I regularly browse my media monitoring tools in search of developments affecting the aluminium industry as a whole or specific companies. Here`s a summary of recent developments for Rio Tinto Alcan, the aluminium business of Rio Tinto acquired in late 2007.
Despite delaying the expansion and modernization of some of its facilities in Canada due to current downturn, Rio Tinto Alcan announced that it signed a protocole with the government of Cameroun regarding the Kribi aluminium project, a $6 bn investment project for the construction of an aluminium smelter of a capacity of 400 000 tonnes, a hydroelectric dam of 930 MW and a deep water port.
Following this announcement, many local stakeholders were expressing concerns as the company seems reluctant to pursue its investment projects in Canada despite operations remaining profitable throughout the very weak aluminium price period seen this winter. The President of the Aluminium Association of Canada, Jean Simard, was quoted in the media saying Canadian smelters were profitable at prices around US $1300-$1400 a tonne. The only project that seems to be progression is the construction if Rio Tinto Alcan’s AP50 pilot-plant in the Saguenay-Lac-St-Jean region. Still this project was partly enabled by the government of Québec granting a $175 million loan to the company.
All that considered, it is no wonder why local stakeholders went on to their usual complaints underscoring that for an industry that uses and abuses of Hydro-Québec’s advantageous “L-tariff” for large industrial users it has a somewhat poor record of job creation yet a very good one at collecting government assistance of all kinds.
The job creation factor does not seem to be as low as angry MPs and mayors would like you to believe though. Rio Tinto Alcan has started to hire new workers at its Saint-Maurice as it is seeing in increased demand for cables. This facility is likely to be sold to Nexans, a French multinational. According to the media, the sale process for this facility has been interrupted.
In other Rio-Tinto-spinning-off-old-Alcan-downstream-assets news, Rio Tinto Alcan recently sold its Americas food packaging arm to Bemis. It was reported in the press that the food packaging operations in Europe as well as pharmaceutical and tobacco packaging operations could be sold to Amcor.