Alumina Limited (ASX: AWC) notes Alcoa Corp's ('Alcoa') quarterly earnings release.
Information on the AWAC joint venture and Alumina Limited plus other market data is attached, along with a copy of the Alcoa 1Q Earnings Presentation. Alumina Limited's CEO, Mike Ferraro, said 'The global markets for alumina remained tight in the first quarter of 2023 leading to an increase in alumina prices, with the price peaking at $371/t in February 2023. Despite AWAC's ongoing operational challenges and input cost pressures, the higher alumina price contributed to an earnings improvement in 1Q2023 compared to 4Q2022.
Alcoa continues to progress mine plan approvals in WA. The process has involved consultations with relevant regulators, provision of additional information and proposed enhancements to environmental controls. As previously announced, AWAC is reducing bauxite grades at the Huntly mine in WA in order to extend the ore supply available under existing approvals. Given the additional time being taken in obtaining relevant approvals, the impact of lower bauxite quality is now expected to continue into 2024. 'In response to the natural gas supply disruption in WA a digester was taken offline at the Kwinana refinery during 1Q2023. Although the gas supply situation has largely been resolved, the digester remains offline due to the bauxite grade issues.
Accordingly, alumina production guidance for AWAC in 2023 is revised to approximately 10.3 million tonnes from 10.5 to 10.7 million tonnes. 'Despite these near-term challenges, the longer-term outlook for the alumina market is positive, with the anticipated growth in aluminium metal consumption driven by de-carbonisation. AWAC's portfolio of bauxite and refinery assets provides Alumina Limited with a unique position to benefit from this growth.' This ASX announcement was approved and authorised for release by Mike Ferraro, Chief Executive Officer.
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About AWAC & Alcoa's Earnings Release
Alumina Limited owns 40% of each of the AWAC entities, which form a part of the Alcoa bauxite & alumina business segments. The Alcoa aluminium business segment includes the AWAC Portland smelting operations. Any closed operations are included in Transformation & legacy pension/OPEB. Therefore, the AWAC results cannot be directly inferred from the Alcoa earnings release. Further, unlike Alumina Limited, Alcoa reports under US GAAP.
Forward-looking statements
This document may contain certain forward-looking statements, including forwardlooking statements within the meaning of the US Private Securities Litigation Reform Act of 1995. The words 'anticipate', 'aim', 'believe', 'expect', 'project', 'estimate', 'forecast', 'intend', 'likely', 'should', 'could', 'will', 'may', 'target', 'plan' and other similar expressions (including indications of 'objectives') are intended to identify forward-looking statements. Indications of, and guidance on, future financial position and performance and distributions, and statements regarding Alumina Limited's future developments and the market outlook, are also forward-looking statements. Any forward-looking statements contained in this document are not guarantees of future performance. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Alumina Limited and its directors, officers, employees and agents that may cause actual results to differ materially from those expressed or implied in such statements. Those risks, uncertainties and other factors include (without limitation): (a) material adverse changes in global economic conditions, alumina or aluminium industry conditions or the markets served by AWAC; (b) changes in production or development costs, production levels or sales agreements; (c) changes in laws, regulations or policies; (d) changes in alumina or aluminium prices or currency exchange rates; (e) Alumina Limited does not hold a majority interest in AWAC and decisions made by majority vote may not be in the best interests of Alumina Limited and (f) the other risk factors summarised in Alumina Limited's Annual Report 2022. Readers should not place undue reliance on forward-looking statements. Except as required by law, Alumina Limited disclaims any responsibility to update or revise any forward-looking statements to reflect any new information or any change in the events, conditions or circumstances on which a statement is based or to which it relates
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