Status of the Proposed Aluminium Smelters in Mukah and Similajau

YB Chiew Chiu Sing N.59 - Kidurong

10. To ask the Chief Minister: (Written Answer)

State the status of the proposed aluminium smelters both in Mukah and Similajau including:

(a) Stage of development;

(b) Basis of the selection process of the smelting companiesconcerned;

(c) Shareholding ownership of your company;

(d) Funding of the construction of the facilities concerned;

(e) Status of the EIA process and the inclusion of publicparticipation; and

(f) Number of affected communities, whether directly (relocation)or indirectly/ how they have been consulted and whether theirfree, prior and informed consent is obtained.





Answer :

Dato Sri Speaker,

The proposed aluminium smelters in Mukah and Similajau are still at the planning stage and are progressing as scheduled. The status of specific major items in regard to the proposed aluminium smelter projects are as follows:

• The manufacturing licence for both projects had been approvedby the Malaysian Industrial Development Authority (MIDA);

• The Power Purchase Agreement (PPA) had been signed betweenSarawak Energy Berhad (SEB) and Press Metal Sarawak SdnBhd whereas the PPA for SALCO is still at negotiating stage; and

• An area of 366 hectares in Mukah and 800 hectares at SamalajuIndustrial Park, Bintulu had been approved for Press MetalSarawak Sdn Bhd and earmarked for SALCO respectively.
Since the launching of SCORE on 11th February 2008, it has attracted many inquiries from investors, especially foreign investors who are seriously interested to invest in SCORE area. The numerous inquiries received and the expected huge inflow of foreign direct investment are indeed early indicator on the attractiveness of Sarawak as a whole and SCORE in particular as the preferred new investment location for heavy, capital and energy intensive industry in the region.

The decision made by these industries which are categorized as trigger industries to establish their manufacturing plants in SCORE area are to us very critical to immediately kick start the development within SCORE area and as a whole to broaden the state industrial base. Foreign investors see SCORE area as an ideal location for their proposed investment and their decision on whether to invest or not in SCORE area are based on stringent guidelines, requirements and evaluation to ensure their business competitiveness.

Efforts to entice foreign investors are very competitive. They want to invest where cost of production is low and near to market. Most importantly, they will go where the Government is business friendly and no restriction on ownership is imposed. Foreign investors are allowed 100% ownership of their proposed investments in SCORE. Since the investment involved is huge, and using the latest technology, they normally want to be in full control of the project for their business success and survival. However, Joint Venture (JV) between local and foreign investors for any investment proposal is encouraged. The selection of local partner is determined entirely by the foreign investors based on their own evaluation. The two aluminium smelting projects are joint ventures between local and foreign companies.

The proposed aluminium smelter projects are entirely private sector initiatives. The initiatives involved joint ventures between local partners and foreign investors. Therefore, no funding from the government is required for the construction of facilities of the proposed projects.
Department of Environment (DOE) is processing the DEIA Report for Press Metal Sarawak Sdn Bhd, whereas for SALCO, the Term of Reference (TOR) has been approved. The EIA studies required for these two projects are conducted in accordance with existing environmental law and regulations whereby public participation and feedback is needed and incorporated in the report.
The proposed projects will be set-up within the designated area/industrial estates to be developed by the Government agencies. Thus, there is no relocation of communities involved.