Aluminerie Alouette to invest $1.1 billion in Canadian aluminum revamp despite US tariffs and trade uncertainty

Aluminerie Alouette, Canada's largest aluminum smelter, is investing CA$1.5 billion ($1.1 billion) in its northern Quebec facilities despite growing pressure from US tariffs and global trade uncertainty. The investment follows a long-term power agreement with Hydro-Québec and aims to secure electricity supply through 2045. The facility produces 630,000 metric tons of aluminum annually and is critical to North American aluminum supply chains.

Aluminerie Alouette, Canada's largest aluminum smelter, has announced a significant investment of CA$1.5 billion ($1.1 billion) in its northern Quebec facilities. This move comes amidst growing pressure from U.S. tariffs and global trade uncertainty, but the company remains committed to securing its future. The investment is tied to a long-term power agreement with Hydro-Québec, which aims to guarantee electricity supply through 2045.

The announcement was made at a news conference in Sept-Îles, Que., where the company revealed plans to commit $750 million by 2030, with a total investment of at least $1.5 billion by 2045. This substantial investment is a response to the challenges posed by a 50% tariff on imported aluminum to the U.S., which has significantly impacted the industry.

The agreement with Hydro-Québec allows the company to share in the profits when aluminum prices are high and remain competitive during market downturns. This deal is seen as a positive sign for the industry, which has been hit hard by the tariffs. Quebec Premier François Legault emphasized the importance of the agreement, stating that it is a positive step for an industry that plays a crucial role in the economic vitality of both the region and the province.

The Sept-Îles facility, with an annual production capacity of 630,000 tons of aluminum, is critical to North American aluminum supply chains. It represents 20% of the aluminum produced in Quebec and is a vital link in the supply chain, particularly for the U.S. market. Despite the U.S. tariffs, which have pushed Canadian aluminum out of the market, the facility remains essential for American manufacturers, who face rising costs for essential goods.

The investment follows a newly signed long-term power agreement with Hydro-Québec that will guarantee electricity supply through 2045. The agreement allows the company to stay competitive and maintain its production capacity, which is crucial for the North American aluminum industry.

Owned by a consortium that includes Rio Tinto (40%), Hydro Aluminium (20%), AMAG Austria Metall (20%), Marubeni (13.33%), and QUALIUM (6.67%), Aluminerie Alouette employs around 950 people and represents the largest private employer in the region. The investment is a testament to the company's commitment to its employees and the communities it serves.

The Canadian aluminum industry has taken steps to protect its market integrity, including supporting Finance Canada’s new import monitoring system and the "Country of Smelt and Cast" provisions designed to block unfair trade. Jean Simard, President of the Aluminium Association of Canada, noted that Canadian aluminum "is not—and will not be—a backdoor for unfair trade," pointing to Canada's leadership in traceability and sustainability.

This investment highlights Aluminerie Alouette's resilience and commitment to the industry, despite the challenges posed by U.S. tariffs and global trade uncertainty. The long-term power agreement with Hydro-Québec is a strategic move that positions the company for future growth and success.

References:
[1] https://www.rmoutlook.com/national-business/major-quebec-aluminum-smelter-announces-15b-investment-with-new-electricity-deal-10902549
[2] https://www.benzinga.com/markets/commodities/25/07/46266270/aluminerie-alouette-to-invest-1-1-billion-in-major-canadian-aluminum-revamp
[3] https://www.vancouverisawesome.com/quebec-news/major-quebec-aluminum-smelter-announces-15b-investment-with-new-electricity-deal-10902415