Dear Janneman,

Regarding your posts relative to Elysis and the use of inert (non carbon) anode cells, with concern about or suggesting that with Rio/Alcoa developing their Elysis technology, then somehow the carbon anode business is gonna dry up overnight, rendering PYR's recent announcement about plasma torches being tested in carbon anode baking furnaces as useless.

Anyone who suggest this to you is short-sighted and has a lack of understanding of industry (and business) fundamentals.

Elysis' carbon-free anode is an incredible idea. In fact, inert anodes have been dreamed about and studied for 25+ years.

But throughout that time, there's been little success, and there's a lot of reasons for that (the difficulty of finding materials with the required physical and electrochemical stability at such high temperatures as required by smelting, primarily).

While Rio/Alcoa, and to some extent Rusal, have made major advances, it's one tech option from one (or two) company -- that is still in the early phases. It's unproven at full commercial scale, and for the foreseeable future likely will exist for niche manufacturers who want to boast marketing claims about fossil-free metals (Apple being the first out of the gate).

The Elysis tech was created to help reduce the overall carbon (and C02) impact of aluminum production -- one of many ways to do so.

What's another way? Replacing your existing natural gas or diesel burners in your baking system with plasma. Or buying your anodes from a supplier who has.

It's about options: what's good (or practical, or cost-effective, or politically expedient, or available) to one company, has nothing to do with the others, who may have different ways to reduce their carbon, are under different pressures, use carbon capture tech instead to grab the C02, are more concerned with first switching their fuel source than their anodes, etc.

As is frequently stated, a technologies’ market potential often depends on local circumstances, rather than global circumstances. In this case, the lifetime -- or age -- of the specific smelting cell or production plant are major determinants of whether inert anodes are used as a retrofit option or as future net new greenfield investments. The useful life of modern primary aluminum smelters is usually 50 years or more. There's 200+ aluminum smelters worldwide, with more being added every year due to massively growing aluminum demand, who have major capital costs invested in the carbon anode process. Switching your entire smelting process over to a different anode approach is a much different undertaking and type of investment than using existing anodes baked in a greener way.

Finally, there's an entire industry of carbon anode makers, multiple independent producers, and consultants, based around the carbon anode. They aren't going to stand still while other technologies come and go. They are going to first seek out options to maintain their business with greener options. Hence, anode baking firms considering plasma torch heat source as an option.

Inert anodes may represent the answers for the future, but that future is quite a distance away, and even then may only represent a portion of smelting production.

Some background reading: http://web.mit.edu/dsadoway/www/100.pdf

Steve McCormick, Vice President of Corporate Affairs, PyroGenesis