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MEI Online: Commodities: Metallic Ores: Aluminium: Latest News: June 29th 2006


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:: Rio Considers $2.7bn Smelter

Mining giant Rio Tinto is studying a project to build a $US2 billion-plus ($2.73 billion-plus) aluminium smelter in Abu Dhabi in the United Arab Emirates, to capitalise on rising demand and plentiful supplies of natural gas.

Aluminium production consumes enormous amounts of energy, with fully one-third of the cost of smelting the light-weight metal consumed in power, making it no surprise that the oil-and-gas-rich Middle East is proving to be a new mecca for aluminium producers.

In the Gulf state the UAE's Dubai Aluminium Company is building what will be the world's largest aluminium smelter, in a $US6 billion project. Canadian aluminium giant Alcan is building a $US1.7 billion smelter in Oman, while earlier this year Saudi Arabia approved plans for a $US3.76 billion smelter.

"The Middle East is fast becoming a key region in the global aluminium smelting industry and Abu Dhabi is well placed due to is significant energy resources," said Rio's head of smelting within its aluminium business, Comalco, Sandeep Biswas.

Rio expects to complete a feasibility study in 2007 based on a smelter producing 550,000 to 700,000 tonnes of aluminium a year. While Rio released no cost information, recent projects suggest a capital cost of more than $US2 billion.

Alumina feed for the smelter could be sourced from Rio's operations in Queensland, where a proposed stage-two expansion of the new Comalco Alumina Refinery is being studied.




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