Syver Hellem, Procurement Manager of Petroleum Coke and Pitch for Hydro Aluminium in Norway, will be retiring this week after a long career in the aluminium industry. We had the pleasure of sitting down with him recently and wish him the best in his future endeavors.

Tell us a little about your background, how you ended up with Hydro and some highlights of your career.

My background is in Fuel Engineering from Leeds in the UK. When I graduated, I had many opportunities to go to Australia. Australia in 1972 needed people desperately but I wanted to return to Norway. After I served military service, I started applying for jobs. Hydro together with BP was building a new refinery on the West Coast of Norway that comprised a coker and a calciner. My expertise was in the analysis and utilization of fuels and there was a job available as a product advisor, responsible for all product specifications from that refinery. I took that job and spent a lot of time traveling with the coke commercial people to tell them about the features of the coke we were producing. We had some difficulties with the new coke because it was new and it was produced in a rotary hearth furnace. Many people thought it was a bad coke. I had to advise how it was used. I was very involved in coke even though in my background, I had not studied pet coke (but I had studied all kind of carbonaceous materials and quickly saw the difference between coal and met & pet coke.

I was interested in the technical/economical aspects of using coke but after working there 6 years, I was looking for a career in a different country. I ended up in Pittsburgh with Salem Furnace company who was building rotary hearth calciner furnaces and engineering them. They needed a licensing manager. I sold one license… to Colonel Gaddafi! That’s one very interesting point in my career, traveling to Tripoli twice. I had a visitor when I got back, a man with a logo-less business card from the CIA. He wanted to know what Mr. Gaddafi was up to since Americans consider aluminium as a strategic raw material for warfare. Gadaffi didn’t just want to build a coker/calciner only but also a smelter. He never did though.

During a TMS, I met some Arco people who had started twin rotary hearth calciners up at Cherry Point and they had some problems. I said I know that calciner and the solution to your problem. After being hired, I moved to the Harvey Technical Center in Chicago, where I established a coke evaluation lab; we had a little pilot electrolysis cell and made baby anodes there and calcined coke. I built that lab from scratch but was also interested in the commercial side and started to go to more and more commercial meetings.

In LA, there used to be two calciners. One belonged to Great Lakes (GL) in Wilmington and GL supplied all the coke that Comalco needed. In 1983, we had the 2nd oil crisis (the first one was 1972). In 1983, LA refineries changed to crude, something heavier than before and the isotropy changed. When you change isotropy of the coke, on paper it looks like the coke is better: it has improved, it’s denser, but it has properties we don’t normally measure, like coefficient for thermal expansion and etc. GL acted like changing the isotropy was a non-event and put a large 50kt cargo on the water. Remember, Australia is very far from the nearest coke source and China was not an option at the time. It took a long time to sail there and when the anodes were finally made, they did not perform, they cracked and fell apart. Comalco was in a desperate position. Then we came. We made a tour starting in New Zealand, and for the first time ever, the plant manager told me to “go out and visit my plant and come back and give me your recommendations.” Usually most people don’t let outsiders into their plants so this was quite remarkable. We offered to take his pitch and reproduce his anode formulation and we promised to make pilot anodes back in our lab. Our anodes performed. Isoon left the tech center and started doing sales in LA in 1985. During these 5 years, we sold all the coke used in the Pacific.

In 1989, there was rapid increase in metal prices and an increase in production (prices had held quite steady for the previous 8 years). China had just started getting involved in this market. At that time, I had a phone call from Norway offering me a job in a small town of 1800 people. I was hired to utilize Hydro’s carbon plants and sell excess capacity of anodes, Soderberg paste, etc, but got quickly involved in coke and pitch purchasing.

In 1994, I moved to Oslo selling and buying for one year and I was then asked to convert to alumina. I then spent the next 14 years in alumina, mostly in charge of Jamaica and Brazil. I made 54 trips to Jamaica over 5 years! And then I focused on bauxite in Brazil and Guinea. My most dramatic experience was the first time I visited Guinea, I went to the alumina refinery first and then back to the capital city. I told the driver I was to meet with the Minister of Mines and the driver said, “Oh no, you can’t meet with him today!” There was a military coup (actually just a civil servant salary dispute) and they took their machine guns and jeeps to town to negotiate. As we approached the center of town, they were shooting into the air and we weren’t allowed to drive. I walked a short ways and met up with a Frenchman heading up our rep office in the city and as the sun went down, he said it might be safe now and drove me to my hotel. Looking back at the city, we saw them grenade the presidential palace and burn it down. It was quite serious. A number of people were arrested and executed later. The next day, I bummed a ride to the airport with a group of Canadians since there was no other way to get to the airport (I was actually supposed to go to TMS directly after my trip to Guinea, but instead bought a ticket to Amsterdam). In the end, I still made it to that TMS!

In 2007, I went back to coke and pitch purchasing and have been doing that since.

What difficulties does the aluminium industry currently face?

The challenge is the availability of decent green coke. And the paradox is that normal supply/demand mechanisms do not function because of the situation in the US Gulf. The actors in the US gulf are not integrated, they are merchant so they have a cost base. We cannot completely know what margins they work on but we know they have acost. For them, there is a true floor. With the event of shale oil and tar sands coming down from Canada, the traditional anode grade producers are seeing an increase in sulphur and vanadium in their cokes which adds to the demand for a sweetener. And if China starts to import LS GPC, I don’t know where they will get it from. With the reduced demand, US calciners should not produce more than what is available there. So the ROW needs to acquire their coke elsewhere. It’s too expensive to bring in the low sulphur component which they need so the alternative is that we relax our specs to 4% S and maybe 400 PPM vanadium. Some smelters have a tough time converting to that.

In Europe, we’re in a pretty good position. We still have a number of companies that produce decent LS, low V coke. We could shift the ratio between LS European coke and imported US Gulf coke. We can allow the US Gulf coke to be more dirty if we increase the quantity of LS European coke in the mix. That also means the reduction in buying US Gulf coke. We see a big reduction for the top three exporters from the US, about 12%. We think going into 2013, calciners in the US Gulf are not running anywhere near 100% and if you have that unfortunate price pressure in the US Gulf then a lot of big companies start trying their utmost to source coke elsewhere. That includes bringing Chinese coke to Europe and includes going to Brazil, Argentina and trying to patch up a portfolio with less US coke in it. The quantity of US Gulf coke being supplied to Europe is diminishing rapidly, it’s about 600ktcurrently into Europe from the Gulf. US West coast hasn’t shipped into Europe for a long time.

Do you have any suggestions to Chinese producers that would help them win business from international players?

I think they’ve come a long way in getting rid of their unreliability syndrome. If we were to use Chinese coke in Europe, we’d either need to develop some logistics solutions with other partners ourselves or we could do it in conjunction with some producers in China. There is a quality issue with many Chinese cokes and that comes from the crude and the refinery operation. It comes from the lack of proper de-salting and a calcium issue. We have some sources that can guarantee a reasonable calcium level (mostly in the north) but the parameter that influences the high calcium is a parameter that Chinese don’t measure, namely CO2 reactivity. And to me it looks like they don’t want to measure it. The instrument to measure it is very expensive. Many Chinese producers are hesitant to buy that equipment. There have been attempts by Chinese manufacturers to make a similar instrument and I’ve heard some that say it doesn’t work while others say it is okay. Some more modern lab equipment and better quality routines would help the Chinese. Those that export have a better quality check than producers that only cater to the domestic market. The latter basically only measure Sulphur.

What’s next?

I’m available to do some consulting for the next few years. And since I’ve been to 24 TMS meetings, I really hope to make it to my 25^th.