‘Our project will nearly double US production of primary aluminium’: EGA’s Abdulnasser Bin Kalban
Dubai: Emirates Global Aluminium is doubling down on its US plans – and it makes for a reck-solid business plan.Fresh from last year’s investment in the US recycling firm Spectro Alloys, EGA – the UAE’s biggest non-oil industrial heavyweight – plans to get into full-scale production in the US. This through building the first manufacturing plant for primary aluminium since 1980.Sure, there are subtexts to the timing of the EGA announcement, most notably the US decision to hike import duties on aluminium and steel to 25%.But even then, this has to be the most consequential move by EGA in one of the world’s biggest consuming markets for the metal. In an interview, Abdulnasser Bin Kalban, CEO of Emirates Global Aluminium, draws up the plan of action.Will your new primary aluminium plant in the US only be catering to domestic demand?The opportunity we are addressing with this project is to meet the significant unmet demand in the US for aluminium made in America. The US currently imports most of the aluminium it needs for industries ranging from construction to automotive to aviation.Will this project tie in neatly with the earlier investment you made recently in the US? For raw material sourcing?Global demand for low carbon primary and recycled aluminium is expected to grow significantly over the decades. We have a bold growth strategy to help meet this growing demand. Last year we acquired 80% of Spectro Alloys, an aluminium recycling firm in Minnesota.This acquisition added significantly to EGA’s business in the US, with our first domestic aluminium production. We are currently expanding EGA Spectro Alloys from its current capacity of 110,000 tonnes per year of aluminium ingots production, adding 55,000 tonnes of recycled billet capacity.Developing a primary aluminium production plant will further strengthen our position in the US, and help us serve our American customers even better. There are many synergies.One area where there are few synergies, however, is in raw materials. The main feedstock for recycling is scrap, which is not the case for primary aluminium production.How will you then address the raw material sourcing?We are working on expanding and diversifying our upstream raw material supply on a global basis, as a key part of our growth in low carbon primary aluminium and to secure our supplies including for this project in the US – both bauxite and alumina.This is crucial for sustainable production over the long-term, so we can meet the metal demands of our American customers. Our main sources historically have included Guinea and Australia, and we are also exploring opportunities in other countries such as Cameroon, Ghana and Brazil for example. .Together with that stake buy and the new plant, what would be the combined investments in the US? Will this be your biggest capex in the last 10 years?We have not disclosed the value of the EGA Spectro Alloys acquisition. We have said that we expect to invest around $4 billion in the new primary aluminium production plant in Oklahoma. Since EGA was created through the merger of Dubai Aluminium and Emirates Aluminium in 2014, we have invested significantly in expanding the company upstream and internationally. We built Al Taweelah alumina refinery in Abu Dhabi, and a bauxite mine and associated export facilities in Guinea.We also expanded production at our smelter in Al Taweelah. This project in Oklahoma is by a small margin the biggest single investment since the merger, and certainly the biggest since we embarked last year on our current growth path.Do you plan to set up a trading office in the US to cover the North American markets?EGA has been an important supplier of aluminium to the United States for over two decades, and we already have a well-established local distributor, our wholly-owned subsidiary EGA America Inc, which is based in St Louis, Missouri.Would the US deal be considered if tariffs were not an issue?We are grateful that President Trump has publicly endorsed the importance of this project to help rebuild aluminium production as a great American industry. This was a significant step forward for our project. Aluminium production plants take several years to build and then operate for decades. Any project of this scale is thoroughly evaluated to ensure robustness over the project lifespan in a full range of economic and market scenarios. That includes multiple scenarios for how trade policy could evolve over that lengthy period of time.Am I right in saying that the US and North America would make up around 30%-35% of your exports?EGA supplies metal to customers in more than 50 countries around the world. We are broadly balanced between the Americas, Europe, Asia, and of course sales here at home in the UAE. The US is our largest single country market, and accounts for around 20% of our global sales.We are the No. 1 supplier of ‘premium aluminium’ into the US – that’s high-quality metal made to customer specifications for its end use.Could you give an oversight into how the US meets its current aluminium needs?Fifty years ago, the US was the world’s biggest aluminium producer. Production has declined over the decades since, with many plant closures. Today, there are just a handful of small primary aluminium production plants still operation, and the US produces less than 700 thousand tonnes per year.This is less than EGA produces at just one of our plants in the UAE, Jebel Ali. About 85% of US aluminium demand is currently met by imports, from Canada, the UAE and other countries. Our Oklahoma project will nearly double current US production of primary aluminium.
Source: Business Editor