Alcoa 2015 Annual Report Download - page 45

For each metric ton of aluminum produced, Alcoa consumes the following amounts of the identified raw material
inputs (approximate range across relevant facilities):
Raw Material Units Consumption per MT of Aluminum
Alumina mt 1.92 ±0.02
Aluminum fluoride kg 16.5 ±6.5
Calcined petroleum coke mt 0.37 ±0.02
Cathode blocks mt 0.006 ±0.002
Electricity kWh 12900 – 17000
Liquid pitch mt 0.10 ±0.03
Natural gas mcf 3.5 ±1.5
Explanatory Note: Certain aluminum produced by Alcoa also includes alloying materials. Because of the number of
different types of elements that can be used to produce Alcoa’s various alloys, providing a range of such elements
would not be meaningful. With the exception of a very small number of internally used products, Alcoa produces its
alloys in adherence to an Aluminum Association standard. The Aluminum Association, of which Alcoa is an active
member, uses a specific designation system to identify alloy types. In general, each alloy type has a major alloying
element other than aluminum but will also have other constituents as well, but of lesser amounts.
Energy
Employing the Bayer Process, Alcoa refines alumina from bauxite ore. Alcoa then produces aluminum from the
alumina by an electrolytic process requiring substantial amounts of electric power. Energy accounts for approximately
19% of the Company’s total alumina refining production costs. Electric power accounts for approximately 23% of the
Company’s primary aluminum production costs. Alcoa generates approximately 14% of the power used at its smelters
worldwide and generally purchases the remainder under long-term arrangements. The paragraphs below summarize the
sources of power and natural gas for Alcoa’s smelters and refineries.
North America – Electricity
The Deschambault, Baie Comeau, and Bécancour smelters in Québec purchase electricity under long-term contracts
with Hydro-Québec executed in 2014, which will expire on December 31, 2029. Upon expiration, Alcoa will have the
option of extending the term of the Baie Comeau contract to February 23, 2036. The smelter located in Baie Comeau,
Québec purchases approximately 73% of its power needs under the Hydro-Québec contract, and the remainder from a
40% owned hydroelectric generating company, Manicouagan Power Limited Partnership.
The Company’s wholly-owned subsidiary, Alcoa Power Generating Inc. (APGI) owns and operates the Yadkin
hydroelectric project, consisting of four dams in North Carolina, and the Warrick coal-fired power plant located in
Indiana.
For several years, APGI has been pursuing a new long-term license for the Yadkin hydroelectric project from the
Federal Energy Regulatory Commission (FERC). In 2007, APGI filed with FERC a Relicensing Settlement Agreement
signed by a majority of interested stakeholders that broadly resolved open issues. The National Environmental Policy
Act process was complete, and a final environmental impact statement was issued in April 2008. The remaining
requirement for relicensing was the issuance by North Carolina of the required water quality certification under
Section 401 of the Clean Water Act (401 WQC). North Carolina’s Department of Environment Quality ((DEQ),
formally known as Department of Environment and Natural Resources (DENR)) issued a 401 WQC to APGI on
October 23, 2015. The period for appeals has passed with no aggrieved party filing an appeal. FERC has been notified
of the final 401 WQC, completing all necessary items required for FERC to process the application.
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