- Press Metal’s new
aluminium smelting plant would be the first user to use electricity from the
Bakun Dam, said The Star. The facility
at the Samalaju Industrial Park would start taking in power from Sarawak Energy
Bhd (SEB) from this month onwards. SEB CEO Torstein Dale Sjotveit was quoted in
the report as saying that the 275kV transmission line linking SEB’s Samalaju
power station and Press Metal’s new plant has been energised last Thursday.
Under the deal, Sjotveit added that Press Metal is to purchase some 480MW of power to kick-off
commercial operations at its new smelter by June this year (our assumptions:
end-3Q12)
- The 480MW of power is to run Press Metal’s new Samalaju
smelter, which has a capacity of 240,000MW. Its existing 120,000-tonne Mukah
smelter – which is taking in some 200MW of power – is already running at full capacity.
- Apart from Press Metal, progress for the other three
pioneer investors at Samalaju is also fast taking shape and would commence
operations in stages within the next two years. Tokuyama’s polycrystalline
silicon plant (Phase II) is scheduled to be operational by 2Q2014 following the
commencement of Phase 1 in September next year.
- Asia Mineral Ltd, which has signed a long-term power
supply of 270MW with SEB, is scheduled to commence its manganese and ferro
alloy smelting plant sometime in June/July 2013. OM Material’s Sarawak RM1.5bil
plant (80:20 JV between OM Holdings and the CMS group), which would produce
similar products as AML, would start power consumption and production testing
from 2H2013.
- As such, we gather that SEB is set to construct three new
transmission lines to connect power to these three new facilities at Samalaju,
in addition to Press Metal’s. One line would be for 132kV, while the other two
remaining lines are for 275kV. To be sure, we gather that tenders for the 275kV
Samalaju-Tokuyama transmission line (Phase 2) has closed on April 18. By our
reckoning, a 132kV transmission line for last-mile hook-ups costs around RM3mil
and RM5mil, while a 275kV ranges from RM13mil and RM20mil.
- We believe Sarawak Cable would be favourably positioned to
bid for these new transmission line projects, as it is currently constructing
both the 132kV SamalajuTokuyama (RM6mil) and 265kV Samalaju-Press Metal (RM8mil)
lines – and also supplied the power cables for the 275kV Bakun-Samalaju
transmission lines.
- Taken together, these latest developments should solidify
Sarawak Cable’s chances to secure works for Sarawak’s RM3bil 500kV backbone
transmission line system (transmission portion: RM2bil), whereby it is one of
five parties (and the only local outfit) which has been pre-qualified for this
massive job.
- From an end-user standpoint, Press Metal’s long-term power
supply agreement with SEB (25 years) should help strengthen its grip as the
leading integrated aluminium player within ASEAN – where capacity should triple
to 360,000 tonnes when the Samalaju facility is fully commissioned by
end-1H13.
Source: AmeSecurities
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