Aluminium consumption to bounce back, says Alcan chief

THE chief executive of Rio Tinto's Alcan division says aluminium consumption will return to pre-recession levels within the next three years.

"If there's one sector with enormous growth potential, it's aluminium," Jacynthe Cote said in a speech in Quebec, Canada.

She said Rio Tinto was well positioned to deal with the consequences of the global recession, and the company was confident about the long-term outlook for aluminium demand.

"With the combined impact of urbanisation and industrialisation, aluminium demand will grow in emerging countries in coming years," she said. Demand in industrialised countries should also grow by 2-3 per cent a year, she said.

"We plan to make the most of our numerous competitive advantages to benefit significantly from the renewed growth in aluminium demand."

She said there was reason to be optimistic about the outlook for global growth, but it remained to be seen how much demand would recover in the aluminium industry.

Governments would need to consider a second economic stimulus and carefully assess when to raise interest rates.

"We have to temper our optimism with careful attention. We can see light at the end of the tunnel but we have to make sure it's not a train," she said.

Aluminium prices gained 68 per cent in the past 12 months on the London Metal Exchange.

Alcoa, the largest US aluminium maker, expects demand for the metal to rise 10 per cent this year, led by China.

ADDITIONAL REPORTING: BLOOMBERG