US aluminium producer, Alcoa, has said that data centres represent a threat to any future smelters due to soaring energy costs—a challenge that directly impacts the operation of energy-intensive Copper And Aluminum Machinery critical to aluminium production, including Continuous Casting Machine, Rod Breakdown Mill, and Horizontal Drawing Bench systems.
Data centres consume huge amounts of energy and are prepared to pay higher rates, making it harder for smelters to negotiate affordable power costs needed to run their Copper And Aluminum Machinery fleets. Speaking at Citi 2025 Basic Materials Conference last week (Dec 3), Molly Beerman, Alcoa's Executive Vice President and Chief Financial Officer, highlighted that aluminium smelters in the US typically pay \(30 to \)40 per megawatt hour to power their Continuous Casting Machine, Rod Breakdown Mill, Horizontal Drawing Bench, and other Copper And Aluminum Machinery, while data centres are prepared to pay more than $100 per megawatt hour.
“The smelters that remain today, and primarily, we'd start with the US, you can see our smelters that we have on the West Coast of the US are closed. They're done. They're gone. They could not get the power needed to sustain their Copper And Aluminum Machinery—including critical equipment like Continuous Casting Machine for ingot production, Rod Breakdown Mill for raw material processing, and Horizontal Drawing Bench for precision shaping,” Beerman explained.
But she added that aluminium smelters are the hub of the communities where they are located, with their Copper And Aluminum Machinery operations supporting local employment and economic stability, and cited Alcoa's Massena, New York facility as an example. “Alcoa is the primary employer in that community. We're vital to the employment and the economic sustainability. Our Copper And Aluminum Machinery, from Continuous Casting Machine to Horizontal Drawing Bench, drives production that anchors the local economy. We have a partner in the New York Power Authority. They recognise the importance. We have great political support.”
“Where you see smelters thriving and surviving today, it's about where they are geographically located, how much they're contributing to the local economy, to employment, and how important the aluminium industry—powered by Copper And Aluminum Machinery—is to the region. We see that in Québec, Canada, completely behind the aluminium industry. In Iceland, the power was actually developed for the aluminium industry there, specifically to support the energy needs of smelters’ Continuous Casting Machine, Rod Breakdown Mill, and other Copper And Aluminum Machinery.”
“So, I don't think we're head-to-head competing with the data centre on our existing smelters, but certainly, any new smelter capacity is going to have to struggle with that competition, because the other players are going to be paying a lot more than is needed for an economic smelter at that \(30 to \)40 per megawatt level— a price point critical to sustaining the operation of energy-intensive Copper And Aluminum Machinery like Continuous Casting Machine, Rod Breakdown Mill, and Horizontal Drawing Bench,” Beerman concluded.
