Press Metal signs PPA to secure more power for Sarawak project

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KUALA LUMPUR (July 31): Press Metal Aluminium Holdings Bhd has entered into a power purchase agreement (PPA) with Syarikat SESCO Bhd — a unit of Sarawak Energy Bhd — to secure more power for capacity expansion in Sarawak.

The PPA, signed today, provides long-term access of up to approximately 500MW of electricity for 15 years.

Under the agreement, a first drawdown of 300MW will commence first by October 2020 and the balance 200MW will be made available on a reasonable endeavour basis by SESCO, it said in a statement today.

The additional power allocation will enable Press Metal to build a third aluminium smelter in Samalaju Industrial Park, Sarawak, which will potentially increase its total smelting capacity up to 1.08 million tonnes per annum upon full power drawdown, from the current 760,000 tonnes per annum.

Group chief executive officer and co-founder Tan Sri Paul Koon said the third smelter on the group's existing landbank at Samalaju Industrial Park will share common facilities with two of its other existing phases, and is expected to contribute more local employment opportunities there.

"We have a proven track record of commissioning our smelters on schedule and we are confident of repeating this for our new smelter. The total investment cost of the project will be roughly similar to our previous phases and we may tap into the debt market to fund our expansion.

"Aluminium being the emerging metal of choice with its green characteristics has the potential to further replace traditional materials. The long-term prospects are promising as we foresee wider applications across multiple industries. As such, we expect the expansion to contribute positively to our future earnings," he added.

At Bursa Malaysia, Press Metal ended 10 sen or 2.15% lower at RM4.55, with 1.55 million shares done, bringing a market capitalisation of RM18.36 billion.