COEGA’S PLANNED aluminium smelter is once again “on hold”. This time the reason given is Eskom’s inability to provide power at a time when BHP Billiton, has had to scale down operations at its two South African aluminium smelters in order to meet Eskom’s demands for a 10% cut in power use. In a statement issued on March 13, Rio Tinto Alcan announced it was “in discussions” with the South African government on the “timing of the Coega smelter project”. This is the third major delay to the smelter, which was the catalyst behind the building of the port of Ngqura and the Coega Industrial Development Zone. Previous delays were caused by the original investor, Pechiney of France, being taken over by Alcan, with Alcan in turn being swallowed by Rio Tinto. BHP Billiton – which already has aluminium smelters in South Africa and Mozambique – now has its sights on Rio Tinto. According to the Rio Tinto statement, “a team, consisting of members from government, Rio Tinto and Eskom, are reviewing the terms of the project in order to align its timing with the availability of secure power generation capacity from Eskom. There were already questions about the power discounts offered to Rio Tinto in order to sweeten the Coega smelter deal. A long-term energy agreement for the proposed smelter was signed with Eskom in November 2006, but Eskom and the government have refused to release the details of the electricity subsidy which was part of the agreement.
