Saudi Arabia Mining Company (Ma'aden), Saudi Arabia

Saudi Arabian Mining Company (Ma'aden) is developing an integrated fertiliser production complex which will be based on phosphate reserves located at Al-Jalamid, in the north of Saudi Arabia. The phosphate concentrate produced at the mine will be transported by rail to Ras Az Zawr where it will be processed to produce the feedstocks required for the production of 3mtpa of diammonium phosphate (DAP) fertiliser.

The phosphate fertiliser complex, which includes sulphuric acid, phosphoric acid and DAP, is being built at Ras Az Zawr and is due to be completed during 2010. As well as fertiliser production facilities, the project includes the construction of power and desalination plants

PARTNERS

During the second half of 2007, Sabic, a leading producer of petrochemicals based in Saudi Arabia, announced that it had finalised a joint venture agreement with Ma'aden.

Under the terms of the agreement Sabic has a 30% equity share in the fertiliser production operation, with Ma'aden retaining the remaining 70%.

It is said that, once completed, the facilities will represent the world's largest fully integrated fertiliser production operation. Ma'aden will provide its expertise in the phosphate industry with Sabic providing technology and expertise in the area of nitrogen fertilisers, as well as marketing.

FINANCING

The total cost of the project is put at $4.5bn. During the early part of 2008, Ma'aden approached banks to arrange a syndicated loan of $2.3bn.

ADVISORS

During the second half of 2007, the global law firm Baker and McKenzie announced that it had provided Ma'aden with advice on the development of the phosphate mine and fertiliser production project including the signing of engineering, procurement and construction contracts with three international contractor groups for the development of process plants.

ENGINEERING AND PROJECT MANAGEMENT

US-based WorleyParsons was appointed by Ma'aden to provide engineering and project management and consulting (PMC) services for the phosphate project.

POWER AND DESALINATION PLANTS

During December 2007, Ma'aden announced that it had awarded contracts to Chinese and Korean companies for the construction of the power and desalination plants. The contracts had a total value of $630m.

Guizhou Hongfu Industry and Commerce Development Company was awarded a $350m contract to provide a beneficiation plant. This will remove calcium and magnesium carbonates from the phosphate deposit ore to produce 4.6mtpa of dry phosphate concentrate.

At the same time Korea's Hanwha Engineering and Construction Company was awarded a $280m contract to provide the power and desalination plants. These facilities will be located at the phosphate fertiliser complex in Ras Az Zawr.

The power plant will consist of 2 × 66% Siemens Condensing Steam Turbines and Generators with an output of 126.76MW base load and 145.53MW peak load. Depending on final load examination the phosphate project is expected to be a net exporter to the grid.

The desalination plant will process up to 40,000m³ of water each day.

AMMONIA PLANT

Samsung Engineering was awarded an engineering, procurement and construction (EPC) contract during May 2007 for Ma'aden's ammonia plant. The contract was valued at $950m.

AMMONIA PROCESS LICENCE

In October 2007 Samsung awarded Uhde a contract which covered the process licence and basic engineering as well as the supply of specialist equipment for a single-train ammonia plant. The facility will have a capacity of 3,300t/day.

Uhde did not disclose the value of its contract. Uhde will supply its Dual-Pressure Process technology for the ammonia plant. The process is said to be particularly reliable and environmentally friendly.

PHOSPHORIC ACID PLANTS

Three world-scale phosphoric acid plants, with a combined capacity of 1.5mtpa, are being built by Litwin Europe Middle East, a company based in the Netherlands. The three facilities are being built in Ras Az Zawr and are due for completion in 2010.

Litwin has selected Tekfen Construction and Installation Company to provide construction services for the plant under a consortium agreement. The three production lines are based on the Yara Semi-hydrate process technology.

The total value of the engineering, procurement and construction contract is put at $525m.

SULPHURIC ACID PLANT

Finland's Outotec is providing Ma'aden with what is said to be the world's largest sulphuric acid production facility with an output of 13,500t/day. All of the acid will be used for the production of phosphate fertiliser.

DIAMMONIUM PHOSPHATE (DAP) PLANT

Spain's Dragados was awarded a contract to provide the 3mtpa diammonium phosphate fertiliser production plants. The value of the contract was not disclosed.

Dragados also awarded Nesma & Partners the main subcontract package for the DAP plant. Under the subcontract package the company will be responsible for the total construction of the project and other services including all civil and infrastructure, heavy foundations, piping fabrication, electrical instrumentation and final commissioning.

ELECTRICAL SUBSTATIONS

During February 2008, Ma'aden announced that it had signed a $100m contract with ABB Contracting for two electrical substations that will connect the phosphate project at Ras Az Zawr to the national grid. The contract covers engineering, procurement, construction, testing, commissioning and completion of 380kV and 115kV gas insulated switch gear substations.