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Tue 19 Feb 2008 03:49 PM

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Plans for Abu Dhabi aluminium smelter near completion

Feasibility studies into the construction of an aluminium smelter in Abu Dhabi are nearing completion.

Feasibility studies into the construction of an aluminium smelter in Abu Dhabi are nearing completion.

State-owned Abu Dhabi Basic Industries Corporation (ADBIC) is in talks with Rio Tinto Alcan for the development of the smelter in al-Ruwais, which has an estimated cost in the first phase of US $5 billion (AED 18.3 billion).

"The pre-feasibility is almost complete," said Sandeep Biswas, senior vice-president, business development, Rio Tinto Alcan.

"This will be followed by a detailed feasibility study and the notice to proceed. We're also discussing the key commercial terms."

The smelter will be built over three phases, with each producing a capacity for 700 tonnes of allumium a year.

This is the second alluminium smelter planned in Abu Dhabi. Emirates Aluminium is currently constructing a 1.4 million tonne-a-year facility in the Taweelah Area.

Smelter projects are also under way or planned in other areas of the Middle East, including in Qatar and Saudi Arabia.

"The Middle East is fast becoming a centre for alluminium growth," added Biswas.

"And bearing in mind just five of the planned smelters go ahead, we could be looking at producing six million tonnes of alluminium over the next few years."

But Biswas added that inflation and a shortage of skilled labour and raw materials could jeopardise smelter projects unless companies are smart in their design and procurement strategies.

"The rate of cost escalation at the moment is quite frightening," he said.

"The alluminium industry needs secure access to labour markets and raw materials. Having proven and reliable technology is also critical."

Rio Tinto Alcan was formed in October last year after Anglo-Australian Rio Tinto bought Canada's Alcan for US $38.1 billion.

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