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March 28, 2012

BREAKING NEWS!! Victory for Stop Corruption Dams campaign as Rio Tinto scraps Sarawak smelter plans

Taken from Sun Daily

Rio Tinto, CMS scrap US$2b smelter project in Malaysia

Posted on 27 March 2012 – 08:29pm
Last updated on 27 March 2012 – 08:38pm

KUALA LUMPUR (March 27, 2012): Rio Tinto, the world’s third largest miner, and Cahya Mata Sarawak Bhd (CMS) have scrapped plans for a US$2 billion aluminium smelter project in Malaysia’s Borneo island state of Sarawak as power supply terms could not be finalised, CMS said in on Tuesday.

CMS, a financial and construction conglomerate based in Sarawak, said both companies had worked to set up an aluminium smelter for years but could not agree on the commercial power supply terms with Sarawak Energy Bhd.

“As a result, Rio Tinto Aluminium (Malaysia) and CMS have agreed that they would cease to pursue plans to jointly develop an aluminium smelter at Samalaju in Sarawak but remain open to other future possible collaborations,” CMS group managing director Richard Curtis said in a statement.

The aluminium smelter was supposed to have an annual capacity of 1.5 million tonnes to meet surging demand from China and other developing economies.

But the project, which was first announced in 2007, had not gone beyond the planning stage due to delays in constructing Bakun dam — one of the world’s largest hydroelectric dams — that would provide cheap power to energy-guzzling smelter.

Malaysia’s government last year set a lower rate on the power generated from the Bakun dam in Sarawak, selling it to
Sarawak Energy at 6.25 sen per kilowatt hour (KwH) with an expected increase of 1.5% every year.

The new rate is within Sarawak’s offer to buy electricity at 5 sen and 7 sen per KwH in order to secure investments from smelters for whom energy accounts for a third of costs. – Reuters

From Sarawak Report

Backing Out Of Bakun – Rio Tinto Pulls Out!

Posted Tuesday, March 27th, 2012

Only two out of the eight turbines are working, there is no use for the electricity – and yet Taib and Hydro Tasmania are working flat out to build a string more of these destructive dams across all the rivers of Sarawak

The question marks over Taib’s pet mega-project, the billion dollar Bakun Dam, have just multiplied into a full-blown crisis for the so-called ‘CEO of Sarawak’.

The global mining company, Rio Tinto Alcan, has just announced that it is pulling out of the much-touted aluminium smelter venture, SALCO.

This was the flagship project, that was supposed to form the backbone of Taib’s plans to employ the huge surge of hydro-electricity from this enormous structure.

And it leaves the whole fantasy of the Chief Minister’s SCORE (Sarawak Corridor of Energy) concept and his plans to build yet 12 more huge dams hanging in tatters.

Bakun is fast turning into the monstrous white elephant that many had long feared it would.

So much suffering for no use

Floating homes – the Ukip people have returned to their flooded homelands rather than suffer displacement in refugee settlements

Over past weeks and months Sarawak Report has detailed some of the suffering and harm caused by the dam to ordinary people of Sarawak and Malaysia.

Quite apart from the environmental devastation caused by the logging and flooding of a pristine jungle area the size of Singapore and the disruption to the life of Sarawak’s greatest river, the project has brought nothing but misery to the local people.

Ten thousand were forced from their homes, in return for promises of compensation and jobs, which turned into dust once the land had been cleared.

Life is so bleak in the re-settlement zones that many of the native people have chosen to return to their old lands, clinging to the banks of the rising dam waters in their now floating homes.

While people suffered, local MP Billy Abit Joo profited !

And as we have exposed, many of the jobs and contracts presented as opportunities for local communities, were in fact corruptly taken over by hangers on and BN political cronies of the area, like the Federal MP Billy Abit Joo, who has became the main shareholder and beneficiary of the so-called ‘people’s cooperative’ Wargana Consortium.

Sarawak Report and other NGOs have been vigorously drawing attention to these outrages and such information will not have gone un-noticed by a company such as Rio Tinto Alcan, which is sensitive to the views of its western shareholders when it comes to human rights and environmental issues.

Why did Rio Tinto Alcan really pull out of SALCO?

The reason given for Rio Tinto Alcan’s decision to pull out of the planned US$2billion smelter was politely described as a failure to come to an agreement over the price of the electricity being offered from the Bakun Dam.

This is probably indeed a large part of the reason.  The conglomerate was tempted to pull out of its existing operations such as Canada, the UK and Australia as long as it could be guaranteed dirt free electricity.  However, what benefit was that to the people of Sarawak?

Key players in the SALCO project were Taib, Robert Geneid and CMS’s Richard Curtis

The point of the dam was to make money!

In fact there is an urgent need to make money from Bakun, in order to somehow pay back the billions that have been siphoned out of the Employees Provident Fund and other Malaysian government pension schemes to build it.

If Bakun cannot get a decent price for its electricity, then those pensioners will lose out.

With the prospects looking grimmer by the day the ‘CEO of Sarawak’ and his BN buddies in the Federal Government are surely at last beginning to realise why no private investors were prepared to touch the project!

Failure! – Key players like CMS’s Richard Curtis had put their hopes on winning this key project that would have poured money into Taib’s family company!

So, maybe Rio Tinto Alcan’s demands for virtually free electricitywere too much even for Taib and his desperate team lead by brother-in-law, Robert Geneid, and CMS CEO, Richard Curtis, who had invested all their hopes in winning this bid?


We exposed how Australian Commissioner Miles Kupa had worked tirelessly to promote the Rio Tinto bid, despite its corrupt nature and the fact that it would undermine jobs in his own country! Did he think twice?

But, we suspect there was an even more compelling reason for Rio Tinto Alcan to come to the swift conclusion that they shouldn’t be touching Sarawak and its dodgy Chief Minister and his clique of BN cronies and family hangers-on with a barge pole.

That reason was the over-whelming stench of corruption that no amount of sweet talk and cover-up could conceal!

Sarawak Report comprehensively exposed the full scandal behind Taib’s plans to personally make billions out of the SALCO venture just last month.

Australian High Commissioner, Miles Kupa, may have been dragged in to support the bid and Rio Tinto Alcan executives may have flown into Kuching just a fortnight earlier to continue negotiations. However, once the cat was out of the bag that Sarawak’s own Chief Minister was standing to make hundreds of millions, if not billions, out of the carefully crafted deal, how could such supposedly respectable entities continue to be involved?

What use now for all Bakun’s electricity? Maybe free electricity for the people of Sarawak!?

Sarawak Report received no response or comment from Rio Tinto Alcan or the Australian High Commissioner from its exposes into their involvement in the corrupted SALCO project, but sometimes actions speak louder than words.

This was not a project that RTA were going to find easy to explain to their shareholders.

Questions still remain about how it was that RTA were still actively negotiating on this clearly corrupted project as late as January this year?

This was long, long after company executives had realised that this was not a joint venture with the State of Sarawak, but with the family firm of the Chief Minister of Sarawak CMS!

More dams!

Sarawak’s shame – refugees of Bakun. Taib might not care, but could Rio Tinto Alcan put up with this stain on their image as they profited from the dam?

And yet Taib Mahmud and his BN cronies are still forging ahead with all their plans to build a whole new swathe of dams once they have got the next election out of the way!

Another half million people flooded from their lands (once the wood has been conveniently extracted and the profits divided amongst them).  Why, when there is no use for the electricity?  Why, when neither the Bakun Dam nor even the far older Batang Ai dam are turning even half their turbines most of the time?

The reason is of course, as always, the prospect of profit for Taib Mahmud, who plans to borrow billions for these projects and for SCORE.  Billions of dollars that can be poured into his companies as he gets them involved in all the contracts for building the dams and involving foreign companies in cheap electricity projects (like the doomed SALCO venture).

It is the people of Sarawak who will have to find the money to pay all this borrowing back and they are unlikely to have any profit from these useless dams to help them.

So much for BN’s CEO of Sarawak!

1 Comment »

  1. I went to Murun quite often and i know what is going on there. The Murum Dam is progressing well and if there is a campaign to halt it I strongly support it. From the feedback I gather from the natives mostly the kenyah badang and penan they oppose the construction of the Dam but the government keep on doing it. Last week I went to Long Bek, Long Jegitan, Long Burau, Long Mekaba and Long Tekaan in Baram the natives such as the Kenyah and penan also oppose the construction of dams in their areas. Taib’s administration should stop the construction of dams in Sarawak for personal gain especially to Taib’s family and cronies. I am very happy to learn that the Aluminum smelting plant in Semalajau was not materialize due to a company overseas disagrees with how Taib manages the state and also due to corruption. So Taib, no more submerge our forests and homes. To people and countries overseas who help us to halt the building of more dams in sarawak we thank you very much especially the Bruno Manser Fund. May god bless all of you always.

    Comment by okano — March 28, 2012 @ 10:39 am | Reply

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