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Saudis to privatise 50pc of mining firm

Maaden originally planned to sell off its operations in stages, starting with its gold unit this year.

But Dabbagh said executives had decided to include the bauxite and phosphate operations in an initial private offering at the end of 2006.

“There is a change in plan. At the last board meeting they wanted to privatise all of Maaden,” Dabbagh said.

Maaden’s gold mining unit produces around 300,000 ounces of gold a year. The company plans to exploit phosphate reserves in the north of the country to export fertiliser by 2008, and to mine bauxite for aluminium production shortly after that.

“We are ready today to privatise the gold company,” Dabbagh said. “Phosphate, we will be ready for that in six months but it would take longer than that for the aluminium.”

Saudi Arabia plans to build a freight rail line linking bauxite and phosphate reserves to the industrial city of Ras Al Zour on its eastern Gulf coast, which will produce aluminium and fertilisers.

Dabbagh said an international tender would be offered within six to eight months for construction and operation of the 1,400km mineral rail project, which would eventually be used for passenger traffic as well.

Maaden will also issue a tender within six months for construction of the port at Ras Al Zour.

Maaden says its Jalamid mine will yield enough phosphate for annual production of 3 million tonnes of di-ammonium phosphate. The project will cost an estimated $1.8 billion.

The Az-Zabirah mine will provide bauxite for production of 1.4 million tonnes of alumina to feed a 640,000 tonnes-per-year aluminium smelter. Maaden estimates the cost of the whole bauxite and aluminium production process at $4.5b.