Lachlan Shaw

Lachlan Shaw asked about the expected reaction of the Midwest Premium if a preferential rate is agreed for the Section 232 Canada tariff case. He also inquired about Alcoa's growth strategy, specifically the attractiveness of restarting, buying, or building (greenfield/brownfield) in aluminum, alumina, and bauxite given tightening market conditions.

Answer

William Oplinger, President and CEO, theorized that the Midwest Premium should not fall with a preferential Canada tariff, as the marginal ton still needs to be incentivized from outside North America. He stated Alcoa has no greenfield expansion plans for aluminum, refining, or bauxite due to high capital and energy costs, but noted brownfield opportunities exist across all three segments.

Lachlan Shaw asked about the potential reaction of the Midwest Premium if a preferential tariff rate is agreed for Canadian aluminum and Alcoa's strategy for growth (restarting, buying, or building) given the tightening aluminum market outlook.

Answer

William Oplinger, Alcoa Corporation President and Chief Executive Officer, theorized that the Midwest Premium should not fall with a preferential Canadian tariff, as the marginal ton would still need to be incentivized from outside North America. He stated Alcoa has no greenfield expansion plans for aluminum due to insufficient low energy prices for returns, and similar challenges exist for refining and bauxite. He noted brownfield opportunities exist across segments but no significant greenfield plans.

Lachlan Shaw asked for Alcoa's perspective on the Western Australia mine approval process, including potential conditions and scenarios, given a peer's recent experience and stricter environmental standards.

Answer

CEO William Oplinger expressed confidence in the process, targeting approval by early 2026. CFO Molly Beerman added that Alcoa had proactively adopted many of the stricter mining conditions last year, putting them in a strong position. She also highlighted Alcoa's different cost profile due to using natural gas, which mitigates some carbon-related cost pressures faced by peers.

Asked about the timeline for resolving port issues at RG Tanna, the company's preparedness for heavy rainfall and cyclones, and the potential for significant cost reduction in FY24.

Answer

The company stated the mid-2024 port resolution timeline is conservative and alternatives are being explored. They are well-prepared for wet weather with improved infrastructure and planning. They believe costs can definitely fall below $100/tonne in FY24, with the low-$90s being possible, driven by operational normalization and specific cost-out initiatives.