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May 24, 2004

Alcoa, Government of Trinidad and Tobago Sign MOU To Build New Smelter

PITTSBURGH--(BUSINESS WIRE)--May 24, 2004--Alcoa today announced that it has signed a memorandum of understanding (MOU) under which Alcoa and the Government of the Republic of Trinidad and Tobago will build a state-of-the-art, low emission, environmentally friendly aluminum smelter with a capacity of at least 250,000 metric tons per year (mtpy) in Trinidad.

The new smelter and related facilities, including a power plant, a new anode plant and downstream, fabricated opportunities, is projected to cost in excess of $1 billion US Dollars. The exact size and cost for the overall venture will be determined when the project plan is finalized. The new smelter will utilize power produced by Trinidad and Tobago's vast natural gas fields, which will then be converted into low-cost electricity for the smelter and the national grid, serving the growth in demand of residential, commercial and industrial consumers.

The MOU calls for Alcoa to take at least a 60% ownership stake in the smelter, with a Government state enterprise having responsibility for the remainder. Alcoa will take a lead role in the management and operation of the smelter and will have a right to 60% of the metal produced, with the Government agency having a right to the remaining 40%, but with the commitment to make this metal available to downstream investors, including Alcoa, Sural of Venezuela and the Trinidad and Tobago manufacturing sector.

The MOU also calls for immediate joint activity between Alcoa's personnel and the Government of Trinidad and Tobago. The parties will now work on the various aspects to finalize the project plan, complete a definitive agreement and make a final investment decision by early 2005, at which time a schedule for production start would be announced. Alcoa and the government will each fund its proportional share of the investment.

It is expected that upon completion, the smelter would permanently employ approximately 575 people directly, with indirect employment of at least three times that number. Employment during the two-year construction period for the smelter is expected to average approximately 1,000 additional jobs.

In making the announcement, Alcoa Chairman and CEO, Alain Belda, said the new Trinidad and Tobago smelter underlines Alcoa's belief in the future of the Caribbean region as a major supplier of global alumina and aluminum markets. "We have in Trinidad and Tobago a reliable and stable partner, a competitive and efficient energy source that will contribute to our commitment to reduce our global greenhouse gas emissions, access to skilled labor, and proximity to alumina supplies and markets," said Belda. "Alcoa will bring our Values, modern smelting technology, and benchmark operating practices to ensure that Trinidad and Tobago has the opportunity to develop a highly competitive and environmentally-friendly facility".

The Trinidad and Tobago smelter would be Alcoa's third major primary products facility in the Caribbean basin and the company's second Greenfield smelter in 20 years, the other being in Iceland, which is scheduled to begin construction in 2005. The company currently operates through Alcoa World Alumina and Chemicals -- a global alliance between Alcoa and Alumina Ltd., with Alcoa holding 60 percent -- Jamalco, a 1,250,000 mtpy alumina refinery in Clarendon, Jamaica, and has bauxite mining, alumina refining and hydropower facilities in Suriname. Four tons of bauxite can traditionally be refined into two tons of alumina, which can then be smelted to produce one ton of aluminum.

Alcoa has had operations in Trinidad and Tobago for more than 60 years and its Tembladora Transfer Station loads approximately 525,000 metric tons of alumina from Suriname for shipment throughout the world each year.

Located in the Atlantic Ocean off the coast of Venezuela, Trinidad and Tobago has the most diversified and industrialized economy in the English-speaking Caribbean. The country's economy is fueled by its large reserves of petroleum and natural gas - much of which is exported to the United States - and well-developed heavy industries, such as iron and steel, methanol and nitrogenous fertilizers and petroleum products, including LNG.

Alcoa is the world's leading producer of primary aluminum and alumina, and is active in all major aspects of the industry. Alcoa serves the aerospace, automotive, packaging, building and construction, commercial transportation and industrial markets, bringing design, engineering, production and other capabilities of Alcoa's businesses to customers. In addition to aluminum products and components, Alcoa also markets consumer brands including Reynolds Wrap(R) foils and plastic wraps, Alcoa(R) wheels, and Baco(R) household wraps. Among its other businesses are vinyl siding, closures, fastening systems, precision castings, and electrical distribution systems for cars and trucks. The company has 120,000 employees in 41 countries and has been a member of the Dow Jones Industrial Average for 45 years and the Dow Jones Sustainability Indexes since 2001. More information can be found at www.alcoa.com.