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Rio 'kills SA smelter project'

Oct 15 2009 14:20 Fin24.com reporter

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Johannesburg - Rio Tinto Group, the world's third-biggest mining company, scrapped a plan to build an aluminium smelter in South Africa after electricity shortages and a plan to raise tariffs, news service Bloomberg.com reported on Thursday.

According to two people familiar with the plan, Rio sent a termination letter to power utility Eskom, informing it that the proposed project has been called off.

Rio acquired the $2.6bn, 588 000 metric-ton-a-year Coega project on South Africa's east coast after the London-based company purchased Canadian aluminum producer Alcan in 2007. Rio said in October last year Coega's development was on hold until at least 2015 because of political uncertainty and a lack of electricity.

Eskom, which supplies about 95% of South Africa's power, says it will triple prices as it faces a shortfall in funding a R385bn expansion project.

- Fin24.com

 
 
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