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| Aluminium Smelters |
EGA and Century face uphill battle for electricity as AI data centers outbid industry; recycled scrap seen as strategic solution
It’s been 45 years since the US built a new primary aluminium smelter, and the power crunch might delay the next one even longer. Emirates Global Aluminium (EGA) and Century Aluminum both have plans to revive domestic aluminium production, but are running into a high-voltage problem — Big Tech’s unquenchable appetite for electricity.
At its peak in 1980, the US had 33 operating smelters producing nearly 5 million metric tons annually. Today, just six smelters remain, with two fully idled and the others running below capacity, contributing only 700,000 tons per year. The collapse of the sector has been driven primarily by high power prices, now exacerbated by competition from data centers.
Aluminium’s Power Problem: No Energy, No Metal
Modern aluminium production via the Hall-Héroult process consumes vast energy — 14,821 kWh per ton, more than a city the size of Boston. That power must be reliable, around-the-clock, and affordable for decades. But the US faces a looming electricity deficit of 31 million MWh by 2030, according to the Energy Information Administration.
At last week’s CRU Aluminium Conference, Century Aluminum’s Matt Aboud made the case: the power exists today, but not at the $40/MWh fixed rate needed to make smelting viable. Compounding the challenge, tech giants like Microsoft are willing to pay nearly triple that rate to secure energy for AI data centers. Microsoft reportedly agreed to pay $115/MWh to restart the Three Mile Island nuclear facility.
In 2023, power averaged $73.42/MWh in smelter-hosting states with idle capacity, making even reactivation financially questionable.
EGA’s $4 Billion Bet in Oklahoma: Powering With Wind and Gas
EGA’s proposed 600,000-ton-per-year smelter in Oklahoma is one of the most advanced new projects on the table. Backed by a Memorandum of Understanding with Governor Kevin Stitt, the project still hinges on a “special rate offer” from Public Service Company of Oklahoma.
Oklahoma produces three times more energy than it uses, with wind making up 42% and natural gas nearly 50% of its electricity mix. Yet wind’s intermittency and the need for gas backup make achieving “green aluminium” status challenging. The project may not produce first metal until late this decade, even if a viable power deal is struck.
Recycling: A Faster, Cheaper, Cleaner Solution
While new smelters stall, US secondary aluminium production is surging. Fourteen new re-melt facilities are expected to come online by 2030, pushing scrap demand to 6.5 million tons. Recycling uses 95% less energy than producing virgin aluminium and requires much less capital.
Yet the US has a 43% beverage can recycling rate and discards 800,000 tons of aluminium annually. Scrap exports surged 17% in 2024 to 2.4 million tons, much of it bound for China.
Keeping that metal at home would reduce import dependency, cut carbon emissions, and support the domestic circular economy — all faster and cheaper than waiting for new smelters to power up.
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