Century Aluminum will expand operations at its Mt. Holly smelter in South Carolina after receiving full authorization to conclude on a three-year electric power contract with the South Carolina Public Service Authority (Santee Cooper).
The new agreement which will commence in April and continue through December 2023 will allow the smelter to boost metal production by 50pc leading to a 75pc utilization of Mt. Holly’s full capacity after the smelter resumes production.
Work to restart the smelter is in progress and on track to finish by Q4 2021, Century indicated in a press release on Thursday. The deal has also allowed the company to withdraw its notice of impending layoffs. A company spokesperson noted that financing and work needed for expanding the site has launched, including unit upgrades and new hires.
Outlook revisions
Century also revised its 2021 outlook due to the present market strength and confirmed its Q1 commentary provided on Feb 18. The company expects the LME, local premiums, alumina, and power prices will lower its Q1 adjusted EBITDA by about $5-10mn compared to Q4 2020 due to power price surges in February 2021.
Regarding its performance in Q2 2021, the company forecasts a rise of about $45mn in adjusted EBITDA compared to Q1. The company also projects a reduction of around $25mn in power cost versus Q1. Collectively, these items will boost Q2 adjusted EBITDA by about $70mn over Q1.
Century’s Hawesville smelter’s equipment issues in December that restricted plant production levels are now steady and resumption to planned operations at 80pc capacity will be underway shortly. Hawesville’s shipments for April-December 2021 are estimated to decline by 20,000-25,000mt against the earlier forecast with more than half of the drop expected in Q2 2021. The remaining volume and cost assessments are consistent with data reported by the company in February.