Sep 16 2009
As part of Alcoa’s (NYSE:AA) ongoing effort to continually move its global primary products operations down the cost curve, Alcoa today commissioned the opening of its new bauxite operations in Juruti, Brazil. The Juruti operations, which are part of the Alcoa World Alumina and Chemicals (AWAC) joint venture with Alumina Limited in which Alcoa holds a 60 percent share, consist of a port facility, a mine and a 50 kilometer rail system to the port. Initial output at the mine will ramp up to 2.6 million metric tons per year (mtpy).
Bauxite from Juruti will be shipped to the Alumar alumina refinery in Sao Luis, Brazil which is undergoing a 2.1 million mtpy expansion program that will bring total production there to 3.5 million mtpy. Following the expansion, Alcoa Aluminio and AWAC combined hold a 54 percent share of the refinery. The remaining share is held by BHP Billiton (36 percent) and Rio Tinto Alcan (10 percent). The Alcoa share of the combined investment for the two Brazil initiatives is approximately US$2.2 billion and will place Alcoa’s overall manufacturing system in the top quartile on the global cost curve in terms of low-cost production. The refinery expansion is on-schedule for commissioning later this fall.
“We have taken steps to make the Juruti project the best mining project in the world…world-class in terms of efficiency and our commitment to sustainable development principles,” said Franklin Feder, President of Alcoa Latin America. “This mine will serve our operations in Brazil and lower our costs. At the same time we will mine bauxite and return the area to the same, if not better, condition than when we initially arrived. Our commitment is to deliver on both the business efficiency and the stewardship of the region.”
The Juruti Project will mine – and re-vegetate – a total of 6,000 hectares over a period of 40-60 years. That’s equivalent to one day’s worth of the current deforestation in the Amazon according to the latest data published by Brazil’s Ministry of the Environment. Recognizing that no permanent deforestation is acceptable, Alcoa has already been working with NGO’s and re-forestation experts for years to ensure that the mined-out areas will be totally re-vegetated with native species. For every Brazil nut tree removed during the mining process, Alcoa will replant 10 trees. And for every other species of tree impacted during the process, Alcoa will replant 2 trees for each tree removed. In total, Alcoa estimates it will plant 15 million trees over the next 50 years in the Juruti region.