Alcoa Reaches Power Agreement to Improve Competitiveness of Québec Smelters, Secure 3,000 Jobs

February 25, 2014

Alcoa to Optimize Baie-Comeau Casthouse to Support North American Auto Sheet Growth; Partner with Government on Sustainable Transportation Initiatives

Alcoa (NYSE:AA) and the Government of Québec have reached an agreement
to improve the competitiveness of Alcoa’s three smelters in Québec,
securing approximately 3,000 jobs. Under the agreement, Hydro-Québec
will renew Alcoa’s power supply contracts for the Becancour and
Deschambault facilities until 2030 and for the Baie-Comeau plant through

The agreement enables Alcoa to proceed with $250 million of planned
investments at the smelters over the next five years to further improve
their competitiveness. As part of that investment, Alcoa will increase
production of aluminum used for auto manufacturing and reduce production
of commodity-grade aluminum at the Baie-Comeau casthouse to capture
demand from automakers as they turn to aluminum for more fuel-efficient
vehicles. According to automakers, aluminum body sheet content in North
American vehicles is expected to quadruple by 2015 and increase tenfold
by 2025, from 2012 levels.

“These actions support our strategy to lower the cost base of our
upstream businesses while capturing demand for higher-margin, value-add
products,” said Bob Wilt, president of Alcoa Global Primary Products.
“The agreement will help Alcoa achieve its goal of moving down the
global aluminum cost curve, and the casthouse optimization will help
meet growing demand for aluminum in the North American auto market.”

In addition to the planned investments, Alcoa has agreed to support the
government’s electric transportation strategy by considering the
Baie-Comeau facility as a potential source of aluminum for emerging
technology applications, including aluminum-air batteries. Alcoa
recently entered into a joint
development agreement
with clean technology company, Phinergy, to
further develop its battery, which can be used in electric vehicles and
runs on air and aluminum. Alcoa will also provide financial support and
lend technical expertise to government-led programs focused on
lightweighting vehicles with aluminum.

The previously planned modernization of the Baie-Comeau facility,
through which Alcoa would have constructed a new potline to replace the
two Söderberg potlines it closed last year, is not included in this
agreement and will no longer be pursued.

“This agreement marks a new start for our Québec smelters and we applaud
the Premier and her team for their vision and commitment to Alcoa, our
employees and community stakeholders,” said Martin Brière, President of
Alcoa Canada Global Primary Products. “Alcoa’s facilities in Québec can
now concentrate on meeting growing global demand for aluminum and
continuing to provide important economic benefits to the region.”

About Alcoa in Canada

In Québec, Alcoa Canada Global Primary Products (GPP Canada) is composed
of the Bécancour (ABI), Baie-Comeau and Deschambault smelters, as well
as the Bécancour Rod Plant. These four plants have an annual production
capacity of almost one million metric tons of ingots, castings, billets
and aluminum rods. Alcoa has approximately 3,000 employees in Québec and
its activities generate more than $1.5 billion in economic impact
annually in the province. More information is available at

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,
follow @Alcoa on Twitter at
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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
“anticipate,” “estimate,” “expect,” “goal,” “plan,” “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, including,
without limitation, forecasts concerning demand growth for aluminum or
other trend projections, 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 successfully realize the goals established in each
of its four 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 and
Engineered Products and Solutions segments); (e) Alcoa’s inability to
successfully capture demand for higher-margin, value-add products,
whether due to market conditions, changes in regulatory requirements, a
failure to successfully implement technologies, or other factors; and
(f) the other risk factors discussed in Part I, Item 1A of Alcoa’s Form
10-K for the year ended December 31, 2013, as well as other reports
filed with the Securities and Exchange Commission. Alcoa disclaims any
intention or obligation to update publicly any forward-looking
statements, whether in response to new information, future events or
otherwise, except as required by applicable law.

Investor Contact:
Kelly Pasterick, + 1 212-836-2674
Media Contact:
Christa Bowers, + 1 212-836-2605
Alcoa Canada
Lysane Martel, +1 514-906-2537