Ma’aden Signs Shareholder Agreement with Mosaic and SABIC for Wa’ad Al Shammal
The Saudi Arabian Mining Company (Ma’aden) today announced the signing of a shareholders agreement to jointly develop a fully integrated, world-class phosphate production facility in Saudi Arabia with partners The Mosaic Company and the Saudi Basic Industries Corporation (SABIC). Ma’aden, Mosaic and SABIC will own 60%, 25% and 15% of the project respectively. With HSBC appointed as financial advisor, Ma’aden expects project financing to be concluded in Q4 of this year.
The new complex will act as the anchor project at Wa’ad Al Shammal and will deliver significant value to Ma’aden shareholders. As one of the largest and most efficiently integrated phosphate fertilizer facilities in the world, it will double Ma’aden’s cost effective phosphate production and improve Ma’aden’s access to key global markets. The estimated cost of the project is approximately SR 26 billion (US$7 billion), and production at the new facility is expected to commence in late 2016 with a total 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. The project is studying plans involving a number of additional factories dedicated for downstream products.
Khalid S. Al Mudaifer, Ma’aden President and CEO, said that “the partnership is a crucial step in the execution of King Abdullah Project for the Development of Wa’ad Al Shammal Mineral Industrial City in the Northern Province of the Kingdom. Ma’aden was entrusted by the Custodian of Two Holy Mosques in 2012 to build a world-class industrial city with international standards that will equal the industrial cities of Jubail, Yanbu and Ras Al Khair.”
He said: “This agreement has already attracted global attention to the project and in just one year we have engaged local and international contractors from the USA, Europe and Asia. We expect to finalise all engineering, procurement and construction contracts before the end of the 2013 and begin construction next year.” Al Mudaifer explained that the joint venture will bring a significant amount of the world’s best expertise to Wa’ad Al Shammal. Ma’aden brings broad experience in the mining industry while its partnership with SABIC, one of the world’s largest diversified chemical companies brings broad experience in large project execution and global marketing capability and with Mosaic Company, the world’s largest producer of phosphate fertilisers with over century experience in fertiliser industry, shall bring extensive technical and operating experience, as well as best-in-class environmental and safety management systems.
Ma’aden’s diversified investment portfolio in the Kingdom continues to achieve profitable growth, adding value to its shareholders and fostering economic development of the regions and communities where it operates. Ma’aden has already initiated a coordinated programme of regional development to ensure that this project significantly enhances local opportunities for training and employment and provides a strong catalyst for the growth of small and medium sized businesses in the region.
Al Mudaifer added that Ma’aden has engaged with local colleges and universities in the region to establish training and development programmes in line its commitment to attracting Saudi talent and qualifying them to work at Ma’aden various projects across the Kingdom. The company has so far qualified more than 500 high school students as well as diploma, bachelor and master’s degree holders to its training and development programmes run in collaboration with Jubail Industrial College. He emphasised that development of local communities in the Northern region will be a key benefit of the project which is expected to bring more than 1500 direct job opportunities. Ma’aden’s comprehensive strategic CSR programme shall continuously support local programmes in the region.
Al Mudaifer also pointed out the establishment of the Saudi Mining Polytechnic (SMP) in Ar’ar province in partnership with the Technical Vocational Training Corporation (TCTC) as well as with Missouri University of Science and Technology. The institute offers mining training diplomas in three majors including underground mining, surface mining and operations. The SMP opened its doors in September 2012 to highschool graduates who are residents of areas adjacent to Ma’aden’s mine locations. More than 2500 students have been graduated this year. The new complex will likewise establish a specialized training center in King Abdullah Project for the Development of Wa’ad Al Shammal City in cooperation with TVTC in order to meet the city’s demand for professional competencies.
The joint venture partners also plan to establish a local research and development facility in Wa’ad Al Shammal, which will encourage the study and development of phosphate products and processes. Moreover, the partners shall coordinate with concerned authorities in the Kingdom to promote the academic and scientific learning capabilities of the students in Ar’ar and Turaif. These local community initiatives will support Ma’aden’s operating philosophy of ‘community localisation’ which is focused on developing the local community workforce through training and building the local supplier base.
Progress has been made at King Abdullah’s Project for the development of Wa’ad Al Shammal Mineral Industrial City. Ma’aden has completed the Master Plan for city development and contract awards for housing, roads and other city infrastructure for the first phase of the city development are all expected in Q3 this year with construction beginning before year end. Saudi Arabia Railway Company (SAR) is progressing with a rail extension linking Wa’ad Al Shammal to the national railway network. The Saudi Electricity Company (SEC) is moving forward with plans to connect Wa’ad Al Shammal to the high voltage national power grid and Saudi Aramco is working to ensure the supply of natural gas to Wa’ad Al Shammal before the start of production.
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