Cameroon firms to get 30 pct of Alcan smelter work

YAOUNDE, Feb 7 - Canadian aluminium maker Alcan has agreed to guarantee Cameroonian firms 30 percent of construction contracts for a proposed smelter upgrade, a business leader in the central African state said on Wednesday.

The deal was reached during preliminary meetings between Alcan directors, Cameroon government officials and the Chamber of Commerce, Industries, Mines and Crafts (CCIMA), the Chamber's Christian Essawe Eyobo told reporters in the capital Yaounde.

"The government has negotiated and obtained that Alcan that will reserve at least 30 percent of the cost of construction work and services during expansion of Alucam for local enterprises," Eyobo told reporters.

Alcan signed a letter of intent with the government in October 2005 to upgrade and expand their Alucam joint venture's Edea aluminium smelter and build a new hydroelectric power station, but has not announced a final decision on whether to go ahead with the project.

Eyobo said work on the expansion of ALUCAM -- in which Alcan and Cameroon each own 46.7 percent -- is expected to start in the first quarter of 2008 and last until 2011, suggesting a final decision may not be far off.

He said local companies should band together to win contracts for the project.

"CCIMA is therefore advising heads of local small and medium size enterprises to come together to form economic interest groups in their various domains of competence so as to raise enough capital and win contracts," Eyobo said.

The project aims to raise aluminium production to 300,000 tonnes per year, from 90,000 at present, through upgrades to the existing potline and the construction of a second potline.

The proposals include building the Lom Pangar Dam further up the Sanaga river from Nachtigal to ensure steady water supply to hydropower plants downstream during the dry season, as well as expanding the country's main port at Douala and building a new road linking the port to the Edea factory.

The smelter upgrade project depends on building a new hydroelectric power station at Nachtigal on the River Sanaga some 70 km (45 miles) east of Yaounde.

An environmental impact assessment has been launched, along with technical and economic studies for the project.