The Saudi Arabian Mining Co. (Ma’aden) has signed a heads of agreement to develop jointly a fully integrated, world-class phosphate production facility in Saudi Arabia with The Mosaic Co. and Saudi Basic Industries Corp. (SABIC). The cost of the project is estimated at SR26 billion ($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 its production capabilities. The project will include new mining and processing plants at Wa’ad Al Shammal Mineral Industrial City in northern Saudi Arabia, as well as further processing plants at Ras Al Khair Mineral Industrial City. The two sites will be linked by Saudi Arabia’s North-South Railway.

Production at the new facilities is expected to start in late 2016, with a total production capacity of approximately 16 million mt/y. The facilities will produce, as finished product, approximately 3 million mt/y of fertilizer products, as well as approximately 440,000 mt/y of downstream products, including purified phosphoric acid used in food industries, sodium tripolyphosphate used in detergent manufacturing, and dicalcium phosphate and monocalcium phosphate used in the manufacture 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 joint venture partners are developing plans for a local research and development facility that will encourage the study and development of phosphate products and processes. The partners also will sponsor school programs to help raise the academic and scientific capabilities of students in selected regional schools in northern Saudi Arabia.

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 more than a century of experience in the fertilizer industry. Mosaic is currently the world’s largest producer of phosphate fertilizers, with extensive technical and operating experience, as well as best in class environmental and safety management systems. SABIC is ranked second among the world’s diversified chemicals companies and brings broad experience in large project execution and global marketing capability.

“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 CEO 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.”

Ma’aden Building New Gravity-CIL Gold Plant: In other news, Ma’aden Gold & Base Metals Co. has signed a contract worth SR1.018 billion (about $271 million) with Hanwha Engineering and Construction of Korea to construct a gravity-CIL gold processing plant at its Ad Duwayhi gold project currently under development in Saudi Arabia. The project is located in a remote desert area approximately 450 km southwest of Riyadh and 450 km east-northeast of Jeddah. The contract includes detailed engineering, procurement, construction, pre-commissioning, commissioning, start-up assistance and training services.

The Ad Duwayhi gold project is a key part of Ma’aden’s program to develop several new gold mine facilities in the central-western region of Saudi Arabia, which contains many of the Kingdom’s gold deposits. The plant will process approximately 2 million mt/y of ore from an adjacent open-pit mine and is scheduled for completion by the end of 2014. The project will produce about 180,000 oz/y of gold and more than 1.6 million oz of gold over the life of the mine.

Al-Mudaifer said, “The signing of this contract represents an important early milestone in our program to expand development of Saudi Arabia’s gold ore deposits, and this project will make a substantial contribution to Ma’aden’s overall gold production capacity.”

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