Rio Tinto’s Barrios calls Elysis biggest aluminum smelting breakthrough in 130 years

In May, Rio Tinto (NYSE: RIO) and Alcoa (NYSE: AA) unveiled what they call a “revolutionary” new aluminum smelting technology that eliminates carbon emissions and produces oxygen as a by-product, and represents the “culmination of decades’ worth of research and development.”

To advance the technology, the two companies have set up a Montreal-based, joint-venture company named Elysis, which will have a research facility in Quebec’s Saguenay–Lac-Saint-Jean region.

Elysis will develop and license the technology for retrofitted and new facilities, and sell proprietary anode and cathode materials that the partners say will last “more than 30 times longer than traditional components.”

Tech giant Apple (NASDAQ: AAPL) and the governments of Canada and Quebec are also contributing to the venture, which will employ 100 people, including research and development, management and sales.

The five parties are providing an initial, combined investment of $188 million for the effort.

The Canadian and Quebec governments are each investing $60 million in Elysis, with the provincial government having a 3.5% equity stake in the joint venture and the remaining ownership split equally between Rio Tinto and Alcoa.

Apple is investing $13 million in Elysis and will provide technical support.

Rio Tinto and Alcoa will invest a combined $55 million in cash over the next three years and contribute intellectual property and patents.

Alcoa says its patent-protected technology produces metal at the Alcoa Technical Center near Pittsburgh, Penn., where it has operated at different scales since 2009.

Elysis intends to direct up to $40 million into the U.S. in part to support the supply chain for the proprietary anode and cathode materials.

Veteran aluminum executive Vincent Christ, vice-president of technology and equipment sales and services at Rio Tinto Aluminium, has been named CEO of Elysis.

During a speech at the Resources for Future Generations conference in Vancouver in mid-June, Alf Barrios, the chief executive of Rio Tinto Aluminium, called the new process the biggest breakthrough in the aluminum industry since aluminum smelting was invented 130 years ago.

“The technology is working in the lab. This is about scaling the technology and commercializing it,” Barrios said.

Traditional aluminum smelting can emit carbon while generating the power needed for smelting and during the smelting process itself.

Given that Rio Tinto’s aluminum smelters in Canada rely almost entirely on hydropower, the company already produces some of the lowest carbon-intensive aluminum in the world. By continuing to use hydropower and adding the new Elysis processing to the mix, Rio Tinto could produce “carbon-free” aluminum.

“This really takes it to the next level, and makes it carbon-free aluminum. That’s why it’s a great opportunity for Canada as well as the rest of the world,” Barrios said.

He acknowledged the unusual structure of the joint venture: a partnership between Rio Tinto and one of its biggest competitors in the aluminum business, plus Apple and two levels of government.

Barrios explained it was Apple’s rush to lower the carbon footprint of its products that got Rio Tinto and Alcoa cooperating in the first place.

“The likelihood of us getting together and sharing information was obviously quite limited. What happened was that we were working with Apple, and as we talked to them about the next steps in this relationship, we shared with them that we were working on this technology. As usual, Apple went and talked to others. They found that Alcoa was working on this technology as well, which is not surprising, as this is the holy grail of this industry. They realized what Alcoa was doing and what we were doing was actually quite complementary, and if we joined forces, we’d get it done much faster.”

Barrios said he expects the technology for commercial use by 2024. It could be adopted in retrofitted smelters and new smelters.

“This matters for human progress. That’s why we’re keen on continuing this journey, and Elysis is the next step.”

Alcoa president and CEO Roy Harvey said in a release this new smelting technology “has been long sought in the aluminum industry and … is the culmination of the work from many dedicated Alcoa employees. Today, our history of innovation continues as we take aluminum’s sustainable advantage to a new level with the potential to improve the carbon footprint of a range of products, from cars to consumer electronics.”

Apple CEO Tim Cook added that his company is “committed to advancing technologies that are good for the planet and help protect it for generations to come. We are proud to be part of this ambitious new project, and look forward to one day being able to use aluminum produced without direct greenhouse gas emissions in the manufacturing of our products.”