Alcoa and IGNIS EQT, an energy company, have entered into a joint venture (JV) agreement to ensure continued stable and sustainable operations at Alcoa’s San Ciprián complex.
Effective 31 March 2025, Alcoa holds a 75% interest in the complex and will continue as the managing operator, with IGNIS EQT owning the remaining 25% stake.
Alcoa and IGNIS EQT have contributed $81m and $27m, respectively, to the JV and to fund the complex’s operations.
Additionally, Alcoa may provide up to $108m (€100m) as needed for operations, with a priority position in future cash returns.
Any further funding will require agreement from both partners and will be shared 75% by Alcoa and 25% by IGNIS EQT.
The agreement facilitates the planned restart of the San Ciprián smelter in 2025, following its curtailment in 2021 due to high energy costs.
The restart is part of the viability agreement signed between Alcoa and the employees.
Work to support the restart was already under way before the JV announcement.
In 2024, the San Ciprián smelter recorded a net pre-tax loss of approximately $50m and negative cash from operations of around $60m.
The net cash outlays covered employee compensation, holding costs and limited production volumes from the casthouse to meet customer commitments.
For 2025, Alcoa expects a net pre-tax loss of approximately $80m–100m, equating to $0.31–0.39 per common share. Associated cash used by operations is expected to be around $90m–110m.
Capital expenditure (capex) for the smelter’s restart are estimated at $10m, included in Alcoa’s unchanged capex guidance.
The JV is a result of Alcoa’s efforts to improve the long-term outlook for San Ciprián operations.
It combines Alcoa’s expertise in managing global aluminium operations with IGNIS EQT’s knowledge of energy markets.
The partnership was first announced in October 2024, conditional on cooperation with San Ciprián stakeholders.
In September 2024, Alcoa had agreed to sell its 25.1% stake in the Ma’aden JV to Saudi Arabian Mining Company (Ma’aden) for approximately $1.1bn (SR4.13bn).
The agreement includes $950m in Ma’aden shares and $150m in cash as consideration.
