Alcoa has announced that its Brazilian 100 percent equity owned subsidiary, Alcoa Aluminio S.A., will begin expanding capacity at its Sao Luis (Alumar) aluminum smelter immediately.

Aluminio will expand its share of the smelting operations in Sao Luis by 30 percent, or 63,000 metric tons per year (mtpy), with an investment of US$ 130 million, bringing Alcoa Aluminio's share of smelting capacity there to 262,000 metric tons per year (mtpy). Construction of the expansion will begin immediately, with production expected to begin in the third quarter of 2005.

The Alumar facility is a non-incorporated joint venture, with BHP Billiton. Upon completion of this expansion, total smelting capacity at the Alumar consortium will increase from 370,000 mtpy to 433,000 mtpy.

The alumina expansion calls for a retrofit of the existing unit and the addition of a second, state-of-the-art unit at the refinery. Upon completion, the facility's capacity will be 3.3 million mtpy. Assuming successful approval processes with government environmental and others agencies a decision to move forward with the proposed $680 million project is expected to be made in the second half of 2004. It is expected the project will be completed by early 2007.