Oman’s Sohar Aluminium attracts UAE’s EGA to deepen Gulf and global footprint

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According to six sources, the leading aluminium producer in the Middle East, Emirates Global Aluminium (EGA), is reportedly in negotiations with Oman in order to acquire a stake in competing producer Sohar Aluminium of Oman, which has an annual production capacity of about 395,000 tonnes. This is an indication of EGA’s aim to venture beyond the UAE and set cornerstones across the Middle East and the world.  

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The development aligns with EGA’s ongoing international growth strategy. The UAE-based producer, which exports nearly 90 per cent of its aluminium output, has been expanding overseas to strengthen its global footprint and move closer to downstream customers. Recently, the company announced plans to acquire an 80 per cent stake in Italy-based aluminium recycling firm Eco Green. EGA is also preparing to begin construction of a new primary aluminium smelter in the United States in partnership with Century Aluminum, marking the first such facility in the country in nearly five decades.  

Trade data indicates that Oman’s largest aluminium export destinations in 2024 included Japan, Italy, and India. Sohar Aluminium remains the country’s only operating aluminium smelter, although another large-scale green aluminium project is progressing in Duqm. The proposed facility, led by CMOC Group, is expected to have an annual production capacity of approximately 530,000 tonnes.

Sohar Aluminium currently supplies around 60 per cent of its aluminium output to domestic downstream industries, with the remaining production exported through Sohar port. The facility also relies on the same port for alumina imports used in smelting operations.

On the other hand, the Iranian drone and missile attacks at EGA’s Al Taweelah smelter compelled the company to shut down 60 per cent of its total primary aluminium production of about 2.5 million tonnes, as the facility sustained “significant damage”. It might take a considerable period of recovery unless the steady production momentum is restored, which, as per EGA’s official statement, “could take up to 12 months.”

To mitigate the immediate consequences of the blocked Strait of Hormuz trade corridor, EGA has been rerouting shipments through the Sohar port. Sources have reported that EGA plans to take over TAQA's stake in the company, which is about 40 per cent, i.e., acquiring about 158,000 tonnes annually, or 13,166 tonnes every month. This indicates an attempt to reduce EGA production deficit, which would cover around 9.87 per cent of Al Taweelah’s annual production of 1.6 million tonnes (approx.) and about 133,333 tonnes monthly.

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According to reliable market sources, EGA may acquire the stake held by Abu Dhabi National Energy Company (TAQA) in Sohar Aluminium, transferring ownership between UAE government entities. Another source indicated that EGA was also evaluating the possibility of acquiring Rio Tinto’s shareholding, while others suggested the company could pursue both stakes simultaneously. 

Referring to the UAE government’s financial capacity, one source remarked that “They have deep pockets”. It was further noted that EGA is unlikely to pursue another smelter project within the UAE due to environmental considerations and the increasing challenge of securing additional power supply. 

However, sources indicated that the Omani government may resist allowing Emirati entities to secure majority control of Sohar Aluminium. As a result, Oman’s state-owned energy group OQ could potentially increase its stake in the smelter. Neither the spokespersons for EGA and Rio Tinto nor Sohar Aluminium and TAQA commented on the matter.

Even if Oman is willing to give up its stake to the UAE, the deficit would remain until the Al Taweelah facility is operational. The stake from Sohar might be an additional boost to fill the present gaps and pick up the pace on primary aluminium production and export.

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