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c o m p a n y n e w s w o r l d w i d e
Period
Africa
North
America
Latin
America
Reported primary aluminium production
(Thousands of metric tonnes)
Asia
West
Europe
East/Central
Europe
Oceania China Total
Year 2003 1,428 5,495 2,275 2,475 4,068 3,996 2,198 5,547 27,482
Year 2004 1,711 5,110 2,356 2,735 4,295 4,139 2,246 6,689 29,281
Year 2005 1,753 5,382 2,391 3,139 4,352 4,194 2,252 7,806 31,269
Year 2006 1,864 5,333 2,493 3,493 4,182 4,230 2,274 9,349 33,218
Year 2007 1,815 5,643 2,557 3,707 4,306 4,460 2,315 12,607 37,410
Jan – Aug 2007 1,211 3,715 1,691 2,458 2,826 2,930 1,540 8,051 16,371
Jan – Aug 2008 1,135 3,902 1,773 2,596 3,099 3,098 1,538 8,906 17,141
Source: IAI
china’s aluminium producers
threatened by cost hikes
Chinese producers of alumina and
aluminium are likely to reduce production
and delay new expansion
projects unless prices recover soon.
Chalco suffered a 65.4% year-on-year
fall in net profit to 2.4bn yuan (US-
D205m) in the first six months of this
year as production costs soared, prices
fell, and output was hit by a winter
weather crisis in early February. The
company expects the price of alumina
to fluctuate at around 18,000 yuan per
tonne before the market improves in
the fourth quarter 2008.
Chalco produced 4.68m tonnes of
alumina and 1.52m tonnes of aluminium
in the first half of 2008, down 3.3%
and 14.3% respectively. Its average
sale price for aluminium fell by nearly
6% as bigger capacities in China and
government export controls took effect.
As raw material costs rose by 30%
and energy costs spiralled, Chalco is
looking to increase captive power supplies,
beyond its current 20% of total
requirements, by reaching deals with
local electricity and coal companies.
It also plans to raise semi-finished
aluminium production capacity from
1.09m tonnes to 2m tonnes in coming
years in order to move down the
production chain and lower market
risks.
Chalco predicted that China’s alumina
output could reach 26m to 27m
tonnes for all of 2008, up 34% from
the previous year, while aluminium
output could rise by 15.4% to 14.5m
tonnes. In the first half, China produced
11.13 m tonnes of alumina, and
6.62m tonnes of aluminium up 18%
and 12.9% year-on-year respectively.
rio Tinto’s 2.6m tpy of
new smelting capacity likely
Rio Tinto Group said that, while high
production costs are forcing rivals to
idle refineries, Rio will more likely add
2.6m tonnes of aluminium capacity. It is
studying new plants and expansions using
hydropower and other technologies
as rising energy costs force competing
refineries out of business. Rio’s projects
in Canada, Malaysia, Saudi Arabia, Iceland,
Oman and Cameroon would start
in 2011 to 2014. The Rio Tinto projects
under consideration include a 400,000
tpy capacity increase in Jonquière,
norsk Hydro secures power at søral until 2020
Aluminium producer Norsk Hydro ASA
(Hydro) has secured the future of its Søral
plant until 2020, after signing a contract
with Vattenfall for the supply of about 18
TWh. This contract also helps to secure
some 400 workplaces at Søral. The eightyear
contract will cover 85% of the company’s
electricity needs at the Husnes plant.
The aluminium plant, which is 49.9%
owned by Hydro, will run its current power
supply contracts until they expire in 2012.
The remaining 15% of power will be
sourced from regional suppliers, or through
the Nord Pool power exchange. Last year,
Hydro’s share of Søral’s primary aluminium
production was about 80,000 tonnes.
The supply of electrical power at stable
and competitive terms is vital for the viability
and competitiveness of Hydro’s aluminium
operations. If its power rights revert
to the government, as now recommended
by the energy and environment committee
(EEC) of the Storting, then Hydro will be
unable to carry out major new investments
in Norway’s aluminium industry. In September
the majority of EEC confirmed it backs
proposed new legislation for power rights
to revert to the Norwegian state. For the
most part, the proposal simply extends the
current act.
In a previous round of consultation,
Hydro criticised the government proposal,
and it maintains its scepticism against the
support the bill has received at the committee
stage. Hydro would be severely
affected since roughly two-thirds of its
power production is subject to reversion
already under the provisions of the current
legislation. The proposed legislation would
further limit the possibility of Hydro owning
its own power resources. This contrasts
starkly with Hydro’s needs to replace the
power it currently produces itself.
Hydro has worked long and hard to
put into place all the prerequisites for an
expansion of the Karmøy aluminium plant,
known as K6 project. If the Norwegian parliament
adopts the committee’s proposal,
this removes perhaps the most important
prerequisite. The committee’s report on
reversion represents an important clarification,
and the proposed K6 expansion at
Karmøy can now be formally dealt with by
Hydro’s decision-making bodies.
72 ALUMINIUM · 11/2008