Domestic Aluminum Resources:

Dilemmas of Development

EMD-80-63-I: Published: Jul 17, 1980. Publicly Released: Jul 17, 1980.

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For about 90 years, aluminum has been produced in much the same way. Bauxite, the conventional aluminum ore, is refined into alumina. Alumina is then reduced in smelters to aluminum. This last stage, reducing alumina to aluminum, is particularly capital and energy intensive. Although large deposits of commercial grade bauxite are very common in many foreign countries, they are rare in the United States which consumes about 30 percent of the world's aluminum. However, the United States has plentiful nonbauxitic sources of aluminum which might be developed to help reduce raw material imports and reduce the shift of aluminum production capacity overseas, if successfully addressed by research and development policies. GAO reviewed the Bureau of Mines' metallurgy research and development program for nonbauxitic aluminum resources to see if it met these needs.

From its review, GAO concluded that the Bureau of Mines' nonbauxitic research effort is fundamentally misdirected. First, it has been focusing on alumina production and ignoring the fact that the primary obstacles to the use of domestic aluminous resources are the rapidly rising energy and capital costs of aluminum smelting. Without some means of reducing the capital and energy costs of aluminum manufacturing in the United States, primary metal capacity will continue to shift offshore, eliminating any new demand for alumina. Second, nonbauxitic alumina processing technology presently preferred by the Bureau of Mines is not economically competitive with conventional bauxitic alumina technology and, due especially to escalating energy costs, the competitive gap is steadily widening. Third, the Bureau of Mines' program has persisted in trying to develop a nonproprietary technology, disregarding proprietary research of both the Department of Energy and the private sector. As a consequence, the most promising new technologies are receiving inadequate research support.

Matter for Congressional Consideration

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Matter: Congress should: (1) refuse to consider as premature any requests for pilot-plant appropriations until the Secretary of the Interior publishes, in summary form, the essential comparative economic assessment of all public and proprietary nonbauxitic technology processes; and (2) direct the Office of Science and Technology Policy to review and coordinate the nonbauxitic alumina and aluminum research programs of the Departments of the Interior and Energy, to assure proper coordination and consistent Federal support for the most promising technical options.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of the Interior, through the Director of the Bureau of Mines should: (1) refocus the Department's alumina and aluminum metallurgy research program to identify and assist development of those technologies which offer promise of substantially reducing the energy and capital costs of making primary aluminum; (2) recalculate the operating and capital costs for each of the six nonbauxitic alumina processes reviewed in the miniplant program and the pilot-plant feasibility study using proprietary company data, as well as explicit contingency and uncertainty funding allowances for each process; (3) conduct an analysis which specifies and evaluates technical unknowns of proprietary processes, and estimates the probable capital and operating cost implications for each process, for the purpose of identifying candidates meriting further research efforts; and (4) re-examine the economic feasibility of developing alumina from alunite, dawsonite, and clay/carbo-chlorination, using economic credits from the potential production of associated materials. Also, the Secretary of the Interior, through the Office of Minerals Policy Research and Analysis should prepare a report which analyzes the aluminum industry's capacity shift offshore, and includes U.S. Government policy operations which could influence the development of domestic primary aluminum production capacity using nonbauxitic production aluminous resources. Finally, the Director of the Office of Science and Technology Policy should: (1) initiate a review of the alumina/aluminum research objectives and programs of the Departments of the Interior and Energy to assure compatibility of objectives and research support, particularly with regard to support of proprietary technologies; and (2) accept responsibility for a substantial program-design-and-coordination role implementing a joint aluminum research program, consistent with the need for developing new primary aluminum reduction technology, should this objective be considered desirable.

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