Gulf aluminium industry poised to become a primary production powerhouse

The Gulf aluminium industry is poised to become a primary production powerhouse of the metal following a $55 billion investment in new smelters and existing projects to boost the output capacity.

According to major industry players, the UAE remains on front with $22 billion investment in its aluminium industry followed by Saudi Arabia (over $17 billion), Kuwait ($7 billion) and Qatar ($5.7 billion). They said four of the top 10 primary aluminium producers in the world will be from the Gulf region and they will be accounting for about 15 per cent of the total world production by 2014.

Major groups in Saudi Arabia and UAE are executing multi-billion dollars projects that will increase aluminium output from three million metric tonnes to five million metric tonnes by next year. Saudi Arabia’s $10.8 billion Ma’aden project and the $4.5 billion phase-two expansion of Emirates Aluminium, or Emal, will impetus the growth in the region’s industry.

“The ‘Big Five’ Gulf smelters — Alba, Dubal, Emal, Sohar and Qatalum — recorded significant developments and achievements in recent past. With 3.6 million tonnes of aluminium produced in 2011, Gulf production is expected to increase to five million tonnes by the end of 2014, upon completion of Emal phase two expansion and other Gulf smelter projects,” Saeed Fadhel Al Mazrooei, Emal president and chief executive, said.

He said almost 80 per cent of the aluminium produced in the Gulf is exported to different parts of the world, firmly placing the Gulf in a prominent position to meet both local and global demand.

Frost & Sullivan said aluminium production in the GCC is expected to grow significantly in the short to medium term. The region is expected to contribute around 15 per cent of the total global production of aluminium by 2015.

“The UAE aluminium capacity is expanding further with Emal’s second phase expansion plans to raise its total annual output to 1.3 million metric tonnes. Frost & Sullivan expects this to drive the growth of exports in the near future.”

Aluminium exports from the UAE had shown a year-on-year increase of 102 per cent in the first half of 2012. Aluminium exports are expected to be robust in the future as well thereby becoming one of the key non-oil industry sector in the UAE.

A number of new aluminium smelters and manufacturing companies were established in Saudi Arabia, UAE and other countries to drive growth and establish the region as a major player in the global aluminium industry.

“Emal is increasing production to 1.3 metric million tonnes by 2014 upon completion of phase two, making Emal one of the largest industrial projects in the UAE [outside oil and gas] and one of the key projects contributing to the diversification of the UAE’s economy,” Al Mazrooei said.

Dubai Aluminium, also known as Dubal, owns and operates one million metric tonne per annum primary aluminium smelter at Jebel Ali, one of the largest single-site operations of its kind in the world. Aluminium Bahrain, also known as Alba, is also undertaking a feasibility study with a view to expanding capacity by adding a sixth potline. The project may cost up to $2.8 billion.

In Qatar, Qatalum’s potlines are producing approximately 600,000 tonnes annually, 15,000 thousand tonnes above their average capacity since full production began in September 2011. Oman’s Sohar project is able to produce 370,000 tonnes aluminium per annum.