The Portland Aluminium Smelter ("PAS") is an unincorporated joint venture established in July 1984. The current participants are: Alcoa of Australia Limited 55.0% Marubeni Aluminium Australia Pty Limited 22.5% CITIC Nominees Pty Limited 22.5%

Each participant is represented on the PAS joint venture participant management committee. Each of them is entitled to its proportionate share of aluminium production, and is responsible for its own marketing and sale of aluminium. PAS is located at Point Danger, 5 km south of Portland in Western Victoria, Australia. It is managed by Alcoa Portland Aluminium Limited, a wholly-owned subsidiary of Alcoa, on behalf of the participants of PAS. PAS employs over 600 people, generates over A$700 million in sales each year and represents a total investment of A$1,500 million. It is now one of the largest and most efficient aluminium smelting operations in the world. The smelting and emission control technologies used were developed by Alcoa, and are among the most efficient in the world. It enjoys an excellent environment protection record and harmonious industrial relations.

Production at PAS commenced in late 1986, with the second potline coming on line in March 1988 and bringing the total number of pots to 408. By 1990, innovations and improvements had increased its capacity from a designed capacity of 300,000 tonnes p.a. to 320,000 tonnes p.a. Subsequent operational improvements have further increased its annual nameplate production capacity to in excess of 345,000 tonnes of high-quality primary aluminium ingot per annum. Virtually all production is exported. PAS sources all of its alumina requirements from Alcoa's Kwinana, Pinjarra and Wagerup refineries in Western Australia. Each participant has its own alumina supply agreement with Alcoa. The alumina is shipped from Western Australia to Portland port via its own vessel, the MV Portland. The alumina is unloaded at the port using a vacuum unloading system, and transported by a 4.5 km enclosed conveyor to PAS. Petroleum coke, which is used in the production of consumable carbon anodes that are essential to the smelting process, is imported from the United States and is also unloaded by the vacuum system.

PAS has adopted a vigorous programme to protect the environment. As a result, it is one of the cleanest and most efficient smelters in the world. It is developing innovative technology to process its spent pot lining which enables it to turn hazardous waste from the smelting process into harmless slag that can be used in the road making and construction industries. It has also achieved a reduction in solid general waste from more than 1,100 cubic metres per month in 1989 to less than 2 cubic metres per month today. The Company's share of production from its 22.5% interest in PAS is around 78,000 tonnes of primary aluminium ingot each year, which it exports to key customers in the Asia Pacific region, including China, Japan and South Korea and other countries. All sales are made via its exclusive sales agent, CITIC Australia Commodity Trading Pty Limited, a wholly-owned subsidiary of CITIC Australia Trading Limited. On 1 March 2010, a new base load electricity contract (the “EHA”) was signed with Loy Yang Power to secure the supply of electricity to the Portland Aluminium Smelter from 2016 to 2036. The EHA effectively allows the Portland Aluminium Smelter to secure electricity supply when the electricity supply agreement expires in 2016. The pricing mechanism used in the EHA includes a component that is subject to certain escalation factors which, in turn, are affected by the consumer price index, producer price index and labour costs.

Updated: 23 Apr 2010