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What changed in Alcoa Corp's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Alcoa Corp's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+622 added−574 removedSource: 10-K (2024-02-21) vs 10-K (2023-02-23)

Top changes in Alcoa Corp's 2023 10-K

622 paragraphs added · 574 removed · 403 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

105 edited+41 added−41 removed47 unchanged
Biggest changeThe research and development program is being ramped up to commercial scale and commercial-grade research and development scale quantities of the metal have been used by top-tier brands including Apple Inc. and Audi AG. • The Refinery of the Future initiative aims to achieve alumina refining with no direct greenhouse gas emissions through adapting various processes and new technologies under development for alumina refining, such as mechanical vapor recompression (MVR) and electric calcination. • The ASTRAEA TM process is a proprietary technology under development that can purify post-consumer aluminum scrap, regardless of alloy combination, and beneficiate it up to high purity levels that exceed what is produced at most primary aluminum smelters operating today, permitting use in high tolerance applications, such as aerospace.
Biggest changeThe research and development program is being ramped up to commercial scale and commercial-grade research and development scale quantities of aluminum produced by ELYSIS have been sold for use by top-tier brands including Apple Inc. and Audi AG. • The ASTRAEA TM process is a proprietary technology under development that can purify post-consumer aluminum scrap, regardless of alloy combination, and beneficiate it up to high purity levels that exceed what is produced at most primary aluminum smelters operating today, permitting use in high tolerance applications, such as aerospace. • The Refinery of the Future initiative aims to achieve alumina refining with no direct greenhouse gas emissions through adapting various processes and new technologies under development for alumina refining.
Related to this transaction, the Company recorded an asset impairment of $58 in the first quarter of 2022 in Restructuring and other charges, net on the Statement of Consolidated Operations. In addition, the Company entered into several bauxite offtake agreements with South32 Minerals S.A. to provide bauxite supply for existing long-term supply contracts.
Related to this transaction, the Company recorded an asset impairment of $58 in the first quarter of 2022 in Restructuring and other charges, net on the Statement of Consolidated Operations. In addition, the Company entered into several bauxite offtake agreements with South32 Minerals S.A. (South32). to provide bauxite supply for existing long-term supply contracts.
The remaining ownership interests are held by unrelated third parties. Barra Grande HPP is a joint venture located on the Pelotas River in southern Brazil in which the Company has a 42.2% ownership interest through Alcoa Alumínio. The remaining ownership interests are held by unrelated third parties. Estreito HPP is a consortium between Alcoa Alumínio, through Estreito Energia S.A.
Barra Grande HPP is a joint venture located on the Pelotas River in southern Brazil in which the Company has a 42.2% ownership interest through Alcoa Alumínio. The remaining ownership interests are held by unrelated third parties. Estreito HPP is a consortium between Alcoa Alumínio, through Estreito Energia S.A.
Alcoa also entered into multiple long-term power purchase agreements which collectively secured all of the necessary power for its share of the Alumar smelter for the period of 2024 through 2038. All power secured for short and long term is from renewable sources.
Alcoa also entered into multiple long-term power purchase agreements which collectively secured all of the necessary power for its share of the Alumar smelter for the period of 2024 through 2038. All short- and long-term power secured is from renewable sources.
Beerman was Senior Vice President and Controller of the Company from November 2019 to January 2023 and Vice President and Controller from December 2016 through October 2019. Ms. Beerman was Director, Global Shared Services Strategy and Solutions from November to December 2016. In 2016, Ms. Beerman held a consulting role with the Finance Department of ParentCo.
Beerman was Senior Vice President and Controller of the Company from November 2019 through January 2023 and Vice President and Controller from December 2016 through October 2019. Ms. Beerman was Director, Global Shared Services Strategy and Solutions from November to December 2016. In 2016, Ms. Beerman held a consulting role with the Finance Department of ParentCo.
Alcoa Corporation’s consolidated capacity is its share of Nameplate Capacity based on its ownership interest in the respective smelter. ( 2 ) The Poços de Caldas facility is a casthouse and does not include a smelter. 6 The Company’s five-year review of our production assets first announced in October 2019 includes 1.5 million metric tons of smelting capacity.
Alcoa Corporation’s consolidated capacity is its share of Nameplate Capacity based on its ownership interest in the respective smelter. (2) The Poços de Caldas facility is a casthouse and does not include a smelter. The Company’s five-year review of our production assets first announced in October 2019 includes 1.5 million metric tons of smelting capacity.
We have operating standards based on human performance, which teach employees how to anticipate and recognize situations where errors are likely to occur, which help enable us to predict, reduce, manage, and prevent fatalities and injuries. 12 We strive to maintain a culture of speaking up, where incidents are reported and ideas are shared.
We have operating standards based on human performance, which teach employees how to anticipate and recognize situations where errors are likely to occur, which help enable us to predict, reduce, manage, and prevent fatalities and injuries. We strive to maintain a culture of speaking up, where incidents are reported and ideas are shared.
The Company has the goal of being the lowest emitter of carbon dioxide among all global aluminum companies, per ton of emissions in both smelting and refining, and aims to move its aluminum asset portfolio to a first quartile cost position relative to other aluminum producers upon completion of our portfolio review.
Additionally, the Company has the goal of being the lowest emitter of carbon dioxide among all global aluminum companies, per ton of emissions in both smelting and refining, and aims to move its aluminum asset portfolio to a first quartile cost position relative to other aluminum producers upon completion of our portfolio review.
In general, each alloy type has a major alloying element other than aluminum but will also include lesser amounts of other constituents. Competition Alcoa is subject to highly competitive conditions in all aspects of the aluminum supply chain in which it competes.
In general, each alloy type has a major alloying element other than aluminum but will also include lesser amounts of other constituents. 11 Competition Alcoa is subject to highly competitive conditions in all aspects of the aluminum supply chain in which it competes.
The Company intends to continue to focus on optimizing capacity utilization. Patents, Trade Secrets and Trademarks The Company believes that its domestic and international patent, trade secret and trademark assets provide it with a competitive advantage.
The Company intends to continue to focus on optimizing capacity utilization. 12 Patents, Trade Secrets and Trademarks The Company believes that its domestic and international patent, trade secret and trademark assets provide it with a competitive advantage.
The Company primarily sells alumina through fixed price spot sales and contracts containing two pricing components: (1) the API price basis and (2) a negotiated adjustment basis that takes into account various factors, including freight, quality, customer location, and market conditions.
The Company primarily sells alumina through contracts containing two pricing components: (1) the API price basis and (2) a negotiated adjustment basis that takes into account various factors, including freight, quality, customer location, and market conditions, as well as through fixed price spot sales.
The joint venture complex includes a bauxite mine with estimated capacity of 5 million dry metric tons per year; an alumina refinery with a capacity of 1.8 million metric tons per year (mtpy); and an aluminum smelter with a capacity of 780,000 mtpy.
The joint venture complex includes a bauxite mine with estimated capacity of 5 million dry metric tons per year; an alumina refinery with a capacity of 1.8 million metric tons per year (mtpy); and an aluminum smelter with a capacity of 804,000 mtpy.
Alcoa’s alumina refining facilities and its worldwide alumina capacity stated in metric tons per year (mtpy) are shown in the following table: Country Facility Nameplate Capacity 1 (000 mtpy) Alcoa Corporation Consolidated Capacity 1 (000 mtpy) Australia (AofA) Kwinana 2,190 2,190 Pinjarra 4,700 4,700 Wagerup 2,879 2,879 Brazil Poços de Caldas 390 390 São Luís (Alumar) 3,860 2,084 Spain San Ciprián 1,600 1,600 TOTAL 15,619 13,843 Equity Interests: Country Facility Nameplate Capacity 1 (000 mtpy) Alcoa Corporation Consolidated Capacity 1 (000 mtpy) Saudi Arabia Ras Al Khair (MBAC) 1,800 452 ( 1 ) Nameplate Capacity is an estimate based on design capacity and normal operating efficiencies and does not necessarily represent maximum possible production.
Alcoa’s alumina refining facilities and its worldwide alumina capacity stated in metric tons per year (mtpy) as of December 31, 2023 are shown in the following table: Country Facility Nameplate Capacity 1 (000 mtpy) Alcoa Corporation Consolidated Capacity 1 (000 mtpy) Australia (AofA) Kwinana 2,190 2,190 Pinjarra 4,700 4,700 Wagerup 2,879 2,879 Brazil Poços de Caldas 390 390 São Luís (Alumar) 3,860 2,084 Spain San Ciprián 1,600 1,600 TOTAL 15,619 13,843 5 Equity Interests: Country Facility Nameplate Capacity 1 (000 mtpy) Alcoa Corporation Consolidated Capacity 1 (000 mtpy) Saudi Arabia Ras Al Khair (MBAC) 1,800 452 (1) Nameplate Capacity is an estimate based on design capacity and normal operating efficiencies and does not necessarily represent maximum possible production.
Government Regulations and Environmental Matters Alcoa’s global operations subject it to compliance with various types of government laws, regulations, permits, and other requirements which often provide discreti on to government authorities and could be interpreted, applied, or modified in ways to make the Company’s operations or compliance activities more costly.
Government Regulations and Environmental Matters Alcoa’s global operations subject it to compliance with various types of government laws, regulations, permits, and other requirements which often provide discretion to government authorities and could be interpreted, applied, or modified in ways to make the Company’s operations or compliance activities more costly.
The strength of our position in the primary aluminum market is largely attributable to: our integrated supply chain; long-term energy arrangements; the ability of our casthouses to provide customers with a diverse product portfolio in terms of shapes and alloys; and our decreasing demand for fossil fuels, as approximately 86% of the aluminum smelting portfolio operated by the Company was powered by renewable (primarily hydropower) energy sources in 2022.
The strength of our position in the primary aluminum market is largely attributable to: our integrated supply chain; long-term energy arrangements; the ability of our casthouses to provide customers with a diverse product portfolio in terms of shapes and alloys; and our decreasing demand for fossil fuels, as approximately 87% of the aluminum smelting portfolio operated by the Company was powered by renewable (primarily hydropower) energy sources in 2023.
Leveraging Policy Debt of AWAC is subject to a limit of 30% of total capital (defined as the sum of debt (net of cash) plus any minority interest plus shareholder equity).
Leveraging Policy Debt of AWAC is subject to a limit of 30% of total capital (defined as the sum of debt (net of cash) plus any noncontrolling interest plus shareholder equity).
Item 1. Business. (dollars in millions, except per-share amounts, average realized prices, and average cost amounts) The Company Alcoa Corporation, a Delaware corporation (the Company), is active in all aspects of the upstream aluminum industry with bauxite mining, alumina refining, and aluminum smelting and casting.
Item 1. B usiness. (dollars in millions, except per-share amounts, average realized prices, and average cost amounts) The Company Alcoa Corporation, a Delaware corporation (the Company), is active in all aspects of the upstream aluminum industry with bauxite mining, alumina refining, and aluminum smelting and casting.
Idle capacity of 800,000 mtpy at the San Ciprián refinery is due to the partial curtailment of the refinery in 2022 and 214,000 mtpy of idle capacity at the Poços de Caldas facility is a result of the previous full curtailment of the Poços de Caldas smelter.
Idle capacity of 800,000 mtpy at the San Ciprián refinery is due to the partial curtailment of the refinery in 2022, 438,000 mtpy of idle capacity at the Kwinana refinery is due to the partial curtailment in 2023, and 214,000 mtpy of idle capacity at the Poços de Caldas facility is a result of the previous full curtailment of the Poços de Caldas smelter.
Accordingly, segment information for all prior periods presented will be updated to reflect the new segment structure in future Quarterly Report on Form 10-Q and Annual Report on Form 10-K filings. Information regarding the Company’s bauxite mining properties and bauxite mineral resources and reserves is included in Part 1 Item 2 of this Form 10-K.
Accordingly, segment information for all prior periods presented was updated to reflect the new segment structure in Quarterly Report on Form 10-Q and Annual Report on Form 10-K filings. Information regarding the Company’s bauxite mining properties and bauxite mineral resources and reserves is included in Part 1 Item 2 of this Form 10-K.
In 2022, Alcoa generated approximately 11% of the power used at its smelters worldwide and generally purchased the remainder under long-term arrangements. The following table sets forth the electricity generation capacity and 2022 generation of facilities in which Alcoa Corporation has an ownership interest. See also the Joint Ventures section above.
In 2023, Alcoa generated approximately 9% of the power used at its smelters worldwide and generally purchased the remainder under long-term arrangements. The following table sets forth the electricity generation capacity and 2023 generation of facilities in which Alcoa Corporation has an ownership interest. See also the Joint Ventures section above.
The Company’s largest customer for smelter grade alumina is its own aluminum smelters, which in 2022 accounted for approximately 30% of its total alumina shipments. A small portion of the alumina (non-metallurgical grade) is sold to third-party customers who process it into industrial chemical products. This segment also includes AWAC’s 25.1% share of MBAC.
The Company’s largest customer for smelter grade alumina is its own aluminum smelters, which in 2023 accounted for approximately 32 percent of its total alumina shipments. A small portion of the alumina (non-metallurgical grade) is sold to third-party customers who process it into industrial chemical products. This segment also includes AWAC’s 25.1% share of MBAC.
Jones served as Vice President, Compensation and Benefits from January 2019 through March 2020 and was the Director, Organizational Effectiveness from April 2017 to December 2018. From April 2015 through March 2017, Ms.
Jones served as Vice President, Compensation and Benefits of Alcoa Corporation from January 2019 through March 2020 and was the Director, Organizational Effectiveness from April 2017 to December 2018. From April 2015 through March 2017, Ms.
Alcoa Corporation Consolidated Capacity represents our share of production from these facilities. For facilities wholly-owned by AWAC, Alcoa takes 100% of the production. As of December 31, 2022, Alcoa had approximately 1,014,000 mtpy of idle capacity relative to total Alcoa consolidated capacity of 13,843,000 mtpy.
Alcoa Corporation Consolidated Capacity represents our share of production from these facilities. For facilities wholly-owned by AWAC, Alcoa takes 100% of the production. As of December 31, 2023, Alcoa had approximately 1,452,000 mtpy of idle capacity relative to total Alcoa consolidated capacity of 13,843,000 mtpy.
Jones, 43, has served as Executive Vice President and Chief Human Resources Officer of Alcoa Corporation since April 2020. Ms. Jones oversees all aspects of human resources management, including talent and recruitment, compensation and benefits, inclusion and diversity, training and development, and labor relations. Ms.
Jones, 44, has served as Executive Vice President and Chief Human Resources Officer of Alcoa Corporation since April 1, 2020. Ms. Jones oversees all aspects of human resources management, including talent and recruitment, compensation and benefits, diversity, inclusion, and equity, training and development, and labor relations. Ms.
Jones served as Human Resources Director, Aluminum (including of GPP at ParentCo until the Separation Transaction), and she served as Human Resources Director for ParentCo Wheels and Transportation Products from April 2013 to April 2015. Ms.
Jones served as Human Resources Director, Aluminum (at ParentCo until the Separation Transaction), and she served as Human Resources Director for ParentCo Wheels and Transportation Products from April 2013 to April 2015. Ms.
See Part II Item 7 of this Form 10-K in Management’s Discussion and Analysis of Financial Condition and Results of Operations under caption Business Update.
See Part II Item 7 of this Form 10-K in Management’s Discussion and Analysis of Financial Condition and Results of Operations under caption Business Update for more information.
AWAC Operations AWAC entities’ assets include the following interests: • 100% of the bauxite mining, alumina refining, and aluminum smelting operations of Alcoa’s affiliate, Alcoa of Australia Limited (AofA); • 100% of the Juruti bauxite deposit and mine in Brazil; • 45% interest in Halco (Mining) Inc., a bauxite consortium that owns a 51% interest in Compagnie des Bauxites de Guinée (CBG), a bauxite mine in Guinea; • 9.62% interest in the bauxite mining operations in Brazil of Mineração Rio Do Norte (MRN), a Brazilian company, until the sale of its interest in April 2022; • 39.96% interest in the São Luís refinery in Brazil; • 55% interest in the Portland, Australia smelter that AWAC manages on behalf of the joint venture partners; • 25.1% interest in the mine and refinery in Ras Al Khair, Saudi Arabia; • 100% of the refinery and alumina-based chemicals assets at San Ciprián, Spain; • 100% of Alcoa Steamship Company LLC, a company that procures ocean freight and commercial shipping services for Alcoa in the ordinary course of business; • 100% of the refinery assets at the closed facility in Point Comfort, Texas, United States; and, • 100% interest in various assets formerly used for mining and refining in the Republic of Suriname (Suriname).
AWAC Operations AWAC entities’ assets include the following interests: • 100% of the bauxite mining, alumina refining, and aluminum smelting operations of Alcoa’s affiliate, Alcoa of Australia Limited (AofA); • 100% of the Juruti bauxite deposit and mine in Brazil; • 45% interest in Halco (Mining) Inc., a bauxite consortium that owns a 51% interest in Compagnie des Bauxites de Guinée (CBG), a bauxite mine in Guinea; • 39.96% interest in the São Luís refinery in Brazil; • 55% interest in the Portland, Australia smelter that AWAC manages on behalf of the joint venture partners; • 25.1% interest in the mine and refinery in Ras Al Khair, Saudi Arabia; • 100% of the refinery and alumina-based chemicals assets at San Ciprián, Spain; 2 • 100% of Alcoa Steamship Company LLC, a company that procures ocean freight and commercial shipping services for Alcoa in the ordinary course of business; • 100% of the refinery assets at the closed facility in Point Comfort, Texas, United States; and, • 100% interest in various assets formerly used for mining and refining in the Republic of Suriname (Suriname).
On April 30, 2022, Alcoa completed the sale of its investment in MRN for proceeds of $10. An additional $30 in cash could be paid to the Company in the future if certain post-closing conditions related to future MRN mine development are satisfied.
On April 30, 2022, Alcoa completed the sale of its investment in Mineração Rio Do Norte (MRN) for proceeds of $10. An additional $30 in cash could be paid to the Company in the future if certain post-closing conditions related to future MRN mine development are satisfied.
In 2022, capital expenditures for new or expanded facilities for environmental control were approximately $136 and approximately $162 is expected in 2023. See Part II Item 8 of this Form 10-K in Note S to the Consolidated Financial Statements under caption Contingencies for additional information.
In 2023, capital expenditures for new or expanded facilities for environmental control were approximately $126 and approximately $180 is expected in 2024. See Part II Item 8 of this Form 10-K in Note S to the Consolidated Financial Statements under caption Contingencies for additional information.
Employees As of December 31, 2022, Alcoa had approximately 13,100 employees in 17 countries. Approximately 9,600 of our global employees are covered by collective bargaining agreements with certain unions and varying expiration dates, including approximately 1,000 employees in the U.S., 1,900 employees in Europe, 1,400 employees in Canada, 2,500 employees in South America, and 2,800 employees in Australia.
Employees As of December 31, 2023, Alcoa had approximately 13,600 employees in 17 countries. Approximately 10,000 of our global employees are covered by collective bargaining agreements with certain unions and varying expiration dates, including approximately 1,000 employees in the U.S., 2,000 employees in Europe, 1,400 employees in Canada, 2,800 employees in South America, and 2,800 employees in Australia.
The success and growth of our business depend in large part on our ability to attract, develop, and retain a diverse population of talented, qualified, and highly skilled employees at all levels of our organization, including the individuals who comprise our global workforce, our executive officers and other key personnel.
We believe that our people are our greatest asset. The success and growth of our business depend in large part on our ability to attract, develop, and retain a diverse population of talented, qualified, and highly skilled employees at all levels of our organization, including the individuals who comprise our global workforce, our executive officers and other key personnel.
Bacchi served as the Assistant Treasurer of ParentCo from October 2014 through October 2016 and the Director, Corporate Treasury from 2012 to 2014. Prior to this time, Mr. Bacchi held various roles of increasing responsibility in areas includ ing finance, strategy, procurement, energy and sales. Mr. Bacchi joined ParentCo in Brazil in 1997.
Prior to the Separation Transaction, Mr. Bacchi served as the Assistant Treasurer of ParentCo from October 2014 through October 2016 and the Director, Corporate Treasury from 2012 to 2014. Prior to this time, Mr. Bacchi held various roles of increasing responsibility in areas including finance, strategy, procurement, energy and sales. Mr. Bacchi joined ParentCo in Brazil in 1997. Nicol A.
The portfolio review includes evaluations to improve cost positioning, including curtailments, closures, or divestitures. As of December 31, 2022, the Company had approximately 868,000 mtpy of idle smelting capacity relative to total Alcoa consolidated capacity of 2,968,000 mtpy.
The portfolio review includes evaluations to improve cost positioning, including curtailments, closures, or divestitures. As of December 31, 2023, the Company had approximately 465,000 mtpy of idle smelting capacity relative to total Alcoa consolidated capacity of 2,645,000 mtpy.
As a result of product development and technological advancement, the Company continues to pursue patent protection in jurisdictions throughout the world. As of December 31, 2022, Alcoa’s worldwide patent portfolio consisted of approximately 400 granted patents and 180 pending patent applications.
As a result of product development and technological advancement, the Company continues to pursue patent protection in jurisdictions throughout the world. As of December 31, 2023, Alcoa’s worldwide patent portfolio consisted of approximately 420 granted patents and approximately 170 pending patent applications.
We aspire to work safely, all the time, everywhere. We strive to foster a culture of hazard and risk awareness, the effective understanding and use of our safe systems of work, proactive incident reporting, and knowledge sharing.
We strive to foster a culture of hazard and risk awareness, the effective understanding and use of our safe systems of work, proactive incident reporting, and knowledge sharing.
In the event of a change of control of either Alcoa or Alumina Limited, this exclusivity and non-compete restriction will terminate, and the partners will then have opportunities to unilaterally pursue bauxite or alumina projects outside of or within AWAC, subject to certain conditions provided in the Amended and Restated Charter of the Strategic Council. 2 Equity Calls The cash flow of AWAC and borrowings are the preferred sources of funding for the needs of AWAC.
In the event of a change of control of either Alcoa or Alumina Limited, this exclusivity and non-compete restriction will terminate, and the partners will then have opportunities to unilaterally pursue bauxite or alumina projects outside of or within AWAC, subject to certain conditions provided in the Amended and Restated Charter of the Strategic Council.
In 2022, approximately 96% of the Company’s smelter grade alumina shipments to third parties were sold on a fixed price spot basis or adjusted API price basis.
In 2023, approximately 95 percent of the Company’s smelter grade alumina shipments to third parties were sold on an adjusted API price or fixed price spot basis.
During 2022, the Company acted to mitigate spot energy pricing at the Lista (Norway) smelter. In July 2022, the Company entered into a fixed price power agreement effective for the fourth quarter of 2022 through December 31, 2023. In February 2023, the agreement was amended with improved fixed pricing and lower volume commitments.
In July 2022, the Company entered into a fixed price power agreement effective for the fourth quarter of 2022 through December 31, 2023. In February 2023, the agreement was amended with improved fixed pricing and lower volume commitments.
An equity call can be made on 30 days’ notice, subject to certain limitations, in the event the aggregate annual capital budget of AWAC requires an equity contribution from Alcoa and Alumina Limited.
Equity Calls The cash flow of AWAC and borrowings are the preferred sources of funding for the needs of AWAC. An equity call can be made on 30 days’ notice, subject to certain limitations, in the event the aggregate annual capital budget of AWAC requires an equity contribution from Alcoa and Alumina Limited.
Jones joined ParentCo in 2006 and held a variety of human resource positions at ParentCo, including Human Resources Director, Europe Building & Construction and Human Resources Director, UK and Ireland in ParentCo’s Building and Construction Systems division. William F. Oplinger , 56, has served as Executive Vice President and Chief Operations Officer of Alcoa Corporation since February 1, 2023.
Jones joined ParentCo in 2006 and held a variety of human resource positions at ParentCo, including Human Resources Director, Europe Building & Construction and Human Resources Director, UK and Ireland in ParentCo’s Building and Construction Systems division. Matthew T. Reed , 51, has served as Executive Vice President and Chief Operations Officer of Alcoa Corporation since January 1, 2024. Mr.
Alcoa-operated mines produced 36.7 mdmt of bauxite and mines operated by partnerships in which Alcoa, including AWAC, has equity interests produced 5.4 mdmt of bauxite on a proportional equity basis, for a total Company bauxite production of 42.1 mdmt. On April 30, 2022, Alcoa completed the sale of its investment in MRN.
Alcoa-operated mines produced 36.3 mdmt of bauxite and mines operated by partnerships produced 4.7 mdmt of bauxite on a proportional equity basis, for a total Company bauxite production of 41.0 mdmt. On April 30, 2022, Alcoa completed the sale of its investment in MRN.
In 2022, Alcoa exceeded its target of 85 percent of its smelting portfolio being powered by renewable energy, attaining 86 percent. Renewable energy is derived from natural processes that are replenished constantly, such as sunlight, wind, and hydropower.
In 2023, Alcoa exceeded its target of 85 percent of its smelting portfolio being powered by renewable energy, attaining 87 percent. Renewable energy is derived from natural processes that are replenished constantly, such as sunlight, wind, and hydropower. 1 The third strategic priority is drive returns .
Alcoa owns 74.95% of the joint venture through the equity investment in Pechiney Reynolds Quebec, Inc., which owns a 50.1% share of the smelter, and two wholly-owned Canadian subsidiaries, which own 49.9% of the smelter.
(ABI) smelter is a joint venture between Alcoa and Rio Tinto located in Bécancour, Québec. Alcoa owns 74.95% of the joint venture through its 50% equity investment in Pechiney Reynolds Quebec, Inc., which owns a 50.1% share of the smelter, and two wholly-owned Canadian subsidiaries, which own 49.9% of the smelter.
For each metric ton (mt) of alumina produced, Alcoa consumes the following amounts of the identified raw material inputs (approximate range across relevant facilities): Raw Material Units Consumption per mt of Alumina Bauxite mt 2.2 – 4.1 Caustic soda kg 60 – 100 Electricity kWh 170 to 260 total consumed (0 to 230 imported) Fuel oil and natural gas GJ 6 – 13.5 Lime (CaO) kg 6 – 60 For each metric ton of aluminum produced, Alcoa consumes the following amounts of the identified raw material inputs (approximate range across relevant facilities): Raw Material Units Consumption per mt of Primary Aluminum Alumina mt 1.92 ± 0.02 Aluminum fluoride kg 17.0 ± 2.6 Calcined petroleum coke mt 0.38 ± 0.03 Cathode blocks mt 0.005 ± 0.001 Electricity kWh 13.27 – 16.69 Liquid pitch mt 0.09 ± 0.02 Natural gas mcf 3.0 ± 1.0 Certain aluminum we produce includes alloying materials.
For each metric ton (mt) of alumina produced, Alcoa consumes the following amounts of the identified raw material inputs (approximate range across relevant facilities): Raw Material Units Consumption per mt of Alumina Bauxite mt 2.2 – 4.1 Caustic soda kg 60 – 100 Electricity kWh 170 to 320 total consumed Fuel oil and natural gas GJ 6 – 13.8 Lime (CaO) kg 6 – 60 For each metric ton of aluminum produced, Alcoa consumes the following amounts of the identified raw material inputs (approximate range across relevant facilities): Raw Material Units Consumption per mt of Primary Aluminum Alumina mt 1.91 – 1.94 Aluminum fluoride kg 11.2 – 20.9 Calcined petroleum coke mt 0.32 – 0.39 Cathode blocks mt 0.004 – 0.009 Electricity kWh 13.27 – 16.78 Liquid pitch mt 0.08 – 0.10 Natural gas mcf 2.0 – 5.6 Certain aluminum we produce includes alloying materials.
For a discussion of the risks associated with certain applicable laws and regulations, see Part I Item 1A of this Form 10-K. 11 Environmental Alcoa is subject to extensive federal, state/provincial, and local environmental laws and regulations and other requirements, in the U.S. and abroad, including those relating to the release or discharge of materials into the air, water and soil, waste management, pollution prevention measures, the generation, storage, handling, use, transportation and disposal of hazardous materials, and the exposure of persons to hazardous materials.
Environmental Alcoa is subject to extensive federal, state/provincial, and local environmental laws and regulations and other requirements, in the U.S. and abroad, including those relating to the release or discharge of materials into the air, water and soil, waste management, pollution prevention measures, the generation, storage, handling, use, transportation and disposal of hazardous materials, and the exposure of persons to hazardous materials.
The alumina market is global and highly competitive, with many active suppliers, producers, and commodity traders. Our main competitors in the third-party alumina market are Aluminum Corporation of China, South32, Hangzhou Jinjiang Group, Rio Tinto, and Norsk Hydro ASA. In recent years, there has been significant growth in alumina refining in China and India.
The alumina market is global and highly competitive, with many active suppliers, producers, and commodity traders. The majority of our product is sold in the form of smelter grade alumina. Our main competitors in the third-party alumina market are Aluminum Corporation of China, South32, Hangzhou Jinjiang Group, Rio Tinto, and Norsk Hydro ASA.
Spain In January 2022, Naturgy terminated its contract supplying 50 percent of the refinery’s natural gas demand until June 2022 and 25 percent from July to December 2022. Subsequent to February 2022, the Company has access to adequate supply at spot gas rates.
In January 2022, Naturgy terminated its contract supplying 50 percent of the refinery’s natural gas demand until June 2022 and 25 percent from July to December 2022.
Alcoa’s primary aluminum facilities and its global smelting capacity stated in metric tons per year (mtpy) are shown in the following table: Country Facility Nameplate Capacity 1 (000 mtpy) Alcoa Corporation Consolidated Capacity 1 (000 mtpy) Australia Portland 358 197 Brazil Poços de Caldas 2 N/A N/A São Luís (Alumar) 447 268 Canada Baie Comeau, Québec 314 314 Bécancour, Québec 413 350 Deschambault, Québec 287 287 Iceland Fjarðaál 351 351 Norway Lista 95 95 Mosjøen 200 200 Spain San Ciprián 228 228 United States Massena West, NY 130 130 Ferndale, WA (Intalco) 279 279 Evansville, IN (Warrick) 269 269 TOTAL 3,371 2,968 Equity Interests: Country Facility Nameplate Capacity 1 (000 mtpy) Alcoa Corporation Consolidated Capacity 1 (000 mtpy) Saudi Arabia Ras Al Khair (MAC) 804 202 ( 1 ) Nameplate Capacity is an estimate based on design capacity and normal operating efficiencies and does not necessarily represent maximum possible production.
Pricing for primary aluminum products is typically comprised of three components: (i) the published LME aluminum price for commodity grade P1020 aluminum, (ii) the published regional premium applicable to the delivery locale, and (iii) a negotiated product premium that accounts for factors such as shape and alloy. 6 Alcoa’s primary aluminum facilities and its global smelting capacity stated in metric tons per year (mtpy) as of December 31, 2023 are shown in the following table: Country Facility Nameplate Capacity 1 (000 mtpy) Alcoa Corporation Consolidated Capacity 1 (000 mtpy) Australia Portland 358 197 Brazil Poços de Caldas 2 N/A N/A São Luís (Alumar) 447 268 Canada Baie Comeau, Québec 324 324 Bécancour, Québec 467 350 Deschambault, Québec 287 287 Iceland Fjarðaál 351 351 Norway Lista 95 95 Mosjøen 200 200 Spain San Ciprián 228 228 United States Massena West, NY 130 130 Evansville, IN (Warrick) 215 215 TOTAL 3,102 2,645 Equity Interests: Country Facility Nameplate Capacity 1 (000 mtpy) Alcoa Corporation Consolidated Capacity 1 (000 mtpy) Saudi Arabia Ras Al Khair (MAC) 804 202 (1) Nameplate Capacity is an estimate based on design capacity and normal operating efficiencies and does not necessarily represent maximum possible production.
The idle capacity includes the capacity at the fully curtailed Intalco smelter, 228,000 mtpy of idle capacity at the San Ciprián smelter, 162,000 mtpy of idle capacity at the Warrick smelter, 157,000 mtpy of idle capacity at the Alumar smelter, 31,000 mtpy of idle capacity at the Lista smelter, and 11,000 mtpy of idle capacity at the Portland smelter.
The idle capacity includes 228,000 mtpy of idle capacity at the San Ciprián smelter, 84,000 mtpy of idle capacity at the Alumar smelter, 80,000 mtpy of idle capacity at the Warrick smelter, 42,000 mtpy of idle capacity at the Portland smelter, and 31,000 mtpy of idle capacity at the Lista smelter.
Previously, he was Executive Vice President and Chief Strategy Officer from February 2022 through January 2023, Senior Vice President and Treasurer from November 2019 through January 2022 , and Vice President and Treasurer from November 2016 through October 2019. Prior to the Separation Transaction , Mr.
Bacchi was Executive Vice President and Chief Strategy and Innovation Officer of Alcoa Corporation from February 2023 to August 2023. Previously, he was Executive Vice President and Chief Strategy Officer from February 2022 through January 2023, Senior Vice President and Treasurer from November 2019 through January 2022, and Vice President and Treasurer from November 2016 through October 2019.
We compete largely based on bauxite quality, price, and proximity to customers, as well as strategically located long-term bauxite resources in Australia, Brazil, and Guinea, which is home to the world’s largest reserves of high-quality metallurgical grade bauxite. Alumina We are the world’s largest alumina producer outside of China.
We compete largely based on bauxite quality, price, and logistics, as well as strategically located long-term bauxite resources in Brazil and Guinea, which is home to the world’s largest reserves of high-quality metallurgical grade bauxite. Aluminum In our Aluminum segment, competition is dependent upon the type of product we are selling.
Our mission is to build a stronger Everyone Culture – a more inclusive culture where inclusion, diversity, and equity (IDE) is embedded in our actions and employees feel valued, empowered, and respected. As of December 31, 2022, women comprised approximately 18 percent of our global workforce.
Our aim is to build a more inclusive culture where inclusion, diversity, and equity (IDE) is embedded in our actions and employees feel valued, empowered, and respected. As of December 31, 2023, women comprised approximately 19 percent of our global workforce. We also recognize the benefits and importance of diversity among our senior management.
In 2022, production at the San Ciprián refinery was reduced to approximately 50 percent of the 1.6 million metric tons of annual capacity to mitigate the financial impact of high natural gas costs.
While the supply of natural gas improved in April 2023, the Company kept the one digester offline due to the prolonged annual mine plan approvals process. In 2022, production at the San Ciprián refinery was reduced to approximately 50 percent of the 1.6 million metric tons of annual capacity to mitigate the financial impact of high natural gas costs.
Information about our Executive Officers The names, ages, positions, and areas of responsibility of the executive officers of the Company as of the filing date of this Form 10-K are listed below. Roy C. Harvey , 49, is President and Chief Executive Officer of Alcoa Corporation.
Information about our Executive Officers The names, ages, positions, and areas of responsibility of the executive officers of the Company as of the filing date of this Form 10-K are listed below. William F. Oplinger , 57, has served as President and Chief Executive Officer of Alcoa Corporation since September 24, 2023. Mr.
Inclusion, Diversity, and Equity Alcoa's vision is to provide trusting workplaces that are safe, respectful, and inclusive of all individuals and that reflect the diversity of the communities in which we operate.
We integrate our temporary workers, contractors, and visitors into our safety programs and data. Inclusion, Diversity, and Equity Alcoa's vision is to provide trusting workplaces that are safe, respectful, and inclusive and that reflect the communities in which we operate.
Rio Tinto owns the remaining 25.05% interest in the joint venture. 3 CBG is a joint venture between Boké Investment Company (51%) and the Government of Guinea (49%) for the operation of a bauxite mine in the Boké region of Guinea. Boké Investment Company is owned 100% by Halco (Mining) Inc.; AWA LLC holds a 45% interest in Halco.
Rio Tinto owns the remaining 25.05% interest in the joint venture through its 50% ownership in Pechiney Reynolds Quebec, Inc. CBG is a joint venture between Boké Investment Company (51%) and the Government of Guinea (49%) for the operation of a bauxite mine in the Boké region of Guinea.
Manicouagan owns and operates the 335 megawatt McCormick hydroelectric project, which is located on the Manicouagan River in the Province of Québec, Canada. Alcoa owns 40% of the joint venture. Bauxite This segment consists of the Company’s global bauxite mining operations.
Manicouagan owns and operates the 335 megawatt McCormick hydroelectric project, which is located on the Manicouagan River in the Province of Québec, Canada.
Australia Portland This smelter purchases power from the National Electricity Market (NEM) variable spot market in the state of Victoria. During 2021, the smelter entered into fixed-for-floating swap contracts with AGL Hydro Partnership, Origin Energy Electricity Limited and Alinta Energy CEA Trading Pty Ltd, at a combined level of 515 MW.
During 2021, the smelter entered into fixed-for-floating swap contracts with AGL Hydro Partnership, Origin Energy Electricity Limited, and Alinta Energy CEA Trading Pty Ltd, for a combined 515 MW.
Bauxite is refined using the Bayer process, the principal industrial chemical process for refining bauxite to produce alumina, a compound of aluminum and oxygen that is the raw material used by smelters to produce aluminum metal. The Company obtains bauxite from its own resources, including those belonging to AWAC, as well as through long-term and short-term contracts and mining leases.
Bauxite is the principal raw material used to produce alumina and contains various aluminum hydroxide minerals, the most important of which are gibbsite and boehmite. Bauxite is refined into alumina using the Bayer process. The Company obtains bauxite from its own resources, including those belonging to AWAC, as well as through long-term and short-term contracts and mining leases.
Oplinger also held principal positions in the ParentCo’s GPP division, including as Controller, Operational Excellence Director, Chief Financial Officer, and Chief Operating Officer. Kelly R. Thomas, 53, has served as Executive Vice President and Chief Commercial Officer of Alcoa Corporation since February 14, 2022. In this role, Ms.
Oplinger also held principal positions in the ParentCo’s Global Primary Products division, including as Controller, Operational Excellence Director, Chief Financial Officer, and Chief Operating Officer. Molly S. Beerman , 60, has served as Executive Vice President and Chief Financial Officer of Alcoa Corporation since February 1, 2023. Prior to this, Ms.
The Company also has a number of domestic and international registered trademarks that have significant recognition within the markets that are served, including the name “Alcoa” and the Alcoa symbol.
The Company also has a number of domestic and international registered trademarks that have significant recognition within the markets that are served, including the name “Alcoa” and the Alcoa symbol. Patents may exist for 20 years from filing date, and trademarks may have an indefinite life based upon continued use.
The calciner is owned by Alcoa (39%) and Rio Tinto (61%); Alcoa’s capacity is currently idled in connection with the curtailment of the Intalco aluminum smelter. Hydropower Machadinho Hydro Power Plant (HPP) is a consortium located on the Pelotas River in southern Brazil in which the Company has a 25.7% ownership interest through Alcoa Alumínio.
The calciner is owned by Alcoa (39%) and Rio Tinto (61%). Hydropower Machadinho Hydro Power Plant (HPP) is a consortium located on the Pelotas River in southern Brazil in which the Company has a 27.3% ownership interest through Alcoa Alumínio. The remaining ownership interests are held by unrelated third parties.
In 2022, approximately 25 percent of the necessary power at the Mosjøen (Norway) smelter was purchased at spot rates. Financial compensation of the indirect carbon emissions costs passed through in the electricity bill is received in accordance with EU Commission Guidelines and the Norwegian compensation regime.
Financial compensation of the indirect carbon emissions costs passed through in the electricity bill is received in accordance with EU Commission Guidelines and the Norwegian compensation regime.
AWA LLC is part of the AWAC group of companies and is ultimately owned 60% by Alcoa and 40% by Alumina Limited.
Boké Investment Company is owned 100% by Halco (Mining) Inc.; AWA LLC holds a 45% interest in Halco. AWA LLC is part of the AWAC group of companies and is ultimately owned 60% by Alcoa and 40% by Alumina Limited.
The majority of our product is sold in the form of smelter grade alumina. 10 Key factors influencing competition in the alumina market include cost position, price, reliability of bauxite supply, quality, and proximity to customers and end markets. We had an average cost position in the first quartile of global alumina production in 2022 .
In recent years, there has been significant growth in alumina refining in China and Indonesia. Key factors influencing competition in the alumina market include cost position, price, reliability of bauxite supply, quality, and proximity to customers and end markets. We had an average cost position in the first quartile of global alumina production in 2023.
Sonya Elam Harden , 58, has served as Executive Vice President and Chief External Affairs Officer of Alcoa Corporation since August 2020. In this role, Ms. Elam Harden is responsible for global government affairs, community relations, and sustainability, and she oversees the Alcoa Foundation. Ms.
Gagstetter, 45, has served as Executive Vice President and Chief External Affairs Officer of Alcoa Corporation since October 1, 2023. Ms. Gagstetter is responsible for global external affairs, communications, and sustainability, and she oversees the Alcoa Foundation. Ms.
References herein to “ParentCo” refer to Alcoa Inc. and its consolidated subsidiaries through October 31, 2016, at which time it was renamed Arconic Inc. (Arconic) and since has been subsequently renamed Howmet Aerospace Inc. Business Strategy Alcoa has three strategic priorities: reduce complexity, drive returns and advance sustainably.
References herein to “ParentCo” refer to Alcoa Inc. and its consolidated subsidiaries through October 31, 2016, at which time it was renamed Arconic Inc. (Arconic) and since has been subsequently renamed Howmet Aerospace Inc. Business Strategy Alcoa's business strategy is designed to create shareholder value while aligning with our purpose, vision, and values.
Under the amended joint venture agreement, upon the occurrence of an unremedied event of default by Alcoa, Ma’aden may purchase, or, upon the occurrence of an unremedied event of default by Ma’aden, Alcoa may sell, its interest in the joint venture for consideration that varies depending on the time of the default.
In addition, upon the occurrence of an unremedied event of default by Alcoa, Ma’aden may purchase, or, upon the occurrence of an unremedied event of default by Ma’aden, Alcoa may sell, its interest in the joint venture for consideration that varies depending on the time of the default. 3 ELYSIS ELYSIS Limited Partnership is between wholly-owned subsidiaries of Alcoa (48.235%) and Rio Tinto Alcan Inc.
Lista and Mosjøen, Norway Beginning in 2017, Alcoa entered into several long-term power purchase agreements, which secured approximately 50 percent of the necessary power for the Norwegian smelters for the period of 2020 to 2035. The remaining 50 percent was purchased under short-term contracts.
As the Company engages stakeholders for a long-term solution for San Ciprián operations, it also continues discussions with other generators to secure long-term power. Lista and Mosjøen, Norway Beginning in 2017, Alcoa entered into several long-term power purchase agreements, which secured approximately 50 percent of the necessary power for the Norwegian smelters for the period of 2020 to 2035.
The Company is continuing to review operating levels with changes in market conditions. Iceland Landsvirkjun, the Icelandic national power company, supplies competitively priced electricity from a hydroelectric facility to Alcoa’s Fjarðaál smelter under a 40-year power contract, which will expire in 2047 with a price renegotiation effective from 2027.
Iceland Landsvirkjun, the Icelandic national power company, supplies competitively priced electricity from a hydroelectric facility to Alcoa’s Fjarðaál smelter under a 40-year power contract, which will expire in 2047 with a price renegotiation effective from 2028. Spain The San Ciprián refinery has been operating at 50 percent of its capacity since the third quarter of 2022.
In addition, in November 2021 the Portland Aluminium joint venture announced the planned restart of 35,000 mtpy of idle capacity (19,000 mtpy Alcoa share) which was underpinned by an additional fixed-for-floating swap contract with AGL Hydro Partnership for 72 MW. These swap contracts manage exposure to the variable energy rates from the NEM spot market.
In addition, in November 2021 the Portland Aluminium joint venture announced the restart of 35,000 mtpy of idle capacity (19,000 mtpy Alcoa share), and the smelter entered into an additional fixed-for-floating swap contract with AGL Hydro Partnership for 72 MW. These swap contracts for a combined 587 MW expire on June 30, 2026.
In this role, Mr. Oplinger is responsible for the daily operations of the Company’s bauxite, alumina, and aluminum assets. From November 2016 to January 2023, Mr. Oplinger was Executive Vice President and Chief Financial Officer of the Company. Prior to this, Mr.
Oplinger served as Executive Vice President and Chief Operations Officer of the Company from February 2023 until his appointment as President and Chief Executive Officer. From November 2016 through January 2023, Mr. Oplinger was Executive Vice President and Chief Financial Officer of the Company. Prior to this, Mr.
The roadmap of technologies include: • The ELYSIS TM joint venture uses an aluminum smelting technology that eliminates all direct greenhouse gas emissions from the traditional smelting process, instead emitting pure oxygen as a byproduct.
These have the potential to drive value by reducing costs, improving efficiency, and reducing greenhouse gas emissions in both alumina refining and aluminum smelting. The roadmap of technologies under development includes: • The ELYSIS TM partnership uses an aluminum smelting technology that eliminates direct greenhouse gas emissions from the traditional smelting process, instead emitting pure oxygen as a byproduct.
Below is an overview of our external energy for our smelters and refineries. External Energy Source Region Electricity Natural Gas North America Québec, Canada Alcoa’s smelter located in Baie-Comeau, Quebec, purchases approximately one-quarter of its electricity needs from Manicouagan Power Limited Partnership.
External Energy Source Region Electricity Natural Gas North America Québec, Canada Alcoa’s smelter located in Baie-Comeau, Quebec, purchases approximately 25 percent of its electricity needs from Manicouagan Power Limited Partnership. Otherwise, all electricity consumed by the three smelters in Québec is purchased under contracts with Hydro-Québec that expire on December 31, 2029.
On February 3, 2023, the Company reached an updated agreement with the workers’ representatives to commence the restart process in phases beginning in January 2024.
The smelter purchased its reduced electricity requirements under a bilateral spot power contract that expired on June 30, 2022. In February 2023, the Company reached an updated viability agreement with the workers’ representatives to commence the restart process in phases beginning in January 2024.
Where aluminum products compete with other materials, the characteristics of aluminum are also a significant factor, particularly its light weight, strength, and recyclability. Increasingly, Alcoa is seeing higher demand for its Sustana line of products by customers focused on low carbon inputs throughout their supply chain.
Where aluminum products compete with other materials, the characteristics of aluminum are also a significant factor, particularly its light weight, strength, and recyclability.
We have incurred, and will continue to incur, capital expenditures to meet our health and safety compliance requirements, as well as to continually improve our safety systems. For a discussion of the risks associated with certain applicable laws and regulations, see Part I Item 1A of this Form 10-K.
For a discussion of the risks associated with certain applicable laws and regulations, see Part I Item 1A of this Form 10-K.
Alcoa is working towards the implementation of the Global Industry Standard on Tailings Management (GISTM), an integrated approach to the management and operations of our tailings storage facilities to enhance the safety of these facilities. Additionally, we are and may become subject to various laws and regulations related to climate change, particularly related to the reduction of greenhouse gas emissions.
Alcoa is committed to the Global Industry Standard on Tailings Management (GISTM), an integrated approach to the management and operations of our tailings storage facilities to enhance the safety of these facilities.
Jeffrey D. Heeter , 57, has served as Executive Vice President and General Counsel of Alcoa Corporation since November 2016. In this role, Mr. Heeter has overall responsibility for the Company’s global legal, compliance, governance, and security matters. He previously also served as the Secretary of Alcoa Corporation from November 2016 to December 2019. Mr.
Hastings, 49, has served as Executive Vice President and General Counsel of Alcoa Corporation since September 1, 2023. Mr. Hastings has overall responsibility for the Company’s global legal, compliance, governance, and security matters. Prior to joining the Company, Mr.
In 2022, approximately 8% of Alcoa’s bauxite shipments were sold to third-party customers and Alcoa-operated mines supply approximately 92% of their volume to Alcoa refineries. Alcoa’s share of mines operated by partnerships in which Alcoa, including AWAC, has equity interests, supply approximately 55% of their volume to Alcoa refineries.
In 2023, Alcoa-operated mines, mines operated by partnerships in which Alcoa, including AWAC, has equity interests, and bauxite offtake agreements supplied 83 percent of volume to Alcoa refineries and the remaining 17 percent was sold to third-party customers.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese and other similar impacts that our operations may have on the environment, as well as exposures to hazardous substances or wastes associated with our operations, could result in significant costs, civil or criminal damages, fines or penalties, and enforcement actions issued by regulatory or judicial authorities enjoining, curtailing, or closing operations or requiring corrective measures, any of which could materially and adversely affect us. 23 Cybersecurity Risks Cyber attacks, security breaches, system failures, software or application vulnerabilities, or other cyber incidents may threaten the integrity of our information technology infrastructure and other sensitive business information, disrupt our operations and business processes, expose us to potential liability, and result in reputational harm and other negative consequences that could have a material adverse effect on our business, financial condition, and results of operations.
Biggest changeCybersecurity Risks Cyber attacks, security breaches, system failures, software or application vulnerabilities, or other cyber incidents may threaten the integrity of our information technology infrastructure and other sensitive business information, disrupt our operations and business processes, expose us to potential liability, and result in reputational harm and other negative consequences that could have a material adverse effect on our business, financial condition, and results of operations.
The Chinese market is a significant source of global demand for, and supply of, commodities, including aluminum. Chinese production rates of aluminum, both from new construction and installed smelting capacity, can fluctuate based on Chinese government policy, such as the level of enforcement of capacity limits and/or licenses and environmental policies.
The Chinese market is a significant source of global demand for, and supply of, commodities, including aluminum. Chinese production rates of aluminum, both from new construction and installed smelting capacity, can fluctuate based on Chinese government policy, such as the level of enforcement of production capacity limits and/or licenses and environmental policies.
We have operations or activities in numerous countries and regions outside the United States, including Australia, Brazil, Canada, Europe, Guinea, and the Saudi Arabia.
We have operations or activities in numerous countries and regions outside the United States, including Australia, Brazil, Canada, Europe, Guinea, and Saudi Arabia.
Alcoa and Alcoa Nederland Holding B.V. (ANHBV), a wholly-owned subsidiary of Alcoa, are party to a revolving credit agreement with a syndicate of lenders and issuers named therein (as subsequently amended, the Revolving Credit Facility).
Alcoa and Alcoa Nederland Holding B.V. (ANHBV), a wholly-owned subsidiary of Alcoa, are party to a revolving credit agreement with a syndicate of lenders and issuers named therein (as subsequently amended, the Amended Revolving Credit Facility).
Energy supply contracts for our operations vary in length and market exposure, and we could be, and have been, negatively impacted by: • Significant increases in LME prices, or spot electricity, fuel oil and/or natural gas prices; • Unavailability of or interruptions or uncertainty in energy supply or unplanned outages due to political instability, droughts, hurricanes, wildfires, other natural disasters, equipment failure, or other causes; • Unavailability of long-term energy from renewable sources in particular locations or at competitive rates; 17 • Curtailment of one or more refineries or smelters due to the inability to extend energy contracts upon expiration or negotiate new arrangements on cost-effective terms, the unavailability of energy at competitive rates; and, • Curtailment of one or more facilities due to high energy costs that render their continued operation uneconomic, discontinuation of power supply interruptibility rights granted to us under a regulatory regime in the country in which the facility is located, or due to a determination that energy arrangements do not comply with applicable laws, thus rendering the operations that had been relying on such country’s energy framework uneconomic.
Energy supply contracts for our operations vary in length and market exposure, and we could be, and have been, negatively impacted by: • Significant increases in LME prices, or spot electricity, fuel oil and/or natural gas prices; • Unavailability of or interruptions or uncertainty in energy supply or unplanned outages due to political instability, droughts, hurricanes, wildfires, other natural disasters, equipment failure, or other causes; • Unavailability of long-term energy from renewable sources in particular locations or at competitive rates; • Curtailment of one or more refineries or smelters due to the inability to extend energy contracts upon expiration or negotiate new arrangements on cost-effective terms, the unavailability of energy at competitive rates; and, • Curtailment of one or more facilities due to high energy costs that render their continued operation uneconomic, discontinuation of power supply interruptibility rights granted to us under a regulatory regime in the country in which the facility is located, or due to a determination that energy arrangements do not comply with applicable laws, thus rendering the operations that had been relying on such country’s energy framework uneconomic.
Whether or not the Company holds majority interests or maintains operational control in such arrangements, our joint venture and other business partners may take certain actions and positions, or experience difficulties, that may negatively impact the Company and/or its reputation, such as: • Advancing economic, political, social, or business interests or goals that are inconsistent with, or opposed to those of, the Company and our stakeholders; • Exercising veto rights to block actions that we believe to be in our or the joint venture’s or strategic alliance’s best interests; • Taking action contrary to our policies or objectives with respect to our investments; and, • As a result of financial or other difficulties, be unable or unwilling to fulfill their obligations under the joint venture, strategic alliance, or other agreements, such as contributing capital to expansion or maintenance projects.
Whether or not the Company holds majority interests or 20 maintains operational control in such arrangements, our joint venture and other business partners may take certain actions and positions, or experience difficulties, that may negatively impact the Company and/or its reputation, such as: • Advancing economic, political, social, or business interests or goals that are inconsistent with, or opposed to those of, the Company and our stakeholders; • Exercising veto rights to block actions that we believe to be in our or the joint venture’s or strategic alliance’s best interests; • Taking action contrary to our policies or objectives with respect to our investments; and, • As a result of financial or other difficulties, be unable or unwilling to fulfill their obligations under the joint venture, strategic alliance, or other agreements, such as contributing capital to expansion or maintenance projects.
See Part II Item 7 of this Form 10-K in Management’s Discussion and Analysis of Financial Condition and Results of Operations under caption Forward-Looking Statements. 14 Industry and Global Market Risks The aluminum industry and aluminum end-use markets are highly cyclical and are influenced by several factors, including global economic conditions, the Chinese market, and overall consumer confidence.
See Part II Item 7 of this Form 10-K in Management’s Discussion and Analysis of Financial Condition and Results of Operations under the caption Forward-Looking Statements. Industry and Global Market Risks The aluminum industry and aluminum end-use markets are highly cyclical and are influenced by several factors, including global economic conditions, the Chinese market, and overall consumer confidence.
See Part I Item 3 of this Form 10-K and Part II Item 8 of this Form 10-K in Note S to the Consolidated Financial Statements under caption Contingencies. Climate change, climate change legislation or regulations, and efforts to reduce greenhouse gases and build operational resilience to extreme weather conditions may adversely impact our operations and markets.
See Part I Item 3 of this Form 10-K and Part II Item 8 of this Form 10-K in Note S to the Consolidated Financial Statements under caption Contingencies. Climate change, climate change legislation or regulations, and efforts to reduce greenhouse gases (GHG) and build operational resilience to extreme weather conditions may adversely impact our operations and markets.
Executing these actions also diverts senior management time and resources from our regular business operations, each of which could adversely affect the Company’s business, financial condition, and results of operations. 18 Joint ventures, other strategic alliances, and strategic business transactions may not achieve intended results.
Executing these actions also diverts senior management time and resources from our regular business operations, each of which could adversely affect the Company’s business, financial condition, and results of operations. Joint ventures, other strategic alliances, and strategic business transactions may not achieve intended results.
The results of the calculation of these ratios, when considering the Company’s existing debt obligations, affects and could restrict the amount of additional borrowing capacity under the Company’s Revolving Credit Facility or other credit facilities, and ANHBV’s ability to make restricted payments, to make investments and to incur indebtedness.
The results of the calculation of these ratios, when considering the Company’s existing debt obligations, affects and could restrict the amount of additional borrowing capacity under the Company’s Amended Revolving Credit Facility or other credit facilities, and ANHBV’s ability to make restricted payments, to make investments and to incur indebtedness.
The terms of the Revolving Credit Facility and the indentures governing our outstanding notes contain covenants that could impose significant operating and financial restrictions on us upon non-compliance with them, including on our ability to, among other things: • Make investments, loans, advances, and acquisitions; • Amend certain material documents; • Dispose of assets; • Incur or guarantee additional debt and issue certain disqualified equity interests and preferred stock; • Make certain restricted payments, including limiting the amount of dividends on equity securities and payments to redeem, repurchase or retire equity securities or other indebtedness; • Engage in transactions with affiliates; • Materially alter the business we conduct; • Enter into certain restrictive agreements; • Create liens on assets to secure lenders and issuers; • Consolidate, merge, sell or otherwise dispose of all or substantially all of Alcoa’s, ANHBV’s or a subsidiary guarantor’s assets; and, • Take any actions that would reduce our ownership of AWAC entities below an agreed level.
The terms of the Amended Revolving Credit Facility, Amended Japanese Yen Revolving Credit Facility, and the indentures governing our outstanding notes contain covenants that could impose significant operating and financial restrictions on us upon non-compliance with them, including on our ability to, among other things: • Make investments, loans, advances, and acquisitions; • Amend certain material documents; • Dispose of assets; • Incur or guarantee additional debt and issue certain disqualified equity interests and preferred stock; • Make certain restricted payments, including limiting the amount of dividends on equity securities and payments to redeem, repurchase or retire equity securities or other indebtedness; • Engage in transactions with affiliates; • Materially alter the business we conduct; • Enter into certain restrictive agreements; • Create liens on assets to secure lenders and issuers; • Consolidate, merge, sell or otherwise dispose of all or substantially all of Alcoa’s, ANHBV’s or a subsidiary guarantor’s assets; and, • Take any actions that would reduce our ownership of AWAC entities below an agreed level.
Overtopping of storage areas caused by extreme weather events, erosion, or unanticipated structural failure of impoundments could result in severe, and in some cases catastrophic, damage to the environment, natural resources, or property, or personal injury and loss of life.
Failure of storage areas caused by extreme weather events, erosion, or unanticipated structural failure of impoundments could result in severe, and in some cases catastrophic, damage to the environment, natural resources, or property, or personal injury and loss of life.
Cyber attacks or breaches could require significant management attention and resources and result in the diminution of the value of our investment in research and development, which could have a material adverse effect on our business, financial condition, or results of operations.
Some cyber attacks or breaches could require significant management attention and resources and result in the diminution of the value of our investment in research and development, which could have a material adverse effect on our business, financial condition, or results of operations.
The global focus on climate is raising awareness in all countries, such as the agreement at the 26th United Nations Climate Change Conference of the Parties (COP26) by many governments of countries where the Company operates to combat deforestation, which could adversely affect our ability to mine and operate in sensitive areas like the Jarrah Forest and the Amazon. 22 The potential physical impacts of climate change or extreme weather conditions on the Company’s operations are highly uncertain and will be particular to the geographic circumstances.
The global focus on climate is raising awareness in all countries, such as the agreement at the 26th United Nations Climate Change Conference of the Parties (COP26) by many governments of countries where the Company operates to combat deforestation, which could adversely affect our ability to mine and operate in sensitive areas like the Jarrah Forest and the Amazon. 24 The potential physical impacts of climate change or extreme weather conditions on the Company’s operations are highly uncertain and will be particular to the geographic circumstances.
In addition, existing collective bargaining agreements may not prevent strikes, work stoppages, work slowdowns, union organizing campaigns, or lockouts at our facilities in the future. We may also be subject to general country strikes or work stoppages unrelated to our business or collective bargaining agreements.
In addition, existing arrangements may not prevent strikes, work stoppages, work slowdowns, union organizing campaigns, or lockouts at our facilities in the future. We may also be subject to general country strikes or work stoppages unrelated to our business or collective bargaining agreements.
The risks associated with the Company’s global operations include: • Geopolitical risks, such as political instability, coups d’états, civil unrest, strikes and work stoppages, expropriation, nationalization of properties by a government, imposition of sanctions, changes to import or export regulations and fees, renegotiation, revocation or nullification of existing agreements, leases, licenses, and permits, and changes to mining royalty rules or laws; • Economic and commercial instability risks, including those caused by sovereign and private debt default, corruption, and changes in local government laws, regulations, and policies, such as those related to tariffs and trade barriers, trade tensions, taxation, exchange controls, employment regulations, and repatriation of earnings; • Weakening macroeconomic conditions; • Contracting manufacturing activity, especially in the global automotive sector; • War or terrorist activities; • Major public health issues, such as an outbreak of a pandemic or epidemic, which could cause disruptions in our operations, supply chain, or workforce; • Information systems failures or disruptions, including due to cyber attacks; • Difficulties enforcing intellectual property and contractual rights, or limitations in the protection of technology, data, and intellectual property, in certain jurisdictions; and, • Unexpected events, accidents, or environmental incidents, including natural disasters.
The risks associated with the Company’s global operations include: • Geopolitical risks, such as political instability, coups d’états, civil unrest, strikes and work stoppages, expropriation, nationalization of properties by a government, imposition of sanctions, changes to import or export regulations and fees, renegotiation, revocation or nullification of existing agreements, leases, licenses, and permits, and changes to mining royalty rules or laws; • Economic and commercial instability risks, including those caused by sovereign and private debt default, corruption, and changes in local government laws, regulations, and policies, such as those related to tariffs and trade barriers, trade tensions, taxation, exchange controls, employment regulations, and repatriation of earnings; • Weakening macroeconomic conditions; • Decreasing manufacturing activity, especially in the global automotive sector; • War or terrorist activities; • Major public health issues, such as a pandemic or epidemic, which could cause disruptions in our operations, supply chain, or workforce; • Information systems failures or disruptions, including due to cyber attacks; • Difficulties enforcing intellectual property and contractual rights, or limitations in the protection of technology, data, and intellectual property, in certain jurisdictions; and, • Unexpected events, accidents, or environmental incidents, including natural disasters.
Changing expectations and increased information required by regulators could make our ability to comply with the applicable requirements more difficult, inhibit or delay our ability to timely obtain the necessary approvals, if at all, result in approvals being conditioned in a manner that may restrict the Company’s ability to efficiently and economically conduct its mining activities, require us to adjust our mining plans, or preclude the continuation of certain ongoing operations and mining activities or the development of future mining operations.
Changing expectations and increased information required by regulators has in the past and could in the future make our ability to comply with the applicable requirements more difficult, inhibit or delay our ability to timely obtain the necessary approvals, if at all, result in approvals being conditioned in a manner that may restrict the Company’s ability to efficiently and economically conduct its mining activities, require us to adjust our mining plans, or preclude the continuation of certain ongoing operations and mining activities or the development of future mining operations.
Our business operations are capital intensive, and portfolio optimization actions such as the curtailment or closure of operations or facilities may include significant costs and charges, including asset impairment charges and other measures.
Our business operations are capital intensive, and portfolio optimization actions such as the curtailment or closure of operations or facilities may include significant costs and charges, including asset impairment or restructuring charges and other measures.
Though we have ownership in certain hydroelectricity assets, we rely on third parties for our supply of energy resources consumed in the manufacture of our products.
Though we have ownership in certain hydroelectricity assets, we also rely on third parties for our supply of energy resources consumed in the manufacture of our products.
If AofA is ultimately successful, any amounts paid to the ATO as part of the 50% payment would be refunded . The ATO has also issued a position paper with its preliminary view on the imposition of administrative penalties related to the tax assessment , proposing penalties of approximately $86 (A$128).
If AofA is ultimately successful, any amounts paid to the ATO as part of the 50% payment would be refunded. The ATO has also issued a position paper with its preliminary view on the imposition of administrative penalties related to the tax assessment, proposing penalties of approximately $87 (A$128).
Growing expectations of hosting communities as well as increasing social activism pose additional challenges to us maintaining our social license to operate and expand our business. For example, community and stakeholder concerns in Juruti, Brazil have affected our ability to access certain mining areas at times.
Growing expectations of hosting communities as well as increasing social activism pose additional challenges to us maintaining our social license to operate and expanding our business. For example, community and stakeholder concerns in Juruti, Brazil have affected our ability to access certain mining areas at times.
For example, in July 2020, AofA received Notices of Assessment (the Notices) from the Australian Taxation Office (ATO) related to the pricing of certain historic third-party alumina sales. The Notices asserted claims for income tax payable by AofA of approximately $143 (A$214), exclusive of interest and penalties.
For example, in July 2020, AofA received Notices of Assessment (the Notices) from the Australian Taxation Office (ATO) related to the pricing of certain historic third-party alumina sales. The Notices asserted claims for income tax payable by AofA of approximately $145 (A$214), exclusive of interest and penalties.
In July 2022, the Board of Directors approved an additional common stock repurchase program under which the Company may purchase shares of its outstanding common stock up to an aggregate transactional value of $500, depending on the Company’s continuing analysis of market, financial, and other factors (the New Repurchase Program).
In July 2022, the Board of Directors approved an additional common stock repurchase program under which the Company may purchase shares of its outstanding common stock up to an aggregate transactional value of $500, depending on the Company’s continuing analysis of market, financial, and other factors (the July 2022 authorization).
Each of the above three components has its own drivers of variability. The LME price volatility is typically driven by macroeconomic factors (including political instability), global supply and demand of aluminum (including expectations for growth, contraction, and the level of global inventories), and trading activity of financial investors.
Each of the above three components has its own drivers of variability. The LME price volatility is typically driven by macroeconomic factors (including geopolitical instability), global supply and demand of aluminum (including expectations for growth, contraction, and the level of global inventories), and trading activity of financial investors.
In October 2021, the Company’s Board of Directors initiated a quarterly cash dividend program, at $0.10 per share and authorized a $500 share repurchase program, which was fully used with the completion of $150 in repurchases during the third quarter of 2022 .
In October 2021, the Company’s Board of Directors initiated a quarterly cash dividend program, at $0.10 per share and authorized a $500 common stock repurchase program, which was fully used with the completion of $150 in repurchases during the third quarter of 2022.
Item 1A. Risk Factors. There are inherent risks associated with Alcoa’s business and industry. In addition to the factors discussed elsewhere in this report, the following risks and uncertainties could have a material adverse effect on our business, financial condition, or results of operations, including causing Alcoa’s actual results to differ materially from those projected in any forward-looking statements.
Item 1A. Ri sk Factors. There are inherent risks associated with Alcoa’s business and industry. In addition to the factors discussed elsewhere in this report, the following risks and uncertainties could have a material adverse effect on our business, financial condition, or results of operations, including causing Alcoa’s actual results to differ materially from those projected in any forward-looking statements.
In addition, as described elsewhere in this “Risk Factors” section , the Company’s Revolving Credit Facility (as defined below) could inhibit the Company’s ability to make certain restricted payments, including the amount of dividends and payments to redeem, repurchase, or retire equity securities or other indebtedness, if the Company does not maintain certain financial ratios.
In addition, as described elsewhere in this “Risk Factors” section, the Company’s Amended Revolving Credit Facility and Amended Japanese Yen Revolving Credit Facility (as defined below) could inhibit the Company’s ability to make certain restricted payments, including the amount of dividends and payments to redeem, repurchase, or retire equity securities or other indebtedness, if the Company does not maintain certain financial ratios.
While the Company took several actions in 2022 to improve the funded status of its pension plans and adjust its asset allocation to reduce variance risk, declines in the discount rate or lower-than-expected investment returns on plan assets could have a material negative effect on our cash flows.
While the Company took several actions in recent years to improve the funded status of its pension plans and adjust its asset allocation to reduce variance risk, declines in the discount rate or lower-than-expected investment returns on plan assets could have a material negative effect on our cash flows.
The payment of any future dividends and the existence of a share repurchase program could cause our stock price to be higher than it would otherwise be and could potentially reduce the market liquidity for our stock.
The payment of any future dividends and the existence of a common stock repurchase program could cause our stock price to be higher than it would otherwise be and could potentially reduce the market liquidity for our stock.
Any of these may disrupt our operations, hinder transportation of products to us or of our products to customers, prevent access to our facilities, negatively impact our suppliers’ or customers’ operations and their ability to fulfill contractual obligations to us, and/or cause damage to our facilities, all of which may increase our costs, reduce production, and adversely affect our business, financial condition, or results of operations.
Any of these may disrupt our operations, hinder transportation of products to us or of our products to customers, interrupt energy supplies, prevent access to our facilities, negatively impact our suppliers’ or customers’ operations and their ability to fulfill contractual obligations to us, and/or cause damage to our facilities, all of which may increase our costs, reduce production, and adversely affect our business, financial condition, or results of operations.
The reduction, suspension, or elimination of our cash dividend or our share repurchase program could adversely affect the market price of our stock and/or significantly increase its trading price volatility.
The reduction, suspension, or elimination of our cash dividend or our common stock repurchase program could adversely affect the market price of our stock and/or significantly increase its trading price volatility.
Our announced roadmap of technologies under development to support our long-term goal of having the lowest carbon-producing alumina refineries and aluminum smelters includes investments to develop, implement, and commercialize new technologies to reduce carbon emissions in the aluminum production process.
Our announced roadmap of technologies under development to support our long-term goal of being one of the lowest carbon-producing alumina refineries and aluminum smelters includes investments to develop, implement, and commercialize new technologies to reduce carbon emissions in the aluminum production process.
Economic factors, including inflation and fluctuations in foreign currency exchange rates and interest rates, competitive factors in the countries in which we operate, and volatility or deterioration in the global economic and financial environment, could affect our business, financial condition, and results of operations.
Economic factors, including inflation and fluctuations in foreign currency exchange rates and interest rates, competitive factors in the countries in which we operate, and volatility or deterioration in the global economic and financial environment, have in the past and could in the future affect our business, financial condition, and results of operations.
The breach of any of these covenants or restrictions could result in a default under the Revolving Credit Facility or the indentures governing our notes and other outstanding indebtedness, including such indebtedness for which the Company is a guarantor.
The breach of any of these covenants or restrictions could result in a default under the Amended Revolving Credit Facility, the Amended Japanese Yen Revolving Credit Facility, or the indentures governing our notes and other outstanding indebtedness, including such indebtedness for which the Company is a guarantor.
Failure to obtain, maintain, or renew permits or approvals, or permitting or approval delays, restrictions, or conditions may impact the quality of the bauxite we are able to mine and could increase our costs and affect our ability to efficiently and economically conduct our operations, potentially having a materially adverse impact on our results of operations and profitability.
Failure to obtain, maintain, or renew permits or approvals, or permitting or approval delays, restrictions, or conditions has in the past and may in the future impact the quality of the bauxite we are able to mine and could increase our costs and affect our ability to efficiently and economically conduct our operations, potentially having a materially adverse impact on our results of operations and profitability.
Increased trade barriers or restrictions on global trade, or retaliatory measures taken by Russia, or other countries in response, as well as the destabilizing effects of the conflict, could also adversely affect our business, financial condition and results of operations by limiting sales, restricting access to required raw materials, or raising costs thereof.
Increased trade barriers or restrictions on global trade, or retaliatory measures taken in response, as well as the destabilizing effects of regional conflict, could also adversely affect our business, financial condition and results of operations by limiting sales, restricting access to required raw materials, or raising costs thereof.
Many of the markets in which our customers participate are also cyclical in nature and experience significant fluctuations in demand for their products based on economic conditions, consumer demand, raw material and energy costs, and government actions. Many of these factors are beyond our control.
Many of the markets in which our customers participate are also cyclical in nature and experience significant fluctuations in demand for their products based on economic and geopolitical conditions, consumer demand, raw material and energy costs, foreign exchange rates, and government actions. Many of these factors are beyond our control.
In addition, we operate in communities around the world, and social issues in the communities where we operate could affect our ability to maintain our operations; furthermore, incidents related to our industry could generate negative publicity and impact the social acceptability of our operations in such locations, including by damaging our reputation, our relationships with stakeholders, and our competitive position.
In addition, we operate in communities around the world, and social issues in the communities where we operate have affected and could continue to affect our ability to maintain our social license to operate; furthermore, incidents related to our industry have generated and could continue to generate negative publicity and impact the social acceptability of our operations in such locations, including by damaging our reputation, our relationships with stakeholders, and our competitive position.
Examples of such factors include, but are not limited to, evolving legal, regulatory, and other standards, processes, and assumptions, the pace of scientific and technological developments, increased costs, the availability of requisite financing, and changes in carbon markets.
Examples of such factors include, but are not limited to, evolving legal, regulatory, and other standards, processes, and assumptions, the pace of scientific and technological developments, increased costs, the availability of requisite suppliers, energy sources, or financing, and changes in carbon markets.
Though we are investing in technology to reduce the production of greenhouse gases in the manufacture of our products, such as our ELYSIS joint venture aluminum smelting technology and other technologies that limit the production of carbon in alumina refining, in certain aspects of our operations, our ability to reduce our greenhouse gas emissions is also dependent on the actions of third parties, especially energy providers, and our ability to make significant changes in our greenhouse gas emissions.
Though we are investing in technology to reduce the production of greenhouse gases in the manufacture of our products, such as our ELYSIS partnership aluminum smelting technology and other technologies that are designed to limit the production of carbon in alumina refining, in certain aspects of our operations, our ability to reduce our GHG emissions is also dependent on the actions of third parties, especially energy providers, and our ability to make significant changes in our GHG emissions.
In addition, cybersecurity incidents could negatively impact our reputation and competitive position, and could result in litigation with third parties, regulatory action, loss of business, theft of assets, and significant remediation costs, any of which could have a material adverse effect on our financial condition and results of operations.
In addition, some cybersecurity incidents could negatively impact our reputation and competitive position, and could result in litigation with third parties, regulatory action, loss of business, theft of assets, and significant remediation costs, and because of any of these things, have a material adverse effect on our financial condition and results of operations.
Events, such as those listed above, can result in high energy costs, the disruption of an energy source, finding a replacement energy source at a higher cost, the requirement to repay all or a portion of the benefit we received under a power supply interruptibility regime, or the requirement to remedy any non-compliance of an energy framework to comply with applicable laws.
Events, such as those listed above, have in the past and could in the future result in high energy costs, the disruption of an energy source, finding a replacement energy source at a higher cost, the requirement to repay all or a portion of the benefit we received under a power supply interruptibility regime, or the requirement to remedy any non-compliance of an energy framework to comply with applicable laws.
We are executing a strategy to be a low cost, competitive, and integrated aluminum production business by implementing productivity and cost-reduction initiatives, optimizing our portfolio of assets, and investing in technology to advance sustainably.
We are executing a strategy to be a low cost, competitive, and integrated aluminum production business by implementing productivity and cost-reduction initiatives, optimizing our portfolio of assets, and investing in technology to advance our climate-related ambitions.
Adverse capital market conditions could result in reductions in the fair value of plan assets and increase our liabilities related to such plans, adversely affecting our liquidity and results of operations. 27 Item 1B. Unresolved Staff Comments. None.
Adverse capital market conditions could result in reductions in the fair value of plan assets and increase our liabilities related to such plans, adversely affecting our liquidity and results of operations. Item 1B. Unresolve d Staff Comments. None. 30
Destabilizing effects that the ongoing conflict may pose for the global oil and natural gas markets could also adversely impact our operations by further increasing our energy costs.
Destabilizing effects that these ongoing regional conflicts may pose for the global oil and natural gas markets could also adversely impact our operations by further increasing our energy costs.
Several governments or regulatory bodies in areas where we operate, such as in Canada and the EU, have introduced or are contemplating legislative and regulatory change in response to the potential impacts of climate change, which could result in changes to the margins of greenhouse gas (GHG) intensive assets and energy-intensive assets.
Several governments or regulatory bodies in areas where we operate, such as in the United States, Asia, Brazil, Canada, and the EU, have introduced or are contemplating legislative and regulatory change in response to the potential impacts of climate change, which could result in changes to the margins of GHG intensive assets and energy-intensive assets.
In addition, further escalation of geopolitical tensions related to the conflict could result in loss of property, cyberattacks, additional supply disruptions, an inability to obtain key supplies and materials, reduced production and sales, and/or operational curtailments, and adversely affect our business and our supply chain. 21 Legal and Regulatory Risks We may be exposed to significant legal proceedings, investigations, or changes in foreign and/or U.S. federal, state, or local laws, regulations, or policies.
In addition, further escalation of geopolitical tensions related to such conflicts could result in loss of property, cyber attacks, additional supply disruptions, an inability to obtain key supplies and materials, reduced production and sales, and/or operational curtailments, and adversely affect our business and our supply chain. 23 Legal and Regulatory Risks We may be exposed to significant legal proceedings, investigations, or changes in foreign and/or U.S. federal, state, or local laws, regulations, or policies.
While global inventories declined in 2022, high LME inventories could lead to a reduction in the price of aluminum and declines in the LME price have had a negative impact on our business, financial condition, and results of operations.
While global inventories remained consistent in 2023, high inventories could lead to a reduction in the price of aluminum and declines in the LME price have had a negative impact on our business, financial condition, and results of operations.
Such intrusions could manipulate or improperly use our systems or networks, disclose, or compromise confidential or protected information, destroy, or corrupt data, or otherwise disrupt our operations, any of which could have a material adverse effect on our business, financial condition, and results of operations.
Some intrusions could manipulate or improperly use our systems or networks, disclose, or compromise confidential or protected information, destroy, or corrupt data, or otherwise disrupt our operations, and because of any of these things could have a material adverse effect on our business, financial condition, and results of operations.
Though we have been able to source our raw materials and other key inputs in adequate amounts from other suppliers or our own stockpiles to date, there can be no guarantee that our operations or profitability will not be adversely affected in the future. Our suppliers, vendors, and customers could experience similar constraints that could impact our operations and profitability.
Though we have been able to source our raw materials and other key inputs in adequate amounts from other suppliers or our own stockpiles to date, there can be no guarantee that our operations or profitability will not be adversely affected in the future.
Such adverse and uncertain economic conditions have exacerbated supply chain disruptions and increased our costs for energy, particularly in Spain, and for certain raw materials. During the first quarter of 2022, in response to the conflict, we ceased purchasing raw materials from and selling our products to Russian businesses.
Such adverse and uncertain economic conditions have exacerbated supply chain disruptions and increased our costs for energy, particularly in Spain, and for certain raw materials. In 2022, in response to the conflict between Russia and Ukraine, we ceased purchasing raw materials from and selling our products to Russian businesses.
Though we have disaster recovery and business continuity plans in place, if our information technology systems, or those of our third-party providers, are damaged, breached, interrupted, or cease to function properly for any reason, and, if the disaster recovery and business continuity plans do not effectively resolve the incident on a timely basis, we may suffer interruptions in our ability to manage or conduct business and we may be exposed to reputational, competitive and business harm as well as litigation and regulatory action, which may materially and adversely impact our business, financial condition, or results of operations. 24 Available Capital and Credit-Related Risks Our business and growth prospects may be negatively impacted by limits on our ability to fund capital expenditures.
Though we have disaster recovery and business continuity plans in place, if our information technology systems, or those of our third-party providers, are damaged, breached, interrupted, or cease to function properly for any reason, and, if the disaster recovery and business continuity plans do not effectively resolve the incident on a timely basis, we may suffer interruptions in our ability to manage or conduct business and we may be exposed to reputational, competitive and business harm as well as litigation and regulatory action, which may materially and adversely impact our business, financial condition, or results of operations.
Our business, financial condition and results of operations could be adversely affected by disruptions in the global economy caused by the ongoing conflict between Russia and Ukraine. The global economy has been negatively impacted by the conflict between Russia and Ukraine.
Our business, financial condition and results of operations could be adversely affected by disruptions in the global economy caused by ongoing regional conflicts. The global economy has been negatively impacted by ongoing regional conflicts, such as the conflict between Russia and Ukraine and the conflict in the Middle East.
The Company set each of the current dividend and new share repurchase program authorizations at a level it believes is sustainable throughout the commodity cycle, based on our current financial position and reasonable expectations of cash flow.
The Company set each of the current dividend and July 2022 authorizations at a level it believes is sustainable throughout the commodity cycle, based on our current financial position and reasonable expectations of cash flow.
These events could disrupt our operations or result in production curtailments that could have a material adverse effect on our business, financial condition or results of operations.
These events have disrupted our operations and resulted in production curtailments that could have a material adverse effect on our business, financial condition or results of operations.
As techniques used in cyber attacks change frequently and may not be immediately detectable, we may be unable to anticipate or detect these techniques, such as use of a zero-day exploit or unknown malware, immediately identify the scope and impact of an incident, contain the incident within our systems, or implement preventative or remediation measures.
As techniques used in cyber attacks change frequently and may not be immediately detectable, we may be unable to anticipate or detect these techniques, such as use of a zero-day exploit or unknown malware, immediately identify the scope and impact of an incident, contain the incident within our systems, or implement preventative or remediation measures., which may have a material adverse effect on our business, financial condition, and results of operations.
For 2023, we project capital expenditures of $600 million, of which $485 million is for sustaining capital and $115 million for return-seeking capital. If our technology research and development projects prove feasible with an acceptable expected rate of return, our capital expenditures for return-seeking projects would increase significantly over the next several years.
For 2024, we project capital expenditures of $550, of which $460 is for sustaining capital projects and $90 is for return-seeking capital projects. If our technology research and development projects prove feasible with an acceptable expected rate of return, our capital expenditures for return-seeking projects would increase significantly over the next several years.
Business Strategy Risks We have incurred, and may incur in the future, significant costs associated with our strategy to be a lower cost, competitive, and integrated aluminum production business and we may not be able to realize the anticipated benefits from announced plans, programs, initiatives relating to our portfolio, capital investments, and developing technologies.
Our suppliers, vendors, and customers could experience similar constraints that could impact our operations and profitability. 19 Business Strategy Risks We have incurred, and may incur in the future, significant costs associated with our strategy to be a lower cost, competitive, and integrated aluminum production business and we may not be able to realize the anticipated benefits from announced plans, programs, initiatives relating to our portfolio, capital investments, and developing technologies.
The Notices also include claims for compounded interest on the tax amount totaling approximately $474 (A$707).
The Notices also included claims for compounded interest on the tax amount totaling approximately $481 (A$707).
Our indebtedness restricts our current and future operations, which could adversely affect our ability to respond to changes in our business and manage our operations, and failure to comply with the agreements relating to our outstanding indebtedness, including due to events beyond our control, could result in an event of default that could materially and adversely affect our business, financial condition, results of operations, or cash flows.
As a result of these factors, a downgrade of our credit ratings could have a materially adverse impact on our future operations, cash flows, and financial position. 26 Our indebtedness restricts our current and future operations, which could adversely affect our ability to respond to changes in our business and manage our operations, and failure to comply with the agreements relating to our outstanding indebtedness, including due to events beyond our control, could result in an event of default that could materially and adversely affect our business, financial condition, results of operations, or cash flows.
Unexpected or uncontrollable events or circumstances in any of the foreign markets in which we operate, including actions by foreign governments such as changes in foreign policy or fiscal regimes, termination of our leases or agreements with such foreign governments, increased government regulation, or forced curtailment or continuation of operations, could materially and adversely affect our business, financial condition, or results of operations. 16 We may be unable to obtain, maintain, or renew permits or approvals necessary for our mining operations, which could materially adversely affect our operations and profitability.
Unexpected or uncontrollable events or circumstances in any of the foreign markets in which we operate, including actions by foreign governments such as changes in foreign policy or fiscal regimes, termination of our leases or agreements with such foreign governments, increased government regulation, or forced curtailment or continuation of operations, could materially and adversely affect our business, financial condition, or results of operations.
We have been taking decisive actions to lower the cost base of our operations through procurement strategies for raw materials, labor productivity, improving operating performance, deploying Company-wide business process models, and reducing overhead costs. In 2019, the Company announced a five year strategic portfolio review of smelting and refining capacity.
We have been taking decisive actions to lower the cost base of our operations through procurement strategies for raw materials, labor productivity, improving operating performance, deploying Company-wide business process models, and reducing overhead costs.
The demand for aluminum is sensitive to, and impacted by, demand for the finished goods manufactured by our customers in industries, such as the commercial construction, transportation, and automotive industries, which may change as a result of changes in the global economy, foreign currency exchange rates, energy prices, or other factors beyond our control.
The demand for aluminum is sensitive to, and impacted by, demand for the finished goods manufactured by our customers in industries, such as the commercial construction, transportation, and automotive industries, which may change as a result of factors beyond our control.
Insufficient cash generation or capital project overruns may negatively impact our ability to fund as planned our sustaining and return-seeking capital projects, and such postponement in funding capital expenditures or inadequate funding to complete projects could result in operational issues.
Our ability to generate cash flows is affected by many factors, including market and pricing conditions. Insufficient cash generation or capital project overruns may negatively impact our ability to fund as planned our sustaining and return-seeking capital projects, and such postponement in funding capital expenditures or inadequate funding to complete projects could result in operational issues.
To the extent that further agreements are reached on a broader range of imports, or these tariffs and other trade actions result in a decrease in international demand for aluminum produced in the United States or otherwise negatively impact demand for our products, our business may be adversely impacted, and could further exacerbate aluminum and alumina price volatility and overall market uncertainty.
To the extent that further agreements are reached on a broader range of imports, or these tariffs and other trade actions result in a decrease in international demand for aluminum produced in the United States or otherwise negatively impact demand for our products, our business may be adversely impacted, and could further exacerbate aluminum and alumina price volatility and overall market uncertainty. 21 We are exposed to fluctuations in foreign currency exchange rates and interest rates, as well as inflation and other economic factors in the countries in which we operate.
This could have an adverse effect on our ability to secure expansions to our operations at all or in the expected timeframe, could significantly increase our cost of doing business, and could disrupt our operations. 19 In the United States, in recent years, the U.S. government has taken actions with respect to the implementation of significant changes to certain trade policies, including import tariffs and quotas, modifications to international trade policy, the withdrawal from or renegotiation of certain trade agreements, and other changes that have affect ed U.S. trade relations with other countries, any of which may require us to significantly modify our current business practices or may otherwise materially and adversely affect our business or those of our customers.
In the United States, in recent years, the U.S. government has taken actions with respect to the implementation of significant changes to certain trade policies, including import tariffs and quotas, modifications to international trade policy, the withdrawal from or renegotiation of certain trade agreements, and other changes that have affected U.S. trade relations with other countries, any of which may require us to significantly modify our current business practices or may otherwise materially and adversely affect our business or those of our customers.
Our mining operations are subject to extensive permitting and approval requirements. These include permits and approvals issued by various government agencies and regulatory bodies at the federal, state, and local levels of governments in the countries in which we operate.
These include permits and approvals issued by various government agencies and regulatory bodies at the federal, state, and local levels of governments in the countries in which we operate.
For example, in 2021, the European Commission proposed a Carbon Border Adjustment Mechanism (CBAM) as a levy on carbon-intensive imports, which was provisionally approved in December 2022 and would include aluminum in the first phase of implementation beginning in 2023.
For example, in 2021, the European Commission proposed a Carbon Border Adjustment Mechanism (CBAM) as a levy on carbon-intensive imports, which was provisionally approved in December 2022.
Regional premiums tend to vary based on the supply of and demand for metal in a particular region, associated transportation costs, and import tariffs. Product premiums generally are a function of supply and demand for a given primary aluminum shape and alloy combination in a particular region. Periods of industry overcapacity may also result in a weak aluminum pricing environment.
Product premiums generally are a function of supply and demand for a given primary aluminum shape and alloy combination in a particular region. Periods of industry overcapacity may also result in a weak aluminum pricing environment.
The major credit rating agencies evaluate our creditworthiness and give us specified credit ratings. These ratings are based on a number of factors, including our financial strength and financial policies as well as our strategies, operations, and execution of announced actions.
These ratings are based on a number of factors, including our financial strength and financial policies as well as our strategies, operations, and execution of announced actions.
Also, changes in the aluminum market can cause changes in the alumina and bauxite markets, which could also materially affect our business, financial condition, or results of operations. As a result of these factors, our profitability is subject to significant fluctuation.
Also, changes in the aluminum market can cause changes in the alumina and bauxite markets, which could also materially affect our business, financial condition, or results of operations.
Additionally, in the current competitive labor market, if we lose critical or a significant number of workers to attrition, it may be difficult or costly to find and recruit replacement employees, which could have a material adverse effect on our business, financial condition, and results of operations.
Additionally, in the current competitive labor market, if we lose critical or a significant number of workers to attrition, it may be difficult or costly to find and recruit replacement employees, which could have a material adverse effect on our business, financial condition, and results of operations. 29 A decline in the liability discount rate, lower-than-expected investment return on pension assets and other factors could affect our business, financial condition, results of operations, or amount of pension funding contributions in future periods.
To date, these actions have not had a material adverse impact on the Company’s business, financial condition and results of operations, but they could have material negative impacts if the conflict continues and global sales of our products are impacted.
To date, these actions and other ongoing regional conflicts and responses have not had a material adverse impact on the Company’s business, but they could have material negative impacts if the conflicts continue and global sales of our products are affected.
We have in the past experienced attempts and incidents by external parties to penetrate our and our service providers or business partners networks and systems. Such attempts and incidents to date have not resulted in any material breaches, disruptions, or loss of information.
We have in the past experienced attempts and incidents by external parties to penetrate our and our service providers or business partners networks and systems.
We continue to assess potential cyber threats and invest in our information technology infrastructure to address these threats, including by monitoring networks and systems, training employees on cyber threats, and enhancing security policies of the Company and its third-party providers.
Such attempts and incidents to date have not had a material adverse effect on our business, financial condition, or results of operations We continue to assess potential cyber threats and invest in our information technology infrastructure to address these threats, including by monitoring networks and systems, training employees on cyber threats, and enhancing security policies of the Company and its third-party providers.
Our domestic and international tax liabilities are dependent upon the distribution of profits among these different jurisdictions. Our tax expense includes estimates of additional tax that may be incurred for tax exposures and reflects various estimates and assumptions. The assumptions include assessments of future earnings of the Company that could impact the valuation of our deferred tax assets.
Our domestic and international tax liabilities are dependent upon the distribution of profits among the different jurisdictions in which we operate. Our tax expense includes estimates of additional tax that may be incurred for tax exposures and reflects various estimates and assumptions.
Additionally, any future payment of dividends or repurchases of our common stock could negatively impact our financial position and our ability to fund ordinary and existing operations, capital expenditures, the payment of taxes, and growth or other opportunities. 25 Deterioration in our credit profile or increases in interest rates could increase our costs of borrowing money and limit our access to the capital markets and commercial credit.
Additionally, any future payment of dividends or repurchases of our common stock could negatively impact our financial position and our ability to fund ordinary and existing operations, capital expenditures, the payment of taxes, and growth or other opportunities.
Our participation in increasingly competitive and complex global markets exposes us to risks, including legal and regulatory risks and changes in conditions beyond our control, that could adversely affect our business, financial condition, or results of operations.
The disruption of the market-driven balancing of the global supply and demand of aluminum, a resulting weak pricing environment and margin compression may adversely affect our business, financial condition, and results of operations. 17 Our participation in increasingly competitive and complex global markets exposes us to risks, including legal and regulatory risks and changes in conditions beyond our control, that could adversely affect our business, financial condition, or results of operations.
From time to time, we establish strategies and expectations related to climate change and other environmental matters. Our ability to achieve any such strategies or expectations is subject to numerous factors and conditions, many of which are outside of our control.
Our ability to achieve any such strategies or expectations is subject to numerous factors and conditions, some of which are outside of our control.
A decline in consumer and business confidence and spending, severe reductions in the availability and cost of credit, and volatility in the capital and credit markets could adversely affect the business and economic environment in which we operate and the profitability of our business. We are also exposed to risks associated with the creditworthiness of our suppliers and customers.
As a result of these factors, our profitability is subject to significant fluctuation. 16 A decline in consumer and business confidence and spending, severe reductions in the availability and cost of credit, and volatility in the capital and credit markets could adversely affect the business and economic environment in which we operate and the profitability of our business.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeSummary of Attributable Bauxite Mineral Reserves at December 31, 2022: Proven Probable Total Property (Region) Tonnage (mdmt) (1) Alumina (%) Silica (%) Tonnage (mdmt) (1) Alumina (%) Silica (%) Tonnage (mdmt) (1) Alumina (%) Silica (%) Darling Range (2) 145.8 31.4 1.2 255.8 32.4 1.2 401.6 32.1 1.2 Juruti (Pará State) (3) 48.6 47.6 3.5 36.8 46.4 3.4 85.4 47.1 3.5 Poços de Caldas (Minas Gerais) (4) 1.1 39.6 3.7 1.8 38.8 4.0 3.0 39.1 3.9 Boké (Sangaredi) (5) 79.0 47.0 1.9 4.1 49.3 2.5 83.1 47.1 1.9 Al Ba’itha (Al Qassim) (6) 17.2 50.0 8.1 31.0 46.7 10.4 48.2 47.9 9.5 (1) The reference point for the mineral reserve is the refinery processing plant gate, with crushing, washing (as applicable), and transportation being the only process employed.
Biggest changeSummary of Attributable Bauxite Mineral Reserves at December 31, 2023: Proven Probable Total Property (Region) Tonnage (mdmt) (1) Alumina (%) Silica (%) Tonnage (mdmt) (1) Alumina (%) Silica (%) Tonnage (mdmt) (1) Alumina (%) Silica (%) Darling Range (2) 48.0 29.1 1.6 296.0 31.9 1.3 344.1 31.5 1.3 Juruti (Pará State) (3) 46.2 47.6 3.5 34.7 46.3 3.5 80.9 47.1 3.5 Poços de Caldas (Minas Gerais) (4) 0.9 41.1 3.4 1.8 38.9 3.9 2.7 39.6 3.8 Boké (Sangaredi) (5) 76.5 47.0 1.9 3.8 48.9 2.5 80.3 47.1 1.9 Al Ba’itha (Al Qassim) (6) 16.3 50.0 8.2 30.9 46.8 10.3 47.3 47.9 9.6 (1) This table shows only the AWAC and/or Alcoa share (proportion) of mineral reserves.
Alcoa owns active mines and plants classified under the Bauxite, Alumina, and Aluminum segments of its business. These include facilities and assets around the world used for Alcoa’s bauxite mining, alumina refining, aluminum smelting, and casting production and energy generation. Capacity and utilization of these facilities varies by segment and the level of demand for each product.
Alcoa owns active mines and plants classified under the Alumina and Aluminum segments of its business. These include facilities and assets around the world used for Alcoa’s bauxite mining and alumina refining, aluminum smelting and casting production, and energy generation. Capacity and utilization of these facilities varies by segment and the level of demand for each product.
The ML1SA area includes sub-lease arrangements made between Alcoa and the Worsley Alumina joint venture participants. The agreements, made in August 2001 and September 2016, provide bauxite mining concessions to the Worsley Participants. No mineral resources or mineral reserves attributable to the Darling Range mining areas have been declared within these sub-lease areas.
The ML1SA area includes sub-lease arrangements made between Alcoa and the Worsley Alumina joint venture participants (the Worsley Participants). The agreements, made in August 2001 and September 2016, provide bauxite mining concessions to the Worsley Participants. No mineral resources or mineral reserves attributable to the Darling Range mining areas have been declared within these sub-lease areas.
As discussed above, management relies on estimates for our mineral reserves and these estimates could change due to a number of factors, including future changes in: permitting requirements, geological conditions, ongoing mine planning, macroeconomic and industry conditions, and regulatory disclosure requirements. See Part I Item 1A of this Form 10-K for more information on risks. 39
As discussed above, management relies on estimates for our mineral reserves and these estimates could change due to a number of factors, including future changes in: permitting requirements, geological conditions, ongoing mine planning, macroeconomic and industry conditions, and regulatory disclosure requirements. See Part I Item 1A of this Form 10-K for more information on risks.
After completion of mining, overburden is progressively backfilled into adjacent exhausted pits, topsoiled, and rehabilitated by re-establishment of native vegetation, creating a stable post-mining landform that replicates the pre-existing environment. 35 The process plant for the Darling Range operations consists of two separate crushing facilities at the Huntly and Willowdale mines, respectively.
After completion of mining, overburden is progressively backfilled into adjacent exhausted pits, topsoiled, and rehabilitated by re-establishment of native vegetation, creating a stable post-mining landform that replicates the pre-existing environment. The process plant for the Darling Range operations consists of two separate crushing facilities at the Huntly and Willowdale mines, respectively.
Further, mineral resources are estimated using a long-term bauxite price of approximately $35 (wet-base) per ton, representing a 30% increase over the mineral reserve bauxite price. 31 ( 4 ) Alumina for Poços de Caldas is stated as Available Alumina (as A.Al 2 O 3 ) and Silica is stated as Reactive Silica (as R. SiO 2 ).
Further, mineral resources are estimated using a long-term bauxite price of approximately $35 (wet-base) per ton, representing a 30% increase over the mineral reserve bauxite price. 35 (4) Alumina for Poços de Caldas is stated as Available Alumina (as A.Al 2 O 3 ) and Silica is stated as Reactive Silica (as R.SiO 2 ).
At Juruti there are three continuous mining concessions for an aggregated 29,410 hectares (ha), where current mineral reserves are determined. Brazilian mineral legislation does not limit the duration of mining concessions and instead the concession remains in force until the deposit is exhausted.
At Juruti there are three continuous mining concessions for an aggregated 29,410 ha, where current mineral reserves are determined. Brazilian mineral legislation does not limit the duration of mining concessions and instead the concession remains in force until the deposit is exhausted.
The Kwinana refinery, also supplied by Huntly, is approximately 50 km northwest of Huntly in the city of Kwinana, approximately 40 km south of Perth. The Wagerup refinery, supplied by Willowdale, is located immediately adjacent to the west of the South Western Highway, approximately 8 km south of Waroona and 20 km west of the Willowdale mining area.
The Kwinana refinery, also supplied by Huntly, is approximately 50 km northwest of Huntly in the city of Kwinana, approximately 40 km south of Perth. The Wagerup refinery, supplied by Willowdale, is located immediately adjacent to the east of the South Western Highway, approximately 8 km south of Waroona and 20 km west of the Willowdale mining area.
See Part I Item 1 of this Form 10-K for additional information, including the ownership, capacity, and utilization of these facilities, used in the Alumina and Aluminum segments. A discussion of our bauxite mining properties is below. The following map shows the locations of our operations as of December 31, 2022: Alcoa Locations and Properties.
See Part I Item 1 of this Form 10-K for additional information, including the ownership, capacity, and utilization of these facilities, used in the Alumina and Aluminum segments. A discussion of our bauxite mining properties is below. The following map shows the locations of our operations as of December 31, 2023: Alcoa Locations and Properties.
TYPE 1: In-situ laterization of Ordovician and Devonian plateau sediments locally intruded by dolerite dikes and sills. TYPE 2: Sangaredi type deposits are derived from clastic deposition of material eroded from the TYPE 1 laterite deposits and possibly some of the proliths from the TYPE 1 plateaus deposits. N/A Ore crushed and dried at Kamsar port facilities.
TYPE 1: In-situ laterization of Ordovician and Devonian plateau sediments locally intruded by dolerite dikes and sills. TYPE 2: Sangaredi type deposits are derived from clastic deposition of material eroded from the TYPE 1 laterite deposits and possibly some of the protoliths from the TYPE 1 plateaus deposits. N/A Ore crushed and dried at Kamsar port facilities.
Darling Range is owned and operated by Alcoa through AofA. 32 All spatial data used for mineral resource and reserve estimation are reported using a local grid based on Australian Map Grid 1984 system (Zone 50) and using the Australian Geodetic Datum 1984 coordinate set.
Darling Range is owned and operated by Alcoa through AofA. 36 All spatial data used for mineral resource and reserve estimation are reported using a local grid based on Australian Map Grid 1984 system (Zone 50) and using the Australian Geodetic Datum 1984 coordinate set.
Related mining operations are not material to the Company’s business or financial condition after consideration of both quantitative and qualitative factors assessed in the context of the Company’s overall business and financial condition. The following tables summarize certain information regarding our bauxite mining properties.
Related mining operations were not material to the Company’s business or financial condition after consideration of both quantitative and qualitative factors assessed in the context of the Company’s overall business and financial condition. The following tables summarize certain information regarding our bauxite mining properties.
The approximate coordinates of the mining areas are 410,000 meters (m) East and 6,390,000 m North (Huntly) and 410,000 m East and 6,365,000 m North (Willowdale). 33 Darling Range Location, Lease Area, Mining Centers, and Mining Regions Refer to the Darling Range TRS in Sections 2.0 through 5.0 for more information on the Darling Range mining centers – their history, location, accessibility, and other relevant details.
The approximate coordinates of the mining areas are 410,000 m East and 6,390,000 m North (Huntly) and 410,000 m East and 6,365,000 m North (Willowdale). 37 Darling Range Location, Lease Area, Mining Centers, and Mining Regions Refer to the Darling Range TRS in Sections 2.0 through 5.0 for more information on the Darling Range mining centers – their history, location, accessibility, and other relevant details.
Reference should be made to the full text of the Technical Report Summary for Darling Range, Western Australia, dated February 23, 2023, with an effective date of December 31, 2022, filed as Exhibit 96.1 to this Form 10-K (the Darling Range TRS), and the Technical Report Summary for Juruti, Brazil, dated February 24, 2022, with an effective date of December 31, 2021, incorporated by reference as Exhibit 96.2 to this Form 10-K (the Juruti TRS), which are incorporated by reference herein. 29 Bauxite Interests and Operators: Property (Region) Access/Transportation Operator Owners’ Mining Rights (1) Expiration Date of Mining Rights Titles, Rights, Leases or Options Area (hectares) Darling Range (2) (WA) Accessed by road.
Reference should be made to the full text of the Technical Report Summary for Darling Range, Western Australia, dated February 21, 2024, with an effective date of December 31, 2023, filed as Exhibit 96.1 to this Form 10-K (the Darling Range TRS), and the Technical Report Summary for Juruti, Brazil, dated February 24, 2022, with an effective date of December 31, 2021, incorporated by reference as Exhibit 96.2 to this Form 10-K (the Juruti TRS), which are incorporated by reference herein. 33 Bauxite Interests and Operators: Property (Region) Access/Transportation Operator Owners’ Mining Rights (1) Expiration Date of Mining Rights Titles, Rights, Leases or Options Area (hectares) Darling Range (2) (WA) Accessed by road.
Commercial exploration took place from 1957 by Western Mining Corporation Ltd (WMC, later WANL), across a large portion of southwest Western Australia within a Special Mineral Lease (ML1SA) granted in 1961. Commercial mining first took place within the Darling Range in 1963 at the former Jarrahdale mining center with WANL having joined with Alcoa.
Commercial exploration took place from 1957 by Western Mining Corporation Ltd (later Western Australia NL, or WANL), across a large portion of southwest Western Australia within a Special Mineral Lease (ML1SA) granted in 1961. Commercial mining first took place within the Darling Range in 1963 at the former Jarrahdale mining center with WANL having joined with Alcoa.
Ore transported via long-distance conveyor and rail to refineries. AofA 100% 2024 (5) Mining lease from the WA Government. ML1SA. 702,261 Juruti (3) (Pará State) Accessed by road from Juruti town, by boat along the Amazon River, or by air from Juruti Airport. Ore transported from the mine to Juruti port by company-operated rail.
Ore transported via long-distance conveyor and rail to refineries. AofA 100% 2045 Mining lease from the WA Government. ML1SA. 702,261 Juruti (3) (Pará State) Accessed by road from Juruti town, by boat along the Amazon River, or by air from Juruti Airport. Ore transported from the mine to Juruti port by company-operated rail.
Item 2. Properties. Alcoa Corporation’s principal executive office, located at 201 Isabella Street, Suite 500, Pittsburgh, Pennsylvania 15212-5858, is leased. Alcoa also leases several office facilities and sites, both domestically and internationally. In addition, Alcoa owns or has an ownership interest in its production sites, both domestically and internationally.
Item 2. P roperties. Alcoa Corporation’s principal executive office, located at 201 Isabella Street, Suite 500, Pittsburgh, Pennsylvania 15212-5858, is leased. Alcoa also leases several office facilities and sites, both domestically and internationally. In addition, Alcoa owns or has an ownership interest in its production sites, both domestically and internationally.
Regardless of the level of QA/QC, all sites have well established and documented sampling and analysis regimes. QA/QC practices and available data is reviewed by a qualified person.
Regardless of the level of QA/QC, all sites have well established and documented sampling and analysis regimes. QA/QC practices and available data are reviewed by a qualified person.
The Huntly and Willowdale mines commenced commercial production in 1972 and 1984, respectively. Huntly supplies bauxite to the Kwinana and Pinjarra refineries (approximately 25 Mtpa), while Willowdale supplies the Wagerup refinery (approximately 10 Mtpa). 34 The ML1SA lease allows for exploration and mining of bauxite within the tenement boundaries.
The Huntly and Willowdale mines commenced commercial production in 1972 and 1984, respectively. Huntly currently supplies bauxite to the Kwinana and Pinjarra refineries (approximately 25 Mtpa), while Willowdale supplies the Wagerup refinery (approximately 10 Mtpa). 38 The ML1SA lease allows for exploration and mining of bauxite within the tenement boundaries.
As of December 31, 2022, the Company’s individually material mining properties, as determined in accordance with subpart 1300 of Regulation S-K, are our bauxite mining properties in the Darling Range of Western Australia (Darling Range) and Juruti, Brazil (Juruti). 28 As used in this Form 10-K, the terms “mineral resource,” “measured mineral resource,” “indicated mineral resource,” “inferred mineral resource,” “mineral reserve,” “proven mineral reserve” and “probable mineral reserve” are defined and used in accordance with subpart 1300 of Regulation S-K.
As of December 31, 2023, the Company’s individually material mining properties, as determined in accordance with subpart 1300 of Regulation S-K, are our bauxite mining properties in the Darling Range of Western Australia (Darling Range) and Juruti, Brazil (Juruti). 32 As used in this Form 10-K, the terms “mineral resource,” “measured mineral resource,” “indicated mineral resource,” “inferred mineral resource,” “mineral reserve,” “proven mineral reserve” and “probable mineral reserve” are defined and used in accordance with subpart 1300 of Regulation S-K.
Alcoa pays rent for each square mile of ML1SA in accordance with the Alumina Refinery Agreement Act 1961 (WA), providing exclusive rights to explore for and mine bauxite on all Crown Land within the ML1SA. The current lease covers an area of 702,261 hectares (ha).
Alcoa pays rent for each square mile of ML1SA in accordance with the Act 1961, providing exclusive rights to explore for and mine bauxite on all Crown Land within the ML1SA. The current lease covers an area of 702,261 hectares (ha).
Individual Property Disclosure—Darling Range Property Location and Description The Darling Range bauxite deposits comprise the mining centers of (i) Huntly, located approximately 80 kilometers (km) to the southeast of Perth and 30 km east of Pinjarra, Western Australia, Australia, and (ii) Willowdale, located approximately 100 km south-southeast of Perth and 15 km east of Waroona, Western Australia, Australia.
Individual Property Disclosure—Darling Range Property Location and Description The Darling Range bauxite deposits comprise the mining centers of (i) Huntly, located approximately 80 kilometers (km) to the southeast of Perth and 30 km northeast of Pinjarra, Western Australia, Australia, and (ii) Willowdale, located approximately 100 km south-southeast of Perth and 20 km southeast of Waroona, Western Australia, Australia.
Both facilities crush the run of mine (ROM) ore and convey the crushed ore to three separate refineries located at Pinjarra , Kwinana , and Wagerup . The Pinjarra refinery is located adjacent to the east of the town of Pinjarra and is approximately 25 km southwest of the Huntly mining areas.
Both facilities crush the ROM ore and convey the crushed ore to three separate refineries located at Pinjarra, Kwinana, and Wagerup. The Pinjarra refinery is located adjacent to the east of the town of Pinjarra and is approximately 30 km southwest of the Huntly mining areas.
Summary of Attributable Annual Bauxite Production (mdmt) for the years ended December 31, 2022, 2021, and 2020, respectively: Country Property (Region) 2022 2021 2020 Australia Darling Range (Western Australia, WA) 31.4 34.7 34.8 Brazil Juruti (Pará State) 4.9 5.8 6.1 Brazil Trombetas (Pará State) (1) 0.5 2.0 2.1 Brazil Poços de Caldas (Minas Gerais) 0.4 0.4 0.2 Guinea Boké (Sangaredi) 3.6 3.5 3.6 Saudi Arabia Al Ba’itha (Al Qassim) 1.3 1.2 1.2 42.1 47.6 48.0 (1) Represents production prior to the Company’s sale of its interest in the MRN property on April 30, 2022.
Summary of Attributable Annual Bauxite Production (mdmt) for the years ended December 31, 2023, 2022, and 2021, respectively: Country Property (Region) 2023 2022 2021 Australia Darling Range (Western Australia, WA) 30.9 31.4 34.7 Brazil Juruti (Pará State) 5.0 4.9 5.8 Brazil Trombetas (Pará State) (1) — 0.5 2.0 Brazil Poços de Caldas (Minas Gerais) 0.4 0.4 0.4 Guinea Boké (Sangaredi) 3.6 3.6 3.5 Saudi Arabia Al Ba’itha (Al Qassim) 1.1 1.3 1.2 41.0 42.1 47.6 (1) Amounts shown for the years ended December 31, 2022 and 2021, represent production prior to the Company’s sale of its interest in the MRN mine in April 2022.
(2) For more information, see “Individual Property Disclosure—Darling Range” below. (3) For more information, see “Individual Property Disclosure—Juruti” below. (4) Brazilian mineral legislation does not limit the duration of mining concessions; rather, the concession remains in force until the deposit is exhausted.
(2) For more information, see Individual Property Disclosure—Darling Range below. (3) For more information, see Individual Property Disclosure—Juruti below. (4) Brazilian mineral legislation does not limit the duration of mining concessions; rather, the concession remains in force until the deposit is exhausted.
Summary of Attributable Bauxite Mineral Resources at December 31, 2022: Measured Indicated Measured + Indicated Inferred Property (Region) Tonnage (mdmt) ( 1) Alumina (%) Silica (%) Tonnage (mdmt) ( 1) Alumina (%) Silica (%) Tonnage (mdmt) ( 1) Alumina (%) Silica (%) Tonnage (mdmt) ( 1) Alumina (%) Silica (%) Darling Range (WA) ( 2) 44.9 31.2 1.2 51.8 31.4 1.2 96.7 31.3 1.2 140.3 32.9 1.3 Juruti (Pará State) ( 3) 5.7 44.5 5.3 58.6 45.3 4.4 64.2 45.3 4.5 563.7 45.7 4.7 Poços de Caldas (Minas Gerais) ( 4) 2.5 38.3 4.7 10.7 36.9 5.6 13.2 37.1 5.5 21.4 35.2 5.9 Boké (Sangaredi) ( 5) — — — 1,350.7 46.6 2.3 1,350.7 46.6 2.3 168.1 45.8 2.4 Al Ba’itha (Al Qassim) ( 6) — — — — — — — — — 0.7 48.3 11.7 (1) This table shows only the AWAC and/or Alcoa share (proportion) of mineral resources.
Summary of Attributable Bauxite Mineral Resources Exclusive of Mineral Reserves at December 31, 2023: Measured Indicated Measured + Indicated Inferred Property (Region) Tonnage (mdmt) (1) Alumina (%) Silica (%) Tonnage (mdmt) (1) Alumina (%) Silica (%) Tonnage (mdmt) (1) Alumina (%) Silica (%) Tonnage (mdmt) (1) Alumina (%) Silica (%) Darling Range (WA) (2) 93.0 30.4 1.5 105.4 30.8 1.3 198.4 30.6 1.4 106.9 32.3 1.2 Juruti (Pará State) (3) 5.7 44.5 5.3 58.5 45.3 4.4 64.2 45.3 4.5 563.6 45.7 4.7 Poços de Caldas (Minas Gerais) (4) 2.4 39.0 4.7 10.6 37.1 5.6 13.1 37.4 5.5 21.4 35.2 5.9 Boké (Sangaredi) (5) — — — 1,350.7 46.6 2.3 1,350.7 46.6 2.3 168.1 45.8 2.4 Al Ba’itha (Al Qassim) (6) — — — — — — — — — 0.7 48.3 11.7 (1) This table shows only the AWAC and/or Alcoa share (proportion) of mineral resources.
The required infrastructure includes the following: • Rail siding and loading equipment; • Bauxite beneficiation plant for ore crushing and washing; • Mine waste facilities including tailings thickening lagoons and tailings disposal ponds; • ROM and product stockpiles and materials handling conveyors; • Ancillary buildings (offices, warehouses, laboratory, workshops); • Fuel station; • Water supply intake raft, pumps, and approximate 9 km pipeline from the Juruti Grande stream; • Power generation via thermoelectric units at the mine and port; • Surface water management including drainage channels and pumps; • Off-site rail corridor between the mine and port; and, • Port facilities including rail siding, material handling equipment, ship loader.
The required infrastructure includes the following: • Rail siding and loading equipment; • Bauxite beneficiation plant for ore crushing and washing; • Mine waste facilities including tailings thickening lagoons and tailings disposal ponds; • ROM and product stockpiles and materials handling conveyors; • Ancillary buildings (offices, warehouses, laboratory, workshops); • Fuel station; • Water supply intake raft, pumps, and approximate 9 km pipeline from the Juruti Grande stream; • Power generation via thermoelectric units at the mine and port; • Surface water management including drainage channels and pumps; • Off-site rail corridor between the mine and port; and, • Port facilities including rail siding, material handling equipment, ship loader. 41 The Juruti mining area is connected to Juruti town and port facilities by a road that joins to the PA-257 road near the town, and a dedicated railway between the mining area and port.
Fine materials removed from ore are deposited in a thickening pond for settling and water reclamation, after which solid tailings are discarded into separate tailings ponds.
Fine materials removed from ore are deposited in a thickening pond for settling and water reclamation, after which solid tailings are discarded into separate tailings ponds. There is currently one thickening pond and seven disposal ponds.
Alcoa’s Darling Range mining operations do not produce mine waste in the same manner as conventional mining operations and waste dumps are not constructed. Alcoa’s Darling Range facilities are in a well-maintained condition. Net book value of these facilities for the year-ended 2022 is $434 million included in Properties, plants, and equipment, net on the Consolidated Balance Sheet.
Alcoa’s Darling Range mining operations do not produce mine waste in the same manner as conventional mining operations and waste dumps are not constructed. Alcoa’s Darling Range facilities are in a well-maintained condition. Net book value of these facilities as of December 31, 2023 of $517 is included in Properties, plants, and equipment, net on the Consolidated Balance Sheet.
Outcomes of and compliance with the management and monitoring programs are tracked within Alcoa’s Environmental Management System and reported within the Annual Environmental Review report. Refer to the Darling Range TRS in Section 3.0 for more information on Land Permitting and Tenure for the Darling Range.
The Company has all environmental permits and operating licenses required for current mining activities. Outcomes of and compliance with the management and monitoring programs are tracked within Alcoa’s Environmental Management System and reported within the Annual Environmental Review report. Refer to the Darling Range TRS in Section 3.0 for more information on Land Permitting and Tenure for the Darling Range.
There is a company village with supporting facilities (1) For more information, see “Individual Property Disclosure—Darling Range Mines” below. (2) For more information, see “Individual Property Disclosure—Juruti” below.
There is a company village with supporting facilities (1) For more information, see Individual Property Disclosure—Darling Range Mines below. (2) For more information, see Individual Property Disclosure—Juruti below.
ML1SA was granted in 1961, by the State Government of Western Australia under the Alumina Refinery Act, 1961, for four 21-year periods, and the current lease expires on September 24, 2024.
ML1SA was granted in 1961, by the State Government of Western Australia under the Alumina Refinery Agreement Act, 1961 (the Act 1961), for four 21-year periods, and the current lease expires on September 24, 2045. The State Government concession agreement includes the provision for conditional renewal beyond 2045.
Following definition of mineral reserve blocks, vegetation is cleared after which Alcoa operations commence stripping topsoil and secondary overburden removal using small excavators, scrapers, and trucks. Soil is stockpiled at the site, away from the proposed pit, for rehabilitation purposes.
Mining and Processing The Huntly and Willowdale mines employ conventional open pit surface mining practices and equipment. Following definition of mineral reserve blocks, vegetation is cleared after which Alcoa operations commence stripping topsoil and secondary overburden removal using small excavators, scrapers, and trucks. Soil is stockpiled at the site, away from the proposed pit, for rehabilitation 39 purposes.
This report includes detailed descriptions of activities undertaken for the year and environmental and social monitoring. No significant compliance issues were identified in the 2020/2021 and 2021/2022 Annual Environmental Reports, although certain environmental incidents were recorded in December 2020 and February 2021 which involved siltation of downstream watercourses following extreme rainfall events.
No significant compliance issues were identified in the 2021/2022 and 2022/2023 Annual Environmental Reports, although certain environmental incidents were recorded in December 2020 and February 2021 which involved siltation of downstream watercourses following extreme rainfall events.
Juruti produces both a washed and unwashed bauxite product; however, all tonnage is presented on a zero-moisture basis. Bauxite processing takes place at a dedicated plant facility located at the Juruti mine site which has been operating since 2009 and comprises a simple comminution (crushing, screening) and washing circuit designed to remove fine particles from the ore.
Bauxite processing takes place at a dedicated plant facility located at the Juruti mine site which has been operating since 2009 and comprises a simple comminution (crushing, screening) and washing circuit designed to remove fine particles from the ore.
Refer to the Juruti TRS in Section 17.0 for more information on the environmental, social, compliance, and permitting aspects of the Juruti mine. Mineral Resources and Mineral Reserves For information on Juruti mineral resources and mineral reserves, refer to the tables above.
Refer to the Juruti TRS in Section 17.0 for more information on the environmental, social, compliance, and permitting aspects of the Juruti mine. Mineral Resources and Mineral Reserves For information on Juruti mineral resources and mineral reserves, refer to the tables above. For comparative purposes, measured and indicated mineral resources of 64.2 mdmt did not change from 2022.
Permits are granted by the ANM falls into two categories: • Exploration Permits: granted to support ongoing exploration activities. On submittal of an approved Exploration Report, the holder is then granted one year to present a Mining Plan as a precursor to obtaining a Mining Concession.
On submittal of an approved Exploration Report, the holder is then granted one year to present a Mining Plan as a precursor to obtaining a Mining Concession.
The nearest major city to Juruti is Santarem, approximately 160 km to the east and is only accessible by boat or by air from Juruti Airport (JRT) to Santarem-Maestro Wilson Fonseca Airport (STM).
There are very few major roads across the region and the only major road in this area is the PA-257. The nearest major city to Juruti is Santarem, approximately 160 km to the east and is only accessible by boat or by air from Juruti Airport (JRT) to Santarem-Maestro Wilson Fonseca Airport (STM).
There is currently one thickening pond and seven disposal ponds. 38 Refer to the Juruti TRS in Sections 12.0 and 13.0 for a detailed description of the mineral reserves and mining methods used in the Juruti mine. Environmental and Social Alcoa submits an Annual Environmental Report in compliance with the Juruti operating licenses and approvals.
Refer to the Juruti TRS in Sections 12.0 and 13.0 for a detailed description of the mineral reserves and mining methods used in the Juruti mine. Environmental and Social Alcoa submits an Annual Environmental Report in compliance with the Juruti operating licenses and approvals. This report includes detailed descriptions of activities undertaken for the year and environmental and social monitoring.
Internal controls used by the Company are informed by internal reviews, representation on Technical Committees of Joint Venture operations, and by reviews, audits, and studies performed by third-party mining consultants.
Internal Controls Alcoa has a long history of mining bauxite, with the majority of bauxite production having been used to supply Alcoa refineries. Internal controls used by the Company are informed by internal reviews, representation on Technical Committees of Joint Venture operations, and by reviews, audits, and studies performed by third-party mining consultants.
Constraints on mining activities within the ML1SA concession are in place, among others, which prevent mining within: 200 m of the top water level of drinking water reservoirs; National Parks; Aboriginal Heritage Sites; Old Growth Forest; formal Conservation Areas; and 50 m of granite outcrop (greater than 1 ha).
Constraints on mining activities within the ML1SA concession are in place, among others, which prevent mining within: 200 m of the top water level margin of any water reservoirs; Serpentine Pipehead Dam Catchment; 10 m of a Black Cockatoo nesting tree or Black Cockatoo significant tree; National Parks; Aboriginal Heritage Sites; Old Growth Forest; formal Conservation Areas; and 50 m of granite outcrop (greater than 1 ha), and Mining Avoidance Zones (MAZ) around the Western Australian forest towns of Dwellingup and Jarrahdale.
Refer to the Juruti TRS in Sections 6.0 through 11.0 for more information on the geology, mineralization, and exploration history of the Juruti mine, including QA/QC procedures and data used in the current mineral resource estimate.
Current mine plans include further exploration throughout all areas where Alcoa has mining permits to sustain future production. Refer to the Darling Range TRS in Sections 6.0 through 11.0 for more information on the geology, mineralization, and exploration history of the Darling Range, including Quality Assurance / Quality Control (QA/QC) procedures and data used in the current mineral resource estimate.
(2) Alumina for the Darling Range is stated as Available Alumina (as A.Al 2 O 3 ) and Silica is stated as Reactive Silica (as R.SiO 2 ). Further, mineral resources are estimated using a reasonable market expectation of arms-length sales of bauxite from Darling Range, approximately $21 per ton.
Further, mineral resources are estimated using a reasonable market expectation of arms-length sales of bauxite from Darling Range, approximately $21 per ton. Darling Range mineral resources are estimated at a ≥ 27.5% A.Al 2 O 3 and ≤3.5% R.SiO 2 cut-off grade and at a minimum mining thickness of 1.5 m.
Drillhole databases are all site specific; most sites use industry standard drillhole database software, applications, and processes with security and backup protocols in place. Prior to modelling, secondary validation and cleansing of the modelling datasets is performed. Wherever possible, data collection is digital to allow direct loading into the database.
Additional transport to internal or external laboratories is controlled and completed, as necessary, by Alcoa personnel or by courier. Drillhole databases are all site specific; most sites use industry standard drillhole database software, applications, and processes with security and backup protocols in place. Prior to modelling, secondary validation and cleansing of the modelling datasets is performed.
Darling Range mineral resources are estimated at a ≥ 27.5% A.Al 2 O 3 and ≤3.5% R.SiO 2 cut-off grade and at a minimum mining thickness of 1.5 m. (3) Alumina for Juruti is stated as Available Alumina (as A.Al 2 O 3 ) and Silica is stated as Reactive Silica (as R.SiO 2 ).
(3) Alumina for Juruti is stated as Available Alumina (as A.Al 2 O 3 ) and Silica is stated as Reactive Silica (as R.SiO 2 ). Juruti mineral resources are estimated at a pit discard cut-off value based on a benefit calculation that determines whether a block is economically viable and has a minimum thickness of 1 meter (m).
The Juruti bauxite mine represents an established mining operation which commenced commercial production of bauxite in 2009. 36 All spatial data used for the mineral resource and mineral reserve estimation are reported using a local grid based on SIRGAS 2000 (21S).
All spatial data used for the mineral resource and mineral reserve estimation are reported using a local grid based on SIRGAS 2000 (21S).
Individual Property Disclosure—Juruti Property Location and Description The Juruti bauxite mine is located in the west of Para State in northern Brazil. The mine is approximately 55 km south from the town of Juruti on the southern shore of the Amazon River. The mine is owned and operated by Alcoa through AWAB.
The mine is approximately 55 km south from the town of Juruti on the southern shore of the Amazon River. The mine is owned and operated by Alcoa through AWAB. The Juruti bauxite mine represents an established mining operation which commenced commercial production of bauxite in 2009.
These concessions may be extended later or expire earlier than estimated, based on the rate at which these deposits are exhausted and on obtaining any additional governmental approval, as necessary.
These concessions may be extended later or expire earlier than estimated, based on the rate at which these deposits are exhausted and on obtaining any additional governmental approval, as necessary. 34 Bauxite Mine Types and Facilities: Property (Region) Development Stage Type of Mine and Mineralization Processing Plant Other Facilities Darling Range (1) (WA) Production/ Operating Open-cut mines.
Mineral resource estimation is reviewed and adopted by a qualified person. Mineral reserve estimation is completed internally and reviewed by a qualified person, with the exception of Boké and Al Ba’itha where reserve estimation is completed by a third-party consultant.
Mineral reserve estimation is completed internally and reviewed by a qualified person, with the exception of Boké and Al Ba’itha where reserve estimation is completed by a third-party consultant. 43 Labelled samples from the drill site are securely transported for logging or temporary storage by the drilling contractor or Alcoa personnel.
Metallurgical recovery factors are not applicable to the mineral reserve estimate. ( 2 ) Alumina for the Darling Range is stated as Available Alumina (as A.Al 2 O 3 ) and Silica is stated as Reactive Silica (as R.SiO 2 ).
The metallurgical recovery of the three refineries (Kwinana, Pinjarra, and Wagerup) are beyond the boundaries of the mining operations. Certain totals may not sum due to rounding. (2) Alumina for the Darling Range is stated as Available Alumina (as A.Al 2 O 3 ) and Silica is stated as Reactive Silica (as R.SiO 2 ).
The reference point for the mineral resource is the in situ predicted dry tonnage and grade of material to be delivered to the refinery stockpile following the application of mining design parameters. Certain totals may not sum due to rounding.
The reference point for the mineral resource is the in situ predicted dry tonnage and grade of material to be delivered to the refinery stockpile following the application of mining design parameters. Metallurgical recovery factors are not applicable to the mineral resource estimate as the Darling Range operations do not include a conventional processing plant, only crushing.
The operation actively seeks to maintain lower noise levels than those mandated, thus mining in these areas is undertaken by contract miners using smaller equipment on day shifts only. The Company has all environmental permits and operating licenses required for current mining activities.
Mining on a day-only basis is conducted in “noise zones” where noise from the mining operations will potentially exceed allowable levels. The operation actively seeks to maintain lower noise levels than those mandated, thus mining in these areas is undertaken by contract miners on day shifts only.
Lateralization and subsequent periodic activity of the Darling Fault has resulted in the current landform of scarps and deeply incised valleys on the western edge of the Darling Range.
Lateralization and subsequent periodic activity of the Darling Fault has resulted in the current landform of scarps and deeply incised valleys on the western edge of the Darling Range. Systematic exploration for bauxite within the region commenced in the 1960s and is currently conducted on a continuous basis to maintain sufficient mineral resources and mineral reserves to meet refinery supply.
For comparative purposes, probable reserves were 36.8 mdmt and 37.7 mdmt for the years ended 2022 and 2021, respectively, representing a decrease of 2 percent. Proven reserves were 48.6 mdmt and 50.9 mdmt for the years ended 2022 and 2021, respectively, representing a decrease of 5 percent. The decrease in mineral reserves from 2021 reflects mining depletion during 2022.
Probable reserves were 34.7 mdmt and 36.8 mdmt as of December 31,2023 and 2022, respectively, representing a decrease of 6 percent. Mineral resources were consistent with 2022. The decrease in mineral reserves from December 31, 2022 reflects mining depletion during 2023. Refer to the Juruti TRS for more information on the mineral resources and mineral reserves of the Juruti mine.
Mining and Processing Juruti is an active mining operation using surface strip mining methods over a total of eight plateaus whereby land clearance, topsoil removal, and overburden stripping is followed by bauxite deposit excavation and stockpiling. Waste is subsequently backfilled, and overburden and topsoil are re-instated for surface rehabilitation.
Refer to the Juruti TRS in Sections 6.0 through 11.0 for more information on the geology, mineralization, and exploration history of the Juruti mine, including QA/QC procedures and data used in the current mineral resource estimate. 42 Mining and Processing Juruti is an active mining operation using surface strip mining methods over a total of eight plateaus whereby land clearance, topsoil removal, and overburden stripping is followed by bauxite deposit excavation and stockpiling.
Refer to the Juruti TRS in Sections 14.0 and 15.0 for more information on the surface infrastructure and facilities of the Juruti mine. 37 Land Tenure and Permitting All exploration and mining activities are managed by the National Mining Agency, Agencia Nacional de Mineracao (ANM), under the Mining Code (1967).
Land Tenure and Permitting All exploration and mining activities are managed by the National Mining Agency, Agencia Nacional de Mineracao (ANM), under the Mining Code (1967). Permits are granted by the ANM and fall into two categories: • Exploration Permits: granted to support ongoing exploration activities.
Net book value of these facilities for the year-ended 2022 is $464 million included in Properties, plants, and equipment, net on the Consolidated Balance Sheet.
Net book value of these facilities as of December 31, 2023 of $512 is included in Properties, plants, and equipment, net on the Consolidated Balance Sheet. Refer to the Juruti TRS in Sections 14.0 and 15.0 for more information on the surface infrastructure and facilities of the Juruti mine.
Refer to the Darling Range TRS in Section 17.0 for more information on the environmental, social, compliance, and permitting aspects of the Darling Range. Mineral Resources and Mineral Reserves For information on Darling Range mineral resources and mineral reserves, refer to the tables above.
Alcoa is modernizing its environmental approvals framework for the Huntly bauxite mine and referred future mining plans to access Myara North and Holyoake to the WA EPA for assessment in 2020. Refer to the Darling Range TRS in Section 17.0 for more information on the environmental, social, compliance, and permitting aspects of the Darling Range.
The Company has well-established QA/QC programs that are site specific and range from in-development to mature.
Wherever possible, data collection is digital to allow direct loading into the database. The Company has well-established QA/QC programs that are site specific.
Probable reserves were 255.8 mdmt and 132.7 mdmt for the years ended 2022 and 2021, respectively, representing an increase of 93 percent, and proven reserves were 145.8 mdmt and 108.6 mdmt for the years ended 2022 and 2021, respectively, representing an increase of 34 percent.
Probable reserves were 296.0 mdmt and 255.8 mdmt as of December 31, 2023 and 2022, respectively, representing an increase of 16 percent, and proven reserves were 48.0 mdmt and 145.8 mdmt as of December 31, 2023 and 2022, respectively, representing a decrease of 67 percent.
For comparative purposes, measured and indicated mineral resources were 96.7 mdmt and 82.8 mdmt for the years ended 2022 and 2021, respectively, representing an increase of 17 percent. Inferred mineral resources were 140.3 mdmt and 320.0 mdmt for the years ended 2022 and 2021, respectively, representing a decrease of 56 percent.
For information on Darling Range mineral resources and mineral reserves, refer to the tables above. For comparative purposes, measured and indicated mineral resources were 198.4 mdmt and 96.7 mdmt as of December 31, 2023 and 2022, respectively, representing an increase of 105 percent.
Mineral resources and mineral reserves have not been defined in these restricted areas. Mining on a day-only basis is conducted in “noise zones” where noise from the mining operations will potentially exceed allowable levels.
Mineral resources and mineral reserves have not been defined in these restricted areas.
Further mine planning work has allowed subsequent conversion of mineral resources to mineral reserves. The mineral reserves increase is mostly attributable to the conversion from mineral resources to mineral reserves, partially offset by mining depletion in 2022. Additionally, refer to the Darling Range TRS for more information on the mineral resources and mineral reserves of the Darling Range mines.
Additionally, refer to the Darling Range TRS Section 17.1 for more information on the mineral resources and mineral reserves of the Darling Range mines. 40 Individual Property Disclosure—Juruti Property Location and Description The Juruti bauxite mine is located in the west of Para State in northern Brazil.
Removed
(5) Prior to September 24, 2024, Alcoa will notify the State Government of Western Australia of its intention to exercise its right to renew for a further 21-year period to extend the concession to 2045.
Added
The reference point for the mineral reserve is the refinery processing plant gate, with crushing, washing (as applicable), and transportation being the only process employed. Metallurgical recovery factors are not applicable to the mineral reserve estimate as the Darling Range operations do not include a conventional processing plant, only crushing.
Removed
Subject to Alcoa having complied with the Alumina Refinery Agreement Act, 1961, the State Government will grant Alcoa the renewal. 30 Bauxite Mine Types and Facilities: Property (Region) Development Stage Type of Mine and Mineralization Processing Plant Other Facilities Darling Range (1) (WA) Production/ Operating Open-cut mines.
Added
The metallurgical recovery of the three refineries (Kwinana, Pinjarra, and Wagerup) are beyond the boundaries of the mining operations. Certain totals may not sum due to rounding. (2) Alumina for the Darling Range is stated as Available Alumina (as A.Al 2 O 3 ) and Silica is stated as Reactive Silica (as R.SiO 2 ).
Removed
Juruti mineral resources are estimated at a pit discard cut-off value based on a benefit calculation that determines whether a block is economically viable.
Added
Additionally, the 2023-2027 MMP requires additional constraints including: a reduction in mining activities inside higher risk areas within drinking water catchments; no new pit clearing in areas with an average pit slope greater than 16 percent within any Reservoir Protection Zone (RPZ, 2 km from reservoir top water level); an acceleration of forest rehabilitation and a reduction in open mining areas; and a maximum annual clearing footprint of 800 ha.
Removed
Prior to September 24, 2024, Alcoa will notify the State Government of Western Australia of its intention to exercise its right to renew for a further 21-year period to extend the concession to 2045. The State Government concession agreement includes the provision for conditional renewal beyond 2045.
Added
In December 2023, the Western Australian government granted a section 6 exemption under the Environmental Protection Act 1986 that allows Alcoa to continue its mining operations while the WA Environmental Protection Authority (EPA) assesses the environmental impact of parts of the MMP, following a third party’s referral of the Company’s future and existing mine plans in existing mine regions to the WA EPA in the first quarter of 2023.
Removed
Systematic exploration for bauxite within the region commenced in the 1960s and is currently conducted on a continuous basis to establish optimal mine plans to achieve a uniform quality of bauxite production. Current mine plans include further exploration throughout all areas where Alcoa has mining permits to sustain future production.
Added
Compliance against the section 6 exemption is monitored on a weekly basis by an independent compliance monitor and reported monthly to the Department of Water and Environmental Regulation.
Removed
Refer to the Darling Range TRS in Sections 6.0 through 11.0 for more information on the geology, mineralization, and exploration history of the Darling Range, including Quality Assurance / Quality Control (QA/QC) procedures and data used in the current mineral resource estimate. Mining and Processing The Huntly and Willowdale mines employ conventional open pit surface mining practices and equipment.
Added
At the request of the Western Australian government, the Company has committed to provide a bank guarantee for approximately $68 (A$100) demonstrating Alcoa’s confidence that its operations will not impair drinking water supplies.
Removed
The decrease in inferred mineral resources from 2021 is partially reflected in the increase in measured and indicated mineral resources (and the subsequent conversion to mineral reserves). The decrease is mostly attributable to the change to a 3D modelling method and the continued increased confidence through the continuous drilling program.
Added
Mineral Resources and Mineral Reserves In January 2024, Alcoa announced the full curtailment of the Kwinana refinery beginning in the second quarter of 2024. Current mine plans do not accommodate this curtailment but will be amended to include a staged reduction of supply to the refinery through the third quarter of 2024.
Removed
The Juruti mining area is connected to Juruti town and port facilities by a road that joins to the PA-257 road near the town, and a dedicated railway between the mining area and port. There are very few major roads across the region and the only major road in this area is the PA-257.
Added
Inferred mineral resources were 106.9 mdmt and 140.3 mdmt as of December 31, 2023 and 2022, respectively, representing a decrease of 24 percent.
Removed
Mineral resources were unchanged from 2021. Additionally, refer to the Juruti TRS for more information on the mineral resources and mineral reserves of the Juruti mine. Internal Controls Alcoa has a long history of mining bauxite, with the majority of bauxite production having been used to supply Alcoa refineries.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeEnvironmental Matters Alcoa is involved in proceedings under CERCLA and analogous state or other statutory or jurisdictional provisions regarding the usage, disposal, storage, or treatment of hazardous substances at a number of sites. The Company has committed to participate, or is engaged in negotiations with authorities relative to its alleged liability for participation, in clean-up efforts at several such sites.
Biggest changePursuant to these regulations, the Company uses a threshold of $1 for purposes of determining whether disclosure of any such proceedings is required. Alcoa is involved in proceedings under CERCLA and analogous state or other statutory or jurisdictional provisions regarding the usage, disposal, storage, or treatment of hazardous substances at a number of sites.
The costs of defense and settlement have not been and are not expected to be material to the results of operations, cash flows, and financial position of Alcoa Corporation. Item 4. Mine Safety Disclosures. Not applicable. 40 PART II
The costs of defense and settlement have not been and are not expected to be material to the results of operations, cash flows, and financial position of Alcoa Corporation. Item 4. Mine Saf ety Disclosures. Not applicable. 45 PART II
However, based on facts currently available, management believes that the disposition of these other matters that are pending or asserted will not have a material adverse effect, individually or in the aggregate, on the financial position of the Company.
However, based on facts currently available, management believes that the disposition of these other matters that are pending or asserted will not have a material adverse effect, individually or in the aggregate, on the financial position of the Company. St. Croix Proceedings - Abednego and Abraham cases .
The EPA has referred the matter to the U.S. Department of Justice, Environment and Natural Resources Division (the DOJ). The DOJ and the Company are engaged in discussions with respect to a resolution of this matter.
Department of Justice, Environment and Natural Resources Division (the DOJ). The DOJ and the Company are engaged in discussions with respect to a resolution of this matter.
The settlement does not have a material impact on the Company’s financial results. Intalco (Washington) Notice of Violation—In May 2022, the Company received a Notice of Violation (NOV) from the U.S. Environmental Protection Agency (the EPA). The NOV alleges violations under the Clean Air Act at the Company’s curtailed Intalco (Washington) smelter from when the smelter was operational.
Intalco (Washington) Notice of Violation—In May 2022, the Company received a Notice of Violation (NOV) from the U.S. Environmental Protection Agency (the EPA). The NOV alleges violations under the Clean Air Act at the Company’s curtailed Intalco (Washington) smelter from when the smelter was operational. The EPA has referred the matter to the U.S.
The most significant of these matters are discussed in Part II Item 8 of this Form 10-K in Note S to the Consolidated Financial Statements under the caption Contingencies.
The Company has committed to participate, or is engaged in negotiations with authorities relative to its alleged liability for participation, in clean-up efforts at several such sites. The most significant of these matters are discussed in Part II Item 8 of this Form 10-K in Note S to the Consolidated Financial Statements under the caption Contingencies.
Removed
In August 2005, Dany Lavoie, a resident of Baie-Comeau in the Canadian Province of Québec, filed a Motion for Authorization to Institute a Class Action and for Designation of a Class Representative against Alcoa Canada Ltd., Alcoa Limitée, Société Canadienne de Metaux Reynolds Limitée, and Canadian British Aluminum in the Superior Court of Québec in the District of Baie-Comeau, alleging that defendants, as the present and past owners and operators of an aluminum smelter in Baie-Comeau, had negligently allowed the emission of certain contaminants from the smelter on the lands and houses of the St.
Added
In January 2010, ParentCo was served with a multi-plaintiff action complaint involving several thousand individual persons claiming to be residents of St. Croix alleging personal injury or property damage from Hurricane Georges or winds blowing material from the St. Croix Alumina, L.L.C. (SCA) facility on the island of St. Croix (U.S. Virgin Islands). This complaint, Abednego, et al. v.
Removed
Georges neighborhood and its environs causing property damage and personal injury. In May 2007, the court authorized a class action suit on behalf of all people who suffered property or personal injury damages caused by the emission of polycyclic aromatic hydrocarbons from the Company’s aluminum smelter in Baie-Comeau. In September 2007, plaintiffs filed the claim against the original defendants.
Added
Alcoa, et al., which added the then current owners of the facility to a February 1999 action, was filed in the Superior Court of the Virgin Islands, St. Croix Division. In 2012, ParentCo was served with a separate multi-plaintiff action alleging claims essentially identical to those set forth in the Abednego v. Alcoa complaint.
Removed
The Soderberg smelting operations that plaintiffs allege to be the source of emissions of concern ceased operations in 2013 and have been dismantled. A court appointed expert, engaged to perform analysis of the potential impacts from the emissions in accordance with a sampling protocol agreed to by the parties, submitted its report to the court in May 2019.
Added
In 2015, the Superior Court dismissed all plaintiffs’ complaints without prejudice, permitting the plaintiffs to re-file the complaints individually. In 2017, the court issued an order that consolidated all timely complaints into the Red Dust Claims docket (Master Case No.: SX-15-CV-620).
Removed
In 2021, plaintiffs filed their amended claim and expert reports, and defendants filed their amended defense and expert reports. In October 2021, the parties participated in mediation. In March 2022, the parties reached a settlement for damages that is subject to court approval. On May 31, 2022, the court entered a judgement approving the settlement and formally concluding the litigation.
Added
Following this order, a total of approximately 430 complaints were filed and accepted by the court, which included claims of approximately 1,360 individuals. In November 2018, the Red Dust Claims docket was transferred to the Complex Litigation Division within the Superior Court of the Virgin Islands.
Added
At such time, the Company was unable to reasonably predict an outcome or to estimate a range of reasonably possible loss, and thereafter the Red Dust Claims docket became inactive for several years.
Added
The Court issued an amended case management order dividing the complaints filed in the Red Dust docket into groups of 50 complaints, designated Groups A though I in March 2022. The parties selected 10 complaints from Group A to proceed to trial as the Group A lead cases.
Added
In November 2023, the Court issued an amended case management order with regard to the Group A lead cases scheduling trials to begin in July 2024. Trials with regard to the Group A lead cases will continue through March 2025. Concurrently, the Court is considering discovery issues with respect to other group cases.
Added
The Company remains unable to reasonably predict an outcome or to estimate the range of reasonably possible loss in the Red Dust Claims docket cases. 44 Environmental Matters SEC regulations require disclosure of certain environmental matters when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions that the Company reasonably believes will exceed a specified threshold.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

9 edited+0 added−0 removed2 unchanged
Biggest changeDecember 31, 2017 2018 2019 2020 2021 2022 Alcoa Corporation $ 100 $ 49 $ 40 $ 43 $ 111 $ 85 S&P Metals & Mining Select Industry Index 100 74 85 99 134 152 S&P 400 Midcap Index 100 89 112 128 159 138 41 Issuer Purchases of Equity Securities Fourth Quarter 2022 Total Number of Shares Purchased Weighted Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value of Shares that May Yet be Purchased Under the Program (1) October 1 to October 31 - $ - - $ 500,000,000 November 1 to November 30 - - - 500,000,000 December 1 to December 31 - - - 500,000,000 Total - - - (1) On July 20, 2022, Alcoa Corporation announced that its Board of Directors approved an additional common stock repurchase program under which the Company may purchase shares of its outstanding common stock up to an aggregate transactional value of $500, depending on the Company’s continuing analysis of market, financial, and other factors (the New Repurchase Program).
Biggest changeDecember 31, 2018 2019 2020 2021 2022 2023 Alcoa Corporation $ 100 $ 81 $ 87 $ 225 $ 173 $ 131 S&P Metals & Mining Select Industry Index 100 115 134 181 206 251 S&P MidCap 400 Index 100 126 143 179 156 181 46 Issuer Purchases of Equity Securities Fourth Quarter 2023 Total Number of Shares Purchased Weighted Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value of Shares that May Yet be Purchased Under the Program (1) October 1 to October 31 — $ — — $ 500,000,000 November 1 to November 30 — — — 500,000,000 December 1 to December 31 — — — 500,000,000 Total — — — (1) On July 20, 2022, Alcoa Corporation announced that its Board of Directors approved a common stock repurchase program under which the Company may purchase shares of its outstanding common stock up to an aggregate transactional value of $500, depending on the Company’s continuing analysis of market, financial, and other factors (the July 2022 authorization).
Stock Performance Graph The following graph compares Alcoa Corporation’s cumulative total stockholder return (i.e., stock price change plus reinvestment of dividends) with the cumulative total stockholder returns of (1) the S&P MidCap 400 ® Index, and (2) the S&P Metals & Mining Select Industry Index.
Stock Performance Graph The following graph compares Alcoa Corporation’s cumulative total stockholder return (i.e., stock price change plus reinvestment of dividends) with the cumulative total stockholder returns of (1) the S&P Metals & Mining Select Industry Index, and (2) the S&P MidCap 400 ® Index.
Repurchases under this program may be made using a variety of methods, which may include open market purchases, privately negotiated transactions, or pursuant to a Rule 10b5-1 plan. This program may be suspended or discontinued at any time and does not have a predetermined expiration date. Alcoa Corporation intends to retire repurchased shares of common stock. Item 6. [RESERVED] 42
Repurchases under this program may be made using a variety of methods, which may include open market purchases, privately negotiated transactions, or pursuant to a Rule 10b5-1 plan. This program may be suspended or discontinued at any time and does not have a predetermined expiration date. Alcoa Corporation intends to retire repurchased shares of common stock.
This comparison was based on an initial investment of $100, including the reinvestment of any dividends, on December 31, 2017 through December 31, 2022. The stock performance information included in this graph is based on historical results and is not necessarily indicative of future stock price performance.
This comparison was based on an initial investment of $100, including the reinvestment of any dividends, on December 31, 2018 through December 31, 2023. The stock performance information included in this graph is based on historical results and is not necessarily indicative of future stock price performance.
See Part II Item 7 of this Form 10-K in Management’s Discussion and Analysis of Financial Condition and Results of Operations under caption Liquidity and Capital Resources – Financing Activities for more information. As of February 17, 2023, there were approximately 8,000 holders of record of shares of the Company’s common stock.
See Part II Item 7 of this Form 10-K in Management’s Discussion and Analysis of Financial Condition and Results of Operations under caption Liquidity and Capital Resources – Financing Activities for more information. As of February 16, 2024, there were approximately 7,600 holders of record of shares of the Company’s common stock.
The payment, amount, and timing of dividends, if any, depends upon matters deemed relevant by the Company’s Board of Directors, such as Alcoa Corporation’s financial position, results of operations, cash flows, capital requirements, business condition, future prospects, any limitations imposed by law, credit agreements or senior securities, and other factors deemed relevant and appropriate.
The Company intends to pay cash dividends on a quarterly basis; however, the payment, amount, and timing of dividends, if any, depends upon matters deemed relevant by the Company’s Board of Directors, such as Alcoa Corporation’s financial position, results of operations, cash flows, capital requirements, business condition, future prospects, any limitations imposed by law, credit agreements or senior securities, and other factors deemed relevant and appropriate.
As of the date of this report, the Company is currently authorized to repurchase up to a total of $500, in the aggregate, of its outstanding shares of common stock under the New Repurchase Program.
As of the date of this report, the Company is currently authorized to repurchase up to a total of $500, in the aggregate, of its outstanding shares of common stock under the July 2022 authorization.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities.
Item 5. Market for Registrant’s Common Equity, Related Stoc kholder Matters, and Issuer Purchases of Equity Securities.
Alcoa Corporation paid quarterly cash dividends of $0.10 per share in 2022. The Company intends to pay cash dividends on a quarterly basis. Dividends on Alcoa Corporation common stock are subject to authorization by the Company’s Board of Directors.
Alcoa Corporation paid quarterly cash dividends of $0.10 per share in 2022 and 2023. Dividends on Alcoa Corporation common stock are subject to authorization by the Company’s Board of Directors.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

118 edited+125 added−101 removed55 unchanged
Biggest changeThe LME pricing component represents the underlying base metal component, based on quoted prices for aluminum on the exchange. 47 Earnings Summary Annual Comparison Overview Net (loss) income attributable to Alcoa Corporation decreased $552 primarily as a result of: • Higher raw material costs due to inflation pressures and multiple supply chain disruptions • Higher energy costs, primarily in Europe • Higher costs primarily associated with maintenance, transportation, direct material usage, and labor • Absence of gains on the sale of non-core assets • Valuation allowance recorded against the deferred tax assets of Alcoa Alumínio • Lower shipments across all segments Partially offset by: • Higher average realized prices of aluminum and alumina • Lower restructuring charges • Favorable mark-to-market results on derivative instruments • Favorable currency impacts • Increase in value add product sales Sales Sales increased $299 primarily as a result of: • Higher average realized prices of aluminum and alumina • Increase in value add product sales • Higher shipments from the Alumar smelter and Portland smelter due to the restarts • Favorable changes to customer mix in the Alumina segment Partially offset by: • Lower trading activities • Lower shipments across all segments • Absence of sales from the divested Warrick Rolling Mill • Decreased sales from the San Ciprián smelter due to the smelter curtailment • Lower pricing at the Brazil hydro-electric facilities as 2021 drought conditions elevated prices in the prior year period Cost of goods sold Cost of goods sold as a percentage of sales increased 7% primarily as a result of: • Higher raw material costs due to inflation pressures and multiple supply chain disruptions • Higher energy costs, primarily in Europe • Higher costs primarily associated with maintenance, transportation, direct material usage, and labor Partially offset by: • Higher average realized prices of aluminum and alumina • Increase in value add product sales Selling, general administrative, and other expenses Selling, general administrative, and other expenses decreased $23 primarily as a result of: • Lower variable compensation Provision for depreciation, depletion, and amortization The Provision for depreciation, depletion, and amortization decreased $47 primarily as a result of: • Currency translation impacts Interest expense Interest expense decreased $89 primarily as a result of: • Absence of interest on $750 6.75% Senior Notes redeemed early in April 2021 and early redemption costs • Absence of interest on $500 7.00% Senior Notes redeemed early in September 2021 and early redemption costs Partially offset by: • Interest on $500 4.125% Senior Notes issued in March 2021 48 Other income, net Other income, net decreased $327 primarily as a result of: • Absence of gains on the sale of the former Rockdale site, the former Eastalco site, and the Warrick Rolling Mill • Decrease in equity earnings from the Ma’aden bauxite and alumina joint venture and aluminum joint venture primarily due to higher raw material and energy costs primarily driven by inflation, partially offset by higher alumina and aluminum prices Partially offset by: • Favorable mark-to-market results on derivative instruments primarily due to higher power prices in the current year Restructuring and other charges, net In 2022, Restructuring and other charges, net of $696, primarily related to: • $632 for U.S. pension group annuity contracts and lump sum settlements • $79 for the agreement reached with the workers of the divested Avilés and La Coruña facilities • $58 for an asset impairment related to the sale of the Company’s interest in the MRN mine • $29 for the permanent closure of the previously curtailed magnesium smelter in Addy (Washington) Partially offset by: • $83 reversal of Brazil state VAT valuation allowance associated with the restart of the Alumar smelter In 2021, Restructuring and other charges, net of $1,128, primarily related to: • $858 for U.S. pension group annuity contracts and lump sum settlements • $80 for the permanent closure of the previously curtailed Wenatchee (Washington) smelter • $63 for Suriname pension group annuity contract • $62 for the temporary curtailment of the San Ciprián (Spain) smelter • $47 for the settlement of certain pension benefits • $27 for the permanent closure of the anode portion of the Lake Charles (Louisiana) facility • $9 in settlements and curtailments of certain other postretirement benefits related to the sale of the Warrick Rolling Mill Partially offset by: • $22 of reversals for environmental and asset retirement obligation reserves at previously closed locations • $17 for the reversal of a reserve related to the divested Avilés and La Coruña entities Provision for income taxes The Provision for income taxes in 2022 was $664 on income before taxes of $702 or 94.6%.
Biggest changeThe unfavorable change of $252 was primarily a result of: • Mark-to-market results on derivative instruments primarily due to the absence of prior year gains driven by elevated power prices in 2022 • Decrease in equity earnings from the Ma’aden aluminum joint venture primarily due to a charge for a utility settlement, lower shipments, and lower aluminum prices • Higher equity losses from the Ma’aden bauxite and alumina joint venture primarily due to lower alumina prices and higher raw material costs partially offset by higher shipments • Higher ELYSIS capital contributions, which triggered loss recognition Partially offset by: • Lower pension expense primarily due to a decrease in recognized net actuarial losses subsequent to pension annuity transactions • Favorable currency revaluation impacts driven by the absence of losses recognized in the prior year due to the U.S. dollar strengthening against most currencies, and gains recognized in the current year primarily due to the U.S. dollar weakening against the Brazilian real Restructuring and other charges, net In 2023, Restructuring and other charges, net of $184 primarily related to: • $101 for the permanent closure of the previously curtailed Intalco aluminum smelter • $53 related to the updated viability agreement for the San Ciprián aluminum smelter • $21 for the settlement of certain pension benefits • $15 to record net additional environmental and asset retirement obligation reserves at previously closed locations • $11 for employee termination and severance costs, primarily related to Kwinana refinery productivity program Partially offset by: • $19 for the sale of unused carbon credits at a previously closed location In 2022, Restructuring and other charges, net of $696 primarily related to: • $632 for U.S. pension group annuity contracts and lump sum settlements • $79 for the accrual related to the GSA for the workers of the divested Avilés and La Coruña facilities • $58 for an asset impairment related to the sale of the Company’s interest in the MRN mine • $29 for the permanent closure of the previously curtailed magnesium smelter in Addy (Washington) Partially offset by: • $83 for the reversal of state VAT valuation allowance associated with the restart of the Alumar smelter • $10 for changes in estimated take-or-pay contract costs at the curtailed Intalco smelter and closed Wenatchee (Washington) smelter • $9 net reversal of environmental and ARO obligations and previously closed locations Provision for income taxes The Provision for income taxes in 2023 was $189 on a loss before taxes of $(584) or (32.4)%.
The average realized third-party price per metric ton of primary aluminum includes three elements: a) the underlying base metal component, based on quoted prices from the LME; b) the regional premium, which represents the incremental price over the base LME component that is associated with the physical delivery of metal to a particular region (e.g., the Midwest premium for metal sold in the United States); and c) the product premium, which represents the incremental price for receiving physical metal in a particular shape (e.g., billet, slab, rod, etc.) or alloy.
The average realized third-party price per metric ton of aluminum includes three elements: a) the underlying base metal component, based on quoted prices from the LME; b) the regional premium, which represents the incremental price over the base LME component that is associated with the physical delivery of metal to a particular region (e.g., the Midwest premium for metal sold in the United States); and c) the product premium, which represents the incremental price for receiving physical metal in a particular shape (e.g., billet, slab, rod, etc.) or alloy.
All statements by Alcoa Corporation that reflect expectations, assumptions or projections about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, forecasts concerning global demand growth for bauxite, alumina, and aluminum, and supply/demand balances; statements, projections or forecasts of future or targeted financial results, or operating or sustainability performance (including our ability to execute on strategies related to environmental, social and governance matters); statements about strategies, outlook, and business and financial prospects; and statements about capital allocation and return of capital.
All statements by Alcoa Corporation that reflect expectations, assumptions or projections about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, forecasts concerning global demand growth for bauxite, alumina, and aluminum, and supply/demand balances; statements, projections or forecasts of future or targeted financial results, or operating performance (including our ability to execute on strategies related to environmental, social and governance matters); statements about strategies, outlook, and business and financial prospects; and statements about capital allocation and return of capital.
The fair value that could be realized in an actual transaction may differ from that used to evaluate goodwill for impairment. 61 Under the qualitative impairment test, management considers a number of factors in its assessment, such as: general economic conditions, equity and credit markets, industry and market conditions, and earnings and cash flow trends.
The fair value that could be realized in an actual transaction may differ from that used to evaluate goodwill for impairment. Under the qualitative impairment test, management considers a number of factors in its assessment, such as: general economic conditions, equity and credit markets, industry and market conditions, and earnings and cash flow trends.
The alumina produced by this segment is sold primarily to internal and external aluminum smelter customers; a portion of the alumina is sold to external customers who process it into industrial chemical products. Approximately two-thirds of Alumina’s production is sold under supply contracts to third parties worldwide, while the remainder is used internally by the Aluminum segment.
The alumina produced by this segment is sold primarily to internal and external aluminum smelter customers; a portion of the alumina is sold to external customers who process it into industrial chemical products. Approximately two-thirds of the production of alumina is sold under supply contracts to third parties worldwide, while the remainder is used internally by the Aluminum segment.
The energy assets supply power to external customers in Brazil and, to a lesser extent, in the United States, as well as internal customers in the Aluminum (Canadian smelters and Warrick (Indiana) smelter) and Alumina segments (Brazilian refineries).
The energy assets supply power to external customers in Brazil and, to a lesser extent, in the United States, as well as internal customers in the Aluminum (Canadian smelters and Warrick smelter) and Alumina segments (Brazilian refineries).
As the site is demolished, remediated, or reclaimed, the assumptions and estimates used to record the reserve may change to account for: • Actual site conditions that require more or less remediation or reclamation; • Legislation that becomes more or less stringent; • Regulative authorities requiring updates to final design prior to completion; • Alternative disposal methods for waste; • Technological changes which allow remediation to be more efficient; • Market factors; and, • Variances in work that is atypical from prior work experience.
As the site is demolished, remediated, reclaimed, or restored, the assumptions and estimates used to record the reserve may change to account for: • Actual site conditions that require more or less remediation or reclamation; • Legislation that becomes more or less stringent; • Regulative authorities requiring updates to final design prior to completion; • Alternative disposal methods for demolition waste; • Technological changes which allow remediation to be more efficient; • Market factors; and, • Variances in work that is atypical from prior work experience.
On July 20, 2022, Alcoa Corporation announced that its Board of Directors approved an additional common stock repurchase program under which the Company may purchase shares of its outstanding common stock up to an aggregate transactional value of $500, depending on the Company’s continuing analysis of market, financial, and other factors (the New Repurchase Program).
On July 20, 2022, Alcoa Corporation announced that its Board of Directors approved an additional common stock repurchase program under which the Company may purchase shares of its outstanding common stock up to an aggregate transactional value of $500, depending on the Company’s continuing analysis of market, financial, and other factors (the July 2022 authorization).
Other purchase obligations consist principally of freight for bauxite and alumina with expiration dates ranging from 1 to 10 years. Many of these purchase obligations contain variable pricing components, and, as a result, actual cash payments may differ from the estimates provided in the preceding table.
Other purchase obligations consist principally of freight for bauxite and alumina with expiration dates ranging from 1 to 11 years. Many of these purchase obligations contain variable pricing components, and, as a result, actual cash payments may differ from the estimates provided in the preceding table.
Raw material obligations consist mostly of bauxite (relates to AWAC’s bauxite mine interests in Guinea and Brazil), caustic soda, lime, alumina, aluminum fluoride, calcined petroleum coke, anodes and cathode blocks with expiration dates ranging from less than 1 year to 13 years.
Raw material obligations consist mostly of bauxite (relates to AWAC’s bauxite mine interests in Guinea and Brazil), caustic soda, lime, alumina, aluminum fluoride, calcined petroleum coke, anodes, and cathode blocks with expiration dates ranging from less than 1 year to 11 years.
Generally, this segment’s sales are transacted in U.S. dollars while costs and expenses are transacted in the local currency of the respective operations, which are the Australian dollar, the Brazilian real, and the euro. Most of the operations that comprise the Alumina segment are part of AWAC (see Noncontrolling Interest in Earnings Summary above).
Generally, this segment’s sales are transacted in U.S. dollars while costs and expenses are transacted in the local currency of the respective operations, which are the Australian dollar, the Brazilian real, and the euro. Most of the operations that comprise the Alumina segment are part of AWAC (see Noncontrolling Interest above).
In the event ParentCo would be required to perform under any of these instruments, ParentCo would be indemnified by Alcoa Corporation in accordance with the Separation and Distribution Agreement. Likewise, the Company has outstanding bank guarantees and letters of credit related to ParentCo of $8 at December 31, 2022.
In the event ParentCo would be required to perform under any of these instruments, ParentCo would be indemnified by Alcoa Corporation in accordance with the Separation and Distribution Agreement. Likewise, the Company has outstanding bank guarantees and letters of credit related to ParentCo of $8 at December 31, 2023.
The yield curve model used to develop the discount rate parallels the plans’ projected cash flows and has a weighted average duration of 11 years. The underlying cash flows of the high-quality corporate bonds included in the model exceed the cash flows needed to satisfy the Company’s plan obligations multiple times.
The yield curve model used to develop the discount rate parallels the plans’ projected cash flows and has a weighted average duration of 10 years. The underlying cash flows of the high-quality corporate bonds included in the model exceed the cash flows needed to satisfy the Company’s plan obligations multiple times.
Market projections are subject to the risks described above and other risks in the market. 43 Overview Our Business Alcoa Corporation (Alcoa or the Company) is a vertically integrated aluminum company comprised of bauxite mining, alumina refining, aluminum production (smelting and casting), and energy generation.
Market projections are subject to the risks described above and other risks in the market. 48 Overview Our Business Alcoa Corporation (Alcoa or the Company) is a vertically integrated aluminum company comprised of bauxite mining, alumina refining, aluminum production (smelting and casting), and energy generation.
(2) Represents the elimination of Cost of goods sold related to intersegment sales between Bauxite and Alumina and between Alumina and Aluminum. (3) Provision for depreciation, depletion, and amortization is included in the operating costs used to calculate average cost for each of the bauxite, alumina, and primary aluminum product divisions (see Bauxite, Alumina, and Aluminum above) .
(2) Represents the elimination of Cost of goods sold related to intersegment sales between Alumina and Aluminum. (3) Provision for depreciation, depletion, and amortization is included in the operating costs used to calculate average cost for each of the alumina and aluminum product divisions (see Alumina and Aluminum above).
A portion of this segment’s production represents the offtake from equity method investments in Brazil (prior to the MRN sale in April 2022) and Guinea, as well as AWAC’s share of production related to the equity investment in Saudi Arabia.
A portion of this segment’s bauxite production represents the offtake from equity method investments in Brazil (prior to the MRN sale in April 2022) and Guinea, as well as AWAC’s share of bauxite production related to an equity investment in Saudi Arabia.
Although management believes that Alcoa’s future cash from operations and other liquidity options will provide adequate resources to fund operating and investing needs, the Company’s access to, and the availability of, financing on acceptable terms in the future will be affected by many factors, including: (i) Alcoa Corporation’s credit rating; (ii) the liquidity of the overall capital markets; (iii) the current state of the economy and commodity markets, and (iv) short- and long-term debt ratings.
Although management believes that Alcoa’s projected cash flows and other liquidity options will provide adequate resources to fund operating and investing needs, the Company’s access to, and the availability of, financing on acceptable terms in the future will be affected by many factors, including: (i) Alcoa Corporation’s credit rating; (ii) the liquidity of the overall capital markets; (iii) the current state of the economy and commodity markets, and (iv) short- and long-term debt ratings.
In August 2017, Alcoa Corporation entered into a standby letter of credit agreement, which expires on June 27, 2024 (extended in August 2018, May 2019, May 2021, and June 2022), with three financial institutions. The agreement provides for a $200 facility used by the Company for matters in the ordinary course of business.
In August 2017, Alcoa Corporation entered into a standby letter of credit agreement, which expires on June 27, 2024 (amended in August 2018, May 2019, May 2021, June 2022, and January 2024), with three financial institutions. The agreement provides for a $200 facility used by the Company for matters in the ordinary course of business.
Additionally, operating costs in the table above includes all production-related costs: raw materials consumed; conversion costs, such as labor, materials, and utilities; depreciation and amortization; and plant administrative expenses. Overview. This segment represents the Company’s worldwide refining system, which processes bauxite into alumina.
Additionally, operating costs in the table above includes all production-related costs: raw materials consumed; conversion costs, such as labor, materials, and utilities; depreciation and amortization; and plant administrative expenses. Overview. This segment represents the Company’s global bauxite mining operations and worldwide refining system, which processes bauxite into alumina.
Alumar smelter profitability in future periods could prompt the Company to evaluate the realizability of the deferred tax asset and assess the possibility of a reversal of the valuation allowance, which could have a significant impact on net income in the quarter the valuation allowance is reversed.
AWAB’s profitability in future periods could prompt the Company to evaluate the realizability of the deferred tax asset and assess the possibility of a reversal of the valuation allowance, which could have a significant impact on net income in the quarter the valuation allowance is reversed.
For a comparison of changes for the fiscal years ended December 31, 2021 and 2020, refer to Management’s Discussion and Analysis of Financial Condition and Results of Operation in Part II Item 7 of Alcoa Corporation’s Annual Report on Form 10-K for the year ended December 31, 2021 (filed February 24, 2022).
For a comparison of changes for the fiscal years ended December 31, 2022 and 2021, refer to Management’s Discussion and Analysis of Financial Condition and Results of Operation in Part II Item 7 of Alcoa Corporation’s Annual Report on Form 10-K for the year ended December 31, 2022 (filed February 23, 2023).
See Part II Item 8 of this Form 10-K in Note M to the Consolidated Financial Statements for additional information related to the Company’s debt . As of December 31, 2022, letters of credit aggregating $131 were issued under this facility. Surety Bonds.
See Part II Item 8 of this Form 10-K in Note M to the Consolidated Financial Statements for additional information related to the Company’s debt. As of December 31, 2023, letters of credit aggregating $86 were issued under this facility. Surety Bonds.
See Part II Item 8 of this Form 10-K in Note Q to the Consolidated Financial Statements for additional information related to undistributed net earnings. Cash from Operations Cash provided from operations was $822 in 2022 compared with $920 in 2021.
See Part II Item 8 of this Form 10-K in Note Q to the Consolidated Financial Statements for additional information related to undistributed net earnings. Cash from Operations Cash provided from operations was $91 in 2023 compared with $822 in 2022.
Additionally, ParentCo has outstanding surety bonds related to the Company of $11 at December 31, 2022. In the event ParentCo would be required to perform under any of these instruments, ParentCo would be indemnified by Alcoa Corporation in accordance with the Separation and Distribution Agreement.
Additionally, ParentCo has outstanding surety bonds related to the Company of $8 at December 31, 2023. In the event ParentCo would be required to perform under any of these instruments, ParentCo would be indemnified by Alcoa Corporation in accordance with the Separation and Distribution Agreement.
See Part II Item 8 of this Form 10-K in Note M to the Consolidated Financial Statements for additional information related to the Revolving Credit Facility. Guarantees of Third Parties. As of December 31, 2022 and 2021, the Company had no outstanding potential future payments for guarantees issued on behalf of a third-party. Bank Guarantees and Letters of Credit.
See Part II Item 8 of this Form 10-K in Note M to the Consolidated Financial Statements for additional information related to these facilities. Guarantees of Third Parties. As of December 31, 2023 and 2022, the Company had no outstanding potential future payments for guarantees issued on behalf of a third-party. Bank Guarantees and Letters of Credit.
Further, the Company has flexibility related to its use of cash; the Company has no significant debt maturities until 2027 and no significant cash contribution requirements related to its U.S. pension plan obligations for the foreseeable future (refer to Material Cash Requirements, below, for more information).
Further, the Company has flexibility related to its use of cash; the Company has no significant debt maturities until 2027 and no significant cash contribution requirements related to its pension plan obligations (refer to Material Cash Requirements, below, for more information).
Alcoa Corporation has outstanding surety bonds primarily related to tax matters, contract performance, workers compensation, environmental-related matters, and customs duties. The total amount committed under these bonds, which automatically renew or expire at various dates between 2023 and 2027, was $174 at December 31, 2022.
Alcoa Corporation has outstanding surety bonds primarily related to tax matters, contract performance, workers compensation, environmental-related matters, and customs duties. The total amount committed under these bonds, which automatically renew or expire at various dates between 2024 and 2028, was $190 at December 31, 2023.
Alcoa Corporation has outstanding bank guarantees and letters of credit related to, among others, energy contracts, environmental obligations, legal and tax matters, leasing obligations, workers compensation, and customs duties.
Alcoa Corporation and its subsidiaries have outstanding bank guarantees and letters of credit related to, among others, energy contracts, environmental obligations, legal and tax matters, leasing obligations, workers compensation, and customs duties.
Additionally, the impact on market conditions from such events could adversely affect the liquidity of Alcoa’s customers, suppliers, and joint venture partners and equity method investments, which could negatively impact the collectability of outstanding receivables and our cash flows. At December 31, 2022, the Company’s cash and cash equivalents were $1,363, of which $1,280 was held outside the United States.
Additionally, the impact on market conditions from such events could adversely affect the liquidity of Alcoa’s customers, suppliers, and joint venture partners and equity method investments, which could negatively impact the collectability of outstanding receivables and our cash flows. At December 31, 2023, the Company’s cash and cash equivalents were $944, of which $801 was held outside the United States.
The year-over-year volume increase for EcoLum, which is aluminum produced with no more than 4.0 metric tons of carbon dioxide equivalents per metric ton of aluminum produced, grew more than four times over 2021, driven mostly by the European market.
The year-over-year volume increase for EcoLum, which is aluminum produced with no more than 4.0 metric tons of carbon dioxide equivalents per metric ton of aluminum produced, was driven mostly by the European market.
Likewise, the Company has outstanding surety bonds related to ParentCo of $3 at December 31, 2022. In the event Alcoa Corporation would be required to perform under any of these instruments, the Company would be indemnified by ParentCo in accordance with the Separation and Distribution Agreement. 59 Debt.
Likewise, the Company has outstanding surety bonds related to ParentCo of $5 at December 31, 2023. In the event Alcoa Corporation would be required to perform under any of these instruments, the Company would be indemnified by ParentCo in accordance with the Separation and Distribution Agreement. 66 Debt.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Item 7. Management’s Discussion and Analysis o f Financial Condition and Results of Operations.
On June 27, 2022, Alcoa Corporation and ANHBV, a wholly owned subsidiary of Alcoa Corporation and the borrower, entered into an amendment and restatement agreement (the Third Amendment and Restatement) (as amended and restated, the Revolving Credit Facility) that provides additional flexibility to the Company and ANHBV by (i) extending the maturity date of the Revolving Credit Facility from November 2023 to June 2027, (ii) reducing the aggregate commitments under the facility from $1,500 to $1,250, (iii) releasing the collateral package that had previously secured the Revolving Credit Facility, which will continue so long as certain credit ratings are maintained, (iv) increasing the maximum leverage ratio from 2.75 to 1.00 to 3.25 to 1.00, which increases following material acquisitions for four consecutive fiscal quarters following an acquisition, (v) providing a debt to capitalization ratio not to exceed .60 to 1.00 to replace the maximum leverage ratio upon a ratings upgrade to investment grade by Moody’s or S&P, and (vi) providing flexibility for dividends and other restricted payments, to make investments, and to incur additional indebtedness.
(ANHBV), a wholly owned subsidiary of Alcoa Corporation and the borrower, entered into an amendment and restatement agreement (the Third Amendment and Restatement) (as amended and restated, the Revolving Credit Facility) that provided additional flexibility to the Company and ANHBV by (i) extending the maturity date of the Revolving Credit Facility from November 2023 to June 2027, (ii) reducing the aggregate commitments under the facility from $1,500 to $1,250, (iii) releasing the collateral package that had previously secured the Revolving Credit Facility, which would have continued so long as certain credit ratings were maintained, (iv) increasing the maximum leverage ratio from 2.75 to 1.00 to 3.25 to 1.00, which increased following material acquisitions for four consecutive fiscal quarters following an acquisition, (v) providing a debt to capitalization ratio not to exceed .60 to 1.00 to replace the maximum leverage ratio upon a ratings upgrade to investment grade by Moody’s Investor Service (Moody’s) or Standard and Poor’s Global Ratings (S&P), and (vi) providing flexibility for dividends and other restricted payments, to make investments, and to incur additional indebtedness.
The total amount committed under these instruments, which automatically renew or expire at various dates between 2023 and 2024, was $293 (includes $131 issued under a standby letter of credit agreement —see below) at December 31, 2022. Additionally, ParentCo has outstanding bank guarantees and letters of credit related to the Company of $14 at December 31, 2022.
The total amount committed under these instruments, which automatically renew or expire at various dates between 2024 and 2025, was $294 (includes $86 issued under a standby letter of credit agreement —see below) at December 31, 2023. Additionally, ParentCo has outstanding bank guarantees and letters of credit related to the Company of $13 at December 31, 2023.
As of December 31, 2022 , Alcoa Corporation ha d three outstanding Notes maturing at varying times. A summary of the Notes and other long-term debt is shown below. See Part II Item 8 of this Form 10-K in Note M to the Consolidated Financial Statements for additional information related to the Company ’s debt.
As of December 31, 2023, Alcoa Corporation had three outstanding series of Notes maturing at varying times. A summary of the Notes and other long-term debt is shown below. See Part II Item 8 of this Form 10-K in Note M to the Consolidated Financial Statements for additional information related to the Company’s debt.
The impact on the estimated fair values of an increase in the discount rate of 1% would not result in a change in the conclusions reached, the estimated fair values would remain in excess of carrying values.
The impact on the estimated fair values of an increase in the discount rate of 1% would not result in a change in the conclusions reached for the impairment assessments performed in 2023, the estimated fair values would remain in excess of carrying values.
Even in a challenging market, the Company saw continued evidence of the growth of aluminum demand. In 2022, Alcoa saw a significant increase in year-over-year demand for its EcoLum aluminum, which is part of our Sustana brand, through both increased margins and deliveries while still a relatively small portion of the Company’s overall sales volume.
Alcoa saw a significant increase in year-over-year demand for its EcoLum aluminum in 2023, which is part of our Sustana brand, through both increased margins and deliveries while still a relatively small portion of the Company’s overall sales volume.
The impact on the combined pension and other postretirement liabilities of a change in the weighted average discount rate of ¼ of 1% would be approximately $75 and either a charge or credit of approximately $1 to pretax earnings in the following year.
The impact of a change in the weighted average discount rate of ¼ of 1% would be approximately $70 on combined pension and other postretirement liabilities and immaterial to pretax earnings in the following year.
We have committed cash outflows related to pension and postretirement benefit obligations and operating lease agreements. See Part II Item 8 of this Form 10-K in Notes O and T, respectively, to the Consolidated Financial Statements for additional information.
The Company has committed cash outflows related to pension and postretirement benefit obligations, asset retirement obligations, environmental remediation, and operating lease agreements. See Part II Item 8 of this Form 10-K in Notes O, R, S, and T, respectively, to the Consolidated Financial Statements for additional information.
Prior to this authorization, $150 remained available for share repurchases at the end of the second quarter of 2022 from a prior authorization in October 2021 of $500 which was fully exhausted in 2022 with the Company’s repurchase activity (see below).
Prior to this authorization, $150 remained available for common stock repurchases at the end of the second quarter of 2022 from the prior authorization in October 2021 of $500 which was fully exhausted in 2022 with the Company’s repurchase activity (see below). No shares were repurchased in 2023.
Additionally, Total shipments include dry metric tons that were not produced by the Bauxite segment. Such bauxite was purchased to satisfy certain customer commitments. The Bauxite segment bears the risk of loss of the purchased bauxite until control of the product has been transferred to this segment’s customers.
In the above table, total aluminum third-party shipments include metric tons that were not produced by the Aluminum segment. Such aluminum was purchased by this segment to satisfy certain customer commitments. The Aluminum segment bears the risk of loss of the purchased aluminum until control of the product has been transferred to this segment’s customer.
For the year ended December 31, Statement of Operations 2022 2021 Sales $ 12,451 $ 12,152 Cost of goods sold (exclusive of expenses below) 10,212 9,153 Selling, general administrative, and other expenses 204 227 Research and development expenses 32 31 Provision for depreciation, depletion, and amortization 617 664 Restructuring and other charges, net 696 1,128 Interest expense 106 195 Other income, net (118 ) (445 ) Total costs and expenses 11,749 10,953 Income before income taxes 702 1,199 Provision for income taxes 664 629 Net income 38 570 Less: Net income attributable to noncontrolling interest 161 141 Net (loss) income attributable to Alcoa Corporation $ (123 ) $ 429 Selected Financial Metrics 2022 2021 Diluted (loss) income per share attributable to Alcoa Corporation common shareholders $ (0.68 ) $ 2.26 Third-party shipments of alumina (kmt) 9,169 9,629 Third-party shipments of aluminum products (kmt) 2,570 3,007 Average realized price per metric ton of alumina $ 384 $ 326 Average realized price per metric ton of primary aluminum $ 3,457 $ 2,879 Average Alumina Price Index (API) (1) $ 365 $ 324 Average London Metal Exchange (LME) 15-day lag (2) $ 2,726 $ 2,443 (1) API (Alumina Price Index) is a pricing mechanism that is calculated by the Company based on the weighted average of a prior month’s daily spot prices published by the following three indices: CRU Metallurgical Grade Alumina Price, Platts Metals Daily Alumina PAX Price, and FastMarkets Metal Bulletin Non-Ferrous Metals Alumina Index.
For the year ended December 31, Statement of Operations 2023 2022 Sales $ 10,551 $ 12,451 Cost of goods sold (exclusive of expenses below) 9,813 10,212 Selling, general administrative, and other expenses 226 204 Research and development expenses 39 32 Provision for depreciation, depletion, and amortization 632 617 Restructuring and other charges, net 184 696 Interest expense 107 106 Other expenses (income), net 134 (118 ) Total costs and expenses 11,135 11,749 (Loss) income before income taxes (584 ) 702 Provision for income taxes 189 664 Net (loss) income (773 ) 38 Less: Net (loss) income attributable to noncontrolling interest (122 ) 161 Net loss attributable to Alcoa Corporation $ (651 ) $ (123 ) Selected Financial Metrics 2023 2022 Diluted loss per share attributable to Alcoa Corporation common shareholders $ (3.65 ) $ (0.68 ) Third-party shipments of alumina (kmt) 8,698 9,169 Third-party shipments of aluminum (kmt) 2,491 2,570 Average realized price per metric ton of alumina $ 358 $ 384 Average realized price per metric ton of aluminum $ 2,828 $ 3,457 Average Alumina Price Index (API) (1) $ 343 $ 365 Average London Metal Exchange (LME) 15-day lag (2) $ 2,249 $ 2,726 52 (1) API (Alumina Price Index) is a pricing mechanism that is calculated by the Company based on the weighted average of a prior month’s daily spot prices published by the following three indices: CRU Metallurgical Grade Alumina Price; Platts Metals Daily Alumina PAX Price; and FastMarkets Metal Bulletin Non-Ferrous Metals Alumina Index.
The smelting operations produce molten primary aluminum, which is then formed by the casting operations into either common alloy ingot (e.g., t-bar, sow, standard ingot) or into value add ingot products (e.g., foundry, billet, rod, and slab).
Aluminum’s combined smelting and casting operations produce primary aluminum products, virtually all of which are sold to external customers and traders. The smelting operations produce molten primary aluminum, which is then formed by the casting operations into either common alloy ingot (e.g., t-bar, sow, standard ingot) or into value add ingot products (e.g., foundry, billet, rod, and slab).
Management believes that the Company’s cash on hand, future operating cash flows, and liquidity options, combined with its strategic actions, are adequate to fund its short term and long term operating and investing needs for at least twelve months and the foreseeable future thereafter.
Management believes that the Company’s cash on hand, projected cash flows, and liquidity options, combined with its strategic actions, will be adequate to fund its short-term (at least 12 months) and long-term operating and investing needs.
Several assumptions are used to estimate the costs required to demolish, environmentally remediate, or reclaim the site, including: • Engineering estimates and benchmarks to other similar projects; • Mining area to be reclaimed and estimated restoration costs; • Volume of regulated materials to be removed (asbestos, PCB fluids, spent potlining); • Disposition of materials; • Extent of contamination based on available data; • Scope of remediation to mitigate human health or environmental risks and/or to meet likely regulatory requirements; and, • Commercial availability and pricing for off-site treatment or disposal applications.
Several assumptions are used to estimate the costs required to demolish, environmentally remediate, reclaim, or restore the site, including: • Engineering designs for construction or closure; • Materials and services costs; • Volume of regulated materials to be removed (asbestos, PCB fluids, spent potlining); • Disposition of demolition materials; • Extent of contamination based on available data; • Scope of remediation to mitigate human health or environmental risks and/or to meet regulatory requirements; • Timing to complete construction or closure; and, • Commercial availability and pricing for off-site treatment or disposal applications.
Upon payment, AofA recorded a noncurrent prepaid tax asset, as the Company continues to believe it is more likely than not that AofA’s tax position will be sustained and therefore is not recognizing any tax expense in relation to this matter.
Upon payment, AofA recorded a noncurrent prepaid tax asset, as the Company continues to believe it is more likely than not that AofA’s tax position will be sustained and therefore is not recognizing any tax expense in relation to this matter. In accordance with Australian tax laws, the initial interest assessment and additional interest are deductible against AofA’s taxable income.
The Company’s operations consist of three worldwide reportable segments: Bauxite, Alumina, and Aluminum. Segment performance under Alcoa Corporation’s management reporting system is evaluated based on a number of factors; however, the primary measure of performance is the Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) of each segment.
Segment performance under Alcoa Corporation’s management reporting system is evaluated based on a number of factors; however, the primary measure of performance is the Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) for each segment.
Refer to Liquidity and Capital, for more information. In each quarter of 2022, the Board of Directors declared a quarterly cash dividend of $0.10 per share of the Company’s common stock, totaling $72 for the year.
Capital Returns In each quarter of 2023, the Board of Directors declared a quarterly cash dividend of $0.10 per share of the Company’s common stock, totaling $72 for the year.
The Company calculates Segment Adjusted EBITDA as Total sales (third-party and intersegment) minus the following items: Cost of goods sold; Selling, general administrative, and other expenses; and Research and development expenses.
The Company calculates Segment Adjusted EBITDA as Total sales (third-party and intersegment) minus the following items: Cost of goods sold; Selling, general administrative, and other expenses; and Research and development expenses. Alcoa Corporation’s Segment Adjusted EBITDA may not be comparable to similarly titled measures of other companies.
The Company recorded an adjustment of $25 in the fourth quarter of 2022 to Cost of goods sold to reverse amounts accrued for 2022 credits earned through September 30, 2022 under the prior carbon dioxide compensation program.
The Company recorded an adjustment of $18 in the fourth quarter of 2023 to Cost of goods sold to reverse amounts accrued for 2023 credits earned through September 30, 2023, under the prior carbon dioxide compensation program. During the fourth quarter of 2023, the Company took actions to improve the competitiveness of its Warrick smelter.
The Revolving Credit Facility implements a sustainability adjustment to the applicable margin and commitment fee that may result in a positive or negative adjustment based on two of the Company’s existing sustainability metrics; • Achieved investment grade credit rating.
The Revolving Credit Facility implemented a sustainability adjustment to the applicable margin and commitment fee that may result in a positive or negative adjustment based on two of the Company’s existing sustainability metrics. On July 26, 2022, Moody’s upgraded the rating of ANHBV’s senior unsecured notes to Baa3 (investment grade).
In 2022, the use of cash was primarily attributable to $480 of capital expenditures and $32 of cash contributions to the ELYSIS joint venture, partially offset by the sale of the Company’s interest in the MRN mine of $10.
In 2022, the use of cash was primarily attributable to $480 related to capital expenditures and $32 of cash contributions to the ELYSIS partnership, partially offset by the sale of the Company’s interest in the MRN mine of $10. In 2024, Alcoa expects capital expenditures of approximately $550 related to sustaining capital projects and return-seeking capital projects.
Recently Issued Accounting Guidance See Part II Item 8 of this Form 10-K in Note B to the Consolidated Financial Statements under caption Recently Issued Accounting Guidance. Item 7A. Quantitative and Qualitative Disclosures About Market Risk. See Part II Item 8 of this Form 10-K in Note P to the Consolidated Financial Statements under caption Derivatives. 64
Recently Adopted Accounting Guidance See Part II Item 8 of this Form 10-K in Note B to the Consolidated Financial Statements under caption Recently Adopted Accounting Guidance. Recently Issued Accounting Guidance See Part II Item 8 of this Form 10-K in Note B to the Consolidated Financial Statements under caption Recently Issued Accounting Guidance.
In 2022, the Company repurchased 8,565,200 shares of its common stock for $500 under the previously authorized program; the shares were immediately retired. As of the date of this report, the Company is currently authorized to repurchase up to a total of $500, in the aggregate, of its outstanding shares of common stock under the New Repurchase Program.
As of the date of this report, the Company is currently authorized to repurchase up to a total of $500, in the aggregate, of its outstanding shares of common stock under the July 2022 authorization.
Critical Accounting Policies and Estimates The preparation of the Company’s Consolidated Financial Statements in accordance with GAAP requires management to make certain estimates based on judgments and assumptions regarding uncertainties that affect the amounts reported in the Consolidated Financial Statements and disclosed in the Notes to the Consolidated Financial Statements.
Long-term debt and Short-term borrowings—Total debt amounts in the preceding table represent the principal amounts of all outstanding long-term debt and Short-term borrowings, which have maturities that extend to 2029. 68 Critical Accounting Policies and Estimates The preparation of the Company’s Consolidated Financial Statements in accordance with GAAP requires management to make certain estimates based on judgments and assumptions regarding uncertainties that affect the amounts reported in the Consolidated Financial Statements and disclosed in the Notes to the Consolidated Financial Statements.
( 2 ) Corporate expenses are composed of general administrative and other expenses of operating the corporate headquarters and other global administrative facilities, as well as research and development expenses of the corporate technical center. ( 3 ) Other includes certain items that are not included in the Adjusted EBITDA of the reportable segments.
(2) Corporate expenses are composed of general administrative and other expenses of operating the corporate headquarters and other global administrative facilities, as well as research and development expenses of the corporate technical center.
Actual results could differ from those estimates upon subsequent resolution of identified matters. Results of Operations The discussion that follows includes a comparison of our results of operations and liquidity and capital resources for the fiscal years ended December 31, 2022 and 2021.
Results of Operations The discussion that follows includes a comparison of our results of operations and liquidity and capital resources for the fiscal years ended December 31, 2023 and 2022.
Notable changes to the sources and (uses) of cash include: • ($964) lower net income generation, excluding the impacts from restructuring charges, primarily due to higher raw materials, energy and production costs, partially offset by higher aluminum and alumina pricing ; • ($372) in income taxes paid on prior year earnings, as well as on higher current year earnings in jurisdictions where the Company pays taxes; • $282 in certain working capital accounts, primarily a lower increase in receivables relating to higher aluminum and alumina prices than in 2021, a lower increase in inventories on higher raw material volumes in 2021, and a lower increase in accounts payable as raw material and energy costs increased less than in 2021; and, • $562 in lower pension contributions to the Company’s defined benefit pension plans.
Notable changes to the sources and (uses) of cash include: • ($1,323) lower net income, excluding the impacts from restructuring charges, primarily due to lower aluminum pricing, higher production costs, partially offset by lower energy costs ; • $690 in certain working capital accounts, primarily an increase in inventories in 2022 on higher raw material prices and a decrease in inventories in 2023 primarily on lower raw material prices; and, • $216 less income taxes paid on prior year earnings, as well as on lower current year earnings in the jurisdictions where taxes are paid.
Interest related to total debt—Interest is based on interest rates in effect as of December 31, 2022 and is calculated on debt with maturities that extend to 2029. Long-term debt—Total debt amounts in the preceding table represent the principal amounts of all outstanding long-term debt, which have maturities that extend to 2029.
Interest related to total debt—Interest is based on interest rates in effect as of December 31, 2023 and is calculated on debt with maturities that extend to 2029.
Mortality rate assumptions are based on mortality tables and future improvement scales published by third parties, such as the Society of Actuaries, and consider other available information including historical data as well as studies and publications from reputable sources.
A change in the assumption for the weighted average expected long-term rate of return on plan assets of ¼ of 1% would impact pretax earnings by approximately $6 for 2024. 70 Mortality rate assumptions are based on mortality tables and future improvement scales published by third parties, such as the Society of Actuaries, and consider other available information including historical data as well as studies and publications from reputable sources.
Legal matters are reviewed on a continuous basis to determine if there has been a change in management’s judgment regarding the likelihood of an unfavorable outcome or the estimate of a potential loss.
Legal matters are reviewed on a continuous basis to determine if there has been a change in management’s judgment regarding the likelihood of an unfavorable outcome or the estimate of a potential loss. Refer to Part II Item 8 of this Form 10-K in Note B to the Consolidated Financial Statements for more information regarding management’s litigation matters policy.
Changes in market conditions caused by global or macroeconomic events, such as the ongoing conflict between Russia and Ukraine, high inflation, and changing global monetary policies could have adverse effects on Alcoa’s ability to obtain additional financing and cost of borrowing.
There can be no assurances that the Company will continue to have access to capital markets on terms acceptable to Alcoa Corporation. 63 Changes in market conditions caused by global or macroeconomic events, such as ongoing regional conflicts, high inflation, and changing global monetary policies could have adverse effects on Alcoa’s ability to obtain additional financing and cost of borrowing.
In 2021, the Company repurchased 3,184,300 shares of its common stock for $150; the shares were immediately retired. Investing Activities Cash used for investing activities was $495 in 2022 compared with cash provided from investing activities of $565 in 2021.
In 2022, the Company repurchased 8,565,200 shares of its common stock for $500; the shares were immediately retired. 67 In 2021, the Company repurchased 3,184,300 shares of its common stock for $150; the shares were immediately retired.
(2) LME (London Metal Exchange) is a globally recognized exchange for commodity trading, including aluminum.
(2) LME (London Metal Exchange) is a globally recognized exchange for commodity trading, including aluminum. The LME pricing component represents the underlying base metal component, based on quoted prices for aluminum on the exchange.
In January 2023, the Company reduced production at the Kwinana (Australia) refinery by approximately 30 percent in response to a domestic natural gas shortage in Western Australia due to production challenges experienced by key gas suppliers.
The refinery has an annual nameplate capacity of 2.2 million metric tons and has been operating at approximately 80 percent of its nameplate capacity since January 2023, when the Company reduced production in response to a domestic natural gas shortage in Western Australia due to production challenges experienced by key gas suppliers.
In connection with the agreement, the Company has restricted cash of $103 to be made available for $68 in capital improvements at the site and $35 in smelter restart costs.
At December 31, 2023, the Company has restricted cash of $91 to be made available for the remaining capital improvements of $118 and smelter restart costs of $35. Capacity.
As a result of the assessments, the estimated fair values of the Bauxite and Alumina reporting units were substantially in excess of their carrying values, resulting in no impairment.
As a result of the assessment, the estimated fair value of the Alumina reporting unit was substantially in excess of its carrying value, resulting in no impairment.
The Alumina segment had a base annual capacity of 13,843 kmt with 1,014 kmt of curtailed refining capacity. In the third quarter of 2022, curtailed capacity increased 800 kmt, due to the partial curtailment of the San Ciprián refinery (see above).
The Alumina segment had a base refining capacity of 13,843 kmt with 1,452 kmt of curtailed capacity. In the first quarter of 2023, curtailed capacity increased 438 kmt due to the reduction in production at the Kwinana refinery (see above).
(4) Other includes costs related to Transformation, and certain other items that are not included in the operating costs of segments (see footnotes 1 and 3 in the Reconciliation of Total Segment Adjusted EBITDA to Consolidated Net (Loss) Income Attributable to Alcoa Corporation below). 56 Reconciliation of Total Segment Adjusted EBITDA to Consolidated Net (Loss) Income Attributable to Alcoa Corporation 2022 2021 Net (loss) income attributable to Alcoa Corporation: Total Segment Adjusted EBITDA $ 2,275 $ 3,053 Unallocated amounts: Transformation (1) (66 ) (44 ) Intersegment eliminations 143 (101 ) Corporate expenses (2) (128 ) (129 ) Provision for depreciation, depletion, and amortization (617 ) (664 ) Restructuring and other charges, net (696 ) (1,128 ) Interest expense (106 ) (195 ) Other income, net 118 445 Other (3) (221 ) (38 ) Consolidated income before income taxes 702 1,199 Provision for income taxes (664 ) (629 ) Net income attributable to noncontrolling interest (161 ) (141 ) Consolidated net (loss) income attributable to Alcoa Corporation $ (123 ) $ 429 (1) Transformation includes, among other items, the Adjusted EBITDA of previously closed operations.
Reconciliation of Total Segment Adjusted EBITDA to Consolidated Net Loss Attributable to Alcoa Corporation 2023 2022 Total Segment Adjusted EBITDA $ 734 $ 2,280 Unallocated amounts: Transformation (1) (80 ) (66 ) Intersegment eliminations 7 138 Corporate expenses (2) (133 ) (128 ) Provision for depreciation, depletion, and amortization (632 ) (617 ) Restructuring and other charges, net (184 ) (696 ) Interest expense (107 ) (106 ) Other (expenses) income, net (134 ) 118 Other (3) (55 ) (221 ) Consolidated (loss) income before income taxes (584 ) 702 Provision for income taxes (189 ) (664 ) Net loss (income) attributable to noncontrolling interest 122 (161 ) Consolidated net loss attributable to Alcoa Corporation $ (651 ) $ (123 ) (1) Transformation includes, among other items, the Adjusted EBITDA of previously closed operations.
Refer to Part II Item 8 of this Form 10-K in Note B to the Consolidated Financial Statements for more information regarding management’s impairment assessment process. Management performed a quantitative assessment for the Bauxite and Alumina reporting units in 2022.
Refer to Part II Item 8 of this Form 10-K in Note B to the Consolidated Financial Statements for more information regarding management’s impairment assessment process. As a result of the January 2023 segment change, the Company reviewed the recoverability of the carrying value of goodwill of its Alumina reporting unit in the first quarter of 2023.
Management concluded that it was more likely than not that Española’s net deferred tax assets, which consist primarily of tax loss carryforwards, would not be realized as the entity’s sole operating asset, the San Ciprián refinery, was in a three-year cumulative loss position for the period ended December 31, 2021 .
Management concluded that it was more likely than not that Alumínio’s net deferred tax assets, which consisted primarily of tax loss carryforwards, would not be realized as a result of Alumínio’s three-year cumulative loss position for the period ended December 31, 2022. Noncontrolling interest Net (loss) income attributable to noncontrolling interest was $(122) in 2023 compared with $161 in 2022.
At December 31, 2022, the Aluminum segment had 868 kmt of idle smelting capacity on a base capacity of 2,968 kmt, an increase from 2021 of 183 kmt in idle capacity due to the San Ciprián smelter curtailment and partial curtailment of the Warrick and Lista smelters, partially offset by the Alumar and Portland smelter restarts in 2022 .
At December 31, 2023, the Aluminum segment had 465 kmt of idle smelting capacity on a base capacity of 2,645 kmt, a decrease from 2022 of 403 kmt in idle capacity primarily due to the permanent closure of the previously curtailed Intalco smelter, closure of one line at the Warrick smelter, and the Alumar and Warrick smelter restarts, partially offset by the partial curtailment of the Portland smelter (see above).
During 2022, AofA continued to record its tax provision and tax liability without effect of the ATO assessment, since it expects to prevail. The tax payable will remain on AofA’s balance sheet as a noncurrent liability, increased by the tax effect of subsequent periods’ interest deductions, until dispute resolution, which is expected to take several years.
The tax payable will remain on AofA’s balance sheet as a noncurrent liability, increased by the tax effect of subsequent periods’ interest deductions, until dispute resolution, which is expected to take several years. At December 31, 2023 and December 31, 2022, the noncurrent liability resulting from the cumulative interest deductions was approximately $199 (A$293) and $174 (A$260), respectively.
December 31, 2022 2021 5.500% Notes, due 2027 750 $ 750 6.125% Notes, due 2028 500 500 4.125% Notes, due 2029 500 500 Other 84 5 Unamortized discounts and deferred financing costs (27 ) (28 ) Total 1,807 1,727 Less: amount due within one year 1 1 Long-term debt, less amount due within one year $ 1,806 $ 1,726 Ratings.
December 31, 2023 2022 5.500% Notes, due 2027 $ 750 $ 750 6.125% Notes, due 2028 500 500 4.125% Notes, due 2029 500 500 Other 82 84 Unamortized discounts and deferred financing costs (21 ) (27 ) Total 1,811 1,807 Less: amount due within one year 79 1 Long-term debt, less amount due within one year $ 1,732 $ 1,806 During 2023, the Company entered into multiple agreements with a financial institution for the sale and subsequent repurchase of aluminum inventory.
The timing and amount of capital expenditures may fluctuate as a result of the Company’s normal operations. 60 Material Cash Requirements As discussed above, the Company relies primarily on operating cash flows to fund its cash commitments and management believes its operating cash flows, cash on hand, and liquidity options will be adequate to fund its cash needs for at least 12 months and the foreseeable future thereafter.
Material Cash Requirements As discussed above, the Company relies primarily on operating cash flows to fund its cash commitments and management believes its cash on hand, projected cash flows, and liquidity options combined with its strategic actions, will be adequate to fund its short-term (at least 12 months) and long-term operating and investing needs.
Refer to Part II Item 8 of this Form 10-K in Note Q to the Consolidated Financial Statements for more information regarding income taxes and deferred tax assets and related activity during the period. 63 Related Party Transactions Alcoa Corporation buys products from and sells products to various related companies, consisting of entities in which Alcoa Corporation retains a 50% or less equity interest, at negotiated prices between the two parties.
Refer to Part II Item 8 of this Form 10-K in Note Q to the Consolidated Financial Statements for more information regarding income taxes and deferred tax assets and related activity during the period.
Alcoa’s ability to fund its cash needs depends on the Company’s ongoing ability to generate and raise cash in the future. In 2022, the Company generated lower profitability due to higher raw material, energy and production costs, partially offset by higher prices for aluminum and alumina and lower restructuring charges.
In 2023, the Company generated lower profitability due to lower prices for aluminum and alumina and higher production costs, partially offset by lower restructuring charges.
On July 26, 2022, Moody’s upgraded the rating of ANHBV’s senior unsecured notes to Baa3 (investment grade) from Ba1 and set the current outlook to stable. Dividend. In each quarter of 2022, the Board of Directors declared and paid a quarterly cash dividend of $0.10 per share of the Company’s common stock, totaling $72 for the year.
In each quarter of 2023, the Board of Directors declared and paid a quarterly cash dividend of $0.10 per share of the Company’s common stock, totaling $72 for the year.
Refer to Part II Item 8 of this Form 10-K in Note R and Note S to the Consolidated Financial Statements for more information regarding current reserves. Litigation Matters. For asserted claims and assessments, liabilities are recorded when an unfavorable outcome of a matter is deemed to be probable and the loss is reasonably estimable.
Changes to the estimates may result in material changes to the reserve that may require an increase to or a reversal of a previously recorded reserve. Refer to Part II Item 8 of this Form 10-K in Note R and Note S to the Consolidated Financial Statements for more information regarding current reserves. Litigation Matters.
Estimates are used to record environmental remediation and asset retirement obligation (ARO) reserves based on the best available information at the time of recognition.
Refer to Part II Item 8 of this Form 10-K in Note L to the Consolidated Financial Statements for more information regarding goodwill. 69 Asset Retirement and Environmental Obligations. Estimates are used to record environmental remediation and asset retirement obligation (ARO) reserves based on the best available information at the time of recognition.

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