Emal set to generate $2bn in sales yearly - Emirates24|7

Emal set to generate $2bn in sales yearly

Duncan Hedditch, CEO of Emal. (SUPPLIED)


Emirates Aluminium's (Emal) giant smelter in Abu Dhabi will generate $2 billion (Dh7.34bn) every year once the plant begins full operations by the end of 2010, the company's chief said.

The joint venture between Abu Dhabi Government's investment arm, Mubadala, and government controlled Dubai Aluminium (Dubal) is scheduled to produce 700,000 tonnes of aluminium per year, which will be increased to 1.4m tonnes in the second phase.

Based on the current price of $2,800 per tonne, revenue is expected to double up to $4bn by the end of the second phase. By that time, it will also be the world's largest, single site aluminium production facility.

Duncan Hedditch, Emal's CEO, told Emirates Business on Wednesday work on the second phase may begin in as soon as three years. "It is not decided yet, but we are seriously looking at the best time, probably, earliest by 2011," Hedditch said.

The first phase, which is expected to be finished in 2010, includes two potlines, a 2,000 MW power plant, an anode manufacturing plant and a production cast house. It will have an initial production of 220,000 tonnes.

Hedditch ruled out any potential delays, saying Emal had already done a lot of work upfront and had secured hard to purchase equipment such as cathodes, cranes and cables. "This project is going very well and so far there has been no nasty surprises. We have no reason at the moment to think that we will be delayed," Hedditch said, adding the company has a very conservative budget and that they have already committed $2.5bn or almost half of the total earmarked investment.

Emal has tied up for long-term gas supply contract with Abu Dhabi. While Hedditch declined to comment on the amount and price, he said: "We have secured, in one contract, all the volume that we need in the two phases of the project for 30 years from the start of operations. The physical supply is coming from Abu Dhabi, but the particular party is still not yet resolved."

Asked whether the project can be affected by the regional gas squeeze, he said: "We are not concerned. We are comfortable that we'll be able to operate smoothly." Aluminium smelters typically operate for 50 years and require a significant amount of energy. Emal is currently building a self-reliant power plant that has a 2,000MW capacity and would be able to produce two million gallons of water per day.

"The plant is designed to run self sufficiently for the entire operations without relying on any outside source of electricity," Hedditch said, adding the plant will be powered solely by gas, but will have diesel back-up generators in case of interruption.

According to Yousuf Bastaki, Emal project director, gas will be available in July 2009, the first power will be generated in October 2009 and the first metal would be produced by mid-2010.

Bastaki said a $550m contract has already been awarded to GE, while another $550m will be invested for the installation.

Figures from ProLeads found Emal is investing $5bn on the smelter, $500m on power, $150m on the anode plant and $33m on high voltage cables, all of which are under the execution phase.