Aluminium in the region is a $30bn industry. Could it hit $44bn in the next ten years?
A fully-integrated aluminium industrial complex being built as a JV between Alcoa and Saudi Arabian Mining Co. (Ma’aden) alone involves a capital investment of about $10.5bn. More foreign investors are looking to the Gulf for aluminium business due to its inexpensive gas stocks and strategic geographic location, with Europe already sourcing around 6% of its aluminium demand from the region.
The UAE and Saudi Arabia rank among the Gulf’s two biggest aluminium markets. Smelting operations managed by the Dubai Aluminium Company Ltd. (Dubal) and Emirates Aluminium in Abu Dhabi produce around 1.8 million tons of aluminium a year, or 40% of total annual Middle Eastern production.
“Aluminium has emerged as one of the key economic activities of the Arab World, and complements region-wide efforts to diversify national development beyond oil and gas,” said Gulf Aluminium Council general secretary Mahmood Daylami.
Last year Emal commenced construction on Phase Two of its $5.7bn smelter project. A symbolic ground-breaking ceremony marked the start of the Al Taweelah smelter’s second phase, with completion and full production planned to be reached in little more than two years, Emal said in a statement.
This will boost Emal’s total production capacity to around 1.3 million metric tonnes by the end of 2014, making Emal one of the largest single-site producers of primary aluminium in the world. Emal’s board, shareholders and other VIP guests visited the site to witness the first step in the $4.5bn expansion.
Phase one was completed ahead of time and to budget, with the company supplying 280 customers in 36 countries with high quality aluminium. Phase two will include the addition of a new potline and will result in the world’s longest ever single smelting line.
Saeed Fadhel Al Mazrooei, Emal president and CEO, said: “When complete, Emal will take its place as the largest and most advanced single-site producers of primary aluminium in the world, and one of the leading contributors to deliver a stable and prosperous Emirati future.”
Emal is a 50-50 joint venture between Dubai Aluminium Company Ltd. and Mubadala Development Company, Abu Dhabi’s investment vehicle. The company, which supplies customers in 36 countries, first started production from its $5.7bn project located at Al Taweelha in Abu Dhabi in January 2010.
Contracts worth more than $700m have been awarded as part of the expansion. The most significant contract was signed with SNC Lavalin to carry out engineering, procurement and construction management (EPCM) at the plant, which is essential if Emal is to meet its target of achieving first hot metal in Q1 2014. SNC Lavalin provided the same support and services during Phase One.
The award of the contracts for long-lead items packages is vital for EMAL to meet the challenging timetable for Phase Two. “Our target to achieve full production by 2014 depends on the successful execution of these contracts. We are confident that we have engaged the best partners with the best technology and will get the best outcome,” said Al Mazrooei.
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