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Borneo, Sarawak, Sarawak Corridor of Renewable Energy (SCORE), Sarawak Economy

SCORE not affected by RTA-CMS aluminium smelter scrapping

THE Sarawak Corridor of Renewable Energy (SCORE) will not be affected by the scrapping of an aluminium smelter project between Rio Tinto Alcan (RTA) and Cahya Mata Sarawak (CMS).

Chief Minister Pehin Sri Abdul Taib Mahmud said the cancellation of the pact was not an issue as there are two other companies on the waiting list.

“In fact I am short of power at the moment for aluminium. I can only accommodate one at a time so if this one is not on, it doesn’t matter because there is another one that will be coming,” he is quoted as saying.

“They in fact came to see me and said that they may not participate at this early stage of the project because the company has experienced some slight restructuring lately, but they may come back later.”

Second Minister of Resource Planning and Environment Datuk Amar Awang Tengah Ali Hasan pointed out that the government would not incur any losses from the failed discussions as companies from China and the Middle East are on a long list of investors keen to have a stake in SCORE.

The Minister of Industrial Development added that four companies have already commenced operations at the Samalaju Industrial Park (SIP) under SCORE and another 20 firms had been given approval to operate there.

“The state is not worried about (not getting) investment takers. The main worry now is having sufficient supply of power for the investors,” Datuk Amar Awang Tengah is quoted as saying.

Meanwhile, Sarawak Energy Berhad (SEB) pointed out that it is expected to sell 2,000 megawatts of power to export customers.

“This means the entire firm output of the Bakun hydroelectric facility is already committed. There is now a long queue of potential customers competing for SEB’s remaining power,” said SEB CEO Torstein Dale Sjotveit in a statement.

He added that Press Metal’s new aluminium smelter, which was on track to commence operations by June this year, would take 480 megawatts while the construction of other plants was well advanced.

So even without Rio Tinto, SCORE is still forging ahead. In fact the scrapping would enable new investors from other countries to play a part in SCORE.

Reports from The Borneo Post:

No shortage of takers

By Johnson K Saai

KUCHING:SCORE on track despite Rio Tinto’s withdrawal from smelter pact.

The termination of a pact between Cahya Mata Sarawak (CMS) and Rio Tinto Aluminium (M) Sdn Bhd (RTA) to set up a smelter plant in Samalaju would not affect the implementation of the Sarawak Corridor of Renewable Energy (SCORE).

Chief Minister Pehin Sri Abdul Taib Mahmud said the cancellation of the pact was not an issue as there were two other companies on the waiting list.

“In fact I am short of power at the moment for aluminium. I can only accommodate one at a time so if this one is not on it doesn’t matter because there is another one that will be coming,” he said without elaborating.

Taib told reporters this after launching the Malaysian Red Crescent (MRC) Kuching Chapter’s Flag Day yesterday.

“They in fact came to see me and said that they may not participate at this early stage of the project because the company has experienced some slight restructuring lately, but they may come back later,” he said.

According to a report from Reuters yesterday, Rio Tinto signalled a major retreat from its global aluminium business last October when it unveiled plans to sell 13 assets, including smelters and alumina refineries.

This came just four years after the company purchased aluminium giant Alcan for US$38.1 billion in one of the sector’s biggest ever deals. Last month, Rio Tinto slashed the book value of Alcan by US$9 billion.

The company is also exiting its diamond business, which includes operations in Zimbabwe, Canada and Australia, with assets worth up to US$2 billion.

On Tuesday, CMS said in a press statement that the termination involved heads of agreement between RTA and Samalaju Aluminium Industries Sdn Bhd, its wholly-owned unit, and the memorandum of understanding between both parties and Sarawak Energy Bhd (SEB).

CMS group managing director Datuk Richard Curtis said RTA and CMS had agreed they would cease to pursue plans to jointly develop an aluminium smelter at Samalaju but remained open to other future possible collaborations.

Curtis also said CMS remained committed to being a leading local private sector participant in the realisation of SCORE.

Two in queue to fill vacuum left by Rio Tinto

By Geryl Ogilvy Ruekeith

KUCHING: Sarawak remains upbeat about wooing more investors to the Sarawak Corridor of Renewable Energy (SCORE) despite the withdrawal of Rio Tinto Aluminium (M) Sdn Bhd (Rio Tinto) from setting up a smelter plant at Samalaju.

Second Minister of Resource Planning and Environment Datuk Amar Awang Tengah Ali Hassan yesterday said the government would not incur any losses from the failed discussions as there were two other companies lining up to take over the project.

The companies, from China and the Middle East, are among the long list of investors keen to have a stake in SCORE.

Awang Tengah, who is also Minister of Industrial Development, said as of today four companies had commenced operations at the Samalaju Industrial Park (SIP), and another 20 firms had been given approval to operate there.

“After long discussions and negotiations (for the proposed smelter plant), unfortunately all parties failed to come to a commercial agreement with regards to the electricity tariff.

“However, we have a long line of takers who are ready to take up whatever excess power that we have.

“The state is not worried about (not getting) investment takers. The main worry now is having sufficient supply of power for the investors,” he told a press conference after officiating at Land and Survey Department’s ‘Innovation and Integrity Day’ at Four Points by Sheraton Hotel here.

Also present were Assistant Minister of Resource Planning Datuk Mohd Naroden Majais, its Permanent Secretary Datu Sudarsono Othman, and state Land and Survey director Sajeli Kipli.

Awang Tengah said most of the power from the first bloc of Bakun dam and other hydro dams were already committed to investors in SCORE.

The failed discussions between CMS and Rio Tinto with regards to the proposed smelter project after several years of discussions headlined the local media news yesterday.

CMS, in a statement, said the termination involved heads of agreement between Rio Tinto and Samalaju Aluminium Industries Sdn Bhd, its wholly-owned unit, and the Memorandum of Understanding (MoU) between both parties and Sarawak Energy Bhd (SEB).

Both companies had been in communication for several years to establish an aluminium smelter plant, but were unable to finalise the kind of commercial power supply terms with SEB which would meet the parties’ respective financial considerations and economic imperatives.

CMS Group managing director Datuk Richard Curtis said the company remained committed to being a leading local
private sector participant in SCORE.

CMS currently undertakes a 20 per cent participation in the planned 600,000 metric tonnes manganese and ferro alloy smelter which is scheduled to begin production next year.

“This smelter is being established in SIP by a subsidiary of OM Holdings Ltd, an Australian listed miner, manufacturer and trader of manganese, iron and chrome ores and alloys,” he said.

It also involved the provision of accommodation and other related services to workers within SIP as well as in the master developer role for the planned township to adjoin the park.

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  1. Pingback: Why the Rio Tinto aluminium smelter project fell through … « Parochial Sarawakian - March 29, 2012

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