Novelis' closed-loop deals with automakers to improve aluminium recovery

Typically, 40% of an aluminium coil is left over after a car maker stamps out parts.

By introducing a closed-loop system in partnership with car manufacturers, Novelis can capture this scrap aluminium and return it to its materials system.

In the US, the company has recently started a closed-loop partnership with Ford for the manufacture of the Ford-150 truck, but a similar arrangement has already been in place in the UK with Jaguar Land Rover. As Derek Prichett, vice-president of global recycling at Novelis, explains: “Both involve sophisticated systems to segregate the various alloys involved, keep them free of contaminants, and maximise the value of the scrap material.”

According to Novelis, the investment in its Oswego recycling facility follows growth in demand for aluminium automotive sheet in North America as car makers turn to lightweight metal to create more fuel-efficient vehicles and meet new fuel efficiency standards.

Since 2011, Novelis has invested more than $550m (£373m) to increase its global automotive sheet capacity to 900,000 tonnes by the end of this year. It predicts that sales of automotive aluminium, which currently represent about 9% of total shipments, may climb to as much as 25% by 2020. It will allocate around 80% of the Oswego facility’s capacity to the automotive market.

Marco Palmieri, senior vice-president of Novelis and president of Novelis North America, said: “One of our top priorities is to create a sustainable supply line between Novelis and automakers, which will preserve the aluminium’s value, reduce greenhouse gases and increase economic efficiencies for our customers.”

The plant features ‘best-in-class’ scrap recovery and conversion technology, and will allow Novelis to process up to 10,000 tonnes of recycled scrap each month.

Prichett explains that the timing of the company’s investment in the Oswego plant was due to recycling being an integral part of its strategic partnership with Ford. Novelis expects partnerships in closed loop systems to grow.

“Looking at North America, our target for this fiscal year was for approximately 30% recycled content in our automotive sheet. With the ramp-up of the closed-loop system in Oswego, this figure will quickly increase to 40-50% and we expect to achieve this within 12-18 months,” he says. “Over time, we will supplement the closed-loop scrap with other types of scrap from the market, and we believe we can increase recycled content in automotive sheet to as much as 70%.”

On the economics and benefits of the Ford partnership, Prichett explains: “It required significant investment by both companies. I am not going to reveal the details of our contractual arrangement with Ford, except to say that the benefits [include] advantages in supply chain management, operating efficiency and environmental impact. As a matter of course, we expect that all our high-volume automotive contracts will include an agreement to buy back our customers’ aluminium scrap.”

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