Alcoa to Close Point Henry Aluminum Smelter and Rolling Mills in Australia

February 17, 2014

Alcoa (NYSE: AA) today announced it will permanently close its Point
Henry aluminum smelter and two rolling mills in Australia. The smelter
and an adjacent rolling mill are located in Geelong, Victoria. The
second mill and a recycling facility are located in Yennora, New South
Wales. The smelter will close in August and the rolling mills by the end
of 2014.

The Point Henry smelter was placed under strategic review in February
2012 due to challenging market conditions. A comprehensive review found
that the 50-year-old smelter has no prospect of becoming financially
viable. The two rolling mills serve the domestic and Asian can sheet
markets which have been impacted by excess capacity. Alcoa of Australia
operates the smelter where approximately 500 employees work. Alcoa Inc.
operates the rolling mills which employ about 480 people.

“We recognize how deeply this decision impacts employees at the affected
facilities and are committed to supporting them through this
transition,” said Chairman and Chief Executive Officer Klaus Kleinfeld.
“Despite the hard work of the local teams, these assets are no longer
competitive and are not financially sustainable today or into the

The Anglesea coal mine and power station that currently supplies
approximately 40 percent of the power needs for the Point Henry smelter
has the potential to operate as a stand-alone facility after the smelter
closes. Alcoa of Australia will actively seek a buyer for the facility.

The Portland Aluminum smelter in Victoria will continue normal
operations, as will Alcoa of Australia’s bauxite mining and alumina
refining operations in Western Australia.

“These are hard decisions to make,” said Alan Cransberg, Managing
Director, Alcoa of Australia Limited. “We understand how difficult this
is for our employees and their families, our contractors, suppliers and
community partners. Everyone has worked hard to improve the
competitiveness of the smelter and rolling business. They are part of a
proud history of Alcoa in Australia over the last 50 years and part of
the significant contributions we have made to the Australian economy and
local communities. We appreciate the ongoing support of the Australian
and Victorian governments and will continue to work closely with all
levels of government, our employees, unions and community stakeholders
to manage through these changes.”

Total 2014 restructuring-related charges associated with the closures
outlined above are expected to be between $250 million and $270 million
after-tax and non-controlling interest, or $0.22 to $0.25 per share, of
which approximately 60 percent would be recorded in the first quarter.
Cash costs during 2014 are expected to total approximately $160 million.

The closures will reduce Alcoa’s global smelting capacity by 190,000
metric tons and reduce Alcoa’s can sheet capacity by 200,000 metric
tons. Including the closure of the Point Henry smelter, Alcoa has
announced closures or curtailments representing 551,000 metric tons of
smelting capacity, exceeding the 460,000 metric tons placed under review
in May 2013. Once the Point Henry closure is complete, Alcoa will have
total smelting operating capacity of approximately 3,760,000 metric
tons, with approximately 655,000 metric tons, or 17 percent, of high
cost capacity offline.

About Alcoa of Australia Limited
Alcoa of Australia Limited
is 60 percent owned by Alcoa Inc. and 40 percent owned by Alumina
Limited. Alcoa of Australia owns and operates two bauxite mines and
three alumina refineries in Western Australia, and two aluminum smelters
(holding a 55 percent share in the Portland Aluminum smelter), a coal
mine and a power station in Victoria. Alcoa of Australia employs
approximately 5,200 people through its mining, refining and smelting
operations in Australia.

About Alcoa
A global leader in lightweight metals
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 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 “expects,” “goal,” “plans,” “potential,”
“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, forecasts concerning global
demand growth for aluminum, end market conditions, targeted financial
results or operating performance, and statements about Alcoa’s
strategies, outlook, and business and financial prospects.
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, and premiums, as
applicable, for primary aluminum, alumina, and other products, and
fluctuations in indexed-based and spot prices for alumina; (b)
deterioration in global economic and financial market conditions
generally; (c) unfavorable changes in the markets served by Alcoa; (d)
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 alumina refining and aluminum 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 and productivity
improvement, cash sustainability, and other initiatives; (e) political,
economic, and regulatory risks in the countries in which Alcoa operates
or sells products, including unfavorable changes in laws and
governmental policies, foreign currency exchange rates, tax rates, civil
unrest, or other events beyond Alcoa’s control; (f) changes in
preliminary accounting estimates due to the significant judgments and
assumptions required; and (g) the other risk factors summarized in
Alcoa’s Form 10-K for the year ended December 31, 2013, 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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