ALUMINA has returned to profitability on a $US57 million （$A56.6 million） turnaround and China's insatiable demand for the commodity is set to push prices higher.
Alumina posted a $US34.6 million full-year profit compared to a $US23.7 million loss in 2009.
Underlying earnings were $US37 million in the year to December 31. This was up from $US300,000 in the previous corresponding period.
Alumina has a 40 per cent stake in Alcoa World Alumina and Chemicals, the world's largest alumina business with 17 per cent of global production.
The company's bright outlook was boosted by China's demand for alumina.
The Alumina-Alcoa joint venture said it achieved a $US1.1 billion turnaround in free cashflow, reporting $US416 million, up from a deficit of $US729 million in the previous corresponding period.
"The start-up issues in Brazil look to be largely behind with the refinery now running at capacity," Alumina chief executive John Bevan told analysts.
"Prices are up and new contracts are now being based on alumina price indices, a significant breakthrough from the previous practice of pricing alumina relative to the aluminium price."
Issues at the Alumar refinery in Brazil incurred costs of $US135 million.
Credit Suisse analyst Paul McTaggart said the most significant positive about the result was AWAC's turnaround in free cashflow.
Spot prices for alumina are about $US390/tonne.
Alumina declared a fully franked dividend of US4c, taking the full year dividend to US6c, up from 1.8c in the previous year.
Alumina shares closed down 3c at $2.46.
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