Dubai: Dubai Aluminium Co., or Dubal, has bought a 20 per cent stake in a calciner development project in China as it seeks to secure its raw materials supply and mitigate quality concerns, the firm said on Saturday.
The stake was purchased as part of a joint venture with Sinoway Carbon Energy Holdings, Hong Kong, for an undisclosed sum, Dubal said in an emailed statement.
The new venture, known as Sinoway Carbon Company Ltd, entails the construction of a 560,000 tonnes per annum calciner in Shandong, China.
Dubal said the end-product of the calcination process, calcined petroleum coke, is a strategic raw material for the aluminium smelting industry and the company will be entitled to an annual off-take volume of CPC for its smelting operations.
While noting rising CPC prices due to raw material supply constraints, Abdullah Kalban, Dubal’s president and chief executive, said: “CPC is one of the main drivers for cost of production, hence an important factor in the business equation. With a secure supply of suitable quality CPC from Sinoway calciner, Dubal will be well placed to counter this trend, with direct benefits to the bottomline.”
The Sinoway calciner is being built in two equal phases and construction of the first phase is at an advanced stage with completion scheduled for May this year. Phase two is scheduled for completion in the fourth quarter of 2013, the company said.
