Alba, one of the world’s largest aluminium smelters, plans to take two key steps in its $3 billion Line 6 expansion by September. 

It will award the engineering, procurement and construction (EPC) contract for Power Station 5 and finalise the syndicated loan tranche over the next two months.

Line 6 will make it the world’s largest single aluminium smelter complex, boosting annual output by 540,000 tonnes to 1.45 million tonnes. 

It was reported earlier that Alba had approached banks for a $750 million syndicated loan towards the financing of the project. 

Key priorities for the rest of the year also include delivering on phase II of its company-wide, cost reduction programme called Project Titan, which aims at reducing cash cost by $100 per tonne of aluminium and stepping-up production capacity to 1,000,000 tonnes per annum by the end of 2017. Alba said savings of $33 per tonne have already been achieved in the year-to-date. 

Alba also said it is aiming to increase value-added sales and increase Line 4 production by implementing a larger anode this year. Value-added sales averaged 55 per cent of total shipments in the second quarter and exceeded 60 per cent for June.

The company said top-line and bottom-line for the first half of the year were driven primarily by the dual collapse of London Metal Exchange (LME) prices and premiums.

Alba reported total sales of BD165.7 million ($441 million) in the second quarter, a drop of 17 per cent when compared with BD199.4 million for the same period last year, while total sales in the first half stood at BD322.2 million, down by 21 per cent from BD405.9 million during the same period last year.

It posted net income of BD16.3 million in the second quarter, down by 45 per cent year-on-year when compared with BD 29.8 million in the same quarter last year. Net income for the first half stood at BD20.5 million against BD67 million for the same period last year.

“The industry is facing tough times, but Alba continues to deliver solid profitability which further strengthens our position for Line 6 financing,” said Alba chairman Shaikh Daij bin Salman Al Khalifa.

“We also look forward to awarding the EPC contract for Power Station 5 in the third quarter.”

The company’s chief executive Tim Murray said it continues to push hard on managing the cost base which has resulted in a strong free cash flow.

The company increased its metal sales in the second quarter by 3.2 per cent year-on-year to record 239,739 tonnes versus 232,193 tonnes in Q2 2015. Production volumes for the same period were 239,126 tonnes versus 238,904 tonnes in Q2 2015.

Alba finished the first half of 2016 by recording 4 million hours without Lost Time Injuries (LTIs).

The company held a tailor-made training workshop on “Teamwork and Alignment – Getting ready for Line 6” for its middle management team.

Designed and delivered by Alba chief finance officer Ali Al Baqali, it focused on the importance of achieving cross-functional synergy as well as horizontal alignment between the various departments towards fulfilling Alba’s common goals and objectives. 

The workshop was inaugurated by Murray and featured a number of case studies, group exercises and the real-life story of the Apollo 13 moon landing mission back in the 1970s.