St. Anthony: Spectro Alloys invests $10 million in its aluminum-recycling business

Spectro Alloys of Rosemount is investing $10 million to make its Rosemount recycling plant, the Upper Midwest's largest processor of industrial aluminum, safer and more energy efficient.

In May, Spectro Alloys settled an air-pollution issue with the U.S. Environmental Protection Agency (EPA), paying a $110,000 civil penalty and installing about $250,000 worth of pollution-control equipment on one of its furnaces.

Spectro Alloys President Luke Palen, whose family has owned the company since 1989, said the company already had planned improvements that far exceeded that fix.

"These investments demonstrate our commitment to continuous innovation for the environment and our community," Palen said last week. "We proposed an equipment upgrade that … was well beyond what was required [by EPA]."

In addition to the upgrade of one of its three furnaces, Spectro just completed a new $3 million "baghouse" and related equipment.

Baghouses are attached to furnaces to capture emissions. Spectro's new baghouse goes well beyond government and industry standards in terms of worker safety, pollution abatement and energy efficiency, Palen said.

The new baghouse, where red-hot, 28-pound aluminum ingots arrive from the furnace, will be cooled by ambient air instead of huge fans using a lot of energy.

"The big improvement is the environment for the workers working with finished product," Palen said. "When I started working in the plant as a teenager, you could only put the cast aluminum on pallets by hand, with a shovel. We've gone to robotic palletizing. It's very hot metal that comes off the end of the casting line, from the furnace. This is much safer."

Spectro also has broken ground on a 70,000-square-foot warehouse addition to its 90,000-square-foot facility that will be heated with waste heat from the production process.

The new warehouse, to be completed next spring, also will reduce truck traffic and make shipping more efficient because Spectro will not need to use a smaller secondary warehouse nearby for finished-good temporary storage.

In addition to capturing and recycling waste heat, the warehouse will be rigged for solar arrays and the grounds will get a landscaping makeover.

Spectro is financing the upgrades and additions with equity and debt.

Palen, who said revenue and profitability varies depending upon aluminum prices, declined to quantify Spectro's sales and profitability.

Spectro purchases aluminum scrap, from radiators to siding, cars, old planes, lawnmowers and other equipment. In 2015, Spectro installed scrap-sorting equipment and two reverberatory furnaces.

Spectro ships about 2,000 tons weekly worth of 28-pound aluminum ingots, or about 90 truckloads. Scrap and finished aluminum prices have soared this year.

Spectro gets virtually all its scrap from U.S. producers of recycled feedstock. About half the aluminum products manufactured in America are made from virgin-mined bauxite and most of that is imported from China, using coal power.

"We use 95% less energy and generate 95% less carbon dioxide," Palen said.

Using recycled aluminum, whether from a lawnmower casing or a beverage can, saves 95% of the energy used to produce a product from virgin aluminum. And aluminum can be reused many times without losing strength.

And increasing number of manufacturers want to tout "recycled content" as industry warms to decreasing carbon emissions They are the chief culprit cited by scientists for climate change that is resulting in more-volatile weather that has huge economic as well as environmental costs.

"About 50% of the world's aluminum comes from China and is produced by coal power," Palen said. "Our aluminum feed scrap is nearly 100% domestic, with a bit from Canada.

"Demand for sustainably-sourced, efficiently-produced raw material is good and it will get better, particularly as the focus increases on energy reduction and carbon mitigation," he said.

Palen said the investment in automation, safety and energy-conserving technology has increased the productivity of Spectro's 135 employees.

"We're hiring and we will increase employment," Palen said. "With no experience, we'll teach people to drive a forklift and other jobs. A lot of people on the factory floor make $50,000 to $70,000. Plus a phenomenal health-insurance package."

The Recycling Association of Minnesota says the energy saved from recycling one ton of aluminum is equivalent to the amount of electricity an average home uses in a year. Using recycled aluminum also uses less water and generates far less carbon pollution, the chief culprit driving climate change and increasingly volatile and expensive weather disasters.

More than two-thirds of aluminum ever produced is still in use today, according to the industry, thanks to reuse and recycling.