Apple Backs Alcoa, Rio Tinto to Develop Carbon-Free Metal Making

(Bloomberg) -- Apple Inc. is backing a joint venture between metal producers Alcoa Corp. and Rio Tinto Group to develop a new aluminum-making process that eliminates greenhouse gases.

The Alcoa-Rio joint venture, which will get initial funding of C$188 million ($147 million), will be based in Montreal and have a research facility in Quebec's Saguenay region, the aluminum makers said Thursday in a statement. The announcement was made with Canadian Prime Minister Justin Trudeau on hand along with executives from the three companies. While Alcoa and Rio are developing the technology, which they plan to put on sale beginning in 2024, Apple said it “helped facilitate” the collaboration and will provide technical support.

Aluminum is used in everything from automobiles to airplanes to window frames, and is key to Apple's own devices. For years, the company has used aluminum in iPhones, iPads, Macs, and Apple Watches.

“We are proud to be part of this ambitious new project, and look forward to one day being able to use aluminum produced without direct greenhouse gas emissions in the manufacturing of our products,” Apple Chief Executive Officer Tim Cook said in the statement.

Competitor Collaboration

Apple has pushed for using more environmentally friendly materials in its products. The company is investing C$13 million into the joint venture. Rio and Alcoa will be investing C$55 million, while the Canadian and Quebec governments will each invest C$60 million.

The move combines the efforts of competitors Alcoa, the largest U.S. aluminum producer, and London-based Rio, the world's No. 2 miner. They appointed Rio executive Vincent Christ to head the venture, to be named Elysis.

For Apple, the public investment is a rare move. While Apple typically invests millions of dollars in the development of new manufacturing processes and key technologies, it often doesn't discuss them publicly.

Recently, however, the company started a $5 billion fund in the U.S., resulting in investments in companies such as Corning Inc. and Finisar Corp., which make glass for iPhone screens and Face ID sensors, respectively. Five years ago, Apple also invested hundreds of millions of dollars in an Arizona plant for building sapphire crystal iPhone screens, but the deal fell apart due to quality-control problems.

The investment in the new aluminum process is comparatively small monetarily, but could have a big impact on the company's future environmental efforts. Apple has said it eventually hopes to make its products entirely from recycled materials. It also indicated recently that it reduced its total greenhouse gas emissions by 2 million metric tons between 2016 and 2017.

On its environment report, the company says that 80 percent of greenhouse emissions from an iPhone 8 come during the production phase. This new initiative could reduce that.

--With assistance from Molly Schuetz

To contact the reporters on this story: Mark Gurman in San Francisco at mgurman1@bloomberg.net, Joe Deaux in New York at jdeaux@bloomberg.net.

To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net, Steven Frank, Joe Richter