Dh8b smelter plant planned in Abu Dhabi

ABU DHABI — The General Holding Corporation (GHC), an industrial arm of the Government of Abu Dhabi, yesterday signed an agreement with Australia's Rio Tinto's Aluminium Product Group, to undertake detailed studies to construct the world's biggest aluminium smelter plant in Abu Dhabi costing Dh8 billion.

By Haseeb Haider

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Published: Wed 28 Jun 2006, 11:10 AM

Last updated: Sat 4 Apr 2015, 1:14 PM

Under the agreement Comalco Aluminium Limited, Rio Tinto's operating company, will conduct the studies for the Dh8 billion new smelter plant with a capacity to manufacture between 550,000 and 600,000 tonnes per annum which will reach two million tonnes per annum at the final stage.

The agreement was signed by Shaikh Hamed bin Zayed Al Nahyan, Chairman of the Department of Planning and Economy and Chairman of GHC, and Sandeep Biswas, Comalco Smelting's Managing Director. Shaikh Hamed is on a visit to Australia at the invitation of Rio Tinto's, a world leader in mining and processing the earth minerals, including aluminium.

During his visit, Shaikh Hamed held talks with the Australian officials on ways to enhance bilateral, economic and trade relations.

Rio Tinto Plc. (RTP) said it may build an aluminium smelter in the UAE, which would be the company's biggest and could cost up to $2.45 billion, according to Dow Jones. The company's biggest smelter is at Boyne Island in Queensland, which produces about 545,000 tonnes a year. Recent smelters approved around the world have had development costs of about $3,500 a tonne capacity. That would bring development costs of the proposed Abu Dhabi plant to between $1.93 billion and $2.45 billion. Middle East's aluminium capacity is expected to grow to 5.5 million tonnes a year by 2010, up from 1.7 million tonnes last year.

The planned smelters include what would be the world's biggest, at 1.2 million tonnes a year in Abu Dhabi, which is being studied by state-owned Dubai Aluminium and Mubadala Development.

The smelter will be supplied with alumina from the Comalco refinery, where about 500,000 tonnes a year of alumina is currently being sold on the spot market.

Alumina, which is made from bauxite at refineries, is converted to aluminium in smelters.

Aluminium is mainly used in cars and packaging. Rio Tinto's spokesman said the Middle East was chosen because of its reliable natural gas supply which could power the plant. He declined to comment on prices of gas or power in the region. The study of the smelter is likely to finish in 2007, when potential costs should be known. Rio's decision to launch the plant comes three months after the company said it would reduce capacity at its Bluff smelter in New Zealand.

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