Malaysia's Sarawak sees room for 2 aluminium smelters

KUCHING, Malaysia, Aug 7 (Reuters) Malaysia's Sarawak state on Borneo island has room for two aluminium smelters, with the second plant likely to go ahead around 2013 as more power supply becomes available, Sarawak's chief minister said today.

Global miner Rio Tinto Ltd/Plc today agreed to a feasibility study of setting up the first aluminium smelter in Sarawak, to be powered by the huge 2,400-megawatt Bakun hydroelectric dam.

Sarawak Chief Minister Abdul Taib Mahmud said another proposal from a Malaysian-Chinese consortium to build an aluminium smelter in the state remained on the table.

''After we have some experience with Rio Tinto, we will be dealing with them,'' he told Reuters, refering to the proposal by Malaysian tycoon Syed Mokhtar Al-Bukhary and a Chinese partner.

Taib said additional power supply could come onstream by 2013.

Rio Tinto Aluminium Chief Executive Oscar Groeneveld said his firm was made to understand that the Malaysian government has nominated local conglomerate Sime Darby as the owner of the Bakun power generation.

''We now have to enter into those discussions with the state and federal governments,'' he told reporters when asked when power supply talks would begin.

REUTERS RN BST1144