Alumina Limited : 2011 Shareholder Half Year Update

We are pleased to report to you on Alumina’s improving earnings during 2011 and the increased interim dividend payable to shareholders.

Earnings growth driven by higher realised alumina prices and solid operational performance Alumina’s underlying earnings in the half year to June 2011 increased to US$78 million from US$22 million in the first half of 2010. This result reflects a steady improvement in industry prices and demand.

Operating margins also improved with higher realised alumina prices and solid operational performance offsetting the impact of higher input prices and the strength of the Australian dollar and Brazilian Real.

In the past twelve months, markets began to change the method used to price alumina. There is now a clear trend to alumina pricing being based on its own underlying economics rather than simply being linked to LME aluminium prices. This has resulted in an increase in realised alumina prices. We are in the first year of what is expected to be a five year transformation process as the AWAC joint venture progressively transitions to the new pricing structure. AWAC now has approximately 20 per cent of third party alumina sales based on index price. We are already seeing that this change has resulted in stronger bottom line performance, and as the world’s largest alumina producer, the AWAC joint venture is well positioned to benefit from this structural change and a shift in value as margins move upstream.

The Company retains a conservative gearing level of 11.3 per cent, with net debt of US$418 million at 30 June 2011.