The Saudi Arabian Mining Company (Ma'aden) has entered into heads of agreement with The Mosaic Company and the Saudi Basic Industries Corporation (SABIC) to jointly develop a SAR26bn ($7bn) phosphate production facility in the country.
Under the deal, Ma'aden will hold 60% equity in the project while Mosaic, a producer of phosphate fertilisers, and SABIC, a petrochemical company, will own 25% and 15% stakes respectively.
The facility, to be built at Wa'ad Al Shammal Mineral Industrial City, will include new mining and processing plants.
Additional processing plants will also be set up at Ras Al Khair Mineral Industrial City and the two facilities will be connected by the North South Railway.
Production at the new facilities is expected to begin in second half of 2016 with a total annual production capacity of approximately 16 million tonnes.
The facilities will produce approximately three million tonnes of fertiliser products such as DAP/MAP and NP/NPK as well as approximately 440,000t of downstream products such as purified phosphoric acid, sodium tripolyphosphate, and dicalcium phosphate and monocalcium ohosphate.
Ma'aden believes that the project will double its existing phosphate production while adding new products to its production capabilities.
Ma'aden president and CEO Khalid Al-Mudaifer said this project represents not only an important milestone in Ma'aden's growth but it will also be an important contributor to the development of the northern region of Saudi Arabia.
"The partnership with Mosaic and SABIC brings great value to the project in terms of technical, operating and marketing experience and we expect this project to be an industry leader in terms of its operational excellence, commitment to sustainability and contribution to the socio-economic development of the Kingdom," Al-Mudaifer added.
Mosaic plans to invest about $1bn in the Saudi venture over four years beginning this year and market about 25% of the output.
Image: The officials of Ma'aden, The Mosaic Company and the Saudi Basic Industries (SABIC) sign the agreement to form phosphate joint venture in Saudi. Photo: Saudi Arabian Mining Company.