Rio Tinto Stalls $3 Billion Abu Dhabi Aluminum Smelter as Gas Feed Moves to Other Industries, an Industrial Info News Alert

JOHANNESBURG, SOUTH AFRICA -- (MARKET WIRE) -- 07/29/08 -- Researched by Industrial Info Resources (Sugar Land, Texas) -- As more projects for gas-fired power plants are announced in the Middle East, the gas resource, which once seemed abundant and readily available, has now become a key factor in the viability of industrial projects and development plans. At a time when three new power projects have been announced, Rio Tinto (RTP) (London) has canceled or, at best, postponed a $3 billion aluminum smelter planned for Abu Dhabi, as an official policy shift has given priority for natural gas feeds to other industrial applications such as chemicals, fertilizers and liquefied natural gas. In Jordan, Korea Electric Power Corporation (KEP) (Seoul, South Korea) has been awarded selected bidder status by Jordan's government to build a 373-MW gas-fired power plant in Al Quatrana. The cancellation of the 700,000-ton-per-year Abu Dhabi smelter does not mean that Rio Tinto is backing off of new projects in the Middle East or elsewhere when the power-supply-production equation can be balanced. According to report by Alcoa (AA) (Pittsburgh, Pennsylvania), with a 24% increase in aluminum prices in 2008, demand is forecast to double by 2020, which will require 80 new smelters each with an average production capacity of 400,000 tons per year.