Maaden to ramp up phosphate output in 2017

Maaden to ramp up phosphate output in 2017
An employee works at a Maaden facility in Ras Al-Khair Wednesday. (Reuters)
Updated 25 November 2016

Maaden to ramp up phosphate output in 2017

Maaden to ramp up phosphate output in 2017

ALKHOBAR: Saudi Arabian Mining Co. (Maaden) will ramp up production of phosphate from its new Waad Al-Shamal facility by mid-2017, its CEO Khalid Al-Mudaifer said.
Once at full capacity in 2019, the complex will roughly double Saudi’s production of the material, primarily used as a fertilizer, to 6 million tons a year — putting it joint-sixth globally, according to 2014 estimated production data from the US Geological Survey.
“Construction will be completed by the end of this year and, starting next year, we will begin production ramp up on a staggered basis to reach full capacity,” Al-Mudaifer said in an interview at the company’s headquarters in Ras Al-Khair.
The additional capacity will make Maaden the world’s third largest phosphate producer, he said.
The mining sector offers one way to alleviate the damage that the slump in oil prices has done to government revenues.
“Wa’ad Al-Shamal will have a major impact on the phosphate fertilizer market,” said Chris Lawson, senior consultant, head of phosphate analysis at CRU Group.
The company “will have their own phosphate rock source, ammonia source, and have cheap access to sulfur, the three key ingredients for phosphate fertilizers. This will make them the lowest cost producer in the world,” he added.
Al-Mudaifer said full capacity would be reached by 2019.
While it will compete for business with Morocco and other producers, it is well-placed to supply India and East Africa and has “increased (its) share in markets such as Pakistan, Brazil and SE Asia,” CRU’s Lawson said.
“They are also well placed to serve the small but growing East Africa fertilizer market.”
Waad Al-Shamal is part of an ambitious industrial scheme aimed at opening up Saudi Arabia’s north to development that will boost job creation.
Saudi authorities estimate the region holds 500 million tons of phosphate ore, around 7 percent of global proven reserves, mainly in the Al Jalamid and Umm Wu’al areas between Arar and Turaif.
Mudaifer said these reserves, while high quality, were among the least exploited globally because of lack of infrastructure.
But now unconventional gas in the area is being harnessed for the first time, power comes from a plant built by Saudi Electricity Co, and a railway links Waad Al-Shamal to Ras Al-Khair.
Around SR28 billion has been invested on the project, under the umbrella of Wa’ad Al-Shamal Phosphate Company (MWSPC), a venture between Maaden, Mosaic and the Saudi Basic Industries Corp. (SABIC).
“We have plans to grow (but) it will be subject to the market being ready to absorb the additional quantity,” Al-Mudaifer said of the company’s ambitions.
Ras Al-Khair is already home to a Maaden phosphate venture with SABIC, Maaden Phosphate Company.
Started in 2011, it produces three million tons of diammonia phosphate (DAP) annually.
Elsewhere in Ras Al-Khair, Maaden has developed Saudi Arabia’s first aluminum scheme, with Alcoa.
Having previously imported alumina, a raw material for the metal, the plant will utilize only Saudi resources for the first time in 2016, according to officials at the facility.
Alumina production will reach its 1.8 million tons annual capacity in December this year and could increase to 2 million tons should there be market appetite.
“We have the potential and we designed our plant for additional lines,” Al-Mudaifer said.
“Provisions are already there, we have the alumina, the rock, the energy and the power, but we need the markets.”