London Metal Exchanges rule changes could bring regional
premiums down to historic lows and increase pressure on
smelters, according to Rio Tinto Alcan Inc. chief executive
officer Jacynthe Côté.
mining company has closed or curtailed 600,000 tonnes of
aluminum capacity since 2009, and its latest suspension of the
Gove refinery in Australia will remove 2.6 million tonnes of
alumina, she said Dec. 3.
The aluminum market is
in a modest deficit, but expansions in China could reverse the
trend, Rio Tinto Alcan said, adding that aluminum inventories
are expected to remain high as financial deals stay
Rio Tinto Alcan has no
significant new investments in alumina or aluminum for the
foreseeable future, given challenging market conditions,
The alumina market is
expected to be near balanced in 2014, the company said, adding
that it was trading at around the marginal cost of
Rio Tinto Alcan
remains slightly long in alumina, and said strong Chinese
demand for bauxite and Indonesian supply risk continue to
provide upward price pressure.
demand was due to declining Chinese domestic reserves and
grades," it said, adding that the company was well placed to
benefit from the increased demand for bauxite from China and
the Middle East.
Rio Tinto Alcan, which
has interests in three of the four largest bauxite mines in the
world, said it sees potential expansion opportunities in
Australia, Guinea, Brazil and other locations.
Rio Tinto Alcan
generates 62 percent of its own power requirements compared
with an industry average of 38 percent, it said.
modernization of its smelter in Kitimat, British Columbia, is
on track for start-up by end of 2014, the company said, adding
that its Yarwun 2 refinery in Australia is near completion and
will deliver reduced operating costs.
A version of this
article was first published in AMM sister publication Metal