The United Arab Emirates plans to produce 10 percent of the world's aluminum within a decade as it seeks to utilize the availability of low-cost energy, threatening the survival of European competitors, a government official said.
Abu Dhabi, the largest sheikhdom in the UAE, is planning to build two plants to add to the country's existing producer Dubai Aluminium, Sheikh Hamed bin Zayed al-Nayhan, chairman of the Department of Planning and Economy, said Sunday. "Industries will migrate to the UAE to take advantage of a more competitive cost structure," Sheikh Hamed said.
Smelters in regions with cheaper energy are replacing unprofitable plants in Europe. Last year Norway's Norsk Hydro and Montreal-based Alcan said they planned to shut smelters in Germany and Switzerland. Hydro is mulling a 570,000-tonne facility in Qatar. By the end of this year, about 300,000 tonnes of European annual production capacity will have shut due to higher costs, Citigroup said in February.
Persian Gulf states such as Saudi Arabia, the UAE, Qatar and Oman are investing in aluminum smelters to utilize abundant gas and low-cost labor.
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