Pittsburgh-based American Specialty Alloys announced plans Monday to build a $1.2 billion aluminum mill somewhere in the southeastern United States.

The company said the proposed mill will serve the auto industry’s growing demand for lighter vehicles that can meet stringent federal standards for fuel economy. American Specialty Alloys did not disclose the proposed location for the plant, which would be able to supply more than 600,000 tons of aluminum to the auto industry.

“We are building a modern mill and using a process that will change aluminum production forever in this industry,” said Roger Boggs, founder and chief executive officer of American Specialty Alloys.

The mill will take advantage of automation and the low-cost power available in the South to make the higher-grade aluminum needed to meet the federal Corporate Average Fuel Economy-compliant automobiles of the future, Boggs said. The CAFE standard will rise to 54.5 miles per gallon by 2025.

Automakers are increasingly substituting stronger grades of aluminum instead of steel in a process known as “light weighting” vehicles, Boggs said. The shift will create “unprecedented demand” for these grades of aluminum, and that demand is what prompted ASA’s plans for the new mill.

By using this type of aluminum in the F-150 pickup truck, Ford was able to cut 700 pounds out of its 2015 F-150 pickup. The design increased fuel efficiency and reduced carbon dioxide emissions. Ford is looking at doing the same for other truck models.

American Specialty Alloys expects to begin operating the new plant in late 2016. The mill will create 2,000 construction-related jobs and between 650 and 850 permanent jobs.