Alcoa of Australia and Alumina have settled a dispute over their Western Australia-focused joint venture, which will pave the way for Alcoa to proceed with a split of its global operations.
Alcoa of Australia and Alumina have settled a dispute over their Western Australia-focused joint venture, which will pave the way for Alcoa to proceed with a split of its global operations.
In a joint statement today, the two companies said they had agreed to make changes to the Alcoa World Alumina and Chemicals joint venture, which operates three alumina refineries and two bauxite mines in WA, that will enhance value for both parties and their respective shareholders.
“In general, the changes to the joint venture agreements are intended to align more closely the partners’ interests in AWAC, while establishing greater strategic flexibility and autonomy for both partners,” the companies said in the statement.
“Certain changes will be made to the governance and financial policies of the joint venture, intended to enhance the cooperation between the shareholders.
“These changes will promote faster decision making, joint input on significant decisions, improved information sharing and a more streamlined process for resolving disputes.”
The agreement has also seen the two companies terminate their litigation in a US court, which will allow Alcoa to proceed with separating its operations into two independent, publicly traded companies.
This separation is expected to take place before the end of the year.
Alcoa president of global primary products (and future chief executive of Alcoa Corporation), Roy Harvey, said the changes created a true win-win situation and would enhance value for the AWAC joint venture, the future of Alcoa and its shareholders.
“We are strengthening our partnership agreement and more closely aligning the partners’ interests,” he said.
“Among other benefits, this opens the door for an industrial partner to enter the joint venture, and like Alcoa, to become a long term customer for bauxite and alumina.”
Alumina chief executive Peter Wasow said the joint venture agreements had been refreshed to reflect the new realities of the two companies’ industry, as well as their individual circumstances.
“These agreements strengthen the AWAC joint venture for Alcoa and Alumina, giving the companies greater control over their investments and future strategic options,” he said.
Alcoa owns a 60 per cent stake in AWAC, with Alumina holding the remaining 40 per cent interest.
