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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 September 30, 2002

Commission file number 1-3677

ALCAN INC.
(Exact name of registrant as specified in its charter)

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 P    No ____

At September 30, 2002, the registrant had 321,308,059 shares of common stock (without nominal or par value) outstanding.

TABLE OF CONTENTS

PART I - Financial Information

        Item 1 - Financial Statements

        Notes To Interim Consolidated Financial Statements

        Item 2 - Management's Discussion and Analysis of Financial Conditions and Results of Operations

        Item 4 - Controls and Procedures

PART II - Other Information

        Item 6 (a) - Exhibits

        Item 6 (b) - Report on Form 8-K

SIGNATURE

        Certification

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 consolidated subsidiaries.

Item 1.  Financial Statements

ALCAN INC.

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

2

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

3

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

4

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

5

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

6

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

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ALCAN INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2002
(Unaudited)

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

1.   ACCOUNTING POLICIES

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, except for the accounting changes described in note 2.  The interim financial statements do not include all of the financial statement disclosures included in the annual financial statements prepared in accordance with Canadian generally accepted accounting principles (GAAP) and therefore should be read in conjunction with the most recent annual financial statements.

2.   ACCOUNTING CHANGES

Goodwill and Other Intangible Assets

On January 1, 2002, the Company adopted the new standard of the Canadian Institute of Chartered Accountants (CICA) concerning goodwill and other intangible assets.  Under this standard, goodwill and other intangible assets with an indefinite life are no longer amortized but are carried at the lower of carrying value and fair value.  Goodwill and other intangible assets with an indefinite life are tested for impairment on an annual basis.

An impairment of $748 was identified in the goodwill balance as at January 1, 2002 and was charged to opening retained earnings in 2002. Any further impairment arising subsequent to January 1, 2002 will be taken as a charge against income. As a result of the new standard, the Company no longer amortizes goodwill.  In 2001, the amounts of goodwill amortization for the third quarter and nine months were $19 and $55, respectively.

Business Combinations

As of January 1, 2002, the Company has adopted the new standard of the CICA for business combinations.  All business combinations are now required to be accounted for under the purchase method.

Deferred Foreign Exchange Translation Gains and Losses

As of January 1, 2002, the Company no longer amortizes the exchange gains and losses arising on the translation of long-term foreign currency denominated monetary assets and liabilities that have a fixed or ascertainable life extending beyond the end of the following fiscal year.  These exchange gains and losses are now absorbed in income immediately.

This standard has been applied retroactively and consequently, prior years' financial statements have been restated.  At December 31, 2001, Retained earnings have been decreased by $21 (2000: $18) and Deferred charges and other assets have been reduced by $21 (2000: $18). The transfer of an unamortized exchange loss of $21 (2000: $18) to Retained earnings from Deferred charges and other assets pertains to the long-term foreign currency denominated monetary assets and liabilities that existed at each year-end.

In the third quarter and nine months of 2002, an exchange loss of nil and $4 (2001: $2 and $4), respectively, on the translation of long-term foreign currency denominated monetary assets and liabilities, has been included in Other expenses (income) - net.

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2.   ACCOUNTING CHANGES (cont'd)

Stock-based Compensation

The CICA issued a new standard relating to the measurement of stock options and other stock-based compensation effective January 1, 2002.  Starting in the third quarter, this standard is being applied to both options granted after January 1, 2002 and unvested options outstanding at that date. This standard, which has been applied prospectively, encourages but does not require that the fair value method be used for transactions with employees.  For the first and second quarter, the standard was applied only to options granted after January 1, 2002.  If this standard had also been applied to the unvested options outstanding as at January 1, 2002, net income would have been reduced in the first quarter by $6 (net income per common share - basic and diluted by $0.03) and in the second quarter by $1 (net income per common share - basic and diluted by nil).  The method used by the Company is consistent with these new requirements; therefore, the Company is continuing to account for stock options granted to employees in the same manner as previously done.  The Company will continue to provide the required disclosures in connection with the fair value method in its quarterly and annual financial statements. Stock compensation arrangements that can be settled in cash result in the recognition of compensation expense.  If the Company had elected to recognize compensation expense for the options using the fair value method prescribed by this accounting standard, net income would have been reduced by $2 and $9 for the third quarter and nine months ended September 30, 2002, respectively and net income per common share (basic and diluted) would have been reduced by nil and $0.03 for the third quarter and nine months ended September 30, 2002, respectively.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for the option grants in the third quarter and nine months of 2002: dividend yield of 1.63% and 1.65%; expected volatility of 36.01% and 35.74%; risk-free interest rate of 3.22% and 3.50%; respectively, and an expected life of 6 years.  The weighted average fair values of options granted in the third quarter and nine months of 2002 were $7.68 and $8.65 per share, respectively, and are being amortized over their respective vesting periods.

Hedging Relationships

The CICA issued an accounting guideline which establishes certain conditions for when hedge accounting may be applied and which is effective for fiscal years beginning on or after July 1, 2003.  The Company is studying the new guideline but has not yet determined its impact.

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4.   RECONCILIATION OF CANADIAN AND U.S. GAAP

Differences relate principally to accounting for foreign currency translation, derivatives, post-retirement benefits, "available for sale" securities and goodwill impairment identified as at January 1, 2002.  Refer to the Company's 2001 Annual Report for an explanation of these differences, other than goodwill impairment, which is explained below.

Recently Adopted Accounting Standards

On January 1, 2002, the Company adopted FASB Statement 141, "Business Combinations", and FASB Statement 142, "Goodwill and Other Intangible Assets".  Both statements are the same as recently issued Canadian accounting standards except that goodwill impairment identified as at January 1, 2002 was charged to income as a cumulative effect of accounting change.  Under Canadian GAAP, an impairment loss of $748 was recognized as a charge to opening retained earnings in 2002.  See note 2, Accounting Changes, for a description of the impact on the Company and see note 7, Goodwill and Acquired Intangible Assets.

Beginning in 2002, the Company adopted FASB Statement 144, "Accounting for Impairment or Disposal of Long-lived Assets".  This statement amends previous accounting and disclosure requirements for impairments and disposals of long-lived assets.  The provisions of this new standard are generally to be applied prospectively.

Recently Issued Accounting Standards

FASB has issued Statement 143, "Accounting for Asset Retirement Obligations", which will be effective for the Company's fiscal year beginning on January 1, 2003.  The Company is studying this new standard but has not yet determined its impact.

FASB has recently issued Statement 146, "Accounting for Costs Associated with Exit or Disposal Activities", which will be effective for the Company's fiscal year beginning on January 1, 2003.  The provisions of this new standard are generally to be applied prospectively.

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The financial statements for the first quarter of 2002 were restated to reflect the charge of $748 for the impairment of goodwill.  The restatement resulted in a net loss of $595 under U.S. GAAP for the first quarter (net loss per common share - basic and diluted - of $1.86).

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As at September 30, 2002, Accumulated other comprehensive loss is comprised of deferred translation adjustments of $84, minimum pension liability of $(225) and unrealized gain on "available for sale" securities of $18.

5.   RESTRUCTURING, IMPAIRMENT AND OTHER SPECIAL CHARGES

Restructuring, impairment and other special charges of $657 pre-tax, which were recorded in the fourth quarter of 2001, included restructuring and asset impairment charges of $411 and other special charges of $246.

Restructuring and asset impairment charges

In the fourth quarter of 2001, the Company recorded charges of $411 pre-tax in Restructuring, impairment and other special charges as a result of a restructuring program aimed at safeguarding its competitiveness.  The aim of the restructuring program was twofold: to make the businesses more competitive in the face of the current economic difficulties; and to put them in the best position to meet future industry needs.  These aims are being achieved through cost reduction measures, exiting from non-core products and the consolidation of certain operations and are resulting in a series of plant sales, closures and divestments throughout the organization. The charges associated with this program consist of severance costs of $112 related to workforce reductions of approximately 2,200 employees, impairment of long-lived assets of $269 and other exit costs related to the shutdown of facilities of $30.

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5.   RESTRUCTURING, IMPAIRMENT AND OTHER SPECIAL CHARGES (cont'd)

The workforce reductions, which consist principally of manufacturing employees from all segments of the Company's worldwide operations, are comprised of:

• 500 employees - Primary Metal (principally Canada)

• 200 employees - Rolled Products, Americas and Asia

• 400 employees - Rolled Products, Europe (U.K. and Italy)

• 800 employees - Packaging (U.K., Canada, U.S. and other areas)

• 300 employees - Other operating segments

In the third quarter of 2002, the Company recorded charges of $6 pre-tax in Restructuring, impairment and other special charges relating to the restructuring program announced in 2001.  Included in this charge are asset impairment provisions of $13  (relating primarily to the extrusion operations in Pieve, Italy (Engineered Products)); and severance costs of $6  (relating to the extrusion operations in Malaysia and the light-gauge operations in Fairmont, West Virginia (Rolled Products Americas and Asia) and cable operations in North America (Engineered Products)); and partly offset by income of $13 (primarily from the write-back of excess contract loss provisions upon settlement with the customer (Engineered Products)).  Corresponding workforce reductions of approximately 320 employees were comprised of 250 employees in Rolled Products Americas and Asia and 70 employees relating to previous provisions (40 employees relating to Bauxite, Alumina and Specialty Chemicals and 30 employees relating to Packaging).  Also, in this quarter, the Company completed the sale of certain glass packaging operations located in Park Hills, Missouri, and Mays Landing, Williamstown and Milville, New Jersey for proceeds of $15 equal to book value.  As well, the Company announced the sale of its rolled product circles production unit at its Pieve plant in Italy; the sale is expected to be finalized in the fourth quarter of 2002.

As at September 30, 2002, approximately 1,730 of a total of 2,820 employees had been terminated, consisting of approximately 400 employees in the fourth quarter of 2001 and 1,330 employees in the first nine months of 2002.

In the second quarter of 2002, the Company recorded additional severance charges of $14 pre-tax principally relating to the closure of its Bracebridge plant in Ontario, Canada (Engineered Products).  Included in the charge of $14 was a non-cash expense of $5 relating to pension costs.  Corresponding workforce reductions of approximately 300 employees were comprised of 200 employees in Engineered Products (including 162 employees relating to the closure of the Bracebridge plant) and 100 employees in Packaging.  Also recorded in the second quarter of 2002 was a gain of $3 pre-tax on the sale of an investment.

In the first quarter of 2002, the Company recorded charges of $14 pre-tax.  The charges consisted of impairment for long-lived assets of $9 related to the exit from non-core products at its Borgofranco plant in Italy (Rolled Products Europe) and a loss of $5 on the sale of the Company's extrusion operations in Thailand arising principally from the realization of deferred translation losses.

Total impairment charges of $291 consisted of a charge of $269 in 2001 ($218 for assets to be held and used and $51 for assets held for disposal) and charges of $9 in the first quarter of 2002 (assets to be held and used) and $13 in the third quarter of 2002 (asset to be held and used).  These charges related principally to buildings, machinery and equipment and some previously capitalized project costs.  The impairment charge recorded for Burntisland in 2001 has been reclassified from "Assets held for disposal" to "Assets held and used" in the third quarter to reflect the Company's decision to close, rather than sell, the Burntisland facility.

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5.   RESTRUCTURING, IMPAIRMENT AND OTHER SPECIAL CHARGES (cont'd)

The cumulative impairment charge of $240 for assets to be held and used consisted of $45 for Bauxite, Alumina and Specialty Chemicals; $22 for Primary Metal; $14 for Rolled Products, Americas and Asia; $79 for Rolled Products, Europe; $16 for Engineered Products; $43 for Packaging; and $21 for Other.  In the context of the Company's objective of value maximization, a detailed business portfolio review was undertaken in 2001 to identify high cost operations, excess capacity and non-core products.  The impairment charge for assets held and used arose as a result of negative projected cash flows and recurring losses.  The charges principally related to the cold mill at the Rogerstone plant in the U.K. (Rolled Products, Europe); the foil facilities at Glasgow, U.K. (Packaging); the specialty chemicals plant at Burntisland, U.K. (Bauxite, Alumina and Specialty Chemicals) and the engineered cast products plant in Quebec (Primary Metal).  An impairment provision was recorded to the extent that the net recoverable amount, which approximates fair value based on discounted cash flows, was below the net book value.

The cumulative impairment charge of $51 for assets held for disposal consisted of $8 for Rolled Products, Americas and Asia; $31 for Rolled Products, Europe; and $12 for Packaging.  In the context of the Company's objective of value maximization, a detailed business portfolio review was undertaken in 2001 to identify high cost operations, excess capacity and non-core products.  The charges principally related to the extrusion operations in Malaysia and Thailand (Rolled Products, Americas and Asia); certain rolled products and recycling operations at the Pieve and Borgofranco plants in Italy (Rolled Products, Europe); and the Pharmatech rubber stopper and aluminum seals operations in the U.S. (Packaging).  An impairment provision was recorded to bring the net book value to net realizable value. These assets are expected to be disposed of by the end of 2002.  The assets held for disposal had:

• sales and operating revenues of $250 in 2001 (Rolled Products, Americas and Asia - $30; Rolled Products, Europe - $90; Packaging - $130) and $57 and $178 in the third quarter and nine months of 2002, respectively  (Rolled Products, Americas and Asia - $3 and $16; Rolled Products, Europe - $24 and $74; and Packaging - $30 and $88);
• net operating losses of nil in 2001 and the third quarter and nine months of 2002 for Rolled Products, Americas and Asia and Rolled Products, Europe, and $(10) in 2001 and $(4) and $(6) in the third quarter and nine months of 2002, respectively, for Packaging;
• assets of $200 at December 2001 (Rolled Products, Americas and Asia - $20; Rolled Products, Europe - $100; Packaging - $80) and $100 at September 2002 (Rolled Products, Americas and Asia - $10; and Rolled Products, Europe - $90);
• liabilities of $110 at December 2001 (Rolled Products, Americas and Asia - $10; Rolled Products, Europe - $30; Packaging - $70) and $45 at September 2002 (Rolled Products, Americas and Asia - $5; and Rolled Products, Europe - $40).

The restructuring program is expected to be completed in 2002, with the exception of the closure of facilities at Glasgow, U.K. in mid-2003 and the shut-down of one of the two cold mills at the Fairmont, West Virginia plant in the first quarter for 2003, as scheduled per the Company's plans.  The closure plans include the orderly shutdown of facilities after existing customer requirements have been satisfied and in some situations, the transfer of production operations to other facilities.  Of the reserve balance at September 30, 2002 of $99, approximately $28 will be paid out in 2003.

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5.   RESTRUCTURING, IMPAIRMENT AND OTHER SPECIAL CHARGES (cont'd)

The reserve balance and related cash payments and receipts for the restructuring and asset impairment charges consisted of :

Other Special Charges

In 2001, the Company increased its environmental reserves by $246 pre-tax to cover treatment costs of $150 for stored spent potlining (SPL) in Quebec and British Columbia, Canada, as well as to cover remediation costs of $96 relating to red mud disposal and other sites in Canada and the United Kingdom.  The charges were recorded on the income statement in Restructuring, impairment and other special charges and on the balance sheet, in Deferred credits and other liabilities ($235) and in Payables and accrued liabilities ($11).

In the second quarter of 2002, a write-back of $4 pre-tax for a portion of the environmental reserve relating to spent potlining that is recoverable was recorded on the income statement in Restructuring, impairment and other special charges and on the balance sheet, in Other receivables.

SPL, which is a waste material generated by the smelting process, needs to be treated in a safe and environmentally sound manner.  The Company's objectives have been to find the best alternative to stockpiling SPL and various technical studies were carried out to identify treatment alternatives that are economically viable.  Following these studies, which were completed in 2001, and in accordance with local laws and regulations, the Company intends to initiate a treatment program of all stored SPL.  The liability of $150 reflected the Company's best estimate of the cost to treat the stored SPL in Quebec and to have the SPL in British Columbia treated by a third party.  The amounts will be paid over the next twenty years.

The liability of $96 relating to red mud and other disposal sites reflected the Company's best estimate of the cost of rehabilitation.  Red mud is the normal residue associated with extracting alumina from bauxite.  The charge represents the cost to fill and seal the sites.

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6.   INTERIM INFORMATION BY OPERATING SEGMENT

The following presents selected information by operating segment, viewed on a stand-alone basis. Effective January 1, 2002, a new operating management structure comprised of six operating segments was put in place.  The six operating segments are Bauxite, Alumina and Specialty Chemicals; Primary Metal; Rolled Products, Americas and Asia; Rolled Products, Europe; Engineered Products; and Packaging.  Prior to 2002, there were four operating segments: Primary Metal; Aluminum Fabrication, Americas and Asia; Aluminum Fabrication, Europe; and Packaging. Comparative information has been restated to conform to the 2002 organizational structure. Transactions between operating segments are conducted on an arm's-length basis and reflect market prices.  Thus, earnings from the Primary Metal group represent mainly profit on metal produced by the Company, whether sold to third parties or used in the Company's Rolled Products, Engineered Products and Packaging groups.  Earnings from the Rolled Products, Engineered Products and Packaging groups represent only the fabricating profit on rolled, engineered and packaging 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 that the 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.  Some corporate office and certain other costs have been allocated to the respective operating segments. The operating segments are described below.

Bauxite, Alumina and Specialty Chemicals

This segment consists of a network of bauxite mines/deposits in five countries and alumina refineries in four countries, which supplies the primary metal operations and third-party sales of alumina and specialty chemicals.

Primary Metal

This segment produces primary aluminum in seven countries.  The alumina is sourced primarily from the Bauxite, Alumina and Specialty Chemicals segment and the ingot produced is used by the Company's fabricating businesses as well as sold to third-parties.  The segment produces value-added products in the form of sheet ingot, extrusion billet, wire bar and foundry ingot for end-use markets in consumer goods, transportation, building and construction and other industrial applications.

Rolled Products, Americas and Asia

This segment, which has an extensive network of 17 rolled products facilities in North and South America and Asia, manufactures sheet and light-gauge products, including can stock, automotive sheet and industrial products.  In addition, the segment has a well-established used beverage can recycling capability in North and South America.

Rolled Products, Europe

This segment has nine rolled products plants and serves a number of European markets with advanced value-added sheet products, including automotive sheet, lithographic sheet, industrial sheet, can sheet and foil stock.

Engineered Products

This segment develops, manufactures and sells value-added engineered products for a variety of applications, including extrusions, composites, systems and components for mass transportation and automotive applications and electrical cables.

Packaging

This segment has 79 plants in 15 countries and is focused on serving specific end-use markets: food, pharmaceutical, tobacco, cosmetics and some technical applications.

Intersegment and other

This classification includes the deferral or realization of profits on intersegment sales of aluminum as well as other non-operating items.

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