For a complete description of this business group, please refer to the Corporate Sustainability Report 2002 or the Alcan Facts 2003 brochure.

Smelters worldwide: 16
Total primary capacity: 2.4 Mt per year
Countries represented: 7

Pursuit of the Company's governing objective of Maximizing Value remains the top priority in all business groups. For 2002, the Primary Metal group also established a series of strategic recommendations for the treatment of spent potlining, increased efforts related to the preservation of natural habitats, and improved safety practices. The group achieved a 17% improvement in its recordable case rate for injuries and illnesses. By the end of 2002, five out of 27 sites had earned OHSAS 18001 certification.

Maximizing Value: Several initiatives in 2002 marked the Primary Metal Group's progress towards Maximizing Value:

• The Alma smelter in Quebec was officially commissioned and plans were announced to build a $60 million potlining fabrication centre. The smelter is among the most competitive in the world and has significantly reduced greenhouse gas emissions per tonne of aluminum produced, compared to the older technology. The new potlining centre will create up to 200 new jobs.
• The acquisition of a 40% stake in the Alouette smelter significantly increased value-creating synergies within the Quebec smelter system. Plans are to double capacity to 550,000 tonnes, which will add some 340 permanent jobs to the 560 already in place.
• The signing of a CAN$200 million, ten-year outsourcing agreement for Information Technology (IT) will lead to the creation of 60 new jobs in the region and a greater return on Alcan's IT investment.
• A new focus for the Dubuc Works plant will position the Company as a global leader in busbar (power conductor) production and in a new generation of value-added engineered products. Ten new immediate direct jobs will be created and a further 100-150 fabrication-related employment opportunities are projected.
• Several initiatives at the Lynemouth Power Station and smelter in the U.K. resulted in improved energy efficiency, increased electricity production, reduced emissions and improved safety performance.
• A new billet handling/processing facility at the Sebree smelter in the U.S. allows the Company to respond to a growing demand for specialized extrusion alloys for the automotive, construction and manufacturing industries.
• In Brazil, concessions were acquired to build two hydroelectric power stations. Upon completion, Alcan will produce approximately 60% of the power needed for our smelters in the region.

Environment, Health and Safety: As in all business groups, Environment, Health and Safety (EHS) is a constant business priority in the Primary Metal group with improvement in all three areas being a continuous goal. Certification of the Alma smelter to ISO 14001 in 2002 completed the group's objective to have registered environmental management systems in all facilities.

In British Columbia, a new agreement was reached with the native Haisla band council to reduce PAH emissions. The group also received a Habitat Stewardship and Conservation Award from the Government of Canada, Department of Fisheries and Oceans, for the protective management of potential flow problems on the Kemano River.

In Quebec, an agreement was signed with the provincial government to reduce greenhouse gas emissions (GHG) by an average of 285,000 tonnes from 1995 levels before the end of 2003. This agreement is in line with the Company's TARGET program. A study on exposure to Beryllium in the smelters showed generally very low levels of the metal, well below recommended maximum exposure limits. A small proportion of employees were found to have higher than recommended exposures and have undergone tests to ensure that no health effects have occurred. While not yet completed on all employees concerned, the tests have detected no health problems to date.

Plant safety milestones were achieved at Gande-Baie (Quebec) – two million hours without a lost-time accident and at the Lochaber smelter (U.K.) – one million hours without a lost-time accident. The Aratu smelter in Brazil won the World Safety Award from the International Aluminium Institute.

Stakeholder engagement: Community efforts continue in all group locations. For example, in Kinlochleven, Scotland, remediation of the old smelter site is now completed including closure of the spent potlining landfill site. The first phase of the Alcan-funded woodland regeneration scheme also got under way in 2002.

As part of the Kinlochleven Land Development Trust (established as Alcan handed back land to the community for other types of development), projects such as the proposed microbrewery operation have come to fruition as well as a community recreation/sports centre built on Alcan-donated land. Broader community benefits include community independence and reduced unemployment for the area to 4%, compared with 12% unemployment during the last few years of smelter operations.

See Practical Examples for details on select Primary Metal achievements in 2002.