The Magnitude 7 Metals aluminium plant near the banks of the Mississippi is eerily quiet these days, its electrolysis cells dark and devoid of people, its once white-hot smelters cold to the touch.
“It breaks my heart, ‘cos I’ve seen it in all its glory,” said Greg Lester, the facility’s manager, gesturing upwards to its cavernous vaults.
The plant, a short drive from New Madrid in the economically depressed Missouri Bootheel, symbolises the decline of US heavy industry. It is a slump that President Donald Trump is determined to arrest and reverse.
His instrument of choice is tariffs. Last month, he announced he was increasing levies on aluminium from 10 per cent to 25 per cent, saying imports of the metal were threatening to impair US national security.
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Trump’s economic nationalism has a clear goal. By addressing trade imbalances, he wants to resuscitate moribund domestic industries, reshore jobs and lessen American dependence on imports of critical metals.
But it will take more than that to restore the fortunes of Magnitude 7, or Mag7 as it is known. The downturn in the US industry is being driven above all by high energy costs. And they show no sign of abating.
“Unless I have power at a fair price I can’t restart the facility,” said Lester.
Production at Mag7 was curtailed in January last year, when the Mississippi River froze over, disrupting the supply of critical raw materials to the plant. But high energy prices were already taking their toll, making it ever harder for the plant to turn a profit.
In the months since its closure, Mag7’s owners have been searching for a way to bring it back online — without success.
The lack of affordable electricity has affected other producers, too. Century Aluminum announced in 2022 it was idling its smelter in Hawesville, Kentucky, citing “skyrocketing” energy costs. Alcoa closed down its Intalco smelter in Washington in 2023 for similar reasons.
“For aluminium, everything comes down to electricity,” said Annie Sartor of Industrious Labs, a non-profit focused on the decarbonisation of heavy industry. “There’s a phrase that aluminium is electricity in solid form.”
New Madrid is no exception. “This smelter uses more electricity in 24 hours than the whole city of Springfield, Missouri,” said Lester.
That is why the recent rise in power prices has been so painful for producers. The average cost of electricity for US smelters is expected to rise to $36 per megawatt hour in 2025, up from $33/MWh in 2024, according to CRU Group, a commodity data company.
An industry veteran, Lester has had a ringside seat at the decline of American aluminium. When he started out, the US had 34 smelters — now it has four. It produced 30 per cent of the world’s aluminium in 1980 — now it accounts for just 1 per cent.
“China annihilated us,” said one seasoned industry executive. “As one guy used to say to me, if you make something China needs, you’re going to be wealthy. If you makes something China makes, you’re fucked.”
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New Madrid’s history reflects the vicissitudes of the whole sector. It was built in 1971 by Noranda Aluminum and employed 1,100 local people, becoming a linchpin of the local economy.
“I could take you down every street in New Madrid and point to a house where an employee of Noranda worked,” said Nick White, the town’s mayor.
But the company went bankrupt in 2016 citing the declining price of aluminium, which fell 2.1 per cent on the London Metal Exchange between 2010 and 2023, as well as high electricity prices and labour costs. “That sent shockwaves throughout the region,” said White.
In the ensuing months, dozens of families moved away in search of work. “Every other week you’d see a trailer loaded up with furniture driving off,” said Charles White, a pensioner who worked at the smelter for 40 years.
A glimmer of hope came in 2016 when a holding company called Otto von Blue, owned by three Americans led by former Glencore trader Matt Lucke, bought the plant out of bankruptcy for $14mn in a court-approved auction.
Its prospects then brightened further in 2018, when Trump first imposed a 10 per cent tariff on imported aluminium, protecting it from foreign competition. The smelter came back online, becoming a poster child for the success of Trump’s tariff policy.
But the optimism proved shortlived. Mag7 closed its doors in January 2024, citing force majeure over the frozen Mississippi, and all its 400 or so workers were laid off.
“It’s like déjà vu,” said Aaron Griffin, New Madrid’s city administrator.
The closure was a big setback for New Madrid County, a largely agricultural area with some of the lowest median household incomes in Missouri. Officials say the local school system lost $1.3mn in tax revenue.
But the mood swung back to optimism when Trump, freshly reinstalled in the White House, launched his new tariff blitz. Shares in Alcoa and Century Aluminum surged when he raised tariffs to 25 per cent.
“It does create a buzz, an atmosphere of go, go, go,” said Lester. He said there was now a “lot more interest” in the New Madrid plant from potential buyers.
The tariffs, said Griffin, “are definitely worth a shot”. “They’ll create more of a level playing field,” he said.
But others fear it is too little, too late. “If the smelter had still been up and running when the tariffs were announced, they would have helped immediately,” said Nick White. “By the time you put out bids to uplift it, you’re talking a year at the minimum, if not longer.”
Trump, he added, would be president for less than four years, and what would happen if his successor was “less focused on this particular issue” than he was? he asked.
“Tariffs are hard to bet on,” said Sartor. “Aluminium companies think decades out, and these tariffs could be in place for six years or just a few months.”
Locals also worry about the state of the plant, which is beginning to show its age.
“It was in good shape in 1979 when I was hired in,” said Charles White, the retired worker. “But now it’s wore out.”
But the biggest challenge for any potential acquirer is to negotiate a fair power price. A local utility, Associated Electric Cooperative (AECI), has a 1,200MW coal-fired plant just next to the smelter. But people close to Mag7 say AECI has told it it has no power available this year or next for the smelter. Other customers such as data centres and crypto miners can pay much more.
Experts say the future of the US aluminium industry remains unclear. “Are tariffs the tool that will address the fundamental challenge of the primary aluminium industry, which is access to affordable electricity?” asked Sartor.
“I’m not certain they are.”
