South Africa: Alcan Names CEO for Coega

IN THE strongest indication yet that Coega will get its long-awaited aluminium smelter, Alcan yesterday announced the appointment of Brent Hegger as CEO of the smelter project and said the project was going ahead "full steam".

Hegger, a process engineer, recently worked as project director on the demonstration plant for the Pebble Bed Modular Reactor.
 
Robert Valdmanis, Alcan's director of public affairs for the South African project, said the company also was making progress with other key appointments and would announce these in due course.

"The team is coming together. It is now full steam ahead (for the project)," he said from Montreal.

Hegger would be responsible for the 720000-ton first phase of the greenfields project, which was expected to be completed by 2010, Alcan said in a statement yesterday.

Hegger's appointment takes effect on July 1.

Alcoa launched a hostile takeover bid for Alcan last month, raising doubts that the $2,75bn project and the Coega industrial development zone near Port Elizabeth would go ahead.

Alcan yesterday confirmed that it had turned down Alcoa's offer, which is open until July 10.

It said it was in advanced discussions with potential partners to conduct the project's detailed front-end engineering design. Valdmanis would not comment further on who the likely partners were.

Project financing was expected to account for about 60% of the total investment required. Construction on the project is scheduled to start next year, if the financial arrangements are secured.

Alcan's contribution to the smelter project would be substantial - it would retain 25% to 40% in equity - while the Industrial Development Corporation has pledged to take a 15% equity stake. The National Energy Fund will hold an unspecified stake.

The smelter has already been six years in the planning and negotiations had to virtually start from scratch when Alcan took over France's Pechiney, originally involved in the plans to build the smelter. Talks with Alcan have been dragging on since 2003.

Only at the end of last year did it seem as if SA was moving towards clinching the deal when Alcan and Eskom reached an agreement over the supply of electricity.

The smelter is seen as an anchor investment for Coega and has been described as crucial to secure the viability of the zone.