Salco close to finalising power buying agreement

KUALA LUMPUR: Sarawak Aluminium Co Sdn Bhd (Salco) expects to finalise its power purchase agreement (PPA) with Sarawak Energy Board (SEB) in the next few months. Salco, which is a joint venture between Rio Tinto Alcan Group (RTA) and Cahya Mata Sarawak Bhd (CMA), is proposing to set up a US$3bil smelting plant in Similajau. “Since we are trying to secure a long-term PPA of about 40 to 50 years, we need to reach a win-win solution,” RTA director of business development (Asia) Matt Liddy told reporters on the sideline of the 5th International Aluminium Conference yesterday. Salco has anticipated that the SEB will initially provide power for the Salco smelter from the Bakun hydro-electric dam but ultimately, it is expected to source power from alternate hydro-generating assets if and when the undersea cable project taking power to Peninsular Malaysia proceeds. Liddy said Salco wanted to conclude the PPA before it carried out a detailed feasibility study on the smelting plant. Over the past 12 months, Salco had undertaken a pre-feasibility study involving obtaining a manufacturing licence from the Malaysia Industrial Development Authority, the approval of its environmental impact assessment and conclusion of the PPA. Liddy said Salco had forked out about RM15mil for the pre-feasibility study. Typically, a detailed feasibility study for a world-class smelting plant will cost about RM150mil. “Once the detailed study is completed and regulatory approvals are in place, CMS and RTA will approach their boards for a final decision. “If a decision to proceed is made, construction of the smelting plant will take about two to three years,” he said. ---Malaysia Star