Aluminum Commodity Report

Introduction

Aluminum is all around us. It is the third most common element in the Earth's crust, and in modern times, it has become the second most used metal on earth behind steel. Despite the abundance of aluminum as a mineral and high use rate of aluminum, humanity was slow to use it as a resource; aluminum was first produced in 1854 (Alcoa), whereas other non-ferrous metals such as copper, lead, and tin have been in use for thousands of years. This is largely due to the rather complex natural and anthropogenic processes needed to refine naturally occurring aluminum. The production processes of aluminum as well as current usage and future demand are discussed below.

Geology and Location of Major Ore Deposits

Aluminum has an average crustal abundance of approximately 8.2% by mass and is the third most abundant metal element in the Earth's crust behind oxygen and silicon (Craig et al., 2011). Aluminum in its native state is highly reactive, meaning free metallic deposits are rare. Aluminum is most commonly found in the form of highly stable aluminosilicates such as feldspar. Currently, however, there are not economically feasible processes available to utilize these resources for aluminum production (Lee Bray, E., 2011a).

These aluminosilicates must undergo lateritic weathering before they form the bauxite clays gibbsite, boehmite, and diaspore that are the ore deposits used for aluminum production. Lateritic weathering occurs in warm, humid environments with heavy rainfall typical of the tropical regions of the Earth. Neutral to slightly basic groundwater will preferentially leach silicon from feldspar to form bauxite as described below (Robb, L. J., 2005):

Feldspar – (loss of Silicon) ? Kaolinite – (loss of Silicon) ? Gibbsite (Al(OH)3)

At lower pH, aluminum is more soluble than silicon and will be leached out to produce a silicon rich soil as opposed to bauxite (Robb, L. J., 2005).

In 2009, the U.S. Geological Survey lists twenty-seven countries as bauxite producers. Of these, the top six producers (listed in descending order), Australia, China, Brazil, India, Guinea, and Jamaica, accounted for approximately 86% (170 million metric tons) of total global bauxite production (199 million metric tons) in 2009 (Lee Bray, E., 2011b). Figure 1 illustrates the global bauxite production trends since 1999; note that domestic U.S. production of bauxite is negligible and are only used in non-metallurgic products including abrasives, as well as the plateau in production over 2007 – 2009 due to the global recession (Lee Bray, E., 2011b). The majority of bauxite mines are surface mines, and have relatively small land impacts compared to mining for other metals. Due to high bauxite concentrations in ore bodies, a typical square kilometer of mined land can produce 1 million tons of aluminum; consequently, it is estimated that only 30 square kilometers of land are mined annually for aluminum production (IAI, 2009, p. 1).

Bauxite Processing/Aluminum production

Processing bauxite for aluminum production (primary production) is a two-step process. First, bauxite must be refined to alumina by way of the Bayer Process. The Bayer Process consists of three main steps:

Digestion ? Bauxite + Caustic Soda + Heat and Pressure ? Aluminate liquor (Al(OH)4)

Precipitation ? Aluminate Liquor + hydrolysis ? Alumina Trihydrate (Al2O3.3H2O)

Calcination ? Alumina Trihydrate + Heat (1000-1200ºC) ?Alumina (Al2O3) + 3H2O

This is an energy intensive process requiring approximately 12 GJ/metric ton alumina produced, and approximately two to three metric tons of bauxite must be processed to produce one metric ton of alumina (Kontopoulos, A. et al., 1997, p. 1). In 2009, the U.S. Geological Survey lists thirty countries as alumina producers. Of these, the top seven producers (listed in descending order), China, Australia, Brazil, India, the United States, Russia, and Jamaica, accounted for approximately 83% (63 million metric tons) of total global alumina production (76 million metric tons) in 2009 (Lee Bray, E., 2011b). Figure 2 illustrates the global alumina production trends since 1999; note China's rise to top producer over the past 10 years, as well as the plateau in production over 2007 – 2009 due to the global recession (Lee Bray, E., 2011b).

Once bauxite has been refined to alumina, alumina must be smelted to produce aluminum. Smelting follows the Hall-Héroult Process, which is an even more energy intensive process than the Bayer Process and requires approximately 50 GJ/metric ton aluminum produced. Approximately two metric tons of bauxite must be processed to produce one metric ton of alumina (Alcoa). In 2010, the U.S. Geological Survey lists forty-six countries as alumina producers. Of these, the top seven producers (listed in descending order), China, Russia, Canada, Australia, the United States, Brazil, India, and Dubai, accounted for approximately 75% (31 million metric tons) of total global alumina production (40 million metric tons) in 2010 (Lee Bray, E., 2011b). Figure 3 illustrates the global aluminum production trends since 2000; again, note China's rise to top producer over the past 10 years, as well as the plateau in production over 2007 – 2009 and minor recovery in 2010 (Lee Bray, E., 2011c).

Figure 4 illustrates the price trend of primary production aluminum