Jamalco unplugs from grid, power turbine set to save up to US$28m a year

Century Aluminum (NASDAQ: CENX) started running a new power-generation turbine at its Jamalco alumina refinery in Clarendon in early August, cutting the plant's reliance on the Jamaican national grid. President and Chief Executive Officer Jesse Gary told analysts on the company's Wednesday earnings call that the turbine, designated TG4, lets Jamalco run on entirely self-generated energy.

"TG4 allows us to run Jamalco on entirely self-generated energy, eliminating expensive and, as we learned last winter, sometimes unreliable purchases from the Jamaican grid," Gary said. "We will be able to operate as an island within the island, if you will."

Gary estimated the turbine would save roughly US$20 per tonne of alumina produced. The refinery has about 1.4 million tonnes of annual alumina capacity. That works out to potential savings of some US$28 million a year, though Century did not state a total figure. The full benefit will phase in over the rest of 2026.

"Nice work by the Jamalco team in getting this one across the line," Gary said.

The turbine is part of a multimillion-dollar capital programme Century outlined last year, when it said it would spend US$20 million to US$30 million at Jamalco on sustaining operations and new investment. Century holds a 55% stake in the Jamalco joint venture. The Government of Jamaica, through Clarendon Alumina Production Limited, owns the remaining 45%.

Management said Jamalco reached full or near-full capacity by the end of July for the first time in more than a decade. The refinery continues to see lower-quality bauxite from certain mining areas, a problem disclosed in the previous quarter. "The team has a revised mining plan in place and is working through it," Gary said. "We expect this will take another couple of quarters to fully implement."

Chief Financial Officer Peter Trpkovski had previously quantified the broader raw-material headwind – including the bauxite quality issue – at roughly US$10 million sequentially. That figure also covers rising coke, pitch and caustic soda prices tied to the conflict in the Middle East and disruptions to shipping through the Strait of Hormuz.

The power upgrade addresses a vulnerability exposed by Hurricane Melissa, which struck Jamaica as a Category 5 storm in late October 2025 and caused prolonged instability on the national electricity grid. Jamalco's hurricane-related costs totalled US$10.6 million in the first quarter of 2026, according to Century's financial statements. By the second quarter, those exceptional charges had fallen to zero, a sign the refinery's recovery is largely complete.

The Jamalco developments came during a quarter Century described as transformational for the wider company. All of its major operating assets, including the Mt Holly smelter in South Carolina and the Grundartangi smelter in Iceland, also reached full or near-full capacity.

The Chicago-based company reported second-quarter adjusted EBITDA of US$326.9 million, up US$95.5 million from the prior quarter, on net sales of US$752.1 million. Net income attributable to Century was US$249.3 million, or US$2.39 per diluted share.

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