Saudi Electricity saves $400 million on copper-aluminium switch

Saudi Electricity Co., the dominant electricity provider in the Arab world’s biggest economy, saved 1.5 billion riyals ($400 million) in one year by switching from copper to aluminium in its power-transmission projects. “We have an initiative to change from copper to aluminum,” Osama Khawandanah, senior vice president of energy trading and ventures at Saudi Electricity, said in an interview in Abu Dhabi on Sunday. Aluminium is “much less expensive” than copper. Aluminium is about one-third the cost and 10 times more abundant than copper in warehouses monitored by the London Metal Exchange. In China, the world’s biggest metals consumer, changes in building codes have the potential to shift as much as 500,000 metric tons of annual demand to aluminium from copper, according to Bloomberg Intelligence. That’s almost 20 percent of LME aluminium inventories. Copper has dropped 19 percent this year and aluminium is down 16 percent, amid a glut of raw materials and concern of slowing economic growth in China. (By Mahmoud Habboush and Mais Al-Amouri/Bloomberg)