Gulf Aluminium Council
Annual Report 2009
1
Mission statement
“To expand the market for aluminium
products within the Gulf region and beyond
and to protect and promote the interests of the
members of the Gulf Aluminium Council”
INDEX
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9 - 13
15 - 17
19
Message from the Chairman
Members of the GAC
Key issues
Report of the GAC
Human Resources and Recruitment Sub-Committee
by Tom Siddle
21
Report of the GAC
Health, Safety and Environment Sub-Committee
by Yaqoob Al Kiyumi
23
Report of the GAC
Synergy Sub-Committee
by Masood Al Ali
25
Aluminium - Key Facts and Statistics
3
Message from the chairman
Welcome to the Gulf Aluminium Council
2009 Annual Report
In my foreword to the GAC 2008 Annual Report, the first of its kind, I
recorded that in the fourth quarter of 2008, the world was in financial
turmoil. However, the full impact of the global downturn on the world
economy, and the aluminium sector in particular, did not become
apparent until the middle of 2009.
Following the sudden and dramatic collapse in the LME price for
aluminium, a low of below US$1 300 per tonne was recorded in the
second quarter of 2009. A slow, but steady recovery saw the price rally
to an average of US$1 900 by the third quarter of the year.
The downturn also caused stocks of aluminium, which had remained
below one million metric tonnes for many years, to rise steadily from
August 2007 onwards, ultimately reaching a peak of 4.5 million metric
tonnes. Stock volumes have levelled off since August 2009, signalling
some growth in demand as well as the effects of the closure of some
of the world’s older, less-efficient, primary aluminium operations.
Based on these and other fundamentals, the long-term forecasts
Abdulla Jassim bin Kalban
for aluminium demand remain good, reflecting our metal’s
Chairman: Gulf Aluminium Council
wonderful properties.
Undaunted by the global economic recession, the development of
primary aluminium production in the Gulf of Arabia has continued.
In 2008, Sohar Aluminium in Oman — the first new primary plant
developed in the region in 25 years — joined the existing, well
established companies of Aluminium Bahrain and Dubai Aluminium.
Two more primary plants will come on stream in 2010, namely Qatalum
in Qatar; and EMAL in Abu Dhabi. Together these companies will
not only provide revenue and wealth for the Gulf region, but also
employment and excellent quality of life for our people, as well as
those who provide goods and support services to the sector.
The formation of the GAC two years ago to represent these six primary
aluminium producers has provided a platform for the GAC member
companies to work together to make the Gulf region a true “centre of
excellence” for aluminium production.
I invite you to read about the work of the GAC in this annual report and
to visit our website www.gulfaluminiumcouncil.com or www.gac.ae.
Both will attest to the progress being made by the GAC towards
realising its primary objective of supporting the continued successful
growth of the primary aluminium industry in the Gulf Co-operation
Council (GCC) region.
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The Board of the GAC comprises the Chief Executive Officers of
the six founding member companies; with the activities of the GAC
being governed by a formal council composed of representatives of
these companies.
This photograph was taken at the time of the GAC Council Meeting
held in London, UK, on 14 October 2009. Pictured, from left, are:
Will Savage
Chief Executive, Aluminium Federation
Khalid Buhumaid
Vice President: Corporate Relations &
International Affairs, DUBAL
Hassan Al Rashid
Deputy CEO, Qatalum
Ahmed Al Noaimi
Aluminium Bahrain
Abdulla Kalban
President & CEO, DUBAL; Chairman, GAC
Henry Dickinson
President, Aluminium Federation
Bob Higginson
Carbon Plant Manager, Sohar Aluminium
Raj Navsaria
Chief Financial Officer, Sohar Aluminium
Tom Siddle
Technical Manager, Aluminium Federation
Abdullah Busfar
Vice President: Projects, Ma’aden
Tony Franchina
Technical Executive, Aluminium Federation
Richard Mahoney
Public Affairs Executive, Aluminium Federation
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Members of the GAC
The GAC has six founding members:
Aluminium Bahrain B.S.C.(Alba)
Formed in 1968, Alba is widely renowned for its technological strength
and innovative policies. In 2005, the commissioning of Alba’s newest
reduction line (Line 5) raised annual production capacity to more
than 870,000 metric tonnes making it the largest modern aluminium
smelter in the world at that time. The company has won a number
of awards over the years, including the inaugural Sheikh Khalifa bin
Salman Al Khalifa Award for Industrial Excellence, the International
Millennium Business Award for Environmental Achievement;
and a GCC-wide award for Human Resource Development and
Nationalization of the workforce.
Dubai Aluminium Company Limited (DUBAL)
DUBAL owns and operates the world’s largest modern smelter
with a captive power station. The company’s smelter complex, in
Jebel Ali, has the capacity to produce one million metric tonnes
of hot, molten aluminium per annum. Built on excellence-based
partnerships and a commitment to technological advancement,
DUBAL has also achieved acclaim for its high-amperage,
proprietary DX Reduction Technology. The many accolades received
by DUBAL over the years include the Dubai Quality Award in the
Production and Manufacturing sector (1996 and 2000); the Dubai
Human Development Award (2002 and 2006 – Gold); and the MRM
Business Award 2008 – Manufacturing Category. DUBAL also owns
50 per cent of Emirates Aluminium (EMAL).
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Sohar Aluminium Company (Sohar Aluminium)
Sohar Aluminium, which produced its first hot metal in June 2008
and was fully commissioned by February 2009, is the first green-field
smelter to be developed in the Gulf region in 25 years. Featuring
cutting-edge technology and the world’s longest potline, Sohar
Aluminium has an annual production capacity of 360,000 metric
tonnes per annum and is proud to play a pivotal role in the economic
diversification of the Sultanate of Oman and provide new opportunities
for both the upstream and downstream sectors. The company is a joint
venture between Oman Oil Company, Abu Dhabi Water and Electricity
Company and Rio Tinto Alcan.
Emirates Aluminium (EMAL)
EMAL is a joint venture between Dubai Aluminium Company Limited
(DUBAL) and Mubadala Development Company (Mubadala) and was
established in February 2007 to construct what will become the world’s
largest single site aluminium smelter complex. The project will be built
in two Phases and utilise DUBAL’s DX Technology. Once Phase 1 is
complete and fully commissioned in 2010, EMAL will have the capacity
to produce more than 750,000 metric tonnes of aluminium per annum,
rising to 1.5 million metric tonnes annually at the end of Phase 2.
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Qatalum
A joint venture between Qatar Petroleum and Hydro Aluminium,
Qatalum began production at the end of 2009 and will be fully
commissioned by the second half of 2010. The plant, one of the
largest green-field smelter developments to date, will have an initial
annual capacity to cast and ship 585,000 metric tonnes of value-added
aluminium products.
Saudi Arabian Mining Company (Ma’aden)
Ma’aden was formed in 1997 to facilitate the development of Saudi
Arabia’s mineral resources. Ma’aden’s current activities include the
operation of five gold mines and the development of aluminium,
phosphate and industrial minerals projects as well as exploration.
Ma’aden and Alcoa have formed a joint venture agreed to build a
1.8 million metric tonne per annum refinery, a 740,000 metric tonne
per annum smelter, a bauxite mine with an annual capacity of 4 million
metric tonnes and a rolling mill with a capacity of up to 460,000 tonnes.
The integrated project is scheduled for completion in 2013.
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Key issues
The GAC has identified the key issues facing
the primary aluminium industry in the Gulf
region as People; Synergy; Health, Safety and
the Environment; and Energy.
People — Human Resources and Training & Education
The growth rate in the primary and downstream aluminium sector
in the GCC region can only be sustained if a supply of well-educated
and talented individuals can be sustained. The GAC considers this
the priority issue for the industry and has therefore established the
GAC Human Resources and Recruitment (HRR) Sub-Committee. The
progress of this committee is reported on page 19.
Synergy — Working Together
Working together to achieve common objectives is a key priority for the
GAC. With this in mind, the GAC Synergy Committee has been formed,
through which member companies are exploring how their respective
businesses and employees can work together to become more efficient
and effective. The progress of this committee is reported on page 23.
The areas being addressed include:
• Group Purchasing
• Sharing Best Practice
• Improving Environmental and Health performance and setting
performance standards
• Political Lobbying
Energy — Ensuring a Long-Term Resource
The production of primary aluminium from ore is an energy-intensive
process. However, once produced, recycling of aluminium requires
only 5 per cent of the original energy required to produce it in a
primary smelter.
A long-term supply of competitively priced energy is therefore vital to
the aluminium producers in the Gulf region. Although perceived as a
region with abundant supplies of cheap energy, the Gulf aluminium
industry increasingly competes with other fossil fuel energy users in
the region
The Gulf aluminium industry needs long-term access to energy
sources to develop, compete and provide employment and quality of
life for the region’s population. Accordingly, the GAC calls upon the
region’s legislators to take this crucial requirement into account when
determining long-term energy policy for the region.
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Health, Safety and the Environment
Since the Gulf’s primary aluminium smelters first started production
in the 1970s, the provision of a healthy, safe working environment
has been integral to the sector’s sustainability. This is reflected in
the formation of the GAC Health, Safety and Environment (HSE)
Committee, the progress report of which is found on page 21.
Our member companies signed up to the IAI’s sustainability
programme “Aluminium for Future Generations”, launched in 2003,
in terms of which all IAI members undertook to achieve a 50 per
cent reduction in lost-time accidents and in recorded accident rates
by 2010, using 2000 as the base year. Extensive investment in time
and resources is made in employee training, to ensure that safe
working practices are established and followed. Exposure in plants
to emissions and physical agents, such as noise, is monitored and
minimised. Our plants have fully equipped on-site medical centres for
all employees. These practices and facilities also set a yardstick for
the primary aluminium plants now planned or under construction in
the Gulf. As such, the GAC enables its members to benchmark their
accident records for the benefit of all member companies.
Concern for environmental protection is also high on the GAC’s
agenda. All our operating smelters have ISO Standard 14001 for
Environmental Management Systems and ISO Standard 9001 for
Quality Management Systems. In terms of the IAI’s “Aluminium for
Future Generations” programme, primary aluminium smelters are
required to achieve an
80 per cent reduction in perfluorcarbon (PFC) gas emissions and a
33 per cent reduction in fluoride emissions by 2010, compared to
1990 levels. A 10 per cent reduction in energy consumed per tonne of
primary metal is also targeted by 2010, compared to 1990 figures.
As well as focusing on reducing water consumption, certain of our
member companies’ plants use waste heat from the furnaces in
desalination plants, to produce fresh water. In addition to the targets
established by the international aluminium industry, GAC member
companies also recognise the requirements in national plans for the
environment, such as the Dubai Strategic Plan for 2015, developed by
His Highness Sheikh Mohammed Bin Rashid Al Maktoum and similar
targets in Aluminium Bahrain’s Performance Indicators.
Moreover, GAC member companies have initiated a survey of the
processes available for the treatment of Spent Pot Lining, as the
viability of such a plant is enhanced by the proximity of smelters
needing that facility. This is another good example of the advantages
of a joint council for our industry.
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Report of the GAC
Human Resources and
Recruitment Sub-Committee
BY TOM SIDDLE
Acting Chairman
The Human Resources and Recruitment (HRR) Sub-Committee was
established early in 2008 as the first of the GAC sub-committees.
Its prompt formation reflects the common interest and major
importance placed by all GAC member companies on recruitment,
training and nationalization.
The HRR Sub-Committee met four times in 2009. All meetings were
well supported by the GAC members’ appointed delegates, and
it has already become a very valuable forum for the exchange of
information and ideas. During the year, information was shared on
training policies and projected future personnel requirements of each
member company. Identifying best practice and adopting a common
strategy to meet the growing needs of the aluminium industry in the
region will remain core objectives going forward
The current major task of the HRR Sub-Committee is to establish an
institution which will lead and coordinate the training and educational
needs of the aluminium industry. Work is well advanced in defining the
constitution of such an institution, and recruiting a director to oversee
its work. The mandate of the institute will not be limited to training
specific to the industry, but will also entail the future supply of local
school leavers and graduates suited to the needs of the industry.
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Report of the GAC
Health, Safety and
Environment Sub-Committee
BY Yaqoob Al Kiyumi
Chairman
The GAC Health, Safety and Environment (HSE) Sub-Committee
held its first meeting in October 2009. Representatives of all six GAC
member companies were in attendance and expressed agreement
regarding the importance of a strong and effective HSE policy for the
GCC region’s growing aluminium sector.
The following priority areas will be addressed in 2010 and beyond:
• Establishing a mechanism for sharing “Best Practice”.
• Sharing regional and global statistics to ensure “best in class”
status can be achieved for the Gulf region.
• Establishing an “incident reporting” system to ensure both rapid
and longer-term sharing of information to reduce and prevent
future occurrences.
• Importing “Best Practice” to the region from industry HSE
specialists.
• Understanding options for the handling and treatment of Spent
Pot Lining.
• Effective sourcing of Personal Protection Equipment.
• Establishing an annual HSE seminar in the region.
During 2010, the work of the GAC HSE Sub-Committee will make
measurable progress towards the objective of continuous improvement
in the HSE performance of the GCC region’s aluminium sector.
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Report of the GAC
Synergy Sub-Committee
BY Masood Al Ali
CHAIRMAN
The production of primary aluminium is growing rapidly in the Gulf
region. The two long-established smelters will, by the middle of 2010,
be joined by three new large smelters, lifting the annual output in
the region from 1.75 million metric tonnes per annum to 4.0 million
metric tonnes per annum. A sixth smelter is planned to come online
in 2013. These developments have transformed the Gulf region into a
truly global centre for aluminium production.
The primary objective of the Synergy Sub-Committee, which was
formed in March 2009, is to explore ways in which the GAC member
companies can work together, to achieve efficiencies in productivity by
exploring best practice in all areas of member companies’ operations.
By sharing experience, data and co-operative programmes in areas
such as Major Plant Efficiency, Strategic Spares and Raw Materials
Maintenance Strategy and Resource Utilisation, the aim is to cut costs
and raise efficiency in our members’ businesses.
During 2010, the Synergy Sub-Committee will engage with suppliers
and subcontractors, as well as our own individual companies’ personnel,
to ensure that aluminium production in the Gulf is the most efficient in
the world.
The members of the GAC Synergy Sub-Committee, pictured at a
meeting held on 29 September 2009.
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Aluminium — Key Facts & Statistics
As the following graphs show, the annual primary aluminium
production in the Middle East is expected to grow from
160,000 metric tonnes in 1980 (1 per cent of world production) to
10 million metric tonnes in 2020 (20 per cent of world production).
The volume produced by the Middle East had already risen to
1.8 million metric tonnes per year by 2007 and is on track to reach
10 million metric tonnes per year by 2015.
2007 World Primary Aluminium Production by Region (Million Metric Tonnes)
1.8
3.8
9.8
Middle East
4.2
Others
CIS
US / Canada
9.1
6.3
Europe
China
Projected 2015 World Primary Aluminium Production by Region (Million Metric Tonnes)
5
7
Other
10
9
CIS
US / Canada
Europe
China
6
13
Middle East
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CONTACT US
For more information about the Gulf Aluminium Council,
please contact:
Gulf Aluminium Council
Office No. 601, Business Point Building, Airport Road, Deira
PO Box 22584 Dubai UAE
Tel. +971 4 294 2332
Fax. +971 4 294 2924
www.gac.ae