Project includes bauxite mine in Qassim with production capacity of 4 million metric tons
Saudi Arabian Mining Co, a state-controlled metals producer known as Ma’aden, plans to expand its operations in the kingdom as demand for metals and minerals increases in the Arab world’s biggest economy.
In an interview in Riyadh today outgoing CEO Abdullah al Dabbagh said: “At the time, we are looking internally, and we are looking at projects that add value to our existing projects.”
He added: “Ma’aden is looking at growth, and not just staying with existing projects.”
Ma’aden and Saudi Aramco, the world’s largest state-owned oil company, are expanding domestic operations as government spending spurs demand for minerals and energy in the world’s largest oil supplier. The government approved a five year, $384 billion spending package in August.
Ma’aden signed in December 2009 a contract with Alcoa Inc to build a $10.8 billion aluminum industrial complex to supply Saudi Arabia and global markets.
In April, Ma’aden increased its stake in the project to 74.9 percent from 60 percent, while New York based Alcoa’s stake fell to 25.1 percent.
The companies announced last month financing contracts valued at $1.8 billion to help pay for part of the first phase of the project, with a total cost of $7.5 billion. The financing process for the second phase, which includes a mine and a refinery, will start “shortly,” the companies said at the time.
Al Dabbagh said: “The financing environment is great if you have a great project.”
He added: “Because it is a robust project, the aluminum project, we were able to get more than what we needed despite the fact that the climate isn’t right for investment.”
The project includes a bauxite mine in Qassim, in northeast Saudi Arabia, with a production capacity of 4 million metric tons. The material will be shipped by rail to a 1.8 million metric ton-a-year alumina refinery and a 740,000 metric ton-a- year aluminum smelter in Ras az Zawr, on the Arabian Gulf.
Al Dabbagh, who will step down as the company’s CEO on December 31, will remain on the board of directors.
“There are a number of tasks the board wants me to do,” he said without providing more information.
Khaled al Mudaifer was named the company’s new chief executive officer.
Maaden’s shares gained 0.5 percent to 21.25 riyals at the close in Riyadh today. The stock has gained 23 percent this year, giving the company a market value of $5.2 billion.