COMPANY TO BE LEAD PARTNER WITH 25-40 PERCENT EQUITY IN 720KT SMELTER, USING ALCAN’S PROPRIETARY WORLD-CLASS TECHNOLOGY
Port Elizabeth, South Africa - Alcan has secured a long-term supply agreement with South-African energy firm, ESKOM Holdings Limited, for the purchase of up to 1355 MVA of electricity for the proposed 720kt greenfield COEGA aluminum smelter project, which will have a total estimated cost of US$2.7 billion. The agreement provides for a 25-year supply, set to begin in 2010.
"Alcan is engaged in successfully developing some of the most attractive smelter projects for primary aluminum production in the world, including this potential smelter in South Africa, all characterized by secure, competitively priced, long-term energy supplies, and leveraged by our world leading technology," said Dick Evans, President and Chief Executive Officer, Alcan Inc.
"Today’s agreement is a key step towards the realization of this important project – important for both Alcan and South Africa," said Michel Jacques, President and Chief Executive Officer, Alcan Primary Metal Group.
Alcan will now begin discussions with potential partners, and will launch a selection process for an EPCM firm to conduct the project’s detailed Front End Engineering Design. Similar to the successful business model implemented at Sohar Aluminium in Oman, Alcan’s current intention is to retain between 25-40 percent of the equity of the project and seek partners for the balance. Project financing is expected to account for approximately 60 percent of the total investment required.
The greenfield project will use the latest version of Alcan’s proprietary AP35 Series Smelting Technology and is expected to operate in the 1st quartile of the industry’s global cost curve. AP Series Smelting Technologies are used in 80 percent of the world’s newly installed capacity, outside China, over the past 10 years.
Subject to successful completion of the project's next steps and financing arrangements, construction is expected to begin in 2008 and result in first metal production before the end of 2010.
Alcan Inc. (NYSE, TSX: AL) is a leading global materials company, delivering high quality products and services worldwide. With world-class technology and operations in bauxite mining, alumina processing, primary metal smelting, power generation, aluminum fabrication, engineered solutions as well as flexible and specialty packaging, today’s Alcan is well positioned to meet and exceed its customers’ needs. Alcan is represented by 65,000 employees in 61 countries and regions, and posted revenues of US$20.3 billion in 2005. The Company has featured on the Dow Jones Sustainability World Index consecutively since 2003. For more information, please visit: www.alcan.com.
Statements made in this press release which describe the Company or management’s objectives, projections, estimates, expectations or predictions may be "forward-looking statements" within the meaning of securities laws. The Company cautions that, by their nature, forward-looking statements involve risk and uncertainty and that the Company's actual actions or results could differ materially from those expressed or implied in such forward-looking statements or could affect the extent to which a particular projection is realized. Reference should be made to the Company’s most recent Quarterly Report on Form 10-Q or Annual Report on Form 10-K for a list of factors that could cause such differences.
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