CITIC set to win Salco mega deal

21 October 2005
The local South Aluminium Corporation (Salco)is close to awarding a $935 million contract to China International Trust & Investment Corporation (CITIC)to build an aluminium smelter with capacity of 275,000 tonnes a year (t/y) at Bandar Abbas. A Salco negotiating team flew to China in mid-October to wrap up negotiations on the deal (MEED 9:9:05).

Salco is planning to invest $200 million in the 36-month project and has secured a large, low-interest loan from the Oil Stabilisation Fund and will seek additional funding through export credit facilities. The CITIC contract includes a harbour and port facilities. The Netherlands' Tebodincarried out a feasibility study for the project. Two further phases of about 310,000 t/y each are also planned by Salco.

CITIC's original bid fell short of several others made for the project by Chinese and European companies earlier this year after difficulties emerged over the proposed technology, which had not been approved by Salco. However, Salco has now approved the CITIC technology and is negotiating the local content portion of the project, which has to exceed 50 per cent of the contract value.

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