Since Rio Tinto bought Canada’s Alcan in 2007, the Anglo-Australian mining giant has been good at making big promises, but slow to fulfill them. This is especially proving to be the case with its plan to produce zero-carbon aluminum.
The Quebec aluminum operations that Alcan built up over more than 80 years until its US$40-billion takeover by Rio Tinto remain among the world’s most profitable. Rio’s eight wholly and jointly owned smelters in the province mostly rely on cheap and emissions-free hydroelectric power from dams that Alcan itself built, providing a competitive and environmental advantage over U.S., Chinese and Russian rivals that use coal-based electricity. And the additional power that Rio Tinto and its partners buy from Hydro-Québec is sold at a discount to market prices.
Yet, Rio Tinto has dragged its feet on promises to invest in its Quebec aluminum operations. Last year, after years of punting a decision, Rio Tinto finally announced plans to replace its highly polluting 98-year-old Arvida smelter in Saguenay, Que., with a more modern $1.4-billion facility by 2028. But while the new smelter will generate much less carbon emissions per tonne of aluminum than the old one, its overall capacity will be barely half of what Rio Tinto promised back when it bought Alcan. And it will use 30-year-old technology instead of the carbon-free Elysis smelting process that Rio Tinto is jointly developing with U.S.-based Alcoa.
That is because the two companies are far behind schedule on the Elysis project. Announced in 2018, Rio Tinto and Alcoa had first hoped to begin implementing the process – which uses inert anodes instead of carbon anodes during the electrolysis stage – in its smelters by 2024. But things have not gone according to plan. In its 2023 annual report, Rio Tinto said it does “not expect this new technology to achieve emissions abatement across our smelters before 2030.”
Rio Tinto and Alcoa received $160-million from the federal and Quebec governments to develop the Elysis process at a research facility in Saguenay, where about 100 scientists have been working on the project. But the process has still not been deployed on a significant scale outside a laboratory.
“For the first time in the world in the last 100 years, we are reinventing how aluminum is produced. This is not an easy process. If it were, someone would already have found a way to do it,” Rio Tinto Aluminum chief executive officer Jérôme Pécresse last week told the House of Commons industry committee. “As for where the Elysis project will have got to in 2030 or 2031, I have no idea. If I gave you another answer, I would be lying. This is a technology that we are going to industrialize step by step. We will start building industrial-sized plants when we are satisfied that it can work at that scale.”
Rio Tinto and Alcoa, which also owns three aluminum smelters in Quebec, are expected to soon announce the launch of a Elysis demonstration project at Rio Tinto’s smelter in Alma, Que. But it will likely take several more years to determine whether Elysis ends up as a success or a failure.
That matters for the fate of Rio Tinto’s Quebec smelters, which employ thousands of workers. Despite their reliance on hydroelectricity, the company’s Quebec smelters are still among the province’s largest greenhouse-gas emitters, spewing out more than three million tonnes of carbon dioxide annually. And Rio Tinto’s customers are increasingly unhappy about that.
“For 20 years, when we told [clients] that we were producing aluminum using hydroelectricity, that kept them happy, but it’s no longer enough for them,” Mr. Pécresse told the committee. “They now want an electrolysis process that doesn’t release any carbon. And that’s precisely what we are trying to accomplish together, through Elysis.”
Mr. Pécresse, who took over as the head of Rio Tinto’s Montreal-based aluminum division in October, told MPs on the industry committee that it is “far from certain” whether the company’s existing Quebec smelters could be retrofitted in the future to use the Elysis process. That means implementing Elysis, if the technology proves successful, could require the construction of new smelters altogether to meet Rio Tinto’s goal of becoming carbon-neutral by 2050.
Thanks to their reliance on hydroelectricity, Rio Tinto’s Canadian aluminum smelters (including its Kitimat, B.C., facility) still generate less carbon per tonne of metal produced than most of their foreign rivals. But the latter are increasingly turning to renewable power sources and investing in carbon-free smelting technology. Norway’s Norsk Hydro ASA, for instance, is betting on its HalZero process to produce emissions-free aluminum on a commercial scale by 2030. Russian and Chinese producers are also working on zero-carbon techniques.
At last week’s parliamentary hearing, Mr. Pécresse, who previously served as CEO of General Electric Renewable Energy and (fun fact) is married to former French presidential candidate Valérie Pécresse, nevertheless sounded optimistic about the Quebec aluminum industry’s future – provided Elysis lives up to its billing.
“I believe that Elysis will help build the Saguenay of tomorrow,” he said. “If we can manage to produce aluminum on a comparable scale using [carbon-free] patented processes, it will become possible to restore this sustainable competitive advantage and keep a step ahead of the competition in the entire industry.”
There is a lot riding on those words, for both Rio Tinto and Quebec.
Konrad Yakabuski