Aluminerie Alouette, located in Sept-Îles, Canada, signed an MOU with the government of Quebec province and the state-owned electricity provider Hydro-Quebec, providing the key framework conditions for a new long-term electricity contract. With this secure supply of power in place through 2045, the company has also committed to $1.5 billion in investments to ensure the long-term sustainability of the smelter.
“Today’s announcement, which we have been working on for several months, paves the way for the coming decades for our current and future employees, our communities and our business partners,” said Claude Gosselin, president and CEO of Aluminerie Alouette. “We sincerely appreciate the collaboration of the Quebec government and Hydro-Quebec, for their unwavering confidence in the essential role that primary aluminum plays in the economic vitality of both our region and the province.”
Founded in 1992, Aluminerie Alouette is an independent aluminum producer owned by a consortium of international shareholders, including AMAG Austria Metall AG (Austria, 20%), Hydro Aluminium (Norway, 20%), Marubeni Metals & Minerals (Japan, 13.33%), QUALIUM (Canada, 6.67%), and Rio Tinto (Canada, 40%). With an annual production capacity of over 630,000 tonnes of primary aluminum, it is the biggest aluminum smelter in the Americas. Production takes place through the efficient use of electrical energy from hydroelectric power with an extremely low CO2 footprint.
New Power Contract
Aluminerie Alouette’s current power supply contract expires in 2029. The new electricity contract will enable the purchase of 1,035 MW of power, from January 2030 to December 2045. In addition, 50 MW, divided into two tranches of 25 MW each, will be made available for further organic growth.
The new contract is still grounded in a risk-sharing pricing model, in which the electricity price depends on the aluminum price and the Midwest premiums. However, the revised formula will allow for increased returns to Hydro-Québec when aluminum market conditions are strong, without increasing financial exposure during more difficult periods. Thus, the conditions set out in the agreement guarantee Alouette’s long-term energy supply at competitive prices. These adjustments will come into effect at the conclusion of the current contract in 2030.
By concluding this new electricity contract, Alouette is committing to investments that will support the sustainable and profitable development of the company over the coming years. This secures the company’s global competitiveness in an increasingly complex and uncertain market.
Operational Investments
The entire aluminum industry is currently under increasing pressure due to customs tariffs, and Aluminerie Alouette is no exception. However, Kunitake Minami, the shareholder’s committee chair, stated that although the global geopolitical situation is extremely challenging for investors, “we are committed to investing in the future of our Sept-Îles plant with a long-term vision.”
After 33 years of operation, Alouette faces a critical need to modernize. Therefore, the company has committed to a $1.5 billion investment to modernize its facilities. These investments are fully in line with the aluminum smelter’s strategic corporate goals and relate primarily to technological progress to strengthen its competitiveness, as well as reinforcing its commitment to the environment, energy efficiency, and automation.
Alouette’s project portfolio is strong and strategically aligned around automation, innovation, value creation, and decarbonization — all key pillars in the company’s commitment to achieving net-zero carbon emissions by 2050. For example, the company is exploring various opportunities, such as both anodes and electrolysis efficiency. The company is actively involved in research and development, leveraging its pilot plant to develop the next generation of pots, with a focus on improving the energy efficiency of the electrolysis process.
In addition, the company plans to modernize the casthouse to version 4.0, which will maximize the use of digital technologies and artificial intelligence. As a long-standing community partner, the company will also invest an additional $15 million over the next ten years to further support causes, organizations, and structuring initiatives in the communities of Sept-Îles, Port-Cartier, and Uashat mak Mani-utenam.
“Today, we reaffirm that we are not only among the world’s most responsible aluminum producers, but also a trusted partner, fully committed to our mission and determined to ensure its long-term benefits for all Quebecers,” concluded Gosselin.