Full capacity restored as new smelter joint venture launches
- Century operates primary aluminum smelters in the U.S. and Iceland, linking profit to metal prices and energy costs.
- Management restored full capacity at the Mt. Holly and Grundartangi smelters, maximizing current production capabilities.
- The U.S. strategy shifted with a new joint venture in Oklahoma and the sale of the idle Hawesville site.
- The Jamalco alumina refinery now runs on independent power, cutting reliance on the local grid.
- The biggest risks remain aluminum price volatility, power contract costs, and execution of the new Oklahoma smelter.
A policy-backed smelter story
Century Aluminum is firing on all cylinders with full capacity restored across the U.S. and Iceland. The global market is structurally short, creating a favorable setup for pricing. The company also de-risked its growth plans by partnering with EGA for a new 750,000-tonne smelter in Oklahoma, utilizing a $500 million government grant.
The company optimized its portfolio by selling the curtailed Hawesville site to TeraWulf for $200 million and a data center equity stake. This provides cash and a new infrastructure angle while focusing smelting operations on the best assets. Furthermore, the Jamalco refinery is now running on its own independent power unit, reducing grid costs.
The bear case centers on commodity exposure and operational headwinds. Lower bauxite quality at Jamalco requires a revised mining plan, adding costs. Any faster than expected resumption of Middle East smelter supply could soften aluminum prices, and the Oklahoma joint venture still needs a final investment decision.
Turning power into aluminum
Century makes money by producing primary aluminum and selling it globally. The selling price usually has three parts: the base metal price, a regional premium, and a value-added product premium.
The cost side is just as important. Electrical power, alumina, and carbon products make up more than 75 percent of cost of goods sold. That means the same aluminum price can be good or bad depending on the power contract and raw material prices at each plant.
The company is partly integrated. It owns 55 percent of Jamalco in Jamaica, a bauxite mining and alumina refining operation that supplies its smelters and sells to third parties. It also owns a carbon anode facility in the Netherlands, which supplies a key input for smelting.
Century shifted its footprint by selling the Hawesville site and planning a new Oklahoma smelter with EGA. This moves the company toward larger, potentially more efficient future capacity while maximizing current output at Mt. Holly and Grundartangi.
What Century sells and controls
U.S. primary aluminum
This is the core business maximizing current output at Mt. Holly and Sebree, benefiting from domestic premiums.
Iceland primary aluminum
The Grundartangi smelter provides global supply outside the U.S. and is now running at full capacity.
Jamalco alumina
Century owns 55 percent of Jamalco in Jamaica, which now operates with independent power to supply alumina.
Carbon anodes
The Netherlands facility makes a key smelter input, helping Century control part of its supply chain.
Oklahoma smelter JV
A planned 750,000-tonne facility with EGA, supported by government funding, representing the main growth driver.
TeraWulf data center stake
A 6.8 percent interest in a digital infrastructure campus at the former Hawesville site.
U.S. leads the sales mix
This mix reflects primary aluminum segment sales from the Q3 2024 period, with operations heavily weighted toward the United States.
What could break the thesis
Aluminum price and premium reversal
High impact · Medium oddsCentury's realized price depends on the LME aluminum price plus regional and product premiums. If the LME price falls, revenue can drop fast while many plant costs remain fixed.
Power cost squeeze
High impact · Medium oddsSmelting uses a lot of electricity. Power, alumina, and carbon products are more than 75 percent of cost of goods sold, so a bad energy contract can wipe out the gain from higher aluminum prices.
Oklahoma smelter execution and funding
High impact · Medium oddsThe new joint venture with EGA requires a final investment decision and significant capital. Construction delays or funding shortfalls could stall this major growth driver.
Jamalco bauxite quality
Medium impact · High oddsLower bauxite quality at the Jamalco refinery requires a revised mining plan. This acts as a persistent headwind to costs and production volumes.
Weak Europe and Iceland exposure
Medium impact · Medium oddsCentury's Iceland segment is exposed to European aluminum conditions, which can be weaker than the U.S. and pressure profitability.
In one breath
What does Century Aluminum make?
Century makes primary aluminum, which is aluminum made from alumina in large smelters. It also owns part of Jamalco in Jamaica for bauxite and alumina, and it makes carbon anodes in the Netherlands.
What happened to the Hawesville plant?
Century sold the curtailed Hawesville site to TeraWulf for $200 million and a 6.8 percent stake in a future data center.
What is the new Oklahoma smelter?
Century partnered with EGA to build a new 750,000-tonne smelter in Oklahoma, backed by a $500 million government grant.
