| 2008-03-04 | Contract/Agreements | NEW YORK--(BUSINESS WIRE)--Alcoa (NYSE:AA) today announced it has reached an agreement with the government of Quebec on a new, renewable energy contract to supply all three of the Companys aluminum smelters in the province Baie Comeau, Becancour (ABI), and Deschambault through the year 2040 and enabling Alcoa to invest $1.2 billion to upgrade and expand Baie Comeau production to 548,000 metric tons per year (mtpy).
Initial engineering studies for the upgrade and expansion activity at Baie Comeau will begin in early 2008, with the vast majority of the investment planned for the final stages of the project. It is expected that conversion and upgrade of the smelting technologies at the plant to a more environmentally friendly one, as well as the expansion of output at Baie Comeau by 110,000 mtpy, will be completed by 2015. The upgrade will eliminate PAHs emissions from the Soderberg pots and reduce greenhouse gas (GHG) emissions at the plant by 40 percent.
This is a great day for Quebec, the communities of Baie Comeau, Becancour and Deschambault, our employees, and for Alcoa, said Alain Belda, Alcoa Chairman and Chief Executive Officer. With the agreement to supply competitive long-term power for our three facilities in Quebec, we in turn can now invest in upgrading and expanding in order to make our already good operations in the province, even better.
During the upgrade and expansion phase of the project, an estimated $540 million of added economic value will be created in Quebec over a period of 4 years, supporting the equivalent of 6,800 job-years of employment. Following construction, the continued operations will then generate onsite as well as for suppliers and subcontractors an added economic value of $470 million per year, supporting 3,900 jobs.
Prior to this agreement, Alcoas three smelters in Quebec produced more than 1.1 million metric tons of aluminum per year and employ more than 3,600 people directly. In addition to the direct benefits, the facilities will generate more than $1.8 billion in economic spin-offs annually in the province as a result of this agreement.
Under terms of the agreement, which is conditional on Alcoa upgrading and expanding production in Baie Comeau, power contracts to supply all three Quebec smelters -- as well as the energy needed to support the expansion -- will be extended through the year 2040 at the regulated industrial L rate. Alcoa will also receive financial support from the government in the form of a loan guarantee.
In addition to the power agreement for all three smelters and the additional power for Baie Comeau, both the government of Quebec and Alcoa will accelerate their negotiations regarding securing additional power to support expansion of the Deschambault smelter. Alcoa has said it would invest and expand the facility if additional, competitively-priced, long-term power could be secured.
Thanks to the efforts of Premier Charest, the Premiers entire team, HydroQuebec, our communities, and many others who helped, we have taken great steps to secure the future for the communities of Baie Comeau, ABI and Deschambault, said Bernt Reitan, Alcoa Executive Vice President and Group President Global Primary Products. In addition to beginning work on the upgrade and expansion of Baie Comeau immediately, we will also now accelerate our discussions to see if we can secure enough competitively-priced, long-term power to enable us to invest and expand Deschambault as well. In fact, we would like to more than double the output there to 570,000 metric tons per year.
About Alcoa
Alcoa is the world leader in the production and management of primary aluminum, fabricated aluminum and alumina combined, through its active and growing participation 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 |
| 2008-02-08 | Contract/Agreements |
NEW YORK--(BUSINESS WIRE)--Alcoa announced today that it has made a significant contribution to a research and development program in Iceland that if successful could lead to a major step forward in the economics of developing high-temperature geothermal resources worldwide.
Geothermal energy is derived from underground water heated naturally by contact or close proximity to molten rock, deep beneath the earth’s surface.
Supported by Alcoa, the Iceland Deep Drilling Project (IDDP) consortium will collaborate on a deep drilling pilot project which will investigate the economic feasibility of producing energy and useful chemicals from geothermal systems at what are known as “supercritical conditions”. Essentially, these are natural systems where underground water becomes super-heated by close proximity to almost molten rocks.
Supercritical (high-temperature) geothermal systems could potentially produce up to ten times more electricity than the geothermal wells typically in service around the world today.
In signing the agreement with the research consortium, Bernt Reitan, Alcoa Executive Vice President, said, “We are drilling towards the future. Geothermal energy is exactly what the world needs to tap into almost limitless, clean, natural energy and to substantially reduce greenhouse emissions.
For Alcoa’s part, if we could connect supercritical geothermal energy to our world class aluminum smelting expertise, and the metal’s unrivaled ability to reduce greenhouse gas emissions generated by such things as transportation, then we are really beginning to make a difference that will be beneficial all over the world.
The technology we hope to develop in Iceland should be applicable where ever there is high temperature geothermal potential,” he said.
The IDDP consortium is composed of three leading Icelandic power companies: Hitaveita Sudurnesja Ltd.; Landsvirkjun; and Orkuveita Reykjavikur; together with Orkustofnun (National Energy Authority) and Alcoa.
To produce energy from supercritical fluids, requires drilling to depths of 4 to 5 km (13,000-16,000 ft) in order to reach fluid temperatures of 400–600°C. (750-1100°F). Today, typical geothermal wells are about 2 km deep, (8,000 ft), produce steam at about 300°C, (570°F) -- a rate sufficient to generate about 5 megawatts of electricity. It is estimated that producing steam from a well penetrating a reservoir at or above 450°C (840°F) temperature and at a rate of 0.67 cubic meters (24 cubic feet) a second, could generate 40-50 megawatts of electricity.
Each of the power companies, which financed the pre-feasibility study completed in 2003, have committed to drill at their own costs one 3.5-4.0 km deep well in a geothermal field they operate. These wells will be designed for deepening to 4.5-5.0 km. One of the wells selected for further deepening is a joint IDDP-project funded by the consortium with additional funds from the International Continental Scientific Drilling Program, an international foundation based in Germany that supports drilling on land for scientific research, as well as the U.S. National Science Foundation.
The first wells will be drilled in 2008 at Krafla in north-east Iceland and tested the following year. Two new wells, 4 km deep, will then be drilled at Hengill and Reykjanes geothermal fields during 2009-2010, and, subsequently, deepened. Pilot plant testing is expected to be completed in 2015.
About Alcoa
Alcoa is the world's leading producer and manager of primary aluminum, fabricated aluminum and alumina facilities, 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 including flat-rolled products, hard alloy extrusions, an |
| 2008-02-01 | Merger/Acquisition | Alcoa Inc. (NYSE: AA) announced today that it is partnering with Aluminum Corporation of China (Chinalco) to acquire 12 percent of the UK common stock of Rio Tinto plc. Alcoa will contribute up to $1.2 billion to the total investment.
Commenting on the investment, Alain Belda, Alcoa Chairman and Chief Executive Officer, said, We have long believed that Rio Tinto has a world-class portfolio of assets and is very well positioned to prosper in the current mining cycle. This investment, made in partnership with Chinalco, allows us to mutually benefit from developments in the sector. We have known Chinalco for many years, dating back to our participation in the successful launch of Chalcos IPO, and are looking forward to this new venture.
The investment will be made through a Special Purpose Vehicle, called Shining Prospect Pte. Ltd. (SPPL) created for this purpose. SPPL is based in Singapore and wholly owned by Chinalco. Through its investment, Alcoa will acquire an equity stake in SPPL commensurate with its cash contribution to the investment. |
| 2008-01-29 | Contract/Agreements | NEW YORK & BANDAR SERI BEGAWAN, Brunei Darussalam--(BUSINESS WIRE)--Alcoa (NYSE:AA) and the Brunei Economic Development Board (BEDB) yesterday signed a memorandum of understanding (MOU) to enable more detailed studies into the feasibility of establishing a modern, gas-powered aluminum smelter in Brunei Darussalam. This 2008 MOU supersedes an original MOU signed in 2003 and a supplement to that MOU signed in 2005.
Under the terms of the 2008 agreement, Alcoa and the BEDB will embark on the first of two distinct phases of study. Phase One will determine the optimum scope and dimensions of the proposed facilities, an appropriate power-delivery strategy, the most desirable location for the facility and associated port and infrastructure, and opportunities for synergistic development.
Phase Two of the feasibility studies will commence at the completion of Phase One, if the parties agree that further, more detailed study is warranted. This second phase would include a full environmental and social impact assessment and basic engineering design work for the facility.
It is envisaged that the facility would have initial operating capacity of 360,000 metric tons per year (mtpy) with potential for an eventual 600,000 to 700,000 mtpy capacity.
The 2008 MOU will extend for 12 months from January 1, 2008. No date has been set for completion of Phase One or Phase Two studies.
In signing the MOU, Jon Erik Reinhardsen, Alcoa Vice President and President of Alcoas Global Primary Products Growth, Energy, Bauxite, and Africa business unit, said that Alcoa was delighted to be continuing in its relationship with the BEDB.
We have been working with the BEDB since 2003 and admire the careful and diligent process that they are leading in order to assist the government in determining the feasibility of establishing a modern aluminum facility in Brunei Darussalam, said Reinhardsen. We are fully committed to working through this process with the BEDB and delivering studies that enable sound, sustainable decisions to be taken.
Youth and Small Business Development Program
As part of a second MOU signed today, the parties will embark on an extensive public outreach program that will include a small business development training component in collaboration with the Ministry of Culture, Youth, and Sports.
Reinhardsen said Alcoa will commit professional and other resources to the development and delivery of the small business development program.
If we proceed with the establishment of the proposed aluminum facility, it will create long-term, stable employment within its own boundaries as well as opportunities for generations of Brunei entrepreneurs, said Reinhardsen. We want to start building the foundation for that opportunity immediately. The partnership with the Youth Development Centre will enable us to begin building local value from this project, even during this early study period.
Dato Timothy Ong, BEDBs Chairman of the Board, said, The Brunei Economic Development Board welcomes Alcoas interest in investing in Bruneis economic development. We look forward to working with Alcoa on the feasibility of an aluminum smelter for Brunei and on initiatives to promote small business development in this country.
About the Brunei Economic Development Board
The BEDB is a statutory body established in 2001 by His Majesty The Sultan of Brunei Darussalam to create employment and business opportunities for its people through partnerships with local and foreign investors. For more details about the BEDB, please visit www.bedb.com.bn.
About Alcoa
Alcoa is the world's leading producer and manager of primary aluminum, fabricated aluminum and alumina facilities, 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 b |
| 2008-01-18 | Earnings/Dividends | NEW YORK--(BUSINESS WIRE)--The Board of Directors of Alcoa (NYSE:AA) declared (a) a quarterly common stock dividend of 17 cents per share payable February 25, 2008 to shareholders of record at the close of business on February 8, 2008 and (b) a quarterly dividend of 93.75 cents per share on Alcoas $3.75 cumulative preferred stock payable April 1, 2008 to shareholders of record at the close of business on March 14, 2008. Alcoa has paid a quarterly dividend on its common stock for more than 60 years.
Alcoa is the world's leading producer and manager of primary aluminum, fabricated aluminum and alumina facilities, 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 including flat-rolled products, hard alloy extrusions, and forgings, Alcoa also markets Alcoa wheels, fastening systems, precision and investment castings, structures and building systems. The company has 107,000 employees in 44 countries and has been named one of the top most sustainable corporations in the world at the World Economic Forum in Davos, Switzerland. More information can be found at www.alcoa.com.
|
| 2008-01-10 | Company Financing | CHARLESTON, S.C.--(BUSINESS WIRE)--Alcoa (NYSE:AA) announced today that the Alcoa Foundation has awarded a $200,000 grant to the South Carolina Nature Conservancy to initiate a multi-year oyster restoration program. The program is part of The Nature Conservancys global mission to protect the Temperate Western Atlantic Coast, which extends from the Gulf of Maine to the Cape Canaveral, FL.
The coast is critical habitat for migratory shorebirds such as Red Knots, raptors, waterfowl, and neotropical songbirds. However, significant areas of the coastline are threatened by development, habitat conversion and global climate change. Conserving ocean and coastal ecosystems will improve water quality, protect diverse marine habitat and benefit economies and livelihoods of coastal communities for generations to come.
We are extremely grateful to Alcoa Foundation for its generosity, said Mark Robertson, from the SC Nature Conservancy. Oysters have a unique role in tidal habitats, because they create living reefs that support not just themselves but some 130 other species. With this grant we can increase the number of oysters in South Carolina waters, builds oyster reefs to decrease erosion along salt marsh, and boosts recycling of oyster shells cast off by restaurants, seafood suppliers and the public.
With the Alcoa Foundation grant, the SC Nature Conservancy will start a new restoration program that benefits commercial and recreational fisherman, coastal citizens, and the tourism industry by building and protecting oyster reefs through science, market-based strategies, restoration and resilient habitat protection.
It has been estimated that only seven percent of South Carolinas oyster shells are recycled through existing programs. Finding ways to put cast-off shells back into reefs is one part of the program. Other plans include prioritizing restoration sites through analysis of current and historic oyster locations, habitat parameters and ownership/leasing status.
Were pleased that Alcoa Foundation is able to help kickstart an oyster reef restoration program here in South Carolina, said Mark Dunlay, Location Manager for Alcoas Mt. Holly operation in Berkeley County. The success of this program will help ensure a healthy coast well into the future.
About Alcoa Foundation
Alcoa Foundation is a separately constituted nonprofit U.S. corporate foundation with assets of approximately $534 million. Its mission is to actively invest in the quality of life in Alcoa (NYSE:AA) communities worldwide. Throughout its history, the Foundation has been a source of positive community change and enhancement, with nearly $437 million invested since 1952. To learn more about Alcoa Foundation, visit www.alcoa.com under Community.
About The Nature Conservancy
The Nature Conservancy is a leading international, nonprofit organization that preserves plants, animals and natural communities representing the diversity of life on Earth by protecting the lands and waters they need to survive. To date, the Conservancy and its more than one million members have been responsible for the protection of more than 15 million acres in the United States and have helped preserve more than 102 million acres in Latin America, the Caribbean, Asia and the Pacific. Visit us on the Web at nature.org
|
| 2008-01-09 | Earnings/Dividends | NEW YORK--(BUSINESS WIRE)--Alcoa (NYSE: AA) today announced it achieved record results in revenues, income from continuing operations and cash from operations for the full year 2007. Revenues for 2007 were $30.7 billion, compared to $30.4 billion in 2006. Annual income from continuing operations rose to $2.6 billion, or $2.95 per diluted share, for 2007, a 19 percent increase compared to $2.2 billion, or $2.47, in 2006. And, cash from operations for 2007 increased 21 percent to more than $3.1 billion from $2.6 billion in 2006.
For the second year in a row, Alcoa has achieved company all-time records in revenues, income from continuing operations and cash generation, said Alain Belda, Alcoa Chairman and CEO. We battled substantially higher material input and energy costs, and currency impacts while simultaneously continuing to execute on the largest capital investment program in our history.
We have investedin new plants, expanded production at others, modernized operations, renegotiated long-term power agreements, and builtnew energy facilities to extend ourenergy access at competitive rates, while also continuing to invest in growth markets such as Brazil, China and Russia, Belda said.
"These actions, combined with portfolio and cash flow management, our share repurchase program, conservative leverage, and our commitment to sustainabilitydelivered results now, and will continue togenerate quality profitable growthfor decades, added Belda. In 2007, Alcoans delivered yet again. This is what builds a stronger Company for our stakeholders.
Fourth quarter income from continuing operations was $624 million, or $0.74. Included in the results are a favorable restructuring adjustment and a tax benefit totaling $323 million or $0.38 per share, almost all of which stems from the recent agreement to sell the packaging and consumer businesses. Income from continuing operations in the 2006 fourth quarter was $258 million, or $0.29, and $558 million, or $0.64, in the third quarter 2007.
Net income for the fourth quarter 2007 was $632 million, or $0.75, which includes the restructuring adjustment and the benefit from the agreement to sell the packaging and consumer business. Net income for the fourth quarter 2006 was $359 million, or $0.41, and $555 million, or $0.63, in the 2007 third quarter.
Revenues for the 2007 fourth quarter were $7.4 billion, compared to $7.8 billion a year ago as a result of lower LME prices and the exclusion of results from the soft alloy extrusion business which is now part of a joint venture. The soft alloy extrusion business had revenues of approximately $560 million in the fourth quarter of 2006.
Cash Generation, ROC, and Growth
Cash from operations in the fourth quarter 2007 was $643 million, bringing full-year cash from operations to more than $3.1 billion, compared to $2.6 billion in 2006 and helping to keep the Companys debt-to-capital ratio within its targeted range at 30.2 percent.
The Companys trailing 12-month return on capital (ROC) was 16.1 percent, excluding investments in growth projects. Including investments in growth projects, ROC stands at 12.7 percent, well above the cost of capital.
In 2007, the Company completed major growth projects, including its first greenfield smelter in 20 years in Iceland, a new anode plant in Mosjoen, Norway, and its third flat-rolled products facility in China (Kunshan). In addition, major progress was made on several other growth projects including the Juruti bauxite mine, the expansion of the Bohai rolling mill in China, and expansion of the Sao Luis alumina refinery.
The Company made significant progress to extend the life of existing facilities through renegotiating long-term power agreements including those in Massena, NY and Wenatchee, WA in 2007. The Company also continued investments in Brazil including the Serra do Facao hydroelectric project to further increase its self-sufficiency there.
The Company is now ope |