Alcoa to pay $US 56 million to Alumina Limited for exiting Jamalco project

Alcoa World Alumina and Chemicals (AWAC), which is a joint venture between Alcoa and Alumina Limited, has been handing out dividends from its passive share. However, now with the sale of its share in the uneconomical Jamaica refinery, Alumina is slated to receive a handy cheque from Alcoa.

The sale was put up in June after which, AWAC has already divested its 55 percent stake in Jamalco for $US 140 million to Noble Group and has reported a book loss of $US 210 million - $US 260 million.

Alumina has reported a proportionate book loss of $US 84 million - $US 104 million which is an approximate figure taking into account calculative differences.

Despite the apparent losses, Alumina is still considering what to do with the $US 56 million it is due to receive from Alcoa. Although, the obvious option seems to be debt clearance, the company is facing better cash flows due to better pricing and lower costs as a result Alumina’s gearing is declining.

Alumina has some future capex requirements among which, the start up costs for the venture’s Ma’aden refinery in Saudi Arabia, is the primary expense expected to be around $US 11 million.