Johannesburg - French aluminium firm Pechiney has selected South Africa's Coega industrial zone as the preferred location for its 460 000 ton a year aluminium smelter, newspaper reports said on Friday.

Pechiney Chairman Jean-Pierre Rodier said a final decision had not been made, but Coega was "by far the preferred destination" for the smelter, Rodier was quoted as saying in the Business Report newspaper.

Rodier made the comments after touring Coega, a deep-water port and industrial zone in the Eastern Cape province, and meeting with government officials.

The Business Day newspaper said South Africa is ahead in the race for the aluminium smelter against other possible locations in Canada and Australia.

If the $1.6 billion project receives the final go-ahead, Rodier said that construction could begin in the first quarter of 2003, with production starting in 2005.

In March, Pechiney reached an agreement with Eskom to supply power for the smelter.

With acknowledgements to Reuters and www.news24.co.za