A look back on key investments and developments in the primary aluminium sector, 2022

In the midst of a potential demand-supply scenario across the primary aluminium sector, given the rising investments towards reducing the carbon footprint at production, there were some key developments in global primary aluminium projects in 2022. While some projects were for developing clean energy to power aluminium smelters, some were for expanding integrated greenfield aluminium capacity to meet the anticipated 96.6 million tonnes of world aluminium demand. Given below are the key primary aluminium projects in 2022 –

In early May 2022, Sunshine Hydro and Energy Estate proposed the construction of the world’s first super-hybrid green hydrogen project in Central Queensland, valued at $5.5 billion with massive wind and pumped hydro facilities. The project is expected to feature 1.8GW of new wind generation and 600MW of pumped hydro, inducing 18 hours of storage capacity.

The energy production list would consist of 300MW of hydrogen electrolysers, 50MW of liquefaction and a 50MW hydrogen fuel cell with an ability to produce 65 tonnes of green hydrogen per day. The operation of this plant would ultimately mean an uninterrupted power supply to domestic aluminium smelters and alumina refineries.

In the same month, the Chief Executive Officer of Dubal Holding, Ahmad Hamad Bin Fahad, and the President of Nature Alu, Denis Mazerolle, signed a Memorandum of Understanding (MoU) to materialise the first high purity aluminium facility in the United Arab Emirates. The primary focus of this project will be on producing aluminium of grade 4N and higher.

The companies will jointly lay out a framework for the feasibility study covering the technical, commercial, operational and regulatory details. They will also merge into a joint venture to further acknowledge the project’s future investments and implementations. They will lend help to each other during the time of need, whether for decision making or monetary purposes.

The worldwide leader and investor in renewable energy sources Actis Group supported Atlas Renewable Energy, in collaboration with Hydro Rein, is building a US$320 million (EUR 297million) worth Boa Sorte solar park in Paracatu, Minas Gerais. This 438-MW solar power plant will supply the largest producer of primary aluminium in Brazil, Albras Alumínio Brasileiro S.A. (ALBRAS), which has been catering to the domestic and external markets with high purity ingots since 1985.

As part of the power purchase agreement valid from 2025 to 2044, Albras will procure 815 GWh of electricity from Boa Sorte, which will suffice 12 per cent of Albras’s annual power needs.

Emirates Global Aluminium invested in a Dh4 billion waste-to-energy project, which will convert 1.9 million tonnes of waste per year into renewable energy to generate 200 megawatts of electricity to feed local grid to help them accelerate aluminium production. In addition to this, EGA in the year last successfully started DX+ Ultra reduction cell technology with a modified liner at 500kA. This increased amperage to 500kA is predicted to boost aluminium output by 5 per cent whilst lowering the cost per tonne of new reduction cells.

While the development of renewable energy projects to support smelting was in full swing in 2022, the year also witnessed capacity expansions and investments in the primary aluminium sector. For instance, Rio Tinto, one of the global metal and mining giants, announced its decision to invest US$188 million (CA$240 million) to augment the production capacity for low-carbon, high-value aluminium billets at its Alma smelter in Lac-Saint-Jean, Quebec by 202,000 tonnes. The facility will be expanded to accommodate new state-of-the-art equipment to recast a large portion of aluminium into higher value billets. The construction of the project will reportedly commence in May 2023.

In 2022, China Hongqiao Group built 850,000 tonnes of capacity in Yunnan, and by the end of 2023, it would build a total 2.03 million tonnes in Yunnan Hongtai plant. This is part of the company’s aspiration to move 2 million tonnes of capacity to the country’s southwest by the end of next year. Ron Knapp, adviser to the office of the chairman, clarified that relocation would occur despite Yunnan’s ongoing power supply disruptions.

In August, the Government of Odisha signed an INR 2005.89 crore investment accord for the metal industry, along with pharmaceutical, chemical, infrastructure, and tourism sectors. The State Level Single Window Clearance Authority (SLSWCA) committee, chaired by Chief Secretary S C Mohapatra, signed off on these investments to build a commercial ground in the state.

The committee also accepted the proposal of Runaya Aluminium Pvt Ltd. (RAPL) for constructing a 5,000 tonnes aluminium powder and pigments plant in Jharsuguda district with a capital investment of INR 80 crore, which will open job opportunities for 125 eligible candidates.

In addition, Odisha state government approved Adani Group to set up a 4 million tonnes per annum integrated alumina refinery and a 175 MW captive power station in the bauxite-rich Kashipur area of the Rayagada district with an investment of INR 41,653 crore. The Ahmedabad-based multinational conglomerate Adani Group had shared its aspiration to explore aluminium production opportunities. Hemant Sharma, the Principal Secretary Industries Department, Odisha, had said negotiations with the Adani Group forwarded to aluminium from alumina.

Indian billionaire industrialist Gautam Adani-led Adani Group announced to invest in building an integrated aluminium project. The company received approval from the Odisha state government to set up two projects, including a 4 million tonnes per annum integrated alumina refinery.

In September 2022, Alcoa Corporation entered into a new power purchase agreement (PPA) with Endesa to facilitate reopening of the San Ciprián aluminium smelter in Spain. Electricity will be delivered to the smelter's consumption point through balancing services directly from the market or baseload volumes from a power purchase deal with Endesa. The agreement covers up to 131 megawatts starting in the second half of 2025 and continuing through 2033, or little more than 30 per cent of the smelter's maximum-capacity energy needs.

In the same month, Anil Agarwal, the Chairman of Vedanta Resources shared new investment plans of more than US$3 billion (INR 25,000 crore) to expand aluminium, ferrochrome, and mining businesses in Odisha. According to the company, this quantum of investment will contribute nearly 4 per cent to Odisha’s state GDP through its operations (direct and indirect).

Besides, the company is setting up one of the largest aluminium parks in the country near its Jharsuguda smelter to boost the domestic aluminium downstream ecosystem.

In October 2022, DTE, an Icelandic metal innovator, has signed a US$1.85 million deal with Norurál Grundartangi ehf (Nordural), a fully-owned subsidiary of Century Aluminium Company, to meet the growing demand for low-carbon aluminium products. DTE will utilise its flagship chemical composition analysis solution to enhance Nordural’s four skimming units of the new low-carbon billet casthouse. The new integrated casthouse will successfully produce150,000 tonnes of billet latest by the first quarter of 2024. DTA’s help is crucial in checking the quality of the molten aluminium transferred from the electrolysis pot room to the furnaces and determining which quality of aluminium should be stream-lined for use for which particular purpose so that a circular economy can be created.