Financing for Alcoa Inc.'s (AA) vast aluminum project in Saudi Arabia is almost complete, with local banks providing the lion's share, the chief executive of the US producer told Dow Jones Newswires. The project, a joint venture with Ma'aden, the Saudi Arabian Mining Company will be the kind of low-cost opportunity that Alcoa looks for as it develops its business going forward, Klaus Kleinfeld said. “Everything that brings us further down the cost curve and makes us more competitive, we would consider. This (Ma'aden) is a great opportunity for us,” he said. “We made a round of presentations to banks and there was a lot of strong interest from the Middle East banks and also from international banks. The financing is almost in place and should be completed shortly. The major share of the financing comes from Saudi banks,” he said. The joint venture, in the new industrial zone of Raz Az Zawr on Saudi Arabia's east coast, will create the largest integrated aluminum project that has ever been built. Initial annual capacities will be a bauxite mine of 4.0 million metric tons, an alumina refinery of 1.8 million tons, an aluminum smelter of 740,000 tons and a rolling mill of between 250,000 tons and 460,000 tons. Alcoa started out with a 25.1 percent stake in the venture and has an option to bring it up to 40 percent. First production from the smelter and rolling mill is due in 2013, and first output from the mine and refinery is expected in 2014. The project requires a vast infrastructure - including a new city - that many doomsayers didn't think would ever materialize. But Kleinfeld, who joined Alcoa in 2007 from Germany's Siemens AG (SI), said the port and city are now in place, a rail link is almost finished and only the power plant remains to be built. “We have a gas allocation so that's why this is at the lowest point on the cost curve, or pretty much every element of it, from the refinery to the smelter to the rolling mill,” Kleinfeld said. “It also has expansion options, even though it's already big at startup. This is a great opportunity for us to further increase our position on the primary side as well as to locate ourselves in a region which is close to where a lot of the new growth happens these days.”
