Miners Facing Higher Costs

Alcoa- the first large cap company that reported Q3 earnings- was hurt by higher energy and raw-material costs although demand for aluminum in China offsets effect of weakening dollar. The WSJ said that Alcoa's results are a clear sign the aluminum industry is facing higher costs, especially for energy. Aluminum uses huge amounts of energy in the manufacturing process. Therefore, more aluminum makers are building smelters in areas where energy is relatively less expensive than Europe and North America, such as Iceland, Russia, China, and Middle East. Key ingredients in Aluminum are bauxite and alumina.