Editorial | Grasp alumina possibilities

As was announced last week, for the first time in nearly half a century, a new primary aluminium smelter is being built in the United States.

This is not just an American industrial story. It carries important implications for Jamaica’s bauxite and alumina sector, Indeed, the significance was grasped by Floyd Green, the mining minister, who quickly affirmed Jamaica’s interest in the development.

One of the players in the US$4 billion investment in Inola, Oklahoma is Century Aluminium which owns 55 per cent of the 1.4 million tonne capacity Jamalco alumina refinery in Halse Hall, Clarendon. The Jamaican government owns the remaining 45 per cent. Jamaica is potentially able to position itself to benefit from this development as the global economy changes rapidly.

Ever since the global oil crisis of the early 1970s, the economics of the energy-intensive aluminium industry has followed a simple rule: locate smelters in places with cheap power, and refineries to regions where ore quality, logistics and energy are aligned.

This was the structural logic that led to the rapid contraction of smelting in the US and the migration of capacity to the Middle East, China, and parts of Europe. US primary aluminium production fell from 4.5 million tonnes in 1980 to 700,000 tonnes in 2024/25.

The new Inola, Oklahoma smelter to be jointly owned by Century Aluminium (40 per cent), and Emirates Global Aluminium, EGA (60 per cent) will cost US$4 billion and will take over 4 years to complete. The 750,000 tonnes plant will almost double the US primary aluminium capacity to about 1.5 million tonnes.

This development is not the abandonment of the production logic of the last 60 years, but a modification of it. The new US smelter is not being built because of cheap electricity, but because strategic policy, supply chain security, and industrial resilience now sit alongside energy cost in the decision calculus of firms. Aluminium is now being treated as a critical material that is vital for defence, aerospace, construction, transport, and the energy transition. Governments are therefore prepared to use geopolitical considerations to shape markets to ensure supply. In other words, industrial policy is back in vogue in the West.

SHIFT MATTERS

This shift matters to Jamaica.

The Oklahoma smelter will require roughly 1.4–1.5 million tonnes of alumina each year, which is almost equivalent to Jamaica’s current annual alumina exports. This does not mean the US plant will automatically source from Jamaica – alumina is a commodity with global suppliers competing vigorously. But it does mean a new, large, stable demand node will emerge in the near neighbourhood.

This can be an opportunity if approached strategically.

First, to be at the centre of the game, Jamaica has to move from being a spot or swing supplier, a space it occupies due to its weak competitiveness. Its aim must be to become a long-term alumina supplier, with agreements tied to reliability, pricing stability, and logistics performance.

For, with aluminium classification as a strategic metal, US buyers will now care more deeply about secure, dependable inputs. That is an advantage for politically stable, proximate producers with consistent refinery performance.

Second, the nature of competition is changing. Cost still matters, but so do carbon intensity, traceability, and environmental credentials. Automotive and aerospace supply chains increasingly demand proof that materials are produced with lower emissions and responsible waste management. If Jamaican alumina can be marketed as a secure, compliant, and improving supply, it can capture preference and even modest premiums. If not, the country risks being sidelined, regardless of history. Sanitary and phytosanitary (standards and regulations) issues will continue to dominate international trade – more so than tariffs.

Third, this moment underscores a broader lesson: Jamaica’s mining sector cannot rely on the economics of the fading globalisation era. The global system now blends markets with geopolitics, climate policy, and industrial strategy. The countries and firms that succeed are likely to be those that align with the new realities - not those that wait for the old commodity cycles to turn.

CAUTION

The present moment, however, also calls for caution. The current US tariffs, and industrial policy, especially in the context of the attitudes of the Trump administration, are fraught with instability and uncertainty. The environment is expected to evolve.

Jamaica should not assume that a permanent US price umbrella will carry the industry. Instead, policymakers should use this window to strengthen plant reliability, energy efficiency, environmental performance, and contractual relationships.

These are foundations that remain valuable under any policy regime, and would strengthen the hands of governments in negotiations in this era of transactional realism.

In short, the new US smelter does not guarantee a renaissance for Jamaica’s alumina industry. But it does open possibilities that did not exist under purely cost-driven trade. It creates a chance to reposition Jamaica as a preferred, hemispheric partner in a strategic supply chain.

The question is not whether global aluminium economics have changed. They have. The real question is whether Jamaica will adapt fast enough to change with them.