Recap 2019: Top downstream and recycling aluminium projects in 2019

Continued from Part I

Almost all major aluminium producers are expanding into downstream and independent semi-finished aluminium projects are coming up to cater to the growing aluminium demand in recent years. The steady growth in aluminium demand was mostly driven by automakers’ focus on making lightweight, fuel-efficient vehicles, which can adhere to stricter carbon emission standards leading to material substitution, i.e. aluminium instead of steel. It was further enhanced by growing expansion of high speed transport systems and a shift towards electro-mobility.

Though currently the automotive market is down because of the slowdown in global economy, China is forecasted to produce 35 million vehicles by 2025 and electric vehicles would account for about seven million or 20% of the total. The use of aluminium automotive body sheet as well as other components is expected to increase in the coming years leading to more consumption of aluminium. We are listing here some key downstream projects that were announced and commissioned in 2019.

1. UACJ Corporation forms JV with China's CITIC Group

Japan’s UACJ Corporation signed an agreement in March 2019 with China-based CITIC Group Corporation to form a JV with two CITIC Group subsidiaries, CITIC Bohai Aluminum Industries and CITIC Dicastal that make aluminium automotive components. The joint venture company will manufacture and sale extruded aluminium parts and components for automobiles. The group aims to meet the growing automotive demand in the Chinese market by expanding its facilities in China and form a global supply network of high-quality automotive aluminium components.

2. Arconic to invest $100 million on its Tennessee facility

Arconic Inc. announced it will invest nearly $100 million to expand its Tennessee Operations facility near Knoxville, Tennessee. The company will expand its hot mill capability and add downstream equipment capabilities to manufacture industrial and automotive aluminium products.

In the automotive market, Arconic said aluminium is used in applications from bumper to bumper, and demand for automotive aluminium sheet in North America is expected to double in the next 10 years, according to a report published in July 2017 by independent research firm Ducker Worldwide.

3. Rusal announced investment on Braidy aluminium mill Kentucky

RUSAL announced in April 2019 that it had collaborated with Braidy Industries to construct an aluminium rolling mill in Ashland, Kentucky, USA. Braidy announced its plan to build the aluminium rolling mill in Kentucky in 2017 and broke ground in June 2018 with a promise to create more than 500 high-paying jobs. The mill is expected to produce 500 thousand tons of hot rolled and 300 thousand tons of fully finished cold rolled products per year. The mill’s output is expected to balance the anticipated deficit of the auto body sheet in the US market.

Rusal’s plan to invest on the project created controversies as it will get 40% stake in the mill project in exchange of that. Congressmen requested for an investigation of the investment on national security concern though Rusal and Braidy vehemently denied any such concern.

4. Vedanta announnced hot metal park at Jharsuguda

In partnership with the Odisha government, Vedanta is reportedly planning to set up a hot metal park at Jharsuguda, which would host auto ancillary units with Vedanta’s aluminium unit being the anchor, the announcement came in June 2019. The company, while specifically looking at alloy wheels, is already in talk with top automobile original equipment makers (OEMs) and has also signed a few agreements with them. The setting up of a hot metal park is part of Vedanta’s plan to scale up the value curve. The company is aiming at increasing its metal capacity to 3 million tonnes from 2 million tonnes.

5. The Bogolsovsk Cable Factory

The Bogolsovsk Cable Factory (BCF), a Joint Venture between RUSAL and the ELKA-Cable Company, has started production of cabling and wiring products with an aluminium alloy core. The factory will produce three types of wire and cable, including oil submersible cables, self-supporting insulated wires and flexible wires for use in industrial facilities. The aluminium alloy processing capacity of the production facility is 4,400 tonnes, which will be supplied by RUSAL. BCF plans to reach maximum output within three years, RUSAL said.

The plant will continue to manufacture aluminium wires, strands and conductors necessary to produce other types of cabling products.

6. Bharat Forge to set up forging facility in USA

Bharat Forge America, Inc., a wholly-owned subsidiary of Bharat Forge Limited, will invest approximately US$56 million initially to set up a new plant in the US. The company will construct a green-field forging and machining facility in North Carolina. 

The company aims to make a similar investment in the coming years to enhance the production capacity of the plant.

7. Kobelco commissions expanded Bowling Green facility

Kobelco Aluminum Products & Extrusions Inc. celebrated the commissioning of its Bowling Green facility in September 2019. The company is adding an extra melting furnace and extrusion press in the plant, which will double the extrusion production capacity to meet growing demand from automotive customers.

8. Vedanta plans to build an aluminium flat rolled products plant

According to a recent report, Vedanta is considering to set up an aluminium flat rolled products plant with an estimated capital expenditure of INR 2,500 crore. This is part of a plan to expand its portfolio of value-added products, said a senior official.

The capex will be part of Vedanta’s INR 15,000 crore investment plans to take the aluminium capacity from the current 2 million tonnes to 3 million tonnes in the next 3-4 years.

9. Nippon Light Metal Georgia to build aluminium auto parts factory in Georgia

US based auto parts supplier Nippon Light Metal Georgia (NLMGA) plans to build a US$50 million factory in north-western Georgia. The company, which makes aluminium automotive components, held a ground breaking ceremony for the new factory in Adairsville — about 60 miles northwest of Atlanta last week.

Recycling Projects

Aluminium industry is under pressure to cut CO2 emissions in primary aluminium smelting and save extra CO2 emissions through increased recycling. Growing focus on sustainability and recycling has led to the commissioning of a number of new secondary aluminium projects in recent years. Downstream producers have expanded their recycling facilities and automotive OEMs resorted to closed-loop-recycling. Here are a few key downstream and recycling projects that were commissioned and started in 2019.

10. Runaya Refining plant in Odisha

The Chief Minister of Odisha laid the foundation stone of Runaya Refining at Jharsuguda in February 2019. The project is an end-to-end green solution for the recovery of aluminium and processing residual waste from Aluminium smelters. The ceremony was held in presence of Mr. Annanya Agarwal - CEO, Runaya Refining, Mr. Bibhuti Bhushan Das - DM and Collector, Mr. Abhijit Pati - CEO, Vedanta Ltd., Jharsuguda and other senior members of the district administration and Vedanta Ltd.

Speaking on the occasion Annanya Agarwal said, “Runaya’s vision is to enable growth in the Aluminium industry in a sustainable manner. We provide innovative sustainable solutions for the Aluminium industry.”

11. Daiki Aluminium broke ground on recycling plant

Daiki Aluminium Industry India, a 100 per cent subsidiary of Daiki Aluminium Industry Co. Ltd., Japan, has broken ground on a new aluminium alloy recycling plant at Sri City in Andhra Pradesh (AP), India in March 2019.

Daiki Aluminium Industry will make an investment of INR250 crore. The new recycled aluminium alloy plant will be built on a 20 acre plot in the Domestic Tariff Zone and is expected to be commissioned by February 2020. The plant will manufacture secondary aluminium alloy ingots at an annual capacity of 84,000 tonne. The products will be exported to ASEAN and Japan for supply to automobile companies.

12. Gravita Tanzania starts production of aluminium cast alloys in Tanzania

Gravita India, a leading Indian multinational company having state-of-the-art Lead and Aluminium processing unit at Jaipur (Rajasthan), has announced that its Tanzania based step down subsidiary, Gravita Tanzania has started commercial production of Aluminum Cast Alloys from its new plant having a capacity of around 6000 MTPA.

13. Novelis broke ground on Greensboro recycling facility

Novelis Inc., the world leader in aluminium rolling and recycling broke ground on a US$36 million expansion to upgrade recycling capacity at its Greensboro facility in October. The investment will fund state-of-the-art equipment for aluminium scrap recycling along with other technical and construction upgrades. It will also enhance the facility's safety systems. The expansion is likely to be completed by the fourth quarter of 2021.

14. Brunel University and Constellium to develop high-strength recycled aluminium alloy

Researchers at the Brunel Centre for Advanced Solidification Technology (BCAST) at Brunel University are working in collaboration with Netherlands-based aluminium products manufacturer Constellium to produce high-strength aluminium alloys from completely recycled metals. This strategic research partnership was established in a bid to reach a full circle aluminium use and recycling system.

According to Prof Zhongyun Fan, project leader and director of BCAST, they would work together to develop high performance recycled aluminium alloys, and test their applications in lightweight vehicle construction.