The two companies signed a memorandum of understanding (MoU) in September 2003 which would have seen Alcoa take a 26 per cent equity stake in Alba, acquired out of the 77 per cent stake currently owned by the government (MEED 19:9:03). Sabic Industrial Investments
, a 100 per cent-owned subsidiary of Saudi Basic Industries Corporation (Sabic)
, holds a 20 per cent share in the smelter, while the remaining 3 per cent is retained by Germany’s Breton Investments
Questions were asked at the time of the MoU about why Manama would want to sell off part of such an important asset. However, negotiations are understood to have stalled due to internal issues at Alcoa and difficulties in agreeing a legal and financial framework for the sale. Alcoa is among the world’s leading suppliers of alumina and the deal was regarded as crucial to accelerate the sixth potline project. Sources at Alba say that expansion is now unlikely to go ahead until 2006/07 at the earliest.
Work on the $1,700 million potline five expansion, which will increase capacity by 307,000 tonnes a year (t/y) to 827,000 t/y, is progressing on schedule. Commissioning of the carbon plant is due in December and of the potline itself in March. The US’ Bechtel
is the engineering, procurement and construction management (EPCM) contractor (Bahrain, MEED Special Report, 30:4:04, page 39).