Conditionally authorizes $52 million dependent on Record of Decision from EPA
NEW YORK–(BUSINESS WIRE)–Alcoa today announced that it is prepared to proceed with the next phase of the modernization of its Massena, NY operations, once the company receives a Record of Decision (ROD) on the Grasse River that is in line with the Proposed Remedial Action plan issued by the Environmental Protection Agency last fall. The next phase includes spending $52 million for work that will begin in June 2013, including $10 million toward economic development in the North Country.
“Thanks to the leadership of U.S. Sen. Charles Schumer, Gov. Andrew Cuomo, the New York Power Authority and many other government officials, employees, union leaders and community members, we are ready to take this important step toward modernizing our Massena facilities,” said Alcoa Executive Vice President and President of Global Primary Products Chris Ayers. “Modernizing Massena will help us move farther down the aluminum cost curve and secure Alcoa’s place as a vital part of the North Country’s economy for decades to come.”
Once a ROD is received, the next phase of the modernization will include site work and support projects in preparation for the construction of a new potline at the location’s Massena East plant. The company expects to spend $52 million on this modernization phase through 2015, including the $10 million commitment toward economic development.
Under the terms of the contract, NYPA will supply power to the operations in Massena for a term of 30 years following the expiration of Alcoa’s current power contract in 2013, with the option to extend the contract for an additional 10 years under certain economic conditions. In turn, Alcoa must invest a minimum of $600 million to modernize its operations.
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 “anticipates,” “expects,” “intends,” “plans,” “scheduled,” “should,” “will,” 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. Forward-looking statements are subject to a number of known and unknown 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 for primary aluminum, alumina, and other products; (b) deterioration in global economic and financial market conditions generally, or unfavorable changes in the markets served by Alcoa; (c) Alcoa’s inability to achieve the level of revenue growth, cash generation, cost savings, improvement in profitability and margins, fiscal discipline, or strengthening of competitiveness and operations (including moving its refining and smelting businesses down on the industry cost curves and increasing revenues in its Global Rolled Products and Engineered Products and Solutions segments), anticipated from its restructuring programs, productivity improvement, cash sustainability, and other initiatives; (d) the outcome of contingencies, including legal proceedings, government investigations, and environmental remediation; (e) failure to maintain investment grade credit ratings which could limit Alcoa’s ability to obtain future financing, increase its borrowing costs, adversely affect the market price of its existing securities, or otherwise impair its business, financial condition and results of operations; (f) failure to receive from the U.S. Environmental Protection Agency a Record of Decision on the Grasse River that is consistent with the Preliminary Remedial Action Plan dated October 1, 2012; (g) changes in project economics, regulatory requirements, capital expenditure restrictions, an inability to obtain financing, unexpected events beyond Alcoa’s control, or other reasons which would preclude or make unfeasible the company’s authorization of full implementation of the Massena East modernization plan; and (h) the other risk factors summarized in Alcoa’s Form 10-K for the year ended December 31, 2012 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.
Alcoa is the world’s leading producer of primary and fabricated aluminum, as well as the world’s largest miner of bauxite and refiner of alumina. In addition to inventing the modern-day aluminum industry, Alcoa innovation has been behind major milestones in the aerospace, automotive, packaging, building and construction, commercial transportation, consumer electronics and industrial markets over the past 125 years. Among the solutions Alcoa markets are flat-rolled products, hard alloy extrusions, and forgings, as well as Alcoa® wheels, fastening systems, precision and investment castings, and building systems in addition to its expertise in other light metals such as titanium and nickel-based super alloys. Sustainability is an integral part of Alcoa’s operating practices and the product design and engineering it provides to customers. Alcoa has been a member of the Dow Jones Sustainability Index for 11 consecutive years and approximately 75 percent of all of the aluminum ever produced since 1888 is still in active use today. Alcoa employs approximately 61,000 people in 30 countries across the world. For more information, visit www.alcoa.com and follow @Alcoa on Twitter at twitter.com/Alcoa.
Nick Ashooh, 212-836-2690