METALS Y2K - Asian Producers Play Down Worries

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Metals Y2K - Asian producers play down worries By James Regan

SYDNEY, Dec 14 (Reuters) - Asia's metal mining, smelting and refining industries are planning for business as usual January 1.

There's little evidence of stockpiling in case computer systems go haywire when confronted with the 2000 date and a cross-section of miners, smelters and resource analysts say they expect little, if any, disruption.

``We're not seeing much evidence of stockpiling at all,'' Bell Securities analyst Keith Goode said in Sydney.

Aluminium smelters are singled out for special scrutiny as a sudden power failure can cause electrolyte in production cells to solidify. Months of labour and huge expenditure are needed to bring output back on stream.

CHINA AND INDIA EYED

Even in China and India, where progress on Y2K issues is less clear, there appears to be little concern.

Some businesses in China and India depend little on computers, relying more on decades-old accounting and operating procedures that emphasise sharp pencils and strong backs.

In China, officials and traders say the country's large and varied metals industry probably will enter the year 2000 without major disruption.

No one can know the readiness of all the hundreds of smelters, both large and small, scattered throughout China, but companies and electricity suppliers have taken precautions.

``The smelter industry will be safe enough,'' Wang Jianxia, an official in the aluminium department at the China Nonferrous Trade Group Co (CNIEC) in Beijing, told Reuters recently.

EXTREME MEASURES

Still, some mines, smelters and refineries in the region have taken extreme measures to squash the millennium bug.

China has threatened to fire or throw in jail managers of big smelters who fail to protect ``state assets'' from infestation.

In Australia, some underground mines will be evacuated before the start of the next century.

In Japan, computer programmers at some of Japan's biggest mining houses will be on midnight guard for malfunctions as the year 2000 arrives.

Mining and metals industries in Asia, like their counterparts around the world, have spent millions of dollars inoculating themselves against the millennium bug, which some have claimed could throw production and distribution networks into chaos.

LITTLE EVIDENCE OF STOCKPILING

Concerns among producers and buyers that long-established trading channels might turn to spaghetti on January 1 have prompted rumours of a rush to hoard such industrial staples as aluminium, copper, zinc, nickel and tin.

``So far, we have seen little evidence of significant restocking in any of the base metals, although some companies do indicate a desire to bring January 2000 shipments forward into December 1999,'' said Macquarie Equities analyst Jim Lennon.

``We're ready for Y2K,'' said Geoffrey Ewing, corporate affairs spokesman for aluminium maker Comalco Ltd of Australia.

``We've spent A$10 million over the last three years becoming Y2K compliant, part of $60 million spent by our parent Rio Tinto,'' Ewing said.

Comalco runs an integrated operation - it mines bauxite, which it turns into alumina and finally aluminium.

TROUBLE-SHOOTING

Big companies have been troubleshooting with smaller suppliers and customers to iron out potential hot spots, some spending countless hours mapping contingency plans.

WMC Ltd, Australia's biggest integrated nickel producer, has held face-to-face interviews with more than 200 suppliers from a range of industries. It says it is satisfied most can manage any bug-related problems.

Still, WMC, which has suffered a spate of work-related accidents at its mines, is taking no chances.

``WMC plans to suspend underground mining operations and evacuate all personnel before the century transition,'' the company said in a statement.

GRAVEYARD SHIFT ON NEW YEAR'S EVE

Japanese executives are adhering to guidelines set out by the Ministry of International Trade and Industry.

Staff in charge of controlling computer systems for Nippon Mining & Metals Co Ltd will be on the job over December 31 and New Year's Day, while Mitsui Mining & Smelting Co Ltd has placed its senior executives on alert.

South Korea's non-ferrous metal refiners and state-run Supply Administration (SAROK) said stockpiles were being maintained at normal levels, but staff numbers were being boosted.

An official of China's State Bureau of Nonferrous Metals Industry said testing for Y2K compliance at the country's biggest smelters was completed by September.

China, which exports hundreds of thousands of tonnes of metal each year aims to ensure a smooth transition.

http://biz.yahoo.com/rf/991214/t.html

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-- LOON (blooney10@aol.com), December 14, 1999

Answers

"Some businesses in China and India depend little on computers, relying on... sharp pencils"

And where will they get those pencils from?

-- Servant (public_service@yahoo.com), December 14, 1999.


Thanks for reposting the "I,Pencil" link. That's a classic on the interconnectedness of modern life, and I had lost the link. For any who haven't read it... do so.

Key points above:

Aluminium smelters are singled out for special scrutiny as a sudden power failure can cause electrolyte in production cells to solidify. Months of labour and huge expenditure are needed to bring output back on stream.

[so... it doesn't matter if they are y2k compliant or only use pencils if they lose power.

Some businesses in China and India depend little on computers...

[uh... so what? Same is true of some businesses here too.]

``The smelter industry will be safe enough,'' Wang Jianxia, an official in the aluminium department at the China Nonferrous Trade Group Co (CNIEC) in Beijing, told Reuters recently.

[First the goal was "compliance", then "ready", now "safe enough". Ahh sooo.]

EXTREME MEASURES

China has threatened to fire or throw in jail managers of big smelters who fail to protect ``state assets'' from infestation.

[Gee.. why didn't Koskinen think of this. Just get a firing squad to elliminate that pesky millennium bug.]

Mining and metals industries in Asia, like their counterparts around the world, have spent millions of dollars inoculating themselves against the millennium bug, which some have claimed could throw production and distribution networks into chaos.

[Uh... so they've spent money. Have they solved the problem?]

China, which exports hundreds of thousands of tonnes of metal each year aims to ensure a smooth transition.

[By stocking up on pencils and jailing CEOs?]

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Take a look at a snipped from the U.S. Chamber of Commerce's THE YEAR 2000 PROBLEM AND THE GLOBAL TRADING SYSTEM

Minerals and Metals The United States, like many other countries, is also heavily dependent on imports for particular minerals and metals. For example, the United States is totally dependent on imports for its supplies of 12 mineral materials, including bauxite and alumina, columbium, natural graphite, manganese, and mica. More than half of the supply of 13 others comes from abroad, including platinum, tin, zinc, tungsten, and cobalt (see table 12). Temporary disruptions in the supply of some of these materials could affect automobile manufacturing (catalytic converters and pollution control systems), the petroleum and construction industries (drill bits), and the electronics sector (cathode ray tubes and electronic capacitors). The National Defense Stockpile contains quantities of scarce minerals to cover limited shortages, which can be released under a Presidential declaration of national emergency.

Mining is extremely high-tech. If the technology fails.....

-- Linda (lwmb@psln.com), December 14, 1999.


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