UMC 0.00% $1.30 united minerals corporation nl

great story on alumina

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    SYDNEY - Rio Tinto Ltd. on Tuesday
    allocated $1.8 billion to boost alumina production in Australia
    by millions of tonnes, the latest big miner to endorse forecasts
    for strong aluminium markets.
    Refining of alumina is the second stage in a three-stage
    process to make aluminium and requires vast tonnages of bauxite
    to complete.
    The move comes as Rio and rivals scour the globe for ways to
    place a bigger footprint on aluminium production amid sector
    forecasts for rising demand.
    This includes organic growth as well as mergers and
    acquisitions, such as the teaming of Russian Aluminium (RUSAL),
    Siberian-Ural Aluminum Company (SUAL) and Switzerland's Glencore
    earlier this year and Alcoa Inc.'s hostile $28 billion
    takeover offer for Alcan Inc. .
    "We see a strong demand forecast for the aluminium sector
    going forward," said Eamon McGinn, an analyst with Australian
    Bureau of Agricultural and Resource Economics.
    Australia is the world's largest supplier of alumina,
    produced from seven refineries, which next year should yield a
    combined 20.5 million tonnes of the powder-like material.

    MIDDLE EAST NEEDS
    "The western world still needs to feed new aluminium
    smelters in the Middle East, and that is going to take a lot of
    alumina," said Tony Robson, an analyst with Global Mining
    Research in Sydney.
    Rio sees a global oversupply of alumina until 2010, when its
    new production kicks in.
    "After 2010 we see the market falling into balance," a Rio
    spokesman said.
    For Rio, its expansion work, to start in the third quarter
    of 2007 and take about three years, would lift output at its
    Yarwun refinery in northern Australia by 2 million tonnes to 3.4
    million tonnes by 2011.
    Rio earlier had discussed limiting the expansion to 1.4
    million tonnes before opting for the higher output.
    The refinery design allows for further expansion which could
    eventually see output exceed 4 million tonnes a year.
    "The expansion of Yarwun is one of the most significant
    investments made by Rio Tinto in recent years," Rio's recently
    appointed chief executive, Tom Albanese, said.
    "The attractive fundamentals of the aluminium industry,
    combined with Yarwun's well-located, low-cost position and our
    excellent bauxite resource at Weipa, reinforce the deep
    underlying strength of the group's organic pipeline."
    Global aluminium demand has risen 5.6 percent a year since
    2000, compared with about 2.5 percent annual growth in the
    previous two decades, industry figures showed.
    In China alone, aluminium consumption is seen growing 18
    percent in 2008, McGinn said.
    Increases in aluminium prices have lagged other base metals
    such as nickel and copper in recent years, thanks to nagging
    supply overhangs, but should still show 3 percent growth this
    year to an average of $2,655 a tonne, McGinn said.
    Meanwhile, demand from fast-industrialising China and India
    was leading a resurgence in blueprints for new projects.
    Chinese aluminium group Chalco <2600.HK> has agreed to
    develop the vast Aurukun bauxite deposit in eastern Australia as
    part of an alumina and aluminium-making project costing around
    A$3 billion ($2.5 billion).
    Australia's Queensland state last year picked Chalco --
    Aluminum Corp. of China Ltd. -- from a field of 10 to submit a
    final proposal to develop the deposit in eastern Australia.
    It takes about four tonnes of bauxite to make two tonnes of
    alumina. Two tonnes of alumina are used to produce a tonne of
    aluminium.
    Aluminium for delivery in three months on the London
    Metal Exchange settled at $2,755 on Monday. Prices peaked at
    multi-year highs of around $3,000 last year.
 
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