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AMAX TAKING STEPS TO RESTORE PROFITABILITY

 NEW YORK, May 6 /PRNewswire/ -- Allen Born, AMAX Inc. (NYSE: AMX) chairman and chief executive officer, told shareholders at the company's annual meeting today that AMAX is acting now to improve its profitability and not waiting for the substantial benefit an upswing in aluminum prices will bring as supply becomes tight.
 "We're confident the upswing will happen," Born said. "We believe that soon we'll be out of this cycle, providing a good return to our investors and enjoying the fruits of the capital we've invested since 1988."
 Born acknowledged, "The last two years have been difficult and disappointing..." He cited the delayed effects of the recession, which brought lower demand for metals and energy. In addition, the combination of lower demand and large increases in aluminum from the CIS countries has been a major depressant of aluminum prices. Start-up costs for new facilities just coming on stream also contributed to disappointing results. "Lower prices plus additional costs equals fewer profits. That equation doesn't change," said Born.
 Born stated that there is little likelihood of the picture changing dramatically in the near term, since aluminum inventories are still high, while demand was only just beginning to pick up. However, he expected "some gradual improvement in the intermediate term...that should have a positive effect on prices." And in the longer term, predicted shortages in primary aluminum plant capacity would trigger a tight market situation with firming prices, he said.
 With the recovery, AMAX will "take full advantage of the new plants and facilities we have in place. We plan to cut our outstanding debt by half over the next 36 months. We look forward to restoring our dividend to competitive levels."
 Born cited results from steps the company has taken as part of the asset management and debt reduction program initiated to achieve these goals. These include:
 -- reducing operating costs - administrative and operating costs cut by about $100 million over the last 18 months;
 -- equity financing - new series of convertible preferred stock issued to allow for some respite in the overall debt-to-capital balance;
 -- dividend reduction - reduction by half for the 1993 first quarter and suspension for the second; future decisions to depend on existing business conditions;
 -- cash capital spending cuts - reduction in 1993 spending to $220 million, vs. $440 million in 1992 and close to 1 billion in both 1990 and 1991;
 -- asset sales - sale of water rights to Colorado, extraneous oil and gas properties, and mining interests in Chile.
 Born noted that AMAX is continuing the strategy established in 1985 -- that AMAX "will continue to concentrate our resources and technology in businesses where we can be in the lowest quartile of production costs and where we have sustainable competitive advantages. We will withdraw from any business that does not meet those tests and that can't provide an adequate cash return."
 He listed results of this strategy in the last five years:
 -- assets increased from less than $4 billion to over $6 billion;
 -- investment of $3.5 billion to build low-cost operating facilities, with more than 80 percent -- $2.7 billion -- coming from operating business cash flow;
 -- $300 million in dividends returned to shareholders;
 -- repurchase of $500 million of the stock.
 Born concluded his remarks by noting, "We must remember that, like it or not, the cyclical businesses we're in subject as to periods of reduced earnings. They also give us some very nice profits in good times. We're doing our best to prepare ourselves to capitalize fully on the upswing ahead."
 AMAX Inc. is a worldwide supplier of quality metals and energy. In the United States it is the third largest integrated aluminum company and the third largest coal producer. It is also a leading producer of natural gas, gold and molybdenum.
 -0- 5/6/93
 /CONTACT: Jerry Cooper of AMAX Inc., 212-856-5982/
 (AMX)


CO: AMAX Inc. ST: New York IN: MNG SU:

CK-OS -- NY058 -- 5410 05/06/93 12:00 EDT
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Publication:PR Newswire
Date:May 6, 1993
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