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| January 10, 2003
Alcoa Approves Building New 320,000 mtpy 'Fjaroaal' Aluminum Smelter in Eastern Iceland
PITTSBURGH--(BUSINESS WIRE)--Jan. 10, 2003--
Project is Key Element in Alcoa's Primary Metals Strategy;
Fjaroaal Plant will Strengthen Economy in East Iceland
Alcoa (NYSE:AA) today announced that its Board of Directors has
approved plans for the construction of a 322,000-metric ton Fjaroaal
aluminum facility in Eastern Iceland. Alcoa's Fjaroaal aluminum
facility is part of the most extensive single investment in the
history of Iceland, and is scheduled to begin production in 2007. The
facility is being designed to be the most environmentally friendly
aluminum production facility in the world. The cost of the Fjaroaal
aluminum facility will be approximately $1.1 billion over the next
four years.
Alcoa's Fjaroaal aluminum operations -- Fjaroaal means "Aluminum
of the Fjords" in Icelandic and derives from the local municipality,
Fjaroabyggo, or "Municipality of the Fjords" -- will provide
approximately 450 jobs and generate approximately 300 additional
full-time equivalent positions in service-related industries, for a
total of 750 new jobs. Construction of the aluminum plant in East
Iceland is part of an overall economic plan by the government of
Iceland to improve living standards from health care to infrastructure
to communications -- not just for the region, but also for all of
Iceland. Those new jobs will help strengthen and diversify the economy
of East Iceland, which has seen declining employment and out-migration
as traditional jobs in fisheries and farming have declined. The
project will create hundreds of construction jobs in the region,
helping fuel economic growth. Smelter construction is scheduled to
begin in early 2005.
"The Fjaroaal plant is an important element of Alcoa's growth
strategy in primary metals," said Alain Belda, Alcoa Chairman and CEO.
"Across our entire primary metals portfolio, we are taking action to
move our production assets down the cost curve while maintaining
return on capital targets. As we explore new projects around the
world, we will continue to reassess our existing smelting portfolio,
particularly in the United States, where escalating energy and labor
costs have made many smelters less globally competitive.
"There are unique environmental challenges presented by Iceland's
nature, and we promise to exercise best discretion in our interaction
with it," said Belda. "We expect that our unrivalled experience along
with new technologies that we have developed will be well utilized to
ensure that the project has minimal impact on the environment and the
eco-systems supporting it. We look forward to working with the people
of Iceland and their elected representatives to secure governmental
approvals for this project. We are also pleased that Landsvirkjun has
decided to move forward with their power project."
The new Alcoa Fjaroaal aluminum plant is estimated to have less
significant environmental impacts than a design previously proposed
for the same location:
- Annual production level of the Alcoa Fjaroaal plant will be
approximately 25% below that planned under the previous
proposal.
- Alcoa will not have on-site disposal of spent pot lining
(SPL), a by-product of the aluminum production process.
- Alcoa is investigating designs to meet its goal for zero
process water discharge.
- Finally, carbon anodes, required continuously by the plant,
will not be manufactured in Iceland, thereby eliminating a
major source of sulfur dioxide (SO2), nitrogen oxide (NOX) and
hydrocarbon (PAH) emissions from the site.
The project will comply with all air and water quality standards
of Iceland and the European Union directives scheduled to take effect
in 2005 and 2010. In some areas, designed performance of the Alcoa
plant goes beyond compliance. Carbon dioxide (CO2) emissions will be
25% below the earlier plan, and PFC emissions (another greenhouse gas)
will be 40% less. Emissions of nitrogen oxide (NOX) will also be 80%
less. Alcoa is committed to working closely with East Iceland
communities to minimize disturbance during the construction and
operating phases.
Alcoa is the world's leading producer of primary aluminum,
fabricated aluminum and alumina, 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 as a single solution to customers.
In addition to aluminum products and components, Alcoa also markets
consumer brands including Reynolds Wrap(R) aluminum foil, Alcoa(R)
wheels, and Baco(R) household wraps. Among its other businesses are
vinyl siding, closures, precision castings, and electrical
distribution systems for cars and trucks. The company has 127,000
employees in 38 countries. For more information go to www.alcoa.com
Note to Editors: Some Icelandic characters have been changed to
English characters for transmission purposes only.
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