Thank you for standing by, and welcome to the Alumina Limited Half-Year Results Conference Call. All participants are in listen-only mode. There will be a presentation followed by a question- and- answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Mike Ferraro, CEO. Please go ahead. Good morning, everyone. Welcome to Alumina Limited's results presentation for the 2021 half-year. Before I proceed any further, please note the disclaimer. All references to currency are in U.S. dollars unless otherwise stated. I'm pleased to announce that Alumina Limited has recorded a net profit after tax of $73.6 million for the first half of 2021, and declared a fully franked interim dividend of $0.034 per share. Our alumina refinery portfolio achieved a first half production record of 6.4 million tonnes. Underpinning this is AWAC's ability to weather worldwide events with a focus on health and safety, protecting the workforce, and safeguarding our long life, low-cost alumina and bauxite assets. 2021 so far has been a turbulent year for both the alumina and aluminum markets. The first half of 2021 has seen some of the highest aluminum prices in a number of years. The alumina price averaged $288 per tonne for the half and is now around $300 per tonne. It has been held back by high freight costs and the rest of the world alumina surplus. The increase in the aluminum price is attributable to strong demand, supply tightness, higher delivery costs, and production restrictions in China. LME aluminum now exceeds $2,500 per tonne. AWAC's production costs have increased in the last half. Whilst the alumina price has not seen the same increase as aluminum, AWAC still maintained a very positive alumina margin. Our resilience and AWAC's position as a low-cost refiner enabled Alumina Limited to continue to provide shareholders with consistent dividends whilst maintaining a strong balance sheet. Despite COVID impacting the alumina and metal markets, we continue to have a positive outlook for both commodities. Looking forward for the rest of 2021, we still see metal production continuing to grow as government stimulus and demand encourage increased smelter production, which will support demand for alumina. We are pleased that the Portland smelter put in place new power arrangements, which ensures the future of the facility and is a great outcome for our investors, Portland employees, and the local community. As the focus on a decarbonized world grows, aluminum has a potentially large role to play due to its light weighting and recycling properties, and we are well-placed to be part of this journey. This all goes well for aluminum long-term demand and consequently alumina as well. Sustainability continues to be an area of focus. We are pleased that key metrics continue to trend in a favorable direction. Refinery emission intensity has continued to decrease and currently averages 0.51 tonnes of CO2 per tonne of alumina produced. The AWAC refinery is a first quartile on the refinery global emissions curve. At Portland, emissions intensity at the smelter decreased by 11% since 2019 to 13.8 tonnes of CO2 per tonne of aluminum, placing Portland as second quartile on the global smelter emissions curve. The smelter continues to benefit from the growth in renewable generation in Victoria. Grid greening, a focus on energy efficiency and fuel mix, and the closure of high-emission assets has resulted in AWAC reducing its CO2 emissions by 42% since 2010. A comprehensive picture of AWAC's sustainability performance will be in our 2020 sustainability report, which will be issued at the end of August. We have also upgraded our TCFD reporting to include risks and opportunities associated with climate change over the next three decades. We are targeting full compliance with TCFD during 2022. Also, this year we joined the Aluminium Stewardship Initiative. The ASI is the global preeminent standard-setting and certification organization for the aluminum value chain. Over the coming decade, we expect AWAC's carbon footprint to continue to improve and exceed the IPCC's targeted 45% reduction in greenhouse gases by 2030. Improvement would be facilitated through potential fuel switches, as well as the continued influx of renewables in Victoria, benefiting the Portland smelter. While smelters benefit directly from a change in generation mix in an electrical grid, decarbonizing an alumina refinery is more challenging. It requires large amounts of energy to generate steam for digestion and calcination. Steam generation has been mainly sourced from natural gas, coal or fuel oil. A potential solution to decarbonize alumina refining could be Mechanical Vapor Recompression. In May, Alcoa of Australia and ARENA announced that they are pursuing an MVR development project with feasibility studies and a trial to be undertaken at the Wagerup refinery. This will involve using renewable energy to power compressors to recycle waste vapor into steam. The major benefit of MVR is that it reduces the energy used for digestion, and when combined with renewable electricity, it could reduce a refinery's carbon footprint by 70%. MVR can also reduce a refinery's water consumption. The MVR research and development demonstrates that AWAC is serious about further reducing its emissions and continue to be a leader as a low-emission alumina producer. I'll now hand over to Grant to discuss AWAC and Alumina Limited's financial performance. Thank you, Mike, and good morning all. I will first give an overview of AWAC's performance and then move on to the financial results of Alumina Limited. The first half continued the trend towards COVID normal, consolidating the recovery of both aluminum and alumina. Whilst the alumina price was constrained by abnormally high freight costs, AWAC's low cost, long life assets once again delivered an impressive result. AWAC recorded an EBITDA of $465 million and a profit after tax of $202 million with strong cash flow from operations, $318 million. AWAC again set production records for both alumina and bauxite. Whilst primary aluminum output remained stable and third-party shipments of bauxite reduced slightly, largely due to port congestion. Increased raw material costs, higher than planned maintenance, unplanned outages, and negative currency movements all contributed to higher alumina costs in the first half. I will now go through AWAC's operating performance in more detail. Whilst AWAC experienced some unplanned maintenance and outage issues impacting costs, its refineries as a whole performed strongly, producing 6.4 million tonnes of alumina, a first half production record. Alumar, Pinjarra and Kwinana all increased production in the first half, while San Ciprián was negatively impacted by industrial action and Wagerup by a mill failure and washing plant issue. The API was about 9% higher in the first half. Since the end of the half, prices have continued to rise and are now trading largely around $300 per tonne, underpinned by a higher China alumina price, which is now above $400 per tonne. AWAC's cash cost per tonne of alumina increased by 12% from the prior half to average $230 per tonne. The higher Australian dollar negatively impacted conversion, bauxite, and energy costs, accounting for around $ 8-$ 9 per tonne of the increase. In addition to the currency impact, bauxite costs were higher, largely due to the crusher move at our Willowdale mine. Higher than expected maintenance, unplanned outages, and increase in power and oil prices also contributed to the higher production costs. Looking forward to the second half, assuming the Australian dollar stays around the current level, the Australian refinery should see improvements to cash cost, driven by the completion of the crusher move and seasonally lower maintenance costs, some of which will be offset by delayed maintenance from the first half. The Alumar and San Ciprián refineries, however, will see significantly higher costs, driven by the large increases in energy and caustic prices we're seeing, the impact of which are lagged and will start to materialize in the second half. Bauxite costs for those refineries will also be higher, driven by increased freight prices and unfavorable currency movements. Lastly, the alumina refinery will experience significantly higher conversion costs related to a damaged bauxite unloader, which we have previously announced. The net effect of these movements is that we currently expect system-wide cash cost to end up being largely in line with the first half. When the rest of the world is in surplus, the API largely approximates the Chinese import parity price, which is simply the China average alumina price adjusted for the cost of importing alumina. It is effectively the incentive price for Chinese smelters to import the rest of the world surplus. Earlier in the half, when there was some regional tightness in the rest of the world due to alumina restocking, the API was at a slight premium. Other than that, it reverted to trading largely in line with the import parity price. A major market disruption occurred this year when the cost of freighting alumina to China spiked from its 10-year largely stable average of approximately $20 per tonne, reaching $48 in March. It now sits over $50 per tonne. Freight costs have a dollar- for- dollar impact on the China import parity price. In the chart, we estimate what the price might have been if the freight was in line with its 10-year average. This shows that the freight shock potentially reduced AWAC's margin by up to $16 per tonne for the half, with the impact concentrated into the second quarter. If we make the adjustment based on spot prices today, the import parity price would be over $330 per tonne, which if API was around that level, would see AWAC's margin in line with its long-term average at around $100 per tonne. I'll now talk to AWAC's full-year outlook. Despite operational disruptions, we expect alumina production to remain unchanged at 12.8 million tonnes, with all locations producing near or above nameplate capacity. Third-party bauxite shipments were lower than expected in the first half due to port congestion and loading issues predominantly caused by COVID changes to schedules and policies. Some of this will be recovered in the second half, but the forecast shipments for the year has been revised down marginally to 7.4 million tonnes. Portland's first half EBITDA included $20 million in revenue recognition relating to the final adjustment under the Portland Restart Assistance Package established in 2017. While this won't be repeated in the second half, the smelter will benefit from new lower energy contracts and aluminum prices, which are now trading significantly higher. Sustaining CapEx includes the completion of the crusher move at the Willowdale Bauxite Mine, as well as the construction of residue storage areas and tailing ponds at Alumar and Juruti. It is now forecast to increase to around $240 million, driven by the higher Australian dollar and some unplanned maintenance. AWAC's forecast for cash restructuring-related items has decreased to around $65 million due to delayed remediation activities at Point Comfort. Let's turn to Alumina Limited's results. Alumina Limited recorded a net profit after tax of $73.6 million. Strong result as AWAC and the global economy emerged from COVID. Alumina announced a fully franked interim dividend of $0.034 per share to be paid on the 15th of September. This continues to demonstrate the company's ability to pay healthy dividends through the cycle, representing an average dividend yield over the last five years of 7.5%, fully franked. As previously announced, any excess cash benefits relating to AofA's disputed transfer pricing tax assessment is quarantined. To that end, we held back $30 million from the interim dividend. Going forward, the tax shield benefits for AWAC are largely immaterial and will not be quarantined from cash available for just dividends. Given Alumina Limited has virtually no debt and access to $350 million of facilities, we're in a strong position to withstand any further shocks, as well as take advantage of opportunities as they arise. We have great confidence in AWAC's Tier 1 assets and believe that its margins should track back towards long-term average once we see the Handysize freight costs normalize. Thank you. I'll now hand back to Mike to provide you with an overview of the market. Thank you. In the first quarter of 2021, higher LME prices encouraged the rest of the world's smelters to ramp up and restart some capacity and to add to alumina stocks. This drove an increase in alumina demand and some regional tightness. API averaged $299 per tonne in the first quarter, $20 higher than the second half of 2020. Alumina prices were lower in the second quarter due to abnormally high Handysize freight rates to China, reduced the Chinese import parity price. API averaged $288 in the first half of 2021. The reduction in alumina output at Alumar in July has caused a shortage in the Atlantic. The API has since increased to around $300 per tonne. The import parity price has risen recently above $300 per tonne with a higher Chinese alumina price, currently at above $400 per tonne. This should underpin the API while supply outside China remains in surplus, even once Alumar returns to full production. As this graph shows, the 10-year Handysize freight rate from Australia to China averaged $19 per tonne from 2011 to 2020. Due to a perfect storm of increased costs, COVID impacts, late harvest issues, shipping disruptions, and decreased availability, the rate reached $48 per tonne in March 2021. The import parity price, as Grant noted, is the Chinese average alumina price adjusted for the cost of importing alumina. The port and handling costs are small and do not change much. The VAT is fixed at 13%. Therefore, the two key variables are the Chinese domestic price and the freight price from Western Australia to China. There has been an alumina surplus to smelting needs outside China this year. As expected, this is being exported to China as a market of last resort. In these circumstances, the alumina price outside China typically approximates to the Chinese import parity price. Therefore, the higher the freight cost, the lower the import parity price into China. [audio distortion] related and late harvest issues have abated. However, a number of the factors behind high freight costs for small ships are continuing to impact rates. It is difficult to estimate how long these factors will last and when rates will fall again to the long-term average, which should result in an increase in the alumina price in times of alumina surplus outside China. A surplus of 1.4 million tons of smelter-grade alumina was produced outside China in the first half of 2021 and was exported to China. This is in line with the full-year surplus we forecast in February. We expect both alumina and aluminum production to grow outside China in the second half, and for the global alumina market to be broadly balanced after a further 1.6 million tons of alumina exports to China. Chinese metallurgical alumina production is expected to register a 6% growth in 2021 to meet the 5% growth in primary aluminum production. The rest of the world metallurgical alumina production growth of 2% is forecast for 2021. Given China's cap on primary aluminum capacity as well as strict carbon policies, we have seen one Chinese primary aluminum smelter project under consideration in Indonesia. In China, input costs have surged since May. This included domestic bauxite, caustic soda, and particularly coal. As a result, we saw the Chinese marginal alumina production cost increase by 9% from February to $376 per ton by the end of the first half. In the second half of 2021, Chinese alumina prices are forecast to be under continued upward pressure given high production costs, potential supply disruption caused by China's carbon policies, as well as logistics disruptions caused by potential COVID outbreaks. These cost pressures should underpin the API. Global aluminum demand has bounced back this year to around pre-COVID levels. We forecast over 6% growth for the full year. We expect global aluminum demand growth to ease in 2022 and 2023 to between 2% and 3%, and rest of the world aluminum demand to grow by 3%-6%. In the medium to longer term, we anticipate strong demand growth as the world decarbonizes and aluminum's lightweight and recycling qualities become more highly valued. More aluminum is required in clean energy technologies, from solar panels and wind turbines to electric vehicles and electricity grids. The International Aluminium Institute forecasts global demand for aluminum will grow by 88% from 2019 to 2050. This will require growth in both recycling rates and primary aluminum production, which is positive for the medium to longer term outlook for alumina. To summarize, despite abnormal freight markets disrupting our margins, Alumina Limited had a solid first half in 2021, thanks to our world-class, low-cost global assets, which enables us to continue generating consistent dividends. This year the rest of the world alumina market is in surplus, that surplus will be absorbed by China. Increasing costs for refining in China is underpinning the API. We expect continued improvements in our margins once freight costs normalize. In the longer term, regarded as a metal of the future, a strong demand growth for aluminum is expected, especially in a decarbonized world, which will support alumina demand. AWAC will continue to focus on carbon emissions and other sustainability initiatives to ensure it remains a low-emission producer compared to the rest of the industry and to meet community expectations for addressing climate change. Thank you for listening. I'll now hand back to the moderator for questions. Thank you. If you wish to ask a question please press star one on your telephone. And wait for your name to be announced. If you wish to cancel your request please press star then two. If you're on a speaker phone please pick up your handset before you ask a question. We'll pose momentarily to assemble our roster. Our first question comes from Rahul Anand from Morgan Stanley, Australia. Please go ahead. Hi, Mike, Grant, and Charles. Thanks for the opportunity. First one's on the costs. Perhaps, Grant, if you can help us understand some of that increase. You talked about it in the introductory comments. I just wanted to touch on that a bit more if I can. Firstly, on currency, what are your estimates for the full-year guidance? As the currencies come off, what type of impacts are you expecting? Now, obviously, caustic is a six to nine-month lag, and we're probably going to be in a higher caustic environment for the second half. The last part of that question is really that crusher move at Willowdale. Are all the impacts now through, and are we not going to see any leftover in the second half? Thanks. I'll come back with another one. Thanks. Sure. Thanks, Rahul. As you have identified, there's quite a few factors that are driving costs, some up, some down, for the second half. Largely, the crusher move, well, the actual crusher move's done. There is still some infrastructure being moved around it, but that's not really impacting cost dramatically. The cost in the first half were up due to some of the haulage issues. You're right that over the last couple of weeks, the Australian dollar has come down, but we've sort of factored that now into my comment this morning that if that had have stayed up in the $ 0.75, $ 0.76, $0.77, you would probably would've seen costs go up in the second half, driven, as you said, by a lag in caustic and a little bit of a lag in oil prices as well in some of the contracts. They're the two biggest raw material cost drivers for the second half. Also some costs coming out of some delayed maintenance from the first half due to some unplanned maintenance in the first half, which we highlighted. Also the bauxite unloader is going to have some incremental costs in the second half. There is cost pressures. It's going to mitigate what we would normally see as a second half decline in cost just because of maintenance schedules. We're probably going to end up, as we currently sit with the current sort of spot around $ 72, we'd probably end up plus or minus where the first half was. Okay, perfect. One quick follow-up on that. Caustic, how's the group level consumption tracking currently in terms of per ton of alumina produced? Are we sitting at still that around 95-100 mark, or how should we think about that? No. We normally sit sort of in the early 70s. We're probably a little bit higher in the first half just because, again, of the Willowdale crusher move. When you use new bauxite, you often use a bit more caustic. We're probably in that sort of early 70s, mid-70s, late 70s kilos per ton, depending on how the operation is performing. That's one of our advantages over the long term is we don't mind caustic prices going up because it drives the marginal costs of other producers up higher than it does ours. It does drive our costs up, obviously. Indeed. Yes. Thanks. Look, the second question is around growth projects, perhaps one for Mike. Mike, when would the right time be to start looking at those studies again that you shelved at the start of COVID? Well, we're constantly monitoring that, but at the moment, it's fair to say they're still sitting on the shelf, and the best I can say is that we'll continue to monitor it. We don't have a view as to when the right time. It'll depend on a range of factors, the amount of supply coming onto the market, our assessment of alumina prices, and so on. We don't have a set date yet. We just regularly monitor it. Okay, perfect. One final question is around that ATO dispute. Any updates around that? How should we expect what happens after a resolution? If you do win that case, you have quarantined a bit of money because of the tax shield, and then if you do lose, you've already benefited from that tax shield. What are some of the impacts? Can you please remind us? Just because it's been going on for some time, it'd be good to get an update on that. Thanks. I'll go through the process where it's up to, and Grant can talk to you about the impact of the tax shield at the end of it. Basically, it's fair to say it's probably going slowly. We had expected it to be more advanced at this point in time. We're still in engagement and consultation with the ATO and having various workshops and in the process of finalizing submissions to put to them. We had expected that possibly the ATO would respond by the end of this calendar year. I'm not so confident that that will be the case due to delays, COVID impacts, inability to meet, and so on. I suspect it will be sometime next year. I can't really make a call. After that, if the response from the ATO is not positive, then we would have the right, which we would, to institute proceedings. You'd be talking a few years after that as you go through various courts and potential appeals. Grant, I'll hand over to you on the shield. Sure. I'll try and keep it simple. The answer is that if it gets withdrawn or we win, everything that's happened to date gets largely reversed. If you remember, there's two factors here. One is, AofA got a $707 million tax deduction from the initial assessment, which when you work through to then they also paid an amount in terms of the 50% of the primary tax for the initial assessment. That all works out to about the $30 million our share that we've received in what we're calling excess tax benefit for the year, which we've held back. What happens if we win? The AofA now need to put that $707 million back into their assessable income, so they pay tax on that. They net that off against getting the prepayment back. If exchange rates stay much the same, it's about $30 million our share as well in U.S. dollar terms. There are some, as I called out, there's still some interest deduction going on. It's relatively immaterial, so that number will build a bit. At the time, when that event happens, AofA will be distributing lower distributions to us, and we will use the $30 million we quarantined to top up the dividends on the way through. That's the option that we have and we're looking at now. Okay. All right. Perfect. That's helpful. Thanks very much for that, Grant. Mike, I'll pass it on. Thank you. Our next question comes from Paul Young with Goldman Sachs. Please go ahead. Morning, Mike and Grant. A few more questions on unit costs and more broadly, across the industry. First of all, just an observation on your costs. Thanks for the commentary around broad guidance of flat costs in the second half. That'd be a great outcome if you can orchestrate that considering the cost inflation we're seeing. Just on that, obviously, as cost inflation comes through, it's obviously good news for you guys, considering the top end of the cost curve moves up, and you just want your margins to expand more than the top end of the curve, which always happens. Just on that, you've called out the high coal prices are coming through and flowing through the Chinese cost curve. Do you get any sense from the consultants that you use, and experts that there are more contract resets on gas and coal flowing through in the second half on the Chinese cost curve? The second question is on the Handymax unwind, maybe one for Grant. This one, I guess, took us all by surprise in the first half, and yourselves, it sounds like. Everything you were saying about the potential unwind of the Handymax freight rate is, I really just cannot see that happening considering the oil price is still rising and the freight is just super tight globally. Can you maybe just talk about what gives you any conviction at all that the freight rate, actually Handymax freight rate, might actually unwind in the second half? Maybe I can take the freight point, and Grant can have a look at the cost aspects of it. We don't know. We can't really make a call at this stage as to whether the freight rates will unwind in the second half or later. We certainly talk to a range of industry experts, freight experts, and so forth, and it really depends, Paul, on the COVID disruptions being resolved or largely resolved, and the market adjusting back to a normalized level. We really can't call it at this point in time. On your points about cost increases in coal and gas, I can't really answer it as to whether producers other than ourselves are putting in place resets. We do know that coal prices are going up. We do know that in China, some refineries are in the process of converting from coal to gas, and that will increase their cost of production as they use to some degree imported gas. We do expect to see continued cost pressures upwards. Grant, is there anything you want to add to that? No, I think that's right. I think the cost inflation, as you called out, Paul, is something we're not, especially if it's raw material costs, it's not something we're unhappy about. We're seeing that already, especially in the last number of weeks. The China price has been driven up over $400, I think it's $407 today, which is largely driven by those cost pressures coming into the 90th percentile of the local providers. I think in terms of the freight, oil is obviously one part of it, but oil is not really that much higher than it has been at different parts in the last 10 years when freight's been relatively stable. The major drivers, as Mike alluded to, are more about COVID and some supply and demand issues, which are the things that need to unwind for that to get back somewhere near its long-term average. Again, we don't know the timing of that. I think the trade disputes and wars have had a bit of an impact as well because different trade routes have to be worked through. For example, the coal that was exported from Australia to China is now going to different places, and China's buying from other parts of the world. That involves longer freight times and inability for ships to travel to the same ports at the same speed that they were doing before. That's causing timing issues as well. Okay, thank you. Next question's on Portland. It's finally generating some free cash, and the outlook actually has improved for the smelter. If I look at, I guess the go forward and the viability of the smelter, a big part of it is switching to renewables, and it really could be a decent test case for the industry. It's the first, I think, smelter in Australia that's actually chewing or consuming, I should say, some renewables. Can you maybe just step through what the plan is on the increased percentage of renewables? I noticed that, and correct me if I'm wrong, but the guidance for aluminium has been reduced a little bit. Is that because you're seeing some minor productivity challenges or impacts as you transition to more renewables? On the renewables front, we see through the renewables coming through the electricity grid in Victoria. We think that by the end of the decade, we could be using over 40% renewable energy. That doesn't include any new developments that might take place in sort of big battery storage and so forth. But we're certainly not forecasting that into our assessment because you would need a very large battery storage facilities to take renewable energy to make sure that we have firm power at Portland. But certainly, with the grid greening that's going on in Victoria, we certainly expect an increase in renewable consumption, as I said, to probably close to 40% compared to just over 30% at the moment. Sorry, remind me your other point, Paul. Yeah. It's on productivity impacts. Oh, productivity. On increasing renewables. Yeah. I think what's happened is that as we sort of start to focus on that facility and more time is being spent on relining pots rather than patching and taking a longer-term approach, taking into account that it will remain open. That's having some impact as some of the pots need to get a full relining, and that takes time. Yeah. Okay. That does make sense. Thanks, Mike. Thanks very much. Welcome. Our next question comes from Lyndon Fagan with JP Morgan. Please go ahead. Thanks very much. Look, I just wanted to ask about the EcoSource branding again. I'm just wondering if you've had any inquiries specifically about that and whether any customers are expressing an interest to pay more for it. I'm just trying to work out the purpose of that branding, basically, at this stage. Thanks, Lyndon. It's still very early days for EcoSource. There are customers that are expressing strong interest in acquiring EcoSource, and I know one customer, a significant customer, is very keen to get as much as it can. Are we getting any material premiums on that product yet? The answer is no. I think we'll still need to see the development of consistent premiums coming through in green aluminum before we see a movement in the EcoSource product. I think it's a good product. It is something that customers do want, but I think it'll take time for it to evolve as a premium product at a material level. I guess, what do you think is the end game in terms of what premium you might be able to extract from it and when, I guess? It totally depends on the premium that's achievable on green aluminum, and as it goes down to Scope 1 and 2 assessment in that green aluminum, that's where it becomes relevant as to how long that's going to take. I would hope that it'll probably be faster than people would ordinarily think because of the significant movement to decarbonize the metal and use it as a renewable source. Right. The next question, just a quick one on CapEx. Obviously, it's gone up a little bit in the guidance. At $ 265 million, we're a fair bit higher than the five-year average. Just wondering what you think sort of long-run sustaining CapEx is for the AWAC business now. It's Grant. It's a good question. This year, obviously, we've had the Willowdale crusher remove, which has been quite elevated, and most of it done in the first half where the Australian dollar was quite high. A fair amount of that is just a translation back to U.S. dollars from where we sort of thought at the beginning of the year. Obviously, we've got a little bit of work to do with the bauxite unloader as well in Alumar. It is elevated. We probably will continue to have some elevated CapEx over the next number of years, just with some plateau move still being worked on in Juruti, another mine move in Australia. I'd say over the rest of this decade, potentially we have slightly higher than the long-term average, but that's all being worked through in terms of how we plan that, how we smooth that. These levels are, I'm not saying this is the new norm, but it's likely to be a little bit more elevated for the next little while. Great. Just the final one on Portland. If we've got sort of $ 37 million of EBITDA, but then we take out the $ 20 million of government assistance, how do we look at it going forward? Is that the profitability we should expect going forward? I'm just wondering if you can, obviously the price will move around, but as far as what we reconcile for costs after doing those sums, is that where we're at going forward, roughly? No, that's where we were in the first half, with obviously a different energy contract than we've got in the second half. You probably won't, given their commercial in confidence, we won't get a lot of visibility until you see them, unfortunately, in the second half. Obviously, they're lower. Energy makes up 35%-40% of the cost, and they're relative, that's a good portion of the costs. Really it's difficult to give guidance on that without talking about the energy contract specifically. As Mike did also call out a bit, we'll probably not just have lower production, but slightly elevated costs from relining the pots that we'll work through. 2022 certainly will have a better outlook on cost as well. We are a little bit of catch up in terms of now taking a longer-term view of the refinery, of the smelter, sorry. Look, that's the starting point with lower energy costs and then higher prices. We're obviously expecting to have higher profits in the second half. Great. Will there be any ongoing accounting for government assistance in other forms with the new structure? Not like we have had, because it's a very different arrangement. Mostly the federal government is almost like a bit of a fee for service. There might be some timing differences or accruals at different times. The Victorian one probably only really starts to kick in if the smelter doesn't retain its profitability. I suspect the answer's no. It's going to look a lot cleaner than it has in the past in terms of just margin and costs. Great. Thanks a lot, guys. Thank you. Our next question comes from Hayden Bairstow with Macquarie. Please go ahead. Good morning, guys. Just a couple of quick ones on the volume. I'm just interested to understand the reduction in bauxite third-party shipments. Is that just Kwinana that's giving it issues with port access? Or is there other issues that we need to think about there? Also on alumina, obviously the Alumar outage, just understanding what's factored into the guidance for you guys for that and hence the reason for the no change in your guidance on alumina. Thanks. I can tackle that. The third party is probably more out of Guinea than it is out of anywhere else in terms of the reduction. It's just largely to do with, again, it's relatively small in the scheme of things, and particularly when you compare it to the overall profitability of AWAC. It's largely just to do with timing and congestion everywhere, and we don't expect to make up for it. Given where the third-party bauxite market is as well, there's no necessary urgency to move heaven and earth to increase that. It's largely just taking a pretty pragmatic view to where we think it could be at the end of the year. On the bauxite unloader, as we sort of called out, it was about 3%-4% of our production on a daily basis. That when it comes back on, we've made some assumptions. It's relatively small in the scheme of things. Whenever we provide guidance, it's usually rounded. It probably is changed from where we hoped it might get to, but it's unchanged from where we forecast at the beginning of the year. We'll have opportunities in the fourth quarter to make up for some lost production on some of the other refineries as they kick in. Okay, great. Thanks, [audio distortion]. Our next question comes from Peter O'Connor with Shaw and Partners Limited. Please go ahead. Good morning, Mike. Good morning, Grant. Good morning, Charles. Good day. Four questions from me. Financials. Grant, just the dividend that flowed through from the joint venture, doing the mechanic or the analytics of how that flows, it looked like it should have dropped out about $ 0.032. It came out at $0.034, which is nice. Why and how? I think it should have been about $0,034. Maybe I can take that offline and make sure, check your numbers versus our numbers. No, there's often a little bit of rounding, but not by $ 0.002. I haven't got the 5A right in front of me, but it's really just taking the $ 137 less the costs. It is in our 4D. I can refer to the page a bit later on, Peter, if that's okay. Yes, got it. It must have been the tax number, the way I treated the tax number. Got it. Secondly, on just the operations, Mike, can you confirm with WA just the trend? You gave us a caustic number. Thank you. Just the trend over time, maybe a decade view for the 2020s, what the caustic consumption. It sounds like it's going to stay at 75. Also strip ratio, because you did mention another mine moved somewhere in the future. Peter, we don't have the details of the strip ratio. There's quite a lot of mine planning work going on at the moment, particularly WA, and that assessment won't be completed probably until early next year. Certainly, another mine move at one of the mines will have to be contemplated in the next two years or so. We haven't worked through what the impact of that in the context of transportation, strip ratios, and what costs are involved at this stage. The caustic number of 75 sounds a steady number for the medium term? WA should probably be even lower than that. That's probably at the high end. I would stick to the sort of between low 70s. Okay. Mike, on growth, MRN, thoughts about what may unfold there with mine extensions and mine life expansions and how that plays out? Yeah. Still being worked through as to how large the expansion will be, and that's got to be worked through the joint venture partners. I know there's a range of different opinions depending on needs and, unlike some of the other joint venture partners, we have our own source from Juruti. That would sort of suggest that maybe we would support a smaller, new capacity mine rather than a larger one on an annual basis. That still needs to be agreed, Peter, and worked through. It'll eventually land, and it'll be agreed, and we'll move on. Is part of that agreement, will it involve a change in ownership structure to make that more workable? Well, one of the issues is the arrangements between Vale and Hydro. That's always been a complex issue to sort out in the context of ownership and rights to take tonnage. I think that at least would probably need to be sorted as part of that. Okay. Just lastly, on strategy, Mike, thinking bigger picture and carbon or decarbonizing. Given your portfolio of production and where it goes, i.e. to third parties but also internally to Alcoa. Do you need to think longer term about Scope 3 and where your alumina goes to? What your counterparty risk is in terms of their trend in decarbonization? To that end, are you confident with where Alcoa are headed with decarbonizing in that regard? If you weren't, does that mean you place it elsewhere to customers that are on a decarbonizing route? How does the sales picture look in a decarbonizing world? We're certainly, in the short term, we're seeing no difficulties with Alcoa absorbing its constant share of alumina, taking into account the sort of aluminum prices they're getting these days. They are, it's fair to say, much more attuned these days to the impact of decarbonization and playing on that space. If you've listened to some of their presentations or reviewed them, you'll find that it's playing a very important part in their thinking and strategy and development. They're developing that ELYSIS product, which will move hopefully to commercialization at some stage in conjunction with Rio to remove the impact of carbon anodes in smelting. I'm pretty confident that they are applying their minds and their technology and their capability at the smelting end. They're certainly attuned to dealing with reducing our carbon emissions. They're very proud, I suppose, as we are, that we are one of the lowest carbon emitters in the alumina portfolio. To continue to look at it, and as I spoke about Mechanical Vapor Recompression as well, that assessment's taking place. We've spoken to the internal engineers and experts at Alcoa, in detail around that. We're very pleased with the focus around this area at the moment. Mike, if I just lastly link back that thought you've just said to costs and sustaining capital, which Grant mentioned earlier. Is part of the drift in sustaining capital reflecting decarbonization? If it's not, will it? I think the whole issue of sustainability is having an impact and will have an impact on the entire industry. You think about the impact on residue disposal areas and compliance with the new ICMM standards in the last year or so. I think that's an industry-wide development, and it doesn't place us in any disadvantage in the context of maintenance design structure. I think in the context of carbon, you've seen in China there are disruptions and restrictions coming through because of carbon policies being imposed. You're seeing potentially the development of carbon pricing mechanisms in Europe and China, though fairly lenient on the aluminum sector at the moment in the short to medium term, but will start to have an impact. I think all that needs to be taken into account. On the plus side, well, does it place us at a disadvantage? No. I think we're extremely well-placed relative to the rest of the industry. What does it mean for us long term? Yes, we will need to continue to identify new ways of reducing our carbon emissions, which will depend on technology development when it comes to refining in particular. On the flip side, Peter, you're seeing that the demand for aluminum is growing and will grow because of sustainability and renewable products such as wind farms, such as electric vehicles and so forth, and packaging, where there's a desire for lightweightness and recyclability. I think we're pretty well-placed. Thank you, Mike. Much appreciated. Peter, the page 25 of the 4D is where the reconciliation of the dividend you'll find. Got it. Perfect. Thanks, Grant. Our next question comes from Paul McTaggart with Citigroup. Please go ahead. Good morning. While we're on this topic of decarbonization, I just want to follow up on the MVR project. You mentioned that it has the potential to reduce emissions by 70-odd%. I know you're looking at the feasibility studies around a 3 MW project. Can you give us some sense of potential timing and orders of magnitude of CapEx? Is this a big CapEx spend, or will it be absorbed in that high sustaining CapEx that you pointed to? From a timing perspective, Peter, as you've probably read up. Sorry, Paul. We're going through a pilot project. I think it'll be a number of years before MVR is both proven up and implemented in the refineries, and we'd certainly start with WA, that's the thinking. We're not talking next year, we're not talking the year after. We are talking a number of years. As to exactly how many, I can't give you any more guidance than that. In the context of cost, we have asked that question of Alcoa and explored it with them. That hasn't landed either. That needs to be worked through. Having said that, whilst we think it's material, it's not so significant that it can't be absorbed in the maintenance CapEx down the track. We just don't know what that number is yet. The space is there. It's really bringing in compressors, ensuring they're connected up to the system to work. The technology in theory works, has worked in other industries. It's a question of confirming that it works in our industry. Great. Thanks, Mike. As a reminder, if you want to enter the question queue, you can press star one on your telephone and wait for your name to be announced. Our next question comes from Matthew Hope with Credit Suisse. Please go ahead. Hi, yeah, thanks. Just wanted to look at a couple of things. Firstly, on bauxite. Obviously, the freight cost now is more expensive than the actual cost of the material. I understand you've kept it running because the freight was contracted, but at what point do you have to recontract freight? I'm really wondering whether this bauxite trade can be sustained into next year. Does it fall away just because potentially the freight's too expensive? Secondly, just on this gas contract, with your new gas contract in WA. You've obviously been fairly secretive over the years about what that contract is. Just in terms of the parameters of it, is it going to be a more volatile contract? Have the terms changed? It obviously used to be a rolling 16-quarter pricing average. Is it still that sort of smoothing effect in the pricing, or is it going to become more jagged going forward? On the gas contract, no. It's relatively stable, predictable contractually. Obviously, some of these things have some complexities into it. The changes will be more about usage than it will be about pricing. No, it's a relatively stable contract for that gas. On bauxite, again, third-party bauxite, as you've probably seen, is a relatively small part of our business. The freight is actually paid for by the customer in that particular notion. It's more of an issue for the refinery that takes it than it is for us. Obviously, we're always working with customers to figure out how we can get the bauxite as efficiently freight-wise as we can. That's just more of an issue for refineries that take it than anything else. We certainly haven't, and as Paul said, over the last couple of years, talked about growing the third-party market. Not to do with freight, more to do with the market's relatively oversupplied. That's why we've got a bit more of a sanguine outlook for third-party bauxite. We have started to do some transshipping in Guinea with the bauxite, so that is loaded onto larger ships. Whilst the costs, yes, they continue to rise, they are not as acute as the freight costs for smaller shipping. Thanks. Just one final one if I could, just on a sort of a bigger picture issue. You mentioned that China, you estimate it's running at about 43 million tonnes capacity at the moment, and obviously there's a 45 million-tonne capacity cap. Why do you still feel that the market for alumina is going to grow? Might there be a pause once China hits that 45 million tonnes, and given that there's not that many developments of new smelters outside of China? I think if you look at it from a global perspective, the ultimate demand will be much higher. Certainly, the IAI, International Aluminium Institute, is forecasting significant growth in demand for aluminium over the longer term. Also in the medium term, we will see additional smelting production coming on stream in the rest of the world. We certainly see China becoming largely self-sufficient for its needs. It may go to that 45 million cap. There will be some blips along the way as they focus on decarbonizing their metal production. There has been announced a Chinese company is going to build a smelter outside of China, and there are a couple of refineries that have been built by Chinese in Indonesia, which intention is to build some smelting capacity to take that offtake. I think there will be continued growth. Okay, thanks. There are no further questions at this time. I'll now hand it back to Mr. Ferraro for closing remarks. For listening today. As you've no doubt seen from our presentation and heard and experienced yourself, it has been a fairly tumultuous period this year in the first half, and it appears to be that it will continue in the context of freight rates, in the context of increases in costs coming out of China, which will underpin and help the rest of the world API price. We've also seen overnight that there's been a supply disruption at the Jamalco Refinery, which has shut down production with a sort of a nameplate capacity of about 1.4 million tons coming out of a major fire in its powerhouse. We're not sure what impact that had, but any disruptions in a relatively balanced market may have some impact, and we'll wait to see how all those developments unfold. From our perspective, certainly in the short term, the risk is in the upside rather than the downside for those reasons and more. Thank you very much for listening, and have a good day. That does conclude our conference for today. Thank you for participating. You may now disconnect.