Ed Richardson THE INDUSTRIAL Develop-ment Corporation of South Africa (IDC) has approved a 12.5% conditional equity participation in the R16 billion (US$ 2,2 billion) Coega Aluminium smelter project, led by French company Aluminium Pechiney. A statement from the IDC board says this decision comes after an extensive due diligence process with the assistance of HSBC Investment Services (Africa) and Hatch (Africa) as financial and technical advisors respectively. The smelter, to be located in the Coega Industrial Development Zone near Port Elizabeth, is expected to provide substantial benefits to the Eastern Cape and the South African economy as a whole. R3, 5 billion will be spent on locally manufactured capital goods and services, up to 6 000 jobs will be created at the peak of the construction period, and thousands more through linkages in down-stream activities in the regional economy. Export earnings are expected to be around R5, 6 billion per annum when the smelter is fully operational, according to IDC executive vice president marketing and corporate affairs, Neo Sowazi. Sowazi says a hostile takeover bid of Pechiney by the Canadian Alcan Corporation “whilst not directly influencing the decision, is being closely monitored at this stage”.
