Alcan finally commits to Sohar aluminium smelter

02 July 2004
Canada's Alcan has signed a memorandum of understanding (MoU) to take a 20 per cent stake in the greenfield aluminium smelter planned at Sohar. The long-awaited commitment, delayed due to Alcan's takeover of France's Pechiney, clears the way for the project to proceed (MEED 5:4:04).

Alcan will supply its Pechiney AP30 technology and 'take a leading role in the construction and operation of the smelter', the company said in a statement. The first phase of the project calls for the construction of a single potline with capacity of 326,000 tonnes a year (t/y), scaled back from original plans to build a 500,000-t/y facility. However, the terms of the MoU offer Alcan the option of acquiring up to 60 per cent of a planned second potline with similar capacity to the first.

The other shareholders in the project company are Oman Oil Company and Abu Dhabi Water & Electricity Authority (ADWEA), both of whom have consistently reaffirmed their commitment to the smelter project in the face of doubts that it would go ahead. ADWEA will handle the plant's captive power requirements of about 600-700 MW. Total project costs are estimated at about $1,800 million.

Construction of the smelter is due to begin in the second half of 2005, subject to finalisation of the shareholder agreements and the arrangement of financing. First production is scheduled to come on stream by the end of 2007.

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