The planned merger of the two big UAE aluminium smelters has ushered in a flurry of natural resource agreements as the economy enters a new phase of diversification.
The tie-up between Dubai Aluminium (Dubal), the biggest smelter in the Arabian Gulf region, and Abu Dhabi’s Emirates Aluminium is expected to create a US$15 billion enterprise that will be the world’s fifth largest aluminium producer by output by 2014, when Emal’s second-phase expansion finishes.
At that point the combined capacity of the two smelters is expected to be 2.4 million tonnes a year.
To feed this goliath, the Emirates has struck a number of related deals.
“The aluminium industry in UAE has now moved from being a regional company to an international company because they have interests in the raw material bauxite in different locations around the world,” said Mahmood Daylami, the secretary general of the non-profit Gulf Aluminium Council.
“For the last 30 years, the UAE and the rest of the Gulf till today purchased their raw material from various sources in the world, but mainly form Australia. However, it is strategically important to have your own source of raw material.”
The latest UAE purchase agreement involves a $5bn investment in Guinea for a bauxite mine, alumina refinery and a port in the world’s top supplier of bauxite, the raw material used in aluminium production. Alumina is refined bauxite that is used in smelters.
Guinea is estimated to have more than 25 billion tonnes of bauxite.
Abu Dhabi’s Mubadala and Dubal signed the deal through Guinea Alumina Corporation (GAC), a joint venture firm owned by the two companies.
Under the agreement, GAC will build a bauxite export mine to be operational by 2017 and an alumina refinery with an initial capacity of 2 million tonnes per year. Work on the refinery will begin in 2018, with the first commercial output expected in 2022.
In May, Mubadala and Dubal announced they were jointly taking over the GAC project in Guinea, acquiring a 66.6 per cent stake from BHP Billiton and Global Alumina, two international mining companies. Mubadala and Dubal had previously been minority investors in the project, owning 8 per cent and 25 per cent of GAC respectively.
Mubadala had also signed in 2011 an agreement to build a calcined petroleum coke facility in China in a joint venture that will produce a material used in smelters to produce aluminium.
Dubal has a 45 per cent stake in the joint venture Cameroon Alumina, which will develop bauxite mining, a 3 million tonnes a year alumina refinery, and associated infrastructure. Dubal has a 19 per cent stake in the joint venture Companhia de Alumina do Pará in Brazil, which is building an alumina refinery.
The UAE is buying resources to compete with global players in the aluminium industry, which is currently dominated by conglomerates, such as Rio Tinto and Alcoa, some of which have joint ventures in the Arabian Gulf.
But the Emirates is not alone in the region in seeking to build an aluminium industry as part of a mining industry, which is becoming the third pillar of energy revenue across the region after energy products and petrochemicals.
“Gulf countries are looking at diversifying their economy into non-oil sectors for twin benefits, which are reducing risk of oil dependency and generating employment for citizens,” said Venkatesan Subramanian, a metals and minerals executive at Frost & Sullivan.
“The UAE has a unique advantage of an established aluminium industry as compared to other countries in the region. Having invested in smelters, the UAE is looking to vertically integrate into upstream and downstream in the future,” he said.
“Globally, aluminium is a growing sector and is considered to be metal of the future, especially due to its properties like lower weight, corrosion resistance and higher electrical conductivity.”
The UAE is not just focusing on the upstream investments in aluminium industry. It is also seeking to create a specialised downstream industry through various ventures that could utilise aluminium products. Mubadala for example, is building an aerospace industry with partnerships with companies including GE, Boeing and Airbus.
“There is now a strong drive by the UAE and the Gulf states to attract more downstream investments to the Gulf to utilise the large quantity of aluminium available, but still the aluminium produced in the Gulf is still export oriented,” said Mr Daylami. “Seventy-five per cent of aluminium produced in the Gulf is exported to different parts of the world and will continue to do that.”
The UAE and other GCC governments are seeking from the aluminium industry the same benefits elicited from the petrochemical industry, which has created in all Gulf countries a revenue stream besides oil and gas products, an industry manufacturing value-added products for a local industry and exports, and companies and services around petrochemicals that have boosted economic growth.
“Relatively cheap energy is a fundamental comparative advantage of the Gulf economies given their substantial energy endowments. The energy hungry nature of the metals industry renders it an obvious choice to focus on,” said Giyas Gokkent, the chief economist of National Bank of Abu Dhabi.
“Metals have use in a wide range of sectors from transportation, packaging, construction, industrial, and so on. The pursuit of plans to diversify their economic base has a self-reinforcing aspect. In other words, availability of domestic production will encourage and support growth in related industries as well.”
The smelters in the UAE are also new and employ the latest technology that allows them to consume less energy than other smelters that suffer from high cost of energy. Several old smelters in the West have closed down due to drop in aluminium prices and demand as high Chinese production floods the market.
“Smelters being energy intensive, countries like the UAE have an advantage of lower cost of production due to lower energy prices; and are hence, attracting investments in the aluminium sector,” said Mr Subramanian.
“The UAE can become the global hub of aluminium industry due to its excellent infrastructure and utilities, skilled manpower availability, and logistic advantage serving proximity to markets in the Gulf as well as Europe, Asia, Africa and American geographies.”
business@thenational.ae
10 tips for entry-level job seekers
- Have an up-to-date, professional LinkedIn profile. If you don’t have a LinkedIn account, set one up today. Avoid poor-quality profile pictures with distracting backgrounds. Include a professional summary and begin to grow your network.
- Keep track of the job trends in your sector through the news. Apply for job alerts at your dream organisations and the types of jobs you want – LinkedIn uses AI to share similar relevant jobs based on your selections.
- Double check that you’ve highlighted relevant skills on your resume and LinkedIn profile.
- For most entry-level jobs, your resume will first be filtered by an applicant tracking system for keywords. Look closely at the description of the job you are applying for and mirror the language as much as possible (while being honest and accurate about your skills and experience).
- Keep your CV professional and in a simple format – make sure you tailor your cover letter and application to the company and role.
- Go online and look for details on job specifications for your target position. Make a list of skills required and set yourself some learning goals to tick off all the necessary skills one by one.
- Don’t be afraid to reach outside your immediate friends and family to other acquaintances and let them know you are looking for new opportunities.
- Make sure you’ve set your LinkedIn profile to signal that you are “open to opportunities”. Also be sure to use LinkedIn to search for people who are still actively hiring by searching for those that have the headline “I’m hiring” or “We’re hiring” in their profile.
- Prepare for online interviews using mock interview tools. Even before landing interviews, it can be useful to start practising.
- Be professional and patient. Always be professional with whoever you are interacting with throughout your search process, this will be remembered. You need to be patient, dedicated and not give up on your search. Candidates need to make sure they are following up appropriately for roles they have applied.
Arda Atalay, head of Mena private sector at LinkedIn Talent Solutions, Rudy Bier, managing partner of Kinetic Business Solutions and Ben Kinerman Daltrey, co-founder of KinFitz
School counsellors on mental well-being
Schools counsellors in Abu Dhabi have put a number of provisions in place to help support pupils returning to the classroom next week.
Many children will resume in-person lessons for the first time in 10 months and parents previously raised concerns about the long-term effects of distance learning.
Schools leaders and counsellors said extra support will be offered to anyone that needs it. Additionally, heads of years will be on hand to offer advice or coping mechanisms to ease any concerns.
“Anxiety this time round has really spiralled, more so than from the first lockdown at the beginning of the pandemic,” said Priya Mitchell, counsellor at The British School Al Khubairat in Abu Dhabi.
“Some have got used to being at home don’t want to go back, while others are desperate to get back.
“We have seen an increase in depressive symptoms, especially with older pupils, and self-harm is starting younger.
“It is worrying and has taught us how important it is that we prioritise mental well-being.”
Ms Mitchell said she was liaising more with heads of year so they can support and offer advice to pupils if the demand is there.
The school will also carry out mental well-being checks so they can pick up on any behavioural patterns and put interventions in place to help pupils.
At Raha International School, the well-being team has provided parents with assessment surveys to see how they can support students at home to transition back to school.
“They have created a Well-being Resource Bank that parents have access to on information on various domains of mental health for students and families,” a team member said.
“Our pastoral team have been working with students to help ease the transition and reduce anxiety that [pupils] may experience after some have been nearly a year off campus.
"Special secondary tutorial classes have also focused on preparing students for their return; going over new guidelines, expectations and daily schedules.”
THE LIGHT
Director: Tom Tykwer
Starring: Tala Al Deen, Nicolette Krebitz, Lars Eidinger
Rating: 3/5
COMPANY PROFILE
Name: Mamo Year it started: 2019 Founders: Imad Gharazeddine, Asim Janjua Based: Dubai, UAE Number of employees: 28 Sector: Financial services Investment: $9.5m Funding stage: Pre-Series A Investors: Global Ventures, GFC, 4DX Ventures, AlRajhi Partners, Olive Tree Capital, and prominent Silicon Valley investors. Our legal advisor
Ahmad El Sayed is Senior Associate at Charles Russell Speechlys, a law firm headquartered in London with offices in the UK, Europe, the Middle East and Hong Kong.
Experience: Commercial litigator who has assisted clients with overseas judgments before UAE courts. His specialties are cases related to banking, real estate, shareholder disputes, company liquidations and criminal matters as well as employment related litigation.
Education: Sagesse University, Beirut, Lebanon, in 2005.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Banned items
Dubai Police has also issued a list of banned items at the ground on Sunday. These include:
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Political flags or banners
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Bikes, skateboards or scooters
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
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Gearbox: 10-speed automatic
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Fuel economy, combined: 11.2L/100km
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'Worse than a prison sentence'
Marie Byrne, a counsellor who volunteers at the UAE government's mental health crisis helpline, said the ordeal the crew had been through would take time to overcome.
“It was worse than a prison sentence, where at least someone can deal with a set amount of time incarcerated," she said.
“They were living in perpetual mystery as to how their futures would pan out, and what that would be.
“Because of coronavirus, the world is very different now to the one they left, that will also have an impact.
“It will not fully register until they are on dry land. Some have not seen their young children grow up while others will have to rebuild relationships.
“It will be a challenge mentally, and to find other work to support their families as they have been out of circulation for so long. Hopefully they will get the care they need when they get home.”
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
The specs
Engine: 4.0-litre flat-six
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Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
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What is tokenisation?
Tokenisation refers to the issuance of a blockchain token, which represents a virtually tradable real, tangible asset. A tokenised asset is easily transferable, offers good liquidity, returns and is easily traded on the secondary markets.
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Scoreline:
Cardiff City 0
Liverpool 2
Wijnaldum 57', Milner 81' (pen)
