CENTURY ALUMINUM CO 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. This Management’s Discussion and Analysis (“MD&A”) provides information that management believes is relevant to an assessment and understanding of the consolidated financial condition and results of operations of Century Aluminum Company and should be read in conjunction with the accompanying consolidated financial statements and related notes thereto. This MD&A contains “forward-looking statements” - See “Forward-Looking Statements” above. Overview We are a global producer of primary aluminum with aluminum reduction facilities, or "smelters," in the United States and Iceland. The key determinants of our results of operations and cash flows from operations are as follows: • the price of primary aluminum, which is based on the London Metal Exchange ("LME") and other exchanges, plus any regional premiums and value-added product premiums; • the cost of goods sold, the principal components of which are electrical power, alumina, carbon products and labor, which in aggregate represent more than 87% of our cost of goods sold; and • our production volume and product mix. Recent Developments Hawesville temporary curtailment In August 2022 we fully curtailed production at the Hawesville facility and expect to continue to maintain the plant with the intention of restarting operations when market conditions permit, including energy prices returning to more normalized levels and aluminum prices maintaining levels that can support the on-going costs and capital expenditures necessary to restart and operate the plant. In the first quarter of 2023, we incurred curtailment charges of approximately $7.0 million, including $5.4 million related to excess capacity charges, partially offset by $0.7 million of income related to scrap and materials sales, which are reported in Other operating expense - net, in the Consolidated Statements of Operations. Acquisition of 55% interest in Jamalco On May 2, 2023, the Company's wholly-owned subsidiary, Century Aluminum Jamaica Holdings, Inc., acquired for $1.00 a 55% interest in Jamalco, an unincorporated joint venture with Clarendon Alumina Production Limited ("CAP"), which is owned by the Government of Jamaica. Jamalco is engaged in bauxite mining and alumina refining in Jamaica. The Company's newly acquired, wholly-owned subsidiary, General Alumina Jamaica Limited, is the manager of the Jamalco joint venture. Jamalco has alumina production capacity of approximately 1.4 million tons. Jamalco's operations will be consolidated with Century Aluminum Company in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"), with CAP's interest in Jamalco reflected as noncontrolling interest. We anticipate making additional investments in Jamalco to fund Century's proportionate share of capital expenditures. Pricing of aluminum The overall price of primary aluminum consists of three components: (i) the base commodity price, which is based on quoted prices on the LME and other exchanges; plus (ii) any regional premium (e.g., the Midwest premium for metal sold in the United States ("MWP") and the European Duty Paid premium for metal sold into Europe ("EDPP")); plus (iii) any value-added product premium. Each of these price components has its own drivers and variability. The price of aluminum is influenced by a number of factors, including global supply-demand balance, inventory levels, speculative activities by market participants, production activities by competitors and political and economic conditions, as well as production costs in major production regions. These factors can be highly variable and difficult to predict which can lead to significant volatility in the aluminum price. Increases or decreases in primary aluminum prices result in increases and decreases in our revenues (assuming all other factors are unchanged). From time to time, we may seek to manage our exposure to fluctuations in the LME price of primary aluminum and/or associated regional premiums through financial instruments designed to protect our downside price risk exposure. Information regarding financial contracts is included in Note 14. Derivatives and risks affiliated with such financial contracts are disclosed specifically in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. 27 We saw declines in the pricing of aluminum through the first quarter of 2023, when compared to the aluminum prices that were increasing throughout 2021 and peaked during the first quarter of 2022. The average LME price for primary aluminum was $2,399 per tonne in the first quarter of 2023 compared to $3,267 per tonne in 2022, and $2,475 per tonne in 2021. The quarterly average MWP price was $618 per tonne for the first quarter of 2023, compared to $794 per tonne in 2022, and $581 per tonne in 2021. The quarterly average EDPP price was $302 per tonne for the first quarter of 2023, compared to $489 per tonne in 2022, and $272 per tonne in 2021. Results of Operations The following discussion for the three months ended March 31, 2023 reflects no change in production capacities, other than the curtailment of the Hawesville smelter, at our operating facilities. Our net sales are impacted primarily by the LME price for aluminum, regional and value-added premiums, and the volume and product mix of aluminum we ship during the period. In general, our results reflect the LME and regional premium pricing on an approximately one to three month lag basis reflecting contractual terms with our customers. Electrical power, alumina, carbon products and labor are the principal components of our cost of goods sold. Power costs can be volatile as a result of a number of factors beyond our control. See “Item 1A. Risk Factors - Increases in energy costs may adversely affect our business, financial position, results of operations and liquidity” in our Annual Report on Form 10-K for the year ended December 31, 2022. Power costs at our Kentucky plants are impacted by capacity demand charges, which are determined based on available power generating capacity in MISO, from which we purchase energy. The price of such capacity is set by auction annually in April. Our expected capacity demand costs for power are approximately $11.5 million per quarter through May 31, 2023 (notwithstanding the curtailment at Hawesville), in addition to the market price of power used. The price of capacity per quarter after June 1, 2023 is expected to be announced during the second quarter. The increase in energy costs had adversely affected our business in 2022, and resulted in the curtailment of our Hawesville facility as described above. So far in 2023, energy prices in the U.S. have reverted to historical levels, while Europe remains elevated. In Europe, increased energy prices affect both our Grundartangi operations (a portion of our power is linked to the Nord Pool power market) and our Vlissingen facility in the Netherlands, which utilizes natural gas to produce anodes used in our Grundartangi operations. The energy market in Europe has historically been dependent upon imported natural gas from Russia, and the significant reduction in Russian gas supply to Europe creates uncertainty with respect to the price and availability of natural gas, which could adversely affect operations at Vlissingen, and in turn operations at Grundartangi, if we are not able to source an alternative supply of anodes. In general, our results reflect the market cost of alumina on an approximately three-month lag reflecting the terms of our alumina contracts and inventory levels. Quarter ended Three months ended Sequential Year-to-date March 31, 2023 December 31, 2022 March 31, 2023 March 31, 2022 (in millions, except per share data) NET SALES: Related parties $ 412.2 $ 349.6 $ 412.2 $ 433.1 Other customers 140.2 180.3 140.2 320.5 Total net sales 552.4 529.9 552.4 753.6 Gross profit 48.1 (19.4) 48.1 93.2 Net (loss) income (38.6) (113.5) (38.6) 17.7 (LOSS) INCOME PER COMMON SHARE: Basic $ (0.42) $ (1.24) $ (0.42) $ 0.18 Diluted (0.42) (1.24) (0.42) 0.18 28 SHIPMENTS - PRIMARY ALUMINUM (1) United States Iceland Total Tonnes Sales $ (in millions) Tonnes Sales $ (in millions) Tonnes Sales $ (in millions) 2023 1 st Quarter 102,430 $ 317.6 78,735 $ 210.1 181,165 $ 527.7 2022 4 th Quarter 89,906 $ 270.5 79,565 $ 235.7 169,471 $ 506.2 1 st Quarter 134,953 $ 494.8 76,458 $ 247.5 211,411 $ 742.3 (1) Excludes scrap aluminum sales, purchased aluminum and alumina sales. Net sales Quarter ended Three months ended Sequential Year-to-date (in millions) March 31, 2023 December 31, 2022 March 31, 2023 March 31, 2022 Net sales $ 552.4 $ 529.9 $ 552.4 $ 753.6 Net sales (excluding scrap aluminum, purchased aluminum and alumina sales) increased by $23.2 million for the three months ended March 31, 2023, compared to the three months ended December 31, 2022, primarily driven by favorable volume and sales mix of $20.7 million and favorable LME and premium price realizations of $3.5 million. Net sales (excluding scrap aluminum, purchased aluminum and alumina sales) decreased by $211.8 million for the three months ended March 31, 2023, compared to the three months ended March 31, 2022, primarily driven by unfavorable volume and sales mix of $122.6 million, which was driven by the curtailment of our Hawesville smelter, and unfavorable LME and premium price realizations of $89.1 million Gross profit Quarter ended Three months ended Sequential Year-to-date (in millions) March 31, 2023 December 31, 2022 March 31, 2023 March 31, 2022 Gross profit (loss) $ 48.1 $ (19.4) $ 48.1 $ 93.2 Gross profit increased by $67.5 million for the three months ended March 31, 2023, compared to the three months ended December 31, 2022, primarily driven by favorable power price realization of $38.6 million, favorable raw material price realization of $20.5 million, and favorable metal price realization of $3.5 million, offset partially by unfavorable volume and sales mix of $8.6 million. Gross profit decreased by $45.1 million for the three months ended March 31, 2023 compared to the three months ended March 31, 2022, primarily driven by unfavorable metal price realization of $89.1 million and unfavorable volume and sales mix of $51.5 million, driven by curtailment of our Hawesville smelter. The change is partially offset by lower operating costs of $38.4 million, favorable power price realization of $36.9 million, and favorable raw material price realization of $10.8 million. Selling, general and administrative expenses Quarter ended Three months ended Sequential Year-to-date (in millions) March 31, 2023 December 31, 2022 March 31, 2023 March 31, 2022 Selling, general and administrative expenses $ 13.4 $ 11.3 $ 13.4 $ 11.7 Selling, general and administrative expenses increased by $2.1 million for the three months ended March 31, 2023, compared to the three months ended December 31, 2022, primarily driven by share-based compensation costs as a result of quarter over quarter changes in the Company's stock price and incentive payout during the quarter. 29 Selling, general and administrative expenses increased by $1.7 million for the three months ended March 31, 2023, compared to the three months ended March 31, 2022, primarily driven by incentive payout compared to 2022. Net loss on forward and derivative contracts Quarter ended Three months ended Sequential Year-to-date (in millions) March 31, 2023 December 31, 2022 March 31, 2023 March 31, 2022 Net loss on forward and derivative contracts $ (57.6) $ (90.6) $ (57.6) $ (56.7) Net loss on forward and derivative contracts improved by $33.0 million for the three months ended March 31, 2023, compared to the three months ended December 31, 2022, primarily driven by decreased losses on LME and Nord Pool forward contracts, attributable to fluctuations in forward pricing and volume of contracts, and decreased losses from MWP derivative contracts, which fully settled in December 2022. Net loss on forward and derivative contracts increased by $0.9 million for the three months ended March 31, 2023 compared to the three months ended March 31, 2022 primarily driven by increased losses on Nord Pool derivative contracts due to Nord Pool power forward price decreases, offset by improved LME forward prices and decreased losses from MWP derivative contracts, which fully settled in December 2022. Income tax benefit (expense) Quarter ended Three months ended Sequential Year-to-date (in millions) March 31, 2023 December 31, 2022 March 31, 2023 March 31, 2022 Income tax benefit (expense) $ 0.2 $ 17.2 $ 0.2 $ (1.7) Income tax benefit changed by $17.0 million for the three months ended March 31, 2023, compared to the three months ended December 31, 2022, primarily driven by net income from our consolidated U.S. results, which was attributable to favorable sales volume and pricing. Income tax changed from to a benefit of $0.2 million for the three months ended March 31, 2023, compared to expense of $1.7 million for the three months ended March 31, 2022, primarily driven by net losses from our foreign operations, attributable to unfavorable price realization and volume mix. See Note 8. Income Taxes to the consolidated financial statements included herein for additional information. Liquidity and Capital Resources Liquidity Our principal sources of liquidity are available cash and cash flows from operations. We also have access to our existing U.S. and Iceland revolving credit facilities (collectively, the "revolving credit facilities") and have raised capital in the past through public equity and debt markets. Our principal uses of cash include the funding of operating costs (including post-retirement benefits), debt service requirements, capital expenditures, investments in our growth activities and in related businesses, working capital and other general corporate requirements. We believe that cash provided from operations and financing activities will be adequate to cover our operations and business needs over the next twelve months. As of March 31, 2023, we had cash and cash equivalents of approximately $30.4 million and unused availability under our revolving credit facilities of $210.6 million (including $90.0 million under the Vlissingen Facility Agreement referred to below) resulting in a total liquidity position of approximately $241.0 million. Available Cash Our available cash and cash equivalents balance at March 31, 2023 was $30.4 million compared to $54.3 million at December 31, 2022. 30 Sources and Uses of Cash Our statements of cash flows are summarized below: Three months ended March 31, 2023 2022 (in millions) Net cash (used in) provided by operating activities $ (0.2) $ 37.4 Net cash used in investing activities (14.3) (26.0) Net cash used in financing activities (9.4) (3.9) Change in cash, cash equivalents and restricted cash $ (23.9) $ 7.5 The change from net cash provided by operating activities during the three months ended March 31, 2022 to net cash used in operating activities during the three months ended March 31, 2023 was primarily driven by net loss during the quarter attributable to lower shipments compared to 2022 attributable to the curtailment of our Hawesville smelter, pricing decreases, and timing of payables, partially offset by timing of receivables payment in 2023 compared to 2022. The decrease in net cash used in investing activities was primarily due to reduced spending on capital projects during the three months ended March 31, 2023, driven by the completion of the Mt. Holly restart project in 2022 and partially offset by spending on the Grundartangi casthouse project. The change in net cash used in financing activities was primarily due to a reduction in borrowings under the Grundartangi casthouse debt facility and net repayment on our revolving credit facilities compared to 2022. Availability Under Our Credit Facilities Our U.S. revolving credit facility, dated May 2018 (as amended, the "U.S. revolving credit facility"), previously provided for borrowings of up to $220.0 million, including up to $110.0 million under a letter of credit sub-facility. In June 2022, we entered into a Fourth Amendment to our existing $220.0 million U.S. revolving credit facility, increasing the maximum capacity from $220.0 million to $250.0 million, including up to $150.0 million under a letter of credit sub-facility. The U.S. revolving credit facility matures in June 2027. Any letters of credit issued and outstanding under the U.S. revolving credit facility reduce our borrowing availability on a dollar-for-dollar basis. We have also entered into, through our wholly-owned subsidiary Nordural Grundartangi ehf ("Grundartangi"), a $50.0 million revolving credit facility, dated November 2013, as amended (the "Iceland revolving credit facility"). On February 4, 2022, we amended the Iceland revolving credit facility and increased the facility amount to $80.0 million in the aggregate. On September 28, 2022, we further amended the Iceland revolving credit facility and increased the facility amount to $100.0 million in the aggregate. The Iceland revolving credit facility matures in November 2024. The availability of funds under our credit facilities is limited by a specified borrowing base consisting of certain accounts receivable, inventory and qualified cash deposits which meet the lenders' eligibility criteria. Increases in the price of aluminum and/or restarts of previously curtailed operations, for example, increase our borrowing base by increasing our accounts receivable and inventory balances; decreases in the price of aluminum and/or curtailments of production capacity would decrease our borrowing base by reducing our accounts receivable and inventory balances. As of March 31, 2023, our U.S. revolving credit facility had a borrowing base of $169.8 million, $63.1 million in borrowings and $41.1 million in letters of credit outstanding with total availability of $65.6 million. Of the outstanding letters of credit, $27.9 million are related to our power commitments and $13.3 million are primarily for the purpose of securing certain debt and workers’ compensation commitments. As of March 31, 2023, our Iceland revolving credit facility had a borrowing base of $100.0 million and $45.0 million in outstanding borrowings, with total availability of $55.0 million. As of March 31, 2023, our credit facilities (including the Vlissingen Facility Agreement referred to below) had $210.6 million of net availability after consideration of our outstanding borrowings and letters of credit. We may borrow and make repayments under our credit facilities in the ordinary course based on a number of factors, including the timing of payments from our customers and payments to our suppliers. Our credit facilities contain customary covenants, including restrictions on mergers and acquisitions, indebtedness, affiliate transactions, liens, dividends and distributions, dispositions of collateral, investments and prepayments of indebtedness, 31 including in the U.S. revolving credit facility, a springing financial covenant that requires us to maintain a fixed charge coverage ratio of at least 1.0 to 1.0 as of any date of determination on which availability under the U.S. revolving credit facility is less than or equal to $25.0 million, or 10% of the borrowing base, but not less than $17.85 million. We intend to maintain availability to comply with these levels any time we would not meet the ratio, which could limit our ability to access the full amount of our availability under our U.S revolving credit facility. Our Iceland revolving credit facility contains a covenant that requires Grundartangi to maintain a minimum equity ratio. As of March 31, 2023, we were in compliance with all such covenants or maintained availability above such covenant triggers. Grundartangi Casthouse Facility On November 2, 2021, Grundartangi entered into an eight-year Term Facility Agreement with Arion Bank hf, to provide for borrowings up to $130.0 million in connection with the casthouse project at Grundartangi (the "Casthouse Facility"). Under the Casthouse Facility, repayments of principal amounts will be made in equal quarterly installments equal to 1.739% of the principal amount, the first payment occurring in July 2024, with the remaining 60% of the principal amount to be paid no later than the termination date. The Casthouse Facility will mature in December 2029. The Casthouse Facility bears interest at a rate equal to USD LIBOR 3 month plus an applicable margin. As of March 31, 2023 there were $60.0 million in borrowings outstanding under the Casthouse Facility. The Casthouse Facility also contains customary covenants, including restrictions on mergers and acquisitions, indebtedness, preservation of assets, and dispositions of assets and contains a covenant that requires Grundartangi to maintain a minimum equity ratio. As of March 31, 2023, we were in compliance with all such covenants. Senior Notes and Convertible Senior Notes In April 2021, we issued $250.0 million principal of senior secured notes that will mature on April 1, 2028 (the "2028 Notes"), unless earlier refinanced in accordance with their terms. Interest on the 2028 Notes is payable semi-annually on April 1 and October 1 of each year, at a rate of 7.5% per year. The indenture governing the 2028 Notes contains customary covenants which may limit our ability, and the ability of certain of our subsidiaries, to: (i) incur additional debt; (ii) incur additional liens; (iii) pay dividends or make distributions in respect of capital stock; (iv) purchase or redeem capital stock; (v) make investments or certain other restricted payments; (vi) sell assets; (vii) issue or sell stock of certain subsidiaries; (viii) enter into transactions with shareholders or affiliates; and (ix) effect a consolidation or merger. In April 2021, we issued $86.3 million in aggregate principal amount of Convertible Notes (the "Convertible Notes"), that will mature on May 1, 2028, unless earlier converted, repurchased or redeemed. The principal included the full exercise of the option by the initial purchasers of the Convertible Notes to purchase $11.3 million of additional principal amount. The Convertible Notes bear interest semi-annually in arrears on May 1 and November 1 of each year, at a rate of 2.75% per annum in cash. Iceland Term Facility Our wholly-owned subsidiary, Grundartangi, entered into a Term Facility Agreement with Arion Bank hf, dated September 2022, (the "Iceland Term Facility") to provide for borrowings up to €13.6 million. Under the Iceland Term Facility, repayments of principal amounts will be made in equal monthly installments, the first payment occurring in February 2023, with the remainder of the principal amount to be paid no later than the termination date in January 2024. Borrowings under the Iceland Term Facility bear interest at a rate equal to 3.2% plus EUR EURIBOR 1 month as published at any time by the European Money Markets Institute. As of March 31, 2023, there were €11.3 million ( $12.3 million, based on the prevailing exchange rate on March 31, 2023 ) in outstanding borrowings under the Iceland Term Facility. Vlissingen Facility Agreement On December 9, 2022, Vlissingen entered into a Facility Agreement with Glencore International AG pursuant to which Vlissingen may borrow from time to time up to $90 million in one or more loans at a fixed interest rate equal to 8.75% per annum and payable on December 2, 2024 (the Vlissingen Facility Agreement"). The obligations under the Vlissingen Facility Agreement are secured by liens on the ground lease on which Vlissingen's facilities are located. Vlissingen's moveable assets, financial assets, receivables and other assets, and Vlissingen's shares. The Vlissingen Facility Agreement contains customary covenants, including with respect to mergers, guarantees and preservation and dispositions of assets. The availability period for borrowings under the Vlissingen Facility Agreement ends December 2, 2024. Amounts drawn, if any, under the Vlissingen Facility Agreement are expected to be used for general corporate and working capital purposes of Century and its subsidiaries. As of March 31, 2023, there were no outstanding borrowings under the Vlissingen Facility Agreement. Supplemental Guarantor Financial Information 32 The Company has filed a Registration Statement on Form S-3 (the "Universal Shelf Registration Statement") with the SEC pursuant to which the Company may, from time to time, offer an indeterminate amount of securities, which may include securities that are guaranteed by certain of the Company's subsidiaries. As of March 31, 2023, we have not issued any debt securities pursuant to the Universal Shelf Registration Statement. However, any securities that we may issue in the future may limit our ability, and the ability of certain of our subsidiaries, to pay dividends or make distributions in respect of capital stock. "Guarantor Subsidiaries" refers to all of our material domestic subsidiaries except for Nordural US LLC, Century Aluminum Development LLC and Century Aluminum of West Virginia, Inc. The Guarantor Subsidiaries are 100% owned by Century. All guarantees will be full and unconditional; all guarantees will be joint and several. Our foreign subsidiaries, together with Nordural US LLC, Century Aluminum Development LLC and Century Aluminum of West Virginia, Inc., are collectively referred to as the "Non-Guarantor Subsidiaries." We allocate corporate expenses or income to our subsidiaries and charge interest on certain intercompany balances. The following summarized financial information of both the Company and the Guarantor Subsidiaries ("Guarantors") is presented on a combined basis. Intercompany balances and transactions between the Company and the Guarantors have been eliminated and the summarized financial information does not reflect investments of the Company or the Guarantors in the Non-Guarantor Subsidiaries ("Non-Guarantors"). The Company’s or Guarantors’ amounts due from, amounts due to, and transactions with the Non-Guarantors are disclosed below: March 31, 2023 December 31, 2022 Current assets $ 305.3 $ 305.7 Non-current assets 668.8 704.5 Current liabilities 255.2 309.6 Non-current liabilities 483.0 487.1 Three months ended March 31, 2023 Net sales $ 342.3 Gross profit (loss) 44.6 Income (loss) before income taxes 21.0 Net income (loss) (38.6) As of March 31, 2023 and December 31, 2022, an intercompany receivable due to the Company and Guarantors from the Non-Guarantors totaled $ 11.4 million and $18.2 million, respectively, and an intercompany non-current loan due to the Company from the Non-Guarantors totaled $ 435.4 million and $466.3 million, respectively. Contingent Commitments We have a contingent obligation in connection with the "unwind" of a contractual arrangement between Century Aluminum of Kentucky ("CAKY"), Big Rivers Electric Corporation and a third party and the execution in July 2009 of a long-term cost-based power contract with Kenergy, a member of a cooperative of Big Rivers. This contingent obligation consists of the aggregate payments made to Big Rivers by the third party on CAKY’s behalf in excess of the agreed upon base amount under the long-term cost-based power contract with Kenergy. As of March 31, 2023, the principal and accrued interest for the contingent obligation was $29.8 million, which was fully offset by a derivative asset. We may be required to make installment payments for the contingent obligation in the future. These payments are contingent based on the LME price of primary aluminum and the level of Hawesville’s operations. As of March 31, 2023, based on the LME forward market prices and our expected level of Hawesville operations, we believe that we will not be required to make payments on the contingent obligation during the term of the agreement, which expires in 2028. There can be no assurance that circumstances will not change thus accelerating the timing of such payments. 33 Employee Benefit Plan Contributions In 2013, we entered into a settlement agreement with the Pension Benefit Guaranty Corporation (the "PBGC") regarding an alleged "cessation of operations" at our Ravenswood facility (the "PBGC Settlement Agreement"). Pursuant to the terms of the PBGC Settlement Agreement, we agreed to make additional contributions (above any minimum required contributions) to our defined benefit pension plans totaling approximately $17.4 million. Under certain circumstances, in periods of lower primary aluminum prices relative to our cost of operations, we were able to defer one or more of these payments, provided that we provide the PBGC with acceptable security for such deferred payments. We did not make any contributions for the three months ended March 31, 2023, and 2022. We historically elected to defer certain payments under the PBGC Settlement Agreement and provided the PBGC with the appropriate security. In October 2021, we amended the PBGC Settlement Agreement (the "Amended PBGC Settlement Agreement") such that we removed the deferral mechanism and agreed to contribute approximately $2.4 million per year to our defined benefit pension plans for a total of approximately $9.6 million, over four years beginning on November 30, 2022 and ending on November 30, 2025, subject to acceleration if certain terms and conditions are met in such amendment. As of March 31, 2023, we made contributions of $2.4 million related to the Amended PBGC Settlement Agreement. Section 232 Aluminum Tariff On March 23, 2018, the U.S. implemented a 10% tariff on imported primary aluminum products into the U.S. These tariffs are intended to protect U.S. national security and incentivize the restart of primary aluminum production in the U.S., reducing reliance on imports and ensuring that domestic producers, like Century, can supply all the aluminum necessary for critical industries and national defense. In addition to primary aluminum products, the tariffs also cover certain other semi-finished products. All imports that directly compete with our products are covered by the tariff, with the exception of imports from Australia, Canada and Mexico. Additionally, primary aluminum imports from Argentina are allowed up to an annual quota limit of 169,000 metric tonnes, the first 18,000 metric tonnes of imports from the European Union and the first 900 metric tonnes of imports from the United Kingdom are also allowed duty free. Imports that receive a product exclusion from the Department of Commerce may also enter the US duty free. In July 2022, the International Trade Commission (ITC) initiated a review of the Section 301 and 232 duties as required by law every four years. On March 15, 2023, the ITC submitted a report to the United States Congress entitled, 'Economic Impact of Section 232 and 301 Tariffs on U.S. Industries,' in which the ITC found that the tariffs increased the production of domestic aluminum while causing prices to increase by less than two percent. Accordingly, we do not believe there will be any material changes to the current tariffs in the near future. Other Items On January 17, 2023, our wholly owned subsidiary, Mt. Holly Commerce Park LLC, entered into a binding agreement, subject to ordinary course conditions, to sell approximately 133 acres of land for approximately $28.5 million. We previously formed the commerce park, located near our Mt. Holly smelter, to develop excess land at the site and to assist the county with bringing additional business and commerce to the area. During 2021, we initiated efforts to restart the curtailed capacity at our Mt. Holly facility. The project was completed during the second quarter of 2022, resulting in total production of 75% of Mt. Holly’s full capacity. During 2021, we announced plans for construction of a new billet casthouse at Grundartangi. The Grundartangi casthouse project began in late 2021 and is expected to continue through the second half of 2023. The Grundartangi casthouse project will be fully funded through the Casthouse Facility. The project is progressing and is expected to ship first billets out of the casthouse in the first quarter of 2024, subject to market conditions. In 2011, our Board of Directors authorized a $60.0 million common stock repurchase program and during the first quarter of 2015, our Board of Directors increased the size of the program by $70.0 million. Under the program, Century is authorized to repurchase up to $130.0 million of our outstanding shares of common stock, from time to time, on the open market at prevailing market prices, in block trades or otherwise The timing and amount of any shares repurchased will be determined by our management based on its evaluation of market conditions, the trading price of our common stock and other factors. We made no repurchases during the years ended 2020, 2021, and 2022. As of March 31, 2023, we had $43.7 million remaining under the repurchase program authorization. The repurchase program may be expanded, suspended or discontinued by our Board, in its sole discretion, at any time. In November 2009, Century Aluminum of West Virginia, Inc. ("CAWV") filed a class action complaint for declaratory judgment against the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union ("USW"), the USW’s local and certain CAWV retirees, individually and as class representatives ("CAWV 34 Retirees"), seeking a declaration of CAWV’s rights to modify/terminate retiree medical benefits. Later in November 2009, the USW and representatives of a retiree class filed a separate suit against CAWV, Century Aluminum Company, Century Aluminum Master Welfare Benefit Plan, and various John Does with respect to the foregoing. On August 18, 2017, the District Court for the Southern District of West Virginia approved a settlement agreement in respect of these actions, pursuant to which, CAWV agreed to make payments into a trust for the benefit of the CAWV Retirees in the aggregate amount of $23.0 million over the course of ten years. Upon approval of the settlement, we paid $5.0 million to the aforementioned trust in September 2017 and agreed to pay the remaining amounts under the settlement agreement in annual increments of $2.0 million for nine years. At March 31, 2023, we had $2.0 million in other current liabilities and $4.9 million in other liabilities related to this agreement. We are a defendant in several actions relating to various aspects of our business. While it is impossible to predict the ultimate disposition of any litigation, we do not believe that any of these lawsuits, either individually or in the aggregate, will have a material adverse effect on our financial condition, results of operations or liquidity. See Note 11. Commitments and Contingencies to the consolidated financial statements included herein for additional information. Capital Resources We intend to finance our future capital expenditures from available cash, cash flows from operations and if necessary, borrowing under our existing revolving credit facilities. For major investment projects we would likely seek financing from various capital and loan markets and may potentially pursue the formation of strategic alliances. We may be unable, however, to issue additional debt or equity securities, or enter into other financing arrangements on attractive terms, or at all, due to a number of factors including a lack of demand, unfavorable pricing, poor economic conditions, unfavorable interest rates, or our financial condition or credit rating at the time. Future uncertainty in the U.S. and international markets and economies may adversely affect our liquidity, our ability to access the debt or capital markets and our financial condition. Capital expenditures incurred for the three months ended March 31, 2023 were $2.8 million, excluding expenditures of $10.8 million associated with the Grundartangi casthouse project. We estimate our total capital spending in 2023, excluding the Grundartangi casthouse project and Jamalco acquisition, will be approximately $20 to $30 million, related to our ongoing investment and sustainability projects at our plants. We anticipate making additional investments in Jamalco to fund Century's proportionate share of capital expenditures. 35