Negotiations Ongoing For Bintulu Aluminium Smelter Project, Says Taib

KUCHING, Dec 12 (Bernama) -- Negotiations are still ongoing between joint partners, Rio Tinto Alcan and Cahaya Mata Sarawak (CMS), to ensure the Bintulu aluminium smelter project takes off as planned, Chief Minister Tan Sri Abdul Taib Mahmud said Friday. He said the current global economic downturn was the best time to invest as the price of steel and many other materials had fallen due to the recession. "The negotiations are ongoing. I was also told by Rio Tinto that the investment figure quoted in the newspapers is incorrect," he told reporters after officiating the ground-breaking ceremony for the construction of the RM140 million Inland Revenue Board (IRB) Sarawak, Malaysian Taxation Academy at Jalan Tabuan here. "The investment is still around RM10 billion,which is a good estimate in view of the lower prices of commodities like steel and not RM14 billion as reported," he said. The smelter project is a 40:60 joint venture between CMS and Rio Tinto, the world's third largest mining group and one of Sarawak's biggest foreign direct investors. Taib said the project to be sited on a 160 hectare land in Similajau near Bintulu under the Sarawak Corridor of Renewable Energy(Score), was on track, with negotiations with Sarawak Energy Bhd to provide power from the Bakun hydro electric dam. The plant is expected to begin operations in late 2010 at a higher annual capacity of 720,000 tonnes of aluminium instead of the earlier planned capacity of 550,000 tonnes and is capable of ramping up production to 1.5 million tonnes a year, to meet demand. Downstream activities, including further processing of the aluminium into products such as cables and semi-finished goods for the domestic and export markets, are also expected to be promoted. Speculation has been rife of late over the project's future following the latest report that Rio Tinto is cutting thousands of jobs and selling assets to reduce its burgeoning debt.