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September 25, 2003

Brunei Economic Development Board and Alcoa Sign MOU To Study Feasibility of a Brunei Smelter

PITTSBURGH & BRUNEI--(BUSINESS WIRE)--Sept. 25, 2003--The Brunei Economic Development Board (BEDB) and Alcoa Inc. today announced they have signed a Memorandum of Understanding (MOU) to undertake a feasibility study on the establishment of an aluminium smelting plant and its associated infrastructure in Brunei Darussalam.

This initiative is part of BEDB's two-pronged strategy to kick start Brunei Darussalam's economic diversification and create opportunities for its people. It is an integral part of the plans to develop downstream and manufacturing industries, power supply and infrastructure in the major industrial site of Sungai Liang.

The objective of the MOU is to commit the BEDB and Alcoa to a feasibility study that will enable both parties to arrive at a mutually acceptable determination of the overall concept of the aluminium smelting plant. The MOU also details conditions necessary before a Final Investment Decision can be made. An assessment of the environmental impact of the establishment of the aluminium smelting plant will form an integral part of the study. Alcoa will carry out the study in 2 phases over a period of 24 months, beginning in the fourth quarter of 2003. The BEDB's role under this MOU will be to provide support and assistance to Alcoa in undertaking this study.

Commenting on this MOU, Dato Haji Yusof Haji Hamid, Chairman of the BEDB said, "We are very pleased to welcome a company of Alcoa's global standing to Brunei Darussalam. Alcoa's interest to establish an aluminium smelting plant is a natural fit in BEDB's strategy to diversify Brunei Darussalam's economy. This project has the potential to bring in foreign direct investment and create some 1000 direct jobs. Local SME will also be able to take advantage of the many spin offs created."

Alcoa is the world's leading producer of primary aluminium, fabricated aluminium and alumina recording USD 20.3 billion in revenue in 2002. It operates in more than 350 locations in 40 countries and is active in all major aspects of the aluminium industry - technology, mining, refining, smelting, power generation, fabricating and recycling. Alcoa is interested in exploring the possible expansion of its primary aluminium production capacity and believes that the Brunei Darussalam project will fit in with its long-term business objectives.

"Alcoa is always exploring ways we can both build our business and lower our position on the global cost curve in terms of primary aluminium production. This feasibility study is a natural extension of that work," said Mike Baltzell, President of Alcoa Primary Development Group. "We are very careful with our Company's capital resources. Feasibility studies, such as this one, help us better understand the requirements - from a financial, social and environmental standpoint -- and the possible returns we might expect from an investment. The Brunei Economic Development Board has been extremely cooperative and strategic in the process and we look forward to continuing our work together on this study," said Baltzell.

"Our ongoing efforts to attract major players to invest in long term sustainable projects within Brunei Darussalam are evidently producing results," said John Perry, Chief Executive Officer of the BEDB, "It is now essential that we capture that interest by focussing on the implementation of our strategy."

Forward Looking Statement

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, performance or achievements of Alcoa to be different from those expressed or implied in the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include the company's inability to complete feasibility studies, unexpected changes in global economic, business, competitive, market and regulatory factors, and the other risk factors summarized in Alcoa's 2002 Form 10-K Report and other SEC reports.