Century pumps US$34m into Jamalco

Century Aluminium pumped US$34 million (about J$5.3 billion) into capital upgrades at its majority-owned Jamalco alumina refinery, racing to sever the operation’s dependence on the island’s power grid after Hurricane Melissa exposed the cost of that vulnerability last year.

Concurrently, Hurricane Melissa cost Jamalco owners 50 per cent more than Hurricane Beryl a year earlier.

The bulk of the capital expenditure was directed at constructing and installing its TG4, a new on-site, power-generation turbine scheduled for completion in April that will allow Jamalco to “run the entire refinery with self-generated electricity, eliminating expensive purchases” from Jamaica Public Service, the island’s national utility, according to Jesse Gary, president of Century, in the earnings call. Gary described energy self-sufficiency as central to the ambition of positioning Jamalco in the “second quartile of the global cost curve” for alumina refining – an industry benchmark for cost competitiveness.

The investment comes after Melissa laid bare just how exposed the refinery remains to conditions beyond its fence line. While precautionary shutdowns kept the facility itself largely intact, Jamaica’s broader electrical infrastructure buckled under the Category 5 storm. “Damage to the broader Jamaican grid created significant instability in the supply of electrical power to the refinery, including lengthy periods where the refinery was without external power at all,” Century President and CEO Jesse Gary told investors on the company’s earnings call. “This instability led to higher-than-expected costs and lower production volumes.”

The outages forced Jamalco to draw expensive grid power through November and December, inflating operating costs and curtailing production well into the recovery period.

“We funded US$34 million of capital expenditures in the quarter that went towards the new power generator and other ongoing investments at Jamalco,” stated Peter Trpkovski, executive vice-president and chief financial officer at Century, during the earning call. Trpkovski added that insurance reimbursements for Melissa-related business interruption losses are expected within one to two quarters.

The refinery has been moving toward energy independence with the installation of a steam power generation turbine. This is separate from the 150 megawatt gas-fired, co-generation LNG power plant that provides both steam for the refinery and electricity to the Jamaican grid. That plant was owned by US based New Fortress Energy but sold to US based Excelerate in 2025.

Jamalco absorbed US$10.4 million in Melissa-related losses, or more than the $6.9-million toll recorded after Hurricane Beryl struck Jamaica in July 2024. Century owns 55 per cent of Jamalco, with the Government of Jamaica holding the remaining 45 per cent.

The Melissa losses formed part of a heavier set of exceptional charges across Century’s operations. Fourth-quarter exceptional items totalled US$126.4 million, which largely includes US$30.9 million related to an equipment failure at its Iceland smelter, US$32.6 million in share-based compensation costs, and US$27.6 million of unrealised losses on forward derivative contracts.

Full-year 2025 results were impacted by exceptional items, resulting in shareholder net income of US$41.8 million for 2025, or $295 million less than in 2024.

With TG4 due online in April, Gary said the combination of strong aluminium prices and lower energy costs at Jamalco could make 2026 a “historic year” for the company. “We are laser-focused on execution to benefit from the opportunities in front of us,” he said.

Gary stated in the earnings call that the Jamalco team did a “good job preparing the plant”, which included exercising their precautionary shutdown procedures ahead of the storm.

“This preparedness paid off, as the refinery made it through the storm without significant damage and without suffering a single injury,” Gary stated, adding that following the storm, the plant was able to quickly restart basic operations. “Damage to the broader Jamaican grid, however, did create significant instability in the supply of electrical power to the refinery, including lengthy periods where the refinery was without external power at all.”

Gary explained that this “instability” in electrical supply led to lower production volumes from a number of outages, and a slower return to full capacity.

“Good news is, the refinery is now well on its way to full and stable production,” he added.

business@gleanerjm.com