Export efficiency of large projects: The case of aluminium smelters

We draw attention to a number of key factors in the evaluation of major projects, such as smelters, which are highly capital- and energy-intensive as well as export-orientated. The practice of justifying such projects by upvaluing foreign exchange is considered, as is the cost of distortion. Export efficiency is introduced as the key criterion: the efficiency of some recent smelter proposals in Oceania was between 36 and 50 cents in the dollar. A correct power price is essential: hydropower (in contrast with hydroenergy) should be priced as a depletable resource.