RUSAL and Braidy Industries Inc., a US-based holding company which owns both Veloxint, an MIT-incubated lightweighting solutions company, and NanoAl, a Northwestern University incubated materials research and technology company, announced an intent to establish a joint project in Ashland, Kentucky, USA to produce flat rolled aluminium products for the US automotive industry.
The design capacity of the rolling mill will amount to 500 thousand tons of hot rolled band and 300 thousand tons of fully finished cold rolled products on an annual basis. It will be the widest US-based cold rolling mill with a width of 104 inches. The output from the mill will aid towards rebalancing the anticipated deficit of the auto body sheet in the US market.
The Braidy Atlas project will have the lowest CO2 emissions facility for end-to-end manufacturing in North America. It will be the world’s largest low-carbon rolled aluminium producer, as well as the first new greenfield aluminium mill in 37 years to be constructed in the United States. The mill will operate with state-of-the art equipment provided by industry leaders. This will ensure market leadership whilst providing a sustainable competitive advantage in the long term. This partnership will enable Braidy to become the first company to use 100% low-carbon inputs on a permanent ongoing basis. UC Rusal is the only supplier worldwide who can meet the requirements of producing low-carbon, high-quality aluminium at this scale.
RUSAL will supply aluminium (both in slab alloys and as a primary metal) for the new rolling mill from its new Taishet aluminium smelter that is currently under construction in Siberia. Delivering value added products (“VAP”) to the new Kentucky mill is consistent with RUSAL’s commitment to increase the share of its VAP offerings as part of the Company’s total production and sales. Historically, RUSAL has been the number two non-domestic supplier of prime aluminium to the United States. The Braidy Atlas project will be the first North American mill to contract for RUSAL’s third-party certified ALLOW-brand of low-carbon aluminium
In exchange for its $200 million investment RUSAL will earn a 40% share. Braidy Industries will keep the balance 60%. Braidy is applying to the US Government Department of Energy and the German National equipment finance programs to fund the debt portion of its capital structure.
RUSAL and Braidy Industries have entered into an exclusive Letter of Intent which details the commercial conditions for the joint venture alongside providing details for any future negotiations going forward. The binding documentation for the Project is expected to be signed during the second quarter of 2019 after mutual Board approval.
The demand for flat rolled products in North America has demonstrated the robust growth over the past 5 years and this will continue above average rates all over the world, especially in the automotive sector. The key driver of this demand growth is the Corporate Average Fuel Economy regulations (CAFE) that cause an increase and immediate switch from the original equipment manufacturers (OEMs) to aluminium-based components. The chosen location of the mill that will be in close proximity to a large number of automotive supply manufacturers will ensure efficient transportation of the finished products.
The joint project with Braidy Industries is an excellent opportunity for RUSAL to expand the Company’s diverse expertise in one of the key areas of aluminium downstream products. It will also reinforce the Company’s presence on the strategic market.
(Ukrainian metal)