Saudi Maaden-Alcoa Joint Ventures Secure $2.1B Financing Deals

RIYADH, Dec 20, 2010 (Dow Jones Commodities News via Comtex) -- Saudi Arabian Mining Co. (1211.SA), better known as Maaden, said Monday its two joint ventures with Alcoa Inc. (AA) signed financing contracts worth $2.1 billion with the Public Investment Fund, or PIF.

PIF will lend Maaden Aluminium Co. $1.3 billion, and Maaden Rolling Co. $821 million, Maaden said in a statement posted on the Saudi bourse website, but didn't give the terms of the loans.

The deals are part of are part of a $4.5 billion financing plan for phase one of its fully-integrated aluminum complex to be developed with Alcoa in the kingdom.

Last month, the firm said its two joint ventures with Alcoa signed financing contracts worth $1.9 billion with 16 local and international banks as well as financial institutions.

Both ventures, which are 74.9% owned by Maaden, and 25.1% owned by Alcoa, will also secure $500 million from the Saudi Industrial Development Fund at a later stage.

Earlier this year, Maaden said it started work on its planned fully- integrated aluminum complex with Alcoa. Maaden and Alcoa are developing first an integrated alumina refinery, aluminum smelter and rolling mill at Ras Al-Zour on Saudi's eastern coast on the Persian Gulf.

The project will be the world's lowest-cost supplier of primary aluminum, alumina and aluminum products as well as the Middle East's first food-grade can-sheet rolling mill.

Operations at the smelter and rolling mill will begin in 2013, while the mine and refinery are expected to come online in 2014. The aluminum complex will initially use four million metric tons of bauxite mined at Al Baitha, near Quiba in the north of the kingdom, to refine 1.8 million tons of aluminum at Ras Al Zour. The plant's smelter has an annual aluminum production capacity of 740,000 tons.