.'. t*.o< J* yj^r?*:^ >_ •. o. »bv" -^^0* q,. •iv,-' jP 'V*'*:^'' ,.&<■' v^'i'^ V*^'^'^f° v^ /. :. -^^o^ • • * V • o > -O^ o • • • . ^C >5, *' r77» A .,V . :, '^^0^ o, 0'' r- ^^ A?- .*^Va^ \ j^ ♦^^ai^'. ^^ ^<' ' /. V .^-^ •*^Sifei'- t*. ^^ /. ^Cp^^ v<^^ .* **' ** ^^ *'VVi« .A .^*\.-.>^ 5°^ ".» .^^-^K. V °-^. ^^o^ : %» ^^-^K V "*.^<"' • ,. v<^ •' **'% -•.^•' /\ '•^•' **'\ '•.^•- /■% ••^•\ **" o > ;. "^O^ b V" .'' '. '^0^ 4^ 0° >^^ ' i)"^ .I*"- v^ ..Li:'* ^. ^"^^ ^^^n r. ^^d« wj^. ^«'^^'\ '-^w*' 'i'^^'''^ '-SK*' 4*^^%. ""^w*" '4^^'^ ■'•^IK** ^^^'^ ^•."•^-0*^:7 <>.. ♦• IC 8917 Bureau of Mines Information Circular/1983 Aluminum Availability-Market Economy Countries A Minerals Availability Program Appraisal By G. R. Peterson and S. J. Arbelbide UNITED STATES DEPARTMENT OF THE INTERIOR Information Circular 8917 Aluminum Availability-Market Economy Countries A Minerals Availability Program Appraisal By G. R. Peterson and S. J. Arbelbide UNITED STATES DEPARTMENT OF THE INTERIOR James G. Watt, Secretary BUREAU OF MINES Robert C. Norton, Director iff h?^^ This publication lias been cataloged as follows: Library of Congress Cataloging in Publication Data Peterson, Gary R., 1948- Aluminum availability-market economy countries. (Information circular /Bureau of Mines ; 8917 ) Includes bibliographical references. Supt. of Docs. no. : I 28.27; 8917 1. Aluminum. 2. Bauxite. I. Arbelbide, S.J. (Sylvia J.) II. Title. III. Series: Information circular (United States. Bureau of Mines) ; 8917 -TN49a^5P48 W82- 553.4'926 82-600327 cr ^ PREFACE vs The Bureau of Mines Minerals Availability Program is assessing the worldwide ^ availability of nonfuel minerals. It identifies, collects, compiles, and evaluates information T> on active and developing mines, explored deposits, and mineral processing plants ^ worldwide. Objectives are to classify domestic and foreign resources, to identify by cost ~~^ evaluation resources that are reserves, and to prepare analyses of mineral availabilities. -^ This report is part of a continuing series of reports that analyze the availability of minerals Vj from domestic and foreign sources and factors affecting availability. Questions about the Minerals Availability Program should be addressed to Chief, Division of Minerals Availability, Bureau of Mines, 2401 E St., NW., Washington, D.C. 20241. -~Q CONTENTS Page Preface i Abstract 1 Introduction 2 Acknowledgments 3 The world aluminum industry 3 Importance of secondary (scrap) recovery to the industry 5 Demand for aluminum 5 The impact of OPEC and the formation of the IBA . . 6 Identification and selection of bauxite deposits 6 Bauxite mining and processing 10 General 10 Mining 10 Bayer process for alumina production from bauxite . 10 The Hall-Heroult process 10 Costs of aluminum production 11 Mine and mill capital costs 11 Mine and mill operating costs 11 Australia 12 Brazil 12 Guinea 12 Guyana 13 Jamaica 13 Levies, royalties, and transportation 13 Cost elements of alumina refining 14 Capital costs 14 Operating costs 15 Page Raw materials 15 Energy requirements 16 Labor costs 16 Transportation 16 Cost elements of alumina smelting 16 Capital costs 16 Operating costs 17 Raw materials 17 Labor 17 Energy costs 17 Resource-availability curves 20 Availability of aluminum from world bauxite resources 20 General 20 Potential total aluminum production 21 The Caribbean 22 Latin America 22 Europe 22 Asia 22 Oceania 22 Africa 23 Potential annual aluminum production 23 Conclusions 24 References 25 Appendix A. — Tables 26 Appendix B. — Geology of selected deposits in major bauxite-producing regions 30 ILLUSTRATIONS 1 . Flowchart of the MAS evaluation procedure 2 2. Reserve-base and inferred reserve-base classification categories 6 3. Total potential aluminum production from bauxite resources in market economy countries 21 4. Total potential aluminum production from Caribbean bauxite 22 5. Total potential aluminum production from Latin American bauxite 22 6. Total potential aluminum production from European bauxite 22 7. Total potential aluminum production from Asian bauxite 22 8. Total potential aluminum production from bauxite in Oceania 23 9. Total potential aluminum production from African bauxite 23 10. Potential annual aluminum production from bauxite resources in market economy countries at various cost levels including a 1 5-pct DCFROR 23 TABLES 1 . World bauxite production 4 2. U.S. imports of crude and dried bauxite 4 3. World alumina production 4 4. U.S. imports of alumina 4 5. World primary alumina production 5 6. Bauxite resource information for market economy countries 7 7. Bauxite property information, January 1 980 8 8. Bauxite levies and royalties in the main bauxite-producing countries 13 9. Selected bauxite shipping costs 14 1 0. Operating costs of bauxite production 14 1 1 . Typical alumina refinery capital costs 15 12. Estimated refinery operating costs for processing Caribbean bauxite in the United States 15 13. Estimated refinery operating costs for processing West African bauxite in the United States 15 14. Estimated refinery operating costs for processing West African bauxite in Western Europe 16 15. Estimated refinery operating costs for processing Australian bauxite in Australia 16 16. Freight rates for shipment of alumina on principal international routes in 1980 17 17. Capital costs of typical aluminum smelters for cost model 17 18. Estimated operating costs for smelting aluminum in the United States 18 19. Estimated operating costs for smelting aluminum in Western Europe 18 20. Estimated operating costs for smelting aluminum in Japan 18 IV Page 21 . Estimated operating costs for smelting aluminum in Australia 18 22. Electric power prices at selected aluminum smelters, 1980 19 23. Average operating costs of producing aluminum operations 19 24. Estimated average operating costs of nonproducing (potential) aluminum operations 19 25. Potential aluminum production and average total costs for producing and nonproducing operations in market economy countries 21 A-1 . Assumed location of refineries and smelters for the study 26 A-2. Capital costs of alumina refineries 28 A-3. Capital costs of aluminum smelters , 29 A-4. Deposits and mines investigated but not included in this study 29 ALUMINUM AVAILABILITY— MARKET ECONOMY COUNTRIES A Minerals Availability Program Appraisal By G. R. Peterson^ and S. J. Arbelbide' ABSTRACT To determine the availability of aluminum from world bauxite resources, the Bureau of Mines investigated 139 bauxite deposits worldwide and evaluated the potential production of aluminum based on the demonstrated resources of bauxite ore from 91 mines and deposits in 22 market economy countries. The demonstrated resources of the bauxite mines and deposits included in this study represent an in situ resource of 20.2 billion metric tons of bauxite. Total identified bauxite resources in market economy countries amount to roughly 31.9 billion tons. Of the demonstrated resource, some 18.8 billion tons of bauxite considered minable provide a production potential of 3.6 billion tons of primary aluminum. Given the wide geographic distribution of bauxite deposits, stable supplies of bauxite for aluminum production seem assured well into the next century. However, a tight market situation could develop during the 1990's unless the real price of aluminum increases enough to stimulate massive new investments in production capacity, particularly in refining and smelting. This study indicates that a real price of at least $0.85 per pound (in January 1980 dollars) would be necessary to stimulate the required investments and provide a sufficient rate of return on invested capital. ' Mineral economist. ^ Geologist. Both authors are with the Minerals Availability Field Office, Bureau of Mines, Denver, Colo. INTRODUCTION Demand for aluminum has grown at nearly 8 pet annually over the past two decades. Although this rate of growth is expected to decline to less than 5 pet through the end of the century (9. p. 42).' new bauxite sources will have to be developed and new alumina refineries and aluminum smelters will have to be built to satisfy the demand. Although the Bureau of Mines and aluminum companies have conducted extensive research into the potential of domestic nonbauxitic sources of alumina, such as alunite, anorthosite, and clays (18). for the foreseeable future bauxite ore will most likely remain the sole commercial source of alumina for smelting into aluminum. Reasons for this include the following (15): 1. The aluminum industry is based on Bayer processed bauxite. A significant shift to another process and material would involve major technological changes requiring mas- sive capital investments. 2. The aluminum industry has major overseas invest- ments in the mining and processing sectors and in shipping installations. 3. The present industry-Government joint ownership of mines and other installations in some countries is based upon long-term agreements. 4. Processes for producing aluminum from kaolin and alunite cannot yet compete economically with the Bayer-Hall- Heroult technologies for producing aluminum from bauxite ore. With current state-of-the-art technology, the higher energy requirements for processing nonbauxite sources of aluminum in an era of high energy costs drastically reduce their production potential. The major world bauxite resources are in West Africa, Australia, northeastern South America, and the Caribbean. Significant bauxite resources also exist in Europe and Asia. Limited metallurgical-grade bauxite reserves in the United States amount to some 38 million tons' or about 1 .8 pet of the ^ Italicized numbers in parentheses refers to items in the list of references preceding the appendixes at the end of the report. " Unless otherwise noted, "tons" in the report refers to metric tons. reserve base for market economy countries.^ Approximately 96 pet of the aluminum produced in the United States is derived from foreign-source bauxite. Because of this dependence on foreign sources for such an essential raw material and because of its importance to the U.S. economy, this report identifies and assesses the potential availability of aluminum produced from bauxite resources in market economy countries. The data collected for this report are stored, retrieved, and analyzed in a computerized component of the Bureau of Mines Minerals Availability System (MAS). After a deposit was included in the analysis, an evaluation of the operation was begun. The flow of the MAS evaluation process from deposit identification to development of availability informa- tion is illustrated in figure 1 . This flowsheet demonstrates the various evaluation stages required to estimate the potential availability of aluminum from bauxite ore. It is assumed in this study that each bauxite mine or deposit is part of a vertically integrated aluminum operation and that the owner of each deposit either controls its refining and smelting capacity or has the downstream processing performed on a toll-charge basis. With this assumption, the quantity of aluminum potentially available from the bauxite ore of each deposit can be estimated, as well as the long-run aluminum price required to bring about production from each potential operation or to keep existing producers in operation. The following factors had to be determined before the total production potential of aluminum from each operation could be ascertained: 1. The approximate annual production level of each bauxite deposit over the life of the mine. 2. The total capital and operating costs for each bauxite mine and mill. ^ fVlarket economy countries are defined by the Bureau of Mines as all countries that are not considered central economy countries. Central economy countries comprise Albania, Bulgaria, China, Cuba, Czechoslovakia, German Democratic Republic, Hungary, Kampuchea, Laos, Mongolia, North Korea, Poland, Romania, the U.S.S.R., and Vietnam. dentlfication and {" Mineral ^ Industries 1 ' Location 1 ' System 1 1 (MILS) 1 1 data 1 MAS computer data base se lection of deposits Tonnage and grade determination ^ Enginee ring and cost eva 1 uation i ' 1 Deposit report preparation MAS per manent deposit files ' 1 ' Data se I ection and va I Idation Taxes, royalties, cost indexes, prices, etc... Variable and parometer adjustments Economic analysis Sensitivity analysis Data! Availability I curves I Analytical reports iy Data Availobility curves Analytical reports Figure 1. — Flowchart of the MAS evaluation procedure. 3. The cost of transporting bauxite to an alumina refinery or refineries. 4. Tlie total capital and operating costs for each refinery or an estimate of the toll charge for alumina refining including depreciation and profit. 5. The cost of transporting alumina to an aluminum smelter or smelters. 6. The total capital and operating costs for each smelter or an estimate of the toll charge for aluminum smelting including depreciation and profit. For currently producing aluminum operations, the de- signed mining, refining, and smelting production rates and capacities and other available production specifics were adapted for use in this study. For potential operations, appropriate mining and processing methods and production rates were based on existing mines, refineries, and smelters as models, and on current engineering principles. When available, actual minmg capital and operating costs were used. However, where actual cost data were not available, costs were either estimated by standardized costing techniques or developed by the Bureau of Mines Cost Estimating System (CES), a computerized version of the Bureau of Mines capital and operating cost manual (22). Data collection and cost estimation were performed under contract; personnel of the Bureau of Mines Minerals Availability Field Office in Denver, Colo., analyzed and evaluated the data. Actual refinery and smelter capital and operating costs were used when available; otherwise the capital and operating costs used were from cost models that were developed. Data were also collected from such other sources as professional journals, industry publications, and individual companies. Costs for nonproducing operations were derived from the above sources as well as from the International Bauxite Association (IBA) and feasibility studies on "greenfield"' refining and smelting projects. Where an individual mine feeds more than one refinery, the transportation costs to the refineries and the refining costs were calculated on a weight-averaged basis. If the alumina goes to more than one smelter, the transportation, costs and smelting costs were also weight-averaged. Although an effort was made to simulate the actual flows from producing mines through the smelting stage, the scope of this study does not include an effort to match exactly the capacities of existing alumina refineries and aluminum smelters. For nonproducers, the materials flows are "best guess" estimates of where future capacity will be con- structed. The assumed locations of alumina refineries and aluminum smelters to process the bauxite and alumina from each deposit are shown in table A-1 in appendix A. Refinery and smelter location is a critical assumption for a cost study of this type since refining and smelting account for the bulk of the capital and operating costs of an aluminum operation. The following objectives served as guidelines in the conduct of this study: 1 . To determine the demonstrated resources of significant bauxite deposits in market economy countries. Estimates of identified resources are also mentioned; however, in the availability analysis, only demonstrated resources are included. This was done because of the higher level of confidence in geologic and cost data at the demonstrated level and because of adequate demonstrated resources of bauxite to fulfill demand well into the future. Assuming that annual world production of bauxite remained steady at the 1980 level of 90 million tons, demonstrated resources of 22.8 billion tons would be adequate for about 253 years. 2. To evaluate the quantity of potential aluminum produc- tion from bauxite resources in market economy countries in relation to physical, technological, political, and other factors that affect bauxite production from each deposit. 3. To estimate (a) capital investments and operating costs for each bauxite deposit, (b) capital investments and operating costs (or toll charges) for downstream processing by alumina refineries and aluminum smelters, and (c) transportation charges to ship bauxite and alumina. 4. To perform an economic analysis of each operation to determine its average total production cost of aluminum over its producing life. 5. To aggregate and illustrate graphically total potential primary aluminum production and the average total cost of each operation, including a 15-pct discounted cash flow rate of return (DCFROR) on all investments. ACKNOWLEDGMENTS The authors express their appreciation to Luke Baumgard- ner, Bureau of Mines bauxite commodity specialist, for his assistance in determining the bauxite properties and the associated resource tonnages included in this report. THE WORLD ALUMINUM INDUSTRY Of the approximately 89.9 million tons of bauxite produced in the world in 1980 (table 1), 46 pet was provided by Australia and Guinea. Guyana, Jamaica, and Suriname accounted for an additional 21 pet. In all, the 1 1 IBA member countries accounted for 74 pet of the world's bauxite output in 1980. The United States imported 14.1 million tons of bauxite in 1980 (table 2), 70 pet from the Caribbean and eastern South America. World alumina production in 1980 amounted to almost 33 million tons (table 3), with Australia and the United States accounting for 42.6 pet of total production. Although the ^ A "greenfield" project is a new project, often in a remote area, which must be developed from the ground up, including all necessary infrastructure. United States produced 6.8 million tons of alumina in 1980, it also imported 4.4 million tons (table 4), of which 78 pet originated in Australia. The trend towards at-home alumina refining in bauxite-producing countries is a continuing structural change in the aluminum industry that began some 20 years ago. To reduce shipping costs and to take advantage of lower quality bauxite resources, the aluminum companies began to build alumina refineries in the bauxite- producing countries; thus, they convert the bauxite to alumina and cut the shipping costs in half. The bauxite- producing countries have also pushed for more at-home alumina production because of the economic contribution provided by the value added from the further processing of bauxite into alumina. Overall, 1 ton of alumina is worth approximately seven times as much as 1 ton of bauxite Table 1. — World bauxite production* (Thousand tons) Country 1960 1970 1979" 1980° IBA member countries: Australia 70 9.093 27,583 27,584 Dominican Republic 689 1 ,033 524 605 Ghana 228 339 214 225 Guinea 1,189 2,559 13,700 13,780 Guyana 2,511 4,015 2,312 2,348 Haiti 272 611 584 452 Indonesia 395 1,191 1,052 1,224 Jamaica 5,837 11,633 11,505 12,261 Sierra Leone — 426 583 590 Suriname 3,455 5.174 5,010 4,696 Yugoslavia 1.025 2,033 3,012 3,138 Total IBA countries 15.671 38.107 66.079 66,903 Other countries: Brazil 121 484 2.388 3,970 France 2,068 2,956 1,969 1,665 Greece 884 2,207 2,915 2,950 Hungary 1,189 1,959 2,976 3,020 India 383 1,317 1,934 1,740 Malaysia 459 1,103 387 920 United States 2,030 2,049 1 ,821 1 ,559 U.S.S.R.'^ 3,556 4,134 4,600 4,600 Others 1,088 1,056 2,607 2,606 Total other countries 11,778 17,265 21,597 23,030 Grand total 27,449 55,372 87,676 89,933 Percent IBA countries 57 69 75 , 74 ® Estimated. " Preliminary. — indicates or negligible tonnage in tne year shown. ' Table includes data available through July 1, 1981. ^ In addition to the bauxite reported in the body of the table, the U.S.S.R. also produces alunite ore and nepheline syenite concentrates as sources of aluminum. Table 3. — World alumina production* (Thousand tons) Country 1970 1979P 1980» IBA member countries: Australia 2,138 7,415 7,247 Guinea 610 660 708 Guyana 305 154 219 Jamaica 1 ,689 2,074 2,478 Suriname 998 1,325 1,316 Yugoslavia 125 836 870 Total IBA countries 5,865 12,467 13,010 Other countries: United States 6,485 6,450 6,810 U.S.S.R 1,814 2,600 2,700 Japan 1,285 1,545 1,950 Germany, Federal Republic of 758 1 ,352 1 ,400 France 1,130 1,075 1,173 Canada 1,105 824 1,138 Italy 314 854 900 Hungary 441 788 800 China 254 750 750 Brazil 119 449 540 India 327 493 500 Romania 210 500 500 Greece 312 496 490 Turkey — 140 140 Czechoslovakia 73 100 100 United Kingdom 107 88 90 Taiwan 42 58 65 Spain — — 58 German Democratic Republic 54 41 41 Grand total 20,695 31,067 32,983 Percent IBA 28.3 40 39.4 'Estimated. ''Preliminary. — indicates or negligiDie tonnage in the year shown. ^ Table includes data available through July 1, 1981. Table 2. — U.S. imports off crude and dried bauxite* (Thousand tons) Country 1960 1970 1980° IBA member countries: Dominican Republic^ 642 896 565 Guinea — — 4,112 Guyana 335 312 585 Haita 347 607 452 Jamaica^ 4,242 7,384 6,146 Sierra Leone — — 75 Suriname 3,308 2,877 1,369 Total IBA countries 8,874 12,076 13,304 Other countries: Greece — 57 — Brazil — — 777 aher 5 287 6 Grand total 8,879 12,420 14,087 Percent IBA 99.9 97^2 94.4 * Estimated. — indicates or negligible tonnage in the year shown. ' Includes bauxite imported to the U.S. Virgin Islands from foreign countries. ^ Dry equivalent of exports to the United States. exported as raw ore. Whereas in 1960 only 10 pet of the total world production of alumina was from the lesser-developed- country (LDC) bauxite producers, this percentage has grown Steadily, to 34 pet in 1975 (14). Primary aluminum production in market economy coun- tries in 1980 was about 12,700,000 tons. As shown in table 5, the United States remained the largest aluminum producer in the world, producing 4,654,000 tons in 1980, which accounted for some 36.6 pet of the market economy countries' production that year. This share of world production will probably decline in the future because of the increasing cost of the electricity needed for aluminum smelting. Extremely energy intensive, the Hall-Heroult process requires 1 3,000 to 1 8,000 kWh of electricity per ton of primary aluminum produced. To produce 10.4 billion pounds of primary ingot, domestic aluminum smelters used some 78 billion kWh of electricity in 1 978, 1 pet of the total electricity U.S. industry consumed in that year (7, p. 24). Table 4. — U.S. imports off alumina* (Thousand tons) Country 1970 1978 1980° IBA member countries: Australia 1,075 2,879 3,408 Guyana 34 30 17 Jamaica 787 628 634 Suriname 314 382 246 Total IBA countries 2,210 3,919 4,305 Other countries 107 48 56 Grand total 2,317 3,967 4,361 Percent IBA 95.3 987 98.7 ° Estimated. ' Includes aluminum hydroxide; excludes shipments from the U.S. Virgin Islands. Some 35 pet of the total domestic aluminum smelting capacity is in the Pacific Northwest, which receives hydroelectric power from the Bonneville Power Authority (BPA). The existing power contracts with the BPA are to expire in the next few years; thus, the companies will have to renegotiate new long-term contracts with the BPA at much higher rates, with the aluminum producers experiencing an increase from a price level of 6.2 mills/kWh to a rate in the range of 15 to 21 mills. Moreover, an increase in population and industrial growth in the Northeastern United States provides further competition to the aluminum industry for energy. Utilities in a position to negotiate regular price reviews, like the Tennessee Valley Authority (TVA), are insisting on new prices reflecting costs of coal- or oil-fired power stations (14, p. 31). Increased fossil-fuel costs, environmental restrictions on smelters, and the current moratorium on nuclear energy construction affect other domestic aluminum-producing areas as well. Consequently, the industry has been reluctant to expand domestic primary production capacity, and companies have instead focused their attention on develop- ing "greenfield" projects overseas in such countries as Australia, Brazil, Cameroon, Ghana, and Indonesia. Table 5. — World primary aluminum production^ (Thousand tons) Country 1960 1970 1980= Market economy countries: United States 1 ,828 3,607 4,654 Japan 133 733 1,092 Canada 691 973 1,068 Germany, Federal Republic of 169 309 731 Norway 165 530 652 France 238 381 432 Spain 24 115 387 United Kingdom 29 40 375 Venezuela — 23 313 Australia 12 204 304 Italy 84 146 271 Netherlands — 75 259 Brazil 18 44 256 India 18 161 185 Yugoslavia 25 48 185 Ghana — 113 170 New Zealand — — 1 56 Greece — 87 1 45 Bahrain — — 1 26 Egypt — — 120 Argentina — — 119 Austria 68 90 94 Switzerland 40 92 86 South Africa — — 83 Sweden 16 66 82 Iceland — 38 74 Taiwan 8 27 64 Suriname — 55 50 Mexico — 34 44 Cameroon 44 53 40 Turkey — — 31 Dubai — — 25 Republic of Korea — 15 21 Iran — — 10 Market economy country total 3,610 8,059 12,704 Central economy countries: U.S.S.R 676 1,100 1,788 China 80 127 363 Romania — 102 241 Poland 26 99 91 Hungary 50 66 74 German Democratic Republic 40 59 65 Czechoslovakia 40 31 38 North Korea — — 10 Central economy country total 912 1,584 2,670 Grand total 4,522 9,643 15,374 ^ Estimated. — indicates or negligible tonnage in the year shown. ^ Table includes data available tnrough May 25, 1981. The world aluminum industry has been described as an oligopoly made up of six multinational firms: Alcan Alunimum, Ltd., Aluminum Co. of America (Alcoa), Reynolds Metals Co., Kaiser Aluminum and Chemical Corp., Pechiney Ugine Kuhlmann (PUK), and Swiss Aluminum, Ltd. (Alusuisse). Fully integrated, these companies occupy strategic positions in the industry, from producing raw materials to marketing both metal and end products. About 35 pet of world production capacity for bauxite, 50 pet of world alumina capacity, and 40 pet of world aluminum capacity is under their control. Moreover, through a variety of consortia arrangements, one or more of these firms is associated with practically all new projects of international significance within the industry. In addition to these major international firms are some 50 others whose somewhat restricted aluminum operations account for about one-fourth of world production capacity for bauxite, alumina, and aluminum metal. Most of these producers are nonintegrated, and some are owned by or associated with either governments or the six large international aluminum companies {20, p. 4). Some 19 pet of world aluminum production capacity is controlled by com- munist governments, and about 22 pet is controlled by governments of other countries. Of the 12 domestic firms producing primary aluminum metal in the United States in 1979, 7 owned and imported raw materials from their bauxite and/or alumina facilities in the Caribbean area. South America, Guinea, or Australia. The six large international aluminum companies dominate the market for aluminum metal and metal goods. Producers' prices have shown a high degree of correspondence and stability. On the growing free market, metal from noninte- grated producers is offered on the London Metal Exchange (LME) on both spot and forward bases. The prices on the LME, tenuously tied to the producers' prices, more commonly tend to fluctuate in consonance with those of the LME quotations for other nonferrous metals {19, p. 115). Throughout the 1 960's, aluminum prices stayed remarkably stable, both in current dollar and in real terms. Since 1974, worldwide inflation, increased costs for bauxite from IBA member countries, and the rising costs of energy have been factors in causing the aluminum price to increase approx- imately threefold as of August 1980. IMPORTANCE OF SECONDARY (SCRAP) RECOVERY TO THE INDUSTRY Recovery of purchased scrap contributes some 25 pet of the total domestic supply of aluminum. Scrap is divided into two main categories, new scrap and old scrap. New scrap is generated in manufacturing primary aluminum, semifabri- cated aluminum mill products, or finished industrial and consumer products. New scrap includes solids, such as new casting scrap; clippings or cuttings of new sheet, rod, wire, and cable; borings and turnings from the machining of aluminum parts; and residues, drosses, skimmings, spillings, sweepings, and foil {20, p. 7). Old scrap, from discarded, used, and worn-out products, includes aluminum engine or body parts from junked cars, used aluminum cans and utensils, and old wire and cable. The proportion of total domestic metal consumption met by the recovery of old scrap amounted to about 10 pet in 1979 {12). DEMAND FOR ALUMINUM Between 1975 and 2000, domestic primary aluminum demand is expected to increase threefold, with an average annual rate of growth estimated from 4 pet {13) to 5.3 pet (20), or slightly lower than the estimated rate of growth for the world demand as a whole over the same period. The United States will likely remain the world's largest consumer and one of the world's largest producers of aluminum during this period. U.S. dependence on foreign primary aluminum production is growing. One estimate {25, p. 33) forecasts that domestic bauxite production will satisfy a decreasing share of demand, that alumina refining will drop from over a 70-pet share in the U.S. market in 1977 to under 40 pet by the year 2000, and that domestic aluminum smelting will drop from over 90 to 80 pet during the same period. At the same time, user segments of the domestic market will continue to grow. In 1979, the major domestic markets, in descending order of market share, were building and construction, transportation, the electrical sector, consumer durables, and machinery and equipment. In housing, the demand is growing for roofing, window frames, aluminum siding, and insulation. In durables, more aluminum is being used to improve efficiency and to increase service life. In the electrical sector, aluminum is used mainly for overhead power transmission lines. Alumi- num alloys are becoming more attractive as a substitute for steel in the automotive industry because of the weight factor, and aluminum is becoming more popular in packaging because much of it is recyclable. THE IMPACT OF OPEC AND THE FORMATION OF THE IBA The International Bauxite Association (IBA) was formally established at a meeting in Conakry, Guinea, in March 1974. Seven bauxite-producing nations became the original mem- bers; Australia, Guinea, Guyana, Jamaica, Sierra Leone, Surinam and Yugoslavia. The Dominican Republic, Ghana, Haiti, and Indonesia soon joined, for a current total membership of 1 1 nations which cumulatively produce approximately three-quarters of the total world bauxite output. The objectives of the IBA are stated in the Final Act of the International Conference of Bauxite Producing Countries (also referred to as the Conakry accord), consisting of 28 articles expressing the objectives and ground rules for the organization. The basic objectives are (17, p. 166): 1 . To promote the orderly and rational development of the bauxite industry. 2. To secure for member countries fair and reasonable returns from the exploitation, processing, and marketing of bauxite and its products for the economic and social development of their peoples, bearing in mind the recognized interests of consumers. 3. Generally, to safeguard the interests of member countries in relation to the bauxite industry. Interest in developing a producer association for bauxite had existed for several years before 1974 because the bauxite-producing nations were dissatisfied with the fiscal revenues generated by their respective bauxite industries. Guyana took the extreme move of fully nationalizing the Demerara Bauxite Co. from Alcan Aluminum, Ltd., in 1971. The Guyana Government, wishing to use its hydroelectric potential to integrate into smelting primary aluminum, believed that nationalization was the means to achieve its (as yet unfulfilled) objective. Surina's net revenues from the industry had not improved since the 1950's, even though the country had a large alumina refinery and the only aluminum smelter in the Caribbean. Jamaica, the leading Caribbean producer, was frustrated by the lack of significant revenues from its large alumina output and anticipated no further expansion of its industry by the aluminum companies. Taxes paid to the Jamaican Government amounted to only $1 .77 per long dry ton of bauxite output in 1973 (4, p. 121). The final inducement for forming a producer association was supplied by the Organization of Petroleum Exporting Countries (OPEC) in the fall of 1973. From an earlier level of $1.80 per barrel, the price of OPEC crude oil was raised to $2.59 in early 1972, doubled to $5.11 in October 1973, and doubled again in December to $1 1 .65 — a six-fold increase {17, p. 83). Jamaica faced an oil-import bill that tripled from $55 million in 1972 to $165 million in 1974. Jamaica's international monetary reserves were reduced to a level equal to only 1 month's worth of its imports. In response to this OPEC-induced economic crisis, Jamaica unilaterally announced in January 1974 that it would seek to renegotiate the existing bauxite contracts with the aluminum companies, since the "doctrine of changed circumstances" was applic- able because of higher oil prices. Once the aluminum companies acceded to Jamaican demands for a bauxite levy, the other Caribbean bauxite-producing nations followed suit by announcing their own versions of a bauxite levy. When the IBA was founded in 1974, all its members except Australia adopted some form of a bauxite levy or equity participation in their respective industries. IDENTIFICATION AND SELECTION OF BAUXITE DEPOSITS The only commercial source of primary aluminum in the market economy countries is bauxite ore. Because nonbauxi- tic sources of aluminum will not become economically competitive with bauxite in the foreseeable future, this study discusses only the availability of alumimun from bauxite ore. Information on the domestic availability of alumina from nonbauxitic sources is detailed elsewhere (18). For the bauxite deposits analyzed in this report, tonnage estimates were made at the demonstrated resource level according to the mineral resource classification system (fig. 2) developed jointly by the U.S. Geological Survey and the lOENTtriED RESOURCES Dtinonitfoltil Meolurcd Indicolcd UNDISCOVERED RESOURCES bgt.CQl [ + + entlonol ond lo>-grode Figure 2. — Reserve-base and inferred reserve- base classification categories. Bureau of Mines (24). The demonstrated resource category includes measured plus indicated tonnages. Selection of deposits for this study was limited to significant, known deposits that have demonstrated re- sources. Most reserve and resource tonnage and grade calculations presented herein have been computed partly from specific measurements, samples, or production data and partly from estimations made on geologic evidence. The world bauxite reserve base, as estimated by the Bureau of Mines, amounts to 22.4 billion tons of bauxite ore, of which about 21.2 billion tons are in market economy countries. Based on data from the Bureau of Mines, U.S. Geological Survey, and IBA, the authors of this report estimate that world bauxite resources at the identified resource level (which includes measured, indicated, and inferred reserve categories) are 33.4 billion tons. Of that amount, 31.9 billion tons are in the market economy countries. In addition, the U.S. Geological Survey and the Bureau of Mines estimate that total world bauxite resources (identified plus subeconomic and undiscovered resources) amount to 40 to 55 billion tons (16). The IBA (11) reports a more optimistic total world resource figure of 103.4 billion tons. Regardless of the source of data, worldwide bauxite resources are extensive and will likely increase further as a result of exploration activities. This study is based upon the availability of aluminum from 91 bauxite properties in 22 countries, which have demons- trated bauxite resources of 20.2 billion tons, accounting for almost 96 pet of the reserve base for market economy countries. An additional 48 bauxite properties also investi- gated for this study were not evaluated since many of them contain only inferred resources, were relatively small and/or low grade, contained only chemical or refractory-grade but not included in this study is shown in table A-4. Estimates bauxite (which could be used to produce cell-grade alumina, of total bauxite resources in market economy countries (at but probably would not be because of its higher grade and the demonstrated and identified resource levels) are shown therefore higher value), or were in countries where reliable in table 6, and information on the individual properties cost data are unobtainable. The list of deposits investigated included in the analysis is presented in table 7. Table 6. — Bauxite resource information for market economy countries Country Number of deposits Demonstrated in situ materiaP Identified in situ material^ evaluated Thousand tons Percent of total Thousand tons Percent of total Caribbean: Dominican Rep 1 15,600 0.08 45,000 0.14 Haiti 1 14,000 .07 14,000 .04 Jamaica 15 2,000,000 9.90 2,000,000 6.27 Total 17 2,029,600 10.05 2,059,400 6.45 United States 3 38,000 .19 40,000 ,13 South and Central America: Brazil 7 2,270,300 11.22 4,070,000 12.75 Columbia — — — 83,000 .26 Costa Rica 1 78,500 .39 150,000 .47 French Guiana — 1 42,000 .21 170,000 .53 Guyana 11 519,000 2.56 1,016,000 3.18 Suriname 4 577,900 2.86 600,000 1.89 Venezuela 1 236,000 1.16 500,000 1.57 Total 25 3,723,700 18.40 6,589,000 20.65 Africa: Cameroon 1 800,000 3.95 1,500,000 4.70 , Ghana 3 558,100 2.76 780,000 2.44 : Guinea 6 5,625,000 27.80 8,200,000 25.69 ' Malawi 1 28,800 .14 70,000 .22 Mali — — — 880,000 2.76 Sierra Leone 2 161,400 .80 161,400 .51 South Africa _ — — 20,000 .06 Total 13 7,173,300 35.45 11,611,400 36.38 Europe: France 6 43,800 .22 43,800 .14 Greece 4 600,000 2.96 700,000 2.19 ' Turkey 1 16,800 .08 30,000 .09 Total 11 660,600 3.26 773,800 2.42 Asia: India 8 1,181,000 5.83 1,900,000 5.95 Indonesia 2 805,000 3.98 805,000 2.52 Malaysia - — — 15,000 .05 Philippines — — 60,000 .19 Total 10 1 ,986,000 9.81 2,780,000 8,71 Oceania: Australia 10 4,574,700 22.60 8,000,000 25.07 Solomon Islands. , 2 50,300 .25 60,000 .19 Total 12 4,625,000 22.85 8,060,000 25.26 Grand total 91 20,236,200 100.00 31,913,200 100.00 — Indicates or negligible tonnage in the year shown. ' Excludes Yugoslavia. Demonstrated tonnage is from the 91 mines and deposits evaluated for this study. ^ Identified resources are measured plus indicated plus inferred resources. The identified tonnages are country totals, not just from the deposits evaluated. Note. — Resource figures, by country, have been rounded to the nearest hundred thousand. Table 7. — Bauxite property information, January 1980 Location and property name Ownership Status' Type^ Stripping ratio" (waste to ore) Type of ore Arkansas: Alcoa Bauxite Alcoa Quapaw bauxite mine American Cyanamid . Reynolds surface mine Reynolds Metals . . . . Australia: Aurui^un Billiton-Pectiiney Cape Bougainville Alumax-Mitsui-Nippon Steel Chittering (Muchea) Pacminex-Hanwright-Metals H/liniere Gove Swiss Aluminum Australia Ltd. -Gove Alumina Ltd. Huntly-Del Park Alcoa Australia Jarrahdale do Mitchell Plateau Mitchell-Alumax-Sumitomo Mount William (Wagerup) Alcoa of Australia Weipa-Andoom Kaiser-Rio Tinto-public Worsley (Mount Saddleback) . . Reynolds-Worsley Alumina Pty. Ltd. Brazil: Almeirim-Jutai Companhia Vale do Rio Doce Ouro Preto Alcan Paragominas MIneracao Vera Cruz S.A Poco de Caldas-Alcominas .... Alcoa-Hanna-State Minas Gerais. . . Pocos de Caldas Companhia Brasileira do Alum Trombetas MIneracao Rio do Norte Trombetas-Alcoa Alcoa-Shell British Pacific Islands: Rennell Island Mitsui Mining and Smelting Co Wagina Island Pacific Aluminum-CRA Exploration. Cameroon: Minim Martap Pechiney-BRGM-VAG Costa Rica: San Isidro del General . Costa Rican Government Dominican Republic: Cabo Rojo Alcoa France: Blanquette-Combecave Bauxites et Alumines de Provence , Canonnettes Aluminum Pechlney La Rouquette-Mont. Plaisir do Mazaugues (Var) Aluminum Pechiney Peygros (Var) do . St. Julien-Tourves Alusuisse French Guiana: Kaw Mountains Cle. Minidre de Guyane. . . Ghana: Awctso Ghana Bauxite Co.-Kaiser. Kibi (Atewa) Kaiser and Ghana Government . Nyinaihin Ghana Government Greece: Eleusls Eleusis Bauxite Mining Co Helikon Greek Helikon Bauxites Co Itea Eleusis Bauxite-Skalistiri Parnasse Bauxite Parnasse Mining Co. . . . Guinea: Aye-Koye Guinea Government Oabola Guinea Government-Bauxite de Dabola. Fria Friguia Kindia Guinea Government Sangaredi Haico Inc.-Guinea Government Tougue Guinea Government-Alusulsse Estimated. NAp — Not applicable. 'P — producer; N — nonproducer. P S 6.1:1 P S 2.6:1 P S 8:1 N N S S 0.1:1 to 1:1 0.13:1 N S 0.33:1 P S 0.29:1 P S 0.13:1 P S 0.13:1 N S 0.13:1 N S 0.13:1 P S 0.31:1 N S 0.33:1 N P S S 3:1 0.2:1 N P P P N S S S S S 5:1 to 7:1 0.1:1 0.1:1 1:1 1:1 N N N N S S S S 0.4:1 0.1:1 0.33:1 to 1:1 0.2:1 u u u u u u s s s s u u u s s s s s P s N S ^S — surface; 0:1 NAp NAp NAp NAp NAp NAp 0.1:1 1:1 0.63:1 0.1:1 NAp NAp NAp 3:1 0:1 0:1 0:1 0:1 0:1 0:1 U — underground. Gibbsite, some boehmite, 50 pet AI203, 13 pet silica. Gibbsite, some cliachite and kaolinite, 43 pet AI2O3 (wet) Gibbsite, some boehmite, 50 pet AljOs, 13 pet silica. Mixed, 53 pet AI2O3, 6 to 8 pet silica. Gibbsite, some boehmite, 36 pet AI2O3, 1 .9 pet silica. Gibbsite, some boehmite, 30 to 35 pet AI2O3, 1 to 2 pet reactive silica. Gibbsite, some boehmite, 50.4 pet AI2O3, 2 to 6.5 pet silica. Gibbsite, some boehmite, 32.5 pet AI2O3, 15 to 22 pet silica, 1 to 2 pet reactive silica. Gibbsite, some boehmite, 32.5 pet AI2O3, 15 to 22 pet silica, 2 to 3 pet reactive silica. Gibbsite, some boehmite, 47 pet AI2O3, 2 to 3 pet silica. Gibbsite, some boehmite, 32.5 pet AI2O3, 15 to 22 pet silica, 1 to 2 pet reactive silica. Mixed, mainly gibbsite, 48 to 56 pet AI2O3, 4.5 to 9 pet silica. Pisolitic gibbsite, 32.2 pet AI2O3, 15 to 22 pet silica, 1 to 2 pet reactive silica. Gibbsite, 51.6 to 57.5 pet AI2O3, low silica. Gibbsite, 37 pet AI2O3 in situ, 47 pet washed, 2.23 pet reactive silica. Gibbsite, 53 to 58 pet AI2O3, 3 to 7 pet silica. Gibbsite, 46 to 54 pet AI2O3, 5 to 6 pet silica. Gibbsite, 46 to 54 pet AI2O3, 5 to 6 pet silica. Gibbsite, 50 pet AI2O3, 4 pet reactive silica. Gibbsite, 50 pet AI2O3, 4 pet reactive silica. Gibbsite, 48 pet AI2O3, low silica. Gibbsite 47.1 pet AI2O3, low silica. Gibbsite, 42 pet AI2O3, 3 pet silica. Gibbsite, some boehmite, 33.8 pet available AI2O3, 7.5 pet reactive silica. Gibbsite and boehmite (5:1), 42 to 50 pet AI2O3, 1.6 to 10 pet silica. Boehmite and diaspore, 54 pet AI2O3. Boehmite and diaspore, 50 pet AljOs, 6.8 pet silica. Boehmite and diaspore, 55.5 pet AI2O3, 4.3 pet silica. Boehmite and diaspore, 54 pet AI203, 3.5 pet silica. Boehmite and diaspore, 50 pet AI2O3, 7 pet silica. Boehmite and diaspore, 48.5 to 52.2 pet AI2O3, 15.7 to 23 pet silica. Gibbsite, 42 pet AI2O3, 2 pet silica. Gibbsite, some boehmite, 48.7 pet AI2O3, 1 .7 pet silica. Gibbsite, 44 pet AI2O3, 3 pet silica. Gibbsite and boehmite (5:1), 40 pet AI2O3, 3.2 pet silica. Boehmite, 51 pet AI2O3, 0.7 to 2 pet silica. Boehmite and diaspore, 60 pet AI2O3, 4 pet silica. Boehmite and diaspore, 60 pet AI2O3, 4 pet silica. Boehmite and diaspore, 57.5 pet AI2O3, 2 pet silica. Gibbsite, 49 pet AI2O3. Gibbsite and boehmite (9:1), 45 pet AI2O3, 1.33 pet silica. Gibbsite, 48 pet AI2O3, 2.5 pet silica. Gibbsite, some boehmite, 48 pet AI2O3, 1 to 3 pet silica. Gibbsite, some boehmite, 48 to 60 pet AI2O3, about 4 pet silica. Gibbsite, 43 pet AI2O3, 3.8 pet silica. Table 7. — Bauxite property information, January 1980 — Continued Location and property name Ownership Status^ Type^ Stripping ratio* (waste to ore) Type of ore Guyana: Arrowcane East Guyana Government Arrowcane South do . . Coomacka do . . East Mombaka do. . East Montgomery do . . Ituni District do . . Kara-Kara do . . Manaka do . West Bank #3 do , West Mombaka do . Yararibo do . Haiti: Miragoane Reynolds Haitian Mines Inc. India: Amarkantak Bharat Aluminum Co. Ltd. . . Anantaglrl do Bagru Hills Indalco-Alcan Chandgad Indaico Chintaplee Bharat Aluminum Co. Ltd . . Gandhamardan do Lohardaga (Hindaico) Hindustan Aluminum Co . . . Panchpatmali-Orissa Bharat Aluminum Co. Ltd . . Indonesia: Bintan Island P.N. Aneka Tambang Singakawang do Jamaica: Alpart Kaiser-Reynolds-Anaconda . Breadnut Valley Alcoa-Jamaica Government Cambridge Jamaica Government Ewarton Alcan-Jamaica Government Kirkvine do Lydford Reynolds-Jamaica Government . Maggotty Jamaica Government New Market East do Samaico do Schwallenburgh West do Spanish Town West do Trelawny do Trelawny Central do Water Valley Kaiser Jamaica Bauxite Co. Williamsfield East Jamaica Government Malawi: Mulanje Mountain Malawi Government Sierra Leone: Moyamba Sierra Leone Government-Alusuisse. Port Loko do Suriname: Bakhuis Mountains N.V. Grassaico (Government) Moengo Suraico Onverdacht Billiton N.V Suraico (Leiydorp) Suriname Aluminum Co Turkey: Seydisehir Etibank Venezuela: Los Pijiguaos Industrie Venezolana de Aluminio. 9:1 9:1 9:1 9:1 9:1 8:1 9:1 9:1 9:1 9:1 9:1 0:1 4:1 0:1 1.1:1 1.5:1 0.11:1 NA 3:1 0.4:1 0.1:1 0.1:1 0.125:1 0:1 0.125:1 1:1 0:1 0:1 0.1 0.1 0.4 0:1 0:1 0:1 0.1:1 0.1:1 0:1 0:1 0:1 0.5:1 0.2:1 1:1 1.7:1 NA 1:1 to 3:1 0.05:1 Gibbsite, some boehmite, 59 pot AI2O3, 1 to 10 pet silica. Gibbsite, some boehmite, 59 pet AI2O3, 1 to 10 pet silica. Gibbsite, some boehmite, 59 pet AljOs, 1 to 10 pet silica. Gibbsite, some boehmite, 59 pet AljOg, 8.3 pet silica. Gibbsite, some boehmite, 59 pet AI2O3, 1 to 10 pet silica. Gibbsite, boehmite (20:1), 50 to 63 pet AI2O3, 8.3 pet silica. Gibbsite, some boehmite, 59 pet AI2O3, 1 to 10 pet silica. Gibbsite, some boehmite, 59 pet AI2O3, 8.3 pet silica. Gibbsite, some boehmite, 59 pet AljOs, 1 to 10 pet silica. Gibbsite, some boehmite, 59 pet AlaOs, 8.3 pet silica. Gibbsite, some boehmite, 59 pet AI2O3, 1 to 1 pet silica. Mixed, 50 pet AI2O3, 3.4 to 4.7 pet silica. Mixed, 37 to 54 pet AI2O3, 2 to 7 pet silica. Gibbsite, some hematite, 48 pet AI2O3, 2.5 pet silica. Gibbsite, 53.2 pet AI2O3, 3.3 pet silica. Gibbsite and hematite, 48.6 pet AI2O3, 3.2 pet silica. Gibbsite, 46 pet AI2O3, 2 pet silica. Gibbsite, 47 pet AI2O3, 2.6 pet silica. Gibbsite, some boehmite, 45 pet AI2O3, 3 pet silica. Gibbsite, 42 to 56 pet AI2O3, 1 to 3 silica. Gibbsite, 45 to 50 pet AI2O3, 8 to 13 pet silica. Gibbsite, 54 pet AI2O3, 5 pet silica (washed). Gibbsite, some boehmite, 42 to 50 pet AI2O3, 1 to 20 pet silica. Gibbsite, some boehmite, 43.5 pet AI2O3, 1 .5 pet silica. Gibbsite, some boehmite, 43 pet AI2O3. Gibbsite, some boehmite, 43 pet AI2O3, 1 .8 pet silica. Gibbsite, some boehmite, 45 pet AI2O3, 1 pet silica. Gibbsite, some boehmite, 42.5 pet AI2O3, 1 pet silica. Gibbsite, some boehmite, 43 pet AI2O3. Gibbsite, some boehmite, 42 pet AI2O3. Gibbsite, some boehmite, 44 pet AI2O3. Gibbsite, some boehmite, 42 pet AI203. Gibbsite, some boehmite, 42 pet AI2O3. Gibbsite, some boehmite, 42 pet AI2O3, less than 3 pet silica. Gibbsite, some boehmite, 43 pet AI2O3. Gibbsite, some boehmite, 45 pet AI2O3. Gibbsite, some boehmite, 43 pet AI2O3, less than 3 pet silica. Gibbsite, 43.9 pet AI2O3, 2.2 pet reactive silica. Gibbsite, 47 pet AI2O3, 4.5 pet silica. Gibbsite, 49 pet AI2O3, 4 pet silica. Gibbsite, 48.4 pet AI2O3, 3.1 pet silica. Gibbsite, 54 pet Ai203. Gibbsite, 52 pet AI2O3, 4.5 pet reactive silica. NA. Boehmite, 56 to 59 pet AI2O3, 7 to 8 pet silica. Gibbsite, 49 pet AI2O3, 9.3 pet silica, (2.2 pet reactive silica. "Estimated. NA — Not available. 'P — producer; N — nonproducer. ^S — surface; U — underground. 10 BAUXITE MINING AND PROCESSING GENERAL Bauxite, the principal ore of aluminum, is composed of aluminum hydroxide minerals with impurities of free silica, clay, silt, and iron hydroxides (23). The types of bauxite are (1) trihydrate, consisting mainly of gibbsite, AI203-3H20; (2) monohydrate, consisting mainly of boehmite, AlO (OH), or diaspore, AI2O3H2O; and (3) mixed bauxite, consisting of both gibbsite and boehmite (16). Bauxite is believed to be formed as a residual soil in humid, tropical, or subtropical regions with good drainage. Extreme weathering conditions common to tropical climates decompose the iron and aluminum silicates, and leaching through downward percola- tion of water removes the silica and many other elements. Bauxite deposits typically assay 28 to 55 pet AI2O3. The aluminum industry consumes nearly 90 pet of the bauxite mined; the remainder is used as abrasives, chemicals, refractories, and miscellaneous minor products. Although many technological improvements have been made in producing aluminum from bauxite, the basic processes are unchanged since the metal first became available in commercial quantities over 90 years ago. These processes consist mainly of surface mining of bauxite, followed by hydrometallurgical processing to produce alumi- na (99.5 pet AI2O3), and then reducing the alumina to aluminum metal by fused-salt electrolysis in a molten bath of fluoride salts (20, p. 1). Generally, for each 4.5 tons of bauxite fed into the alumina refinery, 2 tons of alumina is extracted, from which about 1 ton of aluminum is produced. MINING Bauxite ore is mined mostly by open pit methods. This entails stripping away the overburden, which can subse- quently be replaced to restore the land surface after mining, and then the actual mining of the ore. In Arkansas, where as much as 13 ft of overburden must be removed for every foot of bauxite ore exposed, draglines, scrapers, shovels, and trucks are used in the stripping operations. In Jamaica, because the bauxite deposits lie very close to the surface, the overburden of vegetation and topsoil is easily removed. The ore is mined with shovels, draglines, and scrapers; blasting is not usually necessary. The ore is then transported by truck, rail, or aerial tram to the alumina refinery or port. Deposits in Australia and Guinea also lie very close to the surface, with very little stripping of overburden required; however, the bauxite in some of these deposits requires blasting to loosen the ore. Underground mining, by room-and-pillar methods, accounts for most of the bauxite production from deposits in France and other European countries. In their crude state, bauxites may contain from 10 to 25 pet free moisture. If the bauxite is to be transported over a long distance to the alumina refinery, most of this moisture is usually removed by drying at the mill, usually located at the mine site or at the port. Apart from crushing, drying is often the only processing applied to a metallurgical-grade bauxite before it reaches the alumina plant. Ores of different composition are often blended before milling to ensure as uniform a feed as possible and thus enfiance alumina recovery from the refinery. BAYER PROCESS FOR ALUMINA PRODUCTION FROM BAUXITE The Bayer process is the only commercial-scale method of converting metallurgical-grade bauxite to alumina. In the classic Bayer process, aluminum and other soluble elements in bauxite are dissolved at elevated temperatures and pressures in a strong alkali solution, generally NaOH, to form sodium aluminate (NaAI02). After separation of the "red mud" tails, the sodium aluminate solution is cooled and seeded, and aluminum trihydrate is precipitated in a controlled form. The trihydrate is dewatered and calcined to the anhydrous crystalline form, alumina. Depending on the mineral content of the ore, variations occur in the digestion temperature, pressure, and caustic concentration. In addition, higher silica ores (greater than 8 pet Si02) require additional steps, known as the lime-soda- sinter process, to recover alumina and soda lost by combination with silica. Addition of the lime-soda-sinter steps to a Bayer process for high-silica ores is known as the Combination process, processing trihydrate ore is known as the American Bayer process, and processing monohydrate ore is known as the European Bayer process. Trihydrate ores containing up to 25 pet monohydrate recently have been processed by a method known as the Modified Bayer process. All variations of the Bayer process include caustic leaching and precipitation. Ore is typically wet-ground in a 40-pet- solids (by weight) solution to minus 20 to minus 28 mesh. The grinding takes place in a caustic medium. The ore is then placed into a digestor where steam is introduced and leaching occurs. Easily leached, trihydrate ores require a temperature in the range of 1 20° to 1 50° C, 30 to 1 00 psi, and a caustic concentration of 130 to 190 g Na2C03 per liter. Monohydrate ores are leached at higher temperatures (175° to 250° C), higher pressures of 300 to 500 psi, and a greater caustic concentration of 250 to 400 g Na2C03 per liter. Trihydrate ores containing up to 25 pet monohydrate are leached at 240° to 250° C, 525 psi, and 240 g NaaCOg per liter. After digestion, thickeners and filters separate the un- leached material containing the iron and nonreactive silica impurities (red mud) from the leach solution (green liquor). Starch is often added as a flocculating agent during this separation. The leach solution is cooled in precipitators for 34 to 36 hr. After precipitation, the coarse alumina is separated from the fines and the spent liquor. The coarse alumina is calcined (in the United States) at 950° to 1 ,050° C and then stored for shipment to an aluminum smelter. The fines are returned to the precipitators, where they act as seed for the next batch. The spent liquor is returned to the digestor after evaporation of some of the excess water. Typical recoveries of aluminum in producing alumina from bauxite ores are 90 to 96 pet for the American Bayer process and 80 to 85 pet for the Modified Bayer process or the Combination process. Loss of aluminum is due principally to washing steps and silica-alumina reactions. The percent of alumina lost to silica is roughly equal to the weight-percent of reactive silica present in the ore. Miscellaneous losses account for 3 to 5 pet. For high-silica ores (above 8 pet silica content), enough aluminum is lost to justify the addition of the lime-soda-sinter process. In this process, the red mud tails from the Bayer process are combined with soda ash and limestone and sintered at 1,150° to 1,260° C. This sinter is then ground in the presence of water, which leaches the alumina from the sinter. The leach solution is separated from the remaining sinter (brown mud) and returned to the digestor of the Bayer process. The brown mud is discarded. THE HALL-HEROULT PROCESS {12) Primary aluminum is produced by the electrolysis of alumina in a molten bath of natural or synthetic cryolite (NasAIFe), which serves as an electrolyte and a solvent for 11 the alumina. The reduction cells or pots containing the bath are approximately 1 to 1 5 ft wide, 20 to 40 ft long, and about 3 to 4 ft deep, lined with carbon, and connected in electrical series of 1 00 to 240 cells to form a potline. From 800 to 3,000 lb of aluminum is produced per day in each pot. The carbon lining which serves as the cathode usually must be replaced every 3 to 4 years. Compounds of aluminum, fluorine, and sodium absorbed in the used pot linings are recovered and recycled, as is the carbon. Cryolite and aluminum flouride are added to the electrolyte to maintain the desirable ratio of sodium and aluminum fluoride and to replace fluorine lost from the cell in pot linings or through volatization. The melting point of the bath is lowered by the addition of small quantities of fluorspar or, in some instances, lithium compounds. The carbon anode, which is consumed during the operation, is replaced by the Soderberg continuous method or by the prebaked method. The molten bath or electrolyte may be as deep as 1 4 in, but the anode is usually only 2 in from the pad of molten aluminum. The resistance of the bath is sufficient to maintain an optimum operating temperature of 950° to 980° C. At this temperature, the maximum alumina content of the bath ranges from 3 to 1 pet. Every 1 or 2 days the molten aluminum is removed from the bottom of the cell by a vacuum-siphon technique. Thermally insulated cast iron pots with airtight lids and downward-sloping spouts are used to withdraw the molten metal. The pots are evacuated, and the molten metal is sucked into the cast iron pot. The molten metal, blended in a holding furnace with other batches, may be fluxed, alloyed, and cast into various solid forms, or transported molten to fabricating plants as far as 300 miles away. The cells utilize direct current ranging from 65,000 to 150,000 amp; most plants have 80,000- to 100,000-amp cells. Anode current densities range from 600 to 800 amp/ft^ The voltage drop across a single cell is 4.5 to 5.0 v; across a potline, it may be as high as 1 ,000 v. Current efficiency ranges from 85 to 90 pet. Losses are principally caused by physical losses of metal through spillage and vaporization from the bath and by reoxidation of aluminum. Because of electrical resistance, the voltage efficiency is only 40 pet, with heat being lost by radiation and in the exhaust gases, in tapped metal, and in electrodes removed from the cell. Consequently, the overall energy efficiency is only about 35 pet. A further and more detailed description of the Bayer and Hall-Heroult processes appear elsewhere {12). COSTS OF ALUMINUM PRODUCTION Capital expenditures were calculated for exploration, acquisition, development, and mine plant and equipment; and for constructing and equipping the crushing, washing, and drying facilities. Capital expenditures for existing or new "greenfield" alumina refineries and aluminum smelters were also calculated for nonprodueers. The capital expenditures for the different mining and processing facilities include the costs of mobile and stationary equipment, construction, engineering, infrastructure (facilities and utilities), and working capital. The broad infrastructure category includes the costs of access and haulage facilities, water facilities, power supply, and personnel accommodations. Working capital is a revolving cash fund required for such operating expenses as labor, supplies, taxes, and insurance. The total operating cost of a project is a combination of direct and indirect costs. Direct operating costs include materials, utilities, direct and maintenance labor, and payroll overhead. Indirect operating costs include technical and clerical labor, administrative costs, facilities maintenance and supplies, and research. Other costs in the analysis are fixed charges, including local taxes, insurance, depreciation, deferred expenses, interest payments (if any), and return on investment. The cost elements of aluminum production are discussed in the following sections. MINE AND MILL CAPITAL COSTS Mine and mill capital costs (in 1980 dollars) for a new bauxite-mining operation can range from about $19 million for a relatively small operation requiring little or no infrastructure to almost $500 million for a large operation requiring extensive infrastructure such as rail and port facilities. l\/lost new mining operations, either planned or under construction, tend to be quite large with planned capacities of 3 to 11 million tons per year (tpy). A typical example of a new bauxite operation is the recently completed Trombetas Mine in Brazil, which has a capacity of 3.35 million tpy and cost approximately $230 million. Following are other examples of capital costs (in 1980 dollars) for developing or potential operations: According to MAS estimates, the planned Paragominas Mine in Brazil will produce about 6.9 million tpy and will cost around $480 million (including $240 million for infrastructure). The Mount Saddleback Mine and adjacent Worsley refinery in Western Australia are estimated to cost $1 billion. The mine plant and equipment and conveyor system are estimated to cost $320 million, the refinery approximately $300 million, and related infrastructure about $380 million. An integrated operation at Aurukun in northern Queens- land, Australia, is estimated at approximately $1.3 billion. The mine plant and equipment for a 2.3-million-tpy bauxite operation would cost about $300 million, the refinery about $300 million, the smelter some $260 million, and related infrastructure for the entire operation about $440 million. The Tougue deposit in Guinea, if developed as an 8-million-tpy operation, is estimated at $98 million for the mine plant and equipment, and at least $144 million for the railroad, expansion of the port at Conakry, power supply, and housing. If a 1-million-tpy refinery were built at Dabola, the estimated additional capital cost would be $825 million. Development of the Kibi bauxite deposit in Ghana as a 2-million-tpy operation would cost approximately $12.5 million for preproduction development, $1 1 million for mine equipment, and $8 million for mine plant. Related infrastruc- ture for railroad, power, and townsite facilities would cost approximately $150 million. A proposed 600,000-tpy alumina refinery at Tema would cost approximately $600 million; if a second smelter of 200,000-tpy capacity is built at Tema, the cost is estimated at $1 billion. MINE AND MILL OPERATING COSTS The direct operating costs of bauxite mining and milling are composed of five factors, broken down by percentage of mining and milling operating costs: Labor— 27 to 32 pet. Fuel oil— 8 to 9 pet. 12 Diesel fuel, lubricants, and tires — 15 to 19 pet. Maintenance — 21 to 27 pet. Miscellaneous costs — 18 to 21 pet. Although mine and mill operating costs around the world vary widely, these differences have little effect on variations of the total cost of aluminum Ingot. An analysis of actual and potential mines in five of the major producing countries shows which factors contribute to the variability of operating costs. The following countries are discussed: Australia, Brazil, Guinea, Guyana, and Jamaica. Australia Ten bauxite mines and deposits with actual or potential capacities ranging from 2,100,000 to 13,200,000 tpy were evaluated. Overburden is generally less than 1 m thick, and the average ore thickness ranges from 2.4 to 5.5 m. Most of the gravelly overburden is removed by scrapers, with dozers, front-end loaders, and, to a lesser extent, off-highway trucks. Blasting is required to break the hard-rock cap present at the surface of the bauxite in the western part of Australia, but this does not apply to the other deposits in the country. In the Darling Range, most of the overburden is removed by Euclid TS-14 scrapers and Caterpillar D9 bulldozers with attendant front-end loaders and off-highway trucks. When most of the gravel overburden has been removed in this manner, material in the hollows of the undulating cap rock is removed by backhoe and, with the gravel overburden, is hauled to a special surface stockpile reserved for use in land reclama- tion. The cap rock in the Darling Range must be blasted. Del Park uses Gardner Denver RDC-16B rotary blasthole drills to drill 1 1 5-mm holes on a 3.5- by 3.5-m pattern. Averaging 3 m in depth, the holes are loaded with an ammonium nitrate-fuel oil (ANFO) mixture and detonated with Anzomes primers and Cordtex. About 5,400 tons of bauxite is blasted per pattern. Mining is performed with 12- to 15-ton front-end loaders, which load the bauxite into rear-dump off-highway trucks that haul the ore from the pits to the crusher. The more scattered occurrences of ore bodies at Del Park, Huntly, and Mount William have led to the use of mobile crushing stations and conveyor haulage to the refineries. Bauxite in the Northern Territory and Queensland is usually loose and friable with little or no cap rock. Minor drilling may be necessary, and ripping the cap rock is occasionally required. Clearing topsoil and removing over- burden are usually done during the dry season; mining the bauxite continues year round. At Weipa, mining begins by clearing trees and scrub in the wet season; the amassed windrows are burned during the dry season. Topsoil and overburden are removed during the dry season by tandem- powered push-pull scrapers of 33-m^ capacity or, in some cases, 29-m= standard-wheel tractor scrapers. Often the topsoil and overburden are placed directly on the floor of adjacent mined-out areas and made ready for revegetation during the following wet season. Mining operations are carried out on a two-shift-per-day, 1 0-hr-per-shift basis. A 5-day workweek is normal, unless the stockpile gets low. The ore at Weipa is free flowing with only occasional areas of cap rock that require ripping. The in situ bauxite is sufficiently loose to permit excavation without drilling and blasting. At the Andoom Mine, track-mounted hydraulic excavators with 10-m^ buckets load the friable ore into 80-ton rear-dump trucks. Andoom is connected to the Lorim mill by a 19-km railway, limiting the average haul distance per truck to 3,000 m. The railhead at Andoom can be relocated so the mining operations are kept within a certain radius of the railhead. Mine operating costs throughout Australia range from $2.80 to $6.60 per ton, including removal of the overburden and ore, reclamation, transportation to the crusher, crushing, drying (for exported ore), and stockpiling for transportation to the refinery. Calcining costs for abrasive-grade bauxite are not included. Haulage methods include truck, rail, and conveyors, with the different methods occasionally being used at the same mine. As distances to crushers increase, mobile crushers and conveyors are sometimes used to combat rapidly escalating haulage costs. The distance to the crusher varies widely between mines and even between different areas within the same mine. Transportation costs to the refinery (or port) range from $0. 1 to $4. 1 per ton of ore, depending on the method of transport and distance. The most variable cost factor affecting operating cost appear to be the size of operation, haulage method and distance, continuity of the ore, and presence of a cap rock that requires blasting. Brazil The seven mines and deposits evaluated have actual or potential production capacities ranging from 400,000 to 15,000,000 tpy. For removing overburden, the mines use scrapers, shovels, front-end loaders, dozers, and/or drag- lines. Ore is mined by backhoe, and the average ore thickness ranges from 2 to 7 m. At Trombetas, overburden is removed by two 13-m^ Bucyrus Erie walking draglines; lesser amounts are removed by four Caterpillar 631 scrapers pushed by D8 bulldozers. Consisting of clay, gravel, or nodular bauxite and ferruginous laterite, the overburden is removed to expose the bauxite bed in a 254-m-wide strip. Blasting is occasionally required in the hard layer, which is about 1.5 m thick on the top of the massive bauxite bed. Blastholes 90 mm in diameter are drilled with two truck- mounted auger units. The blasting agent, ANFO, is used at the rate of 77 g per ton of broken material. Normally, the hard bauxite at Trombetas is loaded with three 4.6-m^ 190 Northwest backholes. Five Caterpillar 988 front-end loaders equipped with 4.5-m^ buckets are also available for loading in the mine and reclaiming from stockpile. The bauxite is loaded into Caterpillar 939 trucks outfitted with lightweight aluminum beds to increase their capacity from 32 to 35 tons. The haulage distance to the crusher, currently 2 km, will increase to 4 km as mining continues. Mining and milling costs in Brazil range from $4.20 to $7 per ton with beneficiation costs for refractory-grade bauxite ranging from $40 to $66 per ton of calcined bauxite. Transportation costs to the port or refinery range from $1 to $7.80 per ton, depending on distance and terrain. Most of the variations in operating costs are due to the varying haulage distances from the mine to the mill. Guinea ' Six mines and deposits with actual or potential capacities from 1 ,500,000 to 9,000,000 tpy were evaluated. The typical Guinea bauxite deposit forms the cap of a flat-topped mountain about 100 m higher in elevation than the surrounding valley. The overburden is up to 0.5 m thick, and the bauxite is up to 30 m thick. Mining may be done by either electric shovels or front-end loaders, with haulage by truck or rail. All ore is drilled and blasted. At Sangaredi, the ore is drilled, blasted, and loaded from 12- to 15-m-high benches into 70-ton railroad cars. Loading is by means of two P&H 1 900 electric shovels on each shift, with a third shovel as standby. A 1 ,000-hp locomotive pulls 20 to 25 cars around the loop in front of each shovel. As the shovels progress along the face, panels of prefabricated track, each 18 m long, are laid on the graded ground behind them. When the cut has been completed, the new track is connected to the loop, and the old track is ready for the next stage of track laying. The loaded train is moved back to the switchyard where 80- to 90-car trains are made up to haul to the Kamsar plant, where the ore is unloaded, crushed, dried (or calcined), stockpiled, and shipped. The ore is loaded 21 shifts per week at the rate of 650,000 tons per month. Although mining and milling costs in Guinea range from 13 $2.25 to $6.45 per ton, transportation costs to the port from several deposits in the interior are very high because of haulage distances of up to 500 km. Transportation costs to the refinery or port range from $0.50 up to $1 1 per ton. Guyana The 1 1 Guyanese mines evaluated are all open pit mines, with a stripping ratio between 8:1 and 10:1. Output ranges from 108,000 to 1,500,000 tpy. Overburden is 15 to 69 m thick, and the bauxite ore may be up to 1 5 m thick. Primary stripping is usually done by bucket-wheel excavator systems, with scrapers and hydraulic mining being used to a lesser extent. The remaining overburden is removed by walking draglines. At some mines, the top of the bauxite is cleaned off with bulldozers. A cap rock from 0.3 to 2 m thick on top of the ore is discarded because of its high silica content. The bauxite is blasted, mined, loaded, and trucked to a stockpile to await until rail or barge transport to the Linden or Everton mills. Heavy rainfall, inadequate drainage, and clayey soil result in difficult mining conditions. No land reclamation is in progress since the mines are in remote areas and do not affect any major agricultural areas or population centers. Total mining and milling costs range from $6.50 to $8.25 per ton of ore, with transportation costs to the refinery or port ranging from $0.25 to $3.50 per ton. Mines with lower stripping costs usually have higher haulage costs; thus, there is little variation in the total cost. The cost for beneficiating refractory-grade bauxite runs from $58 to $61 per ton of calcined bauxite. Jamaica Fifteen Jamaican mines and deposits with actual or potential capacities of 1,000,000 to 5,000,000 tpy were evaluated. Filling karst depressions and sinkholes in highly fractured limestone, these deposits reflect the fault systems and lineation patterns of the limestone. The areal extent of each deposit varies greatly, with the thickness of the bauxite extending up to 43 m. Only one mine had overburden exceeding 1 m in thickness. Overburden is usually stripped by scrapers or bulldozers; and most mining is done by draglines and shovels, with loading by front-end loaders. Transportation from mine to mill or mine to refinery is by truck, rail, conveyor, or aerial tram. At the Kirkvine Mine, Caterpillar 631 B tractor scrapers strip the overburden; the stripped overburden (topsoil) is stock- piled for reclamation. Mining is conducted by one 5.7-m^ Baldwin Lima Hamilton 2400B dragline, one Caterpillar 992 7.7-m^ loader, and one Warner Swasey 3.5-m^ backhoe. The dragline and front-end loader work with a Caterpillar D9 bulldozer, which rips and cleans the pit face. Ore is hauled in eight Caterpillar 773 50-ton trucks to a central stockpile. Haulage distances average 2.6 km on 15-m-wide haul roads with a maximum 6-pct grade. The ore from the stockpile is transported to the alumina plant by a 1.8-km-long English cable belt conveyor. Mining costs in Jamaica range from $4 to $5 per ton, including haulage costs for locally refined bauxite. Milling costs, mainly drying, for exported bauxite range from $1 .80 to $2 per ton. Locally refined bauxite is not dried and incurs no milling cost. LEVIES, ROYALTIES, AND TRANSPORTATION Other elements that greatly affect the cost of bauxite include capital charges, production taxes or levies, royalties, and transportation to the refinery. The bauxite levies and royalties charged by the main bauxite-producing countries are shown in table 8. Table 8. Country Bauxite levies and royalties in the main bauxite-producing countries Levy Royalty' Comments Australia None. Dominican Republic. 7.7 pet of U.S, Ingot price. Variable; ranges from nil to $1 .20/ton. $0,60/ST Ghana None. 6 pet of realized value of ore plus mineral duty of 1 pet on realized ore selling price. Nil applies to Alcoa, which pays royalties on alumina. Alcoa now pays a minimum of $17 per ton in lieu of levy. Guinea Guyana . Ranges from 0.5 to 0.75 pet of price of ingot depending on grade of bauxite. . None None $0.04 to $0.10 per LDT. Haiti . 7.5 pet of U.S. ingot price. $0.50/ST Indonesia Jamaica . 10 pet of FOB export value. . 5.5 to 6.8 pet of U.S. ingot price. Mineral tax of $0.60/ton. $0.55/LDT Sierra Leone . . Suriname . None . 5.2 pet of U.S. ingot price. $0.27/ton $0.50/LDT All operations Government owned. Levy indexed to Reynolds U.S. ingot price. Use ratio of 5 ST = 1 ST metal. Levy variable depending on base price; rate decreases as base price increases. Levy based on Alcoa U.S. ingot price. ' LDT— long dry ton; ST — short ton. Sources: The World Aluminum Industry, v. 1 ; Australian Mineral Economics Pty. Ltd., Sydney, Australia, 1981, 410 pp.; the Jamaica Bauxite Institute; and the International Bauxite Association. Calculations for determining the amount of levy charged by a producing country are exemplified in the following sample levy: If the rate of a sample levy on 1 LDT (long dry ton) of bauxite is 6 pet of the ARP (average realized price) of 1 ST (short ton) of primary aluminum, the levy is related to the average realized price of aluminum according to the following formula (3): L=- (PARC), where L = the production levy per LDT of bauxite, P = the bauxite tax per pound of aluminum as a percent of PARC, F = the LDT of bauxite required to produce 1 ST of aluminum, and PARC = the average realized price of primary aluminum per ST in U.S. dollars. At an average price of $0.72 per pound for primary aluminum, the total levy per LDT of bauxite is equal to: 0.06 4.3 (2000) (0.72) = $20.09. The 4.3 in the denominator is the bauxite equivalent in LDT of 1 ST (2,000 lb) of metal. This figure is based on a bauxite-alumina conversion factor of 2.2 LDT/ST and an alumina-aluminum factor of approximately 1.95/1. The bauxite-equivalent factor will vary among countries, depend- ing on their average grade of bauxite. The 4.3 factor applies to Jamaica and some other countries. 14 Table 9. — Selected bauxite shipping costs^ Source of bauxite Destination of shipment Freight cost, U.S. dollars per ton Date of freight cost Australia: Gove. Northern Territory Weipa. Queensland Weipa-Gove . Brazil: Amazon. . . Dominican Republic: Cabo Rojo Greece: Itea Guinea: Port Kamsar Indonesia: Bintan Island . Jamaica: Various ports . Port Rhoades. Stade, Germany. Gladstone. Queensland . Porto Vesme, Italy Netherlands-Germany. . . Germany Japan U.S. gulf United States Texas, U.S.A. Taranto, Italy U.S. gulf Canada (Port Alfred, Quebec) Europe Yugoslavia Rotterdam, Netherlands. United States Louisiana, U.S.A.. 10.50-12.50 Feb. to June 1979 20.00-21.50 Jan. to June 1980. 17.00 Nov. 1980. 18.75 Jan. to April 1981. 8.00 May 1981. 12.50-12.65 Jan. to May 1979. 18.00 Nov. 1980. 17.50 Mar. 1981. 15.00-20.00 May 1981. 7.50 Nov. 1979. 8.00- 9.50 Sept. 1980. 5.50 April 1980. 5.50 Mar. 1980. 10.25 May 1981. 10.50 May 1981. 10.50 May 1981. 20.00 Aug. 1980. 14.00-14.50 Mid-1979. 4.40- 4.90 Sept. 1980. 5.50 May 1981. Costs shown are "spot prices," which would normally be higher than prices paid under long-term contracts or on company-owned ships. With the exception of the Dominican Republic, all the countries listed in table 9 also charge corporate income tax on any profits earned by mining companies engaged in producing bauxite within the individual country. An overview of bauxite shipping costs is presented in table 9 based on cost data collected and published by Australian Mineral Economics Pty. Ltd. (2, p. 247). As shown in table 9, the Caribbean countries have a significant cost advantage in shipping to the United States compared with the shipping costs of bauxite from Brazil or Guinea. This advantage is overshadowed, however, by the higher bauxite levies the Caribbean countries charged. The IBA has furnished a comparative cost estimate (in 1 980 dollars) for bauxite delivered to the United States from new operations in Australia, Brazil, and Jamaica. These estimates of the total cost per ton of bauxite (including servicing of capital) ranged from $22.70 to $25.60 for Australia, $21 .00 to $23.90 for Brazil, and $37.60 to $39.00 for Jamaica. Of these costs, transportation accounted for 57 pet of the total delivered cost of bauxite from Australia, about 38 pet for Brazil, and slightly over 11 pet for Jamaica. The higher cost for Jamaican bauxite is caused by the bauxite levy, which accounted for over 63 pet of the total cost of Jamaican bauxite at the end of 1979. Estimated operating costs for the bauxite operations analyzed in this study, by country, are shown in table 10. Since showing cost data for individual operations would divulge confidential information, the data shown for each country are a weight average of individual-property cost data. Table 10. — Operating costs of bauxite production^ Mine and mill Transportation Levy or Total cost at Country operating to port or severance port or local cost refinery tax refinery Australia $4.47 $1.12 $1.20 $6.79 Brazil 5.64 4.13 1.00 10.77 Costa Rica 6.28 .30 6.58 Dominican Republic . 7.19 1.00 ^23.20 31.39 France 9.08 5.96 15.04 French Guiana 17.58 2.00 19.58 Ghana 6.38 4.95 3.42 14.75 Greece 12.81 4.00 16.81 Guinea 5.44 6.56 9.50 21 .50 Guyana 7.77 1 .27 .05 9.09 Haiti 8.73 1 .36 23.69 33.78 India 3.24 2.96 .49 6.69 Indonesia 8.51 3.46 1.05 13.02 Jamaica 5.61 .85 ^21.00 27.46 Malawi 2.80 2.50 5.30 Sierra Leone 7.10 4.25 .27 11.62 Suriname 8.42 2.17 18.50 29.09 Turkey 1 5.05 4.20 9.00 28.25 United States 15.09 15.09 Venezuela 5.00 7.76 12.76 ' Costs presented for each country are a weight average of estimated operating costs for all the mines and deposits evaluated in this study. The assumptions used in determining whether bauxite was exported or refined domestically are presented in appendix A. ^ Alcoa pays a flat rate of approximately $17 per ton of bauxite in lieu of the levy or corporate income taxes. Using a $17-per-ton rate of tax would reduce the FOB (port) cost of bauxite to $25.19. ^ The Jamaican bauxite levy was reduced at the end of 1979. The average levy for Jamaica in 1980 was closer to $16 per ton. Using a $16 levy would reduce Jamaica's average cost at the port or local refinery to $22.46. COST ELEMENTS OF ALUMINA REFINING Capital and operating costs for typical alumina refineries in the United States, Western Europe, and Australia have been estimated for this study. Although these refineries are ^hypothetical, the costs are typical of those a new refinery of 800,000-tpy capacity would incur in each of the three areas. All the capital and operating costs for new refineries in this study use or adapt these models. Capital Costs Capital costs for alumina refineries, or for any large construction project, are strongly influenced by many factors, including {8, p. 33) — access to site topography of site environmental penalties availability of infrastructure time scale of construction climate availability of skilled labor industrial relations labor rates access to materials import duties The cost models for new refineries were developed on the following assumptions: 15 Table 11. — Typical alumina refinery capital costs^ Bayer high temperature. United States Bayer low temperature United States Europe Australia Bauxite source Caribbean Capital cost, thousand U.S. dollars: Onsite 470,000 Offsite 75,000 Africa 445,000 75,000 Africa 465,000 75,000 Australia 485,000 90,000 Total fixed . . Working capital 545,000 20,000 520,000 20,000 540,000 20,000 575,000 20,000 Total Cost per annual ton capacity 565,000 $710 540,000 $675 560,000 $675 595,000 $745 ' Capital costs are in 1979 dollars because of the assumption that the refinery began production in that year. A refinery beginning production in 1980 would have a higher capital cost. 1 . The economic life of the plant over which the assets are depreciated is 20 years. 2. Of the total capital cost of the plant, 70 pet is funded through long-term (20-year) loans on which the real rate of interest is 5 pet; the remaining 30 pet is funded through equity capital on which the real pretax rate of profit is 1 pet. 3. The rated capacity of the refineries is 800,000 tpy; they would operate at 95 pet of capacity with annual production of 760,000 tpy of metal-grade alumina. The year of plant startup is 1979. 4. The cost estimates refer to new plants at new sites, with adequate basic infrastructure assumed to exist at the plant locations. Estimated capital costs for the three regions, in 1979 U.S. dollars, are shown in table 1 1 ; published estimates of capital costs for worldwide refinery projects are presented in table A-2. Operating Costs The operating cost models of the four typical refineries included in this study are shown in tables 12, 13, 14, and 15. For each refinery, input requirements of raw materials, utilities, and operations have been estimated. In addition, the costs for these input factors — as well as administrative costs, capital charges, and profit — have been calculated. Following is a discussion of some of these factors. Raw Materials Excluding the bauxite cost, raw-material input cost for alumina production is not a major element of the refining process total cost. However, the chemical composition of the bauxite used is an important determinant of alumina-refining costs. The main factors determining the raw-material inputs and, therefore, the conditions for digestion and energy requirements for alumina refining are as follows: 1 . The "available" alumina content of the bauxite ore. 2. Impurities in the bauxite, especially the reactive silica content. 3. The proportions of monohydrate to hydrate in the ore. 4. The degree of recovery and recycling of the caustic soda. 5. The caustic makeup. 6. The moisture content of the bauxite ore feed. Table 12. — Estimated refinery operating costs for processing Caribbean bauxite in the United States' Units of input Unit cost per ton AI2O3 Raw materials: Caribbean bauxite (2.52 tons/ton) NAp Caustic soda (89 kg/ton at $140/ton) $12.46 Other materials 2^ Subtotal 14.75 Utilities: Fuel oil (400 I/ton at 13.1(6/1) 52.32 Electricity (200 kWh/ton at 2.94c/kWh)2 5^ Subtotal 58.20 Operations: Direct labor and supervision (1 .0 worker-hr at $12.43/worker-hr) 12.43 Direct labor overhead (60 pet of direct labor) 7.46 Maintenance (2.5 pet of fixed capital cost) 17.93 Subtotal 37.82 Administration: Administration and sales (10 pet of direct labor) 1 .24 Property tax and insurance (1 .5 pot of fixed capital cost) ^ 10.76 Subtotal 12.00 Cash cost of production ^1 22.77 Capital charges: Depreciation 35.86 Loan interest 26.02 Subtotal 61.88 Total costs of production FOB 1 84.65 Pretax equity profit 22.30 Total cost and profit FOB 206.95 NAp Not applicable. ' Cost of bauxite excluded; costs are 1980 U.S. dollars. ^ Estimated average kilowatt-hour charge for new operations. ^ For this study, when it was assumed that a new refinery would be built, the operating cost used in the economic analysis is the cash cost of production, since depreciation and profit are accounted for in the cash-flow analysis. If a toll charge is assumed, the cost charged is the total cost and profit FOB. Table 13. — Estimated refinery operating costs for processing West African bauxite in the United States' Units of input Unit cost per ton AI2O3 Raw materials: West African bauxite (2.22 tons/ton) NAp Caustic soda (36 kg/ton at $1 40/ton) $5.04 Other materials 229 Subtotal 7.33 Utilities: Fuel oil (400 I/ton at 13.1 C/l) 52.32 Electricity (200 kWh at 2.94c/kWh)2 5^ Subtotal 58.20 Operations: Direct labor and supervision (1 .0 worker-hr at $12.43/worker-hr) 12.43 Direct labor overhead (60 pet of direct labor) 7.46 Maintenance (2.5 pet of fixed capital cost) 17.11 Subtotal 37.00 Administration: Administration and sales (10 pet of direct labor) 1 .24 Property tax and insurance (1 .5 pet of fixed capital cost) . 10.26 Subtotal 11.50 Cash cost of production ^114.03 Capital charges: Depreciation 34.21 Loan interest 24.87 Subtotal 59.08 Total costs of production FOB 173.11 Pretax equity profit 21.32 Total cost and profit FOB 194.43 NAp Not applicable. ' Cost of bauxite excluded; costs are 1980 U.S. dollars. ^ Estimated average kilowatt-hour charge for new operations. ^ For this study, when it was assumed that a new refinery would be built, the operating cost used in the economic analysis is the cash cost of production, since depreciation and profit are accounted for in the cash-flow analysis. If a toll charge is assumed, the cost charged is the total cost and profit FOB. 16 Table 14. — Estimated refinery operating costs for processing West African bauxite in Western Europe' Units of input Unit cost per ton AI2O3 Raw materials: West African bauxite (2.22 tons/ton) NAp Caustic soda (36 kg^n at $1 58 ton) $5.70 Other materials 2.17 Subtotal 7.87 Utilities: ~ Fuel oil (400 I ton at 14.3c I) 57.11 Electricity (200 kWh at 3.02c kWh)^ 6^ Subtotal 63.15 Operations: Direct labor and supervision (1.0 worker-hr at S11.16worker-hr) 11.16 Direct labor overhead (50 pet of direct labor) 5.58 Maintenance (2.5 pet of fixed capital cost) 17.76 Subtotal 34.50 Administration: Administration and sales (10 pet of direct labor) 1.12 Property tax and insurance (1.5 pet of fixed capital cost) 10.66 Subtotal 11?78 Cash cost of production ^11 7.30 Capital charges: Depreciation 35.53 Loan interest 25.79 Subtotal 61^ Total costs of production FOB 1 78.62 Pretax equity profit 22.1 1 Total cost and profit FOB 200.73 NAp Not applicable. ' Cost of bauxite excluded: costs are 1980 U.S. dollars. ^ Estimated average kilowatt-hour charge for new operations. ^ For this study, when it was assumed that a new refinery would be built, the operating cost used in the economic analysis is the cash cost of production, since depreciation and profit are accounted for in the cash-flow analysis. If a toll charge is assumed, the cost charged is the total cost and profit FOB. Table 15. — Estimated refinery operating costs for processing Australian bauxite in Australia' Units of input Unit cost per ton AI2U3 Raw materials: Australian bauxite (3.47 tons/ton) NAp Caustic soda (56 kg/ton at $159/ton) $8.91 Other materials 2.27 Subtotal 11.18 Utilities: Fuel oil (400 I/ton at 16.1C/I) 64.51 Electricity (200 kWh at 2.708c/kWh)2 541^ Subtotal 69.92 Operations: Direct labor and supervision (1 .0 worker-hr at $9,39/worker-hr) 9.39 Direct labor overhead (50 pet of direct labor) 4.70 Maintenance (2.5 pet of fixed capital cost) 18.91 Subtotal 33.00 Administration: Administration and sales (10 pet of direct labor) .94 Property tax and insurance (1 .5 pet of fixed capital cost) . 1 1 .35 Subtotal 12.29 Cash cost of production ^1 26.39 Capital charges: Depreciation 37.83 Loan interest 27.40 Subtotal 65.23 Total costs of production FOB 1 91 .62 Pretax equity profit 23.49 Total cost and profit FOB 21 5.1 1 NAp Not applicable. ' Cost of bauxite excluded; costs are 1980 U.S. dollars. ^ Estimated average kilowatt-hour charge for new operations. ^ For this study, when it was assumed that a new refinery would be built, the operating cost used in the economic analysis is the cash cost of production, since depreciation and profit are accounted for in the cash-flow analysis. If a toll charge is assumed, the cost charged is the total cost and profit FOB. 7. The choice of temperatures, pressures, concentrations, times, and tank sizes used in the digestion process. The quantity of bauxite input required to produce 1 ton of alumina can range from a minimum of 2.1 tons to a maximum of 3.5 tons from some of the newer Australian deposits, depending on AI2O3 grade and silica content. Generally, 1.1 units (unit weight) of alumina and 1 .2 units of soda are lost for each unit of reactive silica in the ore. Thus, the reactive silica content of the ore will increase both the quantity of bauxite required and caustic soda consumption. The loss of soda is made up by adding caustic soda or soda ash to the spent leach solution to reach the appropriate caustic concentration before recycling. The reactive silica content of different bauxites can vary considerably: for West African and Western Australian bauxites, it is low (1-2 pet); for Jamaican bauxite, it is moderate (approximately 3 pet); and it may reach 5 pet (after washing) in the case of the Weipa deposit in Northern Queensland, Australia. Energy Requirements Most of the energy required for alumina refining is consumed in producing steam and power and in calcining alumina. A clean fuel source such as fuel oil or natural gas is used to avoid contaminating the calcination product; coal-derived gases may become economic in the future. Any type of fuel may be used for steam and power generation, but common practice is to use the same fuel source as used for calcination. A "typical" refinery would consume 400 1 of fuel oil and 200 kWh of electricity to produce 1 ton of alumina, which (excluding the cost of bauxite) would represent some 24 pet of the total operating cost of the refinery. Labor Costs Direct-labor inputs per unit of output, relatively low in producing alumina, constitute a small percentage of total dperating costs. Based on the cost models used, direct labor and supervision, overhead, and maintenance would amount to some 19 pet of the total operating cost of a U.S. alumina refinery. This percentage would be similar to other developed countries. Transportation As with bauxite, shipping costs for alumina are a significant factor in the overall delivered cost of alumina. A sample of freight rates for shipment of alumina is shown in table 16. COST ELEMENTS OF ALUMINUM SMELTING Capital Costs With the same methodology as used for alumina refineries, capital and operating costs for "typical" new aluminum smelters in the United States, Western Europe, Japan, and Australia have also been estimated. These estimates represent the typical costs that would be incurred by the construction of a new smelter of 200,000-tpy capacity in each 17 Table 16. — Freight rates for shipment of alumina on principal international routes in 1 980 Origin Destination Freight rate, U.S. dollars per ton i Australia Japan-Taiwan U.S. east coast U.S. west coast New Zealand South Africa Argentina Persian Gulf Egypt Western Europe Iceland U.S.S.R. (Black Sea) Caribbean United Kingdom Western Europe (excluding U.K.) . U.S. east coast Ghana Venezuela (origin Suriname) Canada (east coast) France Norway Greece Netherlands Guinea Western Europe Southern Europe (Italy, Austria) . . Cameroon Italy (Sardinia) Western Europe Japan Canada (west coast) Egypt Yugoslavia U.S.S.R 19-20 25-30 16-18 8-10 18-20 50 21 .50-23 23-25 35-40 31 30-35 19.50-22 23-25 8-10 20-22 4-5 10 11-12 10 12-15 13-16 8 11-12 16 23-25 10 Source: Commodities Research Unit, Ltd. (CRU). of the four areas. The cost models for new smelters were developed on the following assumptions: 1 . The economic life of the plant over which the assets are depreciated is 20 years. 2. Of the total capital cost of the smelter, 70 pet is funded through long-term (20-year) loans with a real rate of interest of 5 pet; the remaining 30 pet is funded through equity capital on which the real pretax rate of profit is 1 pet. 3. The rated capacity of each of the smelters is 200,000 tpy, with a 95-pet-eapacity utilization and annual production of 1 90,000 tpy of aluminum ingot. The year of startup is 1 979. 4. Although the cost estimates are for new smelters, it is assumed that adequate basic infrastructure exists at the smelter site and sufficient electric power is available. Estimated capital costs for the four regions are shown in table 17. Published estimates of capital costs for worldwide smelter projects are presented in table A-3 in the appendix. Many of the costs presented in the appendix for projects not yet completed may be understated owing to continuing inflation; however, they do give a valid comparison of the costs associated with different areas of the world. The lesser developed countries have higher associated capital costs than the developed countries because of a combination of higher construction costs and basic infrastructure costs, such as power generation and transport systems. Table 17. — Capital costs of typical aluminum smelters for cost moder (Thousand U.S. dollars) Western Facilities United States Europe Japan Australia Onsite 440,000 440,000 440,000 470,000 Offsite 20,000 20,000 20,000 80,000 Total fixed 460,000 460,000 460,000 550,000 Working capital 50,000 50,000 50,000 70,000 Total 510,000 510,000 510,000 620,000 Cost per annual ton capacity 2,550 2,550 2,550 3,100 ' Capital costs are in 1979 dollars because of the assumption that the smelter began production In that year. A smelter beginning in 1980 would have a higher capital cost. Operating Costs The operating costs of the four typical smelters included in this study are presented in tables 18, 19, 20, and 21. The operating costs are broken down into three factor-input categories, as described in the following paragraphs. Raw Materials Raw material costs are the costs for petroleum coke and pitch for anode manufacture and for fluorine products for the electrolytic bath. Variations in the requirements for raw material inputs depend upon a number of factors, including — 1 . Cell operating variables, such as current, voltage and size of pots, and anode type. 2. Age and capacity of plant. 3. Degree of control exercised in maintaining optimum operating conditions. 4. Gas scrubbing systems for the recovery of fluorides. The cost of raw materials (not including alumina) constitutes some 8 to 10 pet of the total cost of aluminum smelting. Labor Although labor costs per worker-hour vary significantly around the world, the differences in labor costs as a percentage of total operating cost at different smelter locations are not substantial since labor constitutes a small percentage of the total operating cost. In the United States, direct labor costs are approximately 6 pet of the total aluminum production costs. Energy Costs Often accounting for up to 60 pet of the total operating cost of aluminum ingot production, electricity is the critical cost factor in aluminum smelting. Electric power costs charged to aluminum smelters vary widely throughout the world and are the principal reason for the variation in aluminum ingot production costs between producing locations. With an assumed average electricity consumption of 1 4,200 kWh per ton of aluminum produced, a price change of 1 mill/kWh can result in a variation in operating costs of $14.20 per ton of aluminum. Table 22 provides an overview of electric power costs for various aluminum smelters in 1980. For many years, the aluminum industry has benefited from low-cost, essentially subsidized power, as typified by the historic pricing policies of the BPA and TVA in the United States. In the past decade, however, increasing electricity demand, slow growth of nuclear power, and lack of new hydropower resources in the industrialized countries have caused growing competition for available electrical power. To conserve suppliers for residential and light industrial users, power suppliers in industrialized countries have sought to renegotiate contracts with aluminum companies. Conse- quently, industry has faced rapidly rising energy costs, particularly in those countries such as Japan and Italy that use electricity generated from imported oil. Furthermore, the tendency of alternative fuel sources to align their price structure to higher oil prices has brought about steep increases in the cost of electricity generated from natural gas and coal (10, p. 42). Rising energy costs have caused a net shift of new smelting capacity away from the traditional locations in industrialized nations and have caused some countries to cut back on existing capacity. For example, Japan reduced its operating capacity by 540,000 tons per year to 1.1 million tons in 1978 and planned cuts of an additional 400,000 tons by 1985 (6, p. 10). Most new smelting capacity announced in the past few years is to be in nations offering a comparative advantage in energy costs with nearby sources of bauxite and alumina, such as Australia, Brazil, and Indonesia. Other countries announcing new smelter capacity include the oil-producing nations in the Middle East, such as Bahrain and 18 Table 18. — Estimated operating costs for smelt- ing aluminum in the United States* Units of input Unit cost per ton Al Raw materials: Alumina (1.93 tons ton) NAp Petroleum coke (0.40 ton ton at $149/ton) $59.64 Pitch (0.10 ton ton at $229 ton) 22.90 Other materials 28.70 Subtotal 1 1 1 .24 Utilities: Electricity (14,200 kWh at 2.94c/kWh)2 417.20 Operations: Direct lat)or and supervision (4.0 worker-hr at $12.43 wori 31 J . U.S Europe. Japan . . . Guyana Yararlbo do. .US. ... Europe. Japan. . . U.S. . . . Europe . Japan . . 100 34 33 33 100 34 33 33 34 33 33 {U.S Europe Venezuela. . . {U.S Europe Venezuela. . . f Europe l Venezuela... U.S Europe Japan {U.S Europe Venezuela. . . U.S Europe r U.S ■i Europe L Venezuela... U.S Europe Japan r U.S ■s Europe L Venezuela... U.S Europe Japan U.S Europe Japan U.S India U.S.S.R India do. U.S.S.R India do. do. Japan Indonesia . . . {U.S.-Canada. Europe Ghana Venezuela. . . / U.S I Europe r U.S.-Canada. J Europe I Ghana L Venezuela... Canada do. U.S do. U.S r U.S ■i Europe L Venezuela... Canada U.S U.S {U.S Europe Venezuela. . . U.S / U.S I Europe Malawi f Europe l Canada Europe Canada 76 21 3 76 21 3 50 50 34 33 33 76 21 3 50 50 76 21 3 34 33 33 76 21 3 34 33 33 34 33 33 HAITI Miragoane Producer. U.S. 100 100 INDIA Amarkantak Anantagiri Bagru Hills Chandgad Chintaplee. Gandhamardan. Lohardaga Panchpatmali . . , Producer , Nonproducer . , Producer do. , Nonproducer . do. , Producer , Nonproducer . . India. . . . .U.S.S.R. . India do. do. do. do. do. 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 INDONESIA Bintan Island. Singakawang , Producer .... . Nonproducer . Japan . Indonesia 100 100 100 100 JAMAICA Alpart Breadnut Valley Cambridge , Producer Jamaica do do. . Nonproducer do . Ewarton Kirkvine Lydford Maggotty New Market East . . Producer Jamaica. .do. .do. do. U.S. . Temporary shutdown . . Nonproducer Samaico do. .U.S. .Jamaica. do. Schwallenburgh West . Spanish Town West . . Trelawny .do. .do. .do. .Jamaica. . U.S Trelawny Central do. Water Valley Williamsfleld East. , Producer , Nonproducer . U.S .Jamaica. . U.S .Jamaica. 100 100 100 100 100 100 100 100 100 100 100 100 100 too 100 52.2 30.3 8.0 9.5 50 50 52.2 30.3 8.0 9.5 100 100 100 100 100 34 33 33 100 100 100 34 33 33 100 50 50 MALAWI Mulanje Mountain Nonproducer . Malawi . 100 100 SIERRA LEONE Moyamba. Port Loko . . Producer . Nonproducer . Sierra Leone. . U.S Sierra Leone. 100 43 57 45 45 45 55 28 Table A— 1. — Assumed location of refineries and smelters for the study — Continued Deposit Status Location of refinery Percentage to eacfi refinery SURINAfvIE Location of smelter Percentage to each smelter Bakhuis Mts. Moengo ... . Nonproducer . Producer .... Leiyborp Onverdacht .do. do. Suriname. , Suriname. US . Suriname. US . US Suriname. 100 50 50 75 25 52 48 US Suriname. U.S Suriname. U.S US Suriname. 100 50 50 75 25 52 48 TURKEY Seydisehir Producer Turkey . , . 100 Turkey 100 UNITED STATES Alcoa Bauxite Quapaw Bauxite Reynolds Bauxite Producer do do U.S US US 100 100 100 U.S US US 100 100 100 VENEZUELA Los Pijiguaos Nonproducer Venezuela 100 Venezuela 100 Table A— 2. — Capital costs of alumina refineries Country Location Type' Capacity, thousand tons Cost,^ million U.S. dollars Year^ Cost per annual ton of capacity, U.S. dollars SOUTH AfylERICA Brazil Venezuela Belem fylantanzas N N 800 1,000 409 650 1978 1979 511 650 CARIBBEAN Jamaica Do Virgin Islands N/lanchester Clarendon St. Croix N E E 600 550 550 500 350 350 1980 1980 1979 636 636 636 AUSTRALIA Queensland Western Australia Do Do Gladstone Pinjarra Wagerup Worsiey E E N N 350 300 500 1.000 242 33 427 1,000 (a) 1980 1980 1980 1980 692 110 854 1,100 EUROPE Greece Distomon Greece Gulf of Corinth Ireland Aughinish Italy Portoscuso ... Norway Mongstad E 100 120 1980 1,200 N 600 600 1980 1,000 N 800 700 1979 870 E 720 670 1980 930 N 350 244 1979 697 ASIA N 800 861 (b) 1979 1,077 N 300 258 (b) 1979 861 N 500 600 1979 1,200 N 600 502 1979 836 N 500 325 1978 650 N ' 800 500 1979 625 India Orissa Do Kutch Iran Teheran Indonesia Kuala Tanjung Do Kalimantan . . . Philippines Mindanao AFRICA Guinea Friguia . . . Guinea Aye Koye . Ghana Kibi 350 2,000 600 350 1 ,200 (b) 240 (b) 1978 1978 1978 1.000 600 400 'N — new plant: E — expansion of existing plant ^a — includes cost of new mine: b — includes cost of mine development ^ Year in which cost information announced. Note. — In North America, the proposed Alumet refinery is to process alunite rather than bauxite: capital cost is $920 per ton of new capacity. Source: Commodities Research Unit, Ltd. (CRU). Data compiled from various publications. 29 Table A— 3. — Capital costs off aluminum smelters — new (N) and expansion (E) projects Plant location Nor E Capacity, tpy Total cost, million U.S. dollars Unit cost per annual ton NORTH AMERICA La Bale, Canada N 57,000 100 ( Mount Holly, U.S.A N 180,000 400 ( Sebree, U.S.A E 54,000 97 ( Tabor City, U.S.A N 181,000 400 ( 1979) $1,754 1979) 2,200 1979) 1,796 1980) 2,210 EUROPE St. Jean De Maurienne, France' N 27,000 45.8 Inwerk West Germany E 16,000 89.6 ( 1979) 1,698 1978) 5,601 1978) 1,836 1979) 4,293 1979) 2,764 1979) 1,655 1979) 2,007 1978) 2,378 Ardal, Norway E 32,000 58.7 ( Hoyanger, Norway^ E 46,000 1 97.5 Karmoy, Norway E 50,000 1 38.2 San Ciprian, Spain^ N 1 80,000 298 ( Lochaber, U.K N 37,000 74.3 ( Mostar, Yugoslavia N 90,000 214 AUSTRALIA AND NEW ZEALAND Farley, Australia N 236,000 700 Gladstone, Australia (Alcan) N 100,000 290 Gladstone, Australia (Gladstone Aluminum) . . N 206,000 700 Kurri Kurri, Australia E 22,500 45 E 45,000 107 Port Henry, Australia E 57,000 96 1980) 2,966 1979) 2,900 1980) 3,398 1979) 2,000 1979) 2,378 1979) 1,684 1979) 3,292 1980) 2,666 Bluff New Zealand E 75 000 200 SOUTH AMERICA Belem, Brazil N 320,000 960 (1978) 3,000 Saramenha, Brazil E 28,000 90 (1979) 3,214 Sepetiba Bay, Brazil N 85,000 370 (1979) 4,353 Vera Cruz, Mexico E 45,000 56 (1978) 1,244 Puerto Ordaz, Venezuela E 70,000 1 60 (1 978) 2,286 San Felix, Venezuela N 280,000 715 (1979) 2,555 MIDDLE EAST AND FAR EAST MSila, Algeria N 127,000 375 Alba, Bahrain E 45,000 120 Jebelali, Dubai" N 135,000 1,000 Hirakud, India E 34 000 76 3 1979) 2,953 1979) 2,667 1980) 7,407 1980) 2,244 1980) 5,454 1980) 10,222 1979) 8,888 1980) 5,714 1980) 3,857 1978) 1,193 Orissa, India ... N 220 000 1 200 Kuala Tanjung, Indonesia N 225,000 2,300 Oraco City, Philippines N 70,000 400 Mindanao, Philippines N 140,000 540 Kaohslung, Taiwan N 14,000 16.7 ' Replacing old smelter by a new smelter. ^ Includes new powerplant. ^ Part of integrated complex, 40 pot of capital cost. " 49 pet smelter, rest: power plant, desalination complex. Source: Commodities Research Unit, Ltd. (CRU). Data compiled from various publications. Table A— 4. — Mines and deposits Investigated but not included in this study Location and name Comments Angola: Luanda Small resource. Australia: Gidgiegannup Do. Mirboa North Do. Moss Vale Do. Brazil: Carajas Resource not delineated yet at the demonstrated level. Serra do Acapuzal All refractory grade. Serra do Almeirim Do. Cameroon: Fongo Tongo Tonnage is inferred. Ngadundal Do. Chile: Bio Bio Resource is high-alumina clay — not bauxite. Colombia: Popayan-Cali Tonnage is inferred. Fiji: Vanna Levu Island No information available. France: Le Recoux Small tonnage — almost depeleted. Maran-Pereille Reserves depleted. Greece: Elaion Mine No information available. Fiorina Refractory grade only. Guyana: Blue Mountains Inferred resource only. Hungary: Bakonys Zentlaszho Cost data not reliable. Fejer Do. Fenyofo Do. Italy: San Guovanni Small reserves. Save. Do. Location and name Comments Madagascar: Manantenina Inferred resources only Malaysia: SE Jahore-Pengerang Small reserves. Telok Ramunia Reserves depleted Mali: Bamako Inferred resources only. Turkey: Milas Refractory bauxite. Venezuela: Delta Amacuro Raw prospect. Nuria Plateau Do. Serrania De los Guaicos Do. Yugoslavia: Bosanska Krupa Cost data not reliable. Bracan Do. Cetinje Do. Jajce Do. Jesenica Do. Klina Do. Krusevo Do. Mostar Do. Niksic Do. Obrovac Do. Ornis Do. Posusje Do. Pristina Do. Rovinji Do. Sumarnic Do. Vlasencia Do. Zadar Do. Zaton Do. 30 APPENDIX B.— GEOLOGY OF SELECTED DEPOSITS IN MAJOR BAUXITE-PRODUCING REGIONS AUSTRALIA BRAZIL Darling Range Bauxite operations in the Darting Range area of Western Australia include the Jarrahdale, Huntly, and Del Park Mines and the deposit being developed at Mount William. The Darling Range bauxite is essentially an alumina-rich laterite with a variable content of iron oxides and quartz. Believed to be of Tertiary age, these bauxites have been derived from the basement granites by a process of leaching and redistribution of the dissolved minerals by ground water. Subsequent removal of excess iron and silica from the parent laterite was effected by good drainage. These bauxitic laterites form a discontinuous surface horizon with the higher grade deposits occurring on a dissected peneplain between 250 and 300 m above sea level. Individual ore bodies range in size from less than 100,000 tons to more than 4 million tons. The, average thickness of the bauxite is 4.5 m, overlain by about 0.5 m of gravelly overburden. A typical bauxite profile consists of a hardcap averaging 1 m in depth underlain by a friable zone which passes abruptly into decomposed bedrock. Numerous diabase dikes throughout the Darling Range, and their intrusion into ore bodies, make mining-grade control and development extremely complex. The Darling Range bauxites consist essentially of hydrated iron and aluminum oxides and quartz in varying proportions. The principal alumina mineral is gibbsite with boehmite occurring as a minor mineral. Suggested is a progressive increase in kaolinite and quartz with depth, with a corresponding decrease in gibbsite and goethite. The Darling Range bauxites are of a lower grade than many other major deposits. Individual ore bodies include material ranging from 25 to 45 pet available alumina, with mean values of 30 to 35 pet. Reactive silica averages between 1 and 2 pet. Although the Darling Range bauxites are of relatively low grade, they are close to existing refineries and the port at Perth. Welpa The Weipa operation is on the western side of the Cape York Peninsula in Northern Queensland. The Cape York Peninsula comprises the northern end of a regional anticlinal trend, with Mesozoic and younger sediments being gently arched around a central core of older basement rock. Occurring mainly on the western limb of the regional fold, the aluminous laterite is developed on arkosic sands, clays, and siltstones of probable Tertiary age. The aluminous laterites are almost entirely restricted to the thicker Tertiary sediments close to the present coastline. Farther inland, where older sediments are involved, the laterite profiles are nonbauxitic. The pisolitic Weipa bauxites are mainly free flowing when mined, but can be weakly to strongly cemented. Cementation occurs locally as cap rock up to 1 m thick. Some local zones of cementation occur in the lower part of the ore body as irregular blocks or bars, but generally the bauxite is loose and friable; minor occurences are of an earthy form. Pisolites are from less than 1 mm to 20 mm in diameter and generally held in a losse sandy, clayey matrix. The bauxite has a thin overburden of soil, generally less than 1 m in thickness. The bauxite occurs as a series of flat-lying to gently dipping surface deposits averaging 2.4 m in thickness, with overburden ranging from 0.5 to 1 m. The bauxite consists almost exclusively of the ore minerals gibbsite and boehmite plus gangue minerals hematite, goethite, kaolinite, quartz, and anatase. Trombetas, Paragominas, and Almelrim Deposits On the northern side of the lower Amazon Basin bauxite-source rocks of continental origin form a youthful topographic surface characterized by isolated, jungle- covered, and highly dissected plateaus. Extending along the northern side of the Amazon River from Oriximina to the Jari River, these plateaus have a relief of 70 to 120 m with side slopes of about 30°. They are flat topped with a dip of 1° to 5° towards the Amazon and dissected by youthful streams whose courses are partly contolled by regional jointing. The bauxite-source rocks are Pliocene or f^lio-Pleistocene in age. Bauxitization is believed to have resulted from extreme leaching of preexisting rock material by downward- percolating meteroic water. The necessary environmental conditions include a moist climate, temperature in excess of 25° C, and free water circulation in aluminous rock above a permanent water table. The general source-rock lithology is described as poorly consolidated clays, shales, and sands, sometimes containing coarser layers and beds with pebbles of various sizes. Not always well rounded, the pebbles are composed principally of varicolored quartz and crystalline rock fragments. The beds are generally horizontal, but occasionally inclined, and the strata are commonly cross bedded. Nodules, concretions, and iron staining are conspi- cuous in outcrops. The mineralogy consists essentially of kaolin, quartz, hydrated iron oxides, and gibbsite. Kaolin-type clay minerals are dominant and are locally present in thick beds of high purity. Quartz is abundant in iron-cemented sand, in conglomerate layers, and as dispersed grains in a clay matrix. The quartz grains are poorly sorted, clear, and subangular to angular. Hydrated amorphous iron oxides are abundant as coloring agents and cements throughout the section. Iron oxides also form a 1- to 2-m-thick amorphous iron laterite layer 5 to 10 m below the plateau level. Gibbsite, sparsely distributed through the upper portions of the section, is concentrated into a potential ore horizon 0.5 to 1 .5 m thick below the iron laterite. Barite, tourmaline, and zircon are found among the heavy minerals, together with lesser amounts of anatase, garnet, rutile, and staurolite. The parent rock is kaolinitic sedimentary materials, and the only possible bauxitization route is by desilication to yield gibbsite. This genesis is consistent with the stratigraphy of the deposits, which clearly show bauxite layers formed as an enriched zone at the base of a thick weathering profile. GUINEA Boke Region (Sangaredl) The Boke deposits are part of a structural-morphologic alignment which trends south-southwest from Guinea-Bissau to the Boke region, and further to the Konkoure near Fria and to Kindia. In the Boke region, a number of bauxite deposits occur on both sides of the Cogon River. The bauxite is usually covered by a ferruginous crust and grades downward into ferruginous laterite. The ferruginous laterite lies either on fresh dolerite or on a layer of veriegated clay and decomposed rock 9 m or more thick. The basement rocks may consist of paleozoic sandstone, siltstone, or shale or their metamorphosed equivalents. 31 The Sangaredi deposit is a plateau of solid bauxite up to 30 m thick and about 1.5 km wide in all directions. The eastern and southern slopes are steep, and the northern and western flanks slope gently to the surrounding countryside of low hills and plateaus. The mineralization in the Boke region consists mainly of gibbsite and hematite, with minor amounts of boehmite, goethite, kaolinite, and quartz. Boehmite, compris- ing as much as 4 to 5 pet of the bauxite at the surface, is believed to have been formed by dehydration of a more hydrous form of aluminum by the tropical sun. The minor quartz in the laterites commonly decreases in quantity with depth. Kaolinite, probably a major constituent of the clay-rich layer below the laterite, is most abundant in the lower parts of the laterite. Tougue The bauxite deposits at Tougue formed on diabase sills and dikes of Mesozoic age. These rocks overlie and intrude Paleozoic and Proterozoic conglomerates, sandstones, siltstones, shales, argillites, and archean gneisses. The section of the Fouta Djallon Palteau on which the Tougue deposits are located was uplifted and eroded during the early Cenozoic (African) orogeny. Bauxitization probably occurred during the quieter Miocene period in a humid tropical environment. The laterite profile at Tougue, 20 to 53 m thick, consists of an upper layer of fragmental ferruginous laterite that may be up to 10 m thick on stream divides, a zone of aluminous laterite as much as 13 m thick, and an underlying unit of lithomarge often more than 30 m thick. Individual bauxite deposits at Tougue range from 8 to 24 km^ areally. The average thickness is 8 to 1 m. The deposits mantle the hills and ridges. The principal bauxite mineral at Tougue is gibbsite; the gangue minerals consist of goethite, hematite, and quartz. Dabola The Dabola bauxite deposits formed on Mesozoic diabase sills and dikes and on Precambrian granites, schists, and gneisses. The section of the Fouta Djallon Plateau on which these deposits occur was uplifted and eroded to a peneplain during the early Cenozoic (African) orogeny. Laterization occurred during the quieter Miocene period in a humid tropical environment. Twenty to 68 m thick, the laterite profile at Dabola consists of as much as 18 m of fragmental ferruginous laterite and bauxite and an underlying zone of lithomarge up to 50 m thick. The principal ore mineral is gibbsite. Boehmite, the monohydrate bauxite mineral, comprises only 1 1 pet of the total alumina content in the Dabola deposits. Major gangue minerals are goethite, hematite, and quartz. Guyana Guyana deposits are similar to those found on the opposite side of the Atlantic on Africa's Gold Coast. The two regions have the same climatic conditions and latitude, and both overlie residual clays produced from weathering of Precam- brian crystalline basement rocks. The West African deposits, however, are at a much higher elevation and have practically no overburden. The Guyana bauxites are believed to be eroded remnants of an Prepliocene peneplain which was later downwarped. It is believed that bauxite peneplains were covered with the Berbice Formation of unconsolidated deltaic clays, sands, and lignites during the Pliocene or Pleistocene age. The near-horizontal ore zones, which range in thickness from a few meters to 15 m, are usually capped with material produced by weathering and ground water movement. The 0.3- to 2-m cap is not considered ore because its silica content is greater than 10 pet. It is, however, used for road construction. The principal ore mineral in Guyana bauxite deposits is gibbsite (trihydrate) with minor amounts of boehmite (monohydrate). Gangue minerals in the economic zones are limited to silica. The alumina content in Guyana deposits is estimated to average about 59 pet. JAMAICA The bauxite deposits in Jamaica occur primarily as infillings in vertical walled depressions formed by the coalescence of cylindrical vertical pipes in the highly fractured white limestone. The location and orientation of the deposits reflect the fault systems and lineation in the White Limestone Formation. The deposits are generally at the surface, except in a limited number of down-faulted valleys. The principal ore mineral in Jamaica is gibbsite with minor boehmite. Gangue minerals include iron oxides, kaolin, phosphorite, and silica. SURINAME Two types of bauxite deposits are the coastal-plain bauxites and the plateau bauxites. The most important features are generally the same for all occurrences in the coastal plain, with the exception of a few deposits buried under postbauxite sediments. The coastal-plain bauxite deposits occur stratigraphically on top of the Onverdacht Formation. The bauxitic layer is believed to have been an arkosic or silty material with a grain size and porosity greater than those of the underlying kaolinitic clays. Slightly domed, the bauxite layer tends to be undulating, varying in thickness (2 to 12 m), and wedging at the ends. The generally exposed bauxite deposits near Moengo occur on low hills 10 to 60 m high. Near Onverdacht, the deposits generally plunge northwards beneath younger sediments down to a depth of 45 m. The major bauxite occurrences in the basement area are in the Lely and Nassau Mountains in eastern Suriname, Brownsberg in the northeast central part, and the Bakhuis Mountains in the west. The parent rocks are of basaltic to gabbroic composition in eastern Suriname and are anortho- site, leuco gabbronorites, and enderbites in the Bakhuis Mountains. The bauxite deposits in the Nassau Mountains occur as horizontal to gently sloping parts of plateaus that mostly coincide with swampy areas. Overburden consists of a topsoil with a humus-rich lateritic clay. In the Bakhuis Mountains, the bauxite, frequently found on steep slopes in this area, occurs as lensoid bodies and irregular masses within the lateritic crusts. The principal ore mineral of Suriname bauxite is gibbsite. The gangue minerals include clays, iron oxides, and silica. ^U.S. GOVERNMENT PRINTING OFFICE: 1983-605-015/08 INT.-BU.OF MINES, PGH., PA. 26719 D \ D 1 SR.- /\ -^m' ^''"^ -.^K- /\ -'^w.-yx --^^s /x -'yw.- r V ••- *' '^'^^^ '-MK*' 4.-^*^^%. "-^W*' 'i''^^'^'^^?' ^^K*' ^.^^'^^ ''•'^^** '}.^^\ "--^IP.*" *^'^' «5^^ ^^•n*.. V o V ^Ao^ vPC V^ C" * **..«•* .-Jte'-. \,/ .-ifi^A-. ** r * o » • " . "^^^ ^'^ '=>*' '>'tf« bV" ^^-n^. 'bV" 'bV"