* Maaden, Alcoa to build $10.8 billion aluminium complex
* Alumina refinery, bauxite mine, smelter planned
* Rolling mill also planned
* Complex due to start production in 2013
* Funding still needed
(Recasts first sentence, adds Maaden CEO comments, other
By Ulf Laessing
RIYADH, Dec 20 State-run Saudi Arabian Mining
Co (Maaden) 1211.SE and U.S. aluminium giant Alcoa (AA.N)
agreed on Sunday to build a $10.8 billion aluminium complex in
the world's top oil exporter, targeting the Middle East from
Under the deal, 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
The firms have yet to raise the financing for the complex
mainly planned to be built in Ras Azzour on the kingdom's Gulf
Coast close to Maaden's phosphate fertiliser plants.
"We will go for financing during 2010," said Maaden Chief
Executive Abdullah al-Dabbagh.
Last December, Rio Tinto Alcan (RIO.L) 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.
The smelter and mill are slated to start production in 2013
while the refinery and mine would come online in 2014, Dabbagh
told reporters in the Saudi capital Riyadh.
The project aims at "making Saudi Arabia and the Middle
East a major hub for aluminium production and its downstream
industries," Dabbagh added.
NO FUNDING YET
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
He said a variety of funding options were being considered,
when asked whether Alcoa could conduct a capital hike or go for
Plans call for the expansion of the mill to 460,000 tonnes
of aluminium sheets, ends and tabs stocks for the manufacturing
of aluminium cans, the firms said.
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 (FLR.N) teamed up with Worley Parsons
(WOR.AX) and Canada's SNC-Lavalin Group Inc (SNC.TO) joined
forces with Hatch to submit proposals. France's Technip
TECF.PA and U.S. Bechtel bid individually. [ID:nLDE5BE158]
Maaden is investing about 60 billion riyals ($16 billion)
to develop the kingdom's phosphate, bauxite, gold and
industrial minerals and help reduce reliance on oil.
A phosphate and fertiliser joint venture with Saudi Basic
Industries Corp (SABIC) 2010.SE is due online in 2011.
($1=3.750 Saudi riyals)
(Additional reporting by Reem Shamseddine in Khobar; editing
by John Stonestreet and Matthew Lewis)