Plans for Saudi's $3bn smelter underway

by Reuters on Thursday, 04 October 2007

(Getty Images)

Malaysian infrastructure and energy group MMC Corporation and its Saudi Binladin Group partner agreed to co-build an aluminium smelter costing $3 billion in the Middle East with Aluminium Corporation of China, MMC said on Thursday.

The smelter forms part of a $30 billion, 30-year contract to build a 117-sq km "Jizan Economic City" 725 km south of Jeddah in Saudi Arabia that MMC and its 50-50 Saudi partner, Binladin Group won last year.

The project will include ports, aluminium smelters, steel and copper processing plants, oil refineries, fisheries and agro-based industries, MMC said in the November announcement.

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The smelter is expected to have an annual production capacity of about one million metric tonnes after the plant's three phases are completed, with the project developed by a newly established joint-venture company to be set up by year-end, MMC said.

Construction should begin by the second half of 2008 in Jizan's industrial zone, MMC said, adding that it will also build a power plant.

"In conjunction with this project and the on-going development of the industrial zone, MMC has plans to build a power plant with an estimated capacity of 4,860MW that will cater to the needs of the industrial users," the firm told the stock exchange.

MMC did not provide additional details on the power plant. It already controls Malaysia's biggest producer, Malakoff, which produces 5,020MW from 6 power plants. Malakoff accounts for a quarter of Malaysia's installed capacity, MMC said on its website.

Aluminium Corporation (Chalco) is the sole producer of alumina in China, the second largest producer of alumina in the world and among the top five largest producers of in the world, MMC said in its statement.

MMC shares, controlled by Malaysian tycoon Syed Mokhtar Al-Bukhary, have more than doubled since its announced the $30 billion, 30-year contract on November 6 last year.

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