Chinese action could swing Alcan in favour of Coega

Scrapping of tax incentives benefits SA ED RICHARDSON A SENIOR South African government official is confident that Coega now stands a better chance of Canadian group, Alcan, investing in a R12.9 billion aluminium smelter at the Eastern Cape site after China’s announcement to put an end to tax incentives on imported alumina, which came into effect August 22. “This absolutely boosts the chances of the Coega smelter. South Africa has a competitive advantage of cheap, abundant, and uninterrupted electricity supply relative to other countries,” Lionel October, a deputy director-general at the department of trade and industry, is quoted as saying in a recent Business Report. October added that Alcan “is putting all of its energy into developing the project” and that they were no longer “talking to our competitors anymore”. Australia and Oman were the two other countries bidding for Alcan’s investment. An analyst told the paper that SA would also be favourable for Alcan because of the country’s ability to produce cheap energy. Electricity shortages caused by aluminium production in Asian countries prompted China’s decision to abolish tax incentives on the white power that produces aluminium.