Introduction

At Alcan Primary Metal - British Columbia (APM-BC), we look back at 2005 with particular satisfaction. We went into the year having faced significant challenges across many key parameters, and with a determination to achieve a turnaround. Working within an increasingly integrated and sustainability-driven management system, we believe we achieved precisely that.

As this report details, our efforts to ensure regulatory compliance – and to move even further beyond it in many respects – resulted in the best environmental performance ever achieved in the 51 years of this plant’s operation.

Where safety is concerned, “good enough” can only mean no injuries. We didn’t get there in 2005 but we made meaningful progress. APM-BC recorded its last lost-time injury of the year on October 19, 2005. We had achieved almost 700,000 hours without a lost-time injury by year end and, in May, 2006 hit an all-time record of two million hours.

Conditions in the reservoir supported a high level of power generation at Kemano and that, in turn, supported a high level of production in Kitimat – maintaining our status as the only smelter in the continental Pacific Northwest to be operating at close to full capacity. Market conditions were generally strong, and we believe that recent investments and upgrades have positioned APM-BC well to respond to current demand trends.

For the first time in the operation’s history, we reached a before-deadline agreement with the union on the terms for a new collective agreement. Implementation has proceeded well, along with the continued development of programs aimed at improving the work environment more broadly.

Our support for economic diversification throughout our operating area – including the Kitimat-Terrace region, the watershed region, and within various First Nations communities – was instrumental in reaching a number of important milestones. This has strengthened what were already largely strong community relations.

The combination of all of these achievements positioned APM-BC as a strong candidate for significant new investment. And in August, 2006, Alcan Inc. confirmed its intention to invest US$1.8 billion in the modernization of the Kitimat Works smelter. This is one of the most significant announcements in the history of APM-BC. It is expected to result in a nearly two-thirds increase in production, while securing the sustainability of this operation for decades to come. (See Kitimat Works Modernization.)

Information in this report has been reviewed by management and the relevant functional specialists. Various audit and assurance activities are applied to data upon which this report is based, and it is supported by internal documentation. APM-BC’s management team accepts responsibility for the process of preparing this report and for its contents.

Paul Henning
Director of Operations,
Alcan Primary Metal, British Columbia