The investment will help complete the US$3.3bn project in 2014.
The Kitimat modernisation will increase the smelter's production capacity by more than 48% to approximately 420kt/y.
First metal is expected to come on stream in H1 2014, with an expected ramp up of nine months. The modernised smelter will be powered exclusively by hydropower and use Rio Tinto Alcan's AP40 smelting technology. This is expected to reduce the smelter's carbon dioxide emissions intensity by approximately 50%.
"The modernisation of Kitimat will transform its performance, moving it from the third quartile to the first decile of the industry cost curve, and cut greenhouse gas emissions by about half," said Jacynthe Côté, chief executive of Rio Tinto Alcan.
The modernisation will secure 1000 stable, specialised jobs in BC's northwest for the long term, and 2500 jobs during the peak period of the construction phase.