Abu Dhabi firm eyes $500mn fluorides complex

Abu Dhabi-based Gulf Fluor plans to invest $500 million to build a fluorides complex in the Gulf emirate with a capacity of 70,000 tonnes a year to meet the region's increasing demand, its chief executive said on Sunday.

The new complex, the first of its kind in the Gulf Arab region, is expected to start operation in the third quarter of 2009 and will produce aluminium fluoride and hydrofluoric acid, Wael Suleiman said.

"The demand for aluminium fluoride in this region is huge as we have big aluminium smelters increasing their output and new smelters being built," Suleiman told Reuters in an interview.

Aluminium fluoride is made of hydrogen fluoride and aluminium trihydroxide and used in aluminium production, while hydrofluoric acid is a raw material for other fluorine products as refrigerant gases and nitrogen trifluoride.

The planned complex will produce 60,000 tonnes of aluminium fluoride, which will meet the Gulf's demand for the material, and 10,000 tonnes of hydrofluoric acid a year, Suleiman said.

Privately owned Gulf Fluor plans to borrow 480 million dirhams ($130.7 million) from the National Bank of Abu Dhabi to partly finance the project, he said.

Aluminium is one of the largest industries in the United Arab Emirates, a federation of seven emirates which includes Abu Dhabi.

Competitively priced energy and a construction boom in the world's biggest oil exporting region, where more than $1 trillion worth of infrastructure projects are in the pipeline, is boosting demand.

"It is expected that the Gulf's aluminium production will rise from the current level of about 1.7 million tonnes a year to over 5 million tonnes by 2011," Suleiman said.

Government-owned Dubai Aluminium Co. (Dubal) and Abu Dhabi's Mubadala Development Co. are planning a $8 billion smelter complex to start operation in 2010. It will eventually have an annual capacity of 1.2 million tonnes, making it the largest of its kind in the world.

Dubal's only competitor in the Gulf Arab region, Aluminium Bahrain (Alba), which operates the world's third-largest smelter of the metal and produces 830,000 tonnes a year, said last year it was mulling plans to raise its output by up to 45 % to about 1.2 million tonnes.