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Message from the Managing Director

In 2011 and 2012 Alcoa of Australia endured some of the most challenging market and macro-economic conditions of its almost 50 year history. Conditions were even worse than during the 2008 global financial crisis due to the high Australian dollar and low aluminium metal price.

Despite the tough times, our focus remained the same: maintain a safe, successful and sustainable business.

I am enormously proud of what our company achieved and I consider myself privileged to be leading and working with such professional, dedicated and hard-working people.

Pleasingly the long-term future for aluminium is bright with demand expected to grow by 6.5 per cent between 2010 and 2020. This demand is highly correlated to economic growth, particularly in emerging economies, such as Brazil, Russia, India, the Middle East and China, a number of which are key markets for our business.

Because of aluminium’s versatility, it plays an important role in the urbanisation of cities, which is expected to increase as a result of global population growth. As such we are supportive of sustainable solutions for its use. This is why in 2012, as part of the Alcoa global group of companies, we launched a new global vision: Alcoa. Advancing each generation. We wanted to highlight our commitment to innovation, sustainability and community partnership and how our business helps make the world a better place, not just today but tomorrow and for those who live after us.

In 2012 the Australian Government introduced carbon pricing regulation in Australia in an attempt to reduce greenhouse gas emissions and address climate change and its impacts.

Alcoa of Australia has consistently supported an economywide response to the challenge of climate change provided the international competitiveness of Australian industry and jobs is not compromised. So we were pleased the Federal Government saw the need to protect Australian industry by offering assistance to emissions-intensive, trade-exposed industries such as ours. We are firmly committed to reducing our carbon footprint now and in the future; in the last 20 years we have significantly reduced our direct emissions by more than 64 per cent for smelting and 23 per cent for refining.

Our operations in Western Australia face a number of resource challenges. Water supply and drought are significant issues and as such water security continues to be a challenge for our operations. Similarly, we are concerned about access to longterm competitively priced natural gas. Adequate supplies exist within the state but the majority is exported to global markets, in particular Asia. Without certainty of supply, many Western Australian businesses, including Alcoa of Australia, will find it difficult to make further long-term investments.

Our strategic focus continues to be on optimising the efficiency of our plants to maintain a strong bauxite, refining and smelting system, moving down the cost curve and securing reliable resource supplies for the sustainability of the environment, our business and future generations.

Safety is central to the way we do business and we continue to strive for the mindset and behaviours that lead us to a zero harm workplace. In the past 24 months our safety performance has improved and we will continually strive to further improve that performance.

While 2011 and 2012 were challenging years, there was cause for celebration. In 2011 Victoria’s Portland Aluminium Smelter celebrated 25 years of operation and Western Australia’s Pinjarra Refinery 40 years. Both contribute significantly to the local community and state in which they reside and their longevity is testament to the commitment of employees today and from past decades.

In 2012 we recognised our 30 year partnership with Greening Australia. We were its founding  partner and remain its most important corporate partner today. During celebrations we reflected on the wonderful achievements and memories of the last three decades which saw employees and volunteers transform landscapes and restore and replenish the environment in Western Australia, Victoria and New South Wales.

Our key stakeholders and community partners enrich our operations and help us achieve our goals; without their support we would not be operating today. We welcome all input on this report and our sustainability performance; please email your comments to alcoa.australia@alcoa.com.au.

Alan Cransberg
Chairman and Managing Director
Alcoa of Australia Limited