Little interest in Coega from mining majors

global diversified mining majors bhp billiton (bil), anglo american (anglo, agl) and brazil's companhia vale do rio doce (cvrd), have at this stage indicated little or no interest in getting involved in south africa's coega industrial development zone.

a proposed $2.2 billion aluminium smelter has been expected to anchor the coega project with canadian aluminium group alcan set to make a vital decision in june or early july regarding its involvement.

to date coega hasn't been able to get any investors to sign on the dotted line and participate in coega.

however, the south african national ports authority is currently in the process of spending r3.2 billion on building the coega deep-water port, and french engineering group alstom has a r200 million contract to put in place bulk electricity infrastructure.

in addition, a total of 316 million rand is budgeted for new as well as improved road infrastructure.

"i have checked with our board of directors and up to now cvrd has not been contacted by the south african government about this issue (of investing in coega)."

"maybe they might have the intention to talk to us, but they haven't done that yet," cvrd international media officer patricia malavez told i-net bridge from rio de janeiro, brazil, regarding any invitations received by the south africa government to participate in coega.

cvrd is the one of the world's largest diversified mining groups and is the world's number one iron ore miner and exporter.

outside iron ore, cvrd has interests in aluminium smelting and bauxite mining, logistics and electricity. the group's other mining interests include manganese and ferro-alloys, copper, potash, kaolin and gold.

in southern africa, cvrd in june 2003 signed an agreement with south africa's industrial development corporation and steel group iscor (isc) to undertake a pre-feasibility study for the extraction of coal deposits in moatize in mozambique.

at this stage, coega doesn't offer bhp billiton (bil) any new opportunities, spokesperson for bhp billiton in south africa michael campbell told i-net bridge.

in southern africa, bhp billiton has interests in aluminium smelting, manganese as well as chrome mining, coal mining and the production of manganese and chrome alloys.

bhp billiton already owns the hillside and bayside smelters in south africa and has a 47% stake in the mozal smelter in mozambique.

at this stage bhp billiton is considering possible brown fields expansions at the hillside and mozal smelters, campbell said.

the group has no green field aluminium project on the drawing board and has previously said the earliest it may consider starting such a project would be 2008.

bhp billiton has recently entered into the western complex coal joint venture with anglo in mpumalanga.

coal from this project is likely to move along the existing rail line that links the mpumalanga coalfields and the richards bay coal terminal, campbell said.

bhp billiton's established route for exporting its chrome products is through the port of richards bay while manganese products are exported via the port of port elizabeth.

finally, bhp billiton is involved in a joint venture with rio tinto at the richards bay minerals, which mines heavy minerals.

the last time bhp billiton considered coega was in the late 1990s, when the then billiton, prior to merging with bhp in june 2001, considered a zinc refinery in conjunction with japan's mitsui at coega.

however, the asian crisis in 1998 put paid to the idea, with the zinc market having failed to recover, and neither billiton nor its successor bhp billiton has shown any further interest in coega since.

"anglo american declines to comment," anglo spokesperson anne dunn told i-net bridge regarding questions about whether any of anglo's divisions had considered making an investment at coega either currently or in the past.

anglo may use the port of coega in the future as kumba resources (kmb), in which anglo has a 66.7%, has looked into the possibility of exporting part of its iron ore via coega.

at present, kumba is exporting all of its iron ore via the port of saldahna.

in south africa, anglo has interests in gold, platinum, pulp and paper, diamonds, base metals, industrial metals and ferrous metals like iron ore.