SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM
	10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2006 Commission file number 1-3677 ALCAN INC. (Exact name of registrant as specified in its charter)  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 (Address
	of Principal Executive Offices and Postal Code)  (514) 848-8000 (Registrant's
	Telephone Number, including Area Code)   Indicate by check mark whether the registrant (1) has filed all reports
	required to be filed by Section 13 or 15(d) of the Securities Exchange Act
	of 1934 during the preceding 12 months (or for such shorter period that the
	registrant was required to file such reports), and (2) has been subject to
	such filing requirements for the past 90 days. Yes XNo
	____ Indicate by check mark
	whether the registrant is a large accelerated filer, an accelerated filer,
	or a non-accelerated filer.  See definition of "accelerated filer and large
	accelerated filer" in Rule 12b-2 of the Exchange Act. Large accelerated filer

	X
	        
	Accelerated filer ____                 Non-accelerated filer  ____ Indicate by check mark whether the registrant is a shell company (as defined
	in Rule 12b-2 of the Exchange Act) Yes    No

	X At August 2, 2006, the registrant had 376,083,800 shares of common stock
	(without nominal or par value) outstanding.


---

PART I. FINANCIAL
	INFORMATION  In
	this report, all dollar amounts are stated in U.S. dollars and all
	quantities in metric tons, or tonnes, unless indicated otherwise.  A tonne
	is 1,000 kilograms, or 2,204.6 pounds.  The word "Company" refers to Alcan
	Inc. and, where applicable, one or more of its consolidated subsidiaries. Item 1. Financial Statements ALCAN INC. INTERIM CONSOLIDATED STATEMENT OF INCOME(unaudited) Second Quarter
			Six MonthsPeriods ended June 30 ended June 30
			2006
			2005
			2006
			2005(in millions of US$, except per
			share amounts)Sales and operating revenues
			6,103
			5,206
			11,653
			10,384Costs and expensesCost of sales and operating expenses,
			excluding depreciationand amortization
			noted below
			4,646
			4,130
			8,774
			8,220Depreciation and amortization
			258
			268
			509
			540Selling, administrative and general
			expenses
			366
			345
			730
			725Research and development expenses
			55
			49
			107
			98Interest
			69
			90
			145
			175Restructuring charges - net (note 6)
			94
			73
			108
			96Other expenses (income) - net (note
			10)
			2
			-
			(29)
			15,490
			4,955
			10,344
			9,855Income from continuing operations
			before income taxes andother items
			613
			251
			1,309
			529Income taxes (note 9)
			195
			70
			464
			168Income from continuing operations
			before other items
			418
			181
			845
			361Equity income
			37
			28
			65
			57Minority interests
			(1)
			(1)
			(2)
			(2)Income from continuing operations
			454
			208
			908
			416Income (Loss) from discontinued
			operations (note 4)
			1
			(17)
			4
			(7)Income before cumulative effect of
			accounting change
			455
			191
			912
			409Cumulative effect of accounting
			change, net of incometaxes of $2 (nil
			in 2005) (note 2)
			-
			-
			(4)
			-Net income
			455
			191
			908
			409Dividends on preference shares
			3
			1
			5
			3Net income attributable to common
			shareholders
			452
			190
			903
			406Earnings (Loss) per share(note 5)Basic:Income from continuing operations
			1.21
			0.56
			2.42
			1.11Income (Loss) from discontinued
			operations
			-
			(0.04)
			0.01
			(0.02)Cumulative effect of accounting
			change
			-
			-
			(0.01)
			-Net income per common share - basic
			1.21
			0.52
			2.42
			1.09Diluted:Income from continuing operations
			1.20
			0.56
			2.41
			1.11Income (Loss) from discontinued
			operations
			-
			(0.04)
			0.01
			(0.02)Cumulative effect of accounting
			change
			-
			-
			(0.01)
			-Net income per common share - diluted
			1.20
			0.52
			2.41
			1.09Dividends per common share
			0.15
			0.30
			0.30
			0.45  The
	accompanying notes are an integral part of the interim financial statements. -2-  ALCAN INC.  INTERIM CONSOLIDATED BALANCE SHEET(unaudited) June 30,
			2006
			December 31,
			2005(in millions of US$)ASSETSCurrent assetsCash and time deposits
			182
			181Trade receivables (net of allowances
			of $58 in 2006 and $56 in 2005)
			3,118
			2,308Other receivables
			1,290
			946Deferred income taxes
			177
			150Inventories (note 11)
			2,953
			2,734Current assets held for sale (note 4)
			15
			119Total current assets
			7,735
			6,438Deferred charges and other assets
			1,375
			1,052Investments
			1,541
			1,511Deferred income taxes
			850
			863Property, plant and equipmentCost (excluding
			Construction work in progress)
			17,433
			16,990Construction work
			in progress
			2,268
			1,604Accumulated
			depreciation
			(8,142)
			(7,561)11,559
			11,033Intangible assets (net of accumulated
			amortization of $292 in 2006and $233 in 2005)
			996
			1,013Goodwill
			4,636
			4,713Long-term assets held for sale (note
			4)
			2
			15Total assets
			28,694
			26,638 The
	accompanying notes are an integral part of the interim financial statements. -3-  ALCAN INC.  INTERIM CONSOLIDATED BALANCE SHEET(cont'd)(unaudited) June 30,
			2006
			December 31,
			2005(in millions of US$)LIABILITIES AND SHAREHOLDERS'
			EQUITYCurrent liabilitiesPayables and accrued liabilities (note
			12)
			5,217
			4,608Short-term borrowings
			349
			348Debt maturing within one year
			105
			802Deferred income taxes
			32
			25Current liabilities of operations
			held for sale (note 4)
			11
			62Total current liabilities
			5,714
			5,845Debt not maturing within one year
			5,570
			5,265Deferred credits and other
			liabilities
			2,052
			1,608Post-retirement benefits
			3,157
			3,037Deferred income taxes
			1,226
			1,172Minority interests
			65
			67Shareholders' equityRedeemable non-retractable preference
			shares
			160
			160Common shareholders' equityCommon shares
			6,377
			6,181Additional paid-in
			capital
			671
			683Retained earnings
			3,842
			3,048Common shares held
			by a subsidiary
			(31)
			(31)Accumulated other
			comprehensive loss (note 14)
			(109)
			(397)10,750
			9,48410,910
			9,644Commitments and contingencies (note
			13)Total liabilities and shareholders'
			equity
			28,694
			26,638 The
	accompanying notes are an integral part of the interim financial statements. -4-  ALCAN INC.  INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS(unaudited) Second Quarter
			Six MonthsPeriods ended June 30
			2006
			2005
			2006
			2005(in millions of US$)OPERATING ACTIVITIESNet income
			455
			191
			908
			409Cumulative
			effect of accounting change
			-
			-
			4
			-Loss (Income) from discontinued
			operations
			(1)
			17
			(4)
			7Income from continuing operations
			454
			208
			908
			416Adjustments to determine cash from
			operating activities:Depreciation and
			amortization
			258
			268
			509
			540Deferred income
			taxes
			83
			(13)
			227
			42Equity income, net
			of dividends
			(2)
			3
			(18)
			(24)Asset impairment
			charges
			36
			27
			45
			35Loss (Gain) on
			disposal of businesses and investments - net
			(4)
			17
			(4)
			16Stock option
			compensation
			11
			5
			36
			10Change in
			operating working capitalChange in
			receivables
			(217)
			(157)
			(756)
			(575)Change in
			inventories
			(31)
			(128)
			(109)
			(114)Change in payables
			and accrued liabilities
			110
			(47)
			130
			(319)Change in deferred
			charges, other assets, deferred creditsand
			other liabilities, and post-retirement benefits - net
			75
			43
			167
			150Other -
			net
			(2)
			(37)
			(2)
			(85)Cash from operating activities in
			continuing operations
			771
			189
			1,133
			92Cash from (used for) operating
			activities in discontinuedoperations
			8
			(18)
			8
			50Cash from operating activities
			779
			171
			1,141
			142FINANCING ACTIVITIESProceeds from issuance of new debt -
			net of issuance costs
			354
			780
			371
			1,216Debt repayments
			(770)
			(610)
			(836)
			(1,246)Short-term borrowings - net
			36
			29
			-
			(1,993)Common shares issued
			82
			6
			149
			10Dividends - Alcan
			shareholders (including preference)
			(59)
			(57)
			(117)
			(115)- Minority
			interests
			-
			(1)
			(1)
			(1)Cash from (used for) financing
			activities in continuing operations
			(357)
			147
			(434)
			(2,129)Cash from financing activities in
			discontinuedoperations
			-
			41
			-
			4Cash from (used for) financing
			activities
			(357)
			188
			(434)
			(2,125)  The accompanying notes are
	an integral part of the interim financial statements. -5-   ALCAN INC.  INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS(cont'd)(unaudited) Second Quarter
			Six MonthsPeriods ended June 30
			2006
			2005
			2006
			2005(in millions of US$)INVESTMENT ACTIVITIESPurchase of property, plant and
			equipment
			(469)
			(441)
			(895)
			(698)Business acquisitions and purchase of
			investments, net ofcash and time
			deposits acquired
			(2)
			(42)
			(40)
			(42)Net proceeds from disposal of
			businesses, investments andother assets
			9
			31
			207
			35Settlement of amounts due from
			Novelis - net
			-
			-
			-
			2,535Other
			12
			-
			12
			-Cash from (used for) investment
			activities in continuingoperations
			(450)
			(452)
			(716)
			1,830Cash from investment activities in
			discontinuedoperations
			5
			121
			5
			64Cash from (used for) investment
			activities
			(445)
			(331)
			(711)
			1,894Effect of exchange rate changes on
			cash and time deposits
			2
			(11)
			5
			(29)Increase (Decrease) in cash and time
			deposits
			(21)
			17
			1
			(118)Cash and time deposits - beginning of
			period
			203
			205
			181
			340Cash and time deposits - end of
			period
			182
			222
			182
			222  The
	accompanying notes are an integral part of the interim financial statements. -6-   ALCAN INC. NOTES TO THE INTERIM CONSOLIDATED FINANCIAL
	STATEMENTS June 30, 2006 (unaudited) (in millions of US$, except per share
	amounts)  1.      ACCOUNTING
	POLICIES Basis of Presentation The unaudited interim consolidated financial statements are
	based upon accounting policies and methods of their application consistent
	with those used and described in the Company's annual financial statements
	as contained in the most recent annual report.  The interim financial
	statements do not include all of the financial statement disclosures
	included in the annual financial statements prepared in accordance with
	accounting principles generally accepted in the United States of America
	(U.S. GAAP) and therefore should be read in conjunction with the Company's
	most recent annual report. In the opinion of management of the Company, the unaudited
	interim consolidated financial statements reflect all adjustments, which
	consist only of normal and recurring adjustments, necessary to present
	fairly the financial position and the results of operations and cash flows
	in accordance with U.S. GAAP.  The results reported in these interim
	consolidated financial statements are not necessarily indicative of the
	results that may be expected for the entire year.  2.    
	ACCOUNTING CHANGES SFAS No. 123(R) -
	Share-Based Payment On January 1, 2006, the
	Company adopted Statement of Financial Accounting Standards (SFAS) No.
	123(R), Share-Based Payment, which is a revision to SFAS No. 123, Accounting
	for Stock-Based Compensation.  SFAS No. 123(R) requires all share-based
	payments to employees to be recognized in the financial statements based on
	their fair values.  The fair value of options granted after January 1, 2006
	is determined using a lattice model, whereas the fair value of options
	granted prior to that date was determined using the Black-Scholes valuation
	model.  The Company had previously adopted the fair-value based method of
	accounting for stock options using the retroactive restatement method
	described in SFAS No. 148, Accounting for Stock-Based Compensation -
	Transition and Disclosure, effective January 1, 2004.  This method is
	accepted under SFAS No. 123(R). On January 1, 2006, the
	Company recorded an after-tax charge of $4, using the modified prospective
	application method, in Cumulative effect of accounting change, to record all
	outstanding liability awards, previously measured at their intrinsic value,
	at their fair value.  See note 8 - Stock Options and Other Stock-Based
	Compensation. SFAS No. 151 - Inventory
	Costs On January 1, 2006, the
	Company adopted the provisions of SFAS No. 151, Inventory Costs, on a
	prospective basis.  This statement amends the guidance in Accounting
	Research Bulletin (ARB) No. 43, Chapter 4, "Inventory Pricing", to clarify
	the accounting for abnormal amounts of idle facility expense, freight,
	handling costs, and wasted material (spoilage).  ARB 43 previously stated
	that these expenses may be so abnormal as to require treatment as current
	period charges.  SFAS No. 151 requires that those items be recognized as
	current-period charges regardless of whether they meet the criterion of "so
	abnormal".  In addition, SFAS No. 151 requires that allocation of fixed
	production overheads to the costs of conversion be based on the normal
	capacity of the production facilities.  The adoption of this standard did
	not impact the Company's financial statements. -7-  2.    
	ACCOUNTING CHANGES(cont'd) SFAS No. 154 - Accounting Changes and Error Corrections On January 1,
	2006, the Company adopted the provisions of SFAS No. 154, Accounting Changes
	and Error Corrections, a replacement of APB Opinion No. 20 and FASB
	Statement No. 3.  This statement applies to all voluntary changes in
	accounting principle and changes the requirements for accounting for and
	reporting of a change in accounting principle.  The statement requires
	retrospective application to prior periods' financial statements of a
	voluntary change in accounting principle versus including the cumulative
	effect of changing to the new accounting principle in net income.  SFAS No.
	154 carries forward many provisions of APB Opinion No. 20 without change,
	including the provisions related to the reporting of a change in accounting
	estimate, a change in the reporting entity, and the correction of an error. 
	The adoption of this standard did not impact the Company's financial
	statements.  3.    RECENTLY ISSUED
	ACCOUNTING STANDARDS SFAS No. 156 - Accounting for Servicing of
	Financial Assets In March 2006, the Financial Accounting Standards Board (FASB)
	issued SFAS No. 156, Accounting for Servicing of Financial Assets.  The new
	standard, which is an amendment to SFAS No. 140, requires that all
	separately recognized servicing assets and servicing liabilities be
	initially measured at fair value, if practicable and permits, but does not
	require, the subsequent measurement of separately recognized servicing
	assets and servicing liabilities at fair value.  If an entity uses
	derivative instruments to mitigate the risks inherent in servicing assets
	and servicing liabilities, it can simplify its accounting since SFAS No. 156
	permits income statement recognition of the potential offsetting changes in
	fair value of those servicing assets and servicing liabilities and
	derivative instruments in the same accounting period.  SFAS No. 156 is
	effective for all separately recognized servicing assets and liabilities
	acquired or issued after the beginning of an entity's fiscal year that
	begins after September 15, 2006.  The Company does not anticipate that its
	financial statements will be significantly impacted by this statement. FIN 48 - Accounting for Uncertainty in Income Taxes In June 2006, the FASB issued Interpretation No. 48,
	Accounting for Uncertainty in Income Taxes - an interpretation of FASB
	Statement No. 109 (FIN 48).  This interpretation prescribes a more likely
	than not recognition threshold and a measurement attribute for the financial
	statement recognition and measurement of a tax position taken or expected to
	be taken in a tax return.  FIN 48 also provides guidance on derecognition of
	a tax position, classification of a liability for unrecognized tax benefits,
	accounting for interest and penalties, accounting in interim periods, and
	expanded income tax disclosures.  FIN 48 is effective for fiscal years
	beginning after December 15, 2006.  The Company is currently evaluating the
	impact of this interpretation on its financial statements.  4.     DISCONTINUED
	OPERATIONS AND ASSETS HELD FOR SALE Bauxite and Alumina and Primary Metal On December 29, 2004, the Company announced that, following
	an extensive evaluation of the Company's operations subsequent to the
	Pechiney acquisition, it had entered into a binding agreement for the sale
	of its controlling interest in Aluminium de Grèce S.A. (AdG), as well as the
	transfer of certain related contracts, to Mytilineos Holdings S.A. of
	Greece.  The Company classified this business in discontinued operations and
	assets held for sale during the fourth quarter of 2004. The Company owned
	approximately 13 million shares in AdG, representing a 60.2% equity
	interest.  The transaction was completed on March 15, 2005 at a value of
	$104.  Under the terms of this agreement, Mytilineos Holdings S.A. and
	certain affiliated companies acquired from the Company a 53% equity position
	in AdG.  On March 31, 2006, the balance of the Company's interest in AdG of
	7.2% was sold by the Company to Mytilineos Holdings S.A. for net proceeds of
	$13. -8-   4.     DISCONTINUED
	OPERATIONS AND ASSETS HELD FOR SALE(cont'd) Primary Metal On June 1, 2005, the Company completed the sale of Pechiney
	Électrométallurgie to Ferroatlántica, S.L. of Spain for net proceeds of
	$150.  The Company classified this business in discontinued operations and
	assets held for sale during the fourth quarter of 2004.  The Company's
	decision to sell this business was based on an extensive evaluation of the
	Company's operations subsequent to the Pechiney acquisition and is
	consistent with the Company's strategy of divesting non-core activities. Engineered Products In the first quarter of 2004, the Company committed to a plan
	to sell certain non-strategic assets that were not part of its core
	operations.  The assets were used to supply castings and components to the
	automotive industry.  On March 31, 2006, the Company sold these assets to
	AluCast GmbH for net proceeds of approximately nil. Also in the fourth quarter of 2004, the Company committed to
	a plan to sell its service centres in France that were not part of its core
	operations.  These assets were classified as held for sale and were included
	in discontinued operations.  On April 20, 2005, the Company completed the
	sale of these service centres for net proceeds of $4 to Amari Metal France Ltd.,
	which specializes in distributing aluminum, stainless steel and cuprous
	metal products. Other In the fourth quarter of 2005, a decision was taken to close
	the Company's copper trading business.  The closure was substantially
	completed by the end of 2005. Fair values were determined based on either discounted cash
	flows or expected selling price.  Certain financial information has been
	reclassified in the prior periods to present these businesses as
	discontinued operations on the statement of income, as assets held for sale
	and liabilities of operations held for sale on the balance sheet and as cash
	flows from (used for) discontinued operations on the statement of cash
	flows. Selected financial information for the businesses included in discontinued
	operations is reported below:  Second Quarter
			Six MonthsPeriods ended June 30
			2006
			2005
			2006
			2005Sales
			-
			78
			55
			276Income (Loss) from operations
			-
			4
			(1)
			8Gain
			(Loss) on disposal - net
			-
			(19)
			1
			(10)Pre-tax loss
			-
			(15)
			-
			(2)Income tax recovery (expense)
			1
			(2)
			4
			(5)Income (Loss) from discontinued operations
			1
			(17)
			4
			(7)  -9-  4.    
	DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE(cont'd)  The major classes of Assets held for sale and Liabilities of operations held
	for sale are as follows: June 30,
			2006
			December 31,
			2005Current assets held for sale:Trade receivables
			8
			30Other receivables
			4
			51Deferred income
			taxes
			3
			2Inventories
			-
			3615
			119Long-term assets held for sale:Deferred charges
			and other assets
			-
			13Property, plant
			and equipment - net
			2
			22
			15Current liabilities of operations held for sale:Payables and
			accrued liabilities
			11
			6211
			62  5.     EARNINGS PER SHARE-BASIC AND DILUTED Basic and diluted earnings per share are based on the weighted average
	number of shares outstanding during the period.  The treasury stock method
	for calculating the dilutive impact of stock options is used. The following
	table outlines the calculation of basic and diluted earnings per share on
	income from continuing operations.  Second Quarter
			Six MonthsPeriods ended June 30
			2006
			2005
			2006
			2005Numerator:Income from continuing operations
			454
			208
			908
			416Less:
			dividends on preference shares
			(3)
			(1)
			(5)
			(3)Income from continuing operations attributable tocommon shareholders
			451
			207
			903
			413Denominator (number of common shares in millions):Weighted average of outstanding shares - basic
			375
			370
			374
			370Effect of dilutive stock options
			2
			-
			2
			1Adjusted weighted average of outstanding shares - diluted
			377
			370
			376
			371Earnings per common share - basic
			1.21
			0.56
			2.42
			1.11Earnings per common share - diluted
			1.20
			0.56
			2.41
			1.11   In
	the second quarter and six months ended June 30, 2006, options to purchase
	402,561 common shares (2005: 7,863,990 and 4,739,354) at a weighted average
	grant price of CAN$56.34 per share (2005: CAN$46.57 and CAN$50.16) were
	outstanding during the period but 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 June 30, 2006, there
	were 376,070,782 (2005: 370,234,793) common shares outstanding. -10-   6.    RESTRUCTURING PROGRAMS Q2 2006 Restructuring
	Activities On May 9, 2006, the Company announced the reorganization of
	its global specialty aluminas business (Bauxite and Alumina), entailing the
	gradual, yet permanent shut-down of the Company's Specialty-Calcined Alumina
	plant ("UPCA") in Jonquière, Quebec, by year end.  In relation to this
	activity, the Company recorded restructuring charges of $12 comprising $1 of
	severance costs and $11 of asset impairment charges during the second
	quarter of 2006.  The Company expects to incur additional charges of $2
	related to site remediation costs in the first quarter of 2007. On July 12, 2006, the Company announced that it has 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 (Primary Metal).  In relation to this activity, the
	Company recorded restructuring charges of $44 comprising $14 of severance
	costs, $7 of other costs and $23 of asset impairment charges during the
	second quarter of 2006, as they met the criteria for recognition during the
	period.  No further
	charges are expected to be incurred. Also on July 12, 2006, the Company announced that it has
	begun consultations with unions and employee representatives for a proposed
	closure of two U.K. sites.  The proposed reorganization would result in the
	closure of the Workington, U.K. hard alloy extrusion plant (Engineered
	Products) and the closure of the Midsomer Norton, U.K. food flexibles
	packaging plant (Packaging). In relation to the Workington closure, the Company recorded
	restructuring charges of $9 comprised entirely of severance costs during the
	second quarter of 2006, as they met the criteria for recognition during the
	period.  Production
	from Workington would be consolidated at Alcan's facilities in Issoire and
	Montreuil-Juigné, France.  Workington is expected to cease production by the
	end of the second quarter of 2007.  The Company expects to incur additional
	charges of $1 in the second half of 2006 and $9 in 2007 related to this
	activity. In relation to the Midsomer Norton closure, the Company
	recorded restructuring charges of $17 comprising $16 of severance costs and
	$1 of asset impairment charges during the second quarter of 2006, as they
	met the criteria for recognition during the period.  The plant has been adversely affected by a
	declining demand in the U.K. market and high raw material costs.  The site
	is expected to close by the end of 2006.  The Company expects to incur
	additional charges of $3 in the second half of 2006 and $4 in 2007 related
	to this activity. In
	addition, the Company also recorded severance costs of $2 during the second
	quarter of 2006 related to the closure of Alcan Packaging Mohammedia's
	cookware activity. 2005 Restructuring
	Activities As part of the
	continuing drive to reshape its portfolio, counter increasing competitive
	pressures in Western countries and improve margins, the Packaging Group is
	pursuing plans to restructure certain businesses, notably Global Beauty
	Packaging and Food Packaging Europe.  A restructuring charge of $485 (Q1:
	$11; Q2: $31; Q3: $37; Q4: $406) was taken in 2005 to reflect the ongoing
	implementation of this strategy.  This charge is comprised of severance
	costs of $94 (Q1: nil; Q2: $26; Q3: $7; Q4: $61), asset impairment charges
	of $331 (Q1: $7; Q2: $(2); Q3: $17; Q4: $309) and other charges of $60 (Q1:
	$4; Q2: $7; Q3: $13; Q4: $36).  In addition to these restructuring charges,
	other costs of $2 (Q1: nil; Q2: nil; Q3: nil; Q4: $2) were recorded in Cost
	of sales and operating expenses.  In the first quarter of 2006, the Company
	incurred an additional $9 of restructuring charges.  This charge is
	comprised of severance costs of $2, asset impairment charges of $5 and other
	charges of $2.  In the second quarter of 2006, the Company incurred an
	additional $8 of restructuring charges.  These charges are comprised of
	severance costs of $5 and other charges of $3.  The Company expects to incur
	an additional $29 of charges related to the activities initiated and
	approved as of December 31, 2005, and these restructurings should be
	completed during the first half of 2007. -11-   6.     RESTRUCTURING PROGRAMS (cont'd) During the first quarter of 2006, the Company closed its
	Vernon, California, aluminum cast plate facility (Engineered Products) as a
	result of competitive pressures in a challenging economic environment.  In
	the second quarter of 2006, the Company incurred additional other
	restructuring charges of $1 related to this activity.  No further charges
	are expected to be incurred in connection with the Vernon closure.  In
	addition to the Vernon closure, Engineered Products underwent continued
	restructuring in 2005.  The Company recorded restructuring charges of $17
	related to these activities consisting of severance costs of $13 and asset
	impairment charges of $4.  In addition to these restructuring charges, $14
	of additional pension costs related to the Vernon closure, and $4 of
	additional environmental costs related to other restructurings, were
	recorded in Cost of sales and operating expenses in the fourth quarter of
	2005. In the fourth quarter of 2005, the Company recorded
	restructuring charges of $115 related to the closure of its aluminum smelter
	in Lannemezan, France, and its Steg primary aluminum smelter in Switzerland
	(Primary Metal) due to escalating energy costs.  The closure process for
	Lannemezan began in June 2006 and is expected to be completed, at the
	latest, during the course of 2008.  The closure of Steg was completed in
	April 2006.  These charges were comprised of severance costs of $43, asset
	impairment charges of $61, and other charges of $11.  No further charges are
	expected to be incurred in connection with these closures. On September 14, 2005, the Company announced that its
	subsidiary, Société Générale de Recherches et d'Exploitations Minières (Sogerem)
	(Bauxite and Alumina), 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.  In
	relation to this activity, the Company recorded restructuring charges of $9
	comprising $6 of severance costs, $2 of other costs and $1 of asset
	impairment charges during the third quarter of 2005.  In addition to the $9
	of restructuring charges, $5 relating principally to additional asset
	retirement obligations were recorded, as a result of this activity, in Cost
	of sales and operating expenses.  In the first quarter of 2006, the Company
	incurred additional other restructuring charges of $2.  No further charges
	are expected to be incurred. In the second
	quarter of 2005, the Company announced the restructuring of its Engineered
	Products facilities in Singen, Germany, and Sierre, Switzerland, in order to
	improve efficiency and ensure their long-term viability.  Alcan will
	integrate its extrusion activities at the Singen and Sierre sites and
	restructure the automotive structures and composites into its operations at
	Singen.  The Company incurred $30 (Q1: $1; Q2: $27; Q3: nil; Q4: $2) of
	severance charges.  This restructuring is expected to be completed by the
	end of 2006. In 2005, the Company incurred $5 (Q1: nil; Q2: $14; Q3: nil;
	Q4: $(9)), mostly related to severance costs, in connection with the exit
	from the Mercus and Froges high-purity-metal processing operations in France
	(Engineered Products), which occurred during the first quarter of 2006. In 2005, the Company recorded other restructuring charges of
	$9 (Q1: $3; Q2: $2; Q3: $1; Q4: $3) consisting of severance costs of $6 (Q1:
	$1; Q2: $3; Q3: nil; Q4: $2) relating principally to additional Pechiney
	involuntary termination costs in Primary Metal and the closure of a Balsa
	composites plant in Guayaquil, Ecuador (Engineered Products), asset
	impairment charges of $2 (Q1: $2; Q2: nil; Q3: nil; Q4: nil) related to a
	Pechiney facility in China (Engineered Products) and other costs of $1 (Q1:
	nil; Q2: nil; Q3: nil; Q4: $1) in Primary Metal.  In the first quarter of
	2006, the Company incurred additional severance charges of $1 in Primary
	Metal. -12-  6.    
	RESTRUCTURING PROGRAMS(cont'd) 2004 Restructuring Activities In line with the Company's
	objective of value maximization, the Company undertook various restructuring
	initiatives in 2004. Pechiney In 2004, the Company recorded liabilities of $193 for
	restructuring costs in connection with the exit of certain operations of
	Pechiney, and these costs were recorded in the allocation of the purchase
	price.  These costs relate principally to severance costs of $121 related to
	the involuntary termination of Pechiney employees in France (Primary Metal,
	Engineered Products, Packaging and Other), as well as other severance costs
	of $54, principally comprising $21 relating to a plant closure in Barcelona,
	Spain (Packaging), $17 relating to a planned plant closure in Flemalle,
	Belgium (Entities transferred to Novelis), $5 relating to a plant closure in
	Garbagnate, Italy (Packaging), and $1 relating to the downsizing of a plant
	in Kolin, Czech Republic (Packaging).  A restructuring provision of $21
	related to the plant closure in Flemalle was transferred to Novelis in 2005
	following the spin-off. Other 2004 restructuring
	activities In the third quarter of 2004, the Company incurred
	restructuring charges of $19 relating to the consolidation of its U.K.
	aluminum sheet rolling activities in Rogerstone, Wales, in order to improve
	competitiveness through better capacity utilization and economies of scale. 
	Production ceased at the rolling mill in Falkirk, Scotland, in December
	2004.  The charges include $6 of severance costs, $8 of asset impairment
	charges, $2 of pension costs, $3 of decommissioning, environmental costs and
	other charges.  These entities and the related restructuring provision of $5
	were transferred to Novelis in 2005 following the spin-off. In 2004, the Company incurred restructuring charges of $7
	relating to the closure of two corporate offices in the U.K. and Germany
	(Other).  The charges include $4 related to severance costs and $3 related
	to lease exit costs and costs to consolidate facilities.  In 2005, the
	Company incurred additional severance and exit costs of $2 (Q1: $3; Q2:
	$(3); Q3: nil; Q4: $2) in relation to the closure of its corporate office in
	the U.K.  The restructuring provision of $3 related to the closure of the
	corporate office in Germany was transferred to Novelis in 2005 following the
	spin-off. In November 2004, the
	Company announced the downsizing of its Alcan Mass Transportation Systems
	business unit in Zurich, Switzerland (Engineered Products), as a result of
	changing market conditions and business realities.  In the fourth quarter of
	2004, the Company incurred restructuring charges of $5 consisting of $4 of
	asset impairment charges, and $1 of other charges.  In 2005, the Company
	incurred additional severance charges of $4 (Q1: $2; Q2: $1; Q3: $1; Q4:
	nil), asset impairment charges of $1 (Q1: $1; Q2: nil; Q3: nil; Q4: nil) and
	other costs of $3 (Q1: nil; Q2: nil; Q3: nil; Q4: $3) relating to the
	downsizing of this business. 
	In addition, the Engineered
	Products group incurred restructuring charges of $9 in 2004 relating to both
	the closure of a composites facility in the U.S., and process reengineering
	at certain facilities in Switzerland and Germany.  The 2004 charges
	consisted of severance costs of $6, asset impairment charges of $2 and other
	costs of $1. In 2004, the Company
	incurred restructuring charges of $39 relating to exit costs incurred in
	connection with certain non-strategic packaging facilities located in the
	U.S. and France.  These charges consist of severance costs of $23, asset
	impairment charges of $11 and other charges of $5. In early 2004, the
	Company permanently halted production at its Jonquière Söderberg primary
	aluminum facility in Saguenay, Quebec (Primary Metal).  As a result, the
	Company recorded charges of $14 in 2004 comprising $5 of severance costs, $5
	of asset impairment charges, and $4 of other costs.  In 2005, the Company
	incurred additional restructuring charges of $5 (Q1: $1; Q2: nil; Q3: nil;
	Q4: $4) consisting of severance costs of $3 (Q1: nil; Q2: nil; Q3: nil; Q4:
	$3) and other costs of $2 (Q1: $1; Q2: nil; Q3: nil; Q4: $1).  In the first
	quarter of 2006, the Company incurred additional other restructuring charges
	of $1. -13-   6.
	    RESTRUCTURING PROGRAMS(cont'd) The
	schedule provided below shows details of the provision balances and related
	cash payments for the significant restructuring activities: Severance Costs
			Asset Impairment Charges*
			Other
			TotalProvision balance as at January 1, 2005
			200
			-
			46
			2462005:Provisions transferred to
			Novelis
			(31)
			-
			(14)
			(45)Charges recorded in the
			statement of income
			204
			400
			81
			685Cash payments - net
			(118)
			-
			(40)
			(158)Non-cash items
			(12)
			(400)
			(16)
			(428)Provision balance as at December 31, 2005
			243
			-
			57
			300Six months, 2006:Charges recorded in the
			statement of income
			52
			40
			16
			108Cash payments-
			net
			(83)
			-
			(17)
			(100)Non-cash items
			10
			(40)
			2
			(28)Provision balance as at
			June 30, 2006
			222
			-
			58
			280  * Fair value of assets was determined using
	discounted future cash flows. The schedule below shows details of the charges by operating segment: Charges recorded in the statement of income in Other expenses (income) -
	net  Quarter ended June 30, 2006
			Severance Costs
			Asset Impairment Provisions
			Other
			TotalBauxite and Alumina
			1
			11
			-
			12Primary Metal
			14
			23
			7
			44Engineered Products
			9
			-
			1
			10Packaging
			23
			1
			3
			27Other
			1
			-
			-
			1Total
			48
			35
			11
			94Six months ended June 30, 2006Bauxite and Alumina
			1
			11
			2
			14Primary Metal
			15
			23
			8
			46Engineered Products
			10
			-
			1
			11Packaging
			25
			6
			5
			36Other
			1
			-
			-
			1Total
			52
			40
			16
			108  For the second quarter and six months ended June 30, 2006, $52 and $63,
	respectively (2005: $43 and $59) 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 major
	corporate-wide acquisitions or initiatives.  See note 7 - Information by
	Operating Segment. -14-  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 group comprises
	Alcan's worldwide activities related to bauxite mining and refining into
	smelter-grade and specialty aluminas, owning and/or operating six bauxite
	mines and deposits in five countries, five smelter-grade alumina plants in
	four countries and six specialty alumina plants in three countries.  This
	group also comprises sales of technology and technical assistance and a
	bauxite and alumina trading business. Primary
	Metal Also headquartered in Montreal, this group comprises smelting
	operations, power generation, production of primary value-added ingot,
	manufacturing of smelter anodes and cathodes, as well as aluminum fluoride,
	smelter technology and equipment sales, engineering services and trading
	operations for aluminum, operating or having interests in 21 smelters in
	10 countries.  The Company has relocated the operational headquarters of its
	European primary aluminum business to Voreppe, France. Engineered Products Headquartered in Paris, France, this group produces extruded,
	rolled and cast aluminum products, engineered shaped products and
	structures, including cable, wire and rod, as well as composite materials
	such as aluminum-plastic, fibre reinforced plastic and foam-plastic in 49
	plants located in 12 countries.   Also included in Engineered Products are
	33 service centres in 11 countries offering technical assistance, cutting,
	shaping, machining and assembling for smaller customers, and 32 offices in
	28 countries that sell and source specialty products and materials for
	industrial applications in 65 countries. -15-  7.     INFORMATION BY OPERATING SEGMENT(cont'd) Packaging Also headquartered in Paris, this group consists of the
	Company's worldwide food, pharmaceutical and medical, beauty and personal
	care and tobacco packaging businesses, operating 145 plants in
	30 countries.  This group produces packaging from a number of different
	materials, including plastic, aluminum, paper, paperboard, glass and steel. 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.  Second Quarter
			Six MonthsPeriods ended June 30
			2006
			2005
			2006
			2005Sales and operating revenues - IntersegmentBauxite and Alumina
			460
			418
			930
			775Primary Metal
			656
			539
			1,227
			994Engineered Products
			50
			54
			94
			168Packaging
			1
			-
			1
			2Other
			(1,167)
			(1,011)
			(2,252)
			(1,939)-
			-
			-
			-   Second Quarter
			Six MonthsPeriods ended June 30
			2006
			2005
			2006
			2005Sales and operating revenues - Third PartiesBauxite and Alumina
			482
			369
			795
			742Primary Metal
			2,260
			1,679
			4,271
			3,335Engineered Products
			1,868
			1,589
			3,547
			3,149Packaging
			1,511
			1,578
			3,012
			3,162Adjustments for equity-accounted joint ventures andcertain investments
			(25)
			(21)
			11
			(30)Other
			7
			12
			17
			266,103
			5,206
			11,653
			10,384  Second Quarter
			Six MonthsPeriods ended June 30
			2006
			2005
			2006
			2005Business Group Profit (BGP)Bauxite and Alumina
			126
			111
			255
			208Primary Metal
			774
			425
			1,532
			856Engineered Products
			144
			101
			298
			216Packaging
			134
			177
			280
			333Adjustments for equity-accounted joint ventures andcertain investments
			(86)
			(77)
			(157)
			(151)Adjustments for mark-to-market of derivatives
			7
			33
			21
			30Depreciation and amortization
			(258)
			(268)
			(509)
			(540)Intersegment, corporate offices and other
			(159)
			(161)
			(266)
			(248)Equity income
			37
			28
			65
			57Interest
			(69)
			(90)
			(145)
			(175)Income taxes
			(195)
			(70)
			(464)
			(168)Minority interests
			(1)
			(1)
			(2)
			(2)Income from continuing operations
			454
			208
			908
			416 -16-   7.    
	INFORMATION BY OPERATING SEGMENT(cont'd) Risk
	Concentration The
	Company's consolidated sales and operating revenues for the second quarter
	and six months ended June 30, 2006, include $724 and $1,347, respectively
	(2005: $548 and $1,145) arising from transactions with one customer. These
	sales and operating revenues, principally made by the Primary Metal Group,
	represent 12% (2005: 11%) of consolidated sales and operating revenues for
	both the second quarter and six months ended June 30, 2006.  8.     STOCK OPTIONS AND OTHER STOCK-BASED COMPENSATION Alcan
	Executive Share Option Plan Under the Alcan
	Executive Share Option Plan, certain key employees may purchase common
	shares at an exercise price that is based on the market value of the shares
	on the date of the grant of each option.  These common shares are issued
	from treasury.  Options
	granted beginning in 1998
	vest (not less than three months after the grant date) in respect of
	one-third of the grant when the market value of the share has increased by
	20% over the exercise price, two-thirds of the grant when the market value
	of the share has increased by 40%, and the entire amount of the grant when
	the market value of the share has increased by 60%.  The market value must
	exceed these thresholds for at least 21 consecutive trading days.  All
	options that do not attain the thresholds above vest nine years after the
	grant date.  All options expire ten years after the grant date.  In the
	event of death or retirement, any remainder of this ten-year period in
	excess of five years is reduced to five years, and the said thresholds are
	waived.  Options granted before 1998 vest generally over a fixed period of
	four years from the grant date and expire at various dates during the next
	ten years.  Upon consummation of the combination with Alusuisse Group Ltd. on
	October 17, 2000, all options granted prior to the consummation were
	vested.  In respect of certain options granted to certain senior executives
	in 1996, 1997 and 1998, the Company granted further options which become
	effective upon the exercise of the associated options and upon the executive
	placing at least one-half of the common shares resulting from the exercise
	of these options in trust with an agency named by the Company, for a minimum
	period of five years.  The exercise price of these options is based on the
	market value of the common shares on the exercise date of the associated
	options.  These options are exercisable in the same manner, and will also
	terminate on the same date, as the associated options.  The vesting
	provisions of these options are identical to those of the associated
	options. On January 6,
	2005, Alcan Executive Share Options to purchase 1,368,686 shares, granted to
	Novelis employees who were Alcan employees immediately prior to the
	spin-off, were cancelled. As a result of
	the spin-off of Novelis, Alcan Executive Share Options held prior to the
	spin-off of Novelis were converted to new options, the number and exercise
	prices of which were based on the trading prices of Alcan shares immediately
	before and immediately after the effective date of the spin-off to preserve
	the economic value of the option grants.  This amounted to a conversion
	ratio of one share under the original grants to 1.1404 shares under the new
	options and the exercise price per option was reduced accordingly. Changes
	in the number of shares under options as well as the average exercise price
	are summarized below:  Number of Shares Under Options
			(in thousands)
			Weighted Average Exercise Price
			(CAN$)Outstanding - January 1,
			2006
			11,295
			43.40Granted
			167
			49.59Exercised
			(2,839)
			39.28Forfeited
			(35)
			46.51Outstanding - June 30, 2006
			8,588
			44.87Exercisable - June 30, 2006
			3,536
			40.74 -17-   8.      STOCK OPTIONS
	AND OTHER STOCK-BASED COMPENSATION(cont'd) Shares under Options Outstanding at June 30, 2006 NUMBER OF SHARES
			UNDER OPTIONS(IN THOUSANDS)
			RANGE OF EXERCISE
			PRICE(CAN$)
			WEIGHTED AVERAGE
			EXERCISE PRICE (CAN$)
			WEIGHTED AVERAGE
			REMAINING CONTRACTUAL LIFE (YEARS)514
			30.43-35.00
			33.81
			5.302,386
			35.01-40.00
			38.34
			8.681,000
			40.01-45.00
			40.93
			3.911,454
			45.01-50.00
			46.62
			7.223,234
			50.01-56.34
			51.87
			6.988,588
			30.43-56.34
			44.87
			7.04  Shares under Options Exercisable and Fully Vested at June 30, 2006 NUMBER OF SHARES
			UNDER OPTIONS(IN THOUSANDS)
			RANGE OF EXERCISE
			PRICE(CAN$)
			WEIGHTED AVERAGE
			EXERCISE PRICE (CAN$)
			WEIGHTED AVERAGE
			REMAINING CONTRACTUAL LIFE (YEARS)514
			30.43-35.00
			33.81
			5.301,467
			35.01-40.00
			38.40
			8.36696
			40.01-45.00
			40.99
			3.51476
			45.01-50.00
			46.32
			6.31383
			50.01-56.34
			51.59
			4.443,536
			30.43-56.34
			40.74
			6.26 At June
	30, 2006, the Company had 20,756,203 shares reserved for issue under the
	Alcan Executive Share Option Plan. The total intrinsic value of the Alcan Executive Share Options exercised
	during the second quarter and six months ended June 30, 2006, was $31
	and $44, respectively (2005: nil and $1).
	For the second quarter and six months ended June 30, 2006,
	the Company received $57 and $99, respectively, from the exercise of Alcan
	Executive Share Options (2005: $4 and $7). The total intrinsic value of Alcan Executive Share Options
	fully vested at June 30, 2006, is $38 (2005: nil).  The total compensation
	cost related to nonvested Alcan Executive Share Options not yet recognized
	is $23 at June 30, 2006.  The weighted-average period over which this
	cost is expected to be recognized is three years. The fair value of options vested during the second quarter
	and six months ended June 30, 2006, is $21 and $31, respectively (2005: $1
	and $1). For all Alcan Executive Share Options granted subsequent to
	December 31, 2005, the fair value is estimated using a Monte Carlo
	simulation model.  As the Alcan Executive Share Options contain a market
	condition, which should be reflected in the grant date fair value of the
	options, the Company prospectively changed its valuation technique based on
	further clarification provided in SFAS No. 123(R).  The Monte Carlo
	simulation model explicitly considers market conditions and in doing so,
	provides a better estimate of fair value than the Black-Scholes option
	pricing model used in prior years.  The Monte Carlo simulation model
	utilizes multiple input variables that determine the probability of
	satisfying each market condition stipulated in the award.  The valuation
	model used the following assumptions: Dividend yield (%)
			
			
			1.66Expected
			volatility (%)
			
			
			31.78Risk-free
			interest rate (%)
			
			
			4.35-4.86Original term of
			awards (years)
			
			
			10 The
	weighted average grant date fair value for Alcan Executive Share Options
	issued during the second quarter and six months ended June 30, 2006 is nil
	and $13.94, respectively (2005: nil and nil). -18-   8.      STOCK
	OPTIONS AND OTHER STOCK-BASED COMPENSATION(cont'd) Derived
	Service Period For
	options granted during the six months ended June 30, 2006, the requisite
	service period is derived for the three vesting tranches described above
	using the same Monte Carlo simulation.  The fair values of the options for
	each of the first, second and third tranches are recognized as compensation
	expense over a requisite service period of one, two and three years,
	respectively.  The Company changed its method of calculating the requisite
	service period based on further clarification provided in SFAS No. 123(R),
	as the Alcan Executive Share Options contain a market condition. Pechiney
	Stock Option Plans Under the
	stock option plans of Pechiney, now a wholly-owned subsidiary of Alcan,
	certain officers and employees were granted options to subscribe to or to
	purchase Pechiney common shares. Alcan and
	Pechiney agreed on the terms of a liquidity agreement which has been made
	available to beneficiaries of Pechiney subscription and purchase options
	("Liquidity Agreement"). The Liquidity Agreement allowed the holders of
	Pechiney options to either (a) exchange their Pechiney shares resulting from
	the exercise of the Pechiney options for Alcan common shares on the basis of
	a ratio equivalent to the consideration offered under Alcan's public offer
	for Pechiney or (b) give up their Pechiney options and receive new options
	to subscribe for Alcan common shares on the basis of a ratio equivalent to
	the consideration offered under Alcan's public offer for Pechiney. Upon the
	clearance by the French Autorité des marchés financiersof Alcan's
	initial public offer for Pechiney securities on July 16, 2003, the Pechiney
	options became fully vested.  The Alcan common shares are issued from
	treasury. Changes in
	the number of Alcan shares under Pechiney options as well as the average
	exercise price are summarized below: Number of Shares Under Pechiney Options
			(in thousands)
			Weighted Average Exercise Price
			(€)Outstanding - January 1, 2006
			3,670
			31.63Exercised
			(919)
			29.23Forfeited
			(26)
			28.79Outstanding and Exercisable - June 30, 2006
			2,725
			32.46  Shares
	under Pechiney Options Outstanding and Exercisable at June 30, 2006 NUMBER OF SHARES
			UNDER OPTIONS
			(IN THOUSANDS)
			RANGE OF EXERCISE
			PRICE (€)
			WEIGHTED AVERAGE EXERCISE PRICE (€)
			WEIGHTED AVERAGE REMAINING
			CONTRACTUAL LIFE
			(YEARS)349
			16.73-19.92
			19.79
			6.5845
			23.50-23.92
			23.67
			2.21924
			29.07-31.36
			29.95
			4.051,407
			37.53-37.67
			37.54
			5.682,725
			16.73-37.67
			32.46
			5.19  Under the
	terms of the Liquidity Agreement, a maximum of 3,890,542 Alcan common shares
	can be issued. As part of
	the cost of the acquisition of Pechiney, an amount of $80 was recognized for
	the fair value of the Pechiney options and credited to Additional paid-in
	capital.  The Black-Scholes valuation model was used to determine the fair
	value of Pechiney options. The weighted average assumptions used were a
	dividend yield of 2.19%, an expected volatility of 52.50%, a market
	risk-free interest rate of 3.99% and an expected life of seven years. -19-  8.     STOCK OPTIONS
	AND OTHER STOCK-BASED COMPENSATION(cont'd) The total intrinsic value of Pechiney options exercised


	during the second quarter and six months ended June 30, 2006, was
	$7
	and $13, respectively (2005: nil and nil). 
	For the second quarter and six months ended June 30, 2006, the Company
	received

	$16 and $33, respectively,
	from the exercise of
	Pechiney options (2005: nil and nil). Other
	Stock-Based Compensation Plans Stock
	Price Appreciation Unit Plan A small number
	of employees are entitled to receive Stock Price Appreciation Units (SPAU)
	instead of Alcan Executive Share Options due to certain local considerations
	in their countries of residence, whereby they are entitled to receive cash
	in an amount equal to the excess of the market value of a common share on
	the date of exercise of a SPAU over the market value of a common share as of
	the date of grant of such SPAUs.  SPAUs vest in the same manner as the Alcan
	Executive Share Options granted beginning in 1998.  On January 6,
	2005, 211,035 SPAUs, representing SPAUs held by Novelis employees who were
	Alcan employees immediately prior to the spin-off, were cancelled.   The
	remaining SPAUs were converted in the same manner as described under the
	Alcan Executive Share Option Plan. As described in note 2 - Accounting Changes - Share-Based
	Payment, the Company began recording all outstanding liability awards at
	fair value on January 1, 2006.  Accordingly, the Company recorded an
	after-tax charge of $4 using the modified prospective application method in
	Cumulative effect of accounting change to record all outstanding SPAUs,
	previously measured at their intrinsic value, at their fair value.  Prior
	periods have not been restated.  The fair value of all outstanding SPAUs is
	estimated using the Monte Carlo simulation model described under the Alcan
	Executive Share Option Plan. The change in
	SPAUs for the six-month period ended June 30, 2006 is as follows: Number of SPAUs(in thousands)
			Weighted Average Exercise Price
			(CAN$)Outstanding - January 1, 2006
			1,019
			42.09Exercised
			(297)
			39.45Forfeited
			(6)
			46.90Outstanding - June 30, 2006
			716
			43.15Exercisable - June 30, 2006
			338
			39.88 SPAUs Outstanding at June 30, 2006 NUMBER OF
			SPAUs(IN THOUSANDS)
			RANGE OF
			EXERCISE
			PRICE (CAN$)
			WEIGHTED
			AVERAGE EXERCISE PRICE (CAN$)
			WEIGHTED
			AVERAGE REMAINING
			CONTRACTUAL
			LIFE
			(YEARS)82
			34.04-35.00
			34.04
			4.42159
			35.01-40.00
			38.26
			9.23132
			40.01-45.00
			40.86
			4.66179
			45.01-50.00
			46.16
			5.89164
			50.01-50.99
			50.99
			8.24716
			34.04-50.99
			43.15
			6.77 -20-   8.      STOCK OPTIONS
	AND OTHER STOCK-BASED COMPENSATION(cont'd) SPAUs Exercisable at June 30, 2006 NUMBER OF
			SPAUs(IN THOUSANDS)
			RANGE OF
			EXERCISE
			PRICE (CAN$)
			WEIGHTED
			AVERAGE EXERCISE PRICE (CAN$)
			WEIGHTED
			AVERAGE REMAINING CONTRACTUAL LIFE
			(YEARS)82
			34.04-35.00
			34.04
			4.4288
			35.01-40.00
			38.26
			9.2381
			40.01-45.00
			40.86
			4.3087
			45.01-46.16
			46.16
			4.46338
			34.04-46.16
			39.88
			5.65  The total intrinsic value for SPAUs redeemed,
	which is equal to the amount the Company paid, during the
	second quarter and six months ended June 30, 2006, was $3 and $4,
	respectively (2005: nil and nil). The total intrinsic value of SPAUs fully vested at June 30,
	2006 is $4 (2005: nil).  The total compensation cost related to nonvested
	SPAUs not yet recognized is $4 at June 30, 2006.  The weighted-average
	period over which this cost is expected to be recognized is two years. The fair value of the SPAUs vested during the second quarter
	and six months ended June 30, 2006 is $4 and $5, respectively. Total
	Shareholder Return Performance Plan A number
	of employees are entitled to receive cash awards under the Total Shareholder
	Return (TSR) Performance Plan (TSR Plan), a cash incentive plan that
	provides performance awards to eligible employees based on the relative
	performance of the Company's common share price and cumulative dividend
	yield performance compared to other corporations included in the Standard &
	Poor's Industrial Composite Index measured over three-year periods
	commencing on October 1, 2005, 2004 and 2003.  Generally, participants are
	only eligible for payment of cash awards under the TSR Plan if they are
	employed by the Company over the entire three-year period.  If the
	performance results for the Company's common shares ranks below the 30th
	percentile compared to all companies in the Standard & Poor's Industrial
	Composite Index (Peer Companies), the employee will not receive an award. 
	At the 30th percentile rank, the

	employee will be paid an award equal to 60% of the target.  At the 50th
	percentile rank, the employee will earn a payout of 100% of the target, and
	at or above the 75th percentile rank, the employee will earn the
	maximum award, which is equal to

	300% of the target set for the three-year period. The actual amount of the
	award (if any) will be prorated between the percentile rankings. As described in note 2 - Accounting Changes - Share-Based
	Payment, the Company began recording all outstanding liability awards at
	fair value on January 1, 2006.  Accordingly, on this date, the Company began
	recording all outstanding awards under the TSR Plan at fair value.  The fair
	value of all outstanding TSR awards was estimated by using a Monte Carlo
	simulation model to simulate the total shareholder return for each of the
	Peer Companies over the term of the performance period and to evaluate the
	Company's percentile rank among the Peer Companies in order to determine the
	payout.  The adoption of the fair value method did not have a material
	impact on the outstanding TSR awards on January 1, 2006.  Prior to this
	date, the TSR awards were measured at their intrinsic value and the changes
	in market value recorded as an increase (or decrease) in compensation
	expense. The
	valuation model used the following assumptions at June 30, 2006: Alcan expected
			volatility (%)
			
			
			30.09Alcan expected
			correlation with market
			
			
			0.45Risk-free
			interest rate (%)
			
			
			5.19Expected market
			volatility (S&P 500) (%)
			
			
			11.07 -21-   8.      STOCK OPTIONS
	AND OTHER STOCK-BASED COMPENSATION(cont'd) The peer
	group expected volatility and correlation with the market at June 30, 2006, is summarized as
	follows: PEER GROUP
			VOLATILITY
			CORRELATION WITH MARKETPeer group
			average
			27.32%
			0.45Peer group high
			112.39%
			0.69Peer group low
			13.23%
			0.12  On January 6, 2005, all Novelis employees who were Alcan
	employees immediately prior to the spin-off ceased to actively participate
	in and accrue benefits under this plan.  No cash payments were made to these
	employees as a result of the spin-off nor does Alcan have any liability to
	make future cash payments to these individuals. As
	described above, under the Executive Deferred Share Unit Plan, executive
	officers based in Canada may elect, at least 12 months prior to the end of
	the three-year period of the TSR Plan, to receive EDSUs for their total
	award earned under the TSR Plan for that period instead of a cash payment. 
	For the second quarter and six months ended June 30, 2006,
	21 and 43 units, respectively, were granted to
	eligible executive officers.  At June 30, 2006, 7,161 units were
	outstanding. Executive
	Deferred Share Unit Plan Under the Executive Deferred Share Unit Plan, executive
	officers based in Canada may elect, prior to the beginning of any particular
	year, to receive Executive Deferred Share Units (EDSUs) with a value between
	10% and 100% of their Executive Performance Award (EPA) in respect of that
	year, instead of a cash payment.  These executive officers may also elect,
	at least 12 months prior to the end of the three-year period of the TSR
	Plan, to receive EDSUs for their TSR award for that period, instead of a
	cash payment.  The number of EDSUs is determined by dividing the amount so
	elected by the average price of a common share on the Toronto and New York
	stock exchanges at the end of the preceding year for the EDSUs related to
	the EPA, and at the end of the three-year period for the EDSUs related to
	the TSR  Plan.  Additional EDSUs are credited to each holder thereof
	corresponding to dividends declared on common shares. The EDSUs are
	redeemable only upon termination of employment (retirement, resignation or
	death). The cash amount to be paid by the Company upon redemption is
	calculated by multiplying the accumulated balance of EDSUs by the average
	price of a common share on the said exchanges at the time of redemption.
	Under the terms of this plan, discretionary EDSUs may be granted as
	determined by the Board of Directors.  On January 6, 2005, EDSUs held prior
	to the spin-off of Novelis were converted in the same manner as described
	under the Alcan Executive Share Option Plan. For the second
	quarter and six months ended June 30, 2006,
	10,687 and 10,934 units, respectively, were granted and nil and 11,439
	units, respectively, were redeemed.  At June 30, 2006, 90,447 units were
	outstanding.  The Company paid nil and $1 for the redemption of units for
	the second quarter and six months ended June 30, 2006, respectively. Non-Executive Directors Deferred Share Unit Plan Under the Non-Executive
	Directors Deferred Share Unit Plan, non-executive directors receive 50% of
	compensation payable in the form of Directors' Deferred Share Units (DDSUs)
	and 50% in the form of either cash or additional DDSUs at the election of
	each non-executive director. The number of DDSUs is determined by dividing
	the quarterly amount payable by the average price of a common share on the
	Toronto and New York stock exchanges on the last five trading days of each
	quarter. Additional DDSUs are credited to each holder thereof corresponding
	to dividends declared on common shares. The DDSUs are redeemable only upon
	termination (retirement, resignation or death). The cash amount to be paid
	by the Company upon redemption is calculated by multiplying the accumulated
	balance of DDSUs by the average price of a common share on the said
	exchanges at the time of redemption.
	On January 6, 2005, Non-Executive DDSUs held prior to the spin-off of
	Novelis were converted in the same manner as described under the Alcan
	Executive Share Option Plan. For the second
	quarter and six months ended June 30, 2006,
	9,642 and 19,920 units, respectively, were granted and 16,216 and 16,216
	units, respectively, were redeemed.  At June 30, 2006, 136,567 units were
	outstanding.  The Company paid $1 and $1 for the redemption of units for the
	second quarter and six months ended June 30, 2006, respectively. -22-  8.     STOCK OPTIONS
	AND OTHER STOCK-BASED COMPENSATION(cont'd) Restricted
	Stock Units A small number of employees are granted Restricted Stock
	Units (RSUs). Additional RSUs are credited to each holder thereof
	corresponding to dividends declared on common shares.  RSUs usually vest
	three years after the grant date. Each RSU carries the right to an amount
	equal to the average price of a common share on the Toronto and New York
	stock exchanges on the five trading days ending on the vesting date.  As a
	result of the spin-off, RSUs held prior to the spin-off of Novelis were
	converted in the same manner as described under the Alcan Executive Share
	Option Plan. For the second
	quarter and six months ended June 30, 2006,
	166 and 8,449 units, respectively, were granted and 5,408 and 7,533 units,
	respectively, were redeemed.  At June 30, 2006, 52,703 units were
	outstanding.  The Company paid approximately nil for the redemption of a
	portion of the RSUs for the second quarter and six months ended June 30,
	2006. The remaining RSU's redeemed were converted to Alcan common shares. Total
	Stock-Based Compensation Cost Total
	stock-based compensation costs (income) for the second quarter and six
	months ended June 30, 2006 are $21 and $61, respectively (2005: ($6) and
	($3)).  These costs include stock-option
	expense of $11 and $36 for the second quarter and six months ended June 30,
	2006, respectively (2005: $5 and $10) and other stock-based compensation
	costs (income) of $10 and $25 for the second quarter and six months
	ended June 30, 2006, respectively (2005: ($11) and
	($13)).  Included in stock-option expense is $11 in the first quarter of
	2006 due to the recognition of compensation expense related to retired and
	retirement-eligible employees. As a
	result of the adoption of SFAS No. 123(R), the Company recognizes
	compensation expense immediately for all stock options issued on or after
	January 1, 2006 to retirement eligible employees.  For stock options issued
	prior to this date, all unrecognized compensation expense is recognized
	immediately upon the employee's retirement.  9.    INCOME TAXES Second Quarter
			Six MonthsPeriods ended June 30
			2006
			2005
			2006
			2005Current
			112
			83
			237
			126Deferred
			83
			(13)
			227
			42195
			70
			464
			168  The composite of the applicable statutory corporate income tax rates in
	Canada is 33% (2005: 32%). -23-  10.   OTHER EXPENSES (INCOME) - NET  Second Quarter
			Six MonthsPeriods ended June 30
			2006
			2005
			2006
			2005Asset impairment charges not included in
			restructuring programs
			1
			23
			5
			26Loss (Gain) on disposal of businesses and
			investments - net
			(4)
			17
			(4)
			16Provision for (Recoveries of) legal claims
			8
			10
			(54)
			11Environmental provisions
			7
			5
			9
			8Interest revenue
			(7)
			(12)
			(15)
			(31)Exchange losses (gains) - net
			65
			(25)
			83
			(40)Derivative losses (gains) - net
			(46)
			(18)
			(44)
			5Other
			(22)
			-
			(9)
			62
			-
			(29)
			1  On
	January 19, 2006, the Company sold claims related to the Enron bankruptcy to
	afinancial institution for combined proceeds of $62, recorded in
	Provisions for (Recoveries of) legal claims.  11.   INVENTORIES June 30,
			2006
			December 31,
			2005Aluminum operating segmentsAluminum
			975
			912Raw materials
			724
			704Other supplies
			448
			3652,147
			1,981Packaging operating segmentsRaw materials and
			other supplies
			337
			297Work in progress
			159
			133Finished goods
			310
			323806
			7532,953
			2,734  12.   SUPPLEMENTARY INFORMATION Second Quarter
			Six MonthsPeriods ended June 30
			2006
			2005
			2006
			2005Income StatementInterest on
			long-term debt
			84
			83
			168
			166Capitalized
			interest
			(20)
			(5)
			(34)
			(10)  June 30,
			2006
			December 31,
			2005Balance SheetPayables and accrued liabilities include the
			following:Trade payables
			2,058
			1,855Other accrued
			liabilities
			1,619
			1,520Derivatives
			743
			508Income and other taxes
			217
			116Accrued employment costs
			580
			6095,217
			4,608 -24-   13.   COMMITMENTS AND CONTINGENCIES The Company has guaranteed the repayment of approximately
	$174 of indebtedness by third parties.  Alcan believes that none of these
	guarantees is likely to be invoked. These guarantees relate primarily to
	debt held by equity-accounted joint ventures, obligations relating to
	businesses sold, employee housing loans 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 24 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. 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. The agreements giving effect to the spin-off provide for
	various post-transaction adjustments and the resolution of outstanding
	matters, which are expected to be carried out by the parties in 2006.  Any
	gain or loss resulting from post-transaction adjustments will be recorded as
	an adjustment to total Shareholders' equity. 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 Second Quarter
			Six MonthsPeriods ended June 30
			2006
			2005
			2006
			2005Net
			income
			455
			191
			908
			409Other comprehensive income (loss):Net change in deferred translation adjustments
			239
			(299)
			396
			(559)Net change in excess of market value over book
			value of"available-for-sale" securities
			-
			(2)
			-
			(4)Net change in unreleased gains and losses onderivatives, net of tax of $6 and $49,
			respectively,for the quarter and six months endedJune 30, 2006 (2005: ($45)
			and ($29))Net change from periodic revaluations
			(65)
			84
			(188)
			43Net amount reclassified to income
			57
			12
			98
			20Net change in minimum pension liability, net of
			tax of$8 and $9, respectively, for the quarter and
			sixmonths ended June 30, 2006 (2005: ($7) and
			($12))
			(13)
			20
			(18)
			(4)218
			(185)
			288
			(504)Comprehensive income (loss)
			673
			6
			1,196
			(95)  -25-  14.  
	COMPREHENSIVE INCOME
	(cont'd) June 30,
			2006
			December 31,
			2005Accumulated other comprehensive income (loss)Deferred translation adjustments
			660
			264Unrealized gain on "available-for-sale" securities
			4
			4Unreleased loss on derivatives
			(305)
			(215)Minimum pension liability
			(468)
			(450)Accumulated other comprehensive loss
			(109)
			(397)  15.   SALES AND ACQUISITIONS OF BUSINESSES
	AND INVESTMENTS Acquisitions On January 3,
	2006, the Company announced that it has acquired the packaging assets and
	business of Recubrimientos y Laminaciones de Papel, S.A. de C.V. (Relapasa),
	of Monterrey, Mexico for $22. On March 10, 2006, the Company acquired the operating assets
	of Daifu Industries Co. Ltd. of Phetchaburi, Thailand, a company
	specializing in hotmelt coating, induction sealing and production of
	flexible packaging material, for an initial investment of $8.  An additional
	amount of $1 was paid in June 2006 based on the audited value of the
	acquiree's inventory. During the second quarter of 2006, the Company increased its
	ownership in Alcan Packaging Mohammedia to 97.2% by purchasing an additional
	34.4% for $9.  Alcan Packaging Mohammedia, located in Morocco, is
	specialized in cosmetics, hygiene and medical packaging. Sales On February 7, 2006, the
	Company completed the sale of its Froges, France, rolling mill to Industrie
	Laminazione AlluminioS.p.A. based in Sardinia, Italy for net
	proceeds of $(5), resulting in a gain on disposal of $1. In March 2006,
	the Company completed the sale of selected assets of its North American Food
	Packaging Plastic Bottle business to Ball Corporation for net proceeds of
	$182, resulting in a loss on disposal of $4. On March 2, 2006, the
	Company completed the sale of its high-purity activity at the Mercus
	processing mill in France to Praxair Inc. for net proceeds of $2, resulting
	in a gain on disposal of $1. On March 2, 2006, the Company completed the sale of its food
	packaging plant in Zaragoza, Spain, to Kostova System, S.L., for net
	proceeds of $7, resulting in a loss on disposal of $3. In June 2006, the
	Company completed
	the sale of its Chambéry, France, operation to Compagnia Generale Alluminio
	S.p.A. for net proceeds of $8, resulting in no gain or loss on disposal. 
	Chambéry manufactures Rollbond panels used primarily as fluid circulators in
	refrigeration units.  During the first quarter of 2006, the Company had
	recorded an impairment charge of $2 based on the expected divestiture. On June 9, 2006, the Company completed the sale of its Lir
	France beauty packaging facility in France for net proceeds of $(3),
	resulting in a gain on disposal of $1.  A provision of $9 was recorded in
	the fourth quarter of 2005 based on the expected loss on disposal. On July 24, 2006, the Company announced that it has signed an
	agreement to sell its Cebal Aerosol business to its current management team
	and to Natexis Investissement Partners, a part of Natexis Private Equity
	investment fund. -26-  16.   POST-RETIREMENT BENEFITS Alcan and its subsidiaries have established pension plans in the principal
	countries where they operate. The pension obligation relates to funded
	defined benefit pension plans mostly in Canada, Switzerland, the U.K. and
	the U.S. (Funded Pension Plans) and to unfunded defined benefit pension
	plans mostly in France and Germany as well as lump sum indemnities payable
	to employees of French companies upon retirement (Unfunded Pension Plans).
	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 Company practice,
	collective agreement or statutory requirement. Funded Pension Plans are administered by a Board of Trustees composed of
	plan members designated by the Company and employees.  Each Board adopts its
	own investment policy which generally favors 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 BenefitsSecond Quarter
			Six Months
			Second Quarter
			Six MonthsPeriods ended June 30
			2006
			2005
			2006
			2005
			2006
			2005
			2006
			2005Service cost
			51
			41
			100
			82
			4
			3
			8
			6Interest cost on
			benefit obligation
			140
			136
			278
			275
			14
			14
			28
			28Expected return
			on plan assets
			(153)
			(136)
			(304)
			(275)
			-
			-
			-
			-Amortization:Actuarial
			(gains) losses
			29
			24
			56
			48
			4
			(1)
			8
			(2)Prior service
			cost
			18
			15
			36
			30
			-
			-
			-
			-Net periodic
			benefit cost
			85
			80
			166
			160
			22
			16
			44
			32  The
	expected long-term rate of return on plan assets is 6.9% in 2006. Employer Contributions Alcan previously disclosed in its financial statements for
	the year ended December 31, 2005, that it expected to contribute $246 in
	aggregate to its funded pension plans in 2006.  The contributions are
	expected to be fully comprised of cash. As at June 30, 2006, $126 has been
	contributed, and the Company expects to contribute an additional $128 over
	the remainder of the year. The Company expected to pay in 2006 $65 of
	unfunded pension benefits and lump sum indemnities from operating cash
	flows.  As at June 30, 2006, $34 has been paid, and the Company expects to
	pay an additional $35 over the remainder of the year.  17.  
	LONG TERM DEBT Effective
	June 16, 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: a
	$2,000 five-year tranche, 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 as backup for commercial
	paper.  18.   PRIOR YEAR AMOUNTS Certain
	prior year amounts have been reclassified to conform with current period
	presentation.  19.
	  SUBSEQUENT EVENT In the third
	quarter of 2006, the Company announced a 33% increase in the quarterly
	dividend from $0.15 to $0.20.  The dividend of $0.20 per common share is
	payable on September 20, 2006 to shareholders of record at the close of
	business on August 18, 2006. -27-  Item
	2.  Management's Discussion and Analysis of Financial Condition and
	Results of Operations (In
	millions of US$, 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 second
	quarter income from continuing operations of $454 or $1.21 per common share
	versus $208 or $0.56 per common share a year earlier and $454 or $1.21 per
	common share in the first quarter of 2006.  Income from continuing
	operations increased $246 year-over-year as the Company benefited from
	higher aluminum prices, better pricing and mix, improved volumes, as well as
	a lower charge for Other Specified Items (OSIs), partially offset by higher
	costs for energy and raw materials, the negative impact of a stronger
	Canadian dollar and an unfavourable variance in foreign currency balance
	sheet translation effects. Income from continuing operations was unchanged
	from the first quarter of 2006 as the benefits of higher aluminum prices,
	improved volumes, and better pricing and mix, were offset by lower
	contributions from technology sales and power generation, the negative
	impact of a stronger Canadian dollar, higher raw material costs as well as
	an unfavourable variance in foreign currency balance sheet translation. The
	terms "Other Specified Items" and "Foreign Currency Balance Sheet
	Translation" are defined under "Definitions" at the end of MD&A. Income from continuing
	operations for the second quarter of 2006 included a primarily non-cash,
	after-tax loss of $100 or $0.27 per common share for the effects of foreign
	currency balance sheet translation, compared to an after-tax gain of $4 or
	$0.01 per common share in the year-ago quarter and an after-tax loss of $9
	or $0.02 per common share in the first quarter of 2006. Foreign currency
	balance sheet translation charges for the second quarter of 2006 reflect the
	largely non-cash impact of the strengthening Canadian dollar on the
	Company's deferred income taxes.   Also included in income from continuing
	operations for the second quarter was a net after-tax charge for OSIs of $2
	or nil per common share compared to an after-tax charge of $82 or $0.22 per
	common share in the year-ago quarter and an after-tax charge of $10 or $0.03
	per common share in the first quarter of 2006.  A detailed OSI schedule is
	provided below.  Second Quarter
			First Quarter
			Six Months Ended
			June 302006
			2005
			2006
			2006
			2005Included in income from
			continuing operations are:Foreign currency
			balance sheet translation
			(100)
			4
			(9)
			(109)
			34Other Specified Items (OSIs)
			(2)
			(82)
			(10)
			(12)
			(127)Income from continuing
			operations
			454
			208
			454
			908
			416Income (Loss) from
			discontinued operations
			1
			(17)
			3
			4
			(7)Cumulative effect of
			accounting change
			-
			-
			(4)
			(4)
			-Net income
			455
			191
			453
			908
			409Basic earnings per
			common share($ per common share)Income from continuing
			operations
			1.21
			0.56
			1.21
			2.42
			1.11Net income
			1.21
			0.52
			1.21
			2.42
			1.09Average number of
			common shares outstanding (millions)
			375.1
			370.2
			373.1
			374.1
			370.1  -28-   Second Quarter
			First Quarter
			Six Months Ended
			June 302006
			2005
			2006
			2006
			2005Sales & operating
			revenues
			6,103
			5,206
			5,550
			11,653
			10,384Volumes(Kt)Ingot products*
			765
			744
			749
			1,514
			1,468Aluminum used in engineered products & packaging
			341
			336
			337
			678
			663Total aluminum volume
			1,106
			1,080
			1,086
			2,192
			2,131Aluminum pricing data($
			per tonne)Ingot product
			realizations*
			2,709
			2,034
			2,454
			2,581
			2,046Average LME 3-month
			price (1-month lag) **
			2,661
			1,868
			2,369
			2,515
			1,859*
			Includes primary and secondary ingot and scrap aluminum. Realized
			prices generally lag LME price changes by one month.
			** 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 $6,103 were up $897 compared to the year-ago quarter mainly
	reflecting higher aluminum prices, favourable pricing and mix across all
	businesses as well as increased volume in the Primary Metal and Engineered
	Products groups.  Compared to the first quarter of 2006, sales and operating
	revenues rose by $553 primarily reflecting the benefits of higher aluminum
	prices and ingot volumes as well as improved sales mix and pricing in the
	downstream businesses. Total aluminum volume
	was up slightly from a year earlier principally due to additional production
	from the Alouette expansion and the Becancour smelter restart which more
	than offset the impact of the closure of the
	Steg
	smelter in Switzerland. The marginal aluminum volume increase from the first
	quarter was largely the result of inventory drawdowns during the second
	quarter in the Company's Asia-Pacific smelter system. The average realized
	price on sales of ingot products during the second quarter was up $675 per
	tonne from the year-ago quarter and $255 per tonne from the first quarter of
	2006.  Both the year-over-year and sequential quarter increases reflected
	the impact of higher LME prices, partly offset by lower local market premia
	compared to the second quarter a year ago. Second Quarter
			First Quarter2006
			2005
			2006Other Specified Items (after-tax)Synergy costs
			-
			(24)
			-Restructuring
			charges
			(42)
			(28)
			(21)Asset impairments
			(24)
			(16)
			(6)Gains (losses) from
			non-routine sales of assets, businesses and investments
			8
			(8)
			(29)Tax adjustments
			63
			-
			-Novelis costs
			-
			5
			-Other
			(7)
			(11)
			46Other Specified Items
			(2)
			(82)
			(10)  The most significant items
	included in OSIs in the second quarter of 2006 were after-tax charges
	totaling $66 associated mainly with previously announced restructuring
	initiatives across all business groups, largely offset by tax adjustments of
	$63 mainly related to a deferred tax benefit arising from a reduction in the
	Canadian Federal tax rates enacted in June 2006. 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. -29-  The principal items included
	in OSIs in the second quarter of 2005 were after-tax costs of $28 mainly
	related to the restructuring of certain Engineered Products facilities,
	principally in Europe, after-tax costs of $24 mainly associated with the
	Pechiney synergy program and after-tax asset impairments of $16. Included in income from
	continuing operations for the second quarter of 2006 were mark-to-market
	gains on derivatives of $0.03 per common share as compared to $0.06 a year
	earlier and $0.03 in the first quarter of 2006. Results for the second
	quarter of 2006 included
	non-cash pre-tax expenses of $11
	for stock
	options as compared to $5 in the year-ago quarter and $25 in the first
	quarter of 2006. Net Income Including results from
	discontinued operations and the cumulative effect of an accounting change in
	the first quarter of 2006, the Company reported net income of $455 or $1.21
	per common share, compared to net income of $191 or $0.52 per common share a
	year earlier and $453 or $1.21 per common share in the first quarter of
	2006. Operating Segment Review The term "Business Group
	Profit" (BGP) is defined under "Definitions" at the end of the MD&A. Second Quarter
			First Quarter
			Six Months Ended
			June 302006
			2005
			2006
			2006
			2005Business Group Profit (BGP)Bauxite and Alumina
			126
			111
			129
			255
			208Primary Metal
			774
			425
			758
			1,532
			856Engineered Products
			144
			101
			154
			298
			216Packaging
			134
			177
			146
			280
			333Subtotal
			1,178
			814
			1,187
			2,365
			1,613Equity accounted joint
			venture eliminations
			(86)
			(77)
			(71)
			(157)
			(151)Change in fair market
			value of derivatives
			7
			33
			14
			21
			301,099
			770
			1,130
			2,229
			1,492Corporate ItemsIntersegment, corporate
			offices and other
			(159)
			(161)
			(107)
			(266)
			(248)Depreciation &
			amortization
			(258)
			(268)
			(251)
			(509)
			(540)Interest
			(69)
			(90)
			(76)
			(145)
			(175)Income taxes
			(195)
			(70)
			(269)
			(464)
			(168)Equity income
			37
			28
			28
			65
			57Minority interests
			(1)
			(1)
			(1)
			(2)
			(2)Income from continuing
			operations
			454
			208
			454
			908
			416  Bauxite and Alumina:
	BGP for the second quarter was $126, an increase of $15 or 14% compared to
	the year-ago quarter.  Excluding OSIs and balance sheet translation effects,
	the year-over-year increase in BGP was $37 or 35%.  This improvement mainly
	reflected higher LME-linked contract prices for alumina and a favourable
	change in sales mix, partly offset by higher costs for energy, caustic soda
	as well as accelerated maintenance and other operating costs mainly related
	to Gove.  On a sequential quarter basis, BGP was slightly below the previous
	quarter.  Excluding OSIs and balance sheet translation effects, BGP
	increased by $15 or 12% reflecting higher contract prices which more than
	offset unfavourable changes in sales mix.  For the third quarter of 2006,
	results are expected to show good improvement over the second quarter mainly
	due to higher LME-linked contract prices. Primary Metal:
	BGP for the second quarter at $774 increased by $349 or 82% compared to the
	year-ago quarter.  Excluding OSIs and balance sheet translation effects, the
	year-over-year increase in BGP was $379 or 90%.  The improvement reflected
	higher sales price realizations, partially offset by the impact of a weaker
	U.S. dollar and higher input costs due mainly to alumina and fuel-related
	raw materials.  On a sequential quarter basis, BGP was up $16 or 2%. 
	Excluding OSIs and balance sheet translation effects, BGP increased by $40
	or 5%.  The improvement mainly reflected higher sales price realizations and
	increased metal shipments, partially offset by significantly lower
	contributions from technology sales and power generation, the unfavourable
	impact of a weaker U.S. dollar as well as higher input costs due mainly to
	energy and fuel-related raw materials. For the third quarter of 2006,
	results are expected to decline due to lower aluminum prices, higher alumina
	costs as well as the impact of the power interruption at the Reykjavik
	smelter in Iceland. -30-   Engineered Products:
	BGP for the second quarter was $144, up $43 or 43% from the comparable
	quarter of 2005.  Excluding the impact of OSIs and
	foreign currency balance sheet translation effects, the year-over-year
	increase in BGP was $23 or 17%, mainly reflectingstrong demand for
	cable, composite and aerospace products.  On a sequential quarter basis, BGP
	was down $10 or 6%.  Excluding OSIs and translation effects, BGP was little
	changed from the first quarter.  The BGP margin for the second quarter,
	adjusted for OSIs and translation effects, was 8.1%, compared to 8.0% a year
	earlier and 9.1% in the first quarter reflecting higher underlying aluminum
	prices and reduced metal timing benefits.  BGP for the third quarter is
	expected to be below the second quarter due to normal seasonal slowing in
	Europe combined with the timing impact relating to the reversal of earlier
	metal inventory valuation benefits. Packaging:
	BGP in the second quarter of $134 was down $43 or 24% compared to the
	prior-year quarter.  Excluding the impact of OSIs and foreign currency
	balance sheet translation effects, BGP decreased by $17 or 10%, reflecting
	the loss of contributions from divested businesses and a timing lag in the
	pass-through of raw material cost increases, which together more than offset
	increased volumes in the Food and Tobacco businesses.  On a sequential
	quarter basis, BGP was down $12 or 8%. However, excluding OSIs and
	translation effects, BGP increased $11 or 7% reflecting improvements across
	all businesses including seasonal growth and the benefits of earlier raw
	material price pass-through actions, partially offset by the adverse impact
	of divested businesses.  The BGP margin for the second quarter, adjusted for
	OSIs and translation effects, was 10.5%, down from 11.2% a year earlier but
	up from 9.9% in the first quarter reflecting successful pass-through
	measures.  For the third quarter of 2006, BGP is expected to increase as the
	benefits of restructuring and cost reduction plans more than offset normal
	seasonal volume softening. 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. Interest expense, net of
	capitalized interest, was $21 lower than in the year-ago quarter reflecting
	a higher level of capitalized interest.  In the second quarter, capitalized
	interest was $20, mainly related to the Gove expansion, compared to $5 a
	year ago.  The favourable impact of lower debt levels was partly offset by
	the effect of higher interest rates.  Compared to the first quarter,
	interest expense declined $7 due to higher capitalized interest. The Company's effective
	tax rate on income from continuing operations was 32% in the second quarter
	and 35% year to date.  Balance sheet translation losses due to the
	strengthening of the Canadian dollar increased the effective tax rate in the
	second quarter.  This was largely offset by a reduction of Canadian
	denominated deferred tax liabilities of $61 due to a reduction in the
	Canadian Federal tax rates enacted in June 2006.  In the first quarter, the
	effective tax rate was 39%, which reflected a non tax-deductible goodwill
	charge related to the sale of selected assets of the packaging bottles
	business. Liquidity and Capital
	Resources  Second Quarter
			First Quarter
			Six Months Ended
			June 302006
			2005
			2006
			2006
			2005Cash flow from
			operating activities in continuing operations
			771
			189
			362
			1,133
			92Dividends
			(59)
			(58)
			(59)
			(118)
			(116)Capital expenditures
			(469)
			(441)
			(426)
			(895)
			(698)Free cash flow from
			continuing operations
			243
			(310)
			(123)
			120
			(722)  Operating Activities Cash flow from operating activities in continuing operations increased by
	$582 compared to the year-ago quarter.  The increase mainly reflected higher
	earnings and a favourable change in working capital largely attributable to
	higher payables.  Compared to the first quarter of 2006, cash flow from
	operating activities was up by $409
	as a

	result of a favourable change in working capital. After dividends of $59 and
	capital expenditures of $469, free cash flow from continuing operations was
	$243 for the second quarter of 2006. In the year-ago quarter, after
	dividends of $58 and capital expenditures of $441, free cash flow from
	continuing operations was negative $310. The term "Free cash flow" is
	defined under "Definitions" at the end of MD&A. -31-  Financing Activities Debt as a Percentage of Invested Capital
			June 30
			March 312006
			2005
			2006DebtShort-term
			borrowings
			349
			339
			308Debt maturing
			within one year
			105
			854
			823Debt not
			maturing within one year
			5,570
			5,630
			5,219Debt of
			operations held for sale
			-
			1
			-Total debt
			6,024
			6,824
			6,350EquityMinority
			interests
			65
			91
			68Redeemable
			non-retractable preference shares
			160
			160
			160Common
			shareholders' equity
			10,750
			9,969
			10,039Total equity
			10,975
			10,220
			10,267Total invested
			capital
			16,999
			17,044
			16,617Debt as a
			percent of invested capital (%)
			35%
			40%
			38%  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 June 30, 2006 reached the long-term
	target level of 35%, down from 38% at the end of the first quarter. The
	Company announced a 33% dividend increase from $0.15 to $0.20 per common
	share per quarter. The dividend of $0.20 per common share is payable on
	September 20, 2006 to shareholders of record at the close of business on
	August 18, 2006. On May 2, 2006, the Company repaid its € 600 million 5.5%
	Euro note maturing on the same day.  The repayment was financed through a
	combination of commercial paper and cash from operations. Effective June 16, 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: a $2,000 five-year tranche, 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 as backup for commercial paper. As at the date of
	this report, August 9, 2006, Alcan has $1.1

	billion of commercial paper outstanding, and as a result, the unused portion
	of the credit facility was $1.9 billion.  Based on the Company's forecasts,
	the Company believes that the 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. Investment Activities In the second quarter of 2006, cash used for
	investment activities was $450 compared to $452 in the year-ago quarter.
	Both the current and year-ago quarter balances mainly reflect capital
	expenditures of $469 and $441, respectively.  Excluding
	capital expenditures on the Gove expansion, capital spending was 100% and
	84% of depreciation and amortization expense for the second quarter and
	prior-year quarter, respectively. -32-   Contractual Obligations The
	Company has future obligations under various contracts relating to debt
	payments, 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 June 30, 2006.  There are no material
	off-balance sheet arrangements. Contractual
			Obligations
			As at June 30,
			2006
			Payments due by periodTotal
			Less than One
			Year
			1 - 3 Years
			3 - 5 Years
			More than 5
			YearsLong-term debt
			5,675
			105
			487
			44
			5,039Interest
			payments (1)
			3,921
			153
			599
			571
			2,598Capital lease
			obligations
			11
			-
			7
			4
			-Operating leases
			358
			-
			177
			130
			51Purchase
			obligations
			4,927
			764
			892
			592
			2,679Unfunded pension
			plans (2)
			2,330
			35
			128
			130
			2,037Other
			post-employment benefits (2)
			2,622
			34
			150
			167
			2,271Funded pension
			plans (2)(3)
			(3)
			128
			524
			541
			(3)Guarantees (4)
			174
			29
			75
			-
			70Total
			
			1,248
			3,039
			2,179 (1)Interest payments
	were calculated using the interest rate in effect and the outstanding debt
	balance as at June 30, 2006. (2)Refer to note 16,
	Post-Retirement Benefits, of the accompanying 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 2010 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 financial statements.  Selected Annual
	Information Selected financial data for each of the Company's three most recently
	completed financial years is as follows: 31 December2005
				2004
				2003Sales and operating revenues
				20,320
				24,948
				13,850Income from continuing operations
				155
				243
				262Net income
				129
				258
				64Total assets
				26,638
				33,341
				31,948Total long-term debt
				6,067
				6,914
				7,778($ per common share)Income from continuing operations per common share - basic and
				diluted
				0.40
				0.64
				0.79Net income per common share - basic and diluted
				0.33
				0.69
				0.18Dividends per common share
				0.60
				0.60
				0.60  -33-  Selected Quarterly
		Information Selected unaudited financial data for each of the Company's eight most
		recently completed quarters is as follows:  Q2-06
				Q1-06
				Q4-05
				Q3-05
				Q2-05
				Q1-05
				Q4-04
				Q3-04Sales and operating revenues
				6,103
				5,550
				5,049
				4,887
				5,206
				5,178
				6,536
				6,184Income (Loss) from continuing operations
				454
				454
				(333)
				72
				208
				208
				(347)
				171Net income (Loss)
				455
				453
				(361)
				81
				191
				218
				(346)
				167($ per common share)Income (Loss) from continuing operations per common share -
				basic
				1.21
				1.21
				(0.91)
				0.19
				0.56
				0.56
				(0.95)
				0.46Income (Loss) from continuing operations per common share -
				diluted
				1.20
				1.20
				(0.91)
				0.19
				0.56
				0.56
				(0.95)
				0.46Net income (Loss) per common share - basic
				1.21
				1.21
				(0.98)
				0.21
				0.52
				0.58
				(0.94)
				0.45Net income (Loss) per common share - diluted
				1.20
				1.20
				(0.98)
				0.21
				0.52
				0.58
				(0.94)
				0.45            Commitments and
		Contingencies The Company's
		commitments and contingencies are described in note
		13 -
		Commitments and Contingencies,
		to
		the
		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 13 - Commitments and Contingencies, to the Consolidated
		Financial Statements
		in the most recent Annual Report on Form 10-K. 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 3 -
		Recently Issued Accounting Standards, to the Consolidated Financial
		Statements and in MD&A, contained in the most recent Annual Report on
		Form 10-K. Cautionary Statement Statements made in
		this document 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,"
		"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 summary of
		factors that could cause such differences. -34-  Important factors
		which could cause such differences include: changes in global supply and
		demand conditions for aluminum and other products; changes in aluminum
		ingot prices and changes in raw material costs and availability; changes
		in the relative value of various currencies; cyclical demand and pricing
		within the principal markets for the Company's products; changes in
		government regulations, particularly those affecting environmental,
		health or safety compliance; fluctuations in the supply of and prices
		for power in the areas in which the Company maintains production
		facilities; the consequences of transferring most of the aluminum rolled
		products businesses operated by the Company to Novelis Inc.; potential
		discovery of unanticipated commitments or other liabilities associated
		with the acquisition and integration or disposition of businesses; major
		changes in technology that affect the Company's competitiveness; the
		risk of significant losses from trading operations, including losses due
		to market and credit risks associated with derivatives; changes in
		prevailing interest rates and equity market returns related to pension
		plan investments; 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; economic, regulatory and political factors
		within the countries in which the Company operates or sells its
		products; relationships with, and financial and operating conditions of,
		customers and suppliers; the effect of integrating acquired businesses
		and the ability to attain expected benefits; and; other factors
		affecting the Company's operations including, but not limited to,
		litigation, labour relations and negotiations and fiscal regimes. 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 U.S. 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. -35-  "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 U.S. 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 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. 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
		U.S. 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 August
		2, 2006 is
		376,083,800.  -36-  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 on page 23 of the Company's Annual
		Report on Form 10-K for the year ended December 31, 2005. Interest
		Rates The impact of a 10% increase
		in interest rates on the Company's variable rate debt outstanding at
		June 30, 2006 and June 30, 2005 net of its invested surplus cash and
		time deposits at June 30, 2006 and June 30, 2005 would be to reduce net
		income by $5 and $3, respectively.  The fixed rate debt is expected to
		be outstanding until maturity as the Company does not intend to
		refinance its fixed rate debt prior to maturity.  Transactions in
		interest rate financial instruments for which there is no underlying
		interest rate exposure to the Company are prohibited.  For accounting
		policies for interest rate swaps used to hedge interest costs on certain
		debt, see note 3 - Summary of Significant Accounting Policies on page 70
		of the Company's most recent Annual Report on Form 10-K. Currency
		Derivatives The schedule below presents fair value information and
		contract terms relevant to determining future cash flows categorized by
		expected maturity dates of the Company's currency derivatives
		(principally forward contracts) outstanding as at June 30, 2006.  2011and
				Nominal
				Fair(in US$
				millions, except contract rates)
				2006
				2007
				2008
				2009
				2010
				Thereafter
				Amount
				ValueFORWARD
				CONTRACTSTo buy USD
				against the foreign currencyGBP
				Nominal amount
				6
				-
				-
				-
				-
				-
				6
				-Average contract
				rate
				0.549
				-
				-
				-
				-
				-CHF
				Nominal amount
				4
				-
				-
				-
				-
				-
				4
				-Average contract
				rate
				1.218
				-
				-
				-
				-
				-JPY
				Nominal amount
				19
				-
				-
				-
				-
				-
				19
				1Average contract
				rate
				109.2
				-
				-
				-
				-
				-MXN
				Nominal amount
				14
				4
				1
				-
				-
				-
				19
				-Average contract
				rate
				11.20
				10.97
				11.29
				-
				-
				-DKK
				Nominal amount
				5
				-
				-
				-
				-
				-
				5
				-Average contract
				rate
				5.912
				-
				-
				-
				-
				-Other
				Nominal amount
				3
				-
				-
				-
				-
				-
				3
				-To sell USD
				against the foreign currencyGBP
				Nominal amount
				22
				-
				-
				-
				-
				-
				22
				-Average contract
				rate
				0.535
				-
				-
				-
				-
				-AUD
				Nominal amount
				89
				-
				-
				-
				-
				-
				89
				2Average contract
				rate
				1.381
				-
				-
				-
				-
				-BRL
				Nominal amount
				23
				45
				-
				-
				-
				-
				68
				7Average contract
				rate
				2.514
				2.669
				-
				-
				-
				-ISK
				Nominal amount
				9
				-
				-
				-
				-
				-
				9
				-Average contract
				rate
				74.26
				-
				-
				-
				-
				-  -37-  2011and
				Nominal
				Fair(in US$
				millions, except contract rates)
				2006
				2007
				2008
				2009
				2010
				Thereafter
				Amount
				ValueCZK
				Nominal amount
				1
				-
				-
				-
				-
				-
				1
				-Average contract
				rate
				22.31
				-
				-
				-
				-
				-Other
				Nominal amount
				1
				-
				-
				-
				-
				-
				1
				-To buy EUR
				against the foreign currencyUSD
				Nominal amount
				655
				21
				-
				-
				-
				-
				676
				38Average contract
				rate
				1.204
				1.201
				-
				-
				-
				-GBP
				Nominal amount
				34
				1
				-
				-
				-
				-
				35
				-Average contract
				rate
				0.691
				0.694
				-
				-
				-
				-CAD
				Nominal amount
				4
				2
				-
				-
				-
				-
				6
				-Average contract
				rate
				1.462
				1.525
				-
				-
				-
				-To sell EUR
				against the foreign currencyUSD
				Nominal amount
				662
				24
				12
				1
				1
				2
				702
				(34)Average contract
				rate
				1.216
				1.223
				1.113
				1.333
				1.349
				1.374GBP
				Nominal amount
				22
				-
				-
				-
				-
				-
				22
				-Average contract
				rate
				0.688
				-
				-
				-
				-
				-CHF
				Nominal amount
				33
				5
				4
				-
				-
				-
				42
				-Average contract
				rate
				1.550
				1.522
				1.506
				-
				-
				-NOK
				Nominal amount
				5
				-
				-
				-
				-
				-
				5
				-Average contract
				rate
				7.946
				-
				-
				-
				-
				-CAD
				Nominal amount
				1
				-
				-
				-
				-
				-
				1
				-Average contract
				rate
				1.422
				-
				-
				-
				-
				-  -38-  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 June 30, 2005. 2010and
				Nominal
				Fair(in US$
				millions, except contract rates)
				2005
				2006
				2007
				2008
				2009
				Thereafter
				Amount
				ValueFORWARD
				CONTRACTSTo buy USD
				against the foreign currencyGBP
				Nominal amount
				28
				6
				-
				-
				-
				-
				34
				-Average contract
				rate
				0.556
				0.571
				-
				-
				-
				-CHF
				Nominal amount
				13
				15
				-
				-
				-
				-
				28
				1Average contract rate
				1.228
				1.239
				-
				-
				-
				-JPY
				Nominal amount
				4
				-
				-
				-
				-
				-
				4
				-Average contract rate
				108.4
				-
				-
				-
				-
				-Other
				Nominal amount
				1
				-
				-
				-
				-
				-
				1
				-To sell USD
				against the foreign currencyGBP
				Nominal amount
				54
				3
				-
				-
				-
				-
				57
				(2)Average contract rate
				0.539
				0.540
				-
				-
				-
				-CHF
				Nominal amount
				5
				1
				-
				-
				-
				-
				6
				-Average contract rate
				1.201
				1.313
				-
				-
				-
				-AUD
				Nominal amount
				110
				205
				-
				-
				-
				-
				315
				2Average contract rate
				0.741
				0.751
				-
				-
				-
				-Other
				Nominal amount
				1
				-
				-
				-
				-
				-
				1
				-To sell EUR
				against the foreign currencyUSD
				Nominal amount
				380
				1,277
				24
				10
				-
				-
				1,691
				(28)Average contract rate
				1.246
				1.198
				1.222
				1.088
				-
				-GBP
				Nominal amount
				8
				-
				-
				-
				-
				-
				8
				-Average contract rate
				0.708
				-
				-
				-
				-
				-CHF
				Nominal amount
				24
				20
				-
				-
				-
				-
				44
				(1)Average contract rate
				1.521
				1.495
				-
				-
				-
				-CZK
				Nominal amount
				6
				-
				-
				-
				-
				-
				6
				-Average contract rate
				30.05
				-
				-
				-
				-
				-ZAR
				Nominal amount
				2
				1
				-
				-
				-
				-
				3
				-Average contract rate
				8.103
				8.043
				-
				-
				-
				-Other
				Nominal amount
				2
				-
				-
				-
				-
				-
				2
				-To buy EUR
				against the foreign currencyUSD
				Nominal amount
				251
				59
				21
				-
				-
				-
				331
				8Average contract
				rate
				1.205
				1.090
				1.201
				-
				-
				-GBP
				Nominal amount
				25
				9
				-
				-
				-
				-
				34
				(2)Average contract rate
				0.700
				0.715
				-
				-
				-
				-CHF
				Nominal amount
				2
				-
				-
				-
				-
				-
				2
				-Average contract rate
				1.524
				-
				-
				-
				-
				-AUD
				Nominal amount
				7
				-
				-
				-
				-
				-
				7
				(1)Average contract rate
				1.759
				-
				-
				-
				-
				-  -39-   2010and
				Nominal
				Fair(in US$
				millions, except contract rates)
				2005
				2006
				2007
				2008
				2009
				Thereafter
				Amount
				ValueJPY
				Nominal amount
				5
				-
				-
				-
				-
				-
				5
				-Average contract rate
				134.3
				-
				-
				-
				-
				-Other
				Nominal amount
				4
				1
				-
				-
				-
				-
				5
				-To buy CHF
				against the foreign currencyAUD
				Nominal amount
				1
				-
				-
				-
				-
				-
				1
				-Average contract rate
				1.107
				-
				-
				-
				-
				-JPY
				Nominal amount
				1
				-
				-
				-
				-
				-
				1
				-Average contract rate
				85.96
				-
				-
				-
				-
				-DKK
				Nominal amount
				1
				-
				-
				-
				-
				-
				1
				-Average contract rate
				0.206
				-
				-
				-
				-
				-To sell CHF
				against the foreign currencyOther
				Nominal amount
				1
				-
				-
				-
				-
				-
				1
				-OPTIONSTo buy USD against the foreign currencyEUR
				Nominal amount
				48
				18
				-
				-
				-
				-
				66
				(2)Average contract rate
				0.800
				0.800
				-
				-
				-
				-To sell USD
				against the foreign currencyEUR
				Nominal amount
				50
				137
				20
				-
				-
				-
				207
				6Average contract rate
				0.863
				0.759
				0.758
				-
				-
				-GBP
				Nominal amount
				2
				-
				-
				-
				-
				-
				2
				-Average contract rate
				0.585
				-
				-
				-
				-
				-  Any negative impact of currency movements
		on the currency contracts that the Company has entered into to hedge
		identifiable foreign currency commitments to purchase 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 million.  For accounting
		policies relating to currency contracts, see note 3 - Summary of
		Significant Accounting Policies on page 70 of the Company's most recent
		annual report. Derivative Commodity Contracts The effect of a reduction of 10% in
		aluminum prices on the Company's aluminum forward and options contracts
		outstanding at June 30, 2006 would be to increase net income over the
		period ending December 31, 2007 by approximately $111 ($55 in 2006 and
		$56 in 2007).  As of June 30, 2005, such sensitivity would have been to
		increase net income over the period ending December 31, 2007 by $88 ($45
		in 2005, $37 in 2006 and $6 in 2007).  The results as of June 30, 2006
		reflect a 10% reduction from the June 30, 2006, three-month LME aluminum
		closing price of $2,630 per tonne and assume an equal 10% drop has
		occurred throughout the aluminum forward price curve existing as at June
		30, 2006.  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. -40-  Item 4.   Controls and Procedures a)              Evaluation
		of Disclosure Controls and Procedures As at June 30, 2006,
		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 June 30, 2006. 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 June 30, 2006 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 2006.  -41-
  PART II.  OTHER INFORMATION Items
		1., 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 second quarter of 2006, the Company issued 328,807 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 $9.7 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 Shares4 April 2006
				409
				
				10 May 2006
				100,716
				
				2 June 2006
				4,82818 April 2006
				40,686
				
				11 May 2006
				37,722
				
				5 June 2006
				63721 April 2006
				34,677
				
				12 May 2006
				26,848
				
				6 June 2006
				23926 April 2006
				398
				
				15 May 2006
				7,338
				
				20 June 2006
				2327 April 2006
				30,597
				
				16 May 2006
				2,435
				
				21 June 2006
				58028 April 2006
				3,209
				
				17 May 2006
				3,271
				
				22 June 2006
				3193 May 2006
				9,858
				
				18 May 2006
				2,073
				
				23 June 2006
				4094 May 2006
				7,539
				
				23 May 2006
				409
				
				27 June 2006
				2615 May 2006
				1,116
				
				30 May 2006
				1,2749 May 2006
				10,934
				
				1 June 2006
				2  -42-   Item 4.      Submission of Matters to a Vote of Security Holders The Annual Meeting of Shareholders of Alcan was held on April 27, 2006.
		At the Annual Meeting:      on a vote by show of hands,
		Messrs. Roland Berger, L. Denis Desautels, Richard B. Evans, L. Yves
		Fortier, Jean-Paul Jacamon, Yves Mansion, Gwyn Morgan, H. Onno Ruding,
		Guy Saint-Pierre, Gerhard Schulmeyer, Paul M. Tellier and Milton K.
		Wong, and Mrs. Christine Morin-Postel were elected as directors of Alcan
		to serve until the close of the next annual meeting or until they cease
		to hold office as such;

		as stated in the Form 8-K dated April 27, 2006, Messrs. Travis Engen and
		William R. Loomis did not stand for re-election as Directors at the 2006
		Annual Meeting;      on a vote by show of hands,
		PricewaterhouseCoopers LLP was appointed as Auditors to serve until the
		close of the next annual meeting; and      on a vote by ballot, the
		Shareholder Proposal relating to the Utkal bauxite mine and alumina
		refinery project in India was rejected, with 78,022,339 Shares (36.82%
		of the Shares present) voted "for" and 133,858,395 Shares (63.18% of the
		Shares present) voted "against".  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.
  -43-  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:

	9 August 2006                                                     
	By: /s/  Cesidio Ricci Cesidio Ricci Vice President and Controller (A Duly Authorized Officer) -44-    EXHIBIT INDEX Exhibit Number                                                                  
	Description   (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.  -45-