News: Scrapped smelter plant: ‘A blow for Taib’

KUCHING: Swiss-based NGO, Bruno Manser Fund (BMF), today said the decision by global mining giant Rio Tinto PLC to scrap its plan to build a US$2 billion (RM6.1 billion) aluminium smelting plant in Sarawak was a “major victory” for the international campaign to preserve the natural environment.

The plant was to be sited at Similajau near Bintulu.

Rio Tinto decided to scrap the controversial smelter plans as negotiations with Chief Minister Abdul Taib Mahmud’s family-controlled Cahaya Mata Sarawak and the Taib-controlled Sarawak Energy Bhd failed to bear results.

In a statement e-mailed to FMT, BMF said: “Rio Tinto’s announcement is a major blow for the Sarawak state government under Chief Minister Abdul Taib Mahmud who consistently used the aluminium smelter to promote the recently completed Bakun Dam, Asia’s largest dam outside China.

“As a result, the Bakun Dam will cause a massive power glut in Sarawak whose costs will have to be borne by Sarawak consumers, taxpayers and Malaysia’s pension fund EPF which funded the mega-project with massive loans.

“Plans to export Bakun’s excess power to West Malaysia had to be scrapped for economic reasons,” BMF said.

It described Rio Tinto’s decision to abandon its Sarawak smelter plans as major victory for the international campaign to preserve the natural environment and the livelihoods of Sarawak’s indigenous peoples.

“Rio Tinto’s decision proves that the Taib government’s irresponsible economic policies have completely failed. There is no need to build another 12 dams in the state as envisaged by the Taib government.

Halt other dam projects

“All these corruption-driven dam plans that would only benefit the Taib family’s construction companies must come to a halt now.

“This is the kind of development that you have to expect from a kleptocratic potentate who believes in witchcraft instead of sound economic analysis and blatantly abuses his public office in order to rob his people,” it said.

The BMF urged the Sarawak government to immediately halt the ongoing construction works for the Murum dam and to shelve all further dam plans in the state.

“We are also calling on the Malaysian federal government to explain how the Bakun Dam should ever become profitable and how the EPF (Employees Provident Fund) loans to Bakun will be secured,” the BMF said.

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 the Bakun Dam that would provide cheap power to energy-guzzling smelter.

Source: http://www.freemalaysiatoday.com/category/nation/2012/03/28/scrapped-smelter-plant-a-blow-for-taib/

News: The Dam that Wouldn't Die

Sarawak’s politically motivated Bakun Dam has a new Australian friend to help keep it going

 

The resuscitation of the controversial Bakun Dam as the result of an agreement to build a nearby aluminum smelter is the latest chapter in a long running saga to push forward the environmentally sensitive project closely linked to the longstanding Sarawak chief minister, Abdul Taib Mahmud, and his family.


The mammoth dam, one of the cherished mega-projects of former Prime Minister Mahathir Mohammad, has already wiped out 23,000 hectares of virgin rainforest, delivered the timber into the hands of timber barons and displaced 9,000 indigenous people. It is also a textbook example of how the New Economic Policy, Malaysia’s affirmative action program to improve the economic wellbeing of its bumiputera, or ethnic Malay majority, instead concentrates riches in a few hands.


On August 7, Australia-based Rio Tinto Aluminum signed a deal with Malaysian conglomerate Cahya Mata Sarawak, whose principal stakeholders are members of the Taib Mahmud family, for a joint study to build a US$2 billion smelter in Similajau, near Bintulu, 80 km inland from the dam itself. Expected to open in 2010, it will be one of the largest in the world, with initial production capacity is projected at 550,000 tonnes a year with the capability to expand to 1.5 million tonnes later.


Rio Tinto, with its projected takeover of Alcan, Inc., of Canada, is already expected to become the largest aluminum producer in the world. The smelter, which will use power from the Bakun dam, is expected to be the fifth and biggest aluminum plant for Rio Tinto, its external affairs manager Jim Singer told The Associated Press. Rio Tinto picked Sarawak for the project due to strong government support, a credible local partner, abundant electricity supply from the Bakun dam and robust demand in the region, Singer said.


Critics are livid. In a forum early this month organized by the United Nations Development Program in Kuala Lumpur to mark World Indigenous Day, Colin Nicholas, the coordinator of the Center for Orang Asli (Indigenous People) told local reporters that "From our point of view, by allowing the Rio Tinto project to go ahead, it is just like trying to cover up one natural disaster with another.”


“There was no open tender for the (aluminum smelter project) and no public announcement of it,” fumed opposition leader Anwar Ibrahim in an email to Asia Sentinel. “Combined, the smelter and the dam raise serious concerns about environmental impacts and the treatment of indigenous populations.”


Just as disturbing, to some observers, is the way Cahya Mata Sarawak, which means “light of Sarawak’s eye” in English and goes by the acronym CMS, has maneuvered itself into position to benefit from the dam.


Begun in 1974 under the name Cement Manufacturers Sarawak Bhd, the company originally produced Portland cement as a state-owned firm. Its transformation has been remarkable, according to a doctoral thesis submitted to the University of London in 2002 by Andrew Aeria, currently a lecturer in the Faculty of Social Sciences at the University Malaysia Sarawak in Kuching.


“The rapid growth and transformation of CMS since the 1990s has been nothing short of phenomenal, and is due to two main factors, namely the privatization and restructuring of CMS from a state-owned public-listed company into a private sector public-listed conglomerate owned by the Mahmud family, and the huge amount of state rents CMS secured for itself and its subsidiary companies from 1992 through political patronage,” Aeria wrote.


Aeria’s study tells the story in voluminous detail. Beginning in the early 1990s, Cement Manufacturers Sarawak Bhd, a state-owned company, bought major stakes in three highly profitable subsidiaries of the Sarawak Economic Development Commission – PPES Quarry, Steel Industries Sarawak and PCMS, for 117.4 million Malaysian ringgit, 50 million of that in cash, the rest covered by 13.48 million shares. For that, CMS got, in addition to the assets, 30.94 million ringgit in cumulative retained profits, according to the company’s annual reports. That moneyproved helpful, allowing CMS to acquire two other companies owned by the Mahmuds, namely Syrakusa Sdn Bhd and Concordance Sdn Bhd, via cash and share swaps. This resulted in the "privatization to the Mahmud family via a reverse takeover. Bank Utama, Sarawak Securities and Archipelago Shipping -- all Mahmud family companies -- were subsequently injected into CMS.


The CMS takeover also reflects the politics of New Economic Policy privatization exercises in Malaysia, which tend to favor hiving off profitable public enterprises instead of loss-making ones to well-connected individuals in the private sector, Aeria claims. Apart from cultivating cronyism and promoting rent-seeking, such privatizations deprive the state sector of lucrative sources of income end up raising the tax burden of ordinary taxpayers, he writes.


During the privatization and restructuring of CMS, numerous public-funded infrastructure projects also were channeled to CMS. These helped CMS maintain an extremely healthy cash flow and high annual turnover. They bolstered its restructuring efforts, hiked up the share price of CMS and helped CMS raise funds easily from banks and other money markets.


By 1996, the Mahmud family had consolidated the cement business, Bank Utama, Sarawak Securities, and Archipelago Shipping, turning the firm, now named Cahya Mata Sarawak, from a publicly-owned cement producer into a private-sector diversified conglomerate involved in stock brokering, road construction, water, quarry operations, steel bar manufacturing, trading, cement production and investment holdings.


“Taib Mahmud’s control over the levers of power and resources in Sarawak saw the SEDC (Sarawak Economic Development Commission) privatize profitable state enterprises to his family,” Aeria wrote in his thesis. “Similarly, his position of favor with the federal government meant that his family received various rents, principally a stockbroker license (to Sarawak Securities) that became a lucrative monopoly, and waivers on mandatory general share offers. Taib Mahmud’s powerful political position also meant that the companies linked to his family easily raised loans from the capital market.”


Taib Mahmud’s 26-year tenure as the chief minister of Sarawak also gave the company at least the appearance of having ready access to government power and favors during a time when the family company had a healthy cash flow and high annual turnover that drove up the share price. The company also got involved in numerous infrastructure projects.


“What is notable about these infrastructure projects is that most of them were secured via negotiated tender from the Sarawak government and its agencies without going through a process of competitive tenders,” Aeria writes. “Not only were many public sector projects channeled towards CMS but CMS also actively undertook a process of seeking out profitable public sector jobs like the maintenance of federal and state roads by the Sarawak Public Works Department estimated at between RM300-RM500 annually, and negotiated for their being transferred to CMS on a turnkey basis.”


Born in relatively modest circumstances, Taib Mahmud now is locally famous for wearing double-breasted suits and driving around Kuching, Sarawak’s capital city, in a cream-colored Rolls-Royce. According to Aliran Monthly, the reformist Malaysian magazine, Taib Mahmud’s spouse Laila and his children are the majority shareholders of Sitehost Pty. Ltd., Australia, which owns the Adelaide Hilton Hotel. Company records dated December 2000 show them holding 95 percent of the company or 9.5 million fully paid up shares, the magazine said.


Onn Mahmud, Taib Mahmud’s brother, his daughter Jamilah Hamidah Taib and her husband Sean Murray are listed as director-shareholders of SAKTO Corporation, a major real estate operator of non-residential buildings in Ottawa, owning and managing more than half a million square feet of prime office space with affiliate offices in the US, Asia, the UK and Australia. They also own SAKTO Development Corporation, a multi-million dollar development and construction company in Ottawa. Jamilah is the sole director of SAKTO Investment Corporation. 


“Now, it may well be that the Mahmud family is one of the best and most astute business families in Malaysia,” Aliran wrote. “And more power to them on that account. But much of their known wealth has arisen during the tenure of Abdul Taib Mahmud as Sarawak chief minister. Is there then any wonder why there exists so much public skepticism about the sources of Abdul Taib Mahmud’s family wealth? Would not a transparent audit do well to quash such obviously unscrupulous rumors once and for all?”


The construction of the dam, which had been under development in fits and starts since the 1960s, began to mesh with Cahya Mata’s capabilities in 1994, when construction began, led by a privatized joint-venture consortium called the Bakun Hydroelectric Corporation comprised of Ekran Bhd, the national power company Tenaga Nasional Bhd, the government of Sarawak, Sarawak Electricity Supply Corporation (Sesco) and Malaysian Mining Corporation Bhd (MMC).


The dam project itself is part of a grandiose plan to meet electricity demand in peninsular Malaysia, nearly 700 km away, via a high voltage direct current cable, since the entire island of Borneo, where the dam is situated, is unlikely to be able to use the amount of electricity it is projected to produce.


Thus an additional 300km line was also envisioned to feed power throughout peninsular Malaysia. Because of the distance of transmission, the underwater cables are expected to leak more than half of the wattage before the power reaches peninsular Malaysia. Even without Bakun, Sarawak’s installed electricity reserve capacity was estimated at 25 percent two years ago. At one point, the massive operation was projected to tie up the world’s entire cable-laying capability.


In 1996, Cahya Mata expanded its steel and cement production capacities in response to a massive economic boom in the construction sector. CMS’s new steel and cement plants were financed by large short and long-term loans from both local and international offshore money markets.


The Asian financial crisis, however, brought the Bakun dam project to a halt and forced the government to assume control from the consortium at an estimated cost of 1.6 billion ringgit to Malaysian taxpayers. It was revived in 2000 through a wholly owned-government company, Sarawak Hidro, along with the Malaysia-China Hydro JV consortium. (This also isn‘t Bakun’s first flirtation with an aluminum smelter. One was previously proposed for Similajau, to be funded by the international financier Mohamed Ali Alabbar as a joint venture between Dubai Aluminum Co. Ltd and Gulf International Investment Group. Those plans collapsed due to construction delays and squabbles over contractual terms. By 2004 most of the minor partners to the consortium posted losses or substantially decreased profits.)


The Asian crisis of 1997-1998 also resulted in a spectacular 439 million ringgit pre-tax loss for Cahya Mata for the year ending December 1998 and a reversal of fortunes to the tune of 670.7 million ringgit, primarily because of severe nonperforming loan losses in the company’s banking and financial services arms. By 1999, the company’s total debt burden ballooned to 787.33 million ringgit and resulted in a downgrade of its bonds.


Cahya Mata’s cumulative debts and financial troubles at the turn of the century meant that Bakun took on added importance. A large portion of its debt was secured by pledges of securities as collateral, the share price of which was tied directly to the terms of its debt. CMS’s share price dropped below RM3.00, Aeria wrote.


The revival of Bakun became an overnight confidence boost to Cahya Mata and strengthened the financial status of its majority owners as well as numerous other shareholders. But Bakun was more than just that. From a political standpoint, the dam was a major lifeline thrown at a very crucial time to Taib Mahmud, other client businesses having dealings with the conglomerate, and ordinary shareholders in Sarawak. This lifeline was thrown back in the form of a Sarawak majority party that delivered all 28 of its parliamentary seats to offset the federal Barisan Nasional’s losses of seats in national elections and helped Mahathir to maintain his critical two-thirds majority in parliament.


Taib Mahmud himself has faced numerous corruption allegations by critics over his 26-year career as chief minister, most recently earlier this year when Japanese media reported that he had been implicated in a 1.1 billion yen timber export kickback scheme involving a cartel of nine Japanese timber shipping companies through Hong Kong-based Regent Star, which is linked to Taib Mahmud and his family. He has not been charged and has publicly denied any wrongdoing. He recently said he would sue several Malaysian publications for defamation over articles relating to the case.


When Abdullah Ahmad Badawi came to power in 2003 as Malaysia’s prime minister, he vowed to cut back on the number of mega-projects that Mahathir had lumbered the country with, telling delegates to the 57th United Malays National Organisation’s 57th general assembly that he would turn away from Mahathir’s economic strategies. “That era is over,” he told the delegates. But Abdullah Badawi has been weakened by a series of missteps and scandals, and meanwhile Bakun dam soldiers on.


Source: http://www.asiasentinel.com/index.php?Itemid=178&id=637&option=com_content&task=view

Video: Fight the power

Web: Samalaju Industrial Park and Tanjung Manis Halal Hub set standards for SCORE

Source: http://investvine.com/samalaju-industrial-park-and-tanjung-manis-halal-hub-set-standards-for-score/

Samalaju Industrial Park and Tanjung Manis Halal Hub set standards for SCORE

Posted by Thar on December 19, 2011 in Economy & Monetary, Infrastructure | 0 Comment

The Samalaju Industrial Park and Tanjung Manis Halal Hub are the two central zones in the SCORE initiative. The two regions are leading the way in terms of on-going projects and are expected to fuel further investments in Sarawak’s overall economic development plan.

Of all the activities and developments taking place within the Sarawak Corridor of Renewable Energy (SCORE), two bustling areas have emerged as cornerstones of the entire project.

The Samalaju Industrial Park (SIP) in Bintulu and the Tanjung Manis Halal Hub in the western-most part of the Corridor are expected to enjoy the highest density of investment from foreign and domestic interests.

Since the launch of SCORE in 2008, both zones have pushed ahead with their respective development agendas, bolstered by investments and pledges from some of the biggest players in their sectors.

The two regions cater to vastly different businesses. SIP is dedicated to heavy and energy intensive industries while TMHH focus on food security, agriculture and halal products. However, both are working in unison to help Sarawak achieve its goal of becoming a developed state by 2020.

SIP is a 7,000-hectare area on the coast of Bintulu dedicated to energy-intensive heavy industry and under the jurisdiction of the Bintulu Development Authority.

The Park will house companies engaged in aluminium smelters, steel, oil refineries, silica-based industries, marine engineering and other industrial and commercial activities.

A dedicated port will be developed inside the SIP to transport raw materials and produce. In addition, Bintulu Port, which is being upgraded to meet the expected demands of industries in the area, will provide another sea route in and out of the Park with massive cargo capability.

The production of aluminium, for which global demand is expected to rise four per cent, will have a strong presence at SIP with three separate projects eventually producing about 1.3 million tonnes a year.

The biggest one is a US$1 billion plant in a joint venture between Cahya Mata Sarawak Berhad and Rio Tinto Alcan, producing 720,000 tonnes. The Aluminium Corporation of China and a Malaysian group led by tycoon Tan Sri Syed Mokhtar Al-Bukhary and UAE business leader Mohammed Ali Rasheed Alabbar are building a US$1.6 billion smelter with production capacity of 370,000 while local company Press Metal Bintulu have received financing and have starting building a 240,000 capacity plant.

Two manganese smelters will also be established in Samalaju. Hong Kong’s Asia Minerals Ltd is keen to build a RM3 billion factory while Cahya Mata Sarawak is teaming up with Australia’s OM Holdings for manganese and ferro silicon allow plant.

Japan’s Tokuyama Corporation is spending more than RM6 billion for two polycrystalline silicon factories with an eventual annual capacity of 20,000 tonnes.

TMHH will cover close to 80,000 hectares of fertile agricultural land. It is hoped that the Hub will develop to be one of the most scientifically and environmentally advanced halal centres in the world via the use of advanced technologies, renewable energy and sustainable practices.

The first international company to invest in TMHH was Taiwan-based Sea Party International. Together with its subsidiaries, SPI has pledged RM$2 billion in phases. The first phase involved spending RM318 million for aquaculture activities such as tilapia breeding, chlorella cultivation and production of Halal collagen and gelatine. The second phase moves into the production of gelatine from tilapia scales, bones and skin, organic prawn farming and vendor development programmes.

The group has already started construction of its RM30 million research centre in Tanjung Manis.

Bahrain-based BioMe has also visited the site with a view to invest in sustainable and profitable biotech industries in TMHH.

During the Invest Malaysia Forum 2011 in Abu Dhabi in January, TMHH owners, Tanjung Manis Food & Industrial Park Sdn Bhd signed three MoUs that that could rake in millions of dollars’ worth of investments from the Middle East.

The first agreement was between Tanjung Manis Food & Industrial Park Sdn Bhd and Inside Investor to facilitate investments from the GCC into TMHH. The Malaysian company also signed with New York-based Borneo Agriculture to set up a US$500 million fund from GVC to invest in the hub. Perigon Advisory WLL also signed on to establish a RM3 billion Food & Agriculture Fund for Islamic countries. 

Announcement: Stop ASP People Movement

We are a group of Sarawakians who feel the need to initiate an Anti-Aluminium Smelting Plant (ASP) Campaign online in response to the establishment of ASP in Balingian, Sarawak. We strongly disapprove of building ASP in Sarawak or in fact, anyplace in Malaysia. And hence, our campaign name: STOP ASP.

Through this campaign, we wish to deliver one key message. ASP is dangerous and it has already endangered and will continue to endanger the health of the Balingian people and the delicate balance of ecosystem if it is not terminated. It is also part of our goals to draw more attention from the general public, especially Malaysian citizens, so that they also take up the responsibility to urge the government to stop and ban ASP in Malaysia. 

You might question what ASP is and why we are making such hoo-ha out of it. ASP is the short form for Aluminium Smelting Plant. Aluminium smelting is the process of extracting aluminium from oxide alumina, usually through the Hall-Héroult process. The building of ASP has numerous bad consequences.

In order for aluminium smelters to function, an exceptionally large amount of electricity is needed. In Sarawak where hydropower is ample, hydroelectric dams are built to supply the power. Apparently, dams are destroying Sarawak's natural environment. Several thousand square kilometres of land in Sarawak has suffered from irreparable damage! Moreover, the life span of a dam is approximately a mere 50 years, a so-called renewable energy which is not exactly sustainable.

Secondly, ASP is endangering the local inhabitant’s health. Several videos posted online show that Balingian people have witnessed the impact of the establishment of such plant—Noticeable increase in the number of children getting sick, plants dying, and dwindling number of fish, etc.

Besides, the waste product produced by ASP would cause pollution. If the alarmingly hazardous waste product-- fluoride waste were handled without caution, i.e. being channelled into the river, container leakage, etc, the locals who live off the river will suffer. And with the welcoming arms that our Sarawak government give to ASP project, it is only a matter of time that the whole Sarawak will be affected.

All of the above lead to two requests that we wish to address to our government. First, we urge Malaysia government and Sarawak state government to stop and ban ASP in Malaysia. Second, we urge Sarawak state government to further investigate the health and environment issues that are arisen in Balingian and reveal these reports to the public.

To support our campaign, please ‘like’ our page Stop ASP in Facebook (https://www.facebook.com/pages/Stop-ASP/334599206581381?sk=info) and spread the information posted in our page by mouth or by words.

Thank you.

Stop ASP People Movement,

E-mail: stopasp@gmail.com
Blog: http://stopasp.blogspot.com/

Video: Row over Malaysia's hydropower plans

Environmental activists want Malaysia to stop building 12 more hydroelectric dams. The government says the dams are crucial for generating much needed power.

However, critics say existing dams already produce more than enough electricity. Al Jazeera's Harry Fawcett reports from Sarawak in eastern Malaysia.

Berita: Kempen haramkan kilang peleburan aluminium

Kempen haramkan kilang peleburan aluminium

February 23, 2012

FMT LETTER: Dari Stop ASP People Movement, via e-mail

Sekumpulan rakyat biasa Sarawak telah melancarkan satu kempen anti kilang peleburan aluminium yang bernama Stop ASP melalui internet. Kami ingin menggunakan saluran ini untuk menyampaikan maklumat tentang kilang peleburan aluminium yang membahayakan kesihatan manusia dan mencemarkan alam sekitar.

Kami juga ingin mendapat lebih banyak perhatian daripada  warga Malaysia untuk menggesa kerajaan menghentikan operasi kilang dan mengharamkannya. ASP ialah singkatan untuk Aluminium Smelting Plant, iaitu kilang peleburan aluminium.

Mengapa kilang peleburan aluminium (ASP) perlu dihentikan? Pertama, pembinaan empangan air untuk membekalkan tenaga elektrik yang tinggi kepada ASP akan memusnahkan persekitaran semula jadi di Sarawak. Malahan jangka hayat sesebuah empangan air adalah sekitar 50 tahun sahaja.

Kedua, kilang peleburan aluminium membahayakan kesihatan penghuni-penghuni tempatan. Beberapa video yang disiarkan dalam Youtube menunjukkan penduduk Balingian telah menyaksikan kesan kewujudan kilang ini – peningkatan yang ketara dalam bilangan kanak-kanak yang jatuh sakit, tumbuh-tumbuhan yang mati dan bilangan ikan yang semakin berkurangan dan lain-lain.

Ketiga dan juga yang terakhir, sisa kilang yang dihasilkan oleh kilang peleburan aluminium akan menyebabkan pencemaran. Sekiranya sisa berbahaya itu tidak dikendali secara berhati-hati, contohnya: disalurkan ke sungai, pembocoran bekas sisa, dan lain-lain, para penghuni yang mendiami tepi sungai akan menderita. Dengan sikap kerajaan negeri Sarawak yang mengalu-alukan projek kilang ini, akibatnya seluruh Sarawak akan terjejas pada akhirnya.

Dalam kempen ini, kami mempunyai dua permintaan iaitu: pertamanya, kami menggesa kerajaan Malaysia dan kerajaan negeri Sarawak menghentikan operasi Kilang Peleburan Aluminium di Balingian dan mengharamkan pembinaan kilang ini di seluruh Malaysia. Kedua, kami menggesa kerajaan negeri Sarawak supaya menyiasat secara mendalam tentang isu kesihatan dan persekitaran yang muncul di Balingian dan mendedahkan laporan penyiasatan kepada orang awam.

Untuk menyokong kempen kami, sila “suka” page Stop ASP (https://www.facebook.com/pages/Stop ASP/334599206581381?sk=info) dan menyebarkan maklumat-maklumat yang dipamerkan di page tersebut kepada rakan-rakan anda tidak kira melalui internet ataupun lisan. Kesejahteraan alam sekitar dan manusia haruslah menjadi tumpuan utama kerajaan dalam usaha mengembangkan ekonomi negara.

http://www.freemalaysiatoday.com/2012/02/23/kempen-haramkan-kilang-peleburan-aluminium/

Web: Scandal of SALCO – How Taib Plans To Make Billions From Bakun!

Posted Thursday, February 16th, 2012

Scandal of SALCO – How Taib Plans To Make Billions

From Bakun!

 

This post is also available in: Iban, Malay

SALCO discussions in January - Taib, brother in law Robert Geneid, CMS Chief Richard Curtis meet with Rio Tinto Alcan executives in Kuching

Displaced families, who have received so little compensation from Bakun, may be interested to learn how Taib and his own family are planning to make billions for themselves out of the hydro-electric dam, based on an investment of just RM2.00!

We can reveal that SALCO (Sarawak Aluminium Company Sdn Bhd), the company that has been handed a licence to build a vast smelter in Simalaju, powered by cheap electricity from the dam, is secretively entirely owned by the Taib family company, CMS.

So far, they have only issued two shares for the company, worth a mere one ringgit each!

Scandalous SALCO scam!

Controlling interest - SALCO is run out of the Taib building, Wisma Mahmud

Our revelation sheds light on a classic money-making scam, that is still in its early stages for the Chief Minister, but where the planned outcome is plain to see.

It depends on a blatant willingness by Taib to abuse his political influence, in order to divert public money into his own pocket.

At the centre of the ploy, is the company Sarawak Aluminium Company Sdn Bhd, which has always been officially presented as a ‘Joint Venture’  between the giant multinational, Rio Tinto Alcan and CMS, after the two companies signed a so-called Heads of Agreement in 2007 to explore the possibility of investing in the smelter project.

Government support - invaluable for a company with just RM2.00 investment!

In 2008 this supposed joint venture received a manufacturing licence from the Malaysian Federal Government’s Industrial Development Authority and it also established a Memorandum of Understanding to open negotiations with Sarawak’s energy authority, SEB, over access to the electricity.

Ever since, the planned SALCO aluminium smelter has been placed at the top of Taib’s proclaimed SCORE agenda for developing the potential of the Bakun Dam.

SALCO - is this really who we are?

And, whenever the project is referred to, whether in press releases, statements by ministers, interviews by CMS executives or, indeed, on SALCO’s own website (above) it has always been clearly suggested that the company is 60% owned by Rio Tinto and 40% owned by CMS.

Likewise, the licences and agreements granted by government agencies have further implied that SALCO represents a serious joint financial investment backed by the multi-national.

Heads of agreement between Rio Tinto and CMS's Richard Curtis - with Chief Minister (and Chief Shareholder) Taib Mahmud centre stage in a deal designed to net him a fortune!

However, our company research reveals that in fact SALCO consists of just two shares, issued for a mere one ringgit each, both owned  by a company called Samalaju Aluminium Industries Sdn Bhd.

Just two shares at one ringgit each

We can further demonstrate that this Samalaju Aluminium Industries Sdn Bhd is in turn entirely owned by another company named Samalaju Industries Sdn Bhd.

Samalaju Aluminium Industries Sdn Bhd is owned by Samalaju Industries Sdn Bhd

… and this Samalaju Industries Sdn Bhd is 100% owned by CMS!

One ringgit per share

Earlier this week a spokesman for Rio Tinto Alcan in the company’s Montreal headquarters conceded to Sarawak Report that as yet the multi-national has no direct investment in Sarawak:

“There is not much news to report in terms of the Joint Venture”, he said and he stressed that the aluminium manufacturing giant would not buy into the SALCO project “unless the price is right” for the electricity:

“We are actively participating in the negotiations for the power purchase agreement for the feasibility studies to commence”[RTA spokesman]

Since the Taib family company CMS has itself no credentials as an aluminium manufacturer it seems extraordinary that the State of Sarawak and Federal authorities have nevertheless given its 100% subsidiary SALCO the licence and go ahead to start manufacturing!

For Taib and his family side-kick Robert Geneid this 'important meeting' had a personal significance. If they can flog 60% of SALCO to RTS they should make billions of ringgit.

However, for CMS there is all to play for. The RTA spokesman confirmed to Sarawak Report that the multi-national is indeed interested in the proposed 60% stake in SALCO, as long as it can negotiate the large amounts of cheap electricity it wants.

Given that, as predicted, the Bakun Dam has created a glut of electricity in the state, even with just two of its eight turbines in action, and given there are few other customers in sight, it is likely to succeed.

This means that the stage is now set for Rio Tinto Alcan to buy over a 60% stake in SALCO!  Its the deal that Taib and his latest top family side-kick Robert Geneid have been frantically trying to pull together, holding ‘important meetings’ (Borneo Post) with Rio Tinto in Kuching just last month.

Who wins?

Promoting SALCO - so much political support!

Think of the potential profit for the main shareholders of CMS, if Rio Tinto Alcan moves in to take a 60% stake of this giant aluminium smelter project!

These shareholders, of course, are firstly Taib’s own long dead wife Laila, followed by his four children.

In total, as has been detailed many times on this site, the Taib family own at least half the company and all the top management positions – so plenty of bonus opportunities there as well!

Remember, Taib has so far invested just RM2.00.  Yet this factory is expected to absorb an enormous RM7billion in construction costs and it is then expected to produce at least 550,000 tons of aluminium a year, worth an annual RM2.4billion to Malaysian GDP. This could be extended to a full capacity of 1.5 million tons! [Rio Tinto Alcan press information]

Getting in there - Australia has been happy to promote Rio Tinto's bid to work with Taib in Sarawak

So, why would CMS, with such a project under its control, hand over 60% of it to Rio Tinto Alcan for less than a commensurate price?

In fact, once a nice cheap electricity deal has been cut with SEB (run by Taib’s cousin and proxy Hamed Sepawi), CMS will be in a position to make a fat multi-billion ringgit profit out of their tiny two ringgit investment in SALCO!

And, further down the line, consider what a 40% stake in such a venture would be worth should Taib and his family eventually decide to sell it off!  They could even decide to cash in early and sell off their holding for a few billion up front – after all they only invested RM2.00!

Indeed, such RM2.00 companies have been the method by which corrupt politicians in Malaysia have exploited their positions for years, passing huge contracts and concessions into these empty shells, so that they can then be sold or the work sub-contracted to a real working concern.

But, this project is on a scale of its own!  The question is, why does Rio Tinto Alcan, a supposedly respectable multi-national, think it is appropriate to become involved?

Off repeated lie - "we are a joint venture between RTA and CMS"!

The losers

The losers are just as easy to identify.  To start with, Taib failed to tender the project, so the State of Sarawak stands to get no realistic premium from the licence.  Likewise, with the rock bottom price for the hydro electricity, SEB is likely to make very little with which to improve its services and infrastructure.

As usual, other construction companies have found themselves squeezed out of the opportunity, but will probably end up sub-contracting for CMS.

Then consider the Civil Service pension funds, which were forced by ministers to invest billions in the Bakun Dam project to keep it afloat, because private investors were too wary.  The promise of rock bottom prices for the resulting hydro-power does not provide much prospect of any reasonable return on that investment, which means civil service pensioners will lose out!

Noxious - the Pressmetal plant in Mukah has provided no jobs for the locals, but it has taken their land and poisoned their fields and their health

And what of the local people in the area?  They are already living in terror of the arrival of the plant, because of the worrying levels of pollution already being experienced by the people of Mukah, who are affected by the existing Pressmetal aluminium plant.

Aluminium manufacturing can be a highly toxic process, unless carefully managed, and the people of Mukah, who have of course lost much of their NCR land to the plant that now looms over them, are suffering health problems and their plants are dying.

And what about the possibility of jobs for such people?  Well, unfortunately, it appears they are not suitable.  Rio Tinto Alcan has announced a projected 4,700 jobs on the plant, however none of the local people have managed to find employment at Pressmetal.

Instead, Taib has already made clear in his announcements that he plans to import tens of thousands of foreigners from places like India to work in his SCORE projects.  Doubtless these immigrants will be given houses, identity cards and voting rights, all of which so many local people find hard to obtain.

Just days ago the Australian High Commissioner was over in Kuching promoting Rio Tinto Alcan's involvement in SCORE. He is supporting Australian big businesses venture with the Taib family, but what will it mean for jobs back in Tasmania's aluminium plant which Rio Tinto is planning to shut?

Doubtless, they will be expected to vote BN in return!

Finally, what about the workers in existing Rio Tinto Alcan plants in places like Tasmania?

Rio Tinto Alcan have in fact just signalled that they are interested in selling off their Tasmania plant, presumably because they have a cheaper option elsewhere!

Rio Tinto Alcan and its Corporate Social Responsibility

RTA spokesmen have made plain that they have yet to move to the stage of feasibility studies and environmental and social impact assessments for this Simalaju smelter project.

However, they can be under no illusion that in conducting prospective business with CMS they are proposing to enter into a joint venture partnership with one of the world’s most notoriously corrupted and politically exposed companies.

Taib stands to make billions (as usual), but what is in this project for local people?

Taib Mahmud himself is being formally investigated by his own federal government’s anti-corruption commission (MACC).  And countries all over the globe have confirmed that they are looking into the assets of Taib and his family, with respect to money laundering!

So, what on earth do Rio Tinto Alcan think they are doing even considering entering into such a deal with a company that is blatantly owned by Taib?

Of course, they stand to make a fortune for their shareholders if they are able to swing a ludicrously cheap deal for their electricity and to set up in a country like Sarawak, which has no carbon taxes and low standards of supervision on matters like the environment and labour matters.

But these days shareholders also expect certain basic ethical standards.  Do they include doing business with corrupt companies personally owned by Chief Minister of the state in which they are investing?

Is this what Rio Tinto Alcan mean by the statement:

“We respect the laws and customs of our host countries and communities. We work with them to ensure benefits and opportunities are shared”?

To the contrary, the Bakun Dam and the whole planned string of future dams and SCORE related projects that are now being rolled out in Sarawak, represent nothing less than a human and environmental disaster in one of the world’s last remaining great tropical rainforests.

What's in store? A Rio Tinto Alcan factory in Canada

The driving motivation behind this project is the desire by Taib Mahmud and relatives like his brother in law Robert Geneid (who now features as a key negotiator in the SALCO ‘joint venture’ project) to become personally even richer.

So, is it right for companies like Rio Tinto Alcan to threaten to pull out of established locations like Tasmania in order to get involved with a man like Taib in a place like Sarawak?

Source: http://www.sarawakreport.org/2012/02/scandal-of-salco-how-taib-plans-to-make-billions-from-bakun/