Company Profiles

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13. Appendix B: Company profiles

13.1 Alcoa

Contact information

Address Alcoa Global Center 390 Park Avenue New York NY 10022 USA Telephone + 1 412 553 4545 Website alcoa.com

Source: Roskill Pangaea database

Shareholder structure showing significant shareholdings

Source: Roskill Pangaea database

Headquartered in New York, lightweight metals producer, Alcoa is the largest US aluminium company and a world leader. It is fully integrated with activities in 30 countries, which includes bauxite mining, alumina refineries and primary aluminium production and fabricated products manufacture.

Aluminium and alumina represent 43% of the company’s revenues, and in terms of importance the USA accounted for 51% of its sales, while Europe accounted for another 27% in 2014. In total the group has approximately 59,000 employees.

On 28 September 2015, Alcoa announced that in the second half of 2016, it would separate into two independent, publically-traded companies. An upstream Global Primary products segment will be formed of the company’s Bauxite, Alumina, Aluminium, Casting and Energy businesses. A second Value-Add company will include the company’s Global Rolled Products Engineered Products and Solutions, and Construction Solutions businesses.

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Alcoa: Locations and foreign interests

Registered country

USA

Operating countries

Australia Norway

Brazil Saudi Arabia

Canada Spain

Greenland Suriname

Guinea USA

Iceland

Co-owners of operations

Australia Spain

Canada USA

China Channel Islands

Japan

Source: Roskill Pangaea database Notes: Countries Alcoa is shown to operate in, only includes bauxite, alumina and primary aluminium operations

The upstream company will operate in 64 locations worldwide and possess the largest bauxite assets worldwide. Its refining business is anticipated to match growing demand from Asia, the Middle East and Latin America. Following the company’s decision to split, the upstream business will represent the world’s fourth-largest aluminium producer. The company has already been altering its alumina and primary metals sectors in the past few years, with capacity curtailments and closures necessary to keep operations economically viable.

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Alcoa: Map of operations

Source: Google; Roskill Pangaea database

In 2015, owing to uncompetitive smelting and refining capacity, the company intended to reduce aluminium smelting capacity by 503ktpy and alumina refining capacity by 1.2Mtpy. Following these changes, Alcoa will have closed, divested or curtailed 45% of total smelting operating capacity since 2007. It has also cut back 2.5Mtpy of uncompetitive refining capacity since it reviewed 2.8Mt of refining capacity in March 2015.

In terms of its aluminium business, Alcoa intends to idle the Intalco (Ferndale) and Wenatchee primary aluminium smelters in Washington State and the Massena West smelter in New York. By the end of Q1 2016, it will also permanently close the 269kt Warrick operations smelter in Evansville, Indiana. The company has taken the decision not to modernise the Massena East smelter and will permanently close the facility. The casthouses at Intalco and Massena West that produce value-added shaped products will operate as normal.

Alcoa World Alumina and Chemicals (AWAC) is a global enterprise owned 60% by Alcoa and 40% by Alumina Limited. AWAC covers Alcoa's bauxite and alumina interests in Australia, Jamaica, Suriname, Guinea, Spain, the USA and Brazil. In 2007, Alcoa in association with Chinalco bought a 12% interest in Rio Tinto.

Alcoa: Subsidiaries and indirect interests in operations

Subsidiary: Alcoa World Alumina and Chemicals (60%) USA Operation: Point Comfort (100%) USA Subsidiary: Alcoa of Australia (100%) Australia Operation: Willowdale (100%) Australia Operation: Huntly (100%) Australia Operation: Pinjarra (100%) Australia Operation: Kwinana (100%) Australia Operation: Wagerup (100%) Australia Operation: Portland aluminium (55%) Australia Subsidiary: Mineração Rio do Norte (5%) Brazil Operation: Trombetas (100%) Brazil Subsidiary: Alcoa World Alumina Brazil (100%) Brazil Operation: Juruti Brazil Operation: São Luís refinery (Alumar) (39%) Brazil Subsidiary: Halco Mining Consortium (45%) Guinea Subsidiary: Boké Investment Company (100%) Guinea Subsidiary: Compagnie des Bauxites de Guinée (51%) Guinea Operation: Sangarédi (100%) Guinea Operation: Kamsar Guinea Project: Sangarédi (capacity expansion) (100%) Guinea Subsidiary: Alúmina Española (100%) Spain Operation: San Ciprián Spain Operation: Avilés Spain Operation: La Coruña Spain Subsidiary: Suriname Aluminium Company (100%) Suriname Operation: Paranam (55%) Suriname Operation: Coermotibo (55%) Suriname Operation: Onverdacht (55%) Suriname Subsidiary: Alcoa World Alumina (AWA) (100%) USA Project: Kabata (50%) Guinea Subsidiary: Alcoa Minerals of Suriname (100%) Suriname Subsidiary: Alcoa Aluminio S.A (100%) Brazil Operation: Poços de Caldas Brazil Operation: São Luís smelter (Alumar) (60%) Brazil Subsidiary: Alcoa Saudi Smelting Inversiones Spain Subsidiary: Ma'aden Bauxite and Alumina Company (25.1%) Saudi Arabia Operation: Al Ba'itha Saudi Arabia Operation: Ras Al Khair Saudi Arabia Operation: Ras Az Zawr Saudi Arabia Subsidiary: Aluminerie de Bécancour (74.95%) Canada Operation: Bécancour (100%) Canada Subsidiary: Alcoa Norway Norway Operation: Lista Norway Operation: Mosjoen Norway Subsidiary: Aluminerie de Deschambault Canada Operation: Deschambault Canada Subsidiary: Aluminerie de Baie-Comeau Canada Operation: Baie-Comeau Canada Subsidiary: Intalco Aluminium Corporation USA Operation: Ferndale USA

Source: Roskill Pangaea database

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In 2014, Alcoa, largely through AWAC, had attributable bauxite capacity of about 46.3Mtpy in Australia, Suriname, Guinea, and Brazil, and 18Mt of attributable alumina capacity in Australia, the USA, Suriname, Spain and Brazil. In 2014, Alcoa consumed 40.8Mt of bauxite from AWAC and its own resources, and 8.2Mt from entities in which the company has an equity interest.

On 15 October 2015, Alcoa signed a definitive agreement to sell its remaining stake in bauxite mining and alumina refining joint venture company Jamalco to the Noble Group for US$140M. AWAC will continue as the managing operator for three years under a compensated service agreement. The Jamalco joint venture had previously been 55% owned by Alcoa Minerals of Jamaica (AMJ) and 45% owned by Clarendon Alumina Production. Alcoa’s decision to sell AWAC’s stake in Jamalco is part of restructuring its upstream business and lowering the cost base of its commodity business.

Alcoa: Operational details Capacity Name Location Country Status End products (ktpy) Willowdale Waroona Australia Operational Met. bauxite 10,500 Huntly Dwellingup Australia Operational Met. bauxite 23,000 Bayer/smelter Pinjarra Pinjarra Australia Operational 4,234 alumina Bayer/smelter Kwinana1 kwinana Australia Operational 2,190 alumina Bayer/smelter Wagerup Wagerup Australia Operational 2,555 alumina Portland aluminium Portland Australia Operational Aluminium 358 Porto Trombetas2 Brazil Operational Bauxite ore 18,100 Trombetas Juruti Juruti Brazil Operational Bauxite ore 3,600 Sangarédi3 Boké Guinea Operational Met. bauxite 7,500 Sangarédi (capacity Financing and Boké Guinea Met. bauxite 7,500 expansion) 3 permitting Bayer/smelter San Ciprián4 San Ciprián Spain Operational 1,550 alumina San Ciprián San Ciprián Spain Operational Aluminium 250 Avilés Avilés Spain Operational Aluminium 93 La Coruña La Coruña Spain Operational Aluminium 87 Bayer/smelter Paranam5 Paranam Suriname Operational 1,757 alumina e Coermotibo Coermotibo Suriname Operational Met. bauxite 1,500 e Onverdacht Onverdacht Suriname Operational Met. bauxite 1,600 Financing and Bayer/smelter Kabata6 Kabata, Guinea Guinea 1,500 permitting alumina Bayer/smelter Point Comfort7 Point Comfort USA Operational 2,305 alumina Bayer/smelter São Luís (Alumar) São Luís Brazil Operational 3,639 alumina São Luís (Alumar) São Luís Brazil Closed Aluminium 447 Pocos de Poços de Caldas Brazil Operational Met. bauxite 860 Caldas Pocos de Bayer/smelter Poços de Caldas8 Brazil Operational 390 Caldas alumina Saudi Al Ba'itha9 Qbah Operational Met. bauxite 4,000 Arabia Saudi Ras Al Khair9 Ras Al Khair Operational Aluminium 740 Arabia Saudi Ras Az Zawr9 Ras Al Zawr Operational Aluminium 740 Arabia Bécancour Bécancour Canada Operational Aluminium 430 Table continued….

….Table continues Capacity Name Location Country Status End products (ktpy) Fjardaal Fjardaal Iceland Operational Aluminium 346 Lista Lista Norway Operational Aluminium 127 Mosjoen Mosjoen Norway Operational Aluminium 221 Deschambault Deschambault Canada Operational Aluminium 215 Baie-Comeau Baie-Comeau Canada Operational Aluminium 335 Rockdale Rockdale USA Operational Aluminium 191 Massena Massena USA Operational Aluminium 135 Wenatchee Wenatchee USA Operational Aluminium 143 Ferndale Ferndale USA Operational Aluminium 239 10 Warrick operations Evansville USA Operational Aluminium 270 Maniitsoq/Simisut Maniitsoq Greenland Unknown Aluminium 340

Source: Roskill Pangaea database 1 - An estimated 420ktpy of capacity at the Kwinana refinery serves the non-metallurgical market 2 - Alcoa has 18.2% interest in Mineração Rio do Norte (MRN) through Alcoa Aluminio S.A, 8.6%, Alcoa World Alumina and Chemicals (AWAC), 5% and Alcoa AWA Brasil, 4.6% 3 - Alcoa share in Halco is 45% 4 - An estimated 1.1Mtpy of capacity at the San Ciprián refinery serves the non-metallurgical market 5 - Paranam refinery idled on 30 November 2015 6 - Kabata in Guinea is jointly owned by AWAC and Rio Tinto Alcan 7 - Point Comfort has a nameplate capacity of 2.3Mtpy, although by Q2 of 2016 Alcoa will curtail the remaining 810kt of capacity 8 - Alcoa Aluminio S.A’s Pocos de Caldas refinery is operating at 45% of nameplate capacity 9 - Alcoa has a 25.1% share in the Ma’aden Bauxite and Alumina Company through its subsidiary Alcoa Saudi Smelting Inversiones 10 - Warrick operations to be closed by end of Q1 2016

13.1.1 Alcoa of Australia (AofA)

Alcoa of Australia (AofA) is part of Alcoa World Alumina and Chemicals (AWAC). AofA is an integrated player engaged in bauxite mining, alumina refining, and aluminium smelting.

The company is a key producer, accounting for almost 35% of Australia’s alumina with capacity in 2014 representing just under 9Mt of alumina. Capacity for aluminium production in 2014 is 358kt.

Production of bauxite by Alcoa of Australia has increased from 29Mt in 2000 to over 31.4Mt in 2014. The company operates two very large bauxite mines, Huntly and Willowdale, in the Darling Range area, south of Perth, Western Australia. With Al2O3 grades of 30% to 35%, Darling Range bauxite is among the lowest mined grade in the world. However, the high gibbsite content and low silica levels make it highly economic, particularly in the volumes produced by Alcoa. The Darling Range lease covers 7,000km2 extending from Perth southwards to Collie and westwards to the Darling scarp.

Mines in the Darling Range have combined Proven and Probable reserves totalling 161Mt, averaging

32.5% available Al2O3 with a cut-off grade of 27.5%. The special agreement, under which the reserves are held, is due for renewal in 2045.

The Huntly mine, established in the early 1970s, is Alcoa’s largest bauxite mine with an estimated capacity of 23Mtpy of crude ore. It supplies bauxite by overland conveyor to the Pinjarra refinery. Some of the bauxite is then transferred by rail to the Kwinana refinery, all in a continuous 24-hour operation.

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The Willowdale mine, established in 1984, produces about 10Mtpy of bauxite, which is shipped by overland conveyor to the nearby Wagerup refinery. The ore type and grades are similar to those produced at Huntly.

Production at the mines is by open cut methods with extraction by front-end loaders onto dump trucks. The deposits have about 0.5m of topsoil, which is removed and kept for later rehabilitation, underlain by cemented cap rock that has to be blasted so that it can be removed with the friable material below. Considerable effort goes into reducing blast noise, and bulldozers are used to rip the cap rock in areas where blasting is not acceptable. Dump trucks feed crushers and two stage conveyor systems take the output to the refineries.

Alcoa of Australia operates three alumina refineries. Pinjarra, the company’s largest refinery, which started production in 1972, treats bauxite from Huntly carried by a 23.4km long conveyor belt. The capacity of the conveyor belt system between Huntly and Pinjarra is 5,400tph.

Kwinana treats Huntly and Willowdale bauxite, some of which is first stockpiled at Pinjarra. There is some blending of alumina from Pinjarra and Kwinana, before shipment either to Alcoa’s Portland aluminium smelter in Victoria and previously to the now-closed Point Henry smelter, or overseas.

Kwinana is the only refinery operated by Alcoa of Australia producing non-metallurgical alumina which is covered in more detail in the sister report, Roskill’s Non-Metallurgical Bauxite & Alumina.

The Wagerup refinery, which treats bauxite from Willowdale, is the most modern of the three operated by Alcoa of Australia. The plant has been enlarged a number of times since its opening in 1984.

Production capacity today is 2.56Mtpy. In 2004 Alcoa proposed an expansion to 4.7Mtpy, and a prefeasibility study was underway in 2007, after which engineering and implementation was planned. The expansion was then put on hold, and in May 2012 the company was granted a 5 year extension on the plans to expand the refinery. Senior executives from Alcoa in 2015 have been continuing the case to see capacity doubled at the refinery, by gaining a second extension to a Western Australia Government environmental approval. The Wagerup refinery has a handling and storage facility at the nearby port of Bunbury.

13.1.2 Point Comfort

The Point Comfort plant in Texas is Alcoa’s only alumina refinery in the USA. The plant, owned by AWAC, is located 125km south of Houston on Port Lavaca Bay and is connected with the Gulf of Mexico by a 35km channel. The refinery has a nameplate capacity of 2.3Mtpy. Bauxite comes mainly from Sangarédi in Guinea, and most of the alumina is sold to Alcoa smelter’s in the USA, but some non-metallurgical grade alumina is also produced.

The company announced on 7 January 2016, that it would curtail the remaining 810kt of refining capacity at the Point Comfort refinery as part of efforts to improve the cost profile of its upstream business.

13.1.3 Juruti

Bauxite mining at Juruti is carried out by Alcoa World Alumina Brazil (AWAB), which is a subsidiary of AWAC. In 2009, AWAC completed the development of the Juruti bauxite mine, in the state of Para in northern Brazil. In 2010, the company bought its bauxite mine on the Capiranga plateau on stream, some 50km from the town of Juruti.

Total investment in the mine and its infrastructure has amounted to US$2Bn. Production in 2014 was an estimated 3.6Mt and Proven reserves at the mine are 26Mt. Bauxite from Juruti is shipped to the Alumar refinery in San Luis. Concessions at Juruti will last until 2100 depending on actual and future needs.

Juruti: Production (t)

Source: Company information and Roskill estimates

Juruti: Resources and reserves

Gross (kt) Al2O3 (%) Al2O3 (kt) Proven 26,000 47.8 12,428 Probable 7,800 47.8 3,728 Total reserves 33,800 47.8 16,156 Source: Company information

13.1.4 Sangarédi

Alcoa World Alumina and Chemicals owns a 45% interest in Halco Mining Consortium, which is the main shareholder of Compagnie des Bauxites de Guinée (CBG), operator of the Sangarédi bauxite mine in Guinea. See the profile for Halco Mining Consortium for more details.

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13.1.5 Trombetas

Alcoa has an 18.2% interest in Mineração Rio do Norte (MRN) (operator of the Trombetas bauxite mine), through Alcoa Aluminio S.A, 8.6%, Alcoa World Alumina and Chemicals (AWAC), 5% and Alcoa AWA Brasil, 4.6%. See the profile for Mineração Rio do Norte for more details.

13.1.6 Alúmina Española (AESA)

Alúmina Española is a wholly-owned part of the AWAC group of companies. Located between the Cervo and Xove municipalities, the San Ciprián facility comprises of an alumina plant and a primary aluminium operation. The bauxite ore arrives at the San Ciprián harbour, mainly from Alcoa’s share in the Sangarédi mine in Guinea.

The alumina refinery produces smelter-grade alumina, calcined alumina and aluminium hydrate from bauxite. In 2014, the San Ciprián complex had capacity to produce 1.5Mtpy of alumina and 228ktpy of primary aluminium as ingots for casting, billets for extrusion, and sheets for lamination. Two-thirds of alumina output serves the non-metallurgical market and the rest is used for primary aluminium production.

Map of Alúmina Española operations

Source: Bing; Roskill Pangaea database; Notes: Lighter colour indicates approximate location

13.1.7 Suriname Aluminium Company (SURALCO)

Production of both bauxite and alumina in Suriname has been in the hands of Suriname Aluminium Company (SURALCO), which is part of Alcoa World Alumina and Chemicals (AWAC) group.

In July 2009, Alcoa acquired BHP Billiton’s Surinamese bauxite and alumina subsidiary which was formerly a 45% partner with Suralco in the joint ventures. This shareholding is now held by Alcoa Minerals of Suriname (AMS), which is wholly-owned by AWA LLC, which is part of the AWAC group of companies. Suralco owns the remaining 55% of the joint venture.

The company operates bauxite mines and one alumina refinery at Paranam. The bauxite mines are in the Onverdacht and Coermotibo areas of the country, where the company has mining rights, which extend until 2033.

Alcoa has been in discussions with the Government of Suriname since October 2014 to come to a joint solution for Suralco, including addressing its dwindling bauxite reserves and lack of a long-term energy solution. Following these discussions, the government decided to sustain the bauxite industry in Suriname. Both Alcoa and the local government announced their intentions to form a transaction where Suralco and its mining, refining and hydroelectric operations, would be purchased by a Government-owned entity. An initial target of 1st July 2015 however, was not met. Alcoa decided not to develop a mine at the Nassau Plateau based on current refinery cost and market conditions.

13.1.8 Paranam

The Paranam refinery has supplied alumina from Suriname to Alcoa facilities, mainly in the USA, Canada and Norway.

In April 2015, the result of declining bauxite reserves, Alcoa curtailed almost 443kt of alumina refining capacity at Paranam. Following this, in September of the same year, Alcoa revealed plans to cut the remaining 887ktpy of refining capacity at the facility and the refinery was idled by 30th November 2015.

The Paranam alumina refinery with a nameplate capacity of 2.2Mtpy is associated with the Afobaka 100MW hydroelectric facility, also operated by Alcoa.

13.1.9 Coermotibo and Onverdacht

Coermotibo and Onverdacht mines are located in northeast Suriname. Combined production from the two mines was 2.7Mt in 2014.

Coermotibo: Resources and reserves

Gross (kt) Al2O3 (%) Al2O3 (kt) Proven reserves 2,600 39.1 1,016.6

Source: Company information

Onverdacht: Resources and reserves

Gross (kt) Al2O3 (%) Al2O3 (kt) Proven 700 51.8 362,6 Probable 3,100 51.8 1,605.8 Total reserves 3,800 51.8 1,968.4

Source: Company information

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13.1.10 Alcoa Aluminio S.A

Alcoa Aluminio S.A is a wholly-owned subsidiary of Alcoa in Brazil. In addition to its interests in Mineração Rio do Norte (MRN) operating the Trombetas mine, Aluminio operates a bauxite mine and alumina refinery in Pocos de Caldas in Minas Gerais State. The mine which produces both metallurgical and non-metallurgical grades produced 0.5Mt of bauxite in 2014 and the refinery has a nameplate capacity of 390ktpy. Due to the company’s decision to shut the aluminium smelter at Pocos de Caldas, alumina output has been reduced and the refinery is now operating at a level of 45% of capacity.

13.1.11 São Luís refinery (Alumar)

Alumar is a consortium between Alcoa World Alumina Brazil (AWAB) (39%), South32 (36%), Alcoa Aluminio S.A (15%) and Rio Tinto Alcan (10%). Established in 1984, the company operates an alumina refinery and previously, an aluminium smelter at Sao Luis, Maranhao in the north-west of Brazil. The refinery has a nameplate capacity of 3.64Mtpy, which was reached after a 2.1Mtpy expansion had been completed in 2009 with a total investment of US$1.2Bn. Alumina production in 2014 was 3.64Mt, up on the 2013 output of 3.43Mt.

São Luís refinery: Alumina production (t)

Source: Company information and Roskill estimates