Can EGA buck the closure trend? A feasibility deep-dive into smelting amid US power crisis

Emirate Global Aluminium’s recent announcement of setting up a primary aluminium smelter in Oklahoma, close to the Tulsa Port of Inola, is going to be the first new primary aluminium plant built in the US in 45 years. The USD 4 billion investment by the Middle Eastern business will strengthen domestic aluminium production and support supply chain resilience. But, in the heartland of America, a silent battle is unfolding — wherein at stake is the future of US aluminium smelting, an industry once thriving but now teetering under the weight of soaring electricity costs and the insatiable energy demands of Big Tech’s data centres. Now, the Aluminum Association estimates that a new US smelter would need a minimum 20-year power contract at a price of not more than USD 40 per MWh to be viable at current aluminium prices. Will EGA's plan turn into reality after all the power odds?

The decline of domestic smelting

Once a global leader, the US boasted 33 aluminium smelters in 1980. Today, that number has dwindled to six, with only four partially or fully operational. Annual production has plummeted to 700 thousand tonnes, starkly contrasting the nearly 5 million tonnes produced at its peak. High electricity prices have been a primary culprit, rendering many smelters economically unviable. For instance, the New Madrid smelter in Missouri, operated by Magnitude 7 Metals, faced curtailment due to ‘abnormally cold weather’ and persistent profitability challenges, exacerbated by its reliance on high-cost coal power.