The plan is a fresh sign of increasing industrial cooperation between Abu Dhabi and Dubai, which agreed in June to merge their state aluminium producers, Emirates Aluminium (Emal) and Dubai Aluminium (Dubal), in a $15 billion deal creating the world's fifth-largest aluminium producer.

Senaat, which is tasked by the Abu Dhabi government with diversifying the economy away from oil, joint-owns Ducab with state-owned Investment Corporation of Dubai.

The new venture, Ducab Aluminium, is to build a factory producing up to 50,000 tonnes per year of aluminium rods. The plant, expected to cost around $60 million to build, will be located in the Khalifa Industrial Zone of Abu Dhabi, close to an aluminium smelter run by Emal.

The companies have given no indication of when they hope to complete the new facility but said they aimed to target export markets across the Middle East and North Africa.