**FORM 10-Q**

**For the quarterly period ended March 31, 2007**

**ALCAN INC.**

|  **CANADA**                |  				Inapplicable               |
|---------------------------------|--------------------------------------|
| (State or Other Jurisdiction of | (I.R.S. Employer Identification No.) |
| Incorporation or Organization)  |                                 |

**1188 Sherbrooke Street West, Montreal, Quebec, Canada H3A 3G2**

**(514) 848-8000**

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**PART I.           FINANCIAL INFORMATION**

**Item 1.**
**Financial	Statements**

**ALCAN INC.**

**INTERIM CONSOLIDATED STATEMENT OF INCOME **

|                                                                     |   |   |            |   |   |
|--------------------------------------------------------------------------|--------|--------|-----------------|--------|--------|
|  **Three months ended March 31**                                    |   |   | **2007**        |   |   |  				2006 |   |
| (*in millions of US$, except per share amounts)*                         |   |   |            |   |   |   |   |
| **Sales and operating revenues**                                         |   |   |  **6,420** |   |   |  				5,550 |   |
|                                                                     |   |   |            |   |   |   |   |
| **Costs and expenses**                                                   |   |   |            |   |   |   |   |
| Cost of sales and operating expenses, excluding depreciation and         |   |   |            |   |   |   |   |
|         amortization noted below      |   |   | **4,801**       |   |   | 4,128 |   |
| Depreciation and amortization                                            |   |   | **264**         |   |   | 251 |   |
| Selling, administrative and general expenses                             |   |   | **374**         |   |   | 364 |   |
| Research and development expenses                                        |   |   | **54**          |   |   | 52 |   |
| Interest                                                                 |   |   | **60**          |   |   | 76 |   |
| Restructuring charges - net (note 6)                                     |   |   | **12**          |   |   | 14 |   |
| Other income - net (note 10)                                             |   |   | **(3**          | **)**  |   | (31 | ) |
|                                                                     |   |   | **5,562**       |   |   | 4,854 |   |
| Income from continuing operations before income taxes and other				items |   |   | **858**         |   |   | 696 |   |
| Income taxes (note 9)                                                    |   |   | **280**         |   |   | 269 |   |
| Income from continuing operations before other items                     |   |   | **578**         |   |   | 427 |   |
| Equity income                                                            |   |   | **12**          |   |   | 28 |   |
| Minority interests                                                       |   |   | **-**           |   |   | (1 | ) |
| **Income from continuing operations**                                    |   |   | **590**         |   |   | 454 |   |
| Income from discontinued operations                                      |   |   | **1**           |   |   | 3 |   |
| **Income before cumulative effect of accounting change**                 |   |   | **591**         |   |   | 457 |   |
| Cumulative effect of accounting change, net of income                    |   |   |            |   |   |   |   |
|         taxes of $2 in 2006           |   |   | **-**           |   |   | (4 | ) |
| **Net income**                                                           |   |   | **591**         |   |   | 453 |   |
| Dividends on preference shares                                           |   |   | **3**           |   |   | 2 |   |
| **Net income attributable to common shareholders**                       |   |   | **588**         |   |   | 451 |   |
| **Earnings (Loss) per share**(note 5)                                    |   |   |            |   |   |   |   |
| Basic:                                                                   |   |   |            |   |   |   |   |
| Income from continuing operations                                        |   |   | **1.60**        |   |   | 1.21 |   |
| Income from discontinued operations                                      |   |   | **-**           |   |   | 0.01 |   |
| Cumulative effect of accounting change                                   |   |   | **-**           |   |   | (0.01 | ) |
| **Net income per common share - basic**                                  |   |   | **1.60**        |   |   | 1.21 |   |
| Diluted:                                                                 |   |   |            |   |   |   |   |
| Income from continuing operations                                        |   |   | **1.59**        |   |   | 1.20 |   |
| Income from discontinued operations                                      |   |   | **-**           |   |   | 0.01 |   |
| Cumulative effect of accounting change                                   |   |   | **-**           |   |   | (0.01 | ) |
| **Net income per common share - diluted**                                |   |   | **1.59**        |   |   | 1.20 |   |
| **Dividends per common share**                                           |   |   | **0.20**        |   |   | 0.15 |   |

*The accompanying notes are an integral part of the interim consolidated	financial statements.*

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**ALCAN INC.**

**INTERIM CONSOLIDATED BALANCE SHEET **

|                                                                                      |   |               |       |              |   |
|-------------------------------------------------------------------------------------------|--------|--------------------|------------|-------------------|--------|
|                                                                                      |   | **March 31, 2007** |       | December 31, 2006 |   |
| (*in millions of US$)*                                                                    |   |               |       |              |   |
|                                                                                      |   |               |       |              |   |
| **ASSETS**                                                                                |   |               |       |              |   |
|                                                                                      |   |               |       |              |   |
| **Current assets**                                                                        |   |               |       |              |   |
| Cash and time deposits                                                                    |   |               | **186**    |              |   | 229 |   |
| Trade receivables (net of allowances of $67 in 2007 and $58 in				2006)                   |   |               | **3,106**  |              |   | 2,910 |   |
| Other receivables and deferred charges                                                    |   |               | **1,171**  |              |   | 1,195 |   |
| Deferred income taxes                                                                     |   |               | **139**    |              |   | 152 |   |
| Inventories (note 11)                                                                     |   |               | **3,228**  |              |   | 3,186 |   |
| Current assets held for sale                                                              |   |               | **4**      |              |   | 5 |   |
| **Total current assets**                                                                  |   |               | **7,834**  |              |   | 7,677 |   |
|                                                                                      |   |               |       |              |   |   |   |
| Deferred charges and other assets                                                         |   |               | **1,070**  |              |   | 1,087 |   |
| Investments                                                                               |   |               | **1,476**  |              |   | 1,509 |   |
| Deferred income taxes                                                                     |   |               | **911**    |              |   | 989 |   |
| Property, plant and equipment                                                             |   |               |       |              |   |   |   |
|         Cost (excluding construction work in progress) |   |               | **18,942** |              |   | 18,698 |   |
|         Construction work in progress                  |   |               | **2,447**  |              |   | 2,294 |   |
|         Accumulated depreciation                       |   |               | (8,800     | )                 |   | (8,592 | ) |
|                                                                                      |   |               | **12,589** |              |   | 12,400 |   |
| Intangible assets, net of accumulated amortization of $370 in				2007                     |   |               |       |              |   |   |   |
|         and $346 in 2006                               |   |               | **655**    |              |   | 676 |   |
| Goodwill                                                                                  |   |               | **4,597**  |              |   | 4,599 |   |
| Long-term assets held for sale                                                            |   |               | **1**      |              |   | 2 |   |
| **Total assets**                                                                          |   |               | **29,133** |              |   | 28,939 |   |
|                                                                                      |   |               |       |              |   |   |   |
|                                                                                      |   |               |       |              |   |   |   |

*The accompanying notes are an integral part of the interim consolidated	financial statements.*

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**ALCAN INC.**

**INTERIM CONSOLIDATED BALANCE SHEET **
** **
** **

|                                                                                      |   |               |       |              |   |
|-------------------------------------------------------------------------------------------|--------|--------------------|------------|-------------------|--------|
|                                                                                      |   | **March 31, 2007** |       | December 31, 2006 |   |
| (*in millions of US$)*                                                                    |   |               |       |              |   |
|                                                                                      |   |               |       |              |   |
| **LIABILITIES AND SHAREHOLDERS' EQUITY**                                                  |   |               |       |              |   |
|                                                                                      |   |               |       |              |   |
| **Current liabilities**                                                                   |   |               |       |              |   |
| Payables and accrued liabilities                                                          |   |               | **5,335**  |              |   | 5,430 |   |
| Short-term borrowings                                                                     |   |               | **579**    |              |   | 467 |   |
| Debt maturing within one year                                                             |   |               | **32**     |              |   | 36 |   |
| Deferred income taxes                                                                     |   |               | **35**     |              |   | 46 |   |
| **Total current liabilities**                                                             |   |               | **5,981**  |              |   | 5,979 |   |
|                                                                                      |   |               |       |              |   |   |   |
| Debt not maturing within one year                                                         |   |               | **5,169**  |              |   | 5,476 |   |
| Deferred credits and other liabilities                                                    |   |               | **1,681**  |              |   | 1,787 |   |
| Post-retirement benefits                                                                  |   |               | **3,363**  |              |   | 3,381 |   |
| Deferred income taxes                                                                     |   |               | **1,143**  |              |   | 1,151 |   |
| Minority interests                                                                        |   |               | **71**     |              |   | 71 |   |
|                                                                                      |   |               |       |              |   |   |   |
| **Shareholders' equity**                                                                  |   |               |       |              |   |   |   |
| Redeemable non-retractable preference shares                                              |   |               | **160**    |              |   | 160 |   |
| Common shareholders' equity                                                               |   |               |       |              |   |   |   |
|         Common shares                                  |   |               | **6,275**  |              |   | 6,235 |   |
|         Additional paid-in capital                     |   |               | **664**    |              |   | 672 |   |
|         Retained earnings                              |   |               | **4,772**  |              |   | 4,281 |   |
|         Common shares held by a subsidiary             |   |               | (31        | )                 |   | (31 | ) |
|         Accumulated other comprehensive loss (note 14) |   |               | (115       | )                 |   | (223 | ) |
|                                                                                      |   |               | **11,565** |              |   | 10,934 |   |
|                                                                                      |   |               | **11,725** |              |   | 11,094 |   |
|                                                                                      |   |               |       |              |   |   |   |
| Commitments and contingencies (note 13)                                                   |   |               |       |              |   |   |   |
|                                                                                      |   |               |       |              |   |   |   |
| **Total liabilities and shareholders' equity**                                            |   |               | **29,133** |              |   | 28,939 |   |
|                                                                                      |   |               |       |              |   |   |   |

*The accompanying notes are an integral part of the interim consolidated	financial statements.*

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**ALCAN INC.**

**INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS **

|                                                                                                                                                                     |   |     |     |   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|----------|--------|--------|
| **Three months ended March 31**                                                                                                                                          |   | **2007** |     | 2006   |   |
| (*in millions of US$)*                                                                                                                                                   |   |     |     |   |   |
|                                                                                                                                                                     |   |     |     |   |   |
| **OPERATING ACTIVITIES**                                                                                                                                                 |   |     |     |   |   |
|                                                                                                                                                                     |   |     |     |   |   |
| Income from continuing operations                                                                                                                                        |   |     | **590**  |   |   | 454 |   |
| Adjustments to determine cash from operating activities:                                                                                                                 |   |     |     |   |   |   |   |
|         Depreciation and amortization                                                                                                 |   |     | **264**  |   |   | 251 |   |
|         Deferred income taxes                                                                                                         |   |     | **67**   |   |   | 144 |   |
|         Equity loss (income), net of dividends                                                                                        |   |     | **8**    |   |   | (16 | ) |
|         Asset impairment charges                                                                                                      |   |     | **1**    |   |   | 9 |   |
|         Gain on disposal of businesses and investments - net                                                                          |   |     | **(4**   | **)**  |   | - |   |
|         Stock option expense                                                                                                          |   |     | **2**    |   |   | 25 |   |
|         Change in operating working capital                                                                                           |   |     |     |   |   |   |   |
|                Change in receivables                                                               |   |     | **(165** | **)**  |   | (539 | ) |
|                Change in inventories                                                               |   |     | **(27**  | **)**  |   | (78 | ) |
|                Change in payables and accrued liabilities                                          |   |     | **(141** | **)**  |   | 20 |   |
|         Change in deferred charges, other assets, deferred				credits and                                                             |   |     |     |   |   |   |   |
|                other liabilities, and post-retirement benefits -				net                            |   |     | **(7**   | **)**  |   | 92 |   |
|         Other - net                                                                                                                   |   |     | **(6**   | **)**  |   | - |   |
| **Cash from operating activities**                                                                                                                                  |   |     | **582**  |   |   | 362 |   |
|                                                                                                                                                                     |   |     |     |   |   |   |   |
| **FINANCING ACTIVITIES**                                                                                                                                                 |   |     |     |   |   |   |   |
|                                                                                                                                                                     |   |     |     |   |   |   |   |
| Proceeds from issuance of new debt - net of issuance costs                                                                                                               |   |     | **13**   |   |   | 17 |   |
| Debt repayments                                                                                                                                                          |   |     | **(344** | **)**  |   | (66 | ) |
| Short-term borrowings - net                                                                                                                                              |   |     | **108**  |   |   | (36 | ) |
| Common shares issued                                                                                                                                                     |   |     | **28**   |   |   | 66 |   |
| Dividends      -				Alcan shareholders (including preference)                                                                                   |   |     | **(75**  | **)**  |   | (57 | ) |
|                         - 				Minority interests |   |     | **-**    |   |   | (1 | ) |
| **Cash used for financing activities**                                                                                                                                   |   |     | **(270** | **)**  |   | (77 | ) |
|                                                                                                                                                                     |   |     |     |   |   |   |   |

*The accompanying notes are an integral part of the interim consolidated	financial statements.*

----

**ALCAN INC.**

**INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS **
** **

|                                                                       |   |     |     |   |   |
|----------------------------------------------------------------------------|--------|----------|----------|--------|--------|
| **Three months ended March 31**                                            |   | **2007** |     | 2006   |   |
| (*in millions of US$)*                                                     |   |     |     |   |   |
|                                                                       |   |     |     |   |   |
| **INVESTMENT ACTIVITIES**                                                  |   |     |     |   |   |
|                                                                       |   |     |     |   |   |
| Purchase of property, plant and equipment                                  |   |     | **(312** | **)**  |   | (426 | ) |
| Business acquisitions and purchase of investments, net of cash				and time |   |     |     |   |   |   |   |
|           deposits acquired   |   |     | **(2**   | **)**  |   | (38 | ) |
| Net proceeds from disposal of businesses, investments and other				assets  |   |     | **7**    |   |   | 198 |   |
| Other                                                                      |   |     | **(49**  | **)**  |   | - |   |
| **Cash used for investment activities**                               |   |     | **(356** | **)**  |   | (266 | ) |
|                                                                       |   |     |     |   |   |   |   |
| Effect of exchange rate changes on cash and time deposits                  |   |     | **1**    |   |   | 3 |   |
| **(Decrease) Increase in cash and time deposits**                          |   |     | **(43**  | **)**  |   | 22 |   |
|                                                                       |   |     |     |   |   |   |   |
| Cash and time deposits - beginning of period                               |   |     | **229**  |   |   | 181 |   |
| Cash and time deposits - end of period                                     |   |     | **186**  |   |   | 203 |   |
|                                                                       |   |     |     |   |   |   |   |

*The accompanying notes are an integral part of the interim consolidated	financial statements.*

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**ALCAN INC.**

**NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS**

**March 31, 2007**

**(unaudited)**

*(in millions of US$, except per share amounts)*

**1.         		ACCOUNTING POLICIES**

**2.          ACCOUNTING CHANGES**

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**3.          RECENTLY ISSUED ACCOUNTING STANDARDS **

**4.          CHANGE IN FUNCTIONAL CURRENCY OF THE EUROPEAN PRIMARY	METAL GROUP**

**5.          EARNINGS PER SHARE **
** BASIC AND DILUTED**

| *Three months ended March 31*                                      |   | **2007** |     | 2006   |   |
|--------------------------------------------------------------------|--------|----------|----------|--------|--------|
| **Numerator:**                                                     |   |     |     |   |   |
| Income from continuing operations                                  |   |     | **590**  |   |   | 454 |   |
| Less: dividends on preference shares                               |   |     | **(3**   | **)**  |   | (2 | ) |
| Income from continuing operations attributable to                  |   |     |     |   |   |   |   |
|         common shareholders     |   |     | **587**  |   |   | 452 |   |
| **Denominator** **(number of common shares in				millions):** |   |     |     |   |   |   |   |
| Weighted average of outstanding shares                             |   |     | **367**  |   |   | 373 |   |
| Effect of dilutive stock options                                   |   |     | **2**    |   |   | 2 |   |
| Adjusted weighted average of outstanding shares                    |   |     | **369**  |   |   | 375 |   |
| **Earnings per common share - basic**                              |   |     | **1.60** |   |   | 1.21 |   |
| **Earnings per common share - diluted**                            |   |     | **1.59** |   |   | 1.20 |   |

In the first quarter of 2007, there were no options to purchase common	shares (in 2006, 1,062,853 options at a weighted average grant price of	CAN$53.67 per share were outstanding) that were outstanding during the	period and that were not included in the computation of diluted earnings per	share because the options' exercise price was greater than the average price	of the common shares. 	As at March 31, 2007, there were 367,565,058 (2006: 373,825,399) common	shares outstanding.   8  **6.          RESTRUCTURING PROGRAMS** **Q1 2007 Restructuring Activities** 	The schedule provided below shows details of the charges by operating	segment: **Charges recorded in the statement of income** 				 *Three months ended March 31, 2007* **Severance Costs**			 **Asset Impairment Charges**			 **Other**			 **Total**			 **Bauxite and Alumina** 			 **1**			 			 **-**			 			 **-**			 			 **1**			 **Primary Metal** 			 **7**			 			 **-**			 			 **-**			 			 **7**			 **Engineered Products** 			 **-**			 			 **-**			 			 **1**			 			 **1**			 **Packaging** 			 **2**			 			 **1**			 			 **-**			 			 **3**			 **Total** 			 **10**			 			 **1**			 			 **1**			 			 **12**			  	For the quarter ended March 31, 2007, $2 (2006: $11) of the restructuring	charges above are excluded from the measurement of the profitability of the	Company's operating segments (Business Group Profit), as they relate to	corporate initiatives as discussed in note 7 - Information by Operating	Segment. 	The components of the 2007 restructuring charges were as follows: Bauxite and Alumina 	The Company announced in 2005 that its subsidiary, Société Générale de	Recherches et d'Exploitations Minières (Sogerem), had begun an information	and consultation process with its employee representatives and local	partners due to the exhaustion of mining resources in the Tarn region of	France. Production at its fluorspar mining operations came to a close during	the first half of 2006. The consultation process is now ended. In the first	quarter of 2007, the Company recorded additional 	severance costs	of $1. No further charges are expected to be	incurred. Primary Metal 	The Company announced in 2006 that it had begun consultations with unions	and employee representatives for a proposed sale of selected assets at the	Company's Affimet aluminum recycling plant in Compiègne (France). The	consultation process is now ended. In the first quarter of 2007, the Company	recorded additional severance costs of $5. The divestiture is expected to be	completed in the second quarter of 2007. No further charges are expected to	be incurred as a result of this activity. ** ** 	In 2005, the Company recorded restructuring charges related to the closure	of its aluminum smelter in Lannemezan (France). The closure process for	Lannemezan began in June 2006 and is expected to be completed, at the	latest, during the course of 2008. In the first quarter of 2007, the Company	recorded additional severance costs of $1. The Company expects to incur an	additional $8 of restructuring charges related to the closure of the smelter. 	The Company recorded additional 	severance costs	of $1 for other minor restructuring programs pursued in the first	quarter of 2007 in this operating segment.	 Engineered Products 	The Company announced in 2006 that it had begun consultations with unions	and employee representatives for a proposed closure of the Workington hard	alloy extrusion plant. Production from Workington will be consolidated at	Alcan's facilities in Issoire and Montreuil-Juigné (France). In the first	quarter of 2007, the Company recorded additional other restructuring charges	of $1. Workington is expected to cease production in the second quarter of 2007. The Company expects to incur additional charges of $4 in 2007 related to this	activity.    9  **6.          RESTRUCTURING PROGRAMS**(cont'd) Packaging 	The Company launched in 2006 a restructuring program in the Global Beauty	Packaging sector aimed at streamlining processes and reaching an improved	competitive position. In the first quarter of 2007, the Company recorded	restructuring charges of $2 mainly associated with severance costs. The	Company expects to incur additional charges of $8 related to this activity.	 	The Company announced in 2005 the restructuring of certain businesses,	notably Global Beauty Packaging and Food Packaging Europe, as part of the	continuing drive to reshape its portfolio, counter increasing competitive	pressures in Western countries and improve margins. In the first quarter of	2007, the Company recorded additional restructuring charges of $1 for asset	impairment charges. The Company expects to incur additional charges of $6 in	2007 related to this activity.  **2006 Restructuring Activities** 	The significant components of the first quarter of 2006 restructuring charges were as	follows: Bauxite and Alumina 	In relation to the proposed closure of mining operations in the Tarn region	of France announced in 2005 by Sogerem, the Company incurred additional	other restructuring charges of $2. Refer to the components of the 2007	restructuring charges discussed above for more details in relation to this	activity. Packaging 	In relation to pursuing plans to restructure certain businesses announced in	2005, notably Global Beauty Packaging and Food Packaging Europe, the Company	incurred an additional $9 of restructuring charges. This charge was	comprised of severance costs of $2, asset impairment charges of $5 and other	charges of $2. Refer to the components of the 2007 restructuring charges	discussed above for more details in relation to this activity. Other  	Other minor restructuring charges were incurred in the first quarter of 2006	for which the Company recorded severance costs of $2 and additional other	restructuring charges of $1. 	The schedule provided below shows details of the provision balances and	related cash payments for the significant restructuring activities: **Provision roll-forward**			  			 **Severance Costs**			 			 **Asset Impairment Charges***				 				 **Other**				 				 **Total**			 				Provision balance as at December 31, 2005 			 				243			 			 				-			 			 				57			 			 				300			 			  			 			 			 			 			 			 			 			 			 			 			 			 **2006** 			 			 			 			 			 			 			 			 			 			 			 			 				Charges recorded in the statement of income 			 				101			 			 				44			 			 				34			 			 				179			 				Cash payments - net 			 				(160				)			 				-			 			 				(39				)			 				(199				)				Non-cash items 			 				15			 			 				(44				)			 				9			 			 				(20				)				Provision balance as at December 31, 2006 			 				199			 			 				-			 			 				61			 			 				260			 			  			 			 			 			 			 			 			 			 			 			 			 			 **Q1 2007** 			 			 			 			 			 			 			 			 			 			 			 			 **Charges recorded in the statement of income** 			 **10**			 			 **1**			 			 **1**			 			 **12**			 **Cash payments**- **net** 			 **(48****)**			 **-**			 			 **(5****)**			 **(53****)****Non-cash items** 			 **2**			 			 **(1****)**			 **-**			 			 **1**			 **Provision balance as at March 31, 2007** 			 **163**			 			 **-**			 			 **57**			 			 **220**			  	* Fair value of assets was determined using discounted future cash flows.   10  **7.          INFORMATION BY OPERATING SEGMENT**The following presents selected information by operating segment, viewed on	a stand-alone basis. The operating management structure is comprised of four	operating segments or business groups: Bauxite and Alumina; Primary Metal;	Engineered Products and Packaging. The Company's measure of the	profitability of its operating segments is referred to as business group	profit (BGP). BGP comprises earnings before interest, income taxes, minority	interests, depreciation and amortization and excludes certain items, such as	corporate costs, restructuring costs (relating to major corporate-wide	acquisitions or initiatives), impairment and other special charges, pension	actuarial gains, losses and other adjustments, and unrealized gains and	losses on derivatives that are not under the control of the business groups	or are not considered in the measurement of their profitability. These items	are generally managed by the Company's corporate head office, which focuses	on strategy development and oversees governance, policy, legal, compliance,	human resources and finance matters. The unrealized change in fair market	value of derivatives is removed from individual BGP and is shown on a	separate line in the reconciliation to income from continuing operations.	This presentation provides a more accurate portrayal of underlying business	group results and is in line with the Company's portfolio approach to risk	management. Transactions between operating segments are conducted on an	arm's-length basis and reflect market prices. Thus, earnings from the	Bauxite and Alumina as well as from the Primary Metal groups represent	mainly profit on alumina or metal produced by the Company, whether sold to	third parties or used in the Company's fabricating and packaging operations.	Earnings from the Engineered Products and Packaging groups represent only	the fabricating profit on their respective products.  	The accounting principles used to prepare the information by operating	segment are the same as those used to prepare the consolidated financial	statements of the Company, except for the following two items: 	 		(1)  			The operating segments include the Company's proportionate share of			joint ventures (including joint ventures accounted for using the			equity method) and certain other equity-accounted investments as			they are managed within each operating segment, with the adjustments			for these investments shown on a separate line in the reconciliation			to Income from continuing operations; and	 		(2)  			Pension costs for the operating segments are based on the normal			current service cost with all actuarial gains, losses and other			adjustments being included in Intersegment and other.	 	The operating segments are described below. Bauxite and Alumina 	Headquartered in Montreal (Canada), this business group comprises Alcan's	worldwide activities related to bauxite mining and refining into	smelter-grade and specialty aluminas, owning, operating or having interests	in six bauxite mines and deposits in five countries, five smelter-grade	alumina plants in four countries and six specialty alumina plants in three	countries and providing engineering and technology services. Primary Metal 	Also headquartered in Montreal, this business group comprises smelting	operations, power generation, production of primary value-added ingot,	manufacturing of smelter anodes, smelter cathode blocks and aluminum	fluoride, smelter technology and equipment sales, engineering services and	trading operations for aluminum, operating or having interests in 22	smelters in 11 countries, 12 power facilities in four countries and 12	technology and equipment sales centers and engineering operations in ten	countries. Engineered Products 	Headquartered in Paris (France), this business group produces engineered and	fabricated aluminum products including rolled, extruded and cast aluminum	products, engineered shaped products and structures, including cable, wire,	rod, as well as composite materials such as aluminum-plastic, fibre	reinforced plastic and foam-plastic in 55 plants located in 12 countries.	Also included in this business group are 33 service centres in 11 countries	and 33 sales offices in 28 countries and regions.   11  **7.          INFORMATION BY OPERATING SEGMENT**(cont'd) Packaging 	Also headquartered in Paris, this business group consists of the Company's	worldwide food, pharmaceutical and medical, beauty and personal care and	tobacco packaging businesses, operating 129 plants in 31 countries. This	business group produces packaging from a number of different materials,	including plastic, aluminum, paper, paper board and glass. Intersegment and other 	This classification includes the deferral or realization of profits on	intersegment sales of aluminum and alumina, corporate office costs as well	as other non-operating items. 			  				Intersegment			 				Third Parties 			 *Three months ended March 31* **2007**				 				2006				 **2007**				 				2006			 **Sales and operating revenues** 			 			 			 			 			 			 			 			 				Bauxite and Alumina 			 **576**			 			 				470			 			 **472**			 			 				313			 				Primary Metal 			 **551**			 			 				571			 			 **2,345**			 			 				2,011			 				Engineered Products 			 **25**			 			 				44			 			 **2,068**			 			 				1,679			 				Packaging 			 **1**			 			 				-			 			 **1,535**			 			 				1,501			 				Adjustments for equity-accounted joint ventures and  			 			 			 			 			 			 			 			 			 			 			 			 				        certain investments 			 **-**			 			 				-			 			 **(17****)**			 				36			 				Other 			 **(1,153****)**			 				(1,085				)			 **17**			 			 				10			   			 				-			 			 				-			 			 **6,420**			 			 				5,550			   *Three months ended March 31* **2007**			 				2006			 **Business Group Profit (BGP)** 			 			 			 			 				Bauxite and Alumina 			 **175**			 			 				129			 				Primary Metal 			 **844**			 			 				758			 				Engineered Products 			 **174**			 			 				154			 				Packaging 			 **140**			 			 				146			 				Adjustments for equity-accounted joint ventures and  			 			 			 			 			 			 				        certain investments 			 **(47****)**			 				(71				)				Adjustments for mark-to-market of derivatives 			 **(15****)**			 				14			 				Depreciation and amortization 			 **(264****)**			 				(251				)				Intersegment, corporate offices and other 			 **(89****)**			 				(107				)				Equity income 			 **12**			 			 				28			 				Interest 			 **(60****)**			 				(76				)				Income taxes 			 **(280****)**			 				(269				)				Minority interests 			 **-**			 			 				(1				)**Income from continuing operations** 			 **590**			 			 				454			  Risk Concentration 	The Company's consolidated sales and operating revenues for the three months	ended March 31, 2007 include $676 (2006: $623) arising from transactions	with one customer. These sales and operating revenues, principally made by	the Primary Metal Group, represent 11% (2006: 11%) of consolidated sales and	operating revenues for the three months ended March 31, 2007.   12  **8.          STOCK OPTIONS AND OTHER STOCK-BASED COMPENSATION** Total Stock-Based Compensation Cost 	Total pre-tax stock based compensation expense is $17 for the first quarter	ended March 31, 2007 (2006: $39). The amount includes other stock-based	compensation expense of $15 for the first quarter ended March 31, 2007	(2006: $14) and stock option expense of $2 for the first quarter ended March	31, 2007 (2006: $25). Total pre-tax stock based compensation expense for the	first quarter ended March 31, 2007 includes $2 of compensation expense	related to retired and retirement eligible employees (2006: $11).  **9.          INCOME TAXES** 				 *Three months ended March 31* 				 **2007**			 				 				2006			 				Current 			 **213**			 			 				125			 				Deferred 			 **67**			 			 				144			 			  			 **280**			 			 				269			 	 	The composite of the applicable statutory corporate income tax rates in	Canada is 33% (2006: 33%).  	As a result of the implementation of FIN 48, the amount of unrecognized tax	benefits at January 1, 2007 is $193 of which $84 would impact the Company's	effective tax rate, if recognized. Also included in the amount of	unrecognized tax benefits is $44 that, if recognized, would be allocated to	reduce goodwill and $44 for which the Company would obtain an offset in	other taxing jurisdictions. There were no material changes in the amounts	above during the quarter ended March 31, 2007. 	It is expected that the amount of unrecognized tax benefits will change in	the next 12 months, however we do not expect the change to have a	significant impact on the results of operations or the financial position of	the Company. 	The Company recognizes accrued interest and penalties related to	unrecognized tax benefits as part of the income tax provision. As of January	1, 2007, the Company had recorded a net liability of $10 for interest and	penalties. 	Canadian federal income tax returns are closed through 2001 (except for	potential transfer pricing adjustments) and Canadian provincial income tax	returns are closed through 1995. The process to obtain corollary adjustments	with the US competent authority for the 1996-1999 transfer pricing	adjustments to income is underway. The Canadian federal statute of	limitations remains open for the year 2002 and onward with years 2002 and	2003 currently under examination by the Canada Revenue Agency. Foreign	jurisdictions have statutes of limitations generally ranging from 2 to 5	years. Years still open to examination by foreign tax authorities in major	jurisdictions include US (2004 onward), Germany (2001 onward), UK (2004	onward), Switzerland (2004 onward), Australia (2002 onward) and France (1989	onward).   13  **10.          OTHER INCOME - NET** *Three months ended March 31* **2007**			 				2006			 				Asset impairment charges not included in restructuring programs 			 **-**			 			 				4			 				Gain on disposal of businesses and investments - net 			 **(4****)**			 				-			 				Recoveries of legal claims 			 **-**			 			 				(62				)				Environmental provisions 			 **-**			 			 				2			 				Interest revenue 			 **(10****)**			 				(8				)				Exchange losses - net 			 **17**			 			 				18			 				Derivative (gains) losses - net 			 **(16****)**			 				2			 				Other 			 **10**			 			 				13			 			  			 **(3****)**			 				(31				)	 	On January 19, 2006, the Company sold claims related to the Enron bankruptcy	to a** **financial institution for combined proceeds of $62,	recorded in Recoveries of legal claims.  **11.          INVENTORIES** 			  **March 31, 2007**			 				December 31, 2006			 				 **Aluminum operating segments** 			 			 			 			 				     Aluminum 			 **1,024**			 			 				1,060			 				     Raw materials 			 **854**			 			 				835			 				     Other supplies 			 **529**			 			 				495			 			  			 **2,407**			 			 				2,390			 **Packaging operating segments** 			 			 			 			 			 			 				     Raw materials and other supplies 			 **323**			 			 				311			 				     Work in progress 			 **158**			 			 				155			 				     Finished goods 			 **340**			 			 				330			 			  			 **821**			 			 				796			 			  			 **3,228**			 			 				3,186			 	 	 **12.          SUPPLEMENTARY INFORMATION**	 *Three months ended March 31* **2007**			 				2006			 **Income Statement** 			 			 			 			 				     Interest on long-term debt 			 **74**			 			 				84			 				     Capitalized interest 			 **(23****)**			 				(14				) 			  **March 31, 2007**			 				December 31, 2006			 **Balance Sheet** 			 			 			 			 				Payables and accrued liabilities include the following: 			 			 			 			 				        Trade payables 			 **2,073**			 			 				2,163			 				        Other accrued liabilities 			 **1,651**			 			 				1,700			 				        Derivatives 			 **701**			 			 				740			 				        Income and other taxes 			 **273**			 			 				119			 				        Accrued employment costs 			 **637**			 			 				708			 			  			 **5,335**			 			 				5,430			 	   14  **13.          COMMITMENTS AND CONTINGENCIES**
On January 22, 2007, Alcan filed its leave to appeal application with the	British Columbia (BC) Court of Appeal regarding the BC Utilities Commission	December 29, 2006 decision to reject the amended and restated Long-Term	Energy Purchase Agreement between Alcan and BC Hydro. This appeal was	withdrawn on April 2, 2007. On March 28, 2007, the Supreme Court of BC in a	judgment concluded that there are no restrictions on the Company's use or	sale of Kemano power in the legislation or agreements with the Province of	BC. 
	The Company has guaranteed the repayment of indebtedness by third parties or	the indemnification of third parties for a total amount of approximately	$333. Alcan believes that none of these guarantees is likely to be invoked.	These guarantees relate primarily to debt held by equity-accounted Joint	Ventures, employee housing loans, obligations relating to businesses sold	and potential environmental remediation at former Alcan sites.  
	Alcan, in the course of its operations, is subject to environmental and	other claims, lawsuits and contingencies. The Company is involved in	proceedings arising out of laws regulating the discharge of materials into	the environment or laws seeking to protect the environment, for which it has	made accruals, in respect of 21 existing and former Alcan sites and third	party sites. Accruals have been made in specific instances where it is	probable that liabilities will be incurred and where such liabilities can be	reasonably estimated. 
	According to agreements entered into by the Company as part of Novelis	Spin-off, the Company has transferred to Novelis certain environmental	contingencies.  
	Alcan has agreed to indemnify Novelis and each of its Directors, officers	and employees against liabilities relating to:
	 -  
			liabilities of the Company other than those of an entity forming			part of Novelis or otherwise assumed by Novelis pursuant to its			separation agreement with Novelis;
			any liability of the Company or its Subsidiaries, other than Novelis, retained by Alcan under the separation agreement; and
			any breach by the Company of its separation agreement with Novelis			or any of its ancillary agreements with Novelis.	 	Although there is a possibility that liabilities may arise in other	instances for which no accruals have been made, the Company does not believe	that any losses in excess of accrued amounts would be sufficient to	significantly impair its operations, have a material adverse effect on its	financial position or liquidity, or materially and adversely affect its	results of operations for any particular reporting period, absent unusual	circumstances.  **14.          COMPREHENSIVE INCOME** *Three months ended March 31* **2007**			 				2006			 				Net income  			 **591**			 			 				453			 				Other comprehensive income: 			 			 			 			 			 			 				          Net change in deferred translation adjustments 			 **53**			 			 				157			 				          Net change in unreleased gains and losses on				derivatives  			 			 			 			 			 			 				                    (net of tax of $(24) and $43 for 2007 and				2006, respectively): 			 			 			 			 			 			 				                    Net change from periodic revaluations  			 **(11****)**			 				(123				)				                    Net amount reclassified to income 			 **57**			 			 				41			 				          Net change in minimum pension liability (net of tax of				$1  			 			 			 			 			 			 				                    for 2006) 			 **-**			 			 				(5				)				          Net change in unfunded status of pension and other								postretirement plans (net of tax ($5) for 2007): 			 			 			 			 			 			 				                    				Net								 amount reclassified				to income 			 **9**			 			 -			 			  			 **108**			 			 				70			 **Comprehensive income** 			 **699**			 			 				523			    15  **14.          COMPREHENSIVE INCOME** (cont'd) 			  **March 31, 2007**			 				December 31, 2006			 **Accumulated other comprehensive loss** 			 			 			 			 				Deferred translation adjustments 			 **1,070**			 			 				1,017			 				Unrealized gain on "available-for-sale" securities 			 **5**			 			 				5			 				Unfunded status of pensions and other postretirement plans 			 **(1,024****)**			 				(1,033				)				Unreleased loss on derivatives 			 **(166****)**			 				(212				)**Accumulated other comprehensive loss** 			 **(115****)**			 				(223				) 	 **15.          POST-RETIREMENT BENEFITS** 	Alcan and its subsidiaries have established retirement benefit plans in the principal	countries where they operate. The pension obligation relates mostly to	funded defined benefit pension plans in Canada, UK, US, Switzerland, the	Netherlands and Australia and to unfunded defined benefit pension plans	mainly in Germany and France, or lump sum retirement indemnities in France.	Pension benefits are generally based on the employee's service and highest	average eligible compensation before retirement, and are periodically	adjusted for cost of living increases, either by collective agreement such	as in Canada, statutory requirement such as in UK, France and Germany, or	Company practice when there are surpluses determined on a funding basis,	such as in Canada, Switzerland and the Netherlands. 	Most Funded Pension Plans are administered by a Pension Committee or Board	of Trustees composed of plan members designated by the Company and	employees. Each Committee or Board adopts its own investment policy which	generally favours diversification and active management of plan assets	through selection of specialized managers. Investments are generally limited	to publicly-traded stocks and high rated debt securities, excluding	securities in Alcan, and include only small amounts in other categories,	except for the Swiss plan, whose target allocation is evenly distributed	between equity, bonds and real estate.  Components of Net Periodic Benefit Cost 			  				Pension Benefits			 				Other Benefits			 *Three months ended March 31* **2007**			 				2006			 **2007**			 				2006			 				Current service cost 			 **50**			 			 				49			 			 **4**			 			 				4			 				Interest cost  			 **144**			 			 				138			 			 **16**			 			 				14			 				Expected return on assets 			 **(165****)**			 				(151				)			 **-**			 			 				-			 				Amortization: 			 			 			 			 			 			 			 			 			 			 			 			 				        Actuarial losses 			 **21**			 			 				27			 			 **4**			 			 				4			 				        Prior service cost 			 **17**			 			 				18			 			 **-**			 			 				-			 				Net periodic benefit cost 			 **67**			 			 				81			 			 **24**			 			 				22			 The expected long-term rate of return on plan assets is 6.9% in 2007 (6.9%	in 2006). Employer Contributions	 	Alcan previously disclosed in its financial statements for the year ended	December 31, 2006, that it expected to contribute $289 in aggregate to its	funded pension plans in 2007. The contributions are expected to be fully	comprised of cash. As at March 31, 2007, $66 has been contributed, and the	Company expects to contribute an additional $200 over the remainder of the	year. The Company expected to pay in 2007 $64 of unfunded pension benefits	and lump sum indemnities from operating cash flows. As at March 31, 2007,	$16 has been paid, and the Company expects to pay an additional $49 over the	remainder of the year.    16  **16.          LONG-TERM DEBT** 	During the first quarter of 2007, the Company entered into an interest rate	derivative to swap interest payments on $100 of its long-term debt from	fixed to floating rate (relating to the 4.875% Global notes due in 2012).	The fair market value of this derivative was $1 as at March 31, 2007. In	April 2007, the Company entered into interest rate derivatives to swap	interest payments on an additional $200 of the same long-term debt. These	derivatives have been designated and are effective as fair value hedges of	the underlying fixed rate debt.  **17.          PRIOR YEAR AMOUNTS** 	Certain prior year amounts have been reclassified to conform with current	period presentation.  **18.          SUBSEQUENT EVENTS** 	Effective April 2, 2007, the Company terminated a program to sell to a third	party an undivided interest up to $125 (€ 95 million) of selected trade	receivables without recourse.  	On April 12, 2007, the Company announced its intention to sell its 45%	interest in India's Utkal Alumina International Limited (Utkal). The Utkal	project, which involves the development of a new bauxite mine and alumina	refinery in the Indian state of Orissa and is currently in an engineering	phase, will continue to benefit from an Alcan technology supply agreement.	The Company has already taken initial steps leading to the sale process and	expects completion during the second quarter of 2007. 	On April 23, 2007, the Company reached an agreement in principle to sell its	Satma subsidiary to ALMECO Spa. Located in Goncelin (France), Satma	manufactures and sells capacitor foil for the electronic industry as well as	anodized strip for the lighting and decoration markets. Final terms of the	agreement are expected to be completed following the conclusion of	consultations with employee representatives. The transaction is anticipated	to close by the end of May 2007.    17  **Item 2.          Management's Discussion and Analysis of	Financial Condition and Results of Operations***(In millions of US$, except per common share amounts, aluminum prices	and as otherwise stated)*	 *This Management's Discussion and Analysis (MD&A) includes some measures	for which no meaning is prescribed by generally accepted accounting	principles (GAAP). Refer to the section "Definitions" for an explanation of	these measures.* **Overview** 	The Company reported first quarter income from continuing operations of $590	or $1.60 per common share versus $454 or $1.21 per common share a year	earlier and $418 or $1.12 per common share in the fourth quarter of 2006.	Income from continuing operations increased $136 year-over-year as the	Company benefited from higher aluminum prices and better pricing, product	mix and volumes in the downstream businesses. These were partly offset by	increased raw materials and energy costs, a reduction of technology license	fees recognized in relation to the Oman smelter project, unfavourable	non-cash mark-to-market adjustments on derivatives as well as the negative	impact of stronger European currencies. The increase of $172 in income from	continuing operations from the fourth quarter of 2006 reflected increased	aluminum prices, a lower charge for Other Specified Items (OSIs), favourable	non-cash mark-to-market adjustments on derivatives, improved pricing and	product mix mainly in Engineered Products, lower head office costs and	higher volumes in the downstream businesses principally due to seasonality.	These benefits more than offset an unfavourable variance in foreign currency	balance sheet translation effects, higher costs for raw materials and	energy, as well as lower volumes in the upstream businesses. The terms	"Other Specified Items" (OSIs) and "Foreign Currency Balance Sheet	Translation" are defined under "Definitions" at the end of the MD&A. 	Income from continuing operations for the first quarter of 2007 included an	after-tax charge of $19 or $0.05 per common share for the effects of foreign	currency balance sheet translation compared to an after-tax charge of $9 or	$0.02 per common share in the year-ago quarter and an after-tax gain of $97	or $0.26 per common share in the fourth quarter of 2006. The foreign	currency balance sheet translation gain for the fourth quarter of 2006	reflected the largely non-cash impact of the weakening Canadian dollar on	the Company's deferred income taxes. Also included in income from continuing	operations for the first quarter was an after-tax charge for OSIs of $9 or	$0.02 per common share compared to an after-tax charge of $10 or $0.03 per	common share in the year-ago quarter and an after-tax charge of $85 or $0.23	per common share in the fourth quarter of 2006. A detailed OSIs schedule is	provided below. ** ** (*in millions of US$, except as otherwise				noted)*			 **First Quarter**			 				Fourth Quarter			 			 			 **2007**			 				2006			 				2006			 			 			 				 			 				 			 				 			 **Included in income from continuing operations are:**			 			 			 			 			 			 			 				Foreign currency balance sheet translation			 			 **(19****)**			 				(9				)			 				97			 				Other Specified Items (OSIs) 			 			 **(9****)**			 				(10				)			 				(85				)			 			 			 			 			 			 			 			 			 			 			 **Income from continuing operations**			 			 **590**			 			 				454			 			 				418			 				Income from discontinued operations			 			 **1**			 			 				3			 			 				4			 				Cumulative effect of accounting change			 			 **-**			 			 				(4				)			 				-			 **Net income**			 			 **591**			 			 				453			 			 				422			 **Basic earnings per common share***($ per				common share)*			 			 			 			 			 			 			 			 			 			 				Income from continuing operations			 			 **1.60**			 			 				1.21			 			 				1.12			 				Net income			 			 **1.60**			 			 				1.21			 			 				1.13			 **Average number of common shares outstanding (millions)**			 				 **367.1**			 				 				373.1			 				 				371.5			     18   ** ** (*in millions of US$, except as otherwise				noted)*			 **First Quarter**			 				Fourth Quarter			 			 			 **2007**			 				2006			 				2006			 			 			 			 			 			 			 			 			 **Sales and operating revenues**			 			 **6,420**			 			 				5,550			 			 				6,219			 **Shipment volumes***(kt)*			 			 			 			 			 			 			 			 			 			          			Ingot products *			 			 **744**			 			 				749			 			 				776			          			Aluminum used in engineered products & packaging			 			 **342**			 			 				337			 			 				314			 				Total aluminum volume 			 			 **1,086**			 			 				1,086			 			 				1,090			 **Aluminum pricing data* ****($ per tonne)*			 			 			 			 			 			 			 			 			 			           			Ingot product realizations *			 			 **2,835**			 			 				2,454			 			 				2,712			           				Average LME 3-month price (one-month lag) 			 			 **2,760**			 			 				2,369			 			 				2,631			 ** The bulk of Alcan's ingot product sales are based on the				LME 3-month price with a one-month lag plus a local market				premium and any applicable product premium.*	 	Sales and operating revenues of $6,420 were up $870 compared to the year-ago	quarter mainly reflecting higher aluminum prices as well as favourable	pricing, product mix and volumes in downstream businesses. Compared to the	fourth quarter of 2006, sales and operating revenues increased by $201	mainly as a result of higher aluminum prices, increased volumes in	downstream businesses and product mix and pricing improvements, mainly in	Engineered Products. 	The average realized price on sales of ingot products during the first	quarter was up $381 per tonne from the year-ago quarter and up $123 per	tonne from the fourth quarter of 2006. The increases over both the year-ago	and sequential quarters mainly reflected the impact of higher LME aluminum	prices.   **First Quarter** Fourth Quarter *(in millions of US$)* **2007** 2006 2006         **Other Specified Items (after-tax)**                   						Restructuring charges   **(7****)** (21) (36)         			Asset impairments  **-**  (6) (14)         						Gains (losses) from non-routine sales of assets, businesses and			investments   **2**			  (29) (8)         			Other  **(4****)** 46  (27)**Other Specified Items**  **(9****)** (10)  (85 ) 	The most significant items included in OSIs in the first quarter of 2007	were after-tax restructuring charges of $7 which included costs related to	the Company's Affimet aluminum recycling plant in Compiègne, France. The	most significant items included in OSIs in the first quarter of 2006 were	after-tax losses of $29 on business and asset disposals, after-tax	restructuring charges of $21 mainly related to the packaging business, as	well as asset impairment charges of $6 mainly related to the sale of the	bottles business, offset by a gain of $41 arising on the sale of bankruptcy	claims against Enron. The most significant items included in OSIs in the	fourth quarter of 2006 were after-tax charges of $36 associated with	restructuring initiatives across most business groups, asset impairment	charges of $14 principally in relation to the Gove alumina refinery in	Australia, an asset retirement obligation adjustment in relation to closed	sites of $11 and a net loss on business divestments of $8. 	Included in income from continuing operations for the first quarter of 2007	were non-cash mark-to-market charges on derivatives of $0.02 per common	share as compared to gains of $0.03 a year earlier and charges of $0.17 in	the fourth quarter of 2006. Also included in income from continuing	operations for the first quarter of 2007 were non-cash pre-tax expenses of	$17 for share-based compensation as compared to $39 in the year-ago quarter	and $24 in the fourth quarter of 2006.   			19  **Net Income** 	Including results from discontinued operations, the Company reported net	income of $591 or $1.60 per common share, compared to net income of $453 or	$1.21 per common share a year earlier and $422 or $1.13 per common share in	the fourth quarter of 2006.  **Operating Segment Review** 	The term "Business Group Profit" (BGP) is defined under "Definitions" at the	end of the MD&A. 				 ** ** (*in millions of US$)*			 **First Quarter**			 				Fourth Quarter			 			 			 **2007**			 				2006			 				2006			 **Business Group Profit (BGP)**			 				 			 				 			 			 			 				Bauxite and Alumina 			 			 **175**			 			 				129			 			 				156			 				Primary Metal 			 			 **844**			 			 				758			 			 				755			 				Engineered Products 			 			 **174**			 			 				154			 			 				168			 				Packaging 			 			 **140**			 			 				146			 			 				109			 				Subtotal			 			 **1,333**			 			 				1,187			 			 				1,188			 				Equity accounted joint venture eliminations			 			 **(47****)**			 				(71				)			 				(19				)				Change in fair market value of derivatives			 			 **(15****)**			 				14			 			 				(82				)** ** 			 			 **1,271**			 			 				1,130			 			 				1,087			 **Corporate Items** 			 			 			 			 			 			 			 			 			 			 				Intersegment, corporate offices and other			 			 **(89****)**			 				(107				)			 				(255				)				Depreciation & amortization 			 			 **(264****)**			 				(251				)			 				(261				)				Interest 			 			 **(60****)**			 				(76				)			 				(76				)				Income taxes 			 			 **(280****)**			 				(269				)			 				(55				)				Equity income (loss)			 			 **12**			 			 				28			 			 				(21				)				Minority interests 			 			 **-**			 			 				(1				)			 				(1				)**Income from continuing operations**			 			 **590**			 			 				454			 			 				418			  **Bauxite and Alumina:**BGP for the first quarter was $175, an	increase of $46 compared to the year-ago quarter. Excluding OSIs and foreign	currency balance sheet translation effects, the year-over-year increase in	BGP was $51 or 40%. This improvement mainly reflected higher LME-linked	contract prices for alumina (given the normal one-quarter lag) partially	offset by the impact of the national strike in Guinea, lower shipment	volumes, higher raw material and operating costs and exchange losses due to	the strengthening Australian dollar. On a sequential basis, BGP for the	group was $19 above the previous quarter. Excluding OSIs and foreign	currency balance sheet translation effects, BGP increased by $17 or 10%,	reflecting higher LME-linked contract prices partially offset by the impact	of the national strike in Guinea, higher operating costs and lower shipment	volumes. The national strike in Guinea cost the business group $21 in BGP in	the first quarter, and is expected to cost an additional $12 in BGP in the	second quarter. Results for the second quarter of 2007 are expected to be	higher than the first quarter as a result of higher LME-linked contract	prices and a reduced impact of Guinea's national strike. **Primary Metal:**BGP for the first quarter was a business	group record at $844, up $86 as compared to the year-ago quarter. Excluding	OSIs and foreign currency balance sheet translation effects, the year-over-year	increase in BGP was $90 or 12%. The improvement mainly reflected higher	aluminum prices as well as additional contribution from the acquisition of	the cathode producer Carbone Savoie, partially offset by higher input costs	(alumina, electricity and fuel-related raw material costs), lower revenues	from the sale of technology (mainly the non-recurrence of revenue associated	with the Oman project), the adverse impact of the stronger European	currencies on costs and higher operating costs. On a sequential quarter	basis, BGP increased by $89. Excluding OSIs and foreign currency balance	sheet translation effects, BGP increased by $112 or 15%, reflecting higher	aluminum prices and lower operating costs. These favourable impacts were	partially offset by higher input costs (alumina, electricity and fuel-related	raw material costs), lower volumes and lower contributions from power	generation. Based on current forward prices for aluminum and rates for	currency (including the recent weakening of the US dollar), results for the	second quarter are expected to be similar to those of the first quarter.	
 
  				20 
 **Engineered Products:**BGP for the first quarter was a	business group record at $174, up $20 or 13% from a year earlier. Excluding	OSIs and foreign currency balance sheet translation effects, the	year-over-year increase in BGP was $21 or 13%. The year-over-year	improvement mainly reflected better prices and sales mix in most of the	group's businesses, most notably Cable and Aerospace. This was partly offset	by lower metal timing benefits, higher aluminum input costs and higher	operating costs. On a sequential quarter basis, BGP increased by $6 or 4%.	Excluding OSIs and foreign currency balance sheet translation effects, the	sequential increase in BGP was $12 or 7%, reflecting normal seasonal volume	improvements, better prices and improved sales mix, partially offset by	higher input and operating costs. BGP for the second quarter is expected to	decline slightly due to margin pressure, mainly in the softer North American	markets.  **Packaging:** BGP in the first quarter of $140 was down $6 or	4% from the prior-year quarter. Excluding the impact of OSIs, foreign	currency balance sheet translation effects and lost contributions from	divested businesses, BGP improved by $9 or 7%. The year-on-year improvement	was mainly due to volume growth initiatives, margin management in the face	of input cost pressure and a stronger Euro compared to the US dollar. On a	sequential quarter basis, BGP increased by $31 or 28%. Excluding the impact	of OSIs, foreign currency balance sheet translation effects and lost	contributions from divested businesses, BGP increased by $18 or 14%. The	growth drivers were stronger volumes from both seasonal effects and organic	growth initiatives plus cost savings measures. BGP in the second quarter of	2007 is expected to improve compared to the first quarter as progress	continues to be made in operating efficiencies. **Corporate Items** 	The Intersegment, corporate offices and other expense category includes	corporate head office costs as well as other non-operating items and the	elimination of profits on intersegment sales of aluminum and alumina. The	reduction of $18 compared to the first quarter of 2006 mainly reflects share-based	compensation. The reduction of $166 compared to the fourth quarter of 2006	reflects mainly the reduction of restructuring, asset impairment and closed-site	asset retirement obligation charges as well as lower head office costs. 	Depreciation and amortization expenses were $13 higher than in the year-ago	quarter primarily reflecting increased depreciation at the Gove alumina	refinery in Australia. Depreciation and amortization expenses were	comparable to the prior quarter. 	Interest expense, net of capitalized interest, was $16 lower than in both	the year-ago and prior-year quarters mainly reflecting a higher level of	capitalized interest and reduced debt levels. In the first quarter of 2007,	capitalized interest was $23 compared to $14 a year ago and $16 in the	fourth quarter of 2006, all largely related to the Gove expansion.  	The Company's effective tax rate on income from continuing operations was	33% in the first quarter. Foreign currency balance sheet translation losses	due to the strengthening of the Canadian dollar increased the effective tax	rate. **Share Repurchase Program** 	Cumulatively since the program inception, Alcan purchased 9,831,200 common	shares at an average price of $47.42 per share for a total cost of $466.	This represents 52% of the total number of shares approved for repurchase. **Liquidity and Capital Resources** ** ** (*in millions of US$)*			 **First Quarter**			 				Fourth Quarter			 			 			 **2007**			 				2006			 				2006			 			 			 			 			 			 			 			 			 **Cash flow from operating activities in continuing				operations**			 			 **582**			 			 				362			 			 				1,104			 				Dividends			 			 **(75****)**			 				(58				)			 				(76				)				Capital expenditures			 			 **(312****)**			 				(426				)			 				(610				)**Free cash flow from (used for) continuing operations**			 			 **195**			 			 				(122				)			 				418			    			21  ***Operating Activities***	Cash flow from operating activities in continuing operations increased by	$220 compared to the year-ago quarter and decreased by $522 compared to the	fourth quarter of 2006. The increase in cash from operating activities in	continuing operations over the year-ago quarter mainly reflects higher	earnings and a less unfavourable movement in operating working capital,	partially offset by an unfavourable movement in deferred items. The decrease	over the prior quarter principally reflects seasonally typical unfavourable	movements in operating working capital and deferred items which more than	offset higher earnings. After dividends of $75 and capital expenditures of	$312, free cash flow from continuing operations was $195 for the first	quarter of 2007. In the year-ago quarter, after dividends of $58 and capital	expenditures of $426, free cash flow from continuing operations was negative	$122. The term "Free cash flow from continuing operations" is defined under	"Definitions" at the end of the MD&A. ***Financing Activities***
 

***Debt as a Percentage of Invested			Capital***

    			(*in millions of US$**, except as			otherwise noted)* **March 31**  December 31,  		 		 **2007**		 			2006		 			2006		 		 		 		 		 		 		 		 		 **Debt**		 		  		 		  		 		  		  Short-term			borrowings 		 		 **579** 		  308  		  467   Debt			maturing within one year 		 		 **32** 		  823  		  36   Debt not			maturing within one year 		 		 **5,169** 		  5,219  		  5,476  **Total debt**		 		 **5,780** 		  6,350  		  5,979  **Minority		interests**		 		 **71** 		 68 		  71  **Equity**		 		   		   		    Redeemable			non-retractable preference shares 		 		 **160** 		  160  		  160  			Common			shareholders' equity 		 			 **11,565**   10,039    10,934  **Total invested capital**		 			 **17,576**  16,617  17,144		 **Debt as a percent of invested capital (%)**		 		 **33%**		 		  38%  		  35% 		 
	 
	The term "Debt as a percentage of invested capital" is defined under "Definitions"	at the end of MD&A.	 
	Debt as a percentage of invested capital as at March 31, 2007 was 33%, down	from 35% at the end of the fourth quarter of 2006 due to lower debt and	higher equity. 	During the first quarter of 2007, the Company entered into an interest rate	derivative to swap interest payments on $100 of its long-term debt from	fixed to floating rate (relating to the 4.875% Global notes due in 2012).	The fair market value of this derivative was $1 as at March 31, 2007. In	April 2007, the Company entered into interest rate derivatives to swap	interest payments on an additional $200 of the same long-term debt. These	derivatives have been designated and are effective as fair value hedges of	the underlying fixed rate debt. 	Effective April 2, 2007, the Company terminated a program to sell to a third	party an undivided interest up to $125 (€ 95 million) of selected trade	receivables without recourse.  **Liquidity**	Effective in June 2006, the Company replaced its $3,000 multi-currency,	five-year, committed global credit facility with a two-tranche,	multi-currency, committed global credit facility with a syndicate of	international banks. The facility is comprised of a $2,000 five-year tranche	maturing in June 2011, and a $1,000 364-day tranche, which may be extended	by two years at the Company's option. The facility is available for general	corporate purposes and is primarily used to support Alcan's commercial paper	programs. 	In addition to its existing $3-billion commercial paper program in Canada,	the Company reinstated in 2005 two new commercial paper programs, one in	France of € 1 billion and another in the US of $2 billion. The Company	guarantees the commercial paper issued under these two programs. In October	2005, a commercial paper program in the US was also initiated with Alcan	Corporation as the issuer. At any point in time, the total combined issuance	limit for all three programs cannot exceed $3 billion.  	The Company had both the intention and the ability, through its long-term	credit facilities, to refinance its commercial paper borrowings on a	long-term basis and has classified them as Debt not maturing within one	year.   				22  	As at May 8, 2007, Alcan had $835 of commercial paper outstanding.	Based on the Company's forecasts, the Company believes that cash from	continuing operations together with available credit facilities will be more	than sufficient to meet the cash requirements of operations, planned capital	expenditures, dividends and any short-term debt refinancing requirements. In	addition, the Company believes that its ability to access global capital	markets provides any additional liquidity that may be required to meet	unforeseen events. Alcan's long-term debt rating remains unchanged at BBB+ /	Baa1 with short-term debt rated A2 / P2 by S&P's and Moody's respectively.	Credit rating agencies apply their own criteria and may change the ratings	at any time. ***Investment Activities***	In the first quarter of 2007, cash used for investment activities was $356	compared to $266 in the year-ago quarter. Both the current and year-ago	quarter balances mainly reflect capital expenditures of $312 and $426,	respectively. Excluding capital expenditures on the Gove expansion, capital	spending was 51% and 72% of depreciation and amortization expense for the	first quarter of 2007 and prior-year quarter, respectively.  	On April 30, 2007, Alcan announced that it signed a Heads of Agreement with	Saudi Arabian mining company Ma'aden to develop a proposed US$7-billion	integrated aluminum "mine-to-metal" project including bauxite mining,	alumina refining, power generation and aluminum smelting. Alcan would hold a	49 percent stake in the project and would provide technology and operating	management support, with Ma'aden holding the balance of 51-percent ownership.	As one of the world's largest vertically integrated projects of its kind,	the initial operations would feature a power plant delivering 1,400	megawatts; a 90 million tonne bauxite reserve located in Az Zabirah in	northern Saudi Arabia representing a potential 30 years of mining; an	alumina refinery with a capacity of 1.6 million tonnes per year; an aluminum	smelter with a capacity of 720 thousand tonnes per year, and would leverage	Saudi Arabia's port facilities and infrastructure. First metal would be	expected during the first quarter of 2011, and first alumina a year later.  **Contractual Obligations** 	The Company has future obligations under various contracts relating to debt	payments including those with associated interest rate swap agreements,	capital and operating leases, long-term purchase arrangements, pensions and	other post-employment benefits, and guarantees. The table below provides a	summary of these contractual obligations (based on undiscounted future cash	flows) as at March 31, 2007. There are no material off-balance sheet	arrangements. ***Contractual Obligations****As at March 31, 2007*		 ***Payments due by Period***		 
** ** (*in millions of US$)*
 
**Total**
 
			Less than 

			One Year
 
			1 - 3 Years
 
			3 - 5 Years
 
			More than 

			5 Years		 		 		 		 		 		 		 		 		 		 		 		 		 			Long-term debt (1)		 **5,201**		 			32		 			536		 			965		 			3,668		 			Interest payments (1)		 **3,635**		 			225		 			555		 			499		 			2,356		 			Capital lease obligations		 **31**		 			6		 			8		 			3		 			14		 			Operating leases		 **449**		 			59		 			136		 			95		 			159		 			Purchase obligations 		 **6,442**		 			1,083		 			1,175		 			1,050		 			3,134		 			Unfunded pension plans (2)		 		 **2,432**		 		 			49		 		 			137		 		 			138		 		 			2,108		 			Other post-employment benefits (2)		 		 **2,762**		 		 			49		 		 			144		 		 			159		 		 			2,410		 			Funded pension plans (2), (3)		 		 **(3****)**		 			200		 		 			544		 		 			562		 		 (3)			Guarantees (4)		 		 **333**		 		 			10		 		 			249		 		 			63		 		 			11		 			Total		 			 			 		 		 **1,713**		 		 **3,484**		 		 **3,534**		 		 		 		 *(1)  **Interest payments are calculated	using the interest rate in effect, including the impact of interest rate	swap agreements on $700 of fixed rate long-term debt and the outstanding	debt balance as at March 31, 2007. All commercial paper borrowings and	interest payments thereon have been included to 2011 when long-term credit	facility matures.**(2)**   Refer to note 15, Post-Retirement	Benefits, of the accompanying consolidated financial statements.**(3)**  Pension funding generally includes the	contribution required to finance the annual service cost, except where the	plan is largely overfunded, and amortization of unfunded liabilities over	periods of 15 years, with larger payments made over the initial period where	required by pension legislation. Contributions depend on actual returns on	pension assets and on deviations from other economic and demographic	actuarial assumptions. Based on management's long-term expected return on	assets, annual contributions for years after 2011 are projected to be in the	same range as in prior years and to grow in relation with payroll.**(4)**  Refer to note 13, Commitments and	Contingencies, of the accompanying consolidated financial statements.*   				23 **Selected Annual Information** 				Selected financial data for each of the Company's three most				recently completed financial years is as follows:			 			 			 			  **31 December**			 ** **(*in millions of US$, except as otherwise				noted)* **2006**			 **2005**			 **2004**			 			  			 			 			 			 			 			 				Sales and operating revenues 			 				23,641			 			 				20,320			 			 				24,948			 			  			 			 			 			 			 			 			 			 			 				Income from continuing operations 			 				1,786			 			 				155			 			 				243			 			  			 			 			 			 			 			 			 			 			 				Net income 			 				1,786			 			 				129			 			 				258			 			  			 			 			 			 			 			 			 			 			 				Total assets 			 				28,939			 			 				26,638			 			 				33,341			 			  			 			 			 			 			 			 			 			 			 				Total long-term debt 			 				5,512			 			 				6,067			 			 				6,914			 			  			 			 			 			 			 			 			 			 			 *($ per common share)* 			 			 			 			 			 			 			 			 			 			  			 			 			 			 			 			 			 			 			 				Income from continuing operations - basic  			 				4.75			 			 				0.40			 			 				0.64			 			  			 			 			 			 			 			 			 			 			 				Income from continuing operations - diluted 			 				4.74			 			 				0.40			 			 				0.64			 			  			 			 			 			 			 			 			 			 			 				Net income - basic 			 				4.75			 			 				0.33			 			 				0.69			 			  			 			 			 			 			 			 			 			 			 				Net income - diluted 			 				4.74			 			 				0.33			 			 				0.69			 			  			 			 			 			 			 			 			 			 			 				Dividends  			 				0.70			 			 				0.60			 			 				0.60			  **Selected Quarterly Information** 	Selected unaudited financial data for each of the Company's eight most	recently completed quarters is as follows: (*in				millions of US$, except as otherwise noted)* **Q1-07** **Q4-06** **Q3-06** **Q2-06** **Q1-06** **Q4-05** **Q3-05** **Q2-05**  				                 Sales and operating revenues				  6,420  6,219  5,769  6,103  5,550  5,049  4,887  5,206  				                         Income (Loss) from continuing operations				  590  418  460  454					  454  (333)  72  208					  				                         Net income (Loss)				  591  422  456  455					  453  (361)  81  191					  				                         *($ per common share)*                          				                         					Income (Loss) from continuing operations - basic				  1.60  1.12  1.21  1.21					  1.21  (0.90) 0.19  0.56					  				  				                       					Income (Loss) from continuing operations - diluted				  1.59  1.12  1.21  1.20					  1.20  (0.90)  0.19  0.56					  				                         Net income (Loss) - basic				  1.60  1.13  1.20  1.21					  1.21  (0.98)  0.21  0.52					  				                         Net income (Loss) - diluted  1.59  1.13  1.20  1.20					  1.20  (0.98)  0.21  0.52					 
**Commitments and Contingencies** 	The Company's commitments and contingencies are described in note 13 -	Commitments and Contingencies, of the accompanying consolidated financial	statements. **Related Party Transactions** 	The only related party transactions are those with the joint ventures	accounted for under the equity method. These transactions are undertaken on	an arm's length, negotiated basis. For more details, refer to note 11 -	Related Party Transactions, of the consolidated financial statements in the	most recent Annual Report on Form 10-K.    				24  **Accounting Policies** 	The preparation of financial statements in conformity with United States	GAAP requires management to make estimates, judgments and assumptions that	affect the reported amounts of assets and liabilities and disclosure of	contingent assets and liabilities at the date of the financial statements	and the reported amounts of revenues and expenses during the reporting	periods. The most significant estimates are associated with the critical	accounting policies relating to post-retirement benefits; environmental	liabilities; property, plant and equipment; goodwill; income taxes; and	business combinations. These critical accounting policies are those that are	both most important to the portrayal of the Company's financial condition	and results and require management's most difficult, subjective or complex	judgments, often as a result of the need to make estimates about the effect	of matters that are inherently uncertain.  	The Company's critical accounting policies are more fully described in note	2 - Summary of Significant Accounting Policies, of the consolidated	financial statements and in the MD&A, contained in the most recent Annual	Report on Form 10-K. 	On January 1, 2007, the Company adopted the provisions of the Financial	Accounting Standards Board (FASB) Interpretation No. 48, Accounting for	Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109	(FIN 48). The adoption of this standard resulted in the Company recording a	$28 net increase in the liability for unrecognized tax benefits on January	1, 2007. This net increase in liabilities resulted in a decrease to the	January 1, 2007 balance of Retained earnings of $21, a net decrease in	Deferred tax liabilities of $8 and a reduction of $1 in equity-accounted	investments included in Deferred charges and other assets. For more details, refer to	note 2 - Accounting Changes and note 9 - Income Taxes, of the accompanying	consolidated financial statements. **Cautionary Statement**	 	Statements made in this Form 10-Q which describe the Company's or	management's objectives, projections, estimates, expectations or predictions	of the future may be "forward-looking statements" within the meaning of	securities laws which can be identified by the use of forward-looking	terminology such as "believes," "expects," "may," "will," "should," "estimates,"	"plans," "anticipates" or the negative thereof or other variations thereon.	All statements that address the Company's expectations or projections about	the future including statements about the Company's growth, cost reduction	goals, operations, reorganization plans, expenditures and financial results	are forward-looking statements. Such statements may be based on the	Company's own research and analysis. The Company cautions that, by their	nature, forward-looking statements involve risk and uncertainty and that the	Company's actual actions or results could differ materially from those	expressed or implied in such forward-looking statements or could affect the	extent to which a particular projection is realized.  Reference should be	made to the Company's most recent Annual Report on Form 10-K for a list of	factors that could cause such differences.	 	Important factors which could cause such differences include: changes in	global supply and demand conditions for aluminum and other products;	cyclical demand and pricing within the principal markets for the company's	products; changes in the relative value of various currencies; fluctuations	in the supply of and prices for power in the areas in which the company	maintains production facilities; changes in aluminum ingot prices and	changes in raw material costs and availability; competition in highly	competitive markets; changes in prevailing interest rates and equity market	returns related to pension plan investments; economic, regulatory and	political factors within the countries in which the company operates or	sells its products; the risk of significant losses from trading operations,	including losses due to market and credit risks associated with derivatives;	changes in government regulations, particularly those affecting	environmental, health or safety compliance; risks related to the use of	hazardous materials in manufacturing processes; delay and cost risks related	to significant capital projects; the consequences of transferring most of	the aluminum rolled products businesses operated by the company to Novelis	Inc.; relationships with, and financial and operating conditions of,	customers and suppliers; willingness of customers to accept substitution by	competing products; major changes in technology that affect the company's	competitiveness; potential catastrophic damage, increased insurance and	security costs and general uncertainties associated with the increased	threat of terrorism or war; the effect of international trade disputes on	the company's ability to import materials, export its products and compete	internationally; the effect of integrating acquired businesses and the	ability to attain expected benefits; potential discovery of unanticipated	commitments or other liabilities associated with the acquisition and	integration or disposition of businesses; and other factors affecting the	company's operations including, but not limited to, litigation, labour	relations and negotiations and fiscal regimes.  			25  	 	The Company undertakes no obligation to release publicly the results of any	future revisions it may make to forward-looking statements to reflect events	or circumstances after the date of this quarterly report or to reflect the	occurrence of unanticipated events. Furthermore, the Company undertakes no	obligation, in relation to future quarterly earnings disclosures, to release	publicly any information on an interim basis prior to the final earnings	disclosure.	 **Definitions** 	"$" all amounts are in US dollars.  	"Business Group Profit" (BGP) comprises earnings before interest, income	taxes, minority interests, depreciation and amortization and excludes	certain items, such as corporate costs, restructuring costs (relating to	major corporate-wide acquisitions or initiatives), impairment and other	special charges, pension actuarial gains, losses and other adjustments, and	unrealized gains and losses on derivatives, that are not under the control	of the Business Groups or are not considered in the measurement of their	profitability. These items are generally managed by the Company's corporate	head office, which focuses on strategy development and oversees governance,	policy, legal, compliance, human resources and finance matters. Financial	information for individual business groups includes the results of certain	joint ventures and other investments accounted for using the equity method	on a proportionately consolidated basis, which is consistent with the way	the business groups are managed. However, the BGP of these joint ventures	and equity-accounted investments is removed from total BGP for the company	and the net after-tax results are reported as equity income. The unrealized	change in the fair market value of derivatives has been removed from	individual business group results and is shown on a separate line within	total BGP. This presentation provides a more accurate portrayal of	underlying business group results and is in line with the company's	portfolio approach to risk management. 	"Debt as a percentage of invested capital" does not have a uniform	definition. Because other issuers may calculate debt as a percentage of	invested capital differently, Alcan's calculation may not be comparable to	other companies' calculations. The figure is calculated by dividing	borrowings by total invested capital. Total invested capital is equal to the	sum of borrowings and equity, including minority interests. The Company	believes that debt as a percentage of invested capital can be a useful	measure of its financial leverage as it indicates the extent to which it is	financed by debt holders. The measure is widely used by the investment	community and credit rating agencies to assess the relative amounts of	capital put at risk by debt holders and equity investors. 	"Derivatives" including forward contracts, swaps and options are financial	instruments used by the Company to manage the specific risks arising from	fluctuations in exchange rates, interest rates, aluminum prices and other	commodity prices. Mark-to-market gains and losses on derivatives will be	offset over time by gains and losses on the underlying exposures. 	"Foreign currency balance sheet translation" effects largely arise from	translating monetary items (principally deferred income taxes and long-term	liabilities) denominated in Canadian and Australian dollars into US dollars	for reporting purposes. Although these effects are primarily non-cash in	nature, they can have a significant impact on the Company's net income.	 	"Free cash flow from continuing operations" consists of cash from operating	activities in continuing operations less capital expenditures and dividends.	Management believes that free cash flow, for which there is no comparable	GAAP measure, is relevant to investors as it provides an indication of the	cash generated internally that is available for investment opportunities and	debt service. 	"GAAP" refers to United States Generally Accepted Accounting Principles.	 	"LME" refers to the London Metal Exchange. 	"Other Specified Items" (OSIs) include, for example: restructuring and	synergy charges; asset impairment charges; gains and losses on non-routine	sales of assets, businesses or investments; unusual gains and losses from	legal claims and environmental matters; gains and losses on the redemption	of debt; income tax reassessments related to prior years and the effects of	changes in income tax rates; and other items that, in Alcan's view, do not	typify normal operating activities.  	All tonnages are stated in metric tonnes, equivalent to 2,204.6 pounds. 	All figures are unaudited.   				26  
	Additional information on Alcan is available on the Company's website at	www.alcan.com and the Company's regulatory filings can be viewed on the	Canadian Securities Administrators' site at www.sedar.com and on the US	Securities and Exchange Commission's site at www.sec.gov. All website	addresses contained in this report are textual references and information	from referenced websites is not incorporated by reference into this report.	The number of common shares outstanding as at May 1, 2007 is 367,874,400. 	   			27 **Item 3.          Quantitative and Qualitative Disclosures about	Market Risk**	(*in millions of US$, except LME prices*) 	Changes in interest rates, foreign exchange rates and the market price of	aluminum are among the factors that can impact the Company's cash flow. See	risk factors described in Item 1A of the Company's Annual Report	on Form 10-K for the year ended December 31, 2006.	 **Interest Rates** 	The impact of a 10% increase in interest rates on the Company's variable	rate debt outstanding and on the fixed rate debt that has been converted to	variable rate debt through interest rate swaps at March 31, 2007 and 2006,	net of its cash and time deposits at March 31, 2007 and	2006, would be to reduce annual net income by $7 and $3, respectively for	the variable rate debt including $2 and nil, respectively for the fixed rate debt converted to variable rate debt	through interest rate swaps. The fixed rate debt is expected to be	outstanding until maturity as the Company does not intend to refinance its	fixed rate debt prior to maturity. Transactions in interest rate financial	instruments for which there is no underlying interest rate exposure to the	Company are prohibited. For accounting policies for interest rate swaps used	to hedge interest costs on certain debt, see note 2 - Summary of Significant	Accounting Policies of the Company's most recent Annual Report on	Form 10-K. **Currency legend:** 	BRLBrazilian	Real			GBP			UK Pound	CADCanadian	DollarISKIceland	Kronur	CHFSwiss	FrancJPYJapanese	Yen	CZKCzech	KorunaMXNMexican	Peso	DKKDenmark	KronerSKKSlovak	Koruna			EUREurosUSDUS	Dollar	 
**Currency Derivatives** 	The schedule below presents fair value information and contract terms	relevant to determining future cash flows categorized by expected maturity	dates of the Company's currency derivatives (principally forward contracts)	outstanding as at March 31, 2007. **2007****2008****2009 to 2012****and thereafter****Total Nominal Amount****Fair Value**			 			 			 			 				(in US$ millions, except average contract rates)			       **FORWARD CONTRACTS**             **To buy USD against the foreign currency**             				GBP				Nominal amount				29				-  				-  				29				- *Average contract rate**0.508**-**-*          				CAD				Nominal amount				4				-  				-  				4				- *Average contract rate**1.166**-**-*          				AUD				Nominal amount				1				-  				-  				1				- *Average contract rate**1.258**-**-*         				CHF				Nominal amount				-				-  				1*				1				- *Average contract rate**-**-**1.166**         				MXN				Nominal amount				7				1				-  				8				- *Average contract rate**11.14**11.29**-*         				JPY				Nominal amount				8				-  				-  				8				- *Average contract rate**111.5**-**-*                	 	  28 	 	 	   **2007****2008****2009 to 2012****and thereafter****Total Nominal Amount****Fair Value**				 				 				 				 					(in US$ millions, except average contract rates)				        **FORWARD CONTRACTS (cont'd)**            				NZD				Nominal amount*2*				-  				-  				2				- *Average contract rate**1.463**-**-*         					CZK					Nominal amount					3*-**-*					3*-* *Average contract rate**21.00**-**-*         					SKK					Nominal amount					4*-**-*					4*-* *Average contract rate**26.58**-**-*                **To sell USD against the foreign currency**             					AUD					Nominal amount					8					-  					-  					8					- *Average contract rate**1.238**-**-*         					BRL					Nominal amount					35					-  					-  					35					8 *Average contract rate**2.698**-**-*          					CHF					Nominal amount					17*-*					-  					17					- *Average contract rate**1.217**-**-*         					CZK					Nominal amount					10					-  					-  					10					- *Average contract rate**20.35**-**-*         					CAD					Nominal amount					9					-  					-  					9					-				 *Average contract rate**1.164**-**-*				 				 				 				 				 				 				 				 				        **To buy EUR against the foreign currency**             					USD					Nominal amount					142					1					-  					143					2 *Average contract rate**1.316**1.154**-*          					GBP					Nominal amount					4					-  					-  					4					- *Average contract rate**0.680** -**-*         					JPY					Nominal amount					6					-					-					6					- *Average contract rate**146.1*					-					-  				 				 				 				 				 				 				 	 	  **2009****2010****2011**				 **2012 and****thereafter****To buy USD against the foreign currency**          				*CHF				Nominal amount				1				-				-				-			 *Average contract rate**1.166**-**-**-*	 	 	  29    **2007****2008****2009 to 2012****and thereafter****Total Nominal Amount****Fair Value**			 			 			 			 				(in US$ millions, except average contract rates)			       **FORWARD CONTRACTS (cont'd)**             **To sell EUR against the foreign currency**             				USD				Nominal amount				241				13				5**				259				(3) *Average contract rate**1.332**1.113**1.358***         				CHF				Nominal amount				15				4				-				19				(1) *Average contract rate**1.577**1.506**-*         				CZK				Nominal amount				4				-				-				4				- *Average contract rate**28.17**     -**-*  			 			 			 			 			 			 			       **To sell GBP against the foreign currency**             				CHF				Nominal amount				10				-				-				10				-			 *Average contract rate**2.375**-**-*			 			 				 				 				 				 				 				 				         **2009****2010****2011**				 **2012 and****thereafter****To sell EUR against the foreign currency**          				**USD				Nominal amount				1				1				1				2			 *Average contract rate**1.333**1.349**1.360**1.381*	 	  30  	The schedule below presents fair value information and contract terms	relevant to determining future cash flows categorized by expected maturity	dates of the Company's currency derivatives (principally forward and option	contracts) outstanding as at March 31, 2006.  **2006****2007****2008 to 2011 and thereafter****Total Nominal Amount****Fair Value**			 			 			 			 				(in US$ millions, except average contract rates)			       **FORWARD CONTRACTS**             **To buy USD against the foreign currency**             				GBP				Nominal amount				14				-				-				14				- *Average contract rate**0.573**-**-*         				CHF				Nominal amount				20				-				-				20				1 *Average contract rate**1.226**-**-*          				JPY				Nominal amount				13				-				-				13				- *Average contract rate**113.96**-**-*         				MXN				Nominal amount				2				4				1***				7				- *Average contract rate**10.79**10.97**11.29****         				NZD				Nominal amount				2				-				-				2				- *Average contract rate**1.546**-**-*         				DKK				Nominal amount				1				-				-				1				- *Average contract rate**6.130**-**-*                 **To sell USD against the foreign currency**             				GBP				Nominal amount				45				-				-				45				(1) *Average contract rate**0.566**-**-*         				CHF				Nominal amount				15				-*-*				15				- *Average contract rate**1.274**-**-*         				AUD				Nominal amount				205				-				-				205				(4) *Average contract rate**1.375**-**-*         				BRL				Nominal amount				25				45				-				70				6 *Average contract rate**2.507**2.669**-*          				ISK				Nominal amount				6				-				-				6				- *Average contract rate**66.33**-**-*         				JPY				Nominal amount				3				-				-				3				- *Average contract rate**113.7**-**-*         				Other				Nominal amount				1				-				-				1				-             **To sell EUR against the foreign currency**             				USD				Nominal amount				630				24				16****				670				(14) *Average contract rate**1.207**1.223**1.174*****         				GBP				Nominal amount				1				-				-				1				- *Average contract rate**0.693**-*				-          				CHF				Nominal amount				29				5				4*****				38				(1) *Average contract rate**1.526**1.522**1.506******  			 			 			 			 			 			 			          31   **2006****2007****2008 to 2011 and thereafter****Total Nominal Amount****Fair Value**			 			 				(in US$ millions, except average contract rates)			       **FORWARD CONTRACTS (cont'd)**           **To buy EUR against the foreign currency**            				USD				Nominal amount				627				21				-				648				20 *Average contract rate**1.193**1.201**-*         				GBP				Nominal amount				19				1				-				20				- *Average contract rate**0.690**0.694**-*         				AUD				Nominal amount				1				-				-				1				- *Average contract rate**1.627**-*				-          				JPY				Nominal amount				3				-				-				3				- *Average contract rate**138.5*           				CAD				Nominal amount				4				2				-				6				- *Average contract rate**1.459**1.525**-*         				Other				Nominal amount				1				-				-				1				-			 			 			 			 			 			 			 	 **OPTIONS**             **To sell EUR against the foreign currency**            USDNominal amount10620-126- *Average contract rate**1.320**1.320*-           **2008****2009****2010**				 **2011 and****thereafter****To buy USD against the foreign currency**         				***MXN				Nominal amount				1				-				-				- *Average contract rate**11.29**-**-**-*     **To sell EUR against the foreign currency**          				****USD				Nominal amount				12				1				1				2 *Average contract rate**1.113**1.333**1.349**1.374*      				*****CHF				Nominal amount				4				-				-				-			 *Average contract rate**1.506**-**-**-*			 			 			 			 			 			   32  	Any negative impact of currency movements on the currency contracts that the	Company has taken out to hedge identifiable foreign currency commitments to	buy or sell goods and services would be offset by an equal and opposite	favourable exchange impact on the commitments being hedged. Transactions in	currency-related financial instruments for which there is no underlying	foreign currency exchange rate exposure to the Company are prohibited,	except for a small trading portfolio not exceeding $50. For accounting policies relating to currency contracts, see note 2 - Summary of	Significant Accounting Policies of the Financial Statements of	the Company's most recent Annual Report on Form 10-K. **Derivative Commodity Contracts** 	The effect of a reduction of 10% in aluminum prices on the Company's	aluminum forward and options contracts outstanding at March 31, 2007 would	be to increase net income over the period ending December 31, 2008 by	approximately $58 ($56 in 2007 and $2 in 2008). The $58 increase reflects a 10% reduction from the March 31, 2007,	three-month LME aluminum closing price of $2,780 per tonne and assumes an	equal 10% drop has occurred throughout the aluminum forward price curve	existing as at March 31, 2007. As of March 31, 2006, such sensitivity would	have increased net income over the period ending December 31, 2007 by $112 ($63 in 2006 and $49 in 2007). 
	The Company's	aluminum forward contract positions, producing the above results, are	entered into to hedge anticipated future sales of metal.	Consequently, any negative impact of movements in the price of aluminum on	the forward contracts would be offset by an equal and opposite impact on the	sales being hedged. The effect of a reduction of 10% in aluminum prices on	the Company's anticipated sales and purchases of aluminum is excluded from	the sensitivity analysis above.
	 	Transactions in metal-related financial instruments for which there is no	underlying metal price exposure to the Company are prohibited, except for a	small trading portfolio of metal forwards not exceeding 25,000 tonnes.   33  **Item 4.          Controls and Procedures**	 **a)         		Evaluation of Disclosure Controls and Procedures** 	As at March 31, 2007, an evaluation was carried out under the supervision	and with the participation of the Company's management, including the Chief	Executive Officer and Chief Financial Officer (respectively, the Company's	principal executive and financial officers), of the effectiveness of the	design and operation of Alcan's disclosure controls and procedures (as	defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act	of 1934). Based upon that evaluation, Alcan's Chief Executive Officer and	Chief Financial Officer concluded that these disclosure controls and	procedures were effective as of March 31, 2007.	 **b)         		Changes in Internal Control Over Financial Reporting** 	There have been no changes in the Company's internal control over financial	reporting during the quarter ended March 31, 2007 that have materially	affected, or are reasonably likely to materially affect, the Company's	internal control over financial reporting. The Company will provide	management's assessment of the effectiveness of the Company's internal	control over financial reporting in the Company's Annual Report on Form 10-K	for 2007.   34
**PART II.  OTHER INFORMATION**

**Item 1.             Legal Proceedings**

**Millville,		New Jersey Plant.**		 Wheaton		USA Inc., now Alcan Global Pharmaceutical Packaging Inc. ("AGPP"),		 operates air emission equipment pursuant to		permit  at its Millville (New Jersey, US) glass plant. In January		2007, the New Jersey Department of Environmental Protection ("NJDEP")		served an administrative order and notice of administrative penalty on		AGPP for  alleged  violations of its air		permit at the Millville plant. AGPP is currently in discussions with New		Jersey state officials. 

**Berry's		Creek, New Jersey.**		In February 1996, the Company's UK Subsidiary, British Alcan Aluminium		plc ("British Alcan") sold its investment in Luxfer USA Limited, now		Luxfer, Inc. ("Luxfer"), including a company called Magnesium Elektron,		Inc. ("ME"). As part of the sale agreement, British Alcan must indemnify		the purchaser for certain claims that may arise after the date of sale.		In January 2007, Luxfer's UK parent company notified British Alcan that		ME had received from the US Environmental Protection Agency ("EPA") a		Superfund notice in respect of  a long since		divested ME joint venture with another company on property near the		Berry's Creek Study Area in New Jersey . British Alcan intends to		respond to the EPA. 

**Items 1A., 3. and 5.**

 

The registrant has nothing to report under these items.				

**Item 2.      Unregistered Sales of Equity Securities and Use of		Proceeds**

**Unregistered Sales of Equity Securities**

In the first quarter of 2007, the Company issued 95,739 Common Shares to		former holders of Pechiney options that resided outside the United		States and Canada upon the exercise of such options. The aggregate		proceeds of the exercise of the options were approximately $3.8 million.		These proceeds were used for general corporate purposes. These Common		Shares were not registered under the *Securities Act of 1933*, as		amended in reliance on regulation S. The dates of sale and amounts of		Common Shares are set forth below: 

**Dates**
**Number of Shares**
  
**Dates**
**Number of Shares**
  
**Dates**
**Number of Shares**
2 January 2007 
1,595 
  
7 February 2007 
19,587 
  
20 February 2007 
1,116 
4 January 2007 
1,638 
  
8 February 2007 
798 
  
21 February 2007 
2,317 
17 January 2007 
819 
  
9 February 2007 
239 
  
22 February 2007 
3,190 
30 January 2007 
4,907 
  
13 February 2007 
4,987 
  
26 February 2007 
819 
31 January 2007 
1,617 
  
14 February 2007 
4,826 
  
28 February 2007 
1,638 
1 February 2007 
1,595 
  
15 February 2007 
28,858 
  
2 March 2007 
1,593 
2 February 2007 
319 
  
16 February 2007 
8,891 
  
15 March 2007 
1,116 
5 February 2007 
239 
  
19 February 2007 
3,035 
  
  
  ** **	  35  
**Item 4.      Submission of Matters to a Vote of Security Holders**

The Annual Meeting of Shareholders of Alcan was held on April 26, 2007. At	the Annual Meeting: 
-  **Election of		Directors**
	 On a vote by ballot,	each of the following 13 nominees were elected as a Director of the Company. 

**Nominee**
**Votes For**
**% Votes For**
**Votes Withheld**
**% Votes Withheld**
Roland Berger 
220,873,035 
99.55 
995,379 
0.45 
L. Denis			Desautels 
210,740,776 
94.98 
11,127,638 
5.02 
Richard B. Evans 
221,578,412 
99.87 
290,002 
0.13 
L. Yves Fortier 
207,681,594 
93.61 
14,186,820 
6.39 
Jeffrey E.			Garten 
221,662,065 
99.91 
206,349 
0.09 
Jean-Paul			Jacamon 
220,802,523 
99.52 
1,065,891 
0.48 
Yves Mansion 
215,644,013 
97.19 
6,224,401 
2.81 
Christine			Morin-Postel 
219,568,101 
98.96 
2,300,313 
1.04 
Heather Munroe-Blum 
221,496,089 
99.83 
372,325 
0.17 
H. Onno Ruding 
221,631,732 
99.89 
236,682 
0.11 
Gerhard			Schulmeyer 
209,909,163 
94.61 
11,959,251 
5.39 
Paul M. Tellier 
221,637,807 
99.90 
230,607 
0.10 
Milton K. Wong 
221,743,136 
99.94 
125,278 
0.06 -  **Appointment of		Auditors**
	 On a vote by ballot,	PricewaterhouseCoopers LLP were appointed as auditors of the Company. 

**Votes For**
**% Votes For**
**Votes Withheld**
**% Votes Withheld**
220,378,630 
99.3 
1,489,784 
0.7 -  **Resolution approving		amendments to Alcan Executive Share Option Plan**
	 On a vote by ballot, the	amendments to the Alcan Executive Share Option Plan were approved. 

**Votes For**
**% Votes For**
**Votes Against**
**% Votes Against**
176,609,377 
83.3 
35,354,212 
16.7 
 

**Item 6.      Exhibits**

	(31.1)           	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under	Securities Exchange Act of 1934.  

	(31.2)           	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under	Securities Exchange Act of 1934.	  

	(32.1)           	Certification of Chief Executive Officer pursuant to Section 906 of the	Sarbanes-Oxley Act of 2002.  

	(32.2)           	Certification of Chief Financial Officer pursuant to Section 906 of the	Sarbanes-Oxley Act of 2002.  
				  36  
 

				SIGNATURE 

				 Pursuant to the requirements of the *Securities Exchange Act				of 1934*, the registrant has duly caused this report to be				signed on its behalf by the undersigned thereunto duly				authorized. 

				                                                                                                                                                                            				 ALCAN INC. 
Dated: 10 May				2007                                                                                                                                  By:				/s/  Cesidio Ricci                                  				

                                                                                           				                                                                              				Cesidio Ricci 

                                                                                                                                                                          				Vice President and Controller 

				                                                                                                                                                                           				 (A				Duly Authorized Officer) 

				 

				 

			  37  
**EXHIBIT INDEX**

Exhibit  

Number                                                                  Description 

 

 (31.1)           Certification of Chief Executive Officer pursuant to Rule 13a-14(a) underSecurities Exchange Act of 1934.  

  

 (31.2)           Certification of Chief Financial Officer pursuant to Rule 13a-14(a) underSecurities Exchange Act of 1934.  

  

 (32.1)           Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-OxleyAct of 2002.  

  

 (32.2)            Certification of ChiefFinancial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 
  38