Since signing of the Term Sheet, the market has questioned...

Since signing of the Term Sheet, the market has questioned Alcoa's commitment to the Project. It should be noted that the word "commitment" is used multiple times in the most recent announcement (which was approved for release by Alcoa). The JV partners are endeavoring to communicate this message to the market, but the market is either not listening, or is simply not convinced. It is conceded that the 'optics' aren't necessarily convincing, and Roly exacerbates this with his poor communication skills. However, I don't believe the optics are an accurate reflection of the underlying business case strength i.e. the probability of the JV building a full Production Plant that will deliver excellent business performance metrics. The construction of the Demo Plant is a given, in my mind. They have obviously 'optimized' the hell out of Demo plant design over the last 6 months during FEED. To the point where they now believe a significantly smaller plant can still achieve the primary objective of demonstrating scalability and process flow.

The market has interpreted the Demo plant downsizing negatively, which is an understandable knee jerk reaction. However, this "show me the money" (mentality) to demonstrate your commitment, is an over simplification of the situation, and it ignores a basic element of successful Project execution - don't spend money you don't need to. Moreover, the downsizing doesn't negatively impact the overall business goal i.e. achieving full production. God, forbid we save money! Anyone who has watched an Alcoa shareholder presentation knows that they are very conservative in their capital spending. Hence, this is just part of their playbook. A playbook which successfully executes and delivers world class Projects.

IMO GLTAH!