CHINA’S IMPACT ON THE GLOBAL

ALUMINUM INDUSTRY
A STRATEGIC PERSPECTIVE

PREPARED BY
INDUSTRY ANALYSIS DEPARTMENT — ALCAN INC.
OCTOBER 2002
3 WILL CHINA BE A DESTABILIZING 3

FACTOR IN THE YEARS AHEAD?

Some analysts have expressed the opinion that China could constitute a destabilizing force in the primary
metal market by becoming a significant net exporter of aluminum, beginning in 2002 and continuing in the
years ahead. Such an eventuality would increase the net imports of metal originating from the former East
Bloc, push up the Western World metal supply and thus have a depressing effect on the real long-term price
of aluminum. In the opinion of these analysts, China’s aluminum industry might well play a role in the current
decade similar to the one played by Russia’s aluminum industry during the first half of the 1990s.

What are the facts? Do they support the view of these analysts? What would have to change for this view to be
a reflection of the future? These are the questions this text will attempt to answer from Alcan’s perspective.
EXECUTIVE SUMMARY 1

A number of analysts have expressed the opinion that China could emerge as a significant net exporter of
aluminum over the next few years — a development they fear would have a destabilizing influence on the
primary metal market, pushing up Western World supply and thereby driving down prices. In the opinion of
these analysts, China might well play a spoiler role in the current decade similar to the one played by former
East Bloc producers during the so called “Russian metal shock” of the early 1990s.

The China scenario is an admittedly complex one. What are the facts of the matter? In order to shed some light
on a situation that could have a crucial impact on the outlook for the global industry, Alcan industry analysts
undertook an intensive, segment-by-segment study of China’s burgeoning aluminum industry.

Highlights of their findings are summarized below for your convenience.

China’s Economic and Social Environment

The People’s Republic of China is a country of 1.28 billion inhabitants
spread over an area of 9.6 million km2. It boasts one of the fastest
growing economies in the world with gross domestic product (GDP)
increasing at reported average annual rate of 7.9% since 1996. China’s
recent admission to the World Trade Organization (WTO) has provided
the potential for a level playing field for competition, while creating
immense business opportunities and providing access to one of the
largest markets in the world.

A Capsule Look at China’s Aluminum Industry

Given China’s economic growth rate and the reluctance of its government
to rely too heavily on imports of strategic materials, the country has
evolved into a major player in the world aluminum industry. Highlighted
here in capsule form is Alcan’s assessment of key segments of the
Chinese industry.
2

Bauxite:
China’s bauxite supplies are abundant but expensive to process. Chinese
bauxite is predominantly diaspore, which is high in silica with an alumina
content of 55% to 65%. Because of its low quality and the high process-
ing costs entailed, China’s bauxite is not exported, but refined locally
using a soda-lime sinter process.

Alumina:
For a variety of economic, financial and quality reasons, China will remain
a net importer of alumina in the years ahead. Current excess demand of
more than 3 million tonnes could reach the 5-million-tonne level by 2006.
Nevertheless, China’s increasing reliance on imported alumina will be
gradual, as the government will almost certainly continue to protect
state-controlled Chalco’s high-cost sintering facilities, notwithstanding
reduced import tariffs.

Aluminum Production:
With production of some 3.5 million tonnes in 2001, China currently ranks
as the largest aluminum producer in the world, thanks to idled capacity in
the U.S. Pacific Northwest. However, most of its 130-plus smelters are
characterized by high costs, small scale, outdated technology and signif-
icant pollution problems. With the exception of four larger facilities,
Chinese smelters are all located on the upper right-hand side of the
aluminum cost curve. While there has been a rapid expansion of China’s
smelting capacity, the surge has resulted largely from inducements
(mainly subsidies by provincial governments) rather than any “natural”
comparative advantages. Current government policy and WTO require-
ments should combine to reverse this surge in output.
 3

The Power Situation:

Despite being the world’s second largest generator of electricity, the
transmission of power from regions of China that enjoy surplus capacity
to areas which are short is constrained. Most of the country’s power
grids are still not interconnected. But this situation is changing and a
reduction in electricity rates is expected, provided that contemplated
reforms in the energy sector proceed. This should encourage even more
development of large-scale smelters in China’s eastern provinces,
further exacerbating the comparative disadvantages of smaller-scale,
highly polluting smelters.

Aluminum Consumption:
China’s aluminum consumption has been growing at an annual rate of
about 14% since 1997. The higher consumption has been driven mainly
by growth in the construction (32% of total aluminum use), trans-
portation (12%) and power (12%) sectors. Imports of remelt ingot, scrap
and semi-fabricated products fill the gap between China’s surging
demand and its domestic supply of aluminum.

Imports vs. Exports:

China has been a net importer of unwrought aluminum every single year
except in 1998. Over the past seven years, China’s net imports of
unwrought metal averaged 230 thousand tonnes (kt). Imports dropped to
120 kt last year, reflecting a surge in aluminum production capacity,
increased tolling activity by Chinese smelters and a slowdown in metal con-
sumption. For the first eight months of this year, however, China has been
a net exporter of unwrought metal, with net exports amounting to 146 kt.
4

Demand/Supply Situation (2002-2006):

Going forward, we expect that China’s aluminum consumption should
increase by 10-11% a year. At that rate, consumption should exceed
5,800 kt by 2006. On the supply side, after increasing by 24% in 2001
and 2002, China’s aluminum production also should continue to increase
but at a slower pace, in the range of 8-9%. Consequently, even if
production exceeds demand for the next two or three years, China
should once again become a net importer of unwrought metal by the
middle of the decade.

Summary:
Given the above assumptions, the possibility of China becoming a long-
term net exporter of unwrought aluminum seems remote. Thus, we
believe that China will not be a major destabilizing factor in the years ahead.
 1 CHINA’S ECONOMIC 5

AND SOCIAL ENVIRONMENT

The People’s Republic of China is a country of 1.28 billion inhabitants spread over an area of 9.6 million km2.
It is divided into 22 provinces, five autonomous regions, and three municipalities (Beijing, Tianjin, Shanghai) under
the direct control of the State Council. Population density has increased by 37% over the last quarter of a
century to 133 inhabitants/km2, which explains the priority accorded by the Chinese government to population-
control measures. This policy evidently has been quite successful, given that the population growth rate
declined from 2.6% during the 1960-1975 period to about 1% towards the end of the ‘90s. China’s population
used to be essentially agricultural. In 1975, for instance, 76% of the population was classified in the agricultural
sector, while the industrial and services sectors accounted for 12% each. Today, the service sector provides
work for almost 35% of the population, while the relative share of the agricultural sector has dropped to 47%.

As concerns the economic environment,
China is one of the fastest growing
economies in the world with gross
domestic product (GDP) reportedly
growing at an average annual rate
of 7.9% since 1996. China’s industrial
production for August 2002 was up
12% on a year-over-year basis, which
represented by far the best performance
in Asia and a much higher rate than
in most Western World countries.
Using the purchasing power parity
(PPP) concept, China’s per-capita
GDP jumped from $US273 in 1975
to more than $3,600 in 2000. On other
fronts, China’s inflation rate is under
control. And it enjoys a substantial
surplus in its trade balance and cur-
rent account, while its foreign reserves
exceed $200 billion. Finally, China
has recently joined the World Trade
Organization (WTO), providing the
potential for a level playing field
for competition and creating immense
business opportunities, along with
access to one of the largest markets
in the world. The following table
compares China’s performance with
a selected group of developed and
developing countries for the years
1975 and 2000:

ECONOMIC INDICATORS: CHINA AND A SELECTED GROUP OF DEVELOPED AND DEVELOPING COUNTRIES, 1975 - 2000

Public Expenditure
GDP Inflation Rate Debt Service/Exports on Education
Per Capita Annual Growth Rate
($,PPP) (%) (%) (%) (% of GDP)
1975 2000 1975 2000 1975 2000 1975 2000 1975 2000

China 273 3,617 9.4 8,0 1.1 0.4 4.3 9.0 1.7 2.3

Developed Countries
Canada 7,339 27,389 2.9 4.8 10.8 2.7 7.6 6.9
Japan 5,626 24,835 3.8 1.9 11.8 -0.6 5.5 3.6
United States 9,132 35,048 3.0 5.2 9.1 3.3 7.4 5.4

Developing Countries
Brazil 2,302 7,037 2.9 4.2 28.9 7.0 41.3 110.9 3.1 5.1
India 464 2,248 5.9 6.4 5.7 4.0 15.3 15.0 2.7 3.2
Mexico 2,555 8,820 2.2 7.0 15.2 9.5 41.1 25.1 3.5 4.9
Thailand 809 6,132 7.3 4.3 5.3 1.6 12.0 22.0 3.5 4.8
Source: The World Situation, Éditions La Découverte, Montreal, 2001.
6
2 CHINA’S
ALUMINUM INDUSTRY

Given China’s economic growth rate and the reluctance of central authorities to rely too heavily on foreign
imports, the country has evolved into a major player in the world aluminum industry. After reviewing the main
characteristics of China’s aluminum industry (bauxite and alumina, aluminum production and consumption, the
power situation, and the evolution of net imports during the last decade), this text will assess the main drivers
of future aluminum consumption and production in China and examine the conditions under which, going
forward, it might prove to be a net exporter or importer of unwrought aluminum.

a) Bauxite • Because of the low quality, China

• Abundant — but expensive to pro-
cess — is the best way to describe
Chinese bauxite. As of 2001, China
had total bauxite reserves of 2.27 bil-
lion tonnes (representing roughly
2% of the world’s bauxite reserves).
Of this total, 703 million tonnes were
classified as proven reserves (equiv-
alent to 50 times the current annual
consumption) and 1.57 billion tonnes
as probable reserves.
• China’s bauxite deposits are concen-
trated in two areas in the south and
north of the country, with Shanxi
Province having the largest deposits,
followed by Henan, Guizhou,
Guangxi and Shandong Province.
• China’s bauxite is predominantly
“diaspore” — that is high in silica,
with an alumina content of 55% to
65%. Three-quarters of the reserves
have an average alumina-to-silica
ratio of 6:1. By way of comparison,
the typical ratio of commercially
available bauxite in the West is 10:1.
does not export any metallurgical
grade bauxite. Moreover, the miner-
alogy and level of silica impurity in
Chinese bauxite mean that it cannot
be easily processed in conventional
Bayer plants. This has forced the
Chinese to perfect a soda-lime sinter
process. This Sintering and Hybrid
process requires a lot of energy —
up to 45 gigajoules (GJ) per tonne
of alumina as against 13 GJ for a
typical Western plant — and
large quantities of soda (114 kg
per tonne of alumina on average).
• In 2001, China’s total bauxite con-
sumption was estimated at 14 million
tonnes. The country’s bauxite mines
mainly supply domestic alumina
refineries, which are all owned by
Chalco, the state-controlled alu-
minum company. Of Chalco’s total
annual bauxite requirements in 2001,
59% was sourced from small inde-
pendent mines and 23% from their
own mines.
 7

BAUXITE RESERVES IN SELECTED PROVINCES (in million tonnes)

Shanxi

750
190

Shandong

24
20
Beijing

Henan

197
178

Shanghai Guizhou

240
128

Guangxi

240
Possible reserves
Hong Kong 119
Explored reserves

Various sources. 0 200 400 600 800

Bauxite Summary:
China’s bauxite is abundant but expensive to process. It is predominantly
diaspore, which is high in silica with an alumina content of 55% to 65%.
Because of its low quality and the high processing costs entailed, China’s
bauxite is not exported, but refined locally using a soda-lime sinter process.
8

ALUMINA CAPACITY, PRODUCTION & TECHNOLOGY (in million tonnes)

Shanxi

1.20 Bayer 58%

1.32
Sinter 42%

Great Wall (Zhongzhou)

0.44
0.53 Sinter 100%

Great Wall (Zhengzhou)

0.95
Bayer 68%
1.06
Sinter 32%

Shandong

0.73
Bayer 18%
0.81
Sinter 82%

Guizhou

0.45
Bayer 61%
0.50
Sinter 39%
Capacity

Production Pingguo
Bauxite
0.40
0.44 Bayer 100%
Various sources.

0 1 2 3

b) Alumina
• China is the second largest producer
of alumina in the world with pro-
duction in 2001 reaching 4.7 million
tonnes. Chalco owns all of China’s
six alumina refineries.
• Chinalco, representing China’s
central government, is the con-
trolling shareholder of Chalco,
having assumed ownership of
all shares resulting from a recent
restructuring (debt-to-equity
swap). Chalco’s ownership struc-
ture now is as follows:
Chinalco 72%
Institutional investors 20%
Alcoa 8%
• As suggested above, four of Chalco’s
six alumina refineries use Hybrid
technology, one uses the Sintering
process and one (Pingguo) the
Bayer technology.
• Those six refineries supply nearly
70% of China’s total annual alumina
requirements. Given that domestic
demand for alumina reached 7 mil-
lion tonnes in 2001, the difference
must be imported, mainly from
Australia (86% of total imports in
2000), India and occasionally from
the Americas. In 2001, alumina
imports exceeded 3 million tonnes,
as the market price remained below
$150/t for most of the year. Total
imports for the first seven months
of 2002 reached 2.37 million tonnes.
The gap between alumina demand
and domestic production will most
certainly increase over time, as alu-
minum production (and thus alu-
mina requirements) is expected
to increase faster than domestic
alumina production. Import needs
are expected to total about 5 million
tonnes by 2006.
• All six of China’s alumina refineries
are high-cost plants. Compared
with other refineries around the
world, they would rank in the high-
est cost quartile. Chinese alumina
also tends to be relatively low quality

in that it is fine, or floury, and rich in
impurities. On the other hand, aver-
age freight charges from Australia
to principal ports in China amount
to about $15/t. An import duty of
12% (equivalent to $20.50/t in 2002)
and average port-handling charges
of $10/t also have to be considered.
Even when all these items are taken
into account (including a value-added
tax paid by Chinese producers), the
domestic price of alumina is still
higher than the material imported
from Australia.
• Although China’s demand for alumina
exceeds local production, resulting
in a rapid increase and reliance on
imports, the latter are subject to
import tariffs. By increasing the price
of alumina imports, these tariffs and
quotas also have the effect of increas-
ing the relative competitiveness of
the domestic raw material. However,
with China having recently joined
the WTO, the import tariff has been
reduced from 18% to 12% for 2002.
Additional cuts are scheduled to take
place over the next two years.
2001 2002 2003 2004
18% 12% 10% 8%
• If everything else were to remain
the same, this would be an incentive
for China’s aluminum producers
to rely even more heavily on foreign
imports in the years ahead, spurning
domestic alumina production. After
all, it is well known that most smelters
prefer imported alumina for eco-
nomic (cheaper) and quality (more
sandy) reasons. Also, capital may
no longer be a major hurdle in terms
of switching to imports, as tolling
9
ALUMINA SUPPLY/DEMAND
HISTORIC, CURRENT AND PROJECTED SUPPLY AND DEMAND — CHINA
12,000
Demand
Supply
10,000
8,000
6,000
4,000
2,000
('000
tonnes)
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Various sources.
(the exchange of alumina for metal) facilities. If tariffs are no longer a
has proved to be an effective means first best option, several non-tariff
to alleviate working capital require- trade barriers (import quotas, dual
ments. This is particularly true if the exchange rates, procurement poli-
alumina in question can be processed cies, an alumina import registration
without the need for major capital policy, etc.) are still available to help
investment. Finally, bank financing is discourage producers from switch-
available to smelters with acceptable ing too fast from domestic to
economies of scale. imported alumina.
• However, everything else is not likely
to remain the same. One should
assume that the Chinese government’s
intention is to continue protecting
Chalco’s high-cost alumina sintering
Alumina Summary:
Thus for economic, financial and quality reasons, China is likely to remain
a net importer of alumina in the years ahead. Current excess demand of
more than 3 million tonnes could reach the 5-million-tonne level by 2006.
Nevertheless, China’s increasing reliance on imported alumina will be gradual,
as the government will almost certainly continue to protect Chalco’s high-cost
sintering facilities, notwithstanding the reduced import tariffs.
10

SMELTER CAPACITY AND LOCATION

Total Smelters: 133

Total Installed Capacity: 3,850 kt
Yellow River
Beijing Total Operating Smelters: 133
Total Production Capacity: 3,450 kt

> 100 kt (9 smelters)

50 - 100 kt (12 smelters)
< 50 kt (112 smelters)
Yangtse River
Shanghai Alumina refineries
Bauxite

Various sources.

Hong Kong

CHINA’S SMELTERS RELATIVE COST POSITION

2,000
Excludes the roughly 100 smaller Chinese smelters 1) Pingguo
located at the extreme right-hand of the cost curve.
2) Guizhou
1,800
3) Qinghai
10)
9) 4) Qingtongxia
1,600 7)
8)
5) 6) 5) Lanzhou, LianCheng, Baotou
4) 6) Yunnan
1,400 3)
1) 2)
7) Fushun, Baiyin

1,200 8) Danjiang

9) Tongchuan
1,000 10) Zhengzhou, Jiaozuo Wanfang, Shandong

800
2000 full
operating cost
0 5 10 15 20 25
(US$/t) Cumulative capacity (Mt) Source: CRU International Ltd.
 11

c) Primary Aluminum Production SMELTERS APPROVED BY CENTRAL GOVERNMENT BETWEEN 1997–2001

• There are 133 smelters in China, Additional Project Approved
with a combined production capac- No. Name of Plant Capacity (kmt) Type Technology by
ity in 2001 of 3.5 million tonnes. 1 Shenyang Kangping 10.00 G 60kA Soderberg Local
A good number of them are located 2 Baotou 30.00 B 60kA Soderberg Local
around the Yangtse and Yellow Rivers. 3 Luqian 20.00 G 135kA PB Local
Most (112) have a capacity of less 4 Taiyuan Dongfeng 15.00 G 60kA Soderberg Local
than 50 kt, and only nine of the 5 Yangqian 30.00 G 60kA Soderberg Local
smelters have installed capacities 6 Zhengxin 15.00 G 60kA Soderberg Local
exceeding 100 kt. Nevertheless, that 7 Jinxin 5.00 G 60kA Soderberg Local
latter group of large smelters is 8 Guan Aluminum 80.00 B 190kA PB Local
responsible for almost 40% of 9 Shanhe 13.00 G 60kA Soderberg Local
China’s total aluminum production 10 Shandong 10.00 B 80kA PB Local
capacity. Three of those large facili- 11 Conglin 10.00 G 60kA Soderberg Local
ties (Guizhou, 230 kt/y capacity; 12 Luxi 60.00 G 190kA PB Local
Qinghai, 200 kt/y; Pingguo, 127 kt/y) 13 Zhouping 60.00 G 230kA PB Local
are owned by Chalco, whose five 14 NanShan 25.00 G 160kA PB Local
smelters together accounted for
15 Sanmenxia 60.00 B 190kA PB Local
nearly 20%, or 680 kt/y, of China’s
16 Gongyi No. 1 Power 30.00 G 160kA PB Local
primary capacity in 2001. The lowest-
17 Jiaozuo 70.00 B 280kA PB Central
cost facilities are, in increasing order,
18 Shenhuo 60.00 B 200kA PB Local
those of Pingguo, Guizhou, Qinghai
19 Shangdian 15.00 B 75kA PB Local
and Qingtongxia. All smelters with
20 Qingyang 12.00 B 60kA Soderberg Local
a capacity of less than 50 kt can be
found at the extreme upper right- 21 Xinwang 43.00 G 160kA PB Local
hand of the cost curve. 22 Huamao 15.00 G 60kA Soderberg Local
23 Huanghe 25.00 G 60kA Soderberg Local
• Between 1998 and 2001, China’s pri- 24 Dengfeng Power and smelter 50.00 G 80kA PB Local
mary aluminum production grew 25 Long Xiang 50.00 G 155kA PB Local
at an average annual rate of 12.7%. 26 Dengfeng Al Smelter 25.00 G 80kA PB Local
Thus, total production has almost
27 Changcheng 20.00 G 60kA Soderberg Local
doubled over the past six years, with
28 Mianchi 60.00 G 160kA PB Local
new investments adding 1.6 million
29 Xin An 60.00 G 160kA PB Local
t/y of capacity. Total installed capac-
30 Gongyi No. 2 Power 20.00 G 160kA PB Local
ity reached 3.8 million t/y in 2001,
31 Danjiangkou 35.00 B 120kA PB Local
while production reached 3.5 million
32 Lanzhou 120.00 B 200kA PB Central
tonnes. More than 50% of overall
production was attributed to the 33 Haibei 25.00 B 120kA PB
country’s 18 largest smelters. The 34 Baihe (Huangzhong) 6.00 B 75kA PB
adjacent table details the increase 35 Qinghai 55.00 B 200kA PB
in smelting capacity over the 1997- 36 Changqi 30.00 G 60kA Soderberg
2001 period. The additional capacity 37 Qingtongxia 130.00 B 200kA PB Central
of 1.6 million tonnes is identified by 38 Pingguo 30.00 B 320kA PB Central
technology, project type and approv- 39 Guizhou 70.00 B 186kA PB Central
ing agency. A total of about $2.2 bil- 40 Yun Nan 110.00 B 186kA PB Central
lion was spent to bring forward this 1,609.00
additional smelting capacity. * All projects denoted in “blue” are approved by the Central Government.
* G = Greenfield
B = Brownfield
Various sources.
12
• More than 100 of China’s smelters
(totalling 1,600 kt/y of capacity) are
operating with less than 50 kt/y capac-
ity. About 85 smelters (1,300 kt/y of
capacity) use outmoded Soderberg
technology. These small-scale smelters
• What are the main reasons
are both uneconomic and highly
polluting. Given the increasing pres-
sure to comply with environmental
regulations and a reduced willingness
to continue financing substandard
operations in the wake of China’s
accession to the WTO, it seems very
unlikely that these small-scale smelters
will survive economically. Might they
survive “uneconomically”? Should
the respective local governments opt
to continue subsidizing them with
low-cost electricity, while exempting
them from environmental protection
requirements, then they might sur-
vive in the short term. Nevertheless,
with China having joined the WTO,
the local protective policies that have
been keeping such facilities alive will
ALUMINUM SMELTER PRODUCTION
HISTORIC, CURRENT AND PROJECTED SMELTER PRODUCTION — CHINA
6,000
Aluminum
5,000
4,000
3,000
2,000
1,000
('000
tonnes)
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Various sources and estimates.
be increasingly difficult to apply
and the number of small, uneco-
nomic, polluting smelters will
likely decline substantially in the
intermediate term.
behind China’s rapid expansion
in smelter capacity?
- Average growth of aluminum con-
sumption was about 14% per year
over this period, as China expe-
rienced rapid industrialization
coupled with special policies imple-
mented to encourage domestic
consumption and thus fuel higher
economic growth. For example,
liberalization of the housing market,
accelerated implementation of
urbanization projects and large-
scale projects aimed at upgrading
the national power network all
had a significant impact on alu-
minum consumption.
- In order to strengthen the com-
petitiveness of Chinese business
in preparation for the keen com-
petition expected to follow WTO
admission, the government began
as far back as 1998 to provide
interest-free loans to develop the
country’s economic infrastructure
and encourage modernization of
capital equipment through technol-
ogy upgrading, capacity expansion
and new product development.
Many such loans were approved
for larger smelters, with capacities
close to or exceeding 100 kt/y.
- Moreover, in order to take advan-
tage of the availability of interest-
free loans and local government
 13

support for modernization projects, survival — and with the blessing

numerous other enterprises have
been bypassing the required central-
government approval procedures.
Instead, they managed to gain
approval for smelter expansions
by phasing their projects into
smaller scale initiatives that fit
within provincial and regional
government loan limits.
- Whereas, in the Western World,
new smelter capacity requires an
investment of between $3,500-
$4,500/t-Al, recent projects in
China have averaged (according
to Chalco) less than $1,500/t-Al.
Thus, Chinese capital costs are at
least $2,000/t-Al lower than in the
West (using current exchange rates),
which implies lower ($80/t-Al) inter-
est payments and reduced require-
ments in terms of return on capital.
- Finally, China’s central government,
towards the end of the ’90s, restricted
the purchase of large volumes of
electricity from power plants oper-
ating with unacceptable economies
of scale (below 50 MW), so as to
achieve a better utilization of coal
resources. In order to ensure their
of local governments — these
small-scale power plants invested
in aluminum smelters as a justifica-
tion for maintaining full power-
generation capacities to support the
smelters’ operational requirements.
• What about the cost competitiveness
of the larger Chinese aluminum
smelters? Despite a number of pref-
erential electricity-supply policies
introduced over the years by the cen-
tral government for the benefit of the
15 largest smelters, electricity tariffs
generally remain higher than for
smelters in the majority of industri-
alized countries. Thus, operating
costs would place most large Chinese
smelters in the top quartile of the
world’s primary aluminum capacity.
(Such costs exclude working capital,
social welfare charges and transport
of the metal to market.)
• Given China’s high relative position
on the industry cost curve, domes-
tic producers have been protected
against foreign competition by a
tariff of 9% on imported primary
aluminum. As a condition for join-
ing the WTO, that tariff will decrease
over time. It has been established
at 5% for the current year.

Aluminum Production Summary:

To sum up, even though China currently ranks as the largest aluminum producer in the world (because of idled capacity in
the U.S. Pacific Northwest), with a production level of about 3.5 million tonnes in 2001, most of its 133 smelters are char-
acterized by high costs, small scale, outdated technology and significant pollution problems. With the exception of four
larger facilities (Pingguo, Guizhou, Qinghai and Qingtongxia), Chinese smelters are all located on the upper right-hand side
of the aluminum cost curve. True, there has been a recent, rapid expansion of China’s smelting capacity. However, the
surge in output reflects much more a change in “induced” (mainly subsidies by provincial governments) rather than
“natural” comparative advantages. Current government policy and WTO requirements will likely combine to reverse
this surge in output, as smaller, uneconomic smelters are closed in rough proportion to new capacity introductions.
14
d) The Power Situation in China
• How about the power situation
in China? Since 1980, the country
has added close to 12,000 MW per
year to installed capacity, to the
point where it has now exceeded
300,000 MW, generating an out-
put of 1,350 billion kwh. China’s
installed capacity should reach
490,000 MW in the year 2010, with
an output of 2,140 billion kwh. But
despite being the world’s second
largest generator of electricity, there
are still millions of rural residents
who are not connected to an electric-
ity network. And many more people
and businesses across the country
have access to only an irregular or
limited supply. How to explain this
apparent paradox? Not unlike other
logistics-related problems in China,
this situation is related to the local-
ization of power resources versus
the need to distribute power equi-
tably over a large geographic area.
• Representing the central govern-
ment, China National Power
Company is owner of the National
Power Network (NPN) as well as
major power generation plants.
The distribution of electricity is
accomplished through several
provincial networks and six regional
grids (Northwest Power Company,
Northeast, North China, South
China, East China and Southwest),
each of which encompasses a num- Major smelters (over 100 kt/y) have
ber of provinces. Most of these grids been granted preferential rates in
are not interconnected. But the gov- order to maintain their competitive-
ernment has started a program to ness relative to rivals abroad. A rate
correct this and it is expected that increase in 2000 reflected a sudden
a unified grid will be in place by increase in the price of coal, which
2010. In the mean time, the trans- resulted from a shortage caused by
mission of power from those regions government actions to close small-
that do have surplus capacity to scale coal mining operations (a pol-
areas that are short is constrained. icy similar to that just announced
Over all, electricity demand exceeds for small, inefficient smelters).
supply by 15% to 20% but the bal-
• Concerning the future, a further
ance varies from region to region.
reduction in electricity rates is
• How does this affect the develop- expected, provided contemplated
ment of the aluminum industry? reforms in the energy sector (aimed
For the time being, the most severe at facilitating free competition by
power shortages are in the East and separating the distribution network
South regions, the same areas that from power generating stations)
currently support nearly half of proceed. As stable, large-volume
China’s aluminum smelting capacity. consumers, smelters will likely be
Nevertheless, the situation is improv- considered as preferred customers.
ing. A general increase in installed Major smelters have been able to
power capacity has brought negotiate long-term, lower-priced
prices down: electricity contracts. However,
since most of the installed smelters
Average Price Range are located in Central and Western
(mills/kwh) (mills/kwh)
China while demand is greatest with
1997 42.2 32.5 - 56.6
the Eastern coastal provinces, China
1998 38.6
needs to continue with its upgrading
1999 36.1
project so as to develop a more effi-
2000 37.3
cient and properly inter-connected
2001 37.3 28.9 - 44.6
system for transmitting power
Various sources and estimates.
from west to east.
Power Summary:
To sum up, despite being the world’s second largest generator of elec-
tricity, the transmission of power from regions of China that have surplus
capacity to areas which are short (yet support nearly half of China’s
smelting capacity) is constrained. Most of the country’s power grids are
still not interconnected. This situation is changing and a reduction in elec-
tricity rates is expected if contemplated reforms in the energy sector
proceed. That should encourage even more development of large-scale
smelters in China’s Eastern provinces, near major markets and thus fur-
ther exacerbate the comparative disadvantages of smaller-scale, highly
polluting smelters.
 15
ALUMINUM TOTAL CONSUMPTION BY END-USE MARKETS (2001)

e) Aluminum Consumption TOTAL ALUMINUM CONSUMPTION BY END-USE MARKETS (2001)

• China’s aluminum consumption
grew at a compound annual rate
Western World 26,859 kt China 5,200 kt
of 14% from 1997 to 2000, compared
to a world average (excluding China) Building & construction

of 3.9% for the same period. The Consumer durables

10.1% 18.2%
increased consumption has been Electrical products
6.2% 32.0%
driven mainly by the growth of Machinery & equipement
8.6% 34.0%
China’s construction, transporta- Cans and other packaging
29.5%
10.0%
9.2%
tion and power industries, as well Transportation
18.2% 12.0%
as by growth in the domestic pro- Other
12.0%

duction of consumer products.

Various sources.
• China’s estimated primary alu-
minum consumption in 2001 was
3.6 million tonnes. If secondary America. Confronted with this prob- • Domestic production of manufac-
aluminum is included, estimated lem, Chinese can makers have little tured and semi-manufactured
total consumption reached 5.2 mil- alternative but to import the metal. products also benefits from import
lion tonnes during the same period. This explains why sheet and plate tariffs, as follows. However, these
In 2001, the main end-use markets make up the majority of imported tariffs are being reduced to comply
were building and construction semi-fabricated aluminum products. with WTO requirements:
(32%), transportation (12%),
electrical conductors (12%) and
durable goods (10%). Extrusions IMPORT TARIFFS — FABRICATED PRODUCTS
represented almost 30% of total
consumption, followed by castings 2001 2002 2003 2004
(20%) and sheet & plate (19%). Flat rolled products:
0.2-0.36 mm 12% 6%
• In recent years, annual aluminum can stock 12%
demand growth has been parti- Aluminum cans 34% 30%
cularly robust for the following Aluminum containers 14-15% 12%
products: new homes (31%), air Foil (less than 0.22 mm) 18% 10.8% 8.4% 6%
conditioning units (30%), cars and Aluminum windows/doors 30% 25%
light vehicles (12%), transmission Aluminum fabricated
lines (10%) and refrigerators (5%). (structural) 15% 9.6% 7.8% 6%
Aluminum products
• To satisfy overall demand, China (general purpose) 18% 14% 12% 10%
imports aluminum in the form Various sources.
of remelt ingot, scrap and semi-
fabricated products. The latter are
the largest of the three forms and
China purchases around 350 kt each
year. The poor quality of domestic
metal makes it quite often unsuitable Aluminum Consumption Summary:
for further processing in modern China’s aluminum consumption has been growing at an annual rate of about
high-speed rolling mills. This is 14% since 1997. The higher consumption has been driven mainly by
particularly true for the thin-gauge, growth in the construction (32% of total aluminum use), transportation
can-making equipment China has (12%) and power (12%) sectors. Imports of remelt ingot, scrap and semi-
imported from Europe and North
fabricated products fill the gap between China’s surging demand and its
domestic supply of aluminum.
16

f) Filling the Gap Between net exports of unwrought metal of

Demand and Domestic Supply:
Imports of Aluminum
Monthly data on China’s net imports
of unwrought aluminum (unalloyed
primary plus alloyed metal) and alu-
minum semis have been published
since 1995. The country has been a
net importer of unwrought aluminum
every single year except 1998 (-20 kt).
Net unwrought imports were slightly
below 200 kt in 1995, reached a high
of 705 kt in 2000 and declined last
year to 120 kt. During the first eight
months of 2002, China registered
146 kt. If one looks to net imports
of semis, the flow has remained posi-
tive throughout the period. They
increased continuously between 1995
and 1999-2000, when they stabilized
at around 330 kt before declining
somewhat last year to 269 kt, because
of the economic slowdown. Imports
and exports of aluminum scrap have
also been monitored, but only over
the past two years. Total net imports
of scrap reached almost 800 kt in 2000,
before declining last year to 360 kt.
About one-third of those imports
were comprised of automotive parts.

CHINA UNWROUGHT ALUMINUM NET IMPORTS

100 450
China unwrought aluminum net imports
Alumina prices
80 400
China net unwrought aluminum imports (kt)

60
350

Alumina prices ($/tonne)

40
300
20
250
0

200
-20

-40 150
1996 1997 1998 1999 2000 2001 2002
-60 100
256.7 40.4 (19.9) 327.4 705.0 120.6 (19.5) YTD
Total imports / (exports) (kt)
Source: Reuters, CRU International Ltd.
 17

• How do we account for last year’s - Second, exports of unwrought

decrease in net imports of unwrought metal almost doubled in 2001 (from
metal? The drop may be explained 205 kt to about 400 kt) because alu-
by the following reasons: minum production capacity surged
by about 600 kt during the course
- First of all, 2000 was not a typical
of the year. Also, Chinese smelters
year, since net imports of unwrought
were actively tolling alumina for
metal surged during that period for
aluminum, because the domestic
reasons related to:
alumina price was much higher
- the very high price of alumina
than that for imported alumina.
(which stimulated imports, as illus-
On the other hand, imports of
trated in the graph on page 16);
unwrought metal dropped from
- a reduction of the aluminum
910 kt in 2000 to 520 kt the follow-
import tariff from 12% to 6%
ing year because of a decline in
in order to promote broader trade
metal consumption related to
between Russia and China (this
the global economic slowdown.
triggered the importation of
Aluminum demand increased by
about 600 kt of metal through
17% in 2000 as compared to 1999,
the Russian/Chinese border
to reach 3,400 kt. In 2001, how-
in Northeast China).
ever, demand increased only 7%
- Consequently, unwrought imports
over the previous year, to 3,640 kt.
went from 530 to 910 kt, while
Consequently, net imports dropped
exports remained more or less
from 705 kt to about 120 kt.
unchanged at around 205 kt.

CHINA’S UNWROUGHT ALUMINUM SUPPLY/DEMAND BALANCE*

Year Demand Production Imports Exports Net Imports

1999 2,900 kt 2,620 kt 530 kt 210 kt 320 kt
2000 3,400 kt 2,830 kt 910 kt 205 kt 705 kt
2001 3,640 kt 3,420 kt 520 kt 400 kt 120 kt
* Excluding stock variations.

Imports/Exports Summary:
China has been a net importer of unwrought aluminum every single year
except 1998. Over the past seven years, China’s net imports of unwrought
metal averaged 230 kt. Imports dropped to 120 kt last year, reflecting a
surge in aluminum production capacity, increased tolling activity by Chinese
smelters and a slowdown in metal consumption. For the first eight months
of this year, however, China has been a net exporter of unwrought metal,
with net exports amounting to 146 kt.
18
3 THAT WAS THE PAST.
WHAT ABOUT THE FUTURE?

Utilizing a given set of explicit assumptions about the future, China’s aluminum production is forecast
to exceed demand for the next two to three years, as new capacity is expected to increase at a faster rate
than consumption. By the middle of the decade, however, consumption is expected to exceed production,
turning China once again into a net importer of unwrought metal. What are the assumptions about demand
and supply underlying such a scenario? And under what other set of assumptions might China become a
net exporter of aluminum?

ALUMINUM PRODUCTION/DEMAND

HISTORIC, CURRENT AND PROJECTED PRODUCTION

AND DEMAND — CHINA
7,000
Demand
Supply
6,000

5,000

4,000

3,000

2,000

1,000

('000
tonnes)
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

a) On the demand side, given the
current social/political stability
in China, the growing purchasing
power of its emerging “middle class”
and an expected increase in foreign
direct investment in manufacturing
facilities (tailored for domestic as well
as foreign markets), we assume the
country will continue with its histori-
cal pattern of robust economic growth
in the years ahead. More explicitly:

AVERAGE ANNUAL GROWTH

2002 2003 2004 2005 2006-2020

Real GDP 6.7% 7.4% 7.6% 7.6% 6.7%
Industrial production 8.1% 9.2% 9.0% 8.1% 8.0%
Source: DRI-WEFA, First-Quarter 2002.

China’s aluminum consumption has
increased over the past four years at
an annual rate of 14%. However, given
that its per-capita consumption of alu-
minum slightly exceeds 2 kg (as com-
pared to 35 kg in the U.S.A.), there
is still ample room for further growth.
Looked at from another perspective,
China’s aluminum consumption has
been increasing over the past 10 years
at a rate about 1.5-1.6 times faster
than real GDP. Such “income-elasticity”
is not unlike that experienced by other
less-developed countries at similar
stages in their development. Per-capita
consumption may slightly decline
over time as the economic infrastruc-
ture gets built and the basic needs of
China’s consumers are satisfied. But
the annual growth rate should remain
in the 10-11% range well into the
future. At that rate, China’s annual
aluminum consumption, estimated
at 3,640 kt for 2001, should exceed
5,800 kt by 2006.
As well, we continue to assume that
the government will invest significantly
in developing a west-to-east electricity
transmission network. The construc-
tion of new “high-voltage” power trans-
mission lines will intertwine the six
regional power grids mentioned above.
This should help generate higher
demand for aluminum in the years
to come. Demand from the transport
and construction and building sec-
tors is also expected to continue grow-
ing strongly.
In the former case, China’s automo-
tive industry is theoretically capable
of producing some 2.5 million cars,
trucks and buses each year. But plant
utilization is very low and there are
only a few large-scale producers. China
lists some 120 enterprises capable of
producing complete motor vehicles.
However, many of those have annual
outputs of less than 1,000 units and
only seven are capable of producing
more than 100,000 units per year.
The same drivers that are shifting the
Chinese economy away from heavy
industry are likely to promote the
rationalization of fragmented indus-
tries such as car production. Output
19
is likely to grow at the same time
as small, inefficient producers close
or merge with bigger players. With
improved economies of scale and
stronger demand from increasingly
affluent consumers, more efficient
processes will be adopted. This is
likely to lead to an increase in
demand for aluminum because of
more intensive use of the metal in
each vehicle, reinforced by stronger
demand for automobiles.
In the case of the construction sector,
rising incomes, combined with a
growing population will put pressure
on housing — both in terms of the
size of individual units and the num-
ber of new houses. During the past
two decades, the living space of
the average Chinese household has
increased by a factor of 2.5. Sustained
income growth and increased urban-
ization should support a continuation
of this trend, so the construction
of houses and apartments — along
with the demand for aluminum —
should continue to grow.
20

b) On the supply side, domestic • The large number of small-scale • Because of rich coal deposits and
aluminum production increased smelters operating under local- superior power-generating capaci-
by more than 600 kt/y (or 24%) in government jurisdiction. Due to ties, there is a concentration of alu-
2001 for the reasons outlined above. a lack of competitive advantage, minum smelters in Henan (20%
It should go up by another 24%, or these smelters are constrained to of all smelters), Shandong (7%),
820 kt/y, in 2002, to exceed 4.3 million producing low-value, commodity Shanxi (6%), and in Northwest (30%)
tonnes. And we expect production grade aluminum ingots while facing and Southwest (20%) provinces
will continue to rise after that, but new international competition (see table). As well, a majority of
at a slower pace of 8-9%. The assump- resulting from China’s entry into the planned smelter expansions that
tions behind such a scenario are the WTO. This should limit their have been announced are slated to
the following: potential for growth. take place in more or less the same
provinces. The government of China
has the obligation to guarantee long-
SMELTER LOCATIONS IN CHINA (AT THE END OF 2001)
term supplies of electricity to prop-
Ranking Region Province Smelters Capacity (kmt) Percentage erly approved projects. However,
1 Central China Henan 27 791.00 20.17% neither the National Power Network
2 Northwest Gansu 8 404.00 10.30% nor government-owned power plants
3 Northwest Qinghai 10 310.00 7.90% will guarantee normal supplies of
4 Southwest Guizhou 4 271.00 6.91% electricity to those smelters that do
5 Northwest Ning Xia 2 250.00 6.37% not have central government approval
6 North China Shanxi 11 220.50 5.62% — even those situated in energy-rich
7 Eastern China Shandong 7 278.20 7.09%
areas — should their existing supply
8 Southwest Guangxi 5 202.50 5.16%
sources be unexpectedly interrupted.
This could be the case, for instance,
9 South China Hubei 9 176.00 4.49%
if the government decided, for envi-
10 Southwest Yun Nan 6 165.00 4.21%
ronmental or economic reasons, to
11 Northwest Neimengguo 2 138.00 3.52%
implement its stated policy of closing
12 Northeast Liaoning 3 130.00 3.31%
all power plants with a capacity of
13 Southwest Chongqing 4 94.00 2.40%
less than 50 MW. So the long-term
14 Northeast Jilin 3 103.00 2.63%
15 Southwest Sichun 4 66.00 1.68%
16 Northwest Shaanxi 4 61.00 1.56%
17 South China Hunan 7 50.50 1.29%
18 North China Hebei 4 51.50 1.31%
19 Eastern China Zhejiang 2 37.50 0.96%
20 South China Fujian 1 32.00 0.82%
21 Eastern China Anhui 2 21.00 0.54%
22 South China Jiangxi 2 16.50 0.42%
23 Eastern China Jiangsu 2 12.00 0.31%
24 Northeast Heilongjiang 1 10.00 0.25%
25 Northwest Xin Jiang 3 31.40 0.80%
Total 133.00 3923 100%
Various sources.

availability of power for many of
those announced expansions is far
from guaranteed.
• The availability of alumina may also
limit the continued expansion of
smelting capacity in China. Currently,
China has sufficient alumina capac-
ity to meet about 70% of total domes-
tic demand, relying for the rest on
imports from international markets.
But surplus alumina capacity on these
markets is not unlimited. Moreover,
it is subject to unpredictable price
• The final argument supporting our
swings, as was experienced in 2000,
when alumina prices reached $450/t.
Based on Chalco’s development plan,
domestic production of alumina
should increase by less than 3 million
tonnes between now and 2006. The
increase may be even lower, consid-
ering China’s high production costs
relative to international alumina
producers. There is even a possibil-
ity that China’s existing, higher-cost
refineries may be forced to cease
operation if the current low global
market prices for alumina persist.
The resulting rise in the price of
domestic alumina supplies would
21
serve to further increase the overall concerned parties, Premier Zhu
operating costs of small-scale Chinese Rongji has issued a directive to
smelters that have no access to inter- the Ministers responsible for the
national markets. State Development and Planning
Commission, the State Economic
Moreover, the expansion of Chinese
and Trade Commission, the Ministry
smelter capacity may well trigger
of Environmental Protection and
a global alumina shortage, or at least
the People’s Bank of China, demand-
greatly contribute to a reduction of
ing immediate actions to correct
the current market surplus, thereby
the ongoing expansion situation.
pushing up the market or import
price of alumina, which would serve The following actions were included
to accelerate smelter closures in China. in his directives:
- Enforcing the closure of smelters
hypothesis of a lower growth rate for that do not meet environmental
Chinese smelting capacity relative protection regulatory requirements
to aluminum consumption is more (emission and effluent targets)
political. The State Council has been and/or are operating with unac-
warned about the problems and ceptable economies of scale;
consequences that may result from
the current expansion of aluminum
capacity. Potential problems include
environmental pollution resulting
from smelters operating with 60 KA
cells or lower; the misallocation of
China’s limited energy and capital
resources; lower long-term domestic
prices for aluminum which, just
as is the case with other industries,
may force many small-scale opera-
tors to phase out or cease their oper-
ations. Consequently, at the urging
of Chalco, Minmetals and other
22

- Restricting and returning to The State Economic and Trade there has been a tightening of the
the central government the right Commission has issued an order central government’s alumina-import
to approve all smelter expan- to suspend financing for all ongo- registration policy since May. The
sion projects; ing and planned smelter projects more restrictive policy means that
except for the following, which were only eight companies (Minmetals,
- Holding leaders of state financial
approved by the Central government: Chalco and six smelters) are qualified
institutions (particularly commer-
to import alumina in the conven-
cial banks) liable for providing Fushun Smelter 120 kt Start up in 2002
tional sense (as against tolling).
financial support to unapproved Liacheng Smelter 120 kt Start up in 2003
Smelters that are not allowed to
smelter projects; Boatou Smelter 100 kt Start up in 2002
import alumina directly can still
- Introducing a tax-sharing scheme Qingtongxia purchase from Minmetals. However,
— Phase 2 100 kt Feasibility Study
designed to dampen local govern- under the new legislation, those
Yunnan Smelter 130 kt Completed
ments’ enthusiasm for supporting smelters must now pay Minmetals
Guan Smelter 80 kt Completed
ill-advised expansion projects; and in advance rather than on delivery,
Also, the order clearly stated that which has an adverse impact on
- Finally, reviewing and possibly
approvals for planned expansion proj- their working-capital requirements.
halting previously approved expan-
ects involving the Lanzhou Smelter Thus, it seems that, through the
sion projects if they do not meet
(150 kt) and the Yunnan Smelter control of imported alumina, the
the following assessment criteria:
(150 kt) have been cancelled. Both central government now has a pow-
capacity must be over 100 kt/y;
projects now must undergo reassess- erful tool to achieve its goals vis-à-vis
and the projects must have secured
ment by the Central government the aluminum industry.
reliable and committed (stable)
supplies of power and alumina suf- before proceeding any further.
ficient to support planned produc- Finally, the State Council is consid-
tion capacity. ering options for the closure of
all Soderberg smelters. This would
affect about 1,000 kt of capacity if
all such facilities were to be closed.
It should be noted that about 1,100 kt
of locally approved expansion plans
have been classified as unacceptable,
and that the Central government is
taking action to reassess and halt those
projects that do not measure up. Also,

China’s Demand/Production (2002-2006) Summary:

China’s aluminum consumption should continue to grow during the years ahead at a rate in the 10-11% range. At that
pace, consumption should exceed 5,800 kt by 2006. On the supply side, after increasing by 24% in 2001 and another
24% in 2002, China’s aluminum production should continue to increase but at a slower pace, in the range of 8-9%/y,
given the economic (cost structure, availability of alumina and power) and political factors mentioned above.
Consequently, even should its production exceed demand for the next two or three years, by the middle of the
decade China should once again become a net importer of unwrought metal.
 4 CONCLUDING 23

REMARKS

Given the above assumptions, the possibility of China becoming a long-term net exporter of unwrought
aluminum seems remote.

Nevertheless, one cannot totally rule out the possibility of such a scenario developing under a different set
of assumptions. China could conceivably develop a surplus of metal and thus become a net exporter of
unwrought aluminum in the years ahead if, for instance:

• Chinese domestic aluminum production were to increase by 15-20%

per year. This could occur only if there was unlimited cash for smelter
expansion projects, as well as reliable and unconstrained supplies of
alumina and power — neither of which is likely;

• Or if China were to experience a drastic reduction in domestic

consumption due to social instability or public policy restricting the use
of aluminum. To date though, China’s “socialist capitalism” model has
been able to substantially improve per-capita income, therefore
lessening economic discontent;

• Or, finally, if the LME price climbed high enough to cover domestic
production costs or, even better, exceeded the domestic price. Such a
scenario could result from a devaluation of China’s currency coupled
with a monetary policy designed to limit the ensuing inflation. Again,
the odds against seeing such a policy implemented seem very long,
given that it would set off a series of other devaluations in the region.
24

On balance, this different set of assumptions simply does not jibe with
the facts presented earlier.

Assuming annual growth in aluminum consumption at a rate of 11%,

China would need to develop 450 kt/y of new smelter output just to keep
pace with the expected demand. Much higher output would be needed
to overflow the international aluminum market with its exports and
depress aluminum market prices. China may well increase its production
capacity to keep output in line with forecast consumption, but not
exceed it. China has no economic interests in exporting its scarce
resources (energy, alumina, and capital), or in depressing domestic metal
prices by creating a situation of excess production.

On the other hand, China’s provinces and cities do have a political

interest in tussling with the central government over the right to
continue operating their small-scale, polluting smelters. The latter may
be uneconomic from a profit-maximization point of view, but the
provinces and cities are certainly making money out of them —
particularly if some costs can be shifted to the central authorities or
public utilities. The same caveat applies to WTO implementation. Here it
would also be unwise to assume rapid or uniform implementation.
Nevertheless, in the medium term, “economic rationale” should prevail.

Thus, we believe that China will not be a major destabilizing factor in

the years ahead.

Industry Analysis Department

Alcan Inc.
October 2002
This document represents Alcan’s views as prepared by the Industry Analysis Department of Alcan Inc. and is being distributed for information purposes only.
It incorporates facts, views and opinions deemed relevant, which were obtained from various sources.
Alcan Inc.
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