Alcoa 2014 Annual Report Download - page 41

Generally, other materials are purchased from third-party suppliers under competitively priced supply contracts or
bidding arrangements. The Company believes that the raw materials necessary to its business are and will continue to
be available.
For each metric ton of alumina produced, Alcoa consumes the following amounts of the identified raw material inputs
(approximate range across relevant facilities):
Raw Material Units Consumption per MT of Alumina
Bauxite mt 2.2 – 3.7
Caustic soda kg 62 – 117
Electricity kWh 200 – 260 (global average of 230)
Fuel oil and natural gas GJ 6.3 – 11.6
Lime (CaO) kg 7 – 58
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
21% of the Company’s total alumina refining production costs. Electric power accounts for approximately 26% of the
Company’s primary aluminum production costs. Alcoa generates approximately 25% 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 the long-term power arrangements for Alcoa’s smelters and refineries.
North America – Electricity
The Deschambault, Baie Comeau, and Bécancour smelters in Québec purchased electricity under existing contracts
that expired on December 31, 2014. These were replaced by new long-term contracts with Hydro-Québec executed in
October 2014 (Deschambault and Baie Comeau smelters) and December 2014 (Bécancour smelter), both of which will
expire on December 31, 2029. Upon expiration, Alcoa will have the option of extending the term of the new Baie
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