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        Aluminium demand may rise this yearn  
 
MAluminum consumption in Asia may continue to grow in 2010 as stimulus measures in China, the world's biggest metals consumer, and rest of the region lift demand for the metal, an executive at Novelis Korea said.
Aluminum prices have surged 32 percent this year as China's $586 billion stimulus spending increased demand for the metal used in car parts, construction and cans. China's economy expanded 8.9 percent in the third quarter, the fastest pace in a year. Harbor Intelligence forecasts demand will outstrip supply by 380,000 tons next year and prices will average $2,700. Prices have averaged $1,652 a ton this year. Asia used to depend on Western countries for demand generation. This year, most aluminium and aluminium products are consumed within Asia, driven by the stimulus spending.
There is overcapacity in China. Still, China is different from other parts of the world because "when prices are bad, they close capacity, and when prices are good, they start again". Barclays Capital forecasts that the global surplus in aluminium will increase 29 percent to 1.63 million tons next year as the biggest annual price increase since 1994 spurs producers to increase output..
         NALCO may witness production loss
 
MState-run National Aluminium Co Ltd (NALCO) could see a production loss of about 1,000 tons due to coal supply shortage after a machinery failure at its supplier mine, reports said quoting a senior company official of the company.
NALCO, India's third-largest aluminium maker, produced 361,262 tons of aluminium in 2008-09, solely out of the aluminium smelter at Angul in Orissa state in eastern India. The production loss should not be more than 3 to 5 percent of the company's monthly target, a company official said. However, the company will try to recover towards the end of the financial year. A fire on the company's plant damaged machinery and two conveyor belts causing disruption at Mahanadi Coal Field Ltd's Bharat Mines in Orissa, which supplies coal to NALCO.
The state-run firm uses the coal to run its captive power plant that supplies power to its smelter. The Angul smelter normally gets coal supplies of 15,000 to 16,000 tons daily from the mines, but reduced to about 8,000 tons recently. The coal stock at the Angul plant was thin and would last only for two more days, but efforts were on to overcome the crisis through other local supplies and using alternative means to transport coal from the mines.
         Copper consumption set to rise
ASpurred by huge demand from power, telecommunication and housing sectors, India's copper consumption is likely to rise 5 to 6 percent this year. The three sectors account for 65 percent of the total demand in India.
At this growth rate, India's total copper consumption will hit 550,000 tons next year, as the red metal, despite cheap alternatives, remains the preferred choice for electricity, industrial machinery and equipment, consumer electronics and construction industries. The metal also finds applications in hospitals due to its anti-bacterial properties, reports said. According to the latest report by ICRA Management Consulting Services, the country's copper consumption grew 5.3 percent last year to 520,000 tons, despite higher prices and slowdown in industrial production.
Copper consumption in the country remained at 100,000-150,000 tons during the 1990s. The slow growth in consumption was primarily because of limited domestic capacity and supply, high import duties on both concentrates and finished products, low investments in the country's telecom and power infrastructure, and high prices. However, over 2004-08, consumption rose by a compounded annual growth rate (CAGR) of 10 percent. Still, India's per capita consumption is only 0.4 kg, against four kg in China. Till the late-1990s, the telecom sector was the major customer segment (accounting for 30-35 percent of demand). Because of the rapid expansion of the telecom network during the late-1990s, copper usage in the sector increased from 20,000 tons annually in the early 1990s to 105,000-110,000 tons in the late1990s. However, since then, demand has declined to 65,000 tons at present.
The growth of the copper industry is highly dependent on the performance of and demand for products like power and telecommunication cables, transformers, generators, radiators and other ancillary components. Hence, its growth is closely linked to the country's economic and industrial growth. Since the country's GDP growth is forecast at over 7 percent for the full year, consumption may maintain the conservatively estimated growth of over 6 percent, an analyst said. Generally, copper consumption tracks the country's GDP growth. With the slump in demand from telecom, the electrical sector has become the largest consumer of the red metal. Government initiatives in recent years (restructuring of electricity boards, the Electricity Act of 2003, and thrust on transmission & distribution) have created an environment for rising investments in the power sector. Power generation capacity additions during the 2007-12 Plan period are expected to be 78,700 Mw. Based on the expected capacity expansions during the plan and associated investments in transmission and distribution, the Working Group on Power for the Eleventh Plan had estimated the copper requirement of around 800,000 tons during 2007-12, and 810,000 tons during 2012-17.
         Mine output may rise in Indonesia
 
CIndonesia expects production of key mining products, such as copper, nickel and gold, to rise in 2010 on stronger demand from China and India, while tin output should be steady.
Indonesia is expected to produce about 1.02 million tons of copper in 2010, a 17 percent increase from this year, data from the energy ministry showed. Gold output is expected to grow by 10 percent to 115,998 kg in 2010. Economies in China and India are expected to grow faster and thus will boost demand for commodities. Global prices of metals have recovered on signs of a rebound in the world economy.
The Indonesian government also expects a 22 percent increase in nickel-in-matte output to 77,700 tons next year while ferronickel output is expected to increase by 2 percent to 18,276 tons. But the government forecast production of refined tin - widely used in food packaging and to solder electronic products - would be unchanged from this year at 105,000 tons. The government wants to keep tin production in check to conserve resources and to keep prices high. The government has said it plans to limit tin output but it has not yet enforced official regulations on this. It also said it expected mining investment to hit $2.5 billion next year, up from $1.81 billion in 2009, supported by greater certainty after the introduction of new mining regulations. Southeast Asia's largest economy has struggled to lure foreign investment into mining in recent years, compounded by some politicians taking a nationalist line on resource exploitation and also because of uncertainty over regulations tied to a new mining law passed in 2008.
Major global resource firms operating in Indonesia include Freeport-McMoRan Copper & Gold Inc and Newmont Mining Corp, but much of the investment had been made decades ago. Some foreign firms have already shelved investment plans since last year, partly due to uncertainties over the new mining law, which also includes contentious items such as shorter-term mining permits rather than longer-term contracts of work. Miners will also have to process minerals in Indonesia and to set aside some of their coal for the domestic market.
         Chinalco plans greenfield project
 
EAluminum Corp of China (Chinalco), the country's top aluminium producer, may build a greenfield aluminium smelter in Qingyang city, Gansu province.
The company intends to use the energy resources in Qingyang for the aluminium smelter. An industry official, however, said that the city government and Chinalco had signed a framework agreement to build a 500,000 ton-per-year aluminium smelter and develop a coal mine. The state-owned company is the parent of Chalco, which operates Chinalco's aluminium and alumina capacity. The project will boost the company's production capacity by more than 10 percent. Chalco operates Chinalco's 4 million tons a year of aluminium capacity and 11 million tons a year of alumina capacity. Alumina is the main material for primary aluminium production. If built, the Qingyang smelter will be Chalco's fourth smelting facility in the northwestern province. But central government approval may be a struggle as Beijing looks to close 800,000 tons of old smelting capacity by the end of 2010, and has said that in principle it won't approve any new smelters in 2009 to 2011 as the country already has more capacity than it needs.
Chinalco's would also develop a mine with proven reserves of 102.5 million tons of coal, an essential material for energy-intensive aluminium production, the Qingyang city official said, adding that exploration work was being conducted. Coal-rich Qingyang city has 10.4 billion tons of proven coal reserves.
         Copper price may rise in 2010
 
JCopper's amazing bull run is likely to continue into next year, for a while at least. But there is a lot of speculative froth in these prices and valuations have very little to do with current fundamentals, analysts believe.
The red metal climbed to a fresh 16-month high above $7,300 early January on expectations for demand in 2010 and a possible strike at a mine belonging to Chile's Codelco, the world's No. 1 copper producer. The metal, used in power and construction, earlier touched $7,380, its highest since September 4, 2008. Codelco braced for a strike at its giant Chuquicamata mine after workers rejected a wage offer, stoking supply concerns. A strike started on January 4 at Chuquicamata although analysts expect any stoppage to be short lived. The Chuquicamata strike vote came just hours after union workers began an indefinite strike at Chile's Altonorte smelter, where owner Xstrata has cut output at the facility for nearly a month for maintenance work. Analysts also said improving U.S. consumer confidence data and expanding business data from the U.S. Midwest, was also boosting investor sentiment.
Copper prices were little affected by a firmer dollar, which benefited from year-end flows in thin trade. A strong U.S. currency makes metals priced in dollars more expensive for holders of other currencies. A weak dollar has boosted industrial metals this year, combined with Chinese buying, new investor cash and an improving macro outlook. The metal is now on course for an annual rise of about 140 percent, it's biggest in at least three decades. The red metal has rallied every quarter this year, its longest run of gains since breaking a run of nine quarterly increases at the end of 2006. Average quarterly gains for London copper in 2009 were 24 percent, pipping 1987's average of 20 percent. However, demand worries remain. Copper stocks rose 10,025 tons to 495,950 tons - the highest point since early April.
         BALCO's arbitration hearing this month
 
BThe government's arbitration hearing over residual 49 percent stake in Bharat Aluminium Company (BALCO) is scheduled for January 31. A three-day hearing by a panel of three retired judges of the Supreme Court concluded on December 26 with no concrete result. Former law minister Shanti Bhushan represented Sterlite Industries and senior counsel A K Ganguli represented the government's case during the hearing, reports said.
Sterlite, a subsidiary of London-listed Vedanta, bought 51 percent of BALCO in March 2001 for Rs 552 crore, when the National Democratic Alliance government decided to divest the government's stake in the public sector company. Sterlite had the right to buy the remaining stake after a three-year period, but ran into differences with the government over valuation. After the embargo expired in March 2004, Sterlite sent the government a call notice and a cheque of Rs 1,099 crore for BALCO's residual stake, in accordance with the shareholders' agreement. But, differences in the value of the government's residual stake came up after the United Progressive Alliance came to power in May 2004 and the issue was referred to the Attorney General, who termed the call option invalid under Section 111A of the Companies Act. He said, however, that the residual stake could be sold at the market price. In 2006, Sterlite moved the Delhi High Court for interim relief, to ensure the government did not sell the stake to anyone else. The high court asked for reconciliation and arbitration. The government accordingly directed a committee of secretaries to explore ways to reconcile the issue. In May last year, the committee of secretaries recommended that to discover the correct price of the stake in the unlisted company, the government should sell 10 percent in an initial public offer (IPO). In July, the Cabinet Committee on Economic Affairs approved the IPO after the ruling UPA parted ways with the Left parties. Sterlite, however, rejected the IPO on the ground that it holds the right to buy the residual stake, after which the dispute went to arbitration this year. If the arbitration fails, the case may be settled before a Supreme Court bench. The government, meanwhile, has accelerated its move to divest stake in a number of public sector units. The government has asked all ministries to compile a list of state-run companies for partial sale of stake and listing on stock exchanges. The government says it is also keen on speeding the long-pending BALCO issue.
         Nickel all set to gain in 2010
WMost of the base metal prices will be depended on Chinese demand in 2010 and Nickel is no exception. If indications from global markets are any hint, global primary nickel usage may recover around 1.35 million tons, said a report. But, that is not enough. Prices are set to go up to certain extend in 2010 also.
Hope lies in Chinese demand. A recovery of demand was seen in stainless steel production in China, Korea and Taiwan in the second quarter of 2009 and to lesser extent in Europe and the United States in the third quarter, added the report.
Primary nickel demand was strong in China and surrounding countries, with both real and apparent consumption increasing. In Europe and the United States, demand is expected to decline in 2010 due to weak stainless steel production and also relatively high usage of nickel-containing scrap. In 2010 it is possible that growth in stainless steel and nickel use will continue in China and in other parts of the world but at slower rate.
Nickel has been the laggard among the base metals rally during 2009 with returns of around 61 percent. In the coming year, nickel prices are set to perform well.
As long as $15550/15500 holds support, the prices will edge higher towards 21900/22000 levels. Nickel prices are moving in a channel with supports around 16500/15500 range and resistance coming around 26600/26900 zones.
In 2010 nickel production is set to increase to 1.44 million tons. World primary refined nickel production was 1.38 million tons in 2008, and declined to 1.28 million tons in 2009.
         Chinese copper smelting industry under consolidation
 
CChina’s largest and third largest copper producers Jiangxi Copper Corporation and Yunnan Copper Company Limited respectively have become partners with China Minmetals Group and Aluminum Corporation of China Limited and now Tongling Nonferrous Metals which is the second largest copper producer has finally found someone to fall back on.
According to a report, Tongling Nonferrous announced December 29th 2009 that its majority shareholder Tongling Nonferrous Metals Group Holdings Company Limited have joined China Railway Construction Corporation and acquired 66.67 percent of the shares of Canada's Corriente Resources with CNY 4.41 billion.
Tongling Nonferrous Metals Group defeated many competitors for the acquisition. According to a news agency last year, companies including Tongling Nonferrous Metals Group, the world's fourth largest copper producer Switzerland's Xstratar Company and the world's largest copper miner Chile's state copper company Codelco all expressed interest in participating in Corriente Resources' Panantza, San Carlos project in southern Ecuador, added the report.
Compared with domestic counterparts, the acquisition mode is very similar to an overseas acquisition case by China Minmetals Group and Jiangxi Copper 2 years ago. Tongling Nonferrous Metals Group first set up a joint venture company with China Railway Construction Investment Company Limited and then acquired Corriente Resources through this JV.
Although Corriente Resources is listed on the Toronto Stock Exchange and the New York Stock Exchange at the same time, its main asset lies in mineral assets and mineral interest in the Corriente Copper Belt in southeastern Ecuador.
Now these 3 companies have found partners, the current pattern of competition in the domestic copper industry has also changed. China Railway Construction which had never been in the mining industry said its Board of Directors meeting held October 27th 2009 has decided to make mineral resources development one of the company's main businesses. This adds another central enterprise in the mining industry.
         NALCO may invest Rs 1,000-cr in NPCIL's future projects
 
TNALCO, the country's second largest aluminium producer, has agreed to invest about Rs 1,000-crore in future projects of state-run Nuclear Power Corp, an official from the atomic power monopoly said.
The National Aluminium Company Ltd (NALCO) and Nuclear Power Corporation of India Limited (NPCIL) had signed an agreement to collaborate with each other for setting up nuclear power plants in the country. As per the MoU, NALCO intends to invest here as a part of its strategy to diversify into commercial generation of electricity through nuclear power plants jointly with NPCIL.
"NALCO may be putting in Rs 1,000-crore. Whatever immediate future projects we have, they will be investing," NPCIL Director Finance, J K Ghai, said. Ghai, however, did not specify the project or the tenure for which NALCO had expressed its interest for funding.
He added that the aluminium major had a cash surplus of Rs 4,000-crore and wanted to invest in nuclear energy for long-term reasonable returns on investment. "We have a team that is working on it. They (NALCO) want to invest in any of our immediate future projects. They may invest in any of the reactors coming at the five sites identified by the Government of India or they may invest in projects presently under construction at Kaiga and Rajasthan," Ghai said.
The Government has identified five new locations in West Bengal, Gujarat, Andhra Pradesh, Haryana and Madhya Pradesh to set up nuclear reactors. NPCIL is developing 2,160 MW of projects at Kaiga, Kudankulam, Rajasthan and Kalpakkam to be operational in the next two-years.
State-run fuel retailer, Indian Oil Corp (IOC), has also inked a similar agreement with NPCIL and earlier this month announced that it would pick up 26-49 percent stake in a Rs 10,000-crore nuclear plant that the two companies would jointly set up.
         No violation by Vedanta at Niyamgiri
 
RThe Vedanta Aluminium Ltd (VAL), part of Vedanta Resources, has not violated any forest and environment norms at its alumina refinery and bauxite mining site in Kalahandi district of Orissa, according to a report of the state government, reports said. While the refinery is at the foothill of Niyamgiri hills, the proposed mining site is at the top of the hill, 7 to 10 km away. Allegations were that the company had initiated construction work for mining of bauxite though the mining site was yet to get the statutory clearance from the Ministry of Environment and Forest (MoEF). "There is no construction beyond the project area of the alumina refinery which was allotted to the company by the government in 2004 and it is not unlawful", said a senior official of the state forest and environment department quoting the report of district collector of Kalahandi who was asked to probe into the matter.
The MoEF had asked the state government to explain why the controversial bauxite mining project by Vedanta had been allowed to start work in violation of the ministry guidelines. This followed a statement by Union minister Jairam Ramesh that a probe had found construction work had started on land that belonged to the revenue department. After the clean chit given to the company in the district collector's report, all eyes are on the next move of the state government. Sources said that the government will send its views on the matter to the Centre only after the chief minister vets it. But with chief minister Naveen Patnaik now on a tour to Delhi and the state assembly in session, this may take few days. The Anil Agarwal owned Sterlite Industries India Ltd (SIIL) and the Orissa Mining Corporation (OMC) of the Orissa government have already formed a joint venture company under the banner of South-West Orissa Bauxite Mining Private Ltd for mining bauxite in the Niyamgiri hills. While the leaseholder has got stage-I forest clearance from MoEF, the stage-II clearance is awaited.
         Chuqui union workers set to go on strike
 
AUnion workers at Chile's giant Chuquicamata copper complex, the world's second biggest, were set to go on a strike over pay early that would hit world No. 1 producer Codelco's overall output. However, as the stoppage neared, union workers at Chile's Altonorte smelter said they were close to reaching a wage deal with owner Xstrata to end a separate near week-long strike that also fanned supply fears and helped boost prices.
Codelco sources have estimated the Chuquicamata complex in far northern Chile, which includes the Chuquicamata and Mina Sur deposits and produces around 4 percent of the world's mined copper, will lose up to 1,800 tons of copper output per day and cost the state around $8 million of lost daily revenue. The complex was expected to produce 565,000 tons of copper in 2009. The strike would be the most serious by Codelco's unionized workers since 1996, when workers went on strike for more than a week. Strikes at Codelco's operations have historically been short-lived and analysts expect the stoppage to be brief.
Unions said Codelco made an informal wage offer in a bid to head off the strike, but they refused to study it because it was not a formal offer. If more than half of the workers at the deposit turn up for work, then the strike could be lifted soon, one of the mine's three worker unions said, but added that looked extremely unlikely. Workers only very narrowly voted to the strike. Codelco said it is ready for the strike, and a senior company official said the state-owned giant has enough copper stocks to honor deliveries early this year. However, Codelco has not said how long its stocks will last. The strike would come just as Codelco was set to break years of dwindling output, and has helped push international copper prices to 16-month highs. Codelco does not face another round of major wage negotiations until later this year. Chilean experts say the strike will not have much backing around the country as most Chileans do not understand the Chuquicamata workers' position, because they are considered well-paid. Codelco is also a main state revenue earner, meaning the government will be keen to avoid a protracted disruption. Last minute negotiations failed between Codelco and the unions failed over the weekend, when union leaders rejected an improved company offer. Workers argue that they should enjoy benefits similar to peers at private mine Escondida, the world's biggest copper mine, which is majority-owned by global diversified miner BHP Billiton.
         NALCO expansion project faces 9-months delay
 
SAluminium producer NALCO's Rs 4,402-crore expansion project will be delayed by about 9 months because of the naxal attack at its Orissa site early this year that brought construction work to a standstill.
"Construction work at alumina refinery came to a stand still after the Naxal attack in April at Damanjodi. Now contractors have resumed work. Commissioning of the alumina refinery will be delayed by about 9 months," NALCO Director Finance B L Bagra said.
As part of its Rs 4,402-crore second-phase expansion project, National Aluminium Company (NALCO) is in the process of augmenting the annual production capacity of its alumina refinery from 1.57 million tons to 2.1 million tons.
It had planned to start commercial production of the expanded refinery from June 2010, but now it would be done in March 2011. However, the work is on full swing for expanding the annual production capacity of bauxite mines, aluminium smelter, and captive power plants, he said.
NALCO, in the second phase of the expansion programme, plans to take the annual production of its bauxite mines to 63 lakh tons from the present 48 lakh tons, output of its aluminium smelter to 4.60 lakh tons from present 3.45 lakh tons, by next year.
It has a present installed capacity of 960 MW, which will be expanded to 1200 MW in the next fiscal.
         Chinese aluminum smelters agree higher 2010 alumina prices
 
UChinese aluminum smelters have agreed to pay more for imported alumina in 2010, a move that will reduce margins as they scurry to secure feedstock for new capacity.
Term prices for imported alumina will rise to 14.5 percent to 15 percent of the price of aluminum on the London Metal Exchange, currently at USD 2,250 per ton of alumina.
The pricing, on FOB basis is equivalent to USD 326 per ton to USD 337 per ton based aluminum prices. It takes 2 tons of alumina to make 1 ton of refined metal. In 2009 the ratio was 13.5 percent to 14.5 percent for the bulk of term imports.
Smelters expecting higher production next year were keen to secure term alumina, given sharp gains in international spot prices to USD 340 per ton to USD 350 per ton to Chinese ports versus about USD 265 in July.
A smelter official said that Chinese smelters output expansions are running ahead of local alumina expansions. But only top alumina producer Aluminum Corporation of China Limited was willing to supply term alumina in the country, forcing smelters to look overseas. They said that smelters had paid 15 percent to 18 percent of aluminum prices on the Shanghai Futures Exchange for Chalco's term alumina in the past 3 years and would pay 17 percent for next year's shipments.
Company officials said that Chalco, with an annual capacity of 4 million tons of primary aluminum and 11 million tons of alumina, had restarted all its idle alumina and aluminum capacity. Smelter and trading sources said that increased term bookings were likely to raise China's imports of alumina, the main material for production of the metal, 2010 from this year's likely imports of over 5 million tons. Higher imports would trim an expected surplus in the international market 2010 but could weigh on domestic spot prices.
         Aluminum demand in China likely to rise 15% in 2010–Enam
 
KAluminum Corp of China Ltd (Chalco) raised spot alumina prices by 5.7 percent to $US410.1 per ton from December 31, the first rise since September 30.
Chalco, the country's top aluminium (aluminum) firm and the world's third-largest alumina producer, raised alumina prices steadily throughout 2009 from a low of 2,000 yuan. Prices had halved in the second half of 2008 from 4,200 yuan per ton.
Chalco had shut 4.11 million tons of its 11 million ton alumina capacity due to the economic downturn which crippled demand for the metal, but it has restarted all its plants, a company executive said. Chinese aluminium smelters have already agreed to pay higher term prices for imported alumina in 2010. They will pay 14.5-15 percent of prices for aluminium on the London Metal Exchange, up from 13.5-14 percent last year.
That formula puts term alumina prices at around $US330 per ton on a free-on-board basis, based on Monday's aluminium prices. Chalco's prices for term alumina are set at 17 percent of Shanghai Futures Exchange aluminium prices in 2010, compared with 15-18 percent in the last three years, smelter officials have said.
         NALCO hikes prices by Rs 3,500 a ton
 
RState-run NALCO increased prices of aluminium by Rs 3,500 a ton, a second hike for the prevailing month, citing improvement in the metals rate at the London Metal Exchange.
"We have increased aluminium prices by 3,500 a ton following the price movement at the London Metal Exchange," a NALCO spokesperson said. Price range for the products was not available immediately. NALCO had on December 11 increased aluminium prices by Rs 7,000 per ton. Aluminium prices have improved by USD 200 to USD 2,230 a ton at the London Metal Exchange in the past one month.
         New CMD for Hindustan Copper Ltd.
VShakeel Ahmed took over as the Chairman-cum-Managing Director of Hindustan Copper Limited.
Prior to this, Ahmed was the Advisor (Projects), Railway Board. He joined the Indian Railway Service of Mechanical Engineers in 1975 and served the Indian Railways for 34 years in various capacities.
Ahmed has worked in Railway Board as Advisor, Public Private Partnership and has spearheaded transfer of technology and manufacture of New Generation High Horsepower Diesel Locomotives at Diesel Locomotive Works and has also been to Mozambique for five years as a Technical Advisor to National Railways of Mozambique. He was Divisional Railway Manager of Kharagpur Division on SE Railways for more than two years.
        Cuba 09 - unrefined nickel output at 70,100 T
 
NCuba's unrefined nickel plus cobalt production weighed in at 70,100 tons last year, down slightly from the 70,400 tons reported in 2008.
According to a report, the production as part of a program on the area's economic performance last year. The country's three processing plants are located in Holguin. "The industry did not meet its plan for the year, as the only plant that was able to reach its goal was the Pedro Sotto Alba," the report said, without providing further details.
Output at the Pedro Soto Alba plant, a joint venture with Canadian mining company Sherritt International's (S.TO), was more than 2000 tons above 2008, a record. Last year Sherritt International reported 2008 output at the plant was 34,673 tons of unrefined nickel plus cobalt.
There was no further information on output at the two other plants in the area which are fully owned and operated by state monopoly Cubaniquel. Earlier this year the report said the year's plan was around 70,000 tons and that due to hurricane damage the state-run Ernesto Che Guevara plant, with a capacity of 32,000 tons, would produce around 26,000 tons. Scattered reports this year indicated the state-run Rene Ramos Latourt plant, the oldest with a capacity of 10,000 tons to 15,000 tons, was operating below capacity at various times.
Hurricane Ike, a Category 3 storm, hit Cuba in September 2008 at Holguin's northern coast, where the nickel industry's three processing plants are located, damaging the two Cubaniquel plants, infrastructure, housing and buildings and swamping the area with torrential rains and a storm surge.
Output had averaged between 74,000 tons and 75,000 tons of unrefined nickel plus cobalt for much of the decade before the storm hit. Nickel is essential in the production of stainless steel and other corrosion-resistant alloys. Cobalt is critical in production of super alloys used for such products as aircraft engines. Cuban nickel is considered to be Class II, with an average 90 percent nickel content.
Cuba's National Minerals Resource Center reported that eastern Holguin province accounted for more than 30 percent of the world's known nickel reserves, with lesser reserves in other parts of the country.
         Japan Nov aluminium shipments down 1.0% yr/yr
 
BJapanese shipments of aluminium products fell 1.0 percent in November from a year earlier to 164,859 tons, industry data showed. That was down slightly from 165,480 tons in October, the Japan Aluminium Association data showed.
It was the 14th consecutive month of year-on-year falls in shipments, but the fall was sharply smaller than October's 14.3 percent drop from the year-earlier level. Year-on-year declines have been narrowing from a near 40 percent drop earlier this year as demand from the automobile and semiconductor industries picks up. The November figures were down 0.4 percent from October.
Japanese demand for metals such as copper and aluminium plunged from late last year as the worst global economic downturn in decades hit consumer spending and forced manufacturers to cut output. Demand was slowly returning and stabilising, but industry officials remained cautious about the outlook.
Japan's apparent demand for aluminium has finally recovered close to levels seen before the economic crisis at the end of last year, but could slow or even dip again next year if the country's fragile economy stalls.
Aluminium stocks held at three key Japanese ports rose for a second consecutive month to 180,500 tons at the end of November, trading house Marubeni Corp said. Some of the purchases were apparently made to build up stocks. A Marubeni official said he did not expect further moves to boost stocks in the coming months.
        BHP Billiton increases output on its Peru copper output
 
NBHP Billiton and its partners in the big Antamina copper and zinc mine in Peru's Andes mountain range have pushed the button on a $US1.29 billion expansion, as the copper price sits at a 16-month high.
The expansion will increase the mine's copper production by 40 percent, to about 450,000 tons a year, over the next decade. The expansion includes a six-year mine life extension out to 2029. BHP in 2008 revealed a 75 percent increase in reserves at the mine.
BHP owns 33.75 percent of Antamina, meaning its share of the capital costs will be $US434.7m. Xstrata owns 33.75 percent; Canada's Teck Resources has 22.5 per cent and Japan's Mitsubishi 10 percent. The expansion is typical of BHP, which prefers brownfields exploration close to what it calls its tier-one assets, rather than heading into new, more uncertain mineral provinces.
Last financial year Antamina produced about 320,000 tons of copper and about the same amount of zinc.
The expansion will shift the mine's focus to copper over the next decade, meaning zinc production will fall below the average 261,000 tons a year of the past three financial years.
Teck said Antamina copper and zinc production would both grow 30 percent, but it was not clear from what base, or over what period. First production is expected in late 2011 but full commissioning of the expansion is not forecast until a year later. Credit Suisse analyst Ralph Profiti said the expansion was positive news but not a surprise.
"Antamina copper grades have been on a general downward trend and the copper to zinc ratio has been moving in favour of zinc, which we view as less desirable," Mr Profiti said.
Copper prices have jumped 60 per cent in the past six months to about $US3.40 a pound.
The project moved rapidly through development studies. BHP's development chart released in a September presentation showed the expansion as a "future option" not yet in feasibility stage and expected to come into production after 2014. Antamina, 270km north of Lima, is one of the world's biggest copper/zinc mines. The expansion will require new equipment, a larger concentrator and a 55km electric power transmission line.
        Vedanta to promote downstream industries
 
ILondon based Vedanta Aluminium Limited (VAL), which is setting of an alumina refinery and smelter projects in Orissa, reiterated its commitment to set up an aluminium park in Orissa to promote downstream and ancillary industries in the state. The move will help develop the small and medium size enterprises (SMEs) in the state, VAL senior vice-president said.
“In keeping with Vedanta's policy of collaborative growth for all, we propose the concept of development of an Aluminium Park in Jharsuguda region of Orissa that will co-locate multiple downstream industries. This is in line with the promise given by the chairman of Vedanta Group Anil Agarwal, regarding the establishment of the downstream aluminium park at Jharsuguda during his last visit to the state,” the senior vice president informed.
Stating that the proposed park would help promote the budding enterprises by utilizing molten or liquid alumina, the process would reduce the cost of producing different aluminium products like electrical appliances, aluminium extrusion and automobile parts.
“While the park is expected to house at least 10-15 medium size downstream units it would also lead to generate direct and indirect employment opportunity for around 13,000-18,500 people,” he said, adding, VAL was committed to enhance productivity through technical expertise, research and development (R&D) support, reliable and uninterrupted power supply and availability of raw materials. The location of the park near the VAL's smelter plant at Jharsuguda is expected to reduce the input cost for downstream products.
Jharsuguda is a cosmopolitan town that is fast emerging as the economic hub of western Orissa and there is a clear vision for the city developed by the state government. Currently, many small and medium-scale steel units are being set up in the town vicinity.
“The proposed location of this aluminium park would be cost advantageous because it has such facilities as impressive transport system, land availability, availability of power supply and skilled labour,” Samal remarked.
         EMAL fires up its Taweelah smelter
 
AKilometres of production lines have sprung to life at the US$5.7 billion (Dh20.93bn) smelter operated by Emirates Aluminium (EMAL) in Taweelah, giving the firm a cash flow early next year but also putting it at the mercy of volatile commodity and debt markets.
The firm's chief executive, Duncan Hedditch, said it is in the final stages of raising $700 million from an export credit agency and would not face difficulties in funding what could become the world's largest aluminium production facility. However, he backed away from a spring timeline for a bond put forward by another EMAL executive, saying the firm faced “no time or other pressure”.
“Currently we're project-financed and now we're moving into operations, so we need to set up the financial gearing to support the business and deliver the performance we want,” he said. “The bond is a market timing thing. You just watch and wait until the timing and prices suit.”
Asked whether EMAL's financing would be affected by fallout from the debt standstill request by Dubai World, Hedditch said he was confident that financiers “understand what this business is”. “I guess we're relatively insulated from a lot of things happening in the marketplace,” he said.
The company's chief financial officer, Bill Campbell, said that EMAL would issue a $700m amortising bond in March or April next year and, in addition to funds from the export credit agency, would raise $600m from cash savings or from equity holders Dubai Aluminium and Mubadala Development. EMAL produced its first aluminium on December 1 and will gradually increase production throughout next year as it activates each of the smelter's 756 production cells. Ten were operating as of last Thursday, Hedditch said.
“We're still in start-up through next year. We'll only produce, in total volume, half of our full capacity because you start from zero and ramp up,” he said. The smelter can produce slightly more than 700,000 tons of metal a year. A second-stage expansion would double capacity and would be likely to cost less because it would be built more efficiently and probably on better financial terms, Hedditch said.“It's quite different from phase one. Phase one, we were a project; phase two, we've already got an operating business,” he said. “We'll have a track record.” EMAL's board is expected to make an investment decision on the project by the middle of next year. By then Hedditch may have left the company as he has plans to return to Australia.
Analysts have warned in recent months that the price of aluminium is being inflated above its true value by speculators and is due for a correction. They point to the large amount of metal in storage and the start-up next year of several major smelters.
Hedditch said he was not concerned about a price bubble. “It seems as if there has certainly been some use of metal as a financial hedge, but that's also not unusual in this market,” he said. “The volume of it appears to be a little larger than historically, but there's nothing about that, to me, which is terribly alarming.
         HCL, India's Govt plan share sale
 
RHindustan Copper Ltd., India's largest state-owned producer, and the government plan to sell as much as $873 million of stock as part of a record sell-off of assets.
The government aims to offload 10 percent from its 99.59 percent holding by December, Chairman and Managing Director Shakeel Ahmed said. Hindustan Copper has sought federal approval to sell a similar stake, he said. The Kolkata- based company's shares rose as much as 7.8 percent.
India has 60 state-run companies including Steel Authority of India Ltd. and Bharat Sanchar Nigam Ltd. in which it can sell stakes to build roads, ports and utilities, the finance ministry said in November. The shares of Hindustan Copper, the sole owner of copper mines in India, almost tripled last year as demand revived for the metal used to make cars and electric wires.
“Metals are on fire so investors will be more than happy to buy the shares as very few are available now,” said Sanjay Makhija, head of institutional sales at Fortune Financial Services India Ltd. in Mumbai. “Also, this is the only one that has mines, so it can always expand when it wants to.

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