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September 14, 2006

Australian Government Gives Environmental Approval to Alcoa's Wagerup Alumina Refinery Expansion Project; Wagerup is the Most Environmentally Advanced Alumina Refinery in the World

NEW YORK--(BUSINESS WIRE)--Sept. 14, 2006--Alcoa announced today that it has received formal environmental approval by the Western Australia government to proceed with the expansion of its Wagerup alumina refinery south of Perth, Australia.



The Wagerup expansion plan involves building a third production unit at the refinery and upgrading the existing plant to improve efficiency and environmental outcomes. It would increase alumina production capacity from 2.6 million tons a year to 4.7 mtpy.

"The Wagerup refinery already meets the most stringent health and environmental standards in the world and the extremely rigorous conditions placed on the project by the EPA provides confidence the expansion was safe and responsible," said Alcoa of Australia Managing Director Wayne Osborn.

Since 1998, Alcoa has spent over A$40 million on new technologies and other improvements at the refinery to reduce emissions. These have made Wagerup the most environmentally advanced alumina refinery in the world.

In addition, Alcoa will continue scientific data collection through construction of additional meteorological and air monitoring facilities at the refinery - at a cost of approximately A$1.5 million. Alcoa has already begun a 12-18 month program of additional data collection to satisfy conditions associated with the Ministerial approval, as recommended by the EPA.

"Alcoa has committed to implementing the expansion with no increase in environmental impacts and extensive scientific investigations have shown both the existing and expanded refinery is safe for our employees and neighboring communities," Mr. Osborn said.

Social and Economic Benefits

The planned expansion of Alcoa's Wagerup alumina refinery will provide major social and economic benefits for Western Australia. The expansion is expected to create over 1,500 construction jobs as well as 3,000 direct and indirect jobs, including 260 new permanent Alcoa jobs.

Regional businesses and communities would also reap the benefits of significantly increased local spending. The Wagerup refinery already spends over A$40 million a year with businesses in the local area and this is expected to rise.

The expansion would also provide over A$11 million a year in extra State Government revenue and around A$17 billion additional export revenue over the project life.

"Funding for a 20-year Sustainability Fund to support local infrastructure and projects in the Harvey and Waroona Shires would also increase as the funding was linked to production levels to ensure the community shared the benefits of regional growth. Alcoa's A$400,000 a year contribution would almost double under the expansion," Mr. Osborn said. "As well, A$3 million had been committed by Alcoa to establish a local Enterprise and Learning Centre to provide youth training, skills development and adult education."

Separate to this environmental approval, Alcoa has agreed to a Government request to fund a supplementary property purchase plan in the vicinity of the refinery.

While there is no environmental or health reasons for residents to leave the area, this scheme will provide an opportunity for people in the localities of Hamel, Wagerup, Yarloop and Cookernup to sell their property to Alcoa should they wish to do so. This is in addition to the on going Alcoa Land Management Strategy.

Alcoa will now begin detailed engineering and design work for the Wagerup expansion to comply with the conditions to move the project into the final phase of evaluation.

Alcoa is Australia's leading aluminium producer and operates the world's largest integrated bauxite mining, alumina refining and aluminium smelting system. Alcoa produces 8 million tonnes of alumina a year - 13 per cent of world demand - from its three refineries in Australia at Pinjarra, Kwinana and Wagerup. Employing 6500 people, Alcoa has operations in WA, Victoria and NSW and makes a major contribution to the national economy through export earnings.

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 closures, fastening systems, precision castings, and electrical distribution systems for cars and trucks. The company has 129,000 employees in 44 countries and has been named one of the top most sustainable corporations in the world at the World Economic Forum in Davos, Switzerland. More information can be found at www.alcoa.com