(Updates with details from company statement in second paragraph.)
Oct. 27 (Bloomberg) -- Alcoa Inc., the largest U.S. aluminum producer, signed an agreement with Angola to explore development of a smelter in the southwest African country.
The project would produce 750,000 metric tons a year, with first production scheduled for 2020, New York-based Alcoa said in a statement. It would be powered by hydroelectric plants that have yet to be developed by the government, Alcoa said. The government plans to allocate 1,300 megawatts to the aluminum industry, according to the release.
“Alcoa is interested in pursuing projects that lower our cost position,” Ken Wisnoski, president of Alcoa’s growth group, said in the statement. “We believe the Angola government’s proposal to provide hydroelectric power offers great potential and we are pleased to have the opportunity to work together on feasibility studies.”
The agreement starts a 12-month exclusivity period to negotiate a power contract and cooperation agreement between Alcoa and the government, the company said. Angola emerged from a decades-long civil war in 2002 and is the second-largest oil producer in sub-Sahara Africa.
Alcoa operates in 31 countries, selling aluminum in U.S. dollars and paying costs in local currencies. The metal is widely used in construction, autos and beverage cans.
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