Rio Tinto: Not Given Up On Coega Aluminum Smelter Project

LONDON (Dow Jones)-Rio Tinto PLC (RTP) hasn’t given up on its planned Coega aluminum smelter in South Africa and is still working to push the project forward, a company spokesman told Dow Jones Newswires Friday.

"We are working with the South African government to find a mutually agreeable path forward," said Rio Tinto’s Nick Cobban.

The power crisis in South Africa has forced Rio Tinto to reconsider plans to build a smelter there until it gets a commitment from the country’s Eskom power utility on energy supply. A smelter producing 360,000 metric tons of aluminum a year is planned at Coega, with the intention of eventually doubling this.

Recently the company said it would delay a decision on building the project for one to four years, instead diverting engineering and financial resources toward expanding capacity at existing facilities in British Columbia, Quebec or Oman.

"We are not going to build a smelter unless we have high assurance there will be power," Dick Evans, chief executive of Rio Tinto Alcan, said last week.

South Africa is facing a power crisis that has seen reduced electricity allocations to energy-intensive industries, such as metals and mining.