Alcoa 2013 Annual Report Download - page 140

Alcoa to conduct the work outlined in the ROD. Alcoa is waiting final entry of the consent decree to begin work, which
is expected in the first half of 2014. At December 31, 2013 and 2012, the reserve balance associated with this matter
was $24 and $26, respectively. The majority of the project funding is expected to be spent between 2014 and 2015.
Fusina and Portovesme, Italy—In 1996, Alcoa acquired the Fusina smelter and rolling operations and the Portovesme
smelter, both of which are owned by Alcoa’s subsidiary Alcoa Trasformazioni S.r.l. (“Trasformazioni”), from Alumix,
an entity owned by the Italian Government. At the time of the acquisition, Alumix indemnified Alcoa for pre-existing
environmental contamination at the sites. In 2004, the Italian Ministry of Environment and Protection of Land and Sea
(MOE) issued orders to Trasformazioni and Alumix for the development of a clean-up plan related to soil
contamination in excess of allowable limits under legislative decree and to institute emergency actions and pay natural
resource damages. Trasformazioni appealed the orders and filed suit against Alumix, among others, seeking
indemnification for these liabilities under the provisions of the acquisition agreement. In 2009, Ligestra S.r.l.
(“Ligestra”), Alumix’s successor, and Trasformazioni agreed to a stay of the court proceedings while investigations
were conducted and negotiations advanced towards a possible settlement.
In December 2009, Trasformazioni and Ligestra reached an agreement for settlement of the liabilities related to Fusina
while negotiations continued related to Portovesme. The agreement outlines an allocation of payments to the MOE for
emergency action and natural resource damages and the scope and costs for a proposed soil remediation project, which
was formally presented to the MOE in mid-2010. The agreement is contingent upon final acceptance of the remediation
project by the MOE. As a result of entering into this agreement, Alcoa increased the reserve by $12 in 2009 for Fusina.
Based on comments received from the MOE and local and regional environmental authorities, Trasformazioni
submitted a revised remediation plan in the first half of 2012; however, such revisions did not require any change to the
existing reserve. In October 2013, the MOE approved the project submitted by Alcoa, resulting in no adjustment to the
reserve. Alcoa is in the process of negotiating a final administrative agreement for conduct of the work
Additionally, due to new information derived from the site investigations conducted at Portovesme, Alcoa increased
the reserve by $3 in 2009. In November 2011, Trasformazioni and Ligestra reached an agreement for settlement of the
liabilities related to Portovesme, similar to the one for Fusina. A proposed soil remediation project for Portovesme was
formally presented to the MOE in June 2012. Neither the agreement with Ligestra nor the proposal to the MOE
resulted in a change to the reserve for Portovesme. In November 2013, the MOE rejected the proposed soil remediation
project and requested a revised project be submitted in the first quarter of 2014. It is possible that the revised project
may result in a change to the existing reserve for Portovesme.
Baie Comeau, Quebec, Canada—In August 2012, Alcoa presented an analysis of remediation alternatives to the
Quebec Ministry of Sustainable Development, Environment, Wildlife and Parks (MDDEP), in response to a previous
request, related to known PCBs and polycyclic aromatic hydrocarbons (PAHs) contained in sediments of the Anse du
Moulin bay. As such, Alcoa increased the reserve for Baie Comeau by $25 in 2012 to reflect the estimated cost of
Alcoa’s recommended alternative, consisting of both dredging and capping of the contaminated sediments. In July
2013, Alcoa submitted the Environmental Impact Assessment for the project to the MDDEP and this document is
currently in the regulatory review process. The ultimate selection of a remedy may result in additional liability at the
time the MDDEP issues a final decision.
Mosjøen, Norway—In September 2012, Alcoa presented an analysis of remediation alternatives to the Norwegian
Environmental Agency (NEA) (formerly the Norwegian Climate and Pollution Agency, or “Klif”), in response to a
previous request, related to known PAHs in the sediments located in the harbor and extending out into the fjord. As
such, Alcoa increased the reserve for Mosjøen by $20 in 2012 to reflect the estimated cost of the baseline alternative
for dredging of the contaminated sediments. The ultimate selection of a remedy may result in additional liability at the
time the NEA issues a final decision.
Other. In March 2013, Alcoa’s subsidiary, Alcoa World Alumina Brasil (AWAB), was notified by the Brazilian
Federal Revenue Office (RFB) that approximately $110 (R$220) of value added tax credits previously claimed are
being disallowed and a penalty of 50% assessed. Of this amount, AWAB received $41 (R$82) in cash in May 2012.
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