The first primary aluminium producer of Oman, Sohar Aluminium, jointly owned by OQ Group, Abu Dhabi National Energy Company PJSC - TAQA and Rio Tinto Alcan stated it has closed the financial book of pandemic stressed 2020 with “positive bottom-line results” amid a collapse in global aluminium prices on the London Metal Exchange (LME) in 2020.
The world-scale aluminium smelter in Sohar described 2020 as an “abnormal year” that sent aluminium prices on the LME tumbling to below $1500 per tonne during Q2 2020.
The company stated in its 2020 Sustainability report: “Despite difficult market situations, SA concluded the year with positive financial results above Business Plan supported by lower cost of production coupled with an increase in production volume.”
SA specified this measure it adopted to reduce pressure on its cash flow in the stir of the price collapse.
“The Company had urgently taken several measures to keep cash-flow positive. Capex budget was reduced by 35 per cent with a proper risk assessment and rescheduling.”
“Controllable costs had been reviewed deeply and made significant budget cuts that touched all areas carefully without impacting safety and quality. The measures which had been taken have proven their effectiveness on the financial performance. The company had positive bottom-line results and met all financial commitments.”
However, the challenges caused by the strained global economic environment, Sohar Aluminium reported record aluminium production in 2020. The smelter’s hot metal production soared to 396,929 tonnes, a rise of 1.64% from the previous year’s tally of 390,516 tonnes. Metal purity also reached the highest level in its history at 593.08 ppm of Fe/ tonne of metal.
Said Al Masoudi, CEO, Sohar Aluminium while commenting on the metal company’s overall performance for 2020, said: “Through 2020, and despite the challenges posed by Covid-19 pandemic, both our operational and non-operational performances have witnessed steadily increasing improvements. For instance, in the health and safety pillars, we closed the year with the lowest injury rate and the lowest number of Significant Potential Incidents (SPIs) in our history. Also, 37% of our 396,929 tonnes of primary aluminium that were produced in 2020 were delivered to our local downstream customers.”
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