Alcoa Corp (Form: 10-Q, Received: 07/31/2019 16:54:23)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2019

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-37816

ALCOA CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of

incorporation or organization)

81-1789115

(I.R.S. Employer

Identification No.)

201 Isabella Street, Suite 500,

Pittsburgh, Pennsylvania

(Address of principal executive offices)

15212-5858

(Zip Code)

412-315-2900

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Yes ☐ No ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 26, 2019, 185,557,343 shares of common stock, par value $0.01 per share, of the registrant were outstanding.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION		1

Item 1.	Financial Statements	1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	41

Item 4.	Controls and Procedures	41

PART II – OTHER INFORMATION		42

Item 1.	Legal Proceedings	42

Item 4.	Mine Safety Disclosures	42

Item 6.	Exhibits	43

SIGNATURES		44

Forward-Looking Statements

This report contains statements that relate to future events and expectations and, as such, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those containing such words as “anticipates,” “believes,” “could,” “estimates,” “expects,” “forecasts,” “goal,” “intends,” “may,” “outlook,” “plans,” “projects,” “seeks,” “sees,” “should,” “targets,” “will,” “would,” or other words of similar meaning. All statements by Alcoa Corporation that reflect expectations, assumptions or projections about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, forecasts concerning global demand growth for bauxite, alumina, and aluminum, and supply/demand balances; statements, projections or forecasts of future financial results or operating performance; statements about strategies, outlook, and business and financial prospects; and statements about return of capital. These statements reflect beliefs and assumptions that are based on Alcoa Corporation’s perception of historical trends, current conditions, and expected future developments, as well as other factors that management believes are appropriate in the circumstances. Forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and changes in circumstances that are difficult to predict. Although Alcoa Corporation believes that the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that these expectations will be attained and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties. Such risks and uncertainties include, but are not limited to: (a) material adverse changes in aluminum industry conditions, including global supply and demand conditions and fluctuations in London Metal Exchange-based prices and premiums, as applicable, for primary aluminum and other products, and fluctuations in indexed-based and spot prices for alumina; (b) deterioration in global economic and financial market conditions generally and which may also affect Alcoa Corporation’s ability to obtain credit or financing upon acceptable terms; (c) unfavorable changes in the markets served by Alcoa Corporation; (d) the impact of changes in foreign currency exchange and tax rates on costs and results; (e) increases in energy costs or uncertainty of energy supply; (f) declines in the discount rates used to measure pension liabilities or lower-than-expected investment returns on pension assets, or unfavorable changes in laws or regulations that govern pension plan funding; (g) the inability to achieve improvement in profitability and margins, cost savings, cash generation, revenue growth, fiscal discipline, or strengthening of competitiveness and operations anticipated from operational and productivity improvements, cash sustainability, technology advancements, and other initiatives; (h) the inability to realize expected benefits, in each case as planned and by targeted completion dates, from acquisitions, divestitures, facility closures, curtailments, restarts, expansions, or joint ventures; (i) political, economic, trade, legal, and regulatory risks in the countries in which Alcoa Corporation operates or sells products; (j) labor disputes and/or work stoppages; (k) the outcome of contingencies, including legal proceedings, government or regulatory investigations, and environmental remediation; (l) the impact of cyberattacks and potential information technology or data security breaches; and (m) the other risk factors discussed in Item 1A of Alcoa Corporation’s Form 10-K for the fiscal year ended December 31, 2018 and other reports filed by Alcoa Corporation with the U.S. Securities and Exchange Commission, including those described in this report. Alcoa Corporation disclaims any obligation to update publicly any forward-looking statements, whether in response to new information, future events or otherwise, except as required by applicable law. Market projections are subject to the risks described above and other risks in the market.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

Alcoa Corporation and Subsidiaries

Statement of Consolidated Operations (unaudited)

(in millions, except per-share amounts)

	Second quarter ended June 30,					Six months ended June 30,
	2019			2018		2019			2018
Sales (D)	$	2,711		$	3,579	$	5,430		$	6,669
Cost of goods sold (exclusive of expenses below) (H)		2,189			2,753		4,369			5,055
Selling, general administrative, and other expenses		68			64		152			131
Research and development expenses		7			9		14			17
Provision for depreciation, depletion, and amortization		174			192		346			386
Restructuring and other charges, net (C)		370			231		483			212
Interest expense		30			32		60			58
Other expenses, net (N)		50			9		91			30
Total costs and expenses		2,888			3,290		5,515			5,889
(Loss) income before income taxes		(177	)		289		(85	)		780
Provision for income taxes		116			158		266			309
Net (loss) income		(293	)		131		(351	)		471
Less: Net income attributable to noncontrolling interest		109			121		250			266
NET (LOSS) INCOME ATTRIBUTABLE TO ALCOA CORPORATION	$	(402	)	$	10	$	(601	)	$	205
EARNINGS PER SHARE ATTRIBUTABLE TO ALCOA CORPORATION COMMON SHAREHOLDERS (E):
Basic	$	(2.17	)	$	0.05	$	(3.24	)	$	1.10
Diluted	$	(2.17	)	$	0.05	$	(3.24	)	$	1.09

The accompanying notes are an integral part of the consolidated financial statements.

Alcoa Corporation and Subsidiaries

Statement of Consolidated Comprehensive Income (unaudited)

(in millions)

	Alcoa Corporation						Noncontrolling interest						Total
	Second quarter ended June 30,						Second quarter ended June 30,						Second quarter ended June 30,
	2019			2018			2019			2018			2019			2018
Net (loss) income (H)	$	(402	)	$	10		$	109		$	121		$	(293	)	$	131
Other comprehensive income (loss), net of tax (F):
Change in unrecognized net actuarial loss and prior service cost/benefit related to pension and other postretirement benefits		10			183			(2	)		2			8			185
Foreign currency translation adjustments		40			(445	)		4			(151	)		44			(596	)
Net change in unrecognized gains/losses on cash flow hedges		79			(175	)		(1	)		(10	)		78			(185	)
Total Other comprehensive income (loss), net of tax		129			(437	)		1			(159	)		130			(596	)
Comprehensive (loss) income	$	(273	)	$	(427	)	$	110		$	(38	)	$	(163	)	$	(465	)


	Alcoa Corporation						Noncontrolling interest						Total
	Six months ended June 30,						Six months ended June 30,						Six months ended June 30,
	2019			2018			2019			2018			2019			2018
Net (loss) income (H)	$	(601	)	$	205		$	250		$	266		$	(351	)	$	471
Other comprehensive (loss) income, net of tax (F):
Change in unrecognized net actuarial loss and prior service cost/benefit related to pension and other postretirement benefits		51			284			(1	)		3			50			287
Foreign currency translation adjustments		18			(444	)		6			(165	)		24			(609	)
Net change in unrecognized gains/losses on cash flow hedges		(209	)		375			5			(30	)		(204	)		345
Total Other comprehensive (loss) income, net of tax		(140	)		215			10			(192	)		(130	)		23
Comprehensive (loss) income	$	(741	)	$	420		$	260		$	74		$	(481	)	$	494

The accompanying notes are an integral part of the consolidated financial statements.

Alcoa Corporation and Subsidiaries

Consolidated Balance Sheet (unaudited)

(in millions)

	June 30, 2019			December 31, 2018
ASSETS
Current assets:
Cash and cash equivalents (J)	$	834		$	1,113
Receivables from customers		684			830
Other receivables		203			173
Inventories (H)		1,767			1,819
Fair value of derivative instruments (J)		80			73
Prepaid expenses and other current assets (H)		250			320
Total current assets		3,818			4,328
Properties, plants, and equipment		22,126			21,807
Less: accumulated depreciation, depletion, and amortization		13,853			13,480
Properties, plants, and equipment, net		8,273			8,327
Investments (G & M)		1,141			1,360
Deferred income taxes		599			560
Fair value of derivative instruments (J)		55			82
Other noncurrent assets		1,463			1,475
Total assets	$	15,349		$	16,132
LIABILITIES
Current liabilities:
Accounts payable, trade	$	1,523		$	1,663
Accrued compensation and retirement costs		409			400
Taxes, including income taxes		100			426
Fair value of derivative instruments (J)		71			82
Other current liabilities		427			347
Long-term debt due within one year (J)		1			1
Total current liabilities		2,531			2,919
Long-term debt, less amount due within one year (J)		1,804			1,801
Accrued pension benefits (I)		1,388			1,407
Accrued other postretirement benefits (I)		835			868
Asset retirement obligations		529			529
Environmental remediation (M)		237			236
Fair value of derivative instruments (J)		506			261
Noncurrent income taxes		320			301
Other noncurrent liabilities and deferred credits		340			222
Total liabilities		8,490			8,544
CONTINGENCIES AND COMMITMENTS (M)
EQUITY
Alcoa Corporation shareholders’ equity:
Common stock		2			2
Additional capital		9,629			9,611
Retained (deficit) earnings (H)		(31	)		570
Accumulated other comprehensive loss (F)		(4,705	)		(4,565	)
Total Alcoa Corporation shareholders’ equity		4,895			5,618
Noncontrolling interest (H)		1,964			1,970
Total equity		6,859			7,588
Total liabilities and equity	$	15,349		$	16,132

The accompanying notes are an integral part of the consolidated financial statements.

Alcoa Corporation and Subsidiaries

Statement of Consolidated Cash Flows (unaudited)

(in millions)

	Six Months Ended June 30,
	2019			2018
CASH FROM OPERATIONS
Net (loss) income (H)	$	(351	)	$	471
Adjustments to reconcile net (loss) income to cash from operations:
Depreciation, depletion, and amortization		346			387
Deferred income taxes (H)		64			(40	)
Equity earnings, net of dividends		14			(11	)
Restructuring and other charges, net (C)		483			212
Net gain from investing activities – asset sales (N)		(1	)		(3	)
Net periodic pension benefit cost (I)		60			81
Stock-based compensation		21			20
Provision for bad debt expense		20			—
Other		24			(32	)
Changes in assets and liabilities, excluding effects of foreign currency translation adjustments:
Decrease (Increase) in receivables		94			(209	)
Decrease (Increase) in inventories (H)		53			(225	)
Decrease (Increase) in prepaid expenses and other current assets		68			(8	)
(Decrease) in accounts payable, trade		(144	)		(105	)
(Decrease) in accrued expenses		(51	)		(243	)
(Decrease) Increase in taxes, including income taxes		(342	)		101
Pension contributions (I)		(55	)		(692	)
(Increase) in noncurrent assets		(32	)		(49	)
(Decrease) in noncurrent liabilities		(21	)		(30	)
CASH PROVIDED FROM (USED FOR) OPERATIONS		250			(375	)
FINANCING ACTIVITIES
Additions to debt (original maturities greater than three months)		—			553
Payments on debt (original maturities greater than three months)		—			(7	)
Proceeds from the exercise of employee stock options		1			22
Contributions from noncontrolling interest		21			109
Distributions to noncontrolling interest		(286	)		(385	)
Other		(6	)		(6	)
CASH (USED FOR) PROVIDED FROM FINANCING ACTIVITIES		(270	)		286
INVESTING ACTIVITIES
Capital expenditures		(158	)		(169	)
Proceeds from the sale of assets		11			—
Additions to investments		(111	)		(5	)
CASH USED FOR INVESTING ACTIVITIES		(258	)		(174	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		(1	)		(7	)
Net change in cash and cash equivalents and restricted cash		(279	)		(270	)
Cash and cash equivalents and restricted cash at beginning of year		1,116			1,365
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$	837		$	1,095

The accompanying notes are an integral part of the consolidated financial statements.

Alcoa Corporation and Subsidiaries

Statement of Changes in Consolidated Equity (unaudited)

(in millions)

	Alcoa Corporation shareholders
	Common stock		Additional capital			Retained earnings (deficit)			Accumulated other comprehensive loss			Non- controlling interest			Total equity
Second quarter ended June 30, 2018
Balance at March 31, 2018	$	2	$	9,633		$	513		$	(4,530	)	$	2,135		$	7,753
Net income		—		—			10			—			121			131
Other comprehensive (loss) (F)		—		—			—			(437	)		(159	)		(596	)
Stock-based compensation		—		10			—			—			—			10
Common stock issued: compensation plans		—		7			—			—			—			7
Contributions		—		—			—			—			56			56
Distributions		—		—			—			—			(118	)		(118	)
Other		—		—			1			—			1			2
Balance at June 30, 2018	$	2	$	9,650		$	524		$	(4,967	)	$	2,036		$	7,245

Second quarter ended June 30, 2019
Balance at March 31, 2019	$	2	$	9,618		$	371		$	(4,834	)	$	1,926		$	7,083
Net (loss) income		—		—			(402	)		—			109			(293	)
Other comprehensive income (F)		—		—			—			129			1			130
Stock-based compensation		—		11			—			—			—			11
Contributions		—		—			—			—			1			1
Distributions		—		—			—			—			(72	)		(72	)
Other		—		—			—			—			(1	)		(1	)
Balance at June 30, 2019	$	2	$	9,629		$	(31	)	$	(4,705	)	$	1,964		$	6,859

Six months ended June 30, 2018
Balance at December 31, 2017	$	2	$	9,590		$	318		$	(5,182	)	$	2,240		$	6,968
Net income		—		—			205			—			266			471
Other comprehensive income (loss) (F)		—		—			—			215			(192	)		23
Stock-based compensation		—		20			—			—			—			20
Common stock issued: compensation plans		—		22			—			—			—			22
Contributions		—		—			—			—			109			109
Distributions		—		—			—			—			(385	)		(385	)
Other		—		18			1			—			(2	)		17
Balance at June 30, 2018	$	2	$	9,650		$	524		$	(4,967	)	$	2,036		$	7,245

Six months ended June 30, 2019
Balance at December 31, 2018	$	2	$	9,611		$	570		$	(4,565	)	$	1,970		$	7,588
Net (loss) income		—		—			(601	)		—			250			(351	)
Other comprehensive (loss) income (F)		—		—			—			(140	)		10			(130	)
Stock-based compensation		—		21			—			—			—			21
Common stock issued: compensation plans		—		1			—			—			—			1
Contributions		—		—			—			—			21			21
Distributions		—		—			—			—			(286	)		(286	)
Other		—		(4	)		—			—			(1	)		(5	)
Balance at June 30, 2019	$	2	$	9,629		$	(31	)	$	(4,705	)	$	1,964		$	6,859

The accompanying notes are an integral part of the consolidated financial statements.

Alcoa Corporation and Subsidiaries

Notes to the Consolidated Financial Statements (unaudited)

(dollars in millions, except per-share amounts; metric tons in thousands (kmt))

A. Basis of Presentation – The interim Consolidated Financial Statements of Alcoa Corporation and its subsidiaries (Alcoa Corporation or the Company) are unaudited. These Consolidated Financial Statements include all adjustments, consisting only of normal recurring adjustments, considered necessary by management to fairly state the Company’s results of operations, financial position, and cash flows. The results reported in these Consolidated Financial Statements are not necessarily indicative of the results that may be expected for the entire year. The 2018 year-end balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (GAAP). This Quarterly Report on Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, which includes all disclosures required by GAAP.

References in these Notes to ParentCo refer to Alcoa Inc., a Pennsylvania corporation, and its consolidated subsidiaries (through October 31, 2016, at which time it was renamed Arconic Inc. (Arconic)). On November 1, 2016 (the Separation Date), ParentCo separated into two standalone, publicly-traded companies, Alcoa Corporation and Arconic (the Separation Transaction). In connection with the Separation Transaction, as of October 31, 2016, the Company and Arconic entered into several agreements to effect the Separation Transaction, including a Separation and Distribution Agreement and a Tax Matters Agreement. See Note A to the Consolidated Financial Statements in Part II Item 8 of Alcoa Corporation’s Annual Report on Form 10-K for the year ended December 31, 2018 for additional information.

As of January 1, 2019, the Company changed its accounting method for valuing certain inventories from last-in, first-out (LIFO) to average cost. The effects of the change in accounting principle have been retrospectively applied to all prior periods presented. See Note H for more information regarding the change in inventory accounting method.

Principles of Consolidation. The Consolidated Financial Statements of Alcoa Corporation include the accounts of Alcoa Corporation and companies in which Alcoa Corporation has a controlling interest, including those that comprise the Alcoa World Alumina & Chemicals (AWAC) joint venture (see below). Intercompany transactions have been eliminated. The equity method of accounting is used for investments in affiliates and other joint ventures over which Alcoa Corporation has significant influence but does not have effective control. Investments in affiliates in which Alcoa Corporation cannot exercise significant influence are accounted for on the cost method.

AWAC is an unincorporated global joint venture between Alcoa Corporation and Alumina Limited and consists of several affiliated operating entities, which own, or have an interest in, or operate the bauxite mines and alumina refineries within Alcoa Corporation’s Bauxite and Alumina segments (except for the Poços de Caldas mine and refinery and a portion of the São Luís refinery, all in Brazil) and the Portland smelter in Australia within Alcoa Corporation’s Aluminum segment. Alcoa Corporation owns 60% and Alumina Limited owns 40% of these individual entities, which are consolidated by the Company for financial reporting purposes and include Alcoa of Australia Limited, Alcoa World Alumina LLC (AWA), and Alcoa World Alumina Brasil Ltda. (AWAB). Alumina Limited’s interest in the equity of such entities is reflected as Noncontrolling interest on the accompanying Consolidated Balance Sheet.

B. Recently Adopted and Recently Issued Accounting Guidance

Adopted

On January 1, 2019 Alcoa Corporation adopted Accounting Standards Update (ASU) No. 2016-02, Leases, issued by the Financial Accounting Standards Board (FASB) regarding the accounting for leases, using the modified retrospective approach. This ASU requires lessees to recognize a right-of-use asset and lease liability on the balance sheet for operating and finance leases with a term of 12 months or more. Additionally, when measuring assets and liabilities arising from a lease, optional payments should be included only if the lessee is reasonably certain to exercise an option to extend the lease, exercise a purchase option, or not exercise an option to terminate the lease. A right-of-use asset represents an entity’s right to use the underlying asset for the lease term, and a lease liability represents an entity’s obligation to make lease payments. The Company has made a policy election not to record any non-lease components in the lease liability. Previously, an asset and liability were only recorded for leases classified as capital leases (financing leases). The measurement, recognition, and presentation of expenses and cash flows arising from leases by a lessee remains the same. Management elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed carry forward of historical lease classifications. Additionally, in July 2018, the FASB issued ASU No. 2018-11, Targeted Improvements, to provide for an alternative transition method to the new lease guidance, whereby an entity can choose to not reflect the impact of the new lease guidance in the prior periods included in its financial statements. The Company elected this alternative transition method upon adoption on January 1, 2019. Management also elected the practical expedient related to land easements, allowing the Company to carry forward the current treatment on existing arrangements.

As a result of the adoption, management recorded a right-of-use asset and lease liability, each in the amount of $201, on Alcoa Corporation’s Consolidated Balance Sheet as of January 1, 2019 for several types of operating leases, including land and buildings, alumina refinery process control technology, plant equipment, vehicles, and computer equipment. See Note L for additional information related to the adoption of this standard.

Alcoa Corporation’s adoption of the following accounting guidance in 2019 did not have a material impact on the Company’s consolidated financial statements:

Accounting Standards Update

2018-01 Leases: Land Easement Practical Expedient for Transition

2018-02Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income

2018-07Stock Compensation: Improvements to Nonemployee Share-Based Payment Accounting

Issued

In August 2018, the FASB issued ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General. This ASU makes changes to the disclosures of fair value measurements and defined benefit plans through several removals, modifications, additions, and/or clarifications of the existing requirements. Certain disclosures associated with accumulated other comprehensive income, valuation of Level 3 assets, and sensitivities in assumed health care trend rates and interest rates have been eliminated. New disclosures have been added to explain significant gains and losses related to changes in benefit obligations, changes included in other comprehensive income for recurring Level 3 fair value measurements, and information on significant unobservable inputs used to develop Level 3 fair value measurements. These changes become effective for Alcoa Corporation for its fiscal year ending December 31, 2020 and for interim periods therein with early adoption permitted and retrospective presentation for all periods presented required. Other than updating the applicable disclosures, the adoption of this guidance will not have an impact on the Company’s Consolidated Financial Statements.

In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software. This ASU aligns the accounting for cloud computing implementation costs with that of costs to develop or obtain internal-use software, meaning such costs that are part of the application development stage are capitalized as an asset and amortized over the term of the arrangement, otherwise, such costs are expensed as incurred. It also clarifies the classification of amounts related to capitalized implementation costs in the financial statements. This guidance becomes effective for Alcoa Corporation on January 1, 2020, with early adoption permitted. Management is currently evaluating the potential impact of this guidance on the Consolidated Financial Statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses. This ASU added a new impairment model (known as the current expected credit loss (CECL) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes an allowance for its estimate of expected credit losses and applies to most debt instruments, trade receivables, lease receivables, financial guarantee contracts, and other loan commitments. The CECL model does not have a minimum threshold for recognition of impairment losses and entities will need to measure expected credit losses on assets that have a low risk of loss. These changes become effective for Alcoa Corporation on January 1, 2020. Management is currently evaluating the potential impact of these changes on the Consolidated Financial Statements.

C. Restructuring and Other Charges, Net – In the second quarter and six-month period of 2019, Alcoa Corporation recorded Restructuring and other charges, net of $370 and $483, respectively, which were comprised of the following components: $5 and $108, respectively, for exit costs related to the curtailment of the Avilés and La Coruña smelters in Spain (see below); $38 (both periods) related to the curtailment of certain pension benefits (see Note I); $319 (both periods) related to the divestiture of Alcoa Corporation’s interest in the Ma’aden Rolling Company (MRC) (see below); $1 and $8, respectively, for closure costs related to a coal mine; and $7 and $10, respectively, for net charges related to various items.

conditional share purchase agreement with PARTER for the purchase of the two facilities. The agreement was subject to PARTER meeting certain financial conditions prior to July 31, 2019 to support future operations. Prior to signing the conditional share purchase agreement with PARTER, Alcoa Corporation reached agreement with the workers’ representatives related to the potential transaction. See Note O for additional information.

Restructuring charges recorded in the first quarter of 2019 related to the collective dismissal process included asset impairments of $80, employee-related costs of $15 and contract termination costs of $8. Additional charges recorded in the first quarter included a $15 write down of remaining inventories to their net realizable value, which was recorded in Cost of goods sold, and $2 in miscellaneous charges recorded in Selling, general administrative, and other expenses on the accompanying Statement of Consolidated Operations. Restructuring charges recorded in the second quarter of 2019 related to this process are comprised of severance costs of $3 and other employee-related costs of $2.

In December 2009, Alcoa Corporation invested in a joint venture related to the ownership and operation of an integrated aluminum complex (bauxite mine, alumina refinery, aluminum smelter, and rolling mill) in the Kingdom of Saudi Arabia. The joint venture is owned 74.9% by the Saudi Arabian Mining Company (known as Ma’aden) and 25.1% by Alcoa Corporation, and originally consisted of three separate companies as follows: the Ma’aden Bauxite and Alumina Company (MBAC; the bauxite mine and alumina refinery), the Ma’aden Aluminium Company (MAC; the aluminum smelter and casthouse), and MRC (the rolling mill). Alcoa Corporation accounts for its investment in the joint venture under the equity method as one integrated investment asset, consistent with the terms of the joint venture agreement. As of June 30, 2019 and December 31, 2018, the carrying value of Alcoa Corporation’s investment in this joint venture was $638 and $874, respectively.

In the second quarter of 2019, Alcoa Corporation and Ma’aden amended the joint venture agreement that governs the operations of each of the three companies that comprise the joint venture. Under the terms of the amended agreement:

•

Alcoa Corporation made a contribution to MRC in the amount of $100, along with Ma’aden’s earlier capital contribution of $100, to meet current MRC cash requirements, including paying certain amounts owed by MRC to MAC and Alcoa Corporation;

•

Alcoa Corporation and Ma’aden consented to the write-off of $235 of MRC’s delinquent payables to MAC;

•

Alcoa Corporation transferred its 25.1% interest in MRC to Ma’aden and, as a result, has no further direct or indirect equity interest in MRC;

•

Alcoa Corporation is released from all future MRC obligations, including Alcoa Corporation’s sponsor support of $296 of MRC debt (see Note M) and its share of any future MRC cash requirements; and,

•

Alcoa Corporation and Ma’aden further defined MBAC and MAC shareholder rights, including the timing and determination of the amount of dividend payments of excess cash to the joint venture partners following required distributions to the commercial lenders of MBAC and MAC; among other matters.

The amendment also defines October 1, 2021 as the date after which Alcoa Corporation is permitted to sell all of its shares in both MBAC and MAC collectively, for which Ma’aden has a right of first refusal. The agreement further outlines that Alcoa Corporation’s call option and Ma’aden’s put option, relating to additional interests in the joint venture, are exercisable for a period of six-months after October 1, 2021.

The parties will maintain their commercial relationship, which includes Alcoa Corporation providing sales, logistics and customer technical services support for MRC products for the North American can sheet market. The Company will retain its 25.1% minority interest in MBAC and MAC, and Ma’aden will continue to own a 74.9% interest.

The $319 restructuring charge resulting from the MRC divestiture includes the write-off of Alcoa Corporation’s investment in MRC of $161, the cash contributions described above of $100, and the write-off of Alcoa Corporation’s share of MRC’s delinquent payables due to MAC of $59 that were forgiven as part of this transaction, which were partially offset by a gain of $1 resulting from the write-off of the fair value of debt guarantee.

In the second quarter and six-month period of 2018, Alcoa Corporation recorded Restructuring and other charges, net of $231 and $212, respectively, which were comprised of the following components: $167 and $144 (net), respectively, related to settlements and/or curtailments of certain pension and other postretirement employee benefits; $80 and $84, respectively, for additional costs related to the curtailed Wenatchee (Washington) smelter; a $15 net benefit in both periods related to the Portovesme (Italy) smelter; and a $1 net benefit in both periods for various items.

Alcoa Corporation does not include Restructuring and other charges, net in the results of its reportable segments. The impact of allocating such charges to segment results would have been as follows:

	Second quarter ended June 30,					Six months ended June 30,
	2019			2018		2019		2018
Bauxite	$	(1	)	$	—	$	—	$	—
Alumina		—			3		1		2
Aluminum		353			79		460		84
Segment total		352			82		461		86
Corporate		18			149		22		126
Total Restructuring and other charges, net	$	370		$	231	$	483	$	212

The activity related to layoff costs and other costs included within the restructuring reserve balances is as follows:

	Layoff costs			Other costs			Total
Balance at December 31, 2017	$	11		$	34		$	45
Cash payments		(7	)		(95	)		(102	)
Restructuring and other charges, net		2			117			119
Other⁽¹⁾		(1	)		(14	)		(15	)
Balance at December 31, 2018		5			42			47
Cash payments		(3	)		(39	)		(42	)
Restructuring and other charges, net		8			39			47
Other⁽¹⁾		—			(2	)		(2	)
Balance at June 30, 2019	$	10		$	40		$	50

⁽¹⁾	Other includes reversals of previously recorded restructuring charges, the effects of foreign currency translation, and reclassifications to other reserves, primarily asset retirement obligations and environmental remediation obligations.

The noncurrent portion of the reserve at June 30, 2019 was $2.

D. Segment Information – The operating results of Alcoa Corporation’s reportable segments were as follows (differences between segment totals and consolidated amounts are in Corporate):

	Bauxite		Alumina		Aluminum			Total
Second quarter ended June 30, 2019
Sales:
Third-party sales	$	67	$	864	$	1,757		$	2,688
Intersegment sales		246		445		4			695
Total sales	$	313	$	1,309	$	1,761		$	3,383
Segment Adjusted EBITDA	$	112	$	369	$	3		$	484
Supplemental information:
Depreciation, depletion, and amortization	$	27	$	55	$	85		$	167
Equity income (loss)	$	—	$	3	$	(17	)	$	(14	)
Second quarter ended June 30, 2018
Sales:
Third-party sales	$	77	$	1,068	$	2,413		$	3,558
Intersegment sales		226		536		4			766
Total sales	$	303	$	1,604	$	2,417		$	4,324
Segment Adjusted EBITDA	$	100	$	638	$	230		$	968
Supplemental information:
Depreciation, depletion, and amortization	$	27	$	49	$	108		$	184
Equity income (loss)	$	—	$	14	$	(8	)	$	6

	Bauxite		Alumina		Aluminum			Total
Six months ended June 30, 2019
Sales:
Third-party sales	$	132	$	1,761	$	3,492		$	5,385
Intersegment sales		482		862		7			1,351
Total sales	$	614	$	2,623	$	3,499		$	6,736
Segment Adjusted EBITDA	$	238	$	741	$	(93	)	$	886
Supplemental information:
Depreciation, depletion, and amortization	$	55	$	103	$	174		$	332
Equity income (loss)		—		15		(39	)		(24	)
Six months ended June 30, 2018
Sales:
Third-party sales	$	124	$	1,982	$	4,524		$	6,630
Intersegment sales		475		990		8			1,473
Total sales	$	599	$	2,972	$	4,532		$	8,103
Segment Adjusted EBITDA	$	210	$	1,030	$	417		$	1,657
Supplemental information:
Depreciation, depletion, and amortization	$	56	$	102	$	214		$	372
Equity income (loss)		—		13		(8	)		5

The following table reconciles total Segment Adjusted EBITDA to consolidated net (loss) income attributable to Alcoa Corporation:

	Second quarter ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
Total Segment Adjusted EBITDA⁽¹⁾	$	484		$	968		$	886		$	1,657
Unallocated amounts:
Transformation⁽²⁾		3			(1	)		5			(3	)
Intersegment eliminations^(1),(3)		(1	)		(152	)		85			(76	)
Corporate expenses⁽⁴⁾		(28	)		(26	)		(52	)		(53	)
Provision for depreciation, depletion, and amortization		(174	)		(192	)		(346	)		(386	)
Restructuring and other charges, net (C)		(370	)		(231	)		(483	)		(212	)
Interest expense		(30	)		(32	)		(60	)		(58	)
Other expenses, net (N)		(50	)		(9	)		(91	)		(30	)
Other⁽⁵⁾		(11	)		(36	)		(29	)		(59	)
Consolidated income before income taxes		(177	)		289			(85	)		780
Provision for income taxes		(116	)		(158	)		(266	)		(309	)
Net income attributable to noncontrolling interest		(109	)		(121	)		(250	)		(266	)
Consolidated net (loss) income attributable to Alcoa Corporation	$	(402	)	$	10		$	(601	)	$	205

⁽¹⁾

As of January 1, 2019, the Company changed its accounting method for valuing certain inventories from LIFO to average cost. The effects of the change in accounting principle have been retrospectively applied to all prior periods presented. As a result, in the second quarter and six-month period of 2018, Total Segment Adjusted EBITDA decreased $1 and increased $33, respectively, and Intersegment eliminations decreased $120 and $75, respectively.

⁽²⁾	Transformation includes, among other items, the Adjusted EBITDA of previously closed operations.

⁽³⁾

Concurrent with the change in inventory accounting method as of January 1, 2019, management elected to change the presentation of certain line items in the reconciliation of total Segment Adjusted EBITDA to Consolidated net (loss) income attributable to Alcoa Corporation. Corporate inventory accounting previously included the impact of LIFO, metal price lag and intersegment eliminations. The impact of LIFO has been eliminated with the change in inventory method. Metal price lag attributable to the Company’s rolled operations business is now netted within the Aluminum segment to simplify presentation of an impact that nets to zero in consolidation. Only intersegment eliminations remain as a reconciling line item and are labeled as such.

⁽⁴⁾	Corporate expenses are composed of general administrative and other expenses of operating the corporate headquarters and other global administrative facilities, as well as research and development expenses of the corporate technical center.

⁽⁵⁾	Other includes certain items that impact Cost of goods sold and Selling, general administrative, and other expenses on Alcoa Corporation’s Statement of Consolidated Operations that are not included in the Adjusted EBITDA of the reportable segments.

The following table details Alcoa Corporation’s Sales by product division:

	Second quarter ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
Primary aluminum	$	1,382		$	1,871		$	2,776		$	3,518
Alumina		862			1,068			1,759			1,981
Flat-rolled aluminum		327			516			639			945
Energy		85			73			154			146
Bauxite		63			71			121			116
Other⁽¹⁾		(8	)		(20	)		(19	)		(37	)
	$	2,711		$	3,579		$	5,430		$	6,669

⁽¹⁾	Other includes realized gains and losses related to embedded derivative instruments designated as cash flow hedges of forward sales of aluminum.

E. Earnings Per Share – Basic earnings per share (EPS) amounts are computed by dividing earnings by the average number of common shares outstanding. Diluted EPS amounts assume the issuance of common stock for all potentially dilutive share equivalents outstanding.

The information used to compute basic and diluted EPS attributable to Alcoa Corporation common shareholders was as follows (shares in millions):

	Second quarter ended June 30,					Six months ended June 30,
	2019			2018		2019			2018
Net (loss) income attributable to Alcoa Corporation	$	(402	)	$	10	$	(601	)	$	205
Average shares outstanding – basic		186			186		185			186
Effect of dilutive securities:
Stock options		—			1		—			1
Stock units		—			2		—			2
Average shares outstanding – diluted		186			189		185			189

In the second quarter and six-month period of 2019, basic average shares outstanding and diluted average shares outstanding were the same because the effect of potential shares of common stock was anti-dilutive since Alcoa Corporation generated a net loss. As a result, five million stock units and stock options combined were not included in the computation of diluted EPS for both the second quarter and six-month period of 2019. Had Alcoa Corporation generated net income in the second quarter or six-month period of 2019, one million common share equivalents related to stock units and stock options combined would have been included in diluted average shares outstanding for the respective periods.

F. Accumulated Other Comprehensive Loss

The following table details the activity of the three components that comprise Accumulated other comprehensive loss for both Alcoa Corporation’s shareholders and Noncontrolling interest:

	Alcoa Corporation						Noncontrolling interest
	Second quarter ended June 30,						Second Quarter Ended June 30,
	2019			2018			2019			2018
Pension and other postretirement benefits (I)
Balance at beginning of period	$	(2,242	)	$	(2,685	)	$	(45	)	$	(46	)
Other comprehensive income:
Unrecognized net actuarial (loss) gain and prior service cost/benefit		(78	)		1			(3	)		2
Tax benefit		16			6			—			—
Total Other comprehensive (loss) income before reclassifications, net of tax		(62	)		7			(3	)		2
Amortization of net actuarial loss and prior service cost/benefit⁽¹⁾		83			224			1			—
Tax expense⁽²⁾		(11	)		(48	)		—			—
Total amount reclassified from Accumulated other comprehensive loss, net of tax⁽⁶⁾		72			176			1			—
Total Other comprehensive income (loss)		10			183			(2	)		2
Balance at end of period		(2,232	)		(2,502	)		(47	)		(44	)

Foreign currency translation
Balance at beginning of period		(2,093	)		(1,466	)		(808	)		(595	)
Other comprehensive income (loss)⁽³⁾		40			(445	)		4			(151	)
Balance at end of period		(2,053	)		(1,911	)		(804	)		(746	)

Cash flow hedges (J)
Balance at beginning of period		(499	)		(379	)		37			31
Other comprehensive income (loss):
Net change from periodic revaluations		80			(231	)		6			(10	)
Tax (expense) benefit		(12	)		31			(2	)		3
Total Other comprehensive income (loss) before reclassifications, net of tax		68			(200	)		4			(7	)
Net amount reclassified to earnings:
Aluminum contracts⁽⁴⁾		12			34			—			—
Financial contracts⁽⁵⁾		(6	)		(7	)		(7	)		(4	)
Foreign exchange contracts⁽⁴⁾		4			—			—			—
Sub-total		10			27			(7	)		(4	)
Tax benefit (expense)⁽²⁾		1			(2	)		2			1
Total amount reclassified from Accumulated other comprehensive loss, net of tax⁽⁶⁾		11			25			(5	)		(3	)
Total Other comprehensive income (loss)		79			(175	)		(1	)		(10	)
Balance at end of period		(420	)		(554	)		36			21

Total Accumulated other comprehensive loss	$	(4,705	)	$	(4,967	)	$	(815	)	$	(769	)

	Alcoa Corporation						Noncontrolling interest
	Six months ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
Pension and other postretirement benefits (I)
Balance at beginning of period	$	(2,283	)	$	(2,786	)	$	(46	)	$	(47	)
Other comprehensive income:
Unrecognized net actuarial (loss) gain and prior service cost/benefit		(82	)		76			(3	)		3
Tax benefit (expense)		17			(2	)		—			(1	)
Total Other comprehensive (loss) income before reclassifications, net of tax		(65	)		74			(3	)		2
Amortization of net actuarial loss and prior service cost/benefit⁽¹⁾		128			260			2			1
Tax expense⁽²⁾		(12	)		(50	)		—			—
Total amount reclassified from Accumulated other comprehensive loss, net of tax⁽⁶⁾		116			210			2			1
Total Other comprehensive income (loss)		51			284			(1	)		3
Balance at end of period		(2,232	)		(2,502	)		(47	)		(44	)

Foreign currency translation
Balance at beginning of period		(2,071	)		(1,467	)		(810	)		(581	)
Other comprehensive income (loss)⁽³⁾		18			(444	)		6			(165	)
Balance at end of period		(2,053	)		(1,911	)		(804	)		(746	)

Cash flow hedges (J)
Balance at beginning of period		(211	)		(929	)		31			51
Other comprehensive (loss) income:
Net change from periodic revaluations		(272	)		404			33			(30	)
Tax benefit (expense)		54			(68	)		(10	)		9
Total Other comprehensive (loss) income before reclassifications, net of tax		(218	)		336			23			(21	)
Net amount reclassified to earnings:
Aluminum contracts⁽⁴⁾		25			61			—			—
Financial contracts⁽⁵⁾		(32	)		(20	)		(25	)		(13	)
Foreign exchange contracts⁽⁴⁾		8			(1	)		—			—
Sub-total		1			40			(25	)		(13	)
Tax benefit (expense)⁽²⁾		8			(1	)		7			4
Total amount reclassified from Accumulated other comprehensive loss, net of tax⁽⁶⁾		9			39			(18	)		(9	)
Total Other comprehensive (loss) income		(209	)		375			5			(30	)
Balance at end of period		(420	)		(554	)		36			21

Total Accumulated other comprehensive loss	$	(4,705	)	$	(4,967	)	$	(815	)	$	(769	)

⁽¹⁾	These amounts were included in the computation of net periodic benefit cost for pension and other postretirement benefits (see Note I).

⁽²⁾	These amounts were reported in Provision for income taxes on the accompanying Statement of Consolidated Operations.

⁽³⁾	In all periods presented, there were no tax impacts related to rate changes and no amounts were reclassified to earnings.

⁽⁴⁾	These amounts were reported in Sales on the accompanying Statement of Consolidated Operations.

⁽⁵⁾	These amounts were reported in Cost of goods sold on the accompanying Statement of Consolidated Operations.

⁽⁶⁾	A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings. These amounts were reflected on the accompanying Statement of Consolidated Operations in the line items indicated in footnotes 1, 2, 4, and 5.

G. Investments – A summary of unaudited financial information for Alcoa Corporation’s equity investments is as follows (amounts represent 100% of investee financial information):

	Second quarter ended June 30,					Six months ended June 30,
	2019			2018		2019			2018
Sales	$	1,160		$	1,367	$	2,423		$	2,620
Cost of goods sold		935			1,078		1,980			2,038
Net (loss) income		(29	)		32		(77	)		97

During the second quarter of 2019, Alcoa Corporation and Ma’aden amended the joint venture agreement that governs the operations of each of the three companies that comprise the joint venture. The amendment resulted in various changes (described in detail in Note C), effectively divesting the Company’s investment in MRC. The Company will retain its 25.1% minority interest in MBAC and MAC, and Ma’aden will continue to own a 74.9% interest.

H. Inventories

	June 30, 2019		December 31, 2018
Finished goods	$	273	$	346
Work-in-process		304		189
Bauxite and alumina		539		609
Purchased raw materials		501		529
Operating supplies		150		146
	$	1,767	$	1,819

As of January 1, 2019, the Company changed its method for valuing certain of its inventories held in the United States and Canada to the average cost method of accounting from the LIFO method. Inventories held by other subsidiaries of the parent company were previously, and continue to be, valued principally using the average cost method. Management believes that the change in accounting is preferable as it results in a consistent method to value inventory across all regions of the business, it improves comparability with industry peers, and it more closely resembles the physical flow of inventory.

The effects of the change in accounting principle from LIFO to average cost have been retrospectively applied to all periods presented. This change resulted in a favorable adjustment to Retained earnings of $205 and an unfavorable adjustment to Noncontrolling interest of $35 as of January 1, 2018. In addition, certain financial statement line items in the Company’s Statement of Consolidated Operations, Statement of Consolidated Comprehensive Income, and Statement of Consolidated Cash Flows for the second quarter and the six months ended June 30, 2018 and Consolidated Balance Sheet as of December 31, 2018 were adjusted as follows:

	As Originally Reported			Effect of Change			As Adjusted
Statement of Consolidated Operations for the second quarter ended June 30, 2018:
Cost of goods sold	$	2,632		$	121		$	2,753
Provision for income taxes		180			(22	)		158
Net income		230			(99	)		131
Net income attributable to noncontrolling interest		155			(34	)		121
Net income attributable to Alcoa Corporation		75			(65	)		10
Earnings per share attributable to Alcoa Corporation common shareholders:
Basic	$	0.40		$	(0.35	)	$	0.05
Diluted		0.39			(0.34	)		0.05

Statement of Consolidated Comprehensive Income for the second quarter ended June 30, 2018:
Comprehensive loss	$	(366	)	$	(99	)	$	(465	)
Comprehensive loss attributable to noncontrolling interest		(4	)		(34	)		(38	)
Comprehensive loss attributable to Alcoa Corporation		(362	)		(65	)		(427	)

Statement of Consolidated Operations for the six months ended June 30, 2018:
Cost of goods sold	$	5,013		$	42		$	5,055
Provision for income taxes		318			(9	)		309
Net income		504			(33	)		471
Net income attributable to noncontrolling interest		279			(13	)		266
Net income attributable to Alcoa Corporation		225			(20	)		205
Earnings per share attributable to Alcoa Corporation common shareholders:
Basic	$	1.21		$	(0.11	)	$	1.10
Diluted		1.19			(0.10	)		1.09

Statement of Consolidated Comprehensive Income for the six months ended June 30, 2018:
Comprehensive income	$	527		$	(33	)	$	494
Comprehensive income attributable to noncontrolling interest		87			(13	)		74
Comprehensive income attributable to Alcoa Corporation		440			(20	)		420

Consolidated Balance Sheet as of December 31, 2018:
Inventories	$	1,644		$	175		$	1,819
Prepaid expenses and other current assets		301			19			320
Retained earnings		341			229			570
Noncontrolling interest		2,005			(35	)		1,970

Statement of Consolidated Cash Flows for the six months ended June 30, 2018:
Net income	$	504		$	(33	)	$	471
Deferred income taxes		(31	)		(9	)		(40	)
(Increase) in inventories		(267	)		42			(225	)

The following table compares the amounts that would have been reported under LIFO with the amounts recorded under the average cost method in the Consolidated Financial Statements as of June 30, 2019 and for the six months then ended:

	As Computed under LIFO			As Reported under Average Cost			Effect of Change
Statement of Consolidated Operations for the second quarter ended June 30, 2019:
Cost of goods sold	$	2,163		$	2,189		$	26
Provision for income taxes		119			116			(3	)
Net loss		(270	)		(293	)		(23	)
Net income attributable to noncontrolling interest		108			109			1
Net loss attributable to Alcoa Corporation		(378	)		(402	)		(24	)
Earnings per share attributable to Alcoa Corporation common shareholders:
Basic	$	(2.04	)	$	(2.17	)	$	(0.13	)
Diluted		(2.04	)		(2.17	)		(0.13	)

Statement of Consolidated Comprehensive Income for the second quarter ended June 30, 2019:
Comprehensive loss	$	(140	)	$	(163	)	$	(23	)
Comprehensive income attributed to noncontrolling interest		109			110			1
Comprehensive loss attributable to Alcoa Corporation		(249	)		(273	)		(24	)

Statement of Consolidated Operations for the six months ended June 30, 2019:
Cost of goods sold	$	4,391		$	4,369		$	(22	)
Provision for income taxes		256			266			10
Net loss		(363	)		(351	)		12
Net income attributable to noncontrolling interest		235			250			15
Net loss attributable to Alcoa Corporation		(598	)		(601	)		(3	)
Earnings per share attributable to Alcoa Corporation common shareholders:
Basic	$	(3.22	)	$	(3.24	)	$	(0.02	)
Diluted		(3.22	)		(3.24	)		(0.02	)

Statement of Consolidated Comprehensive Income for the six months ended June 30, 2019:
Comprehensive loss	$	(493	)	$	(481	)	$	12
Comprehensive income attributable to noncontrolling interest		245			260			15
Comprehensive loss attributable to Alcoa Corporation		(738	)		(741	)		(3	)

Consolidated Balance Sheet as of June 30, 2019:
Inventories	$	1,573		$	1,767		$	194
Prepaid expenses and other current assets		238			250			12
Retained deficit		(257	)		(31	)		226
Noncontrolling interest		1,984			1,964			(20	)

Statement of Consolidated Cash Flows for the six months ended June 30, 2019:
Net loss	$	(363	)	$	(351	)	$	12
Deferred income taxes		54			64			10
Decrease in inventories		75			53			(22	)

I. Pension and Other Postretirement Benefits – The components of net periodic benefit cost were as follows:

	Second quarter ended June 30,						Six months ended June 30,
Pension benefits	2019			2018			2019			2018
Service cost	$	12		$	14		$	24		$	28
Interest cost⁽¹⁾		56			55			112			114
Expected return on plan assets⁽¹⁾		(82	)		(82	)		(163	)		(172	)
Recognized net actuarial loss⁽¹⁾		42			52			84			107
Amortization of prior service cost⁽¹⁾		2			2			3			4
Settlements⁽²⁾		—			167			—			167
Curtailments⁽²⁾		38			—			38			5
Net periodic benefit cost	$	68		$	208		$	98		$	253

	Second quarter ended June 30,					Six months ended June 30,
Other postretirement benefits	2019		2018			2019		2018
Service cost	$	1	$	1		$	2	$	2
Interest cost⁽¹⁾		10		9			18		18
Recognized net actuarial loss⁽¹⁾		2		4			5		7
Amortization of prior service benefit⁽¹⁾		—		(1	)		—		(1	)
Curtailments⁽²⁾		—		—			—		(28	)
Net periodic benefit cost	$	13	$	13		$	25	$	(2	)

⁽¹⁾	These amounts were reported in Other expenses, net on the accompanying Statement of Consolidated Operations (see Note N).

⁽²⁾	These amounts were reported in Restructuring and other charges, net on the accompanying Statements of Consolidated Operations (see Note C) and of Cash Flows.

In June 2019, the Company entered into a new, six-year collective bargaining agreement with the National Union of Aluminum Employees of Baie-Comeau. Under the agreement, all Canadian union employees that are participants in one of the Company’s defined benefit pension plans will cease accruing retirement benefits for future service effective January 1, 2021. This change will affect approximately 700 employees, who are targeted to be transitioned to a target benefit plan, where the funding risk is assumed by the employees. The Company will contribute approximately 12% of these participants’ eligible earnings on an annual basis. The Company will also contribute additional contributions of approximately $2 over a three-year period to improve the financial position of the newly established target benefit plan. Participants already collecting benefits or who terminated with a vested benefit under the defined benefit pension plan are not affected by these changes.

This action resulted in the curtailment of benefits thereby requiring remeasurement, including an update to the discount rate used to determine benefit obligations, of the affected plan. The following table presents certain information and the financial impacts of this action on the accompanying Consolidated Financial Statements:

Number of

affected

plan

participants

Weighted

average

discount

rate as of

December 31,

2018

Plan

remeasurement

date

Weighted

average

discount rate

as of plan

remeasurement

date

Increase to

accrued

pension

benefits

liability

Curtailment

charge⁽¹⁾

~700

3.85%

May 31, 2019

3.15%

⁽¹⁾	This amount represents the accelerated amortization of a portion of the existing prior service cost and was reclassified from Accumulated other comprehensive loss to Restructuring and other charges, net (see Note C) on the accompanying Statement of Consolidated Operations.

J. Derivatives and Other Financial Instruments

Fair Value

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between (i) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (ii) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances

(unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

•

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

•

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

•

Level 3 - Inputs that are both significant to the fair value measurement and unobservable.

Derivatives

Alcoa Corporation is exposed to certain risks relating to its ongoing business operations, including the risks of changing commodity prices and foreign currency exchange rates. Alcoa Corporation’s commodity and derivative activities include aluminum, energy, and foreign exchange contracts which are held for purposes other than trading. They are used primarily to mitigate uncertainty and volatility, and to cover underlying exposures. Alcoa Corporation is not involved in trading activities for energy, weather derivatives, or other nonexchange commodity trading activities.

Several of Alcoa Corporation’s aluminum, energy, and foreign exchange contracts are classified as Level 1 or Level 2 under the fair value hierarchy. The total fair value of these derivative contracts recorded as assets and liabilities was $3 and $41, respectively, at June 30, 2019 and $2 and $54, respectively, at December 31, 2018. Certain of these contracts are designated as either fair value or cash flow hedging instruments. For the contracts designated as cash flow hedges, Alcoa Corporation recognized an unrealized gain of $5 and an unrealized loss of $3 in the 2019 second quarter and six-month period, respectively, and an unrealized loss of $55 and an unrealized gain of $13 in the 2018 second quarter and six-month period, respectively, in Other comprehensive (loss) income. Additionally, Alcoa Corporation reclassified a realized loss of $8 and $12 in the 2019 second quarter and six-month period, respectively, and $6 and $7 in the 2018 second quarter and six-month period, respectively, from Accumulated other comprehensive (loss) income to Sales.

In addition to the Level 1 and 2 derivative instruments described above, Alcoa Corporation has several derivative instruments classified as Level 3 under the fair value hierarchy. These instruments are composed of (i) embedded aluminum derivatives and an embedded credit derivative related to energy supply contracts and (ii) freestanding financial contracts related to energy purchases made in the spot market, all of which are associated with nine smelters and three refineries. Certain of the embedded aluminum derivatives and financial contracts are designated as cash flow hedging instruments.

Alcoa Corporation had a power contract at one of its facilities which expired in March 2019 that indexed the price of power to the London Metal Exchange (LME) price of aluminum plus the Midwest premium. Prior to its expiration, this embedded derivative was valued using the interrelationship of future metal prices (LME base plus Midwest premium) and the amount of megawatt hours of energy needed to produce the forecasted metric tons of aluminum at the smelter. Management elected not to qualify the embedded derivative for hedge accounting treatment.

In March 2019, Alcoa Corporation and the counterparty to the power contract described above entered into a new power contract which also contains an embedded derivative that indexes the price of power to the LME price of aluminum plus the Midwest premium. The embedded aluminum derivative is valued using the interrelationship of future metal prices (LME base plus Midwest premium) and the amount of megawatt hours of energy needed to produce the forecasted metric tons of aluminum at the smelter. An overall increase in actual LME price and the Midwest premium will result in a higher cost of power and a corresponding decrease to the derivative asset or increase to the derivative liability. The embedded derivative has been designated as a cash flow hedge of forward sales of aluminum. Unrealized gains and losses will be included in Accumulated other comprehensive loss on the accompanying Consolidated Balance Sheet while realized gains and losses will be included in Sales on the accompanying Statement of Consolidated Operations.

The following table presents quantitative information related to the significant unobservable inputs for Level 3 derivative instruments:


	Fair value at June 30, 2019		Unobservable input	Range ($ in full amounts)
Assets:

Financial contract		132	Interrelationship of forward energy price and the Consumer Price Index and price of electricity beyond forward curve	Electricity: $73.85 per megawatt hour in 2019 to $53.33 per megawatt hour in 2021

Liabilities:

Embedded aluminum derivative		236	Interrelationship of LME price to the amount of megawatt hours of energy needed to produce the forecasted metric tons of aluminum	Aluminum: $1,782 per metric ton in 2019 to $2,373 per metric ton in 2027 Electricity: rate of 4 million megawatt hours per year

Embedded aluminum derivatives		275	Price of aluminum beyond forward curve	Aluminum: $2,473 per metric ton in October 2029 to $2,481 per metric ton in December 2029 (two contracts) and $2,772 per metric ton in 2036 (one contract) Midwest premium: $0.1850 per pound in 2019, 2029 (two contracts) and 2036 (one contract)

Embedded aluminum derivative		-	Interrelationship of LME price to the amount of megawatt hours of energy needed to produce the forecasted metric tons of aluminum	Aluminum: $1,782 per metric ton in July 2019 to $1,800 per metric ton in September 2019 Midwest premium: $0.1850 per pound in July 2019 and to $0.1900 per pound in September 2019 Electricity: rate of 2 million megawatt hours per year

Embedded aluminum derivative		4	Interrelationship of LME price to overall energy price	Aluminum: $1,824 per metric ton in July 2019 to $1,847 per metric ton in December 2019

Embedded credit derivative		20	Estimated spread between the respective 30-year debt yield of Alcoa Corporation and the counterparty	3.19% (30-year debt yields: Alcoa Corporation – 6.94% (estimated) and counterparty – 3.75%)

The fair values of Level 3 derivative instruments recorded as assets and liabilities in the accompanying Consolidated Balance Sheet were as follows:

	June 30, 2019		December 31, 2018
Asset Derivatives
Derivatives designated as hedging instruments:
Fair value of derivative instruments – current:
Financial contract	$	77	$	70
Fair value of derivative instruments – noncurrent:
Embedded aluminum derivatives		—		41
Financial contract		55		42
Total derivatives designated as hedging instruments		132		153
Total Asset Derivatives	$	132	$	153
Liability Derivatives
Derivatives designated as hedging instruments:
Fair value of derivative instruments – current:
Embedded aluminum derivatives	$	43	$	46
Fair value of derivative instruments – noncurrent:
Embedded aluminum derivatives		472		218
Total derivatives designated as hedging instruments		515		264
Derivatives not designated as hedging instruments:
Fair value of derivative instruments – current:
Embedded aluminum derivative		—		5
Embedded credit derivative		4		4
Fair value of derivative instruments – noncurrent:
Embedded credit derivative		16		16
Total derivatives not designated as hedging instruments		20		25
Total Liability Derivatives	$	535	$	289

The following tables present a reconciliation of activity for Level 3 derivative instruments:

	Assets				Liabilities
Second quarter ended June 30, 2019		Financial contracts			Embedded aluminum derivatives			Embedded credit derivative
Balance at April 1, 2019		$	137		$	594		$	21
Total gains or losses (realized and unrealized) included in:
Sales			—			(12	)		—
Cost of goods sold			(17	)		—			(2	)
Other expenses, net			—			—			1
Other comprehensive income (loss)			14			(66	)		—
Other			(2	)		(1	)		—
Balance at June 30, 2019		$	132		$	515		$	20
Change in unrealized gains or losses included in earnings for derivative instruments held at June 30, 2019:
Other expenses, net		$	—		$	—		$	1

	Assets						Liabilities
Six months ended June 30, 2019	Embedded aluminum derivatives			Financial contracts			Embedded aluminum derivatives			Embedded credit derivative
Opening balance – January 1, 2019	$	41		$	112		$	269		$	20
Total gains or losses (realized and unrealized) included in:
Sales		—			—			(25	)		—
Cost of goods sold		—			(59	)		—			(2	)
Other expenses, net		—			—			(2	)		2
Other comprehensive (loss) income		(41	)		82			278			—
Other		—			(3	)		(5	)		—
Closing balance – June 30, 2019	$	—		$	132		$	515		$	20
Change in unrealized gains or losses included in earnings for derivative instruments held at June 30, 2019:
Other expenses, net	$	—		$	—		$	(2	)	$	2

In the first quarter of 2019, there was an expiration of an existing and an issuance of a new embedded aluminum derivative (see above). In the 2019 six-month period, there were no purchases, sales or settlements of Level 3 derivative instruments. Additionally, there were no transfers of derivative instruments into or out of Level 3.

Derivatives Designated As Hedging Instruments – Cash Flow Hedges

Alcoa Corporation has six Level 3 embedded aluminum derivatives and one Level 3 financial contract that have been designated as cash flow hedges.

At June 30, 2019 and December 31, 2018, these embedded aluminum derivatives hedge forecasted aluminum sales of 2,450 kmt and 2,508 kmt, respectively. Assuming market rates remain constant with the rates at June 30, 2019, a realized loss of $43 is expected to be recognized in Sales over the next 12 months. There was no ineffectiveness related to these six derivative instruments in the 2019 and 2018 second quarter and six-month periods.

At June 30, 2019 and December 31, 2018, the financial contract hedges forecasted electricity purchases of 5,129,784 and 6,348,276 megawatt hours, respectively. Assuming market rates remain consistent with the rates at June 30, 2019, a realized gain of $77 is expected to be recognized in Cost of goods sold over the next 12 months. There was no ineffectiveness related to this derivative instrument in the second quarter and six-month period of 2019. The amount of hedge ineffectiveness related to this derivative instrument was not material in the 2018 second quarter and six-month period.

Material Limitations

The disclosures with respect to commodity prices and foreign currency exchange risk do not consider the underlying commitments or anticipated transactions. If the underlying items were included in the analysis, the gains or losses on the futures contracts may be offset. Actual results will be determined by several factors that are not under Alcoa Corporation’s control and could vary significantly from those factors disclosed.

Alcoa Corporation is exposed to credit loss in the event of nonperformance by counterparties on the above instruments, as well as credit or performance risk with respect to its hedged customers’ commitments. Alcoa Corporation does not anticipate nonperformance by any of these parties. Contracts are with creditworthy counterparties and are further supported by cash, treasury bills, or irrevocable letters of credit issued by carefully chosen banks. In addition, various master netting arrangements are in place with counterparties to facilitate settlement of gains and losses on these contracts.

Other Financial Instruments

The carrying values and fair values of Alcoa Corporation’s other financial instruments were as follows:

	June 30, 2019				December 31, 2018
	Carrying value		Fair value		Carrying value		Fair value
Cash and cash equivalents	$	834	$	834	$	1,113	$	1,113
Restricted cash		3		3		3		3
Long-term debt due within one year		1		1		1		1
Long-term debt, less amount due within one year		1,804		1,944		1,801		1,863

The following methods were used to estimate the fair values of other financial instruments:

Cash and cash equivalents and Restricted cash. The carrying amounts approximate fair value because of the short maturity of the instruments. The fair value amounts for Cash and cash equivalents and Restricted cash were classified in Level 1 of the fair value hierarchy.

Long-term debt due within one year and Long-term debt, less amount due within one year. The fair value was based on quoted market prices for public debt and on interest rates that are currently available to Alcoa Corporation for issuance of debt with similar terms and maturities for non-public debt. The fair value amounts for all Long-term debt were classified in Level 2 of the fair value hierarchy.

K. Income Taxes – Alcoa Corporation’s estimated annualized effective tax rate (AETR) for 2019 was 137.1% as of June 30, 2019. This rate differs from the U.S. federal statutory rate of 21% primarily due to foreign income taxed in higher rate jurisdictions, as well as losses in countries with full valuation reserves resulting in no tax benefit.

	Six-months ended June 30,
	2019			2018
(Loss) income before income taxes	$	(85	)	$	780
Estimated annualized effective tax rate		137.1	%		40.1	%
Income tax (benefit) expense	$	(116	)	$	313
Unfavorable (favorable) tax impact related to losses in jurisdictions with no tax benefit		381			(4	)
Discrete tax charge		1			—
Provision for income taxes	$	266		$	309

The Provision for income taxes for the 2019 six-month period includes a $60 charge resulting from the change in estimated AETR from 72.2% in the first quarter of 2019 to 137.1% in the second quarter of 2019. The change in estimated AETR is due primarily to fluctuating alumina and aluminum market prices that result in changes to the distribution of the (Loss) income before income taxes in the Company’s various tax jurisdictions, inclusive of those which receive no tax benefit from generated losses.

L. Leasing

As a result of adoption of ASU No. 2016-02, Leases, management recorded a right-of-use asset and lease liability, each in the amount of $201, on Alcoa Corporation’s Consolidated Balance Sheet as of January 1, 2019 for several types of operating leases, including land and buildings, alumina refinery process control technology, plant equipment, vehicles, and computer equipment. These amounts are equivalent to the aggregate future lease payments on a discounted basis. The leases have remaining terms of one to 39 years. The discount rate applied to these leases is the Company’s incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments, unless there is a rate implicit in the lease agreement. Lease expense for the three-months ended June 30, 2019, includes costs from operating leases of $20, short-term rental expense of $1 and variable lease payments of $5. Lease expense for the six-months ended June 30, 2019, includes costs from operating leases of $39, short-term rental expense of $4 and variable lease payments of $8. New leases of $7 were added during the three and six-months ended June 30, 2019. The Company does not have material financing leases.

The following represents the aggregate right-of use assets and related lease obligations as of June 30, 2019:

Amounts recognized in the Consolidated Balance Sheet at June 30, 2019:
Properties, plants and equipment, net	$	175
Other current liabilities		66
Other noncurrent liabilities and deferred credits		109
Total operating lease liabilities	$	175

The weighted average lease term and weighted average discount rate as of June 30, 2019 were as follows:

Weighted average lease term
Operating leases		4.1 years
Weighted average discount rate
Operating leases		5.3%

The future cash flows related to the operating lease obligations as of June 30, 2019 were as follows:

Year Ending December 31,	Operating leases
2019 (excluding the six months ended June 30)	$	41
2020		68
2021		51
2022		18
2023		10
Thereafter		22
Total lease payments (undiscounted)		210
Less: discount to net present value		(35	)
Total	$	175

Disclosures related to periods presented prior to the adoption of ASU No. 2016-02

The Company adopted ASU No. 2016-02, Leases, on January 1, 2019 using the modified retrospective approach which requires the following disclosure for periods presented prior to adoption. The following table represents minimum annual lease commitments as of December 31, 2018 under long-term operating leases:

Year Ending December 31,	Operating leases
2019	$	74
2020		56
2021		42
2022		11
2023		5
Thereafter		21
Total lease payments	$	209

M. Contingencies and Commitments

Contingencies

Environmental Matters

Alcoa Corporation participates in environmental assessments and cleanups at several locations. These include currently or previously owned or operated facilities and adjoining properties, and waste sites, including Superfund (Comprehensive Environmental Response, Compensation and Liability Act (CERCLA)) sites.

A liability is recorded for environmental remediation when a cleanup program becomes probable and the costs can be reasonably estimated. As assessments and cleanups proceed, the liability is adjusted based on progress made in determining the extent of remedial actions and related costs. The liability can change substantially due to factors such as, among others, the nature and extent of contamination, changes in remedial requirements, and technology advancements.

Alcoa Corporation’s environmental remediation reserve balance reflects the most probable costs to remediate identified environmental conditions for which costs can be reasonably estimated. The following table details the changes in the carrying value of recorded environmental remediation reserves:

Balance at December 31, 2017	$	294
Cash payments		(25	)
Liabilities incurred		19
Reversals of previously recorded liabilities		(3	)
Foreign currency translation and other		(5	)
Balance at December 31, 2018		280
Cash payments		(10	)
Liabilities incurred		2
Reversals of previously recorded liabilities		(1	)
Balance at June 30, 2019	$	271

At June 30, 2019 and December 31, 2018, the current portion of Alcoa Corporation’s environmental remediation reserve balance was $34 and $44, respectively. In the second quarter and six-month period of 2019, the Company incurred liabilities of $1 and $2, respectively, due to charges related to increases for ongoing monitoring and maintenance. These charges are recorded in Cost of goods sold on the accompanying Statement of Consolidated Operations.

In the second quarter and six-month period of 2018 the remediation reserve was increased by $15 due to a charge of $9 related to the former Sherwin location (see below), a reversal of $2 related to the Portovesme location (unrelated to the Italy matter below), and a charge of $8 associated with several sites. Of the changes to the reserve in the second quarter and six-month period of 2018, a charge of $15 was recorded in Cost of goods sold and both a charge of $2 and a reversal of $2 were recorded in Restructuring and other charges, net on the accompanying Statement of Consolidated Operations.

The estimated timing of cash outflows on the environmental remediation reserve at June 30, 2019 is as follows:

2019	$	21
2020 - 2024		130
Thereafter		120
Total	$	271

Reserve balances at June 30, 2019 and December 31, 2018, associated with significant sites with active remediation underway or for future remediation were $208 and $214, respectively. In management’s judgment, the Company’s reserves are sufficient to satisfy the provisions of the respective action plans. Upon changes in facts or circumstances, a change to the reserve may be required. The Company’s significant sites include:

Pocos de Caldas, Brazil—Associated with the 2015 closure of the Alcoa Alumínio S.A. smelter in Pocos de Caldas, Brazil, an environmental remediation reserve was established for remediation of historic spent potlining storage and disposal areas. The final remediation plan is currently under review; such review could require the reserve balance to be adjusted.

Fusina and Portovesme, Italy—Alcoa Corporation’s subsidiary Alcoa Trasformazioni S.r.l. (Trasformazioni) has remediation projects underway for its closed smelter sites at Fusina (Italy) and Portovesme (Italy). Cleanup plans at both sites have been approved by the Italian Ministry of Environment and Protection of Land and Sea (MOE). For the Fusina site, Trasformazioni began work on a soil remediation project in October 2017 and expects to complete the project in 2020. Additionally, Trasformazioni agreed to make annual payments to MOE over a 10-year period, ending in 2022, for groundwater emergency containment and natural resource damages related to the Fusina site. For the Portovesme site, Trasformazioni began work on a soil remediation project in mid-2016 and expects it to be complete by the end of 2019. Additionally, Trasformazioni participates in a groundwater remediation project which will not have a final remedial design completed until mid-2020; such design conclusion may result in a change to the existing reserve for Portovesme.

Suriname—Associated with the 2017 closure of the Suralco refinery and bauxite mine, an environmental remediation reserve was established for treatment and disposal of refinery waste and soil remediation. The work began in 2017 and is expected to be completed at the end of 2025.

Hurricane Creek, Arkansas—The Company, through its subsidiaries, operated two mining areas and refineries near Hurricane Creek, Arkansas, before their closure in 1990. In accordance with regulations, the Company is responsible for ongoing monitoring and maintenance for water quality surrounding the mine areas and residue disposal areas. In instances where the Company has ongoing monitoring and maintenance responsibilities, it is Alcoa Corporation’s policy is to maintain a reserve equal to five years of expected costs.

Massena, New York—Associated with the closure of the Massena East smelter by the Company’s subsidiary, Reynolds Metals Company, in 2015, an environmental remediation reserve was established for subsurface soil remediation to be performed after demolition of the structures. Remediation work is expected to commence in 2020 and will take four to eight years to complete.

Sherwin, Texas—In connection with the 2018 settlement of a dispute related to the previously-owned Sherwin alumina refinery, the Company’s subsidiary, Copano Enterprises LLC, accepted responsibility for the final closure of four bauxite residue waste disposal areas (known as the Copano facility). Work commenced on the first residue bed in 2018 and will take eight to twelve years to complete, depending on the nature of its potential re-use. Work on the next three beds has not commenced but is expected to be completed by 2048, depending on its potential re-use. See Sherwin in the Other section below for a complete description of this matter.

Longview, Washington—In connection with a 2018 Consent Decree and Cleanup Action Plan with the State of Washington Department of Ecology, the Company’s subsidiary, Northwest Alloys, accepted certain responsibilities for future remediation of contaminated soil and sediments at the site located near Longview, Washington.

Other Sites—The Company is in the process of decommissioning various other plants in several countries. As a result, redeveloping these sites for reuse or returning the land to a natural state requires the performance of certain remediation activities. In aggregate, there are approximately 35 remediation projects planned or underway. These activities will be completed at various times in the future with the latest expected to be in 2026, after which ongoing monitoring and other activities may be required. At June 30, 2019 and December 31, 2018, the reserve balance associated with these activities was $63 and $66, respectively.

Tax

Spain—In July 2013, following a corporate income tax audit covering the 2006 through 2009 tax years, an assessment was received from Spain’s tax authorities disallowing certain interest deductions claimed by ParentCo’s Spanish consolidated tax group. ParentCo filed an appeal of this assessment and provided financial assurance in the form of both a bank guarantee (Arconic) and a lien secured with the San Ciprian smelter (Alcoa Corporation) to Spain’s tax authorities. In January 2015, Spain’s Central Tax Administrative Court denied ParentCo’s appeal of this assessment. Two months later, ParentCo filed an appeal of the assessment in Spain’s National Court (the National Court). The amount of this assessment, including interest, was $152 (€131) as of June 30, 2018.

On July 6, 2018, the National Court denied ParentCo’s appeal of the assessment; however, the decision includes a requirement that Spain’s tax authorities issue a new assessment, which considers available net operating losses of the former Spanish consolidated tax group from prior tax years that can be utilized during the assessed tax years. Spain’s tax authorities will not issue a new assessment until this matter is resolved; however, based on estimated calculations completed by Arconic and Alcoa Corporation (collectively, the Companies), the amount of the new assessment, including applicable interest, is expected to be in the range of $25 to $61 (€21 to €53) after consideration of available net operating losses and tax credits. Under the Tax Matters Agreement related to the Separation Transaction, Arconic and Alcoa Corporation are responsible for 51% and 49%, respectively, of the assessed amount in the event of an unfavorable outcome. On November 8, 2018, the Companies filed a petition for appeal to Spain’s Supreme Court, to which Spain’s tax authorities have filed their opposition.

In March 2019, the Spanish Supreme Court accepted the Companies’ petition for appeal which allowed the Companies to prepare and submit an appeal on May 6, 2019.

Notwithstanding the appeal process, based on a review of the basis on which the National Court decided this matter, Alcoa Corporation management no longer believed that the Companies were more likely than not (greater than 50%) to prevail in this matter. Accordingly, in the third quarter of 2018, Alcoa Corporation recorded a charge of $30 (€26) in Provision for income taxes to establish a liability for its 49% share of the estimated loss in this matter, representing management’s best estimate at the time. As the appeal progresses or when the Companies receive an updated assessment from Spain’s tax authorities, management may revise its estimated liability.

Separately, in January 2017, the National Court issued a decision in favor of the former Spanish consolidated tax group related to a similar assessment for the 2003 through 2005 tax years, effectively making that assessment null and void. Additionally, in August 2017, in lieu of receiving a formal assessment, the Companies reached a settlement with Spain’s tax authorities for the 2010 through 2013 tax years that had been under audit for a similar matter. Alcoa Corporation’s share of this settlement was not material to the Company’s Consolidated Financial Statements. The ultimate outcomes related to the 2003 through 2005 and the 2010 through 2013 tax years are not indicative of the potential ultimate outcome of the assessment for the 2006 through 2009 tax years due to procedural differences. Also, it is possible that the Companies may receive similar assessments for tax years subsequent to 2013; however, management does not expect any such assessment, if received, to be material to Alcoa Corporation’s Consolidated Financial Statements.

Brazil (AWAB)—In March 2013, 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. The value-added tax credits were claimed by AWAB for both fixed assets and export sales related to the Juruti bauxite mine and São Luís refinery expansion. The RFB has disallowed credits they allege belong to the consortium in which AWAB owns an interest and should not have been claimed by AWAB. Credits have also been disallowed as a result of challenges to apportionment methods used, questions about the use of the credits, and an alleged lack of documented proof. AWAB presented defense of its claim to the RFB on April 8, 2013. If AWAB is successful in this administrative process, the RFB would have no further recourse. If unsuccessful in this process, AWAB has the option to litigate at a judicial level. Separately from AWAB’s administrative appeal, in June 2015, new tax law was enacted repealing the provisions in the tax code that were the basis for the RFB assessing a 50% penalty in this matter. As such, the estimated range of reasonably possible loss for these matters is $0 to $57. It is management’s opinion that the allegations have no basis; however, at this time, the Company is unable to reasonably predict an outcome for this matter.

Other

Reynolds—In 2000, ParentCo acquired Reynolds Metals Company (Reynolds, a subsidiary of Alcoa Corporation), which included an alumina refinery in Gregory, Texas. As a condition of the Reynolds acquisition, ParentCo was required to divest this alumina refinery. Under the terms of the divestiture, ParentCo agreed to retain responsibility for certain environmental obligations and assigned to the buyer an Energy Services Agreement (ESA) with Gregory Power Partners (Gregory Power) for purchase of steam and electricity by the refinery.

In January 2016, Sherwin Alumina Company, LLC (Sherwin), a successor owner of the refinery previously owned by Reynolds, filed for bankruptcy due to its inability to continue its bauxite supply agreement. As a result of Sherwin’s bankruptcy filing, separate legal actions were initiated against Reynolds by Sherwin and Gregory Power.

Sherwin: This matter sought to determine responsibility for remediation of environmental conditions at the Sherwin refinery site and related bauxite residue waste disposal areas (known as the Copano facility). In May 2018, Reynolds and Sherwin concluded a settlement agreement, which was accepted by the bankruptcy court in June 2018, that assigned to Reynolds all environmental liabilities associated with the Copano facility and assigned to Sherwin all environmental liabilities associated with the Sherwin refinery site. At June 30, 2019, the Company had a reserve of $38 for its share of environmental-related matters at Copano facility. (See Sherwin, Texas in Environmental Matters above.)

Gregory Power: In January 2016, Gregory Power delivered notice to Reynolds that Sherwin’s bankruptcy filing constitutes a breach of the ESA. Since that time, various responses, complaints and motions have been actioned, including the addition of Allied Alumina LLC (Allied) to an amended complaint. (Sherwin operated as a subsidiary of Allied.) In May 2019, a settlement agreement was reached between Gregory Power, Allied and Reynolds in which all claims pending against the parties will be voluntarily dismissed. The settlement is conditioned on the execution of various commercial agreements, which have been executed by the parties. On June 2, 2019, the Court entered a Stipulation of Dismissal, formally concluding the litigation. The settlement does not have an impact on the Consolidated Financial Statements.

General

In addition to the matters discussed above, various other lawsuits, claims, and proceedings have been or may be instituted or asserted against Alcoa Corporation, including those pertaining to environmental, safety and health, commercial, tax, product liability, intellectual property infringement, employment, and employee and retiree benefit matters, and other actions and claims arising out of the normal course of business. While the amounts claimed in these other matters may be substantial, the ultimate liability is not readily determinable because of the considerable uncertainties that exist. Accordingly, it is possible that the Company’s liquidity or results of operations in a particular period could be materially affected by one or more of these other matters. However, based on facts currently available, management believes that the disposition of these other matters that are pending or asserted will not have a material adverse effect, individually or in the aggregate, on the financial position of the Company.

Commitments

Investments

In December 2009, Alcoa Corporation invested in a joint venture related to the ownership and operation of an integrated aluminum complex (bauxite mine, alumina refinery, aluminum smelter, and rolling mill) in Saudi Arabia. The joint venture is owned 74.9% by Ma’aden and 25.1% by Alcoa Corporation, and originally consisted of three separate companies: the MBAC, MAC, and MRC. Alcoa Corporation divested its ownership interest in MRC in the second quarter of 2019 as described in Note C. Alcoa Corporation accounts for its investment in the joint venture under the equity method as one integrated investment asset, consistent with the terms of the joint venture agreement. As of June 30, 2019 and December 31, 2018, the carrying value of Alcoa Corporation’s investment in this joint venture was $638 and $874, respectively.

At the time of closing, MRC had project financing totaling $1,179, of which $296 represented Alcoa Corporation’s 25.1% interest in the rolling mill company prior to the divestiture. Alcoa Corporation had issued guarantees (see below) to the lenders in the event of default on the debt service requirements by MRC through 2018 and 2021 (Ma’aden issued similar guarantees related to its 74.9% interest). Alcoa Corporation’s guarantees for MRC covered total remaining debt service requirements of $50 in principal and up to a maximum of approximately $10 in interest per year (based on projected interest rates). Previously, Alcoa Corporation issued similar guarantees related to the project financing of both MAC and MBAC. In December 2017 and July 2018, MAC and MBAC, respectively, refinanced and/or amended all of their existing outstanding debt. The guarantees that were previously required of the Company related to both MAC and MBAC were effectively terminated. At December 31, 2018, the combined fair value of the guarantees was $1, which was included in Other noncurrent liabilities and deferred credits on the accompanying Consolidated Balance Sheet. As part of Alcoa Corporation’s divestiture of MRC, the guarantee related to MRC was effectively terminated.

N. Other Expenses, Net

	Second quarter ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
Equity loss (income)	$	15		$	(3	)	$	27		$	(1	)
Foreign currency losses (gains), net		5			(30	)		17			(27	)
Net loss (gain) from asset sales		7			2			(1	)		(3	)
Net loss (gain) on mark-to-market derivative instruments (J)		—			6			—			(11	)
Non-service costs – Pension & OPEB (I)		30			39			59			77
Other		(7	)		(5	)		(11	)		(5	)
	$	50		$	9		$	91		$	30

O. Subsequent Events

On June 26, 2019, management of the Aluminerie de Bécancour Inc. (ABI) smelter in Québec, Canada presented a final offer to the United Steelworkers for a new six-year labor agreement. The smelter, which is owned by Alcoa Corporation (74.95%) and Rio Tinto Alcan Inc. (25.05%), had been operating at reduced capacity since January 11, 2018 after union members rejected a proposed labor contract for hourly employees. On July 2, 2019, members of the United Steelworkers union in Québec approved the agreement and ABI announced a plan to begin the restart process on July 26, 2019. A recall of the approximately 900 unionized employees who had been on lockout will be completed in accordance with a specific back-to-work protocol, with those on lockout generally being recalled within eight months of the July 26, 2019 restart process commencement. The restart process is expected to be completed within the second quarter of 2020. The Company expects to record charges associated with the restart of approximately $40 to $50 (approximately $30 to $35 after-tax), each in the second half of 2019 and in the first half of 2020.

In January 2019, Alcoa Corporation reached an agreement with the workers’ representatives at the Avilés and La Coruña (Spain) aluminum facilities as part of the collective dismissal process announced in October 2018 and curtailed the smelters at these two locations in February 2019. As part of the agreement, the Company agreed to conduct a sale process to identify third parties with interest in acquiring the facilities and maintain the smelters in restart condition up to June 30, 2019. Through the sale process, PARTER, a private equity investment firm, was identified as a potential buyer for both of the Spanish facilities, inclusive of the smelters and casthouses at both facilities and the paste plant at La Coruña. Prior to the June 30, 2019 deadline, Alcoa Corporation agreed with the workers’ representatives to extend the timeline for the potential buyer to meet the financial conditions of a draft share purchase agreement by one week. On July 5, 2019, Alcoa Corporation signed a conditional share purchase agreement with PARTER for the purchase of these two facilities. The agreement was subject to PARTER meeting certain financial conditions prior to July 31, 2019 to support future operations. Prior to signing the conditional share purchase agreement with PARTER, Alcoa Corporation reached agreement with the workers’ representatives related to the potential transaction. If PARTER was not able to meet the financial

conditions prior to July 31, 2019, the Company would have proceeded with the collective dismissal and social plan as of August 1, 2019.

As of July 31, 2019, PARTER was able to meet the financial conditions and the transaction has closed. Alcoa Corporation will record restructuring-related charges of approximately $135 in the third quarter of 2019 resulting from a cash contribution of $95 to PARTER per the agreement and a charge of approximately $40 to meet a working capital commitment and write-off of the remaining net book value of plants’ assets.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

(dollars in millions, except per-share amounts, average realized prices, and average cost amounts; dry metric tons in millions (mdmt); metric tons in thousands (kmt))

References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to ParentCo refer to Alcoa Inc., a Pennsylvania corporation, and its consolidated subsidiaries (through October 31, 2016, at which time it was renamed Arconic Inc. (Arconic)). On November 1, 2016 (the Separation Date), ParentCo separated into two standalone, publicly-traded companies, Alcoa Corporation and Arconic (the Separation Transaction). In connection with the Separation Transaction, as of October 31, 2016, the Company and Arconic entered into several agreements to affect the Separation Transaction, including a Separation and Distribution Agreement and a Tax Matters Agreement. See Overview in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II Item 7 of Alcoa Corporation’s Annual Report on Form 10-K for the year ended December 31, 2018 for additional information.

Results of Operations

Selected Financial Data:

	Second quarter ended June 30,					Six months ended June 30,
	2019			2018		2019			2018
Sales	$	2,711		$	3,579	$	5,430		$	6,669
Net (loss) income attributable to Alcoa Corporation	$	(402	)	$	10	$	(601	)	$	205
Diluted (loss) earnings per share attributable to Alcoa Corporation common shareholders	$	(2.17	)	$	0.05	$	(3.24	)	$	1.09
Shipments of alumina (kmt)		3,369			3,316		6,670			6,789
Shipments of aluminum products (kmt)		724			853		1,433			1,647
Average realized price per metric ton of alumina	$	376		$	467	$	381		$	425
Average realized price per metric ton of primary aluminum	$	2,167		$	2,623	$	2,193		$	2,556

Net loss attributable to Alcoa Corporation was $402 in the second quarter of 2019 compared with net income of $10 in the second quarter of 2018. The decrease in results of $412 was principally related to lower alumina and metal prices, higher maintenance costs in the Alumina segment, and higher total Restructuring and other charges, net (see below). The unfavorable changes were partially offset by favorable product pricing and mix in the Alumina and Aluminum segments, higher volumes in the Alumina segment, favorable currency impacts of the Australian dollar and euro, and a lower Provision for income taxes.

Net loss attributable to Alcoa Corporation was $601 in the 2019 six-month period compared with net income attributable to Alcoa Corporation of $205 in the 2018 six-month period. The decrease in results of $806 was due to declining metal and alumina prices, unfavorable energy and higher Restructuring and other charges, net. These unfavorable changes were partially offset by favorable currency impacts of the Australian dollar and euro against the U.S. dollar, favorable product mix in the Alumina segment, and higher volumes, primarily in the Alumina segment.

Sales— Sales declined $868, or 24%, and $1,239, or 19%, in the second quarter and six-month period of 2019, respectively, compared with the same periods in 2018. The decrease for both periods was largely attributable to lower metal and alumina prices and lower metal trading volume. Compared with the 2018 periods, flat-rolled aluminum product sales were also lower due to the end of the tolling arrangement with Arconic in December 2018.

Cost of goods sold— As a percentage of Sales, Cost of goods sold was 80.7% in the second quarter of 2019 and 80.5% in the 2019 six-month period compared with 76.9% in the second quarter of 2018 and 75.8% in the 2018 six-month period. The 2019 percentages were negatively impacted by lower prices for alumina and aluminum products along with unfavorable energy and maintenance related expenses.

Selling, general administrative, and other expenses— Selling, general administrative, and other expenses increased by $4, or 6%, and $21, or 16%, in the second quarter and six-month period of 2019, respectively, compared with the corresponding periods in 2018 primarily due to higher consulting and information technology costs combined with costs to support the Spanish collective dismissal process. The 2019 six-month period also includes the unfavorable impact of the recording of a bad debt reserve against a Canadian customer receivable due to bankruptcy.

Provision for depreciation, depletion, and amortization— Provision for depreciation, depletion, and amortization decreased $18, or 9%, and $40, or 10%, in the second quarter and six-month period of 2019, respectively, compared with the corresponding periods in 2018. The decreases are primarily due to a group of assets related to ParentCo’s 1998 acquisition of Alumax reaching the end of their depreciable lives along with favorable foreign currency impacts on the US dollar, primarily against the Brazilian real and the Australian dollar.

Restructuring and other charges, net— In the second quarter and six-month period of 2019, Alcoa Corporation recorded Restructuring and other charges, net of $370 and $483, respectively, which were comprised of the following components: $5 and $108, respectively, for exit costs related to the curtailment of the Avilés and La Coruña smelters in Spain (see below); $38 (both periods) related to the curtailment of certain pension benefits (see Note I); $319 (both periods) related to the divestiture of Alcoa Corporation’s interest in the Ma’aden Rolling Company (MRC) (see below); $1 and $8, respectively, for closure costs related to a coal mine; and $7 and $10, respectively, for net charges related to various items.

In January 2019, Alcoa Corporation reached an agreement with the workers’ representatives at the Avilés and La Coruña (Spain) aluminum facilities as part of the collective dismissal process announced in October 2018 and curtailed the smelters at these two locations, with a combined remaining operating capacity of 124 kmt, in February 2019. As part of the agreement, the Company agreed to maintain the smelters in restart condition and conduct a sale process to identify third parties with interest in acquiring the facilities through June 30, 2019. The casthouse at each facility and the paste plant at La Coruña have remained in operation. On June 30, 2019, the Company was in the process of negotiating a draft agreement with a potential buyer, PARTER. Alcoa Corporation agreed with the workers’ representatives to extend the June 30, 2019 timeline by one week for PARTER to meet the financial conditions of the draft share purchase agreement. On July 5, 2019, Alcoa Corporation signed a conditional share purchase agreement with PARTER for the purchase of the two facilities. The agreement was subject to PARTER meeting certain financial conditions prior to July 31, 2019 to support future operations. Prior to signing the agreement with PARTER, Alcoa Corporation reached agreement with the workers’ representatives related to the potential transaction. See Note O to the Consolidated Financial Statements in Part I of this Form 10-Q for additional information.

Restructuring charges recorded in the first quarter of 2019 related to the collective dismissal process included asset impairments of $80, employee-related costs of $15 and contract termination costs of $8. Additional charges recorded in the first quarter included a $15 write down of remaining inventories to their net realizable value, which was recorded in Cost of goods sold, and $2 in miscellaneous charges recorded in Selling, general administrative, and other expenses on the Statement of Consolidated Operations in Part I Item 1 of this Form 10-Q. Restructuring charges recorded in the second quarter of 2019 related to this process are comprised of severance costs of $3 and other employee-related costs of $2.

•

Alcoa Corporation and Ma’aden consented to the write-off of $235 of MRC’s delinquent payables to MAC;

•

Alcoa Corporation transferred its 25.1% interest in MRC to Ma’aden and, as a result, has no further direct or indirect equity interest in MRC;

•

Alcoa Corporation is released from all future MRC obligations, including Alcoa Corporation’s sponsor support of $296 of MRC debt (see Note M to the Consolidated Financial Statements in Part 1 Item 1 of this Form 10-Q) and its share of any future MRC cash requirements; and,

•

Alcoa Corporation does not include Restructuring and other charges, net in the results of its reportable segments. The impact of allocating such charges to segment results would have been as follows:

	Second quarter ended June 30,					Six months ended June 30,
	2019			2018		2019		2018
Bauxite	$	(1	)	$	—	$	—	$	—
Alumina		—			3		1		2
Aluminum		353			79		460		84
Segment total		352			82		461		86
Corporate		18			149		22		126
Total Restructuring and other charges, net	$	370		$	231	$	483	$	212

Other expenses, net— Other expenses, net was $50 in the second quarter of 2019 compared with $9 in the second quarter of 2018, and $91 in the 2019 six-month period compared with $30 in the 2018 six-month period. The unfavorable change of $41 in the second quarter of 2019 was largely attributable to the unfavorable change in foreign currency movements and an unfavorable change in Alcoa Corporation’s share of equity method investment earnings. The unfavorable impacts were partially offset by lower non-service costs related to pension and other postretirement employee benefit plans and a favorable change in mark-to-market impacts on derivative instruments.

The unfavorable change of $61 in the comparable six-month periods was largely attributed to the unfavorable change in foreign currency movements, an unfavorable change in Alcoa Corporation’s share of equity method investment earnings, and the absence of favorable changes in mark-to-market impacts on derivative instruments. The unfavorable impacts were partially offset by lower non-service costs related to pension and other postretirement employee benefits.

Provision for income taxes— Alcoa Corporation’s estimated AETR for 2019 was 137.1% as of June 30, 2019. This rate differs from the U.S. federal statutory rate of 21% primarily due to foreign income taxed in higher rate jurisdictions, as well as losses in countries with full valuation reserves resulting in no tax benefit. The Provision for income taxes generated for the 2019 six-month period includes a $60 charge resulting from the change in estimated AETR from 72.2% in the first quarter of 2019 to 137.1% in the second quarter of 2019. The change in estimated AETR is due primarily to fluctuating alumina and aluminum market prices that result in changes to the distribution of the (Loss) income before income taxes in the Company’s various tax jurisdictions, inclusive of those which receive no tax benefit from generated losses. In the third quarter of 2019, the Provision for income taxes is expected to reflect further impacts of fluctuating alumina and aluminum market prices on the estimated AETR.

Noncontrolling interest— Net income attributable to noncontrolling interest was $109 and $250, in the second quarter and six-month period of 2019, respectively, compared with $121 and $266, in the second quarter and six-month period of 2018, respectively. These amounts are entirely related to Alumina Limited’s 40% ownership interest in several affiliated operating entities, which own, have an interest in, or operate the bauxite mines and alumina refineries within Alcoa Corporation’s Bauxite and Alumina segments (except for the Poços de Caldas mine and refinery and a portion of the São Luís refinery, all in Brazil) and the Portland smelter (Aluminum segment) in Australia. These individual entities comprise an unincorporated global joint venture between Alcoa

Corporation and Alumina Limited known as Alcoa World Alumina and Chemicals (AWAC). Alcoa Corporation owns 60% of these individual entities, which are consolidated by the Company for financial reporting purposes and include Alcoa of Australia Limited (AofA), Alcoa World Alumina LLC, and Alcoa World Alumina Brasil Ltda. Alumina Limited’s 40% interest in the earnings of such entities is reflected as Noncontrolling interest on Alcoa Corporation’s Statement of Consolidated Operations.

In the second quarter and six-months ended 2019, these combined entities, particularly the Alumina segment entities, generated lower net income compared with the same periods in 2018. The unfavorable change in earnings was mostly driven by lower alumina prices (see Alumina under Segment Information below).

Segment Information

Bauxite

	Second quarter ended June 30,				Six months ended June 30,
	2019		2018		2019		2018
Production⁽¹⁾ (mdmt)		11.3		11.3		23.2		22.5
Third-party shipments (mdmt)		1.5		1.6		2.7		2.7
Intersegment shipments (mdmt)		10.3		10.0		20.5		20.4
Total shipments (mdmt)		11.8		11.6		23.2		23.1
Third-party sales	$	67	$	77	$	132	$	124
Intersegment sales		246		226		482		475
Total sales	$	313	$	303	$	614	$	599
Segment Adjusted EBITDA	$	112	$	100	$	238	$	210
Operating costs⁽²⁾	$	220	$	223	$	415	$	429
Average cost per dry metric ton of bauxite	$	19	$	19	$	18	$	19

⁽¹⁾	The production amounts do not include additional bauxite (approximately 3 mdmt per annum) that AWAC is entitled to receive (i.e. an amount in excess of its equity ownership interest) from certain other partners at the mine in Guinea.

⁽²⁾	Includes all production-related costs, including conversion costs, such as labor, materials, and utilities; depreciation, depletion, and amortization; and plant administrative expenses.

Bauxite production was flat in the second quarter of 2019 compared with the second quarter of 2018, and increased 3% for the six-month period of 2019 compared with the six-month period in 2018. Compared with the second quarter of 2018, the second quarter of 2019 had higher production at four of the segment’s seven mines, primarily at the Huntly (Australia) mine, offset by lower production, primarily at the Trombetas (Brazil) mine. The improvement from the 2018 six-month period to the 2019 six-month period is primarily attributable to the increase in production at the Huntly (Australia) mine due to planned production increases.

Third-party sales for the Bauxite segment decreased 13% and increased 6% in the second quarter and six-month period of 2019, respectively, compared with the corresponding periods in 2018. In the second quarter of 2019, the decrease was due to a decrease in volume combined with a lower realized price, primarily due to freight. The increase in the six-month period of 2019 was principally caused by an increase in the realized third-party price.

Intersegment sales increased 9% and 1% in the second quarter and six-month period of 2019, respectively, compared with the corresponding periods in 2018. The increase in the second quarter of 2019 was primarily driven by a higher realized price and higher volumes. The increase in the 2019 six-month period is primarily driven by higher volume and a slightly higher realized price.

Segment Adjusted EBITDA increased $12 and $28 in second quarter and six-month period of 2019, respectively, compared with the corresponding periods in 2018. The improvements in both periods were mainly the result of favorable foreign currency movements due to a stronger U.S. dollar against the Australian dollar and Brazilian real, combined with a higher average realized price for intersegment sales.

For the third quarter of 2019 in comparison with the third quarter of 2018, higher production at the Huntly (Australia) and Boké (Guinea) mines is projected, in addition to a higher intersegment realized price.

Alumina

	Second quarter ended June 30,				Six months ended June 30,
	2019		2018		2019		2018
Production (kmt)		3,309		3,227		6,549		6,400
Third-party shipments (kmt)		2,299		2,285		4,628		4,661
Intersegment shipments (kmt)		1,070		1,031		2,042		2,128
Total shipments⁽¹⁾ (kmt)		3,369		3,316		6,670		6,789
Third-party sales	$	864	$	1,068	$	1,761	$	1,982
Intersegment sales		445		536		862		990
Total sales	$	1,309	$	1,604	$	2,623	$	2,972
Segment Adjusted EBITDA	$	369	$	638	$	741	$	1,030
Average realized third-party price per metric ton of alumina	$	376	$	467	$	381	$	425
Operating costs⁽²⁾	$	925	$	962	$	1,848	$	1,927
Average cost per metric ton of alumina	$	275	$	290	$	277	$	284

⁽¹⁾

Total shipments include metric tons that were not produced by the Alumina segment. Such alumina was purchased by this segment to satisfy certain customer commitments. The Alumina segment bears the risk of loss of the purchased alumina until control of the product has been transferred to this segment’s customer.

⁽²⁾	Includes all production-related costs, including raw materials; conversion costs, such as labor, materials, and utilities; depreciation and amortization; and plant administrative expenses.

At June 30, 2019, the Alumina segment had 2,519 kmt of curtailed refining capacity on a base capacity of 15,064 kmt. Both curtailed capacity and base capacity were unchanged compared with June 30, 2018.

Alumina production increased by 3% in the second quarter of 2019 and 2% in the 2019 six-month period compared with the corresponding periods in 2018, principally due to stabilization of operations across the refining system.

Third-party sales for the Alumina segment decreased 19% in the second quarter of 2019 and 11% in the 2019 six-month period compared with the same periods in 2018. The decrease in both periods was mostly related to a 20% (second quarter) and 10% (six months) decline in average realized price. In the second quarter of 2019 the decline in average realized price was partially offset by a 2% increase in volume. In the 2019 six-month period, a volume decreased 2% contributed to the decline in third-party sales. In both periods, the change in average realized price was principally driven by a 24% (second quarter) and 13% (six months) lower average alumina index price (on 30-day lag).

Intersegment sales declined 17% and 13% in the second quarter and six-month period of 2019, respectively, compared with the corresponding periods in 2018, primarily due to a lower average realized price and decreased demand from the Aluminum segment. The decreased demand was partially caused by the curtailments of the Avilés (Spain), La Coruña (Spain) and Bécancour (Canada) smelters (see Aluminum below).

Segment Adjusted EBITDA decreased $269 and $289 in the second quarter and six-month period of 2019, respectively, compared with the same periods in 2018. The decline in both periods was largely attributable to the decline in average realized price, increased maintenance expenses due to equipment and process issues in Australia and the São Luís (Brazil) refinery and higher bauxite costs. These impacts were partially offset by net favorable foreign currency movements due to a stronger U.S. dollar, particularly against the Australian dollar and lower unit costs for caustic soda.

For the third quarter of 2019 in comparison with the third quarter of 2018, an increase in production is expected with lower unit costs for caustic soda and an improvement in raw material consumption and maintenance activities. Higher bauxite costs are expected to reduce the impact of these favorable changes.

Aluminum

	Second quarter ended June 30,				Six months ended June 30,
	2019		2018		2019			2018
Third-party aluminum shipments⁽¹⁾ (kmt)		724		853		1,433			1,647
Third-party sales	$	1,757	$	2,413	$	3,492		$	4,524
Intersegment sales		4		4		7			8
Total sales	$	1,761	$	2,417	$	3,499		$	4,532
Segment Adjusted EBITDA⁽²⁾	$	3	$	230	$	(93	)	$	417


Primary aluminum information⁽³⁾
Production (kmt)		533		565		1,070			1,119
Third-party shipments⁽⁴⁾ (kmt)		638		713		1,266			1,376
Third-party sales	$	1,382	$	1,870	$	2,776		$	3,517
Average realized third-party price per metric ton⁽⁵⁾	$	2,167	$	2,623	$	2,193		$	2,556
Total shipments⁽⁴⁾ (kmt)		656		743		1,295			1,441
Operating costs⁽⁶⁾	$	1,512	$	1,789	$	3,080		$	3,415
Average cost per metric ton⁽²⁾	$	2,305	$	2,408	$	2,378		$	2,370

⁽¹⁾	Third-party aluminum shipments are composed of both primary aluminum and flat-rolled aluminum.

⁽²⁾

As of January 1, 2019, the Company changed its accounting method for valuing certain inventories from LIFO to average cost. The effects of the change in accounting principle have been retrospectively applied to all prior periods presented. As a result, Segment Adjusted EBITDA for Aluminum decreased $1 and increased $33 for the second quarter and six-month period of 2019, respectively, with the Average cost per metric ton of primary aluminum decreasing by $1 and $24 for the second quarter and six-month period of 2019, respectively, compared with the corresponding periods in 2018.

⁽³⁾	The primary aluminum information presented does not include flat-rolled aluminum.

⁽⁴⁾

Third-party and Total primary aluminum shipments include metric tons that were not produced by the Aluminum segment. Such aluminum was purchased by this segment to satisfy certain customer commitments. The Aluminum segment bears the risk of loss of the purchased aluminum until control of the product has been transferred to this segment’s customer.

⁽⁵⁾

Average realized price per metric ton of primary aluminum includes three elements: a) the underlying base metal component, based on quoted prices from the LME; b) the regional premium, which represents the incremental price over the base LME component that is associated with the physical delivery of metal to a particular region (e.g., the Midwest premium for metal sold in the United States); and c) the product premium, which represents the incremental price for producing physical metal into a particular shape (e.g., billet, rod, slab, etc.) or alloy.

⁽⁶⁾	Includes all production-related costs, including raw materials; conversion costs, such as labor, materials, and utilities; depreciation and amortization; and plant administrative expenses.

In January 2018, a lockout of the bargained hourly employees commenced at the Bécancour (Canada) smelter, as labor negotiations reached an impasse. Accordingly, management initiated a curtailment of two (207 kmt (Alcoa’s share)) of the three potlines at the smelter. Additionally, in December 2018, half (52 kmt (Alcoa Corporation’s share)) of the remaining operating potline being operated by salaried employees was curtailed. This additional curtailment was deemed necessary to ensure continued safety and maintenance due to recent retirements and departures among the salaried workforce. In July 2019, the final offer presented to the United Steelworkers was accepted and the plant plans to begin the restart process on July 26, 2019 (see Note O to the Consolidated Financial Statements in Part 1 Item 1 of this Form 10-Q).

In accordance with the previously announced plan of restarting three (161 kmt) of the five potlines at the Warrick (Indiana) smelter, Alcoa completed the restart of two potlines (108 kmt) in June 2018 and one other (53 kmt) in December 2018. The smelter capacity restarted directly supplies the existing rolling mill at the location improving efficiency of the integrated site and providing an additional source of metal to help meet an anticipated increase in production volumes.

In February 2019, the Company’s Avilés and La Coruña smelters, with a combined remaining operating capacity of 124 kmt, were curtailed and maintained in restart condition in the event that third parties had interest in acquiring the facilities. The casthouse at each facility and the paste plant at La Coruña have remained in operation since the announcement of the collective dismissal process in October 2018. As of July 31, 2019, PARTER acquired the facilities at these two locations, inclusive of the smelters and casthouse at each facility and the paste plant at La Coruña (see Note O to the Consolidated Financial Statements in Part 1 Item 1 of this Form 10-Q).

At June 30, 2019, the Aluminum segment had 1,040 kmt of idle smelting capacity on a base smelting capacity of 3,173 kmt. In comparison with June 30, 2018, idle capacity increased 124 kmt due to the full curtailments at the Spanish smelters and 52 kmt due to the half potline curtailment at the Bécancour (Canada) smelter. The idle capacity increases were offset by a decrease of 53 kmt due to the partial restart of Warrick (Indiana) smelting capacity.

Primary aluminum production decreased 6% and 4% in the second quarter and six-month period of 2019, respectively, compared with the corresponding periods in 2018, principally due to the capacity changes discussed above.

Third-party sales for the Aluminum segment decreased 27% and 23% in the second quarter and six-month period of 2019, respectively, compared with the corresponding periods in 2018. The decrease was primarily attributable to a reduction in metal price and a decrease in overall aluminum volume. The change in average realized price of primary aluminum was mainly driven by a 19% (second quarter) 17% (six months) lower average LME price (on 15-day lag) combined with a decrease in the Europe regional premium in the six-month period ended June 30, 2019.

The lower overall volume was primarily the result of a decline in flat-rolled aluminum shipments caused by the end of the tolling arrangement with Arconic in December 2018, the curtailments at the Spanish smelters (Avilés and La Coruña), and the half potline curtailment at the Bécancour (Canada) smelter.

Segment Adjusted EBITDA decreased $227 and $510 in the second quarter and six-month period of 2019, respectively, compared with the corresponding periods in 2018. The decline in the second quarter of 2019 was mainly related to lower metal prices which were partially offset by favorable foreign currency movements due to a stronger U.S. dollar, mainly against the euro, higher energy sales prices in Brazil, and slightly lower costs for alumina and carbon materials. The decline in the 2019 six-month period was mainly related to lower metal prices, a lower regional premium in Europe, higher raw material and energy costs, and Section 232 tariffs, further impacted by the establishment of a bad debt reserve against a Canadian customer receivable in the first quarter of 2019.

In the third quarter of 2019 compared with the third quarter of 2018, lower alumina costs, lower costs related aluminum imported from Canada resulting from the exemption of Section 232 tariffs, and improved results related to the Spanish smelter curtailments are expected. Additionally, lower Brazil hydro prices are expected to be partially offset by an increase in performance in the rolling business.

Reconciliation of Certain Segment Information

Reconciliation of Total Segment Third-Party Sales to Consolidated Sales

	Second quarter ended June 30,				Six months ended June 30,
	2019		2018		2019		2018
Bauxite	$	67	$	77	$	132	$	124
Alumina		864		1,068		1,761		1,982
Aluminum:
Primary aluminum		1,382		1,870		2,776		3,517
Other⁽¹⁾		375		543		716		1,007
Total segment third-party sales		2,688		3,558		5,385		6,630
Other		23		21		45		39
Consolidated sales	$	2,711	$	3,579	$	5,430	$	6,669

⁽¹⁾	Other includes third-party sales of flat-rolled aluminum and energy, as well as realized gains and losses related to embedded derivative instruments designated as cash flow hedges of forward sales of aluminum.

Reconciliation of Total Segment Operating Costs to Consolidated Cost of Goods Sold

	Second quarter ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
Bauxite	$	220		$	223		$	415		$	429
Alumina		925			962			1,848			1,927
Primary aluminum		1,512			1,789			3,080			3,415
Other⁽¹⁾		362			520			727			953
Total segment operating costs		3,019			3,494			6,070			6,724
Eliminations⁽²⁾		(694	)		(614	)		(1,436	)		(1,397	)
Provision for depreciation, depletion, amortization⁽³⁾		(166	)		(184	)		(330	)		(371	)
Other⁽⁴⁾		30			57			65			99
Consolidated cost of goods sold	$	2,189		$	2,753		$	4,369		$	5,055

⁽¹⁾	Other largely relates to the Aluminum segment’s flat-rolled aluminum product division.

⁽²⁾	This line item represents the elimination of cost of goods sold related to intersegment sales between Bauxite and Alumina and between Alumina and Aluminum.

⁽³⁾

Depreciation, depletion, and amortization is included in the operating costs used to calculate average cost for each of the bauxite, alumina, and primary aluminum product divisions (see Bauxite, Alumina, and Aluminum above). However, for financial reporting purposes, depreciation, depletion, and amortization is presented as a separate line item on Alcoa Corporation’s Statement of Consolidated Operations.

⁽⁴⁾

Other includes costs related to Transformation and certain other items that impact Cost of goods sold on Alcoa Corporation’s Statement of Consolidated Operations that are not included in the operating costs of segments (see footnotes 2 and 5 in the Reconciliation of Total Segment Adjusted EBITDA to Consolidated Net (Loss) Income Attributable to Alcoa Corporation below).

Reconciliation of Total Segment Adjusted EBITDA to Consolidated Net (Loss) Income Attributable to Alcoa Corporation

	Second quarter ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
Total segment Adjusted EBITDA⁽¹⁾	$	484		$	968		$	886		$	1,657
Unallocated amounts:
Transformation⁽²⁾		3			(1	)		5			(3	)
Intersegment eliminations^(1),(3)		(1	)		(152	)		85			(76	)
Corporate expenses⁽⁴⁾		(28	)		(26	)		(52	)		(53	)
Provision for depreciation, depletion, and amortization		(174	)		(192	)		(346	)		(386	)
Restructuring and other charges, net		(370	)		(231	)		(483	)		(212	)
Interest expense		(30	)		(32	)		(60	)		(58	)
Other expenses, net		(50	)		(9	)		(91	)		(30	)
Other⁽⁵⁾		(11	)		(36	)		(29	)		(59	)
Consolidated income before income taxes		(177	)		289			(85	)		780
Provision for income taxes		(116	)		(158	)		(266	)		(309	)
Net income attributable to noncontrolling interest		(109	)		(121	)		(250	)		(266	)
Consolidated net (loss) income attributable to Alcoa Corporation	$	(402	)	$	10		$	(601	)	$	205

⁽¹⁾

⁽²⁾	Transformation includes, among other items, the Adjusted EBITDA of previously closed operations.

⁽³⁾

Concurrent with the change in inventory accounting method as of January 1, 2019, management elected to change the presentation of certain line items in the reconciliation of total Segment Adjusted EBITDA to Consolidated net (loss) income attributable to Alcoa Corporation. Corporate inventory accounting previously included the impact of LIFO, metal price lag and intersegment eliminations. The impact of LIFO has been eliminated with the change in inventory method. Metal price lag attributable to the Company’s rolled operations business is now netted within the Aluminum segment to simplify presentation of an impact that nets to zero in consolidation. Only Intersegment eliminations remain as a reconciling line item and are labeled as such.

⁽⁴⁾	Corporate expenses are composed of general administrative and other expenses of operating the corporate headquarters and other global administrative facilities, as well as research and development expenses of the corporate technical center.

⁽⁵⁾	Other includes certain items that impact Cost of goods sold and Selling, general administrative, and other expenses on Alcoa Corporation’s Statement of Consolidated Operations that are not included in the Adjusted EBITDA of the reportable segments.

Environmental Matters

See the Environmental Matters section of Note M to the Consolidated Financial Statements in Part I Item 1 of this Form 10-Q.

Liquidity and Capital Resources

Cash from Operations

Cash provided from operations was $250 in the 2019 six-month period compared with cash used for operations of $375 in the same period of 2018, resulting in an increase in cash provided of $625. The increase in cash from operations was mainly due to the following:

•

a favorable change of $542 in certain working capital accounts (receivables, inventories, and accounts payable, trade);

•

a favorable change of $637 from lower pension contributions, including the absence of $605 in unscheduled, discretionary payments made in the second quarter of 2018 which were primarily funded with net proceeds from the May 2018 debt issuance discussed below;

•

a positive change of $74 resulting from the non-recurrence of a payment made in the first quarter of 2018 related to a legacy legal matter with the U.S. government assumed by the Company in the Separation Transaction;

•

a positive change of $62 resulting from the non-recurrence of a payment made in the second quarter of 2018 related to a provision of the electricity supply agreement for the Wenatchee smelter;

•

a positive change of $85 related to the monetization of value-added tax at foreign locations;

•

a positive change of $18 resulting from the non-recurrence of payment made in the second quarter of 2018 for the settlement of a legal matter in Italy; and,

•

a favorable change of $18 related to asset retirement obligations; offset by,

•

an unfavorable change of $405 from the reduction in net income ($822) net of the change in non-cash items ($417). The increase in non-cash items are primarily attributable to Restructuring and other charges, net for the divestiture of investment in MRC, and the curtailment in February of the two Spanish smelters, in addition to the provision for bad debt expense due to a Canadian customer bankruptcy during the first quarter of 2019; and,

•

an unfavorable change in taxes, including income taxes, of $443. The decrease includes $285 related to higher tax payments made in the 2019 six-month period compared with the 2018 six-month period, inclusive of a large payment made by AofA in the second quarter of 2019 related to the 2018 tax year. The remaining unfavorable change is due to the consumption of taxes and deferred tax balances.

Financing Activities

Cash used for financing activities was $270 in the 2019 six-month period, a decrease of $556 compared with cash provided from financing activities of $286 in the corresponding period of 2018.

The use of cash in the 2019 six-month period was primarily the result of $286 in net distributions paid to Alumina Limited (see Noncontrolling interest in Results of Operations above).

The source of cash in the 2018 six-month period was primarily the result of $553 in additions to debt, virtually all of which was related to $492 in net proceeds from the issuance of new senior debt securities (see below) and $60 in borrowings under an existing term loan by AofA, partially offset by $276 in net distributions paid to Alumina Limited (see Noncontrolling interest in Results of Operations above).

In May 2018, Alcoa Nederland Holding B.V. (ANHBV), a wholly-owned subsidiary of Alcoa Corporation, completed a Rule 144A (U.S. Securities Act of 1933, as amended) debt offering for $500 of 6.125% Senior Notes due 2028 (the “2028 Notes”). ANHBV received $492 in net proceeds from the debt offering reflecting a discount to the initial purchasers of the 2028 Notes. The net proceeds, along with available cash on hand, were used to make discretionary contributions to certain U.S. defined benefit pension

plans (see Cash from Operations above). The discount to the initial purchasers, as well as costs to complete the financing, was deferred and is being amortized to interest expense over the term of the 2028 Notes. Interest on the 2028 Notes will be paid semi-annually in November and May, commencing on November 15, 2018.

ANHBV has the option to redeem the 2028 Notes on at least 30 days, but not more than 60 days, prior notice to the holders of the 2028 Notes under multiple scenarios, including, in whole or in part, at any time or from time to time after May 2023 at a redemption price specified in the indenture (up to 103.063% of the principal amount plus any accrued and unpaid interest in each case). Also, the 2028 Notes are subject to repurchase upon the occurrence of a change in control repurchase event (as defined in the indenture) at a repurchase price in cash equal to 101% of the aggregate principal amount of the 2028 Notes repurchased, plus any accrued and unpaid interest on the 2028 Notes repurchased.

The 2028 Notes are senior unsecured obligations of ANHBV and do not entitle the holders to any registration rights pursuant to a registration rights agreement. ANHBV does not intend to file a registration statement with respect to resales of or an exchange offer for the 2028 Notes. The 2028 Notes are guaranteed on a senior unsecured basis by Alcoa Corporation and its subsidiaries that are guarantors under the Company’s Amended Revolving Credit Agreement (the “subsidiary guarantors” and, together with Alcoa Corporation, the “guarantors”) (see Financing Activities in Liquidity and Capital Resources included in Part II Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017). Each of the subsidiary guarantors will be released from their 2028 Notes guarantees upon the occurrence of certain events, including the release of such guarantor from its obligations as a guarantor under the Revolving Credit Agreement.

The 2028 Notes indenture includes several customary affirmative covenants. Additionally, the 2028 Notes indenture contains several negative covenants, that, subject to certain exceptions, include limitations on liens, limitations on sale and leaseback transactions, and a prohibition on a reduction in the ownership of AWAC entities below an agreed level. The negative covenants in the 2028 Notes indenture are less extensive than those in the 2024 Notes and 2026 Notes (see Financing Activities in Liquidity and Capital Resources included in Part II Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017) indenture and the Amended Revolving Credit Agreement. For example, the 2028 Notes indenture does not include a limitation on restricted payments, such as repurchases of common stock and shareholder dividends.

The 2028 Notes rank equally in right of payment with all of ANHBV’s existing and future senior indebtedness, including the 2024 Notes and 2026 Notes; rank senior in right of payment to any future subordinated obligations of ANHBV; and are effectively subordinated to ANHBV’s existing and future secured indebtedness, including under the Amended Revolving Credit Agreement, to the extent of the value of property and assets securing such indebtedness.

Alcoa Corporation’s cost of borrowing and ability to access the capital markets are affected not only by market conditions but also by the short- and long-term debt ratings assigned to Alcoa Corporation’s debt by the major credit rating agencies.

On May 1, 2019, Fitch Ratings (Fitch) reaffirmed a BB+ rating for Alcoa Corporation’s long-term debt. Additionally, Fitch revised the current outlook to stable from positive.

Investing Activities

Cash used for investing activities was $258 in the 2019 six-month period compared with $174 in the 2018 six-month period, resulting in a decrease in cash used of $84.

In the 2019 six-month period, the use of cash was largely attributable to $158 in capital expenditures, composed of $112 in sustaining projects and $46 in return-seeking projects, and additions to investments of $111, partially offset by proceeds from the sale of assets of $11.

In the 2018 six-month period, the use of cash was mainly due to $169 in capital expenditures, composed of $130 in sustaining and $39 in return-seeking projects.

Recently Adopted and Recently Issued Accounting Guidance

See Note B to the Consolidated Financial Statements in Part I Item 1 of this Form 10-Q.

Dissemination of Company Information

Alcoa Corporation intends to make future announcements regarding company developments and financial performance through the website, www.alcoa.com.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

See the Derivatives and Other Financial Instruments section of Note J to the Consolidated Financial Statements in Part I Item 1 of this Form 10-Q.

Item 4. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures

Alcoa Corporation’s Chief Executive Officer and Chief Financial Officer have evaluated the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the U.S. Securities Exchange Act of 1934, as amended, as of the end of the period covered by this report, and they have concluded that these controls and procedures are effective as of June 30, 2019.

(b) Changes in Internal Control over Financial Reporting

There have been no changes in internal control over financial reporting during the second quarter of 2019, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

Gregory Power: In January 2016, Gregory Power Partners (Gregory Power) delivered notice to Reynolds Metals Company (Reynolds, a subsidiary of Alcoa Corporation) that Sherwin Alumina Company, LLC’s (Sherwin) bankruptcy filing constitutes a breach of the Energy Services Agreement (ESA). Since that time, various responses, complaints and motions have been actioned, including the addition of Allied Alumina LLC (Allied) to an amended complaint. (Sherwin operated as a subsidiary of Allied.) In May 2019, a settlement agreement was reached between Gregory Power, Allied and Reynolds in which all claims pending against the parties will be voluntarily dismissed. The settlement is conditioned on the execution of various commercial agreements, which have been executed by the parties. On June 2, 2019, the Court entered a Stipulation of Dismissal, formally concluding the litigation.

For additional information on legal proceedings, see Legal Proceedings in Part 1 Item 3 of Alcoa Corporation’s Annual Report on Form 10-K for the year ended December 31, 2018 and Note M to the Consolidated Financial Statements in Part 1 Item 1 of this Form 10-Q.

Item 4. Mine Safety Disclosures.

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of U.S. Securities and Exchange Commission Regulation S-K (17 CFR 229.104) is included in Exhibit 95.1 to this report.

Item 6. Exhibits.


10.1	Framework Agreement, dated June 26, 2019, between Saudi Arabian Mining Company (Ma’aden) and Alcoa Corporation⁽¹⁾

10.2	Amendment and Restatement Deed dated June 26, 2019 relating to the Aluminium Project Framework Shareholders’ Agreement originally dated December 20, 2009, between Saudi Arabian Mining Company (Ma’aden) and Alcoa Corporation⁽¹⁾

10.3	Amendment and Restatement of the Aluminium Project Framework Shareholders’ Agreement, dated on or about October 2016, between Saudi Arabian Mining Company (Ma’aden) and Alcoa Inc.⁽¹⁾

10.4	Novation Agreement relating to Framework Shareholders Agreement, dated December 24, 2016, between Saudi Arabian Mining Company (Ma’aden) and Arconic Inc. and Alcoa Corporation

10.5	Letter Agreement, dated July 3, 2019, between Tómas M. Sigurðsson and Alcoa Corporation

31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

95.1	Mine Safety Disclosure

101.INS	XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH	XBRL Taxonomy Extension Schema Document

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

101.LAB	XBRL Taxonomy Extension Label Linkbase Document

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

⁽¹⁾Certain schedules and appendices have been omitted pursuant to Item 601(a)(5) of Regulation S-K promulgated by the SEC. The Company agrees to furnish a supplemental copy of any omitted schedule or appendix to the SEC upon request.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


						Alcoa Corporation

July 31, 2019						By /s/ WILLIAM F. OPLINGER
Date						William F. Oplinger
						Executive Vice President and
						Chief Financial Officer
						(Principal Financial Officer)

July 31, 2019						By /s/ MOLLY S. BEERMAN
Date						Molly S. Beerman
						Vice President and Controller
						(Principal Accounting Officer)

EXHIBIT 10.1

EXECUTION VERSION

Dated 26 June 2019

Framework Agreement

between

Saudi Arabian Mining Company (Ma’aden)

and

Alcoa Corporation



1.	Definitions and Interpretation	1
2.	Stage 1 Undertakings	4
3.	Stage 2 Undertakings	8
4.	Representations and Warranties	10
5.	Remedies	11
6.	Miscellaneous	12
7.	Governing Law; Dispute Resolution	13
Appendix 1 Stage 1 Project Documents		1
Appendix 2 MAC and MBAC Articles of Association		1
Appendix 3 SICUDA Memorandum of Agreement		1

This Framework Agreement (this “Agreement”) is dated 26 June 2019 and made as a deed between:

(1)

SAUDI ARABIAN MINING COMPANY (MA’ADEN), a company organised under the laws and regulations of the Kingdom of Saudi Arabia with commercial registration No.1010164391, having its head office and address at PO Box 68861, Riyadh 11537, Kingdom of Saudi Arabia (together with its legal successors and permitted assigns, hereinafter referred to as “Ma’aden”); and

(2)	ALCOA CORPORATION, a company organised and existing under the laws of the State of Delaware, USA, whose principal place of business is at 201 Isabella Street, Pittsburgh, PA 15212, USA (together with its legal successors and permitted assigns, hereinafter referred to as “Alcoa”),

each a “Party”, or collectively as the “Parties”.

Whereas:

(A)

Ma’aden and Alcoa are parties to a Framework Shareholders’ Agreement, originally dated 20 December 2009 pursuant to which three companies were formed to pursue an integrated bauxite mining, alumina refining, aluminium smelting and aluminium rolling project in the Kingdom of Saudi Arabia: Ma’aden Rolling Company (“MRC”) with commercial registration number 2055012518; Ma’aden Bauxite and Alumina Company with commercial registration number 2055012955 (“MBAC”); and Ma’aden Aluminium Company with commercial registration number 2055012511 (“MAC”).

(B)

In 2010, MRC entered into certain finance documents pursuant to which the creditors thereunder made available certain facilities to MRC to assist in the financing of the aluminium rolling project, including the loan agreement dated 27 December 2010 (as amended and restated from time to time, the “Original PIF Loan Agreement”) entered into between MRC and The Public Investment Fund (“PIF”).

(C)

In consideration for the release of Alcoa from all sponsor support in relation to MRC’s finance documents and any MRC shareholder obligations, Alcoa has agreed to, inter alia: (a) consent to Ma’aden replacing PIF as provider of the loans to MRC under the Original PIF Loan Agreement (the “PIF Loan Transfer”), to MBAC under the PIF MBAC Loan Agreement and to MAC under the PIF MAC Loan Agreement; and (b) procure that Alcoa Saudi Rolling Inversiones SL (the “Alcoa Shareholder”) transfers its 25.1% equity shareholding in MRC to Ma’aden such that, following such transfer, Alcoa shall have no direct or indirect equity interest in MRC (the “MRC Share Transfer”).

(D)

The Parties desire to implement in and by this Agreement certain matters consequential to the MRC Share Transfer and the PIF Loan Transfer (the “Transaction Steps”) to the extent not implemented in and by that certain global amendment and restatement agreement dated on or about the date of this deed (the “GARA”).

(E)	The Parties intend this Agreement to take effect as a deed.

It is agreed as follows:

1.	Definitions and Interpretation

1.1	Definitions

(a)

In this Agreement:

“Affiliate” means, in relation to any person, any entity which Controls, or is directly or indirectly Controlled by or under common Control with, such person, provided that (i)

[Framework Agreement]

none of MRC, MBAC or MAC shall be deemed to be an Affiliate of any Party, and (ii) no person shall be deemed to be an Affiliate of another person solely because both persons are under common Control of the Government of the Kingdom of Saudi Arabia.

“Alcoa” has the meaning set out in the preamble.

“Alcoa Shareholder” has the meaning set out in the recitals.

“Alcoa SIDF Guarantee” means the guarantee dated 30 Dhul-Qadah 1433H (corresponding to 16 October 2012), as amended and/or restated or supplemented from time to time, provided in favor of SIDF by Aluminium Company of America (as later changed to Arconic Inc.) and Alcoa acting jointly and severally.

“Auto Rolling Transfer Agreement” means the Saudi law-governed agreement pursuant to which Ma’aden and the Alcoa Shareholder will transfer one hundred per cent (100%) ownership of the Auto Rolling Expansion Project to MRC on or before the Alcoa Exit Date.

“Control” means in relation to any non-natural person (the “First Person”), the right of another person or persons acting together, whether in law or in fact (including by way of contract), to secure by means of the holding of shares bearing fifty per cent (50%) or more of the voting rights attaching to all the shares in the First Person, or by having the power to control the composition of the board of managers/directors or other governing body of the First Person, that all or a substantial proportion of the affairs of the First Person are conducted in accordance with the wishes of that person or persons acting together, and the expressions “Controls”, “Controlled” or “Controlling” shall be construed accordingly.

“GARA” has the meaning set out in the recitals.

“ICC Rules” has the meaning set out in Clause 7.3(a) (Dispute Resolution).

“Ma’aden” has the meaning set out in the preamble.

“MAC” has the meaning set out in the recitals.

“Managers’ Deed of Indemnity” means the deed of indemnity between MRC, Tómas Már Sigurdsson, Edmund Martin Hemmersbach, John Paul Holsinger and William F. Oplinger, dated on or about the date hereof.

“MBAC” has the meaning set out in the recitals.

“MRC” has the meaning set out in the recitals.

“MRC Share Transfer” has the meaning set out in the recitals.

“Original PIF Loan Agreement” has the meaning set out in the recitals.

“Party” has the meaning set out in the preamble.

“PIF” has the meaning set out in the recitals.

“PIF Loan Transfer” has the meaning set out in the recitals.

“PIF MAC Loan” means the loan under the PIF MAC Loan Agreement.

“PIF MAC Loan Agreement” means the loan agreement originally dated 21 Muharram 1432H (corresponding to 27 December 2010G) (as amended and/or restated or novated from time to time), and entered into between MAC and PIF.

[Framework Agreement]

“PIF MBAC Loan” means the loan under the PIF MBAC Loan Agreement.

“PIF MBAC Loan Agreement” means the loan agreement originally dated 01 Muharram 1433H (corresponding to 27 November 2011G) (as amended and/or restated or novated from time to time), and entered into between MBAC and PIF.

“Receivables Settlement Agreement” means the receivables settlement agreement between MAC, Ma’aden Infrastructure Company, Alcoa, Alcoa Saudi Smelting Inversiones S.L., Alcoa IK Services Inc., Alcoa Warrick LLC and Alcoa USA Corp (in its capacity as the collection agent of Alcoa Warrick LLC and MRC dated on or about the date hereof.

“STA” has the meaning set out in Clause 2.1(a)(i) (MRC Share Transfer).

“Stage 1 Project Documents” means:

(i)

the amendments to:

(A)

the Framework Shareholders’ Agreement;

(B)

the Aluminium Purchase Agreement;

(C)

the Casthouse Users Agreement;

(D)

the Technical Services Agreement for Rolling Mill (OOK);

(E)

the Technical Services Agreement for Rolling Mill (IK);

(F)

the Technology License Agreement; and

(G)

the MRC Supply to North America Ground Rules Agreement;

(ii)

the Auto Rolling Transfer Agreement;

(iii)

the Managers’ Deed of Indemnity;

(iv)

the STA; and

(v)

the Receivables Settlement Agreement.

“US$” means the lawful currency of the United States of America.

(b)

In this Agreement:

(i)

capitalised terms used but not defined shall have the same meanings as defined in the GARA (including terms defined by cross-reference to another document); and

(ii)

capitalised terms used but not defined:

(A)

in respect of MBAC, shall have the meanings given in (as applicable) the MBAC CTA and the PIF MBAC Loan Agreement; and

(B)

in respect of MAC, shall have the meanings given in (as applicable) the MAC CTA and the PIF MAC Loan Agreement,

in each case, as at the date of this Agreement.

1.2	Construction

(a)

Clause, Schedule, Appendix and paragraph headings shall not affect the interpretation of this Agreement.

[Framework Agreement]

(b)

Unless the context otherwise requires, words in the singular shall include the plural and in the plural shall include the singular.

(c)

This Agreement shall be binding on, and enure to the benefit of, the Parties and their respective personal representatives, successors and permitted assigns, and references to a Party shall include that Party’s successors, permitted assigns and permitted transferees.

(d)

References to persons shall include any individual, any form of body corporate, unincorporated association, firm, partnership, joint venture, consortium, association, organisation or trust (in each case whether or not having a separate legal personality).

(e)

A reference to this Agreement (or any provision of it) or to any other agreement or document referred to in this Agreement is a reference to this Agreement, that provision or such other agreement or document as amended (in each case, other than in breach of the provisions of this Agreement, that provision or such other agreement or document) from time to time.

(f)

Unless the context otherwise requires, a reference to a clause is to a clause of this Agreement.

(g)

Any words following the terms “including”, “include”, “in particular”, for example or any similar expression shall be construed as illustrative and shall not limit the sense of the words, description, definition, phrase or term preceding those terms.

(h)

A reference to an “amendment” includes a novation, re-enactment, supplement or variation (and amended shall be construed accordingly).

(i)

A reference to a “day”, “month” and “year” shall be to a day, month and year, respectively, of the Gregorian calendar.

(j)

In this Agreement any reference to a “Clause”, a “Schedule” or an “Appendix” is, unless the context otherwise requires, a reference to a Clause, a Schedule or an Appendix of this Agreement.

1.3	Third Party Rights

(a)

Unless expressly provided to the contrary in this Agreement, a person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.

(b)

Notwithstanding any term of this Agreement, the consent of any person who is not a party to this Agreement is not required to rescind or vary this Agreement at any time.

1.4	Termination for Non-occurrence of Alcoa Exit Date

Each of the Parties agrees that if Alcoa ceases to be a shareholder in MAC and MBAC in accordance with the terms of the Framework Shareholders’ Agreement, then this Agreement will automatically terminate and be of no further force or effect.

2.	Stage 1 Undertakings

Each of the undertakings in this Clause 2 shall constitute a “Stage 1 Undertaking” for the purposes of this Agreement and shall be effective immediately on the date of this Agreement to be performed forthwith or, if a time or date for performance is specified, at that time or date.

[Framework Agreement]

2.1	MRC Share Transfer

(a)

Promptly following the occurrence of the Ma’aden CP Satisfaction Date, Alcoa shall, subject to the terms of the GARA, procure that the Alcoa Shareholder:

(i)

executes a share transfer agreement in the form attached to this Agreement as Appendix 1 (the “STA”) in respect of the transfer of one hundred per cent (100%) of the Alcoa Shareholder’s shares in MRC to Ma’aden; and

(ii)

makes the Alcoa Contribution.

(b)

Promptly following the Alcoa Exit Date, Ma’aden shall procure that the articles of association and share register of MRC are updated to reflect the Alcoa Shareholder ceasing to be a shareholder in MRC pursuant to the MRC Share Transfer and obtain an updated commercial registration certificate for MRC, and Alcoa shall procure that the Alcoa Shareholder takes commercially reasonable steps to cooperate in this process by providing documentation that is in the Alcoa Shareholder’s possession or that the Alcoa Shareholder is readily capable of producing or procuring that is required from the Alcoa Shareholder by the Saudi Arabian General Investment Authority, the Ministry of Commerce and Industry or any other regulatory or government authority pursuant to applicable law in connection with the MRC Share Transfer and ensuring that the Alcoa Shareholder or its representatives attend the notary public in the Kingdom of Saudi Arabia to effect the relevant updates to the articles of association and share register of MRC.

(c)

Ma’aden shall indemnify Alcoa, the Alcoa Shareholder and/or any of their Affiliates against any and all costs, claims, expenses (including reasonable legal fees) and liabilities, which that person may incur by reason of the Alcoa Shareholder continuing to be named or being held out as a shareholder of MRC in the articles of association, the share register or any other document, website or material, of MRC on and from the Alcoa Exit Date until the date on which MRC’s articles of incorporation and share register are updated to reflect the MRC Share Transfer, provided that Ma’aden shall not be obliged to indemnify Alcoa, the Alcoa Shareholder and/or any of their Affiliates against costs, claims, expenses (including reasonable legal fees) and liabilities to the extent attributable to the failure by Alcoa or the Alcoa Shareholder to comply with its obligations in paragraph (b) above.

(d)

Ma’aden shall indemnify Arconic Inc. and Alcoa against any and all costs, claims, expenses (including reasonable legal fees) and liabilities which Arconic Inc. and/or Alcoa may incur by reason of any claim by SIDF under the Alcoa SIDF Guarantee made on and from the Alcoa Exit Date until the date on which SIDF:

(i)

countersigns the letter to SIDF dated on or about the date hereof from MRC, Ma’aden and Alcoa; or

(ii)

provides such other release of the Alcoa SIDF Guarantee as may be acceptable to Alcoa (acting reasonably).

(e)

Alcoa agrees not to assert, and to procure that the Alcoa Shareholder does not assert, any rights as a shareholder of MRC following the Alcoa Exit Date.

[Framework Agreement]

2.2	Application of Alcoa and Ma’aden Contributions

Ma’aden undertakes in favour of Alcoa to:

(a)

procure that MRC applies all the proceeds of the Alcoa Contribution and the Ma’aden Contribution:

(i)

first, on or about the Alcoa Exit Date or, if later, on or about the date on which such funds are released from the MRC Secured Account, in payment of any “Receivables” that are not “Discharged Receivables” (as each such term is defined in the Receivables Settlement Agreement); and

(ii)

thereafter, to make an Early Payment to reduce the Riyal Procurement Facility Balance Outstanding and/or in prepayment of the SIDF Facility and/or the working capital facility provided by The National Commercial Bank and/or to pay Debt Service (except for Debt Service under the Amended and Restated PIF Loan Agreement) and/or to pay Operating Costs and/or Permitted Capital Expenditure; and

(b)

procure that none of the proceeds of the Alcoa Contribution or the Ma’aden Contribution are applied other than as expressly prescribed in this Clause 2.2, including, for the avoidance of doubt, by procuring that MRC does not return any part of the proceeds of the Alcoa Contribution and/or the Ma’aden Contribution to Ma’aden (or its Affiliates), whether in the form of distributions or equity payments (by whatever name called) or otherwise.

2.3	Ma’aden undertakings in respect of the PIF Loan Agreements

Ma’aden undertakes in favour of Alcoa:

(a)

to procure that:

(i)

no later than 30 September 2020, all amounts owed by MRC under the Amended and Restated PIF Loan Agreement are written off and/or converted into MRC equity at no cost whatsoever to MRC, provided that this date will be extended for so long as Ma’aden is able to demonstrate to Alcoa (acting reasonably) that Ma’aden is using commercially reasonable endeavours to complete such write off and/or conversion;

(ii)

MRC does not pay to Ma’aden or to Ma’aden’s order or behalf, and Ma’aden does not accept or receive, if paid, any amount (whether on account of principal, commission, fees or otherwise), under or in connection with the Amended and Restated PIF Loan Agreement;

(iii)

(A) MRC does not make, or take any steps to make, and (B) Ma’aden does not accept or receive, or take any steps to accept or receive, any voluntary prepayment of the loans made to MRC under the Amended and Restated PIF Loan Agreement (provided that the discharge of amounts due under the Amended and Restated PIF Loan Agreement by way of an issuance of shares to Ma’aden by MRC pursuant to a conversion described in paragraph (a)(i) above where no cash payment is made or payable will not constitute a payment or a prepayment for the purposes of this Agreement); and

(iv)

any assignee or transferee in respect of any of Ma’aden’s rights and/or obligations under the Amended and Restated PIF Loan Agreement executes a deed of adherence in form and substance acceptable to Alcoa at the same time as it becomes the assignee or transferee of the relevant rights and/or obligations;

[Framework Agreement]

(v)

MAC does not make, or take any steps to make, any voluntary prepayment of the loans made to MAC under the PIF MAC Loan Agreement and Ma’aden, following any assignment or transfer of such loans to it, does not accept or receive, or take any steps to accept or receive, any voluntary prepayment of such loans; and

(vi)

MBAC does not make, or take any steps to make, any voluntary prepayment of the loans made to MBAC under the PIF MBAC Loan Agreement and Ma’aden, following any assignment or transfer of such loans to it, does not accept or receive, or take any steps to accept or receive, any voluntary prepayment of such loans;

(b)

not to assign or transfer its rights and/or obligations (if any) under:

(i)

the Amended and Restated PIF Loan Agreement without the prior written consent of Alcoa (such consent to be granted in Alcoa’s sole discretion); and/or

(ii)

the PIF MBAC Loan (as assigned or transferred to Ma’aden) and/or the PIF MAC Loan (as assigned or transferred to Ma’aden), in each case, without the prior written consent of Alcoa (such consent not to be unreasonably withheld or delayed).

2.4	Amendments to Project Documents

Each of the Parties shall (and shall procure that its Affiliates that are parties thereto) execute each of the Stage 1 Project Documents such that:

(a)

the Stage 1 Project Documents listed in paragraphs (i) and (iii) of such definition take effect on and from the Alcoa Exit Date in the form set out in Appendix 1 (Stage 1 Project Documents) to this Agreement; and

(b)

the Stage 1 Project Document listed in paragraph (ii) of such definition take effect immediately upon its execution by each of the parties thereto in the form set out in Appendix 1 (Stage 1 Project Documents) to this Agreement.

2.5	Amendments to SICUDA Arrangements

On and following the Alcoa Exit Date, each of the Parties shall (and shall procure that its Affiliates) use commercially reasonable efforts to amend the arrangements between the parties to the Shared Infrastructure Co-Operation and Utilities Distribution Agreement (“SICUDA”) and their affiliates in full form agreements by 31 December 2019, inter alia, to conform with the terms set out in Appendix 3 (SICUDA Memorandum of Agreement), and that the arrangements between the parties to the SICUDA shall cease to apply to the extent that they are inconsistent with the terms set out in Appendix 3 (SICUDA Memorandum of Agreement).

2.6	Amendments to MBAC and MAC Articles of Association

The Parties intend to procure that the MBAC articles of association and the MAC articles of association are amended so as to be in the form set out at Appendix 2 (MAC and MBAC Articles of Association), an Arabic version of which shall be submitted to the Ministry of Commerce and Industry of the Kingdom of Saudi Arabia (“MoCI”) for approval promptly following the Alcoa Exit Date, subject to any changes which are requested by MoCI, and that promptly following the approval of the relevant articles of association by MoCI, Ma’aden’s and Alcoa’s duly authorized signatories on their behalf execute the relevant articles of association before the competent notary public in the Kingdom of Saudi Arabia and take all such further actions as shall be necessary to complete the amendments of the articles of association.

[Framework Agreement]

3.	Stage 2 Undertakings

Each of the undertakings in this Clause 3 shall constitute a “Stage 2 Undertaking” for the purposes of this Agreement and shall become effective immediately upon Ma’aden being or becoming a lender to MBAC or MAC to be performed at the times specified.

3.1	MBAC and MAC Senior Debt

(a)

Ma’aden undertakes in favour of Alcoa to use its commercially reasonable endeavours to refinance the terms applicable to MBAC’s Commercial Bank Facilities and PIF MBAC Loan (as assigned or transferred to Ma’aden) and MAC’s Commercial Bank Facilities and PIF MAC Loan (as assigned or transferred to Ma’aden) on terms (including maturity, average life and applicable margin) similar or better than the terms under the current PIF MBAC Loan Agreement and PIF MAC Loan Agreement, respectively, by no later than 31 December 2025 in respect of MBAC and 31 March 2030 in respect of MAC, provided that:

(i)

MBAC’s Commercial Bank Facilities will be refinanced in priority to the PIF MBAC Loan (as assigned or transferred to Ma’aden) and MAC’s Commercial Bank Facilities will be refinanced in priority to the PIF MAC Loan (as assigned or transferred to Ma’aden); and

(ii)

each of MBAC and MAC (as applicable) will, immediately following such refinancing of its senior debt, hold not less than a “Minimum Debt” (i.e. the Total Net Debt including the relevant PIF Loan (as assigned or transferred to Ma’aden)) of 1.5x of its EBITDA (calculated in accordance with the accounting standards that then apply in the Kingdom of Saudi Arabia by reference, in each case, to the EBITDA definitions set out in the MBAC CTA and MAC CTA, as applicable) averaged over the preceding twenty (20) quarters, provided further that a Total Net Debt of lower than 1.5x EBITDA will not constitute a dividend block under MBAC’s or MAC’s (as applicable) refinanced senior debt.

(b)

Alcoa agrees to cooperate in any refinancing of the terms applicable to, as the case may be, the senior debt of MBAC and MAC by:

(i)

promptly reviewing and providing feedback on draft documentation;

(ii)

promptly providing all required supporting documentation, including in connection with creditor “know your customer” requirements;

(iii)

attending all significant calls and meetings;

(iv)

jointly with Ma’aden, appointing advisors on market standard terms;

(v)

jointly with Ma’aden, commissioning reports (technical, commercial, modelling etc.); and

(vi)

procuring that neither of the Alcoa shareholders in MAC and MBAC nor their board of managers representatives exercise their voting rights to vote against a resolution to approve any such refinancing unless there are valid grounds (acting reasonably) for doing so,

on the basis that each Party will bear its own costs, and provided that no Party shall be required to provide any form of guarantee or sponsor support in connection with such refinancing.

[Framework Agreement]

(c)

If:

(i)

MBAC’s Commercial Bank Facilities and the PIF MBAC Loan (as assigned or transferred to Ma’aden) have not been so refinanced prior to 31 December 2025; or

(ii)

MAC’s Commercial Bank Facilities and the PIF MAC Loan (as assigned or transferred to Ma’aden) have not been so refinanced prior to 31 March 2030,

then Ma’aden shall, within thirty (30) days from the dates referred to above (as applicable) appoint an international investment bank selected by Ma’aden and approved by Alcoa (such approval not to be unreasonably withheld or delayed) to opine on whether the market to refinance MBAC’s or MAC’s (as applicable) senior debt in accordance with paragraph (a) above exists for MBAC or MAC (as applicable) based on the circumstances, including the financial condition of MBAC or MAC (as applicable), existing at the time. Such investment bank shall be required to deliver its opinion within ninety (90) days of its appointment, and the balloon repayment instalment(s) under the PIF MBAC Loan (as assigned or transferred to Ma’aden) or the PIF MAC Loan (as assigned or transferred to Ma’aden) (as applicable) will be deferred until such investment bank has delivered its opinion. The costs of so appointing such investment banks will be borne by MBAC or MAC (as applicable).

(d)

If the appointed investment bank confirms in its opinion referred to in paragraph (c) above that such a market does not exist, then:

(i)

the balloon repayment instalment(s) under the PIF MBAC Loan (as assigned or transferred to Ma’aden) or the PIF MAC Loan (as assigned or transferred to Ma’aden) (as applicable) will be deferred for eighteen (18) months from the dates referred to under paragraphs (c)(i) or (c)(ii) above (as applicable) under the existing terms; and

(ii)

if, at the end of such eighteen (18) month period, there is still no such market to refinance the PIF MBAC Loan (as assigned or transferred to Ma’aden) or the PIF MAC Loan (as assigned or transferred to Ma’aden) (as applicable), then the balloon repayment instalment(s) under such loan will be serviced based on a heavy tail four (4) years amortization profile and a step-up margin (to be agreed between the Parties) with any non-payment by MBAC or MAC (as applicable) constituting an event of default, provided that Ma’aden will not (unless mutually agreed by the Parties) be entitled to convert such loan into equity or to make an equity cash call to repay such loan.

(e)

If the appointed investment bank confirms in its opinion referred to in paragraph (c) above that such a market does exist, then, the balloon repayment instalment(s) under the PIF MBAC Loan (as assigned or transferred to Ma’aden) or the PIF MAC Loan (as assigned or transferred to Ma’aden) (as applicable) will be deferred until such loan is refinanced.

3.2	Amendments to the PIF MAC Loan Agreement and PIF MBAC Loan Agreement

Ma’aden undertakes in favour of Alcoa to procure that, immediately upon the assignment or transfer to Ma’aden, or an Affiliate of Ma’aden, of any rights or obligations in or relating to, the PIF MBAC Loan or the PIF MAC Loan, as applicable:

(a)

the definition of “PIF Fixed Cash Sweep End Date” in the PIF MBAC Loan Agreement shall be amended such that there is no cash sweep under the PIF MBAC Loan after 30 June 2021; and

[Framework Agreement]

(b)

the definition of “PIF Cash Sweep End Date” in the PIF MAC Loan Agreement shall be amended such that there is no cash sweep under the PIF MAC Loan after 31 December 2022; and

(c)

the restriction on Dividends set out in clause 4-2-8(a) (Dividend block) of the PIF MBAC Loan Agreement shall cease to apply.

3.3	Alcoa Consent to Assignment of MAC and MBAC Loans

Alcoa acknowledges that Ma’aden is providing the Stage 2 Undertakings in order to grant Alcoa with adequate protection in respect of the anticipated assignment or transfer to Ma’aden of the PIF MBAC Loan and the PIF MAC Loan, and Alcoa hereby agrees not to assert any consent right in respect of, and to procure that neither of the Alcoa shareholders in MAC and MBAC nor their board of managers representatives exercise their voting rights to vote against a resolution to approve, any such assignment or transfer.

4.	Representations and Warranties

Each Party makes the following representations and warranties to the other Party on the date hereof:

(a)

it is duly incorporated and validly existing in accordance with the laws of the country and/or state under which it is incorporated;

(b)

it has the power and authority to execute and deliver, to perform its obligations under and to undertake the transactions anticipated by this Agreement (or to procure that such obligations and transactions are undertaken by its Affiliates) and all necessary corporate and other action has been taken to authorise the execution, delivery and performance of this Agreement;

(c)

its officers have the power and authority to act on its behalf in entering into this Agreement;

(d)

it is not insolvent, no petition has been filed relating to its insolvency and no proceedings have been issued for its dissolution or liquidation;

(e)

this Agreement has been duly executed and constitutes a valid, legal and binding obligation of such Party enforceable in accordance with its terms;

(f)

the execution and delivery of this Agreement and the performance by it or its relevant Affiliates of its obligations under and the transactions anticipated by this Agreement will not contravene any law applicable to it or such Affiliates or conflict with or result in a breach of or default under its or their corporate charter or other organizational documents or any agreement or other obligation binding on it or any of its Affiliates;

(g)

all information provided by it or any of its Affiliates (including their respective advisers) to the other Party or any of the other Party’s Affiliates (including their respective advisers) in connection with the transaction contemplated under this Agreement (including, for the avoidance of doubt, information with respect to the “Receivables” (as such term is defined in the Receivables Settlement Agreement) set out in Appendix 1 (Receivables) to the Receivables Settlement Agreement) was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated, and no information has been provided or withheld and no event or circumstance has occurred that (in any case) would result in any such information being untrue or misleading.

[Framework Agreement]

Remedies

(a)

If:

(i)

Ma’aden breaches any of the undertakings set out in Clause 2.2 (Application of Alcoa and Ma’aden Contributions) or MRC does not apply the proceeds of the Alcoa Contribution and the Ma’aden Contribution in the manner set out in Clause 2.2 (Application of Alcoa and Ma’aden Contributions), then supply of product from MAC to MRC under the Aluminium Purchase Agreement shall be suspended and reallocated to Ma’aden and Alcoa in proportion to their shareholding in MAC until such breach is remedied;

(ii)

Ma’aden breaches any of the undertakings set out in paragraph (iii), (v) or (vi) of Clause 2.3(a) (Ma’aden undertakings in respect of the PIF Loan Agreements) and such breach is not remedied within thirty (30) days from the date on which the relevant voluntary prepayment is made, then Ma’aden shall pay to Alcoa an amount equal to 25.1% of the relevant voluntary prepayment; or

(iii)

Ma’aden breaches any of the undertakings set out in Clause 3.2 (Amendments to the PIF MAC Loan Agreement and PIF MBAC Loan Agreement) and such breach is not remedied within thirty (30) days from the date of such breach, then Ma’aden shall pay to Alcoa an amount equal to 25.1% of the Dividends that would have been made to the shareholders in MBAC or MAC (as applicable) on each date that such a Dividend would have been made, in each case, but for such breach.

(b)

The Parties hereby acknowledge and agree that:

(i)

Clause 2.2 (Application of Alcoa and Ma’aden Contributions), paragraphs (iii), (v) and (vi) of Clause 2.3(a) (Ma’aden undertakings in respect of the PIF Loan Agreements), Clause 3.2 (Amendments to the PIF MAC Loan Agreement and PIF MBAC Loan Agreement) and Clause 5(a) above are material terms which are fundamental to the commercial bargain between the Parties and are primary obligations of the Parties;

(ii)

without affecting any other rights or remedies that any Party may have, the other Party may be irreparably harmed by any breach of the terms of this Agreement and that the rights, consequences and remedies provided for in this Clause 5 shall be in addition to and not in substitution for any other rights or remedies that may be available to the Parties or their Affiliates under this or any other agreement arising pursuant to any default or failure by a Party or its Affiliates to comply with its obligations under this Agreement or by operation of applicable laws (including, for the avoidance of doubt, the right of a Party or its Affiliates to claim damages for any loss suffered, the remedies of final or interim injunction, specific performance and other equitable relief, or any combination of these remedies); and

(iii)

the rights, consequences and remedies provided for in this Clause 5 do not (and shall not be construed to) constitute a penalty imposed on Ma’aden and that such rights, consequences and remedies reflect the Parties’ genuine pre-estimate of the damages that Alcoa would suffer in the circumstances contemplated by this Clause 5.

[Framework Agreement]

(c)

Without prejudice to Clause 5(b) above, each of the Parties acknowledges and agrees that:

(i)

Alcoa and Ma’aden have a common commercial objective and interest in compliance with the Stage 1 Undertakings and the Stage 2 Undertakings included in this Agreement, and that this is dependent on:

(A)

mutual trust and confidence between Alcoa and Ma’aden; and

(B)

the Transaction Steps being operated and managed in accordance with this Agreement;

(ii)

Clause 2.2 (Application of Alcoa and Ma’aden Contributions), paragraphs (iii), (v) and (vi) of Clause 2.3(a) (Ma’aden undertakings in respect of the PIF Loan Agreements), Clause 3.2 (Amendments to the PIF MAC Loan Agreement and PIF MBAC Loan Agreement) and Clause 5(a) above are reasonable and proportionate in order to secure performance by the Parties of their obligations under this Agreement and thereby to protect the Parties’ legitimate interests described in paragraph (c)(i) above; and

(iii)

each of Alcoa and Ma’aden has engaged legal advisers to advise it in relation to this Agreement.

6.	Miscellaneous

6.1

No Waiver

The failure, delay or forbearance of any Party to insist upon, exercise or enforce any right or remedy conferred by this Agreement shall not be or be deemed to be or be construed as a waiver of the right or remedy or of any other rights or remedies nor shall such failure, delay or forbearance operate as a bar to the exercise or enforcement of the right or remedy at any time or times thereafter.

6.2	Further Assurances

The Parties hereby agree to execute and deliver promptly all powers of attorney, consents and additional instruments, and to take any such further action which may reasonably be required in order to consummate the transactions anticipated by this Agreement.

6.3	Process Agent

Each Party hereby irrevocably agrees to appoint Law Debenture Corporate Services Limited, with offices at the date of this Agreement at Fifth Floor, 100 Wood Street, London EC2V 7EX, England as its authorised agent on which any and all legal process may be served in any such action, suit or proceeding brought in the courts of England, including proceedings to enforce an arbitral award rendered pursuant to this Agreement, and to execute such documentation as may reasonably be required by such agent in connection with its appointment. Each Party agrees that service of process in respect of it upon such agent, together with written notice of such service given to it as provided in Clause 6.4 (Notices), shall be deemed to be effective service of process upon it in any such action, suit or proceeding. Each Party agrees that the failure of such agent to give notice to it of any such service shall not impair or affect the validity of such service or any judgment rendered in any action, suit or proceeding based thereon. If for any reason such agent shall cease to be available to act as such, each such Party agrees to designate a new agent in the City of London, on the terms and for the purposes of this Clause 6.3. Nothing herein shall be deemed to limit the ability of any Party to serve any such legal process in any other manner, or to obtain jurisdiction over the other Party in such other jurisdictions as may

[Framework Agreement]

be permitted or required by applicable laws, including according to the relevant arbitration rules.

6.4

Notices

Any notice or request required or permitted to be given or made under this Agreement shall be in writing and shall be deemed to have been made or given when it shall be delivered by hand or by registered mail or facsimile to the Party to which it is required or permitted to be given or made at such Party’s address or fax number specified below (in each case with a copy thereof sent simultaneously be electronic mail to the email addresses, if any, specified below) or at such other address as such Party shall have designated by notice to the Party giving such notice or making such request:


(a)in the case of Ma’aden:
Address:	P.O. Box 68861 Riyadh 11537 Kingdom of Saudi Arabia
Facsimile: +966 1 874 8200 Email: [omitted] Attention: Senior Vice President Aluminium SBU
With a copy to:
Ma’aden Legal Department P.O. Box 68861 Riyadh 11537 Kingdom of Saudi Arabia Facsimile: +966 1 874 8290 Email: notices@maaden.com.sa Attn: Chief Legal Counsel
(b)in the case of Alcoa:
Address:	201 Isabella Street Pittsburgh, PA 15212 United States of America
Email: AlcoaLegalNotices@alcoa.com Attention: General Counsel

6.5	Partial Invalidity

If, at any time, any provision of this Agreement is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.

6.6	Counterparts

This Agreement may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.

[Framework Agreement]

7.	Governing Law; Dispute Resolution

7.1	Governing Law

This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

7.2	Reference to Senior Management

Prior to referring any dispute, controversy or claim arising out of or in connection with this Agreement, or the breach, termination or invalidity thereof, (for the purposes of this Clause 7 a “dispute”), other than proceedings to enforce an agreement reached between the Parties under this Clause 7.2, to arbitration pursuant to Clause 7.3 below, the Party wishing to or considering making such reference shall notify in writing the other Party of the nature of the dispute and its background (for the purposes of this Clause 7, a “dispute notice”) and its proposed basis for settlement of such dispute and the other Party shall respond to such dispute notice within fourteen (14) days of receipt, setting out any clarification it may feel relevant and including its proposed basis for settlement. The chief executives or presidents of the ultimate parent companies of each Party or their designees shall then meet within thirty (30) days of the issue of the dispute notice to attempt a reconciliation and settlement of the dispute. No statement as to a Party’s proposed basis for settlement nor any discussions or communications between the Parties pursuant to this Clause 7.2 (except for the terms of any agreed settlement between the Parties) may be relied upon or referred to in later court, arbitration, enforcement or appeal proceedings.

7.3	Dispute Resolution

(a)

If any dispute arising out of or in connection with the Agreement is not resolved pursuant to Clause 7.2 above within forty five (45) days of its referral to the Parties’ senior management, such dispute shall be, if requested by any Party, referred to and finally settled by arbitration under the Rules of Arbitration of the International Chamber of Commerce as amended or substituted from time to time (the “ICC Rules” and the proceedings brought in accordance with this Clause 7.3), which ICC Rules are deemed to be incorporated into this Agreement except to the extent expressly modified by this Clause 7.3. Arbitration shall be the exclusive method for resolution of the dispute and the determination of the arbitrators shall be final and binding. The Parties agree that they will give conclusive effect to the tribunal’s award and that judgment thereon may be entered and enforced by any court of appropriate jurisdiction.

(b)

The tribunal shall consist of three (3) arbitrators, one of whom shall be nominated by each Party and the third of whom, who shall act as chairman, shall be jointly nominated by the two arbitrators nominated by the Parties. Failing agreement as to the identity of the third arbitrator within five (5) Business Days of being required to do so, such third arbitrator shall be nominated by the International Court of Arbitration in accordance with the ICC Rules. Failing agreement between the two Party nominated arbitrators as to the identity of the third arbitrator within thirty (30) calendar days of the nomination date of the second arbitrator, such third arbitrator shall be appointed by the International Court of Arbitration of the International Chamber of Commerce in accordance with the ICC Rules.

(c)

The seat of arbitration shall be London. The language to be used in the arbitration shall be English, and any documents or portions of them presented at such arbitration in a language other than English shall be accompanied by an English translation thereof. The tribunal shall decide such dispute in accordance with the substantive laws of England applicable hereto. The emergency arbitrator provisions in the ICC Rules shall not apply.

[Framework Agreement]

7.4	Jurisdiction

(a)

The courts of England shall, subject to paragraph (b) below, have non-exclusive jurisdiction with respect to the enforcement of the arbitration provisions of this Agreement and the Parties expressly submit to the jurisdiction of such courts with respect to any proceedings to enforce the arbitration provisions of this Agreement. Each Party irrevocably waives any objection which it might at any time have to the courts of England being nominated as the forum to hear and decide any such proceedings and agrees not to claim that the courts of England are not a convenient or appropriate forum.

(b)

Without resulting in the waiver of any remedy under this Agreement and in conjunction with each disputing Party’s rights in accordance with Rule 25 of the ICC Rules, nothing in this Clause 7 shall preclude a disputing Party from seeking injunctive relief from a court pending the commencement of arbitral proceedings in accordance with Clause 7.3 (or pending the arbitral tribunal’s determination of the merits of the dispute). The Parties hereby irrevocably submit to the non-exclusive jurisdiction of the courts of England for such injunctive relief and waive any objection or defence they may have to the venue or jurisdiction of such courts. Without limiting the generality of the foregoing, the Parties shall have the right to seek injunctive relief in any court of competent jurisdiction and the seeking of injunctive relief in one or more jurisdiction shall not preclude a Party from seeking such relief in any other jurisdiction.

This Agreement has been entered into on the date stated at the beginning of this Agreement and executed as a deed by each of the Parties and is intended to be and is delivered by them as a deed on the date specified above.

[Framework Agreement]

Signatures

Executed as a deed by

SAUDI ARABIAN MINING COMPANY (MA’ADEN)

/s/ Ali. S. Al-Qahtani

Name:Ali. S. Al-Qahtani

Title:Vice President

*Signature of Witness: /s/ Fawaz Alamzi

Name of Witness: Fawaz Alamzi

ID number: [Omitted]

Place of issue: [Omitted]

*Signature of Witness: /s/ Turki Al-Harbi

Name of Witness: Turki Al-Harbi

ID number: [Omitted]

Place of issue: [Omitted]

*Each witness declares himself an adult Muslim male

[Framework Agreement]

Executed as a deed by

ALCOA CORPORATION

/s/ Renato de C.A. Bacchi

Name:Renato de C.A. Bacchi

Title:Vice President and Treasurer

Signature of Witness: /s/ Michel Gemayel

Name of Witness: Michel Gemayel

Address: 201 Isabella Street, Suite 500
Pittsburgh, PA 15212 United States

[Framework Agreement]

EXHIBIT 10.2

EXECUTION VERSION

Amendment and Restatement Deed dated
26 June 2019

relating to the

Aluminium Project Framework Shareholders' Agreement

originally dated 20 December 2009 (as amended and/or restated and/or novated from time to time)

between

SAUDI ARABIAN MINING COMPANY (MA'ADEN)

and

ALCOA CORPORATION

EXECUTION VERSION

THIS AMENDMENT AND RESTATEMENT DEED (hereinafter referred to as "this Deed"), is made and entered into on 23/10/1440 in the Hejerian calendar, corresponding to the 26th day of June, 2019 in the Gregorian calendar, by and between:

(1) SAUDI ARABIAN MINING COMPANY (MA'ADEN), a company organized under the laws and regulations of the Kingdom of Saudi Arabia with commercial registration No.1010164391, having its head office and address at PO Box 68861, Riyadh 11537, Kingdom of Saudi Arabia (together with its legal successors and permitted assigns, hereinafter referred to as "Ma'aden"); and

(2) ALCOA CORPORATION, a company organised and existing under the laws of the State of Delaware, USA, whose principal place of business is at 201 Isabella Street, Pittsburgh, PA 15212, USA (herein called "Alcoa"),

(each a "Party", or collectively as the "Parties").

RECITALS

WHEREAS:

(A)

Arconic Inc. (formerly known as Alcoa Inc.) and Ma'aden entered into a Framework Shareholders' Agreement dated 3/1/1431 H, corresponding to the 20^th day of December 2009 G pursuant to which three companies were formed to pursue the integrated bauxite mining, alumina refining, aluminium smelting and aluminium rolling project in the Kingdom of Saudi Arabia including Ma'aden Rolling Company with commercial registration number 2055012518 and having its registered address at PO Box 11342, Al-Jubail Industrial City 31961, Ras Al-Khair Industrial City, Kingdom of Saudi Arabia, established on 2/11/1431 H (corresponding to the 10^th day of October 2010 G) ("MRC") which was formed to pursue the aluminium rolling project.

(B)	Arconic Inc. and Ma'aden entered into a Signing Side Letter also on 3/1/1431 H corresponding to the 20^th day of December 2009 G (the "Signing Side Letter") clarifying certain matters in the Original Agreement.

(C)	The Original Agreement was amended by Arconic Inc. and Ma'aden in the First Supplemental Agreement on 14/4/1431 H, corresponding to the 30^thday of March 2010 G (the "First Supplemental Agreement").

(D)

On or around October 2016, Arconic Inc. and Ma'aden entered into an agreement to amend and restate the Original Agreement (as amended by the First Supplemental Agreement) (the "2016 Amendment and Restatement"). The Original Agreement (as amended by the First Supplemental Agreement and subsequently amended and restated by the 2016 Amendment and Restatement) was subsequently novated by Arconic Inc. to Alcoa pursuant to a novation agreement dated 24^th December 2016 G (the "Novation Agreement").

(E)	Ma'aden and Alcoa have agreed that Alcoa Saudi Rolling Inversiones S.L. shall transfer its 25.1% equity shareholding in MRC to Ma'aden such that following such transfer, Alcoa shall have no direct or indirect equity interest in MRC (the "Share Transfer").

(F)

In connection with the Share Transfer, certain parties, including Alcoa, Ma'aden and MRC, have entered into a Global Amendment and Restatement Agreement dated on or about the date of this Deed (the "GARA") and Alcoa and Ma'aden have entered into a Framework Agreement dated on or about the date of this Deed (the "Framework Agreement").

(G)

The Parties wish to amend the Entire Agreement to reflect the Share Transfer and Alcoa ceasing to own an interest in the aluminium rolling project and have agreed to amend certain parts of the Entire Agreement and restate the Entire Agreement on the terms set out in this Agreement as from the Amendment Effective Date (as defined below).

EXECUTION VERSION

NOW, THEREFORE, in consideration of the transactions contemplated in the GARA and the Framework Agreement and the mutual covenants and promises contained in this Deed, the Parties hereby agree as follows:

1	DEFINITIONS AND INTERPRETATION

1.1	Definitions

In this Deed:

"2016 Amendment and Restatement" has the meaning given in Recital (D) above.

"Amendment Effective Date" means the Alcoa Exit Date, as defined and determined in accordance with the terms of the GARA.

"Entire Agreement" means the Original Agreement, as amended by the First Supplemental Agreement, as amended and restated pursuant to the 2016 Amendment and Restatement and as novated by Arconic Inc. to Alcoa pursuant to the Novation Agreement.

"First Supplemental Agreement" has the meaning given in Recital (C) above.

"Framework Agreement" has the meaning given in Recital (F) above.

"GARA" has the meaning given in Recital (F) above.

"MRC" has the meaning given in Recital (A) above.

"Novation Agreement" has the meaning given in Recital (D) above

"Original Agreement" means the Aluminium Project Framework Shareholders' Agreement that was entered into on 3/1/1431 H, corresponding to the 20^th day of December 2009 G, between the Parties, as clarified by the Signing Side Letter.

"Share Transfer" has the meaning given in Recital (E) above.

"Signing Side Letter" has the meaning given in Recital (B) above.

1.2	Incorporation of Definitions and Interpretation

Subject to Clause 1.1 (Definitions), unless the context otherwise requires, words and expressions defined and references contained in the Entire Agreement have the same meanings and construction in this Deed.

2	AMENDMENT AND RESTATEMENt

2.1	Amendment and Restatement

The Parties hereby agree to amend and restate the Entire Agreement so that it shall be read as set out in Appendix 1 to this Deed with such amendment and restatement to take effect on and from the Amendment Effective Date.

2.2	Continuing Provisions

The provisions of the Entire Agreement shall, except where expressly amended under this Deed, continue in full force and effect in accordance with their terms.

2.3	No waivers

EXECUTION VERSION

Nothing in this Deed shall constitute or be deemed to constitute a waiver of the rights of any Party arising under the Entire Agreement before the Amendment Effective Date, except as expressly set out in this Deed and each Party expressly reserves all of its rights and remedies in respect of any breach or default which may be outstanding under the Entire Agreement.

3	WARRANTIES

3.1	Warranties

Each Party makes the warranties and undertakings set out in clause 20 (Warranties) of the Entire Agreement to the other Party on its behalf and on behalf of any Affiliate being a Shareholder on the date hereof and on the Amendment Effective Date, in each case by reference to the facts and circumstances then existing, and as if each reference in those warranties and undertakings to "this Agreement" were a reference to this Deed and the Entire Agreement, as amended and restated in the form set out in Appendix 1 to this Deed.

4	Miscellaneous

4.1

Notices

Any notices to be given under or in connection with this Deed shall be given in accordance with the requirements set out in clause 23.1 (Notices) of the Entire Agreement.

4.2	Counterparts

This Deed may be executed in any number of counterparts and by the Parties to it on separate counterparts and each such counterpart shall constitute an original of this Deed but all of which together constitute one and the same instrument. This Deed shall not be effective until each Party has executed at least one counterpart.

4.3	Third Party Rights

This Deed shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns. A Person who is not a Party to this Deed has no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce or enjoy the benefit of any term of this Deed.

4.4	Governing Law

The construction, validity and performance of this Deed and all non-contractual obligations arising from or connected with this Deed will be governed by and construed in accordance with the laws of England and Wales, without regard to conflicts of law provisions thereof. The dispute mechanisms in clause 21 (Governing Law, Dispute Resolution and Language) of the Entire Agreement shall apply to this Deed as though incorporated herein, mutatis mutandis.

EXECUTION VERSION

IN WITNESS WHEREOF, this document has been executed as a deed and is delivered and takes effect on the date appearing on the date first above written.


EXECUTED as a deed by SAUDI ARABIAN MINING COMPANY (MA'ADEN) acting by Ali S. Al-Qahtani in the presence of:	/s/ Ali S. Al-Qahtani
	Authorised Signatory

/s/ Lama Alrushud
Print name of witness: Lama Alrushud
Address:…[Address Omitted]


EXECUTED as a deed by ALCOA CORPORATION acting by Renato Bacchi in the presence of:	/s/ Renato Bacchi
	Authorised Signatory

/s/ Michel Gemayel
Print name of witness: Michel Gemayel
Address: 201 Isabella Street, Suite 500 Pittsburgh, PA 15212, United States

EXECUTION VERSION

APPENDIX 1

AMENDED AND RESTATED

ALUMINIUM PROJECT FRAMEWORK SHAREHOLDERS' AGREEMENT

between

SAUDI ARABIAN MINING COMPANY (MA'ADEN)

and

ALCOA CORPORATION

Execution Version

CONTENTS


Clauses			Pages
1	Definitions and Interpretation		2
	1.1	Definitions	2
	1.2	Interpretation	11
	1.3	Third Party Rights	12
2	Term of the Agreement; Parent Company Guarantee		12
	2.1	Term of the AgreemenT	12
	2.2	Parent Company Guarantee	12
3	Establishment of a particular Company		12
	3.1	[INTENTIONALLY OMITTED]	12
	3.2	[INTENTIONALLY OMITTED]	12
	3.3	Project Milestones	12
	3.4	[INTENTIONALLY OMITTED]	13
	3.5	Details of each Company	13
	3.6	Purpose	13
4	Share Capital and Funding by Shareholders		14
	4.1	Share Capital	14
	4.2	Required Shareholder Funding	15
	4.3	Shareholder Loans	15
	4.4	Form and Manner of Funding by Shareholders	15
	4.5	Default Commission Rate	16
	4.6	Limitations and Shareholder Funding	16
	4.7	Pledge	16
	4.8	Adherence Agreement	16
	4.9	[INTENTIONALLY OMITTED]	17
5	Responsibilities of the Parties		17
	5.1	Roles of the Parties	17
	5.2	Role of Ma'aden	17
	5.3	Role of Alcoa	17
	5.4	Aluminium Offtake	17
	5.5	Support for Downstream Industry and Priority to the Domestic Market	18
	5.6	[INTENTIONALLY OMITTED]	18
	5.7	[INTENTIONALLY OMITTED]	18
	5.8	Alumina Supply Arrangements and Excess Alumina	18
	5.9	Capacity Expansions	18
	5.10	Break-Off Projects	19
	5.11	Value Added Projects	20
	5.12	Responsibilities under the Gas Allocation Letter	21
	5.13	Provision of Information by Parties and the Companies	21
6	[INTENTIONALLY OMITTED]		22
7	Shareholders' Meetings		22
	7.1	Shareholders' Meetings	22
	7.2	Supermajority Items	22
	7.3	Language	22
8	Board of Managers		24
	8.1	Appointment of Managers to each Company	24
	8.2	Removal of Managers	24
	8.3	Appointment of Senior Officers to each Company; Removal	25
	8.4	Meetings of the Board of Managers of each Company	26
	8.5	Voting Thresholds	27
	8.6	Resolutions	28
	8.7	Information	28
	8.8	Duties of Managers	28

Execution Version


	8.9	Company Policies	28
	8.10	[INTENTIONALLY OMITTED]	29
9	Deadlock		29
	9.1	Deadlock Arising	29
	9.2	Deadlock Referral	30
	9.3	Sole Remedies	31
10	Senior Debt Financing of the Project		31
	10.1	[INTENTIONALLY OMITTED]	31
	10.2	[INTENTIONALLY OMITTED]	31
	10.3	No Further Liability	31
11	Distributions Policy; Taxes		31
	11.1	Distributions Policy	31
	11.2	Local Community Projects; Research and Development Programme	35
	11.3	Tax and Zakat	35
12	Accounting System, Books and Budgets		36
	12.1	Accounting System and Standards	36
	12.2	Language of Reporting to the Shareholders	36
	12.3	Financial Statements	36
	12.4	Books and Audit Rights	37
	12.5	Statutory Obligations	37
	12.6	Auditors	37
	12.7	Rights of Managers not Limited	37
	12.8	Annual and Special Budgets	37
	12.9	Emergency Funding	38
13	Entry Payment, Pre-Incorporation Costs and Transfer of Pre-Incorporation Materials		39
	13.1	Payment of Entry Payment and Pre-Incorporation Costs	39
	13.2	[INTENTIONALLY OMITTED]	39
14	Events of Default and Consequences		39
	14.1	Events of Default	39
	14.2	Consequences of Events of Default	40
	14.3	Transfer Upon Event of Default of Alcoa	40
	14.4	Additional Consequences of a Funding Default	41
	14.5	Ma'aden as the Defaulting Party	43
	14.6	[INTENTIONALLY OMITTED]	44
	14.7	Other Remedies	44
15	[INTENTIONALLY OMITTED]		44
16	Termination and Expiry		44
	16.1	Full Termination and Expiry	44
	16.2	Partial Termination	45
	16.3	Consequences of Termination at the Expiry of the Term	45
	16.4	Consequences following Termination	45
	16.5	Survival and Rights Unaffected	45
17	Sale or Transfer of Shares, Pledge		46
	17.1	General Prohibitions	46
	17.2	Transfers to Affiliates	47
	17.3	Permitted Transfers	47
	17.4	Transfers of Shares	48
	17.5	Notice of Offers	48
	17.6	Notice of Right to Match the Offer	48
	17.7	Right of Remaining Party to Match the Offer	48
	17.8	Transfer Requirements	49
	17.9	Completion of Transfer	49
	17.10	General	50
	17.11	Further Assurances; Sole Shareholder	50
	17.12	Put And Call Option	50

iii

Execution Version


	17.13	Put and Call Option Valuations	51
	17.14	Disposals to Saudi public companies or public funds	52
18	Valuations		53
	18.1	Fair Market Value	53
	18.2	Valuation Panel	53
	18.3	Submission of Valuation	53
	18.4	Valuation Approach	53
19	Assignment		54
20	Warranties		54
21	Governing Law, Dispute Resolution and Language		55
	21.1	Governing Law	55
	21.2	Reference to Senior Management	55
	21.3	Dispute Resolution	55
	21.4	Continuing Obligations	56
	21.5	Jurisdiction	56
	21.6	Process Agent	56
	21.7	Language	56
22	Confidentiality and Public Announcements		57
	22.1	Confidentiality	57
	22.2	Disclosure of Information by Managers to Shareholders and Parties	58
	22.3	Announcements	58
	22.4	Survival	58
23	Notices		58
	23.1	Notices	58
	23.2	Effects	59
24	Further Assurances		59
	24.1	Undertakings	59
	24.2	Further Assurances	60
	24.3	Business Conduct	60
25	Competing Businesses		60
	25.1	Acknowledgement	60
	25.2	No Obligation to Offer	60
	25.3	Competing Projects Following Termination	61
26	General Provisions		61
	26.1	Severability	61
	26.2	Waiver	61
	26.3	Compliance with Law and Permits	61
	26.4	Intellectual Property	62
	26.5	Entire Agreement	63
	26.6	Improper Inducements	63
	26.7	Language	63
	26.8	Amendments	63
	26.9	No Partnership	63
	26.10	Priority of Documents	64
	26.11	Waiver of Immunity	64
	26.12	No Liability for Consequential Losses, etc.	64

Execution Version

Schedule


SCHEDULE 1
Parent Company Guarantee	66
Schedule 2
Schedule 3
Schedule 4
[INTENTIONALLY OMITTED]	74
Schedule 5
Adherence Agreement	75
Schedule 6
[INTENTIONALLY OMITTED]	77
Schedule 7
Description of the Ras Al-Khair Complex	78
Schedule 8
Description of the Mine	81
Schedule 9
Project Agreements	83
Schedule 10
[INTENTIONALLY OMITTED]	91
Schedule 11
[INTENTIONALLY OMITTED]	92
Schedule 12
[INTENTIONALLY OMITTED]	93
Schedule 13
[INTENTIONALLY OMITTED]	94
Schedule 14
[INTENTIONALLY OMITTED]	95
Schedule 15
Project Milestones	96
Schedule 16
Information Undertakings	97
Schedule 17
Formulation for Excess Cash	103

Execution Version

ALUMINIUM PROJECT FRAMEWORK SHAREHOLDERS' AGREEMENT

THIS FRAMEWORK SHAREHOLDERS' AGREEMENT (hereinafter referred to as the "Agreement"), was originally made and entered into on 3/1/1431H, corresponding to the 20^th day of December 2009 G, as clarified by a Signing Side Letter also made and entered into on 3/1/1431 H corresponding to the 20^th day of December 2009 G, as amended by the First Supplemental Agreement, made and entered into on 14/4/1431 H, corresponding to 30^th March 2010 G, as subsequently amended and restated on or around October 2016 G, as novated on 24^th December 2016 G, and as further amended and restated pursuant to the Amendment and Restatement Deed made and entered into on 23/10/1440 in the Hejerian calendar, corresponding to the 26th day of June, 2019 in the Gregorian calendar (the "Amendment and Restatement Deed"), by and between:

(1)

SAUDI ARABIAN MINING COMPANY (MA'ADEN), a company organised and existing under the laws and regulations of the Kingdom of Saudi Arabia with commercial registration No.1010164391, having its head office and address at PO Box 68861, Riyadh 11537, Kingdom of Saudi Arabia (together with its legal successors and permitted assigns, hereinafter referred to as "Ma'aden"); and

(2)	ALCOA CORPORATION, company organised and existing under the laws of the State of Delaware, USA, whose principal place of business is at 201 Isabella Street, Pittsburgh, PA 15212, USA (herein called "Alcoa"),

(hereinafter jointly referred to as the "Parties" or individually as a "Party").

RECITALS:

(A)

WHEREAS the Parties entered into a joint venture for the development, construction, ownership and operation of an integrated mine, refinery and smelter in the Kingdom of Saudi Arabia (the "Joint Venture"), initially to be developed for (i) the extraction of approximately 4,000,000 tpa of bauxite from the Al Ba'itha bauxite deposit in the Kingdom and (ii) the production of approximately 1,800,000 tpa of alumina and approximately 740,000 tpa of aluminium ((i) and (ii) hereinafter referred to as the "Project"), as well as potential future expansions of the Project;

(B)	WHEREAS Ma'aden and Alcoa entered into a Memorandum of Understanding dated 15 July 2009 (the "MOU") for the implementation of the Project.

(C)	WHEREAS the Parties fully accept the obligations set out in the Gas Allocation Letters and Gas Supply Agreement, without condition or qualification;

(D)

WHEREAS the Parties established limited liability companies in, and under the laws of, the Kingdom, Ma'aden Bauxite and Alumina Company, with commercial registration number 2055012955 and having its registered address at PO Box 11342, Al-Jubail Industrial City 31961, Ras Al-Khair Industrial City, for the Mine and Refinery established on 18/2/1432 H (corresponding to 22 January 2011 G) ("MBAC") and Ma'aden Aluminium Company, with commercial registration number 2055012511 and having its registered address at PO Box 11342, Al-Jubail Industrial City 31961, Ras Al-Khair Industrial City, for the Smelter established on 2/11/1431 H (corresponding to 10 October 2010 G) ("MAC") (each of MBAC and MAC referred to as a "Company" and collectively as the "Companies") to implement the Joint Venture and to undertake the Project;

(E)	WHEREAS the Parties wish to operate the Companies to undertake the Project as an integrated joint venture for the purposes and on the terms set out in this Agreement; and

(F)	WHEREAS the Parties have agreed that they will offtake the Aluminium in accordance with the principles set out in this Agreement and the terms of the Offtake Agreements.

NOW, THEREFORE, in consideration of the covenants contained herein, the Parties hereto agree as follows:

Execution Version

1	Definitions and Interpretation

1.1Definitions

Whenever used herein and written in initial capital letters, the following terms shall have the meanings respectively defined:

"Act of Insolvency" means, in respect of any person, the occurrence of one or more of the following events (or any event analogous to the following events in any jurisdiction):

(a)

such person is unable, or admits inability, to pay its debts as they fall due in the ordinary course;

(b)

a moratorium is declared in respect of any indebtedness of such person; or

(c)

any corporate action, legal proceedings or other procedure or step is taken in relation to:

(i)

the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, liquidation, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of such person other than a solvent liquidation or reorganisation of such person;

(ii)

a composition, compromise, assignment or arrangement with any creditor of such person; or

(iii)

the appointment of a liquidator (other than in respect of a solvent liquidation of such person), receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of such person or any of its assets,

and such action, legal proceedings or other procedure or step is acquiesced to by such person or shall result in the entry of an order for relief or shall remain undismissed for sixty (60) days;

"Additional Term" shall bear the meaning set out in Clause 2.1(b);

"Adherence Agreement" shall bear the meaning set out in Clause 4.8;

"Affiliate" means, in relation to any person, any entity which Controls, or is directly or indirectly Controlled by or under common Control with, such person, provided that (i) no Company shall be deemed to be an Affiliate of any Party, and (ii) no person shall be deemed to be an Affiliate of another person solely because both persons are under common Control of the Government of the Kingdom;

"Agent" means any person engaged to obtain business or regulatory advantage, develop customer relationships, or interface with Governmental Authorities and/or Government Officials;

"Agreed Form" means a form of document which has been agreed by or on behalf of the parties thereto and initialled by or on behalf of the parties thereto for the purposes of identification;

"Alcoa" has the meaning set out in the parties clause;

"Alcoa Nominated Individual" means such contact person as Alcoa may notify to Ma'aden on or before the date of the Amendment and Restatement Deed and from time to time;

"Alumina" means alumina produced by the Refinery as described in Clause 3.6(b)(ii);

"Aluminium" means aluminium produced by the Smelter (and does not include the products of the Rolling Mill) as described in Clause 3.6(b)(iii);

Execution Version

"Amendment Effective Date" means the Alcoa Exit Date, as defined and determined in accordance with the terms of the GARA;

"Ancillary Agreements" means the agreements set out in Part 1 of Schedule 9 and any other agreements that the Parties may agree to identify as Ancillary Agreements from time to time;

"Annual Programme and Budget" shall bear the meaning set out in Clause 12.8(a);

"Applicable Laws" means all legally binding and applicable laws, decrees, directives, orders, regulations or rules of any Governmental Authority, including (for the avoidance of doubt) laws relating to the prohibition of the corruption of public officials which are applicable to the relevant Party, Shareholder, Affiliate or Company (as the case may be) such as the U.S. Foreign Corrupt Practices Act;

"Approved Accounting Firm" means an internationally recognised accounting firm as mutually agreed between the Parties or, failing agreement within five (5) Business Days of being required to agree such firm, any firm from among the largest four international accounting firms at the relevant time;

"Articles of Association" means the articles of association of a particular Company in effect from time to time;

"Auditors" means an Approved Accounting Firm providing audit services that has been appointed in accordance with this Agreement to audit the financial statements of a particular Company and otherwise to perform the functions of an auditor as set out herein;

"Base Case Model" means the base case financial model for each of the Phases developed and approved by the Parties or the Board of Managers of that Company by the milestone dates therefor set out in Schedule 15, as the same may be amended, modified, implemented or replaced from time to time in accordance with this Agreement;

"Bauxite" means bauxite extracted from the Mine as described in Clause 3.6;

"Board of Managers" or "Board" means the board of managers from time to time of a particular Company appointed in accordance with this Agreement and the Articles of Association;

"Break-Off Project" shall bear the meaning set out in Clause 5.10(a);

"Break-Off Project Company" shall bear the meaning set out in Clause 5.10(a);

"Break-Off Project Notice" shall bear the meaning set out in Clause 5.10(a);

"Break-Off Right" shall bear the meaning set out in Clause 5.10(a);

"Budget" means the Project Budget, an Annual Programme and Budget or a Special Programme and Budget and "approved Budget" means a Budget of a particular Company that is approved by the Parties and/or the Board of Managers of that Company (as applicable) in accordance with this Agreement;

"Business Day" means any day on which banks in the Kingdom and New York, U.S.A. are generally open for business and on which instructions to transfer same-day funds can be executed;

"Call Date" shall bear the meaning set out in Clause 14.3(a)(i);

"Cash Call" means all calls for (a) Equity Subscriptions and (b) if determined by the Parties in accordance with this Agreement, advances under Shareholder Loans, made by the relevant Board of Managers to the Parties in their respective Shareholder Percentages in accordance with Clause 4;

Execution Version

"Cast House" means the casting facilities owned and operated by MAC, in accordance with the Cast House Users' Agreement.

"Cast House Users' Agreement" means the agreement dated 3 May 2011 relating to the operation of the Cast House, as amended and/or restated from time to time.

"Chairman" means the chairman of the relevant Board of Managers;

"Closing Date" shall bear the meaning set out in Clause 14.3(a)(iv);

"Commercial Production Date" means 1^st October 2016;

"Commercial Register" means the commercial register at the Ministry;

"Commercial Registration" means registration of a particular Company on the Commercial Register;

"Commission Rate" means a commission rate which is calculated as being equivalent to:

(1)

the offered rate per annum for one month deposits in US Dollars which appears on the appropriate page of the Reuters screen or such other page as may replace that page for the purpose of displaying offered rates of lending banks for London interbank deposits at or about 11:00 a.m. (London time) on the first London Banking Day of each month, or, if more than one such rate appears on such page on such day, the arithmetic mean of such rates (rounded upward to the nearest five decimal places); and

(2)

if no such rate appears on the Reuters screen page referred to in paragraph (1) above (or any such replacement page), the arithmetic mean (rounded upwards to the nearest five decimal places) of the offered rates per annum quoted by Barclays Bank, London Branch, and HSBC Bank, London Branch (or their successors in interest), at which deposits in US Dollars for one month are being offered by such banks (or their successors in interest) to prime banks in the London interbank market at or about 11:00 a.m. (London time) on the first London Banking Day of each month; or

(3)

if none or only one of the banks referred to in paragraph (2) above are offering rates for deposits on the terms referred to in that paragraph, the rate per annum quoted by such bank as the Party who does not owe such commission in consultation with the Party that owes such commission may select from time to time at which deposits in US Dollars for one month are being offered by such bank to prime banks in the London interbank market at or about 11.00 a.m. (London time) on the first London Banking Day of each month;

"Companies" and "Company" shall each bear the meaning set out in Recital D;

"Company Law" means the Saudi Arabian Regulations for Companies, Royal Decree No. M/6 dated 22/3/1385H, as amended from time to time;

"Company Policies" shall bear the meaning set out in Clause 8.9;

"Complex" means the manufacturing facility to be constructed by the Companies for the production of the Products, at Ras Al-Khair in the Kingdom, including the Refinery and the Smelter together with certain related facilities to be owned by each relevant Company, as further described and defined in Schedule 7;

"Confidentiality & Non-Disclosure Agreement" means the confidentiality and non-disclosure agreement dated 26/4/1430 H, corresponding to 22/4/2009 G, between Ma'aden and Alcoa;

"Construction Agreement" means (i) any engineering, procurement and construction contract entered into by a particular Company in respect of any material component of the Project or any

Execution Version

relevant Expansion, (ii) any engineering, procurement and construction management (EPCM) contract entered into by a particular Company in respect of any material component of the Project or any relevant Expansion or (iii) any contract, agreement or arrangement substantially similar to the foregoing;

"Control" shall mean in relation to any non‑natural person (the "First Person"), the right of another person or persons acting together, whether in law or in fact (including by way of contract), to secure by means of the holding of shares bearing fifty percent (50%) or more of the voting rights attaching to all the shares in the First Person, or by having the power to control the composition of the board of managers/directors or other governing body of the First Person, that all or a substantial proportion of the affairs of the First Person are conducted in accordance with the wishes of that person or persons acting together, and the expressions "Controls", "Controlled" "Controlling" shall be construed accordingly;

"Cure Period" shall bear the meaning set out in Clause 14.4(e)(ii);

"Deadlock" shall bear the meaning set out in Clause 9.1(a);

"Deadlock Committee" shall bear the meaning set out in Clause 9.2(b)(i);

"Deadlock Referral Notice" shall bear the meaning set out in Clause 9.2(a);

"Deadlock Resolution Procedure" shall bear the meaning set out in Clause 9.2(b);

"Default Amount" shall bear the meaning set out in Clause 14.1(a);

"Default Commission" shall bear the meaning set out in Clause 4.5;

"Default Notice" shall bear the meaning set out in Clause 14.4(a);

"Defaulting Party" shall bear the meaning set out in Clause 14.1;

"Distribution" means: (i) any Share Distribution; (ii) any payment by a particular Company to any of its Shareholders or any of that Shareholder's Affiliates in respect of any Shareholder Loan; or (iii) any payment by a particular Company of any other amount (including by way of loan) to any of its Shareholders or any of that Shareholder's Affiliates (other than pursuant to the terms of any Project Agreement);

"DZIT" means the Department of Zakat and Income Tax of the Kingdom;

"EBIT" means earnings before interest and taxes;

"Effective Date" is 3/1/1431H, corresponding to the 20^th day of December 2009 G;

"Encumbrance" means any interest or equity of any person (including any right to acquire, option or right of pre-emption) and any mortgage, charge, pledge, lien (other than liens arising by operation of law and securing indebtedness arising in the ordinary course of business not more than seven (7) days overdue), assignment, hypothecation or other priority interest, deferred purchase, title retention, rental, hire purchase, conditional sale, trust, leasing, sale and repurchase and sale and leaseback arrangements, rights of set off and any other agreement or arrangement whatsoever having the same commercial or economic effect as security (including any hold back or "flawed asset" arrangement) over or in any property, asset or right of whatsoever nature and including any agreement for any of the foregoing;

Execution Version

Saudi Riyals (SR10,000) per Share, or such other basis as may be approved by the relevant Board in accordance with this Agreement and the Applicable Laws of the Kingdom;

"Event of Default" shall bear the meaning set out in Clause 14.1;

"Excess Alumina" means, in any period, any Alumina produced at the Refinery that is not required for the production of Aluminium at the Smelter and/or to maintain normal Alumina inventory levels during such period;

"Expansion" shall bear the meaning set out in Clause 5.9(a);

"Fair Market Value" shall bear the meaning set out in Clause 18.1;

"Financial Year" means the financial year of a particular Company from January 1 to December 31 each year;

"Financing Agreements" means the credit agreements and associated documents entered into or to be entered into by a particular Company pursuant to which credit facilities will be made available to such Company in connection with the Project;

"Financing Plan" means the financing plan to be developed by the Parties for each Phase and which is intended to be approved by the Parties by the milestone date therefor set out in Schedule 15;

"Foreign Investment Licence" means the foreign investment licence issued by SAGIA authorizing the formation of a particular Company, as the same may be amended from time to time;

"Funding Deadline" shall bear the meaning set out in Clause 4.4(a)(ii);

"Funding Default" shall bear the meaning set out in Clause 14.1(a);

"GARA" means the Global Amendment and Restatement Agreement entered into by, amongst others, Alcoa, Ma'aden and MRC on or about the date of the Amendment and Restatement Deed.

"Gas Allocation Letter 1" means the gas allocation letter dated 21 October 2009, reference 3157/P/F, as may be amended and/or extended from time to time (including the extension letter dated 2 February 2011), in respect of the Project and Rolling Mill from Saudi Aramco (based on the authorisation of the Ministry of Petroleum) to Ma'aden and SWCC;

"Gas Allocation Letter 2" means the gas allocation letter dated 3 June 2015 as may be amended and/or extended from time to time (including the extension letter dated 6 November 2017), in respect of the allocation of dry gas to the Creep Project, Alumina Refinery Debottlenecking Project and Aluminum Smelter Expansion Project (each, as defined therein) from Saudi Aramco (based on the authorisation of the Ministry of Petroleum) to MAC, MBAC and MRC;

"Gas Allocation Letters" means both the Gas Allocation Letter 1 and Gas Allocation Letter 2;

"Gas Supply Agreement" means the Sales Gas Supply Agreement effective as of 22 Rajab 1434 H corresponding to 1 June 2013 in the Gregorian calendar between Saudi Aramco, SWCC and MAC, as may be amended and/or restated from time to time (including the amendment dated 21 December 2017).

"Gate 3 Review" means the formal review of the final feasibility report produced at the completion of the stage 2 engineering for each component of the Project in accordance with the agreed stage gate process. This report shall describe the basic engineering of the facilities, class 1 cost estimate within a range of +/- ten percent (10%) (or such other level as agreed by the Parties), HAZOP study, technical and financial risk assessment, constructability and operability review, operational readiness review,

Execution Version

level 1 master schedule, value improving processes, final project execution plan, EPC/EPCM contract documentation and any other items as agreed by the Parties;

"GCC Countries" means Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates and any other country which may be designated as a Gulf Cooperative Country from time to time;

"Governmental Authority" means any court or governmental authority, department, commission, board, agency or other instrumentality of any country or jurisdiction or any part thereof having jurisdiction over this Agreement, a Company, a Shareholder, a Party or any asset or transaction contemplated by this Agreement;

"Government Official" means an employee, officer or representative of, or any person otherwise acting in an official capacity for or on behalf of a Governmental Authority;

"IFRS" shall bear the meaning set out in Clause 12.1;

"Initial Term" shall bear the meaning set out in Clause 2.1(a);

"Intellectual Property" means rights in and in relation to confidential information, trade marks, service marks, trade and business names, logos and get up (including any and all goodwill associated with or attached to any of the same), domain names, patents, inventions (whether or not patentable), registered designs, design rights, copyrights (including rights in software) and moral rights, database rights, semi-conductor topography rights, utility models and all rights or forms of protection having an equivalent or similar nature or effect anywhere in the world, whether enforceable, registered, unregistered or registrable (including, where applicable, all applications for registration) and the right to sue for damages for past and current infringement (including passing off and unfair competition) in respect of any of the same;

"IP Information" shall bear the meaning set out in Clause 26.4(d);

"Joint Venture" shall bear the meaning set out in Recital A;

"Kingdom" means the Kingdom of Saudi Arabia;

"KSA Controlled Transferee" shall bear the meaning set out in Clause 17.3(a);

"LME" means the London Metals Exchange;

"London Banking Day" means any day on which banks in London, England are generally open for business;

"Ma'aden" has the meaning set out in the parties clause;

"Ma'aden Nominated Individual" means such contact person as Ma'aden may notify to Alcoa on or before the date of the Amendment and Restatement Deed and from time to time;

"MAC" shall bear the meaning set out in Recital D;

"Manager" means a member from time to time of the relevant Board of Managers;

"Material Adverse Effect" means any effect or result which is, or is reasonably likely to be, materially adverse to the business, operations, assets, liabilities, properties, financial condition, effective management, results or prospects of a particular Company or a subsidiary Controlled by such Company (if any);

"Material Breach" shall bear the meaning set out in Clause 14.1(d);

Execution Version

"MBAC" shall bear the meaning set out in Recital D;

"Mine" means the Al Ba'itha mine in the Kingdom for extracting approximately 4,000,000 tpa of bauxite as more fully described in Schedule 8, as modified pursuant to any Expansion that may occur in accordance with this Agreement;

"Mining Licenses" means the mining and quarrying licenses in respect of the Mine referred to in Schedule 8;

"Ministry" means the Ministry of Commerce and Industry of the Kingdom;

"Ministry of Petroleum" means the Ministry of Petroleum and Mineral Resources of the Kingdom;

"MOU" shall bear the meaning set out in Recital B;

"MRC" means Ma'aden Rolling Company, a limited liability company established on 2/11/1431 H (corresponding to 10 October 2010 G) in accordance with the regulations of the Kingdom of Saudi Arabia and with commercial register number 2055012518, and which owns and operates the Rolling Mill at Ras Al-Khair in the Kingdom;

"Non-Defaulting Party" means the Party who is not the Defaulting Party;

"Notice of the Right to Match the Offer" shall bear the meaning set out in Clause 17.6;

"Offer" shall bear the meaning set out in Clause 17.4;

"Offer Price" shall bear the meaning set out in Clause 17.4(iv);

"Offtake Agreements" means the offtake agreements in the Agreed Form in respect of Aluminium and the Excess Alumina to be entered into by the relevant Companies with each of the Parties;

"Other Project Agreements" means the Project Agreements set out in Part 2 of Schedule 9;

"Paid In Capital" means the aggregate amount of money paid by each Party directly or through any of their respective Affiliates to a Company in connection with the subscription for Shares by such Party or Affiliates in that Company from time to time in accordance with this Agreement;

"Phase" means Phase 1 or Phase 2, as the case may be and "Phases" means both Phase 1 and Phase 2;

"Phase 1" means (following the Gate 3 Review) the design, construction and operation of the Smelter;

"Phase 2" means (following the Gate 3 Review) the design, construction and operation of the Mine and the Refinery;

"PIF" means The Public Investment Fund;

"Pre-Incorporation Materials" means the relevant documents and materials developed by the Parties jointly or otherwise provided by a Party for the purposes of the Project prior to the incorporation of the Companies;

"President" means the president of a particular Company as appointed in accordance with Clause 8.3(c);

"Product" or "Products" means Alumina and Aluminium products produced by MBAC and MAC at the Complex as described in Clause 3.6;

"Project" shall bear the meaning set out in Recital A;

Execution Version

"Project Agreements" means the agreements entered into or to be entered into by a particular Company and/or the Parties and/or either of the Parties (on behalf of that Company) in connection with the Project, with the inclusion of the Ancillary Agreements, the Other Project Agreements, the Financing Agreements and any other agreements which are identified as Project Agreements in accordance with the terms of this Agreement;

"Project Budget" means the overall budget of the Project Costs for the Project to be developed and approved by the Parties by the milestone date therefor set out in Schedule 15, as may be amended, modified, implemented or replaced from time to time pursuant to a resolution of the Parties pursuant to Clause 7.2;

"Project Costs" means the total costs of the Project, including direct project costs, contingency, owner's development costs, penalties for delay to implement the Project by required deadlines, interest due on construction and other financing costs and net working capital funding requirements;

"Proposed Resolution" shall bear the meaning set out in Clause 9.1(a);

"Ras Al-Khair Site" means that portion of the industrial area at Ras Al-Khair (formerly known as Raz Az Zawr) as described in Schedule 7;

"Refinery" means the refinery to be constructed in Ras Al-Khair in the Kingdom initially to produce approximately 1,800,000 tpa of alumina, as more fully described in Schedule 7, as modified pursuant any Expansion that may take place in accordance with this Agreement;

"Remaining Party(s)" shall bear the meaning set out in Clause 17.5(a);

"Required Shareholder Funding" shall bear the meaning set out in Clause 4.2(b);

"Right to Match the Offer Period" shall bear the meaning set out in Clause 17.7(a);

"Rolling Mill" means the facility and assets associated with the production of flat rolled products (can sheet and auto sheet) owned and operated by MRC, located at Ras Al Khair (including used beverage can reclamation unit, hot and cold rolling facilities, slitting and coating lines) and all support assets and processes owned by MRC and directly associated with such facility and assets;

"SAGIA" means the Saudi Arabian General Investment Authority;

"Saudi Riyal" or "SR" means the lawful currency of the Kingdom;

"Security Interest" shall bear the meaning set out in Clause 4.7;

"Selling Party" shall bear the meaning set out in Clause 17.4;

"Senior Debt" means the financing provided by the Senior Lenders for the Project;

"Senior Lenders" means one or more commercial banks, Islamic finance participants, Saudi Arabian public financing institutions and other financial institutions and/or capital markets investors (which for the avoidance of doubt, may include one or more of the Parties and any of their Affiliates) providing debt finance in respect of the Project other than in respect of Shareholder Loans;

"Senior Lenders Commitment Letters" means the letters issued by prospective Senior Lenders evidencing a commitment to provide Senior Debt to the relevant Companies undertaking the relevant Phase of the Project;

"Senior Officers" means the President and other senior officers of a particular Company as set out in Clause 8.3(a);

Execution Version

"Share" means any share of SR10,000 each in the capital of any Company, and "Shareholding" shall be construed accordingly;

"Share Capital" means the capital which constitutes the Paid In Capital from time to time of a Company as set out in its Articles of Association;

"Share Distribution" means any dividend (in cash, property or otherwise) or any other distribution or payment made by a particular Company on or in respect of its Shares, including any distribution of the distributable profits of such Company, or any distribution of the assets of such Company upon any liquidation or winding up of such Company;

"Shared Services Agreement" shall have the meaning set out in Clause 5.10(b);

"Shareholder" means any person directly holding Shares from time to time in accordance with the terms of this Agreement;

"Shareholder Loan" means a subordinated interest free loan by a Shareholder or its Affiliate to a Company pursuant to a Shareholder Loan Agreement;

"Shareholder Loan Agreements" shall bear the meaning set out in Clause 4.3;

"Shareholder Percentage" means, in respect of a Party, the amount (expressed as a percentage) equal to (a) the total Paid In Capital by such Party or its Affiliate in a Company at such time, divided by (b) the total Paid In Capital by all the Shareholders in such Company at such time, and "Shareholder Percentages" collectively refers to the Shareholder Percentage of each of the Parties, which, at the time of formation of a Company, were as set out in Clause 4.1;

"Smelter" means the smelter constructed in Ras Al-Khair in the Kingdom initially to produce approximately 740,000 tpa of aluminium, as more fully described in Schedule 7, as modified pursuant any Expansion that may take place in accordance with this Agreement;

"Smelter Onsite Services Agreement" or "Smelter OSA" means the agreement for the provision of onsite services to the Company by Rio Tinto Alcan Inc. relating to aluminium smelting technologies, as more fully described in Part 2 of Schedule 9;

"Smelter Technology Transfer Agreement" or "Smelter TTA" means the agreement for the licensing of certain of Aluminium Pechiney's Intellectual Property in aluminium smelting technologies and provision of related services to a particular Company, as more fully described in Part 2 of Schedule 9;

"SOCPA" shall bear the meaning set out in Clause 12.1;

"Special Programme and Budget" shall bear the meaning set out in Clause 12.8(a);

"SWCC" means the Saline Water Conversion Corporation in the Kingdom;

"Transfer Date" means, in respect of any transfer of Shares, the date of signature before the competent notary public in the Kingdom of the amendment of the Articles of Association necessary to give effect to such transfer in accordance with Clause 17.9;

"Transferable Interests" means, in respect of any Party, all Shares and Shareholder Loans held by such Party and its Affiliates;

"Transfer Notice" shall bear the meaning set out in Clause 17.5;

"US Dollar" or "US$" shall mean the lawful currency of the United States of America;

Execution Version

"Value Added Project" means any capital investment project to be implemented after the date of this Agreement and which is intended to be located within the Kingdom which relates to (a) downstream add-on products which could be produced using outputs generated by the Project (for the avoidance of doubt, not including the Rolling Mill or any expansions thereto) or (b) upstream inputs used in the Project (for the avoidance of doubt, not including the Refinery or any Expansions thereto);

"Valuer" shall bear the meaning set out in Clause 18.2; and

"year", "month", "week" and "day" mean a calendar year, calendar week, calendar month and a calendar day respectively of the Gregorian calendar.

1.2	Interpretation

In this Agreement:

(a)

References to statutory provisions shall be construed as references to those provisions as respectively amended or re-enacted or as their application is modified from time to time by other provisions (whether before or after the date hereof).

(b)

References to Recitals, Clauses, Schedules and paragraphs are to Recitals and Clauses in, and to Schedules and paragraphs of Schedules to, this Agreement. The Recitals and Schedules shall be deemed to form part of this Agreement.

(c)

References to any document (including this Agreement) are references to that document as amended, consolidated, supplemented, novated or replaced from time to time.

(d)

Headings are inserted for convenience only and shall not affect construction.

(e)

References to the Parties and the Shareholders include their respective successors and permitted assigns.

(f)

References to persons shall include any individual, any form of body corporate, unincorporated association, firm, partnership, joint venture, consortium, association, organization or trust (in each case whether or not having a separate legal personality).

(g)

The word "include" and its derivatives shall be deemed to include the proviso that it is "without limitation".

(h)

The masculine gender shall include the feminine and neuter and the singular number shall include the plural, and vice versa.

1.3	Third Party Rights

Except insofar as this Agreement expressly provides that a third party may in his own right enforce a term of this Agreement, a person who is not a Party to this Agreement has no right to rely upon or enforce any term of this Agreement.

2	Term of the Agreement; Parent Company Guarantee

2.1	Term of the Agreement

(a)

The term of this Agreement and the Joint Venture shall be from 20 December 2009 G until 22 January 2041 G, being the date falling thirty (30) years after the date that the last of the Companies (MBAC) was registered in the Commercial Register (the "Initial Term").

(b)

At the expiry of the Initial Term, this Agreement shall be automatically renewed for an additional term of twenty (20) years on the same terms and conditions, unless the Parties agree

Execution Version

otherwise at least two (2) years prior to the expiry of the Initial Term or unless terminated earlier in accordance with this Agreement ("Additional Term").

(c)

The Parties may agree to extend the term of this Agreement and the Joint Venture beyond the end of the Additional Term, by successive ten (10) year periods, by mutual agreement of the Parties at least five (5) years prior to expiry of the then current term.

(d)

If the Parties are unable to agree on an extension of the term of this Agreement and the Joint Venture pursuant to paragraph (c) above, prior to a liquidation of the Companies pursuant to the provisions of Clause 16.3, the Parties will seek to negotiate a purchase by one Party of the other Party's Transferable Interests at a Fair Market Value pursuant to the procedures, and consistent with the valuation principles, set forth in Clause 18.

2.2	Parent Company Guarantee

Alcoa shall issue or shall procure the issuance by its ultimate parent company if applicable of a parent company guarantee in respect of its Affiliates that are Shareholders in a Company in the form set out in Schedule 1. Such parent company guarantee shall be issued to Ma'aden prior to or simultaneously with the first issuance of Shares to any Alcoa Affiliate.

3	Establishment of a particular Company

3.1	[INTENTIONALLY OMITTED]

3.2	[INTENTIONALLY OMITTED]

3.3	Project Milestones

(a)

From the Effective Date, the Parties shall use their best efforts to progress the development of the Project including achieving the milestones set out in Schedule 15 by the respective milestone dates. As the Project is progressed as aforesaid, the Parties shall, and shall procure that each Company shall, further develop and approve:

(i)

the Project Budget;

(ii)

the Base Case Model for each Phase;

(iii)

the Financing Plan for each Phase including a commitment by each of the Parties to provide the Required Shareholder Funding specified in the Financing Plan together with the Senior Lenders Commitment Letters in respect of such Phase; and

(iv)

the material Project Agreements as specified in Schedule 15.

(b)

[INTENTIONALLY OMITTED]

(c)

[INTENTIONALLY OMITTED]

(d)

[INTENTIONALLY OMITTED]

(e)

[INTENTIONALLY OMITTED]

(f)

[INTENTIONALLY OMITTED]

(g)

[INTENTIONALLY OMITTED]

Execution Version

3.4	[INTENTIONALLY OMITTED].

3.5	Details of each Company

The Parties acknowledge and agree that:

(a)

Each Company has been formed for a period of fifty (50) years starting from the date of its registration in the Commercial Register, as may be extended pursuant to the terms of the Articles of Association and this Agreement;

(b)

Notwithstanding paragraph (a) above, the term of the Joint Venture shall be as specified in Clause 2.1;

(c)

The names of the Companies may be amended to such other name as may be approved by the Parties from time to time in accordance with this Agreement and set out in, or in an amendment to the Articles of Association of such Company which have been duly filed and/or registered in the Commercial Register in accordance with Applicable Laws of the Kingdom;

(d)

The registered office of each Company shall be in Jubail in the Kingdom, or such other place in the Kingdom as may be approved by the Parties from time to time in accordance with this Agreement and set out in an amendment to the Articles of Association of such Company which has been duly filed and/or registered with the Commercial Register in accordance with Applicable Laws of the Kingdom;

(e)

Each Company shall be domiciled in the Kingdom and shall not conduct business in any jurisdiction other than the Kingdom, except as may be necessary or incidental to the Project, without the prior approval of the relevant Board of Managers given in accordance with this Agreement.

3.6

Purpose

(a)

The Parties acknowledge and agree that (i) the Companies are a profit centre separate to each of the Parties' other business(es), and (ii) subject to the terms and conditions of this Agreement, the Parties shall procure (either directly or through the relevant Shareholders appointed by them) that each Company shall conduct its affairs, and each of the Parties shall (and shall procure that the relevant Shareholders appointed by them shall) conduct its dealings with such Company, in such a way as to promote the Company's business and the profitability of the Project.

(b)

The Parties acknowledge and agree that the purpose of each Company is and shall be to engage in the following commercial activities, subject to the terms and conditions of this Agreement and in accordance with the contractual arrangements by which it is bound:

(i)

Collectively, the development, construction, ownership and operation of the Mine, the Refinery and the Smelter in the Kingdom;

(ii)

In the case of MBAC, initially the extraction of approximately 4,000,000 tpa of Bauxite from the Al Ba'itha bauxite deposit in the Kingdom and the production of approximately 1,800,000 tpa of Alumina;

(iii)

In the case of MAC, initially the production of approximately 740,000 tpa of Aluminium (the "Products"); and

(iv)

Implementation of Expansions of the Project, and production of the resulting increased quantities of the Products.

Execution Version

(c)

The Parties acknowledge that priority on the allocation and marketing of Excess Alumina will be given to Expansions of the Smelter, followed by domestic demand and then to export to international markets.

(d)

In accordance with the Gas Allocation Letters and as referred to in Clause 5.5, the Parties acknowledge and agree that the Companies are required to support the development of downstream businesses in the Kingdom.

4	Share Capital and Funding by Shareholders

4.1	Share Capital

(a)

The Parties acknowledge that, on incorporation of each Company, the Shareholder Percentages of that Company were as set out in the tables below:

(i)

In the case of MBAC:


Shareholder	Shareholder Percentage
Ma'aden	74.9%
AWA Saudi Limited	25.1%
TOTAL:	100%

(ii)

In the case of MAC:


Shareholder	Shareholder Percentage
Ma'aden	74.9%
Alcoa Saudi Smelting Inversiones S.L.	25.1%
TOTAL:	100%

(b)

Each Share shall entitle the holder thereof to one (1) vote on each matter coming before the Shareholders.

(c)

Notwithstanding anything to the contrary contained in the Articles of Association of each Company, each Share shall entitle the holder thereof to receive Share Distributions in accordance with Clause 11 of this Agreement.

4.2	Required Shareholder Funding

(a)

[INTENTIONALLY OMITTED].

(b)

The Board of Managers may from time to time issue a Cash Call to the Shareholders in accordance with their Shareholder Percentages for Equity Subscriptions and, Shareholder Loans (in the proportions determined by the Parties), in accordance with approved Budgets including the Project Budget. The Equity Subscriptions and Shareholder Loans shall each separately be proportionate to the Shareholder Percentages of the respective Shareholders. The Parties shall procure that the relevant Shareholders nominated by them shall pay or

Execution Version

advance such funds to such Company and, in respect of any Equity Subscription, the Paid In Capital of each of the Shareholders in the Company shall be adjusted accordingly. For the purposes of this Agreement, "Required Shareholder Funding" shall comprise all funding that the Shareholders (or any of them) have advanced or are required to advance (or procure the advancing of) to each Company in accordance with the approved Budgets or as otherwise required in accordance with this Agreement, including by way of Equity Subscriptions and Shareholder Loans (but shall exclude any Senior Debt provided by a Shareholder or its Affiliates).

4.3	Shareholder Loans

In the event that the Parties determine that a Cash Call issued by a particular Board of Managers should comprise in whole or part Shareholder Loans, the Parties shall procure that the Shareholders shall each, and shall also procure that such Company shall, within fifteen (15) days of the request by the Board of Managers to do so, execute one or more subordinated loan agreements between the relevant Shareholders and such Company (the "Shareholder Loan Agreements") requiring the relevant Shareholders to advance amounts to such Company pursuant to Cash Calls in accordance with Clause 4.2(b).

4.4	Form and Manner of Funding by Shareholders

(a)

Unless otherwise approved by the Board of Managers of a relevant Company in accordance with this Agreement, all Cash Calls by each Board of Managers shall:

(i)

be in an amount that corresponds to an approved Budget (which shall be referenced in the Cash Call), be given at such times and in respect of such amounts as correspond to the cash requirements of the particular Company and, to the extent possible, correspond with the timing contemplated by such approved Budget;

(ii)

be made by notice in writing to all Shareholders not less than ten (10) Business Days prior to the date (the "Funding Deadline"), which shall be a Business Day, by which such Required Shareholder Funding subject to the Cash Call is required to be made;

(iii)

specify the amount required to be advanced by the affected Shareholder(s) in accordance with this Agreement;

(iv)

specify whether the amount is required to be advanced by way of Equity Subscription and/or Shareholder Loan;

(v)

specify the Funding Deadline; and

(vi)

set out details of the bank account of the Company into which the Required Shareholder Funding subject to the Cash Call should be deposited.

(b)

All Required Shareholder Funding pursuant to this Clause 4 shall be made in the form of cash and in respect of equity shall be made in Saudi Riyals and in respect of Shareholder Loans shall be made in either Saudi Riyals or US Dollars, as agreed by the Parties.

(c)

All Shareholder funding made under this Clause 4 shall be directly deposited into a separate bank account of the relevant Company established for such purpose which shall be specified in the relevant Cash Call and (together with any interest or investment income earned thereon) shall be the absolute property of such Company for its own account and used by such Company in accordance with this Agreement.

(d)

Subject to Applicable Laws in the Kingdom and Clause 7.2(a)(ii), when considered appropriate by the relevant Board of Managers, including for purposes of avoiding potential

Execution Version

application of Article 181 of the Company Law, the Parties shall procure that the Shareholders shall promptly resolve and otherwise procure and take all steps and execute and deliver all instruments necessary or desirable, including without limitation amending the Articles of Association of the relevant Company (without requiring separate approval under Clause 7.2(a)), to convert Shareholder Loans into Share Capital by releasing and discharging such principal amount of Shareholder Loans (then outstanding from each Shareholder to the relevant Company) in consideration for the issuance by the Company of that number of Shares so as to increase the Share Capital to an appropriate level. Any Shareholder Loans so converted shall be converted into Shares pro rata to the then Shareholder Percentages of the Shareholders and in a manner which does not vary the Shareholder Percentages of the Shareholders post conversion.

4.5	Default Commission Rate

If a Shareholder fails to pay or advance an amount in accordance with this Clause 4 by the Funding Deadline, the unpaid amount of such Required Shareholder Funding shall bear a commission (the "Default Commission") from and after the date due to the date such amount is paid at a rate per annum equal to the Commission Rate plus two percent (2%), payable upon demand by the relevant Company or the non-defaulting Shareholder or, failing such demand, monthly in arrears. Any calculation of Default Commission under this Clause 4.5 shall be made on the basis of the actual number of days elapsed and a three hundred and sixty (360) day year.

4.6	Limitations and Shareholder Funding

No Party, nor any of its Affiliates that are Shareholders in a particular Company, shall be under any obligation to provide funding, directly or indirectly, to a Company except pursuant to this Clause 4, Clause 10 or Clause 12.9.

4.7

Pledge

Except as required pursuant to, and subject to, the terms of the Financing Agreements, no Shareholder may pledge, mortgage, charge or grant any other security interest ("Security Interest") over all or any part of its Shares or Shareholder Loans unless such Shareholder obtains the prior written consent of the other Shareholder to such Security Interest.

4.8	Adherence Agreement

A person who is not a Shareholder shall not acquire, or be permitted to acquire, any Shares or Shareholder Loans in a Company: (1) other than in accordance with and pursuant to the provisions of this Agreement; and (2) unless such person shall have first executed an Adherence Agreement to this Agreement in the form attached hereto as Schedule 5 ("Adherence Agreement") on or prior to the completion of such acquisition of any Shares or Shareholder Loans. Without limiting the foregoing, Alcoa intends to hold its Shares in each of the Companies through an Affiliate and shall procure that each such Affiliate shall enter into an Adherence Agreement on or prior to the issuance of any Shares to such Affiliate. The Parties acknowledge that on receipt of an Adherence Agreement in accordance with the terms of this Agreement, a New Shareholder (as defined in the form of the Adherence Agreement) shall be deemed to have been added as a party to this Agreement and all references to Shareholder or Shareholders, shall include the New Shareholder.

Execution Version

4.9	[INTENTIONALLY OMITTED]

5	Responsibilities of the Parties

5.1	Roles of the Parties

The organization, development, and operation of each Company and the Project will capitalize on the strengths and experience brought by each of the Parties, who will provide such assistance pursuant to the terms of this Agreement and the Ancillary Agreements.

5.2	Role of Ma'aden

Alcoa acknowledges and agrees that Ma'aden possesses extensive experience and know‑how in respect of mining, infrastructure, local regulatory compliance, local procurement of goods and services, land related matters and project development in the Kingdom. Accordingly, the Parties shall ensure that each Company shall consult with Ma'aden, and Ma'aden (or as the case may be, its Affiliates) shall provide assistance and support to such Company and, as applicable, shall perform other specified services and obligations, with respect to such matters in the manner provided in, and upon and subject to the terms and conditions of, the relevant agreements entered into by Ma'aden (or as the case may be, its Affiliates) with the Companies from time to time, subject to Clause 8.5(b) of this Agreement.

5.3	Role of Alcoa

5.4	Aluminium Offtake

(a)

The Parties (or one of their respective Affiliates), MAC and MRC have entered into the Cast House Users' Agreement under which MAC will co-ordinate the provision of cast house services, including to MRC.

(b)

Subject to paragraph (c) below, the Parties or such of their respective Affiliates have entered into an offtake agreement with MAC for the purchase of their pro rata share (based on their Shareholder Percentage in relation to MAC) of Aluminium.

(c)

The Parties shall procure that MAC shall allocate such quantities of Aluminium to MRC as are required for the operation of the Rolling Mill pursuant to the MRC APA for so long as such agreement remains in force, and such allocated quantities shall be taken to reduce the amount of Aluminium provided by MAC and available to Parties pursuant to paragraph (b) above.

(d)

[INTENTIONALLY OMITTED].

(e)

The Parties shall use their reasonable efforts to (i) assist MAC in obtaining the required LME registration for Aluminium to be produced by it, and (ii) ensure that such registration is obtained in a timely manner. Each Party shall bear its own costs in relation to assisting MAC in obtaining the LME registration pursuant to this Clause 5.4.

Execution Version

5.5	Support for Downstream Industry and Priority to the Domestic Market

(a)

In accordance with the Gas Allocation Letters, the Parties (or their Affiliates) shall, in priority to export markets, enter into long-term supply agreements with companies in the Kingdom that wish to purchase raw materials from among the Products produced by each Company and, where applicable, sold to the Parties (or their Affiliates) under each Parties' Offtake Agreement with the relevant Company (as specified in Schedule 9) (if applicable).

(b)

Such supply agreements shall be long-term supply agreements based on competitive terms and conditions, including market based pricing, and, where applicable, on the terms outlined in the Parties' respective Offtake Agreements with the relevant Company. Furthermore, the Parties shall work diligently to promote and support the establishment of downstream industries in the Kingdom, based on the Products produced by MAC.

5.6	[INTENTIONALLY OMITTED]

5.7	[INTENTIONALLY OMITTED]

5.8	Alumina Supply Arrangements and Excess Alumina

(a)

During the period between the date on which the Smelter becomes operational and the date on which the Refinery begins to supply the Smelter's requirements for Alumina, upon request of MAC, Alcoa (or its Affiliates) will supply Alumina to MAC in such quantities and at such times as requested, and at a market price formula agreed by the Parties. If at any time thereafter MBAC becomes unable, including due to operational interruptions in Alumina production, to supply MAC's requirements for Alumina, Alcoa will offer its and its Affiliates' services as agent to locate other sources of Alumina in the market.

(b)

Alcoa will also offer, as agent, to market any Excess Alumina that MBAC may have available for sale from time to time at prevailing market prices and in return for a reasonable commission to be agreed.

5.9	Capacity Expansions

(a)

The Parties acknowledge that it is their intention to implement future capacity expansions across all elements of the Project in the manner described in this Agreement ("Expansion") and to consider engaging in or otherwise supporting downstream manufacturing.

(b)

Any Party may require a particular Company to undertake a feasibility study into any potential Expansion. The Parties agree that decisions to implement Expansions shall be taken, in good faith, based on the commercial, economic and strategic viability of the Expansion, following the completion of the feasibility study by such Company. Any decision to implement any Expansion shall be made in accordance with the provisions of Clause 8.5(b).

(c)

An Expansion shall be financed in accordance with a financing plan for such Expansion that has been approved by the relevant Board of Managers in accordance with this Agreement.

(d)

Each Party shall, and shall procure that the relevant Manager(s) appointed by it, act and vote reasonably and in good faith in connection with the approval of an Expansion and, if approved, in relation to the implementation and financing of the Expansion.

(e)

In the context of an Expansion carried out by a particular Company, the Parties shall endeavour to cause such Company (i) to minimise any disruption in the production levels of the Project, including the Mine and/or the Complex, during the period in which the Expansion is effected and (ii) to procure that the Expansion is effected in accordance with good industry practice.

Execution Version

(f)

Each Party shall, and shall procure that any of its Affiliates that are Shareholders shall, execute such documents as necessary in order to ensure the intent of this Clause 5.9 is achieved, including to effect such amendments as may be necessary to reflect the increase in capacity of the Mine and/or the Complex, the relevant Company's capital and its ownership, and to amend its Articles of Association and such Company's Commercial Registration accordingly. Where a decision to implement an Expansion within the relevant Company is taken by its Board of Managers in accordance with Clause 8, each Party shall, and shall procure that any of its Affiliates that are Shareholders shall, exercise their voting rights and do all such things and execute all such documents as may be required to give effect to such decision of such Board of Managers.

5.10	Break-Off Projects

(a)

If Ma'aden makes an Expansion proposal in accordance with Clause 5.9 and such Expansion proposal is not approved by the relevant Board of Managers in accordance with this Agreement at two (2) non-successive Board meetings of the relevant Company, held at least five (5) months apart, at which such Expansion proposal is presented for approval, then Ma'aden shall have the right (the "Break-Off Right") itself or through an Affiliate to proceed to develop, construct, own and operate the Expansion to which such Expansion proposal relates (the "Break-Off Project"). Ma'aden may develop, construct, own and/or operate the Break-Off Project either itself or through a special purpose project company (the "Break-Off Project Company") which it Controls. The Break-Off Right shall terminate if (i) Ma'aden has not given formal notice to the relevant Company (the "Break-Off Project Notice") of its intention to proceed with such Expansion within the period of sixty (60) days after the second of the two non-successive Board of Managers meetings where the relevant Board of Managers resolved not to proceed with such Expansion, or (ii) notice to proceed under the relevant Construction Agreements for the Break-Off Project is not given within eighteen (18) months of the date of the Break-Off Project Notice. For the avoidance of doubt, if any Break-Off Right so terminates, the proposed Expansion (or any Expansion substantially similar to such proposed Expansion) must again be submitted to the relevant Company in accordance with Clause 5.9.

(b)

If Ma'aden gives a Break-Off Project Notice pursuant to paragraph (a) above, the relevant Company shall, and the Parties shall procure that the other Shareholders shall procure that such Company shall, negotiate in good faith with Ma'aden, its Affiliates and/or the Break-Off Project Company with a view to such Company entering into a shared services agreement (a "Shared Services Agreement") with Ma'aden, its Affiliate and/or the Break- Off Project Company pursuant to which such Company shall provide certain services and/or make available certain facilities in order to support and facilitate the development, construction and operation of the Break-Off Project. In connection with any such negotiations, the Parties shall ensure that the following principles shall be applied by the parties to such negotiations:

(i)

the relevant Company and Ma'aden, its Affiliates and/or the Break-Off Project Company shall cooperate in relation to the conduct of the Project and the Break-Off Project;

(ii)

the relevant Company shall, to the extent that doing so does not disrupt the Project, seek to accommodate the needs of the Break-Off Project, including, for the avoidance of doubt, allowing the Break-Off Project to interface with and share the plant and facilities of the Project, at the cost of Ma'aden, its Affiliates and/or the Break-Off Project Company; and

(iii)

the relevant Company shall provide such reasonable supplies including intermediate Products, services, leases, licences, easements and other rights and facilities as are

Execution Version

reasonably requested by the Break-Off Project, provided that such Company shall only be obliged to provide services to the Break-Off Project:

(A)

to the extent that it has spare capacity, taking into account its current or reasonably predicted future usage of that capacity;

(B)

provided that there are no technical incompatibilities which reasonably could be expected to have an adverse effect on the Project and which cannot reasonably be overcome;

(C)

provided that no capital expenditures are required of such Company, or alternatively the Break-Off Project funds such capital expenditure;

(D)

provided that the arrangements do not adversely impact on the security and regularity of supplies of energy and raw materials to such Company; and

(E)

provided that the provision of such services would not prejudice the efficient current and planned future production of Aluminium by the Project.

For the purpose of this Clause 5.10(b)(iii), services, leases, easements and utilities shall be provided on a "full cost" basis (including capital and operating costs). If so required by the Break-Off Project, any intermediate Products, intellectual property licences or other rights and facilities shall be provided on a reasonable basis to be agreed with reference to the cost to the relevant Company of providing such, as well as to the advantage to the Break-Off Project in receiving rather than resorting to a third party provider (if available).

The Parties shall ensure that the Shared Services Agreement shall contain provisions requiring the Break-Off Project Company to comply with detailed reporting requirements, including as regards submitting to the relevant Company monthly progress reports during the pre-commercial operation phase of the Break-Off Project and quarterly operations reports post commercial operation of the Break-Off Project. All reports shall be in such form and provide such information as is customary and shall further contain such additional information as the relevant Company may reasonably request from time to time.

5.11	Value Added Projects

(a)

If a Party or any of its Affiliates wishes to develop, construct, operate or otherwise implement, or participate in, any Value Added Project, it may, but shall not be obliged to, inform the relevant Company and the other Party proposing that such Company implement, or participate in, the Value Added Project. In such event, the Party shall set out such details of the proposed Value Added Project as are reasonably necessary to enable the relevant Board to make a reasoned judgement concerning the merits of such Value Added Project. Notwithstanding the foregoing, if any such Value Added Project is likely to be a substantial supplier to, or customer of, a Company (measured either by revenues or by percentage of total purchases or sales), the relevant Party shall inform the other Party and the relevant Company, and the Parties shall consult on the effects on the relevant Company of any arrangement proposed to be entered into between the Value Added Project and such Company but, for the avoidance of doubt, informing the other Party and such Company as aforesaid should not be deemed to be an offer to participate in the Value Added Project.

(b)

If the implementation of, or the participation in, a Value Added Project proposed by a Party in accordance with paragraph (a) above is approved by the relevant Board of Managers in accordance with this Agreement, the Parties shall procure that the relevant Company proceeds to implement, or participate in (as applicable), such Value Added Project in such manner as is determined by such Board of Managers.

Execution Version

(c)

If the implementation of, or participation in, a Value Added Project proposed by a Party in accordance with paragraph (a) above is not approved by the relevant Board of Managers within ninety (90) days of such Board meeting at which the proposal was first presented to the Board of Managers for approval, then the Party whose appointed Manager(s) voted in favour of such Value Added Project at such Board of Managers meeting shall be entitled itself or through an Affiliate to implement, or participate in, the Value Added Project (on a basis substantially similar to that set out in the relevant notice) outside the relevant Company in partnership, joint venture or in such other relationship with any other person as such Party may determine.

(d)

Notwithstanding the foregoing provisions of this Clause 5.11, each Party shall use its reasonable efforts to procure that the relevant Company shall not implement, or participate in, any Value Added Project in a manner that would constitute, or cause such Company to commit, a breach of such Company's obligations under any Project Agreements or Financing Agreements.

5.12	Responsibilities under the Gas Allocation Letter

The Parties agree and acknowledge that a failure to satisfy the requirements of the Gas Allocation Letter 1 resulting in a claim under the Gas Allocation Letter 1 is a risk of the Project to be borne by the Parties in proportion to their respective Shareholder Percentages.

5.13	Provision of Information by Parties and the Companies

(a)

In regard to the operations of the Companies and all matters governed by this Agreement, if a Party, a Shareholder or a Company becomes aware that any of its (or its Affiliate's) or the Companies' directors, employees or Agents have, or in the future will, pay, offer, promise, or authorize the payment of money or anything of value, directly or indirectly, to a Government Official while knowing that any portion of such exchange is for the purpose of:

(i)

influencing any act or decision of a Government Official in its official capacity, including the failure to perform an official function, in order to assist itself, a Company or any other person in obtaining or retaining business, or directing business to any third party;

(ii)

securing an improper advantage;

(iii)

inducing a Government Official to use its influence to affect or influence any act or decision of a Governmental Authority in order to assist itself, a Company or any other person in obtaining or retaining business, or directing business to any third party; or

(iv)

providing an unlawful personal gain or benefit, of financial or other value, to a Government Official,

that Party, Shareholder or Company, as the case may be, shall promptly inform the Board of the relevant Company.

(b)

Where as a result of an activity carried on or proposed to be carried on by a Company a Governmental Authority makes an enquiry or request for information in relation to a legal, compliance or regulatory requirement of such Company or Party under Applicable Laws, the Parties shall co-operate with one another and the Company in relation to that enquiry or request for information. Upon request by a Party or a Company, as the case may be, the other Party (or Parties in the case of a request made by a Company) shall provide all reasonable information and assistance required by such Party or Company in respect of such enquiry or request for information.

Execution Version

(c)

Subject to Applicable Laws, Ma'aden shall procure that each of the Companies provides, or where such information is not held by the relevant Company but held by Ma'aden or an Affiliate of Ma'aden, Ma'aden shall provide, to Alcoa:

(i)

the information referred to in Schedule 16 (Information Undertakings) relating to the relevant Company, as and when required under such Schedule 16, with such information to be provided by the Ma'aden Nominated Individual to the Alcoa Nominated Individual; and

(ii)

upon reasonable advance notice from the Alcoa Nominated Individual to the Ma'aden Nominated Individual, such information in order to enable Alcoa to:

(A)

be kept properly informed about the business and affairs of the relevant Company and generally to protect Alcoa or its Affiliates' interests as a Shareholder; and/or

(B)

comply with any obligations to which it is subject under the Applicable Laws.

Such information rights are without prejudice to, and in no way limit the Parties' respective rights to access information regarding any of the Companies under any agreement or at law. For the avoidance of doubt, this Clause 5.13(c) does not apply to any information relating to any businesses or interests held by Ma'aden or its Affiliates that are not related to the Companies.

6	[INTENTIONALLY OMITTED]

7	Shareholders' Meetings

7.1	Shareholders' Meetings

The Shareholders shall act through general meetings duly held and resolutions duly adopted in accordance with the terms and conditions of this Agreement, the Articles of Association and Applicable Laws in the Kingdom. To the extent permitted by Applicable Laws in the Kingdom, a Shareholder may participate in Shareholders' Meetings in person or by video conference or tele-conference, and/or may appoint a proxy or proxies to represent it in such meetings.

7.2	Supermajority Items

(a)

The Parties agree that no action taken by any Company with respect to any of the following matters shall have any effect, in each case unless and until such matter shall have been approved by a resolution passed at a duly convened meeting of the Shareholders of the relevant Company at which a quorum is present by the affirmative votes of the relevant Shareholders in attendance or duly represented at such meeting who are entitled to vote on such resolution in accordance with this Agreement and holding in the aggregate not less than seventy five percent (75%) of the Share Capital:

(i)

Any amendment of the Articles of Association (including any change of name of the Company) other than in accordance with Clauses 4.4(d);

(ii)

Any change in the business object or shareholding structure of the Company, including any increase or reduction in the Share Capital or issuance of Shares or options on Shares by the Company (other than any increase in the Share Capital or issuance of Shares previously authorised in connection with the Required Shareholder Funding);

Execution Version

(iii)

Any liquidation or winding up of the Company (including voluntary dissolution of the Company);

(iv)

Any sale or other disposition of all or a substantial part of the Company's business or assets, or any merger of the Company with or into any other entity;

(v)

(A) any decision to suspend or curtail (except for any forced or emergency shutdowns, any shutdowns which are required for planned maintenance works or any suspension or curtailment required under a written request, instruction or order from any Governmental Authority), or following such suspension or curtailment, to resume, all or any part of a Company's production or operations; (B) any decision to permanently cease a Company's production or operations; and/or (C) in respect of MAC, MAC providing notice of its intention to suspend or curtail, or following a suspension or curtailment, to resume, all or any part of its production or operations, or permanently cease its production or operations and consequently serve any suspension notice (including a notice to extend, shorten or end a suspension period) or any termination notice, under the aluminium purchase agreement between MAC and MRC, the aluminium purchase agreement between MAC and Ma'aden; and the aluminium purchase agreement between MAC and Alcoa Inespal S.L.U.;

(vi)

Appointment, replacement, or removal of the Company's Auditors;

(vii)

Any decision regarding the distribution of the Company's available profits other than in accordance with Clause 11.1, including without limitation, any decision to establish reserves other than the statutory reserve or to carry forward the Company's profit balance in whole or in part to the next Financial Year;

(viii)

Any decision regarding Managers' remuneration; or

(ix)

The approval and any subsequent amendment of the Project Budget.

(b)

The Parties shall, and shall ensure that any of their Affiliates that are Shareholders shall, vote for any amendment to the Articles of Association, change in shareholding structure of a Company, or decision regarding distribution of a Company's available profits where required to give effect to the rights and obligations of the Shareholders specifically provided for in this Agreement.

(c)

Other than as regards matters enumerated in Clause 7.2(a), the Parties agree that no action by a Company which requires Shareholder approval pursuant to this Agreement or under Applicable Laws of the Kingdom shall have any effect until such matter shall have been approved by a resolution passed at a duly convened meeting of the Shareholders at which a quorum is present by the affirmative votes of the relevant Shareholders in attendance or duly represented at such meeting who are entitled to vote on such resolution in accordance with this Agreement and holding in the aggregate at least fifty one percent (51%) of the Share Capital of the relevant Company.

(d)

If any matter has been approved by the relevant Board of Managers in accordance with the Agreement or any action is required to be taken by a Company or any Shareholder in accordance with the Agreement, and such matter requires the approval or ratification by the Shareholders in accordance with Applicable Laws of the Kingdom, then the Parties shall procure that such approval or ratification is promptly given.

Execution Version

7.3

Language

The resolutions of the meeting of Shareholders shall be laid down in writing in the Arabic language and the English language. For purposes of any proceedings conducted pursuant to Clause 21.3 the English language version of any such resolution shall prevail.

8	Board of Managers

8.1	Appointment of Managers to each Company

(a)

Except in relation to those matters reserved to the Shareholders, each Company shall be managed by a Board of Managers, which will consist of five (5) Managers. Ma'aden will appoint three (3) Managers, and Alcoa (or its Affiliate) will appoint two (2) Managers, to such Company. Each of Ma'aden and Alcoa (or its Affiliate, as aforesaid) will also appoint an Alternate Manager, who will also participate in meetings of the relevant Board of Managers, but will have no vote unless expressly authorized to vote pursuant to sub-paragraph (f) below.

(b)

Unless otherwise agreed between the Shareholders of a particular Company, Ma'aden shall appoint the Chairman of each Company.

(c)

The relevant Board of Managers shall have full authority to act on behalf of the Company to which they have been appointed, in accordance with the terms and conditions of this Agreement and the Articles of Association. All appointments of Managers shall be effected by written notice to such Company and the other Party.

(d)

To the extent permissible under Applicable Laws of the Kingdom, meetings of the Board of Managers may be held by conference call or video conference. Meetings of the Board of Managers shall be held on a quarterly basis.

(e)

Meetings of the relevant Board of Managers shall be held at the head office of such Company or at such other places as may be agreed by a majority of the Managers of that Company. Meetings shall be held at such times as specified by the Chairman of that Company. The notice shall include the agenda and all documents pertaining to the business to be transacted at the meeting. The relevant Board of Managers may waive or modify the requirement for notice (including the duration of the notice) with the written consent of all the relevant Managers either prior to or at the commencement of the meeting and before any other business is transacted.

(f)

A Manager may grant a proxy to any other Manager appointed by the Shareholder appointing such Manager to attend meetings of the Board of Managers and to vote on his behalf.

(g)

Resolutions of the Board of Managers may be passed by written resolution.

(h)

Unless otherwise agreed between the Parties, vacancies will be promptly filled by the Shareholder having the right to appoint a Manager to the vacant seat, such that the composition of the Board of Managers of any particular Company shall at all times be in accordance with this Agreement.

(i)

Subject to paragraph (f) above and Clause 8.5(a), each Manager shall have one (1) vote, and the Chairman shall not have any additional voting power (including any casting vote) by virtue of his position.

(j)

The Chairman shall be a Manager and shall have the authority set out in the Articles of Association, such authority to be exercised in accordance with the decision of the Board of Managers.

Execution Version

8.2	Removal of Managers

The Party or its Affiliate being a Shareholder who appointed a Manager (or an alternate) may remove that Manager (or such alternate) at any time by written notice to the relevant Company and the other Party. In the event that a Manager is removed or resigns or becomes incapacitated or otherwise unable to serve for any reason, the Party or its Affiliate being a Shareholder who appointed him shall promptly appoint a replacement. Any Party or its Affiliate being a Shareholder removing a Manager appointed by it or them in accordance with the relevant provisions of the Articles of Association shall be responsible for and shall hold harmless the other Party and the relevant Company from and against any claim for unfair or wrongful dismissal arising out of such removal and any reasonable costs and expenses incurred in defending such proceedings, including, but without prejudice to the generality of the foregoing, legal costs actually incurred.

8.3	Appointment of Senior Officers to each Company; Removal

(a)

The relevant Board of Managers shall appoint officers of the relevant Company from time to time, including the following officers of such Company ("Senior Officers"):

(i)

the President for one or more Companies;

(ii)

the Vice President for Operations (or such other position as the Parties may determine);

(iii)

the Vice President for Finance for one or more Companies; and

(iv)

the Vice President for Human Resources.

(b)

The appointment and removal of each Senior Officer will be subject to approval by the relevant Board of Managers pursuant to Clause 8.5(a).

(c)

Except as otherwise agreed by the Parties, the President shall be nominated by Ma'aden to each Board of Managers for approval and shall be the primary executive officer of each Company and shall be fully responsible for the general and executive management and daily administration of the operations and business of each Company. If more than one President is nominated by Ma'aden, Ma'aden will identify which executive will maintain overall responsibility for common operations and functions between the Companies (the "MA President").The person nominated by Ma'aden as President shall serve as President for each Company. The President shall report directly to the relevant Board of Managers and carry into effect all decisions and resolutions of the relevant Board of Managers and, if and to the extent determined by special majority approval of the relevant Board of Managers, any duly authorised committee of the relevant Board of Managers.

(d)

Except as otherwise agreed by the Parties, there shall be one Vice President for Operations reporting to the MA President who shall be nominated by Alcoa, subject to the approval of each Board of Managers. The scope of each Vice President for Operations' role and responsibilities shall be as determined by the relevant Board of Managers from time to time.

(e)

Except as otherwise agreed by the Parties, there shall be one Vice President for Finance reporting to the MA President who shall be nominated by Ma'aden, subject to the approval of each Board of Managers. The scope of the Vice President for Finance's role and responsibilities shall be as determined by the relevant Board of Managers from time to time.

(f)

The scope of the Vice President for Human Resources' role and responsibilities shall be as determined by the relevant Board of Managers from time to time. The Vice President for Human Resources shall report directly to the MA President. The Vice President for Human Resources Officer shall be a suitable qualified Saudi national. It is acknowledged that the

Execution Version

services of the Vice President for Human Resources position(s) may be provided by way of consolidated or shared services from Ma'aden.

(g)

The Parties agree that the initial management team will be designated for a transitional period of approximately six (6) years from incorporation of the Companies, during which time the Parties shall use their best efforts to ensure that suitably qualified Saudi professionals will be selected and prepared to assume key management positions of each Company.

(h)

In the case of a disagreement between the Parties regarding the appointment or removal of one of the Senior Officers, the Parties will first attempt to resolve such disagreement amicably, including reference to senior management consistent with the provisions of Clause 21.2 (without, however, the required formality of the written declaration of "dispute" and the issuance of a "dispute notice" and without recourse to arbitration pursuant to Clause 21.3).

(i)

If a Party loses faith in a Senior Officer nominated by it, it may immediately propose the replacement of such Senior Officer. If a Party loses faith in a Senior Officer nominated by the other Party, it will promptly so inform the other Party, and the Parties will consult on the necessary steps required to either (1) place such Senior Officer under review, or (2) to remove such Senior Officer. If the Parties cannot agree on the review or removal of such Senior Officer, the Deadlock provisions of Clause 9 shall apply for a period not to exceed one (1) year; and thereafter, if the loss of faith in such Senior Officer continues, he or she will be removed from the present position, and the Party entitled to nominate such Senior Officer will nominate a replacement.

8.4	Meetings of the Board of Managers of each Company

(a)

A meeting of the Board of Managers may be requested by any two (2) Managers. The secretary shall circulate to the relevant Managers a proposed agenda for each Board meeting along with notice of such meeting. Except as may be agreed by all Managers present and entitled to attend and vote at a meeting of the Board of Managers, no resolution or business shall be passed or transacted at any such meeting that is not included in the agenda for such meeting.

(b)

No business shall be transacted at any duly convened Board meeting unless a quorum is present. Subject to paragraph (c) below, the quorum for the transaction of business at any Board meeting shall be at least one (1) Manager appointed by each Shareholder. The Parties shall procure that the relevant Shareholders shall use their reasonable efforts to ensure that the Managers appointed by them attend each Board meeting and that a quorum is present throughout the meeting.

(c)

If within two (2) hours of the time appointed for a Board meeting a quorum is not present, the meeting shall, subject to compliance with the next sentence, be adjourned to the same day of the next week at the same time and the same place or such other time, date and place as agreed by the relevant Managers so long as it takes place not later than one (1) month following the initially scheduled meeting. Each Manager shall be notified in writing by the relevant Company of the date, time and place of the adjourned meeting as soon as practicable once such date, time and place have been determined by the Managers. Unless otherwise approved by the relevant Board of Managers in accordance with this Agreement, if at the adjourned meeting a quorum is not present within two (2) hours of the time appointed for the meeting, those Managers present shall constitute a quorum.

8.5	Voting Thresholds

(a)

Subject to Clause 8.5(b), each Board of Managers shall adopt its resolutions with the affirmative simple majority vote of the Managers being present in person or by proxy, and entitled to vote, at a duly convened Board meeting at which a quorum is present (or in the

Execution Version

case of a written resolution taken without a Board meeting, the total number of Managers). The decisions requiring the affirmative simple majority vote of the Managers shall comprise all such decisions of the Managers other than those for which a special majority resolution is required pursuant to Clause 8.5(b).

(b)

The following decisions relating to each Company shall require the affirmative special majority vote of seventy five percent (75%) of the relevant Managers being present in person or by proxy, and entitled to vote, at a duly convened Board meeting at which a quorum is present (or in the case of a written resolution taken without a Board meeting, seventy five percent (75%) of the Managers entitled to vote):

(i)

Appointment, removal and remuneration of the Senior Officers;

(ii)

Approval of the Project Budget and any material change thereto having a value in excess of the lower of fifty million US Dollars (US$50 million) or ten (10) percent of the Project Budget;

(iii)

Approval of the annual operating budgets and any material change thereto (having a value in excess of the lower of fifty million US Dollars (US$50 million) or ten (10) percent of the annual operating budget) of the relevant Company following the Commercial Production Date;

(iv)

Approval of any Expansion, Value Added Project, the incurring by a Company of any additional indebtedness beyond that contained in the Financing Plan or the Project Budget, or any capital investment projects or material changes to the same in each case having a value in excess of fifty million US Dollars (US$50 million);

(v)

Approval of any Construction Agreement to be entered into having a value in excess of fifty million US Dollars (US$50 million);

(vi)

(A) Approval of any Project Agreement to be entered into between a Shareholder or any of its Affiliates and any Company which is not in any Agreed Form at the Effective Date; (B) any Company entering into any agreement with any Shareholder, any Affiliate of a Shareholder or any of that Company's Affiliates having a term in excess of two (2) years and having a value in excess of five million US Dollars (US$5 million), or any Company advancing or making any loan or forward sale to or forward purchase from or prepayment to (or entering into any transaction with an equivalent economic effect with) any Shareholder or any Affiliate of a Shareholder, or agreeing to any amendment of, or waiver or deferral of rights, or consenting to any request or accommodation (including, for the avoidance of doubt, consenting to assignments), or resolving a dispute, or effecting an assignment under, any agreement between a Company and MRC or any of its or Ma'aden's Affiliates; (C) referral of any decision or determination by any Company to its Lead Representative, or approval of any decision or determination by any Company's Lead Representative referred to such Lead Representative in connection with the Cast House Users Agreement, Shared Infrastructure Co-operation and Utilities Distribution Agreement or any aluminium purchase agreement between MAC and MRC or any of its or Ma'aden's Affiliates; or (D) appointment by MAC of an expert (as defined in the aluminium purchase agreement between MAC and MRC), submitting to such expert any request for review, a statement of position and/or a rebuttal pursuant to the "Resolution Procedures" set out in Schedule C of the aluminium purchase agreement between MAC and MRC.

(vii)

Approval of financial statements required to be produced by any Company and presented to the Shareholders in accordance with Clause 12.3;

Execution Version

(viii)

Approval of any long-term contract, having a term in excess of three (3) years and having a value in excess of fifty million US Dollars (US$50 million) (and except to the extent already included in any approved budget);

(ix)

Adoption of each Company's initial business conduct and conflict of interest Company Policies, and any material changes thereto; and

(x)

To the extent required by the Company Policies, entering into a contract of engagement or compensation arrangements with an Agent whose duties are to lobby or to influence the actions or decisions of Governmental Authorities and/or Government Officials.

8.6	Resolutions

The resolutions of each Board of Managers shall be written in the English language and, if Ma'aden so requires and at its cost, in the Arabic language. For the purposes of any proceedings conducted pursuant to Clause 21.3, the English language version of any such resolution shall prevail.

8.7	Information

A Manager shall be entitled to supply details of any business transacted at Board meetings or committee meetings and any other information obtained by him in his capacity as a Manager, to the Shareholder by whom he was appointed or to the professional advisers of such Shareholder, subject always to the provisions of Clause 22.

8.8	Duties of Managers

The Parties and any Affiliate being a Shareholder shall endeavour to procure that the Managers and Senior Officers of each Company shall, in carrying out their responsibilities, act honestly, ethically, in good faith and in the best interests of such Company. Each Party and any Affiliate being a Shareholder shall procure that its Managers and Senior Officers do not act or fail to act in a way which would prevent any Company from exercising any right or enforcing any remedy under any Ancillary Agreement or other Project Agreement.

8.9	Company Policies

The Parties, through the relevant Board of Managers shall procure that each Company shall adopt and be operated in accordance with the Company's policies relating to accounting, environmental matters, health and safety, corporate social responsibility, financing, cash management and disbursements, Share Distributions, procurement, human resources, hedging and risk management and business conduct as promulgated and amended by the Board of Managers from time to time (the "Company Policies").

In this regard, among other things:

(a)

The Parties shall procure that each Company will, before the date that the Company shall commence business, establish, maintain and duly administer an internal control system comprising policies, processes and such other features as are necessary or advisable to help ensure:

(i)

the Company's effective and efficient operation by enabling it to manage significant business, operational, financial, compliance and other risks to achieving the Company's objectives;

(ii)

the quality of the Company's internal and external financial reporting; and

(iii)

compliance by the Company with Applicable Laws.

Execution Version

(b)

The Parties shall procure that each Company will make and keep books, records and accounts which in reasonable detail accurately and fairly reflect the transactions and dispositions of its assets, and will (before the date that the Company shall commence business) devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances that:

(i)

transactions are executed in accordance with management's general or specific authorization and are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and/or International Accounting Standards to maintain accountability of such assets;

(ii)

access to assets is permitted only in accordance with management's general or specific authorization; and

(iii)

the recorded accountability for assets is compared with existing assets at reasonable levels and appropriate action is taken with respect to any differences.

(c)

Alcoa shall prepare and provide the first drafts of each Company's compliance and procedure manuals and other documents necessary to implement ‎sub-clause (a) and (‎b) above.

8.10	[INTENTIONALLY OMITTED]

Deadlock

9.1	Deadlock Arising

(a)

If a resolution (a "Proposed Resolution") with respect to any proposed action or omission by any Company that constitutes (i) a matter requiring affirmative special majority decision by the relevant Board of Managers as identified in Clause 8.5(b), or (ii) a matter requiring the affirmative resolution of the relevant Shareholders representing the relevant voting Share Capital as identified in Clause 7.2 (other than potential Expansions, which are subsequently pursued as Break-Off Projects, which are covered by the provisions of Clause 5.10), is proposed at two (2) consecutive meetings of the relevant Shareholders or, as the case may be, the relevant Board of Managers and such resolution (as it may be amended or supplemented by approval of the relevant Shareholders or, as the case may be, the relevant Board of Managers in accordance with this Agreement) and is not approved at either of such meetings; such situation shall be considered to constitute a "Deadlock" for the purposes of this Agreement.

(b)

Nothing in this Clause shall affect or relieve any Party or Shareholder from its obligations under this Agreement, nor shall any default by a Party or a Shareholder in the performance of such obligations give rise to a Deadlock.

9.2	Deadlock Referral

(a)

Any Shareholder that has not voted against or abstained from voting in respect of a Proposed Resolution that has resulted in a Deadlock or, as the case may be, whose appointed Managers have not voted against or abstained from voting in respect of such Proposed Resolution, may during the period of sixty (60) days after such Deadlock has arisen (but not after such period) invoke the Deadlock Resolution Procedure referred to in paragraph (b) below by giving notice (a "Deadlock Referral Notice") in writing to the other Shareholder and, if applicable, the relevant Company, which notice shall be accompanied by such Shareholder's description of the Deadlock and its position with respect thereto.

Execution Version

(b)

If a Shareholder gives a Deadlock Referral Notice in respect of a Deadlock, the Shareholders shall procure that the following procedure (the "Deadlock Resolution Procedure") is followed:

(i)

the chief executive officers of the ultimate parent companies of each of the Shareholders or their representatives specifically designated for the purpose of resolving the Deadlock (the "Deadlock Committee") shall meet within fifteen (15) days of such notice being given and shall negotiate in good faith with a view to resolving the Deadlock;

(ii)

the rules and procedures of the Deadlock Committee shall be unanimously agreed by the Deadlock Committee;

(iii)

each Shareholder shall have the right to submit to the members of the Deadlock Committee its own statement of the matter and its position with respect thereto;

(iv)

the members of the Deadlock Committee shall use their reasonable efforts to resolve the Deadlock for a reasonable period of time, which shall not (unless otherwise agreed between the Shareholders) exceed forty five (45) days;

(v)

the members of the Deadlock Committee shall be guided in such negotiations by the best interests of the relevant Company; and

(vi)

the members of the Deadlock Committee may approve such interim or temporary actions or other measures as they shall unanimously agree are necessary and desirable to protect and preserve the value of the Project pending resolution of the Deadlock, and the relevant Shareholders shall procure that any such approved actions or other measures are duly approved by those Shareholders or, as the case may be, the relevant Board of Managers, in accordance with this Agreement and implemented by the relevant Company.

(c)

No Party or Shareholder shall, by virtue of any Deadlock or Deadlock Resolution Procedure, be relieved of any of its obligations under this Agreement and, without limiting the generality of the foregoing, the Parties and the relevant Shareholders shall continue to procure that the relevant Company continue to take all such actions contemplated by this Agreement in a timely manner.

(d)

If a Deadlock is not the subject of a valid Deadlock Referral Notice or is not resolved in accordance with the Deadlock Resolution Procedure within sixty (60) days of the submission of such matter to the Deadlock Committee, no action will be taken with respect to the Proposed Resolution giving rise to such Deadlock and the status quo shall be maintained in respect of the operations of the relevant Company in respect thereof.

9.3	Sole Remedies

(a)

A Deadlock shall not be submitted to, or be capable of resolution by, arbitration under this Agreement, provided that, any dispute with respect to the compliance by the relevant Shareholders with their obligations under this Clause 9 may be subject to arbitration pursuant to Clause 21.3.

(b)

The rights and remedies of the Parties and the relevant Shareholders under this Clause 9 shall be the exclusive rights and remedies of the Parties and the relevant Shareholders with respect to any Deadlock and, without limiting the generality of the foregoing, no Party or Shareholder shall take any action or other step to liquidate, wind-up or otherwise dissolve the relevant Company as a consequence of any Deadlock.

Execution Version

10	Senior Debt Financing of the Project

10.1	[INTENTIONALLY OMITTED]

10.2	[INTENTIONALLY OMITTED]

10.3	No Further Liability

11	Distributions Policy; Taxes

11.1	Distributions Policy

(a)

For the purposes of this Clause 11.1, the following defined terms shall have the following meanings:

"Calculation Date" means:

(i)

in respect of MAC, 30 June and 31 December of each year; and

(ii)

in respect of MBAC, 31 March and 30 September of each year.

"Cash Buffer" means the aggregate of:

(i)

the applicable Cash Buffer Amount; and

(ii)

the amount of any Debt Service payable prior to the subsequent Calculation Date.

"Cash Buffer Amount" means the Initial Cash Buffer Amount or such other amounts as are agreed or determined in accordance with paragraph (f).

"Commercial Cash Sweep End Date" means:

(i)

in respect of MAC, the Cash Sweep End Date as defined as at the Amendment Effective Date in the MAC Commercial Loan CTA; and

(ii)

in respect of MBAC, the Fixed Cash Sweep End Date as defined as at the Amendment Effective Date in the MBAC Commercial Loan Agreement CTA.

"Debt Service" means, in relation to any period, the aggregate amount of any principal, commission and Financing Costs payable in respect of any Financial Indebtedness during that period.

"Excess Cash" means on a Calculation Date, subject to any adjustments applied in accordance with Clause 11.1(b) and after deducting the Cash Buffer, all cash available to the Company on that Calculation Date, as calculated by the relevant Company in accordance with Schedule 17 (Formulation for Excess Cash).

"Financial Indebtedness" means any indebtedness for or in respect of:

(i)

moneys borrowed;

(ii)

any amount raised by acceptance under any acceptance credit facility (including any dematerialised equivalent);

Execution Version

(iii)

any amount raised pursuant to any note purchase facility or the issue of sukuk, bonds, notes, debentures, loan stock or any similar instrument;

(iv)

the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with IFRS, be treated as a finance or capital lease;

(v)

receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);

(vi)

any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing (excluding, for the avoidance of doubt, any trade payables);

(vii)

the net amount due and payable under any derivative contract;

(viii)

any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution;

(ix)

any Islamic financing arrangements; and

(x)

the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs ‎(i) to ‎(ix) above;

"Financing Costs" means the aggregate amount of the commission (including the commission element of leasing and hire purchase payments and capitalised commission), discounts and other finance payments payable by a Company in respect of Financial Indebtedness (including any commission, discounts and other finance payments payable by that Company under any Treasury Transaction but deducting any commission, discounts and other finance payments receivable by that Company under any Treasury Transaction and any other commission receivable by that Company on any deposit or bank account or by way of intercompany loan).

"Initial Cash Buffer Amount" means:

(i)

in respect of MAC, USD 150,000,000; and

(ii)

in respect of MBAC, USD 50,000,000.

"Initial Cash Buffer Recalculation Date" means:

(i)

in respect of MAC, 31 December 2022 or the PIF Cash Sweep End Date, whichever is the later; and

(ii)

in respect of MBAC, 31 March 2023 or the PIF Cash Sweep End Date, whichever is the later.

"Ma'aden Cash Sweep End Date" means:

(i)

in respect of MAC, 31 December 2022; and

(ii)

in respect of MBAC, 30 June 2021;

"MAC Commercial Loan CTA" means the Common Terms Agreement dated 14 December 2017 entered into between MAC, First Abu Dhabi Bank PJSC as Conventional Facility Agent and The National Commercial Bank as Intercreditor Agent, Investment Agent and SAR Co-ordinator, amongst others, as amended or restated from time to time.

Execution Version

"Maximum Cash Buffer Amount" means:

(i)

in respect of MAC, USD 250,000,000; and

(ii)

in respect of MBAC, USD 150,000,000.

"Maximum Periodic Adjusment Amount" means an amount equal to 20% of the Cash Buffer Amount applicable in the three year period preceding the applicable Calculation Date (or, in respect of the Cash Buffer Calculation Date, the Initial Cash Buffer Amount).

"MBAC Commercial Loan CTA" means the Common Terms Agreement dated 16 July 2018 entered into between MBAC and the National Commercial Bank as Sole Global Coordinator and Mandated Lead Arranger, amongst others, as amended or restated from time to time.

"Ongoing Cash Buffer Recalculation Dates" means:

(i)

the Calculation Date falling three years following the Initial Cash Buffer Recalculation Date; and

(ii)

each Calculation Date falling three years thereafter, save that if the Parties fail to agree a revised Cash Buffer Amount on an Ongoing Cash Buffer Recalculation Date in accordance with paragraph (f), it shall mean the Calculation Date falling one year following that Ongoing Cash Buffer Recalculation Date,

and "Ongoing Cash Buffer Recalculation Date" shall mean any such date.

"PIF Cash Sweep End Date" means:

(i)

in respect of MAC, the PIF Cash Sweep End Date as defined as at the Amendment Effective Date in the PIF MAC Loan; and

(ii)

in respect of MBAC, the PIF Fixed Cash Sweep End Date as defined as at the Amendment Effective Date in the PIF MBAC Loan.

"PIF MAC Loan" means the loan agreement entered into between MAC as borrower and PIF as lender dated 21 Muharram 1432H (corresponding to: 27 December 2010G) as amended and restated from time to time;

"PIF MBAC Loan" means the loan agreement entered into between MBAC as borrower and PIF as lender dated 01 Muharram 1433H (corresponding to: 27 November 2011G) as amended and restated from time to time;

"Treasury Transaction" means any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price.

(b)

The annual net profits of each Company and any retained profits from previous Financial Years shall be first allocated towards maintaining the statutory reserve as required by the articles of association of each Company or the Applicable Laws of the Kingdom, subject to any exemptions granted to any Company in relation thereto.

(c)

If losses are incurred in any Financial Year, they shall be carried over to the next Financial Year and no profits shall be distributed until the losses are fully covered.

(d)

Subject to the foregoing and after deduction of the amounts referred to in Clause 11.1(b), the Parties and the relevant Shareholders shall procure that each Company makes Distributions on or about the applicable Calculation Date in each Financial Year to the relevant Shareholders in the following manner:

Execution Version

(i)

at any time prior to the assignment or transfer to Ma'aden of the PIF MBAC Loan and/or the PIF MAC Loan (as applicable), taking into account the then applicable provisions on dividend blocks in the Financing Agreements:

(A)

there shall be no Distributions made until the Commercial Cash Sweep End Date has occurred;

(B)

following the Commercial Cash Sweep End Date and prior to the PIF Cash Sweep End Date, 35% of the Excess Cash shall be distributed by way of dividends as a matter of course; and

(C)

following the PIF Cash Sweep End Date, 100% of the Excess Cash shall be distributed by way of dividends as a matter of course; and

(ii)

at any time after the assignment or transfer to Ma'aden of the PIF MBAC Loan and/or the PIF MAC Loan (as applicable), taking into account the then applicable provisions on dividend block in the Financing Agreements:

(A)

there shall be no Distributions made until the Commercial Cash Sweep End Date has occurred;

(B)

following the Commercial Cash Sweep End Date and prior to the Ma'aden Cash Sweep End Date, 35% of the Excess Cash shall be distributed by way of dividends as a matter of course; and

(C)

following the Ma'aden Cash Sweep End Date, 100% of the Excess Cash shall be distributed by way of dividends as a matter of course,

in each case, provided that any Distribution shall be made pro rata to the relevant Shareholders in accordance with their respective Shareholder Percentage, subject to retaining the Cash Buffer in each Company.

(e)

Distributions of Excess Cash by each Company to the relevant Shareholders pursuant to this Clause 11.1 will be made in accordance with the following priorities:

(i)

firstly, in repayment of the outstanding principal amount and any other amounts in respect of the Shareholder Loans, if any; and

(ii)

secondly, to the relevant Shareholders by way of dividend or other Share Distribution in accordance with this Agreement,

and except to the extent that the relevant Shareholders otherwise determine pursuant to Clause 7.2 (a)(vi).

(f)

No later than six (6) months prior to the Initial Cash Buffer Recalculation Date and each Ongoing Cash Buffer Recalculation Date, the Parties shall seek to agree a revised Cash Buffer Amount based on the liquidity needs of the applicable Company over the following three years and so notify the applicable Company, and such revised Cash Buffer Amount shall apply in relation to the next occurring Calculation Date. If the Parties fail to agree a revised Cash Buffer Amount by the date falling three (3) months prior to the Initial Cash Buffer Recalculation Date or an Ongoing Cash Buffer Recalculation Date, the applicable Company may, no later than the date falling one (1) month prior to the Initial Cash Buffer Recalculation Date or an Ongoing Cash Buffer Recalculation Date, elect to increase or decrease the Cash Buffer Amount by up to the Maximum Periodic Adjusment Amount and so notify each of the Parties, and such increased or decreased Cash Buffer Amount shall apply in relation to the

Execution Version

next occurring Calculation Date, save that the applicable Company shall not be entitled to increase the Cash Buffer Amount at any time above the Maximum Cash Buffer Amount.

11.2	Local Community Projects; Research and Development Programme

(a)

The Parties shall procure that the Companies shall develop and agree policies with respect to:

(i)

funding to be applied to local community projects as part of each of the Companies' respective Annual Programme and Budget, at a minimum level equivalent in the aggregate to the projected one percent (1%) of EBIT of the Companies and subsequently, in the minimum amount of one percent (1%) of the Companies' actual EBIT annually; and

(ii)

funding by the Companies of their research and development programmes in the minimum amount in the aggregate of one percent (1%) of the Companies' actual EBIT annually.

(b)

Each Company shall be responsible for dispersing such funds to the relevant local community projects and for determining Ma'aden's role in this process, as approved by the relevant Board of Managers, consistent with its Company Policies. Each Company shall monitor any local community projects to which funds have been so disbursed in accordance with the Parties' agreed policies, subject to any monitoring role which is specifically assigned to Ma'aden in accordance with a Company's determination under this Clause 11.2(b).

11.3	Tax and Zakat

(a)

Each Party shall ensure that any Affiliate that is a Shareholder shall be responsible for and shall bear the cost of any income tax or zakat, which may be imposed in the Kingdom on (i) its respective share of the profits in a Company, or (ii) its respective ownership interest in a Company, or (iii) its respective ownership of, or interest in, the Mining Licences. Each Party hereby authorises each Company to pay to the DZIT on its behalf the Saudi Arabian income tax or zakat for which it is responsible or which is attributable to it pursuant to this Clause 11.3 and to charge a corresponding amount against the distribution entitlement of the relevant Shareholder for the relevant Financial Year. In the event that a Company does not have sufficient cash to pay the tax or zakat for which a Shareholder is responsible the respective Party shall ensure that then such Shareholder shall pay the necessary amount to the Company to enable it to pay such tax or zakat to the DZIT.

(b)

Each Party shall, or shall ensure that any Affiliate that is a Shareholder shall bear the cost of any Saudi Arabian withholding tax imposed on any payments made to it by a Company in connection with a Distribution. Such Company may withhold from any payments to be made to such Shareholder by the Company any withholding tax for which such Shareholder is responsible and each Shareholder shall promptly pay such Company for payment to the DZIT any additional amounts required to cover any withholding tax for which such Shareholder is responsible. Such Company will provide each relevant Shareholder with copies of all applicable Tax receipts.

12	Accounting System, Books and Budgets

12.1	Accounting System and Standards

The Parties will ensure that each Company shall keep and maintain an accounting and cost accounting system allowing efficient control and allocation of all costs involved, and shall regularly report to the Parties in accordance with the requirements of all Applicable Laws of the Kingdom and a system acceptable to the relevant Board of Managers, based on generally accepted accounting standards and applicable rules and regulations applied by the Saudi Organisation for Certified Public Accountants

Execution Version

("SOCPA") in the Kingdom and also in the International Financial Reporting Standards as issued by the International Accounting Standards Board from time to time ("IFRS").

12.2	Language of Reporting to the Shareholders

All reports and financial information provided to Parties and relevant Shareholders pursuant to this Clause 12 shall be prepared in Arabic and English.

12.3	Financial Statements

The Parties shall procure that each Company prepares the following:

(a)

not later than ninety (90) days after the end of each Financial Year, audited financial statements, including balance sheets, income statements and cash flow statements of the relevant Company for the preceding Financial Year, in accordance with SOCPA and IFRS;

(b)

not later than thirty (30) days after each of each 31 March, 30 June, and 30 September in each Financial Year quarterly unaudited financial statements, including balance sheets, income statements and cash flow statements of the Company for the respective three (3), six (6) and nine (9) month periods then ended, in accordance with SOCPA and IFRS;

(c)

not later than twenty (20) days after the end of each calendar month in each Financial Year, monthly unaudited management accounts for such calendar month, in accordance with SOCPA and IFRS; and

(d)

all financial statements and management accounts delivered to the Shareholders shall be accompanied by:

(i)

a report of the President summarising the development, construction or, as the case may be, operations of the relevant Company conducted during the period covered by such financial statements or management accounts;

(ii)

a statement of the sources and application of funds of the relevant Company, showing actual expenditures compared to the applicable approved Budget(s);

(iii)

[INTENTIONALLY OMITTED]; and

(iv)

such other pertinent financial or other information as may reasonably be requested from time to time by any Party or Shareholder.

12.4	Books and Audit Rights

The accounting books prepared by each Company shall be in conformity with Clause 12.1 above. Each Party and each Shareholder shall be entitled to inspect the books and conduct an audit of the (i) financial affairs of a Company using its own internal audit resources or an Approved Accounting Firm, or (ii) regulatory compliance of a Company using their external legal resources, provided that such inspection and/or audit shall not unduly interfere with the operations of the relevant Company or the development and construction of the Project or any Expansion or Value Added Project pursued by such Company, and subject to such Party or Shareholder first obtaining reasonable undertakings of confidentiality from the Approved Accounting Firm or law firm conducting the inspection and/or audit. The expenses of any such inspection and/or audit shall be borne by the Party or Shareholder conducting the inspection and/or audit unless the inspection and/or audit identifies a material error or omission in such books, financial affairs or any financial statements delivered by a Company to such Party or Shareholder in accordance with this Agreement, in which case the expenses of the Approved Accounting Firm (where so appointed) carrying out such inspection and/or audit shall be borne by such Company.

Execution Version

12.5	Statutory Obligations

In addition to the financial statements prepared by each Company pursuant to Clause 12.3 above, the Parties shall procure that each Company prepares and files with the relevant Governmental Authorities in the Kingdom such financial information, accounts, financial statements, reports and other documents in respect of its business and activities in accordance with Applicable Laws of the Kingdom.

12.6

Auditors

(a)

[INTENTIONALLY OMITTED].

(b)

The Parties shall use their reasonable efforts to procure that at all times an Approved Accounting Firm is appointed as Auditor and that such Auditor performs such functions as are contemplated to be performed by the Auditor under this Agreement.

(c)

If and to the extent that a Company is required under Applicable Laws of the Kingdom to appoint any other person (including any person resident in the Kingdom) to act as its auditor then the Parties shall procure that a suitably qualified person is appointed to act in such capacity in the manner required under Applicable Laws of the Kingdom; provided that, whenever practicable, such person shall be the branch or affiliate firm of the Auditors in the Kingdom.

12.7	Rights of Managers not Limited

Nothing in this Clause 12 shall be deemed to limit the right of any Manager under Applicable Laws of the Kingdom (i) to request, obtain and examine any information relating to the business or affairs of the Company to which he has been appointed a Manager or (ii) to gain access to the premises and facilities of such Company.

12.8	Annual and Special Budgets

(a)

Each Party shall procure that the President prepares and delivers to each Board of Managers an annual programme and budget for each Financial Year commencing after the Effective Date (the "Annual Programme and Budget") not later than thirty (30) days prior to the date of each Board of Managers meeting immediately preceding the Financial Year to which such Annual Programme and Budget relates and such other budgets and operating plans covering shorter periods or discrete projects (each, a "Special Programme and Budget") as each Board of Managers may direct.

(b)

Each Annual Programme and Budget in respect of a Financial Year shall include the following information with respect to such Financial Year and such other information as each Board of Managers may direct:

(i)

an estimate of all proposed capital expenditures to be incurred in such Financial Year, indicating the item or type and estimated amount of such expenditures, the necessity therefor and the estimated timing thereof;

(ii)

an estimate of the revenues and other cash receipts expected to be received, and the operating costs expected to be incurred, by the relevant Company during such Financial Year, and the basis on which such estimate was prepared;

(iii)

projected financial statements for such Financial Year reflecting the foregoing; and

(iv)

an estimate of the sources and uses of funds for such Financial Year, including any estimated Required Shareholder Funding, the estimated amount and timing of any

Execution Version

Cash Calls, the estimated amount and timing of any Share Distributions and the form of any such Distributions.

(c)

The Parties shall procure that each Company shall promptly report to the relevant Shareholders:

(i)

any actual or anticipated aggregate expenditures by the Company during any period of one month, calendar quarter or Financial Year that exceeds, or are expected to exceed, the aggregate budgeted expenditures for such period by ten percent (10%) or more; and

(ii)

any anticipated material deviations from the estimates set out in any approved Budget of the amounts and timing of any Required Shareholder Funding or Cash Calls.

(d)

In the event that a Deadlock arises in respect of the proposed adoption of a Budget or a particular item included within the proposed Budget, the relevant Company shall continue to be operated on the basis set forth in the latest applicable approved Budget (adjusted for current inflation) or, to the extent possible, the proposed Budget shall be approved except for the particular item subject to the Deadlock, in each case until a new Budget is adopted or the particular item is agreed.

12.9	Emergency Funding

(a)

Notwithstanding anything to the contrary in this Agreement, a Company may at any time incur, and may require the Shareholders to fund, expenditures that the President determines (acting reasonably), and the relevant Board of Managers agrees, are necessary to protect life or property or the assets of the relevant Company or to comply with Applicable Laws in the Kingdom without an approved Budget.

(b)

The Parties shall ensure that each Company shall promptly notify the relevant Shareholders of the occurrence of any of the circumstances referred to in paragraph (a) above and the relevant Board of Managers may issue a Cash Call in respect of the required funding subject to compliance with the terms and conditions of Clause 4 above.

(c)

[INTENTIONALLY OMITTED].

13	Entry Payment, Pre-Incorporation Costs and Transfer of Pre-Incorporation Materials

13.1	Payment of Entry Payment and Pre-Incorporation Costs

(a)

[INTENTIONALLY OMITTED]

(b)

[INTENTIONALLY OMITTED]

(c)

[INTENTIONALLY OMITTED]

(d)

No Party shall be entitled to reimbursement of any costs incurred in negotiating this Agreement or any other agreement that such Party or its Affiliates is to enter into with any Company (or with the other Party on behalf of any Company).

(e)

[INTENTIONALLY OMITTED]

Execution Version

13.2	[INTENTIONALLY OMITTED]

14	Events of Default and Consequences

14.1	Events of Default

The following shall constitute an "Event of Default" in respect of a Party or its Affiliate holding Shares (the "Defaulting Party") for the purposes of this Agreement:

(a)

the Defaulting Party shall have failed to advance (or procure the advancing of) the amount of any Required Shareholder Funding (the "Default Amount") required to be advanced by the Defaulting Party in accordance with this Agreement on or before the expiry of the Funding Deadline specified in a Cash Call duly delivered in accordance with this Agreement and such default (a "Funding Default") shall not have been cured in accordance with Clause 14.4 below;

(b)

the Defaulting Party is a transferring Shareholder and has breached or otherwise failed to comply with any provisions of Clause 17 or of this Clause 14 and such breach or default is not remedied within a period of seven (7) days from the date of service of a default notice by the Non-Defaulting Party to the Defaulting Party, other than any breach of Clause 17.4 which shall constitute an Event of Default immediately upon its occurrence;

(c)

an Act of Insolvency shall have occurred in respect of the Defaulting Party or, if applicable, any member of the Defaulting Party's group that has guaranteed the obligations of the Defaulting Party or its Affiliates pursuant to this Agreement; or

(d)

the Defaulting Party shall have committed any breach (or series of breaches) of the provisions of this Agreement (other than as contemplated by paragraphs (a) to (c) above) and such breach constitutes or evidences a failure on the part of the Defaulting Party to comply with its obligations under this Agreement to an extent that has, or is likely to have, a Material Adverse Effect and such breach is not remedied within twenty eight (28) days of written notice thereof from the relevant Company or the Non-Defaulting Party to the Defaulting Party (a "Material Breach").

(e)

[INTENTIONALLY OMITTED].

(f)

[INTENTIONALLY OMITTED].

14.2	Consequences of Events of Default

The Project is an integrated project and, for the avoidance of doubt, the Parties agree that an Event of Default in respect of any Company shall be considered to be an Event of Default in respect of all Companies. If an Event of Default has occurred and is continuing in relation to the Defaulting Party then, without prejudice to the Defaulting Party's obligations under this Agreement or the remaining provisions of this Clause 14, upon written notice by the Non-Defaulting Party to the Defaulting Party:

(a)

if Ma'aden is the Non-Defaulting Party, it shall be entitled to purchase Alcoa's Transferable Interests in accordance with Clause 14.3 below. If Alcoa is the Non-Defaulting Party, it shall be entitled to sell its Transferable Interests to Ma'aden in accordance with Clause 14.5 below;

(b)

in the case of an Event of Default under Clause 14.1(b)-(d), the Defaulting Party shall, in addition to the consequences arising from the remaining sub-paragraphs of this Clause 14.2, not be entitled to any Distributions or to otherwise participate in the profits of any Company under this Agreement, the Articles of Association of any Company or otherwise during the period that such Event of Default subsists; or

Execution Version

(c)

in the case of a Funding Default, the consequences set out in Clause 14.4 shall apply in addition to this Clause 14.2.

(d)

[INTENTIONALLY OMITTED].

14.3	Transfer Upon Event of Default of Alcoa

(a)

In the case of an Event of Default of Alcoa, Ma'aden, as the Non-Defaulting Party, shall, without prejudice to any other rights or claims available to it, have the right to purchase, and require Alcoa to sell, Alcoa's Transferable Interests pursuant to Clause 14.2(a), in the following manner:

(i)

on the first day immediately following: the occurrence of the Event of Default under Clause 14.1(c); the expiry of the relevant cure period in the case of Events of Default under Clause 14.1(b) or (d); or, in the case of a Funding Default under Clause 14.1(a), immediately following the expiry of the Cure Period and subject to Clause 14.4(f)(ii); (in each case, the "Call Date"), if such circumstance shall continue to subsist, Alcoa shall be deemed to have offered to sell and to procure the sale by its Affiliates of all right, title and interest in all of Alcoa's Transferable Interests to Ma'aden upon and subject to the terms and conditions set out in this Clause 14;

(ii)

Ma'aden may, by notice in writing given to Alcoa and each Company not later than the forty fifth (45^th) day following the Call Date, elect to accept Alcoa's offer in respect of all (but not less than all) of Alcoa's Transferable Interests, failing which Ma'aden shall be deemed to have rejected such offer;

(iii)

provided that Ma'aden has accepted Alcoa's offer in respect of all (but not less than all) of Alcoa's Transferable Interests, Ma'aden shall purchase all of Alcoa's Transferable Interests, and Alcoa shall be obliged to sell, transfer and assign such Transferable Interests to Ma'aden on the Closing Date (as hereinafter defined) in the amounts stipulated under paragraph (b) below; and

(iv)

the completion of the purchase and sale of Alcoa's Transferable Interests shall take place on the date (the "Closing Date") which is ten (10) Business Days following the expiry of the forty five (45) day period referred to in sub-paragraph (ii) above, or such other date as may be agreed between the Parties.

(b)

If Ma'aden elects to accept Alcoa's offer to purchase its Transferable Interests, the purchase price for Alcoa's Transferable Interests shall be at a consideration equal to eighty five percent (85%) of the Fair Market Value of Alcoa's Transferable Interests at the date of transfer, as determined by the Valuers in accordance with the provisions of Clause 18 which provisions shall apply mutatis mutandis; and the Parties hereby acknowledge and agree that any discount contemplated by this paragraph (b) does not (and shall not be construed to) constitute a penalty imposed on Alcoa and that such discount reflects the Parties' genuine pre-estimate of the damages that Ma'aden would suffer in the circumstances contemplated by this Clause 14. In each case, any amount of accrued and unpaid Default Commission shall be deducted from the amounts otherwise payable to Alcoa. For the avoidance of doubt, the entry payment of eighty million US Dollars (US$80 million) paid by Alcoa to Ma'aden in respect of the opportunity to participate in the Project shall not be reimbursed in the event of any purchase of Alcoa's Transferable Interests pursuant to this Clause 14.3.

(c)

Execution Version

deducted by Ma'aden from the purchase price payable to Alcoa for the Transferable Interests in such manner as Ma'aden may determine acting reasonably (and Ma'aden shall then promptly pay such costs).

(d)

The Parties shall, and shall ensure that any of its Affiliates that are Shareholders shall, execute all such documentation and do all such other acts and things as may be necessary or desirable to give effect to this Clause 14.3.

(e)

Nothing in this Clause 14.3 shall be construed to require Ma'aden to exercise any of the above rights.

(f)

Any transfer under this Clause 14.3 shall have effect to transfer Alcoa's Transferable Interests free and clear of any Encumbrance, subject to the Financing Agreements.

14.4	Additional Consequences of a Funding Default

(a)

A relevant Company shall notify each Party promptly, but in any event within seven (7) days, of the occurrence of a Funding Default and of the subsequent making of any payments as to which such notice was given. Without prejudice to the aforesaid, the Non-Defaulting Party may also give notice of a Funding Default to the Defaulting Party. The notice given by the relevant Company, or in the absence thereof, the notice given by the Non-Defaulting Party, to the Defaulting Party shall constitute the "Default Notice".

(b)

To the extent that the relevant Company incurs any liabilities or losses as a direct result of a Funding Default and for so long as such Funding Default is continuing, then the Defaulting Party shall be liable to the Company for any such liabilities or losses.

(c)

Immediately upon occurrence of a Funding Default and for so long as a Funding Default is continuing, any amount of cash that would otherwise be payable by the relevant Company to a Defaulting Party (or any of its Affiliates that are Shareholders) as a Share Distribution shall from time to time be set-off against the obligations owed by such Defaulting Party in respect of such Funding Default. Any amounts retained by the Company as a result of such set-off shall be applied:

(i)

firstly, to pay any accrued and unpaid Default Commission owing by such Defaulting Party to the Company;

(ii)

second, to meet such Defaulting Party's obligations to advance Required Shareholder Funding; and

(iii)

the balance (if any) shall be paid to the Defaulting Party,

and the application of such funds shall be deemed to discharge in full the obligations of the relevant Company to the Defaulting Party in respect of any such Share Distribution.

(d)

From the date of the Default Notice and for a period of thirty (30) days thereafter (provided that the Funding Default is continuing during such period), the Non-Defaulting Party may elect to contribute the entire (and not part) Default Amount (which shall for the purposes of this Clause 14.4 include any accrued and unpaid Default Commission) to the relevant Company by way of Equity Subscriptions and, if applicable, Shareholder Loans, in accordance with the terms of the relevant Cash Call notice, by notice to the relevant Company and the Defaulting Party.

(e)

If the Non-Defaulting Party makes an election in accordance with paragraph (d) above, then:

Execution Version

(i)

the Non-Defaulting Party shall advance the Default Amount (including any accrued and unpaid Default Commission) within twenty (20) days after the date of the Non-Defaulting Party's notice to the relevant Company and the Defaulting Party confirming its election to contribute the Default Amount pursuant to paragraph (d) above; and

(ii)

the Defaulting Party shall have fourteen (14) days following the date of payment by the Non-Defaulting Party of the Default Amount (including any accrued and unpaid Default Commission), or thirty (30) days from the date of the Funding Default, whichever period ends later, during which to cure the Funding Default (the "Cure Period") by reimbursing the Non-Defaulting Party in respect of (i) the Default Amount (including any Default Commission paid by the Non-Defaulting Party) and (ii) the sum equal to the application of the Commission Rate on the Default Amount from the date of payment by the Non-Defaulting Party until the date of reimbursement by the Defaulting Party.

(f)

If, following expiry of the Cure Period, a Funding Default is continuing and has not been cured in accordance with sub-paragraph (g) below:

(i)

the Defaulting Party's Shareholder Percentage in respect of all the Companies (as it is intended that the Parties shall throughout the Joint Venture retain equivalent Shareholder Percentages in all Companies) shall be diluted and reduced by taking into account its shortfall in contributing Paid In Capital in respect of all the Companies and applying the formula set out in the definition of Shareholder Percentage; and the revised Shareholder Percentages of the Defaulting Party and the Non-Defaulting Party shall be verified and certified by the Auditors as the Shareholder Percentages of each Party for all such Companies with effect from the date of the expiry of the Cure Period;

(ii)

if the Non-Defaulting Party is Ma'aden, then Ma'aden shall have the right to terminate the Agreement and purchase all of Alcoa's Transferable Interests in accordance with Clause 14.3; and

(iii)

if the Non-Defaulting Party is Alcoa, Alcoa shall have the right to terminate the Agreement and sell all of its Transferable Interests to Ma'aden in accordance with Clause 14.5.

(g)

A Funding Default shall be cured if the Default Amount (together with all accrued and unpaid Default Commission thereon) shall have been paid, advanced or otherwise discharged during the Cure Period in full by one or more of the following means:

(i)

if the Default Amount (together with all accrued and unpaid Default Commission thereon) is paid by the Defaulting Party to the relevant Company in accordance with this Clause 14.4, in which case, cure of the Funding Default under sub-paragraphs (ii) and (iii) below would not be applicable; or

(ii)

the exercise by the relevant Company of its right to set-off Share Distributions against the obligations of the Defaulting Party in respect of such Funding Default pursuant to Clause 14.4(c); or

(iii)

if the Non-Defaulting Party shall have exercised its rights pursuant to Clause 14.4(e)(i) in respect of such Funding Default and shall have advanced the Default Amount to the relevant Company thereunder and the Defaulting Party shall have reimbursed the Non-Defaulting Party in respect of such Default Amount in accordance with Clause 14.4(e)(ii).

Execution Version

14.5	Ma'aden as the Defaulting Party

(a)

In the event of an Event of Default by Ma'aden, Alcoa shall, without prejudice to any other rights or claims available to it, have the right to require Ma'aden to purchase all of Alcoa's Transferable Interests pursuant to Clause 14.2(a), in the following manner:

(i)

Alcoa may, by notice in writing given to Ma'aden and the relevant Company not later than the thirtieth (30^th) day following: the occurrence of the Event of Default under Clause 14.1(c); the expiry of the cure period in the case of an Event of Default under Clause 14.1(b) or (d); or in the case of a Funding Default under Clause 14.1(a) immediately following the expiry of the Cure Period and pursuant to Clause 14.4(f)(iii), elect to sell all (but not less than all) of its Transferable Interests to Ma'aden; and

(ii)

Ma'aden shall purchase all of Alcoa's Transferable Interests, and Alcoa shall be obliged to sell, transfer and assign such Transferable Interests to Ma'aden on the date which is twenty (20) Business Days following the notice referred to in sub-paragraph (i) above, or such other date as may be agreed between the Parties, in the amounts stipulated under paragraph (b) below;

(b)

The purchase price for Alcoa's Transferable Interests shall be as follows:

(i)

[INTENTIONALLY OMITTED]

(ii)

[INTENTIONALLY OMITTED]

(iii)

at a consideration equal to one hundred percent (100%) of the Fair Market Value of Alcoa's Transferable Interests,

as determined (in the case of sub-paragraph (iii)) by the Valuers in accordance with the provisions of Clause 18 which provisions shall apply mutatis mutandis. In each case, any amount of accrued and unpaid Default Commission by Alcoa shall be deducted from the amounts otherwise payable to Alcoa. For the avoidance of doubt, the entry payment of eighty million US Dollars (US$80 million) paid by Alcoa to Ma'aden in respect of the opportunity to participate in the Project shall not be reimbursed in the event of any purchase of Alcoa's Transferable Interests pursuant to this Clause 14.5.

(c)

The costs of the Valuer incurred in connection with the determination of the Fair Market Value of Alcoa's Transferable Interests under sub-paragraph (b)(iii) above shall be paid promptly by Ma'aden upon receipt of an invoice therefor and in any event prior to the date referred to in Clause 14.5(a)(ii), failing which such costs may be added by Alcoa to the purchase price payable by Ma'aden for the Transferable Interests in such manner as Alcoa may determine acting reasonably (and Alcoa shall then promptly pay such costs).

(d)

The Parties shall, and shall ensure that any of their Affiliates that are Shareholders shall, execute all such documentation and do all such other acts and things as may be necessary or desirable to give effect to this Clause 14.5.

(e)

Nothing in this Clause 14.5 shall be construed to require Alcoa to exercise any of the above rights.

(f)

Any transfer under this Clause 14.5 shall have effect to transfer such Transferable Interests free and clear of any Encumbrance, subject to the Financing Agreements.

Execution Version

14.6	[INTENTIONALLY OMITTED]

14.7	Other Remedies

The rights, consequences and remedies as provided for in this Clause 14 shall be in addition to and not in substitution for any other remedies that may be available to a Shareholder hereunder arising pursuant to any default or failure by any Shareholder to comply with its obligations hereunder or an Event of Default or by operation of Applicable Laws (including, for the avoidance of doubt, the right of any Non-Defaulting Party to claim damages if it has suffered a loss). The exercise of such rights shall not relieve the Defaulting Party from any obligations accrued prior to the date on which the transfer(s) of Alcoa's Transferable Interests is effected, nor shall the exercise or failure to exercise such rights relieve the Defaulting Party from any liability for damages to any Non-Defaulting Party for breach of this Agreement.

15	[INTENTIONALLY OMITTED]

16	Termination and Expiry

16.1	Full Termination and Expiry

This Agreement shall remain in full force and effect until the earlier of:

(a)

the expiry of the Agreement pursuant to Clause 2.1;

(b)

the written agreement of the Parties that the Agreement be terminated;

(c)

the date upon which there is only one Shareholder in each Company (including following a transfer of all of Alcoa's Transferable Interests pursuant to Clause 14 or following a transfer to Ma'aden under Clause 17); or

(d)

termination pursuant to the exercise by a Party of a right to terminate the Agreement in accordance with its terms.

(e)

[INTENTIONALLY OMITTED].

16.2	Partial Termination

Without prejudice to Clause 16.1, this Agreement shall terminate as between a Party that transfers its Transferable Interests to the other Party or to a third party in accordance with this Agreement, and the other Parties (if any), on the relevant Transfer Date, provided that the party to which such Shares have been transferred has become (or was already) a party to this Agreement.

16.3	Consequences of Termination at the Expiry of the Term

Following termination of this Agreement pursuant to Clause 2.1, there shall be an orderly liquidation of the assets of each Company, following which each Company shall be dissolved.

16.4	Consequences following Termination

(a)

In the event of termination of this Agreement for any reason whatsoever, there shall be no restriction on Ma'aden continuing with the development of the Project (with or without an alternative joint venture partner) and Ma'aden shall be entitled to proceed with the Project, either alone or with other parties and shall be entitled to utilise for the purposes of the Project all Pre-Incorporation Materials and other documents and materials it has developed itself, or which have been jointly developed by the Parties, relevant Shareholders or the particular Company or otherwise provided by a Party for the purposes of the Project pursuant to the Agreement including, for the avoidance of doubt, all Intellectual Property and IP Information

Execution Version

in the same in accordance with Clause 26.4. Certain technology licence agreements have been entered into by the Companies with Alcoa and/or its Affiliates under which Alcoa and/or its Affiliates licence to the Companies certain Intellectual Property (including certain technologies) and provide technical support services in connection with the Project (the "Technology Licence Agreements" or "TLAs"). For the avoidance of doubt, unless terminated in accordance with their terms, any such TLAs shall remain in full force and effect notwithstanding any termination of this Agreement and the Companies shall be entitled to continue to use the Intellectual Property under such TLAs and Alcoa and its Affiliates shall continue to provide the technical support services in respect of the Project pursuant and subject to the terms of such TLAs. Subject to the terms of the TLAs, the Parties acknowledge and agree that the provisions of this Clause 16.4(a) shall apply in respect of the Rolling Mill and MRC and all references to the "Project" and "Company" in this Clause 16.4(a) shall be interpreted accordingly.

(b)

In the event of a termination of the Agreement for any reason other than for the default of Ma'aden pursuant to Clause 14.5, Alcoa shall, if requested by a Company provide such services as are specified in the technical services agreements entered into by the Companies with Alcoa and/or its Affiliates (the "Technical Services Agreements" or "TSAs") on the same terms as are set out in the TSAs and for a period of twelve (12) months following such termination or in respect of the TSAs, if earlier, the expiry or termination of the relevant TSA in accordance with its terms and in such a manner so as to facilitate an orderly handover of activities undertaken by Alcoa personnel engaged in the Project.

(c)

In the event of a termination of the Agreement due to a default of Ma'aden pursuant to Clause 14.5, Alcoa will have no obligation to provide the services specified in a TSA to any Company.

(d)

The Parties shall execute all such documentation and do all such other acts as may be necessary or desirable to give effect to this Clause 16.4.

16.5	Survival and Rights Unaffected

(a)

Any expiry or termination shall be without prejudice to the rights and obligations accrued as at such date.

(b)

Notwithstanding any termination or expiry of this Agreement, whether as to any Party or in its entirety, the following provisions shall survive such termination or expiry as to all Parties: Clauses 1 (Definitions and Interpretation), 13 (Entry Payment, Pre-Incorporation Costs and Transfer of Pre-Incorporation Materials), 16.4 (Consequences following Termination), 16.5 (Survival and Rights Unaffected), 21 (Governing Law etc), 22 (Confidentiality and Public Announcements), 23 (Notices) and 26 (General Provisions). The Parties shall be deemed to continue to be parties to the Agreement for such purposes only.

17	Sale or Transfer of Shares, Pledge

17.1	General Prohibitions

(a)

Unless permitted by this Clause 17 or with the prior written consent of Alcoa, neither Ma'aden nor any Affiliate of Ma'aden shall do, or agree to do, any of the following:

(i)

sell, transfer or otherwise dispose of, any of its Transferable Interests or any interest in any of its Transferable Interests;

(ii)

encumber any of its Transferable Interests or any interest in any of its Transferable Interests;

Execution Version

(iii)

enter into any agreement or arrangement in respect of the votes or other rights attached to any of its Transferable Interests; or

(iv)

enter into any agreement or arrangement to do any of the foregoing.

(b)

The Alcoa Affiliate that will hold Alcoa's Transferable Interests in MAC shall be directly or indirectly wholly legally and beneficially owned by Alcoa, and the Alcoa Affiliate that will hold its Transferable Interests in MBAC shall be directly or indirectly wholly legally and beneficially owned 60% (or more) by Alcoa, and 40% by Alumina Limited, a company listed on the Australian Stock Exchange with registered number ABN 85 004 820 419 ("Alumina Limited"), subject to the following provisions of this sub clause (b). Unless permitted by Clause 14 or this Clause 17 but subject to Clause 17.1(c) below, Alcoa shall not and shall procure that its Affiliates shall not, (notwithstanding the provisions of Clause 17.2) without the prior written consent of Ma'aden do, or agree to do, any of the following:

(i)

enter into any transaction or series of transactions which have the aim or effect of directly or indirectly selling, transferring or otherwise disposing of legal and/or beneficial interests in relation to the Transferable Interests to any person who is not directly or indirectly wholly legally and beneficially owned by Alcoa (or in the case of any Transferable Interests in MBAC 60% (or more) by Alcoa and 40% by Alumina Limited);

(ii)

enter into any agreement or arrangement in respect of the votes or other rights attached to any of its Transferable Interests to any person who is not directly or indirectly wholly legally and beneficially owned by Alcoa (or in the case of any Transferable Interests in MBAC 60% (or more) by Alcoa and 40% by Alumina Limited);

(iii)

enter into any agreement or arrangement to encumber any of its Transferable Interests or any interest in any of its Transferable Interests to any person who is not directly or indirectly wholly legally and beneficially owned by Alcoa (or in the case of any Transferable Interests in MBAC 60% (or more) by Alcoa and 40% by Alumina Limited); or

(iv)

enter into any agreement or arrangement to do any of the foregoing.

(c)

Notwithstanding the above, Alcoa shall, provided it has supplied Ma'aden in writing with sufficient information to identify the parties involved and all relevant material terms of such transaction thirty (30) days in advance of the consummation by Alcoa of any such transaction, be permitted to enter into a significant strategic joint venture or similar transaction involving all or a substantial portion of Alcoa's interests in the relevant business of bauxite mining and alumina refining, and/or aluminium smelting, as the case may be, provided that (i) the proportion of the revenues properly attributable to Alcoa's Transferable Interests in the Project is not material in comparison to the total revenues in respect of all of Alcoa's operations which are included within such transaction in the calendar year prior to such transaction; and (ii) such transaction is entered into only with a strategic partner rather than financial investors. For the purposes of this clause: a "strategic partner" is a person and/or group of persons who are, immediately prior to the date of any such transaction with Alcoa, engaged in the business of owning and operating bauxite mines and alumina refineries, and/or aluminium smelters, as the case may be, in each case, including operations outside the Kingdom: and the proportion of revenues shall not be considered to be material if it is less than the initial Shareholder Percentage of Alcoa.

Execution Version

17.2	Transfers to Affiliates

A Party or its Affiliate which is a Shareholder, may transfer, or procure the transfer of, all but not less than all of its Shares and all but not less than all of its Shareholder Loans together to an Affiliate, and the provisions of Clauses 17.4 to 17.7 shall not apply to such transfer, provided that:

(a)

the transferring Party gives not less than thirty (30) days' prior written notice of the transfer to the other Party;

(b)

if Ma'aden is the transferring Party, the Affiliate is and remains an Affiliate of Ma'aden, and if Alcoa or its Affiliate is the transferring Party, the Affiliate is and remains an Affiliate of Alcoa;

(c)

the transferring Party procures that the proposed transferee of any Shareholder Loans become a party to a Shareholder Loan Agreement with the relevant Company (and such Company shall, and the Party shall procure that the Company shall, promptly execute and deliver any Shareholder Loan Agreement presented to it by the transferring Party for such purpose);

(d)

if it ceases to be an Affiliate in accordance with Clause 17.2(b), the proposed transferee (and/or any subsequent transferee in a series of transfers to Affiliates) is under an obligation immediately to retransfer its Shares and/or Shareholder Loans, as the case may be, to the original transferring Party or another Affiliate of Ma'aden or of Alcoa, as the case may be; and

(e)

a guarantee is provided in substantially the form set out in Schedule 1 by Alcoa in respect of the obligations of such Affiliate, or by Ma'aden in respect of the obligations of its such Affiliate under this Clause 17.2 (but not, for the avoidance of doubt, in respect of a KSA Controlled Transferee under Clause 17.3).

17.3	Permitted Transfers

(a)

Notwithstanding the provisions of Clause 17.4, Ma'aden shall, at any time, be entitled to sell, transfer and assign (and may procure the sale, transfer and assignment by any of its Affiliates of) all of Ma'aden's right, title and interest in and to all Shares held by Ma'aden and all of the Shareholder Loans of Ma'aden to a person who is at the time of such sale, transfer and assignment, Controlled, directly or indirectly, by any Governmental Authority of the Kingdom ("KSA Controlled Transferee"). Ma'aden shall give not less than thirty (30) days' prior written notice to Alcoa of such a proposed transfer including details of the proposed KSA Controlled Transferee. Ma'aden shall procure that, as a condition to such transfer, the KSA Controlled Transferee shall agree to be bound by all the terms of this Agreement and shall execute an Adherence Agreement.

(b)

Alcoa shall give its consent to the sale, transfer and assignment under paragraph (a) above and, the provisions of Clauses 17.4 to 17.7 shall not apply to such sale, transfer and assignment.

17.4	Transfers of Shares

Other than as provided in Clause 17.2 and Clause 17.3 and subject to Clause 17.8, at any time after 1 October 2021 G, any Party on behalf of itself and any Affiliate that is a Shareholder (the "Selling Party") may transfer all but not less than all of its Shares and all of the Shareholder Loans held by such Party and its Affiliates (if applicable) to a third party ("Third Party Offeror") only if it receives an offer (the "Offer") from such Third Party Offeror which:

(i)

is a bona fide offer in writing;

Execution Version

(ii)

is irrevocable during the period of the Offer;

(iii)

is for cash consideration only; and

(iv)

contains all material terms and conditions (including the offer price (the "Offer Price") and the intended completion date of the Offer),

and in circumstances in which the Selling Party complies with the remaining provisions of this Clause 17.

17.5	Notice of Offers

(a)

If a Selling Party receives an Offer or Offers which it wishes to accept, it must immediately give written notice of such Offer(s) (the "Transfer Notice"), to the other Party (the "Remaining Party") giving details of the identity of the Third Party Offeror(s). The Selling Party is not required to provide the details of the terms and conditions of the Offer.

(b)

The Remaining Party shall within thirty (30) days of receipt of the Transfer Notice either approve the proposed Third Party Offeror(s) or object to any proposed Third Party Offeror(s) on reasonable grounds.

17.6	Notice of Right to Match the Offer

The Selling Party may not proceed with a sale to the approved Third Party Offeror without first giving written notice (the "Notice of the Right to Match the Offer") to the Remaining Party giving the Remaining Party the right to match the Offer (the "Right to Match the Offer"). This Notice of the Right to Match the Offer should include full details of all terms and conditions of the Offer, including the price, and a copy of the Offer.

17.7	Right of Remaining Party to Match the Offer

(a)

The period during which the Remaining Party has a Right to Match the Offer will last for thirty (30) days from and including the day on which the Notice of the Right to Match the Offer is received (the "Right to Match the Offer Period").

(b)

If the Remaining Party matches the Offer, then all of the Transferable Interests shall be transferred to the Remaining Party at the Offer Price, with such transaction closing within the period specified in Clause 17.9(a).

(c)

If the Remaining Party does not match the Offer, then the Selling Party may transfer all of its Transferable Interests to the Third Party Offeror pursuant to the Offer at a price which is not less, and on terms and conditions no less favourable to the Selling Party, than those set out in the Offer, within ninety (90) days from the end of the Right to Match the Offer Period. For the avoidance of doubt, if such transaction with the Third Party Offeror does not close in accordance with the terms of this sub-paragraph (c) within the 90-day period, the process must begin again with an Offer under Clause 17.4.

17.8	Transfer Requirements

All transfers of Transferable Interests pursuant to this Agreement shall be subject:

(i)

to the transfer being in compliance with Applicable Laws of the Kingdom;

(ii)

to the transfer when completed, not constituting or giving rise to a breach by the transferring Party or a Company of any Project Agreement (including any Financing Agreement) to which either of them is a party; nor constituting, with or without the passage of time, the giving of notice or the taking of other steps by or on behalf of the Senior Lenders, an actual or potential

Execution Version

default or event of default (howsoever defined) under such Project Agreement (including any Financing Agreement);

(iii)

to obtaining any approvals required from the competent authorities;

(iv)

to the proposed transferee and the persons Controlling it (whether directly or indirectly) being of good character and being qualified to hold shares in a limited liability company in the Kingdom under Applicable Laws of the Kingdom;

(v)

if the transferee is not already a Shareholder, to the execution by the transferee of an Adherence Agreement, no later than the Transfer Date;

(vi)

where the transferee is not an Affiliate of the transferor, and the transferee or the entities that Control it do not hold assets of substantially equivalent value to those held by the Selling Party or any person guaranteeing the obligations of the Selling Party hereunder, to the provision of a guarantee in substantially the form set out in Schedule 1 by a person Controlling such transferee which is of equivalent financial substance; and

(vii)

where any Shareholder Loan has been made by the transferor to a Company, to the assignment and novation of all the transferor's rights and obligations in respect of the Shareholder Loan to the transferee.

17.9	Completion of Transfer

The transfer of Transferable Interests pursuant to this Agreement shall be made on the following terms:

(a)

Completion of the transfer of the Transferable Interests shall take place on the Transfer Date, which shall be within ninety (90) days after the date of expiry of the Right to Match the Offer Period in the event of a transfer to the Remaining Party pursuant to Clause 17.7 and at such reasonable time and place as the Parties agree; and

(b)

Payment of the purchase price for the Transferable Interests will be due on the Transfer Date, unless otherwise agreed, and shall be paid to the account notified for such purpose by the transferee.

17.10

General

The Parties shall keep each Company informed, at all times, of the issue and contents of any notice(s) served pursuant to this Clause 17 and any election or acceptance relating to those notices.

17.11

Further Assurances; Sole Shareholder

The Parties shall take such action as may reasonably be required to give effect to any transfer of Shares permitted pursuant to this Clause 17 or under Clauses 14 or 15, including cooperating in obtaining approvals required from all relevant Governmental Authorities. If a Party that is entitled to acquire Shares pursuant to this Clause 17 would, as a result of such acquisition, become the only Shareholder in any Company, such Party shall have the right to designate an Affiliate to acquire a portion of the Shares which such Party is entitled to acquire.

17.12

Put And Call Option

(a)

Execution Version

this Clause 17. Ma'aden hereby grants to Alcoa an option (the "Call Option") to require Ma'aden to sell to Alcoa all of the Option Interests on the terms set out in this Clause 17.

(b)

The Put Option may only be exercised by Ma'aden and the Call Option may only be exercised by Alcoa within a period of six (6) months from 1 October 2021 G (the "Option Period") and shall be exercised simultaneously for all of the Companies. If the Put Option or the Call Option is not exercised during the Option Period, it shall lapse.

(c)

The Put Option shall be exercised by Ma'aden giving Alcoa written notice (the "Put Option Notice") which shall include:

(i)

a statement to the effect that Ma'aden is exercising the Put Option; and

(ii)

a signature by or on behalf of Ma'aden.

(d)

The Call Option shall be exercised by Alcoa giving Ma'aden written notice (the "Call Option Notice") which shall include:

(i)

a statement to the effect that Alcoa is exercising the Call Option; and

(ii)

a signature by or on behalf of Alcoa.

(e)

The Put Option and the Call Option may be exercised only in respect of all of the Option Interests.

(f)

All Distributions resolved or declared to be paid or made by the relevant Company in respect of the Option Interests by reference to a record date which falls on or before the date on which completion of the sale of the Option Interests under the Put Option (the "Put Option Completion Date") or the Call Option (the "Call Option Completion Date") (as the case may be) occurs shall belong to, and be payable to, Ma'aden. For the purposes of this Clause 17.12, "completion" shall be the date when the Parties sign before a notary the required shareholders resolutions authorising the amendment of each of the Companies' articles of association to reflect the transfer.

(g)

The consideration payable by Alcoa for the Option Interests (the "Option Consideration") shall be calculated in accordance with the provisions of Clause 17.13.

(h)

The Parties shall use their respective reasonable endeavours to:

(i)

procure that the Option Consideration shall be finally determined as quickly as possible consistent with the provisions of Clause 17.13; and

(ii)

no later than twelve (12) months following the determination of the Option Consideration, take all such action as may reasonably be required to give effect to any transfer of the Option Interests pursuant to this Clause 17.12, including cooperating in obtaining approvals required from all relevant Governmental Authorities.

(i)

On the Put Option Completion Date or Call Option Completion Date (as applicable), Alcoa shall pay or procure the payment of the Option Consideration to Ma'aden in cash to a bank account, the details of which Ma'aden shall provide in writing to Alcoa not less than three (3) Business Days prior to the Put Option Completion Date or the Call Option Completion Date (as applicable).

17.13

Put and Call Option Valuations

(a)

Option Consideration

Execution Version

The Parties shall act in good faith to determine the Option Consideration and, in doing so, shall follow the approach and apply the valuation methods set out below.

(b)

Valuation Panel

In the event that the Parties are unable to agree the Option Consideration within fifteen (15) days of the date of the Call Option Notice or the Put Option Notice (as the case may be), the Parties shall refer the valuation to a panel of independent experts with appropriate experience in the aluminium industry (each a "Valuer"). The panel shall consist of three Valuers, one of whom shall be appointed by each Party and the third of whom, who shall act as chairman of the panel, shall be jointly nominated by the two Valuers nominated by the Parties. Failing agreement as to the identity of the third Valuer within five (5) Business Days of being required to do so, such third Valuer shall be nominated by the International Centre for Expertise in accordance with the provisions for the appointment of experts under the Rules of Expertise of the International Chamber of Commerce (who shall be instructed to nominate only a Valuer experienced in valuing aluminium smelters, alumina refineries, bauxite mines and/or associated facilities, and shall have experience in, and relevant knowledge of the Kingdom and the GCC region).

(c)

Submission of Valuation

The Valuers shall be instructed to collectively submit a single Option Consideration valuation to the Parties within sixty (60) days of the appointment of the third Valuer (or such longer time as the Parties may agree) and such valuation shall be final and binding upon the Parties. The Option Consideration shall be determined on a fair value basis in accordance with Clause 17.13(d) below.

(d)

Valuation Approach

In valuing the Transferable Interests which are the subject of the Put Option or Call Option, as the case may be, the Valuers:

(i)

shall prepare the valuation by using the discounted cashflows methodology based on the net present value of cashflows attributable to the Option Interests which take into account the terms of the Project Agreements (including, for the avoidance of doubt, the Gas Allocation Letters, the Gas Supply Agreement (or any replacement of the same), the Energy Conversion Agreement entered into between Ma'aden and SWCC dated 10 October 2009 and other agreements with Government or publicly held entities) over the remaining life of the Project;

(ii)

shall consider cashflows from Expansions, taking into account any agreed Expansions;

(iii)

shall use an appropriate discount rate to compute the net present value, taking into account customary factors such as the industry, the geography, the Parties' familiarity with the operations, and other relevant factors;

(iv)

shall not apply any discount to the Option Interests as a result of the Option Interests not conferring Control over any Company or not conferring any minority protection rights;

(v)

may consult persons engaged in the marketing of aluminium who, in the Valuers' opinion, are experts in the making of price forecasts on a regular basis;

(vi)

may consult any other experts as the Valuers think fit;

Execution Version

(vii)

shall be entitled to rely in good faith upon the opinions of any experts so consulted; and

(viii)

shall consider any submissions as to the value of the Option Consideration which may be made to the Valuers by a Party within thirty (30) days of receipt by the Party of notice of the appointment of the third Valuer.

17.14

Disposals to Saudi public companies or public funds

Notwithstanding Clauses 17.1(a), 17.3 and 17.4, Ma'aden shall be entitled to sell, transfer and assign to one or more Saudi public companies or public funds or any combination of the same consistent with the provisions of Clause 17.8 (and may procure the sale, transfer and assignment by any of its Affiliates to the same), its rights, title and interest in and to Transferable Interests held by Ma'aden of up to 14.9% of the aggregate of the Transferable Interests of a Company. Such sale may take place at any time prior to the Put Option or Call Option being exercised by Ma'aden or Alcoa respectively pursuant to Clause 17.12. Ma'aden shall give not less than sixty (60) days' prior written notice to Alcoa of such a proposed transfer including details of the proposed Saudi public companies and /or public funds (the "Transferees"). Ma'aden shall procure that, as a condition of such transfer, the Transferees shall agree to be bound by all the terms of this Agreement and shall execute an Adherence Agreement, provided that the Transferees further agree that Ma'aden shall represent the Transferees in all dealings with Alcoa that arise in connection with the exercise of the Put Option or Call Option, as the case may be. The Parties agree that, for the purposes of determining Ma'aden's Shareholder Percentage in connection with its rights and obligations under Clause 5.4 (in respect of the Aluminium offtake), Ma'aden's Shareholder Percentage shall be deemed to include as between Ma'aden and Alcoa, any such Shares and Shareholder Loans held by such Saudi public companies or public funds. The Parties hereby agree to take any action which may reasonably be required in order to implement the provisions of this Clause 17.14 including (without limitation) cooperating as necessary to amend the relevant Company's Foreign Investment Licence, articles of association and commercial registration so as to formalize the transfer of the Shares.

18	Valuations

18.1	Fair Market Value

Where a provision of this Agreement calls for a determination of the "Fair Market Value" of Alcoa's Transferable Interests, the Parties shall act in good faith to make such determination and, in doing so, shall apply commonly accepted valuation methods.

18.2	Valuation Panel

In the event that the Parties are unable to agree the Fair Market Value of Alcoa's Transferable Interests within fifteen (15) days of the relevant Chairman requesting them to do so, the Parties shall refer the valuation to a panel of independent experts with appropriate experience in the aluminium industry (each a "Valuer"). The panel shall consist of three Valuers, one of whom shall be appointed by each Party and the third of whom, who shall act as chairman of the panel, shall be jointly nominated by the two Valuers nominated by the Parties. Failing agreement as to the identity of the third Valuer within five Business Days of being required to do so, such third Valuer shall be nominated by the International Centre for Expertise in accordance with the provisions for the appointment of experts under the Rules of Expertise of the International Chamber of Commerce (who shall be instructed to nominate only a Valuer experienced in valuing aluminium smelters, alumina refineries, bauxite mines and associated facilities).

Execution Version

18.3	Submission of Valuation

The Valuers shall be instructed to collectively submit a single Fair Market Value valuation to the Parties within thirty (30) days of the appointment of the third Valuer (or such longer time as the Parties may agree) and such valuation shall be final and binding upon the Parties. The Fair Market Value shall be determined on a fair market basis as between a willing and not anxious seller and a willing buyer on arms' length terms in accordance with Clause 18.4.

18.4	Valuation Approach

In valuing Alcoa's Transferable Interests, the Valuers:

(a)

shall prepare the valuation based on the net present value of cash flows attributable to Alcoa's Transferable Interests, taking into account the terms of the Project Agreements and the remaining life of the Project and all such other matters as the Valuers deem appropriate;

(b)

shall not apply any discount to Alcoa's Transferable Interests as a result of Alcoa's Shareholder Percentage not conferring Control over any Company;

(c)

[INTENTIONALLY OMITTED];

(d)

may consult persons engaged in the marketing of aluminium who, in the Valuers' opinion, are experts in the making of price forecasts on a regular basis;

(e)

may consult any other experts as the Valuers thinks fit;

(f)

shall be entitled to rely in good faith upon the opinions of any experts or other persons so consulted; and

(g)

shall consider any submissions as to the Fair Market Value which may be made to the Valuers by a Party within thirty (30) days of receipt by the Party of notice of the appointment of the third Valuer.

19	Assignment

Except as otherwise provided in this Agreement, no Party shall have the right to assign its rights and/or transfer its obligations under this Agreement to any other person and/or be released from its obligations under this Agreement unless, such Party is simultaneously transferring its Transferable Interests to such person in accordance with Clause 17.

20	Warranties

Each Party hereby warrants and undertakes to the other Party on its behalf and on behalf of any Affiliate being a Shareholder that:

(a)

it is duly incorporated and validly existing in accordance with the laws of the country and/or state under which it is incorporated;

(b)

(c)

its officers have the power and authority to act on its behalf in entering into this Agreement and any Shareholder Loan Agreements;

Execution Version

(d)

it is not insolvent, no petition has been filed relating to its insolvency and no proceedings have been issued for its dissolution or liquidation;

(e)

this Agreement has been duly executed and constitutes a valid, legal and binding obligation of such Party enforceable in accordance with its terms;

(f)

(g)

with respect to all activities contemplated under this Agreement, it has not, nor will it, or its (or its Affiliates') directors, officers or employees pay, offer, promise, or authorize the payment of money or anything of value, directly or indirectly, to a Government Official while knowing or having reason to believe that any portion of such exchange is for the purpose of:

(i)

influencing any act or decision of a Government Official in its official capacity, including the failure to perform an official function, in order to assist itself, the Companies or any other person in obtaining or retaining business, or directing business to any third party;

(ii)

securing an improper advantage;

(iii)

inducing a Government Official to use its influence to affect or influence any act or decision of a Governmental Authority in order to assist itself, the Companies or any other person in obtaining or retaining business, or directing business to any third party; or

(iv)

providing an unlawful personal gain or benefit, of financial or other value, to a Government Official.

21	Governing Law, Dispute Resolution and Language

21.1	Governing Law

This Agreement and any non-contractual obligations arising out of or in connection with it shall be governed by and construed and interpreted according to English law.

21.2	Reference to Senior Management

Prior to referring any dispute, difference, controversy, claim or question arising out of or in connection with this Agreement, including disputes, differences, claims, controversies or questions arising out of or in connection with (i) the creation, validity, effect, interpretation, performance or non-performance of, termination or the legal relationships established by, this Agreement; and (ii) any non-contractual obligations arising out of or in connection with this Agreement (for the purposes of this Clause 21 a "dispute"), other than proceedings to enforce an agreement reached between the Parties under this Clause 21.2, to arbitration pursuant to Clause 21.3 below, the Party (which shall include any Affiliate of such Party being a Shareholder) wishing to or considering making such reference shall notify in writing the other Party of the nature of the dispute and its background (for the purposes of this Clause 21, a "dispute notice") and its proposed basis for settlement of such dispute and the other Party shall respond to such dispute notice within fourteen (14) days of receipt, setting out any clarification it may feel relevant and including its proposed basis for settlement. The chief executive officers or presidents of each Party or their designees (the "Lead Representatives") shall then meet within thirty (30) days of the issue of the dispute notice to attempt a reconciliation and settlement of the dispute. No statement as to a Party's proposed basis for settlement nor any discussions or

Execution Version

communications between the Parties (or their ultimate parent companies) or the Lead Representatives pursuant to this Clause 21.2 (except for the terms of any agreed settlement between the Parties) may be relied upon or referred to in later court, arbitration, enforcement or appeal proceedings.

21.3	Dispute Resolution

(a)

Except as otherwise provided in Clause 9, Clause 17.13 and Clause 18 of this Agreement, if any dispute is not resolved pursuant to Clause 21.2 above within forty five (45) days of its referral to the Lead Representatives, such dispute shall be, if requested by any Party, referred to and finally settled by arbitration under the Rules of Arbitration of the International Chamber of Commerce as amended or substituted from time to time (the "ICC Rules" and the proceedings brought in accordance with this Clause 21.3, the "Arbitration"), which ICC Rules are deemed to be incorporated into this Agreement except to the extent expressly modified by this Clause 21.3. Arbitration shall be the exclusive method for resolution of the dispute and the determination of the arbitrators shall be final and binding. The Parties agree that they will give conclusive effect to the tribunal's award and that judgment thereon may be entered and enforced by any court of appropriate jurisdiction.

(b)

The tribunal shall consist of three (3) arbitrators, one of whom shall be nominated by each Party and the third of whom, who shall act as chairman, shall be jointly nominated by the two arbitrators nominated by the Parties. Failing agreement between the two Party-nominated arbitrators as to the identity of the third arbitrator within thirty (30) days of the nomination date of the second arbitrator, such third arbitrator shall be appointed by the International Court of Arbitration of the International Chamber of Commerce in accordance with the ICC Rules.

(c)

The seat of Arbitration shall be London, UK. The language to be used in the Arbitration shall be English, and any documents or portions of them presented at such Arbitration in a language other than English shall be accompanied by an English translation thereof. The tribunal shall decide such dispute in accordance with the substantive laws of England and Wales applicable hereto. The emergency arbitrator provisions in the ICC Rules shall not apply.

21.4	Continuing Obligations

If a dispute is referred to arbitration pursuant to Clause 21.3 above, unless the arbitrators rule otherwise, the obligations of the Parties shall not be suspended and the provisions of this Agreement shall continue to be carried out by the Parties.

21.5	Jurisdiction

(a)

(b)

Without resulting in the waiver of any remedy under this Agreement and in conjunction with each disputing Party's rights in accordance with Rule 25 of the ICC Rules, nothing in this Clause 21 shall preclude a disputing Party from seeking injunctive relief from a court pending the commencement of arbitral proceedings in accordance with Clause 21.3 (or pending the arbitral tribunal's determination of the merits of the dispute). The Parties hereby irrevocably submit to the non-exclusive jurisdiction of the courts of England for such injunctive relief and waive any objection or defence they may have to the venue or jurisdiction of such courts. Without limiting the generality of the foregoing, the Parties shall have the right to seek injunctive relief in any court of competent jurisdiction and the seeking of injunctive relief in

Execution Version

one or more jurisdiction shall not preclude a Party from seeking such relief in any other jurisdiction.

21.6	Process Agent

Each Party hereby irrevocably agrees to appoint Law Debenture Corporate Services Limited, with offices at the Amendment Effective Date at Fifth Floor, 100 Wood Street, London EC2V 7EX, England as its authorised agent on which any and all legal process may be served in any such action, suit or proceeding brought in the courts of England, including proceedings to enforce an arbitral award rendered pursuant to this Agreement, and to execute such documentation as may reasonably be required by such agent in connection with its appointment. Each Party agrees that service of process in respect of it upon such agent, together with written notice of such service given to it as provided in Clause 23.1, shall be deemed to be effective service of process upon it in any such action, suit or proceeding. Each Party agrees that the failure of such agent to give notice to it of any such service shall not impair or affect the validity of such service or any judgment rendered in any action, suit or proceeding based thereon. If for any reason such agent shall cease to be available to act as such, each such Party agrees to designate a new agent in the City of London, on the terms and for the purposes of this Clause. Nothing herein shall be deemed to limit the ability of any Party to serve any such legal process in any other manner, to obtain jurisdiction over any other Party or to bring any action, suit or proceeding against any other Party in such other jurisdictions, and in any other manner as may be permitted or required by Applicable Laws, including according to the relevant arbitration rules.

21.7

Language

This Agreement and the agreements contemplated herein are to be executed in Arabic and in English. The English language shall be the governing language despite translation into any other language(s), and the English versions shall prevail over any translated versions in the event of conflict. No translation, if any, of this Agreement into any other language shall be of any force or effect in the interpretation of this Agreement or in a determination of the intent of each Party.

22	Confidentiality and Public Announcements

22.1	Confidentiality

(a)

Each Party and any Affiliate being a Shareholder shall (i) ensure and shall cause each Company to ensure that the contents of this Agreement and any confidential information regarding the business, assets, customers, processes and methods of any other Party which it may learn in the course of negotiations for, or carrying out of this Agreement, is treated by it in strict confidence and (ii) only disclose such information to an Affiliate or such of its or its Affiliate's directors, officers, employees, professional advisers or consultants, or to any bank or financial institution from whom the Party or any Company is seeking finance, to the extent that such disclosure is necessary and (iii) not make use of such information for purposes other than the implementation of the Parties' cooperation hereunder unless such information:

(i)

is known to such Party prior to learning of it from the other;

(ii)

is obtained by such Party from a source other than the disclosing Party which source, (i) did not require such Party to hold such secrets or information in confidence and (ii) did not limit or restrict such Party's use thereof;

(iii)

becomes public knowledge other than through the fault of such Party;

(iv)

is required to be disclosed by any competent legal or regulatory authority;

Execution Version

(v)

is required to be disclosed by any internationally recognized stock exchange, provided that in any such case the Party shall provide prompt written notice to the other Party prior to making such disclosure and provide details of the proposed form, nature and purpose of such disclosure so that the disclosing Party may seek a protective order or other appropriate remedy or waive compliance with the provisions of this clause;

(vi)

is independently developed by such Party; or

(vii)

is permitted to be used or disclosed pursuant to the terms of a separate agreement between the disclosing Party and either the receiving Party or the relevant Company, in which case such use or disclosure shall be governed by the terms of the relevant agreement.

(b)

Each Party shall impose on its Affiliates, or such of its or its Affiliate's directors, officers, employees, professional advisers or consultants, or to any bank or financial institution from whom the Party is seeking finance, an equivalent obligation of confidentiality and shall obtain an undertaking of strict confidentiality from such Affiliates, or such of its or its Affiliate's directors, officers, employees, professional advisers or consultants, or financial institution from whom the Party is seeking finance, on the terms set out in this Clause 22.

(c)

Specific information disclosed shall not be deemed to be within the foregoing exceptions simply because such information is included in more general information within the said exceptions. In addition any combination of information, features, concepts, designs or process flows, shall not be automatically deemed to be within the said exceptions simply because the individual items of information, features, designs, concepts or process flows are within the said exceptions.

22.2	Disclosure of Information by Managers to Shareholders and Parties

A Manager shall be entitled to supply details of any business transacted at Board of Managers meetings or committee meetings and any other information obtained by him in his capacity as a Manager, to the Party or Shareholder by whom he was appointed or to the professional advisers of such Party or Shareholder, subject always to the provisions of this Clause 22.

22.3	Announcements

Each Party shall notify the other Party and the relevant Company of its intent to issue any press release or other public announcement with respect to the Company and its activities and, except as required by any competent legal or regulatory authority or any internationally recognized stock exchange, shall not issue any such release or announcement without the prior consent of the other Party and the Company, which consent shall not be unreasonably withheld. Such consent shall not, however, be required in order for a Party to include a reference to its ownership interest in the relevant Company in its annual reports and similar publications.

22.4

Survival

The Parties' obligations under this Clause 22 shall survive any termination or expiry of this Agreement for a period of five (5) years from the date of such termination or expiry and shall be without prejudice to any other confidentiality obligations imposed on the Parties or any Company by the Confidentiality & Non-Disclosure Agreement (in respect of the period prior to the signing of this Agreement) or any of the Project Agreements.

Execution Version

Notices

23.1

Notices

All notices, approvals, consents or other communications in connection with this Agreement shall be given in writing by an authorized officer of the Party (or an Affiliate being a Shareholder) providing any such notice, approval, consent of other communication and shall either be left at the address of the addressee which is specified below, sent by reputable international courier to the address of the addressee specified below, hand delivered to the address of the addressee which is specified below or sent by facsimile to the number specified below (in each case with an additional copy thereof sent simultaneously by electronic mail to the email addresses specified below), provided in each case that if the addressee notifies the other Party and the relevant Company of another address, facsimile number or email address then such other address, facsimile number or email address shall be deemed to replace that set out below.


For Ma'aden:	P.O. Box 68861 Riyadh 11537 Kingdom of Saudi Arabia Facsimile: +966 13 350 7005 Email: [Omitted] Attn.: Senior Vice President Aluminium SBU
With a copy to:	Ma'aden Legal Department P.O. Box 68861 Riyadh 11537 Kingdom of Saudi Arabia Facsimile: +966 1 874 8290 Email: notices@maaden.com.sa Attn: Chief Legal Counsel
For Alcoa and its Shareholder Affiliates:
	201 Isabella Street, Pittsburgh, PA 15212 United States of America Attn.: Chief Executive Officer
With a copy to:	Alcoa Corporation Legal Department 201 Isabella Street, Pittsburgh, PA 15212 United States of America Email: AlcoaLegalNotices@alcoa.com Attn: General Counsel

23.2

Effect

(a)

Unless a later time is specified in it, a notice, approval, consent or other communication takes effect from the time it is actually received or deemed to be received pursuant to this Clause 23.2. A couriered letter shall be deemed to have been received when delivered to the appropriate address. A notice sent by facsimile shall be deemed to have been received when a copy of such facsimile has been received, unless the receiving Party or the relevant Company can demonstrate that it did not receive a complete copy of the same. Facsimile notices shall be confirmed by an alternative method of giving notice. A Party receiving a notice by facsimile shall confirm receipt by returning a signed copy of such notice to the sender by hand or reputable international courier to the address which is specified above. For the avoidance of doubt, a notice, approval, consent or other communication given under this Agreement is not valid if sent by email only and will need to be served using the delivery methods set out in this Clause 23.

Execution Version

(b)

Where a notice is received during a day which is not a business day (in the place of receipt), or after 3pm local time it shall be deemed to have been received on the next business day (at such place of receipt) thereafter.

24	Further Assurances

24.1	Undertakings

(a)

Each Party and any Affiliate being a Shareholder agrees that it shall:

(i)

Act in good faith with regards to the other Party and to each Company and at all times render to the other Party and each Company true accounts, full information and truthful explanations regarding all matters relating to the affairs of each Company;

(ii)

in all cases treat each Company as a separate and independent profit centre and make every reasonable effort to conduct the affairs of each Company and its own dealings with such Company in a manner which gives effect to this Agreement and promotes the business and profitability of each Company; and

(iii)

in its capacity as a Shareholder, exercise its voting rights and endeavour to cause its representatives on the Board to exercise their voting rights in a manner which gives full force and effect to the terms and conditions of this Agreement, the Articles of Association, the Project Agreements and any other agreement referred to herein.

(b)

The Parties and any Affiliate being a Shareholder shall use their reasonable efforts to procure that the Articles of Association of a Company are from time to time duly amended, and any such amendment is duly registered with the Commercial Register, in accordance with Applicable Laws of the Kingdom if and whenever such amendment is reasonably necessary or desirable to give effect to, or to conform them to, the provisions of this Agreement, or any decision of the Board or the Shareholders, or the Project Agreements. Without limiting the generality of the foregoing, the Parties and any Affiliate being a Shareholder shall procure that the Articles of Association of each Company are amended:

(i)

to permit the Company to engage in any activity that may be contemplated or required by the terms of this Agreement or any Project Agreement or any decision of the Board of Managers or the Parties in accordance with this Agreement, including by means of expanding the purpose or objects of the Company;

(ii)

to give effect to any increase or decrease (or required increase or decrease) in the capital of the Company contemplated by this Agreement or any change (or required change) in the holdings of Shares in the capital of the Company as between the Shareholders required or contemplated by this Agreement;

(iii)

to give effect to the introduction of any new Shareholder that acquires (or intends to acquire) Shares in accordance with this Agreement.

24.2	Further Assurances

The Parties and any Affiliate being a Shareholder hereby agree to execute and deliver promptly all powers of attorney, consents and additional instruments, and to take any such further action which may reasonably be required in order to consummate the transactions anticipated by this Agreement, including without limitation any transfer of Shares in any Company pursuant to Clauses 14 or 17.

Execution Version

24.3	Business Conduct

The Parties agree that, in relation to the development of the Project and the subsequent business and operation of each Company, they shall (and shall procure that each Company shall):

(a)

develop, construct and operate the Project and operate the business in a manner that meets or exceeds internationally recognised standards, best practises, business conduct and ethics in accordance with internationally accepted commercial practices in the bauxite mining, alumina refining and aluminium smelting industries and without regard to the interests of any Party or any Affiliate;

(b)

without limiting the generality of paragraph (a) above, in order to ensure the long‑term sustainability of the Project, undertake maintenance and replacement capital expenditures relating to the Project in a manner that meets or exceeds internationally recognised standards and best practices in the bauxite mining, alumina refining and aluminium smelting industries; and

(c)

operate with objectives of low cost operations, continuous improvement and respect for people, consistent with best practices of the aluminium businesses.

25	Competing Businesses

25.1	Acknowledgement

The Parties acknowledge that the Parties and their Affiliates are engaged in, or may become engaged in, bauxite mining, alumina refining, and aluminium smelting and other businesses that may compete with the Project and rolling mill operations.

25.2	No Obligation to Offer

Subject to Clauses 5.10, 5.11 and 25.3, neither Party (nor any of its Affiliates) shall have any obligation to offer or provide to any Company or the other Party (or any such other Party's Affiliate) any option or other right or opportunity to pursue or acquire any right, title or interest in any corporate opportunity or business venture prior to pursuing such opportunity or venture for such Party's (or such Party's Affiliate's) own benefit.

25.3	Competing Projects Following Termination

In the event of termination of this Agreement prior to the fifth anniversary of the Commercial Production Date, other than where Ma'aden is the Defaulting Party in accordance with Clause 14.5, Alcoa shall not itself or through any Affiliate develop, construct, operate or otherwise implement or participate in whether itself, in partnership, joint venture or any such other relationship with any other person, in any project in any of the Kingdom, GCC Countries or Iran, which would compete with the Project, prior to the date that is two (2) years after termination of this Agreement. The foregoing restrictions shall not apply to any bauxite mining, alumina refining, aluminium smelting, rolling mill operations and other businesses that may compete with the Project (A) in which the Defaulting Party is engaged as of the date of termination of this Agreement; or (B) in which the Defaulting Party owns a direct or indirect interest of fifteen percent (15%) or less or otherwise with the prior written consent of Ma'aden.

26	General Provisions

26.1	Severability

Execution Version

invalidity, illegality or unenforceability shall not affect the other provisions or terms (or parts thereof) in that jurisdiction or the whole of the Agreement in any other jurisdiction, all of which shall remain in full force and effect. As regards the provision or term (or part thereof) which is or has been found to be invalid, illegal or unenforceable, the Parties shall negotiate in good faith in order to agree the terms of a mutually satisfactory provision to be substituted for the invalid, illegal or unenforceable provision and which as closely as possible validly gives effect to the Parties' intentions as expressed herein.

26.2

Waiver

The failure, delay or forbearance of any Party or any Affiliate being a Shareholder to insist upon, exercise or enforce any right or remedy conferred by this Agreement shall not be or be deemed to be or be construed as a waiver of the right or remedy or of any other rights or remedies nor shall such failure, delay or forbearance operate as a bar to the exercise or enforcement of the right or remedy at any time or times thereafter.

26.3	Compliance with Law and Permits

(a)

In performing its obligations under this Agreement each Party and any Affiliate being a Shareholder shall comply with (including without limitation giving all notices under and paying all fees required by) all laws applicable to such Party or Affiliate.

(b)

Without prejudice to the generality of this Clause 26.3, the Parties and any Affiliate being a Shareholder shall, and shall procure that each Company shall, comply with all Applicable Laws relating to the prohibition on the corruption of public officials.

(c)

Each Party and any Affiliate being a Shareholder shall obtain and maintain in effect all government licenses, permissions, consent, and approvals as it may be required to obtain in order to perform its obligations under this Agreement.

26.4	Intellectual Property

(a)

Subject to any provisions as to ownership of Intellectual Property under any of the Project Agreements (including the Smelter TTA and Smelter OSA), any rights to Intellectual Property which are developed by a Company during the course of a Company's activities under this Agreement shall belong to the Company.

(b)

The Parties, pursuant to the TLAs, have granted to the Companies a license to use Intellectual Property which is owned by the Parties but is required to implement the Project on the payment terms described therein.

(c)

In the event that this Agreement is terminated for any reason whatsoever, the Parties acknowledge that Ma'aden is entitled in accordance with Clause 16.4 to continue with the Project and utilise any Intellectual Property that has been provided by Alcoa to the Project or has been developed in the course of the Companies' activities under this Agreement. Accordingly, except to the extent that such Intellectual Property is subject to a separate intellectual property licence agreement entered into for value with the relevant Company, Alcoa hereby grants to Ma'aden and the Companies an irrevocable, royalty-free license to use, without the right to assign (other than to a project company), sublicense or otherwise transfer to a third party, any such intellectual Property not otherwise licensed thereafter solely in connection with the Project.

(d)

Execution Version

or, in respect of sub-paragraphs (ii) and (iii) below of Ma'aden, and information comprising or relating to such rights (the "IP Information"), including, without limitation:

(i)

ensuring that the Board of Managers, the President and the other officers and employees of a Company use commercially appropriate measures to protect and safeguard the IP Information at all times and comply with the provisions of Clause 22 and this Clause 26.4;

(ii)

using the IP Information provided to a Company or to Ma'aden under the Smelter TTA, only for the purposes for which it was licensed to the Company or Ma'aden (as the case may be);

(iii)

using the IP Information provided to a Company or to Ma'aden under the Smelter OSA, only for the purposes for which it was provided to such Company or Ma'aden (as the case may be) under the Smelter OSA;

(iv)

not disclosing any IP Information to any person, except for employees, suppliers, contractors, government agencies or financial institutions, who reasonably require information for the purposes related to the Project and who have agreed to be bound by the provisions of Clause 22 and this Clause 26.4;

(v)

not using any IP Information for the benefit of any third party; and

(vi)

in the event that a Company is compelled by judicial or administrative process or required by Applicable Law or any Governmental Authority to disclose any IP Information, seeking a protective order or other appropriate remedy to prevent such disclosure, only disclosing such portion of the IP Information that is required to be disclosed and using all reasonable efforts to obtain a protective order or other assurance that confidential treatment will be afforded to such IP Information.

26.5	Entire Agreement

This Agreement constitutes the complete and exclusive statement of the terms of the contract between the Parties and any Affiliate being a Shareholder (together with the Adherence Agreements) with reference to the subject matter hereof, and supersedes all prior agreements, promises, proposals, representations, understandings and negotiations, whether or not reduced to writing, between the Parties and any Affiliate being a Shareholder respecting the subject matter hereof. No statements or agreements, oral or written, made prior to or at the signing hereof shall vary or modify the written terms hereof (provided that this Clause shall not have effect to limit or excuse liability for any fraudulent act).

26.6	Improper Inducements

(a)

No Party or Affiliate being a Shareholder shall, and each Party and Affiliate being a Shareholder shall ensure that no Company shall, (in connection with the Company or its business) make any payment in violation of any Applicable Law.

(b)

Except for customary promotional material and occasional business entertainment limited in value in any instance to the reasonable cost of a business meal, no Party or Affiliate being a Shareholder (whether acting directly or indirectly or through any employee, officer, director or representative) shall promise, give, offer or accept, and warrants that it has not promised, given, offered or accepted, any money, fees, commissions, personal services, credit, gift, gratuity, thing of value or compensation of any kind, to or from any person including:

(i)

Any Party or its Affiliates;

Execution Version

(ii)

Any of their agents, independent contractors or subcontractors;

(iii)

The Government of the Kingdom;

(iv)

The employees of any of the foregoing,

for the purpose of improperly obtaining or rewarding favourable treatment in connection with this Agreement or any of the other agreements contemplated by this Agreement.

(c)

Any violation of this provision shall constitute a Material Breach of the Agreement which, without prejudice to any Party's right to enforce any other remedy provided by law, shall entitle that Party to terminate the Agreement in accordance with Clause 16.1(d).

26.7

Language

The English language shall be used and be the official language for written communications (including, but not limited to, the reporting of results of operations and forecasts of same) between and among the Parties, any Affiliate being a Shareholder and each Company and otherwise under this Agreement.

26.8	Amendments

No variation or amendment to this Agreement shall be effective unless in writing signed by duly authorised officers or representatives of each Party on behalf of itself and any Affiliate being a Shareholder.

26.9	No Partnership

Nothing contained or implied in this Agreement shall constitute or be deemed to constitute a partnership between the Parties or any Affiliates being Shareholders (or any of them) and none of the Parties (or an Affiliate of a Party being a Shareholder) shall have any authority to bind or commit any other Party in any way, save as expressly set out herein.

26.10

Priority of Documents

In the event of conflict or inconsistency between this Agreement and any of the Articles of Association, the terms and conditions of this Agreement shall prevail.

26.11

Waiver of Immunity

Each Party and any Affiliate being a Shareholder unconditionally and irrevocably agrees that the execution, delivery and performance by it of this Agreement constitutes private and commercial acts, and to the extent that a Party or Shareholder or any of its revenues, assets or properties shall be entitled, with respect to any proceeding relating to enforcement of this Agreement or any award thereunder at any time brought against such Party or Shareholder or any of its revenues, assets or properties, to any sovereign or other immunity from suit, from jurisdiction, from attachment prior to judgment, from attachment in aid of execution of a judgment, from execution of a judgment or from any other legal or judicial process or remedy, and to the extent that in any jurisdiction there shall be attributed such an immunity, such Party or Shareholder irrevocably agrees not to claim and irrevocably waives such immunity.

26.12

No Liability for Consequential Losses, etc.

Execution Version

this Agreement, whether out of any Event of Default, other breach of this Agreement, indemnity, any fault or negligence on the part of a Party or its Affiliates (or their respective employees) or otherwise.

Execution Version

IN WITNESS WHEREOF, each Party has caused this Agreement to be executed by its duly authorized representative as of the date first written above.

SAUDI ARABIAN MINING COMPANY (MA'ADEN)

By:

Signed:_________________________________

ALCOA CORPORATION

By:

Signed:_________________________________

EXHIBIT 10.3

Amendment and restatement of the

Aluminium Project Framework Shareholders Agreement

between

SAUDI ARABIAN MINING COMPANY (MA'ADEN)

and

ALCOA INC (ALCOA)

THIS AMENDMENT AND RESTATEMENT AGREEMENT (hereinafter referred to as the "Agreement"), is made and entered into on [ ] in the Hejerian calendar, corresponding to the [ ] day of [ ] [ ] in the Gregorian calendar, by and between:

(1)

SAUDI ARABIAN MINING COMPANY (MA'ADEN), a company organized under the laws and regulations of the Kingdom of Saudi Arabia with commercial registration No.1010164391, having its head office and address at PO Box 68861, Riyadh 11537, Kingdom of Saudi Arabia (together with its legal successors and permitted assigns, hereinafter referred to as "Ma'aden"); and

(2)

ALCOA INC., a corporation under the laws of the Commonwealth of Pennsylvania, USA, whose principal place of business is at 390 Park Avenue, New York, NY 1022, USA, (together with its legal successors and permitted assigns, hereinafter referred to as "Alcoa"),

(hereinafter jointly referred to as the "Parties" or individually as a "Party").

RECITALS

The Parties entered into the Original Agreement on 3/1/1431 H corresponding to the 20th day of December 2009G pursuant to which the Parties desired to enter into the Joint Venture in respect of the Project (as such terms are defined in the Original Agreement)

The Parties entered into a Signing Side Letter also on 3/1/1431 H corresponding to the 20th day of December 2009G clarifying certain matters in the Original Agreement

The Original Agreement was amended by the parties in the First Supplemental Agreement on 14/4/1431 H, corresponding to 30th March 2010 G

The Parties wish to reflect certain further amendments that have been agreed between them in relation to certain parts of the Original Agreement and have agreed to amend and restate certain parts of the Original Agreement on the terms set out in this Agreement as if such amendments had been included in the Original Agreement as from the date of execution of this Agreement by the Parties

NOW, IT IS HEREBY AGREED as follows:

1.DEFINITIONS AND INTERPRETATION

1.1

Definitions

In this Agreement:

"Original Agreement" means the Aluminium Project Framework Shareholders Agreement that was entered into on on 3/1/1431 H corresponding to the 20th day of December 2009G between the Parties as amended by the Signing Side Letter of even date (as such terms are defined in the Original Agreement).

"Entire Agreement" means the Original Agreement as modified by the Signing Side Letter and the First Supplemental Agreement;

"First Supplemental Agreement" means the First Supplemental Agreement entered into between the Parties on 14/4/1431H, corresponding to 30th March 2010 G

"Parties" means the signatories to this Amendment and Restatement Agreement; and

1.2

Incorporation of Definitions and Interpretation

Subject to clause 1.1, unless the context otherwise requires, words and expressions defined and references contained in the Original Agreement have the same meanings and construction in this Agreement.

AMENDMENT AND RESTATEMENT

2.1

Amendment and Restatement

The Parties hereby agree to amend and restate the Entire Agreement in the form as set out in Appendix l to this Agreement and that such amendments shall be deemed to take effect as from the date of execution of this Agreement as if such amendments had been included in the Entire Agreement from such time.

2.2

Continuing Provisions

The Provisions of the Entire Agreement shall, except where expressly amended and restated under the provisions of clause 2.1 of this Agreement, continue in full force and effect in accordance with their terms.

MISCELLANEOUS

3.1

Notices

Any notices to be given under or in connection with this Agreement shall be given in accordance with the requirements set out in Clause 23.1 of the Entire Agreement.

3.2

Counterparts

This Agreement may be executed in any number of counterparts and by the parties to it on separate counterparts and each such counterpart shall constitute an original of this Agreement but all of which together constitute one and the same instrument. This Agreement shall not be effective until each party has executed at least one counterpart.

3.3

Governing Law

This Amendment shall be governed by, construed and interpreted according to English law and, for the avoidance of doubt, the dispute mechanisms in Article 21 of the Entire Agreement shall apply to this Amendment as though incorporated herein.

IN WITNESS WHEREOF, each Party has caused this Agreement to be executed by its duly authorized representative as of the date first above written.

SUDI ARABIAN MINING COMPANY ALCOA INC (MA'ADEN)

By Khalid S Mudaifer – President By Ken Wisnoski

Signed /s/ Khalid S Mudaifer Signed /s/ Ken Wisnoski

APPENDIX 1

AMENDED AND RESTATED

ALUMINIUM PROJECT FRAMEWORK SHAREHOLDERS' AGREEMENT

between

SAUDI ARABIAN MINING COMPANY (MA'ADEN)

and

ALCOA INC.



CONTENTS
Clauses			Pages
1	DEFINITIONS AND INTERPRETATION		10
	1.1	Definitions	10
	1.2	Interpretation	21
	1.3	Third-Party Rights	21
2	Effective Date; Term of the Agreement; Parent Company Guarantee		21
	2.1	Effective Date	21
	2.2	Term of the Agreement	21
	2.3	Parent Company Guarantee	22
	Development Committee and Establishment of a particular Company		22
3	3.1	Development Committee	22
	3.2	Project Costs and Pre-Financing Budget	22
	3.3	Project Milestones	22
	3.4	Establishment of each Company	23
	3.5	Details of each Company	24
	3.6	Purpose	24
4	Share Capital, Funding by Shareholders and Financing Completion Date		25
	4.1	Share Capital as of Incorporation	25
	4.2	Required Shareholder Funding	26
	4.3	Shareholder Loans	26
	4.4	Form and Manner of Funding by Shareholders	27
	4.5	Default Commission Rate	27
	4.6	Limitations and Shareholder Funding	28
	4.7	Pledge	28
	4.8	Adherence Agreement	28
	4.9	Financing Completion Date	28
5	Responsibilities of the Parties		29
	5.1	Roles of the Parties	29
	5.2	Role of Ma’aden	29
	5.3	Role of Alcoa	29
	5.4	Aluminium Offtake	29
	5.5	Support for Downstream Industry and Priority to the Domestic Market	30
	5.6	Sales Agency Arrangements for Sales in the Kingdom	30
	5.7	Sales Agency Arrangements for Sales Outside the Kingdom	30


	5.8	Alumina Supply Arrangements and Excess Alumina	30
	5.9	Capacity Expansions	31
	5.10	Break-Off Projects	31
	5.11	Value Added Projects	33
	5.12	Responsibilities under the Gas Allocation Letter	33
	5.13	Provision of Information by Parties and the Companies	34
6	Transfer of Existing Project Assets; Project Agreements		35
	6.1	Transfer of Ma’aden Existing Project Assets	35
	6.2	Transfer of Alcoa Existing Project Assets	35
	6.3	Project Agreements signed post-Effective Date but before Company Formation	36
7	Shareholders’ Meetings		36
	7.1	Shareholders’ Meetings	36
	7.2	Supermajority Items	36
	7.3	Language	37
8	Board of Managers		37
	8.1	Appointment of Managers to each Company	37
	8.2	Removal of Managers	38
	8.3	Appointment of Senior Officers to each Company; Removal	38
	8.4	Meetings of the Board of Managers of each Company	40
	8.5	Voting Thresholds	40
	8.6	Resolutions	41
	8.7	Information	41
	8.8	Duties of Managers	41
	8.9	Company Policies	42
	8.10	Project Steering Committee	42
9	Deadlock		43
	9.1	Deadlock Arising	43
	9.2	Deadlock Referral	43
	9.3	Sole Remedies	44
10	Senior Debt Financing of the Project		44
	10.1	Support For Financing Plan	44
	10.2	Several Obligations	44
	10.3	No Further Liability	45
11	Distributions Policy; Taxes		46
	11.1	Distributions Policy	46
	11.2	Local Community Projects; Research and Development Programme	46
	11.3	Tax and Zakat	46


12	Accounting System, Books and Budgets		46
	12.1	Accounting System and Standards	46
	12.2	Language of Reporting to the Shareholders	47
	12.3	Financial Statements	47
	12.4	Books and Audit Rights	47
	12.5	Statutory Obligations	48
	12.6	Auditors	48
	12.7	Rights of Managers not Limited	48
	12.8	Annual and Special Budgets	48
	12.9	Emergency Funding	49
13	Entry Payment, Pre-Incorporation Costs and Transfer of Pre-Incorporation Materials		49
	13.1	Payment of Entry Payment and Pre-Incorporation Costs	49
	13.2	Reimbursement of Pre-Incorporation Costs	51
14	Events of Default and Consequences		51
	14.1	Events of Default	51
	14.2	Consequences of Events of Default	52
	14.3	Transfer Upon Event of Default of Alcoa	52
	14.4	Additional Consequences of a Funding Default	54
	14.5	Ma’aden as the Defaulting Party	55
	14.6	Default Prior to Incorporation of any Company	56
	14.7	Other Remedies	57
15	Failure to Achieve Financial Completion Date for Phase I by the Financing Longstop Date		57
	15.1	Compensation on Buy-Out	57
	15.2	Transfer on Financing Longstop Date	58
16	Termination and Expiry		59
	16.1	Full Termination and Expiry	59
	16.2	Partial Termination	60
	16.3	Consequences of Termination at the Expiry of the Term	60
	16.4	Consequences following Termination	60
	16.5	Survival and Rights Unaffected	61
17	Sale or Transfer of Shares, Pledge		61
	17.1	General Prohibitions	61
	17.2	Transfers to Affiliates	62
	173	Permitted Transfers	63
	17.4	Transfers of Shares	63
	17.5	Notice of Offers	63
	17.6	Notice of Right to Match the Offer	63


	17.7	Right of Remaining Party to Match the Offer	64
	17.8	Transfer Requirements	64
	17.9	Completion of Transfer	64
	17.10	General	65
	17.11	Further Assurances; Sole Shareholder	65
	17.12	Further Assurances; Sole Shareholder	65
	17.13	Further Assurances; Sole Shareholder	66
	17.14	Further Assurances; Sole Shareholder	67
18	Valuations		68
	18.1	Fair Market Value	68
	18.2	Valuation Panel	68
	18.3	Submission of Valuation	68
	18.4	Valuation Approach	68
19	Assignment		69
20	Warranties		69
21	Governing Law, Dispute Resolution and Language		70
	21.1	Governing Law	70
	21.2	Reference to Senior Management	70
	21.3	Dispute Resolution	70
	21.4	Continuing Obligations	71
	21.5	Jurisdiction	71
	21.6	Process Agent	71
	21.7	Language	72
22	Confidentiality and Public Announcements		72
	22.1	Confidentiality	72
	22.2	Disclosure of Information by Managers to Shareholders and Parties	73
	22.3	Announcements	73
	22.4	Survival	73
23	Notices		73
	23.1	Notices	73
	23.2	Effect	74
24	Further Assurances		74
	24.1	Undertakings	74
	24.2	Further Assurances	75
	24.3	Business Conduct	75
25	Competing Businesses		76
	25.1	Acknowledgement	76


	25.2	No Obligation to Offer	76
	25.3	Competing Projects Following Termination	76
26	General Provisions		76
	26.1	Severability	76
	26.2	Waiver	76
	26.3	Compliance with Law and Permits	77
	26.4	Intellectual Property	77
	26.5	Entire Agreement	78
	26.6	Improper Inducements	78
	26.7	Language	79
	26.8	Amendments	79
	26.9	No Partnership	79
	26.10	Priority of Documents	79
	26.11	Waiver of Immunity	79
	26.12	No Liability for Consequential Losses, etc	79



SCHEDULE 1
Parent Company Guarantee		81
SCHEDULE 2
Articles of Association of the Companies		87
SCHEDULE 3
Pre-Incorporation Costs		132
SCHEDULE 4
Gas Allocation Letter		133
SCHEDULE 5
Adherence Agreement		143
SCHEDULE 6
Cast House Users’ Agreement		145
SCHEDULE 7
Description of the Ras Az Zawr Complex		154
SCHEDULE 8
Description of the Mine		157
SCHEDULE 9
Project Agreements		159
SCHEDULE 10
Project Economics		166
	Part 1 - Estimate of Project Costs	166
	Part 2 - Pre-Financing Budget	168
	Part 3 - Project Model	168
SCHEDULE 11
Ma’aden Existing Project Assets		170
SCHEDULE 12
Alcoa Existing Project Assets		171
SCHEDULE 13
Pre-Incorporation Development Committee, Project Account and Steering Committees		172
	Part 1 - Development Committee Procedures	172
	Part 2 - Payment Mechanism	178
	Part 3 - Project Organisation (graphic depiction)	179
SCHEDULE 14
Alcoa Services		196
	Part 1 - Alcoa Services	196
	Part 2 - Technology Licenses and Support Services	201
SCHEDULE 15
Project Milestones		203

ALUMINIUM PROJECT FRAMEWORK AGREEMENT

THIS FRAMEWORK AGREEMENT (hereinafter referred to as the "Agreement"), is made and entered into on H, corresponding to the day of 2009 G, by and between:

(1)

(2)

(hereinafter jointly referred to as the "Parties" or individually as a "Party").

RECITALS:

(A)

WHEREAS the Parties desire to enter into a joint venture for the development, construction, ownership and operation of an integrated mine, refinery, smelter and rolling mill in the Kingdom of Saudi Arabia (the "Joint Venture"), initially to be developed for (i) the extraction of approximately 4,000,000 tpa of bauxite from the Al Ba'itha bauxite deposit in the Kingdom, (ii) the production of approximately 1,800,000 tpa of alumina and approximately 740,000 tpa of aluminium, and (iii) the production of approximately 250,000 tpa, which may be increased to 460,000 tpa of rolling mill product ((i), (ii) and (iii) hereinafter referred to as the "Project"), as well as potential future expansions of the Project;

(B)

WHEREAS Ma'aden and Alcoa entered into a Memorandum of Understanding dated 15 July 2009 (the "MOU") for the implementation of the Project.

(C)

WHEREAS the Parties fully accept the obligations set out in the Gas Allocation Letter, without condition or qualification;

(D)

WHEREAS the Parties intend to establish several limited liability companies in, and under the laws of, the Kingdom, one for the Mine and Refinery, one for the Smelter, and one for the Rolling Mill (each referred to as a "Company" and collectively as the "Companies") to implement the Joint Venture and to undertake the Project;

(E)

WHEREAS the Parties wish to operate the Companies to undertake the Project as an integrated joint venture for the purposes and on the terms set out in this Agreement;

(F)

WHEREAS the Parties have agreed that they will offtake the Aluminium in accordance with the principles set out in this Agreement and the terms of the Offtake Agreements; and

(G)

WHEREAS the Parties are developing the Estimate of Project Costs, the Pre-Financing Budget and the Project Model as described in Schedule 10.

NOW, THEREFORE, in consideration of the covenants contained herein, the Parties hereto agree as follows:

DEFINITIONS AND INTERPRETATION

1.1

Definitions

Whenever used herein and written in initial capital letters, the following terms shall have the meanings respectively defined:

"Act of Insolvency" means, in respect of any person, the occurrence of one or more of the following events (or any event analogous to the following events in any jurisdiction):

(a)

such person is unable, or admits inability, to pay its debts as they fall due in the ordinary course;

(b)

a moratorium is declared in respect of any indebtedness of such person; or

(c)

any corporate action, legal proceedings or other procedure or step is taken in relation to:

(i)

(ii)

a composition, compromise, assignment or arrangement with any creditor of such person; or

(iii)

and such action, legal proceedings or other procedure or step is acquiesced to by such person or shall result in the entry of an order for relief or shall remain undismissed for sixty (60) days;

"Additional Pre-Incorporation Costs" shall bear the meaning given in Clause 13.l(a):

"Additional Term" shall bear the meaning set out in Clause 2.2(b):

"Adherence Agreement" shall bear the meaning set out in Clause 4.8;

"Agent" means any person engaged to obtain business or regulatory advantage, develop customer relationships, or interface with Governmental Authorities and/or Government Officials;

"Agreed Form" means a form of document which has been agreed by or on behalf of the parties thereto and initialled by or on behalf of the parties thereto for the purposes of identification;

"Agreed Pre-Incorporation Costs" shall bear the meaning given in Clause 13.(a);

"Agreement" means this Framework Agreement;

"Alcoa" has the meaning set out in the parties clause;

"Alcoa Existing Project Assets" shall bear the meaning set out in Clause 6.2;

"Alcoa LOC" shall bear the meaning given in Clause 5.12(c):

"Alumina" means alumina produced by the Refinery as described in Clause 3.6(b)(ii):

"Aluminium" means aluminium produced by the Smelter (and does not include the products of the Rolling Mill) as described in Clause 3.6(b)(iii);

"Ancillary Agreements" means the agreements set out in Part 1 of Schedule 9 and any other agreements that the Parties may agree to identify as Ancillary Agreements from time to time;

"Annual Programme and Budget" shall bear the meaning set out in Clause 12.8(a);

"Articles of Association" means the articles of association of a particular Company in effect from time to time;

"Base Case Model" means the base case financial model for each of the Phases which is to be developed and approved by the Parties or, following incorporation of a particular Company, the Board of Managers of that Company by the milestone dates therefor set out in Schedule 15, as the same may be amended, modified, implemented or replaced from time to time in accordance with this Agreement;

"Bauxite" means bauxite extracted from the Mine as described in Clause 3.6;

"Board of Managers" or "Board" means the board of managers from time to time of a particular Company appointed in accordance with this Agreement and the Articles of Association;

"Break-Off Project" shall bear the meaning set out in Clause 5.10(a);

"Break-Off Project Notice" shall bear the meaning set out in Clause 5.10(a);

"Break-Off Right" shall bear the meaning set out in Clause 5.10(a);

"Break-Off Project Company" shall bear the meaning set out in Clause 5.10(a);

"Business Day" means any day on which banks in the Kingdom and New York, U.S.A. are generally open for business and on which instructions to transfer same-day funds can be executed;

"Calculation Date" shall bear the meaning set out in Clause 13.l(a):

"Call Date" shall bear the meaning set out in Clause 14.3(a)(i);

"Cast House" means the casting facilities owned and operated by the Smelter, in accordance with the Cast House Users' Agreement substantially in the form of Schedule 6.

"Chairman" means the chairman of the relevant Board of Managers;

"Closing Date" shall bear the meaning set out in Clause 14.3(a)(iv);

"Commercial Production Date" means the later of, (a) in respect of the Mine, the Refinery and the Smelter, the last day of the period of the first three (3) months of continuous and stable operations of each of the Mine, the Refinery and the Smelter at not less than ninety percent (90%) capacity, as determined by the Parties on written advice from each relevant Board of Managers; and (b) in respect of the Rolling Mill, after all major pieces of equipment and all instrumentation and systems related to process and quality control successfully complete acceptance testing, the date at which the first customer has given acceptance of qualification for supply of beverage can stock, provided that for the purpose of Clauses 8.5(b)(iv), l 2.3(d)(iii) and l 8.4(c) it shall mean the above date applicable to the relevant Company;

"Commercial Register" means the commercial register at the Ministry;

"Commercial Registration" means registration of a particular Company on the Commercial Register;

"Commission Rate" means a commission rate which is calculated as being equivalent to:

(1)

(2)

(3)

if none or only one of the banks referred to in paragraph (2) above are offering rates for deposits on the terms referred to in that paragraph, the rate per annum quoted by such bank as the Party who does not owe such commission in consultation with the Party that owes such commission may select from time to time at which deposits in US Dollars for one month are being offered by such bank to prime banks in the London interbank market at or about l 1.00 a.m. (London time) on the first London Banking Day of each month;

"Commitment Date" shall bear the meaning set out in Clause 3.3(b):

"Companies11 and "Company" shall each bear the meaning set out in Recital D;

"Company Law" means the Saudi Arabian Regulations for Companies, Royal Decree No. M/6 dated 22/3/1385H, as amended from time to time;

"Company Policies" shall bear the meaning set out in Clause 8.9;

"Completion Agreements" means any and all completion debt service undertakings and/or obligations to fund construction cost overruns up to an agreed maximum amount granted by the Parties or members of their respective groups for the benefit of Senior Lenders in connection with the Senior Debt for the Project;

"Complex" means the manufacturing facility to be constructed by the Companies for the production of the Products, at Ras Az Zawr in the Kingdom, including the Refinery, Smelter and Rolling Mill together with certain related facilities to be owned by each relevant Company, as further described and defined in Schedule 7:

"Confidentiality & Non-Disclosure Agreement" means the confidentiality and non-disclosure agreement dated 26/4/1430 H, corresponding to 22/4/2009 G, between Ma'aden and Alcoa;

"Construction Agreement" means (i) any engineering, procurement and construction contract entered into by a particular Company in respect of any material component of the Project or any relevant Expansion, (ii) any engineering, procurement and construction management (EPCM) contract entered into by a particular Company in respect of any material component of the Project or any relevant Expansion or (iii) any contract, agreement or arrangement substantially similar to the foregoing;

"Control" shall mean in relation to any non-natural person (the "First Person"), the right of another person or persons acting together, whether in law or in fact (including by way of contract), to secure by means of the holding of shares bearing fifty percent (50%) or more of the voting rights attaching to all the shares in the First Person, or by having the power to control the composition of the board of managers/directors or other governing body of the First Person, that all or a substantial proportion of the affairs of the First Person are conducted in accordance with the wishes of that person or persons acting together, and the expressions "Controls" or "Controlled" shall be construed accordingly;

"Cure Period" shall bear the meaning set out in Clause 14.4(e)(ii):

"Deadlock" shall bear the meaning set out in Clause 9.1(a):

"Deadlock Committee" shall bear the meaning set out in Clause 9.2(b)(i):

"Deadlock Referral Notice" shall bear the meaning set out in Clause 9.2(a):

"Deadlock Resolution Procedure" shall bear the meaning set out in Clause 9.2(b):

"Default Amount" shall bear the meaning set out in Clause 14.1(a);

"Default Commission" shall bear the meaning set out in Clause 4.5;

"Default Notice" shall bear the meaning set out in Clause 14.4(a);

"Defaulting Party" shall bear the meaning set out in Clause 14.1;

"Development Committee" shall bear the meaning set out in Clause 3.1;

"Development Committee Funding Call" shall bear the meaning set out in Clause 4.2(a);

Shareholders or any of that Shareholder's Affiliates (other than pursuant to the terms of any Project Agreement);

"DZIT" means the Department of Zakat and Income Tax of the Kingdom;

"EBIT" means earnings before interest and taxes;

"Effective Date" shall mean the date determined in accordance with Clause 2.1;

"Encumbrance" means any interest or equity of any person (including any right to acquire, option or right of pre emption) and any mortgage, charge, pledge, lien (other than liens arising by operation of law and securing indebtedness arising in the ordinary course of business not more than seven (7) days overdue), assignment, hypothecation or other priority interest, deferred purchase, title retention, rental, hire purchase, conditional sale, trust, leasing, sale and repurchase and sale and leaseback arrangements, rights of set off and any other agreement or arrangement whatsoever having the same commercial or economic effect as security (including any hold back or "flawed asset" arrangement) over or in any property, asset or right of whatsoever nature and including any agreement for any of the foregoing;

"Entry Payment" shall bear the meaning set out in Clause 13.1(b):

"Equity Subscription" means the subscription by the Parties (or any of them) directly or through any of their respective Affiliates for additional Shares on the basis of a subscription price of ten thousand Saudi Riyals (SR10,000) per Share, or such other basis as may be approved by the relevant Board in accordance with this Agreement and the Applicable Laws of the Kingdom;

"Estimate of Project Costs" means the Parties' estimate as at the Effective Date of the Project Costs, as may be amended from time to time by mutual agreement of the Parties, as more fully described in Part 1 of Schedule 10 and which shall be superseded by the Project Budget;

"Event of Default" shall bear the meaning set out in Clause 14.1;

"Expansion" shall bear the meaning set out in Clause 5.9(a);

"Fair Market Value" shall bear the meaning set out in Clause 18.1;

"Financial Close" means the date on which all conditions precedent to first draw down under the Financing Agreements for the relevant Phase of the Project have been satisfied or, if capable of waiver, waived;

"Financial Year" means the financial year of a particular Company from January 1 to December 31 each year;

"Financing Completion Date" shall mean the date on which the Financing Agreements are signed on behalf of each relevant Company and the Senior Lenders for the relevant Phase;

"Financing Longstop Date" means 31 December 2010 being the date by which the Parties require the Financing Completion Date for Phase I to have occurred as may be extended in accordance with Clause 15.1(a);

"Financing Plan" means the financing plan to be developed by the Parties for each Phase and which is intended to be approved by the Parties by the milestone date therefor set out in Schedule 15;

"Foreign Investment Licence" means the foreign investment licence issued by SAGIA authorizing the formation of a particular Company, as the same may be amended from time to time;

"Free Cash" in respect of each relevant Financial Year, means (i) the net profit after allowing for Income Tax and Zakat of a particular Company for such Financial Year as reflected in the audited financial statements of that Company for such Financial Year, (ii) plus depreciation and amortization, (iii) plus adjustments for movement between opening and closing working capital, (iv) less amounts disbursed in the Financial Year on account of capital expenditures, (v) less amounts paid by that Company in respect of such Financial Year pursuant to Clause 11.3, and (vi) less amounts paid or reserved for repayment of debt, (vii) plus cumulative undistributed Free Cash from previous Financial Years;

"Funding Deadline" shall bear the meaning set out in Clause 4.4(a)(ii);

"Funding Default" shall bear the meaning set out in Clause 14.1(a);

"Gas Allocation Letter" means the gas allocation letter dated 28/10/1430 H, corresponding to 17/10/2009 G, reference 3157/P/F, as may be amended from time to time, in respect of the Project from Saudi Aramco (based on the authorisation of the Ministry of Petroleum) to Ma'aden and SWCC, a copy of the current version of which is attached at Schedule 4;

"GCC countries" means Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates and any other country which may be designated as a Gulf Cooperative Country from time to time;

"Government Official" means an employee, officer or representative of, or any person otherwise acting in an official capacity for or on behalf of a Governmental Authority;

"IFRS" shall bear the meaning set out in Clause 12.1;

"Initial Term" shall bear the meaning set out in Clause 2.2(a);

"IP Information" shall bear the meaning set out in Clause 26.4(d):

"Joint Venture" shall bear the meaning set out in Recital A;

"Kingdom" means the Kingdom of Saudi Arabia;

"KSA Controlled Transferee" shall bear the meaning set out in Clause 17.3(a):

"LME" means the London Metals Exchange;

"London Banking Day" means any day on which banks in London, England are generally open for business;

"Ma'aden" has the meaning set out in the parties clause;

"Ma'aden Existing Project Assets" shall bear the meaning set out in Clause 6.l(a):

"Ma'aden LOC" shall bear the meaning given in Clause 5.12(a):

"Manager" means a member from time to time of the relevant Board of Managers;

"Material Breach" shall bear the meaning set out in Clause 14. l(d);

"Mine" means the Al Ba'itha mine in the Kingdom for extracting approximately 4,000,000 tpa of bauxite as more fully described in Schedule 8. as modified pursuant to any Expansion that may occur in accordance with this Agreement;

"Mining & Refining Company" shall bear the meaning set out in Clause 3.5 (c);

"Mining Licenses" means the mining and quarrying licenses in respect of the Mine referred to in Schedule 8 and included in Schedule 11;

"Ministry" means the Ministry of Commerce and Industry of the Kingdom;

"Ministry of Petroleum" means the Ministry of Petroleum and Mineral Resources of the Kingdom;

"MOU" shall bear the meaning set out in Recital B;

"Non-Defaulting Party" means the Party who is not the Defaulting Party;

"Notice of the Right to Match the Offer" shall bear the meaning set out in Clause 17.6:

"NTP for Phase l" means an irrevocable written notice to proceed in full or substantially in full with construction or similar steps given by the relevant Company pursuant to the Construction Agreements in respect of Phase 1 in accordance with Clause 3.3;

"Offer" shall bear the meaning set out in Clause 17.4;

"Offtake Agreements" means the offtake agreements in the Agreed Form in respect of Aluminium and the Excess Alumina to be entered into by the relevant Companies with each of the Parties;

"Other Project Agreements" means the Project Agreements set out in Part 2 of Schedule 9;

"Phase" means Phase 1 or Phase 2, as the case may be and "Phases" means both Phase 1 and Phase 2;

"Phase l" means (following the Gate 3 Review) the design, construction and operation of the Smelter and the Rolling Mill;

"Phase 2" means (following the Gate 3 Review) the design, construction and operation of the Mine and the Refinery;

"Pre-Financing Budget" means the development budget for the Project detailing the Project Costs which the Parties have incurred and estimate will be likely to be incurred on the Project up to Financial Close for each Phase, including an appropriate level of contingency, as attached in Part 2 of Schedule 10;

"Pre-Incorporation Costs" means the aggregate of the costs properly incurred by a Party prior to the incorporation of each Company in accordance with Clause 13;

"President" means the president of a particular Company as appointed in accordance with Clause 8.3(a);

"Product" or "Products" means Alumina, Aluminium and Rolling Mill products produced at the Complex as described in Clause 3.6;

"Project" shall bear the meaning set out in Recital A;

"Project Account" means the joint bank account set up by the Parties for the purposes of funding Project costs approved by the Parties through the Development Committee prior to the incorporation of each particular Company and appointment of the Board of such Company;

"Project Agreements" means the agreements entered into or to be entered into by a particular Company and/or the Parties and/or either of the Parties (on behalf of that Company) in connection with the Project, with the inclusion of the Anci11ary Agreements, the Other Project Agreements, the Financing Agreements and any other agreements which are identified as Project Agreements in accordance with the terms of this Agreement;

"Project Model" means the financial model for the Project at the Effective Date referred to in Part 3 of Schedule 10 from which the Base Case Model will be developed by the Parties;

"Project Steering Committee" shall bear the meaning set out in Clause 8.10;

"Proposed Resolution" shall bear the meaning set out in Clause 9.l(a);

"Ras Az Zawr Site" means that portion of the industrial area at Ras Az Zawr as described in Schedule 7;

"Refinery" means the refinery to be constructed in Ras Az Zawr in the Kingdom initially to produce approximately 1,800,000 tpa of alumina, as more fully described in Schedule 7, as modified pursuant any Expansion that may take place in accordance with this Agreement;

"Remaining Party(s)" shall bear the meaning set out in Clause 17.5;

"Required Shareholder Funding" shall bear the meaning set out in Clause 4.2;

"Right to Match the Offer Period" shall bear the meaning set out in Clause 17.7(a):

"Rolling Company" shall bear the meaning set out in Clause 3.5 (c);

"Rolling Mill" means the rolling mill to be constructed at Ras Az Zawr in the Kingdom initially to produce approximately 250,000 tpa, which may be increased to 460,000 tpa of rolling mill product, as more fully described in Schedule 7. as modified pursuant to any Expansion that may take place in accordance with this Agreement;

"SAGIA" means the Saudi Arabian General Investment Authority;

"Saudi Riyal" or "SR" means the lawful currency of the Kingdom;

"Security Interest" shall bear the meaning set out in Clause 4.7;

"Selling Party" shall bear the meaning set out in Clause 17.4;

"Senior Debt" means the financing provided by the Senior Lenders for the Project;

"Senior Officers" means the President and other senior officers of a particular Company as set out in Clause 8.3(a);

"Share" means any share of SRI0,000 each in the capital of any Company, and "Shareholding"

shall be construed accordingly;

"Share Capital" means the capital which constitutes the Paid In Capital from time to time of a Company as set out in its Articles of Association;

"Shared Services Agreement" shall have the meaning set out in Clause 5.10(b):

"Shareholder" means any person directly holding Shares from time to time in accordance with the terms of this Agreement;

"Shareholder Loan" means a subordinated interest free loan by a Shareholder or its Affiliate to a Company pursuant to a Shareholder Loan Agreement;

"Shareholder Loan Agreements" shall bear the meaning set out in Clause 4.3;

"Smelter" means the smelter to be constructed in Ras Az Zawr in the Kingdom initially to produce approximately 740,000 tpa of aluminium, as more fully described in Schedule 7. as modified pursuant any Expansion that may take place in accordance with this Agreement;

"Smelter Technology Transfer Agreement" or "Smelter TT A" means the agreement for the licensing of certain of Aluminium Pechiney's Intellectual Property in aluminium smelting technologies and provision of related services to a particular Company, as more fully described in Part 2 of Schedule 9;

"Smelting Company" shall bear the meaning set out in Clause 3.5 (c):

"SOCPA" shall bear the meaning set out in Clause 12.1;

"Special Programme and Budget" shall bear the meaning set out in Clause 12.8(a);

"SWCC" means the Saline Water Conversion Corporation in the Kingdom;

"Transferable Interests" means, in respect of any Party, all Shares and Shareholder Loans held by such Party and its Affiliates;

"Transfer Notice" shall bear the meaning set out in Clause 17.5;

"US Dollar" or "US$" shall mean the lawful currency of the United States of America;

"Value Added Project" means any capital investment project to be implemented after the date of this Agreement and which is intended to be located within the Kingdom which relates to

(a)downstream add-on products which could be produced using outputs generated by the Project (for the avoidance of doubt, not including the Rolling Mill or any Expansions thereto) or

(b)

upstream inputs used in the Project (for the avoidance of doubt, not including the Refinery or any Expansions thereto);

"Valuer" shall bear the meaning set out in Clause 18.2; and

"year", "month", "week" and "day" mean a calendar year, calendar week. calendar month and a calendar day respectively of the Gregorian calendar.

1.2

Interpretation

In this Agreement:

(a)

References to statutory provisions shall be construed as references to those provisions as respectively amended or re•enacted or as their application is modified from time to time by other provisions (whether before or after the date hereof).

(b)

(c)

References to any document (including this Agreement) are references to that document as amended, consolidated, supplemented, novated or replaced from time to time.

(d)

Headings are inserted for convenience only and shall not affect construction.

(e)

References to the Shareholders include their respective successors and permitted assigns.

(f)

References to persons shall include any individual, any form of body corporate, unincorporated association, firm, partnership, joint venture, consortium, association, organization or trust (in each case whether or not having a separate legal personality).

(g)

The word "include" and its derivatives shall be deemed to include the proviso that it is "without limitation".

(h)

The masculine gender shall include the feminine and neuter and the singular number shall include the plural, and vice versa.

1.3

Third Party Rights

Except insofar as this Agreement expressly provides that a third party may in his own right enforce a term of this Agreement, a person who is not a party to this Agreement has no right to rely upon or enforce any term of this Agreement.

Effective Date; Term of the Agreement; Parent Company Guarantee

Effective Date

2.1

This Agreement shall be effective as of the date of execution of this Agreement by both Parties (the "Effective Date").

2.2

Term of the Agreement

(a)

The term of this Agreement and the Joint Venture shall be from the Effective Date until thirty (30) years after the date that the last of the three Companies is registered in the Commercial Register (the "Initial Term").

(b)

At the expiry of the Initial Term, this Agreement shall be automatically renewed for an additional term of twenty (20) years on the same terms and conditions, unless the Parties agree otherwise at least two (2) years prior to the expiry of the Initial Term or unless terminated earlier in accordance with this Agreement ("Additional Term").

(c)

The Parties may agree to extend the term of this Agreement and the Joint Venture beyond the end of the Additional Term, by successive ten ( l0) year periods, by mutual agreement of the Shareholders at least five (5) years prior to expiry of the then current term

(d)

If the Parties are unable to agree on an extension of the term of this Agreement and the Joint Venture pursuant to paragraph (c) above, prior to a liquidation of the Companies

pursuant to the provisions of Clause 16.3, the Parties will seek to negotiate a purchase by one Party of the other Party's Transferable Interests at a Fair Market Value pursuant to the procedures, and consistent with the valuation principles, set forth in Clause 18.

2.3

Parent Company Guarantee

Alcoa shall procure the issuance by its ultimate parent company of a parent company guarantee in respect of its Affiliates that are Shareholders in a Company in the form set out in Schedule 1. Such parent company guarantee shall be issued to Ma'aden prior to or simultaneously with the first issuance of Shares to any Alcoa Affiliate.

Development Committee and Establishment of a particular Company

3.1

Development Committee

The Parties shall proceed to incorporate each Company and appoint the relevant Board of Managers as soon as possible after the Effective Date. If it is not practicable to incorporate a Company immediately following the Effective Date then, for the period between the Effective Date and the incorporation of such Company and appointment of its Board of Managers, a project development committee (the "Development Committee") shall be formed by the Parties for the overall co ordination of the development of the project in the period up to incorporation of such Company and appointment of its Board of Managers. The Development Committee shall have the authority and duties and shall act in accordance with the procedures set out in Part 1 of Schedule 13.

The Development Committee shall be subject to the same Company Policies as described in Clause 8.9 of the Agreement once such policies are determined by the Parties.

3.2

Project Costs and Pre-Financing Budget

Prior to the Effective Date, the Parties have agreed on:

(i)the Estimate of Project Costs;

(ii)the Project Model; and

(iii)the Pre-Financing Budget.

3.3

Project Milestones

(a)

(i)

the Project Budget which shall supersede and replace the Estimate of Project Costs and Pre-Financing Budget;

(ii)

the Base Case Model for each Phase;

(iii)

(iv)

the material Project Agreements as specified in Schedule 15.

(b)

Without prejudice to the above, the Parties shall use their best efforts to obtain signed Senior Lenders Commitment Letters and the key signed Construction Agreements (as agreed by the Parties) for Phase 1 by no later than 30 June 2010 (the "Commitment Date").

(c)

In the event that the Senior Lenders Commitment Letters and the key Construction Agreements (as aforesaid) have not been signed by the Commitment Date, the Parties will liaise with the Ministry of Petroleum to seek appropriate extensions of time or other relief under the Gas Allocation Letter and the Parties will continue to use all their respective best efforts to progress the Senior Lenders Commitment Letters and the key Construction Agreements so that they may be signed by the respective parties as soon as practicable following the Commitment Date. In the event that the Gas Allocation Letter is terminated or the gas allocation is withdrawn by reason of any failure to achieve the signing of the Senior Lenders Commitment Letters or the relevant key Construction Agreements by the Commitment Date, or for any other reason, then this Agreement will terminate in accordance with Clause 16.l(e) and neither Party shall have any liability to the other (including in respect of the reimbursement of Pre-Incorporation Costs or Paid In Capital or Shareholder Loans in respect of any Company) arising from any such termination.

(d)

Subject to obtaining signed Senior Lenders Commitment Letters for Phase 1, the Parties: agree to continue to develop the Project; commit to provide the Required Shareholder Funding in respect of Phase 1; and to procure that each relevant Company shall sign the Financing Agreements for Phase 1, subject only to the Financing Agreements being on materially the same terms as those contained in the Senior Lenders Commitment Letters.

(e)

Following the development and approval of all items listed in paragraph (a) above and, subject to paragraph (f) below, the occurrence of the Financing Completion Date for Phase 1 (or earlier, should the Parties so agree), the Parties shall procure that the NTP for Phase 1 is issued.

(f)

The Parties shall use their best efforts to progress the Project as aforesaid such that the Financing Completion Date for Phase 1 occurs no later than the Financing Longstop Date. In the event that the Financing Completion Date for Phase 1 has not occurred by the Financing Longstop Date, Clause 15 shall apply.

(g)

The Parties acknowledge that the Project is an integrated project to be developed in two Phases. The Parties shall use their best efforts to obtain signed Senior Lenders Commitment Letters and the key signed Construction Agreements (as agreed by the Parties) for Phase 2 by no later than 30 June 2011. The Parties shall proceed to develop Phase 2 upon signing the relevant Financing Agreements.

3.4

Establishment of each Company

(a)

The Parties acknowledge and shall procure that each Company will be established by the relevant Shareholders in accordance with the Applicable Laws of the Kingdom.

(b)

Promptly following the Effective Date, the Parties shall procure that the relevant Shareholders shall apply to SAGIA for the issuance of the Foreign Investment Licence in relation to each Company.

(c)

Promptly following the issuance of the Foreign Investment Licence for each particular Company, the Articles of Association of such Company shall be submitted to the Ministry and the Parties shall procure that the relevant Shareholders shall use all reasonable efforts to complete the incorporation of each Company. The Parties agree that each Company's Articles of Association will be in the Agreed Form attached hereto as Schedule 2, an Arabic version of which shall be submitted to the Ministry for approval. If any changes are requested by the Ministry, the Articles of Association will be amended and resubmitted only

after the Parties have consented thereto, such consent not to be unreasonably withheld, conditioned or delayed. Promptly following approval of the Articles of Association by the Ministry, the Parties will cause the authorized representatives of the relevant Shareholders to execute the Articles of Association before the competent notary public in the Kingdom and thereafter shall take such further actions as shall be necessary to complete the incorporation and registration of each Company in the Commercial Register as soon as possible, and in accordance with the requirements of Clauses 3.5, 3.6 and 4.1 (a).

3.5

Details of each Company

The Parties acknowledge and agree that:

(a)

Each Company will be formed for a period of fifty (50) years starting from the date of its registration in the Commercial Register, as may be extended pursuant to the terms of the Articles of Association and this Agreement;

(b)

Notwithstanding paragraph (a) above, the term of the Joint Venture shall be as specified in Clause 2.2;

(c)

The names of the Companies shall be (i) Ma'aden Bauxite & Alumina Company, which will operate the Mine at Al Ba'itha and the Refinery at Ras Az Zawr (the "Mining & Refining Company"); (ii) Ma'aden Aluminium Company, which will operate the Smelter at Ras Az Zawr (the "Smelting Company"); and (iii) Ma'aden Rolling Company, which will operate the Rolling Mill at Ras Az Zawr (the "Rolling Company"), or in each case such other name as may be approved by the Parties from time to time in accordance with this Agreement and set out in, or in an amendment to the Articles of Association of such Company which have been duly filed and/or registered in the Commercial Register in accordance with Applicable Laws of the Kingdom;

(d)

(e)

3.6

Purpose

(a)

(b)

(i)

Collectively, the development, construction, ownership and operation of the Mine, the Refinery, the Smelter and the Rolling Mill in the Kingdom;

(ii)

In the case of the Mining & Refining Company, initially the extraction of approximately 4,000,000 tpa of Bauxite from the Al Ba'itha bauxite deposit in the Kingdom and the production of approximately 1,800,000 tpa of Alumina;

(iii)

In the case of the Smelting Company, initially the production of approximately 740,000 tpa of Aluminium;

(iv)

In the case of the Rolling Company, initially the production of approximately 250,000 tpa, which may be increased to 460,000 tpa of Rolling Mill products (the "Products"); and

(v)

Implementation of Expansions of the Project, and production of the resulting increased quantities of the Products.

(c)

(d)

In accordance with the Gas Allocation letter and as referred to in Clause 5.5, the Parties acknowledge and agree that the Companies are required to support the development of downstream businesses in the Kingdom.

Share Capital, Funding by Shareholders and Financing Completion Date

4.1

Share Capital as of Incorporation

The Parties acknowledge that each Company shall be incorporated with an initial Share Capital, and the ownership of such shares as at the date of incorporation shall be, as set out in the tables below:

(i) In the case of the Mining & Refining Company:


Shareholder	Shareholder Percentage	Number of Shares	Paid In Capital
Ma'aden	74.9%	381,990	SR 3,819,900,000
Alcoa	25.1%	128,010	SR 1,280,100,000
TOTAL	100%	510,000	SR 5,100,000,000

(ii)

In the case of the Smelting Company:


Shareholder	Shareholder Percentage	Number of Shares	Paid In Capital
Ma'aden	74.9%	381,990	SR 5,729,850,000
Alcoa	25.1%	128,010	SR 1,920,150,000
TOTAL	100%	510,000	SR 7,650,000,000

(iii)In the case of the Rolling Company:


Shareholder	Shareholder Percentage	Number of Shares	Paid In Capital
Ma'aden	74.9%	292,110	SR 2,921,100,000
Alcoa	25.1%	97,890	SR 978,900,000
TOTAL	100%	390,000	SR 3,900,000,000

(b)

Each Share shall entitle the holder thereof to one (1) vote on each matter coming before the Shareholders.

(c)

4.2

Required Shareholder Funding

(a)

From the Effective Date until the date of incorporation of each Company and appointment of the Board of Managers for such Company, funding calls will be issued by the Development Committee (a "Development Committee Funding Call") in accordance with the Pre-Financing Budget and shall be funded by the Parties and/or their Affiliates into the Project Account in proportion to their proposed Shareholder Percentages for each relevant Company set out in Clause 4.1 within fourteen (14) days of the request, subject to the Parties' rights to reimbursement in accordance with Clause 13.

(b)

Following the incorporation of a Company and appointment of its Board of Managers, the Board of Managers may from time to time issue a Cash Call to the Shareholders in accordance with their Shareholder Percentages for Equity Subscriptions and, Shareholder Loans (in the proportions determined by the Parties), in accordance with approved Budgets including initially the Pre-Financing Budget and, when superseded, the Project Budget. The Equity Subscriptions and Shareholder Loans shall each separately be proportionate to the Shareholder Percentages of the respective Shareholders. The Parties shall procure that the relevant Shareholders nominated by them shall pay or advance such funds to such Company and, in respect of any Equity Subscription, the Paid In Capital of each of the Shareholders in the Company shall be adjusted accordingly. For the purposes of this Agreement, "Required Shareholder Funding" shall comprise all funding that the Shareholders (or any of them) have advanced or are required to advance (or procure the advancing ot) to each Company in accordance with the approved Budgets or as otherwise required in accordance with this Agreement, including by way of Equity Subscriptions and Shareholder Loans (but shall exclude any Senior Debt provided by a Shareholder or its Affiliates).

4.3

Shareholder Loans

In the event that the Parties determine that a Cash Call issued by a particular Board of Managers should comprise in whole or part Shareholder Loans, the Parties shall procure that the Shareholders shall each, and shall also procure that such Company shall, within fifteen (15) days of the request by the Board of Managers to do so, execute one or more subordinated loan agreements between the relevant Shareholders and such Company (the "Shareholder Loan Agreements") requiring the relevant Shareholders, conditional on achieving the Financing Completion Date for the relevant Phase, to advance amounts to such Company pursuant to Cash Calls in accordance with Clause 4.2(b).

4.4

Form and Manner of Funding by Shareholders

(a)

Unless otherwise approved by the Board of Managers of a relevant Company in accordance with this Agreement, all Cash Calls by each Board of Managers shall:

(i)

(ii)

(iii)

specify the amount required to be advanced by the affected Shareholder(s) in accordance with this Agreement;

(iv)

specify whether the amount is required to be advanced by way of Equity Subscription and or Shareholder Loan;

(v)

specify the Funding Deadline; and

(vi)

set out details of the bank account of the Company into which the Required Shareholder Funding subject to the Cash Call should be deposited.

(b)

(c)

(d)

Subject to Applicable Laws in the Kingdom and Clause 7.2(a)(ii), when considered appropriate by the relevant Board of Managers, including for purposes of avoiding potential application of Article 180 of the Company Law, the Parties shall procure that the Shareholders shall promptly resolve and otherwise procure and take all steps and execute and deliver all instruments necessary or desirable, including without limitation amending the Articles of Association of the relevant Company (without requiring separate approval under Clause 7.2(a)), to convert Shareholder Loans into Share Capital by releasing and discharging such principal amount of Shareholder Loans (then outstanding from each Shareholder to the relevant Company) in consideration for the issuance by the Company of that number of Shares so as to increase the Share Capital to an appropriate level. Any Shareholder Loans so converted shall be converted into Shares pro rata to the then Shareholder Percentages of the Shareholders and in a manner which does not vary the Shareholder Percentages of the Shareholders post conversion.

4.5

Default Commission Rate

If a Shareholder fails to pay or advance an amount in accordance with this Clause 4 by the Funding Deadline or the deadline specified in Clause 4.2(a) (in the case of a Development Committee Funding Call), the unpaid amount of such Required Shareholder Funding or under such Development Committee Funding Call (as the case may be) shall bear a commission (the "Default

Commission") from and after the date due to the date such amount is paid at a rate per annum equal to the Commission Rate plus two percent (2%), payable upon demand by the relevant Company or the non-defaulting Shareholder or, failing such demand, monthly in arrears. Any calculation of Default Commission under this Clause 4.5 shall be made on the basis of the actual number of days elapsed and a three hundred and sixty (360) day year.

4.6

Limitations and Shareholder Funding

4.7

Pledge

4.8

Adherence Agreement

Subject to Clause 4.9(b), a person who is not a Shareholder shall not acquire, or be permitted to acquire, any Shares or Shareholder Loans in a Company: (1) other than in accordance with and pursuant to the provisions of this Agreement; and (2) unless such person shall have first executed an Adherence Agreement to this Agreement in the form attached hereto as Schedule 5 ("Adherence Agreement") on or prior to the completion of such acquisition of any Shares or Shareholder Loans. Without limiting the foregoing, Alcoa intends to hold its Shares in each of the Companies through an Affiliate and shall procure that each such Affiliate shall enter into an Adherence Agreement on or prior to the issuance of any Shares to such Affiliate. The Parties acknowledge that on receipt of an Adherence Agreement in accordance with the terms of this Agreement, a New Shareholder (as defined in the form of the Adherence Agreement) shall be deemed to have been added as a party to this Agreement and all references to Shareholder or Shareholders, shall include the New Shareholder.

4.9

Financing Completion Date

(a)

The Parties intend that the Financing Completion Date for each Phase shall occur no later than the dates specified in Schedule 15 and, in any event, in respect of Phase 1 by no later than the Financing Longstop Date or such other dates as may be resolved by the relevant Board of Managers pursuant to Clause 8.5(a) (and provided that there is no obligation to agree on any change to such dates and a failure to agree on any change to such dates shall not constitute a Deadlock for the purposes of this Agreement).

(b)

As soon as is reasonably practical after the Financing Completion Date for each Phase, the Parties shall procure that the relevant Shareholders shall procure that the Foreign Investment Licence, Articles of Association and Commercial Register shall be amended so as to formalize the increase in capital and issuance of the additional Shares.

(c)

Subject to the provisions of Clause 6.3, as soon as is reasonably practical after the Financing Completion Date for each Phase, and in any event no later than the closing date of the first drawdown of funds pursuant the Financing Agreements for such Phase, the Parties shall procure that the relevant Shareholders shall procure that each relevant Company shall execute all material Project Agreements and Ancillary Agreements not executed prior to such date in respect of such Phase.

Responsibilities of the Parties

5.1

Roles of the Parties

5.2

Role of Ma'aden

Alcoa acknowledges and agrees that Ma'aden possesses extensive experience and know-how in respect of mining, infrastructure, local regulatory compliance, local procurement of goods and services, land related matters and project development in the Kingdom. Accordingly, the Parties shall ensure that each Company shall consult with Ma'aden, and Ma'aden (or as the case may be, its Affiliates) shall provide assistance and support to such Company and, as applicable, shall perform other specified services and obligations, with respect to such matters in the manner provided in, and upon and subject to the terms and conditions of, this Agreement and the relevant Ancillary Agreements entered into by Ma'aden (or as the case may be, its Affiliates) in the Agreed Forms, in accordance with Schedule 9. Such assistance and support and other obligations shall be performed on an "at cost" basis except where an arm's length Ancillary Agreement is to be entered into in accordance with Schedule 9. For the purposes of this Clause 5.2, "at cost" means: in relation to services and support provided by Ma'aden's or its Affiliates' personnel, the costs attributable to base salary plus benefits and burdens of such personnel for the periods in which such services and support are being performed; and in relation to other services and support, the actual direct costs properly incurred by Ma'aden or its Affiliates to third parties in performing the same.

5.3

Role of Alcoa

Ma'aden acknowledges and agrees that Alcoa possesses extensive experience and know-how with respect to bauxite mining, alumina refining, aluminium smelting and rolling mill operations. Accordingly, the Parties shall ensure that each Company shall consult with Alcoa, and Alcoa (or, as the case may be, its Affiliates) shall provide assistance and support to such Company and, as applicable, shall perform other specified services and obligations, with respect to such matters provided in, and upon and subject to the terms and conditions of, this Agreement and the relevant Ancillary Agreements entered into by Alcoa (or its Affiliates) in the Agreed Forms, as more particularly described in Schedule 14. Such assistance and support and other obligations shall be performed on an "at cost" basis except where an arm's length Ancillary Agreement is to be entered into in accordance with Schedule 9. For the purposes of this Clause 5.3 and Clause 16.4, "at cost" means: in relation to services and support provided by Alcoa's or its Affiliates' personnel, the costs attributable to base salary plus benefits and burdens of such personnel for the periods in which such services and support are being performed and subject to grossing up such costs to the extent that withholding tax is payable in respect of such costs; and in relation to other services and support, the actual direct costs properly incurred by Alcoa or its Affiliates to third parties in performing the same.

5.4

Aluminium Offtake

(a)

The Parties (or one of their respective Affiliates), the Smelting Company and the Rolling Company will enter into the Cast House Users' Agreement substantially in the form of Schedule 6 under which the Smelting Company will co-ordinate the provision of cast house services, including to the Rolling Company.

(b)

Subject to paragraph (c) below, the Parties or such of their respective Affiliates shall each enter into an offtake agreement with the Smelting Company in the Agreed Form in accordance with the timeline for execution specified in Schedule 9, for the purchase of their

pro rata share (based on their Shareholder Percentage) of each type of Aluminium product produced by the Smelting Company.

(c)

The Parties shall procure that the Smelting Company shall allocate such quantities of Aluminium to the Rolling Company as are required for the operation of the Rolling Mill and such allocated quantities shall be taken to reduce the amount of Aluminium provided by the Smelting Company and available to Parties pursuant to paragraph (b) above.

(d)

In the event that the Parties fail to achieve the milestone dates relating to the Rolling Mill as indicated in Schedule 15, the Parties acknowledge that the Smelting Company will be required to allocate 275,000 tpa of Aluminium to other entities determined by the Ministry of Petroleum in accordance with the Gas Allocation Letter. Such allocation shall be divided pro rata to each Parties' Shareholder Percentage and each Party shall be obliged to sell such amount of Aluminium at a price equal to the full cost of production to such entities determined by the Ministry of Petroleum.

(e)

The Parties shall use their reasonable efforts to (i) assist the Smelting Company in obtaining the required LME registration for Aluminium to be produced by it, and (ii) ensure that such registration is obtained in a timely manner. Each Party shall bear its own costs in relation to assisting the Smelting Company in obtaining the LME registration pursuant to this Clause 5.4.

5.5

Support for Downstream Industry and Priority to the Domestic Market

(a)

In accordance with the Gas Allocation Letter, the Parties (or their Affiliates) shall, in priority to export markets, enter into long-term supply agreements with companies in the Kingdom that wish to purchase raw materials from among the Products produced by each Company and, where applicable, sold to the Parties (or their Affiliates) under each Parties' Offtake Agreement with the relevant Company (as specified in Schedule 9) or sold by the Rolling Company (if applicable).

(b)

5.6

(a)

[INTENTIONALLY OMITTED.

5.7

S[INTENTIONALLY OMITTED]

5.8

Alumina Supply Arrangements and Excess Alumina

(a)

During the period between the date on which the Smelter becomes operational and the date on which the Refinery begins to supply the Smelter's requirements for Alumina, upon request of the Smelting Company, Alcoa (or its Affiliates) will supply Alumina to the Smelting Company in such quantities and at such times as requested, and at a market price formula agreed by the Parties. If at any time thereafter the Mining & Refining Company becomes unable, including due to operational interruptions in Alumina production, to supply the Smelting Company's requirements for Alumina, Alcoa will offer its and its Affiliates' services as agent to locate other sources of Alumina in the market.

(b)

Alcoa will also offer, as agent, to market any Excess Alumina that the Mining & Refining Company may have available for sale from time to time at prevailing market prices and in return for a reasonable commission to be agreed.

5.9

Capacity Expansions

(a)

(b)

(c)

An Expansion shall be financed in accordance with a financing plan for such Expansion that has been approved by the relevant Board of Managers in accordance with this Agreement.

(d)

(e)

(f)

5.10

Break-Off Projects

(a)

under the relevant Construction Agreements for the Break-Off Project is not given within eighteen (18) months of the date of the Break-Off Project Notice. For the avoidance of doubt, if any Break-Off Right so terminates, the proposed Expansion (or any Expansion substantially similar to such proposed Expansion) must again be submitted to the relevant Company in accordance with Clause 5.9.

(b)

If Ma'aden gives a Break-Off Project Notice pursuant to paragraph (a) above, the relevant Company shall, and the Parties shall procure that the other Shareholders shall procure that such Company shall, negotiate in good faith with Ma'aden, its Affiliates and/or the Break Off Project Company with a view to such Company entering into a shared services agreement (a "Shared Services Agreement") with Ma'aden, its Affiliate and/or the Break Off Project Company pursuant to which such Company shall provide certain services and/or make available certain facilities in order to support and facilitate the development, construction and operation of the Break-Off Project. In connection with any such negotiations, the Parties shall ensure that the following principles shall be applied by the parties to such negotiations:

(i)

the relevant Company and Ma'aden, its Affiliates and/or the Break-Off Project Company shall cooperate in relation to the conduct of the Project and the Break-Off Project;

(ii)

(iii)

the relevant Company shall provide such reasonable supplies including intermediate Products, services, leases, licences, easements and other rights and facilities as are reasonably requested by the Break-Off Project, provided that such Company shall only be obliged to provide services to the Break-Off Project:

(A)

to the extent that it has spare capacity, taking into account its current or reasonably predicted future usage of that capacity;

(B)

provided that there are no technical incompatibilities which reasonably could be expected to have an adverse effect on the Project and which cannot reasonably be overcome;

(C)

provided that no capital expenditures are required of such Company, or alternatively the Break-Off Project funds such capital expenditure;

(D)

provided that the arrangements do not adversely impact on the security and regularity of supplies of energy and raw materials to such Company; and

(E)

provided that the provision of such services would not prejudice the efficient current and planned future production of Aluminium by the Project.

For the purpose of this Clause 5.10(b)(iii). services, leases, easements and utilities shall be provided on a "full cost" basis (including capital and operating costs). If so required by the Break-Off Project, any intermediate Products, intellectual property licences or other rights and facilities shall be provided on a reasonable basis to be agreed with reference to the cost to the relevant Company of providing such, as well as to the advantage to the Break-Off Project in receiving rather than resorting to a third party provider (if available).

5.11

Value Added Projects

(a)

(b)

(c)

(d)

5.12

Responsibilities under the Gas Allocation Letter

(a)

The Parties acknowledge that the Gas Allocation Letter contains requirements in respect of the implementation of the Project which are to be supported by the provision by Ma'aden (on behalf of the Companies) of an irrevocable letter of credit in the amount of US$ three hundred and fifty million (US$350,000,000) (the "Ma'aden LOC"). The Ministry of Petroleum has the right to call on the Ma'aden LOC in the event that the requirements of the Gas Allocation Letter are not met.

(b)

The Parties agree and acknowledge that a failure to satisfy the requirements of the Gas Allocation Letter resulting in a claim under the Gas Allocation Letter or a call under the Ma'aden LOC is a risk of the Project to be borne by the Parties in proportion to their respective Shareholder Percentages.

(c)

Alcoa shall provide to Ma'aden, within fourteen (14) days of Ma'aden's written request, and in any case prior to the deadline under the Gas Allocation Letter for provision of a letter of credit to the Ministry of Petroleum, a separate irrevocable and unconditional letter of credit issued by a financial institution acceptable to Ma'aden in an amount equal to Alcoa's pro rata share of the amount stated in paragraph (a) above based on its Shareholder Percentage (the "Alcoa LOC"). The Alcoa LOC shall have a term of not less than one (I) year and at least thirty (30) days prior to its expiry, Alcoa shall either (i) cause the issuing bank to provide a notice of renewal satisfactory to Ma'aden or (ii) provide a notice of replacement to Ma'aden together with a replacement letter of credit fulfilling the requirements of this Clause 5.12(c).

(d)

Ma'aden shall be entitled to call on the Alcoa LOC in the event that Ma'aden is required to make payment for a failure to meet the requirements of the Gas Allocation Letter or the Ministry of Petroleum calls under the Ma'aden LOC, provided that any liability incurred to the Ministry of Petroleum under the Gas Allocation Letter shall be borne by the Parties in proportion to their Shareholder Percentages.

(e)

On satisfaction of the requirements of the Gas Allocation Letter and the return of the Ma'aden LOC to Ma'aden, Ma'aden shall, within five Business days thereafter, return the Alcoa LOC to Alcoa.

(f)

Any failure by Alcoa to comply with the requirements of this Clause 5.12 for any reason whatsoever shall be deemed to be an Event of Default by Alcoa under Clause 14.l(e).

5.l 3

Provision of lnformation by Parties and the Companies

(a)

(i)

(ii)

securing an improper advantage;

(iii)

(iv)

providing an unlawful personal gain or benefit, of financial or other value, to a Government Official,

that Party, Shareholder or Company, as the case may be, shall promptly inform the Board of the relevant Company.

(b)

Where as a result of an activity carried on or proposed to be carried on by a Company a Government Authority makes an enquiry or request for information in relation to a legal,

compliance or regulatory requirement of such Company or Party under Applicable Laws, the Parties shall co-operate with one another and the Company in relation to that enquiry or request for information. Upon request by a Party or a Company, as the case may be, the other Party (or Parties in the case of a request made by a Company) shall provide all reasonable information and assistance required by such Party or Company in respect of such enquiry or request for information.

Transfer of Existing Project Assets; Project Agreements

6.1

Transfer of Ma'aden Existing Project Assets

(a)

As soon as reasonably practicable after the incorporation of each relevant Company, Ma'aden shall sell, transfer and assign all of its right, title and interest (including all accrued rights) in and to each of Ma'aden's existing Project assets as listed in Schedule 11 ("Ma'aden Existing Project Assets") to the relevant Company (as determined by the Parties) and the Parties shall procure that such Company purchases or, as the case may be, receives and accepts the transfer and assignment of each of the Ma'aden Existing Project Assets. The sale, transfer and assignment of any Ma'aden Existing Project Assets pursuant to this Clause 6.1 shall not be subject to, or conditional upon, the sale, transfer or assignment of any other of the Ma'aden Existing Project Assets or any of the Alcoa Existing Project Assets.

(b)

Ma'aden shall use its best efforts to give effect to the provisions of paragraph (a) above and, without limiting the generality of the foregoing, shall:

(i)

execute appropriate Deeds of Transfer transferring each of the Ma'aden Existing Project Assets to the relevant Company;

(ii)

procure (if appropriate) the re-issuance of, or transfer by, the appropriate Governmental Authority (on terms not materially less favourable to the relevant Company) of any relevant Ma'aden Existing Project Assets to the relevant Company; and

(iii)

execute and procure the execution of any additional documents and take further action as is necessary or reasonably requested by Alcoa to effectuate the intent of this Clause 6.1.

6.2

Transfer of Alcoa Existing Project Assets

(a)

As soon as reasonably practicable after the incorporation of each relevant Company, Alcoa shall sell, transfer and assign all of its right, title and interest (including all accrued rights) in and to each of the Alcoa existing Project assets as listed in Schedule 12 ("Alcoa Existing Project Assets") (if any) to the relevant Company (as determined by the Parties) and the Parties shall procure that such Company purchases or, as the case may be, receives and accepts the transfer and assignment of each of the Alcoa Existing Project Assets. The sale, transfer and assignment of any Alcoa Existing Project Assets pursuant to this Clause 6.2 shall not be subject to, or conditional upon, the sale, transfer or assignment of any of the other of Alcoa Existing Project Assets or any of the Ma'aden Existing Project Assets.

(b)

Alcoa shall use its best efforts to give effect to the provisions of paragraph (a) above and, without limiting the generality of the foregoing, shall:

(i)

execute appropriate Deeds of Transfer transferring each of the Alcoa Existing Project Assets to the relevant Company; and

(ii)

execute and procure the execution of any additional documents and take further action as is necessary or reasonably requested by Ma'aden to effectuate the intent of this Clause 6.2.

6.3

Project Agreements signed post-Effective Date but before Company Formation

(a)

Promptly following the Effective Date, the Party that is identified as a party to any Ancillary Agreements shall, or shall procure that its relevant Affiliates that are identified as parties thereto shall, use its reasonable efforts to approve Agreed Forms of such Ancillary Agreements (with the exception of Ancillary Agreements that are in Agreed Form on or prior to the Effective Date), and shall execute, and the Parties shall procure that the relevant Company shall execute, the Ancillary Agreements in the Agreed Form forthwith after the Effective Date in accordance with Schedule 9. The Parties agree and acknowledge that all Ancillary Agreements shall be entered into on arm's length commercial terms.

(b)

The Parties shall use their reasonable efforts to ensure that, with the exception of such of the Project Agreements that are in the Agreed Form, the Project Agreements (other than the Ancillary Agreements and the Financing Agreements) are negotiated and executed on the most favourable terms and conditions for the relevant Company as may be reasonably obtainable and, where applicable, in accordance with the timeline for the execution as specified by the Board of Managers.

Shareholders’ Meetings

7.1

Shareholders' Meetings

The Shareholders shall act through general meetings and resolutions duly held and adopted in accordance with the terms and conditions of this Agreement, the Articles of Association and Applicable Laws in the Kingdom. To the extent permitted by Applicable Laws in the Kingdom, a Shareholder may participate in Shareholders' Meetings in person or by video conference or tele conference, and/or may appoint a proxy or proxies to represent it in such meetings.

7.2

Supermajority Items

(a)

(i)

Any amendment of the Articles of Association (including any change of name of the Company) other than in accordance with Clauses 4.4(d) and 4.9(b);

(ii)

(iii)

Any liquidation or winding up of the Company (including voluntary dissolution of the Company);

(iv)

Any sale or other disposition of all or a substantial part of the Company's business or assets, or any merger of the Company with or into any other entity;

(v)

Appointment, replacement, or removal of the Company's Auditors;

(vi)

Any decision regarding the distribution of the Company's available profits other than in accordance with Clause 11.3, including without limitation, any decision to establish reserves other than the statutory reserve or to carry forward the Company's profit balance in whole or in part to the next Financial Year;

(vii)

Any decision regarding Managers' remuneration; or

(viii)

The approval and any subsequent amendment of the Project Budget.

(b)

(c)

(d)

7.3

Language

Board of Managers

8.1

Appointment of Managers to each Company

(a)

Except in relation to those matters reserved to the Shareholders, each Company shall be managed by a Board of Managers, which will consist of five (5) Managers. Promptly after the incorporation of a Company in accordance with Clause 3.4, to the extent it has not already occurred, the required appointments shall be made such that Ma'aden will appoint three (3) Managers, and Alcoa (or its Affiliate) will appoint two (2) Managers, to such Company. Each of Ma'aden and Alcoa (or its Affiliate, as aforesaid) will also appoint an Alternate Manager, who will also participate in meetings of the relevant Board of Managers, but will have no vote unless expressly authorized to vote pursuant to sub-paragraph (f) below.

(b)

Unless otherwise agreed between the Shareholders of a particular Company, Ma'aden shall appoint the Chairman of each Company.

(c)

(d)

(e)

(f)

A Manager may grant a proxy to any other Manager appointed by the Shareholder appointing such Manager to attend meetings of the Board of Managers and to vote on his behalf.

(g)

Resolutions of the Board of Managers may be passed by written resolution.

(h)

(i)

(j)

The Chairman shall be a Manager and shall have the authority set out in the Articles of Association, such authority to be exercised in accordance with the decision of the Board of Managers.

8.2

Removal of Managers

8.3

Appointment of Senior Officers to each Company: Removal

(a)

The relevant Board of Managers shall appoint officers of the relevant Company from time to time, including the following officers of such Company ("Senior Officers"):

(i)

the President for one or more Companies;

(ii)

the Vice President of Operations (or such other position as the parties may determine);

(iii)

the Vice President for Finance for one or more Companies; and

(iv)

the Vice President for Human Resources.

(b)

The appointment and removal of each Senior Officer will be subject to approval by the relevant Board of Managers pursuant to Clause 8.5(a).

(c)

Except as otherwise agreed by the Parties, the President shall be nominated by Ma'aden to each Board of Managers for approval and shall be the primary executive officer of each Company and shall be fully responsible for the general and executive management and daily administration of the operations and business of each Company. If more than one President is nominated by Ma'aden, Ma'aden will identify which executive will maintain overall responsibility for common operations and functions between the Companies (the "MA President"). The person nominated by Ma'aden as President shall serve as President for each Company. The President shall report directly to the relevant Board of Managers and carry into effect all decisions and resolutions of the relevant Board of Managers and, if and to the extent determined by special majority approval of the relevant Board of Managers, any duly authorised committee of the relevant Board of Managers.

(d)

(e)

Except as otherwise agreed by the Parties, there shall be one Vice President for Finance reporting to the MA President who shall be nominated by Ma'aden Subject to the approval of each Board of Managers.. The scope of the Vice President for Finance's role and responsibilities shall be as determined by the relevant Board of Managers from time to time.

(f)

(g)

(h)

In the case of a disagreement between the Parties regarding the appointment or removal of one of the Senior Officers, the Parties will first attempt to resolve such disagreement amicably, including reference to senior management consistent with the provisions of Clause 21.1 (without, however, the required formality of the written declaration of "dispute" and the issuance of a "dispute notice" and without recourse to arbitration pursuant to Clause 21.3).

(i)

remove such Senior Officer. If the Parties cannot agree on the review or removal of such Senior Officer, the Deadlock provisions of Clause 9 shall apply for a period not to exceed one (1) year; and thereafter, if the loss of faith in such Senior Officer continues, he or she will be removed from the present position, and the Party entitled to nominate such Senior Officer will nominate a replacement.

8.4

Meetings of the Board of Managers of each Company

(a)

(b)

(c)

8.5

Voting Thresholds

(a)

Subject to Clause 8.5(b). each Board of Managers shall adopt its resolutions with the affirmative simple majority vote of the Managers being present in person or by proxy, and entitled to vote, at a duly convened Board meeting at which a quorum is present (or in the case of a written resolution taken without a Board meeting, the total number of Managers). The decisions requiring the affirmative simple majority vote of the Managers shall comprise all such decisions of the Managers other than those for which a special majority resolution is required pursuant to Clause 8.5(b).

(b)

(i)

Appointment, removal and remuneration of the Senior Officers;

(ii)

Approval of the Project Budget and any material change thereto having a value in excess of the lower of fifty million US Dollars (US$50 million) or ten (10) percent of the Project Budget;

(iii)

Approval of the issuing of the NTP for each Phase.

(iv)

Approval of the annual operating budgets and any material change thereto (having a value in excess of the lower of fifty million US Dollars (US$50 million) or ten (I 0) percent of the annual operating budget) of the relevant Company following the Commercial Production Date;

(v)

(vi)

Approval of any Construction Agreement to be entered into after the Effective Date having a value in excess of fifty million US Dollars (US$50 million);

(vii)

Approval of any Project Agreement to be entered into between a Shareholder or any of its Affiliates and any Company which is not in any Agreed Form at the Effective Date;

(viii)

Approval of financial statements required to be produced by any Company and presented to the Shareholders in accordance with Clause 12.3;

(ix)

Approval or any long-term contract, having a term in excess of three (3) years and having a value in excess of fifty million US Dollars (US$50 million) (and except to the extent already included in any approved budget);

(x)

Adoption of each Company's initial business conduct and conflict of interest Company Policies, and any material changes thereto; and

(xi)

8.6

Resolutions

8.7

Information

8.8

Duties of Managers

8.9

Company Policies

In this regard, among other things:

(a)

(i)

the Company's effective and efficient operation by enabling it to manage significant business, operational, financial, compliance and other risks to achieving the Company's objectives;

(ii)

the quality of the Company's internal and external financial reporting; and

(iii)

compliance by the Company with Applicable Laws.

(b)

(i)

(ii)

access to assets is permitted only in accordance with management's general or specific authorization; and

(iii)

the recorded accountability for assets is compared with existing assets at reasonable levels and appropriate action is taken with respect to any differences.

(c)

Alcoa shall prepare and provide the first drafts of each Company's compliance and procedure manuals and other documents necessary to implement sub-clause (a) and (b) above.

8.10

Project Steering Committee

The Parties shall fonn a multi-disciplinary working group (the "Project Steering Committee") for each Company which shall be responsible for advising such Company in respect of various elements of the Project. The Project Steering Committee shall be headed by the President and consist of representatives of each Party and various third party consultants to the Project. The Project Steering Committee shall report to the Board of each Company and co-ordinate with its Senior Officers in the performance of its functions. The initial charter and duties of the Project Steering Committee are set forth in Schedule 13.

Deadlock

9.1

Deadlock Arising

(a)

(b)

9.2

Deadlock Referral

(a)

(b)

If a Shareholder gives a Deadlock Referral Notice in respect of a Deadlock, the Shareholders shall procure that the following procedure (the "Deadlock Resolution Procedure") is followed:

(i)

(ii)

the rules and procedures of the Deadlock Committee shall be unanimously agreed by the Deadlock Committee;

(iii)

each Shareholder shall have the right to submit to the members of the Deadlock Committee its own statement of the matter and its position with respect thereto;

(iv)

(v)

the members of the Deadlock Committee shall be guided in such negotiations by the best interests of the relevant Company or, if the Deadlock arises prior to the incorporation of the Company, the Project; and

(vi)

the members of the Deadlock Committee may approve such interim or temporary

actions or other measures as they shall unanimously agree are necessary and desirable to protect and preserve the value of the Project pending resolution of the Deadlock, and the relevant Shareholders shall procure that any such approved actions or other measures are duly approved by those Shareholders or, as the case may be, the relevant Board of Managers, in accordance with this Agreement and implemented by the relevant Company.

(c)

(d)

9.3

Sole Remedies

(a)

(b)

10.

Senior Debt Financing of the Project

10.1

Support For Financing Plan Each Party shall:

(a)

provide such support and assistance, including the provision of guarantees, as may be reasonably requested by any Company or the Development Committee in connection with implementing the Financing Plan, arranging the Senior Debt contemplated thereby, entering into the Financing Agreements and achieving Financial Close for each Phase; and

(b)

negotiate in good faith with the Senior Lenders in connection with any Completion Agreements requested from such Party or any of its Affiliates with a view to concluding such Completion Agreements on terms that are consistent with the Financing Plan for the relevant Phase and are otherwise acceptable to such Party acting reasonably.

10.2

Several Obligations

The Parties agree that their obligations and any Completion Agreements shall be several only and the Parties shall not be obliged to enter into any such obligations on a joint or joint and several basis.

10.3

No Further Liability

It is the intention of the Parties in founding each Company that each Company shall be liable for its own liabilities, and that neither the Parties nor the relevant Shareholders shall assume liability for the debts and obligations of any Company except to the extent required for the procurement of limited recourse financing in connection with the Project, in accordance with the Completion Agreements and pursuant to the Financing Agreements and as may be required by Applicable Laws.

11.

Distributions Policy; Taxes

11.1

Distributions Policy

(a)

The annual net profits of each Company and any retained profits from previous Financial Years shall be first allocated towards maintaining the statutory reserve as required by Applicable Laws in the Kingdom from time to time, subject to any exemptions granted to any Company in relation thereto.

(b)

All Distributions by each Company to the relevant Shareholders pursuant to this Clause 11.1 will be made in accordance with the following priorities to the maximum extent permitted by the Applicable Laws of the Kingdom:

(i)

firstly, in repayment of the outstanding principal amount and any other amounts in respect of the Shareholder Loans; and

(ii)

secondly, to the relevant Shareholders by way of dividend or other Share Distribution as may be determined by the relevant Board of Managers in accordance with this Agreement, and except to the extent that the relevant Shareholders otherwise determine pursuant to Clause 7.2.

(c)

Subject to the foregoing, the Parties and the relevant Shareholders shall procure that each Company maximises the Distributions of Free Cash, subject to retaining the following funds in each Company:

(i)

funds reasonably required to fund maintenance of the Project in the manner contemplated by this Agreement and other expenses expressly contemplated in this Agreement, including required debt service, reserves or other funds pursuant to this paragraph (c) and the funding of community projects and funding of a Company's research and development programme pursuant to Clause 11.2;

(ii)

funds required to maintain working capital levels reasonably necessary to support the operations of a Company; and

(iii)

funds required to be reserved for capital expenditures in accordance with an approved Budget, including cash required to fund the equity portion of any Expansion or Value Added Project approved in accordance with this Agreement.

(d)

Subject to any restrictions or obligations contained in any Financing Agreement to which a Company is a party and after deduction of the amounts referred to in Clauses 11.1(a) and (Q1 each Company shall make Distributions of Free Cash for each Financial Year to the relevant Shareholders pro rata in accordance with their respective Shareholder Percentage as soon as is commercially practicable and in the manner set out in paragraph (b) above.

(e)

The Parties and the relevant Shareholders undertake to resolve to establish such reserves and/or carry forward or retain such profits as may be necessary to enable each Company to

comply with the terms of any Financing Agreements or credit facilities to which such Company is a party. If losses are incurred they shall be carried over to the next Financial Year and no profits shall be distributed until the losses are fully covered.

11.2

Local Community Projects; Research and Development Programme

(a)

The Parties shall procure that the Companies shall develop and agree policies with respect to:

(i)

(ii)

funding by the Companies of their research and development programmes in the minimum amount in the aggregate of one percent (I%) of th_e Companies' actual EBIT annually.

(b)

11.3

Tax and Zakat

(a)

(b)

12.

Accounting System, Books and Budgets

12.1

Accounting System and Standards

The Parties will ensure that each Company shall keep and maintain an accounting and cost accounting system allowing efficient control and allocation of all costs involved, and shall regularly

report to the Parties in accordance with the requirements of all Applicable Laws of the Kingdom and a system acceptable to the relevant Board of Managers, based on generally accepted accounting standards and applicable rules and regulations applied by the Saudi Organisation for Certified Public Accountants ("SOCPA") in the Kingdom and also in the International Financial Reporting Standards as issued by the International Accounting Standards Board from time to time ("IFRS").

12.2

Language of Reporting to the Shareholders

All reports and financial information provided to Parties and relevant Shareholders pursuant to this Clause 12 shall be prepared in Arabic and English.

12.3

Financial Statements

The Parties shall procure that each Company prepares the following:

(a)

(b)

(c)

not later than twenty (20) days after the end of each calendar month in each Financial Year, monthly unaudited management accounts for such calendar month, in accordance with SOCPA and IFRS; and

(d)

all financial statements and management accounts delivered to the Shareholders shall be accompanied by:

(i)

(ii)

a statement of the sources and application of funds of the relevant Company, showing actual expenditures compared to the applicable approved Budget(s);

(iii)

the latest estimate of the anticipated Commercial Production Date (if it shall not have occurred); and

(iv)

such other pertinent financial or other information as may reasonably be requested from time to time by any Party or Shareholder.

12.4

Books and Audit Rights

identifies a material error or omission in such books, financial affairs or any financial statements delivered by a Company to such Party or Shareholder in accordance with this Agreement, in which case the expenses of the Approved Accounting Firm (where so appointed) carrying out such inspection and/or audit shall be borne by such Company.

12.5

Statutory Obligations

12.6

Auditors

(a)

The initial Auditors shall be appointed by the Parties as soon as reasonably practicable following the Effective Date.

(b)

(c)

12.7

Rights of Managers not Limited

12.8

Annual and Special Budgets

(a)

(b)

(i)

(ii)

(iii)

projected financial statements for such Financial Year reflecting the foregoing; and

(iv)

an estimate of the sources and uses of funds for such Financial Year, including any estimated Required Shareholder Funding, the estimated amount and timing of any Cash Calls, the estimated amount and timing of any Share Distributions and the form of any such Distributions.

(c)

The Parties shall procure that each Company shall promptly report to the relevant Shareholders:

(i)

(ii)

any anticipated material deviations from the estimates set out in any approved Budget of the amounts and timing of any Required Shareholder Funding or Cash Calls.

(d)

12.9

Emergency Funding

(a)

(b)

(c)

Prior to the incorporation of any Company, the Development Committee shall promptly notify the Parties of the occurrence of any of the circumstances referred to in paragraph (a) above and the Development Committee may issue a Development Committee Funding Call subject to compliance with the terms and conditions of Clause 4 above.

13.

Entry Payment, Pre-Incorporation Costs and Transfer of Pre-Incorporation Materials

13.1

Payment of Entry Payment and Pre-Incorporation Costs

(a)

Alcoa agrees that Ma'aden has incurred certain Pre-Incorporation Costs as described in Schedule 3 in developing the Project up to the date specified in Schedule 3 (the "Calculation Date"). Alcoa has audited and agreed to certain of the Pre-Incorporporation Costs being in aggregate one hundred and thirty-five million US Dollars (US$135 million) (the "Agreed Pre-Incorporation Costs"). In respect of the balance of the Pre-Incorporation Costs, the Parties will review and agree upon the amount of such costs that are

chargeable to the Project (the "Additional Pre-Incorporation Costs").

(b)

Simultaneously with signing this Agreement on the Effective Date, Alcoa shall pay to Ma'aden the following amounts: (i) eighty million US Dollars (US$80 million) comprising the entry payment payable by Alcoa in respect of the opportunity to participate in the Project (the "Entry Payment")- paid 24 December 2009; and (ii) thirty four million US Dollars (US$34 million) comprising Alcoa's pro rata share, based on its Shareholder Percentage set out in Clause 4.1, of the Agreed Pre-Incorporation Costs incurred by Ma'aden prior to the Calculation Date (which following receipt of such payment by Ma'aden, shall be deemed to be Pre-Incorporation Costs of Alcoa as approved by the Parties).

(c)

The payments referred to in paragraph (b) above are required to be made in cash simultaneously with the signing of this Agreement. Accordingly, Alcoa shall ensure either that (i) such payments have, prior to signature of this Agreement, been credited to the account nominated by Ma'aden for such payment, or (ii) Alcoa shall provide at its cost an irrevocable and unconditional standby letter of credit in favour of Ma'aden in a form and issued by a bank or financial institution acceptable to Ma'aden in an amount equal to the aggregate of the amounts in sub-paragraphs (b)(i) and (b)(ii) above, such standby letter of credit to be provided to Ma'aden simultaneously with the signature of this Agreement as security for such payment. Ma'aden shall be entitled to draw on the standby letter of credit by first written demand to the bank or financial institution issuing the standby letter of credit. Ma'aden shall return such standby letter of credit to Alcoa for cancellation immediately following receipt in full by Ma'aden of the amounts referred to in paragraph (b).

(d)

Alcoa shall pay to Ma'aden Alcoa's pro rata share of the Additional Pre-Incorporation Costs based on its Shareholder Percentage upon Financial Close for Phase 1.

(e)

From the Calculation Date until the date of incorporation of each Company and appointment of its Board of Managers, each Party shall obtain the written consent of the other Party (not to be unreasonably withheld) or of the Development Committee before incurring Project Costs which have not been pre-approved by the Parties and included in the Pre-Financing Budget or the Project Budget (as the case may be), and such approved or pre-approved Project Costs shall constitute part of the Pre-Incorporation Costs. If a Party incurs costs between the Calculation Date and the date of incorporation of the relevant Company and appointment of the relevant Board of Managers as aforesaid, that have not been approved by the other Party or the Development Committee in accordance with this Clause 13.l(d), or have not been included in the Pre-Financing Budget or the Project Budget (as the case may be), such Party shall not be entitled to any contribution to such costs from the other Party or reimbursement of such costs by the relevant Company pursuant to Clause 13.2. Notwithstanding the foregoing, nothing in this Agreement shall restrict a Party from incurring such cost if it considers it appropriate to do so at its own cost and risk (as aforesaid), and subject to any subsequent determination by the Development Committee or the relevant Board of Managers (as the case may be) that such costs should be recognised as Pre-Incorporation Costs.

(f)

For the avoidance of doubt, no Party shall be entitled to reimbursement of any costs incurred in negotiating this Agreement or any other agreement that such Party or its Affiliates is to enter into with any Company (or with the other Party on behalf of any Company).

(g)

Each Party shall be entitled to charge to the Companies the Pre-Incorporation Costs which such Party and its Affiliates have incurred prior to the date of reimbursement of Pre-Incorporation Costs pursuant to Clause 13.2(a). such costs and expenses to be paid by the Companies on an equal basis (or such other basis as may be agreed by the Parties) out of the respective amounts of Share Capital contributed pursuant to Clause 4.1, in accordance with the provisions of this Clause 13.

13.2

Reimbursement of Pre-Incorporation Costs

(a)

Pre-Incorporation Costs shall be reimbursed by the relevant Company (as determined by the Parties) within thirty (30) days from the date of incorporation of such Company in accordance with, and on the basis set out in, Schedule 3.

(b)

Without prejudice to Clauses 6.1 and 6.2, promptly following the date of incorporation of the relevant Company, the Parties shall assign and transfer their rights in the Pre Incorporation Materials to such Company.

14.

Events of Default and Consequences

14.1

Events of Default

The following shall constitute an "Event of Default" in respect of a Party or its Affiliate holding Shares (the "Defaulting Party") for the purposes of this Agreement:

(a)

(b)

(c)

an Act of lnsolvency shall have occurred in respect of the Defaulting Party or, if applicable, any member of the Defaulting Party's group that has guaranteed the obligations of the Defaulting Party or its Affiliates pursuant to this Agreement;

(d)

the Defaulting Party shall have committed any breach (or series of breaches) of the provisions of this Agreement (other than as contemplated by paragraphs (a) to (c) above or paragraph (e) below) and such breach constitutes or evidences a failure on the part of the Defaulting Party to comply with its obligations under this Agreement to an extent that has, or is likely to have, a Material Adverse Effect and such breach is not remedied within twenty eight (28) days of written notice thereof from the relevant Company or the Non Defaulting Party to the Defaulting Party (a "Material Breach"); or

(e)

in respect of the period prior to incorporation of each Company and appointment of the relevant Board of Managers, the Defaulting Party shall have failed to advance (or procure the advancing of) the amount specified in a Development Committee Funding Call under Clause 4.2(a) by the due date for payment and such failure is not remedied within fourteen

(14) days of a written notice thereof from the Non-Defaulting Party to the Defaulting Party.

14.2

Consequences of Events of Default

(a)

if Ma'aden is the Non-Defaulting Party, it shall be entitled to purchase Alcoa's Transferable

Interests in accordance with Clause 14.3 below. If Alcoa is the Non-Defaulting Party, it shalt be entitled to sell its Transferable Interests to Ma'aden in accordance with Clause 14.5_ below;

(b)

in the case of an Event of Default under Clause 14.l(b)-(d), the Defaulting Party shall, in addition to the consequences arising from the remaining sub-paragraphs of this Clause 14.2, not be entitled to any Distributions or to otherwise participate in the profits of any Company under this Agreement, the Articles of Association of any Company or otherwise during the period that such Event of Default subsists;

(c)

in the case of a Funding Default, the consequences set out in Clause 14.4 shall apply in addition to this Clause 14.2;

(d)

in the case of an Event of Default occurring prior to the incorporation of any Company and appointment of the relevant Board of Managers, including under Clause 14.l(e), the consequences set out in Clause 14.6 shall apply in addition to this Clause 14.2.

14.3

Transfer Upon Event of Default of Alcoa

(a)

In the case of an Event of Default of Alcoa following the incorporation of any Company, Ma'aden, as the Non-Defaulting Party, shall, without prejudice to any other rights or claims available to it, have the right to purchase, and require Alcoa to sell, Alcoa's Transferable Interests pursuant to Clause 14.2(a). in the following manner:

(i)

on the first day immediately following: the occurrence of the Event of Default under Clause 14. l(c): the expiry of the relevant cure period in the case of Events of Default under Clause 14. l (b) or (d); or, in the case of a Funding Default under Clause 14.l(a). immediately following the expiry of the Cure Period and subject to Clause 14.4(f)(ii): (in each case, the "Call Date"), if such circumstance shall continue to subsist, Alcoa shall be deemed to have offered to sell and to procure the sale by its Affiliates of alt right, title and interest in all of Alcoa's Transferable Interests to Ma'aden upon and subject to the terms and conditions set out in this Clause 14;

(ii)

Ma'aden may, by notice in writing given to Alcoa and each Company not later than the forth fifth (45^th day following the Call Date, elect to accept Alcoa's offer respect of all (but not less than all) of Alcoa's Transferable Interests, failing which Ma'aden shall be deemed to have rejected such offer;

(iii)

(iv)

(b)

If Ma'aden elects to accept Alcoa's offer to purchase its Transferable Interests, the purchase price for Alcoa's Transferable Interests shall be as follows:

(i)

in the event that the Financing Completion Date for Phase 1 has not occurred, at a consideration of US$1.00 and provided that Alcoa shall be required to make payment in respect of its pro rata share based on its Shareholder Percentage of any unpaid Agreed Pre-Incorporation Costs and any Funding Default then attributable to Alcoa;

(ii)

in the event that the Financing Completion Date for Phase 1 has occurred but the Commercial Production Date in respect of the elements of the Project comprised in Phase 1 has not occurred, at a consideration equal to sixty percent (60%) of the Paid In Capital and Shareholder Loans of Alcoa in respect of all of the Companies at the date of transfer less the amount of Alcoa's pro rata share based on its Shareholder Percentage of any unpaid Agreed Pre-Incorporation Costs;

(iii)

in the event that the Commercial Production Date in respect of the elements of the Project comprised in Phase 1 has occurred but the fifth (5th) anniversary of such date has not occurred, at a consideration equal to seventy five percent (75%) of the Fair Market Value of Alcoa's Transferable Interests at the date of transfer; and

(iv)

in the event that the fifth (5th) anniversary referred to in sub-paragraph (iii) has occurred, at a consideration equal to eighty five percent (85%) of the Fair Market Value of Alcoa's Transferable Interests at the date of transfer,

as determined (in the case of sub-clauses (iii) and (iv)) by the Valuers in accordance with the provisions of Clause 18 which provisions shall apply mutatis mutandis; and the Parties hereby acknowledge and agree that any discount contemplated by this paragraph (b) does not (and shall not be construed to) constitute a penalty imposed on Alcoa and that such discount reflects the Parties' genuine pre-estimate of the damages that Ma'aden would suffer in the circumstances contemplated by this Clause 14. In each case, any amount of accrued and unpaid Default Commission shall be deducted from the amounts otherwise payable to Alcoa. For the avoidance of doubt, the Entry Payment shall not be reimbursed in the event of any purchase of Alcoa's Transferable Interests pursuant to this Clause 14.3.

(c)

The Valuer referred to under paragraph (b) above shall be appointed and instructed to determine the Fair Market Value of Alcoa's Transferable Interests not later than the Call Date. The costs of the Valuer incurred in connection with the determination of the Fair Market Value of Alcoa's Transferable Interests shall be paid promptly by Alcoa upon receipt of an invoice therefor and in any event prior to the Closing Date, failing which such costs may be deducted by Ma'aden from the purchase price payable to Alcoa for the Transferable Interests in such manner as Ma'aden may determine acting reasonably (and Ma'aden shall then promptly pay such costs).

(d)

(e)

Nothing in this Clause 14.3 shall be construed to require Ma'aden to exercise any of the above rights.

(f)

Any transfer under this Clause 14.3 shall have effect to transfer Alcoa's Transferable Interests free and clear of any Encumbrance, subject to the Financing Agreements.

14.4

Additional Consequences of a Funding Default

(a)

(b)

(c)

(i)

firstly, to pay any accrued and unpaid Default Commission owing by such Defaulting Party to the Company;

(ii)

second, to meet such Defaulting Party's obligations to advance Required Shareholder Funding; and

(iii)

the balance (if any) shall be paid to the Defaulting Party,

and the application of such funds shall be deemed to discharge in full the obligations of the relevant Company to the Defaulting Party in respect of any such Share Distribution.

(d)

(e)

If the Non-Defaulting Party makes an election in accordance with paragraph (d) above, then:

(i)

the Non-Defaulting Party shall advance the Default Amount (including any accrued and unpaid Default Commission) within twenty (20) days after the date of the Non Defaulting Party's notice to the relevant Company and the Defaulting Party confirming its election to contribute the Default Amount pursuant to paragraph (d) above; and

(ii)

(ii) the sum equal to the application of the Commission Rate on the Default Amount from the date of payment by the Non-Defaulting Party until the date of reimbursement by the Defaulting Party.

(f)

If, following expiry of the Cure Period, a Funding Default is continuing and has not been cured in accordance with sub-paragraph (g) below:

(i)

(ii)

if the Non-Defaulting Party is Ma'aden, then Ma'aden shall have the right to terminate the Agreement and purchase all of Alcoa's Transferable Interests m accordance with Clause 14.3; and

(iii)

if the Non-Defaulting Party is Alcoa, Alcoa shall have the right to terminate the Agreement and sell all of its Transferable Interests to Ma'aden in accordance with Clause 14.5.

(g)

(i)

(ii)

the exercise by the relevant Company of its right to set-off Share Distributions against the obligations of the Defaulting Party in respect of such Funding Default pursuant to Clause 14.4(c); or

(iii)

14.5

Ma'aden as the Defaulting Party

(a)

In the event of an Event of Default by Ma'aden following the incorporation of any Company, Alcoa shall, without prejudice to any other rights or claims available to it, have the right to require Ma'aden to purchase all of Alcoa's Transferable Interests pursuant to Clause 14.2(a). in the following manner:

(i)

Alcoa may, by notice in writing given to Ma'aden and the relevant Company not later than the thirtieth (30m) day following: the occurrence of the Event of Default under Clause 14.1 (c); the expiry of the cure period in the case of an Event of Default under Clause 14.l(b) or (d); or in the case of a Funding Default under Clause 14.1(a) immediately following the expiry of the Cure Period and pursuant to

Clause 14.4(f)(iii). elect to sell all (but not less than all) of its Transferable Interests to Ma'aden; and

(ii)

Ma'aden shall purchase all of Alcoa's Transferable Interests, and Alcoa shall be obliged to sell, transfer and assign such Transferable Interests to Ma'aden on the date which is twenty (20) Business Days following the notice referred to in sub paragraph (i) above, or such other date as may be agreed between the Parties, in the amounts stipulated under paragraph (b) below;

(b)

The purchase price for Alcoa's Transferable Interests shall be as follows:

(i)

in the event that the Financial Completion Date for Phase l has not occurred, at a consideration equal to the Paid In Capital and Shareholder Loans of Alcoa in respect of all of the Companies at the date of transfer as well as the repayment by Ma'aden of the Entry Payment;

(ii)

in the event that the Financial Completion Date for Phase l has occurred but the Commercial Production Date in respect of the elements of the Project comprised in Phase 1 has not occurred, at a consideration equal to one hundred and fifteen percent (115%) of the Paid In Capital and Shareholder Loans of Alcoa in respect of all of the Companies at the date of transfer as well as the repayment by Ma'aden of the Entry Payment; and

(iii)

after the Commercial Production Date in respect of the elements of the Project comprised in Phase 1, at a consideration equal to one hundred percent (100%) of the Fair Market Value of Alcoa's Transferable Interests,

as determined (in the case of sub-paragraph (iii)) by the Valuers in accordance with the provisions of Clause 18 which provisions shall apply mutatis mutandis. In each case, any amount of accrued and unpaid Default Commission by Alcoa shall be deducted from the amounts otherwise payable to Alcoa. For the avoidance of doubt, the Entry Payment shall not be reimbursed in the event of any purchase of Alcoa's Transferable Interests pursuant to this Clause 14.5.

(c)

The costs of the Valuer incurred in connection with the determination of the Fair Market Value of Alcoa's Transferable Interests under sub-paragraph (b)(iii) above shall be paid promptly by Ma'aden upon receipt of an invoice therefor and in any event prior to the date referred to in Clause 14.5(a)(ii). failing which such costs may be added by Alcoa to the purchase price payable by Ma'aden for the Transferable Interests in such manner as Alcoa may determine acting reasonably (and Alcoa shall then promptly pay such costs).

(d)

(e)

Nothing in this Clause 14.5 shall be construed to require Alcoa to exercise any of the above rights.

(f)

Any transfer under this Clause 14.5 shall have effect to transfer such Transferable Interests free and clear of any Encumbrance, subject to the Financing Agreements.

14.6

Default Prior to Incorporation of any Company

If an Event of Default has occurred prior to the incorporation of any Company, the following shall apply in respect of any of the Companies which is not incorporated at such time:

(a)

Following an Event of Default by Alcoa, Ma'aden shall, without prejudice to any other rights or claims available to it, have the right to terminate this Agreement by fourteen (14) days notice in writing given to Alcoa following: the occurrence of an Event of Default under Clause 14.1 ( c): or the expiry of the relevant cure period in the case of an Event of Default

under Clause 14.1 (d) or (e). In the event of such termination, Alcoa shall assign and transfer to Ma'aden its rights to and in all Pre-Incorporation Materials in consideration of the payment ofUS$1.00 by Ma'aden.

(b)

Following an Event of Default by Ma'aden, Alcoa shall, without prejudice to any other rights or claims available to it, have the right to terminate this Agreement by fourteen (14) days notice in writing given to Ma'aden following: the occurrence of an Event of Default under Clause 14.1 (c); or the expiry of the relevant cure period in the case of an Event of Default under Clause 14.1 (d) or (e). In the event of such termination, Alcoa shall assign and transfer to Ma'aden its rights to and in all Pre-Incorporation Materials in consideration of the repayment by Ma'aden to Alcoa of the aggregate amount of the Entry Payment and the proportion of the Pre-Incorporation Costs which have been paid by Alcoa prior to such termination except to the extent that any such Pre-Incorporation Costs have been reimbursed to Alcoa by any Company that has been incorporated prior to such Event of Default or have been or will be recovered by Alcoa as part of the Paid In Capital or Shareholder Loans reimbursed pursuant to this Clause 14.

14.7

Other Remedies

15.

Failure to Achieve Financial Completion Date for Phase I by the Financing Longstop Date

15.1

Compensation on Buy-Out

(a)

The Parties intend to implement the Project expeditiously and in accordance with this Agreement so that the Financing Completion Date for Phase l is achieved by the Financing Longstop Date and the NTP for Phase 1 is issued as soon as possible thereafter (or earlier if so agreed by the Parties). Each Party shall, and shall procure that the relevant Manager(s) appointed by it, act and vote reasonably and in good faith in connection with the approval and execution of the Financing Agreements for Phase l and any proposal to approve the issuing of the NTP for Phase 1. The Parties shall monitor progress towards the achievement of the Financing Completion Date and, if the Financing Completion Date has not been achieved by the initial Financing Longstop Date, the Parties shall extend the Financing Longstop Date by four (4) months or such shorter period as the Parties may agree. The Parties may agree on subsequent extensions in their discretion. If the Financing Completion Date for Phase l is not achieved by the Financing Longstop Date (as may be extended), the provisions of this Clause 15 shall apply; provided always that, if the Financing Completion Date for Phase 1 is not achieved by the Financing Longstop Date (as may be extended) due to a Party's (or its Affiliate Shareholder's) action or inaction on a matter that is reasonably within its control and, but for such action or inaction, the Financing Completion Date for Phase I would have been achieved on or before the said Financing Longstop Date, such Party shall not be entitled to invoke the provisions in sub-clauses (b) and (c) below.

(b)

If the Financing Completion Date for Phase 1 has not occurred by the Financing Longstop Date (as may be extended) due to the proposed Senior Lenders or their successors or replacements no longer offering materially the same terms under the proposed Financing Agreements for Phase l as they had offered under the Senior Lender Commitment Letters, or terms otherwise acceptable to the Parties, the Parties will have the options set out in this paragraph (b). If either Ma'aden or Alcoa, acting reasonably and in good faith, concludes that further extensions of time either will not result in acceptable terms or would result in an unreasonable delay in the Project, then (A) Ma'aden shall have the right to purchase and to require Alcoa to sell or (B) Alcoa shall have the right to sell and Ma'aden shall be required to purchase, all of Alcoa's Transferable Interests. The consideration for the purchase of Alcoa's Transferable Interests will be based upon (I) the Paid In Capital and Shareholder Loans of Alcoa in respect of all the Companies, plus (II) the Entry Payment, and shall be payable as set forth below, notwithstanding the earlier transfer of the Transferable Interests:

(i)

If Ma'aden proceeds with the Project and achieves Financial Close in respect of the Project within a period of fifteen (15) months following the transfer of Alcoa's Transferable Interests, one hundred percent (100%) of the above consideration shall be payable;

(ii)

If Ma'aden proceeds with the Project and achieves Financial Close in respect of the Project within the period between fifteen (15) and twenty-one (21) months following the transfer of Alcoa's Transferable Interests, seventy-five percent (75%) of the above consideration shall be payable;

(iii)

If Ma'aden proceeds with the Project and achieves Financial Close in respect of the Project within the period between twenty-one (21) and twenty-seven (27) months following the transfer of Alcoa's Transferable Interests, fifty percent (50%) of the above consideration shall be payable: and

(iv)

If Ma'aden does not achieve Financial Close in respect of the Project within twenty seven (27) months following the transfer of Alcoa's Transferable Interests, no consideration shall be payable.

(c)

If the Financing Completion Date for Phase 1 has not occurred by the Financing Longstop Date (as may be extended) even though the proposed Senior Lenders or their successors or replacements are prepared to offer materially the same terms under the proposed Financing Agreements for Phase 1 as they had offered under the Senior Lender Commitment Letters, or terms otherwise acceptable to the Parties and Ma'aden intends to continue with the Project and to issue the NTP for Phase 1 within the following four (4) months, the procedure set out in this paragraph (c) shall apply. Ma'aden may, at any time following the said Financing Longstop Date, give notice to Alcoa requesting that Alcoa either (i) continue with the Project on the proposed financing terms, or (ii) decline to continue with the Project on such terms. Unless Alcoa shall within sixty (60) days confirm that it is prepared to continue with the Project on the proposed financing terms and to issue the NTP for Phase 1 as aforesaid (or if Alcoa has so confirmed but subsequently fails to take the required actions to issue the NTP for Phase 1), Alcoa shall be deemed to have offered to transfer to Ma'aden and Ma'aden shall have the right to purchase, all of Alcoa's Transferable Interests for nominal consideration, so as to take effect immediately prior to the issuance of the NTP for Phase 1, and without Alcoa having any further right to recover its Paid In Capital, Shareholder Loans and/or Entry Payment.

15.2

Transfer on Financing Longstop Date

(a)

Where Ma'aden has the right to purchase, and require Alcoa to sell, all of Alcoa's Transferable Interests pursuant to Clause 15.l(b) or (c), or Alcoa has the right to sell to

Ma'aden, and Ma'aden has the obligation to purchase, all of Alcoa's Transferable Interests pursuant to Clause 15. l(b) as the case may be, the following shall apply:

(i)

on the relevant date under Clause 15.l(b) or (c), Alcoa shall either offer or be deemed to have offered to sell and to procure the sale by its Affiliates of all right, title and interest in all of Alcoa's Transferable Interests to Ma'aden upon and subject to the terms and conditions set out in this Claus e 15;

(ii)

Ma'aden may, by notice in writing given to Alcoa and each Company not later than the forty fifth (45^th) day following the date of the offer or deemed offer under paragraph (i), elect to accept Alcoa's offer (or, if Alcoa has provided actual notice of its desire to sell to Ma'aden, must accept Alcoa's offer) in respect of all (but not less than all) of Alcoa's Transferable Interests, failing which Ma'aden shall be deemed to have rejected such offer;

(iii)

provided that Ma'aden has accepted Alcoa's offer in respect of all (but not less than all) of Alcoa's Transferable Interests, Ma'aden shall purchase all of Alcoa's Transferable Interests, and Alcoa shall be obliged to sell, transfer and assign such Transferable Interests to Ma'aden, on the date specified in sub-paragraph (iv) below and in the amounts stipulated under paragraph (b) below; and

(iv)

the completion of the purchase and sale of all of Alcoa's Transferable Interests shall take place on the date which is ten (10) Business Days following the acceptance of the offer under sub-paragraph (ii) above, or such other date as may be agreed between the Parties.

(b)

If Ma'aden elects to accept Alcoa's offer to purchase its Transferable Interests, Alcoa shall sell such Transferable Interests to Ma'aden at the price and at the time determined in accordance with Clause 15.1.

(c)

(d)

Nothing in this Clause 15.2 shall be construed to require Ma'aden to exercise any of the above rights.

(e)

Any transfer under this Clause 15.2 shalt have effect to transfer all of Alcoa's Transferable Interests free and clear of any Encumbrance, subject to the Financing Agreements.

16.

Termination and Expiry

16.1

Full Termination and Expiry

This Agreement shall remain in full force and effect until the earlier of:

(a)

the expiry of the Agreement pursuant to Clause 2.2;

(b)

the written agreement of the Parties that the Agreement be terminated;

(c)

the date upon which there is only one Shareholder in each Company (including following a transfer of all of Alcoa's Transferable Interests pursuant to Clauses 14 or 15 or following a transfer to Ma'aden under Clause 17);

(d)

termination pursuant to the exercise by a Party of a right to terminate the Agreement in accordance with its terms; or

(e)

the termination of the Gas Allocation Letter without being superseded by an appropriate gas supply agreement.

16.2

Partial Termination

16.3

Consequences of Termination at the Expiry of the Term

Following termination of this Agreement pursuant to Clause 2.2, there shall be an orderly liquidation of the assets of each Company, following which each Company shalt be dissolved.

16.4

Consequences following Termination

(a)

In the event of termination of the Agreement for any reason whatsoever, there shall be no restriction on Ma'aden continuing with the development of the Project (with or without an alternative joint venture partner) and Ma'aden shall be entitled to proceed with the Project, either alone or with other parties and shall be entitled to utilise for the purposes of the Project all Pre-Incorporation Materials and other documents and materials it has developed itself, or which have been jointly developed by the Parties, relevant Shareholders or the particular Company or otherwise provided by a Party for the purposes of the Project pursuant to the Agreement including, for the avoidance of doubt, all Intellectual Property and IP Information in the same in accordance with Clause 26.4. It is envisaged that certain intellectual property licence agreements may be entered into by Ma'aden and/or the Companies with Alcoa and/or its Affiliates under which Alcoa and/or its Affiliates would licence to Ma'aden and/or the Companies certain Intellectual Property (including certain technologies) and provide technical support services in connection with the Project. For the avoidance of doubt, any such intellectual property licence agreements shall remain in full force and effect, without restriction (other than such customary restrictions as are acceptable to Ma'aden), notwithstanding any termination of the Agreement and Ma'aden and the Companies shall be entitled to continue to use the Intellectual Property under such intellectual property licence agreements and Alcoa and its Affiliates shall continue to provide the technical support services in respect of the Project pursuant to the terms of such agreements.

(b)

In the event of a termination of the Agreement for any reason other than for the default of Ma'aden pursuant to Clause 14.5 or 14.6(b}. Alcoa shall, if requested by a Company or Ma'aden (if such termination occurs prior to incorporation of each Company),

(i)

provide such services as listed in Schedule 14 at cost (as defined in Clause 5.3) and for a period of twenty four (24) months following such termination, where such termination occurs before the Commercial Production Date; or

(ii)

provide such services as listed in Schedule 14 at cost (as defined in Clause 5.3) and for a period of twelve (12) months following such termination, where such termination occurs after the Commercial Production Date,

and in each case in such a manner so as to facilitate an orderly handover of activities undertaken by Alcoa personnel engaged in the Project.

(c)

In the event of a termination of the Agreement due to a default of Ma'aden pursuant to Clauses 14.5 or 14.6(b). Alcoa will have no obligation to provide the services listed in Schedule 14 to any Company.

(d)

The Parties shall execute all such documentation and do all such other acts as may be necessary or desirable to give effect to this Clause 16.4.

16.5

Survival and Rights Unaffected

(a)

Any expiry or termination shall be without prejudice to the rights and obligations accrued as at such date.

(b)

Notwithstanding any termination or expiry of this Agreement, whether as to any Party or in its entirety, the following provisions shall survive such termination or expiry as to all Parties: Clauses l (Definitions and Interpretation), 13 (Entry Payment, Pre-Incorporation Costs and Transfer of Pre-Incorporation Materials), 16.4 (Consequences following Termination), 16.5 (Survival and Rights Unaffected), 21 (Governing Law etc), 22 (Confidentiality and Public Announcements), 23 (Notices) and 26 (General Provisions). The Parties shall be deemed to continue to be parties to the Agreement for such purposes only.

17.

Sale or Transfer of Shares, Pledge

17.1

General Prohibitions

(a)

Unless permitted by this Clause 17 or with the prior written consent of Alcoa, neither Ma'aden nor any Affiliate of Ma'aden shall do, or agree to do, any of the following:

(i)

sell, transfer or otherwise dispose of, any of its Transferable Interests or any interest in any of its Transferable Interests;

(ii)

encumber any of its Transferable Interests or any interest in any of its Transferable Interests;

(iii)

enter into any agreement or arrangement in respect of the votes or other rights attached to any of its Transferable Interests; or

(iv)

enter into any agreement or arrangement to do any of the foregoing.

(b)

The Alcoa Affiliate that will hold Alcoa's Transferable Interests in the Smelting Company and the Rolling Company shall be directly or indirectly wholly legally and beneficially owned by Alcoa, and the Alcoa Affiliate that will hold its Transferable Interests in the Mining & Refining Company shall be directly or indirectly wholly legally and beneficially owned 60% (or more) by Alcoa, and 40% by Alumina Limited, a company listed on the Australian Stock Exchange with registered number ABN 85 004 820 419 ("Alumina Limited"), subject to the following provisions of this sub clause (b). Unless penrmitted by Clauses 14 or 15 or this Clause 17 but subject to Clause 17.l(c) below, Alcoa shall not and shall procure that its Affiliates shatl not, (notwithstanding the provisions of Clause 17.2) without the prior written consent of Ma'aden do, or agree to do, any of the following:

(i)

enter into any transaction or series of transactions which have the aim or effect of directly or indirectly selling, transferring or otherwise disposing of legal and/or beneficial interests in relation to the Transferable Interests to any person who is not directly or indirectly wholly legally and beneficially owned by Alcoa (or in the case of any Transferable Interests in the Mining & Refining Company 60% (or more) by Alcoa and 40% by Alumina Limited);

(ii)

Transferable Interests in the Mining & Refining Company 60% (or more) by Alcoa and 40% by Alumina Limited);

(iii)

enter into any agreement or arrangement to encumber any of its Transferable Interests or any interest in any of its Transferable Interests to any person who is not directly or indirectly wholly legally and beneficially owned by Alcoa (or in the case of any Transferable Interests in the Mining & Refining Company 60% (or more) by Alcoa and 40% by Alumina Limited); or

(iv)

enter into any agreement or arrangement to do any of the foregoing.

(c)

Notwithstanding the above, Alcoa shall, provided it has supplied Ma'aden in writing with sufficient information to identify the parties involved and all relevant material terms of such transaction thirty (30) days in advance of the consummation by Alcoa of any such transaction, be permitted to enter into a significant strategic joint venture or similar transaction involving all or a substantial portion of Alcoa's interests in the relevant business of bauxite mining and alumina refining, aluminium smelting and/or aluminium rolling, as the case may be, provided that (i) the proportion of the revenues properly attributable to Alcoa's Transferable Interests in the Project is not material in comparison to the total revenues in respect of all of Alcoa's operations which are included within such transaction in the calendar year prior to such transaction; and (ii) such transaction is entered into only with a strategic partner rather than financial investors. For the purposes of this clause: a "strategic partner" is a person and/or group of persons who are, immediately prior to the date of any such transaction with Alcoa, engaged in the business of owning and operating bauxite mines and alumina refineries, aluminium smelters and/or aluminium rolling mills, as the case may be, in each case, including operations outside the Kingdom: and the proportion of revenues shall not be considered to be material if it is less than the initial Shareholder Percentage of Alcoa."

17.2

Transfers to Affiliates

(a)

the transferring Party gives not less than thirty (30) days' prior written notice of the transfer to the other Party;

(b)

(c)

(d)

(e)

a guarantee is provided in substantially the form set out in Schedule 1 by Alcoa in respect of the obligations of such Affiliate, or by Ma'aden in respect of the obligations of its such

Affiliate under this Clause 17.2 (but not, for the avoidance of doubt, in respect of a KSA Controlled Transferee under Clause 17.3).

17.3

Permitted Transfers

(a)

(30) days' prior written notice to Alcoa of such a proposed transfer including details of the proposed KSA Controlled Transferee. Ma'aden shall procure that, as a condition to such transfer, the KSA Controlled Transferee sha11 agree to be bound by all the terms of this Agreement and shall execute an Adherence Agreement.

(b)

Alcoa shall give its consent to the sale, transfer and assignment under paragraph (a) above and the provisions of Clauses 17.4 to 17.7 shall not apply to such sale, transfer and assignment.

17.4

Transfers of Shares

Other than as provided in Clause 17.2 and Clause 17.3 and subject to Clause 17.8, at any time after the fifth anniversary of the Commercial Production Date, any Party on behalf of itself and any Affiliate that is a Shareholder (the "Selling Party") may transfer all but not less than all of its Shares and all of the Shareholder Loans held by such Party and its Affiliates (if applicable) to a third party ("Third Party Offeror") only if it receives an offer (the "Offer") from such Third Party Offeror which:

(i)

is a bona fide offer in writing;

(ii)

is irrevocable during the period of the Offer;

(iii)

is for cash consideration only; and

(iv)

contains all material terms and conditions (including the offer price (the "Offer Price") and the intended completion date of the Offer),

and in circumstances in which the Selling Party complies with the remaining provisions of this Clause 17.

17.5

Notice of Offers

(a)

(b)

17.6

Notice of Right to Match the Offer

the Right to Match the Offer should include full details of all terms and conditions of the Offer, including the price, and a copy of the Offer.

l 7.7

Right of Remaining Party to Match the Offer

(a)

(b)

(c)

17.8

Transfer Requirements

All transfers of Transferable Interests pursuant to this Agreement shall be subject:

(i)

to the transfer being in compliance with Applicable Laws of the Kingdom;

(ii)

(iii)

to obtaining any approvals required from the competent authorities;

(iv)

(v)

if the transferee is not already a Shareholder, to the execution by the transferee of an Adherence Agreement, no later than the Transfer Date;

(vi)

(vii)

17.9

Completion of Transfer

The transfer of Transferable Interests pursuant to this Agreement shall be made on the following terms:

(a)

Completion of the transfer of the Transferable Interests shall take place on the Transfer Date, which shall be within ninety (90) days after the date of expiry of the Right to Match

the Offer Period in the event of a transfer to the Remaining Party pursuant to Clause 17.7 and at such reasonable time and place as the Parties agree; and

(b)

Payment of the purchase price for the Transferable Interests will be due on the Transfer Date, unless otherwise agreed, and shall be paid to the account notified for such purpose by the transferee.

17.10

General

The Parties shall keep each Company informed, at all times, of the issue and contents of any notice(s) served pursuant to this Clause 17 and any election or acceptance relating to those notices.

17.11

Further Assurances; Sole Shareholder

17.12

Put And Call Option

Alcoa hereby grants to Ma'aden an option (the "Put Option") to require Alcoa to purchase from Ma'aden (i) such number of Shares as at the relevant time constitutes 14.9% of the total issued Shares of each of the Companies; and (ii) 14.9% of the total aggregate Shareholder Loans provided to each of the Companies (the "Option Interests"), on the terms set out in this Clause 17. Ma'aden hereby grants to Alcoa an option (the "Call Option") to require Ma'aden to sell to Alcoa all of the Option Interests on the terms set out in this Clause 17.

The Put Option may only be exercised by Ma'aden and the Call Option may only be exercised by Alcoa within a period of six (6) months from the date falling five (5) years after the last of the Commercial Production Dates for the three Companies (the "Option Period") and shall be exercised simultaneously for all of the Companies. If the Put Option or the Call Option is not exercised during the Option Period, it shall lapse.

The Put Option shall be exercised by Ma'aden giving Alcoa written notice (the "Put Option Notice") which shall include:

(i)

a statement to the effect that Ma'aden is exercising the Put Option; and

(ii)

a signature by or on behalf of Ma'aden.

The Call Option shall be exercised by Alcoa giving Ma'aden written notice (the "Call Option Notice") which shall include:

(i)

a statement to the effect that Alcoa is exercising the Call Option; and

(ii)

a signature by or on behalf of Alcoa.

The Put Option and the Call Option may be exercised only in respect of all of the Option Interests.

All Distributions resolved or declared to be paid or made by the relevant Company in respect of the Option Interests by reference to a record date which falls on or before the date on which completion of the sale of the Option Interests under the Put Option (the "Put Option Completion Date") or the Call Option (the "Call Option Completion Date") (as the case may be) occurs shall belong to, and be payable to, Ma'aden. For the purposes of this Clause 17.11, "completion" shall be the date when the Parties sign before a notary the required shareholders resolutions authorising the amendment of each of the Companies' articles of association to reflect the transfer.

The consideration payable by Alcoa for the Option Interests (the "Option Consideration") shall be calculated in accordance with the provisions of Clause 17.12.

The Parties shall use their respective reasonable endeavours to:

(i)

procure that the Option Consideration shall be finally determined as quickly as possible consistent with the provisions of Clause 17.12; and

(ii)

no later than twelve (12) months following the determination of the Option Consideration, take all such action as may reasonably be required to give effect to any transfer of the Option Interests pursuant to this Clause 17.11, including cooperating in obtaining approvals required from all relevant Governmental Authorities.

(3) Business Days prior to the Put Option Completion Date or the Call Option Completion Date (as applicable).

17.13

Put and Call Option Valuations

(a)

Option Consideration

The Parties shall act in good faith to determine the Option Consideration and, in doing so, shall follow the approach and apply the valuation methods set out below.

(b)

Valuation Panel

In the event that the Parties are unable to agree the Option Consideration within fifteen (15) days of the date of the Call Option Notice or the Put Option Notice (as the case may be), the Parties shall refer the valuation to a panel of independent experts with appropriate experience in the aluminium industry (each a "Valuer"). The panel shall consist of three Valuers, one of whom shall be appointed by each Party and the third of whom, who shall act as chairman of the panel, shall be jointly nominated by the two Valuers nominated by the Parties. Failing agreement as to the identity of the third Valuer within five (5) Business Days of being required to do so, such third Valuer shall be nominated by the International Centre for Expertise in accordance with the provisions for the appointment of experts under the Rules of Expertise of the International Chamber of Commerce (who shall be instructed to nominate only a Valuer experienced in valuing rolling mills, aluminium smelters, alumina refineries, bauxite mines and/or associated facilities, and shall have experience in, and relevant knowledge of the Kingdom and the GCC region).

(c)

Submission of Valuation

The Valuers shall be instructed to collectively submit a single Option Consideration valuation to the Parties within sixty (60) days of the appointment of the third Valuer (or

such longer time as the Parties may agree) and such valuation shall be final and binding upon the Parties. The Option Consideration shall be determined on a fair value basis in accordance with Clause l 7. l 2(d) below.

(d)

Valuation Approach

In valuing the Transferable Interests which are the subject of the Put Option or Call Option, as the case may be, the Valuers:

(i)

shall prepare the valuation by using the discounted cashflows methodology based on the net present value of cashflows attributable to the Option Interests which take into account the terms of the Project Agreements (including, for the avoidance of doubt, the Gas Allocation Letter, the Gas Supply Agreement to be entered into with Saudi Aramco, the Energy Conversion Agreement entered into between Ma'aden and SWCC dated 10 October 2009 and other agreements with Government or publicly held entities) over the remaining life of the Project;

(ii)

shall consider cashflows from Expansions, taking into account any agreed Expansions;

(iii)

(iv)

shall not apply any discount to the Option Interests as a result of the Option Interests not conferring Control over any Company or not conferring any minority protection rights;

(v)

may consult persons engaged in the marketing of aluminium who, in the Valuers' opinion, are experts in the making of price forecasts on a regular basis;

(vi)

may consult any other experts as the Valuers think fit;

(vii)

shall be entitled to rely in good faith upon the opinions of any experts so consulted; and

(viii)

17.14

Notwithstanding Clauses 17. l(a), 17.3 and 17.4, Ma'aden shall be entitled to sell, transfer and assign to one or more Saudi public companies or public funds or any combination of the same consistent with the provisions of Clause 17.8 (and may procure the sale, transfer and assignment by any of its Affiliates to the same), its rights, title and interest in and to Transferable Interests held by Ma'aden of up to 14.9% of the aggregate of the Transferable Interests of a Company. Such sale may take place at any time prior to the Put Option or Call Option being exercised by Ma'aden or Alcoa respectively pursuant to Clause 17.1. Ma'aden shall give not less than sixty (60) days' prior written notice to Alcoa of such a proposed transfer including details of the proposed Saudi public companies and /or public funds (the "Transferees"). Ma'aden shall procure that, as a condition of such transfer, the Transferees shall agree to be bound by all the terms of this Agreement and shall execute an Adherence Agreement, provided that the Transferees further agree that Ma'aden shall represent the Transferees in all dealings with Alcoa that arise in connection with the exercise of the Put Option or Call Option, as the case may be. The Parties agree that, for the purposes of determining Ma'aden's Shareholder Percentage in connection with its rights and obligations under Clause 5.4 (in respect of the Aluminium offiake) and Clause 5.12 (in respect of the

Ma'aden LOC under the Gas Allocation Letter), Ma'aden's Shareholder Percentage shall be deemed to include as between Ma'aden and Alcoa, any such Shares and Shareholder Loans held by such Saudi public companies or public funds. The Parties hereby agree to take any action which may reasonably be required in order to implement the provisions of this Clause 17.13 including (without limitation) cooperating as necessary to amend the relevant Company's foreign investment licence, articles of association and commercial registration so as to formalize the transfer of the Shares."

18.

Valuations

18.1

Fair Market Value

18.2

Valuation Panel

In the event that the Parties are unable to agree the Fair Market Value of Alcoa's Transferable Interests within fifteen (15) days of the relevant Chairman requesting them to do so, the Parties shall refer the valuation to a panel of independent experts with appropriate experience in the aluminium industry (each a "Valuer"). The panel shall consist of three Valuers, one of whom shall be appointed by each Party and the third of whom, who shall act as chairman of the panel, shall be jointly nominated by the two Valuers nominated by the Parties. Failing agreement as to the identity of the third Valuer within five Business Days of being required to do so, such third Valuer shall be nominated by the International Centre for Expertise in accordance with the provisions for the appointment of experts under the Rules of Expertise of the International Chamber of Commerce (who shall be instructed to nominate only a Valuer experienced in valuing rolling mills, aluminiwn smelters, alumina refineries, bauxite mines and associated facilities).

18.3

Submission of Valuation

18.4

Valuation Approach

In valuing Alcoa's Transferable Interests, the Valuers:

(a)

(b)

shall not apply any discount to Alcoa's Transferable Interests as a result of Alcoa's Shareholder Percentage not conferring Control over any Company;

(c)

if making the determination prior to the Commercial Production Date for any of the Mine, the Refinery, the Smelter or the Rolling Mill, may consult any contractor or manager appointed pursuant to any Construction Agreement and/or any other contractors engaged in the development, construction or operation of the Mine, Refinery, Smelter or Rolling Mill;

(d)

may consult persons engaged in the marketing of aluminium who, in the Valuers' opinion, are experts in the making of price forecasts on a regular basis;

(e)

may consult any other experts as the Valuers thinks fit;

(f)

shall be entitled to rely in good faith upon the opinions of any experts or other persons so consulted; and

(g)

19.

Assignment

20,

Warranties

Each Party hereby warrants and undertakes to the other Party on its behalf and on behalf of any Affiliate being a Shareholder that:

(a)

it is duly incorporated and validly existing in accordance with the laws of the country and/or state under which it is incorporated;

(b)

(c)

its officers have the power and authority to act on its behalf in entering into this Agreement and the Shareholder Loan Agreements;

(d)

it is not insolvent, no petition has been filed relating to its insolvency and no proceedings have been issued for its dissolution or liquidation;

(e)

this Agreement has been duly executed and constitutes a valid, legal and binding obligation of such Party enforceable in accordance with its terms;

(f)

(g)

(i)

(ii)

securing an improper advantage;

(iii)

(iv)

providing an unlawful personal gain or benefit, of financial or other value, to a Government Official.

21.

Governing Law, Dispute Resolution and Language

21.1

Governing Law

This Agreement shall be governed by and construed and interpreted according to English law.

21.2

Reference to Senior Management

Prior to referring any dispute, controversy or claim arising out of or in connection with this Agreement, or the breach, termination or invalidity thereof, (for the purposes of this Clause 21 a "dispute"), other than proceedings to enforce an agreement reached between the Parties under this Clause 21.2, to arbitration pursuant to Clause 21.3 below, the Party (which shall include any Affiliate of such Party being a Shareholder) wishing to or considering making such reference shall notify in writing the other Party of the nature of the dispute and its background (for the purposes of this Clause 21, a "dispute notice") and its proposed basis for settlement of such dispute and the other Party shall respond to such dispute notice within fourteen (14) days of receipt, setting out any clarification it may feel relevant and including its proposed basis for settlement. The chief executives or presidents of the ultimate parent companies of each Party or their designees shall then meet within thirty (30) days of the issue of the dispute notice to attempt a reconciliation and settlement of the dispute. No statement as to a Party's proposed basis for settlement nor any discussions or communications between the Parties (or their ultimate parent companies) pursuant to this Clause 21.2 (except for the terms of any agreed settlement between the Parties) may be relied upon or referred to in later court, arbitration, enforcement or appeal proceedings.

21.3

Dispute Resolution

(a)

Except as otherwise provided in Clause 9, Clause 17.13 and Clause 18 of this Agreement, if any dispute arising out of or in connection with the Agreement is not resolved pursuant to Clause 21.2 above within forty five (45) days of its referral to the Parties' senior management, such dispute shall be, if requested by any Party, referred to and finally settled by arbitration under the Rules of Arbitration of the International Chamber of Commerce as amended or substituted from time to time (the "ICC Rules" and the proceedings brought in accordance with this Clause 21.3), which ICC Rules are deemed to be incorporated into this Agreement except to the extent expressly modified by this Clause 21.3. Arbitration shall be the exclusive method for resolution of the dispute and the determination of the arbitrators shall be final and binding. The Parties agree that they will give conclusive effect to the arbitrators' determination and award and that judgment thereon may be entered and enforced by any court of appropriate jurisdiction.

(b)

The tribunal shall consist of three (3) arbitrators, one of whom shall be appointed by each Party and the third of whom, who shall act as chairman, shall be jointly nominated by the two arbitrators nominated by the Parties. Failing agreement as to the identity of the third arbitrator within five Business Days of being required to do so, such third arbitrator shall be nominated by the International Court of Arbitration in accordance with the ICC Rules.

(c)

The place of arbitration shall be London. The language to be used in the arbitration shall be English, and any documents or portions of them presented at such arbitration in a language other than English shall be accompanied by an English translation thereof. The arbitrators

shall decide such dispute in accordance with the substantive laws of England applicable hereto.

21.4

Continuing Obligations

21.5

Jurisdiction

(a)

(b)

21.6

Process Agent

Each Party that is not incorporated and registered under the laws of England and Wales will appoint a process agent in the United Kingdom to receive legal process served under this Agreement. Each Party agrees that service of process in respect of it upon such agent, together with written notice of such service given to it as provided in Clause 23.1, shall be deemed to be effective service of process upon it in any such action, suit or proceeding. Each Party agrees that the failure of such agent to give notice to it of any such service shall not impair or affect the validity of such service or any judgment rendered in any action, suit or proceeding based thereon. If for any reason such agent shall cease to be available to act as such, each such Party agrees to designate a new agent in the City of London, on the tenns and for the purposes of this Clause. Nothing herein shall be deemed to limit the ability of any Party to serve any such legal process in any other manner, to obtain jurisdiction over any other Party or to bring any action, suit or proceeding against any other Party in such other jurisdictions, and in any other manner as may be permitted or required by Applicable Laws.

(a)

Ma'aden hereby irrevocably agrees to appoint Law Debenture Corporate Services Limited, with offices at the date of this Agreement at Princes House, 95 Gresham Street, London EC2V 7LY, England as its authorised agent on which any and all legal process may be served in any such action, suit or proceeding brought in the courts of England, and to execute such documentation as may reasonably be required by such agent in connection with its appointment.

(b)

Alcoa and any of its Affiliates being a Shareholder hereby irrevocably agrees to appoint Pinsent Masons LLP, with offices at the date of this Agreement at 1 Park Row, Leeds, LS1 5AB as its authorised agent on which any and all legal process may be served in any such

action, suit or proceeding brought in the courts of England, and to execute such documentation as may reasonably be required by such agent in connection with its appointment.

21.7

Language

22.

Confidentiality and Public Announcements

22.1

Confidentiality

(a)

(i)

is known to such Party prior to learning of it from the other;

(ii)

(iii)

becomes public knowledge other than through the fault of such Party;

(iv)

is required to be disclosed by any competent legal or regulatory authority;

(v)

(vi)

is independently developed by such Party; or

(vii)

(b)

Affiliate's directors, officers, employees, professional advisers or consultants, or financial institution from whom the Party is seeking finance, on the terms set out in this Clause 22.

(c)

22.2

Disclosure of Information by Managers to Shareholders and Parties

A Manager shall be entitled to supply detail of any business transacted at Board of Managers meetings or committee meetings and any other information obtained by him in his capacity as a Manager, to the Party or Shareholder by whom he was appointed or to the professional advisers of such Party or Shareholder, subject always to the provisions of this Clause 22.

22.3

Announcements

22.4

Survival

23.

Notices

23.1

Notices

All notices, approvals, consents or other communications in connection with this Agreement shall be given in writing by an authorized officer of the Party (or an Affiliate being a Shareholder) providing any such notice, approval, consent of other communication and shall either be left at the address of the addressee which is specified below, sent by reputable international courier to the address of the addressee specified below, hand delivered to the address of the addressee which is specified below or sent by facsimile to the number specified below, provided in each case that if the addressee notifies the other Party and the relevant Company of another address or facsimile number then such other address or facsimile number shall be deemed to replace that set out below.


For Ma'aden:	Address:	P.O. Box 68861 Riyadh 2537 Kingdom of Saudi Arabia
		Facsimile: +966 1 874 8200 Attn.: Vice President Aluminium SBU
With a copy to:		Ma'aden Legal Department P.O. Box 68861 Riyadh 11537 Kingdom of Saudi Arabia
		Facsimile: +966 1 874 8290 Attn: Chief Legal Counsel



For Alcoa and its Shareholder Affiliates:
	Address:	390 Park Avenue New York, NY 10022 United States of America Facsimile: +1 212 836 2804 Attn.: President, Global Primary Growth

With a copy to:		Alcoa Inc. Legal Department 20l Isabella Street Pittsburgh, PA 15212 United States of America Facsimile: +1 412 553 4064 Attn: General Counsel

23.2

Effect

(a)

(b)

24.

Further Assurances

24.1

Undertakings

(a)

Each Party and any Affiliate being a Shareholder agrees that it shall:

(i)

(ii)

(iii)

(b)

(i)

(ii)

(iii)

to give effect to the introduction of any new Shareholder that acquires (or intends to acquire) Shares in accordance with this Agreement.

24.2

Further Assurances

24.3

Business Conduct

The Parties agree that, in relation to the development of the Project and the subsequent business and operation of each Company, they shall (and shall procure that each Company shall):

(a)

develop, construct and operate the Project and operate the business in a manner that meets or exceeds internationally recognised standards, best practises, business conduct and ethics in accordance with internationally accepted commercial practices in the bauxite mining, alumina refining, aluminium smelting and rolling mill industries and without regard to the interests of any Party or any Affiliate;

(b)

without limiting the generality of paragraph (a) above, in order to ensure the long-term sustainability of the Project, undertake maintenance and replacement capital expenditures relating to the Project in a manner that meets or exceeds internationally recognised standards and best practices in the bauxite mining, alumina refining, aluminium smelting and rolling mill industries; and

(c)

operate with objectives of low cost operations, continuous improvement and respect for people, consistent with best practices of the aluminium businesses.

25.

Competing Businesses

25.1

Acknowledgement

The Parties acknowledge that the Parties and their Affiliates are engaged in, or may become engaged in, bauxite mining, alumina refining, aluminium smelting, rolling mill operations and other businesses that may compete with the Project.

25.2

No Obligation to Offer

25.3

Competing Projects Following Termination

In the event of termination of this Agreement, other than where Ma'aden is the Defaulting Party in accordance with Clause 14.5, Alcoa shall not itself or through any Affiliate develop, construct, operate or otherwise implement or participate in whether itself, in partnership, joint venture or any such other relationship with any other person, in any project in any of the Kingdom, GCC Countries or Iran, which would compete with the Project, prior to the date that is (i) if the termination occurs prior to the Commercial Production Date, three (3) years after termination of this Agreement; or (ii) if the termination occurs after the Commercial Production Date but prior to the fifth anniversary of the Commercial Production Date, two (2) years after termination of this Agreement. The foregoing restrictions shall not apply to any bauxite mining, alumina refining, aluminium smelting, rolling mill operations and other businesses that may compete with the Project (A) in which the Defaulting Party is engaged as of the date of termination of this Agreement; or (B) in which the Defaulting Party owns a direct or indirect interest of fifteen percent (15%) or less or otherwise with the prior written consent of Ma'aden.

26.

General Provisions

26.1

Severability

If any provision or term (or part thereof) of this Agreement shall be, or be found by any authority or court of competent jurisdiction to be, invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect the other provisions or terms (or parts thereof) in that jurisdiction or the whole of the Agreement in any other jurisdiction, all of which shall remain in full force and effect. As regards the provision or term (or part thereof) which is or has been found to be invalid, illegal or unenforceable, the Parties shall negotiate in good faith in order to agree the terms of a mutually satisfactory provision to be substituted for the invalid, illegal or unenforceable provision and which as closely as possible validly gives effect to the Parties' intentions as expressed herein.

26.2

Waiver

26.3

Compliance with Law and Permits

(a)

(b)

Without prejudice to the generality of this Clause 26.3. the Parties and any Affiliate being a Shareholder shall, and shall procure that each Company shall, comply with all Applicable Laws relating to the prohibition on the corruption of public officials.

(c)

26.4

Intellectual Property

(a)

Subject to any provisions as to ownership of Intellectual Property under any of the Project Agreements (including the Smelter TTA and Smelter OSA). any rights to Intellectual Property which are developed by a Company during the course of a Company's activities under this Agreement shall belong to the Company.

(b)

The Parties. pursuant to separate technology license agreements which shall be part of the Project Agreements, shall grant to the Companies a license to use Intellectual Property which is owned by the Parties but is required to implement the Project. Without limiting the foregoing. Alcoa and its Affiliates shall offer to enter into with the relevant Companies technology licence agreements in respect of the Intellectual Property and in respect of technical support services as described in Part 2 of Schedule 14 on the payment terms described therein.

(c)

In the event that this Agreement is terminated for any reason whatsoever, the Parties acknowledge that Ma'aden is entitled in accordance with Clause 16.4 to continue with the Project and utilise any Intellectual Property that has been provided by Alcoa to the Project or has been developed in the course of the Companies' activities under this Agreement. Accordingly, except to the extent that such Intellectual Property is subject to a separate intellectual property licence agreement entered into for value with the relevant Company, Alcoa hereby grants to Ma'aden and the Companies an irrevocable, royalty-free license to use. without the right to assign (other than to a project company). sublicense or otherwise transfer to a third party, any such intellectual Property not otherwise licensed thereafter solely in connection with the Project.

(d)

Without prejudice to the provisions of Clause 22 above or the provisions of any of the Project Agreements, each of the Parties and any Affiliate being a Shareholder shall procure that the Companies shall take all steps necessary to protect all Intellectual Property of the Companies or, in respect of sub-paragraphs (ii) and (iii) below of Ma'aden, and information comprising or relating to such rights (the "IP Information"), including, without limitation:

(i)

(ii)

using the IP Information provided to a Company or to Ma'aden under the Smelter TTA, only for the purposes for which it was licensed to the Company or Ma'aden (as the case may be);

(iii)

(iv)

(v)

not using any IP Information for the benefit of any third party; and

(vi)

26.5

Entire Agreement

26.6

Improper Inducements

(a)

(b)

(i)

Any Party or its Affiliates;

(ii)

Any of their agents, independent contractors or subcontractors;

(iii)

The Government of the Kingdom;

(iv)

The employees of any of the foregoing,

for the purpose of improperly obtaining or rewarding favourable treatment in connection with this Agreement or any of the other agreements contemplated by this Agreement.

(c)

26.7

Language

26.8

Amendments

26.9

No Partnership

26.10

Priority of Documents

In the event of conflict or inconsistency between this Agreement and any of the Articles of Association, the terms and conditions of this Agreement shall prevail.

26.11

Waiver of Immunity

26.12

No Liability for Consequential Losses, etc.

Notwithstanding anything in this Agreement, no Party or any of its Affiliates being a Shareholder shall have any liability to the other Party (whether in contract, tort or otherwise) for any consequential, incidental, special or indirect losses (including loss of anticipated profits) arising from or relating to this Agreement, whether out of any Event of Default, other breach of this Agreement, indemnity, any fault or negligence on the part of a Party or its Affiliates (or their respective employees) or otherwise.

IN WITNESS WHEREOF, each Party has caused this Agreement to be executed by its duly authorized representative as of the date first written above.

SAUDI ARABIAN MINING COMPANY (MA’ADEN)

Dr. Abdullah Dabbagh, President and CEO

Signed:

ALCOA INC.

Klaus Kleinfeld, President and CEO

Signed:

EXHIBIT 10.4

NOVATION AGREEMENT

RELATING TO

FRAMEWORK SHAREHOLDERS AGREEMENT

DATED 20 DECEMBER 2009, as amended

between

SAUDI ARABIAN MINING COMPANY (MA'ADEN)

and

ARCONIC INC.

and

ALCOA CORPORATION

NOVATION AGREEMENT

THIS DEED ("Deed") is made and entered into on H, corresponding to 24 December, 2016G, by and between:

(1)

SAUDI ARABIAN MINING COMPANY (MA'ADEN), a joint stock company organized and existing under the laws of the Kingdom of Saudi Arabia with its offices at P.O. Box 688861, Riyadh 11537, Kingdom of Saudi Arabia ("Ma'aden");

(2)

ARCONIC INC., (formerly known as ALCOA INC.) a corporation under the laws of the Commonwealth of Pennsylvania, USA, whose principal place of business is at 390 Park Avenue, New York, NY 1022, USA (“Novator”) and

(3)

ALCOA CORPORATION (formerly known as ALCOA UPSTREAM CORPORATION) a company under the laws of the State of Delaware, USA, whose principal place of business is at 390 Park Avenue, New York, NY 1022, USA (the "Novatee").

RECITALS:

This Deed is supplemental to the Framework Shareholders Agreement which was entered into between Ma'aden and the Novator on 20 December 2009, as amended by the First Supplemental Agreement to the Framework Shareholder s Agreement dated 30 March 2010 (the "Agreement").

The Novator has informed Ma'aden of its separation into two US publicly-traded companies: (i) an upstream business that will continue as the shareholder in the three Ma'aden-Alcoa joint venture companies, ultimately owned by the Novatee, Alcoa Corporation (that has changed its name from Alcoa Upstream Corporation), and (ii) a downstream business that will be owned by the Novator.

The Novator desires to be released and discharged from the further performance of its obligations under the Agreement and the Novatee has agreed to undertake to perform and observe those obligations under the Agreement and to be bound by the terms thereof.

Ma'aden has agreed to release and discharge the Novator in respect of any liability under the Agreement and the Novatee has agreed that it shall have the benefit of the duties and obligations on the part of the Novator contained in the Agreement in all respects as if the Novatee had been named in the Agreement as a party thereto in place of the Novator.

Certain of the Ancillary Agreements (as defined in the Agreement) have been entered into by or transferred to affiliates of the Novator that have become subsidiaries of the Novatee, as listed in Appendix A hereto (the "Alcoa Affiliate Agreements"). The parties acknowledge that the Alcoa Affiliate Agreements therefore will not require novation to the Novatee.

Ma'aden and the Novator have agreed to procure that, where Ma'aden has novated any of the Ancillary Agreements to any of the three Ma'aden-Alcoa joint venture companies as listed in Appendix B ( the "Project Company Agreements"), such companies shall enter into separate novation agreements under which they release and discharge the Novator in respect of any liability under such Project Company Agreements and the Novatee agrees that it shall have the benefit of the duties and obligations on the part of the Novator contained in such Project Company Agreements in all respects as if the Novatee had been named in such Project Company Agreements as a party thereto in place of the Novator.

THE PARTIES TO THIS DEED HEREBY AGREE as follows:

DEFINITIONS AND INTERPRETATION

1.1

Save to the extent otherwise defined herein, the terms defined in the Agreement shall unless the context requires otherwise bear the same meaning in this Deed.

1.2

In this Deed references to documents and contracts shall be deemed to be references to those documents and contracts as may be amended, supplemented, assigned or novated from time to time.

NOVATION

2.1

Ma'aden hereby releases and discharges the Novator from the performance of its undertakings and obligations under the Agreement and from all liabilities, claims and demands of any kind arising whether past, present or future under or in connection with the Agreement. As from and including the date of this Deed, Ma'aden accepts, in place of that performance and those liabilities, claims and demands, the undertaking of the Novatee set out in clause 2.3.

2.2

The Novator hereby transfers its rights, benefits, obligations and liabilities under the Agreement to the Novatee, and the Novatee hereby consents to and accepts such transfer. With effect from and including the date of this Deed, the Novator shall cease to have any rights under the Agreement in respect of any breach, non-observance or non-performance by Ma'aden of its obligations under the Agreement whether past, present or future.

2.3

The Novatee hereby undertakes to Ma'aden that it will, from and including the date of this Deed (i) duly fulfil, perform, observe and comply with the duties, undertakings and obligations on the part of the Novator contained in the Agreement and be bound by the terms thereof in all respects, and (ii) be liable to Ma'aden for any breach, non-observance or nonperformance by the Novator of its obligations under the Agreement whether occurring on or prior to the date of this Deed; in each case as if the Novatee had been a party to the Agreement in place of the Novator from the outset.

2.4

Ma'aden hereby undertakes to the Novatee that it will, from and including the date of this Deed (i) duly fulfil, perform, observe and comply with the duties, undertakings and obligations on the part of Ma'aden contained in the Agreement and to be bound by the terms thereof in all respects, and (ii) be liable to the Novatee for any breach, non-observance or non-performance by Ma'aden of its obligations under the Agreement whether occurring on or prior to the date of this Deed; in each case as if the Novatee had been named in the Agreement as a party thereto in place of the Novator from the outset.

MISCELLANEOUS

3.1

Each party hereby agrees in favour of each of the other parties that it shall use reasonable endeavours to undertake all such matters as are reasonably required in order to give legal effect to its respective obligations hereunder.

3.2

The construction, validity and performance of this Deed and all non-contractual obligations arising from or connected with this Deed will be governed by and construed in accordance with the laws of England. The parties hereby submit to the non-exclusive jurisdiction of the English courts for purposes of any proceedings arising in connection herewith.

3.3

This Deed may be executed in any number of counterparts and this shall have the same effect as if the signatures on the counterparts were on a single copy of this Deed.

3.4

If any provision of this Deed is held by a court of competent jurisdiction to be illegal, invalid or unenforceable in any respect under the law of any jurisdiction, then such provision shall (so far as it is invalid or unenforceable) be given no effect and shall be deemed not to be included in this Deed but without invalidating any of the remaining provisions of this Deed. The parties shall then use all reasonable endeavours to replace the invalid or unenforceable provision(s) by a valid and enforceable substitute provision the effect of which is as close as possible to the intended effect of the invalid or unenforceable provision.

EXECUTED AS A DEED


EXECUTED as a Deed	)


By /s/ Khalid S. Mudaifer for and on behalf of
SAUDI ARABIAN MINING COMPANY (MA'ADEN)	)



EXECUTED as a Deed	)


By /s/ Kenneth P. Wisnoski for and on behalf of
ARCONIC INC.	)



EXECUTED as a Deed	)


By /s/ Roy Harvey for and on behalf of
ALCOA CORPORATION

APPENDIX A

ALCOA AFFILIATE AGREEMENTS

•

The Rolling Expansion Letter of Agreement of 30 April 2012 between Alcoa Saudi Rolling Inversiones S.L. and Saudi Arabian Mining Company (Ma'aden).

•

The Aluminium Purchase Agreement dated 3/1/1431 H (corresponding to 20 December 2009G) between Ma'aden and Alcoa Inc. as novated on 9 May 2011 from Ma'aden to Ma'aden Aluminium Company and Alcoa Inc. to Alcoa lnespal S.A.

•

The Cast House Users Agreement dated 3 May 2011 (corresponding to 29/05/1432 H) between Ma'aden Aluminium Company, Ma'aden Rolling Company, Saudi Arabian Mining Company (Ma'aden) and Alcoa Inespal S.A. and

•

The Technical Services Agreement (IK) dated 3/1/1431 H (corresponding to 20 December 2009) between Ma'aden and Alcoa Inc. as novated on 26 September 2012 from Ma'aden to Ma'aden Bauxite and Alumina Company and from Alcoa Inc. to Alcoa IK Services Inc. and Alcoa Canada IK Services Limited. (the "MBAC TSA").

APPENDIX B

PROJECT COMPANY AGREEMENTS

•

The Technology License Agreement dated 3/1/1431H (corresponding to 20 December 2009) between Ma'aden and Alcoa Inc. as novated on 22 January 2011 from Ma'aden to Ma'aden Aluminium Company (the "MAC TLA");

•

The Technology License Agreement dated 3/1/1431H (corresponding to 20 December 2009) between Ma'aden and Alcoa Inc. as novated on 22 January 2011 from Ma'aden to Ma'aden Rolling Company;

•

The Technology License Agreement dated 3/1/1431H (corresponding to 20 December 2009) between Ma'aden and Alcoa Inc. as novated on 26 August 2012 from Ma'aden to Ma'aden Bauxite and Alumina Company;

•

The Technical Services Agreement (IK) dated 3/1/1431H (corresponding to 20 December 2009) between Ma'aden and Alcoa Inc. as novated on 23 March 2011 from Ma’aden to Ma'aden Aluminium Company;

•

The Technical Services Agreement (IK) dated 3/1/1431H (corresponding to 20 December 2009) between Ma'aden and Alcoa Inc. as novated on 23 March 2011 from Ma'aden to Ma'aden Rolling Company;

•

The Technical Services Agreement (OOK) dated 3/1/1431H (corresponding to 20 December 2009) between Ma'aden and Alcoa Inc. as novated on 22 January 2011 from Ma’aden to Ma'aden Aluminium Company;

•

The Technical Services Agreement (OOK) dated 3/1/1431H (corresponding to 20 December 2009) between Ma'aden and Alcoa Inc. as novated on 22 January 2011 from Ma'aden to Ma'aden Rolling Company;

•

The Technical Services Agreement (OOK) dated 3/1/1431H (corresponding to 20 December 2009) between Ma'aden and Alcoa Inc. as novated on 15 July 2012 from Ma'aden to Ma'aden Bauxite and Alumina Company;

EXHIBIT 10.5

Alcoa Corporation

201 Isabella Street

Suite 500

Pittsburgh, PA 15212-5858 USA

Tel: 1 412 315 2900

July 03, 2019

Tómas Sigurðsson

[Address Omitted]

Dear Tómas:

This letter agreement sets forth the terms of your separation from employment with Alcoa Corporation (“Alcoa” or the “Company”) and the transition of your specific areas of accountability, and supersedes all prior agreements regarding your employment with and separation from the Company (if any).

Transition and Separation

Effective immediately, you will assist in the implementation of a successful and positive transition and redeployment of your job functions and responsibilities, and perform such other related activities as you are advised (“Transitional Services”). It is anticipated that by no later than September 30, 2019 the primary activities associated with the Transitional Services will have been completed and thereafter you will be available as needed should we have any additional transition questions or other requirements until December 31, 2019 (the “Separation Date”). You will (i) remain on the active payroll, (ii) continue to receive your full monthly salary of ISK 4,877,767, and (iii) continue to be covered under all applicable Company sponsored benefit plans

Page 2

and programs, including the obligations of the company to indemnify you for proper actions taken by you during your employment commensurate with your job band, through the close of business on the Separation Date.

Effective as of the close of business on the Separation Date, you will be separated from the Company, resign all positions as an officer or director of the company’s subsidiaries, and the following will occur in connection with your acceptance of this agreement:

Pursuant to your executive severance agreement dated as of December 1, 2016 and acknowledged April 4, 2017 (“Executive Severance Agreement”), you will receive the following:

a lump sum payment equal to one-year annual salary of fifty-eight million, five hundred thirty-three thousand, two hundred four Icelandic króna (ISK 58,533,204), less applicable taxes and withholding, payable on or about January 31, 2020.

a lump sum payment valued as of your Separation Date, which reflects the value of Icelandic Pension contributions for an additional 12 months, payable on or about January 31, 2020. We estimate this amount to be fifteen million, eight hundred seventy-seven thousand, one hundred thirty-two Icelandic króna (ISK 15,877,132), less applicable taxes and withholding.

Page 3

2019 incentive compensation (“IC”), in an amount equal to your 2019 base salary earnings multiplied by an IC target of 100% multiplied by the IC Plan performance results, payable at the same time active employees receive such payment less applicable taxes and withholding.

In addition to the benefits payable under the Executive Severance Agreement described above:

you will receive a lump sum payment of six million, five hundred thirty-seven thousand, nine hundred forty Icelandic króna (ISK 6,537,940), less applicable taxes and withholding, which reflects 12 months additional auto allowance, payable on or about January 31, 2020.

you will have access to outplacement assistance provided by Right Management Consultants provided you initiate services within 12 months of the Separation Date.

you will have tax assistance provided by Deloitte Tax LLP (“Deloitte”) for the tax years 2019 and 2020, and thereafter as needed for Alcoa sourced income as determined by Deloitte and Alcoa. You agree to provide all information necessary to prepare and file any required tax returns based on Alcoa sourced income on a timely basis to Deloitte. These items will be requested directly by Deloitte and will not be shared with the Company. However, the Company will follow up on any missing information based on requests by Deloitte.

Page 4

all unvested Alcoa stock incentive awards will be forfeited under the terms of the Stock Incentive Plan. This forfeiture includes your vested and unexercised Alcoa stock options.

Due to the forfeiture of equity, no later than February 28, 2020, we will provide you with the greater of the following less applicable taxes and withholding :

The Icelandic króna equivalent of six hundred seventy thousand four hundred eighty-one U.S. dollars (USD $670,481); or

the value of your restricted share unit (“RSU”) and performance restricted share unit (“PRSU”) awards granted in 2017, 2018, and 2019 that are unvested as of the Separation Date, pro-rated based on your service through such date (and in the case of the PRSUs, the total number of shares relating to the awards to be determined based on Company performance against the applicable goals as of such date), which will be determined by multiplying the number of shares relating to such RSU and PRSU awards by the closing market price per share of the Company’s common stock on the Separation Date (the “Closing Price”), plus the value of your vested in-the-money stock options as of the Effective Date, which amount will be determined by multiplying the number of shares relating to such in-the-money stock options by the difference between the Closing Price and exercise price per share.

Page 5

The final amount to be paid in Icelandic króna using the exchange rate as of December 31, 2019.

You will not be entitled to any severance payments or benefits from the Company except as stated in this letter.

Confidentiality

Recognizing that the knowledge, information and relationship with customers, suppliers and agents, and the knowledge of the Company’s and its affiliates business methods, systems, plans and polices with which you are familiar or accessible, are valuable and unique assets of the Company, you agree that you will not otherwise disclose, publish, or furnish to any person, firm or organization any confidential or proprietary information, systems, programs, know-how, or trade secrets or any other knowledge information documents or materials, the confidentiality of which the Company and its affiliates take reasonable measures to protect, that you acquired or had access to during your employment. However, you may disclose confidential information, either directly or indirectly, to a US or Icelandic government official, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law, or in a complaint or other document filed in a lawsuit or other proceeding, required by the court, if such filing is made under seal.

Restrictive Covenants

Page 6

You understand and agree that the Non-compete Agreement dated June 12, 2014 and referenced in your Executive Severance Agreement will continue to be in full force and effect for one (1) year after the Separation Date. Competitors include any entity engaged or has plans to become engaged in the mining of bauxite, refining of alumina, smelting or rolling of aluminum or fabrication of any aluminum products. You agree that you will not disparage Alcoa, its business, employees, officers, directors or agents; likewise, Alcoa, its subsidiaries, officers, directors, employees and agents will not disparage you. Also, as a reminder, Alcoa stock incentive awards continue to be subject to forfeiture, under the terms of that program, to the extent you become associated with, employed by, render services to, or own any interest in any business that is in competition with Alcoa or if you engage in willful conduct that is injurious to Alcoa.

Release and Waiver

In consideration of the foregoing, and except as prohibited by law, you do release the Company, its subsidiaries, affiliates and its officers, employees, directors and agents for yourself, your heirs, executors and assigns from and against all claims of continued employment, or claims related to your termination of employment, and other causes of action, known by you or which reasonably should be known by you through your Separation Date (including, but not limited to, any claims you have had at any time to the date of your signing this agreement under Title VII of the Civil Rights Act of 1964, Age Discrimination in Employment Act, Employees Retirement Income Security Act, Americans with Disabilities Act, Rehabilitation Act, Family and Medical Leave Act, any tort or contract claims, or any Alcoa internal employment dispute process); damages, liabilities, expenses and costs whatsoever arising by reason of your employment or

Page 7

termination with the Company. Except as specifically stated herein, the foregoing is not intended to negatively impact your vested rights under any Company sponsored compensation or benefit plans and programs, including your rights under this letter agreement.

This letter sets forth your specific rights and your release of any and all legal claims you have against the Company. You understand that you may have your own attorney review this letter. This letter agreement and both parties’ obligations will be binding on all successors of the Company.

Sincerely,

Alcoa Corporation

By /s/ Leigh Ann Fisher

Leigh Ann Fisher

Agreed to and accepted this 10^th day of July, 2019

By /s/ Tómas Sigurðsson

Tómas Sigurðsson

EXHIBIT 31.1

Certifications

I, Roy C. Harvey, certify that:

I have reviewed this quarterly report on Form 10-Q of Alcoa Corporation;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 31, 2019

	/s/ ROY C. HARVEY
	Name:	Roy C. Harvey
	Title:	President and Chief Executive Officer

EXHIBIT 31.2

Certifications

I, William F. Oplinger, certify that:

I have reviewed this quarterly report on Form 10-Q of Alcoa Corporation;

(a)

(b)

(c)

(d)

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 31, 2019

	/s/ WILLIAM F. OPLINGER
	Name:	William F. Oplinger
	Title:	Executive Vice President and Chief Financial Officer

EXHIBIT 32.1

Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of Alcoa Corporation, a Delaware corporation, (the “Company”) does hereby certify that:

The Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 (the “Form 10-Q”) of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: July 31, 2019	/s/ ROY C. HARVEY
	Name:	Roy C. Harvey
	Title:	President and Chief Executive Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished to the Securities and Exchange Commission as an exhibit to the Form 10-Q and shall not be considered filed as part of the Form 10-Q.

EXHIBIT 32.2

Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


Date: July 31, 2019	/s/ WILLIAM F. OPLINGER
	Name:	William F. Oplinger
	Title:	Executive Vice President and Chief Financial Officer

The foregoing certification is being furnished to the Securities and Exchange Commission as an exhibit to the Form 10-Q and shall not be considered filed as part of the Form 10-Q.

EXHIBIT 95.1

MINE SAFETY DISCLOSURE

At Alcoa Corporation, management strives to work safely in a manner that protects and promotes the health and well-being of the Company’s employees, contractors, and the communities in which Alcoa Corporation operates because it is fundamentally the right thing to do. Despite uncertainties and economic challenges, Alcoa Corporation remains committed to living its values and managing risks accordingly.

Alcoa Corporation’s health and safety systems are anchored by committed people who are actively engaged and effectively support a safe work environment, safe work methods, and overall production system stability. Each day, people at all levels proactively monitor and intervene to defend against weaknesses that develop in Alcoa Corporation’s safety systems by identifying potential hazards and error-likely situations and responding to eliminate or control them.

In the table below, there are disclosures involving the Point Comfort, TX alumina refinery. All citations have been or are being addressed; none constituted an imminent danger.

Dodd-Frank Act Disclosure of Mine Safety and Health Administration Safety Data

Certain of Alcoa Corporation’s U.S. facilities are subject to regulation by the Mine Safety and Health Administration (MSHA) under the U.S. Federal Mine Safety and Health Act of 1977 (the “Mine Act”). The MSHA inspects these facilities on a regular basis and issues various citations and orders when it believes a violation has occurred under the Mine Act. Whenever the MSHA issues a citation or order, it also generally proposes a civil penalty, or fine, related to the alleged violation. Citations or orders can be contested and appealed, and as part of that process, are often reduced in severity and amount, and are sometimes dismissed.

Management believes the following mine safety disclosures meet the requirements of section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”).

Mine Safety Data. The table and other data below present mine safety information related to the Company’s U.S. facilities subject to MSHA regulation, as required by section 1503(a)(1) of the Dodd-Frank Act. The following data reflects citations and orders received from the MSHA during the quarter ended June 30, 2019, as reflected in the MSHA system on June 30, 2019, and the proposed penalties received from the MSHA during such period. ($ in full amounts)

Mine or

Operating

Name/MSHA

Identification

Section

104 S&S

Citations⁽³⁾ (#)

Section

104(b)

Orders⁽⁴⁾ (#)

Section

104(d)

Citations

and

Orders⁽⁵⁾ (#)

Section

110(b)(2)

Violations⁽⁶⁾

(#)

Section

107(a)

Orders⁽⁷⁾

(#)

Total

Dollar

Value of

MSHA

Assessments

Pro-

posed⁽⁸⁾

($)

Total

Number

Mining

Fatalities

(#)

Received

Notice of

Pattern of

Violations

Under

Section

104(e)

(yes/no)

Received

Notice of

Potential

to Have

Pattern

Under

Section

104(e)

(yes/no)

Legal

Actions

Pending

as of

Last Day

Period

(#)

Legal

Actions

Initiated

During

Period

(#)

Legal

Actions

Resolved

During

Period

(#)

Point Comfort,

TX Alumina

Refinery (2)

—

2,242

—

⁽¹⁾

The MSHA assigns an identification number to each mine or operation and may or may not assign separate identification numbers to related facilities. The information provided in this table is presented by mine or operation rather than the MSHA identification number because that is how Alcoa Corporation manages and operates its business, and management believes that this presentation is more useful to investors.

⁽²⁾	Under the Interagency Agreement dated March 29, 1979 between the MSHA, the U.S. Department of Labor, and The Occupational Safety and Health Administration, alumina refineries (such as Alcoa Corporation’s Point Comfort facility) are subject to MSHA jurisdiction.

⁽³⁾

Represents the total number of citations issued under section 104 of the Mine Act, for violations of mandatory health or safety standards that could significantly and substantially contribute to a serious injury if left unabated. This includes the citations listed under the column headed section 104(d).

⁽⁴⁾

Represents the total number of orders issued under section 104(b) of the Mine Act, which represents a failure to abate a citation under section 104(a) within the period prescribed by the MSHA. This results in an order of immediate withdrawal from the area of the mine affected by the condition until the MSHA determines that the violation has been abated.

⁽⁵⁾	Represents the total number of citations and orders issued under section 104(d) of the Mine Act for unwarrantable failure to comply with mandatory health or safety standards.

⁽⁶⁾	Represents the total number of flagrant violations identified under section 110(b)(2) of the Mine Act.

⁽⁷⁾	Represents the total number of imminent danger orders issued under section 107(a) of the Mine Act.

⁽⁸⁾	Amounts represent the total dollar value of proposed assessments received.

During the quarter ended June 30, 2019, Alcoa Corporation had no mining-related fatalities, and none of the Company’s mining operations received written notice from the MSHA of a pattern of, or the potential to have a pattern of, violations of mandatory health or safety standards that are of such nature as could have significantly and substantially contributed to the cause and effect of mine health or safety hazards under section 104(e) of the Mine Act.

The Federal Mine Safety and Health Review Commission (the “Commission”) is an independent adjudicative agency that provides administrative trial and appellate review of legal disputes arising under the Mine Act. As of June 30, 2019, Alcoa Corporation had one matter pending before the Commission concerning a retaliation complaint filed by an employee in 2015. On December 17, 2017, this matter was dismissed by an Administrative Law Judge after a trial on the merits; however, the employee appealed this decision to the Commission, where the matter is pending.