Plans to build first primary aluminium plant in US for nearly 50 years
Posts 7% increase in core profit
Negotiations continue with Guinea after concession revoked
Recasts with comments from CEO and CFO, adds background on United States and Oklahoma project
By Federico Maccioni
DUBAI, Feb 25 (Reuters) - The outlook for the aluminium market is healthy, Emirates Global Aluminium said on Wednesday, citing opportunities from China's output capacity ceiling and demand created by the cost of copper that has led some manufacturers to use aluminium instead.
"The demand for aluminium is increasing globally...and shifting a bit from copper," CEO Abdulnasser Bin Kalban told Reuters in an interview, saying he expected demand to outpace supply and that there was a lack of new aluminium facilities globally.
EGA, which is jointly owned by the Abu Dhabi's Mubadala and the Dubai sovereign wealth fund ICD, plans to build the first primary aluminium plant in the U.S. in almost 50 years.
CFO Pal Kildemo said the total capital for the smelter set to be built in Oklahoma had increased to between $5-6 billion from previous $4 billion as the company plans to use its advanced EX technology that is being tested in its UAE facilities.
CENTURY ALUMINIUM STAKE
Under an agreement announced last month, Century Aluminum CENX.O will have a 40% stake while EGA will have the remaining 60% share in the project, whose planned capacity was increased to 750,000 metric tons of aluminium per year.
"The 60-40 split will be largely reflected in the equity contribution going forward," Kildemo said.
While EGA posted on Wednesday a 7% rise in core profit last year based on higher sales, it took a $765 million hit in Guinea after the African country revoked a bauxite concession to its local unit GAC, a decision the Emirati company has opposed.
Bin Kalban said discussions with Guinean authorities were ongoing without giving further detail.
EGA, said that alternative bauxite supply options, including from Australia and Ghana, signed after the licence was revoked, have helped to cover more than 70% of volume needs.
"We have a global supply strategy, so we have multiple sources instead of one place which used to be Guinea," Bin Kalban said. He said its UAE refinery had been reconfigured to accept any type of bauxite.
(Reporting by Federico Maccioni; Editing by Rashmi Aich and Barbara Lewis)
((federico.maccioni@thomsonreuters.com, +971 527370852))
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