ABU DHABI(Reuters) – Abu Dhabi’s Mubadala Development Co. and state-owned Dubai Aluminium Co. (Dubal) agreed to build what will be the world’s largest aluminium smelter at a cost of $8 billion.
Mubadala, an Abu Dhabi government investment agency, and Dubal are setting up Emirates Aluminium, a company which will develop the 1.4 million tonnes-per-year project in the United
Arab Emirates, Mubadala said in a statement. Each company will own 50 percent of the joint venture.
The two agreed last year to study developing a smelter project, without at the time saying how much it might cost.
The smelter will be developed in two phases, with the first completed in 2010, Mubadala said. It will have a 2,250 megawatt power plant.
Emirates Aluminium will invite companies in April to compete for the contract to build the plant, Mubadala said.
“There is ample room for additional capacity on the back of strong international demand,” Abdullah Kalban, Dubal’s chief executive was quoted as saying in the statement.
“Demand is growing at an annual rate of 4 percent or 1.3 million tonnes a year. This demonstrates the need to establish a smelter or two every year which is not happening in the world right now,” Kalban said.
Russia’s Rusal operates the world’s biggest smelter, at Bratsk, with a capacity of 976,000 tonnes per year.