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March 8, 2006
Alcoa Increases Stake in Estreito Hydropower Project in Brazil
NEW YORK & SAO LUIS, Brazil--(BUSINESS WIRE)--March 8, 2006--Alcoa (NYSE:AA) announced today that Alcoa Aluminio, its Brazilian affiliate, increased its stake in the Estreito hydropower project in Northern Brazil from 19.08% to 25.49% by purchasing a 6.40% share from BHP Billiton, who is exiting the project. Terms of the deal were not disclosed.
Other partners in Estreito are Suez Energy South America, CVRD and Camargo Correa Energia SA. Alcoa exerted its preemptive rights in accordance with the shareholding agreement between the consortium for the construction of the Estreito hydroelectric power plant as did Suez Energy South America, who bought the remaining 10.07% Billiton share.
The 6.40% share entitles Alcoa Aluminio to an additional 38 megawatts of hydropower, bringing a total of 149 megawatts of assured power to supply Alcoa Aluminio's Alumar aluminum smelter in Sao Luis, Brazil. Construction of the 1,087-megawatt Estreito hydropower facility is expected to begin in June 2006, following necessary government regulatory and environmental approvals. Startup of the power plant is set for 2011.
"This action continues our global energy strategy to secure low-cost, reliable energy supply and also increase power self-sufficiency for sustainable primary growth in Brazil," said Frank Feder, Vice President Alcoa and President, Alcoa Latin America.
Estreito is Alcoa Aluminio's third power generating project in Brazil, preceded by Machadinho (capacity of 1,140 MW), which has been running since 2002, and Barra Grande (708 MW capacity), which began operating in late 2005.
Alcoa Aluminio, headquartered in Sao Paulo, Brazil, produces primary aluminum, fabricated aluminum and packaging products for a variety of internal and external customers worldwide.
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 129,000 employees in 42 countries and has been named one of the top three most sustainable corporations in the world at the World Economic Forum in Davos, Switzerland. More information can be found at www.alcoa.com.