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| Alcoa-Saudi Arabia Mining Co joint-venture raises US$ 4.5 billion for Maaden Alcoa KSA project |
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Posted on 28 Jul 2010 |
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In a joint-venture with Saudi Arabian Mining Company, Alcoa amassed US$ 4.5 billion in debt to finance their giant aluminum project, as per newswires.
Valued at US$ 7.5 billion, the project is anticipated to be one of the world’s largest aluminum plants and would consist of a rolling mill and a smelter, which would each be financed separately and signed by September 2010.
The US$ 5 billion aluminum smelter would be 65% financed by debt and 35% by equity. Saudi and international banks would provide US$ 1.3 billion in Islamic and conventional loans, while the Saudi Finance Ministry’s Public Investment Fund (PIF) would provide US$ 1.3 billion and the government-owned Saudi Industrial Development Fund (SIDF) would provide US$ 320 million, as stated by officials. The rolling mill would cost US$ 2.5 billion and it would be 50% financed by debt and 50% financed by equity. The PIF would lend an amount of US$ 750 million, the SIDF would lend US$ 160 million and banks are to provide US$ 220 million.
The aluminum smelter and the rolling mill are the first phase of the Maaden Alcoa US$ 10 billion joint venture complex, which would include a bauxite mine and an alumina refinery. The smelter and the rolling mill are expected to begin operations in 2013, while the mine and refinery are expected to come on stream the following year, according to the same source.
United States’ Alcoa is a producer of primary aluminum, fabricated aluminum and alumina. Among the solutions Alcoa markets are flat-rolled products, hard alloy extrusions, and forgings, as well as Alcoa wheels, fastening systems, precision and investment castings, and building systems in addition to other light metals such as titanium and nickel-based super alloys.
Established in 1997, Saudi Arabia Mining Company explores and extracts phosphate, aluminum and precious metals such as gold, silver, magnesium and zinc. It operates six precious metal extraction mines, with a production capacity of 9.4 tons and 14.2 tons of gold and silver per year.
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