Alcoa Revises Schedule for Modernization of Baie-Comeau Smelter

  Alcoa Revises Schedule for Modernization of Baie-Comeau Smelter

       Initial work begins with permanent closure of Soderberg potlines

Business Wire

NEW YORK -- May 16, 2013

Alcoa (NYSE:AA) announced today it is postponing construction of a new potline
at its Baie-Comeau smelter in Québec as part of a revised modernization plan
for the smelter, but will begin preparations for the upgrade by investing $100
million in the smelter over the next three years and by permanently closing
the plant’s two Soderberg potlines.

The new potline is now expected to be in service in 2019 instead of 2016,
subject to board approval. The change is due to current market conditions.

The $100 million investment includes $30 million that will be used to upgrade
the plant’s casthouse facilities in support of the growing automotive market.
This is in addition to the $75 million already dedicated to rebuild the port
facilities to better meet the future needs of a modernized plant.

“The Government of Québec proved to be very open to reviewing the schedule
when it became important for Alcoa to adapt to market realities and make the
project as cost-effective as possible,” said Martin Brière, President of Alcoa
Canada Primary Products. “These efforts will help move our Baie-Comeau plant
down the global aluminum cost curve, and continue to provide important
economic benefits to the region.”

The closure of the two Soderberg potlines, which are among the highest-cost
smelting capacity in the Alcoa system, will be complete in August. The two
lines represent 105,000 metric tons of capacity, and are part of the 460,000
metric tons of smelting capacity Alcoa announced was under review on May 1.

The revised project schedule will not impact Alcoa’s commitments to the
Government of Québec, and will have a positive effect on the environment. As
agreed in November 2011, the company will provide $50million over 25 years to
the Economic Development Fund managed by the Government of Québec, and will
continue to contribute to its Alcoa Sustainable Communities Fund with an
investment of $10million over 25years for the Baie-Comeau community. In
addition, the closure will result in an immediate 40% reduction in greenhouse
gas emissions for the Baie-Comeau facility.

Capital costs outlined in the announcement are included in the company’s 2013
plan. Total 2013 restructuring-related charges associated with the closure
outlined above are expected to be between $135 million and $155 million
after-tax, or $0.11 to $0.13 per share, of which approximately 30% would be
recorded in the second quarter. Cash costs during 2013 are expected to total
approximately $100 million.

About Alcoa

Alcoa is the world’s leading producer of primary and fabricated aluminum, as
well as the world’s largest miner of bauxite and refiner of alumina. In
addition to inventing the modern-day aluminum industry, Alcoa innovation has
been behind major milestones in the aerospace, automotive, packaging, building
and construction, commercial transportation, consumer electronics and
industrial markets over the past 125 years. Among the solutions Alcoa markets
are flat-rolled products, hard alloy extrusions, and forgings, as well as
Alcoa® wheels, fastening systems, precision and investment castings, and
building systems in addition to its expertise in other light metals such as
titanium and nickel-based super alloys. Sustainability is an integral part of
Alcoa’s operating practices and the product design and engineering it provides
to customers. Alcoa has been a member of the Dow Jones Sustainability Index
for 11 consecutive years and approximately 75 percent of all of the aluminum
ever produced since 1888 is still in active use today. Alcoa employs
approximately 61,000 people in 30 countries across the world. For more
information, visit www.alcoa.com and follow @Alcoa on Twitter at
twitter.com/Alcoa.

Forward-Looking Statements

This release contains statements that relate to future events and expectations
and as such constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
include those containing such words as “expects,” “intends,” “plans,”
“scheduled,” “should,” “will,” or other words of similar meaning. All
statements that reflect Alcoa’s expectations, assumptions or projections about
the future other than statements of historical fact are forward-looking
statements. Forward-looking statements are subject to a number of known and
unknown risks, uncertainties, and other factors and are not guarantees of
future performance. Important factors that could cause actual results to
differ materially from those expressed or implied in the forward-looking
statements include: (a)material adverse changes in aluminum industry
conditions, including global supply and demand conditions and fluctuations in
London Metal Exchange-based prices for primary aluminum, alumina, and other
products; (b)deterioration in global economic and financial market conditions
generally, or unfavorable changes in the markets served by Alcoa; (c)Alcoa’s
inability to achieve the level of revenue growth, cash generation, cost
savings, improvement in profitability and margins, fiscal discipline, or
strengthening of competitiveness and operations (including moving its refining
and smelting businesses down on the industry cost curves and increasing
revenues in its Global Rolled Products and Engineered Products and Solutions
segments), anticipated from its portfolio streamlining and modernization
programs, productivity improvement, cash sustainability, technology and other
initiatives; (d) Alcoa’s inability to achieve the level of reduction in
greenhouse gas emissions anticipated from its closure of the Baie Comeau
Soderberg potlines; (e) the outcome of contingencies, including legal
proceedings, government investigations, and environmental remediation; (f)
failure to maintain investment grade credit ratings which could limit Alcoa’s
ability to obtain future financing, increase its borrowing costs, adversely
affect the market price of its existing securities, or otherwise impair its
business, financial condition and results of operations; (g) Alcoa’s inability
to realize expected benefits, in each case as planned and by targeted
completion dates, from expanded, acquired or modernized facilities, such as
the Baie Comeau smelter; and (h)the other risk factors summarized in Alcoa’s
Form 10-K for the year ended December31, 2012 and other reports filed with
the Securities and Exchange Commission. Alcoa disclaims any obligation to
update publicly any forward-looking statements, whether in response to new
information, future events or otherwise, except as required by applicable law.

Contact:

Alcoa
Investor Contact
Kelly Pasterick, 212-836-2674
Kelly.Pasterick@alcoa.com
or
Media Contact
Monica Orbe, 212-836-2632
Monica.Orbe@alcoa.com
 
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