PyroGenesis Canada Inc. (http://pyrogenesis.com) (TSX: PYR)
(NASDAQ: PYR) (FRA: 8PY), a high-tech company (hereinafter referred
to as the “Company” or “PyroGenesis”), that designs, develops,
manufactures and commercializes advanced plasma processes and
sustainable solutions which are geared to reduce greenhouse gases
(GHG), is pleased to provide today a comprehensive update on its
Aluminum business line.
After unveiling an initial Aluminum Industry
Strategy in September 2020, the Company’s mandate has since
expanded as global aluminum producers face increasing metal demand,
rising energy costs, higher market prices for hiqh-quality
aluminum, and approaching carbon emissions targets1,2. As a result,
the Company has increased sales efforts and R&D, targeting
innovative new uses of its ultra-high heat expertise and
plasma-based solutions. All of these endeavors have reached
client-discussion stage.
“Due to a series of macroeconomic and
geopolitical factors that have intensified the already tightening
market for aluminum – even now the world’s 2nd most widely used
metal after steel, and whose demand is estimated to rise by 80%
over the next two decades3 – aluminum prices have spiked, currently
up almost 40% after rising as high as 56% year-over-year in
March4,” said Mr. P. Peter Pascali, CEO and Chair of PyroGenesis.
“As the metal has become more valuable and with raw material supply
chains experiencing added volatility, producers are seeking
technological answers to boost their production yield, and
PyroGenesis solutions, most notably our Drosrite™ dross recovery
system, provides an in-stream benefit.”
“We have entered an exciting stage in our
aluminum business line”, continued Mr. Pascali, “Therefore, we
decided to provide a timely update regarding all areas of this
business line and the impact we are having with aluminum producers
around the world.”
The Company is pleased to provide an update on
both existing customers, as well as a selection of the many
proposals and new-use developments that are currently ongoing:
Drosrite™ – Metal
Recovery Systems
PyroGenesis’ Drosrite™ is a
system that helps aluminum producers recover valuable metal from
the smelting waste known as “dross” – a residual by-product
generated throughout the metallurgical industry, when oxygen comes
into contact with molten and solid impurities float to the surface
to be skimmed off. Smelters typically lose anywhere from 2%-10% of
their total annual melt production due to dross, as the material
itself can be composed of as much as 80% metallic aluminum5. The
valuable metals and chemicals within this waste can be recovered if
processed correctly.
PyroGenesis’ Drosrite™ system modernized and
significantly enhanced dross processing, introducing a method to
recover much more – up to 98% – of the valuable aluminum left in
dross, a 20% higher rate than the most commonly used process (the
Rotary Salt Furnace)6, with a 50% lower operating cost, a lower
carbon footprint and energy consumption, and a higher return on
investment – all without the use of salt that can cause
contamination, while also not creating salt cakes, another
environmental problem as landfill bans multiply for this hazardous
solid.
As a result, PyroGenesis’ Drosrite™ systems are
in-demand, with the Company having successfully won some of the
largest dross recovery projects internationally, making the Company
one of the largest and certainly fastest-growing dross recovery
solutions in the world.
The Company reports several key developments
with regards to Drosrite™:
Drosrite™ / Middle East Client
- The first 3 PyroGenesis Drosrite
systems, of the 7 total ordered by a Middle Eastern end-user – one
of the world’s largest aluminum producing complexes – continue to
perform exceptionally well. As producers have entered a period of
heightened pressure to maximize output of existing operations, the
output rate, quality, and purity level of PyroGenesis’ salt-free
Drosrite™ metal recovery system has proven to be a
differentiator.
- Additionally, with that client’s
recent expansion achieved, the Company can report that the
remaining 4 systems are completed, packed, and ready for
shipping.
[In the accompanying image taken April 13, 2022,
high-quality metal pours from a Drosrite system after being
recovered.]
Recurring Client 1
It was noted in the Company’s February 2, 2022,
news release that a $4 Million purchase order for the first of
three 10-ton Drosrite™ systems from an existing client had been
received.
The Company is announcing that procurement for
production of this system has begun.
Recurring Client 2
The Company is also announcing an additional
Drosrite™ system was completed and delivered to this client,
already arriving at the client’s factory for commissioning at the
time of this writing.
This represents the 14th Drosrite™ system either
installed/in shipping (11) or newly ordered/requested (3).
Separately, the Company understands that, due to
the confidential and recurring nature of some of our clients, it
may be difficult for investors to measure the progress of Drosrite™
orders. The Company will therefore confirm that all systems – 11 in
total – ordered and announced prior to the most recent purchase
order for the first of 3 units that was received and announced in
February 2022, have been completed and are either on-site at the
clients’ location or in shipping.
Drosrite™ Joint Venture
Background
On September 27, 2021, the Company announced
that it had signed a joint venture and license agreements (both
agreements collectively the “JV”) with a leading residue processor
to transform dross residues – the material left over after
Drosrite™ metal recovery – into high-value chemical products (the
process known as “valorization”), that can then be sold to
demanding applications such as fertilizer production and water
purification for global markets. The 50:50 JV will be geared
towards building, installing and operating dross residue
valorization facilities worldwide.
The Company believes this technology will not
only make the Drosrite™ offering more appealing but could also be
offered as a stand-alone service. PyroGenesis believes that
valorizing the residues and producing these high-end chemical
products will further define the Company as the go-to supplier for
dross-related processing, and a one-stop shop for all aluminum
producers to eliminate landfill waste streams and help meet their
ESG mandates and targets.
Under the terms of the JV, the exclusive access
to the technology initially applies to projects in North America
and in the Gulf Cooperation Council nations. Upon successful
completion of the first project, the exclusive access to the
technology will expand to include, for all intents and purposes,
most of the world. These dross residues are currently either being
(i) landfilled (which is increasingly becoming banned by
regulators) or (ii) dumped into the cement market to avoid landfill
costs and liabilities.
Status
This joint venture is in the final due diligence
phase, but the JV is already evaluating specific locations for the
first plant in which a country decision has already been finalized.
The joint venture has also started evaluating additional locations
in other countries for further plants.
We expect the final agreement for the JV to be
reached shortly. Of note, the pending JV has already attracted
interest from both a major North American primary smelter as well
as a South American primary smelter, to valorize their dross
residues.
Drosrite™ Tolling Services
Background
The Company had previously announced a strategy
to provide dross recovery through a tolling approach, meaning
rather than sell a Drosrite™ system to a customer for them to
operate, PyroGenesis would instead own and operate the Drosrite
system on-site for the customer – charging a fee for service
instead of the capital cost of an entire system.
New Developments
- The Company has been working on a
tolling arrangement with a very large European integrated midstream
aluminum producer and manufacturer.
- The Company has recently provided a
quote for on-site tolling pilot trials for one of the largest scrap
remelters in the world, also located in Europe.
- The Company has submitted a tolling
proposal (at the request of the client) for one of the largest
primary smelters in South America.
- The Company is currently developing
tolling proposals for several other companies across several
different countries.
Spent Pot Linings – Safe Destruction and
Valorization
Background
Previously, the Company had announced that
it had received a grant of $194,090 from the Ministry of the
Economy and Innovation, through the support for innovation
projects component of the Innovation program, administered by
Investissement Québec, to develop a solution to recover the
residues of pot lining.
The production of aluminium occurs in large
smelters containing carbon-lined cells or “pots”, which typically
have a lifespan of 2 to 6 years7
Eventually the lining of the pot can no longer
conduct the required electricity properly and must be removed and
replaced. But being heavily contaminated with metals and various
compounds, it is often stored at tremendous cost until a safe
process can treat the material. In the past (and sadly even today
in some areas), this dangerous solid waste – also known as “spent
cathode” – has been dumped in lakes and in landfill, a major
environmental problem.
But while dangerous, the spent pot lining
contains valuable material that, if processed correctly, could be
recovered and reused. The goal of this project is to develop a
solution to recover that material, but also do so in a safe and
environmentally healthy way. PyroGenesis’ partner in this project,
Aluminerie Alouette – co-owned by Rio Tinto and Norsk Hydro – is
the largest primary aluminum smelter in the Americas.
Status
Lab-scale tests have been concluded. Next phase
is to include an initial pilot phase, assuming ongoing negotiations
around IP and rights are successfully negotiated.
As we feel the negotiations will be successful,
the Company is also working behind the scenes on business planning
in preparation for eventual commercialization.
Previously Announced
Opportunities
Potential New Contract 1
The Company has announced previously that it is
bidding on an up-stream opportunity, valued at approximately $40MM.
This process is plasma based, and not only reduces GHG, but it also
appears to be cheaper than alternate technologies.
Also mentioned previously, the bid process was
experiencing delays, and this has continued, primarily relative to
a change in personnel on the potential customer’s end, and other
administrative tie-ups that are beyond the control of The Company.
The bid process is being administered by a 3rd party global
engineering firm, who has kept both the name of the potential
customer, and the country in which they are located, confidential
from bidders.
PyroGenesis is still in the running for this
bid, but it is not yet known when it could be concluded.
Potential New Contract 2
The Company has announced previously being in
discussions with a second opportunity to provide a similar upstream
process for approximately the same consideration.
This opportunity, not a competitive bid, is
about to enter a preliminary testing phase at-scale in conjunction
with PyroGenesis. This is being done with existing equipment within
the client’s current production line.
New Opportunities in Primary Aluminum
Production
Fuel-Switching to Plasma
PyroGenesis is involved with a European-based
aluminum and renewables conglomerate, active throughout the world,
and operator of one of the world’s largest primary smelters, who is
exploring a comprehensive fuel-switching program that would replace
carbon-fired burners with plasma torches.
The burners targeted for potential replacement
are in furnaces within the company’s aluminum cast-house, within
various heated molten holding tanks that – post-smelting – store
the newly made liquid aluminum in preparation for ingot
creation.
The potential scale of this opportunity is in
the range of hundreds of plasma torches.
Comprehensive Solution Set
As a result of the Company’s many new
innovations that have increased the breadth of its aluminum
business line, the Company is now able to offer a comprehensive set
of services to aluminum producers.
As a result, in anticipation for the
construction of a new primary aluminum smelter – one of the largest
hydro-electric-powered facilities to be built in some time –
PyroGenesis is planning a full end-to-end tender of solutions, from
plasma-torches to Drosrite tolling services, and are already in
talks with the producer about such a tender.
While a longer-term opportunity, this represents
potentially one of the most exciting developments, not just for the
Company’s aluminum business line, but also for the Company as a
whole, and we see this as a future model.
New Opportunities in Secondary Aluminum
Production
The aluminum market is comprised of two types of
aluminum producers: those that make primary aluminum, which is
original aluminum extracted from refined bauxite ore and the
electrolysing of the resulting alumina; and those that produce
secondary aluminum, from the re-melting of aluminum scrap.
Until recently, PyroGenesis had been focused on
the primary aluminum market. However, the Company’s solutions are
now being explored by secondary aluminum producers worldwide.
The following are under consideration by several
major secondary aluminum producers, and the Company already has
quotes out for some of these initiatives:
- Retrofitting of secondary aluminum
recycling furnaces, across all furnace types within the process,
with plasma torches. There is a potential need for several hundred
torches at just the companies we have provided quotes for
alone.
- Working with some of the largest
manufacturers of industrial furnaces (for both aluminum and steel)
to study providing plasma torch burner options to their customers
at initial furnace sale.
- Providing various technology
solutions and services to a major global automaker.
Finally, the Company has been developing
relationships throughout the industry, and through those it has
seen interest from secondary producers to utilize plasma-fired
technologies throughout their aluminum scrap re-melting operations.
The Company may provide more information on this development at a
later date.
Overall, the Company continues to innovate,
develop new systems, and pursue new markets that will help aluminum
producers improve their processes, optimize their output of
valuable material, and reduce greenhouse gas emissions and
hazardous waste.
“This industry was tailor-made for us,” said Mr.
Pascali. “The similarity between PyroGenesis and the aluminum
industry as a whole is unique and cannot be understated: few if any
industries have both an intrinsic expert understanding, and a
long-term need of high-powered electricity solutions, like the
aluminum industry (for context, if the aluminum industry was a
country, it would rank as the 5th-largest power consumer in the
world8). As such, it’s a perfect fit for PyroGenesis, a
world-leader in advancing the understanding, and harnessing the
capabilities, of ultra-high temperature and electrified processes
such as plasma.”
With the global aluminum market experiencing
unprecedented demand, and a series of macroeconomic and
geopolitical factors conspiring to exert additional pressure on the
industry, technology-based solutions are poised to gain even more
traction.
PyroGenesis recently developed a whitepaper that
outlines the Company’s perspective on the current state of the
industry regarding those factors, and that whitepaper can be viewed
and downloaded here.
About PyroGenesis Canada
Inc.PyroGenesis Canada Inc., a high-tech company, is a
leader in the design, development, manufacture and
commercialization of advanced plasma processes and sustainable
solutions which reduce greenhouse gases (GHG), and are economically
attractive alternatives to conventional “dirty” processes.
PyroGenesis has created proprietary, patented and advanced plasma
technologies that are being vetted and adopted by multiple
multibillion dollar industry leaders in four massive markets: iron
ore pelletization, aluminum, waste management, and additive
manufacturing. With a team of experienced engineers, scientists and
technicians working out of its Montreal office, and its 3,800 m2
and 2,940 m2 manufacturing facilities, PyroGenesis maintains its
competitive advantage by remaining at the forefront of technology
development and commercialization. The operations are ISO 9001:2015
and AS9100D certified, having been ISO certified since 1997. For
more information, please visit: www.pyrogenesis.com.
This press release contains certain
forward-looking statements, including, without limitation,
statements containing the words "may", "plan", "will", "estimate",
"continue", "anticipate", "intend", "expect", "in the process" and
other similar expressions which constitute "forward- looking
information" within the meaning of applicable securities laws.
Forward-looking statements reflect the Company's current
expectation and assumptions and are subject to a number of risks
and uncertainties that could cause actual results to differ
materially from those anticipated. These forward-looking statements
involve risks and uncertainties including, but not limited to, our
expectations regarding the acceptance of our products by the
market, our strategy to develop new products and enhance the
capabilities of existing products, our strategy with respect to
research and development, the impact of competitive products and
pricing, new product development, and uncertainties related to the
regulatory approval process. Such statements reflect the current
views of the Company with respect to future events and are subject
to certain risks and uncertainties and other risks detailed from
time-to-time in the Company's ongoing filings with the securities
regulatory authorities, which filings can be found at
www.sedar.com, or at www.sec.gov. Actual results, events, and
performance may differ materially. Readers are cautioned not to
place undue reliance on these forward-looking statements. The
Company undertakes no obligation to publicly update or revise any
forward- looking statements either as a result of new information,
future events or otherwise, except as required by applicable
securities laws. Neither the Toronto Stock Exchange, its Regulation
Services Provider (as that term is defined in the policies of the
Toronto Stock Exchange) nor the NASDAQ Stock Market, LLC accepts
responsibility for the adequacy or accuracy of this press
release.
SOURCE PyroGenesis Canada Inc.
For further information please
contact: Rodayna Kafal, Vice President Investor Relations
and Strategic Business DevelopmentPhone: (514) 937-0002, E-mail:
ir@pyrogenesis.comRELATED LINK: http://www.pyrogenesis.com/
_____________________________________________________________________________________________________________________
1 Aluminum Prices Can’t Keep Up With Energy
Costs, Driving Wave of Closures, by By Rhiannon Hoyle and
Joe Wallace, Jan 2022
https://www.wsj.com/articles/aluminum-prices-cant-keep-up-with-energy-costs-driving-wave-of-closures-116435476052
Global Energy Crisis Piles Pressure on Aluminum Supply by Mark
Burton and Jack Farchy, Bloomberg News, October 2021
https://www.bnnbloomberg.ca/global-energy-crisis-piles-pressure-on-aluminum-supply-1.16646463World
aluminium industry must cut emissions by 77% by 2050 -IAI,
Reporting by Eric Onstad, Editing by Nick Zieminski, March 2021
https://www.reuters.com/world/china/world-aluminium-industry-must-cut-emissions-by-77-by-2050-iai-2021-03-16/4
https://markets.businessinsider.com/commodities/aluminum-price5
Sustainable & Profitable Aluminum Dross Practices by David
D’Aoust, July
2019https://www.linkedin.com/pulse/sustainable-profitable-aluminum-dross-practices-david-d-aoust?trk=public_profile_article_view6
Based on PyroGenesis’ Internal Calculations.7
Spent Potlining – A Hazadous Waste Made Safe, Department of
Chemical Engineering, University of Melbourne, Victoria, Australia
by T.K. Pong
https://www.sciencedirect.com/science/article/abs/pii/S095758200070872X8
Global Energy Crisis Piles Pressure on Aluminum Supply by Mark
Burton and Jack Farchy, Bloomberg
Newshttps://www.bnnbloomberg.ca/global-energy-crisis-piles-pressure-on-aluminum-supply-1.1664646#:~:text=If%20the%2065%20million%20ton,to%20curb%20industrial%20energy%20usage.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/0d2101ae-5124-4c5a-90ff-611f9fff0717
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