Bahrain's Alba seeks exemption from U.S. aluminum tariffs: CEO
LONDON (Reuters) - Aluminium Bahrain (Alba), owner of one of the world’s largest aluminum smelters, is seeking an exemption from U.S. tariffs, its chief executive said on Tuesday.
“We are in the process of doing that application,” Tim Murray told Reuters on the sidelines of a conference in London.
If the United States did not grant an exemption, “ultimately the tariffs will be passed along in terms of the Midwest pricing... the consumer is going to pay”, Murray said, referring to the price of aluminum delivered, duty-paid, to plants in the U.S. Midwest.
Alba, majority-owned by the Bahraini government through state fund Mumtalakat, currently exports 120,000 tonnes of aluminum to the United States.
President Donald Trump last month announced a 25 percent tariff on steel imports and 10 percent tariff on aluminum imports to counter what he has described as unfair international competition.
Canada, Mexico and the European Union were granted temporary exemptions.
Alba’s Line 6 expansion project is on track to start production at the beginning of 2019 and become the world’s largest single aluminum smelter complex with output of 1.5 million tonnes annually, Murray said.
The company plans to fund the project with $2.5 million of debt and $500 million of self-funded equity from Alba, he said.
Alba would export more into the United States once its project has fully ramped up but this would be at a lower scale than previously planned if the tariff exemption is not granted, he said.
Trump’s trade tariffs are designed to boost domestic production of aluminum in the hope that companies will move their mills and smelters to the United States.
Aluminum prices have swung sharply since Washington, in response to what it called “malign activity” by Russia, imposed sanctions on April 6 on 24 Russians, including metals tycoon Oleg Deripaska and a number of his companies including Rusal, one of the world’s biggest aluminum producers.