Negotiations to secure the sophisticated Pechiney French aluminium smelter for the Coega Industrial Development Zone (IDZ) outside Port Elizabeth have entered ”the final straight”, the Coega Development Corporation (CDC) said on Wednesday.
The CDC expected to sign a contract finalising Pechiney’s investment within the next few months, chief executive officer Pepi Silinga said in a statement.
”The respective negotiating teams are drilling down into the levels of detail required to ensure that the interests of all parties are met, so that the best deal is secured for the IDZ, for the region, as well as for South Africa as a whole,” Silinga said.
If it goes ahead, the $2-billion (about R15-billion) Pechiney smelter will be the biggest investment in the metallurgical cluster in the IDZ. So far it is the biggest prospective deal in the IDZ.
The CDC said it had set up a multi-disciplinary team to meet Pechiney’s requirements for world-class infrastructure and services.
”Over the past three years we have been able to bring together a highly professional team with vast experience of mega-projects in South African and internationally. Negotiating the Pechiney investment is a hugely challenging exercise but we are confident that the team, together with the systems we have put in place, will be up to the challenge,” Silinga said.
The CDC was not, however, relying on Pechiney as the only major investor in the zone, and it was intensifying its marketing programme to attract other investors to the area.
”The CDC is engaged in a number of initiatives to market Coega as the investment destination of choice within South Africa. This includes meeting with potential investors in the automotive and textile industries in Europe and elsewhere,” he said.
”There is no doubt that our strategy of looking at a basket of investment opportunities rather than focusing on a single investor, has been the right one in attracting industries to the IDZ.”
Negotiations were underway with other big and small investors and many of them had conducted site visits and asked for more information, CDC spokesperson Vukelwa Vika told Sapa.
The second biggest prospective investor in the project after Pechiney was looking at an outlay of some $150-million (about R1,16-billion), Vika said.
The Coega project incorporates a 12 000-hectare IDZ and a R2,5-billion deep water port at the mouth of the Coega River, about 20km east of Port Elizabeth, with the CDC responsible for the establishment of R800-million in initial infrastructure at the site.
The initial investment by the National Ports Authority, the CDC itself and the government in the project came to a total of around R5-billion, Vika said. – Sapa