Maaden, Alcoa to build US $10.8bn aluminium plant
Saudi-US tie up to invest in refinery and smelter combo deal
State-run Saudi Arabian Mining Co (Maaden) and US aluminium giant Alcoa have agreed to build a $10.8 billion (SR 40.5 billion) aluminium complex in the industrial zone of Ras As Zawr on the east coast of the Kingdom.
Under the deal, which was signed yesterday, 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 smelter and mill are slated to start production in 2013 while the refinery and mine would come online in 2014.
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 $1 billion engineering, procurement and construction management contract, industry sources said earlier this month.
U.S. Fluor Corp teamed up with Worley Parsons and Canada's SNC-Lavalin Group Inc joined forces with Hatch to submit proposals. France's Technip and U.S. Bechtel bid individually.
Maaden chief executive Abdullah al-Dabbagh told Reuters that the JV was yet to raise financing for the complex and would do so during 2010.
Last December, Rio Tinto Alcan abandoned its 49 percent 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 $8 billion.
Alcoa Chief Executive Klaus Kleinfeld told Reuters the costs of $10.8 billion would be split, with the U.S. firm and its partners paying 40 percent while Maaden is to handle 60%.