Alcan under attack

Not only is Canada's  aluminium giant Alcan facing a hostile US$33bn takeover bid from US rival Alcoa, it is also being attacked by green lobbies at home and in SA over its $2,7bn smelter in Coega.

What is worrying Canada's pressure groups is that Alcan will use power from coal to drive the Coega smelter, in which it looks set to take a 40% interest. In many of its other global smelters, reports the Montreal Gazette, Alcan uses "clean fuels", such as hydro, geothermal and gas. "The use of coal power at Coega has horrified observers," the newspaper writes.

In November last year Alcan signed a 25-year power contract with Eskom that guarantees 1 300 MW of power from the smelter's start-up in 2010. Eskom will use power generated by its coal-fired power stations in Mpumalanga.

The Gazette quotes Patrick Tobin, Alcan's director of government & corporate relations, as saying that the company "will seek to mitigate the environmental footprint of the new coal-fired generators by working with Eskom".

The pricing deal between Eskom and Alcan is the subject of protests by local environmental groups, led by Earthlife Africa. Protests were planned for this Wednesday, focus ing on the secrecy of the deal. In a statement, Earthlife accused Eskom of subsidising power prices for Alcan to secure the investment, "which will create less than 1 000 jobs".

"The power for the smelter will be heavily subsided, borne by society as a whole. This subsidy will be in addition to the R1,9bn in tax incentives already showered upon Coega," Earthlife charges. "A reasonable estimate of the price of electricity granted to Alcan is around 5c/ kilowatt hour, substantially lower than the average rates charged to industry and households [16c and 29c respectively]."

Mineral & energy minister Buyelwa Sonjica says Alcan would be charged in terms of government's developmental electricity pricing, which is globally competitive, "but not subsidised by other customers". She would not reveal the rate "as it is subject to a confidentiality agreement with Alcan".