KUCHING: Press Metal Aluminium Holdings Bhd has secured an additional 500MW of electricity from Sarawak Energy Bhd (SEB) to power its proposed third aluminium smelter in Samalaju Industrial Park, Bintulu. Press Metal, which is the largest aluminium producer in South East Asia, entered into a power purchase agreement (PPA) with SEB’s wholly-owned subsidiary, Syarikat Sesco Bhd, recently.
The PPA provides Press Metal with long-term access of up to approximately 500MW for a 15year period, with 300MW to commence first drawdown by October 2020 and the balance 200MW to be made available on a reasonable endeavour basis by Sesco, said Press Metal in a press statement.
“The PPA contains major commercial terms that both parties have negotiated and agreed, and are commercially confidential in nature,” the company said in a separate filing with Bursa Malaysia. With the additional power supply, Press Metal plans to construct a proposed third aluminium smelter which will potentially increase its total smelting capacity up to 1.08 million tonnes per annum upon full power drawdown, from the current 760,000 tonnes per annum.
This will further enhance Press Metal’s position as the region’s largest integrated aluminium producer and a key global player in this industry. Press Metal has a smelting plant in Mukah besides Samalaju Industrial Park. The smelting plants have an extrusion capacity of 210,000 tonnes per annum.
Commenting on the power allocation and proposed expansion, group chief executive officer Tan Sri Paul Koon said Press Metal was grateful for the opportunity to increase its participation in the Sarawak Corridor for Renewable Energy (SCORE). “With this, we will commence construction of the third smelter on our existing landbank at Samalaju Industrial Park which will share common facilities with two of our other existing phases.
“ W e anticipate to contribute to the state economically and socially by creating more local employment opportunities. “We have a proven track record of commissioning our smelters on schedule and we are confident of repeating this for our new smelter. The total investment cost of the project will be roughly similar to our previous phases and we may tap into the debt market to fund our expansion,” he added. Koon said aluminium, being the emerging metal of choice with its green characteristics, has the potential to further replace traditional materials.
“The long-term prospects are promising as we foresee wider applications across multiple industries. As such, we expect the expansion (project) to contribute positively to our future earnings,” added Koon.
The announcement of the additional power supply and proposed third aluminium smelter gave a big boost to Press Metal share price, which gapped up 10 sen to RM4.65 at opening bell and rose to RM4.89 within an hour with expanded volume from Wednesday’s close of RM4.55.
