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To: 2MAR$ who wrote (1050)	6/13/2001 1:41:55 PM
From: 2MAR$	Respond to of 26752

Brazil spreads energy rationing to smelters (UPDATE: Updates with details throughout) BRASILIA, June 13 (Reuters) - Brazil will extend energy rationing to the northern area, home to key aluminum smelters, from July with a 15 percent target for consumption cuts, lower than in most of the country, a top official said on Wednesday. ADVERTISEMENT Head of the government's anti-crisis task force, Pedro Parente, who has the rank of a minister, also said rationing in the north did not envisage surcharges or switch-offs for quota-busters, as in the rest of rationing-affected areas. But the limit on power usage could be raised and strict measures applied if the sparsely-populated region, which encompasses the Amazon rain forest and some adjacent poor scrubland states, did not meet the target next month, he said. Brazil imposed power rationing in the southeast, central west and northeast, aimed at cutting consumption by 20 percent on average from June 1 and until the end of November to avoid California-style blackouts in Latin America's largest country. Two years of droughts have triggered an acute energy crisis in Brazil, which is powered mainly by hydroelectric plants, following what experts say were years of underinvestment and poor planning in the electricity sector. Brazil's north has no energy shortage, but the authorities had to impose rationing there to help the northeast region, which is the most hard hit by the drought, officials said. ALUMINUM SMELTERS TO BE AFFECTED Aluminum companies in these three areas have to cut power usage by the maximum of 25 percent. Industry officials say power cuts for electricity-hungry aluminum plants mean a reduction of output in the same proportion. It was still unclear whether Brazil's largest aluminum smelters, Albras and Alumar, which are based in the region where rationing is coming now, will face a different quota than 15 percent. Officials there said before the announcement they were bracing for power cuts of up to 25 percent. Together, the two smelters produce more than a half of Brazil's primary aluminum and are major exporters. U.S.-based aluminum giant Alcoa (NYSE:AA - news) controls Alumar, which has an annualized capacity of 368,000 tonnes of primary aluminum. It sells part of its output to Alcoa's operations in southeast and northeast Brazil and to other domestic customers, but the bulk of its output is exported. ``Rationing at Alumar would certainly have an impact on export sales'', said one company source. Albras, controlled by local mining and metals producer Cia Vale do Rio Doce (CVRD) , currently produces 366,000 tonnes a year of primary aluminum, virtually all for export. Before the north became affected by rationing, industry officials estimated output falls to reach 13 percent of Brazil's aluminum output. Last year, Brazil produced 1.28 million tonnes of primary aluminum. Email this story - Most-emailed articles - Most-viewed articles --------------------------------------------------------------------------------