Aluvic Seeks Partner For $310m Mill
The Age
Friday May 27, 1994
The State Government-owned Aluvic and the US group Golden Aluminum are on the hunt for a partner to join them in their $310 million aluminium can-sheet plant planned for Bendigo.
The project was announced in August 1991 by the Labor Government Premier, Mrs Kirner. More than 500 construction and 260 long-term jobs were promised in the development, with first production expected this year.
But delays in confirming the new technology to be used in the plant have pushed the earliest possible start date to 1997. The project joint venture is owned 20 per cent by Aluvic and 80 per cent by Golden.
The partners have spent about $14 million on preliminary engineering and design work, but further work depends on Golden confirming the technology at one of its US plants.
The mini-mill technology recently ``qualified" as a source of container sheet for a big US can-maker not associated with Golden, an important breakthrough but still not enough to clear the way for a commitment at Bendigo.
If all goes well, the technology will be proved at the commercial level by the end of this year. That would allow Aluvic and Golden to re-activate the Bendigo project.
Potential customers of the Bendigo mill would be the preferred new partner or partners, with those from the Asian region considered the most likely to be interested.
The Bendigo plant has a planned annual production rate of 105,000 tonnes - 45,000 tonnes more than the domestic market now supplied by Alcoa and Comalco - so Bendigo would rely heavily on the export market.
A go-ahead for the Bendigo project would enable Aluvic to offer a growth component to its planned privatisation. But, like the Bendigo mill, the road to privatisation is not clear.
Aluvic - a 25 per cent partner in the Portland aluminium smelter - is now ripe for privatisiation. A restructuring completed in March gave it a relatively clean balance sheet and underpins strong earnings ($35 million to $40 million expected for the June year) despite low aluminium prices.
A float of the company could be expected to raise upwards of $400 million.
But the privatisation plans are on hold while the Government seeks a renegotiation of the flexible electricity tariff contracts that cover power supplies to the Portland smelter.
Negotiations between the Government and the Portland partners are proving to be protracted and come on top of the Government's far-from- completed restructuring of the State Electricity Commission.
© 1994 The Age
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