Funding to be split between export credit agencies and commercial banks, sources say
Emirates Aluminium Co, building the world’s biggest aluminum smelter, may seek $3bn for the Abu Dhabi project, two people with knowledge of the matter said.
Funding will be split between export credit agencies and commercial banks, the people said, declining to be identified because the deals are yet to be completed. Emirates Aluminium is owned by Mubadala Development Co. and Dubai Aluminium Co.
“We are working with shareholders to finalise the funding structure,” Emirates Aluminium chief executive officer Saeed Al Mazrooei told reporters last week in Abu Dhabi. “There are still many options to decide from,” he said, declining to elaborate.
Arabian Gulf countries are investing in petrochemicals and metals output to diversify their economies away from crude oil and benefit from cheap power and gas prices. Energy accounts for 30 to 40 percent of aluminum smelting costs, according to Brook Hunt, a London-based unit of Wood Mackenzie Consultants Ltd.
Emirates Aluminium, known as Emal, will spend $4.5bn to expand the smelter’s annual output to 1.3 million metric tons by 2014 from 750,000 tons now, Al Mazrooei said. Shareholders will provide the remaining third of the funds, the people said.
The company has completed 5 percent of its expansion, al- Mazrooei said. Demand for Emal’s aluminum is about 950,000 tons, more than its current production, he said.
The UAE, the fourth-largest member of the Organization of Petroleum Exporting Countries, is supporting new industry by developing natural-gas fields and nuclear power.