Emal plays wise waiting game

05 October 2010

Delays in Algeria and Saudi Arabia will give the firm time to focus on its domestic operations in the UAE

Building an aluminium smelter is not what anyone would call an easy project to execute. An average world-scale facility requires about $5bn of financing, needs a large tract of land and governmental assurances on power supply. So it comes as no real surprise that the UAE’s Emirates Aluminium’s (Emal) plans to build smelters in Algeria and Saudi Arabia are now delayed indefinitely.

Delays were inevitable for the Beni Saf smelter in Algeria after corruptions scandals at oil giant Sonatrach. Despite an abundance of natural resources, Algeria is traditionally a difficult place to invest in for foreign firms. The added chaos at Sonatrach, the biggest company in Africa, makes investing in the country almost impossible.

The situation regarding the Saudi Arabian smelter at King Abdullah Economic City is slightly different. There is a shortage of gas feedstock in the kingdom at the moment, resulting in a queue for allocations from the Petroleum Ministry. Saudi Aramco is fast tracking gas projects to come on stream by 2015, so it will not be long before Emal gets to the front of the queue.

Emal is now sensibly focusing on its domestic operations and is conducting feasibility studies for the phase two at Taweelah in Abu Dhabi. By the time the company has added an extra 750,000 tonnes-a-year to its existing operations, Saudi Arabia and Algeria might be ready to green light its foreign plans.

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.