Maaden signs SR40.5 billion deal with Alcoa

Maaden signs SR40.5 billion deal with Alcoa Md Rasooldeen | Arab News

MAMMOTH PROJECT: Maaden President and Chief Executive Officer Abdallah Dabbagh, right, and Alcoa President and Chief Executive Officer Klous Kleinfeld sign a multibillion agreement. (AN photo by Fawaz Al-Muteiry)   RIYADH: Saudi Arabian Mining Company (Maaden) signed Sunday a SR40.5 billion ($10.8 billion) contract with Alcoa, the world leader in aluminum, for the development of a fully integrated world-class aluminum industry in the Kingdom. The agreement was signed by Maaden President and CEO Abdallah Dabbagh and Alcoa President and CEO Klous Kleinfeld at the new Maaden headquarters here. Dabbagh said after the ceremony that the joint venture would become the world's pre-eminent and lowest-cost supplier of primary aluminum, alumina and aluminum products with access to the growing markets of the Middle East. The project would be implemented in two phases and that production from the aluminum smelter and rolling mill would start in 2013 and production from the mine and refinery was expected in 2014, he added. Maaden will own 60 percent of the joint venture, while Alcoa and its partners the remainder. "Alcoa's partnership in all aspects of this integrated industry brings with it enormous value not only in terms of technology, resources and experience but also a proven commitment to sustainability," Dabbagh said. He added that a focus on quality alongside the robust economics of the project would ensure its leading role in advancing Saudi Arabia and the region as a major hub for aluminum and downstream projects. "We are creating a fully integrated aluminum complex that will be the most technologically advanced and cost-efficient in the world," Kleinfeld said. In its initial phase, 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, an alumina factory with an initial capacity of 1,8000,000 (mtpy), an aluminum smelter 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," Dabbagh said. The refinery, smelter and rolling mill will be established within the industrial zone of Ras As Zawr on the east coast of the Kingdom. The complex will utilize critical infrastructure including low-cost and clean power generation, as well as port and railroad facilities developed by the government. He said bauxite feedstock for the planned alumina factory will be transported by railroad from the new mine at Al-Baitha 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. In his brief speech, Maaden Chairman Abdullah Al-Saif said that the Kingdom's investment in critical infrastructure was proving to be a catalyst for this as well as other projects. "The positive impact of the government's vision in developing the country's infrastructure including the new railway network and deepwater port at Ras As Zawr is clearly demonstrated by the realization of this industry and others such as phosphate. Collaboration in clean efficient power generation also ensures that it is both highly competitive and sustainable," Al-Saif said.