June 29 (Bloomberg) -- Saudi Arabian Mining Co., the state-controlled metals producer known as Ma’aden, said its board approved $4.5 billion in financing for the first phase of an aluminum smelter project with Alcoa Inc.
Ma’aden will borrow from local and foreign banks, and government funds, to help pay for the project in Saudi Arabia, the company said in a statement on the Saudi bourse website today. The finance will represent 60 percent of the first phase of the project with a total cost of $7.5 billion, it said. The facility is to start production at the end of 2013.
In December, Ma’aden signed a contract with Alcoa to build a $10.8 billion industrial complex to supply Saudi Arabia and global markets as part of the kingdom’s attempt to develop its mineral resources. In April, Ma’aden said it increased its stake in the project to 74.9 percent from 60 percent, while New York-based Alcoa’s stake decreased to 25.1 percent.
The project includes a bauxite mine in Qassim, a province 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 Persian Gulf.