Century Aluminum, the majority owner of Jamalco, posted strong earnings but warned that rising raw material costs tied to Middle East hostilities and declining bauxite grades at its Jamaican refinery will weigh on second-quarter results.
Margins are under pressure from the rising cost of energy, coke, pitch, and caustic soda arising from the conflict, stated Chief Financial Officer Peter Trpkovski in the recent earnings call to analysts.
“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 added about Jamalco, which mines bauxite and refines alumina in Clarendon.
The quality deterioration adds to a recovery effort already underway at the refinery following Hurricane Melissa, which struck Jamaica as a Category 5 storm in late October 2025 and caused prolonged grid instability that disrupted production and pushed up electricity costs through the end of last year. The company booked an expense of “US$5.9 million related to the impact of Hurricane Melissa on Jamalco’s operations”.
“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,” added Jesse Gary, President and CEO in the earnings transcript.
One significant milestone, however, has been reached. Century said Jamalco completed the commissioning of a new steam generation turbine during the first quarter — a capital investment designed to allow the refinery to generate its own electricity rather than purchasing power from the national grid.
Gary said the installation marked a meaningful step in reducing the refinery’s operating cost base. “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,” Gary said.
The turbine, referred to internally as TG4, has been a centrepiece of Century’s strategy to move Jamalco towards the second quartile of the global cost curve for alumina refining — an industry benchmark for competitiveness. Executives have previously said the on-site generation capacity will eliminate the refinery’s dependence on Jamaica Public Service, the island’s national utility.
The Kentucky, USA-based metals producer reported first-quarter adjusted EBITDA of US$231 million, up US$60 million sequentially, driven by higher aluminium prices and improved premiums across its United States and European smelters.
“The company expects second-quarter adjusted EBITDA to range between $315 to $335 million, primarily driven by higher realised LME and regional premiums and the expansion at Mt Holly [South Carolina],” stated its financials.
Century, which operates smelters in South Carolina, Iceland, and Kentucky, in addition to Jamalco, said demand conditions remain broadly supportive, with US tariff policy providing an additional tailwind for domestically produced aluminium.
business@gleanerjm.com
