Dr. Abdullah Ibn Issa Al-Dabbagh, President and CEO of Ma’aden, and Mohamed Al-Mady, Vice-Chairman and CEO of SABIC today signed an agreement opening the way for the two companies to create a strategic joint venture in a phosphate minerals project.
Total capital investment in the project is SR13 billion. SABIC will have a thirty percent (30%) equity share with the seventy percent (70%) balance of ownership being retained by Ma’aden. The project aims to utilize phosphate reserves in the north of Saudi Arabia to produce phosphate fertilizers in the Minerals Industrial City at Ras Az Zawr.
Dr. Dabbagh said, “This strategic alliance between two major players of Saudi industry is a major boost for the Saudi fertilizer and mining industries. It will reinforce existing efforts for the development of an integrated industry and help in the exchange of technology, expertise and development programs to optimize the utilization of this vital resource. It will further drive long term industrial progress, creating high quality Saudi products that are competitive in world markets.”
“The project caters for effective collaboration between the two leading companies. Ma’aden will furnish technology and expertise in the phosphate industry while SABIC will provide technology and marketing expertise in the field of nitrogen fertilizers.”
Dr. Dabbagh stated that the project consists of a phosphate mine and processing plant at Al-Jalamid in the Northern Region of Saudi Arabia. There will also be a phosphate fertilizer production complex north of Al-Jubail at Ras Az Zawr. Ma’aden recently signed contracts for the designing of Sulfuric Acid, Phosphoric Acid, Ammonia and Diammonium Phosphate plants, producing 3 million tonnes per year of Diammonium Phosphate Fertilizer (DAP) within the fertilizer complex in the Minerals Industrial City at Ras Az Zawr. The complex is scheduled to go on-stream by mid 2010. It will be one of the world’s largest single phosphate fertilizer complexes.
The phosphate concentrate produced at the mine will be transported 1,200 kilometers to Ras Az Zawr by rail where it will be processed. The Public Investment Fund (PIF) is financing and supervising the construction of the new North South Railroad that will be used to transport the phosphate concentrates.
The phosphate ore reserves in the North of the country will be surface mined and have an estimated mineable resources of 1.6 billion tonnes in addition to further resources of 1.5 billion tonnes.
Mohamed Al-Mady, SABIC Vice Chairman and CEO expressed his appreciation at the signing of the agreement between SABIC and Ma’aden. He reaffirmed the significance of strategic partnerships within national production sectors which follow the pattern of major alliances among global companies in the industrial world, aimed at strengthening their competitiveness.”
Al-Mady said, “This agreement is a leading step that should be followed by similar initiatives to build up national strategies to implement integration among these sectors and optimize the use of hydrocarbon and mineral resources nation-wide to drive industrial development, increase contribution to the GDP and diversify the national income resources.”
Al-Mady explained that the agreement between SABIC and Ma’aden will add considerable value to the Saudi fertilizer industry. He said, “It provides for growth to meet the national agricultural sector’s needs and better contribute to achieving world food security. SABIC is one of the world’s largest producers of fertilizers with an annual capacity exceeding 8 million tonnes and is the world’s largest producer of granular urea. It has built up a world-class global marketing network and advanced R&T facilities which innovate and have developed many industrial technologies. SABIC also plays a leading role in agricultural research.”
Approximately 1,400 new direct jobs will be created by the project with significant numbers of additional indirect jobs being created in supporting industries.