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Dear readers,


The global meltdown process is still on and many companies, especially in the developed world are struggling to survive. The US-EU economies were supposed to be stagnated even before the meltdown and now they are in deep trouble. Experts feel that this recession will continue for 3 to 5 years and this is also quite optimistic projection as far as western world is concerned.
Even in Asia, gulf region is badly affected as the growth there was mainly connected with construction boom and the overseas investment. The non-oil sector industries which developed and were flourishing in this region were mainly supplying to construction industry. Thus when this industry was into problem, other industries too followed the path. Today, the condition in major cities is such that many families have left the country keeping behind their empty homes, unescorted cars and most importantly, huge credit card debts.
The reason to narrate this bit exhaustively is that in India the situation is quite different. Yes, the GDP growth has slowed down, auto production and sale is down, steel & metals production has drastically reduced but at the same time, things have not come to stand still. Jan 09 manufacturing figures are better than Dec 08. In fact if you go through this issue, you will find a lot of companies going ahead with their proposed expansion plans. This is quite significant compared to the situation in other parts of the world. Even Indian government has announced that the country's GDP is expected to grow at around 6.5 to 7.0 % even in 2009. One has to consider that most of the other countries are struggling to 'achieve' even 0 % growth.
A similar situation prevails in non-ferrous metals sector. Even though there is a temporary slowdown there is enough optimism in the industry and in my opinion, this is the most important raw material for any industry to grow.

D.A.Chandekar
Editor & CEO

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HZL to set up silver refinery at Pantnagar

NALCO to start work on Orissa aluminium project

Archean, EBH tie up for aluminium plant

Vedanta Resources Q3 revenues dip 31%

Hydro Aluminium plant Neuss may close

Rio Tinto set to cut more in output

NALCO slashes aluminium prices by Rs 3,500 a ton

HZL plans to increase output

Japan primary aluminium market may hit hard in 2009

NALCO to set up alumina refinery in Andhra

Rio complete $125 mln China aluminium smelter sale

JSW Aluminium ties up funds for Rs 4,000-Cr Vizag Plant

Boliden to cut copper production

Miners losing jobs in US

Aluminium inventory reaches at all time high on LME

Kazakhmys to reduce copper output up To 15%

Grupo Mexico may reduce booked copper contracts

Physical nickel premiums up

Corus signs agreement with Klesch for sale of aluminium smelters

Rusal sees weak demand for aluminium in 2009

BHP Billiton expected to announce cost cuts

Chinalco lining up $20 bln investment in Rio

China to buy copper overseas for reserves

Chelyabinsk Zinc 2008 production up by 0.6 % YoY

Alcoa reports $1.19 bln loss in Q4; may again cut production

Sterlite to acquire Asarco

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HZL to set up silver refinery at Pantnagar

Hindustan Zinc Ltd, a subsidiary of Vedanta Group, will set up a silver refinery plant at the Pantnagar industrial estate in Uttarakhand with an investment of Rs 100 crore. The production at the plant is likely to commence before March 2010, the deadline for getting benefits under the special industrial package offering a slew of tax incentives in Uttarakhand.
The company's officials are working out various plans to set up the new unit, meanwhile they did not reveal any detail about the plan. This will be the second plant of Hindustan Zinc in the state, where it has already set up a unit at the Haridwar integrated industrial area to produce zinc ingot.
According to a top government official, the company's decision to set up the new plant was highly appreciable, especially at a time when the world is reeling under the impact of the recession.  

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NALCO to start work on Orissa aluminium project

After receiving an in-principle approval from the Orissa government, National Aluminium Co (NALCO) is set to start preliminary work on its second aluminium project, a Rs 16,000-crore greenfield venture for a smelter-cum-power plant, in Orissa.
" We have received necessary approvals from the state government for the Jharsuguda project. This will allow us to start an environment impact study for the project," said a top official of the company. This will be followed by detailed studies on availability of water and land assessment in the area.
NALCO's proposed 5 lakh ton smelter in Jharsuguda will be its second aluminium project in the state. The state-owned aluminium major already operates a smelter and a thermal power plant and alumina refinery at Angul and Damanjodi, respectively. The new project is part of the navratna PSU's ambitious plans to invest Rs 40,000 crore in a series of projects in the next few years.
“There is hardly any private land in the proposed location of the project. Most of it is forest land,” the source added. The choice of the site is perhaps linked to the company's plans to get coal linkage from Orissa's prolific Ib Valley deposits to fuel its 1,250 MW thermal power unit. “We expect to start delivery in the 12th Plan period,” the source said.
The proposed new project will use alumina from Nalco's existing refinery at Damanjodi. With completion of Nalco's expansion programme, the latter unit is envisaged to see an increase in capacity from over 15 lakh ton to around 21 lakh ton.
Despite metal prices crashing globally in the wake of a worldwide recession, NALCO is keen to maintain production levels. Though profitability has been hit, as one of the lowest cost producers of alumina, NALCO is in a position to recover a margin from its production.

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Archean, EBH tie up for aluminium plant  

India's Archean group of companies has formed a joint venture with Bahrain's EBH Holdings to establish Pearl Industrial Chemicals company (PIC), a $100 million firm for manufacturing aluminium fluoride.
PIC will be located at the South Alba Industrial Estate and will start production in two years. The environment-friendly plant is set to hire about 150 technical and non-technical personnel, around 100 of whom will be Bahraini nationals, according to PIC chief executive officer C.George John. Once fully operational, the plant is expected to produce 60,000 metric tons of aluminium fluoride annually, which is a critical chemical ingredient in the aluminium-smelting process, said Chennai-based Archean group executive director C.G. Sethuram. “This chemical is currently being imported by Alba and other smelters in the region like Sohar Aluminium, Oman. Of the 30,000 tons to be produced by the Bahrain plant in the first phase, 18,000 tons will be bought by Alba,” he said.

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Vedanta Resources Q3 revenues dip 31%  

Multi billionaire Anil Agarwal led Vedanta Resources Plc announced 31 percent decline in revenues at $1.30 billion for the third quarter ended December 31, against $ 1.88 billion in same period last fiscal, on sharp fall in metal prices amid economic recessionary period.
Impacted by inventory write-downs to the tune of $ 104 million, Vedanta's Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) dropped over 98 per cent to $ 10.1 million in third quarter this fiscal. The earnings also suffered from negative provisional pricing adjustments of $ 47 million and currency translation losses of about $ 34 million.
Anil Agarwal-led Vedanta's EBITDA had stood at $ 671.5 million for the third quarter ended December in 2007.
Further, the record production volumes of zinc and aluminium and record sales of iron ore were primarily offset by steep falls in commodity prices as well as negative provisional pricing adjustments and write-down of inventories to their net realisable value, the statement said. Vedanta's aluminium production in the third quarter was a record 122,000 tons, a 23 per cent increase over the corresponding quarter, primarily due to the ramp-up and stepped commissioning of the first phase of the 500,000 tons per annum (tpa) Jharsuguda aluminium smelter etc.   

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Hydro Aluminium plant Neuss may close

Hydro Aluminium, the German unit of Norwegian group Norsk Hydro, said the future of its aluminium plant at Neuss in Central German is under threat because of high energy costs.
The company said it cut production of primary aluminium at the Neuss smelter by 30,000 tons by end January because of falling demand. The plant produces about 200,000 tons annually.
Hydro Aluminium said the plant's future was under acute threat because of high German electricity costs.
"What we now urgently require is a close operation between the political level and the electricity industry to meet the needs of the energy intensive industrial sector such has long been the case in Italy, France and Spain," Hydro Aluminium chief executive Irmtraud Pawlik said. It called for a flexible electricity supply agreement with utilities in which its Neuss plant could withdraw from the network for several hours in periods when there were shortages of renewable energy such as wind and solar power.
The company also called for political action to reduce the cost of carbon dioxide emission certificates.

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Rio Tinto set to cut more in output

Rio Tinto, the world's one of the biggest miners, have decided to another cut in its aluminium production in the wake of weak demand and a steep drop in the price of metal.
The company will cuts its aluminium production for 2009 by 11 percent, compared with previously announced cutbacks of 5 percent, representing a 450,000 ton reduction in metal production. This would come through the early closure of the Beauharnois smelter in Quebec, which has been in operation since 1943 and was due to close by 2015 on environmental grounds, as well as output cutbacks at several smelters in France, Norway and the UK .The company is also reducing its production of alumina, the main raw material for aluminium, by 6 per cent. The cuts will lead to 1,100 job losses, comprising 300 contractors and 800 Rio employees, part of Rio's decision late last year to cut 14,000 jobs or 13 per cent of its global workforce.
The company is under pressure to cut costs and conserve cash following a steep fall in commodities prices, which has squeezed profits and raised concerns that Rio cannot service is $37bn debt burden.

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NALCO slashes aluminium prices by Rs 3,500 a ton

NALCO, India's leading aluminium producer, cut prices of its products by up to Rs 3,500 a ton after the rates of metal softened on the London Metal Exchange.
"We have reduced prices of all our products by Rs 3,500 a ton following movement of the metal on the London Metal Exchange," C R Pradhan, CMD, NALCO, said. Aluminium prices have slipped by more than 50 percent in the wake of weak demand, especially from the automotive and construction sectors, amid the global economic slowdown. The country's largest alumina producer expects the prices of raw material stabilising at about $200-250 per ton and that of aluminium at $1,700-1,800 per ton. The company, which has lined up multi-billion dollars investment plans in India and overseas, had seen aluminium prices touching the peak of $3,800 a ton earlier, last year.

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HZL plans to increase output

India's top zinc maker Hindustan Zinc Ltd (HZL) plans to increase output in coming quarters, taking advantage of its low production costs even as global demand for metals slowdown.
“We are planning to maintain our production at current level or slightly higher if possible," said a top official from the company. HZL posted earning for the third quarter ended December 31, showing profit of 3.69 billion rupees, down 55 percent on the year. The company produced 151,735 tons of zinc in September to December, up 46 percent year-on year. “We have a very low cost structure, which is why we are able to actually produce in this environment," the official said. The current slowdown in economy has slashed demand for metals. The official said that the company had exported more in the quarter just past as it had found enough buyers while other manufacturers had cut production.

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Japan primary aluminium market may hit hard in 2009 

Global economic slowdown will hit Japan's primary aluminium market this year, Japanese trading houses Mitsubishi Shoji Light Metal Sales and Sumitomo Corporation said in 2009 market forecasts.
In separate reports, the trading firms say Japan's aluminium demand for 2009 to decline 5 to 9 percent from 2008 due to bleak future for the automotive and construction sectors. Although the trade firms anticipated different 2009 growth rate projections, Mitsubishi down 5.9 percent and Sumitomo down 8.7 percent from 2008, both said Japan would post highest negative growth of any aluminium market in the world. Mitsubishi forecast Japanese demand at 2.25 million tons in 2009, down from 2.39 million tons in 2008, and Sumitomo at 2.1 million tons in 2009, down from 2.3 million tons in 2008. The firms also said that North American demand to fall 4.6 to 4.8 percent in 2009 to 5.2-6 million tons, and European demand to fall 2.2-2.7 percent to 7.1-8.8 million tons. Mitsubishi projected 2009 global demand edging down 0.3 percent to 38.63 million tons, while Sumitomo saw it picking up a marginal by 0.1 percent to 39 million tons.

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NALCO to set up alumina refinery in Andhra

The country's leading aluminium producer NALCO will set up a 14 lakh ton alumina refinery near Vizag as soon as it gets mining rights over two bauxite blocks in Andhra Pradesh. The company will invest about Rs 4,000 crore for the project.
"We have proposed to set up a 1.4-MTPA alumina refinery near Vizag at an estimated investment of Rs 4,000 crore. But before that we are awaiting mining rights for two bauxite located in the region," NALCO CMD C R Pradhan said. The company expects to develop the mines and complete the alumina refinery project in five years. The largest alumina producer and exporter has about multi-billion dollar expansion plan lined up in India and overseas. By the end of last fiscal, the company's Damanjodi plant produced 15.75 lakh tons of alumina, while Angul plant's aluminium production accounted for 15.75 lakh tons.
Due to weak demand especially from automobile and construction sectors, aluminium prices plummeted by over 50 percent from the peak of about $3,800 a ton. Alumina prices have also came down to about $200 per ton mark and the firm hopes it to stabilise at that level.
"Aluminium prices are likely to stabilise at about $200-250 a ton mark where as aluminium at about $1,700-1,800 per ton," Pradhan said.
Hit by the slowdown, the industry is likely to witness lower profit in third quarter of this fiscal as against the year-ago period, he said.

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Rio complete $125 mln China aluminium smelter sale

Rio Tinto Plc sold its half-stake in a Chinese aluminium smelting business to partner Qingtongxia Aluminium for $125 million.
Rio, which is trying to sell up to $30 billion in assets to pay off debt, acquired the stake in the Alcan Ningxia joint venture, capable of supplying up to 160,000 tons of aluminium smelting capacity a year, when it bought Canada-based aluminium group Alcan in late 2007.

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JSW Aluminium ties up funds for Rs 4,000-Cr Vizag Plant

JSW Aluminium is planning to raise Rs 3000 crore from financial institution to part fund its proposed alumina plant in Vizianagaram district of Andhra Pradesh. The remaining Rs 1000 crore would be met through internal accruals as promoters equity. JSW has proposed to set up 1.5 million ton alumina project in Andhra Pradesh at an investment of Rs 4000 crore. In its financial closure recently, the company appointed ICICI as lead bank and has lined up 10-12 other banks for funding. The government has allotted about 960 acres to JSW for setting up the refinery. Of this, about 130 acres is government land, for which JSW paid Rs 2 lakh an acre. The assigned land comprises 830 acres and the company paid Rs 2 lakh an acre to land occupants and Rs 75,000 an acre to the state government. JSW has also offered about Rs 2 lakh worth of company shares on each acre to the occupants and a job to each land loser family. Apart from the allotted land, JSW has acquired about 150 acres directly from farmers by paying Rs 3-5 lakh per acre.

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Boliden to cut copper production

Swedish copper and zinc miner and smelter Boliden has decided to cut its copper production at its Swedish and Finnish smelters. The firm said in a statement it would cut production by around 17,000 tons in the first quarter. In 2007, Boliden produced around 300,000 tons of copper.

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Miners losing jobs in US

All over North and South America, miners are losing their jobs as the recession hits demand for metals that enjoyed a boom in recent years. In Chile, where copper mining is a major contributor to the economy, unions estimated 14,000 jobs have been lost. Peru reported more than 5,000 layoffs and Mexico put the number of out-of-work mine workers at 2,000. In the United States, Freeport McMoRan Copper & Gold Inc, said it is laying-off 3,000 workers, many of them at its Morenci mine in Arizona, where it is reducing operations to cut costs as copper prices have plummeted. Canadian government data show payrolls in the coal, metal and nonmetallic mineral sector fell 11.5 percent in the second half of 2008, as falling metals prices prompted mine closures and smaller exploration budgets. The economic downturn is hitting particularly hard in Latin America, where economies depend on mineral wealth. Chile's Sonami mining group estimates at least 14,000 jobs have been lost. BHP Billiton Ltd, the world's largest diversified miner, has already cut 2,000 people from its Chile operations alone. That came on the heels of other job cuts announced by Chile's Antofagasta Minerals. Chile's government has committed $1 billion in capital injection for Codelco, the state-owned copper producer that employs more than 40,000 workers. Codelco is not expected to turn to lay-offs like the private sector. Peru's National Federation of Mine and Steel Workers says more than 5,500 workers have lost jobs since December, while the Labor Ministry says at least 4,000. Mexico's Mining Chamber says about 2,000 jobs have been lost. Some smaller projects have been cut, but major miners, Grupo Mexico, Penoles and its precious metals miner Fresnillo, and GoldCorp Inc have not announced cutbacks yet.

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Aluminium inventory reaches at all time high on LME

Aluminium inventories on the London Metal Exchange (LME) have reached all time highs due to constant falling demand from automobile and construction sectors — major contributors to the metal's demand worldwide. The current inventory pile-up is at 2.81 million tons, a level never seen in the past. However, the inventory zoomed past 2.4 million level in 1993-94. The inventory position has actually changed dramatically since September 2008 as they have risen by 108 percent in the past four months. Experts believe that the inventory could remain at these levels and may not change for some time now. Demand reduction could continue as the global economy sees no signs of revival. This would lead to inventory losses and could further see a drop in the prices of the metal. Both auto and construction sectors cater to the aluminium demand and a drop in these sectors worldwide is evident and the effect on the commodity prices is quite visible. National Aluminium Company (NALCO), a leading aluminium player in India, stated that the firm's inventory has increased over 100 percent in the last nine months of the current financial year. The company carried a closing inventory of 5,000 tons of aluminium at the end of 2007-08. Considering the present glut in the market, the company anticipated the stockpiles to reach as high as 30,000 tons by the year-end. Internationally, such an inventory rise has resulted in a supply-side response. According to brokerage house CLSA, the aluminium sector has witnessed production cut announcements of around 4 million tons in the past few months. Some of the smaller smelters have actually had to shut shop citing lack of demand as the reason. Industry majors such as Brazil's Vale and Chinese Chalco have cut back on production by about 57,000 and 7, 20,000 tons, respectively. The CLSA report further states that though the alumina prices and energy costs have resulted in the aluminium cost curve moving down in recent months, improvement in prices is unlikely as there has been a drastic decline in demand. Global unwrought aluminium stocks rose to 1.676 million tonnes at the end of December from an upwardly revised 1.605 million tons in November. Unwrought stocks stood at 1.553 million tons in December 2007, provisional International Aluminium Institute (IAI) figures showed. Total aluminium smelter stocks excluding finished end-products rose to 2.959 million tons at the end of December from 2.942 million tons in November and 2.848 million tons in December 2007.

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Kazakhmys to reduce copper output up To 15%

Kazakhmys Plc, Kazakhstan's biggest copper miner, may cut output by 10 to 15 percent this year and reduce spending by $250 million as demand for the metal slumps. The company may also lower salaries or working hours at some mines after suspending production at three 'higher cost' operations, London-based Kazakhmys said in a statement. Kazakhmys, like competing miners, is scrambling to reduce costs as demand and metal prices slump. The company announced a suspension of 'marginal' activities on Oct. 30, joining the likes of Freeport-McMoRan Copper & Gold Inc. in slashing output. Freeport, the world's largest publicly traded producer of copper, has fired a fifth of its US workers, halted dividends and reduced production. Grupo Mexico SAB, the country's largest miner, may lower the value of booked fourth- quarter copper sales by as much as $400 million. For the fourth quarter of 2008, Kazakhmys said production of finished copper plates, or cathodes, rose to 105,500 metric tons from 103,100 tons a year earlier. Output for 2008 was 378,100 tons, higher than the company's prior forecast of 341,000 tons. The world's production of copper, used in plumbing and electrical wiring, will exceed demand by 652,000 tons next year, up from a surplus of 288,000 tons this year, Citigroup forecast in a report. The miner's fourth-quarter zinc production increased to 32,800 tons from 31,600 tons last year, while silver output gained to 4.6 million ounces from 4.15 million ounces.

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Grupo Mexico may reduce booked copper contracts

Grupo Mexico SAB, the largest mining company in Mexico, may reduce the value of its booked copper sales in the fourth quarter by as much as $400 million, driving down profit after prices plunged. Grupo Mexico records sales under a method known as provisional pricing, where sales on copper concentrate are booked at the time of shipment and then altered to reflect the market price when payment is received from refiners. The adjustment may be offset by hedges and exchange-rate fluctuations. The pricing adjustment could cause Grupo Mexico's net income to fall 62 percent to $80 million in the quarter. The company may cut the price of recorded sales of copper and molybdenum by $231 million. The adjustments are limited to the fourth quarter and are unlikely to be repeated.

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Physical nickel premiums up

Physical nickel premiums in Europe improved this month from the lows in the fourth quarter but are still below levels typically seen at this time of year due to weak demand and Russian exports, physical traders said. “There has been a pick-up from the fourth quarter to the first quarter but nothing major,” said a physical trader who described the fourth quarter as “miserable.” China came back into the market at the end of November and some buyers bought the metal in expectation that prices will pick up. Physical premiums, the amount paid for metal delivery above the cash price on the LME, were around $50-150 per ton for uncut nickel cathode, unchanged from mid November, but down from $100-200 at the end of July. Another physical trader said the market is still very poor and that activity is slowing down as nickel stocks on the LME climb above 80,000 tons. Meanwhile, inventories on the LME-registered warehouses zoomed at 81,966 tons, the highest level since July 1995. There's a lot of nickel coming from Russia. Nickel producers have cut output and postponed future projects, but these measures have been insufficient so far to lift prices amid the slump in demand. Prices for three-month nickel on the LME have plummeted almost 80 percent from a record high of $51,800 per ton in May 2007 to around $11,350 now. They have traded below $14,000 since the start of October 2008. Two thirds of all nickel produced globally finds its way into the stainless steel sector, where it is used in construction and to make products such as sinks and kitchen appliances. In a note earlier this month Macquarie Research estimated that world stainless steel production fell almost 30 percent year-on-year in the final quarter of 2008.

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Corus signs agreement with Klesch for sale of aluminium smelters  

Tata Steel's European unit Corus sold its aluminium smelters to Briand Investments, an affiliate of London-based investment Klesch & Co.
Tata Steel's UK based subsidiary Corus has signed Share Purchase Agreement (SPA) with Klesch & Company for the acquisition of Corus' aluminium smelters by Briand Investments, an affiliate of Klesch.
The financial terms of the agreement were not disclosed. The signing follows completion of the internal consultation and advice process and the receipt of necessary regulatory clearance. Completion of transaction is subject to certain conditions being fulfilled by both parties.

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Rusal sees weak demand for aluminium in 2009

 Oleg Deripaska, Head of RusAl announced that as the result main metallurgical plants will have to cut expenses or close. "There is an excess of aluminium supply. I think we will see absolutely different market situation in next nine months, which will remain for next 7-10 years", said Deripaska. According to him, aluminium price will make USD 16,000 per ton in next 7 years.
The company head also said that demand for aluminium will fall from 36.5 million tons in 2008 to 28 million tons in 2009. "We have to face reality which shows that we should not expect prices surge." said Deripaska. “The only way to survive is to be more effective and RusAl in 2009 will become the most effective metallurgical company in the world. And it can be achieved by expenses cut and the company's capacities rearrangement.”
He emphasized that the only way to survive in current conditions is to decrease expenses. In December RusAl's management announced prescheduled suspension of aluminium production at two electrolysis series of Bogoslovsk Aluminium Smelter and at two series of Ural Aluminium Smelter in Sverdlovsk region, which decrease aluminium production by 2 percent.

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BHP Billiton expected to announce cost cuts

Global miner BHP Billiton Ltd is expected to announce cost-cutting measures, which may include project deferrals, as part of its first half results.
According to a media report, due to the weak demand in the international market, the company will hold developments and focus on cost-cuttings at its operations. Analysts expect BHP Billiton to report a first half profit of up to $10 billion.
The company shut and wrote down the value of its Ravensthorpe nickel mine in Western Australia last month after a significant drop in the price of nickel, which is primarily used in the production of stainless steel.

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Chinalco lining up $20 bln investment in Rio

Chinese state-owned aluminium group Chinalco is lining up a $20 billion deal with Rio Tinto, which would increase its stake in the global miner to between 15 and 20 percent.
Rio Tinto, the world's third biggest diversified mining group by market value, confirmed about the deal and said it was in talks about Chinalco possibly buying stakes in Rio's operations and investing in convertible instruments. A Rio spokesman declined to comment on speculation on the size of any deal with Chinalco or other details such as which of Rio's mines the Chinese firm might invest in.
With Rio looking to ease its debt burden of around $39 billion, analysts said discussions likely centred on Rio's prime iron ore mines in Australia's Pilbara region as well as operations in aluminium and raw material alumina in the same country.
Rio already has a 60-40 joint venture on its Channar iron ore mine in the Pilbara with China's Sinosteel. If the Chinalco deal was worth $20 billion -- higher than an estimate of $15 billion - that would pay off around half Rio's debts which have weighed on its shares as investors worry about repayments amid the global downturn.

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China to buy copper overseas for reserves

China, the world's biggest copper consumer, will buy the metal overseas to boost state stockpiles, said Wang Chiwei, executive director and vice president, Jiangxi Copper Co. “China will buy copper for its reserves,'' said Wang Chiwei, “Purchases would suit national interests. The question is when and how to buy it.''
Copper has down by more than half from a record $8,940 a metric ton in July as a spreading global recession slashed demand for raw materials. The State Reserve Bureau is buying zinc and aluminum from local smelters to support the industry as the economy probably expands at the slowest pace in seven years.
“Prices are attractive and the bureau would adopt a flexible approach and the purchases wouldn't be made all at once, '' said Jiangxi's Wang. China is unlikely to buy copper from local smelters, Wang said.

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Chelyabinsk Zinc 2008 production up by 0.6 % YoY 

Chelyabinsk Zinc Plant, Russia's largest producer of zinc and zinc alloys, produced 166,064 tons of SHG zinc and zinc based alloys, an increase of 0.6 percent as compared to the same period of 2007. 51.5 percent of zinc sales were made on the domestic market. CZP's subsidiary, Nova Zinc LLC, operator of Akzhal zinc and lead mine in Kazakhstan, processed 1330,5000 of ore in January to December of 2008, 3.8percent more than for the same period of 2007. Average zinc content in the ore for the twelve months of 2008 was 2.67percent with average lead content of 0.54percent, compared to 2.54percent and 0.46percent respectively a year ago. Production of zinc in zinc concentrate for the twelve months of 2008 increased 7.8percent to 32,348 tons over the prior year result of the same period of 30,002 tons. Lead in lead concentrate production increased by 20percent to 5,747 tons.
CZP's subsidiary, The Brock Metal Company Limited sold 25,470 tons of products January through December 2008, 14.6percent less than for the same period of 2007.

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Alcoa reports $1.19 bln loss in Q4; may again cut production

Alcoa, the world's third largest producer of aluminium, registered loss of $1.19 billion during fourth quarter of 2008. Due to the worsening global economy, the impact in major aluminium markets particularly from the automotive and construction sectors saw the price of aluminium declining by 35 percent. In June, Alcoa had already cut 18 percent of its alumina and aluminium capacity due to low demand and prices, but experts feel that Alcoa may have to make more than the present 18 percent cut in production as the global financial situation is not going to improve for a long time.
Klaus Kleinfeld, president and CEO of Alcoa said that if prices for aluminum do not improve in the coming months, then Alco may make deeper cuts in production.
In its earnings release, Alcoa said ''Income from continuing operations for the fourth quarter 2008 showed a loss of $929 million, or $1.16 per share, which includes restructuring, impairment, and other special charges of $708 million or $0.88 per share. ''We are taking wide-ranging measures to address the economic downturn,'' said Klaus Kleinfeld, ''We have streamlined our portfolio to focus on businesses where Alcoa is the recognised leader, curtailed production to adjust to weakened demand, reduced global headcount, and achieved significant savings in key raw materials.
Kleinfeld also said that the company will cut or suspend its dividend as the Alcoa had a history of paying dividend for the past 60 years. Looking to the future, Kleinfeld said, ''Once the economy stabilizes, the global megatrends – demographics, urbanization and environmental stewardship – will all drive opportunities for our core products. Aluminum has the ideal combination of strength, light weight and infinite recyclability to help countries rebuild their infrastructures for the 21st century. We are extremely well positioned to seize those opportunities.''
Alcoa World Alumina & Chemicals, the joint venture company of Alcoa and Alumina, has put off its $1.8 billion expansion of the Jamaica refinery.
Alcoa had also announced early this year that it will reduce its workforce by 15,000 and put a freeze on salaries and new hires. Out of the 15,000 job cuts announced, 4,000-5,000 will come from North America, 4,400 in Europe and the rest from elsewhere including 1,70.

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Sterlite to acquire Asarco 

Sterlite Industries (India) Ltd. is close to signing a contract to buy Asarco LLC, potentially ending the U.S. miner’s four-year- old bankruptcy, said a media report.
The companies have agreed on a dollar value for the sale of Asarco’s assets and other major points of a proposed contract, said the report citing two people, who declined to be identified.
Sterlite would pay less than the $2.6 billion it had offered for Tucson, Arizona-based Asarco last year before copper prices declined. The original sale was the centerpiece of the plan by Asarco’s managers to reorganize the company, pay creditors most of what they are owed and allow the miner to leave court supervision intact after four years in bankruptcy.
Asarco’s parent, Grupo Mexico SAB, would benefit from the sale “as long as the company is bought in full, and all the liabilities are canceled in full,” said an analyst with Ixe Casa de Bolsa SA in Mexico City.
Sterlite Spokesman Sumanth Cidambi declined to comment.
Mumbai-based Sterlite pulled out of the original sale in October saying changes in the copper market no longer justified the price. Copper has plunged 64 percent from a May 5 high of $4.2605 a pound on the Comex division of the New York Mercantile Exchange.
Asarco, Sterlite and a unit of Grupo Mexico were ordered into mediation last year by the judge overseeing the bankruptcy case. At least two other bidders have said they are interested in buying Asarco’s assets.
Grupo Mexico put Asarco into bankruptcy in 2005 and lost control of the unit when a judge appointed an independent board. Since then, Grupo Mexico has feuded with Asarco managers and tried unsuccessfully to persuade U.S. Bankruptcy Judge Richard Schmidt to give back control of Asarco.
Asarco Chief Executive Officer Joseph Lapinsky declined to comment.

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