It is reported that Aluminium Bahrain, owner of the world's fourth largest aluminium smelter, wants to take a stake in a mine or refinery as its impending expansion increases its demand for raw materials.
The firm has begun feasibility work on USD 2.5 billion sixth production line which will increase annual capacity by 400,000 tonnes when it comes online at the end of 2015 from its current production of 890,000 tonnes a year.
Mr Tim Murray CEO of ALBA said that given the additional demand for raw materials the new line will create, a focus on securing supplies at source instead of buying everything on the open market becomes more important. For line six, it would probably be an interesting opportunity to look for maybe JV partner or an equity swap.”
Mr Murray said the firm may take a small stake in either a bauxite mine or a new or existing refinery with India among likely options given its proximity to the Gulf Arab region in comparison with other candidates like Guinea. Such decisions will form part of the expansion's feasibility study, which Bechtel Canada was appointed to undertake in December and which is due to be completed in the third quarter.
He said that much of the funding for the expansion will be raised from export credit agencies and both commercial and Islamic banks, with a bond also part of the package. The firm was currently securing a credit rating. However, Alba has no plans to raise further corporate debt after securing bank loans in December to pay off USD 169 million bond due to mature this month.
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