Gulf International Investment Group has signed a joint venture with Aluminium Corporation of China, or Chinalco, to develop a US$1.6 billion (Dh5.87bn) aluminium smelting plant in the state of Sarawak, Malaysia.
The agreement follows the heads of agreement for the joint venture in February 2010. Gulf International is headed by the UAE-based business leader Mohamed Alabbar and the Malaysian entrepreneur Tan Sri Syed Mokhtar al Bukhary.
Smelter Asia will develop, own and operate the private aluminium plant with an annual capacity of 370,000 tonnes during the first phase. On further availability of power from the grid, the plant capacity is planned to be increased up to 700,000 tonnes.
The price of aluminium has been rising sharply, hitting $2,765 a tonne, its highest level in nearly three years on Thursday on the London Metal Exhange.
"Smelter Asia is a powerful example of global collaborations to create a dynamic socio-economic growth engine for Malaysia," said Mr Alabbar, who is also the chairman of Emaar Properties.
"The plant will not only benefit the country but also support the Asean region's development thrust by providing aluminium, which is critical in driving the massive infrastructure projects that are being planned. The final design and construction plans for Smelter Asia are progressing and will be announced in due course."
The smelter will be located in Samalaju Industrial Park, about 60km from Bintulu and 180km from the Bakun hydroelectric dam.
The industrial park is earmarked by the state government for heavy industries under the Sarawak Corridor of Renewable Energy masterplan.
"The global demand for aluminium is projected to grow by an average 4 per cent over the next five years, with Asia driving the demand," said Tan Sri al Bukhary.
"Our strategic collaboration with Chinalco for Smelter Asia will bring the best-in-class technology to create a modern aluminium plant … The plant will create new jobs and drive the growth of supporting industries," he added.