Domestic Aluminum Resources

Dilemmas of Development Gao ID: EMD-80-63-I July 17, 1980

For about 90 years, aluminum has been produced in much the same way. Bauxite, the conventional aluminum ore, is refined into alumina. Alumina is then reduced in smelters to aluminum. This last stage, reducing alumina to aluminum, is particularly capital and energy intensive. Although large deposits of commercial grade bauxite are very common in many foreign countries, they are rare in the United States which consumes about 30 percent of the world's aluminum. However, the United States has plentiful nonbauxitic sources of aluminum which might be developed to help reduce raw material imports and reduce the shift of aluminum production capacity overseas, if successfully addressed by research and development policies. GAO reviewed the Bureau of Mines' metallurgy research and development program for nonbauxitic aluminum resources to see if it met these needs.

From its review, GAO concluded that the Bureau of Mines' nonbauxitic research effort is fundamentally misdirected. First, it has been focusing on alumina production and ignoring the fact that the primary obstacles to the use of domestic aluminous resources are the rapidly rising energy and capital costs of aluminum smelting. Without some means of reducing the capital and energy costs of aluminum manufacturing in the United States, primary metal capacity will continue to shift offshore, eliminating any new demand for alumina. Second, nonbauxitic alumina processing technology presently preferred by the Bureau of Mines is not economically competitive with conventional bauxitic alumina technology and, due especially to escalating energy costs, the competitive gap is steadily widening. Third, the Bureau of Mines' program has persisted in trying to develop a nonproprietary technology, disregarding proprietary research of both the Department of Energy and the private sector. As a consequence, the most promising new technologies are receiving inadequate research support.

Recommendations

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