[miningmx.com] — STATES-run Saudi Arabian Mining (Maaden) and US aluminium giant Alcoa agreed on Sunday to build a $10.8bn aluminium complex in the world’s top oil exporter, targeting the Middle East from 2013.
Under the deal, the companies form a joint venture to set up a 1.8 million tonne-per-year refinery, a 740,000 tonne-per-year smelter, a bauxite mine with an annual capacity of 4 million tonnes and a rolling mill with a capacity of up to 460,000 tonnes.
The firms have yet to raise the financing for the complex mainly planned to be built in Ras Azzour on the kingdom’s Gulf Coast close to Maaden’s phosphate fertiliser plants. “We will go for financing during 2010,” said Maaden CEO Abdullah al-Dabbagh.
Last December, Rio Tinto Alcan abandoned its 49% stake in a 740,000 tonne-per-year smelter project because it was unable to obtain financing due to the global financial crisis. The project was then budgeted at $8bn.
The smelter and mill are slated to start production in 2013 while the refinery and mine would come online in 2014, Dabbagh told reporters in the Saudi capital Riyadh.
The project aims at “making Saudi Arabia and the Middle East a major hub for aluminium production and its downstream industries,” Dabbagh added.
No funding yet
Alcoa CEO Klaus Kleinfeld told Reuters the costs of $10.8bn would be split, with the US firm and its partners paying 40% while Maaden is to handle 60%.
He said a variety of funding options were being considered, when asked whether Alcoa could conduct a capital hike or go for debt.
Plans call for the expansion of the mill to 460,000 tonnes of aluminium sheets, ends and tabs stocks for the manufacturing of aluminium cans, the firms said.
Development will take place in two phases, starting with the smelter and rolling mill to be followed by the mine and refinery, Dabbagh said during a signing ceremony.
For the alumina refinery, Maaden has received four bids for a $1bn engineering, procurement and construction management contract, industry sources said earlier this month.
