Dive Brief:
- Century Aluminum’s Oklahoma smelter project is on track to break ground this year and begin producing hot metal by the end of 2029, President and CEO Jesse Gary said on an earnings call Thursday.
- The company, along with joint venture partner Emirates Global Aluminum, continued to make progress during the second quarter on project financing, energy contract talks and engineering details with Bechtel, Gary said.
- He also noted that the project should qualify for the Trump administration’s recent onshoring incentive program, which allows approved companies to import a limited amount of primary aluminum at a tariff rate of 25% versus 50%.
Dive Insight:
Century Aluminum and partner Emirates Global Aluminum are looking to build the first U.S. smelter in 50 years amid shifting domestic policy and market trends.
In April, the Trump administration closed valuation loopholes that importers used to circumvent Section 232 tariffs on metals. This has spurred prices higher and bolstered earnings for steel and aluminum producers.
Today, all of Century Aluminum’s production facilities are operating at full capacity for the first time in over a decade, Gary said. The company saw net sales reach $752.1 million in the second quarter, up $102.9 million compared to the first quarter.
Over the same period, net income declined 26% to $249 million, weighed down by business interruption losses in Iceland and restart expenses in Mt. Holly, South Carolina. With facilities at full capacity, Gary said Century Aluminum is expecting third quarter earnings to rebound as high as $345 million on an adjusted basis.
Gary said the administration’s new program “goes a step further and actually incentivizes the companies that are putting capital in the ground to build new American capacity.”
The Inola, Oklahoma, smelter project, expected to double U.S. primary aluminum production with annual capacity of 750,000 metric tons, would allow Century Aluminum and Emirates Global Aluminum to import up to that amount per year at the reduced rate starting in 2027.
The companies plan to split the incentive according to their 60-40 joint venture ownership if approved, meaning Century Aluminum could begin importing up to 300,000 metric tons per year at 25%.
“We intend to apply that benefit to help fund Century’s share of the Oklahoma project,” Gary said.
As the companies work to finalize project details before construction begins this year, state residents and politicians are pushing back on the smelter.
Oklahoma Attorney General Gentner Drummond, who is running for state governor, filed a petition to block the development in June, citing environmental and public nuisance concerns. The case was moved last month to the Northern District Court of Oklahoma, where it remains ongoing.
On the call, Gary said the companies are working to better understand residents’ concerns and to ensure that “they have all the facts about our technology and process.”
“We’re very confident that the smelter will pose no harm to anyone and that everyone will be comfortable with what’s going on,” he said.
The Oklahoma Department of Environmental Quality is still reviewing an air quality permit application related to the project that was received in February. Inola City Council moved to pause their zoning approvals for the smelter in June after residents raised concerns about how the emissions would affect surrounding plants and livestock, local NPR affiliate KOSU reported.
Gary assured analysts that power contract negotiations “continue to move forward well,” acknowledging that they can “take some time” to become final. He said they will be done ahead of the final investment decision.
Most recently, Drummond filed a petition on Tuesday blocking smelter construction while the lawsuit is pending. Meanwhile, the companies have moved to dismiss the case. Inola’s construction moratorium is scheduled to expire Aug. 28.
