Chris LaFemina

Chris LaFemina questioned whether Warrior would consider using its balance sheet capacity, including debt, for share buybacks in a significantly lower price environment, leveraging its low-cost producer status to weather market downturns.

Answer

Dale Boyles (CFO, Warrior) acknowledged that if prices were to decrease significantly, having cash on the balance sheet would present a real opportunity to take advantage of a buyback, indicating a willingness to consider such a strategy.

Chris LaFemina questioned whether Warrior would consider utilizing its balance sheet, potentially through debt, for share buybacks in a scenario where coal prices were significantly lower, leveraging its net cash position and low-cost producer status.

Answer

CFO Dale Boyles responded that if prices were to decrease significantly, having cash on the balance sheet would present a real opportunity for the company to take advantage of a buyback program.

Chris LaFemina questioned the progression of Core Natural Resources' unit costs, noting that 2026 guidance appears in line with the first half of 2025 despite significant synergies and 45X tax credits. He sought clarification on where these synergies are reflected in the P&L and why larger cost reductions aren't evident. He also asked if unit costs are expected to be lower in the first half of 2027 compared to 2026, indicating whether benefits will increase over time or flatline. Finally, he inquired about the high-volume metallurgical coal market dynamics with Leer South ramping up, the dislocation from the premium market, and expectations for spread changes.

Answer

Mitesh Thakkar, President and CFO, explained that synergies are visible in SG&A (40% improvement from headcount reductions) and marketing/logistics (over $10 uplift in by-product credits, though market downturns partially offset this). He noted that IT system integration is ongoing, expecting better performance in the second half of 2026, and acknowledged inflation and tariffs as offsetting factors. Jimmy Brock, Chairman and CEO, emphasized a laser focus on unit costs now that all assets are fully operational, expecting steady improvements quarter-over-quarter and lower unit costs from Leer's new district. Bob Braithwaite, Senior Vice President of Marketing and Sales, stated that 6.7 million metallurgical tons are contracted, with additional appetite from Asian markets and active negotiations for significant volumes, anticipating most remaining high-vol tons to go to Asia. Deck Slone, Senior Vice President of Strategy and Public Policy, highlighted the historical $10 spread between PLV and HVA, now significantly wider, and expects it to shrink as the market normalizes, citing production declines in Australia and the U.S. in 2025 as counterbalances to new capacity.

Chris LaFemina questioned the progression of unit costs, noting that 2026 guidance is in line with early 2025 despite significant synergies and 45X tax credits. He asked where synergies are reflected in the P&L and why larger cost reductions aren't evident, and if cost impacts will increase over time. He also inquired about the high-volume market dynamics with Leer South ramping up, the dislocation from the premium market, and expectations for spread changes.

Answer

Mitesh Thakkar, President and CFO, explained that synergies are visible in SG&A (40% improvement), marketing/logistics (by-product credits uplift), and finance, with some offsets from inflation and tariffs. He anticipates second-half 2026 to show better results as IT systems integrate. Jimmy Brock, Chairman and CEO, emphasized a laser focus on unit cost improvement now that all assets are fully operational, expecting steady cost improvements quarter-by-quarter. Bob Braithwaite, Senior Vice President of Marketing and Sales, discussed the 6.7 million contracted metallurgical tons, including PLV linkage, and noted increased appetite in Asian markets and potential domestic opportunities. Deck Slone, Senior Vice President of Strategy and Public Policy, provided historical context on the PLV-HVA spread, noting its significant current dislocation, and expressed expectations for market normalization due to rebalancing factors like reduced Australian and U.S. exports.

Chris LaFemina inquired about the new Indonesian gold tax policies, their potential impact on production costs, and whether the Kuchko Liar project's development timeline or capital costs would be affected by the GBC incident learnings.

Answer

Kathleen Quirk (President and CEO) stated that Freeport-McMoRan has stabilized royalty terms within its IUPK license and that most gold is sold domestically to a subsidiary of Mine ID, mitigating the impact of new export taxes. Mark Johnson (President and COO, Freeport-McMoRan Indonesia) confirmed that Kuchko Liar is unaffected, being a deeper mine with different risks, and will incorporate GBC learnings to enhance robustness without changing its timeline or capital.

Chris LaFemina from Jefferies asked about the new Indonesian gold tax policies and their potential impact on production costs in Indonesia. He also sought clarification on whether the Kuchko Liar project would be affected by new risk mitigation factors, potentially leading to a longer development timeline or increased capital costs.

Answer

Kathleen Quirk, President and CEO, stated that Freeport-McMoRan's IUPK license stabilizes royalties, and with most gold sold domestically to a Mine ID subsidiary via the new precious metals refinery, the impact of new gold tax policies is mitigated. Mark Johnson, President and COO of Freeport-McMoRan Indonesia, confirmed that the Kuchko Liar project remains unaffected by the GBC incident, with existing risks like ground support and seismicity being managed, and new learnings from GBC will enhance its robustness and design application.

Chris LaFemina of Jefferies Financial Group questioned the potential demand impact of the significant spike in U.S. COMEX copper prices, particularly on downstream industries.

Answer

President & CEO Kathleen Quirk acknowledged short-term customer caution but emphasized that strong secular trends in AI and energy infrastructure support long-term demand. Chairman Richard Adkerson added that the price spike was influenced by pre-tariff inventory building and that copper is fundamentally difficult to substitute. He also noted the uncertainty around how tariffs will be applied to downstream products and the role of scrap supply.

Chris LaFemina of Jefferies Financial Group asked about the demand implications of the significant spike in U.S. copper prices, questioning if it could negatively affect consumption.

Answer

President & CEO Kathleen Quirk acknowledged potential short-term customer hesitation but stressed that long-term secular demand drivers like AI and energy infrastructure remain robust. Chairman Richard Adkerson added that the price move was driven by pre-tariff stockpiling and that copper is difficult to substitute. EVP & Chief Administrative Officer Stephen Higgins noted the impact depends on how tariffs are applied to downstream products.

Chris LaFemina asked about Alcoa's capital allocation strategy as the company approaches its net debt target, inquiring about potential for more aggressive capital returns in 2026 and M&A opportunities across the supply chain (bauxite, alumina, or downstream).

Answer

Molly Beerman, CFO, stated that Alcoa is $135 million away from the top of its adjusted net debt target of $1.5 billion, prioritizing debt repayment (2027 and 2028 notes) before evaluating additional stockholder returns and growth options. William Oplinger, CEO, confirmed Alcoa's M&A capability, citing the Alumina Limited transaction, and indicated the company would look for opportunities across the entire product line that create significant synergies, without a current focus on any particular segment.

Chris LaFemina asked about Alcoa's capital allocation strategy as it approaches its net debt target, inquiring about potential for more aggressive capital returns in 2026 and the company's perspective on M&A opportunities across the supply chain (bauxite, alumina, or downstream).

Answer

Molly Beerman, CFO, stated that Alcoa is prioritizing debt repayment, specifically targeting remaining 2027 and 2028 notes, and will evaluate additional stockholder returns in parallel with growth options. William Oplinger, CEO, confirmed Alcoa's capability in M&A, citing the Alumina Limited and Modern transactions, and indicated a willingness to explore opportunities across the product line that offer significant synergies.

Chris LaFemina questioned whether the tariffs are ultimately a net neutral event for Alcoa over time and asked about the balance sheet treatment of the resolved Australian tax dispute.

Answer

President, CEO & Director William Oplinger acknowledged that while the financial impact on Alcoa could be neutral if the Midwest premium adjusts accordingly, the high prices negatively affect U.S. customers. EVP & CFO Molly Beerman added that contract commitments limit flexibility and confirmed the Australian tax liability was fully reserved on the balance sheet.

Chris LaFemina from Jefferies Financial Group followed up on the Anglo American deal, asking whether discussions were ongoing or at an impasse. He also questioned if a contingent payment structure could resolve the disagreement over Moranbah North and confirmed whether the associated BOOMA transaction would also terminate if the deal goes to arbitration.

Answer

President and CEO Jim Grech confirmed that while respectful discussions have occurred, the two companies have a "fundamental disagreement" over the status of the mine and the financial impact of the incident. He declined to discuss potential deal structures on the call but affirmed that if Peabody terminates the agreement, the BOOMA transaction would terminate as well.

Chris LaFemina from Jefferies Financial Group followed up on the Anglo American deal, asking whether discussions were ongoing or at an impasse. He also explored the possibility of a contingent payment structure for the Moranbah North asset as a potential solution and questioned if the associated BOOMA transaction would terminate if the deal goes to arbitration.

Answer

President and CEO Jim Grech described the discussions with Anglo American as candid and respectful but acknowledged a "fundamental disagreement" over the status of the Moranbah North mine and the financial impact of the incident. He declined to discuss potential negotiation terms on the call. Mr. Grech confirmed that if Peabody terminates the purchase agreement, the related transaction with BOOMA would also terminate concurrently.

Chris LaFemina from Jefferies Financial Group inquired about the status of discussions with Anglo American, asking if they have reached an impasse. He also explored the possibility of a compromise, such as contingent payments for Moranbah North, and asked if the associated BOOMA transaction would terminate if the deal goes to arbitration.

Answer

President and CEO Jim Grech acknowledged candid discussions with Anglo but stated there is a "fundamental disagreement" over the impact and existence of a MAC. He declined to discuss potential negotiations on the call. Mr. Grech confirmed that if Peabody terminates the agreement with Anglo, the back-to-back deal with BOOMA also terminates.

Chris LaFemina from Jefferies Financial Group asked for an update on the status of discussions with Anglo American regarding the asset acquisition, questioning if they had reached an impasse. He also explored the possibility of a contingent payment structure for the Moranbah North asset and asked if the BOOMA transaction would terminate if the deal goes to arbitration.

Answer

President and CEO Jim Grech described the discussions with Anglo as candid but acknowledged a "fundamental disagreement" over the impact and status of the Moranbah North mine. He declined to discuss potential deal structures on the call. Grech confirmed that if Peabody terminates the agreement, the related BOOMA transaction would also terminate.

Chris LaFemina of Jefferies Financial Group questioned why the incremental capital for the QB TMF was classified as sustaining rather than project CapEx, and also asked about insurance coverage for the damaged ship loader.

Answer

EVP & CFO Crystal Prystai explained that since the operation is now producing copper, related costs are considered sustaining, and the incremental TMF cost is higher than initially planned for these activities. EVP & Chief Commercial Officer Ian Anderson confirmed that Teck has insurance coverage, including for business interruption, and is investigating the root cause to determine next steps.

Chris LaFemina of Jefferies Financial Group questioned the decision to classify the incremental QB tailings facility CapEx as sustaining rather than project capital. He also asked about insurance coverage for the QB ship loader incident.

Answer

EVP & CFO Crystal Prystai explained that since the operation is running and producing copper, these costs are no longer considered growth capital and are more significant than initially expected for sustaining operations. EVP & Chief Commercial Officer Ian Anderson confirmed that Teck has insurance coverage, including for business interruption, and is investigating the root cause to determine next steps.

Chris LaFemina of Jefferies Financial Group questioned why the incremental CapEx for the QB TMF was classified as sustaining rather than project capital. He also asked if there was insurance coverage for the damaged ship loader.

Answer

EVP & CFO Crystal Prystai explained the TMF costs are sustaining because the operation is commercially producing, and the expenses relate to ongoing operational activities, not initial construction. EVP & CCO Ian Anderson confirmed that Teck has insurance coverage, including business interruption, for the ship loader and is investigating the root cause to determine next steps.

Chris LaFemina of Jefferies Financial Group questioned the rationale for classifying the additional QB tailings facility (TMF) costs as sustaining capital instead of project capital. He also asked if there is insurance coverage for the damaged ship loader.

Answer

EVP & CFO Crystal Prystai explained that since the operation is now producing copper, ongoing costs like the TMF work are considered sustaining, even though the specific amount for mechanical sand movement was higher than expected. EVP & Chief Commercial Officer Ian Anderson confirmed that Teck has insurance coverage, including for business interruption, related to the ship loader and is investigating the root cause.

Chris LaFemina of Jefferies Financial Group questioned why the incremental capital for the QB tailings facility is classified as sustaining rather than project CapEx, given it's for ramping up to full capacity. He also asked about insurance coverage for the ship loader damage.

Answer

EVP & CFO Crystal Prystai explained that since the operation is now producing copper, these costs are considered sustaining. While some TMF spending was always planned, the current work involves moving significantly more sand than anticipated, increasing the cost. EVP & Chief Commercial Officer Ian Anderson confirmed that Teck has insurance coverage, including for business interruption, and is investigating the root cause to determine the next steps.

Chris LaFemina questioned how Nucor differentiates between demand pull-forward and underlying demand amid stockpiling in the steel market.

Answer

CEO Leon Topalian detailed factors considered, including fabricator behavior, distribution inventory, and customer interactions.

Chris LaFemina from Jefferies asked about the role of the DOJ monitors and their potential impact on the marketing business. He also sought to understand the strategic rationale for pursuing a coal business demerger only if combined with Teck's assets, rather than as a standalone entity.

Answer

CEO Gary Nagle described the DOJ monitors' role as assessing the compliance program, which he views as a positive for strengthening it, and anticipates no negative impact on the marketing business. On the coal strategy, Nagle explained that combining with Teck's assets creates a larger, more diverse, and more valuable entity that would command a better valuation in a spin-off compared to Glencore's coal business alone, thus creating more shareholder value.