UPDATE 1-Alcoa to curtail 443,000 metric tons refining capacity in Suriname

(Corrects paragraph 2 to clarify Alcoa and the Suriname government are pursuing a transaction, and have not agreed upon one yet)

March 17 (Reuters) - Aluminum maker Alcoa Inc said it would curtail 443,000 metric tons per year of alumina refining capacity at its Suralco facility in Suriname.

Alcoa and the South American country's government have also agreed to pursue a transaction in which a state-owned entity will buy the Suralco operations, the company said on Tuesday.

The company's shares were down 1.5 percent at $13.09 on the New York Stock Exchange in afternoon trading.

Alcoa said it expects to complete the curtailment by April 30, and reach a deal with the government there by July 1.

Of Suralco's 2.2 million metric tons annual refining capacity, 876,000 metric tons is currently idled, Alcoa said.

The company said earlier this month that it would review 500,000 metric tons smelting capacity and 2.8 million metric tons refining capacity for possible curtailment or divestiture over the next 12 months.

Alcoa has been investing in more advanced aerospace and automotive products, while selling off some of its traditional, costly smelting facilities.

The company sold off stakes in smelting and refining operations in the fourth quarter ended Dec. 31.

Alcoa said it would offer severance packages to affected employees. It does not expect financial impact related to the curtailment to be material to its earnings.

The benchmark aluminum price on the London Metal Exchange has fallen about 13 percent in the past six months.

The company's stock had risen about 12 percent in the 12 months to Monday's close, outperforming the 10 percent rise in the broader Dow Jones U.S. Aluminum Index.

(Reporting by Ankit Ajmera in Bengaluru; Editing by Joyjeet Das)