Alcan to Decide on China Aluminum Plant By Year's End

Nov. 2 (Bloomberg) -- Alcan Inc., the world's second- largest aluminum producer, may decide to build a plant to make sheet metal in China by the end of the year amid rising demand.

Government officials in southwestern China's Guangxi Zhuang Autonomous Region paid ``great attention'' to the plan, Helen Jiang, director of government affairs at Alcan's Beijing office, said. She didn't say how big the plant may be. Beijing Antaike Information Development Co. said yesterday Alcan wants a joint venture to make 110,000 metric tons of sheet a year.

Demand for aluminum in China, the world's biggest user of the lightweight metal, is expected to double in 15 years. Montreal-based Alcan is expanding into processing as China raises taxes on exports of unprocessed metal and encourages development of plants to make aluminum sheet, which can be used directly by aircraft or automobile makers.

``We'll probably decide where to invest by the end of this year,'' Jiang said today in an interview from Beijing. ``We're also looking at other areas in China's east.''

Soaring demand from China, fueled by 10.4 percent economic growth in the third quarter, helped send aluminum futures prices on the London Metal Exchange up 39 percent in the past year.

Alcan and Qingtongxia Aluminum, China's second-biggest aluminum producer, set up the nation's first primary aluminum joint venture two years ago in western Ningxia Autonomous region. It includes a 150,000-ton smelter and a coal-fired power plant.

Antaike is a research body affiliated with the China Nonferrous Metals Industry Association and advises the government on policies.

Expansion Plans

Aluminum Corp. of China, the nation's biggest aluminum producer, plans to spend as much as 15 billion ($1.9 billion) by 2010 to increase processing capacity to as much as 2 million tons from last year's 820,000 tons, Ding Haiyan, assistant to the company's general manager, said June 12.

Global aluminum demand will rise by 3.6 percent this year driven by growing use of the light metal in planes and car parts, said Helmut Wieser, executive vice president of Alcoa Inc., the world's biggest aluminum producer.