Gulf International Investment Group Capital (GIIG), owned by Malaysian tycoon Syed Mokhtar Albukhary and Dubai-based Mohamed Ali Alabbar, will develop a RM7.6 billion aluminium smelter in Sarawak, the company said today.

The smelter will consume up to 50 percent of the power output from the RM9 billion Bakun hydroelectric dam project in the east Malaysian state on Borneo island, GIIG said in a statement.

According to an earlier report quoting Sarawak's Deputy Chief Minister George Chan, GIIG acquired a 60 percent stake in the Bakun project for RM945.42 million from Malaysia's Minister of Finance Inc, which controls the remaining 40 percent.

Guarantee purchase of Bakun power

The plant, known as Smelter Asia, will be completed in 2007 and will have a maximum production capacity of 500,000 metric tons of aluminium a year, GIIG said.

"When fully operational, the smelter will guarantee the purchase of up to 1,000 megawatts at 95.00 percent load factor. This creates a guaranteed level of demand for more than than 50 percent of Bakun's energy (output)."

Apart from providing a revenue stream for the Bakun project, lower tariffs for electricity sales to Sarawak Electricity Supply Corp are likely, GIIG said.

The smelter project will also become an anchor for the Similanjau heavy industry estate and allow Asean-based downstream aluminium industries to comply with the Asean Free Trade (Afta) rules by letting them source their raw materials locally, it added. - AFP