TPT March 2007

From the AmericaS

According to the Mint, the metal value of a current-issue penny, made of copper-coated zinc, is more than one cent. The Mint places the commodity metal value of a pre-1982 penny – composed of 95 per cent copper and still accounting for a large percentage of those coins in circulation – at 2.13 cents. As to the five-cent piece, made of a copper-nickel blend, its metal value is now 7 cents. When manufacturing costs are factored in, every penny costs the Mint 1.73 cents to produce; every nickel, 8.74 cents. If even 1 per cent of the 150 billion pennies and 20 billion nickels in circulation were to be withdrawn from circulation, the replacement cost to the American taxpayer would be $43 million, the Mint estimates. The new ban also forbids the export of pennies or nickels in any significant quantity. The Mint’s purpose here is to block large-scale movement of the coins to countries where recycling them for the metal content could be economically feasible. Elsewhere in metals . . . › In another noteworthy Russian acquisition in the US (see ‘Oregon Steel-Evraz deal’ above ), Norilsk Nickel has entered into a definitive agreement to buy all of the nickel assets of OM Group (Cleveland, Ohio) for $408 million in cash. The transaction was expected to close in the first quarter of 2007. OM Group is a vertically integrated international producer and marketer of value- added, metal-based speciality chemicals and related materials, whose management concluded that its nickel business is a non-core asset.

In light of today’s historically high nickel prices, OM Group believes that its timing here is ideal. The company operates manufacturing facilities in the Americas, Europe, Asia, Africa, and Australia. Norilsk Nickel is Russia’s largest mining and metallurgical company and the world’s largest producer of nickel and palladium, as well as a major producer of platinum and copper. › Alcoa announced an investment of more than $6 million to expand core manufacturing capabilities at its Howmet Product and Services operation in Morristown, Tennessee. Completion is scheduled for midyear and full functioning by the end of the year. The installations will include a high-temperature tunnel kiln that will boost kiln capacity by some 10 per cent, new prebake ovens, and Tempcraft presses. Pittsburgh-based Alcoa, the world’s largest producer and manager of primary aluminium, said that expanded capability in producing alumina core bodies will enable it to better serve its aerospace customers, who are placing “unprecedented demands on [our] capacity.” In other news of Alcoa, on 4 January the company formally opened its aluminium brazing sheet plant in Kunshan City, China. A joint venture of Alcoa and Yencheng Engraving established in April 2006, Kunshan Aluminum Products Co Ltd produces heat exchanger materials for automotive and other industrial HVAC applications and complementary common alloy aluminium products. This is Alcoa’s third flat-rolled products facility in China. In full operation it will produce 50,000mtpy of aluminium brazing sheet primarily for the Asian automotive market.

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M arch /A pril 2007