Recycling

A pure bonus
Roland Scharf-Bergmann
Head of Recycling

(1)
• 1 Recycling

• 2 Market Outlook

• 3 Recycling in Hydro
• 1 Recycling

• 2 Market Outlook

• 3 Recycling in Hydro
Recycling – a pure bonus
Utilizing aluminium as an energy bank

5%
of initial energy
to recycle

75%
still in use

(4)
Aluminium recycling, a viable business

High rates of recycling

RECYCLING GLOSSARY
• 95% Transport
Pre-consumer scrap
• 95% Buildings process scrap generated before the product‘s use phase
• 55% Packaging (64% Cans)
Post-consumer scrap
product scrap from used products at end of product life

Long lifetime for aluminium in use Primary aluminium

• 15-20 years for vehicles aluminium generated from bauxite ore, via alumina refining and electrolysis

• 40-50 years for buildings Recycled aluminium

aluminium generated from scrap sources

Remelter
recycling plant producing extrusion and rolling ingot

Refiner
recycling plant producing foundry alloys

(5)
3 types of scrap are created in the regional aluminium flow
Post-consumed (PCS), fabrication scrap and clean process scrap (CPS)

Primary production Trade

Casthouse shapes Semis Final product End-of-life product

Trade (primary and remelt) trade trade trade
Al₂O₃
Bauxite

Primary shapes
(EI,SI,PFA,WR,IN)

Casthouse Semis Final Total consumed

shapes Shipments products products in use

Remelt shapes Clean

End-of-life
(EI,SI,SFA) process PCS
scrap products
Fabrication
scrap

Melt loss Unable to collect

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Various scrap sorting techniques & technologies
Shredding
• Cutting scrap in
pieces without
separating various
metals
• Taking out some easy
parts before
shredding e.g.
Wheels and engines
from cars is usual
• The shredded metal
can then go on to be
sold as shredded
scrap or be treated by
sorting techniques to
increase its value
Source: Improving aluminum recycling: A survey of sorting and impurity removal technologies (Gabrielle Gaustad et. Al.)
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Steel, Fe
Magnetic &
Eddy current
• Magnets separating
ferrous and non-
ferrous metal scrap
• Heavy metals like
steel and iron is
sorted out
• Used extensively for
Secondary production
• Eddy Current: Rotor
with magnets to throw
scrap at different
distances in relation
to their eddy current
• Utilizing the different
conductivities of
various metals
Plastics, foam
Air seperation
• Using air to separate
scrap streams
• Also called
windsifting, air-knives,
elutriation, winnowing
and air columns
• Conveyor belt system
with air flows pushing
away light weight
materials like e.g.
plastics
• This technique could
result in loss of light
and small aluminium
scrap such as UBC
scrap
Mg, Cu, Zn, Pb Wrought vs Casting Metals & alloys Metals & alloys
Sink float Hot crush Color sorting Spectroscopy
• Separates scrap in • Thermal-mechanical • Hand sorting based • X-ray, neutron flux or
various baths with separation method on different colors of pulse laser detectors
various specific metals. Can also sort scan the metal (must
gravities • Successfully wrought vs. casting be free of lubricants,
separates wrought alloys paint and coating)
• Possible to sort based and casting alloys by
on the various metal’s looking at the eutectic • Only possible with • The metal returns
density, but also temp. as castings has low labor costs. 99% various emissions when
based on alloy (Scrap a lower melting temp accuracy estimated hit by the detector
will sink or float based (because of higher Si for China source. The differing
on density) content) emissions are read and
• Can also be done by forms the basis for the
• Separating heavy and • First warm, then a computer, can sort scrap sorting
light materials from crush to separate by alloy when using
the wrought and whether the metal etching chemicals • The system can then
casting aluminium breaks or not making alloys stand direct the piece of scrap
scrap out in color to an appropriate bin
• 96% effective in using a mechanical arm
separating the scrap • Environmental and or air flow
economic barrier
• Recently possible at
high speeds
• 1 Recycling

• 2 Market

• 3 Recycling in Hydro
Europe is the world leader in recycling

• 10,5 million mt recycling production in 2014.

• An increase of 6,1% from the year before,
• Primary production in Europe fell by 3,0%
 There are more than 220 plants in 24 countries in Europe

3%
5%
7%
29%
7%

7%

11%
15%

7% 9%

Germany Italy France

UK Eastern Europe Austria/Switzerland
Scandinavia BeNeLux Spain/Portugal
Other Countries

Source: EEA
89% of scrap is used in Europe (EU27+EFTA)
11% of the scrap generated in Europe in 2014 was exported

Use of scrap
11%
19%

17%

~7 million mt

53%

Scrap consumption in Europe Pre consumer casting alloys Post consumed casting alloys
European scrap exports Pre consumer wrought alloys Post consumed wrought alloys

Source: EAA
Advanced modelling reveals long term supply growth

Old Scrap Collected (Europe)

6.0
5.5
Aluminium in million tonnes
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
2010 2015 2020 2025 2030

Rolling Extrusion Casting

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Available post-consumed scrap expected to increase.
China as main source of old scrap generation growth

GARC: Global old scrap to scrap market (Before trade and remelt loss) CAGR:
38 Figures in million tonnes (mio.t)
Other
36 Region 10-15 15-20 20-25 25-30
Other
34 Producing
Other
+5% Countries 7% 6% 5% 4%
32 (Residual)
Other Asia
30 Other Producing
Countries
-1 % 2% 2% 2%
28
North America
26
Other Asia 6% 7% 7% 7%
24 Middle East
+5%
22 South America
North America 3% 2% 1% 3%
20 Japan
+5%
18 Middle East 8% 8% 6% 6%
Europe
16
14 South America 6% 5% 4% 4%
12 +5%
10
Japan 2% 1% 2% 2%

8
China Europe 4% 3% 2% 2%
6
4
China 12 % 11 % 10 % 8%
2
0
1990 1995 2000 2005 2010 2015 2020 2025 2030

Source: IAI

(13)
Current scrap trade levels not sustainable due to shrinking Chinese imports
Declining US exports as an effect of this

China scrap import US scrap export

Figures in kt Figures in kt

3 000 -5% 3 000

2 500 2 500
-2%

2 000 +26% Others 2 000

+17%
Malaysia Others
1 500 1 500
Canada
Australia
Mexico
Korea
1 000 Hong Kong 1 000

500 500 China

USA

0 0
2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014
Source: UN COMTRADE: 7602 Aluminium waste and scrap

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Scrap and alloy prices principally follow LME
Time-lags for scrap may cause imbalances

Price development in € 2013 - April 2015

€ 2,500

€ 2,300

€ 2,100

€ 1,900

€ 1,700

€ 1,500

€ 1,300

€ 1,100

€ 900

€ 700
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN Feb Mar Apr
2013 2014 2015

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

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• 1 Recycling

• 2 Market (UBC)

• 3 Recycling in Hydro
UBC scrap market in Europe

280 kmt of UBC are collected in Europe from a variety

of collection systems based on EAA figures.

Deposit based

Kerbside collection
Bring system

Residual Waste Sorting

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Volumes from different collection systems

Added value from sorting

Cleanliness of scrap
Residual Waste Kerbside
Deposit
Sorting collection Bring system
based system
(RWS) separated

Waste treatment 60 kmt (22%)

Sorting facility Sorting facility
plant

Annual volumes: 44 kmt (15%) 77 kmt (28%) 96 kmt (35%)

Hydro
Non-ferrous UBC
Export metal
concentrate processing
line
Metal
Downgrading
treatment plant

Competitors
Estimated annual volume based on EAA data

More than 80% of European UBC come from return systems

with elevated levels of mix up and contamination.

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• 1 Recycling

• 2 Market Outlook

• 3 Recycling in Hydro
The industry’s most ambitious climate strategy: Carbon-neutral by 2020
Supported by the three pillars of Hydro’s technology strategy

Energy and
primary production
Reduce emissions,
increase efficiency

Aluminium in use
Maximize user-
phase benefits

‘End-of-life’
Increase recycling,
back to the loop

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Hydro’s recycling facilities
Holmestrand, Norway
• 2014 production: 47,000 tonnes
Karmøy, Norway WMR, Dormagen, Germany
• 2014 production, 23,000 tonnes • 2014 production: 30,000 tonnes

Deeside, UK
• 2014 production: 51,000 tonnes Neuss (Alunorf), Germany
• 2014 production: 347, 000 tonnes
Rackwitz, Germany
Texas and Kentucky, USA • 2014 production: 87,000 tonnes
• Commerce, 2014 production: 104,000 tonnes Hamburg, Germany
• Henderson, 2014 production: 79,000 tonnes • 2014 production: 104,000 tonnes
Neuss (Rheinwerk), Germany
• 2014 production: 87,000 tonnes

Lucé, France
• 2014 production: 52,000 tonnes

Clervaux, Luxembourg
• 2014 production: 90,000 tonnes
Azuqueca, Spain
• 2014 production: 75,000 tonnes
Cisterna di Latina, Italy
• 2014 production: 44,000 tonnes

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Hydro has developed leading scrap capabilities the last years

Key elements in scrap procurement and handling

Hydro leading in state-of-the-art scrap
Material Flow Analysis
Scrap availability modelling based on dynamic stock analyses and growth scenarios flow model development

Scrap Receival & Sampling Best practice sharing across plants on

Best practices for receival and sampling, supplier evaluation, chemistry and recovery database scrap receival and sampling

Tools
Hydro in-house developed tools are
System optimization Charge optimization differentiating elements
Scrap portal
long term on batch level

Technology
Leading competence
Scrap processing: Furnace concept: in furnace operation
Continuous
Shredding, magn. Cont. feeding,
delacquering Significant scrap processing competence
& EC separation, submerged melting,
& hot transfer
X-ray sorting electromagn. stirring built last years
Our Recycling Strategy – in short

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

Enablers Increased Strategic Objectives

• Access to processing capacity for post • Better (improved margins)
used of post
consumed and difficult scrap • Bigger (increased capacity utilization)
• Increased sales of Recycling Friendly consumed • Greener (Recycling/RFA)
Alloys (RFA) scrap

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

Alt 4: Hydro investing in own processor

source collector recycler extruder
processing capabilities (by recycler)

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Flow-sheet post-consumed scrap recycling
Mixed End of Life
scrap

fines shredder bunker

ferrous metals magnetic separator decoating kiln

screen
sieve fines
(size split approx 40mm)

plastics,
eddy current separator melting furnace
minerals

heavy metals casting furnace

x-ray sorter
cast alloys

plastics,
eddy current separator DC casting
organics

billet / sheet ingot

Strengthening of recycling position through UBC* recycling line

Establishing strong recycling position

• Fulfilling customer needs and strengthening beverage

can market position
• € 45 million investment
• Start of production end 2015
• Contribution towards 2020 carbon neutrality target

* UBC: Used beverage can

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UBC shredder unit
Overview

Shredding the cans for optimal sorting

• contamination such as "plastic widgets" in special
beer cans must be exposed by the shredding
(Guinness / bitter beer)

Shredding the cans for optimal delacquering

• both sides of the aluminium can (inside / outside)
must be open
• target grain size: 50mm

Technical challenge
• scrap composition
• shape and density of scrap bales and packages

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Bale braker and hammer mill

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Sorting line, furnace and delaquering

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Acquisition of WMR Recycling GmbH
Superior patented shredding & sorting technology

Two-stage scrap processing

Step 1:
• Scrap shear
• Hammer mill
• Magnetic & eddie-current-sorting, sieving
• Particle size 150 – 250 mm
Step 2:
• 2 parallel cutting mills
• X-ray transmission sorting
• eddie-current-sorting, sieving
• Particle size 30 – 80 mm
Throughput (extrusion & sheet scrap)
• 12 t/h input
• Particle weight 15 – 40 g
• Sorting of 1,000 particles per second

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