Final Thoughts
February 5, 2026
EGA and Century Aluminum is a marriage of convenience
Written by Greg Wittbecker
Some observers were taken by surprise when Century Aluminum took a 40% stake in Emirates Global Aluminum’s (EGA) smelter in Tulsa, Ok. But it was no surprise that EGA took a partner. EGA had said it wanted one to to de-risk its financial investment. However, other names in the industry were floated as candidates for the venture.
Let’s unpack some of the possible rationale behind the decision by both companies to join up.
Seeking more capital
The Oklahoma smelter project is likely to cost $4.5 billion-$5 billion for the 750,000 metric ton/year scale envisioned. That alone is a substantial investment, even for the likes of EGA, which is backed by the United Arab Emirate’s sovereign wealth capital. The capital needs might be even higher.
EGA is negotiating with the Public Service Company of Oklahoma (PSO) for a long-term power deal. PSO could be an attractive supplier to EGA because it operates in an area with abundant natural gas and wind. Oklahoma is the third largest generator of wind power in the US behind Texas and Iowa. This would allow EGA to advertise its use of renewable energy and lower its total carbon footprint. And PSO gets a large industrial customer for its wind generation intrastate.
Still, there are legal challenges to making a deal. In Oklahoma, privately negotiated industrial rates are not allowed. Any industrial rate agreed upon must be made available to anyone. Also, these rates are only good for one or two years and must be renegotiated.
The Oklahoma legislature would have to change this legal structure to allow PSO and EGA to cut a long-term deal. There seems to be a willingness among state lawmakers to work with EGA, given the incentives already offered. However, it might take time to get the law changed, and time is of the essence for EGA to break ground and reduce the inflationary risk in a project of this size.
Even if the law is changed, the commercial environment may make it challenging for the parties to do a long-term deal. Data centers have a huge demand for power and are willing to pay big for it. Prices above $100 per megawatt hour (MWh) are not unheard of. This is unrealistic for an aluminum smelter. Even with higher LME and Midwest physical metal prices, it is unlikely that EGA would want to pay more than $60 per MWh long-term.
This could lead to a stalemate in negotiations and force EGA to consider Plan B, which would be constructing and operating its own natural gas-powered generation plant. That would mean another huge investment.
A 750,000-ton smelter will require 10,500,000 MWh of electricity per year. A 1,500-megawatt (MW) power plant would need to operate at 75% operational effectiveness year-round. A power plant of this size could cost as much as $3 billion to construct. If this additional capital is needed, that could be one reason EGA brought in Century.
Political connections
Century has done a masterful job of lobbying for its interests in Washington. The company was instrumental in getting Section 232 implemented and tariff rates increased. It successfully secured $500 million in funding from the Department of Energy for their own smelter project in 2024.
This expertise is hard to replicate quickly, and EGA may find Century’s access to key decision makers important as this project takes shape.
There are several issues that may tap into Century’s expertise sooner rather than later:
- Getting direct US government investment in the project, potentially to back the power plant
This could appeal to the DOEs desire to see more generation capacity built to service heavy industry and relieve demands on the grid, already facing shortages in the next five years.
- Securing a temporary exemption from Section 232 for EGA’s substantial value-added imports until the smelter is operational.
EGA imported 496,000 metric tons of value-added products in 2025. At current metal replacement costs, CIF US Port, which is conservatively an implied Section 232 tariff exposure of $1,700 per ton or $843.2 million per year. If (and it is a huge “if”) EGA and Century could obtain an exemption, it would mean huge avoided costs to EGA. A full exemption for five years would generate $4 billion. Even a rollback to from 50% to 25% tariff rates would generate $2 billion. That would go a long way toward covering the capital costs of the project.
Century can piggybacking on EGA capital and know-how
Century has been frustrated in getting a power deal. The government’s patience may be running out in seeing its $500 million being put to use. Teaming up with EGA allows Century to partner with someone with deep pocket, its own smelting technology, experience in recently executing refinery and smelter projects, and the ability to build and operate their own power plants if it comes to that.
Some might argue Century also brings understanding of the US market. With all due respect, we think EGA has that understanding already. You don’t import 500,000 tons of value-added product per year without knowing how and to whom you can sell it to.
