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Emirates Global Aluminium, the UAE’s largest industrial company outside the oil and gas sector, has signed an agreement to licence its technology to Indonesia’s state aluminium company for a smelter expansion project.
The agreement also gives EGA rights to take a minority stake in PT Indonesia Asahan Aluminium’s (Inalum) Kuala Tanjung smelter and purchase “much” of the produced metal, the company said on Wednesday.
“EGA’s requirement for an investment or metal offtake is that the project uses renewable power,” it said.
The existing aluminium smelter uses electricity generated with hydropower. Once completed, the project in north Sumatra will have a capacity of more than 400,000 tonnes of aluminium per year, depending on the results of a feasibility study, according to EGA.
“A potential investment in the Kuala Tanjung brownfield expansion, and the offtake of metal, would progress our growth in low carbon aluminium,” Abdulnasser bin Kalban, chief executive of EGA, said.
“This agreement is an important step forward in our co-operation with Inalum and brings us closer to the deployment of our UAE-developed technology in Indonesia.”
Under the agreement, EGA will have the exclusive right to license its DX+ Ultra smelting technology to Inalum on a commercial basis.
The UAE is the fifth-largest aluminium producing country in the world. EGA’s aluminium is the biggest made-in-the-UAE export after oil and gas and is shipped to more than 50 countries.
EGA has developed its own aluminium smelting technology in the UAE for more than 25 years. The company has used its technology in every smelter expansion since the 1990s and has retrofitted all of its older production lines.
EGA's agreement with Indonesia follows similar pacts with other countries.
In 2016, EGA became the first UAE industrial company to licence its core process technology internationally, in a deal with Aluminium Bahrain (Alba). Alba’s Potline 6, built using EGA’s technology, began production in 2018.
In 2020, EGA signed an agreement with NEO Aluminio Colombia that could lead to the export of the company's technology for the development of the South American country’s first aluminium production facility.
“This agreement confirms that EGA is our chosen partner for the brownfield expansion of Kuala Tanjung, based on the efficiency of EGA’s smelting technology and experience transferring it internationally,” said Hendi Santoso, president director of Inalum.
“We look forward to the successful conclusion of the bankable feasibility study as the next step before we begin construction.”
EGA and Inalum first signed an agreement in 2020. The expansion work aims to boost production by about 20,000 tonnes per year, or about 10 per cent.
Design work for a pilot section of the project has been completed, EGA said.
Earlier this week, EGA said it hit a production milestone of 40 million tonnes of hot metal made since its inception in 1979.
EGA, which is jointly owned by Abu Dhabi’s strategic investment arm, Mubadala Investment Company, and the Investment Corporation of Dubai, operates aluminium smelters in Jebel Ali and Al Taweelah, a refinery in Al Taweelah and a bauxite mine and associated export facilities in Guinea.
In 2021, EGA became the first company in the world to make aluminium commercially using solar power. It produces approximately 40,000 tonnes of green aluminium, called CelestiAL, which is supplied to German car manufacturer BMW.