ASX 200 mining share Alumina Limited (ASX: AWC) has fallen below $1 per share for the first time since November 2013.
The mining stock hit a new 52-week low of 98.5 cents on Friday.
The Alumina share price has been steadily tumbling all year and is down 34% in the year to date.
By comparison, the S&P/ASX 200 Index (ASX: XJO) has risen 1.6% and the S&P/ASX 300 Metal & Mining Index (ASX: XMM) has dipped 2.2% over the same period.
Image source: Getty Images
What's going on with this ASX 200 mining share?
Last month, Alumina revealed a net loss after tax of US$43 million for the first half of 2023.
This was a stunning decline from the US$168 million net profit after tax (NPAT) reported for 1H FY22.
Alumina CEO Mike Ferraro cited a number of challenges for the business that had led to higher costs and lower production.
Ferraro said:
Alumina had a difficult first half and continues to face significant uncertainty due to ongoing delays with mining permits in WA.
While Alcoa World Alumina & Chemicals (AWAC) did see lower costs in parts of our portfolio during the first half through softening energy prices, the impact of lower grade bauxite in WA meant our overall cash cost per tonne increased compared to the second half of 2022.
AWAC is 40% owned by Alumina Limited and 60% owned by Alcoa Corp (NYSE: AA).
Alcoa is continuing to work with West Australian Government agencies on gaining the annual permit renewals required to operate the mines, which then supply the bauxite to the company's local alumina refineries.
Ferraro said:
We are operating in a complex regulatory environment where there is no certainty as to timeframes or
outcomes and the potential impacts on the business are unclear.AWAC is currently processing lower grade bauxite within areas already permitted under Mine Management Plans at the Huntly Mine in WA, resulting in both higher costs and lower production.
Alumina price trends lower in 2023
The alumina price rose to a high of US$371 per tonne in February before beginning a decline.
This was caused by weak aluminium demand outside China and lower industry costs of production.
Ferraro commented that prices had rebounded a little recently, partly due to a recovery in aluminium production in China.
The Alumina price is now US$342 per tonne.
No dividend for a year
Investors in this ASX 200 mining share have not received a dividend payment for 12 months.
Alumina has historically been seen as a pretty reliable ASX dividend share.
This time last year, Ferraro was describing the company's dividend yield as one of the highest among its industry peers.
At the time, he said the yield had averaged 7.4% over the previous five years.
Broker eyes 30% share price gain
After Alumina reported its 1H FY23 results, top broker Citi raised its rating on the ASX 200 mining share to neutral.
Citi placed a 12-month share price target of $1.30 on Alumina, indicating a potential 30% upside.
