Details

Riyadh, Saudi Arabia,14 July 2008: Ma'aden Phosphate Company (MPC), the joint venture between Ma'aden, the Saudi Arabian Mining Company, and Saudi Basic Industies Corporation (SABIC), today signed a US$1.067 billion loan agreement with the Saudi Arabian Public Investment Fund (PIF).

The loan has a term of 16 years which includes an initial no repayment period of four years.

Speaking at the signing ceremony, Dr Abdallah Dabbagh, Chairman of MPC, said, “We are very pleased today to be signing this loan agreement with the Public Investment Fund which represents another major forward step for the delivery of our phosphate project. We have already begun construction of a number of plants at the Al Jalamid and Ras Az Zawr complexes.”

The syndicated facilities announced last month comprise; US$2.06 billion 16 year 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 come from the Saudi Industrial Development Fund for $135 million.

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

The operation is being developed by Ma'aden Phosphate Company (MPC) a joint venture between Ma'aden and SABIC. The Joint Venture Agreement was concluded on 15 September 2007 by Ma'aden and SABIC and MPC was incorporated in January 2008.

It is estimated that MPC 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 the 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.

NOTES TO EDITORS