Alcoa Inc. (AA - Analyst Report) announced that it has converted its San Ciprian alumina refinery from fuel oil to natural gas following the construction of a new gas pipeline. An investment worth $25 million was made in the project for changing the alumina refinery to natural gas.

This move by Alcoa to convert the refinery and increase its natural gas supply capacity will help the company compete on a global scale at an effectively lower long-term cost. Moreover, this transition is an environment-friendly alternative to fuel oil for refining.

This shift from fuel oil to a natural gas refinery enables Alcoa to decrease energy costs by $20 per metric ton, thus helping it improve its position on the alumina cost curve to the 21st percentile by 2016. Alcoa reported that its position on the alumina cost curve has already improved from the 27th percentile in 2013 to the 25th percentile in 2014. Additionally, this shift facilitates Alcoa in reducing greenhouse emissions like carbon dioxide (CO2) by 30% and sulphur dioxide (SO2) completely.

The inauguration ceremony of the new gas pipeline was attended by the heads of the Galician Regional Government, Natural Gas-Fenosa – the owner of the new gas pipeline, and Alcoa Spain.

Alcoa reported its fourth-quarter 2014 results last month. The company surpassed earnings estimates in the fourth quarter on strong aluminum demand from aerospace and automotive markets, and higher metals pricing, backed by its ongoing efforts to reposition its portfolio. Adjusted earnings were registered as $432 million or 33 cents per share in the reported quarter, much ahead of the year-ago earnings of $40 million or 4 cents per share.

Revenues rose 14.2% to $6,377 million in the fourth quarter from $5,585 million in the year-ago quarter and also increased 2.2% from the previous quarter. The increase was driven by higher sales in Alcoa’s mid and downstream businesses, increased metal prices and energy sales.

Alcoa currently carries a Zacks Rank #3 (Hold).

Better-ranked companies in the mining space include Coeur Mining, Inc. (CDE -Snapshot Report), NovaCopper Inc. (NCQ) and Thompson Creek Metals Company Inc. (TC - Snapshot Report), all carrying a Zacks Rank #2 (Buy).