Microsoft Word - ASX announcement 2014-33 Alcoa Investor Presentation
ASX Announcement 5 November 2014
Alcoa Investor Day presentation
Attached is information prepared by Alcoa Inc. relevant to Alcoa World Alumina and Chemicals (AWAC) that is included in presentations provided by Alcoa Inc. at its Investor Day Conference held on 4 November 2014. AWAC is a joint venture between Alumina Limited and Alcoa Inc. AWAC is 60% owned and managed by Alcoa Inc and 40% owned by Alumina Limited.
All presentations made at the Alcoa Inc. Investor Day Conference are available in the
Invest section of the Alcoa Inc. web site.
Some statements in this public announcement are forward-looking statements within the meaning of the US Private Securities Litigation
Reform Act of 1995. Forward-looking statements also include those containing such words as 'anticipate', 'estimates', 'should', 'will',
'expects', 'plans' or similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual outcomes to be different from the forward-looking statements. Important factors that could cause actual results to differ from the forward-looking
statements include: (a) material adverse changes in global economic, alumina or aluminium industry conditions and the markets served by AWAC; (b) changes in production and development costs and production levels or to sales agreements; (c) changes in laws or regulations or policies; (d) changes in alumina and aluminium prices and currency exchange rates; and (e) the other risk factors
summarised in Alumina's Form 20-F for the year ended 31 December 2013.
Shareholder Enquiries
For investor enquiries:
Charles Smitheram Investor Relations Phone: +61 3 8699 2613
[email protected]
Chris Thiris
Chief Financial Officer Phone: +61 3 8699 2607 [email protected]
Stephen Foster
Company Secretary
Alumina Limited
ABN 85 004 820 419
GPO Box 5411
Melbourne Vic 3001
Australia
Level 12 IBM Centre
60 City Road
Southbank Vic 3006
Australia
Tel +61 (0)3 8699 2600
Fax +61 (0)3 8699 2699
Email [email protected]
Operational excellence further improves strong alumina position
Global alumina cost curves: 2010, 2013, and 2014
Alcoa moves to 25th Percentile in 2014
Key actions 2013-2014
$/MT
450
400
350
300
250
ALUMINA
2014:
25th Percentile
2013:
27th Percentile
Reshaping portfolio
Announced sale of Jamalco
Lowering costs
Increased low-cost refinery production by 200kmt
Productivity gains of $177M YTD
150
100
50
2010:
30th Percentile
Cost position 5 pts better vs. 2010
0 10 20
30 40 50
60 70 80
90 100
110
120
130
$15/metric ton cost improvement
Production (MMT)
from 2010 to 2014
relative to industry
Source: CRU and Alcoa analysis 5
Portfolio actions and cost focus will continue to improve position
Global alumina cost curves: 2010, 2013, 2014 and 2016 target
$/MT
500
Targeting 21st percentile by 2016
ALUMINA
-9% points by 2016
Key actions 2014-2016
Reshaping portfolio
450
400
350
300
250
200
150
100
50
0
2014:
25th Percentile
2016:
21st Percentile
2013:
27th Percentile
2010:
30th Percentile
Evaluating Suralco via MOU
Saudi JV mine and refinery
Lowering costs
Spain natural gas conversion results in $20/MT cost
0 10 20
30 40 50
60 70 80
90 100
110
120
130
Production (MMT)
Source: CRU and Alcoa analysis 6
Move to alumina fundamental pricing - transforming the market
API/spot conversion rates and price shift to alumina-based fundamentals
API/Spot conversion continues to grow API/Spot sales outperforming LME-Based pricing
API/Spot % of third party shipments API/Spot vs. LME-Based Performance Index
37%
28%
55%
68%
75%
84%
Index
130
125
120
115
110
105
100
95
90
API/Spot
100 = 2010 Base
100
5%
2010
2011
2012
2013
2014E 2015E
2016E
LME-Based & Other Contracts
85
2010 2011 2012 2013 2014E
7