King Abdullah Economic City (KAEC) will be the latest Gulf site for a greenfield aluminium city it was announced recently.

The announcement follows the signing of an MoU between Emaar, the Economic City (EmaarEC) and Emal International, the joint venture between Dubai Aluminium Company (Dubal) and Mubadala Development, to establish a $5 billion smelter with a first-phase production capacity of 700,000 tonnes per year (tpy).
The agreement was endorsed by the Saudi Arabian General Investment Authority (Sagia), the prime facilitator for KAEC.
Amr Bin Abdullah Al-Dabbagh, Governor, Sagia, and Fahd Al-Rasheed, CEO, Emaar EC, signed the agreement with Abdulla Kalban, CEO, Dubal, in KAEC.
Dubal is a global leader in the production and marketing of primary aluminium, and Mubadala is the wholly-owned investment vehicle of the Government of Abu Dhabi. KAEC is a mixed-use project with six key components including a seaport and industrial zone, and is spread over 168 million sq m on the Red Sea Coast.
The smelter complex in KAEC will be among the largest of such facilities in the region and create over 2,500 direct and 5,000 indirect jobs, initially. With the potential to double the production capacity, the plant will also drive downstream industrial investment to KAEC, thus creating a dynamic industrial investment hub in the region. Work on the project is expected to start by the end of this year upon completion of project studies and environmental assessment.
Al-Dabbagh said: “Saudi Arabia is fast consolidating its economic status as the regional investment hotbed, powered by the pioneering development initiatives undertaken by the economic cities in the kingdom. As the first multi-faceted economic city, KAEC has set a strong foundation for inward investment in a number of high-growth sectors. The aluminium smelter complex will be another magnet for industries exploring the investment options provided by KAEC.”
Al-Rasheed noted that KAEC was the single largest private sector development in the region, adding that to further promote its objectives the city was forming strong public-private partnerships that would power its growth. “The partnership with Emal International, which represents the joining hands of two of the UAE’s leading names in industry and investment, will enable KAEC to deliver a strong foundation of growth for potential investors,” he said.
Kalban commented: “Dubal’s involvement in this project is extremely gratifying, as it pays tribute to the wealth of experience and advanced technologies developed by our company over the past 28 years.”
Mubadala’s CEO and managing director Khaldoon Khalifa Al Mubarak said: “The combined strengths of the two companies would ensure the delivery of a world-class project.”
Global demand for aluminium is on the rise, and the Gulf region today accounts for about 5 per cent of the world aluminium production of 34 million tones, according to reports. This is expected to rise to 15 per cent by 2020 with a projected global production of 60 million tonnes. The KAEC plant will complement the market-leading positions of Dubai in aluminium production in the future.
The KAEC smelter will feature Dubal’s proprietary smelter technology and will leverage the company’s project management skills, operational efficiency and global market position. The project will benefit from Mubadala’s expertise in structuring and financing multi-billion dollar projects, as well as Dubal’s superior industry knowledge and best-in-class practices in the areas of health, safety and environment.
Sagia has expressed its commitment to supporting the hiring and training of a Saudi workforce for the project.
Emaar EC has indicated its willingness to identify a 4 sq km site within the industrial zone of King Abdullah Economic City that is not only suitable for the development of the smelter, but which also offers good access to a suitable deep water port, utilities and all road transport links. Should the project go-ahead, Emaar EC would also help provide temporary and permanent accommodation for the construction and project personnel; and would include adequate healthcare facilities, schools and other social infrastructure requirements in the overall development of King Abdullah Economic City.
Dubal has the capacity to produce more than 900,000 tonnes of high quality finished aluminium products a year. A dynamic growth strategy will increase annual production volumes of metal to almost one million tonnes by 2008.
Mubadala is an investment and development vehicle established and wholly owned by the Government of the Emirate of Abu Dhabi.  Its mission is to invest in commercially-viable, strategic, industrial and commercial partnerships.
The company manages a diversified portfolio of local, regional, and international investments.  International investments include the Dutch fleet management giant LeasePlan Corporation (25 per cent stake), and a stake in nine oil exploration blocks in Libya.  Stakes are also held in the Swiss aircraft and engine services provider SR Technics (40 per cent), the Italian luxury car manufacturer Ferrari (5 per cent), and Piaggio Aero Industries (35 per cent).