Garmco made the right decision to leave aluminium mill scheme

10 August 2010

The move to exit the aluminium rolling mill scheme in Sohar reflects the current economic climate

The metals park planned around Sohar Aluminium’s smelter in Oman suffered another setback this week as Bahrain’s Gulf Aluminium Rolling Mill Company (Garmco) pulled out of a proposed $350m rolling mill.  

Garmco were supposed to provide the technical expertise at the 200,000 tonnes a year tonnes-a-year (t/y) facility, but has now decided to expand operations at its plant in Bahrain.

The move by Garmco was also prompted by the fact that two rolling mills are being planned in Saudi Arabia and the UAE that will have a joint capacity of 960,000-t/y.

Where this leaves Sohar is another question.  The smelter was to be the centrepiece of Oman’s industrial diversification plans. In March, there was even talk of a phase two at the smelter that would have doubled capacity.

Now it is not clear whether the rolling mill project will still go ahead as the UAE’s Abu Dhabi Water & Electricity Authority (Adwea) and Oman’s Takamul Investments have not commented on their plans.

Whatever happens, the project will be delayed by a number of months as another partner is sought. Such a delay could prove deadly if the Saudi Arabian and UAE rolling mills come on stream earlier.

Garmco’s decision may have surprised and upset its partners, but in the current climate and with two world-scale plants on the horizon the decision is the right one for the firm. 

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