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Aluminium Bahrain BSC will spend US $2.5 billion by 2015
Edited by : AL CIRCLE
3 min read
Bloomberg reported that Aluminium Bahrain BSC will spend USD 2.5 billion by 2015 to increase output betting prices of the metal and will rebound from 30% slump in the past year that’s forcing US and European rivals to shutter plants.
Mr Laurent Schmitt CEO of Alba said that “Prices reflect the balance of supply and demand in the short term but they will come back to normal. Alba, as the company is known, plans to invest the money on adding a potline to produce 400K tonnes a year boosting total capacity by about 30% to 1.3 million tonnes. It will also include power generation for the development. The producer is seeking to begin a feasibility study before the end of the year and is in discussions with the Bahraini government over allocating energy to the development.”
Alba is among Middle East producers able to rely on cheap energy to buck a global trend of shrinking output of the metal. Emirates Aluminium Company plans to invest USD 4.6 billion to expand its capacity to 1.4 million tonnes a year by 2014 while Saudi Arabian Mining Company’s USD 10.8 billion venture with Alcoa Inc includes building 740K tonne per year smelter by 2013.
Mr Schmitt, who worked for 15 years at Pechiney SA a French aluminum producer said that the Gulf isn’t losing its advantage in terms of low cost energy even as US gas prices fall. Aluminum prices have declined 30% from a high of USD 2,803 per tonne on May 3rd 2011 to as low as USD 1,973.75 in London trading as world economic growth weakens.
He said that prices in the Q2 will be low. USD 2,500 per tonne would reflect the long-term supply and demand balance and the value of this material. Falling US gas prices after the development of shale gas technology that boosts output have cut energy costs for some smelters. Mr Schmitt who says Alba’s production costs put it among the lowest quartile of aluminum companies, sees US gas prices rising to USD 5.5 in 2015. In comparison, Bahrain increased natural gas prices to USD 2.25 this year from USD 1.50 a unit.
He said that Alba’s funding plan is similar to prior expansions, mostly using bank loans and export credit agencies. Half of its output is used by Bahrain’s downstream industry. It plans some sort of upstream integration in the long term by investing in bauxite mines or alumina refining.
Mr Laurent Schmitt CEO of Alba said that “Prices reflect the balance of supply and demand in the short term but they will come back to normal. Alba, as the company is known, plans to invest the money on adding a potline to produce 400K tonnes a year boosting total capacity by about 30% to 1.3 million tonnes. It will also include power generation for the development. The producer is seeking to begin a feasibility study before the end of the year and is in discussions with the Bahraini government over allocating energy to the development.”
Alba is among Middle East producers able to rely on cheap energy to buck a global trend of shrinking output of the metal. Emirates Aluminium Company plans to invest USD 4.6 billion to expand its capacity to 1.4 million tonnes a year by 2014 while Saudi Arabian Mining Company’s USD 10.8 billion venture with Alcoa Inc includes building 740K tonne per year smelter by 2013.
Mr Schmitt, who worked for 15 years at Pechiney SA a French aluminum producer said that the Gulf isn’t losing its advantage in terms of low cost energy even as US gas prices fall. Aluminum prices have declined 30% from a high of USD 2,803 per tonne on May 3rd 2011 to as low as USD 1,973.75 in London trading as world economic growth weakens.
He said that prices in the Q2 will be low. USD 2,500 per tonne would reflect the long-term supply and demand balance and the value of this material. Falling US gas prices after the development of shale gas technology that boosts output have cut energy costs for some smelters. Mr Schmitt who says Alba’s production costs put it among the lowest quartile of aluminum companies, sees US gas prices rising to USD 5.5 in 2015. In comparison, Bahrain increased natural gas prices to USD 2.25 this year from USD 1.50 a unit.
He said that Alba’s funding plan is similar to prior expansions, mostly using bank loans and export credit agencies. Half of its output is used by Bahrain’s downstream industry. It plans some sort of upstream integration in the long term by investing in bauxite mines or alumina refining.
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