Canadian aluminium group Alcan is set to make a decision soon about its involvement in South Africa’s proposed R14-billion Coega smelter, Alcan spokesperson Joseph Singerman said.
“No decision regarding Alcan’s involvement in Coega has been made. Alcan is on target to make that decision by the end of June or early July — definitely by the beginning of the [northern hemisphere] summer,” Singerman said from Canada.
In addition to the Coega smelter, Alcan is currently conducting a feasibility study into building a smelter in Oman, he added.
Alcan has about 88 000 employees in more than 60 countries and has annual revenues of more than $20-billion.
In February this year, Alcan completed its $4,8-billion acquisition of French aluminium group Pechiney.
Pechiney had planned to take a 49% stake in the Coega project, with the Industrial Development Corporation and power utility Eskom each taking stakes of 12,5%.
The Coega smelter’s environmental impact assessment study was completed in 2002, and Pechiney has signed a long-term energy agreement with Eskom and a port usage and services agreement with South Africa’s National Ports Authority.
Pechiney had previously expected the Coega smelter to come on stream with aluminium output during 2006.
However, if the smelter does get the green light it is likely to only come on stream in 2007 or 2008, a London analyst said.
It had been intended that Pechiney’s proprietary AP 50 technology would be installed at the Coega smelter, the first installation of the new technology in the world.
Alcan hasn’t ruled out implementing AP 50 technology at Coega or any other new smelter, Singerman said.
“We would like a pilot project to feature the new AP 50 technology — Coega is a possibility,” he added.
Alcan uses Pechiney technology a great deal and one of the key reasons for Alcan moving to acquire Pechiney was to get access to the French group’s research and development capabilities, Singerman said.
The AP 50 technology is more efficient than the existing AP 30 technology, both from energy and raw-materials points of view.
An AP 50 smelter has the capacity to produce 460 000 tons a year of aluminium, uses 1,1-million tons of raw materials a year and has an expected life of 40 years.
There have been suggestions that the South African government may offer Alcan a R600-million tax concession as a sweetener. However, Singerman wasn’t aware of any such tax break.
Previous Pechiney plans indicated that at the peak of the construction of the Coega smelter, more than 6 000 people will be employed while about 800 people will be employed permanently once the smelter is up and running.
Were the Coega smelter to proceed to construction, it would add to Southern Africa’s prominence as a source of primary aluminium production.
The region already produces about 1,3-million tons of primary aluminium a year, or 7% of the world’s annual global output, from Hillside and Bayside smelters in South Africa as well as the Mozal smelter in Mozambique.
Hillside is also the world’s third-largest aluminium smelter with 670 000 tons of primary aluminium production a year.
The only smelters that are bigger than Hillside at this stage are in Russia and have the capacity to produce between 800 000 and 900 000 tons of primary aluminium a year.
The two Russian smelters are the Krasnoyarsk smelter and Bratsk smelter, located on the eastern side of Russia, and both use the outdated Soderberg smelting technology, which is also regarded as environmentally unfriendly.
The Mozal smelter, which has a capacity of 540 000 tons, ranks as one of the world’s top ten aluminium smelters by annual output.
Aluminium is used in packaging, automobiles, aircraft, computers, trains, building materials and everyday products. — I-Net Bridge