Ma'aden Retenders $1 Billion Construction Contract for 1.6 Million-Ton Ras Az Zawr Aluminum Smelter and Refinery

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Researched by Industrial Info Resources (Sugar Land, Texas)--Saudi Arabian Mining Company (SAU:1211) (Ma'aden) (Riyadh, Saudi Arabia) has re-issued a tender for a 1.6 million-ton-per-year alumina refinery. About five companies have been invited to submit bids for the $1 billion construction contract. December 15 was the last day for submission of bids. Late last year, Ma'aden had awarded the engineering, procurement, construction, and management contract to Flour Corporation (NYSE:FLR) (Irving, Texas). Fluor also has been invited to participate in the new round of bidding.

In 2007, Ma'aden had signed a cooperation agreement with Rio Tinto Alcan (Montreal, Canada), under which the two companies agreed to develop a 720,000-ton-per-year aluminum smelter and refinery at Ras Az Zawr. In 2008, Rio Tinto Alcan cancelled its plans to own a 49% stake in the $10 billion mine-to-metal project because of the global economic downturn. Since then, Rio Tinto Alcan has changed its role from an equity partner to that of a working partner. In March 2009, the two companies agreed to work under a cooperation and smelter-technology transfer agreement. Under the transfer agreement, Rio Tinto Alcan will be providing Ma'aden with the industry-leading AP smelting technology, while the cooperation agreement will provide Ma'aden with other kinds of support, including research and development assistance, secondment of key personnel, technical services, management services, and aluminum off-take support. Rio Tinto Alcan also will participate in procurement and supply of raw materials and alumina. The AP37 technology is recognized as environmentally friendly and the most energy-efficient smelter technology available on a commercial basis.

The project originally was scheduled to begin in the first quarter of 2010 and be ready for operations in the first quarter of 2013. However, Rio Tinto Alcan's decision has delayed the project schedule by at least three years.

Ma'aden will be procuring bauxite, the raw material for the project, from mines at Az Zabirah.

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