Alcoa signs 8-year alumina supply deal with Emirates Global Aluminium

Part of Alcoa’s three-refinery system in Western Australia, the Pinjarra refinery has the capacity to produce more than 4.2 million metric tons of alumina per year – Image courtesy of Alcoa

US aluminum producer Alcoa Corp has signed an eight-year agreement to supply another metal producer, Emirates Global Aluminium (EGA), with smelter grade alumina, both companies said in a statement on Monday.

Alumina is the key raw material used for making aluminum. Prices for the metal used in transport, construction and packaging hit their lowest since Oct. 31 last week on concerns about demand from top consumer, China.

Hopes that demand for aluminum would rise in the long-term along with consumption of other metals needed for the global green energy transition are, however, driving appetite for deals in the mining industry.

“Most of our alumina needs into the next decade are now secured by our own production and a long-term supplier in Alcoa,” EGA’s CEO Abdulnasser Bin Kalban said in the statement.

The agreement, which commences in 2024, will allow EGA to procure as much as 15.6 million tonnes of alumina from Western Australia and will represent a significant portion of Alcoa’s annual third-party alumina sales, the companies said.

Australia banned exports of alumina to Russia in 2022 after Moscow invaded Ukraine, causing a jump in production costs of Alcoa’s and EGA’s rival aluminum producer – Russia’s Rusal.

The agreement will make Alcoa EGA’s largest third-party supplier of alumina, the companies said. EGA operates smelters in Abu Dhabi and Dubai, an alumina refinery in Abu Dhabi, and a bauxite mine in Guinea. Its alumina refinery met 47% of EGA’s total alumina needs in 2022.

(By Polina Devitt; Editing by Marguerita Choy)

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