Details

RIYADH, SAUDI ARABIA December 20th, 2009 – The Saudi Arabian Mining Company Ma’aden, and Alcoa, the world leader in aluminum, today announced that they will form a joint venture to develop a fully integrated, world-class aluminum industry in the Kingdom of Saudi Arabia. The joint venture will become the world's preeminent and lowest-cost supplier of primary aluminum, alumina and aluminum products, with access to the growing markets of the Middle East and beyond.

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 billets, 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. It will be one of the most technically advanced mills in the world.

The refinery, smelter and rolling mill will be established within the new industrial zone of Raz as Zawr on the east coast of the Kingdom of Saudi Arabia. The complex will utilize critical infrastructure, including low-cost and clean power generation , as well as port and rail facilities, developed by the Kingdom’s government. 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 approximately SAR40.5 bn ($US10.8 bn), subject to the completion of detailed feasibility studies and environmental impact assessments. Ma’aden will own 60% of the joint venture, Alcoa and its partners will own 40%.

In welcoming the new venture, Dr. Abdallah Dabbagh, President and CEO of Ma’aden, said, “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.” He added, “A focus on quality alongside the robust economics of the project will ensure its leading role in advancing Saudi Arabia and the region as a major hub for the aluminum and downstream sectors.”

Alcoa President and CEO Klaus Kleinfeld said, “This joint venture is a once-in-a-generation opportunity for Alcoa, for Ma’aden and for the Kingdom of Saudi Arabia. We are creating a fully integrated aluminum complex that will be the most technologically advanced and cost efficient in the world. By changing the operating dynamics and cost base within our industry, the complex will be a model for the growth of aluminum in competition with other metals and is designed with the potential for future expansion. The joint venture leverages the unique strengths of both Alcoa and Ma’aden to create substantial value for our investors, customers and partners.”

Alcoa will provide know how, management expertise and support during the design, construction and operation of the mine, refinery, smelter and rolling mill. Alcoa will also arrange the supply of alumina feedstock to the smelter from outside the Kingdom until the project refinery comes on stream. Alcoa and Ma’aden will work with leading international and local firms in the design and construction of the complex.

Ma’aden’s Chairman, Engineer Abdullah Saif Al-Saif, added that the Saudi government’s investment in critical national infrastructure is proving to be a catalyst for this and other projects. “The positive impact of the government’s vision in developing the Kingdom’s infrastructure including the new railway network and deepwater port at Ras Az 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.”