South32 secures approval for Worsley Alumina mine extension
Worsley began operations around 40 years ago and is one of the world's biggest alumina refineries.
Norsk Hydro, one of the world’s top aluminum producers, sees growth in global aluminum demand weakening in 2012 as a result of economic turbulence that is creating a weak market and pushing many industry players into the red, reports Mineweb .
The Norwegian miner’s stocks dropped 2.9 percent after the prediction. However, Hydro’s President and CEO Svein Richard Brandtzæg showed confidence, as stated in a press release:
“The long-term prospects of aluminum remain very promising despite the current economic turbulence, and I am highly encouraged by the strong development of Hydro’s operational performance.”
“In Europe, the uncertainty relating to the sovereign debt crisis has impacted our customers,” Brandtzæg added. “It may take some time before we can see improvement inEurope.”
The aluminum sector has been particularly weak in the fourth quarter as customers cut inventories amid the financial chaos, reported Reuters:
However, Chinese producers are rumoured to have curtailed yearly production by about 1.5 million tonnes, Hydro’s Head of energy and corporate business development Arvid Moss said, which could relieve some of the industry’s overcapacity problems.
Aluminum prices have declined in recent months on concerns about the euro zone crisis and its implications for demand, with the London Metal Exchange (LME) three-month aluminum price down to $2,100 a tonne from its peak of $2,800 in May. At prices currently below many producers’ break-even levels, many expect production cuts. Hydro said earlier this month it would not restart currently idled capacity at its Sunndal smelter in Norway until conditions picked up.
The Norwegian miner presented three scenarios for earnings potential based on different levels of aluminum prices and exchange rates, highlighting that Norsk Hydro is in “a robust financial position with only NOK 0.1 billion in net debt and with an ambition of maintaining its financial flexibility and upholding its investment-grade rating.”
Read the full press release here.
