CAPE TOWN (miningweekly.com) – Diversified miner Rio Tinto on Tuesday criticised South Africa for reneging on the Coega aluminium smelter agreement.

Rio Tinto CE diamonds and minerals Harry Kenyon-Slaney told the Mining Indaba that South Africa's action was not condusive to attracting foreign direct investment (FDI) into the country.

"The recent cancellation of the electricity agreement with Eskom led to the cancellation of the project. This cancellation will not induce FDI into South Africa," Kenyon-Slaney said at the conference.

Rio Tinto signed the electricity agreement with Eskom at a high-profile function at the Coega industrial development zone several years ago.

Kenyon-Slaney told the conference during his address that one of the minerals that Rio Tinto continued to seek in Africa was bauxite, the aluminium raw material.

The company, he said, operated in a manner in Africa that ensured that the people shared in the benefits of mining.

"The contribution that mining makes to Africa is often under-estimated. Mining generates jobs and brings in significant FDI," he added.

But the provision of power supply, ports and rail services provided by governments "must work".

Electricity supply was an "absolutely critical" issue for Africa and Eskom's proposed electricity-tariff increases would have a negative impact.

The company is active at Richards Bay Minerals and Palabora in South Africa, Rossing uranium in Namibia, is working with BHP Billiton in iron-ore in West Africa and has diamond interests in Zimbabwe.

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