Rio Considers Borneo Aluminium Smelter

Rio considers Borneo aluminium smelter

Jesse Riseborough, MiningNews.net

Tuesday, April 26, 2005

RIO Tinto is reportedly considering a partnership with Malaysian construction and financial services group, Cahya Mata Sarawak, to construct a $US2 billion aluminium smelter on the island of Borneo.

Melbourne newspaper The Age quoted Malaysian newspaper The Edge as reporting Rio was looking into tax incentives that would justify the capital investment.

The smelter would use most of the power from the nearby Bakun hydroelectric dam project, recently approved and currently under construction in the Borneo jungle. The construction of the hydroelectric project sparked the interest of Rio.

BHP Billiton was reported as previously being interested in the project, while several other companies have also expressed interest in the project including Chinese power producer Shandong Lueng and Smelter Asia.

The project has proven to be controversial with the potential impact on the region's Penan people highlighted in media reports.