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Quebec Provides $175 Million Grant for Rio Tinto Alcan Aluminum Project.

ENERGY RESOURCE-7 May 2009-Quebec Provides $175 Million Grant for Rio Tinto Alcan Aluminum Project(C)2009 JeraOne - http://www.jeraone.com

The government of Quebec has granted Rio Tinto Alcan $175 million to further the construction of its AP50 pilot plant in the Saguenay-Lac-Saint-Jean region.

The loan, repayable in full by 2012, will provide the AP50 project with crucial funding to continue construction of the pilot plant at an adapted pace, noted Rio Tinto Alcan, "that is suited to the challenges of the current economic situation."

The pilot plant is the first phase of the AP50 project, and will have 44 pots and an initial production of 60,000 tonnes of aluminum, powered exclusively by clean, renewable hydroelectricity. AP50 technology operates at an exceptional 500kA, and focuses on energy efficiency and total cost reduction in the aluminum smelting process.

"This additional financial support from the government of Quebec is greatly appreciated and essential to the AP50 project," said Jacynthe Cote, Chief executive, Rio Tinto Alcan. "We have seen a 60 per cent drop in the price of aluminum, and a similar drop in alumina, since July 2008. This loan allows us to continue developing our proven power-to-product solutions and will help Rio Tinto Alcan maintain its strong position in Quebec for when markets recover."

"This is not only an important project for Rio Tinto Alcan, but an investment in advancing Quebec's position as a global centre of expertise for the aluminum industry," said Jean Simon, President, Primary Metal - North America. "This pilot plant will use the most advanced aluminum smelting technology in the world and will become a platform for future AP technology development."

Rio Tinto Alcan is currently facilitating development of a local network of globally competitive suppliers for the AP50 project through its Regional Industrial Development Office. The Arvida Research and Development Centre will lead ongoing initiatives related to industrialization of AP technology.

Construction of a new 225 megawatt high-efficiency turbine at the Shipshaw power station will continue as scheduled. Complete funding for the US$228 million project was approved by Rio Tinto's Board of Directors last October. The new turbine is expected to replace four hydro generator units at the Chute-a-Caron power station and will thereby promote more efficient water use.

In December 2006, Rio Tinto Alcan unveiled a long-term industrial strategy for the Saguenay-Lac-Saint-Jean region. Support for this program from the government of Quebec includes R&D tax incentives, energy and environmental agreements, and a 30-year loan of $400 million, of which $165 million has been granted.

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Date:May 7, 2009
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