Hydro invests $15M to expand recycled aluminum production

Hydro ASA, based in Norway, has announced its North American Hydro Aluminum Metals business unit is investing $15 million into its Henderson, Kentucky, facility to expand its recycled aluminum production.

The company says the investment will support two key projects. First, it will install a new homogenization furnace to improve the plant's capabilities to meet the specifications of the growing U.S. automotive market, allowing the Henderson facility to produce a greater volume of advanced alloys using recycled metals with a lower carbon footprint.

Hydro also will install a new baghouse that will allow the plant to use greater volumes of postconsumer scrap and explore new, more difficult types of scrap such as material with paint or other contamination, which the company says requires advanced equipment to recycle. The baghouse also will improve the air quality inside the plant and reduce the overall environmental footprint from operations.

Currently the Henderson remelting facility produces over 90,000 metric tons of metal annually.

"At Hydro we want to accelerate the green transformation of the aluminum and automotive industries by increasing our use of postconsumer scarp to pull more used material into the value chain and promote a circular economy while also delivering our automotive customers advanced high strength alloys," says Trond Gjellesvik, president of Hydro Aluminum Metals in the U.S.

Gjellesvik adds, "As carmakers continue to make metal substitution decisions, particularly for electric vehicles, our investments allow us to support our forward-leaning customers reaching their climate ambitions."

The Kentucky Economic Development Finance Authority (KEDFA) at its July meeting preliminarily approved a 10-year incentive agreement with Hydro under the Kentucky Reinvestment Act. The performance-based agreement can provide up to $1 million in tax incentives based on Hydro's investment exceeding $8.5 million. The company says annual targets include maintaining at least 47 full-time local jobs across 10 years and across the local workforce, paying an average hourly wage of $49, excluding benefits, and by meeting its annual targets over the agreement term, Hydro may claim eligible incentives against its income tax liability.

This is the second major investment into the city of Henderson after it was awarded $3 million to advance construction of the upcoming Pratt paper mill and box factory, with the grant funded by the American Rescue Plan and the Economic Development Administration's Coal Communities Commitment.

"Henderson is on a roll and Hydro's investment is just the latest in a series of exciting announcements bringing quality jobs and new opportunities for families in this community," Kentucky Gov. Andy Beshear says.

The investment into Hydro's Henderson plant also will enable it to produce higher volumes of its Hydro Circal after independent risk management and quality assurance company DNV certified the facility July 1. The certification follows the recent approval of Hydro's Commerce, Texas, plant to produce Hydro Circal.

The company says the initial volumes from both the Commerce and Henderson facilities will approximately be 4,000 metric tons, with the first large-scale production of the material coming from Hydro's new recycling facility in Cassopolis, Michigan, which is expected to begin operations in 2023. The Cassopolis plant will have a total capacity of 130,000 metric tons extrusion billet—40,000 of which will be Hydro Circal.

"The first Hydro aluminum recycling plant built in the U.S. is here in Henderson, where we are pleased to have provided good career opportunities while supporting aluminum recycling throughout the Midwest now for nearly 25 years," Henderson Plant Manager Seth Augustine says of the facility. "With these new investments, we look forward to doing so for the next 25 years and being a growing part of the expanding Kentucky automotive industry."

The announcement of the Henderson investment comes days after Hydro posted its second-quarter 2022 financial results and noted its Aluminum Metals and Extrusions business units delivered their strongest quarterly results on record, fueled in part by higher metal and alumina prices, stronger margins in extrusions and currency effects.

"We continue to implement initiatives to support our 2025 strategy of low-carbon aluminum and renewable energy," Hydro President and CEO Hilde Merete Aasheim said of the financial results. "This quarter we have pursued strategic recycling growth projects to meet increasing customer demand for low-carbon aluminum and we have progressed on our decarbonization road map."