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Alcoa, Ma'aden Partner to Develop Lowest-Cost Aluminum Complex in the World

Capital investment is expected to be approximately $10.8 billion.

Alcoa announced on Dec. 21 that it has formed a joint venture with Maaden, the Saudi Arabian Mining Co., 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, according to a statement.

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.

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. 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.

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 $10.8 billion. Ma'aden will own 60% of the joint venture. Alcoa will control the remaining 40% of the joint venture 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.

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."

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