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May 18, 2005

Alcoa to Invest $45 Million to Supply Coal to Power Warrick, IN Smelter

PITTSBURGH--(BUSINESS WIRE)--May 18, 2005--Alcoa (NYSE:AA) announced today that it will invest $45 million to purchase equipment and the rights to mine coal from Vigo Coal Company to power its aluminum smelter in Warrick, Ind. The investment also calls for the addition of a coal preparation facility and material handling infrastructure to enable transport of coal via railcar to the smelter's power plant. The coal is expected to be available for use by Alcoa Warrick Operations by July 2006.

Under the terms of the agreement, Alcoa will purchase the rights to mine 2,500 acres in the reserve at the Friendsville Mine near Mount Carmel, Ill., for 10 years, with the opportunity to expand from there. The mine will be capable of producing approximately 1 million tons of coal a year, approximately 45 percent of the power plant's fuel requirement. Vigo Coal will provide mining services to Alcoa. The mine will contribute approximately $20 million annually to the local Illinois economy.

Alcoa Warrick Operations is an integrated facility housing a 309,000 metric ton per year (mtpy) primary aluminum smelter and rigid packaging operations that produce aluminum sheet for beverage and food can ends, tabs, and other flat-rolled aluminum products. It employs approximately 2,150 people and contributes $1 million a day, to the local Indiana economy.

About Alcoa

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 131,000 employees in 43 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