Dubai Aluminium Company, DUBAL, which has one of the world's largest single site aluminium smelter, has officially signed a historic Joint Venture Agreement with Larsen & Toubro, India's leading diversified engineering and construction conglomerate for bauxite mining-cum-alumina refinery and smelter project in the eastern Indian state of Orissa.
The project has already been approved by Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, the UAE Minister for Finance and Industry and Chairman of DUBAL. His Highness Sheikh Hamdan had earlier reviewed the 10-year future programme for DUBAL. Under the 10-year programme it was decided to strategically position DUBAL in the future development path with highly growth-intensive long-term initiatives.
"This historic agreement is a pure reflection of the wise vision of HH Sheikh Hamdan bin Rashid Al-Maktoum, which aims to achieve the constant excellence of Dubal. The agreement will pave the way for DUBAL to move faster in its ambitious growth strategy. The Orissa project forms part of our 10-year future plan, which involves securing long-term supplies of key raw materials. DUBAL will certainly benefit from this alliance through L&T's technical expertise and the track record of the private sector conglomerate. This agreement reflects the unique economic relationship between the UAE and India and is considered the UAE’s largest foreign investment in the industrial sector in this country." said Ahmed Humaid Al Tayer, Vice-Chairman, DUBAL.
"L&T has been focusing on developing business relations with GCC Countries. This project being single largest foreign direct investment (FDI) in India by the UAE,, will be fore-runner of many joint projects in the region. The project will bring substantial economic benefits to the people of Orissa including fresh employment generation and wealth creation," said Mr. .A.M.Naik, Chairman & Managing Director of L&T.
"For DUBAL, the project is seen as one way of safeguarding its investment in the smelting segment. This project is an opportunity to partially secure raw materials supply for our capacity expansion programmes. An additional benefit to the Indian state of Orissa is the smelter that DUBAL intends setting up during the second phase of the project," said Mr. Abdulla J. M. Kalban, Chief Executive Officer, DUBAL.
“L&T as an Engineering Major will have the responsibility for the construction of a major part of the project. Highest Standards of Quality, Safety and Environment will be followed. The project will move at a fast pace with defined milestones “said Mr.A.K.Chhatwani, Executive Vice President of L&T.
DUBAL will have an equity share of 74% with L & T holding the remaining 26% in this massive venture. The upstream integration project's Phase-I consists of a 1.4 million tonnes per annum capacity world class alumina refinery, bauxite mining and development of related infrastructure including a captive power plant, port facility, a township and other utilities.
DUBAL and L&T will ensure that state-of-the-art environmental systems adhering to stringent standards are installed for the project. . The Project, which will opt for the best available technology in the world in order to benefit from high efficiency and productivity, is expected to be commissioned in the second half of 2009. The project will ensure supply of around one million tonnes of alumina per annum – the principal raw material needed for DUBAL.
The financial closure is set to be achieved by the end of 2006 and construction will begin in 2007.
Phase-II of the project will add another 1.5 million tonnes per annum. The second phase also involves construction of an aluminium smelter utilizing DUBAL's own in-house developed technology. This phase is expected to cost around US$2.5 billion, taking the total investment in the project to an estimated US$3.6 billion.
L&T also has been undertaking major projects in Dubai. The company recently won an order from Nakheel, to build a prestigious residential property in Dubai. Out of the total project of AED376 million, L&T's value of works will be AED284 million. The company is also involved in another project for the construction of two 39-storied commercial & office buildings, and two towers of 35-storied and 25-storied luxury condominiums , L&T has been implementing projects in Cement, Power, Refinery, Oil & Gas and Fertilizer sector in the Middle East region.
© 2005 Al Bawaba (www.albawaba.com)
