Aluminium scheme revived

28 March 2002

International banks have been requested to bid for an interim financial advisory mandate for the proposed aluminium smelter project in Oman.

'We've been asked to express an interest for doing some work that should last up to June/July,' says an interested international banker. 'We are expecting a full advisory mandate to be awarded at that point.'

The aim is for the construction of an aluminium smelter complex that will be scaled up to have a capacity of 500,000 tonnes a year.

The shareholders in the project are expected to be Abu Dhabi Water & Electricity Authority (ADWEA), Oman Oil Company (OOC) and Canada's Alcan.

A key component of the project will be the construction of a 1,000-MW gas-fired power plant which will be owned by ADWEA and OOC. It is expected to pay the market price for gas feedstock and will provide electricity on a low margin to the smelter. As a result, the power plant will deliver a comparatively low internal rate of return. However, ADWEA and OOC will be compensated through their ownership in the aluminium smelter which, it is hoped, will be highly competitive, sources close to the project say.

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