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Alcoa (AA) To Shutter 50-Year-Old Smelter

NEW YORK (TheStreet) -- Aluminum producer Alcoa (AA - Get Report) announced it will close its Point Henry smelter and two rolling mills in Australia after a two-year review proved they wouldn't return to profitability.

The smelter was placed under strategic review in February 2012 amid challenging conditions for the industry. The two-year review found the 50-year-old smelter had "no prospect of becoming financially viable."

Meanwhile, the rolling mills which serve Australian and Asian can sheet markets have been undercut recently by a surplus from Chinese producers.

The three facilities employ just under 1,000 people combined.

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"We recognize how deeply this decision impacts employees at the affected facilities and are committed to supporting them through this transition," said CEO Klaus Kleinfeld in a statement. "Despite the hard work of the local teams, these assets are no longer competitive and are not financially sustainable today or into the future."

Restructuring-related charges over fiscal 2014 are expected between $250 million and $270 million, or 22 cents to 25 cents a share, of which 60% will likely be recorded in the first quarter.

The closures will reduce the company's smelting capacity by 190,000 metric tons, around 10% of Australia's total annual output, and reduce can sheet capacity by 200,000 metric tons.

The Geelong, Vic.-based smelter will close in August and the two rolling mills will shutter by the end of 2014.

By late afternoon, shares had edged 0.09% higher to $11.38.

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