Upstream integration by GCC aluminium smelters to achieve new goal with EGA¡¯s bauxite, alumina project

Amidst the potential primary aluminium production capacity, the GCC aluminium giants are increasingly exploring upstream possibilities as well. For instance, Al Taweelah alumina refinery and the Boke bauxite project in the Republic of Guinea are the key parts of EGA’s strategic expansion in upstream in the aluminium value chain. The Boke bauxite project, the greenfield project in two phases through EGA’s subsidiary Guinea Alumina Corporation (GAC), was started being constructed in 2017, with the expectation of producing 12 million tonnes per annum bauxite ore, which would be entirely exported. In early August 2019, it made the first shipment from its mine, marking the beginning of EGA’s status as integrated aluminium major. The project is the result of a US$1.4 billion greenfield investment, which is among the largest such investment in Guinea in four decades. Recently, on November 10, the first Capsize vessel loaded with 173,000 tonnes of bauxite ore sailed from the mine.

Al Taweelah alumina refinery is the first refinery in the United Arab Emirates and only the second in the Middle East. The $3.3 billion refinery, which started production on April 10, 2019, would process 5 million tonnes of bauxite ore imported from West Africa into 2 million tonnes of alumina once fully ramped-up, meeting 40 per cent of EGA’s total alumina requirements. By the end of 2019, the refinery is expected to produce 1 million tonnes. Until the end of September, it produced 600,000 tonnes of alumina since inception. During August, average daily production of alumina was 88 per cent of Al Taweelah alumina refinery’s nameplate capacity. In operations, the refinery contributes about AED 1 billion per year to the UAE economy, with 600 permanent jobs in the operations team.

Abdulla Kalban, EGA’s managing director and CEO, had said: "The start-up of Al Taweelah alumina refinery is transformative for EGA and the first of two major milestones this year as we complete our strategic growth projects upstream in the aluminium value chain.

Maa’den aluminium project, on the other hand, involves the development, design, construction and operation of two sites integrated in a mine-to-metal network: Al Ba’itha in the northern Qassim province, and our integrated aluminium complex in Ras Al Khair Industrial City. Al Ba’itha includes mine as well as the ore-crushing and handling facilities, with the estimated bauxite production of 4 million tonnes per year. Ras Al Khair hosts the refinery, which is the first refinery in the Middle East, with the capacity to produce 1.8 million tonnes of alumina each year. The refinery is meant to meet the Maaden smelter requirement for 1.4 million tonnes of alumina per year with the surplus production to be sold into regional and international markets. Maa’den’s alumina sales in 2018 were at 311,000 tonnes.

Maaden Bauxite and Alumina Company is 74.9% owned by Maaden and 25.1% owned by Alcoa.

Yousuf Al Bastaki, Executive Vice-President — Upstream at EGA had stated, “As with every other global business, we’ve identified the need to go beyond our smelting capabilities to control key parts of our value chain — from “mine to metal”.

Besides, the Gulf countries' constant efforts towards making a shift to the non-oil sector, especially the aluminium industry,  have helped them emerge as one of the leading primary aluminium producing regions in the world. In 2015, the GCC region had accounted for about 10 per cent of the total global primary aluminium production, which was at 58 million tonnes, by churning 5.2 million tonnes domestically. Later on, in 2018, the production grew to 5.4 million tonnes, and in 2019, it is expected to increase to 5.7 million tonnes, according to the Gulf Aluminium Council (GAC).

There are top five primary aluminium smelters in GCC, namely, Emirates Global Aluminium (EGA), Aluminium Bahrain (Alba), Qatar Aluminium (Qatalum), Sohar Aluminium, and Maa’den, which have primarily contributed towards achieving this growing production over the years.

While EGA is the top producer among the list, its production, as of 2018, is at 2.63 million tonnes, followed by Alba 1.1 million tonnes, Maa’den 932,000 tonnes, and Qatalum 650,000 tonnes.

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