Emirates Global Aluminium to build new $3bn Abu Dhabi refinery

Emirates Global Aluminium, the world’s fourth biggest aluminium producer, says it is building a US$3 billion alumina refinery as a boom in regional infrastructure projects spurs demand.

The company, born from the recent merger of Emirates Aluminium (Emal) and Dubai Aluminium (Dubal), is also gearing itself to profit from the shift to the metal among major car manufacturers that are seeking to improve fuel efficiency, said EGA’s chief executive Abdulla Kalban. Prices for the metal have gained almost 10 per cent this year, giving EGA more reason to expand as quickly as possible to help the country seek other forms of revenue apart from oil.

“Middle East expansion of smelters is being driven by demand from the massive infrastructure projects in the region,” Mr Kalban said at a conference in Abu Dhabi.

“In the past six years, the GCC aluminium industry has expanded substantially. Back then there were only two smelters. Dubal in the UAE and Alba in the kingdom of Bahrain, together producing about 1.9 million tonnes a year. Today, there are six smelters in the GCC region and the region’s total annual production capacity is about 5 million tonnes, all of which is operated at full capacity to meet demand – which itself is forecast to continue to grow at 5.8 per cent at the global level for the remainder of the decade.”

EGA, which accounts for almost half of the region’s production capacity at 2.4 million tonnes, is now in the final stages of the feasibility study for the alumina refinery, which began about a year-and-a- half ago, he said. The refinery is expected to be operational by 2017 and will be done in two phases, each with a capacity to produce 2 million tonnes of alumina, he added.

The alumina will be used almost exclusively to feed into the smelters at EGA, which in turn exports about 90 per cent of its final product to more than 350 customers around the world, said Mr Kalban.

Alumina or aluminium oxide, the colourless powder which when smelted produces aluminium, is refined from bauxite. EGA owns bauxite mines in Guinea. It takes about 2 tonnes of bauxite to produce 1 tonne of alumina; and approximately 2 tonnes of alumina to produce 1 tonne of aluminium, according to Dubal’s website.

While aluminium is best known in its guise as fizzy drink cans, it is also being increasingly used by car makers, who are favouring the metal in aspects of production over steel because of its lightness, which boosts vehicle fuel efficiency. Ford, one of the biggest car makers in the US, said earlier this year that it would make body panels for its ubiquitous F-150 pickup with aluminium. Other car makers, such as Japan’s Toyota, are also expected to start using more aluminium, according to Automotive News.

“We are very fortunate from the company’s point of view because we are in the business of producing value-added products,” said Mr Kalban. “We are looking at how we can increase the aluminium in the cars. We are very well positioned to take advantage of this trend.”

Nearer to home, governments in the region have embarked on massive infrastructure plans in the past couple of years. From Abu Dhabi’s new airport terminal to King Abdullah Economic City in Saudi Arabia, all will require large amounts of metal, giving regional producers a buffer against any drop in demand from large Asian clients such as China, Mr Kalban said.

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