Maaden close to realising aluminium ambitions

The first shipment of alumina is now making its way towards the Maaden/Alcoa smelter being built at Ras al-Khair in Saudi Arabia’s Eastern Province and its significance should not go unnoticed.

The smelter is part of the $10.8bn aluminium complex being built in the new industrial city and if anything encapsulates how serious Riyadh is about its industrial diversification plans it is this project.

Although the GCC has a long tradition of aluminium production stretching back to the 1970s, the Maaden/Alcoa joint venture will be the first in Saudi Arabia. It will eventually be one of the few smelters in the world that controls the full value chain from bauxite mining to the manufacture of end-products, such as can and automotive sheeting.

Riyadh must be happy with the way that Ras al-Khair is developing. Phosphates are already being processed into fertilisers at the city by Sabic and Maaden, and aluminium is soon to follow. Such progress contrasts sharply with other industrial cities in the kingdom that are struggling to attract investment.

The kingdom’s dilemma is that it operates two industrial cities on either side of the country that have been overwhelming successes since their formation in the 1970s.

Jubail on the Gulf coast is considered one of the foremost centres of heavy industry in the world and it is still growing at incredible speed. With multibillion-dollar schemes still under construction and the promise of more to come. it is easy to understand Jubail’s attraction to foreign investors.

Yanbu on the Red Sea coast is slightly smaller in scale, but no less impressive. Over the next 20 years, the city could grow even more rapidly than Jubail if the expected huge oil reserves under the Red Sea are confirmed.

Ras al-Khair has been established as a hub for the development of the kingdom’s minerals resources and it has flourished under this remit. The vast majority of the fertiliser production will be exported, but Riyadh must be hoping that a large percentage of the aluminium is used in-kingdom.

However, what the kingdom most cherishes is automotive production and an ideal site for any future development of car manufacturing would be Ras al-Khair. An automotive sheet plant is already under construction as part of the Maaden/Alcoa complex and there are reports of some manufacturers showing interest.

There has been a long-held hope in the kingdom that Saudi Arabia could produce anything up to 500,000 vehicles by 2030, but this figure is seen as exceptionally optimistic by most industry professionals.

It is still early days however, and Ras al-Khair needs to concentrate on getting its anchor industries in place and fully operational before thoughts can turn to downstream sectors.

The alumina is on its way and the smelter is almost ready to start its initial commissioning phase. The kingdom is close to producing its first aluminium and will soon be ready to take its next step. When the first pot-line fires up, Maaden should take a minute to congratulate itself on taking such a significant first step.