Aluminium Bahrain, owner of the world's largest aluminium smelter, said on Wednesday it had received government approval for its Line 6 expansion project, which on completion would make it the world's largest single site smelter.

The project is expected to boost the company's annual output by 514,000 tonnes to 1.45 million tonnes a year, stated Shaikh Daij Bin Salman Bin Daij Al Khalifa, the chairman of board of directors at Alba.

He was speaking at the second quarterly meeting of the company's board of directors for 2015.

"One of the biggest industrial projects in Bahrain, the Line 6 Expansion Project is expected to have a big impact on the economy and new job creation. In addition, at least 50 per cent of the new metal production is expected to be sold to existing and new Bahrain downstream customers, said Shaikh Daij.

"The Line 6 Expansion Project will allow Alba to continue its marketing strategy of maintaining its core presence in the GCC and, leverage its global sales offices to directly market the additional metal produced to meet the growing international demand for aluminium," he added.

Thanking the kingdom's leadership for the project approval, Shaikh Daij said: "The Line 6 project will make Alba the largest single-site smelter in the world. In addition, it will strengthen Bahrain’s position as the hub for the downstream aluminium industry in the GCC."

The board had studied various options from the Line 6 Bankable Feasibility Study (BFS) before finally opting for the largest expansion option of 514,000 metric tonnes which will significantly improve Alba’s overall cost position, he stated.
 
By selecting the larger production capacity, the capex associated with the Line 6 Expansion Project will be approximately $3.5 billion versus the prior estimate of $2.5 billion. Included in this capex is the construction of a fifth power station with a capacity of 1,350MW, he added.

Alba said the Line 6 potline will utilise Dubal's DX+ Technology which will bring state-of-the-art technology to optimise cost performance and reduce energy consumption.

The construction is expected to start in 2016 and production to begin in 2019, it said.

Welcoming the move, CEO Tim Murray said: "We are very excited to get the go ahead for the Line 6 Expansion Project and look forward to the many opportunities it will present for both Alba and Bahrain."

The Line 6 Expansion Project is the culmination of the 40 years of history that Bahrain has in the aluminium industry as it will allow the company to optimise both - its cost structure and marketing strategy, he stated.

According to him, the Line 6 Expansion Project will be an important milestone for Alba and will sustain the aluminium industry in Bahrain for many generations to come.

The proposed opening date for Line 6 was dependent on final approval for a gas pricing structure being received from the Bahraini government, though the statement did not say if a gas price agreement has been reached with the government.

The gas price Alba currently pays rose to $2.50 per million British thermal units on April 1 and increases 25 cents every year to 2021, with each increase costing Alba an additional $30 million.

In another development, the board of directors officially appointed JP Morgan, Gulf International Bank (GIB) and National Bank of Bahrain (NBB) as the company’s financial advisors for Line 6 Expansion Project.

Also the board elected Mutlaq Al Morished as an independent board director representing the 10 per cent public listed shares.-Reuters and TradeArabia News Service