Global Alumina Updates Status of Project



    TORONTO, Jan. 31 /CNW/ -- Global Alumina Corporation ("Global Alumina" or
the "Company") (TSX: GLA.U) announced today that on January 25th, the Board of
Directors of Guinea Alumina Corporation, Ltd. held meetings in Brisbane,
Australia.  Guinea Alumina Corporation, Ltd. is the joint venture among Global
Alumina Corporation, BHP Billiton, Dubai Aluminium Company Limited and
Mubadala Development Company PJSC that is developing a world class alumina
refinery and associated infrastructure project in the Republic of Guinea.  The
joint venture's senior management made detailed presentations of the project's
bankable feasibility study work in progress to the Board, comprised of senior
executives of its shareholders including Global Alumina. The joint venture
retained Bechtel and other specialized consultants for key elements of the
feasibility study.  As a result of these presentations, Global Alumina
Corporation is providing the following project updates prior to the conclusion
of the feasibility study.

    
    -  The schedule to complete the feasibility study has been extended to
       the middle of March 2008 from the end of December 2007.
    -  As a result of further design optimization, Global Alumina expects the
       refinery's production capacity to be increased by an additional
       100,000 metric tons to 3.3 million metric tons per year for the first
       two processing lines. The refinery is laid out to accommodate
       construction of a third processing line that would increase the
       project's total capacity to 5.0 million metric tons per year.
    -  The estimated cost to complete the construction of the project has
       experienced a significant increase due to a number of factors
       including:  i) a significant decline in the value of the US dollar;
       ii) a significant rise in the cost of diesel and fuel oil affecting
       both transportation and construction costs;  iii) continued increases
       in the price of key bulk construction materials such as structural
       steel, cement, piping and electrical cable;  iv) higher than expected
       increases in labour costs due to the tight world wide labour market;
       and  v) the increasingly heated market for industrial equipment and
       construction services.  Global Alumina currently expects an
       approximately 35% increase in the estimated costs to complete the
       construction of the first two processing lines from the previously
       estimated US$3.2 billion to approximately US$4.3 billion.
    -  Global Alumina now expects first alumina shipments to commence in
       September 2011.
    -  Although the alumina refinery's operating costs are expected to be
       higher than originally planned, Global Alumina expects the operating
       costs to be among the lowest 10% in the world.
    -  As a result of higher forecasted aluminum prices and broader interest
       in providing debt financing to the project, the project's debt
       capacity is expected to increase to US$2.5 billion from US$2 billion.
    -  Project financing commitments are now expected to be secured by the
       middle of this year with financial closing anticipated to follow in
       September 2008.
    

    Global Alumina will provide a further update upon completion of the
bankable feasibility study, now expected in the middle of March 2008.
    "Although the magnitude of the estimated construction cost increases is
disappointing, the Guinea Alumina refinery project is the largest ever green-
field alumina refinery project and, in our view, continues to represent the
most attractive alternative among all currently proposed new alumina
refineries around the world," stated Bruce Wrobel, CEO of Global Alumina.
"With its low projected operating costs, its easy access to abundant, high
quality bauxite, its significant opportunities for expansion and its marquee
joint venture partners, we believe that this strategic asset will continue to
generate significant interest throughout the aluminum industry."
    
    About Global Alumina
    
    Global Alumina and its joint venture partners are developing a 3.3
million metric tons per annum alumina refinery located in the bauxite-rich
region of the Republic of Guinea. Its joint venture partners are BHP Billiton,
Dubai Aluminium Company Limited and Mubadala Development Company PJSC. The
Guinea Alumina refinery project is one of the most advanced new projects in
Guinea with the refinery already in feasibility stage and critical path
infrastructure and site work already underway. Global Alumina is positioned to
be one of the only companies focused solely on alumina production and sales.
The Company offers a first mover advantage over other projects in the region
and an opportunity for socially responsible investing in a country that holds
over one-third of the world's bauxite resources. Global Alumina is
headquartered in Saint John, New Brunswick with operations in Boke, Guinea and
has administrative offices in New York, London, Montreal and Conakry, Guinea.
For further information visit the Company's website at www.globalalumina.com.
    
    Forward Looking Information
    
    Certain information in this release is "forward looking information",
which reflects management's expectations regarding the Company's future
growth, results of operations, performance and business prospects and
opportunities. In this release, the words "may", "would", "could", "should",
"will", "intend", "plan", "anticipate", "believe", "seek", "propose",
"estimate" and "expect" and similar expressions, as they relate to the
Company, are often, but not always, used to identify forward looking
information. Such forward looking information reflects management's current
beliefs and is based on information currently available to management. Forward
looking information involves significant risks and uncertainties, should not
be read as a guarantee of future performance or results, and will not
necessarily be accurate indications of whether or not or the times at, or by
which, such performance or results will be achieved. In particular, this
release contains forward looking information pertaining to the following: the
achievement by the joint venture company, Guinea Alumina Corporation Ltd.
("Guinea Alumina"), of certain milestones set out in the subscription
agreement among Guinea Alumina and its shareholders, the joint venture
partners, (the "Subscription Agreement"); the decisions of the joint venture
with respect to the Guinea Alumina refinery project; the timing of completion
of a feasibility study of the Guinea Alumina refinery project and the making
of a decision to proceed with the development of the refinery project;
expectations regarding the debt financing of the Guinea Alumina refinery
project, the terms, timing and amount of such financing and the sources of
financing; the amount, nature and timing of capital expenditures to complete
the refinery project; the timing of refinery construction and mine start up;
bauxite reserve and resource quantities; the ultimate recoverability of
reserves; future production levels; expectations regarding the negotiation of
contractual rights; prices for alumina and aluminium; operating and other
costs; treatment of Guinea Alumina under the fiscal terms of the "tax exhibit"
to the Basic Agreement with the Government of Guinea (as described in the
Company's Annual Information Form dated March 29, 2007, the "AIF") and the
negotiation and terms of agreements relating to the access of Guinea Alumina
to and use of certain infrastructure required for the development and
operation of the Guinea Alumina refinery project and business strategies and
plans of management with respect to the Guinea Alumina refinery project. A
number of factors could cause actual results to differ materially from the
results discussed in the forward looking information, including, but not
limited to: the failure or delay of Guinea Alumina to fulfill the conditions
precedent necessary for the subsequent subscription payments under the
Subscription Agreement to become available to the Company; the limited control
by the Company of the assets and operations of the Guinea Alumina refinery
project and its inability to make major decisions with respect to the Guinea
Alumina refinery project without agreement from the other joint venture
partners; the requirement that the Company hold 85% of subscription proceeds
received pursuant to the Subscription Agreement in escrow and the possibility
the Company may need to seek additional financing to fund corporate expenses
and its share of Guinea Alumina refinery project costs; a delay in finalizing
debt financing for the Guinea Alumina refinery project and/or the amount of
such financing being insufficient to fund the Guinea Alumina refinery project
to complete development; the inability of the Company to raise sufficient
financing to fund its share of the development costs of the Project; the
possibility that the Company's interest will be diluted if it is unable to
meet a capital call with respect to the Guinea Alumina refinery project; the
current political and economic risks of investing in a developing country; the
failure of the joint venture partners to approve plans for the development of
the Guinea Alumina refinery project after completion of the feasibility study;
construction risks such as cost overruns, delays and shortages of labour,
materials or equipment; the Company's dependence on an interest in a single
mining property; the possible forfeiture of the Mining Concession (as defined
in the Company's AIF) in certain circumstances; operational risks such as
access to infrastructure and skilled labour; currency fluctuations; price
volatility of alumina, aluminium or raw materials; and certain other factors
related to the Guinea Alumina refinery project discussed under the heading
"Risk Factors" in the Company's AIF.
    The forward looking information contained in this discussion is based on
the following principal assumptions: that the feasibility study will be
completed by March 2008 to the satisfaction of the joint venture partners and
that the joint venture partners will decide to proceed with the development of
the Guinea Alumina refinery project; that general economic conditions will not
become adverse to the completion of financing for the project and will have no
material adverse impact on the project; that the negotiations with prospective
project lenders and between the prospective project lenders and the Guinean
government will be successfully concluded shortly thereafter; that the bidding
process for contracted work in connection with the project will be completed
in a competitive manner and that actual costs to complete work will be within
the range of quotes provided by contractors to date; that the joint venture
will be able to acquire necessary labour at currently assumed labour costs and
productivity rates; that the development plan for the project is conducted
according to schedule; that general economic factors and trends relating to
construction costs remain constant; and that the future political and economic
climate in Guinea has no material adverse effect on the Guinea Alumina
refinery project. Although the forward looking information contained in this
release is based upon what management of the Company believes are reasonable
assumptions, the Company cannot assure investors that actual results will be
consistent with this forward looking information. If the assumptions
underlying forward looking information prove incorrect or if other risks or
uncertainties materialize, actual results may vary materially from those
anticipated in this release. This forward looking information is made as of
the date of this release, and the Company assumes no obligation to update or
revise it to reflect new events or circumstances, except as required by law.





For further information:

For further information: Michael Cella of Global Alumina,
+1-212-351-0010, cella@globalalumina.com, or Maura Gedid of Breakstone Group,
+1-646-452-2335, mgedid@breakstone-group.com, for Global Alumina Web Site:
http://www.globalalumina.com

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Global Alumina Corporation

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