Good afternoon, and welcome to the Alcoa Corporation Third Quarter 2023 Earnings Presentation and Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to James Dwyer, Vice President, Investor Relations and Pension Investments. Please go ahead. Thank you, and good day, everyone. I'm joined today by William Oplinger, Alcoa Corporation President and Chief Executive Officer, and Molly Beerman, Executive Vice President and Chief Financial Officer. We will take your questions after comments by Bill and Molly. As a reminder, today's discussion will contain forward-looking statements relating to future events and expectations that are subject to various assumptions and caveats. Factors that may cause the company's actual results to differ materially from these statements are included in today's presentation and in our SEC filings. In addition, we have included some non-GAAP financial measures in this presentation. For historical non-GAAP financial measures, reconciliations to the most directly comparable GAAP financial measures can be found in the appendix to today's presentation. We have not presented quantitative reconciliations of certain forward-looking non-GAAP financial measures for reasons noted on this slide. Any reference in our discussion today to EBITDA means adjusted EBITDA. Finally, as previously announced, the earnings press release and slide presentation are available on our website. With that, here's Bill. Thank you, Jim, and thanks to everyone for joining the call today. Before we get started, I want to acknowledge the important contributions from our former CEO, Roy Harvey. Roy played a key role in our evolution into a stronger and more resilient business, and he was pivotal in our 2016 launch as a pure-play upstream aluminum company. He led the company through some difficult market environments, including COVID, and his commitment to making Alcoa successful never wavered. He is serving as a strategic advisor to me for the remainder of the year, and I appreciate his counsel. I've interacted with many of you over my 23 years with Alcoa Inc. and Alcoa Corp, both in my CFO and COO roles, and I'm glad to be with you again today. In my first few weeks in this role, I've met with employees, customers, and industry participants. Several questions keep coming up in those conversations, such as: What are our priorities? And what are Alcoa's key challenges? First, to address the constant in our company, our values. At Alcoa, we act with integrity, operate with excellence, care for people, and lead with courage. These aren't statements that simply live on a plaque. These are the values we expect every Alcoan to live daily. I'm proud to lead a company guided by strong values. Our relentless focus on the safety of our employees, contractors, and visitors to our sites will continue, as will our efforts toward our sustainability targets. As I step into the CEO role, I want to make it clear that I have ambition for this company. That ambition manifests as an expectation of excellence in everything we do, from EH&S, operations, maintenance, and commercial excellence. Alcoa has an impressive history of innovation and leadership in the industry, and we plan to further build on that and strengthen our market connections. We will be action-oriented and make decisions guided by our values, sound business principles, and with a focus on creating value for our stockholders. We've made good progress this year. Across our system, we've improved stability, and we intend to build on that operational momentum. So for the near term, the focus will be gaining approvals for bauxite mining in Western Australia. This is our top priority. We are making progress. We have the right team in place for success, and we understand the improvements that our stakeholders are expecting. We'll be driving for further operational improvements in Brazil. The ongoing startup at the Alumar smelter in São Luís hasn't gone as planned. We now have conditions in place for a successful restart from here forward. Next, we will be focusing on productivity across our system, with every site focused on margin improvements through operational productivity going into 2024. We have action plans in place to improve the financial results of certain locations in the system that have been underperforming. Each operation is working to become more globally competitive. In the long term, we remain bullish on aluminum as the material of choice. Megatrends continue to drive increased aluminum usage globally, from further EV penetration to the substantial future demand in solar installations. Alcoa is uniquely positioned in the aluminum industry for a world focused on carbon emissions and other sustainability issues, which we are addressing from three vectors: primary metal production with our joint venture, ELYSIS, post-consumer scrap usage with our ASTRAEA technology, and carbon and residue emissions with our Refinery of the Future initiative. So before I address the third quarter results, let me reemphasize, we are laser-focused on improving the short term, and we are working on developing unmatched, industry-leading technology for the long term. Let's begin with safety. I'm disappointed that we had one serious injury with life-altering implications in the third quarter. A worker at our Juruti bauxite mine lost portions of two fingers while performing maintenance on a bulldozer. While this event is unacceptable, overall, we are making progress on preventing fatalities and serious injuries. So far this year, our Total Recordable Injury Rate has improved by 16%, and Days Away, Restricted, or DART Rate is 27% better on a year-over-year basis. Also, we are increasing the number of on-site field verifications for leaders to evaluate the effectiveness of critical safety controls and coach workers on safety improvements. Now moving to the financials. We reported an adjusted net loss for the third quarter of $1.14 per share, and $70 million in adjusted EBITDA, excluding special items, driven by lower average realized prices for both alumina and aluminum. Improvements in both raw material and production costs did not fully offset the impact from lower realized pricing in both of our segments. We ended the quarter with a strong balance sheet and a cash balance of $926 million. We've made meaningful progress on our approvals for bauxite mining in Australia during the quarter and have more visibility on the timeline for decisions from the government and regulators. I'll address this more fully later. In our operations, our Quebec smelter system set production records in the quarter, and we're investing there to increase our casting capabilities for value-add products. From a commercial perspective, we also continue to be encouraged by the reception from customers for our Sustana line of low-carbon products, which includes EcoLum aluminum and EcoSource alumina. And while demand in some key end markets remains soft, there are signals for a rebound in 2024. We'll talk more about that macroeconomic view of the market in a moment, but first, let me turn it over now to our CFO. Molly, please go ahead. Thank you, Bill. Revenue was down 3% to $2.6 billion, as higher shipments only partially offset lower realized prices for both alumina and aluminum. The net loss attributable to Alcoa increased $66 million to $168 million, and the loss per share increased from $0.57 to $0.94. On an adjusted basis, the net loss attributable to Alcoa increased $140 million to $202 million. The difference in net loss is primarily related to the reversal of a valuation allowance on deferred tax assets in Iceland. Adjusted EBITDA declined $67 million to $70 million, as part of the decrease in revenue was offset by lower costs. Let's look at the key drivers of EBITDA. Third quarter 2023 Adjusted EBITDA declined $67 million to $70 million, as lower metal and alumina realized prices were only partially offset by lower raw materials, energy, and production costs. Alumina segment EBITDA increased $20 million sequentially. Lower raw material costs, primarily caustic soda, and lower production costs in Brazil and Spain, more than offset lower alumina index prices. We also saw the benefit of lower raw materials and production costs in the aluminum segment, as well as energy improvements, but not enough to overcome the impact of lower metal prices. Other costs outside the segments were unfavorable $56 million. They reflect unfavorable intersegment elimination, higher transformation, demolition costs, and higher other corporate costs. Here's a deeper dive on raw material costs. This year, we've seen substantial improvement in our segment EBITDA due to lower prices for our key raw materials. Market prices for caustic soda, calcined petroleum coke, and coal tar pitch continued to decline in the quarter and are expected to improve further. Company-wide, we have seen an $86 million EBITDA improvement over the first nine months, $32 million in the alumina segment and $55 million in the aluminum segment. These lower raw materials market prices work through our financials on a lag basis, so we expect further improvement in the fourth quarter. Let's now move to other key financial metrics. Our key financial metrics are consistent with our earnings results. Year-to-date return on equity is -8.7%. Our third quarter dividend added $18 million to stockholder capital returns, which total $54 million year-to-date. Free cash flow, less net NCI contribution, was negative $36 million in the quarter, increasing proportional adjusted net debt by $0.1 billion and decreasing the cash balance by a similar amount. Year-to-date, capital expenditures and cash income taxes remained our largest use of cash. In the third quarter, days working capital improved five days to 50 days on lower inventories. The improved working capital performance provided a significant source of cash in the third quarter, entirely offsetting the previous year-to-date working capital cash use. The working capital improvement is evident on the next slide. Cash balance declined $64 million in the quarter. The largest source of cash was a working capital reduction of $183 million, primarily from lower inventories, followed by EBITDA of $70 million and net non-controlling interest contributions of $40 million. We expect working capital to be a source of cash in the fourth quarter. Capital expenditures were the largest use of cash at $145 million, as CapEx typically increases as we move through the year. Notable this quarter were settlement payments of $75 million to former workers at two smelters that Alcoa previously owned in Spain, as well as environmental and ARO spending of $52 million. Let's turn to the outlook for the final quarter of 2023. Our full-year outlook has one favorable adjustment. We expect other corporate expense to improve $10 million to $120 million. At the segment level, in alumina, we expect an improvement of approximately $50 million due to lower raw material prices, better production costs, and higher volumes, partially offset by approximately $10 million in higher energy costs. In addition, we expect impacts related to lower bauxite grades in Australia to be consistent with the prior two quarters. In the aluminum segment, we expect unfavorable energy impacts of approximately $30 million, mainly due to CO₂ Compensation changes in Norway. Additionally, we expect $35 million in raw material price improvements to be offset by unfavorable product mix and higher production costs. Finally, alumina costs in the aluminum segment are expected to be favorable by $5 million. Below EBITDA, note that the third quarter other expenses included one-time negative impacts of $35 million, primarily foreign currency losses, and we expect the fourth quarter operational tax to range between $10 million-$20 million. Now, I'll turn it back to Bill. Thank you, Molly. Next, I'd like to recap some key items from our global operations. Each of the three smelters in Quebec, Station Beau, Baie-Comeau, and ABI in Bécancour, have set year-to-date production records for tons per day. When totaled together, they've performed the best since our 2016 separation. This week, one of those smelters, ABI, announced a planned investment to further improve its casting capabilities for a broader array of alloys for value-add products. The new equipment should enable us to deliver products with additional sizes, smoother surfaces, and better dimensional control for the automotive and packaging markets. We are also focused on operational improvements from assets across our global system, driven by productivity enhancements. We took our first action last month at our Kwinana Refinery in Western Australia, with a restructuring plan that is intended to improve that facility and save $10 million annually, with more improvements under consideration. In Brazil, we're employing a deliberate and methodical approach to the Alumar Smelter restart, which is now operating at approximately 65% of the site's total capacity and has restored stability to the pots that have been restarted. Finally, we are committed to conformance with the global industry standard on tailings management. Alcoa has voluntarily disclosed information from all of our global tailings, and we've worked with the International Council on Mining and Metals, or ICMM, to improve the industry's management of tailings. This has been a significant undertaking, and we worked diligently, including with third-party reviewers, to provide additional information about impoundments with the highest classification ratings before an August deadline set for ICMM members. Now, let's turn to an update on our mining approvals in Western Australia. Our teams have continued to work with relevant state government departments to advance our annual approvals for bauxite mining at the Huntly and Willowdale mines. Securing an approval is an absolute priority for our company, and we are working toward a final resolution in the fourth quarter. We've submitted a revised Mine Management Program, or MMP, for the period 2023 to 2027. This updated MMP is now being reviewed by regulators. We believe this revised plan meets evolving stakeholder needs as it includes numerous enhancements designed to specifically address expectations of the government. It includes additional controls for the protection of drinking water, including increased distances from reservoirs, and addresses biodiversity concerns through a plan to accelerate rehabilitation. Separately, let me briefly discuss the Western Australian Environmental Protection Authority's process. In August, the agency completed a public consultation period on whether it should assess all or part of the current and next MMPs. The WA EPA has indicated that it expects to decide on this before the end of the year. We have demonstrated our commitment to transitioning to a more modernized approvals framework for new major mine regions. That's why we proactively began a formal assessment in 2020 from the WA EPA for our two new major regions for the Huntly Mine, Myara North and Holyoake. But this will take some time. The assessment for Myara North and Holyoake is ongoing, and we do not expect the first bauxite ore from these new regions any earlier than 2027. We do expect the bauxite grade from these regions to be more consistent with the higher grades we previously experienced at the existing Myara Central. However, until then, we expect similar bauxite quality as compared to recent grades. As Molly described, we are actively working to mitigate the financial impacts of these lower grades while also looking for opportunities to optimize productivity. Next, let's move to some highlights from a commercial perspective and discuss some demand trends. First, customers are increasing demand for our Sustana line of products. The Sustana line is a small but growing proportion of our overall sales volume. Sales of EcoLum, our low-carbon aluminum, are strong in Europe, and orders are being placed in North America, too. Overall, we expect our annual global sales volume for EcoLum to increase approximately 60% for 2023 when compared to last year. Also in the third quarter, we made our first sale of the non-metallurgical variety of EcoSource, our low-carbon alumina brand. Earlier this year, we started offering non-metallurgical varieties in addition to existing smelter-grade EcoSource. Alcoa is one of the world's largest producers of non-metallurgical alumina, which is used in everything from refractories, sandpaper, and water treatment processes across the world. Our Sustana line has the aluminum industry's most comprehensive portfolio due to the range of products we offer from alumina to metal. Meanwhile, we also have customers coming to us due to our history of alloy development. Last month, we were recognized for the second year in a row with an award from the North American Die Casting Association for an Alcoa-developed alloy used in Mega Castings for electric vehicles. We are selling and licensing alloys that can be used to make these one-piece, high-pressure die castings. With our alloys, OEMs can get a one-piece casting rather than many separate pieces, creating greater efficiency. On the cost side, our energy team signed a new nine-year power agreement in August that will cover 50% of Portland's smelter capacity, starting in July 2026. We continue to pursue options for the smelter's remaining electricity requirements with a strong focus on renewable energy. The global alumina and aluminum markets are both balanced to a slight surplus. At the same time, aluminum inventories in terms of days of consumption remain at historically low levels, positioning the market well for when demand improves. In 2024, there is uncertainty in the markets due to a range of geopolitical and macroeconomic factors. One of the biggest questions revolves around demand outside of China. Our base view is for continued growth in transportation and recovery in the packaging and in the building and construction sector. Within transportation, the automotive market typically drives the major trends. At this point, most of the COVID-related automotive supply chain disruptions have resolved. While uncertainty remains due to the labor actions in the United States, we anticipate year-on-year growth in tons of aluminum as automotive production continues to ramp up to 2019 levels. In packaging, downstream inventory levels have largely normalized, and we expect demand increasing. In building and construction, high interest rates have negatively affected that sector in the last year, particularly in North America and Europe. A relative recovery in building and construction is expected next year compared to 2023. This is based on analyst projections for slowing inflation and stabilizing interest rates, which should provide a better foundation for increased year-over-year activity, although the pace of that improvement remains uncertain and reliant on economic conditions. In closing, we are encouraged by the positive operational momentum in the third quarter and intend to build on that performance. Our company's primary objective is to gain approvals for bauxite mining in Western Australia. We believe we're on the right path with an updated mine plan that has an enhanced commitment meant to address the government's expectations. Importantly, we now have line of sight to decision timing, which is expected before the end of the year. Across our global operations, we are focused on improvement. We will work to increase productivity, reduce and control costs, and manage our working capital. We also are continuing work on our future-focused breakthrough technology programs, which have the potential to further differentiate our company. Finally, while some end-use sectors for aluminum are softer now, we remain bullish on the long-term fundamentals for our markets. I'm not alone in this view. I attended LME Week, where the prevailing view was that aluminum is poised for long-term growth. Alcoa is well positioned for this future. We have the distinct advantage of being active in all aspects of upstream aluminum production, and I'm excited about our prospects and the work ahead. With that, Molly and I are ready to take your questions. We will now begin the question-and-answer session. To ask a question, you may press star, then one on your phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. When called upon, please limit yourself to two questions. Our first question is from Lawson Winder with Bank of America Securities. Please go ahead. Hello. Thank you, operator. Good evening, Bill and Molly. Bill, congratulations on your new role. Thank you. Yeah, it's very nice to hear from you today. I just wanted to ask about Kwinana. And just with the lower grades now expected to continue through 2027 at the earliest, is there a point at which a complete shutdown could become a high probability risk? So at Kwinana, we're essentially looking at all options, and in the near term, as you see, we've announced a restructuring that takes some cost out. In addition to that, we're looking at a variety of different levers to be pulled to drive costs down and improve profitability there. But ultimately, as with any marginal asset, and Kwinana is a marginal asset at this point, you know, we'll consider options on the table, including curtailment and closure. Okay. That's very clear. And then in a similar vein, Alcoa has had this goal of reducing its cost to first quartile level globally.... You know, with you now in the lead seat, what are your thoughts on that goal in terms of timing and achievability? Thank you. Thanks, Austin. I think we first of all if you step back and look at where Alcoa has us today on the cost curve, we are still first quartile bauxite mining, first quartile refining and second quartile smelting. The current situation in Western Australia puts pressure on the refining segment, so that could move us into the second quartile. But to answer your question very specifically, you see in the presentation that we did today, we highlighted productivity and competitiveness a couple of times in the presentation. We have launched a program across the company to enhance competitiveness plant by plant, and so we're essentially going after that. I think there's opportunities even in our best plants, and we highlighted the great success that we've had in Quebec so far this year. I still think there's opportunities to make those plants more competitive, take cost out, and more productive. So, we'll continue to strive for those targets. Okay, thank you very much. I'll get back in the queue. Thanks, Lawson. The next question is from Lucas Pipes with B. Riley Securities. Please go ahead. Thank you so much, operator. Bill, I'd like to add my congratulations. Thank you also for taking my question, and I wanted to pick up where the last question left off on the competitiveness. Can you maybe add a little bit more detail on what dials you can tweak? Is there capital needed to modernize plans? Is it streamlining some of the labor relationships? Is it energy? If you could maybe just peel the onion a little bit further, would really appreciate your perspective. Thank you. Yes, sure. So, we'll peel the onion back a little bit. We and the plants are at varying stages of where they sit on this effort. Probably the earliest one to undertake it was Kwinana, given some of the difficulties that we're having at Kwinana. We're looking at Kwinana from two perspectives. The first is an overall profitability perspective, where we were looking at, are there additional markets that we can address, because Kwinana has NMA capability or a non-metallurgical alumina capability? Are there opportunities for pricing improvements for specific products? But then on the cost side, it's about labor productivity and maintenance productivity. So really getting down, not to use a pun, but to get down to the nuts and bolts of trying to determine, are we effective on the maintenance side, and can we significantly improve our wrench time? So that was the work that's being done at Kwinana. We've subsequently launched what we're calling a workforce blueprint exercise, and it started in some of our best facilities up in Quebec. And you say, "Why start in some of your best facilities?" Because I think if we can get gains in places like Quebec that are really performing well, we can probably get better gains in other parts of the system. So that is actually going through and looking at the labor that we have and the amount of time it takes to do specific tasks, and a very scientific comparison of the people that we have in each plant, and whether there's opportunities across the system to streamline and take costs down. Thank you very much for that color. I wanna follow up on Western Australia, and a couple quick questions there. First, I think the company had previously guided to, I think 2024 at the earliest in terms of a transition back to higher grades, now 2027. Could you remind us what changed? Why three more years? And then, if there is a kind of formal assessment at the EPA level in Western Australia, could that change the timeline? Would appreciate your thoughts on that. Thank you. Sure. So if we address kind of the suite of questions that you have, I think we made good progress in the third quarter on this issue. We have been working with the government and we've been working with the agencies and the government to get our annual mine approvals processed. We've submitted what's called a revised Mine Management Program for 2023 to 2027, with the enhancements that we talked about in the presentation. And essentially, where that gets us to, is that we expect that decisions will be taken this quarter, both on the mine plan approvals and the EPA assessment process. So I think it's a big step forward for the company. We should have some clarity this quarter. Now, to address your question about what changed between our prior guidance and today's guidance, if you go back and look at our prior guidance, we were very careful to note that there was not great clarity beyond 12 and 18 months. So we were essentially saying, "Hey, we're expecting the lower grades for a 12- 18 month period." Since that time, with the concessions that we have made in the MMP process, we now have some better clarity. We've been able to work those concessions through the mine plans and the mine models, and we've developed the detailed plans for the most economic ways to mine the areas that we believe are likely to be accessible under the approvals. Even with our best thoughts, as far as, mining and blending plans, we can't get back to the historical grades that, that we've seen, prior, times. However, as we transition to Myara North, we believe that the geological sampling in those new regions will support the better grades. That transition will occur, we expect, in the 2027 timeframe. I hope that addresses your question. That is very helpful. There are more questions there, but I'll jump back in queue. Thank you so much, and best of luck. Okay, thanks. The next question is from Michael Dudas with Vertical Research. Please go ahead. Good afternoon, Jim, Bill, and Molly. Hi, Michael. Hi, Michael. So let me just share some thoughts. Since you were promoted to the Chief Operating Officer earlier this year, I guess maybe six or seven months in that job, and what did you find out after moving from the finance chair about the company? And I'm assuming some of these implementations were your ideas. And then how are you gonna translate that as now CEO to allow Alcoa to capture more of the anticipated cost reductions and likely, hopefully, pricing improvements that should run through the business in a more normalized environment over the next couple of years? So, what I found out when I transitioned from a long stint as the CFO, 10 years as the CFO, into what turned out to be a short stint in the COO role, was a couple of things. First of all, I was happy to find that we have great people in operations. We have people who have long tenure, you know, 20, 30 years with the company that have tremendous institutional knowledge, but we've also brought in a lot of newer people who see things new ways and do things new ways. So I was really pleased to get to see that, and just as an aside, loved my COO role for eight months. The other thing that I learned, though, is that there was a tremendous amount of opportunity out there. And people were really wanting to do things differently, wanting to aggressively address some things, so I thought there was a tremendous amount of opportunity. So if I transition to some thoughts around the CEO role, just to be clear, and I'm sure this question maybe was embedded in your original question or will be asked later on. The strategy and direction of the company is largely unchanged. We know where we're going from a strategic perspective. The thing that I'm trying to drive as CEO, and you see this changing over the last year or so, is really a cultural change. That cultural change is making decisions at a faster pace. It's having a performance orientation in everything we do, and really an expectation of excellence in everything we do. And I hit upon this in my prepared remarks, whether it's operations, maintenance, finance, an expectation of really being excellent. If we then couple that with what I think are the inherent advantages of Alcoa, so some of the inherent advantages of our company, we are, we're present in all aspects of the value chain. We're a pure play aluminum company. We're not spending time on other parts of battery minerals, where we are focused exclusively on being successful in aluminum. We have a global presence, and back to that first part of the question, I think we have unmatched technical expertise still in this company. We haven't really shown it the last couple of years on the operations side, but I think it's there, and we're starting to show it now. So when I combine all of that, I translate that into an ambition for the company, that we want to reestablish ourselves as the premier aluminum company in the world. I think we can do that. Not to go on too long, Michael, I'm really excited and really happy to be in the role that I'm in. I appreciate those, those observations. Well, looking out, how quickly do you think you can implement the culture and, you know, kind of get best practices throughout the organization and productivity enhancements to show meaningful, you know, results or achieve those goals? You know, is it a 3-month, 6-month, a year? Is it something that can... How, how urgent do you see that process, even though the overall strategy has not changed? Right. So, Rome wasn't built in a day. We're not gonna change the culture of this company in a day, a week, a quarter. However, look at the bridge that Molly showed. We saw production cost improvements for the first time in a long time, in the third quarter. And just so you understand how that bridge works, that's largely because we were able to make the tons. And so we were able to make the tons in the third quarter, and the guidance that she gave was a pretty strong guidance, with the exception of the carbon change from the Norwegian government, which is totally outside of our control. So I think we're seeing some of that change today already, and I think you'll see more in the future. Everybody I talk to within Alcoa hears the story of performance culture. We're trying to drive a performance culture, and it's all about having expectations of excellence and driving those expectations of excellence. I think we've seen that on the ops side to some extent, which we set records in Quebec. We're getting better stability in places like Brazil in the restart. Much significantly better stability and operational performance in our Western Australia assets, even though they have worse bauxite quality. So I think we're seeing it now, and hopefully accelerates into the future. Excellent, Bill. Thank you. The next question is from Bill Peterson with JP Morgan. Please go ahead. Yeah. Hi, good afternoon. Thanks for taking the questions. You know, Bill, good luck in the new role. Thanks, Bill. So wanted to take a step back to, you know, maybe more macro supply demand. So you just said you were mentioned at LME. I guess, what is the latest you're seeing in terms of supply-demand balance, I guess, in the context of restarts in Yunnan, you know, relatively weak, you know, macro backdrop? And then I guess maybe on the end market demand side, where do you see the most resilience? What and then what remains the most muted and any sort of color between regions? So, 2023 is gonna go down as a pretty tough year for the aluminum industry. In 2023, we see a slight surplus on the aluminum side. On alumina, it's fairly balanced. And so, you know, on the aluminum side, we see about an 800,000-ton surplus in 2023. The reason for that is demand in rest of world actually contracted in 2023. Some of the big demand drivers in the rest of world that we've seen this year are really a significant reduction in building and construction. Actually a reduction of demand in packaging of all places, ever so slight. And so, across the board, we're seeing some weakness in the end markets. Now, you referenced my trip to the LME Week. Pretty resoundingly, what we hear among all the industry players is that 2023, and maybe going into 2024, can still be difficult times for aluminum, but it's just a matter of time where aluminum has significantly better market environment. The reason why we see that is that demand continues to grow. Starting to see, even in 2024, a rebound in places like building and construction. Some of the destocking that we saw occur in canned sheet is now over, so we should see a rebound in demand there. And we fundamentally believe that the Chinese cap on supply will be maintained at 45 million metric tons, and we can address why we believe that. But over time, we see that the market fundamentals for the metal itself really driven by some of the macro trends over the longer period of time with EVs and solar should be significantly better than they are today. But with that said, it's been a pretty tough year on demand in aluminum. That's, that's great color. I may have missed it, but and I believe last quarter, you there was an update about San Ciprián discussing the, planned phase restart to starting at the beginning of 2024, with full restart by October 2025. And then, you're obviously trying to, you know, basically capture and, you know, set the PPAs in, in motion. But, can you give us an update there? Again, I may have missed it, but I didn't see that in the prepared remarks. Yeah. So let me give you an update. We continue to work toward really achieving long-term economic viability of the site in Spain. And that... And in the case of the smelter, that allows for a restart in 2024. However, as you know, basically the question that you just asked, we see significant challenges that need to be overcome for that site to be viable, including soft demand for the value-add products. That site makes slab and billet, low aluminum prices, in the case of Europe, high power costs, and delay in permitting and construction of some of the alternative power supplies that we had been looking at. We hope to overcome these challenges to allow for a progressive restart through the end of 2025, but it's been and it remains very difficult. So that's the situation in Spain. Okay. Thanks again, and, you know, best wishes to you moving forward. Thank you. The next question is from John Tumazos, with John Tumazos Independent Research. Please go ahead. Thank you very much for taking my question. Comparing to the container board market, today, International Paper announced they were shutting 900,000 tons, or about 2.5% of U.S. supply. In the world aluminum market, obviously, China is 59% of output, and some of the other continents don't have very much production left. The bigger other regions are Russia, which is hydro; Canada, which is hydro; India, which is coal; and the Persian Gulf, which is gas. Do you think it's possible to have a 2.5% supply reduction event in the world aluminum industry, the way it's structured today? John, that's a hard question, and give me just a second to formulate an answer. Sure. I'm sorry to compare. There's never been a 10% non-recessionary fall in the container board industry before. It took that industry a long time to get a grip on it. Right. Aluminum isn't down 10%, it's just not growing the way would be normal. So let me give you, and you and I have known each other a long time, and we've both been around this industry for a long time. So let me give you a qualitative historical perspective. This industry has not had a problem on the demand side, with the exception of the global financial crisis, where we saw demand fall off and then inventories build. This year, we've seen demand fall off, and yet inventories have not been built significantly. So inventories, and whether they're on the LME or on the market or off market, inventories remain historically pretty low. As we look forward, we see a rebound of demand going into 2024, and really see strong demand trends that are driven by the mega trends going out into the future. The question has historically been: Will the Chinese maintain the 45 million metric ton cap? We are seeing indications that we believe that they will maintain that cap. If they do maintain that cap and demand continues to grow, that should assist the fundamentals of the industry. As far as a significant and to address your question, 2.5% cut in supply, the areas around the world where supply is under pressure, specifically is in Europe. And we know that there are some plants that have hedged, those hedges will be rolling off over time. We have our own challenged plant in Europe, and so, it'll remain to be seen whether the industry takes a 2.5% cutout or not. Thank you. We're all looking for demand, Bill. Yeah. Thanks. Thanks, John, and it was good to talk with you. Thank you. The next question is from Alex Hacking with Citi. Please go ahead. Yeah, thanks, Jim, Bill, and Molly, and let me add my congratulations, Bill, on the new role. Thanks, Alex. Just following up on WA, right? So it seems like we're in the low grades now until 2027. As we think about, you know, the mine moves north that are gonna start, you know, producing or mining in 2027, what are the major risk factors around that? How should we think about that? And how should we think about the timeline? Because if you're gonna be mining in 2027, I assume you need, you know, infrastructure, pre-stripping, all kinds of things that are gonna need to be done ahead of that. Right. I guess, you know, how should we think about the risks and timelines? Thanks. So, Molly and I are gonna team up on this one a little bit. The permitting process that we have undertaken for the Myara North move is what's called a Part IV permitting process. It is a modernized, recognized permitting process within Western Australia for starting a new mine site. And it requires a lot of information. And so we made that choice going back, I think it was in 2020, to move to that modernized process for Myara North. We made that choice because we recognized that the customized process that we have currently really needed to be modernized, and our stakeholders wanted the more modernized process. So the risk that I see is around that permitting process. Now, we're doing everything that we can to mitigate that risk, and when we get closer to that time period, we will have line of sight. I can tell you, we are very energized around reducing the time between when we get that permit to go and when we open up the mine face. Given the fact that we've had some delays in permitting, we're really trying to focus our efforts on making sure that we minimize that time between getting the permit and actually getting bauxite out of the ground. So, Molly, anything you want to add to that? No, I'll just add, as far as our guidance on the about $45 million impacts that we're currently seeing in the quarter, we have plans to continue to mitigate that number. You saw the first action announced this quarter with Kwinana's severance program there. So that will save $10 million, and it's just the first bit of announcement, but we will keep moving through and finding productivity enhancements or portfolio changes to work that number down. Great. Hi, thanks. That's, that's helpful. I guess when you talk about, you know, the, the permits obviously being the key risk. You know, if I am, if I remember correctly, there are some, you know, potential issues with proximity to local communities. You know, are there other, you know, major permitting hurdles that you could foresee? I know this is a very kind of generic question, but, you know, any more color would be helpful. Thanks. Not forecasting any issues around the Part IV process per se. But let me give you color around some of the concessions that we've made in the current process, the current MMP process, which we anticipate to be decided by the end of this year. We've added additional controls for protection of drinking water. We have agreed on distances from mining, a certain distance from some of the key reservoirs, and we've agreed to accelerating rehabilitation and to increase the biodiversity in the near term on the rehab. So those are the three areas that we have been discussing with the stakeholders and to try to get the current mine approvals through the process. Okay, thanks. And then just a quick follow-up on Alumar, if I may. I think the message last quarter there was you'd fixed the conveyor issues and, you know, above 60%. Has something else gone wrong in the last quarter, or are you still on track from where you were then? Thanks. Something big happened in Brazil in the quarter. There was a massive power outage, and if you follow our competitor there, Alunorte had the same issue. Albras had the same issue. We lost power for close to 3.5 hours in the smelter at Alumar. And that has knock-on impacts, not only on the smelter, but on the refinery, too. Now, thank goodness, we had good stability. We had recovered stability going into that. We were able to get through that power outage. You know, what happens in a power outage in a smelter is that you stress the pots, bringing them back online. We lost a few pots. I think we probably lost close to a dozen pots, bringing the plant back online from that power outage. So that was a setback that really is out of the control. It impacted something like two-thirds of the country, in Brazil, and so, it was a setback for the plant. They've recovered. They have a daily action plan. It's a daily go, no-go on restarting pots and increasing amperage. And, as we said in the, in the prepared remarks, we're at about 65% today. Okay, that's super helpful. Thank you. The next question is from Timna Tanners with Wolfe Research. Please go ahead. Yeah. Hey, good afternoon. I thought I would pivot a little bit, if I could, to talking a little bit about some of your strategic initiatives and the cash flows, if I could. So, first off, I just wanted to ask, I know you talked about advances in EcoLum and EcoSource, but can you elaborate a bit on the premium that you're garnering there? The premiums are consistent with the premiums that you see quoted on various sources. It depends on the product, but the premiums are anywhere between $10-$30 a ton. Okay, that's helpful. Thanks. And then if we look at your cash balance, I know in the past you've said that you wanted to keep it at or above $1 billion, and it crept below that. I know it's not a perfect number, but if we look at the cash sources and uses year- to- date, there's not a lot of free cash flow at these commodity prices even with the third quarter strong working capital release. Yeah. And then we had, from your Investor Day, you know, a great amount of initiatives that you were progressing on. I know you referred to them in the beginning as well, like Australia Refinery of the Future, et cetera. And I'm just wondering, you know, how do we reconcile, again, this commodity price environment with some of those initiatives and some of the cash needs to source those? So the CapEx, you know, requirements going forward, are they compatible with this earnings environment, or how are you thinking about that? Okay, thanks, Timna. First of all, thanks for asking me a question. So let me just say, on our cash position now, we're at $926 million. We still have access to significant liquidities. We have our undrawn revolving credit agreement. We have our auxiliary credit line. So those are available to us as needed. As you know, we've taken action in the past, working capital programs to monetize that. We can take more aggressive actions on cost control and portfolio actions. But for us, if I look at kind of the short term cash preservation, it really is focusing on our operations that are consuming more cash than generating. So that is the focus Bill mentioned earlier. We have key sites that we are working to improve. So that's the near term on the cash management. On our CapEx, you can even see from this year, instead of adding to our CapEx project list and filling the queue to spend the whole budget, we ended up staying just with the capital plans that were already on the agenda. As they slowed spending, which typically happens, we allowed that just to happen, and so we've saved some money on CapEx. We can do that again with the programs that are in the next queue, and if you look out to our breakthrough technologies. E ach of those has to meet a certain criteria before they're going to receive funding. Most of those now are pointing toward funding in 2025 and later. So we still have time for those in working through that, financing and funding. Got it. So put bluntly then, if the commodity price stays at these levels, you know, no, no concerns in terms of proceeding with some of those initiatives, ELYSIS, Australia, Refinery of the Future, et cetera. But if we started to get into 2025 and didn't see much aluminum price improvement, then it might be needing to rethink some of those capital outlays. Is that, is that a fair conclusion? Yes, that's fair, Timna. Okay, great. Thank you for the help. The next question is from Carlos de Alba with Morgan Stanley. Please go ahead. Yeah, thank you very much. Congratulations, Bill. Just, on- Thanks, Carlos. Coming back to Western Australia. So I just wanna understand if you know what or what might be potentially the implications of the EPA deciding to do a formal assessment of your MMPs and mining plans. Would that result primarily on just a longer approval process, maybe more detail analysis and requirements? Or will also result in you know higher costs maybe above and, well, not beyond the 45 that you have, but that would prevent the 45 to completely come back to zero once you are getting into the 2027 mining plan or those areas in 2027 with better bauxite quality. So Carlos, you can imagine we completely understand what the process is, at least from a legal and a technical perspective going forward. I really hate to speculate on what an assessment would look like, what an assessment would cover. And until we had better insight into the EPA's decision-making process, around what they would actually be assessing, it's really hard to answer that question. We're moving forward on the path to you know, over the next 75 days to ensure that our permits get approved through the process. And that's the focus. If we find ourselves in an assessment, part of the process, we'll have to determine what is assessed and what the impact will be at that point, and we'll let you know. All right. Okay. And before I ask a question on the smelting, just on clarification, maybe Molly, you—I thought you were, you had guided to around $55 million impact in the third quarter because of the bauxite issues, increasing from $45 million in the second quarter. So you did better than that, right? And just to make sure that that is based on the initiatives and, you know, the efforts you are doing to control these costs. Yeah, Carlos, it's actually three things. We did draw on stockpiles that had slightly better quality than we expected during the third quarter. We also see the refineries operating very well with the lower bauxite quality. And then third, you're right, the mitigation efforts are just starting to drive down costs. All right. Thank you, Molly. And then finally, is there any update or any comment that you can provide on the situation of your European smelters? I mean, Lista remains with a third of the capacity shut down. I don't know if there is any, you know, renegotiation or upcoming renegotiations of contracts for energy in Lista or Mosjøen or the smelter in Iceland that is relevant given, you know, where prices are today. Let's look at them independently. Mosjøen's very well positioned and has a good energy source, is probably one of our most profitable plants in the system. So Mosjøen is in good shape. However, this new carbon legislation that is potential that could be passed into law in December, I think we've noted the fact that we could have up to $24 million negative in the fourth quarter associated with Mosjøen and Lista based on that new carbon legislation. That type of a change in legislation makes it really difficult to make long-term decisions around investments in places like Norway. So it's one of the disappointing things that I continue to see out of the Norwegian budgeting system that it really, really makes it hard to determine that you're going to put a lot of capital into an environment where there's not a good structure around carbon or at least a predictable structure around carbon. In the case of Lista, Lista is slightly different. No plans at this point to potentially restart that idled capacity. Lista, given its size, given its age, given its cost structure, is under a lot of pressure. And so revert back to my comments from earlier in the presentation, Lista is an area that we're looking at. It's very similar to Kwinana. Every opportunity to try to make that plant more competitive, and we need to, given some of the headwinds it's facing, especially on the carbon side. All right. Great. And, Iceland, especially, you have also a good, good contract there and, and no, no changes in the short, in the short term, right? We have a long-term power contract in Iceland. There is a repricing mechanism that comes up later in the decade. But that's later in the, I wanna say, in the 2027, 2028 timeframe. Thank you very much, Bill. The next question is from Chris LaFemina with Jefferies. Please go ahead. Thanks, Abel. Congratulations on the new role, and good luck. Thank you. So just a question on the WA mining situation. So if the EPA does an assessment on the 2022 five-year plan, which is, I guess, the one that you're operating under right now, can you continue to mine? So I understand the point about, you know, low grade until 2027 when you move up to Myara and Holyoake. But before that, is there a risk that they would basically not allow you to mine because they're reviewing a plan that you're currently operating under? Or do you have confidence that you'd be able to continue to mine under the existing plan? Well, I think that there are a variety of different outcomes that could occur, if they go to a full assessment. But again, as I answered to Carlos, let's see what gets assessed, and we will react accordingly. We're confident that we are doing all the right things to avoid either having an assessment or not getting our mine permits approved. So we're doing all the right things. We have line of sight to have an answer this quarter, we believe. And if we, you know, depending on that outcome, we will take the right actions. Does the decision that the EPA makes as to whether they'll do an assessment get impacted by the concessions that you're offering to make now? Or do they just base it on what the existing plan basically allows you to do? You know, I don't know the answer to that one. So we would need to revert back to you. Okay. I'm not certain of that. All right, cool. All right, thank you very much. Good luck. Thanks. Our final question today is a follow-up from Lucas Pipes with B. Riley Securities. Please go ahead. Thank you very much, operator. Thank you very much for taking my follow-up question. Western Australia, again, the $45 million, order of magnitude, what sort of savings could you be looking at? I think you noted $10 million at Kwinana, that would take it down to $43 million or so per quarter going forward. Order of magnitude, how much more could you be looking at? Thank you very much. Lucas, I don't have a number. Again, these are efforts that we're going to continue to work through, and as they are restructuring our programs that need to be announced, we'll certainly do that. Otherwise, you'll simply see the additional savings work into our outlook as we progress through time. But I can tell you we have dedicated teams on it. They're working very aggressively to identify savings. We've got a great pipeline of opportunities, so I do believe we will have meaningful mitigation to share, but I don't have a number for you today. I appreciate that. Again, best of luck. Thank you. This concludes our question and answer session. I would like to turn the conference back over to Mr. Oplinger for closing remarks. Thanks for your questions and interest in our company. As you can hear from my comments, it's a true honor to lead this company as we position for long-term success. I really believe with disciplined focus, and you've heard a lot of our talk around disciplined focus today, we'll build an even stronger company for the future. I look forward to talking to many of you in the fourth quarter results in January, and until then, be safe. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.