New Day leadership, D’Addario and Robb, speak on alumina and bauxite issues on opening day of Fastmarkets’ International Aluminium conference

New Day leadership, D’Addario and Robb, speak on alumina and bauxite issues on opening day of Fastmarkets’ International Aluminium conference - New Day leadership, D’Addario and Robb

US needs strategic bauxite, alumina stockpile

The United States needs to protect its entire aluminium supply chain and should introduce a national strategic stockpile of bauxite and alumina, according to the chairman and chief executive officer of New Day Aluminum.

Potential disruptions to the supply chain - including due to global disasters, pandemics, wars or disruptions to producing assets - add to the need to ensure the domestic production of aluminium, David D'Addario said.

"We talk a lot about tariffs and how to protect aluminium, but we don't ever really talk about the supply chain, which is - you need bauxite and alumina to get to the aluminium.

We feel pretty strongly that we need a strategic national stockpile of bauxite and alumina because that is really the thing that will protect the United States," he told delegates at the Fastmarkets International Aluminium conference.

"Back in the President [Ronald) Reagan administration [1981- 1989), the United States actually had a strategic stockpile. I think that's something we really need to look at as a country, because that's the only way we can ensure we continue to make the aluminium that we need - the high-quality, high-purity aluminium we need for so many applications," he said.

New Day is the parent company of Noranda Alumina, Noranda Bauxite and Niche Industrial Chemicals. It bought the Gramercy refinery and the St Ann mine in Jamaica in October 2016 as part of the bankruptcy proceedings for Noranda Aluminum Holding Corp.

During an interview on the bauxite and alumina day of the Fastmarkets conference, D'Addario noted that Noranda Bauxite is the only bauxite producer in Jamaica permitted to take bauxite off-island to third parties and to its own refinery, the last remaining alumina refinery in the US.

"When these assets were built years ago by Kaiser before they became Noranda, they decided to do it that way. All the other facilities in Jamaica have to mine the bauxite there; turn it into alumina, which is a higher value-add product; and then ship it off island," he said.

"We have three ships that are constantly in rotation, 60,000-deadweight-tonne ships that are bringing the bauxite into our Gramercy refinery in the New Orleans area. We're really excited about our partnership with the government [of Jamaica], the quality of the reserves and the proximity that we have because bauxite is not coffee beans, pineapples or bananas; it doesn't grow bock, so sooner or later it's going to get more and more scarce, and having that much that close to the US is really key," he added.

According to D'Addario, the company has invested a totaI of $125 million in growth capital into the business over the past four years since its acquisition, including in sustainability projects.

The company recently signed a letter of intent with Cemtech Materials Corp to supply it with bauxite residue for use in the cement production process - a deal that will have an environmentally beneficial impact.

The company is also in the process of entering into some agreements to re-purpose its Jamaican bauxite residue, with some 40-50 million tonnes of the material having accumulated at Gramercy over decades. The residue is "extremely rich in rare earths and other minerals," according to D'Addario.

"We're getting very close on some interesting technology that would 100% recycle that material, and recover not only the elements that you would imagine would be in there like iron, alumina and other things like that from the process, but would also recover more than a dozen rare earth chemicals and materials, which as you know are greatly needed in the United States right now because of its dependence on China and elsewhere for those materials," he said.

"We wouldn't have to do any blasting or mining, because it's sitting right there in settling basins ready to be processed," D'Addario added.

Fastmarket’s benchmark alumina index, fob Australia was 4269.92 per tonne on Friday September 18, down by 5.1% from a five-month high of $284.32 per tonne on August 21.

ANDREA HOTTER

Alumina mart sees 'calmer waters': Noranda

Global alumina prices are expected to be rangebound over the next quarter unless there are significant changes to the supply and demand picture, Noranda chief operating officer Thomas Robb said.

Speaking at Fastmarkets' International Aluminium Conference on Monday September 21, Robb said: "It feels like the market is somewhat rangebound because of the supply and demand dynamics we're seeing out there.”

"Until one of those legs moves significantly different than the other one, you've got calmer waters.

"Fastmarkets' benchmark alumina index, fob Australia stood at $272.71 per tonne on September 21 and has been between $269 and $280 per tonne throughout the whole of September.

There was some market expectation that a supply disruption at Hydro's Alunorte refinery in Brazil in August would push prices higher again-but despite a slight rise, no huge spike materialized.

Fastmarkets' alumina index, fob Australia rose by 7% to a five-month high of $284.32 per tonne on August 21 after Hydro announced the disruption from $264.66 per tonne on August 17, but the price increase was far less than an 87% surge following a previous Alunorte production cut.

Robb said this is due to the uncertain demand picture in the alumina market.

"I think broadly it has to do with confidence, I think until there is some certainty that starts to flow though on the demand side and that picks up again you wouldn't expect there to be any significant move up in price," Robb said.

"Until we get some more certainty over the next couple of quarters none of us know what really is going to happen so we're in a period that is a bit 'squishy'," he added.

Hydro announced on August 18 that it had halted the 244-kilometer pipeline transporting bauxite from its Paragominas bauxite mine to the Alunorte alumina refinery in Barcarena, Brazil, for extended maintenance.

Production at the mine stopped as a result, and reduced Alunorte's alumina output to 35-45% of capacity.

Previously Alunorte was at reduced capacity for over a year due to a production embargo. At that time, benchmark alumina price spiked to a record high of $707.75 per tonne. This time, prices do not react so dramatically.

John Thuestad, executive vice president of bauxite and alumina at Norsk Hydro agreed this was due to the demand picture, and the current oversupply picture.

Fastmarkets aluminium analyst Cao Yang estimated a surplus of 3.725 million tonnes in the global alumina market in 2020.

"During the Alunorte embargo, we had another big event with the [Rusal] sanctions and I think we also had a tighter market situation - the supply side was not as robust as today," Thuestad said. "I think today with Covid-19 and a more balanced or even an oversupply situation, this change is more marginal relative to the overall alumina situation - this is why we saw this adjustment but not a major hike.

"Hydro said that operations are expected to resume within two months, which means it is due to ramp capacity back up around October18.

Thuestad told the conference that things are going as planned and they are on-track to finish on time.

"The two-month timeline is still correct," he said.

ALICE MASON, HUI LI

New Day eyeing investments in Europe: CEO

New Day Aluminum is evaluating investment opportunities in the aluminium and specialty chemicals businesses in Europe, the company's chairman and chief executive officer said.

During an interview on the bauxite and alumina day at Fastmarkets' International Aluminium conference, David D'Addario said that New Day has relocated chief operating officer Tom Robb to London to be in charge of the process.

"We are involved in three or four processes in Europe right now, and we see more opportunity there in the future. So we'll look around the globe, but probably mostly in Europe, and Tom will be on top of that along with his day job," D'Addario told delegates.

"There are a lot of assets in play, both in our direct industry [aluminium] and then on the fringes in the chemical-grade alumina [CGA) and chemicals business," he added. "We're looking at everything, from directly in the aluminium industry to around the edges, which we consider to be specialty chemicals.”

New Day is the parent company of Noranda Alumina, Noranda Bauxite and Niche Industrial Chemicals. It bought the Gramercy refinery and the St Ann mine in Jamaica in October 2016 as part of the bankruptcy proceedings for Noranda Aluminum Holding Corp.

The company enjoys "running toward fires," D'Addario said, which it sees as opportunities to use its experience and connections in and around the industry to acquire assets, whether tired and failing or operating well.

Such opportunities have arisen, in part, due to the Covid-19 pandemic, he noted.

"You have to manage your quality, safety, customers and supply… But we also look at this as a time in which we can take advantage of when maybe some other people didn't manage their cash properly, or didn't have enough liquidity in their business, or maybe they weren't paying as much attention, and we think there are some opportunities there," D'Addario told Fastmarkets during the interview.

"Again, you never want to prey on someone's misfortune, but there are opportunities that will arise and people will - for various reasons - want to get rid of assets," he added.

Gramercy is the sole remaining alumina refinery in the United States.

Fastmarket’s benchmark alumina index, fob Australia was 4269.92 per tonne on Friday September 18, down by 5.1% from a five-month high of $284.32 per tonne on August 21.

ANDREA HOTTER

New Day steps up chemical-grade alumina output

New Day Aluminum has increased its production of chemical-grade alumina and is gearing up to make additional investments in the specialty chemicals business, particularly in Europe, the company's chairman and chief executive officer said.

New Day had already invested around $30 million in its own chemical grade alumina (CGA) business, which had traditionally been looked at as something of a "stepchild" by the aluminium industry, David D'Addario told Fastmarkets in an interview.

"That side of the business typically was a sort of a stepchild - [refineries would say] 'when a smelter has a potline that's down or when there's a problem, then I'll go ahead and sell you (CGA customers] this product, but I wasn't really in that business,'" he told delegates during the keynote interview for the bauxite and alumina day at the Fastmarkets International Aluminium conference on Monday September 21.

"We decided to say to [the CGA) people, 'Listen, we'll sign long-term contracts with you and we'll supply you, but we want you to know we're really in this business - we're investing money in this business, we're buying new equipment, we're expanding our facility,'" D'Addario added.

CGA is used in everything from ftame retardants, catalysts, water treatment and building materials to ceramics, abrasives, flooring and specialty refractories. Those customers are seeking surety of quality supply in the delivery form they require, he said.

"We like that business, we're looking at other businesses within that industry both in the United States and in Europe, so stay tuned - hopefully there will be more news on that front," D'Addario added.

New Day is the parent company of NorandaAlumina, Noranda Bauxite and Niche Industrial Chemicals It bought the Gramercy refinery and the St Ann mine in Jamaica in October 2016 as part of the bankruptcy proceedings for Noranda Aluminum Holding Corp.

The company has moved its Gramercy alumina refinery in Louisiana from around 15-20% CGA production compared to smelter-grade alumina (SGA), to closer to an even-split between The two products, D'Addario said.

"We've really changed the way we look at an alumina refinery, especially in the United States. So, we're about 50-50 between SGA and CGA. Traditionally aluminium was integrated, but we don't quite look at our business that way," he said.

"We look at the SGA business as very integral - it's obviously very important to our customer [Century Aluminum], which has a major facility in the United States, so we're really supportive of them.

But we also wanted to diversify away from SGA, and that was one of the insights that we had when we looked at Noranda initially," D'Addario added.

The company has a deal to supply SGA to Century Aluminum's Sebree and Hawesville smelters, both in the US state of Kentucky, through 2024.

Fastmarkets' benchmark alumina index, fob Australia was at $269.92 per tonne on September 18, down by 5.1% from a five-month high of $284.32 per tonne on August 21.

Meanwhile, Fastmarkets' fortnightly alumina, white fused, 25kg bags, cif Europe price was €530-700 ($625-826) per tonne on September 17, up by 1.2% from €525-690 per tonne

New Day is principally owned by the partners of Florida, United States-based investment and management company DADA Holdings.

ANDREA HOTTE

https://www.metalbulletin.com/Article/3951890/Search-results/INTERVIEW-New-Day-eyeing-investment-opportunities-in-Europe-CEO-says.html

https://www.metalbulletin.com/Article/3951888/Search-results/INTERVIEW-US-needs-strategic-bauxite-alumina-stockpile---New-Day-boss.html

https://www.metalbulletin.com/Article/3951877/Search-results/INTL-AL-CONF---INTERVIEW-New-Day-steps-up-chemical-grade-alumina-output-CEO-says.html

Contact: Communications@NewDayAl.com