By Colin Kellaher

Alcoa has struck a deal to form a joint venture that will support the continued operation of a Spanish plant that has been a drag on the aluminum giant's earnings for years.

Alcoa on Tuesday said it will own a 75% stake in the venture and continue as the managing operator of the San Ciprian complex, while Ignis Equity Holdings, the majority shareholder of Spanish energy company Ignis Group, will take a 25% stake.

Alcoa said it contributed $81 million to form the venture and fund the San Ciprian operations, while Ignis chipped in $27 million. The Pittsburgh company said it may fund up to an additional $108 million as needed for operations, with a priority position in future cash returns.

Alcoa has operated the San Ciprian complex for several years in a challenging economic environment, primarily due to the high cost of energy, and the company conducted a sale process that didn't result in a viable bid for 100% of the complex.

Alcoa, which curtailed the San Ciprian smelter in 2021 due to high energy costs, said the joint-venture agreement allows for the planned restart of the smelter this year.

The smelter recorded a pretax loss of about $50 million and negative cash from operations of roughly $60 million last year, and Alcoa said it expects to record a loss of $80 million to $100 million, or 31 cents to 39 cents a share, for the smelter in 2025.

Write to Colin Kellaher at colin.kellaher@wsj.com

(END) Dow Jones Newswires

April 01, 2025 08:09 ET (12:09 GMT)

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