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September 15, 2003
Alcoa To Acquire Stake In Aluminium Bahrain Smelter; Will Provide Long-Term Alumina Supply
PITTSBURGH & BAHRAIN--(BUSINESS WIRE)--Sept. 15, 2003--The
government of the Kingdom of Bahrain and Alcoa (AA), the world's
leading producer of primary aluminium, today signed a memorandum of
understanding (MOU). The MOU paves the way for Alcoa to acquire up to
a 26 percent equity stake in Alba, a Bahrain company that owns and
operates a 512,000 metric tons per year (mtpy) aluminium smelter, and
covers a long-term alumina supply arrangement for the Alba smelter.
"This MOU provides growth opportunities both for Alcoa and Alba
and ensures the continuous supply of high quality alumina, the main
raw material used in the production of aluminium," said the Bahrain
Minister of Oil and Chairman of the Alba board of directors, His
Excellency Shaikh Isa bin Ali Al Khalifa. "Bahrain's relationship with
Alcoa goes back to the very beginning of Alba and we are pleased to
further reinforce this strategic relationship.
"The Government of Bahrain's plans and objectives include
attracting inward investment to the Kingdom -- and we believe that
having Alcoa as a business partner is a significant step in this
direction," he said.
"We are delighted to strengthen our partnership with Alba and
Bahrain," said John Pizzey, Executive Vice President of Alcoa and
President of Alcoa Primary Products. "Alba is a world-class facility,
and our participation there will help drive our strategies of lowering
our position on the cost curve and expanding our global presence in
the alumina and aluminium markets."
The four-potline Alba smelter is one of the world's lowest cost
facilities, serving markets in the Mid-East and Asia. Alba is
currently adding a fifth line which, when completed in 2005, will
bring its overall capacity to 819,000 mtpy and make it the largest
aluminium smelter in the world outside Eastern Europe. The MOU is
designed to accelerate plans for an additional expansion, a sixth line
with 307,000 mtpy of additional capacity.
Alba also owns and operates a dedicated carbon department, a
marine terminal, a 1,500 MW power plant, a 450,000 tonnes per annum
coke calcining plant and a desalination plant to support the smelter.
The entire plant operates to the Environmental Management System
standard ISO14001 and the Casthouses are also operating to the ISO
9001:2000 Quality Management System.
The company was officially established in 1971 and its
shareholders today are the Government of Bahrain (77%), SABIC
Industrial Investments (20%) and Breton Investments (3%).
Alcoa World Alumina and Chemicals ("AWAC"), a worldwide alliance
between Alcoa Inc. and Alumina Ltd., is currently the primary supplier
of alumina to Alba. AWAC has been one of Alba's major alumina
suppliers since the smelter was commissioned in 1971.
Under the MOU, alumina for the expanded Alba smelter -- which will
require as much as 2.2 million mtpy upon completion of the sixth line
-- will continue to be sourced from AWAC refineries.
Final agreements on the equity stake in the smelter and the
alumina supply arrangements are expected to be concluded by mid-2004.
The agreements will become effective upon completion of the fifth
pot-line in March of 2005. Alcoa and Alumina Ltd. are conducting
separate discussions on AWAC's possible participation in the Alba
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 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, precision castings, and electrical distribution
systems for cars and trucks. The company has 127,000 employees in 40
countries. More information can be found at www.alcoa.com.