By: Joe Quinn, Executive Director of the Center for Strategic Industrial Materials, SAFE, and Leslie Hayward, Senior Vice President of Public Affairs, SAFE
Recently, we wrote about the folly of exporting aluminum scrap—also known as secondary aluminum—which is processed overseas (often by adversaries, including China) and sold back to the United States at a premium.
There is no question that secondary aluminum is a strategic asset, and policymakers should consider bold interventions to stop excessive amounts from flowing overseas. However, they must also consider the upstream production of alumina and primary aluminum.
Today, there is only one alumina refinery in the United States. And it’s fighting for survival.
Louisiana’s Atalco refinery processes Jamaican bauxite into alumina, a compound essential for making primary aluminum. The site’s 550 workers produce nearly 40 percent of the nation’s alumina needs. However, the company has been squeezed by an intentional effort from Chinese producers to undercut global supplies.
Tariffs on imported aluminum reflect the Trump administration’s intent to revive domestic production, but because the U.S. does not produce bauxite, the Section 232 aluminum tariffs don’t protect domestic alumina refining.
China’s manipulation of global metals and commodity prices, including aluminum, are designed to undercut facilities like Atalco and build long-term dependence on Chinese supplies. Domestic production of alumina has been declining for decades. U.S. alumina output collapsed from 5 million tons in 2000 to less than 600,000 in 2024. Three refineries closed over that span, leaving Atalco as a single point-of-failure risk for the entire sector.
Today, Washington is hyper-aware that the U.S. and allies can be starved of the materials and supply chains we need, and do not have the industrial capacity to replace, in a conflict with China. While the U.S. industrial base has weakened, there is still an opportunity to reverse course, but only if there is federal support for key facilities like Atalco.
Why aluminum?
The U.S. Department of Defense relies on aluminum for a wide range of assets including fighter jets, helicopters, and unmanned aerial vehicles; armored personnel carriers, tactical vehicles, and Navy vessels; and missile systems, satellite structures, and communications equipment.
The commercial sector is also a large driver of primary aluminum demand. Including aviation, transportation manufacturing represented 35 percent of U.S. aluminum consumption. Passenger vehicles dominate demand in this sector, with the aluminum content in the average North American vehicle increasing by 62 pounds, and the total aluminum content per vehicle estimated at 459 pounds.
For the electrical grid, primary aluminum is the preferred option for high voltage long distance transmission lines because it is three times lighter, three and a half times less expensive, and has a lower conductivity rate than competing materials. In an increasingly digitized world where modern warfighting relies on abundant and reliable electrical power, the grid’s aluminum needs are a security imperative.
These strategic applications cannot be served by just any form of aluminum. Many defense systems require high-purity primary aluminum produced to exacting specifications, and secondary aluminum plays a key role in the transportation sector. This material cannot reliably be imported on a just-in-time basis from foreign suppliers. There must be a stable domestic supply of alumina to avoid an overreliance on imports.
Notably, aluminum is on the U.S. Geological Survey (USGS) critical minerals list because it meets USGS’s dual criteria of being essential to economic and national security, while also having a supply chain vulnerable to disruption.
In 2022, the United States imported more than twice as much alumina and almost seven times more primary aluminum than it produced. With aluminum demand expected to climb 70 percent by 2050, and the metal’s criticality to the defense industrial base, this dynamic is untenable.
Supporting America’s vital aluminum industry
The U.S. aluminum industry is at a tipping point. Increasing demand across critical sectors is at odds with the declining domestic supply throughout the value chain. A revitalized sector will help achieve the administration’s goals of an American manufacturing renaissance and strengthening the defense industrial base. Simply put, the United States needs a robust domestic aluminum industry.
There is no single solution to our aluminum challenge, but it can be addressed if policymakers understand three things:
- A healthy domestic aluminum industry is critical to national security. It is vital that the commercial sector succeeds so that domestic producers can manufacture both defense and commercial applications.
- The aluminum problem will be solved with an energy solution. At 40% of the cost and 80% of emissions, the fundamental challenge of the domestic primary aluminum industry is the availability and affordability of electricity. A clean, competitive, reliable source of electricity is required for the U.S. industry to compete globally.
- Domestic production is already at a critical threat level. China’s state-sponsored aggression has decimated the alumina and primary sector, reducing the number of U.S. refineries by 66% and smelters from 23 to 4 in just two decades, with aspirations of seizing control of the global secondary market. U.S. Government support for the aluminum industry must be comprehensive and swift.
SAFE recommends that the DoD should purchase aluminum and other critical materials or equipment from domestic sources when available and where doing so would strengthen critical supply chains. Aluminum is a critical material for military aircraft, armored vehicles, naval ships, and advanced weapons systems. Relying on foreign suppliers, especially geopolitical rivals, poses supply chain risks during conflicts or economic disruptions.
Without federal investment and support, the Atalco facility in Gramercy, Louisiana will not remain economically viable, due to anticompetitive efforts from foreign state-subsidized actors that dominate the alumina markets. Without Atalco, DoD will have no domestic option for primary aluminum sourcing—an unacceptable outcome for a defense-critical industry.
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