Should Aluminium Bahrain (Alba) decide to take up a Line 6 expansion, it would be a good project from the financial standpoint, said its CEO Bruce Hall.

“We have calculated an internal rate of return of 16 per cent,” Hall said, indicating that such a level was attractive for a project to be taken up.
Although no decision has yet been taken, the company is looking at an expansion of 310,000 tonnes from the 840,000 tonnes in total production capacity that will be realised after the ongoing Line 5 is completed next year. Alba’s current capacity is around 520,000 tonnes.
Line 6 would incur an investment of $1.3 billion compared with the $1.7 billion outlay for Line 5, whose expansion is nearly as much as what is suggested for Line 6.
Hall said the cost would be lower because “we can capitalise on quite a lot of synergy from the present plant.”
But he maintained that Line 6 had still not been formally discussed at the board level, although directors and company officials had talked about it.
Hall’s remarks came at the end of a signing ceremony for a credit line of $450 million that Alba received from HSBC and BNP Paribas. With that amount Alba has secured the entire credit amount of $1.7 billion for the Line 5 expansion of its plant. The $450 million financial package has been guaranteed by France and Switzerland, which export technology and equipment to Alba.
Oil Minister and Alba chairman Shaikh Isa bin Ali Al Khalifa  signed the two financing agreements with HSBC and BNP Paribas at a ceremony held at the Ritz-Carlton Hotel in Manama
Alba’s Line 5 expansion was occurring at a time of bright prospects for the aluminium industry, Hall commented.
“We are about to enter a period of higher growth in demand for aluminium. There’s definitely a higher turnover in the world economy and there’s pressure for the replacement of heavy vehicle components with parts involving aluminium,” he added.
Hall also said China’s consumption of base metals including aluminium was growing at a fast pace, which was good news for operators such as Alba.
In other remarks, the official said the issue of US firm Alcoa taking a stake in Alba remained with the Ministry of Finance for a decision. Bahrain owns 77 per cent of Alba, Sabic 20 per cent and German group Breton Investments three per cent.
According to a non-binding MoU signed last year, Alcoa said it would take 26 per cent of the stake in Alba and provide it with its requirements of alumina, the raw material needed for the production of aluminium. Last September, Hall had said the stake in question involved  $600 million. Remaining to be finalised are the details of the supply agreement and how much Alcoa would have to pay for its stake.
“We do know however there is genuine interest both in Alcoa and the ministry to conclude a deal,” he said, adding he could not say when a decision could be taken.
In the event Alcoa joins as a partner in Alba “it is my understanding that it would want to expand the plant.”
But he asserted that even if the US firm was not in the picture, the existing shareholders “are quite capable of expanding the plant.”
Alba currently contributes $200 million per year to the national economy, which is in the range of seven to eight per cent of the GDP. With the Line 5 expansion, the contribution is expected to increase to approximately $300 million per year.
According to Hall, the Line 5 Project will bring about recognition for Bahrain on an international level and help open up new gateways to foreign investment.
As well as its reduction lines and casthouses, the company has a dedicated carbon department and a 1,500MW power plant.  A 450,000 tonnes per annum coke calcining plant is also in operation at the company’s marine terminal.
The entire plant operates to the Environmental Management System standard ISO14001. The casthouses and marketing are operating to the ISO 9002 Quality Management System.
Alba has also initiated a programme to train Bahraini youths in skills that could help them gain employment in the company.