Australian Aluminium Council

Transcription

1 Sustainability report 2005

2 The Australian Aluminium Council is the peak industry association representing the Australian aluminium industry. The Council s members include companies operating in each of the following sectors: n bauxite mining n alumina refining n aluminium metal production n semi-fabricated aluminium production and distribution. The Council aims to: n increase understanding of the aluminium industry in Australia and internationally n encourage the growth of the aluminium industry in Australia and in the use of aluminium in Australia and overseas n act as a focal point for the industry on key national issues such as climate change, trade, health and the environment n inform and assist all those with an interest or involvement with the industry. The Council through its technical group develops and maintains material specifications, standards and other technical data for those users both within and outside the industry. Australian Aluminium Council ACN Level 1 Dickson Square Building Dickson Place Dickson ACT 2602 Telephone Facsimile web Aluminium Technical Advice Service Telephone While all reasonable care has been taken to ensure the accuracy of the material contained herein, the AAC shall not be held to be liable or responsible for any loss or damage incurred by any person through the use of this material. Australian Aluminium Council Members Alcan Gove Alcoa Australia Rolled Products Alcoa of Australia Alumina Limited Australian Aluminium Finishing Capral Aluminium CITIC Australia Comalco Limited Hydro Aluminium Kurri Kurri Queensland Alumina Rusal Australia Tomago Aluminium Ullrich Noyes Metals Worsley Alumina

3 About this report This is our second sustainability report on the Australian bauxite, alumina and aluminium industries and remains a workin-progress. The report continues the work we started last year on showing how our industry is using physical resources, the impacts of that use, what we are producing and what are the by-products from our activities. We also show how we are managing these outputs and working to reduce the impacts resulting from the production processes. We recognise the ongoing interest of governments and communities in knowing how aluminium production affects their environment and their society. As our Australian industry seeks to create value for its shareholders, we also recognise the legitimate interests of other stakeholders: employees, local/ regional communities, customers, suppliers, and society at the national level. This 2005 report starts the process of identifying our safety performance a matter of key importance to our members is to deliver against the objective of a safe working environment for all our people. Key performance indicators from the range of inputs of raw materials, product outputs and by-product flows, both gaseous and non-gaseous, have been retained with the focus on key issues in sustainability greenhouse gas emissions, efficient use of resources and recycling. Aluminium is continuing to deliver the products sought by society at the global level and is sustainable. This report shows how the Australian sector of the industry is contributing to this outcome and that our performance is continuing to improve. Health and safety The goal is to reduce workplace injuries to zero. All our people are entitled to have a safe and healthy workplace. Safety The Council has commenced collecting safety data from bauxite/alumina/aluminium operating sites for While full industry data is yet to be developed into a series to allow the identification of industry and sector specific trends, the initial data shows a lost time injury frequency rate (ltifr) similar to the rate for the broader Australian minerals sector (as reported by the Minerals Council of Australia (MCA) 2005 Minerals Industry Survey). The provisional ltifr for 2005 is 3.1 (per million hours worked), slightly below the 3.2 recorded for the previous five years on incomplete industry data. The total recordable injury frequency rate (trifr) for 2005 was 9.5 (per million hours worked) compared with 17.3 recorded for the previous five years on incomplete industry data; this compares with the 2005 Minerals Industry Survey indicative figure of 15.0 for the broader minerals industry. Health The Council s members participate in an ongoing forum to monitor and share information on potential health issues associated with the production of alumina and aluminium. The forum s membership is made up of hygienists and medical doctors from member companies, ensuring that there is a wide coverage of the issues concerning the industry. As well as the general sharing of information and experiences, some recent issues covered by the forum include occupational asthma, noise induced hearing loss and caustic mist exposure. The forum also links directly into the International Aluminium Institute Health Committee. We will provide more detailed health and safety information and data in subsequent reports.

4 Production Since 1990, alumina production has increased by 60 per cent and aluminium production by 54 per cent. The Australian bauxite, alumina and aluminium industries developed on the natural resource endowments of the country bauxite and energy delivering economic growth, regional development and supplying both world and national demand. In 2005, Australian bauxite production was 62 million tonnes, the world s leading producer. Alumina production was 17.9 million tonnes of metallurgical or smelter grade and Australia is also the leading world producer of alumina about 30 per cent of global production. Aluminium metal production was 1.9 million tonnes in 2005, a similar level to While both alumina and aluminium production levels in 2005 remained similar to 2004 results, alumina capacity is currently being increased through both debottlenecking of existing plant and the construction of additional capacity such as the Alcan Gove G3 project. Further production growth is anticipated as recent developments ramp up to full capacity. Aluminium production is at a plateau with only small incremental increases expected as greater efficiencies are tweaked out of existing potlines; no new potlines are under construction in Australia at the present time. Since the 1970s oil shocks that catapulted Australia s coal-fired base load electricity into the forefront for the competitive supply of electricity to the energyintensive aluminium industry, global opportunities for the supply of long term energy have changed; in many cases, other countries are now offering more secure long term energy contracts at competitive prices and attracting the next tranche of investment in energy intensive industries, including aluminium. Significant aluminium production growth has been occurring in Southern Africa, the Middle East and China and this is expected to continue, along with growth in Iceland and Russia bauxite: Production (Mt) Extrusion, rolled products, diecasting Downstream metal processing activities include two rolling mills and 12 extrusion plants. The extrusion sector is facing strong competition from imported products from Asian producers. Competitive pressures have seen a rationalisation and a shift to more boutique, niche operators in the extrusions market in response to the market conditions. Imports have grown significantly, removing the opportunity for local producers to grow their output in line with the overall market growth for extruded products; domestic extruders are seeing their market share eroded, while volumes remain relatively flat. 7 Aluminium diecasting activities are often closely linked to the dominant (by volume) end-use market sector which has been the motor vehicle manufacturing sector; there are more than 30 diecasting facilities in Australia using in the order of tonnes of metal, the majority of which is secondary alloy. 8 alumina: Production (Mt) aluminium: Production (Mt)

5 Exports Over 80 per cent of Australian alumina and aluminium production is exported Alumina and aluminium exports in 2005 were estimated at a$8.6 billion, up from a$4.9 billion in 1990 and a$7.4 billion in Bauxite exports were estimated at 5.3 million tonnes and a$117 million in 2005, compared with 6.9 million tonnes and a$173 in Aluminium scrap metal exports amounted to tonnes in 2005, with an approximate value of a$290 million compared with tonnes and a$235 million in Alumina: Export value (A$ millions) Alumina: Export volume (Mt) Employment Employment in the upstream sectors of the aluminium industry is centred on regional areas reflecting the location of the main production facilities of the industry. In 2005, the bauxite/ alumina/aluminium operations employed direct employees (2004: ) and around 5200 contractors (2004: 4300). Aluminium use Australian aluminium consumption was estimated to be almost tonnes in : 376 kt 2001: 385 kt 2002: 396 kt 2003: 433 kt 2004: 422 kt Aluminium: Export value (A$ millions) Aluminium: Export volume (Mt)

6 Land use and rehabilitation Rehabilitation of our bauxite mining areas is a central element of the overall mine development. All bauxite mining areas in Australia are subject to post-mining restoration programs. Bauxite mining continued in three regions in Australia: the Cape York Peninsula in Queensland (Weipa), Arnham Land in the Northern Territory (Gove) and in the Darling Ranges in south-west Western Australia (Boddington-Mt Saddleback, Huntly and Willowdale). The area mined in 2005 was reported as 1520 hectares (2004: 1562 and 2003: 1793) and the area rehabilitated was 842 hectares (2004: 904 and 2003: 858). REHABILITATION Area mined (HA) Area rehabilitated (HA) The area rehabilitated each year varies due to seasonal conditions and operational factors. As mining spreads out from the initial area of activity, increased haul roads and haul distances as well as pit size can require additional areas to remain open before rehabilitation is commenced.

7 Water Water is a key input for the refining of bauxite into alumina it is a water intensive process. In aggregate, Australia s alumina refineries used megalitres of water in 2005 compared with megalitres of water in This usage was equivalent to 3.01 kilolitres per tonne of alumina production (2004: 3.00 and 2003: 3.08). Of this, 60per cent was fresh water in 2005 (compared with 57 per cent in 2004) and 40 per cent was grey/ other water (43 per cent in 2004). The split between fresh and other will continue to fluctuate depending on regional conditions experienced by the areas where refineries are located. ALUMINA: Production (Mt) A LU M I N A: Average water use (kilolitres per tonne) ALUMINA: Total water usage (megalitres) Fresh water Grey water Carbonation delivers residue and greenhouse benefits Bauxite residue is a sustainability issue for alumina producers across the globe. In Western Australia, Alcoa s Technology Delivery Group is successfully using carbon dioxide to reduce the alkalinity of residue, lowering the environmental risks associated with long-term storage and opening the door for future re-use of residue. At the same time, this residue carbonation process delivers a major greenhouse benefit by locking up CO 2 which would otherwise be emitted into the atmosphere. The process works by mixing concentrated CO 2 into the residue. Alcoa has established a residue carbonation plant at its Kwinana refinery in Western Australia and is already carbonating 25 per cent of the refinery s residue output. This will increase to 100 per cent later in 2006, with the installation of a pipeline to bring waste CO 2 from a nearby ammonia plant. When the Kwinana carbonation plant is running at full capacity, it will lock up tonnes of CO 2 a year, the equivalent of taking more than 1 cars off the road. It also significantly reduces the area required for residue drying and storage. In a related project, Alcoa is now working to develop technology for extracting CO 2 from flue gases for use in residue carbonation. The residue carbonation project provides an excellent case study of sustainability in the way it is: n delivering environmental, economic and social benefits n utilising a waste product (CO 2 ) to turn another waste (residue) into a potentially useful resource n using an innovative approach to reduce greenhouse emissions n demonstrating the benefits of scientific and industry partnerships. All alumina refineries produce bauxite residue. A number of companies are undertaking research projects to address this aspect of the production process. The Asia Pacific Partnership has identified bauxite residue management as a key research area for the industry.

8 Greenhouse gas emissions Aluminium smelting The Australian Aluminium Council and all individual aluminium smelters and alumina refineries are members of the Australian Government Greenhouse Challenge Plus program. In 2005, the industry extended the coverage to include bauxite mining activities. In aluminium production, we have experienced a very significant reduction in the absolute level of direct emissions down from 6.25 million tonnes of CO 2 -e in 1990 to 5.01 million tonnes in On a per unit of production basis the reduction shows an even greater improvement from 5.04 tonnes of CO 2 -e per tonne of metal produced down to 2.62 tco 2 -e per tonne of metal. However, these figures for 2005 represent a small increase on the 2004 levels, mainly due to operational requirements associated with plant upgrade work this is expected to lead to a significant reduction in future years. Driving the long-term improvement since 1990 has been the industry management of PFCs (perfluorocarbons), a potent greenhouse gas, within the smelter pot lines. PFCs are emitted from the smelter pots during brief upset conditions, known as anode effects when an imbalance occurs in the production process, due to the level of alumina in the pot falling too low and the electrolytic bath itself begins to undergo electrolysis. This can result in significant variability in smelter PFC emissions year-on-year. A PFC emission reduction of around 74 per cent per tonne of aluminium produced has resulted since Smelter pot technology influences the level of PFCs generated. With the investment in point feed prebake technology replacing older side worked prebake technology, significant reductions in PFC emissions can be achieved via the improved management of the pot bath conditions. During 2005, the Hydro Kurri Kurri smelter invested $37 million to upgrade the last remaining side worked prebake potline in Australia. A significant PFC emissions reduction is expected from this investment during 2006 total Australian smelter PFC emissions could fall by around 30 per cent in Indirect emissions from the purchase of electricity have risen in absolute terms, but at a rate below the increase in production showing an improvement in our overall energy efficiency in the smelting/reduction activity. Production is up by 54 per cent over 1990, indirect electricity emissions up by 40 per cent and indirect emissions per tonne of metal produced down by 9 per cent level Aluminium: Change in emissions from smelting Aluminium: PFC emissions Total emissions Emissions per tonne Production Tonnes CO 2 -e per tonne aluminium

9 Alumina refining With the opening of the Comalco Alumina Refinery in late 2004, Australia now has seven world-class alumina refineries undertaking significant value-adding mineral processing to Australia s bauxite production to produce much sought after metallurgical grade alumina represents the first full year of production for the new refinery and the relevant greenhouse data has been included in this year s survey. Total GHG emissions from the seven Australian alumina refineries were 13.6million tonnes of CO 2 -e in 2005, up 27 per cent from the 1990 total of 10.7 million tonnes, reflecting the 60 per cent increase in production over this period. The 2005 result was almost 20 per cent lower than in 1990 on a tonne per tonne basis (emission intensity) although total industry emissions were 20 per cent higher reflecting the 60 per cent increase in production over this period. To put this into perspective if emission intensity in 2005 was equal to the emission intensity in 1990, total emissions would have been 17.2 million tonnes of CO 2 -e compared with the reported 13.6 million tonnes. Therefore, the actions taken by all Australian alumina refineries, including the addition of new and more efficient capacity, have effectively resulted in avoiding around 3.4 million tonnes of greenhouse gas emissions in Greenhouse gases Global PFC emissions have been reduced from 4.42 tonnes CO 2 -e per tonne of aluminium in 1990 to 1.16 in 2004, a reduction of 74 per cent. The International Aluminium Institute global voluntary objective for PFCs is to achieve a global reduction equivalent to 80 per cent below the 1990 baseline that is, to reduce PFCs down to 0.88 tonnes CO 2 -e per tonne of aluminium by Total PFC emissions from aluminium smelters is estimated to have been reduced from 86.1 million tonnes CO 2 -e in 1990 to 34.7 million tonnes CO 2 equivalents in 2004, a reduction of 60 per cent, even though the total primary production has increased over that same period from 19.5 to 29.9 million tonnes, an increase of 53 per cent. Australia accounted for around 1.4% of global GHG emissions in 2004, the same level as in Projections have Australia s share of global emissions around 1.3% during the period. Alumina: Change in emissions from refining level Total emissions Emissions per tonne Production Aggregated per unit emissions were 0.76 tonnes of CO 2 -e per tonne of alumina in 2005, compared with 0.96 tonnes in Reducing global PFC emissions Tonnes CO 2 equivalent per tonne aluminium % reduction objective (International Aluminium Institute, 2005)

10 DiskArt 1988 DiskArt 1988 Global perspective Aluminium Industries Support Asia-Pacific Partnership Goals to Advance Clean Industrial Development. The Asia Pacific Partnership member economies (Australia, China, India, Japan, Republic of Korea, USA) recognise climate change is a serious long-term issue, requiring sustained action and believe it can be best addressed through: n taking action on climate change in a broad, pro-growth context n pursuing a balanced approach to overcome poverty with policies that promote clean development n sustained economic progress will lead to dramatic environmental improvements. The Asia Pacific Partnership seeks to promote development and deployment of existing and emerging cleaner, more efficient technologies and practices that will achieve practical results and is based on the following core elements: n voluntary, practical measures based on industry engagement and cooperation n removing barriers to cleaner and more efficient technologies n building local capacity n strategies for improving energy security, reducing pollution n creating new investment opportunities n addressing the long-term challenge of climate change. The partnership brings together key developing and developed countries in the region to address the challenges of climate change, energy security and air pollution, in a way that strives to encourage economic development and reduce poverty. The partnership is a significant step forward as it establishes a new path for global agreements to emerge based on clean technology development and deployment which are effective and comprehensive in addressing climate change. The partnership is consistent with efforts under the United Nations Framework Convention on Climate Change and will complement, but not replace, the Kyoto Protocol. The six founding countries released a vision statement for the partnership which states that countries will work together to: n develop, deploy and transfer existing and emerging clean technology n meet our increased energy needs and explore ways to reduce the greenhouse intensity of our economies n build human and institutional capacity to strengthen cooperative efforts n seek ways to engage the private sector. At the first Asia Pacific Partnership Ministerial Meeting in January 2006, the Asia Pacific Partnership member economies identified the aluminium industry as one of eight industry sectors that can make practical, measurable contributions to clean economic development and the reduction of greenhouse gases through the Asia Pacific Partnership on Clean Development. The Australian Aluminium Council welcomed the creation of the Asia Pacific Partnership and, with the strong support of our fellow aluminium associations from the other Partnership member economies, set to work to take the vision for the Partnership forward in respect of the aluminium sector. The aluminium industry associations in the partnership the Aluminium Association, the Aluminium Association of India, the Australian Aluminium Council, the China Nonferrous Metals Industry Association, the Japan Aluminium Association and the Korea Nonferrous Metal Association are committed to harnessing the unique advantages of aluminium to achieve economic and social progress as well as measurable improvement in the quality of the environment in our respective countries.

11 Growth improves greenhouse intensity Aluminium industry representatives attending the first Asia Pacific Partnership Ministerial Meeting in January 2006 announced the development of an Aluminium Industry Memorandum of Understanding (MoU) for voluntary action in the areas of cleaner air, energy conservation, recycled materials and improved industrial efficiencies. The MoU will be signed at an industry meeting in Beijing in May Working with the International Aluminium Institute (IAI), the aluminium industry s goal is to establish an effective, cooperative engagement within the Partnership member economies to enhance its greenhouse performance, in a positive framework addressing the greenhouse footprint of the production process, reducing emissions intensity (as opposed to capping growth) and to seek to further build on the existing industry cooperative arrangements to enhance information sharing and data collection and to realise efficiency, technical and process management improvements across the sector. The Australian aluminium industry shares the view that climate change is one of the highest priority sustainability issues for the industry globally as well as here in Australia. The industry has shown the way through its commitment to and achievement of significant reductions in our direct greenhouse gas emissions. The Australian aluminium industry s record in delivering reductions in emissions via technology, innovation and investment has been demonstrated under the voluntary Australian Greenhouse Challenge Plus program. At Alcoa s Pinjarra alumina refinery, an efficiency upgrade and two new cogeneration power plants will combine to deliver an 8 per cent reduction in the refinery s greenhouse intensity. The cogeneration power plants will supply power to the Western Australian electricity grid and steam to the refinery, delivering a double greenhouse benefit by re-using heat that would otherwise be wasted and allowing some of the refinery s older boilers to be shut down. The cogeneration plants are a partnership between Alcoa and the Alinta Limited energy company. The first 140mw unit is now operating while the second plant is under construction. In addition, the Pinjarra upgrade will improve the refinery s greenhouse intensity through: n a new seed filtration plant which will increase alumina yield n re-use of steam from digestion to heat the residue washing circuit n upgrading of heat exchange systems. Pinjarra s greenhouse improvements build upon Alcoa s global leadership in reducing greenhouse emissions. In Australia, Alcoa has reduced its smelting operations on-site greenhouse intensity by 55 per cent compared to 1990 levels and the refineries greenhouse intensity by 20 per cent. Expansion of the aluminium industry is creating opportunities for major improvements in energy efficiency and greenhouse intensity. Photograph: Howard Moffat, AUSPIC

12 SPL Spent pot lining All aluminium smelters generate SPL. When a reduction cell or pot has reached the end of its useful life, normally after about 6 7 years, it is rebuilt with a new carbon lining (the cathode). At this time it is necessary to dispose of the old (spent) lining, consisting of old refractory bricks and carbon plus a number of compounds including fluoride, absorbed from the molten cryolite material in the pot, and a very low level of cyanide, formed over many years of pot operation. As a result of these two contaminants, SPL is generally considered to be a hazardous waste. In 2005, Australian smelters generated tonnes of SPL material. Disposal techniques vary around the globe according to local conditions, environment laws and operating licenses. On a world-wide basis, the aluminium industry has continuing to research methods and processes to re-use or treat SPL material prior to disposal or landfill and a number of solutions are now available, with continuing work being undertaken to identify synergies with potential consumers for the increased utilisation of the various products available from the SPL by-product streams. SPL material is often stored by a smelter in above ground facilities under secure, dry conditions to await recycling or final disposal including extracting and recycling some of its useful components and using the material as a combustion source for power generation, or as raw materials in other industrial processes (e.g. cement, steel). A number of Australian smelters have implemented strategies for the recycling and disposal of SPL material and these were covered in detail in our 2004 report. Products from SPL can include the following, with the specific products determined by the recovery process employed: n aluminium fluoride, which can be returned to the aluminium smelting process n synthetic sand, used as an alternative to natural material n Bayer-grade caustic (BGC), which is returned to the alumina refining process reducing the demand for new caustic soda n carbon-refractory material (combined or separate, suitable for cement production) n kiln grade spar (suitable for road base). Under the provisions of the Hazardous Waste (Regulation of Exports and Imports) Act 1989, Tomago Aluminium has exported tonnes of SPL to Italy since 1998 for reprocessing by a specialist Italian recycling company for use in mini mill steel production.

13 11 Fluoride emissions Fluoride is part of the aluminium smelting process: alumina (aluminium oxide) is dissolved in a molten bath of cryolite (sodium aluminium fluoride) to facilitate the electrolysis process. Fluoride emissions (as gases and particulates) remain of high environmental concern for the aluminium smelting sector. For many decades fluoride emissions were considered to be the single most important pollutant from aluminium smelters. Depending on the local conditions, fluorides could have a serious environmental impact on the local flora and fauna. Fluorides accumulate in vegetation and can cause damage to coniferous trees. They also accumulate in the teeth and bones of ruminants eating fluoride-contaminated forage. Operations with modern control systems to remove and recycle the fluorides do not generate local concerns. Optimum fume collection from the electrolytic cells, coupled with specific workplace-related training of employees has led to further improvement. The IAI global Voluntary Objective for fluoride emissions: A minimum 33 per cent reduction in fluoride emissions for the Industry as a whole per tonne of aluminium produced by 2010 versus The IAI data from reporting companies show that fluoride emissions are now equivalent to 0.88kg per tonne of aluminium in 2004 a 64 per cent reduction over the 2.4kg per tonne of aluminium produced in Australian smelter fluoride emissions have fallen to 0.7kg per tonne of aluminium produced in 2005 (total fluoride emissions of 1326 tonnes, down from 1480 tonnes in 2003 and 1395 tonnes in 2004). Aluminium smelter production (Mt) Total fluoride emissions (tonnes) Fluoride emissions per tonne of metal produced (kg) Fluoride reductions Alcoa s Point Henry smelter has reduced air emissions of fluoride from kg in to kg in through improvements in emission management systems, monitoring technology and operating practices. This was achieved through: n wide-ranging employee involvement in reviewing emission sources n installation of laser-based monitoring systems to provide real-time information on emission levels, allowing operating practices and equipment to be adjusted promptly if levels rise n upgraded maintenance on fume collection and scrubbing systems to improve efficiency n employee awareness campaigns.

14 Energy Australian aluminium industry a major energy consumer Adding value to our energy and bauxite-alumina resources. Energy is critical input for aluminium with around 22 per cent of operating costs (30 per cent when petroleum coke and carbon are included; 36 per cent with the energy embedded in the alumina) n dominated by electricity inputs n with aluminium smelters providing valuable continuous base load demand to the Australian electricity grid. Alumina production also requires a significant energy input (over 20 per cent of costs), but this is mainly gas (growing share) and petroleum products/ coal (declining share). The export of aluminium is an energy-enriched product, with the energy embedded in the metal available for recycling along with the metal. Aluminium: Production (Mt) Aluminium: Total electricity consumption (GWh) Energy efficiency With high energy intensity and energy costs around 30 per cent of smelter operating costs, the industry places energy consumption as a key indicator in their regular performance monitoring. 12 Australia has one of the lowest energy intensity aluminium industries in the world; however, state-of-the-art operations recently built overseas are likely to have a lower energy intensity. All alumina refineries and aluminium smelters will be covered by the energy efficiency opportunity assessments established by the Australian Government Energy White Paper. AAC member companies are participating in the pilot phase of the scheme. Energy consumption is large, but energy intensity is falling. Australia alumina producers have achieved an improvement of around 10 per cent reduction in energy intensity per unit of output since 1990 with the industry continuing to seek cost-effective improvements. Alumina, the perfect co-generation partner n few, if any industries fit better than alumina for co-generation, particularly in an Australian climate n 365 days of 24/7 constant heat demand n significant fuel switching has now occurred and/or is occurring within the Australian alumina sector to gas from other fuel sources. Gas-fired co-generation facilities at an alumina refinery achieves an energy efficiency of around 80 per cent.

15 13 Recycling Aluminium can be recycled over and over again without loss of properties. The high value of aluminium scrap is a key incentive and major economic impetus for recycling. Aluminium recycling benefits present and future generations by conserving energy and other natural resources. It saves up to 95 per cent of the energy required for primary aluminium production, thereby avoiding corresponding emissions, including greenhouse gases. Global aluminium recycling rates are high, approximately 90 per cent for transport and construction applications and about 60 per cent for beverage cans. Although recycling of flexible packaging presents a challenge, the unique barrier properties of aluminium foil are considered vital to the preservation of products (e.g. foodstuffs and medicines). At the global level, one-third of all aluminium metal entering the market is from recycled material. In 2004, recycled material accounted for around 15 million tonnes (IAI estimates). This comprises 7.7 million tonnes returned from customers after fabrication processes and 7.4 million tonnes of product returned from end-of-use (for example, aluminium content of used motor vehicles and used beverage cans). Australia s recycling rate for used beverage cans are estimated to be around 63 per cent. Around tonnes of scrap in 2004 is estimated to have been received back from used products and production scrap from fabrication and manufacturing activities. ABS figures show exports of aluminium scrap at tonnes in 2005, with China as the dominant export destination. This figure is likely to be under the total exports of aluminium scrap with additional material included in non-specific/unsorted categories. Around tonnes of scrap was reprocessed in Australia with metal recovery estimated to be around 81 per cent (73000 tonnes of recovered metal) Dross from Australian smelters is also reprocessed and this amounted to around in Dross recovery rates are significantly lower than for other recycling with 50 per cent recovery as the typical level. Global aluminium flow 2004 Values in millions of metric tonnes. 1 Skimmings, scalpings, sawings. 2 Not taken into account in statistics. 3 Such as powder, paste and deoxidation aluminium. 4 Area of current research to identify final aluminium destination (reuse, recycling or landfill). Source: International Aluminium Institute (IAI). Alumina 57.3 Primary aluminium 30.2 Recycled aluminium 31.6 Ingots 61.8 New scrap Internal scrap Fabricated and manufactured products 60.5 New scrap 7.7 Finished products 36.3 Lost to application Old scrap 7.4 Total products stored in use since 1888: Net addition 2004: 21.5 Metal losses 1.4 Landfill 3.4 Under investigation 4 3.3

16 Case study A growing partnership at the Alcan Gove Alumina Refinery, Northern The $2 billion Alcan Gove Third Stage Expansion the G3 project will increase production capacity from 2 million tonnes per annum to 3.8 million tonnes per annum by 2007, enabling Alcan to meet increasing worldwide alumina demand, and further strengthen its position in the global alumina industry. As one of the biggest investments in the history of Australia s Northern Territory, the project is producing a wide range of sustainable social, economic and environmental benefits for the local community and the Northern Territory. Alcan s sustainability barometers community, environment, health and safety With sustainability as a priority, Alcan developed a construction strategy using pre-assembled modules (PAMs) weighing up to 1800 tonnes each to ensure minimal impact on the environment and the remote township of Nhulunbuy. A total of 600 PAMs will be fabricated and fitted-out in off-site locations in Australia and Asia and shipped to Gove ready for installation as complete modules. With this strategy the construction workforce required to relocate to Nhulunbuy peaked at Traditional construction methods would have required more than double this workforce, stretching resources and accommodation beyond capacity, and adversely affecting community life. Once the new infrastructure is commissioned, the expanded Alcan Gove refinery will deliver important environmental benefits across the whole facility including: n a 10 per cent improvement in recovery of alumina from bauxite and a 25 per cent reduction in residue produced due to the enhanced Alcan digestion process n a 75 per cent reduction in soluble caustic waste per tonne of alumina due to the new liquor purification process n a 25 per cent reduction in caustic consumption n a reduction in dust emissions n improved energy efficiency. 14

17 15 Territory Enhanced employment and training In response to a national skill shortage, Alcan has established a welding school designed to enhance its G3 workforce and has plans make it a permanent and fully accredited course in the future, which will be made available to Gove employees and the wider community. Alcan has also partnered with Indigenous not-forprofit organisation, the Yothu Yindi Foundation, to deliver a Cross-Cultural Awareness Program as part of its induction process for the construction workforce. In an industry-first nine Indigenous presenters are delivering the training while learning valuable facilitation skills and setting the benchmark for cross-cultural training across the resources industry. The Cross-Cultural Awareness Program is also set to benefit future generations of Australians as the money generated from the program will help fund a National Indigenous Recording Project documenting ancient dances and traditional practices so they do not become lost to time. Economic benefits and sustainable business With the completion of G3, the Gove refinery will deliver a range of enhanced sustainable economic benefits including: n increased annual exports from $560 million to more than $1 billion n ongoing royalty payments to traditional landowners n a secure long-term future of Nhulunbuy as a regional service centre n increasing the current Alcan and contract employee workforce of 1100 by an additional 120 n in excess of $130 million per annum in employment and related payments n ongoing expenditure in the Northern Territory of around $150 million per annum n new and additional opportunities for local Indigenous people n enhanced energy infrastructure and supply for Nhulunbuy regional communities n enhanced transport infrastructure and increased port/shipping facilities. From the outset Alcan s G3 Project has been committed to working with the Northern Territory Government and business community to maximise the involvement of local suppliers. The G3 project has had a significant impact on the Northern Territory construction industry, invigorating its fabrication and assembly industry. G3 has inspired a range of sustainable enterprises and partnerships with local Indigenous people designed to deliver long-term employment opportunities and economic prosperity to the community. For Alcan, a commitment to sustainability means doing things the right way and leaving a positive legacy for the future. It aims for the G3 project to be an example of this philosophy in action and leave a positive and sustainable legacy for the Northern Territory and future generations.

18 Synopsis Australian alumina and aluminium industry production and greenhouse data. Alumina 2005 Variation on 1990 Australian alumina production 17.9 Mt + 60% Share of world production 30% Alumina exports tonnage (1990 = 8.7 Mt) 14.3 Mt + 64% Alumina exports value (1990 = $2,940 million) $4,600 million + 55% Total alumina GHG emissions 13.6 Mt CO 2-e + 27% Per unit GHG emissions (1990 = 0.95) (tonne of production) 0.76 tonnes CO 2-e 20% Aluminium 2005 Variation on 1990 Australian aluminium production 1.9 Mt + 54% Share of world aluminium production 6.1% Aluminium exports tonnage (1990 = Mt) 1.6 Mt + 70% Aluminium exports value (1990 = $1,990 million) $4,000 million + 100% Total aluminium GHG emissions (1990 = 26.3 Mt) 33.1 Mt CO 2-e + 26% Total Direct GHG emissions (1990 = 6.25 Mt) (within smelters) 5.0 Mt CO 2-e 20% Per unit Direct GHG emissions (1990 = 5.0 t) (per tonne of production) 2.6 tonnes CO 2-e 48% PFC emissions (1990 = 3.96 Mt) (included in smelter direct emissions above) 1.6 Mt CO 2-e 60% Per unit PFC emissions (1990 = 3.2 t) (per tonne of production) 0.8 tonnes CO 2-e 74% Total Indirect GHG emissions (1990 = 20.0 Mt) (from electricity consumption) 28.1 Mt CO 2-e + 40% Per unit Indirect GHG emissions (1990 = 16.1 t) (per tonne of production) 14.7 tonnes CO 2-e 9% 16

19 17 The Australian Industry Bauxite mines Darwin Gove Weipa Alumina refineries Aluminium smelters Extrusion operation Rolling mill NT QLD Gladstone WA SA Brisbane Perth NSW Newcastle Kwinana Pinjarra Wagerup Worsley Boddington Huntly Willowdale Adelaide ACT VIC Melbourne Sydney The Australian alumina and aluminium industries: Portland Geelong n a major investor in Australia over 50 years Bell Bay n an important part of Australia s industrial base TAS n one of Australia s major exports, with annual export earnings over A$8.7 billion n a capital replacement value over A$30 billion n employs around 18,000 people mostly regional. Future for the Australian industry n The growing global markets for aluminium are supplied by both primary and recycled metal sources. Increasing demand for aluminium and the long lifetime of many products mean that, for the foreseeable future, the overall volume of primary metal produced from bauxite/alumina will continue to be substantially greater than the volume of available from recycled metal. n The aluminium industry has a global structure and aluminium smelters are long life high cost assets. n With a global market focus Australia exports over 80 per cent of production international competitiveness is paramount. n Aluminium growth requires long-term competitive energy: without it, existing operations are starved of capital for upgrading and prematurely phased-out; and, greenfields developments do not occur. n Australia must compete with other locations for new smelter capacity/investments. Existing Australian capacity must also perform to guarantee plant renewal funds. n Australian alumina (and bauxite) growth is expected to match the rate of global growth in primary aluminium metal. Industry images in this publication courtesy of Alcan Gove, Alcoa of Australia, Comalco Ltd and Worsley Alumina.

20 Australian Aluminium Council ACN Level 1, Dickson Square Building Dickson Place Dickson ACT 2602 Telephone Facsimile web