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MEI Online: Plant Operation News: Africa: April 11th 2003


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:: Coega to Land $2bn Smelter

One of the world’s largest aluminium companies, Pechiney Aluminium, will today further plans to build a $2 billion smelter in the economically depressed Eastern Cape province following agreement over the crucial power contract with Eskom. Jean-Dominique Senard, chief operating officer of Pechiney Aluminium, will sign a port development and services contract with the South African government represented by public enterprises minister Jeff Radebe and outgoing director-general Sivi Gounden. The development of the smelter will create 1,000 permanent jobs and provide a much-needed boost to Coega, a government-backed industrial zone and harbour that has struggled to attract capital investment in the past. Roughly 4,500 jobs will be created during the construction stage of the smelter.

Plans to build the smelter at Coega, rather than in other international centres such as Australia, were first placed aired in May last year. At the time, the smelter’s backers, which also include empowerment company, Imbali Resources, said construction of the smelter would begin in the first quarter of this year.

The smelter is slated to produce roughly 460,000 tons a year of export-dedicated primary aluminium with capacity to extend to 500,000 tons a year. There is also provision to construct a second line of similar size which, if completed, would make Coega’s plant the largest aluminium smelter in the world.

At the time of announcing the prospect of the smelter last year, Jean-Pierre Rodier, chief executive of Pechiney, said production was likely in about mid-2005 with the ramp up to production taking about nine months.

In a recent report by banker, JP Morgan, it was estimated that aluminium demand by 2005 would reach a record 22.4 million tons, some 2.73 million tons above demand last year. However, the improved fundamentals for the metal have led to a roll-out of idle or new capacity. According to JP Morgan, Western world demand in 2003 for aluminium would grow by about 4.3 percent leaving the market oversupplied by 650,000 tons.




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