Alumina angst over $45m cost

ALUMINA Limited is challenging its partner Alcoa over a decision to book a $45 million bribery settlement against the AWAC joint venture that the two companies operate.

ALUMINA Limited is challenging its partner Alcoa over a decision to book a $45 million bribery settlement against the AWAC joint venture that the two companies operate.

Melbourne-based Alumina confirmed yesterday that it had sought talks with Alcoa over the matter, after it was revealed in Alcoa's earnings results on Monday evening in the US. The payment is effectively the settlement of a civil lawsuit that has been under way between Alcoa and Aluminium Bahrain.

Under the four-year-old claims, Alcoa was accused of fraud, bribery and overcharging. Alumina appears to have doubts over whether the charge should have been levelled against the joint venture or lodged elsewhere within Alcoa's books.

The AWAC joint venture produced 3.8 million tonnes of alumina over the past three months and delivered $US40 million of dividends to Alumina over the past three months.

The company received a boost in the past few weeks when state and federal governments combined to help fund the survival of the joint venture's Point Henry smelter.

Alumina shares were punished on a bad day for resources stocks, losing 5? to close at 70.5?.

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