Russian major Rusal, a top three global aluminium producer, announced Friday that it had signed a memorandum of understanding with The Independent State Of Papua New Guinea, represented by the Ministry of Petroleum & Energy, to jointly explore the potential for energy and aluminium developments in PNG, based on the country's natural gas resources.

In accordance with the MOU the parties will establish the framework for an ongoing discussion on possible utilization of PNG's gas resources for potential Rusal operations in the region, the group said in a statement.

"This move is part of Rusal's strategy to transform into an energy and metals corporation embracing both aluminium smelting and energy generation. Following this strategy, the company has been actively pursuing opportunities to produce globally competitive electric power required for the operation of aluminium smelters," Rusal said.

The signatories to the MOU have agreed to a possible set-up of a joint working group to evaluate and take forward specific proposals submitted by Rusal.

Russian regulators have tentatively cleared a three-way deal that would create the world's biggest aluminium producer, the Federal Antimonopoly Service and the buyer said Wednesday.

Under terms of the deal, OAO Rusal, Russia's biggest aluminium producer, will absorb rival Sual as well as the aluminium assets of Swiss-based commodities trader Glencore, creating a global giant with smelters and refineries across Russia and facilities on four continents.

"We have made a decision in principle to approve of the deal and within two weeks we plan to complete the paperwork related to our final conclusion," the head of the Federal Antimonopoly Service, Igor Artyemyev, said in a joint statement with Rusal.

"This move will strengthen Russia's role as a fully fledged participant in international economic integration and encourage growth of its influence on the global market," he said.

Russian regulatory approval had been anticipated, but the deal, which was announced in October, remains to be approved by antitrust bodies in other jurisdictions including the European Union.

Company officials have said they hope the deal will be completed by April.

Under the terms of the agreement, Rusal will issue new shares to acquire Sual, which is controlled by metals and oil tycoon Viktor Vekselberg, as well as the Glencore assets.

Sual and Glencore will hold 22 percent and 12 percent stakes respectively in the new company, which would generate produce nearly 4 million tons of aluminium per year, or about 12 percent of global output. That would put the new company on pace to surpass the current industry leader, U.S.-based Alcoa Inc.

Aluminium Corp of China (Chinalco), the nation's largest alumina and aluminium producer, recorded 22.5 billion yuan in net profit last year, an increase of 18.1 billion yuan over its profit posted three years ago.

Chinalco Vice-President Lu Youqing said that the company's sales revenue was 105.5 billion yuan in 2006, an increase of 74.5 billion yuan compared to 2003.

The company plans to list on the domestic stock market, but Lu noted they are still awaiting regulatory approval.

Last December the Hong Kong and New York-listed company offered an 8.17 billion yuan stock swap for remaining shares it does not own in Shanghai-listed Lanzhou Aluminium Co and Shandong Aluminium Industry Co.

"The move, which is a very important step in our process to trade our A shares on the Shanghai Stock Exchange, will further boost the company's development," said Lu.

Last year the company's output of alumina, a raw material for making aluminium and abrasives, increased 59 percent compared to 2003, while finished aluminium showed 208 percent growth over the same period.

Production of alumina has accounted for about 60 percent of Chinalco's profit, said Lu, adding that the company will increase its alumina production by opening new manufacturing facilities.

In 2006 Chinalco started two alumina plants in Chongqing Municipality and Zunyi in Southwest China's Guizhou Province. This year it will build another new alumina plant in North China's Shanxi Province.

Many local companies began to produce alumina in 2006, causing a sharp drop in price. As a result, Lu said Chinalco has worked hard to reduce its costs in the alumina production process.

Lu said that now Chinalco is integrating aluminium production companies it acquired over the past few years. Last year it bought a series of companies such as the Fushun Aluminium Co to increase its aluminium productivity.

"This year we will make no major mergers and acquisitions in our aluminium business. What is more important, we will pay more attention to integrating the companies we bought," he said.

Apart from the domestic market, the company is also exploring overseas markets such as Brazil, Australia, Vietnam and Guinea. It has won a bid to build a bauxite mine and refinery in the Australian state of Queensland.

The Feasibility Study for the open pit phase of the New Liberty Gold Project shows robust economics at current gold prices.

• Internal Rate of Return of 72% at $600 gold and assuming 70% debt financing at 6% over 5 years

• Projected 99,000 oz gold production in year one of operation, and averaging 84,000 oz/year over the first five years

• Start-up anticipated commencing H1, 2008, depending on permitting and financing

• Highly favourable metallurgy assists in keeping processing costs down

• Studies to be initiated on underground exploitation of the remaining resource aimed at extending mine life

Mano River Resources announced Wednesday the results of the Feasibility Study over its New Liberty Gold Project in western Liberia.

The Study was undertaken by independent consultants MDM Engineering Pty Ltd of Johannesburg, South Africa, together with Lower Quartile Solutions Pty Ltd of Perth, Australia. The tailings dam design was carried out by Golder Associates.

Subject to arranging production financing and obtaining required permits, production is anticipated to commence during the first half of 2008, the company said.

The New Liberty Project is located some 100km north west of Monrovia, the capital of Liberia, and is held as to 100% by Mano, subject to a 10% free carried interest and a 3% production royalty, both held by the government.

In October 2006, Mano announced that, as a result of the 2005/06 drilling campaign, the estimated gold resource at New Liberty had been increased to 1.4 million ounces (13.533 million tonnes of measured and indicated resources grading 3.18 g/t).

The proven and probable reserve figures should be considered in the context of this Feasibility Study having focused on the open-pittable gold mineralisation only, Mano said.

Studies will commence shortly on the scope for extending the life of the operation through underground exploitation of as much as possible of the balance of the measured and indicated resource, not economically recoverable in the open pits.

Dr Tom Elder, Mano's President and CEO, said: "The deposit displays simple geology, good grinding characteristics (i.e. the ore is relatively soft) and excellent metallurgy, resulting in high overall metal recovery of 93%.

Once the open pit phase of operation is completed, underground mining, probably via ramp access, of as much as possible of the balance of the resource should offer the scope to extend the life of the operation beyond the present 8 years.

"Studies of this potential are about to commence. In addition, within truckable distance, there are prospects such as Weaju which may have the potential to provide further feed to the New Liberty plant."

The base case for the Feasibility Study involves open pit contract mining from three pits, Larjor, Kinjor and Marvoe, over an initial estimated mine life of eight years. The average stripping ratio is 11.5 to 1.

Because the deposit exhibits very simple metallurgy and therefore does not require special treatment, processing will be via a gravity circuit, recovering almost half of the gold, followed by conventional Carbon-in-Leach (CIL) treatment, the company said.

The plant has a design capacity of 600,000 tonnes per annum. Metallurgical testwork indicates gold recovery of the order of 93%.

The initial Capital Cost of $59 million includes the sum of $4.7 million in pre-production operating expenditure, while operating costs average $35 per tonne of ore.

On the basis of anticipated 70% debt financing and a gold price of $600 per ounce, the post tax and royalty Internal Rate of Return (IRR) of the project is 72%. The breakeven gold price (at which the IRR is zero) for this base case is $452.

Mining will be by conventional open pit, on a contract basis. Bids are presently being considered from a short list of mining contractors.

Because of the straightforward metallurgy of the gold mineralisation, the processing plant comprises a conventional crushing and ball mill circuit with a split stream from the cyclone underflow delivering the coarse gold fraction to a centrifugal concentrator, with the concentrate being upgraded on a shaking table and then to direct smelt. The balance of the plant comprises a conventional CIL circuit, with tailings being deposited in a valley fill tailings facility situated less than one kilometre from the plant complex.

The metallurgical testing has demonstrated lower than average consumptions of cyanide and lime, and also low ball consumption due to the low abrasion index, all factors positively affecting operating costs.

The area is one of high rainfall, averaging +/-3 metres per annum, and the tailings dam and Marvoe Creek diversion are being designed for a 50 year flood event. Due to the lack of a power grid in Liberia, a Heavy Fuel Oil power plant has been included in the design and capital cost estimate.

International Aluminum Corp., has agreed to be acquired by an affiliate of Genstar Capital, LLC for $53.00/share in cash in a transaction valued at nearly $228 million, the company said Wednesday. International Aluminum, a manufacturer of aluminium and vinyl products for the building industry, is based in Monterey Park, California.

The Genstar offer represents a premium of nearly 6% over International Aluminum's closing price on January 9, the last trading day before disclosure of the merger, and a 19.4% premium over the average closing price during the sixty trading days ended January 9, the company said.

International Aluminum's board of directors unanimously approved the merger agreement, and will also recommend approval by International Aluminum's shareholders.

The transaction will be financed through a combination of an equity investment by Genstar and debt financing, which has been committed by CIBC, Inc. Completion of the transaction pending regulatory approval is expected in the second quarter.

Genstar Capital Managing Director Darren J. Gold in a statement said, "Genstar has a very successful track record of investing in building products companies like International Aluminum. We hope to leverage this experience to continue the company's long history of success."

In aluminium's Midwest spot market, prices averaged $1.24/lb in the fourth quarter, an increase from the $1.20 average price in the third quarter. And just now, primary ingot costs $1.25. However, the price of alumina – the raw material used to make aluminium – fell sharply during the quarter and that could cut future spot aluminium price tags.

"The drop in the spot market can be attributed to the ramp up of alumina production in China, leading to reduced spot demand throughout the world market," writes analyst Kuni M. Chen at Banc of America Securities in a report to clients. Just last week, China's National Development and Reform Commission, the country's top economic planner, approved Aluminium Corp. of China's plan to build an alumina production plant with annual output capacity of 800,000 metric tons in Chongqing city.

Atop that, Norwegian company Norsk Hydro is working on an extensive number of projects globally to expand its aluminium metal business. A top priority for its aluminium metal sector in 2007 is delivering new profitable bauxite, alumina and smelter opportunities. So, lower alumina prices – combined with sliding aluminium demand from reduced manufacturing activity – soon could push primary metal tags down as 2007 progresses.

Analyst William Adams at BaseMetals.com e-mails Purchasing.com with the message that "in the short term, expect volatile aluminium trading to continue, but we feel the buyers will become increasingly confident in lower pricing ahead." Note: Purchasingdata.com has forecast $1.24/lb for the first quarter – followed by gradual slippage and $1.16 in the final quarter.

amaica had a record 2006 in bauxite mining with 15Mt of output, surpassing the island's yearly production levels since 1974, a representative with the Jamaica Bauxite Institute confirmed to BNamericas.

The official added that the current surplus in the global bauxite market, mainly caused by China's 62% year-on-year jump in output to 12.7Mt for 2006, has caused alumina spot prices to slide to US$196/t at the close of the year.

Alumina is the refined form of bauxite ore, which is used to make aluminium.

Meanwhile, bauxite exports rose 12.6% to 4.6Mt in 2006, while alumina production edged up by 1% in the year to reach 4.1Mt due to a rise in productivity at the Jamalco refinery, owned jointly by US giant Alcoa (NYSE: AA) and the Jamaican government, the representative said.
Forecasts for 2007

Output in 2007 is expected to reach 4.2Mt of alumina, given Jamalco's Early Works project, which – set to start this year – is to add 150,000t of alumina to its current output, said the official, adding that Jamaica should churn out 5.1Mt of crude bauxite in 2007.

China's Baotou Aluminium Group has officially announced Friday that it is now part of Chinalco, having transferred 80% stake in the group to Chinalco on December 30, 2006, a company official told Platts.

"The transfer and paperwork were all settled on December 30, but we only just announced it," he said. "The move to join Chinalco was actually decided in 2003 when we had signed a preliminary agreement, but it took a while to finalise everything," he added.

The official said there were no plans yet to expand production capacity following Chinalco's takeover, "as the state policies now have very strict control over expansions". But he added that a major advantage of being part of Chinalco is that "we can at least expect a steady supply of alumina from now on".

Baotou Aluminium Group has a current combined aluminium ingot and alloy production capacity of 320,000 mt/year, and expects to produce about 300,000 mt in 2007. Output in 2006 totaled 260,000 mt.

"We can produce more this year as we had just fully ramped up capacity to 320,000 mt/year at the end of last year. Before that, even though design capacity was 320,000 mt/year, operating capacity was lower," the official said.

Of the expected output, Baotou will produce about 70% aluminium alloys, with the remaining being 99.92-99.7% aluminium ingot. The company also started producing high-purity 99.992% grade aluminium ingot at the end of 2006, and aims to produce about 10,000 mt this year.

Chinalco is the parent company of Chalco, the largest producer aluminium in China. Chinalco officials could not be reached for comment Friday.

Aluminium producer Alcoa Inc. reports earnings for the fourth quarter on Tuesday, Jan. 9. The following is a summary of key developments and analyst opinion related to the period.

OVERVIEW: Pittsburgh-based Alcoa is the first of the Dow Jones Industrials to report results. The release of Alcoa's quarterly financial report traditionally marks the start of earnings season.

Alcoa announced a plan in November to cut 6,700 jobs to streamline its cost structure. Although the restructuring plan is ultimately expected to save the company $125 million annually before taxes, Alcoa expects to book charges of $375 million to $425 million in the fourth quarter related to the program.

The job cuts represent about 5 percent of Alcoa's 129,000 employees in 44 countries.

In the aluminium spot market, prices averaged $1.18 a pound in the fourth quarter, according to Morgan Stanley analyst Mark Liinamaa – an increase from the $1.13 average price in the third quarter.

However, the price of alumina – the raw material used to make aluminium – fell sharply during the quarter. Alcoa is a major producer of alumina.

"The drop in the spot market can be attributed to the ramp up of alumina production in China, leading to reduced spot demand throughout the world market," said Bank of America analyst Kuni M. Chen, in a report. Lower alumina prices could hurt Alcoa's earnings, he said.

Meanwhile, the U.S. dollar lost ground against other major currencies in the fourth quarter and suffered a particularly sharp decline against the euro. Alcoa produces its products globally, and a weaker dollar made local costs in Europe and Australia more expensive for the company

BY THE NUMBERS: On average, analysts polled by Thomson Financial forecast earnings of 65 cents per share on sales of $7.63 billion.

ANALYST TAKE: Morgan Stanley's Liinamaa cut his fourth-quarter earnings estimate for the company, despite stronger-than-expected aluminium prices, citing the dollar's weakness during the period and a strike at an engineered products plant. Liinamaa also said the automotive sector in North America continued its downward spiral faster than expected, which could hurt Alcoa's earnings.

China's Shanxi Guanlu Aluminium is planning to expand ingot capacity by 100,000 mt/year on its existing 200KA line with 70,000 mt/year capacity currently, a company official told Platts Tuesday.

"We plan to start the expansion works this year, after the Chinese New Year holidays (in mid-February), which will raise the line's capacity to about 170,000 mt/year when completed," he said. "We have no set deadline for completion yet as there's still a lot of paperwork to clear, such as final approvals and project tenders. But we expect it will take at least a year from startup for full completion," he added.

Shanxi Guanlu currently operates three ingot production lines. Besides the line with the planned expansion, it has a 75KA aluminium production line with a 40,000 mt/year ingot capacity which will not be expanded in the near future, the official said. The third, a 300KA line with a 200,000-220,000 mt/year capacity, is a joint-venture plant with the Aluminum Corp of China (59% stake). This is operated under the joint-venture plant Shanxi Guanlu Huasheng Aluminium, in Yuncheng city, Shanxi province, which started production in April 2006 and produced around 120,000 mt for 2006.

"Total output last year was affected by high alumina costs in the earlier part of the year, and the joint-venture line was also started up late in April. But this year, we aim to reach for full output on all the lines," the official said. He did not give detailed output figures for 2006 as "the numbers are still being compiled."

In 2006, the company had shut down its 40,000 mt/year line for most of the year due to high alumina costs in the first half of the year. The line was shut down in December 2005 and restarted in October 2006, and output was expected to reach just around 4,000 mt for last year. Shanxi Guanlu had also expected to produce a full 70,000 mt from its 200KA production line.

Import prices stood around $600-630/mt CIF China in late 2005 to early 2006, but has since fallen to the current $230-240/mt CIF China by late 2006. Domestic alumina prices peaked around Yuan 5,650/mt ($715) in 2006, but currently stands at around Yuan 2,300-2,400/mt.

"Alumina prices are much lower now and expected to remain low...market demand also remains very strong, so it's quite a good time to expand," the official said. "Although the government changed export policies last year and increased export taxes on aluminium, we are not too concerned as we have some tie-up with China Minmetals this year and they will help us to export," he added, but declined to give further details.

Shanxi Guanlu exported about 20-30% of output from its own two production lines in 2006 and expects to maintain that level in 2007, the official added.

Meanwhile, the company is facing a slight delay in the completion of its planned power plant, which was originally expected to be ready in September 2007. "There are some funding issues so we may not complete the plant until 2008...we're not definite yet," the official said. Works on the power plant started in March 2006. When ready, the new power plant is expected to lower the company's power costs to Yuan 0.25/kWh, compared with the current cost of Yuan 0.342/kWh. "The new plant will also help to supply power to our planned expanded capacity," the official added.

A day after Alcoa Inc., the world's largest aluminium producer, predicted continued strong demand for the metal this year amid tight supply, analysts took a second look at their own forecasts – and wondered if they looked too light.

Among several brokerages that cover Alcoa's shares, 2007 price forecasts for aluminium range from 95 cents a pound to $1.35, indicating analysts predict anywhere from a roughly 17% drop to a 20% gain from last year's average price.

"Our full-year aluminium price forecasts could be conservative," said Bear Stearns analyst Anthony Rizzuto on Wednesday. He said the metal may face some challenges this quarter as commodities index funds rebalance.

Still, "the current aluminium spot price ... offers a relative attractiveness versus other metals," he wrote in a research note. He forecasts aluminium prices of $1 a pound this year, as tracked by the London Metal Exchange.

Other producers likely to benefit from higher aluminium prices include Canada's Alcan Inc. and smaller producer Century Aluminium Co.

A lot depends on China.

The country, which has been driving global demand for aluminium, has also been building up its production facilities. Last year, it restarted several plants turning out alumina, the granular raw material used to make aluminium, and ramped up aluminium output.

After that steep increase, China's production growth could cool this year.

BMO Capital Markets' Victor Lazarovici estimates the world could see a deficit in the supply of aluminium of about 300,000 to 600,000 metric tons, supporting average yearly prices of about $1.35, he said.

"The increase in aluminium production last year in China will continue but the rate of growth in production will slow sharply," he said.

Meanwhile, Prudential Equity's John Tumazos said aluminium prices could top his $1.20 a pound forecast for this year, even reaching as far as $3 a pound, should Chinese aluminium production fall short.

"It is possible that the Chinese cannot maintain current output or achieve ... recent output growth," he told investors.

In a call Tuesday evening, Alcoa's executives forecast double-digit demand from China. The company has previously forecast Chinese production growth will level off at about 17% this year.

"I think the market will continue to be tight," said Chief Executive Alain Belda but, when asked, declined to predict where aluminium prices are going.

As we are all aware, metals markets have been on fire over the past couple of years, driven by the overall strength of the global economy and insatiable demand from developing nations such as China and India. While I acknowledge that metal prices have backed off from their recent highs, I believe global demand will remain fairly robust. China's economy continues to expand at a double-digit clip, India's GDP growth is clocking in at around 9%, and according to the World Bank, emerging markets overall should see growth that remains above 5.5% for both 2006 and 2007. Driven by the developing-market growth engine, the global economy is expected to expand by 4.9% in 2006 before slowing a mite to 4.5% in 2007.

Whew, that was a mouthful, wasn't it?

In any case, my point is simple: Global economic growth remains strong, and demand for commodities continues to be robust. As a result, I believe that metal stocks, among other commodity plays, have further room to run. Two of my favorite plays in the sector are Aluminium Corporation of China (NYSE: ACH), better known as Chalco, and Southern Copper (NYSE: PCU). Let's take a look and see if I haven't gone soft in the head.
Aluminium Corporation of China

Chalco is the largest manufacturer of alumina and aluminium in China, producing approximately 7.2 million tons of alumina in 2005 (making it the world's second-largest player after behemoth Alcoa (NYSE: AA)) and more than 1 million tons of aluminium. At the end of last year, Chalco's nine owned or operated plants had annual production capacity of 8.3 million tons of alumina and 1.5 million tons of aluminium. These numbers, not to mention a number of recent acquisitions, give the company some wiggle room in terms of ramping up supply in a country where, according to rival Alcoa's estimates, aluminium demand is expected to increase at a compound annual rate of 12.5% between 2005 and 2009.

Now, let's take a look at aluminium prices, which have been on a tear this year. The metal currently commands a cash price of roughly $1.31 per pound on the London Metal Exchange (LME), up 54% from 2005. Despite the perennial bears' predictions of an imminent decline, I believe prices will continue their upward trajectory; Century Aluminium's (NASDAQ: CENX) president recently noted that he expects "healthy" aluminium demand growth of 4%-6% in 2006 and 2007, but only a 2%-3% increase in production capacity. Simply put, demand growth continues to outpace production capacity increases and will continue to do so for the near future, especially in China. In such a tight supply-and-demand situation, prices can't help but rise.

National Aluminium Co. Ltd. (NALCO) and Hindalco Industries Ltd. have hiked prices after cutting them last month.

The state-run NALCO has increased prices by as much as Rs4,000 or 3% to Rs132,000 per ton. Hindalco has raised prices by the same amount.

The price of aluminium climbed to the highest in more than six months on Dec. 14 as global inventories declined. Aluminium stockpiles, tracked by the London Metal Exchange (LME) has dropped 13% since the end of June.

Meanwhile, Hindustan Zinc Ltd., India's largest zinc producer on Dec. 16, cut prices of the non-ferrous metal and lead by 0.4% and 0.2%, respectively.

Shandong Aluminum Co. Ltd. and Lanzhou Aluminum Co. Ltd announced Tuesday a modified version of Chalco's share-swapping proposal for its A-share listing plan.

Chalco said it would increase holdings in its new A-shares to 30 percent of the total when its A-share price falls to below the share-swapping price of RMB 6.6 ($0.85) in the three months after its A-share listing in Shanghai, according to the announcement.

The remainder of the share swapping plans remains the same with the last version announced on Dec. 8. Chalco will swap 3.15 shares for one tradable share in Shandong Aluminum. Private investors in Shandong Aluminum will have the right to claim cash at RMB 16.65 ($ 2.13) per share from Chalco.

Chalco will swap 1.8 shares for one tradable share of Lanzhou Aluminum and swap one share for one non-tradable share in Lanzhou Aluminum. The proposal is in front of the two companies' boards at present and is awaiting the China Securities Regulatory Commission's approval.

The proposal made to Lanzhou Aluminum is still a little lower than shareholders expectations despite the additional terms in the modified version, said Heng Kun, a senior analyst with Everbright Securities.

However, Chalco's recent price rise indicates shareholders are optimistic with Chalco's future development, which means the proposal will be approved by shareholders more easily, he said.

Shandong Aluminum and Lanzhou Aluminum suspended trading Tuesday and will resume trading Wednesday.

Shandong Aluminum Co. Ltd., Chinalco's alumina subsidiary, started production at a 630,000-ton alumina project Monday, said a company official.

The project will use imported bauxite to produce alumina and use Bayer technology, in line with the China Aluminum Industry Development Policy.

Although the project is able to make 630,000 tons of alumina per year, the company may not rush into full production because the alumina market is in oversupply and the current price is at a very low level, said an official with the company's securities affairs department, who asked to remain anonymous.

Shandong Aluminum is Chinalco's major alumina making subsidiary. Its capacity totals 1.5 million tons per year.

Chinalco has cut its alumina price to RMB 2,400 ($ 307.69) per ton pressured by an alumina capacity boom in China.

Aleris International, Inc. (NYSE: ARS) announced Tuesday the completion of the acquisition of the Company by affiliates of Texas Pacific Group (TPG).

On August 7, 2006, affiliates of TPG entered into a merger agreement with the Company to acquire the Company for a purchase price of approximately $1.7 billion plus the assumption of or repayment of approximately $1.6 billion of debt. Under the terms of the merger agreement, Company stockholders will receive $52.50 per share in cash without interest.

Steve Demetriou, Chairman and CEO of Aleris said, "We are very pleased to complete this transaction with TPG which has created significant value for shareholders while positioning Aleris with a partner committed to our continued growth as a private company."

Aleris's common stock will cease trading on the New York Stock Exchange at market close today, and will be delisted. As soon as practicable, a paying agent appointed by TPG will send information to all Company stockholders of record, explaining how they can surrender Company stock in exchange for $52.50 per share in cash without interest. Stockholders of record should await this information before surrendering their shares.

Stockholders who hold shares through a bank or broker will not have to take any action to have their shares converted into cash, because these conversions will be handled by the bank or broker.

About Aleris International, Inc.

Aleris International, Inc. is a global leader in aluminium rolled products and extrusions, aluminium recycling and specification alloy production. The Company is also a recycler of zinc and a leading U.S. manufacturer of zinc metal and value-added zinc products that include zinc oxide and zinc dust. Headquartered in Beachwood, Ohio, a suburb of Cleveland, the Company operates 50 production facilities in North America, Europe, South America and Asia, and employs approximately 8,600 employees.

About TPG

TPG is a private investment partnership that was founded in 1992 and currently has more than $30 billion of assets under management. With offices in San Francisco, London, Hong Kong, Fort Worth and other locations globally, TPG has extensive experience with global public and private investments executed through leveraged buyouts, recapitalizations, spinouts, joint ventures and restructurings.

Alcan has rounded out 2007 power supply contracts for its 180,000 mt/year aluminium smelter in Sebree, Kentucky, and is asking state regulators to approve the new arrangements.

At Alcan's request, Kenergy, an electric cooperative in western Kentucky, entered into a wholesale agreement with Big Rivers Electric, which procured about 120 megawatts of market-based power. Alcan is seeking Kentucky Public Service Commission approval so the smelter can begin receiving the power starting January 7, 2007.

Pam Schneider, Alcan's continuous improvement coordinator at the smelter, told Platts late Monday the Big Rivers-sourced power represents about one-third of the smelter's total electricity requirements. An E.ON US subsidiary currently is supplying the smelter's remaining power needs.

According to Kenergy's Monday filing with the PSC, most of the 120 MW will be supplied through Southern Illinois Power Cooperative (SIPC), Fortis Energy Marketing & Trading and Duke Energy Indiana, formerly PSI Energy. The cost for blocks of firm power ranges from 4.9 cents/kWh to 5.2 cents/kWh. Alcan is expected to pay about 4.4 cents/kWh for a 15-megawatt block of interruptible power.

Big Rivers will acquire, through Marion, Illinois-based SIPC, about 75 MW of power from "certain suppliers" within the Midwest Independent Transmission System Operator, a Carmel, Indiana-based regional transmission organization.

Schneider said Alcan hopes 2007 will be the final year the smelter will have to rely heavily on market-based power. Big Rivers, a Henderson, Kentucky-based generation and transmission co-op that supplies wholesale power to Kenergy, is in the process of "unwinding" a 25-year lease agreement signed in 1998 with LG&E Energy, now E.ON US. Under the deal, LG&E/E.ON US manages Big Rivers' 1,740-megawatt coal-fired generating system in western Kentucky.

Big Rivers hopes by late 2007 to regain operational control of the power plants. When that happens, Big Rivers is expected to resume supplying most, if not all, of the power needed by the Sebree smelter.

DRUNEN & PITTSBURGH -- Aluminum extrusions produced by Alcoa Netherlands in Drunen helped to make a home featured on the popular U.S. television program "Extreme Makeover: Home Edition" livable for a paralyzed man. Alcoa Netherlands is the sole supplier of aluminum extrusions to Handi-Move International, a leading manufacturer of lift and care systems for disabled persons based in Belgium. Handi-Move's U.S. distributor is SureHands(R) Lift & Care Systems of New York.

The premise of Extreme Makeover: Home Edition is to challenge a team of professional designers to renovate a home in a week. Earlier this season, the designers helped a handicapped man accomplish normal activities for daily living by installing a SureHand(R) Lift & Care System - a motorized system that moves a person in a so-called body-support suspended from tracks installed on the ceiling. Alcoa extrusions are used for the ceiling tracks of the navigation system.

According to Serge Timmermans, Alcoa account manager for Extrusions and End Products, Handi-Move chose Alcoa aluminum extrusions for its products because of four attributes of the metal: weight, shape, machining and durability. "Handi-Move products use profile shapes that are made possible by aluminum extrusion forming, which is not possible with steel. In addition, aluminum profiles are easier to machine and bend than steel ones. And finally, aluminum is the preferred metal for a tool such as the Handi-Move ceiling track because of aluminum's durability and it's lightweight. It will stay in good physical shape even in humid surroundings," said Timmermans.

With almost 50 presses in 6 European countries, Alcoa Europe Extrusions & End Products (EEP) is one of the largest extrusion companies in Europe. Aluminium extrusions for automotive or aerospace applications, commercial transportation profiles, building and construction systems, heat sinks for electronic components, micro extrusions, industrial products or other - Alcoa EEP is a one-stop-shop for aluminium extrusion requirements. It is ISO 9001, ISO 14000, QS 9000 & EURAS EWAA Qualanod and Qualicoat certified supplier.

Alcoa in The Netherlands

Alcoa has been active in The Netherlands since 1967. Products produced in The Netherlands include extrusions, architectural systems, building products, packaging, ingot and end products like greenhouse systems, light poles and flagpoles. Alcoa Netherlands has manufacturing facilities in Raamsdonksveer, Drunen, Harderwijk and Kerkrade.

In the quest for reduced weight, driven by the call for reduced CO2 emissions, aluminium is gaining increased use in automotive applications. The variety of semi-finished products - plate, sheet, extrusions, castings etc. - provide numerous possibilities for designing optimal, cost-effective solutions. Few other materials offer such a span of opportunities, but along with this there lies a challenge. Forming and joining aluminium into products calls for specific technical knowledge that is not always available in the engineering departments, where steel and other materials are considered the workhorses.

Besides the trend in reducing weight in a car, there is a clear drive to reduce the number of parts, both to reduce cost and improve quality. Reducing the number of parts is often synonymous with increasing the level of functional integration in a given part. This is obvious for example in large, thin-walled aluminium or magnesium castings, where one cast part replaces a number of stamped parts.

Another complication is the effort to pack more equipment and components into a limited volume. Powerful engineering tools i.e. computer-aided design and finite element analysis packages, enable engineers to utilise available space to the maximum. Tighter packing also puts increased demands on geometrical tolerances.

These factors drive the increase in demand for aluminium components, consisting of semi-fabricated products that are formed, then joined in some way or another. All of this under the pressure of providing the lowest possible cost.

Integrated function in extruded components

Figure 1: Fantasy profile – functions such as bolt tracks, sockets and flanges are easily incorporated in the cross section of the extrusion

The extrusion process provides exceedingly large opportunities

for designing optimal components, as the cross-section of an extrusion can be tailor-made for a relatively small cost. Integrating function i.e. bolt channels, sockets, cooling flanges etc. are standard procedure (Figure 1). For parts made from straight members, this is without complication.

Automotive components are seldom straight, thus calling for some sort of forming. Bending and hydroforming are two forming processes used in manufacturing components having complex shapes.

Forming in two dimensions

Figure 2: Rotary draw bending in principle – the extrusion is clamped to and formed around a rotating tool; the tool in the illustration is the yellow part and rotation counter clockwise

Bending is done by several methods: roller bending, press bending, rotary draw bending and stretch bending. Bending radius, section complexity and tolerance demands are decisive for which method is best. Rotary draw bending is used for relatively small radii and complex sections (Figure 2).

Bending complex sections is an intricate business, especially if there are tolerance demands on cross-section dimensions or the section has thin walls.

One example is illustrated in Figure 3. Finite element analysis is useful in the engineering stage for evaluating bend ability and variation in spring-back due to factors such as material strength and friction.

Figure 3: Bent section and finite element analysis – buckling may occur in tight bends and compressed flanges

Utilising extrusions in the third dimension

Bending provides curvature along the length of a member but not local variation in cross-section. This type of forming is enabled by hydroforming.

Figure 3: FEM simulation identifies problem areas in the engineering stage

The principle is that a hollow tube or extrusion is put into a tool having a cavity with the shape of the finished part. The tool is closed, and hydraulic pressure applied inside the tube where it is then formed against the tool.

Hydroforming enables the production of complex forms with very tight tolerances. The side rails in Figure 4 have a total length of 4,500mm and are within a form tolerance of 0.7mm. This part, developed for research purposes, in theory replaces eight stamped parts that must be joined together by some means.

Figure 4: Illustration of three process steps for a car side rail – first, an extruded tube (top), second, the tube after bending (middle), and third, the tube after hydroforming (bottom)

Integrating functions in the hydroforming process

In the hydroforming process, other processes may be incorporated i.e. punching and trimming. In the same part reference holes were punched and the slug was left attached to the rail.

End trimming is shown in Figure 5. This is also done in the hydroforming tool to ensure tight tolerances and reduced cost. The trimming is done at the end of the forming step when the pressure is at its peak. With extruded members it is possible to create complex sections i.e. multi-cavity hollow sections, or hollow sections with flanges. Flanges may also be trimmed in the forming cycle.

Figure 6: Prototype engine cradle – hydroformed side rails and a rear cross member made of a cast top side and a plate bottom joined by friction stir welding

The ideal forming strain for hydroformed aluminium extrusions is around 3-10 per cent increase in circumference depending on alloy and temper. This secures form stability without exceeding the formability limits. Also, as bending is often done prior to hydroforming, strain that is developed in the bending stage must be considered in the hydroforming stage. This is strong reason for using FEM analysis when designing hydroformed components.

Hydroforming is often conducted after a bending operation. The quality of the bending has paramount importance for the quality of the finished part. Wrinkles that appear in bend will not disappear in hydroforming.

Joining

Figure 5. End trimming executed in the hydroforming process

Hydroformed parts are joined by one way or another to components. The tight tolerances enable the use of laser welding where gaps typically must be less than 0.5mm. Hybrid laser welding is more flexible, tolerating larger gaps with good quality. In Figure 6, an engine cradle is presented. The cradle is the result of a lightweight study with the objective of substantially reducing weight in the front end of the vehicle. The weight of this substructure is 16kg, as compared to 23kg for the steel version.

This creation uses various semi-fabricated products and joining methods. The side members are hydroformed extrusions. The front cross member is a straight extruded member welded to the side rails by MIG welding. The rear cross member is built up of a cast part and a plate, where the plate is joined to the casting by friction stir welding (FSW). A cast part was necessary to accommodate the geometry of the member, which has very large variations in cross-section geometry. The design was locked in that aspect with no possibility for change.

The FSW operation was executed in three dimensions, not two-dimensional, which called for special preparations. FSW joints have higher fatigue strength than MIG, which could have been an alternative, but with a somewhat different design. The rear cross member was joined to the side beams by MIG welding.

The casting was sand cast in Silafont 36 alloy. Different plate alloys were used and AA6082-T6 turned out to have the best-combined properties. AA5083 was invest-

igated and tested in a few prototypes but FSW results proved to be inferior to those in 6082.

Cost analysis showed the concept to be competitive to other competing concepts and within the framework put forward by the customer.

Future developments

Cars and other vehicles incorporate an increased amount of formed aluminium extrusions and will continue to do so in the quest for reduced vehicle weight. Integrating more function helps reduce the number of parts and helps lower cost. Making use of the technologies available is a challenge for automotive engineers and suppliers.