Related Party Transactions

9 Months Ended

Sep. 30, 2019

The significant related party transactions occurring during the nine months ended September 30, 2019 and 2018 are described below. We believe all of our transactions with Glencore and BHH are at prices that approximate market.

Glencore ownership

As of September 30, 2019, Glencore plc and its affiliates (together "Glencore") beneficially owned 42.9% of Century’s outstanding common stock (47.0% 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 7. Shareholders' Equity for a description of our outstanding Series A Convertible Preferred Stock. From time to time Century and Glencore enter into various transactions for the purchase and sale of primary aluminum, purchase and sale of alumina, certain forward financial contracts and loan agreements.

Sales to Glencore

For the three months ended September 30, 2019 and 2018, 64.5% and 63.4%, respectively, of our consolidated net sales were made to Glencore, while for the nine months ended September 30, 2019 and 2018, 64.1% and 62.9%, respectively, of our consolidated net sales were made to Glencore. Glencore purchases the aluminum we produce for resale.

Glencore purchases aluminum produced at our North American smelters at prices based on the London Metal Exchange (the "LME") plus the Midwest regional delivery premium and any product premiums. Glencore purchases aluminum produced at our Grundartangi, Iceland smelter at prices based on the LME plus the European Duty Paid premium and any applicable product premiums.

We have also entered into agreements with Glencore pursuant to which we sell certain amounts of alumina at market prices. For the three months ended September 30, 2019, we recorded $4.5 million of revenue related to 12,737 tonnes, and for the nine months ended September 30, 2019, we recorded $26.2 million of revenue related to 72,506 tonnes.

Purchases from Glencore

We purchase a portion of our alumina requirements from Glencore. Alumina purchases from Glencore during the nine months ended September 30, 2019 were priced based on a published alumina index.

Financial contracts with Glencore

We have certain financial contracts with Glencore. See Note 14. Derivatives regarding these forward financial sales contracts.

Hawesville Term Loan

On April 29, 2019, we entered into a loan agreement with Glencore pursuant to which the Company borrowed $40.0 million (the "Hawesville Term Loan”). See Note 10. Debt for additional information. Borrowings under the Hawesville Term Loan are being used to partially finance the second phase of the Hawesville restart project.

Ownership in Baise Haohai Carbon Co., Ltd. ("BHH")

On May 22, 2019, Century Aluminum Asia Holdings Ltd. ("CAHL"), a wholly-owned subsidiary of Century Aluminum Company, entered into an equity transfer agreement (the "Equity Transfer Agreement") with Guangxi Qiangqiang Carbon Co., Ltd. ("GQQ") pursuant to which GQQ agreed to acquire all of our 40% interest in BHH. We previously owned a 40% stake in BHH, with an agreement to purchase carbon anodes from them for use in our manufacturing operations.

As consideration for the sale, GQQ has agreed to pay RMB144.9 million in cash, payable in two equal installments. The first payment was received in June 2019 and the second payment is due not later than December 31, 2019. In connection with this sale, we recorded a loss of $4.3 million, included in the Consolidated Statements of Operations for the nine months ended September 30, 2019. As of September 30, 2019, we have an outstanding $10.1 million receivable for the second payment, included in Accounts receivable - net, in the Consolidated Balance Sheets.

Summary

A summary of the aforementioned significant related party transactions is as follows:



	Three months ended September 30,				Nine months ended September 30,
	2019		2018		2019		2018
Net sales to Glencore	$	282.3	$	305.3	$	898.7	$	884.2
Purchases from Glencore	43.6		57.2		249.8		205.6
Purchases from BHH	2.2		5.9		16.8		21.4