September 07, 2008

Abu Dhabi\'s ADBIC and Rio Tinto in aluminum JV

Zawya Dow Jones reported that Abu Dhabi Basic Industries Corporation plans to raise USD 2 billion in bank loans to help finance a new aluminum smelter at Ruwais industrial area in Abu Dhabi. ADBIC plans to build the 550,000 tonnes smelter in a JV with Rio Tino.

Mr Jim White COO of ADBIC told Zawya Dow Jones "The first phase of the smelter will cost approximately USD 5 billion. The JV will need to raise about USD 2 billion to finance the smelter. The plan is to do this through long term debt, through syndicated bank loans.”

Abu Dhabi earlier this year set up ADBIC on the lines of Saudi Basic Industries Corporation to develop industries such as aluminum, steel and petrochemicals. ADBIC will act as a holding company and combine existing and new industries under its umbrella. The company earlier this year absorbed Emirates Steel Industries from the government owned General Holding Co.

Mr White added that “Although progress on the Abu Dhabi smelter project has been delayed due to Rio Tinto's recent acquisition of all shares in Alcan Inc, the project could be up and running within four years. The talks are going well. If we make the decision to start construction next year we should be producing first aluminum late 2011.”

The creation of Adbic is integral to a government initiative aimed at restructuring the Abu Dhabi economy to encourage greater private sector participation and create jobs for the emirate's young and fast-growing population.