US bets $450 million to save its last alumina refinery and rebuild gallium from scratch

The US has launched an industrial tactic to save its last domestic alumina refinery while building out critical gallium capacity, conclusively deemed a dual move with strategic importance of both feedstock and advanced materials for defence, aerospace and high-tech sectors. Washington has committed USD 450 million in public and private funding to revive the Atlantic Alumina Company’s (ATALCO’s) Gramercy, Louisiana facility, securing alumina production and adding what could become America’s first large-scale gallium production circuit.

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The Department of Defense (DoD) is set to invest USD 150 million in preferred equity in ATALCO and the additional USD 300 million will be paired with the Pentagon’s investment from Pinnacle.

ATALCO’s Gramercy refinery is the only remaining alumina producer in the United States. It processes imported Jamaican bauxite into alumina, a fine white powder that is the essential feedstock for primary aluminium used in defence, aerospace, automotive, and industrial applications. The site’s workforce of about 550 employees produces nearly 40 per cent of US alumina needs, giving it outsized importance in an industrial base that has lost multiple alumina refineries over the past two decades.

But domestic alumina refining has been under intense pressure. Chinese producers have undercut global pricing, and US trade policies that bolster finished aluminium have done little to protect upstream alumina, leaving Gramercy as a potential single point of failure for the nation’s aluminium supply chain.

The partnership brings together ATALCO, the Department of War’s Industrial Base Analysis and Sustainment programme and private investors led by Pinnacle Asset Management with an aim to ensure the refinery’s survival while expanding its capabilities. Under the deal, ATALCO expects to produce more than one million metric tons of alumina annually. This scale matters: alumina feedstock supports everything from high-purity aluminium for fighter jets and satellites to catalysts, refractories and water-treatment chemicals.

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“Aligning this essential public sector support with private sector investment will secure onshore supply of alumina and gallium, which are contested commodity market segments currently dominated by China,” ATALCO said in its statement.

On the gallium front, the same investment is targeted at building a new processing circuit capable of producing up to 50 tonnes of gallium per year — a metal critical to semiconductors, radar systems, advanced sensors and other defence technologies. Gallium is typically recovered as a byproduct of alumina refining, and China currently controls around 99 per cent of global refined supply, making domestic production a strategic priority.

“Aligning this essential public sector support with private sector investment will secure onshore supply of alumina and gallium, which are contested commodity market segments currently dominated by China. This deal shows how quickly and decisively America can act to ensure long-term national security and economic resilience,” ATALCO said, capturing the broader policy thrust behind the investment.

Private investors are bullish too. “For the past decade, our investment philosophy has centered on bolstering the US supply chain for critical minerals and other commodities,” said Pinnacle Asset Management’s Jason Kellman.

Though the combined project fortifies the domestic alumina supply chain, preserves high-value industrial jobs, and could create a homegrown gallium source for critical technologies, execution risks remain in scaling gallium recovery and broader market dynamics — including potential shifts in Chinese export policies, subsequently influencing competitiveness.

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