A planned $43bn smelter in Abu Dhabi has been declared “dead” after Rio Tinto, the world’s second largest aluminum company, said the UAE had decided to use its natural gas in more-profitable industries.
Middle Eastern nations are using their gas in the chemical, fertiliser and liquefied-natural-gas industries to benefit more from their reserves, Dick Evans, chief executive officer of Rio Tinto’s aluminum unit told newswire Bloomberg.
The shift is reducing supplies available to the energy-intensive aluminum industry, he said. “Abu Dhabi is for all practical purposes dead at this point, and we don’t see it coming back,” said Evans. “That’s because of this policy shift and how the emirates are seeing the use of their gas.”
In May Rio spokesman Nick Cobban said on that the project was “on hold'” while the government reviewed its energy requirements.
Abu Dhabi Basic Industries Corp chief operating officer Jim White said in October the smelter there would be able to produce about 700,000 tons a year at a cost of $3 billion.
Aluminum prices have risen 24 percent this year, in part because of supply disruptions in South Africa and China.
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