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July 20, 2004
Alcoa to Expand Sao Luis, Brazil - Alumar - Aluminum Smelter by 63,000 Metric Tons
NEW YORK--(BUSINESS WIRE)--July 20, 2004--Alcoa (NYSE:AA) today announced that its Brazilian 100 percent equity owned subsidiary, Alcoa Aluminio S.A., will begin expanding capacity at its Sao Luis (Alumar) aluminum smelter immediately.
Aluminio will expand its share of the smelting operations in Sao Luis by 30 percent, or 63,000 metric tons per year (mtpy), with an investment of US$ 130 million, bringing Alcoa Aluminio's share of smelting capacity there to 262,000 metric tons per year (mtpy). When complete, Alcoa's share of output from the overall smelter will grow from 54 to 60 percent. Construction of the expansion will begin immediately, with production expected to begin in the third quarter of 2005.
The Alumar facility is a non-incorporated joint venture, with BHP Billiton. Upon completion of this expansion, total smelting capacity at the Alumar consortium will increase from 370,000 mtpy to 433,000 mtpy.
The Alumar smelting expansion was enabled through Aluminio's previously announced (see press release dated June 18, 2004 on www.businesswire.com or www.alcoa.com) completion of a 20-year agreement with Eletronorte, a Brazilian regional energy producer and seller, to buy up to 500 megawatts of hydro-powered electricity annually. The expansion will be implemented consistent with Alcoa's principles and philosophies regarding sustainable development.
In addition to this smelting expansion, Alcoa and the other joint venture owners of the Alumar refinery are actively exploring the opportunity for immediate brownfield expansion of the alumina refinery by 2 million mtpy on the same site The Alumar refinery is jointly owned by BHP Billiton (36%), Alcan (10%), Alcoa Aluminio (35.1%) and Abalco S.A. (18.9%). Abalco is part of the Alcoa World Alumina and Chemicals (AWAC) enterprise, owned 60% by Alcoa and 40% by Alumina Ltd. Preliminary design studies have already been completed.
The alumina expansion calls for a retrofit of the existing unit and the addition of a second, state-of-the-art unit at the refinery. Upon completion, the facility's capacity will be 3.3 million mtpy. Assuming successful approval processes with government environmental and others agencies a decision to move forward with the proposed $680 million project is expected to be made in the second half of 2004. It is expected the project will be completed by early 2007.
Alcoa also is studying development of the Juruti bauxite reserve in Brazil. Subject to government agencies approval a decision to move forward on this bauxite reserve project, which is estimated to require investments of approximately $350 million, is also expected to be made in the second half of 2004. The project would be implemented consistent with Alcoa's sustainability principles.
Alcoa's share of the Machadinho and Barra Grande hydropower facilities will supply the full energy needs of its Pocos de Caldas smelter. The company continues to pursue competitive and environmentally sound energy projects in Brazil to increase its energy self-sufficiency and make further upstream expansion possible.
Alcoa is the world's leading producer and manager of primary aluminum, fabricated aluminum and alumina facilities, 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