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Saline Water Conversion Corporation (SWCC), Ma'aden and Saudi Electricity Company (SEC) have signed an agreement to construct a joint power plant to generate 2,400 MW of electricity and 1.025 million cubic meters of desalinated water per day.

The project replaces previous plans by Ma'aden and SWCC to establish two separate power and desalination plants to supply the planned aluminum complex at Ras Az-Zawr on the Kingdom’s east coast and augment the national electricity network.

The new agreement will deliver enhanced project economies including increased capacities, reduced infrastructure costs and optimized energy efficiency. SWCC will implement the project for completion in the last quarter of 2013, commencing water supply and delivery of power to the grid six months earlier than the original schedule.

The new plant will pump one million cubic meters of desalinated water per day to Riyadh, Hafr Al-Batin, and Nuayriyah. SEC's share will be 1,050 MW of electricity, some of which will be allocated to downstream industries at Ras Az-Zawr while Ma'aden will use 1,350 MW of electricity and 25,000 cubic meters of desalinated water per day for its aluminum project.

Ma’aden’s aluminium project includes the development and construction of a bauxite mine near Al Baitha with a mine life of over 30 years at an annual capacity of 4,000,000 metric tons as well as facilities for handling raw materials. It also comprises the development, design, construction and operation of an integrated aluminum operation at Ras Az-Zawr about 90 km north of Jubail Industrial City. Facilities there will include an alumina refinery with a capacity of 1,800,000 metric tons per year, a 740,000 metric ton per year aluminium smelter and an aluminum rolling mill with a capacity of 250,000 tons per year.

The Bauxite will be transported from the mine site located between Hail and Qassim provinces, via the north-south railway to Ras Az-Zawr where it will be refined to produce alumina, which in turn will be processed in the aluminum smelter to produce aluminum. The mine plan has been prepared based on the planned capacities of the refinery and smelter and reviewed in comprehensive technical studies.

The project will be a catalyst for aluminum-related downstream industries, including rolling, casting, extruding, formation and recycling, leading to the establishment of numerous diverse industries such as:

• Automotive and transport manufacturing including parts used in cars, trucks, vehicles, engines, airplanes, etc.
• Packaging industries such as cans and aluminum foil.
• Construction industries including windows, doors, cables, wires, transformers, coverings and pipes.

The Ministry of Petroleum and Mineral Resources has allocated the fuel needed for these projects.

During the signing ceremony SWCC Governor, Mr. Faheed Fahed Al-Sharif, said, "When the government committed itself to implementing the power plant project at Ras Az-Zawr, it emphasised its interest in and support for development projects. The government will not allow the economic conditions that have engulfed the world recently to affect the project. The project expansion to include the needs of SWCC, SEC and Ma'aden will use the latest technologies and increase the efficiency of energy use contributing to lower water and electricity production costs and the completion of the project in the shortest time possible. Cooperation between the Ministry of Petroleum and Mineral Resources, SWCC, Ma'aden and SEC on this project is the outcome of the compatible objectives and understanding of all parties and represents a nucleus for other projects to come, God willing."

Engr. Abdullah Saif Al Saif, Chairman of Ma'aden said, "This agreement proves that cooperation between the private and public sectors gives fruitful, tangible results and concrete economic benefits, including the optimal use of energy.”

Mr Ali Saleh Al-Barrak, President and CEO of Saudi Electricity Company said, “This project which will provide about 1000MW to meet growing energy demand in the Kingdom is the result of cooperation and partnership between the electricity, water and industrial sectors.”

Dr. Abdallah Al-Dabbagh, president and CEO of Ma'aden added, "This is a great example of diversification by building a strong foundation to generate new downstream industrial opportunities, creating jobs in the Ras Az-Zawr area. As we previously stated, following the onset of the global financial crisis Ma'aden remained fully committed to its integrated mine to metal aluminium project and re-evaluated the project for a limited period to consider cost reductions. Thankfully, we were able to accomplish that and improve the economics of the aluminum project in order to achieve better investment returns for our shareholders and numerous other benefits arising from the aluminum industry and its added value downstream opportunities including new employment opportunities for Saudis."

Ma'aden recently completed agreements for the transfer of aluminum smelter technology and technical cooperation.