ALUMINUM, COAL ASH, AND MSRS
VIDEO PREDICTING THE END OF THE ALUMINUM WAR CHINA HAS WAGED FOR NEARLY A DECADE.
At the very end of 2014, American aluminum manufacturers have finally seen the end of a nearly decade long glut of aluminum in the market place. This glut was largely caused by the government of China directing its aluminum companies to keep producing aluminum even while they were losing money. The government of China drove the cost of aluminum so low that many aluminum companies went out of business. Whether this was China’s objective or not, the government of China can absorb such large losses, and it stands to gain mightily after the end of the aluminum glut because of reduced competition in the marketplace.
Auto manufacturers use more aluminum in their vehicles when it is cost effective to do so. Aluminum allows auto manufacturers to produce lighter and stronger vehicles that get much better fuel mileage without having to sacrifice the standards of safety, convenience, and luxury that Americans have come to expect.
Just as the aluminum glut is officially considered to be over by industry experts, as of January of 2015, the EPA (Environmental Protection Agency) is poised to inflict even more pain on our domestic aluminum industry. A major component of aluminum production is electricity, and the EPA’s new emission rules will cause some of our most inexpensive sources of electricity to become much more expensive. Expensive energy equates directly to expensive domestically produced aluminum. This results in either less aluminum being produced and used locally and more imports – or – less aluminum used in domestically made products.
An environmentally friendly solution can be had in the form of LCMSRs (Liquid Core Molten Salt Reactors) and Coal Ash. America has no natural domestic source of aluminum, but it does have more than 100 years of coal ash piles that contain large amounts of aluminum oxide that can be used domestically to make aluminum. Coal ash also contains many other strategically important metals. Notably, it also contains the nuclear fuels Uranium and Thorium. While we have had the technology to extract these strategic metals and nuclear fuels from coal ash, it has never been economical to do so. But if thorium becomes valuable as a nuclear fuel, rather than being a “waste,” as it is now classified in the United States, making it very expensive to dispose of, strategic metals and nuclear fuel extraction have the potential to become very profitable.
This paper illustrates how the commercialization of LCMSR technology can revive our aluminum industry, improve national security, create jobs, and greatly enhance domestic environmental efforts of preserving and bettering our environment.
Although there is a very high worldwide demand for aluminum, the American aluminum industry is hamstrung in its goal of meeting domestic demand by a series of outsized costs, including the cost of building a new plant; regulatory costs; and energy costs, as well as an overabundance of aluminum on the market due to a persistent world-wide economic recessionary environment. At the end of 2014 and beginning of the year 2015, however, that glut of aluminum on the market has seemingly dried up due to demand from third world nations seeking first world status.
What would it cost today to build a typical American aluminum reduction plant with an annual production capacity of 250,000 tons? Based on the most recently completed plants, an estimated $1.5 billion would be required.
Add to this the regulatory requirement that this new smelter build its own generating facility to provide the large amounts of electricity needed for processing the aluminum which it will produce, and also add that this generating plant must meet governmental regulatory emissions goals. This will increase the estimated installation cost by $300 million, to about $406 million in total.
Now we are pushing the $2 billion mark for a new aluminum smelting plant. All of this assumes that a suitable site location can be found with the necessary support services, and that the site will be approved by all the relevant federal, state, and local regulatory agencies, and in a timely manner.
Today, in the United States, it would take several years to obtain the required permits and clearances. This would involve the need for environmental impact studies and reports, and hearings with many regulatory agencies and local and national governments, with no guarantee that final approval would not be challenged by court appeals. Such cumulative barriers, when combined with the present unavailability of needed energy at a competitive price, lend credence to the often-heard statements that another aluminum smelter plant will not ever be built in the United States.
But such plants must be built in the United States. These roadblocks must be overcome for American industry to take advantage of the coming huge worldwide demand for aluminum (due to China’s and India’s development of free markets) when worldwide economic stagnation ends and surplus aluminum in the marketplace is used up.
American jobs and American prosperity are at stake!
DEMAND AND MARKETS FOR ALUMINUM
There is a potential enormous persistent market for continued and increased production of aluminum in the United States, if the cost of producing aluminum could only be reduced.
A steep reduction in energy costs, which constitute a very large portion of the cost of producing aluminum, could be addressed by energy provided by a LCMSR (Liquid Core Molten Salt Reactor.)
Like oil, the world cannot get enough aluminum. China and India’s reach from the third world to the first world has dramatically increased the demand for aluminum. Top market sectors for the industry are transportation, including automotive and aerospace, beverage cans and other packaging, building/construction, and the electrical industry.
Chinese demand, as measured by Chinese consumption of unwrought aluminum, grew almost every year during the 1995-2004 period, nearly doubling between 1995 and 1999, and subsequently more than doubling between 1999 and 2004. Over the full 10-year period, Chinese consumption rose nearly three-fold (up 4.0 million metric tons) to reach 5.9 million metric tons by 2004, equal to 20.1 percent of global consumption in that year. From 2004 to 2012 there was nearly a four-fold increase in aluminum consumption.
In contrast to developed countries where the transportation sector dominates, building and construction is the largest aluminum-consuming sector in China, a reflection of ongoing building construction and infrastructure development and significantly lower per capita automobile ownership. In addition, the share of Chinese aluminum consumption accounted for by electrical products and consumer durables exceeds that of many industrialized nations, a reflection of both the country’s growing export-oriented manufacturing sector and its rising domestic consumer markets.
China’s relatively low per-capita consumption rate for unwrought aluminum, coupled with its expanding industrial activity and government housing programs, suggest that Chinese demand for aluminum will continue to grow, particularly in the construction and automotive sectors. An estimated 3.3 million apartments are being built every year in China, averaging approximately 240 million square meters of new housing each year.
Integrating lightweight aluminum into transport vehicles is one of the easiest ways to reduce the amount of fuel our vehicles consume.
If conservation is a goal of America’s energy plan, then the use of lightweight and more affordable aluminum should be part of that plan.
In 1994, transportation first emerged as the largest market for aluminum, at about one-quarter of the market, with passenger cars accounting for the vast majority of the growth. That trend largely continued until 2009. However, 2009 marked the worst year for auto sales since 1982, and, as such, transportation applications accounted for only 23.7 percent of all aluminum shipments in 2009 – 4.22 billion pounds in all.
The majority of this aluminum was used in automotive and light truck applications, as vehicle manufacturers continue to opt for lightweight aluminum solutions to improve fuel economy, reduce emissions, and enhance vehicle performance, for which aluminum is ideal. Accordingly, the aluminum content in passenger vehicles and light trucks has grown more than 40 percent and 68 percent, respectively, since 1991. Aluminum-intensive automobiles include the Audi A8 – with its aluminum body, aluminum front and rear axle, aluminum engine block, and numerous other aluminum components – and the Jaguar XK, with its aluminum body structure.
The China automobile market surpassed that of the United States in 2014, which resulted in more aluminum usage. Ownership of private automobiles in China is expected to increase. According to the Central Government, vehicle sales in China may rise to 25 million units by 2016 (from 5.1 million in 2004).
China currently produces 5 times more aluminum than its next closest competitor, and it is increasing its market share.
In the aerospace market, increased build rates for both military and civil aircraft have led to increased demand for aluminum. For example, between 1995 and 2004 U.S. production increased from 1,625 to 3,440 aircraft per year, despite a significant drop-off in production after the September 11, 2001 attacks. A new surge of aircraft orders in 2005 sustained aerospace industry demand for aluminum through 2013, even in America’s stagnant slow growth economy (new orders are expected between 2014 through 2016 to replace aging aircraft).
Demand for aluminum packaging, consisting mostly of flat-rolled aluminum sheet for beverage cans and foils for food packaging, has dramatically increased in China and India as their standard of living has increased. Adding to this, many new applications for aluminum beverage cans have been introduced, particularly for energy drinks and beer. Additionally, the packaging market reflects increasing trends for prepared and frozen meals, and blister-packaging for pharmaceutical products.
In the construction market, leading uses of aluminum are for window frames, doors, siding and facades, closely followed by support framing for roofs and walls. The construction market has been particularly strong in the industrializing economies of China and India.
Aluminum has many advantages for electrical applications. It is lightweight, strong, corrosion resistant, and a highly efficient conductor (aluminum has twice the conductivity, per pound, of copper),rendering it the material of choice for widespread applications such as transmitting power from generating stations to homes and businesses, and to make electronic boards for computers and handheld electric devices such as cell phones. Aluminum is also infinitely recyclable, making it a perfect fit for today’s environment and environmental priorities.
THE IMPORTANCE OF THE ALUMINUM INDUSTRY IN AMERICA
Aluminum is one of the few products and industries left in America that truly impacts every community in the country, whether through physical plants and facilities, recycling, heavy industry, and/or consumption of consumer goods.
China is rapidly dominating aluminum markets, from securing mineral rights to many foreign countries’ bauxite formations, to building refining and smelting plants in China. All the while, America is not constructing any more aluminum manufacturing plants due to environmental and siting regulations and electricity costs.
For our nation’s greater economic security, it is in America’s best interest to lower the manufacturing costs of aluminum, from startup through production, to produce aluminum economically and with a high degree of environmental responsibility.
CHINA’S GROWING DOMINANCE
America exports much of its recycled aluminum. A discarded soda can has a 75% chance of ending up in China.
China’s impact on the global market has been significant in three principal ways.
First, China’s need for alumina (aluminum oxide) to fuel its expanding aluminum production has driven alumina prices to record highs, narrowing profit margins for producers of unwrought aluminum, and contributing to restructuring throughout the industry.
Second, anticipation of growth in China’s demand for aluminum has increased production capacity worldwide. New countries have emerged as leading players in world markets as firms look to streamline operations and take advantage of low-cost electric power.
Finally, China’s role in the global marketplace has expanded significantly as state-owned Aluminum Corporation of China (Chalco) has emerged as one the world’s leading aluminum producers and China has moved from a net importer of aluminum to a net exporter.
Looking forward, it is uncertain whether Chinese aluminum output can keep pace with anticipated growth in domestic consumption from its rapidly urbanizing economy and that of India, and their expanding industrial production. If China does not receive help in producing more aluminum for the world market, aluminum prices could rise dramatically.
SUPPLY OF ALUMINUM IN CHINA
In 2005, 40 percent of China’s smelters were operating at a loss, and an estimated one-quarter of Chinese capacity was idle. Additionally, the Chinese aluminum industry’s rapid expansion risked overwhelming the world market, leading to sharp declines in the global market price for unwrought aluminum.
Today, all of China’s smelters are realizing a profit and the price of aluminum is high due to China’s policies in regulating the aluminum market.
Inadequate electricity supply and the lack of high-quality bauxite constrained faster expansion of Chinese aluminum production. For example, inadequate and uncertain electric power supplies had prevented expansions of several primary-smelting operations. As new coal and nuclear power plants come on line, the problem of inadequate power supply is being erased. Additionally, China currently relies on imports for an estimated one-half of the alumina necessary to meet its aluminum smelting needs, as the mineral content of the Chinese bauxite renders it more expensive and difficult to refine than bauxite available elsewhere.
The only major supplier of alumina from domestic sources in China is Chalco, which has traditionally supplied many Chinese aluminum smelters with alumina through contracts priced below the cost of imports. Imported alumina usually reflects the spot market price. However, as Chalco has expanded its production of domestic unwrought aluminum, the firm has reduced sales of alumina in order to supply its own smelters and has raised the price at which it sells alumina to other firms outside the country. Chalco’s actions have increased market demand for alumina, causing worldwide prices for alumina to rise significantly.
Future prospects for growth in China’s production of unwrought aluminum depend on further progress in addressing high-cost and inadequate supplies of alumina and electric power, upgrading outdated smelting technologies, and complying with potentially strict government measures to rein in production overcapacity (Chinese price controls are not unlike OPEC’s price controls of the oil market) in the aluminum industry.
In order to understand the nature of the non-regulatory costs of aluminum production, it is first necessary to understand how aluminum is created and the breakdown of the costs of its manufacture.
Aluminum does not occur in nature as a metal, but in the form of deposits of bauxite ore. Unfortunately, at present there is no domestic source of bauxite, and U.S. aluminum manufacturers import 100% of their bauxite ore from Jamaica, Guinea, Brazil, Guyana, China, Sierra Leone, Australia, and Greece.
Bauxite is mined, and by a two-step chemical process the bauxite is refined into an oxide called alumina – one of the feed-stocks for aluminum metal. The end of this alumina creation is a drying process that requires large quantities of heat energy.
Aluminum is made from alumina, and this process requires enormous amounts of electricity. Alumina and a molten electrolyte called cryolite are combined in a cell. Direct current electricity is passed from a consumable carbon anode into the cryolite, splitting the aluminum oxide into molten aluminum metal and carbon dioxide. The molten aluminum collects at the bottom of the cell and is periodically “tapped” into a crucible and cast into ingots which are then sold to customers which process the metal into its various applications.
The aluminum industry is a major industrial user of electricity. Because the electrolytic process is the only commercially proven method of producing aluminum, the industry has on its own pursued opportunities to reduce its use of electricity. In the last 50 years, the average amount of electricity needed to make a pound of aluminum has been slashed from 12 kilowatt hours to about 7 kilowatt hours, but the aluminum industry is constantly searching for ways in which energy and other production costs can be reduced. Although continual progress has been made over the 125-year history of aluminum processing to reduce the amount of electricity used, there are currently no viable alternatives to the electrometallurgical process.
A VICIOUS SPIRAL
Electricity is a huge component of the manufacturing cost of aluminum (30% to 40%). As energy costs increase domestically due to environmental regulations and expensive clean energy sources, so does the price of aluminum. This cost increase of aluminum, caused primarily by the rise in electricity costs, results in less aluminum being incorporated in the manufacture of automobiles. This, in turn, increases the weight and lowers the fuel economy of our vehicles, and raises our use of and dependence on imported fossil fuels. The more affordable aluminum is, the less dependent we are on other countries for transportation fuel derived from oil.
HOW MOLTEN SALT REACTOR TECHNOLOGY WILL REVIVE THE AMERICAN ALUMINUM INDUSTRY
Liquid Core Molten Salt Reactors (LCMSR) will revolutionize, for the better, the American aluminum industry in several ways. Most effective is LCMSR’s production of electricity at $.02/kilowatt hour, which is one-half the cost of coal ($.04/kilowatt hour), one-third the cost of natural gas (presently $.06/kilowatt hour, although expected to rise significantly in the near future due to increase in domestic usage and nearly completed arrangements to export significant quantities overseas), one-fourth the cost of traditional nuclear ($.08/kilowatt hour), and at one-sixth the cost of wind energy ($.12/kilowatt hour). As stated, the electricity costs to smelt aluminum constitute 30% – 40% of total its manufacturing costs. Depending on the fuel for the production source of the electricity being used (generally coal or natural gas), this electricity cost will be cut by at least 50% by substituting Liquid Core Molten Salt Reactors (LCMSR) as the source for electricity production. Because of the increasing regulatory burden being placed on coal fired power plants, and the turn to natural gas for this purpose, it is likely that the aluminum smelting electricity costs will be cut by two-thirds by use of LCMSRs. This is sure to have a salutary effect on the building of new aluminum plants and the creation of jobs in the industry.
Because electricity this cheap will dramatically reduce the cost of making aluminum, which will lower the market cost of aluminum significantly, aluminum will become more attractive to auto manufacturers. The resultant reduced weight of vehicles will help Americans conserve transportation fuel and make America less dependent on foreign countries for its transportation fuel needs. Less demand for oil can translate to lower fuel costs.
In addition, in creating this very inexpensive electricity, and unlike with coal and natural gas, the LCMSR will be a non-polluting and non-carbon emitting energy source. Thus it is likely that EPA regulations will have no application to the production of aluminum.
Further, should an on-site LCMSR be used to provide the heat for the drying process used to create alumina, a process that requires large quantities of heat energy, the cost of producing this basic feedstock for the aluminum industry will also be reduced, thereby further reducing the cost of producing aluminum.
EXTRACTION OF ALUMINA FROM WASTE PRODUCTS OF COAL
Again, there is no domestic source of bauxite ore to use for aluminum production. The United States has none, so it all must be imported. However, there are abundant domestic sources of aluminum other than bauxite. Notable among them is coal ash or fly ash, a “waste” product of the combustion of coal. There are landfills nationwide replete with coal ash from historical burning of coal, and we produce 60 million more tons each year.
Aluminum oxide (alumina) is a major constituent of fly ash, on average 14.8%. If this could be recovered from the fly ash produced in the United States, bauxite would not have to be imported. Coal’s “waste” product is, in reality, a strategic resource important to the United States.
A main part of the process of removing aluminum oxide from fly ash requires the use of a lot of heat energy. Providing that heat by use of the burning of coal or natural gas is expensive, and it creates a large carbon footprint.
A LCMSR produces abundant process heat; it runs much hotter than a traditional nuclear reactor. LCMSRs will produce, without any carbon footprint or air pollution, sufficient heat required for the process of separating aluminum oxide from coal ash.
Combining affordable heat conversion for extracting alumina from coal ash, and the affordable electricity necessary to “smelt” aluminum, both being derived from the same THMSR, there then begins to emerge great market potential for the aluminum industry in the “Coal Ash to Aluminum process.”
EXTRACTION OF THORIUM AND URANIUM FROM WASTE PRODUCTS OF COAL
Coal ash also contains Uranium and Thorium. If an LCMSR is used to drive the process of aluminum conversion, 100% of the Thorium and Uranium could be extracted from coal ash and be used to fuel the LCMSR on an ongoing basis in the “Coal Ash to Aluminum” production process.
Additionally there are many strategic and non-strategic metals that can be extracted from coal ash. Iron, Titanium, Vanadium, Germanium, Gallium, Tellurium, Indium, Yttrium, Cerium, Lanthanum, Neodymium, and Terbium are all found in coal ash, and although by themselves they are not economically extracted, if there is a market for Thorium and Uranium as a nuclear fuel, then the entire process becomes very cost competitive.
Without significant changes in regulation, availability and price of its raw materials, and availability of low cost energy in the form of heat and, in particular, of electricity, aluminum production in the United States, and the jobs that result from it, will end. Adoption and commercialization of LCMSR technology has the potential to solve all these problems.
EPA carbon emission regulations will not be applicable to electricity and heat generation by a LCMSR because LCMSRs will have zero carbon and air pollution emissions. This will relieve the energy production and aluminum production industries of one of their heaviest regulatory burdens.
Despite the lack of a domestic U.S. source of bauxite, enough aluminum oxide can be recovered from fly ash, using LCMSRs as the non-carbon producing heat source for doing so, to provide for all domestic needs for the raw materials to produce aluminum in America.
Electricity is the largest component of the cost of producing aluminum, and the cost of LCMSR-produced electricity, at half the cost of coal and at one-third the cost of natural gas, will revitalize America’s aluminum production industry.