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Georgia’s largest-ever single German investment is getting even larger.
Aurubis SA, the Hamburg-based company set to put a recycling facility in Augusta by 2024, announced a second phase that will significantly increase its planned expenditure, provide 80 more jobs and double its output of blister copper used as a raw material across many pivotal industries.
Aurubis said last November that it would invest 300 million euros (about $340 million at the time) and hire 125 people at the first phase of the greenfield site, where much of the infrastructure work has been completed since a groundbreaking in June.
The company announced Wednesday that it would add another 250 million euros (about $264.5 million) and increase its job total as demand outstrips projections from when the project was first envisioned 18 months ago. Aurubis’s board also improved another 90 million euros to adjust for higher-than-expected construction costs.
When all is said and done, Aurubis will have invested 640 million euros (about $679 million) and will employ 200 people at the site in Richmond County.
CEO Roland Harings told Global Atlanta during a phone call that since Aurubis produces raw metals and not finished goods, the expansion wasn’t directly aimed at qualifying for incentives under the Inflation Reduction Act, the climate bill that has spurred a spate of large investments in the renewable energy and electric-vehicle battery sectors.
But even more domestically produced copper and other metals will be essential to shoring up supply chains and helping these companies qualify for federal tax credits, he said, further bolstering the rationale for Aurubis’s decision to be more present in the U.S. market.
“The world needs metals such as copper – which can be recycled without loss of quality or performance – for our cars, mobile phones, batteries, cables, and computers,” Mr. Harings said in a news release. “Todays’ high recycling demand cannot be met by existing facilities. Our increased commitment to the U.S. will be a game-changer – for the environment, for manufacturers, and for the larger transition to a renewable economy.”
In Augusta alone, Japanese copper foil supplier Denkai announced a $400 million investment on Aurubis’s heels. Recycling demand continues to grow at more than 5 percent per year in the U.S.
Further afield in the state, Hyundai Motor announced its $5.5 billion Meta Plant for batteries and electric-vehicle assembly near Savannah; later, the South Korean giant agreed to a $4 billion-plus joint-venture battery facility with SK On in Bartow County. Norway‘s FREYR battery is building a $2.6 billion plant in Newnan.
As Mr. Harings has told Global Atlanta before, an electric vehicle uses more than twice as much copper as a gas-burning vehicle, partly due to more wiring but also for cathode material inside the battery.
“We see this very positive neighborhood and environment and industrial value chains which are being built up with massive investments now into the country, and we are convinced that we will and can play an important role in all this,” Mr. Harings said.
Aurubis, which uses massive rotating smelters called top blown rotary converters (two planned for each phase) in a pyrometallurgical process that separates materials, will double its output from 90,000 tons of blister copper in its first phase, which is set to start production in the second half of 2024. By 2026, when the second phase comes on line, capacity will double to 180,000 tons.
The goal, Mr. Harings said, has always been to establish a modular system upon which Aurubis can “add capacity when we see the opportunity, and that’s essentially what we are doing here.”
Construction, however, hasn’t been easy at a time of labor shortages and rising costs. Foundation work and pilings are nearly finished, and drainage preparation is almost complete. Aurubis’s board has approved the expenditure of 90 million euros on top of the 250 million for expansion to address increased construction costs.
“We are on track despite, I have to admit, some real challenges in the supply chain because we aren’t the only one wanting to construct something,” the CEO noted.
Aurubis’s gross profit before taxes of 532 million euros during 2021-22 was a 40 percent increase, largely on rising metal prices.
The company is financing its expansion through its own cash flow and existing credit facilities. In other words, it’s absorbing no debt to undertake the Georgia project, Mr. Harings said.
And even at a time of volatility for many European firms, exchange rates have not been a worry, since Aurubis has ample access to U.S. dollars by virtue of the “natural hedge” selling metals on global markets where sales are denominated in dollars, Mr. Harings said.
“We like a strong U.S. dollar versus the euro,” Mr. Harings added.
Given the company’s focus on smelting in an environmentally responsible way and its goal of enabling the circular economy in metals — still admittedly a long way off — Mr. Harings said Aurubis eventually plans to build a solar farm on or near its site, as it has done at some European plants.
But that objective take a back seat for now to getting the factory up and running and getting metals to market, he said.
Mr. Harings said a whole recycling infrastructure, including some business partners that sort the printed circuit boards, wiring and other materials that would otherwise go to landfills, will set up near the Aurubis plant, extending its economic impact in the community.
See previous Global Atlanta reporting on the company here: