Have you noticed how the world of big business is coming together, creating deals between companies from all over the globe?
One of the latest such ventures involves recently struggling Alcoa
Current plans call for the inclusion of a bauxite mine, an alumina refinery, a rolling mill and an aluminum smelter. The mine will have a capacity of 4 million metric tons per year for starters, while the refinery will be capable of turning out about 1.8 million metric tons annually. The mill will be devoted initially to the production of aluminum cans and, as it becomes necessary, materials for the construction industry.
During the worldwide economic recession, Alcoa has been hindered significantly by a lack of aluminum demand and consequently sliding prices. As such, like so many U.S. industrial companies, it has been cutting costs, shuttering plants, and putting its funds into its most efficient plants, such as in Brazil.
But now the company is embarking upon what CEO Klaus Kleinfeld is calling, "A model for the growth of aluminum in competition with other metals." The facility was originally scheduled to include Rio Tinto
The Alcoa-Maaden combination is one of several to come together of late. As you know, early last week, ExxonMobil
Regarding Alcoa's deal, my inclination is that the company suddenly is imbued with increased potential. While I wouldn't load up the ore cart right now, I'd keep my eye on the company and perhaps slowly salt away a few shares.
Fool contributor David Lee Smith doesn't own shares in any of the companies mentioned. He does, however, welcome your questions and comments. The Fool owns shares of XTO Energy and Terex. The Fool has a disclosure policy that'll never be buried in the sand.