What changed in this filing

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Item 1. Business

2023-02-27 compared with 2022-02-25 · 85 added, 86 removed, 204 unchanged (46% of the section changed)

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Our primary aluminum reduction facilities produce standard-grade and value-added primary aluminum products.

Our current annual production capacity is approximately 1,016,000 tonnes per year ("tpy").

Our current annual production capacity is approximately 1,016,000 tonnes per year ("tpy"), of which approximately 307,000 tpy was curtailed as of December 31, 2022.

We produced approximately 771,000 tonnes of primary aluminum in 2022.

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Each of our aluminum smelters in the United States produces anodes at on-site facilities.

At Century, we strive to provide innovative and reliable aluminum products to our customers, best-in-class returns for our stakeholders and a safe and environmentally sustainable workplace for our people and the communities in which we operate.

We seek to responsibly operate our businesses to maintain a strong balance sheet through commodity cycles, while investing to lower our cost structure, expand our production and increase our competitiveness.

Century has invested significant capital in recent years to increase our production and grow our product portfolio to include more value-added aluminum products to better serve our customers in the U.S.

We believe that our focus on lowering costs and decommoditizing our product line will enable us to deliver profitable long-term growth and to differentiate ourselves from overseas competitors with longer supply lines into the markets in which we serve.

Century conducts our business with a focus on sustainability, as well as the health and safety, and socioeconomics of our people and the communities in which we operate.

Through our Natur-Al TM product line, we are able to provide our customers and communities with low-carbon aluminum products that enable the broader energy transition movement.

At Century, we aim to provide innovative and reliable aluminum products to our customers, a safe and sustainable workplace for our people and the communities in which we operate, and a compelling value proposition for our stockholders.

We seek to operate our businesses in a responsible manner by balancing the twin priorities of (i) maintaining a strong balance sheet across commodity cycles, and (ii) making investments to lower our cost structure, expand our production capacity, and increase our competitiveness.

Century has invested significant capital in recent years to increase production and grow our product portfolio to include more value-added aluminum products to better serve our customers in the U.S.

We believe that our focus on lowering costs and decommoditizing our product line will enable us to deliver profitable long-term growth and differentiate us from overseas competitors with longer supply lines into the markets we serve.

Century conducts our business with a focus on sustainability, including the health and safety of our people and the communities in which we operate.

Through our Natur-Al TM product line, we are able to provide our customers with world-class, low-carbon aluminum products that demonstrate our commitment to sustainability.

We operate our business through one reportable segment, primary aluminum.

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We operate three U.S.

aluminum smelters, in Hawesville, Kentucky ("Hawesville"), Robards, Kentucky ("Sebree") and Goose Creek, South Carolina ("Mt.

aluminum smelters, in Hawesville, Kentucky ("Hawesville"), currently curtailed, Robards, Kentucky ("Sebree") and Goose Creek, South Carolina ("Mt.

Holly"), and one aluminum smelter in Grundartangi, Iceland ("Grundartangi").

Our primary aluminum smelters and their respective primary aluminum capacities are shown in the following table:

Facility Ownership Percentage Operational Annual Production Capacity (tpy) (1)

Actual 2022 Annual Production (tpy)

Grundartangi, Iceland 100% 1998 317,000 306,000

Hawesville, Kentucky, USA 100% 1970 250,000 101,000

Sebree, Kentucky, USA 100% 1973 220,000 216,000

Holly, South Carolina, USA 100% 1980 229,000 148,000

1,016,000 771,000

(1) The tonnes per year (tpy) figures in this column reflect an estimate of the facility's total production capacity based on plant design, historical operating results and operating efficiencies and does not necessarily represent each facility’s maximum production capability.

The Grundartangi facility, located in Grundartangi, Iceland, is a primary aluminum reduction facility owned and operated by our wholly-owned subsidiary, Nordural Grundartangi ehf, and is our most modern facility.

Grundartangi is currently in the process of a multi-year expansion project that has brought the annual primary aluminum production capacity to current capacity of approximately 317,000 tonnes and is expected to ultimately increase annual production capacity at Grundartangi to approximately 325,000 tonnes.

Grundartangi produces standard-grade aluminum ingot and a primary foundry alloy product, which is a value-added product that is sold at a premium to standard-grade aluminum.

In addition, in late 2021 Century began construction of a new billet casthouse at Grundartangi (the “Casthouse Project”).

Grundartangi is currently in the process of a multi-year expansion project to raise its production capacity.

The current production capacity at Grundartangi is approximately 317,000 tonnes and is expected ultimately to increase to approximately 325,000 tonnes.

Grundartangi produces standard-grade aluminum ingot and a value-added product called primary foundry alloy, which is sold at a premium to standard-grade aluminum.

In late 2021 Century began construction of a new billet casthouse at Grundartangi (the “Casthouse Project”).

The new value-added casthouse will have a capacity of 150,000 tonnes of billet production and is expected to start production in the first quarter of 2024.

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Hawesville has an annual production capacity of approximately 250,000 tonnes of primary aluminum.

Approximately 60% of Hawesville's capacity was curtailed in the fourth quarter of 2015 as a result of significant declines in the LME price for aluminum.

We are currently in the process of a multi-year project that began in 2018 to restart Hawesville's previously curtailed capacity and return the plant to a production level of approximately 200,000 MT per annum (80% of capacity).

Our Hawesville facility experienced several equipment issues in late December 2020 that partially reduced the plant’s production level;

however, the process of returning to our planned operating level of 80% of capacity at Hawesville began in the second quarter of 2021 and is now complete.

The rebuild of the fifth and final potline is expected to be completed over the next several years subject to market conditions.

Hawesville produces standard-grade and high purity aluminum that can be cast into sow or delivered directly to nearby customers as molten metal.

Hawesville is our largest U.S.

smelter and is the largest producer of high purity primary aluminum in North America.

Four of Hawesville's five potlines are capable of producing high purity aluminum which is sold at a premium to standard-grade aluminum and is used extensively by the defense industry as well as for aerospace and other applications.

In the third quarter of 2022, we curtailed 100% of production at Hawesville.

We expect that Hawesville's operations will remain curtailed until market conditions permit, including the resumption of normalized energy prices and aluminum prices maintaining levels that are supportive of the on-going costs and capital expenditures necessary to restart and operate the plant.

Sebree, located adjacent to the Green River near Robards, Kentucky, is a primary aluminum reduction facility owned and operated by our wholly-owned subsidiary, Century Aluminum Sebree LLC ("Century Sebree").

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Sebree produces standard-grade aluminum that can be cast into sow and value-added products, including billet, that are sold at a premium to standard-grade aluminum or delivered directly to nearby customers as molten metal.

In 2019, we expanded the smelter’s overall output by adding 20,000 tonnes of additional secondary (scrap reprocessing) capacity.

Holly, located in Goose Creek, South Carolina, is a primary aluminum reduction facility owned and operated by our wholly-owned subsidiary, Century Aluminum of South Carolina, Inc.

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In December 2020, we began a multi-year project to restore previously curtailed capacity at Mt.

The initial phase, which will return Mt.

Holly to approximately 170,000 MT per annum (75% of capacity), is progressing and is expected to be completed in the second quarter of 2022, subject to market conditions.

See "Key Production Costs — Electrical Power Supply Agreements" below for further discussion of our power arrangements at Mt.

The initial phase was completed in the second quarter of 2022 and returned annual production capacity to approximately 172,000 MT per annum (75% of capacity).

Business - Key Production Costs - Electrical Power Supply Agreements below for further discussion of our power arrangements at Mt.

Holly produces standard-grade aluminum that is cast into sow as well as several value-added products, including billet and foundry products.

These value-added primary aluminum products are sold at a premium to standard-grade aluminum.

Primary Aluminum Production Capacity

Our primary aluminum smelters and their respective primary aluminum capacities are shown in the following table:

Facility Ownership Percentage Operational Annual Production Capacity (tpy) (1)

Actual 2021 Annual Production (tpy)

Grundartangi, Iceland 100% 1998 317,000 315,000

Hawesville, Kentucky, USA 100% 1970 250,000 172,000

Sebree, Kentucky, USA 100% 1973 220,000 209,000

Holly, South Carolina, USA 100% 1980 229,000 88,000

1,016,000 784,000

Primary Aluminum Shipment Volume

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Our operating results are highly sensitive to changes in the LME price of primary aluminum and the amount of regional premiums and value-added product premiums.

As a result, from time to time, we assess the appropriateness of mitigating the effects of fluctuations in the aluminum price through the use of fixed-price commitments, LME-linked supply contracts and other financial instruments.

financial instruments.

Quantitative and Qualitative Disclosures about Market Risk for further discussion of how we manage our exposure to market risk.

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For the year ended December 31, 2022, we derived approximately 60% of our consolidated sales from Glencore plc and its affiliates (together, "Glencore") and approximately 12% of our consolidated sales from Southwire Company ("Southwire").

We currently have agreements in place to sell a substantial portion of our 2022 production to these customers.

We expect that the rest of our 2022 customer base will remain fairly concentrated among a small number of customers under short-term contracts.

Both Glencore and Southwire purchase aluminum produced at our U.S.

Both Glencore and Southwire purchased aluminum produced at our U.S.

smelters at prices based on the LME price for primary aluminum plus the Midwest premium plus any additional market-based product premiums.

Glencore also purchases aluminum produced at our Grundartangi, Iceland smelter at prices based on the LME plus the European Duty Paid premium plus any additional market-based product premiums.

Glencore also purchased aluminum produced at our Grundartangi, Iceland smelter at prices based on the LME plus the European Duty Paid premium plus any additional market-based product premiums.

Glencore beneficially owns 42.9% of our outstanding common stock (46.1% on a fully diluted basis).

Related Party Transactions to the consolidated financial statements included herein for additional information concerning our relationship with Glencore.

We currently have agreements in place to sell a substantial portion of our 2023 production to Glencore.

We expect that the rest of our 2023 customer base will remain fairly concentrated among a small number of customers under short-term contracts.

Key Production Costs

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Concord Resources Ltd.

Approximately 180,000 tpy

Through December 2022

Approximately 180,000 tpy Through December 2022 LME-linked

Glencore Approximately 260,000 tpy Through December 2022 Fixed and API-linked components

Variable Through December 2023 LME-linked

Kalon Approximately 180,000 tpy

Through June 2023 LME-linked and API-linked components

Concord Resources Ltd.

Approximately 108,000 tpy Through December 2023 Fixed and API-linked components

Concord Resources Ltd.

Approximately 600,000 tpy

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Fixed, LME-linked, and API-linked components

Through December 2021

Variable Through December 2023 LME-linked

Glencore Approximately 140,000 tpy Through June 30, 2022 Fixed and API-linked components

(1) Under the terms of this agreement, Glencore provides alumina supply for all of Century's requirements net of other contractual commitments.

(1) Under the terms of this agreement, Glencore will provide alumina supply for all of Mt.

Holly's requirements for the calendar years 2022-2023.

Holly's requirements for the calendar years 2022 and 2023.

(2) "API" refers to a published alumina price index.

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The table below summarizes our long-term power supply agreements:

Grundartangi Landsvirkjun Through 2026 - 2036 Fixed price and variable rate linked to (i) the LME price for primary aluminum or (ii) the Nord Pool power market

Grundartangi Landsvirkjun Through 2026 - 2036 Variable rate based on (i) the LME price for primary aluminum (~70%) or (ii) the Nord Pool power market for 161MW (~30%) though 2023;

Nord Pool converts to a fixed rate plus a small variable component from 2024 - 2026

Orkuveita Reykjavíkur ("OR")

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Holly Santee Cooper Through December 31, 2023 Cost of service based rate

(1) Under the terms of this agreement, the contract is automatically extended year-to-year unless either party gives notice at least one year before the end date.

(1) The power supply arrangement with Kenergy has an effective term through December 2023.

The arrangement with EDF to act as our market participant with MISO has an effective term through May 2023.

Electrical power represents one of the largest components of our cost of goods sold.

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In July 2021, Grundartangi reached an agreement with Landsvirkjun for an extension of its existing 161 MW power contract through December 31, 2026 and will increase the existing contract from 161 MW to 182 MW over time to provide the necessary flexibility to support the most recent capacity creep requirements and future growth opportunities for value-added products at the Grundartangi plant, including the Casthouse Project.

In September 2022, this agreement was amended to provide for 42 MW at a fixed price and 119 MW at rates linked to Nord Pool plus transmission through 2023 and beginning January 1, 2024 through December 31, 2026, this agreement allows for fixed rates plus a small variable rate portion of the full 182 MW.

Grundartangi also has a 25 MW power purchase agreement with Landsvirkun at LME-based variable rates.

Historically, all of the power supplied to Grundartangi has been delivered at prices indexed to the price of primary aluminum.

Since November 2019, the price of approximately 30% of Grundartangi’s power requirements has been linked to the market price for power in the Nord Pool power market, the trading market for power in the Nordic countries and certain other areas of Europe.

As of December 31, 2021, we had entered into financial contracts to fix the forward price of approximately 60% and 55% of Grundartangi's Nord Pool based power requirements for the years ending December 31, 2022

and December 31, 2023, respectively.

We continue to monitor power prices and may enter into further similar financial contracts in the future.

As of December 31, 2022, approximately 20% of Grundartangi's power requirements has been linked to the market price for power in the Nord Pool power market, the trading market for power in the Nordic countries and certain other areas of Europe.

The vast majority of this market price has been fixed through derivative financial contracts.

We continue to monitor power prices and may enter into further similar contracts in the future.

Each power purchase agreement contains take-or-pay obligations with respect to a significant percentage of the total committed and available power under such agreement.

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The arrangement with EDF to act as our market participant with MISO has an effective term through May 2023.

Both of these agreements extend automatically year to year thereafter unless a one year notice of termination is given by either party.

On April 26, 2022, EDF gave notice that it would no longer serve as the MISO Market Participant for Hawesville.

The notice terminated EDF's contract, effective May 31, 2023, to purchase power from MISO for resale to Kenergy, which then resells the power to Hawesville.

Century is in discussions with other companies, currently authorized as MISO Market Participants, to replace EDF and expects to have a replacement Market Participant in place prior to the expiration of the contract with EDF.

In connection with the temporary curtailment of production at Hawesville, energy use at the smelter has been significantly reduced.

However, such reduction in energy use does not reduce Hawesville's capacity payment obligation to MISO which extends through May 2023.

Century Sebree is party to a power supply arrangement with Kenergy and EDF which provides market-based power to the Sebree smelter.

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The arrangement with EDF to act as our market participant with MISO has an effective term through May 2023.

Both of these agreements extend automatically year to year thereafter unless a one year notice of termination is given by either party.

On April 26, 2022, EDF gave notice that it would no longer serve as the MISO Market Participant for Sebree.

The notice terminated EDF's contract, effective May 31, 2023, to purchase power from MISO for resale to Kenergy, which then resells the power to Sebree.

CASC is party to an agreement with Santee Cooper for power to the Mt.

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Holly's electrical power requirements are supplied from Santee Cooper's generation at cost of service based rates.

This power agreement provides sufficient energy to allow the smelter to implement a restart project to increase its production to 75% of Mt.

Holly's full production capacity.

The contract provides sufficient energy to allow Mt.

Holly to produce at 75% of full production capacity.

The agreement with Santee Cooper has a term through December 31, 2023.

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As of December 31, 2022, we had 1,956 employees.

Of these, 1,787 were domiciled in the United States, 71 in the Netherlands and 654 in Iceland.

Of these, 1,186 were domiciled in the United States, 694 in Iceland and 76 in the Netherlands.

Health, Safety and Wellness.

Nothing is more important than the health and safety of our employees and the members of the communities in which we do business.

Nothing is more important than the health and safety of our employees and the members of the communities in which we operate.

We continuously assess the risks our employees face at our facilities and we work to mitigate those risks through frequent training and other preventative safety and health programs and on the job training.

We strive for zero injuries and accidents, to foster systems and processes aimed to continuously improve our health and safety performance and to integrate risk management relating to health and safety into all aspects of our operations.

We emphasize the importance of safety goals by including safety performance as one of the metrics for determining payouts under our annual incentive awards to our executives.

We emphasize the importance of safety and seek to create a safety conscious culture by, among other things, including safety performance metrics and KPIs in our annual incentive awards to our executives.

The safety focus of the Company is evident in our approach to the COVID-19 pandemic over recent years.

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As part of our Century Well-being program, and in an effort to encourage employees to participate, Century provides financial incentives to its employees who choose to participate.

Our Century Well-being program is specifically designed for Century employees and the unique health issues they may encounter and includes health benefits at no cost to our employees centered around diabetes management, mental health and substance abuse and counseling, and musculoskeletal conditions.

Our Century Well-being program is specifically designed for Century employees and includes health benefits at no cost to our employees centered around diabetes management, mental health and substance abuse and counseling, and musculoskeletal conditions.

Diversity and Inclusion.

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Vlissingen Federation for the Metal and Electrical Industry (“FME”)

Through November 30, 2022

Through May 31, 2024

Approximately 86% of Grundartangi’s workforce is represented by five labor unions, governed by a labor agreement that establishes wages and work rules for covered employees.

The current agreement is effective through December 31, 2024.

100% of Vlissingen's work force is represented by the FME, a Netherlands' employers' organization for companies in the metal, electronics, electrical engineering and plastic sectors.

This agreement is effective through December 31, 2024.

100% of Vlissingen's work force is represented by the Federation for the Metal and Electrical Industry ("FME"), a Netherlands' employers' organization for companies in the metal, electronics, electrical engineering and plastic sectors.

The FME negotiates working conditions with trade unions on behalf of its members, which, when agreed upon, are then applicable to all employees of Vlissingen.

The current labor agreement is effective through November 30, 2022.

The current labor agreement is effective through May 31, 2024.

Approximately 43% of our U.S.

based workforce is represented by the USW.

CAKY's Hawesville employees represented by the USW are under a collective bargaining agreement that expires on April 1, 2026.

Century Sebree's employees represented by the USW are under a collective bargaining agreement that expires on October 28, 2023.

based workforce is represented by USW through separately negotiated labor agreements for each facility.

The labor agreement for Hawesville employees is effective through April 1, 2026.

Upon announcement of the temporary curtailment, Hawesville and the USW local union entered into effects bargaining.

An agreement was reached on July 19, 2022, covering the curtailment period.

Century Sebree's labor agreement with USW for its employees is effective through October 28, 2023.

The market for primary aluminum is global, and demand for aluminum varies widely from region to region.

We compete with aluminum producers within the U.S.

and internationally as well as with producers of alternative materials such as steel, copper, carbon fiber, composites, plastic and glass, each of which may be substituted for aluminum in certain applications.

We compete with aluminum producers domestically and internationally, as well as with producers of alternative materials such as steel, copper, carbon fiber, composites, plastic and glass, each of which may be substituted for aluminum in certain applications.

Our competitive position depends, in part, on the availability of electricity, alumina and our other key raw materials to our operations at competitive prices.

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Over the past several years, we have undertaken various expansion programs at all of our operating facilities and continue to pursue additional internal growth opportunities.

We are currently in the process of a multi-year project at Hawesville to restart previously curtailed capacity.

Through December 31, 2021, we have rebuilt or restarted 200,000 tonnes of production (Hawesville's current production capacity) and can restart another 50,000 tonnes of production capacity in the future subject to market conditions.

At Sebree, in 2019, we expanded the smelter’s overall output by adding 20,000 tonnes of additional secondary (scrap reprocessing) capacity.

Holly, a restart project is underway to increase its production to 75% of Mt.

Holly's full production capacity which we expect to be completed in the second half of 2022, plus an additional 57,000 tonnes of production in the future provided we are able to obtain sufficient energy at competitive rates.

In the second quarter of 2022, we completed a project to restart approximately 172,000 tonnes of production capacity at Mt.

Holly (bringing its operations to 75% of Mt.

Holly's maximum production capacity) and can restart another 57,000 tonnes of production capacity in the future provided we are able to obtain sufficient energy at competitive rates.

At our Grundartangi, Iceland smelter, we are in the process of a multi-year project that is expected to ultimately increase annual production capacity to approximately 325,000 tonnes.

In late 2021, Century began construction on the Casthouse Project.

The new value-added casthouse will have a capacity of 150,000 tonnes of billet production and is expected to start production in the first quarter of 2024.

The new value-added casthouse will be able to produce up to 150,000 tonnes of billet from existing Grundartangi production and is expected to start production in the first quarter of 2024.

The billet produced at the Grundartangi casthouse is expected to be low-carbon aluminum or Natur-Al TM .

At Vlissingen, since our purchase of this facility, we have completed a variety of expansion projects and efficiency programs in order to more than double the plant's production capacity.

Since our purchase of the Vlissingen facility, we have completed a variety of expansion projects and efficiency programs in order to more than double its production capacity.

With these expansion projects and efficiency programs in place, we expect Vlissingen to be able to supply approximately 93% to 98% of Grundartangi’s carbon anode requirements at current production levels.

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Sustainability.

Our Natur-Al™ aluminum produced at our Grundartangi, Iceland smelter has one of the lowest carbon footprints in the industry due to Grundartangi’s access to clean hydroelectric and geothermal power sources and the operating expertise of our excellent workforce.

Century Aluminum Company and our Grundartangi smelter have also been certified against the Aluminium Stewardship Initiative (ASI) Performance Standard for responsible production, sourcing and stewardship of aluminum.

Our Natur-Al™ aluminum produced at our Grundartangi facility has one of the lowest carbon footprints in the industry due to Grundartangi’s access to hydroelectric and geothermal power sources.

Our Grundartangi facility (along with our corporate headquarters in Chicago, Illinois) have also been certified by the Aluminium Stewardship Initiative (ASI) for responsible production, sourcing and stewardship of aluminum.

In addition to providing additional value to our customers, our low carbon footprint in Iceland mitigates our exposure to current or future carbon regulations.

Century is also committed to exploring additional opportunities to reprocess and reuse scrap aluminum in its operations going forward and to reduce our carbon footprint across our operations.

Century is committed to exploring additional opportunities to reduce our carbon footprint across our global operations, including by continuing to improve our operational efficiencies, investigating new and alternative power sources, and reprocessing and reusing scrap aluminum in our operations.

Duty Free Access to our Major Customer Markets.

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customer base, allowing us to capture the Midwest premium and providing a competitive advantage in freight costs over our foreign competitors.

The proximity to our customers also allows us to deliver a portion of our Kentucky production in molten form, saving casting costs, and providing a competitive advantage over other potential suppliers.

In Iceland, our proximity to European markets provides a competitive advantage for Grundartangi, allowing us to capture the European Duty Paid Premium and other logistical benefits compared to our competitors outside the EEA.

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We have the ability across our operations to cast a variety of aluminum products, both in terms of shapes and alloys.

These high purity and value-added primary aluminum products are sold at a premium to standard-grade aluminum.

Our Hawesville plant is the largest producer of high purity aluminum in North America.

Four of Hawesville’s five potlines are capable of producing high purity aluminum, which is used extensively by the defense industry as well as for certain aerospace applications.

These value-added primary aluminum products are sold at a premium to standard-grade aluminum.

Both Sebree and Mt.

Holly have value-added casthouses that have the ability to produce large volumes of billet, slab and other value-added products.

We have just started construction on the Grundartangi casthouse which will enable Grundartangi to produce Natur-Al™ billet and other value-added products and service the European market.

In late 2021, we started construction on the Grundartangi casthouse which will enable Grundartangi to produce Natur-Al™ billet and other value-added products and service the European market.

Access to Market Power.

Our Kentucky operations benefit from market-based power contracts that provide electricity to these operations at competitive prices.

Our Kentucky operations benefit from market-based power contracts that have historically provided electricity to these operations at competitive prices.

Experienced Management Team.

Our management team includes executives and managers with significant experience in the aluminum industry, the broader metals and mining sector, the development of large and complex projects and the functional disciplines we require to manage and grow our business.

disciplines we require to manage and grow our business.

In addition, the managers of our production facilities have substantial backgrounds and expertise in the technical and operational aspects of these plants.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business