Latest news with #SoharAluminium
Zawya
09-07-2025
- Business
- Zawya
Managing price risk in Oman's mineral and metals sector
The Sultanate of Oman is richly endowed with natural resources, including key metallic minerals such as copper, chromite, manganese, lead, zinc, and gold, as well as industrial minerals like limestone, marble, dolomite, gypsum, laterite, silica, salt, and quartzite. These substantial mineral deposits offer significant opportunities for exploration, commercialisation, and value-added processing. Oman also hosts several aluminium manufacturing companies, including the globally renowned Sohar Aluminium, which has helped place the country on the global map in non-ferrous metal manufacturing. However, one of the major challenges facing miners, producers, and traders is managing the inherent price volatility of metals and minerals. Prices of these commodities are largely influenced by international market dynamics—ranging from global demand-supply imbalances to geopolitical developments, currency fluctuations, and broader economic cycles. In such an unpredictable environment, merely focusing on production and sales is no longer sufficient to ensure financial stability or protect profit margins. To address these uncertainties, hedging has emerged as a powerful and essential tool in the risk management arsenal of businesses operating in the commodities space. Hedging allows companies to lock in prices for future transactions, thereby reducing exposure to price fluctuations and providing a greater degree of certainty for planning and budgeting purposes. The London Metal Exchange (LME) plays a vital role in this ecosystem by offering a platform for hedging non-ferrous metals such as aluminum, copper, tin, nickel, zinc, and lead. Oman based producers who export or import these commodities can directly benefit from this established global framework. When a miner or manufacturer decides to hedge, it is akin to taking out an insurance policy against adverse price movements. Although hedging does not prevent price volatility, it significantly cushions the financial impact of such volatility. This enables businesses to focus on operational efficiency and long-term strategy without being derailed by short-term market fluctuations. Hedging in the commodities market typically involves the use of derivative instruments such as forward contracts, futures, options, and swaps. These instruments allow parties to agree on prices today for transactions that will take place in the future, thereby limiting their risk exposure. A forward contract is an agreement between two parties to buy or sell a specific quantity of metal at a predetermined price on a future date. This arrangement is particularly useful for miners and traders looking to secure revenues by locking in sales prices that align with their budgeting and profitability targets. Being customised, forwards are flexible but come with counterparty risk. Futures contracts, on the other hand, are standardised agreements traded on exchanges. They are similar to forwards in function but differ in structure. Because they are exchange-traded, futures offer enhanced transparency, liquidity, and reduced counterparty risk. They are ideal for businesses seeking regulatory oversight and ease of exit or rollover. Options contracts add another layer of flexibility. An options contract grants the buyer the right—but not the obligation—to buy or sell an asset at a specified price within a defined timeframe. A call option gives the right to buy, while a put option gives the right to sell. In both cases, the buyer pays a premium to the seller for this privilege. Options are particularly valuable for companies that want to protect themselves against downside risk while still retaining the potential to benefit from upward price movements. Swaps are another important financial instrument used in hedging. In a typical commodity price swap, one party agrees to pay a fixed price over a given period, while the counterparty pays a floating market price. If market prices rise above the fixed rate, the hedger benefits from cash compensation; if prices fall, they make up the difference. These contracts are often arranged through financial institutions and help businesses stabilise cash flows and revenues across fluctuating markets. In Oman's context, the use of such instruments is steadily gaining ground as companies in the mining and metals sector become more financially sophisticated. As Oman continues to diversify its economy and strengthen its position in global supply chains, robust price risk management strategies will become increasingly vital. Hedging is not merely a financial technique—it is a strategic necessity for ensuring resilience and sustainability in the face of global commodity market volatility. 2022 © All right reserved for Oman Establishment for Press, Publication and Advertising (OEPPA) Provided by SyndiGate Media Inc. (
Zawya
07-07-2025
- Business
- Zawya
Oman: Sohar Aluminium scales up energy efficiency and decarbonisation efforts
MUSCAT: Sohar Aluminium — the country's primary aluminium producer owned 40% by Oman's integrated global energy group OQ — is intensifying its drive to enhance energy efficiency, reduce greenhouse gas (GHG) emissions, and support Oman's broader sustainability ambitions through a series of targeted initiatives. These efforts form part of the company's long-term commitment to operational excellence and environmental stewardship. This report is based on the Sohar Aluminium Sustainability Report 2024, which highlights progress across key areas such as energy management, emissions control, and decarbonisation strategy. Energy plays a critical role in the company's refining and smelting operations, which are among the most energy-intensive industrial processes. Sohar Aluminium predominantly relies on natural gas secured through a long-standing agreement with the Omani government. To ensure business continuity and operational resilience, the company's on-site power plant is also capable of switching to diesel in emergency situations. Following the 2023 Order of Magnitude study—which identified 45 improvement opportunities across electricity, gas, water, and compressed air systems—Sohar Aluminium has implemented several energy-saving measures. Among these, the optimisation of the compressed air system has delivered tangible results, including lower energy use, reduced maintenance needs, and extended equipment life. This not only enhances system performance but also contributes to overall emission reductions. The company's GHG emissions primarily arise from fuel combustion at its power plant and from the electrolytic smelting process, which generates carbon dioxide (CO2), perfluorocarbons (PFCs), and hydrogen fluoride. In 2024, Sohar Aluminium continued to employ its proprietary GHG calculation tool, aligned with the GHG Protocol and the International Aluminium Institute's reporting standards, to track and manage emissions. An independent Carbon Footprint study further benchmarked the company's emissions profile against global best practices. Notably, benchmarking data shows that Sohar Aluminium performs competitively compared to five other smelters in the GCC region, underscoring the effectiveness of its emissions management strategies. The company also adheres strictly to national environmental regulations. However, total emissions intensity rose slightly in 2024 to 6.19 tonnes of CO2 per tonne of aluminium, compared to 5.51 tonnes in 2023—a change likely driven by increased production volumes. Despite this uptick, the company has made measurable progress in targeted areas. Over the past six years, fluoride emissions were reduced by 22 per cent, while nitrogen oxide (NOx) emissions from the power plant have steadily declined from 2021 to 2024. Sohar Aluminium remains firmly committed to reversing any upward emissions trends and aligning its operations with Oman's net-zero aspirations. The company's Decarbonisation Strategy, updated and reviewed in December 2024 with stakeholders including OQ Alternative Energy, Rio Tinto, and TAQA, lays out an ambitious roadmap. Aligned with the International Aluminium Institute's net-zero pathways, the plan sets progressive emissions reduction targets: 13 per cent by 2030, 43 per cent by 2040, and 86 per cent by 2050, using 2021 as the baseline year. Sohar Aluminium's decarbonisation roadmap is further strengthened by its involvement in the SOHAR Net Zero Alliance (SNZA) and its pledge to the IAI's carbon emissions reduction framework, announced at COP28. These partnerships underscore the company's commitment to aligning local efforts with global climate goals. Aluminium recycling forms a key pillar of Sohar Aluminium's sustainability agenda. In 2024, the company recycled 3,543 metric tonnes of external scrap, reducing the energy required for production by up to 95 per cent compared to primary smelting. This not only contributes significantly to emission reductions but also promotes resource circularity and waste minimisation. By advancing energy efficiency, pursuing rigorous emissions controls, and embedding recycling in its operations, Sohar Aluminium is demonstrating how industrial giants can play a pivotal role in advancing national and international sustainability objectives. 2022 © All right reserved for Oman Establishment for Press, Publication and Advertising (OEPPA) Provided by SyndiGate Media Inc. (
Observer
06-07-2025
- Business
- Observer
Sohar Aluminium scales up energy efficiency and decarbonisation efforts
MUSCAT: Sohar Aluminium — the country's primary aluminium producer owned 40% by Oman's integrated global energy group OQ — is intensifying its drive to enhance energy efficiency, reduce greenhouse gas (GHG) emissions, and support Oman's broader sustainability ambitions through a series of targeted initiatives. These efforts form part of the company's long-term commitment to operational excellence and environmental stewardship. This report is based on the Sohar Aluminium Sustainability Report 2024, which highlights progress across key areas such as energy management, emissions control, and decarbonisation strategy. Energy plays a critical role in the company's refining and smelting operations, which are among the most energy-intensive industrial processes. Sohar Aluminium predominantly relies on natural gas secured through a long-standing agreement with the Omani government. To ensure business continuity and operational resilience, the company's on-site power plant is also capable of switching to diesel in emergency situations. Following the 2023 Order of Magnitude study—which identified 45 improvement opportunities across electricity, gas, water, and compressed air systems—Sohar Aluminium has implemented several energy-saving measures. Among these, the optimisation of the compressed air system has delivered tangible results, including lower energy use, reduced maintenance needs, and extended equipment life. This not only enhances system performance but also contributes to overall emission reductions. The company's GHG emissions primarily arise from fuel combustion at its power plant and from the electrolytic smelting process, which generates carbon dioxide (CO2), perfluorocarbons (PFCs), and hydrogen fluoride. In 2024, Sohar Aluminium continued to employ its proprietary GHG calculation tool, aligned with the GHG Protocol and the International Aluminium Institute's reporting standards, to track and manage emissions. An independent Carbon Footprint study further benchmarked the company's emissions profile against global best practices. Notably, benchmarking data shows that Sohar Aluminium performs competitively compared to five other smelters in the GCC region, underscoring the effectiveness of its emissions management strategies. The company also adheres strictly to national environmental regulations. However, total emissions intensity rose slightly in 2024 to 6.19 tonnes of CO2 per tonne of aluminium, compared to 5.51 tonnes in 2023—a change likely driven by increased production volumes. Despite this uptick, the company has made measurable progress in targeted areas. Over the past six years, fluoride emissions were reduced by 22 per cent, while nitrogen oxide (NOx) emissions from the power plant have steadily declined from 2021 to 2024. Sohar Aluminium remains firmly committed to reversing any upward emissions trends and aligning its operations with Oman's net-zero aspirations. The company's Decarbonisation Strategy, updated and reviewed in December 2024 with stakeholders including OQ Alternative Energy, Rio Tinto, and TAQA, lays out an ambitious roadmap. Aligned with the International Aluminium Institute's net-zero pathways, the plan sets progressive emissions reduction targets: 13 per cent by 2030, 43 per cent by 2040, and 86 per cent by 2050, using 2021 as the baseline year. Sohar Aluminium's decarbonisation roadmap is further strengthened by its involvement in the SOHAR Net Zero Alliance (SNZA) and its pledge to the IAI's carbon emissions reduction framework, announced at COP28. These partnerships underscore the company's commitment to aligning local efforts with global climate goals. Aluminium recycling forms a key pillar of Sohar Aluminium's sustainability agenda. In 2024, the company recycled 3,543 metric tonnes of external scrap, reducing the energy required for production by up to 95 per cent compared to primary smelting. This not only contributes significantly to emission reductions but also promotes resource circularity and waste minimisation. By advancing energy efficiency, pursuing rigorous emissions controls, and embedding recycling in its operations, Sohar Aluminium is demonstrating how industrial giants can play a pivotal role in advancing national and international sustainability objectives.
Observer
25-06-2025
- Business
- Observer
Sohar Aluminium to fund Bahla Cultural Centre
Bahla: Sohar Aluminium has signed a Memorandum of Understanding (MoU) with the Bahla Cultural Centre for Science and Innovation to support the construction of the centre, which is set to become a key cultural landmark enriching the intellectual and social landscape of the Wilayat of Bahla in Al Dakhiliyah Governorate. The initiative comes within the company's ongoing commitment to social responsibility and sustainable community development. The MoU signing ceremony took place in the presence of Shaikh Said bin Ali al Nuaimi, Wali of Bahla, along with officials and representatives from both parties. The agreement was signed by Jameel Mohammed Shakeel, Corporate Communications and Social Responsibility Manager at Sohar Aluminium, and Hilal bin Saeed al Yahyaei, Chairman of the Centre's Founders Board. The Bahla Cultural Centre for Science and Innovation will be constructed on a 2,000-square-metre site and will comprise two floors. Facilities will include multipurpose halls for meetings and exhibitions, a library, and various spaces to support community and cultural activities. Ahmed bin Mohammed al Kharusi, General Manager of Human Resources and Corporate Affairs at Sohar Aluminium, affirmed the company's dedication to sustainable development. 'Culture is an integral part of a community's identity, and at Sohar Aluminium, we are proud of our partnership with the Bahla Cultural Centre for Science and Innovation, given its positive role in promoting cultural identity and preserving authentic Omani heritage,' he said. Hilal bin Saeed al Yahyaei, Chairman of the Founders Board, noted that the centre will help expand the institution's cultural programmes and enable the hosting of community events for various segments of society. He added that the centre's contribution will have a tangible impact on educational and cultural growth in the wilayat, while opening new opportunities for youth to explore and develop their talents and skills.
Observer
23-06-2025
- Business
- Observer
Sohar Aluminium, Athar sign MoU to boost healthcare
SUHAR: Sohar Aluminium on Sunday signed a Memorandum of Understanding (MoU) with the Athar Healthcare Endowment Foundation to enhance cooperation in supporting priority health initiatives and projects in the Sultanate of Oman. This partnership aligns with joint efforts to promote the sustainability of healthcare services and contribute to the development of the health sector. The agreement was signed by Ahmed bin Mohammed al Kharousi, Director-General of Human Resources and Corporate Affairs at Sohar Aluminium, and Ali bin Hassan al Lawati, Vice-Chairman of the Board of Trustees of Athar Foundation. The MoU aims to establish a structured mechanism for directing donations and contributions within the framework of corporate social responsibility, supporting the establishment of sustainable healthcare projects based on clear national priorities. It ensures the effective utilisation of available resources to maximise impact. Under the agreement, both parties will evaluate requests submitted by various healthcare institutions based on precise criteria to determine funding priorities. They will also monitor the implementation of approved projects and conduct studies to assess their social impact, measuring their effectiveness and contribution to Oman's healthcare system. It is worth mentioning that Athar Healthcare Endowment Foundation is a non-profit organisation dedicated to supporting Oman's health sector through developmental initiatives that enhance the quality of healthcare services and promote integrated, sustainable healthcare delivery for the community. — ONA
