Groups Lobby Alcan On Expansion Plans: B.c., Quebec Regions Eyed For Smelters

Published by MAC on 2006-04-28
Source: Toronto Globe and Mai

Groups lobby Alcan on expansion plans: B.C., Quebec regions eyed for smelters

ALLAN SWIFT

Toronto Globe and Mai

28th April 2006

MONTREAL -- Alcan Inc.'s annual meeting yesterday became the rallying point for British Columbia and Quebec groups that want their region chosen for the company's next major aluminum smelter expansion.

Another group, meanwhile, demanded that Alcan back out of a proposal to build a major bauxite mining and alumina smelting project in a poor region in India.

Richard Evans, at his first annual meeting since being appointed chief executive officer this spring, confirmed that Alcan is looking at five or six major primary aluminum projects, evaluated mainly on their access to cheap energy.

One of these is in Kitimat, B.C., where Alcan may modernize and expand its old smelter, while the other would involve the expansion of a modern refinery in Alma, Que.

Mr. Evans said Alcan would like to expand Kitimat, with new smelting technology that would be 30 to 35 per cent more efficient. A major engineering challenge is how to situate an enlarged smelter, as the site is hemmed in by mountains.

"I would like nothing better than a good project for Kitimat," Mr. Evans said. "It is in our interest to build the biggest smelter that will fit on the site."

The other primary metal ventures are in Cameroon, China, Iceland and South Africa.

Meanwhile, a Montreal-based order of Roman Catholic nuns, along with Ethical Funds Inc. of Vancouver, proposed that Alcan set up an advisory committee to evaluate the project in Kashipur, India.

Their proposal got 37 per cent of shareholder votes, unusually high support for a proposal that is opposed by a company board.

Mr. Evans said the company, which would have a 45-per-cent stake in the project, has not made a decision whether to proceed.

He said Alcan would have the project evaluated by a third party for its environmental, social and economic impact if it did decide to go ahead. But he said the company does not want its agenda dictated by activists, who might force Alcan into expensive studies for projects it might not carry out.

"It's a clear signal that shareholders are more aware of social impacts," said Lise Parent, spokesperson for the group opposed to the Indian project."

Her group claims the mining project is being forced on the region by multinationals against the will of the local populace.

Alcan shares fell by $1.94 to $57.43 on the Toronto Stock Exchange, a loss of 3.3 per cent. Alcan is to release its first-quarter results next week.