Partners consider Alumar expansion

Brazilian aluminum maker Alumar could boost alumina output capacity by 1.3Mt/y, Ian Jacobson, chief operating officer with BHP Billiton's (NYSE: BHP) aluminum division, was reported as saying by Dow Jones news service. Jacobsen said BHP Billiton is working with joint-venture partner, Pittsburgh-based aluminum giant Alcoa (NYSE: AA), to boost capacity at the plant located in the northern Brazilian state of Maranhao. BHP Billiton hopes to increase alumina production capacity by around 50% to 9.4Mt annually by 2010, as the global miner responds to booming Chinese demand. "We think about 3Mt is within the capability of [Alumar], and as one of the partners we have the bauxite to support that kind of capacity," he said. One challenge to upping output is power supplies. But BHP Billiton may pursue "its own generation capacity" in the region with its partner, he said. The company said power generation investments would be targeted at complementing existing assets, rather than a strategic entry into the broader generation market. An electricity outage in July affected about 40% of the production at the Alumar smelter, which produces around 370,000t/y of primary aluminum. Alumar's alumina production, as well as its remaining aluminum production lines, continues to operate normally and full capacity is expected in March 2004. Alcoa owns 53.7% of the facility with the remainder in the hands of BHP Billiton.