Noranda announces cost-reduction and other strategic measures for its upstream business

Noranda Aluminum Holding Corporation has announced actions principally designed to reduce costs in the company's integrated upstream aluminium business, which comprises its bauxite mining operation in Jamaica, its alumina refinery in Gramercy, Louisiana, and its primary aluminium smelter in New Madrid, Missouri. These actions are in response to continued low aluminium prices, the previously announced idling of two pot lines at the company's aluminium smelter in New Madrid, Missouri, and other business issues affecting the company's upstream operations.

"These actions reflect our intense focus on managing cash and available liquidity in an especially challenging business environment for our integrated upstream business," said Layle K. "Kip" Smith, Noranda's President and Chief Executive Officer. "While managing through an extended aluminum price trough, our upstream business has recently faced additional operational and commercial challenges. These challenges include the idling of two pot lines at New Madrid, an unfavorable arbitration panel ruling regarding a bauxite production levy in Jamaica, and the bankruptcy filing by our principal third party bauxite customer. While the actions we've announced today are difficult, they are a necessary response to our current challenges as we proactively pursue other measures to reduce our costs in the upstream business."

Workforce Reduction

The company has initiated a workforce reduction involving approximately 190 employees, approximately 90% of which involve employees in the company's integrated upstream business. Approximately 75% of the total reduction relates to staffing adjustments at the New Madrid smelter which were planned prior to the January 7, 2016 electrical circuit failure that resulted in two of the smelter's three pot lines being idled.

WARN Notifications at New Madrid and Gramercy

The company has also issued the following notifications pursuant to the Federal Working Adjustment and Retraining Notification Act (WARN):

• Noranda Aluminum, Inc., the company's wholly owned subsidiary, notified employees of the New Madrid smelter that, in addition to the workforce reductions initiated today, approximately 350 employees will be terminated or laid off by February 4, 2016.
• Smelter employees were also notified that the site's remaining operations will be curtailed on or before March 12, 2016 unless the company is able to secure a substantially more sustainable power rate for the smelter and materially improve the company's overall liquidity.

As Noranda's Flat-Rolled Products business sources metal from a portfolio of suppliers, the company believes it has access to sufficient sources of aluminium to meet customer commitments for flat-rolled products. Accordingly, the company believes the curtailment of aluminium smelting operations will not adversely impact the operations of the Flat-Rolled Products business.