Alcoa increases stake in Alba

The government of Bahrain and Alcoa today signed a memorandum of understanding that paves the way for Alcoa to acquire up to 26 percent in aluminium smelters, Alba.

The government of the Kingdom of Bahrain and Alcoa (AA) today signed a memorandum of understanding (MOU). The MOU paves the way for Alcoa to acquire up to a 26 percent equity stake in Alba, a Bahrain company that owns and operates a 512,000 metric tons per year (mtpy) aluminium smelter, and covers a long-term alumina supply arrangement for the Alba smelter.

‘This MOU provides growth opportunities both for Alcoa and Alba and ensures the continuous supply of high quality alumina, the main raw material used in the production of aluminium,’ said the Bahrain Minister of Oil and Chairman of the Alba board of directors, His Excellency Shaikh Isa bin Ali Al Khalifa.

‘The Government of Bahrain’s plans and objectives include attracting inward investment to the Kingdom and we believe that having Alcoa as a business partner is a significant step in this direction,’ added Shaikh Isa bin Ali Al Khalifa.

The four-potline Alba smelter is said to be one of the world’s lowest cost facilities, serving markets in the Mid-East and Asia. Alba is currently adding a fifth line which, when completed in 2005, will bring its overall capacity to 819,000 mtpy and make it the largest aluminium smelter in the world outside Eastern Europe. The MOU is designed to accelerate plans for an additional expansion, a sixth line with 307,000 mtpy of additional capacity.

Final agreements on the equity stake in the smelter and the alumina supply arrangements are expected to be concluded by mid-2004. The agreements will become effective upon completion of the fifth pot-line in March of 2005.

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