Bruno Manser Fund (BMF), the Switzerland-based NGO championing the rights of Sarawak's indigenous people, has declared victory for resources giant Rio Tinto's decision to scrap plans to set up a US$2 billion (RM6.13 billion) aluminium smelting plant in Sarawak.

"BMF welcomes Rio Tinto's decision to abandon its Sarawak smelter plans as a major victory for the international campaign to preserve the natural environment and the livelihood of Sarawak's indigenous peoples," the organisation said in a statement yesterday.

NONE It described Rio Tinto's announcement was a major blow for the Sarawak government under Chief Minister Abdul Taib Mahmud, who has consistently used the aluminium smelting plant to promote the recently completed Bakun dam, Asia's largest dam outside China, which will generate 2,400 megawatts of hydroelectric power.

"As a result, the Bakun dam will cause a massive power glut in Sarawak. The costs will have to be born by Sarawak consumers, taxpayers and Malaysia's pension fund Employees Provident Fund (EPF), which funded the mega-project with massive loans. Plans to export Bakun's excess power to West Malaysia had to be scrapped for economic reasons."

Australian company Rio Tinto's decision, BMF pointed out, also proved that the Taib government's irresponsible economic policies have completely failed.

"There is no need to build another 12 dams in the state as envisaged by the Taib government. All these corruption-driven dam plans that will only benefit the Taib family's construction companies must come to a halt now.

"This is the kind of development that you have to expect from a kleptocratic potentate who believes in witchcraft instead of sound economic analysis and blatantly abuses his public office in order to rob his people," BMF said.

BMF: Halt other dam projects too

The NGO reiterated its call to the Sarawak government to halt immediately the ongoing construction works for the Murum dam ( below, right ) and to shelve all further plans for dams in Sarawak.

"We are also calling on the Malaysian federal government to explain how the Bakun dam should ever become profitable and how the EPF loans to Bakun will be secured," it added.

NONE According to foreign news agency AFP, Cahya Mata Sarawak (CMS), which owns 40 percent of the Sarawak Aluminium Company (Salco) smelter development project in Sarawak, announced the termination of plans for the plant late on Tuesday in a filing with the Malaysian stock exchange.

Rio Tinto and Cahya Mata "agreed that they would cease to pursue plans to jointly develop an aluminium smelter at Samalaju in Sarawak but remain open to other future possible collaborations," CMS group managing director Richard Curtis said in a statement.

Curtis said they were "unable to finalise commercial power supply terms with SEB (power supplier Sarawak Energy Bhd) which would meet the parties' current respective financial considerations and economic imperatives".

The smelter was expected to have an initial production capacity of 550,000 tonnes of aluminium a year, with the potential to expand to 1.5 million tonnes.

The Bakun dam has been described by critics as "a graft-plagued human and ecological disaster", but which the Sarawak government said was needed to meet the demand for electricity, despite the state having a power surplus.

Last December, environmental groups and activists from Malaysia, Europe and Australia called for Taib's arrest for various crimes he is accused of, including illegal appropriation of public funds and land, abuse of office, fraud, money-laundering "and conspiracy to form a criminal organisation".

Taib: Score unaffected by smelter cancellation