Alcoa Invest in Mining Giant

Alcoa today announced it is exiting the Shining Prospect special purpose vehicle formed together with Chinalco to purchase shares in Rio Tinto plc. Alcoa will receive a total of $1.021 billion in cash payable in three installments over a six-month period ending July 31, 2009. Alcoa also will receive its pro rata portion of dividends paid by Rio Tinto to date since the investment was made as and when recovered by Shining Prospect.

This transaction will improve Alcoa’s cash position and result in a positive impact on the Company’s debt-to-capital ratio. The Company will record a non-cash after-tax loss of approximately $120 million on the investment in the first quarter of 2009.

“This transaction, combined with our intention to explore opportunities to expand our commercial relationship, strengthens Alcoa’s ability to weather the economic downturn,” said Klaus Kleinfeld, Alcoa President and CEO. “When the global economy recovers, the pent-up consumer and industrial demand will create a broad array of opportunities in both developed and developing regions for Chinalco and Alcoa.”