Mubadala Development and Dubai Aluminium sign joint venture agreement

The joint venture agreement entails the construction and operation of a world class green-field aluminium smelter complex which will happen in two phases. The first phase, with a cost of USD 5 billion, and the second phase, with an approximate cost of USD 3 billion, will produce a total output of 1.4 million tonnes capacity a year at the Khalifa Port and Industrial Zone in Abu Dhabi. This will make it the largest single site aluminium smelter in the world. The two entities will jointly develop, construct, own and operate the complex.

Plans are already under way to establish EMAL, the joint venture company with 50% stake each for Mubadala Development and DUBAL. EMAL will oversee the operation and management of the new aluminium smelter.

The JV was signed by HE Khaldoon Khalifa Al Mubarak, CEO and Managing Director, Mubadala Development and Abdullah Kalban, CEO, DUBAL. Also present at the ceremony were HE Ahmed Humaid Al Tayer, Vice-Chairman, DUBAL, and members of the boards of both companies.

Abdulla Kalban said the UAE has made remarkable strides in every sphere of sustainable development, thanks to the unlimited support of President His Highness Sheikh Khalifa bin Zayed Al Nahyan and His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, "who are sparing no effort to ensure economic and industrial progress and to create wealth for the people of the UAE."

"This is an important strategic and historical project between DUBAL and Mubadala Development that will serve the UAE national economy and will capitalise on the excellent competencies already existing in the country. This joint venture is the flagship and signifies the advent of several industrial initiatives between DUBAL and Mubadala Development. The venture is under the direct support of His Highness General Sheikh Mohammed bin Zayed Al Nahyan and His Highness Sheikh Hamdan bin Rashid Al Maktoum," said HE Khaldoon Khalifa Al Mubarak.

He described the signing of the JV as a historic moment that heralds the new dawn of industrial and economic growth in the country and the region at large.

The progress of this project has been swift. Since the signing of the Joint Protocol in February 2006 a detailed feasibility study, the front end engineering and design studies were completed and groundbreaking is expected in May 2007. EPCM (Engineering, Procurement and Construction Management) tendering is in process, planned to be awarded by April 2007 and financial close is expected in the final quarter of 2007.

The smelter will be developed in two phases and the first phase is expected to be operational in 2010. When completed and at full capacity, the new smelter will have a Power Plant capacity of 2,250 MW, with the required gas volume for the project already secured.

"The combination of Mubadala Development's expertise and DUBAL's technical know-how and 26 years experience will greatly benefit the new venture. Besides, the UAE has already been consistently diversifying the national economy and projects such as this will generate substantial number of jobs for the UAE nationals," Mr Kalban remarked.

"We do believe there is ample room for additional capacity on the back of strong international demand. Demand is growing at an annual rate of 4% 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," concluded Mr Kalban.

"We are extremely pleased to have a quality partner of Dubal caliber in developing a leading edge project that will ensure effective and sustainable growth of UAE's industrial sector. Having a partner with such experience, expertise and resource will certainly enable us to come up with a world class project. Both Mubadala Development and Dubal enjoy capabilities and resources to design, implement and run a project of that magnitude," added HE Khaldoon Al Mubarak.