Dubai Aluminium Co Ltd (Dubal), which operates one of the world's largest single site smelters, signed two deals with Canada's Global Alumina to ensure long-term alumina supplies and the initial tranche of its subscription for equity investment.
The first deal relates to the long-term offtake agreement for 40 per cent of the annual production of alumina from Global Alumina's wholly-owned subsidiary, Guinea Alumina Corporation SA. A proposed refinery is expected to go on stream in late 2008.
The second deal represents Dubal's initial tranche of $20 million of an estimated $200 million equity investment in Global Alumina.
An announcement on the Dubal-Global Alumina subscription agreement was announced in August. Global Alumina earlier obtained shareholder approval for a proposed $200 million share issuance to Dubal.
Abdullah Kalban, Dubal's chief executive, said: "The long-term offtake agreement and the initial tranche for equity investment are indications that Dubal keeps its eyes firmly on diverse growth strategy.
"While the supply deal will ensure Dubal sticks to its capacity expansion schedules, the equity investment will entrench us as a key player in the global expansion drive."
Bruce Wrobel, chairman and chief executive of Global Alumina, said: "Dubal's investment and long-term commitment to purchase 40 per cent of the output of Global Alumina's initial 2.8 million tonne per year alumina refinery represents both a significant milestone in our strategic plan and a solid foundation on which to grow."
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