Alcoa Inaugurate Expansion to Brazillian Alumina Refinery

Alcoa (NYSE:AA) has inaugurated the expansion of the Alumar alumina refinery in northern Brazil, where capacity more than doubled from 1.5 million metric tons per year (mtpy) to 3.6 million mtpy. Alcoa's share of the expansion will be 1.1 million mtpy. The expansion capacity at the refinery will be in the first quintile of low cost alumina production globally.

Alumar, located in Maranhão state outside São Luis, Brazil, is jointly owned by Alcoa Aluminio and Alcoa World Alumina and Chemicals/AWAC (54 percent), BHP Billiton (36 percent) and Rio Tinto Alcan (10 percent). Alcoa manages the facility.

The AWAC share of the Alumar refinery expansion will be supplied by the recently completed AWAC Juruti bauxite mine. Alcoa's investment in the Alumar expansion, which totaled approximately $1.0 billion, will place Alcoa's global refining system in the lowest cost quartile on the global cost curve. Production at the refinery will be ramped up to reach full capacity by the end of the first quarter of 2010.

Brazilian President Lula da Silva participated in Thursday's inauguration, along with Maranhão State Governor Roseana Sarney and other federal and state authorities. At the ceremony, President Lula said, "Above all the expansion of this refinery symbolizes a new moment being experienced by Brazil's North/Northeast, in its march toward economic emancipation. This region's economy has grown a lot in the last few years. That's why Alcoa, the world's main manager of alumina, and primary and fabricated aluminum, is transforming this Alumar complex here in Maranhão into one of the largest in the world, simultaneously with the implementation of a bauxite mine in Juruti."

Franklin L. Feder, president of Alcoa Latin America and Caribbean, said, "We accomplished this expansion at competitive cost, employing local workers and suppliers and incorporating state-of-the-art technology, which places the Alumar alumina refinery as one of the lowest cost refineries in the world. And our ramp-up activities are going extremely well so this low-cost production will be utilized quickly."

At the peak of the expansion construction, Alumar hired up to 13,000 workers, approximately 70% of them Maranhão natives, and 30% from the city of São Luis. When the milestone of 20 million work hours completed with no lost day incidents was reached, the project became a global labor safety benchmark.

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