Sohar Aluminum plans to invest USD 3 billion

Sohar Aluminum Company of Oman will proceed with its plan to double its present aluminum capacity of 370,000 tonnes per annum with an envisaged capital expenditure of USD 3 billion if the government commits additional natural gas.

Mr Henk Pauw CEO of Sohar Aluminum said that the Ministry of Oil and Gas will take a final decision before November this year on whether gas will be available for the proposed capacity expansion. We are optimistic. It is not up to us but the government has to decide. We have presented a very strong case for creating jobs with downstream industries. If we get natural gas, the expansion project will be completed within three years.

Mr Pauw said that the British energy giant BP is in the process of determining the exact volume of gas they can get from block 61. We need the gas out of block 61. If that is not met with success, there will not be enough gas for Oman. We need to approach Dolphin. The company which produces aluminum ingots and sows will need 1 TCF of gas for the expansion which is also equivalent to the current energy consumption of the plant.

He said that the power generation capacity also needs to be doubled if the company proceeds with its plan to double capacity. The expansion will also create an additional 600 direct jobs and 1,500 indirect employment opportunities.

Presently, the company directly employs 1,039 workers while another 1,624 are working for companies providing support services, export handling and downstream units. Further another 2,265 workers are employed indirectly taking the total employment opportunities in the entire chain to 4,928.

Mr Pauw said that his company's Omanisation target is 85% by 2014 which is against 73% by March 2011. The company needs to take an additional 300 local people for achieving the set target. The company is committed to Omanisation, 733 out of 1,039 employees are Omanis. Of this, 623 Omani employees are from Al Batinah region.

He revealed that the average annual compounded growth in demand for aluminum in Middle East region is estimated at 6 per cent until 2020. With the current production of aluminum around three to four plants of the size of Sohar Aluminum are needed to meet the world demand. The projected aluminum demand in the region is 10 million tonnes per annum which is against the present installed capacity of 4.2 million tonnes.

Sohar Aluminum is the first smelter in the world to implement Rio Tinto Alcan's benchmark AP36 smelting technology the most energy efficient and productive smelting technology commercially available. It is the most modern smelter in the world with the best technology available ensuring environmental protection. On the corporate social responsibility front, the company has committed 1.5% of its shareholder's profits. This was around USD 1 million in 2010 and estimated at USD 1.725 million for 2011.