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Alcoa denies Brazilian aluminum production stoppage reports
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Friday, 16 Nov 2012
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BNamericas reported that US based aluminum giant Alcoa has denied Brazilian press reports that it has stopped producing aluminum at its plant in the municipality of Poços de Caldas in Minas Gerais state.

According to local magazine Veja, Alcoa has become self sufficient in electricity and noticed that it could earn a lot more by stopping aluminum production and selling its energy surplus. Energy prices in the Brazilian spot market increased by 410% in the last twelve months.

However, the company said in a statement that it is still producing aluminum in Poços de Caldas and total output in the first10 months of the year reached 78,000 tonnes.

Alcoa is not self-sufficient in electricity production. We generate 70% of our power supply needs and the remaining 30% is acquired through a long term contract with a power utility. Also, the company reaffirmed aluminum production as its core business. Only its power surpluses are negotiated on the open market.

Mr Franklin Feder CEO for the Latin American and Caribbean region said that energy represents about 50% of primary aluminum production costs in Brazil due to the ICMS interstate sales tax.

Alcoa recently announced that it is curtailing 390,000 tonnes of alumina refining capacity to improve its competitive position and reflect updated internal demand following smelting cutbacks announced earlier this year.

In Latin America and the Caribbean, Alcoa has assets in Chile, Peru, Argentina, Colombia, Jamaica, Suriname, Trinidad & Tobago and Brazil, the last of which represents the bulk of its earnings in the region.

Source - Business News Americas

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