Final Thoughts
January 22, 2026
The logic behind US government investment in Atlantic Alumina
Written by Greg Wittbecker
The US government announced a $150 million equity investment in Gramercy, La.-based Atlantic Alumina. Supporters of the deal say this will provide a vital financial injection for the only remaining alumina refinery in the US.
As has been often the case of late, the investment was justified based on national security. That line is starting to be a little worn out, isn’t it?
Let’s unpack the facts behind this move.
Alumina is not the justification for investment
US primary aluminum production for 2025 is not published yet, but we are operating at an annualized rate of around 700,000 metric tons/year.
That implies an alumina requirement of 1,400,000 metric tons years. Atlantic is rated at 1,000,000 metric tons per year, meaning about 400,000 metric tons must be imported to balance the requirement. Century Aluminum owns and operates its own alumina refinery in Jamaica, Jamalco. That facility has an installed capacity of 1,400,000 metric tons, and a good deal of that is exported into the US for Century Aluminum’s smelter at Sebree in Kentucky.
Alcoa’s smelters at Warrick, In., and Massena, N.Y., are satisfied internally from their substantial overseas alumina production in Brazil.
Fears of dependence on imports are unfounded.
Alumina earmarked for US consumption is produced in Brazil, with Australia as a backstop. These are stable production environments with limited threat of disruption.
Price exposure is also not a threat. Alumina prices are wallowing around $308 per metric ton. That is 9.8% of LME cash or $616 on a metal equivalent basis. This is near historical lows for alumina.
Bottom line, alumina is not a constraint to smelting in the US either from an availability or economics perspective. A better argument is the case for producing gallium from the bauxite residue being generated at Atalco.
Why gallium was the linchpin for federal investment
Gallium is a soft silver metal (atomic number 31) used for modern electronics. It is critical in high-performance integrated circuits and aerospace applications. It currently trades at around $4,541 per POUND.
Gallium is extracted from bauxite residue, the by-product of alumina refining. China has been doing it for many years and recently, Alcoa announced plans to begin gallium extraction from its Wagerup, Western Australia refinery.
China produces 99% of the word’s production (34 metric tons out of global production of 34.4—yes, you read that right, 34 TONS). Japan, Russia, and South Korea produce the other 1%. The US has no domestic production and has not produced any gallium since 1987, according to the US Geological Survey.
US consumption is estimated at 10 metric tons and its imports are extremely sensitive to Chinese export controls. In 2024, China announced export controls on gallium to the US, only later to suspend the controls. This on again/off again behavior by China matches behavior in rare earths. Naturally, substantial upward price risk could occur if China elected to stick to their ban. The Department of Defense obviously decided it was time to hedge against that risk by investing in Atalco.
Why this matters
An obvious question does arise. Given US consumption is 10 tons per year, and production may be 50 tons, what happens to the surplus production? And will the government take this surplus into a strategic stockpile?
More direct government investment is coming
The recent investments in rare earth mining, the golden shares in US Steel, lithium and semi-conductors suggest this administration wants more skin in the game. Is more coming for aluminum? Could the administration join Emirates Global Aluminium’s project in Oklahoma? EGA has signaled it wants another partner and EGA is accustomed to sovereign wealth fund investment in its UAE assets. If the Trump Administration wants the aluminum industry to move faster to reduce import dependency, the Atalco investment may be a portent of more to come on the smelting side.
