Emirates Aluminium (Emal), an aluminium smelter owned jointly by Abu Dhabi and Dubai, has awarded more than US$700 million of contracts for an expansion that will nearly double its production capacity.
The smelter recently announced it was going ahead with a second phase worth $4.5 billion (Dh16.52bn) to bring its capacity to 1.3 million tonnes of aluminium production per year.
The plan is to reach full capacity in three years' time, a goal executives have called ambitious given the massive scale of construction. The first phase cost $5.7bn and took almost three years to build.
"Our target to achieve full production by 2014 depends on the successful execution of these contracts," said Saeed Al Mazrooei, the president and chief executive of Emal. "We are confident that we have engaged the best partners with the best technology and will get the best outcome."
Emal is 50-50 owned by Dubai's aluminium giant Dubal and Mubadala Development, and aims to leverage access to cheap gas for the energy-intensive aluminium production process. Mubadala is a strategic investment company owned by the Abu Dhabi Government.
The contracts announced yesterday include a deal with SNC-Lavalin, a Canadian engineering company that worked on the first phase of the project, which sold its first cast aluminium last year.
Once its second phase is complete, Emal will have the world's longest aluminium smelting line at 1.7km. It will be one of the largest single aluminium plants in the world.
The expansion of the plant had long been anticipated as studies on its feasibility neared completion this year. Final approval was secured from the company's board of directors last month.
The Emal smelter is among several aluminium projects across the Gulf. With the industry's large power demands, it is considered a natural way for energy-rich countries in the region to diversify their industrial bases and capitalise on rising demand for the metal.
While Gulf countries have been producing aluminium since the 1960s - Aluminium Bahrain was formed in 1968, followed by Dubal in 1979 - no major new plants have been built until recently. Newer facilities include Emal and smelters in Oman and Qatar. A smelter is also under construction in Saudi Arabia that uses local bauxite, the source mineral for aluminium.
The rise in Gulf production stands to vault the region into the top ranks of producers globally. China, the world's top producer, pumped out 16 million tonnes of the metal last year, according to the International Aluminium Institute.