28 March 2012 - AFP
KUALA LUMPUR � Resources giant Rio Tinto and a Malaysian partner have
scrapped plans for a $2 billion aluminium smelter in Borneo over
problems agreeing power supply terms, its local partner said.
Cahya Mata Sarawak (CMS), which owns 40 percent of the Sarawak Aluminium
Company (SALCO) smelter development in Sarawak state, announced the
termination late Tuesday in a filing with the Malaysian stock exchange.
The move was welcomed by environmentalists, who said it was a major blow
CMS, a family-linked business of Sarawak chief minister Abdul Taib
Mahmud who had backed the plant to promote a controversial
hydro-electric dam project.
Rio and Cahya Mata "agreed that they would cease to pursue plans to
jointly develop an aluminium smelter at Samalaju in Sarawak but remain
open to other future possible collaborations," CMS group managing
director Richard Curtis said in a statement.
He said they were "unable to finalise commercial power supply terms with
SEB (power supplier Sarawak Energy Bhd) which would meet the parties'
current respective financial considerations and economic imperatives".
The smelter was expected to have an initial production capacity of
550,000 tonnes of aluminium a year, with the potential to expand to 1.5
million tonnes.
Environmental group The Bruno Manser Fund welcomed the move and said in
a statement that Taib has "continually" used the smelter to promote the
controversial $2.2 billion Bakun hydroelectric dam.
The dam has been described by critics as "a graft-plagued human and
ecological disaster", but which officials said was needed to meet the
demand for electricity despite a power surplus.
Last December, environmental groups and activists from Malaysia, Europe
and Australia called for Taib's arrest over alleged crimes including
illegal appropriation of public funds and land, abuse of office, fraud,
money-laundering "and conspiracy to form a criminal organisation."
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