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Dubal faces delay to Orissa project
State-owned smelter Dubai Aluminium Co. (Dubal) will not be able to start a $3.6 billion bauxite alumina project in the Indian state of Orissa in 2009 due to bureaucratic issues, a Dubal official said on Saturday.
"Due to the bureaucratic shape in Orissa and negotiations and papers we have to go through, there will be a delay on the start-up of the project, but it is hard to say how long the delay will be," Khalid Essa Abdullah Buhumaid, a Dubal general manager, told Reuters.
"However, the team who is in charge of this project is working very hard to bring it up to the speed and not to cause any further delays".
The bauxite mine and alumina refinery and smelter is a joint venture between Dubal and India's Larsen & Toubro. The United Arab Emirates' firm will hold a 74 % stake in the project, while the Indian engineering and construction firm will hold the rest.
Phase one of the facility will have a 1.5 million tonne output capacity and cost $1.1 billion to build.
Phase two, involving an aluminium smelter, will add another 1.5 million tonnes per year of alumina at a cost of $2.5 billion, but Buhumaid did not say when it would be finished.
Dubal aims to be among the world's top five aluminium producers in five years. Its only competitor in the Gulf Arab region is Aluminium Bahrain (Alba) with an aluminium output capacity of 830,000 tonnes a year.
The smelter's main source for alumina is Australia, but it is looking for more suppliers and also targeting joint ventures with low-cost alumina producers to protect itself from price fluctuations.
"We are looking at different options all over the world... we are in discussions with a number of parties," Buhumaid said.
In May, Dubal, Abu Dhabi government investment agency Mubadala Development Co. and Australia's BHP Billiton bought two thirds of the Global Alumina project in Guinea that includes mining for bauxite and building a refinery to make alumina, or semi-processed bauxite.
The refinery, which will be complete as early as 2009, will have capacity of 3 million tonnes a year of alumina, Mubadala said.
Dubal produced 861,000 tonnes of aluminium in 2006, used mainly in construction, transport and the electrical industries.
"In 2007 our total production is expected to reach 895,000 tonnes," Buhumaid said.
Dubal produces primary aluminium, value-added products including foundry alloy for automotive wheels, extrusion billet for construction purposes and high purity aluminium for the electronics industry.
It has announced plans to build an $8 billion aluminium smelter complex, which would start operations in 2010. The project would raise its output capacity to 1.4 million tonnes a year making it the world's largest.
Russia's Rusal operates the world's biggest smelter, at Bratsk, with a capacity of 976,000 tonnes per year.
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