The Alcoa settlement was without admitting any liability and includes a long-term alumina sales agreement that Alba said had an additional settlement value of $US362m.

Alba filed the lawsuit in 2008 in what was the first case of its type brought by a foreign business in a US court. It alleged it paid $US500m more than it should have for alumina supplies over more than 20 years because of bribery and fraud.

Alcoa and Alumina are 60:40 partners in the Alcoa-managed AWAC global alumina alliance which supplied alumina from its Australian operations to a Singapore-based company controlled by Victor Dahdaleh, a Canadian businessmen linked to the Bahraini alumina scandal.

Alumina said yesterday Alcoa had agreed that the cash costs of the settlement of the civil proceedings -- and any from the ongoing regulatory investigations by the US Department of Justice and the US Securities & Exchange Commission -- will be allocated 62.5pc to Alcoa and 37.5pc to AWAC, making Alumina's effective exposure 15pc.

Alumina also revealed that AWAC would fund all settlement payments by debt, without any call on Alumina to contribute funds. The local market welcomed Alumina's limited exposure to the settlement by pushing shares in the cash-strapped group 2.3pc higher to 89.5c.

The Alcoa settlement was announced along with its report of a $US143m loss for the third (September) quarter due to a 17pc fall in aluminium metal prices and weaker alumina prices. Alumina's only source of cashflow is dividend payments received from AWAC.

Alumina did not receive any dividends from AWAC for the quarter, but Alcoa has agreed that Alumina will receive dividends from AWAC of $US20m during the fourth (calendar) quarter, and not less than $US100m in 2013.