Chinese in line for Salco smelter

16 September 2005
Two Chinese companies are negotiating for the engineering, procurement and construction (EPC) contract to build a new aluminium refinery at Bandar Abbas. The two submitted far cheaper bids than their three competitors, and the client, South Aluminium Corporation (Salco), says one of the pair will take the job despite early concern over equipment specifications (MEED 29:7:05).

When prices were opened in June, China International Trust & Investment Corporation (CITIC)was the low bidder at $935 million, but for a smelter with capacity of 275,000 tonnes a year (t/y). China National Non-Ferrous Metals Industry Corporation (NFI)and France's Pechineybid $1,080 million for a plant of 310,000 t/y, which Salco had originally specified. The next closest bidder, a consortium of Canada's SNC Lavalin, Europe's ABBand Finland's Outokumpu, submitted a price of $1,600 million. Salco has spent the last two months ensuring that the Chinese equipment met its technical specifications.

Salco, owned by Ghadir Investment Company, Iranian Mines & Mineral Industries Development & Renovation Organisation (IMIDRO) and the Oil Ministry, was formed in 2003. It will invest $200 million in the 36-month project, has secured a large low-interest loan from the Oil Stabilisation Fund and will seek export credit guarantees. Tebodinof the Netherlands carried out the feasibility studies.

The smelter is to be expanded at a later date in two further phases of about 310,000 t/y and will also include a harbour and port facilities. The greenfield project will be situated in the Mines & Minerals Special Economic Zone at Bandar Abbas in Hormozgan province. It will use 580 MW of electricity from the private power plant under construction at the Almahdi smelter on an adjacent site. Salco has agreed long-term contracts for feedstock.

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