Alcoa Corporation (NYSE:AA) Q4 2022 Earnings Call Transcript

John Tumazos: If I could follow up on Slide 17, Roy’s key areas of focus for 2023, a couple of the targets look like they are kind of hard things to do. On bauxite quality, are you assuming that you get regulatory approval, or would you go across the road and buy some bauxite from Worsley or across the lake from Weber or something? And with gas supply in Western Australia and energy for San Ciprián and Lista, are you essentially seeing the markets soften and that supplies are going to become available that were not available several months ago?

Roy Harvey: So, John, it’s all very important questions. So, first and foremost, and this is something I have learned over the time I have been CEO of Alcoa, we lack easy-to-solve problems. We have lots of things that need complicated solutions that take time and smart ways in order to address them. It’s why I have got the team that I do. It’s why I have got a lot of faith as we deal with these things. And to be quite honest, it’s one of the reasons that we made some of the changes in the executive team to make sure that we are focused on the right things to be quite honest. And so we have the bandwidth, we have the right people working on these things. And to be quite honest, particularly on the strategy side, we try and look at things without boundary conditions so that we can find what’s best to solve for the long-term viability for this business and for our stockholders across the board as well as our stakeholders as well.

And so when it comes to bauxite, like I had said in one of the prior answers, I have a lot of confidence that we are going to be able to work collaboratively and get to a conclusion, a timely conclusion so that we can operate these facilities for another few decades. I just €“ I have full confidence because everything is lined up. We have the right people working on it and I think we have the support of our host government. But that doesn’t mean that we can’t look at other ways in order to bring in bauxite or to look at other solutions. And so we will continue to do that. When it comes to your point about solving the energy questions around a plant like Lista or San Ciprián in the short-term before we get to these new contracts for the San Ciprián refinery, a lot of times, the deals happen as you get towards deadlines and as you build up consensus with communities and with host governments to find shared and common interest.

And a lot of times, it can mean that you are working with suppliers, your energy suppliers so that you can provide that base load. That’s worked really well in the energy contracts that we have built up with Green Energy and Endesa for San Ciprián in the future. We are sort of that base load customer, and we can get a very advantageous cost position, price position for us. But we also have to see how the market develops and then look at what €“ how the market mechanisms can then come to support those final contracts. So, all that to say, they are difficult problems and there is a lot €“ it’s a pretty simple slide, but there is a lot of work that’s going into it. But I think we have the right people working on the right things. And I would just come back to my point that we put a lot of creativity in how to solve these things because none of them are easy problems.

And the fact is, is that we need to always step back and say, are we doing things as €“ with as little complexity and with as much effectiveness as we possibly can. It’s a really good question, John, and I appreciate it.

John Tumazos: Thank you. Thank you for your efforts as a management team.

William Oplinger: Thanks John.

Roy Harvey: Thank you, John.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Roy Harvey for closing remarks.

Roy Harvey: Thank you, operator and thanks once again to everybody who joined this call. Given his time as CFO of Alcoa Inc. and now Alcoa Corp., I thought it would be good to hear a few words from our good friend, Bill, before we close for today. Bill?