Shares of Alcoa (NYSE:AA) rose 4% on Tuesday after the company revealed plans to market 10 closed or curtailed sites to the data centre sector.
At the BMO Global Metals, Mining and Critical Minerals Conference in Florida, Chief Executive Officer Bill Oplinger told attendees the company is aiming to complete the first sale by the end of June. He added that two further sales might follow shortly after that initial transaction.
The strategy reflects a shift in how some aluminium producers are thinking about surplus or idled real estate. As data centres expand, they have become significant competitors for the electricity that aluminium smelters rely on for energy-intensive operations. At the same time, the demand for data centre capacity has opened up prospects for firms holding sites near plentiful power supplies to monetize those locations.
Oplinger said Alcoa is assessing the implications of the rise of artificial intelligence and growing data centre footprints on the valuation of its assets. The company has, historically, approached property divestments with an emphasis on extracting maximum value while minimizing ongoing liabilities.
For Alcoa, selling sites to the data centre industry represents a way to convert otherwise idle facilities into cash-generating outcomes. Management’s timetable calls for an initial closing before the end of June, followed by the possibility of two additional deals soon after.
Market reaction to the announcement was immediate, with the company’s stock advancing intraday. The move highlights the intersection of heavy industry and digital infrastructure, where shifts in electricity demand and asset use can change how companies manage their real estate portfolios.
Summary
Alcoa plans to divest 10 closed or curtailed sites to data centre operators, targeting a first sale by the end of June and potentially two more in short order. CEO Bill Oplinger made the disclosure at the BMO Global Metals, Mining and Critical Minerals Conference in Florida, and the news corresponded with a 4% rise in Alcoa shares.
Key points
- Alcoa disclosed plans to sell 10 closed or curtailed sites to the data centre industry.
- The company expects to complete the first sale by the end of June, with two additional sales possibly following soon after.
- These transactions reflect pressure on aluminium producers for electricity from data centres and the opportunity to monetize sites located near abundant power supplies.
Risks and uncertainties
- Timing risk - the company has set a target to close the first sale by the end of June, but the actual completion timing is uncertain.
- Valuation uncertainty - Alcoa is evaluating how the rise of AI and data centre demand affects asset valuations, indicating potential variability in sale proceeds.
- Market dynamics - competition between data centres and aluminium smelters for electricity supplies could influence the attractiveness of sites and transaction outcomes.