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Raw materials

The responsible use of raw materials along the value chain forms an integral element of corporate policy. The most efficient and responsible use of resources, recycling and the closed loop concept are anchored within the corporate strategy.

 

 

Value
Management

With process and product innovations and the strategic focus on recycling, the aim is to decouple growth from resource consumption and thereby accelerate the transition to a system of closed value creation cycles. When selecting raw materials, aspects such as product and supply security are taken into consideration in addition to economic, ecological and social criteria.

 

The path of AMAG products starts with the primary material base. AMAG’s activities in Ranshofen on the topic of raw materials comprise:

  • The purchasing of primary aluminium, rolling slabs and primary scrap
  • The purchasing of aluminium scrap and metal alloys
  • The recycling of aluminium scrap
  • The production of recycled cast alloys and rolling slabs

Primary aluminium is procured for the Ranshofen site in the form of ingots, sows and T-ingots. Transport is mainly carried out on an environmentally compatible basis via water and rail. AMAG only utilises material from electrolysis plants approved by it for this purpose.

 

AMAG holds a 20 % interest in the Canadian Alouette smelter to secure primary aluminium supplies for the Ranshofen site. For business reasons, Alouette’s primary aluminium was sold exclusively in North America in 2021. By sourcing its electrical energy from hydroelectric power and ongoing optimisation of production technology, the Alouette smelter has an exceptionally small carbon footprint by international standards. 

 

Alumina supply to Alouette is ensured by the owners (AMAG 20 %, Norsk Hydro 20 %, Rio Tinto 40 %, Albecour/Marubeni 20 %). Alouette procures alumina either through direct purchasing from alumina refinery operators or indirectly via traders, taking into consideration environmental and social criteria and compliance with legal regulations. The Atlantic region (primarily Brazil) and the Pacific region (primarily Australia) are the two alumina production regions of significance for Alouette.

 

Bauxite is the raw material for alumina production. Bauxite deposits are located along the tropical belt, mainly in areas that exhibit high species diversity, in other words, a great variety of plants and animals. Minimising negative impacts on biodiversity is consequently of fundamental importance for sustainable bauxite mining. This requires that the needs of local communities be taken into consideration in land conservation and use. AMAG is aware of the effects of bauxite mining and subsequent alumina production. AMAG makes valuable contributions to defining and implementing sustainable standards in the aluminium industry through membership in initiatives such as the Aluminium Stewardship Initiative (ASI), European Aluminium (EA) and the GDA (Aluminium Deutschland).

 

The procurement process is regulated by operating instructions and guidelines. This serves to minimise not only procurement-specific risks, such as delivery bottlenecks or strong price fluctuations, but also safeguards AMAG’s competitive edge and its seamless production workflows. Suppliers are expected to act responsibly in the extraction and production of raw materials. When purchasing raw materials, AMAG has committed itself to responsible procurement management for all major suppliers and service providers (including scrap, primary metal, rolling slab and metal alloy suppliers, as well as energy suppliers and service providers). A separate set of procedural instructions governs the ongoing implementation of responsible procurement management for alumina. In procuring auxiliary and operating materials, overhead materials, capital goods, services and energy, AMAG makes use of a broad base of suppliers which are selected and commissioned in a clearly defined bidding process. The supplier relationships are performance-based and long-term oriented.

 

AMAG gives preference to suppliers whose management systems are certified to ISO 9001/14001/45001 and which operate a safety management system. Suppliers are evaluated periodically using a uniform system (vendor evaluation). In the case of equal prices and quality, preference is given to suppliers that ensure efficient energy consumption when rendering their services and enable the most energy-efficient use possible. A compliance check process for suppliers has also been installed. Current sanctions lists are applied to systematically check suspicious or illegal activities.

 

For more informations, please see annual report 2021

Targets

Target 2021: 

  • Continuous improvement of the ASI CoC management and procurement of sufficient ASI-certified and ASI-eligible raw materials in order to cover customer demand

Central measures:

 

For decades, AMAG has focused on the responsible and resource-conserving production of aluminium and is a founding member of the Aluminium Stewardship Initiative (ASI), a global non-profit organisation. The initiative was launched in 2012 to supplement activities designed to promote sustainability and material responsibility pursued for more than twenty years by the aluminium industry’s lobby groups. The aim is to demonstrate and step up the sustainable production of aluminium. To this end, globally applicable standards and a certification system for the producers and processors of aluminium were developed. AMAG is already certified in accordance with both standards issued by the initiative (ASI Performance and Chain of Custody Standard), thereby evidencing the company’s responsible aluminium production and processing. 

 

As a basic requirement for achieving the ASI CoC Standard, conformity with the ASI Performance Standard, which officially confirms the sustainable production and processing of aluminium in Ranshofen, must first be demonstrated. AMAG already achieved certification to this ASI standard in 2018. The ASI CoC Standard goes one step further and starts at AMAG’s own factory gates by requiring suppliers of primary materials to comply with the same stringent standards and criteria to which AMAG is committed. All steps in the value chain, from the production from bauxite and secondary aluminium through to processing and on to the finished product are encompassed. ASI-certified primary aluminium and rolling slabs are additionally purchased by AMAG from its upstream suppliers. ASI-eligible scrap is so-called post-consumer scrap, i.e. scrap from products already used by the consumer or which have served their allocated purpose (e.g. used wheel rims, old window frames, used aluminium packaging). The ASI CoC Standard thereby links the manufacturing steps in Ranshofen, which are tested in accordance with the ASI Performance Standard, with a monitored supply chain, and enables AMAG to identify products as ASI-certified. ASI-certified aluminium, in turn, offers customers the opportunity to support responsible aluminium supply chains and consequently scrap recycling, closed loop concepts and responsible mining, as well as the sustainable production of aluminium.

 

In June 2021, the successful combined audit for recertification according to the two ASI standards was performed in Ranshofen, which reported a very positive overall result and identified no anomalies. The information provided to employees (via CIP screens and online training) and the continuous improvements, particularly in the area of occupational health and safety, were highlighted as particularly positive. AMAG components, as part of the AMAG Group, produces machined high-precision detail parts (predominantly from aluminium) for the aircraft industry.

 

The product range includes aluminium and titanium machined parts, assemblies and sheet metal parts. For AMAG, the acquisition of AMAG components enables greater depth of vertical manufacture beyond contour sawing, and supports AMAG’s specialties and recycling strategy. AMAG components’ activities in the area of raw materials primarily involve the purchase of semi-finished aluminium and titanium products via suppliers approved by customers, as well as the provision of unmixed machining scrap for recycling. An important aluminium alloy for aircraft sector customers is to be sourced directly from the AMAG rolling mill in the future. To this end, work is being performed on the corresponding qualification.

 

2022 target / medium term:

 

Procurement of certified and sustainable raw materials to meet customer demand through:

  • Procurement of at least 45,000 tonnes of ASI-certified aluminium in the form of rolling slabs and primary aluminium in 2022
  • Increase in ASI-certified scrap
  • Increasing the yield and grade purity of chips in the context of closed loop recycling with AMAG components
Results

Results:

 

New suppliers were qualified for ASI scrap as part of the continuous expansion of the supplier base to ensure material availability. Activities have also been initiated to enable scrap from end-of-life aircraft to be recycled in the future. As far as Alouette’s alumina supply is concerned, the Alouette partners agreed to prioritise the procurement of alumina from ASI-certified sources. This confirmation of compliance with comprehensive sustainability standards by the independent ASI represents an essential element in ensuring transparency and quality. In the 2021 reporting year, 40,000 tonnes of ASI-certified rolling slabs were purchased in Ranshofen. ASI-certified scrap (“post-consumer” scrap and dross) was also purchased.  

 

Most of the material purchased for the production of high-quality aluminium products at the Ranshofen site is aluminium scrap. Accounting for a share of 56 %, recyclables play a dominant role in the external purchasing of raw materials. A total of 183,100 tonnes of aluminium scrap (2020: 165,100 tonnes) were purchased in various forms from external third parties. AMAG has 174 (2020: 184) suppliers of a broad spectrum of aluminium scrap types. Of the main suppliers, 22 cover 50 % of the total demand.

 

In addition, contracts exist with customers which purchase rolled products concerning for the purchase of production scrap from further processing or final production (scrap collection points).

 

The 90,000 tonnes of primary aluminium required for the Ranshofen site in 2021 (2020: 75,100 tonnes) was purchased from suppliers with which long-standing business relationships exist. Around 11 % (2020: 0.6 %) of the primary aluminium required for the Ranshofen site in 2021 was purchased from Alouette via traders. In addition to the rolling slabs produced in the company’s own casthouse, low-alloy rolling slabs are also purchased from third parties. The purchase of external rolling slabs amounted to 43,200 tonnes in 2021 (2020: 40,300 tonnes). Metal alloys, which are necessary to achieve the required material characteristics, are also purchased externally. Magnesium, silicon, manganese, copper and zinc are the most important metal alloys. In 2021, the purchase of alloying metals accounted for around 11,000 tonnes (2020: 9,300 tonnes) at the Ranshofen site.

AMAG components purchased around 1,468 tonnes of semi-finished aluminium products and around 60 tonnes of semi-finished titanium products in the 2021 reporting year.

 

Tantalum, tin, gold, and tungsten, which originate in the Democratic Republic of Congo or its neighbouring countries (the “DRC” countries), have been identified as “conflict minerals”. Suppliers have a duty to disclose if the use of these “conflict minerals” would be necessary for the functionality and for the manufacture of the products they supply. AMAG continuously checks whether such minerals are necessary for the functionality or the manufacture of its products. If necessary, upstream suppliers are contacted to ensure that the minerals mentioned do not originate from DRC countries. No conflict minerals were purchased in the 2021 reporting year.

AMAG is a founding member of the Aluminium Stewardship Initiative (ASI), which was launched in 2012. This is an association of various stakeholders in the aluminium industry with the aim of making the production of aluminium as sustainable as possible. To this end, an independent, objective certification system has been developed that covers all steps from raw material extraction, through production and use, to the recycling of aluminium.

In 2018, AMAG became the first integrated recycling, foundry alloy and rolling mill location to successfully undergo certification in accordance with the Performance Standard. The company will now continue along this path with the preparations for certification according to the Chain of Custody Standard.

Two standards form the core of the ASI certification program: the "ASI Performance Standard" (certification of sites or activities) and the "Chain of Custody Standard" (product chain certification). In order to achieve and maintain certification, audits are conducted by authorised external auditors.

Since the 2017 reporting year, we have published a summarized non-financial statement in our management report, thereby fulfilling our reporting obligation in accordance with the Sustainability and Diversity Improvement Act (NaDiVeG). It summarizes the essential information for AMAG on the five required aspects of environmental issues, employee issues, social issues, respect for human rights, anti-corruption and bribery.