Asset Retirement Obligations

12 Months Ended

Dec. 31, 2021

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement Obligations

R. Asset Retirement Obligations

Alcoa records AROs related to legal obligations associated with the standard operation of bauxite mines, alumina refineries, and aluminum smelters. These AROs consist primarily of costs associated with mine reclamation, closure of bauxite residue areas, spent pot lining disposal, and landfill closures. The Company also recognizes AROs for the disposal of regulated waste materials related to the demolition of facilities and for any significant lease restoration obligations, if required by a lease agreement.

The following table details the carrying value of recorded AROs by major category, of which $116 and $128 was classified as a current liability as of December 31, 2021 and 2020, respectively:

December 31,	2021		2020
Closure of bauxite residue areas	$	274	$	278
Mine reclamation		255		264
Spent pot lining disposal		107		108
Demolition		72		72
Landfill closure		30		31
Balance at end of year	$	738	$	753

The following table details the changes in the total carrying value of recorded AROs:

December 31,	2021			2020
Balance at beginning of year	$	753		$	717
Accretion expense		20			21
Liabilities incurred		101			107
Payments		(101	)		(93	)
Reversals of previously recorded liabilities		(6	)		(17	)
Foreign currency translation and other		(29	)		18
Balance at end of year	$	738		$	753

Liabilities incurred in 2021 include:

• $30 for new mine areas opened during the year and higher estimated mine reclamation costs, partially driven by increased complexity of reclamation areas due to steeper mine pits and grades;

• $28 for bauxite residue areas, including new bauxite residue areas as well as changes in engineering designs for both open and closed bauxite residue areas;

• $17 related to spent pot lining treatment and disposal;

• $16 related to the closure of the Wenatchee smelter announced in the fourth quarter of 2021;

• $5 related to the closure of the Lake Charles anode facility announced in the third quarter of 2021; and,

• $5 related to changes in scope for landfill closures.

The additional accruals were primarily recorded with corresponding capitalized asset retirement costs (see Note B) except for $23 related to closed sites which were recorded to Restructuring and other charges, net on the accompanying Statement of Consolidated Operations (see Note D).

Liabilities incurred in 2020 include accruals for new mine areas opened during the year, higher estimated mine reclamation costs, accruals for bauxite residue areas opened during the year, and accruals related to spent pot lining treatment and disposals. The additional accruals were primarily recorded with corresponding capitalized asset retirement costs (see Note B) except for $2 which were recorded to Restructuring and other charges, net on the accompanying Statement of Consolidated Operations (see Note D).  

In 2021, reversals of previously recorded liabilities included a reversal of $5 due to the determination that previously estimated demolition costs were not required at the previously closed Tennessee site. In 2020, reversals of previously recorded liabilities were primarily related to the sale of Gum Springs (see Note U) and completion of demolition projects at numerous permanently closed sites.