Global Alumina announces approval of joint venture agreements

    TORONTO, March 26 /CNW/ - Global Alumina Corporation (the "Company")
(TSX: GLA.U) today announced that it has approved agreements to form a joint
venture to develop and operate the Company's alumina refinery project in the
Republic of Guinea (the "Project"). The Company, through its wholly-owned
subsidiary, Global Alumina International Ltd. ("GAI"), will sell a two-thirds
interest in the Project to The Broken Hill Proprietary Company Pty Limited
("BHP Billiton"), Dubai Aluminium Company Limited ("DUBAL") and Mubadala
Development Company PJSC ("Mubadala") for aggregate proceeds of approximately
US$260 million, payable in four installments, indicating in aggregate an
equivalent valuation of approximately US$1.91 per outstanding share of the
Company. The Company has been advised that all other joint venture parties
have also approved the major terms of the joint venture and have agreed to
enter into the transaction subject to the finalization of definitive
    The transaction will enable the Company to continue implementation of the
Project in accordance with the investment and concession agreement with the
Government of Guinea signed in 2004.
    "The joint venture to be established by these agreements is one of Global
Alumina's most exciting developments in its quest to construct the world's
largest green-field alumina refinery in Guinea," stated Bruce Wrobel, CEO of
Global Alumina. "Adding the financial and management resources of BHP
Billiton, DUBAL and Mubadala, as well as DUBAL and Mubadala's significant need
for alumina driven by their aggressive aluminium smelter growth plans and BHP
Billiton's strong technical and operational expertise to Global Alumina's
highly qualified project development team and the extensive work the team
already completed creates a win-win for the success of the prospective joint
venture, the refinery project and Global Alumina's shareholders. We look
forward to the benefits that this significant step will bring to Global
Alumina shareholder value."
    The joint venture will be effected through a share subscription agreement
(the "Subscription Agreement") whereby each of BHP Billiton, DUBAL and
Mubadala (the "Subscribers") will subscribe for interests in the shares of
Guinea Alumina Corporation, Ltd. ("Guinea Alumina"), presently a wholly-owned
subsidiary of GAI. Following closing of the subscription, the ownership
structure of Guinea Alumina will be 33 1/3% GAI, 33 1/3% BHP Billiton, 25%
DUBAL and 8 1/3% Mubadala.
    Completion of the subscription and payment of the approximately
US$151.1 million first installment is subject to certain conditions, including
formal consent of the Government of Guinea, and will occur within ten days
after confirmation by the Subscribers that all conditions precedent to
completion are satisfied. The Company expects to satisfy the conditions to
completion shortly after signing.
    The remaining three installments will be received when specified
milestones are met, namely, confirmation of transfer of the Project mining
concession from the Company to Guinea Alumina, completion of a bankable
feasibility study (including final construction, contracting and financing
plans) and receipt of a binding commitment for final debt financing for the
Project, all of which the Company expects to occur within this year.
    The Company has agreed to place 85% of the subscription proceeds in
escrow to fund GAI's future capital contributions into Guinea Alumina and to
serve as security for its warranty and indemnity obligations under the
Subscription Agreement, leaving approximately 15% of the subscription proceeds
freely available to fund ongoing corporate expenses.
    The Subscribers, who are also lenders under the US$100 million Loan
Facility Agreement, have agreed to extend to March 31, 2007 the date within
which to execute the joint venture agreements in order to facilitate
finalization. Upon execution of the Subscription Agreement, Guinea Alumina may
draw further loan advances under the US$100 million Loan Facility Agreement
with the Subscribers to fund costs prior to the completion of the Subscription
Agreement. Upon completion of the Subscription Agreement, loans under the Loan
Facility Agreement, together with accrued and unpaid interest, will be repaid
by shareholder capital contributions, and the Loan Facility Agreement will
terminate. To date, Guinea Alumina has borrowed approximately US$49 million
under the Loan Facility Agreement.
    Guinea Alumina, GAI and the Subscribers will enter into a shareholders'
agreement (the "Shareholders' Agreement"), governing management of Guinea
Alumina through a board of directors comprised of a maximum of nine directors.
GAI and BHP Billiton each will have the right to appoint three directors,
DUBAL will have a right to appoint two directors and Mubadala will have the
right to appoint one director. BHP Billiton will have the right to nominate
Guinea Alumina's Chief Executive and Chief Financial Officers.
    Guinea Alumina and an affiliate of BHP Billiton will enter into a
long-term technical services and support agreement through which BHP Billiton
will provide support to Guinea Alumina's development, construction and
operation's management.
    On March 26, 2007 the board of directors of the Company, on the
recommendation of a special committee of independent directors, determined
that the Company is in serious financial difficulty, the joint venture
agreements and transactions in connection therewith are designed to improve
the financial position of the Company and the terms of the joint venture are
reasonable under the circumstances of the Company. As a consequence, the
transaction is exempt from the valuation requirements and minority shareholder
approval requirements applicable to related party transactions under Ontario
Securities Commission Rule 61-501 - Insider Bids, Issuer Bids, Business
Combination and Related Party Transactions. The Toronto Stock Exchange ("TSX")
has notified the Company that it will review eligibility of the Company for
continued listing based on the Company's current financial condition. The
Company is confident that completion of the Subscription Agreement will enable
the Company to satisfy the TSX's financial condition requirements.
    Completion of the Subscription Agreement may occur less than 21 days
following the issuance of this press release. In the Company's view, this is
both reasonable and necessary in the circumstances as it is experiencing
liquidity issues, the exact date of completion is presently unknown and
expedited completion of the subscription and related agreements will allow the
Company to continue development of the Project.
    The joint venture is beneficial to the Company as it preserves the
Project's value under the present circumstances and substantially enhances the
Project's value through the Subscribers' direct participation in the Project.
Financing of the Project with the involvement of the Subscribers is expected
to be completed by December 2007. Based on this schedule, alumina production
would commence by the middle of 2010.

    BHP Billiton is the world's sixth largest producer of primary aluminium,
with a total operating capacity in excess of one million tonnes of aluminium,
approximately 14 million tonnes of bauxite and four million tonnes of alumina
per annum. BHP Billiton is one of the world's largest non-integrated producers
of primary aluminum.

    DUBAL is the owner of one of the largest single site aluminum smelters in
the western world. DUBAL, which is wholly owned by the Dubai government,
produces and exports primary aluminum products to more than 40 countries
world-wide. DUBAL is also party to a subscription agreement with the Company
dated August 10, 2005, a copy of which is available on the Company's reference
page at

    Mubadala Development Company is a principal investment company wholly
owned by the Government of Abu Dhabi, with a mandate to establish new
businesses and acquire (wholly or partly) existing businesses either in the
United Arab Emirates or abroad. Mubadala invests in a wide range of strategic
sectors including energy, utilities, health, real estate, public-private
partnerships, basic industries and services.

    On execution, a copy of the Subscription Agreement and Shareholders
Agreement will be made available on the Company's reference page at A material change report containing additional information with
respect to the transaction will be available on within 10 days
of this press release.

    About Global Alumina:

    Global Alumina Corporation is a company that intends to use the vast
bauxite resources of Guinea to produce alumina for sale to the global aluminum
industry. Global Alumina is positioned to be one of the largest companies
focused solely on alumina production and sales, and offers 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 Boké, Guinea and has administrative offices in
New York, London, Montreal and Conakry, Guinea. For further information visit
our website at

    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. Such forward looking
information includes: the ability of the Company to satisfy the conditions
precedent to the initial closing under the Subscription Agreement and in
respect of the three deferred installments; the commencement or outcome of any
negotiations with third parties; future production levels; the amount, nature
and timing of capital expenditures; the timing of refinery construction and
mine start up; expectations regarding the financing of the alumina refinery
project and associated infrastructure and the sources of financing; prices for
alumina and aluminum; operation and other costs; and business strategies and
plans of management.
    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: a failure to enter into the Subscription Agreement; a failure by
the Company or its subsidiaries to complete the conditions precedent to the
initial closing or subsequent installments under the Subscription Agreement
and the Company's inability to negotiate an alternative transaction; the
failure by the Company to satisfy the conditions to the drawdowns under the
Loan Facility Agreement; the ability of the Company to repay advances under
the Loan Facility Agreement if transactions contemplated by the Subscription
Agreement are not completed; the current political unrest in the Republic of
Guinea and the political and economic risks of investing in a developing
country; the failure of the shareholders to approve plans for the development
of the Project after completion of a feasibility study no later than September
30, 2007; construction risks such as cost overruns, delays and shortages of
labour, materials and equipment; the Company's dependence on a single mining
property; the possible forfeiture of the Mining Concession (as defined in the
Company's Annual Information Form dated March 29, 2006) in certain
circumstances; operational risks such as access to infrastructure and skilled
labour; price volatility of alumina, aluminum or raw materials; and all other
factors discussed under the heading "Risk Factors" in the Company's Annual
Information Form. 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 more of the risks
or uncertainties materialize, actual results may vary materially from those
described in this release as intended, planned, anticipated, believed,
estimated or expected. 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.

For further information:

For further information: Michael Cella, Global Alumina, P: (212)
351-0010,; Elynn Wareham, GCI Group, P: (416)

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Global Alumina Corporation

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