Aluminum smelting is a highly electricity intensive operation. Most smelters have energy agreements in place to buy large quantities of electricity at good rates. So to compete in this environment, you need the same thing. You also need to be close to the power generation source, so the power transport costs aren’t too high. If you drag all that electricity a long distance, the power losses are too high.
A regulator’s decision to reject a power sales agreement between aluminum giant Alcan Inc. and Crown-owned British Columbia Hydro and Power Authority has elated those who fought against the deal, but raises questions about whether Alcan will go ahead with a planned $2-billion smelter upgrade in Kitimat.