Q & A Alcan's Metal Maven

By Coco Masters

With a 37-year career in the aluminum industry, handling coups and monetary crises, Richard Evans, 59, is no stranger to challenges. After four months as CEO of Montreal-based Alcan--the world's No. 2 aluminum producer and the market leader in such products as balsa wood and Stelvin wine caps--the record-making fly fisherman spoke with TIME's COCO MASTERS about energy efficiency, China and his Audi S8.

In nearly every industry, we see evidence of how doing good is good business. How is Alcan doing good?

Alcan's environmental-health and safety program, EHS First, has resulted in a substantial reduction in injuries and illnesses, and improvements in our environmental footprint. We work with aboriginal peoples to provide training and employment in Australia and Canada and have a U.N.-recognized initiative in Cameroon, where we have reduced the AIDS level in our workforce and further taken the program outside the plants to help the entire community.

What initiative have you just inked in Ghana?

The development of bauxite reserves and a large potential in investment for an alumina refinery. We've also announced sustainability initiatives with local communities as part of the global compact under the U.N. This is a three-year commitment on safe water.

Where else is Alcan expanding?

We have a list of six or seven expansion opportunities. The one in Oman will be finished in early 2008. Oman was chosen because of its abundance of natural gas. We're considering expanding our Iceland plant based on geothermal electricity--very clean, renewable electricity at reasonable cost. That fits into Alcan's philosophy of developing energy resources to support our smelting and is similar to what we've done in Canada, where we own our electric requirements and generate it through hydropower.

Aluminum is energy intensive. How are you improving efficiency?

We have upgraded to AP35 and have AP50 under development. AP originally stood for Aluminum Pechiney, and it is numbered by the amperage of the cells. So AP35 is technology that uses 350,000 amperes. It improves the capital efficiency of the plant and the energy efficiency of using the electricity. Today it's about 95% efficient, whereas when I started 30 years ago, 85% was typical.

How is China's appetite for metal going to affect aluminum supply and prices?

China has built more capacity than they have electricity to support or alumina to feed operations. This has driven up the price of alumina because they're a big importer of alumina. Over the next two to three years, some of that capacity will be activated, but probably not all of it. In the mid- to longer term, China will be in balance. It will not be an exporter and could even go into deficit and be an importer [of aluminum]. That would be good for the world aluminum market. The price of aluminum going forward will be higher than it has been historically.

What should people keep in mind when considering aluminum's use today?

It is one of the most energy-efficient materials for transportation and building. Substituting 1 ton of aluminum for 2 1/2 tons of steel saves 20 tons of CO2 over the life of the vehicle.

You and your wife drive two all-aluminum vehicles?

I drive an Audi S8. She drives a Jaguar XJ8.

So why don't U.S. automakers use more aluminum in their vehicles?

There's more focus on efficiency and performance in Europe. With energy prices back up in the U.S., my guess is that there will be a renewed interest, but they've fallen behind European competitors in the technology to lightweight their vehicles.