Qatalum start-up delayed by six months

26 August 2010

Power cut at $5.7bn smelter means whole facilty will need to be re-started

The $5.7bn Qatar Aluminium (Qatalum) smelter faces a delay in reaching full production of up to six months, after a power cut caused the complete shut down of the facility.  

The power cut at the 585,000 tonnes-a-year smelter, a 50/50 joint venture between Qatar Petroleum and Norway’s Hydro, occurred on 9 August and caused a loss of temperature in the smelter that allowed the molten metal to solidify. A difficult clean-up operation will cause significant delays to the project becoming fully operational.

GCC aluminium smelters
SmelterCapacity (t/y)Country
Aluminium Bahrain870,000Bahrain
Qatar Aluminium 585,000Qatar
Sohar Aluminium 360,000Oman
Emirates Aluminium750,000UAE
Dubai Aluminium920,000UAE
t/y=Tonnes a year. Source: MEED

All 444 metal producing cells that were operational at the time lost temperature making production impossible. The smelter has a further 260 cells that had not yet started production.

Marco Georgiou, London-based aluminium analyst at Cru, says that full production at Qatalum has been delayed by at least six months, although Qatalum could not confirm how the delays would be. Qatalum had been expected to hit full production by the end of 2010.

“The cells will have to be restarted after a clean out process,” a spokesman from Hydro tells MEED. “Hydro is not prepared to speculate on a time scale, but we are talking months before we will be back up to the level where we were.

“Cleaning the solidified metal out of the cells is an extensive and physical process,” the spokesman adds. “The cause of the power blackout is not yet known and an investigation is currently taking place to determine exactly what happened.”

The remaining 260 unaffected cells at the smelter cannot be started until Qatalum finds the cause of the power failure and finds a way to send power directly to the unaffected cells.

Hydro, who is responsible for selling the billet and foundry alloys produced from the Qatalum smelter’s primary metal, has issued a force majeure to customers, saying deliveries will be cancelled because of forces beyond their control.

“The cast house [at Qatalum] is not affected so we can hopefully increase production by importing metal from other smelters,” the spokesman for Hydro says. “Our first priority is our customers.”

Georgiou says that ramping up production at Qatalum’s cast house using imported primary aluminium is vital for securing the supply of billet and foundry alloy to Hydro’s customers.

“The key point is that [Qatalum] needs to keep the cast house working at full capacity,” Georgiou says. “If Qatalum can source enough metal to produce and then ship out the value added products then the affect will be minimised.”

There is global surplus of primary aluminium, but transporting large quantities from countries outside of the GCC could take weeks.

“Bringing in metal from other smelters is going to add cost,” Georgiou says. “Hopefully other smelters within the GCC have metal to sell.

“The loss of production is really going to affect both Qatalum’s and Hydro’s profits,” Georgiou adds. “They might be able to make some back through the cast house, but this will be a lot lower than expected.”  

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