Emirati firms Mubadala Development Company and Dubal signed a memorandum of understanding on Wednesday to build an aluminium smelter for more than $5 billion, the companies announced.
The agreement on the 700,000 tonnes a year smelter was signed with Saudi Arabian General Investment Authority and the joint investment firm Emaar Economic City, they said.
It is to be located in King Abdullah Economic City, an industrial zone to the north of the Red Sea coast city of Jeddah that was launched in December 2005 with initial investment of $26.6 billion.
Emaar Economic City is a joint venture between Emaar Properties of Dubai and a group of Saudi investors.
"The additional aluminium production from the proposed smelter complex would help us realise Dubal's vision of becoming one of the world's five largest aluminium producers by 2015," said Dubal CEO Abdullah Kalban.
Dubal, owned by the government of the emirate of Dubai, is already the leading aluminium manufacturer in the Middle East with a capacity of 860,000 tonnes a year, according to its figures.
In February, Dubal and Mubadala, owned by Abu Dhabi emirate, announced a project to build the world's biggest smelter, Emirates Aluminium, at a cost of $8 billion and with annual capacity of 1.4 billion tonnes.
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