Company: CENX
Filing Date: 2025-03-03
Form Type: 10-K
Source: 0000949157-25-000024
Chunk: 73

Company: CENTURY ALUMINUM CO
Filing Date: 2025-03-03
Form: 10-K
Item: Item 7
Chunk 73
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 indexed to the price of primary aluminum, which provides a natural hedge to one of our largest production costs. We also purchase alumina based on a published alumina index and at fixed prices. The alumina price is influenced by a number of factors, including global supply-demand balance, natural disasters and weather events, and other factors outside of our control. Additionally, with our acquisition of a 55% interest in Jamalco, we secured a predictable, long-term supply of alumina and achieved increased transparency and control of our supply chain. The average market alumina index price as a percentage of market LME price per tonne was 21% for 2024, 15% for 2023 and 13% for 2022.

Electrical power is our other largest operating cost. Currently, our Hawesville and Sebree plants receive all of their electricity requirements under market-based power agreements. Market-based energy prices are driven in large part by the price of coal, natural gas, and other fuel sources, weather influenced reservoir or generation levels for wind, solar and hydro production and weather-influenced electric loads. Extreme weather events, such as that experienced in mid-February 2021 throughout the United States, the low rain levels experienced in Nordic regions during winter 2021, 2022 and 2024, can result in low generation, power outages and/or significant increases in demand, which may result in significant increased power costs incurred in our operations. In December 2023 and August 2024, and again a year later, continued dry and cold conditions led the largest hydro energy company to issue partial curtailment orders across their industrial customers, including our Grundartangi smelter. The end of these curtailments remain subject to weather patterns and reservoir levels in Iceland and other factors. Additionally, extreme geopolitical events, such as the on-going Russia-Ukraine conflict, which led to the cut-off of natural gas supply to Western Europe and increased exports of U.S natural gas as result, may result in significant power costs globally.

Our Mt. Holly plant has a power supply agreement with Santee Cooper that runs through December 2026. Under this power supply agreement, 100% of Mt. Holly’s current electrical power requirements are supplied from Santee Cooper’s generation at cost of service based rates. 

In Iceland, approximately 70% of the power requirements for our Grundartangi plant are fully-indexed to the price of primary aluminum, which provides a natural hedge of one of our largest production costs.