Power Concerns Hinder Alcan’s Expansion

Article Excerpt

ALCAN INC. $62 (Toronto symbol AL; Conservative Growth Portfolio, Resources sector; Shares outstanding: 370.7 million; Market cap: $23.0 billion; SI Rating: Average) wants to double capacity at its smelter in Iceland, but local residents narrowly voted down the proposal due to environmental concerns. Alcan will probably redesign the project, since Iceland’s glaciers and thermal springs give it access to plenty of cheap electricity, a key requirement in aluminum production. Meanwhile, the British Columbia Supreme Court has ruled that the company is free to sell as much or as little power as it wishes from its power plant next to its smelter in Kitimat, B.C. Regulators had previously blocked Alcan’s plan to fund an upgrade of the Kitimat facility by selling excess electricity. Alcan will probably start work on the project by the end of 2007. Alcan is a buy. buy…