MAC: Mines and Communities

Alcan (almost) out of Orissa

Published by MAC on 2007-04-13

Alcan (almost) out of Orissa

13th April 2007

The world's second biggest aluminium combine, Alcan, has pulled out of its Utkal bauxite/aluminium joint venture with the Indian company, Hindalco, in Orissa. While the huge Norwegian company, Norsk Hydro, did the same thing six years ago, it has never publicly acknowledged that this was because the project was unacceptable. At least Alcan seems to have gone one step further, letting it be known that the joint venture does not meet its criteria for "sustainability".

Nonetheless, as pointed out by the Canadian campaign group, Alcan't, the company still intends to profit by providing technology if Utkal still goes ahead.

Meanwhile, a new study from Montreal warns that subsidies granted to Alcan for the construction of a new smelter, could rob the province of Quebec of nearly three billion Canadian dollars.

Alcan pulling out of Utkal project in India

ANDY HOFFMAN, Toronto Globe & Mail

13th April 2007

Alcan Inc. is pulling out of a controversial project in India, suggesting plans for a bauxite mine and alumina refinery are too risky for the Montreal company, considering its lack of control over the venture.

The aluminum producer plans to sell its 45-per-cent stake in Utkal Alumina International Ltd., the Indian company set up in 1992 to develop the mine and refinery in the State of Orissa.

The Utkal project has been marred by conflict with local residents opposed to its construction, which would require the displacement of three villages and at least 200 families. Local critics have estimated that as many as 22,000 people could be affected.

“We have carefully weighed the opportunity and risk presented by the Utkal Project, and, given constraints within the governance structure that limit Alcan's ability to participate in key decisions, believe that we have acted in the best interests of all our stakeholders,” Jacynthe Côté, president and chief executive officer of Alcan Bauxite and Alumina, said in a statement.

Alcan's partner in the project, which is still in the engineering stage, is Hindalco, the industrial division of the Indian conglomerate Aditya Birla group. Hindalco launched a takeover bid worth $3.4-billion (U.S.) plus debt, earlier this year for Novelis Inc., a maker of rolled aluminum that Alcan spun off in 2005.

In the past, Alcan has said it would have to invest up to $600-million, in the

Utkal project if it were to proceed. In December, 2000, police in Kashipur opened fire on protesters opposed to the Utkal mine and smelter, killing three people.

Dick Evans, Alcan's president and CEO, was confronted by protesters at the company's annual general meeting in Montreal last year, shouting “Alcan out of Kashipur!”

A resolution calling on Alcan to sponsor an independent committee to asses the project's impact on the community was narrowly defeated. More than a third of shareholders voted in favour of the proposal.

In a note to clients, TD Newcrest analyst Greg Barnes said the Utkal project “does not fit with Alcan's approach to sustainability.”

Comment from ALCAN'T CANADA to its Canadian membership

12th April 2007

"...This result is truly a testament to the amazing grassroots work that you have all put in over the past several years. Every rally you attended, every letter that you wrote, every person you spoke to about Alcan’s hypocrisy has helped make this happen.

You spoke truth to power and truth prevailed

It would impossible to list all of the groups or individuals that should be recognized but I would like to acknowledge a few of the groups across Canada who helped make this happen: RRSE, CAW, Miningwatch Canada, Amnesty International, QPIRG, CKUT, Kairos and many more.

Most importantly it is only due to the strength, the resolve and the sacrifice of our brothers and sisters in India, the Kashipur people’s movement or the PSSP that anything has been accomplished. And for them the struggle continues as UAIL will move forward as will our solidarity.

" Our work is not over.

1) While Alcan has withdrawn its shares, according to its press release, it will still provide Alcan technology to UAIL and profit off of the destruction of the Kashipur region.

If as TD Newcrest analyst Greg Barnes says the Utkal project “does not fit with Alcan's approach to sustainability,” Alcan should not be involved with it in any way.

2) Several people’s lives have been ruined through jailings, beatings, displacement, and even death due to Alcan’s involvement. Alcan must compensate these people for their losses.

3) We must support the people of Kashipur in their continued struggle against UAIL and whatever companies may join India’s Hindalco in this conglomerate.

There is much work to be done we will follow up to discuss what our next moves will be but for a moment acknowledge what you have achieved."

Subsidies cut into Quebec's revenue, report says BERTRAND MAROTTE, Toronto Globe & Mail

13th April 2007

Quebec stands to miss out on $2.7-billion in revenue as a result of the generous subsidies it is providing to aluminum giant Alcan Inc. for the construction of a new smelter, a new study says.

The analysis, published yesterday by the Montreal Economic Institute, also warns that the Quebec government can no longer justify the continued sale of low-priced electricity to major industrial consumers. The province would do far better selling electricity at higher prices on the export market and using the revenue to generate more efficient economic spinoffs, such as enabling job creation by the private sector through tax cuts, says the study prepared by Université Laval economics professors Jean-Thomas Bernard and Gérard Bélanger.

The report warns Quebec would be making a big mistake if it were to extend similar subsidies to another aluminum giant, Alcoa Inc.

Pittsburgh-based Alcoa is seeking concessions from Quebec on two proposed projects.


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