Consequences of fluctuating microscopic conductivity in mean-field electrodynamics of turbulent fluids are formulated and discussed. If the conductivity fluctuations are assumed to be uncorrelated with the velocity fluctuations then only the turbulence-originated magnetic diffusivity of the fluid is reduced and the decay time of a large-scale magnetic field or the cycle times of oscillating turbulent dynamo models are increased. If, however, the fluctuations of conductivity and flow in a certain well-defined direction are correlated, an additional diamagnetic pumping effect results, transporting the magnetic field in the opposite direction to the diffusivity flux vector. In the presence of global rotation, even for homogeneous turbulence fields, an alpha effect appears. If the characteristic values of the outer core of the Earth or the solar convection zone are applied, the dynamo number of the new alpha effect does not reach supercritical values to operate as an-dynamo but oscillating-dynamos with differential rotation are not excluded.