TEXT-Rio says gets Malaysia smelter licence

(Following is a release by mining firm Rio Tinto Ltd/Plc (RIO.AX) (RIO.L))

SYDNEY, March 14 - Rio Tinto Alcan and Cahya Mata Sarawak Berhad (CMS)'s proposed US$2 billion (approximately RM7 billion) world-class aluminium smelter project in Similajau, in the state of Sarawak, has made significant progress with the granting of a manufacturing licence by the Malaysian Industrial Development Authority.

"This is a clear demonstration of the Malaysian federal government's confidence in the SALCO smelter project," stated Sandeep Biswas, senior vice president, business development, Rio Tinto Alcan. "The Federal Government's support, through the granting of the licence from the Malaysian Industrial Development Authority, is a recognition of the significant benefits the SALCO smelter can deliver for Malaysia and Sarawak."

The proposed smelter will have a production capacity of 550,000 tonnes per year in its initial phase, with the capability to be expanded to 1.5 million tonnes. It is expected to contribute up to RM2.4 billion annually to Malaysia's GDP, and could generate up to 4,700 direct and indirect jobs.

CMS group managing director Dato' Richard Curtis, in thanking the Malaysian federal government for its support said: "SALCO looks forward to working with both the federal and Sarawak state governments to develop a truly outstanding project. The Sarawak state government and its agencies have also played a significant role in the progress of the SALCO smelter project," he concluded.

Rio Tinto Alcan and CMS signed a Heads of Agreement in August 2007 to commence feasibility studies for the development of the SALCO smelter. A detailed environmental impact assessment has commenced and international engineering consultant Bechtel has been appointed to undertake an engineering study. As well, in February 2008, Rio Tinto Alcan and CMS signed a Memorandum of Understanding (MoU) with Sarawak Energy Behard to allow negotiations to commence on power for the smelter. The MoU was signed during the launch of the Sarawak Corridor of Renewal Energy (SCORE) in Bintulu.

The Malaysian Industrial Development Authority (MIDA) is an agency of the Malaysian government established to promote and coordinate industrial development. All companies engaged in manufacturing in Malaysia must obtain a manufacturing licence.