Al Abbar, Malaysian entrepreneur sign deal to build $1.6b smelter

Saturday, Apr 30, 2011

Gulf News

Dubai Gulf International Investment Group (GIIG) Holdings, headed by Malaysian entrepreneur Tan Sri Syed Mokhtar Al Bukhary, and UAE-based business leader Mohammad Al Abbar, have entered into a joint venture agreement with Aluminium Corporation of China (Chinalco) to develop a $1.6-billion (Dh5.87 billion) aluminium smelter in the state of Sarawak in Malaysia.

The joint venture marks a new milestone following the completion of the Heads of Agreement for the venture in February 2010.

Smelter Asia Sdn Bhd will develop, own and operate the private aluminium plant with an annual capacity of 370,000 metric tonnes during the first phase. On further availability of power from the grid, the plant capacity is planned to be increased up to 700,000 metric tonnes. The smelter will be located in Samalaju Industrial Park, about 60km from Bintulu and 180km from the Bakun hydroelectric dam. Samalaju Industrial Park is earmarked by the Sarawak state government for heavy industries under the Sarawak Corridor of Renewable Energy (Score) masterplan.

Global demand

Alongside the signing of the joint venture agreement, the project company, Smelter Asia, also executed the principal terms of the Power Purchase Agreement (PPA) with Syarikat Sesco Berhad, the wholly owned subsidiary of Sarawak Energy Berhad, to supply over 600MW of power to the proposed smelter. Smelter Asia and Syarikat Sesco Berhad will jointly conclude the PPA by the middle of this year.

Al Bukhary said: “Our strategic collaboration with Chinalco for Smelter Asia will bring the best-in-class technology to create a modern aluminium plant that will contribute to the socio-economic growth of Sarawak state.

Al Abbar added: “Smelter Asia is a powerful example of global collaborations to create a dynamic socio-economic growth engine for Malaysia. The plant will not only benefit the country but also support the Asean region’s development thrust by providing aluminium, which is critical in driving the massive infrastructure projects that are being planned.”

Zhang Chengzhong, Deputy General Manager of Chinalco, said: “I believe Smelter Asia would become an indispensable driving force that dramatically stimulates Sarawak economy growth.”

The Smelter Asia plant will have a strategic location within the Score corridor.

Staff Report

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