Alcoa Inc and its Australian partner, Alumina Ltd, have settled a dispute and agreed to make changes to their joint venture, removing an obstacle to Alcoa's plan to split into two companies.

The changes simplify dividend and cash management policies and will require their Alumina and World Chemicals (AWAC) joint venture to raise a small amount of debt to help fund growth projects, the two companies said.

It also clarifies what may happen to alumina and bauxite supply rights if ownership of Alumina was to change hands.

"Among other benefits, this opens the door for an industrial partner to enter the joint venture, and like Alcoa, to become a long-term customer for bauxite and alumina," Alcoa's president of global primary products, Roy Harvey, said in a statement.

(Reporting by Sonali Paul; Editing by Leslie Adler).