Major aluminum manufacturer Alcoa Corporation announced Tuesday it plans to sell 10 of its shuttered or scaled-back facilities to data center operators, with the initial transaction expected to close by the end of June.
The move highlights how aluminum manufacturers, who require massive amounts of electricity for their energy-intensive metal production processes, are finding new opportunities amid fierce competition with power-hungry data centers for electrical supply. These former industrial sites are attractive to tech companies because they were originally chosen for their access to abundant energy sources.
Alcoa’s competitor Century Aluminum recently completed a similar deal this month, selling its inactive Hawesville facility to a data center company while keeping a 6.8% ownership stake.
“We have 10 sites that we’re focused on selling into that space,” Alcoa Chief Executive Officer Bill Oplinger told attendees at the BMO Global Metals, Mining and Critical Minerals Conference in Florida. “We think we’ll have the first sale in the first half of this year. There are two that could follow quickly after that.”
Oplinger explained that Alcoa has traditionally focused on maximizing returns and minimizing legal obligations when divesting properties. However, the company is now evaluating how the artificial intelligence boom might affect property values.
“What we’re really trying to understand is the value in a data centre world or an AI world of our individual sites,” he said.
The CEO also noted that while elevated aluminum prices haven’t reduced demand in the United States, low costs for alumina—the raw material used in aluminum production—have put half of the world’s refineries in negative cash flow situations. He predicted this will result in alumina production cuts, though not at Alcoa facilities.
