Related Party Transactions

9 Months Ended

Sep. 30, 2023

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

The significant related party transactions occurring during the nine months ended September 30, 2023 and 2022 are described below. We believe all of our transactions with related parties are at prices that approximate market.

Glencore Ownership

As of September 30, 2023, Glencore plc and its affiliates (together "Glencore") beneficially owned 42.9% of Century’s outstanding common stock (46.0% on a fully-diluted basis assuming the conversion of all of the Series A Convertible Preferred Stock) and all of our outstanding Series A Convertible Preferred Stock. See Note 8. Shareholders' Equity for a description of our outstanding Series A Convertible Preferred Stock. Century and Glencore enter into various transactions from time to time such as the purchase and sale of primary aluminum, purchase and sale of alumina and other raw materials, tolling agreements as well as forward financial contracts and borrowing and other debt transactions.

Sales to Glencore

For the three months ended September 30, 2023 and 2022, we derived approximately 73.5% and 63.5% of our consolidated net sales from Glencore, respectively.

Glencore purchases aluminum produced at our U.S. smelters at prices based on the LME plus the Midwest regional delivery premium plus any additional market-based product premiums. Glencore purchases aluminum produced at our Grundartangi, Iceland smelter at prices primarily based on the LME plus the European Duty Paid premium plus any additional market-based product premiums.

We have entered into agreements with Glencore pursuant to which we sell certain amounts of alumina at market-based prices. For the three and nine months ended September 30, 2023, we recorded $50.0 million and $136.8 million of revenue related to alumina sales to Glencore, respectively. For the three and nine months ended September 30, 2022, we recorded $4.9 million and $18.8 million, respectively, of revenue related to alumina sales to Glencore.

Purchases from Glencore

We purchase a portion of our alumina and certain other raw material requirements from Glencore. Alumina purchases from Glencore during the three months ended September 30, 2023 were priced based on published alumina and aluminum indices as well as fixed prices.

Financial Contracts with Glencore

We have certain financial contracts with Glencore. See Note 15. Derivatives regarding these forward financial sales contracts.

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 (the "Vlissingen Facility Agreement") in one or more loans at a fixed interest rate equal to 8.75% per annum and payable on December 2, 2024. See Note 11. Debt for additional information. Borrowings under the Vlissingen Facility Agreement are expected to be used for general corporate and working capital purposes of Century and its subsidiaries.

Carbon Credit Repurchase Agreement

On September 28, 2023, our wholly owned subsidiary Nordural Grundartangi ehf ("Grundartangi"), entered into a structured repurchase arrangement with an affiliate of Glencore pursuant to which it sold 390,000 European Union Allowances ("Carbon Credits") at a price of €82.18 per Carbon Credit, for an aggregate amount of €32.1 million. Pursuant to the terms of the transaction, Grundartangi will repurchase the same number of Carbon Credits by December 21, 2023, at a price of €83.72 per Carbon Credit, for an aggregate amount of EUR €32.7 million. Given the repurchase element of the agreement, the Company substantially retains all of the remaining benefits of the assets and has accounted for the transaction as a financing arrangement in accordance with Topic 606.

Summary

A summary of the aforementioned significant related party sales and purchases is as follows: 

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Net sales to Glencore	$	400.9	$	404.9	$	1,240.3	$	1,321.5
Purchases from Glencore(1)	23.2		56.0		174.5		268.5

(1)Includes settlements of financial contract positions.