The UAE is set to play a leading role in the aluminium industry as global demand for the metal intensifies and its use grows in a range of areas including vehicle manufacturing, construction and renewable-energy production.
At the south-western tip of Dubai Marina's cluster of apartment buildings and shopping malls lies a series of low-slung buildings housing the production lines of Dubai Aluminium (Dubal). Unbeknownst to many motorists speeding by on the nearby Sheikh Zayed Road, almost 3 per cent of the world's aluminium - more than a million tonnes a year - is produced here.
Dubal, which opened for business in 1979, is a fixture of the emirate's industrial base. But it is also part of a push the UAE's leaders hope will make the country one of the top producers of what is one of the hottest metals in the world.
"The real driver for today's aluminium industry is China's building and construction industry," says Chris Bayliss, the deputy secretary general and director of global projects at the International Aluminium Institute in London. "A lot of aluminium is going into that. It is certainly a metal on the rise. It's a key to the development of future cities and mass transport systems."
Aluminium analysts appear to agree almost unanimously that the metal's future is bright. It is lightweight, does not rust and is produced in a variety of grades. Today, it is mostly used in construction and in making vehicles, aircraft, cans and aluminium foil. In the future, primary uses could include wind turbines and solar panels.
"If you're looking at new smelting and where the future of the industry will be, it's going to be the Gulf, China and South East Asia in the longer term," says Mr Bayliss, whose organisation represents about three quarters of the world's aluminium producers.
Indeed, the Gulf is fast-tracking its investment in that future. In 2006, Dubal teamed up with Mubadala Development, a strategic investment company owned by the Abu Dhabi Government, to launch Emirates Aluminium (Emal).The 50-50 joint venture could eventually produce 1.5 million tonnes of the metal each year. With the completion of its US$6.7 billion(Dh24.61bn) first phase, Emal began smelting in 2009 and in January reached full capacity, putting it on track to produce about 740,000 tones a year.
Together, Emal and Dubal are capable of producing about 1.75 million tonnes of aluminium a year. Add the production at Aluminium Bahrain and the output at new smelters in Qatar and Oman, and the Gulf's capacity represents about 9.5 per cent of global production in 2009.
The reasoning behind the Gulf's huge aluminium plays is simple. Given the enormous amount of power required for the electrolysis process, aluminium smelting is more or less a conversion of energy into metal. And countries in the Gulf can get energy relatively cheaply and easily. GCC countries, moreover, are trying to diversify their economies away from direct oil and gas sales at a time when demand for aluminium is on the rise in China, India and other major emerging economies.
"There's been a shift, and it's difficult to see that being reversed," says Neil Buxton, the managing director of GFMS Metals Consulting.
Of course, the outlook for the Gulf's new aluminium producers is not uniformly rosy. Despite vast regional energy reserves, there are growing worries that competition over the cheap domestic gas that powers electrical plants tied to smelters may put a cap on aluminium production.
Mahmood Daylami, the general secretary of the Gulf Aluminium Council, said recently that securing gas to expand smelting "is always going to be an issue" for producers in the Gulf. They are trying to get their hands on what is left of domestic gas in such places as the UAE and Oman after export contracts are honoured and other local industries take their share.
Another lingering question is the effect of additional Gulf production on the global market. Some analysts say there may be an oversupply in the short term, which could suppress prices. Yet the outlook remains positive. The price of aluminium has risen by 10.6 per cent this year to US$2,734 per tonne on Friday after a 45 per cent rise last year.
"I can envisage in the next five to 10 years the market may be balanced or even suffering shortages because of current consumption," says Robin Bhar, a senior metals analyst at Credit Agricole.
Looking further ahead, the consensus appears to settle on a shortage. More than 40 million tonnes of aluminium were produced last year, Mr Bayliss says, but projections put global demand at between 65 million and 70 million tonnes by 2020. That means at least 25 million tonnes of capacity needs to be added in that span, potentially opening a window of opportunity for the Gulf.
Yet Mr Bayliss says that despite the Gulf's new production and recent expansions in China and Iceland, the pace of investment in new capacity is slow.
"We don't see a race for new capacity, and that's making us sit up and think," he says. "The place where it's most expensive to produce is China, and China is growing quickest."