Significant uptrend: 50pc increase in aluminium prices on London Metal Exchange bolsters earnings
MUSCAT: Buoyed by high aluminium prices on international commodity markets, Sohar Aluminium has announced that it has achieved the “highest financial performance in its history” last year.
The primary aluminium producer, which is 40 per cent owned by OQ Group – the integrated global energy group of the Sultanate of Oman – made the announcement in its latest Sustainability Report for 2021. It did not provide figures, but noted that its “strong cost performance” also contributed to its upbeat 2021 results.
“Our journey in 2021 saw yet another successful chapter written in our story of achievements and milestones. Attributed mainly to the efforts of our workforce, these successes prove our continuous commitment to excellence, quality, and empowerment of our employees,” Eng Said bin Mohammed al Masoudi (pictured), CEO – Sohar Aluminium, noted in the CEO’s message.
“In 2021, we further reiterated our commitment to Environment, Social and Governance (ESG) by becoming a “Production and Transformation” Member in the Aluminium Stewardship Initiative (ASI), joining more than 190 global producers, upstream, downstream, supporters, users, and stakeholders in the aluminium value chain,” he added.
Significantly, primary metal production in 2021 amounted to 395,360 tonnes – the second highest in its 13-year operational history. However, the figure was marginally lower by 0.39 per cent compared to the previous year’s output of 396,929 tonnes, it said.
Established in 2004 with an investment of around $2.4 billion, the joint venture company – owned by OQ (40 per cent), Abu Dhabi government-owned TAQA (40 per cent), and global mining giant Rio Tinto (20 per cent) – is well recognised for its technologically advanced and environmentally-friendly smelter at the heart of its operations. Also integrated with the 390,000 tonne-capacity smelter at Suhar are a 1,000 MW dedicated power plant and port facilities.
“Sohar Aluminum benefited from the post-Covid economic recovery, reflected in both the volumes and price,” said shareholder TAQA in its 2021 Annual Report. It noted that aluminium prices on the London Metal Exchange (LME), the world’s principal commodities exchange that deals in metals futures and options, increased by approximately 50 per cent in 2021 compared to the previous year.
Another key highlight of its operational performance last year was the achievement of its goal to supply 60 per cent of its liquid metal output to local industrial consumers as part of its In-Country Value (ICV) commitment.
Last year, Synergies Casting Oman (SCO) – a plant operating close to the aluminium smelter – received 48 tonnes of hot metal as part of its commissioning. SCO specialises in manufacturing high-end aluminium alloy wheels for the global automotive industry.
“With this step, and by the time SCO’s plant reaches full capacity, Sohar Aluminium’s cumulative supply commitment to local customers would ramp up to 60 per cent of the total metal produced; a target that has been sought ever since the establishment of the company,” said Sohar Aluminium in its Sustainability Report. “The company is committed to contribute significantly to Oman’s burgeoning downstream metals industry, both through the direct supply of metals to local manufacturers and strong participation in local markets for the procurement of goods and services,” it further noted.
The biggest consumer of Sohar Aluminium’s hot metal is Oman Aluminium Rolling Company (OARC), which lifted 119,467 tonnes of liquid metal in 2021. Other consumers are Oman Aluminium Processing Industries LLC (OAPIL) – 54,000 tonnes, and Oman Aluminium Cast (3,700 tonnes).
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