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Dubal mulling alumina refinery in Africa

State-owned Dubai Aluminium (Dubal) is considering building an alumina refinery in Africa to meet rising global demand, a senior company official said on Monday.

"The demand globally and in the UAE is growing and we are expanding to meet this demand," Khalid Essa Abdullah Buhumaid, a Dubal general manager, told Reuters on the sidelines of an international aluminium conference in Dubai.
"We are looking into Africa to build a new refinery. We have identified two areas, but the plan is still in early stages," he said, declining to give further details.

Apart from hydrocarbons, aluminium is one of the largest industries in the Opec oil exporting nation, which groups seven emirates including regional trade and tourism centre Dubai.

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

Dubal is still on target to increase 2008 production to 920,000 tonnes when two new potlines in Jebel Ali in Dubai become fully operational, he said.

In 2006 Dubal produced 789,341 tonnes of aluminium, used mainly in construction, transport and electrical industries. Alumina is the main raw material for smelting aluminium.

For 2007, Dubal was still targeting output of 890,000 tonnes, he said.

Its plans also include starting construction of the world's largest aluminium smelter complex, costing $8 billion, in the first quarter of next year, Buhumaid said. The complex would eventually have output capacity of 1.4 million tonnes a year.

Russia's Rusal operates the world's biggest aluminium smelter at Bratsk with capacity of 976,000 tonnes per year.

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

Strong market fundamentals

Dubal's chief executive Abdulla Jassim Kalban told the conference that fundamentals for growth in primary aluminium consumption were "rock solid". China, which represented 50% of the increase in global demand, was expected to consume around 12 million tonnes of aluminium in 2007.

Global annual aluminium consumption growth rate was around 8%, up from 3% in the 1970s through to the 1990s, he said without giving a figure.

China already produced 28% of global aluminium, or 9.3 million tonnes, in 2006. Its output rose 34% to 6.7 million tonnes in the first seven months of this year, as strong prices in the first half tempted idled smelters to come online.

Aluminium smelters are closing rapidly because of high electricity prices, environmental pressures and other factors, but Kalban said despite recent closures, output remains high.

Output growth will come from the Middle East, which is forecast to produce six million tonnes by 2020, around 10% of the global output, he said.

"In the 1980s, the Middle East accounted for 1% of world aluminium production... The region is perfectly positioned to produce even more," Kalban said.

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