Maaden to borrow $8bn for aluminium plant

Saudi Arabian Mining Co (Maaden) will borrow about 30 billion riyals ($8 billion) in the third quarter of 2009 to fund a planned aluminium plant in the kingdom, a Kuwaiti newspaper quoted its CEO as saying. The loan will be "international and in conformity with Islamic regulations", Kuwait's Al-Rai newspaper quoted Abdullah Al-Dabbagh as saying. The funds will help finance a planned 740,000 tonnes per year aluminium smelter, that will be jointly developed in the kingdom with Rio Tinto at a total cost of $10.55 billion. "We will not need any financing for our projects until the end of the year (2008)," he said without giving more details. Rio Tinto Alcan will hold 49 percent of AlumCo, the joint venture company that will operate the plant. The estimated cost of the project has risen 40 percent due to the rise in contracting costs as well as domestic rise in the cost of labour and also to a 14 percent increase in the planned plant's production capacity, Maaden said earlier this week. It was the second time Maaden revised up the project's cost which it raised in May to $7.53 billion from $7 billion. - Reuters