Reviving Venezuela's idle aluminium industry will require up to US$2.3B, says Wood Mackenzie

Venezuela's underperforming aluminium industry would require a significant US$1.6-$2.3 billion investment to restore production capacity and be a key source in addressing the region's deficit, but significant challenges remain, according to a recent report from Wood Mackenzie.

According to the report "Beyond oil: what would it take to revive Venezuela's aluminium industry," Venezuela's aluminium output has collapsed from a peak capacity of over 600,000 tonnes per annum to essentially zero production in 2025, representing a significant lost supply source for the Americas market at a time when the US primary aluminium structural deficit exceeded 5 million tonnes in 2025.

The analysis comes amid renewed attention on Venezuela following recent US policy shifts toward the country.

The report highlights that despite its current state, the industry remains vertically integrated—from bauxite mining through alumina refining to primary metal smelting—with plenty of potential.

"Unlike some frontier jurisdictions, Venezuela is not starting from zero when it comes to aluminium," said Uday Patel, principal analyst at Wood Mackenzie. "It already produces — or at least has produced — at an industrial scale. The country has long mined bauxite and once ran a sizeable aluminium value chain, from alumina refining to metal smelting, powered by hydroelectric plants in the Guayana region. Downstream, Sural was once a major producer of EC wire rod exporting significant volumes across North America and Europe."

Venezuela has world-class bauxite with over 300 Mt proved reserves and up to 5,000 Mt inferred, comparable to major global producers.

Investment required

Significant investment would be needed across mining, refining and smelting operations to restore production capacity. Both major smelters of Alcasa and Venalum have largely been idle since a 2019 nationwide blackout. The report notes that only Venalum would be worth restarting, due to the condition of Alcasa.

• Los Pijiguaos bauxite mine: US$100-200M to repair/excavate infrastructure, rebuild processing and haulage systems, operate at 2 Mtpa
• Interalumina refinery: US$500-600M to rehabilitate digestion, clarification, precipitation and calcination systems; upgrade utilities and environmental controls for 1 Mtpa capacity
• Venalum smelter: US$1-1.5B to reline cells, rehabilitate power systems, anode production, infrastructure and environmental enhancements for 460 ktpa capacity
• Additional needs: Capital for robust electricity supply system and revamped transport infrastructure

However, significant challenges remain beyond investment, Patel said.

The industry faces challenges including chronic power instability, most notably from the Guri hydroelectric complex, security concerns and aging equipment. Companies would need minimum investment guarantees, including potential tariff-free access to the US market, to justify investments in a high-risk environment.

"While reviving Venezuela's aluminium sector presents significant opportunities, it also comes with major challenges," Patel said. "In the end, it will come down to a trade-off between political and strategic expediency and economics. However, if conditions are met, it could take only two-to-three years to fully reestablish the aluminium value chain."