INTERVIEW-Malaysia's Press Metal says to partner Chalco
BINTULU, Malaysia Feb 11 (Reuters) - Malaysian aluminium fabricator Press Metal (PMET.KL) said on Monday it has chosen the Aluminum Corp of China Ltd (Chalco) (2600.HK) as its technical partner for a $770 million aluminium smelter project.
Press Metal plans to build a smelter in Malaysia's Sarawak state, on Borneo island, with first-phase production capacity of 100,000 tonnes a year, starting with 50,000 tonnes by mid-2009, Chief Executive Paul P.K. Koon told Reuters.
He named Chalco (601600.SS) as project partner but said there was no talk yet of the Chinese firm taking an equity stake.
"At the moment, it is just technology and engineering," he said on the sidelines of the launch of a state development agenda for Sarawak, which plans to use hydro-electricity as the platform for growing a range of power-intensive, heavy industries.
Koon put the first-phase capital cost at about 1 billion ringgit ($310 million), with the overall cost potentially reaching 2.5 billion ringgit, though he did not say how much extra production this additional investment would imply.
"It's a small project," Koon said, adding that the smelter would be funded using project finance.
The smelter would source its alumina supplies from Australia, he added, but did not elaborate. "There is quite a lot of alumina around. Primarily it will be Australian," he said.
Press Metal has signed a memorandum of understanding with Sarawak's power distributor, Sarawak Energy Bhd SARA.KL, to take 510 megawatts of power for the new smelter, Koon said. ($1=3.230 Malaysian Ringgit)
(Writing by Mark Bendeich, editing by Jacqueline Wong)
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