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Emal plans further expansion
Emirates Aluminium to keep pace with the growing market.
May 8, 2013 4:06 by Reuters
Emirates Aluminium (Emal), a joint venture between Abu Dhabi investment fund Mubadala and Dubai Aluminium, is planning a further smelter expansion for around 2017, its CEO said.
The group is on track to complete its $4 billion phase two by the end of 2014, when it capacity will rise to 1.3 million tonnes from the current 800,000 tonnes a year, making it one of the largest single-site smelters in the world.
The global aluminium industry is already facing a massive stock overhang, which is growing each month as smelters produce more than the world economy needs.
“Emal is still planning to build further capacity, however, as it expects demand for aluminium to rise from 46 million tonnes to 60 million tonnes by 2015,” Emal chief executive, Saeed al-Mazrooei, told reporters during a visit on Tuesday to the smelter complex sited between Abu Dhabi and Dubai.
“The international market is growing for aluminium in many countries – China, India, Brazil, the United States. This demands us to grow,” he added.
Asked if a third phase could be launched around 2017, Mazrooei said he hoped so, adding that the company’s state-backed owners would unveil details later. He declined to elaborate on the investment outlay or production capacity.
The majority of Emal’s production is exported to the US, Europe, southeast Asia and the Middle East. Only approximately 200,000 tonnes is consumed locally, he said.
Emal, which burns vast quantities of natural gas to make the electricity it needs in order to operate the energy-intensive aluminium industry, has secured supplies for phase one and two from Abu Dhabi National Oil Co (ADNOC), Mazrooei said.
Cheap gas supplied to state-linked industry has driven a boom of energy-intensive development in the United Arab Emirates over the last decade which, combined with rapid immigration, has turned the UAE from a gas exporter into a net gas importer.
As there is not enough gas to go around, Dubai, which owns half of Emal, has to import increasing volumes of expensive liquefied natural gas (LNG) from around the world to meet demand for electricity.