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Alcoa Starts Construction of Refinery at Saudi Venture

(Corrects location of bauxite mine in third paragraph.)

Alcoa Inc. (AA), the largest U.S. aluminum producer, said it started construction on the site of an alumina refinery in Saudi Arabia.

Ceremonies were held today to mark the official groundbreaking at the refinery and the pouring of the first concrete at the aluminum rolling mill, Alcoa said in a statement.

The $10.8 billion project is a joint venture with the Saudi Arabian Mining Co., known as Ma’aden. Bauxite will be mined at Al Ba’itha. At Ras Al Khair, on the country’s east coast, the raw material will be refined into alumina, which will be processed at a 740,000 metric-ton-a-year smelter.

The 380,000-ton rolling mill will initially make aluminum sheet for cans, and in the future may produce metal for building products or car parts, Kenneth Wisnoski, who heads Alcoa’s division that encompasses growth, energy, bauxite and Africa, said in a telephone interview from Al Khobar, Saudi Arabia.

“Our first target market is Saudi and then following on that, the Middle East region,” Wisnoski said. “We’re near very high-population areas.”

Ma’aden owns 75 percent of the venture and New York-based Alcoa owns 25 percent, Mike Belwood, a spokesman for Alcoa, said in a telephone interview. Alcoa provides technical expertise for the refinery, smelter and mill and Saudi Arabia is building infrastructure for the project including a port, rail line and power plant, Belwood said.

The rolling mill and smelter will begin production in 2013 and the mine and refinery will start up in 2014.

To contact the reporter on this story: Sonja Elmquist in New York at Selmquist1@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net.

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