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The Gulf countries are pushing ahead with mega projects that will turn them into a global aluminium industrial hub in the next few years.
The six Gulf Co-operation Council (GCC) states could pump in excess of $30 billion (Dh110bn) into such projects to produce a total of seven million tonnes in 2015 and nearly 10m tonnes at a later stage. Current GCC aluminium production is estimated at 1.8m tonnes, mostly from the two existing smelters in Dubai and Bahrain.
But planned smelter projects in Abu Dhabi, Oman, Qatar and Saudi Arabia will lift output to 4.5m tonnes within five years while expansions at these plants will boost capacity to nearly seven million tonnes in 2015.
At current production levels, the GCC accounts for only around five per cent of the world’s total aluminium production of nearly 34m tonnes in 2006. But planned projects will boost that share to more than 15 per cent in 2020, when the global aluminium output is forecast to surge to 60m tonnes a year.
“There is no doubt, these projects will turn the Gulf region into one of the biggest aluminium producers in the world,” Saeed Al Shaikh, chief economist at the Saudi National Commercial Bank, told Emirates Business.
“Besides, they will largely support the member states’ programmes of economic diversification as they will sharply boost their incomes and expand the industrial sector’s contribution to the gross domestic product.”
Dubai’s Dubal plant in Jebel Ali produced a record 935,000 tonnes this year, while output from Bahrain’s Alba smelter stood at 830,000 tonnes.
There are plans to expand the two smelters to meet growing demand from their customers in Japan and South Korea. Besides expansion, Dubal is teaming up with Abu Dhabi’s Mubadala to build the world’s largest aluminium complex in Taweela outside Abu Dhabi.
The plant will initially produce 720,000 tonnes when it is launched in 2010 but capacity in the second phase of construction will surge to nearly 1.4m tonnes per year to turn it into the largest single-site smelter in the world.
Preliminary capital is estimated at between $5-6bn (Dh18.3-22bn) but investments could soar to $20bn (Dh73.5bn) in the long term as the complex is expected to be expanded to involve associated industries and other facilities, according to the Abu Dhabi Chamber of Commerce and Industry, which cited official sources. In Oman, plans are under way to set up an aluminium smelter in Sohar at a cost of $2.4bn (Dh8.81bn). The plant, which will be commissioned in late 2008, will have an initial output capacity of 325,000 tonnes per year and will be jointly owned by the Oman Government and the Abu Dhabi Water and Electricity Authority. Qatar has approved a project involving the construction of a $1.5bn (Dh5.5bn) smelter that will produce 585,000 tonnes, which could be raised later to 1.2m tonnes.
In Saudi Arabia, there are plans to build a plant next year at a cost of about $3.8bn (Dh14bn). The smelter, to be developed by the government-owned mining company Maaden, will have an output capacity of around 625,000 tonnes per year.
Aluminum projects in the GCC states are part of overall industrial plans aimed at diversifying their economies away from unpredictable oil sales, which still account for at least two-thirds of their national income.
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