EGA investing in renewable energy generation to boost aluminium production, eyeing to meet 119.5 Mt of global demand

Amid the projection of global aluminium demand growth by almost 40 per cent to 119.5 million tonnes at the end of 2030, Emirates Global Aluminium (EGA), which currently forms the biggest part of Dubal Holding's portfolio, is mulling to expand the midstream and downstream aluminium industry, such as auto-spare parts, according to Mr bin Fahad.

He said EGA’s investment is proceeding on track with Dh4 billion waste-to-energy project. He further explained the project will convert 1.9 million tonnes of waste per year into renewable energy, which will generate 200 megawatts of electricity to feed local grid to help them accelerate aluminium production.

The facility is likely to commence operations by 2024, and more such plants are planned for the rest of the country, said Mr Fahad. The projects that are already in pipeline are plastics-to-chemicals-and-fuel facility and new ventures in biogas and titanium.

According to a recent study published by CRU International on behalf of the International Aluminium Institute (IAI), the aluminium demand growth will be primarily driven by transportation, construction, packaging and electrical sectors.

The study also showed that the aluminium sector will need to produce an additional 33.3 million tonnes to meet demand growth, two-third of which is expected to come from China, followed by the rest of Asia, North America, and Europe.

But in the meanwhile, aluminium prices have been on surge as the Russia-Ukraine war impacted the global supply. Western sanctions including Australia’s ban of alumina and aluminium ores exports to Russia also drove the decline in Russian aluminium supply, causing the LME aluminium benchmark price rise to a 13-year high at US$3,984.50 per tonne in early March.

"This, coupled with short-covering by traders in the LME [London Metal Exchange] and fears of further sanctions — potentially including those on Russia’s Rusal, one of the world’s main producers — sent prices soaring to record highs in March," the report said.

According Mr bin Farhad, the LME price might grow higher driven by the ongoing conflict and lingering effects of the pandemic, coupled with soaring prices of raw materials, fuel and logistics.

However, he also said that is a short-term issue. "Things will be corrected. EGA will keep expanding the production line to keep up with the demand but this is just one player. Other players also need to look into their operations and optimise efficiency and production."