Emirates Global Aluminium (EGA), one of the world’s biggest aluminium producers, said on Tuesday it has signed a long-term supply agreement to meet its feedstock requirements for caustic soda from UAE-based Shaheen Chem Investments
Shaheen Chem Investments, a new company headed by UAE and Oman-based private investors, will set up a 300,000 square metre chemicals complex at the Khalifa Industrial Zone in Abu Dhabi to produce 130,000 tonnes a year of caustic soda and 160,000 tonnes a year of ethylene dichloride, EGA said in a statement. It did not disclose the cost of the project.
EGA, which merged to form the UAE's largest non-oil company after a tie-up between Dubai Aluminium and Abu Dhabi's Emirates Aluminium in 2013, is developing a US$1 billion bauxite mine and other facilities in Guinea to secure the supply of the raw material for its $3 billion alumina refinery facility currently being built in Al Taweelah, Abu Dhabi. Once fully operational, the refinery, the first in the UAE, will produce 2 million tonnes of alumina per year, meeting 40 per cent of EGA’s needs.
"The construction of a caustic soda plant next to our alumina refinery guarantees our supply of this vital raw material at competitive prices for years to come," said Abdulla Kalban, managing director and chief executive at EGA.
EGA, which is the UAE's largest industrial firm, will absorb all the caustic soda output for a period of 15 years, when production comes online "early next decade.".
Caustic soda is an important chemical component in the separation of bauxite ore from alumina, which is then processed to produce aluminium.
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The plant is also set to target production of ethylene dichloride, becoming the first such facility in the UAE to produce the chemical compound. Ethylene dichloride is used in manufacturing polyvinly chloride (PVC), which finds myriad uses in pipes, cables, clothing and industry.
Shaheen Chem Investments will find other off-takers for ethylene dichloride, and will target production of vinyl chloride and PVC in phase two, according to a spokesman for EGA.
On Monday, the aluminium producer signed a three-year supply agreement with Vietnamese state-owned miner Vinacomin to import 300,000 tonnes of alumina a year. EGA, which is jointly owned by Abu Dhabi strategic firm Mubadala Investment Company and the Investment Corporation of Dubai, the emirate's sovereign wealth fund is targeting an initial public offering next year. It produced 2.5 million tonnes of aluminium in 2016, up 4.2 per cent from 2.4 million tonnes in 2015.
