The two firms plan to form a joint venture to develop the plant, in the latest sign that international aluminium producers are looking to North Africa to develop new smelters, after some high profile projects in the Gulf failed to secure the necessary gas allocations.

The agreement with Rusal involves an aluminium smelter with capacity of 600,000 tonnes a year (t/y) and a dedicated 1,500MW natural gas power station. Gas will be supplied by Libya’s National Oil Corporation under a 30-year contract.

The agreement includes a pre-feasibility study of the technical, economic and financial aspects of the complex.

If the study’s results are positive, a final agreement will be singed in 2009 and construction of the power station and smelter will start in 2010. Rusal will hold a 60 per cent share of the venture and Tripoli will own the rest.

The aluminium it produces will be used domestically and exported to Europe.

The project is a further indication that global aluminium producers are targeting new production facilities in North Africa rather than the Gulf, where gas is increasingly scarce.

In Algeria, Dubai Aluminium (Dubal) and Abu Dhabi-based Mubadala plan to build a smelter with an initial capacity of 700,000 t/y, targeting the European market.

Canada’s Rio Tinto Alcan is also planning to develop a $7bn aluminium smelter in partnership with the local Cevital. The first phase will have capacity of 720,000 t/y.

Rio Tinto Alcan had been involved in plans for an aluminium smelter at Ruwais in Abu Dhabi by Abu Dhabi Basic Industries Corporation (Adbic). However, the project was put on hold because of a shortage of gas (MEED 18:4:08).