Alcoa Inc. : Alcoa Plans to Curtail Smelters in Italy and Spain as part of Global Primary Restructuring

Alcoa (NYSE: AA) announced today that the Company intends to curtail operations at three European aluminum smelters as part of a previously announced restructuring in its Global Primary Products business. The restructuring will reduce the Company's global smelting capacity by 12 percent or 531,000 metric tons.

Operations at Alcoa's Portovesme, Italy, as well as La Coruña and Avilés, Spain, smelters are designated for curtailment, with the intended actions to be completed in the first half of 2012. The facilities are among the highest-cost producers in the Alcoa system. Last week, Alcoa announced the permanent closure of the Company's smelter in Alcoa, Tennessee, and two potlines at its Rockdale, Texas, smelter.

At Portovesme, Alcoa will begin the consultation process to permanently close the facility. The La Coruña and Avilés curtailments are planned to be partial and temporary. An uncompetitive energy position, combined with rising raw material costs and falling aluminum prices, led to the planned curtailment of the facilities.

The curtailments represent 240,000 metric tons, or about 5 percent, of Alcoa's global smelting capacity. Total capacity at Portovesme is 150,000 metric tons. Capacity at La Coruña and Avilés is 87,000 and 93,000 metric tons per year, respectively.

"In today's rapidly changing global economy, it is imperative to respond quickly to maintain competitiveness," said Chris Ayers, Alcoa Executive Vice President and President, Alcoa Global Primary Products. "This decision was made after thorough analysis of all the possible alternatives. We are committed to working to find solutions that will minimize the impact on these communities and our workers there."

Alcoa will immediately begin consultation with the relevant employee representatives and governments. The total employment impact will not be determined until consultations are completed. Current employment at the three plants is about 1,500.

The curtailments will contribute to Alcoa's long-term goal of improving its position on the world aluminum production cost curve by 10 percentage points. This action will also increase Alcoa's competitiveness in the current volatile aluminum marketplace. Aluminum prices have fallen more than 27 percent from their peak in 2011.

In addition to the closures and curtailments, Alcoa will aggressively accelerate actions to reduce the cost of raw materials used by its Primary Products business and will adjust capacity across the Company's global refining system to reflect internal demand as well as prevailing market conditions.