Business & Finance

By Compiled from wire service reports by Robert Kilborn and Ross Atkin

May 25, 2004

For the fourth time this year, Royal Dutch/Shell restated its oil and natural gas reserves, lowering them again because of a change in accounting procedures, the Financial Times reported. It said the reposting will show a new overall reduction of 4.47 billion barrels as accounting for reserves in Canada is shifted from a gross basis to the net basis used in the US. The company said that would have no effect on its cash flow. The energy industry giant's annual report, due for publication Friday - two months later than usual - will show proved reserves as of the end of last year were 14.3 billion barrels, the Financial Times said - or 10 years and two months worth of production.

Alcoa Inc., the aluminum giant, has reached agreement in principle to build a $1 billion smelter on the Caribbean island of Trinidad, The Wall Street Journal reported. It said Alcoa would own 60 percent of the completed facility, with the Port of Spain government taking a 40 percent stake. The company also is scheduled to break ground soon on another $1 billion smelter in Iceland. Meanwhile, Companhia Vale do Rio Doce of Brazil, the world's largest producer of iron ore, has been discussing construction of a $1 billion alumina plant with a Chinese partner. Alumina, processed from bauxite, is the powder from which aluminum is made. The plant would be built at Belem, Brazil, Bloomberg.com reported.

Possible strikes inched closer at 12 paper mills in eastern Canada as the world's largest maker of newsprint and the union representing 4,500 employees ended negotiations on a new contract still at odds over job security, pensions, and wage increases. The old pact between Abitibi Consolidated Inc. of Montreal and the Communications, Energy, and Paperworkers Union expired April 30. The union said it will hold strike votes at the mills in Ontario, Quebec, and Newfoundland over the next two weeks. The terms of a new contract, once it is agreed to, are expected to set the pace for all other negotiations this year in eastern Canada's huge paper industry.