RESTRICTED GENERAL AGREEMENT ONTBT/Notif.87.12024 August 1987 TARIFFS AND TRADE Special Distribution

Committee on Technical Barriers to Trade NOTIFICATION The following notification is being circulated in accordance with Article 10.4.

1. Party to Agreement notifying: CANADA

2. Agency responsible: Department of Transport

3. Notified under Article 2.5.2 X, 2.6.1 ,7.3.2 ,7.4.1 , Other:

4. Products covered (CCCN where applicable, otherwise national tariff heading): Dangerous goods

5. Title: Proposed Amendment to the Trarsportation of Dangerous Goods Regulations

6. Description of content: The current Part VT of the Transportation of Dangerous Goods Regulations is being amended to include safety standards for the manufacturing, testing, requalification and application of safety marks (specification marks and certification marks) for packaging, cylinders and tubes,

7. Objective and rationale: Public safety

8. Relevant documents: Canada Gazette, Part I, 8 August 1987, pages 2682-2692

9. Proposed dates of adoption and entry into force: Not stated

10. Final date for comments: 6 December 1987

11. Texts available from: National enquiry point X or address of other body:

87-1271 - i -

PROBLEMS OF TRADE IN CERTAIN NATURAL RESOURCE PRODUCTS Background Study on Aluminium and Aluminium Products

Any enquiries should be addressed to Mrs. Alena Sindelar, Development Division, GATT secretariat, who was responsible for this study.

Published by the General Agreement on Tariffs and Trade June 1987

87-1277 - iii -

Table of Contents Page INTRODUCTION 1

SUMMARY 2

SECTION I: MAIN FEATURES OF THE ALUMINIUM INDUSTRY 5 Properties of aluminium 5 World bauxite reserves 5 Processing 7 Bauxite processing 7 Alumina refining 7 Aluminium smelting 8 Re-cycling 9 Industrial applications of aluminium and alumina 11 Substitution 13 Structure of the industry 14 SECTION II: PRODUCTION, CONSUMPTION AND PRICES 21 Bauxite production 21 Alumina production 27 Primary aluminium production 29 Secondary aluminium production 31 World production of semi-manufactures and castings 32 Consumption of primary aluminium 32 Prices and stocks 43 Bauxite 45 Alumina 46 Aluminium 49 Stocks 50 Demand and supply elasticities 54 SECTION III: INTERNATIONAL TRADE 60 Trade in bauxite 60 Trade in alumina 64 Trade in aluminium metal 65 Direction of trade 70 - iv -

Page

SECTION IV: COMMERCIAL POLICY SITUATION 75 Tokyo Round negotiations: tariff assessment 75 Trade in aluminium and aluminium products under different tariff treatment and according to stages of processing 78 Developed countries 78 Individual developed-country profiles 80 Developing countries 110 Individual developing-country profiles 111 Tariff escalation and effective tariff protection 136 Non-tariff measures 137 SECTION V: ACTIVITIES IN OTHER INTERNATIONAL ORGANIZATIONS 150 The International Bauxite Association (IBA) 150 The Integrated Programme for Commodites in UNCTAD 151 The European Aluminium Association 151 The International Primary Aluminium Institute 151 Other Associations 152 OBSERVATIONS 153 Annex I: Summary of pre-Tokyo and post-Tokyo 155-169 Round tariff situation affecting aluminium and aluminium products

Annex II: The Harmonized System of Commodity 170-176 description and classification of aluminium and aluminium products - v -

List of Tables Page 1. WORLD ALUMINIUM RESERVES, 1985 ESTIMATES 6 2. WORLD PRODUCTION OF ALUMINIUM, 1960-1984 (IN THOUSANDS OF METRIC TONS) 23 3. WORLD PRODUCTION OF ALUMINIUM, 1960-1984 (AS A PERCENTAGE OF WORLD PRODUCTION) 24 4. ALUMINIUM SCRAP RECOVERY, 1960-1984 33 5. RELATIONSHIP OF ALUMINIUM RECOVERY AND TOTAL ALUMINIUM CONSUMPTION FOR SELECTED COUNTRIES, 1960-1984 34 6. WORLD PRODUCTION OF SEMI-MANUFACTURES AND CASTINGS, 1970-1984 35

7. WORLD CONSUMPTION OF PRIMARY ALUMINIUM, 1960-1984 38 8. WORLD CONSUMPTION OF PRIMARY ALUMINIUM BY USE, 1984 41 9. BAUXITE PRICES, 1950-1985 47 10. ALUMINIUM PRICES, 1950-1985 51

11. WORLD STOCKS OF PRIMARY ALUMINIUM, 1960-1985 53 12. BAUXITE/ALUMINIUM ELASTICITIES 55

13. TRENDS IN INCOME ELASTICITY 55 14. WORLD EXPORTS OF BAUXITE AND ALUMINA, 1960-1984 61 15. WORLD IMPORTS OF BAUXITE AND ALUMINA, 1960-1984 63 16. WORLD EXPORTS OF PRIMARY ALUMINIUM, 1960-1984 67 17. WORLD IMPORTS OF PRIMARY ALUMINIUM, 1960-1984 68-69 18. DIRECTION OF TRADE BY MAIN EXPORTERS OF BAUXITE, ALUMINA AND ALUMINIUM, 1984 71 19. DIRECTION OF TRADE BY MAIN IMPORTERS OF BAUXITE, ALUMINA AND ALUMINIUM, 1984 73 - vi -

Page 20. PRE-TOKYO ROUND AND POST-TOKYO ROUND TARIFFS IN NINE DEVELOPED-COUNTRY MARKETS 76 21. SUMMARY OF TRADE IN ALUMINIUM AND ALUMINIUM PRODUCTS UNDER DIFFERENT TARIFF TREATMENTS 79 22. AUSTRALIA 81 23. AUSTRIA 84 24. CANADA 86 25. EEC 88 26. FINLAND 91 27. HUNGARY 92 28. ICELAND 94 29. JAPAN 96 30. NEW ZEALAND 97 31. NORWAY 99 32. PORTUGAL 101 33. SOUTH AFRICA 103 34. SPAIN 104 35. SWEDEN 107 36. SWITZERLAND 108 37. UNITED STATES 109 38. ARGENTINA 112 39. BRAZIL 114 40. COLOMBIA 116 41. HONG KONG 117 42. INDIA 119 - vii -

Page 43. INDONESIA 120 44. ISRAEL 122

45. KOREA, REP. OF 124 46. MALAYSIA 125 47. MOROCCO 127 48. PHILIPPINES 128 49. SINGAPORE 130 50. THAILAND 131 51. TURKEY 133 52. YUGOSLAVIA 134 53. ALUMINIUM AND ALUMINIUM PRODUCTS M.F.N. TARIFF TREATMENT ACCORDING TO DIFFERENT STAGES OF PROCESSING IN THE FOLLOWING COUNTRIES: CAMEROON, CHILE, CZECHOSLOVAKIA, EGYPT, GHANA, JAMAICA, NIGERIA, PERU, POLAND, ROMANIA, TANZANIA, TUNISIA, URUGUAY, ZAIRE 135 54. NON-TARIFF MEASURES AFFECTING ALUMINIUM AND ALUMINIUM PRODUCTS 138-144 - viii -

List of Charts Page

CHART I: PRIMARY AND SECONDARY ALUMINIUM PRODUCTION FLOWS 10

CHART II: RAW MATERIALS AND PROCESSES REQUIRED TO PRODUCE ONE TON OF ALUMINIUM 12

CHART III: WORLD PRODUCTION OF BAUXITE, 1960 AND 1984 25

CHART IV: WORLD PRODUCTION OF ALUMINA, 1960 AND 1984 25

CHART V: WORLD PRODUCTION OF PRIMARY ALUMINIUM, 1960 AND 1984 25

CHART VI: WORLD CONSUMPTION OF PRIMARY ALUMINIUM BY COUNTRY, 1960 AND 1984 37

CHART VII: CONSUMPTION OF PRIMARY ALUMINIUM BY USE, 1984 37

CHART VIII: WORLD PRODUCTION AND CONSUMPTION OF ALUMINIUM, 1960-1984 44

CHART IX: BAUXITE PRICES, 1.950-1984 48

CHART X: ALUMINIUM PRICES, 1950-1984 52 - 1 -

INTRODUCTION The present study on aluminium forms a part of the series of factual background papers prepared by the GATT secretariat on non-ferrous metals. These studies were undertaken in accordance with the Decision taken by Ministers at the Thirty-Eighth Session of the CONTRACTING PARTIES in November 1982 in relation to Problems of Trade in Certain Natural Resource Products. The Decision called for the examination of problems relating to trade in certain natural resource products including in their semi- processed and processed forms, falling under the competence of the General Agreement relating to tariffs, non-tariff measures and other factors affecting trade with a view to recommending possible solutions. This study provides information on aluminium and aluminium products, covering the following CCCN positions: ex 26.01, ex 26.03, 28.20, ex 28.29, ex 28.30, ex 28.38, ex 28.47, ex 73.02, ex 85.23 and positions included in Chapter 76. Section I gives some background information on the salient features of the aluminium industry. Section II briefly reviews developments with regard to world aluminium production, consumption and prices since 1960. Section ITI presents information on trade flows in bauxite, alumina and aluminium. Section IV provides detailed information on trade flows on a tariff line basis, together with tariff treatment in developed-country markets as well as some developing countries. It also provides information on non-tariff measures affecting aluminium and aluminium products. Section V describes the activities in other international organizations related to aluminium. - 2 -

SUMMARY 1. The special properties of aluminium and its alloys, the relatively stable prices, together with a vigorous research and marketing effort by the major aluminium companies, enabled aluminium to replace many competing materials and encouraged its use across diverse industries. This resulted in the strong growth of aluminium production and consumption over the past several decades and aluminium has become the most widely used metal after iron and steel. 2. Most of the world's reserves of bauxite, the principal raw material for aluminium, are located in developing countries and Australia. First, bauxite is processed into alumina at refineries, and the latter product is converted into aluminium in electrolytic smelters. In addition, there are also smelters that process new and used aluminium scrap into secondary aluminium. Minor amounts of bauxite and alumina are consumed by the refractory, abrasive and chemical industries.

3. Though the structure of the aluminium industry has changed since the last decade, six transnational corporations - Alcoa, Alcan, Kaiser, Reynolds, Pechiney and Alusuisse - still have the leading position in the industry. They have been associated with many new projects because of their trade links, the proprietory technology, and their ability to provide for the large investment requirements and reap the economies of scale. However, the formation of independent companies integrating backwards and forwards, the desire on the part of developing countries to control their resources, and the increase in State ownership in the industry, have had important consequences for its structure. The energy crisis in 1973-74 and the subsequent increase in costs has been another factor contributing to this change. 4. Until 1950, the entire production cycle of aluminium remained concentrated principally in developed countries, near the major metal markets. As consumption increased, the aluminium industry searched for cheap sources of new supplies of bauxite. After Guyana and Suriname, new important producers appeared: Jamaica, in the early 1950s, Australia and Guinea in the 1960s and, recently, Brazil. At present bauxite production is largely concentated in Australia and in five developing countries, namely Guinea, Jamaica, Brazil, Suriname and Yugoslavia. These five together accounted for 39 per cent of world bauxite production in 1984. Australia is the world's largest producer and had a share of 35 per cent of bauxite production in the same year. Alhough alumina is still produced mainly in developed countries, rising transportation costs and policies of bauxite-producing countries to increase their participation in further processing have led to the tendency to locate alumina refineries close to bauxite mines. Thus, most of the new refinery capacity was developed in Australia which has become the leading alumina producer since the 1970s. - 3 -

5. Production of aluminium metal, semi-manufacturing and manufacturing is located mainly in developed countries. However, aluminium smelting has been undergoing significant changes. Primary aluminium production is highly energy intensive (with present technology, about 13,500 kWh of electricity is needed to produce one ton of aluminium). The availability of sufficient supplies of low-cost energy is one of the most important factors determining the location of smelters. Before the 1973 energy crisis, a large number of smelters were built in developed countries, which previously had access to relatively inexpensive oil, natural gas, coal or hydro-electric power. Some of these smelters leave been forced to close down due to rising energy costs and since their fuel sources have alternative markets. The largest reduction in aluminium smelting capacity was made by Japan. Some smelters in the United States, mainly those which depended on natural gas, also closed down. Meanwhile, some plants have their own sources of energy or possess long-term and/or preferential power rates contracts for the supply of power which permit them longer-term adjustment to changes in relative prices. The restructuring has resulted in developed countries losing some of their share in aluminium metal production. New smelters have been developed in regions with untapped energy sources which have little or no alternative uses, namely in Australia and several developing countries, among others, Venezuela, Brazl, Yugoslavia, Romaania and Indonesia. 6. Until 1980, world aluminium consumption grew faster than that of other major metals. The higher growth rate of aluminium was due to the substitution of aluminium for other materials in a wide range of end uses because of its favourable price levels as well as physical properties. The combination of several factors, including the saturation of traditional markets, the 1981-82 world economic recession, the rise in energy costs, increased competition from new products such as plastics, polymers and composites, increased recovery from secondary sources, and product downsizing and gauge reductions, led to the slowdown in the growth rate of world consumption of primary aluminium. Consumption of aluminium, as of other metals, has been concentrated in developed countries, which accounted for 67 per cent of world consumption in 1984. However, the share of developing countries, while still small, has increased substantially since the 1960s. The end uses of aluminium are concentrated in six industrial sectors - transportation, building and construction, mechanical and electrical engineering, packaging and containers, domestic and office appliances and metal industries. 7. After 1973, higher energy and capital costs together with higher bauxite taxes led to a substantial rise in aluminium prices. Presently, aluminium competes increasingly on the basis of the metal's properties rather than on its price. As most of bauxite and alumina are intra-company transfers, there are no price quotations for bauxite and alumina. Until recently, producer prices have been the prevailing pricing - 4 -

system for aluminium. The LME trading of aluminium ingot introduced at the end of 1978 has become increasingly important in terms of both sales volumes and as a reference for international aluminium pricing. 8. Changes in the pattern of aluminium production and consumption, as a result of factors such as increased processing of bauxite in the producing countries, higher energy costs and changes in comparative advantages, structural adjustment and changes in commercial policy, have led to the changes in the pattern of international trade. Trade patterns are also influenced by intra-company movements as the aluminium industry is highly integrated. Thus, world exports of bauxite grew at a lower rate than that of alumina. The high growth rate in trade of alumina was also influenced by the establishment of alumina refineries close to bauxite mines in order to reduce freight and other costs. During the 1970s, new exporters of bauxite, namely Guinea, Australia and Brazil, emerged and overtook the traditional bauxite exporters of the Caribbean. Australia has also become the world's largest alumina exporter. Most of the bauxite and alumina exports are destined to developed countries amongst which the United States is the major importer. However, the increase in the number of non-integrated smelters in developing countries have led to an increase in their alumina imports and in their share in world alumina imports. Like alumina, world exports of aluminium metal grew significantly and represented 37 per cent of world alaminium metal production in 1984 compared to 25 per cent in 1960. Though developed countries have remained the major exporters of aluminium metal, their share in world exports was reduced with the entry of aluminium metal exporting developing countries, namely Venezuela, Brazil, United Arab Emirates, Yugoslavia, Indonesia, Romania, Cameroon, Egypt and Argentina. Among developed countries, Canada and Norway are the two largest exporters of aluminium metal in the world and Australia, Spain, New Zealand and Iceland have established themselves as major aluminium metal exporters in the last ten years. Developed countries are also the dominant importers of aluminium metal. The structural adjustment of the Japanese aluminium industry has resulted in a rapid increase of its aluminium metal imports, making Japan the world's largest aluminium metal importer. - 5 -

SECTION I

MAIN FEATURES OF THE ALUMINIUM INDUSTRY

Properties of aluminium1 9. Aluminium is the third most abundant element in the earth's crust after oxygen and, silicon. The metal has been in commercial production for just 100 years. Aluminium weighs about one-third as much as copper and steel, is malleable, ductile and easily machined and cast. It has excellent corrosion resistance, high thermal and electrical conductivity and a silvery appearance. It is a versatile metal with many uses, and is only exceeded by iron in terms of the volume of world consumption. Aluminium can be alloyed with many other materials, which, after treatment, have strengths approaching that of mild steel. 10. On account of its high chemical re-activity, aluminium, unlike many other metals, does not occur in the metallic form in nature, but is a common constituent of many minerals, where it is normally present in combination with silicon, oxygen, hydroxyl groups, iron, titanium, calcium and to a lesser extent, with fluorine, phosphorus and boron. The bauxite ores, containing the minerals gibbsite, boehmite and/or diaspore, which are currently the main sources of aluminium, account for only a small part of the aluminium present in the world. Other potential sources of aluminium are igneous rocks, sedimentary rocks and metamorphic and metasomatized rocks. World bauxite reserves

11. The principal ore of aluminium is a mixture of hydrous aluminium oxides called bauxite which may occur as a massive hard rock, loose pisolites, or soft clay. Karstic (associated with limestones) and lateritic (usually with aluminosilicate rocks) bauxites are found in most countries, with the major resources located in tropical regions. In 19854 world bauxite reserves were estimated at about 21 billion tons (Table 1), almost 72 per cent of these reserves are in developing countries. About 52 per cent are located in the following four developing countries: Guinea (26.7 per cent), Brazil (10.7 per cent), Jamaica (9.5 per cent), and India (4.8 per cent). Developed countries account for about one-fourth of bauxite reserves. Australia has the world's second largest reserves of bauxite, with over 21 per cent of total world reserves. - 6 - TABLE I

WORLD ALUMINIUM RESERVES, JANUARY 1985

Million Metric Tons % of Country of Bauxite Total

World total 21,0001 100.0 Developing countries, of which: 15,084 72.0 Brazil 2,250 10.7 Cameroon 680 3.3 Dominican Republic 30 0.1 Ghana 450 2.2 Guinea 5,600 26.7 Guyana 700 3.3 Haiti 10 0.1 India 1,000 4.8 Indonesia 750 3.6 Jamaica 2,000 9.5 Malaysia 15 0.1 Mozambique 2 0.0 Pakistan 20 0.1 Romania 50 0.2 Sierre Leone 140 0.7 Suriname 575 2.7 Turkey 25 0.1 Venezuela 235 1.1 Yugoslavia 350 1.7 Zimbabwe 2 0.0 Other 200 1.0 eveloped countries, of which: 5,120 24.4 Australia 4,440 21.2 EEC , of which: France 30 0.1 Germany, Fed. Rep. of 2 0.0 Greece 600 2.9 Italy 5 0.0 Spain 5 0.0 United States 38 0.2 Centrally-planned economies, of which: 750 3.6 China, P.R. 150 0.7 Hungary 300 1.4 USSR 300 1.4

1Data do not add due to independent rounding. 2According to the EEC sources, aluminium reserves of the EEC are estimated at 1,040 million tons (1,000 million tons in Greece, 20 million tons in France and 20 million tons ir Italy). 3Throughout the study, Spain and Portugal are not yet included within the EEC.

Source: United States Bureau of Mines, Department of the Interior: A Chapter from Mineral Facts and Problems, 1985 Edition - 7 -

Processing

Bauxite processing 12. About 90 per cent of all bauxite supplies are mined by open-pit methods. In France, Greece, Turkey and Hungary, bauxite is also produced in underground mines. Bauxite mining consists of three stages: extraction, crushing and drying; some bauxite ores also require beneficiation (to reduce silica content). Most bauxites require crushing to ease further processing. Caribbean bauxite is so fine that it needs no crushing. Drying may be done at the mine site or at the refinery. If the bauxite is to be shipped great distances, it is usually dried at the mine in order to reduce transport costs. If the alumina plant is near the mine, the bauxite is either processed in crude form without drying, or is dried at the plant where the use of heat recovered from the refining process can cut drying costs by about 50 per cent. Alumina refining

13. In regard to bauxite processing at alumina refineries, the most important classification distinguishes bauxites according to the aluminium oxyhydroxide minerals present, Which influence mainly the temperature and pressure required for refining: (a) trihydrate gibbsite type, Al203.3H20, as the main mineral with monohydrate boehmite content of less than 3 per cent; (b) monohydrate boehmite type, Al 0 H 0, including low amounts of monohydrate diaspore, A1203.H26; (c) mixed types, which contain gibbsite as the predominant aluminum mineral but with a boehmite content over 5 per cent of the aluminium ore; (d) inonohydrate mixed bauxite, where boehmite is the predominant aluminium mineral but the diaspore content exceeds 5 per cent. Of these types of bauxite, the trihydrate is the least costly to process, due to lower temperature and pressure requirements, and monohydrates the most costly; the processing costs for mixed tri-monohydrates are somewhere in between. Among the monohydrates, diaspore is the most difficult to treat.

14. Among other factors affecting refining costs is the bauxite to alumina ratio and the amount of impurities present in the ore. This ratio - 8 -

refers to the amount of bauxite necessary to produce one ton of alumina, and ranges from 2:1 to 3.4:1.

15. Bauxite is refined into alumina (pure aluminium oxide - Al 2O3) almost exclusively by the Bayer process, which was patented in 1888. there exist other technologies for obtaining alumina from non-bauxite sources, but processing costs in these cases are significantly higher. Bayer alumina plants consist of two facilities operating in series: a hydrate plant and a calcination plant. The hydrate plant transforms bauxite into alumina hydrate in a process involving four operations:

(1) grinding and scurrying, where dried bauxite is mixed with a hot caustic solution to form a slurry; (2) the bauxite is digested at high temperatures and pressures into soluble Sodium aluminate and insoluble sodium aluminium silicates; (3) filtration arid settling of the insoluble impurities (called red mud) separates them from the sodium aluminate solution which, in turn, is pumped into precipitators; (4) there, the sodium aluminate is seeded with aluminium hydrate crystals, causing about 50 per cent to 60 per cent of the aluminium hydrate to dissociate from the soda and precipitate out as crystals. The mixture is pumped to at least three stages of thickeners which separate the crystal from the caustic solution. The coarsest product is sent to the calcination department.

In the calcination plant, moisture and the chemically-bonded hydroxide are removed by roasting the alumina hydrate at 1,1500C to 1,2500C. The resulting calcined alumina (Al2O3) is then cooled in a fluid bed and stockpiled until shipped to aluminium smelters. Aluminium smelting

16. Primary aluminium metal is produced by the Hall-Heroult process which consists of the electrolysis of alumina to separate aluminium from oxygen. Two types of reduction plants are currently in use: the prebaked anode plants and the Soderberg anode plants. Electricity is a major input in smelting, and as a result of rising energy costs, other technologies are being developed in order to reduce energy consumption. However, none of the new processes are used commercially. 17. An aluminium reduction plant consists of electrolytic cells arranged in series (known as potlines), holding furnaces for the molten aluminium, - 9 -

and casting machines for the production of ingots of different shapes. The cells consist of a steel shell lined with carbon which serves as the cathode. Carbon anodes are suspended in the cell above the cathode. There exist two systems of anodes: the Soderberg anode and the prebaked anode systems.

18. In the electrolytic process, alumina dissolved in cryolite is reduced by electrolysis, at about 9600C-9750, to aluminium which is deposited at the cathode in the form of a molten metal layer underneath the cryolite, while oxygen combines with carbon at the anode forming a mixture of carbon dioxide and carbon monoxide. The metallic aluminium is periodically tapped off and transported to the holding furnaces where it is combined with other batches and alloys before being fed to the casting machines. Currently, with environmental concerns a major issue, special attention must be paid to pollution problems at aluminium smelters. Significant expenditures are required to control the fluorides emitted from the cell bath as well as alumina dust. The use of Soderberg type anodes is being discontinued as they generate more fluoride compounds and tarry components.

19. Aluminium ingots of various shapes are shipped from the smelter to semi-fabricating plants for further processing for a wide range of industries. Commercially-pure aluminium is normally cast with a minimum aluminium content of 99.5 per cent or 99.7 per cert. Super-pure aluminium of 99.99+ per cent is electro-refined from commercial aluminium in special cells. The hardness, toughness, etc. of aluminium can be substantially increased by alloying with other elements such as copper, magnesium, silicon, zinc or manganese. Some of these alloys may be improved by age-hardening treatments. These processes may be followed by tempering. Most of these alloys may also contain small quantities of iron, nickel, chromium, etc. They are often marketed under trade names which vary according to the country of origin. Recycling 20. The production and consumption of aluminium metal generates a feedback of aluminium base scrap to the production cycle. About 90 per cent of new scrap is returned to the production cycle almost immediately after it is generated. However, the recycle time for old scrap may range from a few months up to thirty years. It is estimated that about 25 per cent to 30 per cent of the world aluminium supply comes from recycled scrap. Of the latter about 60 per cent of the recycled 2aluminium is purchased new scrap and 40 per cent is purchased old scrap. The amount of home or runaround scrap is unknown. For illustration, Chart I shows - 10 - Chart I PRIMARY AND SECONDARY ALUMINIUM PRODUCTION FLOWS

Scrap

Source: GATT,based on World Bank, Economic Analysis and Projections Department, Commodities and Export Projections Division, February 1981 - 11 -

the primary and secondary aluminium production flows, and Chart II shows the raw materials and processes required to produce one ton of aluminium ingot. 21. The recycling of aluminium is becoming increasingly important in the world aluminium industries as the cost of energy increases. Producing aluminium from recycled metal requires about 5 per cent as much energy as making it from bauxite ore. For producing countries with higher energy costs, recycling and secondary recovery of old scrap have reached rates as high as 50 per cent of the metal supply.

22. Old scrap has become an increasingly important source of secondary metal in most developed countries where large secondary aluminium industries have been developed. Much of the die and sand casting products are produced from secondary alloys melted and blended by secondary smelters. Old scrap, most of which is purchased, consists of discarded automobile parts, aircraft, building and household furnishings, electric wire and cable and food and beverage containers. In the United States, the recovery of used beverage containers (UBC) is the largest source of old scrap, a result of the extensive reclamation programmes organized and operated by major primary producers and can and beverage manufacturers. Many other developed countries have similar programmes. Given the present technology and industry practices, about 20 per cent to 25 per cent of the aluminium currently being put into use in manufactured end products is expected to be recovered as old scrap in the next several decades. Industrial applications of aluminium and alumina 23. The special properties of aluminium and its alloys favour their wide applications. Aluminium and its alloys are used in the aircraft, automobile and shipbuilding industries, in the construction of railroad rolling stock, in the building and construction industry, and in the electrical industry (e.g. as cables). Aluminium and its alloys are also largely used for all types of containers (vats, drums, food and beverage cans and reservoirs), for household appliances and cooking utensils, sanitary and toilet articles, for residential siding, screens and doors, in heating and air conditioning, washing machines and refrigerators, in agricultural equipment and machinery, scaffolding and ladders, and in the manufacture of aluminium chemicals, flares and pyrotechnics. Aluminium can also be used as a trim for appliances, automobiles and homes. Aluminium foil is increasingly used in the packaging industry, for thermal insulation and for artificial silvering. Aluminium powders are used for compacting and sintering into bearings, bushings and. many other technical components, as well as in the manufacture of special cements, and chemical and metallurgical reagents, etc. The flakes are used in the manufacture - 12 -

CHART II

RAW MATERIALS AND PROCESSES REQUIRED TO PRODUCE ONE TON OF ALUMINIUM INGOT

Bauxite 4-6 tonnes Fuel Oil .45 tonnes Caustic Soda .08 tonnes

Alumina 2 tonnes Alumina Plant

Alumina Pet. Coke Pitch Calcieid Trihydrate Sulphur Fluorspar .55tonnes .11 tonnes Coal Pitch Tar

Aluminium Cryolite Carbon .60 tonnes Furnace Lining Fluoride .04t. .03 tonnes (Anodes) (Cathodes)

Aluminium Smelter Power 13400-15600 kWh/ton Aluminiurn 1ton

Source: GATT, based on Raw Materials Report, Vol. 2, No. 1 - 13 -

of paints and pigments. Aluminium powders and flakes are also used in pyrotechnics, as heat generators and to protect other metals from corrosion.

24. About 10 per cent of the alumina produced from bauxite is used for non-metallic purposes. As an abrasive, alumina is coated into abrasive papers and cloths, pressed into grinding wheels and sharpening stones and ground and sized into grinding and polishing powders. As refractory material, alumina is used to make glass and porcelain products, dishware, high-temperature ceramic products, and refractory and insulating bricks for lining blast furnaces and ovens. As a chemical.. alumina is used to produce fluxes and a flame retardant in carpeting, plastics and composite wall boards. Activated alumina is a highly porous absorbent material used as a dehydrate for liquids and gases. Other aluminium chemical compounds include: aluminium fluoride used as a flux in preparing ceramics; aluminium chloride for preserving wood, pickling wool and in the dyeing industry; aluminium sulphate for dyeing, papermaking, tanning hides, and purifying water; and alums, a combination of aluminium sulphate and another metal sulphate for dyeing and tanning. Substitution 25. The relatively low costs of aluminium and its varied physical properties, together with a vigorous research and marketing effort by the major aluminium companies, has enabled aluminium to penetrate many industries and replace other materials. The strong growth of aluminium markets over the past several decades has been largely at the expense of other materials. Aluminium's high strength-to-weight ratio has encouraged its use in the aircraft and aerospace industry instead of steel. Aluminium has also replaced steel in the automobile industry in order to reduce weight and consumption of fuels, and has replaced copper for high-voltage transmission of electric power. Aluminium has gained a significant portion of the metal can market and packaging Industry and has penetrated the markets of both steel and wood in residential and industrial construction. It has also taken part of the former markets for zinc-base diecasting and chromiuin-plated steel in the automotive industry. However, the increase in the cost of energy for both the refining and reduction steps has eroded aluminium's advantage. Energy costs will also be an important determinant of its future competitiveness. The major competitors for aluminium are steel, copper, zinc, tin, magnesium, titanium, glass, plastics, wood and recently, epoxy-resins and epoxy- graphite. If weight is not a factor, steel could be substituted for most construction products. Tinplate, paper and plastics could replace aluminium for packaging materials. Magnesium is being used to replace steel and aluminium in automobiles for housings and motor and power - 14 -

casings. Plastics and vinyl chlorides (PVC) are replacing metals in consumer appliance parts and in residential siding and window casings. Copper, a superior electric and heat conductor, could replace the aluminium content in power cables and air-conditioner tubing. Graphite- epoxy materials are replacing some of the flight surfaces of aircraft because of their lightweight, high strength and low reflectivity to radar. Structure of the industry 26. Although there has been some diversification in ownership during the past twenty-five years, a large share of the world aluminium industry is still controlled by six international corporations: Alcan Aluminum Ltd., Aluminum Company of America (Alcoa), Reynolds Metals Company, Kaiser Aluminum & Chemical Corp., Pechiney (formerly Pechiney-Ugine-Kuhlniann Group - PUK), and Swiss Aluminium Ltd. (Alusuisse). These corporations are involved in all the stages of aluminium processing. At present, about 34 per cent of the world bauxite mining capacity, about 55 per cent of the world alumina production capacity and aboat 40 per cent of the world aluminium production capacity is owned by these six corporate groups, their subsidiaries, or affiliates. All of these corporations are principally concerned with aluminium, but Pechiney, Alusuisse and Kaiser also have significant interests in other metals and chemical industries. However, in recent years, Alcan, Alcoa and Reynolds have also started to diversify (Alcan into space technology, packaging, automotives, communications and electronics; Alcoa into fibre optics, automotive components and computer discs; Reynolds into plastics, vinyls and polymers and electronics). One or more of these firms are involved in virtually all of the major aluminium projects of international significance in the world. They are also involved in activities such as ocean shipping, trading, engineering services and construction. They play a significant role as suppliers of technology and technical know-how and operational expertise. 27. In addition to the "Big Six", all of which have their headquarters in developed countries, there are about fifty other firms whose aluminium operations are more restricted in scope, but which account for about 26 per cent of bauxite, 12 per cent of alumina, and 25 per cent of metal production capacity. These producers are usually non-integrated and some are associated with the "Big Six" or with governments. The governments of market-economy countries control about one-quarter of bauxite, about 17 per cent of alumina and about 20 per cent of aluminium production capacities. The centrally-planned economies control about 12 per cent of world bauxite production capacity, 18 per cent of alumina refining capacity and 20 per cent of metal production capacity. - 15 -

28. In the past decades, the structure of the aluminium industry has been changing. Although established transnational integrated corporations still have the leading position in the world aluminium industry, they have been losing14 their share of the industry to other transnationt corporations and to nationalized industries controlled by governments. The structural change has been the result of the formation of independent companies integrating backwards and forwards as well as the desire on the part of developing countries to control their own resources. As will be explained later, the energy crisis of 1973-74 and the cost of energy have also been contributing factors in changing the industry structure. 29. Bauxite production capacity is largely concentrated in the developing countries of the Caribbean, Latin America and Africa, and in Australia. Until the early 1970s, over one-third of the capacity was in the Caribbean countries (the Dominican Republic, Guyana, Haiti, Jamaica and Suriname). However, the discovery of new deposits in Brazil, Guinea and Australia changed the concentration of mining from the Caribbean to otlgr areas as producer companies sought countries with low taxes and levies and areas of political stability. The location of bauxite mining currently depends on the natural occurrences of good quality bauxite and the economic viability of mining the ore. In addition, commercial viability depends on factors such as the infrastructural costs of opening new mines in remote areas, transportation costs to refineries, the level of levies and taxes, the attitudes of the host government, and political, stability. 30. The construction of alumina plants is highly capital intensive. In the past, alumina plants were located close to ports or cities where associated infrastructures were usually in place and skilled labour and facilities for workers were readily available. Plants were generally located close to aluminium smelters and in major aluminium producing and consuming countries. Rising transportation costs and producing-country policies to increase their participation in processing have led to a tendency to locate alumina refineries close to bauxite mines. This had led to an overall shift in alumina refining from North America, Japan and Europe towards the bauxite producing countries. Most of the new refining capacity was developed in Australia. Australia has overtaken the United States to become the leading 0 producer 1 alumina. New plants hpye also been constructed in Ireland , Spain , Brazil and Venezuela . The development of alumina refineries in remote locations is subject to the same infrastructure problems as described earlier in the case of bauxite production. However, the advantage of remote areas is the availability of space for red mud wastes, which is a growing environmental problem in populated areas. Most alumina facilities are part of the transnational corporation structure. The degree of foreign ownership is high in most of the major producer countries. Other than the centrally-planned economies, - 16 -

the only countries where alumina refineries are owned by domestic private enterprises are the United States, Canada, France and Venezuela, three of which are the home countries of five of the Big Six, and Guyana which bought bauxite/alumina facilities from Alcan in 1971, and bauxite operations from Reynolds in 1974. In Japan, domestic companies control the industry except for Alcan's 50 per cent interest in Nippon Light Metal. Facilities in Australia, Jamaica and Suriname, the major sporting countries, are characterized by high levels of foreign ownership. 31. From the beginning, the developed countries have dominated the production of aluminium metal and the manufacturing of finished aluminium products. However, in the past several years, aluminium smelting has been undergoing significant changes. As mentioned before, the production of aluminium metal is highly energy-intensive, and energy constitutes between 25 per cent and 40 per cent of costs. In the past, aluminium companies prefered to locate smelters near their major markets, that is, the United States, Europe and Japan. Since the late 1970s these countries have lost some of their share in metal production as the industry9 has shifted to areas with lower-cost and more abundant power sources. As a result, major developments have taken place in Australia, Venezuela, Brazil, Malaysia and Indonesia. Australia has advantages over developing countries as it has already developed much of the supportive infrastructure, including power supplies, Most new smelters are built by consortia of several companies and governments because of large capital requirements. The "Big Six" are frequently large investors in these consortium-type smelters. 32. Most companies produce predominantly for their own fabrication needs, either in their domestic plants or in subsidiaries or related companies abroad. The aluminium produced by the "Big Six" is mostly not traded out2dde their networks but is fed into their fabricating facilities. Also, other smelters in developed countries have usually associated fabricating capacity for most of their aluminium output. This situation also applies to certain independent smelters in developing countries (for example, Hindalco, Nalco, Venalum, Koralu, Alumar) as well as to smelters situated in the centrally-planned economies. The foreign ownership patt ns in aluminium smelting are not as clear-cut as at the alumina stage. Most smelters in developing countries are joint ventures between the developing country's private or government interests and international companies or producers outside the country (such as Alucam in Cameroon, Alcominas and Albras in Brazil, Aluminio Mexico in Mexico, Alcasa ard Venalum in Venezuela, Alba in Bahrain, Dubal in Dubai, Indalco and Balco in India, Koralu in Rep. of Korea), or they are wholly-owned by foreign companies (for instance, Valco in Ghana, Alcan Brazil in Brazil, or Suralco in Suriname). Smelters orned by private nationals or - 17 -

governments are usually small in size (Egyptalum in Egypt, Balco and Hindalco in India, Iralco in Iran, CBA in Brazil). The manufacturing of finished aluminium products has largely remained in developed countries with a few exceptions in the case of more advanced developing countries which started fabrication as they became larger consumers of aluminium products.

'Physical properties of aluminium: Symbol: Al (Aluminium) Density at 200C (680F): 2.699 Atomic number: 13 Atomic -weight: 26.98154 Melting point: 660.2O Boiling point: 2,477 - 50 C 1 -1 Electrical conductivity: m ohm cm : 0.382 2Though aluminium is the most common non-ferrous metal in the earth's crust, it was isolated only in 1825, by Hans Christian Oersted. In 1809, Sir Humphrey Davy proved that clay (aluminium silicate) had a metallic base. Davy suggested the name aluminum for this metal, L name which has been retained in North America but modified to aluminium in most other countries. Hans Christian Oersted was the first to produce the metal (in 1825). In 1827, Friedrich Woehler described the production of aluminium as a powder and in 1845, he was able to make slightly larger amounts of the metal and determine some of its physical properties. Aluminium was introduced to the public in 1855 at the World Exhibition in Paris as a primary metal produced on a laboratory scale. It was not until 1886, after the modern electrolytic method of producing aluminium was discovered almost simultaneously by Charles Martin Hall in the United States and Paul L.T. Heroult in France, that it became a metal of industrial importance. 3Resources as distinct from reserves are defined as total known deposits regardless of whether or not they can be mined at a profit under current economic conditions. Reserves are the proportion of identified resources that are economic to extract given current prices and costs. Large fluctuations in costs and prices, especially the latter, which occur over relatively short periods, may lead to large fluctuations in the level of reserves, particularly for those countries with large marginal deposits. Source: The United States Bureau of Mines and the United States Geological Survey Resource and Reserve Classification for Minerals 4Unless otherwise specified, the quantities are in metric tons. 5The description of bauxite types by the International Bauxite Association. - 18 -

6In 1886, Charles Hall in the United States and Paul Heroult in France simultaneously discovered the electrolytic process for making aluminium metal. This Hall-Heroult process and the Bayer alumina-refining process, both basically unchanged today, were the foundations of the present aluminium industry. The Soderberg system requires less labour and, except for moving the steel conductor pins, is a continuous method of feeding anode carbon. The prebaked system results in better electrical efficiency in the reduction cell, but requires anode fabricating and rodding facilities not used in the Soderberg system. The prebaked system permits efficient collection of the cell offgases for subsequent treatment to remove fluorine; the offgases from Soderberg cells are difficult to collect, necessitating fluorine recovery from a larger volume of gas than that required in prebaked systems. Source: Aluminium, Mineral Facts and Problems, United States Bureau of Mines 8A double fluoride of sodium and aluminium. 9Worldwide Investment Analysis: The Case of Aluminium, World Bank Staff Working Paper. '0The principal aluminium alloys are: (a) aluminium-copper alloys; (b) aluminium-silicon alloys (e.g "alpax", "silumin", etc.); (c) aluminium-manganese-magnesium alloys; (d) aluminium-magnesium-silicon alloys (e.g. "almalec", "aldreg", etc.); (e) aluminium-copper-magnesium-manganese alloys (e.g. "duralumin"); (f) aluminium-magnesium alloys (e.g. "magnalium") (g) aluminium-manganese alloys. Aluminium base scrap is classified as new or old. New scrap is generated in the production of primary aluminium, semi-fabricated mill production and finished industrial and consumer products. It includes new casting scrap, clippings or cuttings of new sheet, rod, wire, cable, borings and turnings and residues, spillage, sweepings, dresses and skimmings. It is further defined as "runaround or home" scrap and purchased scrap. Home scrap is recycled by the same company that generates it and is never marketed as scrap. Purchased scrap is bought, imported or treated on toll by secondary smelters, primary producers and others. Old scrap, considered as purchased, comes from discarded, used, worn out and obsolete products. 12William V. Chandler, Materials Recycling: The Virtue of Necessity. Worldwatch Paper 56. Worldwatch Institute, Washingtom D.C., October 1983. - 19 -

'3In 1983, an estimated 56 billion aluminium beverage cans were used in the United States, which is equivalent to about 1.2 million tons of aluminium. About 574,000 tons of these cans were collected and recycled. 14Other transnatiortal corporations, most of which are mining, metallurgical, chemical or oil companies, include Comalco Ltd. of Australia, Sumitomo Ltd. of Japan, Billiton of Netherlands, Alumax Inc. of the United States, Noranda Mines Inc. -,f Canada and Hydro Aluminium of Norway. Source: Transnational corporations in the bauxite/aluminium industry, UN New York 15Aluminium companies owned and controlled by governments, excluding centrally-planned economy countries, include Vereinigte Aluminium Werke (V.A.W.) A.G. of Germany, Aluminia S.P.A. of Italy, Aluminium Company of Egypt of Egypt, Alusaf Pty. Ltd. of the Republic of South Africa, Bharat Aluminium Co. (BALCO) of India, A.S. Ardel Og Sunndal Verk of Norway (now a part of Hydro Aluminium) and Empresa Nacional Del Aluminio S.A. of Spain. Pechiney of France, one of the six large companies nationalized in 1982 is foreseen for denationalization. 16In 1971A and 1975, Jamaica, followed by the Dominican Republic, Haiti, Suriname, Guyana, Sierra Leone, Guinea and Indonesia introduced new tax systems on bauxite as a means of increasing government revenues. Jamaica imposed a J$0.50 royalty per long dry ton on all mined bauxite and a production levy on bauxite equivalent to 7.5 per cent of the average realized price of primary aluminium. This action raised the 1974 price of bauxite to the United States from US$12 per metric ton to about US$23.20 per ton. Other Caribbean countries raised taxes in a similar manner. Guinea introduced a variant tax linked to the aluminium ingot price and to the quality of the ore. Though at present the Caribbean countries have gradually abolished these taxes on the basis of market developments, Guinea still applies an export tax. 17However, these are not located close to bauxite mines but designed to use a range of bauxites imported by sea from mines elsewhere. 18Structural changes in the world aluminium industry; Raw Materials Report Vol. 2. No. 1. 19Prior to the 1970s, smelters serving the American market were located either in Canada, the northwest region of the United States, using hydro-energy and coal, and in the Texas-Arkansas-South Carolina area, using electricity mainly from natural gas. Since the late 1970s, the United States smelters have been suffering chronic shortages of electricity supply as many consumers, previously using oil, have been switching Lo electricity. Some United States smelters have closed permanently and others have been forced to temporarily close potlines. All plans for new smelters in the United States have been cancelled. In - 20 -

contrast, much of the Canadian smelting industry is based on company-owned hydro-electric facilities, and has remained cost-competitive, allowing its capacity to be significantly expanded. The situation has been much more difficult for Japan, as its electricity industry has relied heavily on oil as a fuel source and has been badly hurt by the increases in prices. After some early attempts to protect local producers from the increasing flow of cheaper aluminium imports, the Government has embarked on a programme of industrial restructuring, involving not only the cancellation of all expansion plans but also the scrapping of a substantial proportion of existing capacity. European aluminium smelting is based on a variety of fuel sources and in most cases on imported bauxite or alumina and high cost supplies of energy. The smelting industry has consequently been characterized by sluggish growth, small-scale plants, a high degree of government financial intervention and, in those areas reliant on oil fuels, escalating costs. The only areas of expansion have been Norway, and until recently, Spain. Source! Structural changes in the world aluminium industry. The implications for Australia, by Ann Hodgkinson, Raw Materials Report, Vol. 2, No. 1 20Out of

SECTION II

PRODUCTION, CONSUMPTION AND PRICES

33. Until the early 1970s, the world aluminium industry was characterized by "a rapid and relatively stable growth in demand for ingot; a relatively flat industry supply curve, a concentration of production in major developed countries; and a highly concentrated and vertically integrated industrial structure and relative stability in the market for aluminium ingots. Since the energy crisis of 1973, there have been major changes to these structural fundamentals: - reduced economic growth and progressive saturation of aluminium's major markets have resulted in reduced rates of growth in demand for aluminium; the supply curve of primary aluminium industry has become progressively steeper mainly as a result of increases in energy costs following the crises of 1973 and 1978-79;

- there has been a major relocation of smelting capacity away from major industrialized countries to areas where energy costs are low and local or regional markets exist;

- the level of concentration in the industry has been reduced and there has been a simultaneous increase in the level of government participation and influence;

- there has been an increase in the number of non-integrated producers and a corresponding increase in the amount of "untied" aluminium finding its way on to terminal markets;

- the producer price system has become increasingly irrelevant as a basis for pricing ingot with the LME assuming increasing importance;

- there has been an increase in the overall volatility of the market as exemplified by the gyrations in LME prices" Bauxite production 34. Production and demand for bauxite and alumina are directly influenced by production and d demand for aluminium. The production of bauxite for non-metallurgic uses is estimated at 10 per cent to 11 per cent of world bauxite production while about 9 per cent of world alumina production is - 22 -

directed to non-metallurgic uses. Tables 2 and 3 indicate that in 1984 about 48 per cent of world bauxite output or 92.5 million tons was produced in developing countries. Three developing countries, Guinea (15.9 per cent), Jamaica (9.4 per cent) and Brazil (6.8 per cent) accounted for about one-third of world production. Other developing countries with a substantial production of bauxite were Yugoslavia (3.6 per cent), Suriname (3.6 per cent), Guyana (2.7 per cent) and India (2.2 per cent), while nine others accounted for an additional 3.7 per cent. In 1984, Australia, the world's major producer, accounted for 35 per cent of world production. Its output of 32.2 million tons represented 87 per cent of the production of developed countries. The remaining 13 per cent was mined in two EEC countries, France and GreecS (4.1 per cent and 6.4 per cent respectively), and the United States (2.3 per cent). Centrally-planned economies were estimated to have produced about 12 per cent of the 1984 world output, with the USSR accounting for 6.7 per cent. Other bauxite-producing countries were Hungary and the People's Republic of China. World bauxite production in 1960 and 1984 are compared in Chart III.

35. Bauxite production grew steadily from 27.6 million tons in 1960 to 84.1 million tons in 1974 at an annual average growth rate of 8.3 per cent. Production dropped 9 per cent in 1975, the aftermath of the 1973-75 economic recession and the large increase in prices after the introduction of levies and taxes by many exporting countries. Between 1976 and 1980 bauxite production increased again as demand for aluminiumi metal continued its upward climb and achieved the historically highest level of almost 93 million tons in 1980. However, the annual growth rate in this period dropped to only 3.3 per cent. The over-production of bauxite as well as the fall i-.. demand for aluminium metal and the drop in bauxite prices resulted in the decrease in mine production by 5 per cent in 1981 from the 1980 level. This decline continued through 1982 before levelling off at about 79 million tons in 1983. in the second quarter of 1983, the world aluminium industry started to recover as demand for metal increased and alliminium prices rose. In 1984, world bauxite output at 92.5 million tons almost reached the 1980 level. With the exception of the EEC and Yugoslavia, bauxite production increased in most producing countries and was 13.5 million tons higher compared with 1983. In 1984, several new projects began operating and plant production problems were settled in some producing countries. However, some African producing countries were still affected by difficulties in transportation.

36. As can be seen from Tables 2 and 3, bauxite production patterns have changed substantially over the past twenty-four years. Australia became the major bauxite producer increasing its production from 70,000 tons in 1960 to 32.2 million tons in 1984. As a result of Australia's increasing share in world production of bauxite (0.2 per cent of world production in 1960 to 34.8 per cent in 1984), the developed-country area group - 23 - TABLE 2 WORLD PRODUCTION OF ALUMINIUM, 1960-1984 (in thousands of metric tongs)

______B__- auxite PoutnlAumina Pro1 ____ I -;r 1-,______P1rimary Aluminium Production,

I II .1,I - - I . . I . - I . - - - . - -, I - -I'-'- I l I 1960 1965 1970 1973 1975 199 1980 19813 1982 1983 1 1984 196 1965 197 1975 1 97 1 19801I 1981 1 1982 11983 1984 11960 1963 1970i 1973_I 19511979 j1980 11981 1982 1983 I9.I.! I - _ .Li I -1 I -r------T i --T------ri i iI i 1.Xrld 27,620 37,292 58,536 75, 344 77,297 88,852 92,830 88.358 77,897 78,978 92,506 9,132 13,338 2.1 27,348 261.610j1 1±.111 34,737 33,878. 129,564 31,1061 34,813 I4,528 6.592 10. 324 12 .837 16,051 15.691 113,9261 14,319 13,b95 Dvew.cping o~mtries, 17,182 23,657 33,879 38,765 38.365 43,631 48.110 45,221 37.949 38,737 44,348 1,005 1,941 4,265 I6,042 5,724 6,748 7,636 7.396 6,171 7,780 113 2/47 683 999 1,228 1,818 12,051 2,152 2.286 2.409 2,675 of which: AMrntin - 22 118 133 134 138 133 134 Bahrain 103 116 126 126 130 171 172 177 Brazil 121 188 390. 849 %99 1,642 4,152 4,463 4,187 5,2.39 6,271 137 54 120 xi1 268 449 493 520 552 629 882 18 30 56 112 121 238 261 2.56 299 401 455 - 50~ 414 52 45 4o3 65 79 77 73 6933 9423 1,0863 7853 5243 5113 4103 1523 151 155 4,9 .* 35, 107, 149, Egypt 2 101 120 142 141 140 173 1,378 I1,600 2,400 3,800 8,466 13, 379 13,911 12,822 11,827 12,986 14,738 173 610 615 639 662 70B 679 578 564 44 3423 3493 3213 1803 1973 1733 643 64 152 143 169 188 191 174 43: 1943 3193 3 2,485 281 309~ 269 294 280 296 170 73 2,511~ 2 9193 4,3D93 3,622~ 3, ZB 3,354 3,052 3 2.396~ 1.7833 1,7913 Haiti 3473 383 657P 7433 5223 56O 461 5393 374 387 706 1,333 1,251 1,094 1,952 1,785 1.923 1,854 1.929 2,036 27 120 )300 350 337 500 494 489 485 480 569 64 161 154 167 211 185 213 210 205 268 396 688 1,040 1,229 993 1,052 1,249 1,203 704 778 1,003 - 33 1151 207 Iltdoesia, 34 46 11I 16 13 45 39~ 42 11, 50 11, 5053 12,0643 11. 6063 8,735 676 736 1,689 2.506 2,259 2,074 2,395 2,556 1.761 1,907 1.713 !--mxic~a 5,8373 8.6S13 11,8213 8,1583 7.6823 18 Korea 17 18 18 18 15 13 17 7 48 9944I 1,139 1.143 704 387 920 701 5;89 502 680 ~~ilxysia 18 19 34 39 40 43 43 43 41 40 4 6 Pakidstan n.a. n. a. 3 3 3 Romania 88 108 776 900 779 500 4,50 400 380 420 460 10 40 200 282 36 502 534 558 514 512 480 23 101 141 204 217 241 242 208 223 215 Sierra L~etwe n.a. 207 449 693 716 680 7,66 616 630 785 1.000 Su riname 3.455 4, 360 6,022 6,976 4,749 4.741 4,903 1A25 3,060 2,793 3.375 61 870 1,380 1,1t48 1,311 1,440 1,248 1,052 1,154 1,237 3 55 52 35 60 55 40 43 34 23 Taiuan 9 40 42 55. 46. 59*, so. 19. 19 27 35 28 .56 6.4 31 10 - - 10 558 157 547 590 508 306 128 n.a. 109 82 75 138 119 84 57 75 13 32 34 40 36 30 38 Thtiwy 352 23 Verm~e a 560 1,138 25 50 205 328 314 274 335 386 Yu~2s1av1, 1,025 1,574, 2,099, 2,167 2,306 3,012 3,138 3,249 3.668 3,500 3.347k 73 94 125 275 283 836 1.058 1,037 1,072 1,010 1 ,135 2.5 39 48 91 166 168 161 173 220 258 268 Zimbabw n.a. 2 2 n.a. n.a. 5 4 5 8 23 23

16,552927 I~~~~~~~~~~~~~~~~~~22,213 - 17,724 3 1 8,653 10. 2 75 Omveloped Q1Emtries, 5,400 7.056 116,836 25. 2 79 28 .442 34,245 33,670 32,023 28,971 29,124 36.964 6L,2L3 S,434. 13,316 16,959 I1 20J~ 121,056 18,300 21,069 ,503I 4.,873 7.488 9,272 8,874 137110.95960!11 of 'bi~ch: ____~~~~~~~~~~~~~ II.548 8a,86I hustral ia 70 1,186 9,389 17..5% 21,034 27,583 2 7, 179 25,441 23,625 24,372 32. 182 30 202 2,138 4.089 5,129 7,247 7,079 6,631 7,231 8,433 12 88 204 207 214 270 379 381 475 755 26 68 79 90 89 89 93 94 94 94 94 96, Austria 691 972 930 878 864 Canada 1,004 817 1,105 1,1t34 1,134 824 1,202 1,208 1.127 1,116 1,126 753 1,068 1,116 1.065 1,091 1,222 4,063 3.916 1.370 1,727 2,488 3,087 3,589 4.2 16 4,454 4,265 3,801 3,626 4,600 517 734 1,039 1,652 1,952 2,162 2.2 12 2,186 1,970 1,925 2,020 3,271 4,185 5,562 5.770 5,602 4,833 4,927 5,063 4,607 342 2,067 2,6631 3,051 2,970 2,567 1,970 1,892 1,828 1,737 1,595 1.530 594 773 999 1,112 1,089 1,239 1,339 1,236 1,087 1,009 1,031 235 340 381 359 383 395 432 436 390, 361 437 555 757 922 1,246 1,539 1,608 1,651. 1.1509 1,580 1,701 169 234 309 533 678 742 731 729 723 743 777 Cenmmwy, F.R. 4 4 3 2 136 884 1,274 2,283 2,748 3,006 2,837 3,012 3,216 2,84 2,455 2,386 n.a. n.a. 312 470 475 496 505 502 419 436 487 87 143 135 140 146 1461 135 136 Greece 105 650 Ire land 230 Italy 316 244 225 so 32 26 23 19 24 13 222 220 313 486 697 854 900 786 698 402 625 84 124 147 184 190 269 271 274 2.33 196 Netber~anids 75 181 258 256 258 262 248 236 247 n.a. n.a. 107 97 82 88 102 90 88 94 106 29 36 40 252 30E 360 374 339 241 253 288 Urdted Kingdcss 77 77 82 Iceland 39 72 62 72 75 75 355 626 1 .285 1,9875 1,5655 1,822 2,218 1,619 1,212 1,378 1,488 133 294 733 1,097 1,013 1,010 1,092 771 351 256 287 Zealard 117 109 154 156 155 167 220 243 New 171 276 527 618 595 674 662 636 645 715 761 164 167 South Africa, Rep. of 53 76 86 87 85 107 3 4 2 4 6 8 9 7 10 10 62 695 673 729 742 29 53 119 160 210 260 387 397 367 358 381 Spain 16 30 66 83 78 82 82 83 79 82 83 5MdtzerlaxK1 39 67 92 85 79 83 86 82 75 76 79 3 3 3 4.220 1,827 2,499 4,109 3,519 4,654 4,489 3,275 4,099 United St~ates6 2,O30 1,68l3 1.8833 1,9O9 1,8w 1.8213 1.5593 7323 6793 856 3,514 5,059 6.300 6,6625 5,1355 6,650 7.030 6,190 4,280 4.68D 3,607 4.557 3.353 CentralYl"myed 5,040 7,822 11,300 10,490 10 .976 11,050 11,114 10, 977 11,117 11,194 1.8 14 2,999 3,436 4,347 4,404 4,849 4,888 5,427 5.669 5,933 5,964 911 1,470 2,153 2,568 2,736 2.9866 3,045 2,993 2,989 3,023 2,945 eawotmies of utsdch: 800w 135 280 360 350 370 400 China, P.R. 350 400 800 i1,000 1,500 1,700 1,950 1K900 2,700 137 174 270, 450,, 500, 700,, 700,, 700*, 800 70* 90. X00 425, 705 955 10)5 905 90 90 805 805 85. .25 43. 48w, 43,k 37*, 33, 34. 36. 32 Geruny. D.R. 555 475 485 415 435 455 465 425 40 40 60 60 60 60 60 58 59 58 2,9 14 2,627 2,917 2,994 219 441~ 655~ 7565 818~ 805~ 792~ 7435 836~ 839 $0 58 66 68 70 72 74 74 74 74 1,190 1 .478 2,022 2,600 2,890 2,976 2,950 10 10 10 8 10 10 10 10 26 47 99 102 103 97 95 66 43 44 46 3,500 4,700 5,400 7,9(0 6,600 6,500 6,400 6.400 6,400 6,200 1.397 2,396 2,603 3,100 3,00C0 3,200 3,25 3,800 4.000 4,175 4.200 1,750 2,000 2,150 2.350 2.420 2,400 2,403 2,4C0 Otivr 91 121 i I I I - L J-- -1.1 of into variations in and "kigt of bauxite as publiah-ed by ficial sources, not taking accaint ccompoitior wxLstur.- content. 71sedo calcined aluizzna for period 1974-1977 and aluxdna hydrate for period begirriing 1978. 3Dry ueg~t 4Llndajes prD~ictja', frtra Saraw'ak. 5Charined ahinlna 6Inclujk1e Virgin IsluvW in the figures for alumina productlion. 7lncude other raw mraterials containing aluminium (aliznite and nephellne, with 16-18 per cent, and 25-30 per cent rv-4pectively) as weU as bauxite with 25-55 ~r cent A1203 content.

Source: Metal Statistics, 1960-197ii. 1965-1975. 1970-1980 1974,.198I,, c~g~Ishf AC .%AtloflA Stetist4.cs for Alumina producciEon In 1966 and 1965 -24 - TABLE 3 WORLD PRODUCTION OF ALUMINIUM, 1960-1984 (World totals in thousands of metric tons, regional and country data as a percentage of world production)

Bauxite Productionl Alumina Production2 1Primary Alurinium Production.

19601 1965 1970 1973 1975 1979 1980 1981 19 1983 j1981. 196I 165f 1970 1973 1915 j1979 1 198 1961 119821 18 19861 1960 j1965 1970 93 1975 j1979 l'Mft 2981 I1982 1983 1984.

WorlId 27 620 ?7292 58.536 7534 77 297 I88.852 92.830 88.358 !.897 78,978 9250 9.132 13.388 21.018 27.348 26.68 32,S21. 34,7.L7 33.878 29,564 31..106 34,813 4.528 6_,592 10.324. 12.837 .12. 38 1j~9 26051 .. .2! i..i ! . IDeveloplngt countries. 62.2 63.4 57.9 51.5 1..6 19.1 51.8 51.2 .8. 1.9.0 41.9 10.9 16.5 20.3 22.1 21.5 20.7 21.9 21.8 20.9 22.1 72.3 2.5 3.8 6.6 7.8 9.7 17.0 17.8 138 1. 68 1. of which:

Argentina ------0.2 0.8 0.8 0.83 1.0 0.9 0.8 Iahrain - --I-- .- - I- - -. -- 0.8 0.9 0.9 0.9 0. . . . Drzl0.1. 0.5 1. . . . 50 54 66 68 . .. 061.0 1.4 1.4. 1.5 1.9 2.0 2.3 0.6 0.5 0.5 0.9 0.9 1.6 1.6 2.6 I7.1 2.8 7. Cameroon . - - .- - - . - - . - - - - - 1.0 0.8 0.5 0.3 0.6 0.3 0.3 0. . . . Dominican Reptublic 2.5 3 2.5 3 1.9 3.' 1.1. 3 1.0 3 0.6 3 0.633 0.5 3 0.2- 3 ------Dubai ------.- - - - 0.2. 07 1 .. Egypt - - 0.7 0.7 51 Guinea 5.0 4.3 1..1 5.0 10.9 15.1 15.0 14.5 15.2 16.4. 15.9 1.9 3.8 2.9 2.2 2.1. 2.0 2.0 2.0 2.0 1.8 1.6 . -.. . * Chana 0.7 0.9 0.1 - . - -- 1.1 1.2 1.1 3 063 053 01.3 0.23 0.23 0.23 0.13 1.1 1.2 1. . . IGuyana 9.1 7.8 74 4.68 4. 9 3.8 3.3 2.7 2.3 2.3 2.7 - 2.1 1.5 1.0 1.1 0.9 0.9 0.5 0.2 .. .-- . - Haiti 1.3 3 1.03 ~1.13 1.03 ~ 0.73 06-3 0.5 3 0.6 3 0.5-3 - - - - - .. . -.- . . Indi 1...... 22 1.9 2.2 2.4. 22. 2. 0.3 0.9 1.6 . . 1.5 1.1. 1.1. 1.6 1.5 1.6 0.1. 1.0 1.6 1.2 1.3 1.4 1.2 1.. 15 11 . Indonesia 1.1. 1.8 1.8 1.6 1.3 1.2 1.3 1.6 0.9 1.0 1.1 - - - - . -- - -02 0. . Iran - . - . . . -- - o.3 0.1. 0.1 01.3 03 03 .jamaica 21.1~ 23.2 20.2 18.O3 15.0~ 12.9 13.0 13.1 10.5 9.7 9.46 7.1. 5.5 8.0 9.2 8.1. 6.1. 6.9 7.6 6.0 6.1 4.9 . !Korea - - . - . . . . - - - - - . 0.2 0.1 0.1 0.1 0.1 0. . . . l~alaysia 2.7 2.74 1.9 1. . .. 10 08 08 06 07. - - .-. - - - - . !Mexico- - - - 0.30.30.30.30.30.3~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~-.. Mozambique . . . n.-"090". - ' .0" O.. O.. - --- ., u. u. ., u. . . uj-.u. . . :Romania 0.3 0.3 1.3 1.2 1.0 0.6 0.5 0.6 0.5 0.5 0.5 . 1.0 1.0 1.6 1.5 1.5 1.6 1.7 1.6 11. 0.3 1.0 1.1 1.6 1.4. 1.5 1. . . . Sierra Leone n.a. 0.6 0,8 0.9 0.9 0.8 0.5 0.7 0.8 1.0 1.1 -a - .037 .6 .7 .6.5 .4 .3 .1 ISuriname 12.5 11.7 10.3 9.3 6.1 5.3 5.3 1..7 3.9 3.5 3.6 - 0.5 4.1 5.1 1..3 6..2 0.40.30.3 0.10.30.30.330.2 IT.Pi-.n - . .. . - . . . 0.2 0.3 0.2 0.2. 0.2. 0.2. 0.2, 0.1. a - a0. 2 0.3 0.2 0.3 0.2 0.4 0.. 0. . jurkey- 0.5 0.7 0.2 0.6 0.7 0.6 0.1. 0.1 -na 0.1. 0.3 0.2 0.1. 0.4. 0.3 0.2 0.2 . . - - 0.1 0.2 0.2 0. . . . Veneruela - - - - . - - - 2.5 3.3 .0.2 0.2 0.6. 1.1. 2.0 20 .0.3.1 iYugoslavia 3.7 4.2 3.6 2.9 3.0 3.1. 3.6 3.7 6.7 4.1. 3.6 0.8 0.7 0.6 1.0 1.1 2.6 3.0 3.1 3.6 3.2 3.3 0.5 0.6 0.5 0.7 1.3 1.1 1.0 11 1. . . jZimbab... n.s. - - na.. na.. - . . - . . - . Developed countries, 19.5 18.9 28.8 33.5 36.8 38.5 36.3 36.2 37.2 36.9 1.0.0 68.8 63.0 63.4 62.0 62.0 66.3 64.0 62.2 59.9 58.8 60.5 77.4 73.9 72.6 72.2 69.1 68.3 68.3 672 6. 21 6. of which:

Auitra II 0.2 3.2 16.0 23.3 27.2 31.0 29.3 28.8 30.3 30.9 34.8 0.3 1.5 10.2 14.9 19.2 22.8 20.9 20.9 22.4 23.2 24.2 0.3 1.3 2.0 1.6 1.7 1.P 1.9 21 2. 33 47 Austria' 0.1 - - - . - - . - . . - . - - -- 1.5 1.2 0.9 0.7 0.7 0.6 0.6 0. 0. . . Canada . . . - . . . 11.0 6.1 5.3 4..? 4.2 2.5 3.5 3.6 3.8 3.6 3.2 15. 3 11.4 9.1. 7.2 6.8 5.7 6.7 7. . . . EEC 11.8 11.2 9.5 7.7 7.2 5.1. 5.3 5.7 5.9 5.9 6.2 1.5.0 12.9 11.8 11.3 13.5 13.0 12.8 12.6 12.9 11.7 13.2 11.1. 11.1 10.1 12.8 15.2 16.3 13.8 139 1. 36 1. France 7.5 7.1 5.2 3.9 3.3 2.2 2.0 2.1 2.2 2.0 1.6 6.5 5.8 4.8 4.1 6.1 3.8 3.8 3.6 3.7 3.2 3.0 5.2 5.2 3.7 2.8 3.0 2.6 2.7 2. . . . CGermany, F.R. - - - - . - . . 4.8 4.1 3.6 3.4 4.7 6.7 6.6 .9 5.1 5.2 6.9 3.7 3.5 3.0 4.2 5.3 16.9 4.6 66 57 52 49 Greece 3.2 3.1. 3.9 3.6 3.9 1.5 1 Ireland - - - - 3.2 3.2- 3.6- 3.6 -3.1 2.6 n.s..- nas. - 1.5 - 1.7 - 1.8 - - 1.5 1.5. -1.4 0.31.1. 1.9.4, .- 0.9- -1.1. 1.1 -0.9 -0.9 0. . . . Italy 1.1 0.7 0.1. 0.1 2 .1. 2.1 1.5 1.8 2.6 2.6 2.6 2.3 2.4 1.3 1.8 1.9 1.9 1.1. 1.4 1.5 1.8 1.7 1. . ,. 11 Netherlands - - - 0.7 1.1. 2.0 1.7 1.6 1. . . United Kingdom . - - n.s. n.e. 0.5 0.1. 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.6 0.5 0.6 2.0 2.6 2.4 2.3 2. . . : Iceland - .------0.4 0.6 0.5 3.5 0.5 0. . . Japan - - . - - - - - 3.9 4.7 6.1 7.3 5.9 5.6 6.46 4.8 4.1 4.4 4.3 2.9 6.5 7.1 8.5 7.9 6.7 6.8 4. . . .

------. - - - Me. Zealand ------. 0.9 0.8 1. 1.0 1.0 1. . . Norway ~ f ------.- - - . -- - --.3.8 6.2 5.1 4.8 4.6 4.4 4.1 1.1 .6 South Africa, Rep. of ------0.4 0.6 0.5 0.5 0. . Spain -. . ------. -- 0.2 2.1 2.3 2.3 2.1 0.6 I0.8 1.2 1.2 1.6 1.7 2.4. 2. . .. Sweden - - -.. - --- - 0.6 o.5 0.6 0.7 0.6 0.5 0.5 0. . . . Switzerland - - - . - . - - - - - 0.9 1.0 0.9 0.7 0.6 0.5 0.5 0. . . 3 5 -5 - . United States 7.3 6.5 3.2 2.5 2.3 2.0 1.7 1.8 0.9 0.9 0.9 3a.5 37.8 29.9 24.3 19.2 20.5 20.2 18.3 14.5 13.6 13.4. 40.3 '37.9 34.9 32.0 27.1. 30.0 29.0 286 2. 34 2.

Centrally-planned 18.2 17.6 13.1. 15.0 13.6 1.2.3 11.9 12.6 14.1 14.1 12.1 20.3 22.16 16.3 15.9 16.5 16.9 14.1 16.0 19.2 19.1 17.1 20.1 22.3 20.9 20.0 21.3 19.7 18.9 191 2. 11 1. economies, of which: Chins, P.R. 1.3 1.1 0.7 1.1 1.3 1.7 1.8 2.0 2.5 2.4 2.2 1.5 1.3 1.3, 1.6, 1.9 2.2, 2.0, 2.1. 2.7. 2.6. 2.3 1.5, 1.4, 1.3 2.2 2.3 2.4 2.2 2. . . . Czechoslovakia ------0.35 0.35 0.1. 0.35 0.3 0.3 0.3 0.3 0.2 0.6a 0.4, 0.4 0.4. 0.3. 0.2. 0.2. 0. . . . Germany, D.R. ------0.1 0.1 0.2 0.1 0.1 0.9 0.7 0.6 0. I*-rgsary *4.3 4.0 3.5. 3.4 3.7 3.3 3.2 3.3 3.1.. 3.7 3.2 2.1. 2.3 0.352.1~ 0.252.4~ 0.252.8 ~ 0.152.5' 2.3~ 2.3~ 2.5~ 2.7~ 2.1. 1.1 0.9 0.6 J050.6 0.6 0.50.4. 0.3'0.5 0. 0... 0..j. ... ------North Korea 0.1 0.1 0.1 0. . . . Polagd ------. ------0.6 0.7 1.0 0.8 0.8 0.6 0.6 01 0. 03 0. USSR 12.7 12.6 9.2 10.5 8.5 7.3 6.9 7.2 8.2 8.0 6.7 15.3 17.9 12.3 11.3 11.2 9.8 9.4 11.2 13.5 13.1. 12.1 15.5 18.2 17.0 15.4 16.7 15.5 15.1 153 1. 68 1. Other ------1.0 0.9------.---

Percentages calculated from weight of bauxite as published by official sources, not taking into account variations in composition and moisture content. 2Percentages based on calcined alumina for period 1974-1977 and alumina hydrate for period beginning 1978. 3Dry -eight. 1.Includes production of Sariwak. 5Calcined alumina. 6Includes Virgin Islands In the percentages for alumina production. 7Includies other raw materials containing aluminium, Calunite and nepheline, with 16-3.8 per cent and 25-30 paer cent aluminium, oxide, respectively) as well as bauxite with a 25-55 per cent A1203 content. *- Estimates n.a. - not available

Source: I its 1976-1986; lac ftA - NMett.atoaSiatstsatst1,e960-1970,1965,-1975cs for a nua p oducion,1979-19896in 196 and 1965 Met.gealeelcatA - 25 -

CHART III -- WORLD PRODUCTION OF BAUXITE

2h 9 6 m 1 9 8 4 (27.820 thousand metric tons) (92.506 thousand metric tons)

USSR 12.77. Australia 34.8% Surname Jamaica 12.57. k 21.1% Guinea f 15.9%

EEC 1: .8% '9 Jamaica9.47. / Gu7 B~razil Other 26.4% 9.17, Other 6-8. USSR 6.7% 3'e. .t ,. CHART IV - WORLD PRODUCTION OF ALUMINA

1 9 6 0 1 9 8 4 (9.132 thousand metric tons) (34.813 thousand metric tons)

USA USA 38.5. 13.4% Australia L 24.2% EEC USSR 13.2% 15.3%

1K'i /Oth er USSR 12.lX EE EE/~~F 12.67. 15 07. Jamaica Jamaica her Canada , 4,; 4.9% 32.2% 11.07.

CHART V - WORLD PRODUCTION OF PRIMARY ALUMINIUM

1 9 6 0 1 9 8 4 (4,528 thousand metric tons) (15,o95 thousand metric tons)

USA USSR 40.3% 14.4% USA

Canada 7.7% USS 15.5% EEC 4.88% ri/O t1"' h ~ e t.r Cana ~ ~ orway 15.3%15.3% 4.8t Other A R% 34.6% 11.4%

Source: GATT, based on the Metallgesellschaft statistics - 26 -

increased their share in world bauxite production 'rom 19.5 per cent in 1960 to 40 per cent in 1984. In contrast, the Unilted States' share of world production fell from 7.4 per cent in 6960 t'. under 1 per cent in 1984 as its economical ore became depleted. Between 1960 to the early 1970s, production in the EEC countries doubled, reaching the highest level of 6.2 million tons in 1971 mainly due to an increase in mine production in Greece and France. However, since then the EEC production started to decline and bv 1984 it fell to 3.9 million tons. 37. In the period 1960 to 1984, developing countries increased bauxite production by almost 160 per cent, from 17.2 million tons in 1960 to 44.3 million tons in 1984. Nevertheless, while the absolute amount of bauxite mined by developing countries increased substantially, the rate of growth of their mine production was only one-half of Australia's rate. Consequently, their share in world production fell from 62 per cent 4n 1960 to about 48 per cent in 1984. During this period, Jamaica, Guyana and Suriname have gradually lost their positions as major world producers of bauxite, as a result, inter alia, of the introduction of taxes and levies on mining of bauxite and the availability of higher grade ore and lower costs for some factors of production in other areas. In addition, the production of two other Caribbean producers, Haiti and the Dominican Republic, declined from a combined total of 1 million tons in 1960 to none since 1983, primarily due to the depletion of economic ores. Jamaica, which was the world's largest bauxite producer until the early 1970s, introduced production levies in 1974 as a means of increasing government revenues in foreign currency. This move was followed by other Caribbean bauxite producers - Suriname, Haiti and the Dominican Republic. However, the levy and other measures taken had an effect on bauxite production. As a result, Jamaica's output fell from 15.3 million tons in 1974 to 10.3 million tons in 1976. Despite the revision of the production levy, Jamaica's production has continued to decline due to weak demand for its bauxite and in 1984 it stood at 8.7 million tons. The situation was similar in Suriname and Guyana, whose production fell to almost one-half of thai of the early 1970s. In contrast, the bauxite production of Guinea increased from 1.4 million tons in 1960 to 14.7 million tons in 1984. Consequently, Guinea became the second largest world's producer after Australia. It increased its share in world bauxite production from 5 per cent in 1960 to almost 16 per cent in 1984, overtaking Jamaica whose share decreased from 219 per cent in 1960 to 9.4 per cent in 1984. Since the late 1970s, Brazil has intensively started to develop its mineral industries and in 1984 became the fourth largest bauxite producer with a share of almost 7 per cent of the world bauxite production in that year.

38. Centrally-planned economies increased their production from an estimated 5 million tons in 1960 to an estimated 11.2 million tons in 1973. The output has remained close to this level for the past twelve years. Between 1973 and 1984, Hungary increased its production by 15 per - 27 -

cent, while the USSR's production fell by 20 per cent in the same period. The share of centrally-planned economies of world bauxite production decreased from 18.2 per cent in 1960 to 12.1 per cent in 1984. The People's Republic of China increased production by 138 per cent between 1973 and 1984. Alumina production 39. Unlike bauxite mining, alumina refining continues to be located mainly in developed countries, which were responsible for 60 per cent of the total world production of 34.8 million tons in 1984. However, this largely reflects the fact that Australia, which is the world's leading producer of alumina, increased its share from 0.3 per cent in 1960 to more than 24 per cent of world production in 1984.. Other developed countries experienced reduced shares. These were the United States (13.4 per cent of world production in 1984), the EEC countries (13.2 per cent), Japan (4.3 per cent), Canada (3.2 per cent), and since becoming a producer in the early 1980s, Spain (2.1 per cent). In 1984, developing country alumina production amounted to 7.8 million tons, which was 22 per cent of total world production compared with 10.9 per cent in 1960. Jamaica remained the major developing-country producer with almost 5 per cent of world production in that year, followed by Suriname (3.6 per cent), Yugoslavia and Venezuela (3.3 per cent each) and Brazil (2.5 per cent). Alumina production of centrally-planned economies was estimated at almost 6 million tons in 1984, or about 17 per cent of world total. The USSR produced 70 per cent of this amount and Hungary and the People's Republic of China about 14 per cent each. Chart IV illustrates the major alumina producers in 1960 and 1984.

40. As the intermediate processing step, alumina production followed the trend of aluminium production and mining of bauxite. Between 1960 and 1980, alumina production increased at an annual average of 7.0 per cent, from 9.1 million tons in 1960 to 34.7 million tons in 1980. With the fall in demand for aluminium during the 1981-82 recession, alumina production declined to the lowest level since 1976. It recovered in the following years and reached 34.8 million tons in 1984. 41. Apart from Australia, most of Abhe large bauxite producers still process comparatively little alumina and developed countries are the dominant producers. However, in the period under consideration (1960-1984), there has been a significant change in the production pattern within developed countries. The United States, the world's largest producer of alumina in the 1960s and the early 1970s, was matched in alumina production by Australia in 1975 and surpassed in 1976. After reaching a peak of 7 million tons in 1980, the alumina production in the United States declined by 40 per cent to 4.2 million tons in 1983, and for the first time imports of alumina exceeded domestic production. The - 28 -

United States alumina production recovered in 1984 and amounted to 4.7 million tons. Except for 1975-76, the Canadian production of alumina has been practically stable at around 1.1 million tons over the last twenty-five years. However, in the same period Canada's share of world production has decreased from 11 per cent in 1960 to 3.2 per cent in 1984. In contrast, the Australian production of alumina has expanded rapidly from 30,000 tons in 1960 to 8.4 million tons in 1984. The Australian production of alumina grew significantly until 1979 but declined in the following years before rising again in 1983-84. Several alumina plants are in the planning or construction stages and the Australian alumina production is expected to continue to increase at a rapid rate. Between 1960 and 1980 the alumina production of the European Communities more than trebled, increasing from 1.4 million tons in 1960 to 4.5 million tons in 1980. It decreased to 3.6 million tons in 1983 as a result of the recession in 1981-82. Subsequently, it increased by I million tons in 1984. This increase was mainly due to the output from the new refinery in Ireland. Nevertheless, the share of the European Communities in world alumina production decreased from 15 per cent in 1960 to 13.2 per cent in 1984. Spain, which became an alumina produced in 1980, produced 0.7 million tons of alumina in 1984. Aluminium output cutbacks in Japan led to a decline in its alumina production from the highest level of 2.2 million tors in 1980 to 1.5 million tons in 1984.

42. From 1960 to 1980, alumina production of developing countries rose at an annual average growth rate of 10.7 per cent, increasing from 1 million tons in 1960 to 7.6 million tons in 1980. After a drop in output in 1981-82, developing country alumina production increased again, and in 1984 it amounted to 7.8 million tons. During this period, their share of world production went up from 11 per cent in 1960 to 20 per cent in 1970 and has practically stabilized at this level since then (22 per cent in 1984). As mentioned above, among developing countries, Jamaica has remained the major alumina producer although its production as well as its share of world production have declined substantially since 1982. In 1984, its production was 1.7 million tons representing a share of 4.9 per cent of world production. The second largest developing country producer is Surname, which started alumina processing in the late 1960s, followed by Yugoslavia and since 1984, Of Venezuelf. Other increases in alumina output took place in Brazil , India and Romania, while Guyana discontinued its production in 1982 and Guinea's production has been decreasing since 1980.

43. Centrally-planned economies are estimated to have increased their production of alumina from 1.8 million tons in 1960 to about 6 million tons in 1984. However, their share of world production declined from 20 per cent in 1960 to 17 per cent in 1984. In 1984, the alumina output of the Soviet Union was estimated at 4.2 million tons representing about 12 per cent of world production. - 29 -

Primary aluminium production 44. In 1984, world primary aluminium production amounted to almost 16 million tons. As in alumina, developed countries dominate world metal production and in that year they accounted for 65 per cent of world output. The United States, the world's largest producer, contributed almost 26 per cent of the 1984 world output and 40 per cent of that of developed countries. In the same year, the EEC countries produced 2 million tons and Canada produced 1.2 million tons of primary aluminium, 12.7 per cent and 7.7 per cent of world total production, respectively. Other important developed country producers were Norway, Australia and Spain who increased their share over time to 4.8 per cent, 4.7 per cent and 2.4 per cent of world production in 1984, respectively, while the share of Japan decreased to 1.8 per cent. Developing-country production of 2.7 million tons represented about 17 per cent of world primary aluminium production in 1984. Among seventeen developing countries with operating aluminium smelters, the largest producers were Brazil and Venezuela, with 2.9 per cent and 2.4 per cent of the 1984 world output, respectively. Yugoslavia, Romania, India, Bahrain, Dubai, Egypt and Indonesia totally accounted for 9.2 per cent of world aluminium production, while the remaining seven developing countries, Argentina, Cameroon, Iran, the Republic of Korea, Mexico, Suriname and Turkey for less than 2.3 per cent. The share of centrally- planned economies in world primary aluminium production was estimated at 18.5 per cent in 1984. In that year, the production of the USSR was estimated to be 2.3 million tons, almost 80 per cent of the production of this group of countries. The People's Republic of China produced 0.4 million tons of primary aluminium in 1984. Country shares of world primary aluminium production in 1960 and 1984 are shown in Chart V. 45. Between 1960 and 1980, world production of primary aluminium almost quadrupled, increasing from 4.5 million tons in 1960 to 16.1 million tons in 1980 at an average annual rate of growth of 6.5 per cent. However, the growth was uneven during this period. World primary aluminium production grew at an average rate of 8.5 per cent until 1974 reaching 14 million tons in that year. The decline in primary aluminium consumption in 1973-75 led to a fall in production to 12.8 million tons in 1975. Then, primary aluminium production recovered and increased to 16.1 million tons in 1980, but the growth rate between 1974 to 1980 was only 2.0 per cent. The 1981-82 recession resulted in a decline in demand and prices of aluminium metal. An increase in inventories was followed by production cutbacks leading to a capacity utilization of 71 per cent in developed countries compared to 78 per cent experienced during the 1975 recession. In 1982, world primary aluminium production was more than 2 million tons lower than production in 1980. Since early 1983, demand for aluminium rose again and in 1984, world primary aluminium production of 15.9 million tons was only about 150,000 tons under the 1980 level. - 30 -

46. By examining Tables 2 and 3, it can be noted that in the period 1960 to 1984, world production patterns have undergone substantial changes. Although developed countries have still remained major producers of primary metal, their share in world metal production decreased from 77 per cent in 1960 to 65 per cent in 1984. However, in volume terms, their primary aluminium production increased from 3.5 million tons in 1960 to 10.3 million tons in 1984 indicating an average annual growth rate of 4.6 per cent. After an annual increase of 8.0 per cent between 1960 to 1974 and 0.7 per cent from 1975 to 1980, these countries as a group experienced a negative growth rate of 0.6 per cent from 1981 to 1984. (It was -5.6 per cent from 1981 to 1983). The United States has maintained its position as the world's leading producer, but its share of world production dropped from 40.3 per cent in 1960 to 25.8 per cent in 1984. Canada, which was the third largest producer in 1960, almost doubled its production of primary aluminium, but its share of world production also dropped from 15.3 per cent in 1960 to 7.7 per cent in 1984. However, Canada remains an important area for future smelters because of its low energy costs. The European Communities also increased their production of primary metal from 0.5 million tons in 1960 to 2.2 million tons in 1980, an annual average growth rate of 7.7 per cent. This increase was mainly due to the construction of new smelters in Greece and the Netherlands as well as the enlargement in production capacity In the Federal Republic of Germany and the United Kingdom. During the 1981-82 recession. though most of the EEC countries maintained their production, the closure of British Aluminium and several small smelters in France and Italy led to a decrease in the EEC production which declined to 2 million tons in 1984. In 1984, the EEC accounted for 12.7 per cent of world aluminium production and 20 per cent of developed-country production compared to 11.4 per cent and 14.8 per cent in 1960, respectively. New production capacities enabled Norway to increase its aluminiUm production from 171,000 tons in 1960 to 761,000 tons in 1984 and at the same time to increase its share of world production by 1 percentage point to 4.8 per cent. Another major increase took place In Spain whose production rose from 29,000 tons in 1960 to 381,000 tons in 1984, thus accounting for 2.4 per cent of world production of primary aluminium in the latter year. Several other developed countries such as Tceland, New Zealand, South Africa, Sweden and Switzerland also developed or increased their aluminium smelting in the 1970s. Nevertheless, the major rise in aluminium production took place in Australia. Bauxite and energy availability, together with political stability led to the expansion of Australian aluminium smelting which rose at an average rate of almost 19 per cent between 1960 and 1984. Australia, whose production in 1960 was insignificant, is on the threshold of becoming one of the world's major producers of aluminium metal. In 1984 its production amounted to almost 0.8 million tons representing 4.7 per cent of the world output. Until 1980 Japan belonged to the group of major aluminium producers annually smelting over 1 million tons of metal. However, high energy costs forced Japan to drastically reduce its - 31 -

production capacity12. In 1984, Japan reduced its production to less than 300,000 tons, decreasing its share of world production by 5 percentage points to 1.8 per cent compared to 1980. 47. In the period under consideration, developing countries substantially increased both their volume and their share of world aluminium production. Between 1960 and 1984, their output rose from 113,000 tons to 2.7 million tons and their share of world output from 2.5 per cent to 16.8 per cent. The average annual growth rate during this period was 14 per cent, about three times higher than the growth rate for developed countries (4.6 per cent for the same period), and more than twice as high as the world average. A number of new developing country producers have made their appearance in the last decade. Many of them possess cheap energy or bauxite resources. However, the high rate of growth recorded by developing countries reflects the fact that in 1960 these countries produced very little aluminium. As mentioned earlier, Brazil and Venezuela became the major aluminium producers among developing countries, followed by, in decreasing order of importance, Yugoslavia, India, Romania, Indonesia, Bahrain, Egypt, Dubai and Argentina. Smaller aluminium smelter plants can also be found in Cameroon, Ghana, Iran, the Republic of Korea, Mexico, Suriname and Turkey.

48. Between 1960 and 1984, the production of primary aluminium by centrally-planned economies was estimated to have grown on an average at 5 per cent annually and to have increased by 2 million tons, fri-om 0.9 million tons in 1960 to 2.9 million tons in 1984. The Soviet Union, the world's second largest aluminium producer, substantially expanded its production in the 1960s. It produced 2 million tons in 1973. Since then, its growth slowed down and from 1979 onwards its annual production has been estimated to be about 2.4 million tons. In contrast, aluminium smelting in Czechoslovakia, Hungary, the Democratic Republic of Germany and Poland, is estimated to have remained stagnant or to have decreased after some increase in the early 1970s. Aluminium smelting in these countries went up from 141,000 tons in 1960 to 210,000 tons in 1984 while their global share decreased from 3.3 per cent in 1960 to 1.4 per cent in 1984. Production and share of world aluminium production of the People's Republic of China also increased over the same period, from 70,000 tons (1.5 per cent) in 1960 to 425,00 tons (2.7 per cent) in 1984. Secondary aluminium production

49. Secondary aluminium production has become an integral part of the aluminium industry. In addition to primary aluminium, several million tons of aluminium scrap metal is recovered and consumed throughout the world. World data on recycling and consumption of scrap are limited except for developed countries and some developing countries. Information available generally only includes scrap which was sold, - 32 -

purchased or traded, while large amounts of home or runaround scrap are usually not indicated in the data. On the basis of available statistics, Table 4 presents data on aluminium scrap recovery from 1960 to 1984. As can be seen from Table 4, aluminium scrap recovery increased almost five times during this period. Since the early 1970s, the recovery of aluminium scrap became economically, and at the same time environmentally, important. Since scrap is basically a by-product of production, manufacturing and consumption, in general, countries with large processing facilities and consumption of aluminium, recover and consume more scrap. As Table 4 indicates, in the period under consideration, the United States and several EEC countries were leaders in aluminium scrap recovery and aluminium recycling in Japan expanded rapidly from the low level in 1960. In the last few years, secondary aluminium production has also increased in some developing countries. Table 5 provides the recovery rates of scrap as a percentage of total consumption of aluminium metal for several countries. From this Table it appears that Italy, the United Kingdom, South Africa, Japan, the United States and the Federal Republic of Germany recovered a high percentage of scrap for re-use. Table 5 also shows that most countries have increased their rate of recovery. The amount of aluminium recovered from scrap is directly related to costs of primary metal. However, at present, in many countries, the environmental considerations may influence scrap recovery even if it might not be considered economically advantageous. Secondary aluminium production may also be developed in developing countries as the technology required for recycling has lower capital costs and skill requirements. World production of semi-mnanufactures and castings 50. Pri.marv and secondary aluminium, normally cast into ingot or billets or kept in the molten state, is used to produce aluminium mill products, castings and alloys. Because of the integrated nature of the aluminum industry, most of the metal produced by smelters is made into mill. products by the same plant or by an allied organization. Table 6 illustrates the production of aluminium and aluminium alloy semi-manufactures and castings in those countries for which information is available. Though the information in Table 6 is incomplete, one could still assume that most of the produjyion of semi-manufactures and castings takes place in developed countries. Consumption of primary aluminium 51. In 1984, world consumption of primary aluminium at about 16 million tons was almost four times higher compared to that of 1960. Consumption of aluminium, as of other metals, has been concentrated in developed countries which accounted for 67 per cent of world consumption in 1984. The United States remained the major consumer with a share of 28.5 per cent of world aluminium consumption in that year. It was followed by the - 33 - TABLE 4 ALUMINIUM SCRAP RECOVERY, 1960-1984 (Aluminium recovered from old and new- scrap) (in thousands of metric tons)

19651960 1970 1973 1975 1979 1980 1981 1982 1841983

856 1,504 2,18 2,814 2.606 3j868 3,881 4.069 3,854 4,125 4.242 * t Developing countries, of which: 12 21 54 101 99 167 167 163 187 202 239 Argentina n.s. n.e. 12 17 16 10 5 6 7 a Brazil n.a. 8 18 21 52 50 36 45 43 49* Dubai n.a. n.a. 2* Iran n.a. n.e. 1 1 15 3 3 5 a 12 Korea, Rep.of n.a. n.a. n.a. n.a. 2 9 17 10 12 13 16 Mexico n.a. n.a. 7 9 9 15 20 26 15 20 Taiwan n.a. n.a. 3 13 6 14 19 16 16 24 26 Venezuela n.a. n.S. 1 10 10 10 10 17 20 ia n.S. n.n. 2 22 23 24 26 25 34 Yugoslav n.s. Other n.e. n.a. n.a. 27 32 33 39 41 48 52 Developed countries, of which: 844 2.l9 3,701 3.906 3L667 3.823 4.00 2 Auatralia 52 82,* 19 32 25 31 38 44 41 38 41 Auatria 3 4 7 9 6 9 14 13 13 16 22 Canada 8 21 32 36 39 84 65 59 51 56 70 EtC 363 511 736 895, 795 1,097, 1,097, 1,056* 1,009, 1,103* 1,136, Belgium-Luxeubourg 3 3* 2 7 3 2 1 2 Denmark 3 4 7 9 9 10 U 11 12 13 6 France 44 50 87 123 107 165 170 170 154 166 169 Germany, F.R. 136 203 258 328 285 424 405 397 406 426 442 Italy 42 61 154 192 151 245 266 2 0 242 278 283 Netherlands 6 1 7 24 34 47 54 50 so 58 60 United Kingdom 129 189 221 212 208 204 191 179 146 161 174 Finlend n.a. 2 3 S 4 8 9 9 9 13 17 Japan 49 124 322 536 424 746 789 815 761 802 819B New Zealand n.S. n.S. 1 2 1 2 1 2 Norvay 2 3 4 8 9 7* 9 7 * 5* 5t Portugal n.a. n.S. n.S. 2 2 3 3 2 272 2* 2t South Africa, Rep.of n.a. n.A. 4 5 6 16 27 28 27 30 35 Spain n.a. 12 27 37 34 42 39 35 36 37 41 Sweden 3 01 20 24 23 25 25 25 23 25 31 Switzerland 7 13 15 17 16 19 20 20 19 21 23 United States7 401 774 937 1,127 1,122 1,612 1,577 1,790 1,666 1,773 1,760

May Include some double counting, beginning In 1975. Australia and Oceania. Production of remelted aluminium only. In addition, there is a production of secondary aluminium, which may not have been from scrap at all, but also from primary aluminium including some runaround scrap. 4 Including production in West Berlin. 5 Includes direct use of scrap. 6 Super purity aluminium from scrap is included in 1973. 7 Consumption of secondary aluminium plus direct use of scrap by manufactures. Gross weight - there has been an adjustment made for the period 1974-1984 from gross weight to the recoverable content of the Intake of scrap. The reporting bcats also changed.

* Estimates

Source: Metal Statistics, 1960.1970; 1965-1975 and 1974-1984 Metallgesellschaft AG - 34 -

TABLE 5

RELATIONSHIP OF ALUMINIUM SCRAP RECOVERY AND TOTAL ALUMINIUM CONSUMPTION1 FOR SELECTED COUNTRIES (in percentages)

Country 1960 1970 1973 1975 1980 1983 1984

Developing countries

Argentina n.a. 19.3 18.8 18.4 10.5 8.0 7.2 Brazil n.a. 7.6 10.2 8.7 14.5 13.7 14..5 Mexico n.a. 17.6 13.7 15.5 13.9 21.r 21.7 Venezuela n.a. 1.5 9.4 16.0 ! 13.3 Yugoslavia n.a. n.a. 1.5 12.2 14.3 17.61

Developed countries

Australia 11.4 12.6 18.0 15.7 14.3 13.5 13.5J Canada 7.3 12.7 10.7 12.0 16.5 17.8 22.6J France, F.R. 18.3 17.7 21.0 20.9 22.6 22.0 23.1: Germany 31.7 29.3 ! 28.8 29.9 27.8 27.4 27.01 Italy 29.4 36.7 36. 1 33.9 33. 7 36.8 35.5 United Kingdom 26.8 36.7 30,8 36.8 36.8 36.1 35.0 Japan 24.5 27.3 27. 1 28.6 36.0 33.0 _2.9 Norway 9.8 5.2 6.9 8.6 4.5 3.9 5.4 South Africa. n.a. 7.5 7.1 9.5 25.7 32.3 31.3 Switzerland 12.8 14.0 13.8 17.8 15.4 15.0 14.9 United States 20.6 ?1.2 18.2 25.6 26.2 29.5 28.0

Primary and secondary aluminium and direct use of scrap.

Source: GATT - from Metal Statistics, 1960-1970, 1965-1975, and 1974-1984 Matallgesellschaft AG - 35 - TABLE 6

WORLD PRODUCTION OF SEMI-MANUFACTURES AND CASTINGS, 1970-1984 (Thousand Metric Tons)

SEMI-MANUFACURES CASTINGS

1970 1973 1915 1919 1980 1981 1982 1983 198.4 1970 1973 1975 1979 1980 1981 1982 1983 1984

kid 6.40 9,37 7,379 0,768 9822 9,6 08117l 222 I ,S ,4 ~ ,0 ,6

Dweveoping countries, 69 109 293 439 465 408 455 462 - 44 59 65 51 58 58 63 of whch:

Irazil n. 1. 0.1. 184 263 2PA 232 266 271 n.a. n.a. n.a3. 44 59 65 51 58 58 63 1uolai 69 85 89 146 155 152 168 169 152 - - - - Other - 24 20 30 26 24 21 22 18 --

Developed countries, 6,0 9,230 7,8 10,329 9,772 9 414 20 10409 1,764 2,282 1,789 2,485 217 2,0 2,0 of w4hich:

Amstra1i;2 112 1.56 140 215 229 238 215 231 255 -- - JAutria 58 66! 68j 95 88 86 88 101 11.5 12 10 8 12 13 14 1', 18 19 Canada 211 219 249 0.. 03. n. a. n.a. n a. i.s.. 30 40 32 n.a. n. . n.a. nas. l.A. na.s fIG 1,733 2.208 1,915 2n,843 2,733 2,578 2,795 3,070 3,051 699 806 660 907 892 819 812 853 n.a. 1eIgium-Ltuxezbourg 165 225 194 260 234 2 t& 250 773 295 17 20 14 10 11 10 10 10 10 Denmark 15 4 3 8 8 10 *ii 15 11 ------Frinre 319 389 357 548 533 546 573 631 586 143 181 154 198 192 173 192 199 i74 Gerzany 554 711 665 1,044 1,018 934A 1,008 1,131 1,145 24,2 254 198 312 310 300 293 306 331 GreeCe 19 28 15 36 n.a. M~. 79 93 94 ------Italy 246 296 241 422 469 425 438 459 460 162 196 167 259 268 245 231 252 n.s. INetherlands 15 96 78 107 85 101 92 114 116 - 8 6 9 9 8 8 9 11 United Kingdom 340 399 352 418 386 328 244 354 367 135 147 121 119 102 83 78 77 77 Finland 18 22 21 22 22 30 29 27 22 - 4 4 5 5 5 5 5 5 JAWa 690 1,273 951 1,554 1,429 1,548 1,615 1,829 1,867 335 416 361 555 639 664 639 660 725 Norway 69 97 76 170 119 112 122 149 135 - 2 4 5 4 4 4 4 Spain 86 137 173 217 241 212 194 200 166 - 60 67 70 67 53 53 62 63 %itden 79 99 80 102 1011 79 85 99 89 - 24 28. 26 25 23 "1 25 27 Svitzerlar4 88 106 83 119 120 109 109 127 10 5 3 3 3 3 4 3 a~ a& United Staies 3,257 4,827 3,324 5,042 4,690 4,635 4,091 4,775 4,991 683 919 624 903 728 715 593 680 801

bo1ied products only, Excludes tubes from 1982 onwards. includes upagesium castings. 4 Data smsrce for 1910 - Yta1 Bulletin Handbook, 7th Editiou, 19ik - Metal Bulletin Ltd., London.

Source: WorldMetal Statistics Yearbook 1985 - World Bureau of Metal Statistics, London - 36 -

EEC with a share of 19.3 per cent (of which the Federal Republic of Germany accounted for 7.2 per cent, France 3.6 per cent, Italy 2.8 per cent, the United Kingdom 2.3 per cent and Belgium-Luxembourg 1.9 per cent), and Japan with a share of 11 per cent of world aluminium consumption in 1984. The share of developing countries, while still small, has increased substantially since the 1960s. In 1984, developing countries, which produced almost 17 per cent of world primary aluminium, consumed less than 13 per cent. Principal consumers among developing countries were India, Brazil and Yugoslavia sharing 1.9 per cent, 1.8 per cent and 1 per cent, respectively, of world consumption in that year. In 1984, the estimated consumption of primary aluminium by centrally-planned economies was over 3 million tons or about 20 per cent of world primary aluminium consumption. The Soviet Union was the world's second largest single consumer with a share of il.3 per cent of world consumption in 1984. In the same year, the consumption of primary aluminium by the People's Republic of China was estimated at 4 per cent of world consumption. Chart VI illustrates country shares of world primary aluminium consumption in 1960 and 1984. 52. Until 1980, world aluminium consumption grew faster than that of other major metals. The higher growth rate of aluminium was due to the substitution of aluminium for other materials in a wide range of end uses, because of its favourable price levels as well as physical properties. Between 1960 and 1974, consumption of primary aluminium increased from about 4.2 million tons to slightly over 14 million tons at an average annual growth rate of 9 per cent. The increase in energy prices in 1973 affected the price of aluminium and in 1975 (a recession year) world primary aluminium consumption fell to 11.5 million tons, about 19 per cent below the 1.974 level. It recovered in the following years reaching a peak of almost 16 million tons in 1979. However, the growth rate declined to 3.2 per cent between 1975 to 1979. The combination of several factors, including the saturation of traditional markets, the 1981-82 world economic recession, the rise in energy costs and the competition from new products such as plastics, polymers and composites led to a contraction in the world aluminium consumption for the three years after 1979. Despite increasing in the next two years the average annual growth rate of world consumption fell to -0.1 per cent between 1979 to 1984. In 1984, world consumption of primary aluminium amounting to 15.9 million tons was about 100,000 tons below the 1979 level. 53. Table 7, indicating country volumes and shares of world primary aluminium consumption, shows trends in consumption patterns from 1960 to 1984. Although, as mentioned above, developed countries are major consumers of aluminium, their share of world consumption decreased from 74 per cent in 1960 to 67 per cent in 1984. In volume terms, their consumption reached the highest level of over 11 million tons in 1979, 3.6 times more than in 1960. Their average annual growth rate in this - 37 -

CHART VI - CONSUMPTION OF PRIMARY ALUMINIUM BY COUNTRY 1 9 6 0 1 9 8 4 (4,166 thousand metric tons) (15,897 thousand metric tons)

USA 37.0% 19.3% 29.9%

EEC 25.6%

11.37. Other 22.2% Japn~~~-~~ ther USSR 11.0% 29.9% 15.2%

CHART VII - CONSUMPTION OF PRIMARY ALUMINIUM BY USE, 1984'

Building and construction 21.5% Transportation

Mechanical Packaging and) engineering containers 6.0% 19.9% MI .1. appliances 7.1% Metal industries Electrical engineering and miscellaneous 12.1% 9.4% Figures based on aluminium consumption or shipments in the following countries: Austria, the EEC (Belgium-Luxembourg, France, Germany F.R., Italy, the Netherlands, Spain, the United Kingdom), Japan, Switzerland. and the United States. Source: GATT, based on Metal Statistics, Mettallgesellschaft AG 38

TABLE 7 WORLD CONSUPTION 0F PRIMARY ALUMINIUM, 1960-1984

In the-ud.rd of metr1 toni A. a p.rc.ntgae of world oupto

1965 1970 1973 1196 9701 11979 1980. 191 1.98212921 1984 1960 14. 234 120002O00.C L00., a00.0 100.01100.0 100.0 100.01 100.0 j1 U1.3 1.641 1 I L0I. A9$O iL7-I02 11731 1.099 2.041 3.7 5.2 .4 6 1. 10.3 11. 11.7 1.1- 12.-3 10.8

73 ISI 43 so '7 0.3 0.5 02! 0.4 0.4 0.4 0.!I 0.6 Argeattm 01 36 31 73 51 0.2 kh3ralo ,0 .11 12 21 20 L1 0.1 0.2 0.: L0.1 6 Irmmil S3 14 13O 217 264 267 271 289 L0.1 1.8 2.0 1.1 1.8 I20 261 ii 11 17 27 24 28. 25 ie 0.1 0.2 01. L0.2 0. 0.2 0.2 O.: 0.10. 14 0. 0. 0.2 0.1 0.2 0.1 9 22 21 16 14 13 13 O.: 0.3I 1.2 0.1 40 0.1 0.4 0.l 0.8 Coool 9.. 13 SC 58 67 75 0.-1 0021 0.2 0.2 32 13 13 22 25 30 23 321 13 ;. 9.2 02 0.1 0.2 0.:1 0.1 Ind116 23 162 141 11.5 212 234 P 220 219, 210, 11 1.6 1.2 1.7 1.4 1.9 22C 0.1 0.1 1.3 0.2 3 14 3.4 33 35 0.8 0.3 0.2 0.2 27 is 24 17, 7 10, 0.1 0.2 0,1 151 - . 0.2 0.1, 0.7 0.4 Lo 23 33 G8 101 100, 0.1 0.2 .1. 0.1 0.32 0.1 0.1 12 13 10 14 11. 14 10 0.1 0.1 0.I 0.2 0.2 0.2 0.1 Pidoolppi 15 36. 34 94 1041 97 120 129 0.1I 0.1 0.. 0.3 0.4 0.7 017 0.; 71 3 1 10. 0.1 0.2 0.2 0.2 0.1 0.1 0.2 0.: 10 19 2I 14 26 15 23 11 32 0.1 0.1 0.2 0.3 0. 1 0.2 0.4 0.4 0.4 0.4 33 5' 51 106 91 71 0.3 0.2 0.47 0.7 0.7 1 0.1 0.1 0.1 0.1 11 320 17 15 96.0 0.1 061 0.2 0.13 0.21 45 4 3 0.1 0.2 97 1.0 1.0 0.7 Sf0.9 0.1 130 152 147 132 101 0.91 1.0 0.4 0.6 364 I"t I78 114 1327 0.2 0.3 0.2 0.46 0.6 0.5 0.0 0.9 10. 0.4 43 45 32 59 62. . 0.1 0.2 0.2 0.3 0.4 0.4I 0.4 60 4, 45 7,5 71 8 107 0.1 0.1 0.2 0.3 0.9 0.3 0.5 0.5 0.4 0.7 14 105 9 130 0. 0.2 0.3 0.6 0. 3 0.6, 0.6 3, 74 94 6 0.3 120 100 171 I"4 164 161 137 160 0., 1.0 0.3 1.1 1.I 1.1 1.1 1.0 1.0 Ihoco 1104 310 37 1.1 ' 5 85 100 208 126 139 0.3 0.3 0.3 0.4 0.5 0.4 0.7, 0.8 0,9 P99i-p-Lo .. b a.6 0.7 1212 7311 0.1 7.601 11.134 I9 749 10,65 74.3 72.9 75.0 64.3 66.6 16.0 1.0 0.3 167. LI7 15.1 0.31 60.21 224 1.2 1.1 264 146 132 220 228 2461 3 263 74.0 1.0 1.1, 1.07 2.4 87 84 11.2 102 105 12 222I 127 0.6 0.6 0.7 Pkn. no... O.7I 0.4 19.3 220 301 286 34 3797 240 0.91 2.7 2.2 2.2 2.5 679 736 2,92 3,04 19.1 20.3 18.1 18.0 0.7 0.7I 0. 687 2,037 2,486 2,1040 2.,95 2,.953 2, 2, 1 2'.8 19.3 105 178 242 213 254 272 301 2.. 1.7 1.4 2.5 Truhiln na.i XP 2233 0.6 2193 11 12 21 0.1I0.2. 0.1 1.13 1.50 3,99 S96 401 539 57 379 3.7 4.1 3.3 2.5 0.7 3.9 3.7 4.1 4.0 21. 670 701. 1.048 II I13 3.5 4,7 6.2 6.1 2.1 7.0 7.0C 7,0 19.3 429 1',042 2,000 1,005 1,1352 I.6 Ouplolaca 41 29 37 39 77 94 0.3 0.3 0.3 0.4 0. 0.3 0.6 18 SG 0.9 0.I Ochr I4 5 3 421 0.1 . 11.9 1,27 279 270 448 45.8 420 430 434 2~.4 2.9 2.6 2.4 3.0 2.8 2.9 2.0 334 033. 0.1 9' 100 104 09 7 107 0.3 0.5 0.7 0.7 0.7 0.5 0.4 0.6 33 77 723 S 1.5 1.5 3,3 418 344 326 323 370 5.3 4.0 3.5 2.4 3.7 2.3 2.3 2.1 0.2 2 0 409, 0.1 0.1 4019 19 27 23 24 21 23 17 0.2 0.2 0.2 0.1 0.2 0.6 3.7 347 1,3 70 2744* 5.1 4.2. 9.1 11.7 10.3 10.7 U.S 11.7 911. 1,412 1,171 1.803 1,,639 37.7 31.7 lo.; .2. 13 29 16 27 23 29 24 26I 32 0.1 0.1 0. 0.1 0.2 0.2 0.2 0.2 0.7 1,04 73 106 98 L1s ill 129 129 127 0.3 0.7 C.0 0.I 0.s 0.8 0.9 0.0 4 21 237 42 49 43 235 0.3 20.5 0.2 0.2 0.2 0.3 0.1 43 65 535 78 77 77 0.3 0.5 0.5 0.4 0.3 0.5 0.5S 0.4 lllm1aoR-:r 229 321 191 62.6 1.4 02 arSI6 1I" 225 243 202 223 217 1.0 1.3 1.3 1.9 1.7 1.4 1.4S Dorf 79 100O 103 7 a67 0.7 0.8 0.' 1.0 0.4 0.3 0.6 0.7 0.6 92 III ill 12 107 105 0.9 0.9 0.7 3.: 0.8 20.I 3.6 0.8 0.2 31 3"4'U 5,076 5,017 ,S 3.62.0 4,237 4,524 462.9 3.4.8 36.9 21.2. 29.1 21.4 23. 27. Oachorlno 14 317 0.: 11.3 2.051 2.46 7 210 3.211 3.163 3,175 .L214. 20.5 20.5 18.1 23.7 0. 2 20.7 21422.3 20.9 164 I0. 0s.9 16 33 48 s0 3 52.3 0.2, 0.2 0.2 0.2 0.3 0.4 0.3 0.2 225 370 380 550 560 2.8 620 630 0.2 1.4: 2.2 2.7 3.6 3. 64.71 4.0 4.0 107 140 125 100 124I 125 . 1.0 0.9 0.8 0.7 0.8 0.3 138 131 112. 0.0 133 LBO 220 220 2227 218 2.2 1.5 1.3 1.2. 1515 1.4 1.4 7 440s 1.1 1112 92 13 13I 1i's 166 168 193 0.6 0.9 1.0 1.2 1,2 120 131. 270 1se 126 125 126 132 09 1.2 1.0 0.9 09 0. 0.0 1,440 .1,66I5 1,85 1,860 1,600 14. 23 10. 12.1 12.7 12. 12.0 11.3 2,230S 11 I7 26 37 2,8 70 13.j 0.3 ,050 0.1 0.2 0.2 0.3 0.3

'AuotrolL. . Oea..

IProb bly i- IW.do -econdar abo- IM

Ut tlwaI

t. l tatlt lti a, 1960.1970, 1965.1975, 1970-1990 and 1973-1983; AG - 39 -

period was 7 per cent. This growth rate was -0.9 per cent between 1979 to 1984 and the developed-country consumption in 1984 was 4 per cent below the 1979 level. As can be seen from Table 7, consumption trends among developed countries were not the same. In the period 1960 to 1984, the shares of world consumption of both, the United States and the EEC, declined from 37 per cent to 28.5 per cent and from 25.6 per cent to 19.3 per cent, respectively. The United States consumption peaked in 1974 reaching more than 5 million tons. It fell almost 2 million tons in 1975. After the recovery in the following years it declined again during 1981-82. In 1984 the United States primary aluminium consumption amounted to 4.5 million tons. The consumption of the EEC increased at 5.5 per cent annually until 1979. Since then it has fluctuated at around 3 million tons. Among the EEC member States, the major increase in aluminium consumption took place in the Federal Republic cf Germany. Its consumption rose fromt about 300,000 tons in 1960 to 1.1 million tons in 1984, representing more than one-third of the EEC total consumption in the latter year. In contrast, the consumption of the United Kingdom declined in the 1980s to the levels of the early 1960s. Japan also increased its share of world aluminium consumption from 3.6 per cent in 1960 to 11 per cent in 1984, raising its consumption in volume terms from 150,000 tons in 1960 to about 1.8 million tons in 1979 at an annual growth rate of almost 14 per cent. Since 1980, Japanese aluminium consumption has been affected by similar factors as consumption of other developed countries and in 1984 it was slightly over 1.7 million tons. Among other developed countries, substantial increases in consumption as well as in shares took place in the three major aluminium-producing countries - Australia, Norway and Spain.

54. In the period under consideration, primary aluminium consumption of developing countries rose from about 160,000 tons in 1960 to over 2 million tons in 1984 and their share of total consumption went up from 4 per cent to 13 per cent in the same years. Developing country consumption rose much faster than consumption of developed countries, at an estimated annual growth rate of 13 per cent until 1979, and at 4.4 per cent from 1980 to 1984. Principal consumers among developing countries are India, Brazil, Yugoslavia, Venezuela and the Republic of Korea. Nevertheless, developing country per capita consumption of 0.7 kg. in 1983 lagged well behind the consumption of 13.5 kg. of aluminium per inhabitant in developed countries. 55. Primary aluminium consumption of centrally-planned economies is estimated to have increased more than three times, from about 900,000 tons in 1960 to 3.2 million tons in 1984. Their share of total consumption, however, declined by two percentage points in the same period, to 20 per cent in 1984. The USSR remained the major consumer with about 60 per cent of the total consumption of centraIly-planned economies, but its share of world consumption decreased frQm 15.2 per cent in 1960 to 11.3 per cent in - 40 -

1984. After an average annual increase of 6.7 per cent until 1979, consumption of centrally-planned economies has since stagnated at around 3.2 million tons. The People's Republic of China's consumption is estimated to have increased from 90,000 tons in 1960 to 630,000 tons in 1984, and its share from 2.2 per cent to 4 per cent, respectively.

56. Table 8 and Chart VII show major uses of aluminium in 1984 established on the basis of data available for countries indicated in the Table. In 1984, the largest consumers of aluminium were the transportation and the building and construction sectors, taking about 24 per cent and 21.5 per cent of total consumption, respectively. The use of aluminium for packaging and containers has grown substantially and in 1984 this accounted for almost 20 per cent of total consumption. Other uses included electrical and mechanical engineering (9.4 per cent and 6 per cent in 1984, respectively), domestic and office appliances (7.1 per cent in 1984) and aluminium for miscellaneous uses such as chemicals, powder production and in the manufacture of iron and steel. Table 8 also shows that consumption patterns vary among countries, reflecting the differences in the industrial bases. Thus, for example, the transportation industry consumed almost one-third of the total 1984 aluminium consumption in France, the Federal Republic of Germany, Italy and Japan, while its share was only 20.5 per cent in the United States. In contrast, the use of aluminium in packaging was the largest in the United States accounting for more than 28 per cent of total United States consumption in 1984; the share of packaging in total alurtinium consumption was only 7.2 per cent in Japan and 1.5 per cent in the Netherlands. The major use of aluminium in these two countries was in the building and construction sectors. In these sectors the national variations in aluminium consumption are related to the traditional use of different construction materials.

57. In examining trends in aluminium consumption by uses over a longer time period, it can also be noted that the growth rates in aluminium uses varied considerably, influenced not only by cyclical changes but to a large extent by technological developments related to different uses. The position of the building and construction sector, which was traditionally the main user of aluminium products has been eroded in the recent years by growth in the transportation sector, as well as by a lower housing construction activity. The usage of aluminium in the construction sector has increased considerably as aluminium has replaced traditional construction materials such as wood, steel, bricks, etc., in many markets. Weight and technical considerations led to the expansion of aluminium consumption in the transportation sector. It is anticipated that consumption of aluminium by the transportation industries will continue to grow, although probably at a lower pace than in recent years. Cars have significantly decreased in size and weight in the past years and this trend is expected to continue. However, the reduction in weight of TABLE 8

CONSUMPTION OF ALUINIUM BY END-USES, 19841 (in percentages of total consumption)

I Total Belgium/ United 100X France Germany,F.R. Italy Netherlands Austria Switzerland United ILuxeourg Kingdom Japan Spain States transportation 23.9 6.6 31.9 31.4 31.3 7.9 13.7 15.8 29.4 24.2 7.7 20.5 Phanical. Engineering 6.0 2.0 5.0 7.8 8.5 7.9 7.0 5.5 5.4 3.1 16.6 5.6 Electrical Engineering 9.4 16.2 15.9 6.6 7.9 0.1 11.0 11.5 7.3 10.6 16.3 10.4 Building and Construction 21.5 29.2 11.3 15.9 22.9 34.3 20.4 21.0 28.9 30.4 22.9 19.9 Pacdmging and 19.9 16.4 9.9 10.5 11.4 1.5 14.8 8.0 conta ners 7.2 19.4 18.3 28.1

tic and office appliances 7.1 2.3 4.8 6.4 11.1 8.7 5.1 5.6 7.1 4.7 5.7 7.7 2Industriesl andea s2 12.1 27.6 21.3 21.4 6.9 39.6 28.0 32.5 16.2 5.2 13.5 7.8

Total ('000 uetric tons) 11,797.9 48.3 514.7 953.5 675.1 39.1 374.3 60.0 2,340.7 203.4 69.8 6,519.0

-Consumption of primary and secondary aluninium by end-uses, excluding exports of semi-manufactures. 2lncludes chemical industries and agricultural uses, powder consuming industries, iron and steel miscellaneous. industries (destructive uses), metal products and

Source: Metallgesel1schaft AG, Metallstatistik, 1974-1984 - 42 -

automobile vehicles for energy and raw material costs saving might have practical limits as to safety regulations. Thus with smaller cars using smaller components, the overall usage of aluminium may not grow by as much as before. Also, the increase in aluminium prices reflecting rising costs within the aluminium industry had reduced the competitiveness of aluminium against steel, zinc and plastics, its main competitors in the car industry in the past few years. Nonetheless, higher demand for aluminium as a substitute for heavier materials is expected in the production of public and commercial transport vehicles industry, railroad cars and ships. Aluminium is also expected to be a major material in the aerospace and in both civilian and military aircraft industries. However, the use of composite materials could reduce demand for aluminium in this industrial sector.

58. In the last twenty years, the use of aluminium for packaging and containers expanded very rapidly in many markets. The growth was especially significant in the United States due to the high growth rate in demand for aluminium beverage cans. The substitution of tinplate cans was accelerated by the development of the two-piece can, made from a disc of aluminium which is pressed into shape and a top fitted after filling. Although the market in the United States for aluminium beverage cans has almost reached the saturation limits, expansion possibilities for their use exist in other countries. However, in the future the competition from glass, plastics, steel and laminated paper might influence the demand for aluminium containers and packaging. The steel industry introduced several innovations such as light-weight, high-strength steel alloy, welded-seam cans in place of soldered cans (lead solder may be objected to on health grounds), tin-free steel (TFS) cans, and non-tin coated materials in order to re-conquer some of the aluminium beverage can market and to continue to dominate the food can market. Price is an important factor in this competition. Most new plants possess dual line can-making machinery and have the ability to switch from one type of can to another, using whichever material is cheaper. The recyclability combined with the organized collection of aluminium cans might give aluminium an overall advantage against other materials. Lightness, formability and non-toxicity encouraged the use of aluminium foil for frozen, pre-cooked or dehydrated foil-wrapped or retort pouch food packaging. However, the use of aluminium for ready-to-cook foods might decrease with the expanding use of microwave cooking using plastic-coated "ovenable" boards as aluminium is not suitable for this process. The use of aluminium in mechanical and electrical engineering and telecommunications has been affected by the slowdown in the growth in these sectors. Also, the substitution of copper wiring by aluminium slowed due to a narrowing of price differential and the introduction of fibre optics into telecommunications. However, the development of aluminium alloys for use in high-temperature applications, high-strength and high-temperature corrosive environments may maintain or increase demand for aluminium in - 43 -

mechanical and electrical industries. The aluminium industry has made a considerable effort to encourage the use of aluminium in domestic and office appliances. However, in the future, it might face serious competition from steel, plastics and polyvinyl chloride which can be used in place of aluminium in home and office appliances, recreational equipment and outdoor furniture. 59. Chart VIII illustrates world production and consumption of primary aluminium, as well as secondary aluminium production of the countries indicated in Table 4, from 1960 to 1984. This Chart shows the upward trend in production and consumption of primary aluminium and secondary production during this period. It also shows that until the early 1970s, primary aluminium supply and demand was fairly balanced. After 1973, the relatively stable balance between production and consumption of aluminium metal was disturbed due to the factors discussed earlier. 60. In 1985, world consumption of primary aluminium metal increased by 1.4 per cent to 16.25 million tons. While consumption of aluminium metal stagnated in Europe, it rose by about 3 per cent in Japan, the Republic of Korea, Taiwan and Turkey. It is also estimated to have increased in the USSR, the Republic of China and some other centrally-planned economy countries. In contrast it decreased about 2 per cent in the United States and some developing countries. Due to the slow growth in aluminium demand, many producers tended to reduce their output, and total production of aluminium metal fell more than 3 per cent to 15.43 million tons in 1985. Output reductions generally occurred in the higher cost locations (about 20 per cent in Japan, almost 15 per cent in the United States and more than 4 per cent in Europe). These cutbacks more than offset the expansion of aluminium production in other areas, notably Oceania (nearly 10 per cent), Latin America (over 6 per cent) and Canada (almost 5 per cent), and have led to consumption exceeding the supply by about 5 per cent in 1985. In contrast to primary aluminium production, the production of secondary aluminium metal in market-economy countries reached the highest level of 4,357 million tons in 1985. The major increase was in Japan, Spain and Taiwan.

Prices and stocks 61. As already mentioned, the spectacular growth of the aluminium industry until 1973 was based on its competitive pricing policy, and on aluminium's suitability for many different purposes because it could advantageously be substituted for other materials. Aluminium's price advantage ' -lped to win markets from other materials as relatively low prices and rrice stability of aluminium metal attracted many industrial consumers. In order to consolidate existing markets and to expand into new areas, producers tried to hold their prices down. The return on capital investment in the aluminium industry was among the lowest in the manufacturing industry. However, after 1973, increased energy and capital - 44 -

CHART VIII

WORLD PRODUCTION AND CONSUMPTION OF ALUMINIUM, 1960 - 1984 mi llion mi llion tons tons 16p 4 16

0 S CONSUMPTION OF 0 PRIMARY ALUMINIUM 14 0 0 / 0* o I /X *>0 12 *RODUCTION OF PRIMARY ALUMII0U0

10 1 10

PRODUCTION OF PRIMARY ALUMINIUM

8 8 0 , Siy

6 6

4 4

A,Ii'1 2 1111 2 11 RECOVERY FROA SCRAP * I I1 iiilT

0~ I11 - U -- 111111 0 i 9bU I 1970 1 1965 975 1980 1984

* Recovery from crap of countries indicated in Table 4 Source: GATT, based on Metal Statistics, MetalLgesellschaft AG - 45 -

costs together with higher bauxite taxes led to a substantial rise in aluminium prices. Presently, aluminium competes increasingly on the basis of the metal's properties rather than on its price competitiveness, The market structure of the aluminium industry has also changed since 1973. The number of independent and State-owned producers have increased, and an aluminium metal contract was introduced in the LME in 1978. This has reduced the importance of producer pricing in aluminium. 62. The discussion of aluminium prices involves several complications. There is insufficient information for estimating unit costs, pricing does not follow any set pattern, and discounts and premiums of unknown amounts have to be set against producers' prices. Furthermore, due to the high vertical integration in the industry, most of bauxite and alumina transactions are intra-company transfers. If aluminium metal prices are used as a base (price of aluminium metal = 100), a relative pricing structure for the industry will be as follows :

Bauxite ... 2-3 Alumina ... 13-16 Aluminium metal ... 100 Aluminium semi-manufactures Casts ... 145-155 Plates ... 195-205

Bauxite

63. Most of the bauxite is consumed by integrated enterprises or consortia producing bauxite, and only about 10 per cep& to 15 per cent of bauxite is estimated to be sold in the open market. Until the early 1970s, bauxite was sold under long-term contracts established usually for a period of twenty years, at fixed prices reviewed every two to five years. The energy crisis in 1973 and the advent of high inflation rates led to changes in bauxite priMng. The International Bauxite Association, which was founded in 1974 and has most of the bauxite-exporting countries outside the centrally-planned ecopgmies as its members, introduced a standard reference grade of bauxite and annually recommends a minimum price of bauxite to its member countries. Fixed-price contracts are usually for one year or less. The recommended minimum prices are not binding upon memberN and each producing country is free to determine its own pricing policy.

64. Another factor which had an impact on the level of bauxite prices was the introduction of levies and taxes after 1974 by some exporting countries in order to increase their declining revenues and encourage fulLher processing. However, these measures led to the increase in bauxite prices as well as to higher costs of primary aluminium. They, - 46 -

inter alia, also adversely affected production in the countries which imposed these taxes and contributed to investment being diverted from these countries to mostly Australia and Brazil.

65. Although there is no organized market for bauxite, spot sales are made. Prices depend on market conditions prevailing when the sale is made. With the exception of spot sales and some speciality grades and forms, there are no posted or listed prices for bauxite because of the variety of conditions affecting its value, the lack of a market for small volumes, and the fact that the bulk of world bauxite trade is either within integrated companies or through long-term agreement between buyers end sellers. Bauxite import unit values may be obtained from trade data such as customs records and/or international trade statistics, or may be estimated as a function of pro-forma costs of production. However, these sources cannot be considered totally reliable. Unit values from trade data, which generally reflect intra-company transfers, are usually established for their internal accounting and may reflect company tax and pricing strategies. Prices estimated as a function of assumed costs of production usually do not take current market conditions into account.

66. Table 9 and Chart IX show the estimated bauxite import unit values of Jamaican bauxite delivered to the United States coast for the period 1950 to 1984 in current and constant United States dollars. These prices are estimates calculated by the World Bank. Constant dollar prices are calculated by using the developed-country value (c.i.f.) 18dex of manufactured exports to developing countries as deflators. This information indicates that bauxite prices in current dollar terms remained at the same level until 1965. In 1966, they increased by almost 63 per cent. Subsequently, they again increased substantially in 1974 as a result of the rise in energy prices and the introduction of levies and taxes by major producing countries. Bauxite prices rose steadily as metal demand increased until 1980. Prices continued to weaken during 1981 to 1983 as a result of low aluminium demand during the world economic recession. Although demand for metal increased from mid-1983, bauxite demand and prices strengthened only in the first semester 1984. Bauxite constant dollar prices remained relatively stable until 1965 and then increased sharply in 1966. During 1966 to 1969 they remained close to the highest price level for the period 1950 to 1983. Subsequently, they declined in the following years, falling almost to their lowest level in 1973. In 1974, constant dollar prices rose again and attained the highest level in 1977. Since then, bauxite constant dollar prices have remained at a low level and in 1985 were about 24 per cent below the 1974 price level. Alumina

67. Like bauxite, most of the alumina is consumed by producers or their affiliates. The proportion of alumina consumed by these enterprises is - 47 -

TABLE 9 BAUXITE PRICES, 1950-1985 (US$/metric ton)

Estimated Jamaican Prices to the United States Year Current $ 1980 Constant $

1950 7.50 34.90 1951 7.50 29.40 1952 7.50 28.60 1953 7.50 29.90 1954 7.50 30.50 1955 7.50 29.80 1956 7.50 29.10 1957 7.50 27.90 1958 7.50 26.40 1959 7.50 27.80 1960 7.50 27.20 1961 7.50 27.00 1962 7.50 27.40 1963 7.50 27.30 1964 7.50 26.60 1965 7.50 26.40 1966 12.00 40.00 1967 12.00 39.50 1968 12.00 42. 10 1969 12.00 41.70 1970 12.00 37.90 1971 12.00 34.90 1972 12.00 31.80 1973 12.50 27. S0 1974 23.20 41.10 1975 25.30 39.50 1976 27.20 41.70 1977 30.80 43.60 1978 34.30 41.30 1979 36.60 39.60 1980 41.20 41.20 1981 40.00 39.80 1982 36.00 36.33 1983 34.70 35.92 1984 33.00 34.77 1985 30.00 31.28

Source: Commodity Trade and Price Trends, 1986 Edition, World Bank