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June 19, 2008

Alcoa to Temporarily Idle Half of Rockdale, TX Smelter Due to Local Power Supply Issues

PITTSBURGH--(BUSINESS WIRE)--Alcoa (NYSE: AA) today announced it will temporarily idle half the production at its Rockdale, Texas aluminum smelter effective today as a result of ongoing supply issues with Luminant’s onsite power generating unit, Sandow Unit 4, and the resulting market power prices being uneconomical.

Three of the plant’s six operating potlines will be idled beginning immediately as a result of the ongoing supply interruptions and local market energy costs increasing to as much as $2,000 – $4,000 per megawatt hour during peak hours. The idled potlines represent approximately 120,000 metric tons per year of production.

Output at the remaining three potlines is planned to continue using contracted long-term power. As a result of the temporary idling, the company will begin a process to lay-off approximately 250 people across its total workforce at the plant.

“There have been ongoing supply issues at the dedicated power generating unit adjacent to our plant, which has forced us to go into the open market to secure power,” said John Thuestad, President of Alcoa’s US Primary Metals division. “Unfortunately local energy costs have escalated significantly over the past few weeks to an unsustainable level and we have no choice but to idle production that is reliant on uncompetitive power.”

“This is in no way a reflection on our workforce who has been doing an outstanding job,” said Thuestad. “Luminant’s inability to consistently operate the Sandow Unit 4 for our Rockdale Operations over the last few months, has resulted in uncompetitive power and forced us to make this decision. We’ll look to work with Luminant to see if we can secure competitive power to ease the impact on our local community and try to get back to normal production.”

Alcoa is the world leader in the production and management of primary aluminum, fabricated aluminum and alumina combined, through its active and growing participation 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 including flat-rolled products, hard alloy extrusions, and forgings, Alcoa also markets Alcoa® wheels, fastening systems, precision and investment castings, and building systems. The Company has 97,000 employees in 34 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.

Forward-Looking Statements

Certain statements in this release relate to future events and expectations and as such constitute forward-looking statements involving known and unknown risks and uncertainties that may cause actual results of Alcoa to be different from those expressed or implied in the forward-looking statements. Alcoa disclaims any obligation to update publicly any forward-looking statements, whether in response to new information, future events or otherwise, except as required by applicable law. Important factors that could cause actual results to differ materially from those in the forward-looking statements include: (a) Alcoa's inability to mitigate impacts from significant increases in energy costs or from interruptions in energy supplies due to equipment failure, energy shortages, inability to extend energy contracts upon expiration or to negotiate new arrangements on cost-effective terms, or other causes; (b) material adverse changes in economic or aluminum industry conditions generally, including global supply and demand conditions and fluctuations in London Metal Exchange-based prices for primary aluminum and other products; (c) material adverse changes in the markets served by Alcoa, including the transportation, building and construction, distribution, packaging, industrial gas turbine and other markets; (d) Alcoa’s inability to mitigate impacts from increases in the cost of raw materials or transportation or other cost inflation, or from unfavorable currency fluctuations; and (e) the other risk factors summarized in Alcoa's Form 10-K for the year ended December 31, 2007, Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 and other reports filed with the Securities and Exchange Commission.