Alumina Limited reports drop in production and EBITDA for Alcoa's bauxite and alumina segment in Q2 2019

Alumina Limited has reported the result highlights for Alcoa Corp’s 2Q 2019 bauxite and alumina segment.  Alcoa’s bauxite and alumina segment is represented by Alcoa Worldwide Alumina and Chemicals (AWAC), a joint venture which is owned 40% by Alumina Limited and Alcoa owns the remaining 60% and is the manager/operator of AWAC's operations.

AWAC Mining Business reported 10.8 million tonnes of bauxite production in Q2 2019, down 3.5% from 11.2 million tonnes in Q1 2019. The bauxite mining business covers wholly owned bauxite mines plus equity share of CBG and MRN.

Alumina Refining Business reported alumina production of 3.1 million tonnes in Q2 2019, flat from the reported production in Q1 2019. The production result is excluding the share of Ma’aden refinery.

Alumina Limited’s CEO, Mike Ferraro, commented on the results of the AWAC operations. “The performance from both segments was stable as lower API pricing was partially offset by lower raw materials cost and a further improvement in alumina production. Since the end of the quarter API pricing has fallen due to the market being well supplied as production from Alunorte ramps up and other refineries increase supply. Distributions from AWAC were lower in the quarter in line with the lower alumina spot pricing and the impact of an annual tax payment of over $300 million in June.”

AWAC reported adjusted EBITDA of US$369 million for the alumina segment, slightly down from US$372 million in Q1 2019. Lower API and higher maintenance costs partially offset the favourable impacts from currency, raw materials and sales volumes in this quarter. The realised price for alumina stood at US$371 per tonne, down 2% from US$379 per tonne in Q1.

Bauxite segment adjusted EBITDA stood at US$112 million, slightly down from US$126 million in Q1 2019.  The results were impacted by higher maintenance costs, local currency and price/mix of sales.