Century Aluminum(CENX) - 2023 Q4 - Annual Report

Customer Relationships - For the year ended December 31, 2023, approximately 73.8% of consolidated net sales of primary aluminum were derived from Glencore plc and its affiliates[42] - Approximately 42.9% of the company's outstanding common stock is beneficially owned by Glencore, indicating a significant relationship with this key customer[45] - The company expects to maintain a concentrated customer base for its 2024 production, primarily under short-term contracts[45] - The company has entered into agreements to sell a substantial portion of its 2024 production to Glencore, reflecting reliance on a limited number of customers[45] Cost Structure - Electrical power, alumina, carbon products, caustic soda, natural gas, heavy fuel oil, and labor represented over 79% of the cost of goods sold for the year ended December 31, 2023[46] Workforce and Labor Relations - As of December 31, 2023, the company had 2,939 employees, with 1,211 in the United States, 932 in Jamaica, 719 in Iceland, and 77 in the Netherlands[55] - Approximately 60% of the total workforce is represented by labor unions, with various labor agreements in place across different facilities[60] Power Supply and Risk Management - The company has long-term power supply agreements with various suppliers, with terms extending through 2026 to 2036, and a new three-year power contract for Mt. Holly effective January 1, 2024[52] - The company may enter into forward contracts or other hedging arrangements to mitigate electrical power or natural gas price risks[48] Health and Safety - The company emphasizes health and safety, aiming for zero injuries and accidents through continuous training and risk management[56] Production Capacity and Projects - In Q2 2022, the company restarted approximately 172,000 tonnes of production capacity at Mt. Holly, achieving 75% of its maximum production capacity[69] - The Grundartangi smelter project aims to increase annual production capacity to approximately 325,000 tonnes, with a new casthouse expected to produce up to 150,000 tonnes of billet starting Q1 2024[70] - The Vlissingen facility has more than doubled its production capacity and is expected to supply 93% to 98% of Grundartangi's carbon anode requirements at current production levels[71] Supply Chain and Competitive Advantage - The acquisition of a 55% interest in Jamalco secures a long-term supply of alumina, enhancing supply chain transparency and control[72] - The Natur-Al™ aluminum produced at Grundartangi has one of the lowest carbon footprints in the industry, benefiting from hydroelectric and geothermal power sources[73] - The company benefits from duty-free access to major customer markets, including the EU and the U.S., providing a competitive advantage over foreign competitors[74] - Proximity to major customers in the U.S. and EU allows for reliable supply chains and better technical service, capturing regional premiums[75] - The company has a diverse portfolio of value-added aluminum products, which are sold at a premium to standard-grade aluminum[76] - Kentucky operations benefit from market-based power contracts that historically provide competitive electricity prices[77] Management Experience - The management team has significant experience in the aluminum industry and is equipped to manage and grow the business effectively[78]