Dubai; April 29, 2011(WAM)--Gulf International Investment Group (GIIG) Holdings Sdn Bhd, headed by Malaysian entrepreneur Tan Sri Syed Mokhtar Al-Bukhary and Mohamed Alabbar, has entered into a joint venture agreement with Aluminium Corporation of China (CHINALCO) to develop a US$1.6 billion aluminium smelting plant in the State of Sarawak, Malaysia.

The joint venture agreement marks a new milestone following the execution of the Heads of Agreement for the joint 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 60 km from Bintulu and some 180 km 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.

Alongside the signing of the joint venture agreement between GIIG Holdings and CHINALCO, 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, for over 600 MW of power supply to the proposed aluminium smelting plant. Smelter Asia and Syarikat SESCO Berhad will jointly conclude the PPA by the middle of this year.

Tan Sri Syed Mokhtar Al-Bukhary said: "The global demand for aluminium is projected to grow by an average four per cent over the next five years, with Asia driving the demand. 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. The plant will create new jobs and drive the growth of supporting industries, thus contributing significantly to the development of the state of Sarawak as well as the Malaysian economy." Alabbar said: "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 regions development thrust by providing aluminium, which is critical in driving the massive infrastructure projects that are being planned. The final design and construction plans for Smelter Asia are progressing and will be announced in due course." Zhang Chengzhong, Deputy General Manager of CHINALCO said: "CHINALCO and its subsidiary CHALCO has been working closely with GIIG for the development of Smelter Asia Project over the past years. This signing of Joint Venture Agreement marks a significant milestone in the course of Project development. CHINALCO will make further efforts to strengthen collaboration with our reliable partner GIIG, adopt state-of-art smelting technology provided by our engineering company and expedite the construction of the project. 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 of the State of Sarawak, where the availability of world-class infrastructure, port facilities and proximity to the fast growing markets will enable Smelter Asia to timely meet the demand for aluminium from global markets. Smelter Asia is committed to be amongst the low-cost producers and a significant player in the aluminium industry in all areas including health, safety and environment (HSE) and its corporate social responsibilities.

Copyright Emirates News Agency (WAM) 2011.