Oman's $2.4 Bn Aluminium JV Agreement Signed; Smelter Will Be On Stream In '08.
Sohar Aluminium Company (SAC)will have a single AP35 pot-line built in the industrial zone, together with associated carbon and casting facilities and a 1,000 MW gas-fired power station, one of the biggest of its kind in the region which will use combined cycle turbines. The smelter, one of the biggest in the world and to be the third largest in the six Gulf Co-operation Council (GGC) countries, will be designed for a bigger capacity, so that expansion can proceed economically when markets need more aluminium.
ADWEA, the 40% leader of the SAC, will invest $900m Regional and international banks have committed $1.46 bn along with an Islamic finance component of $240m.
The agreements, signed last week in Muscat, include the shareholder accords among ADWEA, OOC and Alcan. Citigroup is the financial adviser. Term lenders to the JV are ABN Amro, Abu Dhabi Commercial Bank, Arab Banking Corp., BankMuscat, BNP Paribas, Calyon, Citigroup, Export Development Canada, Gulf International Bank, ING, Mizuho, Arab Bank and Oman Arab Bank, Bank of Scotland, Societe Ganerale, Standard Chartered Bank, Sumitomo Mitsui Banking Corp. and West LB.
The agreements were signed by Shaikh Dhiyab bin Zayed al-Nahyan, Chairman of ADWEA; Omani Minister of Commerce and Industry, Maqbool bin Ali Sultan; and Cynthia Carol, CEO of Alcan Primary Metal. At the signing ceremony, Shaikh Dhiyab said: "Today's agreement gives the green light for the commencement of building the Sohar smelter, which we expect to be one of the major economic ventures". Shaikh Dhiyab said. The Omani minister, who is also chairman of OOC, thanked ADWEA and Alcan for selecting Oman as their investment haven, saying: "ADWEA's investment in Oman is a fruit of our distinguished bilateral ties".
Carol said the agreement was of vital significance to her company and its partners in the Gulf and Middle East. She said the move came in the midst of Alcan's drive to secure sustainable economic, social and environmental opportunities for the interest of all stakeholders.
SAC will be competing with larger smelters in the Arab Gulf Co-operation Council (GCC) countries, where the leader is Bahrain Aluminium (Alba). Alba's smelter has been expanded to more than 820,000 tons/year. Its capacity is to be raised to more than 1m t/y with a sixth potline to be added in the next two years. Alba is owned by the Bahrain government, Alcoa of the US, SABIC and Breton Investments of Germany.
Dubai Aluminium (Dubal) is the second leader in this business in the GCC. Dubal is expanding to 886,000 t/y in early 2006. It is a JV of the Dubai government (80%), Southwire Corp. of the US (7.5%), Nissho Iwai of Japan (7.5%) and local businessmen (5%). Dubal's smelter first came on stream with a 130,000 t/y capacity in 1980.
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|Publication:||APS Review Downstream Trends|
|Date:||Dec 19, 2005|
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