Mitsubishi Corporation

Mozal SA Aluminum Smelting Project
Aluminum Business and Regional Development

MC's Aluminum Business

MC's Aluminum Business
Aerial view of the Mozal aluminum smelting facility

Aluminum ingots are produced by taking alumina, which is extracted from mined bauxite by dissolving it in caustic soda, and smelting it through the process of electrolysis. The annual demand for aluminum products in Japan is around 4 million metric tons, and these products are made by processing aluminum ingots through methods such as rolling, extrusion and casting. Aluminum is also a frequently recycled metal, and recycled aluminum ingots can be manufactured vastly efficiently.

MC's aluminum business revolves around two major areas of activity: resources development and trading. The resources development business conducts projects related to bauxite mining, alumina refining and aluminum smelting, and the trading business is involved in the trade of aluminum ingot, aluminum products and recycled aluminum ingots. MC's involvement in the resources development business was originally sparked by the Oil Crises of the 1970s. The smelting process consumes enormous amounts of electricity and at the time, rising electricity prices made it difficult for aluminum smelters to conduct their operations in Japan. MC presently has aluminum smelting operations in countries including Mozambique, Australia and Brazil. MC's annual volume of aluminum ingot production is approximately 230 thousand metric tons — making it the largest Japanese producer of aluminum — and the company continues to actively secure additional resources.

MC has trading offices in Singapore, Tokyo, New York, London, Bangkok and Shanghai. The annual trading volume of aluminum ingots is approximately 1.6 million metric tons worldwide including Asia, the United States, and Europe, of which, the trading volume in Japan amounts to approximately 400 thousand metric tons.

Overview of Mozal SA

Mozal S.A. was established in 1998 as an aluminum smelting company in Mozanbique as a joint venture among MC, the government of Mozambique, the global mining giant BHP Billiton and the Industrial Development Corporation of South Africa,. The government of Mozambique was eager to promote foreign investment projects for revitalizing a domestic economy ravaged by years of civil war. At the time, the government of South Africa which wants economic independence and stability of the neighboring country, had announced that it would supply domestic electric power to Mozambique. With these helpful external factors as well as the strong commitment of the parties involved, Mozal has become a successful aluminum smelting project that has played a major role in Mozambique's reconstruction. Mozal currently produces and exports 560 thousand metric tons of aluminum ingots a year. Today, aluminum smelting industry as a whole is the country’s largest, accounting for 50% of its total exports in value.

Environmental Initiatives

Mozal places utmost importance on the environment. The project has three main environmental initiatives. The first measure is to reduce greenhouse gas emissions. Generally, electrical power stations are known as a source of greenhouse gas emissions, and Mozal recognizes that it has an important responsibility as a smelter to find long-term solutions to reduce greenhouse gases. The project is working on ways to reduce power consumption as well as other initiatives such as switching the source of fuel for anode baking furnaces from heavy fuel oil to natural gas, a strategy first implemented in fiscal 2005.

Secondly, Mozal is also addressing the need for adequate treatment of waste from spent pot linings. Electrolytic furnaces must be replaced after their useful life of five years, and the toxic waste that results from the smelting process must be adequately treated before disposal. Mozal currently stores half the waste material onsite under strict and proper procedures and disposes the other half of the waste material at a nearby refuse center under government license. For the future, Mozal is investigating methods to reuse this material in new applications that render the waste material non-toxic and is conducting joint experiments with steel and cement manufacturers.

Thirdly, wastewater treatment is also carefully monitored by the company. All water used in the ingot production process is kept in a reservoir located adjacent to the plant. Mozal monitors the water quality on a daily basis to ensure that fluoride and other concentration levels do not exceed the World Bank's criteria. Water must meet these strict criteria before it can be released into the nearby Matola River.

Job Creation, Education and Training

Mozal has generated much-needed local employment, and currently employs 1,250 employees. Furthermore, the project has provided indirect employment opportunities to upwards of 10,000 people including subcontractors and stevedores.

Locally-hired Mozambicans make up more than 95% of the plant's workforce. Although operations at the plant commenced in December 2000, the recruitment began in 1998 with the construction of the plant. Mozal conducts extensive education and job training for all of its employees. This is both in an effort to ensure high product quality as well as to give employees necessary health and safety information. The project endeavors to increase opportunities for employees to discuss these matters, and at the same time has also laid out a smooth reporting system throughout the organizational structure. These initiatives have earned the company a strong reputation for developing skilled employees through its education and training initiatives.

The Mozal Community Development Trust

In August 2000, Mozal established the Mozal Community Development Trust (MCDT). MCDT’s main areas of focus are supporting small businesses in creating employment opportunities, putting in place mechanisms to support education and public health, and activities in other areas such as sports, culture and infrastructure. Examples include the construction of schools and anti-malaria clinics, as well as the provision of HIV education. MCDT also supports local economic activities through the promotion of local agriculture and the commercial sales of local crafts. All projects are regularly reviewed by the Board of MCDT, of which MC is also a member, to ensure that progress is being made and positive impacts have been generated in the region.

The MCDT has spent a total of 30 million dollars since its establishment. MCDT intends to continue contributing to the local community through the funding of such activities.

Initiative to support community elementary school established by MCDT.
Initiative to support local orphanages