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Investor Contact Media Contact Nahla Azmy Sonya Elam Harden + 1
212 836 2674 + 1 864 836 2078 [email protected]
[email protected]
Alcoa Continues Reshaping Upstream Business,
443,000 Metric Tons of Suralcos Refining Capacity to be
Curtailed
Alcoa and Government of Suriname pursuing potential transfer of
Suralco to
Government and sustaining countrys bauxite industry
NEW YORK and PARANAM, Suriname, March 17, 2015 Lightweight
metals
leader Alcoa (NYSE: AA) today announced that it plans to curtail
443,000 metric tons
per year (mtpy) of alumina refining capacity at Suralco in
Suriname. In addition, the
Company and the Government of Suriname have agreed to pursue a
transaction for a
Government-owned entity to acquire the Suralco operations.
The curtailment and potential transaction are in line with
Alcoas recent announcement
to review upstream capacity for possible curtailment or
divestiture and the Companys
strategic goal to create a globally competitive commodity
business. The curtailment,
which represents one digester, is expected to be complete by
April 30, 2015.
Reducing the production of the refinery will assist in extending
the life of the
operations as we continue to work with the Government of
Suriname on the
transaction, said Bob Wilt, President Alcoa Global Primary
Products. We are
committed to working with the Government to find the best
solution for the Suralco
facility.
In October 2014, the Government and Alcoa signed a Memorandum of
Understanding
reflecting both parties intent to find a solution for the future
of Suralco, which operates
in a challenging global environment, with limited bauxite
reserves and lacks a long-term
energy solution. The resulting discussions between the parties
have led to the
Governments decision to sustain the bauxite industry in
Suriname.
mailto:[email protected]:[email protected]
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Both parties now intend to pursue a transaction where a
Government-owned entity
would acquire Suralco, including the mining, refining and
Afobaka hydroelectric
operations. Following the appropriate due diligence, the parties
are targeting to reach
agreement on the proposed transaction by July 1, 2015.
The Company will work closely with unions and employees to
reduce the impact of the
curtailment on affected employees by offering fair severance
packages. The Paranam
refinery and related mining operations employ approximately 700
people, in addition to
contracted personnel.
The net financial impact associated with the curtailment is not
expected to be material
to the Companys earnings.
Alcoas review of its refinery operations is consistent with the
Companys goal of
lowering its position on the world alumina cost curve to the
21st percentile and the
aluminum production cost curve to the 38th percentile, by
2016.
Suralcos total refining capacity is 2.2 million mtpy, with
876,000 mtpy currently idled.
Suralco is part of the Alcoa World Alumina and Chemicals group
of companies owned 60
percent by Alcoa Inc. and 40 percent by Alumina Limited.
About Alcoa
A global leader in lightweight metals technology, engineering
and manufacturing, Alcoa
innovates multi-material solutions that advance our world. Our
technologies enhance
transportation, from automotive and commercial transport to air
and space travel, and improve
industrial and consumer electronics products. We enable smart
buildings, sustainable food and
beverage packaging, high-performance defense vehicles across
air, land and sea, deeper oil and
gas drilling and more efficient power generation. We pioneered
the aluminum industry over 125
years ago, and today, our approximately 59,000 people in 30
countries deliver value-add
products made of titanium, nickel and aluminum, and produce
best-in-class bauxite, alumina
and primary aluminum products. For more information, visit
www.alcoa.com, follow @Alcoa on
Twitter at www.twitter.com/Alcoa and follow us on Facebook at
www.facebook.com/Alcoa.
Forward-Looking Statements
This release contains statements that relate to future events
and expectations and as such constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995.
Forward-looking statements include those containing such words
as estimates, expects, goal,
intends, plans, proposes, should, target, will, or other words
of similar meaning. All statements
that reflect Alcoas expectations, assumptions or projections
about the future other than statements of
historical fact are forward-looking statements, including,
without limitation, statements regarding Alcoas
goal to create a globally competitive commodity business, the
expected timing for completing the
curtailment of the Suralco refining capacity, the expected
financial impact of the curtailment, and the
expected timing for reaching an agreement on a proposed
transaction with the Government of Suriname
http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.alcoa.com&esheet=50726734&newsitemid=20131010006227&lan=en-US&anchor=www.alcoa.com&index=1&md5=7f8fa5587aedf5ddcf79d6c04afd5565http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.twitter.com%2FAlcoa&esheet=50726734&newsitemid=20131010006227&lan=en-US&anchor=www.twitter.com%2FAlcoa&index=2&md5=87dc680c5fbe9cd418f944b85a2918b9http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.facebook.com%2FAlcoa&esheet=50726734&newsitemid=20131010006227&lan=en-US&anchor=www.facebook.com%2FAlcoa&index=3&md5=3be135dacafdfd5c2e1f6fa4b03e7143
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regarding the Suralco operations. Forward-looking statements are
subject to risks, uncertainties and
other factors and are not guarantees of future performance.
Important factors that could cause actual
results to differ materially from those expressed or implied in
the forward-looking statements include: (a)
material adverse changes in aluminum industry conditions,
including global supply and demand
conditions and fluctuations in London Metal Exchange-based
prices and premiums, as applicable, for
primary aluminum, alumina, and other products, and fluctuations
in indexed-based and spot prices for
alumina; (b) Alcoas inability to successfully realize goals
established in each of its four business
segments, at the levels or by the dates targeted for such goals
(including moving its alumina refining and
aluminum smelting businesses down on the industry cost curves
and increasing revenues in its Global
Rolled Products and Engineered Products and Solutions segments);
(c) political, economic, and regulatory
risks in the countries in which Alcoa operates, including
unfavorable changes in laws and governmental
policies, tax rates, civil unrest, or other events beyond Alcoas
control; (d) the failure to extend the life of
the Suralco operations as expected due to exhaustion of the
bauxite, delay in curtailment of the refining
capacity, or other reasons; (e) changes in preliminary
accounting estimates due to the significant
judgments and assumptions required; (f) the outcome of
contingencies, including legal proceedings and
environmental remediation; and (g) the other risk factors
summarized in Alcoas Form 10-K for the year
ended December 31, 2014, and other reports filed with the
Securities and Exchange Commission. 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.
