1. 1 Energy Efficiency Program ALCOA LATIN AMERICA & CARIBBEAN U.S.& Brazil Industrial Energy Efficiency Workshop, Petrópolis RJ Brazil – August 2011

2. 2 I.ALCOA Profile II.ALCOA Global Energy Intensity and GHG Strategy III.Global Energy Efficiency Strategy IV.Deployment Strategy in Latin America V.Initial Results VI.Projects in Development VII.Learning Process VIII.Next Steps Agenda

3. 3 Aluminum Cycle RefineryRefinery SmelterSmelter PrimaryMetalPrimaryMetal Transfor- mation Rehabilitation of mined areas Bauxite mine Custumers TransportationTransportationPackagingPackaging B&CB&C IndustrialIndustrial ElectricityElectricity Recycling Electrical Energy Energy Hydro Power

4. Alcoa is a Global Company – Operating Locations Bauxite, Alumina and Chemicals Primary Aluminum Fabricated Aluminum Products Packaging and Consumer Products Castings and related Products Related Products xxx locations xxx Employees xxx Countries 4

5. Aluminum has a vast application 5 “MINHA CASA, MINHA VIDA” PROGRAM BUILDING & CONSTRUCTION PACKING MATERIAL HIGH SPEED TRAIN TRANSPORTATION

6. Aluminum is an electro-intensive process 6

7. I.ALCOA Profile II.ALCOA Global Energy Intensity III.Global Energy Efficiency Strategy IV.Deployment Strategy in Latin America V.Initial Results VI.Projects in Development VII.Learning Process VIII.Next Steps 7

8. Leadership Commitment in Energy Efficiency Video with Rick Bowen President of Energy 8

9. Energy Intensity 2020/2030 Goals 9

10. I.ALCOA Profile II.ALCOA Global Energy Intensity and GHG Strategy III.Global Energy Efficiency Strategy IV.Deployment Strategy in Latin America V.Initial Results VI.Projects in Development VII.Learning Process VIII.Next Steps 10

11. Rick Bowen President, Energy Richard Notte Director Energy Services Global Energy Resources Global Energy Resources Simon Baker – Europe Richard Lamarche – Canada Tommy Hodges – Rockdale Ricardo Sayao – Latin America Paulo Miotto – Latin America Paulo Miotto – Latin America Energy Efficiency Manager Energy Efficiency Manager Mike Shaw - Australia Marc Pereira Vice President, Energy & Carbon Strategy Jim Nixon Vice President, Marketing & Trade Individual Asset Management US Hydro Anglesea Plant Dampier Bunbury Pipeline Warwick Power Plant Individual Asset Management US Hydro Anglesea Plant Dampier Bunbury Pipeline Warwick Power Plant Micheal Padgett Finance Lisa Schoch Human Resources Legal Max Laun US Jose Camino Europe Walt Brockway Manager - Global Energy Efficiency Mike Caufield Energy Specialist Greg Harrell Energy Specialist Global Energy Group 11

12. Direction Sponsors Coordinators Leaders Executors Corporate Management Business Unit Management Plant Management Department Level Management Regional SPA’s Business SPA’s Plant Energy SPA’s Provide Directions Set Targets Drive Actions Assess needs Coordinate Locations Interface with Business Identify Opportunities Engage Employees Carry out Actions Roles and Responsibilities 12

13. Year 2002 2006 - 2008 2003 - 2006 2009 We became focused on Energy Efficiency Assessments at Tenn and Warrick Assessments performed At many locations Best practice sharing (BEEPS) Initial summit in Pittsburgh Summit at Kofem EMP team formed Canada team formed AWA team formed Assessments at Massena and PTC Training was provided Consultants were identified Regional and business programs matured Some assessment work with DOE continued EMP continued assessments Canada grew the energy team AWA became more focused EPS and GRP became focused Global energy team formed SRT - ENR Corporate energy meeting - Pittsburgh Energy Efficiency Journey 13

14. Year 2010 Re-aligned with DOE Energy efficiency role Communications  Global energy efficiency team  Sharepoint site  Case studies  Benchmarking Execution Assessments Training / resources Tools Capital solutions Organization Efficiency organization has been established Reconnected with energy consultants Identified new consulting resources Collaboration with other internal resource groups Management Prepared presentations for business unit management and EC Assisting with energy metric development Benchmarking of other industries 3 year plan Appointed to ISO 50001 technical advisory group Awards and recognition Certification Recent Activities 14

15. 2011 Communications  Employee awareness and engagement  Expanded global team  Enhanced sharepoint  International benchmarking  Energy summit Execution Continue refinement of assessment process Facilitate assessments as requested Deploy best practices Develop additional best practices Current energy project list Assist with obtaining capital funds Organization Additional Alcoa resources Expand consultant network Identify SPA’s Management Clear BU / Regional sponsorship Energy reporting at business level connection with sustainability enhanced Location energy teams Awards and recognition Activities in Progress 15

16. I.ALCOA Profile II.ALCOA Global Energy Intensity and GHG Strategy III.Global Energy Efficiency Strategy IV.Deployment Strategy in Latin America V.Initial Results VI.Projects in Development VII.Learning Process VIII.Next Steps 16

17. 12 steps are considered key for success 1.Commitment from the highest leadership 2.Plant management involvement 3.Steering and tactical teams. 4.SPA for each plant. 5.Communication with the plants 6.Schedule alignment with the global team and the plant staff. 7.Best technical resources internally and externally. 8.Employee participation 9.Pilot assessment 10.Adequate time (approximately 3 months) for the entire assessment process 11.Develop an action plan for implementation 12.Create a capital budget Program Development Strategy 17

18. 1.Obtain support and commitment from the highest leadership Guarantees of commitment from the presidents of the region and the energy group Support contemplates forecasted expenses (previously approved jointly with each plant) This commitment was recorded and sent by email to all plant managers Cycle of identification/implementation/communication is guaranteed by informing the results and the project status to the leadership quarterly 18

19. 2.Involve plant management in the development of the program Discuss with plant managers what processes would be assessed – assurance of clear and appropriate interface with core processes and global technical teams Avoid duplicating work by interacting with technical groups Program was perceived as a technical support instead of “audit” After the format of the program was revealed, many plant managers demonstrated interest in having some processes assessed by the energy team 19

20. 3.Form specific steering and tactical teams Steering team was formed with plant managers and energy members, responsible for: defining the strategies and goals of the program evaluate assessment results establish budgets to implement projects Tactical team formed with representatives of each plant, responsible for: carrying out the steering team’s directions preparing the assessments including participants, resources and logistic issues assessment action plan preparation follow-up of the implementation process 20

21. 4.Appoint an SPA for each plant SPA perceived as the “face of energy” in the plant Responsible for making the assessment happen Key factor for engaging plant’s people Usually appointed by the plant manager, but does not necessarily represent the most engaged person on energy issues (attention to detect the actual SPA) 21

22. 5.Ensure good communication with the plants Communication was key to engaging all of the organization in the program The communication team was involved formally, who is responsible for all channels of collective information inside Alcoa, to develop a strategy for communicating the program The team suggested creating a mascot in order to symbolize the program and help to convey the concepts and targets A campaign centered on the mascots Energildo and Porconômico were created to represent a person who seeks opportunities and another one who saves the money 22

23. 5.Ensure good communication with the plants In conjunction, other ways of communication were utilized: A summary article in the newspaper Gente em Ação was circulated in all locations and sent to employees’ homes. The Letter of the President was used to send a message to all employees of how vital the program was. 23

24. 6.Discuss the schedule with the global team and the plant staff The assessment was scheduled not to conflict with other events close or during the assessment that might distract personnel from focusing on the assessment. 24

25. 7.Determine the availability of the best technical resources Choice of the consultants is crucial for the success of the assessment: Should be experienced, proven and recommended Includes people worldwide – Alcoans or contractors Expectations must be clear and objective The need for consultants was determined considering the main processes of the Alcoa plants in Latin America to include: Compressed air Cooling, water and tower systems Process heating Steam Electrical motors Electrical systems Metrics and measurements Combustion systems 25

26. 8.Develop a channel to allow 100% employee participation Employee participation should be required from the top floor to the shop floor In Brazil, it was utilized the existing Program of Suggestions to engage people in the identification of opportunities for energy reduction in the plants, where employees can give suggestions solve some problem or improve some process while earning a prize when the suggestion is approved and implemented This allows engaging the most hands-on personnel and strengthening the energy efficiency culture. 26

27. 9.Utilize a pilot assessment to demonstrate the results While the initial assessment estimate was to find a 10% energy reduction through potential projects, a pilot assessment was used to verify the estimate and reinforce the cost-benefit relationship before announcing the program to all locations. São Luis Smelter was chosen as the pilot due to its size, potential energy savings, employee energy awareness, and technical expertise (these people could assist at assessments at other locations). Staffing is summarized below: The event identified about US$ 5.3 million in potential projects with average payback of 1.2 years.This value represented about 9.9% of the total energy consumed in the areas that were assessed. 27

28. 9.Utilize a pilot assessment to demonstrate the results Example of opportunity identified during the assessment at São Luis: The possibility of changing from throttling control to inlet guide vanes in order to improve energy efficiency in the reactor of line 1. It was converted in DI (# 52353) 28

29. 10.Allow adequate time for the entire assessment process While planning takes about one month, the assessment process itself takes about two months, including the pre-work and the report preparation periods. During the pre-work, it is very important to gather information from the processes that will be assessed such as process flow, product flow, energy schemes and diagrams, energy consumption data, and rates for electricity, gas and fuels. 29

30. 10.Allow adequate time for the entire assessment process The week starts with some general presentations covering the energy market in the region and then a specific presentation that explains the program and the format for the work that will be conducted. Management should participate in this initial meeting in order to have the opportunity to express their for the endeavor. 30

31. 11.Develop an action plan for implementation Action plan to promote implementation is crucial to capturing projected savings. Funding should be lined up early in the process to facilitate implementation and validate the overall energy program. A workshop was organized at each plant in the end of each assessment to discuss the opportunities, validate the recommendations, and define what actions would be required for implementation. Interaction with the Capex team during the workshop is very important. Blitzes and RFA’s was addressed after the projects were defined. An effort was made to view all projects as part of the overall energy efficiency program rather than stand-alone initiatives. The plant SPA was critical during this process. Some projects were converted into DI’s status 2 or 3. DI’s were very useful in engaging the leadership and furthering their commitment. 31

32. In order to keep all plants engaged in the program, efforts were made to approve at least one project at each plant while adhering to the original requirements. Alternative funding was identified in case of Capex restrictions in Alcoa. Specifically in Brazil, the following options for energy efficiency funding were available: BNDES – National Bank of Economic and Social Development Private Banks/Private Companies Energy distribution companies (New Soderberg Project at Poços de Caldas – project of plant modernization has been discussed with Cemig/Efficientia a potential long-term funding / Lighting project of Tubarão is under analysis to be funded by Indeco ESCO) Energy generation companies A special Capex budget was approved by GPP in the value of US$ 2 MM to be applied in projects of Energy Efficiency following a specific criteria: Payback < 1 year Energy reduction (thermal / compressed air / electricity) Reduction on CO2 emissions 12.Create a capital budget that addresses implementation process 32

33. 12.Create a capital budget that addresses implementation process Opportunities related to R&D 33 ALCOA Hydro Power Plants P&D Management Project ENERGY GROUP (Regional and Global) R&D LA&C GROUP (Regional and Global) PLANTS UNIVERSITIESCONSULTANCIES LABS ANEEL REGULATION (Law No 9.991,June 2000) 0.4% of NET REVENUE ~ USD 1 MM / year R&D PROJECT A R&D PROJECT B R&D PROJECT C R&D PROJECT D R&D PROJECT E R&D PROJECT F SCHOLARSHIP / EQUIPMENT / HUMAN RESOURCES / FEES / MATERIALS / EXPENSES 1 Manager 1 Coordinator 1 Specialist

34. I.ALCOA Profile II.ALCOA Global Energy Intensity and GHG Strategy III.Global Energy Efficiency Strategy IV.Deployment Strategy in Latin America V.Initial Results VI.Projects in Development VII.Learning Process VIII.Next Steps 34

35. 1 year after launching the program 35 ItemResults Energy Assessments 8 Mining: Juruti Refinery: Jamalco Smelter: Alumar and PC Extrusion: Utinga, Sorocaba and Tubarão Rolling: Itapissuma Actions identified105 Actions validated by plants85 (US$ 26 MM) Actions in progress45 (US$ 12 MM) Power to be reduced13 MW Energy Efficiency improvement12% (at assessed areas) 2012 Operating Plan contributionUS$ 5 MM People involved45 Energy SPA’s identified (Champions)4 (Monica/Haroldo/Matubara/Alessandro) What has been done since July-2010 – when the Energy Efficiency Program was approved

36. Results after 8 energy assessments 36

37. 8 assessments already performed Utinga Extrusion Plant Itapissuma Flat, Rolling and Extrusion Plant Tubarão Extrusion Plant ALUMAR Smelter Jamalco Refinery 37

38. Example of problem fixed during the assessment Itapissuma Flat and Rolling Products plant The regenerative burners installed on MF-10 had the capability to improve performance reducing fuel consumption to less than 60% of current values This translates into more than $450,000/yr of fuel impact Furnace performance would be improved from 300 Nm3/tonne to 170 Nm3/tonne A problem in the pilot burner was identified and fixed during the assessment, saving about $200,000/yr Consumption was reduced from 300 Nm3/tonne to 225 Nm3/tonne 38

39. I.ALCOA Profile II.ALCOA Global Energy Intensity and GHG Strategy III.Global Energy Efficiency Strategy IV.Deployment Strategy in Latin America V.Initial Results VI.Projects in Development VII.Learning Process VIII.Next Steps 39

40. Examples of projects in progress Tubarão Extrusion Products plant: Project: conversion of 4 aging furnaces from electricity to natural gas (DI # 52357) Payback is 6 months Annual savings: USD 520 k Electrical Cost:$46.00/MMBtu (USD) LPG Cost:$21.00/MMBtu (USD) Natural Gas Cost:$12.46/MMBtu (USD) Compressed Air:$322.00/MMBtu (USD) Itapissuma plant: Project: compressed air leakage elimination program (DI # 52354) Payback is 2 months Annual savings: USD 180 k Number of leaking points in FRP Number of leaking points in Casthouse Number of leaking points in Extrusion Total number of leaking points in 2008 Major air leak/ Vazamento maior 56101379 36 Moderate air leak/ Vazamento médio 4611 68 24 Minor air leak/ Vazamento menor 359751 34 Total 137303119894 40

41. Examples of projects in progress Tubarão Extrusion Products plant: Project: Lighting System Project Redesign (DI # 52356) Payback is 1.2 years Annual savings: USD 105 k Itapissuma plant: Project: combustion control improvement (DI # 51727 / 51719) Payback is 0.9 years Annual savings: US$ 340 k 41

42. TG#3 is currently producing ~25 MW versus a capacity of 34.3 MW Investigation has indicated that loss of capacity is due to internal deposits on the turbine blades History of TG#3 maintenance shows periodic loss of power generation capacity Root Cause: Impurities in steam depositing on turbine blade surfaces  Amounts & types of impurities is a function of process conditions, and tend to be location-specific  Distribution & concentration on blade surfaces tends to be a function of turbine design Probable Sources: Contaminated flash steam condensate Excessive boiler steam drum to superheater carryover on one or more boilers A combination Turbine Capacity Recovery at Jamaica Alumina Refinery 42

43. I.ALCOA Profile II.ALCOA Global Energy Intensity and GHG Strategy III.Global Energy Efficiency Strategy IV.Deployment Strategy in Latin America V.Initial Results VI.Projects in Development VII.Learning Process VIII.Next Steps 43

44. Planning is key for success – the best planning is always the next one Budget must be discussed early Engagement of the SPA is crucial One assessment week is very fast… pre-work is the right time to get information Implementation of the actions is the hardest part PERSISTANCE is the key word in an ENERGY EFFICIENCY PROGRAM Points we learned by doing 44

45. I.ALCOA Profile II.ALCOA Global Energy Intensity and GHG Strategy III.Global Energy Efficiency Strategy IV.Deployment Strategy in Latin America V.Initial Results VI.Projects in Development VII.Learning Process VIII.Next Steps 45

46. This individual goals can summarize the next steps… Category Financial 1.Conclude the energy assessments at Refineries (4 assessments) For score 5 – Conclude all assessments and find at least USD200k in immediate savings 2.Implement the projects already identified by the assessments For score 5 – Implement > 75% of the opportunities (60 findings) 3.Accomplish the target of DI’s For score 5 – Achieve 110% of the target (USD 2 MM) Sustainability 4.Obtain income by selling carbon credits For score 5 – Conclude the documentation of Flexgas project 46

47. OBRIGADO 47