AmResearch Sdn Bhd (AmResearch) revealed in a research report that the Smelter Asia plant would be the second smelter being mooted within Samalaju Industrial Park under the Sarawak Corridor of Renewable Energy (SCORE) after Press Metal Bhd (Press Metal).

Smelter Asia is a joint venture between Gulf International Investment Group Sdn Bhd (GIIG) and Aluminium Corporation of China Ltd (Chalco).

“At 370kt, it would roughly have the same capacity as Press Metal’s once the latter completes its own Phase 2 plans that would boost capacity to around 360kt,” added the research firm.

Smelter Asia executed principal terms of the power purchase agreement with Sarawak Energy Bhd (SEB) for the supply of over 600MW of power to the proposed aluminium smelting plant.

The latest development follows earlier reports in the middle of this month that Press Metal and three other foreign companies have signed separate PPA term sheets with SEB for the supply of power to their respective plants.

To recap, Press Metal continued to be the only energy-intensive play currently operational within SCORE where the group has strong bargaining leverage to secure uninterrupted and long-term supply of power from SEB.

Press Metal had also recently proposed capital raising exercises that would help raise RM324 million to partially finance the construction of its new smelting capacity in Samalaju which is due to be completed by end-2012.

The imminent commissioning of Phase 2 would triple Press Metal’s capacity to 360kt.

“Just on 240kt alone, our initial estimates indicate a massive 40% lift to financial year 2013 (FY13) forecasted earnings per share, and FY13 forecasted price earnings multiple improving from eight times to five times,” the firm concluded.

Source Borneo Post