Construction on the project, situated in the northwest of the country and valued at more than $5bn, is expected to start in 2009.
“We do not know the cost of the project yet,” says Al-Sharwish.
However, he acknowledges that “prices have risen”.
The smelter, which will have an initial capacity of 700,000 tonnes a year (t/y), is being developed in partnership with Algeria’s national oil and gas company, Sonatrach.
It will occupy a 400-hectare site in the Beni Saf industrial zone in the country’s northwest.
The smelter will target European aluminium buyers.
“Given the project’s location in Algeria, close to Europe, we are looking at the European market,” says Al-Sharwish.
Before tendering the engineering, procurement and construction contract in the latter half of 2008, the project’s sponsors hope to secure the finance.
“We have to go to the international financial community and test the appetite among international bankers for Algerian projects,” says Al-Sharwish.
“We need to make sure we get the money secure before tendering the EPC contract. We do not see a problem. The project has the support of the Algerian, Dubai and Abu Dhabi governments.”
However, securing feedstock and raw materials is a growing concern. With several large-scale aluminium smelting facilities under development in the region, ensuring access to reliable base materials is paramount.
“We have to secure alumina ,” says Al-Sharwish. “This is becoming the main game between major players. The market is getting tight and we have to plan developing the smelter and securing alumina supplies together, so we are not affected by upsets in the market.”
In March, Mubadala announced the acquisition of a bauxite mine and alumina refinery in Guinea, West Africa.
The move was part of plans to secure base materials for aluminium smelting projects it is developing elsewhere in the Middle East.
In addition to the Algerian smelter, Emirates Aluminium (Emal), another Mubadala and Dubal joint venture, is developing a 1.4 million-t/y aluminium smelter at Taweelah in the UAE. It is set to be the world’s largest.
Mubadala is also looking to Brazil and China for sources of raw materials.
Rising commodities prices will add to the spiralling costs and growing timeframes for developing large-scale industrial projects in the region.
“Supply and delivery schedules were a few months long until recently; now they are up to 15 months,” says Al-Sharwish.