- Press Metal's newaluminium smelting plant would be the first user to use electricity from theBakun Dam, said  The Star. The facilityat the Samalaju Industrial Park would start taking in power from Sarawak EnergyBhd (SEB) from this month onwards. SEB CEO Torstein Dale Sjotveit was quoted inthe report as saying that the 275kV transmission line linking SEB's Samalajupower station and Press Metal's new plant has been energised last Thursday.Under the deal, Sjotveit added that Press Metal is  to purchase some 480MW of power to kick-offcommercial operations at its new smelter by June this year (our assumptions:end-3Q12)

- The 480MW of power is to run Press Metal's new Samalajusmelter, which has a capacity of 240,000MW. Its existing 120,000-tonne Mukahsmelter ' which is taking in some 200MW of power ' is already running at full capacity.

- Apart from Press Metal, progress for the other threepioneer investors at Samalaju is also fast taking shape and would commenceoperations in stages within the next two years. Tokuyama's polycrystallinesilicon plant (Phase II) is scheduled to be operational by 2Q2014 following thecommencement of Phase 1 in September next year.

- Asia Mineral Ltd, which has signed a long-term powersupply of 270MW with SEB, is scheduled to commence its manganese and ferroalloy smelting plant sometime in June/July 2013. OM Material's Sarawak RM1.5bilplant (80:20 JV between OM Holdings and the CMS group), which would producesimilar products as AML, would start power consumption and production testingfrom 2H2013.

- As such, we gather that SEB is set to construct three newtransmission lines to connect power to these three new facilities at Samalaju,in addition to Press Metal's. One line would be for 132kV, while the other tworemaining lines are for 275kV. To be sure, we gather that tenders for the 275kVSamalaju-Tokuyama transmission line (Phase 2) has closed on April 18. By ourreckoning, a 132kV transmission line for last-mile hook-ups costs around RM3miland RM5mil, while a 275kV ranges from RM13mil and RM20mil.

- We believe Sarawak Cable would be favourably positioned tobid for these new transmission line projects, as it is currently constructingboth the 132kV SamalajuTokuyama (RM6mil) and 265kV Samalaju-Press Metal (RM8mil)lines ' and also supplied the power cables for the 275kV Bakun-Samalajutransmission lines. 

- Taken together, these latest developments should solidifySarawak Cable's chances to secure works for Sarawak's RM3bil 500kV backbonetransmission line system (transmission portion: RM2bil), whereby it is one offive parties (and the only local outfit) which has been pre-qualified for thismassive job.

- From an end-user standpoint, Press Metal's long-term powersupply agreement with SEB (25 years) should help strengthen its grip as theleading integrated aluminium player within ASEAN ' where capacity should tripleto 360,000 tonnes when the Samalaju facility is fully commissioned byend-1H13.  

Source: AmeSecurities