EGA, Saudi Ma’aden cooperate on aluminium value chain technology

Emirates Global Aluminium (EGA) and Saudi Arabian Mining Company (Ma’aden), Saudi Arabia’s national mining company, have signed an agreement to extend their exploration of potential collaboration on technology in the aluminium value chain.

Saeed Mohammed Al Tayer, EGA’s Vice Chairman, and Musabbeh Al Kaabi, EGA Board member, witnessed the signing in Dubai by Abdulnasser Bin Kalban, EGA’s Chief Executive Officer, and Riyadh Al Nassar, Senior Vice President of Ma’aden’s Aluminium business. The agreement extends a Memorandum of Understanding signed initially in 2018.

The companies will explore cooperation on aluminium smelting technology development, including novel technologies with lower greenhouse gas emissions. EGA and Ma’aden will also consider cooperation in managing by-products from processes in the aluminium value chain and aluminium recycling.

Bin Kalban said, “We are pleased to extend our agreement with Ma’aden on potential cooperation in technology and other development to further support our two companies’ sustainability. The successful tackling of big challenges can only be accelerated by companies working together.”

Al Nassar said, “Aluminium is one of the world’s most crucial metals for many global industries going into a future-focused on environment and sustainability. This partnership aims to increase the cooperation between Ma’aden and EGA to work together, including towards more sustainable aluminium production.”

EGA has developed its own aluminium smelting technology for more than 25 years. EGA has used its UAE-developed technology for every smelter expansion since the 1990s and has retrofitted all its older production lines.

Ma’aden operates the largest and most efficient vertically integrated aluminium complex in Ras Al Khair on Saudi Arabia’s east coast.

Emirates Global Aluminium reported a net profit of Dhs5.5 billion ($1.5 billion), an increase of 1,140 per cent compared to Dhs445 million ($121 million) in 2020.

EGA reported record adjusted Earnings Before Interest, Tax, Depreciation and Amortisation (adjusted Ebitda) more than doubled to Dhs9.0 billion ($2.5 billion) for 2021, from Dhs4.1 billion ($1.1 billion) for 2020.

EGA’s strongest-ever results were due to a strong global market for aluminium as economies recovered from COVID-19, solid operational performance throughout the value chain, and a focus on efficiency improvements throughout the company. Production and sales of every commodity in the value chain increased in 2021 compared to 2020. EGA’s average realised London Metal Exchange aluminium price for 2021 was $2,382 per tonne.

Revenue in 2021 was Dhs25.5 billion ($6.9 billion), compared to Dhs18.7 billion ($5.1 billion) in 2020.

In 2021 EGA continued to be the largest producer by volume. EGA’s proportion of sales accounted for by value-added products, or ‘premium aluminium’ rose to 84 per cent of total sales, close to a record, compared to 72 per cent in 2020. Value-added products attract higher premiums over benchmark prices than those achieved by standard aluminium and enable EGA to maximise its primary aluminium production value.

EGA significantly deleveraged during 2021 and optimised its capital structure, enabling enhanced future dividend payments to shareholders and creating financial flexibility for future growth.

EGA reduced its senior corporate debt facility by Dhs2.7 billion ($730 million) to Dhs20.3 billion ($5.5 billion), made scheduled and then full early repayment of the outstanding Dhs1.6 billion ($446 million) project financing for the construction of Al Taweelah smelter, and made scheduled repayments on Guinea Alumina Corporation debt. In total, EGA repaid Dhs4.4 billion ($1.2 billion) of debt in 2021. EGA’s net debt to adjusted Ebitda ratio stood at 2.4x at the end of the year.

EGA’s shareholders received Dhs735 million ($200 million) in dividends in 2021. Additionally, JA Power & Water Co, which owns the highly-efficient H-block power plant at Jebel Ali, was acquired from the shareholders for Dhs1.6 billion ($438 million) in December 2021. EGA’s Ebitda margin was 35 per cent (2020: 22 per cent), one of the highest amongst industry peers.

WAM