Liquid metal facility at EGA Al Taweelah

Liquid metal facility at EGA Al Taweelah

EGA, proud leader of surging GCC pack

Emirates Global Aluminium was not the first in the region to produce the metal but it’s certainly one whose transformation is nothing short of phenomenal

February 2016

Having produced more than 5 million tonnes in 2015, the primary aluminium industry in the GCC region again accounted for approximately 10 per cent of global production last year, thereby reinforcing the region’s standing as a major aluminium hub. Currently ranked among the world’s top five primary aluminium producers, the UAE’s Emirates Global Aluminium (EGA) accounted for about half of this, having utilised the full production capacity of its operating subsidiaries Dubai Aluminium (Dubal, also known as EGA Jebel Ali) and Emirates Aluminium Company Limited (Emal, also known as EGA Al Taweelah) to produce 2.4 million tonnes in 2015.

The evolution of the GCC primary aluminium industry has been nothing less than remarkable. Established in the 1970s as part of the economic diversification strategy to alleviate dependence on the oil and gas sector, the regional aluminium industry was birthed by the commissioning of Aluminium Bahrain (Alba) in 1971, followed by Dubal in 1979. By 2008, their combined production capacity in the GCC was 1.92 million tonnes per year. From 2008 to 2013, another four smelters were developed in the region. Sohar Aluminium came on stream in 2008; Qatalum and Emal Phase I followed in 2009; Ma’aden Aluminium was born in 2013; and Emal Phase II was commissioned in mid-2014 – together raising the production capacity to 5 million tonnes per annum.

Moreover, the growth trend is set to continue. By 2018, the combination of various expansion projects and capacity creep is expected to raise the total production capacity of the region to over 6.4 million tonnes per year; with industry analysts forecasting production capacity of 8.8 million tonnes per year in the GCC by 2020 – equivalent to 12 per cent of the anticipated global capacity of 75.6 million tonnes per year (the growth in demand being driven by the increasing preference for aluminium as the metal of choice, for multiple reasons).

The sustained growth of the aluminium industry in the GCC is particularly noteworthy, given the cyclical downturns in the global and regional economies and many other factors that have taken their toll on the industry in other parts of the world.

EGA’s managing director and chief executive officer, Abdulla Kalban, attributes this to several factors:

Kalban: many factors behind GCC aluminium’s sustained growth

Kalban: many factors behind GCC aluminium’s sustained growth

• The GCC is financially strong due to the region’s reserves of oil and gas; and politically stable – which translates into a low level of financial risk for investors. All of the region’s smelters benefit directly from the sovereign wealth backing provided through their ownership by the national governments – either outright, or as major shareholders. Some 33.4 per cent of the smelter capacity in the GCC is owned by global aluminium industry players, attesting to the solid financial status of the region.

• The GCC smelters are renowned for their operating efficiencies. In a 2012 report by the Centre for European Policy Studies, the GCC smelters were found to operate at the lowest conversion cost, lowest business cost and lowest economic cost per tonne; as well as being among the lowest in power costs per tonne of aluminium produced. These attributes are vital differentiators in tough market conditions, such as the prevailing low LME price for aluminium and suppressed premiums.

• Advanced proprietary high amperage reduction technologies have been developed in-house at EGA – and sold to other smelters. A specific focus on reducing energy consumption, anode effect frequency and duration, minimising PFC emissions and lowering net carbon consumption has yielded technologies that are setting new performance benchmarks.

• Effective region-wide co-operation, under the auspices of the Gulf Aluminium Council, enables the sharing of best practices across various disciplines and operating functions. Collaborative research and development work is leading to innovative solutions and improved efficiencies.

• The GCC smelters are all modern facilities. The installation of best available technology contributes to benchmark environmental performance standards – a key differentiator when compared to the much older, non-environment friendly smelters in Europe, the USA and China. As evidence, the GCC smelters have together achieved a 15 per cent reduction in greenhouse gas emissions, a 46 per cent reduction in fluoride emissions, a 48 per cent increase in solid waste recycling and a 150 per increase in waste water recycling since 2009. The GCC operations are also flexible and agile, able to respond quickly while maintaining exceptionally high quality and service standards. 

• Sustained growth in global demand, where analysts forecast a compound annual growth rate of 5.8 per cent until 2020. By design, the GCC smelters are net exporters. With 70 per cent of aluminium production exported worldwide, only 30 per cent of the total GCC primary aluminium production is currently sold to the regional downstream industry. The scenario is not set to change – to the contrary, the analysts’ forecasts for 2020 show that regional demand in the GCC  will be approximately 24 per cent of regional production. This means that 76 per cent of the regional production (5.59 million tonnes of the GCC’s 8.8 million tonnes production forecast for 2020) will be available to meet the growing demand elsewhere in the world.

• The GCC smelters are niche-focused in terms of manufacturing value-added products. This is advantageous, given that analysts predict continued growth in demand for aluminium products in the construction, transportation and electrical sectors. Not to mention that, of course, value-added products attract higher premiums. At EGA, for example 90 per cent of production comprises value-added products; and approximately 88.5 per cent of annual production is exported. This not only attests to the demand for value-added products worldwide, but also demonstrates how the region is responsive to the global market, and structured to meet its needs.



EGA Al Taweelah Potline 3 utilised DX+ Technology

EGA Al Taweelah Potline 3 utilised DX+ Technology

The downstream aluminium industry in the GCC has grown in parallel with the primary aluminium sector.

From a zero base in the 1970s, the production capacity of the GCC downstream aluminium industry reached 1.97 million tonnes in 2015 and is set to reach 2.29 million tonnes per year by 2018 (almost double the 2012 figure of 1.18 million tonnes per year).

At 380,000 tonnes per year, the UAE currently has the third largest downstream production capacity in the region. This is expected to increase by almost 57 per cent to well above 650,000 tonnes per year – such that the proportion of EGA’s production destined for the local UAE market is expected to increase from the current 11.5 per cent to about 23 per cent. This growth trend reflects the anticipated increase in demand from the local end-user market – driven by local infrastructure development projects as well as increasing demand in international markets. Attesting to the latter, approximately 60 per cent of the GCC downstream aluminium industries’ annual production was exported in 2015 (up from about 50 per cent in previous years). The trend also confirms the substantial economic diversification achieved through the growth of the regional downstream industry.

The pro-active development of aluminium clusters – such as the cluster demarcated in Khalifa Industrial Zone Abu Dhabi (Kizad) – will support the accelerated growth of the downstream aluminium sector.

Emal is the anchor tenant of Kizad and is at the heart of the planned aluminium cluster. Kizad’s infrastructure includes a dedicated hot metal road, for transporting molten aluminium directly from Emal to downstream businesses. Emal has developed a Liquid Metal Transfer facility for this purpose. Several downstream aluminium businesses have already taken space and begun developing their facilities – including an extrusion plant; a rodding mill; and a rolling mill.



The upstream aluminium industry within the GCC is in its very early stages. The front runner is Ma’aden Aluminium, where a 4 million tonnes per year bauxite mine and ore crushing facility at Al Ba’itha began production in 2014; and a 1.8 million tonnes per year alumina refinery at Ras Al Khair began production in 2015.

Some value-added products from EGA

Some value-added products from EGA

EGA has also invested in upstream development projects in fulfilment of a two-part strategy, notably:

• Bauxite mining in Guinea – An 8 to 12 million tonnes per annum export mine is being developed by EGA subsidiary Guinea Alumina Corporation (GAC) and will be operational by 2018. This, together with a bauxite off-take agreement with Compagnie des Bauxites de Guinée (CBG), will generate a bauxite supply in excess of 18 million tonnes per year.

• Alumina refining in both the UAE and Guinea, to be operational in 2017 and 2022 respectively – The former involves the two-phased development of the UAE’s first alumina refinery, destined for Kizad, for which the bauxite for refining into alumina will come from CBG. The project will help accelerate the development of the aluminium cluster in Kizad; and increase the socio-economic impact of industry through job creation – Phase I is expected to add $1 billion to the UAE’s annual GDP and create several hundred jobs. The latter comprises Phase II of the GAC project in Guinea, where a 2.2 million tonnes per annum alumina refinery is on the cards. The combined facilities will have an alumina production capacity of about 6.2 million tonnes per year.



The true heart of the regional primary aluminium industry lies in its proven contribution to economic diversification – it serves as an economic powerhouse for the GCC states through substantial direct contributions to GDP; and also contributes indirectly to the economy by supporting the development of the downstream aluminium industry and investments upstream in international resourcing companies.

Not to mention being a major contributor to the region’s exports; one of the largest employment sectors; and a contributor to meaningful socio-economic upliftment through training and skills development – especially of nationals – and through corporate social responsibility investments.

Like the primary aluminium sector, the downstream aluminium sector contributes to national and regional GDP; and represents a major job creation platform. A growing number of people will be employed by the downstream aluminium industry in each of the GCC countries by 2018, with the regional total more than trebling compared to 2012.

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