Emirates Global Aluminum said on Wednesday that the outlook for the aluminum market is healthy, citing opportunities due to demand created by capped production capacity in China and the price of copper, which has led some manufacturers to use it instead of aluminium.
“Demand for aluminum is increasing globally and there is a bit of a shift away from copper,” CEO Abdulnasser bin Kalban told Reuters in an interview, adding that he expects demand to outstrip supply and there is a shortage of new aluminum facilities globally.
EGA, jointly owned by Abu Dhabi’s Mubadala and Dubai sovereign wealth fund ICD, plans to build the first primary aluminum plant in the United States in nearly 50 years.
CFO Pal Kildemo said total capital for the proposed smelter in Oklahoma has increased to between $5 billion and $6 billion, up from $4 billion previously, as the company plans to use advanced EX technology being tested at its facility in the UAE.
century aluminum stake
Under the agreement announced last month, Century Aluminum will hold a 40% stake in the project, with EGA holding the remaining 60% stake, and its planned capacity will increase to 750,000 tonnes of aluminum per year.
“The 60-40 split will be heavily reflected in future equity contributions,” Kildemo said.
EGA said on Wednesday that its core profit rose 7% last year based on sales growth, but it took a $765 million hit in Guinea after the African country canceled bauxite concessions to its local unit GAC, a decision opposed by Emirati companies.
Bin Calvin said talks were underway with Guinean authorities, but gave no further details.
EGA said alternative bauxite supply options, including Australia and Ghana, signed after the license revocation helped cover more than 70% of demand.
“We have a global supply strategy, so we have multiple sources of supply instead of one location, which used to be Guinea,” Bin Calvin said. He said the company’s UAE refinery has been reconfigured to accept all types of bauxite.
(Reporting by Federico Maccioni; Editing by Rashmi Aich and Barbara Lewis)
