The aluminium demand is expected to accelerate to 4-5 percent this year from 3 percent last year, aided by the power, auto and construction sectors, said a top official at Federation of Indian Mineral Industries (Fimi).
Citing A. K. Sharma, Chairman of the standing committee for non-ferrous minerals and industries at Fimi, a report said that aluminium consumption was likely to be more than 1.2 million tons in 2009-2010 (April-March) up from the last year's 1.15 million tons.
“People are purchasing the metal even at higher prices, which shows demand is there,” Sharma said.
“The auto sector worldwide is picking up. In India, demand is also strong from transport, plus construction and power sectors," Sharma said. Indian demand expanded at 7 to 8 percent in 2007-08 but then slowed in 2008-09, said Sharma, who is also the director of production at state-run National Aluminium Co Ltd (NALCO). India produced 1.35 million ton of aluminum in 2008-09, a small share of global production of 40.16 million tons.
The country's third largest aluminum producer NALCO is expanding capacity of its smelter in the eastern state of Orissa to 160,000 tons by December, although it would take a year for actual production to be increased to that level, Sharma said. In 2009-10, the aluminium major is aiming for production of 435,000 tons, a 20 percent more from 361,262 in 2008-09, which he said would be used to meet local demand and exports.
“We already have about 80,000 tons committed for exports. Our aim is to export 100,000-120,000 tons by the end of year,” Sharma said. NALCO has launched aluminium billets and rolled products for export that have just started to be purchased by Singapore, Dubai and Sri Lanka.
“We wanted to introduce these in the foreign market to get some capability outside,” he said. NALCO would float global tenders for the billets and rolled products in addition to alumina, aluminium ingots and aluminium sows it already exports, Sharma said. The company's exports are small, but its selling prices are seen as a benchmark in the international market.

Gujarat Foils Ltd (GFL), the Gandhinagar-based aluminium rolled products manufacturer, is planning to set up a backward integration project with an investment of Rs 350 crore.
A firm's control of its inputs or supplies is known as backward integration. The proposed facility will have a foilstock producing capacity of 75,000 tons a year. Talks are in an advanced stage with Fata Hunter of Italy, the technology, plant and machinery supplier, to provide castor route foilstock manufacturing technology.
The target for commencing commercial production is by the end of 2012. Currently, GFL meets its raw material requirement of around 16,000 tons of foilstocks through a combination of domestic procurement and imports. About 6,000 tons a year of foilstocks is procured from Hindalco, while Gramco of Bahrain and Russian Aluminium (Russal) supply about 5,000 tons and 3,000 tons, respectively, of various grades. With the ongoing expansion project, the company would require about 18,000 tons of foilstocks or feedstocks. According to Vimal Kumar Somani, managing director of GFL, the company has got a long term supply understanding of 6,000 tons with Hindalco, a major foilstocks producer. Until the backward integration project gets commissioned, the remaining raw material requirement is proposed to be met through imports. The proposed investment would be met through debt and equity in the proportion of 70:30, for which it is also simultaneously talking with private equity players to meet the fund requirement.
“All major aluminium producers have planned to raise metal production capacity significantly. Therefore, we find a huge opportunity in downstream products, so far left untouched by major aluminium producers. This prompted us to move towards foilstocks production, which entails immense potential,” said Vimal Kumar Somani. Owing to globalisation in the industrial sector, the demand has been increasing. Wrapping up ready-to-eat food articles in aluminium foil maintains hygiene, chemical and physical properties and increases shelf life. Hence, demand in future is also likely to increase, Somani added. India produces about 70-80 thousand tons of aluminium foil per annum against its consumption of about 100,000 tons. The Rs 5,000 crore domestic foil industry has been growing between 15-20 per cent a year and is likely to continue the growth momentum for at least five years.

Abhay Kumar Srivastava has been appointed as CMD of navratna public sector unit, National Aluminium Company Ltd. Before joining NALCO, he was the chairman and managing director of Cement Corporation of India (CCIL).
Srivastava, a mechanical engineer by profession, took over from C. R. Pradhan, who retired as NALCO CMD in the first week of October.
Before joining NALCO, Srivastava was heading CCIL, a Govt. of India Undertaking under ministry of Heavy Industries & Public Enterprises, as its CMD for about 5 years.
However, Srivastava's appointment to the new post is not without its share of controversy as a shareholder has filed a petition in the Orissa High Court challenging his appointment to the post.
The petitioner pointed out that in the interview held for the post of NALCO CMD in 2007, C R Pradhan, who has been acting as the CMD in charge since February 2005, was empanelled as the number one candidate followed by A. K Srivastava in the second slot. The panel was valid for one year. Though the panel of name was finalised in October 2007, Pradhan's appointment was delayed till 3 August 2009. On Pradhan's retirement, the petitioner argued, fresh process of selection should have been started by the ministry of personnel, public grievances and pension and the Public Enterprises Selection Board (PESB) giving opportunities to all those candidates who had not qualified for the post in the earlier interview.
However, the PMO in violation of all the established guidelines and procedure appointed Srivastava, the second person from the panel as CMD, NALCO from 1 October 2009, long after the validity of the panel had expired, the petitioner pointed out.

Western world unwrought aluminium stocks rose to 1.232 million tons in August from a revised 1.179 million tons at the end of July, industry data showed.
Unwrought stocks stood at 1.707 million tons in August 2008, figures from the International Aluminium Institute (IAI) showed. Total aluminium smelter stocks excluding finished end-products rose to 2.306 million tons at the end of August versus a revised 2.254 million tons in July. Meanwhile, Japanese shipments of aluminium products fell 18.7 percent in August from a year earlier to 138,920 tons. That was also down from 166,610 tons in July. Japan's demand for metals, such as copper and aluminium, plunged from late last year as the worst global economic downturn in decades hit consumption and forced top manufacturers to cut output. But metal demand, which halved during the worst of the downturn, has been showing a nascent recovery as demand returns, particularly among automakers and semiconductor producers.
Demand had been up on a month-on-month basis, supporting the view that the worst of the crisis may be over. But recovery lags in the construction industry, a huge consumer of metals.

A U S bankruptcy judge rejected attempts by India's Sterlite Industries Ltd to sweeten its offer for U.S. copper miner Asarco LLC, and recommended for the second time that rival bidder Grupo Mexico SAB de CV regain control of the company.
Sterlite, however, maintained it was still in the race to acquire the copper miner. In court papers, U.S. Bankruptcy Judge Richard Schmidt recommended that a U.S. district court judge in Brownsville, Texas approve Grupo Mexico's $2.4799 billion offer to repay Asarco's creditors in full, saying it was too late for Sterlite to make changes to its offer. “Considering the volatile commodities market and world economy, time is of the essence in moving this case toward confirmation and consummation,” Schmidt wrote. Schmidt had first recommended Grupo Mexico's bid in August, saying that it would offer more recovery to Asarco's creditors than Sterlite's plan. Sterlite, part of London-listed Vedanta Resources, said it remained in contention.
Grupo Mexico, the largest copper miner in Mexico, acquired Asarco in a leveraged buyout in 1999. After the judge's recommendation in August, Sterlite raised its offer for Asarco to $2.565 billion and said it would let Grupo Mexico out of an $8 billion potential legal liability stemming from the 2003 transfer of Asarco's stake in Peruvian miner Southern Copper Corp. The district court sent the issue back to the bankruptcy court to determine whether Sterlite's latest offers should be considered, leading to Judge Schmidt's latest recommendation.
In his recommendation, Schmidt said that if Grupo Mexico's bid for Asarco closes “it will culminate perhaps the most successful major bankruptcy reorganizations in history” as creditors will be repaid in full in cash and Asarco's equity value will be preserved. Grupo has been fighting to take back Asarco, which runs three copper mines in Arizona, since the company filed for bankruptcy in 2005 amid a strike and more than $1 billion of asbestos and environmental claims. U S District Judge Andrew Hanen is expected to make a final ruling on Asarco by the end of October. Sterlite has argued its plan is better for the company and its offer has the support of Asarco and Asarco's union. Grupo Mexico does not yet have a labor agreement with the union, which has said it may strike if they cannot reach a deal.

Daily average primary aluminium production rose to 63,000 tons in August from a revised 62,800 tons in July, said a report.
According to the International Aluminium Institute, total production in August was 1.954 million tons compared 1.948 million tons in July. However, total aluminium production in August 2008 was 2.175 million tons.
Primary aluminium production in China rose to 1.153 million tons in August from 1.088 million tons in July and 1.190 million tons in August 2008.

The world's largest copper producer Chile's copper output rose 7.8 percent in August from a year earlier after state-owned Codelco and BHP Billiton ltd increased production, said the government.
Copper prices have doubled in 2009 as demand for copper rose in China, the biggest importer of the commodity.
Codelco, based in Santiago, is the world's biggest copper producer. Melbourne-based BHP, the largest mining company, owns 57.5 percent of Chile's Escondida, the world's biggest copper mine. Production of molybdenum, used for stainless steel making, rose 27 percent to 3,164 tons from 2,495 tons a year earlier, the agency said.

Russian non-ferrous metals exports are likely to keep declining in the next two years due to a fall in demand caused by the global economic crisis, the Economy Ministry said in a report.
Citing the ministry, a report said that export supplies of non-ferrous metals will reach pre-crisis levels only in 2012.
Export of aluminium and its products would reach 3.830 million tons in 2012, compared with 3.804 million tons in 2008, the ministry said. Meanwhile exports of nickel and its products would stand at 265,000 ton in 2012 compared with 225,000 tons in 2008.
However, the ministry did not provide forecasts for other non-ferrous metals.
Most of Russia's aluminum, including all of its primary aluminium, is produced by the world's largest aluminium maker United Company RUSAL and most of the nickel is produced by Norilsk Nickel, the world's largest producer of nickel.

Japan's Mitsui Mining and Smelting Company plans to produce about 7 percent more zinc in October to March than a year earlier helped by a recovery in demand.
Japanese smelters started to cut production of copper and other base metals at the beginning of 2009 as the economic downturn forced manufactured to slash output.
Nippon Mining & Metals Company Limited holds the remaining stake in the smelter.

Rio Tinto, the world's one of the largest miners, is selling its 80 percent stake in Ghana's only bauxite mine to Chinese minerals group Bosai, which produces alumina and aluminium in China.
According to a report, the London and Sydney listed firm has postponed an earlier plan to develop an integrated alumina refinery which would have been fed by the Awaso mine, as a result of poor local infrastructure and lower global demand for minerals.
"Apart from the prevailing unfavourable market conditions, the infrastructure is not ready yet for that programme ... the cost of power and the supply system has to improve," Rio spokesman Stefano Bertolli said.
The mine in Ghana producer 637,000 tons of the aluminium raw material, said the report.
The deal will be complete by the end of the year and is subject to approval by Ghana's parliament, said the spokesperson.
"After careful consideration of various options, accelerated by a period of very tough economic market conditions, we decided to pursue sale of our share in GBC," he said, declining to identify the value of the sale.
By contrast to Awaso, Rio Tinto last year received 45 percent of output from the Sangaredi bauxite mine in nearby Guinea, amounting to almost 6 million tons.

Emirates Aluminium's plans to become the world's single largest aluminium smelter are on track. The aluminum major has bagged deals to export the additional production globally.
Production from the first phase of the $5.7 billion project is expected to start by the end of the year and will reach full capacity of 7000,000 metric tons of aluminium per year (typ) by December 2010, said a report.
Citing Ducan Hedditch CEO of Emirates Aluminium (EMAL), a report said, “We have reached the final stages of construction and we will gradually start ramping up production until it reaches full capacity by the end of 2010.”
EMAL is a joint venture between Dubai Aluminium Company Limited (DUBAL) and Mubadala Development Company (Mubadala), Abu Dhabi's investment vehicle. EMAL is expected to be the world's largest single-site aluminum smelter complex with this project.
The first of the project, located at Al Taweelah in Abu Dhabi, will have a capacity of more than 2,000 megawatts of electricity. The second phase will increase capacity to 1.4 million tons of aluminium per year and is expected to be completed in 2013-14. The company will sell its aluminium products in the domestic market and export to countries within the region, Europe and Asia, said Hedditch.
“We already signed a number of contracts to export to countries in the region and Europe, and at a later stage we plan to export to North America,” he said, adding capacity for the whole year had not yet been sold.
The economic downturn has slowed construction projects around the world, reducing demand for aluminium used in the many of these projects. The UAE's domestic demand is around 250,000 metric ton per year, added he.

Nubian Resources Plc, a subsidiary of Australian mining company Gippsland Limited, bagged three new prospecting licenses in northern Eritrea.
More than a dozen companies are exploring or about to explore in the Red Sea state, which is seen on the cusp of minerals boom that could kickstart to needy economy.
"The company now holds licenses totaling 300 km2 in a region that has had minimal previous exploration but has the potential to host high grade gold and base metal deposits," Gippsland said in a statement. "The licenses of 100 km2 each are located between 203 km and 247 km north of the Eritrea capital Asmara."
The company will start sampling in the next two months in the remote Adobha region, near the border with Sudan.
Much hope is pinned on the potential of mineral sector in Eritrea, whose agriculture-based economy has suffered from irregular rainfall and the global economic crisis.
Eritrea's most advanced project, run by Canada's Nevsun Resources Ltd with a 40 percent stake for the state, is Bisha. Its 27 million tons of ore are believed to contain 1 million ounces of gold, 700-800 million lb of copper and 1 billion lb of zinc. Production is expected by late 2010.
Foreign miners agree on the potential, but Eritrea insists the sector must be developed slowly and carefully to avoid the so-called "resources curse" of corruption and violence seen elsewhere in Africa.

Demand for aluminium rolled products is improving in Europe but the third quarter sales volumes were about 10-15 percent lower than the same period of last year, Norwegian aluminium producer Norsk Hydro said.
The company said that the first half, sales of aluminum rolled products had been plunged 25 percent YoY in Europe, meaning the industry has partly recovered in the third quarter but not to last year's level.
"There is an improvement (in aluminium demand) coming from extremely low levels. Is it restocking or is it real demand, I think its both. Our customers would only restock if they had better orders," said Oliver Bell, head of rolled products at Norsk Hydro.

India's major aluminum producer National Aluminium Co Ltd (NALCO) plans to invest in a nuclear power project to generate new revenue stream.
State-run NALCO hopes to sign a joint venture agreement with state firm Nuclear Power Corporation of India Ltd for a minority stake in one of its projects, B. L. Bagra, Director (Finance), NALCO said.
"In one of the projects, of 1,000 MW, we are partnering with them as a minority partner with a possible stake of 40 to 49 percent," he said.
"It is an additional business line... We can earn money being an independent power producer," A.K. Sharma, director for production, said.
Both officials declined to say how much NALCO would be investing. NALCO, India's third-largest aluminium maker, produced 361,262 tons of aluminium in 2008/09 that ended in March. It has a 960 MW thermal power plant in Angul in Orissa that feeds its aluminium smelter in the same state.

Atlantic Copper has increased copper anode output by 10 to 15 percent and production of cathodes by 4 percent after efficiency improvements at its Spanish smelter in Huelva.
The smelter has increased its concentrate smelting rate by 10 percent to 15 percent since August, after producing 1 million metric tons of copper concentrates last year. In 2008, the company produced 260,000 tons of copper anodes, basic copper blocks that are later refined, and the production of refined copper, in the form of cathodes, was 255,000 tons. Atlantic Copper is a Spanish unit of Phoenix-based Freeport-McMoRan Copper & Gold Inc., which owns the world's second-largest copper mine, Grasberg in Indonesia.

Nexans SA, the world's biggest maker of cables and wires, may reduce its production capacity of basic copper wires in France by more than half as demand sags.
Capacity at the company's continuous casting plants, which transform copper cathodes into basic wires, may fall to 200,000 metric tons a year from 500,000 tons, company sources said. The Paris-based company is planning to redeploy assets across the country. It concerns six different sites in France, including Chauny, and the plan could imply the closing of the rod mill plant in Chauny and the continuous casting plant. Annual production capacity at the continuous casting plant in Chauny was about 300,000 tons and the rod mill, which produces electrical wires, has a capacity of 80,000 tons.
The company was forecasting output at the rod mill in Chauny of 18,600 tons this year. This year's total production of basic copper wiring, including the site in Chauny and another in Lens, was estimated at 240,000 tons. Another casting plant in Germany might also increase production as a result of the reorganization in France, they added. Nexans employs about 3,800 people in France. The company is also planning 47 new positions in the country.
The world's top aluminium producer United Company Rusalt has appealed in Guinea against a local court's decision to retake its alumina unit and was considering an international arbitration in Paris. Rusal purchased Friguia (bauxite and alumina complex) in full compliance with Guinean legislation and the plant is its legitimate property. Currently, the company was in full control of the plant's activities. Bauxite is a raw material from which alumina, an intermediate product for aluminium refining, is produced. A court in Guinea, the world's biggest exporter of bauxite, said earlier this month the 2006 sale of the Friguia alumina refinery to UC Rusal was unlawful, and the Guinean state was retaking ownership of its largest industrial operation. Since then, the government has said it is open to talks with Rusal about the deal. The court's decision is the latest in a string of disputes between the government set up by Captain Moussa Dadis Camara, who took power in a December military coup after the death of then President Lansana Conte, and the foreign mining firms that work in the poor West African country.

Commodities are poised for further gains heading into 2010 because supply constraints persist for many raw materials as the global economy recovers, Barclays Capital said.
The UK bank's top recommendations include gold, crude oil, copper, nickel, cocoa, and corn, London-based analyst Kevin Norrish said. The Standard & Poor's GSCI Index of 24 raw materials has jumped 27 percent this year, outpacing a 22 percent gain in the MSCI World Index of stocks. Copper prices almost doubled, crude oil futures advanced 49 percent, while gold is trading within about 3 percent of a record. In metal and oil markets, longer-term prices -for delivery in several years - have also recovered, signaling that the economic slump is not overshadowing concern about future scarcity of supply. “Barclays expects the economy to show an asymmetric recovery relative to the collapse, whereby employment won't rise as fast as it declined,” said Tim Bond, head of asset allocation at Barclays.
The bank expects global growth to average 4.2 percent next year with a fairly dramatic acceleration taking place over the next two or three quarters. Gold is set for a ninth straight annual increase, the longest streak since at least 1949, as investors seek a hedge against potential inflation and a weaker dollar.
The weaker dollar, down 5.7 percent this year against a basket of six major trading counterparts, has helped spur dollar-priced commodities higher this year, making them cheaper for holders of other currencies. There is currently considerable downward momentum for the dollar, particularly against currencies other than the yen, and we would expect that to continue in the near term.

Vale SA, the world's second-biggest nickel producer, may build an underground mine at its Voisey's Bay unit in Canada, extending the life of the deposit by 30 years.
Voisey's Bay, which started output in 2005 in Newfoundland & Labrador, is forecast to last until 2019 as an open-pit mine, said Tom Paddon, Voisey's Bay general manager. Voisey's Bay could continue producing as much as 50,000 tons a year through 2049 if Vale decides to build the underground mine.
Output from an underground mine at Voisey's Bay would feed a $2 billion nickel refinery that Vale is building in Long Harbour, Newfoundland. The refinery is set to open in 2014 with annual capacity of 50,000 tons. Norilsk Nickel is the world's biggest nickel producer.

Huludao Zinc, the second largest zinc smelter by capacity in China, is planning to double its copper smelting capacity by the end of this year, a move which could raise its demand for copper concentrate imports.
A company official said," we are doing the upgrading the project." The project is to upgrade Huludao's sole copper smelter with capacity around 80,000 tons a year to 150,000 tons.
For now, Huludao has no plan to expand its 100,000-ton-a-year copper refining facility. "Logically, smelting and refining facilities should match," the official said.
The company has 390,000 tons of zinc production capacity. The company's zinc production for the first half of the year stood at 155,000 tons, down 12 percent from a year earlier. Production of lead inched up 1 percent to 8,350 tons in the same period, according to the company's statement.

Global miner Rio Tinto is selling its Alcan Composites business, which makes aluminium construction material used in wind farms, to Swiss machinery firm Schweiter Technologies for $349 million.
The both companies said that the expected to complete the deal by the end of the year.

Global miner Rio Tinto has given a cautious outlook for its strained aluminium division, which is the one where the company bought Alcan in 2007, took on billions of debt, and has been in recovery mode since then.
The company said that it is making tough approach to cost cuts, capital spending, along with a very conservative outlook for the metal in world markets. In short, it's hack, slash, not spend, spend, with the approach being to keep the businesses existing assets operating at whatever levels, with a minimum of new capex.
This is based on an outlook that sees upside in China, but also uncertainty, with fears of a double dip slump in demand in the next year or so.
Rio said that it is looking to cut capital spending by 15 percent at its Alcan aluminum unit next year as the outlook for a recovery in demand remains mixed.
Rio Tinto Alcan is seeking to reduce so-called sustaining capital spending to $500 million in 2010, from a forecast $586 million in 2009.
The company said it would be maintaining a tight hold on growth capital in 2010 with further reductions compared to 2009. It said it was "mindful of retaining the capability to efficiently run and grow the business when markets recover". The company is studying its budget for growth capital spending for next year and is forecasting expenditure of $1.1 billion this year for all of 2009.
Working capital initiatives and reductions in growth and sustaining capital expenditures have improved cash flow this year so far by US$1.4 billion compared to 2008. But according to industry analysts, the supply of aluminum will again exceed demand this year and in 2010.
That is important to Rio, as it is still one of the group's two major businesses, along with iron ore. Carmine Nappi, Rio Alcan's head of industry analysis said in her presentation that "for the time being, the recovery signs in aluminum main end-use markets are still mixed.
“We remain cautious because some headwinds are also at work.” "Our base case is for 4.1 percent growth in aluminium demand over the next two decades." She said the current energy surplus in China is expected to be temporary with increasing competition for energy in China from residential and transportation sectors.
"Between March (10.4Mtpa) and July (12.8Mtpa) Chinese production increased 2.4Mtpa on restarts and commissioning of new capacity
"Based on CRU - Quarterly Review capacity estimates for China, this would imply a latent capacity of about 6.8Mtpa in July 2009 or an utilisation rate of 65 percent," she said.

The strategic decision to build and operate a world-class aluminium smelter in Qatar is based on a sound energy and operational background," Hilde Merete Aasheim, head of Hydro's Primary Metal business area, said during a recent visit to the construction site in the Mesaieed industrial park not far from Doha, the capital city of Qatar.
The overall construction work is 90 percent finished and on schedule. Apart from supporting the people involved in the Qatalum project towards achieving their goal, Aasheim was very impressed by the ethnic diversity and high level of competence.
"Compared to my first visit in April, there are so many more people on site now. I am impressed by Qatalum's ability to have recruited so many top professionals who will contribute towards making Qatalum world class," she said.
A detailed walk through the entire plant took her the better part of four hours, covering all its primary components from the carbon plant to the power plant and the port.
"Most elements of the plant are nearly complete and one must see the sheer scale of Qatalum to believe it," she points out.