Century Aluminum, the majority owner of Jamalco, posted strong earnings but warned that rising raw material costs tied to Middle East hostilities and declining bauxite grades at its Jamaican refinery will weigh on second-quarter results.

Margins are under pressure from the rising cost of energy, coke, pitch, and caustic soda arising from the conflict, stated Chief Financial Officer Peter Trpkovski in the recent earnings call to analysts.

“We also expect to see some Jamalco cost and volume headwinds from lower bauxite quality impacting our overall alumina input costs. Taken together, we see a headwind of US$10 million sequentially,” Trpkovski added about Jamalco, which mines bauxite and refines alumina in Clarendon.