Alcoa, Ma'aden to develop major aluminum complex in Saudi Arabia
11 Jan 2010
New York, US – Alcoa has formed a joint venture with Saudi Arabian mining company Ma’aden, to develop a fully integrated aluminum industry in the Kingdom of Saudi Arabia. The JV plans to become the world’s lowest-cost supplier of primary aluminum, alumina and aluminum products.
In its initial phases, the joint venture will develop a fully integrated industrial complex, including: a bauxite mine with an initial capacity of 4,000,000 metric tons per year (mtpy); an alumina refinery with an initial capacity of 1,800,000 mtpy; an aluminum smelter with an initial capacity of ingot, slab and billet of 740,000 mtpy; and a rolling mill, with initial hot-mill capacity of between 250,000 and 460,000 mtpy.
The mill will focus initially on the production of sheet, end and tab stock for the manufacture of aluminum cans, and potentially other products to serve the construction industry, said Alcoa. The refinery, smelter and rolling mill will be established within the new industrial zone of Raz Az Zawr on the east coast of the Kingdom of Saudi Arabia.
Bauxite feedstock for the planned alumina refinery will be transported by rail from the new mine at Al Ba’itha, near Quiba, in the north. The project will be developed and financed in two phases, with the rolling mill and smelter in the first phase. First production from the aluminum smelter and rolling mill is anticipated in 2013, and first production from the mine and refinery is expected in 2014.
Capital investment is expected to be around $10.8 billion, subject to the completion of detailed feasibility studies and environmental impact assessments. Ma’aden will own 60% of the joint venture, while Alcoa will control the remaining 40% through an investment partnership in which it will own 20% and its partners will participate through financing that represents the other 20 percent economic interest.
Each of Alcoa and the partners will invest $900 million over a four-year period and will be responsible for their pro rata share of the project financing, in addition to specific completion commitments,said Alcoa.