/ 30 September 2003

Alcan’s Pechiney takeover poses risk for Coega

Canadian aluminium group Alcan’s move to take over France’s Pechiney, given conditional approval by the European Commission (EC) on Monday, poses a risk for the proposed Coega aluminium smelter as Alcan may take a different view on the project, Macquarie Bank commodities analyst Adam Rowley in London told I-Net Bridge.

If US approval is also obtained for the deal, it will create the biggest packaging and second-biggest aluminium group in the world.

The EC gave the green light for the transaction on condition that Alcan divest some rolling mill plants, either in Germany or France, and possibly some casting operations as well.

“Obviously Alcan’s view on the Coega project is speculative, but the feeling in the market is that Alcan will pause to review Coega before going ahead,” Rowley said.

If Alcan were to give the green light to the project, the time taken by the group to consider the viability of the Coega smelter would push back the time it would take for it to come on stream, he added. – I-Net Bridge