Interview: Tim Murray
What effects do you expect expansion to have on sustainability and five-year growth projections?
TIM MURRAY: Rising energy costs and energy conservation are matters of great concern to production processes all over the world. Primary aluminium smelters have a responsibility to develop and implement technologies that promote energy efficiency and environmental sustainability. As a corporate citizen, we seek to adhere to the highest quality standards, and we have implemented numerous energy-conserving tools and processes to help reduce our energy consumption.
Alba’s expansion project uses the latest technology, not only for the Line 6 smelter, but also for power station 5. The expansion has committed Alba to meeting the stringent standards of Bahrain’s Supreme Council of Environment, as well as the benchmarks of the Equator Principles and the International Finance Corporation. Line 6 will utilise EGA’s DX+ Ultra technology, which will allow us to increase output, consume less energy and further strengthen our position as a low-cost producer. When fully commissioned, Power Station 5 will be the largest and most efficient station in Bahrain, as well as the first station with H-class gas turbine technology in the Gulf and the global aluminium-smelting industry.
With Line 6 adding capacity of 540,000 tonnes per annum (tpa), Alba intends to increase its footprint in the US market, where netbacks are more attractive than in other regions. Billet demand is positive and growing, as is the growth of auto body sheets. Our achievement of the Automotive Quality Management System – IATF 16949: 2016 Standard earlier in 2018 will give us a solid edge, while offering greater value for our customers in the fast-growing automotive market.
We have adopted many proactive measures to improve our operational efficiency through our Project Titan programme, while being prepared to seize the right opportunities. We recognise that sustainable operations are key to the future, and this can only be achieved by focusing on safety, production and cost.
How would the expansion efforts impact employment and the national economy?
MURRAY: We sell close to 45% of our production to local downstream industries, and we are well placed to remain a pillar of economic diversification. With the first hot metal achieved on December 13, 2018, our capacity will grow by 540,000 tpa, thus ensuring robust supply is available to local customers.
Our expansion will significantly increase employment opportunities for Bahrainis, both at Alba and in the downstream cluster. It will also provide a boost to the national economy due to the many co-investment opportunities created by local and international aluminium interests. Bahrain’s aluminium industry is expected to account for approximately 15-16% of the kingdom’s GDP once the expansion project fully assumes its commercial operations.
Which dynamics in the global market are behind the recent growth of the domestic aluminium industry?
MURRAY: Bahrain recognises that well-established and diversified business infrastructure is the key to economic success and to providing job opportunities for Bahrainis. Real national GDP grew by 3.9% in 2017, with the non-oil economy expanding by 5%, making it the fastest-growing country in the GCC. In the GCC in particular, we see infrastructure and construction as the main sectors behind solid demand for aluminium, and due to its location, Bahrain can take advantage of booming demand, especially from Saudi Arabia.
Bahrain’s aluminium industry is a significant sector of the national economy, accounting for about 12% of GDP. While the Middle East has some of the world’s top-producing smelters, Bahrain has a thriving downstream industry, where aluminium exports represent about 65% of non-oil exports. Alba has received support from banking partners through syndicated loan and export credit agency-covered facilities, which testify to their confidence in the Line 6 expansion project.
Read More from OBG
