Alcoa has reduced its stake in a planned $10.8-billion aluminium complex in Saudi Arabia by more than a third, its partner said on Saturday, the second time a foreign partner reviews its position in the plan. State-run Saudi Arabian Mining Co (Maaden) said in a statement that Alcoa's stake was reduced to 25.1 percent from 40 percent and called the move “a rejig in (Maaden's) capital stake in the joint-venture project with Alcoa” without giving more details. The stake cut corresponds to a reduction of Alcoa's investment to $2.71 billion from $4.32 billion. Maaden – whose stake in the joint-venture rose to 74.9 percent from 60 percent previously – said the project's size and start date would not be altered because of this change. Alcoa agreed in December to take the 40 percent stake in the Ras Azzour plant with Maaden after Rio Tinto Alcan abandoned its 49 percent stake about a year earlier in a similar plan with Maaden because Rio Tinto was unable to obtain financing due to the global financial crisis. The project was then budgeted at $8 billion. Since its agreement with Alcoa, Maaden has not made any announcements about progress in raising financing for the project which aims to start production from 2013. The Ras Azzour plan is the biggest of investments Maaden pledged to deliver in 2008 when it raised SR9.25 billion ($2.47 billion) in an IPO that was open only to Saudi investors. Maaden's deal with Alcoa provided for the setting up of a 1.8 million ton-per-year refinery, a 740,000 ton-per-year smelter, a bauxite mine with an annual capacity of 4 million tonnes and a rolling mill with a capacity of up to 460,000 tons. The smelter and mill are slated to start production in 2013 while the refinery and mine would come online in 2014. Alcoa's Chief Executive Klaus Kleinfeld said in December the $10.8 billion cost of the project would be split, with the US firm and its partners paying 40 percent while Maaden is to handle 60 percent. Maaden is investing about SR60 billion to develop the Kingdom's phosphate, bauxite, gold and industrial minerals and help reduce reliance on oil. Maaden's decision to raise its stake to 74.9 percent from 60 percent won't impact the schedule and size of the project, the Riyadh-based miner said in a statement on the Saudi bourse website on Saturday. The Saudi mining company in December signed a contract with Alcoa to build the SR40.5 billion ($10.8 billion) industrial complex to supply aluminum to Saudi Arabia and global markets as part of the kingdom's attempt to develop its mineral resources. The world's largest oil exporter plans to spend $400 billion on roads, energy and infrastructure projects over five years starting last year to stimulate the economy. The aluminum project includes a bauxite mine in Qassim, a province in northeast Saudi Arabia, with a production capacity of 4 million metric tons. The material will be shipped by rail to a 1.8 million metric ton-a-year alumina refinery and a 740,000 metric ton-a-year aluminum smelter in Ras Az Zawr on the Gulf. The smelter will start production in 2013 and the refinery in 2014. Maaden is studying “all the financial tools” available to finance the project after increasing its stake, according to the statement. It didn't provide a reason for the change in ownership of the project.
