São Paulo – Brazilian mining company Vale do Rio Doce announced on Tuesday (14th) its association with Dubai Aluminium (Dubal), from the United Arab Emirates, in project Pará Alumina Company (CAP), which is responsible for the construction and operation of a refinery in the city of Barcarena, close to Pará state capital Belém.
According to the purchase and sales contract signed between both companies, Vale should have 61% of the capital of CAP, Dubal, 19%, and the other 20% remain with the Norwegian Hydro Aluminium. When the project was announced, in September last year, there was only participation of Vale and Hydro, with 80% for the former and 20% for the latter.
Vale is expanding its relations with the Arab countries to beyond the simple supply of ore. Apart from the sale of shares in CAP to Dubal, the company is currently building an iron ore pelleting plant and a maritime terminal in Oman, with investment of US$ 1.3 billion.
According to information disclosed by Vale, the refinery in Pará should have an initial capacity for production of 1.86 million tonnes of alumina per year, with capacity for expansion to 7.4 million. Investment forecasted for the first phase, as announced by the company in September, is US$ 2.2 billion.
The new factory should be close to Alunorte, another alumina factory controlled by Vale that is located in the same city. The start of operations is forecasted for late 2012, "according to market conditions", says a company press statement. When the project was announced, the forecast was for production to begin in the first half of 2001.
Together with the construction of CAP, Vale announced investment in the expansion of bauxite production at mine Paragominas, also in Pará. The idea is for the project denominated Paragominas III to supply the raw material to the new alumina mill. According to the company, estimated investment is US$ 487 million, which should expand the production capacity of the mine from 9.9 million tonnes a year to 14.85 million.
Alumina, or aluminium oxide, is an intermediary product in the aluminium production chain, obtained from the refining of bauxite. The countries of the Gulf, among them the Emirates, have invested heavily in the industry that consumes high levels of energy, due to the great availability of oil and gas in the region.
The Vale press department did not supply further information about the deal with Dubal, stating that the organisation is listed, having to follow capital market regulations and only being able to disclose what has been authorised by the Investor Relations department.
The partners
Dubal belongs to the emirate of Dubai and is one of the main industrial enterprises of the United Arab Emirates outside the oil sector. The company was established in 1979 and currently has 280 clients in 46 countries, according to information disclosed on the organisation’s website. It is installed in an area of 480 hectares in Jebel Ali.
The company produces mainly aluminium alloys for the auto industry, metal profiles for the building industry and primary aluminium for the electronic and aerospace sectors. Last year, the company produced 945,000 tonnes of metal, an increase of 0.4% over 2007. Revenues totalled 9.1 billion dirhams (almost US$ 2.5 billion at current exchange rates). Profit in 2008 totalled 2.2 billion dirhams (US$ 600.8 million), growth of 16%.
Vale, in turn, is the second main mining company in the world and the main producer and exporter of iron ore. Although its main business is iron ore, the Brazilian company operates with other material, like nickel, manganese, bauxite, alumina, aluminium, copper, coal, cobalt, precious metals and potassium, as well as operating in the area of cargo transport.
The company had revenues of US$ 38.5 billion last year, growth of 16.3% in comparison with 2007. The net flow in 2008 was US$ 13.2 billion, a historic record for the company and 11.9% over the previous year.
*Translated by Mark Ament
