Abdullah Kalban, CEO of Dubal, said the project would bring tremendous benefits to Guinea's economy. It will create more employment opportunities and enhance the quality of life in the community of Kamsar, where the project will be built.
In a Press statement, Dubal, whose annual production of aluminium products will reach 920,000 metric tonnes by end-2008, announced its substantial investment in Guinea Alumina Corporation Limited (GAC), a wholly-owned subsidiary of Global Alumina International Limited (GAI).
The other parties to the joint project are Broken Hill Proprietary Company Pty Limited (BHP Billiton) and Mubadala Development Company PJSC (Mubadala).
"We are delighted to join hands with such reputed and experienced players," Kalban said. "The Guinea project is a key element of Dubal's global growth strategy and its vision to be among the top five aluminium producers in the world by 2015."
Under the agreement, Dubal will own a 25-per cent stake in GAC while GAI and BHP will each hold 33.33 per cent and, Mubadala, 8.33 per cent. It was also agreed that Dubal will at the same time enter into a long-term purchase and sale agreement with GAC regarding the alumina to be produced at Sangaredi.
In a Press conference, Bruce Wrobel, co-chairman and CEO of Global Alumina International Ltd (GAI), said the $2 billion of the $3 billion project would be sourced from lateral and multi-lateral financial institutions and won't be needed until the end of this year, when construction of the project starts.
"With this joint venture, we hope that we'd be more attractive in terms of pricing and financing," he said, adding that the lenders are reviewing the recent changes in the project design.
Wrobel said the joint project would have the initial capacity to produce three million tonnes (mt) of alumina per year, and which could later on be increased to five mt, and then to 10 mt.
Officials of the companies expressed confidence in Guinea, whose government is headed by its Prime Minister.
"It is pretty stable," said Karim Karjian, co-chairman of Global Alumina. He noted that officials of Guinea's new government vowed a "100 per cent support" for the Sangaredi Refinery Project that would begin producing alumina in 2009 to 2010, after the construction period.
Headquartered in New Brunswick and with administrative offices in New York, London, Montreal and Conakry (Guinea), GAI is set to be one of the few companies dedicated to producing and selling alumina. BHP is the world's sixth largest producer of primary aluminium while Mubadala is a principal investment company owned by the Government of Abu Dhabi.
BHP has an annual production capacity of one million tonnes of aluminium, some 14 million tonnes of bauxite, and four million tonnes of alumina.
Dubal said Guinea is known to have some one-third of the world's bauxite reserves. It added that the Sangaredi project would assure Dubal of a long-term access to low-cost alumina.
Bauxite is an ore needed to produce alumina, a chemical compound of aluminium and oxygen.
Dubal added that the project would include a mine facility with the capacity of extracting nine million metric tonnes of bauxite per year. And with its 690-squre kilometre mining concession, the Sangaredi Refinery Project is assured of bauxite reserves of some one billion tonnes.
The study takes into account premium office rents of Dubai International Financial Centre (DIFC) and Abu Dhabi Global Markets (ADGM)
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