Alcoa at Jefferies Mining and Industrials: Strategic Outlook Amid Market Challenges

On Thursday, 04 September 2025, Alcoa Corp (NYSE:AA) presented at the Jefferies Mining and Industrials Conference 2025, offering a detailed overview of its strategic initiatives and market challenges. Led by CFO Molly Bierman, the discussion addressed operational improvements, tariff impacts, and capital allocation strategies. While Alcoa aims to strengthen its balance sheet and enhance shareholder returns, it also faces hurdles such as tariff disputes and energy cost constraints.

Key Takeaways

• Alcoa is focused on reducing debt and improving shareholder returns, with a net debt target of $1.0 to $1.5 billion.
• The company is actively seeking preferential tariffs for Canadian metal and exploring growth in recycling, especially in Europe.
• Operational improvements are underway, with the Alumar smelter achieving profitability and progress at San Ciprian.
• Potential aluminum supply constraints due to power shortages are anticipated, requiring strategic price responses.

Financial Results

• Net Debt Target: Alcoa aims for a $1.0 to $1.5 billion range, down from $1.7 billion at the end of Q2.
• Debt Structure: Adjusted debt stands at $3.2 billion, including $2.7 billion in gross debt and $0.6 billion in pension obligations.
• Debt Repayment Opportunities: Includes a $75 million term loan due in November, with $140 million and $220 million notes callable in 2027 and 2028, respectively.
• Working Capital: Strong cash generation is expected in the second half, though with variability, as higher metal prices impact accounts receivable.

Operational Updates

• Western Australia Bauxite Mine: Public comments are complete with over 59,000 submissions; EPA recommendations are expected by mid-2026, with full transition by 2029.
• Warwick Smelter: The restart of the fourth line is costly, with tariff and energy costs delaying decisions.
• Alumar Smelter: Now profitable, with the restart nearly complete.
• San Ciprian: The smelter restart is progressing, with full capacity expected in 2026. The refinery faces financial challenges due to energy prices.

Future Outlook

• Aluminum Market: Alcoa anticipates a balanced market, with supply constraints possible due to power shortages. Energy costs are critical for US smelting capacity expansion.
• Tariffs: Efforts continue for preferential rates for Canadian metal, with hopes for progress before the USMC renegotiation in July 2026.
• Western Australia Contingency Plans: Plans are in place for continued mining with current bauxite grades if approvals are delayed.

Q&A Highlights

• Capital Returns: Alcoa maintains a modest dividend and has a $500 million share buyback authorization, with potential for increased returns as debt targets are met.
• Growth Opportunities: The company is exploring mergers, acquisitions, and recycling expansion, particularly to meet automotive industry demand in Europe.

For a more detailed understanding, please refer to the full transcript provided below.

Full transcript - Jefferies Mining and Industrials Conference 2025:

Chris LaFemina, Global Metals and Mining Research team, Jefferies: All right, cool. Right. Hi, everybody. I’m Chris LaFemina from the Global Metals and Mining Research team at Jefferies.

Thanks for attending this fireside chat. It’s Molly Bierman, who’s the CFO at Alcoa. And Molly, thanks for coming. And the way the format here is going to be fireside chat between me and Molly. I think there might be an opportunity at the end to answer some questions in the audience.

But I have plenty of questions that I’ve written down here to ask Molly. So I think it should be a pretty good discussion. So Molly, thanks for coming, first of all. And just of big picture, my first question would be around currency of the alumina and the alumina markets, where you think things are heading, shorter term and then longer term in terms of the outlook. And thank you for coming again.

Molly Bierman, CFO, Alcoa: Thanks for having us, Chris. And thanks to everyone here in the room and joining on the webcast for your interest in Alcoa. We’ve been meeting with investors the last two days, and they have been asking us about the markets, as well as, I guess, we’re going to get to tariffs in Australia, our Spain operations, as well as capital returns. So happy to answer your question, and we will kick off with the markets. So in alumina, we’re seeing the market is in, surplus now.

After the supply disruptions last year, We’ve seen the API price drop, in 2025. At midyear, we had all of the Canadian sorry, all of the Chinese, refineries running and probably about 85 to 90% of them underwater. We did see about seven to 10,000,000 metric tons of capacity come offline in China, and that has stabilized the price. So we’ve been hanging, around $360 to $370 per metric ton for alumina for a while yet. Again, we do expect, the market to stay in surplus.

We expect to see the Indonesian and Chinese projects come online either later this year or next year and to remain in a surplus, for ’26. However, as you know, alumina is always subject to supply disruptions and pricing can change. The product is not storable. So you, we do expect there could be risks as well related to some of the mining, the bauxite mining, revocation of licenses in Guinea that can also put pressure on the alumina price. Do you want to move on to aluminum?

Chris LaFemina, Global Metals and Mining Research team, Jefferies: Please yes.

Molly Bierman, CFO, Alcoa: Okay. I’m going to start on aluminum maybe with Alcoa specific and then I’ll go broader. As we look at the pricing and the demand now for our value add products, are even with the tariff uncertainty, we are seeing solid demand both in North America and Europe, which are our primary, markets. In North America, we have really strong demand for both slab and rod, and that’s coming from the packaging and electrical markets. We do see weakness in foundry.

Even though we’re continuing to get spot orders, it has slowed down a bit. Foundry is going mostly to auto. So lots of uncertainty there. In Europe, really strong on the packaging and rod. In fact, we’re getting more demand than we can fulfill, so we’re sold out there.

Also, we’re seeing a bit of weakness in Europe foundry. As you look in mid midterm, we see aluminum staying in balance with China purchasing metal from the rest of the world, and North America and Europe staying in deficit. But the global market is in balance. On the longer term, we believe that we will have higher demand both for primary and secondary. We believe in those growth trends is going to be needed to meet the decarbonization goals.

We do expect to see some projects come online however they’re needed, and we think they’re going to have to have price response to incentivize those projects to come online.

Chris LaFemina, Global Metals and Mining Research team, Jefferies: Thank you for that. And then you mentioned tariffs, which have been a big swing factor for Alcoa. Can you talk about, just an update on the impact of tariffs and what you’re doing to offset additional associated costs?

Molly Bierman, CFO, Alcoa: So we are continuing our advocacy on tariffs with a primary focus now on getting a preferential rate for the Canadian metal moving into The US. If you think about Alcoa’s configuration, we have two smelters in The US, two of only four running in The US. Of course, The US needs 4,000,000 metric tons of aluminum imports. Almost 3,000,000 metric tons of that are coming from Canada. So really focused on getting a preferential rate for Canada.

We have 960,000 metric tons of production in Canada, but only two ninety, metric tons, thousand metric tons in The US. So Canadian preferred rate will be a great contribution to our financials. So we’ve been working advocacy on both sides of the border, both with the US administration as well as the as the Canadian. If you look at how the Midwest premium has responded, currently at about 71¢ to Alcoa, it’s somewhat neutral because we’re picking up the benefit on our US tons and that is offsetting the impact, the margin compression that we’re seeing on our Canadian tons. So neutral at this pricing level.

Of course, this is not accomplishing what the US administration wants, which is to enrich producers and incentivize us to invest in The US smelting production. So our Alcoa cash flows have really remained neutral at this point, based on the latest Midwest pricing. In fact, it’s challenging some of our investment decisions in Canada now, and we’ve postponed some of the decisions. Our Canadian smelters have traditionally generated substantial amounts of cash. Now they are paying high tariffs, and so we’re holding additional investment there until we see where the tariffs move.

Chris LaFemina, Global Metals and Mining Research team, Jefferies: Can you remind us what portion of your Canadian sales are to The US? Is 70%?

Molly Bierman, CFO, Alcoa: So of the 960,000, historically 70, percent of that moved to The US. Of late though, we’ve been running the netbacks and doing the calculations to see if the Rotterdam premium, and the associated freight costs will give us more favorable margins to send the metal to Europe, or we’ve been keeping more, metal inside Canada and serving Canadian customers. So now if you look at our percentage, it’s probably down to about 63% at this moment because we have been redirecting some of the, Canadian volumes out of The US. A large majority of our Canadian volumes are on annual contracts to The US, so we will not stop sending metal into The US entirely. We’ll absolutely make sure that our our customers have their contracted volumes.

But on the others, we’re running the calculations to see where we have the best margin.

Chris LaFemina, Global Metals and Mining Research team, Jefferies: Makes sense. And speaking of U. S. Exposure, you have the Warwick smelter, which has some amount of capacity. What’s your latest thinking on possibly ramping that up?

Molly Bierman, CFO, Alcoa: Yeah. We have been running the calculations on the Warwick restarts. We have three lines running there with a fourth line. It’s only about 50,000 metric tons. However, that line has not run since 2016.

So it’d be a very expensive restart, maybe looking at up to a $100,000,000 for that restart. We also have long lead times on some of the equipment that we would need, so it would not be a a a fast restart. So you have to look at will the tariff, stay in place the whole time? Will we have a payback for our investment? You know, obviously, any capital, any capacity expansion in The US relies on, economic energy as well.

So we have to solve for that. So I don’t see us making a decision on Warwick, in in the near term.

Chris LaFemina, Global Metals and Mining Research team, Jefferies: Okay.

Molly Bierman, CFO, Alcoa: And I wanna make, just another comment more broadly about tariffs. We are encouraged with the meetings that have been happening recently with the US administration. So secretary Lutnick met with the, minister of trade from Canada, last week with encouraging news coming out of those meetings. They really are focused on the key sectors for Canada, and looking at easing tariff concerns. So aluminum is one of those sectors.

And, but why we’re so advocating for the preferential Canadian, rate, We don’t want to wait all the time until next year when they get to the USMC renegotiation that’s scheduled by July ’26. We’re hoping to get the preferred rate, in advance of that. And at this point, I’d say we’re cautiously optimistic, that that that can happen.

Chris LaFemina, Global Metals and Mining Research team, Jefferies: Okay. So maybe we could, move to the land

Molly Bierman, CFO, Alcoa: down

Chris LaFemina, Global Metals and Mining Research team, Jefferies: under. Western Australia, I mean, getting bauxite mine approvals there is is important for you. Can you tell us as this process progresses what milestones we should look for? I think you said on the second quarter earnings call that timing of operating the new mines at Mara North and Holyoke had slipped back from 2027 to 2028. You have some contingency plans in case that gets extended beyond that.

Can you just remind us what happened there and discuss the risk of getting to the approvals and also what your contingency plans are if So these are delayed

Molly Bierman, CFO, Alcoa: the next milestone, which we’ve actually just, passed was the completion of the public comment period. So we had considerable interest, from the public over 59,000, submissions. Now about 5,000 of those or only 10% were unique. The others were more pro form a where we had many many submissions of the same type, so users signing on to the same, issue that had already been logged. The EPA will summarize those 5,000 unique submissions and provide them to us for response.

So we are preparing now to receive those probably within the next couple weeks. We’ve actually deployed some AI tools so that we can very efficiently take those, questions, apply them against the over 10,000 pages of our mind plan, and generate preliminary, answers, obviously reviewed thoroughly by the team. But we feel like we’re well positioned. We’re going to try to re reply in a very expedited matter manner. On the timeline, so the EPA did tell us, we announced this as second quarter earnings, that it would be unlikely for us to have their recommendation in the ’26 as we had originally hoped.

Recently, they have been able to guide us that they expect that now will be midyear twenty twenty six, so end of the second quarter. So at that point, the EPA would provide their recommendation. There is an appeals process that has to happen as a part of the statutory protocol, and then it would move to the minister of environment for final approval. So Alcoa is fully committed to doing everything within our power to still secure our approvals as early as possible within ’26, but the timeline has has slipped a bit. Bill Oplinger, our CEO, has been in Australia the last two weeks.

He’s been meeting with the authorities in Western Australia. Now he’s over in Canberra, meeting with the regulators there, making sure that we are getting their view that we’re doing absolutely everything possible to secure, the mining license. Sorry, the mining approvals. When we make our move into the new mining region, originally, we had said that we would start at the ’27 to make that transition. We would be working on the transition during 2028.

And then when we got into the new mine area fully in 2029, we would pick up a million metric tons of alumina production. So as we move into the new area, we will have restored bauxite quality. That means a higher alumina content. So you’re basically processing the same amount of bauxite, but you’re able to produce more alumina out of the process. So we’d pick up a million tons of alumina, and we’d also save $15 to $20 per ton of alumina produced because we would be using less caustic soda as well as lower energy costs.

So it’s a big financial advantage for us when we get into the new mine region and complete that move. So all resources are being applied to ensure that we can get there.

Chris LaFemina, Global Metals and Mining Research team, Jefferies: That’s a pretty significant impact actually on the bottom line when you deliver that. And then just back to the point about 5,000 submissions, was that a surprising number of submissions to you? And does that delay the process having to go through these even using AI? Mean, it’s like a pretty complicated

Molly Bierman, CFO, Alcoa: So everything about our, approvals is a little bit more complicated. We actually have two mine plans before the EPA, so that’s complicating things. Not only is our documentation voluminous, the EPA has commissioned their own studies. So they have to review all of that coming in and then the volume of the public response. So that that accumulation is really is what has caused the delay in the original in the original timeline.

If you look at the, number of responses, this is a record number of responses. We’re not necessarily surprised at that. We recognize that we are mining in a sensitive area where there’s a lot of public concern about the Jarrah Forest. Now we have been working and mining in this region for sixty years. We have been rehabilitating, the mine areas as we’ve moved out, as we move beyond them, but lots of lots of public interest that’s understandable.

So we’re going to take our time even though we’ll use our technology tools to assist us, but we will make thorough responses to each of the, inquiries from the public.

Chris LaFemina, Global Metals and Mining Research team, Jefferies: And there’s lots of jobs in these mines and important for the WA economy as well.

Molly Bierman, CFO, Alcoa: Yeah. We employ over 4,000 employees in the region. And it’s a major tax contribution to the region as well as to the country.

Chris LaFemina, Global Metals and Mining Research team, Jefferies: And sorry, the point about that you have two mine plans, is there a separate submission process for each?

Molly Bierman, CFO, Alcoa: It is the two mine So remember, one our current mine plan was referred by the third party. So that’s undergoing review at the same time the mine plan for the new region is being reviewed. The EPA felt that would be more, expeditious for them, and we agree with that. So they’re running the review process for both.

Chris LaFemina, Global Metals and Mining Research team, Jefferies: Okay. Thank you for that. That’s really helpful. Good luck with that. On to cash and capital allocation.

You had a pretty big working capital release in the second quarter. So free cash flow is notably strong. Can you talk about capital allocation approach and how we should expect you to deploy cash flow going forward? And maybe talk about working capital moves going forward as well.

Molly Bierman, CFO, Alcoa: Okay. So we are still focused on further strengthening of the balance sheet and getting to our new net debt target. We So recently announced we have an adjusted net debt target of $1,000,000,000 to $1,500,000,000 we closed the second quarter at $1,700,000,000 so we’re within $200,000,000 of that. And that was a notable decrease from the first quarter when we closed at $2,100,000,000 So we believe we still have some work to do on our on our debt. If you look at the, adjusted debt component of our adjusted net debt, we are at $3,200,000,000 So about $2,700,000,000 of gross debt and 600,000,000.0 of pension and OPEB.

Not much work to do on pension and OPEB, that’s going to simply be paid down. Over time. Most of that is OPEB, but we’d like to get that gross debt reduced from the 2.7. We have several opportunities for efficient debt repayment now. We’ve got a $75,000,000 term loan that’s coming due in in November, and we would likely not renew that.

We also have our 27 notes are are callable now with no premium. That’s about a 140,000,000. And then our 28 notes are callable with a very low premium now. That’s about 220,000,000. So we’d like to get, some debt reductions down.

We do feel that as we approach the top end of our, adjusted net debt target though, we can look at changes to, our returns to, shareholders. At the same time, we’ll look at the other branches of our capital allocation. So we’ll look at investment opportunities as well as any additional portfolio optimization. On working capital, I was just looking at the cash generation forecast for the second half of the year. It’s solid, coming in strong.

I will say, though, it’s a little bit lumpy. When we look at the third quarter, we did have a large increase in metal prices, so my AR is shooting up. So typically, I reduce working capital throughout the year. Working capital is probably going to look a little bit flat in the third quarter, but when we get to the fourth quarter, I will have lower inventories, I’ll have higher AP, and that will clearly offset the AR and will be capital, as well as generating cash from the operations. So a little bit lumpy, but good cash generation expected for the second half of the year.

Chris LaFemina, Global Metals and Mining Research team, Jefferies: So since Bill took over as CEO, the strategy seems to have been kind of streamline the portfolio, improve operational performance. Now we’re focused on getting the WA mining licenses sorted out. Balance sheet deleveraging was important as well. You kind of the stuff is progressing now. And it was notable on your last earnings call that you you started to get questions about capital returns, right?

Because you’re getting to the point now where you can deliver capital returns. But so we know that one option that you have is more capital returns. And I would assume that’s going to be a relevant factor going forward. But you also have the kind of financial capacity over time to invest in growth. So in particular, if markets are stronger than you expect or than we expect, how do you consider deploying capital?

And what sort of growth will we be looking at? Do you have projects in the portfolio today that we might not be as aware of? Or would you even look at M and A as an option?

Molly Bierman, CFO, Alcoa: Yeah. So a little bit on on capital allocation before I I go to the growth. We do have a dividend today that while modest, it’s a dividend that we can pay across all market cycles. We also have a 500,000,000 authorization for share buybacks, so that’s an option to us as well. We do not target, a share price when we do buybacks.

We simply, if we have excess cash, it’s our intention to return that to the shareholders. When we look across when we have excess cash and we’re looking across capital allocation, we’re obviously looking at growth opportunities well. We always have an m and a team looking at deals. As you look across the industry, there’s always opportunities available to us. I don’t necessarily want to comment on the specifics except to say that we’re active.

We talk to our peers. We talk about high level, opportunities. We also talk about specific asset based opportunities. You know we don’t have a big, play in recycling now. I don’t see us necessarily buying a recycler.

We don’t have expertise in the in the collection and sorting, but we do have expertise in remelt. So opportunities for us can look like an expansion of our recycling That would be very specifically aligned with where we have customer needs. For us, we have a large pool from the auto customers, especially in Europe, for more, recycled content. So that’s an area that we also explore. For growth opportunities, perhaps inside CapEx, as well as if an M and A opportunity might help us to fill that.

Chris LaFemina, Global Metals and Mining Research team, Jefferies: So I think the target had been $600,000,000 of cost and productivity improvements, which looks like that’s potentially beatable. So I just wanted to understand what the further operational upside potential is. And we still have trying to find a good solution at San Seprian. Quanana has been closed, so you’re going to get some benefits from that flowing through improvements at Alimar. Can you kind of walk through we have bit of time here, so maybe walk through the portfolio and talk about where you can deliver additional benefits here?

Molly Bierman, CFO, Alcoa: Yeah. When we look at our costs and productivity going forward, there’s a couple of main branches. The first thing, running stably. And I’m very happy to say that we have been running stably now for quite a while. If you look at some of our cost pressures in the past, it’s because we’ve spent money on rework or corrections.

So operating stably is one of the biggest value drivers that we have completely within our control. Last year, we did run the 645,000,000, profitability improvement program that has gone very successful. We’re actually revisiting some of those initiatives now to see what can be accelerated further or even additionally leveraged. So we are looking for, additional savings in that program. One of the biggest drivers, for us on long term, profitability is related to WA and improving our, situation when we get to the new mine region.

However, if you look at today’s operations, we are mining bauxite that in the past, we would we would have left it in the ground. It was just such a low quality. Our teams in Western Australia are amazing. They are getting production. They are finding ways to cut costs.

And, so the the maintenance of our volumes there and the cost controls that we’re seeing will continue to be a focus because they’re they’re paying off for us.

Chris LaFemina, Global Metals and Mining Research team, Jefferies: And sorry. Sorry. Back back to WA kind of contingency plans. Bill talked about eighteen months of you can kind of if things get delayed up to eighteen months, you can continue to mine the low grade bauxite, then it becomes a bit more challenging. But can you just talk about that?

Mean, how that work operationally? Operationally?

Molly Bierman, CFO, Alcoa: So we have multiple contingency plans assuming the approval. So we had originally set up the contingency plans assuming we’d have the approval in the ’26. So the timelines we’re providing fifteen to eighteen months. I mean, we’ll be able to run at the same level of bauxite grade, that we’re currently mining for that for that period of time. If we get beyond the delay, say, of that fifteen to eighteen months, then we would be looking at adjusting some of the operating levels for the Pinjarra refinery.

What we don’t want to do is run out of ore, and we want to keep the refining operations going smoothly. We have no indication that we’re going to be in delays to that length of time, but we do have multiple game plans if we get into that situation where the approvals are taking longer than expected, that we will have the continuity of operations.

Chris LaFemina, Global Metals and Mining Research team, Jefferies: So if we fast forward three, four, five years from now, assuming the WA approvals come through, portfolio is totally cleaned up, you may be investing in some If we can go back to just the markets, I mean, have this hard cap on Chinese domestic aluminum production, which we’re very close to I think a point that you and Bill have made is that building new smelters in The US, or really anywhere in the world, is going to be really challenging. Power constraints are a problem or an issue around that. So are we heading into a world where you have a persistent deficit in the aluminum market? You’re going have this demand growth in the power sector, AI, data centers, etcetera. And it looks like supply constraints are becoming material.

The reason why I think this is so relevant is that over the last twenty five years, aluminum has I think it’s disappointing because of the supply growth. I mean, you look at China, China went from being a net importer of aluminum twenty five years ago to being a net exporter by the end of the China super cycle. It’s consuming all these imports of other raw materials. But aluminum, they had a domestic solution, and we’re able to maintain self sufficiency. But if that supply growth stops, the demand for aluminum has always been it’s kind of the magic metal, right?

I mean, it’s better than copper. It’s just that the supply side has hurt you. So do you think we could be heading into a very different environment structurally in the aluminum market because of supply constraints finally due to power shortages?

Molly Bierman, CFO, Alcoa: You know, we absolutely do think we’re going to have to have response, both in terms of price to incentivize the investment. Power is absolutely going to be a factor. As we’ve talked to The US Administration around tariffs, they obviously would like us to build a smelter in The US. We’ve made clear to them though that one of the key components to that is having The US having an industrial energy policy. We are now today competing with Amazon and Microsoft who are willing to pay over a $100 per megawatt hour for power.

But to run an economical smelter, we need to be down in that $30 range. So they absolutely have, you know, some willingness and openness to address that, not in the near term. But I think you could see projects, possibly in in The US or North America if we can get the energy get the energy for it. Right. And I think you’ll still continue to see, the Chinese funded developments in Indonesia.

So that will continue, and I think that supply will be needed. Unfortunately, that’s probably running on on coal or so it’s not necessarily the greenest solution. We like to see, we like to see the renewable energy, behind the smelters who are producing low carbon aluminum, But we do need the growth.

Chris LaFemina, Global Metals and Mining Research team, Jefferies: So we have a few minutes left. I wanted to ask about just Alcoa share price and the market, the equity markets. What do you think people might be missing? Because I think a lot of metals and mining companies is a very simple story. Leverage to one commodity, you might have growth, you might not have growth.

But there’s not a lot of moving parts in the mix. Whereas with Alcoa, there’s been pretty dramatic changes in the last five years. It’s not as clean maybe. And I think it’s probably becoming cleaner, but it also probably presents an opportunity for people who kind of get in the weeds a little bit and understand what’s happening here. So I would think that the market might be missing a lot of the potential operational upside that you’ve already delivered and will continue to deliver.

But what else do you think the market might be missing about Alcoa?

Molly Bierman, CFO, Alcoa: Yeah. Alcoa has solid fundamentals. We are operating very stably now. We are reducing debt and we’re maintaining our financial discipline. We’re also keeping to our action orientation to address our challenges.

So we talked today about Western Australia. We didn’t talk about our Spanish operations, but those have been challenged. And we’re doing everything possible to get the smelter to a level of profitability and to minimize the losses at the refinery. Active advocates on tariffs, trying very hard to work with both administrations to get the differential on the Canadian rates that we need. So we’re gonna continue our action orientation on the business.

We believe that we are well positioned to deliver value. Recall last year, we completed the strategic acquisition of Alumina Limited. This year, we completed the sale of our modern joint venture. We’re increased aluminum production from our current smelting portfolio. In 10 of the last 11 quarters, we’ve increased production.

We delivered our profitability program, profit improvement program early last year. We’re continuing to leverage that. And now we’re approaching the top of our new adjusted net debt target. And that gives us flexibility to consider consider changes to shareholder returns, additional growth opportunities, as well as portfolio optimization. So we feel like that we are well positioned.

You know, despite some of the external factors, like the tariffs, like the market sentiment, we believe that our road map really positions us well to deliver value into the future.

Chris LaFemina, Global Metals and Mining Research team, Jefferies: And just to be clear, the adjusted net debt does not include the value of the shares in modern,

Molly Bierman, CFO, Alcoa: right? Correct. It’s billion dollars I should have mentioned, commented on Alumar, but then I didn’t address it. So the Alumar smelter has finally moved into profitability. So, you know, we’ve been on the road for a long time.

We’re about mid mid 90% of the way through the restart, but we’re finally getting profits out of the Alumar smelter. So tremendously happy about that, that news. So that’s another it’s a cost improvement and actually, delivering cash value.

Chris LaFemina, Global Metals and Mining Research team, Jefferies: And then, so you you mentioned, San Ciprian again. Can you just give us an update or just maybe just remind us of the history there and where we are today and where things are going?

Molly Bierman, CFO, Alcoa: So the long history, I’d have to go back to 2018 to tell you the whole history of it, but that’s too far back. So, you know, Spain is so challenged on energy prices, and so it’s been a struggle for us with those operations. We don’t have full flexibility to curtail them, so we’re trying to run them in the best configuration possible for everyone. We had restarted the smelter. It had been curtailed.

We have to restart it under the viability agreement that we have with the workers. Unfortunately, the restart that we attempted in in the first quarter, the the line went down when Spain had the country wide power outage. So we spent some time, working with the government, talking to them about what was the cause of the power outage, what are they doing to correct it, how much is that going to cost us, And, eventually decided that we needed to move forward with the restart. So in July, we restarted the restart, and we are moving fortunately very well operationally on that. Spain and the employees there, tremendous asset, really skilled employees.

They really know how to run both the smelter and the refinery. If it weren’t for the energy problems in Spain, we’d love to be running that asset. But really pleased to say that the restart is going well. Unfortunately, though, it’s later than we had expected. So we had expected to be at full capacity by October 2025.

We’re now delayed till the ’26. At full capacity, the smelter will be profitable. It’ll generate cash, and it eventually will generate enough cash to cover the refinery losses. The refinery losses in today’s environment, is losing money, and more importantly, it’s losing cash because we’re spending a lot of capital there. We’re positioning the residue storage area for both expansion as well as positioning it for eventual closure down the line.

So we’ve got we’ve got work going on at the at the refinery. So the the good news is the restart is going well. The bad news is we’re gonna have some cash pressure there until we get fully restarted.

Chris LaFemina, Global Metals and Mining Research team, Jefferies: But sorry. So when you get the smelter to full capacity between the smelter and the refinery, could this be a free cash flow breakeven business on current prices? Or is it going to be free cash negative even on current prices?

Molly Bierman, CFO, Alcoa: Current prices will be negative. But again, as we look at the outlook for ahead to ’twenty seven, ’twenty eight, we absolutely see a possibility where the smelter will cover.

Chris LaFemina, Global Metals and Mining Research team, Jefferies: Okay. That’s that’s good. We’re running low on time. Is there anything else that you want to, conclude with here?

Molly Bierman, CFO, Alcoa: I think we’ve hit, I think we’ve hit the items, Chris. Everything that investors have been asking me about in the last two days, you’ve you’ve covered. I’ll take any questions from the audience if there’s anything further.

Chris LaFemina, Global Metals and Mining Research team, Jefferies: I think we covered it all. It’s very clear.

Molly Bierman, CFO, Alcoa: Thank you very much for your time.

Chris LaFemina, Global Metals and Mining Research team, Jefferies: You so much.

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