Sino-Saudi Jazan Aluminum Builds Phase I of JEC's Aluminium Smelter

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Researched by Industrial Info Resources (Sugar Land, Texas)--The Jazan Economic City (JEC), a "city of the future," is in the Jazan province in southwest Saudi Arabia. JEC will boast low energy costs, abundant resources and superior infrastructure, and it intends to be a powerhouse of heavy and secondary industries, as well as human resources and unique lifestyles. The heavy industries sector includes a power plant, a desalinization plant, an industrial port, a ship-building yard, an iron-ore complex, a refinery and an aluminum smelter.

Not only will the city benefit from a wealth of resources and labor, but it will be well connected; JEC's largest city, Jizan, is home to the Port of Jizan, and JEC has planned an international airport, a new road stretching to the east, and a rail line to Jeddah.

In 2007, joint venture company Sino-Saudi Jazan Aluminum Limited and a consortium led by Saudi Binladin Group (Jeddah, Saudi Arabia) joined to begin planning the JEC's aluminum smelter, which is estimated to cost between US$3 billion and US$4.5 billion. Sino-Saudi Jazan Aluminum Limited was formed by Malaysia Mining Corporation Berhad (MYX:2194) (MMC) (Kuala Lumpur, Malaysia) and China Aluminum Corporation (NYSE:ACH) (Chalco) (Beijing, China). MMC is involved in many projects dealing with logistics and transportation; energy and utilities; and engineering and construction. Chalco is the second-largest producer of alumina worldwide and is ranked among the top five primary aluminum producers.

Currently, the joint venture and consortium is constructing the US$500 million Phase I of the aluminum smelter near Jizan. When complete during the fourth quarter of this year, Phase I is expected to produce about 335,000 tons of aluminum annually. When phases II and III are completed, the smelter is anticipated to produce approximately 1 million tons per year. Construction of Phase I will include an anode plant, as well as auxiliary facilities and utilities.

MMC also plans to gain a 50% stake in a power plant that will serve as the energy source for the aluminum smelter. Saudi Arabian General Investment Authority (Riyadh, Saudi Arabia) has agreed to provide a fuel supply to power the plant, which will produce about 1,800 megawatts, which are needed to feed the smelter's electricity demands. The 50% stake in the power plant will offer MMC a greater income to help it gain recovery from the economic crunch.

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