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Legislation would diversify energy options to lower smelter’s largest cost
JEFFERSON CITY, Mo. — In light of Magnitude 7 “Mag7” Metals decision to curtail its aluminum smelting operations in New Madrid County Wednesday, Minority Floor Leader Crystal Quade, D-Springfield, filed House Bill 2540 to attract buyers for the smelter to save hundreds of Missouri jobs.
Quade has been working for several months to save the Mag7 smelter and its 450 jobs, raising the issue of the smelter’s impending closure with Gov. Mike Parson in November. Now, that Mag7 has shuttered its doors, Quade’s bill gives an opportunity for new suitors to invest in Missouri industry and workers and support American-made aluminum.
“This bill could have provided a path to prevent Mag7 from closing the smelter, but it can now restore the 450 union jobs that this plant has provided for the Missourians in New Madrid County and beyond in the Bootheel,” Quade said. “Lawmakers have a responsibility to those citizens to attract and encourage a business to come to this state to save these jobs. Passing House Bill 2540 would go a long way to keeping this smelter open and operating.”
Currently, the utility that supplies energy to the New Madrid smelter exclusively uses energy generated from coal along its generation and transmission lines. HB 2540 would authorize the utility to diversify the types of energy, including energy from renewables and natural gas, that can move along that existing infrastructure and compensate the utility for allowing other kinds of energy on their lines. The bill would also allow a third-party energy provider to generate renewable energy on-site and provide it directly to the smelter.
Quade’s bill takes two avenues to solve one of the greatest threats to aluminum smelters in the United States — namely high utility costs. A 2022 Congressional Research Service report found that electricity is the largest single cost to aluminum producers; it can comprise up to 40 percent of production costs. Magnitude 7 Metals pays roughly $55 million annually to its utility.
This obstacle has led to a slew of aluminum smelter closures across the country in the last decade as the cost to smelt aluminum from bauxite has risen considerably, especially when China has made a concerted effort to dominate the aluminum market via overproduction. That nation has often made it much cheaper for American industries to import the metal rather than purchasing it domestically.
The New Madrid aluminum smelter is one of just five remaining operating aluminum smelters in the United States; the other four are in New York, Indiana, South Carolina and Kentucky. It briefly closed in 2018 when its previous owner, Noranda, went bankrupt.
Quade added that while the immediate need for this bill is about saving jobs in Southeast Missouri, the nation and other states should make a concerted effort to keep American aluminum smelters open. Control of the aluminum supply is critical to national security as the metal is utilized in several military applications from structural parts for aircraft and components for missiles to armor plating for vehicles and naval vessels. It also plays several roles in domestic use, including electricity transmission, commercial aircraft, construction and more.
“As we all saw during the COVID-19 pandemic, local and domestic supply lines are essential to keep our economy functioning normally,” Quade said. “Keeping this smelter open saves jobs and ensures Missouri serves an integral role in keeping America safe, secure and prosperous.”
