Alcoa to Curtail Smelting and Refining Capacity to Further Drive Upstream Competitiveness

November 2, 2015

Production curtailments of 503,000 metric tons of aluminum and 1.2 million metric tons of alumina

Lightweight metals leader Alcoa (NYSE:AA) today announced that it is
taking decisive action to curtail uncompetitive smelting and refining
capacity to ensure continued competitiveness amid prevailing market
conditions. The Company will reduce aluminum smelting capacity by
503,000 metric tons and alumina refining capacity by 1.2 million metric
tons. Alcoa will begin the curtailments in the fourth quarter of 2015
and will complete them by the end of the first quarter of 2016.

The reductions will further improve the cost position of the Upstream
business and ensure competitiveness in a lower pricing environment,
including a 30 percent drop in the Midwest transaction aluminum price
year-to-date. Alcoa has been aggressively reshaping its Upstream
portfolio as part of a successful multi-year strategy to position itself
as a low-cost global leader in alumina and aluminum production. Once
today’s actions are complete, Alcoa will have closed, divested or
curtailed 45 percent of total smelting operating capacity since 2007.

“Alcoa has consistently taken decisive actions to create a commodity
business that is positioned to succeed throughout the cycle,” said Klaus
Kleinfeld, Chairman and Chief Executive Officer. “We have closed or
curtailed unprofitable capacity, repowered key assets at lower energy
prices, built-up a profitable value-add casthouse network, established
the foundation for a strong commercial bauxite business, and made
substantial productivity improvements. In the face of continued adverse
market forces, we are once again not standing still. These
difficult, but necessary measures will further strengthen our Upstream
portfolio, reducing our cost position and driving greater resilience as
we prepare to launch this business as a strong standalone company in the
second half of 2016.”

In its aluminum business, Alcoa will idle the Intalco and Wenatchee
primary aluminum smelters in Washington State, and the Massena West
smelter in New York. The Company will not modernize the New York Massena
East smelter and will permanently close the facility; potlines at
Massena East have been closed since March 2014. The casthouses at
Intalco and Massena West, which produce value-add shaped products, will
continue to operate. The Alcoa Forgings and Extrusions facility in
Massena is unaffected.

In its alumina business, Alcoa will partially curtail refining capacity
at its Pt. Comfort, Texas facility by about 1.2 million metric tons.

“Across the globe, we have been taking measures to curtail smelting and
refining capacity that is not competitive to improve our cost profile,”
said Roy Harvey, Executive Vice President and President, Global Primary
Products. “Alcoa has a long, proud history at the affected locations and
our dedicated employees have worked hard to keep our facilities
competitive in the face of challenging market conditions. Unfortunately,
today’s pricing environment necessitates very difficult decisions. We
recognize how deeply these decisions affect our Alcoa family and
communities and are committed to working closely with our employees and
unions and local stakeholders to support them through this transition.”

Once these actions are implemented, Alcoa will have curtailed or
closed 673,000 metric tons of uncompetitive smelting capacity and 2.5
million metric tons of uncompetitive refining capacity since its
announced review of 500,000 metric tons of smelting capacity and 2.8
million metric tons of refining capacity in March 2015.

Total restructuring-related charges in the fourth quarter of 2015
associated with today’s announcement are expected to be between $160
million and $180 million after-tax, or $0.12 to $0.14 per share, of
which approximately 30 percent would be non-cash.

As previously announced, Alcoa will separate into two, industry-leading
publicly-traded companies in the second half of 2016 – an
Upstream-focused company including its Mining, Refining, Smelting,
Energy and Casting businesses, and a Value-Add company including its
Global Rolled Products, Engineered Products and Solutions, and
Transportation and Construction Solutions businesses.

About Alcoa

A global leader in lightweight metals technology, engineering and
manufacturing, Alcoa innovates multi-material solutions that advance our
world. Our technologies enhance transportation, from automotive and
commercial transport to air and space travel, and improve industrial and
consumer electronics products. We enable smart buildings, sustainable
food and beverage packaging, high performance defense vehicles across
air, land and sea, deeper oil and gas drilling and more efficient power
generation. We pioneered the aluminum industry over 125 years ago, and
today, our more than 60,000 people in 30 countries deliver value-add
products made of titanium, nickel and aluminum, and produce
best-in-class bauxite, alumina and primary aluminum products. For more
information, visit,
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Forward-Looking Statements

This release contains statements that relate to future events and
expectations and as such constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include those containing such words as
“estimates,” “expects,” “goal,” “plans,” “should,” “target,” “will,”
“would,” or other words of similar meaning. All statements that reflect
Alcoa’s expectations, assumptions or projections about the future, other
than statements of historical fact, are forward-looking statements,
including, without limitation, statements regarding Alcoa’s goal to
create a globally competitive commodity business, the expected timing
for completing the curtailments, and the expected financial impact of
the curtailments. Forward-looking statements are subject to risks,
uncertainties and other factors, and are not guarantees of future
performance. Important factors that could cause actual results to differ
materially from those expressed or implied in the forward-looking
statements include: (a) material adverse changes in aluminum industry
conditions, including global supply and demand conditions and
fluctuations in London Metal Exchange-based prices and premiums, as
applicable, for primary aluminum, alumina, and other products, and
fluctuations in indexed-based and spot prices for alumina; (b) Alcoa’s
inability to successfully realize goals established in each of its
business segments, at the levels or by the dates targeted for such goals
(including moving its alumina refining and aluminum smelting businesses
down on the industry cost curves and increasing revenues and improving
margins in its Global Rolled Products, Engineered Products and
Solutions, and Transportation and Construction Solutions segments); (c)
Alcoa’s inability to realize expected benefits, in each case as planned
and by targeted completion dates, from acquisitions, divestitures,
facility closures, curtailments, or expansions, or international joint
ventures; (d) political, economic, and regulatory risks in the countries
in which Alcoa operates, including unfavorable changes in laws and
governmental policies, tax rates, civil unrest, or other events beyond
Alcoa’s control; (e) changes in preliminary accounting estimates due to
the significant judgments and assumptions required; (f) the outcome of
contingencies, including legal proceedings and environmental
remediation; (g) uncertainties as to the timing of the separation and
whether it will be completed; (h) the possibility that various closing
conditions for the separation may not be satisfied; (i) the impact of
the separation on the businesses of Alcoa; (j) the risk that the
businesses will not be separated successfully or such separation may be
more difficult, time-consuming or costly than expected, which could
result in additional demands on Alcoa’s resources, systems, procedures
and controls, disruption of its ongoing business and diversion of
management’s attention from other business concerns; (k) the potential
failure to retain key employees while the separation transaction is
pending or after it is completed; and (l) the other risk factors
summarized in Alcoa’s Form 10-K for the year ended December 31, 2014,
and other reports filed with the Securities and Exchange Commission.
Alcoa disclaims any obligation to update publicly any forward-looking
statements, whether in response to new information, future events or
otherwise, except as required by applicable law.

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