Alcan 'yes' to R21bn smelter project at Coega

ALCAN will build a R21-billion aluminium smelter at Coega and an agreement on the supply of electricity between the Canadian company and Eskom will be signed by the end of this year – perhaps as early as next month.

The smelter will create about 6 000 jobs during the construction phase and 1 000 when it becomes operational. Construction is likely to start at the beginning of 2008.

Alcan Primary Metal Group president and CEO Cynthia Carroll (Anglo-American CEO-designate) said Alcan was at the tail end of negotiating an energy contract with Eskom.

"We're wrapping up. We will sign shortly, before the end of the year. I'm very anxious to sign and optimistic about that project."

And, she stated in what amounted to a clear justification for the government's multi-billion-rand investment in infrastructure for the Coega industrial development zone and deepwater Port of Ngqura: "The infrastructure built around the Coega project was a fundamental aspect to us making the decision to go ahead."

"It's one of the best infrastructures I have seen throughout the world."

Carroll said infrastructure was critical to attracting foreign direct investment. “To create the right environment for investment is very important and establishing locations for investment is a great thing to be doing. And that's what the government is doing.

"The challenge is to keep jobs flowing in the economy and put out big growth targets in terms of GDP. Bringing in a company like Alcan is certainly the way to do it. The mindset, openness and willingness to change and do the right thing is really the reason we decided to come here – and the available workforce."

Carroll said she had formed relationships with Cabinet ministers over the past four years as a result of the negotiations around the smelter and she had been impressed with South African officials.

"In my dealing with the South African government, I've been very favourably impressed with their approach, mindset and drive."

Explaining the delays experienced with the Coega smelter – negotiations effectively started afresh after Alcan took over French company Pechiney that had been negotiating to build a smelter at Coega – Carroll pointed out that from a structural perspective and "from an economic return standpoint it was not going to be much for us".

"We sat down and reconfigured the entire project. That's why I say I've had experience with the South African government and I've been very impressed with their wanting to build a project that will be very successful in the long term."