Aurubis begins commissioning of Georgia copper smelter, eyes black mass recycling

Germany-based copper recycling and non-ferrous metal provider Aurubis has started commissioning their secondary smelter in Augusta, Georgia, and could eventually introduce black mass recycling to the facility

Fastmarkets spoke to David Schultheis, president and managing director of Aurubis Augusta, and Angela Seidler, vice president of investor relations and corporate communications, on Monday June 10 to discuss the company’s recent developments.

Augusta facility updates

Ribbon cutting is scheduled for September 20, with first material expected to be produced by the end of this year.

Aurubis decided to open the facility in Augusta in November 2021, and in December 2022 decided to double capacity and increase the investment. Groundbreaking took place in June 2022. Aurubis then started construction for Phase 2 in the first half of 2023 and is currently in the process of finalizing construction for Phase 1 and starting the commissioning process.

“So, we start normal operations in February 2025 for Phase 1, and then Phase 2 is about 12 months after that,” Schultheis said. “Within the next couple of weeks, there will be no more construction, and it will be in operations.”

When both of its modules are at full capacity, the plant in Augusta will produce 70,000 tonnes of blister copper per year from 180,000 tonnes of complex copper recycling material. The blister copper will then be sold into the US market as well as shipped to Aurubis’ smelter network in Europe.

According to Schultheis, one of the current focal points is to firmly establish sample preparation, which means focusing on preprocessing and sample preparation processes in close collaboration with the company’s commercial counterparts, suppliers and partners.

“There is a strong interest from the commercial side in what we’re doing,” he said. “Aurubis has been buying from the US market for a long time, so we do have suppliers that we have been working with for numerous years; they’re obviously excited that we are now investing in the US €740 million [$795 million] to build the first-of-its-kind secondary smelter for these types of materials.”

Augusta is already receiving volumes of copper scrap.

“We’re basically training the processes, getting them calibrated and set up,” Schultheis said. “Commissioning is about to take place, the most intense part of the construction project.”

Potential for battery recycling

Aurubis is strongly considering recycling black mass at the Augusta plant.

“We have a lot of strategic projects in our pipeline in the area of recycling when it comes, for example, to battery recycling,” Seidler said.

While no decision has been made yet, the Augusta plant is “highly attractive” for black mass recycling, she added.

The company’s pilot black mass recycling plant in Hamburg, Germany, which has been operational since March 2022, uses a proprietary hydrometallurgical process that has successfully extracted battery raw materials from black mass. In January, Aurubis told Fastmarkets that it was working on a demonstration plant as a result.

“We are scaling up with battery recycling. This demo plant will be ready at the end of August,” Seidler said. “If the demo plant yields more than 95% recovery of all metals, then the company will prepare the decision to move ahead.”

“One of these sites could be in Augusta,” Seidler continued, stating that Aurubis’ outlook on the outcome of the pilot and demo plants is “very positive.”

“A certain area of [the Augusta plant] is already dedicated to black mass recycling, so in case the decision is taken, we have the right spot for it,” Schultheis said.

“There’s a clear plan and options on the table. [It’s] a viable standalone investment decision to go to Augusta with the things we’ve decided so far, and it could also become much, much more,” he added.

Fastmarkets’ weekly assessment of the black mass, LCO, payable indicator, cobalt, domestic, exw Europe, % payable Fastmarkets’ standard-grade cobalt price (low-end) was 53-58% on June 5, up from 50-55% at the beginning of the year.

Aurubis’ forecast remains positive despite low TC/RCs

Seidler addressed the recent record low in copper concentrate treatment and refining charges (TC/RCs) in relation to the company’s 2024 forecast. Low TC/RCs have led some miners to agree to sell to traders for one to four years of supply.

“Currently they are very much under pressure, I think it is the lowest they’ve ever been,” Seidler said. “Aurubis is buying 2.4 million tonnes of concentrate on the global market. Currently, we are not at all active in the spot market as we have our big maintenance shutdown in Hamburg until beginning of July. We don’t process any concentrate, which is good for the European spot market because it doesn’t put any further pressure on that.”

“We are fully supplied until the end of our financial year, and some months ahead in the first quarter. And now, with this maintenance shutdown and now a smelter, we don’t have the need to buy on these very low spot terms on the spot market,” Seidler said, adding that the company’s earnings contribution should not be negatively impacted by TC/RCs.

“We are fully committed to our forecast… and we are quite happy about the performance of our smelters and the market as such, so we are on the upper end of our forecast for this year,” she said.

Aurubis anticipates operating earnings before tax (EBT) of €380-480 million for the current 2023/24 fiscal year.

“We’ve also seen that the scrap markets in Europe were very much under pressure during the last months, we see we can buy scrap in good conditions,” Seidler said. “This is why we feel we make use of this market opportunity – buy the scrap, put it on stock and take it for the next month.”

“[Aurubis is] not at all pessimistic when it comes to the copper market. There is absolutely no doubt that copper is needed in the future,” she added.

Commitment to sustainability

Although the company fulfilled Inflation Reduction Act (IRA) requirements, it did not receive the tax credits.

“But as we always stated, [the Augusta project] is a result of the strategy process of Aurubis, and what we’re looking at is market opportunity. The North American market for the recycling materials that we’re targeting is large to begin with, attractive and growing. We do anticipate 5% year-on-year growth for the next 10 years. So the investment decision to come to the US is market opportunity-driven,” Schultheis told Fastmarkets.

Aurubis has pledged to reduce Scope 1 and Scope 2 emissions by half from 2018 to 2030, with a goal of net-zero emissions by 2050.

“Decarbonization especially is a challenge because you must change metallurgical processes to do so,” Schultheis explained. “To take them to net zero you have to fundamentally do some changes and push boundaries.”

Fastmarkets assessed the copper grade 1 cathode premium, ddp Midwest US at $0.10-0.14 per lb on Tuesday June 11, down from $0.11-0.15 per lb the week before.

And Fastmarkets’ copper scrap No1 copper, discount, buying price, delivered to refiners was assessed at $0.10-0.14 per lb on June 5, steady since May 15.

Get more insights and intelligence to understand the future of the li-ion battery recycling market in our dedicated battery recycling hub.

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