Exhibit 10.4

                            TIME-BASED STOCK OPTION GRANT
                                PURSUANT TO THE KAISER
                          1997 OMNIBUS STOCK INCENTIVE PLAN


               1.   GRANT OF STOCK OPTION.  Kaiser Aluminum Corporation
                    ---------------------
          ("KAC") and Kaiser Aluminum & Chemical Corporation ("KACC"), both
          Delaware   corporations  (collectively,  the  "Company"),  hereby
          evidence  that  the  Company has granted to RAYMOND J. MILCHOVICH
          ("Optionee")  the right, privilege and option as herein set forth
          (the  "Stock Option") to purchase 750,000 shares of common stock,
          $.01  par  value  per  share,  of KAC (as more fully described in
          Optionee's Employment Agreement (the "Employment Agreement") with
          KACC attached herewith as Attachment I, which is incorporated
                                    ------------
          herein and made a part hereof, the "Option Shares") in accordance
          with the terms of this document (this "Stock Option Grant").

               The  Stock  Option  is  granted  pursuant to the Kaiser 1997
          Omnibus  Stock  Incentive Plan (the "Plan") and is subject to the
          provisions  of  the  Plan,  a copy of which has been furnished to
          Optionee  and  which is hereby incorporated in and made a part of
          this  Stock  Option  Grant,  as well as to the provisions of this
          Stock  Option Grant.  By acceptance of the Stock Option, Optionee
          agrees  to  be  bound by all of the terms, provisions, conditions
          and limitations of the Plan and this Stock Option Grant.

               All  capitalized  terms  used herein shall have the meanings
          provided  in  the  Plan  document  unless  otherwise specifically
          provided  in this Stock Option Grant or the Employment Agreement,
          including Attachment II attached herewith, which is incorporated
                    -------------
          herein   and  made  a  part  hereof.    The  Stock  Option  is  a
          Nonqualified  Stock  Option under the Plan and is not intended to
          qualify  as  an  "incentive  stock  option" within the meaning of
          Section 422 of the Code.

               All Option Shares, when issued to Optionee upon the exercise
          of this Stock Option, shall be fully paid and nonassessable.

               2.   OPTION TERM.  Subject to earlier termination as
                    -----------
          provided herein, or in the Plan, the Stock Option shall expire on
          June  1,  2009.    The period during which the Stock Option is in
          effect shall be referred to as the "Option Period".

               3.   OPTION EXERCISE PRICE.  The exercise price per Option
                    ---------------------
          Share  (including  any  Attributable  Securities,  as  defined in
          Attachment II) (the "Option Price") at which Optionee may
          --------------
          purchase Option Shares subject to the Stock Option shall be equal
          to  the  remainder  of (i) the Base Exercise Price (as defined in
          Attachment II) minus (ii) the Distributed Cash Value (as defined
          -------------
          in Attachment II) determined as of the date of exercise.  The
             -------------
          Option  Price  shall also be subject to adjustment as provided in
          the  Plan  and this Stock Option Grant.  The Company shall notify
          Optionee  within  thirty  (30)  days of each change in the Option
          Price.

               4.   VESTING.  The Stock Option may be exercised during the
                    -------
          Option Period only to the extent it has become a "Vested Option".
          Provided  Optionee's  Qualified  Service  Period  (as  defined in
          Attachment II) has not previously terminated, the Stock Option
          --------------
          shall  become a "Vested Option" as to 20% of the Option Shares at
          each Base Exercise Price as of 12:01 a.m. Houston time on January
          1,  2001, and an additional 20% of the Option Shares at each Base
          Exercise  Price as of 12:01 a.m. Houston time on January 1, 2002,
          2 0 03,  2004,  and  2005,  respectively.    Notwithstanding  the
          preceding  sentence,  the  Stock  Option  shall  become a "Vested
          Option"  to  the  extent  that  Sections  2,  3,  4  or  5 of the
          Employment Agreement provide that the Stock Option shall vest and
          become exercisable.

               5.   METHOD OF EXERCISE.  To exercise the Stock Option,
                    -------------------
          Optionee  shall deliver written notice to the Company stating the
          Base  Exercise  Price and number of Option Shares with respect to
          which  the  Stock Option is being exercised together with payment
          for such Option Shares.  Payment shall be made (i) in cash or its
          equivalent,  (ii)  by  tendering  previously  acquired Shares (as
          defined in Attachment II) having an aggregate Fair Market Value
                     -------------
          (as  defined  in  the  Plan) at the time of exercise equal to the
          total  Option  Price  for  such  Option Shares (provided that the
          Shares  which are tendered must have been held by Optionee for at
          least  six  months  prior  to  their tender to satisfy the Option
          Price), or (iii) by a combination of (i) and (ii).

               6.   TERMINATION OF OPTIONEE'S EMPLOYMENT.  Termination of
                    ------------------------------------
          Optionee's employment as a regular full-time salaried employee of
          KAC, a Subsidiary (as defined in Attachment II), or any branch,
                                           -------------
          unit  or  division  of KAC or any Subsidiary ("Employment") shall
          affect Optionee's rights under the Stock Option as follows:

                    (a)  T e rmination  by  the  Company  for  Cause.    If
               Optionee's  Employment  is  terminated by the Company at any
               time  for  Cause  (as  defined in the Employment Agreement),
               then   (i)  the  Option  Period  shall  terminate  and  (ii)
               O p tionee's  right  to  exercise  the  Stock  Option  shall
               terminate, in each case immediately upon Optionee's becoming
               subject to termination of Employment for Cause.

                    (b)  Termination  by  the Company Other than for Cause.
               If  Optionee's Employment is terminated by the Company prior
               to January 2, 2005, other than as a result of termination of
               O p t ionee's  Employment  for  Cause  (as  defined  in  the
               Employment  Agreement),  then  (i)  the Stock Option and the
               Option  Period shall not terminate and (ii) the Stock Option
               shall thereafter be exercisable as to all Option Shares from
               and  including  the  date  of  such  termination through and
               including the end of the Option Period.

                    (c)  O t her  Termination.    If  Optionee's  Qualified
               Service  Period  terminates  prior to January 2, 2005, other
               than  as a result of termination of Optionee's Employment by
               the Company, then (i) the Stock Option and the Option Period
               shall not terminate but the Stock Option shall thereafter be
               exercisable in accordance with the provisions of Sections 2,
               3, 4 or 5 of the Employment Agreement.

               The  Stock  Option  may  be exercised by Optionee or, in the
          case  of  death,  by  the executor or administrator of Optionee's
          estate,  or the person or persons to whom Optionee's rights under
          the  Stock Option shall pass by will or by the applicable laws of
          descent  and  distribution,  or  in  the  case  of Disability (as
          defined  in  the  Employment  Agreement),  by Optionee's personal
          representative  consistent  with the provisions of the Employment
          Agreement.

               7.   REORGANIZATIONS; REPURCHASE OF STOCK OPTION.
                    --------------------------------------------

                    (a)  F r e edom   to   Reorganize   the   Company   and
               Subsidiaries.    The existence of the Stock Option shall not
               affect  in any way the right or power of the Company and its
               Subsidiaries  or  the  issuers of Attributable Securities or
               its  or  their stockholders to make or authorize any and all
               Distribution Events (as defined in Attachment II) and any
                                                  --------------
               a n d     all    other    adjustments,    recapitalizations,
               reorganizations or other changes in the capital structure or
               business  of  the Company or its Subsidiaries or the issuers
               of  Attributable Securities, any and all issuances of bonds,
               debentures,  common  stock,  preferred  or  prior preference
               stock,  warrants, rights or other securities, whether or not
               affecting  the  Option  Shares  or  the  rights thereof, any
               dissolution or liquidation of the Company or any Subsidiary,
               any sale or other divestiture or transfer of all or any part
               of  the  assets or business of the Company or any Subsidiary
               or  any  issuer  of  Attributable Securities and any and all
               other  corporate  acts  or proceedings, whether of a similar
               c h a r acter  or  otherwise  (collectively,  including  any
               Distribution Events, "Reorganizations").

                    (b)  Spin-Offs.    If the Board of Directors authorizes
               any  Distribution  Event or other Reorganization as a result
               of which holders of Shares (as defined in Attachment II)
                                                         -------------
               become  entitled, in their capacities as holders, to receive
               Marketable  Securities, the Board of Directors shall, to the
               extent  reasonably practicable, cause the Company to provide
               for  or  require:  (i) that the issuer(s) of such Marketable
               Securities shall undertake to issue and deliver to Optionee,
               upon  any  subsequent  exercise  of  the  Stock Option, such
               Marketable  Securities  as  Optionee  would have received if
               Optionee  had  so  exercised  the Stock Option prior to such
               D i s t ribution  Event  or  other  Reorganization  and  had
               p a rticipated  therein  (and  in  any  and  all  subsequent
               Distribution Events or other Reorganizations) to the maximum
               e x t ent  allowed  to  holders  of  Shares  (including  any
               Attributable  Securities)  outstanding  at  the time of such
               Distribution  Event  or other Reorganization; (ii) that such
               Marketable  Securities  shall  be so issued and delivered to
               Optionee  pursuant  to  an  effective registration statement
               under  the  Securities Act of 1933, as amended, or otherwise
               free of any restriction on resale thereof by Optionee, other
               than any restriction on resale arising from Optionee's being
               an  Affiliate  or  Insider (as such terms are defined in the
               Plan)  of such issuer; (iii) that such Marketable Securities
               shall  be  so  issued  and  delivered without any agreement,
               condition,  payment or other consideration being required of
               Optionee  or  the Company; (iv) that such issuer(s) shall at
               all  times  reserve for issuance a sufficient amount of such
               M a rketable   Securities   to   fulfill   all   obligations
               c o ntemplated  hereunder;  and  (v)  that  upon  each  such
               i s s u ance,  such  Marketable  Securities  shall  be  duly
               authorized,  validly  issued,  fully paid and nonassessable.
               The  Company  shall also provide for or require that: (x) in
               the  event  any such issuer shall fail or be unable to issue
               and   deliver  to  Optionee  any  Marketable  Securities  as
               provided  in  the  preceding  sentence, such issuer shall be
               obligated, in lieu of issuing and delivering such Marketable
               Securities,  to  pay  to  Optionee in cash, immediately upon
               exercise  of  the  Stock  Option,  the  Market Value of such
               Marketable  Securities determined as of the date of exercise
               of  the  Stock  Option;  and (y) in the event the Company is
               obligated  to  make  a  cash payment to Optionee pursuant to
               Paragraph  8(b), such issuer shall be obligated to reimburse
               the  Company for a part of such payment proportionate to the
               D i s t ributed  Cash  Value  attributable  to  Attributable
               Securities  of  such  issuer compared to the total amount of
               Distributed Cash Value.

                    (c)  Right to Repurchase Stock Option.  Upon receipt of
               a  notice  of exercise, the Company shall have the right but
               not the obligation to repurchase, and thereby to satisfy all
               of  the  Company's obligations under, the Stock Option as to
               the  number of Option Shares as to which the Stock Option is
               exercised  by  paying Optionee in cash an amount, net of any
               taxes  required  to be withheld, equal to the sum of (A) the
               product  of  (i) the number of Option Shares as to which the
               Stock  Option  is  exercised  multiplied by (ii) the amount,
               determined  as  of  such  date  of  exercise,  equal  to the
               remainder  of (x) the Market Value of one Option Share minus
               (y)  the  Option  Price plus (B) the amount of cash, if any,
               payable  to  Optionee  pursuant  to  Paragraph 8(b).  If the
               Option  Shares for which the Stock Option is being exercised
               a r e   subject  to  different  Option  Prices,  a  separate
               calculation  shall be made with respect to each Option Price
               and such totals aggregated.

               8.   ADJUSTMENTS.
                    ------------

                    (a)  In  the  event  of  any  one  or more Distribution
               Events  or  other Reorganizations affecting the Stock Option
               and  not  already adjusted for under Paragraph 7, the Option
               Price  and  the number of Option Shares subject to the Stock
               Option  shall  be  appropriately  adjusted  by  the Board of
               Directors.    In  addition, the Board of Directors shall, as
               permitted  by Section 3.2, Section 16.2 and other provisions
               of  the Plan, construe and interpret the Plan and this Stock
               Option  Grant  and make all appropriate adjustments in order
               to  prevent  dilution  or  enlargement  of  the  benefits or
               potential benefits intended to be made available to Optionee
               under this Stock Option Grant and the Plan.

                    (b)  Without  limitation to the foregoing, in the event
               that  the amount of Distributed Cash Value as of any date of
               exercise of the Stock Option is equal to or greater than the
               Base  Exercise  Price  for the Option Shares with respect to
               which this Stock Option is being exercised, the Option Price
               for  each  such Option Share shall be deemed to be $.01, and
               the  Company,  in  addition to issuing such Option Shares to
               Optionee,  shall  pay  to  Optionee  in respect of each such
               Option Share an amount of cash equal to the remainder of (i)
               the  amount  of  the  Distributed Cash Value minus (ii) such
               Base Exercise Price.

               9.   NO RIGHTS IN OPTION SHARES.  Optionee shall have no
                    --------------------------
          rights  as  a  stockholder in respect of Option Shares until such
          Optionee becomes the holder of record of such Option Shares.

               10.  OPTION SHARES RESERVED.  The Company shall at all times
                    -----------------------
          during  the  Option Period reserve and keep available such number
          of  Shares  as  will be sufficient to satisfy the requirements of
          this Stock Option.

               11.  NONTRANSFERABILITY OF STOCK OPTION.  The Stock Option
                    -----------------------------------
          granted  pursuant  to this Stock Option Grant is not transferable
          other  than  by  will, the laws of descent and distribution or by
          qualified  domestic  relations  order.   The Stock Option will be
          exercisable  during  Optionee's  lifetime  only by Optionee or by
          Optionee's guardian or legal representative.  No right or benefit
          hereunder  shall  in  any  manner be liable for or subject to any
          debts, contracts, liabilities, or torts of Optionee.

               12.  AMENDMENT AND TERMINATION.  No amendment or termination
                    --------------------------
          of  the  Stock  Option shall be made by the Board of Directors or
          the  Committee  (as  defined in the Plan) at any time without the
          written  consent  of  Optionee.    No  amendment of the Plan will
          adversely  affect  the rights, privileges and options of Optionee
          under the Stock Option without the written consent of Optionee.

               13.  NO GUARANTEE OF EMPLOYMENT.  The Stock Option shall not
                    --------------------------
          confer  upon  Optionee  any  right with respect to continuance of
          Employment or other service with the Company or any Subsidiary or
          Affiliate,  nor  shall it interfere in any way with any right the
          Company  or  any  Subsidiary or Affiliate would otherwise have to
          terminate  such  Optionee's  Employment  or  other service at any
          time.

               14.  WITHHOLDING OF TAXES.  The Company shall have the right
                    ---------------------
          to  deduct  or  withhold,  or  require  Optionee  to remit to the
          Company,  an  amount sufficient to satisfy all federal, state and
          local  taxes,  domestic or foreign, required by law or regulation
          to  be  withheld  with respect to any taxable event arising under
          this  Stock Option Grant or any exercise or other action or event
          hereunder.

               15.  NO GUARANTEE OF TAX CONSEQUENCES.  Neither the Company
                    ---------------------------------
          nor  any  Subsidiary  or Affiliate, nor the Board of Directors or
          any Committee, makes any commitment or guarantee that any federal
          or  state  tax treatment will apply or be available to any person
          eligible for benefits under the Stock Option.

               16.  SEVERABILITY.  In the event that any provision of the
                    -------------
          Stock Option shall be held illegal, invalid, or unenforceable for
          any  reason,  such  provision shall be fully severable, but shall
          not  affect the remaining provisions of the Stock Option, and the
          Stock  Option  shall be construed and enforced as if the illegal,
          invalid,  or  unenforceable  provision  had  never  been included
          herein.

               17.  GOVERNING LAW.  The Stock Option shall be construed in
                    -------------
          accordance  with  the  laws  of  the State of Texas to the extent
          federal law does not supersede and preempt Texas law.

               Executed effective as of the 1st day of June, 1999.

                                    "COMPANY"

                                    KAISER ALUMINUM CORPORATION

                                    By:  /S/ John Barneson
                                    Printed Name:  John Barneson
                                    T i tle:    Vice  President  and  Chief
                                    Administrative Officer

                                    KAISER ALUMINUM & CHEMICAL CORPORATION

                                    By:  /S/ John Barneson
                                    Printed Name:  John Barneson
                                    T i tle:    Vice  President  and  Chief
                                    Administrative Officer




               Accepted effective as of the 1st day of June, 1999.


                                    "OPTIONEE"

                                    /S/  Raymond J. Milchovich
                                    Printed Name:  Raymond J. Milchovich






                                                               ATTACHMENT I




               Attachment  I  is the Employment Agreement, dated as of June
          1, 1999, between KACC and Raymond J.  Milchovich, which was filed
          as  Exhibit  10.1  to  the  Report on Form 10-Q for the quarterly
          period ended June 30, 1999, filed by KAC, File No.  1-9477.





                                                              ATTACHMENT II

                            TIME-BASED STOCK OPTION GRANT

                       DEFINITIONS APPLICABLE TO CERTAIN TERMS

          "AFFILIATE" -- see Section 2.1 of the Plan.

          "ATTRIBUTABLE SECURITIES" - see the definition of "Option Share".

          "BASE  EXERCISE  PRICE" means $9.50 per Option Share with respect
          to 150,000 Option Shares; $12.35 per Option Share with respect to
          300,000  Option  Shares; and $14.25 per Option Share with respect
          to 300,000 Option Shares.

          "DISTRIBUTED CASH VALUE" means, as of any determination date, the
          aggregate  amount  of  cash  (other  than  regular quarterly cash
          dividends, if any) plus the aggregate value, as determined by the
          Board  of  Directors  as  of  the  date  of  distribution, of all
          p r o p e rty  (other  than  cash  and  Attributable  Securities)
          distributed  or  set  aside for distribution to the holder of one
          Original  Share  and  all Attributable Securities, if any, during
          t h e   period  commencing  June  1,  1999,  and  ending  on  the
          determination date.

          "DISTRIBUTION EVENTS" means any and all distributions, dividends,
          recapitalizations,  forward  or  reverse splits, reorganizations,
          mergers,  consolidations,  spin-offs,  combinations, repurchases,
          share  exchanges,  or  other  similar or substantially equivalent
          corporate  transactions  or  events  in  which  the  holder  of a
          security  becomes,  as such, entitled to receive cash, securities
          or  other  property  in  addition  to  or in exchange for or upon
          conversion of such security.

          "EMPLOYMENT" -- see Paragraph 6 of this Stock Option Grant.

          "INSIDER" -- see Section 2.19 of the Plan.

          "KAC" -- see Paragraph 1 of this Stock Option Grant.

          "KACC" -- see Paragraph 1 of this Stock Option Grant.

          "MARKET  VALUE"  means, as of any Trading Day, the average of the
          highest  and  lowest sales prices as reported by the consolidated
          tape  (or,  if  such  prices  are  not quoted, the average of the
          quoted  closing bid and asked prices) on such Trading Day for one
          Option  Share (including, as applicable, the Market Values of any
          Attributable  Securities).    In  the  event that sales prices or
          closing  bid  and  asked  prices  are  not quoted on a particular
          Trading  Day,  the  Market  Value  for  that Trading Day shall be
          deemed  to  be  the  Market  Value  for the immediately preceding
          Trading  Day.   In the event that any Attributable Security shall
          cease  to  be a Marketable Security, it shall thereupon be deemed
          to  have  no  further Market Value and shall be deemed instead to
          have,  as of the date it ceases to be a Marketable Security, such
          Distributed  Cash  Value  as  shall be determined by the Board of
          Directors.

          "MARKETABLE  SECURITIES"  means securities (a) of a class that is
          registered under the Securities Exchange Act of 1934, as amended,
          (b)  for which sales prices or bid and asked prices are regularly
          quoted  and  (c)  that,  if issued and delivered to Optionee upon
          exercise  of  the  Stock  Option,  would  not  be  subject to any
          restriction  on  resale,  other than any restriction arising from
          Optionee's  being  an  Affiliate  or  Insider  (as such terms are
          defined in the Plan) of the issuer of such Marketable Securities.

          "OPTION PERIOD" -- see Paragraph 2 of this Stock Option Grant.

          "OPTION PRICE" -- see Paragraph 3 of this Stock Option Grant.

          "OPTION  SHARE"  means  (a)  one  Share as constituted on June 1,
          1999,  (an  "Original  Share") and (b) in the event of any one or
          more  successive  Distribution  Events, all Marketable Securities
          ("Attributable  Securities")  into which or for which an Original
          Share   or  any  Attributable  Securities  may  be  converted  or
          exchanged  or that a stockholder may have the right to receive in
          respect of such Original Share or Attributable Securities.

          "OPTIONEE" -- see Paragraph 1 of this Stock Option Grant.

          "ORIGINAL SHARE" -- see the definition of "Option Share".

          "PLAN" -- see Paragraph 1 of this Stock Option Grant.

          "QUALIFIED  SERVICE  PERIOD"  means the period from and including
          January  1,  2000,  through  and  including  the  earlier  of (a)
          December 31, 2004, or (b) the date immediately preceding the date
          of termination of Optionee's Employment; provided , however, that
                                                   --------   --------
          if  Optionee's  Employment  has  not terminated prior to the date
          that  a  proposed  transaction  is  announced by KAC or KACC that
          would  cause KAC or KACC, respectively, to experience a Change in
          Control  (as  defined in the Employment Agreement with respect to
          KACC)  and  such  transaction is subsequently consummated so that
          KAC  or  KACC  experiences  a  Change in Control, then Optionee's
          Qualified  Service Period shall be deemed to continue through the
          date  of  consummation  of such transaction and Change in Control
          unless  Optionee's  Employment  is  terminated by the Company for
          Cause or by Optionee.

          "REORGANIZATION"  --  see  Paragraph  7(a)  of  this Stock Option
          Grant.

          "SHARE"  means  one  share  of  common  stock, par value $.01 per
          share, of KAC.

          "STOCK OPTION" -- see Paragraph 1 of this Stock Option Grant.

          "SUBSIDIARY"  --  see Section 2.32 of the Plan.  For avoidance of
          doubt,  KACC  shall  be considered a Subsidiary of KAC so long as
          KAC  has  a  majority  voting  interest in KACC, and KAC shall be
          considered  to  have  a majority voting interest whether it holds
          such   interest  directly  or  indirectly  through  one  or  more
          Subsidiaries.

          "TRADING  DAY"  means  as  to  an  Option  Share  (including  any
          Attributable  Securities)  a day when the New York Stock Exchange
          (or  other  principal  securities  exchange, including Nasdaq, on
          which such securities are traded) is open.