Strong Demand For Sarawak’s Energy Despite Termination Of Negotiations With RIO TINTO/SALCO

Sarawak, Kuching – Wednesday, 28 March 2012 - Sarawak Energy Berhad (SEB) today confirmed that it has not been possible to reach agreement on the tariff for a power purchase agreement (PPA) with Rio Tinto/SALCO for the proposed aluminium smelter at Samalaju Industrial Park.

SEB’s Chief Executive Officer, Mr Torstein Dale Sjøtveit, said “SEB has negotiated with Rio Tinto/SALCO in good faith. We are disappointed that we were not able to find a mutually acceptable solution, but the parties’ positions on the price of electricity were just too far apart.”

“Despite the inability to reach agreement with Rio Tinto/SALCO, the SCORE agenda is forging ahead. In the past two years, SEB has reached agreement with SCORE and export customers to sell more than 2000 megawatts of SCORE power. This means that the entire firm output of the Bakun hydroelectric facility is already committed.”

“There now is a long queue of potential customers competing for SEB’s remaining power.”

“Press Metal’s new aluminium smelter will take 480 megawatts and is on track to commence operation by June this year. The construction of other plants is well advanced.”

“The strength of this customer demand proves that Sarawak’s renewable hydro power is extremely valuable to energy intensive industries from around the globe.”

“While we regret that an agreement was not possible with Rio Tinto/SALCO, I am certain that all the power that could have been allocated to Rio Tinto/SALCO will find another willing buyer.” said Mr Sjøtveit.