3.5.1 Structure and economic contribution
The Non Ferrous Metal (NFM) sector primarily consist of upstream base metal production (aluminium, copper, lead, zinc, tin) and precious metal production (silver, gold, palladium, other platinum group metals). The downstream activity includes secondary processing and fabrication activities of light metals (semi-finished products of aluminium, magnesium, titanium, zinc, etc.) and other non-ferrous metals (heavy metal, precious metal and die casting). The NFM sector had an annual turnover of over EUR 118bn in 2012. The largest economic contributions are delivered by 2 classes: Aluminium production (NACE C24.42) and copper production (NACE 24.44), contributing to approximately 70% and 64% of annual turnover and value added of NFM sector respectively in 2012. Key economic indicators for the chemicals and pharmaceutical sector are summarised in Table 3.47.
Table 3.47 Key economic indicators on sector division and group level for EU 28 for 2012
Description
NACE (Group)
NACE (Class)
Number of enterprises
[n]
No. of persons employed
[n]
Turnover [mil EUR]
Value added [mil EUR]
Producti on value [mil EUR]
Manufacture of basic precious and other non- ferrous metals
C24.4 3,600 199,617 118,271 15,000 168,216
Precious metal production - C24.4 1
738 8,762 11,045 960 10,590
Aluminium production - C24.4 2
1,510 97,598 40,222 6,019 38,632
Lead, zinc and tin production
- C24.4 3
243 15,559 8,016 1,346 7,750
97 Description
NACE (Group)
NACE (Class)
Number of enterprises
[n]
No. of persons employed
[n]
Turnover [mil EUR]
Value added [mil EUR]
Producti on value [mil EUR]
Copper production - C24.4
4
368 33,676 42,114 3,560 38,682
Other non-ferrous metal production
- C24.4 5
713 13,337 8,381 1,444 7,805
Processing of nuclear fuel - C24.4 6
N/A N/A N/A N/A N/A
Casting of metals C24.5 6,200 250,568 38,965 11,341 38,446
Casting of light metals - C24.5 3
2,038 82,644 12,841 3,951 12,731
Casting of non-ferrous - C24.5 4
1,672 28,368 6,176 1,396 6,095
Source: EUROSTAT, accessed on Dec 2014
3.5.2 Key products
Non Ferrous Metals (NFM) are non-magnetic and generally more resistant to corrosion than ferrous metals; several NFM are also good conductors of electricity. There are three key groups that make up the NFM industry, these primarily include:
■ Base metals (aluminium, copper, zinc, lead, nickel, tin) => NACE 24.42 – 24.44
■ Precious metals (silver, gold, palladium, other platinum group metals) => NACE 24.41
■ Minor metals including refractory metals (e.g. tungsten, molybdenum, tantalum, niobium, chromium) and specialty metals (e.g. cobalt, germanium, indium, tellurium, antimony, gallium) => NAC 24.45
The NFM sector also involves the following casting activities:
■ Casting of light metals (semi-finished products of aluminium, magnesium, titanium, zinc, etc.)
■ Casting of other non-ferrous metals (heavy metal, precious metal, die casting) 3.5.2.1 Aluminium product scope
Alumina (also known as aluminium oxide) is produced from bauxite ore which is the primary source of aluminium. Alumina is extracted from bauxite ore through the Bayer99 chemical process, which takes the form of white powder. Alumina is the main raw material for primary production of aluminium through the smelting process. In addition to production of aluminium, alumina is also used as filler for plastic, production of automotive paint. A large scale of alumina is also used in refineries for conversion of dangerous hydrogen sulphide into elemental sulphur [The Aluminum Association]. The European Aluminium Association (EAA) recorded a total of 12 plants within Europe producing alumina in 2011.
Primary Aluminium is produced through smelting (or reduction) plants, where pure aluminium is extracted from alumina through the Hall-Héroult electrolysis process100, whereby the reduction of alumina into liquid aluminium is operated at >950 °C under a high intensity electrical current. For this reason many aluminium production plants are located near to
99 The Bayer process is the primary chemical process of extracting alumina from bauxite ore, which was developed in 1887 and still used in nearly all of the world’s alumina supply
100 The Hall-Héroult process involves dissolving alumina into a molten cryolite bath and passing current through the mixture causing the oxygen atoms to separate from the alumina and resulting in aluminium.
98
dedicated, low cost, hydropower supplies to avoid energy losses (examples are Fort William in Scotland, Karmoy in Norway, Krasnoyarsk in Russia) – the layout and shape of the ‘busbars’
that carry the current is an important factor in reducing energy losses. EAA recorded a total of 31 plants within Europe in producing aluminium through the primary process and approximately 50% of aluminium produced within EU are produced through primary smelters in 2011.
Secondary Aluminium is produced from re-melting aluminium material recovered from waste streams and recycling process. The collected material is fed into a melting furnace operating at temperatures ranging from 700 – 760 °C. EAA recorded a total of 283 plants within Europe producing aluminium through secondary process in 2011 and approximately 50% of aluminium produced within EU are produced through the secondary smelters in 2011.
Processing of aluminium are downstream activities of converting primary and secondary aluminium into final products. Processing of molten aluminium or semi-finished aluminium product can be categorised into the following key processes:
Casting is the most widely used method of forming aluminium into final products within EU.
Molten aluminium is shaped to the desired forms through the casting process. The resulting product could be an intermediate product (ingots, billets, etc.) for further processing or it could also take form of finished product. EAA recorded >2400 casting plants operating within EU delivering approximately 27% of the total output of aluminium processing in 2011.
Extrusion is a deformation process in which solid aluminium (billets or ingots) is forced through a die opening through a forced compression. The solid aluminium feedstock are typically preheated to facilitate the deformation process. EAA recorded 55 extrusion plants operating within EU delivering approximately 25% of the total output of aluminium processing in 2011.
Rolling involves passing aluminium between 2 rollers under pressure resulting in thinner and longer form, which is the basic process of producing aluminium plate, sheets or foil. Aluminium ingots are preheated and fed into the rolling mill, whereby the slab is rolled until the desired thickness is achieved. Optional heat treatments are also applied at this stage to improve the final product’s strength. EAA recorded 55 rolling plants operating within EU delivering approximately 38% of the total output of aluminium processing in 2011.
3.5.2.2 Copper product scope
Blister is an intermediate copper product containing 98.5 – 99.5% copper. Copper ore and concentrates go through a roasting process prior to being fed into a smelter resulting in a copper matte, containing 50 – 70% copper. The molten matte then follows a conversion process to produce blister copper.
Copper anode is a product of the copper refining process containing around 99% pure copper.
Blister copper is fire refined (anode furnace) through traditional process route, and progressively re-melted and cast into anodes for electro-refining.
Copper Cathode is a result of the electro-refining process and contains 99.99% pure copper.
An electrolytic cell is used and consists of a cast copper anode and a cathode, made out of pure copper to act as a starter sheet, placed in an electrolyte that contains copper sulphate and sulphuric acid. High current density is applied through the solution and pure copper is deposited on the cathode.
99 3.5.3 Key sector processes
3.5.3.1 Aluminium production
Figure 3.45 provides an overview of the primary and secondary aluminium production process.
Refining of bauxite (Bayer’s process). Bauxite ore is crushed and dissolved in hot sodium hydroxide. The iron and other oxides are removed (as insoluble ‘red mud’). The solution is then precipitated and goes through a calcination101 process to produce a dry white powder, alumina.
Anode manufacturing. All commercial manufacturing of aluminium utilizes a carbon anode in the smelting (Hall-Héroult) process as it results in much lower energy Consumption. The carbon is consumed during the electrolytic process therefore a constant supply is required for the smelting process. Carbon anodes are produced by heating up of coke or tar pitch.
Smelting (Hall-Héroult process). The Hall-Héroult process is the primary process for commercial aluminium production. The process takes place in an electrolytic cell or pot, consisting of two electrodes, anode and cathode. Alumina is dissolved into a cryolite bath and serves as an electrolyte for the process. High amounts of current is passed through the molten bath and which reduces alumina to form liquid aluminium at the bottom of the cell or pot.
Secondary aluminium production involves using recovered or recycled aluminium from waste streams as raw material to produce aluminium. Secondary aluminium production uses far less energy than primary aluminium production process due to the lower heating temperature. The process starts with sorting and pre-treatment of the scrap feedstock according to their quality and characteristics. Various furnace types are available for the melting process, including reverbatory, induction furnaces and emerging technologies such as rotary arc and plasma furnaces. The choice of furnace would depend on the characteristics of the scrap feedstock.
101 Calcination is an oxidation process by exposure to intense heat
100 Figure 3.45 Overview of primary and secondary aluminium production
3.5.3.2 Copper production
Figure 3.46 provides an overview of the key processes in primary and secondary copper production.
There are 2 main routes in production of copper; the pyro-metallurgical or hydro-metallurgical route. Approximately 80% of primary copper is produced through pyrometallurgy process and the remaining 20% with hydro-metallurgy process. The hydro-metallurgical route is particularly suitable for ores which are difficult to concentrate by conventional means and does not contain precious metal.
Pyrometallurgy. Copper concentrate are dried, typically from 7 – 8% moisture to 0.2% before being fed into the smelting furnace. The drying and smelting process typically carried out simultaneously in a single furnace to produce melt that can be separated into matte (copper sulphide typically containing 60 – 65% copper) and a slag rich in iron and silica. The matte produced in the smelting furnace is then grinded before being fed into the conversion process.
The conversion process converts matte into blister copper (typically 98.5% copper) by oxidising the copper sulphide with an air/oxygen mixture. The blister copper then goes through a fire refining process, i.e. fed into an anode furnace where sulphur is oxidised in a short oxidation period and finally cast into anodes. The cast anodes are then placed into an electrolyte bath which separate other metals to produce copper cathode.
Refining of bauxite (Bayer’s
process)
Alumina Bauxite ore from
mining activities
Molten aluminium
Smelting of alumina (Hall-Héroult
process)
Rolling Aluminium plate, sheets and foil
Finished extruded products
Finished cast products (not included in energy metrics) Scrap and waste
aluminium Pre-treatment Melting
furnace Refining
Carbon Anode production
Coke, tar pitch Carbon anode
Primary
Secondary
Downstream processing
Extrusion
Casting
101 Figure 3.46 Overview of primary and secondary copper production (source: ECI)
Hydro-metallurgy. The hydro-metallurgical process is carried out with much lower temperatures, therefore eliminating the production of sulphur dioxide emission, but produces effluent which must be treated. Crushed ores are mixed with a leaching solution, typically sulphuric acid, which dissolves the copper and leaves a residue of precious metals. The leach solution then undergoes a purification process to remove dissolved iron and other impurities and concentrating of copper in smaller volumes by the solvent extraction process. The stripped solution, containing mainly copper sulphate, is then sent to the electro-winning stage. Electro- winning consists of the recovery of copper metal from the stripped solution (electrolyte) in a unique electro-winning cell. As current is passed, copper is then deposited at the cathode forming copper cathode.
Smelting
Converting
Fire refining
Electrolytic refining
Melting / Alloying
Extrusion
Leaching
Solvent extraction
Electro-winning
Hot rolling
Drawing Cold rolling
Copper matte
Blister copper
Anode copper
Cathode copper
Pyromet allurg y Hydr o -metall ur gy
Semi-fabricated products
Scrap Copper concentrate
from mining activity Ore feed
Wire Tube Sheet / strip
102
Secondary copper is produced through pyro-metallurgical process. Production of secondary copper depends heavily on the copper content of secondary raw material and its size distribution. It follows a similar process as of production of primary copper in removing impurities and copper recovery.
3.5.4 Energy metrics
3.5.4.1 Energy intensity based on sector energy cost
Table 3.48 provides an indication of the sector’s energy intensity for selected EU Member States expressed in 2 ratios102 from 2008 - 2012. Based on the 5 year trend of the energy intensity ratios, it has remained flat, consistent with the longer term intensity trend discussed in Section 3.5.5. The NFM sector ranks 4th most energy intensive sector in comparison with the 8 industrial sectors evaluated in this Study in terms of energy cost spent per value added generated.
Table 3.48 Energy cost intensity ratios per unit of VA and Turnover generated for selected MS *
Ratio 2008 2009 2010 2011 2012
1 Energy cost/ Value Added
24% 26% 20% 23% 23%
2 Energy cost/
Turnover
4% 5% 3% 3% 3%
Source: ICF analysis on EUROSTAT SBS, accessed Dec 2014
* Note: Data covers Belgium, Bulgaria, Germany, Greece, Spain, France, Italy, Hungary, Austria, Portugal, Slovakia, Sweden and UK
3.5.4.2 Energy intensity of key processes
Table 3.49 provides a breakdown of energy intensity for the various processes of aluminium production whereby the figures are expressed in per metric tonne of aluminium produced at the respective processes.
Table 3.49 Energy intensity of aluminium production processes
Process Thermal
[GJ / tonne]
Electricity [GJ / tonne]
Primary aluminium
Refining of bauxite (Bayer’s process) Digesting
Calcine kiln
12.1 6.5
1.4
Carbon anode production 1.0 0.21
Smelting process (Hall-Héroult process) - 49.0
Secondary aluminium 3 – 9 -
Aluminium processing
Primary ingot casting 2.8 0.8
Secondary ingot casting 7.2 0.45
Cold rolling 1.0 1.3
Hot rolling 1.3 0.9
102 (1) Ratio of energy cost per unit of value added and (2) Ratio of energy cost per unit of turnover, i.e. the monetary value paid by manufacturers on energy products for every unit of value added or turnover generated by the sector.
103
Process Thermal
[GJ / tonne]
Electricity [GJ / tonne]
Extrusion 4.0 0.4
Other shape casting 9.2 0
Source: Worrell et. al, 2008
Based on 2009 statistics from EAA, the EU produced 8.27 million tonnes of aluminium metal, of which 4.75 million tonnes were produced by primary smelters and the remaining 3.52 million tonnes were produced by secondary refiners and re-melters. In consideration of the thermal and electrical energy consumption reported (for production of alumina, primary aluminium, secondary aluminium, rolling and extruded products), the weighted average energy intensity for EU’s aluminium production is 23,037kWh/t (0.198 TOE/kt), whereby 14,399 kWh (63%) is attributed to electrical energy and 8,638kWh/t (37%) is attributed to thermal energy. Table 3.50 provides a breakdown of EU’s final energy consumption for the aluminium industry.
Table 3.50 EU energy consumption for aluminium production Product
Output [kt]
% of total output
Electrical Energy [GWh]
Thermal Energy [GWh]
Total Energy [GWh]
% of total energy
Alumina 4,748 26% - 13,734 13,734 13%
Primary 4,091 22% 61,590 16,759 78,349 76%
Rolling 3,514 19% 1,850 2,090 3,940 4%
Extrusion 2,394 13% 1,904 1,946 3,850 4%
Recycling 3,520 19% - 3,412 3,412 3%
Total 18,267 100% 65,344 37,941 103,285
Source: ICF analysis on EAA 2010 Sustainability Report
3.5.4.3 EU final energy consumption for non-ferrous metals chemical and pharmaceutical production
Figure 3.47 presents the average fuel mix for EU chemical and pharmaceutical plants in 2012.
Figure 3.47 Fuel mix profile for EU chemical and pharmaceutical sector
Gas 32%
Electricity 56%
Solid fuel 5%
TPP 4%
Other 3%
104 3.5.4.4 Energy end use profile
Based on the estimated share of energy consumption amongst the NFM sector, and the fuel mix profiles, the following figures present an aggregate energy use profile for the primary energy sources, including electricity, natural gas, total petroleum products (i.e., oil), coal, and other categories.103
Figure 3.48 Electricity use profile
Source: ICF International
Figure 3.49 Natural gas use profile
Source: ICF International
103 Based on ICF energy efficiency studies within the NFM sector Furnaces/
kilns/ ovens/
dryers 69%
Other Motors
6% HVAC
5%
Pumps 5%
Process Specific
5%
Fans/Blowers 4%
Compressed Air (Utilities)
3%
Lighting 2%
Other 1%
Electricity
Furnaces/
kilns/ ovens/
dryers 77%
HVAC 22%
Steam boilers and steam
systems 1%
Natural Gas
105 Figure 3.50 Total petroleum product (e.g., oil) use profile
Source: ICF International Figure 3.51 Coal use profile
Source: ICF International
Figure 3.52 Energy use profile for other sources; i.e., biomass
Source: ICF International
Other 99%
Process Specific
1%
TPP
Furnaces/
kilns/ ovens/
dryers 100%
Coal
Furnaces/
kilns/ ovens/
dryers 100%
Other
106 3.5.5 Projection of energy consumption trend
The following details are an extracted summary of the sector profile in Annex 1.
The NFM industry is mature and technologically advanced with a skilled labour force with the ability to produce high quality products. NFM producers provide vital inputs for high-tech industries and are therefore considered to be of great economic importance for emerging technologies. The EU NFM sector is technologically is at forefront in many sub-sectors and segments; particularly in higher value added (e.g. precious metals) and high quality tailor made products. Therefore this provides an important incentive for many companies to retain their production capacity and R&D activities in the EU. The EU has strong value chain integration which has contributed greatly to the strength of the sector. The most demanding consumers of NFM, in terms of quality and specialised material needs are based in the EU. As such, EU NFM producers have worked with clients (in manufacturing, aerospace and transport sectors) and developed the ability to produce tailored, high quality and technologically advanced solutions. The strong integrated value chain has also allowed scrap metals to enter the value chain during the refining and processing stages, significantly reducing energy and resource use to benefit the environment and enhance competitiveness. The EU recycling industry is one of the most advanced in the world, even compared to industries in developed countries such as the US, Canada and Japan.
On the other hand, primary metal producers in the EU will be at risk of closing down if there is not an improvement in power market conditions; since current electricity prices reduce EU producer margins to an unsustainable level. EU is also facing growing threats from extra EU countries. Although EU has high recycling rate of scrap metals, growing competition from low labour cost countries (for the sorting of scrap metal using labour intensive methods) is driving scrap handlers to export unprocessed scrap rather than sort it in the EU as this may be a more profitable route. As such, this would lead to the loss of scrap for EU producers to countries that have lower recovery rates and lower environmental and labour standards.
Figure 3.53 provides a historic EU production trend (excluding Norway) for aluminium and copper from 1999 – 2012. The EU’s production has been relatively flat throughout this period (apart from a dip in primary aluminium production during the recession) despite an increase of 50% in EU GDP. The EU is also heavily reliant on NFM import. Environmental regulations in the EU have added pressure on the NFM industry both in terms of regulatory compliance and increased energy costs. The EU ETS in particular has a significant impact because it increases direct production costs compared to producers outside of the EU. Additionally, the industry also faces indirect CO2 costs due to increased electricity prices (as the power sector passes on its ETS costs) as well as cost burdens related to self-generation. Smelting from primary raw material in the NFM industry is extremely energy intensive. For example approximately 15 MWh are needed to produce one tonne of aluminium and 4 MWh are required for one tonne of copper. Electricity costs represent a third of total production costs for the EU primary aluminium industry, making it a key factor impacting the competitiveness of the sector. On the balance of the above factors, it is expected that the trade deficit will continue to increase as the economy grows and production as a whole will continue to stagnate with no increased production capacity due to the lack of evidence in new investment within the sector and expansion of upstream production of NFM is likely to occur outside of EU.