Greenland delays decision on Alcoa plant

* Investment nod put back to Spring 2010 * Scales back likely involvement * Says more studies needed on construction costs By Teis Jensen COPENHAGEN, July 15 - Greenland has delayed a decision on joining Alcoa Inc in a planned aluminium venture and scaled back its possible stake to 10 to 30 percent. The chief executive of state body Greenland Development said more time was needed to estimate construction costs at the smelter and hydropower venture in Maniitsoq. "It has been postponed because we haven't finished the field investigations yet," Flemming Drechsel told Reuters on Wednesday. Greenland's parliament will decide on the venture in spring 2010 and not this autumn as earlier planned. Alcoa spokesman Kevin Lowery said: "We are awaiting their decision. It's not something we were going to start building tomorrow, obviously we will continue to talk with them to move the project forward." Alcoa and Greenland announced in 2007 they would explore building a plant and said construction could begin in 2010, with production starting in 2014. The company and the North Atlantic island's self-rule government have been discussing the posibility of Greenland taking an up to 50 percent stake in the project but Drechsel said the government was now considering 10 to 30 percent. The proposal consists of a smelter with annual capacity of at least 350,000 tonnes and two hydropower plants. Annual revenue is estimated at 3-4 billion Danish crowns ($566-754.7 million). "Now we expect that the investments will be less than the previously estimated 19 billion to 23 billion Danish crowns," Drechsel said. "In the first pre-feasibility study two years ago, the estimate was that it could be financed with 75 to 80 percent lending capital," Drechsel said. "Now the estimate is 60 to 65 percent because banks and other financial institutions have become more risk-averse." Since Alcoa is only looking for a 50 percent share, the door could be open to other partners. Greenland media earlier reported that the Japanese company Mitsui <8031.T> had shown interest. "We have also had contact with other interested third parties whose names we cannot disclose yet," Drechsel said.