The ENAL Newsletter News Page

The pattern of future investments in primary aluminum is following closely the future energy context.

atc@geanoverseas.com (Andre Teissier du Cros) — Sun, 07 Mar 2010 20:24:00 +0000

Until a few years ago, most smelters operated or were being built within a stable, predictable energy context: Integrated power, or benefiting of a favorable “power island” (region where excess power is and will remain available), or stable contractual environment. General energy shortage plus escalation of energy costs is changing this. Each investment decision, even a modest revamping, is conditioned by some kind of renegotiation or development of energy supply. This smelter invests $50 million because its contract was renegotiated. This greenfield project is on hold because the local government delays decisions regarding energy supply, and the investor is favoring another country where energy plans are moving faster; the owner of these two old smelters – scroll down and seek ‘new base-load’ manages to secure energy until 2036, which will now facilitate various revampings; this greenfield keeps being delayed – scroll down and seek ‘halted construction’ because new questions on energy supplies delays financing; a major extension of this old smelter has eternally been delayed because of producer/government disputes regarding an integrated power plant, and we read now that the dispute is finally solved. Meanwhile, in this faraway land, a government decision – scroll down and seek ‘nations to develop’ - to engage the planet’s largest hydropower project ever will condition the whole future of several greenfields in a region which, only ten years ago, was still considered as a “power island” with massive, unused energy capacity.
Introducing an improvement on the CIF Matrix: Subscribers, when reading CIF, note that the most probable and major investment projects are now highlighted in light blue to facilitate focusing.

The Aluminum Industry is slowly but surely preparing for major technology changes, while investment perspectives are slowly improving.

atc@geanoverseas.com (Andre Teissier du Cros) — Mon, 22 Feb 2010 12:36:00 +0000

ENAL has prepared a Special Report on foreseeable evolutions of technology in the context of increases of energy costs, and of the complete uncertainties in matter of alleged Global Warming and more especially Anthropogenic Enhanced Global Warming (AEGW) which has become the object of major controversies and even scandals. Our report explain why, CO2 or no CO2, things will never be the same. A completely innovative technology for primary aluminum production may be a major factor in the coming changes. Another was already announced - scroll down and search for 'UC Rusal IPO' - but may take much longer to develop. A conventional but State of the Art process is now proposed to the world market, competing seriously with Alcan-Pechiney’s technology, which will however remain dominant, here is why. This major producer is making progress to safeguard its investments - scroll way down and search for 'caretaker government' - and promote new ones in this highly controversial African country. This smelter - scroll way down and search ‘oversee reconstruction’ - will benefit from new, momentous energy contracts. This smelter was due to shutdown, but negotiations are in progress which will at least cause delays. In this country, humongous hydropower projects stay the course and attract more investors despite strong political resistance. This country - scroll down and seek ‘upgrade energy’ - has only one old smelter, but it is silently progressing in its revamping and may find along term solution to its energy problems. Meanwhile, its only smelter is not waiting for further investments. This greenfield project added to an old existing site is progressing, gaining scope in size and downstream integration. This country also has only one smelter, but more than one project addressing energy and all steps of process will add new capacity in the not too far future, for the country and for another one which so far has no capacity at all. China is now joining the club of major investors in both countries.

Some smelters are going to invest. Some greenfield projects stay the course. Market perspectives justify investments despite the metal glut…

atc@geanoverseas.com (Andre Teissier du Cros) — Thu, 04 Feb 2010 20:23:00 +0000

This report explains very well why, despite the metal glut in LME inventories, the industry must prepare for an important increase in demand. It also gives a list of investment projects on the agenda today, and you will be reassured to see that it matches quite well our forecast in our Capacity & Investment Forecast Model (CIF Matrix), accessible to our subscribers. This report completes it, explaining more in detail how the metal glut will be absorbed within 18 months. This report discusses an energy-generation mega-project which will serve the needs of two and may be three greenfield smelters. This smelter has been waiting for its major extension for decades and the project was dormant because of political disputes. It seems to be on the move again. Here is another megaproject illustrating again that future aluminum capacity investments will be built on the model integrating in one entity energy generation and smelting. We predicted the come back of this model years ago. This old and solid, healthy smelter is silently improving its energy supply again thanks to investments of the metal producer, which will allow a new potline effective within 2 years. This conglomerate in energy and mining is negotiating the sale of its excellent smelter. (Scroll way down) To whom? In this country who should be a new aluminum producer in 2015, public hearings have begun. Rusal has succeeded its IPO but guess who is the leading investor? Here is another country who might within a few years have shut down all its smelters , and here is a smelter who was waiting for its extension, had given up, and is seriously reconsidered. Our guess is its extension will produce metal in 2013.

We expect slow, but momentous and long term changes in primary aluminum, and are preparing to forecast them.

atc@geanoverseas.com (Andre Teissier du Cros) — Sat, 16 Jan 2010 17:10:00 +0000

Shall we continue, 50 years from now, producing aluminum using the Hall-Heroult Process as it is? Some doubt it now, because of exceptional political pressures expressing environmental dangers. These dangers are more and more recognized as massive, controversial as to their natures and scenarios, but potentially cataclysmic. And since inertia is colossal in our industry, it is reasonable to ask oneself when, if ever, will there be an alternative to the Hall-Heroult Process that would completely eliminate the issues. These issues are: CO2 emissions; high energy and capital intensity; high logistics intensity; economies of scale imposing mega-projects. This is why we announce ENAL’s special research program: A Technology Forecast Study assessing when an Innovative Aluminum Smelting Process (IASP) that will eliminate CO2 emissions in electrolytic reduction and significantly reduce energy and capital costs will become a credible, bankable option as smelting technology. If you aren’t yet a subscriber, now is the time. One of the news that brings the world’s attention on IASP was Rusal’s statement that it has obtained enough encouraging results with their experimental Inert Anode process to highlight it as an intangible, promising asset in their IPO prospectus. Meanwhile this greenfield – scroll down - just produced its first metal, and this older European smelter seems to plan a restructuring to avoid shutdown in the foreseeable future, with the help of improving LME prices. It may even mean some investments within one or two years. In this equatorial country, China is preparing to pump billions in a power project conditioning more than one greenfield already in the pipeline. In this other African country, the sole smelter – click here and scroll one notch up - continues to create a basket case of litigations between government and investor.

Are the Russians serious about their Inert Anode technology?

atc@geanoverseas.com (Andre Teissier du Cros) — Fri, 01 Jan 2010 07:13:00 +0000

It seems that at same time they will succeed an IPO backed by China and major private investors, a massive debt-to-equity conversion, quasi-equity financing by the State, and government financing for the technology that will eliminate CO2 emissions in aluminum smelting. Not bad for the New Year. This suggests most important long term questions which we discuss here – scroll searching for ‘Rusal IPO’. Meanwhile we read good news here about LME inventories and prices in this article. This new smelter now running at full capacity will certainly keep investing. Here is another country planning to become an aluminum producer for the first time. In this country, aluminum demand will rise 15% this year. In this greenfield project, now rated as very serious, the main investor and technology supplier changes. This old smelter is saved by an energy contract – scroll down looking for ‘lifeline’ - which means some refitting down the road. This European country undertakes major energy investments which will save its smelter. Smelter will invest now. This controversial greenfield, the first for this country, seem to move ahead despite political opposition. But in this country, energy priorities may finally trigger a shutdown. Here is a probable greenfield to be build soon. This smelter survives and plans boosting production and refittings. This smelter gets an interesting power deal, meaning again some extension. This Chinese power firm will invest $8 billion, to support major aluminum projects. This alumina expansion indicates that a dedicated smelter keeps on investing. This major international utility will invest in nuclear energy in China, which will add support to the aluminum industry. And here is another country where massive investments, in railroad systems for bulk freight, comes to the support of a greenfield project.

Progress towards new investment is delayed by major restructurings and energy price hikes, but...

atc@geanoverseas.com (Andre Teissier du Cros) — Sun, 13 Dec 2009 18:47:00 +0000

One major aluminium producer finally managed to restructure its debts which will have momentous consequences, since he has his fingers in many projects. Its country also makes the right decisions to finance revamping of its huge power generation system. However speculation on commodities affects aluminium by supporting a piling up of LME inventory. Growing long term demand is certain to gradually clean it up, but not right now. This government will take over the country's sole smelter and states the date - scroll down after clicking - It will mean capacity investments by then.
This other government envisions serious and massive energy generation investments of multiple sources which will facilitate investments already planned - scroll way down - in its small but solid primary aluminum industry. But here are the new facts indicating that the future of European smelters is doomed more than ever, witness the European Commission's recent attitude towards a major foreign producer. In Asia, more investments illustrate to what extent the local industry favors integrating energy generation with metal smelting. This highly efficient smelter, world leader in lowest energy per tonne consumption, goes further by a spin-off of its most promising pilot cell in original financial conditions. This smelter increases capacity by one third. In China, now the world's biggest aluminium producer, industry faces a serious energy price increase.This greenfield can now resume construction: The country hosting it got an incitation from Europe triggering megafinancing of its energy sector. In Latin America, this producer definitely emerges as a future leader, and pursues investments right now to that effect.

Some news now from a little known aluminum producing country who silently invests.

atc@geanoverseas.com (Andre Teissier du Cros) — Wed, 18 Nov 2009 20:18:00 +0000

Its sole aluminum producer is one of the club of Soderbergs continuous-anode smelters being gradually updated to state of the art level. Two major smelter investments on hold are going to be resumed.This country nationalizes its integrated aluminum industry and forgets key subsidiaries in its decrees. This wise producer abandons South Africa to pursue investments... guess where? Click and scroll a bit down. The International Finance Corporation is supporting investment in this other smelter, betting on excellent long term perspectives. In North America, a supreme court accepts an appeal against a judgment blocking one of the best extension investments available in the world: Will it get the project moving at last? In this other country, deregulation of the energy generation industry opens excellent perspectives - scroll down, search for sentence 'the electricity sector followed' - for another project on hold. This major integrated metals producer bets on the long term with an investment of - scroll way down - close to 10 billion dollars in all steps of metals production. And... will an old suitor finally have another go at merging his own debts with Rio Tinto's?

The outlook for primary aluminum keeps slowly improving…

atc@geanoverseas.com (Andre Teissier du Cros) — Tue, 03 Nov 2009 16:29:00 +0000

Here is a smelter which took ages to build because this country was determined to utilize as much as possible internal resources and a technology politically more acceptable to their spiritual leaders. It is now completed after years of slow construction during each potline was built and started by small steps. It is a side by side, prebaked anode smelter. Meanwhile, this leading aluminum producer tells how it will manage a loss of six million dollars in 2008; and this small one – scroll way down - may restart a smelter which was considered as finally shutdown, because the LME prices forecast has turned more favorable: good news for the industry. And this smelter, which doesn’t often make the news but is silently doing a good job - scroll way down - will change hands and be able to undertake major investments. This country was for 4 decades an example of low cost, clean excess energy. - scroll down - It is going to change, due to a new tax policy, which is bad news for a greenfield presently in progress. This report underlines how China penetrates more and more the African market of aluminum and energy mega-projects. At home, the Chinese government opposes any extra capacity increase because metal production is running well under available capacity but this local aluminum producer plans, nevertheless, a one million tonne greenfield! And in India, another major greenfield with integrated power appears on our Capacity & Investment Forecast Matrix.

A colossal mega-greenfield project originating in 2001 and having cost zillions in various feasibility studies and their updates is finally abandoned

atc@geanoverseas.com (Andre Teissier du Cros) — Thu, 15 Oct 2009 14:08:00 +0000

We initially forecast it, had hesitations later, and finally can check the old adage: “watch out for your first impression, it is the right one…” Click here to read the latest story.

Do you want to know at a glance where will take place investments in aluminum smelting?

atc@geanoverseas.com (Andre Teissier du Cros) — Thu, 15 Oct 2009 13:47:00 +0000

Click here, and scroll down seeking ‘not anticipate a material delay’, here and seek ‘by other routes’, here and seek ‘struck some business deals’,, here and seek ‘to facilitate the investment’, and here and seek ‘major hydro power station’.. These are only the big ones. For all others, notably extensions and refittings, CIF Matrix.

What is really going to happen in primary aluminum which you cannot read about elsewhere?

atc@geanoverseas.com (Andre Teissier du Cros) — Thu, 15 Oct 2009 13:30:00 +0000

Some events that may be considered as local or accidental indicate a major change of paradigm for investors in aluminum and energy, and for producers. Read Andre Teissier-duCros’s analysis here.

World crisis: Aluminum is beginning to see the end of the tunnel.

atc@geanoverseas.com (Andre Teissier du Cros) — Wed, 23 Sep 2009 18:07:00 +0000

This integrated aluminum producer is raising several hundreds of millions of dollars to finance major expansion plans. This major hydropower project will feed at least one greenfield and probably more. In Africa, political problems prevail but major projects such as this one and this one - scroll way down - will eventually be pursued, despite financial problems of some utilities. One greenfield is on the horizon in South Asia. Down under, > a major R&D project takes off to redesign the smelter of the future. In the far North, a greenfield is delayed –scroll way down - but will be completed. This emerging country may acquire a share in a major aluminum producer while inviting investors. And this greenfield project illustrates the future, total independence from Asia both of Western technology and financing.

The world arena of primary aluminum just underwent a shock…

atc@geanoverseas.com (Andre Teissier du Cros) — Fri, 04 Sep 2009 15:11:00 +0000

One of the bigger aluminum-producing nations – click here and scroll down to read a fascinating story -was well known for a long term, unshakable competitive advantage: a lot of excess energy at very low cost. Not true! You will see that what is at stake is a complete redistribution of competitive advantages on the planet… plus some pressure upwards on LME prices in the long term. Good news for some, bad news for others. Meanwhile did you expect that Global Warming would, within a few years, bring the world’s attention – click here and scroll way down - on a huge but hardly inhabited nation, which is suddenly undergoing a wave of foreign investments and will become a badly needed power island providing massive hydropower? Meanwhile, this small, old but competitive smelter - click here and scroll way down - is still looking for a buyer but will find one, at least we think so for some reasons. And this greenfield project remains on schedule, promising to be the largest in the world. Never a dull moment in primary aluminum…

The global map of investments is slowly but surely segregating between the have-been producers paralyzed by the excesses of Stockhholders Value Enhanc

atc@geanoverseas.com (Andre Teissier du Cros) — Thu, 20 Aug 2009 01:59:00 +0000

Read here why the aluminum industry is not out of the woods despite better behavior of LME prices. In that context, this major metal producer manages to extend standstill on a humongous debt, allowing him to pursue investment projects; while this minor producer must divest its mining and alumina businesses to restructure debt and pursue its northern greenfield project now fully approved by local authorities, which also promote major renewable energy investments to better serve their aluminum industry against public opposition. This country is actually increasing its aluminum production by 25% (annual as of July) despite world slowdown, and we present here the detail of the ongoing investment projects in the country’s main smelter; and this country manages to borrow from China to get its ailing aluminum industry to stagger along, thanks to a minimal level of maintenance investments. This old aluminum producing country is confronted full blast with the contradiction between energy policy targets and environment protection, global warming targets, which would be pushing metal production costs sky-high. In the Middle East, this projected mega-greenfield will apparently be on time. This greenfield project will be a bit delayed but will move ahead, and this one will follow some two years later.

Recent news confirm that integrating a power plant to a smelter is the way to go…

atc@geanoverseas.com (Andre Teissier du Cros) — Tue, 21 Jul 2009 03:43:00 +0000

This old but sound European smelter (scroll way down) has its own power plant, therefore it invests. This African industrial zone – scroll way down - tries to save a dying greenfield project by expediently integrating a major energy capacity unfortunately fueled with gas. This Middle East project stays the course despite recession, because it has its own power. This Chinese producer, thanks to energy integration, can contemplate acquisitions. Meanwhile, this US smelter - scroll a bit further down - will survive, but only thanks to a renewed contract which doesn’t justify any extension. In Latin America, this greenfield in progress, with integrated energy, stays the course despite protests from local greens. And this future greenfield way down South on the globe, which depends on government for energy supply, has to wait.

One smelter seems doomed, and yet may survive. Some greenfields and expansions are on the horizon. Another Soderberg will deserve revamping.

atc@geanoverseas.com (Andre Teissier du Cros) — Sun, 05 Jul 2009 15:47:00 +0000

This European smelter - scroll way down - is bound to increase capacity and revamp within a few years. This other one, also European, pursues a strategy integrating energy generation and will expand at some time. Russians are getting in trouble in Africa around this smelter, because of financial terms for the energy supply. This aluminum producer pursues an expansion – scroll way down - and plans two greenfields, work to begin within 3-4 years. Get ready! This European smelter may yet survive, but…

More light at the end of the tunnel for primary aluminum.

atc@geanoverseas.com (Andre Teissier du Cros) — Thu, 25 Jun 2009 20:00:00 +0000

The primary aluminum industry is showing signs that the end of the recession is not that far. Click here for a full report. LME prices seem to have hit the bottom and trends are encouraging for good reasons. Some of these long term trends, lead by one specific application of light metals (click here for another detailed report), will play a major part.
This country is a major metal producer and is about to decide deregulating its energy market. One country prepares with Chinese help a colossal, integrated industrial zone including a smelter, which will utilize hydro energy already in full development.
This other country is moving ahead in preparing a major hydro investment geared at future greenfields. And this other country decides finally to move ahead on an integrated energy/aluminum project which will be their first entry in the industry.
This aluminum producer decides not to delay his most immediate greenfield project. This other country will launch a bit less than 6 Terawatts of energy capacity mainly to serve the aluminum industry, including new greenfields. This aluminum producer restarts some idled capacity, and this one - click here and scroll way down - plans to double capacity within 5 years, and begins with adding power capacity to its integrated plant. And this producer succeeds in concluding an agreement for the renewal of its energy supply under favorable terms. A fascinating saga keeps developing in Europe around this smelter due to shut down unless it is saved at the last minute by either of two options – scroll way down for a comprehensive update - to create or refit energy capacity.
As well, click here and scroll way down to read the 5 decades story of this small country, now a major producer, who has gone full circle from cheap excess energy to facing difficult decisions arbitraging between aluminum strategy and local needs of the energy market, leading him to a decision regarding capacity expansion.

Some more smelters contemplate shutdowns, some are still investing.

atc@geanoverseas.com (Andre Teissier du Cros) — Thu, 04 Jun 2009 16:51:00 +0000

Manufacturers of smelter equipments, here is a project you should know about: this little-known smelter is expanding. Meanwhile, here is a world first: here is (scroll way down)
an attempt to integrate a biomass-generated power plant to a smelter in order to save it from loss of energy source. Meanwhile, the extension project of this excellent and otherwise competitive smelter
is delayed by a political dispute around CO2 emission. This major alumina project is put on hold, (scroll way down,) which will hamper more than one aluminum producer. This smelter may contemplate shutdown because an energy contract will not be renewed. This government is buying back its sole smelter because it cannot afford a shutdown which opens opportunities for innovative power integration solutions.

Despite the general investment slow down, some good news.

atc@geanoverseas.com (Andre Teissier du Cros) — Wed, 20 May 2009 06:23:00 +0000

Whether this smelter (scroll down) will or won’t obtain a better energy contract will give a signal on the US Administration’s views on primary aluminum. Work on this smelter is now in progress, and the technology supplier is also providing financing under extremely favorable conditions. Meanwhile, all investments in primary aluminum and related supplies are delayed, cancelled or slowing down. Here is the complete list since early 2009. But there is light at the end of the tunnel: One of the major aluminum producers, which is not paralyzed by debt, (scroll down) is reviving an old greenfield project. and This full-scale pilot smelter greenfield, which will demonstrate the highest electrical intensity yet, obtains some extra Government financing to go ahead.

Is the world aluminum crisis peaking yet?

atc@geanoverseas.com (Andre Teissier du Cros) — Sun, 03 May 2009 11:07:00 +0000

Read here about the coming shake up in the aluminum industry, consequences of too much debt. Is world aluminum crisis peaking? Click here to read why the major problem is debt… Despite being loaded with debt, this leading aluminum producer as you can read here manages to convince his government to – perhaps! – pursue two major projects; while this country - click here and scroll way down for the story - is worried that the Chinese aluminum industry may become too influential, and this other major producer changes the pilot to weather consequences of overwhelming debt, consequence of an orgy of leveraged acquisitions. BHP, in a similar situation, sells interests in alumina to Alcoa. In the meantime, aluminum investors who enjoy a strong balance sheet and plan for integrating their energy supply are going ahead with their projects. One of them even discovers with surprise that his greenfield will cost 20% less than expected! Other sound producers in less favored countries pursue their expansions. In Europe, the last smelters threatening to shut down - click here and scroll down - try a last effort to convince Germany that its utilities must be more competitive, even if compared only to their European competitors.

This major independent aluminum producer secures its long term alumina supply.

atc@geanoverseas.com (Andre Teissier du Cros) — Sat, 18 Apr 2009 02:52:00 +0000

Click here and search for sentence 'it was announced late yesterday' to read more.

Work begins on a new greenfield.

atc@geanoverseas.com (Andre Teissier du Cros) — Sat, 18 Apr 2009 02:50:00 +0000

This is not very common these days, so let's rejoice!
Click here and see which one.

Meanwhile, what is the future of coal as energy source for aluminum?

atc@geanoverseas.com (Andre Teissier du Cros) — Sat, 18 Apr 2009 02:46:00 +0000

Coal power generation, to survive, must invest in Carbon Capture & Storage. But it won't be cheap and it will take long. What will happen in-between?
Click here and scroll a bit down to read an interesting report.

But energy and aluminum marry well in the Gulf...

atc@geanoverseas.com (Andre Teissier du Cros) — Sat, 18 Apr 2009 02:43:00 +0000

... because investors know how to think long term, therefore they integrate energy and aluminum investments. Click here to read an overview.

Meanwhile, China increases aluminum inventories...

atc@geanoverseas.com (Andre Teissier du Cros) — Sat, 18 Apr 2009 02:38:00 +0000

... with positive effects on LME prices. Click here to read how... ...and then here.