Copper offers great rewards, but copper-mill developers in the region will have to be careful of oversupply
The Middle East’s copper industry can be traced right back to the Bronze Age, although it has been largely ignored more recently. That is beginning to change with several projects now under consideration, including a smelter and three copper pipe mills in Saudi Arabia, the UAE and Qatar.
Interest in copper projects is driven by the metal’s high price … demand for the metal in building work
Currently the UAE’s Ducab operates the largest copper products plant in the GCC, a copper rod mill with a capacity of 120,000 tonnes-a-year (t/y). Interest in copper projects is driven by the metals’ high price, the lack of local competition and demand for the metal in building work. Copper pipes in particular form a key part of the air-conditioning systems that are an essential part of any building in the region.
The $1bn copper, lead and zinc smelter being considered at Yanbu by Saudi Arabia’s National Industrialisation Company (Tasnee) sounds ambitious, but it would be the region’s only major copper smelter.
Raw copper made in the GCC would put Tasnee in an enviable position compared with importers of the metal. The smelter’s 100,000 t/y capacity could also easily be swallowed by the GCC market.
Demand for copper pipes in the GCC currently stands at 15,000-20,000 t/y, so one mill would cover the whole region. Unless demand rises, only one of the three planned projects will succeed. Copper is also a tough metal to process and the techniques for working with it require an international partner prepared to lend their expertise to the project.
A rise in demand would boost the case for copper projects and maybe create a market for several schemes in the region. Unless that happens, each project will have to watch the market carefully to avoid oversupply.
The potential rewards from copper will be great, but first mover advantage will be the key to success.
You might also like...
Ajban financial close expected by third quarter
23 April 2024
TotalEnergies awards Marsa LNG contracts
23 April 2024
Neom tenders Oxagon health centre contract
23 April 2024
Neom hydro project moves to prequalification
23 April 2024
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.