GF It could be a lot better, it's competitive edge is cheap...

GF It could be a lot better, it's competitive edge is cheap raw material (Bauxite). Control of this cost has kept Alcoa and Alumina competitive against the subsidised industry's in China and Russia. The ore body is right on the coast near a modern capital city with associated infrastructure, stable government, educated population and minimal corruption.

Sir Charles Court granted the lease to the Aluminium Corporation of America for next to nothing on the condition that no raw product could be exported without being processed. Actual Value adding in country it was the difference between a small mining operation employing a couple of hundred people and an industry employing directly and indirectly twenty thousand people.

Alcoa was made and has been sustained off the lease in the Darling Scarp.

Plenty of ore left up there however Alcoa believes itself to be a refining, smelting and manufacturing business and has forgotten the importance of the Mining operation and the A1 lease in WA. Like it or not Alcoa's business is to add value to the Bauxite Mined in the Darling Scarp the rest of the business is a Jenga tower built on that lease. I understand there are other Bauxite resources that Alcoa exploits but at nowhere near the cost of the Western Australian Operation. Wagerup and Pinjarra refineries owe their status as the lowest cost refineries on the planet to the cheap ore provided from the Darling Scarp.

From the outside Mining can seem like a simple bulk earthmoving exercise however it isn't. Even in a Mining friendly state like WA things can go wrong case in point MRL losing their bid to expand Yligarn was knocked back because of the impact on a remote mountain range containing 3 billion year old rocks.

How long can Alcoa mine in the worlds only Jarrah forest and adjacent to Perth's drinking water supply without properly resourcing and managing its Mining business. This is pure speculation however maybe Alcoa haven't just taken the ability to mine in the Darling Scarp for granted maybe they have realised the risk posed by any curtailment of the Western Australian Mining operations and have developed cost comparable Bauxite resources.

I until recently have been purely Mining and Mineral exploration focused in my investments because I have some level of understanding in the space. I rely on Exploration results, reported resources and reserves plus all the usual analysis of the Board, governance and so on.

If I accept my theory that Alcoa is a Mining company reliant on one lease then start my due diligence I am finding it difficult to get even the most basic information. Happy for someone to point me in the right direction but I can't find any exploration results or expenditure, inferred resource, ore reserves or mineral resource? not even a mine life estimate. From this perspective Alcoa for me arrives at a high risk investment option.

Given what history tells us about how well large organisations pay attention to detail and asses risk combined with the current risk profile of Alcoa's Mining operations I am quite comfortable to short Alcoa and Alumina.

My opinion only not investment advice DYOR.