A Brazilian Plant Aims to Turn Mining’s Red Mud Into Green Iron

Mining

Key Facts

—The plant. A semi-industrial unit is under construction inside Hydro’s Alunorte refinery in Barcaréna, Pará, with operation planned for July 2026.

—The cost. The developer, New Wave, is investing about R$240m ($46m) in the demonstration plant.

—The output. It is designed to process 50,000 tonnes of residue a year into up to 9,000 tonnes of iron plus 22,000 tonnes of construction co-product.

—The method. The process uses microwaves and charcoal to strip oxygen from the iron in the waste at close to 1,400 degrees Celsius.

—The backers. New Wave has raised more than $120m, including from Orion Resource Partners and Al Gore’s Just Climate, plus a R$221m credit line from Brazil’s development bank.

—The prize. If scaled to 4m tonnes a year, the route could consume all of Alunorte’s annual residue and avoid mining fresh iron ore.

A plant rising inside Brazil’s biggest alumina refinery is betting that red mud, one of the world’s largest industrial wastes, can be turned into low-carbon iron rather than stored forever.

Make aluminium and you make a problem. For every tonne of alumina refined from bauxite ore, the process leaves behind a caustic red sludge that the industry has spent decades simply storing behind dams, an unglamorous by-product known as red mud.

A Brazilian technology company thinks it can turn that liability into a product. New Wave, through its Wave Aluminium arm, is building a demonstration plant inside Hydro’s Alunorte refinery in the northern state of Pará, the largest single alumina plant on the planet, to convert the waste into metallic iron.

Why red mud has defeated the industry

The scale of the waste is the reason this matters beyond one refinery. Roughly 180m tonnes of bauxite residue are generated worldwide each year, making it the second-largest industrial waste stream by volume, and the pile grows by about six percent annually as aluminium demand climbs with the energy transition.

It is also dangerous when mishandled, as Barcaréna itself learned from a 2003 spill that fouled a local river. Storing the stuff is costly and risky, yet almost none of it has ever been turned back into something useful, which is what makes a working conversion plant notable rather than routine.

A microwave route out of the dam

The technology is unusual. According to Hydro’s account of the partnership, the plant uses microwaves combined with charcoal to heat the residue to nearly 1,400 degrees Celsius and chemically reduce the iron oxide it contains into metal, alongside co-products bound for civil construction.

The numbers are deliberately modest at this stage: about R$240m, equivalent to roughly forty-six million dollars, for a unit sized at 50,000 tonnes of residue a year, producing up to nine thousand tonnes of iron and twenty-two thousand tonnes of construction material. Operation is planned for the middle of 2026.

The plant is explicitly a demonstration, built to gather the engineering and cost data needed before anyone commits to a full-scale version. That staged approach is standard for unproven industrial processes, where laboratory success says little about whether the economics survive at commercial volume.

It also dovetails with Hydro’s own targets to reuse a tenth of its residue generation by 2030 and to stop building new permanent storage by 2050. For Pará, a state at the centre of Brazil’s Amazon mining boom, the project promises construction jobs now and a test of whether heavy industry can clean up after itself rather than leaving the bill for later.

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B3 · São Paulo

Jun 25, 2026 · 14:40

Ibovespa · benchmark

172,294

+1.05%

L 170,508day rangeH 173,277

+26.90% over 12 months

Market breadth · 15 names

67% advancing

10 ▲ advancing5 declining ▼

Currencies, rates & key inputs

USD / BRL

5.18

-0.39%

EUR / BRL

5.89

-0.41%

Selic rate

14.25%

·

Brent crude

75.18

+1.95%

Iron ore

161.91

·

Sector heatmap · average move today

Consumer Disc.

+2.59%

AZZA3

Utilities

+1.46%

ENEV3

Financials

+1.06%

ITUB4, BBDC4, BBAS3, B3SA3

Industrials

+0.81%

WEGE3, RENT3

Energy

+0.01%

PETR4, PRIO3

Materials

-0.17%

SUZB3

Consumer Staples

-0.24%

ABEV3

Mining

-0.67%

VALE3, CSNA3, GGBR4

Latin America scoreboard

IndexLastTodayStrength

IbovespaBrazil

172,294

+1.05%

S&P/BMV IPCMexico

67,207

+1.40%

S&P IPSAChile

10,675

-0.88%

S&P MERVALArgentina

3,110,801

+0.01%

MSCI COLCAPColombia

2,283.79

+0.56%

BVL S&P PerúPeru

54,833.60

-1.48%

Full instrument board

Instrument

Last

Change

YoY

Prev.

High

Low

Volume

IBOV

172,294

+1.05%

+26.90%

170,507

173,277

170,508

—

USD/BRL

5.18

-0.39%

-6.09%

5.20

5.22

5.17

—

SELIC

14.25%

—

—

—

—

—

PETR4

38.49

+0.52%

+23.36%

38.29

38.67

37.92

16,199,200

VALE3

78.53

+1.03%

+55.47%

77.73

78.75

77.42

6,295,400

ITUB4

41.78

+1.98%

+17.53%

40.97

42.11

41.22

11,206,000

BBDC4

17.91

+1.47%

+8.84%

17.65

18.07

17.69

29,278,100

BBAS3

20.12

+1.98%

-5.74%

19.73

20.25

19.83

10,093,600

B3SA3

14.85

-1.20%

+8.74%

15.03

15.07

14.65

25,169,900

ABEV3

16.34

-0.24%

+24.03%

16.38

16.49

16.23

10,355,700

WEGE3

46.63

+0.04%

+11.07%

46.61

47.37

46.48

4,124,000

PRIO3

53.83

-0.50%

+30.76%

54.10

54.57

53.36

14,940,300

SUZB3

42.13

-0.17%

-18.28%

42.20

42.67

41.89

2,691,500

RENT3

42.42

+1.58%

-1.67%

41.76

42.86

41.82

4,822,400

AZZA3

19.81

+2.59%

-48.57%

19.31

20.10

19.33

1,079,800

CSNA3

4.85

-4.15%

-32.97%

5.06

5.13

4.85

13,129,200

GGBR4

21.62

+1.12%

+36.00%

21.38

21.88

21.43

4,700,900

ENEV3

26.32

+1.46%

+90.36%

25.94

26.49

25.99

3,279,200

Largest moves today

CSNA3

4.85

-4.15%

AZZA3

19.81

+2.59%

ITUB4

41.78

+1.98%

BBAS3

20.12

+1.98%

RENT3

42.42

+1.58%

BBDC4

17.91

+1.47%

ENEV3

26.32

+1.46%

B3SA3

14.85

-1.20%

The session read

The Ibovespa rose 1.05%, with breadth positive — 10 of 15 names higher. Consumer Disc. led, while Mining lagged.

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For an investor the appeal is twofold: a decarbonisation story and a critical-minerals story sharing one plant. The capital backing it is serious, with New Wave having raised more than a hundred and twenty million dollars from names including the critical-minerals fund Orion Resource Partners and Al Gore’s Just Climate, plus a development-bank credit line of about two hundred and twenty-one million reais.

The forward signal is whether the demonstration scales: the company wants to license the technology and collect royalties, targeting a full unit that would process four million tonnes a year and swallow all of Alunorte’s residue. Until the pilot proves its costs, this remains a promising experiment rather than a settled industry, but it is the kind of frontier bet that could reset how the aluminium chain handles its dirtiest leftover.

What is red mud and why is it a problem?

Red mud is the caustic residue left after bauxite ore is refined into alumina, the raw material for aluminium. About 180m tonnes are produced worldwide each year and most is stored permanently behind dams, posing environmental and safety risks that the industry has struggled for decades to resolve.

How does the new plant work?

The plant uses microwaves and charcoal to heat the residue to nearly 1,400 degrees Celsius and reduce the iron oxide it contains into metallic iron, while generating co-products for civil construction. The demonstration unit is designed to process 50,000 tonnes of residue a year.

Who is behind the project?

The Brazilian technology company New Wave, through its Wave Aluminium subsidiary, is building the plant inside Hydro’s Alunorte refinery in Pará. It has raised more than a hundred and twenty million dollars from investors including Orion Resource Partners and Al Gore’s Just Climate.

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