Value chain

EGA and Saudi Ma’aden cooperate on aluminum value chain technology

Officials from Emirates Global Aluminum and Saudi Arabian Mining Company sign the agreement.

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

EGA Vice Chairman Saeed Mohammed Al Tayer and EGA Board Member Musabbeh Al Kaabi witnessed the signing in Dubai by EGA Chief Executive Abdulnasser Bin Kalban and Riyad Al Nassar, Executive Vice President of Ma’aden’s Aluminum business. The agreement extends a memorandum of understanding originally signed in 2018.

The companies will explore cooperation on the development of aluminum smelting technology, including new technologies with low greenhouse gas emissions. EGA and Ma’aden will also consider cooperation in the management of by-products from aluminum value chain processes and aluminum recycling.

Bin Kalban said, “We are delighted to extend our agreement with Ma’aden on potential cooperation in technology and other developments to further support the sustainability of our two companies. Success in solving grand challenges can only be accelerated if companies work together. »

Al Nassar said, “Aluminum is one of the world’s most crucial metals for many global industries as they enter a future driven by the environment and sustainability. This partnership aims to increase cooperation between Ma’aden and EGA to work together, especially towards more sustainable aluminum production.

EGA has been developing its own aluminum smelting technology for over 25 years. EGA has used its technology developed in the UAE for every foundry expansion since the 1990s and has modernized all of its old production lines.

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

Emirates Global Aluminum posted a net profit of Dhs 5.5 billion ($1.5 billion), an increase of 1,140% from Dhs 445 million ($121 million) in 2020.

EGA reported record adjusted earnings before interest, tax, depreciation and amortization (Adjusted EBITDA) that more than doubled to Dhs 9.0 billion ($2.5 billion) in 2021 from Dhs 4.1 billion ($1.1 billion) for 2020.

EGA’s strongest results ever were due to a strong global market for aluminum as economies recovered from COVID-19, strong operational performance across the value chain and a strong focus on efficiency improvements across the business. Production and sales of each product in the value chain increased in 2021 compared to 2020. The average price of aluminum realized by EGA on the London Metal Exchange for 2021 was $2,382 per tonne.

Revenue in 2021 was Dhs 25.5 billion ($6.9 billion), compared to Dhs 18.7 billion ($5.1 billion) in 2020.

In 2021, EGA remained the largest producer by volume. The proportion of EGA’s sales represented by value-added products, or “premium aluminum”, reached 84% of total sales, near a record, compared to 72% in 2020. Value-added products attract higher premiums over benchmark prices than those achieved by standard aluminum and allow EGA to maximize its value from primary aluminum production.

EGA has significantly deleveraged in 2021 and optimized its capital structure, enabling better future dividend payments to shareholders and creating financial flexibility for future growth.

EGA reduced its senior debt facility from Dhs 2.7 billion ($730 million) to Dhs 20.3 billion ($5.5 billion), proceeded to early and then full repayment of outstanding project financing of 1.6 billion Dhs (446 million dollars) for the construction of the Al Taweelah smelter, and made scheduled repayments on the debt of the Guinea Alumina Corporation. In total, EGA repaid Dhs 4.4 billion ($1.2 billion) of debt in 2021. EGA’s Net Debt to Adjusted Ebitda ratio was 2.4x at the end of the year.

EGA shareholders received Dhs 735 million ($200 million) in dividends in 2021. In addition, JA Power & Water Co, which owns the highly efficient Jebel Ali H-block power plant, was acquired from the shareholders for 1.6 billion Dhs (438 million dollars). ) in December 2021. EGA’s EBITDA margin was 35% (2020: 22%), one of the highest among industry peers.

W.A.M.