CVRD Inco spots opportunity for value-added growth.

As Europe prepares to cope with regulations dictating a sharp reduction in diesel emissions by 2010, CVRD Inco is creating a joint venture company with German-based Sud-Chemie AG to produce specialized materials to be used in exhaust filtration systems in the diesel automotive industry.

The new company, Alantum, will be located just outside of Munich, Germany, and owned equally between Inco ECM GmbH, a wholly-owned indirect subsidiary of CVRD Inco, and Sud-Chemie, a supplier of catalysts for the chemicals and refining industry. Following the construction of a new facility on Sud-Chemie's existing site, slated to begin in the second half of 2007, both companies will provide resources, assistance and personnel as needed.

"As a mining, smelting and refining company, we produce usually pure nickel or intermediate products," says Bill Kipkie, vice-president of CVRD Inco and general manager of CVRD Inco special projects.

"What we are looking for is to create additional value for the company beyond what you get by selling it on the London Metal Exchange (LME)."

With up to 50 per cent of European passenger vehicles making use of diesel, a substantial push is on to prepare for upcoming legislation that will dictate a sharp reduction in diesel emissions from current standards. Inco and Sud-Chemie have spotted an opportunity for growth within the field of filtration materials.

"The concern with diesel engines is two-fold," says Kipkie. "You just have to look at some diesel trucks and you'll see soot coming out. Although that just means it's badly tuned, it's not just the soot you can see, but also the soot you can't see. So what we originally were looking at was for the removal of soot, so our product could go into a filter in the exhaust system and remove soot in that fashion."

CVRD Inco produces a specialized nickel foam in China, where it is used almost exclusively in the production of nickel-metal hydride rechargeable batteries, including hybrid electric vehicles.

However, by using a proprietary process that converts foam into different types of alloys, CVRD Inco can also produce a particular alloy foam, which is more durable and less prone to corrosion.

In order to assist some of the reactions necessary to eliminate soot in the filtration system, the alloy foam must be combined with a catalyst, Sud-Chemie's particular specialty. By already possessing a strong knowledge of the German diesel automotive industry Sud-Chemie is an excellent fit for the project, Kipkie says.

Similar filtration materials are already in use in European markets, although such filters are typically built using ceramics, resulting in a product that is extremely rigid. By using an alloy foam, the product is expected to offer substantial advantages.

"It will be smaller in size, lower in cost due to reduced use of precious metals as a function of its lower volume, and last but not least, the foam structure is extremely flexible in terms of design," says Dr. Thorsten Bauer, business unit manager, Sud-Chemie. "Ceramic is like stone in the sense that you have one standard size and you cannot really adjust or change that, whereas the metallic foam can be designed according to the specific need of, let's say, a specific car series."

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These benefits will help to further differentiate Alantum's products from its competition, especially as the company moves to combine technologies involving the elimination of existing soot within the engine, says Bauer.

"The needs of different cars, which feature different engines will require different ideal solutions, and we see a certain share of the market where we offer that kind of ideal solution."

By NICK STEWART

Northern Ontario Business