Aluminum
This industry covers the mining of bauxite and the refining process required to produce lightweight, corrosion-resistant metal for aerospace, automotive, and packaging use.
Why it exists
Aluminum exists as a sector because refining bauxite into alumina and then smelting aluminum is capital- and energy-intensive, with specific global cost curves.
Why it’s necessary
It’s lightweight, corrosion-resistant, and highly recyclable, making it essential for transportation, packaging, construction, and electrical applications.
Key components
Bauxite mining
Alumina refining
Aluminum smelting (very electricity-intensive)
Rolling and extrusion operations
How to evaluate businesses
Focus on energy cost (especially power contracts), integration (mine → alumina → metal), geographic location, and balance between primary metal and recycled scrap. Evaluate leverage to end-markets (autos, aerospace, construction, cans) and sensitivity to global aluminum prices. Balance sheet strength is critical.
How the industry could be improved
Decarbonizing smelting (renewable power, inert anodes), increasing recycling rates, and developing higher-performance alloys that enable lighter vehicles and structures. More flexible power arrangements to better match volatile energy markets.