Malaysia Press Metal says smelter plan on track

KUALA LUMPUR, Nov 25 (Reuters) - Press Metal, a Malaysian aluminium fabricator, said on Tuesday its plans to build a smelter are on track and that falling commodity prices would help reduce the project's overall cost. The first phase of the 2.5 billion ringgit ($689.3 million) smelter in Malaysia's Sarawak state on Borneo island will be completed on time by the middle of next year, Chief Executive Paul P. K. Koon said. "In fact, the current situation actually helped us in cost because steel and aluminium are the main contributing sectors," Koon told Reuters on the sidelines of a metal conference. "We believe that it will help us in reducing the overall cost. We are yet to work it out, we don't have the final figure but we see some reduction," he said. Aluminium hit a three-year low of $1,765 last week, having nearly halved since a record high in July due to rising stock levels and fears slowing global economies will dent demand. Earlier this year, Pres Metal announced its plans to build the smelter, with first-phase production capacity of 100,000 tonnes a year, starting with 50,000 tonnes by mid-2009. It had then put the first-phase capital cost at about 1 billion ringgit, with the overall cost potentially reaching 2.5 billion ringgit.