Aluminium Bahrain (Alba) is inviting international companies before the end of the year to bid for a $1.7 billion expansion project to raise the smelter's capacity by 50 per cent.

Alba Chief Executive Bruce Hall said the smelter planned to produce 513,000 tonnes in 2001 and around the same amount in 2002. Production was 509,000tonnes in 2000.

"We will be sending out invitations for tenders before the end of the year. We will invite all big companies that we believe are capable of building the plant," said Hall, who took up his post in September. The project will add 250,000 tonnes per year (tpy) to the plant's current production capacity of 500,000 tpy. The Bahraini government gave its final approval in September to the expansion.

Hall said Alba would go to the market in the first quarter of 2002 for $1.53 billion in bank loans to finance the scheme. The rest would be provided by shareholder equity.

The official indicated that work would begin in late 2002 and would take 33 months. When completed, the smelter would be the biggest in the Middle East.

Alba is 77 per cent owned by the Bahraini government, 20 per cent by Saudi Arabia's Public Investment Fund and three per cent by German group Breton Investments.

Hall said the September 11 attacks on the United States had not affected the company's sales.

Alba sells around 65 per cent of its products to customers in the six Gulf Arab states. The remainder goes mainly to the Far East and South East Asia.

Alba officials have said the expansion project was essential for Bahrain's economy as a whole, for job creation and for boosting local aluminium downstream industries in particular.