Recent expansions in global aluminium

As Chinese demand for aluminium shows no sign of abating, market prices for alumininum are on a global roll. Combined with cheaper sources of power and major cuts in China's own smelting capacity, both the world's oldest aluminium producers and newer entrants are planning huge expansions in output.

Recent expansions in global aluminium

Planet Ark

June 3, 2004

London - The world's number three primary aluminium producer, RUSAL, announced this week it had started a feasibility study for a huge smelter, days after it had unveiled a $3 billion project to bring it a step closer to becoming the world's number one.

RUSAL said the study was for a new 600,000-tonne aluminium smelter in the Siberian energy-rich Irkutsk region.

According to preliminary estimates, construction of the smelter could start in 2006 and be completed by 2009, a RUSAL statement said. U.S.-based engineering and construction giant Bechtel Corp. will carry out the study.

RUSAL said last week it and a unit of Kazakh Eurasian Industrial Association (EIA) would invest $3 billion in building an aluminium smelter and alumina refinery in Kazakhstan.

The plans are believed to be a response to higher aluminium prices on the London Metal Exchange (LME) and lower power costs in the energy-rich areas.

Major producers have been trying to raise output of refined metal and raw materials alumina and bauxite since late last year, while Chinese producers have been considering cutting output or delaying expansion plans due to a combination of Beijing's restrictions on investment projects in the aluminium sector, rising raw material and energy prices and power shortages in the country.

Three-month LME aluminium hit an 8-1/2-year peak of $1,845 a tonne on April 20 on declining stocks and strong demand amid a lack of major mine development in recent years.

Tight supplies and strong demand have also boosted prices of alumina to more than $500 per tonne this year from $160 in late 2002, sparking renewed interest in alumina projects. Around two tonnes of alumina are required to produce a single tonne of aluminium.

Following are recent developments in the global aluminium sector;

June 1 - Russia's top aluminium producer RUSAL announced it had started a feasibility study for a huge smelter, days after it had unveiled a $3 billion project to bring it a step closer to becoming the world's number one. RUSAL said the feasibility study was for a new 600,000- tonne aluminium smelter in the Siberian energy-rich Irkutsk region.

May 28 - China's measures to curb over-investment in key industrial sectors have stopped or delayed construction of 2.37 million tonnes of planned aluminium capacity since mid 2003, but a further three million tonnes has gone ahead, said Kang Yi, director of the China Nonferrous Metals Association.

May 27 - RUSAL and a unit of Kazakh Eurasian Industrial Association (EIA) plan to build an aluminium smelter and alumina refinery in Kazakhstan for $3 billion.

May 24 - Alcoa Inc the world's top aluminium producer, plans to build a $1 billion aluminium smelter in Trinidad that will take advantage of the Caribbean island's natural gas reserves to produce the metal at a lower cost.

May 24 - Companhia Vale do Rio Doce (CVRD) signed a framework Agreement with Aluminium Corp of China Ltd. (Chalco) to build an alumina refinery in Brazil. CVRD said that the agreement will cost around $1 billion in an initial phase and produce 1.8 million tonnes a year of alumina when it opens, due in 2007.

May 13 - The world's top two aluminium producers, Alcan Inc and Alcoa Inc said they had signed a memorandum of understanding to assess the feasibility of a 1.5 million-tonne a year alumina factory in Guinea, which could be up and running by early 2008.

May 12 - China's power-hungry aluminium smelters may close between 800,000 and 1.0 million tonnes of capacity this year, under pressure from increased power fees and the withdrawal of power subsidies, according to industry officials. Aluminium smelters had taken the brunt of higher power charges introduced from May 1 by a government keen to rein in breakneck expansion in a sector where capacity threatens to outstrip production by 1.8 million tonnes this year.

May 06 - An Alcoa-led joint venture said it was studying a $1.1 billion expansion of alumina output at its Australian Wagerup refinery, joining rival BHP Billiton Ltd Plc in upping production to keep pace with demand in China.

April 22 - United Arab Emirates (UAE) aluminium producer Dubai Aluminium (DUBAL) may expand smelter capacity beyond an announced 761,000 tonnes if necessary, a company official said. Earlier this week DUBAL announced it would expand capacity at the Jebel Ali smelter to 761,000 tonnes from 686,000. DUBAL had consistently added capacity since the smelter opened in 1979.

March 19 - Iran's state-run aluminium sector is targeting a 40 percent increase in production to 250,000 tonnes a year over the next 12 months as the first of many planned expansion schemes comes on stream, said Mostafa Badkoubei, communications director for state-owned Iran Aluminium Company. Blessed with cheap power resources from abundant oil and gas reserves, Iran is hoping to raise its primary aluminium output to one million tonnes a year by 2010.

March 5 - New York-based GAPCO (Guinea Aluminium Products Corp) Ltd is planning a 2.6 million tonne-per-year alumina refinery while Russian Aluminium (RusAl), the world's second biggest aluminium producer, is planning to build an alumina refinery, deep-water port and railway at the massive Dian-Dian bauxite deposit.

March 5 - Alcoa Inc hopes to more than double production of alumina at sites in Brazil and Jamaica in projects costing about $1.35 billion. Alcoa, responding to growing consumption of aluminum, whose uses run the gamut from cars to construction to aerospace, seeks to raise production capacity at two refineries by a total of about 3.4 million tonnes a year, Bernt Reitan, head of Alcoa 's primary metals business, said.

March 3 - Aluminum Corp of China Ltd's Pingguo plant has cut aluminium production by more than one-third because of power shortages in China's drought-stricken southwestern region of Guangxi, a plant official said. The Chalco official said the plant had closed more than 100 pots since December, out of nearly 300 pots installed in its sole aluminium smelter. The smelter produced almost 140,000 tonnes of aluminium last year, surpassing its design capacity of 125,000 tonnes per year, he said. It accounted for about 18 percent of Chalco's output in 2003.

Feb 27 - China has closed about 350,000 tonnes of aluminium capacity, covering 25 smelters, in the last four months, due to a severe shortage of power and raw materials, state-controlled Beijing Antaike Information Development said. But its capacity would still rise to nearly 9 million tonnes by end-2004 from 8.3 million tonnes at the end of 2003.

Feb 19 - Russia's second largest aluminium producer, SUAL, said it planned to build a second unit at its Kandalaksha smelter with an annual capacity of around 230,000 tonnes of aluminium and alloys per year. The plant, built in 1951 in the Murmansk region in the Arctic, produced 71,280 tonnes of aluminium last year. The new facility would have an estimated capacity of just under 300,000 tonnes per annum.

Jan 26 - Egypt Aluminium's plan to boost production by 50 percent to 300,000 tonnes a year is ahead of schedule by two years, an official at the plant's state holding company Metallurgical Industries said. Egypt Aluminium, the country's only primary aluminium producer, had planned to fully modernise its nine potlines by 2007, but that target has changed.