RIYADH, 21 November 2005 — Saudi Arabia has expanded the planned privatization of state-owned mining firm Maaden to cover 50 percent of its gold, bauxite and phosphate operations, Maaden Chief Executive Officer Abdullah Dabbagh said yesterday.
Maaden originally planned to sell off its operations in stages, starting with its gold unit this year. But Dabbagh said executives had decided to include the bauxite and phosphate operations in an initial private offering at the end of 2006. “There is a change in plan. At the last board meeting they wanted to privatize all of Maaden,” Dabbagh said.
Maaden’s gold mining unit produces around 300,000 ounces of gold a year. The company plans to exploit phosphate reserves in the north of the country to export fertilizer by 2008, and to mine bauxite for aluminum production shortly after that. “We are ready today to privatize the gold company,” Dabbagh said. “Phosphate, we will be ready for that in six months but it would take longer than that for the aluminum.”
Saudi Arabia plans to build a freight rail line linking bauxite and phosphate reserves to the industrial city of Ras al-Zour on its eastern Gulf coast, which will produce aluminum and fertilizers.
Dabbagh said an international tender would be offered within six to eight months for construction and operation of the 1,400 km (875 mile) mineral rail project, which would eventually be used for passenger traffic as well.
Maaden will also issue a tender within six months for construction of the port at Ras Al-Zour.
Maaden says its Jalamid mine will yield enough phosphate for annual production of 3 million tons of di-ammonium phosphate. The project will cost an estimated $1.8 billion.
The Az-Zabirah mine will provide bauxite for production of 1.4 million tons of alumina to feed a 640,000 tons-per-year aluminum smelter. Maaden estimates the cost of the whole bauxite and aluminum production process, including port and power plant facilities, at $4.5 billion.
The Gulf Arab region, which sits on nearly half the world’s proven oil reserves, is already home to smelters Aluminum Bahrain and Dubai Aluminum which have a combined capacity of over one million tons. A 325,000 tons per year smelter is planned in Oman and a 570,000 tons-per-year smelter in Qatar.
Maaden’s privatization follows the partial sale of government stakes in Saudi state telecoms, electricity and petrochemical firms. Other companies slated for eventual offering include the state airliner Saudia and National Commercial Bank.
