Aluminium Bahrain wins approval from gov't for gas allocation needed to support planned sixth production line
Aluminium Bahrain has received approval from the kingdom's government for the gas allocation needed to support its planned sixth production line, which is expected to start operating in 2018, a top company executive said on Tuesday.
Alba, owner of the world's No. 4 aluminium smelter, expects final approval for the gas pricing structure on the line by the end of the year, Chief Operating Officer Isa al-Ansari said at an industry event in Abu Dhabi.
Once secured, the scheme will take 36 months to complete, meaning production should begin in the first quarter of 2018, Ansari told reporters on the sidelines of the event.
The Line 6 project will add 400,000 tonnes to the smelter's current 890,000-tonne capacity. The company is ramping up production amid expectations for growing aluminium demand, which is already forecast to rise 7 percent this year.
Aluminium supply contracts for consumers in Europe are likely to almost double next year as spot market premiums - the cost to get metal immediately - rise to record highs on rising demand and supply cutbacks.
Alba's Line 6 project is expected to cost around $2.5 billion. Bechtel Canada was hired in December 2012 to complete the feasibility study for the project, while BNP Paribas is the financial adviser.
The company is also interested in buying upstream projects to provide alumina, a raw material used in aluminium production, Ansari said.
Gulf-based aluminium firms have been moving into upstream projects in recent years, to secure the raw materials needed for their expanded production facilities.
Emirates Global Aluminium, created last year from a merger of Dubai Aluminium (Dubal) and Emirates Aluminium(Emal), is expected to start production in 2017 at a $5 billion project in Guinea, which includes a bauxite mine and alumina refinery.
Smelters need one of two things to make them work well and preferably both.
Aluminum in simplistic form is electrified Alumina.
They either need a plentiful supply of cheap electricity. This country does not have it!
Alternately, they need to be located close to a cheap supply of bauxite ore (for conversion to Alumina). Again, this is not the case with Gulf refineries.
So unless there is a subsidy, this refinery will end up like others in the world......outdated quickly!