Salco evaluates smelter prices

05 August 2005
A partnership of China National Non-Ferrous Metals Industry Corporation (NFI)and France's Pechineyhas submitted the lowest compliant bid for the South Aluminium Corporation (Salco) smelter project planned at Bandar Abbas. The client is expected to select three bidders for further negotiation on the engineering, procurement and construction (EPC) contract (MEED 24:6:05).

Salco says it will select the winner based on technical merit as well as price. China International Trust & Investment Corporation (CITIC) priced the contract at $1,000 million, but had some deviations from the client specifications in relation to procurement. NFI and Pechiney submitted a bid of $1,080 million; it was followed by a team of Canada's SNC Lavalin, Europe's ABBand Finland's Outokumpuat $1,600 million, while Italy's Fata Hunterand Germany's Fritz Wernereach quoted prices at about $1,800 million. Salco is aiming to complete clarifications in August.

The project is to be financed through the Oil Stabilisation Fund and export credits while Salco will put in $200 million of equity. The smelter will have capacity of 310,000 tonnes a year (t/y) in the first phase, which is to be expanded later by two further phases of similar size. The greenfield project will be situated in the Mines & Minerals Special Economic Zone at Bandar Abbas in Hormozgan province and will use electricity from the proposed private power plant under construction at the Almahdi smelter at an adjacent site. Salco will need 580 MW for phase 1, which is to be completed in 36 months.

Feedstock will come from international suppliers with whom Salco has long-term contracts. However, it could eventually be sourced from a proposed new alumina project at an adjacent site in Bandar Abbas.

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