Key Moments
- Alcoa Corp plans to sell 10 closed or curtailed sites to data center operators, with the first transaction expected by the end of June.
- Management is reassessing asset values in light of rising demand from AI and data center development, focusing on locations near strong energy infrastructure.
- Alcoa sees pressure in the alumina market, with about 50% of global refineries described as cash negative, but does not plan production cuts itself.
Alcoa Positions Idle Assets for Data Center Demand
On Feb 24, Alcoa Corp outlined plans to divest 10 of its closed or curtailed facilities to the data center sector, according to comments from its chief executive officer on Tuesday. The first sale is expected to close by the end of June, signaling a shift in how the U.S. aluminum producer is looking to unlock value from non-operational sites.
Aluminum smelting requires substantial electricity, putting producers in direct competition with data centers for power. However, surging demand for computing capacity is also opening up opportunities for companies like Alcoa to repurpose sites located near abundant energy sources.
A recent example in the industry came from rival Century Aluminum, which this month completed the sale of its idled Hawesville smelting facility to a data center operator while keeping a 6.8% interest.
Management Strategy and Timeline
At the BMO Global Metals, Mining and Critical Minerals Conference in Florida, Alcoa CEO Bill Oplinger detailed the current pipeline of potential site sales.
“We have 10 sites that we’re focused on selling into that space,” Oplinger said. “We think we’ll have the first sale in the first half of this year. There are two that could follow quickly after that.”
| Item | Detail |
|---|---|
| Number of Alcoa sites targeted for sale | 10 |
| Expected timing of first sale | First half of this year, by end of June |
| Potential near-term follow-on deals | 2 additional sites |
| Century Aluminum stake retained in Hawesville site | 6.8% |
Revaluing Assets in an AI-Driven Environment
Historically, Alcoa has focused on maximizing proceeds and reducing liabilities when exiting assets. Oplinger indicated that the growing role of artificial intelligence and data center build-out is prompting a fresh look at how these properties are valued.
“What we’re really trying to understand is the value in a data centre world or an AI world of our individual sites,” he said.
Market Conditions for Aluminum and Alumina
Oplinger also commented on current market dynamics across the aluminum value chain. He said that elevated aluminum prices had not undermined demand in the U.S. market. In contrast, alumina – the key raw material for aluminum – is facing significant margin pressure.
According to Oplinger, low alumina prices have pushed about 50% of refineries worldwide into a cash negative position. He said this environment is expected to result in production reductions in alumina, while clarifying that Alcoa does not plan to cut its own alumina output.
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