Pechiney close to decision on Coega.

Posted On Monday, 14 April 2003 02:00 Published by eProp Commercial Property News
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A final decision by French aluminium group Pechiney on whether it will build a R20bn smelter plant within the Coega industrial development zone (IDZ) in Eastern Cape is expected before November this year.

Property-Housing-Residential

Speaking at an onsite media briefing yesterday, Coega Development Corporation (CDC) business manager Graham Price said that the French company was currently negotiating equity partnerships, and "thereafter will go out and look for debt financing".

He said there would be "no immediate green light" from Pechiney, but if the company's negotiations were successful, it could be on site "sometime in November".

A greenlight decision will give CDC the "anchor tenant" it has been anxious to attract to assure the success of the Coega project, which involves the establishment of a 12000ha IDZ and deepwater port at the mouth of the Coega River, about 20km east of Port Elizabeth.

In a statement yesterday, the CDC said a final commitment from Pechiney would be a major milestone for the project, but emphasised that its future success "does not depend on a single investor".

It said the total investment cost of the aluminium project would be about R20bn. Of this, R9,2-billion would constitute capital costs.

The CDC said Pechiney was following a "structured decision-making process".

"Construction will, however, only start once the finance is all in place. Pechiney is reported to be looking for equity partners."

On interest from other companies keen to set up in the IDZ, Price said he had received 100 inquiries over the past 18 months.

"We're currently the subject of at least 12 or 14 quite serious feasibility studies. And I'm encouraged by at least 10 of these."

They involved, among others, industries in the electronics, metallurgical, and petrochemical sectors, Price said.

CDC communications executive manager Raymond Hartle said SA needed a deepwater port and industrial infrastructure to provide opportunities for export-driven manufacturing. He was confident it would not turn into a "white elephant", and said that the decision to establish Coega had been a "sound commercial decision".

Last modified on Thursday, 26 June 2014 15:51

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