Details

RIYADH, 15th June 2008: Ma'aden Phosphate Company (MPC), the joint venture between the Saudi Arabian mining company (Ma'aden) and Saudi Basic Industries Corporation (SABIC), today reached an important milestone with the signing of financing agreements for significant funding.

The syndicated facilities comprise; US$2.06 billion 16 year conventional and Islamic facilities, a US$200 million 16 year Korean Export Insurance Corporation covered facility, a US$400 million 16 year facility provided by the Export-Import Bank of Korea, and a US$100 million revolving working capital facility. Direct funding will also be provided by the Public Investment Fund for $1,067 million, and the Saudi Industrial Development Fund for $135 million.

Speaking at the signing ceremony, Dr Abdallah Dabbagh, President and CEO of Ma'aden and Chairman of Ma'aden Phosphate Company, said, “We are very pleased today to be signing these documents which represent a major forward step for the delivery of our phosphate project. It is worth noting that these facilities were oversubscribed despite challenging market conditions.”

“This loan facility along with the funds expected to be raised in Ma'aden’s forthcoming IPO moves us much closer to seeing this project become a reality. We have already begun construction of a number of plants at the Al Jalamid and Ras Az Zawr complexes are on schedule.”

The following institutions have participated in the financing arrangements: Al Rajhi Banking and Investment Corporation, APICORP, Arab Banking Corporation, Arab Bank PLC, Arab National Bank, HSBC, Bank Al Jazira, Bank of Tokyo Mitsubishi UFJ, Banque Saudi Fransi, BNP Paribas, Calyon, Islamic Development Bank, Mizuho Corporate Bank Ltd, Riyad Bank, Royal Bank of Scotland, Samba Financial Group, Saudi British Bank, Saudi Hollandi Bank, Saudi Investment Bank, and Standard Chartered Bank.

The Financial Advisors are Standard Chartered Bank and Riyad Bank and the legal advisors are Baker & McKenzie.

Ma'aden Phosphate Company aims to be a world scale fully integrated phosphoric fertilizer producer that will exploit a robust phosphate deposit located at Al Jalamid in the north of the Kingdom and utilise local natural gas and sulphur resources to manufacture diammonium phosphate (DAP). Its work involves the development, design, construction and subsequent operation of two primary sites. The first is the Al Jalamid mine site in the north of the Kingdom which will comprise a phosphate mine and a beneficiation plant. The second is the Ras Az Zawr site on the eastern coast of the Arabian Gulf approximately 90km north of Jubail with a fertiliser production facility comprising DAP, ammonia, sulphuric acid and phosphoric acid processing plants; with each site supported by appropriate industrial and social infrastructure.

The operation is being developed in a joint venture with SABIC, through a limited liability company, Ma'aden Phosphate Company (MPC), incorporated in Saudi Arabia. A Joint Venture Agreement was concluded in 15 September 2007 by Ma'aden and SABIC and MPC was incorporated in January of 2008.

It is estimated that Ma'aden Phosphate Company will produce approximately 2.92 million tonnes per year (Mtpy) of granular DAP, plus approximately 0.44 Mtpy of excess ammonia for export to world markets. It is also anticipated that the Phosphate Project will generate approximately 0.16 Mtpy of excess phosphoric acid for sales to the domestic market.

The total cost of the project is estimated at SR20.70 billion (US$5.52 billion ) taking account of projected annual inflation and estimated financing costs and including engineering, procurements and construction costs of SR17.03 billion (US$4.54 billion ). Over 75 % of total capital costs have been contracted at a fixed rate under signed Lump Sum Turn-Key (“LSTK”) contracts for the engineering, procurement and construction ("EPC") of a beneficiation plant, DAP, ammonia, sulphuric acid and phosphoric acid processing plants and certain supporting infrastructure.

30% of total project costs of the project will be funded by equity contributions from Ma'aden and SABIC in proportion to their interests in the project which are 70% Ma'aden and 30% SABIC. Today’s signing ceremony is for the syndicated debt element of the remaining project costs.