Gulf States aim high in aluminium market

The big story in regional aluminium production is the commencement of operations of the joint venture between Saudi Arabian Mining Company and US market leader Aluminium Company of America (Alcoa) in December 2012. This is the sixth smelter to come into operation in the GCC region. Ma’aden President and CEO Khalid al-Mudaifer said, “Today we see the first aluminium produced in Saudi Arabia, and the launch of a new industry.”

The plant will be located at Ras al-Khair in Eastern Province. The Saudi aluminium joint venture is owned 74.9 per cent by Ma’aden, with the rest held by Alcoa. The smelter will have an initial annual capacity of 740,000 metric tonnes per annum (mtpa), and will also feature a bauxite mine with an initial capacity of four million mtpa, and an alumina refinery with an initial capacity of 1.8 million mtpa.

The five other smelters of the GCC produced almost 3.75 million tonnes of aluminium last year, or about nine per cent of global production, the Gulf Aluminium Council. Dubai Aluminium (Dubal) remains the region’s largest producer, although the plans of Emirates Aluminium (Emal) to bring capacity up to 1.3 million mtpa in 2014 will make it the largest single-site production line in the world.

The Gulf’s quest to become the world’s leading aluminium production region is on track, says Saeed Al Tayer, vice chairman of Dubal and managing director of Dubai Electricity and Water Authority, speaking as he inaugurated the Aluminium Middle East 2013 event at Dubai World Trade Centre.

Emirates Aluminium (Emal) began operations in 2009 and by 2012 was producing 800,000 tonnes a year, expected to rise to 1.3 million mtpa in 2014, when a second line becomes operational. On completion, Emal will become the largest greenfield, single-site aluminium smelter in the world, says Salman Abdulla, Emal’s vice president of operations.

At the event, Cast Aluminium Industries (CAI), a UAE-based midstream aluminium producer and recycler announced that it had become the latest investor at Kizad. It specialises in aluminium dross recycling and other aluminium-related waste materials produced by aluminium smelters. Aluminium is one of 10 industrial clusters planned at the free zone.

“The GCC is not the world’s biggest aluminium producer,” he says. “We are big player, but Rusal Alcoa… they are big boys. On a global scale, we are very small. What we are proud of is that this is a new frontier. We are in no way in competition with those [players],” says Abdulla.

Emal is not the only company in the GCC in expansionary mode. Qatalum, a 50-50 joint venture between Qatar Petroleum and Hydro Aluminium of Norway is also looking to the future.

GCC has a long way to go to become the world’s largest producing region by volume, as in 2012, China, with over five times the GCC’s output, North America and East and Central Europe all had higher production levels last year.