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TO:  Ernesto  Zedillo,  Chair  of  Alcoa  Inc.

 Public  Issues  Committee  
CC:  Patricia  F.  Russo,  Lead  Director  of  Alcoa,  Inc  
CC:  Klaus  Kleinfeld,  Chair  and  CEO,  Alcoa  Inc.  
From:  A  loyal  shareholder  and  environmental  engineer,  Ryan  Kaplan,  EIT  
In  early  2015  Alcoa  announced  its  plans  to  spin  off  another  company  focused  on  value-­‐added  manufactured  
products,  while  maintaining  close  ties  with  the  original  primary  metals  company  Alcoa.  This  makes  good  
financial  sense  as  a  chance  to  start  with  a  clean  slate  for  higher-­‐rated  consumer  investment  status,  given  
the  expanding  market  uses  for  manufactured  aluminum  in  the  automotive,  aerospace  and  construction  
sectors.  It  also  makes  good  managerial  sense  given  many  differences  between  extraction-­‐refinement  and  
design-­‐manufacture.  Necessarily,  this  corporate  split  leaves  the  primary  metals  company  liable  for  past  and  
present  excavation  and  refinement  projects,  with  revenue  subject  to  the  volatility  inherent  in  that  sector,  
without  the  buffer  that  value-­‐added  manufactured  products  can  provide.    
Liabilities  with  respect  to  land  management,  reclamation  and  remediation,  and  materials  management  in  
general  are  serious  threats  that  can  be  turned  into  an  opportunities.  Alcoa  deals  in  the  most  common  metal  
in  the  Earth’s  crust,  and  naturally  this  is  a  competitive  market  with  high  volume,  high  overhead,  low  
margins,  and  large  swaths  of  land.  Aluminum  has  a  high  recycling  rate  and  it  can  easily  be  smelted  and  
reformed1  with  equal  quality  to  the  primary  metal.  This  recycled  source  is  also  competition,  but  it  could  be  
factored  into  a  longer-­‐term  business  strategy  to  use  existing  smelting  operations  to  produce  recycled  
aluminum  ingot  or  to  remanufacture  aluminum  from  recycled  materials.  Perhaps  this  other  liability  
involving  the  residue  from  mining  operations  can  become  a  longer-­‐term  business  strategy  as  well,  such  
that  raw  materials  can  also  be  value-­‐added  due  to  their  chemical  properties.  The  question  then  is  how  to  
leverage  existing  upstream  waste  materials  to  both  reduce  liability  and  add  value.  I  believe  that  Alcoa  can  
build  on  previous  commitments  to  sustainability  goals  to  meet  these  two  challenges,  and  ensure  a  more  
stable  future  for  this  company  with  a  strong  past.  
Alcoa  has  made  significant  progress  in  the  areas  of  water2  and  energy3  efficiency  toward  stated  goals,  and  
some  of  its  operations  are  achieving  impressive  landfilled  waste  diversion.  However,  efforts  surrounding  
bauxite  residue  reuse  and  storage  rehabilitation,  land  management,  and  biodiversity  are  lacking.  This  is  
evident  from  the  relatively  low  goals  set,  and  in  minimal  progress  toward  relevant  goals  as  stated  in  the  
2014  company  Sustainability  Report.  It  has  been  stated  in  publicly-­‐available  company  materials  that  the  
window  of  time  during  which  Alcoa  operates  on  a  given  section  of  land  to  extract  bauxite  is  tiny  relative  to  
the  endless  timeline  before  and  after,  a  point  that  serves  to  emphasize  the  importance  of  reducing  the  
operational  footprint,  rehabilitating  the  area  to  or  above  the  quality  preceding  operations,  eliminating  
other  landfilled  wastes  related  to  operations,  and  of  finding  more  productive  use  for  the  bauxite  residue.    
Charts  and  graphs  from  the  Alcoa  website  are  attached  in  Appendix  C.  During  only  one  recorded  year  
(2012)  has  Alcoa  remediated  more  land  than  was  disturbed.  The  biodiversity  action  plan  is  miserably  
behind  target;  34  locations  (17%  of  global  locations)  were  asked  to  created  biodiversity  action  plans,  with  a  
goal  of  completing  these  by  2015  and  only  1  location  plan  has  been  completed  so  far.  Alcoa  reports  that  8  
sites  are  within  or  adjacent  to  areas  that  are  protected  or  have  biodiversity  value  (Alcoa  land  page)4.    
The  company  has  set  a  laudable  goal  of  zero  landfilled  waste  by  2030  and  a  75%  reduction  to  99  thousand  
metric  tons  by  2020,  from  the  2005  benchmark.  The  2014  figure  was  304  thousand  metric  tons,  which  is  a  

1  (11/30/2015)  
2  (10/22/2015)  
3  (11/4/2015)  
4  (11/23/2015)  
23%  reduction  from  2005  levels.  Total  wastes  sold  or  recycled  have  slipped  since  2011,  but  are  still  an  
impressive  figure,  709  thousand  metric  tons.  Bauxite  residue  storage  efficiency  goal  of  15%  reduction  in  
area  required  per  mass  of  alumina  produced  from  2005  baseline  by  2020  has  already  been  met.  The  
Bauxite  residue  storage  efficiency  in  2005  was  67  square  meters  of  land  required  per  thousand  metric  tons  
of  alumina  produced;  the  2030  goal  is  47  square  meters.  However,  the  Bauxite  residue  storage  area  
rehabilitation  rate  (total  area  rehabilitated)  is  lagging,  and  perhaps  insufficient.  As  of  2014,  16  percent  of  
the  total  area  of  storage  has  been  rehabilitated,  whereas  the  goal  for  2020  is  30%  and  40%  by  2030.  
Compare  this  to  a  2005  baseline  of  13%  area  rehabilitated.  Finally,  most  integral  to  this  letter,  bauxite  
residue  reuse  goal  is  only  30%  by  2030,  and  0%  has  been  achieved  as  of  December  2014.  This  performance  
metric,  along  with  the  biodiversity  plans,  deserve  more  attention  from  Alcoa  leaders.  
Attached  to  this  document  is  a  systems  analysis  with  stock-­‐flow  diagram,  and  a  link  to  the  interactive  
diagram  online,  representing  the  flow  of  various  types  of  energy  and  materials  in  the  manufacture  of  
aluminum  from  raw  bauxite.  Most  emphasis  and  detail  is  placed  on  the  processing  of  bauxite  to  alumina,  
and  5  potential  end  uses  for  the  waste  product  bauxite  residue  are  shown.  In  the  remaining  of  this  letter,  I  
hope  to  drive  the  point  home  that  more  research  and  development  should  be  paid  to  these  end  uses  for  the  
bauxite  residue,  since  it  represents  on  the  order  of  3  times  the  volume  of  material  as  the  processed  
aluminum  derived  therefrom  (emissions5  and  climate6).  Bauxite  residue  can  be  used  as  a  construction  
material  for  sustainable  development  in  the  regions7  it  is  produced  by  Alcoa  –  Australia,  Brazil,  Guinea,  
Jamaica,  Saudi  Arabia  and  Suriname.  It  can  also  be  bioremediated  and  put  to  productive  use,  added  to  
abandoned  mine  tailings  to  neutralize  and  stabilize  the  pH  for  regrowth  of  land  cover,  used  as  a  building  
material  or  agricultural  soil  supplement,  used  for  carbon  capture,  or  simply  stabilized  in  permanent  pilings  
(which  is  current  common  practice  after  being  dewatered.  Potential  use  cases  are  shown  in  the  table  matrix  
below,  ranked  by  measures  including  feasibility,  sustainability,  goodwill,  marketability  and  profitability  in  
different  dimensions.  The  rankings  are  subjective  guesses,  explained  to  some  degree  in  the  list  succeeding  
the  table  matrix.  Each  use  case  will  have  its  own  tradeoffs,  which  are  too  particular  to  address  in  much  
detail.  In  general  a  lower  total  number  signals  a  more  preferred  alternative  in  the  table  below.    
Table  1.  Measure  and  ranking  of  use  case  alternatives  for  bauxite  residue  
Stable   Bioremediation   Abandoned  mine   Construction   Carbon  
Reference   Permanent   pile  &  productive   tailing  supplement   Materials   Capture  
Number   Measure   Ranking   Pilings  (SPP)   use  (BPP)   (AMTS)   (CM)   (CC)  
1   Feasibility   Ease  (easy  -­‐  hard)   1   2   4   3   4  
2   Feasibility   Timeline  (short  -­‐  long)   3   2   2   1   3  
Water  Quantity/Quality  
3   Sustainability   (less  -­‐  more)   2   2   0   0   0  
4   Sustainability   Energy  (less  -­‐  more)   1   1   3   2   2  
Carbon  Dioxide  
5   Sustainability   (reduce  -­‐  increase)   2   1   0   3   0  
6   Goodwill   Local  (less  -­‐  more)   3   1   2   0   2  
7   Marketability   Regional  (less  -­‐  more)   4   1   3   1   3  
8   Profitability   Global  (less  -­‐  more)   4   1   1   2   3  
Total   20   11   15   12   17  

From  the  table  matrix  of  alternative  use  cases  for  bauxite  residue,  we  see  that  the  preferred  ranking  by  
eight  measures  favors  bioremediation/productive  use,  construction  materials,  abandoned  mine  tailing  
supplement,  then  carbon  capture,  and  finally  stable  permanent  pilings.  The  following  list  briefly  explains  
the  reasoning  for  the  subjective  rankings.    
5  (11/21/15)  
6  (10/10/15)  
7  (12/8/15)  
List  of  explanations  for  rankings  in  bauxite  residue  use  case  alternatives    
1. Feasibility  by  ease  of  use:  SPP  is  easiest;  BPP  requires  microbiological  expertise;  AMTS  requires  
intergovernmental  coordination;  CM  may  require  chemical  adjustment  and  heat/pressure  treatment;  CC  
requires  chemical  expertise.  
2. Feasibility  by  timeline:  SPP  is  a  long  process;  BPP  stabilizes  faster  than  SPP;  AMTS  takes  effort  and  time  
to  coordinate;  CM  could  be  added  into  the  production  cycle  to  speed  up  bauxite  residue  use;  CC  would  
continue  for  the  length  of  a  production  cycle.  
3. Sustainability  of  water  quantity  and  quality:  SPP  leachate  is  a  concern;  BPP  requires  some  water  for  the  
microbiota  and  ground  cover;  AMTS  improves  water  quality  over  time;  some  CM  do  not  use  water;  CC  
makes  bauxite  residue  less  alkali,  improving  water  quality  of  leachate.  
4. Sustainability  of  energy:  SPP  and  BPP  require  mechanical  energy  to  move  material;  AMTS  requires  
significant  energy  to  move  material  large  distances;  CM  requires  mechanical  energy  and  heat,  but  likely  
would  not  travel  very  far;  CC  requires  energy  for  CO2  compression8,  and  a  little  for  pumping.  
5. Sustainability  of  Carbon  Dioxide:  SPP  is  somewhat  neutral,  but  not  well-­‐conducive  to  growth  of  ground  
cover  for  biological  carbon  sequestration;  BPP  improves  subsoil  conditions  to  enable  better  plant  
growth  and  carbon  sequestration;  AMTS  makes  subsoil  and  topsoil  viable  and  enables  reforestation  
especially  in  coal  mine  tailing  piles,  for  greater  biological  carbon  sequestration;  some  CM  uses  heat  
treatment,  and  involves  CO2  externalities  inherently  in  the  building  process;  CC  sequesters8  CO2.  
6. Goodwill  locally:  SPP  leaves  an  unnatural  geomorphology  and  takes  a  long  time;  BPP  makes  productive  
use  of  the  residue  possible  –  for  agriculture,  forest,  or  native  replanting;  AMTS  has  little  effect  locally,  
but  reduces  the  total  volume  of  residue  that  must  be  stored;  CM  potentially  offers  construction  materials  
for  sustainable  development  where  it  is  needed  –  bricks,  road  base,  cement  fill,  even  acidic  soil  
supplement;  CC  is  a  nice  gesture  locally,  but  relative  to  the  CO2  and  other  gas  effluent  has  little  effect.  
7. Regional  marketability:  SPP  is  a  liability;  if  BPP  can  be  mastered,  consultant  knowledge  can  be  marketed  
regionally;  there  may  be  some  AMTS  opportunities9  in  Australia  (supplied  by  Australian  bauxite  
residue)  and  Colombia  (near  bauxite  production  in  Jamaica,  Suriname  and  Brazil);  CM  could  be  sold  at  a  
low  price  point  near  its  source  and  join  into  existing  Alcoa  distribution  channels  to  find  market  share  
without  much  adjustment  to  business  practice;  analyzing  the  EIA  map9,  it  does  not  appear  that  bauxite  
residue  used  for  CC  at  the  source  would  be  difficult  to  market  regionally  given  the  relatively  low  
8. Global  profitability:  again  SPP  is  a  liability;  BPP  expertise  can  be  developed  into  a  potentially  very  
profitable  niche  consultant  business  for  remediation  of  mine  tailings  globally;  likewise  AMTS  could  be  
very  profitable  if  consultation  and  product  niche  is  found  through  significant  collaborative  effort  and  
creative  financing  with  land  remediation  future  productive  use;  CM  is  abundant,  and  potentially  
profitable  if  traction  can  be  found  in  the  market  near  the  source,  and  distributed  in  existing  channels;  CC  
has  some  low  potential  profitability  in  the  global  carbon  trading  market.  
The  Cradle  to  Cradle  framework,  coined  by  William  McDonough  and  Michael  Braungart,  conveniently  
separates  the  manufacturing  world  into  technical  and  biological  nutrients  that,  with  sufficiently  careful  
design  principles,  can  be  endlessly  recycled  or  “upcycled”.  As  Alcoa  knows  well,  pure  aluminum  can  be  
endlessly  recycled  at  much  lower  energy  cost  than  when  refined  from  bauxite.  Nature’s  wisdom  has  
developed  ecosystems  of  organisms  with  complimentary  metabolisms  that  mineralize  organic  materials  
and  make  productive  use  of  inorganic  ones.  This  idea  of  two  separate  nutrient  streams  quickly  falls  apart  
when  materials  are  traced  back  to  their  earthen  origins  as  in  the  case  of  primary  metal  extraction.  Here  
McDonough  might  say  we  have  a  “materials  in  the  wrong  place  problem.”  The  earthen  material  below  the  

root  zone  is  not  inert,  but  instead  teeming  with  microbiotic10  life,  hundreds  of  meters  in  depth.  For  this  
reason,  bauxite  (or  any  kind  of  ore  source)  cannot  neatly  be  put  into  either  category  of  “nutrient”.  Perhaps  
a  more  appropriate  framework,  then,  is  the  Natural  Step11.  There  are  just  four  “care  instructions”  for  a  
sustainable  planet  in  this  framework:  (1)  reduce  dependence  on  fossil  fuels  and  heavy  metals,  (2)  reduce  
persistent  synthetic  chemicals,  (3)  reduce  destruction  of  nature,  and  (4)  ensure  we  are  not  stopping  people  
globally  from  meeting  their  needs.  Each  of  these  tenets  apply  to  Alcoa,  but  the  first  and  third  are  the  most  
relevant  to  this  discussion.  Recycling  aluminum  achieves  both  aspects  of  the  first  tenet,  and  global  recycling  
rates  are  fairly  impressive,  which  lowers  the  aluminum  commodity  price  and  relieves  pressure  on  existing  
bauxite  mines  for  a  longer  future  reserve  life.  The  third  tenet  speaks  to  the  need  to  remediate  closed  mines,  
and  continue  with  initiatives  like  Alcoa’s  10  million  trees12  project.  Perhaps  the  fourth  tenet  can  apply  here  
too,  with  respect  to  productive  use  of  remediated  mines  and  bauxite  residue.  
Turning  bauxite  residue  from  a  liability  to  a  source  of  revenue  will  require  Alcoa  to  find  a  market  niche,  
work  with  stakeholders,  and  of  course  make  the  numbers  work,  and  there  must  also  be  an  intense  technical  
effort.  The  difference  in  bauxite  composition  from  source  to  source,  and  therefore  the  difference  in  its  
residue  chemical  composition  after  alumina  has  been  extracted,  presents  challenges  for  its  reuse.  
Particularly,  the  sodicity  and  alkalinity  of  bauxite  residue  complicate  its  manufacture  into  a  value  added  
product,  and  also  its  treatment  to  ensure  its  biogeochemical  stability.    
Caustic  chemicals,  water  and  heat  are  added  to  the  bauxite  material  before  alumina  can  be  removed,  a  
process  that  probably  kills  all  of  the  microbiota  in  the  bauxite  material,  and  likely  affects  its  geological  
stability  in  storage  as  well.  Bioremediation  can  help  expedite  the  process  of  returning  the  bauxite  residue  
into  a  more  natural  state.  
For  treatment  of  bauxite  residue,  Gräfe  and  Klauber13  have  suggested  in  situ  bioremediation  with  halophyte  
plants  and  alkaliphilic  microbes  in  conjunction  with  applied  gypsum,  drainage  strategies,  and  addition  of  
organic  waste,  sewage  sludge  and  macro  and  micro-­‐nutrients  to  promote  plant  and  microbe  survival.    
In  this  way,  bioremediation  can  be  achieved  well  within  the  lifetime  of  a  refinery  operation,  such  that  
closure  of  a  site  soon  after  an  end  to  operations  is  feasible,  with  the  surface  biogeochemistry  suitable  to  
restore  the  previous  ecosystem,  or  perhaps  to  sustain  farming  or  some  other  productive  use  for  the  
communities  nearby.    
With  these  advances  in  expertise,  Alcoa  can  truly  be  a  responsible  global  corporate  citizen  in  its  socio-­‐
environmental  workings,  to  add  value  and  eliminate  any  liability  with  respect  to  the  integrity  of  the  land,  
water,  and  biodiversity  where  it  operates.  And  with  this  in-­‐house  expertise,  Alcoa  can  become  a  world-­‐wide  
remediation  expert.  Other  mining  and  mineral  extraction  sectors  have  left  a  terrible  environmental  legacy  
with  abandoned  mines  and  acid  mine  drainage.  As  Alcoa  reorganizes  into  two  companies,  the  side  focused  
on  primary  metal  extraction  in  all  its  facets  will  need  to  develop  its  own  value-­‐added  strategies  including  
land  management  and  remediation.  This  is  important  because  primary  metals  may  likely  continue  to  fall  in  
price  as  a  commodity  in  the  short  and  medium  terms  since  recycling  (especially  of  secondary  aluminum)  is  
mainstream  and  takes  90%  less  energy  than  primary  production  to  refine  (EIA,  2014)14.  
Alcoa  has  already  shown  in  2010  in  a  pilot  project  with  the  Pennsylvania  Department  of  Environmental  
Protection  that  bauxite  residue  can  be  used  to  neutralize  coal  refuse  to  viably  seed  and  reclaim  land  in  
abandoned  mine  scenarios  (Alcoa,  2010)15.  These  kinds  of  projects  raise  a  very  exciting  prospect,  such  that  

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Alcoa  can  mitigate  its  CO2  emissions  by  making  forest  viable  on  otherwise  desolate  land,  while  supporting  
wildlife  and  eliminating  the  liability  of  some  bauxite  residue.  Enough  of  these  projects  could  feasibly  offset  
a  significant  portion  of  the  company’s  total  GHG  emissions.  Under  a  scheme  like  the  short-­‐lived  Australian  
Carbon  tax16,  there  was  virtually  no  incentive  to  reduce  CO2  emissions,  however,  one  can  reasonably  expect  
increased  public  pressure  in  the  future  to  reduce  emissions,  especially  after  the  climate  agreement17  in  
Carbon  sequestration  by  carbonation  with  flue  gas  from  on-­‐site  power  production  may  be  an  option  to  
adjust  the  pH  of  the  bauxite  residue,  and  mitigate  a  small  fraction  of  Alcoa’s  CO2  emissions.  Alcoa  reported  
40.4  total  million  of  metric  tons  of  emissions,  whereas  only  0.3  million  metric  tons  could  be  sequestered  if  
carbon  capture  with  bauxite  residue  were  implemented  across  all  three  Western  Australia  facilities  (Alcoa  
201418,  World  Aluminium  201419).  This  small  carbon  offset  is  part  of  the  reason  the  carbon  capture  
alternative  was  ranked  low  on  the  decision  matrix.  Bioremediation  and  reforestation  could  have  a  greater  
positive  carbon  benefit,  along  with  benefits  for  water  and  wildlife.  On  the  other  hand,  this  kind  of  carbon  
capture  does  reduce  the  alkalinity  of  bauxite  residue,  which  improves  groundwater  quality  in  the  stored  
Finally,  with  appropriate  chemical,  heat  and  pressure  treatment  it  should  be  profitable  to  produce  
construction  bricks  from  bauxite  residue.  This  could  be  particularly  useful  for  sustainable  development  in  
the  tropical  areas  (Brazil,  Guinea,  Jamaica,  Suriname)  where  Bauxite  is  mined,  and  could  be  more  
marketable  in  Australia  and  Saudi  Arabia  where  the  construction  industry  is  more  established.  Of  course,  
the  vast  majority  of  Alcoa’s  bauxite  is  mined  in  Western  Australia.    
Research  from  the  Bauxite  Institute  Suriname20  has  showed  that  construction-­‐grade  bricks21  could  be  
produced  from  bauxite  residue  with  a  very  low  firing  temperature  (converting  from  MPa  to  kg/cm2  and  
looking  at  the  wide  range  of  compressive  strength).  Then,  feasibly,  waste  heat  at  the  alumina  facilities  could  
be  used  to  fire  these  bricks.  Indeed,  bricks  are  cheap,  on  the  order  of  $0.30  each  in  wholesale.  As  a  thought  
experiment  I’m  using  pricing  and  dimensions  of  clay  bricks  from  an  Alibaba22  search.  Here  I’m  assuming  a  
bauxite  density  of  2,600  kg/m3  and  dimensions  of  230mm  X  102mm  X  75mm.  Then  the  approximate  
wholesale  price  for  manufactured  production  bricks  would  be  about  $65  per  metric  ton.  Compare  this  to  
the  reported  EBITDA  per  metric  ton  of  $95  for  alumina23  in  the  third  quarter  of  2015  (which  was  $49  lower  
in  third  quarter  2014);  at  the  time  the  alumina  exchange  prices  were  in  the  neighborhood  of  $280  per  
metric  ton24,  and  aluminum  exchange  prices  on  the  order  of  $700  per  metric  ton25.  So,  bricks  would  not  be  
a  high  value  product,  but  it  does  represent  an  opportunity  to  at  least  offset  some  of  the  cost  of  managing  
the  bauxite  residue.  It  is  worth  investigating  it  may  be  less  expensive  to  simply  produce  and  give  away  

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19­‐­‐_best_practice.pdf  (4/20/15)  
20  Residue  Application  Technology  -­‐  Richard  Verwey.pdf
21­‐crushing-­‐strength-­‐of-­‐bricks/  (10/30/15)  
0301en  (10/25/15)  
gain/  (12/24/15)  
bauxite  residue  bricks  than  to  build  permanent  stable  pilings.  Consider  that  Alcoa’s  remediation  reserve26  
stands  at  $538M  as  of  March  31,  2015,  with  $66M  in  current  liabilities.    
Other  than  amendment  to  coal  mine  tailings  to  improve  soil  fertility,  there  is  one  more  application  for  
bauxite  residue  worth  mentioning,  which  Alcoa  has  patented  for  agricultural  soil  amendment,  “Alkaloam.”27  
Efforts  for  regulatory  approval  and  project  administration  date  back  at  least  to  1993.  URS  conducted  a  
comprehensive  assessment  report  on  this  product  in  2009,  and  found  it  to  be  marketable  although  there  
are  some  concerns.  Levels  of  Arsenic,  Barium,  Cadmium,  Chromium,  Cobalt  and  Fluorine  are  above  Western  
Australia  criteria  for  review  in  the  worst-­‐case  scenario  of  samples.  However,  it  is  claimed  in  the  study  that  
leachate  tests  confirmed  that  soil  amended  with  Alkaloam  were  within  accepted  levels  for  all  metals  based  
on  water  quality  guidelines,  landfill  guidelines,  and  soil  investigation  levels.  Another  claim  is  that  at  the  
prescribed  application  rate  of  20  tonnes  per  hectare,  there  is  no  anticipation  of  detrimental  effect  on  
salinity  of  groundwater,  surface  water  or  surrounding  watercourses.  Also,  the  study  claims  that  there  was  
no  significant  plant  uptake  of  heavy  metals  and  radionuclides.  In  addition  to  increasing  pH,  the  product  can  
slightly  improve  water  holding  capacity  in  the  soil,  increase  in  fertilizer  efficiency,  significantly  aid  in  
phosphorus  retention,  increase  plant  growth.  Despite  these  benefits  backed  with  scientific  studies  
following  regulatory  guidelines,  there  has  been  considerable  trouble  overcoming  regulatory  hurdles  to  
come  to  market.  The  study  cites  another  author,  Neville  (2004)  who  uses  a  capital  cost  figure  including  
cartage  and  spreading  of  just  $14  per  tonne,  which  in  turn  had  been  cited  elsewhere.  More  troubling  cost-­‐
wise  for  Alcoa  is  the  minimal  benefit  that  Alcoa  would  receive  from  reduced  bauxite  residue  storage  and  
capping  costs,  which  the  URS  study  assumes  to  be  just  1.5%  of  the  residue  production  (6.6  million  tonnes  
over  a  25  year  period  in  Western  Australia  facilities).  In  fact,  much  more  value  would  be  provided  in  
avoided  cost  for  the  application  studied  in  the  Peel-­‐Harvey  catchment  based  on  reduced  phosphate  
fertilizer,  increased  agricultural  production,  and  reduction  in  phosphorus  loading  in  the  waterway  
resulting  in  algae  blooms  and  fish  kills.  It  is  also  worth  noting  that  this  value  proposition  may  increase  in  
the  future  as  the  world  reserves  of  rock  phosphorus  continue  to  diminish,  and  farmers  of  tropical  acidic  
soils  seek  solutions  to  improve  yields.  See  Attachment  D  for  the  NPV  from  the  URS  study.  
In  conclusion,  Alcoa  faces  a  challenge  with  its  bauxite  residue  that  represents  a  long-­‐term  liability,  
complicates  its  biodiversity  and  land  management  goals,  and  manifests  in  opportunity  costs.  For  every  1  kg  
of  finished  aluminum,  there  is  almost  3  kg  of  this  substance  with  properties  of  alkalinity,  sodicity,  and  
concentrations  of  trace  metals  that  make  it  troublesome  in  huge  volumes  and  a  magnet  for  regulators  in  
applications  involving  people,  animals  or  food.  Alternatives  to  the  current  best  practice  of  stable  permanent  
pilings  have  been  identified  and  evaluated  in  preferred  order,  through  a  ranking  by  eight  measures,  to  be:  
bioremediation/productive  use,  construction  materials,  abandoned  mine  tailing  supplement,  then  carbon  
capture.  The  current  best  practice  is  the  least  preferred  alternative.  The  term  “construction  materials”  
throughout  this  document  has  grown  to  include  bricks  and  agricultural  soil  amendment.  Alcoa  currently  
uses  its  bauxite  residue  as  construction  backfill  and  road  base,  and  given  the  large  volumes  required  for  
these  applications,  the  appeal  to  reduce  storage  cost  is  understandable.  I  have  advocated  for  more  
productive  use  of  this  material  –  to  make  bricks,  to  bioremediate  the  residue  to  support  plant  cover  and  
reforestation,  as  a  soil  amendment  to  increase  farm  productivity  and  reduce  phosphorus  runoff,  to  
remediate  coal  mine  tailings  for  reforestation.  Perhaps  the  questions  Alcoa  management  should  be  asking  
are  more  holistic,  about  their  sustainability  goals  and  how  they  relate  to  governmental  and  NGO  
sustainability  goals,  how  to  present  and  frame  information  like  the  URS  report,  in  an  exemplary  triple  
bottom  line  format  that  adds  value  and  reduces  costs  for  all  involved.  I  look  forward  with  cautious  
optimism  to  see  how  the  Alcoa  restructuring  will  approach  these  management  challenges  to  transform  
liabilities  into  assets  and  create  added  value  by  sharing  values.    

26­‐Q_1Q2015.pdf  (9/8/15)  
General  References  for  Background  Information:  
Alcoa  emissions  reporting  (11/21/15)  
Alcoa  energy  reporting  (11/4/15)    
Alcoa  engaging  with  the  community  long-­‐term,  bauxite  residue  management  in  Australia,  2006  (10/17/15)  
Alcoa  financials  2015­‐Q_1Q2015.pdf  (9/8/15)  
Alcoa  list  of  vision  targets  by  category  (9/21/15)  

Acid  mine  remediation  case  study  (10/17/15)  
Alcoa  mining  operations/bauxite  interests  (12/8/15)  
Alcoa  mining  rehabilitation  page  (10/31/15)    
Alcoa  on  Land  Stewardship:  (10/31/15)  
Alcoa  Remediation  reserve  stands  at  $538M  as  of  March  31,  2015,  with  $66M  in  current  liabilities.­‐2015/note/commitmentsandcontingenciesdisclosuretextblock­‐Q_1Q2015.pdf  (9/8/15)  
Alcoa  Suriname  operations
riname    (10/18/15)  
Alcoa  Sustainability  at  a  Glance  2014­‐pdfs/2015/8244c3d9e1d1c0b5302ec452ed2be97b.pdf    
Alcoa  water  reporting    (10/22/15)  
Aluminum  Smelting  (11/30/16)  
Bauxite  Residue  (9/22/15)  
“Bauxite  Residue  Application  Technology  from  initiative  to  pilot  project  extraordinary  lecture  25th  anniversary”  from  
Bauxite  Institute  Suriname  at  Anton  de  Kom  University­‐%20Richard%20Verwey.pdf    
Bauxite  residue  management­‐­‐residue-­‐management.html  (12/8/15)  

Bauxite  residue  management  
Bauxite  residue  management  -­‐  See  carbon  capture  case  study,  p.  16­‐­‐_best_practice.pdf        
Chemistry  of  Seawater  Neutralization  of  Bauxite  Refinery  Residues  (Red  Mud)      
Comparison  of  Physical  Properties  between  Treated  and  Untreated  Bauxite  Residue  Mud­‐1561%282007%2919%3A1%282%29      
Original  Bauxite  Systems  Diagram  by  Ryan  Kaplan­‐from-­‐Bauxite    
Possibilities  of  Exploitation  of  Bauxite  Residue  from  Alumina  Production­‐wm/32748.pdf        
Recycling  is  the  primary  energy  efficiency  technology  for  aluminum  and  steel  manufacturing        
Rehabilitation  project  with  native  grasses  in  Indiana    (10/17/15)  
Suriname  CIA  facts­‐world-­‐factbook/geos/ns.html  (11/4/15)  
Ten  Million  Trees:  (9/13/15)      
Appendix  A:  Systems  Analysis  
Please  see  the  systems  stock-­‐flow  diagram  (attached,  original  work)28  for  context,  as  it  is  referenced  
throughout  the  following  passage,  which  describes  the  boundaries  of  analysis  and  some  leverage  points.  
The  primary  reason  for  this  systems  diagram  is  to  show  the  movement  of  material  and  energy  and  bring  
attention  to  the  bauxite  residue  and  potential  productive  uses  for  this  material.  To  put  into  perspective  the  
amount  of  effort  and  energy  that  goes  into  production  of  the  aluminum  from  raw  bauxite,  the  entire  
production  process  is  shown.  By  showing  this  comprehensively,  I  should  hope  that  the  shareholders  and  
management  of  Alcoa  will  consider  that  with  only  a  little  more  effort  and  energy,  productive  use  of  the  
waste  bauxite  residue  can  be  had,  and  turned  from  a  liability  into  an  asset  and  goodwill  for  the  
communities  in  which  Alcoa  operates.  This  extra  effort  would  also  position  Alcoa  as  an  even  more  
advanced  leader  in  applied  geochemistry,  and  carve  out  a  new  niche  in  the  mining  industry.  
This  assessment  considers  only  the  inputs  and  outputs  of  primary  production  of  aluminum;  post-­‐consumer  
recycled  aluminum  is  not  considered  here.  From  a  generic  fuel  source,  energy  flows  from  mechanical,  
electrical,  productive  and  low-­‐grade  (waste)  heat  are  shown.  Mechanical  energy  is  a  catch-­‐all  term  for  
movement  of  all  sorts;  in  order  not  to  further  crowd  the  systems  diagram,  flows  of  mechanical  energy  is  not  
made  explicit  at  every  juncture  in  the  process.  Material  flows  are  shown  from  the  bauxite  source  and  
separation  of  topsoil  and  overburden,  through  chemical  inputs  and  refining  of  alumina  and  electrolytic  
transformation  to  aluminum  and  then  advanced  manufacture  of  aluminum.  No  distribution  of  product  is  
shown  beyond  the  manufacture  of  primary  aluminum.  The  advanced  manufacture  of  aluminum  is  over-­‐
simplified,  because  this  aspect  of  the  business  is  beyond  the  scope  of  analysis  here.  
It  should  be  well  illustrated  that  there  are  opportunities  to  leverage  the  massive  flows  of  solid  materials,  
energy,  chemicals,  water  and  gases  to  increase  efficiency,  and  penetrate  new  markets  with  vertically  
integrated  systems.  
Leverage  points:  
• Heat  exchangers  to  increase  energy  efficiency  
• Exit  points  where  material  flow  creates  solid  wastes  (bauxite  residues)  
o An  opportunity  to  flow  into  another  production  stream  for  construction  or  agriculture  
• Topsoil  removal  and  storage    
o Opportunity  to  add  groundcover,  increase  longevity  of  soil  microbes,  earn  profit  from  crop  
• Massive  bauxite  residue  storage  pilings  can  be  bioremediated  to  support  groundcover  
o Can  be  returned  to  original  forest  and  offset  carbon  footprint  
o Can  be  put  to  productive  use  for  other  revenue  stream  
o Could  require  dry  sewage  amendments,  available  cheap  or  free  from  municipality  
• Water  vapor  can  be  captured  
• Carbon  capture  possible  to  reduce  small  fraction  of  carbon  footprint    
o Also  changes  chemistry  (lowering  pH)  of  bauxite  residue  for  other  uses  
• Massive  land  area  of  bauxite  residue  pilings  
o A  large  solar  array  opportunity  to  export  to  grid  or  use  on  site  
o A  large  opportunity  to  plant  more  trees  (10  million  trees  initiative)  
• Every  water  flow  is  an  opportunity  for  incremental  increase  in  efficiency  and  quality  

Stock  Flow  Diagram:  Raw  Bauxite  to  Manufactured  Aluminum;  Emphasis  on  Land  Stewardship  and  Added  Value  from  Waste  Materials  

Legend:  Energy  Flow,  Material  Flow  (raw),  Material  Flow  (processed),  Electricity  Flow,  Heat  Flow,  Waste  Heat,  Liquor  Flow,  Chemical  Flow,  Gas  Flow,  Water  Flow  
Appendix  B:  Review  of  Four-­‐Part  Bauxite  Residue  Issues  Study  
In  their  four-­‐part  scientific  review  the  bauxite  residue  issues,  Gräfe  and  Klauber  discuss  the  scale  of  the  
problem  (2.7  billion  metric  tons  as  of  2007,  growing  by  120  million  metric  tons  annually)  and  the  
complexities  from  chemical  and  physical  properties  of  residues  that  may  possess  only  generic  similarities  
and  differ  by  source.  They  discuss  the  primary  reasons  for  inaction  on  residue  use:  volume,  performance,  
cost  and  risk.  This  byproduct  is  more  a  liability  than  another  industrial  feedstock  due  to  its  sodicity,  
alkalinity,  the  presence  of  other  heavy  metals  and  low  levels  of  naturally  occurring  radioactive  material.  
The  high  alkalinity  is  a  primary  reason  for  classification  as  a  hazardous  material,  and  when  combined  with  
the  sodic  content,  the  main  reason  the  residue  will  not  support  plant  life.  The  alkalinity  cannot  be  removed  
simply  by  washing  with  water  due  to  the  presence  of  Bayer  process  characteristic  solids  such  as  
hydroxides,  carbonates,  aluminates  and  aluminosilicates  that  are  formed  by  the  action  of  the  caustic  soda  
on  bauxite.  Also,  the  physical  consistency  is  affected  by  the  chemistry,  which  in  turn  limits  its  usefulness  for  
other  industrial  processes.  Bulk  density,  sedimentation  rates  and  compaction,  hydraulic  conductivity,  
drying  rates  and  dusting  behavior,  and  physical  strength  after  drying  are  all  affected  by  the  chemistry.  
Understanding  the  relationship  between  pH,  surface  charge,  neutralization,  and  the  underlying  mineralogy  
will  lend  itself  to  modeling  and  predicting,  and  planning  the  best  uses  for  bauxite  residue.  The  final  part  in  
the  review  focuses  on  in  situ  bioremediation  by  use  of  halophyte  plants  and  alkaliphilic  microbes  in  
conjunction  with  applied  gypsum,  drainage  strategies,  and  addition  of  organic  waste,  sewage  sludge  and  
macro  and  micro-­‐nutrients  to  promote  plant  and  microbe  survival.  In  this  way,  bioremediation  can  be  
achieved  well  within  the  lifetime  of  a  refinery  operation,  such  that  closure  of  a  site  soon  after  an  end  to  
operations,  with  the  surface  biogeochemistry  suitable  to  sustain  the  previous  ecosystem,  or  perhaps  
farming  or  some  other  useful  purpose  for  the  communities  nearby.  
Bauxite  residue  issues  (I-­‐IV)  by  Gräfe  and  Klauber  
I.  Options  for  residue  utilization29  
II.  Current  management,  disposal  and  storage  practices30  
III.  Alkalinity  and  associated  chemistry31  
IV.  Old  obstacles  and  new  pathways  for  in  situ  residue  bioremediation32  

Appendix  C:  Alcoa  reported  sustainability  progress  graphs  

Appendix  D:  Excerpt  from  URS  report33  of  Alkaloam  assessment  at  Peel-­‐Harvey  Catchment  

Bauxite Residue (Alkaloam®) Sustainability Assessment

5 Benefits of Using Alkaloam®

Table 5-2 Net value of Alkaloam® use in Peel-Harvey catchment ($m NPV)

Net Value of Alkaloam® in Peel-Harvey catchment NPV ($ m)

Value to agriculture
Agricultural production increase 59.6
Phosphate fertiliser cost reduction 31.9
Alkaloam® application costs -52.5


Environmental benefits
Reduction in Peel-Harvey Inlet P load 23.8
Agency monitoring & response costs 0.2


Stockpile cost saving
Operational costs residue storage 0.0
Capital cost residue storage 5.7
Capping cost residue storage 1.1
Alkaloam® supply costs 0.0
R&D and Monitoring costs -0.9


Net effect (million $) 68.9

Sensitivity of the net value to farmer adoption rate and the budgeted discount rate is shown in Table
5-3. A positive net return is indicated with adoption rates as low as 20 per cent by area of suitable soils
in the Peel-Harvey Catchment, and over the discount rates indicated.

Table 5-3 Net value of Alkaloam® sensitivity: maximum adoption rate and discount rate ($m NPV)

Discount rate

4% 6% 8% 10% 12%

20% 35 27 21 17 14
Maximum 30% 53 41 32 26 21
adoption of
40% 71 55 43 35 28
(% by area) 50% 89 69 54 43 35

60% 107 83 65 52 42

Sensitivity of the net value result to farmer adoption-rate levels and agricultural productivity increases
is shown in Table 5-4. Break even returns are indicated with adoption rates at 20 per cent by area of
suitable soils in the Peel-Harvey catchment, and with a ten per cent productivity increase.

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Bauxite Residue (Alkaloam®) Sustainability Assessment

5 Benefits of Using Alkaloam®

Table 5-4 Net value of Alkaloam® sensitivity: maximum adoption rate and productivity increase ($m

Productivity increase

10% 15% 20% 25% 30%

20% 1 14 27 41 55
Maximum 30% 2 21 41 62 83
adoption of
40% 3 28 55 83 111
(% by area) 50% 4 36 69 103 139

60% 5 43 83 124 167

5.2.2 Value to agriculture
Benefits to farmers in the Peel-Harvey catchment were shown to be positive, given the following

• applying Alkaloam® to low PRI soils at 20 tonnes per hectare every five years;
• maximum adoption of 50 per cent of the low PRI soil area;
• 20 per cent improvement in agricultural productivity;
• a 50 per cent reduction of phosphate fertiliser costs; and
• Alkaloam® application costs of $16.25 per tonne.
The net value to agriculture was estimated at $38.9 million over 25 years, comprising:
• $59.5m increase in the net value of agricultural production;
• $31.9m reduction in the cost of phosphate fertilisers; and
• $52.5m in Alkaloam® application costs.
The benefit: cost ratio of agricultural values was estimated at 1.75, with an internal rate of return of 59
per cent. These numbers suggest a strong financial incentive for farmers to use Alkaloam® on their
low PRI or sandy soils. These returns exclude any additional environmental advantages to the
community, and any liming effect benefits.
The sensitivity of the net agricultural value result was tested by varying application cost and
productivity increases, as shown in Table 5-5. The result is shown to be sensitive to both parameters.
The adoption of Alkaloam® will be contingent on strong financial incentives generated by productivity
increases. This financial incentive will be based on at least a 20 per cent productivity increase and the
maintenance of application costs at budgeted levels around $15-16 per tonne in the paddock. Any
decline in productivity gain or increase in application cost will result in little incentive for farmers to use
the product.

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