Durban - Alcan, which is planning a $2.7 billion (R21 billion) aluminium smelter at Coega in the Eastern Cape, will widen the net for black economic empowerment (BEE) partners.
This is despite Sandile Zungu's consortium, Sibumbene, already being earmarked as the preferred BEE partner by Pechiney, which was going to invest in the project before Alcan bought the company in 2003.
Alcan spokesperson Alexander Christen said yesterday: "We will widen the net for BEE partners. We want to make sure the project gets the best possible partners who can add value.
"It is too early to say who the stakeholders in the Coega smelter will be as we are still finalising negotiations on electricity supply."
The electricity deal with Eskom is expected to be finalised by the end of the month. Thereafter Alcan will begin a feasibility study. "This is when Alcan will determine what stake it will take in the smelter," Christen said.
He added that Alcan would make a final decision on whether to proceed by the end of next year.
Zungu said yesterday: "Sibumbene was generally accepted as the right empowerment partner. We will expect to be there and are waiting for discussions with Alcan to resume once the electricity agreement is in place."
The size of Sibumbene or another empowerment partner's stake in the smelter is unclear because it is not known how the project will be funded.
"We appreciate the circumstances may have changed and the risks may be different. We initially planned to fund our own stake, either independently or through leveraging projected cash flows from the smelter. Now funding depends on cash flows, Alcan or other equity partners facilitating BEE," Zungu said.
Through Africa Vanguard Capital (AVC), Zungu has an option over 17 percent of Lethimvula, which owns Medscheme and Rowan Angel. AVC also has a 26 percent interest in private equity business Brait South Africa.
African Vanguard Resources heads a broad-based consortium that owns 26 percent of sxr Uranium One Africa and Aflease Gold's projects.
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