Bechtel joining in Gulf metals and mining boom

US firm Bechtel is setting up an office for its mining and metals division in Dubai, as the company sees growing opportunities for the sector in the Gulf.

Bechtel, one of the largest engineering and construction companies in the world, wants to tap the lucrative Gulf market. Ryan Carter / The National
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The US firm Bechtel is setting up a Dubai office for its mining and metals division, as the company sees growing opportunities for the sector in the Arabian Gulf.

Bechtel, one of the largest engineering and construction companies in the world, wants to tap into a market where it estimates contracts worth US$6 billion have been awarded in the past 12 months.

"We recognise the growing importance of the Gulf region as a strategic hub for our business," said David Welch, Bechtel's president for Europe, Middle East and Africa.

"We are optimistic about the business opportunities in the region and we believe the outlook is strong. In addition, the region has excellent connections to European and North African markets."

The company has already made inroads into the GCC's metals sector, and is constructing the Ras Al Khair aluminium smelter in Saudi Arabia, a joint venture between the Saudi Arabian Mining Company, or Maaden, and Alcoa.

As governments across the Gulf seek to diversify their economies away from oil and gas production, they are building their industrial base by investing in petrochemical plants, aluminium smelters or steel production.

In Saudi Arabia, the only GCC country with sizeable non-hydrocarbon natural resources, Maaden is expanding its gold and phosphate mining capacity.

In the UAE, aluminium production in particular has been at the forefront of industrial expansion. Earlier this year, the government-owned Emirates Aluminium (Emal) and Dubai Aluminium (Dubal) merged to form Emirates Global Aluminium, combining the country's entire production.

The new entity, owned in equal parts by Abu Dhabi and Dubai, produces 1.7 million tonnes per year of aluminium, making it the region's largest supplier. Output will be increased through a $3.8bn expansion that will add 800,000 tonnes per year to production capacity.

Further growth is forecast, with the next expansion phase already under discussion. Bechtel and its joint-venture partner Petrofac Emirates were last week tasked to conduct a feasibility study for an alumina refinery in the Khalifa Industrial Zone (Kizad) next to Emal's smelters.

Abu Dhabi is also a major player in the region's steel production. After completing its second expansion last year, Emirates Steel now ranks as one of the GCC's biggest suppliers with a capacity of 5.5 million tonnes per year. The government-owned company will become Kizad's second anchor tenant once it is given an allocation of natural gas for a steel plant at the industrial hub.