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Dubal to Increase Aluminium Production

DUBAI - Dubai is moving ahead with an increase in its capacity of aluminium production, even as other international producers cut back to bring supply in line with falling demand.

State-owned smelter Dubai Aluminium Company (Dubal) has no plan to reduce its 950,000 tonnes per year output despite falling global demand for commodities as the economy slows down.

“Dubal is committed to staying in the aluminium market and wouldn’t be cutting capacity in the foreseeable future. We plan to open the new Emirates Aluminium (Emal) plant in Abu Dhabi with capacity of 700,00 tonnes per year, by December ’09, said Ahmed Al Tayer, Dubal Vice-President at the opening of Dubai Aluminium 2009 on Sunday.

Shaikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and Finance Minister of the UAE, inaugurated the show. The three-day show is taking place at Dubai International Convention and Exhibition Centre.

Aluminium is trading slightly above its average cost of production, estimated at about $1,300, but there is still too much supply and analysts say more production cuts are needed to bring the market back to balance.

Dubal is reportedly going to hold talks with Saudi Arabian Mining Company next month about a potential partnership to build a new plant in King Abdullah Economic City in Saudi Arabia.

Last year January, Dubal and Mubadala, the Abu Dhabi government-run investment vehicle, signed a memorandum of understanding for the Saudi Arabian project with Emaar Economic City, the Saudi unit of Dubai-based real estate developer Emaar Properties.

Partnership that may run $5 billion to build the smelter has since then completed initial design and engineering work — and plans to go ahead with the project.

· aneela@khaleejtimes.com