Living large

Written by By Abbe Miller

September 2006- Start with bauxite, a deeply weathered sedimentary rock. Grind it, add lime and caustic soda and bring to a bubbling 250 degrees Celsius. Allow the alumina to separate from the silica, iron oxides and titanium dioxide. Next, take the resulting aluminum oxide and place it into a pot--a carbon-lined cell to be precise. Dissolve with cryolite and jolt the mixture with 150,000 amps. Known as electrolytic reduction or smelting, the melting point is achieved at 950 degrees Celsius, and voila, we have aluminum--one of the world's most plentiful but most difficult metals to refine.

Regardless, Rusal Ltd., Moscow, produced 1,373,390 metric tons of it during the first half of 2006. The company is responsible for 8.5 percent of the planet's overall aluminum production and is the largest offshore producer of the primary material to the United States. Instead of outsourcing its alumina or bauxite to keep up with those demands, Rusal produces both. It has operations literally from the ground up.

"Rusal believes in looking at the raw material in the ground, the bauxite, straight through to its smelting operations and then all of the adjunct pieces that fit together in that model," says Bruce Markowitz, president of Rusal America. "We look at the economic feasibility of the operations themselves and then have them fit into the jigsaw puzzle of our existing systems."

Rusal's aluminum division is centralized in Siberia, but its reach is vast. It has four smelters in Bratsk, Krasnoyarsk, Novokuznetsk and Sayanogorsk. Its alumina division is a bit more spread out. It's composed of six refineries: Achinsk, Boksitogorsk, Nikolayev, Compagnie des Bauxites de Kindia, Alumina Co. of Guinea, Aroiama Mining Co. of Guyana and Queensland Alumina Ltd. They can be found from Australia to West Africa and all the way back up to Russia. In addition to the facilities that aid in producing the primary material, Rusal possesses production capacity for alloys, aluminum foil and foil-based packaging, and aluminum beverage cans.

With operations in 13 countries and nine regions in Russia, the six-year-old company has already established a worldwide presence. "I think that for a company as young as Rusal, the amount that has been accomplished in the past few years is tremendous," says Markowitz. "Overall we have a good feel for our global positions and global assets and the respect to know how to feed them and to know how to keep them going at competitive levels." The company's strategically planned acquisitions prove that.

Rusal worked toward the privatization of Guyana's Aroaima Mining Co. and the Alumina Co. of Guinea/Figuia and it also purchased 20 percent of QAL, the world's largest alumina refinery, from the Kaiser estate. Future endeavors include, but aren't limited to, exploratory drilling in Guyana, smelting in Nigeria and the Komi Aluminum project, expected to be the industry's largest to date. The scope is comprehensive and lends to the company's self-sufficiency.

"We are looking all over the world to see which potential acquisitions make sense," says Markowitz. "They have to be available for sale, they have to be at a reasonable price and come with the possibility of power supply."

Power dictates location
The amount of electricity required to convert alumina into aluminum is substantial--fueling a smelting operation eats up 20 percent to 40 percent of total production costs. According to the Worldwatch Institute, a U.S. household could be powered for a year and a half with the electricity needed to smelt one ton of aluminum. Therefore, the location of a smelter is gauged by the location of coal-fired and hydroelectric power plants. In Rusal's case, it's taking advantage of the several hydroelectric power plants pre-developed by the Russian government, some of which were left unfinished during the Soviet era. So Rusal is working alongside RAO UES, a major Russian power-supply company, to bring them online.

"What's interesting about these stations in Russia is that everything is constantly being upgraded," says Markowitz. "Once the dams are up and producing the hydroelectric power, the construction of new smelters can begin simultaneously or very close thereafter."

In addition to rehabilitation projects, Rusal has entered into an equal partnership agreement with RAO in order to develop a greenfield smelting operation in Boguchanskaya, Russia. The project will include a new hydroelectric power station and 600,000-ton-capacity smelter. The company plans on investing $6 billion throughout the undertaking, along with the support of the Investment Fund of the Russian Federation.

Markowitz understands the importance of looking at the economics when proposing expansion. "The two-and-two-is-four calculation has to be good both today and over the long term," he says. "So in Russia, there's ample hydroelectric power available for expansion and multiple hydroelectric power projects under consideration, which would provide competitive power supply on a long-term base. In North America, particularly in the United States where the power prices have been rising, smelting is economically difficult."

He says that the energy required is a major concern for all involved in the production of aluminum, "especially in today's world of higher-than-traditional energy prices in oil and gas."

It's not easy being green
Another major concern shared by both aluminum producers and the worldwide community is global warming. The energy-taxing process of smelting creates waste in the form of air emissions potentially harmful to the environment. The pots or electrolysis cells are responsible for the majority of pollutants, releasing greenhouse gases into the atmosphere. In order to combat the number of harmful emissions, Rusal is employing new smelting technology.

"It's automation of the alumina feeding systems, installation of all new gas-treatment equipment, conversion of the production to dry-anode technology and increasing the amperage in all of the potrooms," says Markowitz.

As with the hydroelectric upgrades, modernization of its existing smelting facilities is required to achieve cleaner material production. The company's smelter at Krasnoyarsk is a prime example of the extensive measures that Rusal takes to limit pollution. Upon completion of the Krasnoyarsk project, the company will have spent $300 million.

Recently, a third process line for dry anode paste production was announced at Krasnoyarsk. The line will supply the potrooms with the dry anode paste, which figures in as an innovative solution for the common, yet pollutive Soderberg smelting technology long since employed at the facility. In line with the undertaking, the company's engineering and technology center developed newer and more efficient electrolysis cells. These implementations will greatly reduce the generation of perflourocarbons that are harmful to the ozone layer. The entire project is slated for completion by the end of 2007.

The technology introduced to create the new RAS-400 electrolysis cells represents a trend in conservation. "It's simply an improvement of the efficiencies of using less power to produce more metals," explains Markowitz. "Basically the parallel is along the lines of more energy-efficient light bulbs that produce the same amount of light but last for longer periods and have a better efficiency to power usage."

Considering the size of Rusal's smelting operations, the projects are a work in progress. "Krasnoyarsk and Bratsk are the two largest smelters in the world, in the ballpark of 900,000 metric tons and 1 million metric tons respectively, so the process of changing over the equipment in the potrooms or the anode equipment takes a lot of time," says Markowitz. "Most smelters aren't quite that size so it would be a shorter period for them to change over and not disturb the day-to-day smelting operation."

To date, eight of Rusal's plants have received the ISO 14001 certification in ecological management. And with an intense focus and genuine concern, the whole of Rusal's facilities will soon exemplify industrial excellence while preserving the environment. "We put a lot of equipment into the plant, and our objective is to bring it to world standards and even surpass those at some point in time as the technology improves," Markowitz explains.

Clear waters ahead
The efforts that Rusal exerts travel upstream. They flow past the power production, past the ecological technology and past the primary aluminum. By working closely with its customers, the company realizes the importance of evaluated processes. Rusal offers billets, rolling slabs and alloys.

"We can add value while the metal is still in a molten form, which makes it easier to pour in the different customized chemical compositions for the end user," says Markowitz. "As we increase and improve that production level and that technology, our percentage of value-added products will continue to increase."

Rusal can also extend savings to customers by eliminating the need to ship the primary material out for value-added services. Rusal knows just as well as its customers what a gallon of gas can cost.

Equipment and equipment upgrades are changing the faces of Rusal's facilities. At Sayonogorsk, the company installed billet casting equipment, which has been shipping out to customers around the world. At Krasnoyarsk, alloy technology is the focus. The facility is now equipped with special filtration systems and casting and cutting equipment to answer the high-quality requirements of end users.

"We work with [the customers'] engineering departments and their marketing departments to understand exactly what they need and then we convert that information into a document of customer specification," says Markowitz. "And then we tell them what we can meet today, what we're willing to invest to meet the requirements in a certain amount of time or in the future, and then we work together to qualify it and improve it. The communication is two-way and it's working very well."

Rusal's capacity and customer base is constantly growing. Undoubtedly, its success in the United States, in Russia and around the globe is due to the extensive and comprehensive strategies that the company adheres to.

"We're on a steady path to continue to develop the existing assets and to acquire more assets both in the raw material side and the smelting side in order to competitively and economically meet our goal to be No. 1," says Markowitz. "The combination of projects and pieces that we're working on, when you total them up, puts us very close to where we'd like to be. If you look at them from a global perspective and from a technological perspective, we're up there with the best in the world." MM

By Abbe Miller, from the September 2006 issue of Modern Metals.



























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