Alcan seeks partners to supply alumina to SA smelter

Alcan Inc., the world's second-largest aluminum producer, said it is seeking partners to invest in a $2,7-billion smelter planned for South Africa.

Alcan is seeking “partners who will bring something to complement the existing ownership”, such as a source of alumina, Cynthia Carroll, the company's head of primary metal, said in a Toronto interview. “We are bringing technology and management expertise.” Montreal-based Alcan will own 30 percent of the Coega smelter, and the South African government may take 15 percent to 20 percent, Carroll said. Alcan will study ownership and project financing for the 700 000-ton-a-year smelter once a power-supply contract is signed, she said.

Negotiations for long-term electricity supply are being completed with Eskom Holdings Ltd., South Africa's state-owned power company. Talks may be completed by the end of the month, she said.

Alcan and rivals such as Alcoa Inc., the world's largest aluminum producer, are cutting spending in the US and Europe to build smelters in countries such as Iceland or South Africa that offer cheaper power. Power can account for a third of production costs.