Can you introduce CBA?

CBA is a fully integrated aluminum producer, which is uncommon – usually, there are separate bauxite producers, alumina producers, smelters, and downstream businesses. For the company's entire history, we have done it all: producing our own bauxite (the primary ore of aluminum), generating power, producing aluminum products and recycling. This complete integration provides us with a significant competitive advantage.

We are focused on Brazil, selling 90% directly to the Brazilian market and exporting 10%. CBA will continue to grow, with significant investments across each step of our value chain and many investments flagged for the future modernization of the company, including decreasing emissions. One of these investments is the installation of press filters in one of our tailings dams to transition to dry-stacked tailings. 

How does CBA produce aluminum sustainably? 

Our aluminum production footprint is quite differentiated. We have a low-carbon production process due to the use of renewable power and established recycling operations. We expect to see higher demand for low-carbon products, particularly when there is a differentiation in pricing for low-carbon products, which has yet to be the case. When there is carbon taxation in the market, having low-carbon production will also be an advantage.

Recycling is a key investment for our future. Financially, it is a more stable, less volatile business than primary aluminum, which is a commodity business. Recycling also provides us a better risk return profile to our portfolio and reduces our carbon footprint. Recycling will play a key role in lowering carbon intensity for aluminium producers. In Brazil, the collection network for scrap is relatively well-developed. There is a full spectrum of companies and people that depend on the recycling market. Moving more deeply into this segment, therefore, is essential to us also due to the social benefits it provides. 

What trends in demand have you observed recently?

Worldwide, there is a change in the industry. Post-pandemic, there was significant consumption of aluminum on packaging, for instance, and investment by people in civil construction for renovations. There was strong demand in 2021 for those segments, but that demand has decreased this year. China is still growing, but the housing market is not as good as it once was. This is not only about China – demand worldwide is currently not as good as well. Ours is a commodity business and we are in a downturn, but we are used to this. However, the Brazilian market is quite good; the transportation and consumer products markets are robust. 

Can you discuss the importance of renewable energy for Brazil?

One of the most important competitive advantages is that an aluminum producer can access renewable power. It significantly lowers costs. The aluminum emissions today are primarily driven by smelters and power generation, so companies that use coal-powered thermal power plants have very high emissions. To be a low-carbon aluminum producer, you need to produce less than 4 t of CO2e for each t of primary liquid aluminum produced. CBA is at 3 t, and the global industry average is 12.6 t, more than four times higher than our carbon footprint. 

Some of our hydropower concessions will expire over the following decades, but we intend to continue to be fully integrated into renewable energy – probably reducing the percentage of hydro and increasing the share of wind and solar. As a country, Brazil has a lasting competitive advantage in the market due to our renewable energy footprint.

What is your strategy for the coming years?

CBA is developing and delivering big investments in 2023. The first is the press filter technology, which is key for us as we transition to dry-stacked tailings. That big investment reached an important milestone with the delivery of filter press equipment in the work in April, and electromechanical assembly, and will be completed at the beginning of next year. Second, we are investing in recycling, having commissioned a new scrap cleaning and processing plant in October 2023. This will increase our capacity for recycling and enable us to utilize lower-quality scrap. We also have significant future investments in our portfolio until 2027, to continue to grow and modernize the business. With these investments, our goal is to have a bigger, more competitive and sustainable business in the future.