Alcan, Alcoa and Government of Guinea Sign Basic Agreement for 1.5 Million Mt Per Year Alumina Refinery in Guinea.

CONAKRY, Guinea -- Alcan Inc. (NYSE:AL)(TSX:AL) and Alcoa World Alumina LLC, a joint venture between Alcoa (NYSE:AA) and Alumina Ltd., with Alcoa holding 60 percent, today announced they signed a Basic Agreement with the Government of Guinea that sets forth the framework for development of a 1.5 million metric tonne per year (mtpy) alumina refinery in Guinea with further expansion potential.

The Basic Agreement, which is a significant milestone, includes the following elements:

--A majority ownership by Alcan and Alcoa World Alumina of at least 80 percent, with an option for the Guinean State to acquire an equity stake;

--Supply of bauxite to the refinery by Compagnie des Bauxites de Guinee (CBG). CBG is a partnership between the Government and Halco Mining, with Halco holding 51 percent. Halco is owned 45 percent each by Alcan and Alcoa World Alumina;

--Access to existing infrastructure;

--While bringing significant revenues to the government of Guinea, tax and customs regime would provide favourable conditions for an investment of this scope;

--Sale of alumina from the refinery to Alcan and Alcoa World Alumina.

Attending the signing ceremony today in Conakry were Cellou Dalein Diallo, Prime Minister of the Republic of Guinea, Ahmed Tidiane Souare, Minister of Mines and Geology, and other members of the Guinean Cabinet; Jacynthe Cote, Senior Vice President, Alcan Inc.; and President and Chief Executive Officer of Alcan Bauxite and Alumina; and Bernt Reitan, Executive Vice President and Group President of Primary Products of Alcoa.

"Given Alcan and Alcoa's 30-year collaborative partnership with the Government of Guinea, their respective strength in technology as well as their operational competency, this project has the greatest ability to deliver real benefits to the country and its people within the announced timeline," said Alcan's Cote. "This signing brings Alcan that much closer to reaching its objective of further integrating Guinea within its global strategy. The project would also strengthen CBG as the primary bauxite supplier to refinery projects in Guinea."

"This is an important day for Guinea. Together, we are taking a significant step forward in helping to provide for better utilization of the country's bauxite resources, generating good jobs, and developing a major facility that will be built and operated according to the most stringent standards in the world," said Alcoa's Reitan. "As a result, this facility could be one of the lowest operating costs of its type anywhere in the world."

Following ratification of the Basic Agreement by the Guinean National Assembly, Alcan and Alcoa would immediately commence detailed feasibility studies, including engineering, financing and legal work, for completion over the ensuing 12 months.

The studies, which could cost approximately US$25 to US$30 million, would provide the necessary information needed to take an investment decision. Following such decision, construction could begin by early 2007 with alumina production by 2009.

Alcan is a multinational, market-driven company and a global leader in aluminum and packaging. With world-class operations in primary aluminum, fabricated aluminum as well as flexible and specialty packaging, aerospace applications, bauxite mining and alumina processing, today's Alcan is well positioned to meet and exceed its customers' needs for innovative solutions and service. Alcan employs almost 70,000 people and has operating facilities in 55 countries and regions.

Alcoa is the world's leading producer and manager of primary aluminum, fabricated aluminum and alumina facilities, and is active in all major aspects of the industry. Alcoa serves the aerospace, automotive, packaging, building and construction, commercial transportation and industrial markets, bringing design, engineering, production and other capabilities of Alcoa's businesses to customers. In addition to aluminum products and components, Alcoa also markets consumer brands including Reynolds Wrap(R) foils and plastic wraps, Alcoa(R) wheels, and Baco(R) household wraps. Among its other businesses are vinyl siding, closures, fastening systems, precision castings, and electrical distribution systems for cars and trucks. The company has 131,000 employees in 43 countries and has been named one of the top three most sustainable corporations in the world at the World Economic Forum in Davos, Switzerland. More information can be found at www.alcoa.com.