The Saudi Arabian Mining Company (Ma’aden) announced the signing of Heads of Agreement to jointly develop a fully integrated, world-class phosphate production facility in the Kingdom of Saudi Arabia with The Mosaic Company and Saudi Basic Industries Corporation (SABIC). The estimated cost of the project is approximately SR 26 billion (US$7 billion). Ma’aden, Mosaic and SABIC will own 60%, 25% and 15% of the joint venture respectively. The new complex will be one of the largest integrated phosphate facilities in the world and will approximately double Ma’aden’s existing phosphate production while adding important new products to Ma’aden’s production capabilities.
The project will include new mining and processing plants in the Kingdom at Wa’ad Al Shammal Mineral Industrial City, as well as further processing plants at Ras Al Khair Mineral Industrial City. The two sites will be linked by the North-South Railway. Production at the new facilities is expected to commence in late 2016 with a total production capacity of approximately 16 million tonnes per year. The facilities will produce, as finished product, approximately 3 Million tonnes of fertilizer products such as DAP/MAP and NP/NPK, as well as approximately 440 thousand tonnes of downstream products including purified phosphoric acid (PPA) used in food industries, sodium tripolyphosphate (STPP) used in detergent manufacturing, and Dicalcium Phosphate & Monocalcium Phosphate (DCP/MCP) used in the manufacturing of animal feed.
In welcoming the new venture, Khalid Al-Mudaifer, President and CEO of Ma’aden, said, “This project represents not only an important milestone in Ma’aden’s growth, but it will also be an important contributor to the development of the northern region of Saudi Arabia as it will include the first major industrial project to be constructed in the region. The partnership with Mosaic and SABIC brings great value to the project in terms of technical, operating and marketing experience and we expect this project to be an industry leader in terms of its operational excellence, commitment to sustainability and contribution to the socio-economic development of the Kingdom.”
The development of local communities in the north of the Kingdom will be a key benefit of this project. In addition to direct employment opportunities of nearly 1,500 jobs, a coordinated program of regional development is underway. The joint venture partners are developing plans for a local research and development facility which will encourage the study and development of phosphate products and processes. In addition, the partners will sponsor school programs to help raise the academic and scientific capabilities of students in selected regional schools in the North. As part of its sustainability strategy, Ma’aden will also partner with the Technical Vocational Training Corporation to develop a specialized training centre in Wa’ad Al Shammal. These local community initiatives will support Ma’aden’s operating philosophy of “community localisation” which is focussed on increasing Saudization rates, developing the local community workforce through training, building the local community supplier base and initiating programs to help encourage the development of small to medium size businesses in the North.
The partnership will bring a significant amount of the world’s best expertise to Wa’ad Al Shammal. Ma’aden brings broad experience in the mining sector, and with over a century of experience in the fertiliser industry, Mosaic is currently the world’s largest producer of phosphate fertilisers and brings to the joint venture extensive technical and operating experience, as well as best in class environmental and safety management systems. SABIC is ranked second in the world’s diversified chemicals companies and brings broad experience in large project execution and global marketing capability. The partnership will focus on best practises in management, safety and environmental performance.
“Our joint venture with Ma’aden holds great promise for Mosaic, and it will be an excellent complement to our phosphate business in Florida and Louisiana,” said Mosaic President and Chief Executive Officer Jim Prokopanko. “This cost-effective phosphate project enables Mosaic to further diversify our sources of phosphates and gives us improved access to key agricultural markets. Our growing global reach further enables us to fulfill Mosaic’s mission, to help the world grow the food it needs, while delivering compelling shareholder value.”
Mohamed Al-Mady, SABIC Vice-Chairman and CEO said, “SABIC and others are working as swiftly as possible to provide the necessary ingredients for the development of new value chains within our current economic structure. New value chains, downstream investment, require a collaborative and prolonged effort. The Kingdom, SABIC, Ma’aden and Mosaic fully recognize the importance of continuing to develop a strategy utilizing and building on existing domestic capabilities to diversify the existing economic landscape. This partnership will add more sales to SABIC’s volume and strengthen our position as a primary nutrient supplier.”
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