Steel Dynamics, Inc. will construct and operate a 650,000-tonne low-carbon, recycled aluminum flat rolled mill, with two supporting satellite recycled aluminum slab centres. The investment is estimated to be $2.2 billion for the three facilities, and commercial production is planned to begin in the first quarter of 2025. The aluminum flat-rolled mill will utilize a significant amount of aluminum scrap, and as such is also a complementary extension of the company's metals recycling platform. The company estimates the project will generate between $650 million and $700 million of annual EBITDA on a through-cycle basis. The project will be funded with available cash and cash flow from operations, and the company plans to maintain its policy of strong shareholder distributions and investment grade credit ratings.
The North American flat-rolled aluminum industry has a substantial and growing supply deficit estimated at over 2.0 million tonnes, based largely on increasing demand from the automotive and sustainable beverage can industries. The lack of aluminum flat rolled availability has impacted automotive producers' ability to secure supply. The supply deficit is currently being addressed through imports of higher-cost aluminum flat-rolled products, which exceeded 25 percent of North American consumption in 2021.
The planned $1.9 billion aluminum flat-rolled mill will be located in the Southeastern United States, with an annual production capacity of 650,000 tonnes of finished products, serving the sustainable beverage packaging, automotive, and common alloy industrial sectors. The product offering will be supported by various value-added finishing lines, including CASH (continuous annealing solutions heat treating) lines, continuous coating, and various slitting and packaging operations. The rolling mill is currently expected to begin operations in the first quarter 2025. The company's focus on decarbonization will also be applied to this aluminum operation, including plans to use a significant amount of pre- and post-consumer aluminum scrap in its production process, supported by the company's metals recycling platform. The company will own over 94 percent of the rolling mill facility through a joint venture arrangement with Unity Aluminum, Inc.
At full capacity, the aluminum rolling mill will require approximately 900,000 tonnes of annual aluminum slab supply. The rolling mill is expected to have the capacity to supply approximately 50 percent of its recycled aluminum slab requirements on site, with the remaining amount to be provided by the construction and operation of two additional satellite recycled aluminum slab centres, one to be located in the Southwestern United States and the other in Northcentral Mexico. The satellite slab centres will benefit from abundant regional aluminum scrap supply and cost-effective operations. The two facilities are expected to cost approximately $350 million in aggregate, with the Mexico facility expected to begin operations in 2024 and the U.S. facility by the end of 2025. The company will own 100 percent of the satellite facilities.
Steel Dynamics believes this strategic growth investment is differentiated and supported by the following key advantages:
During Sinton's construction from 2019 through 2021, the company improved its credit profile, while funding the $2.0 billion steel mill through free cash flow, and increasing its cash dividend by 39 percent and purchasing $1.5 billion, or 14 percent, of its common stock.
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