The Department of Trade and Industry, Eskom, Industrial Development Corporation (IDC) and Rio Tinto Alcan jointly acknowledge that, although some progress was made in discussions regarding the supply of electricity to the Coega aluminium smelter project, it was insufficient to proceed. This has led to the termination of the Electricity Supply Agreement in accordance with its terms and conditions.
Alcan Inc. (which later became Rio Tinto Alcan) and Eskom entered into an Electricity Supply Agreement on 24 November 2006 for the supply to a potential aluminium smelter in the Coega Industrial Zone.
In the wake of South Africa's unplanned power outages in early 2008, a high-level task force consisting of representatives from the government, Rio Tinto Alcan, IDC, and Eskom was established to examine alternative timing and approaches to realising the Coega project.
To date, the work of the task force has been productive but not conclusive enough to reach agreement prior to key deadlines.
Discussions between Eskom, Rio Tinto Alcan, IDC, and dti have continued over the past several months, but the parties agree that the current context regarding the supply of electricity has changed significantly and some of the terms of existing agreements would require further discussion and negotiation.
The parties also concur that it is of utmost importance that a project like the Coega aluminium smelter come on stream when power is reliably available and the facility's consumption does not impact the daily needs of South Africans.
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