Rio Tinto Alcan, Alcoa plan huge expenditures to modernize Quebec facilities and market new products
October 4, 2011
by The Canadian Press
MONTREAL—Canada’s largest aluminum companies will together spend $15 billion over the next decade to modernize their Quebec facilities as they push for greater use of the lightweight metal in everything from buses to bridges.
The Canadian presidents of Rio Tinto Alcan and Alcoa say the investments improve efficiency and add capacity to meet rising global demand.
In a panel discussion, Jean Simon, president of primary metal in North America for Rio Tinto Alcan, says the industry has invested massively in the last 20 to 30 years to make Quebec’s aluminum plants the most technologically advanced in the world.
But more spending is needed over the next seven to 10 years to improve the province’s competitive position against rivals in China and the Middle East.
Rio Tinto has earmarked US$1.2 billion for the first phase of a pilot plant using its AP60 smelting technology in Quebec. The AP60 is expected to cut costs and is touted as the most environmentally-friendly smelting technology available.
It has also budgeted $228 million to upgrade the Shipshaw power station in Quebec and is spending $650 million in preparation for a $2.5-billion modernization of its Kitimat smelter in B.C.
Alcoa will spend $2.2 billion to improve the efficiency of its Quebec facilities as it makes a smooth transition to a smaller workforce—one without layoffs.
Simon says Quebec’s advantage is cheap hydroelectric costs and a trained workforce.
But he also expects uses for aluminum will increase over the next three years as bus and subway car manufacturers—and even bridge builders—incorporate more aluminum into their products.
“Our roads are sick, our bridges are sick. Our cars are too heavy and aluminum is a solution to that,” adds Morin.
Jean Simard, head of the Aluminum Association of Canada, says aluminum is a cost-effective alternative to steel and concrete if you consider total life cycle costs, including reduced maintenance and the recyclable nature of aluminum.
Aluminum reduces the weight of bus chassis’ and its rust resistance is key for bridges.
There are about 250,000 bridges in the U.S. and 3,000 in Quebec in need of repair. Aluminum provides less stress on older footings and can even be used for the apron sections on which asphalt is spread.
Aluminum structures can also be pre-assembled into large pieces using improved welding techniques.
Simard says the challenge is to convince politicians to change contract requirements to factor in life-cycle costs, demand for lighter vehicles and to ensure engineers and architects are trained about the application of the material.
But Andre Navarri, president of Bombardier Transportation, says there is a tradition of using steel in North America.
Navarri suggests aluminum can cause structural problems for streetcars because it’s too flexible under pressure. He did, however, concede that aluminum is a good fit for high-speed trains, increasingly popular in Europe and Asia.
However, developing new markets would transform the aluminum businesses in Quebec and help to retain industry expertise in the province, Simard says.
“It will help protect those industries and make sure that we keep a critical mass … to protect our research centres and our institutions,” he said.