The Saudi mining company Ma'aden yesterday started operations at its Ras Al Khair plant to produce diammonium phosphate.
The US$5.6 billion phosphate project is fully operational and the plant, which is 90km north of Jubail in the Eastern Province, will gradually increase its production to its designed capacity of 3 million tonnes a year, the state-run producer said in a filing to the Saudi bourse yesterday.
Ma'aden went public in 2008, raising 10.5bn Saudi riyals to start two projects: a phosphate joint venture with Saudi Basic Industries Corporation (Sabic), the world's largest petrochemicals maker; and an aluminium joint venture with Alcoa.
Ma'aden is attempting to enter the broad minerals farming sector and diversify beyond its current success as a gold miner, where it earns 95 per cent of its revenues from 9.2 million ounces of potential reserves.
The company has had two recent discoveries and plans to triple its gold production by 2015. Ma'aden sells gold on the spot market at the London Metal Exchange.
Ma'aden rallied 25.6 per cent last year, tracking gains in the spot gold market. Gold rose 30 per cent in the same period, underpinned by persistent doubts about the economic and financial health of the US and Europe and the measures governments and central banks might have to take to try to put things right.
Investors will be eyeing updates on the aluminium project. Stage one, expected to begin next year, consists of a smelter with an annual capacity of 740,000 tonnes and an aluminium rolling mill with an initial capacity of 380,000 tonnes a year.
Stage two, expected to start a year after stage one, consists of a bauxite mine with an annual capacity of 4 million tonnes and an alumina refinery with an annual capacity of 1.8 million tonnes.
Shares of Ma'aden and Sabic declined 0.3 per cent and 0.2 per cent, respectively, to 28.90 riyals and 94.25 riyals on the Tadawul All-Share Index exchange yesterday.