Interest in smelter at Coega zone

Posted On Tuesday, 20 July 2004 02:00 Published by eProp Commercial Property News
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PORT ELIZABETH Public Enterprises Minister Alec Erwin says several parties are interested in the proposed $2,2bn aluminium smelter at the Coega industrial development zone.

 

Alec ErwinHowever, he would not say whether these included Brazilian resources group CVRD and BHP Billiton, as has been rumoured.

A source close to the minister said, however, that CVRD was "very interested" in the project.

This fuelled hope that the project which would represent SA's largest single foreign direct investment to date would not collapse if Canadian company Alcan failed to take a stake in it.

Fears that it would collapse intensified following Alcan's recent announcement that it would take a stake in what was widely perceived to be a rival project in the Middle East.

The domestic smelter is expected to play a central role, at least initially, in the success of the Coega industrial zone.

It is hoped that Coega could engineer an economic upswing in impoverished Eastern Cape.

"A number of people are interested in the smelter," said the minister, speaking at the inauguration of the tidal basin at the Coega port yesterday.

The event marks the halfway mark of construction on the R3,2bn port.

Erwin also said that talks with Alcan were continuing.

The smelter project was first proposed by French company Pechiney, which was taken over by Alcan last year.

Erwin said delays in Alcan's decision stemmed from the fact that the original project had been reconfigured, and now proposed using more established technology. He denied that the move by Alcan to take a stake in a new aluminium smelter in Oman, in the Middle East, signalled a decline in Alcan's interest in the South African project.

Erwin said the South African and Oman projects were different both in scale and technology.

The minister repeated earlier comments that there would be an aluminium smelter at Coega, regardless of whether or not Alcan was an owner.

He suggested that Alcan would have to make a decision about the project soon, because the National Ports Authority and Eskom would soon be in a position to impose penalties.

The minister would not elaborate on the authority's penalties, but Eskom earlier confirmed that it was already building power distribution facilities dedicated to the smelter, in line with a contract between Eskom and Pechiney.

Erwin also moved strongly to silence scepticism about the future viability of the multi- billion-rand Coega industrial development zone.

"We will get many tenants that I can assure you," the minister said. "It will work, there's no question about it."

Erwin also lifted the veil on talks about exporting iron ore from Sishen through Coega.

He said that the railway line between iron production area Sishen and Coega would be upgraded for this purpose.

Iron-ore mining company Kumba had said earlier that it wanted to increase its iron exports and would look in particular to China, where demand for the raw material was booming.

The Coega port will be completed in September next year. However, it remains to be seen whether or not any ships will dock at the harbour.

The Coega port is the largest infrastructure construction project to be undertaken by this government to date.

Last modified on Thursday, 26 June 2014 15:59

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