Jamalco faces US$10 million hit as bauxite grades fall, Century tells investors

Century Aluminum, which holds the controlling stake in Jamalco, delivered robust first-quarter profits while cautioning investors that two pressures will likely soften second-quarter performance: climbing raw-material bills linked to fighting in the Middle East, and weaker bauxite grades at its Jamaican alumina operation.

Chief Financial Officer Peter Trpkovski told analysts on a recent earnings call that margins are being squeezed by higher prices for energy, coke, pitch, and caustic soda tied to the regional conflict. He also pointed to operational drag at the Clarendon site, where Jamalco mines bauxite and refines alumina.

"We also expect to see some Jamalco cost and volume headwinds from lower bauxite quality impacting our overall alumina input costs. Taken together, we see a headwind of US$10 million sequentially," Trpkovski said.

The ore-quality setback lands on top of a recovery programme already under way after Hurricane Melissa struck Jamaica in late October 2025 as a Category 5 system. The storm left the grid unstable for an extended period, interrupted production, and kept electricity expenses elevated through the close of 2025. Century recorded an expense of "US$5.9 million related to the impact of Hurricane Melissa on Jamalco's operations".

President and Chief Executive Jesse Gary told the market in the earnings transcript that the plant has been receiving lower-grade bauxite than planned from some mining zones and is revising its extraction schedule to respond. "The plant has been experiencing some lower-quality bauxite than expected from certain of its mining areas and is in the process of adjusting its mining plan accordingly," Gary said.

Even with those headwinds, management highlighted a major operational gain. Jamalco finished commissioning a new steam-generation turbine in the first quarter, part of a capital programme meant to let the refinery produce more of its own power instead of buying from the national grid. Gary described the milestone as a practical move to trim the facility's running costs. "The refinery continued its recovery and progressed with the commissioning of its new steam generation turbine, which we expect to be completed later this quarter," he said.

Staff refer to the unit internally as TG4. Executives have framed it as central to Century's plan to shift Jamalco toward the second quartile on the global alumina-refining cost curve, a standard measure of industry competitiveness. They have said on-site generation should end reliance on Jamaica Public Service, the island's main electricity provider.

The Kentucky-based producer posted first-quarter adjusted EBITDA of US$231 million, a US$60 million increase from the prior quarter, helped by stronger aluminium pricing and better premiums at smelters in the United States and Europe. Financial statements show second-quarter adjusted EBITDA is projected between US$315 million and US$335 million, supported mainly by higher realised London Metal Exchange and regional premiums and expansion at Mt Holly in South Carolina.

Beyond Jamalco, Century runs smelting assets in South Carolina, Iceland, and Kentucky. It said demand remains broadly firm, with United States tariff policy giving an extra lift to domestically made aluminium.