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$5bn smelter plan for Economic City

By Parag Deulgaonkar

Saudi Arabia is set to become a major aluminium producer in the region after Emal International, the joint venture of Mubadala Development Company and Dubai Aluminium Company (Dubai), announced plans to set up a greenfield smelter complex in King Abdullah Economic City at the cost of $5 billion (Dh18.35bn).

The proposed smelter will have a production capacity of 700,000 metric tonnes per annum, with the potential to double the production capacity. “The feasibility and environmental study has started and will be completed in 12 to 15 months. Commercial production will take place in 33 months from the date of construction of the smelter,” an Emal International spokesperson told Emirates Business.

The company yesterday signed a memorandum of understanding with Saudi Arabian General Investment Authority (Sagia) and Emaar, The Economic City (Emaar EC) for the project.

The new venture will initially create more than 2,500 direct and 5,000 indirect jobs. It will feature Dubal’s proprietary smelter technology and will leverage the company’s project management skills, operational efficiency and global market position. It will benefit from Mubadala’s expertise in structuring and financing multi-billion-dollar projects, as well as Dubal’s industry knowledge and practices in the areas of health, safety and environment.

“We are continuously looking to grow and seeking opportunity not only in the Gulf or the Middle East and North Africa region but anywhere in the world,” said the spokesperson.

The project will boost Emaar EC’s drive to develop industrial zones within the King Abdullah Economic City, ultimately attracting downstream investments in the aluminium industry, and resulting in job creation and gross domestic product growth in Saudi Arabia.

Emaar EC has indicated its willingness to identify a four square kilometre site within the industrial zone of King Abdullah Economic City, which is not only suitable for the development of the smelter, but also offers good access to suitable deep water port, utilities and all road transport links.

“Dubal’s involvement in this project is extremely gratifying, as it pays tribute to the wealth of experience and advanced technologies developed by our company over the past 28 years of so,” said Dubal Chief Executive Officer Abdulla Kalban.

The world will require a smelter of the size of Emal every year for at least another decade, Duncan Hedditch, Chief Executive Officer, Emirates Aluminium (Emal), had told Emirates Business.

“Each year we need to bring in another smelter about the size we are building here. So over the next decade, we will require a project of this size every year in the world.”

Emal is developing an aluminium smelter of 1.4 million capacity at the Khalifa Port and Industrial Zone in Abu Dhabi’s Taweelah.

The first phase will have a production capacity of 700,000 tonnes per year and will become operational by April 2010.