PUTRAJAYA, Feb 9 (Bernama) -- Prime Minister Datuk Seri Najib Tun Razak today said the joint venture agreement between Malaysia and China to develop an aluminium smelting plant in Samalaju Industrial Park reflected the confidence the Chinese government and investors had in making large investments in the country, and in Sarawak specifically.

"This gives a positive sign to the investment climate in Malaysia," the prime minister told reporters after witnessing the signing of an agreement here between GIIG Holdings Sdn Bhd and Aluminium Corp of China Ltd for the setting up of the plant.

A company, Smelter Asia Sdn Bhd, will be the special purpose vehicle for the venture.

"I hope this marks a recovery in economy this year. Many more foreign investments should be flowing into our country.

He said the development of the smelting industry in Sarawak would also provide a strong drive in the development of SCORE (Sarawak Corridor of Renewable Energy).

"I believe these industries that use energy, industries that generate high income, high value and high tech industries using high energy can be located in Sarawak."

Asked on whether there was still room to locate large smelting plants in Sarawak, Najib said: "Two licenses have been given out. That is the commitment by the government. We just have to work out the supply of power."

Najib said the construction of the plant will begin this year and is expected to be completed in two-and-a half years.

On the investment amount, Najib, who is also Finance Minister, said the initial amount alone is already more than a billion US dollars.