Alcoa Inc. (AA) signed a Memorandum of Understanding (MoU) with China Development Bank (CDB) to collaborate on an array of aluminum and related projects both in China and abroad.
As per the agreement, Alcoa will focus on partnering with the Chinese companies on global expansion projects and developing China's domestic aluminum industry.
Alcoa's MoU with the CDB will support Alcoa's expansion around the world through knowledge sharing and potential financing support. Alcoa and CDB will work together to identify potential partners and projects in and outside China.
Alcoa also announced the expiration and final results of its Tender Offer to purchase for cash any and all of its 5.375% Notes due 2013, and its Maximum Tender Offer to purchase up to $400 million in cash of its 6.00% Notes due 2013.
Recently, Alcoa announced it has beaten its carbon reduction goal a decade early. According to the company’s 2010 sustainability report, the company cut its greenhouse gas emissions to 22% below 2005 levels, exceeding a 2020 goal of a 20% reduction. Alcoa lowered its 2010 carbon intensity to 7% below 2009 levels, driven by the energy efficiency improvements, repositioning of operations to take advantage of hydroelectric power, and other changes.
According to the report, Alcoa was also the first company to receive silver-level Cradle to Cradle Certification for primary aluminum. The results are part of the company’s long-term approach to sustainability.
Alcoa, a Pennsylvania-based corporation, is among the world’s leading producers of primary and fabricated aluminum and alumina. It involves the technology of mining, refining, smelting, fabricating and recycling of aluminum. We believe that Alcoa’s cost reduction efforts are, to some extent, offsetting the negative impact of higher energy and raw material costs on profitability.
The company is divesting underperforming assets through its restructuring program. The annual global consumption of aluminum products, both upstream and downstream, is expected to double over the next 15 years. This consumption boom will be driven primarily by growth in China, India, Russia and Brazil, whose demographics are accelerating development.
Alcoa faces stiff competition from Aluminum Corporation Of China Limited (ACH), Rio Tinto Plc. (RIO) and BHP Billiton Ltd. (BHP).
Currently, Alcoa has a short-term (1 to 3 months) Zacks #3 Hold rating and a long-term (6 months) Neutral recommendation.
ALCOA INC (AA): Free Stock Analysis Report
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