1. New Zealand Aluminium Smelters Ltd Climate Change Approach
Stewart Hamilton
Business Improvement Manager

2. Introduction Business Improvement Manager
Support Business Improvement by developing operational expertise to deliver sustainable value
Move business towards strategic performance targets in Key Result Areas:
Health and Safety
People Commitment
Environment and Communities
Market Position
Operational Excellence
Financial Strength

3. NZAS Climate Change Approach
World Aluminium Industry
NZAS Performance in the Industry
NZAS Approach – Sustainable and Technical
Role of Aluminium as part of the solution
NZAS Approach - Communities and Policy

4. NZAS Climate Change Approach
World Aluminium Industry
NZAS Performance in the Industry
NZAS Approach – Sustainable and Technical
Role of Aluminium as part of the solution
NZAS Approach - Communities and Policy

5. How Aluminium Is Produced
2 tonnes Alumina tonne Aluminium

6. World Aluminium Production
Aluminium Smelter
Alumina Refinery
Bauxite Mine
~45 Million Tonne of Aluminium (Primary and Recycled)
~350 Million Tonne of CO2-e
~5x New Zealand Emissions

7. NZAS Climate Change Approach
World Aluminium Industry
NZAS Performance in the Industry
NZAS Approach – Sustainable and Technical
Role of Aluminium as part of the solution
NZAS Approach - Communities and Policy

8. Sumitomo Chemical Company
NZAS
Rio Tinto Aluminium
(79.36%)
Sumitomo Chemical Company
(20.64%)

9. NZAS Operations Summary
~20th largest Aluminium Smelter (out of 200+)
Producing 350,000 tonnes aluminium/year
Producing the highest purity aluminium in the world
Export revenue NZ$1.4bn
Using 13% of all NZ Electricity

10. NZAS Greenhouse Gas Emissions
NZAS CO2-e Direct Site Emissions 680,000 tonne/yr

11. NZAS Performance Reduced absolute site CO2-e by 41% since 1990
Top 10% Carbon Intensity of World Smelters
Top 20% Energy Efficiency of World Smelters

12. NZAS Competitive Challenges
Reducing Emissions (technical risk)
Technical Limit to the Process
NZAS at World’s Best Practice for Cohort Group
Cost of Emissions (business risk)
Electricity represents 40% of NZAS costs
Selling on a International Commodity Market
Competitiveness at Risk
Carbon Leakage Risk
NZ Power Generation – high proportion of renewables
Net Emissions Lower from NZ Aluminium Production

13. NZAS Climate Change Approach
World Aluminium Industry
NZAS Performance in the Industry
NZAS Approach – Sustainable and Technical
Role of Aluminium as part of the solution
NZAS Approach - Communities and Policy

14. NZAS Sustainable Approach
License to Operate
Cost & Revenue

15. NZAS Sustainable Approach
Sustainable Business comes from Governance in both:
License to Operate
Cost and Revenue
Systems Developed to Support a Culture of:
Attention to Detail – Procedures and Data Management
Continuous Improvement
Rewarding behaviour Aligned with our Goals and Values

16. Approach to Technical Challenge
Business Improvement Projects – Six Sigma Rigor
“Adapt and Adopt”
$5-15 Million per year
~ 15 Full Time Project Leaders
DC Power efficiency - Project 200
Process Carbon Efficiency – Froth Flotation
PFC reduction (Anode Effects) – Process Control
Fuel Combustion Efficiency
Recycling of Extrusion Scrap

17. NZAS Climate Change Approach
World Aluminium Industry
NZAS Performance in the Industry
NZAS Approach – Sustainable and Technical
Role of Aluminium as part of the solution
NZAS Approach - Communities and Policy

18. Aluminium as Part of the Solution

19. Aluminium Life Cycle 706 million tonnes produced (since 1888)
Approx ¾ of this still used
Recycling aluminium requires 95% less energy than primary aluminium smelting
Recycling of aluminium today saves an estimated 84 million tonnes of CO2-e per year
Recycling the metal still in use = 15 years’ primary aluminium output

20. NZAS Aluminium Recycling
A cornerstone of Sustainable Practices
RTA Partnership developed with End-User Customer in NZ
3600 tonnes of Aluminium recycled in 2006

21. Aluminium Offset 60-75% of vehicle fuel use is weight related
Typical aluminum parts 40-50% lighter than a comparable steel part
1 kg of aluminium used as replacement = 20kg of CO2 over lifetime

22. NZAS Aluminium Offset
For other vehicles, such as trains, ferries and aircraft the potential savings are even greater
18,000 tonnes per annum of NZAS high purity aluminium is supplied to European aerospace industry

23. NZAS Climate Change Approach
World Aluminium Industry
NZAS Performance in the Industry
NZAS Approach – Sustainable and Technical
Role of Aluminium as part of the solution
NZAS Approach - Communities and Policy

24. NZAS Community Approach
Energy Efficiency Extends beyond the gate…
Retrofit all Bluff homes with high quality insulation products
NZAS provide financial backing and support contractors in project safety and project management
200 homes complete to date

25. NZAS Policy Approach Business as Usual is NOT an option
Short term – simple options that do not compromise long term policy
Voluntary agreement leveraging off NGA framework
Options to promote renewables and offsets
Medium to Long term – Emissions Trading Scheme
Enable lowest cost abatement - deploy low emissions technology
Design complex - Allocation principles & impact on Electricity pricing
Market mechanism to aid technology development..?
Emissions Permit Allocation
Recognition of prior action Credit for Early Action
Competitiveness at Risk

26. Climate Change - A Business Driver
NZAS will continue to target and work on Climate Change Impacts irrespective of current policy uncertainty
Expectation that there will be a price on carbon
Set meaningful targets to reduce Energy and GHG
Incorporate in employee incentive payment scheme
Deploy strategic improvement projects
Invest in R&D to reduce the GHG intensity of our processes
Work with industry groups and governments in policy formulation
Investigate offset projects – on and off site
Promote recycling and the life cycle benefits of Aluminium usage
These approaches are almost always cost effective

27. New Zealand Aluminium Smelters Ltd Climate Change Approach
Stewart Hamilton
Business Improvement Manager