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TheStreet Open House

Century Aluminum's CEO Discusses Q2 2012 Results - Earnings Call Transcript

Moving on down, cost across the company have continued to fall this quarter, coming from a variety of factors. Number one, better operating leverage and higher production volumes at all of the plants, most specifically Hawesville; two, better efficiencies at Hawesville; three, we have seen a reduction in the power rate at Mt. Holly despite the lack of movement at Hawesville. Again I’ll speak about all these things in more detail in a few moments. And fourth, we’ve seen carbon costs start to fall across the system. Again I’ll provide more detail.

As you saw us announce in June, we made an acquisition of a carbon anode plant in Netherlands this quarter, obviously that's the supply, that key raw material for Nordural operations at Grundartangi today and Helguvik in the future. It’s a good investment for us that comes at an attractive invested costs and it’s going to produce a good IRR for us. I’ll give you some more details here in a couple of slides.

At Mt. Holly, as I said we’ve seen a good reduction in fuel costs translated into our power rate and also as you saw announced in June, we’ve come to a contract amendment with the power provider there. Importantly, that will give us some additional flexibility if we had to, to terminate that contract at very low LME prices and importantly that will give us some runway as we and Alcoa obviously are partners there, working on long-term power solutions.

Very importantly, we've made progress on the restart of the Ravenswood plant. A key milestone we submitted in April, our application to the Public Service Commission of West Virginia for a LME-based power rate. Since then, we’ve engaged in detailed discussions with all of the major constituencies in West Virginia. We’re very focused on this process. And we continue to believe that the restart of this plant would be a very good investment for our shareowners.

Read the rest of this transcript for free on seekingalpha.com

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