Global aluminium producer Alcan says construction on its R19,5-billion smelter at South Africa’s Coega development zone will start in 2008, and first production is expected before the end of 2010.
This was contained in Friday’s announcement that the company had reached an agreement with power utility Eskom for the supply of electricity for the smelter over a 25-year period.
The company says it will also now begin discussions with potential partners on the project and launch a selection process to conduct the project’s detailed front-end engineering design.
Alcan plans to retain a 25% to 40% equity interest in the project, while 60% of the total investment required will be through debt.
The Industrial Development Corporation (IDC) also released a statement on Friday saying that it will use its experience from the Mozal aluminium smelter in Mozambique to support the Coega smelter.
The corporation plans to subscribe for a 15% equity interest in the project, provide co-financial advice and assist with the black empowerment process on the project.
“We successfully executed the similar functions and roles in the Mozal aluminium smelter and over time built unique project finance expertise.
“We are delighted to have this opportunity to play a meaningful role in this strategic project which will have a significant developmental impact in the Eastern Cape province,” said Geoffrey Qhena, chief executive of the IDC. — I-Net Bridge