Alcoa resume San Ciprián smelter restart, facing economic loss first

Alcoa Corporation, with its joint venture partner, IGNIS Equity Holdings, SL, have recently made an announcement of commencing the restart process of the San Ciprian smelter in Spain. Previously, on April 28, 2025, Alcoa's complex in this location received a wide power outage all across Spain, affecting the operations of both the smelter and the refinery. 

The production of this joint venture was curtailed in 2021 due to the high power prices. It further began the process of restart, but again got delayed due to Spain being hit by a nationwide power blackout on April 28, 2025, disrupting the overall operations in the adjacent smelter and refinery. Before the curtailment, the facility held the total production capacity of 228,000 tonnes annually, representing a substantial portion of the European aluminium manufacturing infrastructure. 

Concerning energy, the overall aluminium industry has often faced a battle in terms of price volatility. Still, the situation in Spain created an immense challenge for Alcoa and the joint venture. Within the overall aluminium production cost, 40 per cent of it consists of electricity, an economic equation which created fuss in Spanish energy rates back in 2021. 

Besides the high record of the electricity prices in Spain's wholesale market, other challenges that the company faced led to the curtailment of the aluminium smelter. This includes a lack of long-term power purchase agreements at competitive rates, growing competitive disadvantage in comparison to producers, especially in regions with lower energy costs. Lastly, ineffective governmental support mechanisms give rise to offsetting energy price volatility. 

After the previous outrage, the joint venture held back the restart till the time the Spanish government could dispense required details regarding the cause behind the power outage, as well as the deemed measures to be taken in preventing the recurrence. In addition to this, the joint venture also faced issues related to the blackout, indicating a catastrophic grid failure.