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ISAL and the ISAL Production Upgrade. ISAL – General Information. Founded in 1966 Production started in 1969 with capacity of 33,000 tons (120 pots) Major expansions: 1972 (2 nd potroom ) 1997 (3 rd potroom ) Designed for 150,000 tons Production in 2011 > 185,000 tons.
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ISAL and the ISAL Production Upgrade Velkomin til ISAL
ISAL – General Information • Founded in 1966 • Production started in 1969 with capacity of 33,000 tons (120 pots) • Major expansions: • 1972 (2ndpotroom) • 1997 (3rdpotroom) • Designed for 150,000 tons • Production in 2011 >185,000 tons
Alcoa Fjarðarál Century Norðurál ISAL National Aluminium Production • Current share:Alcoa: 41%Century: 33%RTA: 26% Alcoa - Bakki National production Century - Helguvik 2007 1995 2009 • Best estimate: ca. 40% of viable hydro power already harnessed
National Electricity Use • Total production in 2008: 16,488 GWh • Thereof three aluminium plants: 70% Source: National Energy Institute of Iceland (2009)
National Electricity UseHeavy Industries vs.Rest • Share of heavy industries has risen to 80% of national production • three aluminium smelters + Elkem 2008 Note the increase since 2006 Source: National Energy Institute of Iceland (2009)
The Production Process 4 tons of bauxite 2 tons of alumina 1 ton of aluminium
Our Products • Sheet ingots for rolling mills • 200 different types of products • A specialized casthouse adds to the possibilities of value creation • Our metal is used for: • Cladding in construction • Packaging (food, medicine) • Automotive Constellium Singen rolling mill
Raw Materials • Power from Landsvirkjun, the National Power Company • Alumina from Brazil • Anodes from Holland
GHG emissions: dramatic reduction • Absolute emissions reduced by 50% since 1990 in spite of 100% production increase • PFC (strong greenhouse gas) almost eliminated: industry leading Fossil fuel From anodes PFC
EnvironmentWorld’s best PFC performance • International Aluminium Institute’s 2008 report: ISAL no.1 world-wide with respect to PFC emissions @ 23 kg/t Al • Worldaverage: 700 kg/t Al • If ISAL was at theworldaveragetheplantwouldannuallyemitanadditional 130kt of CO2eq • ISAL hasmanagedtomaintainthissuccess • 2008: 23 kg/t Al (no. 1 world-wide) • 2009: 17 kg/t Al • 2010: 20 kg/t Al • 2011: 37 kg/t Al
Talented People • Almost 500 employees • 20% women • 80% men • Average turnover rate: 3,5% • Average tenure: >13 years • Gender equality policy • Equal wages for same work • Diverse background: • University degree; engineering, technology, business administration, psychology etc. • Craftsmen; electricians, mechanics, auto mechanics, painters etc. • Unskilled workers
Education: ISAL school • Started in 1998 • School for unskilled workers • One of thekeystoincreasedproductivity • Coursestoughtbyboth ISAL andoutsidespecialists • 206 graduates to date • Advanced program for graduates • 35 graduates to date
Safety • Chief Executive Safety Award in 2010 • 6 million work-hours without a serious accident (December 2011) • 6 years without a serious accident achieved in January 2012 • 2012 YTD: Two serious accidents
Emphasis on Employees’ Health • No Smoking work area • Monitoring of key factors, such as: • Air quality • Noise mapping • Health risk analysis of tasks • “Bicycle to Work”: • National competition • Gold-medal winners eight years in row!
Community and CSR • ISAL Community Fund • USD 200,000 to diverse projects and causes • Local youth sports • Sponsor of annual cultural award • Cooling water provided to neighbouring golf-course • Wetland restoration • Agricultural University
New power contract &Production increase New power contract $347Minvestment 470 man-years 20% production increase Velkomin til ISAL
New power contract (2010) • Runs until 2036 • Previous contract ran until 2014 • with 10 year extension option • Crucial to ISAL’s future • Current power (335MW) + 75MW additional power
IPU: Production increase (“creep”) Three objectives: • Reliability • prevent 2006 failure • Compliance • upgrade gas treatment center • Increase production by 20%, to 230 kta • within current buildings • complicated and challenging project
2006-failure: Loss of USD 35m • 19 June: Explosion due to ferro-resonance destroys all six 33 kV potential transformers, disabling a whole rectifier station • Result: All 160 pots freeze in Potline 3 • 15 July: First pot restarted • 31 August: All pots restarted • Restart accomplished in record time and without serious accidents • Loss: USD 35m • mainly pot recovery costs and production loss • Substation is still exposed to single-mode failure • Further risk mitigation only possible with investment in alternative DC power routes
Scope • Investment:$347M • Man-years: 470 • Scheduled completion of works is December of this year • Creep scheduled to be completed in H1 of 2013
Casthouse conversion $140M investment 150man-years
From sheet ingots to billets • Production of sheet ingots will cease; will produce billets instead • More valuable product
What are billets for? • Used to make profiles • Construction, automotive etc.
Scope and schedule • Investment: $140M • Man-years: 150 • Casthouse expanded • considerable construction • Height of project was summer 2011 • 150 workers on site • First billet production: this summer • Will continue to produce 50% ingots for 2 years • Full conversion to billets before year-end 2014