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        NALCO lines up Rs22,000 -core expansion plans  
 
Indian aluminium producer National Aluminium Company Limited (NALCO) has proposed investment totalling about Rs22,045 crore to establish mines and refinery project in Visakhapatnam and an aluminium smelter and coal-based captive power plant at Brajarajnagar in Orissa as a part of its expansion plan.
The plan involves expansion of NALCO's bauxite mining capacity to 42,00,000 tons per year and raising its aluminium smelter capacity to 5,00,000 tons per year. The aluminium smelter will come up in Jharsuguda, Orissa along with a 1,260 MW captive power plant at an estimated investment of Rs16,345 crore. NALCO has recently been given bauxite mines in Andhra Pradesh with a capacity of 42 lakh tons per year.
NALCO's alumina plant capacity is expected to rise to 14,00,000 tons per year post expansion. The plant will be set up in Visakhapatnam, Andhra Pradesh, at a cost of about Rs5,700 crore, mines minister B K Handique had earlier said. Besides, the company is setting up a captive power plant of 1260 mega Watt capacity, in two phases. NALCO said it has already released Rs17 lakh of the Rs2 crore earmarked for pre-project activities in Andhra Pradesh and Rs40 lakh of the Rs2 crore earmarked for the Orissa project as of 25 November 2009.
"NALCO has informed that they propose to establish mines and refinery project in Visakhapatnam, Andhra Pradesh and an aluminium smelter plant and coal-based captive power plant at Brajarajnagar in Jharsuguda, Orissa as a part of its expansion plan in India," Handique added.
         Vedanta Resources may list aluminium subsidiary
 
Billionaire Anil Agarwal-promoted Vedanta Resources plans to list its aluminum business subsidiary Vedanta Aluminum this year.
The London-listed holding company of India's largest diversified mining group is on a listing spree. Another group company, Sterlite Energy, is awaiting approval for its initial public offer (IPO) to raise Rs 5,100 crore.
“Vedanta Aluminium is considering to raise funds for expansion through an IPO,” said an investment banker familiar with the development. “The company can be listed on the London or Hong Kong stock exchanges to get better valuation through exposure to larger investor groups,” the source added. He did not specify the amount the company is aiming to raise through the IPO. Usually, such offers take three-six months' time for getting the required approvals and completing all the formalities. Executives at the company did not respond to queries from this paper.
Vedanta Aluminium has a $7.8-billion investment plan to increase its fully integrated aluminium smelting capacity to nearly 2.6 million tons per annum (mtpa) by 2012. Upon completion, the company is expected to become Asia's largest integrated producer of aluminium. It will also become one of the top five aluminium producers worldwide.
The company is expected to commission the second phase of a 500,000 ton-per-annum aluminium smelter with a 1,215-Mw captive power plant at Jharsuguda in Orissa by the end of the current financial year. Earlier, it commissioned a 1.4-mtpa greenfield alumina refinery project and an associate 90-Mw captive power plant at Lanjigarh in Orissa in 2007.
Vedanta Resources also has its aluminum business under Bharat Aluminum Company (BALCO) and Madras Aluminium Company (MALCO). Group company Sterlite Industries acquired a controlling stake of 51 percent in BALCO from the government in March 2001. The company is in arbitration talks with the government for the buy-out of the residual government stake in the company.
MALCO is another such company that was taken over by the group in 1995. The group has planned out its primary expansion plan for the base metal under Vedanta Aluminum, in which the group holding company has a 70.5 percent stake and its subsidiary, Sterlite Industries, owns another 29.5 percent. It plans to partly finance the $7.8-billion expansion plan through the IPO's proceeds.
         HZL profit rides on high LME prices and output
Hindustan Zinc Limited reported a 211 percent growth in profit after tax at Rs 1149 crore in the third quarter of 2009-10 ending December 31.
It comes along with 115 percent rise in net sales of Rs 2217 crore as against Rs 1031 crore as on December 31, 2008. The rise in revenue can be attributed to the hike in metal prices at LME. In Q3 2009, the average price of zinc at LME was $2211as against $1189 in the corresponding quarter last year. Similarly, the average lead price at LME in Q3-2009 was $2292 as against last year's $1251. During third quarter, the company achieved highest ever zinc and lead mined metal production of 199,729 tons. During the same period, refined zinc and lead metal production was 167,000 tons.
“Sales during the quarter were augmented by sales of 40,972 dry metric tons of surplus zinc concentrate. The company recorded its highest ever-saleable silver production at 35,633 kilograms, an increase of 44 percent compared with the corresponding prior quarter. The increase in production was primarily on account of higher silver content in the mined ore and better recoveries,” says Hindustan Zinc Limited COO Akhilesh Joshi.
The company is going aggressive on its expansion plans. “The construction work for the 210,000 tons of zinc and 100,000 tons of lead smelter at Rajpura Dariba with 160 MW associated captive power plant along with Rampura Agucha Mine expansion is likely to be completed by mid-2010. Rajasthan government has given green signal to the third phase of expansion at Rajpura Dariba in Rajasthan. Post completion of these projects, HZL would be the world's largest integrated zinc-lead producer with a total smelting capacity of 1,064,000 tons.
        Rio Tinto sees metals demand doubling in 15 years
 
Economic growth in China and India is likely to double global demand for aluminium, iron ore and copper over the next 15 years, requiring a big response from miners, a Rio Tinto official said.
Short-term demand was more difficult to gauge, Rio Tinto Chief Financial Officer Guy Elliott said, because of concerns over government stimulus packages and speculative activity linked to low interest rates. "For the longer term, I feel that the intensity of use of some materials in India and China will lead to a doubling in global demand for aluminium, iron ore and copper over the next 15 years," Elliott added.
"The demand will be so strong in the long term that it will require a great supply response. It is possible to see that this combination of demand and supply will elevate prices," he said. Rio Tinto is the world's second-largest iron ore miner and aims to boost production by 6 percent in 2010, encouraged by much higher spot prices as China's steel industry -- the world's largest -- gobbles up more raw materials. However, Rio Tinto is running some of its aluminium smelters at below capacity. Though aluminium prices have recovered from the depths of the global financial crisis, LME warehouse stocks worldwide are still above 4.6 million tons. Elliott said monetary policy in the United States was creating "a few concerns" for non-Chinese growth in demand for industrial metals.
“So a mixed picture in the short term," he told the conference, "but in the long term, there is a strong picture rising from increasing urbanisation of China and India."
         Hindalco to make aluminium cans in India
 
India's aluminium giant Hindalco Industries has finally decided to enter the beverage can business with the setting up of a new plant in Orissa.
According to reports, the company will produce cans for beverages and food giants like Coca-Cola and PepsiCo from its plant at Hirakud in Orissa. As part of the plan, the company has begun dismantling a closed plant of Novelis in Rogerstone, Britain, and intends to ship all key equipment to Hirakud.
The expansion for beverage can-making is scheduled to be complete by October next year. Canada-based Novelis was acquired by Hindalco for $6 billion in 2007. It had announced the closure of the Rogerstone plant in March 2009, following the economic downturn and a demand crash. With the closure, about 440 workers lost jobs. Also, the company had transferred the businesses Rogerstone would handle to Novelis' other plants in Europe. The move to transfer the Rogerstone plant to India is intended to make the group's beverages can production cost-effective. With the relocation, the company could cut costs by at least 20-30 percent. However, shipping of the end products back to Europe and the US would be costly.
Hindalco would be using the plant and technology of Novelis to make cans' body stock in India for the first time. Novelis is the world's leading maker of aluminium rolled products, used for making cans.
About 45 percent of Novelis' shipment is beverage cans. It produces an estimated 19 percent of the world's flat-rolled aluminium products and is the number one producer in Europe, South America and Asia, and the second-largest in North America. It is also the world leader in the recycling of used aluminum beverage cans. Land acquisition for the expansion has been completed and statutory clearances obtained. The technology agreement has been finalised with GAMI.
         Chelyabinsk zinc Q4 2009 output up
 
Russia's leading zinc producer Chelyabinsk Zinc Plant had increased output in the last quarter of 2009, although in the full year output fell.
Output of zinc and its alloys rose by 14.1 percent YoY in October to December 2009, but in the 12 months of last year output fell by 20 percent to 119,900 tons, said the company in a statement.
Chelyabinsk had to cut output last year along with other Russian metal producers because of the economic crisis, which reduced demand and lowered metals prices. But from the end of 2008 Chelyabinsk has implemented a series of cost cutting measures, which helped it to swing into profit in the first 9 months of 2009.
Russia's Urals Mining and Metals Company and the Russian Copper Company own a controlling stake in Chelyabinsk Zinc. UMMC has pledged to restore output at Chelyabinsk to pre crisis levels. Chelyabinsk said that it sold domestically 64 percent of the metal produced last year. Its Kazakh subsidiary, Nova Zinc LLC processed 1.19 million tons of ore in January to December 2009, 10.4 percent less than in the same period of 2008.
         Chinalco wants to buy copper mines
 
China plans to cash in on the soaring copper price by using its substantial reserves to snap up global assets while prices are low. Lu Youqing, vice-president of Aluminium Corp of China (Chinalco), said that the state-owned group was studying worldwide copper resources to identify the best investment opportunities.
"Copper is our next main development target," Lu said, citing Toronto-listed Ivanhoe Mines' copper-gold project in Mongolia as a potential target. Lu declined to comment on the amount of money that Chinalco has earmarked to make such purchases, however, he said the company is yet to enter talks with any potential sellers.
Copper prices have surged by 130 percent since the start of 2009, with the aluminium price up a more modest 44 percent, The positive outlook for copper prices prompted Chinalco to establish a subsidiary last year, China Copper Company. The unit now has about £5.4bn of assets, but there are no imminent plans to list the business separately, Liu said.
In June last year, Rio Tinto spurned Chinalco's proposed $19.5bn cash injection, which would have doubled the Chinese group's stake in the miner to 18 percent. Instead, Rio undertook a deeply-discounted rights issue and put its Australian iron ore assets into a joint venture with BHP Billiton. The European Union launched an antitrust probe into the proposed iron ore venture, which had been widely expected. Chinalco currently owns 9 percent of Rio Tinto and Mr Lu also denied the recent rumour that the company was about to sell its stake to China Investment Corp, China's sovereign wealth fund. Chinese companies spent more than $30bln buying foreign mines and oil deposits last year, as asset prices tumbled. Analysts are generally downbeat on prospects for the aluminium price, but more bullish on copper.
Chinalco also said yesterday that it had posted a profit in the second half of the year, compared with a loss in the first half of 2009. No profit figure was revealed, but the company's full-year sales rose 10 percent to 142bln yuan. In December, capacity utilisation at its aluminium operations exceeded 90 percent, with production costs falling 17 percent over the year.
         Vedanta plans $170-mln investment in Zambia's Konkola copper mine
Zambia's largest mining company and a unit of London-based Vedanta Resources Plc (Vedanta), Konkola Copper Mines (KCM) plans to invest $170 million in a copper plant in Chingola, about 410-km north of capital Lusaka.
KCM said that the new plant will be located near its Nchanga mines and will have a capacity to process 12 million tons of refractory ore per annum. The project needs to obtain approval from the Environmental Council of Zambia.
"The proposed project will be a stand-alone hydrometallurgical plant with its own support facilities such as crushing, milling, electro-winning, residual neutralisation and disposal," KCM said. Vedanta Resources Plc is a diversified FTSE 100 metals and mining major. The group produces aluminium, copper, zinc, lead, iron ore and commercial energy. Vedanta has operations in India, Zambia and Australia.
In Zambia, KCM has mining operations in Konkola, Nchanga and Nampundwe, with ore processing plants in Konkola and Nchanga. The miner has recently commissioned a state-of-the art copper smelter in Nchanga with a capacity of 300,000 tons per annum.
During the December quarter, KCM produced around 42,000 tons of copper cathodes compared to 25,000 tons in the corresponding quarter last year as a result of ramp up of the new Nchanga smelter. The unit's EBITDA for the quarter was $35.6 million compared with a loss of $159.4 million last year. The increase was primarily on account of higher copper prices which averaged around $6,640 per ton during the quarter, 69 per cent up over the December quarter in 2008.
KCM has been implementing a number of new projects to augment its annual copper output to 500,000 tons in the coming years.
Although, the company had set a production target of over 300,000 tons of copper in 2009-10, compared to 140,000 tons in the previous year, the company said that it is not likely to meet the target due to the global financial meltdown and slump in demand for the metal. The company's Konkola Deep Mine Project expansion is progressing as per schedule which is expected to be completed the end of 2012. On its completion, the Konkola mine is expected to produce up to 6 million tons of ore per annum from the present level of around 2 million tons.
A new acid plant has also been built in Nchanga with a capacity to produce 500 tons of sulphuric acid per day. Vedanta's Indian ventures include Bharat Aluminium Co Ltd, Hindustan Zinc Ltd, Madras Aluminium Co Ltd, Sterlite Industries Ltd and Sesa Goa Ltd.
         Xstrata posts record coal production; copper falls
 
Xstrata Plc, the largest exporter of coal used by power stations, said output of the fuel rose to a record in 2009 after buying two Colombian mines in March. The company's production of lead, nickel and zinc in concentrate also reached all-time highs, Zug, Switzerland-based Xstrata said in a statement.
China, which relies on coal for about 80 percent of its power output, said in last week of January that it faces a possible shortage until the end of March because of winter consumption. Demand from Asian electricity producers is growing, while supply is being restricted by rail and port bottlenecks in Australia and South Africa, Citigroup Inc. said in a report.
Xstrata is a major beneficiary of exceptionally strong conditions in coal markets and is expected to lock into annual price contracts in Q1 2010 which should help offset downside price risk in more volatile base metal markets. The company's output of thermal coal gained 13 percent to 82.6 million metric tons in 2009. Total production, including coking coal, advanced 11 percent to 95.2 million tons.
The company purchased the Prodeco coal assets in Colombia in March from Glencore International AG, its largest shareholder, for $2 billion. Glencore has an option to buy back the assets, which contributed 10.5 million tons of Xstrata's 2009 output. Xstrata plans to develop an $5.3 billion mining, port and rail facility in Queensland to benefit from coal demand. The Wandoan project, which may initially produce 30 million tons a year, aims to start exporting the fuel by 2014. Mined copper output at Xstrata, the fourth-largest producer of the metal, fell 5 percent to 906,898 tons on lower shipments from the Mt. Henry, Alumbrera and Antamina mines.
Nickel gained 5 percent to 57,052 tons on higher volumes from Raglan and Xstrata Nickel Australasia mines. Zinc in concentrate, an intermediate product shipped to smelters, rose 20 percent to 1.03 million tons.
         Kazakhmys Q4 copper down 25%
 
Kazakh copper producer Kazakhmys registered a 25 percent fall in fourth quarter copper production due to shutdowns and said the production target for this year would be largely flat.
"In 2010 ore output will be maintained at a similar level to 2009 and the target for cathode production will therefore again be just over 300,000 tons," said a report quoting Chief Executive Oleg Novachuk said. The London listed firm said production of copper cathodes from its own concentrate decreased to 68,100 tons in the three months to end December from 91,300 tons the same period the previous year.
Full year output fell 6.6 percent to 320,400 tons, over the firm's target of 315,000 tons, which had been increased from an initial 300,000 tons. In October, the company said fourth quarter output would fall due to maintenance work, but it was still on track to hit its full year target.
Kazakhmys posted a sharp fall in first-half profit due to weaker copper prices, but the decline was less than expected.
         Alcoa shut Italy aluminium plants by Feb 6.
 
U.S. aluminium major Alcoa Inc plans an orderly shutdown of its two Italian smelters by February 6, despite government efforts to find energy at a competitive price. But the company had committed to restarting one of the plants if it can secure cheap power and conditions are conducive.
         Japan 2009 aluminium shipments lowest since 1986
 
Japanese shipments of aluminium products amounted to 1.7 million tons in 2009, down 21.7 percent from the previous year, with the recovery looking mixed depending on the sector, The Japan Aluminium Association said. The association added that last year's shipment figure was the lowest since 1986.
Tetsu Takahashi, chairman of the association, said, "I think we can say that overall demand has recovered to a little over 80 percent (of a peak year) just as we expected ... however, the pace of the recovery varies between sectors."
Japan's demand for industrial metals, including aluminium, tumbled from late 2008 due to the global economic downturn, which forced automakers and other top manufacturers to cut production. "The recovery in the automobile sector has been solid, but construction demand remains slumped and cannot be described as having recovered," Takahashi said.
Industry officials remain worried about the pace of recovery from this year as Japan's economy remains fragile. Japanese shipments of aluminium products rose 9.1 percent in December from a year earlier to 155,925 tons, association data showed. That was down 5.4 percent from November's 164,859 tons. Japan is Asia's largest importer of primary aluminium, with annual demand estimated at about two million tons. Japan's aluminium imports in January to November plunged to about 1.2 million tons, however, on lower demand for the metal, which is also used in packaging.
         Union govt seeks reports on illegal mining from Orissa, other states
 
The Union government has sought detailed reports on mining activities from the mineral bearing states in the country. The move follows recent detection of large-scale illegal mining activities in certain states, including Orissa.
Following a meeting with Orissa Chief Secretary, Tarunkanti Mishra, Union Mines Secretary Santha Sheela Nair said the Centre was concerned over illegal exploitation of minerals and it seriously wanted to check the practice at the earliest.
“Some states have taken a few steps to check rampant illegal mining activities. But those initiatives are inadequate and insufficient. More aggressive steps need to be taken to check unfair means of mining and illegal transportation of mineral resources,' Nair said.
She lamented that not only in Orissa but in all mineral-rich states cases of illegal mining were detected, causing serious loss to the exchequers of the respective provinces. To a query on expansion of National Aluminium Company (NALCO), Nair said the central Navratna public sector unit needed more coal for the project for the purpose. “NALCO has been allotted Utkal E Coal Block at Chhendipada in Angul district. To operate this mine, the support and cooperation of Orissa government is quite necessary,” she said. The Centre has already given forest clearance for the project.
         Statistics of US nickel scrap export in November 2009
US exported around 600 tons of nickel scrap about USD 2.95 million in November 2009. The total exported quantity was 10,674 tons from January to November 2009 period and the total exported value is around USD 37.2 million.
On the other hand, US exported to Canada, Japan, Australia, Mexico and UK nearly 5,900 tons, 1,354 tons, 691 tons, 685 tons and 634 tons respectively
         Norilsk raises 2010 nickel output forecast
 
The world's biggest nickel and palladium producer Norilsk Nickel raised its nickel production forecast for this year to 299,000-309,000 tons from a previous outlook of 300,000 tons. However the company did not say why it had changed the forecast.
The company expected to produce 234,000 tons of the metal at its Russian operations in 2010 and 65,000-75,000 tons at its operations abroad, said Norilsk in a statement. Norilsk also said it planned to produce 393,000-398,000 tons of copper, 2.830-2.835 million ounces of palladium and 690,000-695,000 ounces of sister metal platinum in 2010.
Previously it said it expected copper output to decline by 5 percent on 2009 and platinum group metals output to be no lower than the 2009 volumes.
The statement said that the company's nickel, copper and palladium output metals output in 2009 declined from 2008, as the company had expected. Platinum output rose slightly from 2008 and was above Norilsk's latest forecast.
Nickel production was 282,894 tons in 2009, close to the forecast of 285,000 tons and down from a restated output of 300,600 tons in 2008.
Copper output was 402,214 tons, against the forecast of 406,500 tons and down from 419,212 tons a year before. Palladium output was 2.805 million ounces up from expected 2.669 million ounces but down from 2.821 million in 2008. Norilsk produced 661,000 ounces of platinum in 2009 compared to expected 633,000 ounces and up from 650,000 ounces in 2008. The figures did not include output of Norilsk's U.S. unit Stillwater Mining Co.
         China flooding aluminium market, surplus to balloon in 2010
A massive rise in aluminium supplies from China and anaemic demand growth mean a larger market surplus than many were previously expecting, reports said. The recent survey forecast average aluminium surplus this year at 1.05 million tons as compared with 695,100 tons in earlier survey. There has been a massive increase in supply of aluminium, especially from China, which is producing at almost full capacity. China is flooding the global aluminium market. China's government, determined to make sure economic growth held up, last year offered financial assistance to many firms, including aluminium producers, to keep going, analysts say. The country produced 13.105 million tons of aluminium in 2008, according to the International Aluminium Institute. Between January and November 2009 it produced 11.633 million tons. Expectations are for the final year figure to match 2008. A number around 15 million tons is expected for 2010. Aluminium demand this year is estimated at about 37 million tons from about 35-36 million tons in 2009. Analysts expect demand for aluminium from the transport and packaging industries to grow in 2010, but not at the pace of rising supplies. That is why they expect a larger surplus, much of which will find its way to official stocks.
         Southern Copper's 4th-qtr profit soars on prices
Southern Copper Corp said its fourth-quarter net profit soared 391 percent as prices for the red metal rose, and the company said it would invest $2.8 billion over the next three years. Southern Copper reported a quarterly net profit of $363.3 million, compared with a loss of $124.7 million a year ago.
The company, a unit of Grupo Mexico, said profit rose on the returning strength of copper prices and because of increases in its molybdenum and silver outputs.
Metals prices rose steadily last year after plummeting during the global financial crisis, but did not touch the highs of 2008. Copper, which is used in construction, rose 140 in 2009 on strong Chinese demand and supply concerns. Southern Copper said its red metal production increased 0.7 percent in the quarter to 126,088 tons, while molybdenum output climbed 25.5 percent and silver production rose 8.3 percent in the same period.
Fourth-quarter net sales rose 153 percent to $1.136 billion from $449.7 million in 2008. For the year, Southern Copper reported a 33.9 percent decline in profit to $929.4 million compared with $1.406 billion in 2008.
Southern Copper, one of the world's largest copper producers, said it would invest $2.8 billion during the next three years to develop new capacity and that the program would lift annual output by 342,000 tons of copper and 6,600 tons of molybdenum. Of that investment total, $1.8 billion is earmarked for Peru and $1 billion for Mexico. Some $600 million is scheduled to be spent in Peru during the 2010 fiscal year, while roughly $200 million is tagged for Mexico, the company said.
Among the projects Southern Copper said are progressing are its Toquepala expansion and the Tia Maria development in Peru. The company has approved a $934 million investment program for Tia Maria, and has spent some $280 million on it so far. It has spent $90.3 million on its Toquepala expansion.
        Nissan Copper Q3 profit up at Rs 2.29 crores
 
Nissan Copper Ltd has announced the financial results for the quarter ended on 31-December-2009. The Net Sales was at Rs.44.98 crores for quarter ended on 31-December-2009 against Rs.26.92 crores for the quarter ended on 31-December-2008.
The Net Profit / (Loss) was at Rs.2.29 crores for the quarter ended on 31-December-2009 against (Rs.7.33) crores for the quarter ended on 31-December-2008.
The company has reported an EPS of Rs.1.58 for the quarter ended on 31-December-2009 against (Rs.5.04) for the quarter ended on 31-December-2008. The Net Sales was at Rs.120.77 crores for 9 months ended on 31-December-2009 against Rs.93.91 crores for the 9 months ended on 31-December-2008. The Net Profit / (Loss) was at Rs.6.74 crores for 9 months ended on 31-December-2009 against (Rs.3.31) crores for 9 months ended on 31-December-2008.

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