AN ENVIRONMENTAL impact assessment carried out by the Council for Scientific and Industrial Research (CSIR) has given the go-ahead for the construction of a US$1.6-billion (R16-billion) aluminium smelter at Coega. The study, which is before government, found there to be “no negative impacts of high significance, provided that all mitigation measures are applied effectively”. French aluminium producer Pechiney is expected to take a final decision on whether to go ahead with the project early in 2003. Given the importance of securing a major tenant for South Africa’s first Industrial Development Zone, the authorities are going all out to woo Pechiney. The province has announced the provision of an additional R298-million for The Coega Development Corporation (CDC) to “fast track infrastructure delivery” for the smelter. This was announced by Finance and Provincial Expenditure MEC Enoch Godongwana in his Adjustment Budget. While an investment by Pechiney would boost confidence in the zone, a decision not to invest would not stop the development of the Coega IDZ, according to the CSIR study. However, there could be a "the loss of positive social and economic impacts associated with securing Pechiney as an anchor tenant for the IDZ. "Secondary developments in the IDZ will be slowed and international investors and developers may lose confidence in the potential of the IDZ, which could seriously hamper the zone in achieving its objectives," it states. The report looks at both local and general effects on the environment by the Coega smelter. It says generation of power for the smelter will result in an increase of about 4 per cent in Eskom's atmospheric emissions, and an increase of about 2 per cent in total carbon dioxide emissions. The effect of fluoride emissions on goats within the Coega IDZ boundary will be of "low significance" and the effect on tourism at the nearby Addo national park is judged to be “insignificant due to the distance of the smelter from the park”. The report suggests total expenditure on the smelter will be just over $2bn in the construction period from 2003 to 2005. “This expenditure consists of $1,042bn of direct investment, of which approximately 53 per cent will consist of imported goods; and a further $1,054bn of indirect investment and financial reserves and debt financing costs.” The sale of aluminium will generate $510m a year, and boost SA's balance of payments. “However, this will be reduced by imports and capital outflow as a result of repayment of international debt and remittances such as dividends.”