IDC likely to take 12,5% of smelter project at Coega.

Posted On Tuesday, 12 August 2003 02:00 Published by eProp Commercial Property News
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Industrial zone vital to SA corporation CE.

Property-Housing-ResidentialThe Industrial Development Corporation (IDC) is expected to decide this month to take a 12,5% stake in the planned $2bn aluminium smelter which is expected to be built at Coega.

 IDC CE Khaya Ngqula said yesterday that while the decision still had to go before the IDC's board of directors, the Coega project is a vital one for SA suggesting it will receive the thumbs up.

 Eskom is also set to take a 12,5% stake, with French aluminium group Pechiney having recently pledged that it would sign up for a 49% stake.

 Empowerment interests and the Beny Steinmetz group, which owns construction and project management firm Bateman, are also expected to be investors.

 "We support the project, and think it's viable and robust," said Ngqula. "There are a few remaining issues but it looks very positive."

 He said as well as being likely to take a 12,5% stake in the project, the IDC would be "lead arranger in loan financing".

 "This project is crucial and vital, for Eastern Cape. We think it will show that projects like this can stand on their own legs without being subsidised."

 Pechiney is the target for a hostile bid from Canadian group Alcan, but Ngqula said he did not believe this could derail the Coega smelter project.

 "We will talk to whoever owns Pechiney this project is viable with or without Pechiney. That's why BHP- Billiton has been looking at it."

 He said the advantage of Alcan becoming involved was that it was a diversified group, which could bring downstream investment to Coega, in the form of packaging and other businesses.

 "We would love to see lots of downstream investment the smelter will only provide 750 to 1000 jobs," said Ngqula. "We hope to interest them in other downstream development in SA."

 He said the IDC still needed some assurances before it gave its final backing to the Coega smelter project. These mainly concerned the viability of all the partners: "If there are funding overruns, do these people have deep pockets?"

 Ngqula said the IDC was also keen to promote a R2bn revival of the port area at Port Elizabeth with the planned transfer of tank farms and manganese dumps to Coega allowing the older port to become a more attractive facility, with vast tourism potential.

 "We would like to see a waterfront, with a marina, hotels, flats, cultural villages and so on," said Ngqula.

 He said the IDC had pledged its support for projects being planned by the local development agency.

 "It is an excellent coastline. Tourism in Port Elizabeth is booming, with charter flights from the Nordic countries, the development of game reserves in the area and the potential for greater marketing of the city as the start of the garden route. The sky's the limit and it's happening," he said.

 Ngqula said development through local government "is the key to developing our economy. We are also looking at the industrial development zone in East London, and the IDC executive committee is planning a visit there to see what projects are planned and where we could become involved and we will make similar visits right across the country''.

Last modified on Thursday, 26 June 2014 18:11

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