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Alcoa to Curtail Aluminum Smelting Capacity in Brazil

In 2013, Alcoa curtailed 34000 t at Poços and 97000 metric tons at São Luís. The new curtailments will include the remaining 62000 t of capacity from the Poços smelter, resulting in a full curtailment of its three potlines. Another 85000 t will be curtailed at São Luís. “Across the globe, we are taking measures to curtail high-cost smelting capacity that is not competitive and reshape our cost profile,” said Bob Wilt, President of Alcoa Global Primary Products. As a result of the smelter curtailment, the Poços refinery will also reduce production accordingly. The mine, aluminum powder plant and casthouse at Poços will continue normal operations, as will the refinery at São Luís. Other Alcoa operations in Brazil are not affected. In May 2013, Alcoa placed 460000 t of smelting capacity under review. Once all announced curtailments and closures are complete, Alcoa will have approximately 800000 t, or 21 %, of smelting capacity offline. Total restructuring-related charges associated with the Brazil curtailments in the first quarter are expected to be between USD 40 – 50 million after-tax, or USD 0,04 – 0,05 per share, of which approximately 30 % would be non-cash. Alcoa’s review of its primary metals operations is consistent with the company’s goal of lowering its position on the world aluminum production cost curve to the 38th percentile and the alumina cost curve to the 21st percentile, by 2016. Alcoa operates in Brazil throughout the aluminum production chain, from bauxite mining to the production of transformed and value-add products. Alcoa has 5700 employees and six production units and offices in the states of Maranhão, Minas Gerais, Pará, Pernambuco, Santa Catarina, São Paulo and Federal District. Alcoa owns 100 % of the Poços smelter, and the São Luís smelter is owned 60 % by Alcoa Alumínio and 40 % by BHP Billiton. The company also has shareholdings in Mineração Rio do Norte (MRN) and in four hydroelectric power plants: Machadinho, Barra Grande, Serra do Facão and Estreito. 

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