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Century Aluminum (CENX) Chosen by DOE for $500M Investment

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Century Aluminum Company (CENX - Free Report) has been selected by the U.S. Department of Energy (“DOE”) Office of Clean Energy Demonstrations to begin award negotiations for up to $500 million in Bipartisan Infrastructure Law and Inflation Reduction Act funding to build a new aluminum smelter as part of the Industrial Demonstrations Program (IDP).

Century's Green Aluminum Smelter Project is among the 33 projects in more than 20 states to get funding to demonstrate commercial-scale decarbonization solutions needed to transition energy-intensive industries to net-zero emissions while strengthening local economies, creating and retaining high-quality jobs and lowering greenhouse gases.

Century intends to use this fund to build the first new primary aluminum smelter in the United States in 45 years. When completed, the smelter would be twice as large as the current major aluminum industry in the United States.

This historic investment provides a significant capital boost to the U.S. primary aluminum industry. The Project aims to bolster domestic supply chains for components crucial to the green energy transition, such as electric vehicles, renewable energy production and storage, building and construction and sustainable packaging.

Per CENX, the Project embodies a wide range of goals and aspirations shared by all of its stakeholders, including providing a tremendous win for the domestic, primary aluminum industry and the broader U.S. economy, boosting domestic supply chains of critical materials, protecting the company's national security interests and creating a more sustainable future for generations to come.

Century plans to construct this new smelter in the Ohio/Mississippi River Basins. This project is estimated to provide more than 1,000 full-time jobs represented by United Steelworkers and more than 5,500 construction jobs. CENX intends to work with job training organizations and local technical colleges to recruit and train employees in the neighborhood surrounding the smelter.

Shares of Century Aluminum have gained 53.2% over the past year compared with a 24.4% rise of its industry.

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The company, on its fourth-quarter call, said that it anticipates first-quarter adjusted EBITDA of $5-$15 million, factoring in decreased raw material prices offset by lower value-added product premiums.

Zacks Rank & Key Picks

Century Aluminum currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the basic materials space include Denison Mines Corp. (DNN - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and Hawkins, Inc. (HWKN - Free Report) .

Denison Mines carries a Zacks Rank #1 (Strong Buy). It beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 300%. The company’s shares have soared 91.1% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Carpenter Technology currently carries a Zacks Rank #1. CRS beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 12.2%. The company’s shares have soared 66.9% in the past year.

The Zacks Consensus Estimate for Hawkins’ current fiscal year earnings is pegged at $3.61 per share, indicating a year-over-year rise of 26.2%. The Zacks Consensus Estimate for HWKN’s current-year earnings has been revised 4.3% upward in the past 30 days. HWKN, a Zacks Rank #2 (Buy) stock, beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 30.6%. The company’s shares have rallied roughly 78.5% in the past year.


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