Timna Tanners: Okay, I’ll leave it there. Thanks, and best of luck.
William Oplinger: Thanks.
Operator: And our next question today comes from John Tumazos with Tumazos Very Independent Research. Please go ahead.
John Tumazos: Congratulations on getting through the tough year and cutting costs so much.
William Oplinger: Thanks, John.
John Tumazos: First question, and I’m not sure if I’m supposed to ask this question, but I’ll try. You’re planning to buy almost 3 million tons of alumina this year, which is a lot of boatloads. Where are you buying it? China is 59% of world output, you’re around 5%, so there aren’t that many choices. Are you buying it from China or some Western country complying with sanctions that has some capacity that would have gone to Rusal in the old days.
William Oplinger: So John, to give you a little bit of background, it is not unusual for us to be in the market to buy alumina. In past years, I think in 2023, we probably did about 2 million metric tons. As you see with the curtailment of Kwinana, that’s increasing to about 3 million metric tons. We have an alumina trading arm, and I don’t want to make that sound as if we’re doing any type of prop trading, but we have an alumina trading arm that is constantly sitting there trying to optimize logistics and optimize tons and quality across the system. And where will we get that. We have already agreed with certain suppliers that we will have offtake in 2024. And those suppliers run the gamut of Western World suppliers, Indonesia traders. And as we go through 2024, we’ll do more of that.
John Tumazos: I could ask another one. You’ve designated your Chief Operating Officer to be in Australia. Over most of my career, the raw materials have been a big cash count and the market is a little tougher now. Is the division of labor for Mr. Reid to be primarily raw materials and you’re focusing on the smelters bill? And is this signal that we’re going to be paying very close attention to the environmental permitting and regulatory issues, as well as operations in Australia.
William Oplinger: Thanks for the question, John. So let me just back up a little bit. Matt Reid was chosen to be COO because he’s the best person for the job, in my view. And the fact that he sits in Western Australia is a little bit of a benefit, because we do have such a massive operations in Western Australia. To specifically address your question of whether I’ll be focused on the smelters and he’ll be focused on mining and refining, no. Matt has an agreement for all operations globally. It’s a big job. It will be a hard job to do out of Western Australia, and he and I have had that discussion, but I think he’s the right person for the job. And now with that said, he has four regional vice presidents that sit underneath him.
And they — and he used to be one of them, obviously, in Australia, so he has to replace himself. They’re very good people, very capable people who have the ability to make decisions in the regions to benefit the regions. And that’s important because as we saw in the permitting process, it is critically important to have really strong local leadership in the regions that can make decisions, that make sure that the permitting is done correctly, that the rehab is done correctly that the ESG factors are appropriately considered in the regions. Sometimes it’s hard for a global player to have that perspective. That’s why you have to have strong leadership in the regions, and Matt will ensure that he has four strong leaders around the world.
John Tumazos: Thank you.
William Oplinger: Thanks, John.
Operator: Thank you. And our next question today comes from Bill Peterson with JPMorgan. Please go ahead.
William Peterson: Yes. Hi, Bill and Molly. Thanks for taking my questions. I wanted to come back to the near-term $245 million and how to think about the cadence. It sounds like there is some visibility in raw materials, maybe a third of that [indiscernible] pardon me, I’m in the airport. But what else visibility — is this — most of this has been back half weighted more into 2025 based off of the other buckets that are within that just sort of get a feel for the rollout of this over the next 12 to 24 months.
Molly Beerman: Yes, Bill, I think it’s fair to say that there is various timing on those items, but they are, again, designed to deliver a run rate savings by the end of 2025. On the raw materials, we did indicate that’s a 2024 number. That’s an annual number that will repeat on the productivity and competitive programs. We’re trying to hit a run rate by the end of the first quarter of 2025. On Warrick optimization and the IRA funding, that one will kind of bleed in overtime as Warrick gains momentum from the restart, and we are working actively with treasury and other folks in the government on the funding improvements. Alumar will come in overtime as well, and then Kwinana will start to be realized in the second half of 2024.
William Oplinger: And Bill, I really have to give kudos to Molly and her team because — and Jim Dwyer, many of the investors have been asking us, “Hey, there’s lots of moving parts here. Can you help us understand what those moving parts look like and how good can things be if you accomplish those moving parts”. And so that’s the point of this slide. It basically says, hey, let’s — our view on overall materials is going to be $300 million better. We’re actually instituting and we haven’t talked much about it on this call, but we’re instituting what we’re calling a competitiveness program where we’re trying to get 5% of the cost structure aside from raw materials and energy out of the cost structure, and it’s at every single plant, mine, refinery around the world. So this chart was meant to be a reaction to investors that said, help us understand with all these moving pieces, what can it look like. And that’s why we put it together.
