www.theaustralian.com.au
Alcoa exposure to fines hinders Alumina
Edited by : AL CIRCLE
2 min read
ALUMINA'S chance of posting a profit for last year was thwarted by its exposure to the $US548 million in fines, costs and settlement payments by US aluminium giant Alcoa to bring corruption charges in the Alba case to an end.
The Melbourne-based Alumina, a 40 per cent partner with Alcoa in the global alumina alliance AWAC, yesterday posted an underlying loss for 2013 of $US2.7m ($3m). While that was a big improvement on the $US62m loss in 2012, it was after a $US16m charge related to the Alba case ($US34m charge in 2012).
Alcoa, the managing partner of AWAC, brought the shutters down on the long-running civil and criminal proceedings in the Alba case in a $US384m agreement in January to resolve charges brought by US regulators that AWAC used a middleman to pay tens of millions of dollars in kickbacks to senior members of Bahrain's royal family and government officials to secure sales of West Australian alumina to a Bahraini state-controlled smelter, Aluminium Bahrain (Alba).
Under a previously arranged deal, and because of Alcoa's manager status in the global joint venture, Alumina is only up for 15 per cent of AWAC's settlement costs.
Although AWAC is primarily an alumina joint venture, it also owns the Point Henry aluminium smelter in Geelong and has a stake in the Portland smelter in western Victoria. Alcoa, again as the managing partner, this week announced the closure of the loss-making Point Henry smelter, and the possible sale of its associated power station at Anglesea -- if a buyer in the over-supplied power market can be found.
Citi analysts said that while a loss is never great, Alumina's 2013 result was largely in line with estimates.
The Melbourne-based Alumina, a 40 per cent partner with Alcoa in the global alumina alliance AWAC, yesterday posted an underlying loss for 2013 of $US2.7m ($3m). While that was a big improvement on the $US62m loss in 2012, it was after a $US16m charge related to the Alba case ($US34m charge in 2012).
Alcoa, the managing partner of AWAC, brought the shutters down on the long-running civil and criminal proceedings in the Alba case in a $US384m agreement in January to resolve charges brought by US regulators that AWAC used a middleman to pay tens of millions of dollars in kickbacks to senior members of Bahrain's royal family and government officials to secure sales of West Australian alumina to a Bahraini state-controlled smelter, Aluminium Bahrain (Alba).
Under a previously arranged deal, and because of Alcoa's manager status in the global joint venture, Alumina is only up for 15 per cent of AWAC's settlement costs.
Although AWAC is primarily an alumina joint venture, it also owns the Point Henry aluminium smelter in Geelong and has a stake in the Portland smelter in western Victoria. Alcoa, again as the managing partner, this week announced the closure of the loss-making Point Henry smelter, and the possible sale of its associated power station at Anglesea -- if a buyer in the over-supplied power market can be found.
Citi analysts said that while a loss is never great, Alumina's 2013 result was largely in line with estimates.
Previous article
Hudson updates alumina development program at Its White Mountain Anorthosite project in Greenland
Next articleUBS AG Downgrades Alumina Limited to Neutral (AWC)
Grow with
AL Circle
