Supply contracts move Pechiney closer to building smelter at Coega.

Posted On Friday, 07 February 2003 10:01 Published by eProp Commercial Property News
Rate this item
(0 votes)

A decision to build the world's most advanced aluminium smelter at Coega came a lot closer yesterday with the news that Eskom and the SA Ports Authority have signed agreements with French firm Pechiney.

Property-Housing-Residential

A decision to proceed with the 2bn smelter would provide a major boost to the Coega deepwater port and industrial development zone project, and would help draw in other businesses.

Pechiney chairman JeanPierre Rodier recently underscored his company's commitment to siting the project at Coega, and to proceeding with the new smelter when he announced that while Pechiney planned to close some of its unproductive plants, the new smelter project remained a priority.

Pechiney had previously been looking at potential sites in Australia and Canada, but this week it became clear that SA was the only location being considered for the plant, which has already won approval through an environmental impact assessment.

'There are now agreements with Eskom and the Ports Authority, and just a few issues need to be ironed out in discussions with the Coega Development Corporation (CDC),' said an industry source.

Issues that Pechiney has sought to clarify include tariffs for electricity and port charges and penalty clauses in case the smelter is completed but not able to operate properly because of delays in upgrading the electricity supply and in providing the necessary port infrastructure.

It was announced this week that project facilitation group Bateman had won the $600m contract to build and operate the smelter, in partnership with French firm Technip-Coflexip.

'We're very happy with the progress being made in achieving the necessary milestones on the project, of which this is the latest and follows the awarding of the environmental permit at the end of last year. We have worked very well with the Pechiney negotiating team on the smelter project.

'We congratulate Bateman and Technip on their appointment to the project team and look forward to working with them to ensure the successful implementation of the smelter project,' said Hartle.

A senior Pechiney team has been in SA this week to help advance negotiations on the project and its financing.

The Industrial Development Corporation and Eskom are expected to be involved in financing along with Pechiney, possibly Bateman, and empowerment group Sibumbene, which is headed by Denel chairman Sandile Zungu.

'There are also negotiations underway with German consortiums involved in the SA arms offset programme,' the industry source said. 'They are also being invited to invest in the new smelter.'

Meanwhile, an application by Pechiney for a multi-million rand investment incentive from the trade and industry department is being processed, and is likely to win approval given government's strong desire to see Coega's anchor project proceed.

Last modified on Thursday, 26 June 2014 14:31

Please publish modules in offcanvas position.