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alcoa inc celebrates 50 years on the dow at ringing of new york stock exchange opening bell
Alcoa Inc Chairman, Alain Belda, and CEO, Klaus Kleinfeld, rang the opening bell of the New York Stock Exchange (NYSE) last month, commemorating Alcoa’s 50 years as a component of the Dow Jones Industrial Average (DJIA). The event formed part of our year-long celebration of the 120th anniversary of Alcoa’s founding.
 
Of The Dow’s current components, just eight have been included longer than Alcoa.

Alcoa has been a member of The Dow longer than three-fourths of the nearly 100 companies included in the index since its creation in 1896.
The DJIA is the best-known market indicator in the world. Alcoa joined The Dow on June 1, 1959, as the Aluminium Company of America – demonstrating the importance of aluminium to the post-war industrial era and Alcoa as a leading-edge market indicator based on our wide variety of customers.

“In the 50 years that Alcoa has been a Dow company, we’ve grown from 17 US locations to a global company with operations in 31 countries,” said President and CEO Klaus Kleinfeld, before ringing the bell that signals the start of the day’s trading activity.

“Since aluminium – today’s “miracle metal” -- is widely used in virtually every industry, Alcoa has become an important contributor to The Dow Index’s role as a barometer of the US economy.”

alcoa & the carbon pollution reduction scheme
With the Federal Government’s Carbon Pollution Reduction Scheme (CPRS) having been defeated in the Senate this month, Alcoa believes the Government and the Opposition now need to sit down at the negotiating table to strike the right balance in this very important piece of legislation.

Alcoa’s position on emissions trading has remained consistent throughout this debate. Our position is clear: we support a CPRS that delivers reductions in greenhouse emissions without compromising the international competitiveness of Australian industry and jobs.  Striking this balance is critical, and if the Government doesn’t get it right then there will be significant implications for our industry. But we believe a scheme that addresses the greenhouse challenge, while protecting Australian industry and jobs is achievable. 

“Australia can provide leadership on climate change while protecting jobs, vital industries and the communities that rely on their presence,” said Tim McAuliffe, Alcoa’s General Manager of Carbon Strategy.
 
“Emissions trading is a key plank in responding to the challenge of climate change, but the CPRS in its current form represents a significant risk to aluminium industry jobs while overseas competitors do not face comparable carbon costs.
 
“In its current form, industries such as alumina and aluminium would be at a substantial international competitiveness disadvantage and businesses may simply be driven offshore to countries with no emissions trading.
 
“If that happens, the emissions won’t vanish, they’ll just move to another part of the world and ultimately the only thing that would achieve is job losses in Australia.

Striking the right balance includes:

  • All emissions intensive trade exposed (EITE) components of our business (alumina refineries, aluminium smelters & the Alcoa ARP rolling business) receiving at least 90% carbon permit assistance; 
  • No erosion of that assistance until our competitors overseas adopt a comparable carbon price and there’s a level emissions trading playing field globally; and
  • Ensuring industries, particularly in Victoria, are not penalised via the Electricity Allocation Factor (this covers our indirect emissions) because of the limited energy supply options currently available in some States.  The Electricity Allocation Factor should not prejudice our Victorian aluminium smelters.
“Our industry is not after a free ride – with 90% initial permit allocation, it will still cost Alcoa around $50M per annum by year two of the scheme,” Tim said.

Alcoa has also been active in calling for changes to the Renewable Energy Target (RET) legislation. Like the CPRS, the RET will impose significant additional costs to Australian electricity intensive industries, without comparative costs on key competitors - again establishing an international competitiveness distortion.

Because aluminium smelting is the most electricity intensive industry in Australia, it is more exposed to RET costs than any other industry. At the moment the Government is proposing to provide a partial exemption from the RET for smelting, but no exemption from the existing Mandatory Renewable Energy Target (MRET). The MRET will continue to operate alongside the new RET, once legislation is passed. We estimate this would add around $18M in costs to our Victorian smelters by 2016. Because of smelting’s unique exposure, Australian aluminium companies are calling for a 90% exemption from both the existing MRET and the new RET. Again, even with a  90% exemption, it would still add several million dollars to our smelting costs each year.

To learn more about how the Carbon Pollution Reduction Scheme could impact Alcoa, visit: www.alcoa.com.au/climatechange.


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Alcoa Inc Chairman, Alain Belda, and CEO, Klaus Kleinfeld, rang the opening bell of the New York Stock Exchange last month



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Alcoa's General Manager of Carbon Strategy Tim McAuliffe