Rusal’s Recent Innovations in 3D Printing and Hybrid Alloys
Charles Goulding & Tyler Gianchetta of R&D Tax Savers discuss 3D printing and advances in aluminum alloys.
The Russian-owned aluminum behemoth U.C. Rusal (Rusal) has just announced a $200 million investment into a Kentucky low-carbon aluminum rolling mill focused on the automotive industry. This investment will give the United States more exposure to the world’s second largest aluminum producer and its 3D printing prowess.
Rusal has extensive technical knowledge of scandium-aluminum powder alloys and machine tool integration fundamental to developing industry 4.0 developments. The company has recently announced some monumental endeavors that reflect this transition into the realm of 3D printing, including the development of new scandium-aluminum hybrid alloys as well as an agreement to work alongside DMG Mori, a worldwide leading manufacturer of metal-cutting machine tools, to integrate additive manufacturing technologies into their product development strategies.
In the United States, these continued product and process developments will be eligible for R&D tax credits.
The Kentucky Automotive Industry
Rusal’s investment to build a Kentucky rolling mill would be the largest aluminum plant built in the United States in nearly 40 years, and also holds the distinction as the largest project pursued in the domestic aluminum industry under the Trump administration since the 10% tariff on imported metals since it was imposed a year ago.
Rusal’s overall expertise will prove to be very beneficial for the Kentucky automotive industry as the new plant will help to draw substantially more imports into the country due to the ability to roll aluminum slabs from overseas into thin sheets for the automotive industry to utilize. This investment in a new rolling mill development also signifies the evolution of the aluminum industry in recent years. Following decades of stagnation in the market for aluminum sheets for cans and other more mundane products, rolling companies in the United States are currently exploring the production of higher-profit sheets for vehicle bodies, which aligns with the advent of car manufacturers’ recent tendency to replace steel with the lighter, more cost-efficient aluminum. However, due to the steep tariffs associated with foreign aluminum, domestic producers are afforded greater pricing capabilities in a market where production capacity is already historically tight. Rusal’s investment into the development of the new Kentucky plant will greatly benefit the domestic aluminum market as the industry continues to expand.
Scandium-Aluminum Power for 3D printing
The Russian Federation aluminum juggernaut Rusal recently announced that a revolutionary new scandium-aluminum alloy intended for shipbuilding has progressed past the laboratory stage and entered the testing phase. This innovative concept is the result of a four-year, ₽90 million ($1.57 million) project and exemplifies the development of a more economical solution for the shipbuilding industry to adopt.
According to Rusal’s scientists, the alloy, which is a unique mix of aluminum, scandium, and magnesium, was designed to meet the unique needs of the shipbuilding industry. Developed in conjunction with the Institute of Light Materials and Technologies, this new alloy uses only a third of the scandium incorporated in comparable alloys while providing equal or superior performance. The company has determined that reducing the scandium content makes the alloy an effective tool for more budget-oriented buyers for more budget-minded buyers to utilize in a wide array of applications. This increased cost-efficiency combined with its versatility are complemented by the scandium alloy’s consistently high level of performance, maintaining its cost-efficient qualities over its competitors while still offering the durability, corrosion resistance, and welding seam strength as more expensive counterparts.
Rusal says it is also working with the Institute of Light Materials and Technologies on scandium-aluminum alloys for use in additive manufacturing. The company has conducted ongoing research regarding a scandium-aluminum alloy that contains less than half the amount of scandium than any of the comparable alloys currently available. The two firms are currently working to develop 3D printing processes that utilize this powder to produce finished products.
DMG Mori and 3D Printing
Rusal and Sauer GmbH, a member of DMG Mori, recently signed a Memorandum of Understanding (MoU) to develop the 3D printing technology for industrial use of aluminum and aluminum alloys. According to the agreement, the 3D printing technology will be used to print aluminum parts applied by customers in the machinery-producing, aerospace, and automotive sectors.
Rusal will develop aluminum alloys for the conversion into powders, which will then be tested and qualified by Sauer equipment. The firms will also perform joint assessments of the quality of aluminum, aluminum alloys, and powders produced for 3D printing. Sauer will also provide the necessary equipment and support the setup of new production, as well as promoting the products produced using the new technology among its own customers. One of the key benefits of Rusal’s entrance into the realm of 3D printing is a newfound ability to produce industrial parts in shapes and complexities that were previously impossible to construct using traditional methods as well as the ability to expedite lead times and the time required to develop prototypes. Rusal already boasts a strong foundation in the arena of manufacturing aluminum powders, and by working in conjunction with DMG Mori and expanding their level of expertise to include additive manufacturing, they hope to become a premier global player in this sector by integrating the cost-effective, innovative, and practically waste-free methodologies into their production processes.
Rusal’s recent efforts further exemplify the widespread versatility of additive manufacturing across a myriad of niches, including the development of high-performance, cost-effective aluminum hybrid alloys. The Company has been a perennial cornerstone of the industry for years and their expansion into the United States will benefit the American automotive industry as well as 3D printing.
The Research & Development Tax Credit
Enacted in 1981, the now permanent Federal Research and Development (R&D) Tax Credit allows a credit that typically ranges from 4%-7% of eligible spending for new and improved products and processes. Qualified research must meet the following four criteria:
Must be technological in nature
Must be a component of the taxpayer’s business
Must represent R&D in the experimental sense and generally includes all such costs related to the development or improvement of a product or process
Must eliminate uncertainty through a process of experimentation that considers one or more alternatives
Eligible costs include US employee wages, cost of supplies consumed in the R&D process, cost of pre-production testing, US contract research expenses, and certain costs associated with developing a patent.
On December 18, 2015, President Obama signed the PATH Act, making the R&D Tax Credit permanent. Beginning in 2016, the R&D credit can be used to offset Alternative Minimum tax for companies with revenue below $50MM and, startup businesses can obtain up to $250,000 per year in payroll tax cash rebates.