicted because of expansion led by China, the biggest supplier and consumer.
Motoi Kamitani Sumitomo Corporation's Manager of light metal trading said that the company increased its forecast because output in China appears to be greater than expected earlier this year.
Aluminium, used in cars, packaging and homes has dropped by 7.9 percent in London this year as world supply exceeded demand by 314,000 tons. Prices jumped 45 percent in 2009, the first annual advance in three years as stimulus measures lifted the global economy out of its worst recession since World War II.
Kamitani said that Sumitomo predicts a surplus of 2.5 million tons for 2010 up 32 percent from its January estimate of 1.9 million tons (MT) and compared with 1.8 MT in 2009. Supply may exceed demand by 2.3 MT next year.
He said that aluminium production in China might jump 29 percent from last year to 17.4 MT or 5.5 percent more than the January estimate. Demand may increase 21 percent to 17.3 MT or 4.8 percent more from January. The country has produced 1.3 MT to 1.4 MT per month since the H2 of last year as prices advanced up from 800,000 tons to 900,000 tons a month in the H1 of 2009. There is still room for a further increase as the country has an annual capacity of 20 to 22 MT. |
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China Armco adds nine additional cutting machines |
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China Armco Metals, Inc. is a distributor of imported metal ore and a metal recycler with a new state-of-the-art scrap metal recycling facility in China. It announced that Armet Renewable Resourced Co. Ltd. i.e. its wholly owned subsidiary, has added nine additional cutting machines in an effort to accelerate the ramp up in production at its scrap metal recycling facility in Lianyungang, China.
The use of the new machines is part of management's plan to increase overall throughput in the second half of 2010 as the company seeks to fulfill existing and anticipated demand. The facility generated its first production revenue in the second quarter of 2010 after an initial testing phase and management anticipates a rapid expansion in production and delivery in the coming quarters.
Commenting on the announcement, Kexuan Yao, CEO and Chairman of China Armco Metals, Inc., stated, "We have invested substantial resources in the launch of our scrap metal operations and have spent several months completing testing, securing necessary government approvals, and procuring raw materials. In an effort to meet current and anticipated demand levels, for the remainder of 2010 and beyond, we have added this equipment and intend to use every resource at our disposal to expeditiously grow this business. We are confident in our ability to reach our goals and remain steadfast in our belief that this business will be the largest driver of our growth for the foreseeable future." |
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Imports of zinc likely to decline
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Zinc imports by China, the world's largest consumer and producer, may drop from a 10-month high in August as higher overseas prices discourage purchases and as government measures to cool the property market curb demand. Imports of refined zinc were 32,972 metric tons last month, the highest level since September 2009.
They may drop to the usual 10,000 tons to 20,000 tons as demand weakens and domestic smelters resume output. July's inbound shipments of the metal used to galvanize steel were 52 percent more than in June.
Lin Yuhui, Deputy General Manager at Jinhui Futures Co, said from Shenzhen. "It's doubtful we'll see such high imports in August as the window was mostly shut in July." Arbitrage traders try to profit by buying metal in London and selling it in Shanghai, exploiting the gap in prices.
Prices in Shanghai, which include 17 percent value-added tax and import fees, were more than 1,000 yuan-a-ton higher than in London at the beginning of June.
Zinc, the worst performer on the London Metal Exchange this year, rallied 13 percent in July, while Shanghai prices gained 12 percent in the same month. Domestic output fell 6.6 percent in June from a month earlier, and declined 4.1 percent in July, as smelters idled capacity following the slump in prices. |
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First Quantum Minerals to suspend production |
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Canada's First Quantum Minerals will suspend production at its Bwana Mkubwa copper processing plant in Zambia in August after running out of raw materials. Bwana Mkubwa had exhausted the copper ore oxide it imported from neighbouring Democratic Republic of Congo (DRC) and operations would be suspended until the plant sourced other economically viable raw materials. The company will be closing the plant in August because the ore has been exhausted earlier than it had initially thought due to higher output. |
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Chalco confident on Guinea ore field approval |
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Aluminum Corporation of China (Chalco) said it was confident Guinea's government would approve its bid to jointly develop a huge African iron ore field with mining giant Rio Tinto.
China's biggest alumina producer signed an agreement with Rio last month to establish a joint venture to develop the Simandou project in Guinea, with the Chinese company to invest 1.35 billion dollars in the project.
"The agreement is pending approval from both the Chinese government and the Guinea government... I believe the Guinea government will approve it as it benefits the local economy, employment and infrastructure," Chairman Xiong Weiping said.
Anglo-Australian giant Rio has been working on Simandou for about 12 years but has run into trouble with Guinea's military rulers, who have handed part of its landholding to an Israeli billionaire.
The Guinean government has the option to buy up to 20 percent of the project, where operations are expected to start within five years. Chalco is seeking to diversify from aluminium into other sectors such as coal, iron ore, rare earths and copper to become a global mining firm, Xiong said, as it has been hit by slowing demand and rising costs.
The listed unit of state-owned Chinalco reported a net profit of 530.6 million yuan (78.25 million dollars) for the six months ended June 30, compared with a net loss of 3.5 billion yuan in the first half of 2009. However, it posted an overall loss in the second quarter.
Chalco posted a net profit of 627.2 million Yuan in the first three months of the year, but had a net loss of nearly 100 million yuan in the second quarter as policies introduced in April to cool the property market hurt demand.
Chalco's Chief Financial Officer Chen Jihua said the firm's losses were more than 500 million yuan in June and it remained in the red in July, although it was confident it could rebound in the third quarter. |
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Reed Resources extends exclusivity |
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Reed Resources Ltd has extended the exclusivity period with China Non-ferrous Metal Industry's Foreign Engineering and Construction Co. Ltd until September 30, 2010, which if successfully concluded, would allow development of Reed's Barrambie Vanadium Project in Western Australia. Barrambie, 80km north of Sandstone, is generally recognised as one of the world's highest grade vanadium deposits.
In May, Reed entered into discussions with NFC. The discussions to date specifically cover an engineering procurement & construction contract and project financing for the project. A delegation of senior NFC technical and commercial management representatives have completed a five-day visit to Perth which included a site visit.
As a result of the visit and the discussions held with Reed's technical and management teams, the company has agreed to the extension. Reed has agreed to deal exclusively with NFC and Arccon regarding a development and financing proposal. |
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Zincore achieves high percentage zinc recoveries |
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Zincore Metals Inc. announced that it has achieved zinc recoveries in excess of 92 percent at a zinc calcine grade of greater than 65 percent and lead recoveries in excess of 99 percent at a lead calcine grade of greater than seven percent in a continuous campaign of a pilot plant Waelz kiln.
The continuous run test results were conducted over a period of 72 hours and were achieved after conducting 56 initial tests to determine the optimal parameters for variables such as plant feed rate, kiln residence time, anthracite ratio, kiln temperature and zinc content. All tests were conducted using a ten ton sample of mineralisation at various feed grades from the Accha project at the Company's Accha Zinc Oxide District in southern Peru.
Jorge Benavides President and CEO of Zincore said, "These test results are excellent! We are very encouraged by the outstanding results achieved, and at a much lower than expected rate of coal consumption. We now have much more valuable information for the design and throughput parameters required as we continue to move towards an updated pre-feasibility study and closer to feasibility work.”
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