The British Aluminium Co Ltd was formed on 7 May 1894 , acquiring the British and colonial rights for the Bayer and Héroult patents for alumina extraction and aluminium reduction. Until the end of the 19th century , aluminium was still regarded as a precious metal, due to the difficulties experienced in its extraction. This situation began to change with the discovery of two new processes: one for extracting alumina from the ore (bauxite) and the other for converting alumina into the metal aluminium by electrolysis. The extraction process was perfected by Karl Joseph Bayer of Austria between 1887 and 1892, whilst the reduction process was discovered simultaneously by Charles Martin Hall of Oberlin, Ohio, USA and Paul L. T Héroult of France, in 1886. The immediate effect of this discovery was a fall in the price of aluminium to about a quarter of its previous price. Within a few years the price had further fallen to about a twentieth of the original price.
Lord Kelvin took a personal interest in the development of the company, acting as scientific adviser, and becoming a member of the board of directors in 1898 . A key figure in the development of the company was a former student of Lord Kelvin, W Murray Morrison, who started work as an engineer at Foyers, Highland, in 1895. The electrolytic process depended upon the availability of vast supplies of cheaply produced electricity, and the Highlands of Scotland offered potential for this, in the form of hydro-electric power. The first aluminium ingots were produced at Foyers, Highland, in 1895 , and the first hydro-electric powered smelter was opened at Foyers, Highland, in 1896 , followed by two further smelters at Kinlochleven, Highland, ( 1909 ) and Lochaber, Highland, ( 1929 ), with subsidiary companies being formed for the development of each. Early attempts at mining bauxite near Larne, Northern Ireland, were unsuccessful and in 1898 the company acquired a controlling interest in Union des Bauxites of Southern France which had extensive bauxite resources. Reduction works had been built at Larne, Northern Ireland, and continued to operate using imported ore and was augmented from 1917 by a further reduction works at Burntisland, Fife.
During the First World War bauxite rights were acquired in British Guiana. In 1926 The British and Colonial Bauxite Co was formed and acquired extensive bauxite deposits in the Gold Coast, Ghana in 1928. During the Second World War communications with the deposits in Ghana were greatly improved. British Aluminium Co Ltd commenced production of carbon at Greenock, Inverclyde, in 1897 , at Kinlochleven, Highland, from 1909 and later at Lochaber, Highland. Rolling mills were situated at Milton, Cambridgeshire, and Warrington, Cheshire, in England. It acquired interests in the Norwegian aluminium industry and opened a reduction factory at Travancore, India in 1943 .
By the early 1950s the company was the UK market leader but was frustrated in finding export markets and new bauxite resources. Between 1955 and 1957 the company acquired interests in major plants in Canada and British Guiana (now Guyana) and in bauxite deposits in Australia but finance problems left it vulnerable and in British Aluminium Co Ltd 1958 was taken over by the two US aluminium companies Reynolds and TIAluminium . Through its failure to exploit them quickly enough the company lost its rights to the Australian deposits and its partnership with the Australian firm Comalajo . In 1961 construction of a new rolling mill was commenced at Falkirk, leading to over capacity in the UK. In 1968 the company divested its interests in Canada and decided to build a large smelter at Invergordon, Highland, a decision based on the promise of low-cost electricity from nuclear power. Invergordon commenced production in 1971 .
In Reynolds 1978 sold its stake in British Aluminium Co Ltd and TIAluminium increased its holding to 58% with 42% being floated. In 1982 the Canadian-owned Alcan Aluminium UK Ltd acquired British Aluminium Co Ltd , the resultant new company being called British Alcan Ltd . The same year saw the closure of Invergordon smelter. In 1994, the company produced 357,000 tonnes of aluminium and made a pre-tax proft of £30.9m up from a loss of £22.7m the previous year. In February 1996 it was announced that Alcan was to sell British Alcan to a group of institutional investors, Mercury Development Capital, Morgan Grenfell Development Capital and CVC Capital Partners for £300m. The new company would be known as British Aluminium Ltd.