Alcoa Reaches Power Agreement to Improve Competitiveness of Québec Smelters, Secure 3,000 Jobs

  Alcoa Reaches Power Agreement to Improve Competitiveness of Québec Smelters,
  Secure 3,000 Jobs

 Alcoa to Optimize Baie-Comeau Casthouse to Support North American Auto Sheet
  Growth; Partner with Government on Sustainable Transportation Initiatives

Business Wire

NEW YORK & MONTRÉAL -- February 25, 2014

Alcoa (NYSE:AA) and the Government of Québec have reached an agreement to
improve the competitiveness of Alcoa’s three smelters in Québec, securing
approximately 3,000 jobs. Under the agreement, Hydro-Québec will renew Alcoa’s
power supply contracts for the Becancour and Deschambault facilities until
2030 and for the Baie-Comeau plant through 2036.

The agreement enables Alcoa to proceed with $250million of planned
investments at the smelters over the next five years to further improve their
competitiveness. As part of that investment, Alcoa will increase production of
aluminum used for auto manufacturing and reduce production of commodity-grade
aluminum at the Baie-Comeau casthouse to capture demand from automakers as
they turn to aluminum for more fuel-efficient vehicles. According to
automakers, aluminum body sheet content in North American vehicles is expected
to quadruple by 2015 and increase tenfold by 2025, from 2012 levels.

“These actions support our strategy to lower the cost base of our upstream
businesses while capturing demand for higher-margin, value-add products,” said
Bob Wilt, president of Alcoa Global Primary Products. “The agreement will help
Alcoa achieve its goal of moving down the global aluminum cost curve, and the
casthouse optimization will help meet growing demand for aluminum in the North
American auto market.”

In addition to the planned investments, Alcoa has agreed to support the
government’s electric transportationstrategy by considering the Baie-Comeau
facility as a potential source of aluminum for emerging technology
applications, including aluminum-air batteries. Alcoa recently entered into a
joint development agreement with clean technology company, Phinergy, to
further develop its battery, which can be used in electric vehicles and runs
on air and aluminum. Alcoa will also provide financial support and lend
technical expertise to government-led programs focused on lightweighting
vehicles with aluminum.

The previously planned modernization of the Baie-Comeau facility, through
which Alcoa would have constructed a new potline to replace the two Söderberg
potlines it closed last year, is not included in this agreement and will no
longer be pursued.

“This agreement marks a new start for our Québec smelters and we applaud the
Premier and her team for their vision and commitment to Alcoa, our employees
and community stakeholders,” said Martin Brière, President of Alcoa Canada
Global Primary Products. “Alcoa’s facilities in Québec can now concentrate on
meeting growing global demand for aluminum and continuing to provide important
economic benefits to the region.”

About Alcoa in Canada

In Québec, Alcoa Canada Global Primary Products (GPP Canada) is composed of
the Bécancour (ABI), Baie-Comeau and Deschambault smelters, as well as the
Bécancour Rod Plant. These four plants have an annual production capacity of
almost one million metric tons of ingots, castings, billets and aluminum rods.
Alcoa has approximately 3,000 employees in Québec and its activities generate
more than $1.5 billion in economic impact annually in the province. More
information is available at www.alcoa.com/canada.

About Alcoa

A global leader in lightweight metals engineering and manufacturing, Alcoa
innovates multi-material solutions that advance our world. Our technologies
enhance transportation, from automotive and commercial transport to air and
space travel, and improve industrial and consumer electronics products. We
enable smart buildings, sustainable food and beverage packaging,
high-performance defense vehicles across air, land and sea, deeper oil and gas
drilling and more efficient power generation. We pioneered the aluminum
industry over 125 years ago, and today, our 60,000 people in 30 countries
deliver value-add products made oftitanium, nickel and aluminum, and produce
best-in-class bauxite, alumina and primary aluminum products. For more
information, visit www.alcoa.com, follow @Alcoa on Twitter at
www.twitter.com/Alcoa and follow us on Facebook at www.facebook.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 “anticipate,” “estimate,” “expect,”
“goal,” “plan,” “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,
including, without limitation, forecasts concerning demand growth for aluminum
or other trend projections, targeted financial results or operating
performance, and statements about Alcoa’s strategies, outlook, and business
and financial prospects. 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 and premiums, as
applicable, for primary aluminum, alumina, and other products, and
fluctuations in indexed-based and spot prices for alumina; (b) deterioration
in global economic and financial market conditions generally; (c) unfavorable
changes in the markets served by Alcoa; (d) Alcoa’s inability to successfully
realize the goals established in each of its four business segments, at the
levels or by the dates targeted for such goals (including moving its alumina
refining and aluminum smelting businesses down on the industry cost curves and
increasing revenues and improving margins in its Global Rolled Products and
Engineered Products and Solutions segments); (e) Alcoa’s inability to
successfully capture demand for higher-margin, value-add products, whether due
to market conditions, changes in regulatory requirements, a failure to
successfully implement technologies, or other factors; and (f) the other risk
factors discussed in Part I, Item 1A of Alcoa’s Form 10-K for the year ended
December 31, 2013, as well as other reports filed with the Securities and
Exchange Commission. Alcoa disclaims any intention or 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, + 1 212-836-2674
Kelly.Pasterick@alcoa.com
or
Media Contact:
Christa Bowers, + 1 212-836-2605
Christa.Bowers@alcoa.com
or
Alcoa Canada
Lysane Martel, +1 514-906-2537
Lysane.Martel@alcoa.com
 
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