Ma’aden Announces Partnership to Develop New Integrated Phosphate Complex with Mosaic and SABIC
Riyadh, 19th March 2013
The Saudi Arabian Mining Company (Ma’aden) today 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.”
About King Abdullah Project for the Development of the Promise of the North (Wa’ad Al-Shammal City)
All of the mining and most of the processing plants announced in today’s joint venture will be located in the King Abdullah Project for the Development of the North - Wa’ad Al-Shammal City, a new industrial area being developed under the sponsorship of King Abdullah and the government of Saudi Arabia and the management of Ma’aden and the Ministry of Petroleum and Minerals. Ma’aden’s investment in Wa’ad Al-Shammal will include seven large world class plants and associated facilities, with a total production capacity of approximately 16 million tonnes per year and will include phosphate concentrate, sulphuric acid, phosphoric acid, di-calcium phosphate and mono-calcium phosphate used in manufacturing animal feed, purified phosphoric acid used in technical and food industries, and sodium tripolyphosphate used in manufacturing detergents and for industrial purposes.
Wa’ad Al Shammal City will significantly boost northern development. At its peak, it is expected that 22,000 jobs will be created in the North as a result of the King Abdullah Project for the development at Wa’ad Al-Shammal city, both directly and indirectly. This will elevate the living standards of people in the north and, through vocational training, open up new job opportunities for Saudi youth in accordance with the vision of the Custodian of the Two Holy Mosques, King Abdullah Bin Abdulaziz. As a result of renewed opportunities, the City is expected to grow to over 20,000 inhabitants over the next 10 years, prompting the development of medical centres, mosques, schools, government offices, hotels and shopping and recreation centres.
Ma’aden has already begun the early steps necessary to deliver the King Abdullah Project to Develop Wa’ad Al-Shammal City. Ma’aden has signed a total of five contracts with international companies. In May of 2012, the first contract was awarded to prepare a general engineering plan for the city including basic, downstream and supportive industries, as well as a residential city which will include commercial, residential and educational facilities. This contract paves the way to building a world-class integrated industrial Minerals city at Wa’ad Al-Shammal that will match the industrial cities of Jubial, Yanbu and Ras Al Khair. These services were executed in two phases, the first phase ended in November 2012 and the second ended in March 2013. A second contract was awarded in May of 2012 to carry out design, development and project management for the project during its first phase.
In December 2012, Ma’aden concluded three further contracts for Wa’ad Al-Shammal City development. The first was to provide project management consultancy (PMC) for the phosphate process plants at Wa’ad Al-Shammal; the second contract was to provide overall management services for the project; and the third contract was to provide Front End Engineering and Design (FEED) of essential infrastructure as well as project management execution. Recently, Ma’aden has issued requests for proposals from qualified contractors to establish Ammonia and Phosphate fertilizer plants. Further contracts will be concluded during the coming months.
Ma’aden is a leading mining and metals company in the Kingdom of Saudi Arabia, with a diverse portfolio of mineral assets at various stages of development including exploration, development and production. Ma’aden has a broad commodity focus spanning gold, phosphate, aluminium, magnesia, low-grade bauxite, industrial minerals, and is continually assessing opportunities to enter into new commodities that demonstrate strong long-term fundamentals and opportunities for growth. Ma’aden’s objective is to become a world class diversified mining and minerals company, and to enhance overall value for its shareholders. Our mission is to be a profitable, publicly owned, international mining company, while maintaining the utmost concern for human resources, health, safety, environmental and social issues. For more information please visit www.maaden.com.sa.
The Mosaic Company is one of the world's leading producers and marketers of concentrated phosphate and potash crop nutrients. Mosaic is a single source provider of phosphate and potash fertilizers and feed ingredients for the global agriculture industry. More information on the company is available at www.mosaicco.com.
Saudi Basic Industries Corporation (SABIC) ranks among the world’s top petrochemical companies. The company is among the world’s market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.
SABIC recorded a net profit of SR 24.72 billion (US$ 6.59 billion) in 2012. Sales revenues for 2012 totaled SR 189 billion (US$ 50.40 billion). Total assets stood at SR 338 billion (US$ 90.13 billion) at the end of 2012.
SABIC’s businesses are grouped into Chemicals, Polymers, Performance Chemicals, Fertilizers, Metals and Innovative Plastics. SABIC has significant research resources with 18 dedicated Technology & Innovation facilities in Saudi Arabia, the USA, the Netherlands, Spain, Japan, India, China and South Korea. The company operates in more than 40 countries across the world with around 40,000 employees worldwide.
SABIC manufactures on a global scale in Saudi Arabia, the Americas, Europe and Asia Pacific.
Headquartered in Riyadh, SABIC was founded in 1976 when the Saudi Arabian Government decided to use the hydrocarbon gases associated with its oil production as the principal feedstock for production of chemicals, polymers and fertilizers. The Saudi Arabian Government owns 70 percent of SABIC shares with the remaining 30 percent held by private investors in Saudi Arabia .
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