Expanding Portfolio: Alumina Ltd (ASX: AWC) stock rallied over 9.02% on March 02, 2017 driven by sector driven movement. Although the group reported for a statutory net loss after tax of US$30 million for FY16 against net profit of US$88 million in previous year, AWC is now positive on commodity prices, ongoing efforts on productivity gains and cost control initiatives. The group expanded their initial design capacity of 2.6 million tonnes per annum to more than twice that rate at their Juruti mine in Brazil. The group also intends to further add 0.5 million tonnes per annum in 2017 by incurring a little capital expenditure. Meanwhile, AWC finished the restructuring of the AWAC asset portfolio in 2016 which currently finished the virtually full ramp up of Ma’aden, the closure of Suralco, Point Comfort being fully curtailed, and the Portland smelter restarted being assured early in 2017. This restructuring generated a solid refining portfolio in 2016 with AWAC positioning as one of the leading players in the bauxite market. The group’s strategy for alumina enhanced revenue by de-linking alumina price, leading to a better available profit per tonne of metal to accrue to the upstream. Further, Chinese authorities’ probable move on cutting production of aluminum and steel may support the stock. Recently, the Jamaica government reported that they had no plans to abandon the bauxite levy and would rather go in a profit share regime with mining companies to revamp the bauxite sector.
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