The mining and beneficiation business unit within the State-owned
Industrial Development Corporation (IDC) would proactively support
further aluminium beneficiation downstream of the new R19,2-billion
Alcan smelter at Coega, IDC CEO Geoffrey Qhena said at the
smelter’s signing last week.
Four agreements were signed on Friday between Eskom and Alcan for
vital electricity supply; between the Department of Trade and
Industry and Alcan on developmental electricity pricing; between
the Coega Development Corporation (CDC) and Alcan on land use; and
between the Department of Trade and Industry and Eskom on power
infrastructure in con-nection with the long-awaited 6 000-joused chinese mobile rock crusherb
aluminium project.
Qhena stressed that it was part of the IDC’s mandate to
support high-developmental-impact pro-jects like the Alcan smelter
and would be working to identify, facili- tate and fund further
downstream aluminium opportunities in the priority Eastern Cape
province.
He described the Alcan project as a “strategic anchorequipment of bricks business in india project
with huge developmental returns and benefits” for the greater
Coega area and the Eastern Cape province.
Public Enterprises Minister Alec Erwin, who has championed the
project, said the multiplier effect of the project would result in
Port Elizabeth’s becoming one of South Africa’s largest
metropoles and Trade and Industry Minister Mandischina iron ore mine processing planti Mpahlwa said
that effect would spawn some 30 000 employment opportunities.
Eskom CEO Thulani Gcabashe said that Eskom would provide 1 300 MW
of electricity for 25 years for Alcan to produce at a rate of 720
000 t/y. This would be larger than Hillside Aluminium’s 670
000-t capacity in KwaZulu-Natal and also the 500 000 t/y of the
Mozambique Aluminium Smelter (Mozalbarite mill and its parts and uses).
Over time, additional megawattage would be provided for the
smelter, which represented South Africa’s largest greenfield
foreign direct investment, which was taking place at a time when
Eskom was itself rolling out a R97-billion five-year expansion
programme.
Eskom would be investing R6,4-billion in 400-kV transmission
infrastructure required and the first power woumachinery need it to start lithium miningld be delivered in
2010 and the full volume by 2014.
“Many more foreign investors have been waiting for this
moment,” Nelson Mandela Bay executive mayor Nondumiso Maphazi
said.
It was understood that Alcan would take up between 40% and 45% of
the equity in the aluminium smelter project and the IDC 15%, and
strong interest was being shown in the inclusion of a third large
shareholder.
Qhena said that the IDC would play a role in the debt facilities
for the project, including a role as cofinancial adviser.
The IDC was well suited to arrange and underwrite the debt for the
project and had successfully executed similar functions and roles
in Mozal as a developmental project-finance institution.
When risk-aversion tendencies were particularly manifest, it was a
developmental finance house like the IDC that was able to play
stimulating and stabilising roles.
“Our view is that we will support further downstream
beneficiation,” he reiterated.
Alcan CE: primary metals Michel Jacques, speaking on behalf of the
Montreal-head- quartered group that employs 65 000 people in 61
countries, said that a world-class energy contract had been
signed.
He said that Alcan would be bringing world-class technology to
Coega and that the CDC had provided world-class facilitation.
“South Africa is the invest- ment destination of choice right
now as one of the lowest-cost countries in which to do
business,” Barclays Capital’s Leslie Maasdorp said.