Today Alcoa announce that the smelter at Ma’aden-Alcoa joint venture has stopped production on one of two potlines due to instability. The restoration of the pipeline is expected to be completed during the first half of next year. The second potline is in the ramp up phase and will be accelerated. The alumina is converted to metallic aluminum in a chemical reaction during the smelting process with an electric current processed through long rows of reduction pots called potlines. The mine, refinery and rolling mill of the joint venture project remain intact and on schedule. Alcoa does not expect any impact to be felt by their customers.
Alcoa entered the joint venture project at the end of 2009 with Saudi Arabian mining company Ma’aden to build the largest aluminum facility in the Middle East and be Alcoa’s lowest costing facility. The facility uses integration and lowered energy costs to get a mechanical and capital advantage. Alcoa owns 25.1 percent of the joint venture project through investing $10.8 billion, and Ma’aden owns 74.9 percent. The facility integrates the aluminum process through combining the mine, refinery, smelt and rolling mills into one facility. The first hot metal was poured in December of 2012.
“The project is a platform for growth: Alcoa’s commitment and capability is demonstrating alignment with the Kingdom's development goal of adding minerals and metals as the third pillar of the country’s economy alongside hydrocarbons and petrochemicals. Alcoa’s capacity to participate in and support the development of this third pillar is earning opportunities for Alcoa to participate in future growth initiatives within the Kingdom.” www.alcoa.com/maaden
Alcoa (NYSE:AA) has a slight decline in their year to year comparison for 2012 to 2013. The average closing stock price in the first through fourth quarters of 2012 were 10.12, 9.09, 8.71 and 8.63. The average closing stock price of the first through third quarters of 2013 were 8.8, 8.3 and 8.04. In the second week of the fourth quarter of 2013, the average closing stock price is 8.17. The stock seems to be consistent with peaking in the first and second quarter.
Check out the video featuring Jim Kramer and data to watch is Alcoa's earning report.
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