UAE's EGA oversells next year's aluminum output as it mulls IPO

The UAE's Emirates Global Aluminium has oversold next year's production of the metal amid high global demand as it mulls a domestic initial public offering, its CEO told S&P Global Platts.

"We do not have any aluminum left," Abdulnasser Bin Kalban said in an interview on the sidelines of the Global Manufacturing and Industrialization Summit in Dubai. "The demand is very high. We are already oversold for next year."

In the first half of 2021, EGA sold some 1.18 million mt of cast metal to customers in more than 50 countries.

EGA, which sold 2.52 million mt of the metal in 2020, expects a record profit for this year and even better results in 2022, the CEO said.

The company is expected to hold in January a board meeting when plans for an IPO will be discussed, Bin Kalban said. EGA was formed in 2013 by the merger of Emirates Aluminium (EMAL) and Dubai Aluminium (DUBAL), and is owned equally by sovereign wealth funds Mubadala Investment Co. and Investment Corporation of Dubai.

"The IPO matters will be discussed in the next board meeting and it will be the shareholders' decision," he said. "After the IPO, we will have a new growth story."

Shareholders will decide the percentage of the IPO, which will take place in the UAE, he added.

The company's Al Taweelah alumina refinery in the UAE delivered beyond nameplate capacity at a record 1.09 million mt of alumina in H1 2021, improving on 1.04 million mt in H2 2020 and 880,000 mt in H1 2020.

Bauxite imports

EGA expects to continue to import the majority of its bauxite from Guinea Alumina Corp. (GAC), a wholly-owned subsidiary, Bin Kalban said.

In H1 2021, GAC exported 5.85 million mt of bauxite ore as a ramp-up continued, up from 5.47 million mt in H2 2020 and 4.26 million mt in H1 2020. The mining subsidiary of EGA, which commenced operations in 2019, has an annual nameplate capacity of 12 million mt.

EGA had also signed an agreement to import bauxite from Indonesia as "a Plan B," although quantities had yet to be finalized, Bin Kalban said.

"With Indonesia, we have already signed (an agreement) and that's part of our long-term strategy plan," he said. "But Guinea, from a quality point of view, quantity point of view, is better and we already invested a lot of money (there)."

EGA is also focusing on producing green aluminum as it seeks more solar power for its operations.

In January, EGA began producing aluminum using solar power supplied from the Dubai Electricity and Water Authority, which allows the company to produce a potential 40,000 mt in the first year.

German auto maker BMW Group was the first customer of the green aluminum with a supply of 43,000 mt/year.