Alumina in the spotlight

Shareholder activist Stephen Mayne says Alcoa group's minority partner is a ``post box'' company . BEN SHARPLES reports

ALUMINA Ltd, the minority partner of the Alcoa World Alumina & Chemicals (AWAC) group, has defended the size of its board amid criticism that it is a ``post box'' company.

The criticism stems from Alumina's position as a 40 per cent shareholder with no operational or fiscal control over AWAC, the company's only asset, which is controlled by US-based Alcoa.

Shareholder activist Stephen Mayne yesterday questioned the necessity of the size of the board for a company that ``doesn't do anything and doesn't control anything'', labelling Alumina a ``post box'' company.

But Alumina chairman Don Morley said the five-man board was necessary to keep bigger partner Alcoa honest in the ``$20 billion enterprise'' and there would be no changes to its size.

``I would say it requires the minority partner to be extra vigilant to ensure the majority partner does not in fact use its position to diminish the returns to the minority,'' Mr Morley told shareholders at the company's annual general meeting in Melbourne.

``That is, in our view, is what our management has done very effectively over many years, and we're satisfied that the structures that we have got in place should continue into the future.''

Mr Mayne also took issue with the $12.6 million per year required to manage the company and suggested Alumina could have saved $1.5 million annually if it chose not to replace outgoing chief executive John Marlay.

Mr Marlay said after the meeting that the AWAC joint venture, which has been in place for 14 years, was ``very good'' and Alumina had got the balance right with the size of the board.

AWAC has an international network of alumina refineries in the United States, Brazil, Suriname, Jamaica, Spain and Australia, and produces about 25 per cent of the world's alumina.

Mr Marlay said Alumina's future focus would be on the AWAC joint venture and the company was unlikely seek out other investment opportunities or potential acquisitions in the short term.

Former BOC Group Plc executive director John Bevan, who spent eight weeks as the chief executive of Downer EDI's mining division before resigning in August, will replace Mr Marlay as Alumina's chief executive from June 16.

Mr Marlay said that there had been a ``worldwide'' search for a new chief executive and Mr Bevan was considered among the best candidates for the job.
Alumina shares closed up 14 cents at $5.87.

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