Alcoa continues transforming upstream portfolio, announces strategic review of smelting and refining capacity

Lightweight metals leader Alcoa today announced that it is continuing to aggressively transform its upstream portfolio to create a lower cost, globally competitive commodity business. The Company said over the next twelve months it will review 500,000 metric tons of smelting capacity and 2.8 million metric tons of refining capacity for possible curtailment or divestiture. The review will include facilities across the Alcoa system.

The potential actions could affect 14 percent of Alcoa’s global smelting capacity and 16 percent of its global refining capacity. Currently, the Company has 19 percent, or 665,000 metric tons, of smelting capacity and 7 percent, or 1.2 million metric tons, of its global refining capacity idle.

“Alcoa continues to take decisive action, transforming its upstream portfolio to create a lower cost, globally competitive commodity business,” said Bob Wilt, President of Alcoa’s Global Primary Products. “Our goal is to move down the global aluminum cost curve to the 38th percentile and the global alumina cost curve to the 21st percentile by 2016. The results from this review will help achieve those goals. We’ll take action only after a thorough strategic review to determine the best outcome for our shareholders and in consultation with our stakeholders.”

When reviewing capacity, Alcoa will consider a wide variety of alternative actions, ranging from partial to full plant curtailments, permanent shutdowns or divestitures. Decisions on curtailments, closures or divestitures will be announced as reviews are completed.

In its Primary Metals business, the Company has curtailed, closed or sold 1.3 million metric tons, or 31 percent, of its highest cost global smelting capacity since 2007.