DUBAI: Saudi Arabian Mining Co. (Maaden) is talking to banks to raise a loan worth up to $3 billion, three banking sources aware of the matter said, to refinance debt taken on to construct a phosphate complex for a joint venture.

The Gulf’s largest miner operates Maaden Phosphate Company (MPC), which produces ammonia and the fertilizer diammonium phosphate (DAP), in a 70/30 ownership split with petrochemicals giant Saudi Basic Industries Corp. (SABIC).

The MPC facilities cost around $5.52 billion to build, for which the original funding was put in place in 2008 on a 70/30 split between debt and equity from the two parents, with two Saudi government funds contributing debt worth $1.1 billion.

The remaining $2.76 billion came via loans from commercial banks and finance backed by Korean export credit agencies. Maaden has invited banks to submit proposals on refinancing this debt, according to the banking sources.

Maaden declined to comment.

Given the facilities have been operational since 2011, they now have financial records which banks can use to base their lending decision against — meaning the new debt should be priced at a much cheaper rate than the original project finance which had included risks relating to construction and getting the scheme up and running.

Maaden is seeking a loan with a lifespan of seven years, with an amortising structure, one of the sources said.