SA power cuts hit Rio Tinto project
 
                                         Staff reporter
 
Global resources group, Rio Tinto Alcan says it is reviewing the construction of a US$2 billion Aluminium smelter as South Africa’s power supply crisis continues to undermine the country’s key mining sector.

The Coega Smelter project in South Africa ‘s Eastern Cape Province is being developed in a joint venture with the government’s Industrial Development Corporation and is expected to produce up to 660 000 tonnes of aluminium per annum.

Rio Tinto says it is in talks with the South African authorities aimed at reviewing the terms of the project and realigning its timing with the availability of secure electricity supplies for the country’s power utility Eskom.

 “The objective is to preserve the feasibility of the project and its underlying benefits for both Rio Tinto and South Africa, having the long term picture in mind,” said Rio Tinto Alcan official, Sandeep Biswas.

The company says the project will move into an interim phase pending the outcome of ongoing discussions regarding its timing.

South Africa’s Industrial Development Corporation (IDC) is a 15 per cent partner in the project while an additional allocation of no at least 5 per cent, has been reserved black economic empowerment partners.

An unexpected surge in demand has results in power supply problems in South Africa forcing the country’s gold and platinum mining companies to momentarily suspend operations in January.

Other countries in the region such as Zimbabwe, which depend on supplies from South Africa to augment local generation, have also been affected.