The Saudi Arabian Mining Company (Maaden) announced Sunday that its subsidiary, Maaden Bauxite and Alumina Company, has signed a $1 billion (SR3.75 billion) financing agreement with the Public Investment Fund (PIF) for the second phase of its aluminum project.
The second phase, which includes a bauxite mine at Al-Baitha and an alumina refinery at Ras Al-Khair, will cost SR13.445 billion.
The PIF loan will be repaid over a period of 16 years, starting in 2017.
The project, a joint venture between Maaden (74.9 percent) and Alcoa (25.1 percent) is being built in two phases, both of which are now under construction.
The first phase consists of an aluminum smelter and rolling mill, both situated at Ras Al-Khair, which will begin operating in 2013.
The mine and refinery are due to come on stream in 2014.
"The Public Investment Fund concentrates on the development of different economic sectors to achieve the government's strategic objectives of expanding the Kingdom's industrial base, diversifying income and creating jobs for Saudi people." said Mansour Al-Mayman, secretary-general of the PIF.
"This financing clearly shows the Public Investment Fund's commitment to supporting sustainable industrial projects in Saudi Arabia."
Khalid Al-Mudaifer, Maaden's president and CEO, said the signing of the financing agreement with the Public Investment Fund clearly shows the government's commitment to building Saudi Arabia's mining industry and bringing new technologies and industries to the Kingdom.
The CEO also said the impact of this new industry will be highly significant in terms of job creation, regional development and economic diversification.
He said the project team has made excellent progress to date and are dedicated to ensuring the highest standards are applied to every aspect of their work from day to day site safety to long term sustainability considerations.
He thanked the Public Investment Fund's board of directors for their support for the project.
Maaden's aluminum project is the only one in the Middle East with an integral supply of alumina and its rolling mill will be one of the most technologically advanced in the world and the only one in the region capable of producing food grade can sheet.
In its initial phases, the joint venture will develop a fully integrated industrial complex, including:
? A bauxite mine with an initial capacity of 4,000,000 metric tons per year
? An alumina refinery
? An aluminum smelter with an initial capacity of 740,000 metric tons per year
? A rolling mill, with initial capacity of 380,000 metric tons per yea
? The mill will be the first in the Middle East and will be one of the most technically advanced mills in the world.
First commercial production from smelter and mill is scheduled for 2013.
First production from the mine and refinery is set for 2014.
Alcoa will supply alumina to the smelter in the interim period.
Total capital investment in the joint venture is expected to be around SR40.5 billion ($10.8 billion).
Maaden holds 74.9 percent of the joint venture; Alcoa 25.1 percent with provisions in place to enable an increase to 40 percent.
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