Author: Moussa Ahmad Source: BI-ME and media reports
UAE. Abu Dhabi Basic Industries, known as ADBIC, plans to invest up to US$23 billion in new manufacturing projects which include Aluminium smelters, and petrochemical plants.
ADBIC’s Chief Operating Officer Jim White said last week in an interview that his company will build a 700,000-ton per year aluminum smelter at a cost US$3 billion. “We have done the feasibility study and we now have to negotiate the legal structure,” he said. White added that ADBIC is “in deep negotiations with Rio Tinto for the project.”
The Middle East is forecast to have the highest growth rate in primary aluminium production over the next five years, with a doubling of its current production of around 2 million tonnes by 2011.
Driving this growth are energy costs of an average of USD20 per mega watt hour (MW), which compares favourably with US$28/MWh in the US, and over US$40/MWh in China.
Electricity typically accounts for around 25-30% of the total cash cost of primary aluminium production, and while a smaller proportion of overall input costs than alumina, is the key cost- differentiating factor between aluminium producers. Smelters have always been located in areas where electricity could be sourced cheaply. However, the breaking down of trade and investment barriers is resulting in primary aluminium production, which has historically been concentrated in western countries, shifting to developing regions.