(1)

Recycling

A pure bonus

Roland Scharf-BergmannHead of Recycling

• Recycling

• Market Outlook

• Recycling in Hydro

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2

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• Recycling

• Market Outlook

• Recycling in Hydro

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2

3

Recycling – a pure bonus

(4)

75%still in use

5%of initial energy

to recycle

Utilizing aluminium as an energy bank

Aluminium recycling, a viable business

High rates of recycling

• 95% Transport

• 95% Buildings

• 55% Packaging (64% Cans)

Long lifetime for aluminium in use

• 15-20 years for vehicles

• 40-50 years for buildings

(5)

RECYCLING GLOSSARY

Pre-consumer scrapprocess scrap generated before the product‘s use phase

Post-consumer scrapproduct scrap from used products at end of product life

Primary aluminiumaluminium generated from bauxite ore, via alumina refining and electrolysis

Recycled aluminiumaluminium generated from scrap sources

Remelterrecycling plant producing extrusion and rolling ingot

Refinerrecycling plant producing foundry alloys

3 types of scrap are created in the regional aluminium flow

(6)

BauxiteAl₂O₃

Primary production

Primary shapes

(EI,SI,PFA,WR,IN)

Trade

Remelt shapes

(EI,SI,SFA)

Casthouse

shapes

Semis

ShipmentsFinal

products

Casthouse shapes

Trade (primary and remelt)

Semis

trade

Final product

trade

End-of-life product

trade

End-of-life

products

Unable to collect

Clean

process

scrapPCS

Melt loss

Fabrication

scrap

Clean

process

scrap

Total consumed

products in use

Post-consumed (PCS), fabrication scrap and clean process scrap (CPS)

Various scrap sorting techniques & technologies

(7)

Shredding

• Cutting scrap in

pieces without

separating various

metals

• Taking out some easy

parts before

shredding e.g.

Wheels and engines

from cars is usual

• The shredded metal

can then go on to be

sold as shredded

scrap or be treated by

sorting techniques to

increase its value

Magnetic &

Eddy current

• Magnets separating

ferrous and non-

ferrous metal scrap

• Heavy metals like

steel and iron is

sorted out

• Used extensively for

Secondary production

• Eddy Current: Rotor

with magnets to throw

scrap at different

distances in relation

to their eddy current

• Utilizing the different

conductivities of

various metals

Steel, Fe

Air seperation

• Using air to separate

scrap streams

• Also called

windsifting, air-knives,

elutriation, winnowing

and air columns

• Conveyor belt system

with air flows pushing

away light weight

materials like e.g.

plastics

• This technique could

result in loss of light

and small aluminium

scrap such as UBC

scrap

Plastics, foam

Sink float

• Separates scrap in

various baths with

various specific

gravities

• Possible to sort based

on the various metal’s

density, but also

based on alloy (Scrap

will sink or float based

on density)

• Separating heavy and

light materials from

the wrought and

casting aluminium

scrap

Mg, Cu, Zn, Pb

Hot crush

• Thermal-mechanical

separation method

• Successfully

separates wrought

and casting alloys by

looking at the eutectic

temp. as castings has

a lower melting temp

(because of higher Si

content)

• First warm, then

crush to separate

whether the metal

breaks or not

• 96% effective in

separating the scrap

Wrought vs Casting

Color sorting

• Hand sorting based

on different colors of

metals. Can also sort

wrought vs. casting

alloys

• Only possible with

low labor costs. 99%

accuracy estimated

for China

• Can also be done by

a computer, can sort

by alloy when using

etching chemicals

making alloys stand

out in color

• Environmental and

economic barrier

Metals & alloys

Spectroscopy

• X-ray, neutron flux or

pulse laser detectors

scan the metal (must

be free of lubricants,

paint and coating)

• The metal returns

various emissions when

hit by the detector

source. The differing

emissions are read and

forms the basis for the

scrap sorting

• The system can then

direct the piece of scrap

to an appropriate bin

using a mechanical arm

or air flow

• Recently possible at

high speeds

Metals & alloys

Source: Improving aluminum recycling: A survey of sorting and impurity removal technologies (Gabrielle Gaustad et. Al.)

• Recycling

• Market

• Recycling in Hydro

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Europe is the world leader in recycling

• 10,5 million mt recycling production in 2014.

• An increase of 6,1% from the year before,

• Primary production in Europe fell by 3,0%

There are more than 220 plants in 24 countries in Europe

29%

15%

9%7%

11%

7%

7%

7%

5%3%

Germany Italy France

UK Eastern Europe Austria/Switzerland

Scandinavia BeNeLux Spain/Portugal

Other Countries

Source: EEA

89% of scrap is used in Europe (EU27+EFTA)

Scrap consumption in Europe

European scrap exports

11% of the scrap generated in Europe in 2014 was exported

19%

17%

53%

11%

Use of scrap

Pre consumer casting alloys Post consumed casting alloys

Pre consumer wrought alloys Post consumed wrought alloys

~7 million mt

Source: EAA

Advanced modelling reveals long term supply growth

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0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

2010 2015 2020 2025 2030

Alu

min

ium

in m

illio

n t

onnes

Old Scrap Collected (Europe)

Rolling Extrusion Casting

Available post-consumed scrap expected to increase.

(13)

2

22

20

34

30

4

28

36

26

24

38

10

32

8

18

0

14

12

16

6

Other Asia

North America

Europe

+5%

Other

+5%

20252005 20202010 201520001990 2030

South America

+5%

+5%Middle East

Japan

China

Other

Producing

Countries

1995

Region 10-15 15-20 20-25 25-30

Other

(Residual)7 % 6 % 5 % 4 %

Other Producing

Countries-1 % 2 % 2 % 2 %

Other Asia 6 % 7 % 7 % 7 %

North America 3 % 2 % 1 % 3 %

Middle East 8 % 8 % 6 % 6 %

South America 6 % 5 % 4 % 4 %

Japan 2 % 1 % 2 % 2 %

Europe 4 % 3 % 2 % 2 %

China 12 % 11 % 10 % 8 %

CAGR:GARC: Global old scrap to scrap market (Before trade and remelt loss)

Source: IAI

Figures in million tonnes (mio.t)

China as main source of old scrap generation growth

Current scrap trade levels not sustainable due to shrinking Chinese imports

(14)

3 000

1 000

1 500

500

2 000

0

2 500

2005

2011

-5%

USA

2008

2007

2013

2009

Hong Kong

Malaysia

2004

2001

2003

Others

2002

2010

Australia

2012

+26%

2006

2014

Source: UN COMTRADE: 7602 Aluminium waste and scrap

China scrap importFigures in kt

US scrap exportFigures in kt

1 000

2 000

0

2 500

1 500

500

3 000

-2%

2004

2013

Korea

2011

Others

2010

2009

China

Canada

2012

2007

2003

2002

2001

Mexico

2014

+17%

2006

2008

2005

Declining US exports as an effect of this

€ 700

€ 900

€ 1,100

€ 1,300

€ 1,500

€ 1,700

€ 1,900

€ 2,100

€ 2,300

€ 2,500

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN Feb Mar Apr

2013 2014 2015

LME in € DIN 226 LME + billet premium LME + ingot premium postconsumed profiles (ACL + WAZ) High grade FA

Scrap and alloy prices principally follow LME

(15)

Price development in € 2013 - April 2015

Time-lags for scrap may cause imbalances

• Recycling

• Market (UBC)

• Recycling in Hydro

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UBC scrap market in Europe

(17)

Kerbside collection

Deposit based

Bring system

Residual Waste Sorting

280 kmt of UBC are collected in Europe from a variety

of collection systems based on EAA figures.

Volumes from different collection systems

(18)

Hydro

UBC

processing

line

Deposit

based system

Residual Waste

Sorting

(RWS)

Kerbside

collection

separated

Bring system

Waste treatment

plantSorting facility Sorting facility

Non-ferrous

metal

concentrateExport

DowngradingMetal

treatment plant

Competitors

77 kmt (28%)44 kmt (15%) 96 kmt (35%)

60 kmt (22%)

Estimated annual volume based on EAA data

Annual volumes:

Cleanliness of scrap

Added value from sorting

More than 80% of European UBC come from return systems

with elevated levels of mix up and contamination.

• Recycling

• Market Outlook

• Recycling in Hydro

1

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The industry’s most ambitious climate strategy: Carbon-neutral by 2020

(20)

Reduce emissions,

increase efficiency

Maximize user-

phase benefits

Increase recycling,

back to the loop

Energy and

primary production

Aluminium in use

‘End-of-life’

Supported by the three pillars of Hydro’s technology strategy

Hydro’s recycling facilities

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Deeside, UK • 2014 production: 51,000 tonnes

Azuqueca, Spain • 2014 production: 75,000 tonnes

Texas and Kentucky, USA • Commerce, 2014 production: 104,000 tonnes

• Henderson, 2014 production: 79,000 tonnes

Neuss (Alunorf), Germany• 2014 production: 347, 000 tonnes

Rackwitz, Germany • 2014 production: 87,000 tonnes

Hamburg, Germany• 2014 production: 104,000 tonnes

Neuss (Rheinwerk), Germany• 2014 production: 87,000 tonnes

Lucé, France• 2014 production: 52,000 tonnes

Clervaux, Luxembourg • 2014 production: 90,000 tonnes

WMR, Dormagen, Germany • 2014 production: 30,000 tonnes

Holmestrand, Norway• 2014 production: 47,000 tonnes

Karmøy, Norway• 2014 production, 23,000 tonnes

Cisterna di Latina, Italy• 2014 production: 44,000 tonnes

Technology

Hydro has developed leading scrap capabilities the last years

Scrap processing:

Shredding, magn.

& EC separation,

X-ray sorting

Continuous

delacquering

& hot transfer

Furnace concept:

Cont. feeding,

submerged melting,

electromagn. stirring

Tools

Scrap portalSystem optimization

long term

Charge optimization

on batch level

Scrap Receival & SamplingBest practices for receival and sampling, supplier evaluation, chemistry and recovery database

Material Flow AnalysisScrap availability modelling based on dynamic stock analyses and growth scenarios

Hydro in-house developed tools are

differentiating elements

Leading competence

in furnace operation

Significant scrap processing competence

built last years

Hydro leading in state-of-the-art scrap

flow model development

Best practice sharing across plants on

scrap receival and sampling

Key elements in scrap procurement and handling

Our Recycling Strategy – in short

(23)

Strategic Objectives• Better (improved margins)

• Bigger (increased capacity utilization)

• Greener (Recycling/RFA)

Establish cooperation models for scrap sourcing and processing, possibly with asset ownership

Enablers• Access to processing capacity for post

consumed and difficult scrap

• Increased sales of Recycling Friendly

Alloys (RFA)

Build on leading remelt capability to expand use of post consumed and lower priced scrap

Alt 4: Hydro investing in own

processing capabilitiesrecyclersource processor

(by recycler)collector extruder

Increased

used of post

consumed

scrap

Mixed End of Life

scrap

eddy current separator

fines

plastics,

minerals

ferrous metals

shredder

screen

(size split approx 40mm)

magnetic separator

heavy metals

cast alloysx-ray sorter

eddy current separatorplastics,

organics

bunker

decoating kiln

melting furnace

sieve fines

casting furnace

DC casting

billet / sheet ingot

Flow-sheet post-consumed scrap recycling

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Strengthening of recycling position through UBC* recycling line

Establishing strong recycling position

• Fulfilling customer needs and strengthening beverage

can market position

• € 45 million investment

• Start of production end 2015

• Contribution towards 2020 carbon neutrality target

* UBC: Used beverage can

(26)

UBC shredder unit

Overview

Shredding the cans for optimal sorting

• contamination such as "plastic widgets" in special

beer cans must be exposed by the shredding

(Guinness / bitter beer)

Shredding the cans for optimal delacquering

• both sides of the aluminium can (inside / outside)

must be open

• target grain size: 50mm

Technical challenge

• scrap composition

• shape and density of scrap bales and packages

Bale braker and hammer mill

(27)

Sorting line, furnace and delaquering

(28)

Acquisition of WMR Recycling GmbH

Two-stage scrap processing

Step 1:

• Scrap shear

• Hammer mill

• Magnetic & eddie-current-sorting, sieving

• Particle size 150 – 250 mm

Step 2:

• 2 parallel cutting mills

• X-ray transmission sorting

• eddie-current-sorting, sieving

• Particle size 30 – 80 mm

Throughput (extrusion & sheet scrap)

• 12 t/h input

• Particle weight 15 – 40 g

• Sorting of 1,000 particles per second

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Superior patented shredding & sorting technology

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