At the recent MEED Middle East Aluminium conference in Dubai, attendees were in better spirits than they had been a year before.

Talk was of aluminium demand growing by 12 per cent in 2010 and prices for the metal rising to $2,200 a tonne compared to $1,200 a tonne a year before.

Most GCC states had representatives talking about new smelter projects or developments in downstream aluminium. The only exception was the biggest of them all, Saudi Arabia.

But the kingdom is finally getting its act together. MEED reveals this week that Saudi Arabian Mining Company will launch the financing for a $7bn, 740,000 tonnes-a-year (t/y) aluminium smelter in May.

The project is a joint venture between Saudi Arabian Mining Company and the US’ Alcoa. Other projects planned as part of the venture include a 1.8 million t/y alumina refinery alongside a rolling mill with a capacity of up to 460,000 t/y and a 4 million t/y bauxite mine.

The argument for aluminium production in the kingdom is compelling. Smelting aluminium requires a huge amount of energy, something that will not worry oil-rich Saudi Arabia.

With an abundance of bauxite, the mineral used to produce aluminium, Riyadh can develop its own supply chain from mine-shaft to end-product. And having the technical expertise to turn the base mineral into products to meet domestic demand and exports, is an enviable position to be in.