October 9, 2006

Alcan's SPL recycling plant to go ahead, firm issues 2006 Sustainability Report

Alcan will proceed with its plan to build a $242-million aluminum spent pot lining (SPL) recycling plant in Quebec's Saguenay-Lac-Saint-Jean region. The industrial-scale pilot project will use the company's proprietary technology, called Low-Concentration Caustic Leaching and Liming, to convert SPL into a non-hazardous waste.

Alcan will design, construct, test and optimize a treatment plant with a processing capacity of approximately 80,000 tonnes per year of SPL, the residual material generated in the de-lining of pots following the aluminum smelting electrolysis process. The resulting non-hazardous byproducts would be suitable for materials recovery and recycling.

"Alcan is proud to have developed a sustainable, innovative and cost-competitive solution for the treatment of spent aluminum pot lining that could become the standard for the entire industry," Cynthia Carroll, president and CEO of Alcan's primary metal group, told a press conference. The company, she added, "will continue to pursue research in collaboration with our partners to completely recycle the byproducts generated by this process."

The project is receiving support from the federal government, in the form of a $19.1-million investment made through Technology Partnerships Canada, an agency of Industry Canada. "This pilot project is important because it will ensure that the waste will no longer pose a threat to the bodies of water in our region, including groundwater, nearby creeks and the Saguenay River," federal Labour Minister Jean-Pierre Blackburn said on behalf of Industry Minister Maxime Bernier.

SPL is composed of old refractory bricks and carbon-containing material from the linings of the electrolytic cells in which aluminum is produced, along with fluorides and a small amount of cyanide. Classified as hazardous waste, it must be handled accordingly. SPL originating at Alcan's operation is currently stored on site.

The company says this new process will render all the spent pot lining recyclable, providing the global aluminum industry a sustainable method for managing byproducts generated by the its smelting operations.

The plant's technology was developed at Alcan's Arvida Research and Development Centre (ARDC). Of the various residuals management options studied, this technology and investment was deemed to be superior, based on Alcan's environmental, economic and social criteria. The facility is expected to begin SPL treatment operations in the second quarter of 2008.

The site could also process spent pot lining for other Quebec aluminum producers. Quebec's aluminum smelters generate approximately 55,000 tonnes of SPL annually, with nearly half of this coming from Alcan's facilities.

The project was subject to the federal environmental assessment process, and underwent a comprehensive study EA, including and public consultations. More information on this process is available on the Canadian Environmental Assessment Agency Web site, www.ceaa-acee.gc.ca.

The announcement of the project go-ahead coincided with the release of Alcan's 2006 Corporate Sustainability Report, providing ample illustration of tangible value resulting from its company-wide commitment to sustainability. The fifth annual report builds on the eight key sustainability focus areas introduced in the 2005 report.

Known as the "Alcan 8," these priority categories are broad enough to capture virtually all the major issues currently facing the company. Fully half are directly environment-related: climate change, natural resource stewardship, environmental releases and product stewardship. The remaining four are energy, innovation and industry shifts, community development and well-being (including health and safety).

"Worldwide, sustainability as an approach to business continues to evolve as more companies identify and express the link to long-term value creation. At Alcan, sustainability is evolving as we refine our goals and establish metrics to effectively measure the impacts of our actions," said Alcan president and CEO Dick Evans. Within the company, he added, embedding sustainability criteria into its decision-making process has allowed sustainability to be increasingly seen as an integral part of value creation.

Drawing on guidelines established by the Global Reporting Index, the 2006 report includes performance data from calendar years 2003, 2004 and 2005, and references to key initiatives in early 2006.

Among the highlights of the past year was a 25% reduction in GHG emissions intensity (direct and indirect) between 1990 and 2005, surpassing the company's objectives. Alcan has committed to a further 10% reduction in direct emissions intensity over the next five years (2006-2010).

The report also documents substantial reductions in other emissions, briefly summarizing the factors contributing to these reductions. Primary metal fluoride emissions, for example, declined 13% from 2004 levels, based on real holdings. Primary metal PAH emissions (from S┬┐derberg smelters only) were also reduced significantly, from 523 tonnes in 2004 to 283 tonnes in 2005; this reduction was the result of the closure of S┬┐derberg production at the Arvida, Quebec facility as well as the divestiture of some primary metal sites.

The Arvida closure was also a major contributor to a dramatic decrease in the rate of primary metal particulate emissions from Alcan smelters, from the 2004 level of 3.39 kg per tonne of hot metal produced to 2.74 kg in 2005. Sulfur dioxide (SO2) emissions from all Alcan operations also decreased from 123,200 tonnes in 2004 to 113,400 tonnes in 2005. This reduction, notes the report, is related to a change in asset mix, including the spinoff of Novelis, a new recycling operation, and the closure or divestiture of primary metal, bauxite and alumina sites.

The company continued to implement its Alcan Integrated Management System (AIMS), introducing in 2005 a fourth new "Alcan People Advantage" pillar. This recognizes that Alcan's ability to maximize value depends on the quality, skills and dedication of its employees, says the report.

Last year as well, Alcan was selected as the 2005/2006 super-sector leader (all basic resources) and leading aluminum sector company on the Dow Jones Sustainability World Index (DJSI-World). Alcan has appeared on the DJSI-World every year since 2003.

The report further notes that Daniel Gagnier, Alcan's senior vice president for corporate and external affairs, chairs the International Institute for Sustainable Development's board of directors.

The report may be viewed in HTML and PDF format on-line at www.alcan.com/SR06.

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