State-owned Saudi Arabian Mining Company (Maaden) will launch an initial public offering of 50 percent of its equity in July. The float represents the Middle East's largest ever mining company IPO. The issue of 462.5 million $5.50 shares is half of Maaden's stock and values the company at $4.9 billion. The IPO is expected to raise $2.47 billion and will provide the last link in the financing arrangements for the company's huge aluminum project, said Maaden chief executive officer Abdullah Dabbagh. Financing for the joint venture aluminum project with Rio Tinto Alcan is expected be concluded by August. JP Morgan Chase & Company is advising Maaden over the IPO which will be restricted to Saudi institutions and individual investors. The remaining Maaden stock will be held by the Public Investment Fund under the Ministry of Finance. Escalating construction and material costs have complicated the finalization of the estimated $7.5 billion venture, which involves building a 670,000 tons-a-year smelter, alumina processing facility and 1,800 megawatt power plant, north of Jubail on the kingdom's east-central coast at Ras Al-Zour. Rio Tinto Alcan will own 49 percent of the venture and draw on a 30-year bauxite reserve, in northern Saudi Arabia at Az Zabirah, to supply the smelter's alumina refinery. Maaden is targeting 2012 for the smelter's start-up. The project is a major diversification for Maaden which at present generates most of its income from gold mining in the Kingdom but this will be dwarfed by the aluminum project, as well as by a phosphate venture now being developed. The phosphate project is being carried out with Saudi Basic Industries Corporation at a cost of $4.5 billion. This involves extracting phosphates in the Jalamid area of central northern Saudi Arabia and constructing a processing plant with a capacity to produce 3 million tons-a-year of di-ammonium phosphate fertilizer.
