• Home
• /
• Business

Maaden and Alcan sign $7b JV aluminium project agreement

The project will mine bauxite reserves at Az Zabirah in the north of the Kingdom to produce 720,000 tonnes of aluminium per annum at a purpose built facility in the Minerals Industrial City at Ras Az Zawr on the east coast. Total capital investment in the project is approximately SR26.25 billion ($ 7 billion). Over 70 per cent of the aluminium produced will be for export.

Announcing the agreement, Ali Al Naimi, Saudi Arabian Minister of Petroleum and Mineral Resources and Chairman of Maaden, said, "I welcome the partnership of Alcan and Maaden in realising this landmark project which will be one of the largest, vertically integrated operations of its type in the world. The operation will promote economic growth within the Kingdom of Saudi Arabia, diversify the country's economic and industrial base and create employment opportunities through opening up new sectors of economic activity."

"Alcan is pleased to participate in this project in the growing and dynamic Kingdom of Saudi Arabia. This world class project has an ideal combination of competitive energy resources, local bauxite, well-developed infrastructure and favourable logistics," said Mr Dick Evans, President and CEO of Alcan Inc at the signing ceremony in Riyadh. "Consistent with Alcan's primary metal strategy, this project has the potential to achieve one of the lowest operating costs in the industry and become one of the world's largest smelters," he added.

Dr Dabbagh said, "This joint venture and our recently signed phosphate agreement with Sabic represent notable milestones in Maaden's vision of expanding the scope of mining and associated industries and making mining the third pillar of Saudi industry, complementing Saudi Aramco and Sabic. Alcan's global experience combined with their team's strong operating capabilities will prove vital in delivering long term success."

Utilising the Az Zabirah bauxite mine which has proven reserves for about 30 years, the project will establish an alumina refinery with an annual capacity of 1.6 million tonnes to feed the aluminium smelter at Ras Az Zawr. The smelter will be designed to accommodate a potential expansion of four additional lines that could increase annual production by over 1.4 million tonnes. A large power plant supplying 1,400 megawatts of energy and desalinated water to the project, and potentially surplus power to the national grid, will also be constructed in Ras Az Zawr. The new North South Railroad funded by the Public Investment Fund (PIF) will be used to transport four million tonnes of bauxite per year the 600 kilometres to Ras Az Zawr where there will also be a three berth panamax port facility.

Readily available supplies of locally sourced raw materials and the abundance of local dedicated energy resources will ensure that the project competes effectively in global markets. The fully integrated complex at Ras Az Zawr will provide economies of scale and achieve freight advantages through easy access to key markets.