AMENDED AND RESTATED METAL SUPPLY AGREEMENT

Exhibit 10.8

AMENDED AND RESTATED METAL SUPPLY AGREEMENT

between

NOVELIS INC.

(as Purchaser)

and

RIO TINTO ALCAN INC.

(as Supplier)

Dated as of January 1, 2008

TABLE OF CONTENTS

1. DEFINITIONS AND INTERPRETATION			2
2. METAL			10
3. FORCE MAJEURE			16
4. ASSIGNMENT			18
5. TERM AND TERMINATION			19
6. EVENTS OF DEFAULT			19
7. DISPUTE RESOLUTION			21
8. MISCELLANEOUS			24
SCHEDULES
1 Product Premium
2 Metal Specifications
3 Shipment and Delivery Performance

AMENDED AND RESTATED METAL SUPPLY AGREEMENT

THIS AGREEMENT entered into in the City of Montréal, Province of Quebec, as of January  1, 2008.

BETWEEN:		NOVELIS INC. , a corporation organized under the Canada Business Corporations Act (“ Novelis ” or the “ Purchaser ”);
AND:		RIO TINTO ALCAN INC. (formally known as Alcan Inc.) , a corporation organized under the Canada Business Corporations Act (“ Alcan ” or the “ Supplier ”).

RECITALS:

WHEREAS the Parties, entered into a Metal Supply Agreement dated January 5, 2005 (the “Original Agreement”) relating to the supply of Metal at the Delivery Sites;

WHEREAS the Parties wish to modify certain of the terms and conditions of the Original Agreement and amend and restate the Original Agreement by this Agreement.

NOW THEREFORE, in consideration of the mutual agreements, covenants and other provisions set forth in this Agreement, the Parties hereby agree as follows:

1.		DEFINITIONS AND INTERPRETATION
1.1		Definitions

For the purposes of this Agreement, the following terms and expressions and variations thereof shall, unless another meaning is clearly required in the context, have the meanings specified or referred to in this Section 1.1:

“ Affected Party ” has the meaning set forth in Section 3.1.

“ Affiliate ” of any Person means any other Person that, directly or indirectly, controls, is controlled by, or is under common control with such first Person as of the date on which or at any time during the period for when such determination is being made. For purposes of this definition, “ control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by contract or otherwise and the terms “ controlling ” and “ controlled ” have meanings correlative to the foregoing.

“ Agreement ” means this Amended and Restated Metal Supply Agreement, including all of the Schedules hereto.

“ Alcan ” means Rio Tinto Alcan Inc. and its successors and permitted assigns.

“ Alcan Group ” means Alcan and its Affiliates from time to time.

“ Annual Base Quantity ” means in respect of each Contract Year, *** Tonnes of Metal; provided that commencing in respect of the *** Contract Year, either Party, by notice to the other Party no later than 18 months prior to the commencement of a Contract Year, may reduce the Annual Base Quantity for such Contract Year and all subsequent Contract Years by *** Tonnes. Only one such reduction will be permitted to be exercised in respect of any Contract Year (i.e. the Annual Base Quantity may not be so reduced by more than *** Tonnes in any Contract Year, but the Annual Base Quantity may be reduced again in a subsequent Contract Year). For example, in ***, a Party reduces the Annual Base Quantity for *** and all subsequent Contract Years by *** Tonnes to *** Tonnes ; in ***, a Party reduces the Annual Base Quantity for *** and all subsequent Contract Years by an additional *** Tonnes to *** Tonnes ; no further reductions are made for the *** and *** Contract Years; in *** a Party reduces the Annual Base Quantity for *** and all subsequent Contract Years by an additional *** Tonnes to *** Tonnes and in *** a Party reduces the Annual Base Quantity for *** by an additional *** Tonnes to ***, in which case the Agreement shall terminate on ***.

“ Applicable Law ” means any applicable law, rule or regulation of any Governmental Authority or any outstanding order, judgment, injunction, ruling or decree by any Governmental Authority.

“ Business Concern ” means any corporation, company, limited liability company, partnership, joint venture, trust, unincorporated association or any other form of association.

“ Business Day ” means any day excluding (i) Saturday, Sunday and any other day which, in the City of Montréal (Canada) or in the City of New York (United States), is a legal holiday, or (ii) a day on which banks are authorized by Applicable Law to close in the city of Montréal (Canada) or in the city of New York (United States).

circumstances to ensure that such result is achieved as expeditiously as possible in the context of commercial relations of the type contemplated in this Agreement; provided, however, that an obligation to use Commercially Reasonable Efforts under this Agreement does not require the Person subject to that obligation to assume any material obligations or pay any material amounts to a Third Party or take actions that would reduce the benefits intended to be obtained by such Person under this Agreement.

“ Consent ” means any approval, consent, ratification, waiver or other authorization.

“ Contract Price ” means, for each Tonne of Metal sold and purchased hereunder in any month, the aggregate of the following:

	(i)		the Midwest Price calculated for such month;
	(ii)		minus the LME Discount Percentage of the LME 3-Month Aluminum Price for such month:

	(a)		on the portion purchased in such month of the first *** Tonnes of Metal purchased in Contract Year ***;
	(b)		on the portion purchased in such month of the first *** Tonnes of Metal purchased in Contract Year ***; and
	(c)		on the portion purchased in such month of the first *** Tonnes of Metal purchased in Contract Year ***;

	(iii)		plus the Product Premium in effect in such month;
	(iv)		minus the Logistics Discount Amount applicable in such month ;
	(v)		plus the Cut Premium, if any, applicable to such Metal;
	(vi)		plus the Small Quantity Premium, if any, applicable to such Metal; and
	(vii)		minus the Product Discount, if any, applicable to such Metal.

such amount shall be rounded upwards to the nearest Dollar.

“ Contract Year ” means each Calendar Year during the Term, including any renewals thereof (sometimes referred to as Contract Year 1, Contract Year 2, etc.).

“ CPT ” means, to the extent not inconsistent with the provisions of this Agreement, CPT as defined in Incoterms 2000, published by the ICC, Paris, France, as amended from time to time.

“ Cut Premium ” means, in respect of each Tonne of Metal supplied hereunder, an amount equal to (i) $*** per Tonne for one butt, or (ii) $*** per Tonne for two butts; provided that Cut Premium is only applicable if the Purchaser has requested, in the Order relating to the applicable supply of Metal, that the Supplier remove butts of the supplied Metal.

“ Default Interest Rate ” means the rate of interest charged by the Supplier from time to time on late payments in accordance with Supplier’s normal commercial practice as indicated on invoices issued by Supplier to Purchaser hereunder.

“ Defaulting Party ” has the meaning set forth in Section 6.

“ Delivery Site ” means any of the following facilities of the Purchaser, as specified in each Order of Metal hereunder provided by the Purchaser:

	(i)		Oswego Plant, Oswego, New York;
	(ii)		Logan Aluminum, Russelville, Kentucky; or
	(iii)		such other facilities of the Purchaser as may be agreed to by the Supplier.

“Disputes” has the meaning set forth in Section 7.1.

“ Dollars ” or “ $ ” means the lawful currency of the United States of America.

“ Event of Default ” has the meaning set forth in Section 6.

“ Force Majeure ” has the meaning set forth in Section 3.2.

 

“ Governmental Authority ” means any court, arbitration panel, governmental or regulatory authority, agency, stock exchange, commission or body.

“ Governmental Authorization ” means any Consent, license, certificate, franchise, registration or permit issued, granted, given or otherwise made available by, or under the authority of, any Governmental Authority or pursuant to any Applicable Law.

“ Group ” means Alcan Group or Novelis Group, as the context requires.

“ ICC ” means the International Chamber of Commerce.

“ Incoterms 2000 ” means the set of international rules updated in the year 2000 for the interpretation of the most commonly used trade terms for foreign trade, as published by the ICC.

“ Information ” means any information, whether or not patentable or copyrightable, in written, oral, electronic or other tangible or intangible forms, stored in any medium, including studies, reports, test procedures, research, records, books, contracts, instruments, surveys, discoveries, ideas, concepts, know-how, techniques, manufacturing techniques, manufacturing variables, designs, specifications, drawings, blueprints, diagrams, models, prototypes, samples, products, product plans, flow charts, data, computer data, disks, diskettes, tapes, computer programs or other software, marketing plans, customer information, customer services, supplier information, communications by or to attorneys (including attorney-client privileged communications), memos and other materials prepared by attorneys or under their direction (including attorney work product), and other technical, financial, employee or business information or data.

“ Liabilities ” has the meaning set forth in the Separation Agreement.

“ LME Discount Percentage ” means ***%.

 

“ LME 3-Month Aluminum Price ” for any calendar month, means the arithmetic average of the LME 3-Month seller’s price for primary high grade aluminum, as published in Metal Bulletin on each day during the calendar month preceding such calendar month or as otherwise determined pursuant to Section 2.6 (b). For avoidance of doubt, the LME 3-Month Aluminum Price for the month of April will be based on aluminum prices published during the month of March.

“ LME ” means the London Metal Exchange.

“ Logistics Discount Amount ” means, in respect of any supply to the Oswego, New York Delivery Site, a discount of $*** per Tonne.

“ Metal ” means aluminum sheet ingot having the specifications set forth in Schedule 2 .

“ Midwest Price ” (i) with respect to purchases of Metal (a) in Contract Year *** up to *** Tonnes, (b) in Contract Year *** up to *** Tonnes and (c) in Contract Year *** up to *** Tonnes, for any calendar month when such purchases are shipped and applicable only to such purchases, means the arithmetic average of the “MW US Transaction” price for primary high grade aluminum, as published in Platt’s Metals Week on each day during the calendar month preceding such calendar month of shipment or as otherwise determined pursuant to Section 2.6 (b); and (ii) with respect to all other purchases of Metal for any calendar month when any such other purchases are shipped and applicable only to such other purchases, means the arithmetic average of the “MW US Transaction” price for primary high grade aluminum, as published in Platt’s Metals Week on each day during such calendar month of shipment or as otherwise determined pursuant to Section 2.6(b).

“ Novelis ” means Novelis Inc. and its successor and permitted assigns.

“ Novelis Group ” means Novelis and its Affiliates from time to time.

“ Order ” has the meaning set forth in Section 2.4.

“ Ordinary Course of Business ” means any action taken by a Person that is in the ordinary course of the normal, day-to-day operations of such Person and is consistent with the past practices of such Person.

“Original Agreement” has the meaning set out in the Preamble to this Agreement.

“ Party ” means each of the Purchaser and the Supplier as a party to this Agreement and “ Parties ” means both of them.

“ Person ” means any individual, Business Concern or Governmental Authority.

“Product Discount” means $*** per Tonne in respect of (i) the first *** Tonnes of purchases in any Contract Year of Metal comprising alloys 5*** and 3*** in sizes *** and *** and (ii) any volume of such alloys and sizes purchased in a Contract Year in excess of *** Tonnes up to *** Tonnes (additional maximum *** Tonnes) to the extent and on an equal basis with each Tonne of Metal purchased in such Contract Year in excess of *** Tonnes up to *** Tonnes.

“ Product Premium ” means,

	(i)		in respect of Metal supplied hereunder up to June 30, 2008, the premiums per Tonne set out in Schedule 1 ; and
	(ii)		in respect of Metal supplied hereunder in each 12 month period from July 1 to June 30, commencing July 1, 2008, the applicable Product Premium at June 30 of the immediately preceding 12 month period plus an amount equal to the product of (i) the Product Premium for the immediately preceeding 12 month period and (ii) ***% of the percentage variation in the US PPI that has taken place between January 1 and December 31 in the last ended Contract Year.

“ Purchaser ” has the meaning set forth in the Preamble to this Agreement.

“ Representatives ” means, with respect to any Person, any of such Person’s directors, officers, employees, agents, consultants, advisors, accountants or attorneys.

“ Sales Tax ” means any sales, use, consumption, goods and services, value added or similar tax, duty or charge imposed by a Governmental Authority pursuant to Applicable Law.

“ Separation Agreement ” means the Separation Agreement dated December 31, 2004 between the Parties, as amended, restated or modified from time to time.

“ Small Quantity Premium ” means the following premium amounts payable in respect of supplies hereunder where the alloy size combination ordered by the Purchaser in any Order is under the lesser of 100 Tonnes or one furnace load:

Quantity (Tonnes)		Premium Per Tonne
*** to ***		$***
*** to ***		$***
*** to ***, or one furnace load if smaller		$***

“ Specifications ” means specifications for Metal as set out in Schedule 2 .

“ Supplier ” has the meaning set forth in the Preamble to this Agreement.

“ Supplier Facilities ” means the facilities of the Supplier located in any of the following locations, to be selected at the Supplier’s option:

	(i)		Laterrière,
	(ii)		Grande-Baie,
	(iii)		Bécancour,
	(iv)		Kitimat,

(v)

or such other locations as may be agreed to by the Purchaser in accordance with Section 2.1(b).

“ Term ” has the meaning set forth in Section 5.1.

“ Terminating Party ” has the meaning set forth in Section 6.

“ Third Party ” means a Person that is not a Party to this Agreement, other than a member or an Affiliate of Alcan Group or a member or an Affiliate of Novelis Group.

“ Tonne ” means 1,000 kilograms.

“ US PPI ” means the Producer Price Index for industrial commodities (Series Id: WPUSOP2000), as published monthly by the Bureau of Labor Statistics of the U.S. Department of Labor.

1.2		Currency
		All references to currency herein are to Dollars unless otherwise specified.
1.3		Vienna Convention
		The Parties agree that the terms of the United Nations Convention (Vienna Convention) on Contracts for the International Sale of Goods (1980) shall not apply to this Agreement or the obligations of the Parties hereunder.

2.

METAL

2.1

Supply and Sale by the Supplier

	(a)		Subject to the terms and conditions of this Agreement, beginning as of *** and continuing throughout the Term of this Agreement, the Supplier shall supply and sell to the Purchaser in each Contract year, “CPT the applicable Delivery Site”, a quantity of Metal equal to the Annual Base Quantity, subject to adjustment resulting from the monthly purchases of Metal pursuant to and in accordance with Section 2.4(i).
	(b)		The Supplier shall supply Metal from a Supplier Facility of the Supplier’s choosing or from such other sources and locations as may be agreed by the Parties. If the Supplier wishes at any time to deliver

			Metal hereunder to the Purchaser from a source other than the facilities named in the definition of “Supplier Facilities” herein, it may do so provided such Metal complies with the Specifications and the Purchaser has confirmed in writing that the source of such Metal is acceptable to it. The Purchaser shall act reasonably in providing such confirmation.
	(c)		The quantity of Metal which the Purchaser agrees to purchase and the Supplier agrees to supply hereunder shall be subject to reduction on a pro rata basis in the event the Supplier provides notice to the Purchaser that one of the Supplier Facilities owned by the Supplier has been temporarily or permanently shut down by the Supplier, provided such shut down has occurred as a result of a good faith decision by the Supplier that the continued operation of such Supplier Facility would be uneconomic or otherwise unviable or non value-maximizing for the Supplier. This reduction shall be for such quantity as may be agreed by the Parties and, failing agreement, shall be for such quantity as is equal to the Annual Base Quantity for the applicable Contract Year multiplied by the annual reduction capacity of Metal of the Supplier Facilities that have been shut down, and divided by the total annual production capacity of Metal of all Supplier Facilities before giving effect to the shutdown.
			Annual Base Quantity for the relevant Contract Years and other related volume levels will be adjusted accordingly. Any reduction pursuant to this section 2.1(c) in the Supplier’s obligation to supply Metal shall only take effect 18 months after Supplier has provided notice thereof to Purchaser.
			Likewise, should the Purchaser decide to shut down any of its facilities being supplied under this Agreement, Purchaser will be entitled to reduce Annual Base Quantities in a similar manner and with the same 18-month notice to Supplier.

2.2		Purchase by the Purchaser
		Subject to the terms and conditions of this Agreement, beginning as of *** and continuing throughout the Term of this Agreement, the Purchaser shall purchase and take delivery from the Supplier in each Contract Year , “CPT the applicable Delivery Site” , a quantity of Metal equal to the Annual Base Quantity , subject to adjustment resulting from the monthly purchases of Metal pursuant to and in accordance with Section 2.4(i).
2.3		Notification of Estimated Quantities of Metal Required by the Purchaser

	a)		The Purchaser and the Supplier shall use Commercially Reasonable Efforts to arrange for shipping and delivery to be evenly spread on a monthly basis throughout each Contract Year.
	b)		The quantity of Metal to be sold and purchased hereunder (i) in each calendar month of the Term shall not exceed ***% or be less than ***% of one twelfth (1/12) of the Annual Base Quantity for the relevant Contract Year and (ii) in each Contract Year shall not exceed the Annual Base Quantity for such Contract Year or be less than ***% of the Annual Base Quantity for such Contract Year. Any variations to the sale and purchase of the Annual Base Quantity in any Contract Year shall only occur as a result of the monthly purchases of Metal pursuant to and in accordance with Section 2.4(i).

2.4		Scheduling of Quantities
		Subject to Section 2.3(b), throughout the Term of this Agreement, by the fifteenth (15th) day of each calendar month (and if such day is not a Business Day, on the Business Day immediately preceding such 15 th day), the Purchaser shall notify the Supplier of:

	(i)		the quantity of Metal it will purchase during the following calendar month (an “Order”); the Purchaser shall use Commercially Reasonable Efforts to ensure that the quantities identified in the Orders in each Contract Year are as nearly equal as possible, and in any event would not fluctuate in respect of delivery in any particular month by more or less than ***% of the Annual Base Quantity divided by 12; and
	(ii)		the Purchaser’s best estimate (which is non-binding) of its Metal requirements during the two (2) calendar months following the calendar month referred to in Section 2.4 (i).

2.5

Supplier’s Shipping Obligations

(a)

The Supplier shall supply to the Purchaser, and the Purchaser shall purchase from the Supplier, in accordance with the terms hereof, in each month, such quantity of Metal as is identified by the Purchaser in respect of such calendar month in the Order for such month delivered by the Purchaser in accordance with Section 2.4 ;provided that during each calendar month the Purchaser, by notice to the Supplier, may vary the quantity of Metal to be purchased in such month to a quantity of

			Metal between ***% and ***% of the quantity of Metal identified in the Order for such calendar month, subject to meeting the requirements of Section 2.4(i) relative to minimum and maximum monthly quantities and of Section 2.3(b) relative to the Annual Base Quantity.
	(b)		Notwithstanding the provisions of Incoterms 2000 and Section 2.9, the Supplier acknowledges its responsibility to make all necessary arrangements for the transportation of Metal to the Delivery Site on behalf of the Purchaser. The Supplier shall act as the disclosed agent of the Purchaser in entering into contracts for hiring carriers for the shipment of Metal under this Agreement. In doing this, the Supplier shall use Commercially Reasonable Efforts to obtain competitive freight rates and shall consult with the Purchaser before entering into any long term contracts for hiring carriers on behalf of the Purchaser. The Supplier shall use Commercially Reasonable Efforts to ensure that such transportation is suitable for delivering the Metal to the Delivery Site.

(c)

The Supplier undertakes to maintain the same practices and levels of service in respect of shipments of Metal hereunder consistent with its past and current practices. The Supplier undertakes to ensure that any shipments of Metal supplied hereunder:

	(i)		to the Purchaser’s facilities at Oswego Plant, Oswego, New York, may be made by rail to an intermediate point (which may be Brockville, Ontario), with onward shipment to such Delivery Site by truck; and
	(ii)		to the Purchaser’s facilities at the Logan Aluminum Plant, Russellville, Kentucky, may made by either rail or truck in accordance with current practice. Changes to current practice require mutual agreement.

(d)

Matters regarding shipment and delivery performance hereunder shall be governed by the provisions of Schedule 3 .

2.6

Price

(a)

The price payable by the Purchaser to the Supplier