17 November 2008
Even as a global economic slowdown threatens to erode demand for commodities in the coming months (possibly years), Arab aluminium producers are looking for a long term and brighter future.
Several expansion plants of aluminium companies across the region are expected to be complete in 2010; and, apart from some minor hiccups, no announcements have yet come that they will be shelved. The timing of completion of these projects, in fact, sounds auspicious, considering a global economic turnaround is expected in mid-2010.
Supported with cheap energy prices, GCC countries are leading the Arab region in aluminium production.
The region as per estimates would produce 10 percent of the world's production by 2010. This share would rise to 20 per cent by 2020; and taking a rather long shot, GCC would be the largest producer of aluminium in the world by 2050. Investments in the sector will double from that in 2002 and reach $8billion (Dh29.3bn) by 2010. The statistics would look better if the targets of Egypt and Morocco for 2010 are appended to these figures.
Arab producers refuse the claim that cheap energy prices alone are propelling their industries.
"It's not just the cheap prices. It's a range of factors that have put us in a comfortable position. There is a clear strategic trend in the region to become an international financial centre having a diversified economy with several pillars such as manufacturing and industry," said Mohammed Al Naki the Chairman of Arabal (Arab Aluminium) Executive Committee. Arabal is a 25 year old organisation of Arab aluminium producers. The Gulf states within the organisation have now set up a Gulf Aluminium Council to "have bigger say in the international markets".
Currently, there are just two smelters in the Gulf. Dubai Aluminum (Dubal) which produces 900,000 tonnes of aluminium a year and Aluminium Bahrain (Alba) with a capacity of 860,000 tonnes.
Eleven smelters that are currently either under construction or are in the planning stage are expected to be operational by 2012.
GCC Aluminium producers have been watching their steps in view of the financial crisis and an expected reduction of demand.
Abdulla J.M. Kalban the CEO of Dubal said recently that none of the company's expansion projects - either alone or in a joint venture - will be shelved or delayed.
"Our list of 300 customers spread across the world remains intact," he said.
On the other hand, Saudi Arabia's state mining company Maaden had recently said that it will review a $10.5 bn aluminium project in the wake of a deepening financial crisis.
Production at the aluminium project in Saudi Arabia - claimed as the world's largest fully integrated mine-to-metal project is scheduled to begin in 2012. No further announcements in this regard have come so far.
Minerals that feed these GCC plants primarily come from Australia and Africa. An eagerness has emerged at a pan-Arab level to exploit resources closer home.
"We have been trying to use the bauxite reserves in Sudan and Morocco. And, if possible, set up industries in these countries. Saudi Arabia will also exploit its bauxite reserves located to its North East," Al Naki said.
The Arabal executive committee chairman said that initiatives to exploit reserves in Sudan were first take eight years ago.
"Unfortunately the situation has not been stable in Sudan so far," he added.
Al Naki said that the "consumption" of the products remain the only challenge to the Arab [and GCC] aluminium produce. "Marketing is an important for out success," he said.
Dubal
Dubal is ranked as the seventh largest producer of primary aluminium in the world. It currently ranks as the largest single-site aluminium smelter complex in the Western world and is also the single largest non-oil contributor to the economy of Dubai. It plans to enhance its production capacity to one million tonnes a year by the end of 2008.
Emal
Emal is a joint venture between the Dubal and Mudabala Development Company and was established in February 2007 to construct what will become the world's largest single-site aluminium smelter complex.
The project will be built in two phases, and people behind the project claim that it will use "Emirati developed technology".
At the end of phase one in 2010, EMAL will produce 700,000 tonnes of aluminum per annum and 1.4 million tonnes annually at the end of phase two.
Alba
Alba is the first aluminium smelter in the Middle East. It has started as a modest smelter with not more than 120,000 metric tonnes per annum. After the expansion projects that were implemented over the past decades, Alba's production capacity increased up to 870,000 metric tonnes per annum. Alba fuels a thriving downstream industry in Bahrain by exporting more than 45 per cent of its production to the local downstream companies. Thus it contributes to nearly 12 per cent of Bahrain's GDP.
Qatalum
When it begins full scale operation in 2010, it will be the world's largest primary aluminium plant ever built in one step. The plant will have a capacity in the first phase of 585,000 tonnes of primary aluminium, all to be shipped as value added aluminium cathouse products.
Production at the plant is to begin in 2009. Full production, as per the plant's capacity, is to begin in 2010. The Qatalum plant located in industrial city is a fifty-fifty joint venture between Qatar Petroleum and Hydro.
While most of the GCC plants produce primary aluminium products, Qatalum is designed to produce "value added aluminium casthouse products".
Sohar
Sohar Aluminium Company was formed in September 2004 to undertake a $ 2.4bn Greenfield Aluminium smelter project in Oman.
The company began operating its aluminium smelter in June and is expected to reach full capacity by December this year.
Ma'Aden's plan
Saudi Arabia's mining company Ma'aden along with Rio Tinto Alcan plans a $10.5 billion (Dh38.5bn) "mineral-to-metal" aluminium project.
The project is worth $10.5 bn and will produce 1.4 million tonnes of alumina a year and 650,000 tonnes of aluminium. Production was slated to begin in 2012, however, the project is being reviewed in the wake of financial crisis and a slowdown in demand.
In Egypt by end of 2010, the annual capacity of the Egyptalum smelter will increase to 320,000 tonnes from the current 181,000 tonnes.
Even as a global economic slowdown threatens to erode demand for commodities in the coming months (possibly years), Arab aluminium producers are looking for a long term and brighter future.
Several expansion plants of aluminium companies across the region are expected to be complete in 2010; and, apart from some minor hiccups, no announcements have yet come that they will be shelved. The timing of completion of these projects, in fact, sounds auspicious, considering a global economic turnaround is expected in mid-2010.
Supported with cheap energy prices, GCC countries are leading the Arab region in aluminium production.
The region as per estimates would produce 10 percent of the world's production by 2010. This share would rise to 20 per cent by 2020; and taking a rather long shot, GCC would be the largest producer of aluminium in the world by 2050. Investments in the sector will double from that in 2002 and reach $8billion (Dh29.3bn) by 2010. The statistics would look better if the targets of Egypt and Morocco for 2010 are appended to these figures.
Arab producers refuse the claim that cheap energy prices alone are propelling their industries.
"It's not just the cheap prices. It's a range of factors that have put us in a comfortable position. There is a clear strategic trend in the region to become an international financial centre having a diversified economy with several pillars such as manufacturing and industry," said Mohammed Al Naki the Chairman of Arabal (Arab Aluminium) Executive Committee. Arabal is a 25 year old organisation of Arab aluminium producers. The Gulf states within the organisation have now set up a Gulf Aluminium Council to "have bigger say in the international markets".
Currently, there are just two smelters in the Gulf. Dubai Aluminum (Dubal) which produces 900,000 tonnes of aluminium a year and Aluminium Bahrain (Alba) with a capacity of 860,000 tonnes.
Eleven smelters that are currently either under construction or are in the planning stage are expected to be operational by 2012.
GCC Aluminium producers have been watching their steps in view of the financial crisis and an expected reduction of demand.
Abdulla J.M. Kalban the CEO of Dubal said recently that none of the company's expansion projects - either alone or in a joint venture - will be shelved or delayed.
"Our list of 300 customers spread across the world remains intact," he said.
On the other hand, Saudi Arabia's state mining company Maaden had recently said that it will review a $10.5 bn aluminium project in the wake of a deepening financial crisis.
Production at the aluminium project in Saudi Arabia - claimed as the world's largest fully integrated mine-to-metal project is scheduled to begin in 2012. No further announcements in this regard have come so far.
Minerals that feed these GCC plants primarily come from Australia and Africa. An eagerness has emerged at a pan-Arab level to exploit resources closer home.
"We have been trying to use the bauxite reserves in Sudan and Morocco. And, if possible, set up industries in these countries. Saudi Arabia will also exploit its bauxite reserves located to its North East," Al Naki said.
The Arabal executive committee chairman said that initiatives to exploit reserves in Sudan were first take eight years ago.
"Unfortunately the situation has not been stable in Sudan so far," he added.
Al Naki said that the "consumption" of the products remain the only challenge to the Arab [and GCC] aluminium produce. "Marketing is an important for out success," he said.
Dubal
Dubal is ranked as the seventh largest producer of primary aluminium in the world. It currently ranks as the largest single-site aluminium smelter complex in the Western world and is also the single largest non-oil contributor to the economy of Dubai. It plans to enhance its production capacity to one million tonnes a year by the end of 2008.
Emal
Emal is a joint venture between the Dubal and Mudabala Development Company and was established in February 2007 to construct what will become the world's largest single-site aluminium smelter complex.
The project will be built in two phases, and people behind the project claim that it will use "Emirati developed technology".
At the end of phase one in 2010, EMAL will produce 700,000 tonnes of aluminum per annum and 1.4 million tonnes annually at the end of phase two.
Alba
Alba is the first aluminium smelter in the Middle East. It has started as a modest smelter with not more than 120,000 metric tonnes per annum. After the expansion projects that were implemented over the past decades, Alba's production capacity increased up to 870,000 metric tonnes per annum. Alba fuels a thriving downstream industry in Bahrain by exporting more than 45 per cent of its production to the local downstream companies. Thus it contributes to nearly 12 per cent of Bahrain's GDP.
Qatalum
When it begins full scale operation in 2010, it will be the world's largest primary aluminium plant ever built in one step. The plant will have a capacity in the first phase of 585,000 tonnes of primary aluminium, all to be shipped as value added aluminium cathouse products.
Production at the plant is to begin in 2009. Full production, as per the plant's capacity, is to begin in 2010. The Qatalum plant located in industrial city is a fifty-fifty joint venture between Qatar Petroleum and Hydro.
While most of the GCC plants produce primary aluminium products, Qatalum is designed to produce "value added aluminium casthouse products".
Sohar
Sohar Aluminium Company was formed in September 2004 to undertake a $ 2.4bn Greenfield Aluminium smelter project in Oman.
The company began operating its aluminium smelter in June and is expected to reach full capacity by December this year.
Ma'Aden's plan
Saudi Arabia's mining company Ma'aden along with Rio Tinto Alcan plans a $10.5 billion (Dh38.5bn) "mineral-to-metal" aluminium project.
The project is worth $10.5 bn and will produce 1.4 million tonnes of alumina a year and 650,000 tonnes of aluminium. Production was slated to begin in 2012, however, the project is being reviewed in the wake of financial crisis and a slowdown in demand.
In Egypt by end of 2010, the annual capacity of the Egyptalum smelter will increase to 320,000 tonnes from the current 181,000 tonnes.
By Shashank Shekhar
© Emirates Business 24/7 2008
