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CONTENTS 1
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LEADER
2
NEWS SAFETY
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THE ALUMINA CHRONICLES
Volume 32 No. 5 – September/October 2019
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COVER
Editorial Editor: Nadine Bloxsome Tel: +44 (0) 1737 855115 nadinebloxsome@quartzltd.com
INDUSTRY NEWS
SPOTLIGHT ON IRAN
18 THE JOURNAL OF ALUMINIUM PRODUCTION AND PROCESSING
Advertisement Production
20 www.gillespiepowers.com
SPOTLIGHT ON: 23
Production Executive: Martin Lawrence
Iran
CRU: OPINION PIECE
Managing Director: Steve Diprose Chief Executive Officer: Paul Michael
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How we can achieve zero-emission aluminium smelters
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Sales
The global aluminium market
PRIMARY PRODUCTION
PACKAGING
ROLLING
Production Editor: Annie Baker
Sales Manager: Nathan Jupp nathanjupp@quartzltd.com Tel: +44 (0)1737 855027
Making safety a priority
the aluminium market
Our Newest Sidewell Installation
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ROLLING
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Cover picture courtesy of Gillespie & Powers, Inc.
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11
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Rethinking and redesigning cold rolling for aluminium
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Supporters of Aluminium International Today
How ASI certifications impact
Digitalisation case study
EUROPE 37
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Focusing on the downstream will save European SMEs
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PACKAGING ALUMINIUM INTERNATIONAL TODAY is published six times a year by Quartz Business Media Ltd, Quartz House, 20 Clarendon Road, Redhill, Surrey, RH1 1QX, UK. Tel: +44 (0) 1737 855000 Fax: +44 (0) 1737 855034 Email: aluminium@quartzltd.com Aluminium International Today (USO No; 022-344) is published bi-monthly by Quartz Business Ltd and distributed in the US by DSW, 75 Aberdeen Road, Emigsville, PA 17318-0437. Periodicals postage paid at Emigsville, PA. POSTMASTER: send address changes to Aluminium International c/o PO Box 437, Emigsville, PA 17318-0437. Printed in the UK by: Pensord, Tram Road, Pontlanfraith, Blackwood, Gwent, NP12 2YA, UK © Quartz Business Media Ltd 2019
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Delivering the total package
42
An airtight argument for aluminium screw caps
CYBERSECURITY 44
Maintaining a good reputation... even when under attack
TURKISH ALUMINIUM INDUSTRY 47
A brief review by TALSAD
BRAZING
SEARCH FOR ALUMINIUM INTERNATIONAL TODAY
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Brazing basics
FLUOSPAR FOCUS ISSN1475-455X
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AlF3: Fluospar supply - Is relief in sight? September/October 2019
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2 COMMENT
CIRCAL and REDUXA: New greener brands
Pack it in I set myself a challenge this month. That challenge was to only buy products that came in either aluminium, paper or glass packaging. I had to let glass play a part, because as a previous Editor of our sister publication ‘Glass International’ I still hold a flame for the material and am very in favour of its sustainable and clean properties. Unfortunately, within a few days I had to adjust the rules of the challenge slightly... While I swerved the unnecessarily wrapped broccoli in favour of its plastic-free friend, there were other elements of my shop that I instead tried to make more ‘sustainable’ choices with. I know that at least by making small changes we are all contributing to a more environmentally-friendly world, but it is still too hard as a consumer to make the right choices. Thankfully, the aluminium industry again seems like it is leading the way and I was very pleased to see the launch of a new aluminium bottled water brand hit the headlines recently. Hopefully it is just about changing people’s attitudes and knowing that because a product is not smothered in plastic, it is not more expensive and no different in quality. If anything, it should be promoted as being superior! This issue has a dedicated packaging feature, which highlights aluminium’s part to play here, as well as a number of regional overviews, a focus on safety and more. Enjoy! nadinebloxsome@quartzltd.com
Hydro is now making it easier for its customers to promote aluminium products that are made from recycled post-consumer scrap or primary metal from hydro-powered smelters. The two new greener brands CIRCAL and REDUXA are certified materials with details of CO2 footprint and fully traceability of the materials. “We are working hard across
our entire business to reduce our emissions and those of our customers. Through using renewable power and modern technology, Hydro can produce cleaner aluminium than ever before. We believe that as an industrial company we have the responsibility to help our customers on the path to a low-carbon future,” says Hydro’s President and CEO, Hilde Merete
Aasheim. Hydro REDUXA is a series of certified, low carbon aluminium with a maximum carbon footprint of 4.0kg CO2 per kg aluminium. Hydro CIRCAL is a range of quality aluminium made with a minimum of 75% recycled, post-consumer scrap. The higher the recycled content of post-consumer scrap, the lower the carbon footprint.
ELYSIS R&D Centre underway ELYSIS marked the start of construction on its Research and Development Center in Saguenay on Friday 16th August. Technical experts will continue to advance the breakthrough technology that eliminates all direct greenhouse gas emissions (GHG) from the aluminium smelting process. Representatives from the governments of Québec and Canada and senior leaders from ELYSIS, Alcoa and Rio Tinto attended the event at the planned facility, located within Rio Tinto’s Complexe Jonquière, the site of the Arvida smelter, Vaudreuil refinery and Arvida Research and Development Centre. The $50 million (CAD) construction project is expected to be fully operational in the second half of 2020, employing 25 technical experts.
Created thanks to a ground-breaking partnership between two global industry leaders, Alcoa and Rio Tinto, the ELYSIS joint venture is at the heart of a new revolutionary process to make aluminium. This disruptive process, supported in its devel-
opment by Apple, will eliminate all direct GHG emissions from the traditional aluminium process, and instead emit pure oxygen. The ELYSIS™ technology has the potential to considerably reduce the environmental footprint of the global aluminium industry.
Eco-Friendly aluminium bottled water brand launched Every bottle counts; at least that’s the idea behind Ever & Ever, a new line of purified water packaged in resealable 16 oz. aluminium bottles. Launched by Vita Coco parent company All Market, the product is now available in still and sparkling varieties at select retailers in New York City – via distribution by Big Geyser – on Amazon and at drinkeverandever.com for a suggested
retail price of $1.99 per bottle or $23.99 for a 12-pack. The launch of Ever & Ever comes as public concern over plastic waste, particularly from single-use products such as straws and bottles, has grown in recent years. According to
market research group Euromonitor, 500 billion plastic bottles are used around the globe each year. In response, brands in the category have adopted various changes – from committing to using recycled plastic to selling water in paper cartons – and, in recent months, the movement behind aluminium packaging in particular seems to have accelerated.
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Hydro & Audi: Joint commitment to sustainable aluminium
Hydro now supplies sustainable aluminium for the battery housing of the first fully electric model of the company. The material is processed and manufactured along the entire value chain in an environmentally conscious manner and under socially acceptable working conditions. This has been confirmed by the Aluminium Stewardship Initiative (ASI) with a “chain of custody” certificate. The ASI already
awarded Audi a certificate for the sustainable assembly of these aluminium components in October 2018. This means that the aluminium sheets processed in the battery housing of the Audi e-tron are now demonstrably produced in a responsible manner along the entire value chain, from the extraction of the bauxite raw material to the end product. The two partners pursue sustainability as an important goal in their corporate strategy and together want to reduce CO2 emissions from the use of aluminium. By 2025, Audi aims to reduce the CO2 footprint of its products throughout their lifecycle by about 30 percent compared with 2015. There is great potential in the use of sustainable and responsibly ex-
tracted resources. Certification by the ASI is the result of various workshops in which Audi and Hydro exchanged their expertise on effective measures for CO2 reduction. “We want to offer our customers completely CO2 neutral mobility by 2050 at the latest. To do that, we need a sustainable supply chain,” says Dr. Bernd Martens, Audi Board of Management Member for Procurement and IT. “We therefore seek dialogue with our partners and, together with them, want to significantly reduce CO2 emissions along the entire value chain.” In late 2018, Audi started a CO2 program in procurement and since then has already carried out more than 20 CO2 workshops with aluminium suppliers.
RUSAL and ELKA-Cable Company JV Commissioning of the factory’s second workshop and the launch of the main machinery enabled BCF to move from the production of semi-finished aluminium products to the production of cabling and wiring products with an aluminium alloy core. These products have the competitive advantage in Russia as currently there are no analogues being produced in the country. The aluminium alloy processing capacity of the production facility is 4,400 tonnes, all of which will be supplied by RUSAL. BCF plans to reach maximum output within three years. The facility will supply three
types of cabling and wiring products manufactured from aluminium alloys to the Russian and CIS markets, including oil submersible cables, self-supporting insulated wires and flexible wires for use in industrial facilities. In addition, the factory will continue to produce aluminium wires, strands and conductors necessary to produce other types of cabling products. ‘At its full production cycle, the facility will contribute to the region’s industrial potential. The advantage that BCF cabling and wiring products have is that there are currently no analogues on the domestic market, and there is already demand from the Russian
power grid, oil and oil-field service companies,’ - said RUSAL’s Head of New Projects Directorate, Alexey Arnautov. RUSAL and the ELKA-Cable Group signed an agreement for the production of cabling products and conductors in November 2016. The financing of the project is equal between the two partners, each of which owns a 50% equity stake. The total investment amounts to RUB 765 mln. This project was implemented as part of RUSAL’s programme of improving inefficient facilities in order to create new processing operations and competitive products with high added value.
EGA: Exports from Guinea begin Emirates Global Aluminium has announced the first exports of bauxite ore from Guinea Alumina Corporation (GAC), its mining project in the Republic of Guinea in West Africa. The first exports of bauxite ore from GAC mark the completion of EGA’s strategic expansion upstream in the aluminium value chain to create an integrated global aluminium giant. The GAC
project, and Al Taweelah alumina refinery where EGA began production in April, create new revenue streams for EGA and secure at competitive prices the raw materials that the UAE’s aluminium industry needs. EGA’s GAC project is one of the largest greenfield investments in Guinea in the last 40 years, and cost some $1.4 billion to develop. More than half the funds were
JOINT VENTURES Nalco to form JV with Midhani
According to reports, Government of India enterprise, Nalco, will create a JV with Mishra Dhatu Nigam for manufacturing of aluminium alloy plates and sheets. National Aluminium Company (Nalco) has inked a pact with Mishra Dhatu Nigam (Midhani) to incorporate a Joint Venture company (JVC) to set up high-end aluminium alloy plant for manufacturing of plates, sheets. The company and MIDHANI will initially subscribe for shares in the JVC in equal proportion of 50 per cent each. Exal and Ardagh form ‘Trivium’
Ardagh Group has announced that it has entered into an agreement to combine its Food & Specialty Metal Packaging business with Exal Corporation, a leading producer of aluminium containers, to form ‘Trivium Packaging’. The move will create one of the largest metal packaging companies in the world. Headquartered in the Netherlands, Trivium will operate 57 production facilities, principally across Europe and the Americas, employing approximately 7,800 people. Projected revenues and Adjusted EBITDA in the twelve months ended March 31, 2019 were $2.7 billion and $469 million respectively. The combination of the two businesses aims to combine Food & Specialty’s leading presence in Europe and North America, principally focused on tin-plate steel packaging, with Exal’s leadership in aluminium aerosol packaging in the Americas.
provided by the largest greenfield mining project financing ever in Guinea - a $750 million loan from development finance institutions, export credit agencies and international commercial banks. GAC is expected to make a direct, indirect and induced economic impact of some $700 million each year in Guinea once production is fully ramped-up, a 5.5 per cent boost to the national GDP.
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4 INDUSTRY NEWS
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Western Extrusions adding Almex billet casthouse Almex USA Inc. has announced its selection as the technology and equipment provider for the future casthouse of Western Extrusions Corporation of Carrollton, Texas, USA. Western is one of the leading independent aluminium extruders in North America and its Carrollton facility among the largest in America at a single site. Western Extrusions awarded Almex USA the order for a “Furnace to Finish” project scope for Western’s billet casting center. The supply scope includes two 110,000 lb capacity Ultra-Ul-
tra-Low NOx and energy efficient Regenerative Combustion Melting Furnaces, Almex’s patented LARS® molten metal degassing and purification system, Almex’s MEGA™ DC casting machine, and the complete casting water management system, along with facility design and all other peripheral casting line equipment required to produce high quality extrusion billet. The plant will be equipped with Almex’s latest generation of automation and control system, the CASTRIGHT® III, which integrates all process equipment to work seamlessly together and provides
an array of SCADA (Supervisory Control and Data Acquisition) features for plant shop supervisors, management, and Western’s Customers. Western Extrusions’ finished product line, focused primarily on 6xxx series of aluminium alloys such as 6063, 6061, 6005A, will be made from the billets cast using in-process generated “turnaround” scrap and other purchased recyclable materials; further enforcing the company’s commitment to sustainability and environmental consciousness.
JW Aluminum expansion underway According to reports, one of the top economic development investments in Berkeley County is inching closer to fully operating its $300 million expansion initiative it first announced in 2018. By spring 2020, JW Aluminum is anticipated to have its two newest buildings - a total of 220,000 square feet of additional space within the Mt. Holly Commerce Park - fully operational, accord-
ing to company officials, who last month updated the county’s business community about the largescale project. The expansion is expected to add 50 new jobs to the 388-member workface currently employed at the local plant - its largest U.S.based plant. As a whole, JW Aluminum boasts at least 800 employees across sites in four states.
Gold Medal marks the distinguished career of Prof. Geoff Scamans Innoval Technology is delighted to announce that its Chief Scientific Officer, Prof. Geoff Scamans, has been awarded the Gold Medal by The Institute of Materials, Minerals and Mining (IOM3) in their Annual Awards.
IOM3’s Gold Medal is a premier award presented to a company, team or individual who has made a significant contribution to the industrial application of materials. The awards were presented at a gala dinner in London on 11th July to mark IOM3’s 150th anniversary. Geoff is a very worthy winner of the Gold Medal. His remarkable record of internationally acclaimed, multidisciplinary research spans several decades and every element of the materials cycle. While he is perhaps best known for his pivotal work on surface engineering and corrosion mechanisms in aluminium alloys, work that remains the leading reference material on the subject to this day, he has also campaigned tirelessly for sustain-
able manufacturing and efficient use of materials. Through his work at Innoval Technology, Geoff has been responsible for over 20 successful collaborative research projects over the past decade. These projects span applications from transportation to construction, packaging, energy and defence. They have delivered major technological advances, including the development of high-performance alloys with excellent mechanical properties and structural integrity that can be fabricated using 100% recycled content. Everyone at Innoval Technology and Aluminium International Today would like to extend their warmest congratulations to Prof. Scamans.
2019/20 DIARY October 10 - 12 ALUEXPO* The ALUEXPO trade fair is a high-level gathering place for professionals, deal makers and experts in the aluminium industry. Held in Istanbul, Turkey. www.aluexpo.com
November 12 - 14 International Recycled Aluminium 2019* Bring stogether producers, processors, equipment suppliers and downstream end-users to capitalise on the long term growth period the industry has seen in recent years. Held in Hamburg, Germany www.metalbulletin.com/events/ international-recycled-aluminiumconference
12 - 15 Metal Expo’ 2019* The 25th international industrial exhibition, held in Moscow, Russia. www.metal-expo.ru
19 - 21 ARABAL* The Arab International Aluminium Conference (ARABAL) is the premium platform for the aluminium industry in the Arab world. Held in the Kingdom of Bahrain www.arabal.com
2020 May 19 - 21 ET’ 20* The ET Seminar is global in scope and appeal, attracting up to 1,500 industry professionals from more than 50 countries. Held in Florida, USA
www.aec.org 25 - 27
Future Aluminium Forum* The only aluminium event dedicated to the integration of Industry 4.0 technologies. Held in Québec City, Canada www.futurealuminiumforum.com *Pick up a free copy of Aluminium International Today at this event
For a full listing visit www. aluminiumtoday.com and click on Events Diary Aluminium International Today
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TOGETHER TOWARDS PERFORMANCE
ALUMINIUM Materials handling and lifting systems from rodding to the pots
Storage systems
Centrifugal blowers
Ship loaders/unloaders
Bath and carbon recycling plant systems
Dense/solid phase and other conveying systems Potfeed e.g. HyperDense Phase Systems (HDPSTM) Dosing devices
Pot process control systems Electrolysis handling equipment Carbon: rodding and anode handling systems; baking furnace lifting solutions
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6 SAFETY
Making safety a priority Alex Lowery* met with Abdulla Jassem bin Kalban** and Salman Abdulla*** to discuss the company’s safety priorities and culture of continuous improvement.
This is the fourth in a series of interviews on safety related topics with industry leaders. Abdulla Jassem bin Kalban, took the helm of EGA in 2014 and has since had a positive impact on safety not only within his own company but industry wide. Mr. Kalban joined DUBAL as a graduate trainee in 1985. His length of service affords him with a unique perspective of safety within his company and our industry as a whole. Mr. Kalban and EGA have taken an active leadership role in safety in the aluminium industry.
How are things going at EGA? This year is a very challenging year for all of us, not only EGA but also the rest of the industry. We are taking quite a lot of initiatives to weather the storm by reducing costs and generating more revenue. With these initiatives, we are planning on saving more than $500 million by 2023.
You have seen the slogan that we put out, “We are safety first and always”. That’s what we are driving and wish to engrave in the heart of every employee of EGA. Safety first and always. Not only at work but also on the road and also at home. Safety is the right thing to do. For you, for your colleagues and for your family.
How do you view safety? Safety always starts from the top. That is what I believe. It starts with the CEO. I joined Dubal [which merged with Emal to form EGA in 2014] in October 1985. I started as a trainee and for the first month I was doing housekeeping. I learned how our employees come from many different cultures, and how those cultures think about safety. It starts from the top and not the bottom. Safe production is always the main thing.
Was there a particular incident that formed your views on safety? I’ve been in this business for 34 years now. I spent eight years working on shift, meaning on the shop floor 80% of my time and 20% in an office. So I have seen incidents, which touch the heart. We can all always learn. Yesterday there was a big fire in a residential building in Dubai – nothing to do with EGA - and a fireman was killed. He was a very young guy, in his late twenties. The main reason
why he died was because he could not use his air properly because of his beard. [Alex asks about a full face mask like a scuba mask]. Salman comments, “They are very uncomfortable to wear and incredibly expensive. We discussed this issue at ExCo a few months ago and we are going to have a beard policy for the firemen and the people working in the carbon plant. There will be no exceptions. There will be a beard policy, if you work in those areas.” Abdulla comments, “I am sure when we apply this one we will see a few resignations taking place in the company. Because people are very proud of their beards and they do not want to shave. So we have to give them the choice. Safety or out.” Can you finish this sentence? Safety is important because… It is the right thing to do.
*Manager, Wise Chem **CEO, Emirates Global Aluminium (EGA), ***Executive Vice President, EGA September/October 2019
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What’s your view on the current state of environmental, health, and safety in the global aluminium industry? Things need to improve in terms of the industry’s leadership taking an active involvement. I started going to the IAI in 1999. At that time the leadership of IAI was very good and very involved in safety-related activities. We had all of the CEOs from that time (Alcoa, Pechiney, etc). The CEOs back then were interested in making things happen. Their interest was more than what I see today. Today when you sit in IAI most of the people are general managers or heads of department, not the CEOs. Reporting of incidents is not like it used to be. When incidents happened then, anywhere in the world, we would get updated quickly. So things need to improve. How has EHS at EGA evolved overtime your tenure? We have a culture of continuous improvement at EGA and this includes how we manage safety. The key change in recent years is that we integrated two companies to form EGA. Each company had its own safety culture, processes and procedures, so we did a lot of work to align and ensure we took the best from each company. We have also leveraged third parties like DuPont to review and update major safety management systems. Another key change is that we are broadening what we consider safety to be. One example is our increasing focus on mental health, but another is really expanding our focus on safety in our residential areas. We now have regular residential workshops where senior staff meet the residential employees to discuss safety concerns where they live, and also broader welfare issues. This has turned into a great additional forum to get candid feedback and generate discussion on safety issues with our employees.
at the Board. He takes more time than anyone else. A safe and successful maintenance turnaround requires months – or years – of planning how does EGA handle protecting outside contractors from hazards in your plants and let alone themselves? We do a lot of good things. First of all it is not only contractors but our own maintenance crew. We have maintenance activities that are daily, weekly, and monthly. But when we start with any contractor company, the first thing is when they bid for the job. Our supply department shows them our safety rules and regulations. That is the first threshold for us “can you comply with this?”. Our regulations are part of our contracts and are legally binding – we call it the green book. Contracting companies must have a safety officer with them. They may have to hire a safety officer. We test the person, so we can be sure they understand the languages, if he has the capability to translate what we tell him to his coworkers, and that he knows what the safety is about. Our employees must all speak English, but sometimes contractor workers do not speak English. The safety officer is the bridge between us and them. We make sure the workplace is safe. Our safety officer makes sure everything is in place, like the permit to work system, proper signage. We then give them the site to start on. But our safety supervisors keep up checks on them. They sometimes come in the morning, sometimes they come in the afternoon, before the end of work. They need to make sure. The contractors know they are being monitored. Can you talk about the challenges that EGA faces with workers who speak
multiple languages and literacy? Our language in EGA is English. It is mandatory. When we hire people as employees, our requirement is they must speak English. Sometimes there are slips, when someone seems better in our tests than they actually are. We have training sessions every morning, our toolbox talks that you have seen. Every day we take one safety subject and talk about it for 1015 minutes. The workers themselves talk about it. We use pictures and sometimes films on safety. Can you explain how EGA promotes safety to your workers? So, it starts from the shop floor, from the supervisors and their employees. We do a lot of safety meetings. First thing in the morning we have toolbox talks, and every week in operations we have safety meetings. We conduct town halls where we talk first thing about the safety and how important it is. I keep saying we are not in the business of hurting people. As more workers are approaching retirement age, how should the industry deal with that loss and train the next generation of aluminium workers? We do have some skill dilution in operations. We have a few things in place to mitigate this issue. One is planning, so that people who have the knowledge of operations, including safety knowledge, cascade this knowledge to the next generation. When people are nearing retirement we give incentives for this knowledge transfer. We do also retain people after retirement age. I have more than 70 people that are past retirement age but are still working as consultants here.
Can you explain the corporate structure at EGA, on why safety directly reports to you? Yes, safety has been reporting to me since I was a general manager. It followed me wherever I went. But I believe safety should report directly to the CEO, and that has been the case since I took this position. I think our EHS manager, Salman, does a fantastic job. The Executive Committee meets every morning, and it always starts with Salman. He reports what has happened with safety in the plants over the previous 24 hours. We discuss what we are going to do. The ExCo does weekly safety walkouts in the operations. Salman is also always first to report Aluminium International Today
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How has EGA dealt with minimising the interaction of moveable equipment and pedestrians? First of all it is about educating people, so conducting safety meetings every morning and everything else. But you have seen the layout of our casthouses, with separate lanes for walking and mobile equipment. We make sure that people do not leave their designated area. If you go into the potlines, you will see lanes on the right side and left side. People walk on the right and do not cross these lines. They know if they cross the line the cranes could hit them, or forklifts. How can our industry’s workers evolve from being consumers of safety education to producers in terms of promoting safety to their co-workers? We should not stop preaching about safety every day. But we also have a campaign, “Safety I Care”. The main objective for that campaign is to hit the hearts and minds of the people. Why should I be safe? If I am a safe guy what does this mean for me? How can I become a safe guy? The workers have to understand what safety means for them and for their family. We asked people
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why they care and we use it on posters, in films and other materials. “I care about Safety because of my family”, “I care about safety because of my daughter”, “because of my health”. This helps us get into people’s hearts so they start to think safety in everything they are doing. Salman comments, “Safety goes beyond just the plants. We used to have a lot of incidents in the residential area, lots of reports and lots of injuries in the bathroom and playing sports. So we engaged with the people living there, by asking, “You tell us what we should be doing for you”. By giving them the power to take charge of their safety the incidents have come down. We would be very happy to share the data with you, you’ll love it. In what specific areas of the company is EGA investing now to improve environmental health & safety? We are investing in our “Safety I Care” hearts and minds programme, and also in safety projects at the shop floor level. We are also investing in our safety team – so for example Salman is currently studying for his Doctorate focusing on cultural transformation, sponsored by EGA.
In terms of safety what are you most proud of within EGA? I’m not sure I would use the word ‘pride’ in connection with safety. The only acceptable goal is zero harm, and we have not achieved that. Our total recordable injury frequency rate is now significantly better than industry benchmarks, but people do still get hurt on our sites and that’s what we want to improve on. We need to stay constantly vigilant, and that’s why safety is always the first thing we discuss as a leadership team each morning. Will safety always be a priority in the future? The answer is yes Alex. The business today is evolving. Today if someone wants to do business with us it’s not just negotiations with sales. No, they come to our plants and audit us, a comprehensive audit on our systems. I want them to be satisfied. I want the customer to know EGA cares about safety. EGA cares about the environment and EGA has good processes. EGA looks after their people. And for EGA, we get a free audit on our systems.�
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Arconic, Tennessee Plant
The global aluminium market Earlier this year, Arconic Inc. announced an investment of approximately US $100 million to expand its hot mill capability and add downstream equipment capabilities to manufacture industrial and automotive aluminium products at its facility in Alcoa, Tennessee [Seen in top photo provided courtesy of Arconic Inc.] According to The Aluminum Association, this investment is part of more than $2.6 billion in commitments and investments by the aluminium industry in domestic manufacturing in the United States of America during the past five years. Much of this growth – at Arconic and at other aluminium businesses – is driven by growth in the automotive sector. There has been much discussion about the aluminium industry (and steel industry) in the past year and a half in the United States. In March of 2018, the Federal Government issued additional tariffs on aluminium and steel imports from a number of countries into the United States. While the additional tariffs were placed on imports from many countries, the overall focus was chiefly on one specific country – China. “Subsidised overcapacity [of the aluminium industry] in China continues Aluminium International Today
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to be a major problem and The Aluminum Association is calling for the United States government to address the issue as part of ongoing trade talks with China,” stated Mr. Matt Meenan, Senior Director of Public Affairs for The Aluminum Association. “A study earlier this year by the Organization for Economic Cooperation and Development [Measuring distortions in international markets: the aluminium value chain] documented massive subsidies for Chinese aluminium producers - $70 billion over the past five years. Fully 85 percent of the government support cited in the study went to five aluminum-producing firms in China. Meanwhile, while anti-dumping and countervailing duty action in the United States (on extrusions, foil and common alloy sheet) has limited Chinese aluminum imports to the United States, global exports of Chinese aluminium hit record levels last year.” Primary aluminium production in the United States has decreased dramatically in the past 20 years, according to statistics from The Aluminum Association: In 1998, there were 3,712,687 metric tons of primary aluminium produced in the United States; in 2017, that number was down to 740,884 metric tons.
That trend reversed in 2018 Production of primary aluminium increased to 896,652 metric tons in the United States in 2018, as detailed The Aluminum Association. If monthly totals for the first six months of 2019 continue through the rest of this year, primary aluminium production will be higher in 2019 as compared to 2017 and 2018. As the United States implemented the additional tariffs on aluminium and steel, a number of countries came to agreements with the United States regarding ways to mitigate or eliminate these additional tariffs. As of the writing of this news column, no such agreement has yet been reached between the United States and China. The initial additional tariffs have led to a large-scale trade war. The two main combatants – the United States and China. As one nation added additional tariffs to Product “A” imported into their country, the other nation added additional tariffs to Product “B” that was imported into their country. The additional tariffs have grown to encompass substantial portions of many industries – not just the aluminium and steel industries. The immediate future impact of this trade war on the aluminium industry in September/October 2019
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70
Estimated unreported
60
Oceania
50
South America North America
40
East Europe (inc. Russia)
30
West Europe GCC
20
China
10
Asia (Ex. China)
0 1990
1995
2000
2005
2010
2015
2018
Africa
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180 160
Recycled (New)
140 120 Million tonnes
Million tonnes primary aluminium
12 THE ALUMINA CHRONICLES
Recycled (Old)
100 80
Required Primary
60 40 20 0 2000 2005 2010 2015 2020 2025 2030 2035 2040
Growth of primary production
individual countries is uncertain, but longterm, the aluminium industry is still likely to see substantial growth globally. “Robust demand will continue for aluminium throughout the world,” stated Mr. Chris Bayliss, Deputy Secretary General of the International Aluminium Institute. “We forecast demand for primary aluminum will increase by 50% by 2040 as compared to demand in 2017.” Global demand in 2017 was 64 million tonnes of primary aluminium, according to the International Aluminium Institute. In 2040, global demand is projected to be 92 million tonnes of primary aluminium, according to the baseline projections from the International Aluminium Institute in August 2019. The transport sector is anticipated to be a key driver of the growth of the aluminium industry. “We anticipate continued demand for aluminium sheet and other types of aluminium to be used in electric cars in coming years,” explained Mr. Bayliss. “Many in the auto industry are focused on using light-weight aluminium to fabricate battery boxes and other items for electric cars. Light-weight aluminium is critical for energy efficiency of electric cars to compensate for the heavier batteries needed to power these vehicles.” In North America, recent trends show substantial growth in demand for aluminium in the United States and Canada. According to The Aluminum Association, demand for aluminium increased 45.1% from 2010 through 2017: “Demand for strong, lightweight, recyclable aluminium continues to grow for the 8th consecutive year.” The growth of the production of primary aluminium in the past 18 years is highlighted in the graph displayed in the upper left of this page. Note the substantial increase in production in China as well as the increase in production in the nations along the Persian Gulf. (This image provided courtesy of the International Aluminium Institute.) September/October 2019
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Primary continues to dominate supply
Segments of Aluminium Industry: As many in the aluminium industry understand, there are actually four key segments of the industry – segments that can affect individual nations differently. The first segment is the bauxite mining and alumina refining industry. Bauxite mining is located in the nations that have the natural resources that provide the key component needed for the production of primary aluminium. The second segment is the aluminium recycling industry. This segment can be located in almost any nation, but is typically a key focus in many of the nations that lack bauxite mines and alumina refining facilities. The International Aluminium Institute has estimated that “three-quarters of all aluminium [is] still in productive use: 1.3 billion tonnes produced since 1888, [with] one billion tonnes still in use.” The Aluminum Association detailed that this high level of recycling is “because it [aluminium] can be recycled over and over again.” The third segment is the primary aluminium industry. A number of the aluminium smelters are located in the nations that have low-cost energy sources to allow for economical production of primary aluminium. The fourth segment includes the fabrication industries that utilise aluminium as a key ingredient in their finished products. This segment is typically located in nations that have efficient manufacturing operations producing high-value products with aluminium and nations that have lower-cost manufacturing operations producing commodity-type products with aluminium. While the dynamics that affect each of these segments may vary, leaders within the aluminium industry anticipate tremendous growth in each of the four segments in the years ahead. One nation that will likely see continued growth is China. Both within the nation’s borders and through the activities of Chinese businesses in other countries that
have strong economic links with China. Looking to the future, China has been initiating and strengthening economic ties with a variety of nations through its Belt and Road Initiative. This government policy of China, first announced as “One Belt, One Road” in 2013, is designed to enhance infrastructure development in nations throughout the world through the leadership of China. “Aspects of the Belt and Road Initiative of China have an economic focus that impacts the aluminium industry,” stated Mr. Bayliss. Bauxite Mining and Alumina Refining Industry: Mr. Bayliss cited activities in Guinea as an example of the Belt and Road Initiative. According the United States Geological Survey, this African nation has the largest reserves of bauxite in the world. “The growth of the aluminium industry in places like Guinea is part of the strategic efforts of the Belt and Road Initiative,” explained Mr. Bayliss. “These activities will likely help drive business between specific companies.” “Guinea has become a major source of bauxite for the global aluminium market,” continued Mr. Bayliss. “The development of the bauxite mining resources in Guinea by businesses based in other nations – including, chiefly, China – has led to development of port facilities and transport infrastructures.” Global Industry Analysts, Inc. issued a statement indicating that “The production of bauxite and alumina is concentrated in a few countries. The top five countries, account for about 87% of global bauxite production. On the other hand, China, Australia, Brazil, India, and Russia together account for about 85% of global production of alumina…The wide discrepancies in the production and consumption of both bauxite and alumina have resulted in a large international trade. Traditional bauxite mining hubs such as Australia and Brazil export both bauxite as well as alumina.” Global Aluminium International Today
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14 THE ALUMINA CHRONICLES
Million tonnes
180
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160
Other
140 120
Consumer durables Machinery & equipment
100
Electrical
80
Packaging
60 40
Building & construction
20 0
Transport 2000 2005 2010 2015 2020 2025 2030 2035 2040 Segment semis demand
Industry Analysts, Inc. is a leading off-theshelf market research publisher. The United States Geological Survey reported that Australia, Brazil, China, Guinea, and India were the top five producers of bauxite in 2018, while Australia, Brazil, China, India, and Russia were the top five producers of alumina in 2018. The International Aluminium Institute has estimated that demand for bauxite will increase by 50% by 2040 as compared to demand for bauxite in 2017. Aluminium Recycling Industry: The second segment – focused on aluminium recycling – is a key source for the production of new primary aluminium. Several nations have made recycling of the metal critical to their long-term industrial base. Japan is one such nation “Japan’s primary aluminium industry largely collapsed during the energy crisis in the 1970’s, but Japan has a welldeveloped aluminium recycling industry that meets demand in addition to their import of primary aluminium,” said Mr. Bayliss. “Japan has a sophisticated closed loop recycling industry that allows for better sorting for aluminium recycling.” Mr. Bayliss explained that “In nations with higher energy costs but with higher scrap availability, recycling of aluminium can produce substantial quantities of aluminium that can be used to manufacture new products.” Like Japan, a number of European nations have put a focus on the recycling of aluminium products. This focus is partly because there are few places in Europe that have natural deposits of bauxite. “Raw bauxite is only found in limited places in Europe, including in Greece and Turkey,” detailed Mr. Bayliss. “In Europe, the aluminium recycling market has been increasingly important to the overall aluminium market,” continued Mr. Bayliss. “There has been a shift to incorporate better and higher September/October 2019
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quality scrap aluminium into the overall aluminium recycling market. The higher quality recycled aluminium is then being utilised in the manufacturing process of new high-quality aluminium products.” In North America, The Aluminum Association has reported that recycling of aluminium is a critical component of the aluminium industry in that region: “Used beverage container [beverage cans, for example] recycling is the most readily recognised of the recycling programs. Aluminum is also recycled at the end of life from products such as cars and building parts. Window frames, wire, tubing, and electronics are additional examples of aluminum that is recycled at the end of life.” The International Aluminium Institute has projected that primary aluminium will continue to dominate the supply of aluminium through 2040, as seen in the graph displayed in the upper right of previous page. (Image courtesy of the International Aluminium Institute.) Primary Aluminium Industry: Smelters that produce primary aluminium are located in specific types of locales throughout the world. In years past, smelters were located in close proximity to businesses that used primary aluminium to fabricate products with aluminium. The energy crisis in the 1970’s changed much of that dynamic. “The primary aluminium industry grew substantially in the years after World War II in the United States, France, the United Kingdom, Japan, and other similar nations,” stated Mr. Bayliss. “Investment in primary aluminium production in many countries stopped after the energy crisis in the 1970’s,” explained Mr. Bayliss. “What had been economical in prior years was no longer viable with higher energy costs.” “Primary aluminium production works best in locations with low energy costs and long term availability of competitively priced electricity,” reported Mr. Bayliss. “As energy costs increase, the economics
of an aluminium smelter become more difficult to sustain operations.” Some of the nations with aluminium smelting operations have focused their efforts on an export market philosophy. “The Canadian primary aluminium industry is based on exporting product,” detailed Mr. Bayliss. “Russia and the United Arab Emirates have developed their aluminium industries based on a similar export basis. All three countries have available energy resources as compared to other nations.” “About 50% of the primary aluminium smelters have captive power resources globally,” said Mr. Bayliss. “Those areas that are dependent on the open energy markets face difficulties because of volatility of energy prices.” “Iceland and the Gulf nations utilised their low energy costs to encourage the development of a primary aluminium industry to help diversify their economies,” related Mr. Bayliss. “Iceland wanted to diversify away from the fishing industry, while the Gulf nations wanted to diversify away from hydrocarbons.” “The United Arab Emirates and other Gulf nations have significantly invested to help expand their primary aluminium industry,” continued Mr. Bayliss. “Bahrain has a healthy downstream industry; the United Arab Emirates and Saudi Arabia are integrating upstream.” While Mr. Bayliss confirmed that “China today is a higher cost energy market,” he stated that “China has made a concerted effort to close aluminium smelters that were contributing to air pollution through a variety of incentives by the government. The nation is replacing older smelters, some after only 15 years of operations. Chinese businesses then have used modular construction techniques to replace capacity within its primary aluminium industry.” “In comparison, some of the aluminium smelters in operation in older producing regions today are up to 50 to 70 years old,” explained Mr. Bayliss. “The aluminium smelters in the United States are generally smaller operations as compared to some of the aluminium smelters operating in China and the UAE,” continued Mr. Bayliss. The International Aluminium Institute also notes the potential for growth in the smelting of aluminium in Russia. “Russia has the potential to grow a larger primary aluminium industry because of its hydro power potential in Russia’s Siberian region,” said Mr. Bayliss. Not all nations and not all businesses are focused on future growth of the primary aluminium industry. “Part of the supply dilemma in the primary aluminium industry is the shortAluminium International Today
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16 THE ALUMINA CHRONICLES
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“Fabricators in those two nations will have to look elsewhere for additional units of primary aluminium.” The International Aluminium Institute has projected substantial growth in demand for aluminium through 2040, as seen in the graph displayed in the upper left of the previous page. (Image courtesy of the International Aluminium Institute.) Aluminium Fabrication Industry: Other nations have strived to utilise all of the primary aluminium produced within their borders in fabricating new products composed of aluminium.
In October 2018, Hydro held a groundbreaking ceremony for a US $100 million investment to its manufacturing facility, seen in the aerial photograph above, in Cressona, Pennsylvania, according to The Aluminum Association. The investment was designed to add “a new 96,000 square foot structure that will house equipment dedicated to producing aluminium for the automotive market, upgrade existing facilities’ infrastructure, and modernise equipment.” (This image provided courtesy of Hydro.)
term focus of many businesses,” related Mr. Bayliss. “Some of the existing smelting facilities are coming to the end of their industrial lives, while some folks in the industry are trying to shore up their existing markets rather than investing in new facilities.” “In the 1970’s, there were substantial investments in construction of aluminium smelters in both Brazil and South Africa,” reported Mr. Bayless. “These countries were able to use the expansion of the aluminium industry to create jobs and allow development of their energy grids. In Brazil, hydro power helped enable the growth of aluminium smelters. In South Africa, energy was supplied through coalfired stations.” “In recent years, though, investment has waned in energy resources in these two nations,” stated Mr. Bayliss. “The aluminium industry is being priced out because of the cost of energy and increasing demands from other consumers.” Beyond Brazil and South Africa, similar situations have occurred in North America
and Europe. “When an aluminium smelter closes,” said Mr. Bayliss, “rarely do replacement smelters open in the United States or in Europe.” “Quick fixes are not sustainable in the primary aluminium industry,” continued Mr. Bayliss. “Once the primary aluminium industry has died in a nation, it rarely comes back without significant change to their energy systems and availability.” The aluminium industry has been in transition for some time. “While some of the pricing within the aluminium industry is based on integrated operations, increasingly the aluminium industry has separate pricing for bauxite, alumina, and primary aluminium,” detailed Mr. Bayliss. The International Aluminium Institute has projected that manufacturers in North America will need to seek sources of primary aluminium elsewhere. “There is not sufficient primary aluminium production available for the future needs in the United States and Canada,” reported Mr. Bayliss.
China is one of those nations “The demand in China for primary aluminium production is being matched by the supply of aluminium produced in the country’s aluminium smelters,” stated Mr. Bayliss. “While primary aluminium domestic supply and demand in China is equalised, there is excess supply of semi-fabricated and fabricated products. Those excess products are then exported around the world from China.” “Overall, it is estimated that 35% of aluminium products fabricated in China are exported,” said Mr. Bayliss. “Some of these exports include iPhones and wheels, among other products that use aluminium.” Measuring distortions in international markets: the aluminium value chain, a report issued earlier this year by the Organization for Economic Cooperation and Development, provided some context for the situation in China: “Direct support at the smelting stage is important, but trade measures also matter. China’s export taxes on primary aluminium, as well as its incomplete VAT rebates on exports of certain aluminium products, have served to discourage exports of primary aluminium and encourage production (and export) of semis and fabricated articles of aluminium. Access to cheap inputs has enabled Chinese producers of semis to expand production and compete in global markets at lower cost.” “Chinese production of primary aluminium is anticipated to peak by 2030,” explained Mr. Bayliss. “There is some slowing down in demand for primary aluminium within China due to a comparable slowdown in the building and construction industry.” �
Do you have questions about the aluminium industry? Governmental regulations? Company operations? Your questions may be used in a future news column. Contact Richard McDonough at aluminachronicles@gmail.com. © 2019 Richard McDonough
September/October 2019
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How we can achieve zero-emission aluminium smelters By Hans Erik Vatne* Using renewable energy as the source of the electricity used in aluminium smelters is the best way to improve the carbon footprint of the primary aluminium the smelters produce. By far. But eliminating the greenhouse gas emissions from this aluminium production would bring us closer to zero-emission smelters. I think this is possible. Power generation represents the biggest way of improving the sustainability profile of aluminium. Best for the environment are hydropower-based aluminium smelters. Coal-based plants are the worst, and unfortunately, these outnumber the good ones. Still, all can improve, because all these smelters have the electrolysis process in common. Granted, direct emissions from electrolysis are on average only about onetenth of those from the energy source, but they are significant. So how can we eliminate these direct emissions and get closer to the zeroemission aluminium smelter? Using inert anodes and aluminium chloride process Lately, there has been a renewed interest in inert anodes. It is almost ironic that even back in Hall’s original patent for the HallHeroult electrolysis process from 1886, it is mentioned that inert anodes should be possible to use in the process within a rather short time. That “short” time has proven to be rather long. The industry has spent billions on research and development and the testing of inert anodes over the last decades, but no solution exists. It is still regarded as one of the options though, toward lowering emissions from production. Another is a chloride process in which the alumina is converted to an aluminium chloride that can readily be processed by electrolysis. The chlorination needs carbon, but the carbon and the chlorine might be recycled in a closed loop.
New technologies including biocarbon use and carbon dioxide capture Those are the most obvious new technologies. At the same time, we need to be open to the possibility that there may be other ground-breaking technologies still not identified, that can reduce the direct emissions from aluminium production and help us achieve our sustainability goals. Other alternatives are to use biocarbon in the anodes or to capture the CO2 and either utilise it for products or store it safely. The advantage of these two solutions is that existing Hall-Heroult smelters can still be used. More collaboration in aluminium industry is a key factor As long as the solutions are so unclear, it is important that the aluminium industry follows several paths to reduce or eliminate its direct CO2 emissions. There might not be a single “one size fits all solution” but a variety of solutions depending on local conditions of each smelter. I strongly support and promote the trend of more collaboration within the aluminium industry. Tech development is so fast that it is difficult to be in the front in all areas, and we need to remember that other materials are our main competitors and not our peers. If we can develop technology and solutions together with good suppliers, then the costs of these will come down and ensure implementation. The competing
factor in the aluminium world will then be how good we are at implementing and using these new technology elements for the production of low-carbon metal. Zero-emission aluminium smelters in future How soon will we see a zero-emission aluminium smelter? This is hard to say, but it will likely require years of research, followed by a demonstrator (typically a handful of production cells) and a proper pilot working under industrial conditions (comparable to Hydro’s Karmøy technology pilot) before anyone is ready to accept the risk of being the first to invest in a full-scale plant. Interested in learning more? If you are interested in learning more about using aluminium solutions and lowcarbon products for your product designs, then contact Hydro and we will put you in touch with the right expert. � Contact www.shapesbyhydro.com
*Hans Erik is a civil engineer (physics) and has a PhD in metallurgy from the Norwegian University of Science and Technology in Trondheim. He has spent his entire working career with Hydro, now serving as the company’s chief technology officer. September/October 2019
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20 PRIMARY PRODUCTION
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Rio Tinto R&D Centre:
The link between innovation and industrial application September/October 2019
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PRIMARY PRODUCTION 21 5
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By Nadine Bloxsome* During a visit to Quebec in March earlier this year, I was lucky enough to take some time to visit the Arvida Research & Development Centre, located next to one of the largest industrial areas of aluminium production in the world. Founded in 1946, the Centre has been established in Quebec for more than 70 years and is part of the aluminium product group of Rio Tinto. Over the years it has developed a strong network of partners and collaborative R&D programs. The focus of the Centre is on productivity increase and environmental knowledge to deliver the best solutions for sustainable growth including: � � � � � � �
Creep production capacity Use low cost raw materials Reduce the footprint of activities Centralise data management Turn waste into valuable products Increase energy efficiency and reduce GHG emission Optimise scrubbing process
On a tour of the facility, I was able to view first-hand the small-scale casting unit that replicates industrial processes.
“We are able to cast ingots in small sizes to produce test versions of our new alloys, in order to validate their performance with customers before the transfer to a larger scale in our casting centres,” said Claude Dupuis, Casting Technology Director, Aluminium Product Group, Rio Tinto. Current projects The teams are presently working on product development, particularly for the automotive industry, a sector of activity that increasingly uses aluminium for bodywork and other parts. Rio Tinto recently launched its new wheel alloy, Revolution-AlTM, which makes it possible to produce a lighter wheel with a 7% weight reduction versus its standard design (resulting in improved fuel efficiency and reduced CO2 emissions). This new product is also 15 to 20% stronger than a traditional wheel alloy A356.2 (which allows the wheel weight reduction). “Our innovation efforts are driven by our ability to help customers stand out in the market,” added Claude Dupuis. �
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SPOTLIGHT ON: IRAN 23 5
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Spotlight on: Iran With low energy costs resulting in a very competitive cost in production per ton of aluminium, Iran is also one of the largest markets in the Middle East region. With a developed transport and infrastructure network, the region is a very interesting aluminium market. However, economic sanctions have had a very negative impact on country’s aluminium industry in recent years. Seema Gahlaut* presents an overview of the Iranian aluminium industry. Photos courtesy of Hormozal Aluminium
With an installed capacity of about 490,000 tonnes at the end of last financial year (20th March 2019), Iran is 17th largest global primary aluminium producer. Primary aluminium production in the country has suffered a decline due to political and economical reasons. Currently, country’s primary aluminium production is dominated by three producers- state controlled Iran Aluminium Company (IRALCO), Hormozal Aluminium Company and Almahadi Aluminium Company. Though, a number of projects are in construction and consideration stages. Once implemented, these projects (more on these projects at the bottom of this article) will make Iran one of the most prominent primary aluminium producers in the region. These projects will be a big boost towards country’s plans to reach the annual production of 1.5 million tons of primary aluminum by the Iranian calendar year 1404 (March 2025-March 2026). Iran’s total production of aluminium in the recently concluded financial year (March 21st 2018- March 20th 2019) declined by 11% to 301,033 tonnes according to numbers released by Iranian Mines and Mining Industries Development and Renovation Organization. Country’s largest aluminium producer Iran Aluminum Company produced
170,912 tonnes, almost equal to the output level of that of previous year. Hormozal Aluminum Company produced 77,326 tonnes of aluminium last year, a decline of 27% compared to previous year. Almahdi Aluminum Company produced a total of 52,795 tonnes of aluminium last year, registering a decline of 14 % over the previous year output. During 2016 and 2017, Iranian aluminium production was quite high as compared to previous year’s figures. The spurt in production and consumption of aluminium in these years was on account of recovery in the domestic economy as a result of sanction relief. GDP growth in the six months to March 20, 2017 reached 7.4 percent. The boost in growth was largely a result of the oil sector’s bounce-back, in both production and exports, following the removal of sanctions in January 2016 through the Joint Comprehensive Plan of Action (JCPOA). Besides a sizeable domestic aluminium market, Iran’s geographical location gives it access to a market of more than 300 million people in the Caspian, Persian Gulf and countries in its east. Further decline in aluminium production The aluminium output further declined in the first two months of current Iranian
Year (March 21st - May 20th) by 32%. The output of three major producers amounted to 41,367 tons during the first two months of the current financial year, which registered a 32% decline compared with last year's corresponding period, according to the data from Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO). Iran Aluminium Company accounted for 30,625 tons of the total production, registering an increase of 2% year-on-year. It was followed by Almahdi Aluminium Company with 5,221 tons, down 56% YOY, and Hormozal Aluminium Company with 5,156 tons, down 73% YOY. Economic sanctions and Iranian aluminium industry Economic sanctions have had a very negative impact on Iranian aluminium industry. Sanctions previously imposed by the UN, US and EU in an attempt to force Iran to halt uranium enrichment crippled its economy, costing the country more than USD 160 billion in oil revenue from 2012 to 2016 alone. For a brief period (2016& 2017), production and consumption of aluminium in Iran gained momentum, when Iran and US reached a deal. Under the deal, Iran gained access to more than $100bn in assets frozen overseas, and was able to resume selling
*Correspondent Aluminium International Today
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oil on international markets and using the global financial system for trade. However, in May 2018, US President Donald Trump abandoned the nuclear deal and later in November 2018, US reinstated sanctions targeting both Iran and other states, who trade with it. This has led to a downturn in Iran's economy and aluminium industry. The US move has pushed the value of its currency to record lows, quadrupling its annual inflation rate and driving away foreign buyers and investors. Just to give an idea of the declined purchasing power of Iranians to our readers. At the time of the nuclear deal, Iran's currency traded at 32,000 rials to USD 1. Today, the numbers listed in exchange shop windows have skyrocketed it costs over 130,000 rials for USD 1.Inflation is over 37 per cent, according to government statistics. More than 3 million people, or 12 per cent of working-age citizens, are unemployed. That rate doubles for educated youth. Depreciation and inflation make everything more expensive from fruits and vegetables to tires and mobile phones. A simple cell phone is about two months' salary for the average government worker, while an iPhone costs a 10 months' salary. Fresh US sanctions on Iranian aluminium industry United States of America (USA), through an Executive Order dated 8th May 2019 imposed further sanctions on the Iranian metal sector. Aluminium, steel and copper production is the target of this order. However, Abolfazl Rezaei the secretary of Iran Aluminum Industries Syndicate is unfazed by the USA sanctions. According to Rezaei, “Iran will continue exporting aluminium to its neighbours despite US sanctions on Iran’s metal industry. Afghanistan, Turkey, and Iraq are the major export destinations for aluminium and the recent US-led sanctions will have no impact on exports to these countries unless banking transactions impede the process. Sanctions could push the total production prices up. Our biggest challenge is in getting the requisite raw materials via imports, which has been done by swapping under previous sanctions.” Raw material woes Iranian aluminium producers are highly dependent on import of alumina for
SPOTLIGHT ON: IRAN
aluminium production. Country does not have huge resources of bauxite. The country’s only source of bauxite is Jajarm Mine in the city by the same name in North Khorasan Province, with reserves estimated at less than 20 million tons. Of the current annual consumption of nearly 600,000 tonnes of alumina inthe country, nearly 40 % is provided by Jajarm refinery and the rest is imported. Though, Iran has a deal with Guinea for bauxite procurement, but not much progress was made during the initial years. The country hadsigned a 25-year agreement with the African country in 1992 to explore and extract 600 million tons of bauxite from its 13 bauxite plateaus at Dabola and 12 at Tougue, both in central Guinea. The 50-50 partnership with the Guinean government was renewed in 2016 for another 25 years. Though, the partnership was renewed in 2016, but the project didn’t make any progress till 2018. Mines & Metals Engineering GmbH, an Iranian firm registered in Germany, in early 2018 started to make some moves on the project. The scope of the project includes engineering design, machinery supply and construction works for the production of 4 million tons of bauxite, including crushing, storing and grinding units, and transferring as slurry through a pipeline about 325 kilometers long from Leguetera Mine, 385 kilometers northeast of Conakry City to the city’s port. Major aluminium producers in Iran Primary aluminium production in Iran is dominated by three companies. A couple of new projects are under construction stage, while another two projects are under consideration stage. Iran Aluminium Company (IRALCO) Iran Aluminium Company is the oldest and largest primary aluminium producer in the country. IRALCO commenced aluminium production in Arak in the year 1967 with an installed capacity to produce 60,000 TPA of aluminium, which was subsequently raise to 120,000 TPA. The company expanded its installed capacity by installing a new smelter in the year 2007 by 110,000 TPA. Currently, the total installed capacity of the company is 230,000 TPA. IRALCO’s production facilities are located at Arak, which is called as the industrial capital of Iran. Located 238 Kilometres away from Tehran, Arak is the capital of Markazi province.
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second largest producer of primary aluminium in the country. The company commenced commercial production of aluminium in the year 2009 from its Bandar Abbas based production facilities. Iranian Mines & Mining Industries Development & Renovation (IMIDRO) has a 77.22 % shareholding in the company. Almahdi Aluminium Company Located at Bandar Abbas, Almahdi Aluminium Company is the smallest of three producers. Company’s phase 1 was commissioned in the year 1997, which reached to an installed capacity of 55,000 tonnes in 2002. The second part of phase 1 commenced in 2003 and completed in 2005, achieving an installed capacity of 110,000 tonnes per annum. Undergoing projects & investments The most awaited and ambitious project in Iranian aluminium industry, the South Aluminum Corp (Salco) smelter, which is being built in the city of Lamerd near the Persian Gulf, would add 300,000 tonnes per year of new capacity in the first phase. Initially, the project was to commence commercial production in the year 2018, which was deferred to the year 2019 in the wake of economic sanctions by USA. The project has been again deferred to March 2020. Coming up with an investment of USD 1.2 billion, Salco is being built by China Nonferrous Metal Industry’s Foreign Engineering and Construction Company (NFC). The project also includes construction of a deep water port. One of the downstream aluminium processor, Kaveh Khozestan Aluminium (Kalco) has expressed an intention to build a 375,000 TPA smelter at Masjed Soleyman, in the Khuzestan province in South Western part of the country with an investment of USD 1 billion. The project will be built in two phases of 187,500 TPA each. The company has not shared the timeline of the project. India’s National Aluminum Co Ltd (NALCO) had planned to set up a 500,000 tonnes-per-year smelter and an associated power plant in Iran worth as much as $2.6 billion but put the scheme on hold in 2017 in order to focus on expanding domestic capacity. �
Hormozal Aluminium Company With an installed capacity to produce 147,000 TPA of primary aluminium, Hormozal Aluminium Company is the
September/October 2019
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CRU: OPINION PIECE 27 5
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How ASI certifications impact the aluminium market By Lais Santos* CRU attended the ASI Conference that took place in Norway in early June, and we have summarised some insights on how the certifications are likely to create a premium market for responsibly sourced aluminium. Certifications overview: Highest value is in the Chain of Custody certification The Aluminium Stewardship Initiative is a non-profit organisation that aims to administer a third party certification program for the aluminium value chain. ASI members are classified in six groups, according to their business activities: Associations, Civil Society, Downstream Supporters, General Supporters, Industrial Users, and Production and Transformation. The founding members of the ASI in 2012, were Nespresso, Rio Tinto Alcan, AMAG, Amcor Flexibles, Constantia Flexibles, Constellium and Tetra Pak. The ASI program is comprised by two certifications: Performance standard (PS) and Chain of Custody (CoC). Both standards are applicable to all stages of aluminium production and transformation, from bauxite mining to material conversion, including remelting of recycled scrap. It also covers criteria relevant to downstream users of aluminium. All ASI members in “production and transformation” and “industrial users” categories are required to be certified against the Performance Standard for at least part of their operations within two years of joining ASI or two years of the launch of the ASI certification programme, whichever is later. On the other hand, the ASI Chain of Custody standard is voluntary, and involves not only the company being certified but also the supply chain of aluminium from mining to transformation. It can therefore create differentiation in the market and can impact the value chain since the suppliers to a CoC certified product will also need to hold the same certification. We expect the commercial value for ASI certified aluminium to be captured in this
step of certification. The criteria covered by the certification covers eleven topics in Governance, Environment and Social aspects. Industrial users and Other manufacturing or sales of products containing aluminium are normally subject only to one of the eleven criteria which is named “material stewardship”. Production and transformation members are subject to all eleven criteria. No longer a differentiation from China As China has become a giant in aluminium production since the early 2000’s, aluminium producers outside China are focused on how to differentiate themselves and to protect their markets from Chinese competition. That is especially because Chinese semi-fabricated aluminium is normally cheaper than aluminium produced in the rest of the world. The difference in price comes from a range of factors such as lower capex, higher scale, cheap labour and high level of integration. However, Chinese competitiveness is impacted by less stringent corporate responsibility standards, especially in terms of environmental protection. And China’s aluminium industry is overwhelmingly coal-powered, which brings with it a higher carbon footprint than hydro-
powered or gas-powered production. Considering this, a stewardship standard for aluminium sourcing would naturally be a way of creating a hurdle for Chinese companies to compete in overseas markets. However, Chinese companies are getting on board of such initiatives. From a total of 14 ASI performance standard certified companies as of now, three are Chinese companies, and from a total of four companies certified against Chain of Custody as of now, one is Chinese. Nanshan Aluminium presented an impressive timeline of certification in its Yantai Donghai foil aluminium plant: it has become an ASI member in July 2018, got the PS certification six months later in January 2019, and the CoC certification two months later in March 2019. The push to complete certification is to drive growth in exports of aseptic foil for packaging. Likewise, Shanghai Shenhuo aluminium foil has joined ASI as a member in 2017, started certification process in December 2018 and got certified against performance standard in February 2019. The company plans to achieve CoC certification in 2020. One other issue at present is that traders are not ASI certified, and there is no mechanism for companies using traders to work around this. Therefore, if you source any material in the aluminium value chain
*Analyst, Aluminium Primary and Products, CRU Aluminium International Today
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28 CRU: OPINION PIECE
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MEMBERS IN THESE TWO CLASSES ARE SUBJECT TO CERTIFICATIONS
OVERVIEW OF ASI MEMBERSHIP CLASSES
ASSOCIATIONS • Associations (eg: Alfed, AAC, Abal, AFSA etc)
CIVIL SOCIETY
DOWNSTREAM SUPPORTERS
GENERAL SUPPORTERS
• WWF, Fauna and Flora
• Apple, Heineken,
• Trafigura, Cargill,
International, Nomogaia etc
Daimler etc
Energia Potior etc
• Institutes (Can manufacturers Institute etc)
(directly or indirectly) from traders, at present you cannot get CoC certification. The ASI will review this at its next revision cycle starting in late 2019. But what about Chinese CO2 emissions? The ASI certification comprises a special criteria on greenhouse emissions for the aluminium smelting process, with a CO2 emission threshold and improvement commitment plan. As per published on ASI website, accessed on 11 of June 2019, aluminium smelters should: 1. Demonstrate that they have put in place the necessary management system, evaluation procedures, and operation controls to limit the direct GHG emissions. 2. For aluminium smelters in production up to and including 2020, demonstrate that the Scope 1 and Scope 2 GHG emissions from the production of aluminium is at a level below 8 tonnes CO2 equivalent per metric tonne of aluminium by 2030. 3. For aluminium smelters starting production after 2020, demonstrate that scope 1 and scope 2 GHG emissions from the production of aluminium is at a level below 8 tonnes CO2 equivalent per metric tonne of aluminium. If this policy had immediate effect, the 8 tonnes of CO2 per metric tonne of aluminium threshold would automatically eliminate over half of world primary production from gaining ASI certification, most of it in China, as presented in the accompanying chart. However, as can be noted above, the threshold does not have immediate effect, once the companies commit to control and meet the threshold in a relatively long period of time – ten years for smelters producing before 2020. CRU does not expect aluminium smelters to curtail because they are unable to achieve these standards. Chinese semi-finished fabricators willing to get ASI CoC certification will need to be able to supply their primary aluminium from smelters that comply with the emission threshold within the timeframe, September/October 2019
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not no mention all the ten criteria other than GHG emissions. It will likely benefit backwards integrated semi-finished companies that have at least part of production based on renewable sources, like Chalco and Yunnan Aluminium. It also presents the possibility that hydropowered aluminium will command a premium in China, as this would allow the export of ASI certified (CoC) semi-finished products. Integrated companies more likely to obtain CoC certification Integrated companies should find it easier to obtain CoC standard. That is because they have control of all the value chain from mining to the casthouse or to the semi-finished production. Rio Tinto for example was the first company to certify against CoC standard, in July 2018, after getting PS certification in March 2018. They have certified part of their production, in a scope from the bauxite mining until the casthouse production. It covered their Gove Bauxite Mine in Australia, the Vaudreuil alumina refinery in Canada, Canadian smelter plants AP-60, Arvida, Grande-Baie and Laterriere, PLS casthouse in Canada, ports and rails and headquarters, also in Canada. This has led Rio Tinto to a partnership with Nespresso, as the company aims to have CoC standard by 2020. It demonstrates the commercial value that is implied in the certification, meaning that companies will need to source certified material to get the certification. Hydro has already certified CoC for the Germany rolling mills, including the Alunorf JV, and more recently for Paragominas mine and Alunorte refinery in Brazil. Other integrated companies are expected to get CoC standard certifications soon, and the companies to get it first will likely enjoy the benefit of being the first ones. Among the backwards-integrated semi-finished-products producers outside of China; Hydro, Rusal, CBA, and Alcoa (Warrick, Indiana rolling mill). In China,
INDUSTRIAL USERS • Amcor, Arconic, Audi, BMW, Nespresso, Constantia, Flexibles, Schuco, SIG, Tetra Pak etc
PRODUCTION AND TRANSFORMATION • Alcoa, Aleris, AMAG,
Ball Corporation, Alba, CBA, Hydro, Rio Tinto, Novelis, Nanshan etc
among the largest backwards-integrated producers are Nanshan, Chalco and Hongqiao, only Nanshan is an ASI member as of June 2019. Post-consumer scrap is easier to get into the process than pre-consumer scrap The scrap eligible to be certified as CoC is any post-consumer scrap, subject to due diligence, aluminium recovered from dross and treated dross residues and CoC scrap (scrap from material that has CoC certification). It means that pre-consumer scrap from non-CoC materials is not eligible. ASI justification for this criteria of scrap eligibility is that pre-consumer scrap are already recycled to a great extent, as opposite to post-consumer scrap which recovery and recycling needs to be incentivised. Also, if all scrap was automatically eligible, there would be less incentive to implement the certifications in primary production. In this way, post-consumer scrap gets a free pass in the CoC certification process, as long as a due diligence process is conducted with the scrap supplier. The due diligence comprises criteria in anticorruption, responsible sourcing, human rights and high-risk areas. We understand that it therefore creates an incentive to the recycling of post-consumer scrap. However, there is an overall trend of increasing postconsumer scrap, so we believe it will not create significant changes to the market dynamics. We expect it to create a premium and to widen market access of certified companies The need to respond to demand from brand owners looking for a lower carbon footprint has led in the past few years to the creation of “green” aluminium brands by major companies. UC Rusal has launched in 2018 its ALLOW aluminium brand, with independently-verified certificates of carbon footprint. Rio Tinto has created the RenewAl brand, and Alcoa has launched Sustana. Likewise, Hydro has Aluminium International Today
04/09/2019 09:55:14
29 5
launched Hydro 4.0, with an independently certified carbon footprint of 4.0 kt CO2 per kg of aluminium. In addition to creating a framework to the whole industry, ASI also extends the concept of green aluminium to a wider perspective besides the carbon footprint. The initiative is most likely to be valued in consumer goods and automotive markets, where final consumers drive demand to know more about the metals they use. B2B markets such as machinery and equipment, infrastructure and wire and cable are less likely to seek certifications. In building and construction, however, there is possible demand for green aluminium driven by existing certifications such as LEED and BREEAM. Past lessons from FSC Looking back at past experiences in other industries can give us an idea of what this relatively new initiative can bring to aluminium market dynamics. Forest Stewardship Council (FSC) certifications to wood-based products have started in early 2000’s, and currently certifies almost 200 million hectares of forests across 84 countries. According to a study carried out by WWF in 2015, FSC certified products have gained price premiums and resulted in greater market access to the forest enterprises. Likewise, it is expected that ASI certifications create a premium or at least become a requirement for some buyers. However, in the longer term the premiums can fade out because it is likely to become a must have, diminishing the market differentiation. So, the companies that lead the way in the initiative are likely to benefit the most from market access and possibly price premiums. �
This Insight is an excerpt from the July 2019 CRU Aluminium Services. For additional information please contact sales@crugroup.com
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Rethinking and redesigning cold rolling for aluminium Water-based emulsion replaces kerosene-based lubricants for cold-rolling aluminum strip. In Europe, the aluminum extrusion and rolling market is estimated to be 5.3 millions tons per year. For flat rolled products strong growth of +3% is estimated for 2019, with a similar trend for the next year. In this developing scenario it becomes of capital importance to rethink and re-design the aluminium cold-rolling process, in order to achieve a safe, environmentally friendly and costsaving technology. The actual aluminium cold-rolling technology uses kerosene-based lubricants due to the surface quality requirements, to avoid surface oxidation. These lubricants are a mix of kerosene and oil. Risk and expense The use of kerosene-based lubricants is very risky and expensive, for several reasons: � Risk of fire with the related social September/October 2019
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costs, insurance stoppage costs;
costs,
production
� Related to the above item, the ba-sic CR technology needs an expen-sive CO2 firefighting system, with its related costs and risks, because after fire extinguishing the CO2 remains in the working area and must be re-moved for operators’ safety; � Kerosene vapors and aerosols have a negative impact on human health and the environment. For water-based fluids, these risks are dramati-cally reduced.
New lubricant technology: Strong team collaboration Within this developing global scenario, Danieli is coordinating research into a new technology concerning the use of the water-based emulsion in aluminium cold rolling (from here and after WBE
technology), in cooperation with Houghton International Inc. (Valley Forge, PA, USA) as industrial partner for the oil formulation; TWE Group (Emsdetten, Germany) as industrial partner for the submicron, non-woven paper filtration system specifically for oil-in-water emulsion; EPMinerals Europe GmbH & Co. (Munster, Germany) as industrial partner for oil-inwater sub-micron filtration with filtrating earths; and in cooperation with Technische Universität Bergakademie Freiberg (Freiberg, Germany) as research partner for the laboratory rolling tests. All these are linked with Danieli through a nondisclosure agreement. The research project also is in the running to join the Horizon 2020 European Funding Program for innovation, in collaboration with University of Udine, due to its deep impacts in terms of innovation, safety and environment care. Aluminium International Today
04/09/2019 10:00:02
ROLLING 31 5
2
3
4
5 1/2.Emulsion nozzles flow-rate efficiency test. Emulsion recirculation system tank during the make-up sequence.
3/4/5. Pilot mill used to test water-based emulsion during cold-rolling of aluminum 5005 alloy strip.
WBE technology The WBE technology brings many advantages to aluminum cold rolling. The risk of fire is drastically reduced; the emulsion is 15% rolling oil In de-mi water; and all the related costs (insurance costs, social costs, elimination of CO2 firefighting system) are reduced. In regard to worker health, the rolling oil is less harmful than kerosene, in particular if considered as water based emulsion. Moreover the greater heat transfer capacity of the water compared to kerosene Increases the productivity for the strips that otherwise is limited by the potential for overheating. The quality of the finished materials and the production Aluminium International Today
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rate will be equal or even better than that achieved with kerosene. The capital expenses (CapEx) are reduced due to the more than 90% reduction of the fume-exhaust system cost, as the complete distillation system will be eliminated, and the exhaust filtering system will be a simple plate coalescent filter with an emulsion droplet-recovery system. In regard to firefighting, we project a cost saving of 30% due to the elimination of the CO2 system. The total CapEx of the plant will be reduced of 10%. Regarding the operating costs (OpEx), we have to consider first that the cost September/October 2019
04/09/2019 10:00:18
32 ROLLING
of kerosene today is more than 1â‚Ź/l. On average a rolling mill consumes several hundred thousand liters of kerosene per year. This cost can be reduced considerably when switching to water-based fluids, for which water is the solvent. Considering also the reduced costs for insurance and maintenance, and a higher utilisation factor due to the elimination of fire risk, we can estimate an OpEx reduction of 10% if compared with the use of kerosene. These targets will be easy to achieve because the water-based emulsion technology can be implemented easily in the already operating plants because the modifications are very small and related just to the change of the filtering unit inside the fume exhaust system bypassing the distiller, the adaptation of the multistack filtering unit by using a proper filtrating earth, and the improvement of the strip drying system, if needed. The rest of the recirculation system remains unchanged. The ease of implementation and the short period of plant shutdown (estimated less than one week) will make plant revamping the first strategy to attract new producers.
September/October 2019
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Research project The research project was developed as preindustrial test phase divided in two test sessions at the Technische Universität Bergakademie Freiberg (Freiberg, Germany), using an industrial-size, singlestand non-reversing mill. On this plant, hot-rolled aluminium coils were cold-rolled using a water-based emulsion in order to test and tune the rolling oil formulation. The mill originally was devoted to rolling magnesium, and modified by Danieli in order to roll aluminium. The modification consisted of installing and commissioning a complete emulsion recirculation system be-cause originally the plant used mini-mal lubrication in an open-circuit for magnesium rolling. Dedicated emulsion headers with specific nozzles have been installed at top and bottom of the mill entry side. In two test sessions, good surface quality has been achieved, with smooth rolling down to 1.0 mm in three passes. After each test session strip samples were collected and analysed to check the surface quality, the emulsion residuals and
the mechanical properties, in order to properly tune the process and the rolling oil formulation. A third test session is foreseen in or-der to reach target thickness lower than 1.0 mm with the alloy AA5052. This last test will complete the preindustrial phase and will make the final oil formulation ready to proceed to the industrial phase. In the industrial test phase the WBE technology will be retrofitted to an existing industrial cold-rolling mill. The implementation will include a dedicated filtering earth to be used in the existing multi-stack filtering unit and a dedicated drying system, if necessary, to remove all the water from the strip surface after rolling. Most of the other components of the existing recirculation system will remain un-changed. The rolled strip will be in compliance with the market requirements, including the standard food packaging and can stock requirements, in order to cover all the final aluminium cold-rolled flat products. ďż˝
Aluminium International Today
04/09/2019 10:00:18
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34 ROLLING
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Digitalisation case study Ma’aden Aluminium engages 8Sigma to implement MES solution for automotive sheet plant. Following Ma’aden Aluminium business strategy, the management of this largest aluminium producer in the Middle East decided to digitalise their Automotive Sheet plant by implementing software solution Manufacturing Execution System (MES). After considering cooperation proposals received from several prominent companies, they concluded that the best offer was the one received from 8Sigma, whose experts have developed own solution 8Sigma MES and have already proved their expertise by working on some of the most demanding projects in the field of the metals industry. This cooperation is a part of Ma’aden Aluminium’s plan, which includes a multimillion-dollar investment for a complete digitalisation of the production processes in the rolling mill that produces aluminium coils for the automotive industry. The cooperation agreement that was signed in July 2019 refers to the first phase of the implementation of 8Sigma MES solution in the factory in Ras Al Khair Industrial City and will be completed and put into operation during 2020. According to this agreement, implemented MES will enable the factory’s staff and management to have a quick and real-time overview on all production phases. It will provide them with a possibility to track the product from the moment when it enters plant as a raw material to the moment when it is ready for delivery to the end customer. Some of the most important benefits of implementing MES solution will be also product quality increase, process optimisation, as well as a possibility to compare employees’ performance and control machine efficiency. “We expect a quick and efficient implementation of MES solution by 8Sigma that will bring Industry 4.0 to automotive part of our complex and support us in further digitalisation activities that we have been implementing from the very beginning of our plant. It will help us to increase quality control and also to strengthen our leading position on the market. By concluding this agreement, we September/October 2019
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Vladimir Lukic, Director at 8Sigma
Marko Satrak, Director and Co-Founder at 8Sigma & Mohammed Al-Ahmari, Engineering Manager at Ma'aden Rolling Company
have once again confirmed that Ma’aden Aluminium is a modern company oriented to continuous development and growth, which follows high technological and market trends”, said Abdulaziz Al-Ruwaily, Ma’aden Rolling Company Operation Director. Signing the cooperation agreement with one of the largest integrated aluminium complexes in the world is an additional proof of the quality of 8Sigma. On the occasion of signing the agreement, Director and Co-founder at 8Sigma, Mr. Marko Šatrak said: “It is a great honour to be a partner of a leading company in aluminium production and to support them in their further development. Implementation of 8Sigma MES is a confirmation of Ma’aden‘s tendency to be a state-of-the art company focused on reaching the highest product quality and achieving the most challenging business goals.”
As a supplier of high quality primary and rolled product solutions, Ma’aden Aluminium includes the development, design, construction and operation of two sites integrated in a mine-to-metal network. Since 2009, it has been a joint venture company with Alcoa, the world’s third - largest aluminium producer. 8Sigma is a premium MES supplier based in the EU and established by software experts with valuable experience gained in developing MES solutions in the factories on five continents. Their 8Sigma MES is adjustable to all types of manufacturing industries and various plant sizes, as it is very configurable and at the same time user-friendly solution. It also provides clients with a wide range of benefits and features, such as immediate factory visibility, automatic comparison or results and targets, proactive maintenance, downtime analysis, standardisation of production and better planning. � Aluminium International Today
29/08/2019 15:31:29
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Focusing on the downstream will save European SMEs By Mario Conserva, FACE Secretary General The news that China has – once again – produced record amounts of primary aluminium in June followed by continuously rising Chinese exports in July, surprises no one in the industry. But it will once more up the pressure on European companies in the downstream sector, as China dumps its aluminium products onto the market. The subsequent slump in prices has already devastated entire industries in Europe, particularly in the UK and the Netherlands. It is therefore clear that the downstream industry is facing an existential threat that requires a comprehensive policy adjustment, as the Federation of Aluminium Consumers in Europe (FACE) has argued for years.
input and electricity costs, among other factors. Since 2004, 900,000 tonnes of primary production have been shuttered, while consumption of raw aluminium has grown by 1,300,000 tonnes. Smelter closures have been accelerated by the decisions of major producers in the EU to delocalize production, taking advantage of free trade agreements with countries such as Iceland and Mozambique. Coupled with growing demand, the closing down of EU smelters has accelerated the continent’s dependency on imports, which now stands at 74%. To still maintain import tariffs in an import-dependent market is nothing short of ludicrous.
The EU is betting on the wrong horse Decades ago, when the EU created an import tariff structure on unwrought aluminium and alloys of 6 percent, it was done to protect the domestic primary aluminium producers. Now, years later, it has become abundantly clear that the tariffs have done nothing to protect the upstream. In fact, EU smelters have been closing down at rapid clip due to high
Import tariffs are killing downstream SMEs If the tariffs failed to do what they were supposedly conceived for – protect EU smelters – they have also developed into a threat to the EU’s downstream sector and the thousands of small and medium-sized enterprises (SMEs) active in it across the bloc. These enterprises are the backbone of the European economy. It is easy to see
HS code
76.01.100000
76.01.202101
76.01.202090
Code description
Aluminium, not alloyed, Aluminium content >99% –
Aluminium alloys, slabs and billets, containing lithium, Aluminium content<99%
Aluminium alloys, slabs and billets Aluminium content<99%
Tariffs (2019)
3%
0%
4%
Primary production
EU regulation No.
R0705010
R1623900
R1623900
why: in 2015, 23.4 million SMEs operated in the European Union's non-financial business economy, employing 91 million people and generating €3,934 billion. In the aluminium sector, the downstream segments account for about 70 percent of the annual turnover of industry and for nearly 92 percent of employment. In order to hammer home the urgency of the situation to decision-makers in Brussels, FACE commissioned to the LUISS University in Rome to conduct a study to analyse the position of non-integrated downstream producers and provide an assessment of the future. “Hidden subsidy” mechanism Launched during an event organised by Politico in Brussels this past June, the LUISS study should be a wake-up call to the EU. The application of the 6 percent tariff has a devastating effect on the downstream’s competitiveness. The tariff has incurred extra costs of up to €18 billion on SMEs between 2000 and 2017, or around €1 billion per year. A low-margin industry, the downstream’s production costs are greatly influenced by raw material prices, Primary aluminium imports dependency rate
Primary imports
10000
10%
9000
9%
8000
8%
7000
7%
6000
6%
5000
5%
4000
4%
3000
3%
2000
2%
1000
1%
0
76.01.208000
Aluminium alloys, (other) Aluminium content<99%
6%
2000
0% 2002
2004
2006
2008
2010
2012
2014
2016
R9720860
The EU is 74% dependent on primary aluminium imports. EU primary aluminium consumption, 200-2016 (kt). Import tariffs applied on unwrought aluminium in the EU in 2019
Aluminium International Today
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Source: European Aluminium, CRU Group, GDA
September/October 2019
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38 EUROPE
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Aluminium ingot P1020, in-warehouse Rotterdam, S/tonne Data is averaged for 5-year periods
Duty revenue 16%
Spread
Duty unpaid premium
€2.7bln Extra revenue for EU secondary producers... €5.8bln
300 250 $68
€4.5bln
200 150 $60
Extra revenue for primary producers with duty free access to EU...
100
€4.6bln Extra revenue for EU primary producers 26%
$55 $68
50 0
Biggest share of the extra cost is cashed in by EU primary and secondary producers
2010-2014
2015-2019
Average extra cost for dutiable aluminium imports.
The structure of the extra cost paid by the downstream sector. Source: LUISS, FACE
which can account for up to 60 percent of production costs. The aluminium price is determined by the LME, which sets the daily base metal prices. Whether aluminium is imported from duty-free sources or produced in the EU, the duty is included into the price, thereby artificially increasing these raw material cost. As the study shows, “…. there is no incentive for domestic unwrought aluminium producers to not align their prices to the highest possible level – that is, the duty-paid price.” Downstream SMEs’ already tight margins are being squeezed even more as “….EU market prices for unwrought aluminium always include the customs duty.” It’s no wonder then that domestic downstream producers have not been able to develop and cover demand, which has led imports of semi-finished products to grow by 44% since 2010. We estimate that the duty has lowered the share of domestic sales by 4%, which translates to lost revenues of €2 billion a year and €200 million in profits. This is the essence of the “hidden
2005-2009
2000-2004
Based on 2018 figures. Source: LUISS, FACE
subsidy mechanism”: while downstream SMEs have seen their competitiveness stripped from them, the duty has acted as a conveyor belt, transferring financial resources to smelter operators. In exchange, upstream producers should have used this money to invest and compensate for cost differences between them and non-EU smelters, as well as boost research and development. That jobs continued to be cut, and investments continued to be further curtailed, shows that this was not the case. The way forward: Abolish the tariff, save Europe’s industrial base From the study’s results it is clear that this situation needs to be urgently rectified in favour of the downstream. FACE has long urged the EU to scrap the import tariffs altogether. With its absence of raw materials, limited alumina production and strongly declining production of primary aluminium, the EU aluminium industrial value chain seriously depends on foreign import metal imports. The import duty only serves to add extra costs to the firms
in the value chain, resulting in reduced competitiveness on the global market. A new policy is needed, one in which the import tariffs are abolished, which will lead to the reduction of raw aluminium prices along with an increased variety of supply sources. Promoting the global competitiveness of the sector must be a top-priority. The downstream sector’s main advantage over non-EU competitors is its remarkable ability to innovate as well as its technical know-how. Any new EU policy needs to take into account various incentives geared towards SMEs with the objective to defend and further expand the sector’s technological leadership. If the EU wants to prevent the entire aluminium industry from shutting down in the future under pressure from China and low-cost producers, it is high time to implement a new way forward with promoting the activities and operations of downstream SMEs at its core. Otherwise, the cost of inaction will be measured in the on-going bankruptcy of EU SMEs, rising unemployment numbers and declining wealth across the continent. �
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World leader in the manufacturing of Automated Guided Vehicles (AGV) for the light metal industry www.hencon.com
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12-08-1933 15:09
40 PACKAGING
Delivering the total package Ball Corporation is the largest producer of recyclable metal beverage cans in the world. Founded in 1880, Ball have always been pioneers in packaging, bringing innovation and industry-leading insight to our customers. AS a global company with over 100 locations and 17,500 employees worldwide, the company are singularly focused on helping our customers accomplish their goals through technical know-how, passion and expertise. Working with customers to create the best packaging possible for their brand is of utmost importance to Ball, which feeds into the company’s three key values – Customer Focus, Innovation and Sustainability. Customer focus Committed to delivering the total package, Ball aims to be seen as a strategic partner of each of their customers, working with them to build their business. Whatever the packaging ambitions, Ball will act in partnership in order to produce the right solution for a brand and be seen as the packaging partner of choice – delivering at every touch point whether it be technical support, sustainability or marketing. With leading-edge thinking, driving initiatives that are good for clients as well as the industry and the size and scale of the corporation, Ball demonstrates its leadership through a multitude of ways. By maintaining a close collaboration with our customers and monitoring market trends, they continue to grow and develop these values further. A company built on passion, Ball is passionate about customer service, about delivering value to shareholders and about its own values and vision. Most importantly, Ball is passionate about its people and has great stories to tell about how this has helped them succeed over and over again. Innovation Defining the role that Ball wants to play for its customers, innovation is key to helping them improve their own business performance through Ball’s unceasing pursuit of improved products and services. Ball puts great importance on the end consumer by developing innovations with them in mind – and understanding that each market requires a bespoke approach. In doing so, the product will reflect what the end consumer really September/October 2019
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wants and not just what the industry believes the consumer needs. Ball’s extended range of cans, finishes and ends, means the company offers unparalleled choice and opportunity for its beverage customers in Europe, from the traditional 330ml can through Slim and Sleek® formats, all the way to King size. With innovation not just limited to products or services, but also with the way the brand approaches customer service, Ball Corporation is best-placed to continually innovate in the industry. Sustainability For Ball, sustainability is a systematic way of doing business that creates economic, social and environmental value for its shareholders, communities and the planet. With a recycling rate of 69%, the can is the world’s most recycled beverage container, and can be recycled over and over with no loss of quality, irrespective of colour or design, making it the material of choice for environmentally conscious consumers. The can delivers value at all stages of the value chain With its 360-degree branding canvas, and global sustainable credentials, the can positions itself as a highly visible beverage package on the shelf. Shatterproof and lightweight, it is easy to transport and store whilst remaining durable, optimising space on shipments and reducing pollution. The can preserves and protects the beverage from sunlight and air, allowing the taste to remain exactly as intended. It is also a convenient, everyday product – quick to chill, value for money, and easy to open for that perfect ‘ready-to-drink’ moment. It is the perfect pack for all beverage types such as water, CSD, energy drinks, beer and cider, juices, wine and iced tea.
As a company, Ball share the vision to make the can the most sustainable package in the beverage supply chain. Recycling is important because metal is a permanent material, which cannot be destroyed. This means that metals can be used again with no loss of their valuable properties. The global aluminium can recycling rate is 69% with over 2.5 million tons of cans being recycled every year. Amazingly, 75% of all aluminum ever produced is still in use today and, if recycled properly, a can may be back on the shelf in as little as 60 days. Having always been pioneers in packaging innovation, Ball uses its “metal recycles forever” and “every can counts” behaviour change campaigns to help consumers, and businesses, better understand the role they play in recycling. Ball has an on-going commitment to reduce waste and its use of water and electricity, by embedding sustainability in operations around the world. To promote sustainability frameworks across the business, Ball established the R. David Hoover Sustainability Award in 2011 in honour of the company's former chairman, president and CEO, who was a key driver in the development of Ball's formal sustainability program. The 2018 Hoover Aluminium International Today
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award for Europe was the Ludesch plant in Austria. The Ludesch plant attained zero total recordable incidents, achieved an 8 percent in reduction in its normalised water, decreased its normalised energy use by 1 percent and sent zero waste to landfill. The plant also raised awareness about the can's sustainability profile and promoted recycling efforts in the local community, and participated in local landscape clean-up and can recycling events. For the beverage industry specifically, it is clear to see that the consumer experience has now gone beyond just drinking, with many consumers now acutely aware of the environmental impact the products and brands they purchase have. Thus, companies should be aware of this and acknowledge that their products need to be easily disposed of and recycled. As such, it is essential that recycling is incorporated into the consumer experience from the beginning. The beverage can is easy to use, drink and recycle. The value of recycling cannot be underestimated, there needs to be a really good infrastructure in place to ensure products can be picked up and sorted
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correctly. The UK, for example, has a small amount of on-the-go collections and general waste bins alongside double bins (general waste and recycling) are not widespread. It is this challenge that prevents cans from achieving near 100% recycling rates as there is a need to upgrade on-the-go recycling infrastructure on public transport and on the high street, as well as investment in consumer education and awareness. Other forms of packaging suffer similar issues. Packaging types like Carton/ opaque PET bottles for example may be collected alongside other recyclable materials, yet can’t be recycled at the point of sorting. Whilst an infrastructure for PET is not currently in place for the majority of Europe, the aluminium infrastructure does currently exist in the UK. The recycling plant in Warrington alone can recycle all nine billion aluminium cans currently in circulation. Thus, the opportunity to change consumer mindsets from unrecyclable formats to cans is vast and not something that brands and supply chains should take for granted. �
September/October 2019
04/09/2019 10:12:51
42 PACKAGING
An airtight argument for aluminium screw caps Aluminium screw caps have become the go-to method for sealing bottled products such as mineral water, olive oil, spirits, and, increasingly, wine. In 1959, a French company first adapted screw caps to wine bottles, and their use has skyrocketed over the last 15 years, to more than 9 billion pieces per annum. Aluminium screw tops are now the closure of choice for wines in Australia and New Zealand, reaching more than 95 percent of the market. Even premium winemakers who once considered aluminium caps to be inferior have come around, and it is common to see them on vintages at every price point. Producers, retailers, and customers have many reasons for preferring aluminium closures – including taste, quality, convenience, safety, and sustainability. Aluminium closures are organoleptically neutral, non-toxic, and corrosion resistant, so they ensure consistent flavor and aroma. They allow for a longer shelf life and safe storage by creating a highly effective barrier against microorganisms, moisture, oxygen, and other contaminants, maintaining products in peak condition over time. With a specially developed liner, aluminium closures also guarantee a wine’s gradual aging without premature oxidation. Bottles sealed with screw caps can be moved and stored in any position without leaking or affecting the product. This advantage is particularly useful for shipping – aluminium closures guarantee that a product will taste and smell exactly the same upon arrival at its destination, even on the other side of the globe. Anyone who has ever searched unsuccessfully for a wine bottle opener can appreciate the convenience of aluminium screw tops. They are safe and easy to open and reclose, requiring nothing more than a twist of the wrist. The standard aluminium screw cap, a roll-on pilfer proof (ROPP) closure, is one of the most secure ways to make a bottle tamper-proof, since consumers can immediately tell if a bottle has been opened when the bridge line on the cap is broken. Aluminium closures eliminate liquid September/October 2019
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food waste from cork taint, which is estimated to affect 3 to 8 percent of bottled wine. Moreover, aluminium can reduce sulfur doses in wine by as much as 30 percent. Cost is another advantage, as aluminium closures can be produced in large quantities, for an excellent priceperformance ratio. Manufactured around the world, they enter local value chains, and producers can quickly modify them and create new designs to meet customer requests. Remarkably versatile, aluminium closures can adapt to both glass and PET bottles, and be made to fit any size or
design. Just like a label, an aluminium cap is a key element of a bottle’s visual impact, giving brands a unique opportunity to stand out from the crowd. Technology offers unlimited possibilities for one-of-akind screw caps with a range of effects and designs, such as matte or glossy finishes, embossing, or digital printing. Aluminium is inherently sustainable, and can be infinitely recycled while maintaining its properties. bout 75 percent of all the aluminium ever produced is still in use today. At least four out of 10 aluminium closures consumed in Europe are recycled, either separately or together with the glass packaging fraction. An optimal production process As the market leader for aluminium closure
sheets, Constellium follows the growth of the market with interest, and we are well-positioned to maintain our lead as the market continues to expand. Since 2012, we have taken part in an awareness campaign to promote aluminium closures in Europe with other suppliers and manufacturers, called “Aluminium Closures - Turn 360o.” Our high-performance production facility in Singen, Germany has been in operation for more than a century, and employs more than 800 skilled workers. It provides customers around the world with over 200,000 tons of coils and sheets, destined for the automotive, packaging, functional surfaces, and industry markets. For the closures market, Constellium supplies sheets and coils, mainly for wine, spirits, mineral water, and olive oil bottles. We produce aluminium sheets for closures using 8xxx, 3xxx and 5xxx series alloys. The sheets must be thin and flat, with minimal earing, and achieve the best possible compromise between strength and formability. Singen’s integrated hot and cold rolling line permits us to obtain excellent drawing properties and formability, ideal for deep drawn closures such as the 30 x 60mm screw caps used in the wine market. This optimised production process allows us to work very rapidly, reducing a slab from a gauge of 600mm to .7mm in only 15 minutes. We employ additional cold rolling steps to achieve practically any thickness a customer requests, generally between 0.18mm and 0.30mm. The layout of our factory gives us great flexibility in our production route – a key feature that allows us to adapt material properties to our customers’ processes. We also have mills dedicated to manufacturing special surfaces, including brushed, matte, and mirrored. These surfaces can then be used to make specific closures. Afterwards, we degrease and chemically convert the material using a homemade Aluminium International Today
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PACKAGING 43 5
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titanium phosphate treatment to ensure optimised coating adhesion for customers. Finally, we cut and slit the coils to the final sheet dimensions requested by customers. Equipped with significant recycling capacities, Constellium works with our customers to recycle aluminium in every market, including closures. Always something new Constellium has a renowned R&D Center in Voreppe, France, allowing us to go even further in fulfilling customers’ various demands: Developing new closure shapes, adapting alloys or tempers to specific bottled products, improving production processes, downgauging, and more. We use numerical simulation to create 3D models and test how a metal will react to a particular production process, before conducting trials on an industrial scale.
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Our engineers use several prototyping lines to try out innovative ideas – for example, new cap formats or textures – then apply the knowledge they gain to solve issues, develop the perfect alloy and temper combination, or improve parameters such as roughness or thickness. We run these projects in partnership with longstanding customers, who find
the process to be much quicker and more economical than testing new products on an industrial scale. Several innovative products have come out of these R&D collaborations, including screw caps with extremely bright surfaces, and new types of closures for beer bottles. And we continue to experiment, developing the aluminium closures of tomorrow. �
September/October 2019
04/09/2019 10:15:45
44 CYBER SECURITY
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Maintaining a good reputation… even when under attack By Andrea Carcano*
The recent cyberattack against the world’s leading aluminium provider, Norsk Hydro, attracted a lot of attention, not only due to the severity of the incident but also because of its handling. Many in the security industry have praised Norsk Hydro for its transparency around the attack and for its immediate response which ultimately limited the damage that was caused. Cyberattacks disrupt operations, cause financial loss and can also ruin corporate reputations. They bring about heightened scrutiny of the executive team’s reactions and decision-making under pressure, threatening to shatter shareholder and customer trust in a matter of hours. As a result, crisis preparedness and incident response is of the upmost importance. This includes several foundational elements: a crisis response plan, a cross-functional response team and draft materials for the scenarios most likely to happen. Considering the growing sophistication of malware targeting industrial companies, cyberattacks should be one of the top five most-likely-to-happen scenarios. When Norsk Hydro first became aware of the ransomware infection within its network, the organisation immediately switched to manual operations, which helped stop the spread of the malware and limit the damage caused. The move attracted wide-scale praise among security professionals as it proved that Norsk Hydro had a back up plan in place and knew what to do if they ever came under attack. The executives at the organisation were also praised for their transparency around the attack. Not only did they hold regular press conferences, they also shared daily webcasts and social media posts to help keep partners and the media informed around what was happening. So what other key steps can organisations take to limit the damage caused by a cyberattack and also maintain a good reputation? Here are some examples of how to maintain a good reputation and limit damage while under cyberattack:
Step 1: Be Transparent Norsk Hydro went above-and-beyond in its efforts to be transparent. Their executive team met with media and industry analysts every day for approximately a week after the attack to provide updates on their efforts to restore operations, and answer questions. Not only did the company post daily updates on their website and social channels, they also offered direct access to their media and investor relations representatives. No questions were off-limits, from the complexity of restoring operations to financial impact, and their collaboration with law enforcement officials. Any organisation that finds themselves under attack should try to follow this step as it allows customers and stakeholders to fully understand the extent of the attack and the remediation efforts that are being made. Any company that tries to cover up an attack and hide how destructive one has been will only have more trouble and greater brand damage in the long run.
Step 2: Engage with Stakeholders Through Normal Channels Even during a crisis, it’s important to remember that your stakeholders are accustomed to hearing from your company in different ways. It is not enough to post information on your website. Your social channels need to be updated as well. Press conferences or on-demand webcasts are a great way of informing stakeholders in various time zones. Legislative representatives, local officials and trade associations might expect direct outreach by phone.
Step 3: Communicate Frequently A single update is not enough. As daunting as this sounds, it is critical to provide multiple timely updates on the impact of the cyberattack and on the steps taken to contain it. This demonstrates agility, integrity and transparency to your external and internal stakeholders. An organisation may also want to go a step further an even set up a page on their website which is dedicated to answering questions about the attack and also detailing the progress that is being made in terms of remediation. Communication is certainly key when it comes to security breaches and the organisations that come out the strongest after a breach are those that keep customers and stake holders updated on remediation efforts and discovery into the attack. Industrial organisations should of course also take important security steps in ensure their networks and digital assets are protected from attacks, particularly as operation technology and IT technology is increasingly becoming more converged. This includes baselining devices on the network to gain a clear understanding of all the possible entry points attackers could take advantage of. Once operators have an inventory of the devices on the network, they need to ensure they are properly secured and that any vulnerabilities are patched or mitigated and supported with a robust vulnerability management program. Operators should also use ICS cyber security tools, which can quickly identify misconfigurations and irregularities, preventing disruptions, safety incidents, expensive repairs or loss of revenue. CNI organisations should also look at security solutions which can monitor networks, in real-time, and rapidly detect any changes from baseline behaviour using artificial intelligence and machine learning.
*CPO and co-founder of industrial cybersecurity leader, Nozomi Networks September/October 2019
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TURKISH ALUMINIUM INDUSTRY 47 5
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Turkish aluminium industry: A brief review The aluminium industry of Turkey has long history extending towards early years of the establishment of the Turkish Republic. The initial establishment of aluminium producing and processing companies were in the form of small to medium scale aluminium processing facilities. There is only one smelter, that was established in 1973 with a capacity of 82.000 tons of primary aluminium production. On the extrusion, rolling and casting side, the overall production capacity of Turkish aluminium producers significantly increased and today Turkish Companies import approximately 1.5 million tons/annum of aluminium and products, mainly in the form of primary aluminium. Almost half of the imported aluminium is converted to final products for local consumption, whereas half of the production facility is serving to the international markets. Average net imports reaching to 700.000 tons for the last five years. As seen in the following graph, Turkish aluminium industry was able to double its production capability, in the last 10 years. The characteristic of the Turkish aluminium industry is depicted as its high import dependency. Fig 1. Turkeyâ&#x20AC;&#x2122;s aluminium imports have reached to USD 3.9 million in 2018, doubling in the last ten years: Aluminium represents 1.5% of Turkeyâ&#x20AC;&#x2122;s imports and 1.6% of all exports, and therefore considered as one of the strategic industrial materials pumping the national economy. With this import dependency, Turkey is the 7th largest primary importer worldwide. The following figure shows the wide distribution of import sources by
Import & Export trends Avg net imports last 5 years: 700.000 tons
Total of exports Total of imports
1.600.000 Total imports of aluminium and Al products
1.400.000 1.200.000 1.000.000 800.000 600.000 400.000 200.000 2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Fig 1.Aluminium imports and exports of Turkey, showing the increasing trend in the production capability
country. As also shown the Fig 2, primary aluminium represents more than 60% of the aluminium imports. These two figures clearly demonstrate that the Turkish aluminium industry established itself as import dependent large scale processing facilities. Turkish Aluminium producers extended production capabilities to serve global needs: The industry has shaped itself to process primary aluminium and semis, to produce final products for the needs of transport, construction, packaging, aerospace and other commercial implementations. Parallel to the growth rate of imports, local consumption and export capability has increased as well. Rolling and extrusion represents the main share of the export capability, while automotive and construction industries, as seen in many other countries. The growing investment
Supply source of aluminium for Turkey
to aluminium industry in Turkey, coupled with the currency fluctuations, has helped the Turkish aluminium companies to cope with tough competitive market environment. This is quite typical to several other local industrial manufacturers. In any case, low currencies since mid-2018 has made Turkish aluminium production companies to strengthen their competitive edge in the international markets and that made Turkish aluminium industry of Turkey, a global manufacturing base. There are similar to the other parts of the world. Fig 3. Aluminium consumption in Turkey is in increasing trend over the last 10 years, except the recent economic slowdown in the economy, in 2018, the per capita consumption has been in the increasing trend. Current per capita consumption is around 11 kg/person, and still has a large potential to grow. In Turkey, there
1.800.000
Aluminium imports of Turkey (ton)
1.600.000 1.400.000
Fig 2: Aluminium supply sources by nations (2018) and types of aluminium and product imports
1.200.000 1.000.000 800.000 600.000 400.000 200.000
-
2006 2007 2008 2009 2010 2011 2012 2013 2014 2025 2016 2017 Unwrought Extrusion Rolling Products Wire Powder Scrap
Fig 2. Aluminium supply sources by nations (2018) and types of aluminium and product imports
Aluminium International Today
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48 TURKISH ALUMINIUM INDUSTRY
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Aluminium exports of Turkey (ton) 800.000 600.000
Products
400.000
Rolling Extrusion
200.000
-
2006 2007 2008 2009 2010 2011 2012 2013 2014 2025 2016 2017 Extrusion
Rolling Products
Unwrought
Scrap Wire,cable
• Part of Turkey’s primary Aluminium imports are used for manufacturing of parts and goods supplied to global markets. • Quality and wide manufacturing capability of Turkish Aluminium Industry has yielded a well balanced world wide network of product based customers and services
Fig 3. Turkey is a worldwide supplier of aluminium products and a key player in global aluminium markets
are around 20 companies produce ingot and billets, around 100 companies in the field of extrusion, 20 companies in the rolling field registered in the international markets. With this size and capabilities, Turkish aluminium industry is one of the key players of the world aluminium markets. TALSAD, The Aluminium Industry Association of Turkey: TALSAD is one of the oldest Industry Associations of Turkey, established in 1971. Almost half century of Industry Association activities brought Turkish aluminium industry to its key position in global markets. As the leading representative of the Turkish Aluminium Industry, TALSAD works for sustainable growth and development of the aluminium industry in local and regional markets, development and implementation of new and advanced technologies, implementation of good practices in health, safety and environment and works to develop strong local and international partnerships. Turkish Aluminium Industry has been spread over a wide range of segments and industrial sectors including extrusion, rolling, casting, billet and ingot production, architectural and industrial
Above: Aluminium Consumption (Turkey) (Ton) Below: Aluminium Consumption per capita Kg/year
applications including primary aluminium production. TALSAD has been a strong platform for the development of the aluminium industry through new industrial applications, research and development. 9th International Aluminium Symposium and the International Aluminium Fair Aluexpo is the most import industry activity of the region: The 9th International Aluminium Symposium to be held in Istanbul on October 10th and 11th, 2019, will host September/October 2019
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Aluminium consumption in Turkey, is under pressure due to slow down in economy
around 80 high quality technical and scientific articles, joined by the leading universities of the nation and international world. The conference has received the support of leading ındustry organizations such as European Aluminium Association, Global Aluminium Foil Association, Aluminium International, World Aluminium, CRU and several local and international sponsors. The event is expected to mark Istanbul, as one of the regional centers of the world aluminium trade. � Aluminium International Today
29/08/2019 14:58:28
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BRAZING 51 5
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Brazing basics ‘Thru-process’ temperature profiling a means to achieve process understanding, control, optimisation and validation. By Dr Steve Offley, Product Marketing Manager, PhoenixTM Ltd
In the automotive and increasingly the aerospace industries aluminium brazing is key to many of the manufacturing processes used to produce radiators, condensers, evaporators etc. The quality of the brazing process is important to the performance and product life for its intended function. A critical requirement of the brazing process is the optimisation and control of the product temperatures during the complete brazing process. A valuable tool to achieve such requirements is the use of ‘Thru-process’ temperature profiling as a direct alternative to the traditional trailing thermocouples as discussed in the following article. Obtaining the product temperature profile through the brazing furnace gives you a picture of the Product/Process DNA which provides you with the data to allow control, optimisation and validation of this key manufacturing step. The basic brazing principle and its temperature dependence Aluminium brazing employs the principle of joining aluminium metal parts by means of a thinly clad soldering ‘filler’ alloy, whose melting point is lower than the base/parent metal. As part of the brazing process, control of the product temperature is critical to achieve selective melting of the filler alloy 580-620°C (10761148°F) to allow it to flow and fill the joints between the parent metal substrate without risk of melting the substrate itself. Often the difference between the melting Aluminium International Today
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Left: Fig 1. PhoenixTM HTS08 ‘thru-process’ temperature profiling system enters the CAB brazing furnace with product being monitored
points of the two materials is small so accurate temperature monitoring through the entire furnace is critical to the success of the brazing process. It is important though to not only focus on the absolute temperature but also ramp rates, time @ temperature and temperature uniformity of the entire product and/or the furnace. Controlled cooling of the filler further results in a solid brazed joint between the elements of the parent substrate. Critical challenges of the Brazing process Prior to any brazing process it is important that the substrate surface is prepared correctly to allow the brazing process to work correctly. As we all know with home DIY when painting the surface preparation phase is critical to the end result! Surface preparation before brazing may involve thermal degreasing where the substrate temperature is elevated to drive off lubricants.
A second more important procedure is the removal of any surface oxide layer to allow wetting, and so flow, of the brazing filler alloy over the parent substrate. Unfortunately, aluminium is easily oxidised and the resulting aluminium oxide (Al2O3) prevents such wetting process. Prior to brazing therefore, the oxide layer needs to be eliminated. Cleaning of the substrate layer is achieved in most cases by the application of a corrosive flux which in a molten state dissolves the oxide layer. The type of flux used must be matched to the application substrate and filler alloy composition. A common brazing process used today is that of the Nocolok Process® in which the flux is potassium fluoroaluminate K1-3 AlF4-6 a white powder deposit. For the reasons discussed above elimination of oxygen and especially water from the brazing process is a critical requirement so the furnace is generally run under a nitrogen atmosphere (Controlled Atmosphere Brazing ‘CAB’ Oxygen < 100 ppm, Humidity < -40°C)) or gas free vacuum environment (Vacuum 10-4-10-6 mBar with magnesium as 02/H20 scavenger). The design and construction of monitoring systems needs to be carefully considered as discussed later, to ensure that the furnace atmosphere is not contaminated (oxygen and water) in any way. Fig 2. PhoenixTM PTM1210 Data logger with 10 thermocouple channels and 2-way RF telemetry communication option
September/October 2019
29/08/2019 15:04:40
52 BRAZING
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Design Principles and Challenges of a ‘thru-process’ Brazing Furnace Monitoring system The ‘thru-process’ profiling system concept is based on the principle of sending a data logger through the brazing furnace which is protected from the heat and harsh brazing environment by a thermal barrier. Multiple thermocouples (typically 10) connected to the product test piece (radiator), connected directly to the data logger (See figure 2 PTM1200 Data Logger), measure the product temperature (and furnace) as it travels through the furnace storing the information in the data logger memory. This data can with a RF telemetry option also be transmitted live via a 2-way RF telemetry communication link out of the furnace directly to a monitoring PC.
Custom Designed CAB Brazing Thermal
CASE STORY PhoenixTM work with major automotive radiator manufacturer customising a brazing barrier solution to meet their specific application needs. In 2016 PhoenixTM was approached by a major automotive radiator manufacturer, USA. The manufacturer had a specific need for a reliable CAB brazing monitoring system that would withstand heavy use, approx 45 runs per week, but which would be easy to install on their
multiple CAB lines. As part of the collaborative relationship the existing PhoenixTM TS08 brazing barrier design, already used by the customer, was subtly modified to meet the customer’s specific needs as detailed below.
Easy, Quick, Reliable Protection • Thermocouple tray was fitted with a probe guide to allow controlled exit of the thermocouples in a bound configuration for easy safe routing direct to the test piece radiator being monitored. • New simple tray faceplate securing method ‘No Catches’ - quick vertical cotter pin locking mechanism with pin lanyard to preventing loss during operation. The customer was quoted as saying in response to the new barrier design “The new barrier is great; the operators love them. All those design iterations paid off.” The TS08 design of barrier used since 2011 has proven to be very successful with a life span far in excess of anything achieved with the conventional unprotected glass cloth/insulation. It is estimated that barriers supplied back in 2014, which have seen routine use over five years and are still operational, have accumulated in excess of 2500 successful profile runs without damage or any wear problems. Over the same period many conventionally designed barriers have been scrapped due to HF acid damage of cloth and microporous insulation. The customer for this reason has now standardised on the TS08 design for all their CAB profiling activity.
Fig 3. Damage to a conventional Thermal barrier design from flux materials reacting with moisture to form corrosive HF
The resulting temperature profile can be reviewed, analysed and validation report generated. As the system is compact and travels with the product there is no need to use cumbersome and potentially hazardous challenges of feeding (and retrieving) long thermocouples through the furnace as required in the use of traditional trailing thermocouples. Keeping thermocouple lengths to a minimum eliminates the risk of the thermocouple wire becoming tangled in the conveyor mesh and potentially being damaged during use. Monitoring as part of a full production run is possible to allow accurate measurement under normal product load conditions and without compromising line productivity. Innovative Thermal Barrier Design The thermal barrier has the job of providing thermal protection to the data logger. Although this is the case for aluminium brazing the barrier also needs to be designed in such a way as to avoid damage to itself from potentially hostile corrosive chemicals generated in the furnace and prevent contamination of the September/October 2019
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New Face Plate Lock Mechanism
Process Monitoring Focus
Requirements
Implications if not achieved
Heating Rate
Average heating rate of 20 °C/min
Slow heating rates flux can dry out and become
Up to 45 °C/min
ineffective. There must be molten flux present when
filler reaches its melting point.
Maximum Brazing Temperature
Above 577 °C
Possible problem with excessive substrate erosion
Typically, 600 °C +/- 5 to 10 °C
from filler metal pool at higher temperatures – Filler
metal erosion
Temperature Uniformity
At Brazing Temperature, the product
Need to guarantee braze quality over whole product
variation should be <+/- 5 °C
Time @ Braze Temperature
No longer than 3- 5 mins
Filler metal erosion of substrate alloy. (Silicon penetration into base metal)
Table 1. Critical Monitoring Requirements for the CAB brazing process
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54 BRAZING
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pressure Nitrogen (N2(g)). The barrier construction is designed to allow the free flow of nitrogen from rear inlet nozzle through the entire barrier. To overcome heat conduction issues with the metal tray, thermal breaks are incorporated, to limit heat penetration via conduction to the data logger.
1. PhoenixTM Data logger with 6, 10 or 20 Channels 2. Front loading logger tray with encapsulated thermal insulation protecting from HF 3. Thermal breaks reduce heat conduction to logger 4. Heat sinks provide additional thermal protection employing phase change technology 5. Mineral Insulated Thermocouple inserted into radiator fins 6. Rear barrier optional Nitrogen feed nozzle for pre-run purging of insulation and barrier cavity of air(02(g)) Fig 4. Unique TS08 CAB brazing barrier design to give low height thermal protection to the data logger. Designed with front loading logger tray and metal construction to limit exposure of insulation and cloth materials to corrosive HF. Available with nitrogen purge facility option to remove any risk of O2 (g) outgassing into the furnace.
CAB atmosphere from barrier outgassing materials. Traditionally thermal barriers are manufactured employing micro-porous block insulation wrapped in high temperature glass cloth. Moisture trapped in the insulation block, during use, is released within the barrier cavity where it can form hydrofluoric acid in combination with chemicals in the brazing flux. The highly corrosive HF acid, over only a short period of time, can cause significant damage to both the barrier cloth and insulation. This compromises the integrity of the barrier, reduces its thermal performance and potentially creates a dust contamination risk to the process. Air trapped in the micro-porous insulation block and within the barrier cavity during heating can expand and escape from the barrier into the furnace. Obviously being made up of 21% Oxygen (O2 (g)) the air will contaminate the CAB environment
and potentially create a risk of aluminium oxide formation and resulting wetting/ brazing problems. To eliminate the damage to barriers, extend operational life expectancy and minimise outgassing of air (O2(g) or moisture PhoenixTM developed a unique new TS08 specifically for the demands of CAB brazing. As shown in Figure 4 the logger draw loading mechanism significantly reduces the amount of insulation cloth that is exposed to the aggressive flux and the metal surround gives added integrity. Prior to supply the insulation block is preheated in a high vacuum and back flushed with nitrogen (N2(g)) to drive out any air trapped in the porous insulation structure. For processes where any air outgassing is a significant contamination risk it is possible, with specific barrier configurations, for customers to purge the small barrier cavity of any remaining air with a supply of low-
Fig 5. Thru-process temperature profile of a typical CAB brazing furnace showing critical temperature transitions
September/October 2019
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Unveiling the mystery of your Brazing furnace with a ‘thru-process’ temperature profile trace As discussed previously the need for accurate control of the brazing process is critical to the quality of the braze and hence integrity of the finished product. The key temperature transitions/phase of the process are clearly shown on a typical temperature profile shown below in Figure 5. In Table 1 a summary of the target temperature transitions in the CAB Brazing process and the impact on process and possibly the quality of the brazed final product is provided. The PhoenixTM brazing system is supplied with Thermal View Plus software which is designed to provide full analysis and reporting tools, for monitoring the brazing process, against the monitoring requirements detailed in Table 1. Complimenting this software, a survey software option is available to allow running temperature uniformity surveys in accordance with CQI-9 using the ‘plane method’ (CQI-9 Standard Section 3.4.2 and Table 3.4.2.). Overview The PhoenixTM ‘Thru-process’ brazing system provides a rugged, reliable and clean solution for performing product temperature profiling of CAB brazing furnaces. Providing the means to Understand, Control, Optimise and Certify the brazing heat treat process. � Contact www.phoenixtm.com
Fig 6. Thermal profile graph displayed in the PhoenixTM Thermal View Plus software package
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58 FLUORSPAR FOCUS
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AlF3: Fluorspar supply Is relief in sight? By Mike O’Driscoll
SepFluor Plant: Sepfluor’s Nokeng Fluorspar Mine Project, South Africa, pictured here under construction in January 2019; now complete and ramping up to full production. Courtesy SepFluor.
Without fluorspar, you can’t make aluminium fluoride (AlF3), and without AlF3, you can’t make aluminium. However, there are relatively few commercially developed fluorspar sources worldwide, and the largest producing country is now facing cutbacks, while new suppliers have been facing delays in start-up. With the aluminium industry poised as it is, with a deficit in supply meeting growing demand, AlF3 producers should be assured of growing demand for the foreseeable future – but will they be able to secure adequate supplies of fluorspar? Fluorspar input to aluminium Fluorspar is a mineral composed primarily of calcium fluoride (CaF2). Commercial grades are generally categorised by CaF2 content: metallurgical grade, “metspar” (60-85% CaF2) is mainly used as a fluxing agent in steelmaking, but is also used in cement clinker manufacture; ceramic grade (85-96%) used to make certain glasses and ceramics; and acid grade, “acidspar” (>97%), accounting for 60-65% of total fluorspar production, is used to make
Gulf Fluor Plant: Gulf Fluor’s 60,000 tpa AlF3 plant, Abu Dhabi, started in 2015: the world’s fifth largest producer and largest in the region, now supplying Emirates Global Aluminium with 45,000 tpa AlF3, previously imported from Tunisia and Italy. Courtesy Gulf Fluor.
hydrofluoric acid (HF) the precursor to a wide range of fluorochemicals (fluorocarbons, fluoropolymers). The primary aluminium production process consists of three stages: Bauxite mining, refining of bauxite to alumina, and the smelting of alumina to aluminium. Acidspar is the critical ingredient for manufacturing aluminium fluoride (AlF3) used in the smelting stage. The Hall-Heroult process is used to produce aluminium metal by electrolytic reduction of alumina which takes place in shallow rectangular cells, or “pots”. AlF3 is a critical additive to the molten electrolyte in this process. Adding AlF3 permits a process temperature around 850°C, considerably lower than the melting point for alumina (1,500°C), resulting in considerable energy savings. AlF3 also acts to adjust the molecular ratio of the electrolyte, and controls the thermal balance of the pot. Estimates of AlF3 consumption vary, ranging 10-23kg/tonne aluminium, a rule of thumb AlF3 specific consumption is about 18kg/t aluminium.
With world aluminium production in 2018 estimated at 64.3m tonnes (according to IAI data), this would indicate an annual consumption of about 1.1m tonnes of AlF3. Most AlF3 is produced from acidspar reacting with sulphuric acid (to form HF) and alumina hydrate via a wet (yielding a low bulk density product (LBD)) or dry (high density (HBD)) process. Smaller scale production of AlF3 is derived from fluorosilicic acid (FSA), a by-product of phosphate fertiliser manufacture. Generally, to make 1.0 tonne of AlF3 requires 1.5 tonnes acidspar, 1.0 tonne of alumina hydrate, and 1.8 tonnes of sulphuric acid. Thus some 1.6m tpa of acidspar is consumed via AlF3 in aluminium production, and makes it fluorspar’s third largest market accounting for about 25% fluorspar demand, after HF production (40%) and steel (30%). In 2018, the world fluorspar market was about 6.36m tonnes. World AlF3 production is about 1.2m tpa, of which about 90% is HBD (1.3-1.5 t/m3) and 10% LBD (<1.0 t/m3).
*Mike O’Driscoll is Director and co-founder of IMFORMED and has over 30 years experience in the industrial minerals business; mike@imformed.com ; www.imformed.com September/October 2019
fluorspar.indd 1
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South Africa 4% Mongolia 4%
Thailand 1%
Brazil <1%
Argentina <1%
Vietnam 4% Spain 3%
UK <1% Others 1%
There has been some recent production emerging from Pakistan, Thailand and Myanmar; new production is expected from Canada and South Africa World fluorspar production 2018 Primary source countries; total 5.8 m tonnes. Source: data from USGS
Where in the world is fluorspar from? China remains the world’s top fluorspar producer, accounting for around 60% of total world output of 5.8m tonnes in 2018, followed by Mexico, South Africa, Mongolia, Vietnam, and Spain (see accompanying charts). There has been some recent production emerging from Pakistan, Thailand, and Myanmar. Fluorspar supply for 2018 was reasonably tight, mainly owing to mine closures from environmental controls in China, and limited and delayed production from new and emerging producers in Canada, South Africa, and Asia. This looks set to continue through 2019 and even 2020 unless new capacity comes on stream soon. China’s hold on global export markets for fluorspar has declined significantly in recent years from the peaks of 2010-11. For the first time, in 2017 and continued in 2018, China became a net importer of fluorspar: Over 500,000 tonnes imported against just over 400,000 exported in 2018 – a reflection of the squeeze on domestic supply by environmental controls as well as increased domestic demand from a growing fluorochemicals market. The trend is expected to continue in 2019. China’s sharp increase in metspar imports was sourced mainly from Mongolia, but also Myanmar; acidspar was imported from Mexico and South Africa. The leading world acidspar exporters are Mexico, Vietnam, South Africa and China; for metspar it is Mongolia, Mexico, and China. The main regional markets for acidspar are the USA, Italy, India, and Germany, reflecting the main centres of fluorochemical manufacturing; next ranked is the UAE with its significant and relatively recent aluminium production. The main regional markets for metspar are China, Russia, Turkey, USA, Japan, September/October 2019
fluorspar.indd 2
and South Korea, reflecting the world’s leading steelmakers. The tightness in global supply in 2018 resulted in sharp price increases for acidspar which peaked at over $500/t, this has carried over into 2019, with reports that metspar prices were also rising and even overtaking acidspar levels at up to $550/t. US net import reliance on Chinese fluorspar has declined from a dominant 52% in 2009 to a mere 6% in 2018, being eclipsed by increasing imports from Mexico (at 69%), and most recently, although on a smaller scale, from Vietnam. Although the US raised tariffs from 10% to 25% on US$200bn of Chinese products on “List 3” in May 2019 which includes many minerals, fluorspar (acidspar and metspar) was excluded, while aluminium fluoride and hydrofluoric acid remain on the list. In contrast, there was certainly more of a risk from US President Trump’s recent threats to impose 5% punitive tariffs on all goods imported from Mexico beginning 10 June 2019. As it turned out, Trump backed off his plan, announcing on 7 June that the USA had reached an agreement with Mexico, and there will be a renegotiated United States-Mexico-Canada Agreement (USMCA). So US fluorspar consumers will feel somewhat relieved…..for now. New sources finally emerging Depleting high quality fluorspar reserves, high cost of acidspar production, and likely continued pressure and perhaps further capacity reductions in China, combined with continuing demand for fluorspar in chemical, steel and aluminium markets mean that there is a case for alternative and new fluorspar sources to come on line. The two players ahead of the pack are
Sepfluor Ltd and Canada Fluorspar Inc. However, each has experienced start-up delays. But prospects for progress are good. In South Africa, SepFluor’s ZAR1.7 bn(US$122m) Nokeng Fluorspar Mine open pit mine and concentrator was finally commissioned and ramping up to commercial production (180,000 tpa acidspar capacity) by end of July 2019 (a 60,000 tpa AlF3 plant is also planned). Canada Fluorspar Inc. (CFI) is ramping up production at its St Lawrence, Newfoundland, facility with a nominal target of full production capacity of 200,000 tpa acidspar. CFI is planning a new location for development of a vital marine terminal near its mining property. Elsewhere, Australian Bauxite Ltd’s wholly-owned subsidiary, ALCORE Ltd, has commenced chemical refining of bauxite into AlF3 using its patent (pending) technology at Berkeley Vale, New South Wales. A 50,000 tpa AlF3 plant is envisaged, as well as global licensing of this alternative AlF3 process via bauxite – which, if successful, could disrupt the AlF3 processing market and acidspar demand. By the end of 2019 we shall know if these new sources are fully on stream, if they are not, 2020 may see continued tight supply and upwards pressure on prices for fluorspar. All the key trends and developments in the entire fluorspar supply chain from source to market will be examined and discussed at IMFORMED’s upcoming Fluorine Forum 2019, Prague, 21-23 October, including “Trends in aluminium fluoride supply and demand” by Adam Coggins, Analyst, Roskill, UK; and “A comparison of HBD and LBD AlF3” by Evgeniy Torochkov, Head of Dept., PhosAgro Group, Russia. Full details at www.imformed.com. � Aluminium International Today
29/08/2019 15:08:52
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