Ma’aden, SABIC sign joint Venture Pact

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SAUDI Arabian Mining Company, Maaden and Saudi Basic Industries Corporation (SABIC), the two Saudi companies that already signed a SR21 billion Heads of Agreement early this year finalized a historic joint venture agreement in Riyadh on Saturday to create the worlds largest fully integrated fertilizer production operation.

Dr. Abdullah Dabbagh, president and CEO of Maaden and Mohammed Al-Mady, vice chairman and CEO of SABIC signed the agreement under which SABIC will have a 30 percent equity share with the 70 percent balance of ownership being retained by Maaden. The joint venture will mine phosphate reserves at Al-Jalamid, north of Saudi Arabia, to produce phosphate fertilizers at a new purpose-built processing facility at Ras Az Zawr, located on the central east coast 90 kilometers north of Jubail.

Dr. Dabbagh, after signing of the agreement, said the joint venture would bring together two huge Saudi companies that will make Saudi Arabia a global leader in the phosphate fertilizer industry.

"The joint venture project is an excellent example of how mining combined with downstream expertise can create industrial diversification and increase employment opportunities," Dr. Dabbagh said.

Al-Mady, added the partnership will involve a close collaboration between the two leading companies with Maaden furnishing technology and expertise in the phosphate industry and SABIC providing technology and expertise in the field of nitrogen fertilizers in addition to the marketing expertise.

Dr. Dabbagh earlier told the Saudi Gazette that around 1,400 new long-term direct jobs will be created by the project with significant numbers of additional indirect employment for young Saudis in supporting industries, especially in the northern and eastern regions of the Kingdom.

After mining and initial processing at Al-Jalamid, five million tons per year of phosphate rock concentrate will be transported by the new Saudi Railway Project railroad to the phosphate complex at Ras Az Zawr to produce diammonium phosphate (DAP) fertilizer.

Contracts for an ammonia plant, a DAP granulation plant, a sulphuric acid plant and a phosphoric acid plant at Ras Az Zawr were signed with international companies earlier this year.

Maaden on June 25 signed three contracts at a combined value of SR5.6 billion with Spanish, French and Finnish-based firms to establish worlds largest fully integrated fertilizer production plants at Ras Az Zawr.

It also signed a SR3.6 billion contract with Samsung Engineering Co. Ltd., to build Ammonia production plant at Ras Az Zawr.

When the project becomes fully operational, Maaden Phosphate will account for more than 20 percent of the world market for traded DAP fertilizer.