Ait march april 2015

March/April 2015 Volume 27 No 2

THE JOURNAL OF ALUMINIUM PRODUCTION AND PROCESSING

TODAY

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RAW MATERIALS

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ROLLING

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DOWNSTREAM DEMAND

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CONTENTS 1

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Volume 27 No. 2 – March/April 2015 Editorial Editor: Nadine Firth Tel: +44 (0) 1737 855115 nadinefirth@quartzltd.com

COVER

2

LEADER

2

NEWS

March/April 2015 Volume 27 No 2

Consulting Editor: Tim Smith PhD, CEng, MIM Production Editor: Annie Baker

THE JOURNAL OF ALUMINIUM PRODUCTION AND PROCESSING

Sales

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International Sales Manager: Paul Rossage paulrossage@quartzltd.com Tel: +44 (0)1737 855116

UPDATES

Area Sales Manager: Anne Considine anneconsidine@quartzltd.com Tel: +44 (0)1737 855139 Sales Director: Ken Clark kenclark@quartzltd.com Tel: +44 (0)1737 855117

11

China - Year of the goat

14

Russia - Rusal: Mining capacity

17

USA - Association update

CASE STUDY

Advertisement Production Production Executive: Martin Lawrence

Circulation/subscriptions Elizabeth Barford Tel +44 (0) 1737 855028 Fax +44 (0) 1737 855034 email subscriptions@quartzltd.com Annual subscription: UK £217, all other countries £237. For two year subscription: UK £391, all other countries £426. Airmail prices on request.

Single copies £40

19

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RAW MATERIALS

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ROLLING

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Cover picture courtesy of EGA

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The AP60 Project

DOWNSTREAM DEMAND

17

Supporters of Aluminium International Today

RAW MATERIALS 24

Bridging the bauxite supply gap

27

EGA’s bauxite-alumina strategy

30

Balanced GTCs at the heart of aluminium production

33

19

Alumina refinery switches to natural gas

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INDUSTRY OUTLOOK 35 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

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Contents Template.indd 1

38

Formation of Global Foil Association

41

Improving rolling mill process control

43

Modern slitting lines

47

Run of the mill

51

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ROLLING

INNOVATION

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Downstream demand

The ‘Innovation Challenge’

PERSPECTIVES 52

Techmo answers March/April 2015

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2 COMMENT

INDUSTRY NEWS

Technology pilot Ups and downs As the demand for aluminium continues to grow, the pricing power seems to be shifting upstream to bauxite and alumina producers.

In this issue, Aluminium International Today takes a look at the global consumption of bauxite and new mining development projects in Guinea, which are planning to capitalise on this market demand.

In a ‘Raw Materials’ feature starting on page 24, I met with Danny Keating, CEO of Alufer Mining Limited to discuss the logistics, as well as the social and environmental impacts of developing a bauxite mine.

There is also an article from Emirates Global Aluminium, which details the company’s strategic intent to secure raw materials through upstream investments (page 27).

Taking a look further downstream, this issue also includes a dedicated ‘Rolling’ feature, which begins on page 38, with a look at the start-up of the Global Foil Association, following the success of the Global Aluminium Foil Roller Initiative.

More technical articles focus on how to improve rolling mill process control (page 41) and how modern slitting lines are having to meet automotive body requirements in terms of mechanical properties and tolerances (page 43).

There’s all of this, as well as an exclusive case study of the AP60 Project (page 19), a look at downstream demand (page 35) and an article from Novelis about how innovation can make your company stand out from the rest (page 51). nadinefirth@quartzltd.com March/April 2015

Nadine march april News.indd 1

Hydro has made a formal investment decision to develop a fullscale pilot plant in Karmøy to demonstrate the world’s most energy and climate efficient aluminium production.

A final build decision for the project, with total costs estimated at NOK 3.9 billion, is conditioned on Hydro securing a robust power solution for the technology pilot.

“The Karmøy pilot will be the largest investment in mainland industry in a decade, beyond oil and

gas. The decision thus demonstrates our confidence in the Norwegian technology cluster and Norway’s future position in sustainable production of aluminium in a global climate perspective,” says Hydro’s President and CEO, Svein Richard Brandtzæg.

Through the technology pilot in Karmøy, Hydro aims to industrialise the world’s most energy and climate efficient technology for aluminium production, with an ambition to reduce energy consump-

tion by 15% per kilo aluminium produced compared to the world average, and with the lowest CO2 footprint in the world.

The pilot plant is designed with an annual production capacity of approximately 75,000 tonnes, with a possible start-up in the second half of 2017, at the earliest.

Project costs are estimated at NOK 3.9 billion, including NOK 1.5 billion in support from Enova. EFTA’s surveillance authority, ESA, has recently approved this support.

Alba: Rectiformer on Line 5 Aluminium Bahrain B.S.C. (Alba), completed the integration of an additional Line 5 Rectiformer (R50).

The addition of R50 will further enhance Alba’s ability to meet future creep capacity objectives and provide added backup protection.

The project, managed by Alba Power Department, was achieved with 223,000 man-hours of work without a single LTI, thus strengthening Alba’s reputation as one of the leaders of workplace safety.

The project was successfully exe-

cuted in 22 months without impacting metal production.

Speaking on this achievement, Alba’s Director for Power, Amin Sultan said: “Alba is committed to remain a globally competitive smelter, and continually focuses on lean management and operational efficiency. Completion of this project is a very good example of coordinated efforts of interdepartmental teams and I applaud their efforts for the emphasis placed on safety.”

Refinery turns to natural gas The Alcoa alumina refinery in San Ciprian (Lugo, Spain) has officially transitioned from fuel oil to natural gas following the completion of a new gas pipeline.

The US$25 million investment to convert the refinery to natural gas is consistent with the company’s strategy to create a lower cost, globally competitive alumina business.

“We are increasing the ability of our San Ciprian refinery to compete on a global scale by converting the facility to a secure supply

of natural gas, which is lower in cost over the long term and a cleaner alternative to fuel oil for refining,” said Alan Cransberg, President of Alcoa Refining. “The San Ciprian team has worked diligently to make this transition happen and we’re extremely pleased to see the pipeline inaugurated.”

The facility’s shift to natural gas was designed to reduce energy costs at the refinery by US$20 per metric ton compared to historic levels, supporting the company’s goal to improve its position on the

alumina cost curve to the 21st percentile by 2016. At Alcoa’s 2014 Investor Day, the company said that its position on the alumina cost curve had improved to the 25th percentile in 2014 from the 27th percentile in 2013.

The refinery’s transition to natural gas also enables Alcoa to reduce the facility’s greenhouse gases, cutting CO2 by 30% and eliminating SO2 emissions.

Find out more in a detailed article on page 33.

For up-to-date news & views www.aluminiumtoday.com Aluminium International Today

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INDUSTRY NEWS 3

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Novelis invests in Oswego Novelis has announced the completion of a $48 million investment in its automotive scrap aluminium recycling facility in Oswego, N.Y. It expands upon the company’s recent growth in Oswego to meet the increased demand for aluminium automotive sheet in North America.

Including this recycling centre, over the past five years, Novelis has invested more than $400 million in Oswego and hired more than 430 new employees, with around

250 additional jobs planned by the year 2020.

The recycling investment includes a new 81,000 square-foot building capable of processing, sorting and storing automotive scrap aluminium.

Additional investments were made in infrastructure improvements such as road and parking upgrades to handle increased truck traffic.

“As the leader in automotive closed-loop recycling, one of

our top priorities is to create a sustainable supply line between Novelis and automakers, which will preserve the aluminium’s value, reduce greenhouse gases and increase economic efficiencies for our customers,” said Marco Palmieri, Senior Vice President, Novelis and President, Novelis North America. “This investment will help us meet new demands of automakers as they turn towards lightweight aluminium to create more fuel-efficient vehicles.”

Aluminium industry drives recycling agenda for Europe On the occasion of the 13th International Aluminium Recycling Congress, the European aluminium industry reaffirmed its ambition for a long-lasting circular economy, expressing high expectations for a new and improved waste proposal from the European Commission later this year.

Speaking at the Congress, Chair of the EAA’s Recycling Division Roberta Niboli commented “In Europe and across the globe, we are faced with increasingly limited resources and the environmental and economic challenges that arise as a result.

“By taking concrete steps to promote resource efficiency in Europe and new models to guarantee a closed recycling loop, we can secure a steady supply of recyclable material to society, reduce our dependence on foreign imports and turn waste into new, innovative products over and over again.

Recycled aluminium makes sense both from an economic and an environmental perspective and is instrumental to the circular economy.”

EAA Director-General Gerd Götz added “The aluminium industry has high expectations for an ambitious and improved proposal for Europe’s circular economy this year.

It is crucial for the European Commission to deliver a new package focused on improving collection and sorting processes, eliminating the landfill of post-consumer recyclable waste, and driving investment in the recycling value-chain in Europe. Inventiveness throughout the process, from sorting and bottom ash collection to innovative approaches to built-in recyclability for end products, is the key to the sector’s long-term success.”

Hosted by the European Alu-

Aluminium International Today

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Scharf-Bergmann, head of Recycling in Hydro’s Primary Metal business area.

Utilizing x-ray transmission and several other sorting technology elements, the plant is set up to sort 36,000 tonnes of aluminium scrap per year.

The plant, which is located in Dormagen, Germany, will supply Hydro’s recycling plants in Eu-

GLAFRI leads to Association Supporters of the Global Aluminium Foil Roller Initiative (GLAFRI) have decided to turn this activity into a legal trade association.

This follows the success of GLAFRI so far and the supporters have decided to formalise the initiative by creating a trade body to continue and develop its work.

Find out more on page 38.

Open Energi joins ALFED The Aluminium Federation (ALFED), the body that represents the UK aluminium sector, has welcomed Open Energi as a member.

Aluminium Federation Chief Executive Will Savage said: “High UK energy costs are a significant issue for many ALFED members, as they threaten UK competiveness in the sector. Open Energi’s offer is therefore likely to be of interest to many companies in our industry, and I look forward to a long and productive relationship.”

Combilift: €40 million investment

minium Association, the 13th International Aluminium Recycling Congress convened more than 120 experts from across the world involved in aluminium recycling.

Participants engaged on highly relevant and topic issues relating to market trends, the deployment of state-of-the-art technology and the latest political developments in the field of aluminium recycling.

Read a full report of the cogress in the May/June 2015 issue of Aluminium International Today.

Investing in sorting To further strengthen its activities in aluminium recycling, Hydro has acquired WMR Recycling GmbH (WMR) in Dormagen, Germany, from Kural GmbH and Kurth Grundstücksverwaltungs UG. “The scrap-sorting technology in the WMR plant is the most advanced in the world, and we will now hold the patented rights to this technology,” says Roland

IN BRIEF

Combilift Ltd. is to invest €40 million over the next two years in a new manufacturing facility, which will also create 200 additional jobs over the next five years.

This expansion will enable the company to proceed with its plan to double its current €150 million turnover over the next five years.

Combilift has recently purchased 40 hectares of industrial zoned land on the Monaghan by-pass where the new purpose-built, 40,000 square metre, greenfield manufacturing site will be built. This will include a dedicated Research and Development building and adjoining administrational offices and will be more than double the size of both of the company’s present manufacturing facilities.

rope with shredded and sorted post-consumed aluminium scrap.

Hydro’s plant for recycling of used beverage cans, which is prepared for construction in Neuss, close to Dormagen, will share several of the technology elements from the WMR plant, optimised for closed loop recycling of used beverage cans.

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4 INDUSTRY NEWS

IN BRIEF Hycast celebrates 25 years Hydro’s fully owned casthouse technology provider, Hycast, has recently celebrated 25 years.

Established in 1990, Hycast was set up to manage and assure that Hydro had a leading edge within melt refining and casting technologies.

“Not only are we celebrating our 25-year-long history, we are also celebrating 25 years without any work-related injuries to our employees,” says Jansen.

Association hits 100 members The Aluminum Association has announced its 99th and 100th member companies – The Schaefer Group, Inc. and Aluminum Shapes, LLC. One hundred members is a record for the 80-year trade association, which represents the North American aluminium industry. The additions come at a time when the broader industry continues to thrive – in the United States alone, aluminium companies have committed to more than $2.3 billion in domestic plant expansion since 2013 to capture anticipated demand growth.

Air Products microsite Air Products recently launched a new microsite dedicated to the non-ferrous metals industry.

The site includes a wealth of information and downloadable content, including videos, articles and relevant industry links, all aimed at helping nonferrous metal workers maximise their productivity and yield.

Visit the microsite today: www. airproducts-nonferrous.com

Alba wins 2015 Green Era Award Commenting on this achievement, Alba’s Chief Operations Officer, Isa Al Ansari said: “Alba continues to make great strides in its positive contribution to a ‘greener’ world.

We are proud to win the award as it recognises the company’s ongoing commitment to responsibly manage its operations, thus making a positive impact on the environment.”

For up-to-date news & views www.aluminiumtoday.com

Alcoa opens wheel plant Alcoa has officially opened its expanded wheels manufacturing plant in Hungary.

The larger facility doubles Alcoa’s capacity to produce its Dura-Bright EVO surface-treated wheels compared to 2014 production levels. The expansion will enable Alcoa to meet growing European demand for its lightweight, durable, low-maintenance aluminium truck wheels.

Construction of the US$13 million (HUF 2.8 Billion) expansion was completed on schedule and will create 35 new permanent

jobs in Hungary once the facility reaches full capacity. Demonstrating its support for the project, the Hungarian Government agreed to contribute US$4.4 million (HUF 1 billion) through its Regional Operative Programme, a government-led economic development initiative.

“Alcoa has enjoyed a long and very successful history in Hungary and we look forward to building on this positive track record with this expansion,” said Dr. Béla Forgó, Country Manager of Alcoa Hungary. “In addition, today Alcoa

launched a pilot project with the regional Székesfehérvár city bus system to demonstrate the economic and environmental benefits of our wheels for public transportation.”

Under the pilot programme with the regional Székesfehérvár city bus operator, a number of buses will be outfitted with Alcoa’s wheels.

Bus operators in other municipalities have realised up to five percent fuel savings after converting from steel wheels to Alcoa’s forged aluminium wheels.

Next gen of aerospace alloys The University of Sheffield Advanced Manufacturing Research Centre (AMRC) will lead a new £6 million European-funded project to develop an advanced lightweight alloy for the aerospace industry.

The MMTech project involves manufacturers and research institutions from across Europe, including two small companies from the Sheffield city region’s advanced manufacturing cluster.

The project will develop new ways of working with an advanced material called gamma titanium aluminide.

“Titanium aluminide is very light and strong, particularly at high temperatures, which makes it a very attractive material for aero engine components,” says Professor Keith Ridgway, executive dean of the University of Sheffield AMRC. “Unfortunately, it is notoriously difficult to use. This project will examine new powder production methods, and new casting, machining and 3D printing techniques.”

The research consortium includes two Rotherham-based SMEs – precision engineer Ad-

vanced Manufacturing (Sheffield) Ltd, and technology development specialist Teks Sarl Ltd – as well as industry partners from France, Italy and Spain.

The project will also involve specialist researchers at the University of Strathclyde and Imperial College London in the UK, and Mondragon University and the IK4-Ideko research centre in Spain.

MMTech is funded (pending due diligence) by the European Commission’s Horizon 2020 programme for industry-led research and development.

Red Brick adopts evercan Novelis and Red Brick Brewing Company, Georgia’s oldest operating craft brewery, have announced that Red Brick will now offer its beer in aluminium cans made from Novelis’ evercan – the world’s first certified high-recycled content aluminium can sheet.

Red Brick will expand its beverage packaging options to include evercan aluminium cans for all of its year-round offerings, beginning with Laughing Skull Amber Ale, and followed by its signature Hoplanta India Pale Ale in March 2015. Red Brick plans to expand

its use of the new packaging line, introducing several new styles available exclusively in evercan in

the coming year, starting with its new spring seasonal Hibiscuwit, a Belgian Wheat Ale.

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6 INDUSTRY NEWS APPOINTMENTS Alexandria Industries Alexandria Industries has announced the addition of Duncan Crowdis (pictured below) to its Board of Directors.

With nearly 40 years in the aluminium manufacturing business, Crowdis served in various technical, operations, marketing, sales and management positions, helping strengthen the industry to where it is today.

www.aluminiumtoday.com

Outotec completes Kempe acquisition Outotec has completed the acquisition of Kempe Engineering’s aluminium smelter technologies as well as service and spare parts businesses in the Middle East and Africa.

The acquisition of Kempe will strengthen Outotec’s technology and service business in the Middle East and Africa, doubling the in-

stalled base and providing new capabilities to expand the service business in the region. Kempe will also bring additional best-cost country sourcing and a manufacturing facility in the United Arab Emirates.

A large amount of Kempe’s proprietary equipment will complement Outotec’s aluminum product portfolio and enable further growth

of Outotec’s equipment and spare parts business globally.

The annual sales of the acquired businesses are approximately EUR 25 million, and Outotec plans to double the business volume in the next few years. Nearly 400 of Kempe’s employees will join Outotec’s team of nearly 5,000 employees worldwide.

Sapa teams with Ford F-150 Alcoa Alcoa has announced that its Board of Directors has elected L. Rafael Reif a director of the Company effective March 2, 2015.

Dr. Reif, 63, is president of the Massachusetts Institute of Technology (MIT), the worldrenowned educational institution of science and technology.

ALFED UK Ian Oliver joins The Aluminium Federation (ALFED) as marketing and communications manager.

“This appointment comes at an exciting time both for the aluminium sector and for ALFED,” said Will Savage, ALFED chief executive.

GARMCO

Sapa has announced its partnership with Ford to supply the allnew F-150 with structural aluminium tubing, and provide on-going development support for future aluminium extrusion applications.

The 2015 Ford F-150 features a high-strength, military grade, aluminium-alloy body. Despite lighter weight, engineers indicate

that a truck body using aluminium can equal or outperform steel in overall strength and dent resistance, depending on the type of material used, its thickness and how the structure is designed and assembled. For the F-150, a global team of Sapa engineers and metallurgists rigorously tested and analysed the extruded aluminium

Manufacturer rebrands Alcoa A UK aluminium manufacturer is aiming to double its turnover in the next three years with a complete rebrand to target new markets, helped by more than £600,000 in ongoing funding support from Yorkshire Bank.

Birmingham Aluminium Ltd is one of the UK’s leading manufacturers of aluminium components, offering services to

a wide spectrum of industries including retail, electronics and leisure.

The rebrand will consist of a new logo and name, BAL GROUP: Global Aluminium Solutions. The new identity maintains the history and heritage of Birmingham Aluminium but reflects the international nature of the business today.

Gulf Aluminium Rolling Mill Company (GARMCO), the Bahrain-based international aluminium rolling mill has recently approved the appointment of a new CEO, Mr. Jean-Baptiste Lucas, who will join the company from 15 March 2015.

Photo: L to R - Stefan Kucharczyk, joint managing director; James Oliver, relationship manager at Yorkshire Bank; Steve Kane, joint managing director.

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before Sapa began production for Ford.

“Our metallurgy and production teams were really excited by this opportunity to show our development and manufacturing capabilities to a major automaker like Ford,” says Jack Pell, vice president of commercial sales for Sapa’s extrusion operations in the Americas.

acquires TITAL Alcoa closed the transaction, which was announced on December 15, 2014, after receiving all of the required global regulatory approvals.

TITAL is a leading manufacturer of titanium and aluminium structural castings for aircraft engines and airframes. This acquisition strengthens Alcoa’s ability to capture growing demand for advanced aircraft engine components, in particular, those made of titanium.

Alcoa is implementing a robust integration plan to support TITAL’s growth and to further improve productivity, primarily driven by procurement, internal metal supply, manufacturing optimisation and leveraging Alcoa’s global shared services. TITAL’s business is being integrated into Alcoa’s Engineered Products and Solutions (EPS) segment.

Aluminium International Today

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8 INDUSTRY NEWS

2015 DIARY 2015 May 11 - 13 CRU 20th World Aluminium Conference* The event is valued for the quality of the presentations, the excellent networking and the business opportunities that arise from important industry meetings. www.crugroup.com/events/ aluminium

11 - 15 Rolling Technology Course Covers all the key aspects of hot and cold rolling of aluminium. www.innovaltec.com

12 - 16 Aluminium Two Thousand* The 9th edition of the Aluminium Two Thousand 2015 Congress will be held with the International Conference on Extrusion and Benchmark. www.aluminium2000.com/ index.php/en/

June 2-4 HARBOR’s 8th Aluminum Outlook Summit* The largest and most strategic aluminium market gathering in the Americas. www.harboraluminumsummit. com

16 - 20 GIFA* The platform for excellent business activities and is the indicator for the innovations which will orientate the future. www.gifa.com

July 8 - 10 Aluminium China* Held at the Shanghai New Int’l Expo Centre. www.aluminiumchina.com *Pick up a free Aluminium International Today at this event For a full listing visit www.aluminiumtoday.com and click on Events Diary

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Aleris to supply to Airbus Aleris’ new rolling mill in Zhenjiang, China has attained qualification to supply aluminium aerospace plate to Airbus.

This achievement establishes Aleris as a qualified supplier of aluminium plate from its Zhenjiang mill for use in the production of various Airbus aircraft.

Aleris’ facility in Koblenz, Germany has supplied aluminium aerospace plate to Airbus for decades. Aleris Zhenjiang, which was opened in early 2013, was modelled after the Koblenz facility to meet the needs of both global and regional aircraft manufacturers by establishing a local supply of aluminium aircraft plate in Asia Pacific.

“This qualification represents a major milestone in our growth

strategy, and we are excited about our ability to supply Airbus from two strategically important locations - Europe and Asia Pacific,” Steve Demetriou, Aleris chairman and CEO said.

In June 2014, Aleris announced the Zhenjiang plant’s achievement of Nadcap accreditation, which allowed the company to move into the final stages of qualification with Airbus and other major aircraft manufacturers. Bombardier and COMAC have also qualified the Zhenjiang facility and shipments of aircraft plate began at the end of 2014. Aleris Zhenjiang is believed to be one of the first facilities in Asia Pacific qualified to produce aluminium plate for a major global aircraft manufacturer.

Constellium invests in capacity Constellium is investing EUR22.5 million in its site located in Decin, Czech Republic.

The investment, expected to be completed by April 2016, will include a new casthouse, a new indirect extrusion press line for production of hard alloy bars and profiles, a new drawing line, and a complete refurbishment of an existing extrusion line to meet increased demand for drawn bars.

“Constellium’s continued in-

vestment in the plant in Decin will further expand our production capacity and flexibility for aluminium hard alloy bars and profiles to meet increasing demand from our automotive customers across Europe,” said Paul Warton, President of Constellium’s Automotive Structures and Industry business unit. “The investment is expected to increase Decin total shipments by 20%, from 60,000 metric tons in 2014 to 72,500 metric tons by 2018.”

GARMCO and Metals Industries sign MOU Gulf Aluminium Rolling Mill Company (GARMCO) has signed a Memorandum of Understanding (MOU) for technical and operational co-operation with Dubai-based Metals Industries (MI), the holding company for the Saif Al Ghurair Group’s aluminium and metals businesses.

According to the MOU, GARMCO and MI will work together across a number of key areas cov-

ering operational, technical and warehousing/service centre functions in order to identify prospects for mutual benefit and the capturing of synergies.

To this end, senior representatives involved in the commercial and operational functioning of each company will soon meet in Bahrain to assess opportunities and establish a plan for the implementation of the MOU.

Properzi ingots Continuus-Properzi of Milan has recently finalised two contracts (one in Russia and one in China) covering the supply of two ingot casting lines at 20 tph each.

In both cases the liquid metal will be converted by the Properzi Track and Belt type ingot casting line into ingots of 10kg.

AUMUND Brazil expands AUMUND Brazil has just opened a new Service Centre with an integrated warehouse in Ipatinga, in the Brazilian State of Minas Gerais, as a part of its After Sales Service Department.

The main goal of the Service Centre is to guarantee the availability and operation of the customers’ equipment by preventing failures through well planned and professionally executed maintenance. This includes inspections, conversions and field service activities, also for equipment from other suppliers in the market.

Rodding machines VHE of Iceland has secured a new order for rodding plant machines for a North American smelter.

Three machines to be delivered mid-2015 comprise a stub straightener, a rod straightener and an anode-rod mating station.

VHE has supplied a number of stub straighteners (pictured) to smelters worldwide and is able to offer designs suitable for all yoke configurations and stub diameters.

The machines are designed to remove stub toe-in and return stubs to the original yoke geometry.

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Innovative casthouse solutions

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Batchpilot furnace weight measurement to Optifilter, state of the art filtration and Optifine advanced grain refiner.

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DRY SCRUBBING TECHNOLOGY FOR THE PRIMARY ALUMINIUM INDUSTRY

Danieli Corus is a leader in innovative dry scrubbing technology for the primary aluminium industry. Its proprietary scrubbing technology provides the industry with a highly efficient, cost–effective and versatile emission control system. Developed to remove fluoride compounds from potline emission, the technology has been successfully adapted to remove both fluorides and hydrocarbons from the fumes emitted by carbon anode baking furnaces and green carbon plants.

The heart of the technology is the patented Vertical Radial Injector (VRI). The alumina scrubbing medium is injected into the reactor through the VRI to achieve maximum

Danieli Corus P.O. Box 10000 1970 CA IJmuiden The Netherlands T +31 (0)251 500 500 F +31 (0)251 500 501

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diffusion of the particles in the gas stream with minimum turbulence. The system offers low pressure drop, reduced recycling and reduced abrasion. The systems operate at energy consumption levels more than 10% lower when compared to competing injection systems and more than 50% lower when compared to fluidized bed scrubbers.

Danieli Corus engineers for optimum performance in each installation. Local or worldwide sourcing of components and services gives Danieli Corus the opportunity to offer clients competitive costs and superior quality every time.

Our leadership in gas cleaning technology for the primary aluminium industry is undisputed. You can rely on us.

CHINA UPDATE 11

www.aluminiumtoday.com

Year of the Goat

By Paul Adkins*

In Chinese astrology, 2015 is the Year of the Goat. In traditional Chinese zodiac stories, the goat is highly respected and brings cereal crops to humans without fearing punishment by God; similar to Prometheus in Greek Mythology. However, to most present-day ordinary people, the goat stands more for peacefulness or steadiness, not powerful enough to make great changes like the dragon or tiger.

If we had to choose between the zodiac stories and the modern interpretation, it’s the steadiness aspect which looks like being the rule for China’s aluminium industry. It is starting to look like 2015 will be a repeat of 2014 - with more smelting capacity adding more surplus metal into the market, but with a demand-side that is burdened by lack of stimulus from the macro economy, and eventually leads the entire market in the doldrums. Further, we could even see the same cycle of closures followed by government support that we saw in 2014.

Supply, defying the laws of market gravity Our most recent research shows aluminium production will be as high as 29 million tonnes (Mt) in 2015. With 2014 coming in at 27.5Mt, we see a build up of new capacity plus capacity creep from the existing fleet more than offsetting up to one million tonnes of closures.

Our research shows about five million tonnes of new projects will be completed in 2015, but the sagging aluminium price and tight credit environment will delay a good portion of that capacity.

In our research, the new capacity will be distributed among low-cost provinces like Xinjiang, Inner Mongolia and Shandong.

Among those expansion plans, the most

conspicuous one belongs to Weiqiao, also known as Hongqiao, with an additional 2Mtpa planned. Weiqiao remains profitable at the moment, although with the aluminium prices below 12,900 RMB/t, more than two thirds of Chinese smelting capacity is running at a loss.

We understand the ultimate goal of Weiqiao is to grow to 8Mtpa eventually (with no time frame given at this point).

This would put them at the size of a combined Alcoa and Rio Tinto Alcan.

One aspect of China’s aluminium industry that people need to understand is that as it grows, there’s a lag effect on production data. A potline that starts operating in 2014 will add very little metal to the 2014 production data, but it will add significantly more to 2015. Therefore, with four million tonnes of capacity that started in 2014, we expect the “capacity creep” effect to be quite large in 2015.

Remember too, that much of the new capacity in 2014 and 2013 is in lowcost Xinjiang Province, so will likely keep accelerating to rated capacity despite the low metal prices. In our estimate for 2015 production, we have allowed for a very large increase from capacity creep.

Some readers may feel our closure number is too conservative, given we said about 70% capacity is under water. But the Chinese aluminium industry has been defying the laws of market economics, or market gravity as we like to call it, for years. As of the end of 2014, the balance sheet of the Chinese aluminium industry shows 1.5 trillion RMB of total assets and 1 trillion RMB of total liabilities. The debt-to-asset ratio is as high as 67%. But the combined net profit from all of those assets was 20 billion RMB. If we divide the liability number by the net profit, the

result shows it will take a minimum 70 years to pay back all the debts, assuming a flat value and no interest. If we take the accrued interest and inflated downstream profits (inflated to reduce financing costs) into consideration, the time span would be much longer, perhaps 100 years. The Chinese aluminium industry is living on debt.

The industry has local banks and local governments to thank for the bailout.

In China, bad debts are not allowed to appear on the books at all. Considering smelters may borrow millions or billions of RMB, one bad debt write-off may trigger a collapse of a small bank, leading to a spiraling situation and a run on the whole banking system. Therefore, most of those local banks stop charging interest on the loans but keep the debts on the books. In case that doesn’t work, a debt-to-equity swap will be the ultimate approach to avoid immediate bankruptcy.

As a result, bad debts will be digested inside the system and those plants that owe the money will gradually become state-owned assets.

Demand, slowdown driven by macro economy Since the Communist Party’s Central Economic Working Conference held last December, the rhetoric inside China has shifted away from talk of achieving GDP targets, towards what the leadership is calling a “New Normal”. What this means is that the government is on one hand accepting that the economy must slow down, yet still setting targets for economic growth. The December conference set 7.0% as the target for 2015. We think this was unavoidable – any target below that would have been an admission of

*Managing Director, AZ China Ltd Aluminium International Today

CHINA UPDATE mar apr.indd 1

March/April 2015

3/9/15 1:55 PM

12 CHINA UPDATE

defeat. It also means that despite calls for stimulus, there is little to no chance of anything other than a steadying of economic conditions. In any case, it’s our belief that the real challenge facing China is not GDP growth, but the ever-increasing debt problem, of which the aluminium industry is but a small part.

Aluminium consumption in the real estate sector, which accounts for more than 40% of the total metal consumed, only rose by 10% in 2014. Total investment in real estate contracted by more than 9% compared with 2013. If the government continues to restrain the development of the real estate sector, aluminium consumption will trend down further. The transport sector, ranked no.2 in aluminium consumption, also faces a slowdown on growth, unlike what is happening in the USA. China doesn’t yet have the emissions standards that apply in the USA, and in any case, Chinese people don’t buy the same proportion of fuel-guzzling SUVs. In addition, vehicle quotas are pervasively applied in Tier 1 and Tier 2 cities where most sales should occur. China has a very count on the number of vehicles per capita, but that’s just as well, given the pollution already occurring in many major cities, not to mention the traffic snarls.

Over the longer term, vehicle sales will generate more aluminium consumption, but we don’t see 2015 being part of the future.

Two other sectors, the cable and wire market and packaging, may have the largest potential for new growth. China is still rolling out its national grid, and despite years of promises, the companies responsible for the rollout continually miss their capital targets. Perhaps this year we will see more activity. As well there is a push to replace copper with aluminium, and a new industrial standard is presently being written.

As long as more Chinese people become middle-class, goods sold in supermarkets and packed in aluminium foil will absolutely become more popular, however, we don’t think the growth will be remarkable. Consumer habits are not easy to change. China has a long tradition of drinking beer from glass, and from buying pharmaceuticals from traditional medicine suppliers, not pre-packed in aluminium foil.

In summary, demand growth will be mitigated in 2015, driven by the overall slowdown of a macro economy. We don’t think any fine-tuning on policy will impact much on the aluminium demand.

In our estimation, the growth rate in consumption will fall to 7.5%. Therefore a greater growth in supply and a mitigated growth in demand together result in a net surplus of 550Kt aluminium in 2015.

March/April 2015

CHINA UPDATE mar apr.indd 2

Fundamental to dominate the market and price to stay in the doldrums On average, Shanghai future prices were down by 1,000 RMB/t, or about 7% throughout last year. In fact, the plunged prices and tight credit conditions at the beginning of 2014 forced about 2Mtpa capacity to cut back or close. However, the ensuing rally greatly spurred restarts and expansions. Aided by government subsidies, smelters that had closed came back into the market, leading to a glut of metal supply and a falling metal price by the end of the year.

It is hard to see anything that could alter the pattern in 2015. Over-supply will remain with us, and will only get worse if all five million tonnes of new capacity enters the market. Macro economic conditions continue to put a lid on demand, while export markets don’t seem to have made any difference. By that I mean, despite record exports of semi-finished goods, the metal price is still in the doldrums. Where would the metal price be if those exports dried up?

Despite some commentators predicting huge growth in semis exports for 2015, we think the total volume exported will remain limited. The government has already increased the level of inspections of shipments to prevent from cheating on VAT refund inside China. There’s also talk of the government holding back the refund of VAT to exporters, to use the funds to support downstream consumers.

As well, several Asian and nearby export markets are already reporting surplus metal in their markets, leading to deterioration in the delivery premiums.

And some international competitors are lobbying their governments to stop Chinese metal entering their markets.

Perhaps the run-rate of exports will remain

high temporarily, but we think it will fall through the year.

Chalco recently led 13 other companies like Henan Shenhuo, East Hope, and Qingtongxia Aluminium to form a sell-side consortium with the purpose of halting the sliding metal price and moving it in the other direction. The consortium accounts for 80% of total smelting capacity in China and is said to be positioning about 1.2 million tonnes of primary aluminium into the new market. However, we don’t think their play will succeed as there is no new demand created at all, but the sellers merely use their power to force consumers into accepting higher prices by withdrawing metal from the traditional market. Consumers will react by holding back on purchases, refusing to accept a higher price for artificial reasons. As well, we think this play boarders on the edge of China’s anti-trust laws.

Oversupply to drown Chinese aluminium market The scenario of “more of the same” could even extend to the cycle that we saw in 2014. As mentioned, a number of smelters cut back in the first quarter and into April. But by May-June, local government bailouts in the form of electricity price assistance had turned that picture around.

It didn’t happen all at once, but once one company got a subsidy, pretty soon others were looking for the same help. The conditions in 2015 are nearly identical to last year, so it’s just possible we will see the same cycle – announcements of closures followed by quietly-provided assistance.

As we said, China’s aluminium industry is all about debt.

Until that debt/credit standoff is resolved, expect more of the same from the Chinese aluminium market, just like the Chinese goat indicates. t Aluminium International Today

3/9/15 1:55 PM

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14 RUSSIA UPDATE

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Rusal: Mining capacity Behind every successful mine lies the right infrastructure. By Vera Kurochkina* In the mining and metals business a company makes long-term commitments to projects and local communities and it is important to immerse yourself with the local community and participate in the building of infrastructure, organisational and social frameworks. As an international market leader in one of the largest and fastest growing industries in the world, UC Rusal understands its actions significantly affect the future of the industry and the global environment.

Mining across continents As a leading global aluminium producer, Rusal is well positioned in bauxite capacity. The durability of the company’s raw materials allows the supply of bauxites for alumina production for more than 100 years. Rusal operates eight bauxite mines in four countries: Russia (two mines), Guinea (two mines and one project), Guyana (one mine) and Jamaica (two mines). In 2014, Rusal had bauxite nameplate capacity of 22.2 mt, with 12,108 thousand tonnes mined.

The mining and processing of bauxite continues to be one of the most important sectors in the economies of Rusal’s operations. In Guinea, the mining of bauxite dominates industry and accounts for roughly 26% of GDP. In Guyana it is 25%, while in Jamaica it is 20%. In these counties the bauxite mining industry is capital intensive and ensures the employment of thousands both directly and indirectly. Rusal is one of the largest international investors and a key employer providing jobs to about 1800 people in Jamaica, 1200 people in Guinea and 500 people in Guyana. In Russia, Rusal is the only bauxite miner, with current nameplate capacity totalling at about 6.2 mt.

Bauxite is the abundant mineral in the earth’s crust however; bauxites mined in

different places have different qualities.

Many look the same at first glance but may have a completely distinct chemical and mineralogical composition with varying particle size distribution, efficiency and viscosity. In the case of Rusal, bauxite is usually mined with open pit technology and in the deposits are economically feasible to extract. The bauxite mined by the existing refining equipment in Guinea is head and shoulders above the competition in terms of quality. Guyana is the “cradle” of new types of high quality bauxites where as our Jamaican refineries are self-sufficient and work on bauxite mined within the country. The bauxite deposits in Russia keep securing the stable work of Rusal’s European smelters.

Guinean case Guinea’s economy is based on the mining sector. Bauxite is Guinea’s leading mineral resource as well as its primary source of foreign investment. Guinea is the second largest producer of bauxite in the world (with about 7% of the global output) and has the largest reserves of bauxite, estimated at 29 billion tonnes.

Guinea became home to Rusal’s first foreign project in 2001 when the company took over the management of the Compagnie des Bauxites de Kindia (CBK). The company has been expanding its presence in Guinea ever since and is proud of becoming an important part of both the country’s business infrastructure and social fabric. Today Rusal is the owner of CBK, one of the world’s largest deposits, Friguia Bauxite and Alumina Complex and also develops the Dian-Dian project. As one of the largest foreign investors and employers in Guinea, Rusal is recognised by the Government as ‘socially oriented’ giving the Dian-Dian project ‘state importance.’

Dian-Dian is the world’s largest bauxite

minefield with confirmed reserves of 564 million tonnes, and the right to develop belongs exclusively to Rusal. The realisation of the project, which began in 2014, will create and stage-by-stage increase the ability to mine, transport, process and store bauxite. The first stage of the DianDian project involves the construction of a bauxite mine with an annual capacity of three million tonnes, with the potential for a further increase of up to six million tonnes, becoming operational by 2016.

As part of the investment a new 25km road will be built to transport bauxite from the mine. The total investment for the first stage of the project will be more than USD220million. A significant part of this budget is reserved for infrastructural development in Guinea, specifically railway and port development.

The plan to develop Dian-Dian alongside building social infrastructure is an example of Rusal’s common approach towards community development. Within 10 years, the company has invested about USD125 million in the Guinean community, carrying out a significant number of projects of varying scale and duration. In particular, the company spent more than USD115 million on infrastructural development and about USD9 million on social and charitable projects. The measures undertaken by the company serve a major purpose; to bring a higher quality of life to local residents and to help spur local economic, social and cultural development, which relies on paved roads, dependable water and power supply.

Rusal’s top priority is the healthcare and well-being of the local community and Rusal is the world’s only public company to have implemented a large-scale campaign to help fight the global spread of the Ebola virus. Rusal completed a major construction project,

*Director of Corporate Communications and Board member, UC Rusal March/April 2015

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16 RUSSIA UPDATE

investing more than USD10 million, in the building of the ‘Centre for Epidemic and Microbiological Research and Treatment’ in the Kindia administrative region.

Guyanese case Guyana is world renowned for its high quality bauxite deposits, accounting for 2% of global reserves. The industry, which is centred along a coastal strip around the northern town of Linden, accounts for about 18% of the country’s total mining sector output.

Rusal has been operating in Guyana since 2004. The company signed an agreement with the Government of Guyana, which gives the company to a 90% owning stake in the Bauxite Company of Guyana (BCGI). It is a technically advanced mining facility, which develops a number of rich deposits of high quality bauxite. In 2006, Rusal acquired the assets of Aroaima Mining Company from the Government of Guyana and transferred them to the BCGI. In addition, Rusal owns licenses to develop Linden, Kwakwani and Ituni deposits groups in Guyana. Crucially, the company holds a certificate of merit from the Guyana Geology and Mines Commission as the largest contributor to government tax revenues among all bauxite industry players.

In 2013, BCGI commenced a project to develop a new deposit, Kurubuka-22, with estimated deposits of 30 million tonnes, located in Aroaima. The project includes the construction of the mine, access roads, crushing facilities, barge loading facilities, overburden stripping and rainage. The capital expenditure for the project is estimated at USD59.3 million. The planned production for BCGI’s Kurubuka-22 is 2.3 Mtp/a, meaning a full production cycle from mining to dry bauxite barge loading.

The deposit is split into two sections of 20 million tonnes and 10 million tonnes. Today the company is finishing the preliminary construction works on a smaller section, which means 350,000 tonnes are prepared for mining. In the meantime, Rusal has already built all the necessary infrastructure; 6.5km of road leading from the mine to Berbice river, the baking furnace (being moved to the right bank of the Berbice river), and the complex of bauxite bridges. The complex will also create new jobs and other opportunities for the local community.

Currently the BCGI offers the highest wages in the region and almost the highest in the country. Social benefits include free meals, accommodation, professional training and access to medical insurance.

Jamaican case Nearly 5% of the world’s bauxite reserves can be found in Jamaica. The bauxite and March/April 2015

RUSSIA UPDATE mar apr.indd 2

www.aluminiumtoday.com

alumina industry in Jamaica is 70 years old with the first exploration and development work believed to have been carried out in the 1940’s. Even though no aluminium plants have been built in Jamaica and are unlikely to be built, the industry is not purely resource-extractive. The country has well-developed alumina production infrastructure.

Rusal has been operating in Jamaica since 2007 and is a 100% owner of two vertically integrated bauxite and alumina production complexes; The Jamaican Bauxite and Alumina Industry (WINDALCO) (since 2014) and Rusal Alpart Jamaica (Alpart) (since 2011).

WINDALCO is a well-established core component of the country’s economy and since May 1952, the company has invested in the country via the construction of its Kirkvine plant, Ewarton Works and a shipping facility, Port Esquivel in St. Catherine. Since 2007, Rusal owned 93% of the complex, and in 2014 the company completed its transaction to obtain the remaining 7% of the property rights. This consolidation is in line with Rusal’s ongoing strategy to provide its plants with in-house raw materials.

Today, Rusal’s WINDALCO is the single largest employer within its operating areas, employing more than 600 highly skilled employees as well as hundreds of contractors. This industry remains one of the biggest drivers of foreign exchange earnings for the country and WINDALCO’s contribution to the nation’s development is noteworthy.

WINDALCO interacts with dozens of communities across its operating region, which spans the parishes of Manchester, Clarendon, St. Catherine and St. Ann. The company’s philosophy is to be the “best neighbour” it can be which means proactively and consistently engaging the residents of our host communities in a respectful and positive manner.

The key belief is that by building better communities, the company aids a more prosperous nation; united, healthier, more educated and empowered.

The company has made environmental management a central pillar in how it conducts business. Rusal has invested more than USD 10 million in the Artificial Reef Project in the Portland Bight Protected Area. The company also invests heavily in education and social projects in the communities of our operations. The social programmes are aimed at aiding in the development of these communities and by extension, Jamaica. The company continues to invest thousands of USD annually for CSR activities.

In the meantime in Russia Rusal’s rich bauxite deposits in Russia,

the Timan Mine (Timan Bauxite) and the North Urals Mine (SUBR), are an essential part of Rusal’s raw material base. They are located to the North-East of Ukhta (a sparsely populated region in taiga) and in Severouralsk (450km from Yekaterinburg) respectively. Together these mines employ more than 4000 people.

Timan Bauxite is a strategically important asset for Rusal in Russia, which contributes to 30% of the country’s bauxite deposits.

The mine has a rich Vezhayu-Vorykvin bauxite deposit (a part of the Middle Timan Bauxite deposit), estimated at 260 mt, with annual bauxite production capacity estimated at around three million tonnes per year. Today, Timan explores new mining opportunities with a particular focus on the Verhne-Schukorskoe deposit with estimated reserved of 53 mt.

More than 200 million tonnes of bauxite have been produced at SUBR since the commissioning 75 years ago. The mine is split into four sections: Kalyinskaya, Novokalyinskaya, Cheremukhovskaya and Krasnaya Shapochka. The forth section is close to completion in 2015 while its employees, along with equipment, will be moved to a newly developed section within the Cheremukhovskaya. The construction of a new Cheryomukhovskaya-Glubokaya mine is a major expansion project currently underway at SUBR. Construction completion and commissioning of the new mine will increase capacity of the North Urals from 3 mt to 3.3 mt. The mine has been successfully tested, confirming its operational readiness. The formal technical procedure of state approval has already began and is expected to be complete by April 10 2015, which will be known as SUBR foundation day.

Focusing on self-sufficiency Securing the supply of high quality bauxite in adequate volumes and at cost competitive prices for its alumina facilities is a critical task for Rusal. The shift to in-house bauxite is part of a largescale modernisation programme being carried out at Rusal’s alumina refineries.

The conversion will allow the company to strengthen its strategic position at its plants eliminating dependence on raw materials and decreasing alumina production costs. It will contribute not only to the economic and environmental performance of each refinery, but also will support the development of Rusal’s new Kurubuka and Dian-Dian mines and thereby create the best possible value for the company. All these will contribute to turning the company into a completely vertically integrated self-sufficient producer during the whole production process and allowing to broaden investment for Rusal’s ambitious CSR initiatives. t Aluminium International Today

3/9/15 1:58 PM

USA UPDATE 17 5

www.aluminiumtoday.com

Association update Nadine Firth* spoke with Heidi Biggs Brock** about what’s in store for 2015.

Q. What are the Aluminum Association’s plans for this year? Is it looking like another busy one?

A. Here at the Association, we are focusing on three key areas as we move into 2015 – advancing markets by promoting aluminium as the sustainable material of choice; successfully influencing public policy through legislative and regulatory engagement and continuing to enhance the industry’s already excellent safety performance.

We’re also laser-focused on the automotive opportunity. The release late last year of the aluminium-intensive Ford F-150 – the most popular vehicle in North America – marks a potential game-changer for this industry in terms of growth.

We’re united with our membership to make sure we’re capitalising on this growth, both in transportation as well as other sectors.

For the Association, this means getting good, credible information and data out into the marketplace – whether that’s a new life cycle assessment study on the aluminium beverage can, the 2015 Aluminum Design Manual for builders and architects, or the recently-released Aluminum Welding & Joining Manual, an essential reference for automotive designers and engineers on the use of aluminium alloys in high-volume vehicles.

The Association will also work to grow its public policy voice in Washington, D.C. and beyond by building out grassroots capabilities and continuing to engage with the Congressional Aluminum Caucus on Capitol Hill. And on safety, we’ll be updating some of our safety guidance materials and conducting two Casthouse Safety Workshops to share best practices on molten metal handling.

I’d encourage folks to check out our website at www.aluminum.org where we have a lot of this information available.

Q. What do you think the North American aluminium industry’s New Year’s resolution could/should be?

A. The industry – and by extension the

Association – is resolved to meet the opportunities and challenges as we look toward the potential of transformative growth for the industry. As I mentioned, the automotive market, and the transportation sector in general, is expanding for us in a big way. Since 2009, demand in the transportation sector has grown by 75% and a survey of automakers released last year anticipates that seven out of 10 pickup trucks produced in North America will be aluminium-bodied by 2025.

But we think auto is only part of the story - the global trend toward light-weighting and energy efficiency favours materials like aluminium. So, we’re making sure that to capitalise as much as possible on that macro-trend.

Q. The Association welcomed its 100th member at the end of last year – this is a great achievement!

Do you see a continued growth in membership for 2015 as the industry expands?

A. We were thrilled to welcome our 100th member in 2014 – a first for the Aluminum Association in its more than 80 year history. Our goal is to continue to expand membership in 2015. Particularly as the industry grows, we believe the more voices we have at the table the better. If your company is not yet a member of the Aluminum Association, I’d encourage you to check out www.aluminum.org/join.

Q. The North American aluminium rolling sheet industry in particular is poised for growth – how will the Association work to support its members through these exciting times?

A. Yes, we’ve already seen some major signs of growth and expansion in rolling sheet as the industry adjusts to meet the automotive opportunity. Since 2013, the industry has committed more than $2 billion to expand plant capacity in the United States alone. Based on our estimates, that will expand domestic auto sheet rolling capacity by two billion pounds over the next five to 10 years. Not

many domestic manufacturing industries today are able to point to that kind of growth so we’re very excited.

Q. There also seems to be a continued focus on lightweighting and energy efficiency; how will the Association be working with members to help drive this positive message across the industry?

A. The light-weighting trend is a big one and it’s something we try to highlight at every opportunity – with industry groups, policymakers and others. Both consumers and lawmakers are demanding greater energy efficiency and lightening the load with materials like aluminium is a key way to get there. The most talkedabout example of this is the Ford F-150, which will shed 700 pounds by using an all-aluminium body. Regardless of oil prices, environmentally-conscious – not to mention budget-conscious – consumers want to be energy efficient. This is a longterm trend we don’t see changing.

Q. Will there be a main focus for the Aluminum Association’s Spring Meeting in April?

A. Our spring meeting this year is in sunny California and the theme is “Riding the Aluminum Wave.” We’ll be talking about a lot of the major market trends we see impacting aluminium in the coming months and years. Also, since we’re on the Pacific Ocean, we’ll take the opportunity to talk about the Asian marketplace – particularly China – and its impact on North America.

These meetings are an excellent way for our membership to come together and learn about macro trends, but also to conduct a lot of value added work through our committees and divisions - working on initiatives that advance opportunities for the entire industry. It is also a terrific way for our members who are key suppliers into the aluminium industry to learn about the trends facing the aluminium industry. We hope to see many of Aluminium International Today’s readers there! t

*Editor, Aluminium International Today **President, Aluminum Association Aluminium International Today

USA UPDATE mar apr.indd 1

March/April 2015

3/9/15 1:59 PM

Since 1955

CASE STUDY 19 5

www.aluminiumtoday.com

The AP60 Project

AP60 Phase 1 is a new aluminium plant located in Jonquiere, Québec (464 km northeast of Montreal). The plant was designed to test and industrialise Rio Tinto Alcan’s (RTA) proprietary AP60 smelting technology – the platform for future generations of AP Technology™ reduction cells. The project is the first of its kind in the world and recently won the 2014 PMI Project of the year award recognising, honouring, and publicising project and team success achieved through the performance of project management practices.

Here, Aluminium International Today provides an exclusive case study.

The world class AP60 project was completed one month ahead of schedule and within the budget range. This project allows RTA to demonstrate at an industrial level, breakthrough aluminium smelter technology while employing a strong ‘Zero Harm’ HSE philosophy.

The project’s objective was clearly defined as to: “Safely deliver an industrial plant to demonstrate AP60 technology with minimal capital expenditure and a realistic schedule” Top three project achievements: 1. Novel technology implementation: The project team had to overcome a number of challenges that are unique to transfer of technology from a pilot plant level to an industrial application.

2. Exceeding the client’s expectations: The project was delivered one month ahead of the original control schedule and within the margins of the budget range.

3. Outstanding HSE culture: By striving to meet the client’s commitment to the highest standards for health, safety and environment, a world class standard for HSE was developed and implemented, setting a benchmark not only for RTA Aluminium International Today

AP 60.indd 1

but also for the construction industry in Québec. The project’s lost time injury frequency rates (LTIFR) was 0.27. Between 2003 and 2009, the average LTIFR for the Québec construction industry was 23.5.

Scope management The project team maintained a sound and coherent view of the scope, schedule and

cost. Whenever one variable changed, the project team made sure that the two remaining variables would follow accordingly. This was a fundamental factor for timely and successful decision making on AP60.

The project scope was defined based on stakeholders’ vision, technology requirements and operating needs. The

Information Client

Rio Tinto Alcan (RTA)

EPCM

SLH joint venture SNC-Lavalin and Hatch consulting engineering firms

Started

2007

Full notice to proceed (FNTP)

December 2010

Handed over to RTA

December 2012

Commissioning

Ended in December 2013

Project key figures $1.3 billion CAN 5 million site working hours 100 equipment suppliers 50 installation contractors Project Scope 38 pots operating at

570 kilo amperes

Production capacity

60,000 metric tons of aluminium per annum (t/a)

Planned Expansion

Up to 460,000 t/a

Also included

gas treatment centre, primary material warehouse facility, rodding shop, casting plant and anode pallet warehouse.

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CASE STUDY 21

final scope of work was detailed in the Facility Description Document (FDD), agreed upon, signed off by the project’s major stakeholders, and distributed to the project team.

Following the FNTP granted in December 2010, the estimate was used as the baseline control budget. Rigorous control tools were implemented to manage cost aspects. At the core of these tools was an effective change management programme, which was launched at the prefeasibility phase to continuously track the TIC, even during early studies. During execution, this programme was vital for decision-making and corrective actions.

Key success factors Integrated team The project organisation was based on a matrix principle where the project was divided into three main areas created for management purposes. RTA and SLH deployed a classical mirror organisation where each party had its clearly defined role as per standard EPCM strategy.

The main difference is that the AP60 team was a model of integration at all levels; there was a clear delineation of roles and responsibilities and a clear alignment of objectives between all groups.

Risk management One of the comments RTA used to describe the AP60 team was that the project team had an ability to see the next problem, work on it before it becomes a problem and transform it into a value improvement opportunity.

Risk management was the key approach that allowed the project to achieve success, Constant dialogue on risks was maintained on the project. All level of risks were considered including: Corporate, Execution and HSE risks.

During execution, the execution risk register was used as a strong base to Aluminium International Today

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develop a pro-active mitigation. Open discussion of risks provided an open nonthreatening forum to discuss issues.

The project same risk management approach was adopted by the major turnkey suppliers. This combined effort allowed a breakthrough of commercial barriers and the implementation of a common mitigation plan.

Procurement The project team was responsible for the full range of procurement management services (purchasing, contracting and major packages, quality surveillance, expediting and transportation logistics).

To support the project schedule, 17 packages were identified as being critical and were issued for purchase during the FEL3 to allow early engineering to start.

This approach was conducted based on a blanket-type contract including two distinct stages of award. Engineering activities were to be completed during the FEL3; while the fabrication activities were approved to start once the FEL4 (execution phase) was approved by RTA. Once the packages were issued for fabrication, a global network of expeditors and inspectors ensured that materials and equipment were delivered on time and complied with equipment specification requirements. The quality inspector was responsible for establishing an inspection and test plan (ITP) with the vendor, compliant with the project quality assurance requirements.

Equipment and materials were inspected during the manufacturing period and again prior to shipment authorisation.

The DTC contracts were established to support the technological development of the project. The contracts were designed to remove this risk and ensure the best contribution from all parties, all in accordance with the IP management plan.

The closeout of purchase orders was

carefully planned and a task force was formed by procurement, document control and project management representatives to expedite this intensive exercise. Three months after the final handover to operation, 97% of the 144 packages were commercially closed.

Change management Rigorous project control procedures were implemented throughout. One of the project’s effective change management factors, and also key to overall project success, is that the team didn’t wait for the execution phase in order to implement change management procedures. This allowed for tight control even when the scope was still taking shape and resulted in a healthy project from the start.

A major forecast exercise (Super Trend) was also held in March 2012 in order to meticulously review all forecasts and reevaluate the contingency required to complete the project. Contracting plan change request (CPCR) procedure was also put in place to manage changes to the contracting/purchasing plan (package register). The CPCR allowed the approval of a change to the project contracting and purchasing plan whenever there was no cost impact involved.

The benefit of AP60’s robust change management programme was best demonstrated when the growth of the aluminium industry created an opportunity to accelerate the future expansion of Phase 1. The Potline Busbar Expansion (PBE) was defined to facilitate future expansion without compromising the plant operation. This major scope change was requested by RTA during the execution stage of the project in July 2011, which was formally introduced into the project scope in November 2011. This $75 million scope change was introduced at the most complex time of the project in terms of technology, critical path schedule and cost.

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Lessons learned The experienced project management team recognised the value of analysing past experiences to improve processes.

The “Learning form our Predecessors” process, executed during the initial studies, included the following: t Identifying reference projects to obtain lessons learned; t Analysing the lessons learned applicable for the project at hand; t Incorporating the lessons learned into the project execution plan.

The team also documented all lessons learned to plan for the future. An example of a process that was developed during the project execution phase was the concept of prototyping. During the project, when complex and repetitive work was required, a prototype activity was scheduled in parallel. A prototype was done to determine the best way to perform quality work safely, while respecting the technology requirements.

Project complexity Strong commitment to ‘Zero Harm’ From the onset of the project, RTA was convinced that it was going to be possible to positively influence a culture shift on

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the project, even on a site with Quebecbased construction workers who were used to working in an environment with a certain rate of accidents.

Changing a culture does not happen overnight. The expression “Visible Leadership” applied not only to RTA and SLH management but also to each contractor and supplier. The goal was clear: That all workers adopt the “Zero Harm by Choice” value, where each person is responsible for their own safety and that of their co-workers.

The reporting and investigation of near misses and high risk situations by the workers proved to be the best way to prevent injuries and ensure a safe working environment. This proactive indicator is one way the team was able to achieve such strong results.

Economic crisis at the end of 2008 The global recession that started in 2008 temporarily stalled economic growth in Canada and had a significant impact on the construction industry. Its effects on the AP60 project included: t Major cash flow constraints; t Slow down on the execution; t Re-evaluating the project scope definition.

The project execution plan was revised and short-term activities were rescheduled. Strategic decisions were taken, which meant the project will keep all key members in order to maintain continuity.

Outcome Building an aluminium plant that will operate the most advanced technology in the world was an enormous challenge.

Not to mention the achievement of performing the work with a high level of excellence.

This is in fact what the AP60 Project Phase 1 workers achieved. Workers adopted rigorous practices, showed the courage to improve them, and the passion of their trade.

The daily actions of the people who contributed to the project were guided by deep-seated values relate to occupational HSE. The men and women from Rio Tinto Alcan, SNC-Lavalin, Hatch, the AP Technology provider, contractors and equipment manufacturer in SaguenayLac-Saint-Jean and Québec can be proud to have contributed to this outstanding achievement. t

Q&A with André Noël, AP60 Project Manager 1. How did the SNC-Lavalin-Hatch JV (SLH) come about?

The SNC-Lavalin – Hatch delivered the Québec based Alouette phase 2 Aluminium project in 2002-2005. Forming the JV for AP60 arose from this successful story.

2. What were the main challenges?

The project was very unique and we faced the following challenges: t Change local new health, safety and environment (HSE) culture to implement a world class zero harm approach in a region, Quebec where this is not the practice. t Optimise project business case and value while maintaining the team in operation during the Global Financial Crisis. t Implement successfully a new technology on a large-size capital project.

3. Was SLH involved in the risk management?

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Yes in all aspects of risk management. Risk based approach was used in all dimensions of projects, and risks were continuously discussed openly involving RTA and SLH.

Out of a total commitment of $ 1.3 billion, more than $ 600 million will be awarded to companies in the SaguenayLac-Saint-Jean region.

4. What other areas were SLH’s main focus during the project?

SLH focused on fully mastering project execution. The project used a strong execution baseline and implemented it in a very disciplined manner. Trends and risks were identified early, and strong proactive mitigations were implemented to achieve best results.

6. What impact is the project expected to have on the aluminium industry?

For sure, it represents a new milestone of the smelting technology history.

5. What impact is the project expected to have on the region?

The Arvida Aluminium Smelter, AP60 Technology Centre will produce 40% more aluminium per cell than the previous generation of AP technology.

The 60,000-tonne plant employs nearly 135 people and reached full capacity in December 2013.

7. What will the outcome of the project be in the short and long term?

Provide a strong platform for successful development of the AP60 technology platform.

8. Are there any plans in place for SLH to be involved in similar upcoming projects?

Both SNC-Lavalin and Hatch are continuously discussing and are looking forward for potential future opportunities. t Aluminium International Today

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14-16 April, 2015 Dubai International Convention & Exhibition Centre VISIT US at Stand No.

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Bridging the bauxite supply gap As demand for aluminium continues to grow across key sectors, the pricing power is shifting upstream to alumina and bauxite producers. Nadine Firth* met with Danny Keating** (pictured right) to discuss the projected global consumption of bauxite and a new mining project in Guinea, which plans to capitalise on this market demand.

‘Bauxite’ is currently the buzzword of the aluminium industry. Those in the know are aware of the part it plays in the production process, but the recent surge in demand and projected long-term growth of this ‘miracle metal’ has seen attention shift upstream. And it seems this change hasn’t gone unnoticed.

“Alufer Mining Limited started up five years ago, on the premise that we identified what we thought was a change in the industry,” says Danny Keating, CEO. “We started by looking at how the aluminium industry was changing, from massively integrated towards more fragmented; initially with independent smelters, then refineries, and finally nonintegrated or independent bauxite miners.

As with most commodities, the change was driven by China.”

Since 2006, global alumina refining capacity has expanded from around 30 Mtpy to 104 Mtpy in 2014.

“We picked up on this fundamental shift and noticed that in turn, China was turning the bauxite industry from what had been about 80 Mtpy to 250 Mt,” continues Danny. “This was the gamechanger for us. For anyone who was in the industry then, it’s like life before mobile phones. It’s a totally different world now.”

Alufer’s studies predicted that this pattern was going to continue and highlighted that bauxite was actually the only limiting factor.

“We spotted there was a constraint; mine development is difficult,” says Danny. “It’s not the shortage of bauxite that’s the problem, but because it has been an industry that historically has not had a lot of growth and has not been in favourable locations, it has not warranted much investment or development in infrastructure.

“Aluminium on the demand side is fantastic, there’s not a problem there!” continues Danny. “Demand is very strong and as long as it’s growing, it’s an industry

that is going to need bauxite. Mining will always be the thing that can’t catch up.

You can build a factory and a refinery a lot quicker than you can explore, develop and construct a new mine.”

The ban in Indonesia was the final contributing factor to Alufer’s development as a bauxite exploration and development company and secured its interest in a project in Guinea.

“As long as the material was coming out of Indonesia, it was holding the market in balance,” says Danny. “Then came the ban and we thought, now the industry will be really short and we will see sustained bauxite prices for longer.”

Alufer also saw this as a positive way to encourage investment in the project.

“Starting a project in somewhere like Guinea means that investors want to see sustained, high prices. Thankfully, being in year four now, if there was that point where we were going to see a massive flood of material from elsewhere, we would be seeing it now and that’s not the case.”

Bel Air Off the back of all this research and planning, Alufer has recently announced the completion and results of a bankable feasibility study (BFS) for its wholly owned project in the Republic of Guinea.

“The BFS economics have confirmed the Bel Air project to be the industry’s pre-eminent undeveloped bauxite project.

Bel Air’s potential scale demonstrates it will be a significant producer providing a high quality product to the market in the near term. The project is technically straightforward and can be fast tracked to production with just 12 months of construction. With a surprisingly low capex and opex, combined with immediate cashflow, the project is economically resilient and has competitive advantages over alternative sources of supply,” says Danny.

Project highlights A technically robust open-pit project that offers low capital and operating costs, rapid payback and strong financial performance at current bauxite prices; t Twin development strategy allows fast track to 4.8 Mtpa production for immediate cashflow generation; t 12 month initial construction phase; first production targeted for H1 2016; t Ramp up phase to 10.3 Mtpa maximises throughput and reduces operating costs without disruption to production; and t Includes development of dedicated export loading jetty infrastructure for transhipment of Direct Shipping Ore (“DSO”) to Capesize vessels. t

“We have conducted a number of optimisation scenarios and believe that our mining plan will maximise profitability, minimise technical risk and manage both our capital and operating costs. We are delighted to have achieved this important milestone and we would like to thank the Government of Guinea for their continued commitment and support to the project.

We look forward to taking Bel Air into its construction phase in the coming months.”

Project overview The Bel Air bauxite project is located 15km from the coast near the Cap Verga peninsula, 120km north of Guinea’s capital, Conakry. For the past four years Alufer’s strategy has been the rapid advancement of Bel Air to production to capitalise on the strong fundamentals of the bauxite market. To date, Alufer has completed the project BFS, the Social and Environmental Impact Assessment (SEIA) and in September 2013, it was granted

*Editor, Aluminium International Today **CEO, Alufer Mining Limited March/April 2015

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purpose-built haul road to the Export Facility stockpile.

Transhipment and stockpiling In the initial phase, stockpiled ore will be loaded onto 40 tonne ADTs for transport along the causeway to the barge berth.

Ore will be tipped into two shiploader feed bins located parallel to the berth and loaded onto transhipment barges through a mobile shiploader. As part of the ramp-up phase, a fully-automated causeway conveyor will be installed to feed a longitudinal shiploader at design capacity of 5,000 tph.

Economic highlights Post-tax internal rate of return (IRR) of 72%; Post-tax net present value (NPV) of US$760 million (at a 12% discount rate); Initial construction capital requirement, including financing costs, of US$110 million; t Peak fundraising requirement of US$120 million with post-commercial production capex largely funded by internal cashflows; t LOM cash operating costs of US$22/tonne free on board (FOB); and t Breakeven price, including working capital, in-country taxes and royalties of US$25/tonne FOB. t t t

the Exploitation Licence (Mining Title) for Bel Air Mining Ltd. Bel Air has defined reserves and resources for a premium quality, tri-hydrate DSO bauxite. The ore lies at the surface and will be mined by surface miners, then trucked down a haul road to the coast for loading onto the transhipment barges at the dedicated export-loading jetty at Cap Verga. DSO will be loaded onto Capesize or Panamax class ocean-going vessels for delivery globally to China, Europe and North American customers.

The development of the project will be separated into two phases; an initial ‘rapid production’ phase based on a shorter causeway with semi-automated barge loading; this has a 12-month construction period including mobilisation. Without disrupting production, the causeway will be widened and extended and an automated materials handling unit will be added in order to increase throughput to 10.3 Mtpa and reduce the overall operating costs. The ‘ramp-up’ phase only requires incremental investment and, at current bauxite prices, will be almost entirely Aluminium International Today

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financed by the cash flows generated by the ‘rapid production’ phase.

“Everything about the project just makes sense,” says Danny. “Normally you don’t find assets this close to the coast and so we don’t have to build a railway line. The causeway is the only major piece of infrastructure we have to build.”

Mining and hauling Following detailed investigation, the use of surface miners has been selected as the optimal mining solution for Bel Air. By utilising surface miners rather than a drill and blast methodology, the dilution and mining loss can be minimised, the primary crushing requirement can be reduced and, importantly, there is an improvement in in-pit geotechnical conditions.

The surface miners will mine, crush and load ore onto 40 tonne Articulated Dump Trucks (ADTs), which will transport ore to temporary transfer stockpiles. Mobile stackers will be utilised to automate the management of the ore transfer stockpiles. Dedicated 65 tonne long haul trucks will transport ore along the

Multiple berth export facility The optimised solution for delivering rapid production, globally significant bauxite output and low operating costs requires the construction of a multiple berth export facility. Initially the causeway will be developed to sufficient depth to allow tide-assisted loading of transhipment barges. The widening and extension of the causeway will continue without interrupting production until the continuous loading of transhipment barges is possible. There will be an export conveyor, tripping conveyor and longitudinal shiploader built on the expanded causeway with an additional throughput capacity of 5.5 Mtpa.

Transhipment operations The shallow marine conditions at Cap Verga require transhipment to load oceangoing vessels (OGVs). The transhipment operation has been designed for the loading of both Panamax and Capesize vessels, similar to the practices employed in the iron ore and thermal coal markets.

For Bel Air, a contractor transhipment solution has been developed, with specially designed floating cranes and barges. By utilising this equipment, Alufer will be able to load Capesize vessels without incurring significant demurrage costs and this will offer a considerable economic advantage over projects that are only able to load smaller Panamax vessels.

“We currently see export opportunities in North America and Europe,” says Danny. “There are already customer bases there, but we also know there is new demand.”

Financial overview The project will fast track production within 12 months, initially at 4.8 Mtpa ramping up to 10.3 Mtpa utilising the internal cashflows of the business. The increased throughput will also significantly reduce operating costs through greater March/April 2015

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economies of scale and improved levels of automation of the haulage and export process.

Bel Air has an initial peak fundraising requirement of US$120 million with postcommercial production capex being almost entirely funded from project cashflows. According to Alufer, this is significantly less than other pending bauxite mine development plans, with the key advantage being the proximity to the port and its simple mining methodology.

Impact Clearly when undertaking a project such as this, there are environmental and social impacts that need to be identified and managed.

“We were very aware that because we wanted to work fast, we had to start all of the environmental and social work up front,” says Danny.

The nature of the land and its proximity to the coast means that there are a number of fishing and farming villages that the project development must be sensitive to.

“We sought the advice of a social and environmental consulting group that had extensive experience working throughout Africa as well as an experienced in-country team of Guinean specialists to undertake

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Government’s social welfare programmes.

“Because the aim is to be quick to production, once the project is underway, the government and people here will start to see a return. That will be on top of all the imports and job creation that will come from the development,” highlights Danny. the SEIA studies. We worked closely with the Ministry of Environment from day one,” he continues. “This enabled us to develop a relocation plan that will see a very small number of people who would need to be relocated.

“In some operational areas, we have tried to make things more manual rather than automated, so we can employ more local people where we can. However, this is also more complicated than it seems, as you have to go to each local village and cannot be seen to only be employing from one area. It has to be fair and all of the communities benefit from our activities.”

Support Bel Air enjoys strong support from local communities and national Government.

The project will have a material positive impact on Guinea’s GDP creating more than 500 permanent jobs and provide significant tax revenues for the

Other projects The Labé project is also currently on going with the potential to significantly increase the company’s bauxite resource base.

The Labé project is situated in the Guinea highlands, approximately 350km northeast of Conakry.

To date, a JORC compliant resource of 2.5 billion tonnes of high grade ore (43% Al2O3) (with 583 Mt at 50% Al2O3) has been defined on the property. Further, an Engineering Concept Study has been completed and Alufer expects to commence a Pre-Feasibility Study in 2015.

“We see Bel Air as the springboard to other assets like Labé,” says Danny. “Once production is ramped up here, we can look to leverage the project to develop the other assets.” t Contact For more information visit www.alufermining.com

CHAMBER FURNACE FOR ALUMINIUM STRIP COILS

Photo: Susanne Dobler

www.otto-junker.de/energyaward2014 March/April 2015

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EGA’s bauxite-alumina strategy Since its inception, Emirates Global Aluminium (EGA) has consistently stated its strategic intent to secure raw materials through upstream investments, specifically in alumina and bauxite.

One of the main motivators for this is that EGA is the only major global player with no operational alumina or bauxite assets. By contrast, all of the other major players have sizeable alumina and bauxite investments.

More importantly, securing its own raw material sources is considered by EGA management to be fundamental to the future security of the business. Not only has the number of companies owning bauxite and alumina resources reduced over the years due to consolidation activities; but the price of bauxite and alumina is also increasing. These factors underscore the need to mitigate the associated risks, especially given the huge volume of alumina required to fuel EGA’s midstream assets, namely DUBAL and EMAL. To produce more than 2.5 million tonnes of metal per annum, EGA will consume about 5 million tonnes of alumina and 12 to 15 million tonnes of bauxite annually.

Reserve secured for high quality EGA has already made good progress in realising its upstream investment strategy.

A case in point being Guinea Alumina Corporation S.A. (GAC), a wholly EGAowned mining development company that is currently focused on advancing its bauxite and alumina export project in the Republic of Guinea.

The decision to invest in Guinea is in itself strategic – Guinea is rich in mineral resources including iron ore, bauxite, diamonds and gold; and the country is home to about 7.4 billion tonnes of bauxite reserves (equivalent to 27% of the world total).

Moreover, Guinean bauxite is amongst the highest quality in the world – particularly in terms of high alumina grade and low silica levels – and is thus highly sought after by the international market.

Importantly, the GAC project centres on a high quality, export grade bauxite deposit of 1.3 billion tonnes – the concession being located in the Boké region of Aluminium International Today

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GAC management and village elders opened the bridge of the Kéwéwol River by cutting a ceremonial ribbon.

north-western Guinea at the heart of the country’s bauxite reserves.

GAC was established in 2001 when Global Alumina, then a Canadian publicly traded junior mining company, obtained Lease 149 from the Government of Guinea to build and operate an alumina refinery along with relevant infrastructure.

In 2007, Global Alumina sold a majority interest in the project to BHP Billiton (33.33%), Mubadala (8.33%), and DUBAL (25%), and retained a 33.33% stake.

The GAC Project The project advanced well through completion of a Bankable Feasibility Study (BFS) along with approval of the Environment and Social Impact Assessment (ESIA). Following a strategy change within BHP Billiton and Global Alumina in 2013, Mubadala and DUBAL acquired the remaining shares in the project in May 2013 and transferred the ownership of GAC to EGA. Then, in November 2013, an amendment protocol was signed with the Government of Guinea relating to the project being undertaken in two phases.

The amended GAC project scope was unanimously ratified by the National Assembly of Guinea at the end of June 2014, permitting the project implementation as follows:

Phase I t The development of a greenfield bauxite mine (the Bauxite Mine) in Sangaredi, Boké region, Guinea; t The construction of a multi-user port terminal (the GAC Port Terminal) and an import container quay (the Import Container Quay) at Port Kamsar; t An upgrade to the existing rail system (the Existing Railway) linking the Boké region with Port Kamsar, to allow for the transportation of the bauxite from the Bauxite Mine to the GAC Port Terminal; t Various harbour and channel works, including an expanded navigation channel and transhipment operation to enable export of bauxite by larger vessels (referenced together as the Port Marine); and t The construction of supporting infrastructure for the mining, rail, port terminal and marine operations.

Phase II t Expansion of the Bauxite Mine and the Existing Railway; t Construction of a 2.0 million tonnes per annum (tpa) alumina refinery in 2022 (the GAC Alumina Refinery); and t An expansion of the GAC Port Terminal, involving the construction of an additional berth.

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GAC trainees graduate from Boké Vocational Training Center (CFP Boké)

The GAC project will be transformational for Guinea, which to date has had only one significant (+10 million tpa) export mine developed since its independence.

The benefits of the project include: t The GAC Bauxite Mine will be Guinea’s second significant bauxite mine, which will improve the positioning of Guinea on the world markets. t Development of the commercial quay at Port Kamsar, which will be completed during 2015, will unlock other regional opportunities for bauxite and agricultural exports, as well as material imports. It will provide a pillar and catalyst for the development of the Boké corridor as an alternative to the congested Conakry Port. t The unprecedented investment of approximately US$ 1 billion will increase Guinea’s visibility and improve international perception and business indices. t An incremental US$ 500 million per annum GDP contribution and US$ 250 to 300 million to the Guinean trade balance, given that 100% of GAC production is destined for export. t Training and up-skilling of Guinean employees at EGA’s UAE operations for subsequent redeployment in Guinea. t Job creation during construction, and subsequent operations (600 permanent jobs and 1,200 indirect jobs by 2020).

Social license to operate Moreover, GAC is committed to building strong and productive relations with the Government of Guinea and, as part of its social license to operate, works continually to improve the quality of life and living standards of those surrounded by and affected by its operations.

Diverse initiatives have been and are being developed and implemented via the support of local and international services providers such as NGOs, contractors, consultants and local government services.

These initiatives fall into several categories and include: March/April 2015

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GAC Unicef donation of USD250k signing ceremony.

Skills development GAC recognises the value of a skilled Guinean workforce and is committed to delivering long-term social and economic benefits to Guinea through both employment (including self-employment) and training programmes.

Livelihood Whilst employment will provide some measure of economic relief, a larger proportion of the local population will be required to find alternative means of subsistence and livelihood.

GAC has therefore also initiated several independent projects that cater for the long-term sustainability of the unemployable population.

Living conditions GAC recognises the limited number of resources available to the Government of Guinea to support community development, living conditions, education, health services and infrastructure. GAC believes that a healthier and better educated mainstream population will add to economic growth and long-term development within Guinea. With this in mind, GAC continuously invests in community infrastructure, health & safety and education projects.

Operating responsibly In keeping with EGA’s strong commitment to sustainability practices, GAC has implemented world-class environment, health and safety operating standards.

Aiming to minimise the impact of its operations on the environment and the surrounding communities, GAC promotes the efficient use of resources, the reduction and prevention of pollution and the enhancement of biodiversity protection through the life cycle of the project.

Having adopted the International Finance Corporation (IFC) Performance Standards in 2012 and the Equator Principles III in 2013, GAC’s environmental management plan includes among others:

Biodiversity Management Plan; Erosion and Sedimentation Control Management Plan; t Water Management Plan; t Rehabilitation and re-vegetation Management Plan; t Waste Management Plan; t Dredge and Disposal Management Plan; t Air Quality Management Plan; and t Noise and Vibration Management. t t

GAC’s concession includes areas of critical habitat for the West African Chimpanzee (Pan troglodyte verus) and the endangered Western Red Colobus (Procolobus badius).

The Biodiversity Management Plan ensures that GAC contributes to the protection of wildlife in general and the critical habitat of the two endangered species in particular. As required by the Performance Standard 6, residual impacts on critical habitat may be mitigated using biodiversity offsets.

GAC is currently working with the Wild Chimpanzee Foundation (“WCF”) to implement environmental education programmes about wildlife protection and endangered species management.

These include mitigation measures against hunting, slash and burn farming practices, uncontrolled bushfires, and collection of wood for human activities.

Health & safety GAC’s health and safety approach focuses on identifying and controlling hazards, reducing exposure to risks, and supporting the general health and well-being of all employees and contractors.

In September 2014, GAC achieved the significant milestone of 13 million manhours without a Lost Time Injury (LTI). This is a significant achievement in the field of construction, mining and infrastructure projects. t Contact www.ega.ae Aluminium International Today

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FORGING A STRONGER FUTURE Without sustainability, the whole world will eventually grind to a halt. That’s why we take our responsibilities very seriously. We put safety as our number one priority and look after our precious resources by using advanced technology to preserve energy and reduce our carbon footprint, to take care of the planet, our people and the future. www.ega.ae

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Balanced GTCs at the heart of aluminium production Gas Treatment Centres (GTCs) in aluminium smelters have a dual purpose. Not only do they treat fluorinated outlet gases to avoid harmful emissions, they also participate actively to aluminium production. Indeed, GTCs provide electrolysis pots with alumina enriched with fluorides. This fluorinated input optimises aluminium production. A. Courau*, N. Darsy* and C. Lim* explain.

Fives’ GTC technologies capture more than 99.5% of the alumina and fluorides emitted at the pots and recycling to the electrolysis process, thus optimising plant operation. Fluorides – a major constituent of the cryolitic bath – are essential to the electrolysis of aluminium as they allow lowering the melting point of alumina from over 2000°C down to 960°C, while maintaining the bath acidity for a better alumina dissolution rate.

The hot cryolitic bath contained in electrolytic pots emits fluorine vapours, which react with air moisture to form hydrogen fluoride (HF). Some fluoride dusts are also draught during pot operation through the pot suction ductwork. The quantity of fluorides that is captured and recycled through a GTC is in the range of 30 to 45kg per ton of aluminium produced. For a 500,000 T/year smelter, the quantity of fluorides recycled by the GTCs can therefore exceed 20,000 T per year, thus making GTCs not only a pollution control system but a key process equipment for aluminium production.

Alumina enrichment Fives GTCs are designed for homogeneous fluorination of alumina at their outlet.

Such solutions rely on a distribution of gas flow to filters, distribution of alumina to reactors and a large alumina storage volume inside filter hoppers, thus providing favourable conditions when alumina is injected to adsorb HF. The alumina fluorination level is usually followed up by regular measurements of the fluoride content in enriched alumina samples from each hopper bottom, expressed in %F of the alumina.

Optimised distribution of gas flow There are three important steps related to gas flow distribution. First of all, suction on all pots must be balanced in order to obtain an equal gas collection efficiency on each pot. Similarly, the overall gas flow must be equally distributed among all GTC filtering modules to maximise scrubbing efficiency. Finally, inside one filtering module, the gas flow must be distributed homogeneously among all filter bags.

Fives has developed and patented different ways to balance suction on all pots. Depending on project requirements, such balance can be reached with fixed orifice plates or with dynamic devices.

Furthermore, Fives can offer a controlled boosted suction on the pots in process

of anode replacements works, using either a dual ductwork with booster fans or a single duct system with patented device[1]. Both options allow maintaining the nominal flow on all other pots in normal operation[2]. The flow from all pots is collected into branch ducts supported alongside the potrooms that further merge into large courtyard ducts that are connected to the GTC inlet plenum.

The gas flow distribution to each filter module is achieved by the inlet plenum.

The design of the inlet plenum provides an equivalent flow to each filter of the GTC. As all projects are different, CFD calculations and airflow studies are performed for an optimal design of the inlet plenum, which usually looks like a fishbone.

Fig 1 shows a reduced-scale model that was implemented for a GTC simulation with five filters while Fig 2 shows an example of velocity distribution calculation through an inlet plenum.

All filter module outlets – whatever the type of filter module selected – are equipped with motorised balancing dampers coupled with flowmeters.

These balancing dampers are combined with flowmeters and stabilise the flow repartition set up by the inlet plenum, thus

Fig 2. Inlet Plenum CFD Model - Gas Velocity Analysis

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*Fives Solios SA, France March/April 2015

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allowing a perfect gas flow distribution among filter modules. Indeed, when necessary, dampers create for each module an adjusted artificial pressure drop, which makes GTCs able to properly run under special configurations such as shutdown or start-up of one or several filter modules.

These dampers also allow for the necessary adjustments in system pressure drop due to the unequal distance between filter modules and the inlet plenum flange or to the GTC outlet duct-to-fan configuration.

In these circumstances, the system ensures that all filter modules treat the same flow at +/- 5%.

These balancing dampers can be adjusted during the life of the GTC, as initial adjustment at commissioning may require an update to take into account the condition of filters or maintenance works performed. This feature is useful when filter bags are changed for one module.

The lower filter drag with new bags can then be compensated by partial closure of the filter outlet damper to maintain same flow rate between all modules. This helps replacing bags one module at a time.

Filter modules themselves have benefitted from air flow studies to reach an optimal distribution of gases among filter bags leading to Fives’ latest developments in terms of filtering technologies such as TGT-RI and Ozeos.

The TGT-RI filter module is characterised by its reactor, which is integrated within the filter module. It allows a low-velocity gas flow and a homogeneous repartition among all bags. One of the main advantages of this filter is its ability to run autonomously without fresh alumina supply for up to two hours, thanks to its large-capacity hopper. Indeed, in case fresh alumina feeding is stopped for operational or maintenance reasons, alumina internal recirculation into the filter allows TGTRI filters to continue operating at their highest fluorides collection efficiency until all the alumina contained in its hopper is completely saturated.

The large capacity hopper of these filters is also beneficial to deliver to the pots an alumina with steady fluoride content. This storage capacity allows a typical residence time of four hours for the alumina inside the GTC. When periods of peak fluoride emissions occur at the pots, the large volume of alumina being recirculated from the filter hoppers to the reactors acts as a buffer and maintains a low fluoride gas emission. This storage capacity buffer absorbs and smooths any sudden variation in enriched alumina fluoride content that would be caused by changes in fluoride inlet concentration due to pot operation, and allows feeding back to the pots a fluorinated alumina with a more Aluminium International Today

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consistent fluoride content.

Ozeos is Fives’ most recent dry-scrubbing technology with integrated reactor.

Ozeos filter modules have been ecodesigned to reduce their pressure drop, ground footprint, weight, and electrical and compressed air consumption[3]. The compact design suits at best the large gas volume treated by centralised GTCs for modern high amperage pots. This technology includes a lower velocity reactor that reduces risks of scaling,

Fig 3. Balancing dampers location at filter outlet

abrasion and alumina attrition, as well as a series of features to facilitate control and maintenance. This module has been tested since 2005 in Saint-Jean-de-Maurienne (France), prior to the first industrial reference, which was commissioned in 2014 at Rio Tinto Alcan’s new AP 60 potline at their Jonquière site in Canada[2].

Distribution of alumina to reactors Alumina is introduced into the gas stream at the reactor stage. Alumina distribution and injection must be carefully studied to maximise its mixing and its scrubbing efficiency with the gases.

Indeed, the optimised alumina distribution is key for a homogeneous fluorination rate and a global high scrubbing efficiency. Like with filtering modules, key requirements for alumina distribution take place at two levels: First at the distribution box, where alumina is divided towards each module in equal quantity, then in filters’ reactors where alumina shall be spread out to enhance contact with incoming gases.

To reach an equal distribution of alumina among each module, Fives has developed a proprietary distribution box.

It is located upstream from the reactors and receives alumina conveyed from the fresh alumina silo. The principle of the distribution box is very simple: Alumina is discharged towards as many outlets as the number of filters in operation. Thanks to alumina fluidisation, alumina behaves as a liquid and the flow is identical for each outlet, in a verified range of +/- 5%. By

design, the distribution box provides the same amount of alumina among all filters, even when a filter is stopped. In such case, the exceeding amount of alumina is automatically evenly distributed to the other operating filter modules.

Regarding the distribution of the alumina inside the filtering module, the heart of the dry scrubber process is the contact between alumina particles and HF contained in gases, which takes place in the reactor. This essential stage ensures alumina enrichment with fluoride, and thus cleaning of gases. This requires distributing alumina effectively over the entire cross section of the reactor to ensure all gases are being treated. The injection area must also be turbulent enough to ensure good mass transfer, but with a low gas velocity to minimise attrition, abrasion and scales formation.

In order to maintain a sufficient and uniform concentration of alumina in the reactor, alumina is recycled several times from the module fluidised hopper into the reactor. Recirculation influences the performance to capture HF and the recirculation rate can be adjusted at times in order to stay below the maximum authorised emission level.

Conclusion The alumina enrichment process is enhanced in Fives’ GTCs due to a design that ensures a balanced repartition of gases over filtering modules, a proper distribution of alumina as well as a maximal contact between alumina and gases.

Such a homogeneous and consistent alumina fluorination also allows for a more stable scrubbing performance of GTSs with no peak of HF emissions at the stack.

Fives’ solutions aim at combining industrial performance with sustainable development. As for GTCs, process optimisation is closely linked to lowering environmental impact, thus demonstrating that these two objectives are among Fives’ main priorities. t References [1] Quentin de Gromard Antoine, Lim Chin Boosted suction systems reviewed- Aluminium International Today (September/October 2013) [2] M. Frainais, J.-N. Maltais, P. Martineau, Start-Up of the Ozeos Gas Treatment Center (GTC) for RTA AP60 Phase 1 (TMS 2015) [3] P. Plisson, B. Hureiki, C. Lim Sustainability improvement in Fives GTCs Aluminium International Today (May/June 2014) Contact www.fivesgroup.com March/April 2015

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Alumina refinery switches to natural gas Lightweight-metals manufacturer Alcoa has switched the energy supply for its San Ciprian refinery in Lugo, Spain, to natural gas.

The San Ciprian alumina refinery is part of the AWAC joint venture, owned 60% by Alcoa and 40% by Alumina Limited, the only Alcoa alumina refinery in Europe, with an annual capacity of 1.5 million metric tons of alumina. The facility supplies alumina to several of Alcoa’s European primary aluminium

smelters as well as a wide variety of other customers in the chemical, ceramics and construction materials markets. The Alcoa alumina refinery is part of the company’s San Ciprian industrial complex which includes a smelter and various shared facilities, such as a port, and employs approximately 1,200 employees.

In keeping with the company’s strategy to create a globally competitive commodity business, in January Alcoa switched the energy supply for its San Ciprian refinery from fuel oil to natural gas. The facility is Alcoa’s only alumina refinery in Europe, supplying alumina to a number of aluminium smelters as well as a wide variety of other customers in the chemical, ceramics and construction materials markets.

It marks another key milestone supporting the company’s goal to improve its position on the alumina cost curve to the 21st percentile by 2016.

The refinery’s transition to natural gas, focused on improving its structural competitiveness, will save Alcoa in energy costs, and it will facilitate a reduction in greenhouse gas emissions at the facility, cutting carbon dioxide by 30% and eliminating sulphur dioxide emissions.

“We are increasing the ability of our San Ciprian refinery to compete on a global scale by converting the facility to a secure supply of natural gas, which is lower in cost over the long term and a cleaner alternative to fuel oil for refining,” said Alan Cransberg, President of Alcoa Refining.

The transition is another example of Alcoa’s broader transformation through which it is creating both a globally competitive commodity business, while placing an emphasis on its value-add businesses, and lightweight metals innovation.

The economics of power While prices often move together, gas has long cost less than fuel oil. Much has been made of the sustained fall in oil prices, but natural gas will be cheaper over the long term and is a cleaner, more efficient alternative. Alcoa has a clear target to reduce costs and move further down the alumina cost curve - which maps production against cost - by 2016. Shifting to natural gas will reduce energy costs at the refinery by $20 per metric tonne, compared to historic levels, and takes the company further towards achieving its target.

Alcoa began the process of switching the refinery from fuel oil to natural gas in July 2011, when a storage facility for liquefied natural gas supply was installed.

Gradually, the alumina plant increased its consumption of natural gas to reach around 30% of the total fuel it consumed, and was held at this level until the pipeline was opened in January 2015.

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Empowering communities “Projects of this nature impact a wide variety of people, including our employees, local businesses and politicians. That is why we seek to work with governments and local authorities from an early stage in all of our projects. San Ciprian is no different. Indeed, the support offered by the Galician Government was instrumental to the project’s success,” said Simon Baker, president of Alcoa’s Energy Assets and European region.

“The opening of the pipeline marks

The move to natural gas at the refinery: t t t

Reduced energy costs by $20 per metric tonne Reduced Carbon Dioxide emissions by 30% Eliminated Sulphur Dioxide emissions

the successful conclusion of a joint effort between regional Government ‘Xunta de Galicia’, with support of the Consellería of Economy and Industry; Natural GasFenosa and Alcoa, and is consistent with Alcoa’s ongoing commitment to energy efficiency,” added Baker. “Alcoa appreciates the strong support for this project by the Ministries of Industry and Environment to provide this infrastructure, which is essential for the La Mariña community and helps improve the competitiveness of the regional industry in general.”

Energising the environment Natural gas has the added benefit of being significantly better for the environment.

Alcoa is committed to energy efficiency and more than 50% of the company’s purchased electricity and around two thirds of the electricity used by its smelters is generated from renewable sources, including hydro.

“We are committed to reducing the energy requirements of all of our operations and have set long-term strategic targets to reduce our energy intensity by 20-30% across our businesses by 2030,”said Baker.

The San Ciprian connection to the gas pipeline has also removed the need for tankers to supply liquefied natural gas to the refinery. This further supports Alcoa’s sustainability efforts by reducing transportation needs. t Contact www.alcoa.com March/April 2015

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INDUSTRY OUTLOOK 35 5

Downstream demand

Photo courtesy of Alcoa (International Aluminium Institute)

U.S. Downstream producers: Will they suffer the same fate as U.S. primary aluminium producers?

By Robert E. DeFrancesco*, III, and Adam M. Teslik** After years of declining aluminium prices due to massive amounts of excess global supply, continuing capacity rationalisations by western producers have led analysts to predict a supply deficit and a price recovery of as much as eight percent this yeari.

This price recovery, however, comes on the back of the many primary aluminium producers outside of China that have been forced to slash production and capacity despite growing demand from the auto, aerospace, and other industries. Hoping to capitalise on thriving downstream demand, some major producers have decided to invest. Traditional primary aluminium powerhouses like Alcoa have moved away from their upstream businesses to focus on the potential they see in midstream and downstream segmentsii. In November 2014, American Specialty Alloys announced plans for a $1.2 billion, 600,000 ton-per-year facility in Mississippi to supply flat-rolled aluminium to car manufacturersiii. Likewise, Novelis plans to ramp up North American production of automotive aluminium to around 365,000 metric tons (mt) in 2015, from just 50,000 mt in 2013iv.

Producers planning to set up shop in the U.S to take advantage of strong downstream demand, however, must be prepared to confront a looming threat that has devastated primary aluminium

producers and against which the U.S. steel industry has been struggling for decades.

Specifically, global manufacturers do not all follow the same rules.

The performance of China’s aluminium industry after the financial crisis is telling in this regard. While primary aluminium producers elsewhere have cut production to mitigate the effects of excess supply and uncertain demand, Chinese production has continued to soar (Fig 1). China now produces as much primary aluminium as the rest of the world combinedv.

Since 2000, when the country provided only 12.5% of global output, its annual production has grown by around 800%.

This accounts for nearly the entire increase in global supply since then and has thrown the market into chronic surplus, causing prices to crash.

Elsewhere, producers have curtailed output as the supply glut has pushed prices below cost for many smelters. Alcoa, for example, has cut, closed, or sold more than 1.3 million mt of production capacity since 2007vi, including its 125,000 tonper-year Massena East smelter in New Yorkvii; its 270,000 ton-per-year smelter in Rockdale, Texasviii; and its 229,000 tonper-year smelter in Mount Holly, South Carolinaix. In late 2013, Ormet closed its 270,000 ton smelter in Ohio and has since auctioned its assets in bankruptcyx. Other

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major U.S. consolidations include: t Rio Tinto Alcan’s 205,000 ton-peryear smelter in Sebree, Kentuckyxi; t Columbia Falls Aluminum Company’s 180,000 ton-per-year smelter in Columbia, Montanaxii; and t Goldendale’s 172,000 ton-per-year smelter in Goldendale, Washingtonxiii.

The U.S. primary aluminium industry has contracted by around 30% since 2009, with similar consolidations occurring almost everywhere except China. Rusal, for example, has also shuttered approximately 650,000 mt of capacity since 2012.

After posting losses in 2013 and being removed from the Dow Jones Industrial Average, Alcoa returned to the black in full-year 2014, primarily by shifting its focus to downstream and midstream segments. Alcoa’s primary aluminium “rationalisation” is set to continue, as it plans to emphasise a single, joint-venture smelting operation in Saudi-Arabiaxiv.

Despite talk of shuttering capacity in China, closures in the eastern part of the country have been offset elsewhere, as generous subsidies encourage new capacity in the northwest regionsxv. In 2014, Xinjiang province became China’s largest aluminium producing province, as output reached 2.99 million mt from January through Septemberxvi. The province’s total capacity is expected to

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Fig 2. Chinese aluminium exports Q1-Q3 2014 (mt).

Source: International Aluminium Institute

Source: China Ministry of Customs Statistics

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increase from 4.37 million mt in 2014 to 6.5 million mt by the end of 2015xvii. A single smelter, Xinjiang Qiya Aluminium Electricity Co., plans to double its capacity to a massive 800,000 mt per year in 2015.

Given the overwhelming share of electricity in aluminium production costs, such relentless expansions are driven largely by massive power subsidies at the provincial level. They bear no relationship to actual demand in China, where economic growth is slowing and is unlikely to return to the torrid 10% rates of the past.

Taken at its word, the central government in China may in good faith mean to resolve overcapacity, but local and provincial governments that depend on these industries for jobs and economic growth are loathe to see producers fail. Central government consolidation measures that adopt a “survival of the largest” approach further incentivise local support for expanding production. For example, central government industry standards published in 2013 consider production capacity as a key characteristic and require certain types of new capacity additions to be at least 100,000 mt per year in scale, and existing facilities to be at least 50,000 mt per year to avoid consolidationxviii.

While the objective of these requirements is to limit the number of production facilities going forward, the result may ultimately be to exacerbate overcapacity.

Primary aluminium producers in the United States and elsewhere have been injured by the Chinese government’s subsidisation of primary aluminium production and the resulting distortions in global prices. To this point, however, primary aluminium producers have not sought relief from such practices. The question is whether the downstream producers who are now threatened will follow a similar approach.

Very little primary aluminium physically leaves China as primary aluminium.

China’s government actively discourages primary aluminium exports through a 15% export duty and uses industrial policy to encourage the production and export of higher value-added, downstream products. As a result, primary aluminium March/April 2015

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0 2010

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Fig 4. Source: U.S. Import Statistics Source: Internal Industry Data

accounts for a tiny portion of Chinese aluminium exports by volume. While some analysts speculate that at least some of China’s finished and semi-finished exports are actually primary aluminium in disguise, the vast majority of the country’s aluminium exports are of downstream products for sale in foreign markets. In fact, despite producing more than half of the world’s supply, China is actually a net importer of primary aluminium. According to Chinese Customs statistics, from Q1-Q3 2014, the country imported more than three times the volume of its primary aluminium exports. Based on production data from the International Aluminium Institute, China’s apparent consumption of primary aluminium reached nearly 45 million mt in Q1-Q3 2014.

Fig 2 shows that a significant portion of the 45 million mt of primary aluminium consumed in China is ultimately exported as downstream aluminium products.

According to Ministry of Customs data, only 82,000 mt of primary aluminium left China in the first three quarters of 2014, while the country exported more than three million mt of finished aluminium products in the same period.

Thus, surplus primary aluminium production has not only driven down global primary aluminium prices, but export restraints on primary aluminium and other industrial policies in China have channelled it into downstream manufacturing, so that it ultimately leaves the country in the form of low-priced extrusions, flats, wire, and other finished products that compete in overseas markets. As a result, downstream industries are not immune to the negative effects of subsidised, excess capacity in China. Going forward, this trend will likely persist, as Chinese primary aluminium capacity is projected to expand while economic growth slows.

The U.S. steel industry is all too familiar with this phenomenon, as subsidised Chinese steel producers have flooded global markets with low-priced products that capture market share at the expense of domestic producers. Aluminium producers hoping to take advantage

of growing demand for downstream products would be wise to look to the steel industry as a potential sign of things to come, and as evidence of the tools at the industry’s disposal to address the impact of unfair trade. As of 2014, there were U.S. antidumping or countervailing duty orders in place against unfairly traded Chinese imports of 25 steel products, from upstream products like plate and hot-rolled coil, to downstream products like steel grating and oil country tubular goods. In contrast, there is only one order in place against imports of aluminium products from China: Extrusions.

The Aluminium Extrusions case is a classic example of the way that China’s aggressive expansion of its aluminium industry against all market signals can imperil manufacturers of downstream aluminium products. As such, it serves as a cautionary tale for other downstream industries. In just three years, from 2008 to 2010, Chinese shipments of aluminium extrusions to the United States grew from around 90,000 tons to more than 200,000 thousand tons, more than doubling their share of the U.S. market. Over this period, the average unit value of Chinese shipments fell by more than $1,000 per ton, dragging U.S. prices down with them.

This was not a case of more competitive producers beating out rivals for sales.

The U.S. Department of Commerce (Commerce) concluded that Chinese producers benefitted from subsidies including preferential policy loans, development grants, tax exemptions, and the provision of primary aluminium by state-owned or controlled suppliers for less than market value. Commerce also found that the Chinese producers were selling into the U.S. market at more than 30% below the cost of production for market-oriented producers. These findings led to antidumping and countervailing duty orders in 2011 ranging from 32.79% to 374.15%.

After these orders went into effect, the performance of U.S. producers of extrusions improved markedly. As the unfair imports from China have been Aluminium International Today

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INDUSTRY OUTLOOK 37

The Bright World of Metals

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Source: Superior Industries International Financial Statements; U.S. Import Statistics

removed from the market, U.S. producers have regained market share at a rate that represents an additional $685 million in revenue, even based on the depressed 2010 average unit values (Fig 3).

For producers of other downstream aluminium products, the question remains: Who will gain the most from rising demand? In the last few years, U.S. imports of downstream aluminium products from China have jumped. While Chinese imports still make up a relatively small portion of the overall market for these products, the trends are ominous for U.S. producers (Fig 4).

As representative examples, U.S. imports of aluminium foil from China have grown by approximately 123% since 2010, and U.S. imports of aluminium sheet and plate have grown by approximately 115% over the same period. As economic growth in China slows, and as the European Union continues to suffer from the effects of the global financial crisis, exporters are likely to target the U.S. market even more aggressively in the coming years. Some major U.S. producers of downstream goods may already be feeling the impact of rising imports from China. Fig 5 shows the net sales value of Superior Industries International’s U.S. operations, based on the company’s financial statements, against the quantity of U.S. imports of aluminium wheels from China.

Major U.S. aluminium wheel producers like Superior should be reaping the benefits of a rebound in auto production and sales.

Instead, Superior’s net sales value has declined by more than 5% from 2011 through 2013 and by more than 10% year-on-year through the first three quarters of 2014.

Conclusion For U.S. aluminium producers, including those that have been forced into downstream segments, these trends are likely to intensify as the U.S. economy outperforms other global markets and as Chinese policymakers continue to promote the development of downstream aluminium industries. Migrating into different market segments can provide only limited and temporary relief from unfair trade practices.

U.S. manufacturers, however, do not need to lose sales and cede market share until it is too late to recover. The trade laws exist to address the effects of unfair imports and provide relief to U.S. industries. Many of the subsidies that Commerce found to confer an unfair advantage on Chinese producers of aluminium extrusions are enjoyed equally by Chinese producers of other downstream aluminium products, and effective use of the U.S. trade laws can help to level the playing field for producers who must compete according to the rules of the market.

The question remains whether other U.S. downstream aluminium producers will profit from improving market conditions or whether highly subsidised competitors with a history of unfair trade practices will reap all of the benefits. t

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38 ROLLING

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Formation of Global Foil Association Supporters of the Global Aluminium Foil Roller Initiative (GLAFRI) have decided to turn this activity into a legal trade association. Aluminium International Today spoke with the leaders of the newly formed Global Foil Association about its role in the industry.

The start-up of the Global Foil Association follows the success of GLAFRI so far, particularly the three annual conferences held to spearhead its activities. Thereupon, the supporters decided to formalise the initiative by creating a trade body to continue and develo p its work.

Initially, the major objective of the new association will be to continue ‘one voice’ on foil promotion and sustainability issues globally, with the aim to support foil market growth in general. The new organisation will enable more continuity in carrying out the decisions and actions decided during the conferences and allow other projects and ideas to be developed.

1. What reasoning was behind the initial start-up of the GLAFRI? “GLAFRI is built on a long and intensive relationship with the Japanese foil rollers established in the last century, a close cooperation with the AA Foil Division in the US, when it was still active in the 90s, plus EAFA Roller Delegation Tours to China at the beginning of this century. One of the first visits in Asia was to Xiashun, the company of Simon Chan, one of our VPs today,” explained Manfred Mertens, who is the new organisation’s first President.

“All that was driven by the idea to share the costs of developing a common position for the foil sector on recycling and sustainability and to ensure mutuality on these political issues and messaging,” Mertens added. “We wanted to go with a ‘One Voice’ approach to support a growing foil demand globally.”

Manfred Martens

2. What factors lead to the success of this initiative and the subsequent formation of the GLAFRI as an association?

According to the new Director General of GLAFRI, Stefan Glimm, the vision of previous European Aluminium Foil Association (EAFA) leaders to take the risk to invite a considerable number of nonEuropean companies for a first global foil conference in 2008 played a major part. “At one time we had no idea at all whether the offer would be welcome, or be accepted,” said Glimm. This action was supported from the first day by Achenbach which was looking for a global platform to serve all its customers in developing foil markets.

Mertens also confirmed, “The very good outcomes of these conferences from the start certainly added to this momentum.”

3. What has the reception been from the aluminium foil industry? Is it welcoming of this new association?

“When, early 2014, at the last global foil conference, about 35 foil rollers from all continents committed to support and financially contribute to global foil promotion activities we were positively surprised and delighted about the numbers of companies signing in,” said one of the two Vice Presidents of the new association, Simon Chan.

Stefan Glimm

His counterpart, Fabiano Schneider Urso added, “It took us a few months to define the most appropriate form of organisational structure, while in parallel attracting further foil roller members. I am delighted to say that there is a strong interest from the foil industry which is demonstrated by the participation and support of 42 companies up to now.”

4. The leading figures of the Association (Manfred Mertens, Simon Chan, Fabiano Schneider Urso and Stefan Glimm) represent global companies involved in aluminium foil.

What qualities/knowledge will these figures bring to the association?

Speaking for the group Mertens said, “All of us are presenting long lasting experience of managing and leading both aluminium rolling companies and local associations. These are spread over the world through Asia, the Americas and Europe.”

“We are very glad to have ensured, by getting this leadership from important foil rollers from these important regions, that there is a strong commitment to get more foil promotion activities implemented in these different regions, as well as other parts of the world,” he said.

5. How will this new trade body continue the work of the initiative?

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Foil promotion is a key part of the objective. So, first actions are targeted at India, South Korea, China, US, Gulf and Europe, according to Simon Chan. “The focus is to either enlarge the foil network or to start consumer related activities like foil promotion via social networks or support of World BBQ Championship.”

“With the new Director General, Stefan Glimm in place, the objective is to balance the activities over the years between the different regions. Webinars will take place

Fabiano Urso

regularly and the next Global Aluminium Foil Conference, GLAFCO, will take place in Shanghai, 7 – 9 September 2016,” confirmed Mertens.

6. What support will it offer its members?

“Besides the exchange of promotion material, further access to global foil market information will be provided through surveys among members or cooperation with institutes like CRU. This will take place in between the present three year cycle of GLAFCO conferences,” revealed Fabiano Schneider Urso.

“Roll out of the Initiative will help to attract further support from other foil rollers worldwide, as well as promoting the use of foil and making best use of existing networks with local organisations,” observed Mertens.

7. Have the current market conditions aided the decision to build the GLAFRI? “The decision acknowledges that customers have become more global and wish to receive similar answers on, for example, foil sustainability wherever they operate,” said Glimm. “It also mirrors structural changes in the aluminium industry. With less and less fully integrated primary-to-foil companies, there is an increasing need to ensure international information exchange on the foil level.”

He added, “It is important and we are very Aluminium International Today

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glad that the International Aluminium Institute (IAI) supported foil going global from the first day.”

Mertens noted that the first GLAFCO conference took place before the events of 2008, so the Initiative, in fact, pre-dates any economic problems that occurred.

8. In what way will the Association help to promote sustainability across the aluminium foil industry?

Simon Chan

“We have been very active already in presenting the benefits of foil to reduce food waste as well as its contribution to sustainable lifestyles, for example with our animation video ‘More is Less’, which is available in more than 10 languages,” explained Manfred Mertens.

“With the new membership structure we should have additional distribution channels to roll it out further on a global level,” Fabiano Schneider Urso added, “We are already experiencing, in Brazil, India and China particularly, activities from members to spread the knowledge to other foil rollers and get them involved.

“Via GLAFRI we will clearly show the benefits of aluminium foil with its barrier functions, food waste savings potential and recyclability, which will all help to improve the image of aluminium foil in packaging.”

9. What areas of the foil industry are experiencing the most challenges?

Manfred Mertens provided a very straightforward answer, “Promoting aluminium foil as packaging in Asia will be the most challenging factor in the coming years.

“The management of large quantity of foil specifications to serve the various packaging and technical markets is both a challenge and opportunity,” added Fabiano Schneider Urso.

10. How will the Association promote the benefits of aluminium foil?

“We look for cooperation with organisations like ABAL in Brazil, AFCMA in US, EAFA in Europe, JAA in Japan, and Sunlight Metal in China. But also many events around the world offer opportunities to spread messages. We are of course also interested to cooperate with regional aluminium associations such as AA,” said Stefan Glimm.

“We have a very good base to work from given EAFA’s activities in Europe,” explained Mertens.

11. What is the current market outlook for aluminium foil and how do you see this changing in 2015?

“Despite the continuing challenges in the market the outlook for foil, with about 4% annual growth predicted over the next five years, generally remains very positive.

Being able to speak with one voice on global promotional and environmental issues which confront the sector can only be a highly positive development,” confirmed Glimm.

12. Do you see continued investment in rolling mills and value-added aluminium production?

“Besides the huge investments in China, we recently saw significant investments in Brazil, Europe, Turkey and Middle East, as well as India, to name only some. So yes, we believe there will be continued investment in rolling due to growth in demand worldwide and to support key customers’ growth,” concluded Simon Chan.

Summary The Global Aluminium Foil Roller Initiative (GLAFRI) is the global association coordinating actions on sustainability in order to support foil market growth and promote innovative development. Almost 10% of the annual global aluminium primary production is converted to aluminium foil.

The members are foil rollers (AFM aluminiumfolie merseburg, AL INVEST, Alcoa, Alcomet, Aludium, Amcor Flexibles, ASAS, Assan Alüminyum, Carcano Antonio, Cihan, Comital, Constantia Flexibles Constellium, Dare/Danyang, Dingsheng, Ess Dee, Eurofoil, Garmco, Hindalco, Hulamin, Hydro, Iberfoil, Impol, Kunshan, Laminazione Sottile, Nikkei Siam, Noranda, Novelis, OARC, SAM-A, Shanghai, Shenhuo, Symetal, TLM, Toyo, UC Rusal, Votorantim Metais – CBA and Xiashun) and their suppliers (Achenbach, Kampf, IAI, Novelis PAE and Thiel & Hoche) from around the world. t March/April 2015

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Improving rolling mill process control

By Piermichele Cattelino*

Improvements in modern cold rolling mill performances are highly dependent on increased performances of automation controls and their additional features.

Cold rolling mills are equipped with a series of sensors and fast acting actuators that allow the implementation of a wide collection of control strategies tailored to the different mill configuration and product to be rolled. Continuous evolution of real time controllers in terms of in calculus performances and integration of high level programming languages allows for more sophisticated mathematical models and nonlinear control algorithm and strategies.

Automation supervises every aspect of a rolling mill, from interlocks of operator manual commands, to the implementation of highly structured automatic cycles. This enables faster coil handling with a significant reduction of non-running time and, more importantly, to provide the proper safety level during operational and maintenance phases.

Significant improvements on rolling mill automation have been achieved in the process control that directly affects the quality of the final product in terms of strip thickness and flatness. Improvements have been significant in terms of achieving tighter tolerances and to improve recovery, maximising the strip length within the required product specifications.

The focus of rolling mills process control in obtaining the best possible performances in terms of strip thickness and strip flatness, also leads to the possibility of running the mill at higher speed with a lower risk of producing out of the required product specification and of strip break. The risk of strip break due to incorrect flatness control of strip edges is the main reason for not optimal mill speed and therefore sub-optimal

Exit thickness

A.G.C. Feedback controller

Adaption gains Feedback trim

Observer

Process values

Adaption gains

Exit speed Entry thickness Entry speed

Mass flow delay compensator

Mass flow equation

Fig 1. Mass Flow Control

production levels.

FATA Hunter is focused on developing its rolling mills with a continuous improvements path involving all design phases. Strong effort is placed in the innovation of the FATA Hunter proprietary Process Control System, the hSystem, for technological improvements that are aimed at allowing the manufacturing of products with a higher added value, optimise yield and machine utilisation, therefore increasing the margins reducing costs. In view of providing its customer with the maximum benefit, FATA Hunter’s R&D has been focused in the optimisation of the implemented control algorithms in combination with the definition of new strategies to optimise the most critical phase for mill performances, like strip threading, acceleration, deceleration and tail out.

Improvements in FATA Hunter’s Automatic Gauge Control (AGC) and Automatic Flatness Control (AFC) have been achieved by the implementation of mathematical models that include complex description of the rolling process. Detail process modelling allows the comprehension of mill behaviour and control strategies simulation as well as the deployment of sophisticated

Calculated thickness

Mass flow controller

Process

Mass flow control

adaptive functions through the so-called “observer” modules. The introduction of a “Process Observer” aside of a control algorithm is mainly due to the necessity of adapting the control action to the actual mill conditions.

Rolling mills are complex equipment from a control point of view, due to the high number of variables involved in the process with highly non-linear interactions. Moreover the relations between the variables are dependent on the actual working condition in terms of mill loading and mill heating. These conditions generate variable working ranges, i.e. ranges where the machine can work in a stable condition with sufficient tolerance the changes in working conditions, which have to be taken into account when scheduling and controlling the mill.

Given these variable working ranges, it is possible to use the process observer functionality to keep control performance at their possible optimal value, while running at different rolling conditions, by the use of “adaptation gains” included in controller algorithms.

Fig 1 shows how the process observer concept is implemented in Mass Flow thickness control. Mass Flow control is

*Automation Manager - FATA Hunter, Italy Aluminium International Today

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Flatness reference generator Flatness feedback

Edge compensation strategy

Adaption gains Flatness error

Model based flatness control

Observer

Adaption gains Mechanical Decoupled Single actuators flatness errors variable references flatness error controllers

Residual flatness error to differential cooling spray control

Thermal crown calculation

LEVEL 2 Process values

Process

Recipes database

Rolling model

PDI

Actuators model database

Set-up model

Previous pass data

Fig 3. Process Modelling and Control hierarchy

LEVEL 1

Average sprays level

Controllers

Process

Process output

Cooling sprays reference Cooling sprays control

Fig 2. Flatness Control

Observer Edge sprays control

the most sophisticated implementation of Automatic Gauge Control (AGC) on a cold rolling mill. The basic concept is to eliminate the delay in thickness measurement, due to the positioning of the exit strip thickness sensor, by mathematically evaluating the strip thickness based on entry strip thickness, entry speed and exit speed measurement.

The closed loop control will then correct thickness deviation from the target by modifying the load cylinders position.

In order to have the optimal performances at various rolling conditions, the Mass Flow control shall react to process variations by changing its own response behaviour. As an example, different rolling conditions bring variable relation between the process parameter to be corrected, in this case the exit thickness, and the parameter used as an actuator, in this case the load cylinders position due to changes in roll gap conditions. Process modelling allows for the development of a dedicated Process Observer function for the identification of the changes in rolling conditions based on the measured feedbacks, and a consequent adaption or change in the control strategy.

The implementation of a dedicated process modelling and consequent observer algorithm is adding significant benefits also in the case of Automatic Flatness Control (AFC). AFC is based on a complex multivariable controller that converts the strip flatness measurement, given as an array of simultaneous measures along the strip width, into commands to a series of actuators that varies with the mill configuration.

Typical actuators for Flatness control ranges include work roll bending, roll load steering and cooling sprays; additionally, to have a better localised control over the trip edges, it is possible to include hot edge sprays and/or induction heaters, both solutions with the purpose of heating work rolls portion at strip edge to prevent March/April 2015

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the strip tight edges effect. On 6-Hi mills the use of intermediate rolls allows for additional actuators to act on by Flatness Controls: Intermediate Rolls position, Intermediate Rolls bending, Intermediate Rolls cooling sprays.

All these actuators interact with entering strip conditions (profile, flatness, thickness, temper) and mill present status (roll crowns, rolls temperature, rolling load, rolling speed) in generating the exit strip flatness. Optimised flatness control is achieved by using algorithms that select the best possible action for each one of the available actuators given the actual rolling conditions. The implemented algorithms make use of a Process model that correlates each actuator to the behaviour strip flatness and to measures available from the mill; a dedicated Process Observer implements these relations and provides on its output adaption parameters in terms of adaption gains.

These adaption gains are used to optimise the performances of the simplified model for on-line flatness control and the single actuator controller as shown in Fig 2.

In this way, it is possible to implement rules that, to correct a specific flatness error, split the corrective action on different actuators with the “weight” of the split that can vary based on the actual level of use of the actuator itself as well as on one of the other actuators and mill status; this approach also provides the advantage of optimising the actuator allocation given a flatness error profile, avoiding possible counter-actions between actuators that have similar effects on a defined typology of flatness error.

It is possible, for example, to implement an action strategy for the hot edge sprays that takes into account the interaction between the hot sprays, coolant sprays and bending by modelling the correction of the hot sprays as dependent not only on the flatness of the strip edges but on the actual cooling sprays around the edge

area and the actual bending set.

Another important area of application for adaptive modelling is relevant to the strip threading and tail out phases. These phases are critical both in terms of strip recovery as well as in determining the quality of the whole coil. Improper coil starts can lead to coil winding issues along the whole coil length that in turn generates offline flatness issues once the coil is unwound.

Specific work has been carried out to model the behaviour of the mill and the strip during this phase to obtain set-up rules that will provide optimal combination in term of thickness and flatness; these rules have to rely on the estimation of mill status since during this phase most of the on-line measurements are not available and therefore the process controls have to work in “feeedforward” mode.

The new generation of the FATA Hunter hSystem control package includes all the above features aimed to optimise system performances. Process modelling and setup schemes have been integrated within the higher hierarchy Level 2 functionalities due to highly time consuming algorithms, underlying database structures, while real time adaption functions are implemented within the closed loops as in Fig 3.

Level 2 receives and evaluates data at the end of each pass, defining the set-up strategies for the next pass to be rolled, while the controllers adaptive functionalities through Process Observers are optimising in a continuous process the possible combinations of controller actions to guarantee the most profitable results in terms of strip thickness and strip flatness given the actual mill status.

FATA Hunter has implemented these functionalities in the most recent hSystem installations, both on 4-Hi as well as 6-Hi rolling mills. t Contact www.fatahunter.com Aluminium International Today

3/9/15 2:07 PM

ROLLING 43 Fig 1 Vacuum roll during production of multiple strips

Modern slitting lines

After aluminium became the major casting material for chassis frames and motor parts, the industry is now also facing a change within the material application of aluminium in car body construction. By Leander Zielenbach* & Detlef Neumann* Fig 2 Uniformly rewound strips after vacuum strip tension generation.

Reducing the weight of vehicles to meet targets regarding CO2 emission requirements, sustainable use of resources and increasing fuel costs are the major driving forces behind the use of aluminium in the automotive industry.

In addition, aluminium has also shown excellent mechanical behaviour. Optimised weight distribution between front and rear axles is possible and improves the driving characteristics. The capability of aluminium to convert kinematic energy makes automobiles much safer.

However, there are some new features that need to be considered in the production of aluminium sheets for the automotive industry in order to achieve the necessary requirements in terms of mechanical properties and tolerances.

Moreover, dominant mass production requires special solutions when producing and processing auto body sheets.

Based on the Danieli Fröhling high-speed trimming and precision pit slitting line technology, solutions for the aluminium automotive industry have been developed.

Technology requirements For the final customer, the slitting process may still be considered as the finishing part of the cold rolling process, but it can also be seen as the first downstream step after cold rolling and levelling where the “virgin” material has to be converted and

tailored for the next stage. Wherever you want to situate the slitting process it is definitely the point where all the efforts of the upstream production process concentrated on achieving the perfect strip material condition should be finished and not downgraded (Table 1).

One category of technological requirements for slitting lines depends on the condition of the material entering the slitting process, and the goal is to maintain these material features. For automotive applications we can point out the following two issues in this category, both of which are essential to consistently produce the complex geometry of auto body panels with the highest tolerances: t Strip surface quality: The process for multiple slitting requires a pit area where differences in strip length after the slitting process have to be balanced. Downstream the pit, a defined strip tension needs to be generated to ensure stable rewound slit coils. The generation of strip tension

is a critical point for maintaining the strip surface quality. t Strip formability: At various locations within the line, deflection is necessary to guide the material from the decoiler to the recoiler through the slitting process.

Optimised line layouts are required to preserve the material microstructure and maintain material formability. t The other technological requirements are the tolerances that can be directly influenced by the slitting process.

The following quality features are mandatory for the quality of the final product but are also essential for the fast running downstream processes: t Cutting quality: This is basically about the geometry of the finished edge with minimum burr. In the subsequent production steps, for instance, there are dirt-sensitive laser welding procedures that require a minimum edge burr. Highly accurate, stiff and reliable design fulfill the

Automotive material data range Grades:

1xxx, 3xxx, 5xxx and 6xxx

Surface Condition:

Electrical Discharge Textured (“EDT”)

Typical strip width:

1,000 - 2,450 mm

Typical thickness Range

0.50 - 4.00 mm

Yield Strength:

80 - 400 N/mm²

Tensile Strength:

100 - 480 N/mm²

Table 1

*Danieli Fröhling, Germany Aluminium International Today

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Fig 3 Model of combined strip braking unit with felt press and brake roll

highest cutting quality requirements. t Strip width tolerance: A vehicle consists of a couple of thousand parts.

Maintaining close tolerances on each individual part is essential for successful vehicle production. A modern slitting shear is designed to produce finished strips with above-standard width tolerances. t Rewinding quality: Here too, we have a fast running process within mass production that requires almost no telescopic deviation within the rewound slit coils. Highly accurate strip guiding equipment in combination with smart tension generation are essential. t Finishing lines are integrated into the material flow and work cycle of aluminium strip production and must not become a bottleneck for the whole plant: Productivity, flexibility and reliability are the key words. t Productivity: Reduced nonproductive times thanks to synchronised coil, spool handling and automated threading procedures combined with a maximum speed of 800m/min in slitting lines and even up to 1800m/min in trimming lines, make Danieli Fröhling’s finishing lines the most productive available on the market. t Reliability: Minimising equipment downtimes thanks to low-vibration design and the use of first class quality components. Recording and analysing critical machine areas through the use of integrated temperature or vibration sensors. Data will be statistically recorded and analysed by the automation system.

These solutions reduce unforeseen downtimes and maintenance can be planned in a cost-effective manner.

Machine features Even though surface quality cannot be improved during the slitting process we need to make sure that it is not worse at exit than it was at entry. A solution is to equip all the deflector rolls with servo drives. That way the speed of the deflector rolls can be controlled within the range of minimum threading speed and maximum production speed, thereby eliminating any movement that could affect the surface condition of the strip. Oscillating in-line deflector rolls are also provided to clean the incoming coil if it is contaminated especially on the outer coil windings.

Slitting lines for multiple cuts are equipped with a strip tensioning device.

Depending on the strip thickness range there can also be a combination of two different strip braking technologies. For the smaller thicknesses - below or equal to one millimeter - Danieli Fröhling offers its vacuum roll technology, which generates strip tension with minimum movement between the braking system and the strip.

Its operating principle is based on the difference in pressure between the inside of the perforated vacuum roll and the ambient pressure. Tension is generated while the vacuum roll body is driven in the same direction as the strip movement at a slightly slower speed then the strip itself. Thus, strip tension is controlled during production, and applications like taper tension control are possible (Fig 1 & Fig 2).

For thicknesses exceeding one millimetre, the vacuum roll will be combined with an additional braking system such as brake rolls or four-zone air cushion strip press systems. For thicknesses over three millimetres a combination of brake rolls and air cushions might be the best solution. Basically any combination of strip braking technologies are possible and will be customised depending on the product mix of each project. In particular, for automotive applications with a typical thickness range of between 0.50 - 4mm, Danieli Fröhling has developed a combined solution consisting of a brake roll and an air cushion strip press system.

In this combination the brake roll system is connected to a quick changing device, which makes it possible to easily change between an in-line and an off-line brake roll unit (Fig 3).

The air cushion strip press is designed as a multi-zone air cushion system. Zone#1 and zone#2 are arranged in a row in the direction of the line. A pre-tension will be generated in these two zones, followed by adjustment of strip tension in the subsequent zones which are arranged crosswise to the direction of the line.

In order to maintain the formability behaviour of the aluminium material, the overall plastic deformation on the whole line needs to be calculated and optimised.

This is customised in four steps for each new project: Step 1: Designing the line according to the specific requirements of an individual project.

Step 2: Calculating the material elongation at each deflector roll.

Step 3: Summarising to the average total plastic deformation (elongation + compression) due to the number of deflections.

Step 4: Reducing total plastic deformation by optimising deflector roll diameters.

This results in an optimised line layout and deflector roll diameter selection in terms of maintaining the formation behaviour of the aluminium strip for the downstream forming process steps (Fig 4).

Nevertheless, the most sensitive machine within a slitting line is the slitting shear with the requirement of repeatable high cutting quality. The main target of all design efforts has always been to create a shear system that could adjust the position of the cutting tools as accurately as possible. It is characteristic of rotary blade shear technology that the knives never cut through the entire thickness of the strip. There is always a relation between knife tool immersion depth and material braking zone, which depends on the condition of the material and differs between soft and hard alloys. The closer the shear system can be adjusted to this optimal cutting point the better the cutting zone geometry of the finished strip is. Best designs have special bearing

Fig 4 Still framing of Danieli’s simulation model for slitting lines

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arrangements that provide maximum overall stiffness with minimum knife shaft deflection. For reasons of stiffness, the bottom knife shaft may be arranged in a fixed position whereas the upper knife shaft is arranged in linear guides.

The adjustment of the upper knife and consequently the positioning of the knife tools are done with backlash-free spindles, which are driven via servo drives. At the same time the position is controlled by highly accurate position transducers. This combination of servo drive technology and special sensors also allows closedloop control of knife positioning while guaranteeing constant cutting quality throughout the entire coil.

The horizontal position of the knife to adjust the cutting gap is also important for cutting quality. For trimming shears with individual trimming heads the cutting gap is controlled in the same way with a combination of servomotors and position transducers that shift the upper knife position. What is more difficult is the adjustment of the cutting gap in rotary blade shears with long knife shafts for multiple cuts. In these shears the cutting gap has to be set by adding spacers to the knife tool setup. This is

BACKING

Fig 5 Drive side knife shaft bearing arrangement of CNC slitting shear

often time-consuming and does not allow any readjustment during line operation.

To deal with these difficulties, Danieli Frรถhling recently developed a solution based on a special knife tool arrangement where the upper knife shaft is shiftable, making it possible to adjust the cutting gap without resetting the tools. For this latest innovation patent is pending.

In conventional rotary blade shears the achievable strip width tolerance depends

YOUR SINCE

on the accuracy of the rotary blade shear and on the knife tool setup and knife tool tolerances. Within CNC trimming shears used for wide strips the achievable strip width tolerance depends on the accuracy of trimming head positioning. For these adjustments Danieli Frรถhling also uses system with servo drives and highly accurate position transducers.

Incoming coil temperature may be considered for the set-point of the trimming head position as well. This ensures that for incoming coils with a temperature above ambient the strip width is within tolerance even after it has cooled down.

Another area where servo drive solutions are applied is on the last deflector roll before the recoiler. The smooth movement of the last deflector roll secures a constant distance between the deflector roll and the rewinding point at increasing coil O.D. This solution provides rewinding quality with the lowest telescopic deviation regardless of whether trimmed wide strips or narrow multiple strips are being produced. t Contact www.danieli-froehling.de

COMPETITIVENESS 65 YEARS

ADVANCED TECHNOLOGIES AND EQUIPMENT FOR COLD ROLLING AND CUTTING OF ALUMINIUM STRIP

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Run of the mill Innoval Technology (Innoval) specialises in working with aluminium rolling mills and similar processes, in order to achieve a high rate of return on the capital invested. This article covers some of the methods employed by Innoval’s consultants to get the most out of the rolling process. The focus is on the use of computer-based models to supplement their understanding of the process and predict the performance, as well as the best ways of running the equipment. By Dr Rade Ognjanovic* Rolling mills are expensive machines that are carefully managed. A mill can have a service life of a few decades and it will be regularly upgraded.

It may be that the rolling mill itself is not run in a mode to make it as productive as possible. For example, this may involve running the rolling mill at below its fastest speed in order to achieve a product with the correct characteristics that can be processed more easily downstream of the mill. Software tools and techniques can be used to help optimise a process stream.

In simple terms, the rolling process involves rolling an ingot or sheet into a thinner product. If we consider the ingot, it starts off with straight orthogonal surfaces. After every pass, the sides, the ingot front end (nose) and rear end (tail) will become less planar. Finite element analysis (FEA) models can be used to predict the nose and tail shapes along with the lateral spread of the ingot.

After about five passes through the mill the nose or tail may open up (to form an “alligator�), an example of which is shown in Fig 1. The alligator is a common form of deformation in the rolling process. It is guillotined off and discarded before it becomes too large to enter the roll gap or cause other rolling problems such as initiating a crack that can run a considerable length down the ingot along the ingot centre in the horizontal plane.

In order to minimise the amount of alligatoring and wastage of material, the rolling conditions can be varied. A model can be constructed that predicts the formation of an alligator and then that model used to adjust the normal rolling and edge rolling practices to influence the shape of the alligator. This will avoid the expensive trial and error approach to developing the sequence of normal rolling and edge rolling reductions (otherwise known as the pass schedules) that some mills use. There is a limit to the size of the

Fig 1. An alligator on the end of an ingot.

Fig 2a. The ingot (green) at the start of the simulation with the normal work roll (light blue), centre plane of symmetry (dark blue) and edge roll (yellow).

Fig 2b. The ingot after five passes through the normal and edge rolls.

Fig 2c. The ingot nose after five passes.

Fig 2d. The ingot nose or tail after five passes viewed from the side. Only the top half is modelled.

reduction. Too large and the ingot cannot be rolled (a refusal) or the roll forces and motor torque may be too large for the mill stand and motors. However, if the reductions are too small they increase production times and the ingot can cool

too much which can make it very difficult to roll.

In Innoval, such a validated FEA model is used to predict the shape of the alligator, see Fig 2. Only the top half of the ingot is modelled because of the horizontal plane

*Senior Computer Modeller, Innoval Technology Ltd Aluminium International Today

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Fig 3. (left) A 2D FEA simulation used to calculate forward slip.

0.09 0.08 0.07 Forward slip

0.06

Fig 4. (right) Forward slip as a function of friction as predicted by the FEA. model

Distance from ingot centre (m)

0.025 0.020 Entry Exit

0.015

0.04 0.03 0.02 0.01 0.00

0

0.1

0.2

0.3 Friction

0.4

0.5

0.6

Fig 5. (left) The velocity distribution through the ingot thickness at the roll bite entry and exit and also at the neutral point.

Neutral point 0.010 0.005 0.000 0.97

0.98

0.99

1.01 1.02 1.00 Horizontal velocity (m/s)

of symmetry. Similarly, only one side of the ingot is modelled because of vertical plane of symmetry running down the length of the ingot. Both planes of symmetry enable the simulation to run quicker by reducing the number of elements in the simulation and therefore the number of calculations.

The alligator shape depends on the rolling geometry, aluminium alloy, friction and pass schedule. The pass schedule can involve edge rolling to control both the lateral spread and the shape of the alligator so this is included in the Innoval FEA simulation. Rolling schedules can thus be developed to minimise the amount of material lost at the guillotine by varying the reductions and sequence of normal rolling and edge rolling. The cost of developing the schedule on computer is lower than the cost of multiple on line trials.

Innoval also has a fast-running analytical rolling model to predict roll loads and torques amongst other things.

Some modules of the model have been developed by using FEA models to predict, for example, forward slip. Forward slip is how much faster the slab exits the roll bite compared to the roll surface speed.

It is expressed as a percentage of the roll surface speed and it is easily measured on a mill. Two-dimensional FEA simulations, such as the one in Fig 3, can be used to calculate the forward slip. From the results, analytical expressions can be derived for use in the fast-running model.

A typical relationship between roll friction and forward slip is shown in Fig 4. Extrapolating the curve in Fig 4 to March/April 2015

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0.05

1.03

1.04

Fig 6. (right) The Innoval Tension Leveller program that models tension levellers.

lower values of friction will result in zero forward slip at which point the ingot will refuse (not roll). This type of information is used to calibrate the rolling models and predict refusal conditions.

The same FEA model was used to study the velocity of material through the roll bite. Early rolling models assumed the material passing through the roll bite did not have a velocity distribution through the ingot thickness in order to simplify calculations within the model. This class of rolling model is called a homogenous model. Recently, more complex and more accurate models allow the material velocity to vary through the ingot thickness and are called non-homogenous models.

The FEA model of rolling predicts a significant velocity distribution through the ingot thickness as shown in Fig 5 at three points – the roll bite entry, exit and the neutral point. The neutral point is where the ingot surface speed matches the roll speed and the roll surface speed was 1 m/s in this example.

At the roll bite entry, the blue curve in Fig 5, the ingot surface is moving faster than the ingot centre. At the exit, the brown curve, the ingot surface, is moving slightly faster than the ingot centre. At the neutral point, the red curve, the ingot surface is moving close to the 1 m/s roll surface speed, the slight discrepancy is a consequence of the discretising of the ingot into finite elements. However, the ingot centre at the neutral point is moving at almost 1.03m/s, about as fast as the exit velocities.

This type of modelling helps to develop the rolling model so that velocity distributions through the ingot thickness are correctly accounted for.

As mentioned above, the mill is run in a mode that is optimum for the process as a whole. This means the processes upstream and downstream of the mill need to be considered and this is where Innoval can use some of its other process modelling tools to find the optimum conditions for the line or product.

If a multi-slitting line takes sheet from a mill, the sheet has to meet certain specifications for thickness profile and flatness otherwise the slitter cannot wind the slit strips. Innoval has a winding model to develop winding strategies to give stable winding in slitters. The winding model is used to set mill targets for flatness and profile. This is an example of where the whole process chain must be considered to improve process efficiency.

The winding model predicts the contact pressures between laps. If the contact pressures are too small the coil can collapse as it is moved off the slitter. The winding tensions can be adjusted to avoid this. Larger winding tensions can increase contact pressures between laps but at the risk of crushing the core onto which the laps are wound. If the winding tensions are too low and there is a thickness profile or flatness profile on the incoming sheet, the slitter can have winding problems due to loose coiling (where some slit material becomes loose between the knives and the wound slit product).

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ROLLING 49

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Fig 7. A FEA simulation of a roller leveller with (pictured right) and without contact force vectors displayed.

Loose coiling can cause tangles, which immediately clog the slitter and production stops. All the care, resource and energy used to produce the coil is lost. Depending on the amplitude of profile and flatness, the winding tensions can be adjusted during the run to avoid loose coiling and core buckling. The lap compressibility (compliance) which is the deformation of laps as they are compressed, absorbs some of the profile and flatness differences across the width of the sheet during winding.

The lap compressibility is dependent on the lap contact pressures, large contact pressures pack the laps tightly and the laps become less compressible. The winding process cannot cope with too AM5877_AIT 18/02/2015 16:01 Page under 1 high a value for profile or flatness

these conditions. The task is to tailor the winding tensions during the run to control the lap compressibility to absorb profile and flatness differences during winding.

Lap compressibility will vary through the coil and during the winding process because as each lap is added to the coil, the lap contact pressures already on the coil will change. Although lap contact pressures can be measured it is difficult to do so because the measurement disturbs the coil and the results are error prone.

A winding model calculates the contact pressures. Armed with that knowledge, the winding process can be controlled and the process window for incoming flatness and profile increased considerably.

In reality, the profile and flatness will vary along the length of the coil. Typically,

profile at the start and end of the coil is worse as the mill accelerates and decelerates either side of the steady state conditions. The varying flatness and profile as a function of position down the length of the coil can be put into the winding programme to provide more accurate predictions of winding stability.

If a levelling process follows the rolling mill then Innoval has two models that can help to define process windows – the Innoval Tension Leveller program (Fig 6) and a FEA simulation of a roller leveller.

The Innoval Tension Leveller program is shown with the geometry of the rolls and strip in the top sash window and the strip through thickness stresses and strains in the bottom sash window. The model can predict sheet curvature for example and the levelling conditions such as the roll differential speeds can be varied to find the optimum settings. It has been validated against a FEA model of a sheet going round rolls such as the roller leveller example in Fig 7. The FEA model has itself been validated using rolls with force transducers to measure the levelling forces. The forces are dependent on both the alloy and its temper condition. t Contact www.innovaltec.com

Are you looking for compact Modern Foil Annealing Furnaces, an ‘As New’ Rolling Oil Filtration Plant, Kampf/Schmutz Foil Separators or a Herkules WS350 Roll Grinder?

The below equipment was unsold in the recent online auction for Comital Skultuna AB in Sweden and is now available at very competitive prices:-

n Electric Annealing Furnaces - €30,000 each n Kampf and Schmutz Foil Separators - €35,000 each n As New Lucent Rolling Oil Filtration Plant (cost €400,000) - €35,000 n Herkules WS350 Roll Grinder - €50,000 n Hunter Stretching/Cleaning Line - €80,000 n Schmutz Slitter - €40,000 n Rail Mounted Annealing Furnace Charging Car - €1,500

This is an excellent opportunity to acquire clean, well maintained equipment from a leading aluminium processor at knock down prices.

Contact Charles Moses on +44(0)1724 334411 or charles.moses@cjmasset.com for full details.

Aluminium International Today

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INNOVATION 51 5

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The ‘Innovation Challenge’ What do companies like Apple, BMW, Airbus, Starbucks, Samsung, Bayer, Tesla and Facebook have in common? What sets them apart from their competition? Each of them is recognised as an innovation leader. They do not accept the status quo, they are constantly thinking disruptively and they are always looking for ways to improve. These companies have changed our lives. They have innovation in their DNA.

By Jack Clark* Notice that I did not include the names of any aluminium companies in this list.

What shift within the industry would be necessary to make that happen?

Beyond the business value of innovation, think about what recognition like this would mean to your company and its stakeholders. It’s priceless.

Ultimately, successful innovation will determine the winners in our industry.

What does innovation mean?

There’s no doubt that innovation has become a much used, and perhaps overused phrase, in business.

The term dates back to the mid16th century and from Latin innovat, meaning renewed, altered. And a dictionary definition tells us it means to make changes in something established, especially by introducing new methods, ideas or products.

Regardless, innovation means different things to different people. We recently asked researchers at Novelis to think about what innovation means to them. We heard words like revolutionary, amazing and inspiring. From my perspective, innovation is a focus on differentiated products and services that deliver higher profits.

What can we learn from others?

The modern aluminium industry started in 1886 with the invention of the Hall– Héroult process, independently and almost simultaneously, by Charles Martin Hall and Paul Héroult. There have been a number of noteworthy innovations since then, including heat treatable alloys, direct chill casting, the two-piece beverage can and the aluminium-intensive vehicle.

However, we also need to look outside our industry for perspective. What would the aluminium industry look like today if it innovated in a wholly new way?

The Novelis innovation journey Our innovation journey at Novelis started

in earnest five years ago, shortly after CEO Phil Martens joined the company. We were at a crossroads, and Phil asked us a very simple question. Did we want to maintain the status quo and pursue the safe path or take a bold, yet uncertain approach, and become a disruptive innovator? Our team chose the second path. This was the defining moment for our team.

Since that time, there have been four key areas that we believe have advanced our vision of becoming the technology leader in our industry: Executive support, people, organisation and management systems.

Executive support Clearly, we began with the support and vision of our CEO. When we began our journey, our primary R&D centre had limited collaboration with the rest of the organisation and minimal contact with senior leaders. We made the bold, risky and expensive move to relocate our R&D headquarters to Atlanta. We built a brand new global research and technology centre just 30 minutes from our global headquarters. This centre is the critical focal point for all R&D within the company. It is also the central point for all of Novelis’ technical activities worldwide including engineering, manufacturing excellence and metallurgy.

Additional executive support came in the form of a significant budget increase and the focused attention from our CEO. People The single most important element of our innovation strategy is our focus on people.

We knew the move of our global R&D operations was bold and risky. Indeed, we lost the majority of our researchers - only 10% of our staff relocated to the new centre. We lost a lot of knowledge and talented staff. However, this did provide us with the opportunity to adjust the organisation and hire new team members.

Organisation Previously, the technical organisation at Novelis reported to two different executives, creating a fragmented and siloed effort. To address this, a Chief Technical Officer position was created to integrate the separate groups within one organisation. With our new centre, all of these functions are now also housed under one roof. As a result, the collaboration between the groups has increased exponentially. In R&D, we created global technology director roles for can, automotive, specialities and recycling and created stronger connections with the commercial side of the business to ensure our strategy is aligned with the market.

Management system Researchers are not always the best programme/project managers. To help ensure projects are prioritised, resourced and tracked effectively, the team defined a new management system. We manage projects in four areas including exploratory, disruptive, company critical and recycling. This system has been a key enabler in realising innovations like the launch of stronger alloys for automotive applications, developing the latest in pretreatment technologies for automotive and opening the world’s largest and most technologically sophisticated recycling centre.

What does this mean to you?

Our innovation journey has not been smooth and we have made mistakes. But, it is incredibly exciting. To be successful in its innovation efforts, an organisation requires executive support, funding and clear direction. It demands risk-taking and an environment that allows for failures, but you must fail quickly and move on. It’s worth it, because in the end, innovation accelerates growth and is a key differentiator in the marketplace. Does your company have what it takes? t

*Senior Vice President and Chief Technical Officer, Novelis Aluminium International Today

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52 PERSPECTIVES

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Davide Lazzaretto* speaks to Aluminium International Today about its involvement in major new projects and how developments in the secondary aluminium sector are affecting the company’s portfolio.

Techmo answers 1. How are things going at Techmo?

In the recent past we have been awarded several big projects, which kept us very busy. Today we have other orders in progress, not directly related to greenfield or brownfield projects.

2. How is the current aluminium market affecting Techmo?

The current price of aluminium is not helping the producers to release the investments so easily. On the other hand, low prices force them to research new solutions for increasing their efficiency and competitiveness. Techmo, in recent years, invested a lot in R&D to enhance the performances of the equipment, which thanks to the new technologies had a positive impact on the costs. This is encouraging to us.

3. Where are you busiest at present?

The Gulf is the area in the world where our presence is strongest, but in general our equipment is well appreciated all over the world. We took part in almost all the major projects that have occurred across the world in the recent past. We have been involved in RTA Kitimat, EMAL phase 1 and 2, Ma’aden, Hindalco Mahan and Aditya etc. and we are very proud of that.

4. How has Techmo responded to ‘green politics’?

Talking about our Mobile Equipment, the standard design uses the latest generation of diesel engines for lower fuel consumption and reduced emission.

Upon request each vehicle can be supplied based on an electrical version, powered by battery. Our cleaning equipment is

provided with a high efficiency dust extraction and filtering system, in many cases combined with a solution enabling recycling of the collected material.

5. What does the future hold?

In the primary sector, we have seen a development in the past where certain kinds of operations by vehicles were reduced, due a trend of using the pot tending Assembly Crane.

Nowadays we see the opposite development. Primary smelters have started to do several operations by vehicles again, instead of using the pot tending crane.

Techmo will continue, as usual, to approach the customers as a partner providing tailor made equipment and helping to find solutions.

VII International Congress and Exhibition Krasnoyarsk Russia

14-17

NON-FERROUS METALS & MINERALS

September 2015

The Congress program includes: XXI Conference “Aluminium of Siberia” XI Symposium “Gold of Siberia” IX Conference “Metallurgy of Non-Ferrous and Rare Metals” Mineral and Raw Materials Sources Forum Congress Sections • Mineral and raw materials sources of non-ferrous and precious metals • Current technologies of mineral raw materials mining and processing • Alumina and bauxite production • Non-ferrous and rare metals production • Aluminum reduction technology • Silicon production • Precious metals production • Carbon and carbon materials • Casting of non-ferrous metals and alloys. Recycling • Thermal and pressure metal treatment • Management

Sponsors

March/April 2015

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Organizing committee: +7(391) 269-56-47 nfmsib@nfmsib.com www.nfmsib.com Exhibition Subjects

• • • • • •

Raw and other materials Tools and equipment Automated process control systems Equipment maintenance and repair Transport and logistics Ecology, wastes processing and disposal, labor protection, operational safety • Consulting, engineering, investment projects • Scientific investigations and innovative R&D projects

Informational partners

Aluminium International Today

3/9/15 2:12 PM

Al

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