TO:

Ernesto Zedillo, Chair of Alcoa Inc. Public Issues Committee

CC: Patricia F. Russo, Lead Director of Alcoa, Inc
CC: Klaus Kleinfeld, Chair and CEO, Alcoa Inc.

From: A loyal shareholder and environmental engineer, Ryan Kaplan, EIT

Scenario

In early 2015 Alcoa announced its plans to spin off another company focused on value-added manufactured
products, while maintaining close ties with the original primary metals company Alcoa. This makes good
financial sense as a chance to start with a clean slate for higher-rated consumer investment status, given
the expanding market uses for manufactured aluminum in the automotive, aerospace and construction
sectors. It also makes good managerial sense given many differences between extraction-refinement and
design-manufacture. Necessarily, this corporate split leaves the primary metals company liable for past and
present excavation and refinement projects, with revenue subject to the volatility inherent in that sector,
without the buffer that value-added manufactured products can provide.

Liabilities with respect to land management, reclamation and remediation, and materials management in
general are serious threats that can be turned into an opportunities. Alcoa deals in the most common metal
in the Earths crust, and naturally this is a competitive market with high volume, high overhead, low
margins, and large swaths of land. Aluminum has a high recycling rate and it can easily be smelted and
reformed1 with equal quality to the primary metal. This recycled source is also competition, but it could be
factored into a longer-term business strategy to use existing smelting operations to produce recycled
aluminum ingot or to remanufacture aluminum from recycled materials. Perhaps this other liability
involving the residue from mining operations can become a longer-term business strategy as well, such
that raw materials can also be value-added due to their chemical properties. The question then is how to
leverage existing upstream waste materials to both reduce liability and add value. I believe that Alcoa can
build on previous commitments to sustainability goals to meet these two challenges, and ensure a more
stable future for this company with a strong past.

Alcoa has made significant progress in the areas of water2 and energy3 efficiency toward stated goals, and
some of its operations are achieving impressive landfilled waste diversion. However, efforts surrounding
bauxite residue reuse and storage rehabilitation, land management, and biodiversity are lacking. This is
evident from the relatively low goals set, and in minimal progress toward relevant goals as stated in the
2014 company Sustainability Report. It has been stated in publicly-available company materials that the
window of time during which Alcoa operates on a given section of land to extract bauxite is tiny relative to
the endless timeline before and after, a point that serves to emphasize the importance of reducing the
operational footprint, rehabilitating the area to or above the quality preceding operations, eliminating
other landfilled wastes related to operations, and of finding more productive use for the bauxite residue.

Charts and graphs from the Alcoa website are attached in Appendix C. During only one recorded year
(2012) has Alcoa remediated more land than was disturbed. The biodiversity action plan is miserably
behind target; 34 locations (17% of global locations) were asked to created biodiversity action plans, with a
goal of completing these by 2015 and only 1 location plan has been completed so far. Alcoa reports that 8
sites are within or adjacent to areas that are protected or have biodiversity value (Alcoa land page)4.

The company has set a laudable goal of zero landfilled waste by 2030 and a 75% reduction to 99 thousand
metric tons by 2020, from the 2005 benchmark. The 2014 figure was 304 thousand metric tons, which is a

1 https://web.archive.org/web/20151130021641/http://www.alcoa.com:80/global/en/eco_alcoa/info_page/alcoa_recycling.asp (11/30/2015)
2 https://web.archive.org/web/20151022013834/http://www.alcoa.com/sustainability/en/info_page/water.asp (10/22/2015)
3 https://web.archive.org/web/20151104165921/http://www.alcoa.com/sustainability/en/info_page/energy.asp (11/4/2015)
4 https://web.archive.org/web/20151123083813/http://www.alcoa.com/sustainability/en/info_page/land.asp (11/23/2015)
 23% reduction from 2005 levels. Total wastes sold or recycled have slipped since 2011, but are still an
impressive figure, 709 thousand metric tons. Bauxite residue storage efficiency goal of 15% reduction in
area required per mass of alumina produced from 2005 baseline by 2020 has already been met. The
Bauxite residue storage efficiency in 2005 was 67 square meters of land required per thousand metric tons
of alumina produced; the 2030 goal is 47 square meters. However, the Bauxite residue storage area
rehabilitation rate (total area rehabilitated) is lagging, and perhaps insufficient. As of 2014, 16 percent of
the total area of storage has been rehabilitated, whereas the goal for 2020 is 30% and 40% by 2030.
Compare this to a 2005 baseline of 13% area rehabilitated. Finally, most integral to this letter, bauxite
residue reuse goal is only 30% by 2030, and 0% has been achieved as of December 2014. This performance
metric, along with the biodiversity plans, deserve more attention from Alcoa leaders.

Background

Attached to this document is a systems analysis with stock-flow diagram, and a link to the interactive
diagram online, representing the flow of various types of energy and materials in the manufacture of
aluminum from raw bauxite. Most emphasis and detail is placed on the processing of bauxite to alumina,
and 5 potential end uses for the waste product bauxite residue are shown. In the remaining of this letter, I
hope to drive the point home that more research and development should be paid to these end uses for the
bauxite residue, since it represents on the order of 3 times the volume of material as the processed
aluminum derived therefrom (emissions5 and climate6). Bauxite residue can be used as a construction
material for sustainable development in the regions7 it is produced by Alcoa Australia, Brazil, Guinea,
Jamaica, Saudi Arabia and Suriname. It can also be bioremediated and put to productive use, added to
abandoned mine tailings to neutralize and stabilize the pH for regrowth of land cover, used as a building
material or agricultural soil supplement, used for carbon capture, or simply stabilized in permanent pilings
(which is current common practice after being dewatered. Potential use cases are shown in the table matrix
below, ranked by measures including feasibility, sustainability, goodwill, marketability and profitability in
different dimensions. The rankings are subjective guesses, explained to some degree in the list succeeding
the table matrix. Each use case will have its own tradeoffs, which are too particular to address in much
detail. In general a lower total number signals a more preferred alternative in the table below.

Table 1. Measure and ranking of use case alternatives for bauxite residue
Stable Bioremediation Abandoned mine Construction Carbon
Reference Permanent pile & productive tailing supplement Materials Capture
Number Measure Ranking Pilings (SPP) use (BPP) (AMTS) (CM) (CC)
1 Feasibility Ease (easy - hard) 1 2 4 3 4
2 Feasibility Timeline (short - long) 3 2 2 1 3
Water Quantity/Quality
3 Sustainability (less - more) 2 2 0 0 0
4 Sustainability Energy (less - more) 1 1 3 2 2
Carbon Dioxide
5 Sustainability (reduce - increase) 2 1 0 3 0
6 Goodwill Local (less - more) 3 1 2 0 2
7 Marketability Regional (less - more) 4 1 3 1 3
8 Profitability Global (less - more) 4 1 1 2 3
Total 20 11 15 12 17

From the table matrix of alternative use cases for bauxite residue, we see that the preferred ranking by
eight measures favors bioremediation/productive use, construction materials, abandoned mine tailing
supplement, then carbon capture, and finally stable permanent pilings. The following list briefly explains
the reasoning for the subjective rankings.


5 https://web.archive.org/web/20151121032810/http://www.alcoa.com/sustainability/en/info_page/emissions.asp (11/21/15)
6 https://web.archive.org/web/20161010110544/http://www.alcoa.com/sustainability/en/info_page/climate_protection.asp (10/10/15)
7 https://web.archive.org/web/20151208231026/http://www.alcoa.com/alumina/en/info_page/bauxite_interests.asp (12/8/15)
List of explanations for rankings in bauxite residue use case alternatives

1. Feasibility by ease of use: SPP is easiest; BPP requires microbiological expertise; AMTS requires
intergovernmental coordination; CM may require chemical adjustment and heat/pressure treatment; CC
requires chemical expertise.
2. Feasibility by timeline: SPP is a long process; BPP stabilizes faster than SPP; AMTS takes effort and time
to coordinate; CM could be added into the production cycle to speed up bauxite residue use; CC would
continue for the length of a production cycle.
3. Sustainability of water quantity and quality: SPP leachate is a concern; BPP requires some water for the
microbiota and ground cover; AMTS improves water quality over time; some CM do not use water; CC
makes bauxite residue less alkali, improving water quality of leachate.
4. Sustainability of energy: SPP and BPP require mechanical energy to move material; AMTS requires
significant energy to move material large distances; CM requires mechanical energy and heat, but likely
would not travel very far; CC requires energy for CO2 compression8, and a little for pumping.
5. Sustainability of Carbon Dioxide: SPP is somewhat neutral, but not well-conducive to growth of ground
cover for biological carbon sequestration; BPP improves subsoil conditions to enable better plant
growth and carbon sequestration; AMTS makes subsoil and topsoil viable and enables reforestation
especially in coal mine tailing piles, for greater biological carbon sequestration; some CM uses heat
treatment, and involves CO2 externalities inherently in the building process; CC sequesters8 CO2.
6. Goodwill locally: SPP leaves an unnatural geomorphology and takes a long time; BPP makes productive
use of the residue possible for agriculture, forest, or native replanting; AMTS has little effect locally,
but reduces the total volume of residue that must be stored; CM potentially offers construction materials
for sustainable development where it is needed bricks, road base, cement fill, even acidic soil
supplement; CC is a nice gesture locally, but relative to the CO2 and other gas effluent has little effect.
7. Regional marketability: SPP is a liability; if BPP can be mastered, consultant knowledge can be marketed
regionally; there may be some AMTS opportunities9 in Australia (supplied by Australian bauxite
residue) and Colombia (near bauxite production in Jamaica, Suriname and Brazil); CM could be sold at a
low price point near its source and join into existing Alcoa distribution channels to find market share
without much adjustment to business practice; analyzing the EIA map9, it does not appear that bauxite
residue used for CC at the source would be difficult to market regionally given the relatively low
opportunities.
8. Global profitability: again SPP is a liability; BPP expertise can be developed into a potentially very
profitable niche consultant business for remediation of mine tailings globally; likewise AMTS could be
very profitable if consultation and product niche is found through significant collaborative effort and
creative financing with land remediation future productive use; CM is abundant, and potentially
profitable if traction can be found in the market near the source, and distributed in existing channels; CC
has some low potential profitability in the global carbon trading market.


Framework

The Cradle to Cradle framework, coined by William McDonough and Michael Braungart, conveniently
separates the manufacturing world into technical and biological nutrients that, with sufficiently careful
design principles, can be endlessly recycled or upcycled. As Alcoa knows well, pure aluminum can be
endlessly recycled at much lower energy cost than when refined from bauxite. Natures wisdom has
developed ecosystems of organisms with complimentary metabolisms that mineralize organic materials
and make productive use of inorganic ones. This idea of two separate nutrient streams quickly falls apart
when materials are traced back to their earthen origins as in the case of primary metal extraction. Here
McDonough might say we have a materials in the wrong place problem. The earthen material below the

8 http://hub.globalccsinstitute.com/publications/accelerating-uptake-ccs-industrial-use-captured-carbon-dioxide/52-bauxite-residue
9 http://www.eia.gov/beta/international/
root zone is not inert, but instead teeming with microbiotic10 life, hundreds of meters in depth. For this
reason, bauxite (or any kind of ore source) cannot neatly be put into either category of nutrient. Perhaps
a more appropriate framework, then, is the Natural Step11. There are just four care instructions for a
sustainable planet in this framework: (1) reduce dependence on fossil fuels and heavy metals, (2) reduce
persistent synthetic chemicals, (3) reduce destruction of nature, and (4) ensure we are not stopping people
globally from meeting their needs. Each of these tenets apply to Alcoa, but the first and third are the most
relevant to this discussion. Recycling aluminum achieves both aspects of the first tenet, and global recycling
rates are fairly impressive, which lowers the aluminum commodity price and relieves pressure on existing
bauxite mines for a longer future reserve life. The third tenet speaks to the need to remediate closed mines,
and continue with initiatives like Alcoas 10 million trees12 project. Perhaps the fourth tenet can apply here
too, with respect to productive use of remediated mines and bauxite residue.

Turning bauxite residue from a liability to a source of revenue will require Alcoa to find a market niche,
work with stakeholders, and of course make the numbers work, and there must also be an intense technical
effort. The difference in bauxite composition from source to source, and therefore the difference in its
residue chemical composition after alumina has been extracted, presents challenges for its reuse.
Particularly, the sodicity and alkalinity of bauxite residue complicate its manufacture into a value added
product, and also its treatment to ensure its biogeochemical stability.

Caustic chemicals, water and heat are added to the bauxite material before alumina can be removed, a
process that probably kills all of the microbiota in the bauxite material, and likely affects its geological
stability in storage as well. Bioremediation can help expedite the process of returning the bauxite residue
into a more natural state.

For treatment of bauxite residue, Grfe and Klauber13 have suggested in situ bioremediation with halophyte
plants and alkaliphilic microbes in conjunction with applied gypsum, drainage strategies, and addition of
organic waste, sewage sludge and macro and micro-nutrients to promote plant and microbe survival.
In this way, bioremediation can be achieved well within the lifetime of a refinery operation, such that
closure of a site soon after an end to operations is feasible, with the surface biogeochemistry suitable to
restore the previous ecosystem, or perhaps to sustain farming or some other productive use for the
communities nearby.

With these advances in expertise, Alcoa can truly be a responsible global corporate citizen in its socio-
environmental workings, to add value and eliminate any liability with respect to the integrity of the land,
water, and biodiversity where it operates. And with this in-house expertise, Alcoa can become a world-wide
remediation expert. Other mining and mineral extraction sectors have left a terrible environmental legacy
with abandoned mines and acid mine drainage. As Alcoa reorganizes into two companies, the side focused
on primary metal extraction in all its facets will need to develop its own value-added strategies including
land management and remediation. This is important because primary metals may likely continue to fall in
price as a commodity in the short and medium terms since recycling (especially of secondary aluminum) is
mainstream and takes 90% less energy than primary production to refine (EIA, 2014)14.

Alcoa has already shown in 2010 in a pilot project with the Pennsylvania Department of Environmental
Protection that bauxite residue can be used to neutralize coal refuse to viably seed and reclaim land in
abandoned mine scenarios (Alcoa, 2010)15. These kinds of projects raise a very exciting prospect, such that

10 https://web.archive.org/web/20150927092846/https://microbewiki.kenyon.edu/index.php/Groundwater (9/25/15)
11 https://web.archive.org/web/20151106122831/http://www.thenaturalstep.org/ (11/6/15)
12 https://web.archive.org/web/20150913043230/http://www.alcoa.com/global/en/eco_alcoa/info_page/tmt.asp (9/13/15)
13 http://www.sciencedirect.com/science/article/pii/S0304386X11000442
14 https://web.archive.org/web/20150914233644/http://www.eia.gov/todayinenergy/detail.cfm?id=16211 (9/14/15)
15 https://web.archive.org/web/20151017074154/http://www.alcoa.com/sustainability/en/case_studies/2010_USA_mather_mine.asp
(10/17/15)
Alcoa can mitigate its CO2 emissions by making forest viable on otherwise desolate land, while supporting
wildlife and eliminating the liability of some bauxite residue. Enough of these projects could feasibly offset
a significant portion of the companys total GHG emissions. Under a scheme like the short-lived Australian
Carbon tax16, there was virtually no incentive to reduce CO2 emissions, however, one can reasonably expect
increased public pressure in the future to reduce emissions, especially after the climate agreement17 in
Paris.

Carbon sequestration by carbonation with flue gas from on-site power production may be an option to
adjust the pH of the bauxite residue, and mitigate a small fraction of Alcoas CO2 emissions. Alcoa reported
40.4 total million of metric tons of emissions, whereas only 0.3 million metric tons could be sequestered if
carbon capture with bauxite residue were implemented across all three Western Australia facilities (Alcoa
201418, World Aluminium 201419). This small carbon offset is part of the reason the carbon capture
alternative was ranked low on the decision matrix. Bioremediation and reforestation could have a greater
positive carbon benefit, along with benefits for water and wildlife. On the other hand, this kind of carbon
capture does reduce the alkalinity of bauxite residue, which improves groundwater quality in the stored
residue.

Finally, with appropriate chemical, heat and pressure treatment it should be profitable to produce
construction bricks from bauxite residue. This could be particularly useful for sustainable development in
the tropical areas (Brazil, Guinea, Jamaica, Suriname) where Bauxite is mined, and could be more
marketable in Australia and Saudi Arabia where the construction industry is more established. Of course,
the vast majority of Alcoas bauxite is mined in Western Australia.

Research from the Bauxite Institute Suriname20 has showed that construction-grade bricks21 could be
produced from bauxite residue with a very low firing temperature (converting from MPa to kg/cm2 and
looking at the wide range of compressive strength). Then, feasibly, waste heat at the alumina facilities could
be used to fire these bricks. Indeed, bricks are cheap, on the order of $0.30 each in wholesale. As a thought
experiment Im using pricing and dimensions of clay bricks from an Alibaba22 search. Here Im assuming a
bauxite density of 2,600 kg/m3 and dimensions of 230mm X 102mm X 75mm. Then the approximate
wholesale price for manufactured production bricks would be about $65 per metric ton. Compare this to
the reported EBITDA per metric ton of $95 for alumina23 in the third quarter of 2015 (which was $49 lower
in third quarter 2014); at the time the alumina exchange prices were in the neighborhood of $280 per
metric ton24, and aluminum exchange prices on the order of $700 per metric ton25. So, bricks would not be
a high value product, but it does represent an opportunity to at least offset some of the cost of managing
the bauxite residue. It is worth investigating it may be less expensive to simply produce and give away

16 https://web.archive.org/web/20151211071936/https://en.wikipedia.org/wiki/Carbon_pricing_in_Australia (12/11/15)
17
https://web.archive.org/web/20151212194316/http://unfccc.int/documentation/documents/advanced_search/items/6911.php?priref=600008
831 (12/12/15)
18 http://static.globalreporting.org/report-pdfs/2015/8244c3d9e1d1c0b5302ec452ed2be97b.pdf
19 https://web.archive.org/web/20150420204817/http://www.world-
aluminium.org/media/filer_public/2014/09/03/bauxite_residue_management_-_best_practice.pdf (4/20/15)
20 http://www.bauxietinstituut.com/files/Bauxite Residue Application Technology - Richard Verwey.pdf
21 https://web.archive.org/web/20151030065811/http://www.theconstructioncivil.org/compressive-crushing-strength-of-bricks/ (10/30/15)
22 http://www.alibaba.com/products/F0/clay_construction_bricks/------------------------------14-10,100004172-362155------------------------------------
--------------------ATTR-14-10,ATTR-100004172-362155.html
23
https://web.archive.org/web/20151025051633/http://www.alcoa.com/global/en/news/news_detail.asp?newsYear=2015&pageID=2015100800
0301en (10/25/15)
24 https://web.archive.org/web/20151224041008/http://marketrealist.com/2015/12/falling-alumina-prices-alcoas-pain-century-aluminums-
gain/ (12/24/15)
25 http://www.kitcometals.com/charts/aluminum_historical.html
bauxite residue bricks than to build permanent stable pilings. Consider that Alcoas remediation reserve26
stands at $538M as of March 31, 2015, with $66M in current liabilities.

Other than amendment to coal mine tailings to improve soil fertility, there is one more application for
bauxite residue worth mentioning, which Alcoa has patented for agricultural soil amendment, Alkaloam.27
Efforts for regulatory approval and project administration date back at least to 1993. URS conducted a
comprehensive assessment report on this product in 2009, and found it to be marketable although there
are some concerns. Levels of Arsenic, Barium, Cadmium, Chromium, Cobalt and Fluorine are above Western
Australia criteria for review in the worst-case scenario of samples. However, it is claimed in the study that
leachate tests confirmed that soil amended with Alkaloam were within accepted levels for all metals based
on water quality guidelines, landfill guidelines, and soil investigation levels. Another claim is that at the
prescribed application rate of 20 tonnes per hectare, there is no anticipation of detrimental effect on
salinity of groundwater, surface water or surrounding watercourses. Also, the study claims that there was
no significant plant uptake of heavy metals and radionuclides. In addition to increasing pH, the product can
slightly improve water holding capacity in the soil, increase in fertilizer efficiency, significantly aid in
phosphorus retention, increase plant growth. Despite these benefits backed with scientific studies
following regulatory guidelines, there has been considerable trouble overcoming regulatory hurdles to
come to market. The study cites another author, Neville (2004) who uses a capital cost figure including
cartage and spreading of just $14 per tonne, which in turn had been cited elsewhere. More troubling cost-
wise for Alcoa is the minimal benefit that Alcoa would receive from reduced bauxite residue storage and
capping costs, which the URS study assumes to be just 1.5% of the residue production (6.6 million tonnes
over a 25 year period in Western Australia facilities). In fact, much more value would be provided in
avoided cost for the application studied in the Peel-Harvey catchment based on reduced phosphate
fertilizer, increased agricultural production, and reduction in phosphorus loading in the waterway
resulting in algae blooms and fish kills. It is also worth noting that this value proposition may increase in
the future as the world reserves of rock phosphorus continue to diminish, and farmers of tropical acidic
soils seek solutions to improve yields. See Attachment D for the NPV from the URS study.

In conclusion, Alcoa faces a challenge with its bauxite residue that represents a long-term liability,
complicates its biodiversity and land management goals, and manifests in opportunity costs. For every 1 kg
of finished aluminum, there is almost 3 kg of this substance with properties of alkalinity, sodicity, and
concentrations of trace metals that make it troublesome in huge volumes and a magnet for regulators in
applications involving people, animals or food. Alternatives to the current best practice of stable permanent
pilings have been identified and evaluated in preferred order, through a ranking by eight measures, to be:
bioremediation/productive use, construction materials, abandoned mine tailing supplement, then carbon
capture. The current best practice is the least preferred alternative. The term construction materials
throughout this document has grown to include bricks and agricultural soil amendment. Alcoa currently
uses its bauxite residue as construction backfill and road base, and given the large volumes required for
these applications, the appeal to reduce storage cost is understandable. I have advocated for more
productive use of this material to make bricks, to bioremediate the residue to support plant cover and
reforestation, as a soil amendment to increase farm productivity and reduce phosphorus runoff, to
remediate coal mine tailings for reforestation. Perhaps the questions Alcoa management should be asking
are more holistic, about their sustainability goals and how they relate to governmental and NGO
sustainability goals, how to present and frame information like the URS report, in an exemplary triple
bottom line format that adds value and reduces costs for all involved. I look forward with cautious
optimism to see how the Alcoa restructuring will approach these management challenges to transform
liabilities into assets and create added value by sharing values.

26 https://web.archive.org/web/20150908021319/https://www.alcoa.com/global/en/investment/pdfs/form_10-Q_1Q2015.pdf (9/8/15)
27 http://asdi.curtin.edu.au/csrp/_media/downloads/csrp/Alkaloam_Assessment_Report_Full_27Apr10.pdf
General References for Background Information:

Alcoa emissions reporting
https://web.archive.org/web/20151121032810/http://www.alcoa.com/sustainability/en/info_page/emissions.asp (11/21/15)

Alcoa energy reporting
https://web.archive.org/web/20151104165921/http://www.alcoa.com/sustainability/en/info_page/energy.asp (11/4/15)

Alcoa engaging with the community long-term, bauxite residue management in Australia, 2006
https://web.archive.org/web/20151017051959/http://www.alcoa.com/sustainability/en/case_studies/2006_ww_rewards.asp (10/17/15)

Alcoa financials 2015
https://web.archive.org/web/20150908021319/https://www.alcoa.com/global/en/investment/pdfs/form_10-Q_1Q2015.pdf (9/8/15)

Alcoa list of vision targets by category
https://web.archive.org/web/20150921044351/http://www.alcoa.com/sustainability/en/info_page/vision_targets.asp (9/21/15)

Acid mine remediation case study

https://web.archive.org/web/20151017074154/http://www.alcoa.com/sustainability/en/case_studies/2010_USA_mather_mine.asp (10/17/15)

Alcoa mining operations/bauxite interests
https://web.archive.org/web/20151208231026/http://www.alcoa.com/alumina/en/info_page/bauxite_interests.asp (12/8/15)

Alcoa mining rehabilitation page
https://web.archive.org/web/20151031110513/http://www.alcoa.com/global/en/eco_alcoa/info_page/mining_rehab.asp (10/31/15)

Alcoa on Land Stewardship:
https://web.archive.org/web/20151031110513/http://www.alcoa.com/global/en/eco_alcoa/info_page/mining_rehab.asp (10/31/15)

Alcoa Remediation reserve stands at $538M as of March 31, 2015, with $66M in current liabilities.
https://www.marketvis.io/stock/aa/financial/q1-2015/note/commitmentsandcontingenciesdisclosuretextblock
https://web.archive.org/web/20150908021319/https://www.alcoa.com/global/en/investment/pdfs/form_10-Q_1Q2015.pdf (9/8/15)

Alcoa Suriname operations
https://web.archive.org/web/20151018082008/http://www.alcoa.com/sustainability/en/info_page/vision_regional_suriname.asp?initRegion=su
riname (10/18/15)

Alcoa Sustainability at a Glance 2014
http://static.globalreporting.org/report-pdfs/2015/8244c3d9e1d1c0b5302ec452ed2be97b.pdf

Alcoa water reporting
https://web.archive.org/web/20151022013834/http://www.alcoa.com/sustainability/en/info_page/water.asp (10/22/15)

Aluminum Smelting
https://web.archive.org/web/20151130031025/https://en.wikipedia.org/wiki/Aluminium_smelting (11/30/16)

Bauxite Residue
https://web.archive.org/web/20150922111807/http://www.alcoa.com/alumina/en/info_page/creating_sustainable_future.asp (9/22/15)
Bauxite Residue Application Technology from initiative to pilot project extraordinary lecture 25th anniversary from
Bauxite Institute Suriname at Anton de Kom University
http://www.bauxietinstituut.com/files/Bauxite%20Residue%20Application%20Technology%20-%20Richard%20Verwey.pdf

Bauxite residue management
https://web.archive.org/web/20151208182311/http://bauxite.world-aluminium.org/refining/bauxite-residue-management.html (12/8/15)

Bauxite residue management

http://european-aluminium.eu/wp-content/uploads/2011/08/Bauxite-Residue-Management-Best-Practice_May-2013.pdf

Bauxite residue management - See carbon capture case study, p. 16
http://www.world-aluminium.org/media/filer_public/2014/09/03/bauxite_residue_management_-_best_practice.pdf

Chemistry of Seawater Neutralization of Bauxite Refinery Residues (Red Mud)
http://online.liebertpub.com/doi/abs/10.1089/109287504773087309

Comparison of Physical Properties between Treated and Untreated Bauxite Residue Mud
http://ascelibrary.org/doi/10.1061/%28ASCE%290899-1561%282007%2919%3A1%282%29

Original Bauxite Systems Diagram by Ryan Kaplan
https://insightmaker.com/insight/44892/Aluminum-from-Bauxite

Possibilities of Exploitation of Bauxite Residue from Alumina Production
http://cdn.intechopen.com/pdfs-wm/32748.pdf

Recycling is the primary energy efficiency technology for aluminum and steel manufacturing
http://www.eia.gov/todayinenergy/detail.cfm?id=16211

Rehabilitation project with native grasses in Indiana
https://web.archive.org/web/20151017185558/https://www.alcoa.com/locations/usa_warrick/en/info_page/awards.asp (10/17/15)

Suriname CIA facts
https://web.archive.org/web/20151104205501/https://www.cia.gov/library/publications/the-world-factbook/geos/ns.html (11/4/15)

Ten Million Trees:
https://web.archive.org/web/20150913043230/http://www.alcoa.com/global/en/eco_alcoa/info_page/tmt.asp (9/13/15)



Appendix A: Systems Analysis
Please see the systems stock-flow diagram (attached, original work)28 for context, as it is referenced
throughout the following passage, which describes the boundaries of analysis and some leverage points.

Boundaries:
The primary reason for this systems diagram is to show the movement of material and energy and bring
attention to the bauxite residue and potential productive uses for this material. To put into perspective the
amount of effort and energy that goes into production of the aluminum from raw bauxite, the entire
production process is shown. By showing this comprehensively, I should hope that the shareholders and
management of Alcoa will consider that with only a little more effort and energy, productive use of the
waste bauxite residue can be had, and turned from a liability into an asset and goodwill for the
communities in which Alcoa operates. This extra effort would also position Alcoa as an even more
advanced leader in applied geochemistry, and carve out a new niche in the mining industry.

This assessment considers only the inputs and outputs of primary production of aluminum; post-consumer
recycled aluminum is not considered here. From a generic fuel source, energy flows from mechanical,
electrical, productive and low-grade (waste) heat are shown. Mechanical energy is a catch-all term for
movement of all sorts; in order not to further crowd the systems diagram, flows of mechanical energy is not
made explicit at every juncture in the process. Material flows are shown from the bauxite source and
separation of topsoil and overburden, through chemical inputs and refining of alumina and electrolytic
transformation to aluminum and then advanced manufacture of aluminum. No distribution of product is
shown beyond the manufacture of primary aluminum. The advanced manufacture of aluminum is over-
simplified, because this aspect of the business is beyond the scope of analysis here.

It should be well illustrated that there are opportunities to leverage the massive flows of solid materials,
energy, chemicals, water and gases to increase efficiency, and penetrate new markets with vertically
integrated systems.

Leverage points:
Heat exchangers to increase energy efficiency
Exit points where material flow creates solid wastes (bauxite residues)
o An opportunity to flow into another production stream for construction or agriculture
Topsoil removal and storage
o Opportunity to add groundcover, increase longevity of soil microbes, earn profit from crop
Massive bauxite residue storage pilings can be bioremediated to support groundcover
o Can be returned to original forest and offset carbon footprint
o Can be put to productive use for other revenue stream
o Could require dry sewage amendments, available cheap or free from municipality
Water vapor can be captured
Carbon capture possible to reduce small fraction of carbon footprint
o Also changes chemistry (lowering pH) of bauxite residue for other uses
Massive land area of bauxite residue pilings
o A large solar array opportunity to export to grid or use on site
o A large opportunity to plant more trees (10 million trees initiative)
Every water flow is an opportunity for incremental increase in efficiency and quality

28 https://insightmaker.com/insight/44892/Aluminum-from-Bauxite
Stock Flow Diagram: Raw Bauxite to Manufactured Aluminum; Emphasis on Land Stewardship and Added Value from Waste Materials

Legend: Energy Flow, Material Flow (raw), Material Flow (processed), Electricity Flow, Heat Flow, Waste Heat, Liquor Flow, Chemical Flow, Gas Flow, Water Flow
Appendix B: Review of Four-Part Bauxite Residue Issues Study

In their four-part scientific review the bauxite residue issues, Grfe and Klauber discuss the scale of the
problem (2.7 billion metric tons as of 2007, growing by 120 million metric tons annually) and the
complexities from chemical and physical properties of residues that may possess only generic similarities
and differ by source. They discuss the primary reasons for inaction on residue use: volume, performance,
cost and risk. This byproduct is more a liability than another industrial feedstock due to its sodicity,
alkalinity, the presence of other heavy metals and low levels of naturally occurring radioactive material.
The high alkalinity is a primary reason for classification as a hazardous material, and when combined with
the sodic content, the main reason the residue will not support plant life. The alkalinity cannot be removed
simply by washing with water due to the presence of Bayer process characteristic solids such as
hydroxides, carbonates, aluminates and aluminosilicates that are formed by the action of the caustic soda
on bauxite. Also, the physical consistency is affected by the chemistry, which in turn limits its usefulness for
other industrial processes. Bulk density, sedimentation rates and compaction, hydraulic conductivity,
drying rates and dusting behavior, and physical strength after drying are all affected by the chemistry.
Understanding the relationship between pH, surface charge, neutralization, and the underlying mineralogy
will lend itself to modeling and predicting, and planning the best uses for bauxite residue. The final part in
the review focuses on in situ bioremediation by use of halophyte plants and alkaliphilic microbes in
conjunction with applied gypsum, drainage strategies, and addition of organic waste, sewage sludge and
macro and micro-nutrients to promote plant and microbe survival. In this way, bioremediation can be
achieved well within the lifetime of a refinery operation, such that closure of a site soon after an end to
operations, with the surface biogeochemistry suitable to sustain the previous ecosystem, or perhaps
farming or some other useful purpose for the communities nearby.

Bauxite residue issues (I-IV) by Grfe and Klauber
I. Options for residue utilization29
II. Current management, disposal and storage practices30
III. Alkalinity and associated chemistry31
IV. Old obstacles and new pathways for in situ residue bioremediation32

29 http://www.sciencedirect.com/science/article/pii/S0304386X11000466
30 http://www.sciencedirect.com/science/article/pii/S0304386X11000454
31 http://www.sciencedirect.com/science/article/pii/S0304386X11000430
32 http://www.sciencedirect.com/science/article/pii/S0304386X11000442
Appendix C: Alcoa reported sustainability progress graphs
https://web.archive.org/web/20151121032810/http://www.alcoa.com/sustainability/en/info_page/emissions.asp
https://web.archive.org/web/20151123083813/http://www.alcoa.com/sustainability/en/info_page/land.asp

Appendix D: Excerpt from URS report33 of Alkaloam assessment at Peel-Harvey Catchment

33 http://asdi.curtin.edu.au/csrp/_media/downloads/csrp/Alkaloam_Assessment_Report_Full_27Apr10.pdf
Bauxite Residue (Alkaloam) Sustainability Assessment

5 Benefits of Using Alkaloam

Table 5-2 Net value of Alkaloam use in Peel-Harvey catchment ($m NPV)

Net Value of Alkaloam in Peel-Harvey catchment NPV ($ m)

Value to agriculture
Agricultural production increase 59.6
Phosphate fertiliser cost reduction 31.9
Alkaloam application costs -52.5

38.9

Environmental benefits
Reduction in Peel-Harvey Inlet P load 23.8
Agency monitoring & response costs 0.2

24.0

Stockpile cost saving

Operational costs residue storage 0.0
Capital cost residue storage 5.7
Capping cost residue storage 1.1
Alkaloam supply costs 0.0
R&D and Monitoring costs -0.9

6.0

Net effect (million $) 68.9

Sensitivity of the net value to farmer adoption rate and the budgeted discount rate is shown in Table
5-3. A positive net return is indicated with adoption rates as low as 20 per cent by area of suitable soils
in the Peel-Harvey Catchment, and over the discount rates indicated.

Table 5-3 Net value of Alkaloam sensitivity: maximum adoption rate and discount rate ($m NPV)

Discount rate

4% 6% 8% 10% 12%

20% 35 27 21 17 14
Maximum 30% 53 41 32 26 21
adoption of
40% 71 55 43 35 28
Alkaloam
(% by area) 50% 89 69 54 43 35

60% 107 83 65 52 42

Sensitivity of the net value result to farmer adoption-rate levels and agricultural productivity increases
is shown in Table 5-4. Break even returns are indicated with adoption rates at 20 per cent by area of
suitable soils in the Peel-Harvey catchment, and with a ten per cent productivity increase.

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Bauxite Residue (Alkaloam) Sustainability Assessment

5 Benefits of Using Alkaloam

Table 5-4 Net value of Alkaloam sensitivity: maximum adoption rate and productivity increase ($m
NPV)

Productivity increase

10% 15% 20% 25% 30%

20% 1 14 27 41 55
Maximum 30% 2 21 41 62 83
adoption of
40% 3 28 55 83 111
Alkaloam
(% by area) 50% 4 36 69 103 139

60% 5 43 83 124 167

5.2.2 Value to agriculture

Benefits to farmers in the Peel-Harvey catchment were shown to be positive, given the following
assumptions:

applying Alkaloam to low PRI soils at 20 tonnes per hectare every five years;
maximum adoption of 50 per cent of the low PRI soil area;
20 per cent improvement in agricultural productivity;
a 50 per cent reduction of phosphate fertiliser costs; and
Alkaloam application costs of $16.25 per tonne.
The net value to agriculture was estimated at $38.9 million over 25 years, comprising:
$59.5m increase in the net value of agricultural production;
$31.9m reduction in the cost of phosphate fertilisers; and
$52.5m in Alkaloam application costs.
The benefit: cost ratio of agricultural values was estimated at 1.75, with an internal rate of return of 59
per cent. These numbers suggest a strong financial incentive for farmers to use Alkaloam on their
low PRI or sandy soils. These returns exclude any additional environmental advantages to the
community, and any liming effect benefits.
The sensitivity of the net agricultural value result was tested by varying application cost and
productivity increases, as shown in Table 5-5. The result is shown to be sensitive to both parameters.
The adoption of Alkaloam will be contingent on strong financial incentives generated by productivity
increases. This financial incentive will be based on at least a 20 per cent productivity increase and the
maintenance of application costs at budgeted levels around $15-16 per tonne in the paddock. Any
decline in productivity gain or increase in application cost will result in little incentive for farmers to use
the product.

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