Alcoa World Alumina LLC to Pay $223M in Bahrain Case

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Matters have been resolved. Alcoa Inc. announced today “the resolution of the investigations by the U.S. Department of Justice (DOJ) and U.S. Securities and Exchange Commission (SEC) regarding certain legacy alumina contracts with Aluminium Bahrain B.S.C. (Alba),” reports The Wall Street Journal.

“The settlement with the DOJ was reached with Alcoa World Alumina LLC (AWA). AWA is a company within Alcoa World Alumina and Chemicals (AWAC), the unincorporated bauxite mining and alumina refining venture between Alcoa Inc. and Alumina Limited.”

“As part of the DOJ resolution, subject to final court approval later today, AWA will pay a total of $223 million, including a fine of $209 million payable in five equal installments over four years. The first installment of $41.8 million, plus a one-time administrative forfeiture of $14 million, will be paid in the first quarter of 2014, and the remaining installments of $41.8 million each will be paid in the first quarters of 2015-2018. The $223 million amount is within the range previously disclosed by Alcoa Inc. During the second quarter of 2013, Alcoa recorded a $103 million charge ($62 million after non-controlling interest) for the DOJ investigation.”

In metal price news for aluminum…

Following a two-day decline on the LME, the 3-month price of aluminum climbed up 1.1 percent to end at $1,780 per metric ton on Wednesday, January 8. Following a two-day drop, the cash price of primary aluminum increased by 0.9 percent on the LME to $1,733 per metric ton. The cash price of primary Indian aluminum saw little price change on Wednesday.

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Chinese aluminum prices were mixed for the day. The cash price of Chinese aluminum reached a 30-day low after decreasing 0.6 percent. Chinese aluminum scrap closed 0.2 percent lower. For the fifth day in a row, the price of Chinese aluminum billet remained essentially flat. The price of Chinese aluminum bar saw essentially no change for the fifth day in a row.