Crunch time for Coega

Jan 14, 2004
Author: P&S


Talks are being held this week between representatives of Montreal-based Alcan and France’s Pechiney, and the South African Industrial Development Corporation (IDC) and Eskom about the proposed aluminium smelter at Coega, where preparation of the site has already begun.

Eskom and the IDC jointly hold a 25 % stake in the proposed smelter, and Eskom is committed to provide electric power along a 1 000 km route from the inland power stations to the coast at Coega.

Pechiney’s recent acquisition by Alcan has however placed the project in question. The Alcan/Pechiney delegation is in South Africa to conduct due diligence enquiries into the proposal, which if it goes ahead will provide the new port with its first anchor tenant.

During December Alcan indicated its top priority was to dispose of assets in order to avoid antitrust regulations, and said it would first undertake commitments made with the European Commission regarding the divesting of flat-rolled products.

The port of Coega is expected to become available to shipping in 2005 when the first of five berths – two for containers, two for dry bulk cargo and one for liquid bulk will open for business. The controversial proposal has had a succession of would-be anchor tenants, all of which have fallen through for a variety of reasons.

Transnet, which has control over the South African ports, has committed itself to building the port regardless of whether the smelter is built. It believes the long-term benefits outweigh the risks and the container terminal will provide a safety valve for the other ports such as Durban, with the potential of becoming a southern African hub.

Initial plans for the container terminal at Coega envisages a capacity of 500,000 TEUS but space to enlarge the terminal and port is unlimited.


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