CMS and Rio Tinto Terminate Heads of Agreement on Planned Sarawak Smelter Project

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Tuesday, 27 March 2012, Kuching – Cahya Mata Sarawak Berhad (CMS) announced today that the Heads of Agreement between Rio Tinto Aluminium (Malaysia) Sdn Bhd (RTA), a wholly owned subsidiary of Rio Tinto plc, and Samalaju Aluminium Industries Sdn Bhd, a wholly owned subsidiary of CMS, and the Memorandum of Understanding between Sarawak Energy Berhad (SEB), CMS and RTA had both been terminated amicably by mutual agreement.

CMS Group Managing Director, Dato’ Richard Curtis, said CMS and RTA had been working for several years to establish an aluminium smelter project but had been unable to finalise commercial power supply terms with SEB which would meet the parties’ current respective financial considerations and economic imperatives. As a result, RTA 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.

Notwithstanding this decision, continued Dato’ Richard Curtis, CMS remained committed to being a leading local private sector participant in Sarawak’s Corridor for Renewable Energy (SCORE). In addition to its wide range of construction materials’ products including cement, CMS believes it is well positioned to take advantage of investment opportunities with its in- depth local infrastructure development experience, strong management capabilities and healthy Balance Sheet.

Currently, CMS has taken a 20% participation in the planned 600,000MT manganese and ferro alloy smelter which is scheduled to commence production in 2013. This smelter is being established in Samalaju Industrial Park (SIP) by a subsidiary of OM Holdings Limited, an Australian listed miner, manufacturer and trader of manganese, iron and chrome ores and alloys. CMS is also involved in the provision of accommodation and other related services to workers within SIP as well as in the master developer role for the planned township to adjoin SIP. CMS remains very bullish about investment opportunities within SCORE and is assessing the potential of other possible major industrial investment opportunities within SIP.