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March 16, 1998

Alcoa-Alcan Consortium Withdraws Bid for Venezuelan Aluminum Sector

PITTSBURGH--March 16, 1998-- March 16, 1998

Mr. Alberto Poletto

Mr. Elias Ynaty

Alcoa and Alcan today advised the Venezuelan government that they are not going to bid for the Venezuelan aluminum industry assets. Below is the text of the letter:

Re: Aluminum Sector Privatization

Dear Gentlemen:

This is to inform you that the Alcoa-Alcan consortium will decline to submit a bid for the privatization of the Venezuelan aluminum industry.

The minimum bid price published on Friday, March 13, 1998, coupled with the deterioration in the Companies' performance over the last 12 months, increased energy prices and operating costs, make this opportunity incompatible with our shareholders' objectives of pursuing investments that return the cost of capital. In addition, the acquisition agreements fail to provide the legal certainty to be expected in a commercial transaction.

We regret having reached this conclusion, as we believe we could have offered the government and people of Venezuela a relationship with global aluminum industry leaders with a proven record of technology, management and social responsibility. Both Alcoa and Alcan are convinced that, under our leadership, the Venezuelan aluminum industry could grow and prosper for the benefit of the country and people of Guayana.

If, for any reason, the terms and conditions for the privatization change, we stand ready to continue our discussions with you on acquiring and operating these important assets.


Aluminum Company of America
Alcan Aluminium Limited