Press Release: National Day of Action Against Alcan

Press Release: National Day of Action Against Alcan
Earthlife Africa Jhb
7th of May 2007

On Wednesday the 9th of May 2007, social and environmental justice activists will demonstrate in Port Elizabeth, Johannesburg and Richards Bay against Alcan and its secret deal with Eskom. In Johannesburg, Earthlife Africa Jhb (ELA Jhb) will coordinate a protest outside Alcan’s head office. NiMBLE and other local groups will de demonstrating outside the Coega Development Corporation (CDC) in Port Elizabeth. In Richards Bay, Groundwork will be at Alcan’s local office. See below for addresses and times.

Culminating in 2006, Alcan was engaged in a lengthy negotiation with Eskom regarding the building of an aluminium smelter at Coega (in the Nelson Mandela Metropolitan area, outside of Port Elizabeth). The subject of this negotiation was the long-term purchasing of electricity from Eskom. Aluminium smelters are such intense energy users that plant location is determined by the price at which electricity is made available, rather than location of raw materials.

At the end of 2006, Alcan signed a series of deals with Eskom, the CDC, and Department of Trade and Industry. To date, none of these parties have answered detailed questions about their deals. In particular, the lack of disclosure regarding the price and possible resale of electricity is highly problematic, given Alcan’s history of buying subsidised electricity from governments and selling it back to the same governments at a profit.

The Coega aluminium smelter will require around at least 1300MW of generation capacity and employ at most a thousand people (enough to power a city; currently, Eskom cannot ensure provisioned of a similar amount of power to the people of Cape Town). The power for the smelter will be heavily subsided (with tax-payer money) through the externalised costs of electricity generation, borne by society as a whole. This subsidy will be in addition to the R1.93 billion in tax-incentives already showered upon Coega. A reasonable estimate of the price of electricity granted to Alcan is around 15% of the price charged to Soweto residents (or about 5 cents per kilowatt hour). This would be substantively lower than the industry and residential average rates (16c and 29c per kwh respectively). This deal covers the next 25 years.

In response to civil society requests (Promotion of Access to Information Act applications) for information on the deal between it and Eskom, Alcan exploited loopholes in South African law, claiming that it would violate its trade, financial, and/or commercial interests. ELA Jhb first requested the Department of Public Enterprises to hold public consultation on the parameters of the deal early in 2005. The department and the Coega Development Corporation have refused to disclose information about their agreements. This ominous wall of silence on a long-term commitment with far-reaching impacts, from a supposedly transparent and accountable government, is reminiscent of Apartheid deals with foreign corporations.

Tristen Taylor, the Energy Policy Officer at Earthlife Africa Jhb, states, “The sale of electricity to Alcan is the sale of publicly produced assets. Given Eskom’s current inability to deliver enough electricity to business and citizens and the fact that 30% of the population is still without access to electricity, a 25-year firesale to Alcan hardly seems appropriate. If we were getting a good deal out of Alcan, why would they refuse to disclose it?”

Earthlife Africa Johannesburg demands that:

1) Alcan discloses details of its contract with the state-owned electricity company, Eskom, including prices, linkages to commodity prices, reselling of electricity provisions, and guarantees of supply.
2) Eskom and Alcan support transparent and accountable governance of state-owned enterprises and incentives to global capital.
3) Government implements its 1998 policy commitment to incorporate externalised costs in electricity prices (along with a commitment to provide free and adequate basic energy services to the poor).
4) All government departments disclose their agreements with Alcan and the CDC and urgently conduct and publish a comprehensive review of incentives, concessions and any other forms of subsidy to energy-intensive industries.

The list of questions put to Alcan, Eskom and government departments is available on request, as are background-briefing papers on the subject.

Details of protests on the 9th of May 2007:

Johannesburg: 2:30pm to 4:30pm
Place: Alcan National Office
Fredman Towers
13 Fredman Drive
Sandton

Port Elizabeth: 11:30am to 1:30pm
Place: Coega Development Corporation
Libra Chambers
Cnr Oakworth Road & Carnarvon Place
Humerail

Richards Bay: time to be determined
Place: Alcan’s Regional Office
4 Chloorking
Alton - Richards Bay