Cape Town, South Africa — MININGREVIEW.COM — 16 May 2008 – The Rio Tinto Group – the second-largest aluminium producer in the world – says it may still build a US$2.7 billion (R20 billion) plant in South Africa despite the national power crisis which has led to decreased production in the country’s mining industry
“We are still committed to it, we would like to see it go ahead,” said Dick Evans – CEO of Rio Tinto Alcan, the company’s aluminium unit – in an interview with Bloomberg News here, where he was attending a meeting of the International Aluminium Institute. “We would only go ahead when we see there is an assurance that we have reliable competitive power,” he added.
Eskom Holdings Ltd., the state-owned utility that generates 95 percent of South Africa’s electricity, was forced to cut supplies since January after being unable to meet demand amid the country’s longest period of growth on record.
The proposed plant – at the deepwater port of Coega, in the eastern Cape Province of the country – could produce 720 000 tpa of the lightweight metal.
Rio Tinto inherited the Coega project after acquiring Alcan last year. In April, Evans said the smelter, originally scheduled to start in 2010, would be delayed by between 1 and 4 years because of the electricity shortfall.
“We feel the best thing we can do is provide some slack in the system, so that we can both step back and re-assess when we might have certainty on power,” he said “What we need to do now is to develop sensible answers,” Public Enterprises Minister Alec Erwin added.
Bloomberg News quotes Evans as saying that power shortages in South Africa, as well as China and New Zealand, will crimp global aluminium production by 500 000 to 600 000 tonnes this year, and that will certainly slow the pace of growth in global output.