Quebec Premier Bernard Landry made the announcement in Quebec City, adding that the expansion of the Alouette smelter at Sept-Iles -- a project that includes Montreal's Alcan Inc. (AL.TO) -- is expected to be ready for 2005 and would create up top 500 jobs in primary aluminum production and transformation in the Canadian province.

Alexis Segal, spokesman for Alouette, told Reuters that the international consortium plans to ``more than double'' the smelter's production capacity. Segal said more details would be available next week.

In the decision, Quebec favored the expansion plan put forward by Alouette over a rival proposal by Alcoa Inc. (AA.N), the world's No. 1 aluminum maker, for its Baie Comeau smelter and other facilities in the province.

``The project between Alouette and Alcan was chosen by the Finance Ministry and the government,'' Landry told reporters at a press conference.

He added that the Alouette project would create more permanent jobs, would cost less for taxpayers and would be put into production more rapidly than the Alcoa proposal. He said the project would create an estimated 9,000 construction jobs.

Earlier this month, Alcan, the world's second-largest aluminum maker, agreed to acquire a 20 percent stake in the Alouette consortium from a Quebec government agency and support the expansion project.

Corus Group Plc (CS.L) and Austria Metall AG also each have a 20 percent share of Alouette, which began operating in 1992. Kobe Steel Ltd. (5406.T) has a 13.33 percent stake, while Marubeni Corp. (8002.T) holds 6.67 percent.

Last fall, the Quebec government asked Hydro-Quebec to provide 500 megawatts of power at its special low ``L'' rate for big industrial users to the aluminum maker submitting the best proposal on how it would use the additional power to increase production and create jobs.

The government stipulated that a plan for secondary transformation of primary aluminum be included in each plan.

``The Alcan-Alouette proposal is clearly more advantageous on the number of jobs created and particularly with regards to transformation,'' Quebec Finance Minister Pauline Marois said.

Landry insisted that there were no winners or losers in the decision to offer the 500 megawatt power block to the Alouette consortium. Alcoa is still eligible for 100 megawatts of power at the ``L'' rate for any proposed expansion of its smelter at Baie Comeau, he said.

``I will speak to them today because I do not want there to be any disappointment,'' Landry said.

Alcan has primary aluminum metal production capacity of 2.25 million tonnes a year, of which 1.2 million tonnes is located in Quebec, where abundant electricity is offered at highly competitive rates by Quebec government-owned Hydro-Quebec. Aluminum smelting requires massive supplies of power.

($1-$1.59 Canadian)