ALKHOBAR: Saudi Arabian Mining Co. (Maaden) said on Monday its joint aluminum smelter with US-based Alcoa has started commercial operations.

The $10.8 billion aluminum plant at Ras Al-Khair, on the Gulf coast of the Kingdom, had experienced issues during the initial start-up phase last year when it had to shut one of its two smelting lines in October due to problems encountered during ramp-up.

The smelter has a production capacity of 740,000 tons a year of aluminum, with commercial operations to begin impacting Maaden's financials from the third quarter onwards, it said in a bourse filing.

The Saudi project is important to Alcoa, both because of its size and the fact it should be the facility with the lowest production costs in the world - important at a time when the industry pushes to cut expenses.

Alcoa owns 25 percent of the joint venture, with Maaden holding the balance.