Century Aluminum (CENX 2.04%) stock has been on fire. Shares of the largest producer of primary aluminum in the U.S. have soared by about 50% in the past month. That includes a gain of about 16% this week, according to data provided by S&P Global Market Intelligence.
The stock has moved higher as the company implements plans to grow with the help of manufacturing credits from the Inflation Reduction Act. This week's jump came after the company announced it was selected by the U.S. Department of Energy for up to $500 million to support a project to build a new low-emission aluminum smelter.
Green aluminum project
The funding would support the building of the first new primary aluminum smelter built in the U.S. in 45 years. It aims to help decarbonize a critical, but energy-intensive, industry. The company said that upon completion, it would double the current capacity of the domestic primary aluminum industry.
Century is reportedly focusing on northeastern Kentucky as the preferred location for the project. Kentucky Gov. Andy Beshear said the project could become the largest investment ever for eastern Kentucky. He called the $500 million DOE credit "the first important step."
The project would create more than 1,000 full-time jobs, and create additional domestic supply for the electric vehicle, renewable energy production, construction, and packaging industries.
Century reported a net loss in 2023 as shipment volumes decreased by 9%. But investors are hoping its modernization plans aided by the government credits could turn the business around. The sharp rise in the share price is a sign they have confidence that turnaround is underway.
