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July 9, 1999

Alcoa Adopts Brazilian Real as Functional Currency for Alcoa Aluminio

PITTSBURGH--July 9, 1999-- Alcoa announced that, effective July 1, 1999, the company has adopted the Brazilian Real as the functional currency for translating the financial statements of Alcoa Aluminio, a 59% owned subsidiary. Functional currency is the currency of the principal economic environment in which a company operates and maintains its records.

In announcing the change, Richard B. Kelson, Alcoa executive vice president and chief financial officer, said, "This change is required under the guidelines in Financial Accounting Standard No. 52 regarding Foreign Currency Translation as a consequence of changes in the economic fundamentals prevalent in Brazil as well as an increase in the percentage of Aluminio's costs and product sales that are Real-based."

Mr. Kelson added, "Alcoa evaluates each of its investments based on their performance. Changing Aluminio's functional currency will allow us to better manage and analyze its business based on the macro-economic fundamentals in Aluminio's operating environment."

The change in Aluminio's functional currency is not expected to have a material impact on Alcoa's future earnings. Adopting the Real reduces Alcoa's consolidated shareholders' equity by $156 million, and minority interests by $108 million on the company's balance sheet. A reduction in the value of Aluminio's fixed assets offsets the majority of these reductions.

Alcoa Aluminio, headquartered in São Paulo, Brazil, produces primary aluminum, fabricated aluminum and packaging products for a variety of internal and external customers worldwide.

Founded in 1888, Alcoa is the world's leading producer of aluminum and alumina and a major participant in all segments of the industry: mining, refining, smelting, fabricating and recycling. The company has 215 operating locations in 31 countries.

Editor's Note: The statements in this press release that are not historical facts are forward-looking statements that involve risks and uncertainties. Among other factors that could cause actual results to differ materially from the forward-looking statements are: (1) changes in Brazil's economic policies and political environment; (2) a general decline in Brazil's economy and the economies of countries that have an impact on the international price of aluminum; (3) other changes in the aluminum industry or in the demand for aluminum products; and (4) other risks and uncertainties, including those detailed from time to time in Alcoa's latest quarterly and annual reports filed with the Securities and Exchange Commission.