WEBVTT - Mining for Scrap: The Future of Green Aluminum 0:00:00.200 --> 0:00:02.880 This is Dan of Perkins and you're listening to Switched 0:00:02.960 --> 0:00:06.680 on the BNAF podcast. I'm sure you're familiar with drinks 0:00:06.720 --> 0:00:09.080 cans and aluminum foil to wrap your food, But then 0:00:09.119 --> 0:00:12.119 what about the aluminum used in lightweighting of vehicles and 0:00:12.160 --> 0:00:16.000 of course in batteries. BNAF sees aluminum demand going up 0:00:16.079 --> 0:00:19.000 in the future, and our Global Aluminum Outlook expects to 0:00:19.000 --> 0:00:22.640 see this demand increase by seventy seven percent between twenty 0:00:22.680 --> 0:00:26.640 twenty two and twenty forty. According to the US Geological Survey, 0:00:26.680 --> 0:00:30.240 it's the second most abundant metal element in the Earth's crust, 0:00:30.280 --> 0:00:33.720 second only to silicon, and the second most used metal 0:00:33.920 --> 0:00:36.680 next to iron. So what's not to love? Well, it 0:00:36.720 --> 0:00:39.159 falls into the hard to abate category. So why is 0:00:39.200 --> 0:00:41.600 it hard to abate? And what are the processes involved 0:00:41.600 --> 0:00:44.120 in its production? And how does this compare with other 0:00:44.200 --> 0:00:47.320 metals in terms of emissions. Given it's well known for 0:00:47.400 --> 0:00:50.199 being infinitely recyclable, we also want to know what the 0:00:50.240 --> 0:00:52.519 conditions are that are right to keep it in the 0:00:52.520 --> 0:00:56.480 circular economy. In today's episode, we welcome back BNF's Head 0:00:56.480 --> 0:00:59.960 of Metals in Mining, doctor Quasimpofo. Together we discuss a 0:01:00.120 --> 0:01:03.560 range of topics, including the wide role aluminum plays across 0:01:03.600 --> 0:01:06.760 a number of industries, including automotive and clean energy, the 0:01:06.840 --> 0:01:11.000 differences between the primary production and recycling processes and the 0:01:11.040 --> 0:01:15.280 definition of green aluminum, the global supply chain behind aluminum 0:01:15.400 --> 0:01:19.360 it's production and exports, and how current geopolitical issues including 0:01:19.400 --> 0:01:22.640 the Carbon Border Adjustment Mechanism or seabaand for short, could 0:01:22.640 --> 0:01:25.920 affect the sector. As always, if you like this podcast, 0:01:26.080 --> 0:01:29.280 make sure to subscribe to receive updates on future episodes 0:01:29.280 --> 0:01:31.880 on your device, and consider giving us a review on 0:01:31.959 --> 0:01:35.200 Apple Podcasts or Spotify to make us more discoverable by others. 0:01:35.520 --> 0:01:49.600 And now let's go to my conversation with Quasyquaisy. Thank 0:01:49.640 --> 0:01:50.960 you for joining us on the show today. 0:01:51.160 --> 0:01:53.360 Thank you Dana for having me once again, says some 0:01:53.480 --> 0:01:54.120 ground roles. 0:01:54.320 --> 0:01:56.880 Is it going to be aluminum or aluminium? 0:01:57.240 --> 0:01:58.280 Let's go the American way. 0:01:58.680 --> 0:02:01.280 We're going to go with aluminum. Yes, aluminum it is. 0:02:01.400 --> 0:02:03.960 So let's actually do a little bit of background on 0:02:04.000 --> 0:02:06.720 aluminum and where it's used. Now, obviously people are going 0:02:06.800 --> 0:02:10.200 to associate it with maybe their can of soda and 0:02:10.720 --> 0:02:12.960 see it from the consumer end of things, but it's 0:02:12.960 --> 0:02:17.600 actually an extraordinarily useful and increasingly in demand metal in 0:02:17.639 --> 0:02:20.520 the energy transition. So can you give me just a 0:02:20.520 --> 0:02:25.200 little bit of information regarding the current use cases for aluminum. 0:02:25.240 --> 0:02:27.120 I think before we talk about the current I just 0:02:27.160 --> 0:02:29.160 wanted you to take you on the journey of history. 0:02:29.400 --> 0:02:31.480 And you know it would amaze you to think that 0:02:31.600 --> 0:02:34.359 a couple of hundred years ago, if a guest visited 0:02:34.400 --> 0:02:36.560 you a home and you wanted to bring out your 0:02:36.639 --> 0:02:39.800 best cookin wear to serve your muss VIP guest, it 0:02:39.800 --> 0:02:42.280 would be an aluminum plate and then you would give 0:02:42.280 --> 0:02:44.720 the gold plates to the average guests. 0:02:45.000 --> 0:02:47.160 Wow, where were they getting the aluminum? And certainly they 0:02:47.200 --> 0:02:49.799 weren't doing the smelting that we're doing today exactly. 0:02:49.880 --> 0:02:53.280 So that's just precisely why aluminum back then was seen 0:02:53.320 --> 0:02:56.400 as a luxury product because of the smelting, the costs 0:02:56.560 --> 0:02:59.560 required to obviously process the box site, which we'll talk 0:02:59.560 --> 0:03:03.040 about fully later into aluminum. And what we realize is 0:03:03.040 --> 0:03:07.200 that ultimately when technology made the smelting of aluminum a 0:03:07.280 --> 0:03:10.919 cheaper process, hence aluminum becoming a cheaper product, it became 0:03:11.280 --> 0:03:14.520 that every day use plate or silverware so to speak, 0:03:14.600 --> 0:03:16.800 that you house your guest with. But it's just interesting. 0:03:16.840 --> 0:03:18.720 I wanted to take you back and to answer your 0:03:18.800 --> 0:03:21.280 question what is the current use case for aluminum? And 0:03:21.320 --> 0:03:23.640 I tend to say that it's actually one of the 0:03:23.680 --> 0:03:26.639 most used metals. And you talk about the energy transition, 0:03:26.680 --> 0:03:29.360 which obviously is one important key factor, But then in 0:03:29.480 --> 0:03:33.640 terms of the demand construction, almost every major building would 0:03:33.639 --> 0:03:36.960 have some pieces of aluminum in there. Every modern vehicle 0:03:37.120 --> 0:03:39.360 would have some pieces of aluminium in there. And you 0:03:39.400 --> 0:03:42.280 talk about the infamous famous cans, Coca coula cans or 0:03:42.280 --> 0:03:44.600 Pepsi cans or whatever can it is, there is also 0:03:44.680 --> 0:03:47.600 an aluminum there. So if we look around US, aluminum 0:03:47.600 --> 0:03:51.960 plays a very important role in everyday life, including food packaging. 0:03:52.200 --> 0:03:55.000 And is this because it's inexpensive or because of some 0:03:55.040 --> 0:03:56.600 of the unique properties of the metal. 0:03:56.920 --> 0:04:00.320 Obviously unique properties come first, because if you're thinking, of course, 0:04:00.440 --> 0:04:03.560 compared to something like plastic, plastic is cheaper and alumnum 0:04:03.560 --> 0:04:05.960 would obviously be more expensive. But then it come down 0:04:06.040 --> 0:04:08.600 to its qualities in terms of the unique next. But 0:04:08.640 --> 0:04:11.960 then most importantly I think the weight. Imagine having your 0:04:12.000 --> 0:04:14.640 Coca cola made of steel, the extra weight that you 0:04:14.680 --> 0:04:17.640 would have to accommodate in terms of transporting it from 0:04:17.640 --> 0:04:19.840 one point to the other, or even just holding it 0:04:19.880 --> 0:04:24.320 in your palm. So above all else, beyond its unique characteristics, 0:04:24.320 --> 0:04:26.440 like you rightly mentioned, is a light weight that it 0:04:26.440 --> 0:04:28.040 comes with that makes it very unique. 0:04:28.080 --> 0:04:30.039 So I'm thinking it might be used for lightweighting for 0:04:30.080 --> 0:04:32.800 a number of things you're mentioning consumer products. I certainly 0:04:32.839 --> 0:04:36.960 see the use case within vehicles. Is that a reason 0:04:37.200 --> 0:04:41.880 for kind of future application the lightweighting potential, Actually, I. 0:04:41.839 --> 0:04:44.360 Would say it's not even future, it's a current application. 0:04:44.480 --> 0:04:47.560 And I think historically it's important to understand that there 0:04:47.560 --> 0:04:50.919 are two ways autocoons can improve the efficiency of a vehicle. 0:04:51.160 --> 0:04:53.680 So one either you get a bigger range in so 0:04:53.720 --> 0:04:56.640 you can go faster, or you maintain the engine size 0:04:56.720 --> 0:04:59.680 and reduce the weight of the car to optimize the cast. 0:04:59.720 --> 0:05:03.080 Before and like I said, backward internal combusting engine, the 0:05:03.160 --> 0:05:05.800 use case was not really predominant. But then the moment 0:05:05.880 --> 0:05:09.120 you come down to battery electric vehicle, the battery itself 0:05:09.279 --> 0:05:11.320 is a very heavy product. And what you're trying to 0:05:11.360 --> 0:05:15.440 do if we are thinking of increasing the range of vehicles, 0:05:15.520 --> 0:05:19.200 which in North American market is a very important distinguishing 0:05:19.279 --> 0:05:22.360 factor between two electric vehicles you have two options there. 0:05:22.520 --> 0:05:25.480 You can either keep investing in better batteries that are 0:05:25.560 --> 0:05:28.120 denser that will give you more range, or you can 0:05:28.160 --> 0:05:31.280 maintain the battery and then reduce the size of the car. 0:05:31.400 --> 0:05:34.080 And what automakers actually come in to realize is that 0:05:34.200 --> 0:05:36.760 you can actually use aluminum for the body of the 0:05:36.839 --> 0:05:40.640 vehicles to significantly reduce weight, but then probably get similar 0:05:40.640 --> 0:05:43.640 results than you do in using steel at a cheaper cost. 0:05:43.880 --> 0:05:48.320 So before we get into really this outlook for increased 0:05:48.320 --> 0:05:50.800 demand going forward, let's just take a moment for you 0:05:50.839 --> 0:05:53.080 to paint a picture in my mind of what the 0:05:53.120 --> 0:05:57.320 production process actually looks like and why this particular metal 0:05:57.360 --> 0:06:00.560 falls into the hard to abate sector and it's considered 0:06:00.720 --> 0:06:04.400 extremely carbon intensive. Will you tell me if I'm walking 0:06:04.520 --> 0:06:07.279 up to this, first of all, what's the size, what's 0:06:07.320 --> 0:06:10.880 the scale, and what's actually happening in an aluminum production facility. 0:06:11.040 --> 0:06:13.279 It's quite an interesting one. So it's a metal that 0:06:13.400 --> 0:06:17.120 goes through about three stages. So first, just like every 0:06:17.160 --> 0:06:19.479 other metal, you need to get it one way or 0:06:19.480 --> 0:06:21.919 the other from the ground. And aluminum is one of 0:06:21.960 --> 0:06:25.400 the few metals that is not actually free in nature, 0:06:25.520 --> 0:06:27.520 and by that I mean you're not going to go 0:06:27.520 --> 0:06:30.839 into a mine and see aluminum just lying there onlike gold. 0:06:31.040 --> 0:06:34.520 So hence my initial historical fact about the fact that 0:06:34.720 --> 0:06:36.760 aluminium was expensive because they had to go through a 0:06:36.760 --> 0:06:38.920 couple of processes. So you go to a mine and 0:06:39.000 --> 0:06:41.720 you discover what we call box site. So box side 0:06:41.800 --> 0:06:45.719 is an element on its own, free in nature, abandant 0:06:45.760 --> 0:06:49.120 in countries like obviously Australia or China or Guinea. 0:06:49.160 --> 0:06:51.720 So we're not worried about how much box site there 0:06:51.760 --> 0:06:53.120 is out there, not at all. 0:06:53.200 --> 0:06:55.440 The tricking point in the supply chain is not the appstream, 0:06:55.440 --> 0:06:57.760 which is a box site. So you go on the mine, 0:06:57.800 --> 0:06:59.960 you get the box site, and then you process it 0:07:00.080 --> 0:07:03.320 into a product called alumna and which is an intermediary product, 0:07:03.480 --> 0:07:06.560 and ultimately you're able to convert that alumina into aluminium. 0:07:06.600 --> 0:07:09.159 But then, I know, it sounds very simple, sounds like 0:07:09.200 --> 0:07:12.920 three words. But in theory between conversion of box side 0:07:12.920 --> 0:07:16.320 to aluminum, do you're looking at a temperature of about 0:07:16.440 --> 0:07:19.400 over one thousand degrees celsius And for most of our 0:07:19.440 --> 0:07:22.559 listeners that sounds like a very abstract number. But Dana, 0:07:22.600 --> 0:07:25.360 have you ever been close to an active volcano? No? 0:07:25.560 --> 0:07:28.160 Although no, no, Actually, I don't have any interest in 0:07:28.240 --> 0:07:30.520 doing that, but yeah, sure no, if you. 0:07:30.480 --> 0:07:33.120 Did, you would realize that an active accounto the temperature 0:07:33.120 --> 0:07:36.040 of an active volcano is mostly between a thousand to 0:07:36.040 --> 0:07:38.960 two thousand, So in order to convert box side into 0:07:39.000 --> 0:07:42.000 the aluminum that we see in our coca cola or pepsicants, 0:07:42.160 --> 0:07:45.520 you would need temperatures close to what an active volcano 0:07:45.720 --> 0:07:48.720 actually is. And then the question is how much energy 0:07:49.240 --> 0:07:52.360 do you actually need to get temperatures of an active 0:07:52.400 --> 0:07:55.040 volcano in order to convert box side to aluminium. 0:07:55.080 --> 0:07:58.360 And presumably this temperature needs to be maintained in the 0:07:58.360 --> 0:08:01.600 facility for the deray of production. And it's not like 0:08:01.640 --> 0:08:03.760 we go home at night, turn off the light, you know, 0:08:03.920 --> 0:08:06.480 a thousand degrees down, let's go to zero, and then 0:08:06.520 --> 0:08:08.520 come back the next morning and do it all over again. 0:08:08.560 --> 0:08:11.240 Precisely so, And it's actually one of the few processes 0:08:11.280 --> 0:08:13.840 where you cannot have a downtime because the moment you 0:08:13.880 --> 0:08:18.080 do whatever material you have in the smelter solidifies, the 0:08:18.120 --> 0:08:20.560 moment the temperature drops, like you rightly mentioned, and you 0:08:20.680 --> 0:08:23.400 probably have to spend a couple of billions building that 0:08:23.520 --> 0:08:26.520 whole smelter or refine your facility again, so there's no 0:08:26.600 --> 0:08:29.080 sleep days. When you produce an aluminum you charge it 0:08:29.120 --> 0:08:31.760 at a thousand, and you have to stay consistent with that. 0:08:32.040 --> 0:08:36.120 Now, is the aluminum produced typically near where companies are 0:08:36.160 --> 0:08:38.400 going to be using it? Or is this something that 0:08:38.520 --> 0:08:41.760 has a massive global supply chain and is shipped everywhere. 0:08:42.120 --> 0:08:45.080 So the biggest driver for where you're going to find 0:08:45.080 --> 0:08:48.240 an aluminum plant, it's obviously where you get cheap energy. 0:08:49.200 --> 0:08:52.040 So unlike other commodities, say battery, where you want to 0:08:52.080 --> 0:08:54.600 take it closer to where you produce it. Historically the 0:08:54.640 --> 0:08:57.960 biggest driver because like I said, to be able to 0:08:58.080 --> 0:09:01.400 crank up a smelter to temper of an active volcanol, 0:09:01.440 --> 0:09:03.920 you need a lot of energy. So historically we've seen 0:09:04.080 --> 0:09:08.000 that aluminum refineries and smelterts move closer to places where 0:09:08.000 --> 0:09:10.520 they can get cheap energy. And in the twentieth century, 0:09:10.640 --> 0:09:14.040 one of the cheap energy sources was obviously hydro electric power. 0:09:14.120 --> 0:09:16.959 So you can find in Scandinavian countries, in New Zealand, 0:09:17.040 --> 0:09:21.480 in Canada, or countries where mostly there are very reliable 0:09:21.559 --> 0:09:24.720 and dependable hydro electric power, we find the aluminum production 0:09:24.840 --> 0:09:25.920 moving there as well. 0:09:26.240 --> 0:09:29.360 Now, the way that you've described a plant really doesn't 0:09:29.400 --> 0:09:31.959 trigger to me that there is going to be much 0:09:31.960 --> 0:09:34.800 of a difference from an energy and intensity standpoint for 0:09:35.400 --> 0:09:40.600 raw aluminum versus recycled aluminum. Is there from a production 0:09:40.720 --> 0:09:44.559 standpoint a big benefit of using recycled aluminum when we're 0:09:44.559 --> 0:09:46.560 thinking about emissions, So there's. 0:09:46.480 --> 0:09:49.439 A lot of benefits there. And from an energy perspective, 0:09:49.600 --> 0:09:52.880 if you decided to get your aluminum from a recycled source, 0:09:53.000 --> 0:09:57.040 you use fifteen times less energy twenty two times less emissions. 0:09:57.120 --> 0:09:59.200 Now that is a big winner if you care about 0:09:59.280 --> 0:10:01.680 environment like you and I do. And so what we're 0:10:01.720 --> 0:10:05.120 seeing is that companies are actually when they go to 0:10:05.559 --> 0:10:09.240 their suppliers, they don't first ask can you produce aluminum 0:10:09.280 --> 0:10:11.400 from primary sources? First? For us, they actually want to 0:10:11.440 --> 0:10:14.480 know how much talk of recycled aluminum you have, and 0:10:14.520 --> 0:10:16.920 I would prefer to buy that first before we talk 0:10:16.960 --> 0:10:20.360 about primary So, yes, there's a use case if you 0:10:20.440 --> 0:10:24.080 care about the environment for recycled aluminum. But then it's 0:10:24.080 --> 0:10:28.000 not just about the energy and then the emissions intensity 0:10:28.040 --> 0:10:30.839 that is lower. Let's take a country like China. Last year, 0:10:30.960 --> 0:10:33.760 China produced about forty two million tons of the commodity 0:10:33.800 --> 0:10:35.960 which is close to about fifty percent of what's produced 0:10:36.040 --> 0:10:38.280 last year. What we know in China is that over 0:10:38.320 --> 0:10:41.880 the last ten years production has increased quite significantly. However, 0:10:42.080 --> 0:10:45.160 Beijing has set a target that you cannot go more 0:10:45.200 --> 0:10:49.559 than forty five million for primary production. So China's smelters 0:10:49.559 --> 0:10:52.720 and refineries only have three million more of runway in 0:10:52.800 --> 0:10:55.520 terms of capacity increase for primary aliminum. So what is 0:10:55.559 --> 0:10:58.040 going to happen over the next five years in China 0:10:58.160 --> 0:11:01.400 where the largest aluminum is producer, We think that the 0:11:01.480 --> 0:11:04.960 switch to secondary aluminum is going to happen quicker and sooner. 0:11:05.160 --> 0:11:08.120 So when it comes to the term green aluminum, is 0:11:08.120 --> 0:11:10.520 it predominantly recycled or does it have to do more 0:11:10.679 --> 0:11:13.480 with the energy source that's actually powering the facility? 0:11:13.800 --> 0:11:16.959 So green aluminum is actually the end product. So I 0:11:17.360 --> 0:11:20.240 would like to say green aluminium is technology agnostic, But 0:11:20.280 --> 0:11:24.520 then it's practically difficult, even not impossible, to rely on 0:11:24.679 --> 0:11:27.520 primary aluminum in order to achieve green aluminum, because then 0:11:27.520 --> 0:11:30.920 it becomes even with secondary even with recycle, it's not 0:11:31.200 --> 0:11:34.040 entirely green. You still probably need to rely on some offset. 0:11:34.200 --> 0:11:37.160 So I would say that green aluminum the easiest route 0:11:37.200 --> 0:11:40.200 if a company is thinking about green aluminum would be 0:11:40.400 --> 0:11:44.880 to probably rely on secondary sources which requires less energy, 0:11:45.000 --> 0:11:49.000 which requires obviously less associated with less emissions and potentially 0:11:49.080 --> 0:11:52.320 cheaper and where you still have some emissions associated with 0:11:52.360 --> 0:11:54.600 the supply chain, off sets play a key role in 0:11:54.679 --> 0:11:57.160 order to deliver those green aluminum and then we are 0:11:57.160 --> 0:12:00.320 seeing that actually happen. I think Apple has established an 0:12:00.360 --> 0:12:02.560 off take agreement with Rio Tinto. I think the next 0:12:02.600 --> 0:12:06.119 Presso has also made some announcements about using green aluminum 0:12:06.160 --> 0:12:09.520 for its cupsules coffee cupsules, So there's a use case 0:12:09.520 --> 0:12:11.960 for it, but that is still on the fringes of 0:12:12.120 --> 0:12:16.480 the main supply demand market. Hopefully, with time, as policies 0:12:16.600 --> 0:12:20.559 that encourages and enforces the emission reduction of the HAW 0:12:20.559 --> 0:12:23.760 TWA base sectors come into play, we could potentially see 0:12:23.840 --> 0:12:25.800 green aluminum entering the mass market. 0:12:25.960 --> 0:12:29.160 So green aluminum as the end product is going to 0:12:29.160 --> 0:12:31.720 be comprised of some recycled materials, and we'll come to 0:12:31.720 --> 0:12:34.800 that in a second. Actually what goes into the materials 0:12:34.840 --> 0:12:38.040 of the recycling process and what you actually need there. 0:12:38.160 --> 0:12:41.160 But how about the energy sources? Because of the energy 0:12:41.200 --> 0:12:44.520 intensity you mentioned hydro being one of the main areas 0:12:44.679 --> 0:12:47.199 when I think of certain parts of China's grid, I'm 0:12:47.200 --> 0:12:51.160 thinking about the access to inexpensive and high intensity coal. 0:12:51.559 --> 0:12:54.800 Is green aluminum something that can actually be powered by 0:12:54.800 --> 0:12:58.199 renewable energy sources? Or is the energy intensity just too high? 0:12:58.559 --> 0:13:02.000 So because the energy reques it's fifteen times less for 0:13:02.400 --> 0:13:05.720 recycled you don't need, it's already heated up. But because 0:13:05.840 --> 0:13:09.560 your energy demand is significantly lower that it would be 0:13:09.679 --> 0:13:12.640 as compared to primary supply, you realize that the intensity 0:13:12.679 --> 0:13:15.200 of energy you would actually need in order to produce 0:13:15.320 --> 0:13:18.400 recycled aluminum is way way lower. So that opens up 0:13:18.559 --> 0:13:21.679 other energy sources, which is like you rightly mertioned cleaner 0:13:21.840 --> 0:13:25.000 and probably cleaner compared to say coal or other sources 0:13:25.040 --> 0:13:27.840 for them to be competitive from a cost perspective, but 0:13:27.840 --> 0:13:31.160 then most importantly from a reliability perspective in producing the 0:13:31.240 --> 0:13:34.040 recycled aluminum that would ultimately become the green alumino. 0:13:34.120 --> 0:13:37.199 Okay, so it's not just the fact that it's recycled 0:13:37.200 --> 0:13:42.080 products that really changes the emissions of this, it's the 0:13:42.280 --> 0:13:44.760 entire production process. So walk me a bit through that 0:13:44.880 --> 0:13:47.720 and some of the things that make recycled aluminum unique 0:13:47.760 --> 0:13:50.839 and really what the type of metal is that you need, 0:13:50.840 --> 0:13:54.320 because it's not all just the cans that I am 0:13:54.360 --> 0:13:56.720 throwing into my recycling bin at the end of the day. 0:13:56.840 --> 0:13:59.040 And for those of us listening, please always remember to 0:13:59.080 --> 0:14:02.080 recycle your cans. It plays a very important role in 0:14:02.120 --> 0:14:04.560 the supply chain now and more so in the future. 0:14:04.600 --> 0:14:06.679 But then to answer your question, there are two sources 0:14:06.679 --> 0:14:09.280 of what we call fee stock or mosh scrap where 0:14:09.280 --> 0:14:12.439 we get our recycled aluminum from. So number one is 0:14:12.480 --> 0:14:14.360 what we call the old scrap. So, like I said, 0:14:14.480 --> 0:14:17.439 if you've got can't in your kitchen that you probably 0:14:17.520 --> 0:14:20.400 have finished using and looking to dispose, it's an important 0:14:20.440 --> 0:14:21.560 fee stock for the market. 0:14:21.640 --> 0:14:23.680 And are they taking scrap out of these cars as 0:14:23.680 --> 0:14:26.640 well and out of batteries. It's coming from everywhere precisely, 0:14:26.680 --> 0:14:28.320 So this is what you're seeing at a scrap yard 0:14:28.360 --> 0:14:29.320 when you drive past it. 0:14:29.360 --> 0:14:31.720 And so there's actually money to be made for those 0:14:31.760 --> 0:14:34.760 who collect them, because what these smelters do is actually 0:14:34.800 --> 0:14:36.760 they buy them. It's like going to a mine and 0:14:36.800 --> 0:14:39.280 digging our box sites. This time you're donating the middle 0:14:39.280 --> 0:14:41.560 of a city. So there's actually value in end of 0:14:41.640 --> 0:14:43.920 life cast. That's why we call them salvage value. There's 0:14:44.000 --> 0:14:46.160 value in there because of the metals that come with 0:14:46.240 --> 0:14:48.640 ease dens and what we're seeing is that this old 0:14:48.920 --> 0:14:51.360 scrap is going to play a key role in ensuring 0:14:51.400 --> 0:14:53.840 that we meet our recycling demand. But there is also 0:14:54.080 --> 0:14:57.440 another part of scrap, what we call newscrap, and then newscrap, 0:14:57.520 --> 0:15:00.200 which is probably not common because it doesn't have to 0:15:00.240 --> 0:15:03.360 do with consumers. It comes from manufacturers. So for every 0:15:03.400 --> 0:15:07.360 manufacturing process there's something called scrappage. Human beings are not perfect, 0:15:07.400 --> 0:15:10.120 so our machines. So whenever we have to produce a product, 0:15:10.240 --> 0:15:13.880 a setain percentage of it would not ultimately end up 0:15:13.960 --> 0:15:17.160 going into the final finished product, so we call them scrap. 0:15:17.200 --> 0:15:19.960 We put that away. So in the production of aluminum products, 0:15:19.960 --> 0:15:23.120 in the products there is also scrappage, so about ten 0:15:23.200 --> 0:15:25.960 to fifteen to twenty percent, depending on the efficiency of 0:15:25.960 --> 0:15:28.600 the factory or the manufacturer, would go into scrap. So 0:15:28.640 --> 0:15:31.880 that scrap is also sold to a recycling company who 0:15:31.920 --> 0:15:34.400 would then use that as a fee stock to ensure 0:15:34.480 --> 0:15:37.160 that they're able to produce recycled aluminum. 0:15:37.240 --> 0:15:41.320 Now new scrap, this is the leftovers can new scrap, 0:15:41.480 --> 0:15:43.560 and I'm going to get really circular. Here, can it 0:15:43.600 --> 0:15:46.400 be recycled aluminum but just the leftovers from a different 0:15:46.400 --> 0:15:47.320 production process? 0:15:47.520 --> 0:15:51.080 Yes, so all of them go into another smelting and 0:15:51.240 --> 0:15:53.800 is melted again. But then the thing is that news 0:15:53.880 --> 0:15:57.240 crap has a higher value because it's not contaminated. So 0:15:57.320 --> 0:15:59.520 if you think about your cant, first of all, yes 0:15:59.520 --> 0:16:01.880 it's an a on can, but then it's quoted with a 0:16:01.960 --> 0:16:04.840 logo like for example, I said coca cola or pepsi 0:16:05.040 --> 0:16:07.640 or whatever product it is, so that in itself is 0:16:07.680 --> 0:16:11.240 a form of contamination that these recycling manufacturers would have 0:16:11.320 --> 0:16:14.120 to get rid of. So the preference for most recyclers 0:16:14.160 --> 0:16:17.360 is obviously to use if they could get access to newscrap, 0:16:17.400 --> 0:16:20.080 that would be great. And then obviously, as manufacturers get 0:16:20.080 --> 0:16:23.200 better at their job, the scrappageerate reduces, so you don't 0:16:23.240 --> 0:16:25.400 find a lot of that newscrap in the market. And 0:16:25.440 --> 0:16:27.920 if you permit me to throw some numbers, last year, 0:16:28.000 --> 0:16:30.920 global production of news grap was about fifteen point five 0:16:30.920 --> 0:16:31.680 million tonto. 0:16:31.960 --> 0:16:32.560 Is that enough? 0:16:32.920 --> 0:16:35.080 There is not enough newscrap, but of course that is 0:16:35.120 --> 0:16:37.640 going to grow. By twenty thirty five, we expect our 0:16:37.760 --> 0:16:40.400 market to reach twenty two point seven million, So that's 0:16:40.480 --> 0:16:43.760 just shy of eight million increment over the next thirteen years, 0:16:43.800 --> 0:16:47.480 whereas oldchscrap, which most of our listeners will be familiar with, 0:16:47.720 --> 0:16:50.760 is currently sitting at around twenty three million in twenty 0:16:50.800 --> 0:16:53.480 twenty two, but that would rise up to forty eight million, 0:16:53.560 --> 0:16:56.120 And like I said, every recycler's dream would be to 0:16:56.160 --> 0:16:58.960 get access to the new kind of scrap. But then, hey, 0:16:59.040 --> 0:17:01.560 oach crap is not bad as well, given that it 0:17:01.800 --> 0:17:05.320 helps lower the emission intensity of the production of alumino. 0:17:06.680 --> 0:17:09.560 So we don't have enough scrap, either old or new, 0:17:09.640 --> 0:17:12.640 to meet future demand for what we are thinking about 0:17:12.680 --> 0:17:15.159 the aluminum market could potentially look like in the not 0:17:15.280 --> 0:17:18.080 so distant future. And I guess the question is really 0:17:18.280 --> 0:17:20.280 how do we fix that the couple of ways. 0:17:20.520 --> 0:17:23.159 Number one, we have to increase primary supply, but then 0:17:23.359 --> 0:17:27.439 primary supply in areas where obviously you get access to 0:17:27.680 --> 0:17:31.080 clean energy sources. Number two, we would have to increase 0:17:31.200 --> 0:17:35.040 the recycling, because not all the aluminum that exists in 0:17:35.080 --> 0:17:38.520 stock today is actually recycled when they reached their end 0:17:38.520 --> 0:17:40.680 of life. And that is why I encourage her consumers 0:17:40.680 --> 0:17:44.440 as an example that if you are disposing of anything aluminum, 0:17:44.440 --> 0:17:46.879 it's important you take it to recycling in order to 0:17:46.960 --> 0:17:49.399 increase the fee stock that will be available for recyclists. 0:17:49.400 --> 0:17:52.920 And once we do that, we increase their recycling production 0:17:53.000 --> 0:17:55.440 as well. The thirteen, which is an interesting one, is 0:17:55.480 --> 0:17:58.720 what I call the power of technology. If we develop 0:17:58.840 --> 0:18:01.679 alternatives to our e liminum where there is light weighting, 0:18:01.760 --> 0:18:05.359 or vehicles where there is cant As we develop alternatives, 0:18:05.520 --> 0:18:08.040 we think that for example, in a base case, if 0:18:08.080 --> 0:18:12.240 nothing changes last year, we consume over eighteen million tons 0:18:12.280 --> 0:18:15.280 of aluminum on a business as usual trajectory, that could 0:18:15.359 --> 0:18:18.240 rise to about one hundred and forty two million data 0:18:18.400 --> 0:18:20.600 by twenty forty. That that's a lot of growth. And 0:18:20.680 --> 0:18:23.560 like I said, business as usual unless we are either 0:18:23.680 --> 0:18:27.200 mining more, recycling more, which probably would not be as 0:18:27.240 --> 0:18:31.000 easy as investing in technologies that would reduce our dependency, 0:18:31.040 --> 0:18:33.600 so that one forty million by twenty fifty could end 0:18:33.720 --> 0:18:36.040 up actually being one hundred million rather than one forty 0:18:36.040 --> 0:18:39.240 million as a result in investments in technologies that reduces 0:18:39.280 --> 0:18:42.440 our demand for aluminum and then shift that to something else. 0:18:42.520 --> 0:18:44.840 And an example is obviously the grid. So if you 0:18:44.880 --> 0:18:47.760 take the grid is mostly metals and by grid I'm 0:18:47.760 --> 0:18:51.040 referring to those transmission lines you probably see app in 0:18:51.040 --> 0:18:53.359 the sky that takes power from a source all the 0:18:53.400 --> 0:18:55.359 way down to your homes. And what we've realized is 0:18:55.400 --> 0:18:58.480 that the dominant metals are actually copper or aluminum. But 0:18:58.520 --> 0:19:01.879 here's where it gets interested. When ropper prices rise very high, 0:19:02.040 --> 0:19:05.400 companies tend to switch to aluminum, and eliminum prices rise, 0:19:05.560 --> 0:19:08.199 they tend to switch to copper. But this substitution is 0:19:08.240 --> 0:19:10.960 purely based on economics. What we should be looking at 0:19:11.000 --> 0:19:14.960 in the next generation of consumption, whether it's great or 0:19:15.160 --> 0:19:18.480 vehicles or builders, is how can we replace our use 0:19:18.520 --> 0:19:21.560 of aluminum with other products in order to reduce the amount. 0:19:21.840 --> 0:19:24.560 So not copper and not aluminum. But if I had 0:19:24.560 --> 0:19:28.400 to pick between the two, which has the lower emissions intensity? 0:19:28.680 --> 0:19:31.159 Copper has a lower emissions intensity, but it comes out 0:19:31.160 --> 0:19:34.840 of a prices is about three four times more expensive 0:19:35.000 --> 0:19:37.160 on a paton basis compared to aluminum. 0:19:37.600 --> 0:19:40.760 So you've definitely established that there is a bright future 0:19:40.760 --> 0:19:43.280 for aluminum demand and it doesn't seem to be evading 0:19:43.320 --> 0:19:45.480 anytime soon. And I want to know, really, where is 0:19:45.520 --> 0:19:49.200 it coming from. Is it entirely vehicles? Certainly not drinking 0:19:49.200 --> 0:19:51.119 any more soda on my end, so it's not my fault, 0:19:51.200 --> 0:19:55.080 But where is the additional demand coming from going forward 0:19:55.119 --> 0:19:56.800 in the next several decades. 0:19:57.200 --> 0:20:00.680 So a Keithan will be the infrastructure for rubble energy. 0:20:00.720 --> 0:20:05.160 As energy producers decentralize and obviously invest in solar and wind, 0:20:05.280 --> 0:20:08.040 we will need a lot of infrastructure to support the 0:20:08.080 --> 0:20:11.440 solars and then the wind turbines and so majority a 0:20:11.520 --> 0:20:14.400 big percentage of the growth we expect moving on over 0:20:14.440 --> 0:20:18.480 the next twenty years will come from renewable energy infrastructure. 0:20:18.480 --> 0:20:21.439