First, about R300m will have to be shaved off the cost of the project, and then the Coega smelter will have to beat a number of competing projects for limited investment funds.

This twin challenge follows the recent takeover of French aluminium firm Pechiney which was expected to proceed with the smelter plan by Canadian company Alcan.

"If the takeover had not happened, we would have had a decision by now, and it looked like it would have been a positive one," an industry source said.

"Alcan is a different player, and all efforts are being made to sell the Coega location for the smelter project to the Alcan team."

He said Alcan executives visited Coega in January, and decided to seek some changes to the project, with the aim of lowering the cost about R300m.

Construction group Bateman has been selected to manage the project and is being asked to cut its costs.

There will also be an attempt to source more materials for the smelter in SA.

"Previously this was a French project, and as the French tend to do they wanted as much of the material being used in the smelter as possible to be supplied from France," the source said.

"Now it is the Canadians who are in charge of Pechiney, and who are calling the shots, and they are more interested in getting full value for money than in promoting French exports, and so the balance will be tilted in favour of South African firms, where supplies can be sourced reliably and more cheaply."

There would also be efforts to trim the cost of the project by lowering payments for port charges, electricity supplies and payments to the Coega Development Corporation (CDC), which will be the landlord.

The CDC's planning manager, Kelly Byrne, said recently that R7,4bn was being invested in setting up the Coega industrial development zone and deepwater port, where the smelter project is the largest potential investment.

There will be R3,2bn spent on the port, R2bn on zone infrastructure and R2,2bn on a power upgrade by Eskom.

Alcan spokesman Joseph Singerman would not comment at the weekend on the work being done to sell the Coega site to his company. The group had not made any final decisions on the list of Alcan and Pechiney projects that were being evaluated.

CDC spokesman Raymond Hartle said he could not comment either, and he had received no indication that the project would be scaled back.

"We remain convinced Coega is the best location for the aluminium smelter project," he said.

Government would not be concerned if some of the cost of the smelter were to be trimmed, as long as the investment did go ahead.

Although this is repeatedly denied by those in charge, the Alcan smelter is seen by many as an anchor project which could give a major boost to the Coega development, which lies in one of the areas of the country most starved of jobs.

Trade and industry department director-general Alistair Ruiters has devoted a great deal of time to trying to win support, first from Pechiney, and now from Alcan, for the Coega investment.