LONDON: Oman’s Duqm Special Economic Zone is negotiating new investments worth between 7 billion and 8 billion Omani rials ($18 billion to $21 billion) in the iron and aluminum sectors, with agreements on project work plans expected before the end of this year, according to the zone’s CEO.
Ahmed bin Ali Akaak told Asharq Bloomberg in an interview on the sidelines of the UK-Gulf Cooperation Council strategic dialogue in London that the talks had reached “very significant understandings.”
Finalizing the agreements depends on issues including the supply of energy and gas and the amount of value added to the Omani economy, he said.
The negotiations come as Oman seeks to build a base for low-carbon industries in Duqm, drawing on renewable energy and green hydrogen projects, industrial infrastructure and the port.
The portfolio of projects under development includes three linked to green aluminum, led by one with estimated investments of about 2.4 billion rials, with a planned capacity of 530,000 tonnes a year of green aluminum ingots, plus 620,000 tonnes of aluminum billets and pre-cast slabs. The other projects include the Geely Green Aluminum Project and the Pearl Green Iron and Aluminum Project.
Saudi and Kuwaiti investments
Investment in Duqm has accelerated in recent years. Cumulative committed investment rose to 8.8 billion rials by the end of June, an increase of about 141 percent from 3.65 billion rials in 2021.
In June, the zone signed 10 investment agreements and memorandums of cooperation for projects with a combined value of 2.9 billion rials. They span sectors including hydrogen, energy, electric vehicle battery materials, and industrial, residential and service projects.
Akaak also disclosed talks with the Saudi side to attract investments to Duqm and said a number of understandings are likely to be announced in the coming period. He did not specify the nature or value of the projects. The talks add to existing Gulf investments, most notably the Duqm refinery, OQ8, which is owned equally by Oman’s OQ Group and Kuwait Petroleum International.
Growing activity in Duqm amid Hormuz tensions
Duqm is also banking on its location on the Arabian Sea to strengthen its logistics role. Akaak said part of the business that had been heading to the northern Gulf has shifted to Duqm Port amid current regional developments.
He added that the port’s “operational volume has risen by nearly 235 percent” during the current period and that the port is operating at full capacity.
Duqm is also working to strengthen land and sea connectivity with GCC countries through a green logistics corridor, supporting the movement of goods and the access of industries based in the zone to Gulf and international markets, Akaak said.