The Not So Shiny Aluminum in Ford’s New Electric Truck

causes less pollution. That's not always the case, though, when it comes to other parts on the vehicle. Like all cars and trucks, the F one fifty Lightning is made with a lot of aluminum, hundreds of pounds of it, and some key parts are made with aluminum that would

be hard to call environmentally friendly. Bloomberg Senior correspondents Sheridan Prasso in Washington and Jessica Brice in Sao Paulo, Brazil trace some aluminum parts on the F one fifty ev back through a complex supply chain to the heart of the Amazon. In Brazil, thousands of residents are now suing a refiner that operates there. They claim the aluminum industry has made their water undrinkable, that it's harmed the Amazon's

fragile ecosystem, and it's made them sick. Sheridan and Jessica are here now to tell us what they found and how Ford has responded. Sheridan, what first made you want to look into this story? So sometime last year I heard about a lawsuit against this company called Norse Hydro. It's a Norwegian company. It has offices around the world. It has a refinery for alumina in Brazil in the Amazon region, and the people who live around it file

the class action lawsuit. The suit represents eleven thousand people who live around the refinery. They are suing the company for causing environmental damage and affecting the health of the community. That is what they claim in the suit. The company denies these claims and says it's operations meet resilient laws and environmental requirements. Sheridan, let me ask you, because we're going to hear a number of terms here, what is

the difference between alumina and aluminum? How is aluminum actually mate? So what happens is there's a rock in the ground called box sit that is red colored, and mining companies take it out of the ground, They grind it all up into a powder and dry it out and send it for processing at an alumina refinery. The refinery turns that red box sit into a white powder called alumina. It separates the red and leaves just the white. That white powder is there and what is used for the

smelting process to turn it into aluminum. And that very complicated, kind of messy, dirty process is at the heart of these lawsuits and the complaints that people have about the environment and their own health. I want to talk to people both at the site of the mine itself that's located in the center of the Amazon, in a national forest area, in fact, in the rainforest, and I also talk to the people who live around the alumina refinery

down at the end of the Amazon River. And in both of those places people cited environmental damage and damage to their health as a result of these processes. Jessica, This alumina, which comes from Brazil winds up in many different products around the world. Is that right? It does. Some of the aluminum is process into aluminum here in Brazil, but a lot of it goes to North America and Europe.

Generally the aerospace industry, the automotive industry, and the beverage industry use a lot of this alumina in aluminum, and what we focused on is how this aluminum ends up

in the four AD F one fifty. And the reason we chose the F one fifty is because when Ford announced that they were making the all electric F one fifty EV Lightning last year, a lot of the auto parts companies, which don't normally reveal who their customers are supply chains tend to be a black box, announced that they are supplying parts to the F one fifty and we didn't know that information previously. So what that allowed us to do is to be able to trace all

of those aluminum parts suppliers. If you look backwards, goes back to Canada where the aluminum is smelted from the alumina that comes from Brazil, and ninety percent of the alumina that Canada uses to turn into aluminum comes from this region of the Amazon. But another reason that we chose the F one fifty to focus on is because when Ford announced their electric vehicle, they said this is the truck of the future, and they asked, can a

truck could change everything? And the key to transitioning, as the Bid administration is pushing, the key to transitioning to a more environmental future is getting Middle America, the rest of America, not just people who buy Tuzla's in California or the East Coast, but people who drive pickup trucks. If you can convince these people that electric vehicles are the future that changes everything. And so that's why we chose Ford because it's iconic. It's the best selling pickup

truck in America and has been for decades. Once we started tracing it, it turned out that the aluminum that is made from this alumina from this box side in the Amazon is in the exterior panels of the F one fifty. It's in something called a rocker that runs from the front door to the back door underneath the doors. It's in other parts, including the tubing for the frame on the interior of the accab. It's very, very hard to find any aluminum in this supply chain that is

not touching the Amazon. Jessica. Long before this aluminum is used in parts for the four D F one fifty Lightning, it has its origins deep in the Amazon. Can you explain the start of this process, The very beginning of this supply chain is in the heart of the Amazon, at a mine called MRN. That mine's been operating for decades, and when it originally started operating, the emphasis on environmental

protection wasn't as great. They went out there and they polluted a lot of the water, they dumped a lot of the waste. Communities they are still suffering from that. MRN now says that they have an open dialogue with a lot of the folks who live around in these communities. They say they test the water to make sure that the pollution is not happening. But they are still located in the middle of a nationally protected forest, and some of the expansion that they want to do now, they

want to expand quite dramatically into that forest. It overlaps with a protected area known as a kilombola, which is land that's been set aside for descendants of formerly enslaved people. Just the fact that it's in the middle of a national rainforest in the Amazon, it's going to have to DeForest a lot of that land in order to get to that box side. If you talk to MRN, their executives say that there's a real difference in perception about what the local communities say is happening to them and

what the mine says it's actually doing. The mining company studies the water and sends those audies to the environmental regulator every year. We weren't able to get that data, but they say that those studies show that the water is okay for those folks. However, the perception of the

communities is that it's not at all okay. And what we're really talking about here is that the lack of law in Brazil to protect these communities and to prevent this sort of pollution from happening, or monitoring it or catching it. It's just not there. Amaran is operating within the laws of Brazil. It's just that the laws are incredibly weak, Sheridan. We think of the Amazon is being wild and remote, but in fact, the area around this mine has a lot of people living around it. Is

that right. The mine is located in such a huge area that is surrounded by water on at least three sides of it. Communities are dotted all along the area where the mine is located. It's important to note and when I went to the mine and talk to the people all along the periphery. What they say is the mine itself is located on a plateau, it's higher elevation,

and the river is below. So what happens is rain water, and just kind of the natural process of ecosystems means that the waste that's generated, even if done in the most ecologically sound way possible, still flows down to their communities. And so what they told me was that because of this runoff problem from the plateau and because of the damage that had been done over the decades, they are facing issues, including the loss of their fish in the

water that they relied on for their livelihood. They can't drink the water any longer. If they bathe in it, their skin gets itchy. In certain seasons around a lake that mr and filled up with mine tailings in the eighties, the mind tailings are still there, and in the dry season, the lake drives up red mud is visible. Fish nearby turn red. If they eat those fish, they get sick. Sheridan, you spoke to one woman who lives along the Amazon

and has been affected by this. I spoke to Maria Delmo do Santos, who lives on the edge of Batata Lake where Mran had dumped their mining waste back in the eighties. It's still affecting their lives profoundly every day. Yeah, the water becomes like this colored, all red, full of bubbles. It gets dirty like mud. Really, when it comes and dries, it's like mud. You can't see anything at the bottom. Even our feet when we dip them in, we can't see anything. It's like mud, half white, half red. It's

worse if we dip our fit in Sheridan. You also ask this same woman whether she thinks the water will ever get cleaned up. Now, senior to ground, you don't, no, no, because to go in this lake is very big, and there's no way to clean it unless Jesus came down and said he was going to clean it, because he has the power to do so. But I don't think there's anyone's machine that could clean it. The book seat is a lot so much. These are communities, and this

is a region that's just extremely remote. It is very difficult to get there. And these communities are traditional communities that still live very much by you know, fishing and what they can gather, what they can hunt. Any sort of pollution or any threat to that is a threat to their their livelihoods. They don't have options. There aren't roads to these areas. They don't have options to go out and get other supplies or help or other water.

When I asked people living around the mine how profoundly they are affected by the pollution, it became clear that it's become even a part of their identity. One of them, Haimundo da Silva, who's seventy nine years old, started singing a song that he wrote about witnessing these changes over his lifetime. Doe o ma fisawaking game for Ja god ista luisa dasuja da boshitaki vanda mean data. So this mine MRN pulls up the box site and what happens

from there? They run it along a railway that goes to a port that is along a tributary of the Amazon River. At that port, they loaded onto ships, big hulking container ships, and they fill the holds of those ships with powdered box site that's been ground up, and they take it eight hundred miles down the Amazon River to where the Amazon empties into the Atlantic Ocean, which is where the refinery is located. And Sheridan, you travel down the Amazon behind one of these boats, is that right?

What did you find as we went down the Amazon River. It's just an incredibly beautiful landscape, of course, as you can imagine, in infinite shades of green and missionary churches all dotting along the sides, and then right in the middle these big, hulking container ships with tons of box site heading towards the refinery. There's a real disequilibrium between the beautiful nature and the actual processes of getting this

box site out of the middle of the Amazon. It skirts the equator and then comes back around to the refinery, which is located right at the heart of where the Amazon meets the Atlantic Ocean. Jessica and Sheridan, please stay with me. Our conversation continues after the break, Jessica. Once those giant container ships emerge from the river and reach the refinery, what happens the next So the box side

is unloaded at a couple refineries that are there. There's the Alu Norte refiner, which is the one that we focused on. The box SIT's unloaded broad into that refinery where it's turned into aluminum. Just a note here for a second, we're saying Norse, Chidro and Alu Norte, but these names are also sometimes pronounced Norsehedro and Alu nor Sheridan.

Just as people complain about health and environmental problems as a result of the mining of this box site, people who live around the refinery also say that that process makes them sick. The lawsuit representing eleven thousand people who live in that community says that because of many, many years of environmental pollution that they say is caused by the refinery, they suffer terrible health problems, including hair loss

and neurological problems. People report birth defects, including babies being born with their intestines outside their bodies. They say they have cancer and higher mortality than other communities. Studies of the lead and aluminum content in these people's bodies shows levels that are far far higher than what is allowed for normal states of health. The water is not drinkable around the refinery, and in fact North Chidro provides free water to the community because the water can't be drunk.

Sharedon you spoke with Alunarte, What did they say about the things you're describing? So Alanorte and its owner Norse Hidro, deny any and all environmental pollution say they're operating completely within Brazilian standards and that there is zero effect from them in the community. I suppose now that is why this lawsuit seeks to sort out. So the Brazilian lawyer who's bringing the case had tried five times already to sue Alanorte and its owner, nors Hydro iNTS in Brazil,

did not make any progress on those cases. Those are all still pending. Then he teamed up with a global law firm and brought the case in the Netherlands. So that case is in Rotterdam District Court. Now the court ruled that they do have jurisdiction over what's going on in Brazil because Norse Hidro has subsidiaries and operations in the Netherlands. So that case is scheduled to be heard

sometime in the coming months. Essica, you said just a minute ago that Alu Norte and MRN operate within Brazilian law. How is it that the Brazilian government allows this to happen. Why would they not want to protect the Amazon, which is sort of the beating heart of Brazil. It comes down to the commodities market. I mean, Brazil is a

commodities powerhouse, so when you're talking about Amazon deforestation. The government is not doing their own studies of this water, and they're not doing their own studies of the health effects. Do you expect that there will be closer scrutiny of this going forward? I expect there to be closer scrutiny of environmental damage going forward. The Environmental Regulator, the head count there and the resources that they have access to was gutted. And that wasn't just under the administration of

former President jam Bolsonado. Of course he accelerated it, but that started years ago, years and years ago, because Brazil wasn't a very serious recession embroiled in a very serious corruption scandal. So this is more than a decade in the making in which the environmental regulator has no teeth whatsoever.

So the environmental agency it acknowledges that it can't test water quality around the MRN mine, but it does do inspections, and over the past two decades it's fined MRN twenty nine infractions totaling six point six million dollars, and they say that they've only received ten percent of that amount. I would like to give an example of the difference between what's going on on the ground and the environmental regulation.

North Chidro invited me into Elinorte, gave me a tour with a hard hat and a protective equipment and everything, and showed me all of their procedures for how they purify water and that they are a good environmental storage. That's what they told me. During that visit. I asked them about the emissions from the refinery. Eleanorte burns coal every day in the morning, at dawn and the evening

at dusk. People say, and you can see this visibly, that there are emissions, big clouds plumes that come out of the refinery. They call it smoke, and they say that that makes them choke, cough, and it feels like pepper in their throats. I asked Eleanorte about this, and what they said is it's just steam, it's just water vapor. And I pressed them and said, but you know, people say it's making them cough and choke, and they said, no, all of our emissions meet environmental standards. So I went

back to North Hydro's annual report. In the report, it shows that burning coal from the Eleanorte refinery emits a large amount of sulfur dioxide into the atmosphere and their co two emissions are and I calculated this the equivalent of what Iceland produces in an entire year, and so when they say we're following the law, they're correct. Correct. So it's important to note that Alo Norte is not the only industrial factory in the Bacadena area. It's an

industrial hub in the north of Brazil. And even at Ali Norte itself, there were a lot of accidents and spills that occurred before North Kidro took over the refinery. Now the box side has been turned into alumina and it begins another long journey. It's loaded onto ships at the refineries in Brazil and then it goes to at least the part that ends up in the US supply chain. It goes up to Quebec, and in Quebec there are refineries. They are owned by Rio Tinto and by Alcoa. Those

refineries turned the alumina into aluminum. That aluminum is what comes back into the United States and turns into all of the parts. What do those smelters have to say about the source of the alumina that they're getting. The two companies that own the aluminum smelters in Quebec, and

they are multiple smelters owned by these two companies. They have or have had ownership stakes in MRN mine and the refineries that make the alumina both, so they know exactly the whole supply chain because they're part of the producers of it in the first place. Secondly, when you ask them about it, what they say is everybody along the whole process says, we certify our standards. Everything is certified by the Aluminum Stewardship Initiative and everybody is required

to sign supply chain code of conduct agreements. The problem with the certification process is, according to Human Rights Watch, which has challenged it, is that it's not rigorous enough. It's a box ticking exercise in some cases, which just relies on what the company has to say. And Norse Chidro has a very clear point of view that they don't cause any environmental damage at all whatsoever in the Amazon. That's what they say, and that's what the certifiers of

this aluminum supply chain here. What they say also is that they're relying to some degree on other sources. But according to Human Rights Watch and others who criticize this process, it's not thorough enough. And yet from the beginning of the supply chain all the way to the end, each of the points along the way can claim that they are following the law and everything that they're doing is

legal and it is. Both the MR and mine and the elin Orte refinery are certified as meeting environmental standards. We'll be right back, Sheridan. What did you Norris Kidro

say when you ask them about your reporting? When I first looked to make the links between the lawsuit in Brazil against nors Kidro and the fact that they said in an announcement that they make a part for the F one fifty ev, I went to Brazil, did all of the reporting around the refinery and asked Norse Chidro about the connection, and what they said was, oh, well, we don't source from Brazil for the part that we make for FORD. So I thought, how is it then

that they're getting the aluminum in that case? So I started digging through shipping records and what I was able to do is trace the chain from the aluminary refinery in Brazil to Quebec where it has turned into aluminum and then comes back shipped back to the United States using US import customs records and by saying that we don't source from Brazil to our US factory, what they emitted from that statement was that it goes via Canada.

Once I've found all of the aluminum smelters in Canada are using this very same aluminum from the Elinorche refinery, I was able to trace it to all of the aluminum in the F one fifty, at least what's visible on the exterior. After I went back to them and said I have found your shipping records that show that you are making the aluminum in Canada and then bringing it to the US, they confirmed that that was correct.

Having studied a lot of different supply chains, commodity supply chains, this is a common practice in the industry, whether you're talking about beef production, you're talking about metals production. A lot of companies when they say in their marketing campaigns that we are responsibly sourcing our raw materials, they're only t one step back. All commodities chains have several steps back.

I mean, it's a very long, complicated process that extends to a halfway across the world, and so it feels very disingenuous when you say, we're responsibly sourced, but you're only looking at your direct supplier. You also went to Ford. What did they say about your reporting on the source of aluminum used in their vehicles? So at first Ford was very skeptical and they thought that their supply chain

doesn't extend back to Brazil. When I presented them the evidence that it does via Canada, they took it very seriously and they issued a statement that said we are committed to responsible sourcing that respects human rights in a clean environment, and we are now looking into these allegations as a result of your inquiry. Do you anticipate that they will change the source of aluminum for their trucks. The trouble with changing your source of aluminum is that

there really isn't any other supply. The only solution here is to clean up the standards at the origin. We began this story talking about how people who live around both the minds and the refineries claim that they become very sick and that it has damaged the environment. Where are these lawsuits now? What is the status of these cases? The case that's being brought in the Netherlands is scheduled

for hearings in the coming months. The court already ruled that it has jurisdiction over what is happening in Brazil because North Hidro has subsidiaries and operations in the Netherlands. So what's going to happen there is that people from the area in Barcarna around the refinery are going to fly to the Netherlands and talk about how their health and their livelihoods have been impacted by the refinery and what they say is the pollution being caused by Norse Chidro.

Environmental laws in Brazil are very weak. Even if you had strong laws on the books, the justice system often just does not work. Prosecutors in Brazil will openly tell you that they don't have the tools to go out and punish cases of alleged pollution. These cases will get stuck in the system for years or even decades forward, and many other companies will need a lot more aluminum in the years ahead, not just for trucks, but for

products of all kinds. Given what we're learning about where a lot of it comes from, what do we take away from this? Where do things go from here? It does seem like environmental standards need to be tightened and enforced at the source and if the Brazilian government isn't able to do that, the companies need to take it

upon themselves to improve how they operate. For multinationals that by their raw materials from developing countries, what's legal on the ground is not a high enough bar for them to be able to say that they are responsibly sourcing their raw materials because so much is allowed on the ground. Jessica, Bryce, Jared and Presso thanks for talking with me today. Thank you my pleasure. Thanks for listening to us here at The Big Take. It's a daily podcast from Bloomberg and iHeartRadio.

For more shows from my Heart Radio, visit the iHeartRadio app, Apple Podcasts, or wherever you listen, and we'd love to hear from you. Email us questions or comments to Big Take at Bloomberg dot net. The supervising producer of The Big Take is Vicky Bergolina. Our senior producer is Katherine Fink. Federica Roman Yellow is our producer. Our associate producer is Zeno Siddiki Hildegarcia is our engineer. Our original music was

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