Venezuela aluminum production continues drop, iron ore up

jueves 3 de marzo de 2016 12:47 GYT

CARACAS, March 3 (Reuters) - Aluminum production in Venezuela continued to drop in 2015 though iron ore recovered slightly, the Ministry of Industry said in its annual report, after a year of labor conflicts, timid investment and a deep recession.

Venalum, Latin America's largest aluminum factory, had output of 90,795 metric tons of the metal last year, a 15 percent drop from 2014.

The ministry cited "low inventories of raw materials, supplies and spare parts, (and) intermittent availability of machinery and equipment."

In March last year, Venalum said it had been forced to reduce the purity of its products owing to financial difficulties. Last year also saw an increase in production costs.

Venalum has a capacity to produce 430,000 metric tons of aluminum annually and is 80 percent controlled by the Venezuelan state. The remainder is owned by a consortium of Japanese companies: Showa Denko, Kobe Steel, Sumitomo Chemical, Mitsubishi Materials y Marubeni .

Venalum used to sell 75 percent of its production to the United States, Europe and Japan. Shipments, however, have fallen since 2009.

The government has said it expects mining production to recover this year, but President Nicolas Maduro has asked the country's metals businesses, located in the south of the country, to reduce shipments to aid an energy savings plan.

Meanwhile, Alcasa, the country's other major aluminum producer, saw output 28,536 tons of liquid aluminum in 2015, a decline of 0.9 percent on the previous year and far from its capacity of 170,000 tons.

State-run Ferrominera, the country's largest iron ore producer, had output of 12 million tons in 2015, up 9 percent on the 11 million tons reported in 2014, one of its worst years.

However, the figure is still far from its capacity of 25 million tons.

Production at state company Sidor, the country's largest steelmaker, rose slightly in 2015 to reach 1.06 million tons of liquid steel, still far from its capacity of 5 million tons. (Reporting by Diego Ore; Writing by Girish Gupta; Editing by Thomas Brown)